Aaron A. Joiner v. Pactiv Corporation--Appeal from 357th District Court of Cameron County

NUMBER 13-04-580-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

AARON A. JOINER, Appellant,

v.

PACTIV CORPORATION, Appellee.

On appeal from the 357th District Court

of Cameron County, Texas.

  MEMORANDUM OPINION[1]

Before Justices Rodriguez, Castillo, and Garza

Memorandum Opinion by Justice Castillo

Appellant Aaron A. Joiner appeals from a summary judgment in favor of appellee Pactiv Corporation. By two issues, Joiner argues that the summary judgment was improper.[2] We affirm.

 I. BACKGROUND[3]

In a prior lawsuit, Pactiv sued DRC Distributors and obtained a money judgment for nonpayment of an account. At or near the same time, DRC was delinquent on payments owed to Pactiv on an asset purchase agreement secured by certain real property. Pactiv sued Joiner and DRC Distributors to foreclose on the judgment lien obtained against DRC and identified certain real property DRC owned.[4] Pactiv sought to foreclose the judgment lien on real property owned by DRC.[5] To its live pleading, Pactiv attached a copy of the judgment against DRC, dated September 12, 2002. On October 25, 2002, Pactiv filed an abstract of judgment, also attached to the live pleading. On November 1, 2002, the abstract of judgment was duly recorded in the Cameron County Clerk real property records. On December 9, 2002, DRC executed a general warranty deed conveying the subject real property to Joiner. On December 20, 2002, DRC's deed to Joiner was duly recorded in the Cameron County real property records. On January 28, 2003, Joiner released a deed of trust dated May 22, 2000, from DRC involving the real property Pactiv sought to foreclose in satisfaction of its judgment lien.

Pactiv filed a traditional motion for summary judgment, asserting as grounds that (1) Pactiv had a superior lien to the rights of subsequent purchasers or lienholders of the subject property, (2) DRC could not defeat Pactiv's statutory lien by a conveyance to Joiner, and (3) Joiner's defense based on section 51.006 of the Texas Property Code failed as a matter of law. Pactiv attached the affidavit of its employee, Wayne Schobel, authenticating its judgment lien, the abstract of judgment, DRC's general warranty deed to Joiner, and Joiner's release of lien in which Joiner "acknowledges payment in full of the Note and releases the Property from the lien and from all liens" Joiner held as against the subject real property "without regard to how they are created or evidenced."

Joiner filed a summary-judgment response, asserting that he was the holder of the superior lien to the subject property. In his summary-judgment affidavit, Joiner attested: (1) DRC's promissory note to Joiner, executed at the time of the asset purchase agreement on May 22, 2000, was secured by a deed of trust on the real property Pactiv sought to foreclose in satisfaction of its judgment lien; (2) in September 2002, DRC defaulted in payments due on the promissory note; (3) on December 9, 2002, DRC executed a deed in lieu of foreclosure transferring the subject real property to Joiner; (4) DRC failed to disclose the judgment lien on the property which was in place before DRC executed the deed to Joiner in satisfaction of the promissory note; (5) Joiner had no personal knowledge of the undisclosed lien; and (6) Joiner had commenced foreclosure proceedings against DRC.[6]

Without stating the grounds, the trial court granted Pactiv's summary-judgment motion and ordered foreclosure of Pactiv's judgment lien on two of the three tracts of land. This appeal ensued.

II. SUMMARY-JUDGMENT ANALYSIS

A. Summary-Judgment Standards of Review

On appeal, the standard of review for the grant of a motion for summary judgment is determined by whether the motion was brought on no-evidence or traditional grounds. Tex. R. Civ. P. 166a(i),(c); Ortega v. City Nat'l Bank, 97 S.W.3d 765, 771 (Tex. App.BCorpus Christi 2003, no pet.) (op. on reh'g). The difference in relative burdens between the parties in the two types of summary-judgment motions is significant. Tex. R. Civ. P. 166a(i),(c); Ortega, 97 S.W.3d at 771. Determination of the nature of the motion for summary judgment under analysis is critical. Ortega, 97 S.W.3d at 771. Here, Pactiv brought a traditional motion for summary judgment. See Tex. R. Civ. P. 166a(c).

