Fed. Home Loan Mortg. Corp. v. Pham

• Decision Date: 09 October 2014
• Docket Number: No. 14–13–00109–CV.,14–13–00109–CV.
• Citation: 449 S.W.3d 230
• Parties: FEDERAL HOME LOAN MORTGAGE CORPORATION, Appellant v. Trinh PHAM, Katherine Crawford & Gary Block, Appellees.
• Court: Texas Court of Appeals

449 S.W.3d 230

FEDERAL HOME LOAN MORTGAGE CORPORATION, Appellant

v.Trinh PHAM, Katherine Crawford & Gary Block, Appellees.

No. 14–13–00109–CV.

Court of Appeals of Texas, Houston (14th Dist.).

Oct. 9, 2014.

Travis Gray, Dallas, for Appellant.

Michael C. Donovan, Houston, for Appellees.

Panel consists of Chief Justice FROST and Justices JAMISON and WISE.

OPINION

KEN WISE, Justice.

In this appeal from a forcible detainer action, a mortgagor appeals the trial court's summary judgment granted in favor of occupants of residential property on the ground that the mortgagor's claims were barred by res judicata based on prior judgments for forcible detainer between the parties. We affirm.

Factual and Procedural Background

On May 22, 2012, Federal Home Loan Mortgage Corporation (“Freddie Mac”) filed a petition for forcible detainer in the justice court against Trinh Pham, Gary Block, and Katherine Crawford, as well as all occupants of a residential property at 316 Litchfield Lane in Houston. Freddie Mac alleged that it acquired ownership of the property by foreclosure and by virtue of a deed of trust the defendants and all occupants became tenants at sufferance. Freddie Mac further alleged that it gave written notice to the defendants to vacate the property, but the defendants nevertheless continued to reside on the property to the exclusion of Freddie Mac and thereby committed a forcible detainer.

Crawford responded, asserting a general denial and claiming to be both a tenant and an equitable owner of the property under a March 2009 lease agreement with a purchase option. She alleged that her property was comprised of a single family residence comprised of two lots and two addresses (314 and 316 Litchfield Lane) and that the residence could not be partitioned without a complete remodel. Crawford also denied that Freddie Mac gave proper notice to vacate in accordance with the Texas Property Code. The justice court rendered judgment in favor of Freddie Mac in June 2012, and Crawford appealed to the county court for de novo review.

In a supplemental answer filed in the county court, Crawford asserted an affirmative defense that Freddie Mac's forcible detainer action was barred by res judicata. Crawford also filed a motion for summary judgment, arguing that Freddie Mac was barred by res judicata from filing the forcible detainer action, the third such action initiated by Freddie Mac against the defendants.

In her summary judgment motion, Crawford argued that Freddie Mac's lawsuit was barred by res judicata because it was the third identical forcible detainer lawsuit concerning the property. Crawford supported her motion with evidence of Freddie Mac's first forcible detainer action in October 2010 against Pham “and/or All Occupants of 316 Litchfield Lane.” In the 2010 action, a justice court rendered a take-nothing judgment in favor of Pham, and on appeal de novo, the county court rendered an order in February 2011, granting Freddie Mac's motion for nonsuit. Crawford also provided evidence of a second forcible detainer action filed by Freddie Mac against Pham, Crawford, Block, and all occupants in March 2011. The 2011 action resulted in a take-nothing judgment in favor of the defendants, and on appeal de novo, the county court dismissed the action for lack of jurisdiction. Crawford's evidence included Freddie Mac's petitions, the justice court judgments, and the county court orders from the 2010 and 2011 actions, as well as a copy of Freddie Mac's original petition in this lawsuit.

In response, Freddie Mac challenged only the third element of res judicata, arguing that a new, independent cause of action for forcible detainer accrued because the occupants were served with new notices to vacate served in February and May 2012. Freddie Mac attached case law in support of its summary judgment response.

In a final judgment signed December 9, 2012, the trial court granted Crawford's summary judgment motion and ordered that Freddie Mac take nothing on its claims against the occupants of the property. Freddie Mac's motion for new trial, in which Freddie Mac attached a business records affidavit, was denied.

Standard of Review and Applicable Law

A defendant moving for summary judgment on the affirmative defense of res judicata must establish each element of that defense as a matter of law. See Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex.2010) ; Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215–216 (Tex.2003). Once a defendant establishes its right to summary judgment, the burden shifts to the plaintiff to come forward with evidence raising a genuine issue of material fact. Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex.1995). We take all evidence favorable to the plaintiff as true and indulge every reasonable inference and resolve any doubts in favor of the plaintiff. See Knott, 128 S.W.3d at 215.

