TITLE RESOURCES GUARANTY COMPANY AS SUBROGEE OF SLS PROPERTIES, Appellant
THE LIGHTHOUSE CHURCH & MINISTRIES, Appellee
Appeal from the 11th District Court Harris County, Texas
Trial Court Case No. 2015-25934
consists of Justices Lloyd, Kelly, and Hightower.
RICHARD HIGHTOWER JUSTICE
Title Resources Guaranty Company ("TRG"), as
subrogee of SLS Properties ("SLS"),
appeals the trial court's summary judgment in favor of
Appellee / Cross-Appellant The Lighthouse Church &
Ministries (the "Church"). In its summary judgment
order, the trial court ruled that TRG take nothing by its
contract cause of action. TRG asks that we reverse and render
judgment in its favor on this claim. It contends that SLS and
the Church's contract for the sale of land unambiguously
obligated the Church to pay taxes that were imposed on the
land post-sale under Tax Code Section 11.201(a). It also asks
that we either render judgment in its favor on its claim for
attorneys' fees or, if we affirm the summary judgment,
affirm the ruling that neither party is entitled to
trial court also granted summary judgment in TRG's favor,
ruling that the Church take nothing by its counterclaims. The
Church has now abandoned its counterclaims. It also
cross-appeals for a rendition of judgment in its favor on its
claim for attorneys' fees.
contract gives rise to an ambiguity, even after interpreting
the plain language of the competing contract provisions and
applying the interpretive canons advanced by the parties. We
therefore reverse the summary judgment in part and remand the
case for further proceedings.
Church acquired a tract of land in late 2011 and received an
exemption from ad valorem taxes on the land under Tax Code
Section 11.20(a)(6). That statute applies to certain land
upon which a religious organization plans to expand or build
a place of regular religious worship. Tex. Tax Code §
11.20(a)(6)(A)-(B). If, however, the religious organization
sells or transfers the land in a year in which the land is
receiving the exemption, "an additional tax is imposed
on the land equal to the tax that would have been imposed on
the land had the land been taxed for each of the five years
preceding the year in which the sale or transfer occurs in
which the land received an exemption . . . ."
Id. § 11.201(a).
the Church agreed to sell the land to SLS. The parties
entered into an Unimproved Property Contract in April 2014 to
govern the sale. The Unimproved Property Contract stemmed
from a form "promulgated by the Texas Real Estate
Commission." Paragraphs 13(A) and 13(B) of the
Unimproved Property Contract address "Prorations"
and "Rollback Taxes," respectively. Because the
land received the exemption under Section 11.20(a)(6) for tax
years 2012, 2013, and 2014, the Church had not been required
to pay taxes on the land for those years.
Church and SLS closed the sale on May 30, 2014. Also on that
day, they and the escrow agent for the sale executed an
"Escrow With[h]old Agreement" (the
"EWA"). Under the EWA, the escrow agent held an
amount of money deposited by the Church "for possible
Tax Rollbacks until" the agent "receive[d] proof of
. . . no additional taxes due from [the] Harris County Tax
Assessor." If there were "additional amounts due
beyond the amount withheld," the EWA required that
"the seller will pay the additional monies to satisfy
the amount due to the Tax assessor/collector."
title insurer for the sale was TRG, under an Owner's
Policy of Title Insurance.
October 2014, the Harris County Appraisal District
("HCAD") sent a letter to the Church and a copy of
it to SLS. The letter advised that HCAD "has canceled
the exemption on the" land sold by the Church to SLS,
and it identified the exemption as the one provided by
Section 11.20(a)(6). The letter went on to cite and
paraphrase most of the language of Section 11.201(a).
