Leticia Rodriguez and All Other Occupants of 2520 Saulsbury, Temple, Texas 76504 v. Citimortgage, Inc.

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-10-00093-CV

Leticia Rodriguez and all other occupants of 2520 Saulsbury, Temple, Texas 76504, Appellants

v.

Citimortgage, Inc., Appellee

FROM COUNTY COURT AT LAW NO. 3 OF BELL COUNTY

NO. 64,877, HONORABLE GERALD M. BROWN, JUDGE PRESIDING

MEMORANDUM OPINION

Leticia Rodriguez appeals a trial court judgment in a forcible detainer suit awarding

Citimortgage, Inc., possession of residential real property and attorney’s fees. In four points of error,

Rodriguez contends that the trial court’s judgment was erroneous because (1) there was no competent

evidence that Citimortgage had complied with section 51.002 of the property code when foreclosing on

the property and acquiring ownership, (2) a business records affidavit on which Citimortgage relied to

prove up its written demand to surrender possession was incompetent, (3) there was no evidence that

Rodriguez had continued to occupy the property after demand was made that she vacate, and (4) there was

no evidence to support the trial court’s award of attorney’s fees. We will overrule each of Rodriguez’s

points except for her challenge to the judgment award of attorney’s fees, which we reverse and remand.

In 2008, Rodriguez executed a deed of trust granting a first lien security interest in a

residential property, located at 2520 Saulsbury in Temple, to Primary Residential Mortgage Inc. The deed

of trust provided in the paragraph entitled “Foreclosure Procedure” that:

If the Property is sold pursuant to [a nonjudicial foreclosure sale under the deed of

trust], Borrower [Rodriguez] or any person holding possession of the Property

through Borrower shall immediately surrender possession of the Property to the

purchaser at that sale. If possession is not surrendered, Borrower or such person shall

be a tenant at sufferance and may be removed by writ of possession.

On February 19, 2009, the deed of trust was assigned by the note holder (Mortgage Electronic

Registration Systems Inc., as nominee for Primary) to Citimortgage. Rodriguez allegedly defaulted,

and Citimortgage foreclosed on the property. A substitute trustee conducted a nonjudicial

foreclosure sale at which Citimortgage purchased the property and received a substitute trustee’s

deed memorializing the conveyance.

Thereafter, Citimortgage filed in justice court a verified petition for forcible detainer

against Rodriguez and “all other occupants” of the property, alleging that it had made

written demand on “Defendant(s)” to vacate and that “Defendant(s)” had refused to comply. The

justice court awarded Citimortgage possession of the property. Rodriguez and other occupants

then appealed to the county court at law. Following a de novo bench trial, the trial court awarded

Citimortgage possession of the property plus $1,000 in trial-level attorney’s fees and conditional

additional appellate attorney’s fees.1 Rodriguez now appeals to this Court.2

1

The trial court awarded $2,000 in appellate fees to Citimortgage in the event of an

unsuccessful appeal by Rodriguez to this Court, an additional $3,500 in the event of an unsuccessful

petition for review by Rodriguez to the supreme court, and $2,500 if the supreme court granted a

petition for review by Rodriguez but ultimately ruled against her.

2

Rodriguez’s appellate briefing is inconsistent with regard to whether she is appearing

alone or is also joined by any “other occupants” of the property under the common representation

of Rodriguez’s counsel. However, as Citimortgage emphasizes in its brief, the notice of appeal is

in Rodriguez’s name only. In response to Citimortgage’s argument, Rodriguez has not requested

leave to amend her notice to cure the defect as to any other occupants. To the extent that any

occupants beside Rodriguez are purporting to participate as appellants, we dismiss those appeals.

