James Ruth v. Collazo Holdings, LLC ( 2021 )

Opinion filed April 30, 2021
In The
Eleventh Court of Appeals
__________
No. 11-19-00182-CV
__________
JAMES RUTH, Appellant
V.
COLLAZO HOLDINGS, LLC, Appellee
On Appeal from the 35th District Court
Brown County, Texas
Trial Court Cause No. CV1704125
MEMORANDUM OPINION
This appeal arises from a contract dispute in which Appellant, James Ruth,1
claims to have held title to property purchased by Collazo Holdings, LLC in a Brown
County Appraisal District ad valorem tax sale, thereby giving Appellant a right of
redemption. Appellant also claims that, based on correspondence between Appellant
1
We note that, based upon an answer to a request for disclosure, it appears that James Ruth is
deceased. Typically, a Suggestion of Death should have been filed to allow his estate’s representative to
continue suit. See TEX. R. CIV. P. 151. This was not done; however, no complaint was filed regarding this
matter.
and Collazo via e-mail and regular mail, a contract was formed whereby Appellant
could reclaim the property for $8,413.
In Appellant’s sole issue on appeal, he asserts that the trial court erred in
granting Collazo’s no-evidence motion for summary judgment. We affirm the
judgment.
Background Facts
The property at issue was purchased by MRC Assisted Living, Inc. by deed
dated February 27, 1996, and was duly recorded in the Real Property Records of
Brown County. Importantly, MRC subsequently subdivided the property into Block
One and Block Two, which became known as the Greenbriar Addition to the City of
Brownwood. The plat of the Addition was filed of record on or about April 22,
1996, in the Plat Records and the Real Property Records of Brown County.
In January of 2016, the Brown County Appraisal District brought a tax
foreclosure lawsuit against MRC and a lienholder for past due taxes. The tax
foreclosure sale did not address all of the Greenbriar Addition. Rather, it only related
to those certain lots in Block 2 described as:
Lots 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, and drainage easement,
Block 2, Greenbriar Addition, to the City of Brownwood, Brown
County, Texas (Volume 4, Page 211, Plat Records, Brown County,
Texas) Tax Account Nos. 73478[,] 73479, 73480, 73481, 73482,
73483, 73484, 73485, 73486, 73487, 73488, 73489, 73490, 73491,
73492, 21397.
The Appraisal District obtained a final judgment foreclosing its tax lien and
authorizing the property to be sold. The property sold at a tax foreclosure sale on
April 5, 2016, to Collazo. There were no transfers of record relating to any of these
lots prior to the tax foreclosure sale, and at the time of the tax foreclosure lawsuit,
the record owner of Block 2 was MRC.
2
Appellant’s claims arise out of a deed purportedly executed by MRC on
January 7, 2010, selling the property in question to Appellant. The deed, however,
does not reference or include the property sold at the tax foreclosure sale.
Appellant’s deed relates to the property in Block One of the Greenbriar Addition,
while the property sold at the tax foreclosure sale relates to Block Two.
Appellant filed this lawsuit asking the trial court to declare that he had a right
to redeem the property, that notice was not properly given prior to the tax foreclosure
sale, and that Collazo breached a constructive contract. Collazo filed a combined
traditional and no-evidence motion for summary judgment, which was granted after
a hearing. Collazo asserted that Appellant was not the owner of the property in
question, that Appellant had not paid the past taxes and other sums as a requisite for
bringing suit, and that there was no contract that complied with the statute of frauds.
Issue
Appellant’s brief on appeal ignores important facts and legal issues.
Appellant disregards the traditional portion of Collazo’s motion for summary
judgment in which it asserted that Appellant owned no interest in Block Two of the
Greenbriar Addition and, even if he had, that Appellant did not fulfill the
requirements to complete redemption. Appellant seems to assert that
correspondence between Appellant and Collazo constitutes a valid, written contract.
However, Appellant does not address the fact that, if Collazo’s October 7, 2016
correspondence includes a valid offer for purchase of Block Two, Appellant himself
rejected said offer by sending a cashier’s check in a lesser amount with justifications
for the difference in price. See Beaumont v. Prieto, 249 U.S. 554, 556 (1919).
