                                                                                        ACCEPTED
                                                                                   03-14-00519-CV
                                                                                          3972059
                                                                         THIRD COURT OF APPEALS
                                                                                    AUSTIN, TEXAS
                                                                              1/30/2015 4:13:46 PM
                                                                                 JEFFREY D. KYLE
                                                                                            CLERK
                          NO. 03-14-00519-CV

                                                                   FILED IN
                                                            3rd COURT OF APPEALS
                         In The Court of Appeals                AUSTIN, TEXAS
                  For the Third District Court of Appeals   1/30/2015 4:13:46 PM
                              Austin, Texas                   JEFFREY D. KYLE
                                                                    Clerk


                       JOHN THOMAS AIKEN,
                             Appellant

                                    v.

                    ANGELIQUE S. NAYLOR and
                    WELLS FARGO BANK, N.A.,
                           Appellees


ON APPEAL FROM THE 250TH JUDICIAL DISTRICT COURT, TRAVIS COUNTY, TEXAS

               TRIAL COURT CAUSE NO. D-1-GN-13-003527


             BRIEF OF APPELLEE ANGELIQUE S. NAYLOR


                                  Russell Frost
                                  State Bar No. 24063687
                                  Law Office of Russell Frost
                                  711 West 7th Street
                                  Austin, Texas 78701
                                  Tel: (512) 225-5590
                                  Fax: (512) 692-2895
                                  rfrost@russellfrostlaw.com

                                  ATTORNEY FOR APPELLEE
                                  ANGELIQUE S. NAYLOR
                                          TABLE OF CONTENTS

TABLE OF CONTENTS .............................................................................................. ii

INDEX OF AUTHORITIES.....................................................................................iv

STATEMENT OF THE CASE .................................................................................vi

STATEMENT REGARDING ORAL ARGUMENT ........................................... viii

ISSUES PRESENTED ................................................................................................. ix

STATEMENT OF FACTS ............................................................................................ 1

SUMMARY OF THE ARGUMENT ........................................................................... 3

ARGUMENT ................................................................................................................. 5

         A.        Standard of Review – Texas Rule of Civil Procedure 166a.................. 5

         B.        Aiken failed to present to the trial court, and raises for the first time
                   on appeal, his contentions that the trial court erred in granting
                   summary judgment because the relief sought was in excess of what
                   Naylor was entitled to under the pleadings, and that the trial court
                   erred in granting judgment greater than the relief requested and not
                   based on grounds not asserted in the motion for summary judgment... 5

         C.        Naylor’s summary judgment motion was consistent with and
                   supported by the claims and factual allegations asserted in her First
                   Amended Counterclaim…..……………………………………..…….6

         D.        Aiken’s claims under the Texas Debt Collections Act, the Texas
                   Property Code, and for declaratory judgment are without merit, and
                   therefore, the trial court did not err in granting summary judgment in
                   favor of Naylor......................................................................................... 9




                                                             ii
        E.      There is no genuine issue of material fact as to who holds superior
                title to the subject property, and therefore, the trial court’s grant of
                summary judgment in favor of Naylor is correct................................. 13

        F.      Naylor’s claim for breach of contract is not barred by the statute of
                limitations.... ........................................................................................... 15

        G.      Naylor is not barred by judicial estoppel from asserting a breach of
                contract claim under the LWOP.... ....................................................... 17

        H.      Aiken’s standing argument is without merit ........................................ 19


CONCLUSION AND PRAYER................................................................................. 25

CERTIFICATE OF COMPLIANCE .......................................................................... 26

CERTIFICATE OF SERVICE.................................................................................... 27




                                                           iii
                                   INDEX OF AUTHORITIES


                                                  CASES

Austin Nursing Ctr., Inc. v. Lovato,
   171 S.W.3d 845, 849 (Tex. 2005) ..................................................................... 19

Besteman v. Pitcock,
    272 S.W.3d 777, 784 (Tex. App.—Texarkana 2008, no pet.) .......................... 13

CKB & Assocs. v. Moore McCormack Petroleum, Inc.,
  809 S.W.2d 577 (Tex. App.—Dallas 1991, writ denied) .................................. 17

Ethan's Glen Community Ass'n v. Kearney,
   667 S.W.2d 287 (Tex. App.—Houston [1st Dist.] 1984, no writ) ...................... 9

Ferguson v. Bldg. Materials Corp. of Am.,
   295 S.W.3d 642 (Tex. 2009) .............................................................................17

Gulf States Abrasive Manufacturing, Inc. v. Oertel, 489 S.W.2d 184
   (Tex. Civ. App.—Houston [1st Dist.] 1972, writ ref'd n.r.e.) ...........................17

Horizon/CMS Healthcare Corp. v. Auld,
   34 S.W.3d 887 (Tex. 2000) .................................................................................7

In re R.A.,
       417 S.W.3d 569 (Tex. App.—El Paso 2013, no pet.) .............................18, 22

Kane v. Nat'l Union Fire Ins. Co.,
   535 F.3d 380 (5th Cir. 2008) .............................................................................19

King Ranch, Inc. v. Chapman,
   118 S.W.3d 742 (Tex. 2003) ...............................................................................5

Lopez v. Munoz, Hockema & Reed, L.L.P.,
   22 S.W.3d 857 (Tex. 2000) ...............................................................................21



                                                      iv
Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,
   289 S.W.3d 844 (Tex. 2009) ...............................................................................5

McConnell v. Southside ISD,
  858 S.W.2d 337 (Tex. 1993) ............................................................................... 6