2

The statutory remedy of forcible detainer will lie when a person in possession

of real property refuses to surrender possession on demand if, as was alleged here, the person is

a tenant at will or by sufferance, “including an occupant at the time of foreclosure of a lien

superior to the tenant’s lease.” See Tex. Prop. Code Ann. § 24.002(a) (West 2000). To establish

forcible detainer, Citimortgage had to prove: (1) it was the owner of the property in question,

(2) Rodriguez was an occupant at the time of foreclosure, (3) the foreclosure was of a lien superior

to Rodriguez’s right to possession, (4) Citimortgage made a written demand for possession in

accordance with section 24.005 of the property code, and (5) Rodriguez refused to vacate. See id.

§§ 24.002, .005 (West Supp. 2010); Murphy v. Countrywide Home Loans, Inc., 199 S.W.3d 441,

445 (Tex. App.—Houston [1st Dist.] 2006, pet. denied). At trial before the county court at law,

Citimortgage introduced into evidence, without objection, certified copies of Rodriguez’s deed of

trust, the assignment of the deed to Citimortgage, and the substitute trustee’s deed of the property.

Citimortgage also introduced a business records affidavit accompanying copies of its notices to

vacate sent to Rodriguez and “other occupants” of the property. The trial court admitted the affidavit

and records over Rodriguez’s objection that the affiant had failed to demonstrate her personal

knowledge of the facts asserted. Rodriguez did not present any evidence of her own, only argument.

In her third point of error, Rodriguez argues that the trial court erred in granting

judgment for Citimortgage because the substitute trustee’s deed “was not sufficient to support

a prima facie claim of title.” The focus of Rodriguez’s challenge is an affidavit attached to the

substitute trustee’s deed, prepared by an employee of Citimortgage’s law firm’s affiliated service

provider, that purports to verify that the foreclosure had been conducted in accordance with all

3

applicable legal requirements. Rodriguez argues that the affidavit does not demonstrate the witness’s

personal knowledge of the facts asserted or that Citimortgage had complied with property code

section 51.002. Section 51.002 requires a mortgage servicer to serve a debtor in default with

notice of default giving the debtor at least twenty days to cure the default, and if the default is not

cured, the mortgage servicer then must serve the debtor with twenty-one days’ notice of the

public sale at auction. Tex. Prop. Code Ann. § 51.002(b), (d) (West Supp. 2010). Section 51.002(e)

further provides that “[t]he affidavit of a person knowledgeable of the facts to the effect that service

was completed is prima facie evidence of service.” Id. § 51.002(e).

In a forcible detainer action, the trial court considers only the issue of who has

the right to immediate possession of real property, not the merits of the title. Tex. R. Civ. P. 746;

see also, e.g., Shutter v. Wells Fargo Bank, 318 S.W.3d 467, 470 (Tex. App.—Dallas 2010,

pet. dism’d w.o.j.) (op. on reh’g). Forcible detainer is intended to be a speedy, inexpensive,

summary procedure for obtaining possession without resorting to a suit on the title. Williams

v. Bank of New York Mellon, 315 S.W.3d 925, 926-27 (Tex. App.—Dallas 2010, no pet.) (citing

Scott v. Hewitt, 90 S.W.2d 816, 818-19 (Tex. 1936)). To prevail in a forcible detainer action,

the plaintiff is required only to show sufficient evidence of ownership to demonstrate a superior

right to immediate possession. Dormady v. Dinero Land & Cattle Co., 61 S.W.3d 555, 557

(Tex. App.—San Antonio 2001, pet. dism’d w.o.j.) (op. on reh’g). If the right to immediate

possession necessarily requires resolution of a title dispute, the justice court and county court have

no jurisdiction to enter a judgment. Rice v. Pinney, 51 S.W.3d 705, 709, 713 (Tex. App.—Dallas

2001, no pet.) (collecting cases). In most disputes, however, the right to title can be determined

4

separately from the right to immediate possession, and the Texas Legislature has expressly

established a system designed to keep the two issues separate. Id. at 710. Thus, the trial court

cannot determine in a forcible detainer action whether the sale of property under a deed of trust is

invalid; instead, the displaced property occupant is entitled to bring a separate suit in district court

to resolve any title issues. Id. (citing Scott, 90 S.W.2d at 818-19).

