Charter Drywall Hous. v. Matthews Invs. Sw. XX

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CHARTER DRYWALL HOUSTON, INC., Appellant v. MATTHEWS INVESTMENTS SOUTHWEST, INC. XX, Appellee

No. 14-22-00484-CV

Court of Appeals of Texas, Fourteenth District

May 16, 2023

On Appeal from the County Civil Court at Law No. 2 Harris County, Texas Trial Court Cause No. 1156763

Panel consists of Chief Justice Christopher and Justices Jewell and Spain.

MEMORANDUM OPINION

Kevin Jewell Justice

Appellant Charter Drywall Houston, Inc. appeals the trial court's final judgment in favor of appellee Matthews Investments Southwest, Inc. XX on its fraudulent lien claim. Charter Drywall contends the evidence is legally insufficient to support the trial court's finding that Charter Drywall filed two fraudulent lien affidavits and that the court therefore erred in denying Charter Drywall recovery on its lien foreclosure claim. We affirm the trial court's judgment.

Background

Matthews Investments, a residential real estate developer, hired Brunson Homes as general contractor to construct two residential homes, which we refer to as "Unit 503A" and "Unit 503B". In late 2017, Brunson Homes requested and received bids from Charter Drywall to install drywall in both units. Brunson Homes did not accept Charter Drywall's proposals.

In January 2018 Charter Drywall delivered and installed drywall without having first agreed on a price with Brunson Homes. Charter Drywall then billed Brunson Homes $8,746 for Unit 503A and $8,746 for Unit 503B. Brunson Homes did not pay the invoices.

In April 2018, Charter Drywall filed mechanic's and materialman's liens against Unit 503A and Unit 503B in the Harris County real property records. Charter Drywall stated in the lien affidavits among other things: (1) that it furnished materials and labor to Brunson Homes pursuant to a written contract dated February 9, 2017; (2) that it provided notice of the asserted lien to Matthews Investments; and (3) that Matthews Investments and Brunson Homes "have a unity of interest within the meaning of Tex. Prop. Code Ann. [section] 53.026."^[1] Matthews Investments sold Unit 503B. The title company allegedly did not discover the lien when performing its title investigation. Charter Drywall sent a letter to the buyer claiming that Charter Drywall owned Unit 503B.

Matthews Investments attempted to sell Unit 503A. Prior to closing the title company discovered the liens and required Matthews Investments to place $13,500 into escrow. The title company then paid $10,827.82 to Charter Drywall, which released the lien against Unit 503A.

Matthews Investments sued Charter Drywall for filing fraudulent lien affidavits and, alternatively, for unjust enrichment. Charter Drywall filed a counterclaim to foreclose the lien on Unit 503B.

The parties tried the case to the court. In its final judgment the trial court found that Charter Drywall fraudulently filed the lien affidavits for Unit 503A and Unit 503B. The court also declared the lien affidavit filed against Unit 503B "invalid and of no force or effect." The court ordered Charter Drywall to pay Matthews Investments $20,000 in statutory damages, plus post-judgment interest, court costs, and attorney's fees. Finally, the court ruled that Charter Drywall take nothing on its lien foreclosure counterclaim.

Charter Drywall filed a timely request for findings of fact and conclusions of law. Tex.R.Civ.P. 296. Although the court did not sign and file findings or conclusions by the required deadline, Charter Drywall did not file a notice of past due findings of fact and conclusions of law. See Tex. R. Civ. P. 297.

Charter Drywall timely appealed, arguing in a single issue that the trial court erred in holding the lien affidavits to be fraudulent and invalid.

Standard of Review

Charter Drywall does not specify whether it is raising a legal or factual insufficiency challenge. There is no standard of review included in Charter Drywall's brief, but the summary of the argument includes a statement that "no evidence" supports the trial court's judgment, and the substantive argument throughout the brief indicates that only legal sufficiency is at issue. We limit our review accordingly. See Benavente v. Granger, 312 S.W.3d 745, 747 (Tex. App.-Houston [1st Dist.] 2009, no pet.) (when appellant's issue statement challenging the sufficiency of the evidence is ambiguous, court looks to brief's standard-of-review section, argument, and prayer to determine whether appellant challenges legal or factual sufficiency of the evidence).

