Yarbrough v. Household Fin. Corp. III

• Decision Date: 13 January 2015
• Docket Number: NO. 14–13–00932–CV,14–13–00932–CV
• Citation: 455 S.W.3d 277
• Parties: Ruby Yarbrough and Wilburn E. Yarbrough, Appellants v. Household Finance Corporation III, Appellee
• Court: Texas Court of Appeals

455 S.W.3d 277

Ruby Yarbrough and Wilburn E. Yarbrough, Appellants

v.Household Finance Corporation III, Appellee

NO. 14–13–00932–CV

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

Opinion filed January 13, 2015

Donald George Legrand Jr., Texas City, TX, for Appellants.

Pascal Arteaga, Houston, TX, for Appellee.

Panel consists of Justices Boyce, Jamison, and McCally.

OPINION

Sharon McCally, Justice

In an issue of first impression, we must decide whether an affirmative defense of forgery, supported by an affidavit alleging that the defendants' signatures on a deed of trust were forged, raises a genuine issue of title intertwined with the issue of possession sufficient to deprive a justice court of jurisdiction in a forcible detainer action. We hold that it does. The courts below lacked jurisdiction in this forcible detainer action because determining the right to possession necessarily required the resolution of a title dispute. We reverse the trial court's judgment and remand with instructions to dismiss the action for lack of jurisdiction.

I. Background

Household Finance Corporation III filed a complaint for forcible detainer and original petition in justice court to evict Ruby and Wilburn Yarbrough from their home. The justice court record contains a deed of trust purportedly signed by the Yarbroughs, as borrowers, to secure a loan from Ameriquest Mortgage Company. The deed of trust allows the trustee to foreclose on the real property that is the subject of this lawsuit, and if so, the borrowers are required to surrender possession. According to the deed of trust, “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.”

Household Finance purchased the property at a non-judicial foreclosure sale and obtained a substitute trustee's deed conveying the property to Household Finance. Household Finance initiated this forcible detainer action to obtain possession of the property from the Yarbroughs. The justice court signed a judgment awarding possession to Household Finance, and the Yarbroughs appealed to the county court.

The Yarbroughs filed a plea to the jurisdiction and an amended plea alleging that the foreclosure sale was void because the deed of trust was forged and void. The Yarbroughs filed an affidavit from Ruby, in which she testified, “The deed of trust on which the purported foreclosure sale was based and that led to this eviction lawsuit, was not signed by my husband or me, and was a forgery.” She testified further, “I understand that people associated with Ameriquest Mortgage forged signatures on many loans, and the Deed of Trust on which the foreclosure sale was based leading to this eviction would be one of them.” Finally, she reiterated that the deed of trust “was not signed by me or my husband.” The Yarbroughs also filed with their amended plea a copy of their petition in a Texas district court, where the Yarbroughs alleged that the deed of trust was forged. The Yarbroughs sought damages for wrongful eviction, slander of title, and other causes of action, and they sought a judgment for title to the property.

The county court denied the pleas, and the Yarbroughs amended their answer to assert an affirmative defense of forgery. Ultimately, the county court signed a final summary judgment awarding Household Finance possession of the property. The court granted the Yarbroughs' request to set a supersedeas bond, and this appeal followed.

II. Jurisdiction

In their first issue, the Yarbroughs contend the justice and county courts lacked jurisdiction in this forcible detainer action because there was a genuine issue regarding title intertwined with the issue of possession. The title issue concerns whether a tenancy was created by the deed of trust and associated foreclosure sale when the deed of trust was allegedly void due to forgery. Household Finance contends the deed of trust creates a tenancy at sufferance, which generally supports jurisdiction in a forcible detainer action, but Household Finance does not address the merits of the Yarbroughs' forgery argument.¹

A. Standard of Review

Whether a trial court has subject matter jurisdiction is a question of law we review de novo. Salaymeh v. Plaza Centro, LLC, 264 S.W.3d 431, 435 (Tex.App.–Houston [14th Dist.] 2008, no pet.) (citing Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex.2004) ). The issue is fundamental and may be raised for the first time on appeal. Id. If a plea to the jurisdiction challenges the existence of jurisdictional facts, we consider relevant evidence submitted by the parties when necessary to resolve the jurisdictional issues raised, as the trial court is required to do. Miranda, 133 S.W.3d at 227. “[D]ue to the special jurisdictional limitations imposed on justice courts, a plea to the jurisdiction in an eviction case may be based on an affirmative defense raised in the defendant's pleadings that the trial court cannot resolve apart from determining title.” Gibson v. Dynegy Midstream Servs., L.P., 138 S.W.3d 518, 522, 524 (Tex.App.–Fort Worth 2004, no pet.) (defendant raised issue of adverse possession in defensive pleading, and thus, issue of title was so integrally linked that the justice court could not have decided possession without first deciding title).

