Falkenhorst v. Kwok

• Decision Date: 19 May 2022
• Docket Number: 14-21-00437-CV
• Parties: RAINER VON FALKENHORST III, Appellant v. ARTHUR KWOK; ERIKA LYNNSEY KWOK; QAI ASSET, INC.; RUSH GREEN ASSET, LIMITED PARTNERSHIP; REGAL REALTY INTERNATIONAL, L.P.; AND ERICKA J. THOMAS, Appellees
• Court: Texas Court of Appeals

RAINER VON FALKENHORST III, Appellant v. ARTHUR KWOK; ERIKA LYNNSEY KWOK; QAI ASSET, INC.; RUSH GREEN ASSET, LIMITED PARTNERSHIP; REGAL REALTY INTERNATIONAL, L.P.; AND ERICKA J. THOMAS, Appellees

No. 14-21-00437-CV

Court of Appeals of Texas, Fourteenth District

May 19, 2022

On Appeal from the 269th District Court Harris County, Texas Trial Court Cause No. 2021-34617

Panel consists of Justices Wise, Poissant, and Wilson.

MEMORANDUM OPINION

PER CURIAM

Appellant Rainer von Falkenhorst III, proceeding pro se, appeals the trial court's grant of summary judgment in favor of appellees regarding his petition for a bill of review ^[1] on the basis that the underlying lawsuit was untimely filed.^[2] After construing appellant's pro se brief liberally, we affirm the trial court's judgment.

Background

This appeal is essentially about two cases: the lawsuit appellant originally filed in 2018 (the "Original Lawsuit") and the proceeding appellant initiated with a petition for a bill of review in 2021, which continued into this appeal.

Although the appellate record paints an unclear picture of what the Original Lawsuit entailed, it concerned a commercial relationship between appellant and one or more of the appellees regarding services performed around August 10 2010, on his real property located on Memorial Drive (the "Property") in Harris County. Soon thereafter, in September of 2010, appellant began a period of incarceration that ended in November 2019. On May 4, 2011, while appellant was incarcerated, a Substitute Trustee's Deed recorded in Harris County, reflects appellee QAI Asset, Inc. purchased the Property at a foreclosure sale. The Substitute Trustee's Deed indicates the sale took place on May 4, 2011, as a result of appellant's default on a contract associated with the August 2010 commercial relationship.

In December 2018, appellant filed the Original Lawsuit. Although the record does not contain pleadings from the Original Lawsuit, appellant's petition for a bill of review has represented, and appellees do not dispute, that appellant requested a lis pendens on the Property and advanced claims of Deceptive Trade Practices Act violations, breach of contract, fraud, and theft of personal items associated with the Property. As near as can be determined, appellants' claims in the Original Lawsuit all centered on his contentions that his commercial relationship with at least one appellee in August 2010 and the related Substitute Trustee's Deed were infected by fraud or other wrongful behavior. The Original Lawsuit was dismissed on June 20, 2019 on the basis that appellant had failed to prosecute it.

Almost two years later, on June 9, 2021, appellant filed a petition for a bill of review against appellees. Appellees filed a motion for summary judgment on July 2, 2021, requesting the trial court to "dispose of each cause of action stated in" appellant's petition because, among other reasons, the Original Lawsuit was untimely as to every cause of action it advanced. The motion asserted the statute of limitations for all of appellant's causes of action was not more than four years, and because appellant's causes of action accrued no later than May 4, 2011 when the Substitute Trustee's Deed was filed in public records, the Original Lawsuit, filed more than seven years later in December 2018, was untimely as to all claims. On July 30, 2021, the trial court granted the motion and denied appellant's petition for bill of review on the basis that, "as to each and every cause of action" in appellant's petition for a bill of review, the claims were untimely when the Original Lawsuit was filed.^[3] This appeal followed.

Analysis

A trial court's grant of summary judgment is reviewed de novo with all evidence reviewed in the light most favorable to the party that did not file the motion and with every reasonable inference given in the nonmovant's favor. See JLB Builders, L.L.C. v. Hernandez, 622 S.W.3d 860, 864 (Tex. 2021). As appellant is proceeding pro se, this court must construe his pleadings liberally, although it will not step out of its role of neutral adjudicator and into the role of advocate by developing arguments and support on his behalf. See Sorrow v. Harris Cnty. Sheriff, 622 S.W.3d 496, 501 (Tex. App.-Houston [14th Dist] 2021, pet. denied); Lundy v. Masson, 260 S.W.3d 482, 503 (Tex. App.-Houston [14th Dist.] 2008, pet. denied).

