ACCEPTED 11-16-00346-CV ELEVENTH COURT OF APPEALS EASTLAND, TEXAS 6/7/2017 12:19:34 PM SHERRY WILLIAMSON CLERK
Case No. 11-16-00346-CV
FILED IN 11th COURT OF APPEALS EASTLAND, TEXAS IN THE COURT OF APPEALS 06/07/17 12:19:34 PM FOR THE ELEVENTH DISTRICT OF TEXASSHERRY WILLIAMSON Clerk EASTLAND, TEXAS
SOUTHSIDE PARTNERS, Appellant
V.
COLLAZO ENTERPRISES, LLC, Appellee
On Appeal from Cause No. CV1408293A; in the 35th Judicial District Court of Brown County, Texas
Honorable Rick Morris, Judge Presiding
APPELLEE’S BRIEF
Andrew Oliver State Bar No. 24046556 Oliver Law Office 9951 Anderson Mill Road, Suite 201 Austin, Texas 78750 Telephone: (512) 233-1103 Fax: (512) 551-0330 aoliver@oliverlawoffice.com
ATTORNEY FOR APPELLEE COLLAZO ENTERPRISES, LLC Identity of Parties and Counsel
Appellee Collazo Enterprises, LLC makes the following identification
of parties and counsel:
Appellant: Southside Partners
William W. Ruth 1406 E. Main, Suite 200 Fredericksburg, Texas 78624 (325) 642-9802 (325) 641-0527 (Facsimile) TRIAL AND APPELLATE COUNSEL FOR SOUTHSIDE PARTNERS
Charles Scarborough P.O. Box 356 Abilene, Texas 79604 (325) 672-8477 APPELLATE COUNSEL FOR SOUTHSIDE PARTNERS
James Chapman 501 W. Main #109 Fredericksburg, Texas 78624 (830) 997-3269 APPELLATE COUNSEL FOR SOUTHSIDE PARTNERS
Appellee: Collazo Enterprises, LLC
Andrew Oliver State Bar No. 24046556 Oliver Law Office 9951 Anderson Mill Road, Suite 201 Austin, Texas 78750 Telephone: (512) 233-1103 Fax: (512) 551-0330 aoliver@oliverlawoffice.com TRIAL AND APPELLATE COUNSEL FOR COLLAZO ENTERPRISES, LLC
ii Table of Contents
Identity of Parties and Counsel…………………………………….……..ii
Table of Contents…………………………………………………...…….iii
Index of Authorities………………………………………………..….….vi
Statement of the Case……………………………………………….…...viii
Statement Regarding Oral Argument…………………….………………..x
Issues Presented…………………………………………….……………..xi
Statement of Facts……………………………………………...…………..1
Summary of the Argument……………………………………..…….........3
Argument…………………………………………………………...……...6
I. Collazo Enterprises, LLC is a Bona Fide Purchaser as a Matter of Law ………………….……….…………….…………6
A. There is No Disputed Issue of Material Fact With Respect to Collazo Enterprises, LLC’s Lack of Actual Notice of Southside Partners’ Claims……………………………..…………6
i. Collazo Enterprises, LLC Satisfied its Evidentiary Burden…………………………………………7
ii. Southside Partners Failed to Create a Disputed Issue of Material Fact Regarding Actual Notice…………...8
a. Evidence Submitted Prior to the Summary Judgment Hearing.............................................................8
b. Evidence Submitted After the Summary Judgment Hearing……………………………………….9
iii B. There is No Disputed Issue of Material Fact With Respect to Collazo Enterprises, LLC Not Being Charged with Constructive Notice of Southside Partners’ Claims………..10
C. There is No Disputed Issue of Material Fact With Respect to Collazo Enterprises, LLC Paying Valuable Consideration for the Property………………………...13
i. Collazo Enterprises, LLC Satisfied its Evidentiary Burden………………………………………..13
ii. Southside Partners Failed to Create a Disputed Issue of Material Fact Regarding Valuable Consideration……………………………………………...14
a. Evidence Submitted Prior to the Summary Judgment Hearing..........................................................14
b. Evidence Submitted After the Summary Judgment Hearing……………………………………...15
II. The Special Warranty Deed to Collazo Enterprises, LLC Gives it Standing to Assert the Affirmative Defense of Bona Fide Purchaser ………………………………………….....16
III. The Trial Court Did Not Abuse Its Discretion by Granting the Motion for Summary Judgment Because Southside Partners Failed to Comply With Procedures for Requesting Additional Discovery ………………17
A. Motion for Continuance Not Timely Filed………………………18
B. Southside Partners Did Not Preserve Issue for Appeal………….19
C. Trial Court Did Not Abuse Its Discretion………………………..20
D. No Due Process Violation………………………………………..21
IV. Southside Partners Did Not Argue Issues Related to Chains of Title at Trial and Waived this Argument on Appeal…22
iv Prayer………………………………………………………………………25
Certificate of Compliance………………………………………………….26
Certificate of Service………………………………………………………26
v Index of Authorities
Cases
Alford v. Krum, 671 S.W.2d 870, 872 (Tex. 1984)………………………...11
Castleberry v. New Hampshire Ins. Co., 367 S.W.3d 505 (Tex. App.-Texarkana 2012, pet. denied)……………………….4, 10, 16, 23
