U.S. National Bank Association v. Bobby Johnson

Opinion issued December

30, 2011

In The

Court of

Appeals

For The

First District

of Texas

————————————

NO. 01-10-00837-CV

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U.S. National Bank Association , Appellant

V.

Bobby Johnson , Appellee

On Appeal from the 434th District

Court

Fort Bend County, Texas

Trial Court Case No. 09-DCV-177382

MEMORANDUM OPINION

This is a restricted

appeal from a no-answer default judgment. [1] Appellee Bobby Johnston sued appellant U.S.

National Bank Association (USNBA) to quiet title to his house. USNBA brings two issues, claiming there (1) is

error apparent on the face of the record because the judgment erroneously

granted relief not requested in Johnson’s petition and (2) is no other

independent basis for the permanent injunction.

We agree and reverse.

Background

In his pleadings, Johnson maintains

that he signed a note to payee Mortgage Investment Lending Associates, Inc. and

that USNBA claimed it was the current holder of the note, with authority to

receive payments and foreclose on Johnson’s house. According to Johnson’s pleadings, USNBA has

collected payments from him, threatened foreclosure, and disparaged his credit.

In his petition, Johnson lists two

“causes of action.” First, he requests a

declaratory judgment (a) holding that USNBA is not the holder of the note, (b)

determining the identity of the note’s holder, and (c) calculating the amount

owed on the note. Second, he requests a

permanent injunction requiring USNBA “to cease and desist from entering and

taking possession of the [house] or otherwise interfering with [his] right to

the quiet enjoyment and use of the [house]; proceeding with or attempting to

sell or foreclose upon the [house]; and attempting to purchase, transfer,

assign or collect on the Note.”

After USNBA did not appear, Johnson

filed a “motion for entry of default and default judgment” in which he stated

he was “seeking an Order of Quiet Title” and prayed that the district court

render a default judgment that “Title is quieted sole in the name of the

Plaintiff.” [2] The district court rendered a final default judgment

that (1) quieted title in the house in Johnson as against USNBA and (2)

enjoined USNBA from (a) entering and taking possession of the house or

otherwise interfering with Johnson’s right to the quiet enjoyment and use of

the house, (b) attempting to sell or foreclose on the house, and (c) attempting

to purchase, transfer, assign, or collect on the note.

Discussion

Restrictive appeal

A party can prevail in a restricted

appeal only if: (1) it filed a notice of the restricted appeal within six

months after the judgment was signed; (2) it was a party to the underlying

lawsuit; (3) it did not participate in the hearing that resulted in the

judgment complained of and did not timely file any postjudgment motions or

requests for findings of fact and conclusions of law; and (4) error is apparent

on the face of the record. Ins. Co. of State of Pa. v. Lejeune , 297

S.W.3d 254, 255 (Tex. 2009). The only

element at issue in this case is the fourth: whether there is error apparent on

the face of the record. USNBA claims the

district court either erred in quieting title because Johnson did not plead

that cause of action in his petition, or erred in granting more relief than

Johnson requested.

A judgment must be based upon

pleadings. “(A) plaintiff may not

sustain a favorable judgment on an unpleaded cause of action, in the absence of

trial by consent.” Stoner v. Thompson , 578 S.W.2d 679, 682 (Tex. 1979) (quoting Oil Field Haulers Ass’n v. R.R. Comm’n ,

381 S.W.2d 183, 191 (Tex. 1964)). In

determining whether a cause of action was plead, a plaintiff’s pleadings must

be adequate for the court to be able, from an examination of the pleadings

alone, to ascertain with reasonable certainty and without resorting to

information from another source, the elements of plaintiff’s cause of action

and the relief sought with sufficient information upon which to base a judgment. Stoner ,

578 S.W.2d at 683 . Mere formalities,

minor defects, and technical insufficiencies will not invalidate a default

judgment in which the petition states a cause of action and gives “fair notice”

to the opposing party of the relief sought.

Id. Texas Rules of Civil Procedure 45(b) requires

a “statement in plain and concise language of the plaintiff’s cause of action”

that gives “fair notice to the opponent [of] . . . the allegations as a whole,”

and Rule 47(a) requires “a short statement of the cause of action sufficient to

give fair notice of the claim involved.”

A default judgment is erroneous if the plaintiff’s petition does not

give fair notice of the claim asserted. Stoner , 578 S.W.2d at 684–85.

