Opinion
No. 13-03-659-CV
Memorandum Opinion Delivered and Filed October 27, 2005.
On Appeal from the 107th District Court of Cameron County, Texas.
Before Justices RODRIGUEZ, CASTILLO and GARZA.
MEMORANDUM OPINION
This is a trespass to try title case. Appellant TM Sales Environmental Systems, Inc. ("TM") brings this appeal from the trial court's grant of a traditional motion for summary judgment in favor of appellee LSS Investments ("LSS"). By two issues, TM contends the court erred in granting the summary judgment in favor of LSS, and in holding LSS's claims to be derivative of TM's claims against UMLIC VP, LLC ("UMLIC"). We affirm the judgment of the trial court.
In the underlying suit, TM sued LSS for trespass to try title. LSS brought in UMLIC as a third party defendant. UMLIC brought in Pablo Gonzales ("Gonzales") as a third party defendant. UMLIC filed a summary judgment motion against TM as to TM's claims against LSS. LSS joined in that motion. Gonzales did not join. The trial court's summary judgment order disposed of all claims and parties. The trial court found that UMLIC's motion had merit, and judgment was therefore granted in favor of LSS. The trial court's order further dismissed all remaining claims, finding that LSS's claims against UMLIC were derivative of TM's claims against LSS, and that UMLIC's claims against Gonzales were derivative of LSS's claims against UMLIC. See part I.C of this opinion. Three appellees are identified in this appeal. The principal brief was written by UMLIC, and LSS adopted that brief in its entirety. Gonzales's brief agrees with the judgment of the trial court in all aspects, including its findings that claims against Gonzales were properly dismissed. TM raised no issues in this appeal contesting the trial court's rulings as to claims against Gonzales.
I. BACKGROUND
The case on appeal involves a dispute to title of real property located in Cameron County, Texas. TM originally owned this property ("the property"). On July 19, 1989, TM executed a note with the Small Business Administration ("SBA") for a loan in amount of $150,000, which was secured by a deed of trust on the property. On September 19, 1999, the SBA sold the note to UMLIC, which then became holder of the deed of trust. The property has been the subject of three lawsuits, including the underlying case. In order to provide a comprehensive understanding of this case, we review the procedural history of each lawsuit.
A. The Previous Tax Lawsuit
On June 15, 1998, the San Benito Consolidated Independent School District ("SBISD") sued TM for delinquent ad valorem taxes for the years 1995, 1996, and 1997 in the 404th District Court of Cameron County, Texas. On June 30,1998, TM paid the outstanding taxes. On March 8, 1999, the tax suit was dismissed by the district court for want of prosecution. TM again failed to timely pay taxes for the year 1998, and SBISD filed a motion to reinstate the case on October 29, 1999, 235 days after the order dismissing the case for want of prosecution. On that same day, the district court reinstated the case. On December 17, 1999, the district court rendered judgment in favor of the SBISD, foreclosing on the property to satisfy the delinquent taxes. On February 1, 2000, the sheriff sold the property at a tax sale to the highest bidder, Pablo Gonzales. Gonzales's bid of $10,000 exceeded the outstanding taxes by more than $6,000; the excess remained in the registry of the court. On February 11, 2000, the tax deed was filed of record.
Although TM and UMLIC cannot agree on the length of the statutory limitation period for filing a motion to reinstate, UMLIC admitted in footnote 2 of its appellate brief that the motion to reinstate the case was untimely even under the most liberal construction of Texas rule of civil procedure 165a, in that "[a]t most, assuming the facts most favorable to the SBISD, it would have had to have filed the motion within 120 days after the order dismissing the case for want of prosecution." See TEX. R. CIV. P. 165a.
On June 6, 2000, by special warranty deed, Gonzales conveyed the property to UMLIC, the holder of the deed of trust on the property. On June 30, 2000, TM filed a motion for release of excess funds from the court registry. On July 24, 2000, UMLIC advised TM that it was the owner of the property at issue and gave notice to vacate. On August 1, 2000, the district court granted TM's motion and tendered the excess funds. On October 20, 2000, TM forwarded UMLIC a cashier's check in the amount of $12,500 to redeem the property in question. On October 23, 2000, UMLIC returned that check, and on November 3, 2000, a justice of the peace evicted TM. On March 2, 2003, TM filed a motion to set aside judgment in the SBISD tax suit. On July 28, 2003, the tax court denied the motion, and TM did not appeal that order.
