State v. Joshua Hild ( 2011 )

NUMBER 13-08-00263-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI—EDINBURG
____________________________________________________
FEDERAL DEPOSIT INSURANCE CORPORATION
AS RECEIVER FOR WASHINGTON MUTUAL BANK, Appellant,
v.
DAVID MARION WHITE, Appellee.
On appeal from County Court at Law No. 1
of Dallas County, Texas
____________________________________________________
MEMORANDUM OPINION
Before Justices Benavides, Vela and Perkes
Memorandum Opinion by Justice Perkes
The Federal Deposit Insurance Corporation, as receiver for Washington Mutual
Bank (―Washington Mutual‖), appellant, appeals an adverse judgment for breach of
contract entered in favor of David Marion White, appellee. Washington Mutual also
appeals the trial court’s sua sponte order of dismissal for lack of jurisdiction of its abuse
of process counterclaim. We affirm the judgment of the trial court, in part, and reverse
and remand, in part.
I. BACKGROUND1
In 1997, White purchased his home at 7605 Lakecrest Circle, Irving, Texas,
obtaining a purchase money mortgage, which eventually was purchased by Washington
Mutual. Beginning in 2000, White fell in arrears on his mortgage note, and thereafter
never caught up with his arrearages. Foreclosure proceedings2 began in October 2000.
However, in accordance with parties’ settlement agreement,3 they were not completed
until October 5, 2004. The settlement agreement states, in relevant part:
White further agrees to leave the house at 7605 Lakecrest, Irving, Texas by not
later than October 25, 2004. White has already executed documents to permit
the issuance of a writ of execution on that date if he has not left the premises of
7605 Lakecrest as part of this settlement agreement.
On October 12, 2004, White returned to the home, and saw that his property had
been moved around in the house, and that items were missing. White encountered
Coldwell Banker’s agent Ray Jones taking pictures of White’s property. Jones informed
1
The case is before this Court on transfer from the Fifth Court of Appeals in Dallas pursuant to an
order issued by the Supreme Court of Texas. See TEX. GOV’T CODE ANN. §73.001(West 2005).
2
Fleet Mortgage Corporation owned the mortgage note when the foreclosure proceedings began.
Washington Mutual was the successor owner and completed the foreclosure. A special warranty deed,
dated November 5, 2004, transferred the property from Washington Mutual to Federal National Mortgage
Association (Fannie Mae).
3
After White’s last bankruptcy was dismissed, Washington Mutual noticed foreclosure on the
home for August 3, 2004. On the day set for foreclosure, White obtained a temporary restraining order
from a Dallas County Court at Law to stop the foreclosure. That lawsuit was settled at a mediation held
on September 21, 2004. The settlement agreement was executed by White on October 8, 2004, and by
Washington Mutual on October 20, 2004. The settlement agreement forms the basis of White’s breach of
contract claim.
2
White that Fannie Mae had taken possession of the home and that he was getting it
ready for re-sale. He also informed White that he had re-keyed the locks, and that he
did not have permission to give White a key at that time. Jones told him that he would
check with his supervisors about giving him access to the home so that White could
retrieve his belongings.4
After that encounter, White twice attempted to reach Jones about obtaining
access to the home. On October 26, 2004, Jones finally returned White’s call and
informed him that he could pick up a key to the house. When White went to obtain the
key at Jones’ office, Jones agreed to allow White to have the key until October 29,
2004. On the morning of October 29, White went to the house to begin moving his
property. Upon arrival, he saw a Constable’s notice posted on the door, stating that
White was to appear in the Justice of the Peace Court on November 4, 2004, to answer
to the forcible entry and detainer of the home. This notice led White to believe he had
until November 4 to move out of the premises.
On November 1, 2004, White returned to move his property out of the home.
Upon arrival, White saw some of his property sitting in the driveway. He then realized
that his property had been set out sometime on Friday, October 29, 2004, as a result of
the agreed writ of execution. By the time he arrived, a great portion of his property was
already missing.
White sued Washington Mutual and Coldwell Banker, claiming breach of
contract, conversion, invasion of privacy, contort (breach of tort duty), negligence, gross
4
On October 12, 2004, White was not living in the house; however, many of his belongings still
remained in the premises.
