Zarkasha Enter. v. Old Republic Title Ins. Co. of Conroe

• Decision Date: 26 August 2021
• Docket Number: 09-20-00057-CV
• Parties: ZARKASHA ENTERPRISE, INC., Appellant v. OLD REPUBLIC TITLE INSURANCE COMPANY OF CONROE AND OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY, Appellees
• Court: Texas Court of Appeals

ZARKASHA ENTERPRISE, INC., Appellant v. OLD REPUBLIC TITLE INSURANCE COMPANY OF CONROE AND OLD REPUBLIC NATIONAL TITLE INSURANCE COMPANY, Appellees

No. 09-20-00057-CV

Court of Appeals of Texas, Ninth District, Beaumont

August 26, 2021

Submitted on June 16, 2021

On Appeal from the 410th District Court Montgomery County, Texas Trial Cause No. 18-06-07745-CV

Before Golemon, C.J., Kreger and Johnson, JJ.

MEMORANDUM OPINION

LEANNE JOHNSON JUSTICE

Appellant Zarkasha Enterprise, Inc. ("Appellant" or "Zarkasha") appeals the trial court's order granting summary judgment for Appellees Old Republic Title Insurance Company of Conroe and Old Republic National Title Insurance Company (collectively "Appellees" or "Old Republic"). David H. and Judy S. Moore ("the Moores") were plaintiffs in the original lawsuit, Zarkasha was the defendant, and the Old Republic entities were third-party defendants.^[1] The dispute between Zarkasha and Old Republic relates to a title insurance policy issued by Old Republic on a 3.9-acre tract of land located in the W Berryman and the Britton Wilkes Surveys in Waller County Texas, which Zarkasha purchased in 2009. In 2018, the Moores filed a suit against Zarkasha to quiet title to real property they allege is located in the David C. Dickson Survey in Montgomery County, Texas, which the Moores purchased in 2017. The Moores alleged in their petition that Zarkasha had an adverse claim on or interest in their property that operated as a cloud on the Moores' title to their property. The Moores alleged "the nature of Defendant's alleged interest in the property is a Special Warranty Deed With Vendor's Lien that was filed in Waller County on or about August 12, 2009 Volume 1172, page 590" which specifically describes the 3.9-acre tract that Zarkasha acquired in 2009.

Zarkasha filed a third-party petition against Old Republic alleging that Old Republic issued a title insurance policy on the 3.9-acre tract and that Old Republic had a duty to defend Zarkasha from the claims being asserted by the Moores. Old Republic filed a motion for summary judgment against Zarkasha, which the trial court denied, and then Old Republic filed an amended motion for summary judgment, which the trial court granted. On appeal, Zarkasha raises two issues, arguing that fact issues exist that preclude summary judgment. We affirm.

Background

Original Petition

In June 2018, Plaintiffs David and Judy Moore filed an Original Petition against Zarkasha to quiet title to certain real property. The Moores alleged that they purchased an 18.162-acre tract in Montgomery County in 2017 and recorded the purchase in Montgomery County. The petition alleged that Zarkasha claimed an interest in the Moores' tract in Montgomery County, thereby clouding the Moores' title. The Moores contend they had no knowledge of Zarkasha's interest in the property before they purchased it. The Moores asserted that under section 13.003 of the Property Code Zarkasha's interest in the property was invalid and unenforceable against the Moores because Zarkasha's purported interest in the property was recorded in a county other than where the property is located and the Moores purchased the property without notice of Zarkasha's interest. The Moores sought a declaratory judgment that they are the sole and rightful owners of the property.

The petition recited the following legal description of the Moores' property:

Being a 18.162 acre tract of land situated in the David C Dickson Survey, Abstract Number 180 of Montgomery County, Texas, and being out of and part of a called 103.1 acres as described in deed recorded in Volume 343, Page 560 of the Deed Records of Montgomery County, Texas; said 18.162 acres being more particularly described as follows with all bearings based on the West line of a called 83.9242 acres as described in deed recorded in Clerk's File Number 8458948 of the Real Property Records of Montgomery County, Texas per the recorded deed;

BEGINNING at a 2 1/2 inch iron pipe, found for the Northwest corner of the herein described tract, common with the Northwest corner of the said 103.1 acres, same being in the West line of Montgomery County, Texas, the East line of Waller County, Texas and the South right-of-way line of 1488, and proceeding;

THENCE S 86°31'28"E, along the North line of the herein described tract, common with the North line of the 103.1 acres and the South right-of-way line of FM 1488, a distance of 300.33 feet, to a 11/4 inch iron pipe, found for the Northeast corner of the herein described tract, common with the upper Northwest corner of said 83.9242 acres;

