No CV IN THE FIFTH DISTRICT COURT OF APPEALS AT DALLAS, TEXAS. WADE RINER, Appellant. GAYLON RAY NEUMANN, Appellee/Cross-Appellant

Transcription

1 No CV IN THE FIFTH DISTRICT COURT OF APPEALS AT DALLAS, TEXAS WADE RINER, Appellant v. GAYLON RAY NEUMANN, Appellee/Cross-Appellant v. NOVASTAR MORTGAGE, INC., Cross-Appellee Appealed from the 162nd Judicial District Court of Dallas County, Texas APPELLANT S BRIEF JEFFREY R. SECKEL State Bar No McGuire Craddock & Strother, P.C N. Harwood Street, Suite 1800 Dallas, TX Phone: Fax: jseckel@mcslaw.com ATTORNEYS FOR APPELLANT: WADE RINER

2 IDENTITY OF PARTIES AND COUNSEL Appellant: Wade Riner PARTY COUNSEL Jeffrey R. Seckel State Bar No McGuire Craddock & Strother, P.C N. Harwood Street, Suite 1800 Dallas, TX Phone: Fax: i- Appellee/Cross- Appellant: Gaylon Ray Neumann John W. Reeder State Bar No Attorney at Law 555 Republic Drive, Suite 200 Plano, TX Phone: Fax: Cross-Appellee: Novastar Mortgage, Inc. Dawn Whalen Theiss State Bar No: J. David Brown State Bar No.: Winstead PC 1201 Elm Street, Suite 5400 Dallas, TX Phone: Fax:

3 TABLE OF CONTENTS Page I. STATEMENT OF THE CASE...1 II. ISSUES PRESENTED...2, 3 1. WHETHER A FACT ISSUE EXISTS AS TO THE STATUS OF THE LIEN THROUGH WHICH APPELLEE NEUMANN CLAIMS TITLE TO THE PROPERTY IN QUESTION. 2. WHETHER THE TRIAL COURT PROPERLY DETERMINED THAT THE HOMEOWNER S ASSESSMENT LIEN PURSUANT TO WHICH APPELLANT RINER S TITLE WAS INFERIOR TO THE HOMEOWNER S EQUITY LIEN GIVING RISE TO APPELLEE NEUMANN S CLAIM OF TITLE. 3. WHETHER A FACT ISSUE EXISTED AS TO THE AMOUNT OF DAMAGES ALLEGEDLY INCURRED BY APPELLEE NEUMANN BY VIRTUE OF APPELLANT RINER S CLAIM OF OCCUPANCY OF THE PROPERTY. III. IV. STATEMENT OF FACTS...3 SUMMARY OF THE ARGUMENT...5 V. ARGUMENT CITATION OF AUTHORITY A. ISSUE ONE: WHETHER A FACT ISSUE EXISTS AS TO THE STATUS OF THE LIEN THROUGH WHICH APPELLEE NEUMANN CLAIMS TITLE TO THE PROPERTY IN QUESTION B. ISSUE TWO: WHETHER THE TRIAL COURT PROPERLY DETERMINED THAT THE HOMEOWNER S ASSESSMENT LIEN PURSUANT TO WHICH APPELLANT RINER S TITLE WAS INFERIOR TO THE HOMEOWNER S EQUITY LIEN GIVING RISE TO APPELLEE NEUMANN S CLAIM OF TITLE (a) Equitable Subrogation Is Not Applicable ii-

4 C. ISSUE THREE: WHETHER A FACT ISSUE EXISTED AS TO THE AMOUNT OF DAMAGES ALLEGEDLY INCURRED BY APPELLEE NEUMANN BY VIRTUE OF APPELLANT RINER S CLAIM OF OCCUPANCY OF THE PROPERTY VI. PRAYER CERTIFICATE OF SERVICE iii-

