Mortgage v. Flores

• Decision Date: 27 April 2011
• Docket Number: Civil Action No. C–09–312.
• Parties: VANDERBILT MORTGAGE AND FINANCE, INC., Plaintiff,v.Cesar FLORES, et al, Defendants.
• Court: U.S. District Court — Southern District of Texas

789 F.Supp.2d 750

VANDERBILT MORTGAGE AND FINANCE, INC., Plaintiff,

v.Cesar FLORES, et al, Defendants.

Civil Action No. C–09–312.

United States District Court,S.D. Texas,Corpus Christi Division.

April 27, 2011.

Jorge C. Rangel, Jaime Santiago Rangel, The Rangel Law Firm, James W. Upton, Kenneth Clifford Littlefield, Upton Mickits & Heymann, LLP, Corpus Christi, TX, Lee E. Bains, Jr., Edward S. Sledge, IV, Thomas W. Thagard, III, Maynard Cooper & Gale PC, Birmingham, AL, Cristina Espinoza Rodriguez, Stephen G. Tipps, Baker Botts, Jennifer Anne Powis, Sierra Club, Houston, TX, Patton G. Lochridge, McGinnis Lochridge et al., Austin, TX, for Plaintiff.Baldemar F. Gutierrez, Attorney At Law, J. Javier Gutierrez, The Gutierrez Law Firm, Inc., Alice, TX, for Defendants.

ORDER

JANIS GRAHAM JACK, District Judge.

Pending before the Court are the following post-trial motions: Intervention–Defendants Vanderbilt and CMH Homes' Renewed Motion for Judgment as a Matter of Law or, in the alternative, for New Trial or, in the alternative, for Remittitur, with Respect to the Claims of the Trevinos (D.E. 296); Intervention–Defendant Clayton Homes, Inc.'s Motion to Vacate the Judgment and to Dismiss the Trevinos' Claim for Lack of Personal Jurisdiction, or in the alternative, For Judgment as a Matter of Law, or in the alternative, for New Trial, or in the alternative, for Remittitur with Respect to the Claims of the Trevinos (D.E. 297); Plaintiff/Counter–Defendant Vanderbilt's Motion for Judgment as a Matter of Law or, in the alternative, for New Trial or, in the alternative, for Remittitur, with Respect to the Claims of Flores and King (D.E. 298); and Plaintiff/Counter–Defendant Vanderbilt's Motion for Judgment as a Matter of Law on Vanderbilt's Affirmative Claims for Breach of Contract and for Writ of Possession or, in the alternative, for New Trial (D.E. 299).

The Clayton parties have requested hearings on each of these motions. However, the Court finds no hearing is required. For the reasons stated herein, all of the above motions are DENIED.

I. Background

On November 10, 2010, trial of the above-styled action began. On November 18, 2010, the jury found in favor of Defendants/Counter–Plaintiffs Cesar Flores (“Flores”) and Alvin King (“King”) on each of their three claims against Plaintiff/Counter–Defendant Vanderbilt Mortgage and Finance, Inc. (“Vanderbilt”). The jury also found in favor of Intervenors Maria and Arturo Trevino (“the Trevinos”) on their claim under the fraudulent lien statute, Tex. Civ. Prac. & Rem.Code § 12.002, finding that each of the three Intervention–Defendants, Vanderbilt, CMH Homes and Clayton Homes, Inc. (“CHI”), was liable for filing two fraudulent liens. (D.E. 285.)

On February 28, 2011, the Court entered its Amended Final Judgment in the above styled action. The Court awarded Flores and King $215,000 each based on their fraud claim against Vanderbilt, as well as prejudgment interest. The Court awarded Maria and Arturo Trevino $60,000 each based on their fraudulent lien claim against Vanderbilt, CMH Homes, and CHI, as well as prejudgment interest. (D.E. 284.)

Vanderbilt, CMH Homes and CHI (collectively, “the Clayton parties”) have now filed four post-trial motions objecting to the jury's verdict and the Amended Final Judgment. (D.E. 296, D.E. 297, D.E. 298, D.E. 299.) The Counter–Plaintiffs and the Intervenors have timely responded. (D.E. 300, D.E. 301.)

II. Vanderbilt and CMH Homes' Renewed Motion for Judgment as a Matter of Law or, in the alternative, for New Trial or, in the alternative, for Remittitur, with Respect to the Claims of the Trevinos (D.E. 296)A. Rule 50(b) Renewed Judgment as a Matter of Law

Pursuant to Fed.R.Civ.P. 50(a), the court may grant judgment as a matter of law (“JMOL”) during a jury trial once the jury has fully heard evidence on an issue if the court finds that a “reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue.” Fed.R.Civ.P. 50(a)(1); see also Phillips v. F.D. East, 81 Fed.Appx. 483, 485 (5th Cir.2003) (“Judgment as a matter of law is granted properly when ‘a party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue.’ ”) (quoting Reeves v. Sanderson Plumbing Prods., 530 U.S. 133, 149, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000)).