TM and UMLIC never agreed to the nature of this transaction. While TM claimed that UMLIC redeemed the property from Pablo Gonzales, UMLIC did not directly address this question but instead suggested that it was the successor in interest of the purchaser at a tax sale. However, we have taken judicial notice of a letter addressed to Gonzales dated May 1, 2000, where UMLIC invoked section 34.21 of Texas Tax Code and asserted its right as an owner of real property sold at a tax sale to redeem that property. TEX. TAX CODE ANN. § 34.21 (Vernon Supp 2004-05). UMLIC interpreted the term "owner" in the statute as "all such persons who have any right, title, or interest in the land." See Jackson v. Maddox, 117 S.W. 185, 185 (Tex. 1909). We also note that UMLIC paid Gonzales $12,500, representing the $10,000 paid by Gonzales at the tax sale and the 25% premium prescribed by the law. See TEX. TAX CODE ANN. § 34.21 (Vernon Supp. 2004-05).
Three days later, on July 27, 2000, TM informed UMLIC of its intent to withdraw the excess funds in the registry of the court and to seek redemption of the property. On July 31, 2000, TM once again expressed to UMLIC its intent to redeem the property and reinstate its mortgage agreement with UMLIC.
TM continues to assert that the tax judgment was void. In its appellate brief, however, it admitted that such a conclusion is not essential to this appeal.
B. The Wrongful Foreclosure Lawsuit
On June 11, 2001, UMLIC filed suit against TM on the note secured by the property in County Court at Law No. 2, Cameron County, Texas. UMLIC claimed that TM owed it a balance of approximately $60,000. TM filed a counterclaim alleging that UMLIC had committed wrongful foreclosure, negligence, and fraud. On March 6, 2002, during the pendency of this case, UMLIC sold the property in question to LSS Investments, Inc. by general warranty deed.
On October 15, 2002, TM obtained a judgment against UMLIC. The judgment includes actual damages caused by UMLIC's wrongful foreclosure in the amount of $79,600, the then-fair-market-value of the property. UMLIC appealed from this judgment on October 9, 2003.
In the jury trial below, the jury answered "no" to the question whether TM breached the terms of the note and answered "yes" to the questions (1) whether UMLIC breached the terms of the note, (2) UMLIC wrongfully foreclosed on the property, (3) UMLIC was negligent for the injuries of TM, and (4) UMLIC committed a fraud.
See UMLIC VP LLC v. TM Sales Environmental Systems, Inc., No. 13-02-00634-CV, 2005 Tex. App. LEXIS 7623 (Tex.App.-Corpus Christi, Sept. 15, 2005).
C. Trespass to Try Title Suit
On December 2, 2002, TM filed the underlying trespass to try title suit against LSS in the 107th Judicial District Court of Cameron County, Texas. On April 1, 2003, LSS filed a third-party petition against UMLIC, alleging breach of warranty of title and seeking to recoup from UMLIC any damages TM might recover from LSS. On June 10, 2003, UMLIC filed a third-party petition against Gonzales, likewise seeking to recoup from him any damages LSS might recover from UMLIC.
On July 23, 2003, UMLIC, as a third-party defendant, filed a traditional motion for summary judgment on TM's claim against LSS. The motion was based on three grounds: (1) estoppel; (2) election of remedies; and (3) limitations. The motion also asked for summary judgment on LSS's claims against UMLIC on the ground that LSS's claims were derivative of TM's claims against LSS. On August 27, 2003, LSS filed a response to UMLIC's motion for summary judgment, in which LSS joined UMLIC's motion to the extent it sought judgment on TM's claims against it. On September 17, 2003, TM filed its response to the motion, to which UMLIC replied on September 23, 2003. The trial court held a hearing on September 25, 2003. At the conclusion of the hearing, the court signed a final judgment dismissing TM's claims against LSS, LSS's claims against UMLIC, and UMLIC's claims against Gonzales. On October 6, 2003, TM appealed the judgment to this Court, and it is from this judgment that the present appeal is taken.
