Solares v. Solares

• Decision Date: 28 August 2007
• Docket Number: No. 05-06-00376-CV.,05-06-00376-CV.
• Parties: George SOLARES, Appellant/Cross-Appellee v. Alicia SOLARES, Appellee/Cross-Appellant v. Jack D. Rushing and George Solares, William Hudson, and Jack Rushing, a Texas General Partnership, Cross-Appellees.
• Court: Texas Court of Appeals

232 S.W.3d 873

George SOLARES, Appellant/Cross-Appellee v. Alicia SOLARES, Appellee/Cross-Appellant v. Jack D. Rushing and George Solares, William Hudson, and Jack Rushing, a Texas General Partnership, Cross-Appellees.

No. 05-06-00376-CV.

Court of Appeals of Texas, Dallas.

August 28, 2007.

Jeffrey W. Hellberg, Jeffrey W. Hellberg, Jr., P.C., Dallas, Christopher M. Weil, Weil & Petrocchi, P.C., Dallas, for appellants.

William Chu, The Law Offices of William Chu, Addison, for appellee.

Before Justices MOSELEY, O'NEILL, and MAZZANT.

OPINION

Opinion by Justice O'NEILL.

Alicia Solares (Alicia) sued her former husband George Solares (George), Jack D. Rushing (Rushing), and "George Solares, William Hudson, and Jack Rushing, A Texas General Partnership" (Partnership), for breach of warranty of title. She also sued for fraud against George, for conversion against Rushing, and sought declaratory relief. George appeals a judgment on a jury verdict for Alicia, arguing in three issues that (i) her claims were barred by limitations and she waived the discovery rule by not pleading it; (ii) the trial court lacked jurisdiction under TEX. FAM.CODE § 9.001(a); and (iii) a judgment for fraud is barred as a matter of law because George owed no duty to disclose and because the fraud claim sounds only in breach of contract or warranty of title, or alternatively yields a double recovery of damages requiring an election of remedies. Alicia appeals the portion of the judgment denying her request for declaratory relief and appeals the trial court's order granting a directed verdict for Rushing on her conversion claim. We affirm in part and reverse and render in part.

BACKGROUND

In a June, 1998 mediated settlement agreement between George and Alicia in their divorce (Divorce Settlement), George agreed to convey his half-interest in certain realty (Property). George and Alicia were both represented by counsel. The Divorce Settlement was announced to the divorce court in September, 1998 and incorporated into the final divorce decree signed in December, 1998. George apparently operated his law practice at the Property and retained the assets of the practice and the right to occupy the Property through August, 1998. On November 3, 1998, George executed a warranty deed (Deed) conveying the entire Property. The Deed recited that

Grantor's heirs, executors, administrators and successors are hereby bound to warrant and forever defend all and singular the property to Grantee and Grantee's heirs, executors, administrators, successors and assigns against every person whomsoever lawfully claiming or to claim the same or any part thereof. . . .

George later claimed he did not own the Property but that it was held in the name of a partnership in which he and Rushing were partners. Alicia sued George, Rushing, and the Partnership on November 8, 2002, more than four years after George executed the Deed.

Alicia's petition raised issues on the Property's true ownership and she sued:

• George for breach of the Deed's warranty of title;

• George for fraud based on the "special relationship" between husband and wife;

• Rushing for conversion of mortgage- and tax-related payments she claimed she made on the Property; and

• For "declaration as to the rights of the parties in the Subject Property and/or in [the Partnership] is/was a Texas general partnership [sic]."¹

At the conclusion of Alicia's case-in-chief, the court granted Rushing's motion for directed verdict on Alicia's conversion claim. That was based on a stipulation on the record by Rushing and the Partnership to make her whole, in the event she did not ultimately recover the Property, by crediting her for any mortgage- and tax-related payments she made, eliminating her claim for damages. She did not challenge that stipulation and the court discharged Rushing.

The court further ruled Alicia's declaratory relief claims should be decided by the court rather than a jury and set them for a separate bench trial. The record does not show that Alicia objected to the court's taking of her declaratory relief claims from the jury. At the charge conference she announced she had no objections to the charge and the record does not show she requested any additional jury submissions on her declaratory relief claims.

Also at the conclusion of Alicia's case-in-chief, George moved for directed verdict arguing that her breach of warranty of title claim brought on November 8, 2002 was barred by four-year limitations. He argued the claim accrued on November 3, 1998, the date of the Deed's execution, because she was then on notice of a claim by Rushing of superior title. The court denied the motion.

