Christy Onabajo and Femi Onabajo v. Household Finance Corp. III

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-15-00251-CV

Christy Onabajo and Femi Onabajo, Appellants

v.

Household Finance Corp. III, Appellee

FROM THE COUNTY COURT AT LAW NO. 1 OF TRAVIS COUNTY,
NO. C-1-CV-14-010888, HONORABLE TODD T. WONG, JUDGE PRESIDING

MEMORANDUM OPINION

Appellants Christy Onabajo and Femi Onabajo appeal from the trial court’s judgment

in a forcible-detainer suit awarding possession of certain residential real property to Household

Finance Corporation III. See Tex. Prop. Code §§ 24.001-.011. Because the record does not contain

sufficient evidence that Household Finance provided notice to the Onabajos in compliance with

Texas Property Code section 24.005, we will reverse the trial court’s judgment of possession and

render judgment in favor of the Onabajos.

BACKGROUND

In 2001, the Onabajos entered into a Texas Home Equity Adjustable Rate Note payable

to Home Capital, Inc. As part of the transaction, the Onabajos also executed a Texas Home Equity

Security Instrument, granting a first lien on the property. The security instrument provided that:
 If the Property is sold pursuant to this paragraph [setting forth foreclosure procedure],
Borrower or any person holding possession of the Property through Borrower shall
immediately surrender possession of the Property to the purchaser at the sale. If
possession is not surrendered, Borrower or such person shall be a tenant at sufferance
and may be removed by writ of possession.

After the Onabajos defaulted on the loan and failed to cure the default, Household Finance, as

purported successor and assign, filed an application for judicial foreclosure in the district court in

Travis County. See Tex. R. Civ. P. 736. On April 3, 2012, the property was sold to Household

Finance at a foreclosure sale by a substitute trustee, and Household Finance received a substitute

trustee’s deed memorializing the conveyance. Household Finance then sent written notice to the

Onabajos informing them of the foreclosure sale and instructing them to vacate the property “within

three(3) days after delivery of this letter.” The notice also informed the Onabajos that if they failed

to vacate, Household Finance would file a forcible-detainer action.

On October 17, 2014, after the Onabajos refused to vacate the property, Household

Finance brought a forcible-detainer action in justice court. See R. 510. The justice court granted

possession of the property to Household Finance, and the Onabajos appealed the justice court’s

decision to the county court at law. See id. R. 506.3. At the de novo bench trial in county court,

Household Finance introduced copies of (1) the Texas Home Equity Security Instrument; (2) the

substitute trustee’s deed conveying the property to Household Finance; (3) the Notice to Vacate

Premises; and (4) a business-records affidavit provided by the custodian of records for Household

Finance’s legal counsel. At the conclusion of the trial, the trial court rendered a final judgment

granting possession of the property to Household Finance. This appeal followed.

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 DISCUSSION

The forcible-detainer action was created by the Legislature as a speedy, simple, and

inexpensive procedure for obtaining immediate possession of property when there is no unlawful

entry. Williams v. Bank of N.Y. Mellon, 315 S.W.3d 925, 926 (Tex. App.—Dallas 2010, no pet.);

see Tex. Prop. Code § 24.002. To prevail in the action, “a plaintiff is not required to prove title,

but is only required to show sufficient evidence of ownership to demonstrate a superior right to

immediate possession.” Rice v. Pinney, 51 S.W.3d 705, 709 (Tex. App.—Dallas 2001, no pet.); see

Tex. R. Civ. P. 510.3(e) (“The court must adjudicate the right to actual possession [in eviction cases]

and not title.”). The statutory remedy of forcible detainer will lie when a person in possession of

real property refuses to surrender possession on demand if the person is a tenant at will or by

sufferance. Tex. Prop. Code § 24.002(a). To establish forcible detainer, Household Finance had to

prove that (1) it is the owner of the property, (2) the Onabajos are tenants at will or by sufferance,

(3) Household Finance has made written demand for possession of the property in accordance with

section 24.005 of the Texas Property Code, and (4) the Onabajos have refused to surrender

possession. See id. §§ 24.002, .005.

Jurisdiction

In their first issue on appeal, the Onabajos assert that the foreclosure was improper

because the only entity entitled to enforce the Note and to foreclose on the property was an entity

identified in the Note as the lender’s assignee, Provident Bank. As a result, according to the

Onabajos,“the evidence introduced in the lower courts shows a failure to connect the dots” from the

lender to Household Finance and “deprives the lower court of jurisdiction because the documents

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inherently create a title dispute.” Because this jurisdictional challenge represents a threshold issue

in this appeal, we will consider this issue first.

