Deutsche Bank Nat'l Trust Co. v. Stockdick Land Co.

• Decision Date: 16 May 2012
• Docket Number: No. 14–09–00617–CV.,14–09–00617–CV.
• Citation: 367 S.W.3d 308
• Parties: DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee for New Century Home Loan Trust 2006–2, Appellant, v. STOCKDICK LAND COMPANY, Appellee.
• Court: Texas Court of Appeals

367 S.W.3d 308

DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee for New Century Home Loan Trust 2006–2, Appellant,

v.STOCKDICK LAND COMPANY, Appellee.

No. 14–09–00617–CV.

Court of Appeals of Texas,

Houston (14th Dist.).

Feb. 28, 2012.

Rehearing and Rehearing En Banc

Overruled May 16, 2012.

Larry E. Meyer, Houston, for Appellant.

Randall C. Owens, Stephen N. Riner, Jessica A. Zavadill, Houston, for Appellee.

Panel on Rehearing consists of Chief Justice HEDGES and Justices FROST and SEYMORE.

OPINION ON REHEARING

CHARLES W. SEYMORE, Justice.

We grant appellee's motion for rehearing, withdraw our opinion issued on February 3, 2011, and issue this majority opinion on rehearing.

Following a tax sale of residential property, appellant Deutsche Bank National Trust Company, as Indenture Trustee for New Century Home Loan Trust 2006–2 (the “Bank”), brought a declaratory-judgment action against appellee, the tax-sale purchaser Stockdick Land Company (“Stockdick”), seeking revival of an extinguished lien and contending (1) the former owners redeemed the property or, in the alternative, (2) pursuant to the doctrines of estoppel-by-deed and estoppel generally, the purchaser is precluded from denying the property was redeemed. The Bank and Stockdick filed competing motions for summary judgment. The trial court denied the Bank's motion and granted summary judgment in favor of Stockdick. For reasons outlined below, we affirm the trial court's judgment.

I. Factual and Procedural Background

The property in question is located on Yoakum Boulevard in Houston, Texas. Gordon Wittenberg and his wife Susan Wittenberg constructed a residence on the property in 2003. However, title to the property was held by Tribus, Inc., a corporation owned by the Wittenbergs. Tribus did not pay all of the property tax due for the years 2004 and 2005. During 2005, taxing authorities filed a collection suit against Tribus and mortgagee, Frost National Bank. On behalf of Tribus, Gordon Wittenberg acknowledged that the taxes were past due and stated that Tribus planned to pay under an installment plan.

On May 25, 2006, Tribus conveyed title to Susan Wittenberg.¹ Contemporaneously, the Wittenbergs refinanced the existing mortgage which had been held by Frost National Bank. The new indebtedness was secured by a promissory note in the principal amount of $650,000 in favor of New Century Mortgage Corporation, secured by a deed-of-trust lien filed for record on June 9, 2006. New Century later assigned this indebtedness and lien to the Bank. Subsequent to closure of the refinancing transaction, most of the taxes assessed for 2004 and 2005 were paid. However, either Tribus or the Wittenbergs owed $4,600 to Houston Independent School District, which had been assessed for 2005. The taxing authorities sought to recover the unpaid taxes by filing a tax suit in the 80th District Court (the “tax court”).

During February 2007, the tax court rendered a final judgment for taxes plus penalties and interest totaling $6,847.63 and ordered foreclosure and sale. The tax court determined that the market value of the property was $659,100. ² Other than taxing authorities, the only parties to this judgment were Tribus and Frost National Bank. The tax sale occurred on June 5, 2007. Stockdick purchased the property for $370,000. Following receipt of the amount tendered by Stockdick, past due taxes for the years 2005 and 2006 were paid. After all taxes and fees were deducted, net proceeds from the tax sale were $335,767.52. During the first week of December 2007, Stockdick entered into a redemption agreement with the Wittenbergs. The Wittenbergs agreed to remit $462,500, consisting of $370,000 (price paid by Stockdick) in cash and a promissory note for $92,500 (amount of statutory redemption premium). The usual real estate conveyance documents were executed, including a quitclaim deed to the Wittenbergs, a promissory note, vendor's lien, and deed of trust. The quitclaim deed and the deed of trust were filed in Harris County on December 10, 2007.

