CATAMOUNT PROPERTIES 2018 LLC v. GUILD MORTGAGE COMPANY LLC (2025)

OPINION DISSENTING IN PART, CONCURRING IN PART

Dissent in part and Concur in part; and Opinion Filed May 1, 2025

In this appeal from a judgment in a suit to quiet title to a certain piece of property, we are tasked, primarily, with construing a legal instrument recorded in the Collin County property records. The majority concludes that this document “clearly” intended to release only a single, duplicate lien against the property, despite the release's unambiguous language, structure, and context objectively demonstrating that the underlying debt was fully satisfied. Because I disagree with the majority's analysis and conclusion on this critical issue, I respectfully dissent.

BACKGROUND

Appellant Catamount Properties 2018, LLC purchased the real property that is the subject of this dispute at a foreclosure sale in July 2021 for $93,000. The prior owner's HOA had initiated the foreclosure sale after the prior owner failed to pay $2,029.12. Three months later, in October 2021, appellee Guild Mortgage Company LLC initiated another foreclosure sale of the property, claiming it held a superior lien that was not extinguished by the first foreclosure sale. Specifically, Guild asserted a first-priority lien against the property tied to a mortgage loan that the prior owner had defaulted on. In fact, according to Guild, the prior owner had been in default for over four years—since August 1, 2017, which Guild said was the last time the prior owner had made a payment on the mortgage loan. Catamount sued to quiet title on the property, claiming that the loan had been satisfied and that Guild had released all its liens against the property. Catamount also sought and obtained temporary injunctive relief enjoining the foreclosure pending a trial on the merits.

According to a deed of trust recorded in the Collin County real property records on August 1, 2016, Guild held a promissory note—the mortgage loan—in the original principal sum of $221,994 executed by the prior owner on July 25, 2016, and payable to Guild. The August 1 deed of trust operated as a lien against the property to secure the debt. Guild recorded an identical deed of trust two days later, on August 3. On August 24, Guild recorded a one-page “release of lien,” which has become the critical legal instrument on which resolution of this appeal turns.

APPLICABLE LAW AND STANDARD OF REVIEW

The general principles that govern our construction of contracts also govern our construction of recorded property instruments like deeds or, as applicable here, releases. See Piranha Partners v. Neuhoff, 596 S.W.3d 740, 743–44 (Tex. 2020); Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990); Naik v. Naik, 438 S.W.3d 166, 174 (Tex. App.—Dallas 2014, no pet.). Catamount and Guild agree that the release is unambiguous, but they reach opposite conclusions as to how we should construe the release. “A contract is not ambiguous merely because the parties disagree about its meaning and may be ambiguous even though the parties agree it is not. Both the presence of ambiguity and interpretation of an unambiguous contract are questions of law we review de novo using well-settled contract-construction principles.” URI, Inc. v. Kleberg Cnty., 543 S.W.3d 755, 763 (Tex. 2018).

Our “primary objective” when construing a legal instrument “is to ascertain and give effect to the parties' intent as expressed in the instrument.” U.S. Polyco, Inc. v. Tex. Cent. Bus. Lines Corp., 681 S.W.3d 383, 387 (Tex. 2023) (quoting URI, 543 S.W.3d at 763). “In the usual case, the instrument alone will be deemed to express the intention of the parties for it is objective, not subjective, intent that controls.” Id. (quoting City of Pinehurst v. Spooner Addition Water Co., 432 S.W.2d 515, 518 (Tex. 1968)). When the instrument is unambiguous, it will “be enforced as written without considering extrinsic evidence bearing on the parties' subjective intent.” Id. (quoting Devon Energy Prod. Co. v. Sheppard, 668 S.W.3d 332, 343 (Tex. 2023)). Therefore, our analysis must start (and generally end) with an assessment of the instrument's “language, structure, and context.” See id. at 388.

Under well-settled contract-construction principles, we must “construe language according to its ‘plain, ordinary, and generally accepted meaning’ unless the instrument directs otherwise” and “construe words ‘in the context in which they are used.’ ” Piranha Partners, 596 S.W.3d at 747 (quoting URI, 543 S.W.3d at 764). We must also “avoid any construction that renders any provisions meaningless” and consider and construe all provisions together “so that the effect or meaning of one part on any other part may be determined.” Id. Overall, “[w]e consider the entire agreement and, to the extent possible, resolve any conflicts by harmonizing the agreement's provisions, rather than by applying arbitrary or mechanical default rules.” Id. at 744.

ANALYSIS

The release is a one-page document entitled “release of lien”¹ that Guild recorded in the Collin County property records on August 24, 2016. Although it technically consists of one sentence, the release may be broken down into three discrete subparts. First, the release provides some general context, stating that Guild holds “one” July 25, 2016 promissory note in the original principal sum of $221,994 “more fully described in and secured by a lien created in a Deed of Trust” (emphasis added) recorded on August 3, 2016. It does not mention the deed of trust recorded on August 1. Next, it provides more immediate, specific context, stating that Guild has received “the full and final payment of all indebtedness secured by the aforesaid liens” (emphasis added). Finally, the release explains the ultimate action that Guild is taking, stating that, “in consideration of the full and final payment,” Guild “releases and discharges [the prior owner] from all liability and indebtedness and the above-described property from all liens held by [Guild]” (emphasis added).

