Opinion issued March = 26,=20 2009
![](3D"http://www.1stcoa.courts.state.tx.us/opinions/070096f/seal.gif"=20)
For=20 The
ALLON R. =
HAHN,=20
INDIVIDUALLY AND D/B/A HAHN'S GULF SERVICE,=20
Appellant BERTRAND =
R. LOVE,=20
Appellee
On =
Appeal from the=20
157th District Court Harris =
County,=20
Texas Trial =
Court Cause=20
No. 2004-40554-A
O P I N =
I O=20
N We withdraw our November 6, =
2008 opinion=20
and judgment and issue the following in its stead. See =
Tex. R.=20
App. P. 50. Appellee Bertrand R. Love, the =
purchaser=20
of a property located in Harris County, Texas, intervened in a =
lawsuit=20
between appellant, Allon R. Hahn, individually and d/b/a Hahn's =
Gulf=20
Service (collectively, "Hahn"), and Mid-Town Roofing and =
Construction,=20
Inc. ("Mid-Town"), seeking to enjoin Hahn from carrying out an =
execution=20
sale on the property to satisfy a judgment lien against a =
third-party,=20
O'Neal Session, and to remove Hahn's claims as a cloud on the =
title. We reverse and =
remand. On October 20, 1988, Hahn won a =
judgment=20
against O'Neal Session, C.J. Foreman, and Roofs by C.J., jointly =
and=20
severally, for $77,136.05 plus interest. On April 16, 1992, Hahn =
filed an=20
abstract of judgment, but the defendants in the 1988 judgment had =
no=20
assets to seize at that time. Then, in August 2001, the property =
that is=20
the subject of this suit was conveyed to O'Neal Session. On April 26, 2002, ten days =
after Hahn's=20
judgment lien expired, Session purportedly conveyed the property =
to=20
Mid-Town, an entity that Hahn contends is owned and operated by =
members of=20
Session's immediate family, specifically Pamela Session and =
Toshoner=20
Session Egans. This transfer was not recorded until January=20
2004. In August 2003, after =
the=20
purported execution of the 2002 deed conveying the property to =
Mid-Town,=20
O'Neal Session and his wife Myria entered into a contract to sell =
the=20
property to Walter Strickland for $350,000. Real estate broker =
Herman Gary=20
was involved in this deal on behalf of Strickland, the purchaser. =
The deal=20
to sell the property to Strickland fell through on December 2, =
2003, when=20
Fidelity National Title Company sent the title commitment to =
Session and=20
Strickland and requested payoff of Hahn's judgment lien and the =
Sessions=20
refused to pay the amount of the judgment lien from the=20
proceeds. On December 10, 2003, Hahn =
filed a motion=20
to revive his judgment against Session and sent notice of the =
hearing to=20
the Sessions. On January 7, the Sessions and =
Strickland=20
signed another earnest money contract to convey the property to =
Strickland=20
for $450,000 and delivered the contract to American Title for =
closing.=20
This time, Gary acted as broker on behalf of the Sessions. =
On January 21, 2004, a General =
Warranty=20
Deed reflecting the conveyance of the property from Session to =
Mid-Town on=20
April 26, 2002 was recorded (the "2002 deed"). That deed lacked a =
metes=20
and bounds description of the property. Two days later, on January 23, =
2004,=20
following a hearing, Hahn obtained an order for the revival of his =
1988=20
judgment against O'Neal Session, C.J. Foreman, and Roofs by C.J.=20
(4) Hahn's lawyer testified by affidavit: I filed the motion to revive =
the judgment=20
and served scire facias on Mr. O'Neal Session by Certified Mail, =
Return=20
Receipt Requested. . . . On the date of the hearing before Judge =
Ken Wise,=20
Mr. Session, Pamela Session, and [her lawyer] appeared and asked =
the Judge=20
for more time to respond to the motion. They did not announce that =
two=20
days before they [had] recorded a deed of the subject property =
from the=20
Sessions to Mid-Town dated almost two years earlier. On March 1, 2004, Hahn filed =
for record a=20
second abstract of judgment, again listing O'Neal Session, C.J. =
Foreman,=20
and Roofs by C.J. as the judgment debtors and creating a judgment =
lien=20
against their real property. On March 3, 2004, two days =
after Hahn=20
refiled his abstract of judgment against O'Neal Session, Session =
executed=20
a correction deed to clarify the April 26, 2002 conveyance of the =
property=20
from himself to Mid-Town, which was filed on March 15, 2004. The=20
correction deed added a metes and bounds description of the=20
property. In support of his motion for =
summary=20
judgment, Love testified by affidavit that "shortly before April =
14, 2004"=20
he received a telephone call from Gary, the real estate broker who =
had=20
initially represented Strickland and then the Sessions in the two=20
attempted 2003 sales of the property by the Sessions to =
Strickland. Gary=20
indicated that the property was available for purchase and that =
Love=20
"would have to act relatively fast because the initial purchaser =
under a=20
contract could not qualify to close and the contract was about to =
expire."=20
Love further testified by affidavit that, "[a]ccording to Mr. =
Gary, if=20
[the contract expired] then the property would go back on the =
market."=20
