Judicial Foreclosure In Texas
John Wilson • Jul 01, 2018
Texas Judicial Foreclosure Process, Jurisdiction & Venue
Petitions for judicial foreclosure must be filed in a state district court in: (i) the county where the cause of action accrued, (ii) in the county of the defendant’s residence (if defendant is an individual) or principal place of business (if defendant is a corporation, partnership, unincorporated association, or other legal entity), (iii) in the county of plaintiff’s residence (if plaintiff is an individual) or principal place of business (if plaintiff is a corporation, partnership, unincorporated association, or other legal entity). Tex. Civ. Prac. & Rem. Code §§ 15.001, 15.002, and 15.035 (Vernon 2002). Attorneys may be led to believe that venue of a judicial foreclosure action must occur in the county in which the property is located, however, the Texas Supreme Court has held that an action to foreclose a lien does not primarily involve title to real property. See Bennett v. Langdeau, 362 S.W.2d 952, 955 (Tex. 1962).. Consequently, venue is not mandatory in the county in which the land is located.
Pleading Retirements for Judicial Foreclosure
In order to obtain the relief of judicial foreclosure from a District Court, the lien holder must: (i) allege execution and delivery of a secured debt instrument, (ii) allege ownership of the debt instrument, (iii) provide a description of the property secured by the lien, (iv) allege the execution and delivery of the lien instrument (an exception is an abstract of judgment), (v) allege the amount of the unpaid debt, and (vi) allege a default by the maker of the debt instrument. See generally Graves v. Drane, 1 S.W. 905 (Tex. 1886); and Shaw v. American Life Ins. Co., 60 S.W.2d 1110, 1111 (Tex. Civ. App. – Fort Worth 1933, writ dism’d). The prayer for relief in the petition should pray for the foreclosure of the lien along with a judgment against the debtor for the amount of the debt. The lien holder may recover attorney fees if recovery of attorney fees is: (a) provided for in the lien instrument and/or debt instrument, Tex. Jur. 3d Deeds of Trust and Mortgages § 207 (citing Jeffreys v. McGlamery, 96 S.W.2d 572 (Tex. Civ. App. – Amarillo 1936, no writ). and (b) pled for in the petition.
The Judicial Foreclosure Judgement
A valid judgment foreclosing the lien must be obtained from the District Court, which should include: (i) an award of the debt owed to the lien holder, (ii) court costs and attorney fees (if provided for in the lien or debt instrument), (iii) a decretal paragraph ordering the foreclosure of the lien, (iv) and a decretal paragraph directing a sheriff or constable to seize and sell the collateral of the lien in satisfaction of the debt, and (v) a decretal paragraph instructing the sheriff or constable that if the collateral does not sell for an amount sufficient to satisfy the debt that the sheriff or constable should proceed to execute on other property of the defendant as in ordinary judgment execution. Tex. R. Civ. P. 309. Once a valid judgment foreclosing the lien has been entered by the District Court, a sale must be held in order to pass the title to a subsequent purchaser. Warnecke v. Broad, 161 S.W.2d 453, 454 (Tex. 1942). The writ of sale should be directed to the sheriff or constable in the county in which the property is located. De Guerra v. De Gonzalez, 232 S.W. 896, 899 (Tex. Civ. App. 1921, no writ).
The Writ And Sale
The clerk of the District Court will issue the writ of sale upon the application of the successful party in a suit thirty (30) days after the judgment is rendered. Tex. R. Civ. P. 627. The writ of sale must particularly describe the property, and shall direct the sheriff to give public notice of the sale. Tex. R. Civ. P. 630. The sale of the real property will be held at the courthouse door of the county, unless the court orders that such sale shall be at the place where the real property is situated. Tex. R. Civ. P. 646. The sale of the real property shall occur on the first Tuesday of the month, between the hours of ten o’clock, a.m. and four o’clock p.m. The sheriff must give notice of the sale in a newspaper in the county (in English) once a week for three consecutive weeks preceding the sale, the first of said notices must be published not less than twenty (20) days immediately preceding the day of sale. Tex. R. Civ. P. 647. The notice must contain a statement of the authority by virtue of which the sale is to be made, the time of levy, the time and place of sale, a brief description of the property to be sold, the number of acres, the original survey, locality in the county, and the name by which the land is most generally known. Proceeds from the sale are applied first to the sheriff’s/constable’s cost of the sale, then to the indebtedness of the suit, and then to junior lien holders who were parties to the suit, and then the property owner.
