Hernandez v. Johnson

          Submitted on September 12, 2018

          On Appeal from the 284th District Court Montgomery County, Texas Trial Cause No. 17-03-03674-CV

          Before McKeithen, C.J., Horton and Johnson, JJ.

          MEMORANDUM OPINION

          HOLLIS HORTON, JUSTICE

         In this appeal, Juan A. Hernandez II argues the trial court erred by issuing a judgment that declares his ex-spouse, Gina Johnson, has an owelty lien^[1] on his homestead. The judgment from which Hernandez appeals is based, in part, on the trial court's rulings on the parties' cross-motions for summary judgment. For the following reasons, we affirm the judgment.

         Background

         Hernandez and Johnson married in March 2006. After marrying, they built a home and a swimming pool on a lot located in Montgomery County Texas. Hernandez's parents gave him the lot, and it was his separate property when Hernandez and Johnson decided to build their home there. To finance the work needed to construct the improvements, Johnson and Hernandez obtained loans. They ultimately converted the loans into a mortgage.^[2]

         In September 2016, after approximately ten years of marriage, Johnson and Hernandez divorced. Ultimately, they resolved their disputes in the divorce through an agreed decree. Under the agreed decree, the trial court confirmed the lot, which is located on South Rayburn Drive, as Hernandez's separate property. The agreed decree, however, required Hernandez to give Johnson a promissory note for $20, 000, secured by an owelty lien burdening the lot.^[3] To comply with the terms in the agreed decree, Hernandez gave Johnson a $20, 000 promissory note. To secure the obligations that Hernandez owed Johnson under the note, he also gave Johnson a deed of trust. The deed of trust identifies the property as the lot on South Rayburn Drive. The deed of trust names Johnson as the beneficiary of the trust, and it gave the trustee the right to sell the property on South Rayburn Drive if Hernandez defaulted on his note.

         Hernandez used the property on South Rayburn Drive to secure his obligation to pay the note. The terms of the note allowed Johnson to accelerate Hernandez's debt if he failed to make the payments required by the terms of the note. One of the provisions in the deed of trust states: "This deed of trust is given to impose an owelty of partition against the entirety of [the tract identified as lot six] in order to comply with the [agreed decree.]" Another provision in the deed of trust gave Johnson the right to foreclose her owelty lien if Hernandez defaulted on the note.^[4]

         In March 2017, Johnson notified Hernandez that he had defaulted on his note and of her intent to accelerate the debt and foreclose. Seeking to stop the foreclosure, Hernandez sued Johnson and the attorney who represented Johnson in her divorce, Jay Wright. In his petition, Hernandez asked that the court grant injunctive and declaratory relief based on his argument that Johnson's deed of trust did "not create a valid lien on [his] homestead[.]"^[5] In response, Johnson filed a general denial and a counterclaim, alleging she was entitled to have the trial court render a judgment declaring that she had the right to foreclose on Hernandez's property under the express terms in the agreements used to create the owelty lien on Hernandez's property on South Rayburn Drive.

         According to the court's docket sheet, in April 2017, Hernandez's attorney appeared in court and announced he was dismissing Hernandez's claims against Jay Wright. About three weeks later, Johnson filed a traditional motion for summary judgment on Hernandez's claims. In her motion, Johnson alleged that Hernandez had agreed to stipulate that he was in default on the $20, 000 promissory note. Johnson asked the trial court to declare she has the right to foreclose on the note even though Hernandez was asserting homestead rights to the property on South Rayburn Drive. She also asked that the trial court dismiss Hernandez's claim against her with prejudice, and that it grant her counterclaim seeking to recover attorney's fees.

         In May 2017, Hernandez filed a motion for summary judgment on his claims against Johnson. In Hernandez's motion, he asked the trial court to declare the owelty lien and deed of trust invalid. According to Hernandez's motion, the language the parties used in the agreed decree when they divorced failed to create a valid owelty lien on his homestead.

         In June 2017, the trial court denied Hernandez's motion for summary judgment. Then, during a hearing on Johnson's motion for summary judgment in July 2017, the trial court advised the parties that Johnson's motion for summary judgment would be granted in part and denied in part. In August 2017, the trial court signed a judgment declaring Hernandez in default on his note. The judgment also declares that Johnson has a valid, enforceable owelty lien on the property on South Rayburn Drive and that his property is subject to foreclosure based on Johnson's "Owelty Deed of Trust Lien." Although Johnson prevailed on her declaratory judgment claims, the trial court denied her request for attorney's fees. The judgment then states the trial court was denying "all other relief" and the judgment is final and could be appealed.^[6]

         On appeal, Hernandez argues that he signed the note and deed of trust solely so the court that handled his divorce could affect a just and equitable division of his and Johnson's marital estate. He claims the court handling his divorce did not have the right to create an owelty lien burdening his separate property because it has always been his homestead. According to Hernandez, the district court handling the case that is the subject of this appeal committed error when it concluded the language in the agreed decree had effectively created a valid owelty lien on his home. He contends the term "owelty lien," as used in the agreed decree, was misused because the lot is now and was at the time of the divorce his separate property. Hernandez concludes the trial court should have granted his motion, declared the lien invalid, and denied the motion Johnson filed.

         In response to these arguments, Johnson contends Hernandez should not be allowed to collaterally attack the language in the agreed decree. She also claims the summary-judgment evidence authorized the trial court to declare the owelty lien is valid because the summary-judgment evidence established the home and pool were built on the property with community funds.^[7] Johnson points to the language in the agreed decree, the $20, 000 note, and the deed of trust to support her arguments that the evidence proved the court handling the divorce required Hernandez to sign the note to settle the reimbursement claims she made in the divorce. Johnson concludes the ...