Choctaw Properties, L.L.C. v. Aledo I.S.D., 127 S.W.3d 235 (Tex. App.- Waco 2003, no pet.)……………………………………………7
Coastal Cement Sand, Inc. v. First Interstate Cred Alliance, Inc. 956 S.W.2d 562, 567 (Tex. App.-Houston[ 14th Dist.] 1997, pet. denied)...24
Cockrell v. Tex. Gulf Sulphur Co., 299 S.W.2d 672, 675 (Tex. 1956)…….11
Colvin v. Alta Mesa Resources, Inc., 920 S.W.2d 688 (Tex. App.- Houston[1st Dist.] 1996, writ denied)…………………………..6
Cooksey v. Sinder, S.W.2d 253 (Tex. 1984)………………………………...6
Davis v. Andrews, 361 S.W.2d 419 (Tex. Civ. App.-Dallas 1962, writ ref’d n.r.e.)……………………………..11
Graham v. Prochaska, 429 S.W.3d 650, 655 (Tex. App.- San Antonio 2013, pet. denied)……………………………….11
Hue Nguyen v. Chapa, 305 S.W.3d 316 (Tex. App.-Houston[14th Dist.] 2009, pet denied)…………………………..6
Huling v. Moore, 194 S.W. 188 (Tex. Civ. App.- San Antonio 1917, writ refused)…………………………23
Johnson v. Marti, 214 S.W. 726 (Tex. Civ. App.- Fort Worth 1919, writ ref’d n.r.e.)……………………….16
Jones v. Wal-Mart Stores, Inc. 892 S.W.2d 144, (Tex. App.-Houston 1995, no writ)…………………….24
vi Luckel v. White, 819 S.W.2d 459 (Tex. 1991)……………………………..11
Mathews v. Eldridge, 424 U.S. 319 (1976)………………………………...21
Natural Gas Pipeline Co. of America v. Justiss, 397 S.W.3d 150, 156 (Tex. 2012)………………………………………….13
Neeley v. Intercity Management Corp., 623 S.W.2d 942 (Tex. App.-Houston [1st Dist.] 1981, no writ)……………………………...14
Nguyen v. Short, How, Frels & Heitz, LLC, 108 S.W.3d 558 (Tex. App.- Dallas 2003, pet. denied)………………………………...5, 6, 19
Nicholson v. Memorial Hosp. System, 722 S.W.2d 746, 749 (Tex. Civ. App.-Houston[14th Dist.] 1986, writ ref’d n.r.e)……………….14
Paul v. Houston Oil Co. of Tex., 211 S.W.2d 345, 356 (Tex. Civ. App.-Waco 1945, writ ref’d n.r.e.)……………………………..16
Southwest Country Enterprises v. Lucky Lade Oil Co., 991 S.W.2d 490 (Tex. App.- Fort Worth 1999, pet. denied)………………19
Speck v. First Evangelical Church of Houston, 235 S.W.3d 811 (Tex. App.-Houston[1st Dist.] 2007, no pet.)……………………4, 10, 16, 23
Veltmann v. Damon, 701 S.W.2d 247, 247-248 (Tex. 1985)………………11
Yowell v. Piper Aircraft Corp., 703 S.W.2d 630, 635 (Tex. 1986)………...20
Statutes
Tex. R. Civ. P. 166a(c)…………………………………………..4, 10, 16, 22
Tex. R. Civ. P. 166a(d)………………………………………………………8
Tex. R. Civ. P. 166a(f)……………………………………………………..24
Tex. R. Civ. P. 166a(g)…………………………………………………18, 19
Tex. R. App. P. 33.1(a)………………………………………………...20, 23
vii Statement of the Case
Appellant Southside Partners filed suit on August 1, 2014 seeking,
among other relief against different parties, to set aside the sale of property
from the United States of America to Appellee Collazo Enterprises, LLC.
On July 20, 2015, Appellee Collazo Enterprises, LLC filed a traditional
motion for summary judgment on its affirmative defense of bona fide
purchaser [C.R. 118]. This motion was heard on August 14, 2015 [R.R. 4].
Appellant Southside Partners was not seeking a motion to compel or alleging
non-compliance with discovery requests against Appellee Collazo
Enterprises, LLC [R.R. 12].
After the hearing and without requesting leave of court, Appellant
Southside Partners began filing additional responses to Appellee Collazo
Enterprises, LLC’s traditional motion for summary judgment that raised new
arguments, factual allegations, and attached evidence that is being relied on
by Appellant Southside Partners in this appeal [C.R. 275-299, 300-327, 336-
360]. Appellee Collazo Enterprises, LLC responded to these various post-
hearing filings [C.R. 328-335, 361-363].
On April 3, 2016 the Court granted Appellee Collazo Enterprises,
LLC’s traditional motion for summary judgment [C.R. 364]. On May 20,
viii 2016, Appellee Collazo Enterprises, LLC filed an Amended Motion for
Entry of Order [C.R. 364].
On June 17, 2016, Appellant Southside Partners filed his Objections
to Defendant Collazo Enterprises, LLC’s Proposed Order and Motion for
Continuance [C.R. 367]. On June 23, 2016, Appellee Collazo Enterprises,
LLC filed its Reply to Plaintiff’s Objection to Proposed Order and Motion
for Continuance [C.R. 403].
On July 7, 2016, the trial court signed the proposed form of Order
Granting Defendant Collazo Enterprises, LLC’s Traditional Motion for
Summary Judgment that was submitted by Appellee Collazo Enterprises,
LLC [C.R. 409].
On August 8, 2016, Appellee Southside Partners filed a Motion for
Reconsideration [C.R. 411], which was addressed when Appellant removed
the case to federal court. The case was then remanded back to state court.
