John Thomas Aiken v. Angelique S. Naylor

ACCEPTED 03-14-00519-CV 3972059 THIRD COURT OF APPEALS AUSTIN, TEXAS 1/30/2015 4:13:46 PM JEFFREY D. KYLE CLERK NO. 03-14-00519-CV FILED IN 3rd COURT OF APPEALS In The Court of Appeals AUSTIN, TEXAS For the Third District Court of Appeals 1/30/2015 4:13:46 PM Austin, Texas JEFFREY D. KYLE Clerk JOHN THOMAS AIKEN, Appellant v. ANGELIQUE S. NAYLOR and WELLS FARGO BANK, N.A., Appellees ON APPEAL FROM THE 250TH JUDICIAL DISTRICT COURT, TRAVIS COUNTY, TEXAS TRIAL COURT CAUSE NO. D-1-GN-13-003527 BRIEF OF APPELLEE ANGELIQUE S. NAYLOR Russell Frost State Bar No. 24063687 Law Office of Russell Frost 711 West 7th Street Austin, Texas 78701 Tel: (512) 225-5590 Fax: (512) 692-2895 rfrost@russellfrostlaw.com ATTORNEY FOR APPELLEE ANGELIQUE S. NAYLOR TABLE OF CONTENTS TABLE OF CONTENTS .............................................................................................. ii INDEX OF AUTHORITIES.....................................................................................iv STATEMENT OF THE CASE .................................................................................vi STATEMENT REGARDING ORAL ARGUMENT ........................................... viii ISSUES PRESENTED ................................................................................................. ix STATEMENT OF FACTS ............................................................................................ 1 SUMMARY OF THE ARGUMENT ........................................................................... 3 ARGUMENT ................................................................................................................. 5 A. Standard of Review – Texas Rule of Civil Procedure 166a.................. 5 B. Aiken failed to present to the trial court, and raises for the first time on appeal, his contentions that the trial court erred in granting summary judgment because the relief sought was in excess of what Naylor was entitled to under the pleadings, and that the trial court erred in granting judgment greater than the relief requested and not based on grounds not asserted in the motion for summary judgment... 5 C. Naylor’s summary judgment motion was consistent with and supported by the claims and factual allegations asserted in her First Amended Counterclaim…..……………………………………..…….6 D. Aiken’s claims under the Texas Debt Collections Act, the Texas Property Code, and for declaratory judgment are without merit, and therefore, the trial court did not err in granting summary judgment in favor of Naylor......................................................................................... 9 ii E. There is no genuine issue of material fact as to who holds superior title to the subject property, and therefore, the trial court’s grant of summary judgment in favor of Naylor is correct................................. 13 F. Naylor’s claim for breach of contract is not barred by the statute of limitations.... ........................................................................................... 15 G. Naylor is not barred by judicial estoppel from asserting a breach of contract claim under the LWOP.... ....................................................... 17 H. Aiken’s standing argument is without merit ........................................ 19 CONCLUSION AND PRAYER................................................................................. 25 CERTIFICATE OF COMPLIANCE .......................................................................... 26 CERTIFICATE OF SERVICE.................................................................................... 27 iii INDEX OF AUTHORITIES CASES Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex. 2005) ..................................................................... 19 Besteman v. Pitcock, 272 S.W.3d 777, 784 (Tex. App.—Texarkana 2008, no pet.) .......................... 13 CKB & Assocs. v. Moore McCormack Petroleum, Inc., 809 S.W.2d 577 (Tex. App.—Dallas 1991, writ denied) .................................. 17 Ethan's Glen Community Ass'n v. Kearney, 667 S.W.2d 287 (Tex. App.—Houston [1st Dist.] 1984, no writ) ...................... 9 Ferguson v. Bldg. Materials Corp. of Am., 295 S.W.3d 642 (Tex. 2009) .............................................................................17 Gulf States Abrasive Manufacturing, Inc. v. Oertel, 489 S.W.2d 184 (Tex. Civ. App.—Houston [1st Dist.] 1972, writ ref'd n.r.e.) ...........................17 Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887 (Tex. 2000) .................................................................................7 In re R.A., 417 S.W.3d 569 (Tex. App.—El Paso 2013, no pet.) .............................18, 22 Kane v. Nat'l Union Fire Ins. Co., 535 F.3d 380 (5th Cir. 2008) .............................................................................19 King Ranch, Inc. v. Chapman, 118 S.W.3d 742 (Tex. 2003) ...............................................................................5 Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857 (Tex. 2000) ...............................................................................21 iv Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) ...............................................................................5 McConnell v. Southside ISD, 858 S.W.2d 337 (Tex. 1993) ............................................................................... 6 Nine Greenway Ltd. v. Heard, Goggan, Blair & Williams, 875 S.W.2d 784, 787 (Tex. App.