Tae Wan Kim, Hway Hurh, Haeyoung Hwang, and Dong Geun Chung v. Lee Soon Jeon and Hyun Sook Park--Appeal from 191st District Court of Dallas County

11th Court of Appeals

Eastland, Texas

Opinion

Tae Wan Kim, Hwan Hurh, Haeyoung Hwang, and Dong Geun Chung

Appellants

Vs. No. 11-00-00305-CV B Appeal from Dallas County

Lee Soon Jeon and Hyun Sook Park

Appellees

Memorandum Opinion

The original lawsuit was filed by Tae Wan Kim, Hwan Hurh, Haeyoung Hwang and Dong Geun Chung (creditors) against Sang Deok Jeon (husband) and Lee Soon Jeon (wife) for money that the creditors had loaned to the husband. Part of the money was used to purchase commercial real estate in Dallas County. The four creditors entered into a judgment by consent with the husband and then filed a nonsuit without prejudice as to the wife. Subsequently, the husband and wife were divorced, and the divorce decree gave the wife title to the property which had been purchased by the husband with some of the money he borrowed from the creditors. The wife then conveyed the property to her sister, Hyun Sook Park.

After a lengthy nonjury trial, the court rendered judgment that the creditors had valid liens as to three tracts of property for part, but not all, of the money which they had loaned to the husband. The court also refused their request for an order of judicial foreclosure. The creditors appeal, arguing: (1) that they were entitled to liens for all of the money which they loaned and (2) that the court should have authorized judicial foreclosure of their liens. We affirm the judgment of the trial court.

Findings of Fact

The trial court made AFindings of Fact@ pursuant to TEX.R.CIV.P. 296, and these findings form the basis of the judgment about which the creditors complain. These findings include the following facts. The creditors obtained a money judgment for $270,000 against the husband before his divorce. That judgment established purchase money liens on three tracts of land ($30,000 on 2771 Royal Lane, $40,000 on 2802 Royal Lane, and $10,000 on 2809 Royal Lane), and the street addresses coupled with the other information given is sufficient to identify the properties. The money which the husband had borrowed from the creditors was a community debt. When the three tracts of land were awarded to the wife in the judgment of divorce, they were subject to the three purchase money debts of the community estate. The conveyances from the wife to the wife=s sister were not sham conveyances, and the properties are not subject to judgment liens for the creditors= $270,000 judgment against the husband. The deed of trust to National Express Corporation is valid, and the wife is the present owner/holder of the NEC lien note. Title to the properties has been transferred to a person who is not a party to the lawsuit, and judicial foreclosure should not be ordered at this time. The creditors are entitled to attorney=s fees in the sum of $25,000 against the wife.

Judgment of the Trial Court

The trial court entered judgment that 2771 Royal Lane was subject to a first lien for $30,000 owed to the creditors, that 2802 Royal Lane was subject to a first lien for $40,000 owed to the creditors, and that 2809 Royal Lane was subject to a first lien for $10,000 owed to the creditors.[1] The trial court=s judgment then provided that all three tracts of land were subject to the NEC lien which is owned by the wife. Finally, the judgment provided that the creditors were entitled to recover attorney=s fees of $25,000 from the wife.[2]

Issues for Appellate Review

Appellants present six issues for appellate review pursuant to TEX.R.APP.P. 38.1(e). First, they argue that the trial court improperly found that their judgment lien for $270,000 did not attach to the properties. Next, they argue that the trial court improperly found that the purchase money lien against 2771 Royal Lane was only $30,000 rather than $190,000. Then, they argue that the trial court improperly applied the NEC lien to the properties. In Issue Nos. 4 and 5, they argue that the trial court improperly failed to order foreclosure of the properties and improperly failed to sanction the wife and her sister for discovery abuse. In Issue No. 6, they argue that the trial court=s award of attorney=s fees was against the overwhelming weight of the evidence and that $90,000 should be awarded for their attorney=s fees.