Furthermore, Appellant did not provide proper proof of ownership of Block Two, as
required in the alleged offer. Therefore, the terms of Collazo’s offer, which
Appellant claims to have accepted, were not fully complied with and did not create
3
a binding contract. Appellant brings a sole issue on appeal irrespective of these
points.
Appellant claims in his concise brief that, even if the requisites of redemption
were not met, a contract had been formed between Appellant and Collazo by a series
of written exchanges that would allow Appellant to reclaim the property for $8,413.
In his sole issue, Appellant alleges that the trial court erred in granting Collazo’s
motion for summary judgment on Appellant’s breach of contract claims.
Specifically, Appellant claims that the trial court erred in granting a no-evidence
summary judgment on the affirmative defense of the statute of frauds. Appellant
asserts that, because the statute of frauds is an affirmative defense on which Collazo
bore the initial burden of proof, the granting of a no-evidence summary judgment as
to Appellant’s contract claim was improper. We disagree.
Standard of Review
We review a trial court’s entry of summary judgment de novo. First United
Pentecostal Church of Beaumont v. Parker, 514 S.W.3d 214, 219 (Tex. 2017).
When the trial court’s order fails to specify the grounds for its summary judgment,
we will affirm if any of the theories are meritorious. Provident Life & Accident Ins.
Co. v. Knott, 128 S.W.3d 211, 216 (Tex. 2003). When, as here, a party has sought
summary judgment on both no evidence and traditional grounds, we review the
propriety of the summary judgment under the no-evidence standard first.
Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013).
We typically review a no-evidence motion for summary judgment under the
same legal sufficiency standards as a directed verdict. Id. Under this standard, the
nonmovant has the burden to produce more than a scintilla of evidence to support
each challenged element of its claims. Id. Evidence is less than a scintilla if it 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.
4
Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)). In reviewing a no-evidence
summary judgment, we consider the evidence in the light most favorable to the
nonmovant, indulging every reasonable inference in favor of the nonmovant and
resolving any doubts against the movant. Merriman, 407 S.W.3d at 248; City of
Keller v. Wilson, 168 S.W.3d 802, 824 (Tex. 2005).
After adequate time for discovery, a party may move for summary judgment
on the ground that there is no evidence of one or more essential elements of a claim
or defense on which an adverse party would have the burden of proof at trial. TEX. R.
CIV. P. 166a(i). Thus, only a party without the burden of proof may move for no-
evidence summary judgment. See id.; Burges v. Mosley, 304 S.W.3d 623, 628 (Tex.
App.—Tyler 2010, no pet.); Reyes v. Saenz, 269 S.W.3d 675, 676–77 (Tex. App.—
San Antonio 2008, no pet.).
A party moving for traditional summary judgment bears the burden of proving
that there is no genuine issue of material fact and that it is entitled to judgment as a
matter of law. TEX. R. CIV. P. 166a(c); Nassar v. Liberty Mut. Fire Ins. Co., 508
S.W.3d 254, 257 (Tex. 2017). To be entitled to traditional summary judgment, a
defendant must conclusively negate at least one essential element of the cause of
action being asserted or conclusively establish each element of an affirmative
defense. Sci. Spectrum Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997).
Evidence is conclusive only if reasonable people could not differ in their
conclusions. City of Keller, 168 S.W.3d at 816. If the movant initially establishes a
right to summary judgment on the issues expressly presented in the motion, then the
burden shifts to the nonmovant to present to the trial court any issues or evidence
that would preclude summary judgment. See City of Houston v. Clear Creek Basin
Auth., 589 S.W.2d 671, 678–79 (Tex. 1979).
5
Analysis
Appellant asserts on appeal that, because the statute of frauds is an affirmative
defense that Collazo had the burden to prove and plead, Collazo should not have
been allowed to move for a no-evidence summary judgment. The law is well
established that “a party may never properly move for no-evidence summary
judgment to prevail on its own claim or an affirmative defense for which it bears the
burden of proof.” Bridgestone Lakes Cmty. Improvement Ass’n v. Bridgestone Lakes
Dev. Co., 489 S.W.3d 118, 127 (Tex. App.—Houston [14th Dist.] 2016, pet. denied)
(citing Nowak v. DAS Inv. Corp., 110 S.W.3d 677, 679 (Tex. App.—Houston [14th
Dist.] 2003, no pet.)).
