Opinion
No. 04-16-00235-CV
03-08-2017
Rosanna BARRERA, Jenesey Barrera, and Andrea Perez, Appellant v. CHERERCO, LLC, Appellee
MEMORANDUM OPINION
From the 25th Judicial District Court, Guadalupe County, Texas
Trial Court No. 14-1276-CV
Honorable W.C. Kirkendall, Judge Presiding Opinion by: Sandee Bryan Marion, Chief Justice Sitting: Sandee Bryan Marion, Chief Justice Marialyn Barnard, Justice Patricia O. Alvarez, Justice AFFIRMED
Rosanna Barrera, Jenesey Barrera, and Andrea Perez appeal the trial court's judgment in favor of Chererco, LLC, contending the trial court erred by: (1) concluding their claims relating to the title to certain real property were barred by limitations; (2) concluding they failed to raise a fact issue on their adverse possession claim; and (3) entering a final judgment in the absence of an interested party. We affirm the trial court's judgment.
BACKGROUND
On January 5, 2001, Diana and Jose Moreno executed a special warranty deed conveying a tract of land in Guadalupe County, Texas (the "Property") to Esequiel Kelly Barrera. At the time of the conveyance, Barrera was married to Mary Angela Barrera.
In May of 2009, the San Marcos Consolidated Independent School District ("SMCIDS") sued Esequiel to recover delinquent ad valorem taxes. Esequiel was personally served with citation in the lawsuit, however, Mary Angela, whose name did not appear on the special warranty deed, was not given notice. The County of Guadalupe intervened in the lawsuit alleging it also was owed delinquent taxes. On June 7, 2010, the trial court signed a judgment awarding a personal money judgment against Esequiel and authorizing an order of sale for the Property. On October 4, 2010, the trial court clerk issued the order of sale. In November of 2010, the sheriff sold the Property and executed a Sheriff's Tax Deed conveying the Property to SMCISD, which was recorded on November 19, 2010. On December 10, 2012, SMCISD executed a Tax Resale Deed conveying the Property to Chererco.
On June 16, 2014, two of Mary Angela's five adult children filed the underlying lawsuit against Chererco to set aside the sale. A third adult child was added as a plaintiff in an amended petition, and Chererco filed a third-party petition against a fourth adult child. The fifth adult child, Dustin Poole, was never brought into the suit as a plaintiff or third-party defendant.
Mary Angela passed away on January 30, 2012. Although an affidavit of heirship was filed in the county clerk's records listing five children as Mary Angela's children, no probate proceeding was filed.
Chererco filed a traditional and no evidence motion for summary judgment asserting numerous grounds. On October 19, 2015, the trial court signed an order granting the motion and specifically found the adult children's claims were barred by limitations. The order did not, however, dispose of Chererco's claim for attorney's fees. On March 11, 2016, the trial court signed a final judgment after Chererco withdrew its claim for attorney's fees, and this appeal ensued.
STANDARD OF REVIEW
We review a summary judgment de novo. Katy Venture, Ltd. v. Cremona Bistro Corp., 469 S.W.3d 160, 163 (Tex. 2015). To prevail on a traditional motion for summary judgment, the movant must show "there is no genuine issue as to any material fact and the [movant] is entitled to judgment as a matter of law." TEX. R. CIV. P. 166a(c). A trial court must grant a no-evidence motion for summary judgment unless the nonmovant produces some evidence raising a genuine issue of material fact on each element of the nonmovant's claims challenged in the motion. KCM Fin. LLC v. Bradshaw, 457 S.W.3d 70, 79 (Tex. 2015). We take as true all evidence favorable to the nonmovant, resolve all conflicts in the evidence in the non-movant's favor, and indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Katy Venture, Ltd., 469 S.W.3d at 163.
LIMITATIONS
In their first issue, appellants contend the trial court erred in granting summary judgment in favor of Chererco based on limitations.
