ICM Mortg. Corp. v. Jacob

• Decision Date: 22 December 1994
• Docket Number: No. 08-93-00295-CV,08-93-00295-CV
• Citation: 902 S.W.2d 527
• Parties: ICM MORTGAGE CORPORATION, Appellant, v. Phyllis JACOB, Appellee.
• Court: Texas Court of Appeals

Page 527

902 S.W.2d 527

ICM MORTGAGE CORPORATION, Appellant, v. Phyllis JACOB, Appellee.

No. 08-93-00295-CV.

Court of Appeals of Texas,

El Paso.

Dec. 22, 1994.

Opinion Overruling Motion for

Rehearing Feb. 16, 1995.

Aubrey D. Martin, Jr., Martin & Farley, L.L.P., Houston, for appellant.

Margaret S. Ingle, Ingle & Ingle, Stephanie McGuire, Houston, for appellee.

Before BARAJAS, C.J., and KOEHLER and McCOLLUM, JJ.

OPINION

BARAJAS, Chief Justice.

This is an appeal from a $104,050 judgment for property damage and negligent and grossly negligent infliction of emotional distress in favor of Appellee. The jury found Appellants negligent and grossly negligent in obtaining and executing a forcible entry and detainer judgment against Appellee's leased residence after foreclosing on the property. The jury awarded Appellee actual damages (including damages for mental anguish) of $74,050, and punitive damages of $30,000. It declined, however, to find Appellant liable for the conversion of Appellee's personal property. We reverse the judgment of the trial court and render judgment in favor of Appellant.

I. SUMMARY OF THE EVIDENCE

In November 1986, Michael and Cathy Arkus purchased property at 5310 Holly Bend Court, Houston, Harris County, Texas, and assumed liability under a note and deed of trust, both of which were held by Appellant. Appellee leased the premises from the Arkuses on December 1, 1986. In July of 1987, Appellant foreclosed its interest in the property under the deed of trust because the Arkuses had made no payments on the note. After the foreclosure sale, Appellant conducted an inspection of the property and learned the house was occupied but believed the occupants to be the Arkuses, having no knowledge of Appellee's lease. Appellant then commenced a forcible entry and detainer action the petition and citation for which were served on Appellee on August 18, 1987.

On the following day, Appellee contacted Mary Speidel, the attorney representing Appellant in the forcible entry and detainer action, and Appellee expressed her desire to continue living in the house and her interest in purchasing it. Speidel referred Appellee's questions to Appellant's Denver office, which handled all foreclosure and eviction proceedings in the Houston area.

The record demonstrates that Appellant frequently encountered tenants of foreclosure upon owners who expressed an interest in purchasing the property. Appellant's policy was to stay eviction proceedings only if a written contract was submitted in support of a tenant's offer.

Before contacting the Denver office and on her sister's advice, Appellee contacted Robert Zambie, the manager of Appellant's Houston office, to express her interest in purchasing the home and her willingness to pay rent on the property. Zambie advised Appellee to write a letter to Shirley Gassen in Appellant's Denver office and agreed to forward the letter to Gassen, which he did. The letter, dated August 19, 1987, reveals Appellee's status as the Arkuses' lessee as well as Appellee's wish to purchase the house and a request for information about how she could remain in it. Appellant did not reply to Appellee's letter before the justice court entered judgment for it in the forcible entry and detainer action on August 25th.

Disturbed at the lack of a response, Appellee herself mailed a second letter to Gassen sometime in September of 1987. The second letter reads in part: "Since I have not heard from you to date, I assume I am to continue residing [at the property].... [I]f there is rent to be paid (present rent $475.00 per mo.) please let me know as I would like to keep payments up to date." Appellant did not respond to this second letter.

Appellee continued to contact Zambie both before and after she sent the second letter. Zambie instructed Appellee to "sit tight until [she] heard from them" because Appellant needed to obtain clear title to the property before taking further action. Appellee several times contacted Zambie specifically to offer to pay rent and each time received the same response: Appellant could not even accept rent from Appellee until it had clear title to the property.

Sometime in September of 1987, Zambie instructed Appellee to contact Dave Roman, another person in Appellant's Denver office, which she promptly did. Roman, in turn, instructed Appellee to contact Judy Anderson, the Houston real estate agent likely to handle the property for Appellant. Appellee promptly contacted Anderson to express her interest in purchasing the house. Anderson did not, however, enter into sale negotiations because she had not yet been awarded the contract to list the house. Anderson explained this to Appellee, who then enlisted the aid of her own real estate agent, Marie Nugent. Nugent, too, contacted Anderson and received the same response: sale negotiations would be premature because Anderson had not been awarded the listing.

