Don Whatley v. Noe Ochoa, Maria Ochoa and Lee Brookshire, Jr., Trustee for Fort Worth Mortgage--Appeal from 170th District Court of McLennan County

IN THE

TENTH COURT OF APPEALS

No. 10-00-384-CV

DON WHATLEY,

Appellant

v.

NOE OCHOA, MARIA OCHOA

AND LEE BROOKSHIRE, JR., TRUSTEE

FOR FORT WORTH MORTGAGE,

Appellees

From the 170th District Court

McLennan County, Texas

Trial Court # 2000-2489-4

O P I N I O N

Don Whatley filed a trespass to try title suit against Noe Ochoa, Jr., and his wife Maria, Lee Brookshire, the trustee on a deed of trust the Ochoas executed to finance their purchase of the property at issue, and two corporations which had previously owned the property. The Ochoas and Brookshire filed a motion for partial summary judgment asserting that a prior warranty deed in the Ochoas chain of title transferring the property from one corporate defendant to the other contains an adequate legal description to satisfy the statute of frauds. After the court granted this motion, they filed a motion for summary judgment asserting their entitlement to judgment as a matter of law because the aforementioned transaction between the corporate defendants is at best avoidable under the Uniform Fraudulent Transfer Act ( UFTA ). The trial court granted this motion and signed an order severing the summary judgment rendered in favor of the Ochoas and Brookshire from the remainder of Whatley s claims.

Whatley presents two issues in which he claims that the court erred in granting the motions because: (1) the legal description in the deed between the corporate defendants does not satisfy the statute of frauds; and (2) a genuine issue of material fact exists regarding whether the conveyance between the corporate defendants was made with intent to defraud him.

BackgroundDon Whatley claims title to the property at issue as a result of a July 1995 judgment he took against Ron McCartney Homes, Inc. (hereinafter, Ron McCartney Homes ). He perfected his judgment lien by filing an abstract of the judgment in the Deed Records of McLennan County on October 27. He purchased all the estate, right, title and interest which . . . Ron McCartney Homes, Inc. had on the 2[nd] day of December A.D. 1996 [sic] or at any time afterwards, of, in and to [the subject property] at an execution sale in January 1996.

Ron McCartney Homes purportedly conveyed the subject property to Distinctive Homes, Inc. (hereinafter, Distinctive Homes ) by warranty deed dated September 22, 1995. However, Ron McCartney Homes did not acquire title to the property until September 26. Ron McCartney Homes executed a second warranty deed on September 29, 1995, again conveying the property to Distinctive Homes. The September 29 deed varies from the September 22 deed by its recital that the conveyance was subject to a deed of trust to Citizens State Bank. Ron McCartney is the majority shareholder of both Ron McCartney Homes and Distinctive Homes.

Distinctive Homes conveyed the property to the Ochoas by warranty deed dated March 15, 1996. The Ochoas financed their purchase with a loan from Fort Worth Mortgage, which secured the debt with a deed of trust executed in favor of Brookshire as trustee. The Ochoas have lived at the residence since the time of purchase.

Property Description

Whatley contends in his first issue that the court erred by granting the partial summary judgment because the September 1995 deeds from Ron McCartney Homes to Distinctive Homes are void because the legal descriptions in them do not satisfy the statute of frauds.

The rule by which to test the sufficiency of the description is so well settled . . . as almost to compel repetition by rote: To be sufficient, the writing must furnish within itself, or by reference to some other existing writing, the means or data by which the land to be conveyed may be identified with reasonable certainty. Morrow v. Shotwell, 477 S.W.2d 538, 539 (Tex. 1972) (citing Norris v. Hunt, 51 Tex. 609 (1879); Wilson v. Fisher, 144 Tex. 53, 188 S.W.2d 150 (1945)). If a conveyance does not describe the land to be conveyed sufficiently, it is void under the statute of frauds. Pick v. Bartel, 659 S.W.2d 636, 637 (Tex. 1983).

