Trust Investment Group Mortgage Division, Inc. v. First Capital Interest, L.L.C., Trust Investment Group, S.A., and Angeles Gonzalez--Appeal from 295th District Court of Harris County

Opinion Issued January 12, 2006

In The

Court of Appeals

For The

First District of Texas

NO. 01-04-00762-CV

TRUST INVESTMENT GROUP MORTGAGE DIVISION, INC., Appellant

V.

ALIEF INDEPENDENT SCHOOL DISTRICT; FIRST CAPITAL INTEREST, L.L.C.; TRUST INVESTMENT GROUP, S.A.; ANGELES GONZALEZ, Appellees

On Appeal from the 295th District Court

Harris County, Texas

Trial Court Cause No. 2003-06046

MEMORANDUM OPINION

This is an appeal from a summary judgment rendered in favor of appellees, Alief Independent School District ( Alief ), First Capital Interest, L.L.C. ( First Capital ), Trust Investment Group, S.A. ( Trust S.A. ) and Angeles Gonzalez. Appellants, Trust Investment Group Mortgage Division, Inc. ( Trust Mortgage ), filed a trespass to try title action asserting ownership to a piece of property sold as the result of a previous tax foreclosure suit. // Trust S.A. filed a no-evidence motion for summary judgment, and Gonzalez filed a traditional motion for summary judgment. Each asserted that Trust Mortgage was collaterally estopped from relitigating the ownership of the property and that the statute of limitations bars Trust Mortgage from challenging the validity of the tax sale. The trial court granted both summary judgment motions. We affirm.

PREVIOUS TAX FORECLOSURE SUIT

On April 18, 1998, Sam Hoang Nguyen sold and conveyed by warranty deed to Trust Investment Group, Inc. property located on Rolke Road in Harris County, Texas ( Rolke Road property ). In February 2001, Alief and other taxing authorities brought suit to recover delinquent taxes levied against the Rolke Road property. Alief served process on Trust S.A., a foreign corporation. Trust S.A. defaulted, and the trial court entered a default judgment directing foreclosure of the property to pay the delinquent taxes. At the foreclosure sale, First Capital purchased the property for $35,000.00, and the deed was executed and filed of record on November 29, 2001. After the delinquent taxes were paid, the excess sale proceeds were placed in the registry of the court.

In May 2002, Trust S.A. exercised its redemption rights and redeemed the property from First Capital. Having exercised its right of redemption, Trust S.A. filed a motion in September 2002 to recover the excess sale proceeds from the foreclosure sale. Before the trial court ruled on this motion, Trust S.A. sold the Rolke Road property to appellee Angeles Gonzalez on November 10, 2002. On November 15, 2002, counsel for Trust Mortgage filed a notice of rehearing to determine the entitlement to the excess sale proceeds, and on June 25, 2003, the trial court determined the excess sale proceeds should be distributed to Trust S.A.

TRESPASS TO TRY TITLE SUIT

Before the trial court in the tax foreclosure suit ordered the proceeds to be paid to Trust S.A., Trust Mortgage filed this trespass to title action on February 5, 2003, in the same court with a different cause number. In 2004, after the trial court in the tax foreclosure suit ordered the proceeds to be paid to Trust S.A., Trust S.A. and Gonzalez filed their motions for summary judgment asserting that Trust Mortgage is estopped from relitigating the issue of ownership of the property and that Trust Mortgage is barred by the statute of limitations found within Section 33.54 of the Tax Code. In June 2004, the trial court signed an order granting each motion.

On appeal, Trust Mortgage claims ownership of the Rolke Road property. Trust Mortgage contends that Nguyen incorrectly inserted Trust Investment Group, Inc. as the grantee of the 1998 warranty deed instead of Trust Investment Group Mortgage Division, Inc. Trust Mortgage asserts that, because it is the true owner and was not served with process, the constable s deed from the tax foreclosure suit is void. // It also asserts that the statute of limitations does not apply in this case, and that the trial court erred in striking Trust Mortgage s summary judgment evidence. Trust Mortgage, however, does not address Trust S.A. s and Gonzalez s collateral estoppel argument.

SUMMARY JUDGMENT

A party moving for a traditional summary judgment has the burden of proving that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985); Farah v. Mafrige & Kormanik, P.C., 927 S.W.2d 663, 670 (Tex. App. Houston [1st Dist.] 1996, no writ). When deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant will be taken as true. Nixon, 690 S.W.2d. at 548-49. Every reasonable inference must be indulged in favor of the non-movant and any doubts resolved in its favor. Id. at 549.

In a no-evidence motion for summary judgment, the movant must specifically state the elements as to which there is no evidence. Tex. R. Civ. P. 166a(i). The burden then shifts to the non-movant to produce evidence that raises a fact issue on the challenged elements. See id. When reviewing the grant of a no-evidence summary judgment, we assume all evidence favorable to the non-movant is true and indulge every reasonable inference and resolve all doubts in favor of the non-movant. Flameout Design & Fabrication, Inc. v. Pennzoil Caspian Corp., 994 S.W.2d 830, 834 (Tex. App. Houston [1st Dist.] 1999, no pet.). A no-evidence summary judgment may not be properly granted if the non-movant brings forth more than a scintilla of evidence to raise a genuine issue of material fact. Tex. R. Civ. P. 166a(i). Less than a scintilla of evidence exists when the evidence is so weak as to do no more than create a mere surmise or suspicion of a fact. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (quoting Kindred v. Con/Chem. Inc., 650 S.W.2d 61, 63 (Tex. 1983)). More than a scintilla of evidence exists if it would allow reasonable and fair minded people to differ in their conclusions. Id.

