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Opinion issued April 13, 2007
Court of Appeals
First District of Texas
CHOICE PERSONNEL NO. FOUR, INC., and CHOICE ACQUISITIONS NO. THREE, INC., Appellants
1715 JOHANNA SQUARE LIMITED, J&B GILMORE MANAGEMENT L.L.C., J&B RICHMORE MANAGEMENT L.L.C., Appellees
On Appeal from the 125th District Court
Harris County, Texas
Trial Court Cause No. 2003-55286
This is the third appeal concerning a dispute over title to property (1) purchased at a foreclosure sale in 1999. (2) Appellants, Choice Personnel No. Four, Inc. and Choice Acquisitions No. Three, Inc. (the Choice Companies), appeal the trial court's order that granted summary judgment in favor of appellees 1715 Johanna Square Limited, J&B Gilmore Management, L.L.C., and J&B Richmore Management, L.L.C. (the Purchasers). (3) The trial court ordered that the Choice Companies take nothing and denied any determinations or declarations regarding the property, in their claims for trespass to try title, "accounting," and actual and punitive damages.
In five issues on appeal, the Choice Companies contend that the Purchasers did not produce sufficient evidence to merit summary judgment because (1) fact issues exist as to the validity of the Purchasers' title, and therefore the Purchasers have not proved their affirmative defense of limitations as a matter of law; (2) collateral estoppel and res judicata are inapplicable to this case because there is no identity of parties with previous litigation; (3) the summary judgment evidence does not show when the Choice Companies should have learned of their conversion claim, and under the discovery rule the Purchasers cannot prove as a matter of law their affirmative defense of limitations as to the Choice Companies' conversion claim; (4) the summary judgment order does not dispose of all parties to the case, and therefore is not a final judgment; and (5) the Purchasers have not proved as a matter of law their pleaded defenses of laches, waiver, and estoppel. (4)
We conclude that the trial court's judgment disposed of all parties and all claims, and that we have jurisdiction over this appeal. We also conclude that the trial court properly rendered summary judgment on the grounds of limitations as to both the trespass to try title and conversion claims. We do not reach appellants' remaining issues. We affirm.
On or about November 1, 1988, Investment Choices Corporation (Investment) (5) purchased the property from Johanna Square Company, Ltd. via warranty deed with a promissory note secured by a Deed of Trust executed by David A. Newman as president of Investment. In the event of default, the Deed of Trust authorized the trustee or his substitute or successor to sell the property at a non-judicial foreclosure sale. Both documents were recorded in the Harris County property records on November 8, 1988.
About a week following its purchase of the property, Investment, acting through Dov Avni Kaminetzky, conveyed half of its interest in the property to Howard Weiss. In December 1988, Investment, again through Kaminetzky, conveyed its remaining one-half interest in the property to Kaminetzky's wife. In February 1989, Kaminetzky's wife and Weiss each conveyed their ownership in the property to Choice Acquisitions. (6) These conveyances were expressly made subject to the Deed of Trust.
In December 1990, Choice Acquisitions entered into a "Notice of Settlement of Disputes" over the property. The Notice recited that Newman had committed "certain infractions," and that Newman "had no corporate authority" to execute the note or deed of trust. However, the Notice and its accompanying exhibits acknowledged the validity and continuing superiority of the original note.
In September 1992, Investment and Choice Acquisitions entered into a "Second Modification and Extension of Real Estate Note and Liens" with Johanna Square Co., Ltd. This document was signed by Kaminetzky as President of Investment and Choice Acquisitions. It also expressly acknowledged the Deed of Trust.
John Gilmore and Herbert Richardson acquired the property on August 3, 1999, at a non-judicial foreclosure sale conducted by substitute trustee. The Substitute Trustee's Deed, executed the same day, recited that Berfal Properties, Inc. was the holder and assignee of the Deed of Trust, and all prerequisites required by law or by the Deed of Trust were fully satisfied.
After the foreclosure sale, Choice Acquisitions executed a special warranty deed (7) purporting to convey a one-third interest in the property, all rental activities, and all detachable and personal property to Choice Personnel by and through Kaminetzky acting as (1) president of Choice Personnel, (2) co-owner of the property, and (3) "assignee of causes of action against 'Johanna Square Co., Ltd.,['] the prior lender on this project, its successors, transferees and assigns." Kaminetzky signed the deed as "Individual Grantee/Assignee and as authorized corporate representative of [Choice Personnel]." The document was ratified by Choice Acquisitions and by Kaminetzky in his capacity as president and CEO of Choice Personnel on August 3, 1999, the date of the foreclosure sale. The document was filed on August 20, 1999.