Post Sale Matters
While a judicial foreclosure sale will prevent a borrower from asserting a wrongful foreclosure based upon defects in the lien or debt instrument, a sheriff’s sale may be set aside with proof of (i) an irregularity in the sale calculated to affect the sale, (ii) a grossly inadequate sales price, and (iii) a causal connection between the irregularity and the selling price. Apex Financial Corp. v. Brown, 7 S.W.3d 820, 827-28 (Tex. App. – Texarkana 1999, no pet.)(citing McKennon v. McGown, 11 S.W. 532, 533 (Tex. 1889) and Kaufman & Runge v. Morris, 60 Tex. 119 (Tex. 1883). Guarantors and borrowers have a statutory right to have the District Court in the county in which the property is located determine the fair market value of the property within ninety (90) days after the date of the date of the sale or (applicable only to guarantors) ninety (90) days after the guarantor received notice of the sale. Tex. Prop. Code §§ 51.004 and 51.005 (Vernon August 2005). This right is independent of whether the lien holder brings an action for collection of the deficiency amount. Note that a mortgagee must file suit for deficiency within two years after the foreclosure sale. Lighthouse Church of Cloverleaf v. Texas Bank, 889 S.W.2d 595 (Tex. App. – Houston [14th Dist.] 1994, writ denied).
Interview of a Child in Chambers by a Texas Court Divorces can be messy; even more so when children are involved. One pivotal question that is often asked is who will receive primary custody. The prospect of children speaking to a judge during a divorce case to help determine custody can be a controversial topic. On one hand, it aims to understand and prioritize the child's preferences and best interests. On the other hand, exposing children to legal proceedings can be emotionally taxing and stressful . When Can the Judge Talk to Children? During a nonjury trial or hearing, the court is required to privately interview any child 12 years or older, while interviewing a child under 12 is at the judge's discretion. This private interview helps convey the child's wishes regarding who should have primary custody. The judge can also conduct the interview independently or on the request of a party, amicus attorney, or attorney ad litem. While speaking to the child can help determine issues of possession, access, and parent-child relationships, it does not restrict the court’s authority to decide what’s best for them. However, in cases where a jury trial is underway, the judge is prohibited from privately interviewing the child on matters subject to a jury verdict such as which parent is granted conservatorship/primary custody. During the conversations, attorneys representing the parents, the amicus attorney, the guardian ad litem, or the child's attorney ad litem may be present. For children aged 12 and older, the court is required to record these interviews to ensure a thorough and accurate record is available as part of the overall case documentation. Inside the Judge's Playbook: What Gets Asked? The judge may ask open-ended questions about living arrangements, the child's relationship with each parent, and other aspects relevant to their well-being. Additionally, an interviewer’s nonverbal communication may not contribute to the making of a particular statement. James v. Texas DHS, 836 S.W.2d 236, 239-241, (Tex.App.—Texarkana 1992, no writ.). However, the child's testimony is just one piece of the puzzle, weighed alongside other factors such as parental behavior, home stability, and each parent's willingness to cultivate the child's relationship with the other parent. Importantly, if the judge during the interview has reasonable cause to believe that a child’s physical or mental health or welfare has been adversely affected by abuse or neglect by any person , the the judge is obligated to shall immediately make a report. Tex. Fam. Code §261.101(a).
What is a Franchise Agreement? Businesses form franchise agreements when they want to share their business ideas and ventures with other entrepreneurs looking to be independent business operators themselves. The franchise agreement is a legal contract that establishes a franchisor-franchisee relationship to expand the franchisor's entrepreneurial ideas and values. The franchisor grants the franchisee the legal right to set up and operate a franchised business consistent with the terms of the franchise agreement. Under this agreement, the franchisee gains the license to use the franchisor’s trademarks, trade dress, business systems, operational manuals, and supply sources for offering and selling the franchisor's specified products and/or services. The franchise agreement is required to be legally included as an exhibit in the franchisor’s Franchise Disclosure Document, which must be presented to potential franchisees before any franchise offerings or sales are made. The federal trade commission publishes A Consumer's Guide to Buying a Franchise which is helpful for perspective purchasers' of franchises.
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