L. F. Clark Annie Rosalis Alice Tabor And Joyce Bailey v. City of San Antonio, Acting by and Through Its Agent, City Public Service Board of San Antonio And Milton Mundine

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN NO. 03-94-00039-CV L. F. Clark; Annie Rosalis; Alice Tabor; and Joyce Bailey, Appellants v. City of San Antonio, acting by and through its agent, City Public Service Board of San Antonio; and Milton Mundine, Appellees FROM THE DISTRICT COURT OF LEE COUNTY, 21ST JUDICIAL DISTRICT NO. 9678, HONORABLE HAROLD R. TOWSLEE, JUDGE PRESIDING Appellants L. F. Clark, Annie Rosalis, Alice Tabor and Joyce Bailey appeal from rulings on opposing summary judgments in a declaratory judgment action, rendered in favor of the City of San Antonio, by and through City Public Service Board of San Antonio ("CPSB") and Milton Mundine, third-party defendant. We will reverse the trial-court judgment granting CPSB's motion for summary judgment and affirm in part and reverse in part the court's ruling on Milton's motion for summary judgment. THE CONTROVERSY In two points of error, appellants challenge the trial court's judgment declaring CPSB to be the owner of approximately 105 acres located in Lee County ("the property") and denying the appellants' claims of ownership based on their theories of adverse possession and constructive trust. The recorded chain of title of the property is not in dispute. S. H. Mundine conveyed the property to one of his thirteen sons, Elbert Mundine, in 1922. In 1940 Elbert conveyed the property in undivided shares to three of his siblings, Titus Mundine, Lottie Mundine, and Milton Mundine. At the time of this conveyance, Titus was married to Bessie Mundine. Titus and Bessie divorced in 1953; their divorce decree, however, failed to mention or divide the property. In 1955, Titus conveyed his interest in the property to Milton, who conveyed his interest in the property to CPSB in 1983. Bessie did not join in the conveyance. On the same day, CPSB also purchased appellant Clark's interest in the same property. Appellants contend that because the 1953 divorce decree failed to dispose of the property, Titus and Bessie became tenants in common, each owning an undivided one-sixth separate property interest in the tract. Bessie died intestate in 1955, survived only by Rosalis, Tabor, and Bailey. Each claim to own an undivided one-eighteenth interest in the property by virtue of their inheritance from Bessie. In 1990, seven years after CPSB acquired legal title to the property, Rosalis, Tabor and Bailey executed a lease on the property to Clark. CPSB filed this declaratory judgment action seeking to clear title to the property. DISCUSSION AND HOLDINGS The standards for reviewing a motion for summary judgment are well established: (1) The movant for summary judgment has the burden of showing that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law; (2) in deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true; and (3) every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985). In their first point of error, appellants contend the trial court erred in granting CPSB's motion for summary judgment. Appellants' contentions are based upon the assumption that Bessie had a community-property interest in the property conveyed to Milton. Titus acquired the property by conveyance from Elbert while Titus was married to Bessie and then sold the property after they divorced. There is a strong presumption that property acquired during marriage is community property. Tex. Prop. Code Ann. § 5.02 (West 1993). If we assume for summary judgment purposes that the property was community property, Titus acquired legal title to the land CPSB now claims, as Titus was the only grantee named in the warranty deed, while Bessie acquired equitable title. Patty v. Middleton, 17 S.W. 909, 910-11 (Tex. 1891); Buckalew v. Butcher-Arthur, Inc., 214 S.W.2d 184, 193 (Tex. Civ. App.--Beaumont 1948, writ ref'd n.r.e.). CPSB contends that it qualifies as a bona fide purchaser for value (1) and that any interest of Bessie's heirs was extinguished upon CPSB's purchase of the land. A bona fide purchaser for value will prevail over a holder of prior equitable title. Wilson v. Meredith, Clegg & Hunt, 263 S.W.2d 511, 516 (Tex. Civ. App.--Beaumont 1954, no writ); Buckalew, 214 S.W.2d at 193; Ellett v. Mitcham, 145 S.W.2d 917, 919 (Tex. Civ. App.