Green Tree Servicing, LLC F/K/A Conseco Finance Servicing Corp. v. Ralph D. Woods and Karen Woods

Opinion issued August 9, 2012

In The

Court of Appeals

For The

First District of Texas

————————————

NO. 01-11-00670-CV

———————————

GREEN TREE SERVICING, LLC F/K/A CONSECO FINANCE

SERVICING CORP., Appellant

V.

RALPH D. WOODS AND KAREN WOODS, Appellees

On Appeal from County Court at Law

Waller County, Texas

Trial Court Case No. C-10246

OPINION

Appellant, Green Tree Servicing, LLC f/k/a Conseco Finance Servicing

Corp., appeals from the trial court’s grant of appellees’, Ralph D. Woods and

Karen Woods, no evidence motion for summary judgment on standing, capacity,

and chain of title. In five issues, Green Tree argues the trial court erred in granting

the no-evidence motion for summary judgment because (1) standing cannot be

challenged in a no-evidence motion for summary judgment; (2) there was some

evidence that Green Tree had standing to sue; (3) there was some evidence that

Green Tree had capacity to sue; and (4) there was some evidence of the chain of

title.

We reverse and remand.

Background

On August 29, 2000, Ralph Woods executed a Manufactured Home Retail

Installment Contract with Palm Harbor Homes I LP. The same contract assigned

Palm Harbor Homes’ interest in the contract to Green Tree. Some time later—

though the evidence does not indicate when—Green Tree assigned its interest in

the Woods contract to Conseco Finance Corp. (“Conseco Finance”). What

assignments took place after that is a subject of dispute in this appeal.

There is evidence that, at some unidentified time, Conseco Finance Corp.,

Post Consummation Estate (“Conseco Finance PCE”) assigned its interest in the

contract to U.S. Bank National Association, as trustee for Manufactured Housing

Contract Senior/Subordinate Pass-Through Certificate Trust 2000-5 (“U.S. Bank

National”). In that document, Conseco Finance PCE identifies itself as “successor

in interest to Conseco Finance Corp.”

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The record shows that, on October 1, 2000, Conseco Finance Securitizations

Corp. (“Conseco Finance Securitizations”), Conseco Finance, and U.S. Bank

National entered into a pooling agreement for servicing of certain contracts,

including the Woods contract. There is no evidence in the record of who claimed

to own the interest in the Woods contract as of October 1, 2000. The contract

identified Conseco Finance as the servicer for the contract, giving it “the sole

obligation to manage, administer, service[,] and make collections on the

Contracts.”

On June 23, 2003, the service pooling agreement was amended. The

contract involved the same parties except that Green Tree MH LLC was identified

as the “Successor Servicer,” giving it “the sole obligation to manage, administer,

service[,] and make collections on the Contracts.” As a part of its duties, Green

Tree MH LLC was authorized to “sue to enforce or collect upon Contracts, in its

own name.” By filing suit on a contract, the act of filing suit would “be deemed to

be an automatic assignment of the Contract to [Green Tree MH LLC] for purposes

of collection only.”

Concurrent with the execution of the amended service pooling agreement,

Green Tree MH LLC entered into a “subservicing agreement” with Green Tree.

The subservicing agreement authorized Green Tree “to manage, administer,

service[,] and make collections on each [contract covered by the amended service

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pooling agreement], and shall perform or cause to be performed all contractual and

customary servicing activities of the holder of such” contract covered by the

amended service pooling agreement.

On September 2, 2010, Green Tree sent a notice to Ralph Woods, asserting

that he was in default on his obligations under the Woods contract and giving him

an opportunity to cure. Green Tree asserted that failure to cure the default would

result in acceleration of the payments owed under the contract and a suit to

repossess or foreclose on the collateral. Green Tree subsequently filed suit against

Ralph and Karen Woods on November 12, 2010, seeking to collect the amount

owed under the contract and to obtain possession of the home.

The Woods filed a verified answer, asserting, among other things, that Green

Tree is not entitled to recover in the capacity in which it sues. On March 9, 2011,

the Woods filed a no-evidence motion for summary judgment, claiming Green

Tree could not establish that (1) it had standing to sue them, (2) that it had the

capacity to sue them, and (3) there was a proper chain of title from the original

seller to Green Tree.