On December 2, 2016, Appellee Southside Partners filed a Notice of
Appeal [C.R. 427].
On February 2, 2017, the claims between Appellant Southside
Partners and Appellee Collazo Enterprises, LLC were severed into a separate
cause which is being appealed herein [C.R. 433-436].
ix Statement Regarding Oral Argument
Appellee Collazo Enterprises, LLC does not believe oral argument is
necessary. The law regarding the affirmative defense of bona fide purchaser
is well-established and the nature of the arguments being raised by Appellant
Southside Partners are of such a nature that the Court would most likely not
benefit from oral argument. However, to the extent that the Court wishes to
hear oral argument from Appellant Southside Partners, then in such event,
Appellee Collazo Enterprises, LLC requests that it also be allowed to present
oral argument.
x Issues Presented
1. Was Collazo Enterprises, LLC entitled to judgment as a matter
of law on its affirmative defense of bona fide purchaser? The trial court
correctly held that Collazo Enterprises, LLC satisfied its evidentiary burden
and was entitled to judgment as a matter of law on its affirmative defense of
bona fide purchaser.
2. Did Southside Partners waive its arguments and evidence that
were not raised for the first time until after the hearing on Collazo
Enterprises, LLC’s motion for summary judgment? As a matter of law, the
post-hearing filings and evidence submitted by Southside Partners were
waived and should not be considered by the Court because Southside
Partners did not request leave of the trial court to file the evidence and have
it considered by the trial court.
3. Did Southside Partners timely file his motion for continuance?
As a matter of law, a motion for continuance filed after a court has ruled on
motion for summary judgment is untimely and cannot be raised in an appeal.
4. Did Southside Partners preserve the issue of his motion for
continuance for review by this Court? As a matter of law, Southside Partners
did not preserve this issue for appeal because he never set his motion for
continuance for hearing or obtained a ruling on the motion for continuance.
xi 5. Did the trial court violate Southside Partners’ due process rights
by granting Collazo Enterprises, LLC’s Traditional Motion for Summary
Judgment despite the post-hearing filings of Southside Partners? Because
Southside Partners did not comply with the Texas Rules of Civil Procedure
there was no violation of Southside Partners’ due process rights.
xii Statement of Facts
Appellee Collazo Enterprises, LLC would allege and show the
pertinent facts for the Court to consider are as follows:
Appellant Southside Partners (William W. Ruth) purchased the
property in question (the “property”) at a July 2002 tax sale [C.R. 7]. On
September 13, 2002, Appellant Southside Partners (as William W. Ruth)
executed a Special Warranty Deed conveying the property to William Taylor
Crow, Colby Crow, and Tanner Crow (the “Crown children”) [C.R. 125-
127]. The Special Warranty Deed did not reserve any interest in the
property in Appellant Southside Partners [C.R. 125].
On September 12, 2006, James A. Crow filed Cause No. CV0609369;
James A. Crow v. William Taylor Crow, et al.; in the 35th Judicial District
Court of Brown County, Texas (“Crow Lawsuit”) against the Crow children
who were the owners of record of the property at that time [C.R. 129]. On
May 11, 2007, the trial court in the Crow Lawsuit rendered judgment that
James A. Crow was the owner of the property [C.R. 143-144].
On April 12, 2013, an Agreed Final Order Regarding Forfeiture
Regarding 26.63 Acres of Land Property was signed in a federal criminal
proceeding filed by the United States of America against James Crow [C.R.
1 146-149]. As a result of the forfeiture, the United States of America
acquired title to the property [C.R. 147-148].
On June 9, 2014, the United States of America conveyed the property
to Appellee Collazo Enterprises, LLC by Special Warranty Deed [C.R. 150-
158]. The purchase price for the property was $25,000 [C.R. 159]. The
property is in a flood zone [C.R. 159]. At the time Appellee Collazo
Enterprises, LLC acquired the property, Lou Collazo, who is the principal of
Appellee Collazo Enterprises, LLC was not aware of any claims of William
Ruth, either individually or as Southside Partners or under any other name or
alias was claiming an interest in the property [C.R. 159].
There are a number of other factual allegations contained in the
Statement of Facts section of Appellant Southside Partners’ Brief of
Appellant. However, many of these facts should be completely disregarded
by the Court because they were not alleged and evidence was not submitted
to support these facts until after the hearing on the motion for summary
judgment.
2 Summary of the Argument
As plead at the time of the hearing on Collazo Enterprises, LLC’s
Traditional Motion for Summary Judgment, this case primarily involved a
straightforward analysis of documents in the chain of title to Collazo
Enterprises, LLC and whether or not those documents evidenced the
ownership claim of Southside Partners to an undivided one half (1/2) interest
in the property. Southside Partners’ own petition states that he purchased
the property at a tax sale prior to September 13, 2002 [C.R. 7], that he then
gave a deed on or about September 13, 2002 to the Crow children [C.R. 7],
and that James Crow later filed suit against only the Crow children to put
title to the property in his name [C.R. 7-11]. The question of law before the
Court is whether or not the deed to the Crow children reserved an interest in
the property in William W. Ruth, who is Southside Partners.
Collazo Enterprises, LLC is unquestionably a bona fide purchaser for
value as a matter of law and satisfied its burden at the hearing on its
Traditional Motion for Summary Judgment. As argued in Collazo
Enterprises, LLC’s Traditional Motion for Summary Judgment, the
Warranty Deed signed by William W. Ruth to the Crow children did not
reserve or except any interest from the conveyance, and thus there would
have been no need to join William W. Ruth/Southside Partners in the lawsuit
3 filed by James Crow because he did not appear to be an owner of record
[C.R. 120-122]. Thus, there was no notice of Southside Partners’ claims.