A summary judgment that is granted generally, without specifying a reason, will be upheld if any ground alleged in the summary judgment motion can be sustained. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex. 1989); Mellon Serv. Co. v. Touche Ross & Co., 17 S.W.3d 432, 435 (Tex. App. Houston [1st Dist.] 2000, no pet.). Here, the trial court gave no specific basis for its rendition of either summary judgment motion.

COLLATERAL ESTOPPELA party asserting the bar of collateral estoppel must establish that (1) the facts sought to be litigated in the present action were fully and fairly litigated in a previous action, (2) those facts were essential to the judgment in the previous action, and (3) the parties were cast as adversaries in the previous action. Sysco Food Serv., Inc. v. Trapnell, 890 S.W.2d 796, 801 (Tex. 1994). Collateral estoppel, or issue preclusion, prevents a party from relitigating a particular fact issue that the party has already litigated and lost in an earlier suit. Quinney Elec., Inc. v. Kondos Entm t, Inc., 988 S.W.2d 212, 213 (Tex. 1999). The doctrine of collateral estoppel is designed to promote judicial efficiency, protect parties from multiple lawsuits, and prevent inconsistent judgments by precluding relitigation of the issues. Trapnell, 890 S.W.2d at 801.

Trust S.A. and Gonzalez contend Trust Mortgage is collaterally estopped from relitigating the ownership of the Rolke Road property. Trust S.A. and Gonzalez assert that, in the tax foreclosure suit, when the trial court determined whether Trust S.A. or Trust Mortgage had the right to the excess proceeds from the tax sale, the trial court necessarily determined the ownership of the property. Trust Mortgage, in its brief and reply brief, provides no argument or evidence to create a fact issue that Trust Mortgage is not collaterally estopped from relitigating the ownership of the Rolke Road property.

Before this Court can determine the first element, whether the ownership of the property was fully and fairly litigated during the excess sale proceeds hearing, we must address whether the ownership of the Rolke Road property was essential to the determination of the right to the excess sale proceeds, the second element of collateral estoppel. See id. Section 34.04(c) of the Tax Code states that, at the hearing to determine claims for excess proceeds from a tax sale, the court shall order that the proceeds be paid according to the following priorities to each party that establishes its claim to the proceeds . . . (5) to each former owner of the property, as the interest of each may appear. Tex. Tax Code Ann. 34.04(c) (Vernon Supp. 2005) (emphasis added). Before the trial court could determine that Trust S.A. was entitled to the excess sale proceeds, the trial court must have determined that Trust S.A. was an owner of the Rolke Road property. See id. We conclude that the ownership of the property was essential to the determination of the right to the excess sale proceeds.

We next address whether the ownership of the property was fully and fairly litigated during the tax foreclosure suit, the first element of collateral estoppel. See Trapnell, 890 S.W.2d at 801. An issue is actually litigated when it is properly raised, by the pleadings or otherwise, is submitted for determination, and is determined. Van Dyke v. Boswell, O Toole, Davis & Pickering, 697 S.W.2d 381, 384 (Tex. 1985) (citing Restatement (Second) of Judgments 27 cmt. h (1982)). Trust Mortgage provides no contradictory argument or evidence in its brief or reply brief that this issue was not fully and fairly litigated at the excess sale proceeds hearing. Trust S.A. and Gonzalez provide the only argument and evidence that this issue was fully and fairly litigated at the hearing. Thus, it is undisputed that the trial court had a hearing to determine the ownership of the excess sale proceeds, that counsel for Trust Mortgage argued that Trust Mortgage should receive the excess proceeds, and that the trial court determined later that the excess sale proceeds should be distributed to Trust S.A. We conclude the ownership of the Rolke Road property was fully and fairly litigated at the excess sale proceeds hearing.

Under the third element, we determine whether Trust S.A. and Trust Mortgage were cast as adversaries. See Trapnell, 890 S.W.2d at 801. Because Trust Mortgage and Trust S.A. each asserted full rights to the excess sale proceeds, positions adverse to each other, they were cast as adversaries. Thus, Trust Mortgage was collaterally estopped from relitigating the ownership of the Rolke Road property.

We conclude that there was no genuine issue created as to whether or not the ownership of the Rolke Road property was previously determined during the hearing regarding the ownership of the excess sale proceeds and that Trust Mortgage is collaterally estopped from relitigating the issue of ownership of the Rolke Road property.

CONCLUSION

Accordingly, we affirm the summary judgment granted in favor of appellees.

Sherry Radack

Chief Justice

Panel consists of Chief Justice Radack and Justices Alcala and Bland.