--Eastland 1940, writ dism'd). CPSB asserts that the holder of equitable title bears the burden to show that the holder of legal title is not an innocent purchaser, citing Westland Oil Development Corp. v. Gulf Oil Corp., 637 S.W.2d 903 (Tex. 1982) and Walters v. Pete, 546 S.W.2d 871 (Tex. Civ. App.--Texarkana 1977, writ ref'd n.r.e.). In Westland Oil, the supreme court stated that the plaintiff claiming an equitable interest in the land had the burden of proving on motion for summary judgment that the holder of the legal interest was not a bona fide purchaser for value. However, in Westland Oil the holder of the equitable interest was also the movant for summary judgment. Westland Oil, 637 S.W.2d at 904-08. The party asserting an equitable interest at a conventional trial on the merits bears the burden of proof. Walters, 546 S.W.2d at 876; Wilson, 263 S.W.2d at 516; Buckalew, 214 S.W.2d at 193; Ellett, 145 S.W.2d at 919. This rule does not, however, relieve the movant for summary judgment from conclusively proving all essential elements of its cause of action as a matter of law. Missouri-Kan.-Tex. Ry. Co. v. City of Dallas, 623 S.W.2d 296, 298 (Tex. 1981); David Hitner & Lynne Liberato, Summary Judgments in Texas, 20 St. Mary's L.J. 243, 267 (1989). The only disputed issue regarding CPSB's bona fide purchaser status is whether CPSB had notice of Titus's marriage to Bessie at the time of the purchase. A purchaser of land is not charged with knowledge of the marital history of each grantor in the chain of title, absent a recitation in the deed that would put the purchaser on notice. Stahl v. Westerman, 250 S.W.2d 325, 327 (Tex. Civ. App.--San Antonio 1952, no writ). CPSB lacked constructive notice of any interest Bessie had because there was no record of her interest in the chain of title; therefore, we are concerned only with actual notice, express or implied. See Westland Oil, 637 S.W.2d at 911-12 (Wallace, J., dissenting). CPSB provided the affidavits of C. Michael Montgomery, CPSB's attorney handling the purchase, and F. R. Rinner, CPSB's landman at the time of the purchase, to establish that CPSB was without notice of Titus's marriage to Bessie. (2) Appellants contend the affidavits of Montgomery and Rinner, which purport to prove that CPSB lacked notice, do not constitute competent summary judgment evidence under rule 166a. See Tex. R. Civ. P. 166a. These affidavits, appellants assert, could not be readily controverted because the affidavits only state that the affiants had no personal knowledge of any notice possessed by the city or by city representatives and did not state conclusively that the city did not have personal knowledge. Summary judgment based upon the affidavit of an interested expert witness may be upheld if the affidavit meets the requirements of rule 166a of the Texas Rules of Civil Procedure. Anderson v. Snider, 808 S.W.2d 54, 55 (Tex. 1991); Shook v. Herman, 759 S.W.2d 743, 746-47 (Tex. App.--Dallas 1988, writ denied). Thus, the subject matter of the affidavit must be that of "which the trier of fact must be guided solely by the opinion testimony of experts," if the testimony is "clear, positive and direct, otherwise credible and free from contradictions and inconsistencies, and could have been readily controverted." Tex. R. Civ. P. 166a(c). Additionally, the affidavits must be made on personal knowledge and be admissible in evidence. Tex. R. Civ. P. 166a(f); Har-Con Corp. v. Aetna Casualty & Sur. Co., 757 S.W.2d 153 (Tex. App.--Houston [1st Dist.] 1988, no writ). Mere legal conclusions will not support summary judgment. Anderson, 808 S.W.2d at 55; Hidalgo v. Surety Sav. & Loan Ass'n, 487 S.W.2d 702, 703 (Tex. 1972). The attorney and the landman for the city have personal knowledge of whether they were personally informed of Bessie's interest in the property. The question remains, however, whether this personal knowledge proves as a matter of law that CPSB had no actual notice of Titus's marriage to Bessie. Notice is usually a fact question for the trier of fact; it becomes a question of law only when ordinary minds could not differ as to proper conclusions to be drawn from the evidence. O'Ferral v. Coolidge, 228 S.W.2d 146, 148 (Tex. 1950); Crystal City Indep. Sch. Dist. v. Crawford, 612 S.W.2d 73, 75 (Tex. Civ. App.