Texas Commerce Bank v. Correa

• Decision Date: 24 August 2000
• Docket Number: No. 13-98-598-CV,13-98-598-CV
• Citation: 28 S.W.3d 723
• Parties: (Tex.App.-Corpus Christi 2000) TEXAS COMMERCE BANK- RIO GRANDE VALLEY, N.A., Appellant, v. RENE CORREA, AS ADMINISTRATOR OF THE ESTATE OF ARTHUR J. SHWERY, DECEASED, Appellee
• Court: Texas Court of Appeals

Page 723

28 S.W.3d 723 (Tex.App.-Corpus Christi 2000)

TEXAS COMMERCE BANK- RIO GRANDE VALLEY, N.A., Appellant, v. RENE CORREA, AS ADMINISTRATOR OF THE ESTATE OF ARTHUR J. SHWERY, DECEASED, Appellee.

No. 13-98-598-CV

COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS, CORPUS CHRISTI

August 24, 2000

Rehearing Overruled September 28, 2000.

On appeal from the 92nd District Court of Hidalgo County, Texas.

Before Justices Dorsey, Chavez, and Rodriguez.

OPINION

Opinion by Justice Dorsey.

The issue in this case is whether the district court in Hidalgo County had subject matter jurisdiction over a foreclosure proceeding which ordered foreclosure of property that was, at one time, part of an estate. We hold that it did. Because this case involves several different lawsuits, we have set out separately the facts relevant to each cause.

The Estate Matter

In 1981, the Will of Arthur Shwery was admitted to probate in a county court at law in Hidalgo County. The Will appointed an independent executor and directed that no action other than the probating and recording of the Will and the return of an inventory, appraisement and list of claims shall be had in any court in relation to the settlement or administration of his estate. Accordingly, the county court at law appointed an independent executor, who subsequently resigned, and the court appointed several independent co-administrators to serve as his successors.

Seven years later, the independent co-administrators filed a "Final Account and Exhibit of Independent Co-Administrators." This document was verified by each of the administrators. Attached to the document was an exhibit that listed the assets remaining in the hands of the administrators. The administrators also filed an application for approval of the final account and exhibit, and requested the court to approve of their resignations as administrators.

The court entered an order approving the final account and exhibit and the resignations of the administrators that stated:

The Court, having examined the final account and exhibit and resignations of Applicants and hearing the evidence in support of same, finds that the allegations contained in the Application are true; that notice and citation have been given in the manner and for the length of time required by law; that the final account and exhibit of Applicants filed in this cause complies with the law in every respect; that it should be approved and filed; that the assets remaining in the hands of Applicants be delivered to the persons entitled thereto; and that the resignations of the Applicants should be accepted and approved;

It is, therefore, ORDERED, ADJUDGED and DECREED that the final account and exhibit is hereby approved; and that the resignations of the Applicants are hereby accepted and approved.

No further action was taken in the county court at law regarding the Estate until the next year, when Texas Commerce Bank-McAllen, N.A. (herein "TCB" or "the bank")¹ filed an application for appointment of a temporary administrator.

The Foreclosure Suit

The next year, 1989, TCB filed a petition in the district court seeking foreclosure on a piece of property pledged by the co-administrators of the Estate under a deed of trust.² This petition named not only the temporary administrator of Shwery's Estate as a defendant, but also named each of Shwery's twenty-four heirs. All were served with citation. TCB filed a motion for summary judgment on its petition.

In May of 1990, the 93rd District Court granted a judgment of foreclosure pursuant to TCB's summary judgment motion. The court also ordered a sheriff's sale of the property. TCB purchased the property after being the highest bidder at the sheriff's sale held the next month.³

The Environmental Contamination Suit

Two years later, TCB brought suit against co-owners and prior owners of the property seeking damages and indemnification for environmental contamination. This suit named as a defendant the administrator of Arthur J. Shwery's estate, alleging that the Estate was a co-owner of the property.

The Estate filed a counterclaim against TCB seeking a declaratory judgment that TCB had never acquired ownership of the property. It argued that the foreclosure was a matter incident to Shwery's Estate and that the probate court had exclusive subject matter jurisdiction over it. Accordingly, the district court's order of foreclosure and sheriff's sale was void. Also, the Estate argued that the district court lacked personal jurisdiction over any properly authorized personal representative of the Estate.

The Estate brought a motion for summary judgment on its counterclaim, which the trial court granted. The court then severed that part of the lawsuit, and TCB brought this appeal.