Jurisdiction over a forcible-detainer suit is expressly given to the justice court of the

precinct where the property is located and, on appeal, to the county court for a trial de novo. Id.

§ 24.004; Tex. R. Civ. P. 510.10(c). Neither the justice court nor the county court on appeal has

jurisdiction to resolve issues of title to real property in a forcible-detainer suit. Dormady v. Dinero

Land & Cattle Co., L.C., 61 S.W.3d 555, 557 (Tex. App.—Dallas 2001, pet. dism’d w.o.j.). Instead,

challenges to title or to the foreclosure process must be pursued, if at all, in a separate suit.

Schlichting v. Lehman Bros. Bank FSB, 346 S.W.3d 196, 199 (Tex. App.—Dallas 2011, pet. dism’d).

If the question of title is intertwined with the issue of possession, then the issue of possession may

not be adjudicated without first determining title. Dormady, 61 S.W.3d at 557. In such a case, until

the issue of title is resolved, neither the justice court nor the county court has jurisdiction to enter

a judgment in the suit for forcible detainer. Id.

Defects in the foreclosure process cannot be used either to negate a landlord-tenant

relationship provision in a deed of trust or to raise a question of title depriving the justice or county

courts of jurisdiction to resolve the question of immediate possession. See Wilder v. Citicorp Trust

Bank, F.S.B., No. 03-13-00324-CV, 2014 WL 1207979, at *2 (Tex. App.—Austin Mar. 18, 2014, pet.

dism’d w.o.j.) (mem. op.) (citing cases); Jaimes v. Federal Nat’l Mortg. Ass’n, No. 03-13-00290-CV,

2013 WL 780974, at *3-4 (Tex. App.—Austin Dec. 4, 2013, no pet.) (mem. op.); see also Campbell

v. Wells Fargo Bank, N.A., No. 03-12-00007-CV, 2013 WL 6805590, at *2-3 (Tex. App.—Austin

Dec. 20, 2013, no pet.) (mem. op.) (explaining that it was not necessary to resolve title dispute to

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determine right to immediate possession because deed of trust created landlord and tenant-at-

sufferance relationship). The Onabajos’ assertion that Household Finance failed to sufficiently

“connect the dots” in the chain of title leading to its purchase of the property at foreclosure is an

attack on the validity of the foreclosure that cannot be adjudicated in a forcible-detainer action. See

Jaimes, 2013 WL 7809741, at *4 (concluding that argument that party seeking forcible detainer failed

to “connect[] the dots” in its chain of title did not deprive justice or county courts of jurisdiction);

Stephens v. Federal Home Loan Mortg. Corp., No. 02-10-00251-CV, 2011 WL 1532384, at *2

(Tex. App.—Fort Worth Apr. 21, 2011, no pet.) (mem. op.) (holding that Fannie Mae was not

required to “connect the dots” between original lender and mortgage servicer in forcible-detainer

action where tenant-at-sufferance relationship was established under deed of trust). While the

Onabajos may pursue this challenge in a separate suit, it does not deprive the justice court or the

county court of jurisdiction. See Wilder, 2014 WL 1207979, at *2 (rejecting argument that “the

existence of a title dispute arising from issues about the authority and capacity of the parties to

the nonjudicial foreclosure sale” deprived trial court of jurisdiction to decide forcible detainer).

Where, as here, foreclosure under a security instrument creates a landlord and tenant-at-sufferance

relationship, there is an independent basis for the justice court and for the county court to determine

the issue of immediate possession without resolving the issue of title to the property.1 Morris v.

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In support of its assertion that Household Finance failed to establish that it had the right to
foreclose on the property and that, as a result, the county court lacked jurisdiction, the Onabajos rely
on A Plus Investments, Inc. v. Rushton, No. 02-03-00174-CV, 2004 WL 868866 (Tex. App.—Fort
Worth Apr. 22, 2004, no pet.) (mem. op.). In Rushton, after the borrowers defaulted on their home-
equity loan, the lender filed an application for a court order allowing for foreclosure and sale of the
property, as required by the parties’ security instrument and the Texas Constitution. See id. at *6 n.1
(citing Tex. Const. art. XVI, § 50(a)(6)(d)). The court signed an order of foreclosure, and the

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American Home Mortg. Servicing, Inc., 360 S.W.3d 32, 35 (Tex. App.—Houston [1st Dist.] 2011,

no pet.); Schlichting, 346 S.W.3d at 199-200. We overrule the Onabajos’ first issue on appeal.

