NCNB Texas Nat. Bank v. Carpenter

• Decision Date: 10 March 1993
• Docket Number: No. 2-92-143-CV,2-92-143-CV
• Parties: NCNB TEXAS NATIONAL BANK and Greg Stephenson, Substitute Trustee, Appellants, v. Brooks CARPENTER and Wife, Pearl Carpenter, Appellees.
• Court: Texas Court of Appeals

Page 875

849 S.W.2d 875

NCNB TEXAS NATIONAL BANK and Greg Stephenson, Substitute Trustee, Appellants, v. Brooks CARPENTER and Wife, Pearl Carpenter, Appellees.

No. 2-92-143-CV.

Court of Appeals of Texas,

Fort Worth.

March 10, 1993.

Nichols, Jackson, Kirk & Dillard, and Tim Kirk, John Pierce Griffin, Christina A. Melton, Dallas, for appellants.

Meier & Parker, L.C. and William C. Meier, Bedford, for appellees.

Before LATTIMORE and DAY, JJ. and CLYDE R. ASHWORTH, J. (Retired) Sitting by assignment.

OPINION

DAY, Justice.

NCNB Texas National Bank and Greg Stephenson, Substitute Trustee (NCNB), appeal from the trial court's order granting summary judgment, declaratory judgment, and attorney's fees in favor of Brooks and Pearl Carpenter (the Carpenters).

We reverse and remand for trial on the merits.

The undisputed facts in this case are as follows: By warranty deed dated January 31, 1976, the Carpenters acquired a 187.93-acre tract of land in Erath County, Texas. The Carpenters assumed and agreed to pay to Stephenville Bank & Trust Company a promissory note in the original amount of $50,000, dated October 2, 1972 (the $50,000 first lien note). From 1976 until the present, the land has been used for agricultural purposes, including grazing cattle and livestock and raising hay. A barn, but no residence, is located on the property. The Carpenters' residence is located on a separate 27-acre tract of land in Erath County near the City of Stephenville, Texas.

On December 1, 1983, Interfirst Bank Stephenville, N.A. (Interfirst), NCNB's predecessor-in-interest, made a loan consolidating all the previously existing loans that Randall Carpenter ¹ had with Interfirst (the 1983 loan). As consideration for the loan, Brooks and Pearl Carpenter gave a deed of trust for the 187.93 acres to Karen Domel, Trustee, for the benefit of Interfirst (the 1983 deed of trust). ² Brooks Carpenter orally represented to Interfirst's loan officer, Monty Bedwell, that the 187.93-acre tract was not the Carpenters' homestead. The 1983 deed of trust also makes the following representation:

Grantors [Brooks and Pearl Carpenter] expressly represent the property hereinabove mentioned and conveyed to the Trustee forms no part of any property owned, used, or claimed by the Grantors as exempted from forced sale under the laws of the State of Texas, and Grantors renounce all and every claim thereto under any such law or laws.

The Carpenters and Interfirst agreed at the time the 1983 loan was made that it was inferior to the $50,000 first lien note.

At the closing of the 1983 loan, Brooks and Pearl Carpenter, Randall Carpenter, and Randall's wife, Isla, executed a written commercial loan purpose statement that contained an exempt property disclaimer virtually identical to the one in the 1983 deed of trust.

In 1986 the 1983 loan was renewed and extended (the 1986 loan). By deed of trust dated February 27, 1986, Brooks and Pearl Carpenter again represented that the 187.93-acre tract was not their homestead. The 1986 deed of trust contained the following representation:

28. Designation of Homestead. Grantors [Brooks and Pearl Carpenter] expressly represent that the property hereinabove mentioned and conveyed to the Trustee forms no part of any property owned, used or claimed by Grantors as exempted from forced sale under the laws of the State of Texas, and Grantors renounce all and every claim thereto under any such law or laws and hereby expressly designate as their homestead and as constituting all the property owned, used or claimed by them as exempt under such laws other property owned by them. [Emphasis supplied.]

Before making the 1983 loan, and at least semi-annually thereafter, Bedwell visited the 187.93-acre tract and observed that it was used to graze cattle and for a haying operation in conjunction with a dairy business. Bedwell was also aware that the Carpenters owned more than 400 rural acres in Erath County, in addition to the 187.93 acres in question.

Sometime after 1986, the Carpenters defaulted on the 1986 loan. Accordingly, by letter dated March 30, 1990, NCNB demanded that the Carpenters pay the 1986 note in full within ten days. In response, the Carpenters, through their attorney, notified NCNB that they claimed the 187.93-acre tract as part of their homestead. NCNB then advised the Carpenters, by letter dated May 14, 1990, and an accompanying notice of substitute trustee's sale, that NCNB intended to foreclose its lien on the 187.93-acre tract on June 5, 1990.

