Deutsche Bank National Trust Company, as Indenture Trustee for New Century Home Loan Trust 2006-2 v. Stockdick Land Company , 367 S.W.3d 308 ( 2012 )

Appellee’s Motion for Rehearing Granted; Affirmed; Opinion of February 3, 2011,
Withdrawn, and Majority and Dissenting Opinions on Rehearing filed February 28,
2012.
In The
Fourteenth Court of Appeals
NO. 14-09-00617-CV
DEUTSCHE BANK NATIONAL TRUST COMPANY, AS INDENTURE
TRUSTEE FOR NEW CENTURY HOME LOAN TRUST 2006-2, Appellant
V.
STOCKDICK LAND COMPANY, Appellee
On Appeal from the 215th District Court
Harris County, Texas
Trial Court Cause No. 2008-60974
DISSENTING OPINION ON REHEARING
A residential real property lien was extinguished by a sale of the property to
satisfy a property-tax lien. After the tax sale, the former owners sought to redeem the
property under section 34.21 of the Texas Tax Code, which governs redemption of real
property sold at a tax sale. The holder of the extinguished lien brought a declaratory-
judgment suit against the tax-sale purchaser, arguing that the former owners had
redeemed the property and, in the alternative, that the purchaser was precluded under the
doctrine of quasi-estoppel from denying that the former owners had redeemed the
property. The prerequisites of Texas Tax Code section 34.21 were not satisfied, but the
trial court erred in granting the purchaser’s summary-judgment motion because of fact
issues regarding quasi-estoppel. In concluding that the trial court properly granted
summary judgment, the majority contradicts binding precedent regarding (1) what a
nonmovant must do to raise an affirmative defense in response to a traditional summary-
judgment motion and (2) the meaning of certain language in the quitclaim deed executed
by the tax-sale purchaser. Rather than affirm, this court should reverse and remand.
FACTUAL AND PROCEDURAL BACKGROUND
The residential real property in question is located on Yoakum Boulevard in
Houston, Texas (the “Property”). Gordon Wittenberg and his wife Susan Wittenberg
constructed a residence on the Property in 2003, when title to the Property was held by
Tribus, Inc. Tribus did not pay all of the property tax due on the Property for 2004, and
in 2005 the taxing authorities filed a collection suit against Tribus and Frost National
Bank, the holder of the mortgage, seeking to collect the taxes and foreclose the tax lien.
On behalf of Tribus, Gordon Wittenberg acknowledged that the taxes were past due and
stated that Tribus planned to pay the delinquent taxes under a payment plan.
On May 25, 2006, Tribus conveyed to Susan Wittenberg title to the Property. At
the same time, the Wittenbergs1 refinanced the existing mortgage indebtedness on the
Property, which had been held by Frost National Bank. The new indebtedness took the
form of a promissory note in the principal amount of $650,000 payable to New Century
Mortgage Corporation, secured by a deed-of-trust lien filed for record on June 9, 2006
(the “Bank’s Lien”). New Century later assigned this indebtedness and lien to
plaintiff/appellant Deutsche Bank National Trust Company, as Indenture Trustee for New
Century Home Loan Trust 2006-2 (the “Bank”). Shortly after the closing of the
refinancing transaction, most of the property taxes on the Property for 2004 and 2005
1
Though Tribus conveyed title to the Property to Susan Wittenberg only, for various reasons, perhaps
including community-property issues, both Wittenbergs are included as parties to various documents.
Therefore, the Wittenbergs are referred to in this opinion as if both were owners of the Property, even
though Gordon Wittenberg was not a record owner.
2
were paid. Despite these payments, approximately $4,600 in taxes due to the Houston
Independent School District for 2005 were not paid. Based on these unpaid taxes, the
trial court in the tax suit (the “Tax Court”) rendered a final judgment in February 2007,
for these taxes plus penalties and interest, for a total amount of $6,847.63. The Tax Court
also ordered foreclosure of the tax lien on the Property and sale of the Property, which
the Tax Court determined had a market value of $659,100 on the date of trial in January
2007.2 Other than the taxing authorities, the only parties to this judgment were Tribus
and Frost National Bank.
The tax sale occurred on June 5, 2007, and appellee/defendant Stockdick Land
Company (“Stockdick”) purchased the Property at this sale for $370,000 in cash. Out of
these proceeds from the tax sale, the 2005 taxes that were the basis of the judgment were
paid, and the 2006 property taxes on the Property also were paid. After these payments,
$335,767.52 of the proceeds from the tax sale remained (the “Remaining Proceeds”).
The Tax Court ordered these proceeds disbursed to Tribus.
In December 2007, Stockdick signed a deed (the “Deed”) stating as follows:
[Stockdick] . . . for and in consideration of $462,500 consisting of cash in
the amount of $370,000 and one promissory note in the principal sum of
$92,500 payable to the order of [Stockdick], bearing interest at the rate
therein provided, said note . . . being secured by vendor’s lien and
superior title retained herein in favor of [Stockdick], and being also
secured by Deed of Trust of even date from Grantee to Wade A. Riner,
Trustee, the receipt and sufficiency of which is hereby acknowledged and
confessed, does hereby sell, transfer, and deliver unto Gordon Wittenberg
and wife, Susan Wittenberg whose address is [address of the Property]
(hereinafter referred to as “Grantee”), all of Grantor’s right, title, and
interest in [the Property]. This deed is made without warranty, express or
implied, and is executed pursuant to redemption of the Property by
Grantee from that certain tax sale conducted on or about June 5, 2007
under Cause No. 2005-74535 styled, Harris County, et al. v. Tribus, Inc., et
al., 80th Judicial District Court, Harris County, Texas.
(emphasis added). The Deed and the deed of trust mentioned therein were filed for
2
A trial court rendering judgment in a suit for foreclosure of a tax lien on property is required to make
such a finding in its judgment. See TEX. TAX CODE ANN. § 33.50 (West 2012).
3
record on December 10, 2007. The promissory note mentioned in the Deed was executed
by the Wittenbergs in the original principal amount of $92,500, with an interest rate of
ten percent per year (the “Note”). The Note and deed of trust were signed two days
before the Deed was signed. On July 31, 2008, all principal and interest ($98,582.19)
was due under the Note. The Wittenbergs did not pay the amounts due under the Note.
David Petroni of Carrington Mortgage Services, LLC sent a letter to Stockdick
on September 23, 2008, stating his understanding that Stockdick had purchased the
Property at a tax sale in June 2007 and had obtained a deed for the Property. Petroni
stated that Carrington had an active loan on the Property and desired to regain possession
of the Property. Petroni requested that Stockdick provide a redemption quote. Stockdick
informed Petroni that the payoff amount was $113,777.54, based upon the past-due
amount owing under the Note. Neither Carrington nor the Bank made any payment to
Stockdick.
Less than a month later, on October 15, 2008, the Bank filed this declaratory-
judgment suit in the trial court below. Stockdick proceeded with a non-judicial
foreclosure sale of the Property on November 4, 2008. Stockdick purchased the Property
at this sale for $50,000, and the trustee’s deed reflecting this sale was filed for record on
November 11, 2008.
In its declaratory-judgment suit, the Bank alleged that the Wittenbergs exercised
their statutory right to redeem the Property and that this redemption resulted in the Deed.
