Roberts & Roberts, LLP - Killeen, TX Attorneys - Legal News

Subcontractor's Lien Affidavit is Close Enough

Tue, 08 Jul 2008 13:43:02 -0500

Mustang Tractor & Equipment Co. v. Hartford Accident and Indemnity Co. Mustang furnished heavy equipment for the site work on a new Home Depot in Austin. When Mustang's invoices were not timely paid it sent notices to the general contractor and the owner, and timely filed mechanic's lien affidavits. A lawsuit resulted and the trial court invalidated the lien affidavits because they failed to specify the date each notice of the claim was sent to the owner and the method by which the notice was sent. The appellate court disagreed, holding that Mustang substantially complied with the law because: (1) the affidavits were otherwise correct, and (2) the owner and contractor actually received the notices containing the required information, so no one was misled or otherwise prejudiced by the omission.

Probate Remanded to Give the Parties Another Shot

Tue, 08 Jul 2008 13:43:22 -0500

In re Estate of Wilson. Decedent's spouse filed a copy of Decedent's will for probate because she could not find the original. After the will was admitted, Decedent's son challenged the proceedings. The Court observes that when a will was last known to be in the decedent's possession and cannot be located after death, a rebuttable presumption of revocation arises. The presumption can be overcome by proof and circumstances contrary to the presumption, or evidence that the will was fraudulently destroyed by some other person. Likewise, the recognition of a will's continued validity and the testator's continued affection for the chief beneficiary thereunder, without evidence tending to show the decedent's dissatisfaction with the will or any desire to cancel or change the will, is sufficient to rebut the presumption of revocation. However, in this case the widow had produced no evidence at all as to why the will could not be located. In the interest of justice, the Court sends the case back to the trial court to allow the parties another chance to fully explore the issue of whether the original will had been revoked.

Spendthrift Provision Did Not Preclude Trust Beneficiary from Devising His Interest in the Trust by Will

Tue, 08 Jul 2008 13:43:25 -0500

In re Townley Bypass Unified Credit Trust. Decedent's will established a trust for the benefit of his spouse for life, with the remainder to his children, Billy and Jimmy. After Decedent's death, Billy predeceased Decedent's surviving spouse. The Court holds that because Billy was alive when his father died and no condition precedent exists other than the termination of the life estate, his interest was vested. Further, finding no controlling authority, the Court holds that an interest in a trust may be transferred by will or intestacy because a spendthrift provision is to protect the beneficiary from his or her own folly, a purpose that cannot be promoted after the beneficiary's death. As a result, Billy's interest passes to his widow by his will, not to his heirs by intestacy.

Defeat Snatched from Jaws of Victory: Adverse Possession Verdit Overturned

Tue, 08 Jul 2008 13:43:27 -0500

Moore v. Stone. Stone claimed to have acquired title by adverse possession. There are statutory periods of adverse possession of 3, 5, 10, and 25 years, depending on the nature of the plaintiff's claim and how the property is used. In this case, the Court holds that casual or incidental fencing of the property for occasional grazing, and the cutting and gathering of natural crops such as hay, will not amount to such adverse and hostile possession and use as will satisfy the 10-year statute. Further, the 3, 5 and 25 year statutes all require the plaintiff to claim "title or color of title," or a deed. Because of a procedural quirk in this case, the plaintiff had neither. As a result, the jury's verdict of adverse possession is reversed.

Another Reason to Read Contracts Carefully: Easements Don't Have to Be Reasonable

Tue, 08 Jul 2008 13:43:30 -0500

Smith v. Huston. The plaintiffs each bought lots out of a subdivision, which included a "nonexclusive easement for aircraft for flight and taxiway purposes along, over and across" an adjacent airstrip. The easement provided for a $200 per year fee payable to the owner of the airport for use of the airport, such fee to be increased by no more than 10% annually. The plaintiffs eventually sued, alleging that airstrip owner was unlawfully interfering with their use of the easement, and asking the Court to rule that that any fees charged under the runway easements must be used for maintenance purposes only, must be reasonable and necessary for the actual maintenance of the runway, and that the owners are entitled to a detailed accounting of the fees collected and expended. The Court disagreed, holding that the easements are not ambiguous and thus mean exactly what they say. As a result, the owner of the airstrip is entitled to charge the fee set forth in the easements, and may increase the fee by ten percent each year, even though the fee might eventually exceed the value of the plaintiffs' lots. Further, the fees are not subject to a reasonableness limitation, and the owner is not obligated to account for or segregate any payments for the fees from other funds. However, nothing in the easements addresses remedies available to the owner of the airport in the event any lot owner fails to pay the easement fees, so the airport owner has no right to deny access by the lot owners while fees are unpaid.

