Glynnwood Bowman, Individually and John Angell, as Receiver, Appellants v. The Bank of New YorkMellon Trust Company, N.A. f/k/a The Bank of New York Trust Company, N.A. as Successor to JP Morgan Chase Bank, N.A. as Trustee for Ramp 2006RS4, Appellee
This dispute arises out of appellant Glynnwood Bowman's efforts to satisfy a judgment against Relocation Studio, LLC from real property located in Dallas County. Appellee Bank of New York Mellon Trust Company, N.A. (BNY Mellon) filed this suit asserting it, not Relocation Studio, was the legal and record owner of the property and therefore Bowman's efforts were improper and clouded its title. Following a bench trial, the trial court rendered judgment in favor of BNY Mellon quieting title in its name, declaring that Bowman's judgment against Relocation Studio and related lis pendens and abstract of judgment were ineffective against BNY Mellon's title to the property, and ordering the property removed from a prior order appointing a receiver over Relocation Studio's assets.
On appeal, appellants assert twenty-five points of error. First, appellants contend the trial court lacked subject matter jurisdiction to either grant declaratory relief or to modify the receivership order. Appellants also generally assert the evidence is legally insufficient to support the trial court's judgment because Relocation Studio, not BNY Mellon, is the owner of the property. Finally, appellants contend they conclusively established their claim that BNY Mellon presented a fraudulent instrument involving real property. For the following reasons, we affirm the trial court's judgment.
The property at issue is a house located in Dallas County. In 2006, Relocation Studio, LLC purchased the house from Weekly Homes. Relocation Studio almost immediately resold the property to a third party, Debora Onyango, pursuant to an April 27, 2006 warranty deed. However, the signature line on the deed stated it was executed by “Relocation Studio, LLP,” which did not exist. Regardless, the deed was signed by Robert Brooks, one of Relocation Studio, LLC's two managing members. The deed contained a notarized acknowledgment stating Brooks signed the deed “as President of Relocation Studio LLP on behalf of said LLC.”
The deed retained a vendor's lien and assigned that lien to Onyango's lender, Meritage Mortgage to secure her $288,170 purchase money note. To further secure the note, Onyango executed a deed of trust in favor of Meritage. Due to an error, the deed and the deed of trust were initially recorded in Tarrant County rather than Dallas County.
Onyango subsequently defaulted on her note. Meritage assigned the note and the deed of trust to BNY Mellon. In October 2009, BNY Mellon foreclosed on the property, purchased the property at the foreclosure sale, and obtained a substitute trustee's deed to the property. BNY Mellon's deed was duly recorded in Dallas County.
Meanwhile, on May 19, 2009, Bowman sued Relocation Studio asserting claims arising out of a fraudulent real estate scheme orchestrated by Brooks. Relocation Studio, who had forfeited its charter in 2007, did not file an answer. On July 6, 2009, Bowman filed a lis pendens claiming that his suit was seeking title to the property. However, Bowman's suit did not involve the property, claim title to the property, or assert any direct interest in the property. See Flores v. Haberman, 915 S.W.2d 477, 478 (Tex.1995) (suit must claim direct interest in real property to support a lis pendens).
In late June 2010, after BNY Mellon foreclosed on the property, it called Bowman about the lis pendens. At that time, BNY Mellon's substitute trustee's deed was on record in Dallas County, but the deed from Relocation Studio to Onyango still was not. Because Bowman had not seen that deed, he did not remove the lis pendens.1
On April 7, 2011, Onyango's deed was finally recorded in Dallas County. About a week later, Bowman obtained a default judgment against Relocation Studio for money damages only and later filed an abstract of judgment. Bowman also filed an application for the appointment of a receiver under the general receivership statute. See Tex. Civ. Prac. & Rem.Code Ann. § 64.001(West Supp.2015). Bowman requested a receiver be appointed over Relocation Studio's assets to “subject” those assets to his claim as a judgment creditor of Relocation Studio. See id. at 64.001(a)(2). In his application, Bowman represented that Relocation Studio was the owner of the house, but he did not disclose BNY Mellon claimed ownership and had a recorded deed to the property. Relocation Studio again did not answer. The trial court granted Bowman's application based on his uncontested allegations and appointed John Angel receiver over Relocation Studio's assets and, specifically, the house.