The evidence established Citimortgage’s superior right to possession of the property.

The deed of trust established that Rodriguez agreed she would become a tenant at sufferance if she

did not immediately surrender possession of the property upon its being sold at a nonjudicial

foreclosure sale. The substitute trustee’s deed showed that Citimortgage purchased the property

at public auction after Rodriguez defaulted on the deed of trust. The notices to vacate informed

Rodriguez of her tenant-at-sufferance status and Citimortgage’s demand that she vacate the

property.3 This evidence suffices to establish Citimortgage’s right to immediate possession of

the property. See, e.g., Fleming v. Fannie Mae, No. 02-09-00445-CV, 2010 WL 4812983, at *4

(Tex. App.—Waco Nov. 24, 2010, no pet. h.) (mem. op.); Shutter, 318 S.W.3d at 471; Williams,

315 S.W.3d at 926.

Rodriguez asserts that her challenge to the affidavit’s sufficiency is not a question

going to the merits of the title such that it cannot be raised in a forcible detainer proceeding. She

couches her argument as one of “insufficient evidence” to support the trial court’s judgment

that Citimortgage had the superior right to possession. But the substance of her argument is an

3

As discussed below, the trial court did not abuse its discretion in admitting the notices to

vacate into evidence.

5

attack on the validity of the foreclosure and sale through which Citimortgage acquired the

property—a challenge to Citimortgage’s title that cannot be raised in this proceeding. See, e.g.,

Fleming, 2010 WL 4812983, at *4 (overruling exact argument presented here about sufficiency

of affidavit supporting substitute trustee’s deed); Shutter, 318 S.W.3d at 471 (same); Williams,

315 S.W.3d at 926 (same); see also Middleton v. Crestar Mortgage Corp., No. 03-99-00604-CV,

2000 WL 298694, at *4 (Tex. App.—Austin Mar. 23, 2000, no pet.) (mem. op.) (holding claim that

mortgage company’s deed lacked necessary foundation and was incompetent to show superior right

to possession involved allegations about whether default actually occurred and propriety of

foreclosure and could not be considered in forcible detainer suit). On the other hand, this is not a

case where the issues of title and right of possession are so intertwined that the trial court lacked

jurisdiction. See Dormady, 61 S.W.3d at 558-59 (collecting cases); Rice, 51 S.W.3d at 713 (same).

Here, the deed of trust created a landlord-tenant relationship when the lien was foreclosed, and

this “relationship provides a basis for determining possession without resolving the ultimate issue

of title to the property.” Dormady, 61 S.W.3d at 559; see also Rice, 51 S.W.3d at 712 & n.4 (noting

that one indication that justice court and county court need to adjudicate title and thus that suit

exceeds their jurisdiction is when landlord-tenant relationship is lacking). Consequently, we

overrule Rodriguez’s third point of error.

In her first point of error, Rodriguez contends that the trial court abused its discretion

in admitting Citimortgage’s business records affidavit and attached documents establishing

that Citimortgage gave Rodriguez and “other occupants” the statutorily required notice to vacate

before filing suit. See Tex. Prop. Code Ann. §§ 24.002, .005; Murphy, 199 S.W.3d at 445. In the

6

complained-of affidavit, Sharon L. Vaughan, who averred that she is an employee of an affiliated

service provider of Citimortgage’s law firm, purported to authenticate records related to notices to

vacate transmitted on Citimortgage’s behalf following the foreclosure sale. Vaughan further averred

to her “personal knowledge” that the notice was mailed out on April 20, 2009, which was almost

two months before Citimortgage filed its forcible detainer action. Rodriguez complains that

Vaughan’s testimony was incompetent because she failed to demonstrate her personal knowledge

to prove up the notices under the business records exception to the hearsay rule.