Johnson plead for a declaratory action,

which is authorized by the Uniform Declaratory Judgments Act. Tex.

Civ. Prac. & Rem. Code Ann. §§ 37.001–.011 (West 2008). The Act allows a court “to declare rights,

status and other legal relations.” Id. § 37.003(a); see City of El Paso v.

Heinrich , 284 S.W.3d 366, 370 (Tex. 2009). Johnson’s petition specifically requests a

declaratory judgment (a) holding that USNBA is not the holder of the note, (b)

determining the identity of the note’s holder, and (c) calculating the amount

owed on the note.

Suit to quiet title

We first determine whether Johnson’s

petition states a cause of action to quiet title. The Texas Supreme Court long ago explained

the purpose of quieting title, which determines possession, as opposed to

ownership:

The action to quiet title to land

. . . must embrace all that class of cases necessary to the protection of the

fullest right to land recognized by law, but not declared such as will support

an action of trespass to try title, or like remedy. Considered technically, a suit to quiet

title, except in those cases in which it is permitted to establish a right

between one person and many others claiming distinct and individual interests,

is limited to cases in which a person in possession seeks relief against one

who has repeatedly, and without success, sought to obtain possession by the

common-law action of ejectment. That

action was simply a possessory action, and no question of title was settled by

it; hence the necessity, frequently, for a suit to quiet title. The action of trespass to try title serves

the purposes of an action of ejectment in this state; but in it the question of

title, as well as right to the possession, is determined and as fully settled

as it could be by a suit to quiet title; hence seldom, if ever, could a suit to

quiet title, technically considered, be here necessary. The suits contemplated must be suits of

broader purpose, embracing suits founded even on equitable titles instituted to

remove cloud from such title, and suits necessary, . . . as occasion may

require it, to enable the holder of the feeblest equity to remove from his way

to legal title any unlawful hinderance having the appearance of better right.

Thomson v. Locke , 1 S.W.

112, 115 (Tex. 1886). A cloud on title

exists when an outstanding claim or encumbrance is shown which, on its face, if

valid, would affect or impair the title of the owner of the property. Accordingly, the elements of the cause of

action to quiet title are that the plaintiff must show (1) an interest in a

specific property, (2) title to the property is affected by a claim by the

defendant, and (3) the claim, although facially valid, is invalid or

unenforceable. Sadler v. Duvall , 815 S.W.2d 285 , 293 n.2 (Tex. App.—Texarkana

1991, writ denied); Best Inv. Co. v.

Parkhill , 429 S.W.2d 531, 534 (Tex. Civ. App.—Corpus Christi 1968, writ

dism’d); see 17 William V. Dorsaneo III et al., Texas

Litigation Guide § 257.02[1] (2004).

Although Johnson’s petition did not

explicitly identify a cause of action with the heading “suit to quiet title,” it

does set out the following: (1) Johnson’s claim that he owns the house; (2) that

USNBA asserts itself as the holder of the note on the house, threatened

foreclosure, and disparaged his credit; and (3) his challenges as to whether USNBA

is the current note holder. Johnson’s

petition, therefore, gave fair notice to USNBA of the elements of a cause of

action to quiet title.

This does not, however, end our

inquiry. Johnson could have plead for a

declaratory action quieting title but did not.

Instead, he specifically requested that the trial court “issue a

declaratory judgment that (a) Defendant is not the holder of the Note; (b) a

declaration of which party is the current Holder of the Note if such

information can be obtained, and (c) the amount owed on the Note” and

“specifying their [sic] and Defendant’s rights and duties in connection with

the Note.” When the district court,

however, quieted title to the house in Johnson as against USNBA and, thus, granted

more relief than Johnson requested, it erred.

See Mullen v. Roberts , 423 S.W.2d 576, 579 (Tex. 1968) (holding default

judgment must accord with pleadings); Binder

v. Joe , 193 S.W.3d 29, 33 (Tex. App.—Houston [1st Dist.] 2006, no pet.)

(error apparent on face of record when trial court granted relief in excess of

that plead). [3]

We sustain issue one.