After the receiver attempted to sell the property, BNY Mellon filed this suit, which was subsequently consolidated with the receivership proceedings. BNY Mellon alleged claims for trespass to try title and to quiet title and sought a declaratory judgment that Bowman's judgment, lis pendens and abstract of judgment did not encumber the property. BNY Mellon also requested the trial court to modify the receivership order to remove the property from the receivership estate. Appellants counter-claimed seeking a declaratory judgment that both Onyango's and BNY Mellon's deeds to the property were void. They also asserted a claim for damages under Chapter 12 of the Texas Civil Practice and Remedies Code asserting they were injured by BNY Mellon's recordation of a fraudulent instrument, specifically a “forged” assignment of the deed of trust. See Tex. Civ. Prac. & Rem.Code Ann. § 12.002 (West Supp.2015)
Following a bench trial, the trial court concluded Relocation Studio conveyed the property to Onyango in 2006 and that BNY Mellon foreclosed on the property and was the legal and record owner of the property before Bowman obtained, and abstracted, his judgment against Relocation Studio. The trial court rendered judgment that Bowman's judgment, lis pendens, and abstract of judgment were ineffective as to the property, quieted title in favor of BNY Mellon, and modified the receivership order to remove reference to the property.
Before addressing appellants' arguments, we begin by noting that Bowman, as a judgment creditor of Relocation Studio, and Angel, as Relocation Studio's court-appointed receiver, have filed a joint brief in which they have generally failed to differentiate between themselves. By doing so, the receiver purports to assert Bowman's claims and Bowman purports to assert Relocation Studio's claims. Nevertheless, we will address the points as they have been presented to the extent either Bowman or the receiver possess standing to assert them, but our opinion should not be construed as suggesting they both have standing to assert each of the points addressed.2
On appeal, appellants first contend the trial court lacked subject-matter jurisdiction because the declaratory judgment act does not allow a trial court to “interpret” a prior judgment. See Dallas County Tax Collector v. Andolina, 303 S.W.3d 926, 930 (Tex.App.—Dallas 2010, no pet.) (declaratory relief is not appropriate to attack or modify prior judgment); see also Beadle v. Bonham State Bank, 880 S.W.2d 160, 162 (Tex.App.—Texarkana 1994), aff'd in part and rev'd in part on other grounds, 907 S.W.2d 465 (Tex.1995).
However, whether a trial court has subject matter jurisdiction does not depend on the provisions of the declaratory judgment act, but on whether a justiciable controversy exists between the parties. Transp. Ins. Co. v. WH Cleaners, Inc., 372 S.W.3d 223, 227 (Tex.App.—Dallas 2012, no pet.); see also Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 446 (Tex.1993). Moreover, a trial court does not lack jurisdiction over a property dispute that was erroneously brought as a declaratory judgment action. See Teon Mgmt., LLC v. Turquoise Bay Corp., 357 S.W.3d 719, 726 (Tex.App.—Eastland 2011, pet. denied); cf. Bonham State Bank, 907 S.W.2d 465, 467 Tex.1995) (a declaratory judgment action may not be used as guise to collaterally attack a final judgment, but may be used to seek a judicial determination that a party is entitled to offset two judgments).
Here, BNY Mellon's suit alleged a dispute over competing claims to real property. It sought relief under the declaratory judgment act, but also asserted claims for trespass to try title and to quiet title. See Texas Parks and Wildlife Department v. Sawyer Trust, 354 S.W.3d 384, 388 (Tex.2011) (even if a litigant couches its requested relief in terms of declaratory relief, the underlying nature of the suit is not altered). Appellants do not deny a genuine dispute concerning the property exists. To the contrary, they filed cross-claims seeking resolution of the same dispute. We conclude a justiciable controversy existed between the parties.
Nor can we agree BNY Mellon's suit constituted a collateral attack on the “prior litigation.” A collateral attack is an attempt to avoid the binding force of a final judgment to obtain relief the judgment would otherwise bar. Browning v. Prostok, 165 S.W.3d 336, 346 (Tex.2005). According to appellants, BNY Mellon's suit seeks to collaterally attack the default judgment against Relocation Studio. However, Bowman's judgment against Relocation Studio awarded him money damages only and did not adjudicate title to the property. Nor could Bowman's lis pendens or abstract of judgment alter the nature or binding effect of that judgment. A lis pendens is simply a notice to prospective purchasers that certain property may be subject to a superior interest in the event a judgment is later entered concerning the property. See Countrywide Home Loans, Inc. v. Howard, 240 S.W.3d 1, 4 (Tex.App.—Austin 2007, pet. denied). An abstract of judgment, on the other hand, perfects a lien on property that is actually owned by the judgment debtor. See First State Bank of Amarillo v. Jones, 107 Tex. 623, 183 S.W. 874, 876 (Tex.1916); Smith v. Sumeer Homes, Inc., 05–11–01632–CV, 2013 WL 2467252, at *3 (Tex.App.—Dallas June 6, 2013, pet. denied).