taxing entities then demanded payment from SLS for ad valorem
taxes relating to the land for tax years 2012, 2013, and
2014. TRG, on SLS's behalf due to the subrogation
provisions of the title-insurance policy, demanded that the
Church pay those taxes, as allegedly required by the
provisions of SLS and the Church's contract of sale. The
Church refused. TRG then paid the 2012 and 2013 taxes on
SLS's behalf-ultimately $111, 813.95 after certain
refunds-in part to avoid accrual of penalties and interest
and to allow SLS to protest the appraised value of the land
that the taxing authorities used to calculate the taxes they
imposed under Section 11.201(a). For the 2014 taxes, SLS paid
the amounts that accrued after the May 30, 2014 closing, and
the funds that the Church deposited in escrow under the EWA
paid off the amounts that had accrued for January through May
SLS's appraisal protest was denied, SLS petitioned for
judicial review of the protest in court. The protest suit was
subrogee of SLS, filed this suit against the Church. TRG
pleaded causes of action for breach of contract and
quantum meruit. It sought as damages the $111,
813.95 that it had paid for 2012 and 2013 taxes, recovery of
$44, 776.50 for costs it allegedly incurred to mitigate its
damages, and attorneys' fees. The Church answered and
counterclaimed, but the Church represents on appeal that it
has "clearly abandoned its counterclaims." However,
it has not abandoned its claims for attorneys' fees under
the Unimproved Property Contract's "prevailing
the Church's dispute arises largely out of their
competing interpretations of the documents that constitute
SLS and the Church's contract of sale. In short, the
Church contends that Paragraph 13(B) of the Unimproved
Property Contract unambiguously required SLS to pay the 2012
and 2013 taxes imposed by the taxing authorities under
Section 11.201(a). TRG contends that the EWA unambiguously
required the Church to pay those taxes.
parties cross-moved for summary judgment on their competing
theories. On TRG's causes of action for breach of
contract and quantum meruit, the trial court granted
summary judgment in the Church's favor that TRG take
nothing. On the Church's counterclaims, the trial court
granted summary judgment in TRG's favor that the Church
take nothing. The trial court also ruled that neither party
was entitled to attorneys' fees.
trial court's judgment, in effect, returned the parties
to the status quo ante-TRG had paid the 2012 and
2013 taxes imposed under Section 11.201(a), and both parties
took nothing by this suit. TRG appealed, and the Church
Obligation for Taxes Imposed Under Tax Code Section
first issue, TRG contends that the contract unambiguously
obligated the Church to pay the taxes imposed under Section
11.201(a). The Church's first issue is the mirror image
of TRG's-that the contract unambiguously obligated TRG to
pay those taxes.
Standard of Review
review orders granting or denying summary judgment, either
traditional or no-evidence, de novo. See Laverie v.
Wetherbe, 517 S.W.3d 748, 752 (Tex. 2017);
Contractors Source, Inc. v. Amegy Bank Nat'l
Ass'n, 462 S.W.3d 128, 132 (Tex. App.-Houston [1st
Dist.] 2015, no pet.); Reiland v. Patrick Thomas Props.,
Inc., 213 S.W.3d 431, 435 (Tex. App.-Houston [1st Dist.]
2006, pet. denied). Traditional summary judgment is proper
when a movant establishes that there is no genuine issue of
material fact and that he or she is entitled to judgment as a
matter of law. Tex.R.Civ.P. 166a(c); Reiland, 213
S.W.3d at 435. No-evidence summary judgment is proper for a
defendant on a plaintiff's cause of action when, after an
adequate time for discovery, the defendant-movant shows that
"there is no evidence of one or more essential elements
of a claim or defense on which [the plaintiff] would have the
burden of proof at trial." Tex.R.Civ.P. 166a(i). Once
the movant makes this showing, the burden then shifts to the
nonmovant to present evidence raising a genuine issue of
material fact as to each of the elements specified in the
defendant's motion. Johnson v. Phillips, 526
S.W.3d 529, 534 (Tex. App.-Houston [1st Dist.] 2017, pet.
reviewing a grant of summary judgment, we consider as true
all evidence that favors the nonmovant, and we indulge every
reasonable inference, and resolve all reasonable doubts, in
the nonmovant's favor. Reiland, 213 S.W.3d at
435. We must consider whether reasonable and fair-minded
jurors could differ in their conclusions in light of all of
the evidence presented. See Goodyear Tire & Rubber
Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007). A genuine
issue of material fact exists when there is more than a
scintilla of probative evidence on a particular issue.