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negligence, and common law fraud. White claimed Washington Mutual breached the
settlement agreement by barring access to the house prior to October 25, 2004, which
was the date he agreed to vacate the home pursuant to the settlement agreement.
Washington Mutual brought a counterclaim against White alleging abuse of
process. Washington Mutual asserted that White’s pursuance of several bankruptcies
and state court proceedings unreasonably delayed the foreclosure. Washington Mutual
also asserted the affirmative defense of set-off. The trial court sua sponte entered an
order dismissing Washington Mutual’s abuse of process counterclaim for lack of
jurisdiction. The order, however, does not mention the affirmative defense of set-off
being asserted by Washington Mutual.
The jury found that Washington Mutual and White agreed Washington Mutual
would allow, and Washington Mutual had the obligation to permit, White the right to go
in and out of the premises, and that he would leave the house no later than October 25,
2004. Although the jury found that both Washington Mutual and White failed to comply
with the agreement, they further found Washington failed to comply first, and awarded
White $100 for sentimental value. The jury also found that Washington Mutual had an
obligation to inform Coldwell Banker that White had a right to go in and out of the
premises, and was to leave the house by no later than October 25, 2004. The jury
found that Washington Mutual Mutual failed to perform its duty, and awarded White
$5,000 for market value, and $1,250 for sentimental value. 5 The jury found that a
5
The jury also found that Coldwell Banker was not acting with the authority or apparent authority
of Washington Mutual ―at the time and on the occasion in question,‖ and that Coldwell Banker, and not
Washington Mutual, converted White’s personal property. The jury awarded White $5,000 from Coldwell
Banker for market value, and $1,250 for sentimental value. Based upon the jury’s verdict, the trial court
entered judgment against Coldwell Banker in the sum of $6,250 for actual damages. Coldwell Banker did
not appeal the trial court’s judgment.
4
reasonable attorney’s fee would be the sum of $25,000 for preparation and trial. Based
upon the jury’s verdict, the trial court entered judgment against Washington Mutual in
the sum of $100 for actual damages and $25,000 for attorney’s fees.
II. ISSUES PRESENTED
By five issues, Washington Mutual argues that: (1) the trial court erred by
dismissing Washington Mutual’s counterclaim and set off against White, sua sponte, on
jurisdictional grounds; (2) the trial court erred by allowing the jury to return a verdict for
damages caused by the lawful execution of an agreed writ of possession; (3) the trial
court erred by failing to dismiss the judgment against Washington Mutual after Coldwell
Banker paid the judgment in full; (4) the trial court erred by allowing the jury to award
damages for breach of obligations which did not appear in a contract which contained a
merger clause; and (5) the trial court showed bias against Washington Mutual and its
counsel and should not be permitted to preside at any retrial.
III. DISMISSAL OF WASHINGTON MUTUAL’S COUNTERCLAIM
In its first issue, Washington Mutual argues that the trial court erred by
dismissing, sua sponte, on jurisdictional grounds, Washington Mutual’s counterclaim
and set off against White. Washington Mutual filed a counterclaim against White for
abuse of process and an affirmative defense of set-off, alleging that White’s abusive
bankruptcy and state court litigation resulted in a four-year delay in foreclosure, thereby
causing financial damages.6
6
The trial court’s sua sponte order of dismissal was signed on January 23, 2007, and makes no
mention of Washington Mutual’s set-off defense. The record before us indicates that no motions were
5
A. Standard of Review
Whether a court has subject-matter jurisdiction is a question of law, subject to de
novo review. Graber v. Fuqua, 279 S.W.3d 608, 631 (Tex. 2009); Tex. Dep't of Parks &
Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex. 2004); Mayhew v. Town of Sunnyvale,
964 S.W.2d 922, 928 (Tex. 1998), cert. denied, 526 U.S. 1144 (1999). When reviewing
a trial court order dismissing a cause for want of jurisdiction, Texas appellate courts
construe the pleadings in the plaintiff's favor and look to the pleader's intent. County of
Cameron v. Brown, 80 S.W.3d 549, 555 (Tex.2002); Cont'l Cas. Ins. Co. v. Functional
Restoration Assocs., 19 S.W.3d 393, 404 (Tex.2000). The court must presume in favor
of the jurisdiction unless lack of jurisdiction affirmatively appears on the face of the
petition. Peek v. Equip. Serv. Co. of San Antonio, 779 S.W.2d 802, 804–05 (Tex.