Perhaps as a result of sensing the deficiency of his summary judgment
arguments, Southside Partners has embarked on an ever changing story (that
continues through his Brief of Appellant) in an attempt to defeat Collazo
Enterprises, LLC’s Traditional Motion for Summary Judgment. In what
began as a baseless and unpled allegation that the Warranty Deed of record
was not signed by Southside Partners, has continued to further evolve
beyond the facts as pled in Southside Partners’ petition to the point of
absurdity. Fortunately for this Court, it is spared from having to wade
through Southside Partners’ arguments filed after the summary judgment
hearing because Southside Partners failed to request leave of court for his
arguments and evidence to be considered. As a result, these arguments and
evidence have been waived and are not part of the summary judgment
record. Tex. R. Civ. P. 166a(c); Castleberry v. New Hampshire Ins. Co.,
367 S.W.3d 505 (Tex. App.-Texarkana 2012, pet. denied); Speck v. First
Evangelical Church of Houston, 235 S.W.3d 811 (Tex. App.-Houston[1st
Dist.] 2007, no pet.). Thus, the Court should not consider any of Southside
4 Partners’ post-hearing filings when reviewing the trial court’s ruling on
Collazo Enterprises, LLC’s Traditional Motion for Summary Judgment1.
Similarly, Southside Partners did not file a motion for continuance
until after the trial court granted Collazo Enterprises, LLC’s Traditional
Motion for Summary Judgment, which was untimely. Nguyen v. Short,
How, Frels & Heitz, LLC, 108 S.W.3d 558, 562-563 (Tex. App.- Dallas
2003, pet. denied). In addition to not timely filing his motion, Southside
Partners never requested a hearing on his motion for continuance or obtained
a ruling on the continuance. As a result, he has waived his right to complain
on appeal about the trial court not granting his motion for continuance.
Because of Southside Partners’ failure to adhere to the Texas Rules of
Civil Procedure, it will not be an abuse of discretion or violation of
Southside Partners’ due process rights to disregard his post-hearing filings,
and giving them their proper weight- which is none- the Court should affirm
the trial court’s granting of Collazo Enterprises, LLC’s Traditional Motion
for Summary Judgment.
1 However, even if Southside Partners did not waive his ability to have his post-hearing evidence considered by the Court, which is assumed solely for the sake of argument, there are still numerous evidentiary issues that exist with Southside Partners’ evidence. For example, much of the evidence is either conclusory or based on hearsay or unauthenticated and thus is unquestionably not competent summary judgment evidence.
5 Argument
I. Collazo Enterprises, LLC is a Bona Fide Purchaser as a Matter of Law
In order to prevail on its affirmative defense of bona fide purchaser,
Collazo Enterprises, LLC was required to show that it made a good faith
purchase of the property for valuable consideration without actual or
constructive notice of Plaintiff’s claim. Cooksey v. Sinder, S.W.2d 253 (Tex.
1984); Colvin v. Alta Mesa Resources, Inc., 920 S.W.2d 688 (Tex. App.-
Houston[1st Dist.] 1996, writ denied). A party’s status as a bona fide
purchaser is a question of law when there is no room for ordinary minds to
differ about the conclusions that can be drawn from the evidence. Hue
Nguyen v. Chapa, 305 S.W.3d 316 (Tex. App.-Houston[14th Dist.] 2009, pet
denied).
As will be shown below, Collazo Enterprises, LLC presented
competent summary judgment evidence on the required elements of its
affirmative defense of bona fide purchaser, and Southside Partners failed to
provide competent summary judgment evidence in response. The trial court
correctly granted Collazo Enterprises, LLC’s Traditional Motion for
Summary Judgment, and this Court should affirm the trial court’s judgment.
A. There is No Disputed Issue of Material Fact With Respect to Collazo Enterprises, LLC’s Lack of Actual Notice of Southside Partner’s Claims
6 i. Collazo Enterprises, LLC Satisfied its Evidentiary Burden
In support of its Traditional Motion for Summary Judgment, Collazo
Enterprises, LLC attached the Affidavit of Collazo Enterprises, LLC, which
was signed by Lou Collazo, who is the principal of Collazo Enterprises,
LLC. In the affidavit, Lou Collazo stated that he was never informed of the
claims of William Ruth, either individually or as Southside Partners, to the
property [C.R. 159-160]. This clear and unequivocal testimony supports the
claim that Collazo Enterprises, LLC did not have actual notice of Southside
Partners’ claims.
The Court should overrule Southside Partners’ objection that the
affidavit of Lou Collazo is conclusory on the issue of actual notice. A
statement is only conclusory if it lacks the underlying facts to support it.
Choctaw Properties, L.L.C. v. Aledo I.S.D., 127 S.W.3d 235 (Tex. App.-
Waco 2003, no pet.). Not only does the affidavit contain the necessary
underlying facts, such as that Mr. Collazo was personally involved in the
transaction and was the only individual of Collazo Enterprises, LLC
involved in the purchase of the property, but he goes on to say that he was
never informed of the claims of Southside Partners.
What more was needed to establish the lack of actual notice?
Certainly the answer is nothing, and for the Court to agree with Southside
7 Partners that such testimony was conclusory, would require Mr. Collazo to
state each and every person who did not inform him of the claims of
Southside Partners, which is certainly not required for this statement in the
affidavit to not be conclusory.