According to the Bank, as a result of this redemption, the Bank’s Lien was reinstated as a
valid and subsisting mortgage against the Property, and this lien was senior and superior
to Stockdick’s deed-of-trust lien (“Stockdick’s Lien”). The Bank asserted that Stockdick
is estopped from denying that the Deed effected a redemption of the Property. The Bank
sought declaratory relief regarding the relative lien priorities of the Bank’s Lien and
Stockdick’s Lien. Among other things, the Bank sought declarations that (1) the
Wittenbergs redeemed the Property after the tax sale, thus reinstating the Bank’s Lien as
a valid lien on the Property, (2) the Bank’s Lien is senior and superior to Stockdick’s
Lien, and (3) any foreclosure of Stockdick’s Lien has no effect on the validity, seniority,
4
or priority of the Bank’s Lien. The Bank also requested reasonable and necessary
attorney’s fees under section 37.009 of the Texas Civil Practice and Remedies Code.
The Bank filed a traditional motion for summary judgment on all of its claims for
declaratory relief. Stockdick filed a traditional motion for summary judgment, asserting
the following grounds:
(1) The Wittenbergs did not redeem the Property because they did not
comply or substantially comply with the requirement that they pay
Stockdick $92,500 in cash, which was the twenty-five percent premium
required by section 34.21 of the Tax Code.3
(2) Stockdick maintained its superior title to the Property by reserving a
vendor’s lien to secure payment of the Note.
(3) The Bank waived its contention that the Wittenbergs redeemed the
Property.
(4) The Bank may not assert its claims under the Declaratory Judgments
Act; rather, this action is really a trespass-to-try-title action.
The trial court granted Stockdick’s motion, denied the Bank’s motion, and rendered
judgment that the Bank take nothing.
While the trial court still had plenary power over this case, the court granted the
Bank leave to supplement its petition to add new claims based in part upon the following
allegations:
The constable sold the Property to Stockdick at the tax sale for $370,000. After
satisfying the judgment and costs relating to the sale, the constable returned the
excess proceeds to the district clerk. New Century received no notice of the
existence of these proceeds.
Attorney Stephen Riner filed a motion on behalf of Tribus, asserting that the
Remaining Proceeds belonged to Tribus as the former owner of the Property. In
this motion Tribus asked the Tax Court to order the district clerk to disburse the
Remaining Proceeds to Tribus. This motion was served upon Frost National Bank
but not upon New Century. Riner later served as Stockdick’s attorney of record in
the case under review.
3
Unless otherwise expressly stated, all statutory references in this opinion are to the Texas Tax Code.
5
On September 17, 2007, the Tax Court granted Tribus’s motion and ordered the
district clerk to disburse the Remaining Proceeds to Riner as attorney for Tribus.
The Remaining Proceeds were transferred to Stockdick and used by the
Wittenbergs as part of the consideration for the Deed.
At the time of the proceedings in the Tax Court regarding disbursement of the
Remaining Proceeds, New Century was a lienholder. Therefore, under the Texas
Tax Code, New Century had a higher priority of right than Tribus to the
Remaining Proceeds.
New Century received no notice of the proceedings that led to the disbursement of
the Remaining Proceeds.4
The Bank sought recovery of the Remaining Proceeds from Stockdick. The Bank alleged
Stockdick wrongfully had obtained the Remaining Proceeds from the Tax Court’s
registry. The Bank also sought (1) a declaration that it held a superior right to the
Remaining Proceeds, (2) a money judgment against Stockdick based upon claims for
money had and received, unjust enrichment, and conversion, and (3) a constructive trust.
The Bank alleged that these claims had become ripe only after the trial court granted
Stockdick’s summary-judgment motion and denied the Bank’s motion. The Bank
expressly stated that, by asserting the claims in its supplemental petition, it was not
waiving any of its prior claims in the case under review. Stockdick asserted that the
Bank’s claims regarding the Remaining Proceeds constituted an improper collateral
attack on the Tax Court’s final September 17, 2007 order under section 34.04, from
which no appeal was taken.5
4
The Bank asserts that, though New Century was aware of the tax suit against Tribus and Frost National
Bank, New Century was operating under the premise that the unpaid taxes had been paid in full so that the
tax suit would be dismissed. New Century was not a party in the tax suit, though New Century could
have intervened in that suit.
5
Under section 34.04, entitled “Claims for Excess Proceeds,” within two years of the tax sale, a person
may file a petition in the court that ordered the tax sale, setting forth a claim to the excess proceeds. See
TEX. TAX CODE ANN. § 34.04(a) (West 2012). According to this statute, the petitioner is required to
serve the petition only on the parties in the underlying tax suit. See id. § 34.04(b). The trial court shall
order that the proceeds be paid according to the priorities set forth in section 34.04(c) to each party that
establishes its claim to the proceeds. See id. § 34.04(c). This order is appealable. See id. § 34.04(e).
6
Acting upon Stockdick’s motion, the trial court later severed the claims in the
Bank’s supplemental petition into a separate case and transferred that case to the Tax
Court, thus creating a final and appealable judgment in the case under review. On appeal,
the Bank asserts various arguments under issues in which it assigns error regarding the
trial court’s grant of Stockdick’s summary-judgment motion and denial of the Bank’s
summary-judgment motion.
ANALYSIS
The Bank is not estopped from bringing this appeal.
Stockdick asserts that the Bank “should be estopped from bringing this appeal”
because the Bank is pursuing a claim to the Remaining Proceeds. Stockdick cites no
authority for this proposition. The Bank pleaded its claims regarding the Remaining
Proceeds as alternative claims that it asserted in the event that the Bank’s other claims
failed. Parties are allowed to plead inconsistent claims in the alternative. See TEX. R.
CIV. P. 48 (stating that “[a] party may set forth two or more statements of a claim or
defense alternatively or hypothetically . . . [a] party may also state as many separate
claims or defenses as he has regardless of consistency”); Bocanegra v. Aetna Life Ins.
Co., 605 S.W.2d 848, 851–52 (Tex. 1980) (stating that parties may plead inconsistent
claims in the alternative); Horizon Offshore Contractors, Inc. v. Aon Risk Servs. of Tex.,
Inc., 283 S.W.3d 53, 59–60 (Tex. App.—Houston [14th Dist.] 2009, pet. denied) (noting
that a party may assert inconsistent claims in a single suit but that a party who
successfully pursues a claim in one suit under certain circumstances may be barred from
asserting an inconsistent claim in a second suit). The Bank made it clear that its claims
regarding the Remaining Proceeds were asserted subject to and without waiving its
declaratory-judgment claims. Under these circumstances, the Bank is not estopped from
bringing this appeal based upon its claims regarding the Remaining Proceeds.
Under Tax Code section 34.21(a), an owner may not provide a promissory note to
the purchaser to satisfy the requirement of “paying” the redemption premium.
The Bank asserts that the Wittenbergs redeemed the Property under section
7
34.21(a) in December 2007. See TEX. TAX CODE ANN. § 34.21(a) (West 2012).
Stockdick asserts that there was no redemption because the Wittenbergs provided a
promissory note for the redemption premium, which Stockdick asserts does not constitute
“paying” the redemption premium, as required by section 34.21(a). See id. To resolve
this question, the court must interpret the word “paying” as used in section 34.21(a).6
In construing a statute, this court’s objective is to determine and give effect to the
Legislature’s intent. See Nat’l Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527 (Tex.
2000). If possible, the court must ascertain that intent from the language the Legislature
used in the statute and not look to extraneous matters for an intent the statute does not
state. Id. If the meaning of the statutory language is unambiguous, this court should
adopt the interpretation supported by the plain meaning of the provision’s words. St.
Luke’s Episcopal Hosp. v. Agbor, 952 S.W.2d 503, 505 (Tex. 1997). This court must
yield to the plain sense of the words the Legislature chose, rather than engage in forced or
strained construction. See id.
