Michael Joe Sorrell and Sorrell Family Ltd Partners v. Estate of Benjamin Hardy Carlton, III, by and Through Its Independent Administratrix Darlene Barton

Affirmed and Majority and Dissenting Opinions filed August 11, 2016.

In The

Fourteenth Court of Appeals

NO. 14-15-00361-CV

MICHAEL JOE SORRELL AND SORRELL FAMILY LTD PARTNERS,
Appellants
V.

ESTATE OF BENJAMIN HARDY CARLTON, III, BY AND THROUGH
ITS INDEPENDENT ADMINISTRATRIX DARLENE BARTON, Appellee

On Appeal from the 239th District Court
Brazoria County, Texas
Trial Court Cause No. 70579

MAJORITY OPINION

Michael Joe Sorrell and Sorrell Family LTD Partners (collectively,
“Sorrell”) appeal the trial court’s judgment in favor of the Estate of Benjamin
Hardy Carlton III (“the Estate”) in the Estate’s suit seeking a declaratory judgment
that it effectively redeemed certain real property after a tax sale. See generally
Tex. Tax Code Ann. § 34.21 (Vernon 2015). We affirm.

BACKGROUND

The property at issue, known as Tract 2 Lot 1, formerly was owned by
Benjamin Hardy Carlton III. Sorrell purchased the land at a tax sale on February 7,
2012. The Sheriff’s Deed was recorded on February 28, 2012, and filed the next
day. Sorrell purchased Tract 2 Lot 1 for $68,000. Sorrell also paid $8,694.49 in
taxes and $682 for insurance.

In a letter dated July 31, 2012, the Estate’s law firm notified Sorrell that the
Estate’s independent administratrix would redeem Tract 2 Lot 1 and tender “the
amount of money paid” plus 25 percent to Sorrell.

The law firm sent a second letter to Sorrell on August 21, 2012, containing
(1) a proposed form of Redemption Deed; (2) an $85,000 law firm trust account
check; and (3) a $28 law firm check “for the filing fee.” The letter asked Sorrell
“not [to] negotiate the checks until such times [sic] as the Deed has been executed
by all Parties and the Deed [sic] on its way back to my office” and further stated:
“As required by law my client is tendering you the amount of money paid plus the
25% redemption funds and your filing fees. If there are any more claimed
expenses, please notify me immediately and such funds will be paid, upon review.”

Sorrell’s attorney responded on August 31, 2012, that the proper redemption
amount had not been tendered; rejected the redemption; and returned the two
checks. The Estate sued Sorrell on November 29, 2012, seeking a declaration that
the Estate properly had redeemed Tract 2 Lot 1.1 After a bench trial held on April

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A decedent’s estate is not a legal entity and may not sue. Austin Nursing Ctr., Inc. v.
Lovato, 171 S.W.3d 845, 849 (Tex. 2005). However, “if the personal representative of an estate
participates in the case, the judgment involving the estate may be valid.” Embrey v. Royal Ins.
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1, 2014, the trial court ordered the Estate to put $104,470.19 into the court registry
by April 17, 2014. The Estate complied.

In a final judgment signed on January 27, 2015, the trial court (1)
determined that the Estate effectively exercised the right of redemption; and (2)
ordered the property to be restored. In its findings of fact and conclusions of law,
the trial court stated that the Estate “made substantial compliance and tendered full
compensation within the redemption period.”

STANDARD OF REVIEW

In a bench trial, findings have the same “force and dignity” as a jury’s
verdict upon jury questions. Anderson v. City of Seven Points, 806 S.W.2d 791,
794 (Tex. 1991). We review fact findings in a bench trial for legal and factual
sufficiency of the evidence by the same standards used in reviewing the evidence
supporting a jury’s verdict. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996). We
review the trial court’s conclusions of law de novo. Smith v. Smith, 22 S.W.3d
140, 143-44 (Tex. App.—Houston [14th Dist.] 2000, no pet.). This court will
follow a trial court’s conclusion of law unless it is erroneous as a matter of law. Id.
at 144.

Sorrell contends that legally and factually insufficient evidence supports the
trial court’s findings that the Estate (1) effectively exercised the right of
redemption, and (2) substantially complied with the statute governing tax sale
redemptions. See Tex. Tax Code Ann. § 34.21.

Co. of Am., 22 S.W.3d 414, 415 (Tex. 2000). Darlene Barton, administratrix for the Estate,
participated in the case. The plaintiff’s petition was filed by and through Darlene Barton, who
served as a witness at trial. See Dueitt v. Dueitt, 802 S.W.2d 859, 861 (Tex. App.—Houston [1st
Dist.] 1991, no writ) (a suit on behalf of a decedent’s estate is a nullity unless the estate’s
personal representative participates in the suit).