Standard of Review

This court reviews the granting of summary judgment de novo. Natividad v. Alexis, Inc., 875 S.W.2d 695, 699 (Tex. 1994). The Estate, as movant for summary judgment, had the burden of showing that there are no genuine issues of material fact and that it is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Nixon v. Mr. Property Management, Co., 690 S.W.2d 546, 548-49 (Tex. 1985). Because the Estate brought summary judgment on its counterclaim, it was in the posture of a plaintiff. As movant, the plaintiff must conclusively prove its entitlement to prevail on each element of the cause of action as a matter of law. Gulf, Colorado & Santa Fe Ry. Co. v. McBride, 159 Tex. 442, 322 S.W.2d 492, 500 (1958); Brazos Valley Community Action Agency v. Robison, 900 S.W.2d 843, 845 (Tex. App.--Corpus Christi 1995, writ denied). The plaintiff meets the burden if it produces evidence that is sufficient to support an instructed verdict at trial. Brazos Valley, 900 S.W.2d at 845.

The defendant-nonmovant then has an opportunity to show that the movant did not prove that there were no material issues on the essential elements of each of the movant's claims. Destec Properties Ltd. Partnership v. Freestone Cent. Appraisal Dist., 6 S.W.3d 601, 608 (Tex. App.--Waco 1999, no pet.). In deciding whether there is a material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true, every reasonable inference must be indulged in favor of the non-movant, and any doubts must be resolved in its favor. Sysco Food Servs., Inc. v. Trapnell, 890 S.W.2d 796, 800 (Tex. 1994).

Application

A. Jurisdictional Issues

The Estate sought a judgment declaring that TCB owned no interest in the property because the district court lacked jurisdiction over the foreclosure proceedings. Actions taken by a court without subject matter jurisdiction are void. Mapco, Inc. v. Forrest, 795 S.W.2d 700, 703 (Tex. 1990); Garcia-Marroquin v. Nueces County Bail Bond Bd., 1 S.W.3d 366, 373 (Tex. App.--Corpus Christi 1999, no pet.). The question of whether the district court possessed jurisdiction to order the foreclosure and sheriff's sale of the property was the proper subject of a declaratory judgment action. See Tex. Civ. Prac. & Rem Code Ann. 37.004 (Vernon 1997) (authorizing declaratory judgment actions for construction of a written instrument); and 73.005 (authorizing them for declaration of rights with respect to estate matters).

Article 5, section 8 of the Texas Constitution defines the jurisdiction of the district courts. Their jurisdiction "consists of exclusive, appellate, and original jurisdiction of all actions, proceedings, and remedies, except in cases where exclusive, appellate, or original jurisdiction may be conferred by this Constitution or other law on some other court, tribunal, or administrative body." Tex. Const. art. 5, 8. The probate code limits the jurisdiction of the district courts by conveying to other courts exclusive jurisdiction over certain probate matters. See Tex. Prob. Code Ann. 5 (Vernon supp. 1999).

Section 5(b) of the probate code states that:

[I]n those counties where there is a statutory probate court, county court at law, or other statutory court exercising the jurisdiction of a probate court, all applications, petitions and motions regarding probate and administrations shall be filed and heard in such courts and the constitutional county court, rather than in the district courts . . . .

Id. at 5(b).

That statute also grants to all courts that exercise original probate jurisdiction the power to hear all matters incident to an estate. Id. at 5(e). "Matters incident to an estate" includes a suit for foreclosure of estate property. Id. at 5A. Not only does the court have the power to hear matters incident to an estate, but it has exclusive jurisdiction over all such matters when an estate administration is pending in that court. Bailey v. Cherokee County Appraisal Dist., 862 S.W.2d 581, 586 (Tex. 1993). Thus, in this case, the Estate argues that TCB's foreclosure action was a matter incident to Shwery's estate over which the county court at law had exclusive subject matter jurisdiction because the administration of Shwery's Estate was pending in that court.

However, we hold that the Estate's administration was closed when the foreclosure suit was filed. "A court empowered with probate jurisdiction may only exercise its probate jurisdiction over matters incident to an estate when a probate matter proceeding related to such matter is already pending." Bailey, 862 S.W.2d at 585; Estate of Hanau, 806 S.W.2d 900, 904 (Tex. App.--Corpus Christi 1991, writ denied). Where the record does not reveal that a probate proceeding was taking place or was pending when suit was filed, section 5 of the probate code dealing with matters incident to an estate is not triggered. Schuld v. Dembrinski, 12 S.W.3d 485, 487 (Tex. App.--Dallas 2000, no pet.); Qualia v. Qualia, 878 S.W.2d 339, 341 (Tex. App.--San Antonio 1994, writ denied); Sumaruk v. Todd, 560 S.W.2d 141, 144 (Tex. Civ. App.--Tyler 1977, no writ). Hence, because no probate proceeding was ongoing or pending when TCB filed its...