Thus, having presented evidence that there was no actual knowledge
of the claims of Southside Partners, it was incumbent upon Southside
Partners to submit competent summary judgment evidence seven days
before the hearing to raise a fact issue on this point and show that Lou
Collazo had been informed of Southside Partners’ claims. Tex. R. Civ. P.
166a(d).
ii. Southside Partners Failed to Create a Disputed Issue of Material Fact Regarding Actual Notice
a. Evidence Submitted Prior to the Summary Judgment Hearing
At the time of the hearing, Southside Partners failed to submit any
evidence of any kind that purported to show an individual contacted Lou
Collazo and advised him of Southside Partners’ claims. At best, Southside
Partners submitted evidence that he told Steve Jumes, an attorney
representing the United States of America, about his claims. Even if you
assume this statement is true for the sake of argument, there was no evidence
that Steve Jumes then informed Collazo Enterprises, LLC about his
conversations with Southside Partners.
8 Similarly, Southside Partners did not plead or submit evidence on any
activities conducted by him on the property that would have given Collazo
Enterprises, LLC notice of his claims. However, given that the property is
an unimproved tract located in a flood plain [C.R. 159, 189], Southside
Partners would be hard pressed to show how he allegedly possessed the
property in such a manner so as to give Collazo Enterprises, LLC notice of
his claims.
It was incumbent upon Southside Partners to timely present evidence
on this issue of whether or not Collazo Enterprises, LLC had actual notice of
Southside Partners’ claims, and Southside Partners failed to present any such
evidence at the hearing on Collazo Enterprises, LLC’s Traditional Motion
b. Evidence Submitted After the Summary Judgment Hearing
After the hearing on Collazo Enterprises, LLC’s Traditional Motion
for Summary Judgment, Southside Partners submitted four of his own
affidavits and other evidence that unsuccessfully attempt to create a fact
issue with regard to actual notice. At no time did Southside Partners request
leave of Court for this evidence to be considered as part of the summary
judgment record. It is therefore not a part of the summary judgment record
and Southside Partners has waived his right to rely on this evidence. Tex. R.
9 Civ. P. 166a(c); Castleberry v. New Hampshire Ins. Co., 367 S.W.3d 505
(Tex. App.-Texarkana 2012, pet. denied); Speck v. First Evangelical Church
of Houston, 235 S.W.3d 811 (Tex. App.-Houston[1st Dist.] 2007, no pet.).
The Court should not consider any of Southside Partners’ filings that were
submitted to the trial court after the hearing.
B. There is No Disputed Issue of Material Fact With Respect to Collazo Enterprises, LLC’s Not Being Charged With Constructive Notice of Southside Partners’ Claims
In addition to actual notice, a Court will consider whether or not there
are matters appearing in the deed records that would put a party on notice of
another’s claims to the property. In this case, there is nothing of record that
would have put Collazo Enterprises, LLC on notice of Southside Partners’
claims to reserving a one half interest in the property. The granting
language in the Warranty Deed of record from Southside Partners to the
Crow children states:
10 The interpretation of a deed is a question on law. Luckel v. White, 819
S.W.2d 459 (Tex. 1991). The Court is to ascertain the intent of the parties
from all of the language in the deed, and must strive to harmonize all parts
of the deed and to give effects to all of its provisions. Id. The question is not
what the parties intended to say, but what they did say in the deed. Alford v.
Krum, 671 S.W.2d 870, 872 (Tex. 1984).
The granting clause prevails over all other provisions in a deed.
Veltmann v. Damon, 701 S.W.2d 247, 247-248 (Tex. 1985). A deed will be
construed to confer upon the grantee the greatest estate that the terms of the
instrument will permit. Davis v. Andrews, 361 S.W.2d 419 (Tex. Civ. App.-
Dallas 1962, writ ref’d n.r.e.); see also, Graham v. Prochaska, 429 S.W.3d
650, 655 (Tex. App.- San Antonio 2013, pet. denied)(“[A] warranty deed
will pass all of the estate owned by the grantor at the time of the conveyance
unless there are reservations or exceptions which reduce the estate
conveyed.”), citing, Cockrell v. Tex. Gulf Sulphur Co., 299 S.W.2d 672, 675
(Tex. 1956).
A reservation must be made by clear language and Courts do not favor
reservations by implications. Graham 429 S.W.3d at 655. Similarly,
exceptions must identify the property to be excepted from the larger
conveyance with reasonable certainty. Graham 429 S.W.3d at 655-656.
11 Because the Warranty Deed signed by Southside Partners does not
reserve or except any of the property from the conveyance to the Crow
children, and each of the children is granted “an undivided interest in all” of
the property at issue, there was nothing that would have put Collazo
Enterprises, LLC on notice of Southside Partners’ claims that he retained an
undivided one-half interest in the property. It was and is proper to construe
the Warranty Deed as conveying all of Southside Partners’ interest in the
property to the Crow children.
Given the language of the Warranty Deed, there was no need, at least
appearing of record, for James Crow to add Southside Partners as a party to
the Crow Lawsuit because Southside Partners had already conveyed the
property and was not an owner of record at the time the lawsuit was filed.
The Judgement rendered in the Crow Lawsuit ordered that title to the
property was quieted in James A. Crow. The undisputed summary judgment
evidence establishes that after the Judgment was rendered in the Crow
Lawsuit, title eventually passed to Collazo Enterprises, LLC.