The plain meaning of the release's text declares that Guild's underlying debt has been paid. No lien can exist to secure payment of a debt that has been paid. See, e.g., Jarvis v. K & E Re One, LLC, 390 S.W.3d 631, 642 (Tex. App.—Dallas 2012, no pet.) (“The payment of a debt discharges the lien securing it without any release from the lienholder.”). Therefore, all Guild's liens against the property have been released. The release's structure is a classic syllogism: Guild has a note secured by a lien until the debt is satisfied; the debt has been satisfied; therefore, the note is discharged and the lien is released. The release has no conflict or inconsistency by releasing the property from “all liens” held by Guild “in consideration of the full and final payment of all indebtedness.” Indeed, reference to “all liens” is consistent with the context in which Guild recorded the release, namely after Guild had filed at least two liens against the property.²

When we look to the broader context of the release, it is certainly plausible that Guild's actual, subjective intention was to release only the August 3 deed of trust. But subjective intent does not control. U.S. Polyco, 681 S.W.3d at 387. “[S]urrounding facts and circumstances cannot be employed to ‘make the language say what it unambiguously does not say’ or ‘to show that the parties probably meant, or could have meant, something other than what their agreement stated.’ ” Barrow-Shaver Res. Co. v. Carrizo Oil & Gas, Inc., 590 S.W.3d 471, 483–84 (Tex. 2019) (quoting URI, 543 S.W.3d at 757). Guild could have recorded a release stating that it was releasing only the August 3 deed of trust as an erroneous duplicate. But it did not. Instead, it recorded a release that unambiguously states that Guild “releases and discharges ․ the above-described property from all liens held by [Guild]” specifically because “all indebtedness” had been paid in full. Without a debt, there is nothing for a lien to secure.

While recognizing that we should examine the release as a whole and give effect to all its provisions, the majority reviews only part of the release, focusing too narrowly on the fact that the August 3 deed of trust is specifically mentioned. However, the release also specifically identifies the “one certain promissory note” executed on July 25 and declares it has been fully and finally paid. The majority concludes that construing the document to release “all liens” would render the language referring to the August 3 deed of trust meaningless. But the majority offers no further analysis, contending the document as a whole “clearly” released only the referenced August 3 deed of trust.

The majority appears to rely on the trial court's findings of fact and conclusions of law, in which the trial court explained that when two provisions arguably conflict, courts apply rules of construction to harmonize them, including the rule that a specific provision controls over a general provision. Because the August 3 deed of trust is specifically mentioned, the logic goes, it controls over the general provision releasing “all liens.” But “we need not rely on canons of construction like the rules that earlier or more specific provisions prevail” when the document is unambiguous and there is no conflict to resolve. See G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 532 (Tex. 2015).

A careful and detailed examination of the language, structure, and context of the release demonstrates that the specific reference to the August 3 deed of trust does not conflict with the specific reference to the July 25 note and the more general release of all liens. The release refers to the August 3 deed of trust to more fully describe and secure the one specified note, not as a limitation on the release itself. The operative provision of the release, however, unambiguously releases all liens against the property held by Guild. And because the release plainly declares that the specifically identified underlying debt had been fully paid, it may be reasonably construed as a global general release even though a specific lien had elsewhere been referenced.

Guild may have subjectively intended to release only a duplicate deed of trust. But that is not what the plain text of its release says. The release unambiguously states that Guild's debt has been fully paid and in consideration of that full and final payment, all liens against the property created to secure that debt have been released. I fail to see how an ordinary person reviewing the property records could reasonably understand the release to mean that Guild actually retains an outstanding debt and that Guild intended to preserve a separate, unidentified deed of trust securing that debt.

CONCLUSION

Accordingly, I would reverse the trial court's judgment and render judgment quieting title in Catamount's favor, free and clear of any claim by Guild. Therefore, I dissent from the majority's opinion and judgment affirming the trial court's judgment as to the suit to quiet title. I concur with the majority's opinion and judgment reversing the trial court's award of attorney fees and rendering a take-nothing judgment as to that claim.

FOOTNOTES

1.   Because a document's title provides context, courts should generally construe the document consistently with the given title. RSUI Indem. Co. v. The Lynd Co., 466 S.W.3d 113, 121 (Tex. 2015). But the title is not determinative. Id. The greater weight must be given to the plain meaning of the document's operative language. Id. Therefore, I concentrate my analysis on the release's operative language. I also conclude that the release's title is not inconsistent with how I have construed the release.

2.   The underlying debt was a refinanced mortgage loan. Presumably, the previous mortgage loan was also secured by a deed of trust, but the record does not indicate whether Guild had recorded an earlier release as to any such previous deed of trust.

EMILY MISKEL JUSTICE