David Gordan Schmidt (d/B/A ABC Bonding Company) and Greenbrier Equities, LLC v. Brenda Crawford

In The

Court of Appeals

For The

First District of Texas

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NO. 01-18-00846-CV

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DAVID GORDON SCHMIDT D/B/A ABC BONDING COMPANY AND GREENBRIAR

EQUITIES, LLC, Appellants

V.

BRENDA CRAWFORD, CARLOS PEREZ, ANTHONY WILLIAMS, ANNIE J.

BUTLER, ANTHONY FRANCO, AMBRIA FIKE, DEBRA JOHNSON, VICTORIA

WELLS, MILDRED ENGLISH, OTTIS WILLIAMS, RANDY L. LASTER, PABLE

MURILLO, EMMA MURILLO, CRAIG COOPER, NELSON MARTIN ARMSTRONG,

MAZEN BREIR, BENITO MARTINEZ, TANYA PEDROZA, SERGIO PEDROZA,

CAROLYN ETHERIDGE, LOUISE SEALS, TERRY MOORE, MARIA RAMIREZ,

PETE GARCIA, DENISE BALDWIN, WILLIAM T. ETHERTON, PATRICIA

ETHERTON, SHARON WILLIAMS, HELEODORA CRUZ, HATTIE HEMPHILL,

AGUSTINA ROBERTS, LOUIS ROBERTS, EMILY JOHNSON, IRIS EDITH

SEGUNDO, JOANNA LOAEZA, KEVIN WILLIAMS, RITA WILLIAMS, YOLANDA

CARRIERE, ANTHONY CITTI, JUAN CISNEROS, BRANDY JOHNSON, JOHN

GHOLSTON, ANSON FURMAN, IVIE BELL, LAURA DIAZ, DARLENE ALEJANDRO,

JESSE DELEON, CYNTHIA DELEON, JESUS VEGA, BEVERLY VEGA, RAY

PERFECTO, BRIDGET NWOKO, NEMIAH CLARK, EARLEAN WILLIAMS,

LAKESHEA CLARK, PETE GONZALES, PAT LEE, MARY VICTORIAN, TIFFANY

JOHNSON, ELIAS GAMINO, TIFFANY CHENIER, MURALINE PETER, VICTOR

REYES, VERONICA SMITH, JIMMIE ENGLETT, VELVET HILTON, STEPHEN

LACY, LEROY VANTERPOOL, PATRICIA WESLEY, SAMMIE L. ABRAHAM,

EDITH M. ABRAHAM, BRENDA BROWN, JESUS SILVESTRE, FELICITA AGUILAR,

GABINO SALAZAR, JOSEFINA M. NOWLIN, SANDRA DORRON, JESUS

VELAZQUEZ, BONNIE CEPHUS, JOSEPHINE ROCHA, LEON JACOBSON, LINDA

JACOBSON, OLIVIA SIMS, CONSTANCE GAY, ENSLEY CLINTON, LLEWEL

WALTERS, MAURO REYNERIO FERNANDEZ CRUZ, ANTHONY THOMPSON,

JUAN CARLOS RIOS RAMIREZ, PHILLIP C. CLARK, BEATRICE PENA, CAROL

ASKEW, BRIAN CORMIER, STEVEN CRUZ, LEROY WELLS, HAROLD KINNARD,

PLUSHATTE DAVIS, DEIDRE DOBBINS, DAVID SPAULDING, MICHAEL KOSSA,

DIANA KOSAS, SERAFIN LUNA, DEBORAH BERRYHILL, O’KEEFE ALLEN,

CHRISTOPHER P. VANA, SR., GRACE HAMILTON, BELINDA SPENCER, RENORA

RIGGINS, IVONNE JACKSON, EDITH ORDONEZ, WILBER ORDONEZ, TESSIE

LYNCH, KATHERINE SANDERS, CHARLES MOURNING, ILIANA PEREZ,

TIBURCIA ZAYALA, CHRISTOPHER GREEN, DONALD SHELTON, DONALD

CREDEUR, AVIS BATTLE, GRACE PHILLIPS, DAROLYN LEWIS, RAYMOND

LEWIS, JR., MICHAEL MILLER, ESTHER DOUBLIN, MARCOS ORTIZ, ROBERT

SANCHEZ, ROSALINDA SANCHEZ, TIFFANY SHANNON, ALTHA DAVIS,

HERMAN DAVIS, NELSON HEBERT, MELVIN HERRERA, JUANITA CANO,