Also on August 20, Richardson and Gilmore filed suit against Kaminetzky, Investment, and Hi-Noi Corporation, alleging interference with title and ownership of the property. Richardson and Gilmore filed their Special Warranty Deed that same day. Richardson and Gilmore obtained summary judgment against Investment, and final judgment as to all parties in February 2000. The judgment permanently enjoined Kaminetzky and any corporation or entity directly or indirectly controlled by him from attempting to exclude Gilmore and Richardson from possession of the property and from causing any further documents pertaining to the property to be filed in the real property records of Harris County. We affirmed the judgment of the trial court. Kaminetzky v. Richardson, No. 01-00-00575-CV, 2003 WL 21470396 (Tex. App.--Houston [1st Dist.] June 26, 2003, pet. denied) (mem. op.).
Gilmore and Richardson conveyed the property to their partnership, 1715 Johanna Square Ltd., by Special Warranty Deed in October 2001 in a document filed in the Harris County property records in November 2001. This lawsuit was filed on October 2, 2003, by the Choice Companies against the Purchasers. The Choice Companies sought a declaration that they were record owners of the property and all appliances located on the property, a declaration that liens that the Purchasers had placed on the property were invalid, reimbursement for rents collected, court costs, and attorney's fees, and $10,000,000 in punitive damages.
Two months later, Kaminetzky filed a "Notice of Disaffirmation of Debt" in the property records of Harris County, apparently in violation of the February 2000 injunction. In that document, Kaminetzky asserted that (1) Newman did not have authority to execute the original Deed of Trust on behalf of Investment; (2) Investment could not legally conduct business in Texas at any time before November 10, 1988; and (3) the Second Modification was never ratified or approved by Investment's board of directors.
In their second amended petition filed on January 27, 2004, the Choice Companies added Kaminetzky and Hi-Noi Corporation as defendants, seeking a declaration that their title was superior to Kaminetzky's. The Choice Companies did not seek any specific relief against Hi-Noi. Kamintezky filed an answer on behalf of himself and Hi-Noi as "assignee of record of affirmative causes of action, rights of recovery and defenses [related to the property]" of Hi-Noi, Investment, Weiss, and two other corporations.
In December 2004, the Choice Companies sued Richardson and Gilmore in the 113th Judicial District Court in Harris County asking the trial court to declare that Richardson and Gilmore never had any valid, legal ownership of the property and to invalidate any conveyances of the property. Choice Personnel No. Four, Inc. v. Richardson, 14-05-00675-CV, 2006 WL 2074681 at *1 (Tex. App.--Houston [14th Dist.] July 27, 2006, pet. denied) (mem. op.) The trial court granted summary judgment in favor of Richardson and Gilmore on the grounds that the causes of action were time-barred, and barred on the alternative grounds of res judicata and collateral estoppel. Id. at *2. The Fourteenth Court of Appeals affirmed the summary judgment on the statute of limitations ground. Id. at *7.
Just as the defendants did in the 113th District Court, here, the Purchasers moved for summary judgment on the grounds of limitations, collateral estoppel, and res judicata. Also, just like the 113th District Court, the trial court here rendered summary judgment against the Choice Companies. The trial court issued its order granting summary judgment on April 21, 2005, and ordered the Purchasers to prepare a judgment reflecting that order. On May 26, 2005, the trial court signed a judgment ordering that
Plaintiffs take nothing by their suit . . . and that their requests for determinations and/or declarations regarding title to the property identified in their pleadings . . . are denied.
The Court further orders that Dov Avni Kaminetzky, cross-plaintiff in this suit, take nothing by way of his claims against the other parties, that judgment be entered against him, and that his claims for determinations and/or declarations regarding title to the Property are denied.
The Court denies all relief not granted in this judgment.The trial court did not state the grounds for its judgment.
In their fourth issue, the Choice Companies contend that the trial court's May 26 order granting summary judgment against them was not a final judgment because it did not dispose of their claims against Hi-Noi Corporation.