B. Jurisdiction in Forcible Detainer Actions

An action for forcible detainer is a “summary, speedy, and inexpensive remedy for the determination of who is entitled to the possession of premises.” Scott v. Hewitt, 127 Tex. 31, 90 S.W.2d 816 (1936) ; see also Marshall v. Hous. Auth. of City of San Antonio, 198 S.W.3d 782, 787 (Tex.2006). The only issue to be resolved in a forcible detainer action is the right to immediate possession of the property; the merits of title are not adjudicated. Salaymeh, 264 S.W.3d at 435. Justice courts do not have jurisdiction to determine or adjudicate title to land, and neither does a county court exercising appellate jurisdiction in a forcible detainer action. Id.

When there are issues concerning both title and possession, the issues may be litigated in separate proceedings in different courts with appropriate jurisdiction. Id. at 436. However, when a forcible detainer action presents a genuine issue of title so intertwined with the issue of possession that a trial court would be required to determine title before awarding possession, then a justice court lacks jurisdiction to resolve the matter. See Pinnacle Premier Props., Inc. v. Breton, 447 S.W.3d 558, 564 (Tex.App.–Houston [14th Dist.] 2014, no pet. h.) (op. on reh'g); Bittinger v. Wells Fargo, N.A., No. 14–10–00698–CV, 2011 WL 4793828, at *2 (Tex.App.–Houston [14th Dist.] Oct. 11, 2011, no pet.) (mem.op.); see also Mitchell v. Armstrong Capital Corp., 911 S.W.2d 169, 171 (Tex.App.–Houston [1st Dist.] 1995, writ denied). “Accordingly, a justice court is not deprived of jurisdiction merely by the existence of a title dispute; it is deprived of jurisdiction only if resolution of a title dispute is a prerequisite to determination of the right to immediate possession.” Salaymeh, 264 S.W.3d at 435.

C. Landlord–Tenant Relationships and Deeds of Trust

A forcible detainer action requires proof of a landlord-tenant relationship. Haith v. Drake, 596 S.W.2d 194, 196 (Tex.App.–Houston [1st Dist.] 1980, writ ref'd n.r.e.) ; Dent v. Pines, 394 S.W.2d 266, 268 (Tex.Civ.App.–Houston 1965, no writ). Although such a relationship is not a prerequisite to jurisdiction, see Academy Corp. v. Sunwest N.O.P., Inc., 853 S.W.2d 833, 834 (Tex.App.–Houston [14th Dist.] 1993, writ denied), the lack of such a relationship indicates that the case may present a title issue. See, e.g., Pinnacle Premier Props., 447 S.W.3d at 564 n. 9.

Like the Ameriquest deed of trust here, a deed of trust may include a tenancy-at-sufferance clause that creates a landlord-tenant relationship when the property is foreclosed. See id. at 564–65.² Under these circumstances, a defendant's complaints about defects in the foreclosure process generally do not require a justice court to resolve a title dispute before determining the right to immediate possession, and the justice court has jurisdiction. See, e.g., id. at 564 ; Glapion v. AH4R I TX, LLC, No. 14–13–00705–CV, 2014 WL 2158161, at *2 (Tex.App.–Houston [14th Dist.] May 22, 2014, no pet.) (mem.op.); Maxwell v. U.S. Bank Nat'l Ass'n, No. 14–12–00209–CV, 2013 WL 3580621, at *2–3 (Tex.App.–Houston [14th Dist.] July 11, 2013, pet. dism'd w.o.j.) (mem.op.).

D. Forgery and the Necessity of Resolving Title

Household Finance relies on the familiar principle that a deed of trust's tenancy-at-sufferance clause allows a justice court to resolve the issue of possession independent of title issues. However, in every deed-of-trust case this court has reviewed, including those cited by Household Finance, the defendants did not challenge the validity of the original deed of trust establishing the tenancy-at-sufferance relationship. The defendants challenged defects related to the foreclosure sale and conditions precedent contained within the deed of trust, but the evidence was undisputed regarding (1) the existence of a deed of trust containing a tenancy-at-sufferance clause, and (2) the occurrence of a foreclosure sale, which triggered the tenancy-at-sufferance clause. See, e.g., Pinnacle Premier Props., 447 S.W.3d at 564 (no intertwined title issue when the defendants' title dispute was based entirely on contentions that the foreclosure sale was conducted improperly and that the lender had assigned the note to another bank); Gardocki v. Fed. Nat'l Mortg. Ass'n, No. 14–12–00921–CV, 2013 WL 6568765, at *4 (Tex.App.–Houston [14th Dist.] Dec. 12, 2013, no pet.) (mem.op.) (no intertwined title issue when the defendant alleged that conditions precedent to the foreclosure were not satisfied, such as the plaintiff's failure to provide notice of the foreclosure and a demand to vacate, or the holder's failure...