The Wittenbergs were required to pay all principal and interest on the promissory note by July 31, 2008. They paid $370,000 but wholly defaulted on the promissory note. Stockdick proceeded with non-judicial foreclosure and sale of the property. On October 15, 2008 (approximately three weeks before Stockdick's foreclosure and sale), the Bank filed the declaratory-judgment action which is the subject of this appeal in the 215th District Court (the “trial court”). The Bank pleaded that the Wittenbergs fulfilled statutory requisites to redeem the property. The Bank also pleaded that its lien was reinstated as a valid and subsisting mortgage and is senior and superior to Stockdick's deed-of-trust lien. Stockdick filed an answer. Subsequently, the Bank filed a traditional motion for summary judgment. Stockdick also filed a traditional motion for summary judgment, asserting the following grounds:

(1) The Wittenbergs did not redeem the property because they failed to remit $92,500 in premium required under section 34.21 of the Tax Code.³

(2) Stockdick maintained its superior title by reserving a vendor's lien to secure payment of the promissory note.

(3) The Bank waived its claim that the Wittenbergs redeemed the property.

(4) The Bank may not prosecute claims under the Declaratory Judgments Act; rather, this action should be filed as a trespass-to-try-title.

In its response to Stockdick's motion, and with specific reference to Stockdick's contention that execution and delivery of the deed did not result in redemption, the Bank argued, inter alia, that fact issues on its affirmative defenses of estoppel-by-deed and estoppel generally preclude summary judgment. ⁴ The trial court granted Stockdick's motion, denied the Bank's motion, and rendered a take-nothing judgment against the Bank.

Following disposition of both motions for summary judgment, the trial court granted the Bank's motion to supplement its pleadings. The Bank filed a second supplement to its original petition and included the following allegations, in relevant part:

• The Bank has superior right to $335,767.52, constituting the excess proceeds after a tax sale of the property to Stockdick. Also, equity demands return of the excess proceeds to the Bank.

• The Texas Tax Code sets forth the statutory priorities for payment of excess proceeds, and the Bank is a qualified lien holder and former owner as prescribed by the statute.

• The Bank is entitled to a hearing on its petition to recover excess proceeds under the following theories of recovery: money had and received; restitution; unjust enrichment; constructive trust; and conversion.

The trial court severed these new claims, and all matters pertaining to allocation of proceeds from the tax sale are now pending in the tax court. ⁵

II. Issues

In its original brief, the Bank raises three principal issues: (1) the trial court erred by denying the Bank's motion for summary judgment because the Wittenbergs redeemed the property and the Bank's mortgage lien was reinstated; (2) the trial court erred by granting Stockdick's motion for summary judgment because redemption occurred after the tax sale and the Bank's mortgage lien was reinstated; and (3) there are material fact issues pertaining to whether the property was redeemed.

In its original brief, the Bank raised several sub-issues which are rendered moot by our disposition of the Bank's first two issues. On appeal, the Bank contends there are fact issues pertaining to its affirmative defense of quasi-estoppel. However, as explained below, the Bank did not sufficiently present or argue the affirmative defense of quasi-estoppel in its response to Stockdick's motionfor summary judgment. The Bank argued, inter alia, that Stockdick's execution of a quitclaim deed to the Wittenbergs and retention of sums paid to redeem the property implicate the equitable doctrines of estoppel-by-deed and estoppel generally. On appeal, the Bank does not emphasize its estoppel-by-deed ⁶ argument, and we conclude it is not applicable because the rights and duties of parties involved in delinquent tax foreclosure and redemption are uniquely controlled by relevant provisions of the Tax Code.⁷ We address quasi-estoppel because our dissenting colleague heavily relies on this equitable doctrine to support her conclusion that the trial court's summary judgment in favor of Stockdick should be reversed.

III. Standard of Review

Relative to a traditional motion for summary judgment, if the movant's evidence conclusively establishes the right to judgment as a matter of law, the burden shifts to the nonmovant to raise a genuine issue of material fact which would defeat summary judgment. See M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex.2000). In our de novo review of a trial court's summary judgment, we consider all evidence in the light most favorable to the nonmovant, and indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005). The evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions in light of all of the summary-judgment evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex.2007). When, as in this case, the order granting summary judgment does not specify the grounds upon which the trial court relied, we must affirm the summary judgment if any of the independent summary-judgment grounds is meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex.2000).

We review both the trial court's grant of Stockdick's motion for summary judgment and denial of the Bank's motion because both parties sought final summary judgment. See CU Lloyd's of Tex. v. Feldman, 977 S.W.2d 568, 569 (Tex.1998) (per curiam). Procedurally, we first consider the merits of Stockdick's motion. See Lambrecht & Assocs.,...