5 INDEX OF AUTHORITIES CASES: Page(s) Casstevens v. Smith, 269 S.W.3d 222 (Tex.App. Texarkana 2008) , 15 Frymire Engineering Co., Inc. v. Jomar Int l, Ltd., 259 S.W.3d 140 (Tex. 2008) Lucky Homes, Inc. v. Tarrant Savings Association, 379 S.W.2d 386 (Tex.Civ.App. Fort Worth 1964) Starcrest Trust v. Berry, 926 S.W.2d 343 (Tex.App. Austin 1996, no writ) Wicker v. Texas Bank of Garland, N.A., 1995 WL (Tex.App. Dallas 1995, no writ) STATUTES AND RULES: TEXAS RULES OF CIVIL PROCEDURE: Rule 166a(c)...6, 17, 18 Rule 166a(f)...6, 18 Rules Rule Rule , 5, 7 TEXAS PROPERTY CODE: , (a) (a)(1) (c) , 11, (b) (b)(3) (c)....8 T EXAS CONSTITUTION: Section 50(a)(6), Article XVI iv-

6 No CV IN THE FIFTH DISTRICT COURT OF APPEALS AT DALLAS, TEXAS WADE RINER, Appellant v. GAYLON RAY NEUMANN, Appellee/Cross-Appellant v. NOVASTAR MORTGAGE, INC., Cross-Appellee Appealed from the 162nd Judicial District Court of Dallas County, Texas APPELLANT S BRIEF TO THE HONORABLE COURT: COMES NOW, Appellant Wade Riner and files this, Appellant s Brief and, for such, would respectfully show the Court as follows: APPELLANT S BRIEF Page 1

7 I. STATEMENT OF THE CASE The instant suit involves a trespass to try title action brought by Appellee Gaylon Ray Neumann ( Neumann ), who purports to claim title to the property pursuant to a non-judicial foreclosure sale held on August 1, (ApdxTab1:A0002: CR:0013) Appellant Wade Riner ( Riner ) acquired title to the property through an earlier non-judicial foreclosure of a homeowner s assessment lien. (ApdxTab3:A0168-A0170: CR: ) This appeal arises from the trial court improperly granting Appellee s Motion for Summary Judgment on or about March 22, (ApdxTab9:A0373-A0375: CR: ) Pursuant to the trial court s Amended Final Summary Judgment, Appellee Neumann was awarded title and possession to the property in question, as well as damages in the amount of $7,750.00, plus damages. (ApdxTab10:A0374: CR:0586) The trial court erred by granting Neumann summary judgment by declaring that the Novastar home equity lien through which he derived title was superior to the homeowner s assessment lien through which Riner s title derives. II. ISSUES PRESENTED 1. WHETHER A FACT ISSUE EXISTS AS TO THE STATUS OF THE LIEN THROUGH WHICH APPELLEE NEUMANN CLAIMS TITLE TO THE PROPERTY IN QUESTION. APPELLANT S BRIEF Page 2

8 2. WHETHER THE TRIAL COURT PROPERLY DETERMINED THAT THE HOMEOWNER S ASSESSMENT LIEN PURSUANT TO WHICH APPELLANT RINER S CLAIMED TITLE WAS INFERIOR TO THE HOME EQUITY LIEN GIVING RISE TO APPELLEE NEUMANN S CLAIM OF TITLE. 3. WHETHER A FACT ISSUE EXISTED AS TO THE AMOUNT OF DAMAGES ALLEGEDLY INCURRED BY APPELLEE NEUMANN BY VIRTUE OF APPELLANT RINER S CLAIM OF OCCUPANCY OF THE PROPERTY. III. STATEMENT OF FACTS 1. On or about October 12, 2006, Appellee Neumann brought a trespass to try title suit against Appellant Riner. (ApdxTab1:A0001-A0041: CR: ) Thereafter, in connection with such suit, and pursuant to Rule 798 of the TEXAS RULES OF CIVIL PROCEDURE, Appellee filed a document which he entitled Proof of Superior Common Source of Title dated January 30, (ApdxTab3:A0047- A0176: CR: ) On the strength of the record set forth in the Proof of Superior Common Source of Title, Appellee Neumann moved for summary judgment asserting he obtained title to the property by virtue of an alleged nonjudicial foreclosure sale conducted by Novastar Mortgage, Inc. ( Novastar ), and that the title obtained as a result of that sale was superior to Appellant s title. (ApdxTab4:A0193-A0195: CR: ) The Novastar lien, on its face, was not capable of non-judicial foreclosure. (ApdxTab6:A0227: CR:0327) APPELLANT S BRIEF Page 3