The other allegations of Southside Partners regarding the alleged
fraud committed by James Crow do not concern matters appearing of record
in the Official Public Records of Brown County, Texas. Collazo Enterprises,
LLC was not involved in any of those situations and had no knowledge of
12 them at the time of its purchase; it is without question that Collazo
Enterprises, LLC cannot be charged with notice of those facts.
For the foregoing reasons, even if Southside Partners claims to have
retained a one-half interest in the Property in the Warranty Deed are true,
that interest was not reflected in the Warranty Deed he signed2 and did not
otherwise appear of record in the Official Public Records of Brown County,
Texas at the time Collazo Enterprises, LLC purchased the property, and
Collazo Enterprises, LLC is a bona fide purchaser for value as a matter of
law.
C. There is no disputed issue of material fact with respect to Collazo Enterprises, LLC paying valuable consideration of the property
i. Collazo Enterprises, LLC Satisfied its Evidentiary Burden
Collazo Enterprises, LLC purchased the property from United States
of America for $25,000 [C.R. 159]. The property is 26.63 acres [C.R. 150].
Thus the purchase price paid by Collazo Enterprises, LLC was
approximately $1,000 per acre. The Affidavit of Collazo Enterprises, LLC
sets forth the opinion and basis for the value of the property [C.R.159].
Natural Gas Pipeline Co. of America v. Justiss, 397 S.W.3d 150, 156 (Tex.
2 With respect to the allegation that Southside Partners alleges he did not sign this Warranty Deed, please see the arguments contained in Section IV of this Appellee’s Brief, pages 23-24). Southside Partners’ allegations that he did not sign this deed should be disregarded by the Court.
13 2012) (holding that a property owner may testify about the value of his or
her property).
In order to satisfy the valuable consideration element of its bona fide
purchaser affirmative defense, Collazo Enterprises, LLC only needs to show
that it did not pay a grossly inadequate sales price. Neeley v. Intercity
Management Corp., 623 S.W.2d 942 (Tex. App.-Houston [1st Dist.] 1981,
no writ).
ii. Southside Partners Failed to Create a Disputed Issue of Material Fact Regarding Valuable Consideration
a. Evidence Submitted by Southside Partners Prior to the Summary Judgment Hearing
Southside Partner’s evidence submitted on the issue of value at the
time of the hearing was a reference to a partial deposition transcript of James
Crow attached to Plaintiffs’ Amended Petition. As a matter of law, a
pleading is not summary judgment evidence. Nicholson v. Memorial Hosp.
System, 722 S.W.2d 746, 749 (Tex. Civ. App.-Houston[14th Dist.] 1986, writ
ref’d n.r.e). Even if pleadings were considered to be competent summary
judgment evidence, this statement is conclusory because there are no facts to
establish that the property being discussed in the transcript is in fact the
property in question in this lawsuit and the statements are based on the
hearsay of James Crow in a separate legal proceeding.
14 Southside Partners’ also attached its own letter to Steve Jumes [C.R.
189-191] as part of his summary judgment response. Curiously, Southside
Partners redacted out almost all of the statements of value he placed on the
property in the letter. However, it appears Southside Partners
unintentionally failed to redact one of the statements of value and his letter
in the summary judgment record states that “I do not believe that the
property has increased in value much more than the $500 an acre I paid for
the property back in 2000.” [C.R. 191]. He also goes on to state that value
for a “much more expensive, 8-acre tract involving all the ‘frontage’”[C.R.
191] was recently purchased for $1,000 an acre [C.R.189]. Thus, Southside
Partners’ own summary judgment evidence establishes the value of the
property as worth not much more than the $500 an acre.
Given than Collazo Enterprises, LLC paid approximately $1,000 an
acre, there is no disputed issue of material fact that the purchase price paid
by Collazo Enterprises, LLC was not grossly inadequate and satisfied the
valuable consideration element necessary for Collazo Enterprises, LLC to be
a bona fide purchaser as a matter of law.
b. Evidence Submitted by Southside Partners After the Summary Judgment Hearing
As with the evidence submitted on the issue of actual notice, the
evidence submitted by Southside Partners after the hearing on Collazo
15 Enterprises, LLC’s Traditional Motion for Summary Judgment was without
leave of court and therefore Southside Partners cannot rely on it. Tex. R.
Civ. P. 166a(c); Castleberry v. New Hampshire Ins. Co., 367 S.W.3d 505
(Tex. App.-Texarkana 2012, pet. denied); Speck v. First Evangelical Church
of Houston, 235 S.W.3d 811 (Tex. App.-Houston[1st Dist.] 2007, no pet.).
II. The Special Warranty Deed to Collazo Enterprises, LLC Gives it Standing to Assert the Affirmative Defense of Bona Fide Purchaser
Texas case law specifically holds that a party claiming title under a
special warranty deed can claim the affirmative defense of bona fide
purchaser. Johnson v. Marti, 214 S.W. 726 (Tex. Civ. App.- Fort Worth
1919, writ ref’d n.r.e.); see also, Paul v. Houston Oil Co. of Tex., 211
S.W.2d 345, 356 (Tex. Civ. App.-Waco 1945, writ ref’d n.r.e.)(“It is true
that this deed contains a special warranty but under the great weight of
authority, such special warranty does not carry any notice of defects of title
to the grantee”). The Special Warranty Deed to Collazo Enterprises, LLC
most certainly contains a warranty of title, and the authority cited above
unquestionably supports Collazo Enterprises, LLC’s ability to successfully
assert the bona fide purchaser defense and that it will only be charged with
notice of facts appearing of record in the chain of title.