1989); Smith v. Texas Improvement Co., 570 S.W.2d 90, 92 (Tex. Civ. App.—Dallas
1978, no writ). Subject-matter jurisdiction is fundamental and may be raised for the first
time on appeal. Tex. Assoc. of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 445 (Tex.
1993). If a claim is not within a court’s jurisdiction, and the impediment to jurisdiction
cannot be removed, then it must be dismissed. Am. Motorists, Ins. Co. v. Fodge, 63
S.W.3d 801, 805 (Tex. 2001).
B. Analysis
Washington Mutual relies on Fuqua v. Graber for its position that federal
bankruptcy law does not preempt the trial court from hearing its claim for abuse of
process. See Fuqua v. Graber, 158 S.W.3d 635, 639 (Tex. App.—Corpus Christi 2005)
aff'd, 279 S.W.3d 608 (Tex. 2009). Federal preemption of state law causes of action is
filed with the trial court seeking the counterclaim’s dismissal for want of jurisdiction, and no hearing was
held regarding this action. The record contains no explanation or rational for the trial court’s order.
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appropriate if Congress expressly legislates such preemption or if Congressional intent
can be implied from the federal legislation. See English v. Gen. Elec. Co., 496 U.S. 72,
78–79 (1990). If Congress has legislated comprehensively and occupied an entire field
of regulation, leaving no room for supplemental state regulation, preemption is implied.
See id. at 79; see also Crosby v. Nat'l Foreign Trade Council, 530 U.S. 363, 372
(2000). State law is also preempted to the extent it actually conflicts with federal law or
interferes with the accomplishment and execution of Congressional objectives. Fuqua,
158 S.W.3d at 639.
Although Congress has given the federal district courts original and exclusive
jurisdiction of all cases under the Bankruptcy Code, Title 11 of the United States Code,
the district courts do not have exclusive jurisdiction of all civil proceedings arising under
Title 11 or arising in or related to cases under Title 11 (emphasis added). See 28
U.S.C.A. §§ 1334(a), (b) (West 2004); see also In re Brady, Mun. Gas Corp. v. City of
Brady, 936 F.2d 212, 218 (5th Cir. 1991); In re Epstein, 315 B.R. 591, 598–88 (Bankr.
S.D. Tex 2004). Thus, the district courts and their bankruptcy units have exclusive
jurisdiction only over the bankruptcy petition itself. See In re Wood, 825 F.2d 90, 92
(5th Cir. 1987). In other matters ―arising in‖ or ―related to‖ Title 11 cases, unless the
bankruptcy code provides otherwise, state courts have concurrent jurisdiction. See In
re Brady, 936 F.2d at 218; In re Epstein, 314 B.R. 591 at 599-600.
In its counterclaim, Washington Mutual complains that White abused bankruptcy
court and state court process, most notably automatic bankruptcy stays and state court
restraining orders, as a pattern and practice, so as to wrongfully remain a resident in the
home for more than four years. Washington Mutual asserts that, during that time period,
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White was unable to pay his mortgage payment, insurance premiums, and real estate
taxes. In this regard, a bankruptcy order, dated May 5, 2004, dismissed the most recent
bankruptcy case with prejudice to re-filing for 180-days, and without discharging the
creditors. White filed the instant lawsuit in 2005, and Washington Mutual filed its
counterclaim in 2006.7 As such, Washington Mutual’s state law claim for abuse of
process did not interfere with the bankruptcy court’s jurisdiction. Washington Mutual’s
claim for abuse of process constitutes a matter ―related to‖ White’s bankruptcy cases.
Therefore, the trial court’s jurisdiction is not precluded as to Washington Mutual’s
counterclaim. See 28 U.S.C.A. §§ 1334(a), (b) (West 2004); In re Brady, 936 F.2d at
218.
With respect to Washington Mutual’s claim that the trial court erred in dismissing
its affirmative defense of setoff, we note that the trial court’s order does not mention this
affirmative defense, and that no such argument and ruling was made in the trial court.