II. ISSUES ON APPEAL
On appeal, TM contends that the trial court erred in granting summary judgment, which is based on the following grounds: (1) TM is collaterally estopped from suing UMLIC, (2) TM has elected its remedy and hence is barred from bringing this suit to recover title, or TM is statutorily barred under section 33.54 of the Texas Tax Code. See TEX. Tax CODE ANN. § 33.54 (Vernon 2001). TM also asserts that the trial court erred as a matter of law in holding that LSS's claims were derivative of TM's claims against UMLIC.
III. STANDARD OF REVIEW
We review de novo a trial court's grant or denial of a traditional motion for summary judgment. TEX. R. Civ. P. 166a(c); Ortega v. City Nat'l Bank, 97 S.W.3d 765, 771 (Tex.App.-Corpus Christi 2003, no pet. h.) (op. on reh'g). The movant bears the burden of showing both no genuine issue of material fact and entitlement to judgment as a matter of law. TEX. R. Civ. P. 166a(c); Ortega, 97 S.W.3d at 771. In deciding whether there is a genuine issue of material fact, we take evidence favorable to the non-movant as true. Ortega, 97 S.W.3d at 771. We make all reasonable inferences and resolve all doubts in favor of the non-movant. Id. Summary judgment for a defendant is proper if the defendant disproves at least one element of each of the plaintiff's claims or affirmatively establishes each element of an affirmative defense to each claim. Id. The non-movant has no burden to respond to a traditional motion for summary judgment unless the movant conclusively (1) establishes each element of its cause of action or defense, or (2) negates at least one element of the non-movant's cause of action or defense. Id. Where a summary judgment is granted without specifying grounds on which the motion is granted, it will be upheld if any ground in the motion for summary judgment can be sustained. Ford v. City State Bank of Palacios, 44 S.W.3d 121, 127 (Tex.App.-Corpus Christi 2001, no pet.)
IV. ANALYSIS
In its first issue, TM contends that the trial court erred in granting the motion for summary judgment. UMLIC presented three grounds in its motion. The trial court's order does not reflect which of those formed the basis for its judgment. We therefore examine each ground asserted in UMLIC's motion for summary judgment. See id.
A. Collateral Estoppel and Quasi-Estoppel
The first ground UMLIC presented to the trial court in its motion for summary judgment is that TM is estopped from denying the validity of the tax deed. On appeal, TM contends this ground is based on "collateral estoppel," which is an affirmative defense. Sysco Food Servs., Inc. v. Trapnell, 890 S.W.2d 796, 801 (Tex. 1994). While UMLIC agrees that collateral estoppel is an affirmative defense, it counters that it instead relied upon "quasi-estoppel."
1. UMLIC's Collateral Estoppel Ground
Collateral estoppel bears another name-issue preclusion. It is often compared with res judicata, which is claim preclusion. State County. Mut. Fire Ins. Co. v. Miller, 52 S.W.3d. 693, 696 (Tex. 2001). Both reflect the need to bring litigation to an end, prevent vexatious litigation, maintain the stability of court decisions, promote judicial economy, and prevent double recovery. See Barr v. Resolution Trust Corp., 837 S.W.2d 627, 631 (Tex. 1992). Specifically, collateral estoppel bars the litigation of specific issues already decided in an earlier case, but not an entire cause of action or defense. Id. at 628. Thus, collateral estoppel focuses on what was actually litigated and essential to the judgment. See Van Dyke v. Boswell et al., 697 S.W.2d 381, 384 (Tex. 1985).
Where a movant pleads collateral estoppel as an affirmative defense, the movant has the burden to affirmatively or conclusively establish every element of this defense. Ortega, 97 S.W.3d at 772. A party seeking to invoke the doctrine must establish that (1) the facts sought to be litigated in the second action were fully and fairly litigated in the first action, (2) those facts were essential to the judgment in the first action, and (3) the parties who litigated the issue in the first action were cast as adversaries. John G. Marie Stella Kenedy Mem'l Found. v. Dewhurst, 90 S.W.3d 268, 288 (Tex. 2002).
Because UMLIC presents nothing to establish any element of collateral estoppel, we conclude that if the trial court's order of summary judgment was based on a ground asserting collateral estoppel, this ground will not support the summary judgment.
