Date: 05-19-2011

Case Style: Texan Drywall, Inc. v. Tony Le

Case Number: 01-09-01063-CV

Judge: Michael Massengale

Court: Texas Court of Appeals, First District on appeal from the 333rd District Court of Harris County

Plaintiff's Attorney: Chuck Portz

Defendant's Attorney: Steven Bien Tran, Fernando De Leon and C. Patrick Waites for Middlebrook General Contractors, Inc., d/b/a Tradewerkes General Contractors

Description: Appellant Texan Drywall, Inc. appeals a take-nothing summary judgment and order of severance granted in favor of appellees Tony Le, Tho Le, K Hiem Do Hoang, Richard Lai, Sylvia Nguyen, Annie Nguyen, Patrick Trang, Phuong Nguyen, Patrick Nguyen, Thanh M. Nguyen, and Heather H. Trang. In two issues, Texan Drywall argues that the trial court erred in granting summary judgment in favor of the owners on its suit to foreclose on several materialman’s liens and on its breach of fiduciary duty claim. We affirm.

Background

This action arises in part from a dispute concerning the relative priority of several mechanic’s and materialman’s liens and several deeds of trust. Commercial State Bank of El Campo, Texas entered into various loan agreements with the appellees for the construction of residential homes in Houston, Texas. Each of the appellees signed a promissory note, payable to Commercial State Bank. The notes were secured by deeds of trust on the properties, and the deeds of trust were all filed in the real property records of Harris County between April 5 and May 23, 2006.

The appellees contracted with Middlebrook General Contractors, Inc., d/b/a Tradewerkes General Contractors to construct residential homes on the properties. Middlebrook later contracted with Texan Drywall to supply labor and materials and to install drywall. Texan Drywall began and completed its work in February 2007. On March 28, 2007, Texan Drywall filed affidavits with the Harris County District Clerk claiming materialman’s liens against each of the properties, and it sent the required notices to the appellees in their capacity as the property owners and to Middlebrook. Texan Drywall claimed statutory and constitutional lien rights against the real property and improvements, including labor, materials, and equipment needed to install drywall. The notices instructed the owners to retain 10% of the contract price or 10% of the value of the work performed by the contractor during construction and for 30 days after completion of construction.

The property owners defaulted on the notes, and Commercial State Bank foreclosed on its deed of trust liens. The properties were sold and the proceeds were applied to the remaining loan balances, leaving no remaining funds to satisfy Texan Drywall’s materialman’s liens.

After Middlebrook failed to pay Texan Drywall for work completed on the owners’ properties, Texan Drywall sued Middlebrook, Joseph P. Middlebrook, and the property owners to establish and to foreclose on the materialman’s liens. The owners moved for summary judgment on the grounds that Texan Drywall had not properly perfected its materialman’s liens and that the liens were extinguished by the foreclosure of Commercial State Bank’s deed of trust liens. The trial court granted the motion in favor of the owners and entered a take-nothing judgment against Texan Drywall. The trial court granted the owners’ unopposed motion to sever Texan Drywall’s claims against them, thereby making the judgment final as against the owners. On appeal, Texan Drywall argues that the trial court erred in granting summary judgment on its suit to foreclose the liens and on its breach of fiduciary duty claim.

Analysis

We review a trial court’s summary judgment decision de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). To prevail, the movant has the burden of proving that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548–49 (Tex. 1985); see Tex. R. Civ. P. 166a(c). A defendant moving for summary judgment must conclusively negate at least one essential element of each of the plaintiff’s causes of action or conclusively establish each element of an affirmative defense. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997). A matter is conclusively established if reasonable people could not differ as to the conclusion to be drawn from the evidence. See City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005). In deciding whether there is a disputed issue of material fact precluding summary judgment, we take as true evidence favorable to the non-movant, indulging every reasonable inference and resolving any doubts in its favor. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). If the order granting summary judgment does not specify the grounds on which it was granted, the appealing party must demonstrate on appeal that none of the proposed grounds is sufficient to support the judgment. Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 79 (Tex. 1989); Tilotta v. Goodall, 752 S.W.2d 160, 161 (Tex. App.—Houston [1st Dist.] 1988, writ denied). Because the trial court in this case did not specify the ground upon which it relied for its ruling, we will affirm if any theory advanced by the owners in their summary-judgment motion is meritorious. See Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 157 (Tex. 2004).