The function of summary judgment is to eliminate patently unmeritorious claims and defenses, not to deprive litigants of the right to a jury trial. Alaniz v. Hoyt, 105 S.W.3d 330, 344 (Tex. App.BCorpus Christi 2003, no pet.). In both traditional and no-evidence summary-judgment motions, we review the evidence "in the light most favorable to the nonmovant, disregarding all contrary evidence and inferences." See KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999); Branton v. Wood, 100 S.W.3d 645, 646 (Tex. App.BCorpus Christi 2003, no pet.). The movant bears the burden of showing both no genuine issue of material fact and entitlement to judgment as a matter of law. Hoyt, 105 S.W.3d at 345.

When a summary-judgment order does not specify the grounds on which it is based, we affirm the trial court's ruling if any of the theories advanced in the motion are meritorious. State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 380 (Tex. 1993). The non movant has the burden to respond to a traditional summary judgment motion if 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. Hoyt, 105 S.W.3d at 345. When, as here, the only issue presented to the trial court was a question of law, we render the judgment the trial court should have rendered if we reverse. Tex. R. App. P. 43.2(c); Jones v. Strauss, 745 S.W.2d 898, 900 (Tex. 1988). Our review is de novo. Ortega, 97 S.W.3d at 771. We turn to the discussion of the arguments in place.

B. Discussion

Because Joiner's two issues on appeal address his statutory defense, we construe them together. Joiner conceded below and on appeal that he released his interest to the subject property under the prior deed of trust. He argues in his first and second issues that proper interpretation and application of section 51.006 of the property code demonstrates Joiner has a superior lien to the subject property. Tex. Prop. Code Ann. _ 51.006(a) (Vernon Supp. 2004-05). Pactiv counters that, independent of section 51.006, summary judgment was proper because (1) Joiner voluntarily executed and released the deed of trust subsequent to Pactiv's perfection of its lien, and (2) any right Joiner had to foreclose on the subject property terminated upon the release of the lien. Pactiv further argues that Joiner's section 51.006 defense fails because Joiner did not establish lack of knowledge of an undisclosed lien, and, although section 51.006 allows a deed in lieu of foreclosure to be voided in limited circumstances, the section does not provide for an independent right of foreclosure or the revival of a released deed of trust lien.

 1. Joiner's Statutory Defense under Property Code Section 51.006

Section 51.006 applies to a holder of a debt under a deed of trust who accepts from the debtor a deed conveying real property subject to the deed of trust in satisfaction of the debt. Tex. Prop. Code Ann. _ 51.006(a). The holder of a debt may void a deed conveying real property in satisfaction of the debt before the fourth anniversary of the date the deed is executed and foreclosed under the original deed of trust if (1) the debtor fails to disclose to the holder of the debt a lien or other encumbrance on the property before executing the deed conveying the property to the holder of the debt in satisfaction of the debt, and (2) the holder of the debt has no personal knowledge of the undisclosed lien or encumbrance on the property. Id. _ 51.006(b)(1), (2). If the holder elects to void a deed in lieu of foreclosure, the priority of its deed of trust shall not be affected or impaired by the execution of the deed in lieu of foreclosure. Id. _ 51.006(d). If a holder accepts a deed in lieu of foreclosure, the holder may foreclose its deed of trust as provided in said deed of trust without electing to void the deed. Id. _ 51.006(e). The priority of such deed of trust shall not be affected or impaired by the deed in lieu of foreclosure. Id.