Love testified by affidavit that, based on the success of his past =
dealings with Gary, he was interested in the investment =
opportunity and=20
that he proceeded to purchase the property. Love sent a cashier's =
check=20
for $448,587.13 to American Title Company, and Gary took the =
necessary=20
closing documents for Love to sign in New Orleans, =
Louisiana. A few days later, on April 14, =
2004, the=20
transaction closed, and Mid-Town executed a deed that conveyed the =
property to Love. This deed was recorded on April 16, =
2004. In August 2004, Hahn attempted =
to proceed=20
with an execution sale of the property to satisfy his judgment =
against=20
Session. Mid-Town sued Hahn, seeking a temporary restraining order =
and a=20
temporary and permanent injunction prohibiting the execution sale =
of the=20
property. Love intervened in the suit, seeking an injunction =
prohibiting=20
the sale of the property and seeking to remove the cloud from his =
title.=20
Hahn filed counter-claims =
against=20
Mid-Town and Love and a third-party action against Session, his =
wife Myria=20
Mae Session, and other members of the Session family, Pamela =
Session and=20
Toshoner Session Egans, seeking a declaratory judgment that he had =
a valid=20
lien against the property. Specifically, Hahn asked for a judgment =
declaring (1) that the conveyances of the property from Session to =
Mid-Town and from Mid-Town to Love were both void as fraudulent=20
conveyances under Chapter 24 of the Texas Business and Commerce =
Code; (2)=20
that the March 1, 2004 judgment lien attached to the property =
because the=20
2002 deed was void for lack of a sufficient legal description at =
the time=20
the second abstract of judgment was filed for record; and =
(3) that=20
the April 14, 2004, conveyance of the property from Mid-Town to =
Love was=20
subject to Hahn's judgment lien and to the imposition of a =
constructive=20
trust because Love was not a bona fide purchaser for value, in =
good faith,=20
and without notice of Hahn's interest in the property. Hahn also =
sought an=20
execution sale to satisfy the judgment lien and a money judgment =
for=20
assets that had been fraudulently transferred. On July 11, 2005, Love filed a =
motion for=20
summary judgment, which he supplemented on May 12, 2006. On June =
2, 2006,=20
Love filed an amended motion for summary judgment, requesting that =
the=20
trial court remove Hahn's claims as a cloud on Love's title to the =
property and that Hahn take nothing against him. Love contended =
that "no=20
judgment lien existed that attached to the Property at the time =
Love=20
acquired it" or thereafter. Rather, he contended that he took the =
property=20
by a general warranty deed from Mid-Town, which had taken the =
property in=20
2002 by a valid general warranty deed unencumbered by Hahn's =
judgment=20
lien, which had expired, and, therefore, the cloud on his title =
should be=20
removed and he should be dismissed from the suit. Love also =
claimed that=20
he was entitled as a matter of law to summary judgment on Hahn's=20
fraudulent transfer claims and to removal of the cloud from his =
title=20
because he was a bona fide purchaser of the property for value, in =
good=20
faith, and without notice under section 24.009(a) of the Texas =
Business=20
and Commerce Code Love's motion for summary =
judgment was=20
filed as both a traditional and no-evidence motion for summary =
judgment.=20
The trial court granted Love's motion for summary judgment on July =
6,=20
2006. On January 12, 2007, the trial court severed the claims =
between Hahn=20
and Love from the rest of the case, making the summary judgment in =
Love's=20
favor final and appealable. This appeal of the trial court's July =
2006=20
court order granting Love's motion for summary judgment=20
followed. Standard =
of=20
Review We review de novo the trial =
court's grant=20
of summary judgment. Provident Life & Accident Ins. Co. v. =
Knott, 128 S.W.3d 211, 215 (Tex. 2003). We must make =
inferences,=20
resolve doubts, and view the evidence in the light most favorable =
to the=20
non-movant. Rh=F4ne-Poulenc, Inc. v. Steel, 997 S.W.2d =
217, 223=20
(Tex. 1999). Love's motion for summary judgment contained both =
traditional=20
and no-evidence grounds for summary judgment. See Tex. R. =
Civ. P.=20
166a(c), (i). A traditional summary judgment =
under Rule=20
of Civil Procedure 166a(c) is properly granted only when the =
movant=20
establishes that there are no genuine issues of material fact and =
that he=20
is entitled to judgment as a matter of law. Tex. R. Civ. P. =
166a(c);=20
Knott, 128 S.W.3d at 215-16. Summary judgment is proper =
on claims=20
for which the movant is the defendant only A no-evidence summary judgment =
motion=20
asserts that no evidence exists as to at least one essential =
element of=20
the non-movant's claims on which the non-movant would have the =
burden of=20
proof at trial. Bendigo v. City of Houston, 178 S.W.3d =
112, 114=20
(Tex. App.--Houston [1st Dist.] 2005, no pet.) (citing Jackson =
v.=20
Fiesta Mart, Inc., 979 S.W.2d 68, 70-71 (Tex. =
App.--Austin=20
