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Transamerica Corp. v. Braes Woods Condo Association, Inc.

Court of Appeals of Texas, Fourteenth District

July 16, 2019

TRANSAMERICA CORP, Appellant
v.
BRAES WOODS CONDO ASSOCIATION, INC., Appellee

          On Appeal from the 129th District Court Harris County, Texas Trial Court Cause No. 2016-12580

          Panel consists of Chief Justice Frost and Justices Zimmerer and Hassan

          MAJORITY OPINION

          MEAGAN HASSAN, JUSTICE

         Appellant, Transamerica Corp ("Transamerica"), appeals the trial court's orders granting Braes Woods Condo Association, Inc.'s ("Braes Woods") motion for summary judgment and motion to show authority. We affirm.

         Background

         Appellant/Plaintiff Transamerica filed suit against Defendant/Appellee Braes Woods. Transamerica pleaded that Yigal I. Bosch ("Bosch") (1) was its former President, (2) owned at least three properties managed by Braes Woods, and (3) died intestate on January 29, 2015. The probate court appointed David Bash ("Bash") (son of Bosch) administrator of Bosch's estate. Bash allegedly learned Braes Woods rented out some of Transamerica's condos without its (the owner's) effective consent and had collected approximately $60, 000 in rent from unauthorized tenants.

         Transamerica sued Braes Woods in Harris County District Court. In its Original Petition, Transamerica alleged conversion of rental payments, fraud, injury to business reputation, "breach of duty good faith and fair dealing", and sought an accounting as well as both injunctive and declaratory relief. Attached thereto was an unsigned and unnotarized document purporting to be an "affidavit". In it, the "affiant" expressly alleged specific facts that would otherwise arguably tend to prove its entitlement to at least some relief.

         Braes Woods countered that Transamerica owed it money for assessments and back rent; alleging non-payment, Braes Woods then initiated foreclosure on three condos. Transamerica sought to enjoin the foreclosure sales. At the April 2, 2016 hearing, the ancillary judge encouraged the parties to discuss the matter and identify alternatives; after doing so, the parties entered into an Agreement under Texas Rule of Civil Procedure 11. Braes Woods' counsel drafted the Rule 11 Agreement, which required (inter alia):

• Transamerica to timely pay the March and April assessments;
• Transamerica to timely pay the entire remaining balance (after offsets and credits) by April 1, 2016;
• Transamerica to post a $2, 000 bond; and
• "π - will produce any offsets or credits by March 16, 2016."

         Transamerica's only compliance was the March payment. Braes Woods sold the condos in May 2016. On June 28, 2016, Braes Woods filed a motion for summary judgment based on Transamerica's breach of the Rule 11 Agreement.

         On August 22, 2016, the trial court held a hearing on Braes Woods' motion for summary judgment based on the alleged violation of the Rule 11 Agreement and granted the motion. The record contains (1) emails from Transamerica's counsel to Braes Woods' counsel repeatedly seeking records reflecting the credits and offsets (albeit without a specific due date)[1] and (2) responses (after the Rule 11 Agreement allegedly had been breached) affirming Braes Woods "had no issue" providing an accounting. The only discovery conducted by the parties was a single Request for Disclosure.

         Following the grant of summary judgment, Braes Woods filed a verified plea to the jurisdiction and verified motion to show authority on September 8, 2016. In the plea to the jurisdiction, Braes Woods alleged Transamerica had forfeited its charter and therefore lacked standing to sue. In its consolidated response, Transamerica argued its corporate forfeiture meant (inter alia) the court's previous orders against it were void; it did not respond to Braes Woods' motion to show authority.

         The court held a hearing on October 3, 2016, and pressed Transamerica's counsel as to why he did not respond to the motion to show authority; Transamerica's counsel insisted a response to said motion was unnecessary as Braes Woods had discovered and presented the (presumably and previously unknown) forfeiture of its charter. Transamerica insisted subject matter jurisdiction was lacking and therefore the trial court's previous orders were void. At the end of the hearing, the trial court granted Braes Woods' motion to show authority, declined to address subject matter jurisdiction, dismissed Transamerica's counsel, and orally struck Transamerica's pleadings (but did not include the language striking the pleadings or dismissing counsel in the final written order).

         Transamerica filed a "Motion to Set Aside \ [sic] Reconsider Partial Summary Judgment; to Abate and\or for New Trial" in which it argued (inter alia) the matter was void in its entirety because the trial court lacked subject matter jurisdiction.

         Analysis

         Transamerica argues in its first issue that the trial court's orders granting Braes Woods' motion for summary judgment and motion to show authority are void because the trial court lacked subject matter jurisdiction. In that regard, Transamerica argues Braes Woods judicially admitted Transamerica lacked capacity to sue or be sued in this case ...


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