16 The cases cited by Southside Partners only address the issue of
whether a party taking title under a quitclaim deed or other form of deed that
does not contain a covenant of warranty can be bona fide purchasers. None
of Southside Partners’ cases hold that a party taking title under a special
warranty deed cannot allege the affirmative defense of bona fide purchaser
or that a party taking title under a special warranty deed is put on notice of
unrecorded defects in the chain of title. The cases are distinguishable on the
facts and inapplicable to the case now before the Court.
III. The Trial Court Did Not Abuse Its Discretion by Granting the Motion for Summary Judgment Because Southside Partners Failed to Comply With Procedures for Requesting Additional Discovery
Southside Partners now argues that it was an abuse of discretion for
the trial court to grant Collazo Enterprises, LLC’s Traditional Motion for
Summary Judgment when discovery was allegedly needed on outstanding
issues of fact.
However, Collazo Enterprises, LLC has fully and completely
responded to Southside Partners’ discovery requests. This was confirmed at
the hearing on Collazo Enterprises, LLC’s Traditional Motion for Summary
Judgment during the following exchange to the trial court:
17 If Southside Partners wanted to continue the hearing to allow for
additional discovery to be conducted, he should have either filed an affidavit
under the provisions of Tex. R. Civ. P. 166a(g) or filed a verified motion for
continuance prior to the hearing. Southside Partners took neither such action
and proceeded with the hearing, including an announcement of ready [R.R.
4].
A. Motion for Continuance Not Timely Filed
It was not until after the Court ruled on Collazo Enterprises, LLC’s
Traditional Motion for Summary Judgment that Southside Partners filed his
motion for continuance [C.R. 367]. As a matter of law, this was untimely.
18 Nguyen v. Short, How, Frels & Heitz, LLC, 108 S.W.3d 558, 562-563 (Tex.
App.- Dallas 2003, pet. denied); See also, Tex. R. Civ. P. 166a(g).
To the extent that Southside Partners now complains that Tonya
Patton was not identified in the disclosure response of Collazo Enterprises,
LLC, Southside Partners fails to appreciate the fact that Tonya Patton was in
no way involved in the purchase of the property, is not an owner of Collazo
Enterprises, LLC, and there was absolutely no need for Collazo Enterprises,
LLC to identify her as a person with knowledge. If any party was required
to disclose Tonya Patton as a person with knowledge, it would be Southside
Partners and not Collazo Enterprises, LLC3. Additionally, it was well within
Southside Partners’ ability to “remember” his conversations with Tonya
Patton prior to the hearing on Collazo Enterprises, LLC’s Motion for
Summary Judgment.
B. Southside Partners Did Not Preserve Issue for Appeal
In addition to being untimely, Southside Partners never took any
action on his motion for continuance after filing it. Because Southside
Partners never obtained a hearing or ruling on the motion for continuance he
did not preserve this issue for appeal. Southwest Country Enterprises v.
Lucky Lade Oil Co., 991 S.W.2d 490 (Tex. App.- Fort Worth 1999, pet.
3 Also, Collazo Enterprises, LLC disputes that the alleged conversations between Southside Partners and Tonya Patton took place.
19 denied). Obtaining a ruling on his motion for continuance would be required
by Southside Partners even if the motion for continuance was timely filed.
Tex. R. App. P. 33.1(a)
C. Trial Court Did Not Abuse Its Discretion
Because the Texas Rules of Civil Procedure set forth the methods for
requesting a continuance when a party cannot adequately respond to a
motion for summary judgment and needs to conduct discovery, and
Southside Partner failed to adhere to those procedures (see arguments A and
B above), there was no abuse of the trial court’s discretion when it granted
Collazo Enterprises, LLC’s Motion for Summary Judgment. Simply put, it
was well within the trial court’s discretion to disregard the post-hearing
arguments and evidence presented by Southside Partners. Yowell v. Piper
Aircraft Corp., 703 S.W.2d 630, 635 (Tex. 1986) (holding that when
deciding whether a trial court abused its discretion, the appellate court does
not substitute its judgment for that of the trial court, but only decides
whether the trial court's action was arbitrary and unreasonable; and that
before an appellate court reverses the trial court's discretionary ruling, it
should appear clearly from the record that there has been a disregard of the
rights of a party.)
20 The cases cited by Southside Partners are distinguishable because in
those cases there was a motion before the court and a refusal of the court to
conduct a hearing or rule on the motion. Here, the trial court was never
requested to rule and Southside Partners never set his untimely motion for
hearing. Under these circumstances, where no request for a hearing was
made to the trial court and no ruling was given, there is no abuse of
discretion.
E. No Due Process Violation
Southside Partners argues, without citing to any authority, that his due
process rights have been violated. Due process requires consideration of
three factors: (1) the private interest that will be affected by the official
action; (2) the risk of an erroneous deprivation of such interests through the
procedures used, and probable value of any of additional procedural
safeguards, and (3) the government’s interest, including the fiscal and
administrative burdens that the additional or substitute procedures to be
involved. Mathews v. Eldridge, 424 U.S. 319 (1976). Here, Southside
Partners, who is a licensed attorney, was presumably well aware of the
Texas Rules of Civil Procedure and should have been aware of the timing
and method for requesting a continuance and presenting late filed summary
judgment evidence. Also, there is nothing in the record indicating that
21 Southside Partners attempted to comply with these procedures and was not
allowed to do so by the trial court.