1998, no pet.)). The trial court must grant the motion unless the=20
non-movant produces summary judgment evidence that raises a =
genuine issue=20
of material fact. Tex. R. Civ. P. 166a(i); Southwest Elec. =
Power Co.=20
v. Grant, 73 S.W.3d 211, 215 (Tex. 2002). The movant "must be =
specific in challenging the evidentiary support for an element of =
a claim=20
or defense; paragraph (i) does not authorize conclusory motions or =
general=20
no-evidence challenges to an opponent's case." Tex. R. Civ. P. =
166a(i),=20
1997 cmt.; Mott v. Red's Safe and Lock Servs., Inc., 249 =
S.W.3d=20
90, 97 (Tex. App.--Houston [1st Dist.] 2007, no pet.). Moreover,=20
"[p]aragraph (i) does not apply to ordinary motions for summary =
judgment=20
under paragraphs (a) or (b), in which the movant must prove that =
it is=20
entitled to summary judgment by establishing each element of its =
claim or=20
defense as a matter of law." Tex. R. Civ. P. 166a(i), 1997 cmt.; =
Brown=20
v. Hearthwood II Owner's Ass'n, Inc., 201 S.W.3d 153, 157-58 =
&=20
n.7 (Tex. App.--Houston [14th Dist.] 2006, pet.=20
denied). In his amended motion =
for=20
summary judgment, Love failed to identify any specific element of =
any of=20
Hahn's claims on which Hahn had the burden of proof and had =
produced no=20
evidence. Therefore, we dismiss Love's no-evidence motion for =
summary=20
judgment as conclusory and address only his traditional motion for =
summary=20
judgment. See Tex. R. Civ. P. 166a(i), 1997 cmt.; =
Brown,=20
201 S.W.3d at 157-58 & n.7. In his=20
second and third issues, Hahn argues that Love was not entitled to =
summary=20
judgment because Love did not prove as a matter of law either (1) =
that the=20
conveyances of the property to Mid-Town and to Love were not =
fraudulent or=20
(2) that Love himself was a bona fide purchaser of the property =
for value=20
without notice and in good faith.=20
We=20
address these issues together with respect to both Hahn's =
fraudulent=20
transfer claims and Love's suit to remove the cloud from his=20
title. Love was=20
awarded summary judgment on Hahn's claims against him under the =
Fraudulent=20
Transfer Act on the ground that he was entitled to the bona fide =
purchaser=20
defense in the Act set out at section 24.009(a) of the Business =
and=20
Commerce Code. See Tex. Bus. & Com. Code Ann. =A7 =
24.009(a)=20
(Vernon 2002). Section 24.009(a) states that a "transfer or =
obligation is=20
not voidable under Section 24.005(a)(1) of this code against a =
person who=20
took in good faith and for a reasonably equivalent value or =
against any=20
subsequent transferee or obligee." Id. A =
fraudulent transfer is a transfer by a debtor with the intent to =
hinder,=20
delay, or defraud his creditors by placing the debtor's property =
beyond=20
the creditor's reach. Tex. Bus. & Com. Code Ann. =A7 =
24.005(a)(1)=20
(Vernon 2002) ("A transfer made or obligation incurred by a debtor =
is=20
fraudulent as to a creditor, whether the creditor's claim arose =
before or=20
within a reasonable time after the transfer was made or the =
obligation was=20
incurred, if the debtor made the transfer or incurred the =
obligation=20
. . . with actual intent to hinder, delay, or defraud =
any=20
creditor of the debtor."); Nobles v. Marcus, 533 S.W.2d =
923, 925=20
(Tex. 1976 The actual=20
intent to defraud is shown, among other things, by evidence that =
the=20
transfer was made to an insider, including a relative; the =
transfer was=20
concealed; the debtor was sued or threatened with suit before the =
transfer=20
and the value of the consideration received by the debtor was =
reasonably=20
equivalent to the value of the asset transferred; the debtor was=20
insolvent; and the transfer occurred shortly before or after a =
substantial=20
debt was incurred. Tex. Bus. & Com. Code Ann. =A7 24.005(b) =
(Vernon=20
2002). The facts=20
and circumstances set out in section 24.005(b) that may be =
considered in=20
determining fraudulent intent are non-exclusive and are considered =
mere=20
"badges of fraud." Flores v. Robinson Roofing & Const. =
Co.,=20
Inc., 161 S.W.3d 750, 755 (Tex. App.--Fort Worth 2005, pet. =
denied).=20
Therefore, because "'fraudulent intent is only to be deduced from =
facts=20
and circumstances which the law considers as mere badges of fraud, =
and not=20
fraud per se, these must be submitted to the trier of fact, which =
draws=20
the inference as to the fairness or fraudulent character of the=20
transaction.'" Id. (quoting Coleman Cattle Co., Inc. =
v.=20
Carpentier, 10 S.W.3d 430, 433 (Tex. App.--Beaumont 2000, no =
pet.);=20
see also Quinn v. Dupree, 157 Tex. 441, 303 S.W.3d 769, =
774=20
(1957). If intent=20
to defraud is proved, Bona=20
Fide Purchaser Defense The=20
remedies provided creditors by the Act are, however, subject to =
the=20
limitation in Section 24.009 of the Business and Commerce Code, =
providing=20
for a bona fide purchaser defense. Specifically, section 24.009(a) =
of the=20
Act states that a "transfer or obligation is not voidable under =
Section=20
24.005(a)(1) of this code against a person who took in good faith =
