The original owners of property in Montgomery County, Texas, filed a suit to quiet title after it was discovered someone fraudulently transferred the property into a fraudster’s name and took out a mortgage on the house. The fraudster went into default, his loan was foreclosed and the property was sold at foreclosure sale. The buyer at that foreclosure sale appealed a state trial court’s decision in the case.
The case is Nixon Family Partnership LP v. Jet Lending LLC and First National Title Insurance Co. (Court of Appeals of Texas, Beaumont, No. 09-20-00201-CV).
The plaintiffs, Mohamad Mazen Saijari and Wahde Seijari, filed the suit against Oayssar Duair, Joseph Robert Shaw, Jet Lending LLC, Capital Title of Texas LLC and Nixon Family Partnership LP. Saijari purchased the property in 2004 by special warranty deed with a vendor’s lien. Saijari alleged that in May 2018, Duair signed and later recorded a fraudulent deed purporting to state that Saijari sold the property to Duair. Saijari argued they did not know anything about the purported sale or know Duair. On July 19, 2018, Jet Lending loaned Duair money and took a lien against the property. The deed of trust listed Duair as the grantor, Jet Lending as the beneficiary and Clifford Harmon as the trustee. Capital Title recorded the deed of trust and provided title insurance to Jet Lending.
Saijari stated they discovered on July 22, 2018, that Jet Lending had the property listed in a foreclosure sale without Saijari’s permission. They alleged that Jet Lending and Capital Title knew the deed of trust from Duair was fraudulent. The property was sold at the foreclosure sale to Nixon. Saijari filed a policy report.
The complaint states that a representative with Capital Title was aware of issues with Duair. Saijari further alleged Duair was indicted for felony theft shortly before Jet Lending obtained the deed of trust against the property. In addition, Duair was indicted for forged deeds. Saijari asserted several causes of action against all the defendants, including a quiet title action, a claim for declaratory judgment and a request for injunctive relief.
Nixon filed a cross-action against Jet Lending, alleging that based on Duair’s fraudulent deed, Jet Lending loaned Duair. [ML1] Capital Title then issued a title policy to Jet Lending underwritten by First National Insurance Co. Among other things, Nixon alleged that despite notice of the fraudulent deed, Jet Lending proceeded to foreclose on its deed of trust lien and sold the property to Nixon. It claims it would not have gone through with the sale had it known of the fraudulent deed and deed of trust. It asserted causes of action for fraud, equitable subrogation, unjust enrichment, respondeat superior, money had and received, breach of contract and statutory fraud against Jet Lending. It sought a judgment against Jet Lending for recission of its purchase price or equitable subrogation
Nixon also filed a third-party complaint against First National Title Insurance Co., seeking equitable subrogation of the policy limits on the title policy if Saijari successfully proved their claims against Nixon. It argues that if the deed from Saijari to Duair is void, then all subsequent transfers of title are also void and Capital Title would owe Jet Lending the policy limits of the mortgagee’s title policy. It further argued that if the Jet Lending deed of trust is void, Jet Lending has a breach of contract claim against First National, and Nixon is subrogated to Jet Lending’s claim. It also asserted a claim for breach of contract and sought damages against First National for the policy limits up to $168,000.
Nixon and First National filed cross-motions for summary judgments on Nixon’s third-party claims against First National. The trial court initially denied First National’s motion for summary judgment and granted Nixon’s motion for summary judgment. It later granted First National’s motion for reconsideration, granted its motion for summary judgment and entered a take-nothing judgment against Nixon on its claim against First National.
A jury returned a verdict in favor of Jet Lending on two questions and found that Jet Lending did not commit fraud against Nixon. It found that Jet Lending committed statutory fraud against Nixon but found that Nixon failed to exercise reasonable diligence in deciding whether the purchase the property at the foreclosure sale. The jury found Nixon was 15 percent at fault and assessed damages of $168,000 and awarded Nixon reasonable and necessary attorney’s fees. Jet Lending filed a motion for judgment notwithstanding the verdict, which the court granted as to the statutory real estate fraud portion of the verdict. It entered an interlocutory take nothing judgment as to Nixon’s claims against Jet Lending.
