In re Kingman Holdings, LLC

• Decision Date: 22 September 2021
• Docket Number: 13-21-00217-CV
• Parties: IN RE KINGMAN HOLDINGS, LLC, AS TRUSTEE
• Court: Texas Court of Appeals

IN RE KINGMAN HOLDINGS, LLC, AS TRUSTEE

No. 13-21-00217-CV

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

September 22, 2021

On Petition for Writ of Mandamus.

Before Chief Justice Contreras and Justices Benavides and Silva

MEMORANDUM OPINION

GINA M. BENAVIDES JUSTICE ^[1]

On July 16, 2021, relator Kingman Holdings, LLC, as Trustee for Keeton Avenue 1412 #11 Land Trust (Kingman) filed a petition for writ of mandamus asserting that the trial court abused its discretion by denying Kingman's no-evidence motion for summary judgment against Debani Sarahi Galvan and Armando Flores, and by failing to rule on Kingman's motion for reconsideration of that ruling.^[2] See TEX. R. CIV. P 166a(i). We conditionally grant the petition for writ of mandamus.

I. Background

Based on the pleadings, Galvan purchased a condominium from Flores and in conjunction with the purchase, paid off a lien reflecting the balance Flores owed on the condominium. However, the lien did not include past due homeowner's association fees, and the condominium was ultimately sold to Kingman after foreclosure. In 2017, Galvan and Flores filed suit against Kingman and other parties asserting, inter alia that the lienholder and homeowner's association were associated parties, that the lienholder falsely represented that the homeowner's association fees were not in arrears and that they would not foreclose, and ultimately, that the lienholder and homeowner's association failed to give proper notice of foreclosure. In addition to requests for a temporary restraining order and temporary and permanent injunctive relief, Galvan and Flores's first amended petition asserted causes of action regarding a contract for deed, wrongful foreclosure, promissory estoppel, fraud negligence, trespass to try title, the right of redemption under Texas Property Code § 209.011, and declaratory judgment that (1) the lienholder and homeowners association had "wrongfully foreclosed" and "defrauded" the real parties and title should be restored to Galvan, and (2) the transfer of the property to Kingman was void because the trustee's sale on the property was "wrongful." Proceedings in the case resulted in a temporary restraining order signed on June 14, 2017, an amended temporary restraining order signed on February 28, 2018, and a temporary injunction signed on April 2, 2018.

On July 14, 2020, Kingman filed a traditional and no-evidence motion for summary judgment against Galvan and Flores. Galvan and Flores did not file a response to Kingman's motion for summary judgment. On November 10, 2020, Kingman filed a memorandum in support of its no-evidence and traditional motion for summary judgment. On January 7, 2021, the trial court denied Kingman's motion for summary judgment. On March 18, 2021, Kingman filed a motion for reconsideration of the trial court's ruling. Based on the record before us, the trial court has not ruled on Kingman's motion for reconsideration.

On July 16, 2021, Kingman filed this original proceeding. By two issues, Kingman asserts that (1) the trial court abused its discretion by denying Kingman's no-evidence motion for summary judgment and failing to rule on its motion for reconsideration, and (2) Kingman lacks an adequate remedy by appeal. On July 19, 2021, this Court requested that the real parties in interest, Galvan and Flores, or any others whose interest might be directly affected by the relief sought, including but not limited to Las Jollas Condominium Association, Inc., Esponjas Development, LTD, and Eduardo Cantu, file a response to the petition for writ of mandamus within ten days. See TEX. R. APP. P. 52.2, 52.4, 52.8. Neither Galvan nor Flores, nor any of the other parties in the underlying proceeding, have favored the Court with a response to Kingman's petition for writ of mandamus.

Mandamus is an extraordinary and discretionary remedy. See In re Allstate Indem. Co., 622 S.W.3d 870, 883 (Tex. 2021) (orig. proceeding); In re Garza, 544 S.W.3d 836, 840 (Tex. 2018) (orig. proceeding) (per curiam); In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 138 (Tex. 2004) (orig. proceeding). The relator must show that (1) the trial court abused its discretion, and (2) the relator lacks an adequate remedy on appeal. In re USAA Gen. Indem. Co., 624 S.W.3d 782, 787 (Tex. 2021) (orig. proceeding); In re Prudential Ins. Co. of Am., 148 S.W.3d at 135-36; Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex. 1992) (orig. proceeding). A trial court abuses its discretion when it acts with disregard for guiding rules or principles or when it acts in an arbitrary or unreasonable manner. In re Garza, 544 S.W.3d at 840. We determine the adequacy of an appellate remedy by balancing the benefits of mandamus review against the detriments. In re Acad., Ltd., 625 S.W.3d 19, 25 (Tex. 2021) (orig. proceeding); In re Essex Ins., 450 S.W.3d 524, 528 (Tex. 2014) (orig. proceeding) (per curiam); In re Prudential Ins. Co. of Am., 148 S.W.3d at 136.