Court Gives Buyer Another Bite at the Apple

Tue, 08 Jul 2008 13:43:32 -0500

Lovett v. Lovett. Louis alleges he had an oral agreement with Peter under which Louis would pay two-thirds of the monthly mortgage payments for a 26-acre tract, Peter would pay one-third, and title to the property would be divided so that Louis held title to one-half of the acreage along with a house located on the property and Peter would hold title to the other half of the acreage. Peter maintains that Texas real estate law requires an agreement for the sale of real estate to be in writing, so the oral agreement is unenforceable. However, the Court holds that "partial performance" is an exception to this rule. The Court further finds that Louis had paid over $25,000 in mortgage payments, taxes, maintenance and repair costs, and that he has at least raised a fact issue as to whether such sums are partial performance under an oral purchase contract, or merely rent. Accordingly, the case is returned to the trial court for further proceedings.

"AS IS" Clause Doesn't Shield Seller from Liability for Fraud

Tue, 08 Jul 2008 13:43:34 -0500

San Antonio Properties, L.P. v. PSRA Investments, Inc. Agreement for sale of apartment complex stated that buyer accepted the property "as is" and that seller had made no representations or warranties not shown in the contract. However, buyer produced proof that it had relied upon operating statements provided by seller that turned out to be incomplete, as well as promises by the seller that the seller had spent large sums improving the property, and that the property was in good working order. The Court holds that even sophisticated buyers have the right to rely on the veracity of the financial information provided by the sellers, and that the evidence is supported the jury's determination that the seller had defrauded the buyer.

Borrower Fired Up Over Lender's Use of Insurance Proceeds

Tue, 08 Jul 2008 13:43:38 -0500

Lewis v. Wells Fargo. Two weeks after she bought it, Lewis' house burned. Her lender collected the insurance, and used the money to build a new house on the old foundation. Lewis made no payments, so the lender foreclosed. Lewis sued to challenge the foreclosure, complaining that instead of applying the insurance proceeds to the note and releasing her from liability, Wells Fargo had constructed a new house that was substantially different from the original. The Court holds that the lender was within its rights under the loan documents to rebuild rather than credit the note. However, the case is returned to the trial court to determine whether the lender breached an agreement with Lewis by failing to properly restore the home.

Sloppy Drafting Saves Borrower's Land

Tue, 08 Jul 2008 13:43:40 -0500

Fears v. Texas Bank. Borrower's parents gave him a 20-acre tract, which Borrower then conveyed to the Bank to secure payment of a loan. After Borrower defaulted he and his parents sued to recover the land on the basis that the property description in the deed was legally insufficient and therefore void. The Court notes that even when there is little doubt that the parties knew and understood what property was intended to be conveyed, the legal description in a deed must not only describe the location of the land, but also the size, shape, and boundaries of the land. A deed that does not sufficiently describe the land is void and unenforceable. In this case, the deed described the 20-acre tract as "being 20 acres off of the West end of [a certain 100-acre tract], the boundaries of such 20 acres to be located so as not to include any of the waters of Shawnee Creek...." The Court holds that although the deed adequately described the 100-acre tract, it did not provide the length, breadth, or shape of the 20-acre tract. As a result the deed was void and the Bank did not acquire the land from the Borrower.

Lender Lucks Out After Foreclosing with Defective Notice

Tue, 08 Jul 2008 13:43:49 -0500

Myrad Properties, Inc. v. LaSalle Bank Nat. Ass'n. Lender made a loan to Borrower secured by two separate apartment complexes. After Borrower defaulted in payment, Lender initiated foreclosure. Lender's foreclosure notice stated generally that Lender intended to foreclose all the real and personal property described in the Deed of Trust, but incorporated field notes for only one apartment complex. The Trustee's Deed also contained only one set of field notes. After the foreclosure Borrower sued to stop Lender from correcting the Trustee's Deed to include both apartment complexes. On appeal, the Court holds that although the notice is confusing, the Borrower was fully aware of Lender's intentions to proceed against both properties, and prospective bidders could readily contact the Trustee before the sale to clear up any confusion.