In pertinent part, Tax Code section 34.21, entitled “Right of Redemption,”
provides as follows:
(a) The owner of real property sold at a tax sale to a purchaser other than a
taxing unit that was used as the residence homestead of the owner . . . may
redeem the property on or before the second anniversary of the date on
which the purchaser’s deed is filed for record by paying the purchaser the
amount the purchaser bid for the property . . . plus a redemption premium
of 25 percent of the aggregate total if the property is redeemed during the
first year of the redemption period. . . .
...
(f) The owner of real property sold at a tax sale may redeem the real
property by paying the required amount as prescribed by this section to the
assessor-collector for the county in which the property was sold, if the
owner of the real property makes an affidavit stating:
(1) that the period in which the owner’s right of redemption must be
exercised has not expired; and
6
Section 34.21(a) gives a right of redemption also provided in article 8, section 13 of the Texas
Constitution. See TEX. CONST. art. 8, § 13. The relevant language is substantially similar and, on appeal,
the Bank has not referred to the constitutional right of redemption.
8
(2) . . . that the owner and the purchaser cannot agree on the amount
of redemption money due, or that the purchaser refuses to give the owner a
quitclaim deed to the property.
(f-1) An assessor-collector who receives an affidavit and payment under
Subsection (f) shall accept that the assertions set out in the affidavit are true
and correct. The assessor-collector receiving the payment shall give the
owner a signed receipt witnessed by two persons. The receipt, when
recorded, is notice to all persons that the property described has been
redeemed. The assessor-collector shall on demand pay the money received
by the assessor-collector to the purchaser.7
TEX. TAX CODE ANN. § 34.21 (West 2012) (emphasis added). The parties have not cited
and research has not revealed any cases addressing (1) the meaning that should be given
to the terms “paying” or “pay” in this statute or (2) whether providing a promissory note
to the purchaser constitutes “paying” within the meaning of this statute. The statute does
not contain definitions of either “paying” or “pay,” so these terms must be construed
based on their ordinary meaning. See City of San Antonio v. Hartman, 201 S.W.3d 667,
672 n.19 (Tex. 2006). But, the infinitive “to pay” has various meanings in ordinary
usage, including both to give money to another and to give to another what is due. See
WEBSTER’S THIRD NEW INT’L DICTIONARY 1659 (1993 ed.) (stating various definitions
for “to pay,” including “to . . . discharge an obligation to: make due return to” and “to
make any agreed disposal or transfer of (money)”). The proper construction of the word
“paying” in subsection (a) of section 34.21 is informed by subsections (f) and (f-1) of this
statute. Under the latter subsections, if the owner and the purchaser cannot agree on the
redemption amount or if the purchaser refuses to give the owner a quitclaim deed to the
property, the owner may redeem the property by “paying” the redemption amount to the
assessor-collector for the county in which the property was sold, if the owner submits an
7
The redemption period for the Wittenbergs expired on March 20, 2010, the second anniversary of the
date on which the purchaser’s deed was filed for record. The versions of subsections (f) and (f-1) quoted
above apply to redemptions that take place on or after September 1, 2009. See Act of May 21, 2009, 81st
Leg., R.S., ch. 374, §§ 2, 3, 2009 Tex. Gen. Laws 913, 914. For redemptions occurring between June 5,
2007 and August 31, 2009, there was no subsection (f-1) of section 34.21, and the wording of subsection
(f) was different; but the differences in these two versions of the statute are not material to the statutory-
construction issue in this case. Therefore, the current version is cited.
9
affidavit that complies with section 34.21(f). See TEX. TAX CODE ANN. § 34.21(f), (f-1).
Significantly, in subsection (f), the Legislature refers to the redemption amount to be paid
under subsection (a) as “the amount of redemption money due.” Id. § 34.21(f) (emphasis
added). In addition, after the owner has paid the assessor-collector, the assessor-collector
shall give the owner a signed receipt and “shall on demand pay the money received by the
assessor-collector to the purchaser.” Id. § 34.21(f-1) (emphasis added). If the owner
could “pay” the assessor-collector by providing a promissory note for the redemption
amount, then the assessor-collector would not have received any money, yet subsection
(f-1) states that “paying” the assessor-collector results in receipt of money by the
assessor-collector. Under the unambiguous language of subsections (f) and (f-1), to
“pay” the assessor-collector, the owner must give money to the assessor-collector.8 It is
not reasonable to construe the word “paying” to have a different meaning in subsection
(a) of section 34.21 than it has in subsections (f) and (f-1).
It is reasonable to expect that an owner whose real property is sold at a tax sale is
experiencing financial difficulties. Moreover, though some purchasers at tax sales may
be favorably disposed to a redemption under section 34.21 by the owner, other purchasers
may not want the property to be redeemed and may insist that all the requirements of the
statute be satisfied. In the latter situation, it would not be reasonable to allow an owner to
redeem the property based on a mere promise to pay, especially when the purchaser
bought the property by paying cash at a tax sale.
As the Bank notes, the Supreme Court of Texas has stated that “statutes which
give the right to redeem are to be regarded favorably and construed with liberality.”
Buckholts v. Alsup, 56 S.W.2d 301, 305 (Tex. App.—Texarkana 1932, writ ref’d). Under
this rule, section 34.21(a) must be construed liberally. See id. But this doctrine of liberal
construction cannot be used as a license to contradict the plain meaning of the statute.
8
In some cases courts state that a proper tender of the required amount of money is sufficient to redeem
property under section 34.21. See Jensen v. Covington, 234 S.W.3d 198, 206–07 (Tex. App.—Waco
2007, pet. denied). Though a proper tender likely would be considered paying the money, this court does
not need to address this subject because there is no issue as to whether the Wittenbergs made a proper
tender.
10
See State v. PR Invs., 180 S.W.3d 654, 665 (Tex. App.—Houston [14th Dist.] 2005) (en
banc), aff’d, 251 S.W.3d 472 (Tex. 2008). No amount of liberal construction can
transform the meaning of “money” to “promissory note” or “pay” to “promise to pay.”
Such an interpretation is neither fair nor reasonable, nor in accordance with the purposes
of the statute.
The Bank also asserts that the Wittenbergs were not obligated to strictly comply
with the requirements of section 34.21 and that substantial compliance was sufficient.
Though other Texas intermediate courts of appeals have held to this effect, the parties
have not cited and research has not revealed any case from the Supreme Court of Texas
or this court addressing this issue. It is presumed for the sake of argument that strict
compliance was not required and that the Wittenbergs were required only to substantially
comply with section 34.21. But, even operating under this presumption, providing a
promissory note as “payment” of the redemption premium does not constitute substantial
compliance with section 34.21. See Burd v. Armistead, 982 S.W.2d 31, 35 (Tex. App.—
Houston [1st Dist.] 1998, pet. denied) (holding that tender of amount that was more than
sixty percent of the redemption amount under section 34.21 did not constitute substantial
compliance). That is simply no compliance.
The Bank also relies on the opinion of the Tenth Court of Appeals in Jensen v.
Covington. See 234 S.W.3d 198, 206–07 (Tex. App.—Waco 2007, pet. denied). But the
Jensen court did not address the meaning that should be given to the term “paying” in
section 34.21 or whether providing a promissory note to the purchaser constitutes
“paying” within the meaning of this statute. See id. Instead, the Jensen court concluded
that tender of the redemption amount would be sufficient to comply with section 34.21
and then examined whether the tender in that case was a sufficient tender. See id. The
Jensen case is not on point.