Green Tree filed its response, attaching evidence that it asserted established

its standing, capacity, and chain of title. The Woods did not include any evidence

in its reply. Instead, they identified what they believed to be gaps in Green Tree’s

proof of standing, capacity, and chain of title. The trial court agreed and granted

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the Woods’ no-evidence motion for summary judgment without identifying the

grounds on which it was granting summary judgment.

Green Tree filed a motion for new trial, arguing that a plea to the jurisdiction

was the proper vehicle to bring a claim challenging standing and that the proper

resolution of a plea to the jurisdiction was dismissal without prejudice. Green Tree

also argued that, viewing the evidence in the light most favorable to the non-

movant, summary judgment was inappropriate. The trial court denied Green

Tree’s motion for new trial.

Standard of Review

Because summary judgment is a question of law, we review a trial court’s

summary judgment decision de novo. Mann Frankfort Stein & Lipp Advisors, Inc.

v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009).

After an adequate time for discovery, a party may move for no-evidence

summary judgment on the ground that no evidence exists of one or more essential

elements of a claim on which the adverse party bears the burden of proof at trial.

TEX. R. CIV. P. 166a(i); Flameout Design & Fabrication, Inc. v. Pennzoil Caspian

Corp., 994 S.W.2d 830, 834 (Tex. App.—Houston [1st Dist.] 1999, no pet.). The

burden then shifts to the nonmovant to produce evidence raising a genuine issue of

material fact on the elements specified in the motion. TEX. R. CIV. P. 166a(i);

Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006). The trial court

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must grant the motion unless the nonmovant presents more than a scintilla of

evidence raising a fact issue on the challenged elements. Flameout Design, 994

S.W.2d at 834; see also Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706,

711 (Tex. 1997) (holding “[m]ore than a scintilla of evidence exists when the

evidence supporting the finding, as a whole, rises to a level that would enable

reasonable and fair-minded people to differ in their conclusions”).

To determine if there is a fact issue, we review the evidence in the light most

favorable to the nonmovant, crediting favorable evidence if reasonable jurors could

do so, and disregarding contrary evidence unless reasonable jurors could not. See

Fielding, 289 S.W.3d at 848 (citing City of Keller, 168 S.W.3d at 827). We

indulge every reasonable inference and resolve any doubts in the nonmovant’s

favor. Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002). When the

trial court’s summary judgment order does not state the basis for the trial court’s

decision, we must uphold the order if any of the theories advanced in the motion

are meritorious. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216

(Tex. 2003).

Capacity

In its third issue, Green Tree argues the trial court could not have granted

summary judgment on the Woods’ defense that Green Tree lacked the capacity to

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sue them. Before determining what evidence is relevant to establishing capacity, it

is useful to note the distinction between standing and capacity.

“A plaintiff has standing when it is personally aggrieved, regardless of

whether it is acting with legal authority; a party has capacity when it has the legal

authority to act, regardless of whether it has a justiciable interest in the

controversy.” Nootsie, Ltd. v. Williamson Cnty. Appraisal Dist., 925 S.W.2d 659,

661 (Tex. 1996). Capacity concerns whether a party has a personal right to come

into court, not whether it has an enforceable right or interest. Austin Nursing Ctr.,

Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex. 2005) (citing 6A WRIGHT, MILLER, &

KANE, FEDERAL PRACTICE AND PROCEDURE: CIVIL 2D § 1559, at 441).

The service pooling agreement, its amendment, and the subservicing

agreement together present more than a scintilla of evidence that Green Tree has

the capacity to bring this lawsuit. The subservicing agreement makes Green Tree

the servicer for the contracts part of the service pooling agreement. The original

service pooling agreement identifies the Woods contract as a part of the service

pooling agreement. The subservicing agreement gives Green Tree all of the

authority for servicing that was given to Green Tree MH LLC under the amended

service pooling agreement. The amended service pooling agreement gives the

servicer the right to sue to collect and enforce the Woods contract. We hold this is

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sufficient to establish capacity. See id. at 851 & n.3 (holding whether a party has

the right to sue on behalf of another is a question of capacity).

Whether Green Tree presented sufficient evidence of a chain of title from

the original seller in the Woods contract to one of the parties to the service pooling

agreement—or whether the evidence establishes that the Woods contract remained

a part of the service pooling agreement—relates not to capacity, but to standing.

