Pinnacle Premier Props., Inc. v. Breton

• Decision Date: 06 November 2014
• Docket Number: No. 14–14–00194–CV.,14–14–00194–CV.
• Citation: 447 S.W.3d 558
• Parties: PINNACLE PREMIER PROPERTIES, INC. and Pinnacle Realty Advisors, Inc., Appellants v. Ghislain BRETON, Catherine Denicourt and David Andreis, Appellees.
• Court: Texas Court of Appeals

447 S.W.3d 558

PINNACLE PREMIER PROPERTIES, INC. and Pinnacle Realty Advisors, Inc., Appellants

v.Ghislain BRETON, Catherine Denicourt and David Andreis, Appellees.

No. 14–14–00194–CV.

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

Nov. 6, 2014.

Rehearing Overruled Dec. 4, 2014.

Steven M. Smith, Houston, for Appellants.

Jason R. Bernhardt, Houston, for Appellees.

Panel consists of Justices BOYCE, JAMISON, and DONOVAN.

SUBSTITUTE OPINION

MARTHA HILL JAMISON, Justice.

We issued our original opinion in this case on October 9, 2014. Appellees filed a motion for rehearing. We overrule the motion for rehearing, withdraw our previous opinion, and issue this substitute opinion.

In one issue in this interlocutory appeal, appellants Pinnacle Properties, Inc. and Pinnacle Realty Advisors, Inc. (collectively “Pinnacle”) complain that the district court lacked jurisdiction to enjoin Pinnacle from pursuing two eviction proceedings that were pending in justice court.¹ Although a district court has jurisdiction to enjoin the exercise of a justice court's jurisdiction in an eviction proceeding when certain conditions are met, we conclude the district court erred in granting the temporary injunction because (1) the issues of title and possession were not intertwined and thus the justice court has exclusive jurisdiction over the issue of possession, and (2) appellees have an adequate remedy at law if their wrongful foreclosure claim is meritorious.

Background

The facts are largely undisputed. Melba and Howard Johnson executed a deed of trust (which was duly recorded in Harris County) on the subject property, at the time a vacant lot in the Houston Heights, to secure payment of a $77,500 note signed by Pinnacle Realty Advisors, Inc. and Melba. Four years later, the Johnsons sold the property to Gold Quest Equity, LLC. One month later, Gold Quest sold the property to KAVAC, LLC. KAVAC subdivided the property into two lots, built houses on the lots, and sold one home to appellees Ghislain Breton and Catherine Denicourt and one home to appellee David Andreis.² For unexplained reasons, the note was never paid off.

Melba defaulted under the note. After sending foreclosure notices to the Johnsons, Pinnacle Realty Advisors assigned the note to Pinnacle Premiere Properties, which purchased the property at a foreclosure sale.³ Pinnacle Premiere Properties sent notices to vacate the property to Melba “and All Occupants.” Appellees contend this was the first time they became aware of the foreclosures. Pinnacle Premiere Properties then filed eviction (forcible detainer) proceedings in justice court.

After Pinnacle Premiere Properties filed its lawsuits, appellees filed the underlying lawsuit, asserting claims for trespass to try title and wrongful foreclosure and a suit to quiet title, and seeking an injunction preventing Pinnacle from proceeding with the eviction suits injustice court.⁴ The district court signed a temporary restraining order and then a temporary injunction order preventing Pinnacle from proceeding with the eviction suits.

Discussion

In one issue, Premiere contends the district court exceeded its jurisdiction in granting the temporary injunction. Appellees argue this is not a true jurisdictional challenge; rather, it is a challenge to the district court's grant of the temporary injunction, which we generally review for an abuse of discretion. See, e.g., Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex.1993) ( “The decision to grant or deny a temporary writ of injunction lies in the sound discretion of the trial court, and the court's grant or denial is subject to reversal only for a clear abuse of that discretion.”). We agree that Premiere's complaint is viewed more properly as a challenge to the district court's grant of the injunction, but conclude that the trial court erred in granting the injunctive relief.

I. Although there are some jurisdictional issues involved in our analysis, this appeal is properly characterized as a challenge to the district court's order granting the temporary injunction.

Jurisdiction to hear a forcible detainer action is expressly given to the justice court of the precinct where the property is located. Maxwell v. U.S. Bank Nat'l Ass'n, No. 14–12–00209–CV, 2013 WL 3580621, at *2 (Tex.App.-Houston [14th Dist.] July 11, 2013, pet. dism'd w.o.j.) (mem. op.). A justice court has exclusive jurisdiction to decide the issue of immediate possession, which may not be infringed upon as long as the justice court merely determines possession. Rice v. Pinney, 51 S.W.3d 705, 713 (Tex.App.-Dallas 2001, no pet.). Although a justice court has exclusive jurisdiction to hear a forcible detainer action, a district court may enjoin the exercise of the justice court's jurisdiction in a forcible detainer action when there is a showing that the justice court is without jurisdiction to proceed in the cause or the defendant has no adequate remedy at law. McGlothlin v. Kliebert, 672 S.W.2d 231, 232 (Tex.1984).