As a general rule, appeal may be taken only from a final judgment or order. Lehmann v. Har-Con Corp., 39 S.W.3d 191, 195 (Tex. 2001). A summary judgment order that does not dispose of all parties and issues is not appealable. Id. However, a judgment need not recite the names of all parties or claims; the language of a summary judgment order cannot render the order interlocutory and unappealable when, on the record, it is a final disposition of the case. Id. at 200.
The trial court's order and judgment of April 21, 2005, and May 26, 2005, do not mention Hi-Noi by name. However, the order on its face disposes of all of the plaintiffs' claims. The trial court ordered (1) that the Choice Companies "take nothing . . . [and] that judgment be entered against them," and (2) that "their requests for determinations and/or declarations regarding title to the property . . . are denied." All of the Choice Companies' claims for damages and "accounting" were contingent on the trespass to try title action that the trial court denied.
The Choice Companies' live pleadings merely sought a declaration that the Choice Companies' title was superior to Hi-Noi's title. No damages were sought from Hi-Noi. The trial court's judgment plainly states that it is denying the Choice Companies' requests for determinations or declarations of title.
We hold that the trial court's summary judgment order was a final judgment that disposed of all parties and all claims, and that we have jurisdiction over this appeal. We overrule the Choice Companies' fourth issue.
In their first issue, the Choice Companies assert that the trial court erred by rendering summary judgment against them on the grounds that their claims were barred by the statutes of limitations.
A. Standard of Review
We review de novo a trial court's order granting summary judgment. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). In conducting our review, we resolve all doubts in favor of the nonmovant. See Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003).
When, as here, a summary judgment does not specify the grounds on which it was granted, we will affirm the judgment if any one of the grounds advanced in the motion is meritorious. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 157 (Tex. 2004). The Purchasersmoved for summary judgment on the affirmative defenses of limitations, collateral estoppel, and res judicata. A defendant may prevail on a motion for summary judgment by conclusively proving that no genuine issue of material fact exists as to any element of a defendant's affirmative defense, and that the defendant is therefore entitled to prevail as a matter of law. See Science Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997).
B. Validity of Title
Here, as in the lawsuit affirmed by the Fourteenth Court of Appeals, the Choice Companies challenge the 1999 foreclosure sale to Gilmore and Richardson and the Deed of Trust on which that sale was based. The only apparent difference between the challenges to the 1999 foreclosure sale presented to this Court and to the Fourteenth Court of Appeals is that the defendants here are Gilmore and Richardson's successors in interest--1715 Johanna Square, Ltd. and the J & B Companies--instead of Gilmore and Richardson themselves.
A foreclosure sale under a valid deed of trust has the effect of passing all right, title, and interest that the mortgagor held at the time the deed of trust was executed, free and clear of the rights of any subsequent purchaser. Motel Enters, Inc. v. Nobani, 784 S.W.2d 545, 547 (Tex. App.--Houston [1st Dist.] 1990, no writ) (citing Hampshire v. Greeves, 143 S.W. 147, 150 (Tex. 1912)). If the Deed of Trust executed by Investment is valid, and if the foreclosure sale was valid, then all title in the property passed to Gilmore and Richardson, appellees in the case before the Fourteenth Court of Appeals. Gilmore and Richardson subsequently conveyed the property to the Purchasers, the appellees in this case. The Purchasers likewise may rely on limitations as a defense, basing their limitations period on the conveyance to Gilmore and Richardson. See Tex. Civ. Prac. & Rem. Code Ann. §16.023 (Vernon 2002) (adverse possession continues so long as there is privity of estate).
1. Deed of Trust
The summary judgment evidence establishes that soon after it purchased the property in 1988, Investment conveyed the property subject to the Deed of Trust. Regardless of whether Newman acted without authority by entering into the Deed of Trust, Investment ratified the transaction by its subsequent conveyances. See Zieben v. Platt, 786 S.W.2d 797, 802 (Tex. App.--Houston [14th Dist.] 1990, no writ) ("Ratification occurs when a party recognizes the validity of a contract by acting under it, performing under it or affirmatively acknowledging it."). Investment's successors in interest likewise recognized the existence and validity of the Deed of Trust in their conveyances of the property to Choice Acquisitions. Like the Fourteenth Court of Appeals in the related case, we hold that the Deed of Trust was a valid instrument securing the note made by Investment.