Wife Has No Claim to Nearly $7,000,000 in Cash Upon Divorce

Tue, 08 Jul 2008 13:43:52 -0500

Legrand-Brock v. Brock. Husband owned 740 shares of BTH Holdings when he married Wife. Shortly after the marriage, BTH dissolved, and Husband received $6,975,510 in cash distributions. The divorce court determined the distributions were Husband's separate property because they were in redemption or cancellation of his separate property stock. Wife appealed, claiming the distributions were a "liquidating dividend" because the distributions were the corporation's retained earnings. The Court holds that the source of the funds is immaterial; the cash distributions represented an exchange of Husband's separate property stock for BTH's cash assets, and thus were his separate property.

Borrower Not Entitled to Attack Foreclosure Sale in Forcible Detainer Suit

Tue, 08 Jul 2008 13:43:55 -0500

Reynolds v. Wells Fargo Bank, National Association. Lender purchased the property at a foreclosure sale, and then sent notice to Borrowers to vacate. When Borrowers refused, Lender filed a forcible detainer (eviction) suit to obtain possession. Borrowers attempted to defend by challenging the foreclosure notice. The Court holds that the only issue in a forcible detainer action is the right to actual possession. Lender established that it is the owner of the property by virtue of the foreclosure sale, and that Borrower was a tenant at sufferance under the deed of trust. Accordingly, the trial court could determine the issue of immediate possession, and the court properly refused to consider any evidence concerning the notice of foreclosure.

Cry a River: Owner Claims Construction Caused Home to Flood

Tue, 08 Jul 2008 13:43:57 -0500

Royce Homes, L.P. v. Humphrey. Homeowner sued Builder, alleging that the slab Builder constructed on an adjacent property diverted the natural flow of surface water and caused Homeowner's house to flood. The jury agreed, and awarded Homeowner $5,300 in repair costs and another $20,000 for reduction in the value of the home due to the flooding "stigma." On appeal, the Court holds that Homeowner proved his entitlement to repair costs and stigma damages, but that the appraiser's testimony as to the amount of loss was not supported by facts and was too speculative to support the verdict. In the interest of justice, the Court remands the case to the trial court to enable Homeowner another opportunity to make his case.

Common Sense Prevails: Lien Affidavits May be Sent to Owner First and Filed Later

Tue, 08 Jul 2008 13:43:59 -0500

Arias v. Brookstone, L.P. In March, a sub-subcontractor on a construction project executed mechanic's lien affidavits and mailed copies to the required parties. However, the lien affidavits were not actually filed with the county clerk until early April. The appellate court confirms the validity of the liens, holding that "the purpose of the statute is to ensure that the owner receives actual notice that a lien affidavit has been executed with the intent to file the affidavit and create a lien against the owner's property, thus allowing the owner or original contractor to take appropriate action. Nothing in the statute requires that the property owner or original contractor be notified that the affidavit was actually filed."

Court Saves Bank's Bacon (Mostly)

Tue, 08 Jul 2008 13:44:00 -0500

Lasalle Bank National Association v. White. This is an update to a case we first reported in October, 2006. Homeowner took out a home equity loan of $260,000.00, but did not make the payments and the lender sought foreclosure. At trial and on appeal, the courts held that because the land was designated for agricultural use, the Texas Constitution prohibited it from being used as security for a home equity loan. As a result, the lien was to be cancelled and homeowner could keep the money.

However, the Texas Supreme Court notes that over $194,000 of the loan was used to pay off pre-existing valid liens for purchase money and property taxes. Under the doctrine of equitable subrogation, a third party who discharges a lien upon the property of another may step into the original lienholder's shoes and assume the lienholder's right to the security interest against the debtor. Accordingly, while the lender does forfeit the $57,000 cash portion of the loan, it is entitled to equitable subrogation for the refinance portion of the loan proceeds used to extinguish the homeowner's lawful purchase-money and property-tax liens.