Nine Greenway Ltd. v. Heard, Goggan, Blair & Williams,
   875 S.W.2d 784, 787 (Tex. App.—Houston [1st Dist.] 1994, writ denied) .....20

Nixon v. Mr. Prop. Mgmt. Co.,
   690 S.W.2d 546 (Tex. 1985) ...............................................................................5

Nootsie Ltd. v. Williamson Cnty. Appraisal Dist.,
   925 S.W.2d 659, 662 (Tex. 1996) ..................................................................... 20

Provident Life & Accident Ins. Co. v. Knott,
   128 S.W.3d 211 (Tex. 2003) ...............................................................................5

Wells v. Dotson,
   261 S.W.3d 275 (Tex. App.—Tyler 2008, no pet.)...........................................16

                                      RULES AND STATUTES
11 U.S.C. § 522(b)(2) (2012) ................................................................................... 20

11 U.S.C. § 554(c) (2012) ........................................................................................ 19

TEX. CIV. PRAC. & REM. CODE ANN. ANN. § 16.035 (West 2014) ..................... 15

TEX. CIV. PRAC. & REM. CODE ANN. ANN. § 16.051 (West 2014) ............... 12, 15

TEX. CIV. PRAC. & REM. CODE ANN. § 16.069 (West 204) .........................4, 16–17

TEX. PROP. CODE ANN. § 5.062 (West 2014) ............................................... 11, 12

TEX. PROP. CODE ANN. §5.064 (West 2014)................................................ vii, 11

TEX. PROP. CODE ANN. § 5.076 (West 2014)............................................... vii, 11


                                                         v
TEX. PROP. CODE ANN. § 5.077 (West 2014)............................................... vii, 11

TEX. PROP. COD ANN. § 5.085(b) (West 2014) ............................................ vii, 11

TEX. R. CIV. P. 93 ............................................................................................. 20

TEX. R. CIV. P. 94 ............................................................................................. 17
TEX. R. CIV. P. 166a(c) ......................................................................................... 5–6
TEX. R. EVID. 106 ..................................................................................................... 18

TEX. R. EVID. 107 ..................................................................................................... 18

                                               SESSION LAWS

Act of June 18, 2005, 79th Leg., R.S., ch. 978, §§ 2, 7(a), 2005 Tex. Gen. Laws
    3280-81, 3285 (codified at Tex. Prop. Code § 5.062)....................................... 11

Act of May 21, 2001, 77th Leg., R.S. ch. 693, § 1, 2001 Tex. Gen. Laws 1319
    (amended 2005) (current version at Tex. Prop. Code 5.062). ........................... 11


                                    STATEMENT OF THE CASE

         1.01 On October 10, 2013, Appellant John Thomas Aiken (“Aiken”) filed

suit against Appellee Angelique S. Naylor (“Naylor”) in the 250th Judicial District

of Travis County, Texas, seeking (1) quiet title to property in dispute; (2) damages

for alleged violations under the Texas Debt Collections Act (hereinafter “TDCA”);

(3) damages for alleged violations of the Texas Property Code §5.076, 5.077,

5.085(b), and 5.064; (4) alleged damages for Money Had Received and Unjust

Enrichment; and (5) Declaratory Relief.


                                                           vi
      1.02 Naylor answered and filed counterclaims for breach of contract and

declaratory relief, among other claims and remedies.

      1.03 On March 24, 2014, Naylor moved for summary judgment. In her

motion, Naylor sought summary judgment on the ground that, because it is

undisputed that Aiken failed to exercise his option to purchase in accordance the

terms of the lease agreement (hereinafter “LWOP”)—namely, the option was not

evidenced by a notice in writing addressed to the Lessor, sent by registered mail to

the address of the Lessor on or before April 1, 2009, or otherwise—Aiken had no

claim to title of the property in question, and thus Aiken’s claim to quiet title failed

as a matter of law. Naylor also requested summary judgment on her claim for

breach of contract on the ground that Aiken stopped making his monthly payments

to Naylor.

      1.04 On June 5, 2014, the Honorable Gus Strauss rendered an order

granting Naylor’s motion for summary judgment.

      1.05 On August 14, 2014, Judge Strauss rendered a final judgment that

incorporated the order of June 5, 2014. It is from this judgment that Aiken

appeals.




                                          vii
              STATEMENT REGARDING ORAL ARGUMENT

      Naylor disputes the necessity for oral argument as this case involves only

well-settled principles of law and facts plainly apparent from the record.




                                         viii
                                 ISSUES PRESENTED

        2.01 Did the trial court correctly grant Naylor’s motion for summary

judgment?

        2.02 Did the trial court correctly dismiss Aiken’s claims for quiet title

where Aiken failed to exercise his option to purchase the property in accordance

with the terms of the lease and where Aiken has no other possible claim of title to

the property?

        2.03 Did the trial court correctly grant summary judgment on Naylor’s

breach of contract counterclaim where it is undisputed that Aiken failed to pay

rent?

        2.04 Did the trial court correctly grant summary judgment on Aiken’s

remaining claims because they have no basis in law or fact?

        2.05 Did the trial court correctly find that Naylor’s claims were not barred

by the statute of limitations?

        2.06 Is Naylor judicially estopped from asserting her claims in this lawsuit?

        2.07 Does Naylor have standing to assert her counterclaim for breach of

contract in this lawsuit?