For the reasons stated above, to the extent the ordinary meaning of “paying”
would allow an owner to redeem property under section 34.21(a) by giving a promissory
note to the purchaser for all or part of the redemption amount, this construction is not
reasonable in this context. Under the unambiguous language of the statute, an owner may
11
not provide a promissory note to the purchaser to satisfy the requirement of “paying” the
redemption amount under section 34.21(a). Therefore, the Wittenbergs did not satisfy the
requirements of section 34.21(a). But this conclusion does not end the analysis because,
as discussed in the following section, the Bank asserts that the doctrine of quasi-estoppel
precludes Stockdick from denying that the Deed effected a redemption of the Property.
Under this doctrine, Stockdick may be estopped from asserting under section 34.21(a)
that no redemption occurred in December 2007. See, e.g., Forney 921 Lot Development
Partners I, L.P. v. Paul Taylor Homes, Ltd., 349 S.W.3d 258, 266–70 (Tex. App.—
Dallas 2011, pet. filed) (holding that quasi-estoppel precluded contracting party from
exercising its statutory right to terminate a contract under Water Code section 49.452(f));
Brooks v. Brooks, 257 S.W.3d 418, 423–24 (Tex. App.—Fort Worth 2008, pet. denied)
(holding that quasi-estoppel precluded ex-husband from asserting his rights under
settlement agreement and under Family Code section 6.602).
The trial court erred by granting summary judgment based upon Stockdick’s first
and second summary-judgment grounds.
In its first summary-judgment ground, Stockdick asserted that the Wittenbergs did
not redeem the Property because they did not comply or substantially comply with the
requirement that they pay Stockdick $92,500 in cash, which was the twenty-five percent
premium required by section 34.21. See TEX. TAX CODE ANN. § 34.21(a). In its second
summary-judgment ground Stockdick asserted that it maintained superior title to the
Property by reserving a vendor’s lien to secure payment of the Note. In response, the
Bank asserted that the doctrine of quasi-estoppel precluded Stockdick from denying that
the Deed effected a redemption of the Property.9
9
The Bank sufficiently raised the defense of quasi-estoppel. See Steubner Realty 19, Ltd. v. Cravens
Road 88, Ltd., 817 S.W.2d 160, 164 (Tex. App.—Houston [14th Dist.] 1991, no writ) (holding that a
pleading of estoppel is sufficient to raise quasi-estoppel); Eckland Consultants, Inc. v. Ryder, Stillwell,
Inc., 176 S.W.3d 80, 87, n.5 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (same as Steubner Realty 19).
Though in its response to Stockdick’s summary-judgment motion the Bank did not specifically use the
term “quasi-estoppel,” the substance of the Bank’s discussion of estoppel was sufficient to raise the
affirmative defense of quasi-estoppel. See Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 155–
56 & n.1 (Tex. 2004); Coastal Cement Sand, Inc. v. First Interstate Credit Alliance, Inc., 956 S.W.2d
12
 The doctrine of quasi-estoppel precludes a person from asserting, to another’s
disadvantage, a right inconsistent with a position previously taken. See Steubner Realty
19, Ltd. v. Cravens Road 88, Ltd., 817 S.W.2d 160, 164 (Tex. App.—Houston [14th
Dist.] 1991, no writ). This doctrine applies when it would be unconscionable to allow a
person to maintain a position inconsistent with one in which it acquiesced, or from which
it accepted a benefit. See Curry v. Pickett, No. 14-09-00188-CV, 2010 WL 3353952, at
*4 (Tex. App.—Houston [14th Dist.] Aug. 26, 2010, no pet.) (mem. op.); Steubner Realty
19, Ltd., 817 S.W.2d at 164. Thus, under principles of quasi-estoppel, a person may not
accept the benefits of a transaction or statute and then take a subsequent inconsistent
position to avoid corresponding obligations or effects. See Cambridge Prod., Inc. v.
Geodyne Nominee Corp., 292 S.W.3d 725, 732 (Tex. App.—Amarillo 2009, pet. denied);
Brooks, 257 S.W.3d at 423–24; Mulvey v. Mobil Producing Texas and New Mexico, Inc.,
147 S.W.3d 594, 607–08 (Tex. App.—Corpus Christi 2004, pet. denied). In its appellate
brief, Stockdick states that parties can agree to modify their statutory rights by insisting
on some but not all of these rights. Stockdick indicates that it made such an agreement in
December 2007, but that the Wittenbergs did not comply with the terms of that
agreement and therefore failed to satisfy the requirements of section 34.21, as modified
by the parties’ agreement.
Stockdick concedes that the December 2007 transaction between the Wittenbergs
and Stockdick constituted an agreement by Stockdick as to the manner by which the
Wittenbergs could redeem the Property, and Stockdick cites the documents from this
transaction, including the Deed, as evidence of this agreement. This concession raises the
issue of the terms to which Stockdick agreed in December 2007. In addition, the Bank
argues that the doctrine of quasi-estoppel precludes Stockdick from asserting that the
Deed did not effect a redemption. This raises the issue of whether Stockdick took the
position in the Deed that the Wittenbergs had redeemed the Property in December 2007.
562, 565 (Tex. App.—Houston [14th Dist.] 1997, pet. denied); Steubner Realty 19, Ltd., 817 S.W.2d at
164; Allen v. City of Baytown, No. 01-09-00914-CV, 2011 WL 3820963, at *7 (Tex. App.—Houston [1st
Dist.] Aug. 25, 2011, no pet.); Coleman v. Revak, No. 01-07-00438-CV, 2008 WL 2466276, at *2 (Tex.
App.—Houston [1st Dist.] June 19, 2008, no pet.); Eckland Consultants, Inc., 176 S.W.3d at 87, n.5.
13
Stockdick asserts that it did not take the position in the Deed that the Deed effected a
redemption; rather, Stockdick asserts that it agreed the Wittenbergs could redeem the
Property by paying $370,000 in cash and then paying on or before July 31, 2008, the
amounts due under the Note.
The Deed is subject to the general rules of contract construction. See Pilarcik v.
Emmons, 966 S.W.2d 474, 478 (Tex. 1998); Brown v. Havard, 593 S.W.2d 939, 941
(Tex. 1980); Marzo Club, LLC v. Columbia Lakes Homeowners Ass’n, 325 S.W.3d 791,
798 (Tex. App.—Houston [14th Dist.] 2010, no pet.). In construing the Deed, this
court’s primary objective is to ascertain and give effect to the intentions of the parties as
expressed in the Deed. See Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d
462, 464 (Tex. 1998). To ascertain the parties’ true intentions, this court must examine
the entire Deed in an effort to harmonize and give effect to all of its provisions so that
none will be rendered meaningless. See MCI Telecomms. Corp. v. Tex. Utils. Elec. Co.,
995 S.W.2d 647, 652 (Tex. 1999). Whether the Deed is ambiguous is a question of law
for the court. See Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996).
The Deed is ambiguous if its meaning is uncertain and doubtful or is reasonably
susceptible to more than one interpretation. See id.
Section 34.21 indicates that after the owner of real property sold at a tax sale
redeems the property from the purchaser under section 34.21(a), the purchaser should
give the owner a quitclaim deed. See TEX. TAX CODE ANN. § 34.21(f). The undisputed
summary-judgment evidence shows that Susan Wittenberg held title to the Property when
it was sold at the tax sale and that Stockdick purchased the Property at the tax sale for
$370,000.10 In the Deed, Stockdick states that it conveyed to the Wittenbergs all of
10
Stockdick concedes and the record reflects that Tribus conveyed title to the Property to Susan
Wittenberg by a deed filed for record in June 2006. The summary-judgment evidence does not reflect
that title to the Property was conveyed back to Tribus before the tax sale on June 5, 2007. Nonetheless,
Stockdick asserts in its appellate brief that Tribus owned the Property at the time of the tax sale on June 5,
2007. That Tribus owned the Property when the tax collection suit was filed and that Tribus was liable for
payment of the taxes did not prevent Tribus from conveying title to the Wittenbergs before the tax sale.