See Interstate Contracting Corp. v. City of Dallas, 135 S.W.3d 605, 618 (Tex.

2004) (holding privity of contract is matter of standing).

Accordingly, we hold that the Woods’ claim of Green Tree’s lack of

capacity could not have been a basis to support the trial court’s grant of no-

evidence summary judgment. We sustain Green Tree’s third issue.

Standing

In its first issue, Green Tree argues the trial court could not have granted

summary judgment on the claim that Green Tree lacked standing because standing

cannot be challenged in a no-evidence motion for summary judgment. We must

address, then, whether standing can be challenged in a no-evidence motion for

summary judgment and, if not, whether failure to object prior to the rendition of

the judgment waives the error. If it is error and has not been waived, we must

address harm.

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A. Error

Standing is a component of the trial court’s subject-matter jurisdiction. Tex.

Ass’n of Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 445–46 (Tex. 1993). As a

component of subject-matter jurisdiction, it cannot be waived, nor can it be

conferred by agreement. See id. (holding standing cannot be waived); In re

K.K.C., 292 S.W.3d 788, 790 (Tex. App.—Beaumont 2009, no pet.) (holding “[a]

party generally cannot confer or obtain standing by consent or agreement”).

Typically, a challenge to standing is raised in a plea to the jurisdiction. See

Brown v. Todd, 53 S.W.3d 297, 305 n.3 (Tex. 2001) (holding “[b]ecause standing

is a component of subject matter jurisdiction, we consider [the plaintiff’s] standing

as we would a plea to the jurisdiction”). “A plea to the jurisdiction is a dilatory

plea that seeks dismissal of a case for lack of subject matter jurisdiction.” Harris

Cnty. v. Sykes, 136 S.W.3d 635, 638 (Tex. 2004).

A plea to the jurisdiction may challenge the sufficiency of the facts pleaded

in a petition or it may challenge the existence of jurisdictional facts. Tex. Dep’t of

Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226–27 (Tex. 2004).

When a plea to the jurisdiction challenges the facts pleaded in a petition, the

courts must construe the pleadings liberally in favor of the plaintiff. Id. at 226. If

the pleadings do not contain sufficient facts to affirmatively demonstrate the trial

court’s jurisdiction—that is, if there is a gap in jurisdictional facts or a complete

9

absence of them—the trial court is required to afford the plaintiff an opportunity to

amend its pleadings. Id. at 226–27. If, however, the pleadings affirmatively

negate the existence of jurisdiction, the trial court may grant the plea to the

jurisdiction without allowing the plaintiff an opportunity to amend. Id. at 227.

When a plea to the jurisdiction challenges the existence of jurisdictional

facts, the trial court is required to consider relevant evidence submitted by the

parties. Id. If the evidence creates a fact issue regarding jurisdiction, the trial

court does not rule but, instead, submits the issue to the fact finder in a trial on the

merits. Id. at 228. Otherwise, the trial court rules on the motion as a matter of law.

Id.

The procedure for a plea the jurisdiction when evidence has been submitted

to the trial court mirrors the procedure for a traditional motion for summary

judgment. Id.; see also TEX. R. CIV. P. 166a(c). As a result, the Texas Supreme

Court has acknowledged that matters concerning subject-matter jurisdiction, such

as standing, can be raised in a motion for summary judgment. 1 See Bland Indep.

Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000).

1

The court in Bland did not distinguish between a traditional motion for summary

judgment and a no-evidence motion for summary judgment. See Bland Indep.

Sch. Dist. v. Blue, 34 S.W.3d 547, 554 (Tex. 2000) (holding absence of subject-

matter jurisdiction may be raised in plea to jurisdiction “as well as by other

procedural vehicles, such as a motion for summary judgment”). The court in

Miranda, however, drew a specific connection between pleas to the jurisdiction

and traditional motions for summary judgment. See Tex. Dep’t of Parks &

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When a plea to the jurisdiction is granted, the case is dismissed without

prejudice unless it is established that the plaintiff is incapable of remedying the

jurisdictional defect. See Sykes, 136 S.W.3d at 639. As a result, the plaintiff is not

prevented from refiling suit once the impediment to jurisdiction is removed. Ab-

Tex Beverage Corp. v. Angelo State Univ., 96 S.W.3d 683, 686 (Tex. App.—

Austin 2003, no pet.).