We also disagree with appellants' contention that the trial court lacked jurisdiction to modify its order appointing a receiver because that order was final and not subject to collateral attack. An order entered in a receivership proceeding that resolves a “discrete” issue is final and has the same force and affect as any other final adjudications of a court. See Huston v. F.D.I.C., 800 S.W.2d 845, 847 (Tex.1990). However, an order appointing a receiver is not final. See Gibson v. Cuellar, 440 S.W.3d 150, 156 (Tex.App.—Houston [14th Dist.] 2013, no pet.).
Here, the trial court's order appointing the receiver did not adjudicate title to the property or finally dispose of the property. Cf. Gibson, 440 S.W.3d at 156 (orders approving and confirming sale of property to third party constitute final adjudication). Rather, as appellants themselves acknowledge, the effect of the order was to place the property in the legal custody of the trial court. See First S. Props., Inc. v. Vallone, 533 S.W.2d 339, 341 (Tex.1976). As a consequence, both the property and the receiver were subject to the trial court's continuing jurisdiction and control. See Pratt v. Amrex, Inc., 354 S.W.3d 502, 504–05 (Tex.App.—San Antonio 2011, pet. denied) (trial court retains power over the receivership property until it either relinquishes its jurisdiction over the suit or discharges the receiver and restores the receivership property to its rightful owners).
Appellants also suggest that the trial court lacked jurisdiction to modify the receivership order because BNY Mellon failed to bring an interlocutory appeal from that order. See Gibson, 440 S.W.3d 153 (order appointing receiver subject to interlocutory appeal). However, BNY Mellon was not a party to the proceedings when the trial court entered the order. City of San Benito v. Rio Grande Valley Gas Co., 109 S.W.3d 750, 754 (Tex.2003) (generally, only parties to a suit have standing to appeal). Moreover, regardless of whether an order is subject to an interlocutory appeal, a trial court nevertheless retains jurisdiction to modify its own interlocutory orders. Cf. Tex.R.App. P. 29 (trial court retains jurisdiction over case while interlocutory appeal is pending).
Finally, and not least significantly, a receivership cannot destroy previously vested rights.3 First S. Properties, 533 S.W.2d at 343. “The rule is an elementary one that strangers to a judgment, that is, those who are not parties or privies to the proceeding, may, when their interests are adversely affected by the judgment, impeach it whenever it is attempted to be enforced against them.” State Mortg. Corp. v. Traylor, 120 Tex. 148, 154, 36 S.W.2d 440, 443 (1931). Further, if property is improperly included in a receivership estate, the true owner of the property may bring a separate action against the receiver to recover that property. Easton v. Whisenant, 50 S.W.2d 1109, 1111 (Tex.Civ.App.—Dallas 1936, no writ). Even if such a suit is adjudicated in a different court, if successful, the receivership court should eliminate the property from the receivership and restore it to its rightful owner. Id. We conclude the trial court had jurisdiction over the dispute and jurisdiction to grant the requested relief.
Validity of Onyango's Deed
Appellants next challenge the legal sufficiency of the evidence to support various express and implied findings the trial court made to support its conclusion that Onyango's deed was valid. In its findings of fact and conclusions of law, the trial court found that Robert Brooks, a managing member of Relocation Studio, LLC, signed the deed on its behalf. The trial court also found Relocation Studio intended to convey the property to Onyango. The trial court therefore concluded the deed was valid and that neither Relocation Studio nor Bowman, as its judgment creditor, had an interest in the property. On appeal, appellants argue Relocation Studio did not execute the deed and, therefore, the deed did not operate to convey the property. Appellants further assert that deed was void and unenforceable because there is no evidence that Brooks was authorized to sign the deed on behalf of Relocation Studio, LLC.
The trial court's findings of fact have the same weight as a jury verdict. Principal Life Ins. Co. v. Revalen Dev., LLC, 358 S.W.3d 451, 454 (Tex.App.–Dallas 2012, pet. denied). Therefore, we must uphold the findings if there is more than a scintilla of evidence to support them. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 84 (Tex.1992).