—Houston [1st Dist.] 1994, writ denied) .....20 Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546 (Tex. 1985) ...............................................................................5 Nootsie Ltd. v. Williamson Cnty. Appraisal Dist., 925 S.W.2d 659, 662 (Tex. 1996) ..................................................................... 20 Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211 (Tex. 2003) ...............................................................................5 Wells v. Dotson, 261 S.W.3d 275 (Tex. App.—Tyler 2008, no pet.)...........................................16 RULES AND STATUTES 11 U.S.C. § 522(b)(2) (2012) ................................................................................... 20 11 U.S.C. § 554(c) (2012) ........................................................................................ 19 TEX. CIV. PRAC. & REM. CODE ANN. ANN. § 16.035 (West 2014) ..................... 15 TEX. CIV. PRAC. & REM. CODE ANN. ANN. § 16.051 (West 2014) ............... 12, 15 TEX. CIV. PRAC. & REM. CODE ANN. § 16.069 (West 204) .........................4, 16–17 TEX. PROP. CODE ANN. § 5.062 (West 2014) ............................................... 11, 12 TEX. PROP. CODE ANN. §5.064 (West 2014)................................................ vii, 11 TEX. PROP. CODE ANN. § 5.076 (West 2014)............................................... vii, 11 v TEX. PROP. CODE ANN. § 5.077 (West 2014)............................................... vii, 11 TEX. PROP. COD ANN. § 5.085(b) (West 2014) ............................................ vii, 11 TEX. R. CIV. P. 93 ............................................................................................. 20 TEX. R. CIV. P. 94 ............................................................................................. 17 TEX. R. CIV. P. 166a(c) ......................................................................................... 5–6 TEX. R. EVID. 106 ..................................................................................................... 18 TEX. R. EVID. 107 ..................................................................................................... 18 SESSION LAWS Act of June 18, 2005, 79th Leg., R.S., ch. 978, §§ 2, 7(a), 2005 Tex. Gen. Laws 3280-81, 3285 (codified at Tex. Prop. Code § 5.062)....................................... 11 Act of May 21, 2001, 77th Leg., R.S. ch. 693, § 1, 2001 Tex. Gen. Laws 1319 (amended 2005) (current version at Tex. Prop. Code 5.062). ........................... 11 STATEMENT OF THE CASE 1.01 On October 10, 2013, Appellant John Thomas Aiken (“Aiken”) filed suit against Appellee Angelique S. Naylor (“Naylor”) in the 250th Judicial District of Travis County, Texas, seeking (1) quiet title to property in dispute; (2) damages for alleged violations under the Texas Debt Collections Act (hereinafter “TDCA”); (3) damages for alleged violations of the Texas Property Code §5.076, 5.077, 5.085(b), and 5.064; (4) alleged damages for Money Had Received and Unjust Enrichment; and (5) Declaratory Relief. vi 1.02 Naylor answered and filed counterclaims for breach of contract and declaratory relief, among other claims and remedies. 1.03 On March 24, 2014, Naylor moved for summary judgment. In her motion, Naylor sought summary judgment on the ground that, because it is undisputed that Aiken failed to exercise his option to purchase in accordance the terms of the lease agreement (hereinafter “LWOP”)—namely, the option was not evidenced by a notice in writing addressed to the Lessor, sent by registered mail to the address of the Lessor on or before April 1, 2009, or otherwise—Aiken had no claim to title of the property in question, and thus Aiken’s claim to quiet title failed as a matter of law. Naylor also requested summary judgment on her claim for breach of contract on the ground that Aiken stopped making his monthly payments to Naylor. 1.04 On June 5, 2014, the Honorable Gus Strauss rendered an order granting Naylor’s motion for summary judgment. 1.05 On August 14, 2014, Judge Strauss rendered a final judgment that incorporated the order of June 5, 2014. It is from this judgment that Aiken appeals. vii STATEMENT REGARDING ORAL ARGUMENT Naylor disputes the necessity for oral argument as this case involves only well-settled principles of law and facts plainly apparent from the record. viii ISSUES PRESENTED 2.01 Did the trial court correctly grant Naylor’s motion for summary judgment? 2.02 Did the trial court correctly dismiss Aiken’s claims for quiet title where Aiken failed to exercise his option to purchase the property in accordance with the terms of the lease and where Aiken has no other possible claim of title to the property? 2.03 Did the trial court correctly grant summary judgment on Naylor’s breach of contract counterclaim where it is undisputed that Aiken failed to pay rent? 2.04 Did the trial court correctly grant summary judgment on Aiken’s remaining claims because they have no basis in law or fact? 2.05 Did the trial court correctly find that Naylor’s claims were not barred by the statute of limitations? 2.06 Is Naylor judicially estopped from asserting her claims in this lawsuit? 2.07 Does Naylor have standing to assert her counterclaim for breach of contract in this lawsuit? ix TO THE HONORABLE COURT OF APPEALS: STATEMENT OF FACTS 3.01 Naylor is the fee simple owner of real property located at 1101 Durham Drive in Austin, Travis County, Texas (“1101 Durham”). CR 133. On or about April 30, 2004, Naylor and Aiken entered into a lease agreement with an option to purchase the property (“LWOP”). CR 133, 139-45. 