The procedures and safeguards are similar when subject-matter jurisdiction

is raised for the first time on appeal. The Texas Supreme Court has recognized

that, when reviewing subject-matter jurisdiction for the first time on appeal, there

is no opportunity to cure the defect. Tex. Ass’n of Bus., 852 S.W.2d at 446.

Accordingly, the appellate court “must construe the petition in favor of the party,

and if necessary, review the entire record to determine if any evidence supports

standing.” Id.

We must decide, then, whether it is error for a trial court to dispose of a case

with prejudice based on a challenge to subject-matter jurisdiction in a no-evidence

Wildlife v. Miranda, 133 S.W.3d 217, 228 (Tex. 2004) (recognizing standard for

considering evidence in plea to jurisdiction mirrors standard in traditional motion

for summary judgment); see also Wise Reg’l Health Sys. v. Brittain, 268 S.W.3d

799, 809 (Tex. App.—Fort Worth 2008, no pet.) (recognizing that standard in

Miranda is for traditional summary judgment). This appeal concerns whether it is

also permissible to bring a jurisdictional challenge in a no-evidence motion for

summary judgment.

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motion for summary judgment. For the reasons given below, we hold that it is

error.

To begin with, allowing a challenge to subject-matter jurisdiction in a no-

evidence motion for summary judgment would have the effect of depriving a trial

court of jurisdiction over a case in circumstances in which jurisdiction has not been

affirmatively disproved. In a plea to the jurisdiction, dismissal with prejudice is

only appropriate when subject-matter jurisdiction has been affirmatively disproved

and the jurisdictional impediment cannot be removed. See Sykes, 136 S.W.3d at

639. Likewise, a traditional motion for summary judgment can only be granted

after the defendant establishes as a matter of law that the plaintiff lacks subject-

matter jurisdiction. See TEX. R. CIV. P. 166a(c). A no-evidence motion for

summary judgment, in contrast, allows the movant to obtain summary judgment

when the non-movant’s evidence is incomplete. TEX. R. CIV. P. 166a(i). This has

the effect of depriving the trial court of jurisdiction not when jurisdiction has been

disproved, but when jurisdiction is uncertain.

Additionally, in the absence of evidence disproving jurisdiction, a plea to the

jurisdiction can only be granted when the pleadings affirmatively negate

jurisdiction. Miranda, 133 S.W.3d at 227. In that circumstance, the pleadings are

reviewed liberally in favor of the plaintiff. Id. at 226. To that end, “[i]t has long

been the rule that a plaintiff’s good faith allegations are used to determine the trial

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court’s jurisdiction.” Frost Nat’l Bank v. Fernandez, 315 S.W.3d 494, 502–03

(Tex. 2010). If there is a gap in jurisdictional facts, the trial court is required to

afford the plaintiff an opportunity to amend its pleadings. Miranda, 133 S.W.3d at

226–27.

In contrast, in a no-evidence motion for summary judgment, jurisdiction

would be deprived without consideration of the plaintiff’s pleadings. Judwin

Props., Inc. v. Griggs & Harrison, 911 S.W.2d 498, 504 (Tex. App.—Houston [1st

Dist.] 1995, no writ) (holding pleadings cannot be used as summary judgment

evidence unless statements constitute judicial admissions, which must be adverse

to party’s claims); Springer v. Am. Zurich Ins. Co., 115 S.W.3d 582, 585–86 (Tex.

App.—Waco 2003, pet. denied) (applying rule to no-evidence motion for summary

judgment).

Furthermore, even when a plea to the jurisdiction is granted, the case is

dismissed without prejudice unless the plaintiff cannot remedy the jurisdictional

defect. See Sykes, 136 S.W.3d at 639. A no-evidence summary judgment instead

requires dismissal with prejudice.

Finally, we note that, in both a plea to the jurisdiction and a traditional

motion for summary judgment, the defendant bears the burden of proving the trial

court’s lack of jurisdiction. See Nixon v. Mr. Prop. Mgmt. Co., Inc., 690 S.W.2d

546, 548 (Tex. 1985) (holding “movant for summary judgment has the burden of

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showing that there is no genuine issue of material fact and that it is entitled to

judgment as matter of law”); Miranda, 133 S.W.3d at 228 (holding standard for

considering evidence in plea to jurisdiction mirrors that of a traditional motion for

summary judgment); Tex. Dep’t of Transp. v. Olivares, 316 S.W.3d 89, 103 (Tex.