and for=20
a reasonably equivalent value or against any subsequent transferee =
or=20
obligee." Id. =A7 24.009(a) (Vernon 2002). Good faith is =
thus an=20
affirmative defense to a fraudulent transfer claim. =
Flores, 161=20
S.W.3d at 756. A person who invokes that affirmative defense =
"carries the=20
burden of establishing good faith and the reasonable equivalence =
of the=20
consideration obtained." Id. (quoting Uniform Fraudulent =
Transfer=20
Act =A7 8 cmt. 1, 7A II U.L.A. 352 (1999)). Thus, in seeking =
summary=20
judgment on his bona fide purchaser affirmative defense, Love had =
the=20
burden to prove as a matter of law that he took the property in =
good=20
faith. See Flores, 161 S.W.3d at 756;=20
Rhone-Poulenc, 997 S.W.2d at 223 A =
transferee who takes property with knowledge of such facts as =
would excite=20
the suspicions of a person of ordinary prudence and put him on =
inquiry of=20
the fraudulent nature of an alleged transfer does not take the =
property in=20
good faith and is not a bona fide purchaser. See Wright v. =
Lynn,=20
16 Tex. 34, 1856 WL 4851, at *5 (Tex. 1856) (holding that lack of =
good=20
faith is proved by any "competent means, which affords any fair=20
presumption or inferences as to the real object and intention of =
the=20
parties, tending to show knowledge of "the fraudulent acts and =
intentions=20
of the [transferor]"); The question of whether a party =
has=20
notice is a "question of fact which is foreclosed by the judgment =
of the=20
trier of the facts; it becomes a question of law only when there =
is no=20
room for ordinary minds to differ as to the proper conclusion to =
be drawn=20
from the evidence." O'Ferral v. Coolidge, 228 S.W.2d 146, =
148=20
(Tex. 1950). Thus a transferor's notice of fraudulent intent is a =
question=20
of fact that generally goes to the jury. See =
Wright,=20
1856 WL 4851, at *5 Application of the=20
Law The=20
evidence shows that this case is no exception to the rule that =
fraudulent=20
transfer and bona fide purchaser status are generally questions =
for the=20
trier of fact that are inappropriate for summary =
judgment. Love stated=20
in his motion for summary judgment and in his affidavit that he =
purchased=20
the property for nearly $450,000. Hahn does not dispute Love's =
summary=20
judgment evidence that Love paid a reasonably equivalent value for =
the=20
property. However, Love also had to prove that he was a purchaser =
in good=20
faith as a matter of law and was, therefore, entitled to summary =
judgment=20
on Hahn's claims. Love argues=20
that the alleged legal sufficiency of the 2002 deed proves that =
Mid-Town=20
became the true owner of the property in 2002, when there was no =
judgment=20
lien against Session attached to the property. Therefore, Love =
argues that=20
the property was clear of Hahn's lien when Session sold it to his=20
predecessor, Mid-Town, which validly conveyed it to him in April=20
2004. The only=20
evidence Love presented to prove his lack of notice of Hahn's =
claim was=20
his own affidavit. In his affidavit, Love testified that at the =
time he=20
purchased the property he did not know O'Neal Session, Pamela =
Session,=20
Toshoner Session Egans, or Hahn and did not know anything about =
Mid-Town=20
except that it was the owner of the property. Love testified, =
"Shortly=20
before April 14, 2004, I received a telephone call from Herman =
Gary.=20
Herman Gary is a local realtor in Houston who I have known for =
several=20
years. In the past I have invested in real estate in Houston and =
have=20
utilized Mr. Gary on several occasions." Gary stated "that the =
property in=20
question in this lawsuit was available for purchase and that it=20
represented a good perspective [sic] investment," and he=20
"indicated that I would have to act relatively fast because the =
initial=20
purchaser under a contract could not qualify to close and the =
contract was=20
about to expire." Love averred that he "purchased the property in =
good=20
faith, for a valuable consideration and had no knowledge of any =
claim by=20
Hahn whatsoever." However, in=20
tension with his claim in his affidavit that he "had no knowledge =
of any=20
claim by Hahn whatsoever," Love also pled in his motion for =
summary=20
judgment that Hahn had alleged that "Love's father was a close =
personal=20
friend of Herman Gary, the real estate broker, that Love had known =
Gary=20
for 20 years and that Gary brought him many deals," that he, Love, =
"had=20
loaned Gary and Strickland [the initial intended buyer of the =
property]=20
money on prior occasions" and that "Strickland bought other =
property from=20
Love on prior occasions." Love stated that because of the success =
of his=20
past dealings with Gary, he was interested in the investment =
opportunity=20
and proceeded to purchase the property by sending a cashier's =
check for=20
$448,587.13 to American Title Company--the same title company for =
the=20
attempted sale of the property to Strickland as well as to =
Love--and that=20