                                          ix
TO THE HONORABLE COURT OF APPEALS:

                            STATEMENT OF FACTS

      3.01 Naylor is the fee simple owner of real property located at 1101

Durham Drive in Austin, Travis County, Texas (“1101 Durham”). CR 133. On or

about April 30, 2004, Naylor and Aiken entered into a lease agreement with an

option to purchase the property (“LWOP”). CR 133, 139-45.

      3.02 Section 5 of the LWOP required Aiken to pay Naylor $189,577.58 in

base rental payments, $5,000 of which was prepaid in cash and $184,577.58 of

which was tendered with a promissory note (“Note”) in favor of Naylor. CR 140.

In exchange, Naylor delivered possession of the property pursuant to the terms of

the LWOP. Id.

      3.03 Paragraph 23 of the LWOP granted Aiken “the option to purchase the

leased property . . . prior to April 1, 2009” so long as the option was “evidenced by

a notice in writing addressed to the Lessor, sent by registered mail to the address of

the Lessor . . . .” CR 143-44. Deed to the property was never delivered to Aiken

and, instead, was held in escrow until Aiken exercised the option. CR 133-34, 136.

However, Aiken never exercised his option “by sending a notice in writing

addressed to [Naylor], sent by registered mail to the address of [Naylor]” (or

otherwise), nor did Aiken produce any evidence that he sent any such notice in
accordance with the terms of the contract, and the option is now expired as a

matter of law. See CR 134.

          3.04 The Note, which was prepared in conjunction with the LWOP,

matured on April 30, 2009. CR 147. Pursuant to the Note, Aiken was required to

pay Naylor the entire principal of the Note upon maturity. Id. It is undisputed that

Aiken failed to make this payment to Naylor. CR 134.

          3.05 To accommodate Aiken, Naylor began accepting rental payments

from Aiken so that Aiken could continue to reside on the property. It is undisputed

that, after July 2013, Aiken stopped making his rental payments although he

continues to reside at the property. Id. Shortly thereafter, Naylor filed an eviction

suit in the Justice Court. Aiken then filed this lawsuit to delay a ruling in the

Justice Court and to continue to reside on Naylor’s property without paying a dime

for it.




                                          2
                        SUMMARY OF THE ARGUMENT

      4.01 The trial court correctly granted Naylor’s motion for summary

judgment, and this Court should affirm that ruling.

      4.02 Aiken failed to present to the trial court, and raises for the first time

on appeal, his contentions that the trial court erred in granting summary judgment

because the relief sought was in excess of what Naylor was entitled to under the

pleadings. This argument was not preserved and may not be considered as grounds

for reversal.

      4.03 Contrary to Aiken’s claim that the summary judgment relief requested

by Naylor was not supported by her pleadings, the relief requested by Naylor is

identical to the express language of her First Amended Counterclaim. CR 108-12.

By basing her summary judgment arguments on the claims and factual allegations

made in her counterclaim, Naylor gave Aiken “fair notice” of her arguments and

her requested relief.

      4.04 The trial court correctly granted Naylor a total summary judgment

rather than the partial summary judgment because Naylor clearly and expressly

argued that “all” of Aiken’s causes of action failed as a matter of law. CR 129-30.

      4.05 There was no genuine issue of material fact as to who holds superior

title to the property in question because Aiken never exercised his option to



                                         3
purchase the property in accordance with the terms of the LWOP. CR 133-34.

That option has expired, and Aiken has no other possible claim to title of the

property.

       4.06 Naylor’s counterclaims are not barred by the statute of limitations.

The cause of action for failure to pay rents accrued in August 2013 when Aiken

stopped making rental payments, and the limitations period for breach of contract

is four years. CR 134. Alternatively, even if Naylor’s counterclaims had been

untimely, they were revived under section 16.069 of the Texas Civil Practice and

Remedies Code when Aiken filed his lawsuit regarding the same transaction on

which Naylor’s counterclaims are based, and Naylor filed her counterclaim within

30 days after the date on which her answer was required.

       4.07 Aiken waived his judicial estoppel argument by failing to plead it to

the trial court.

       4.08 Naylor does not lack standing or capacity to pursue her counterclaim

for breach of contract in this lawsuit.




                                          4
                     ARGUMENTS AND AUTHORITIES

A.    Standard of Review – Texas Rule of Civil Procedure 166a.

      5.01 A trial court’s decision to grant summary judgment is reviewed de

novo using the standards for summary judgment set forth in Texas Rule of Civil

Procedure 166a. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211,

215-16 (Tex. 2003). A court of appeals must determine whether the successful

movant carried its burden of demonstrating that there is no genuine issue of

material fact and that it is entitled to judgment as a matter of law. TEX. R. CIV. P.

166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844,

848 (Tex. 2009); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985).

      5.02 Appellate review of a no-evidence summary judgment is governed by

the same legal sufficiency standard as directed verdicts. King Ranch, Inc. v.

Chapman, 118 S.W.3d 742, 750 (Tex. 2003).

B.    Aiken failed to present to the trial court, and raises for the first time on
      appeal, his contentions that the trial court erred in granting summary
      judgment because the relief sought was in excess of what Naylor was
      entitled to under the pleadings, and therefore this argument may not be
      considered as grounds for reversal.

      5.03 In summary judgment practice, the non-movant must expressly

present to the trial court, by written answer or response, any issues defeating the

movant’s entitlement to summary judgment. Issues not so expressly presented to



                                          5
the trial shall not be considered on appeal as grounds for reversal. TEX. R. CIV. P.

166a(c). McConnell v. Southside ISD, 858 S.W.2d 337, 353 (Tex.1993). Here,

Aiken did not present the cited issues to the trial court, and therefore, they are not

grounds for reversal.