Collazo presented the issue of the statute of frauds’ applicability in the no-
evidence portion of the motion for summary judgment. Because a party may not
obtain a no-evidence summary judgment on an issue for which it bears the burden
of proof, we construe this part of Collazo’s motion as a motion for traditional
summary judgment. Cox v. Air Liquide America, LP, 498 S.W.3d 686, 689 (Tex.
App.—Houston [14th Dist.] 2016, no pet.); see Bridgestone Lakes Cmty.
Improvement Ass’n, 489 S.W.3d at 127 (citing Nowak, 110 S.W.3d at 679).
“A [contract for the sale of real estate] is not enforceable unless the promise
or agreement, or a memorandum of it, is (1) in writing; and (2) signed by the person
to be charged with the promise or agreement or by someone lawfully authorized to
sign for him.” TEX. BUS. & COM. CODE ANN. § 26.01(a), (b)(4) (West 2015). The
statute of frauds is an affirmative defense to a breach of contract claim. TEX R.
CIV. P. 94. “The party pleading the statute of frauds bears the initial burden of
establishing its applicability.” Dynegy, Inc. v. Yates, 422 S.W.3d 638, 641 (Tex.
2013). However, “[o]nce that party meets its initial burden, the burden shifts to the
opposing party to establish an exception that would take the verbal contract out of
the statute of frauds.” Id. Collazo had the burden of establishing that the statute of
6
frauds applied to this alleged contract. See id. If Collazo made this initial showing,
then the burden shifted to Appellant to establish an exception that would take the
contract out of the statute of frauds. See id.“Whether a contract comes within the statute of frauds is a question of law,
which we review de novo.” Nat’l Prop. Holdings, L.P. v. Westergren, 453 S.W.3d
419, 426 (Tex. 2015). It has long been understood that, to satisfy the statute of
frauds, “there must be a written memorandum which is complete within itself in
every material detail, and which contains all of the essential elements of the
agreement, so that the contract can be ascertained from the writings without resorting
to oral testimony.” Copano Energy, LLC v. Bujnoch, 593 S.W.3d 721, 727 (Tex.
2020) (quoting Cohen v. McCutchin, 565 S.W.2d 230, 232 (Tex. 1978)). The
required written memorandum need not always be a single document, however. Id.
at 727. “[A] court may determine, as a matter of law, that multiple documents
comprise a written contract.” City of Houston v. Williams, 353 S.W.3d 128, 137
(Tex. 2011) (quoting Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d
831, 840 (Tex. 2000)). When considering multiple writings proffered as a single
contract, it remains the rule that the “essential elements of the agreement” must be
evident “from the writings” themselves, “without resorting to oral testimony.”
Copano Energy, 593 S.W.3d at 727 (citing Cohen, 565 S.W.2d at 232). Therefore,
it must first be determined whether a valid and enforceable contract was formed
between Appellant and Collazo.
Because the statute of frauds requires a signed writing, the personal
knowledge and intent of the parties not included in the writings has no effect on the
validity of the contract. Reiland v. Patrick Thomas Props., Inc., 213 S.W.3d 431,
437 (Tex. App.—Houston [1st Dist.] 2006, pet. denied) (“Even when ‘the record
leaves little doubt that the parties knew and understood what property was intended
to be conveyed, . . . the knowledge and intent of the parties will not give validity to
7
the contract and neither will a plat made from extrinsic evidence.’” (quoting
Morrow v. Shotwell, 477 S.W.2d 538, 540 (Tex. 1972))).
Appellant did not meet his burden regarding the statute of frauds once that
burden shifted to him. Collazo had the burden of proving that the statute of frauds
applied to this alleged contract. See Dynegy, Inc., 422 S.W.3d at 641. In fact, the
documents that Appellant attached as exhibits to his summary judgment response
proved that the alleged contract was for the transfer or sale of real property.