Gary took the necessary closing documents for Love to sign in New =
Orleans,=20
Louisiana. The Texas=20
Rules of Civil Procedure provide that a summary judgment "may be =
based on=20
uncontroverted testimonial evidence of an interested witness . . . =
if the=20
evidence is clear, positive and direct, otherwise credible and =
free from=20
contradictions and inconsistencies, and could have been readily=20
controverted." Tex. R. Civ. P. 166a(c). Love's testimony is =
"clear,=20
positive and direct," but it is not "otherwise credible and free =
from=20
contradictions and inconsistences" with regard to Love's claimed =
lack of=20
"knowledge of any claim by Hahn whatsoever." Rather, Love =
acknowledged=20
that he had past real estate deals with Gary, a realtor whom he =
had known=20
for "several" years, and he acknowledged in his motion for summary =
judgment that Hahn had claimed that Love "had loaned Gary and =
Strickland=20
(the initial intended buyer of the property) money on prior =
occasions,"=20
and that "Strickland bought other property from Love on prior =
occasions,"=20
while he also stated in his affidavit in support of that motion =
that he=20
knew from Gary that he had "to act relatively fast because the =
initial=20
purchaser under a contract could not qualify to close and the =
contract was=20
about to expire." In addition=20
to Love's own averrals regarding his relationship with both Gary =
and=20
Strickland, Hahn produced evidence of numerous facts raising an =
inference=20
of fraudulent conveyance and of Love's actual or constructive =
knowledge of=20
fraudulent intent in the transfers of the property, including the=20
following: Gary as the broker for Love, =
Strickland,=20
and Session in the three transactions necessarily had notice of =
each of=20
these facts, as well as of both attempts by Session to sell the =
property=20
to Strickland after the property was purportedly conveyed to =
Mid-Town in=20
2002, and, therefore, of Hahn's interest in the property. These =
facts, as=20
well as Love's own statements and his adoption of the facts stated =
in=20
Hahn's pleadings, are inconsistent with Love's claim that he had =
"no=20
knowledge of any claim by Hahn whatsoever," since he acknowledged =
that he=20
knew about a prior contract for the sale of the property that had =
not gone=20
through--namely, the prior contract between Session and =
Strickland, the=20
"initial purchaser"--and that he had known both the broker Gary =
and=20
Strickland for years and had done real estate deals with them and =
loaned=20
them money. The close=20
nature of Love's long-standing business relationship with Gary and =
Strickland and the nature of Gary's obligations to Love as his =
broker=20
raise fact questions as to whether Love had either actual or =
constructive=20
notice that the Sessions' conveyance of the property to Mid-Town =
was=20
fraudulent and that Mid-Town might not have a clear title to the =
property.=20
See Janes v. CPR Corp., 623 S.W.2d 733, 740 (Tex. =
App.--Houston=20
[1st Dist.] 1981, no writ) ("A broker is a fiduciary required to =
exercise=20
fidelity in good faith toward his principal in all matters within =
the=20
scope of his employment. . . . This requirement not only =
forbids=20
conduct on the part of the broker which is fraudulent or adverse =
to his=20
client's interest, but also imposes upon him the positive duty of=20
communicating all information he may possess or acquire which is, =
or may=20
be, material to his employer's advantage."). Because=20
there are fact questions both as to whether the transfer of the =
property=20
to Love was fraudulent and as to Love's actual or constructive =
notice of=20
facts and circumstances indicating the intent to defraud for =
purposes of=20
the Fraudulent Transfer Act, we hold that Love failed to establish =
his=20
entitlement to summary judgment on his bona fide purchaser =
affirmative=20
defense under section 24.009(a) of the Texas Business and Commerce =
Code.=20
We sustain Hahn's second and third issues insofar as they relate =
to Hahn's=20
fraudulent transfer claims. 2. Love's Right to =
Summary=20
Judgment on his Suit to Remove Cloud on =
Title A bona fide purchaser is =
protected under=20
Texas law against an interest in property, such as Hahn's judgment =
creditor's lien, unless the instrument was on file at the time of =
the=20
purchase. Specifically, section 13.001 of the Texas Property Code=20
states: (a) A conveyance of real =
property or an=20
interest in real property or a mortgage or deed of trust is void =
as to a=20
creditor or to a subsequent purchaser for a valuable consideration =
without=20
notice unless the instrument has been acknowledged, sworn to, or =
proved=20
and filed for record as required by law. (b) The=20
unrecorded instrument is binding on a party to the instrument, on =
the=20
party's heirs, and on a subsequent purchaser who does not pay a =
valuable=20
consideration or who has notice of the instrument. Tex. Prop. Code Ann. =A7 =
13.001(a), (b)=20
(Vernon 2004). The=20
principal issue in a suit to remove a cloud from a title, or a =