Nixon filed a motion for a new trial, which was denied, before filing an appeal.
The appellate court affirmed the trial court’s decision, addressing first Nixon’s argument that the trial court erred in striking Nixon’s fourth amended cross-action against Jet Lending. The trial court had found that the amended pleading was untimely and would cause surprise and prejudice to Jet Lending.
“On this record, we cannot say the trial court abused its discretion in striking Nixon’s amended pleading,” the court stated. “The trial court could have reasonably concluded that the amended pleading added allegations and claims premised upon the receipt and reshaped Nixon’s claims, that Jet Lending could not have anticipated the new cause of action in light of the development of the case up to the time the amendment was requested, and that the amendment would detrimentally affect Jet Lending’s presentation of the case. The trial court had discretion to refuse the amendment.”
Nixon also argued the trial court erred in granting summary judgment dismissing Nixon’s breach of contract and equitable subrogation claims against Jet Lending. The appellate court noted that Nixon failed to allege in its third amended cross-action against Jet Lending (the live pleading at the time the court granted Jet Lending’s motion for summary judgment) or its response an issue it brought up in its fourth amended cross-action, the appellate court is precluded from reviewing the merits of the argument.
“In Issue Four, Nixon argues the trial court erred in granting summary judgment dismissing Nixon’s equitable subrogation claim against Jet Lending, an alternative theory of recovery to Nixon’s claim for recission,” the court stated. “Nixon argues that it purchased the property at a void foreclosure sale and that, under the doctrine of equitable subrogation, as a matter of law Nixon has the right to make an equitable subrogation claim. According to Nixon, because its equitable subrogation claim related to Jet Lending’s note and deed of trust, Jet Lending is a proper defendant for the equitable subrogation claim and not First National.
“The trial court originally granted Jet Lending’s motion for summary judgment as to Nixon’s equitable subrogation claim, and the trial court later modified the order and denied Jet Lending’s motion for summary judgment as to Nixon’s equitable subrogation claim,” the court continued. “Therefore, that issue was not resolved by a summary judgment order. Nixon contends that prior to the jury’s verdict the trial court orally ‘promised’ that the judgment that resulted from the trial would include a provision that Nixon is entitled to equitable subrogation, but the final judgment stated that Nixon was entitled to a ‘take nothing judgment’ on all of Nixon’s claims against Jet Lending. In a civil proceeding like this, a trial court’s written judgment controls over its oral pronouncements.”
Nixon also argued that the trial court erred in granting summary judgment dismissing Nixon’s alternate theory of recovery for equitable subrogation and breach of contract claim against First National.
“The record before us indicates that in its motion for reconsideration First National argued there were three ‘reasons’ why the trial court should grant the motion,” the court stated. “In stating its three reasons, First National also expressly stated that ‘[i]n seeking reconsideration, [First National] is not abandoning any of its previously asserted positions and incorporates same herein.’ So, in filing its motion to reconsider First National did not abandon its other stated grounds for summary judgment. After reconsidering its earlier order denying the summary judgment, the trial court entered an order granting First National’s motion for summary judgment. Therein, the trial court did not state the grounds on which it granted the summary judgment. Nixon does not dispute that the order granting First National’s motion for summary judgment did not state the grounds for the ruling, but Nixon contends that the language in the trial court’s order granting First National’s motion for reconsideration specified the ground upon which the trial court would be granting summary judgment. Nixon cites no authority, nor are we aware of any, that supports Nixon’s position that recitals in an order on a motion for reconsideration would absolve an appellant of challenging all summary judgment grounds on appeal when the summary judgment order itself does not specify the grounds on which the summary judgment was rendered. Because the summary judgment order did not state the grounds upon which the trial court granted summary judgment and Nixon did not challenge all independent bases of First National’s motion for summary judgment on appeal, this court must affirm the summary judgment.”
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