C.    Naylor’s summary judgment motion was consistent with and supported
      by the claims and factual allegations asserted in her First Amended
      Counterclaim.
      5.04 Aiken’s first argument is that Naylor’s summary judgment motion

was not supported by her pleadings. As stated above, Aiken raises this issue for

the first time on appeal. In addition, Aiken claims that, while Naylor sought

summary judgment on her breach of contract claim on the ground that Aiken failed

to make his payments under the LWOP, such facts were not alleged in Naylor’s

pleadings.

      5.05 Contrary to Aiken’s assertion, Naylor clearly and expressly alleges

that Aiken stopped making payments under the LWOP in paragraphs 10 and 11 of

Naylor’s First Amended Counterclaim: “To accommodate Plaintiff, Naylor began

accepting rental payments from Plaintiff so that he could continue to lease the

Property. . . . On or about July 2013, Plaintiff stopped making payments, and

Naylor filed an eviction suit in the Justice Court.” CR 109. Then, in paragraph 12

of her First Amended Counterclaim, Naylor expressly incorporated these factual



                                          6
allegations into her allegations regarding her breach of contract claim. CR 109-10.

Accordingly, the factual allegations on which Naylor’s summary judgment motion

was based were expressly alleged in her pleadings, and Aiken’s argument is

without merit and should be rejected.

      5.06 Moreover, Texas follows the “fair notice” standard for pleadings.

Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 896 (Tex. 2000) (quoting

Broom v. Brookshire Bros., Inc., 923 S.W.2d 57, 60 (Tex. App.—Tyler 1995, writ

denied). The relevant consideration under this standard is “whether the opposing

party can ascertain from the pleading the nature and basic issues of the controversy

and what testimony will be relevant.” Id. The purpose of the fair notice pleading

is to ensure that the opposing party has enough information to enable it to prepare a

defense against the claim. Id. at 897 (citing Roark v. Allen, 633 S.W.2d 804, 810

(Tex. 1982)). When the opposing party does not specially except to the pleadings,

the court should review the pleadings liberally in favor of the pleader. Id. Here,

Naylor’s pleading provided Aiken with adequate notice as to the nature and issues

of the controversy. Further, Aiken did not specially except to Naylor’s pleadings,

and therefore, this Court must construe Naylor’s pleadings liberally in favor of

Naylor. Id. For these reasons, Aiken had fair and adequate notice of the facts




                                          7
upon which Naylor’s claims were based and the trial court’s grant of summary

judgment in favor of Naylor is correct.

       5.07 Aiken also argues that Naylor’s request in her motion for declaratory

judgment—that no legitimate title dispute exists and that Naylor is not precluded

from pursuing her eviction lawsuit in the Justice Court—were not requested in her

pleadings.      See Appellant’s Brief ¶ 5.08.    Contrary to Aiken’s assertion, in

paragraph 23 of her First Amended Counterclaim, Naylor expressly requested this

exact relief:

       Naylor requests that declaratory judgment be rendered under Chapter
       37 of the Texas Civil Practice and Remedies Code as follows: . . . (c)
       declaring the relationship of Naylor and [Aiken] is now that of Lessor
       and Lessee, no legitimate title dispute exists, and Naylor is not
       precluded to pursue her eviction action in the Justice Court.
CR 111 (emphasis added). Again, Aiken’s argument is refuted by the clear,

express language of Naylor’s pleadings.         Therefore, the Court should reject

Aiken’s argument and affirm the trial court’s ruling.

       5.08 Finally, Aiken argues that the trial court erred by enjoining Aiken

from “asserting any claim or interest in or to the Property or any part of it,”

claiming that the Court lacks authority for this order and that Naylor did not plead

for such relief. See Appellant’s Brief ¶ 5.14. Contrary to Aiken’s assertion, "[t]he

right to possession necessarily follows the adjudication of title, and the right to



                                          8
such possession may be awarded in the title action . . . ." Ethan's Glen Community

Ass'n v. Kearney, 667 S.W.2d 287, 290 (Tex. App.—Houston [1 Dist.] 1984, no

writ). Thus, Appellant’s own assertion of a title contest opened the door to the

issue of possession, and therefore, it is appropriate and necessary to include in the

final judgment an order on the issue of possession. See Kearney, 667 S.W.2d at

290. Any order to the contrary would render moot the Court’s title determination.

      5.09 In conclusion, as set forth above, Naylor’s motion for summary

judgment is entirely consistent with Naylor’s pleadings and, in fact, tracks the

express language of those pleadings. Aiken’s argument that Naylor’s summary

judgment was not supported by the pleadings is without any basis and offers this

Court no reason to reverse the trial court’s judgment.

D.    Aiken’s claims under the Texas Debt Collections Act, under the Texas
      Property Code, and for declaratory judgment are without merit, and
      therefore, the trial court did not err in granting summary judgment in
      favor of Naylor.
      5.10 Aiken next argues that Naylor was entitled to only a partial summary

judgment because the motion did not specifically address some of Aiken’s claims

or Naylor’s counterclaim for “breach of the lease agreement.” See Appellant’s

Brief ¶ 5.12. First, with regard to Aiken’s claims, Naylor’s motion for summary

judgment clearly and expressly argued that judgment should be granted on all of

Aiken’s claims: “As a result, Plaintiff’s option to purchase expired, and Plaintiff is


                                          9
without any legal or equitable claim to title. For this reason, all of Plaintiff’s

claims are without merit, he is merely a lessee, and Naylor is entitled to a no-

evidence summary judgment on Plaintiff’s claims.” CR 129-30 (emphasis added).