I. Priority of liens

In its first issue, Texan Drywall argues that summary judgment was improper because it perfected valid materialman’s liens against the owners’ properties. It contends that these liens were superior to, and therefore not extinguished by, Commercial State Bank’s deed-of-trust liens. The owners argued in their summary judgment motion that Texan Drywall had not perfected valid materiaman’s liens because there was no evidence that it filed the required affidavits within 30 days of the earlier date of the completion, termination, or abandonment of the contract. See Tex. Prop. Code Ann. 53.103(b) (West 2007). The owners argued alternatively that even if the materialman’s liens were perfected, the foreclosure of Commercial State Bank’s deed of trust liens extinguished Texan Drywall’s liens.

Because the order of priority of Texan Drywall’s materialman’s liens and Commercial State Bank’s deed-of-trust lien is dispositive, we consider this issue first. For this purpose, we assume, without deciding, that Texan Drywall properly perfected the materialman’s liens. A mechanic’s and materialman’s lien is subordinate to a lien existing on land at the time of the inception of the mechanic’s lien. Id. § 53.123. Accordingly, to determine the priority of liens, we must first examine the summary-judgment evidence to determine when Commercial State Bank’s lien attached to the properties and the time of the inception of Texan Drywall’s materialman’s liens. See Diversified Mortg. Investors v. Lloyd D. Blaylock Gen. Contractor, Inc., 576 S.W.2d 794, 800 (Tex. 1978); GCI GP, LLC v. Stewart Title Guaranty Co., 290 S.W.3d 287, 295 (Tex. App.—Houston [1st Dist.] 2009, no pet.).

The time of inception of a properly perfected materialman’s lien is the earlier of either (1) the commencement of a lienholder’s construction of improvements on the property or (2) the lienholder’s delivery of materials to the land on which the improvements are to be located and on which the materials are to be used. Tex. Prop. Code Ann. § 53.124(a) (West 2007). If there is a general contract regarding the construction of improvements to the property, the courts apply the relation-back doctrine to determine the time of a lien’s inception. Oriental Hotel v. Griffiths, 33 S.W. 652, 653 (Tex. 1895). Under the relation-back doctrine, the time of inception of all materialman’s liens created will be the date the contract was executed if there is a general construction contract between the owner and a contractor. McConnell v. Mortg. Inv. Co. of El Paso, 305 S.W.2d 280, 283 (Tex. 1957).

In this case, there was no evidence of a general construction contract, and the uncontroverted summary-judgment evidence established that Texan Drywall delivered materials and performed work on the properties in February 2007. Although Texan Drywall discusses the relation-back doctrine in its brief, it does not explain how it applies to this case. The affidavits claiming materialman’s liens on the owners’ properties were all filed on March 28, 2007. Accordingly, the inception of Texan Drywall’s liens was in February 2007, on the date that it began delivering materials and making improvements to the properties. See Tex. Prop. Code Ann. § 53.124(a).

Commercial State Bank’s deed-of-trust liens were in existence prior to the inception of Texan Drywall’s materialman’s liens, and they were all recorded between April 5 and May 23, 2006. Because Commercial State Bank’s interests were in existence prior to Texan Drywall’s liens, they are superior to Texan Drywall’s interests. See id. § 53.123(a). When Commercial State Bank foreclosed on the properties, all junior liens, including the materialman’s liens, were extinguished. See Diversified Mortg. Investors, 576 S.W.2d at 808; Jones v. Bank United of Tex., FSB, 51 S.W.3d 341, 344 (Tex. App.—Houston [1st Dist.] 2001, pet. denied) (holding that junior lien was extinguished after senior lienholder foreclosed). Accordingly, we hold that the trial court did not err in granting summary judgment in favor of the owners. See Diversified Mortg. Investors, 576 S.W.2d at 808. Texan Drywall’s first issue is overruled.

II. Breach of fiduciary duty

In its second issue, Texan Drywall contends the trial court erred in granting summary judgment on its claim for breach of fiduciary duty. Rule 38.1 of the Rules of Appellate Procedure requires an appellate brief to include a “clear and concise argument for the contentions made, with appropriate citations to authorities and to the record. Tex. R. App. P. 38.1(i). This issue is entirely unsupported by argument and appropriate citation to authorities and to the record. Id.; see Republic Underwriters, Ins. Co. v. Mex-Tex, Inc., 150 S.W.3d 423, 427 (Tex. 2004). Accordingly, we hold that Texas Drywall has inadequately briefed this issue and, thus, has waived it. See Tex. R. App. P. 38.1(i); see also Stephens v. Dolcefino, 126 S.W.3d 120, 129 (Tex. App.—Houston [1st Dist.] 2003), pet. denied, 181 S.W.3d 741 (Tex. 2005). Texan Drywall’s second issue is overruled.

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See: http://www.1stcoa.courts.state.tx.us/opinions/htmlopinion.asp?OpinionId=89183

Outcome: We affirm the judgment of the trial court.

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