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Cohen v. Tour Partners, Ltd.

Court of Appeals of Texas, First District

April 27, 2017

JAY COHEN, Appellant

         On Appeal from the 55th District Court Harris County, Texas Trial Court Case No. 2013-68181

          Panel consists of Justices Keyes, Brown, and Huddle.



         Tour Partners, Ltd. asserted third-party claims against Jay Cohen related to a failed real estate transaction. Cohen asserted counterclaims against Tour Partners and argued that Tour Partners had participated in a fraudulent transfer of real property. Tour Partners moved for summary judgment on the counterclaims, arguing that limitation had run. In the course of the summary-judgment proceeding, Cohen made a statement that the trial court treated as a judicial admission. Based on that admission, the trial court entered summary-judgment against Cohen on limitations grounds.[1]

         We conclude that the trial court erred in granting summary-judgment on limitations grounds and reverse the summary-judgment order. The trial court has not ruled on the merits of Cohen's counterclaims or on various other defensive arguments raised by Tour Partners. We remand for consideration of those arguments.


         Jay Cohen once held a one-third ownership interest in property located at 2017 Preston Avenue in Houston. That property has had a complicated history of transferred ownership. The following individuals and entities have asserted an interest in the property in the order they are listed: (1) Jay Cohen, (2) Preston Realty Corporation, which is controlled by Matthew Dilick, (3) Tour Partners, and (4) Ellington F Holdings, LLC.

         There has been a great deal of litigation over this property. Cohen has initiated two suits. The first was filed in 2010 against Dilick in the 234th District Court of Harris County. We refer to it as Suit Number One. The second was filed in 2013 against Tour Partners in the 269th District Court of Harris County. We refer to it as Suit Number Two. While Cohen was asserting claims against Tour Partners in Suit Number Two, Ellington filed Suit Number Three (this suit) against Tour Partners in the 55th District Court of Harris County. Tour Partners tried to consolidate the two suits against it (Suit Number Two and Suit Number Three), but its motion was denied. Thereafter, Tour Partners asserted third-party claims in this suit against Cohen, who added his own counterclaims against Tour Partners. At that point, Cohen had claims against Tour Partners pending in two suits.

         Tour Partners moved for summary judgment in Suit Number Two on all Cohen's pending claims. The motion was granted, but it did not fully resolve that case against Tour Partners because Cohen had added a fraudulent-transfer claim while the summary-judgment motion was pending. Later, Cohen nonsuited the fraudulent-transfer claim in Suit Number Two and, on the same day, added it as a counterclaim in Suit Number Three.

         Tour Partners moved for summary judgment in Suit Number Three on Cohen's counterclaims. One of its arguments was that the limitations period had expired on those claims. While the summary-judgment motion was pending, Cohen made a statement regarding the document that purported to transfer ownership of the property from Dilick's entity to Tour Partners. The trial court treated Cohen's statement as a judicial admission and, based on that admission, held that limitations had expired and granted Tour Partners summary judgment on that basis.

         We discuss below the document Cohen commented on, what Cohen said about it, and the trial court's limited ruling based on Cohen's statement.

         A. The "deed" and Tour Partners's argument that Cohen's knowledge of the deed began the limitations period for his claims

         In February 2010, a "special warranty deed" was filed in the Harris County Public Records that lists Preston Realty Corporation, a Dilick-controlled entity, as a "grantor, " Tour Partners as a "grantee, " and the Preston Avenue property as the subject property. It contains the following terms and no more:

Date: February 1, 2010
Grantor: Preston Realty Corporation [address]
Grantee: Tour Partners Limited [address]
Consideration: Cash and other good and valuable consideration
Property: 2017 Preston, Houston, Texas 77002 consisting of Lots One [and other described areas of real property].

         The "deed" did not include any statements of conveyance; it described neither the percentage of ownership interest being transferred nor the type of interest to be conveyed (e.g., fee simple, life estate, mineral rights).

         Cohen found out about this filing in April 2010 but stated that he believed the "deed" was void because it lacked conveyance language.