“Rule 166a(c) plainly provides for the court to consider evidence in the record that
is attached either to the motion or a response.” Schlumberger Tech. Corp. v. Pasko,
544 S.W.3d 830, 835 (Tex. 2018) (citing Wilson v. Burford, 904 S.W.2d 628, 629
(Tex. 1995)). The pleadings of a nonmovant may constitute summary judgment
evidence “when they contain statements rising to the level of judicially admitting a
fact or conclusion which is directly adverse to that party’s theory [of] defense [or]
recovery.” Khan v. GBAK Props., Inc., 371 S.W.3d 347, 356–57 (Tex. App.—
Houston [1st Dist.] 2012, no pet.); accord Judwin Props., Inc. v. Griggs & Harrison,
P.C., 911 S.W.2d 498, 504 (Tex. App.—Houston [1st Dist.] 1995, no writ.); David
Gavin Co. v. Gibson, 780 S.W.2d 833, 835 (Tex. App.—Houston [14th Dist.] 1989,
writ denied).
As a matter of law, Appellant’s initial burden was met, and the burden shifted
to Collazo. Once the party pleading the statute of frauds meets the initial burden of
establishing its applicability, the burden shifts to the nonmovant to establish that the
statute was satisfied or that an exception exists that would take a verbal contract for
real property out of the statute of frauds. See Dynegy, Inc., 422 S.W.3d at 641. At
the hearing on the motion for summary judgment, Appellant only stated that “the
Court is aware of exceptions to the statute of frauds.” Appellant did not contend that
this was a contract other than for real property, made no showing of a written
8
contract signed by the parties, and failed to show any evidence of a recognized
exception to the statute of frauds.
Appellant had the burden to prove that a valid and enforceable contract
existed. See Copano Energy, 593 S.W.3d at 727 (citing Cohen, 565 S.W.2d at 232).
The essential elements of the alleged contractual agreement were not present. The
elements of an enforceable contract are (1) an offer, (2) an acceptance in strict
compliance with the terms of the offer, (3) a meeting of the minds, (4) a
communication that each party consented to the terms of the contract, and
(5) execution and delivery of the contract with an intent that it become mutual and
binding on both parties. Goldman v. Olmstead, 414 S.W.3d 346, 354 (Tex. App.—
Dallas 2013, pet. denied); Komet v. Graves, 40 S.W.3d 596, 600 (Tex. App.—San
Antonio 2001, no pet.). Whether a particular agreement is a legally enforceable
contract is a question of law reviewed de novo. Crisp Analytical Lab, L.L.C. v.
Jakalam Props., Inc., 422 S.W.3d 85, 89 (Tex. App.—Dallas 2014, pet. denied);
Bandera Cty. v. Hollingsworth, 419 S.W.3d 639, 645 (Tex. App.—San Antonio
2013, no pet.); Parker Drilling Co. v. Romfor Supply Co., 316 S.W.3d 68, 72 (Tex.
App.—Houston [14th Dist.] 2010, pet. denied).
Collazo moved for summary judgment on the basis that there was no evidence
of any element of an enforceable contract in Appellant’s claim. Based on the record
before us, we will focus on the “meeting of the minds” element, as it is clear that the
parties were discussing two different tracts of land in their communications.
The determination of whether there was a meeting of the minds, and thus an
offer and acceptance, is based on objective standards of what the parties said and did
and not on their alleged subjective states of mind. Argonaut Ins. Co. v. Allstate Ins.
Co., 869 S.W.2d 537, 540 (Tex. App.—Corpus Christi–Edinburg 1993, writ denied);
Adams v. Petrade Int’l, Inc., 754 S.W.2d 696, 717 (Tex. App.—Houston [1st Dist.]
1988, writ denied). In determining whether mutual assent is present, the court looks
9
to the communications between the parties and to the acts and circumstances
surrounding these communications. Wiley v. Bertelsen, 770 S.W.2d 878, 882 (Tex.
App.—Texarkana 1989, no writ). The terms must be expressed with sufficient
certainty so that there will be no doubt as to what the parties intended. Id.Appellant asserted at the hearing that an offer was “clearly made” by Collazo
for Appellant to purchase the property back for $8,413. Appellant claims that the
offer also stated that, if not accepted and paid by October 15, an additional $200
would also need to be paid. Appellant stated that, “[d]uring the time period,
[Appellant] responded back with a written acceptance.” However, at the hearing,
Appellant’s trial counsel admitted that “I finally started realizing [Collazo is] not
looking to sell the property back to us. He wants to keep the property. It’s apparent.
