Alpha Adventure Ranch at Nocona, LLC v. Warrior Golf Management, LLC

In the
Court of Appeals
Second Appellate District of Texas
at Fort Worth
___________________________
No. 02-19-00030-CV
___________________________

ALPHA ADVENTURE RANCH AT NOCONA, LLC, Appellant

V.

WARRIOR GOLF MANAGEMENT, LLC, Appellee

On Appeal from the 97th District Court
Montague County, Texas
Trial Court No. 2018-0451M-CV

Before Birdwell, Bassel, and Wallach, JJ.
Memorandum Opinion by Justice Bassel
 MEMORANDUM OPINION

I. Introduction

This is an appeal from the trial court’s denial of an application for a temporary

injunction in which Appellant Alpha Adventure Ranch at Nocona, LLC sought to

enjoin a foreclosure sale. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014(a)(4). In a

single issue, Appellant challenges that denial. In the trial court, Appellant conceded

that it had failed to pay an installment on the note it had executed as part of the

purchase of a golf course. Appellant sought to avoid the effect of that default by

arguing that because of a unique provision in the note, the failure to make the

payment did not constitute an event of default that entitled the noteholder to exercise

its rights to foreclose under the deed of trust securing the note’s payment. The trial

court, however, also heard evidence that property taxes had not been paid and that

the failure to pay those taxes constituted a default under the terms of the deed of

trust. Appellant does not argue that the unique note term it had relied on to avoid

foreclosure for the failure to pay an installment also applies to the separate default for

the failure to pay property taxes. The only challenge Appellant raises to the property-

tax default is its pending dispute with the taxing authority about the amount owed. A

trial court does not abuse its discretion when the evidence conflicts on whether there

is a basis for injunctive relief, and the contention regarding whether there was an

excuse for not paying the property taxes presented only a fact question, which the trial

court apparently resolved against Appellant. With evidence before the trial court of

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an uncured event of default that permitted foreclosure under the terms of the deed of

trust, the trial court did not abuse its discretion by denying Appellant’s application for

a temporary injunction. We affirm.

II. Factual and procedural background

Appellant executed a note, secured by a deed of trust, as part of its purchase of

a golf course. When Appellee Warrior Golf Management, LLC (the noteholder)

sought to foreclose based on several defaults, one of which was the failure to make an

installment payment, Appellant sought a temporary injunction to stop the foreclosure.

Appellant conceded that the installment payment was not made but argued that the

note’s unique terms did not make that failure an event of default that permitted

foreclosure but instead caused the unpaid installment to be rolled into the balance due

on the note’s maturity. The trial court initially issued a temporary restraining order,

suspending the noteholder’s attempt to foreclose.

The noteholder challenged Appellant’s construction of the note that permitted

it to avoid foreclosure and also alleged that Appellant had failed to pay more than

$20,000 in property taxes required under the deed of trust securing the note’s

payment. Indeed, the deed of trust provides both that Appellant “will pay all taxes

and other rates levied on the Property” and that a default occurs “if the Trustor

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defaults in the observance or performance of any term or covenant which the Trustor

has agreed to observe or perform under this Trustor[1] or elsewhere.”

With these clashing arguments teed up, the trial court held a temporary-

injunction hearing. Neither side presented oral testimony, but the noteholder

introduced, without objection, a tax statement from the local taxing authority that the

noteholder’s counsel represented showed Appellant’s unpaid taxes. Appellant did not

dispute that the face of the statement showed unpaid taxes, but Appellant’s counsel

claimed that there was a pending dispute with the taxing authority about the

description of the property and, thus, a dispute about the amount of taxes owed.

The trial court denied the temporary injunction and entered an order that

stated,

After considering the pleadings of [Appellant] and [the noteholder] and
argument of their counsel, the Court found the following:

That [the noteholder] had the right under the terms of the
Note and Deed of Trust at issue to foreclose the lien created by
the Deed of Trust lien after proper notice and opportunity by [the
noteholder] had been given, as provided in said Deed of Trust;

That [the noteholder] gave [Appellant] proper notice and
opportunity to cure in this matter, before Notice of Foreclosure
was filed;

That the allegations set forth in [Appellant’s] Application
for Injunctive Relief are without merit.

This reference to “Trustor” appears to be a typographical error; we assume
1

that it is a reference to the deed of trust.

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 III. Analysis

A trial court’s denial of a temporary injunction is tested under an abuse-of-

discretion standard. Schmitz v. Denton Cty. Cowboy Church, 550 S.W.3d 342, 363 (Tex.

App.—Fort Worth 2018, pet. denied) (mem. op. on reh’g). “A trial court does not

abuse its discretion when it bases its decision on conflicting evidence, as long as some

evidence in the record reasonably supports the trial court’s decision.” Layton v. Ball,

396 S.W.3d 747, 754 (Tex. App.—Tyler 2013, no pet.) (citing Butnaru v. Ford Motor Co.,

84 S.W.3d 198, 211 (Tex. 2002) (op. on reh’g)).

To obtain a temporary injunction to forestall a foreclosure, the party seeking

the injunction must establish a probable right to recovery based on a lienholder’s

wrongful attempt to foreclose. Branch Banking & Tr. Co. v. TCI Luna Ventures, No. 05-

12-00653-CV, 2013 WL 1456651, at *5 (Tex. App.—Dallas Apr. 9, 2013, no pet.) (op.

on reh’g) (“Because BB & T demonstrated that TCI Luna did not establish a probable

right to recover on its wrongful foreclosure claims, the temporary injunction order is

not supportable on this basis.”).