We generally review a district court's grant of such an injunction for an abuse of discretion. See id. Although an abuse of discretion does not occur when the trial court heard conflicting evidence and substantive, probative evidence reasonably supports the trial court's decision, we will apply a de novo standard of review when the issue turns on a pure question of law.⁵ See Tenet Health Ltd. v. Zamora, 13 S.W.3d 464, 468–69 (Tex.App.-Corpus Christi 2000, pet. dism'd w.o.j.) (citing State v. Heal, 917 S.W.2d 6, 9 (Tex.1996) ); see also Sharma v. Vinmar Int'l, Ltd., 231 S.W.3d 405, 419 (Tex.App.-Houston [14th Dist.] 2007, no pet.) (“[A]s the trial court functions as the fact finder in a temporary injunction hearing, an abuse of discretion does not exist where the trial court bases its decision on conflicting evidence.”). We review questions of law without deference to a lower court's conclusion. See Heal, 917 S.W.2d at 9 ; Burris v. Metro. Transit Auth. of Harris Cnty., 266 S.W.3d 16, 20 (Tex.App.-Houston [1st Dist.] 2008, no pet.). When, as here, no findings of fact or conclusions of law are filed, the trial court's determination of whether to grant or deny a temporary injunction must be upheld on any legal theory supported by the record.⁶ LasikPlus of Tex., P.C. v. Mattioli, 418 S.W.3d 210, 216 (Tex.App.-Houston [14th Dist.] 2013, no pet.).

Appellees argue that Pinnacle's “failure to brief an abuse of discretion review” resulted in a failure to carry its burden to show an abuse of discretion. We disagree. As discussed, we review questions of law de novo and not for an abuse of discretion. In this case, the relevant facts are not disputed, but we are presented with questions of law regarding the effect of the tenant-at-sufferance clause in the deed of trust, discussed below, and whether appellees, under the undisputed facts, had an adequate remedy at law through their wrongful foreclosure claim. See Glapion v. AH4R I TX, LLC, No. 14–13–00705–CV, 2014 WL 2158161, at *1 (Tex.App.-Houston [14th Dist.] May 22, 2014, no pet.) (mem. op.) (acknowledging whether justice court could exercise jurisdiction over question regarding possession of property is a question of law subject to de novo review); see also 8100 N. Freeway, Ltd. v. City of Houston, 363 S.W.3d 849, 854 (Tex.App.-Houston [14th Dist.] 2012, no pet.) (“A trial court abuses its discretion when it ... misapplies the law to the established facts of the case.”). Pinnacle cited the proper case law for us to determine as a matter of law whether the trial court erred in granting the injunction. See Perry v. Cohen, 272 S.W.3d 585, 588 (Tex.2008) (“[W]e liberally construe issues presented to obtain a just, fair, and equitable adjudication of the rights of the litigants.”). With these standards in mind, we turn to Pinnacle's challenge to the district court's order granting the temporary injunction.

II. Defects in the foreclosure process are not relevant to possession when, as here, the parties to be evicted are subject to a tenant-at-sufferance clause in the deed of trust.

Although a justice court has subject matter jurisdiction over forcible detainers, the justice court lacks jurisdiction to resolve title disputes. Maxwell, 2013 WL 3580621, at *2 ; Black v. Wash. Mut. Bank, 318 S.W.3d 414, 417 (Tex.App.-Houston [1st Dist.] 2010, pet. dism'd w.o.j.). Thus, a forcible detainer only addresses who has the right to possess the property, not who has title to it.⁷ Maxwell, 2013 WL 3580621, at *2 ; Salaymeh v. Plaza Centro, LLC, 264 S.W.3d 431, 435 (Tex.App.-Houston [14th Dist.] 2008, no pet.); see Tex.R. Civ. P. 510.3(e). As a result, when the right to possession cannot be determined without resolving a title dispute, the justice court does not have jurisdiction. Maxwell, 2013 WL 3580621, at *2 ; Rice, 51 S.W.3d at 709.

Of course, the mere existence of a title dispute does not deprive the justice court of jurisdiction. Maxwell, 2013 WL 3580621, at *2. If the title issue does not control the right to possession, it is of no moment. Id. ; Black, 318 S.W.3d at 417. Instead, the issue is whether “the question of title is so intertwined with the issue of possession, th[at] possession may not be adjudicated without first determining title.” Maxwell, 2013 WL 3580621, at *2 (quoting Villalon v. Bank One, 176 S.W.3d 66, 70 (Tex.App.-Houston [1st Dist.] 2004, pet. denied)).

The deed of trust in this case contained the following tenant-at-sufferance clause:

Borrower or any person holding possession of the Property through Borrower shall immediately surrender possession of the Property to the purchaser at [the foreclosure] sale. If possession is not surrendered, Borrower or such person shall be a tenant at sufferance and may be removed by writ of possession or other court proceeding.

Tenant-at-sufferance clauses separate the issue of possession from the issue of title. Id. at *3. Under these provisions, a foreclosure sale transforms the borrower into a tenant at sufferance who must immediately relinquish...