We further note that Washington Mutual does not develop this argument with thorough
discussion or analysis in its brief. Without further discussion and citations to the record
or authority, we conclude Washington Mutual has inadequately briefed this argument
and has waived it. See TEX. R. APP. P. 38.1(i).
We hold that the trial court had jurisdiction over Washington Mutual’s abuse of
process counterclaim.8 We sustain the portion of Washington Mutual’s first issue that
7
White’s Original Petition and Application for Temporary Restraining Order, which resulted in the
settlement agreement, was filed on October 8, 2004. Washington Mutual contends that this application
for temporary restraining order was also an abuse of process.
8
We express no opinion regarding the viability of Washington Mutual’s counterclaim. The
settlement agreement contains a merger clause which states the agreement includes ―the entire
agreement between the parties.‖ In addition, the settlement agreement states:
8
pertains to Washington Mutual’s counterclaim. We overrule the portion of Washington
Mutual’s first issue that pertains to set-off.
IV. DAMAGES FOR LAWFUL EXECUTION OF A WRIT OF POSSESSION
In its second issue, Washington Mutual argues that the trial court erred in
allowing the jury to return a verdict for damages caused by the lawful execution of an
agreed writ of possession. Washington Mutual cites Campos v. Investment
Management Properties, 917 S.W.2d 351 (Tex. App.—San Antonio 1996, writ denied),
as support for its position that damages are not allowed if a writ of possession is
executed lawfully.
In Campos, the tenant filed suit for conversion and negligence against the
landlord based on the landlord’s action in executing a writ of possession. The tenant’s
property was placed on the front lawn. Soon after, it began to sleet and snow, which
damaged the tenant’s property. The appellate court affirmed the trial court’s grant of
summary judgment to the landlord, holding that the landlord had placed the property on
the front lawn pursuant to a valid writ of possession and had no duty to care for property
once it was removed from the premises. Campos, 917 S.W.2d at 355.
Campos is distinguishable from the present case. In this case, Washington
Mutual and White executed a settlement agreement which controlled the rights and
The parties warrant that they have read this agreement and have conferred with their
respective attorneys where that has been necessary and understand that this is a
compromise and settlement agreement and will settle all claims between the parties
arising out of any matters between them, save only any claims arising out of the
breach of this agreement, and that they enter into this agreement of their own free will
without reliance on any representations not contained herein.
(Emphasis added).
9
obligations of the parties. Pursuant to the settlement agreement, White had until
October 25, 2004 to remove his property from the house, at which time an agreed writ
of possession was to occur. Washington Mutual, however, effectively ―locked out‖
White from the home from October 12 through October 26, and White was unable to
remove his property. The act of depriving White access to the home until October 26
formed the basis of White’s breach of contact cause of action, whereas the act of
executing a valid writ of possession was the basis of the cause of action in Campos.
Therefore, the trial court did not err in allowing the jury to return a verdict for damages.
We overrule Washington Mutual’s second issue.
V. DOUBLE RECOVERY
In its third issue, Washington Mutual argues that the trial court erred when it
failed to dismiss the judgment against it after Coldwell Banker paid its portion of the
judgment. Washington Mutual asserts that when White accepted payment in full from
Coldwell Banker, he elected his remedy, and permitting White to further recover would
result in a double recovery and violate the one-satisfaction rule.
Pursuant to Texas Rules of Civil Procedure, Rule 48, a party may plead "as
many separate claims or defenses as he has regardless of consistency." The "one
satisfaction rule" provides that a plaintiff cannot obtain more than one recovery for the
same injury. Waite Hill Servs., Inc. v. World Class Metal Works, Inc., 959 S.W.2d 182,
184–85 (Tex.1998); Borden v. Guerra, 860 S.W.2d 515, 528 (Tex. Civ. App.—Corpus
Christi 1993, writ dism’d by agr.) (citing Stewart Title Guar. Co. v. Sterling, 822 S.W.2d
1, 7 (Tex. 1991)). This rule is based on the principle that, with only one injury, "there
can, in justice, be but one satisfaction for that injury." Id. When a plaintiff pleads
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alternate theories of liability, a judgment that awards damages based upon both
theories does not amount to a double recovery if the theories of liability arise from two
separate and distinct injuries, and there has been a separate and distinct finding of
damage on both theories of liability. Birchfield v. Texarkana Mem’l Hosp., 747 S.W.2d
361, 367 (Tex. 1987); Berry Prop. Mgmt, Inc. v. Bliskey, 850 S.W.2d 644, 664–66 (Tex.