Refi Paperwork Causes Wife to Lose 1/2 Separate Property Home

Tue, 08 Jul 2008 13:44:03 -0500

Magness v. Magness. Wife owned home prior to marriage. During marriage, she and Husband refinanced the loan. As part of the refinance Wife signed a deed conveying one-half of the property to Husband. In the subsequent divorce, Wife claimed she only signed the deed because of lender requirements to complete the refinance. However, the Court holds that a deed from one spouse to another is presumed to be a gift, and Wife failed to rebut the presumption. As a result, Husband and Wife each own one-half of the home as separate property.

Bank Bungles Home Equity Loan But Successfully Addresses the Problem

Tue, 08 Jul 2008 13:44:05 -0500

Fix v. Flagstar Bank, FSB. Borrower took out a home equity loan and then refinanced it with a conventional loan less than a year later. Lender acknowledges that it is not allowed to do a second loan within a year of the first, or to impose personal liability on the borrower. Lender offered to fix the problem by making a new home equity loan at the same or better rate at no cost to borrower, and paying an additional $1000. Borrower declined and demanded that lender forfeit the loan. The Court finds that under the version of the law in effect at the time the lender had made a reasonable offer to cure the violation. The Court further finds that because a loan is neither "goods" nor "services," borrower does not qualify as a consumer under the DTPA.

The Perils of Delay: Lender Waits Too Long to Foreclose

Tue, 08 Jul 2008 13:44:09 -0500

Burney v. Citigroup Global Markets Realty Corp. This is an update to an case we first noted in November, 2007. Lender filed an application to foreclose on borrower's home equity loan in April, 2000, but the suit was dismissed for lack of prosecution. In November, 2004, lender filed another application to foreclose. The Court holds that a four-year statute of limitation applies to a suit to recover real property under a real property lien or foreclose on a real property lien. By filing suit in April, 2000, lender is deemed to have accelerated the maturity of the loan and started the limitations period, so the latest date for re-filing the foreclosure application was April, 2004. Because the lender waited until November, 2004, its claim is barred by limitations.

Effort to Avoid Probate with Survivorship Designation Falls Short

Tue, 08 Jul 2008 13:44:11 -0500

Beatty v. Holmes. Husband and wife, both deceased, owned a brokerage account as "joint tenants," but never filled out the portion of the account agreement specifying a survivorship account. The Court holds that it will not create a survivorship agreement in the absence of a clear expression of intent by the parties. Likewise, stock certificates held by decedents as "joint tenants with right of survivorship" did not create a right of survivorship because the certificates were not signed by the decedents.

Post-Sale Skirmish Over Liability for Property Taxes

Tue, 08 Jul 2008 13:44:13 -0500

Sefzik v. Mady Development, L.P. After purchasing property, Buyer discontinued the agricultural use that had been maintained by the Seller, and as a result rollback taxes were assessed. Court holds that under the unambiguous language of the contract the rollback taxes are the Buyer's responsibility. However, Seller failed to preserve its complaint regarding other sums awarded to the Buyer. The case is remanded to the trial court to determine who is the "prevailing party" for purposes of winning attorney's fees.

Devise of Land Does Not Automatically Include Contents

Tue, 08 Jul 2008 13:44:16 -0500

Alford v. Alford. Decedent's Will made a gift of a certain business property, but made no express mention of the personal property used in the business, or the business income. The attorney who drafted the Will testified that the Decedent's intent was that the gift would include the personal property. The Court holds that the Will is not ambiguous on its face, so evidence that the Decedent intended something other than what is written is not admissible. Under Texas law a gift of real estate in a Will conveys only the land, appurtenances and fixtures unless the Will specifies otherwise, such as by making reference to "personal property" or "contents."

Temporary Employment Agency Entitled to Mechanic's Lien on Construction Project

Tue, 08 Jul 2008 13:44:19 -0500

Reliance National Indemnity Co. v. Advance'd Temporaries, Inc. Lamar hired Gonzalez to do work on a construction project. Gonzalez did not have enough employees for the job, so he hired Advance'd temporary employment agency to furnish temporary workers. However, Gonzalez did not pay Advance'd, so Advance'd filed a mechanic's lien against the project. The Supreme Court holds that the temporary workers were employed by Advance'd while they worked on the project, and as a result Advance'd "furnished labor" within the meaning of the applicable statutes. Advance'd was thus entitled to a mechanic's lien to secure payment of the sums owed it.