9 2. Appellee Neumann acknowledges that prior to the alleged August 1, 2006 foreclosure sale, Appellant Riner was the owner of the property by virtue of his purchase of the property at the foreclosure of a homeowner s assessment lien. (ApdxTab1:A0002: CR:0013) In fact, the Assessment Lien Deed is contained in the Proof of Superior Common Source of Title and establishes Appellant Riner as the record title holder. (ApdxTab3:A0168-A0170: CR: ) Appellee s Abstract further establishes that Appellant s Deed was recorded on June 19, 2006, nearly six (6) months before the alleged Novastar sale. (ApdxTab3:A0169: CR:0179) 3. As is set forth in Plaintiff s Petition (ApdxTab1:A0001-A0041: CR: ), Appellee claimed to be the owner of the Appellant s property by virtue of a Substitute Trustee s Deed executed in connection with a foreclosure sale allegedly conducted on August 1, (ApdxTab1:A0002: CR:0013; ApdxTab3:A0172- A0176: CR: ) There is nothing in the Record demonstrating that the sale was conducted pursuant to judicial mandate as required by the expressed terms of the Novastar lien. Appellee s so-called Proof of Superior Common Source of Title according to Appellee s own admission sets forth the chain of conveyances from that common source of title. (ApdxTab3:A0048-A0050: CR: ) While the Appellee s chain of conveyances contains the Substitute Trustee Deed pursuant to which he claims title (ApdxTab3:A0172-A0176: CR: ), it does not contain any instrument creating a lien in favor of Novastar or otherwise granting the APPELLANT S BRIEF Page 4

10 Substitute Trustee any interest in the property or the power to sell the property absent court order. IV. SUMMARY OF THE ARGUMENT 4. Appellee claims title by virtue of a Substitute Trustee s Deed in connection with the non-judicial foreclosure of a lien allegedly held by Novastar. Accordingly, the Appellee s ability to establish title is dependent upon Appellee establishing, at a minimum, that Novastar had an existing, recorded lien when Appellant acquired title. Appellee invoked Rule 798 of the TEXAS RULES OF CIVIL PROCEDURE by filing all of the relevant documents affecting the parties title to the property in question. Yet, none of the documents contained within Appellee s title documents reflect a lien in favor of Novastar. Accordingly, as a matter of law, Appellee failed to establish that he has valid title to the property, much less title that is superior to Appellant s title. 5. Even if Appellee s Rule 798 filing had contained evidence of the alleged Novastar lien, Novastar s lien was inferior to the homeowner s association lien through which Riner obtained title. It is important to remember that Novastar made a home equity loan and obtained a home equity lien. The expressed language of the Condominium Declarations at issue provides that the homeowner s association lien is superior to all liens other than vendor s liens, purchase money liens or deeds of trust. Novastar s Home Equity Security Instrument is none of these things. In APPELLANT S BRIEF Page 5

