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Reynoso v. Dibs US, Inc.

Court of Appeals of Texas, Fourteenth District

December 5, 2017

MARIA DEJESUS REYNOSO, Appellant
v.
DIBS US, INC., Appellee

         On Appeal from the County Civil Court at Law No. 4 Harris County, Texas Trial Court Cause No. 1073891.

          Panel consists of Chief Justice Frost and Justices Brown and Jewell.

          OPINION

          KEM THOMPSON FROST, CHIEF JUSTICE

         The appellant raises jurisdictional and constitutional challenges to the adverse judgment rendered against her by the county court at law in this forcible-detainer action. She asserts the justice court and the county court at law lacked jurisdiction over the action. Additionally, the appellant, who suffered foreclosure of her home and is challenging the validity of the foreclosure in other litigation, asserts various constitutional challenges to Texas's statutory scheme for forcible-detainer actions. She argues the statutory scheme violates her due process rights because the justice court can resolve the forcible-detainer action and she can lose the right to possession before resolution of her separate lawsuit challenging the validity of the foreclosure. We conclude that the lower courts had jurisdiction over the forcible-detainer action and that appellant has not met her burden to show a violation of due process.

         I. Factual and Procedural Background

         Appellant/defendant Maria DeJesus Reynoso purchased property at 6610 Bellaire Gardens in Houston, Texas ("Property") in 2001, and signed a deed of trust creating a lien on the Property in connection with the transaction. Fourteen years later, the current holder of the deed-of-trust lien, Wells Fargo Bank, N.A. noticed a non-judicial foreclosure of the lien, and the substitute trustee conducted a foreclosure sale in November 2015. The substitute trustee signed a Substitute Trustee's Deed purporting to convey the Property to appellee/plaintiff Dibs US, Inc., the highest bidder at the foreclosure sale.

         The substitute trustee conducted the foreclosure sale under a deed of trust ("Deed of Trust") that included a clause expressly stating that in the event of a foreclosure sale, (1) Reynoso's right to occupy the Property ceases upon the sale of the Property, and (2) Reynoso has no right to occupy the Property without the written consent of the Property's new owner (the "Clause").

         Dibs sent Reynoso a notice to vacate in January 2016. When Reynoso did not vacate the Property, Dibs filed a forcible-detainer action in the justice court. The justice court signed a judgment granting Dibs possession of the Property. Reynoso appealed the justice-court judgment to the county court at law. In the county court at law, Reynoso filed a motion to dismiss the suit.

         In her motion to dismiss, Reynoso asserted that (1) Reynoso had sued Wells Fargo in the district court asserting various claims including wrongful foreclosure; (2) the Clause violates Reynoso's due process rights under the Texas Constitution and the United States Constitution because the provision allows the purchaser of the Property at a foreclosure sale to bring a forcible-detainer action in the justice court even though a district court has jurisdiction over Reynoso's claim that Wells Fargo wrongfully foreclosed on the Property; and (3) the issue of possession is intertwined with the issue of title to the Property and therefore the district court has exclusive jurisdiction and the county court at law has no jurisdiction over this forcible-detainer action. The county court at law signed an order denying Reynoso's motion to dismiss. After a trial de novo, the county court at law signed a final judgment granting Dibs possession of the Property.

         Reynoso now appeals the judgment, asserting, among other things, that (1) the lower courts lacked jurisdiction over the forcible-detainer action; (2) the Clause violates her due process rights; (3) the county court at law's enforcement of the Clause violated her right to due process of law; and (4) the statutory scheme granting the justice court jurisdiction over this forcible-detainer action violates due process of law.

         II. Analysis

         Reynoso obtained an adverse ruling from the county court at law on her motion to dismiss, in which she raised various jurisdictional and constitutional issues, and we presume for the sake of argument that she preserved error thereby as to all of her non-jurisdictional appellate issues. Reynoso did not need to preserve error on her challenges to the justice court's subject-matter jurisdiction because parties may not waive challenges to subject-matter jurisdiction and may raise them for the first time on appeal. See Tex. Ass'n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 445 (Tex. 1993). Subject-matter jurisdiction is a question of law that we review de novo. Graber v. Fuqua, 279 S.W.3d 608, 631 (Tex. 2009).

         A. Alleged lack of jurisdiction in the justice court

         Under her first, second, and fifth issues, Reynoso asserts that the justice court lacked jurisdiction over the forcible-detainer action because the possession issue is intertwined with the issue of title to the Property.

         The justice court of the precinct where the Property is located has subject-matter jurisdiction to hear a forcible-detainer action relating to the Property. See Tex. Prop. Code Ann. § 24.004 (West, Westlaw through 2017 1st C. S.); Maxwell v. U.S. Bank Nat. Ass'n, No. 14-12-00209-CV, 2013 WL 3580621, at *2 (Tex. App.-Houston [14th Dist.] Jul. 11, 2013, pet. dism'd w.o.j.) (mem. op.). The county court at law has jurisdiction over an appeal of the justice-court judgment in a forcible-detainer action. Maxwell, 2013 WL 3580621, at *2. Both the justice court and the county court at law lack jurisdiction to resolve title disputes. Id. Because they lack jurisdiction to resolve title disputes, the justice court and county court at law determine possession, and only possession, in forcible-detainer actions and appeals. See Glapion v. AH4R I TX, LLC, No. 14-13-00705-CV, 2014 WL 2158161, at *1 (Tex. App.-Houston [14th Dist.] May 22, 2014, no pet.) (mem. op.).

         When the justice court cannot determine the right to possession without resolving a title dispute, neither the justice court nor any court hearing an appeal from the justice-court judgment has jurisdiction. See Maxwell, 2013 WL 3580621, at *2. The justice court, and the county court of law on appeal, lack jurisdiction over a forcible-detainer action if the question of title is so intertwined with the issue of possession that possession cannot be adjudicated without first determining title. Id. When there is a basis for determining immediate possession independent from title, the justice court will have jurisdiction to hear the forcible-detainer action. See Hossain v. Fed. Nat'l Mortg. Ass'n, No. 14-15-00273-CV, 2015 WL 3751548, at *2 (Tex. App.-Houston [14th Dist.] Jun. 16, 2015, pet. dism'd w.o.j.) (mem. op.). If the deed of trust contains a provision that in the event of a foreclosure sale, the grantor in the deed of trust will become a tenant at sufferance, then the trial court can resolve possession without resort to title. See id.

         In her appellate brief, Reynoso asserts that she filed suit against Wells Fargo in the Harris County district court, asserting various claims, including a claim for wrongful foreclosure, and the suit was removed to federal district court. The Deed of Trust (which Reynoso signed) contains the Clause, under which Reynoso agrees:

If Lender acts to have the Property sold after a Breach of Duty as defined in Paragraph 28, I understand and agree that: (A) my right to occupy the Property ceases at the time the Property is sold; (B) I shall have no right to occupy the Property ...

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