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Alpha Adventure Ranch At Nocona, LLC v. Warrior Golf Management, LLC

Court of Appeals of Texas, Second District, Fort Worth

December 12, 2019

Alpha Adventure Ranch at Nocona, LLC, Appellant
v.
Warrior Golf Management, LLC, Appellee

          On Appeal from the 97th District Court Montague County, Texas Trial Court No. 2018-0451M-CV

          Before Birdwell, Bassel, and Wallach, JJ.

          MEMORANDUM OPINION

          Dabney Bassel Justice

         I. Introduction

         This is an appeal from the trial court's denial of an application for a temporary injunction in which Appellant Alpha Adventure Ranch at Nocona, LLC sought to enjoin a foreclosure sale. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(4). In a single issue, Appellant challenges that denial. In the trial court, Appellant conceded that it had failed to pay an installment on the note it had executed as part of the purchase of a golf course. Appellant sought to avoid the effect of that default by arguing that because of a unique provision in the note, the failure to make the payment did not constitute an event of default that entitled the noteholder to exercise its rights to foreclose under the deed of trust securing the note's payment. The trial court, however, also heard evidence that property taxes had not been paid and that the failure to pay those taxes constituted a default under the terms of the deed of trust. Appellant does not argue that the unique note term it had relied on to avoid foreclosure for the failure to pay an installment also applies to the separate default for the failure to pay property taxes. The only challenge Appellant raises to the property-tax default is its pending dispute with the taxing authority about the amount owed. A trial court does not abuse its discretion when the evidence conflicts on whether there is a basis for injunctive relief, and the contention regarding whether there was an excuse for not paying the property taxes presented only a fact question, which the trial court apparently resolved against Appellant. With evidence before the trial court of an uncured event of default that permitted foreclosure under the terms of the deed of trust, the trial court did not abuse its discretion by denying Appellant's application for a temporary injunction. We affirm.

         II. Factual and procedural background

         Appellant executed a note, secured by a deed of trust, as part of its purchase of a golf course. When Appellee Warrior Golf Management, LLC (the noteholder) sought to foreclose based on several defaults, one of which was the failure to make an installment payment, Appellant sought a temporary injunction to stop the foreclosure. Appellant conceded that the installment payment was not made but argued that the note's unique terms did not make that failure an event of default that permitted foreclosure but instead caused the unpaid installment to be rolled into the balance due on the note's maturity. The trial court initially issued a temporary restraining order, suspending the noteholder's attempt to foreclose.

         The noteholder challenged Appellant's construction of the note that permitted it to avoid foreclosure and also alleged that Appellant had failed to pay more than $20, 000 in property taxes required under the deed of trust securing the note's payment. Indeed, the deed of trust provides both that Appellant "will pay all taxes and other rates levied on the Property" and that a default occurs "if the Trustor defaults in the observance or performance of any term or covenant which the Trustor has agreed to observe or perform under this Trustor[1] or elsewhere."

         With these clashing arguments teed up, the trial court held a temporary-injunction hearing. Neither side presented oral testimony, but the noteholder introduced, without objection, a tax statement from the local taxing authority that the noteholder's counsel represented showed Appellant's unpaid taxes. Appellant did not dispute that the face of the statement showed unpaid taxes, but Appellant's counsel claimed that there was a pending dispute with the taxing authority about the description of the property and, thus, a dispute about the amount of taxes owed.

         The trial court denied the temporary injunction and entered an order that stated,

After considering the pleadings of [Appellant] and [the noteholder] and argument of their counsel, the Court found the following:
That [the noteholder] had the right under the terms of the Note and Deed of Trust at issue to foreclose the lien created by the Deed of Trust lien after proper notice and opportunity by [the noteholder] had been given, as provided in said Deed of Trust;
That [the noteholder] gave [Appellant] proper notice and opportunity to cure in this matter, before Notice of ...

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