App.—Corpus Christi 1993, writ dism’d by agr.).
An impermissible double recovery occurs when there is only one injury, the
theories of liability are mutually exclusive, or there are no separate damages findings
based on the alternate theories of liability. See Southern Cty. Mut. v. First Bank &
Trust, 750 S.W.2d 170, 173–174 (Tex. 1988); Birchfield, 747 S.W.2d at 367. When
confronted with a situation of double recovery, the affirmative defense of ―election of
remedies,‖ under certain circumstances, bars a person from pursuing two inconsistent
remedies. See generally Bocanegra v. Aetna Life Ins. Co., 605 S.W.2d 848, 850–52
(Tex. 1980).9 The Bocanegra court articulated the following test for the election doctrine
to bar relief: (1) one successfully exercises an informed choice; (2) between two or
more remedies, rights, or states of facts; (3) which are so inconsistent as to; (4)
constitute manifest injustice. Id.; Medina, 927 S.W.2d at 600.
White filed suit seeking damages from Washington Mutual and Coldwell Banker
on alternative theories for breach of contract and conversion. The jury awarded White
$100.00 in ―sentimental value‖ damages and $25,000 in attorney’s fees for Washington
Mutual’s breach of the settlement agreement, which was caused by its failure to permit
9
The widely criticized doctrine of election of remedies which combines elements of estoppel,
ratification, and unjust enrichment (Bocanegra v. Aetna Life Ins. Co., 605 S.W.2d 848, 851 (Tex. 1980)
survives in several branches of the law to prohibit inconsistent legal positions that may produce manifest
injustice. Bocanegra, 605 S.W.2d at 850; see also Medina v. Herrera, 927 S.W.2d 597, 600 (Tex. 1996).
11
White to timely enter the home to remove his belongings. The jury also awarded White
$5,000.00 in ―market value‖ damages and $1,250.00 in ―sentimental value‖ damages for
Coldwell Banker’s conversion of White’s property.
We hold that the damages awarded to White constitute two separate and distinct
injuries, with separate and distinct findings of damages on different theories of liability.
See Birchfield, 747 S.W.2d at 367. Further, White’s damages are not so inconsistent as
to constitute a manifest injustice. See Bocanegra, 605 S.W.2d at 850. We overrule
Washington Mutual’s third issue.
VI. PERMISSIBILITY OF THE BREACH OF CONTRACT ISSUE
In its fourth issue, Washington Mutual argues that the jury should not have been
permitted to consider a breach of contract issue because the settlement agreement did
not include any provision that obliged it to secure the right of ingress and egress to
White or any provision that obligated Washington Mutual to notify Coldwell Banker that
White had the right to remain in the property until October 25, 2004. Washington
Mutual also argues that the comprehensive merger clause provision contained within
the settlement agreement prevents the consideration of any duty or obligation by
Washington Mutual that is not expressly set out in the contract.
Error in the charge is reviewed under an abuse of discretion standard. Texas
Dept. of Human Serv. v. E.B., 802 S.W.2d 647, 649 (Tex.1990). To establish reversible
error, the complaining party must show the trial court acted arbitrarily, unreasonably, or
without consideration of guiding rules and principles. Downer v. Aquamarine Operators
Inc., 701 S.W.2d 238, 241–42 (Tex.1985), cert. denied, 476 U.S. 1159 (1986). ―[A] clear
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failure by the trial court to analyze or apply the law correctly will constitute an abuse of
discretion....‖ Walker v. Packer, 827 S.W.2d 833, 840 (Tex.1992).