2. Quasi-Estoppel
We note UMLIC denies it alleged collateral estoppel. Instead, it reiterates that its motion for summary judgment was based on quasi-estoppel. Quasi-estoppel precludes a party from asserting, to another's disadvantage, a right inconsistent with a position previously taken by him. Atkinson Gas Co. v. Albrecht, 878 S.W.2d 236, 240 (Tex.App.-Corpus Christi 1994, writ denied). The doctrine applies when it would be unconscionable to allow a person to maintain a position inconsistent with one in which he previously acquiesced, or from which he accepted a benefit. See id. at 242-43. UMLIC relies on Marshall v. Lockheed, 245 S.W.2d 307 (Tex.Civ.App.-Waco 1952, writ ref'd n.r.e.), for the equitable principle that "one who accepts and retains the fruits of a judgment is estopped thereafter to assert its invalidity." Id. at 308. UMLIC argues that, just like the owner of the property subject to a tax sale, TM received and kept the excess funds from the tax sale and thus is estopped from challenging the title.
The facts before us are distinguishable from Marshall, 245 S.W.2d at 307. In Marshall, the owner accepted the benefits from the tax sale and then filed suit to have the tax deed declared void and to recover possession of the property. Id. at 307. However, in the instant case, TM claims that it was not disputing the prior tax sale at the trial, and further that the tax judgment is not essential to this appeal.
The summary judgment evidence reflects that TM intended to spend the excess funds (more than $6,000) to redeem the property from UMLIC for the total amount of $125,000. We are not persuaded by UMLIC's argument that TM's request for the release of the excess funds for the expressed intended purpose of redeeming the property amounted to an inconsistent position with regard to TM's later trespass to try title claim against LSS. See Atkinson, 878 S.W.2d at 240.
The nature of UMLIC's purchase of the property from Gonzales is determinative. UMLIC contends that a tax deed vests "good and perfect title" in the purchaser or his assigns. TEX. TAX Code ANN. § 34.01(n) (Vernon Supp. 2004-05). UMLIC asserts that the special warranty deed transferred good and perfect title to the property to UMLIC as an "assignee" of Gonzales. UMLIC argues that it therefore obtained all the ownership interest Gonzales had in the property, and its title was subject only to TM's exercise of its right of redemption. This right of redemption had to be exercised within 180 days after the day the tax deed was filed for record. See TEX. TAX CODE ANN. § 34.21(e) (Vernon Supp. 2004-05). UMLIC asserts that TM's tender of the redemption price on October 20, 2000, came too late for a valid redemption because more than eight months had passed since the tax deed was filed of record.
TM argues that UMLIC redeemed the property from Gonzales for TM, thereby placing the parties in their positions previous to the tax sale. The evidence shows that UMLIC purchased the property from Gonzales within the period of 180 days as prescribed by the tax code. In correspondence from UMLIC to Gonzales, UMLIC clearly asserted and relied upon its mortgagee-mortgagor relationship with TM to establish its entitlement to redeem the property.
We must construe the statutory definition of "owner of real property" under section 34.21 of the tax code, which provides an owner of real property sold at a tax sale with the right to redeem that property. See Tex. TAX CODE Ann. § 34.21(e) (Vernon Supp. 2004-05). In its correspondence to Gonzales, UMLIC relied on Jackson v. Maddox, 117 S.W. 185, 185 (Tex. 1909), to justify its status as the owner of the property for the purpose of redemption. The Maddox court supported the proposition that courts should "consider any person who has any interest in lands sold for taxes as the owner thereof for the purposes of redemption." Id. Maddox may be distinguished from the case before us because the statute governing redemption then in effect allowed for redemption by "the owner or anyone having an interest" in the land. In the current tax code section 34.21, the phrase of "owner of real property" is not followed by any phrase similar to "any person who has an interest herein." See TEX. Tax CODE ANN. § 34.21(e) (Vernon Supp. 2004-05). However, the statute does not specifically provide that persons with an interest in the property cannot be considered as the owner of the property. See id.