Here, the deed recites “the undersigned, Relocation Studio LLC” as “grantor” did “grant, sell, and convey” the property to Onyango. The deed was signed by Robert Brooks, one of two managing members of Relocation Studios. Appellants nevertheless assert Brooks did not sign or intend to sign for Relocation Studio because it was executed in the name of “Relocation Studio LLP.” We cannot agree. Instead, it is apparent from the face of the deed and the recitations contained therein that an error was made on the signature line. Those recitations show Relocation Studio conveyed and intended to convey the property to Onyango. See also Tex. Utils. Co. v. Barrett, 460 S.W.2d 409, 412 (Tex.1970) (“It is presumed that when parties make an agreement they intend it to be effectual, not nugatory). Further, evidence that Brooks was a managing member of Relocation Studio is some evidence he had actual authority to sign the deed.4 See Tex. Bus. Orgs.Code Ann. § 101.251(2) (West 2012) (governing authority of LLC consist of its members if the articles of formation state it will not have managers); MasterGuard L.P. v. Eco Technologies Intern. LLC, 441 S.W.3d 367, 379 (Tex.App.—Dallas 2013, no pet.) (member of member-managed LLC has actual authority to conduct LLC's business). Moreover, the error on the signature line did not render the deed void or otherwise invalid.5 Cf. Hemyari v. Stephens, 355 S.W.3d 623, 627–28 (Tex.2011) (failure of individual to identify capacity in which he signed the deed did not invalidate the deed because anyone looking at the deed would readily assume the signee was signing in his capacity as general partner of the grantors identified in the deed).
Moreover, even if Brooks signed the deed without Relocation Studio's authority, Bowman, as a judgment creditor, does not have standing to challenge the deed on that basis. See Nobles v. Marcus, 533 S.W.2d 923, 926 (Tex.1976). Rather, any lack of authority would render the deed voidable at Relocation Studio's election. See id. Assuming the receiver possesses such standing, he presented no evidence to support such a claim. In fact, the receiver testified at trial and admitted that he had no reason to believe Relocation Studio did not receive the consideration for the sale of the house or desired to rescind that sale. We conclude appellants have failed to show the trial court erred in concluding Onyango's deed was valid.
Validity of BNY Mellon's Deed
Appellants next assert the trial court should have rendered judgment in their favor and declared BNY Mellon's deed void. Specifically, they assert Onyango was not given proper notice of the foreclosure sale and that Meritage's assignment of the deed of trust to BNY Mellon was invalid. In its findings of fact and conclusions of law, the trial court concluded appellants had no standing to assert these challenges. Appellants have not challenged that determination.
Generally speaking, we must affirm a trial court's judgment if an appellant does not challenge all independent bases or grounds that fully support the judgment. Blackstone Med., Inc. v. Phoenix Surgicals, L.L.C., 470 S.W.3d 636, 650 (Tex.App.—Dallas 2015, no pet.). Because appellants have not done so, they have failed to show reversible error.6 Furthermore, we agree with the trial court's conclusion.
Only the person whose primary legal right has been breached by a particular claim has standing to seek redress for an injury. See Nobles, 533 S.W.2d at 927. In other words, a plaintiff may not sue for breaches of legal rights belonging to other parties. See id; see also Nauslar v. Coors Brewing Co., 170 S.W.3d 242, 248–49 (Tex.App.–Dallas 2005, no pet.). Even if appellants' challenges to BNY Mellon's deed were well founded, they would not establish they possess an interest in the property. Without an interest in the property, appellants have no standing to assert these challenges. Goswami v. Metro. Sav. & Loan Ass'n, 751 S.W.2d 487, 489 (Tex.1988) (third-party must have interest in real property to challenge foreclosure sale); Morlock, L.L.C. v. Bank of NY, 448 S.W.3d 514, 517 (Tex.App.—Houston [1st Dist.] 2014, pet. denied) (a person with no property interest has no standing to challenge the validity of and assignment a deed of trust). We conclude appellants have not shown the trial court erred in failing to declare BNY Mellon's deed void.