Notice under section 24.005(a)

In their second issue on appeal, the Onabajos contend that the trial court erred in

awarding possession to Household Finance because it failed to establish that it complied with the

pre-suit notice requirements under section 24.005 of the Texas Property Code.

When, as in this case, a trial court following a bench trial does not issue findings of

fact or conclusions of law, we imply all relevant facts necessary to support the judgment that are

supported by the evidence. Moncrief Oil Int’l, Inc. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex.

2013). Because Household Finance had the burden in the trial court to show that it made a written

demand for possession of the property in accordance with section 24.005 of the Texas Property

Code, we construe the Onabajos’ argument as a challenge to the trial court’s implied finding on

this issue.2 See Briones v. Brazos Bend Villa Apts., 438 S.W.3d 808, 815 (Tex. App.—Houston

foreclosure was subsequently conducted by CitiFinancial, an entity who had not been identified in
the order of foreclosure. Id. at *2-3. The court of appeals concluded that this discrepancy between
the entity holding the right to foreclose under the order of foreclosure and the entity that actually
foreclosed on the property, without evidence in the record to support a link between the two, created
a title issue that deprived the trial court of jurisdiction over the forcible-detainer action. Id. at *5-6.

We conclude that Rushton is distinguishable from the case at hand because the evidence here
shows that the application for order of foreclosure was sought by the foreclosing entity, Household
Finance. Thus, the discrepancy that was the source of the title dispute in Rushton is not present in
this case, and the Onabajos’ reliance on Rushton is misplaced.
2
Household Finance contends that the Onabajos have waived any complaint on appeal that
notice was improper under section 24.005 because they failed to raise the issue in the trial court.
Generally, to preserve a complaint for appellate review, the record must show that the complaint

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[14th Dist.] 2014, no pet.) (explaining that “proper notice is an element of a forcible detainer

action” and that appellant could challenge sufficiency of evidence to support this element for first

time on appeal).

Under section 24.005 “the landlord must give [a tenant at sufferance] at least three

days’ written notice to vacate before the landlord files a forcible detainer suit unless the parties have

contracted for a shorter or longer notice period in a written lease or agreement.” Tex. Prop. Code

§ 24.005(b). The notice to vacate shall be given in person or by mail at the premises in question.

Id. § 24.005(f). Notice by mail may be by regular mail, by registered mail, or by certified mail,

return receipt requested to the premises in question. Id. The notice period is calculated from the day

on which the notice is delivered. Id. § 24.005(g).

At the hearing on its petition before the trial court, Household Finance introduced the

business-records affidavit of Melanie Johnson, an employee and custodian of records for Household

Finance’s legal counsel. Among other things, Johnson averred that “[o]n October 14, 2014, a Notice

to Vacate was forwarded by certified mail, return receipt requested, and regular mail, postage

prepaid to the Onabajos and to all other occupants.” Attached to Johnson’s affidavit was a copy of

the Notice to Vacate Premises, dated October 8, 2014, stating, in part:

was made to the trial court by a timely, request, objection, or motion. See Tex. R. App. P. 33.1(a).
However, complaints regarding the sufficiency of the evidence presented in a bench trial “may be
made for the first time on appeal.” See id. R. 33.1(d); Office of the Att’y Gen. of Tex. v. Burton,
369 S.W.3d 173, 175 (Tex. 2012) (“As a general rule, an appellant must first complain to the trial
court by a timely request, objection, or motion and obtain a ruling as a prerequisite for appellate
review of that complaint, but the general rules does not apply to complaints about the sufficiency of
the evidence in a trial to the court.”).

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 Pursuant to Section 24.001 et seq of the Texas Property Code, notice is hereby given
and demand is hereby made that you vacate the Property within three (3) days after
delivery of this letter.

The letter also informed the Onabajos that a forcible-detainer action would be filed if they failed to

vacate as instructed. Attached to the copy of the Notice was a document purporting to be a printout

of a tracking report from the United States Postal Service, showing that the letter arrived at the

USPS facility in Houston on October 15, 2014, and was delivered in Austin on October 17, 2014.