App.—Houston [14th Dist.] 2010, no pet.) (holding, in plea to jurisdiction,

defendant must produce evidence that trial court lacks jurisdiction before plaintiff

has burden to raise fact issue).

By review of these legal principles, it appears that, if we were to allow a

party to bring a jurisdictional challenge in a no-evidence motion for summary

judgment, there would be no reason for a defendant to bring a plea to the

jurisdiction. When the evidence affirmatively negates subject-matter jurisdiction,

the challenge can be brought in a motion for summary judgment. See Bland, 34

S.W.3d at 554 (holding subject-matter jurisdiction can be raised in motion for

summary judgment); Miranda, 133 S.W.3d at 228 (holding standard for

evidentiary challenges to subject-matter jurisdiction mirror that of traditional

motion for summary judgment). When the plaintiff’s pleadings negate subject-

matter jurisdiction, this can also be raised in a traditional motion for summary

judgment. See Judwin Props., 911 S.W.2d at 504 (holding pleadings cannot be

used as summary judgment evidence unless statements are judicial admissions

adverse to party’s claims); Lazarides v. Farris, 367 S.W.3d 788, 797 (Tex. App.—

14

Houston [14th Dist.] Apr. 17, 2012, no pet.) (holding “[i]f the pleadings

affirmatively negate the existence of jurisdiction, then summary-judgment may be

granted on the jurisdictional challenge without allowing an opportunity to

amend”).

By allowing a party to challenge subject-matter jurisdiction in a no-evidence

motion for summary judgment, a party would be able to completely foreclose

consideration of the plaintiff’s pleadings in determining the trial court’s

jurisdiction when the pleadings establish jurisdiction. Given that “[i]t has long

been the rule that a plaintiff’s good faith allegations are used to determine the trial

court’s jurisdiction,” allowing subject-matter jurisdiction challenges in no-

evidence motions for summary judgment would be at odds with long-standing

Texas rules of procedure. Frost Nat’l Bank, 315 S.W.3d at 502–03. It would also

deny plaintiffs the right to amend their pleadings when they have failed to

sufficiently plead jurisdictional facts, to stand on the pleadings in the absence of

evidence negating jurisdiction, and to refile suit when a jurisdictional impediment

has been removed.

Moreover, in Miranda, the Texas Supreme Court expressed concern for

circumstances when “the determination of the subject matter jurisdiction of the

court implicates the merits of the parties’ cause of action.” 133 S.W.3d at 228. In

that circumstance, the court specifically approved treating evidentiary challenges

15

to subject-matter jurisdiction like a traditional motion for summary judgment,

citing subpart 166a(c) of the Texas Rules of Civil Procedure. Id. The court

reasoned,

By requiring the state to meet the summary judgment standard of

proof in cases like this one, we protect the plaintiffs from having to

“put on their case simply to establish jurisdiction.” Bland, 34 S.W.3d

at 554. Instead, after the state asserts and supports with evidence that

the trial court lacks subject matter jurisdiction, we simply require the

plaintiffs, when the facts underlying the merits and subject matter

jurisdiction are intertwined, to show that there is a disputed material

fact regarding the jurisdictional issue.

Id.

Allowing a defendant to challenge subject-matter jurisdiction in a no-

evidence motion for summary judgment when determination of subject-matter

jurisdiction implicates the merits of the plaintiff’s cause of action would force

plaintiffs to “put on their case simply to establish jurisdiction.” Id. This would

allow defendants an end run around the safeguards established by the Texas

Supreme Court simply by changing the designation from a traditional to a no-

evidence motion for summary judgment and eliminating any burden on the

defendant other than to identify the specific ground the defendant believes to be

lacking evidentiary support.