11 fact, Paragraph 21 of Novastar Texas Home Equity Security Interest specifically provided that it could only be foreclosed upon by a court order. (ApdxTab6:A0227: CR:0327) The requirement of court intervention precludes the Novastar lien from being a deed of trust as asserted by Neumann. Accordingly, Novastar s home equity lien was not superior to the homeowner s association lien pursuant to which Riner obtained title. As a result, Riner is the rightful owner of the property. 6. Even if the Appellee had established valid title to the property, a fact issue existed with respect to the damages being claimed by Appellee. The only evidence submitted by Appellee with respect to his claimed damages was a conclusory, self-serving statement made by the Appellee regarding his opinions of the fair market value of the property. Such purported testimony of the Appellee failed to comply with Rule 166a(c) and Rule 166a(f) of the TEXAS RULES OF CIVIL PROCEDURE. V. ARGUMENT CITATION OF AUTHORITY A. ISSUE ONE: WHETHER A FACT ISSUE EXISTS AS TO THE STATUS OF THE LIEN THROUGH WHICH APPELLEE NEUMANN CLAIMS TITLE TO THE PROPERTY IN QUESTION. 7. In order for Appellee Neumann to establish, as a matter of law, that his alleged title is superior to the title held by Appellant Riner, it is necessary for Neumann to establish both the existence of a Novastar lien and that such lien APPELLANT S BRIEF Page 6

12 survived the foreclosure of the homeowner s association assessment lien. However, Appellant failed to submit any competent evidence of the Novastar lien. 8. Rules of the TEXAS RULES OF CIVIL PROCEDURE govern trespass to try title actions such as the one at bar. T.R.C.P. 794 instructs that in all cases the documentary evidence of title at the trial shall be confined to the matters contained in the abstract of title. Pursuant to Rule 798, Appellee Neumann filed all of the documents relevant to the title issues at bar. (ApdxTab3:A0047-A0176: CR: ) Such title documents, however, do not reflect a lien in favor of Novastar, much less one that survived the foreclosure of the homeowner s association assessment lien. (ApdxTab3:A0047-A0176: CR: ) The only document which even mentions the alleged Novastar lien is the Substitute Trustee s Deed dated August 1, (ApdxTab3:A00172-A0176: CR: ) Such Substitute Trustee s Deed merely recites Novastar s apparent claim of a lien. It does not establish a valid, perfected lien in favor of Novastar, much less a lien superior to the lien through which Appellee obtained title. 9. Appellee now seeks to go outside his filed title documents to prove the Novastar lien. This is precluded by Rule 794. Accordingly, as a matter of law, Appellee failed to establish any claim to title, much less a claim superior to that of Appellant. As a result, the trial court s declaration that the alleged Novastar lien was superior to the homeowner s assessment lien is, as a matter of law, erroneous. At APPELLANT S BRIEF Page 7

13 a minimum, the fact that Appellee s own title abstract fails to reflect a lien in favor of Novastar creates a fact issue which precluded summary judgment. B. ISSUE TWO: WHETHER THE TRIAL COURT PROPERLY DETERMINED THAT THE HOMEOWNER S ASSESSMENT LIEN PURSUANT TO WHICH APPELLANT RINER S TITLE WAS INFERIOR TO THE HOMEOWNER S EQUITY LIEN GIVING RISE TO APPELLEE NEUMANN S CLAIM OF TITLE. 10. Even assuming that Appellee Neumann can point to some evidence establishing a valid, perfected lien in favor of Novastar, such lien would, nonetheless, be inferior to the homeowner s assessment lien through which Appellant Riner obtained title. 11. Section (c) of the TEXAS PROPERTY CODE provides that a homeowner association s lien such as the one which gives rise to Defendant Riner s title is created by recordation of the declaration, which constitutes record notice and perfection of the lien. Unless the declaration provides otherwise, no other recordation of a lien or notice of a lien is required. The summary judgment evidence conclusively establishes the homeowner s association lien supporting Defendant s Riner s title was perfected when the condominium association was created. (ApdxTab6:A0298-A0299: CR: ) 12. In the Supplement to its Motion for Summary Judgment, Appellee Neumann attempted to adopt the argument advanced by Novastar in its Motion for APPELLANT S BRIEF Page 8