--San Antonio 1980, writ ref'd n.r.e.). Appellants argue that the affiants' statement that they did not know of anyone who knew of the marriage did not negate unequivocally that someone employed by the city possessed actual knowledge. To support their argument, appellants cite Lewisville State Bank v. Blanton, 525 S.W.2d 696 (Tex. 1975). The supreme court in Blanton reversed a summary judgment on the basis that an affidavit by an interested party stating matters of which the party's adversaries had no knowledge or means of confirmation did no more than raise an issue of fact and is incompetent to support summary judgment. Id. at 696. Blanton, the owner of legal title to real property, sued to remove a cloud on his title placed there by judgment creditors of his predecessor in title. The trial court granted Blanton's motion for summary judgment based on Blanton's affidavit stating that he had acquired equitable title by agreement with his predecessor in interest before the lien attached. The supreme court held that Blanton's affidavit did not conclusively establish the essential facts, could not be readily, refuted and therefore would not support summary judgment. Id. at 696. As in Blanton, appellants could not easily controvert CPSB's assertion that it was without knowledge. Appellants also rely on Wise v. Dallas Southwest Media Corp., 596 S.W.2d 533, 536 (Tex. Civ. App.--Beaumont 1979, writ ref'd n.r.e.). In Wise, a public official brought a libel action against a magazine. The magazine moved for summary judgment on the basis that the article was not written with malice. Affidavits filed on behalf of the magazine stated the affiants' belief that the challenged article was a fair and accurate statement. Thus, they claimed to disprove malice as a matter of law. The court held that the unilateral subjective determination of facts and opinions inferred from those facts did not constitute competent summary-judgment "evidence." Id. at 536. In the present cause, appellants were similarly confronted with disproving a state of mind that could only be irrefutably confirmed by their adversaries. In response, CPSB argues that the affidavit of a person in a position to know is sufficient to show no notice as a matter of law. Ursic v. NBC Bank South Texas, N.A., 827 S.W.2d 334, 336 (Tex. App.--Corpus Christi 1991, writ denied) (affidavit of president and CEO of bank sufficient to show that neither he nor anyone else at bank knew of adverse claim to property); Har-Con, 757 S.W.2d at 156 (affidavit of corporate officer denying receipt of cancellation notice held sufficient to support summary judgment). In Har-Con, the court denied summary judgment on the basis that the officer's denial of receipt of notice raised an inference that the notice was not mailed. Cf. Jimmy Swaggart Ministries v. City of Arlington, 718 S.W.2d 83, 86 (Tex. App.--Fort Worth 1986, no writ) (testimony of three attorneys insufficient to rebut presumption that law firm received notice of dismissal order). We reject CPSB's contention that Montgomery and Rinner's affidavits may be used offensively to prove as a matter of law that CPSB had no notice. We follow instead the supreme court's mandate in Blanton. The record shows that Rinner negotiated the contract with Milton and that Montgomery drew up the contract for the city. The record does not reflect that these were the only representatives of CPSB involved in the purchase. Nor does the record prove conclusively that Montgomery and Rinner were without notice. CPSB, in its interrogatories to appellants, asked each appellant what they knew about CPSB's knowledge of the marriage. Tabor, Rosalis, and Bailey each answered, "[i]t seems very likely to me that Milton Mundine told somebody from the City of San Antonio about the interest in the property." Clark answered: It is my understanding that agents of the City of San Antonio, either through conversations with Milton Mundine or Tim Kleinschmidt or the firm which prepared an Abstract of Title, had knowledge of the items set forth in Interrogatory No. 6. At the time the City of San Antonio paid L.F. Clark for some interest in the Mundine tract, L.F. Clark told the San Antonio representative that there were additional heirs whose interest had not been purchased. As I recall, the persons present were including myself, the title company employees, the attorneys for the City of San Antonio and Tim Kleinschmidt, and my wife, LaVern Clark. Both Milton and Tim Kleinschmidt, Clark's attorney, were deposed and neither could recall whether they informed CPSB about Titus's marriage to Bessie. Milton testified that, during his negotiations with Rinner regarding the sale of the land, Rinner had a preliminary list of the Mundine family members who may have had an interest in the property and that they discussed who should be included in the list. CPSB must first produce competent summary-judgment "evidence" to show conclusively that the city was without knowledge. Only then must the appellants produce any controverting summary judgment proof of notice. City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-79 (Tex. 1979); Pinckley v. Gallegos, 740 S.W.2d 529, 531 (Tex. App.