W.H.V. Inc. v. Associates Housing Finance

• Citation: 43 S.W.3d 83
• Decision Date: 29 March 2001
• Docket Number: No. 05-99-02153-CV,05-99-02153-CV
• Parties: (Tex.App.-Dallas 2001) W.H.V., INC., Appellant v. ASSOCIATES HOUSING FINANCE, LLC, Appellee
• Court: Court of Appeals of Texas

Page 83

43 S.W.3d 83 (Tex.App.-Dallas 2001)

W.H.V., INC., Appellant v. ASSOCIATES HOUSING FINANCE, LLC, Appellee

No. 05-99-02153-CV

In The Court of Appeals Fifth District of Texas at Dallas.

March 29, 2001

On Appeal from 366th Judicial District Court Collin County, Texas Trial Court Cause No. 366-1064-98. [Copyrighted Material Omitted] Before Justices James, Wright, and Martin Richter.

OPINION

Opinion by Justice Martin Richter.

In this declaratory judgment suit, we must determine how a lienholder perfects a lien against a mobile home. W.H.V., Inc. ("WHV") appeals the trial court's determination that its recorded real estate lien is inferior to Associates Housing Finance, LLC's ("Associates") registered purchase money lien. In two issues, WHV contends the trial court erred in not granting its motion for summary judgment and in granting Associates' motion for summary judgment. We conclude that because Associates registered its lien in accordance with the Texas Manufactured Housing Standards Act, and WHV did not, Associates' lien is superior in right to the lien claimed by WHV. Therefore, the trial court did not err in resolving the parties' motions for summary judgment.

Factual and Procedural Background

The following summary judgment facts are undisputed.¹ In November 1993, Renita Deaver purchased certain real estate in Collin County (the "property"), and she financed a portion of the purchase price by executing a promissory note (the "note"). The note was secured by a vendor's lien and deed of trust on the property, which was properly recorded in the Collin County real estate records on December 3, 1993. Through assignment, WHV later acquired the note and deed of trust. In March 1994, Ira and Renita Deaver purchased a 1994 double-wide, Redman model 4059 manufactured home (the "mobile home") from a dealer, and as part of the purchase executed a Manufactured Home Retail Installment Contract/Security Agreement (the "contract"). Through assignment and merger, Associates acquired the dealer contract and security interests.

The mobile home was delivered to the Deavers in April 1994, and the dealer installed it on the property in accordance with the minimum governmental standards. On May 18, 1994, the State of Texas issued an original certificate of ownership for the mobile home, which acknowledged the recordation of the dealer's purchase money lien with the State. Between July 1 and December 31, 1994, the Deavers made significant improvements to and around the mobile home, including adding a three-car garage on one side, attaching a covered patio, and installing extensive decking on two other sides.

The Deavers, while owners of the mobile home and property, did not seek to cancel the certificate of ownership and obtain a certificate of attachment. Neither WHV nor its predecessors-in- interest attempted to file a lien specifically against the mobile home. In June 1997, Ira and Renita Deaver divorced, and the divorce decree awarded Ira Deaver all interest in the property.

The note went into default and, on February 3, 1998, WHV purchased the property at a nonjudicial foreclosure sale conducted according to the terms of the deed of trust. The Deavers also defaulted on the contract held by Associates. In July 1998, Associates filed suit against the Deavers seeking a judgment for the unpaid balance on the contract plus interest and an order either giving it possession of the mobile home or directing a sale foreclosing its security interest.

In September 1998, WHV intervened seeking a declaratory judgment concerning its alleged interest in the mobile home. WHV claimed the mobile home had become permanently affixed to the property prior to January 1, 1996, that the mobile home lost its character as personalty, and that WHV's deed of trust lien on the property had attached to the mobile home. WHV sought an order declaring its alleged lien superior to Associates' lien, canceling the certificate of ownership, authorizing the State to issue a certificate of attachment, and awarding attorneys' fees. Associates cross-claimed against WHV for a declaration that its lien survived WHV's foreclosure and remains superior to the lien claimed by WHV and for attorneys' fees.

The trial court resolved the lien issues through the parties' rule 166a(c) cross-motions for summary judgment, denying WHV's requested declaratory relief and granting Associates' requested declaratory relief. The final judgment declared, in part:

that the lien of [Associates] in the subject mobile home was, is, and presently remains valid and subsisting, that [Associates'] lien against the manufactured home has not been eradicated or vitiated, and that [Associates'] lien against the manufactured home is prior and superior to the claimed right, title or interest by [WHV].