On April 23, 1990, Brooks Carpenter filed an application for a 1-d-1 agricultural appraisal of the 187.93 acres. On or about May 16, 1990, Brooks Carpenter obtained a survey deleting 15 acres from the 187.93-acre tract. The Carpenters assert that the remaining 172.93 acres, along with the 27-acre tract upon which they reside, constitute their rural homestead.

On May 30, 1990, the Carpenters petitioned in Erath County District Court for a temporary restraining order and a temporary injunction prohibiting NCNB from foreclosing on the lien against the 172.93 acres. The trial court granted the Carpenters' requests. The suit was subsequently transferred to Tarrant County by court order entered upon the parties' joint motion for change of venue.

The Carpenters then filed a motion for summary judgment in Tarrant County. By their motion, the Carpenters sought a declaration (1) that NCNB's lien against the 172.93 acres is void, thus prohibiting foreclosure, (2) that the 172.93-acre tract and the 27 acres upon which the Carpenters reside is their rural homestead, and (3) attorney's fees. The trial court granted the Carpenters' motion, and NCNB appeals from that order.

NCNB raises the following grounds on appeal: (1) summary judgment is improper in this case because distinct factual disputes exist as to whether the Carpenters: (a) used and occupied the 172.93 acres as their homestead, (b) established their homestead claim as a matter of law, (c) are estopped from claiming the property as their homestead, and (d) had abandoned their homestead claim to the property; (2) the trial court improperly held that NCNB must establish estoppel as a matter of law; and (3) the declaratory judgment and award of attorney's fees are also improper since the Carpenters failed to establish their homestead claim as a matter of law.

Relying on TEX.R.CIV.P. 94, the Carpenters assert the trial court properly granted summary judgment in this case because NCNB failed to properly plead and prove estoppel, and because NCNB failed to plead abandonment. The Carpenters contend the affirmative defense alleged in NCNB's original answer lacks the detrimental reliance element and is therefore insufficient to constitute a plea of estoppel. The Carpenters also claim NCNB waived the abandonment issue by not raising it in NCNB's original answer. Rule 94, which requires certain defenses to be affirmatively pled, is not applicable in summary judgment proceedings. Holleman v. Halliburton Co., 450 S.W.2d 883, 886 (Tex.Civ.App.--Fort Worth 1970, no writ); see also Texana Oil Co. v. Stephenson, 521 S.W.2d 104, 107 (Tex.Civ.App.--El Paso 1975, no writ). When the affidavits or other summary judgment evidence disclose facts that render the position of the moving party untenable, summary judgment should be denied regardless of defects that may exist in the pleadings of the opposite party. Womack v. Allstate Ins. Co., 156 Tex. 467, 296 S.W.2d 233, 237 (1956); see also TEX.R.CIV.P. 166a(c).

Because Rule 94 is inapplicable in summary judgment cases, whether NCNB properly raised estoppel and abandonment in its pleadings, is irrelevant to this appeal. NCNB raised both estoppel and abandonment in its response to the Carpenters' motion for summary judgment, and the Carpenters do not challenge the legal sufficiency of those allegations. Consequently, if the Carpenters established their homestead claim as a matter of law, we must review the summary judgment evidence to determine whether it shows that there existed a genuine issue of material fact with regard to estoppel or abandonment.

In its first point of error, NCNB complains the trial court improperly declared the 172.93 acres part of the Carpenters' homestead. In its second point of error, NCNB challenges the propriety of summary judgment in favor of the Carpenters, contending that fact issues exist concerning whether the Carpenters: (1) used and occupied the property in question as their homestead; (2) are estopped to claim the property is their rural homestead; and (3) abandoned their homestead claim to the property. We agree with NCNB that there are factual disputes concerning at least the Carpenters' homestead claim and NCNB's estoppel claim.

In their motion for summary judgment, the Carpenters asserted that they have been in actual possession of the property from the time they acquired it in 1976 to the present and have continually used it "for agricultural purposes, including the grazing of cattle and livestock and the raising of agricultural products such as hay" to support their family. The Carpenters also asserted that Bedwell knew the Carpenters were using the property for these purposes, as well as for a dairy land operation, prior to the time the Carpenters executed the 1986 note and deed of trust. The Carpenters made similar assertions regarding their possession and use of the property, and Bedwell's knowledge of it, in their affidavits in support of their motion for summary judgment.

In its response to the Carpenters' motion for summary judgment, NCNB contended that the property in dispute was not occupied or used as a home by the Carpenters. In his affidavit in support of NCNB's response, Bedwell stated that, based on his personal visits to and observation of the property, the land was being used for a hay field operation in conjunction with a dairy business. Bedwell also stated, however, that at the time of the 1983 and 1986 loans, he had...