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McMillan v. Tally Two Investment Group, LLC

Court of Appeals of Texas, Third District, Austin

August 7, 2019

Berit McMillan and Gerald McMillan, Appellants
v.
Tally Two Investment Group, LLC, Appellee

          FROM THE 126TH DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-17-006481, THE HONORABLE SCOTT H. JENKINS, JUDGE PRESIDING

          Before Justices Goodwin, Baker and Triana

          MEMORANDUM OPINION

          THOMAS J. BAKER, JUSTICE

         In this restricted appeal, Berit McMillan and Gerald McMillan seek to reverse the trial court's order dismissing their claims against Tally Two Investment Group, LLC. We will affirm.

         BACKGROUND

         In October 2015, the McMillans and Tally Two signed a document that memorialized an agreement between the parties and stated:

Gerald McMillan reached out to Brian Whitten, Manager, for Tally Two and requested $100, 000 in order to help fund a project located at 1006 Woodland Ave, Austin 78704. That project already had a considerable loan attached to the property.
In consideration for the $100, 000, Gerald McMillan and Berit McMillan would repay Tally Two $133, 000 prior to April 7, 2016. Also, they agreed to sign a Warranty Deed for the property located at 522 Sunny Lane, Austin TX 78704 as collateral. Also, they agreed that the Warranty Deed would not be filed at the city recording office at this time, however, a Memorandum of Option to Purchase would be filed at the city recording office in order to cloud the title and give public notice that this property could not be purchased.
If the monies owed ($133, 000) is repaid to Tally Two Investment Group LLC located at 320 Duffy Ln. Austin, TX 78738 prior to April 7, 2016, then all parties agree that the Memorandum of Option to Purchase will be released, and the house located at 522 Sunny Ln will be deeded back to Berit McMillan.
If the monies owed ($133, 000) is not repaid by April 7, 2016, then all parties agree that Tally Two Investment Group will publicly record the Warranty Deed for 522 Sunny Lane and have all rights to sell, lease, rent, and convey the property. In this situation, Berit McMillan and Gerald McMillan would not have to repay the $133, 000.
The property at Sunny Lane can be sold prior to April 7, 2016 with the understanding that Tally Two Investment Group will receive $133, 000 and remove all claims to the house.

         On the same date, Berit McMillan executed a General Warranty Deed conveying 522 Sunny Lane (the Sunny Lane Property) to Tally Two.

         In January 2017, Tally Two recorded the Warranty Deed in the Official Public Records of Travis County.[1] After the McMillans continued to claim ownership of the Sunny Lane Property, Tally Two filed suit in Travis County district court (the Tally Two suit)[2] seeking declarations that the Warranty Deed recorded in January 2017 was valid and binding on the grantor, Berit McMillan, and that the McMillans were in breach of the parties' agreement by challenging Tally Two's title to the Sunny Lane Property. Tally Two also sought the removal of any cloud on its title to the Sunny Lane Property and injunctive relief preventing the McMillans from entering the Sunny Lane Property or further clouding Tally Two's title.

         After being duly served, neither McMillan filed an answer or otherwise responded to the Tally Two suit. In July 2017, Tally Two filed a motion for a no-answer default judgment. With its motion, Tally Two submitted Brian Whitten's affidavit in which he described the agreement between the parties and the execution and recording of the Warranty Deed by which Tally Two acquired title to the Sunny Lane Property. After a hearing, the court signed a final default judgment stating that Tally Two "presented evidence that [it] is the fee simple owner of [the Sunny Lane Property], conveyed to [Tally Two] by Defendant Berit McMillan by that October 6, 2015 General Warranty Deed, recorded on January 23, 2017 [] in the Official Public Records of Travis County." The court granted Tally Two the declaratory relief it sought, including a declaration that the General Warranty Deed conveying the Sunny Lane Property to Tally Two was valid and binding on Berit McMillan, the grantor. The court also permanently enjoined the McMillans from further clouding title to the Sunny Lane Property "in any way."

         The McMillans did not timely perfect an appeal from the default judgment in the Tally Two suit. Instead, they filed a restricted appeal six months after the judgment was signed. See McMillan v. Tally Two Inv. Grp. LLC, No. 03-18-00040-CV, 2018 WL 3849460 (Tex. App.-Aug. 14, 2018, pet. denied) (mem. op.); see also Tex. R. App. P. 30.[3] That restricted appeal was dismissed for want of prosecution after the McMillans failed to comply with a court's order that they file their brief by a date certain.[4]

         In November 2017, approximately two months before filing the restricted appeal from the default judgment rendered in the Tally Two suit, Berit McMillan filed the underlying proceeding (the McMillan suit) against Tally Two in Travis County district court. In that suit, Berit McMillan sought a declaration that the Warranty Deed was void because it violated section 21A.002 of the Texas Business and Commerce Code.[5] Berit McMillan also recorded a Notice of Lis Pendens regarding the Sunny Lane Property in the Official Public Records of Travis County. See Tex. Prop. Code § 12.007; In re Collins, 172 S.W.3d 287, 292 (Tex. App.-Fort Worth 2005, orig. proceeding) ("The lis pendens statute gives litigants a method to constructively notify anyone taking an interest in real property that a claim is being ...


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