In an appeal from a judgment rendered after a nonjury trial, we review the trial court's findings using the same standards of review that apply to a jury's verdict. MBM Fin. Corp. v. Woodlands Operating Co., L.P., 292 S.W.3d 660, 663 n.3 (Tex. 2009) (citing Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994)). To analyze the legal sufficiency of the evidence supporting a finding, we review the record in the light most favorable to the factual findings, crediting favorable evidence if a reasonable factfinder could and disregarding contrary evidence unless a reasonable factfinder could not. See City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). Evidence is legally sufficient if it "rises to a level that would enable reasonable and fair-minded people to differ in their conclusions." Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004). We will conclude that the evidence is legally insufficient to support the finding only if (a) there is a complete absence of evidence of a vital fact, (b) the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes the opposite of the vital fact. City of Keller, 168 S.W.3d at 810.

As the factfinder in a bench trial, the trial court "weighs the evidence and judges a witness's credibility, and the trial court may accept or reject any witness's testimony in whole or in part." Brand v. Degrate-Greer, No. 02-15-00397-CV, 2017 WL 1756542, at *7 (Tex. App.-Fort Worth May 4, 2017, no pet.) (mem. op. on reh'g) (internal quotation omitted). As with any factfinder, the trial court may reject the testimony of an interested witness, even when that testimony is "uncontradicted and unimpeached." City of Keller, 168 S.W.3d at 820. The factfinder's credibility determinations must be reasonable, and the factfinder "cannot ignore undisputed testimony that is clear, positive, direct, otherwise credible, free from contradictions and inconsistencies, and could have been readily controverted." Id.

The failure to file a notice of past-due findings of fact waives the right to complain about the failure to file them, and we therefore review the judgment as though none had been requested. Las Vegas Pecan & Cattle Co. v. Zavala County, 682 S.W.2d 254, 255 (Tex. 1984); Curtis v. Comm'n for Lawyer Discipline, 20 S.W.3d 227, 232 (Tex. App.-Houston [14th Dist.] 2000, no pet.). When an appellant does not request or file findings and conclusions, the appellate court presumes the trial court found all fact questions in support of its judgment and must affirm on any legal theory finding support in the pleadings and evidence. Allen v. Allen, 717 S.W.2d 311, 313 (Tex. 1986); Chang v. Nguyen, 81 S.W.3d 314, 317 (Tex. App.-Houston [14th Dist.] 2001, no pet.). In the absence of findings of fact and conclusions of law, it is implied that the trial court found all facts necessary to support its judgment as long as they also are supported by the evidence. BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 795 (Tex. 2002). Implied findings may be challenged on appeal for legal sufficiency when the appellate record includes the reporter's and clerk's records. Id. We address Charter Drywall's appellate arguments with these principles in mind.

Analysis

A. Fraudulent Liens

Matthews Investments alleged that Charter Drywall violated the fraudulent lien statute, which provides:

(a) A person may not make, present, or use a document or other record with:

(1) knowledge that the document or other record is a fraudulent court record or a fraudulent lien or claim against real or personal property or an interest in real or personal property;

(2) intent that the document or other record be given the same legal effect as a court record or document of a court created by or established under the constitution or laws of this state or the United States or another entity listed in Section 37.01, Penal Code, evidencing a valid lien or claim against real or personal property or an interest in real or personal property; and

(3) intent to cause another person to suffer:

(A) physical injury;

(B) financial injury; or

(C) mental anguish or emotional distress.

Tex. Civ. Prac. & Rem. Code § 12.002. Because Charter Drywall filed its lien affidavits pursuant to Chapter 53 of the Texas Property Code, Matthews Investments also was required to show that Charter Drywall acted with an intent to defraud. See id. § 12.002(c).

"Fraudulent" is not defined in the statute. When construing a statute, "[w]ords and phrases shall be read in context and construed according to the rules of grammar and common usage." Tex. Gov't Code § 311.011(a). Black's Law Dictionary provides two definitions of a "fraudulent act": "1. Conduct involving bad faith, dishonesty, a lack of integrity, or moral turpitude. 2. Conduct satisfying the elements of a claim for actual or constructive fraud." Fraudulent Act, Black's Law Dictionary (11th ed. 2019).

This court and our sister court in Houston have applied a standard consistent with Black's first definition-i.e., a lien is fraudulent if created in bad faith or with dishonesty, a lack of integrity, or moral...