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 When reviewing legal sufficiency we consider only the evidence and
inferences tending to support the trial court’s findings and disregard all evidence
and inferences to the contrary. Smith, 22 S.W.3d at 143. When reviewing factual
sufficiency we consider and weigh all the evidence; a judgment can be set aside
only if the challenged findings are so contrary to the overwhelming weight of the
evidence as to be clearly wrong and unjust. Id.

ANALYSIS

Redemption timing and procedures under the Tax Code depend on the
owner’s use and whether the property was sold to a taxing unit or other purchaser.
See generally Tex. Tax Code Ann. § 34.21. The owner of real property “other than
property that was used as the residence homestead of the owner or that was land
designated for agricultural use when the suit or the application for warrant was
filed” that is “sold at a tax sale to a purchaser other than a taxing unit” may redeem
the property by paying the purchaser (1) the amount bid for the property; (2) the
deed recording fee; (3) the amount paid by the purchaser as taxes, penalties,
interest, and costs on the property; and (4) a redemption premium, which “may not
exceed 25 percent” of “the aggregate total.” Id. § 34.21(a), (e). The owner’s right
of redemption must be exercised “not later than the 180th day following the date
on which the purchaser’s . . . deed is filed for record.” Id. § 34.21(e).

An owner seeking to exercise the right of redemption must pay the
prescribed amount. Id. § 34.21(a), (e). The right to redeem expires if the owner
fails to make a timely and sufficient tender. Id. A mere offer to redeem is
ineffectual. Burkholder v. Klein Indep. Sch. Dist., 897 S.W.2d 417, 420 (Tex.
App.—Corpus Christi 1995, no writ). Failure to timely redeem ripens title to the
property in favor of the purchaser. Id. (citing State v. Moak, 207 S.W.2d 894, 896-

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97 (Tex. 1948)). The burden of proof rests on the original owner to prove payment
of the required amount within the statutory period. Id.

We construe the applicable statutory provisions broadly in favor of
redemption. See Jensen v. Covington, 234 S.W.3d 198, 203 (Tex. App.—Waco
2007, pet. denied); see also ABN AMRO Mortg. Grp. v. TCB Farm & Ranch Land
Invs., 200 S.W.3d 774, 780 (Tex. App.—Fort Worth 2006, no pet.); UMLIC VP
LLC v. T & M Sales & Envtl. Sys., 176 S.W.3d 595, 607 (Tex. App.—Corpus
Christi 2005, pet. ref’d); Rogers v. Yarborough, 923 S.W.2d 667, 669 (Tex.
App.—Tyler 1996, no writ). A purchaser at a tax sale buys with knowledge that
his title may be defeated by the original owner’s statutory right of redemption.
Jensen, 234 S.W.3d at 203-04; ABN, 200 S.W.3d at 780.

Sorrell argues the evidence was legally and factually insufficient to support a
finding of substantial compliance because the Estate failed to pay the proper
redemption price within the specified time.

“Substantial compliance means one has performed the essential
requirements of a statute. The term has been applied to excuse deviations from a
statutory requirement if such deviations do not seriously hinder the legislature’s
purpose in imposing the requirement.” Mekhail v. Duncan–Jackson Mortuary,
Inc., 369 S.W.3d 482, 485 (Tex. App.—Houston [1st Dist.] 2012, no pet.) (internal
quotations omitted).

“Substantial compliance is ‘determined on a case by case basis, depending in
part on the size of the amount paid timely, the size of the amount left unpaid by the
[deadline], and the promptness of the late payment.’” Id. (quoting Harris Cty.
Appraisal Dist. v. Dipaola Realty Assocs., 841 S.W.2d 487, 490 (Tex. App.—
Houston [1st Dist.] 1992, writ denied)) (alteration in original). Texas courts have
applied the doctrine of de minimis non curat lex to find substantial compliance
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with section 34.21 when the redemption tender is less than the statutorily required
amount by a small or insignificant amount. Compare Gonzalez v. Razi, 338
S.W.3d 167, 176 (Tex. App.—Houston [1st Dist.] 2011, pet. denied) (owner
substantially complied when short of the required amount by $172.72), and Page v.
Burk, 582 S.W.2d 512, 514 (Tex. Civ. App.—Dallas 1979, no writ) (owner
substantially complied when short of the required amount by less than one
percent), with Haynes v. Haire, No. 09-14-00011-CV, 2014 WL 5409053, at *3
(Tex. App.—Beaumont Oct. 23, 2014, pet. denied) (mem. op.) (owner did not
substantially comply with section 34.21 when tender was short by $7,782.96); and
Burd v. Armistead, 982 S.W.2d 31, 35 (Tex. App.—Houston [1st Dist.] 1998, pet.
denied) (owner did not substantially comply with section 34.21 when tender was
short by $6,076.93).