“A party is entitled to judgment as a matter of law ‘only if the evidence points but one way and is susceptible to no reasonable inferences which may support the opposing party's position.’ ” Hampton v. Dillard Dep't Stores, Inc., 247 F.3d 1091, 1099 (5th Cir.2001) (quoting Tyler v. RE/MAX Mountain States, Inc., 232 F.3d 808, 812 (10th Cir.2000)). In deciding whether to grant a JMOL, the court does not “weigh evidence, judge witness credibility, or challenge the factual conclusions of the jury. Judgment as a matter of law is appropriate ... if there is no legally sufficient evidentiary basis for a claim under the controlling law.” Id. (quoting Brown v. Gray, 227 F.3d 1278, 1285 (10th Cir.2000)).

Even if the court denies a motion for JMOL during trial, the party may renew its motion following trial. Pursuant to Rule 50(b), the court may grant judgment as a matter of law following a jury verdict on an issue so long as the motion is filed within 28 days of the entry of judgment. Fed.R.Civ.P. 50(b) The renewed motion for judgment as a matter of law may be accompanied by a Rule 59 motion for a new trial. Fed.R.Civ.P. 50(b). ¹ “It is well established that to preserve the right to file a Rule 50(b) motion the moving party must first request [judgment as a matter of law] at the close of all evidence.” Taylor Publ'g Co. v. Jostens, Inc., 216 F.3d 465, 471 (5th Cir.2000).

B. Analysis

Vanderbilt and CMH Homes (hereafter, “the Clayton parties”) have renewed their motion for JMOL on the Trevinos' claim under the fraudulent lien statute, Tex. Civ. Prac. & Rem.Code § 12.002. The Court denied their prior motions for JMOL on November 15, 2010. (D.E. 246.)

The Clayton parties given three reasons why the Court should grant judgment as a matter of law: first, the Trevinos lack standing under § 12.003; second, the Trevinos' fraudulent lien claim is barred by the statute of limitations; and, third, the Trevinos failed to prove by a preponderance of the evidence that Vanderbilt was involved in the filing of the liens at issue. Most of the arguments the Clayton parties raise in their motion have already been addressed in the record. Nonetheless, the Court briefly discusses each basis for JMOL and addresses any novel arguments in more detail.

1. Standing Under § 12.003

Section 12.003 states that the persons who can bring suit under this section include, “in the case of a fraudulent lien or claim against real or personal property or an interest in real or personal property, the obligor or debtor, or a person who owns an interest in the real or personal property.” § 12.003(a)(8).

In its order on summary judgment, the Court interpreted Tex. Civ. Prac. & Rem.Code § 12.003 as conferring standing on Intervenors Maria and Arturo Trevino. (D.E. 182 at 10); § 12.003. The Clayton parties once again object that the Trevinos lack standing because they conveyed their two parcels of property in the summer of 2003 and the spring of 2005, respectively, and because the liens on their property were released in October 2005. Thus, by the time they filed this lawsuit, the Trevinos did not own the property and the liens had been released. (D.E. 296 at 3–4.)

As the Court explained on summary judgment, the Trevinos qualify as “debtors” and “obligors” under Section 12.003 because they were obligated under the Deed of Trust (DOT) and the Builder's and Mechanic's Lien (“BML”) to make payments pursuant to the Retail Installment Contract (“RIC”) until the liens were released in 2005.² (D.E. 144, Ex. 13(DOT), Ex. 14 (BML.)); see also Taylor Elec. Services, Inc. v. Armstrong Elec. Supply Co., 167 S.W.3d 522, 530–31 (Tex.App.-Ft. Worth 2005) (“[O]ne who is liable as an obligor or debtor on the underlying debt, whether a property owner of the encumbered property or not, may pursue a cause of action under the fraudulent lien or claim statute.”)

The fraudulent lien statute offers plaintiffs a claim for damages based on past injury, providing that a violator may become liable to an injured person for the greater of $10,000 or the actual damages caused by the violation. § 12.002(b). The fact that the Trevinos no longer own the property subject to the lien does not deprive them of the right to seek damages under the fraudulent lien statute to rectify past harm. See City of Los Angeles v. Lyons, 461 U.S. 95, 125, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983) (plaintiffs may seek damages to redress past injury).

Moreover, Texas courts have specifically held that the release of a fraudulent lien does not preclude the ability of a plaintiff to claim damages under Section 12.002(a). See Esau v. Robinson, 2008 WL 2375861, *2, 2008 Tex.App. LEXIS 4260, *1 (Tex.App. Corpus Christi June 12, 2008) (“We refuse to hold that appellant's release of lien effectively precluded the court's ability to hear [Plaintiff's] claim for damages.”) Given this clear interpretation of Section 12.003, the Clayton parties' argument that their release of the liens precludes the Trevinos' ability to recover damages fails. As stated in the Court's Order on summary judgment, the Trevinos had standing to sue under the fraudulent lien statute. (D.E. 182.)

2. Statute of Limitations

The Clayton parties re-urge their argument that the Trevinos' claim is barred by the statute of limitations. (D.E. 296.)

In fraudulent lien causes of action brought under Section 12.002, a four-year statute of limitations applies pursuant to Tex. Civ. Prac. & Rem.Code § 16.051, providing that when no corresponding action is expressly listed within statutes, a residual four-year statute of limitations applies....