We review the trial court’s rulings concerning the admission or exclusion of evidence

for an abuse of discretion. See In re J.P.B., 189 S.W.3d 570, 575 (Tex. 2005). An abuse of

discretion occurs only when the court’s decision is made without reference to any guiding rules and

principles or is arbitrary or unreasonable. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238,

241-42 (Tex. 1985). We must uphold the trial court’s evidentiary ruling if there is any legitimate

basis for it. See Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998).

Moreover, we will not reverse a judgment based on a claimed error in admitting or excluding

evidence unless the complaining party shows that the error probably resulted in an improper

judgment. Tex. R. App. P. 44.1; Malone, 972 S.W.2d at 43; City of Brownsville v. Alvarado,

897 S.W.2d 750, 753 (Tex. 1995). A successful challenge to a trial court’s evidentiary rulings

requires the complaining party to demonstrate that the judgment turns on the particular evidence

excluded or admitted. Texas Dep’t of Transp. v. Able, 35 S.W.3d 608, 617 (Tex. 2000).

At trial, Rodriguez objected to the admission of the affidavit and the affidavit’s

attachments, asserting that Vaughan could not vouch for the recordkeeping and business records

7

of Citimortgage and its law firm because Vaughan was employed by an affiliated service provider

of the law firm. On appeal, Rodriguez contends that because Vaughan is an employee of an

independent contractor employed by Citimortgage’s law firm, her relationship to the firm is “too

removed to vouch for any custodianship of records of the law firm’s client,” and that even if she

had more precisely explained her relationship to the firm, she would not be qualified to testify to the

law firm’s record-keeping practices. Instead, Rodriguez argues, only a partner in a law firm would

be competent to authenticate the law firm’s records, not an independent contractor. Rodriguez

contends that Vaughan’s affidavit improperly attempts to “import the conduct or knowledge of one

entity on behalf of another.” We disagree.

The business records exception to the hearsay rule has four requirements: (1) the

records were made and kept in the course of a regularly conducted business activity, (2) it was

the regular practice of the business activity to make the records, (3) the records were made at or

near the time of the event that they memorialize, and (4) the records were made by a person with

knowledge who was acting in the regular course of business. In re E.A.K., 192 S.W.3d 133, 142

(Tex. App.—Houston [14th Dist.] 2006, pet. denied). An affidavit of the custodian of records or a

“qualified witness” may be presented at trial with the business records to establish that the records

satisfy these requirements and to render them self-authenticated. Tex. R. Evid. 803(6), 902(10). To

be a “qualified witness,” the affiant must have personal knowledge of the business’s recordkeeping

practices or of the facts contained within the business records. See Tex. R. Evid. 602, 803(6),

902(10); In re E.A.K., 192 S.W.3d at 142; Fleming, 2010 WL 4812983, at *3.

8

Vaughan testified that she is a paralegal employed by National Default Exchange,

L.P., an affiliated service provider for Barrett Daffin Frappier Turner and Engel, LLP, the law firm

that sent the notice to vacate to Rodriguez on behalf of its client, Citimortgage. She attested that

she was “authorized to make this Affidavit on behalf of [the law firm] as attorneys for

[Citimortgage].” Vaughan testified that she is the law firm’s records custodian and the person with

“care, custody, and control of all records concerning” the foreclosure and the forcible detainer suit

against Rodriguez. (Emphasis added.) In other words, Vaughan indicated that she is the law firm’s

custodian of all its records related to this suit—records that the firm keeps for its client Citimortgage.

Vaughan identified the fourteen pages attached to her affidavit as originals or exact duplicates of

records from the foreclosure and forcible entry and detainer file kept by Citimortgage in the regular

course of business. The fourteen pages consisted of several copies of the Notice to Vacate dated

April 20, 2009, each with a cover page identifying the law firm as a debt collector, copies of

two envelopes addressed to Rodriguez and bearing certified-mail labels and numbers and the

handwritten notation “REFUSED,” and two postal-service tracking sheets identifying those certified-

mail receipt numbers as being “[r]efused, April 22, 2009, 11:06 am, TEMPLE, TX 76504.”4

Vaughan testified that these records “are kept by [Citimortgage] in the regular course of business,

and it was in the regular course of business for an employee or representative of [the law firm],

with knowledge of the act . . . recorded to make the record . . . and the record was made at or near

the time or reasonably soon thereafter.” She also attested that on April 20, 2009, the notice to

4

Two copies of the notice are labeled with certified-mail numbers. These numbers

correspond with the numbers on the copies of the envelopes and the numbers on the postal-service

tracking sheets.