Both Spouses Must Sign to Create Valid Lien Against Homestead

Tue, 08 Jul 2008 13:44:27 -0500

Cadle Co. v. Ortiz. During marriage, Wife purchased property on assumption but Husband's name was not on the deed. Later she took out a home improvement loan, and again Husband did not sign. After default in payments the lender foreclosed. The court holds the foreclosure was wrongful because to have a valid lien against homestead both spouses must sign the home improvement contract, and the lender failed to prove that Wife misrepresented her marital status when the improvement loan was made. As a result, the lien is invalidated and the lender is on the hook for Wife's attorney's fees in excess of $23,000.00.

Only a Lawyer Could Think This Way: A Will is Construed One Way for One Sentence and Another Way for the Next Sentence

Tue, 08 Jul 2008 13:44:30 -0500

In re Estate of Nash. Nash's Will left everything to his wife, or if she predeceased him then to his step-daughter. Nash and his wife later divorced, but he never changed his Will. When Nash died, he was survived by his former spouse and the step-daughter. The Texas Supreme Court acknowledges that under the Probate Code if a testator divorces after executing a Will, provisions that favor the former spouse must be read as if the former spouse predeceased the testator. Accordingly, the former wife does not receive anything under the Will because she is treated as having pre-deceased Nash. However, the alternative gift to the step-daughter is not triggered because the former spouse did not actually pre-decease Nash. As a result, the step-daughter also has no entitlement under the Will, and his estate passes to his heirs at law.

"AS IS" Means What it Says; Landlord Not Liable for Fire

Tue, 08 Jul 2008 13:44:32 -0500

Gym-N-I Playgrounds, Inc. v. Snider. Commercial tenant sued landlord for negligence, fraud, breach of implied warranty of suitability, and violation of the DTPA after a fire destroyed the leased premises. The Texas Supreme Court recognizes that normally commercial landlords impliedly warrant that the premises are suitable for the tenants' intended commercial purposes. However, in this case the tenants expressly disclaimed that warranty and agreed to lease the building “as is.” These two factors eliminate all claims against the landlord based on the property's condition.

Plaintiff Waits Too Long to Enforce Restrictive Covenants

Tue, 08 Jul 2008 13:44:34 -0500

Girsh v. St. John. Defendants moved a mobile home onto their property in the mid-1980's in violation of subdivision restrictions. Approximately 13 years later, Plaintiff filed suit to enforce the restrictions, claiming that an overgrowth of trees and brush prevented her from discovering the violation sooner. The Court holds that the statute of limitations for enforcement of restrictions is four years, and that a full-size mobile home on a residential lot in a highly populated subdivision is not inherently undiscoverable. Accordingly, the Plaintiff waited too long to file suit and is not entitled to any remedy.

Governor Signs HB 2061

Tue, 08 Jul 2008 13:44:37 -0500

On Wednesday, Governor Perry signed H.B. 2061. The law, which is effective immediately, is the Legislature's response to Attorney General Opinion GA-0519, which effectively shut down the entire real estate industry in Texas for several days in late February, 2007. Under the new law, County and District Clerks will not be subject to liability under the Public Information Act for disclosure of social security numbers contained in documents filed in their respective offices.

Look Before You Close: Buyer Had Duty to Investigate Property

Tue, 08 Jul 2008 13:44:39 -0500

Fletcher v. Minton. Fletcher purchased a 12.56 acre parcel. Fletcher's deed purported to include land which had previously been sold to Malecek and Minton. Malecek and Minton had never recorded deeds to their parcels, and as a result Fletcher claimed the prior sales were void as to her because of her status as a "bona fide purchaser for value" without notice of the prior conveyance. However, the court found that Fletcher did have notice before closing of their claims to ownership by virtue of the mobile homes, sheds, vehicles, cows, fences, and other equipment Malecek and Minton had placed on the two tracts, as well as by virtue of discussions between Fletcher's agent and Minton. Because a purchaser of land is charged with notice of all claims of a party in possession of the property that the purchaser might have discovered had she made proper inquiry, Fletcher was not an innocent purchaser and did not acquire title to the tracts previously sold to Malecek and Minton.