         Tour Partners argued in its summary-judgment motion filed in Suit Number Three that Cohen had sufficient knowledge to begin the limitations period on his claims against it no later than April 2010 when he found out about the document. According to Tour Partners, it was entitled to summary judgment on limitations grounds because Cohen did not assert claims against it in Suit Number Three until November 2014, which was more than four years later. Alternatively, Tour Partners argued that Cohen had no evidence on at least one element of each of his claims, and Tour Partners, therefore, was entitled to summary judgment on no-evidence grounds.

         Cohen responded by arguing that the 2010 "deed" did not have any language of conveyance and, therefore, neither the filing of that document nor his knowledge of it could have begun the limitations period on his fraudulent-transfer and other claims. He also requested time to conduct discovery to respond to the no-evidence motion, pointing out that he was added to Suit Number Three after the discovery period had ended.

         B. Cohen's statement

         The trial court held a hearing on the summary-judgment motion. The next day, Cohen filed a brief to "correct" his "misinterpretation of law regarding the nature of [the] 2010 deed." The brief recounted his counsel's earlier statement that the 2010 "deed" had to be treated as a nullity because it lacked the normal language of conveyance. The brief modified the nullity statement to assert that, if the grantor had intended to convey the property through the 2010 "deed, " which Cohen always disputed was the intent, then the document would not be a nullity but would instead be, at most, "nothing more than a quitclaim deed":

The lack of conveyance language does not automatically render the 2010 Deed a nullity (unless that was the intent of the grantor). The lack of language of conveyance in fact renders the 2010 Deed nothing more than a quitclaim deed.

         Cohen continued to maintain in his brief, as he had before, that the applicable limitations periods did not begin to accrue until 2013 when a second, "corrected" deed was filed that did contain the necessary language of conveyance.

         C. The trial court's ruling

         In its order granting Tour Partner's summary-judgment motion, the trial court denied Cohen's request to conduct discovery, explaining that the facts "are fully developed, to the extent necessary to rule on [the affirmative defenses]." The trial court then explained the significance it gave to Cohen's post-hearing statement that the 2010 "deed" is "nothing more than a quitclaim deed." The order states in pertinent part as follows:

Preston Realty purported to convey the Property to [Tour Partners] by way of a "Special Warranty Deed" dated February 4, 2010 (the "2010 Deed.") Cohen points out that this deed does not contain language of conveyance, but concedes that at a minimum it is a quitclaim deed (Brief filed by Cohen's counsel on January 21, 2015.)
A fraudulent transfer claim is extinguished four years after the date of the transfer. Section 24.007(1)(A) states that a transfer of real property occurs when it is perfected as against a third party. Whether a quitclaim or something more, the 2010 Deed was filed of record on February 4, 2010 and thus perfected. It was a "transfer." Cohen's TUFTA claim was filed more than four years later on November 17, 2014. Cohen's fraudulent transfer claim is extinguished.
Cohen admits that he had actual knowledge of the 2010 Deed in April of 2010. For purposes of Cohen's other claims it does not matter whether the 2010 Deed was a nullity, a quitclaim, or something else. His April 2010 actual knowledge was an accrual of all other claims. The Statute of Limitations has run on all such claims.

         With this interlocutory order, Cohen's counterclaims were resolved against him in Suit Number Three. Tour Partner's third-party suit against Cohen continued, as did the claims between Ellington and Tour Partners and its co-defendants, Dennis J. Wilkerson and Eighteen Investments, Inc. Because these other claims remained unresolved, the trial court retained jurisdiction and the ability to enter additional orders.

         D. Tour Partners's second summary-judgment motion

         Two months after the interlocutory summary-judgment order, Tour Partners filed a "supplemental motion for summary judgment, " arguing that Cohen's counterclaims are barred by res judicata. Tour Partners argued that the summary-judgment it obtained in Suit Number Two on all of Cohen's claims (except the later-filed fraudulent-transfer claim) barred his counterclaims in Suit Number Three and that the fraudulent-transfer claim is also barred because it "aris[es] from the same transaction as his other claims." Tour Partners ...

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