III. No-Evidence Motions for Summary Judgment

Texas Rule of Civil Procedure 166a(i) governs no-evidence motions for summary judgment. See TEX. R. CIV. P. 166a(i). It provides:

After adequate time for discovery, a party without presenting summary judgment evidence may move for summary judgment on the ground that there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial. The motion must state the elements as to which there is no evidence. The court must grant the motion unless the respondent produces summary judgment evidence raising a genuine issue of material fact.

Id. Thus, Rule 166a(i) "requires that a no-evidence motion specifically state the element or elements for which there is no evidence." Cmty. Health Sys. Pro. Servs. Corp. v. Hansen, 525 S.W.3d 671, 695 (Tex. 2017). The supreme court has "called for strict enforcement of this requirement." Id. (citing Timpte Indus., Inc. v. Gish, 286 S.W.3d 306, 310-11 (Tex. 2009), and McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 33942 (Tex. 1993)). In this regard, "[a] no-evidence movant . . . cannot rely on sources outside of the motion itself to meet the specificity requirement." Border Demolition & Env't, Inc. v. Pineda, 535 S.W.3d 140, 158 (Tex. App.-El Paso 2017, no pet.); see McConnell, 858 S.W.2d at 339 (holding that the specific grounds for summary judgment must be expressly presented in the motion for summary judgment itself and not in a brief filed contemporaneously with the motion or in the summary judgment evidence).

If a no-evidence motion for summary judgment meets the rule's requirements, the "burden then falls entirely on the adverse party to produce summary judgment evidence raising a genuine issue of material fact." Draughon v. Johnson, No. 20-0158, 2021 WL 2387430, at *3, ___S.W.3d ___, ___(Tex. June 11, 2021); see Town of Dish v. Atmos Energy Corp., 519 S.W.3d 605, 608 (Tex. 2017) ("As the residents never responded to [the movant's] no-evidence point, the trial court properly granted [the movant's] summary judgment motion."); see generally TEX. R. CIV. P. 166a(i). "[T]he nonmovant need not 'marshal' its evidence or prove up its case to defeat a no-evidence motion." Town of Shady Shores v. Swanson, 590 S.W.3d 544, 551-52 (Tex. 2019); see TEX. R. CIV. P. 166a(i) cmt.; Hamilton v. Wilson, 249 S.W.3d 425, 426 (Tex. 2008) (per curiam). Instead, "the nonmovant is required only to produce enough evidence-that is, more than a scintilla-to create a genuine issue of material fact as to the challenged element." Town of Shady Shores, 590 S.W.3d at 551. Evidence is more than a scintilla if it "would enable reasonable and fair-minded jurors to differ in their conclusions." Hamilton, 249 S.W.3d at 426 (citing City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005)).

If the nonmovant fails to carry its burden to produce summary judgment evidence raising a genuine issue of material fact, the trial court "must" grant the no-evidence motion for summary judgment. TEX. R. CIV. P. 166a(i); see B.C. v. Steak N Shake Operations, Inc., 598 S.W.3d 256, 259 (Tex. 2020) (per curiam). Accordingly, the court may grant a no-evidence motion for summary judgment by default if the nonmovant does not file a response and the motion states sufficient grounds for a final summary judgment. See Lucio v. John G. &Marie Stella Kenedy Mem'l Found., 298 S.W.3d 663, 671 (Tex. App.- Corpus Christi-Edinburg 2009, pet. denied); Landers v. State Farm Lloyds, 257 S.W.3d 740, 746 (Tex. App.-Houston [1st Dist.] 2008, no pet.); see also Town of Dish, 519 S.W.3d at 608.

The denial of a no-evidence motion for summary judgment is subject to the same standard of review, by appeal and mandamus, as the denial of a traditional motion for summary judgment. See TEX. R. CIV. P. 166a(i) cmt.; In re R.W., 129 S.W.3d 732, 744 (Tex. App.-Fort Worth 2004, pet. denied); Hines v. Comm'n for Lawyer Discipline, 28 S.W.3d 697, 700 (Tex. App.-Corpus Christi-Edinburg 2000, no pet.). "[M]andamus is generally unavailable when a trial court denies summary judgment, no matter how meritorious the motion." In re McAllen Med. Ctr., Inc., 275 S.W.3d 458, 465 (Tex. 2008) (orig. proceeding); see In re Acad., Ltd., 625 S.W.3d at 32. However, "that principle is not, and cannot be, absolute." In re Acad., Ltd., 625 S.W.3d at 32. Thus, extraordinary circumstances may justify granting mandamus relief for the denial of a motion for summary judgment. Id. at 36 (collecting examples).

IV. Analysis

In its first issue, Kingman asserts that the trial court abused its discretion by denying Kingman's no-evidence motion for summary judgment because the real parties failed to file a response to the motion and thus failed to meet their burden to avoid summary...