Architectural Control Committee Falls Asleep at the Switch

Tue, 08 Jul 2008 13:44:42 -0500

Indian Beach Property Owners' Association v. Linden. Property owner constructed a chain link fence on her property. The Owners Association filed suit, alleging the owner had not obtained approval from the Architectural Control Committee (ACC) as required by the deed restrictions. The Court finds that under the wording of these particular deed restrictions, if the ACC fails to approve or disapprove of an application within forty-five days after it is submitted, approval is presumed. Since the ACC did not timely rule on the owner’s application, the application was deemed approved and the fence should be permitted.

A Boat is Not Homestead (Does This Really Require a Supreme Court Opinion?)

Tue, 08 Jul 2008 13:44:44 -0500

Norris v. Thomas. The Texas Supreme Court has ruled that a 68-foot, four-bedroom, three-bathroom yacht with a galley and salons may be a home, but it does not qualify for homestead protection. Even though the boat spends most of its time in dry-dock, receiving utilities through an umbilical line, it has not become sufficiently affixed to real estate to alter its status as movable chattel. As such, the boat is not exempt from forced sale by creditors.

Can't Have Your Cake and Eat It Too: One Party's Breach of Contract Excuses Performance by the Other Parties

Tue, 08 Jul 2008 13:44:46 -0500

Mandell v. Mandell. Three parties each owned part of a 240 acre tract. To settle a prior lawsuit between them, the parties agreed that they would each have a "preferential purchase right" (option to purchase) in the event any of them were to receive a purchase offer. Almost immediately, and without the consent of the other two co-owners, the plaintiff then conveyed a portion of his interest to his lawyer in payment of attorney's fees. About five years later one of the co-owners agreed to buy out the other, and the plaintiff sued to enforce his rights under the preferential purchase right. The court holds that by conveying part of the land to his attorney the plaintiff breached the settlement agreement, and as a result the other two co-owners are no longer bound by that agreement.

Amendment to Master Lease Does Not Amend the Sublease

Tue, 08 Jul 2008 13:44:48 -0500

Four Brothers Boat Works, Inc. v. Tesoro Petroleum Companies, Inc. Defendant entered into a Master Lease with a 10-year term and an option to extend for another 10 years. Defendant then subleased the property to Plaintiff on the same terms (i.e.--a 10-year term with a 10-year option.) Defendant subsequently agreed with the landowner to modify the Master Lease to delete the renewal option, but the Plaintiff was not a party to that amendment and the Sublease was not amended. Upon expiration of the Master Lease Defendant demanded that Plaintiff vacate, but Plaintiff did not do so and sued. The Court holds that the Master Lease amendment had no effect on the Sublease, and that Plaintiff was entitled to prosecute its breach of contract claim against the Defendant.

Title Insurer Not Obligated to Defend Adverse Possession Claim

Tue, 08 Jul 2008 13:44:50 -0500

Koenig v. First American Title Insurance Co. of Texas. Plaintiff's neighbor sued for adverse possession of a disputed strip between their homes. After Plaintiff successfully defended the suit Plaintiff sued the title insurance company for not defending the suit. The Court holds that there is no coverage under the policy for "rights of parties in possession." At the time they purchased their property, the Plaintiffs could plainly see that the neighbors had fenced the disputed strip, planted trees on it, and let their large dogs run on it. Such facts were clearly pleaded in the underlying adverse possession suit, and the insurer was entitled to rely upon those pleadings in determining that the policy exception applied.

Title Insurance Covers Defects in Title--Not Property Condition

Tue, 08 Jul 2008 13:44:52 -0500

Hanson Business Park, L.P. v. First National Title Insurance Co. Plaintiff discovered the land it had purchased lies in a flood plain. When the underwriter denied Plaintiff's claim under the owner's policy of title insurance, Plaintiff sued the underwriter alleging that the flood plain status so profoundly affected the value of the land as to amount to a defect in title. The Court disagreed, saying a title insurance policy imposes a duty to indemnify the insured against losses caused by defects in ownership rights; it is not a guarantee of the condition, value or marketability of the land. Because there is no question that Plaintiff acquired full ownership of the property, the insurer is entitled to judgment as a matter of law.

Effort to Probate Copy of Will Falls Flat

Tue, 08 Jul 2008 13:44:55 -0500

In re Estate of Longron. Decedent's friend attempted to probate a copy of Decedent's will. At trial, the jury determined that the Decedent had revoked the will and that the friend's application for probate had not been filed in good faith. The trial judge disagreed with the jury on the issue of good faith and awarded the friend $45,000 in attorney's fees and expenses to be paid from the estate. After reviewing the evidence (including the testimony of a Decedent's lawyer and another witness who saw Decedent destroy the will) the appellate court ruled that the friend had not conclusively proved that he acted in good faith and that the jury's findings should stand.