See TEX. TAX CODE ANN. § 32.07 (West 2012) (stating that, with exceptions that do not apply to the case
under review, property taxes are the personal obligation of the person (including an entity) who owns the
14
Stockdick’s right, title, and interest in the Property, without warranty. Therefore, the
Deed was a quitclaim deed, the type of deed used to effect a redemption of real property
under section 34.21(a). See id.; Geodyne Energy Income Prod. P’ship I-E v. Newton
Corp., 161 S.W.3d 482, 486–87 (Tex. 2005) (concluding that document was a quitclaim
deed because in that document a partnership stated that it conveyed all of its right, title,
and interest in certain property, without warranty). As stated in the Deed, the
consideration for the Deed was $370,000 in cash and the Note.
The Deed, which was executed by Stockdick and filed for record in the Harris
County Real Property Records, expressly recites that it “is executed pursuant to
redemption of the Property by [the Wittenbergs] from [the tax sale in question].” Under
precedent from the Supreme Court of Texas “pursuant to” redemption of the Property
means “in carrying out” redemption of the Property. See Syntax, Inc. v. Hall, 899 S.W.2d
189, 191–92 (Tex. 1995); see also Bryan A. Garner, A Dictionary of Modern Legal
Usage 454 (1987 ed.) (defining “pursuant to” as “in carrying out”). Therefore, by stating
in the Deed that the Deed was executed pursuant to redemption of the Property by the
Wittenbergs from the tax sale in question, Stockdick stated in the Deed that the Deed was
executed in carrying out a redemption of the Property by the Wittenbergs. See Syntax,
Inc., 899 S.W.2d at 191–92; Garner, supra, at 454. In addition, if the redemption were
not to occur until the Note was paid in full, then one would expect that a quitclaim deed
would not be executed until after the Note was paid. See TEX. TAX CODE ANN. §
34.21(f). The fact that Stockdick executed a quitclaim deed in December 2007 suggests
that the redemption was occurring then. In addition, the principal amount of the Note
was equal to the redemption premium. But, if the parties intended redemption to occur in
the future, as the majority concludes, then the Wittenbergs would be paying more than
the statutory redemption amount.11 For example, on July 31, 2008, $98,582.19 was due
property on January 1 of the year for which the tax is imposed and that such an owner is not relieved of
this personal obligation because it no longer owns the property).
11
The majority suggests that Stockdick has complied with all applicable provisions of the Tax Code. See
ante at pp. 12–13, n.15. But Stockdick signed the Deed, which reasonably could be interpreted as
effecting a redemption in exchange for cash and a promissory note, rather than for cash only, as
15
under the Note, which is more than six thousand dollars in excess of the redemption
premium of $92,500.12
On the other hand, in the Deed, Stockdick states that the Note was “secured by
vendor’s lien and superior title retained herein in favor of [Stockdick]” (hereinafter,
“Vendor’s Lien Language”). The Vendor’s Lien Language in the Deed indicates that, as
between Stockdick and the Wittenbergs, Stockdick retained superior title to the Property,
giving Stockdick the option to treat the Deed as an executory contract and to choose to
rescind this contract. See Minter v. Burnett, 38 S.W. 350, 353 (Tex. 1896) (stating that
reservation to grantor of superior title is only for purpose of enforcing payment of
purchase money and has no application as between grantee and third parties); Lusk v.
Mintz, 625 S.W.2d 774, 775 (Tex. Civ. App.—Houston [14th Dist.] 1981, no writ)
(discussing grantor’s right to rescind based on vendor’s lien). Stockdick also had the
option to seek judicial foreclosure of the vendor’s lien or to pursue nonjudicial
foreclosure under the deed of trust.
Stockdick chose to pursue foreclosure under the deed of trust and did not seek
rescission based on the vendor’s lien. Nonetheless, the presence of language reserving a
vendor’s lien and superior title, with the accompanying right to rescind the Deed,
conflicts with the language indicating that the Deed is effecting a redemption of the tax
sale. Such a redemption would restore title to the Property to what it was before the tax
sale—the Wittenbergs holding title subject to the Bank’s Lien—except that the tax liens
would be discharged. See Assocs. Home Equity Servs. Co. v. Hunt, 151 S.W.3d 559,
561–62 (Tex. App.—Beaumont 2004, no pet.). One reasonably could construe the
Vendor’s Lien Language as reflecting an intent to override the Deed’s language stating
that the Deed was executed in carrying out a redemption. Under this construction, no
contemplated by section 34.21. In addition, even under Stockdick’s interpretation of its agreement with
the Wittenbergs as to how they could redeem the Property, the Wittenbergs were required to pay more
than the amount specified in the Tax Code ($462,500) to redeem the Property. See TEX. TAX CODE ANN.
§ 34.21(a).
12
The redemption premium was twenty-five percent until March 20, 2009, the first anniversary of the
date on which the purchaser’s deed was filed for record. See TEX. TAX CODE ANN. § 34.21(a).
16
redemption could have occurred in December 2007.
But it is also reasonable to construe the conflicting language as reflecting an intent
to effect a redemption of the Property in December 2007, subject to Stockdick’s right to
rescind the redemption if the Wittenbergs defaulted under the Note, as opposed to
foreclosing upon Stockdick’s vendor’s lien or its deed-of-trust lien. Under a third
reasonable construction of the Deed’s language, the conflicting parts could be construed
as reflecting an intent to negate the rescission remedy that ordinarily goes along with a
vendor’s lien. Under this construction, the parties intended to effect a redemption in
December 2007, and to secure payment of the Note with the vendor’s lien and the deed-
of-trust lien, but not to give Stockdick a right to rescind the December 2007
redemption.13
The inescapable conclusion is that the Deed is reasonably susceptible to more than
one interpretation and thus is ambiguous14 as to whether Stockdick took the position that
the Deed effected a redemption that occurred in December 2007.15 See Lenape Res.
Corp. v. Tenn. Gas Pipeline Co., 925 S.W.2d 565, 574 (Tex. 1996); Coker v. Coker, 650
S.W.2d 391, 393–94 (Tex. 1983); A.W. Wright & Assocs., P.C. v. Glover, Anderson,
Chandler & Uzick, L.L.P., 993 S.W.2d 466, 470 (Tex. App.—Houston [14th Dist.] 1999,
pet. denied); Gibson v. Bentley, 605 S.W.2d 337, 338–39 (Tex. Civ. App.— Houston
13
This analysis is relevant to the question of whether the trial court erred in granting summary judgment
based upon a genuine fact issue regarding quasi-estoppel. The Bank was not required to plead rescission.
14
Even if the Bank has not asserted or pleaded that the Deed is ambiguous, this court still may conclude
that the Deed is ambiguous. See Watkins v. The Krist Law Firm, P.C., No. 14-02-00291-CV, 2003 WL
21786173, at *3–5 (Tex. App.—Houston [14th Dist.] Aug. 5, 2003, pet. dism’d) (mem. op.) (holding that
contract was ambiguous even though the parties agreed that the contract was unambiguous); City of
Bunker Hill Vill. v. Mem’l Vills. Water Auth., 809 S.W.2d 309, 310–11 (Tex. App.—Houston [14th Dist.]
1991, no writ) (holding that court was not bound by parties’ agreement that contracts were unambiguous
and holding that contracts were ambiguous).