If enough appears in the description so that a party familiar with the locality can identify the premises with . . . reasonable certainty, it will be sufficient. Gates v. Asher, 154 Tex. 538, 280 S.W.2d 247, 248-49 (1955). A reasonable certainty is all that the law requires. Conviction beyond all peradventure of doubt is unnecessary. Id. at 249. Under this nucleus of description theory of construction, [w]ords of description are given a liberal construction in order that the conveyance may be upheld. Gates, 280 S.W.2d at 248; Littlejohn v. Kariel, 568 S.W.2d 452, 454 (Tex. Civ. App. Waco 1978, no writ).

The legal description in both warranty deeds between Ron McCartney Homes and Distinctive Homes is as follows:

Lot nine (9), Block B being a .346 acre, more or less, being out of the Dr. O. H. Browning and Ron McCartney 99.51 acre tract described in a deed from Ruby Klaus Hucker and Willie Mae Klaus, dated January 3, 1984 and recorded in Vol. 1464, Pg. 797 of the Deed Records of McLennan County, Texas, being out of the A.P. Survey of said County and also known as 105 Sherwood Oaks, Waco, McLennan County, Texas and being more particularly described in the attached Ex. H .

Exhibit H attached to both deeds provides an incomplete metes and bounds description of the property.

The above-quoted legal description includes the lot and block number, local street address, and city and county of the subject property. A legal description which gives the street address, as well as the lot and block number within an identified city and county, is legally sufficient to describe property. Pockrus v. Connelly, 521 S.W.2d 115, 116-17 (Tex. Civ. App. Beaumont 1975, writ ref d n.r.e.); Loring v. Peacock, 236 S.W.2d 876, 877 (Tex. Civ. App. Fort Worth 1951, no writ); see also Elliott v. Henck, 223 S.W.2d 292, 295-96 (Tex. Civ. App. Galveston 1949, writ ref d n.r.e.). This case is distinguishable from those where the street address is the only description provided. In those circumstances, the description is sufficient only when it is shown by extrinsic evidence that the owner owns only one tract of land that can meet the description. Pickitt v. Bishop, 223 S.W.2d 222, 223 (Tex. 1949); Wolfe v. Brown, 340 S.W.2d 851, 854 (Tex. Civ. App. Waco 1960, no writ); Butler v. Benefield, 589 S.W.2d 778, 780 (Tex. Civ. App. Dallas 1979, writ ref d n.r.e.).

In the present case, the entire description is legally sufficient because the writing furnishes within itself the means and data by which the land to be conveyed may be identified with reasonable certainty. We therefore conclude that Whatley s first issue is without merit.

Fraudulent Conveyance

Whatley argues in his second issue that the court erred by granting the Ochoas and Brookshire s summary judgment motion because a genuine issue of material fact remains regarding whether the conveyance between Ron McCartney Homes and Distinctive Homes is a fraudulent conveyance.

In Texas Sand Co. v. Shield, the Supreme Court reiterated then-existing law that a conveyance made in fraud of creditors is wholly null and void as to such creditors under the provisions of Articles 3996 and 3997, Vernon s Annotated Civil Statutes. 381 S.W.2d 48, 54 (Tex. 1964) (footnotes omitted). Whatley contends that the Legislature s adoption of the UFTA in 1987 does not alter this holding. However, the legislative history of the pertinent statutes belies Whatley s contention. In re Harman, 243 B.R. 671, 674 (Bankr. N.D. Tex. 1999).

The former article 3996 provided in pertinent part that a conveyance executed with the intention of defrauding a creditor was void. Act approved Feb. 12, 1927, 40th Leg., R.S., ch. 30, 1, 1927 Tex. Gen. Laws 42, 42, repealed by Act of May 25, 1967, 60th Leg., R.S., ch. 785, 4(a), 1967 Tex. Gen. Laws 2343, 2619. // Such a conveyance continued to be void under section 24.02 of the Business and Commerce Code enacted in 1967. // Act of May 25, 1967, 60th Leg., R.S., ch. 785, 1, secs. 24.02, 1967 Tex. Gen. Laws 2343, 2598 (amended 1987) (current version at Tex. Bus. & Com. Code. Ann. 24.001-.012 (Vernon 2002)).

