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Jelinis, LLC v. Hiran

Court of Appeals of Texas, Fourteenth District

May 31, 2018

JELINIS, LLC, Appellant
v.
S. BRUCE HIRAN AND HUNG N. YI, Appellees

          On Appeal from the 151st District Court Harris County, Texas Trial Court Cause No. 2017-06257

          Panel consists of Chief Justice Frost and Justices Boyce and Jewell (Frost, C.J., concurring).

          OPINION

          William J. Boyce Justice.

         Jelinis, LLC appeals a temporary injunction order in favor of appellees S. Bruce Hiran and Hung N. Yi. Jelinis argues that the trial court erred by enjoining it from (1) evicting Hiran and Yi because they pleaded no cause of action against Jelinis; and (2) taking legal action in the justice court to evict Hiran and Yi because they failed to show that "the justice court was without jurisdiction to determine possession." We reverse and render in part and affirm in part.

         Background

         Hiran signed a Texas Home Equity Note on June 6, 2006, in the amount of $800, 000 payable to Long Beach Mortgage Company. On the same day, Hiran and his wife Yi signed a Texas Home Equity Security Instrument confirming that the loan was secured by residential real property located at 4132 Lehigh Avenue in Houston, Texas. The note and deed of trust were later transferred to Deutsche Bank National Trust Company. Select Portfolio Servicing, Inc. acted as the loan servicer.

         Appellees defaulted on their loan in October 2012. Select Portfolio sent notices of default in December 2012 and May 2013. Appellees ignored the notices Select Portfolio sent them. Deutsche Bank, as trustee, in trust for registered holders of Long Beach Mortgage Loan Trust 2006-10, filed an Application for Home Equity Foreclosure Order pursuant to Texas Rule of Civil Procedure 736 on January 22, 2014. Deutsche Bank nonsuited the action and filed suit in the 270th District Court on September 8, 2014, seeking a declaratory judgment and an order authorizing foreclosure.

         Deutsche Bank filed a traditional summary judgment motion, contending that (1) it is entitled to a declaration of its right to foreclose on appellees' home and to an order authorizing foreclosure because its summary judgment evidence established that a debt exists, the debt is secured by a lien for a home equity loan, a default under the note and deed of trust exists, and the requisite notices to cure the default have been provided to appellees; and (2) appellees should not be allowed to deny executing the loan documents because Hiran refused to testify at his deposition regarding "any issues relating to whether he signed the applicable loan documents and refused to provide any handwriting exemplars, based on his assertion of the Fifth Amendment."

         The 270th District Court granted Deutsche Bank's summary judgment motion and signed a Final Judgment for Declaratory Relief and Order Authorizing Foreclosure on December 3, 2015. This judgment (1) disposed of all claims; (2) awarded "an in rem Judgment" against appellees authorizing a non-judicial foreclosure sale of appellees' home "pursuant to the terms and conditions of the subject Texas Home Equity Security Instrument and TEX. PROP CODE §51.002;" and (3) ordered that the final judgment "serves as an Order of Foreclosure of a Home Equity Lien."

         Deutsche Bank sold the home at a foreclosure sale to Jelinis on December 6, 2016. Jelinis filed a forcible detainer suit regarding the home on January 12, 2017.

         Appellees filed suit in the 151st District Court on January 30, 2017, naming as parties Long Beach Mortgage Company, Deutsche Bank, and Jelinis, and alleging that the "actions committed by Long Beach Mortgage Company" constitute statutory fraud and breach of contract, and that the "actions committed by Deutsche Bank" constitute common law fraud and breach of contract. Appellees alleged that, "although their signatures appear to be valid, certain pages of the Note and Deed of Trust must have been switched by representatives of Long Beach Mortgage Company . . . because [appellees]' Home Equity Loan was a fixed rate of 2% interest and, instead, the Note and Deed of Trust attached as exhibits to the Foreclosure Lawsuit are purported to be an adjustable rate note at 7.975% interest."

         Appellees further alleged that "the exhibits which are the legal basis for Deutsche Bank's being awarded a judgment authorizing them [sic] to sell [appellees]' Property at a foreclosure sale are fraudulent; therefore, the foreclosure sale of [appellees]' Property should be deemed void and rescinded. Moreover, [appellees] allege[d] that the Home Equity Loan itself was fraudulent as a result of Long Beach Mortgage's representatives switching the loan documents unbeknownst to [appellees]; therefore, [appellees]' home equity loan should be deemed void ab initio."

         Appellees requested that the trial court (1) issue a temporary restraining order and then a temporary injunction enjoining Jelinis from selling appellees' home "as well as from taking any legal action to evict [appellees];" (2) enter a judgment in favor of appellees "to rescind the foreclosure sale of" appellees' home and "to declare the home equity loan dated June 06, 2006 between [appellees] as well as Long Beach Mortgage Company as void ab initio;" and (3) enter a judgment against Long Beach Mortgage Company and Deutsche Bank for actual and exemplary damages and attorney's fees.