--San Antonio 1987, writ denied). After indulging every reasonable inference in favor of appellants, we are not persuaded that CPSB has met its burden of proof. We sustain appellants' first point of error. Mr. Property Management Co., 690 S.W.2d at 548-49. In their second point of error, appellants contend that the trial court erred in granting Milton's motion for summary judgment. Appellants had requested the court to impose a constructive trust, based on fraud, upon the money Milton received from the sale of the property to CPSB. Milton moved for summary judgment on theories of limitation and failure of counter-plaintiffs to show the elements of constructive trust. The trial court did not specify which of Milton's theories it relied upon in granting the summary judgment, therefore summary judgment may be upheld on appeal if any of the theories advanced are meritorious. Tex. R. Civ. P. 166a; Hayes v. E.T.S. Enters., 809 S.W.2d 652, 654 (Tex. App.--Amarillo 1991, writ denied). The discovery rule applies in an action for fraud. Thus, the four-year statute of limitations, which applies in all actions based on fraud, begins to run from the time the fraud is discovered or should have been discovered by a reasonably prudent person exercising reasonable diligence. Williams v. Khalaf, 802 S.W.2d 651, 658 (Tex. 1990); Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 517 (Tex. 1988). Therefore, Milton, as a defendant seeking summary judgment based on the affirmative defense of limitations, must prove as a matter of law when appellants discovered or should have discovered the fraud. Burns v. Thomas, 786 S.W.2d 266, 267 (Tex. 1990). Milton submits as proof that the four year statute of limitations expired his requests for admissions propounded to Rosalis, Tabor, and Bailey and the exhibits attached thereto. The following requests were answered: 27. In 1984, Annie Rosalis, Alice Tabor and Joyce Bailey authorized attorney Steven Keng to send a letter to the City of San Antonio asserting an interest in the property. RESPONSE: Admit that Rosalis, Tabor and Bailey authorized Keng in 1983 to assert an interest in property described in Keng's letter attached as Exhibit "E" 28. A true and correct copy of the letter described in the preceding Request for Admission is attached hereto as Exhibit "E." RESPONSE: Admitted * * * * 30. In February of 1984, William F. Nowlin, an attorney acting on Plaintiff's behalf, sent Steven Keng a letter stating San Antonio's position that you did not own any interest in the property. RESPONSE: Admitted Keng's letter, dated February 16, 1984, (3) stated that Rosalis, Tabor and Bailey acknowledged CPSB's purchase of the property from Clark and Milton, but denied that appellants' claim of an undivided one-sixth interest in the property was included in the purchase. By letter dated February 28, 1984, Nowlin, attorney for CPSB, notified Keng that CPSB recently acquired all the property from Clark and Milton and that Rosalis, Tabor, and Bailey no longer held any interest in the property. The letter explained that if a husband acquires community property in his name only, his wife retains only an equitable interest, rather than a legal interest. Further, Nowlin asserted that "[p]urchasers of the apparent legal title for value, without notice of equities in the wife or her heirs, take free of such equities." After citing several Texas Supreme Court cases, Nowlin clearly stated that CPSB "acquired the legal and equitable title to the Property free and clear of and from any enforceable claim, right, title or interest of your clients as the purported heirs of Bessie Mundine." Appellants assert that Nowlin's letter only put them on notice of CPSB's position regarding appellants' claims of ownership, but did not alert them to any fraud that may have been perpetrated by Milton. We disagree. Nowlin's letter unequivocally informs appellants that the city denied having any knowledge of Bessie. Rosalis, Tabor, and Bailey are charged with the knowledge a reasonably prudent person exercising due diligence would have discovered after inquiry. Woods, 769 S.W.2d at 517; Courseview, Inc. v. Phillips Petroleum Co., 312 S.W.2d 197, 