PATRICE BOYCE, EDSON DRONBERGER, CHARLOTTE WYNN, JACQUELINE

HILL, ATANACIO RUIZ, ELOISA RUIZ, ROBERTO HERNANDEZ, CLEMENTINA

HERNANDEZ, JIM SILVA, LUZ BATALLA, ISMAEL MEDINA, HORTENCIA

RODRIGUEZ, ALFRED WATSON, JERRY ESCALANTE, LLOYD CASTILOW, LUIS

PENA, CAREY MURRAY, LUZ WILDMAN, CARL EARL, ISMAEL AVELLANEDA,

KENDALIA DAVIS, GAIL FRITZ, LEE CARTWRIGHT, ORFILIA MIRANDA,

JAINELL LETRYCE, VELAZQUEZ BUTLER, COURTNEY MITCHELL, TRAVIS

WATERS, DEBBIE WATERS, ANTHONY NORRIS, SHARON A. NORRIS,

ADELMIRA SALINAS, SARAH LANDRY, GLORIA GARCIA, JOEL ZAMARRIPA,

GERARDO ROMO, PHILLIP ROSS, LAKEISHA ROSS, EARLINE DURANT

WATKINS, GERARDO MARQUEZ, NILZA RODRIGUEZ, JANNETTE BROWN,

VICTOR H. ESTRADA, BLANCA A. ESTRADA, ANNE CLARE, JAMES CLARE,

CHARLENE TALBOTT, MARIA VELEZ, GREG HILLIGIEST, RANDY WILSON,

SAUL AGUILERA, HARLENE BRADY, MARY FLOWERS, JIMMIE SMITH, BETTY

R. SMITH, CYNTHIA JENKINS, CLARENCE MCDADE, CHARLES O. MCDONALD,

LARS WESTERBERG, ETHEL O’QUINN, JEFFREY GLOVER, KATRINA GLOVER,

LAURA LIGGETT, BRENDA TRUSSEL, DALE TRUSSELL, CECELIA ROSE,

VANESSA BOURDA, FRANCISCO CAMPOS, CONNIE CAMPOS, SAMMY J.

COLLINS, FELICIA BOWMAN, KENDALL WILKINS, TYRONSA WILKINS,

ANDREW TAYLOR, MARQUE JOHNSON, BEVERLY HENSLEY, YVONNEYA

BROWN, COURTNEY HERNANDEZ, ALBERT ROWAN, TONI OWENS, JIMMY

KIRKENDOLL, JOAN L. KIRKENDOLL, MARY ANN EDJEREN, THELMA

HOUSLEY, KENNETH JOHNSON, JUDITH ANN WALKER, LESLIE BROWN,

DEBORAH EATON, STUART WILLETT, JOSE TORRES, DIANA SALINAS,

ERSKINE VANDERBILT, CAROLINE TUNSEL, CATHY JONES, GAIL UDOSEN,

REGINA FULTON, HECTOR REYES, LUCIO TORRES, JR., ERNESTO LARA,

JACKIE THORNTON, ALFREDO DIMAS, NANCY TAYLOR, REGINALD COLE,

CATHLYN COLE, GERALD SMITH FOR THE ESTATE OF EARNEST D. SMITH,

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FAUCINDA VENCES, THUYVI VINH, MAIDA KHATCHIKIAN, CARL EARL, TROY

KING, DIANA ROMERO, SANDRA PYLE, GARY DIAL, MARIA MENDEZ,

ANTHONY HARRIS, KEENA HARRIS, KATHERINE STEWART, MARY CURRIE,

SIVERAND STERLING, JR., LARRY TANKERSLEY, LESLIE JONES, GONZALO

PENA, JOHN LONG, BEVERLY LONG, TERRY RANDLE, AND FELICIA FRANK,

Appellees

On Appeal from the 55th District Court

Harris County, Texas

Trial Court Case No. 2018-31381

DISSENTING OPINION

Because I believe that the Texas Citizens Participation Act (“TCPA”) requires

dismissal of all claims against Schmidt and Greenbriar—including the plaintiffs’

constitutional claims—I respectfully dissent to the portion of the judgment affirming

the trial court’s order denying dismissal of the constitutional claims.