         Attached to appellees' petition was Hiran's affidavit in which he stated in pertinent part:

2. The subject matter of this lawsuit is the real property and the improvements thereon located at 4132 Lehigh Avenue, Houston, TX 77005 (the "Property").
3. The Property was owned by my wife Hung N. Yi and I on June 06, 2006 on which date we entered into a Home Equity Loan. During the process of entering into the Home Equity Loan, we executed a Texas Home Equity Note ("Note") in the amount of $800, 000 which was payable to Long Beach Mortgage Company ("Long Beach"). In addition, we executed a Texas Home Equity Security Instrument ("Deed of Trust").
4. . . . the Note and Deed of Trust were subsequently transferred to Deutsche Bank National Trust . . . .
5. During the term of the Note, we began to receive notices that we were past due on the payments of the Note. We did not understand how that could be true since we were making our payments on the Note in full and in a timely manner. Accordingly, we expected that the notices must be a clerical error which will be remedied in due course. As such, we ignored the delinquency notices which we received from SPS.
6. Due to the nature and extent of Plaintiffs' perceived delinquency, Deutsche Bank filed an Application for Home Equity Foreclosure . . . [i]n the 270th Judicial District Court of Harris County, Texas (the "Foreclosure Lawsuit").
7. The Foreclosure Lawsuit culminated in a Final Judgment for Declaratory Relief and Order Authorizing Foreclosure and the Property was sold by Deutsche Bank to Jelinis, LLC ("Jelinis") at a foreclosure sale on December 06, 2016.
8. During the course of investigating this lawsuit, I informed my legal counsel that we did not execute the Note and Deed of Trust which were attached as exhibits to the Foreclosure Lawsuit. Instead, I assert that, although our signatures appear to be valid, certain pages of the Note and Deed of Trust must have been switched by representatives of Long Beach Mortgage Company ("Long Beach Mortgage") because our Home Equity Loan was a fixed rate of 2% interest and, instead, the Note and Deed of Trust attached as exhibits to the Foreclosure Lawsuit are purported to be an adjustable rate note at 7.975% interest.

         The trial court granted appellees' request for a temporary restraining order and set a hearing on appellees' temporary injunction request. Appellees nonsuited their claims against Deutsche Bank without prejudice on February 22, 2017.

         Jelinis filed an Objection to Plaintiff's Request for Temporary Injunction on February 23, 2017, arguing that the trial court should not enjoin the justice court from exercising its jurisdiction to hear Jelinis's forcible detainer suit. Jelinis argued that the justice court only loses jurisdiction if "the right to possession is so interrelated with title so as to make a determination of title necessary before a determination of possession can be made." According to Jelinis "there is a way to determine the issue of possession without reaching the merits of title" because the "foreclosed deed of trust created a tenancy-at-sufferance upon foreclosure" and appellees as tenants at sufferance "may be removed by a writ of possession."

         The trial court held a hearing on February 24, 2017. Hiran testified that the note and deed of trust introduced at the hearing and in the 270th District Court proceeding were not the documents he signed because the documents reference an adjustable interest rate of 7.975 percent and his home equity loan was for a fixed interest rate of 2.25 percent. Hiran, who is an attorney, testified that it is "typical that a contract that was entered into as a fraudulent transaction would be deemed void in [his] legal opinion." Hiran also stated that, in his legal opinion, he believed appellees are in "imminent danger of irreparable harm as the result of the forceful detainer lawsuit that's currently pending in JP court." But Hiran acknowledged that the signature on the documents "appears to be" his signature and that he did not have a copy of the note and deed of trust he and his wife signed at closing in 2006.

         At the conclusion of the hearing, the trial court instructed the parties to file briefs addressing the issue of res judicata "in conjunction with the element of a temporary injunction that is the likelihood of success on the merits, " so that the court could "take a look at what actually happened in the 270th, what the proceedings were and whether they do have preclusive effect at all in this lawsuit and, if so, to what extent." Jelinis filed a Brief in Opposition to Temporary Injunction as requested by the trial court. In its brief, Jelinis argued that appellees' claims in "this lawsuit were compulsory counterclaims arising out of the same subject matter as the lawsuit brought by Deutsche Bank on September 8, 2014, " and, therefore, are barred by res judicata.

         The trial court signed an order granting a temporary injunction on March 10, 2017, enjoining Jelinis from selling appellees' home and from taking any legal action to evict appellees, including pursuing Jelinis's forcible detainer suit in justice court. The court also stated in its order that it "finds that the final relief granted in the lawsuit in the 270th District Court was only in rem pursuant to TRCP 735 and therefore likely does not have preclusive effect on [appellees'] claims in this suit as a matter of law." Jelinis filed a timely interlocutory appeal.[1]

         Analysis

         Jelinis argues in two issues that the trial court erred by enjoining it from (1)evicting appellees because they pleaded no cause of action against Jelinis; and (2)taking legal action in the justice court to evict appellees because they failed to show that "the justice court was without jurisdiction to determine possession."