2. Disposition

Viewed in the light most favorable to Joiner, the non-movant, his summary-judgment evidence demonstrates that he denied the requisite "personal knowledge" of Pactiv's judgment lien at the time he executed the release. However, an instrument that is properly recorded in the proper county is: (1) notice to all persons of the existence of the instrument; and (2) subject to inspection by the public. Tex. Prop. Code Ann. _ 13.002(1), (2) (Vernon 2004). The parties do not dispute that Pactiv's judgment lien was properly recorded in the proper county. Thus, Joiner had notice of the judgment lien on the subject property.[7] See id.

As grounds in its summary-judgment motion, Pactiv asserted that its perfected judgment lien was superior to any subsequent lien, including any lien Joiner claimed. As an additional ground, Pactiv asserted that Joiner's section 51.006 defense failed as a matter of law because Joiner could not prove he had no personal knowledge of the judgment lien, an essential element of his statutory defense. A trial court's duty at the summary judgment stage is to determine if a material question of fact exists. Huckabee v. Time Warner Entm't Co., 19 S.W.3d 413, 422 (Tex. 2000). Implicit in the trial court's grant of summary judgment is its rejection of Joiner's section 51.006 defense based on lack of personal knowledge and, thus, its rejection of Joiner's contention that his lien was superior to Pactiv's judgment lien. We conclude that Pactiv's summary-judgment evidence negated an essential element of Joiner's statutory defense. See Tex. R. Civ. P. 166a(c); Pech v. Estate of Tavarez, 112 S.W.3d 282, 285 (Tex. App.BCorpus Christi 2003, no pet). Thus, the trial court could have properly granted summary judgment on the theory that Joiner did not prove either absence of "personal knowledge" or a lien superior to Pactiv's lien. Because Pactiv's summary-judgment evidence demonstrated it possessed a superior judgment lien, summary judgment as granted is proper. We affirm the trial court's ruling if any of the theories advanced in the motion are meritorious. State Farm Fire & Cas. Co., 858 S.W.2d at 380. Accordingly, we overrule Joiner's first and second issues.

III. CONCLUSION

Having overruled Joiner's first and second issues, we affirm summary judgment in favor of Pactiv.

ERRLINDA CASTILLO

Justice

Memorandum Opinion delivered and filed

this the 11th day of August, 2005.

[1] See Tex. R. App. P. 47.2, 47.4.

[2] Joiner's issues are:

1. The trial court's interpretation of section 51.006 of the property code that Joiner released his interest under the prior deed of trust and therefore could not "revive" that interest was erroneous.

2. The trial court's interpretation of section 51.006(b)(2) of the property code that the threshold requirements of "disclosure" and "personal knowledge" are synonymous with "record notice" was erroneous.

[3] In a civil case, this Court will accept as true the facts stated by the appellant unless another party contradicts them. See Tex. R. App. P. 38.1(f).

[4] The final judgment incorporates an interlocutory default judgment against DRC. DRC is not a party to this appeal.

[5] Pactiv included the legal descriptions of three tracts of land in Cameron County.

[6] The trial court granted Pactiv injunctive relief and stopped the foreclosure sale.

[7] If the statutory language is unambiguous, we must interpret it according to its terms, giving meaning to the language consistent with other provisions in the statute. See McIntyre v. Ramirez, 109 S.W.3d 741, 745 (Tex. 2003); Kroger Co. v. Keng, 23 S.W.3d 347, 349 (Tex. 2000); see also Tex. Gov't Code Ann. __ 311.021, 311.023, & 312.005 (Vernon 2005). We also consider the objective the law seeks to obtain and the consequences of a particular construction. Tex. Gov't Code Ann. ' 311.023(1), (5) (Vernon 2005); see McIntyre, 109 S.W.3d at 745. If the statutory text is unambiguous, a court must adopt the interpretation supported by the statute's plain language unless that interpretation would lead to absurd results. Tex. Dep't of Protective & Regulatory Servs. v. Mega Child Care, Inc., 145 S.W.3d 170, 177 (Tex. 2004). We presume that the Legislature would not do a useless act. Webb County Appraisal Dist. v. New Laredo Hotel, 792 S.W.2d 952, 954 (Tex. 1990).