The Opinion concludes that, as to the plaintiffs’ quiet-title and declaratory-

judgment claims, the TCPA impermissibly shifts the burden of proof by requiring

the plaintiffs to produce prima facie evidence supporting these claims, thereby

denying plaintiffs the protections found in article XVI, section 50(c) of the Texas

Constitution.1 In so holding, the Opinion states that “[b]ecause the homestead liens

are invalid, dismissal of the plaintiffs’ quiet-title and declaratory-relief claims under

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Six types of loans or liens can burden a homestead. See TEX. CONST. XVI, § 50(a)(1-

6).

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the Citizens Participation Act would impair the right guaranteed in article XVI,

section 50 of the Texas Constitution.” (emphasis added).

However, the Opinion assumes, without any showing by plaintiffs, that the

liens at issue are on the plaintiffs’ homesteads. To claim the constitutional

protections afforded to homesteads, a plaintiff carries the initial burden of

establishing (1) overt acts of homestead usage and (2) the intention to claim the

property as a homestead. Zorilla v. Aypco Constr. Co. II, LLC, 469 S.W.3d 143, 159

(Tex. 2015); see also Burk Royalty Co. v. Riley, 475 S.W.2d 566, 568 (Tex. 1972)

(holding initial burden to establish homestead exemption is on party claiming

exemption).

Once a plaintiff has proved homestead status, then the burden shifts to the

defendant to show that it has a constitutionally valid lien on the homestead. Zorilla,

469 S.W.3d at 159; see also TEX. CONST. XVI, § 50(c).2 “If the debtor [proves that

the property constitutes a homestead], then the creditor has the burden to prove that

the debt falls within one of the excepted debts listed in Article XVI, section 50(a).”

Chase Manhattan Mortg. Corp. v. Cook, 141 S.W.3d 709, 713 (Tex. App.—Eastland

2004, no pet.); see also Marincasiu v. Drilling, 441 S.W.3d 551, 559 (Tex. App.—

El Paso 2014, pet. denied) (holding that once property is shown to be homestead,

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“No mortgage, trust deed, or other lien on the homestead shall ever be valid unless

it secures a debt described by this section . . . .” TEX. CONST. art. XVI, §50(c).

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constitutional homestead privilege against unenumerated liens presumed to exist

unless lienholder proves termination of homestead status).

Thus, there is a two-step process to consider: (1) did the plaintiffs prove a

homestead, and, if so, (2) does the defendant have a valid lien under section 50(a)?

By concluding that the liens at issue in this case are void, the Opinion skips to the

second step of the process, thereby impermissibly relieving plaintiffs of their burden

to first prove homestead status.

The Opinion’s reliance on Wood v. HSBC Bank USA, 505 S.W.3d 542 (Tex.

2016) is misplaced. Wood considered the ability to cure a loan that fails to comply

with the requirements imposed by article XVI, section 50(a)(6). Id. at 548–49.

Though “extension of credit” loans do not comply with section 50(a)(6), the supreme

court held that a lender may attempt to cure the defects and thereby render the loan

valid. Id. Consistent with the law holding that a lienholder has the burden to show

that a lien is constitutionally valid, the supreme court held that homestead liens

remain invalid until any defect is cured and that the party asserting a cure has the

burden of proof on that issue. See id. at 549–51.

Thus, Wood involved only the second issue in the two-step process, i.e.,

whether the lien was invalid and who had the burden to show that an invalid had

been cured. Wood does not purport to excuse or relieve the plaintiff of his initial

burden of showing a homestead. Under Zorillo, that burden must be met by the

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plaintiff before a defendant is required to defend the validity of his lien or loan. 469

S.W.3d at 159.

Put more simply, whether a lien is invalid under section 50(a) is irrelevant

unless and until the plaintiff first proves that the subject property is his homestead.

Here, the plaintiffs made no showing of overt acts of homestead usage and the

intention to claim the property as a homestead, as required by Zorilla. See 469

S.W.3d at 159. And, in fact, ABC Bail Bonding Company secured a written

disavowal of homestead status from all its clients.

Because they did not prove homestead status, I would dismiss all the

plaintiffs’ claims, even their constitutional claims. To the extent that the Opinion

does not, I respectfully dissent.

Sherry Radack

Chief Justice

Panel consists of Chief Justice Radack and Justices Goodman and Countiss.

Radack, C.J., dissenting in part from the judgment.

Countiss, J., dissenting in part and concurring in judgment only in part.

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