Barclay v. Richey

MELISSA BARCLAY, Appellant v. AURY GENE RICHEY, Appellee

NO. 09-17-00026-CV

Court of Appeals Ninth District of Texas at Beaumont

Submitted on May 2, 2018

January 24, 2019

On Appeal from the 136th District Court Jefferson County, Texas

Trial Cause No. D-194,462

MEMORANDUM OPINION

In a dispute over ownership of a house, Melissa Barclay appeals the trial court's final amended judgment claiming the trial court erred by (1) denying her motion for instructed verdict on Aury Gene Richey's counterclaim for reformation of deed, (2) awarding excessive damages for unjust enrichment to Richey, and (3) failing to award Barclay reasonable and necessary attorney's fees on her declaratory judgment cause of action.

We conclude the trial court properly denied Barclay's directed verdict on Richey's counterclaim for reformation of deed. We also determine the damages awarded to Richey for unjust enrichment were properly supported by the evidence with respect to the sums awarded for Richey's payment of property taxes, for payoff of Barclay's mortgage, and for remodeling of the residence. However, the evidence is legally insufficient to support the award of unjust enrichment damages for premiums Richey paid to insure the property. We modify the amended final judgment to strike that portion of the damages awarded to Richey for payment of insurance premiums. With respect to Barclay's claim for attorney's fees, we conclude the trial court properly denied Barclay's claim for attorney's fees on her declaratory judgment claim. We affirm the trial court's amended final judgment as modified.

Background

Barclay purchased the property at issue in 2000, obtaining a mortgage secured by a purchase money security interest. Barclay admittedly fell behind on payments, and foreclosure was imminent. According to Barclay, in order to avoid foreclosure in February 2007, Richey, her stepfather, loaned her approximately $78,000.00 to pay off the outstanding note and obtain a release of lien on the home. In February 2009, a dispute arose over what Barclay agreed to in return for Richey's payment ofthe balance of her mortgage. It is undisputed Richey paid the balance owed to Barclay's lender for the purchase money mortgage on the home. Barclay asserted that in exchange for the money, she signed a promissory note and deed of trust to repay Richey in the amount he paid to extinguish her mortgage, $78,733.15, plus 12% interest. Richey contended that Barclay agreed to sell him her home and execute a lease with the option to buy back the home in two years.

According to Barclay, for the next twenty-seven months—March 2007 until March or April 2009—she paid $1,000.00 a month either by check or in cash to satisfy the note Richey held. In 2009, when Barclay sought to obtain a loan to repay Richey, she was informed she no longer owned the home because Richey recorded a warranty deed in February 2009 transferring ownership of the property to himself. Barclay confronted Richey, and he told her he owned the home and she could repurchase the home for $106,000.00, rather than the balance of the promissory note between them. Shortly thereafter, Barclay moved from the home to another house where she resided at the time of trial and ceased making payments to Richey.

Richey testified that in exchange for paying off Barclay's mortgage, Barclay agreed to sell her house to him, lease the home from him for a $1,000.00 per month, and receive an option to repurchase the home within two years. Richey explained his agreement with Barclay was similar to an agreement she was going to make withanother financial institution to avoid foreclosure, but his terms were more financially favorable to Barclay. Richey also stated that Kae Richey, his wife and Barclay's mother, filled out the documents, but no documents were signed until the following day when Richey and Barclay went to his bank where he wired the money to pay off her mortgage. Richey claimed Barclay signed the warranty deed, a lease, and a repurchase agreement at the bank in the presence of a notary.

Barclay denied ever signing a warranty deed, residential lease agreement, or an option to purchase the home, maintaining she never agreed to sell her house to Richey. Barclay testified to the terms of the note, stating the interest rate was twelve percent, with payments of $1,000.00 per month. However, she did not have a copy of the documents she claimed she signed. Barclay's mother, Kae, testified Richey offered or gave Barclay signed copies of the deed, lease agreement, and option to repurchase after they were executed at the bank.