For this reason, Aiken’s argument fails.

      5.11 Next, with respect to Aiken’s Debt Collection claim, Naylor moved

for traditional and no-evidence summary judgment based on her argument that

Aiken’s title contest is without merit, she owns 1101 Durham, and Aiken is merely

a lessee. CR 127-30. Consequentially, the trial court affirmed her argument and

ruled that the sale never occurred because Aiken failed to exercise his option. CR

407-09. If the sale never occurred, no debt exists, and Aiken is precluded from

establishing any of the elements to his Debt Collection claim, and thus Naylor is

entitled to summary judgment on that claim. In any event, Aiken provided no

evidence in support of his claim. For these reasons, the trial court did not err in

granting summary judgment in favor of Naylor with respect to Aiken’s Debt

Collections claim.

      5.12 Next, with respect to Aiken’s Property Code violations, each of the

violations Aiken claims is predicated upon the existence of an executory contract.

See TEX. PROP. CODE § 5.064, 5.076, 5.077, 5.085(b). The current version of

section 5.062(a)(2) of the Property Code states that “an option to purchase real



                                           10
property that includes or is combined or executed concurrently with a residential

lease agreement” is considered an executory contract for conveyance purposes.

TEX. PROP. CODE § 5.062(a)(2). However, that section, amended in 2005, applies

only to “an executory contract for conveyance entered into on or after January 1,

2006.” Act of June 18, 2005, 79th Leg., R.S., ch. 978, §§ 2, 7(a), 2005 Tex. Gen.

Laws 3280-81, 3285 (codified at Tex. Prop. Code § 5.062). See Exhibit C. In this

case, the parties executed the LWOP on or about April 30, 2004, over two years

prior to the applicability of the law upon which Aiken relies. The version of the

law in effect for purposes of the LWOP in this case makes no similar provision.

Act of May 21, 2001, 77th Leg., R.S. ch. 693, § 1, 2001 Tex. Gen. Laws 1319

(amended 2005) (current version at Tex. Prop. Code 5.062).          See Exhibit D.

Therefore, the facts here fail to establish the existence of an executory contract,

chapter 5 of the Property Code is not applicable, and the trial court did not err in

granting summary judgment in favor of Naylor on Aiken’s various allegations of

Property Code violations.

      5.13 Alternatively, at the time Aiken asserted his claims under the Property

Code on October 10, 2013, the option to purchase under the LWOP had already

expired under its own terms, rendering the contact—at best—a mere lease

agreement. Thus, the LWOP did not meet the criteria of even the current version



                                         11
of section 5.062 by the time Aiken asserted his claim. Therefore, it was not an

executory contract, and chapter 5 of the Property code is not applicable.

      5.14 Alternatively, Aiken’s Property Code claims are subject to a four-year

statute of limitations, and therefore, would be subject to the affirmative defense.

See TEX. CIV. PRAC. & REM. CODE ANN. § 16.051 (West 2014). For any of these

reasons, the trial court did not err in awarding Naylor summary judgment on

Aiken’s claims of Property Code violations.

      5.15 Next, with respect to Naylor’s counterclaim for breach of contract,

Naylor’s motion for summary judgment specifically addresses that counterclaim.

See CR 109-10, 130. Naylor did not have a separate counterclaim for “breach of

the lease agreement,” and thus Aiken’s argument regarding this alleged claim is

without any basis whatsoever. Moreover, to the extent that Naylor’s breach of

contract claim was based on Aiken’s failure to make payments, Naylor’s motion

for summary judgment expressly addressed this allegation.

      5.16 In summary, based on Aiken’s failure to establish a claim to title, the

pleadings on file, and the uncontroverted summary judgment evidence attached to

Nalyor’s Motion for Summary Judgment, Aiken’s claims are all without merit, and

therefore, the trial court correctly granted summary judgment in favor of Naylor.




                                         12
E.    There is no genuine issue of material fact as to who holds superior title
      to the subject property, and therefore, the trial court’s grant of
      summary judgment in favor of Naylor is correct.
      5.17 Aiken argues that the trial court should not have granted summary

judgment because there were fact issues as to who holds superior title to the

property in question. See Appellant’s Brief ¶ 5.17. Contrary to his assertion, there

is no genuine issue of material fact as to who holds superior title to the property.

Unless and until Aiken successfully exercised his option to purchase, Naylor

retained superior title to the property. Cf. Besteman v. Pitcock, 272 S.W.3d 777,

784 (Tex. App.—Texarkana 2008, no pet.) (holding option period expired and

reversing trial court’s order of specific performance). No genuine issue of material

fact exists as to whether Aiken exercised his option to purchase or whether the

option expired because it is undisputed that the option was not evidenced by a

notice in writing addressed to the Lessor, sent by registered mail to the address of

the Lessor on or before April 1, 2009. Cf. id.; CR 134. Moreover, Aiken has no

other possible claim to title other than through the option that he failed to exercise.

Therefore, no genuine issue of material fact exists as to who holds superior title to

the property, and the trial court did not err in granting summary judgment in favor

of Naylor on this issue.




                                          13
      5.18 Next, no genuine issue of material fact exists as to whether execution

of the LWOP terminated the lease. Under section 5 of the LWOP, until Aiken

tendered full payment of the principal balance of the Note, rents under the lease

were due to Naylor. See CR 140. Since there is no genuine issue of material fact

as to Aiken’s failure to tender the principal balance of the Note, the lease remained

in effect. It follows that no genuine issue of material fact exists as to whether the

execution of the LWOP terminated the lease, and the trial court did not err in

granting summary judgment in favor of Naylor.