This appeal ensued.²

Standard of Review

The standard for reviewing a summary judgment is well established: (1) the movant for summary judgment has the burden of showing there is no genuine issue of material fact and it is entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant must be taken as true; and (3) every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. See Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). The provisions of rule 166a of the rules of civil procedure are similarly applicable to either plaintiffs or defendants moving for summary judgment. Gibbs v. Gen. Motors Corp., 450 S.W.2d 827, 828 (Tex. 1970). To prevail on a rule 166a(c) summary judgment, a plaintiff must conclusively establish all elements of its cause of action as a matter of law. Nationwide Prop. & Cas. Ins. Co. v. McFarland, 887 S.W.2d 487, 490 (Tex. App.-Dallas 1994, writ denied). A matter is conclusively established if ordinary minds could not differ as to the conclusion to be drawn from the evidence. Triton Oil & Gas Corp. v. Marine Contractors & Supply, Inc., 644 S.W.2d 443, 446 (Tex. 1982). We review a summary judgment de novo to determine whether a party's right to prevail is established as a matter of law. Howard v. INA County Mut. Ins. Co., 933 S.W.2d 212, 216-17 (Tex. App.-Dallas 1996, writ denied). When a plaintiff shows its entitlement to summary judgment, the nonmovant defendant seeking to avoid summary judgment must present evidence adequate to raise a fact issue. Brooks v. Sherry Lane Nat'l Bank, 788 S.W.2d 874, 876 (Tex. App.-Dallas 1990, no writ).

When both parties move for summary judgment pursuant to rule 166a(c), each party must carry its own burden and neither can prevail due to the other's failure to meet its burden. Farmers Tex. County Mut. Ins. Co. v. Griffin, 868 S.W.2d 861, 863 (Tex. App.-Dallas 1993, writ denied). When both parties file a motion for summary judgment and one is granted and one is denied, "the reviewing court should review the summary judgment evidence presented by both sides and determine all questions presented and render such judgment as the trial court should have rendered." Comm'rs Court v. Agan, 940 S.W.2d 77, 81 (Tex. 1997); see Jones v. Strauss, 745 S.W.2d 898, 900 (Tex. 1988). Thus, on appeal, this Court considers all evidence accompanying both motions in determining which movant should prevail. Griffin, 868 S.W.2d at 863.

Contentions of the Parties

In two points of error, WHV asserts the trial court erred when it granted Associates' motion for summary judgment on Associates' declaratory judgment counterclaim and when it denied WHV's motion for summary judgment. WHV asserts the evidence conclusively established the mobile home became permanently affixed to the property during its April 1994 installation or, at the latest, after the 1994 construction additions. As a result, WHV contends, the mobile home lost its character as personalty and became subject to WHV's 1993 recorded deed of trust lien. WHV argues that because Associates failed to make a fixture filing pursuant to the business and commerce code, Associates has no lien on the mobile home following WHV's foreclosure. WHV further asserts the Texas Manufactured Housing Standards Act³ (the "MHSA") expressly protects prior lienholders like itself when a mobile home is permanently attached to real estate before the State issues its certificate of ownership. Finally, WHV contends certain 1995 legislative amendments to the property code "grandfathered" its lien rights to the mobile home because the mobile home was permanently affixed to the property prior to January 1, 1996.

Associates vigorously disputes that the mobile home was ever permanently affixed to the property. Regardless, Associates argues it was entitled to summary judgment because the MHSA supercedes all methods of perfecting a lien against a mobile home, whether statutory or common law. Associates asserts, therefore, that because its summary judgment evidence established it complied with the MHSA, and WHV failed to comply with the MHSA, Associates' lien is superior.

Permanent Affixation to Real Estate

In its second point of error, WHV asserts the trial court erred in denying its motion for summary judgment. The foundation of WHV's motion is its contention the mobile home became a "fixture" or permanently attached to the property prior to January 1, 1996. Indeed, unless the mobile home has become part of the real estate, WHV has no lien against the mobile home.

The parties agree three factors are relevant to determining whether personalty has become a fixture: (1) the mode and sufficiency of annexation, either real or constructive; (2) adaption of the article to the use or purpose of the realty; and (3) the intention of the party who annexed the chattel to the realty. Logan v. Mullis, 686 S.W.2d 605, 607 (Tex. 1985) (citing O'Neil v. Quilter, 111 Tex. 345, 348, 234 S.W. 528, 529 (1921)). Under this test, intention is the most important of the...