Here, the Estate had 180 days from February 29, 2012 — until August 27,
2012 — to tender sufficient payment. By letter dated August 21, 2012, the Estate
sent Sorrell a check for $85,000 (representing $68,000, the amount Sorrell bid for
the property, plus 25 percent) and another $28 check for the filing fee, bringing the
Estate’s total tender to $85,028. This amount did not include $8,694.49 in taxes
Sorrell paid and $682 in insurance. The proper redemption amount totals
$96,755.61 taking into account the bid price of $68,000, the $28 recording fee,
$8,694.49 in taxes, $682 in insurance, and the 25 percent redemption fee. While
the Estate’s initial effort at payment was timely, it was short by $11,727.61. The
August 21 tender was lacking by an amount that is not small or insignificant.

This conclusion does not end the analysis because the amount tendered is
only one factor we must consider in determining substantial compliance. See
Jensen, 234 S.W.3d at 207.

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 In Jensen, ad valorem taxes on Jensen’s house were overdue and the taxing
authorities obtained a judgment on the delinquencies. Id. at 200. Center ISD
purchased the property at a tax sale and subsequently sold the property to
Covington. Id. On February 10, the day of the redemption deadline, Jensen had
his attorney hand-deliver a letter to Covington notifying him that Jensen would be
redeeming the property. Id. at 201. The letter further requested a written
itemization of costs as allowed under Texas Tax Code section 34.21(i). Id.
Covington did not respond to the letter. Id. That same day, Jensen’s lawyer called
Covington’s home twice and left a message, and further sent the hand-delivered
letter by fax. Id. Despite these attempts, Covington never contacted Jensen’s
lawyer. Id.

Jensen’s lawyer called Covington twice the next day but was unable to speak
with him. Id. The lawyer also went to Covington’s business to contact him, but
after identifying himself, was told by an employee that Covington was not there.
Id. Jensen’s lawyer next drove to Covington’s home and left with Covington’s
wife a quitclaim deed and a check from his escrow account payable to Covington
in the amount of $45,625 (the bid price of $36,500 plus 25 percent). Id. at 202,
204. Jensen’s lawyer then sent another letter by fax to Covington explaining his
attempts to reach Covington. Id. at 202. Covington returned the check to Jensen’s
lawyer on February 12 contending that it was tardy. Id.

The Waco Court of Appeals concluded that the $45,625 redemption price
tendered by Jensen was erroneous because it did not include taxes and costs. Id. at
204-05. The court nonetheless concluded that Jensen substantially complied with
section 34.21. Id. at 206. The court stated:

Covington violated his statutory duty to provide Jensen with the
itemization. While Jensen would be the first to admit that he should
not have waited until the last day to attempt to redeem his property,
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 the law cannot allow Covington to benefit from his refusal to provide
an itemization and from giving Jensen’s attorney the “runaround.”
Covington cannot have it both ways: he cannot assert that he had ten
days to respond to Jensen, and then use those ten days to claim that
Jensen’s tender was untimely.
Id. at 205 n.3.
The circumstances here parallel Jensen. The Estate notified Sorrell 27 days
before the redemption deadline that it would be redeeming Tract 2 Lot 1. The
Estate tendered $85,028 six days before the redemption deadline and asked Sorrell
to itemize any additional sums required to be included in the redemption price.
The letter stated: “If there are any more claimed expenses, please notify me
immediately and such funds will be paid, upon review.” See Tex. Tax Code Ann.
§ 34.21(i) (“The owner of property who is entitled to redeem the property under
this section may request that the purchaser of the property . . . provide that owner a
written itemization of all amounts spent by the purchaser or taxing unit in costs on
the property.”).

Sorrell responded by letter four days after the August 27 redemption
deadline had passed. Sorrell’s August 31 response occurred within the statutorily
allowed 10-day period after the Estate tendered its $85,028 redemption amount on
August 21. Sorrell stated that the Estate’s $85,028 tender was untimely and
insufficient, and calculated the amount due as $99,845.61. Sorrell’s calculation
was incorrect because it erroneously included the bid price for a separate tract the
Estate was not trying to redeem.