Presentment of a Fraudulent Instrument
Finally, appellants assert they conclusively established a claim for presentment of a fraudulent instrument. According to appellants, the assignment of the deed of trust from Meritage to BNY Mellon constituted a fraudulent instrument related to real property under Chapter 12 of the civil practice and remedies code. Tex. Civ. Prac. & Rem.Code Ann. § 12.002 (West Supp.2015). The elements of a claim under Chapter 12 are (1) the defendant made, presented, or used a document with knowledge that it was a fraudulent lien or claim to real property; (2) the defendant intended that the document be given legal effect; and (3) the defendant intended to cause plaintiff physical injury, financial injury, or mental anguish. Id; Merritt v. Davis, 331 S.W.3d 857, 860–61 (Tex.App.—Dallas 2011, pet. denied). Only an obligor, debtor, or owner of real property has standing to assert a claim under Chapter 12. See Tex. Civ. Prac. & Rem.Code Ann. § 12.003(a)(8) (West Supp.2015); see also Taylor Elec. Servs., Inc. v. Armstrong Elec. Supply Co., 167 S.W.3d 522, 531 (Tex.App.—Fort Worth 2005, no pet.).
Here, appellants did not own an interest in the property and were neither obligors nor debtors named in the allegedly fraudulent instrument. Therefore, they have no standing to assert a claim under Chapter 12. See Taylor Elec. Servs., 167 S.W.3d at 531. Further, to support their claim that the assignment was fraudulent, appellants relied entirely on extrinsic evidence that the notary that acknowledged the assignment was not commissioned at that time. We disagree this constitutes conclusive proof the assignment was forged or was otherwise fraudulent. Cf. Morris v. Wells Fargo Bank, N.A., 334 S.W.3d 838, 849 (Tex.App.—Dallas 2011, no pet.) (concluding notary's improper acknowledgment did not render deed void). Nor did appellants present conclusive evidence that BNY Mellon knew the assignment was fraudulent or that it presented the assignment with an intent to injure appellants. Appellants have not shown the trial court erred in failing to render judgment in their favor on their Chapter 12 claim.
We affirm the trial court's judgment.
1. At that time, Onyango's deed of trust was on record in Dallas County. The deed of trust showed it had been previously misfiled in Tarrant County and also referenced the deed from Relocation Studio to Onyango.
2. Bowman, as a judgment creditor of Relocation Studio, does not have standing to sue for injuries to Relocation Studio. Nobles v. Marcus, 533 S.W.2d 923, 926 (Tex.1976). The receiver, on the other hand, does not have standing to sue for injuries to Bowman. See Forex Capital Mkts., LLC v. Crawford, 05–14–00341–CV, 2014 WL 7498051, at *3 (Tex.App.—Dallas Dec. 31, 2014, no pet.); Cotton v. Republic Nat'l Bank of Dallas, 395 S.W.2d 930, 941 (Tex.Civ.App.–Dallas 1965, writ ref'd n.r.e.).
3. Similarly, a trial court may not adjudicate third party ownership claims in a turnover proceeding. Turner Bros. Tracking LLC v. Baker, 396 S.W.3d 672, 675 (Tex.App.—Dallas 2013, no pet.).
4. We also note that in Bowman's pleadings in his suit against Relocation Studio, LLC, he alleged Relocation Studio was “owned and controlled” by Brooks.
5. Appellants also generally contend there is no evidence to support the trial court's finding that Relocation Studio received consideration for the sale of the house. They provide no substantive argument to support this contention or to explain its effect on the trial court's judgment. Rule 38.1(i) requires that a brief “contain a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record.” Tex.R.App. P. 38.1(i); Gonzalez v. VATR Const. LLC, 418 S.W.3d 777, 783 (Tex.App.—Dallas 2013, no pet.). We nevertheless note that the deed recites Relocation Studio was paid the $288,170 Meritage loaned Onyango to purchase the house. XTO Energy Inc. v. Nikolai, 357 S.W.3d 47, 58 (Tex.App.—Fort Worth 2011, pet. denied) (recitals of facts in deed is prima facie proof of those facts).
6. In their reply to BNY Mellon's brief, appellants purport to address the standing issue. A party may not, however, raise a new issue for the first time in a reply brief. See Dallas Cty. v. Gonzales, 183 S.W.3d 94, 104 (Tex.App.—Dallas 2006, pet. denied). Moreover, appellants do not assert they have standing to challenge BNY Mellon's deed, but that BNY Mellon's “waived” any argument that they lacked standing. It is well-settled that standing, as a component of subject-matter jurisdiction, cannot be waived. Texas Ass'n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 44546 (Tex.1993).
Opinion by Justice Brown