We acknowledge that some courts of appeals have held that a challenge to

the trial court’s subject-matter jurisdiction can be brought in a no-evidence motion

for summary judgment. See, e.g., Wolfe v. Devon Energy Prod. Co., LP, No. 10-

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09-00223-CV, 2012 WL 851678, at *8 (Tex. App.—Waco March 14, 2012, pet.

filed); Bank of Am. v. Eisenhauer, No. 13-09-00004-CV, 2010 WL 2784031, at *6

(Tex. App.—Corpus Christi July 15, 2010, no pet.) (mem. op.); Jacobson v. SCI

Tex. Funeral Servs., Inc., No. 05-00-00686-CV, 2001 WL 225339, at *1 (Tex.

App.—Dallas March 8, 2001, no pet.) (mem. op.). Each of these cases, however,

treated the matter as if it was already established Texas law, which is not the case.

See Wolfe, 2012 WL 851678, at *8 (citing Mack Trucks, Inc. v. Tamez, 206 S.W.3d

572, 583 (Tex. 2006) (analyzing no-evidence motion for summary judgment on

causation)); Eisenhauer, 2010 WL 2784031, at *6 (citing Jackson v. Fiesta Mart,

Inc., 979 S.W.2d 68, 70, 71 (Tex. App.—Austin 1998, no pet.) (analyzing element

of standard of care in premises liability claim)); Jacobson, 2001 WL 225339, at *1

(citing Gen. Mills Rests., Inc. v. Tex. Wings, Inc., 12 S.W.3d 827, 832 (Tex.

App.—Dallas 2000, no pet.) (analyzing multiple elements of trespass claim)); see

also TEX. R. APP. P. 47.4 (requiring designation of “memorandum opinion” when

issues are settled).

A plea to the jurisdiction sets up safeguards and presumptions that protect

the court’s jurisdiction. See Miranda, 133 S.W.3d at 226–28. Allowing a party to

challenge subject-matter jurisdiction in a no-evidence motion for summary

judgment conflicts with these safeguards, would deprive a trial court of jurisdiction

without a showing that the court actually lacks jurisdiction, and would prevent a

17

party from removing any impediments to jurisdiction and returning to court.

Accordingly, we hold that a court’s subject-matter jurisdiction cannot be

challenged in a no-evidence motion for summary judgment.

B. Waiver

After the Woods filed their no-evidence motion for summary judgment

challenging, in part, the trial court’s subject-matter jurisdiction, Green Tree filed

its response and accompanying evidence without any claim that a no-evidence

motion for summary judgment was an inappropriate vehicle to challenge subject-

matter jurisdiction. It was not until after the trial court granted the no-evidence

motion for summary judgment that Green Tree asserted in its motion for new trial

that the Woods should have brought a plea to the jurisdiction. We must consider,

then, whether our review of the matter has been waived by Green Trees’ failure to

object.

We begin by noting that subject-matter jurisdiction cannot be waived or

conferred by agreement. See Tex. Ass’n of Bus., 852 S.W.2d at 445–46; In re

K.K.C., 292 S.W.3d at 790. Additionally, when subject-matter jurisdiction is

raised for the first time on appeal, it is reviewed similarly to a plea to the

jurisdiction. See Tex. Ass’n of Bus., 852 S.W.2d at 446 (holding appellate courts

construe the pleadings in favor of plaintiff, look to plaintiff’s intent, and review

record for evidence supporting standing).

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If we were to hold that our review of the matter can be waived, we would be

holding that a defendant can restrict the scope of our review of the trial court’s

jurisdiction simply by bringing a jurisdictional challenge in a procedural vehicle

that we have already determined to be improper. That is, if jurisdiction is raised

for the first time on appeal, we can consider the allegations in the pleadings and

must construe them liberally. Id. But if a defendant improperly challenges

jurisdiction in a no-evidence motion for summary judgment and a plaintiff can

waive this by failing to object timely, this Court would be effectively precluded

from considering the plaintiff’s pleadings on appeal. See Judwin Props., 911

S.W.2d at 504 (holding pleadings cannot be used as summary judgment evidence

except for judicial admissions adverse to party’s claims). We find no justification

for placing such a restriction on a matter that we are otherwise required to review

sua sponte. See M.O. Dental Lab v. Rape, 139 S.W.3d 671, 673 (Tex. 2004)

(holding courts are obligated to review sua sponte issues affecting jurisdiction).

We hold that Green Tree has not waived its argument that the Woods could

not bring their challenge to the trial court’s subject-matter jurisdiction in a no-

evidence motion for summary judgment.