14 Summary Judgment ( Novastar Motion ). At page 5 of Novastar s Motion, Novastar states: The Official Public Records for Dallas County indicate that the Declaration of Condominium for The Cedars is recorded at Vol , Page Section 5.8 thereof, entitled Lien for Assessments of such instrument... provides that the lien for assessment shall constitute a lien on such Unit superior prior to all other liens and encumbrances, except only for: (1) [taxes and special assessments imposed by governmental authorities]; and (2) all liens securing sums due or to become due under any prior recorded purchase money mortgage, vendor s lien or deed of trust. (ApdxTab11:A0380: CR:0224) Such statement constituted a judicial admission regarding the lien priorities at issue in this case. Accordingly, for Neumann to prevail, Appellee must establish that his title derives from either a prior recorded 1 purchase money mortgage, vendor s lien or a deed of trust. 13. With the aforesaid judicially admitted facts in mind, it is apparent that the Appellee s alleged title is inferior to that of Appellant Riner. In this regard, the Declaration of Condominium specifically makes the lien for assessment superior to all non-governmental liens except any prior recorded purchase money mortgage, vendor s lien or deed of trust. There is no evidence establishing that the Novastar Home Equity Security Instrument was filed before the creation of The Cedars I, Ltd. 1 As will be discussed later, Novastar was not given a deed of trust. Novastar held a home equity lien. APPELLANT S BRIEF Page 9

15 Declaration of Condominium, or that it constitutes a deed of trust as Appellee baldly claims. In fact, the evidence relied on by Neumann shows just the opposite. 14. While Appellee Neumann apparently asserts that the alleged Novastar home equity lien is somehow superior to the homeowner s assessment lien, Appellee cannot cite any law to this effect. Instead, at the trial court, Appellee sought to rely upon the 1994 version of Section of the TEXAS PROPERTY CODE which governs post-1994 Declaration of Condominium. 15. In 1994, the TEXAS PROPERTY CODE was overhauled, and Section (b) was revised to provide that an association s liens for assessments has priority over all other liens with the exception of tax liens, prior recorded liens and encumbrances, and a first vendor s lien or first deed of trust lien recorded before the date on which the assessment sought to be enforced becomes delinquent under the declaration, bylaws or rules. Appellee Neumann apparently asserts that pursuant to Section (b)(3), the alleged Novastar lien constitutes a first deed of trust lien recorded before the date on which the assessment sought to enforce becomes delinquent. However, in making this argument, Appellee wholly ignores Section , as well as the fact that there is no evidence establishing the date such deed of trust was recorded. 16. Section of the TEXAS PROPERTY CODE expressly states that Chapter 82 only applies to condominiums in this state for which the declaration is recorded on or after January 1, In order for a pre-january 1, 1994 APPELLANT S BRIEF Page 10

16 condominium association to be governed by Chapter 82, Section (a)(1) requires the owners of the units to vote to amend the declaration, or that the pre declaration specifically states that the condominium is governed by Chapter 82. There is no evidence that either of these things took place. 17. Appellee Neumann claims that despite the fact that Section (a) specifically states that it does not apply to pre-1994 condominiums such as The Cedars, Section (c) states that certain sections will be applicable to pre-1994 condominiums. In noting this fact, Appellee ignores the remaining portion of Section (c). Section (c) concludes by decreeing that nothing in the applicable sections, including Section , invalidate existing provisions of the declaration, bylaws, or plats or plans of a condominium for which the declaration was recorded before January 1, Accordingly, from the plain language of Section (c), Section can only be interpreted to provide a priority scheme for association liens where the condominium declaration is silent as to the assessment lien priority. Section expressly states that Section does not invalidate any provision in the condominium declaration. 18. As is noted in the judicial admissions set forth above, the condominium declarations in the instant matter stated that the assessment lien was superior prior to all other liens and encumbrances, except only for: (1) [taxes and special assessments imposed by governmental authorities]; and (2) all liens securing sums due or to become due under any prior recorded purchase money mortgage, APPELLANT S BRIEF Page 11