Here, the trial court had the discretion to find that the noteholder was not

acting wrongfully in seeking to foreclose. Whether Appellant had defaulted by its

failure to pay the property taxes was a matter on which the evidence conflicted, and

there is evidence in the record to support the trial court’s resolution of that issue.

Appellant does not argue that the note provision that forestalled foreclosure for its

failure to make an installment payment would also forestall foreclosure for its failure

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to pay the property taxes. The trial court appears to have resolved the question

regarding whether the property taxes were owed adversely to Appellant as it was

entitled to do. Thus, the record establishes that there was a default that permitted the

noteholder to proceed with foreclosure; for this reason, Appellant failed to establish a

probable right that the noteholder was acting wrongfully in foreclosing. See Wright v.

First Nat’l Bank of Bastrop, No. 03-12-00594-CV, 2013 WL 1748741, at *3 (Tex.

App.—Austin Apr. 19, 2013, no pet.) (mem. op.) (stating that “at the time the court

considered the request for a temporary injunction, the Bank had provided Wright with

the relief she sought—an opportunity to cure her defaults and avoid acceleration of

the note and subsequent foreclosure” and concluding that the trial court did not abuse

its discretion in denying the request for a temporary injunction).

Admittedly, the record in this case is unusual because neither party offered oral

testimony, but each offered exhibits and stated what the evidence would show to no

objection. When the parties adopt this method of presentation, the trial court may

accept their statements as evidence. See Cont’l Cas. Co. v. Davilla, 139 S.W.3d 374, 380

(Tex. App.—Fort Worth 2004, pet. denied) (“Although an attorney’s statements must

be under oath to be considered evidence, the opponent of the testimony can waive

the oath requirement by failing to object when an objection is necessary.” (citing

Banda v. Garcia, 955 S.W.2d 270, 272 (Tex. 1997) (per curiam))); see also Anderson v.

Safeway Tom Thumb, No. 02-18-00113-CV, 2019 WL 2223582, at *11–12 (Tex. App.—

Fort Worth May 23, 2019, pet. denied) (mem. op.) (per curiam) (same).

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 And before us, Appellant’s only challenge to the noteholder’s claim that

Appellant was in default for failing to pay the property taxes is the same factual

challenge that it raised in the trial court:

Additionally, in oral argument [by Appellant’s counsel], Appellant noted
an issue with property taxes that was caused by Appellee – in that the
county tax records inaccurately reflected the amount of acreage of the
property. Either Appellee did not transfer the number of acres agreed,
or the taxing entity was taxing property that was not transferred to
Appellant. Therefore, a legitimate, good-faith objection [that] the
proposed tax amount due exists, which has no bearing on this case.

But taking Appellant’s counsel’s statement as testimony, it created only competing

evidence. Just as if a representative of Appellant had testified, the testimony relied on

the word of an interested witness that an issue with the taxing authority existed.

There was no uncontroverted testimony by a disinterested witness, such as a

representative of the taxing authority, that the asserted issue existed. The statement

of an interested witness presents only a question of credibility, and resolving

credibility issues is solely the job of the factfinder. See City of Keller v. Wilson, 168

S.W.3d 802, 819 (Tex. 2005) (stating that factfinders “are the sole judges of the

credibility of the witnesses and the weight to give their testimony. They may choose

to believe one witness and disbelieve another. Reviewing courts cannot impose their

own opinions to the contrary” (footnotes omitted)); HealthTronics, Inc. v. Lisa Laser

USA, Inc., 382 S.W.3d 567, 582 (Tex. App.—Austin 2012, no pet.) (“The trial court,

as factfinder, is the sole judge of the credibility of the witnesses and the weight to give

their testimony.”).

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 Thus, the record reveals conflicting evidence about the existence of a default,

and we may not substitute our judgment for that of the trial court in resolving that

conflict. See Street v. Chance, No. 02-18-00409-CV, 2019 WL 2293185, at *1 (Tex.

App.—Fort Worth May 30, 2019, no pet.) (mem. op.) (“An abuse of discretion does

not occur when the trial court bases its decisions on conflicting evidence, . . . and we

may not substitute our judgment for the trial court’s judgment unless the trial court’s

action was so arbitrary that it exceeded the bounds of reasonable discretion.” (citing

Butnaru, 84 S.W.3d at 204)). The trial court’s resolution of a credibility question is

exclusively in its province as the factfinder. The resolution of that question gave the

trial court the basis to find that the noteholder was properly exercising its right to

foreclose and thus that Appellant had failed to establish the probable right of recovery

necessary for a temporary injunction to issue. Accordingly, we hold that the trial

court acted well within its discretion by denying the temporary injunction sought by

Appellant, and we overrule Appellant’s sole issue.

IV. Conclusion

Having overruled Appellant’s sole issue, we affirm the trial court’s order

denying Appellant’s application for a temporary injunction.

/s/ Dabney Bassel

Dabney Bassel
Justice

Delivered: December 12, 2019

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