2. Quitclaim Deed
The Choice Companies' claim that the Substitute Trustee's Deed by which Gilmore and Richardson took title to the property is a quitclaim deed, and therefore not "title or color of title" for the purposes of adverse possession. See Rogers v. Ricane Enters., Inc., 884 S.W.2d 763, 769 (Tex. 1994) (holding that quitclaim deed does not establish title in those holding deed, but only passes interest of grantor). The Choice Companies contend that the challenged deeds contain waivers of warranty of title, rendering them quitclaim deeds. See id.
The Fourteenth court reviewed this claim, and concluded that taken as a whole, the Substitute Trustee's Deed conveyed the property, and not merely the grantor's rights. Choice Personnel, 2006 WL 2074681 at *4-*5. We agree.
To determine whether an instrument is a quitclaim deed, we look to whether the language of the instrument, taken as a whole, conveyed the property or merely the grantor's rights in the property. Geodyne Energy Income Prod. P'ship I-E v. Newton Corp., 161 S.W.3d 482, 486-87 (Tex. 2005) (holding that assignment and bill of sale that expressly disclaimed warranty of title and purported to convey "Assignor's right, title, and interest in and to the property" was quitclaim deed). A deed that is unambiguous is construed as a matter of law. See J. Hiram Moore, Ltd. v. Greer, 172 S.W.3d 609, 613 (Tex. 2005). The Substitute Trustee's Deed states that the substitute trustee
has GRANTED, SOLD and CONVEYED the Subject Property, and by these presents does GRANT, SELL and CONVEY the Subject Property, unto Purchaser . . . .
This conveyance is made, and Grantee hereby agrees to accept and by its acceptance of the Deed Grantee does hereby accept the Subject Property in its "AS IS" condition, subject to all restrictions, covenants, conditions, liens, encumbrances, reservations, easements, and other exceptions to title, if any, relating to the Subject Property . . . any and all warranties, whether expressed or implied, and whether of merchantability, habitability or fitness of purpose, are expressly waived by Purchaser.
TO HAVE AND TO HOLD the Subject Property, together with the rights, privileges and appurtenances thereto belonging, unto Purchaser . . . . And Substitute Trustee does hereby bind Debtor and Debtor's successors to warrant and forever defend the Subject Property unto Purchaser . . . against the claim or claims of all persons claiming or to claim the same or any part thereof.
The Choice Companies contend that we should view in isolation the as-is language in the Substitute Trustee's Deed. The as-is paragraph, like the rest of the deed, evidences a transfer of the "Subject Property." A quitclaim deed transfers the grantor's interest in the property, not the property itself. See Ricane, 884 S.W.2d at 769. Taking the recitations in the Substitute Trustee's Deed as a whole, the Substitute Trustee's Deed conveyed the property, and not merely rights in the property. See Geodyne Energy, 161 S.W.3d at 486-87; Roswurm v. Sinclair Prairie Oil Co., 181 S.W.2d 736, 743 (Tex. App.--Fort Worth 1944, writ ref'd w.o.m.). We conclude, as did the Fourteenth Court of Appeals, that the Substitute Trustee's Deed is not a quitclaim deed. (8)
3. Recitals of the Substitute Trustee's Deed
The Choice Companies assert that the foreclosure sale was invalid because Substitute Trustee's Deed does not mention that any borrower had defaulted, and the Purchasers did not produce evidence that Berfal Properties owned the note on which it foreclosed. The Fourteenth Court of Appeals considered this assertion, and concluded that the recitals in the Substitute Trustee's Deed constituted prima facie evidence of the validity of the foreclosure sale. Choice Personnel, 2006 WL 2074681 at *5. We agree with the Fourteenth Court of Appeals. Recitals in a deed are presumed correct, unless rebutted by competent evidence. Deposit Ins. Bridge Bank, N.A., Dallas v. McQueen, 804 S.W.2d 264, 266 (Tex. App.--Houston [1st Dist.] 1991, no writ). The Purchasers produced the Substitute Trustee's Deed entered into by Gilmore and Richardson, which states that Berfal Properties owns the note and that all prerequisites to the foreclosure sale were satisfied. The Fourteenth Court of Appeals correctly noted that Choice Companies offered no competent evidence to rebut the presumption that these recitals are correct. Choice Personnel, 2006 WL 2074681 at *5. We conclude, as did the Fourteenth Court of Appeals, that production of the Substitute Trustee's Deed was sufficient evidence that Berfal Properties owned the note and that Investment was in default. See id.