THENCE S 00°38'35"W, along the East line of the herein described tract, common with the West line of the 83.9242 acres, severing the 103.1 acres, a distance of 2606.33 feet, to a 11/4 inch iron rod, found for the Southeast corner of the herein described tract, common with an interior corner of the 83.9242 acres;

THENCE N 88°57'03"W, along the South line of the herein described tract, common with a North line of the 83.9242 acres, a distance of 305.65 feet, to a 11/4 inch iron rod, found for the Southwest corner of the herein described tract, common with the lower Northwest corner of the 83.9242 acres, same being in the West line of the 103.1 acres, the West line of Montgomery County, Texas, and the East line of Waller County, Texas;

THENCE N 00°46'02"E, along the West line of the herein described tract, common with the West line of the 103.1 acres, the West line of Montgomery County, Texas and the East line of Waller County, Texas, a distance of 2619.01 feet, back to the POINT OF BEGINNING and containing 18.162 acres of land.

Zarkasha's Answer, Third-Party Claim, and Counterclaim

Zarkasha filed an Answer and asserted a general denial and specially excepted to the petition because it "fail[ed] to state with specificity the nature of the cloud of title Plaintiff claims Defendant has placed on the Property." Specifically, Zarkasha asserted that the petition failed to specify:

(a) the portion of Plaintiff's property on which Defendant has asserted a claim or encumbered;

(b) the manner in which Defendant has asserted a claim or interest on Defendant's property;

(c) when the [D]efendant asserted [its] claim or interest;

(d) whether Defendant's alleged claim or interest of Plaintiff's property resides in Montgomery County or Waller County.

Zarkasha also asserted several affirmative defenses: the Moores' claims are barred by their own acts or omissions that contributed to the unenforceability of the contract and their alleged injury; the Moores' claims are barred by Zarkasha's adverse possession; and the Moores are estopped from asserting claims against Zarkasha because of their own failure to adequately investigate open and obvious indicia of Zarkasha's claims to the property.

In an amended answer, Zarkasha also pleaded not guilty to the Moores' trespass to try title claim. Zarkasha alleged that the Moores' claims were barred by the three-year statute of limitations in section 16.024 or the five-year statute of limitations in section 16.025 of the Civil Practice and Remedies Code because Zarkasha had continuous uninterrupted possession of the property under color of title since July 31, 2009 and had paid all applicable taxes on the property. Zarkasha also filed a motion to transfer venue from Montgomery County to Waller County, arguing that "the property at issue" is located in Waller County. Attached to the motion was the legal description of the 3.9083-acre tract that Zarkasha contends it owns.

In October 2018, Zarkasha filed an Original Third-Party Petition against Old Republic Title Company of Conroe ("Old Republic-Conroe"). Therein, Zarkasha alleged it purchased the 3.9083-acre tract of land in Waller County in July 2009 and obtained a title insurance policy, and Old Republic-Conroe handled the closing and recorded the deed in Waller County. Prior to the purchase, Zarkasha obtained a survey of the property, which showed that the entirety of the 3.9083-acre tract was located in Waller County and that the tract included an electric easement located on the boundary of Waller and Montgomery County, and Zarkasha asserted that Zarkasha had reaffirmed the accuracy of the survey since being served with the Moores' lawsuit. According to Zarkasha, after the Moores filed their lawsuit, Zarkasha presented a title insurance claim to Old Republic-Conroe, and they "ignored the claim effectively denying same."

Zarkasha asserted a claim for breach of a contract for title insurance. Zarkasha alleged that it paid a premium for title insurance and presented Old Republic-Conroe with the Moores' claims for discrepancy and conflict in acreage and alleged misfiling of deeds in Waller County. According to Zarkasha, Old Republic-Conroe failed to acknowledge and defend Zarkasha on the claim asserted by the Moores, which it was required to do under the title insurance policy. Zarkasha also asserted a claim for declaratory judgment that it had complied with its duties and obligations, that the title policy was valid and enforceable, and that Zarkasha was entitled to full reimbursement of damages and attorney's fees related to the property. Zarkasha also sought indemnification against Old Republic-Conroe.

Zarkasha filed a counterclaim against the Moores for declaratory judgment, seeking a declaration that Zarkasha is the rightful owner of the 3.9083 acres, that it was in rightful, open, and continuous possession thereof since July 31, 2009, that the 3.9083 acres is located entirely in Waller County, that Zarkasha will retain full ownership rights in the property, and that it was entitled to attorney's fees.

Old Republic-Conroe's Answer

Old Republic-Conroe filed an answer asserting a general denial...