suit to=20
quiet title, is the existence of a cloud that equity will remove.=20
Johnson, 2006 WL 1653656, at *4; Bell, =
606=20
S.W.2d at 952-53. An action to remove a cloud from title exists =
"to enable=20
the holder of the feeblest equity to remove from his way to legal =
title=20
any unlawful hindrance having the appearance of better right."=20
Bell, 606 S.W.2d at 952 (quoting Thomson v.=20
Locke, 1 S.W. 112, 115 (Tex. 1886)). Love argues=20
that he is entitled to summary judgment removing the cloud from =
his title=20
because he has proved as a matter of law that there was no lien on =
the=20
property when it was validly conveyed to his transferor Midtown by =
general=20
warranty deed in 2002 and, therefore, the property was free of =
Hahn's lien=20
when Love purchased the property from Mid-Town in April 2004. =
Thus, Love=20
had no notice of a valid lien on the property. Here, a=20
title search of the property would have indicated the nature of =
the=20
conveyance from the Sessions to Mid-Town. See First S. Props., =
Inc. v.=20
Vallone, 533 S.W.2d 339, 340 (Tex. 1976) (outlining =
appellant's title=20
search as including "a courthouse search of the grantor-grantee =
indices,=20
deed of trust records, lis pendens records, abstract of judgment =
records,=20
mechanic's and materialman's lien records, and the federal =
bankruptcy=20
records, and a search of indices to the same records at [a Houston =
title=20
company]"). The chain of title clearly reflected the Sessions' =
conveyance=20
of the property to Mid-Town in 2002--a conveyance that several =
title=20
searches indicated was of questionable validity because the 2002 =
deed did=20
not contain a metes and bounds description of the property. And it =
clearly=20
indicated the March 15, 2004 filing of the correction deed that =
was=20
executed on March 3, 2004, two days after Hahn's judgment lien =
against=20
O'Neal Session was refiled. Moreover, previous title searches had =
returned=20
information regarding Hahn's interest in O'Neal Session's =
property. These=20
facts also raise a fact question as to whether Love had, or should =
have=20
had, notice of Hahn's interest in the property. See Martin v. =
Cadle=20
Co., 133 S.W.3d 897, 905 (Tex. App.--Dallas 2004, pet. =
denied)=20
(holding that party "cannot be considered innocent purchasers =
without=20
notice because, although they submitted affidavit testimony =
stating they=20
purchased the property in good faith, they are charged with =
knowledge of=20
all facts appearing in the chain of title to the property" and =
holding=20
that suspicious circumstances in timing of transfer "put them on =
notice of=20
the defects within their chain of title"). Moreover,=20
as shown above, Hahn produced summary judgment evidence, in =
addition to=20
the information a title search would have shown, sufficient to =
raise=20
material fact questions of facts and circumstances giving rise to =
the=20
inference of fraud and of Love's actual or constructive notice of =
those=20
facts. Accordingly, we hold that the trial court erred in granting =
Love=20
summary judgment on his suit to remove the cloud from his title. =
See=20
Tex. R. Civ. P. 166a(c); Knott, 128 S.W.3d at 215-16 =
(holding that summary judgment is properly granted only when there =
are no=20
genuine issues of material fact). We sustain=20
Hahn's first, second, and third issues insofar as they relate to =
Love's=20
suit to remove the cloud from his title. In his=20
fourth issue, Hahn claims that a legal basis exists for imposing a =
constructive trust against Love. To be entitled to summary =
judgment on=20
Hahn's counter-claim that a constructive trust should be imposed =
on the=20
property, Love was required to prove as a matter of law that Hahn =
failed=20
to meet at least one of the requirements for imposing a =
constructive=20
trust. Science Spectrum, Inc., 941 S.W.2d at 911. In =
deciding=20
whether there is a disputed material fact precluding summary =
judgment,=20
evidence favorable to the non-movant, Hahn, must be taken as true, =
every=20
reasonable inference must be indulged in favor of the non-movant, =
and any=20
doubts must be resolved in favor of the non-movant. =
Knott, 128=20
S.W.3d at 215. A =
constructive trust is an equitable remedy created by the courts to =
prevent=20
unjust enrichment--a breach of duty or an actual or constructive =
fraud=20
must be present in order to impose a constructive cause. See =
Medford=20
v. Medford, 68 S.W.3d 242, 248 (Tex. App.--Fort Worth 2002, =
no pet.).=20
To establish that a constructive trust exists, the proponent must =
prove=20
(1) breach of a special trust, fiduciary relationship, or actual =
fraud;=20
(2) unjust enrichment of the wrongdoer; and (3) tracing to an =
identifiable=20
res. Hubbard v. Shankle, 138 S.W.3d 474, 485 (Tex. =
App.--Fort=20
Worth 2004, pet. denied) (citing Mowbray v. Avery, 76 =
S.W.3d 663,=20
681 n.27 (Tex. App.--Corpus Christi 2002, pet. =
denied)). Love argues=20
in his motion for summary judgment that Hahn presented no evidence =
of any=20