The Fourteenth Court of Appeals reviewed facts and arguments that are virtually identical to those before us today and affirmed the summary judgment of the 113th Judicial District Court in favor of the Purchaser's predecessors in interest. We agree with the conclusions of the Fourteenth Court of Appeals. We conclude that the summary judgment evidence establishes that the Purchasers held the property under title or color of title that began in August 1999. Because the Choice Companies failed to bring their trespass to try title suit within three years of their cause of action accruing, that suit is barred by the statute of limitations.
We overrule the Choice Companies' first issue.
C. Conversion Claim
In their third issue, the Choice Companies assert that their claim in conversion is not time-barred because the Purchasers failed to plead at what time the Choice Companies should have discovered the conversion. The two-year limitation for a conversion claim begins to run at the time of the allegedly unlawful taking. Tex. Civ. Prac. & Rem. Code Ann. § 16.003 (Vernon Supp. 2006) (two-year statute of limitations); Rogers v. Ricane Enters., Inc., 930 S.W.2d 157, 166 (Tex. App.--Amarillo 1996, writ denied). Gilmore and Richardson took possession of the property and any chattels on the premises on August 3, 1999, thus accomplishing any conversion that may have taken place. The Choice Companies filed suit in October 2003. Because more than two years passed between the alleged conversion and the filing of suit, any claims that the Choice Companies may have had would be barred by the statute of limitations.
The Choice Companies contend that the discovery rule tolls the statute of limitations on the Choice Companies' conversion claim. For the discovery rule to apply, the complained-of injury must be inherently undiscoverable--"by its nature, unlikely to be discovered within the prescribed limitations period despite due diligence." VIA Net v. TIG Ins. Co., 211 S.W.3d 310, 313 (Tex. 2006). Gilmore and Richardson recorded their acquisition of the property on August 20, 1999, and began to operate the apartment complex on the property, including the personalty which the Choice Companies allege was converted. Even if the Choice Companies lacked actual notice of the alleged conversion, we conclude that they could have discovered their cause of action by the due diligence of visiting the property or examining the Harris County property records. We hold that the alleged wrong was not inherently undiscoverable within the limitations period. See HECI Exploration Co. v. Neel, 982 S.W.2d 881, 886-87 (Tex. 1998) (holding that records of Railroad Commission, while not necessarily constructive notice, were "publicly available" and cause of action relating to those records was not inherently undiscoverable). The discovery rule therefore does not apply to this case. (9)
We overrule the Choice Companies' third issue.
We hold that the present appeal is from a final judgment, and therefore properly before this Court. We further hold that the Purchasers' affirmative defense of limitations asserted in their motion for summary judgment was meritorious. We do not reach the Choice Companies' remaining issues.
We affirm the judgment of the trial court.
Panel consists of Justices Taft, Alcala, and Hanks.
1. The property is described as "Lot 7, Block 8, Hillendahl Acres, an addition in Harris County, Texas, according to the map thereof recorded in Volume 18, Page 17, of the map records of Harris County Texas."
2. Kaminetzky v. Richardson, 01-00-00575-CV, 2003 WL 21470396, *1 (Tex. App.--Houston [1st Dist.] June 26, 2003, pet. denied) (mem. op.); Choice Personnel No. Four, Inc. v. Richardson, 14-05-00675-CV, 2006 WL 2074681 (Tex. App.--Houston [14th Dist] July 27, 2006, pet. denied) (mem. op.).
3. Dov Avni Kaminetzky was a defendant and cross-plaintiff in the trial court. He filed a notice of appeal of the trial court's summary judgment order, but has not filed an appellant's brief with this Court. Kaminetzky's motion to dismiss his appeal was filed on March 26, 2007. Pursuant to Rule 42.1(a) of the Rules of Appellate Procedure, we grant his motion and dismiss his appeal. Tex. R. App. P. 42.1(a)(1).
4. In their appellant's brief, the Choice plaintiffs present a list of "ISSUES PRESENTED FOR REVIEW" that do not directly correspond to the arguments asserted in their brief. These issues are:
1) Is a party who files a motion for summary judgment without evidence to support the motion entitled to summary judgment?
2) Can someone who purchases real property at a non-judicial foreclosure in the state of Texas receive ownership of the property when the party being foreclosed on had no interest in the property at the time of foreclosure?