9

vacate was forwarded by certified mail, return receipt requested, and regular mail, postage prepaid

to Rodriguez.5

The rules of evidence do not require that the qualified witness who lays the predicate

for the admission of business records be their creator, be an employee of the same company as

the creator, or have personal knowledge of the contents of the record—personal knowledge of

the manner in which the records were kept will suffice. See Tex. R. Evid. 803(6), 902(10); see also

In re E.A.K., 192 S.W.3d at 142 (holding no abuse of discretion to admit document attested to as

business record by state agency’s employee when document was prepared by third-party contractor

documenting study conducted on behalf of state agency). This case differs from those in which

one company receives records created by another company and the receiving company then attempts

to have its own employee authenticate the records as part of its own file, but does not provide

any information indicating that the receiving company has knowledge of the predecessor’s

recordkeeping practices. See, e.g., Simien v. Unifund CCR Partners, 321 S.W.3d 235, 240-45

(Tex. App.—Houston [1st Dist.] 2010, no pet.) (op. on reh’g) (conducting three-step analysis to

determine whether documents created by third-party business were admissible as business records

of different business when affiant did not state that he or anyone from his business had knowledge of

third-party business’s recordkeeping practices or of events or conditions memorialized in third-party

business’s records); Riddle v. Unifund CCR Partners, 298 S.W.3d 780, 783 (Tex. App.—El Paso

2009, no pet.) (holding affiant employed by subsequent purchaser of account not qualified to testify

5

Section 24.005(f) of the property code provides that notice to vacate that is given by mail

“may be by regular mail, by registered mail, or by certified mail, return receipt requested, to the

premises in question.” Tex. Prop. Code Ann. § 24.005(f) (West Supp. 2010).

10

about records created by prior creditor when affiant testified he had no personal information about

how prior creditor obtained or input information). Here, although it is not clear from the affidavit

whether it was the law firm or Vaughan’s employer that created the notices and sent them out, it does

not matter which company created the notices. Vaughan has testified that it is her role to keep all

of the law firm’s records of activities that it and its representatives conduct for its client Citimortgage

and that the notices, which Vaughan testified were mailed out on April 20, 2009, are records from

the firm’s case file for Citimortgage’s suit against Rodriguez. Thus, the record in this case supports

the conclusion that the notice records were created by an employee or representative of the law firm

under the supervision of the law firm on behalf of its client. See In re E.A.K., 192 S.W.3d at 142.

Vaughan’s affidavit tracks the requirements of rule 803(6), and her testimony adequately shows

the basis for her personal knowledge of the law firm’s recordkeeping practices and the methods

by which notice to vacate was provided to Rodriguez. See Fleming, 2010 WL 4812983, at *2-4

(holding no abuse of discretion for trial court to admit affidavit submitted by Fannie Mae to establish

admissibility of notices to vacate sent out by its law firm when affiant was employee of law firm’s

affiliated service provider). We overrule Rodriguez’s first point of error.

In her fourth point of error, Rodriguez asserts that the trial court erred in rendering

judgment for Citimortgage because there was “no evidence” that Rodriguez had refused to vacate

the property after demand was made. We reject that assertion. Among other things, Rodriguez has

tacitly conceded that she has remained in possession of the property by continuing to prosecute

appeals from and superseding lower court judgments awarding Citimortgage possession. If she had

relinquished possession, her appeals regarding the parties’ competing claims to possession would

11

be moot. See Marshall v. Housing Auth. of City of San Antonio, 198 S.W.3d 782, 787 (Tex. 2006).