Mere Mistaken Ownership Is Not Adverse Possession

Tue, 08 Jul 2008 13:44:57 -0500

Tran v. Macha. Neighboring relatives shared the use of a driveway for many years, thinking it belonged to one of them when in fact it belonged to the other. Upon learning the true facts, Plaintiff claimed to have acquired the driveway by adverse possession. The Texas Supreme Court disagreed, holding that adverse possession requires an actual and visible appropriation of real property, commenced and continued under a claim of right that is inconsistent with and is hostile to the claim of another person. Because the neighbors shared use of the strip by agreement, the use was not inconsistent with or hostile to the rights of the true owner.

The Long & Winding Road: Easement by Necessity Does Not Guarantee Convenient Access

Tue, 08 Jul 2008 13:45:01 -0500

Crone v. Brumley. Brumley's property, originally part of a larger tract, is landlocked. When the larger parcel was originally subdivided, the owner had access to a roadway to the north, but not to the south. Later a road was built to the south, and Brumley wishes to access his property from that direction because only four-wheel drive vehicles can traverse the path to the north roadway. The Court holds that Brumley is entitled to an easement by necessity because he has no other legal access to his land, but he is not entitled to the most convenient access. Since the original access via the north roadway, his access must still be to that direction; the fact that the easement is impassable until it is repaired is of no consequence.

Family Squabble Over Uncle's Estate Turns Case into Procedural Tangle

Tue, 08 Jul 2008 13:45:03 -0500

Fillip v. Till. Despite the best efforts of Uncle and Niece to cut Nephew off, Nephew ended up with a court order awarding him the Uncle's farm. Held: In Texas, an agent under a power of attorney cannot create a trust for the principal. Further, a disclaimer filed more than 9 months after the death of the decedent is ineffective, but can still operate as an assignment of interest. As a result, Niece's daughters have the right to challenge Nephew's ownership of the farm.

One Thing at a Time: Eviction Appeals Should be Streamlined

Tue, 08 Jul 2008 13:45:06 -0500

Hong Kong Development, Inc. v. Nguyen. On appeal of Landlord's eviction suit, Tenant countersued Landlord in County Court for various tort claims. This Court holds that it was error for the County Court to consolidate the eviction suit with the tort claims because eviction suits are intended to provide a speedy, summary, and inexpensive determination of the right to immediate possession of real property. Since the tort claims were unrelated to the issue of possession of the property, the County Court lacked jurisdiction to hear them.

No Free Money For You!

Tue, 08 Jul 2008 13:45:08 -0500

Doss v. Homecomings Financial Network, Inc. Husband and Wife purchased two pieces of land financed through Homecomings. When they later divorced, Husband and Wife were each awarded one tract land and ordered to pay their respective mortgages. Wife subsequently obtained a new loan, and when Homecomings received the payoff funds it mistakenly applied them to Husband's loan. In the process, Husband's land was paid off and he received a refund. Upon discovering the error Homecomings demanded reimbursement but Husband refused. The court holds that Homecomings asserted a valid claim for "money had and received." As a result, it was entitled to reimbursement plus interest, and to reinstatement of its lien against Husband's land, but could not recover attorney's fees from Husband.

Squatter Waits Too Long To Sue

Tue, 08 Jul 2008 13:45:11 -0500

Session v. Woods. Woods purchased the subject property at a tax sale; Session claims he had acquired title by adverse possession ("squatter's rights"), and that such title was superior to Woods' tax deed. The court holds that Session's suit was barred by the statute of limitations. Subject to exceptions not applicable in this case, the Tax Code states that an action for title to property may not be maintained against the purchaser of the property at a tax sale unless the action is commenced "before the first anniversary of the date that the deed executed to the purchaser at the tax sale is filed of record."

Illegal Closed Meeting Invalidates Land Sale

Tue, 08 Jul 2008 13:45:13 -0500

City of Laredo v. Escamilla. City wanted to buy a piece of land, and met in closed meeting to discuss the matter before approving the purchase in an open meeting. The court holds that the City failed to prove that discussion in an open meeting would have impaired its negotiating position with third parties, as required by the "real estate exception" to the Texas Open Meetings Act. As a result, the sale was invalidated.