Appellant's petition for a bill of review directly attacked the trial court's dismissal of the Original Lawsuit. See Frost Nat'l Bank v. Fernandez, 315 S.W.3d 494, 504 (Tex. 2010) ("A bill of review is brought as a direct attack on a judgment that is no longer appealable or subject to a motion for new trial."). To have prevailed on his petition for a bill of review, appellant was required to plead and prove three elements: (1) he had a meritorious claim or a defense to an underlying judgment; (2) he was prevented from making either of those things by an official mistake or by the opposing party's fraud, accident, or wrongful act; and (3) the failure to make the claim or defense was unmixed with any fault or negligence on appellant's own part. Valdez v. Hollenbeck, 465 S.W.3d 217, 226 (Tex. 2015).

The trial court's judgment in 2021, which held the Original Lawsuit was untimely as to all claims, tacitly concluded appellant's petition for a bill of review failed because he could not prove the Original Lawsuit advanced a meritorious claim. Cf In re B.C., 52 S.W.3d 926, 930 (Tex. App.-Beaumont 2001, no pet.) (upholding the grant of a bill of review asserting a claim was at least partially barred due to a limitations defense);^[4] see also Tex. Civ. Prac. & Rem. Code Ann. §§ 16.003 (setting a two-year limitations period for claims of "conversion of personal property" and "taking or detaining the personal property of another"); 16.051 (setting a four-year limitations period for "[e]very action for which there is no express limitations period, except an action for the recovery of real property"); 16.054 (four-year limitations period for fraud); Tex. Bus. & Com. Code Ann. § 17.565 (two-year limitations period for DTPA violations); Ford v. Exxon Mobil Chem. Co., 235 S.W.3d 615, 617 (Tex. 2007) (per curiam) (four-year limitations period for setting aside a deed due to fraud). As near as can be determined, appellant's brief attempts to portray his claims as timely by arguing that the statute of limitations for at least some of the claims seeking the Property in the Original Lawsuit is either ten or twenty-five years, on the basis that they are claims to recover real property adversely possessed. See Tex. Civ. Prac. & Rem. Code Ann. §§ 16.026 (ten-year limitations period for claims to "recover real property held in peaceable and adverse possession by another who cultivates, uses, or enjoys the property"); 16.027 (twenty-five year limitations period for such claims that implicate a legal disability of the plaintiff). But because appellant's claims for the Property all attack the validity of the allegedly wrongful Substitute Trustee's Deed (whether by attacking his preceding commercial relationship or otherwise), those extended statutes of limitations cannot apply here. Rather, unless the Substitute Trustee's Deed can be shown to be void rather than merely voidable, a four-year statute of limitations applies. See Ford, 235 S.W.3d at 617-18 (acknowledging that a claim that a deed is fraudulent had to be brought within four years of the fraud being discoverable by reasonable diligence). Although appellant claims the alleged fraud underlying the deed itself renders the Substitute Trustee's Deed void, he is incorrect. See id. at 618 ("Deeds obtained by fraud are voidable rather than void, and remain effective until set aside."). Accordingly, appellant has failed to show a ten- or twenty-five-year statute of limitations associated with adverse possession applied to any claims made in the Original Lawsuit. See id. ("Texas law is well settled that once limitations has expired for setting aside a deed for fraud, that bar cannot be evaded by simply asserting the claim in equity.").

Since appellant indisputably filed the Original Lawsuit outside the limitations period for all of his claims, appellant can only show that his petition for a bill of review was incorrectly dismissed in 2021 if there was some basis for deeming his claims timely when the Original Lawsuit was filed. See, e.g., Underkofler v. Vanasek, 53 S.W.3d 343, 345 (Tex. 2001) (affirming a judgment that a tolling rule made claims timely filed); Comput. Assocs. Int'l, Inc. v. Altai, Inc., 918 S.W.2d 453, 461 (Tex. 1996) (acknowledging that the discovery rule can enable claims to be timely under Texas law even when they are filed outside the applicable limitations period).

Appellant first argues that his claims are timely due to the discovery rule. The discovery rule only applies to claims based on injuries that are "inherently undiscoverable," such that they are "unlikely to be discovered within the prescribed limitations period despite due diligence." Via Net v. TIG Ins. Co., 211 S.W.3d 310, 313 (Tex. 2006). Appellant's argument fails because the filing of the Substitute Trustee's Deed provided appellant with constructive notice that the Property had changed hands whether wrongfully or otherwise. See Tex. Prop. Code Ann. § 13.002(1) ("[A]n instrument that is properly recorded in the proper county is[] notice to all persons of the existence of the instrument . . . ."); Cosgrove v. Cade, 468 S.W.3d 32, 38 (Tex. 2015) (discussing how the statute bars the discovery rule's applicability in cases disputing a recorded deed "as a matter of law"). Insofar as appellant's claims center on allegations that appellees appropriated or otherwise wrongfully...