In 1987 however, the Legislature enacted the UFTA. Act of June 1, 1987, 70th Leg., R.S., ch. 1004, 1, 1987 Tex. Gen. Laws 3388 (amended 1993) (current version at Tex. Bus. & Com. Code. Ann. 24.001-.012). In doing so, the Legislature deleted the provisions of chapter 24 enacted twenty years earlier. Act of June 1, 1987, 70th Leg., R.S., ch. 1004, 1, 1987 Tex. Gen. Laws 3388, 3393-94.

The current statute provides in pertinent part that a creditor, subject to the limitations in Section 24.009 of this code, may obtain . . . avoidance of [a fraudulent] transfer or obligation to the extent necessary to satisfy the creditor s claim. Tex. Bus. & Com. Code. Ann. 24.008(a)(1). Section 24.009(b) provides a specific limitation on this avoidance remedy. It states, [T]o the extent a transfer is voidable in an action by a creditor under Section 24.008(a)(1) of this code, the creditor may recover judgment for the value of the asset transferred . . . or the amount necessary to satisfy the creditor s claim, whichever is less. Id. 24.009(b); Jackson Law Office v. Chappell, 37 S.W.3d 15, 27 (Tex. App. Tyler 2000, pet. denied).

Whatley requests in his first amended petition that the court declare the September 1995 conveyance from Ron McCartney Homes to Distinctive Homes void because it was made with intent to defraud him. See Texas Sand, 381 S.W.2d at 54 (recognizing under former law that creditor could file suit to cancel fraudulent conveyance). He asks the court to award him title to and possession of the property under the constable s deed he received following the execution sale. Whatley also prays for damages and for general relief.

The Ochoas and Brookshire aver in their summary judgment motion that, even assuming the aforementioned conveyance was made with intent to defraud Whatley: (1) the UFTA does not permit Whatley to have the conveyance set aside as void; (2) the UFTA allows execution on the property only if ordered by the court in which the creditor seeks to have the conveyance declared fraudulent; and (3) the maximum recovery Whatley can have under the UFTA is the value of the property conveyed or the amount necessary to satisfy his claim, whichever is less. The Ochoas and Brookshire deposited $2,000 in the registry of the court, which is the amount still owed on Whatley s judgment lien, so that the court can award that sum to Whatley if it finds that Ron McCartney Homes made the September 1995 conveyance with intent to defraud Whatley.

The trial court declared in its summary judgment that the constable s deed did not convey title to Whatley because the September 1995 conveyance is merely voidable and that Whatley cannot execute on the Ochoas property to obtain satisfaction of the $2,000 still owing on the judgment lien.

Whatley apparently construes the court s summary judgment order as an adjudication that Ron McCartney Homes did not intend to defraud him when it conveyed the property to Distinctive Homes. He misreads the order.

The court s summary judgment order merely reiterates existing law, namely: (1) that a fraudulent conveyance is voidable, not void; and (2) that a judgment creditor who seeks to avoid an alleged fraudulent conveyance can obtain execution on the subject property only on the order of the court in which the creditor challenges the propriety of the conveyance. Tex. Bus. & Com. Code. Ann. 24.008(a)(1), (b). The issue of whether the conveyance between Ron McCartney Homes and Distinctive Homes was fraudulent has not been adjudicated yet. It lies within the severed claims which remain pending in the trial court.

The trial court essentially rendered a declaratory judgment in its summary judgment order. See Tex. Civ. Prac. & Rem. Code Ann. 37.003 (Vernon 1997). The order constitutes a substantially correct statement of the law. Accordingly, we conclude that Whatley s second issue is without merit.

We affirm the judgment.

REX D. DAVIS

Chief Justice

Before Chief Justice Davis,

Justice Vance, and

Justice Gray

Affirmed

Opinion delivered and filed December 18, 2002

Do not publish

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