3.02 Section 5 of the LWOP required Aiken to pay Naylor $189,577.58 in base rental payments, $5,000 of which was prepaid in cash and $184,577.58 of which was tendered with a promissory note (“Note”) in favor of Naylor. CR 140. In exchange, Naylor delivered possession of the property pursuant to the terms of the LWOP. Id. 3.03 Paragraph 23 of the LWOP granted Aiken “the option to purchase the leased property . . . prior to April 1, 2009” so long as the option was “evidenced by a notice in writing addressed to the Lessor, sent by registered mail to the address of the Lessor . . . .” CR 143-44. Deed to the property was never delivered to Aiken and, instead, was held in escrow until Aiken exercised the option. CR 133-34, 136. However, Aiken never exercised his option “by sending a notice in writing addressed to [Naylor], sent by registered mail to the address of [Naylor]” (or otherwise), nor did Aiken produce any evidence that he sent any such notice in accordance with the terms of the contract, and the option is now expired as a matter of law. See CR 134. 3.04 The Note, which was prepared in conjunction with the LWOP, matured on April 30, 2009. CR 147. Pursuant to the Note, Aiken was required to pay Naylor the entire principal of the Note upon maturity. Id. It is undisputed that Aiken failed to make this payment to Naylor. CR 134. 3.05 To accommodate Aiken, Naylor began accepting rental payments from Aiken so that Aiken could continue to reside on the property. It is undisputed that, after July 2013, Aiken stopped making his rental payments although he continues to reside at the property. Id. Shortly thereafter, Naylor filed an eviction suit in the Justice Court. Aiken then filed this lawsuit to delay a ruling in the Justice Court and to continue to reside on Naylor’s property without paying a dime for it. 2 SUMMARY OF THE ARGUMENT 4.01 The trial court correctly granted Naylor’s motion for summary judgment, and this Court should affirm that ruling. 4.02 Aiken failed to present to the trial court, and raises for the first time on appeal, his contentions that the trial court erred in granting summary judgment because the relief sought was in excess of what Naylor was entitled to under the pleadings. This argument was not preserved and may not be considered as grounds for reversal. 4.03 Contrary to Aiken’s claim that the summary judgment relief requested by Naylor was not supported by her pleadings, the relief requested by Naylor is identical to the express language of her First Amended Counterclaim. CR 108-12. By basing her summary judgment arguments on the claims and factual allegations made in her counterclaim, Naylor gave Aiken “fair notice” of her arguments and her requested relief. 4.04 The trial court correctly granted Naylor a total summary judgment rather than the partial summary judgment because Naylor clearly and expressly argued that “all” of Aiken’s causes of action failed as a matter of law. CR 129-30. 4.05 There was no genuine issue of material fact as to who holds superior title to the property in question because Aiken never exercised his option to 3 purchase the property in accordance with the terms of the LWOP. CR 133-34. That option has expired, and Aiken has no other possible claim to title of the property. 4.06 Naylor’s counterclaims are not barred by the statute of limitations. The cause of action for failure to pay rents accrued in August 2013 when Aiken stopped making rental payments, and the limitations period for breach of contract is four years. CR 134. Alternatively, even if Naylor’s counterclaims had been untimely, they were revived under section 16.069 of the Texas Civil Practice and Remedies Code when Aiken filed his lawsuit regarding the same transaction on which Naylor’s counterclaims are based, and Naylor filed her counterclaim within 30 days after the date on which her answer was required. 4.07 Aiken waived his judicial estoppel argument by failing to plead it to the trial court. 4.08 Naylor does not lack standing or capacity to pursue her counterclaim for breach of contract in this lawsuit. 4 ARGUMENTS AND AUTHORITIES A. Standard of Review – Texas Rule of Civil Procedure 166a. 5.01 A trial court’s decision to grant summary judgment is reviewed de novo using the standards for summary judgment set forth in Texas Rule of Civil Procedure 166a. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215-16 (Tex. 2003). A court of appeals must determine whether the successful movant carried its burden of demonstrating that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). 5.02 Appellate review of a no-evidence summary judgment is governed by the same legal sufficiency standard as directed verdicts. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750 (Tex. 2003). B. Aiken failed to present to the trial court, and raises for the first time on appeal, his contentions that the trial court erred in granting summary judgment because the relief sought was in excess of what Naylor was entitled to under the pleadings, and therefore this argument may not be considered as grounds for reversal. 5.03 In summary judgment practice, the non-movant must expressly present to the trial court, by written answer or response, any issues defeating the movant’s entitlement to summary judgment. Issues not so expressly presented to 5 the trial shall not be considered on appeal as grounds for reversal. TEX. R. CIV. P. 166a(c). McConnell v. Southside ISD, 858 S.W.2d 337, 353 (Tex.1993). Here, Aiken did not present the cited issues to the trial court, and therefore, they are not grounds for reversal. C. Naylor’s summary judgment motion was consistent with and supported by the claims and factual allegations asserted in her First Amended Counterclaim. 