15
On rehearing, Stockdick asserts that finding an ambiguity in this regard “casts a cloud on every real
estate vendor’s lien transaction in the state.” But the parties have not cited and research has not revealed
any other Texas case involving a quitclaim deed in which the grantor reserved a vendor’s lien and also
stated that the deed was executed pursuant to redemption of the property from a tax sale. The case under
review does not involve a deed outside of this redemption context, in which the grantor is simply
conveying real property with a warranty and reserving a vendor’s lien. Therefore, an ambiguity finding in
this case would not have the widespread application and ramifications that Stockdick envisions.
17
[14th Dist.] 1980, writ ref=d n.r.e.). Considering all the evidence in the light most
favorable to the Bank, crediting evidence favorable to the Bank if reasonable jurors
could, and disregarding contrary evidence unless reasonable jurors could not, reasonable
and fair-minded jurors could differ in their conclusions as to whether Stockdick took the
position in the Deed that the Deed effected a redemption of the Property in December
2007.16 See Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007);
Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006); Steubner Realty 19, Ltd.,
817 S.W.2d at 164. After the Wittenbergs failed to pay the Note, Stockdick asserted that
no redemption had occurred in December 2007, and that Stockdick is entitled to keep the
$370,000. Under the applicable standard of review, if Stockdick previously had taken an
inconsistent position in this regard, a genuine fact issue exists as to whether it would be
unconscionable to allow Stockdick to maintain that no redemption occurred in December
2007, given that Stockdick previously had acquiesced in or accepted a $370,000 benefit
from an inconsistent position.17 See Steubner Realty 19, Ltd., 817 S.W.2d at 164.
16
The Bank asserts it had no knowledge or notice of the proceedings in the tax court that “resulted in
Sockdick’s obtaining the [Remaining Proceeds] while ignoring [the Bank’s] statutory priority to the
[Remaining Proceeds].” Nonetheless, the Bank does not argue that it lacked an opportunity to redeem the
Property. Rather, the Bank argues that it is entitled to rely upon the Deed as evidence that the
Wittenbergs redeemed the Property in December 2007, thereby obviating the need for the Bank to redeem
the Property. Under the Bank’s interpretation of the Deed, there was no need for the Bank to redeem the
Property after December 10, 2007, when the Wittenbergs redeemed the Property, thereby reinstating the
Bank’s Lien. The majority indicates that any prior inconsistent position by Stockdick that the Deed
effected a redemption in December 2007, was a position taken only vis- -vis the Wittenbergs. See ante at
p. 11, n.13. But the alleged position was taken in the Deed, which was filed for record on December 10,
2007, in the Harris County Real Property Records. Therefore, the alleged inconsistent position was not
taken only as to the Wittenbergs but as to the public at large, including the Bank.
17
The majority concludes, in the alternative, that as a matter of law Stockdick has not engaged in
unconscionable conduct because Stockdick has been asserting its statutory or contractual rights. See ante
at pp. 12–13, n.15. But, Texas courts have held that a person may be estopped under the doctrine of
quasi-estoppel from asserting the person’s statutory or contractual rights. See Forney 921 Lot
Development Partners I, L.P., 2011 WL 3925746, at *6–10 (holding quasi-estoppel precluded contracting
party from exercising its statutory right to terminate a contract); Cambridge Prod., Inc., 292 S.W.3d at
732 (holding quasi-estoppel precluded contracting party from exercising its contractual rights); Brooks,
257 S.W.3d at 423–24 (holding that quasi-estoppel precluded ex-husband from asserting his rights under
settlement agreement and under Family Code section 6.602); Mulvey, 147 S.W.3d at 607–08 (holding
quasi-estoppel precluded party from asserting its preferential right to purchase under a contract); Eckland
Consultants, Inc., 176 S.W.3d at 87–88 (holding quasi-estoppel precluded contracting party from
asserting its rights under a provision of the contract).
18
Therefore, a genuine fact issue exists as to whether Stockdick is precluded under the
doctrine of quasi-estoppel from denying that in December 2007, the Wittenbergs
redeemed the Property through the Deed.18 See id. The trial court erred to the extent it
granted Stockdick’s motion for summary judgment based upon the first two grounds.
The majority contradicts binding precedent regarding what a nonmovant
must do to raise an affirmative defense in response to a traditional
summary-judgment motion.
In its holding regarding quasi-estoppel, the majority does not reach the merits of
this affirmative defense. See ante at pp. 11–15. Instead, the majority finds procedural
default, concluding that the Bank failed to sufficiently raise the defense of quasi-estoppel
in its summary-judgment response. See id. The majority determines that in this
response, the Bank failed to present sufficient argument to raise quasi-estoppel in
response to Stockdick’s summary-judgment motion. See id. at pp. 12–13. Specifically,
the majority concludes that the Bank failed to raise any fact issue regarding this defense
because “the Bank did not present or argue all of the elements of the quasi-estoppel
affirmative defense in its response to Stockdick’s motion.” Ante at pp. 13–14. In this
strained analysis, the majority contradicts binding precedent under which the Bank’s
summary-judgment response is sufficient to expressly raise the defense of quasi-estoppel.
See Timpte Indus., Inc. v. Gish, 286 S.W.3d 306, 311 (Tex. 2009) (holding that the
18
The majority claims that the Bank was a “stranger” to the tax sale and the Wittenbergs’ efforts to
redeem the Property. As the holder of the first lien that was foreclosed in the tax sale and that would be
revived in any redemption of the Property, the Bank was hardly a stranger as the majority suggests. See
ante at p. 11, n.13. In addition, the majority cites no Texas case requiring mutuality of the parties before
a party can assert quasi-estoppel. See id. The main case cited by the majority applies North Carolina law.
The other case does not apply quasi-estoppel; instead, it applies an old line of Texas cases under which a
party is estopped in a subsequent judicial proceeding from taking a position contrary to a position he took
in a former judicial proceeding, where the latter position is to the prejudice of the adverse party and the
parties and the questions are the same. See Swilley v. McCain, 374 S.W.2d 871, 875–76 (Tex. 1964)
(citing Smith v. Chipley, 16 S.W.2d 269, 275–76 (Tex. 1929) and similar cases). When listing the
elements of quasi-estoppel, both the Supreme Court of Texas and this court have listed elements
significantly different from the elements listed in Swilley and have not imposed any mutuality
requirement. Compare Swilley, 374 S.W.2d at 875–76, with Lopez v. Munoz, Hockema & Reed, L.L.P.,
22 S.W.3d 857, 864 (Tex. 2000), and Steubner Realty 19, Ltd., 817 S.W.2d at 164.
19
requirement that summary-judgment grounds be expressly and specifically stated is
analogous to the specificity required of a party’s pleadings and is intended to provide the
opposing party with adequate information regarding the summary-judgment issues); Joe
v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 155–56 & n.1 (Tex. 2004)
(concluding that party raised the defense of equitable estoppel in its pleadings even
though it did not expressly state all of the elements of equitable estoppel); Westchester
Fire Ins. Co. v. Alvarez, 576 S.W.2d 771, 772–73 (Tex. 1978) (concluding that
requirement of Texas Rule of Civil Procedure 166a(c) that parties expressly state
summary-judgment grounds parallels the requirements applicable to pleadings under
Texas Rules of Civil Procedure 45(b) and 47(a)), overruled on other grounds by, City of
Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979); Dworschak v.