On November 6, 1987, some 73 days after Appellant received a favorable judgment in its forcible entry and detainer action, Appellant obtained a writ of possession from the justice court. On November 12, 1987, a Harris County Constable posted a notice of the writ of possession on the door to the residence. Appellee testified at trial that she received no notice, which testimony was not controverted.

On November 19, 1987, Appellee returned from work in the evening to find that the locks on the doors to her home had been changed. She could see that her house was empty and found on the front door a notice from a moving company that her possessions were stored at their facility. There was evidence that Appellee suffered emotional distress as a result of this occurrence.

Appellant's Denver office employee, Shirley Gassen, first heard of Appellee on November 24, 1987, when she received from an unknown source a fax transmission of Appellee's August 19, letter in which Appellee made known her interest in purchasing the house. Appellant thereafter paid $1,634 in moving and storage fees on behalf of Appellee in an effort to avoid litigation. Gassen testified at trial that in all of her experience with Appellant, Appellee's is the only case in which Appellant agreed to pay storage and moving expenses incurred in connection with an eviction.

On December 1, 1987, Appellant for the first time informed Appellee that she should make an offer to purchase the property, and indicated its willingness to entertain a verbal offer.

II. DISCUSSION

Appellant attacks the trial court's judgment in ten points of error. In Point of Error No. One, Appellant argues that the trial court erred in entering judgment for Appellee because she was a tenant at sufferance to whom Appellant owed no legal duty at the time of the eviction. Appellee makes no argument that Appellant owed her legal duties because of her status as a tenant at sufferance, claiming, rather, that Appellant owed legal duties to her because of her status as a tenant at will. The initial issue to be resolved then is whether Appellee was a tenant at sufferance after foreclosure or a tenant at will with greater rights against Appellant.

One in lawful possession of premises by permission of the owner or landlord and for no fixed term is a tenant at will. Robb v. San Antonio St. Ry., 82 Tex. 392, 18 S.W. 707, 708 (1891). A tenant at will has no certain nor sure estate; the lessor may put him out at any time. BLACK'S LAW DICTIONARY 1466 (6th ed. 1990). A tenant at will, in contrast to a tenant at sufferance, possesses the property with the owner's consent. Emerson v. Emerson, 35 S.W. 425, 426 (Tex.Civ.App.--San Antonio 1896, no writ).

A tenancy at sufferance is a lesser possessory estate. A tenant at sufferance is merely an occupant in naked possession of property. Goggins v. Leo, 849 S.W.2d 373 (Tex.App.--Houston [14th Dist.] 1993, no writ). A tenant at sufferance is one who wrongfully continues in possession of property after his right to possession has ceased and does not assert a claim to superior title. RESTATEMENT (FIRST) OF PROPERTY § 22 (1936). A tenant at sufferance is not in privity with the owner and possesses no interest capable of assignment. Goggins, 849 S.W.2d at 377 (no privity); Griffin v. Reynolds, 107 S.W.2d 634, 637 (Tex.Civ.App.--Texarkana 1937, writ dism'd) (not assignable).

That there existed a landlord-tenant relationship between the Arkuses and Appellee is undisputed. Indeed, the record contains an instrument entitled Agreement of Lease, which embodies this relationship. Neither is it disputed that there exists no similar instrument evincing a landlord-tenant relationship between Appellant and Appellee. Thus, if one exists, we must infer it from the facts and circumstances of the case.

When a tenant's landlord-mortgagor is foreclosed upon by the landlord's mortgagee, the tenant's lease is generally terminated. B.F. Avery & Sons v. Kennerly, 12 S.W.2d 140 (Tex.Comm'n App.1929, judgm't adopted) (original mortgagee who was also purchaser at foreclosure sale held clear title unencumbered by lease executed by mortgagor subsequent to mortgage, notwithstanding that tenant was not made a party to the foreclosure suit); Gainesville Oil & Gas Co. v. Farm Credit Bank of Texas, 847 S.W.2d 655 (Tex.App.--Texarkana 1993, no writ) (purchaser at foreclosure sale held clear title unencumbered by oil and gas lease executed by mortgagors subsequent to execution of mortgage, notwithstanding that purchaser had actual knowledge of oil and gas production at time of purchase); Bateman v. Brown, 297 S.W. 773 (Tex.Civ.App.--Amarillo 1927, writ dism'd) (foreclosure sale effected "eviction [of mortgagor's tenant] by paramount title," which eviction caused termination of tenant's lease). We cautiously characterize the foregoing proposition as general because of case law that arguably pronounces a contrary rule.

There is aged authority for the proposition that a tenant is a necessary party to a foreclosure action against his...