Barclay admitted at trial she did not read any of the documents she signed because the agreement was with her parents. Barclay stated, however, that what she signed was handwritten, had a lot of scratch outs, and was done very quickly at her parents' house. When shown pages from a notary book she allegedly signed, Barclay questioned whether her signature was forged.¹ Nonetheless, Barclay stated she knewwhatever she signed at the bank was not a warranty deed requiring her signature to be notarized; rather, it was something for the wire transfer to pay off her outstanding mortgage.

The parties also disagreed about the amount of money Barclay paid Richey from February 2007 through early 2009. Barclay testified she paid Richey twenty-seven payments of $1,000.00 before she moved out and ceased paying. However, Barclay did not produce written evidence of every payment. To support her claim of partial payment, she submitted a checkbook registry evidencing only five $1,000.00 payments. Kae kept handwritten records that reflected Barclay paid, at most, $9,000.00, but Kae could not completely decipher her notes at trial. Nevertheless, while Richey claimed Barclay rented the house from him after he paid the mortgage off, Richey did not report any rental income on his 2007 tax return. On his 2008 tax return, Richey reported $6,000.00 in rental income from the property and in 2009, he reported $3,000.00 in rental income.

Richey explained that because Barclay failed to pay in accordance with their agreement, he filed the original executed warranty deed for record on February 17, 2009. Later, after seeking legal counsel, Richey added a more detailed property description and other changes to the original executed warranty deed and re-recordedthe "corrected" deed on July 22, 2009.² Richey testified, and Barclay acknowledged, he paid property taxes for the property from 2007 through 2014 in the total amount of $23,672.32. Richey also testified he purchased homeowner's insurance for the property after Barclay moved out in 2009. Richey testified he paid insurance premiums on multiple properties he owned, including the house at issue, from 2009 until 2012, which totaled $12,852.00. Richey further testified that from May 2013 until the time of trial, he paid property insurance premiums solely for the property in question in the total amount of $7,388.97. Barclay explained that Richey began insuring the property because after he recorded the warranty deed in 2009, the tax receipts and all other notices pertaining to the property were sent to Richey instead of her, and she could no longer insure the house.

Richey further testified that in May 2011, he began remodeling the house. Richey explained the remodeling was extensive, to both the interior and exterior. He stated that Kae performed much of the labor on the house. Barclay admitted she saw people working in the house and acknowledged the exterior of the home was painted. However, she testified that when she observed the Richeys working on the home, she told them to stop but they continued.

Kae also testified about remodeling the house and explained she kept handwritten notes regarding the expenses incurred. She estimated a total of $50,000.00 was incurred for materials and labor remodeling the house. An expense report for materials was admitted into evidence showing a total of $20,230.60.

In pretrial proceedings, the trial court granted summary judgment in favor of Barclay on her declaratory judgment claim rendering the warranty deed filed for record on February 17, 2009, void for vagueness because of an insufficient property description. Additionally, the correction deed filed for record on July 22, 2009, was held to be void because it lacked Barclay's original signature. Thereafter, on May 1, 2015, the trial court granted a severance of those claims for which he granted partial summary judgment into a separate action, Cause No. D-194,462-A, and signed a final judgment in the severed cause. The trial court included a recitation that the finaljudgment was to be "a final appealable judgment as it disposes of all claims of plaintiff and defendant under Cause No. D-194,462-A."

After a jury trial and post-judgment hearings in the original cause, the trial court rendered its final amended judgment that Barclay take nothing from Richey on her claims of fraud, statutory fraud, and conversion. The judgment ordered Richey take nothing on his reformation of deed claim, thereby rendering ownership of the property to Barclay. The final amended judgment awarded Richey unjust enrichment damages against Barclay in the following amounts: (1) $78,733.15 for paying off Barclay's mortgage; (2) $18,500.00 for expenses incurred in remodeling of the residence; (3) $23,672.32 for payment of property taxes; and (4) $7,800.00 for payment of insurance premiums. The trial court denied any award of attorney's fees asserting it no longer retained jurisdiction to award attorney's fees on the declaratory judgment claims.

Barclay raises three issues complaining of the trial court's denial of her motion for directed verdict on Richey's counterclaim for reformation of deed, the award of certain damages to Richey on the grounds of unjust enrichment, and the denial of her attorney's fees for her successful declaratory judgment.

Motion for Directed Verdict

In her first issue, Barclay argues the trial court...