Transocean Offshore Deepwater Drilling, Inc., 352 S.W.3d 191, 200 (Tex. App.—
Houston [14th Dist.] 2011, no pet.) (same as Timpte Indus., Inc.); Coastal Cement Sand,
Inc. v. First Interstate Credit Alliance, Inc., 956 S.W.2d 562, 565 (Tex. App.—Houston
[14th Dist.] 1997, pet. denied) (holding that summary-judgment grounds may be stated
concisely, without detail and without argument); Steubner Realty 19, Ltd., 817 S.W.2d at
164 (holding that express assertion of estoppel is sufficient to raise the affirmative
defense of quasi-estoppel). Today, the majority increases the burden that a nonmovant
must satisfy to raise an affirmative defense in a summary-judgment response. Under the
majority’s analysis, the nonmovant must provide argument regarding the defense and also
must expressly state each essential element of the defense. See ante at pp. 11–15. Under
applicable law, these extra steps are not required to expressly raise a defense in a
summary-judgment response. See Timpte Indus., Inc., 286 S.W.3d at 311; Joe, 145
S.W.3d at 155–56 & n.1; Westchester Fire Ins. Co., 576 S.W.2d at 772–73; Dworschak,
352 S.W.3d at 200; Coastal Cement Sand, Inc., 956 S.W.2d at 565; Steubner Realty 19,
Ltd., 817 S.W.2d at 164. This court should not create new requirements not imposed by
the Supreme Court of Texas.
As with the rules of pleading, the intent of the requirement that a movant expressly
state the summary-judgment grounds or that the nonmovant expressly state affirmative
20
defenses is to provide the opposing party with fair notice of the issues. See Timpte
Indus., Inc., 286 S.W.3d at 311; Westchester Fire Ins. Co., 576 S.W.2d at 772–73;
Dworschak, 352 S.W.3d at 200. But, argument or analysis of the evidence is not
required; instead, a concise identification of a liability theory or affirmative defense is
sufficient to raise that theory or defense.19 See Joe, 145 S.W.3d at 155–56 & n.1; Coastal
Cement Sand, Inc., 956 S.W.2d at 565; Steubner Realty 19, Ltd., 817 S.W.2d at 164;
Allen v. City of Baytown, No. 01-09-00914-CV, 2011 WL 3820963, at *7 (Tex. App.—
Houston [1st Dist.] Aug. 25, 2011, no pet.) (holding that summary-judgment ground may
be raised in a footnote that concisely states the ground without detail or argument) (mem.
op.); Coleman v. Revak, No. 01-07-00438-CV, 2008 WL 2466276, at *2 (Tex. App.—
Houston [1st Dist.] June 19, 2008, no pet.) (holding that summary-judgment ground may
be raised by merely identifying the claim or defense and that argument or discussion of
the evidence is not required to raise defense) (mem. op.). The Bank met this standard.
The Bank sufficiently raised the affirmative defense of quasi-estoppel in
its summary-judgment response.
In its petition the Bank invoked estoppel against “Stockdick’s attempts to disclaim
its own redemption deed,” sufficiently pleading quasi-estoppel. See Steubner Realty 19,
Ltd., 817 S.W.2d at 164 (holding that a pleading of estoppel is sufficient to raise the
defense of quasi-estoppel); Eckland Consultants, Inc. v. Ryder, Stillwell, Inc., 176 S.W.3d
80, 87, n.5 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (same as Steubner Realty 19).
Then, in its summary-judgment response, the Bank stated as follows:
A quitclaim deed is the statutory method of conveyance after a redemption.
The Deed documented an accord and satisfaction between Stockdick and the
Wittenbergs.
Having taken title under the accord and satisfaction agreement, Stockdick is now
19
The majority relies upon the plurality opinion in McConnell v. Southside Independent School District.
See ante at p. 14, n.17. In this opinion, the plurality states that summary-judgment grounds may be stated
concisely, without detail or argument. See McConnell v. Southside Independent School District, 858
S.W.2d 337, 340 (Tex. 1993) (plurality op.).
21
estopped to assert that it did not enter into an accord and satisfaction of its claim
for the redemption consideration.
Stockdick cannot take the benefit of its accord and satisfaction agreement and then
disclaim that agreement.
The doctrine of estoppel applies generally to Stockdick’s attempt to take the
benefits of its accord and satisfaction agreement and then deny the redemption and
the Deed.20
The Bank sufficiently raised the affirmative defense of quasi-estoppel in its
summary-judgment response.21 See Joe, 145 S.W.3d at 155–56 & n.1; Coastal Cement
Sand, Inc., 956 S.W.2d at 565; Steubner Realty 19, Ltd., 817 S.W.2d at 164; Allen v. City
of Baytown, 2011 WL 3820963, at *7; Coleman v. Revak, 2008 WL 2466276, at *2;
Smith v. Lagerstam, 2007 WL 2066298, at *2–3 (Tex. App.—Austin Jul. 19, 2007, no
pet.) (mem. op.); Eckland Consultants, Inc., 176 S.W.3d at 87, n.5; Conquistador
Petroleum, Inc. v. Chatham, 899 S.W.2d 439, 441–42 (Tex. App.—Eastland 1995, writ
denied); Lochabay v. Southwestern Bell Media, Inc., 828 S.W.2d 167, 170 & n.2 (Tex.
App.—Austin 1992, no writ). The court errs in holding the Bank failed to do so.
The majority’s construction of the Deed conflicts with binding precedent
from the Supreme Court of Texas.
The majority concludes that as a matter of law Stockdick has never taken the
position that the Wittenbergs redeemed the Property in December 2007. See ante at pp.
11–12, n.14. The Deed signed by Stockdick contains the statement that the Deed “is
20
In the paragraph following this statement in the Bank’s response, the Bank asserted that, by demanding
cancellation of the Bank’s $650,000 deed-of-trust lien against the Property, Stockdick was seeking “an
unconscionable additional windfall.” The Bank did not expressly link this assertion with its defense that
Stockdick was estopped from denying that the Deed effected a redemption; but, the Bank stated that it
would be unconscionable to allow Stockdick to succeed in its position that no redemption occurred.
21
The majority distinguishes the summary-judgment rule from the rules for pleading, concluding that
cases like Steubner Realty and Eckland Consultants have no application. See ante at p. 13–14, n.16. But
the Supreme Court of Texas and this court have equated the standard for determining whether a summary-
judgment ground or defense has been raised with the standard for determining whether a claim or defense
has been raised in the pleadings. See Timpte Indus., Inc., 286 S.W.3d at 311; Westchester Fire Ins. Co.,
576 S.W.2d at 772–73; Dworschak, 352 S.W.3d at 200.
22
executed pursuant to redemption of the Property by Grantee from that certain tax sale
conducted on or about June 5, 2007 under Cause No. 2005-74535.” Nonetheless, the
majority concludes that the only reasonable interpretation of the Deed, deed of trust, and
the Note is that Stockdick never took the position that the Deed effected a redemption in
December 2007. See id. In doing so, the majority contradicts binding precedent from the
Supreme Court of Texas under which “pursuant to” means “in carrying out.” See Syntax,
Inc., 899 S.W.2d at 191–92. Thus, by stating in the Deed that the Deed was executed
pursuant to the Wittenbergs’ redemption of the Property, Stockdick took the position that
the Deed was executed in carrying out a redemption of the Property by the Wittenbergs.
See id. By concluding that as a matter of law Stockdick never took the position that the
Wittenbergs redeemed the Property in December 2007, the majority goes against this
precedent.
The trial court erred in granting summary judgment on the ground that the Bank
waived its right to assert that a redemption occurred.
In its third summary-judgment ground, Stockdick asserted that as a matter of law
the Bank waived its contention that the Wittenbergs redeemed the Property. Stockdick
relies on a September 2008 letter from David Petroni of Carrington Mortgage Services,
LLC. In the letter, Petroni states that Carrington has an active loan on the Property and
wants to regain possession of the Property. Petroni asks for a redemption quote. The
letter indicates that Petroni believed in September 2008 that the Property had not been
redeemed. But, there is no summary-judgment evidence that Carrington or Petroni were
agents of the Bank. Even if they were the Bank’s agents, there is no evidence that
Petroni was aware of the Deed, and the belief of one of the Bank’s agents that no
redemption had occurred would not operate to waive as a matter of law the Bank’s right
to assert that a redemption had occurred or that Stockdick was estopped from denying
that a redemption had occurred.