3) Can a purchaser at a non-judicial foreclosure sale in the state of Texas receive ownership of real property even though the property is owned by entities whose ownership of the property is recorded in the real property records of the county in which the foreclosure took place?
4) Can someone who purchased real property at a non-judicial foreclosure sale receive title to the property when the deed of trust foreclosed upon is void?
5) Can an entity who is conveyed property from a purchaser at a void non judicial foreclosure sale receive any valid title to the property when the entity to whom the property is conveyed is owned and controlled by the purchaser at the non-judicial foreclosure sale?
6) Can a mortgagee foreclose on a deed of trust if the mortgagor did not default on the terms of the deed of trust?
7) If a substitute trustee's deed expressly disclaims all warranties of title to real property, does the an [sic] entity who receives a deed from the grantee of such a deed have any evidence of title to the property which is purportedly conveyed in that deed?
8) Is the three year statute of limitations for adverse possession applicable when the parties claiming adverse possession do not have any evidence of title or color of title to the property which they are claiming under adverse possession?
9) Can a defendant in a trespass to try title suit rely on the affirmative defense of latches [sic] when the plaintiff's claim is based on legal title?
10) Can the affirmative defense of waiver be used against parties who did not waive any of their rights?
11) Can the affirmative defense of estoppel be used against a party that did not misrepresented [sic] anything?
12) Can the affirmative defense of res judicata be used against a party who was not a party in the prior lawsuit and was not in privity with any of the parties in the prior lawsuit?
13) Can the affirmative defense of collateral estoppel be used against a party who was not a party in the prior lawsuit and was not in privity with any of the parties in the prior lawsuit?
14) Can the affirmative defense of res judicata be used against a party without showing that the party knew about the prior lawsuit?
15) Can the affirmative defense of collateral estoppel be used against a party without showing that the party knew about the prior lawsuit?
16) If a judgment entered by a court does not dispose of all of the issues and parties in the case, is it a final judgment?
To the extent that these issues are not reflected in the issues which appellants actually
briefed and argued, they are overruled as inadequately briefed. See Tex. R. App. P.
5. At some point before the filing of the present lawsuit, Investment Choices
Corporation changed its name to Investment Performance Corporation f/k/a
Investment Choices Corporation. For clarity, we will refer to it throughout as
6. Each of these conveyances was made via warranty deed, and all were recorded in
August 1990. The conveyance from Kaminetzky's wife was executed by Kaminetzky
as her attorney-in-fact.
7. By its terms, the conveyance was effective at 5:00 p.m. on the day of the foreclosure
sale, necessarily taking effect after the sale. See Tex. Prop. Code Ann. § 51.002(a)
(Vernon 2007) (a public auction of real property under a deed of trust must be held
between 10:00 a.m. and 4:00 p.m.).
8. Because we have concluded above that the running of the Purchasers' limitations
period depends on the conveyance to Gilmore and Richardson, we do not reach the
Choice Companies' assertion that the Purchasers' Special Warranty Deed is a
9. A party seeking to avail itself of the discovery rule must plead the rule. Woods v.
William M. Mercer, Inc., 769 S.W.2d 515, 518 (Tex. 1988). The discovery rule was
raised in the Choice Companies' pleadings only as to Choice Personnel.
5. At some point before the filing of the present lawsuit, Investment Choices Corporation changed its name to Investment Performance Corporation f/k/a Investment Choices Corporation. For clarity, we will refer to it throughout as Investment.
6. Each of these conveyances was made via warranty deed, and all were recorded in August 1990. The conveyance from Kaminetzky's wife was executed by Kaminetzky as her attorney-in-fact.
7. By its terms, the conveyance was effective at 5:00 p.m. on the day of the foreclosure sale, necessarily taking effect after the sale. See Tex. Prop. Code Ann. § 51.002(a) (Vernon 2007) (a public auction of real property under a deed of trust must be held between 10:00 a.m. and 4:00 p.m.).
8. Because we have concluded above that the running of the Purchasers' limitations period depends on the conveyance to Gilmore and Richardson, we do not reach the Choice Companies' assertion that the Purchasers' Special Warranty Deed is a quitclaim.
9. A party seeking to avail itself of the discovery rule must plead the rule. Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 518 (Tex. 1988). The discovery rule was raised in the Choice Companies' pleadings only as to Choice Personnel.Because we have held that the discovery rule does not apply to the Choice Companies' cause of action, we do not address their failure to plead the rule as to Choice Acquisitions.