Issues and Analysis

In a single issue, Freddie Mac contends that the county court erred in granting Crawford's motion for summary judgment on res judicata. Within this issue, Freddie Mac argues that (1) a new and independent cause of action for forcible detainer accrues every time a new notice to vacate and demand for possession is sent and the occupant fails to vacate, (2) the county court incorrectly applied the law regarding res judicata to forcible detainer actions, and (3) Crawford failed to carry her summary judgment burden because she presented no evidence that the present suit was not based on new notices and a corresponding failure to vacate.

I. A New and Independent Action for Forcible Detainer May Arise from Delivery of New Notices to Vacate and the Occupant's Failure to Surrender the Property.

A forcible detainer action is the procedure used to determine the right to immediate possession of real property if there is no unlawful entry. Hong Kong Dev., Inc. v. Nguyen, 229 S.W.3d 415, 433 (Tex.App.-Houston [1st Dist.] 2007, no pet.). The only issue in an action for forcible detainer is the right to actual possession; the merits of title are not adjudicated. Salaymeh v. Plaza Centro, LLC, 264 S.W.3d 431, 435 (Tex.App.-Houston [14th Dist.] 2008, no pet.).

Under the Texas Property Code, a person who refuses to surrender possession of real property on demand commits a forcible detainer if the person is a tenant by sufferance, including an occupant at the time of foreclosure of a lien superior to the tenant's lease. Tex. Prop.Code § 24.002(a)(2). Section 24.002 also provides that a landlord must make a written demand for possession and comply with section 24.005's requirements for a notice to vacate. Id. § 24.002(b) ; see also § 24.005(h) (providing that a notice to vacate is considered a demand for possession for purposes of section 24.002(b) ). Because forcible detainer is a statutory cause of action, a landlord must strictly comply with its requirements. Kennedy v. Andover Place Apts., 203 S.W.3d 495, 497 (Tex.App.-Houston [14th Dist.] 2006, no pet.).

Both on appeal and in her summary judgment motion, Crawford asserts that this third forcible detainer action is barred by res judicata. The doctrine of res judicata precludes re-litigation of claims that have been finally adjudicated or that arise out of the same subject matter and that could have been litigated in the prior action. Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex.1996). Res judicata requires proof of the following elements: (1) a final judgment on the merits by a court of competent jurisdiction; (2) identity of parties or those in privity with them; and (3) a second action based on the same claims that were raised or could have been raised in the first action. Id.

It is undisputed that the three forcible detainer actions Freddie Mac filed involve the same parties and the same property. The only element in dispute is whether this case is a third action based on the same claims as the two earlier forcible detainer actions brought by Freddie Mac.

Freddie Mac argues that every time a notice to vacate and demand for possession is sent, and the occupant of the property fails to vacate, a new and independent cause of action for forcible detainer accrues. To support this proposition, Freddie Mac primarily relies on Puentes v. Fannie Mae, 350 S.W.3d 732 (Tex.App.-El Paso 2011, pet. dism'd). In Puentes, the plaintiff Federal National Mortgage Association (“Fannie Mae”) filed a forcible detainer action against Juan and Socorro Puentes on April 17, 2009, but lost that suit when it was unable to produce admissible evidence that it had properly provided the Puenteses with a notice to vacate. Id. at 734–35. Fannie Mae filed another forcible detainer suit on July 2, 2009, and in response the Puenteses moved for summary judgment, arguing that res judicata barred the second suit. Id. at 735. The trial court denied the Puenteses' motion and proceeded to hear evidence on the forcible detainer suit. Id. Following Juan Puentes's testimony that he did not receive any notice to vacate, Fannie Mae offered a business records affidavit with attached exhibits reflecting that notice to vacate was sent by regular and certified mail before the second action was filed. Id. at 735–36, 738. The evidence was admitted over objection, and the trial court ultimately ruled in favor of Fannie Mae. Id. at 736.

On appeal, the Puenteses raised three issues, contending that the second suit was barred by res judicata, the trial court erred in admitting Fannie Mae's business records affidavit, and Fannie Mae's failure to pursue an appeal of the first suit deprived the justice and county courts hearing the second action of subject matter jurisdiction. See id. The trial court rejected the second and third issues, and as to the Puenteses' res judicata argument, the court held that the second forcible detainer action was “a new and independent action to determine which party had the superior right of immediate possession at the time it was filed” that was not barred by res judicata. Id. at 739....