Noting the Texas Supreme Court's trend toward a liberal construction of an "owner" entitled to redeem the property, the Yarborough court held that the term "owner" in section 34.21 of the tax code includes "any person who has an ownership interest in the property." See Rogers v. Yarborough, 923 S.W.2d 667, 669-70 (Tex.App.-Tyler 1996, no writ). As a mortgagee with an interest in the property, UMLIC also claimed its right to redemption. We agree with the reasoning set forth in this court's opinion in UMLIC VP LLC v. TM Sales Environmental Systems, Inc., No. 13-02-00634-CV, 2005 Tex. App. LEXIS 7623 (Tex.App.-Corpus Christi, Sept. 15, 2005). Consistent with the liberal construction of "owner of the property" by Texas courts, we conclude that the nature of UMLIC's purchase of the property from Gonzales constituted a redemption conducted by UMLIC, in its role as the mortgagee. See Rogers, 923 S.W.2d. at 669-70.
In Reynolds v. Batchelor, 216 S.W.2d 663, 667 (Tex.Civ.App.-Fort Worth 1948, writ ref'd n.r.e.), our sister court stated as a general principle that an owner who does not pay taxes should not be allowed to strengthen his title at a tax sale. Similarly, an owner who redeems his property sold at a tax sale should not thereby strengthen his title against other owners or lienholders. See id. A recent case further reiterates that redemption merely relieves the property of the tax sale, and does not give new title. Assocs. Home Equity Servs. Co. v. Hunt, 151 S.W.3d 559, 562 (Tex.App.-Beaumont 2004, no pet. h.). When the owner of the property or any person with an interest therein redeems the property, he restores the title to whom it belonged before the tax sale, except the tax lien has been discharged. See id. Thus, UMLIC's redemption did not extinguish its mortgagee-mortgagor relationship with TM.
Where the mortgagee-mortgagor relationship is still in existence, the mortgagee may only obtain the superior title from the mortgagor (1) through proper foreclosure, or (2) by a deed granted by the mortgagor in consideration of the cancellation or release of the mortgage. See Littleton v. Littleton, 341 S.W.2d 484, 489 (Tex.Civ.App.-Houston 1960, writ ref'd n.r.e.). The evidence shows that UMLIC redeemed the property from the tax sale purchaser Gonzales for the benefit of the owner of the property. Then UMLIC declared itself to be the successor in interest of the tax sale purchaser and claimed superior title to the property. However, the owner of the property or any person with an interest that "undertakes to purchase the tax title will be estopped to claim that he did anything other than redeem the property from the tax sale." See Batchelor, 216 S.W.2d at 667. Therefore, once UMLIC undertook to redeem the property subject to a tax sale, it was estopped from claiming that it purchased the property from Gonzales as a successor in interest or assignee. Hence, after UMLIC redeemed the property, TM was no longer subject to the 180-day redemption period prescribed by section 34.21(e) of the tax code. See Tex. TAX CODE Ann. § 34.21(e) (Vernon Supp. 2004-05).
We conclude that UMLIC failed to establish as a matter of law that TM's trespass to try title claims are barred by the doctrine of either collateral estoppel or quasi-estoppel. Accordingly, the summary judgment cannot be sustained on the ground of estoppel.
B. TM Is Statutorily Barred
TM also contends that summary judgment cannot be maintained based on UMLIC's third ground, a statutory bar. Since this ground is closely related to our foregoing discussion of the estoppel ground, we address it next.
Under section 33.54 of the tax code, beginning from the date that the tax deed is filed of record, the previous owner of the property subject to a tax sale has only one year in which to file an action relating to the title to the property against the purchaser of the property at a tax sale. See Tex. TAX CODE Ann. § 33.54 (Vernon 2002). Once the statutory bar is in effect, the purchaser at the tax sale or the purchaser's successor in interest gains full title to the property, precluding all other claims. See id. UMLIC relies on a San Antonio Court of Appeals case, in which the court held that section 33.54 barred an untimely trespass to try title suit by the former owner against the assignee of the purchaser at a tax sale. Cedillo v. Gaitan, 981 S.W.2d 388, 392 (Tex.App.-San Antonio 1998, no pet.). However, Cedillo is distinguishable from the instant case because UMLIC redeemed the property from the purchaser as an owner entitled to redeem under section 34.21 of the tax code. TEX. TAX Code ANN. § 34.21(e) (Vernon Supp 2004-05). As discussed above, because UMLIC redeemed the property from Gonzales, the purchaser at the tax sale, UMLIC is not by definition the assignee of the purchaser. UMLIC's conveyance of the property to LSS by general warranty does not result in LSS being an assignee of the purchaser because UMLIC itself was not the purchaser or assignee of the purchaser at the tax sale. Therefore, TM is not statutorily barred from suing LSS for trespass to try title. We conclude that this theory will not support the summary judgment.