The command to construe provisions broadly in favor of redemption is not
compatible with Sorrell’s position that the Estate lost its redemption right when it
made a timely itemization request and then received an erroneous response from
Sorrell after the redemption deadline had passed. See Jensen, 234 S.W.3d at 205

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n.3 (“Jensen made a timely tender when he offered to pay the itemization costs in
whatever amount they were.”).

Sorrell argues that even if the Estate could not get the requested itemization
from Sorrell himself, the Estate could have filed an affidavit with the county tax
assessor-collector and redeemed the property. See Tex. Tax Code Ann. § 34.21(f).
Under this provision, the owner “may redeem the real property by paying the
required amount . . . to the assessor-collector . . . if the owner of the real property
makes an affidavit stating” that:

the owner has made diligent search in the county in which the
property is located for the purchaser at the tax sale or for the
purchaser at resale, and has failed to find the purchaser, that the
purchaser is not a resident of the county in which the property is
located, that the owner and the purchaser cannot agree on the amount
of redemption money due, or that the purchaser refuses to give the
owner a quitclaim deed to the property.
Id.

The contingencies contemplated in section 34. 21(f) were not applicable
here. The Estate found Sorrell and there is no contention that Sorrell is not a
resident of the county in which Tract 2 Lot 1 is located. There was no
disagreement at the time of tender, or within the 180-day period, because Sorrell
responded with incorrect information after the period had expired. Cf. Bluntson v.
Wuensche Servs., Inc., 374 S.W.3d 503, 508 (Tex. App.—Houston [14th Dist.]
2012, no pet.) (section 34.21(f) provides alternative method of redemption
available when owner and purchaser cannot agree on amount due).

Sorrell also argues the Estate made an impermissible conditional tender
because the Estate’s transmittal letter (1) said the check was not to be negotiated
until the enclosed deed was executed and sent back to the Estate; and (2) included

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this language: “If there are any more claimed expenses, please notify me
immediately and such funds will be paid, upon review.”

Generally, “‘an unconditional offer by a debtor or obligor to pay another . . .
a sum not less in amount than that due on a specified debt or obligation’ is a tender
of payment.” Bluntson, 374 S.W.3d. at 507 (citing Baucum v. Great Am. Ins. Co.
of N.Y., 370 S.W.2d 863, 866 (Tex. 1963)). “The tenderer must relinquish
possession of it for a sufficient time and under such circumstances as to enable the
person to whom it is tendered, without special effort on his part, to acquire its
possession.” Baucum, 370 S.W.2d at 866. “[T]o effect redemption after a tax sale,
the owner must make an ‘unqualified’ tender of the required amount within the
statutory time period.” Bluntson, 374 S.W.3d at 507 (citing Jensen, 234 S.W.3d at
206).

We reject Sorrell’s contention that the Estate made a conditional tender by
asking for the quitclaim deed it was statutorily allowed to obtain. With respect to
the transmittal letter’s additional language, we look to Bluntson for guidance.

In Bluntson, the owner enclosed in a letter two checks for redemption. Id. at
505. One was a $17,687.98 check representing the undisputed portion of the
redemption price; the other was a $1,393.75 check representing costs purportedly
incurred by the purchaser. Id. The letter stated that the purchaser had not provided
any documentation or receipts for the costs incurred and requested documentation
as proof of the costs. Id. The letter concluded: “We hereby request that the check
for $1,393.75 be held in trust by you pending the provision of this documentation
and resolution of this issue.” Id. at 506. The court concluded that this offer was
conditional. Id. at 508.

The offer in Bluntson was not conditional because the owner requested proof
of the costs incurred; rather, the offer was conditional because the owner asked the
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purchaser to hold the check in trust pending “resolution” of a threatened dispute
regarding costs. Id. The owner’s “letter raised doubts on whether [the purchaser]
would be permitted to retain the[] funds if the issue of costs were not resolved to
[the owner’s] satisfaction.” Id. No such circumstances are present in this case
because the Estate neither conditioned its offer on the resolution of any issue nor
threatened to dispute any itemization provided by Sorrell.

In light of the record and the policies underlying redemption procedures, we
reject Sorrell’s contention that legally and factually insufficient evidence supports
the trial court’s findings that the Estate substantially complied with the statutory
requirements and effectively redeemed the property.

CONCLUSION

We affirm the trial court’s judgment.

/s/ William J. Boyce
Justice

Panel consists of Chief Justice Frost and Justices Boyce and Wise (Frost, C.J.,
dissenting).

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