17 vendor s lien or deed of trust. (ApdxTab11:A0380: CR:0224; emphasis added) Novastar s alleged lien s genesis did not come into being until long after Accordingly, Novastar s lien was not a prior recorded lien. 19. In an attempt to confuse the trial court as to the true priority of the assessment lien, Appellee Neumann asserted that Jose Reyes Lopez did not default upon his homeowner s assessment until sometime after the Novastar lien was recorded. While the date of the Lopez delinquency might be important if Section governed, it is a red herring here. Inasmuch as The Cedars I s pre-1994 condominium declaration contains a priority scheme, Section cannot be read to invalidate such priority scheme. Simply put, pursuant to the terms of the condominium declaration at issue, the assessment lien has priority, regardless of the date in which the assessment became delinquent. Such lien is no different that any other line of credit lien. The priority date for such lien is the date in which the lien is created, regardless of the date on which funds are actually advanced. 20. Regardless of the timing of the creations of the respected liens, there can be no doubt that the homeowner s association assessment lien is superior to the Novastar Home Equity Security Instrument. In this regard, the condominium regime specifically states that the homeowner s association assessment will be superior to all liens other than purchase money mortgages, vendor s liens or deeds of trust. Because of this, Appellee Neumann seeks to characterize Novastar s Home Equity Security Instrument as a deed of trust. However, a careful examination of the APPELLANT S BRIEF Page 12

18 Novastar Home Equity Security Instrument reveals that it is merely a mortgage, not a deed a trust. 21. A deed of trust is in essence a mortgage with a power to sell on default. Starcrest Trust v. Berry, 926 S.W.2d 343, 351 (Tex.App. Austin 1996, no writ). A deed of trust involves the granting of a lien along with the simultaneous execution of a deed of trust so that the trustee may foreclose upon the collateral without the necessity of judicial intervention. Lucky Homes, Inc. v. Tarrant Savings Assoc., 379 S.W.2d 386, 388 (Tex.Civ.App. Fort Worth 1964), judgment rev d other grounds, 390 S.W.2d 473 (1965); see also Wicker v. Texas Bank of Garland N.A., 1995 WL , *3 (Tex.App. Dallas 1995, no writ) (citing Lucky Homes). 22. Unlike deeds of trust, the Novastar Home Equity Security Instrument did not permit Novastar to non-judicially foreclose. Instead, the Novastar lien specifically provided that Novastar s lien could be foreclosed upon only by a court order. (ApdxTab6:A0227: CR:0327) Novastar was granted the right to:... follow any rules of civil procedure promulgated by the Texas Supreme Court for expedited foreclosure proceedings related to the foreclosure of liens under Section 50(a)(6), Article XVI of the Texas Constitution ( Rules ), as amended from time to time which are hereby incorporated by reference. The power of sale granted herein shall be exercised pursuant to such Rules, and Borrower understands that such power of sale is not a confession of judgment or a power of attorney to confess judgment or to appear for Borrower in a judicial proceeding. (ApdxTab6:A0227: CR:0327) In other words, unlike a deed of trust, no interest in the property could be transferred without judicial intervention. While Novastar may APPELLANT S BRIEF Page 13