Stockdick also asserts that the Bank made the conscious decision not to redeem
the Property, not to participate in the foreclosure sale on November 4, 2008, and not to
23
seek an injunction of this sale.22 Presuming for the sake of argument that the Bank made
these conscious decisions, the Bank would not thereby waive its right to assert that a
redemption had occurred or that Stockdick was estopped from denying that a redemption
had occurred.
The only authority that Stockdick cites to support its argument is Rotge v. Murphy,
a case that did not involve either a deed like the one in the case under review or issues of
estoppel or whether a redemption had occurred. See 198 S.W.2d 932, 935–36 (Tex. Civ.
App.—San Antonio 1946, writ ref’d n.r.e.). In Rotge, the former owner did not make any
attempt to redeem the property before the end of the redemption period; rather, she filed
suit alleging that the tax sale was void. Id. She then argued that, if she were
unsuccessful in that suit, she should be allowed to redeem the property even though the
statutory deadline had passed. Id. The Rotge court did not hold that the owner had
waived her right to redeem by filing suit; instead, the court held that it was too late for
her to redeem the property. Id. The summary-judgment evidence does not prove as a
matter of law that the Bank intentionally relinquished its right to pursue the claims it is
asserting in this case. The trial court erred to the extent it granted Stockdick’s summary-
judgment motion based upon the third ground.
The trial court erred in granting summary judgment on the ground that the Bank
cannot assert its claims under the Declaratory Judgments Act.
In its fourth summary-judgment ground, Stockdick asserted that the Bank cannot
assert these claims under the Declaratory Judgments Act because the Bank seeks a
determination of title to real property that may be made only in a trespass-to-try-title
action. The Bank has sought relief only under the Declaratory Judgments Act. Under
this statute, “[a] person interested under a deed, will, written contract, or other writings
constituting a contract or whose rights, status, or other legal relations are affected by a
statute, municipal ordinance, contract, or franchise may have determined any question of
construction or validity arising under the instrument, statute, ordinance, contract, or
22
Notably, Stockdick informed Petroni that the payoff amount was $113,777.54, an amount more than
$21,000 greater than the redemption premium for the Property.
24
franchise and obtain a declaration of rights, status, or other legal relations thereunder.”
TEX. CIV. PRAC. & REM. CODE ANN. § 37.004(a) (West 2012). In this suit, the Bank
seeks a declaratory judgment determining issues as to whether a redemption of the
Property occurred and whether the Bank’s Lien is still a valid lien on the Property. These
issues involve the construction of the Deed.
Stockdick is the current owner of the Property. If the Bank succeeds in its
arguments regarding the Deed and estoppel, then the Property is subject to the Bank’s
Lien.23 In any event, title to the Property or to the liens is not in question. Stockdick
relies upon Southwest Guaranty Trust Co. v. Hardy Road 13.4 Joint Venture. See 981
S.W.2d 951 (Tex. App.–Houston [1st Dist.] 1998, pet. denied). In that case, the court
determined that the substance of the plaintiff’s case was a suit to quiet title, in which
attorney’s fees were not recoverable. See id. at 957. The court held that the trial court
did not abuse its discretion in denying attorney’s fees because the trial court could have
determined that the plaintiff could not use the Declaratory Judgments Act to obtain
attorney’s fees for a case that was really a suit to quiet title. See id. Stockdick also cites
other cases in which courts have held that the Declaratory Judgments Act cannot be used
when the substance of the suit is one to remove a cloud on title to real property or a suit
over a boundary dispute between owners of real property. The substance of the Bank’s
suit is not one to quiet title, to remove a cloud on title to real property, or to resolve a
boundary dispute. Therefore, these cases are not on point.
The relief that the Bank seeks is available under the Declaratory Judgments Act,
and the Bank is not required to pursue a trespass-to-try-title action. See TEX. CIV. PRAC.
& REM. CODE ANN. § 37.004(a); Chase Home Finance, L.L.C. v. Cal Western
23
If the Bank were to succeed in its estoppel arguments, then Stockdick would be estopped from denying
that a redemption occurred in December 2007, resulting in the reinstatement of the Bank’s Lien. Because
Stockdick’s Lien would be subordinate to the Bank’s Lien, the foreclosure of Stockdick’s Lien would not
affect the Bank’s Lien. The majority suggests that the Bank is challenging Stockdick’s right to foreclosure
of Stockdick’s Lien. The Bank is not challenging this foreclosure; rather, the Bank is seeking a
declaration that the Bank’s Lien is senior and superior to Stockdick’s Lien notwithstanding the
foreclosure of Stockdick’s Lien.
25
Reconveyance Corp., 309 S.W.3d 619, 633–34 (Tex. App.—Houston [14th Dist.] 2010,
no pet.); Red Rock Props. 2005, Ltd. v. Chase Home Fin., L.L.C., No. 14-08-00352-CV,
2009 WL 1795037, at *5–6 (Tex. App.—Houston [14th Dist.] June 25, 2009, no pet.)
(mem. op.); Aquaduct, L.L.C. v. McElhanie, 116 S.W.3d 438, 444–45 (Tex. App.—
Houston [14th Dist.] 2003, no pet.); Burd, 982 S.W.2d at 33 (affirming trial court’s
disposition of competing claims under the Declaratory Judgments Act as to whether a
redemption occurred under section 34.21). The trial court erred to the extent it granted
Stockdick’s motion for summary judgment based upon the fourth summary-judgment
ground.
Because none of grounds in Stockdick’s motion for summary judgment provide a
basis for affirming the trial court’s judgment, this court should conclude that the trial
court erred in granting the motion.
The trial court did not err in denying the Bank’s summary-judgment motion.
On appeal, the Bank also asserts that the trial court erred in denying the Bank’s
motion for summary judgment. Though the Bank raised various issues, including
estoppel, in response to Stockdick’s summary-judgment motion, the Bank did not assert
estoppel in its motion. Instead, the Bank moved for summary judgment based only on
the ground that, as a matter of law, the Wittenbergs redeemed the Property under section
34.21(a), and therefore the Bank’s Lien is now a valid first lien on the Property. These
arguments lack merit for the reasons addressed above. Therefore, the trial court did not
err in denying the Bank’s motion for summary judgment.
CONCLUSION
Under the unambiguous language of Tax Code section 34.21, an owner may not
provide a promissory note to the purchaser to satisfy the requirement of “paying” any part
of the redemption amount under section 34.21(a). Thus, the Wittenbergs did not satisfy
the requirements of section 34.21(a) for redeeming the Property. Nonetheless, there are
genuine fact issues as to the meaning of the ambiguous language of the Deed and as to
whether Stockdick is precluded under the doctrine of quasi-estoppel from denying that
26
the Wittenbergs redeemed the Property through the Deed in December 2007. None of the
grounds in Stockdick’s summary-judgment motion provide a basis for affirming the trial
court’s judgment. Therefore, the trial court erred in granting this motion. Because the
Bank did not prove its entitlement to summary judgment on the grounds asserted in its
summary-judgment motion, the trial court did not err in denying this motion.
Accordingly, this court should reverse the trial court’s judgment and remand for further
proceedings. Because this court does not do so, I respectfully dissent.
/s/ Kem Thompson Frost
Justice
Panel consists of Chief Justice Hedges and Justices Frost and Seymore. (Seymore, J.,
majority).
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