Household Finance contends that this evidence is sufficient to support the trial court’s

implied finding that notice was proper because, according to Household Finance, it demonstrates that

the Notice was mailed by certified and first class mail and, as a result, “there exists a presumption

that the notice was duly received by the addressee.” See Cliff v. Huggins, 724 S.W.2d 778, 780

(Tex. 1987) (explaining that Texas Rule of Civil Procedure 21a sets up a presumption that when

notice of trial setting is properly addressed and postage prepaid is mailed, that the “notice was duly

received by the addressee”); see Fashakin v. Federal Home Loan Mortg. Corp., No. 14-11-01079-CV,

2013 WL 1316694, at *3 (Tex. App.—Houston [14th Dist.] Apr. 2, 2013, pet. denied) (mem. op.)

(applying presumption of receipt to notice sent by regular mail under section 24.005(a)); but see

Tex. R. Civ. P. 500.3(e) (providing that rules of civil procedure, other than rules 500 through 510,

do not apply in justice court proceedings except under certain conditions). The Onabajos, however,

do not dispute that the evidence establishes that the Notice to Vacate Premises was delivered to and

received by them. Instead, the Onabajos assert that Household Finance failed to establish that the

Onabajos received three days’ notice before Household Finance filed suit for forcible detainer, as

required by the statute. The Onabajos argue that Household Finance’s own evidence presented to

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the trial court establishes that the Notice was not delivered until October 17, 2014, the same day that

Household Finance filed their forcible detainer action in justice court. See Geters v. Baytown Hous.

Auth., 430 S.W.3d 578, 585 (Tex. App.—Houston [14th Dist.] 2014, no pet.) (date of filing in justice

court governs analysis under 24.005(a)). Thus, the Onabajos claim that the evidence conclusively

establishes that Household Finance failed to comply with section 24.005 of the Property Code.

The record before us, viewed in the light most favorable to the judgment, establishes

that (1) Household Finance’s Notice to Vacate Premises was sent to the Onabajos by certified mail

and first class regular mail on October 14, 2014; (2) the Notice by certified mail was delivered to

the Onabajos on October 17, 2014; and (3) Household Finance filed suit in the justice court on

October 17, 2014. See City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005) (in evaluating

legal sufficiency of the evidence, “the court must consider evidence in the light most favorable to

the verdict, and indulge every reasonable inference that would support it”). These facts fail to

demonstrate that Household Finance’s Notice to Vacate Premises was actually delivered to the

Onabajos three days or more before Household Finance filed its suit for forcible detainer. See Tex.

Prop. Code § 24.005(a), (e). Moreover, to the extent Household Finance asserts that it is entitled to

a presumption that its Notice sent by first-class mail on October 14 was “duly delivered” and thus

timely, we conclude that the presumption fails to establish that Household Finance’s notice was

timely. See Fashakin, 2013 WL 1316694, at *3.

The presumption of delivery relied on by Household Finance arises from Texas Rule

of Civil Procedure 21a, known as the “mailbox rule.” Tex. R. Civ. P. 21a (providing that “service

by mail or commercial delivery service shall be complete upon deposit of the document, postpaid

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and property addressed, in the mail,” but that “nothing herein shall preclude any party from offering

proof that . . . the document was not received within three days from date that it was deposited in the

mail”); see Cliff, 724 S.W.2d at 780 (construing Tex. R. Civ. P. 21a). Under the mailbox rule, when

notice or other paper requiring action is sent by mail, three days “shall be added to the prescribed

period.” See Tex. R. Civ. P. 21a(c). Therefore, assuming without deciding that the mailbox rule and

its presumption of “duly delivered” notice apply to forcible-detainer actions and, more specifically,

to notice requirements under section 24.005, we conclude that the evidence in this case effectively

rebuts any such presumption and conclusively establishes that the statutorily required notice period

had not yet expired when Household Finance instituted its forcible-detainer action on October 17.

Because the record does not contain any evidence demonstrating that Household Finance demanded

possession of the property in accordance with section 24.005(a) of the Property Code, the trial court

erred in awarding Household Finance possession of the property. See Geters, 430 S.W.3d at 585

(concluding that failure to give three days’ notice under section 24.005 was reversible error). We

sustain the Onabajos’ second issue on appeal.3

CONCLUSION

Because the evidence is insufficient to support the trial court’s award of possession

in favor of Household Finance, we reverse the trial court’s judgment and render judgment in favor

of the Onabajos.

3
In their third and fourth issues on appeal, the Onabajos assert that Household Finance’s
forcible-detainer action is barred by statute of limitations and by res judicata. Because we conclude
that the evidence is insufficient to support the trial court’s judgment of possession, we need not
decide these issues. See Tex. R. App. P. 47.1.

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 __________________________________________

Scott K. Field, Justice

Before Justices Puryear, Goodwin, and Field

Reversed and Rendered

Filed: July 14, 2016

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