Section 33.54 of the Texas Tax Code contains the limitations provision in question and states:
(a) Except as provided by Subsection (b), an action relating to the title to property may not be maintained against the purchaser of the property at a tax sale unless the action is commenced:
(1) before the first anniversary of the date that the deed executed to the purchaser at the tax sale is filed of record; or
(2) before the second anniversary of the date that the deed executed to the purchaser is filed of record, if on the date that the suit to collect the delinquent tax was filed the property was:
(A) the residence homestead of the owner; or
(B) land appraised or eligible to be appraised under Subchapter C or D, Chapter 23.TEX. TAX CODE ANN. § 33.54 (West 2015). Although acknowledging the limitations provision applies to tax sale challenges, appellants argue the limitations period is not applicable in this case because Mary Angela was not served in the lawsuit authorizing the tax sale. In support of this argument, the appellants primarily rely on this court's decision in Sec. State Bank & Trust v. Bexar Cty., 397 S.W.3d 715 (Tex. App.—San Antonio 2012, pet. denied). Sec. State Bank & Trust, however, involved a claim by a record lienholder, making it distinguishable from the instant case which is based on the claim of a purported owner. See id. at 724.
(b) If a person other than the purchaser at the tax sale or the person's successor in interest pays taxes on the property during the applicable limitations period and until the commencement of an action challenging the validity of the tax sale and that person was not served citation in the suit to foreclose the tax lien, that limitations period does not apply to that person.
(c) When actions are barred by this section, the purchaser at the tax sale or the purchaser's successor in interest has full title to the property, precluding all other claims.
Texas courts have drawn a distinction in the application of the section 33.54 limitations provision when the tax sale is challenged by a record lienholder as opposed to a purported owner. See Am. Homeowner Pres. Fund, LP v. Pirkle, 475 S.W.3d 507, 514-15 (Tex. App.—Fort Worth 2015, pet. denied) (noting distinction); Sec. State Bank & Trust , 397 S.W.3d at 724 (distinguishing cases that did not involve a record lienholder with a prior lien against the property). As the Fort Worth court explained:
The distinction between a purported owner and a record lienholder becomes significant in the context of tax-sale challenges because of the application of the tax code's tolling provision as to limitations. The tax code provides that the one-year limitation for challenging a tax sale can be tolled by a party who continues to pay taxes on the property up until the party's challenge is made. As upheld by our sister court, the requirement that a property owner challenge the tax sale within the one-year time limit or, in the alternative, continue to pay property taxes, which tolls limitations, is not unreasonable. W.L. Pickens Grandchildren's Joint Venture v.
DOH Oil Co., 281 S.W.3d 116, 121 (Tex. App.—El Paso 2008, pet. denied). After all, even if a property owner is unaware of the foreclosure, he or she should continue to pay property taxes. Id. This explains why—regardless of whether he or she is named and served with citation in a tax suit—the tax code does not work to deny an owner the opportunity to challenge the tax sale. See id.; see also John K. Harrison Holdings, LLC v. Strauss, 221 S.W.3d 785, 789 (Tex. App.—Beaumont 2007, pet. denied) ("It is reasonable to expect one claiming an ownership in property to pay the taxes on the property to avoid the limitations bar.").Am. Homeowner Pres. Fund, LP, 475 S.W.3d at 514-15.
This rationale does not necessarily hold true for lienholders, however. A lienholder, who is not ordinarily liable for payment of taxes on the property, would not be in the same position as an owner who, perhaps unwittingly, tolls the limitations period simply by carrying on in the normal course through the payment of property taxes as they become due. In recognition of this distinction, the court in Security State Bank rejected the notion that the bank in that case, which was a lienholder "at the time the delinquent tax suit was filed" rather than a property owner, was precluded from collaterally attacking the tax sale, independent of the tax code provisions. 397 S.W.3d at 721-25. Under the facts of Security State Bank and the cases Security State Bank cites in support of its holding, the lienholder received no notice of the lawsuit and had no opportunity to toll limitations through payment of property taxes. Id.