5.04 Aiken’s first argument is that Naylor’s summary judgment motion was not supported by her pleadings. As stated above, Aiken raises this issue for the first time on appeal. In addition, Aiken claims that, while Naylor sought summary judgment on her breach of contract claim on the ground that Aiken failed to make his payments under the LWOP, such facts were not alleged in Naylor’s pleadings. 5.05 Contrary to Aiken’s assertion, Naylor clearly and expressly alleges that Aiken stopped making payments under the LWOP in paragraphs 10 and 11 of Naylor’s First Amended Counterclaim: “To accommodate Plaintiff, Naylor began accepting rental payments from Plaintiff so that he could continue to lease the Property. . . . On or about July 2013, Plaintiff stopped making payments, and Naylor filed an eviction suit in the Justice Court.” CR 109. Then, in paragraph 12 of her First Amended Counterclaim, Naylor expressly incorporated these factual 6 allegations into her allegations regarding her breach of contract claim. CR 109-10. Accordingly, the factual allegations on which Naylor’s summary judgment motion was based were expressly alleged in her pleadings, and Aiken’s argument is without merit and should be rejected. 5.06 Moreover, Texas follows the “fair notice” standard for pleadings. Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 896 (Tex. 2000) (quoting Broom v. Brookshire Bros., Inc., 923 S.W.2d 57, 60 (Tex. App.—Tyler 1995, writ denied). The relevant consideration under this standard is “whether the opposing party can ascertain from the pleading the nature and basic issues of the controversy and what testimony will be relevant.” Id. The purpose of the fair notice pleading is to ensure that the opposing party has enough information to enable it to prepare a defense against the claim. Id. at 897 (citing Roark v. Allen, 633 S.W.2d 804, 810 (Tex. 1982)). When the opposing party does not specially except to the pleadings, the court should review the pleadings liberally in favor of the pleader. Id. Here, Naylor’s pleading provided Aiken with adequate notice as to the nature and issues of the controversy. Further, Aiken did not specially except to Naylor’s pleadings, and therefore, this Court must construe Naylor’s pleadings liberally in favor of Naylor. Id. For these reasons, Aiken had fair and adequate notice of the facts 7 upon which Naylor’s claims were based and the trial court’s grant of summary judgment in favor of Naylor is correct. 5.07 Aiken also argues that Naylor’s request in her motion for declaratory judgment—that no legitimate title dispute exists and that Naylor is not precluded from pursuing her eviction lawsuit in the Justice Court—were not requested in her pleadings. See Appellant’s Brief ¶ 5.08. Contrary to Aiken’s assertion, in paragraph 23 of her First Amended Counterclaim, Naylor expressly requested this exact relief: Naylor requests that declaratory judgment be rendered under Chapter 37 of the Texas Civil Practice and Remedies Code as follows: . . . (c) declaring the relationship of Naylor and [Aiken] is now that of Lessor and Lessee, no legitimate title dispute exists, and Naylor is not precluded to pursue her eviction action in the Justice Court. CR 111 (emphasis added). Again, Aiken’s argument is refuted by the clear, express language of Naylor’s pleadings. Therefore, the Court should reject Aiken’s argument and affirm the trial court’s ruling. 5.08 Finally, Aiken argues that the trial court erred by enjoining Aiken from “asserting any claim or interest in or to the Property or any part of it,” claiming that the Court lacks authority for this order and that Naylor did not plead for such relief. See Appellant’s Brief ¶ 5.14. Contrary to Aiken’s assertion, "[t]he right to possession necessarily follows the adjudication of title, and the right to 8 such possession may be awarded in the title action . . . ." Ethan's Glen Community Ass'n v. Kearney, 667 S.W.2d 287, 290 (Tex. App.—Houston [1 Dist.] 1984, no writ). Thus, Appellant’s own assertion of a title contest opened the door to the issue of possession, and therefore, it is appropriate and necessary to include in the final judgment an order on the issue of possession. See Kearney, 667 S.W.2d at 290. Any order to the contrary would render moot the Court’s title determination. 5.09 In conclusion, as set forth above, Naylor’s motion for summary judgment is entirely consistent with Naylor’s pleadings and, in fact, tracks the express language of those pleadings. Aiken’s argument that Naylor’s summary judgment was not supported by the pleadings is without any basis and offers this Court no reason to reverse the trial court’s judgment. D. Aiken’s claims under the Texas Debt Collections Act, under the Texas Property Code, and for declaratory judgment are without merit, and therefore, the trial court did not err in granting summary judgment in favor of Naylor. 5.10 Aiken next argues that Naylor was entitled to only a partial summary judgment because the motion did not specifically address some of Aiken’s claims or Naylor’s counterclaim for “breach of the lease agreement.” See Appellant’s Brief ¶ 5.12. First, with regard to Aiken’s claims, Naylor’s motion for summary judgment clearly and expressly argued that judgment should be granted on all of Aiken’s claims: “As a result, Plaintiff’s option to purchase expired, and Plaintiff is 9 without any legal or equitable claim to title. For this reason, all of Plaintiff’s claims are without merit, he is merely a lessee, and Naylor is entitled to a no- evidence summary judgment on Plaintiff’s claims.” CR 129-30 (emphasis added). For this reason, Aiken’s argument fails. 