In the charge, the jury was asked by what date in the exercise of reasonable diligence Alicia should have discovered breach of the Deed and answered July 29, 1999. There is evidence that this was when the Deed was recorded and returned to her. The record shows no objection by George to testimony adduced on this jury issue and no objection to its submission.

The jury ultimately found George failed to comply with the Deed,² awarding Alicia $200,000; and found George committed fraud, awarding Alicia $350,000. The trial court entered judgment for all damages awarded.

At the later bench trial on Alicia's declaratory relief claims, George, Rushing, and the Partnership objected to proceeding without a jury, which the court overruled. The record does not show that Alicia herself demanded a jury or objected to proceeding without one. She participated in the bench trial, took testimony, and on resting stated she would stand on evidence presented at the earlier jury trial. The court's final judgment ordered that Alicia "take nothing on her declaratory judgment causes of action" because she failed to obtain any jury findings on the disputed facts.

DISCUSSION

Jurisdiction

We first address George's second issue that the trial court lacked jurisdiction. Our review of this issue of law is de novo. Ben Bolt-Palito Blanco Consol. Indep. School Dist. v. Tex. Political Subdivs. Prop./Cas. Joint Self-Ins. Fund, 212 S.W.3d 320, 323 (Tex.2006). George objected in the trial court to its jurisdiction based on TEX. FAM.CODE ANN. § 9.001(a) (Vernon 2006), which provides:

A party affected by a decree of divorce or annulment providing for a division of property as provided by Chapter 7 may request enforcement of that decree by filing a suit to enforce as provided by this chapter in the court that rendered the decree.

Citing no authority, George argues this provision vests the court in which George and Alicia's divorce decree was entered with exclusive jurisdiction over Alicia's claims in this suit. Specifically, George argues the divorce court's jurisdiction was exclusive because Alicia's suit seeks to enforce representations made during the divorce proceedings and to enforce the Deed that George was ordered to execute before entry of the final decree of divorce. George also argues the divorce court had exclusive jurisdiction because Alicia's suit seeks a declaration of the parties' rights under documents signed under the divorce court's orders.

George's position is unfounded. Alicia sued for damages for common law fraud and conversion. She sued for damages on a warranty of title in a Deed conveying real estate, a legal instrument distinct from the divorce decree and subject to laws governing conveyances of realty. She sued for a declaration of rights to a tract of real property and whether a partnership existed under Texas law. Her suit is not one to enforce or clarify the divorce decree. We overrule George's second issue.

Breach of Warranty of Title

Under his first issue, George argues the trial court improperly denied him a directed verdict on limitations on Alicia's breach of warranty of title claim. An appeal from the denial of a motion for directed verdict is in essence a challenge to the legal sufficiency of the evidence. Lochinvar Corp. v. Meyers, 930 S.W.2d 182, 187 (Tex.App.-Dallas 1996, no writ). George bore the initial burden of pleading, proving, and securing findings to sustain his affirmative defense of limitations. Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 517 (Tex.1988). A legal sufficiency evidentiary challenge on an issue on which an appellant bears the burden of proof requires that the appellant demonstrate the evidence conclusively established all vital facts to support the issue. Lochinvar Corp. v. Meyers, 930 S.W.2d 182, 188 (Tex. App.-Dallas 1996, no writ). Evidence is conclusive "only if reasonable people could not differ in their conclusions, a matter that depends on the facts of each case." City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex.2005).

The parties agree that the governing limitations period is four years. Morrison v. Howard, 261 S.W.2d 910, 912 (Tex.Civ.App.-Austin 1953, writ ref'd n.r.e.); see also TEX. CIV. PRAC. & REM.CODE § 16.051 (residual limitations period where there is no express statute). A claim for breach of warranty of title accrues and limitations begins running on the date of the breach. Schneider v. Lipscomb County Nat'l Farm Loan Ass'n, 196 S.W.2d 954, 957 (Tex.Civ.App.-Amarillo 1946), rev'd on other grounds, 146 Tex. 66, 202 S.W.2d 832, 834 (1947).

A claim for breach of a grantor's covenant to warrant title "does not arise until there has been an eviction," which may include "constructive eviction." Schneider v. Lipscomb County Nat'l Farm Loan Ass'n, 146 Tex. 66, 202 S.W.2d 832, 834 (1947). Constructive eviction has two elements, requiring the grantee-covenantee suing for breach of the covenant to prove that: (i) "paramount title has been positively asserted against the covenantee," which "in fact is paramount" and (ii) the covenantee has "yielded to [the assertion] by surrendering possession or by purchasing the title." Id. When constructively evicted, the grantee may surrender the land to the superior titleholder and resort to recovering on the warranty....