prior relationship between Hahn and Love and that strict proof of =
a prior=20
confidential relationship between the parties is required. He =
cites=20
Hamblet v. Coveney to support his contention. See =
714=20
S.W.2d 126, 128 (Tex. App.--Houston [1st Dist.] 1986, writ ref'd =
n.r.e.).=20
In Hamblet, this Court stated, "Before a constructive =
trust can=20
be imposed, there must be strict proof of a prior confidential=20
relationship and unfair conduct or unjust enrichment on the part =
of the=20
wrongdoer." Id. However, Hamblet was not a case =
that=20
involved actual fraud, and, therefore, it is distinguishable from =
the=20
present case. See id. at 132. The Texas=20
Supreme Court has held, "Actual fraud, as well as breach of a =
confidential=20
relationship, justifies the imposition of a constructive trust."=20
Meadows v. Bierschwale, 516 S.W.2d 125, 128 (Tex. 1974). =
The=20
appellant in Meadows made an argument similar to Love's, =
namely,=20
that a constructive trust was appropriate only when a breach of a=20
fiduciary relationship was involved. Id. The Meadows=20
Court stated that the appellant's argument might have been =
the result=20
of confusion arising from a previous case that had held that a =
fiduciary=20
relationship must have arisen before and apart from the agreement =
made the=20
basis of the suit. Id. at 129 (quoting Consolidated =
Gas &=20
Equip. Co. v. Thompson, 405 S.W.2d 333, 336 (Tex. 1966)). The =
Meadows Court went on to state that the language in its =
previous=20
case "must be viewed in the context of the fact situation that =
gave rise=20
to it." Id. Here, Hahn=20
has alleged that Love, the Sessions, Gary, and Mid-Town were =
involved in=20
an actual fraud. There are genuine issues of material fact as to =
whether=20
an actual fraud took place and whether Love was unjustly enriched =
in his=20
dealings with the Sessions and Mid-Town, as discussed above; =
furthermore,=20
the property in question is an identifiable res. See =
Meadows, 516=20
S.W.2d at 129; Hubbard, 138 S.W.3d at 485. We conclude =
that=20
summary judgment on this issue was not proper because Love failed =
to prove=20
that Hahn failed to meet at least one of the requirements for =
imposing a=20
constructive trust as a matter of law. See Science Spectrum,=20
Inc., 941 S.W.2d at 911. We sustain=20
Hahn's fourth issue. We reverse=20
the order of the trial court and remand the cause for proceedings=20
consistent with this opinion. Evelyn V.=20
Keyes Panel=20
consists of Chief Justice Radack and Justices Keyes and Higley.=20
1. The property consists of two lots in the =
City of=20
Houston in Harris County, Texas, located at 1615 and 1621 Wheeler =
Street=20
("the property").=20
2. See Tex. Prop. Code Ann. =A7=A7 =
52.001-.004=20
(Vernon 2007 & Supp. 2008); Wilson v. Dvorak, 228 =
S.W.3d 228,=20
233-34 (Tex. App.--San Antonio 2007, no pet.) (outlining process =
for=20
creating judgment lien and stating, "When properly recorded and =
indexed,=20
an abstract of judgment creates a judgment lien that is superior =
to the=20
rights of subsequent purchasers and lien holders.").=20
3. See Tex. Prop. Code Ann. =A7 =
52.006 (Vernon=20
Supp. 2008) (governing length of time judgment lien is valid); =
Tex. Civ.=20
Prac. & Rem. Code Ann. =A7 34.001 (Vernon 2008) (governing =
length of=20
time judgment is active and providing for renewal of judgment with =
writ of=20
execution issued within ten years of previous writ).=20
4. See Tex. Civ. Prac. & Rem. =
Code Ann. =A7=20
34.006 (Vernon 1997) ("A dormant judgment may be revived by scire =
facias=20
or by an action of debt brought not later than the second =
anniversary of=20
the date that the judgment becomes dormant.").=20
5. See Tex. Bus. & Com. Code =
Ann. =A7=20
24.009 (Vernon 2002).=20
6. See Tex. Prop. Code Ann. =A7 =
13.001 (Vernon=20
2004).=20
An "Insider" =
includes: (A) if the debtor is an=20
individual:
(i) a relative of the debtor or =
a general=20
partner of the debtor;
(ii) a partnership in which the =
debtor is=20
a general partner;
(iii) a general partner in a =
partnership=20
described in subparagraph (ii) of this paragraph; =
or
(iv) a corporation of which the =
debtor is=20
a director, officer, or person in control. . . . (D) an affiliate, or an insider =
of an=20
affiliate as if the affiliate were the debtor; and (E) a managing agent of the=20
debtor. 8. When a transferee is an insider and knows =
the=20
transferor is insolvent at the time of the transfer he cannot be a =
good=20
faith transferee. Flores, 161 S.W.3d at 756; Putman =
v.=20
Stephenson, 805 S.W.2d 16, 20 (Tex. App.--Dallas, 1991, no =
writ). Nor=20
is insider status limited to the four subjects listed in section=20
24.002(7); rather, the list is provided "for purposes of =
exemplification."=20
Putman, 805 S.W.2d at 18. In 9. In supplemental briefing, Love argues =
that=20
Hahn bears the burden to prove that Love was not a good faith =
purchaser for value, and, in support, he cites Rucker v.=20
Steelman. See 619 S.W.2d 5, 7 (Tex. App.--Houston =
[1st=20
Dist.] 1981, writ ref'd n.r.e.) ("A creditor seeking to defeat a =
prior=20