C. Election of Remedies
TM also contends that summary judgment cannot be sustained on UMLIC's final ground, election of remedies. Election of remedies involves the act of choosing between two or more inconsistent but coexistent modes of procedure and relief allowed by law on the same state of facts. Van Sickle v. Locke, 220 S.W.2d 919 (Tex.Civ.App.-Dallas 1949, writ ref'd n.r.e.).
UMLIC argues that because TM filed suit against UMLIC for wrongful foreclosure and obtained a judgment for money damages, it elected its remedy and is barred from bringing this trespass to try title claim against LSS. UMLIC relies upon Durkey v. Madco Oil Co., Inc., 862 S.W.2d. 14 (Tex.App.-Corpus Christi 1993, writ denied) (op. on reh'g), which provides that a party complaining about the wrongful foreclosure of property is entitled to seek either the property or its value, but not both. In Durkey, the jury answered affirmatively to the question of wrongful foreclosure, but granted appellant Durkey zero value damages. Id. at 21. On appeal, the appellant sought only damages, and abandoned its earlier request for return of the properties. Id. UMLIC also relies upon the following: Owens v. Grimes, 539 S.W.2d 387, 390 (Tex.Civ.App.-Tyler 1976, writ ref'd n.r.e.) (holding that "once a party elects to let a sale stand and recover at law for damages, he is forever barred from attacking the trustee's deed."); Charter Nat'l Bank-Houston v. Stevens, 781 S.W.2d 368, 374 (Tex.App.-Houston [14th Dist.] 1989, writ denied) (noting that when the mortgagor elects damages as his remedy he confirms the act of sale and he has no further interest in the property); Diversified, Inc. v. Gibraltar Sav. Ass'n, 762 S.W.2d 620, 623 (Tex.App.-Houston [14th Dist.] 1988, writ denied) (holding that a mortgagor who rescinded a foreclosure sale no longer had a cause of action for damages for wrongful foreclosure and vice versa); Houston Sash Door Co. v. Davidson, 509 S.W.2d 690, 692 (Tex.Civ.App.-Beaumont 1974, writ ref'd n.r.e.) (holding that "plaintiff, having two inconsistent remedies, only one of which could be granted, made his election; and, having made the election, he is bound thereby."); Klien v. Garth, 677 S.W.2d 712, 717 (Tex.Civ.App.-Tyler 1984, writ ref'd n.r.e.) (stating that the trial court lacked the "power to award" a money judgment, conditioned on the ability of the plaintiff to obtain clear title to the property).
Among other arguments, TM asserts that because the appeal in the prior wrongful foreclosure lawsuit was still pending, that judgment was not final and therefore could not amount to an election of remedies. Street v. Hon. Second Court of Appeals, 756 S.W.2d 299, 301 (Tex. 1988). However, in the landmark case, Scurlock Oil Co. v. Smithwick, 724 S.W.2d 1, 17 (Tex. 1986), the Texas Supreme Court adopted the rule of the Restatement (Second) of Judgments section 13, holding that a judgment is final for the purposes of issue and claim preclusion despite the pendency of an appeal unless the appeal actually consists of a trial de novo. Id. We therefore reject any argument that a pending appeal in the prior wrongful foreclosure judgment against UMLIC was sufficient in itself to preclude that judgment from being either "final" or an election of remedies.
Under traditional summary judgment review UMLIC, as movant, bears the burden of showing both no genuine issue of material fact and entitlement to judgment as a matter of law. TEX. R. Civ. P. 166a(c); Ortega, 97 W.S.3d at 771. As an affirmative defense, the election of remedies doctrine may constitute a bar to relief when (1) one successfully exercises an informed choice, (2) between two or more remedies, rights, or state of facts, (3) which are so inconsistent but coexistent as to, (4) constitute manifest injustice. Vanasek v. Underkofler, 50 S.W.3d 1, 10 (Tex.App.-Dallas 1999, aff'd in part, rev'd in part on other grounds, Underkofler v. Vanasek, 53 S.W.3d 343, 346 (Tex. 2001)); see also Locke, 220 S.W.2d at 921. In order to establish the election of remedies ground, UMLIC must establish all four elements.