We overrule Rodriguez’s fourth point of error.

Finally, in her second point of error, Rodriguez asserts that there is no evidence

supporting the judgment award of attorney’s fees to Citimortgage. Citimortgage sought

attorney’s fees under section 24.006 of the property code, which states that “a prevailing landlord

is entitled to recover reasonable attorney’s fees from the tenant” if the landlord sends the tenant a

written demand to vacate the premises by registered or certified mail at least ten days before the

eviction suit is filed. Tex. Prop. Code Ann. § 24.006 (West 2000). The phrase “entitled to

recover reasonable attorney’s fees” denotes that the trial court has no discretion not to award

reasonable attorney’s fees. See Bocquet v. Herring, 972 S.W.2d 19, 20 (Tex. 1998). In general,

the reasonableness of attorney’s fees is a fact question. Id. at 21. Thus, the statute’s requirement

that the fees must be reasonable means that there must be legally and factually sufficient evidence

that the fees awarded were reasonable. See id.; Charette v. Fitzgerald, 213 S.W.3d 505, 512

(Tex. App.—Houston [14th Dist.] 2006, no pet.).

As Rodriguez emphasizes, Citimortgage did not present any evidence at trial

regarding either the amount of attorney’s fees it incurred or their reasonableness. Indeed, the record

is devoid of any mention of attorney’s fees other than in Citimortgage’s petition and the judgment

itself. While not disputing this, Citimortgage insists that the trial court was nonetheless permitted

to review the case file and take judicial notice of the amount of usual and customary attorney’s fees,

which are presumed reasonable. In support of this proposition, Citimortgage cites several cases that

apply chapter 38 of the Texas Civil Practice and Remedies Code. Civil practice and remedies code

12

section 38.004 allows a trial court to take judicial notice of the usual and customary attorney’s fees

and the content of the file in a bench trial without receiving evidence, Tex. Civ. Prac. & Rem. Code

Ann. § 38.004 (West 2008), and section 38.003 provides that the usual and customary fees are

presumed reasonable “for a claim of the type described in Section 38.001,” id. § 38.003 (West 2008).

However, a forcible detainer action is not a claim of the type described in section 38.001 of the

civil practice and remedies code. Id. § 38.001 (West 2008). We conclude, as do the majority of our

sister courts, that chapter 38’s principles regarding proof of attorney’s fees do not apply beyond those

categories of cases that the legislature has identified in section 38.001. See Charette, 213 S.W.3d

at 515 (collecting cases standing for principle that “trial courts may not use section 38.004 to

take judicial notice of the reasonableness of attorney’s fees awarded under a statute other than

section 38.001”). Consequently, we must conclude that Citimortgage failed to present legally

sufficient evidence to support the amount of attorney’s fees the trial court awarded, and we must

reverse that portion of the judgment.

On the other hand, we conclude that Citimortgage did present evidence that it made

demand as required under section 24.006 of the property code, thereby entitling it to some amount

of attorney’s fees. Accordingly, we remand Citimortgage’s attorney’s fee claim to the trial court

for further proceedings. See Uhl v. Uhl, 524 S.W.2d 534, 538 (Tex. Civ. App.—Fort Worth 1975,

no writ) (holding that amount of attorney’s fees should be remanded to trial court when plaintiff

is “clearly entitled to attorney’s fees in some amount” but there was no proof at trial of amount). To

this extent, we sustain Rodriguez’s second point of error.

13

CONCLUSION

Having overruled Rodriguez’s first, third, and fourth points of error, we affirm the

portions of the trial court’s judgment awarding possession of the property in question to

Citimortgage. We sustain Rodriguez’s second point of error to the extent of reversing the judgment

award of attorney’s fees and remanding that issue to the trial court for further proceedings.

__________________________________________

Bob Pemberton, Justice

Before Chief Justice Jones, Justices Puryear and Pemberton

Affirmed in part; Reversed and Remanded in part

Filed: January 6, 2011

14