19 have held a lien against the property, it did not possess a deed of trust and, therefore, its lien could not be superior to the homeowner s association lien. Novastar s lien was not a purchase money lien, a vendor s lien or a deed of trust. As such, the trial court erred in ruling that Appellee Neumann acquired any title by virtue of the Novastar conveyance. (a) Equitable Subrogation Is Not Applicable 23. Appellee Neumann attempts to assert that the lien allegedly given to Novastar in connection with its home equity loan relates back to the date of some undisclosed prior lien. In this regard, Novastar s Motion asserts that its home equity lien provides at Paragraph 24 that Novastar is subrogated to all prior liens and superior equities against the Property, which includes the purchase money mortgage paid off with Novastar s loan. (ApdxTab11:A0381: CR:0225) However, equitable subrogation is not available in the instant matter because equitable subrogation is only available when the debtor was unjustly enriched. Casstevens v. Smith, 269 S.W.3d 222, 228 (Tex.App. Texarkana 2008). Here, there is no unjust enrichment of Novastar s debtor. Instead, the instant matter involves a competition between two purchasers at differing foreclosure sales. Under such circumstances, unjust enrichment will not lie. Id. Moreover, both purchasers are charged with knowledge of the title documents. At the time that Appellee Neumann allegedly purchased the property at the Novastar foreclosure sale, the title records reflected the existence of the deed from the homeowner s association to Appellant Riner. (ApdxTab3:A0168- APPELLANT S BRIEF Page 14

20 A0170: CR: ) Simply put, Neumann did not involuntarily pay the debt of another as required to invoke the doctrine of equitable subrogation. Frymire Engineering Co., Inc. v. Jomar Int l, Ltd., 259 S.W.3d 140 (Tex. 2008). Accordingly, there is no inequitable conduct on behalf of Appellant Riner which would entitle Neumann to invoke the doctrine of unjust enrichment. 24. Moreover, even if the law would permit a home equity lender to be subrogated to a purchase money lender under appropriate circumstances, the instant matter would not support such subrogation. The lien to which Novastar allegedly claims to be equitably subrogated was released on March 10, The purpose of recording liens, releases of liens, and various titles is to enable a prospective purchaser to determine the title s status. Had Novastar truly desired to preserve the predecessor s purchase money lien, Novastar could have bargained for this right and prevented the release of lien from being filed. However, in light of the fact that the predecessor s lien was released on March 10, 2004, equity will not permit Novastar to claim rights to its alleged predecessor s lien position in order to defeat Riner s title. See Casstevens at Moreover, inasmuch as Appellant is not the debtor, equitable subrogation is not applicable. Equitable subrogation is only appropriate to prevent the debtor from being unjustly enriched. Here, the Appellant is a third party purchaser. As such, he is entitled to rely on the title records. Since the lien to which Novastar seeks to be subrogated was no longer reflected in the title records, APPELLANT S BRIEF Page 15

21 Novastar cannot be equitably subrogated to such lien so as to defeat Appellant s title. 26. Further support for the Appellant s position in this case can be found by considering the judicial admissions contained in the Motion for Summary Judgment which was filed by Appellee Neumann. In Section IX of his Motion for Summary Judgment, Neumann judicially admitted that Novastar s deed of trust lien was no longer valid against the property at the time of the non-judicial foreclosure on August 1, (ApdxTab4:A0186: CR:0196) Because of this judicial admission, even if Neumann had been able to establish that the Novastar lien existed at one time, such admission establishes that it was not valid at the time of the alleged foreclosure sale. As a result, a fact issue existed which precluded summary judgment. C. ISSUE THREE: WHETHER A FACT ISSUE EXISTED AS TO THE AMOUNT OF DAMAGES ALLEGEDLY INCURRED BY APPELLEE NEUMANN BY VIRTUE OF APPELLANT RINER S CLAIM OF OCCUPANCY OF THE PROPERTY. 27. Even if Appellee Neumann had established a superior title, fact issues still remain with respect to the damages being claimed by Appellee. In the instant matter, the only evidence of damages offered by Appellee was his own Affidavit testimony. In the Appellee s Affidavit, he claimed: The fair market rental value of the Property is $ per month based upon my experience of both owning and leasing out other units within this condominium regime. (ApdxTab4:A0194: CR:0204) When Appellant attacked the aforesaid conclusory testimony APPELLANT S BRIEF Page 16