With respect to the first element of "informed choice," UMLIC seems to agree with TM's argument that Cameron County Court at Law No. 2 may not have jurisdiction in trespass to try title cases. UMLIC responds that TM still made an informed choice, even assuming the county court's limited jurisdiction, because TM brought the wrongful foreclosure claim against UMLIC as a counterclaim in a county court when it should have already known its available choice of pursuing a trespass to try title action in a district court.
TM asserts that jurisdiction in trespass to try title actions lies exclusively in the district courts. See TEX. Const. art. V, § 8; TEX. GOV'T Code Ann. § 24.007 (Vernon 2005). It also contends that the Cameron County Court at Law does not have jurisdiction over a dispute to quiet title to real property. See Tex. GOV'T CODE Ann. § 25.0332 (Vernon 2005). As a result, TM argues that it could not make an "informed choice" because the county court at law could not adjudicate the trespass to try title case.
The crucial factor here is the sequence of events. UMLIC purchased the note on the property in fall 1999. The school district foreclosed on the property for failure to pay taxes in December 1999. The tax sale occurred in February 2000, and title transferred to Gonzales on February 11, 2000. On June 6, 2000, UMLIC, holder of the note, purchased the property back from Gonzales. On June 11, 2001, after having successfully evicted TM, UMLIC filed suit against TM on the note secured by the property. TM then filed its counterclaims for wrongful foreclosure and for money damages against UMLIC. The lawsuit proceeded with TM seeking only money damages and never raising a claim for title. UMLIC did not sell the property to LSS until March 2, 2002. On October 15, 2002, TM received its judgment in the wrongful foreclosure suit, by which it was awarded the fair market value of the property. Then, in December 2002 TM filed the underlying suit against LSS, seeking to recover title to the property.
We conclude that TM made an "informed choice" between two or more inconsistent but coexistent remedies when it elected to sue UMLIC for money damages, and not title to the property. Van Sickle v. Locke, 220 S.W.2d 919 at 921. More than nine months passed between the time suit was filed and the time UMLIC sold the property, during which TM could have raised claims for title against UMLIC. It did not do so. Whether or not TM knew when UMLIC sold the property to LSS is irrelevant to the fact that TM had the option to but never raised a claim for title during the time UMLIC did hold title. TM does not become entitled to raise the claim simply because title transfers to a third party, particularly where, as here, TM has already recovered the fair market value of the property in issue. See Durkey, 862 S.W.2d. at 21.
Because the summary judgment can be sustained on this ground, we overrule TM's issue on appeal challenging the granting of summary judgment in favor of LSS.
D. LSS's Claims Were Derivative of TM's Claims against UMLIC
TM asserts in its second issue that the trial court erred in holding that LSS's claims for trespass to try title were derivative of TM's claims against UMLIC for wrongful foreclosure. TM further argues that LSS was not in privity with UMLIC for purposes of establishing the defense of res judicata to TM's claim against LSS. As a result, this lack of privity precludes LSS from asserting a defense that belongs to UMLIC. To support this argument, TM further examines all three elements of res judicata to prove that UMLIC fails to establish all of them.
However, UMLIC did not raise res judicata nor derivativeness as a ground in its motion for summary judgment. LSS simply urged that the success of any claims against it were contingent upon the court's rulings on UMLIC's motion for summary judgment. TM addressed neither in its response to the motion for summary judgment. In City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678 (Tex. 1979), the Texas Supreme Court held that "the non-movant, however, may not raise any other issues as grounds for reversal. . . . [T]he non-movant may not urge on appeal as reason for reversal of the summary judgment any and every new ground that he can think of, nor can he resurrect grounds that he abandoned at the hearing." Therefore, relying on well-settled precedent, we overrule this issue on appeal.
The record contains no motion for new trial or comparable motion.
V. Conclusion
Having overruled both issues on appeal, we affirm the judgment of the trial court.