      5.19 Further, to the extent that Aiken claims that that he had a claim to title

because he received a deed from Naylor for the property, that assertion is

completely unsupported by the record. To the contrary, no deed or deed of trust

was ever given to, delivered, or otherwise tendered to Aiken. Instead, pursuant to

the terms of the parties’ Document Escrow Agreement, the deed to the property

was held in escrow pending Aiken’s exercise of his option to purchase. CR 133-

34, 136. Since Aiken plainly failed to exercise his option, he never received the

deed, he was unable (and thus failed) to produce the original deed to the trial court,

and therefore, the undelivered deed cannot form the basis of any claim to title of

the property by Aiken. In sum, there is no genuine issue of material fact as to the

title of the property because Aiken failed to exercise his option to purchase and has



                                          14
no other possible claim of title to the property, and therefore, the trial court’s

summary judgment was correct.

F.    Naylor’s claims for breach of contract and declaratory judgment are
      not barred by the statute of limitations.

      5.20 Aiken next argues that Naylor’s claims are barred by limitations. See

Appellant’s Brief ¶¶ 5.21—.24. This argument is without merit.1 Naylor’s breach

of contract claim regarding the failure to pay rents did not accrue until Aiken

refused to pay rents after July 2013. CR 134. The applicable limitations period is

four years. TEX. CIV. PRAC. & REM. CODE §16.051. Here, Naylor filed her

counterclaim on October 13, 2013, and her first amended counterclaim on March

19, 2014, well within the four-year period. Therefore, her claim is not barred by

limitations, and Aiken’s argument must be rejected.

      5.21 Alternatively, section 16.069 of the Texas Civil Practice and

Remedies Code provides as follows:



1
       The statute cited by appellant—section 16.035 of the Texas Civil Practice
and Remedies Code—applies to a suit for the recovery of real property under a real
property lien or the foreclosure of a real property lien. TEX. CIV. PRAC. & REM.
CODE § 16.035. Naylor’s suit does not attempt to recover real property under a
real property lien or foreclose on a real property lien. Instead, her suit seeks
contractual damages and a declaratory judgment. CR 108-23. Also, the statute on
its face does not purport to apply to appellee's counterclaim for a declaratory
judgment.



                                        15
      If a counterclaim or cross claim arises out of the same transaction or
      occurrence that is the basis of an action, a party to the action may file
      the counterclaim or cross claim even though as a separate action it
      would be barred by limitation on the date the party's answer is
      required.

TEX. Civ. PRAC. & REM. CODE § 16.069(a). In order for a counterclaim to be

revived, the defendant must file the counterclaim no later than 30 days after the

answer is due. See id. § 16.069(b). The purpose of this section is to prevent a

party from waiting until an opponent’s valid claim that arises out of the same

transaction or occurrence is time-barred before asserting its own claim.2 Wells v.

Dotson, 261 S.W.3d 275, 281 (Tex. App. Tyler 2008, no pet.) (citing Hobbs

Trailers v. JT Arnett Grain Co., Inc., 560S.W.2d 85, 88-89 (Tex. 1977).

      5.22 Here, Aiken filed his Original Petition on October 10, 2013, and an

Amended Petition on October 14, 2013. CR 4, 25. In these pleadings, Aiken

asserted claims related to the parties’ transaction regarding the property in

question, which is the same transaction upon which Naylor’s breach of contract

claim is based. CR 5-14, 26-33, 41. Naylor then filed her breach of contract

counterclaim in the same document as her Original Answer on November 13,

2013, which satisfies the 30-day requirement of section 16.069(b). CR 41. Since


2
 Aiken attempted to get away with exactly the type of conduct this law was created
to protect against: waiting out your opponent’s valid claim in order to catch a
major windfall.


                                         16
Naylor’s claims were revived under section 16.069, they were not barred by

limitations, and the trial court did not err in granting Naylor summary judgment on

her breach of contract counterclaim.

G.    Aiken’s judicial estoppel argument was not specifically pled and
      therefore is waived.
      5.23 Aiken next argues that Naylor should be judicially estopped from

asserting any claims related to the parties’ transactions because she did not disclose

information related to the transactions in her 2010 bankruptcy proceedings. See

Appellant’s Brief ¶¶ 5.25—.35. Even assuming these allegations are true, Aiken

failed to plead the affirmative defense, and therefore, the defense is waived.3 TEX.

R. CIV. P. 94; CKB & Assocs. v. Moore McCormack Petroleum, Inc., 809 S.W.2d

577, 584 (Tex. App.—Dallas 1991, writ denied) (“Estoppel is an affirmative

defense. It is lost if not specifically pleaded.”); Gulf States Abrasive

Manufacturing, Inc. v. Oertel, 489 S.W.2d 184, 188 (Tex. Civ. App.—Houston

[1st Dist.] 1972, writ ref'd n.r.e.) (“Judicial estoppel is an affirmative defense, and

must be specially pleaded.”).



3
       Even if Aiken had not waived the defense, judicial estoppel mandates that an
unfair advantage be sought by the party being estopped. See Ferguson v. Bldg.
Materials Corp. of Am., 295 S.W.3d 642, 643 (Tex. 2009). Surely it cannot be
argued that a landlord asserting her contractual rights in defending a claim of title
by her tenant is seeking an unfair advantage against that tenant who is seeking a
free house.