It would represent a gross miscarriage of justice if a party such as
Southside Partners could plead his case, attend a hearing on a motion for
summary judgment against his claims, and then without leave of court and
before the ruling on the motion, amend his petition and late file evidence
that could have easily been presented prior to the hearing but was not. If
anything, allowing such disregard for the Texas Rules of Civil Procedure
and reversing the trial court’s judgment would result in a due process
violation against Collazo Enterprises, LLC.
IV. Southside Partners Did Not Argue Issues Related to Chains of Title at Trial and Waived this Argument on Appeal
In his appeal, Southside Partners raises for the first time that the chain
of title predating his Warranty Deed to the Crow children creates a title issue
that evidences his claim to retaining an undivided one half interest in the
property. This argument was not plead nor was any evidence presented on
this issue at the time of the hearing on Collazo Enterprises, LLC’s
Traditional Motion for Summary Judgment. Nor was a motion for leave
ever filed to allow this argument to be presented to the trial court and
included in the summary judgment record. As a result, this argument has
been waived and cannot be alleged on appeal. Tex. R. Civ. P. 166a(c); Tex.
22 R. App. P. 33.1(a); Castleberry v. New Hampshire Ins. Co., 367 S.W.3d 505
(Tex. App.-Texarkana 2012, pet. denied); Speck v. First Evangelical Church
of Houston, 235 S.W.3d 811 (Tex. App.-Houston[1st Dist.] 2007, no pet.).
However, even if this argument was not waived, and assuming so
solely for the sake of argument, the Sheriff’s Deed attached as Appendix
Item A in no way evidences Southside Partners’ desire to retain a one half
interest in the property. Furthermore, the long held doctrine of after
acquired title will resolve any issues associated with the Brown County
Sheriff’s delay in execution of the Sheriff’s Tax Deed from the July 2002 tax
sale. See, Huling v. Moore, 194 S.W. 188 (Tex. Civ. App.- San Antonio
1917, writ refused) (holding that when a party gives a warranty deed and
later acquires title to the land previously conveyed in said warranty deed, the
land passes to the grantee in the warranty deed as if originally conveyed).
Lastly, there is no competent summary judgment evidence that
Southside Partners did not execute the Warranty Deed attached as Exhibit B
to the Brief of Appellant. As pointed out in Collazo Enterprises, LLC’s
reply to Southside Partners’ summary judgment response [C.R. 269, fn. 1],
the “affidavit” of William W. Ruth attached to the response contains the
statement “I have read Plaintiff’s Response to Defendant Collazo
Enterprises, LLC’s motion for summary judgment…” and purports to be
23 notarized on July 15, 2015 [C.R. 178-179]; however, Collazo Enterprises,
LLC’s Traditional Motion for Summary Judgment was not served until July
17, 2015 [C.R. 124]. As a result, the jurat is necessarily not authentic
because Southside Partners could not have responded to a motion he had not
yet received. Despite receiving notice of this deficiency, Southside Partners
never requested leave or took any other action to amend his “affidavit”. An
unsworn statement is not competent summary judgment evidence. Coastal
Cement Sand, Inc. v. First Interstate Cred Alliance, Inc. 956 S.W.2d 562,
567 (Tex. App.-Houston[ 14th Dist.] 1997, pet. denied); Tex. R. Civ. P.
166a(f).
In addition to there being no competent summary judgment evidence,
this factual allegation was unpled by Southside Partners in his petition on
file at the time of the hearing, and Collazo Enterprises, LLC objected to the
allegation not being pled [C.R. 269-270]. Thus, this allegation was not at
issue before the trial court and should not form the basis for reversing the
trial court’s judgment. Jones v. Wal-Mart Stores, Inc., 892 S.W.2d 144,
(Tex. App.-Houston 1995, no writ)(holding that unpled allegation raised for
the first time in a summary judgment response was not properly at issue
before the trial court).
24 Prayer
For the forgoing reasons Appellee Collazo Enterprises, LLC
respectfully requests that this Court affirm the Order Granting Defendant
Collazo Enterprises, LLC’s Traditional Motion for Summary Judgment
signed by the trial court on July 7, 2016, deny all relief sought by Appellant
Southside Partners in this appeal, and grant such other and further relief to
Appellee Collazo Enterprises, LLC to which it may be justly entitled.
Respectfully submitted,
OLIVER LAW OFFICE
By_________________________ Andrew Oliver State Bar No. 24046556 9951 Anderson Mill Road Suite 201 Austin, Texas 78750 Telephone: (512) 233-1103 Fax: (512) 551-0330 aolive@oliverlawoffice.com ATTORNEY FOR APPELLEE COLLAZO ENTERPRISES, LLC
25 Certificate of Compliance
As requested by Tex. R. App. P. 9.4(i)(3), the undersigned counsel does hereby certify that that the foregoing Appellee’s Brief is 5,005 words in size 14 Times New Roman font, except for footnotes which are size 12.
______________________ Andrew Oliver
Certificate of Service
As required by Rule 21, I hereby certify that on the 7th day of June 2017, I served this document on the following attorneys of record and parties by a method of service authorized under Tex. R. App. P. 9.5 as follows:
Via E-Service:
William W. Ruth 1406 E. Main, Suite 200 Fredericksburg, Texas 78624
Via Certified Mail Return Receipt Requested:
Charles Scarborough P.O. Box 356 Abilene, Texas 79604
James Chapman 501 W. Main #109 Fredericksburg, Texas 78624
________________________ Andrew Oliver