conveyance of a judgment debtor must prove fraudulent intent on =
the part=20
of the debtor at the time of the execution of the conveyance and =
then, if=20
a valuable consideration is shown to have been paid for the =
property, the=20
creditor must further prove that at the time of such payment the =
party=20
taking the conveyance had notice of the debtor's fraud"). However, =
Rucker was a suit to remove cloud on title in which the =
creditor=20
was the plaintiff attempting to show that he was entitled to have =
a cloud=20
on his title removed. Id. In a suit to remove cloud on =
title, the=20
burden of proof is on the person seeking to remove the cloud from =
his=20
title. If the cloud is a fraudulent transfer, the person asserting =
fraudulent transfer must prove fraudulent intent and notice on the =
part of=20
the transferee. Id. Here, however, Love, the purchaser, =
not Hahn,=20
the creditor, sought summary judgment on his own suit to remove =
the cloud=20
from his title and on his affirmative defense that he was not =
subject to=20
Hahn's fraudulent transfer claims because he was a bona fide =
purchaser=20
under the Texas Uniform Fraudulent Transfer Act. See Tex. =
Bus.=20
& Com. Code Ann. =A7=A7 24.001-.013 (Vernon 2002 & =
Supp. 2008).=20
The TUFTA treats good faith raised by the party claiming to be a =
bona fide=20
purchaser as an affirmative defense and places the burden of =
proving the=20
defense on the party asserting it--in this case, on Love. See =
Flores=20
v. Robinson Roofing & Const. Co., 161 S.W.3d 750, 756 =
(Tex.=20
App.--Fort Worth 2005, pet. denied) (holding that burden of =
proving good=20
faith rests on party invoking defense and that it is not =
appropriate basis=20
for no-evidence summary judgment). Therefore, we analyze this =
potential=20
ground for support of the trial court's granting of summary =
judgment under=20
Love's traditional motion for summary judgment because it is not =
an=20
appropriate basis to grant a no-evidence summary judgment.=20
10. See Tex. Prop. Code Ann. =A7 =
52.001=20
(Vernon Supp. 2008) (stating that procedures for establishing =
judgment=20
lien apply to "a first or subsequent abstract of judgment" that is =
properly recorded and indexed). The parties agree that the second =
abstract=20
of judgment is not retroactive. However, the Fraudulent Transfer =
Act=20
provides relief for creditors when "the creditor's claim arose =
before or=20
within a reasonable time after the transfer was made." =
Tex. Bus.=20
& Com. Code Ann. =A7 24.005(a) (Vernon 2002) (emphasis =
added).=20
11. In his motion for summary judgment, =
Love=20
stated: Hahn=20
alleges that the sale to Love was a sale to an insider. The basis =
for this=20
allegation is that Love's father was a close personal friend of =
Herman=20
Gary, the real estate broker, that Love had known Gary for 20 =
years and=20
that Gary brought him many deals. Hahn also claims Love is an =
insider=20
because he had loaned Gary and Strickland (the initial intended =
buyer of=20
the property) money on prior occasions. Hahn alleges that =
Strickland=20
bought other property from Love on prior occasions. For purposes =
of the=20
Fraudulent Transfer Act, "insider" is defined in =
=A7 24.002(7) of the=20
Tex. Bus. & Com. Code and none of the definitions or =
categories of=20
insiders include the relationships or facts claimed by Hahn. As a =
matter=20
of law, the claim that Love is an insider fails. It is clear=20
that Love purchased in good faith and for a reasonably equivalent =
value=20
and, therefore, no action lies against him under the Fraudulent =
Conveyance=20
Act. Moreover, the transfer that Hahn seeks to set aside is not =
even one=20
from the debtor. The debtor was O'Neal Session, the grantor in =
Love's deed=20
was Mid-Town.=20
12. See Natividad v. Alexser, =
Inc., 875=20
S.W.2d 695, 699 (Tex. 1994) (in evaluating motion for summary =
judgment on=20
pleadings, court assumes that all allegations and facts in =
nonmovant's=20
pleadings are true and indulges all inferences in nonmovant's =
pleadings in=20
light most favorable to nonmovant); Emerald Oil and Gas L.C. =
ex rel.=20
Saglio P'ship Ltd. v. Exxon Corp., 228 S.W.3d 166, 169 (Tex.=20
App.--Corpus Christi 2005, no pet.) (same); see also Beta =
Supply, Inc.=20
v. G.E.A. Power Cooling Sys., Inc., 748 S.W.2d 541, 542 (Tex. =
App.--Houston [1st Dist.] 1988, writ denied) ("assertions of fact, =
not=20
pled in the alternative, in the live pleadings of a party are =
regarded as=20
formal judicial admissions").=20
13. Because the sufficiency of the legal =
description=20
in the purported 2002 deed is not material to the proof of Love's =
right to=20
removal of the cloud from his title, we do not address Hahn's =
first issue,=20
arguing that Love did not prove his entitlement to have the cloud =
removed=20
from his title because the description of the land in the general =
warranty=20
deed dated April 26, 2002, by which Session purported to convey =
the=20
property to Mid-Town, was legally insufficient, and, therefore, =
the deed=20
was void as a matter of law.=20