5.11 Next, with respect to Aiken’s Debt Collection claim, Naylor moved for traditional and no-evidence summary judgment based on her argument that Aiken’s title contest is without merit, she owns 1101 Durham, and Aiken is merely a lessee. CR 127-30. Consequentially, the trial court affirmed her argument and ruled that the sale never occurred because Aiken failed to exercise his option. CR 407-09. If the sale never occurred, no debt exists, and Aiken is precluded from establishing any of the elements to his Debt Collection claim, and thus Naylor is entitled to summary judgment on that claim. In any event, Aiken provided no evidence in support of his claim. For these reasons, the trial court did not err in granting summary judgment in favor of Naylor with respect to Aiken’s Debt Collections claim. 5.12 Next, with respect to Aiken’s Property Code violations, each of the violations Aiken claims is predicated upon the existence of an executory contract. See TEX. PROP. CODE § 5.064, 5.076, 5.077, 5.085(b). The current version of section 5.062(a)(2) of the Property Code states that “an option to purchase real 10 property that includes or is combined or executed concurrently with a residential lease agreement” is considered an executory contract for conveyance purposes. TEX. PROP. CODE § 5.062(a)(2). However, that section, amended in 2005, applies only to “an executory contract for conveyance entered into on or after January 1, 2006.” Act of June 18, 2005, 79th Leg., R.S., ch. 978, §§ 2, 7(a), 2005 Tex. Gen. Laws 3280-81, 3285 (codified at Tex. Prop. Code § 5.062). See Exhibit C. In this case, the parties executed the LWOP on or about April 30, 2004, over two years prior to the applicability of the law upon which Aiken relies. The version of the law in effect for purposes of the LWOP in this case makes no similar provision. Act of May 21, 2001, 77th Leg., R.S. ch. 693, § 1, 2001 Tex. Gen. Laws 1319 (amended 2005) (current version at Tex. Prop. Code 5.062). See Exhibit D. Therefore, the facts here fail to establish the existence of an executory contract, chapter 5 of the Property Code is not applicable, and the trial court did not err in granting summary judgment in favor of Naylor on Aiken’s various allegations of Property Code violations. 5.13 Alternatively, at the time Aiken asserted his claims under the Property Code on October 10, 2013, the option to purchase under the LWOP had already expired under its own terms, rendering the contact—at best—a mere lease agreement. Thus, the LWOP did not meet the criteria of even the current version 11 of section 5.062 by the time Aiken asserted his claim. Therefore, it was not an executory contract, and chapter 5 of the Property code is not applicable. 5.14 Alternatively, Aiken’s Property Code claims are subject to a four-year statute of limitations, and therefore, would be subject to the affirmative defense. See TEX. CIV. PRAC. & REM. CODE ANN. § 16.051 (West 2014). For any of these reasons, the trial court did not err in awarding Naylor summary judgment on Aiken’s claims of Property Code violations. 5.15 Next, with respect to Naylor’s counterclaim for breach of contract, Naylor’s motion for summary judgment specifically addresses that counterclaim. See CR 109-10, 130. Naylor did not have a separate counterclaim for “breach of the lease agreement,” and thus Aiken’s argument regarding this alleged claim is without any basis whatsoever. Moreover, to the extent that Naylor’s breach of contract claim was based on Aiken’s failure to make payments, Naylor’s motion for summary judgment expressly addressed this allegation. 5.16 In summary, based on Aiken’s failure to establish a claim to title, the pleadings on file, and the uncontroverted summary judgment evidence attached to Nalyor’s Motion for Summary Judgment, Aiken’s claims are all without merit, and therefore, the trial court correctly granted summary judgment in favor of Naylor. 12 E. There is no genuine issue of material fact as to who holds superior title to the subject property, and therefore, the trial court’s grant of summary judgment in favor of Naylor is correct. 5.17 Aiken argues that the trial court should not have granted summary judgment because there were fact issues as to who holds superior title to the property in question. See Appellant’s Brief ¶ 5.17. Contrary to his assertion, there is no genuine issue of material fact as to who holds superior title to the property. Unless and until Aiken successfully exercised his option to purchase, Naylor retained superior title to the property. Cf. Besteman v. Pitcock, 272 S.W.3d 777, 784 (Tex. App.—Texarkana 2008, no pet.) (holding option period expired and reversing trial court’s order of specific performance). No genuine issue of material fact exists as to whether Aiken exercised his option to purchase or whether the option expired because it is undisputed that the option was not evidenced by a notice in writing addressed to the Lessor, sent by registered mail to the address of the Lessor on or before April 1, 2009. Cf. id.; CR 134. Moreover, Aiken has no other possible claim to title other than through the option that he failed to exercise. Therefore, no genuine issue of material fact exists as to who holds superior title to the property, and the trial court did not err in granting summary judgment in favor of Naylor on this issue. 