Slip-Sliding Away: "As Is" Clause Relieves Developer of Liability

Tue, 08 Jul 2008 13:45:15 -0500

Welwood v. Cypress Creek Estates, Inc. Homeowner sued developer for damages caused by failure of the the slope behind his house. The Court finds that the contract contained an "as is" provision, that the homeowner was aware of the provision, and that there is no evidence of misrepresentation or concealment by the developer. The Court questions whether Texas recognizes an implied warranty of good and workmanlike development, but holds that if such a warranty exists the "as is" language was sufficient to disclaim it.

Invalid Non-competition Agreement Can Become Enforceable Later

Tue, 08 Jul 2008 13:45:18 -0500

Alex Sheshunoff Management Services, L.P. v. Johnson (Tex. 10/20/2006). Under prior law, an at-will employer's promise to provide training and access to confidential information would not bind the employee to a non-competition agreement because the employer could avoid the promise by simply firing the employee. Here, the Court modifies the rule to state that an at-will employee's non-compete covenant becomes enforceable when the employer performs the promises it made in exchange for the covenant.

Lawyer Gets an Education in Landlord-Tenant Law

Tue, 08 Jul 2008 13:45:22 -0500

Carrasco v. Stewart. Lawyer remained in possession of premises after his lease expired. At trial he claimed that he was a month-to-month tenant under a verbal lease and thus not subject to late fees. HELD: Under the common law, when a tenant "holds over" after a fixed-term lease expires it is presumed that the tenant will be bound by the original lease terms for a period of one year. In this case, the tenant failed to rebut the presumption, and is liable for late fees because the original lease provided for late fees.

Divorce Awards Life Insurance to Husband; Wife Gets Proceeds Anyway

Tue, 08 Jul 2008 13:45:24 -0500

Dohnalik v. Somner. Divorce decree awarded Husband "all right, title, interest and claim in . . . [a]ll policies of insurance (including cash values) insuring [Husband's] life." However, Husband never changed the beneficiary designation of his Serviceman's Group Life Insurance (SGLI) policy. HELD: If an SGLI policy-holder wishes to change his designated beneficiary, he must communicate that decision to the proper office. Accordingly, ex-wife was entitled to the SGLI proceeds.

Right of First Refusal Invalidated Due to Insufficient Property Description

Tue, 08 Jul 2008 13:45:26 -0500

A right of first refusal described the subject property as 3.0152 acres adjoining a specific tract of land. The court held there were no documents attached to or referenced by the instrument to describe the shape and boundaries of the 3.0152-acre tract. Accordingly, the property description was insufficient as a matter of law and the right of first refusal was invalid.

Texas courts will not create a "marriage-like relationship"

Tue, 08 Jul 2008 13:45:28 -0500

Executor sued Decedent's boyfriend to recover property alleged to belong to Decedent's estate. The boyfriend asked the Court to exercise its equitable authority to adopt a "marriage-like relationship" doctrine in recognition of his relationship with the Decedent. HELD: Texas' public policy is unambiguous, clear, and controlling on the question of creating a new equitable remedy akin to marriage: a Court may not create such a remedy.

Minor defects in annual contract for deed accounting do not trigger liquidated damages

Tue, 08 Jul 2008 13:45:30 -0500

Home buyer under a Contract for Deed is not entitled to liquidated damages unless the annual statement required by the Property Code is so deficient as to be something other than a good faith attempt by the seller to inform the purchaser of the current status of their contractual relationship.

Texas homeowner's policy does not cover mold damage

Tue, 08 Jul 2008 13:45:33 -0500

The mandatory homeowner's policy form promulgated by the Texas Department of Insurance says, "We do not cover loss caused by mold," but it also says, "We do cover ensuing loss caused by water damage." Nevertheless, the Court holds the policy is not ambiguous and does not cover mold damage.

Wife fails to pierce corporate veil in divorce suit

Tue, 08 Jul 2008 13:45:35 -0500

In a divorce, the court may not use the "alter ego" theory to pierce the corporate veil and divide the business' assets unless (1) the corporation has effectively ceased to exist as a separate entity, and (2) the improper use of the corporation harmed the marital estate to such a degree that reimbursement is no longer a viable remedy.