22 (ApdxTab8:A0366-A0369: CR: ), Appellee filed a Second Supplement to its Motion for Summary Judgment, whereby Appellee Neumann s Affidavit was marginally expanded. Appellee s new Affidavit provided the following additional testimony: I currently manage three other units in the same condominium regime as the Property. I am responsible for the leasing of those three units. I have been involved in the management and rental of units in the same condominium regime as the Property since at the latest I am very familiar with the fair market rental value of units similar to the Property. (ApdxTab6:A0248: CR:0348) Noticeably absent from Appellee Neumann s Affidavit is any description of the leases of which Appellee claims to have knowledge. Appellee s Affidavit does not describe the size of the units, nor does it compare such units to the unit at issue in the instant lawsuit. Appellee does not provide any monthly rental information or lease term information, nor does he disclose the expenses associated with leasing and maintaining any of the aforesaid units. In short, Appellee only provided the trial court with a conclusory statement regarding the fair rental value of the unit in question. Appellee provided no information upon which such opinion could be tested. 28. Rule 166a(c) of the TEXAS RULES OF CIVIL PROCEDURE provides that a summary judgment may only be based on uncontroverted testimonial evidence of an interested witness, or of an expert witness as to subject matter concerning which the trier of fact must be guided solely by the opinion testimony of experts, if the APPELLANT S BRIEF Page 17

23 evidence is clear, positive and direct, otherwise credible and free from contradictions and inconsistencies, and could have been readily controverted. Rule 166a(f) further provides that such Affidavits must set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. 29. In the instant matter, Appellee s attempt to offer expert testimony as to the reasonable rental value fails to meet the standards required under Rule 166a(c) and Rule 166a(f). Such testimony is not clear, positive and direct nor does it set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. At best, Appellee s Affidavit merely establishes that the Appellee may have some information relating to the price he has achieved with respect to certain unknown units within the same condominium complex. However, there is no evidence establishing what rental rate Appellee obtained on his comparison units. Similarly, while Appellee claims to have some knowledge with respect to three other units within the same condominium regime, there is no evidence reflecting what percentage of the total units that the three units comprise. Additionally, Appellee failed to offer any evidence as the material term of any of the leases of which Appellee claims to be familiar. Finally, Appellee s Affidavit is completely devoid of any information regarding what expenses and/or costs are involved in maintaining and/or leasing the property, including a reasonable marketing. Accordingly, APPELLANT S BRIEF Page 18

24 Appellee s conclusory statements do not establish his damages as a matter of law. Once again, a fact issue existed. VI. PRAYER WHEREFORE, PREMISES CONSIDERED, Appellant Wade Riner respectfully requests: 1. that the Court take notice of his Appellant s Brief; 2. that the Court reverse the trial court s summary judgment and remand the case back to the trial court for a new trial; and 3. that Appellant Wade Riner be granted such other and further relief, including costs, to which he may show himself justly or equitably entitled. Respectfully submitted, /s/ Jeffrey R. Seckel ( ) JEFFREY R. SECKEL State Bar No McGuire Craddock & Strother, P.C N. Harwood Street, Suite 1800 Dallas, TX Phone: Fax: jseckel@mcslaw.com ATTORNEYS FOR APPELLANT APPELLANT S BRIEF Page 19

25 CERTIFICATE OF SERVICE This is to certify that a true and correct copy of the foregoing document was forwarded via electronic and/or certified mail, return receipt requested, to the following counsel of record on this, the 7th day of October, 2010: ATTORNEYS FOR APPELLEE/CROSS-APPELLANT NEUMANN: John W. Reeder 555 Republic Drive, Suite 200 Plano, TX ATTORNEYS FOR CROSS-APPELLEE NOVASTAR: Dawn Whalen Theiss // James David Brown Winstead PC 1201 Elm Street, Suite 1201 Dallas, TX /s/ Jeffrey R. Seckel ( ) JEFFREY R. SECKEL APPELLANT S BRIEF Page 20