Generally, a written instrument presumes that all prior agreements relating to the
transaction have been merged into it and it will be enforced as written and cannot be
added to, varied, or contradicted by parol testimony. See Baroid Equip., Inc. v. Odeco
Drilling, Inc., 184 S.W.3d 1, 13 (Tex. App.—Houston [1st Dist.] 2005, pet. denied);
Wilkins v. Bain, 615 S.W.2d 314, 315 (Tex. Civ. App.—Dallas 1981, no writ). This rule
is particularly applicable where the written contract contains a recital that it contains the
entire agreement between the parties or a similarly worded merger provision. See
Weinacht v. Phillips Coal Co., 673 S.W.2d 677, 679 (Tex. App.—Dallas 1984, no writ).
However, in case of an incomplete instrument, an exception to the parol evidence rule
applies, even though fraud, accident, or mistake is not shown. Robertson, Inc. v.
Webster, 679 S.W.2d 683, 688 (Tex. App.—Houston [1st Dist.] 1984, no writ)
(concluding oral agreement regarding time of delivery of pickup truck to customer was
not inconsistent with terms of agreement between car dealer and customer, for
purposes of determining whether dealer's false representations regarding the delivery
date were actionable under the Deceptive Trade Practices - Consumer Protection Act,
notwithstanding the presence of a merger clause in the sales order form, where the
instrument itself referred to ―delivery‖ numerous times and yet contained no delivery
date).
A duty to cooperate is implied in every contract in which cooperation is necessary
for performance of the contract. This implied duty requires that a party to a contract
may not hinder, prevent, or interfere with another party's ability to perform its duties
13
under the contract. Case Corp. v. Hi-Class Bus. Sys. of Am., Inc., 184 S.W.3d 760, 770
(Tex. App.--Dallas 2005, pet. denied); Bank One, Tex., N.A. v. Stewart, 967 S.W.2d
419, 435 (Tex. App.—Houston [14th Dist.] 1998, pet. denied); Hallmark v. Hand, 833
S.W.2d 603, 610 (Tex. App.—Corpus Christi 1992, writ denied). Additionally, when one
party to a contract, by wrongful means, prevents the other party from performing, such
an action by the party at fault constitutes a breach of contract. The effect of such a
breach is not only to excuse performance by the injured party, but also to entitle it to
recover for any damage it may sustain by reason of the breach. Smith v. Lipscomb, 13
Tex. 532, 538 (1855); Arceneaux v. Price, 468 S.W.2d 473, 474 (Tex. Civ. App.—Austin
1971, no writ); S.K.Y. Inv. Corp. v. H. E. Butt Grocery Co., 440 S.W.2d 885, 889–90
(Tex. Civ. App.—Corpus Christi 1969, no writ).
The settlement agreement expressly allowed White to remain in the home until
October 25, 2004. Washington Mutual had a contractual duty and an implied duty to not
hinder, prevent, or interfere with White’s possession of the home and his ability to
remove his property from the home during the stated time period. It would be
inconsistent with the settlement agreement and its merger clause to infer that
Washington Mutual did not have an obligation to give White the right of ingress and
egress to the house until said date.
We hold that the trial court did not abuse of discretion by submitting the issue of
breach of contract to the jury. We overrule Washington Mutual’s fourth issue.
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VII. Was the Trial Judge Biased?
In its fifth issue, appellant argues that this case should be remanded for retrial
before another judge because of the trial court’s bias against Washington Mutual and in
favor of White.
The Texas Supreme Court has held that objections to a trial court's alleged
improper conduct or comment must be made when it occurs if a party is to preserve
error for appellate review, unless the conduct or comment cannot be rendered harmless
by proper instruction. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001);
State v. Wilemon, 393 S.W.2d 816, 818 (Tex.1965). Washington Mutual has failed to
indicate where this issue has been preserved for appeal, and has not explained how
any comments or rulings made by the trial judge were incurable or would excuse
appellant’s failure to preserve error. Washington Mutual has waived this issue. We
overrule Washington Mutual’s fifth issue.
VIII. CONCLUSION
Having partially sustained appellant’s first issue, we reverse the trial court’s
judgment dismissing appellant’s counterclaim for abuse of process. We remand this
portion of the case to the trial court for proceedings consistent with this opinion. We
affirm the remainder of the trial court’s judgment.
__________________________________
Gregory T. Perkes
Justice
Delivered and filed the
20th day of October, 2011.
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