13 5.18 Next, no genuine issue of material fact exists as to whether execution of the LWOP terminated the lease. Under section 5 of the LWOP, until Aiken tendered full payment of the principal balance of the Note, rents under the lease were due to Naylor. See CR 140. Since there is no genuine issue of material fact as to Aiken’s failure to tender the principal balance of the Note, the lease remained in effect. It follows that no genuine issue of material fact exists as to whether the execution of the LWOP terminated the lease, and the trial court did not err in granting summary judgment in favor of Naylor. 5.19 Further, to the extent that Aiken claims that that he had a claim to title because he received a deed from Naylor for the property, that assertion is completely unsupported by the record. To the contrary, no deed or deed of trust was ever given to, delivered, or otherwise tendered to Aiken. Instead, pursuant to the terms of the parties’ Document Escrow Agreement, the deed to the property was held in escrow pending Aiken’s exercise of his option to purchase. CR 133- 34, 136. Since Aiken plainly failed to exercise his option, he never received the deed, he was unable (and thus failed) to produce the original deed to the trial court, and therefore, the undelivered deed cannot form the basis of any claim to title of the property by Aiken. In sum, there is no genuine issue of material fact as to the title of the property because Aiken failed to exercise his option to purchase and has 14 no other possible claim of title to the property, and therefore, the trial court’s summary judgment was correct. F. Naylor’s claims for breach of contract and declaratory judgment are not barred by the statute of limitations. 5.20 Aiken next argues that Naylor’s claims are barred by limitations. See Appellant’s Brief ¶¶ 5.21—.24. This argument is without merit.1 Naylor’s breach of contract claim regarding the failure to pay rents did not accrue until Aiken refused to pay rents after July 2013. CR 134. The applicable limitations period is four years. TEX. CIV. PRAC. & REM. CODE §16.051. Here, Naylor filed her counterclaim on October 13, 2013, and her first amended counterclaim on March 19, 2014, well within the four-year period. Therefore, her claim is not barred by limitations, and Aiken’s argument must be rejected. 5.21 Alternatively, section 16.069 of the Texas Civil Practice and Remedies Code provides as follows: 1 The statute cited by appellant—section 16.035 of the Texas Civil Practice and Remedies Code—applies to a suit for the recovery of real property under a real property lien or the foreclosure of a real property lien. TEX. CIV. PRAC. & REM. CODE § 16.035. Naylor’s suit does not attempt to recover real property under a real property lien or foreclose on a real property lien. Instead, her suit seeks contractual damages and a declaratory judgment. CR 108-23. Also, the statute on its face does not purport to apply to appellee's counterclaim for a declaratory judgment. 15 If a counterclaim or cross claim arises out of the same transaction or occurrence that is the basis of an action, a party to the action may file the counterclaim or cross claim even though as a separate action it would be barred by limitation on the date the party's answer is required. TEX. Civ. PRAC. & REM. CODE § 16.069(a). In order for a counterclaim to be revived, the defendant must file the counterclaim no later than 30 days after the answer is due. See id. § 16.069(b). The purpose of this section is to prevent a party from waiting until an opponent’s valid claim that arises out of the same transaction or occurrence is time-barred before asserting its own claim.2 Wells v. Dotson, 261 S.W.3d 275, 281 (Tex. App. Tyler 2008, no pet.) (citing Hobbs Trailers v. JT Arnett Grain Co., Inc., 560S.W.2d 85, 88-89 (Tex. 1977). 5.22 Here, Aiken filed his Original Petition on October 10, 2013, and an Amended Petition on October 14, 2013. CR 4, 25. In these pleadings, Aiken asserted claims related to the parties’ transaction regarding the property in question, which is the same transaction upon which Naylor’s breach of contract claim is based. CR 5-14, 26-33, 41. Naylor then filed her breach of contract counterclaim in the same document as her Original Answer on November 13, 2013, which satisfies the 30-day requirement of section 16.069(b). CR 41. Since 2 Aiken attempted to get away with exactly the type of conduct this law was created to protect against: waiting out your opponent’s valid claim in order to catch a major windfall. 16 Naylor’s claims were revived under section 16.069, they were not barred by limitations, and the trial court did not err in granting Naylor summary judgment on her breach of contract counterclaim. G. Aiken’s judicial estoppel argument was not specifically pled and therefore is waived. 5.23 Aiken next argues that Naylor should be judicially estopped from asserting any claims related to the parties’ transactions because she did not disclose information related to the transactions in her 2010 bankruptcy proceedings. See Appellant’s Brief ¶¶ 5.25—.35. Even assuming these allegations are true, Aiken failed to plead the affirmative defense, and therefore, the defense is waived.3 TEX. R. CIV. P. 94; CKB & Assocs. v. Moore McCormack Petroleum, Inc., 809 S.W.2d 577, 584 (Tex. App.—Dallas 1991, writ denied) (“Estoppel is an affirmative defense. It is lost if not specifically pleaded.”); Gulf States Abrasive Manufacturing, Inc. v. Oertel, 489 S.W.2d 184, 188 (Tex. Civ. App.—Houston [1st Dist.] 1972, writ ref'd n.r.e.) (“Judicial estoppel is an affirmative defense, and must be specially pleaded.”). 