Injunctive relief

In its second issue, USNBA contends

that the district court’s grant of injunctive relief should be reversed because

Johnson’s request for a permanent injunction was based solely on his pleading

for a declaratory action. We agree. Johnson’s petition does not state an

independent statutory basis for injunctive relief, but instead is “[b]ased on

the facts above,” referring to the declaratory action. Unless a statutory ground exits for

injunctive relief, the general rule at equity is that before injunctive relief

can be obtained, it must appear an adequate remedy at law does not exist. Butnaru

v. Ford Motor Co. , 84 S.W.3d 198, 210 (Tex. 2002) (quoting Republic Ins. Co. v. O’Donnell Motor Co. ,

289 S.W. 1064, 1066 (Tex. Civ. App.—Dallas 1926, no writ)). Johnson is not entitled to injunctive relief

in light of our disposition of issue one.

We sustain issue two.

Appellate relief

Johnson requests, in the alternative,

that if this Court reverses the district court’s judgment, that we render the

judgment the district court should have rendered, i.e., issue a declaratory

judgment that USNBA is not the holder of the note, quiet title to the house on

that basis in Johnson against USNBA, and grant injunctive relief. See

Tex. R. App. P. 43 (“When

reversing a trial court’s judgment, the court must render the judgment that the

trial court should have rendered, except when: (a) a remand is necessary for

further proceedings; or (b) the interests of justice require a remand for

another trial.”). Johnson cites to one

default‑judgment case, which is distinguishable.

In Church

v. Quick , the Fourteenth Court of Appeals modified a divorce decree to

remove void portions of the decree, and as so modified, affirmed. Church

v. Quick , No. 14‑08‑00131‑CV, slip op. at 8, (Tex.

App.—Houston [14th Dist.] July 14, 2009, no pet.) (mem. op.), available at http://www.14thcoa.courts.state.tx.us/opinions/PDFopinion.asp?OpinionID=85924 ; see Tex. R. App. P. 43.2(b). [4] The error in the judgment before this Court

is reversible error, not void. See

Browning v. Prostok , 165 S.W.3d 336, 346 (Tex. 2005) (“A judgment is void

only when it is apparent that the court rendering judgment ‘had no jurisdiction

of the parties or property, no jurisdiction of the subject matter, no

jurisdiction to enter the particular judgment, or no capacity to act.’”).

Johnson acknowledges that in cases of legally

insufficient default judgments, Texas appellate courts do not render judgment. [5] See

Holt Atherton Indus., Inc. v. Heine ,

835 S.W.2d 80, 86 (Tex. 1992) (“Texas courts view an appeal from a default

judgment somewhat differently than an appeal from a trial on the merits. In part, this is because an adjudication on

the merits is preferred in Texas.”).

Because default judgments are highly disfavored, we hold that reversing

the district court’s erroneous default judgment and rendering a nonerroneous

default judgment would not be in the interest of justice.

Accordingly, we reverse the district

court’s default judgment and remand the case to the district court for further

proceedings. See Tex. R. App. P.

43.2(d).

Jim

Sharp

Justice

Panel

consists of Justices Jennings, Sharp, and Brown.

[1] See Tex. Civ.

Prac. & Rem. Code Ann. §§

51.102–.013 (West 2008 & Supp. 2011) (authorizing appeal by writ of error,

now restricted appeal); Tex. R. App. P.

30 (restricted appeal); Tex. R. App. P.

239 (default judgment).

[2] A motion,

of course, is not a pleading. See Tex.

R. Civ. P. 78 (defining plaintiff’s pleadings as original petition and

such supplemental petitions as may be necessary).

[3] Johnson

argues that his general prayer for relief was sufficient to authorize the

additional relief, citing Stoner , 578

S.W.2d at 684 . Stoner , however, held that absent mention of damages in the

pleadings, a general prayer did not authorize a default-judgment award of

$50,000 in damages, and is not applicable to Johnson’s argument. Id.

at 683–84.

[4] Modifying

a trial court’s judgment and affirming it as modified is the functional equivalent

of reversing the trial court’s judgment and rendering the judgment the trial

court should have rendered. See Tex.

R. App. P. 43.2(c).

[5] In cases

in which the appellee files a remittitur, appellate courts have rendered

judgment when reversing default judgments that awarded damages in excess of the

amount plead for in the petition. See, e.g. , Mahon v. Caldwell, Haddad, Skaggs, Inc. , 783 S.W.2d 769, 772 (Tex.

App.—Fort Worth 1990, no pet.). We note

that in Mahon , the Fort Worth Court

of Appeals stated it would reverse and remand for trial if the remittitur was

not filed. Id.