See Buck v. Palmer, 381 S.W.3d 525, 527 & n.2
(Tex. 2012) (per curiam). "Evidence that is so weak as
to do no more than create a mere surmise or suspicion that
the fact exists is less than a scintilla." Regal
Fin. Co. v. Tex Star Motors, Inc., 355 S.W.3d 595, 603
(Tex. 2010) (internal quotations omitted). A summary judgment
should not be granted unless the movant conclusively shows
that there is no dispute about, among other things, "the
inferences that may properly be drawn from the
evidence." Jones v. Mem'l Hosp. Sys., 746
S.W.2d 891, 896 (Tex. App.- Houston [1st Dist.] 1988, no
TRG and the Church moved for summary judgment: (a) TRG, on
only traditional grounds, both on its causes of action and on
the Church's counterclaims and (b) the Church on both
traditional and no-evidence grounds on TRG's causes of
action and on only traditional grounds on its counterclaims.
See Tex. R. Civ. P. 166a(a)-(c), (i).
both parties move for summary judgment, and the trial court
grants one motion and denies the other, the unsuccessful
party may appeal both the successful party's motion and
the denial of his or her own motion. Holmes v.
Morales, 924 S.W.2d 920, 922 (Tex. 1996);
Reiland, 213 S.W.3d at 436. In such an appeal, we
must review both sides' summary judgment evidence,
determine all questions presented, and render the judgment
that the trial court should have rendered. Gilbert Tex.
Constr., L.P. v. Underwriters at Lloyd's London, 327
S.W.3d 118, 124 (Tex. 2010); Reiland, 213 S.W.3d at
436. We may affirm the summary judgment or reverse and render
judgment on the unsuccessful party's motion.
Holmes, 924 S.W.2d at 922. "When, as here, a
summary judgment order does not specify the grounds on which
it was granted, we will affirm the judgment if any one of the
theories advanced before the trial court is
meritorious." Bowers v. Taylor, 263 S.W.3d 260,
263 (Tex. App.-Houston [1st Dist.] 2007, no pet.).
TRG and the Church are in the position of being both
successful and unsuccessful on their respective
cross-motions. The trial court granted the Church's
motion as to TRG's causes of action, ruling that TRG take
nothing by them, but it denied the rest of the Church's
motion. It also ruled that TRG was entitled to summary
judgment on the Church's counterclaims, but it otherwise
denied TRG's motion.
Applicable Tax Code Provisions
parties' competing contract interpretations play out
against the backdrop of Tax Code Sections 11.20 and 11.201. A
qualified religious organization "is entitled to an
exemption from taxation of:"
the land that the religious organization owns for the purpose
of expansion of the religious organization's place of
regular religious worship or construction of a new place of
regular religious worship if:
(A) the religious organization qualifies other property,
including a portion of the same tract or parcel of land,
owned by the organization for an exemption under Subdivision
(1) or (5); and
(B) the land produces no revenue for the religious
Tex. Tax Code § 11.20(a)(6); see also Tex.
Const. art. VIII, § 2 (authorizing such an exemption).
This exemption expires after either one of two periods,
depending on whether the land is contiguous with the
religious organization's present place of regular
A tract of land that is contiguous to the tract of land on
which the religious organization's place of regular
religious worship is located may not be exempted under
Subsection (a)(6) for more than six years. A tract of land
that is not contiguous to the tract of land on which the
religious organization's place of regular religious
worship is located may not be exempted under Subsection
(a)(6) for more than three years.
Tex. Tax Code § 11.20(j). TRG and the Church agree that
the land at issue was not contiguous to the Church's
then-existing place of regular religious worship. ...