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AusPro Enterprises, LP v. Pearce

Court of Appeals of Texas, Third District, Austin

November 14, 2019

AusPro Enterprises, LP, Appellant
v.
Richard W. Pearce, Appellee

          FROM THE 126TH DISTRICT COURT OF TRAVIS COUNTY NO. D-1-GN-17-000112, THE HONORABLE DUSTIN M. HOWELL, JUDGE PRESIDING

          Before Chief Justice Rose, Justices Kelly and Smith

          MEMORANDUM OPINION

          Chari L. Kelly, Justice

         AusPro Enterprises, LP, appeals the trial court's judgment declaring that property AusPro purchased from the United States government in 2012 is burdened by an easement granted to Richard W. Pearce in 1997. We will affirm.

         BACKGROUND

         In 1997, Pearce purchased a right-of-way easement on and across property located on North Interstate Highway 35 in Travis County, Texas, from Sun Development, Inc. The grant of easement states that the easement "shall be used only for the purpose of erecting, placing, operating, maintaining, repairing and/or rebuilding" an illuminated advertising sign and that the easement "shall be in perpetuity and shall follow as a permanent right" if the property burdened by the easement is "sold, assigned, or transferred in any way." Since acquiring the easement, Pearce has continuously used it and, in July 2004, he recorded the easement in the official public records of Travis County.

         In February 2012, the United States Department of the Treasury, in conjunction with the Internal Revenue Service Criminal Investigation Division, posted a notice of an auction of real property including the property on which Pearce's easement was located. The property had been forfeited to the United States in connection with a federal criminal case against John Kenneth Coil.[1] See 18 U.S.C. § 1467(a)(2), (3) (person convicted of offense involving obscene material under chapter 71 of United States Code shall forfeit to United States such person's interest in property constituting or traceable to proceeds obtained from such offense and in property used or intended to be used to commit or to promote commission of such offense). The notice announced the auction of "26.26 acres of commercial land individually platted into 6 parcels" located on the east side of Interstate Highway 35 with portions of the property split between the City of Round Rock and unincorporated Travis County. The auction notice included as a "special condition" that: "Outdoor billboard on the property is owned by a third party and does not generate any income." AusPro purchased the property on which Pearce's easement was located at the auction. The United States, acting through the Internal Revenue Service, signed a Special Warranty Deed conveying the property to AusPro. The deed provided a warranty of title against any claim arising from the criminal proceeding against Coil. The Deed also provided:

This conveyance is made subject to any and all singular the restrictions, easements, rights of way, reservations, maintenance charges together with any lien securing said maintenance charges, zoning laws, ordinances of municipal and/or governmental authorities, conditions and covenants, if any, applicable to and enforceable against the above described property as show by the records of the County Clerk of said County.

         Approximately five years after AusPro purchased the property, its counsel sent a letter to Pearce stating that "any rights you may have had or thought you had to install the billboard on what is now my client's property were terminated through a forfeiture action." AusPro's counsel enclosed a copy of a lawsuit it had filed on AusPro's behalf in which AusPro claimed that Pearce's easement had become "a nullity" as a result of the forfeiture proceeding related to Coil's conviction. AusPro sought declarations that "the Sign Easement granted to [Pearce] was a nullity as a result of the forfeiture judgment" and that "AusPro took title to [the property] (including all improvements such as the subject sign) free and clear of any rights or claims of [Pearce] to any portion of [the property] or under the Sign Easement." AusPro also asserted causes of action for trespass and conversion, alleging that Pearce's "unauthorized use" of the property constituted trespass and that Pearce had converted AusPro's property by "collecting and retaining rents for the use of property it does not own."[2]

         Pearce filed an answer and a counterclaim in which he alleged that AusPro's deed specifies that AusPro acquired the property "subject to" any easements, including the easement he purchased from Sun Development in 1997. Pearce sought declarations that the criminal forfeiture proceedings related to the Coil conviction had not impacted the status of his easement and that AusPro acquired the property subject to that easement.

         AusPro and Pearce each filed competing motions for summary judgment on their requests for declaratory relief. After a hearing, the trial court denied AusPro's motion, granted Pearce's, and set AusPro's remaining claims for a bench trial. The trial court found that the summary judgment orders disposed of AusPro's claims for trespass and conversion and ordered that it take nothing on those claims. The trial court awarded Pearce $26, 955 in attorneys' fees pursuant to the Uniform Declaratory Judgments Act. See Tex. Civ. Prac. & Rem. Code § 37.009 (court may award costs and reasonable and necessary attorneys' fees as are equitable and just in proceeding brought under UDJA). AusPro then perfected this appeal.

         DISCUSSION

         In three issues, AusPro challenges the trial court's order granting summary judgment in Pearce's favor on his request for declaratory relief. We review the granting of a summary judgment de novo.[3] When both parties move for summary judgment and the trial court grants one motion and denies the other, the reviewing court should review the summary judgment evidence presented by both sides and determine all questions presented and render the judgment the trial court should have rendered. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000). The reviewing court must affirm summary judgment if any of the summary judgment grounds are meritorious. Texas Workers' Comp. Comm'n v. Patient Advocates of Tex., 136 S.W.3d 643, 648 (Tex. 2004).

         In this appeal, AusPro argues that the trial court erred in concluding that Pearce's easement was not forfeited to the United States during the criminal forfeiture proceedings related to Coil's indictment and conviction. Pearce contends that the trial court properly concluded that the forfeiture proceedings did not impact his right to the easement. To place these arguments in context, we first discuss the relevant forfeiture proceeding. Coil was indicted for several federal charges brought in connection with the federal government's investigation of racketeering, obscenity, fraud, and income tax evasion. Coil pleaded guilty to two charges and agreed to forfeit over 40 pieces of real property located in Texas. In September 2004, the federal district court signed a "Preliminary Judgment of Forfeiture, Order for Seizure and Order to Publish Notice of Preliminary Judgment of Forfeiture," which ordered that "all right, title and interest of Defendant John Kenneth Coil" in certain property, including the property burdened by Pearce's easement, was forfeited to the United States. See 18 U.S.C. ยง 1467(a)(2), (3) (defining property subject to forfeiture to United States by person convicted of offense involving obscene material). In November 2009, the federal court signed an order for final judgment of forfeiture of the property on which Pearce's easement was located. AusPro maintains that the forfeiture proceeding extinguished Pearce's easement and that the trial court erred in concluding otherwise. Pearce counters that, because he did not receive notice of the forfeiture ...


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