In this case, the appellants challenge the tax sale based on the failure to serve Mary Angela, who they contend is a purported owner, with citation in the tax suit. In order to toll the running of the limitations period, however, Mary Angela or her heirs as her successors in interest were required to pay property taxes within the applicable limitations period. See TEX. TAX CODE ANN. § 33.54(b). Because Mary Angela and her heirs failed to pay any such property taxes, limitations was not tolled, and appellants' claims to the Property are barred. See Am. Homeowner Pres. Fund, L.P., 475 S.W.3d at 514-15; W.L. Pickens Grandchildren's Joint Venture, 281 S.W.3d at 121; John K. Harrison Holdings, LLC, 221 S.W.3d at 789. Therefore, the trial court did not err in granting summary judgment in favor of Chererco based on limitations.
These claims include the appellants' claim to title or to a right of redemption.
ADVERSE POSSESSION CLAIM
The appellants contend the limitations provision in section 33.54 does not apply to their adverse possession claim because they are claiming they adversely possessed the Property after the tax sale under the three-year adverse possession statute. In order to prove adverse possession under the three-year statute, however, the appellants were required to show they held the Property "under title or color of title." TEX. CIV. PRAC. & REM. CODE ANN. § 16.024 (West 2002). The appellants did not present any evidence raising a material issue of fact as to this element of their claim because they could not claim title or color of title after the Sheriff's Tax Deed was recorded and the one-year or two-year limitations period expired. See TEX. TAX CODE ANN. § 33.54(c) ("When actions are barred by this section, the purchaser at the tax sale or the purchaser's successor in interest has full title to the property, precluding all other claims.").
NON-JOINDER OF FIFTH ADULT CHILD
In their final issue, appellants contend the trial court erred in granting summary judgment because Mary Angela's fifth adult child, Dustin Poole, was not joined as a party to the lawsuit. The appellants cite section 37.006(a) of the Declaratory Judgments Act which provides: "When declaratory relief is sought, all persons who have or claim an interest that would be affected by the declaration must be made parties." TEX. CIV. PRAC. & REM. CODE ANN. § 37.006(a) (West 2015). Because Dustin Poole had an interest in the Property as one of Mary Angela's purported heirs, the appellants contend he had to be joined as a party before the trial court could enter a final judgment.
The failure to join a person whose interests could be affected by the trial court's judgment or declaration does not deprive a trial court of jurisdiction. Brooks v. Northglen Ass'n, 141 S.W.3d 158, 162 (Tex. 2004); Kellner v. Kellner, 419 S.W.3d 541, 545 (Tex. App.—San Antonio 2013, pet. denied). Instead, it raises the question of whether the trial court should have refused to enter a judgment or declaration in that person's absence. Brooks, 141 S.W.3d at 162; Kellner, 419 S.W.3d at 545. In determining whether to proceed in the absence of such a person, the trial court should consider: (1) whether complete relief can be granted in the person's absence; and (2) whether the judgment or declaration would either: (a) impair or impede the absent person's ability to protect his interest; or (b) leave any party subject to a substantial risk of incurring inconsistent obligations. Brooks, 141 S.W.3d at 162-63; TEX. R. CIV. P. 39(a).
In this case, nothing precluded the trial court from granting complete relief among the parties to the lawsuit, and the trial court's judgment represents a final and complete adjudication of their rights. See Brooks, 141 S.W.3d at 162. In addition, section 37.006(a) of the Act expressly states, "[a] declaration does not prejudice the rights of a person not a party to the proceeding." TEX. CIV. PRAC. & REM. CODE ANN. § 37.006(a); see also Brooks, 141 S.W.3d at 163 (noting section 37.006(a) dispenses with any concern that the declaration would impair or impede the absent person's interest). Finally, Chererco elected not to join Dustin Poole as a third-party defendant, indicating its lack of concern with the possibility of inconsistent obligations. Therefore, the trial court did not err in proceeding to judgment in Dustin Poole's absence.
CONCLUSION
The trial court's judgment is affirmed.
Sandee Bryan Marion, Chief Justice