C. Harm

In determining the nature of an instrument, courts look to its substance, not

to the form of its title or caption. Barry v. Barry, 193 S.W.3d 72, 74 (Tex. App.—

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Houston [1st Dist.] 2006, no pet.). Additionally, subject-matter jurisdiction can be

raised for the first time on appeal. Tex. Ass’n of Bus., 852 S.W.2d at 446. If the

trial court could have treated the Woods’ motion as a plea to the jurisdiction and

granted it, we must affirm. Stated another way, if the record establishes that the

trial court lacks jurisdiction, there is no harm.

We first look to the pleadings. Id. In its original petition, Green Tree

alleged that it “is the present servicer of the [Woods] Contract.” It also alleged that

it “has a perfected security interest in the Manufactured Home.” While these

comments do not specifically explain the privity of contract from the original seller

to Green Tree, it is sufficient to allege that the privity does exist. See id. (requiring

appellate courts to construe pleadings in light most favorable to plaintiff and to

look to plaintiff’s intent).

Next we consider whether the evidence affirmatively establishes that Green

Tree lacks standing. See Sykes, 136 S.W.3d at 639 (allowing dismissal with

prejudice only when evidence shows plaintiff is incapable of remedying

jurisdictional defect). We first note that the Woods never presented any evidence

of their own regarding Green Tree’s standing. Instead, they argued that there was

an evidentiary gap in establishing privity of contract because Green Tree failed to

include in its response to the motion for summary judgment any evidence of an

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assignment or chain of assignments from Conseco Finance to Conseco Finance

PCE.2

We additionally note that two of the parties to the service pooling agreement

were, at different times, owners of the assignment from the original seller of the

Woods contract. The record does not indicate who was the owner of the

assignment at the time the Woods contract was placed into the service pooling

agreement. If it was the former, Conseco Finance, the evidence also shows that

Conseco Finance then assigned the Woods contract to a party that was not a part of

the service pooling agreement, and there is no indication that the third party agreed

to abide by the service pooling agreement or that U.S. Bank National agreed to

place the Woods contract back into the service pooling agreement. If that is the

case, the evidence would show that Green Tree lacks standing.

But we do not know if that is the case. It is also possible that U.S. Bank

National was the owner when the service pooling agreement was created. If that is

the case and assuming without deciding that the document identifying Conseco

Finance PCE as the successor in interest to Conseco Finance is sufficient to

establish the chain of title, then Green Tree has standing, because there is no

indication that U.S. Bank National is no longer the owner of the assignment or that

2

In one of the documents, however, Conseco Finance PCE identifies itself as the

successor in interest to Conseco Finance.

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U.S. Bank National ever removed the Woods contract from the service pooling

agreement.

There is no evidence or evidentiary inference that would indicate which of

these possible scenarios is true. Accordingly, we hold that the evidence does not

affirmatively show that the trial court lacked subject-matter jurisdiction over Green

Tree’s claims, and we hold that the error in dismissing Green Tree’s claims is

harmful. See TEX. R. APP. P. 44.1(a) (prohibiting appellate courts from reversing

trial court unless error either probably caused rendition of improper judgment or

probably prevented appellant from properly presenting case to appellate court).

We hold that the Woods’ claim of Green Tree’s lack of standing could not

have been a basis to support the trial court’s grant of no-evidence summary

judgment. We sustain Green Tree’s first issue.3

3

Green Tree’s fourth issue challenges the Woods’ third basis presented in its no-

evidence motion for summary judgment: that there was no evidence of a proper

chain of title from the original seller to Green Tree. This was not an essential

element for any of Green Tree’s claims. Instead, the Woods’ only focus on the

chain of title concerned whether Green Tree had standing to assert its claims.

Green Tree’s second issue concerns whether it sufficiently established that the trial

court had jurisdiction. For the reasons given above, we hold that it has not, and

we overrule Green Tree’s second and fourth issues. Finally, in its fifth issue,

Green Tree essentially argues that the trial court failed to view the evidence in the

light most favorable to it. Given that this argument could not result in greater

relief than what has been awarded, we do not need to reach this issue. See TEX. R.

APP. P. 47.1.

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Conclusion

We reverse the judgment of the trial court and remand for further

proceedings.

Laura Carter Higley

Justice

Panel consists of Chief Justice Radack and Justices Higley and Brown.

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