Court of Appeals of Texas, Fifth District, Dallas
Appeal from the 429th Judicial District Court Collin County,
Texas Trial Court Cause No. 429-01773-2008
Chief Justice Wright and Justices Bridges and Brown
L. BRIDGES JUSTICE.
Bank's October 28, 2016 motion for rehearing is granted.
We withdraw our opinion issued October 13, 2016, and vacate
our judgment of that date. The following is now the opinion
of the Court.
Martin appeals the trial court's judgment awarding
PlainsCapital Bank $332, 927.27 in damages and $127, 558.24
in attorney's fees on PlainsCapital's counterclaim
for damages resulting from Martin's default under
residential construction loan documents.
original submission, this Court reversed the trial
court's judgment and remanded to the trial court for
further proceedings, holding: (1) the trial court erred in
determining section 51.003 of the Texas Property Code did not
apply to PlainsCapital's deficiency suit against Martin;
(2) "fair market value, " for purposes of
determining a deficiency under section 51.003, was the
historic measure of fair market value: the price a property
would bring when offered for sale by one who desired to sell,
but was not obliged to sell, and was bought by one who
desired to buy, but was under no necessity of buying; (3)
neither evidence of the price a property sold for at
foreclosure nor the actual future sale price constituted
competent evidence of fair market value under section 51.003;
(4) the evidence was therefore legally insufficient to
support the trial court's damages award; and (5) remand
to the trial court was necessary for a determination of fair
market value, holding costs and sales expenses incurred by
PlainsCapital, and attorney's fees.
Texas Supreme Court agreed that PlainsCapital's claim
against Martin falls within the provisions of section 51.003.
However, as to "fair market value" as used in
section 51.003, the court reasoned as follows:
The Legislature used the phrase "fair market value"
in § 51.003 without defining it, so we would ordinarily
presume the common meaning of the term applies, as did the
court of appeals. However, the statute enumerates categories
of evidence and clearly specifies that they may be considered
by trial courts in determining fair market value. Tex. Prop.
Code § 51.003(b). For example, § 51.003(b)(5)
specifies that a trial court, when calculating the fair
market value as of the date of the foreclosure sale, may
consider evidence of "the necessity and amount of any
discount to be applied to the future sales price." This
factor is forward looking, allowing the trial court to
consider the price for which the lender eventually sells the
property and to apply a discount, if appropriate, to
determine a value as of the foreclosure sale date. It may
seem odd to make the price for which the property sold after
foreclosure an integral component of competent evidence of
the property's fair market value on the foreclosure sale
date, but that is clearly what the Legislature intended. If
it were not, then the relevant part of § 51.003(b)(5)
would be nonsensical because an unknown fair market value,
which is the value being sought, cannot mathematically be
determined by applying a discount to an unknown future sales
price, nor could either a prospective buyer or the seller
know what the future sales price will be in order to factor
it into their decision to buy or sell, regardless of whether
a discount factor is applied. And we do not attribute to the
Legislature an intent to enact nonsensical statutes.
See Tex. Gov't Code § 311.021(3) ("In
enacting a statute, it is presumed that . . . a just and
reasonable result is intended . . . ."); Hernandez
v. Ebrom, 289 S.W.3d 316, 321 (Tex. 2009). Further, if
we were to rule the future sales price competent evidence,
but only upon a showing of comparable market conditions
between the foreclosure sale and the future sale, we would be
adding words to § 51.003. We refuse to do that in the
absence of clear legislative intent to reach a different
result from that reached by applying the plain language of
the statute, or to prevent the statute from yielding an
absurd or nonsensical result. See Helena Chem. Co. v.
Wilkins, 47 S.W.3d 486, 493 (Tex. 2001). Therefore, the
enumerated factors in § 51.003(b) will support a fair
market value finding under the statute even though that type
of evidence might not otherwise be competent in the common or
historical fair market value construct. That being so, the
term "fair market value" in § 51.003 does not
equate precisely to the common, or historical, definition.
Rather, it means the historical definition as modified by
evidence § 51.003(b) authorizes the trial court to
consider in its discretion, to the extent such evidence is
not subsumed in the historical definition.
PlainsCapital Bank v. Martin, 459 S.W.3d 550, 556-57
record in this case, the Texas Supreme Court concluded
"the trial court did not abuse its discretion by
calculating the property's fair market value using the
$599, 000 future sales price, not applying a discount to
reduce the price further, and deducting PlainsCapital's
actual holding costs of $75, 376.41 and actual sales costs of
$45, 907.04." Id. at 558. The court further
concluded the evidence was legally sufficient to support the
trial court's finding that the fair market value of the
property on the date of the foreclosure sale for section
51.003 purposes was $477, 715.65. Id.
remand, we must determine (1) whether, if the issue was
preserved for our review, the evidence was factually
sufficient to support the trial court's fair market value
determination; (2) whether the evidence was legally and
factually sufficient to support the trial court's
determination of PlainsCapital's holding and sales costs;
and (3) whether, in light of our resolution of these issues,
we should affirm the trial court's award of
attorney's fees to PlainsCapital.
initial matter, we note that Martin argued in his original
brief, among other things, that the evidence was factually
insufficient to support the trial court's finding that
the fair market value of the property was $477, 715.65.
Martin challenged the factual sufficiency of the evidence to
support the trial court's use of $599, 000, the sale
price fifteen months after foreclosure, to calculate fair
market value. In its original brief and on remand,
PlainsCapital does not argue that Martin has waived his
challenge to the factual sufficiency of the evidence, and
PlainsCapital addresses the merits of Martin's factual
sufficiency challenge. Accordingly, we conclude Martin's
factual sufficiency challenge is preserved for our review.
appeal from a bench trial, the trial court's findings of
fact have the same weight as a jury verdict. Fulgham v.
Fischer, 349 S.W.3d 153, 157 (Tex. App.-Dallas 2011, no
pet.). When, as here, the appellate record contains a
reporter's record, findings of fact are not conclusive
and are binding only if supported by the evidence.
Id. We review a trial court's findings of fact
under the same legal and factual sufficiency of the evidence
standards used when determining if sufficient evidence exists
to support an answer to a jury question. Id. (citing
Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.
1994)). When an appellant challenges the factual sufficiency
of the evidence on an issue, we consider all the evidence
supporting and contradicting the finding. Id.
(citing Plas-Tex, Inc. v. U.S. Steel Corp., 772
S.W.2d 442, 445 (Tex. 1989)). We set aside the finding for
factual insufficiency only if the finding is so contrary to
the evidence as to be clearly wrong and manifestly unjust.
Id. (citing Cain v. Bain, 709 S.W.2d 175,
176 (Tex. 1986) (per curiam)). In a bench trial, the trial
court, as factfinder, is the sole judge of the credibility of
the witnesses. Id. As long as the evidence falls
"within the zone of reasonable disagreement, " we
will not substitute our judgment for that of the factfinder.
Id. (quoting City of Keller v. Wilson, 168
S.W.3d 802, 822 (Tex. 2005)).
appellant challenges the legal sufficiency of an adverse
finding on which he did not have the burden of proof at
trial, he must demonstrate there is no evidence to support
the adverse finding. Id. When reviewing the record,
we determine whether any evidence supports the challenged
finding. Id. If more than a scintilla of evidence
exists to support the finding, the legal sufficiency
challenge fails. Id.; see also King Ranch, Inc.
v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (more than
scintilla of ...