Rules of Appellate Review

Appellants= challenge to the trial court=s findings on disputed facts will be reviewed under the tests stated in Ray v. Farmers= State Bank of Hart, 576 S.W.2d 607, 609 (Tex.1979):

In determining whether there was any evidence of probative force to sustain the trial judge=s finding [of each fact], the court of civil appeals was required to consider only that evidence favorable to the finding and the judgment rendered thereon and to disregard all evidence to the contrary. The judgment of a trial court will not be set aside if there is any evidence of a probative nature to support it, and a court of civil appeals cannot substitute its findings of fact for those of the trial court if there is any evidence in the record to sustain the trial court=s findings.

Of course, the findings can be set aside pursuant to In re King=s Estate, 244 S.W.2d 660, 661 (Tex.1951), if they are Aso against the great weight and preponderance of the evidence as to be manifestly unjust.@

Evidentiary Rulings

We find that the evidence in the record before us is both Alegally@ sufficient and Afactually@sufficient to support the trial court=s findings of fact on each of the disputed facts. Issue No. 1 is overruled because the judgment lien did not attach to the property which was awarded to the wife in the divorce and then conveyed to the wife=s sister. The evidence does not compel a finding of either collateral estoppel or sham conveyance. Issue No. 2 is overruled because the evidence supports the trial court=s finding that part of the $190,000 loaned by the creditors to the husband was used by him for purposes other than purchasing the commercial property. Jones v. First National Bank of Anson, supra; Latimer v. City National Bank of Colorado City, supra.

Issue No. 3 is overruled as moot because the NEC lien was inferior to the three liens found in favor of appellants. Issue No. 4 is overruled because appellants have not shown an abuse of discretion in refusing to order judicial foreclosure when the owner of the property is not before the court.

Discovery Abuse

Appellants also argue that the trial court Aimproperly failed to sanction@ the wife and her sister for discovery abuse. As this court recently noted in Cone v. Fagadau Energy Corporation, No. 11-00-00003-CV, slip op. at 11, 2001 WL 1663246, at * 14 (Tex.App. - Eastland, Dec. 20, 2001, no pet=n h.), the imposition of sanctions is Awithin the discretion of the trial court,@ and an appellate court will set aside such a decision Aonly on a showing of a clear abuse of discretion.@ Issue No. 5 is overruled. Among the cases cited by appellants on this issue for appellate review are Chrysler Corporation v. Blackmon, 841 S.W.2d 844 (Tex.1992), and Smithson v. Cessna Aircraft Company, 665 S.W.2d 439 (Tex.1984). Chrysler Corporation v. Blackmon, supra at 849, notes that Athe sanction imposed must not be excessive.@ Smithson v. Cessna Aircraft Company, supra at 442, notes:

[T]he imposition of an appropriate sanction for failure to supplement interrogatories...is within the broad discretion of the trial court. The standard for reviewing the trial court=s action is whether this discretion was clearly abused. An appellate court should not substitute its judgment for that of the trial court. Similarly, a trial court=s refusal to impose a particular sanction can be set aside only upon a showing of a clear abuse of discretion. (Citations omitted)

Attorney=s Fees

Appellants argue in their last issue for appellate review that the trial court=s award of attorney=s fees Awas against the overwhelming weight of the evidence.@ Appellants acknowledge in their argument that the trial court=s award of attorney=s fees was Ain proportion to the relief it granted@ since it did not acknowledge their judgment lien. Appellants have not shown that the amount awarded for their attorney=s fees is Amanifestly unjust.@ In re King= Estate, supra. Issue No. 6 is overruled.

This Court=s Judgment

The judgment of the trial court is affirmed.

BOB DICKENSON

SENIOR JUSTICE

February 21, 2002

Do not publish. See TEX.R.APP.P. 47.3(b).

Panel consists of: Wright, J., and

McCall, J., and Dickenson, S.J.[3]

[1]The trial court correctly ruled that the wife=s community interest in the real estate was subject to the community debt which was owed on each piece of property. See and compare Jones v. First National Bank of Anson, 846 S.W.2d 107 (Tex.App. - Eastland 1992, no writ); Latimer v. City National Bank of Colorado City, 715 S.W.2d 825 (Tex.App. - Eastland 1986, no writ).

[2]The judgment of the trial court also ordered that Andrew Kim and Ki Pong Na recover judgment against Myong-Chol Kim in the amount of $24,000 plus interest. None of them are parties to this appeal.

[3]Bob Dickenson, Retired Justice, Court of Appeals, 11th District of Texas at Eastland sitting by assignment.