                                          17
      5.24 Alternatively, judicial estoppel does not apply. First, there was no

asset to disclose at the time of the filing of the case: the LWOP expired by its own

terms in 2009 prior to the filing of the bankruptcy case by Naylor in 2010 and,

therefore, Naylor had, or was entitled to, sole and undisputed possession of 1101

Durham at the time of the filing of the case. Second, even if there was an asset to

disclose, the issue was resolved when, in December 2013, Naylor voluntarily re-

opened her bankruptcy case and disclosed the literally worthless “asset.” Naylor

filed amended schedules in her case—specifically Schedules B and C—and, in an

“abundance of caution,” see Exhibit A at 5, disclosed the worthless asset. Naylor

now asks this Court to take judicial notice of the balance of the records from her

bankruptcy proceedings including the amended schedules, see Exhibit A, and the

docket report, see Exhibit B, for Cause No. 10-12009 filed in the United States

Bankruptcy Court, Western District of Texas, Austin Division. In re R.A., 417

S.W.3d 569, 576 (Tex. App.—El Paso 2013, no pet.); cf. TEX. R. EVID. 106, 107

(rule of optional completeness).

      5.25 Third, the value of the asset is unequivocally zero. This is reflected in

Naylor’s amended bankruptcy schedules, see Exhibit A at 5, and plainly admitted

by Aiken, see CR 28 (Aiken states in live pleadings he “continued to mistakenly

make payments” on the property after April 2009) and CR 158 (Aiken refers to



                                         18
LWOP as “a legal fiction” that “no longer exists”). Moreover, once the case was

reopened by the Bankruptcy Court and the amended schedules filed, the Chapter 7

Trustee concluded that the value of the claim was insignificant, which is

evidenced by the re-closing of the case on January 23, 2014, without issue. See

Exhibit B at 15. In other words, the Bankruptcy Trustee abandoned in favor of

Naylor any interest in the asset the Bankruptcy Estate may have had. See 11

U.S.C. 554(c) (2012). In summary, Aiken’s judicial estoppel argument, even if

preserved, is without merit.

H.    Naylor has standing and capacity to assert her breach of contract claim.

      5.26 Aiken’s final argument is that Naylor lacks standing to claim breach

of contract because she did not disclose the note, lease agreement, and Aiken’s

payments in her 2010 bankruptcy case. Citing Kane v. Nat’l Union Fire Ins. Co.,

535 F.3d 380, 385 (5th Cir. 2008), Aiken proposes that only the Bankruptcy

Trustee has standing to assert the breach of contract claim.       Again, Aiken’s

argument is without merit.

      5.27 First, Aiken confuses the concepts of standing and capacity. The

issue of standing focuses on whether a party has a sufficient relationship with the

lawsuit so as to have a justiciable interest in its outcome, whereas the issue of

capacity is conceived of as a procedural issue dealing with the personal



                                        19
qualifications of a party to litigate. Austin Nursing Ctr., Inc. v. Lovato, 171

S.W.3d 845, 849 (Tex. 2005). A plaintiff has standing when it is personally

aggrieved, regardless of whether it is acting with legal authority; a party has

capacity when it has the legal authority to act, regardless of whether it has a

justiciable interest in the controversy. Id. at 848–49. Standing is a component of

subject matter jurisdiction and can never be waived. Id. at 849. Unlike standing,

however, “an argument that an opposing party does not have the capacity to

participate in a suit can be waived.” Nootsie Ltd. v. Williamson Cnty. Appraisal

Dist., 925 S.W.2d 659, 662 (Tex. 1996) (citing TEX. R. CIV. P. 93).

      5.28 Here, Naylor—the named party in Aiken’s own lawsuit (as opposed to

the Bankruptcy Trustee who Aiken claims has exclusive interest in 1101

Durham)—is personally aggrieved by Aiken’s attempt to swindle her out of her

property. Thus, Aiken for the first time raises only an issue of capacity—not an

issue of standing. Because he raises this argument for the first time on appeal, it is

waived. Nine Greenway Ltd. v. Heard, Goggan, Blair & Williams, 875 S.W.2d

784, 787 (Tex. App.—Houston [1st Dist.] 1994, writ denied) (“A party who fails to

raise the issue of capacity through a verified plea waives that issue at trial and on

appeal.”).




                                          20
      5.29 Even if Aiken’s argument raises an issue of standing, which it does

not, Aiken’s own evidence demonstrates Naylor plainly listed the 1101 Durham

and the purchase money loan thereon on Schedules A and D, respectively, of her

Bankruptcy Petition Schedules. CR 212, 223. Further, 1101 Durham is property

exempted from the Bankruptcy Estate pursuant to title 11, section 522(b)(2) of the

United States Code. CR 219; 11 U.S.C. § 522(b)(2) (2012). Thus, this property is

not part of the Bankruptcy Estate and not subject to the control of the Bankruptcy

Trustee. Second, with regard to the Note, Naylor makes no attempt to enforce the

Note against Aiken in these proceedings or otherwise, and therefore, whether the

Note (assuming it is enforceable) was listed on the bankruptcy schedules is moot.

Third, Aiken is estopped from arguing the lease agreement should have been listed

on the bankruptcy schedules by his own live pleadings and arguments, which

plainly assert the LWOP is worthless. Cf. Lopez v Munoz, Hockema & Reed,

L.L.P., 22 S.W.3d 857, 864 (Tex. 2000) (“Quasi-estoppel precludes a party from

asserting, to another's disadvantage, a right inconsistent with a position previously

taken.”). Specifically, Aiken’s live pleadings state Aiken “continued to mistakenly

make payments” on the property after April 2009. CR 28 (emphasis added).