3 Even if Aiken had not waived the defense, judicial estoppel mandates that an unfair advantage be sought by the party being estopped. See Ferguson v. Bldg. Materials Corp. of Am., 295 S.W.3d 642, 643 (Tex. 2009). Surely it cannot be argued that a landlord asserting her contractual rights in defending a claim of title by her tenant is seeking an unfair advantage against that tenant who is seeking a free house. 17 5.24 Alternatively, judicial estoppel does not apply. First, there was no asset to disclose at the time of the filing of the case: the LWOP expired by its own terms in 2009 prior to the filing of the bankruptcy case by Naylor in 2010 and, therefore, Naylor had, or was entitled to, sole and undisputed possession of 1101 Durham at the time of the filing of the case. Second, even if there was an asset to disclose, the issue was resolved when, in December 2013, Naylor voluntarily re- opened her bankruptcy case and disclosed the literally worthless “asset.” Naylor filed amended schedules in her case—specifically Schedules B and C—and, in an “abundance of caution,” see Exhibit A at 5, disclosed the worthless asset. Naylor now asks this Court to take judicial notice of the balance of the records from her bankruptcy proceedings including the amended schedules, see Exhibit A, and the docket report, see Exhibit B, for Cause No. 10-12009 filed in the United States Bankruptcy Court, Western District of Texas, Austin Division. In re R.A., 417 S.W.3d 569, 576 (Tex. App.—El Paso 2013, no pet.); cf. TEX. R. EVID. 106, 107 (rule of optional completeness). 5.25 Third, the value of the asset is unequivocally zero. This is reflected in Naylor’s amended bankruptcy schedules, see Exhibit A at 5, and plainly admitted by Aiken, see CR 28 (Aiken states in live pleadings he “continued to mistakenly make payments” on the property after April 2009) and CR 158 (Aiken refers to 18 LWOP as “a legal fiction” that “no longer exists”). Moreover, once the case was reopened by the Bankruptcy Court and the amended schedules filed, the Chapter 7 Trustee concluded that the value of the claim was insignificant, which is evidenced by the re-closing of the case on January 23, 2014, without issue. See Exhibit B at 15. In other words, the Bankruptcy Trustee abandoned in favor of Naylor any interest in the asset the Bankruptcy Estate may have had. See 11 U.S.C. 554(c) (2012). In summary, Aiken’s judicial estoppel argument, even if preserved, is without merit. H. Naylor has standing and capacity to assert her breach of contract claim. 5.26 Aiken’s final argument is that Naylor lacks standing to claim breach of contract because she did not disclose the note, lease agreement, and Aiken’s payments in her 2010 bankruptcy case. Citing Kane v. Nat’l Union Fire Ins. Co., 535 F.3d 380, 385 (5th Cir. 2008), Aiken proposes that only the Bankruptcy Trustee has standing to assert the breach of contract claim. Again, Aiken’s argument is without merit. 5.27 First, Aiken confuses the concepts of standing and capacity. The issue of standing focuses on whether a party has a sufficient relationship with the lawsuit so as to have a justiciable interest in its outcome, whereas the issue of capacity is conceived of as a procedural issue dealing with the personal 19 qualifications of a party to litigate. Austin Nursing Ctr., Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex. 2005). A plaintiff has standing when it is personally aggrieved, regardless of whether it is acting with legal authority; a party has capacity when it has the legal authority to act, regardless of whether it has a justiciable interest in the controversy. Id. at 848–49. Standing is a component of subject matter jurisdiction and can never be waived. Id. at 849. Unlike standing, however, “an argument that an opposing party does not have the capacity to participate in a suit can be waived.” Nootsie Ltd. v. Williamson Cnty. Appraisal Dist., 925 S.W.2d 659, 662 (Tex. 1996) (citing TEX. R. CIV. P. 93). 5.28 Here, Naylor—the named party in Aiken’s own lawsuit (as opposed to the Bankruptcy Trustee who Aiken claims has exclusive interest in 1101 Durham)—is personally aggrieved by Aiken’s attempt to swindle her out of her property. Thus, Aiken for the first time raises only an issue of capacity—not an issue of standing. Because he raises this argument for the first time on appeal, it is waived. Nine Greenway Ltd. v. Heard, Goggan, Blair & Williams, 875 S.W.2d 784, 787 (Tex. App.—Houston [1st Dist.] 1994, writ denied) (“A party who fails to raise the issue of capacity through a verified plea waives that issue at trial and on appeal.”). 20 5.29 Even if Aiken’s argument raises an issue of standing, which it does not, Aiken’s own evidence demonstrates Naylor plainly listed the 1101 Durham and the purchase money loan thereon on Schedules A and D, respectively, of her Bankruptcy Petition Schedules. CR 212, 223. Further, 1101 Durham is property exempted from the Bankruptcy Estate pursuant to title 11, section 522(b)(2) of the United States Code. CR 219; 11 U.S.C. § 522(b)(2) (2012). Thus, this property is not part of the Bankruptcy Estate and not subject to the control of the Bankruptcy Trustee. Second, with regard to the Note, Naylor makes no attempt to enforce the Note against Aiken in these proceedings or otherwise, and therefore, whether the Note (assuming it is enforceable) was listed on the bankruptcy schedules is moot. Third, Aiken is estopped from arguing the lease agreement should have been listed on the bankruptcy schedules by his own live pleadings and arguments, which plainly assert the LWOP is worthless. Cf. Lopez v Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 864 (Tex. 2000) (“Quasi-estoppel precludes a party from asserting, to another's disadvantage, a right inconsistent with a position previously taken.”). Specifically, Aiken’s live pleadings state Aiken “continued to mistakenly make payments” on the property after April 2009. CR 28 (emphasis added). Further, Aiken calls the LWOP “a legal fiction” that “no longer exists . . . .” CR 158. In other words, Aiken himself admits the LWOP asset is worthless. For 21 Aiken to now assert for the first time that Naylor lacks standing based on alleged facts he himself previously denied—namely, that the LWOP has value—spits in the face of justice and puts Naylor at a disadvantage and, therefore, must be precluded by estoppel.4 For these reasons, Naylor should not be denied standing to assert her breach of contract claim against Aiken. 5.30 Alternatively, as discussed above, there was no asset to disclose at the time Naylor filed her bankruptcy because the LWOP terminated by its own terms in 2009 prior to the filing of the bankruptcy case in 2010. 5.31 Alternatively, even if there was an asset to disclose, the issue was resolved when, in December 2013, Naylor re-opened her bankruptcy case and disclosed the literally worthless “asset.” See Exhibit A at 5.5 Specifically, her bankruptcy records reflect a voluntary reopening of her bankruptcy case, an amended filing disclosing the LWOP agreement only in “an abundance of caution,” and a subsequent closing of the bankruptcy proceedings without any 4 The record is void of any evidence showing that, at the time Naylor filed for bankruptcy, she was receiving rental payments from Aiken. In any event, Naylor has not sought recovery of past rents knowing such a claim is void of value, and therefore, whether Naylor listed the rental payments on her bankruptcy schedules is moot. 5 Again, Naylor asks this Court to take judicial notice of the balance of the records from her bankruptcy proceedings, Cause No. 10-12009 filed in the United States Bankruptcy Court, Western District of Texas, Austin Division, which Naylor filed prior to Aiken ever raising an issue of standing. In re R.A., 417 S.W.3d 569, 576 (Tex. App.—El Paso 2013, no pet.) (generally, appellate courts take judicial notice of facts outside the record only to determine jurisdiction). 22 substantive action taken by that Court or the Bankruptcy Trustee. More specifically, Naylor’s amended filing in that matter describes the asset as follows: Expired Lease with an option to purchase with John Thomas Aiken in the form of a "Wally Wrap" dated April 30, 2004. Contract expired by its own terms on April 30, 2009 as Aiken was unable to obtain his own financing as required by the terms of the contract prior to that time. Aiken was also in default as he had missed several payments on the property prior to that time. Although this contract expired by its own terms well prior to the filing of this case and is therefore valueless and unenforceable, it is listed here out of an abundance of caution. The real property subject to this expired lease is now owned entirely by Debtor. Debtor may have a possible claim against Aiken for the missed payments, but since so much time had passed between the expiration of the contract and the filing of the case, Debtor considers this claim to be valueless, too. See Exhibit A. Thus, contrary to Aiken’s position, the asset was disclosed even though all parties—including Aiken—agreed it was worthless. 5.32 Alternatively, even if Naylor did not have standing to assert the breach of contract claim in her original counterclaims, filed November 13, 2013, she certainly had standing after her bankruptcy schedules were amended December 18, 2013, and the bankruptcy case re-closed January 23, 2014. To be sure, on March 19, 2014, Naylor reasserted her breach of contract claim by filing her First Amended Counterclaim. CR 108. 5.33 Alternatively, there is at best a fact issue with regard Naylor’s standing to sue for breach of contract on the LWOP, and this Court should remand 23 this sole issue to the trial court to make findings of fact regarding Naylor’s capacity to file suit and otherwise affirm the judgment of the trial court. 24 CONCLUSION AND PRAYER For the reasons stated above, Appellee respectfully requests that this Court (1) affirm the trial court’s Final Judgment, including the trial court’s awards of attorneys’ fees, and (2) grant Appellee such other and further relief, either at law or in equity, to which she is entitled. Respectfully submitted, /s/ Russell Frost Russell Frost State Bar No. 24063687 Law Office of Russell Frost 711 West 7th Street Austin, Texas 78701 Tel: (512) 225-5590 Fax: (512) 692-2895 rfrost@russellfrostlaw.com ATTORNEY FOR APPELLEE ANGELIQUE S. NAYLOR 25 CERTIFICATE OF COMPLIANCE I hereby certify that Appellee’s Brief complies with the word count limit of Texas Rule of Appellate Procedure 9.4(i)(2)(B). Excluding the contents listed in Texas Rule of Appellate Procedure 9.4(i)(1), this Brief contains 5481 words, as counted by Microsoft Word. /s/ Russell Frost Russell Frost 26 CERTIFICATE OF SERVICE This is to certify that on the 30th day of January, 2015, a true and correct copy of the above and foregoing was forwarded to all counsel of record in accordance with the Texas Rules of Civil and Appellate Procedure: WILLIAM B. GAMMON, SBN: 07611280 KARLA HUERTAS, SBN: 24087765 GAMMON LAW OFFICE, PLLC. COUNSEL FOR APPELLANT 1201 Spyglass Drive, Suite 100 Austin, Texas 78746 Phone: 512-444-4529 Fax: 512-545-4279 /s/ Russell Frost Russell Frost 27