And we’re just going through motions.”
Collazo asserts that the only evidence presented by Appellant of an alleged
contract was correspondence between Appellant’s trial counsel and Collazo. There
was no evidence presented of correspondence between Collazo and Appellant.
Additionally, the evidence of an alleged contract presented by Appellant “falls far
short of showing a meeting of the minds,” according to Collazo. We agree.
The record shows that MRC purchased a tract of land in Brown County in
1996. MRC subdivided the parcel into Block One and Block Two, separated by
Magnolia Street, which came to be known as the Greenbriar Addition in
Brownwood. James Ruth acquired Block One of the Greenbriar Addition from
MRC in 2010 by Special Warranty Deed. This deed, however, was not recorded
until after the tax foreclosure sale. In 2016, the Appraisal District received a
judgment against MRC, record owner of Block Two at the time, based on failure to
pay ad valorem taxes. This judgment pertained only to Block Two of the Greenbriar
Addition. Shortly after the judgment against MRC was issued, Block Two was sold
to Collazo, and Collazo received a Constable’s Deed.
10
It was not until September of 2016 that Appellant’s trial counsel contacted
Collazo to inform Collazo that the land that it had just purchased was actually owned
by Appellant and that Appellant wished to exercise his right of redemption to reclaim
the property. Collazo responded by letter dated October 7, 2016, requesting
Appellant’s proof of ownership of the tract Collazo purchased in the tax foreclosure
sale so that Collazo could confirm Appellant’s right of redemption. This letter also
stated that, “[s]ubject to [Collazo’s] confirmation of your right of redemption, please
be advised that the current amount necessary to redeem the property is $8,413.00.”
Appellant and Collazo continued their correspondence over the next few weeks.
Appellant sent Collazo a copy of the 2010 Special Warranty Deed, as well as a check
for $6,487.50, which was returned to Appellant because it, according to Collazo,
was the incorrect amount due on the redemption. However, the 2010 deed that
Appellant produced made no mention of Block Two—the property sold at the tax
foreclosure sale.
In addition to the 2010 Special Warranty Deed, Appellant also forwarded
Collazo a letter addressed to the appraisal district, written by MRC’s president, Gene
Bertcher. In this letter, Bertcher claimed to have conveyed any and all rights to his
property in Brown County to Appellant at the time of the 2010 transfer of title.
However, this letter itself is not a conveyance and cannot operate to retroactively
grant any ownership in Block Two to Appellant. We must look to the four corners
of the original 2010 deed to determine the interest obtained by Appellant. See
Piranha Partners v. Neuhoff, 596 S.W.3d 740, 743 (Tex. 2020). In doing so, it is
evident that the only interest Appellant obtained in writing by the Special Warranty
Deed of 2010 was title to Block One of the Greenbriar Addition, not Block Two.
Appellant’s claim of a right of redemption necessarily implies a claim of valid
ownership. Therefore, Appellant’s contention that Collazo’s letter of October 7,
2016, constituted an offer cannot be true given that Appellant actually owned no
11
interest in Block Two at the time of his letter to Collazo. There was no objectively
apparent “meeting of the minds” reflected in the documents when it came to this
alleged contract. Whether a contract exists is a matter of law to be determined by
the court, and we hold that the summary judgment evidence shows that no
enforceable contract was created between Appellant and Collazo. It is evident that
the parties were not talking about the same tract of land when corresponding.
Collazo was only required to negate one essential element of the cause of
action being asserted by Appellant. See Sci. Spectrum Inc., 941 S.W.2d at 911. We
conclude that there was no contract formed based on a lack of mutual assent, and
Appellant did not provide any evidence to the contrary. As a collateral matter, even
if oral terms of agreement could have been established, Appellant did not carry his
burden of showing that the statute of frauds had been satisfied or was not applicable.
Therefore, the trial court properly granted summary judgment in favor of Collazo.
This Court’s Ruling
We affirm the judgment of the trial court.
W. BRUCE WILLIAMS
JUSTICE
April 30, 2021
Panel consists of: Bailey, C.J.,
Trotter, J., and Williams, J.
12