Further, Aiken calls the LWOP “a legal fiction” that “no longer exists . . . .” CR

158. In other words, Aiken himself admits the LWOP asset is worthless. For



                                         21
Aiken to now assert for the first time that Naylor lacks standing based on alleged

facts he himself previously denied—namely, that the LWOP has value—spits in

the face of justice and puts Naylor at a disadvantage and, therefore, must be

precluded by estoppel.4 For these reasons, Naylor should not be denied standing to

assert her breach of contract claim against Aiken.

      5.30 Alternatively, as discussed above, there was no asset to disclose at the

time Naylor filed her bankruptcy because the LWOP terminated by its own terms

in 2009 prior to the filing of the bankruptcy case in 2010.

      5.31 Alternatively, even if there was an asset to disclose, the issue was

resolved when, in December 2013, Naylor re-opened her bankruptcy case and

disclosed the literally worthless “asset.” See Exhibit A at 5.5 Specifically, her

bankruptcy records reflect a voluntary reopening of her bankruptcy case, an

amended filing disclosing the LWOP agreement only in “an abundance of

caution,” and a subsequent closing of the bankruptcy proceedings without any

4
      The record is void of any evidence showing that, at the time Naylor filed for
bankruptcy, she was receiving rental payments from Aiken. In any event, Naylor
has not sought recovery of past rents knowing such a claim is void of value, and
therefore, whether Naylor listed the rental payments on her bankruptcy schedules
is moot.
5
       Again, Naylor asks this Court to take judicial notice of the balance of the
records from her bankruptcy proceedings, Cause No. 10-12009 filed in the United
States Bankruptcy Court, Western District of Texas, Austin Division, which
Naylor filed prior to Aiken ever raising an issue of standing. In re R.A., 417
S.W.3d 569, 576 (Tex. App.—El Paso 2013, no pet.) (generally, appellate courts
take judicial notice of facts outside the record only to determine jurisdiction).


                                          22
substantive action taken by that Court or the Bankruptcy Trustee.               More

specifically, Naylor’s amended filing in that matter describes the asset as follows:

      Expired Lease with an option to purchase with John Thomas Aiken in
      the form of a "Wally Wrap" dated April 30, 2004. Contract expired by
      its own terms on April 30, 2009 as Aiken was unable to obtain his
      own financing as required by the terms of the contract prior to that
      time. Aiken was also in default as he had missed several payments on
      the property prior to that time. Although this contract expired by its
      own terms well prior to the filing of this case and is therefore
      valueless and unenforceable, it is listed here out of an abundance of
      caution. The real property subject to this expired lease is now owned
      entirely by Debtor. Debtor may have a possible claim against Aiken
      for the missed payments, but since so much time had passed between
      the expiration of the contract and the filing of the case, Debtor
      considers this claim to be valueless, too.

See Exhibit A. Thus, contrary to Aiken’s position, the asset was disclosed even

though all parties—including Aiken—agreed it was worthless.

      5.32 Alternatively, even if Naylor did not have standing to assert the

breach of contract claim in her original counterclaims, filed November 13, 2013,

she certainly had standing after her bankruptcy schedules were amended December

18, 2013, and the bankruptcy case re-closed January 23, 2014. To be sure, on

March 19, 2014, Naylor reasserted her breach of contract claim by filing her First

Amended Counterclaim. CR 108.

      5.33 Alternatively, there is at best a fact issue with regard Naylor’s

standing to sue for breach of contract on the LWOP, and this Court should remand



                                         23
this sole issue to the trial court to make findings of fact regarding Naylor’s

capacity to file suit and otherwise affirm the judgment of the trial court.




                                          24
                          CONCLUSION AND PRAYER

      For the reasons stated above, Appellee respectfully requests that this Court

(1) affirm the trial court’s Final Judgment, including the trial court’s awards of

attorneys’ fees, and (2) grant Appellee such other and further relief, either at law or

in equity, to which she is entitled.

                                        Respectfully submitted,


                                        /s/ Russell Frost
                                        Russell Frost
                                        State Bar No. 24063687
                                        Law Office of Russell Frost
                                        711 West 7th Street
                                        Austin, Texas 78701
                                        Tel: (512) 225-5590
                                        Fax: (512) 692-2895
                                        rfrost@russellfrostlaw.com
                                        ATTORNEY FOR APPELLEE
                                        ANGELIQUE S. NAYLOR




                                          25
                     CERTIFICATE OF COMPLIANCE

      I hereby certify that Appellee’s Brief complies with the word count limit of
Texas Rule of Appellate Procedure 9.4(i)(2)(B). Excluding the contents listed in
Texas Rule of Appellate Procedure 9.4(i)(1), this Brief contains 5481 words, as
counted by Microsoft Word.



                                             /s/ Russell Frost
                                             Russell Frost




                                        26
                        CERTIFICATE OF SERVICE

      This is to certify that on the 30th day of January, 2015, a true and correct
copy of the above and foregoing was forwarded to all counsel of record in
accordance with the Texas Rules of Civil and Appellate Procedure:

      WILLIAM B. GAMMON, SBN: 07611280
      KARLA HUERTAS, SBN: 24087765
      GAMMON LAW OFFICE, PLLC.
      COUNSEL FOR APPELLANT
      1201 Spyglass Drive, Suite 100
      Austin, Texas 78746
      Phone: 512-444-4529
      Fax: 512-545-4279




                                             /s/ Russell Frost
                                             Russell Frost




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