         I. Standard of Review

         A temporary injunction is an extraordinary remedy and does not issue as a matter of right. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002) (op. on reh'g). To obtain a temporary injunction, an applicant must plead and prove three specific elements: (1) a cause of action against the defendant; (2) a probable right on final trial to the relief sought; and (3) a probable, imminent, and irreparable injury in the interim. Id.

         We generally review a district court's grant of a temporary injunction for an abuse of discretion. Pinnacle Premier Props., Inc. v. Breton, 447 S.W.3d 558, 562 (Tex. App.-Houston [14th Dist.] 2014, no pet.) (op. on reh'g) (citing McGlothlin v. Kliebert, 672 S.W.2d 231, 232 (Tex. 1984)). When consideration of evidence is required, we view it in the light most favorable to the trial court's order, indulging every reasonable inference in favor of the trial court's determination. LasikPlus of Tex., P.C. v. Mattioli, 418 S.W.3d 210, 216 (Tex. App.-Houston [14th Dist.] 2013, no pet.).

         "Although an abuse of discretion does not occur when the trial court heard conflicting evidence and substantive, probative evidence reasonably supports the trial court's decision, we will apply a de novo standard of review when the issue turns on a pure question of law." Pinnacle Premier Props., Inc., 447 S.W.3d at 562. Subject matter jurisdiction is a question of law. Espinoza v. Lopez, 468 S.W.3d 692, 695 (Tex. App.-Houston [14th Dist.] 2015, no pet); Maxwell v. U.S. Bank Nat'l Ass'n, No. 14-12-00209-CV, 2013 WL 3580621, at *2 (Tex. App.-Houston [14th Dist.] July 11, 2013, pet. dism'd w.o.j.) (mem. op.).

         II. Waiver

         Before we analyze Jelinis's challenge of the trial court's temporary injunction order, we address appellees' request to strike Jelinis's appellate brief because the "brief lacks a section pertaining to the Issue Presented or Presentment of the Issues" as required in Texas Rule of Appellate Procedure 38.1(f).

         Appellees do not cite any case in which a court has struck an appellate brief because a party failed to include an "Issues Presented" section in its brief. Instead, appellees rely on White v. Harvest Credit Management V, No. 14-04-00349-CV, 2004 WL 2297367 (Tex. App.-Houston [14th Dist.] Oct. 14, 2004, no pet.) (per curiam) (mem. op.), to support their request to strike. But White is inapplicable.

         In White, this court struck appellant's brief only after (1) appellant failed to timely file a brief pursuant to Texas Rule of Appellate Procedure 38.6; (2) appellant failed to file a motion for extension of time; (3) this court informed appellant that it would dismiss his appeal for want of prosecution unless he filed a brief; (4) appellant filed a letter with this court explaining that he had filed a brief in the trial court and also "attached a copy of the document he refer[ed] to as a brief that he filed" in the trial court; (5) this court informed appellant that his "letter d[id] not comply with the requirements for briefs contained in the Texas Rules of Appellate Procedure" 9.4 and 38.1 and granted appellant an extension of time to file a brief that conforms to the rules; (6) "appellant tendered a brief that did not comply with the Texas Rules of Appellate Procedure;" (7) this court returned the brief to appellant for correction; (8) "appellant submitted another nonconforming brief, which was also returned for correction;" and (9) appellant then filed a brief that complied with the rules of form but failed to comply with the briefing requirements set forth in Rule 38.1, and "[m]ost significantly, appellant . . . failed to make any legal arguments to support reversal of the judgment, and the brief contain[ed] no citations to the record or to legal authorities." Id. at *1.

         Here, Jelinis's brief contains every section listed in Rule 38.1, except for an "Issues Presented" section. Jelinis presented in the body of its brief "a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record." See Tex. R. App. P. 38.1(i).

         We deny appellees' request to strike Jelinis's appellate brief for failure to include an "Issues Presented" section in its appellate brief. See Weeks Marine, Inc. v. Garza, 371 S.W.3d 157, 162 (Tex. 2012); Perry v. Cohen, 272 S.W.3d 585, 587 (Tex. 2008) (per curiam); Verburgt v. Dorner, 959 S.W.2d 615, 616-17 (Tex. 1997).

         Having rejected appellees' request to strike Jelinis's brief, we now turn to Jelinis's arguments challenging the trial court's order enjoining Jelinis from taking legal action in the justice court via a forcible detainer suit to evict appellees.

         III. Justice ...


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