205 (Tex. 1957). Nowlin's letter was sufficient to put appellants on inquiry notice of any fraud perpetrated by their uncle Milton. Finally, appellants object to Nowlin's hearsay letter because, they contend, the letter was offered to prove the truth of the matter asserted. On the contrary, Milton submitted Nowlin's letter to show that the letter was received and that appellants had knowledge of its contents. See Tex. R. Civ. Evid. 801. Appellants Tabor and Bailey have not established an issue of fact by their affidavits stating that they did not know that Milton had concealed from the city, until August 1991 Titus's marriage to Bessie. The information provided in Nowlin's letter was more than sufficient to prompt a reasonably prudent person to inquire into any matters surrounding the conveyance of the property. Over seven years elapsed between the date of Nowlin's letter and the time that CPSB filed its declaratory judgment action. We therefore overrule appellants' second point of error based on the bar of the statute of limitations. ATTORNEY'S FEES CPSB and Milton were awarded reasonable and necessary attorney's fees in the amounts of $5,000 and $2,500 respectively. In a declaratory judgment action the trial judge may award reasonable and necessary attorney's fees as are equitable and just. See Tex. Civ. Prac. & Rem. Code Ann. § 37.009 (West 1986). The trial court's decision to award attorney's fees will not be reversed on appeal absent a showing that the trial court abused its discretion. Oake v. Collin County, 692 S.W.2d 454, 455 (Tex. 1985); Knighton v. I.B.M. Corp., 856 S.W.2d 206, 210 (Tex. App.--Houston [1st Dist.] 1993, writ denied). In light of our reversal of the trial-court judgment granting summary judgment to CPSB, we also reverse the award of attorney's fees to CPSB. Milton submitted the affidavit of Pamela K. Giese in support of the court's award of attorney's fees. Giese's affidavit states only that she is familiar with the fees charged by attorneys in Lee and surrounding counties and that $2,500 represents a reasonable and necessary fee in this case. Appellants complain that Giese's affidavit is conclusory in that it does not state the number of hours worked, the nature of the work, or the usual fee Giese charges for the same kind of work. We agree. In awarding attorney's fees, the trial court must consider the following factors: (1) the nature and complexity of the case; (2) the nature of the services provided by counsel; (3) the time required for trial; (4) the amount of money involved; (5) the client's interest at stake; (6) the responsibility imposed upon counsel; (7) and the skill and expertise required. Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 881 (Tex. 1990). The affidavit does not speak to these relevant factors. Milton as movant for summary judgment did not meet his burden of proof on attorney's fees. We hold accordingly that the trial court abused its discretion in awarding attorney's fees to Milton in the amounts indicated. CONCLUSION We reverse the portion of the trial-court judgment granting summary judgment in favor of CPSB including the award of attorney's fees and remand that port of the cause to the trial court. We also reverse that part of the judgment that awards Milton attorney's fees and remand the cause to the trial-court. We affirm the remainder of the judgment. John Powers, Justice Before Justices Powers, Aboussie and Jones Reversed and Remanded in Part; Affirmed in Part Filed: March 8, 1995 Do Not Publish 1. A bona fide purchaser is one who acquires the apparent legal title to real property in good faith, for valuable consideration, and without actual or constructive notice of outstanding third party claims. Tex. Bus. & Com. Code Ann. § 8.302 (West 1991). 2. In part, Montgomery's affidavit states: Neither I, as attorney for City of San Antonio, or to my knowledge any other agent or representative of City of San Antonio, had either constructive or actual notice of the existence of Bessie Mundine, or of the fact that Titus Mundine was ever married or had any children, at the time City of San Antonio purchased the property in question from Milton Mundine in May 1983. Paragraph four of Rinner's affidavit states: Neither the deed from Elbert Mundine to Titus Mundine (1940), nor the deed from Titus Mundine to Milton Mundine (1955), nor any other document in the record chain of legal title in Lee County, Texas, pertaining to the property described in Exhibit A, refers to or mentions Bessie Mundine, or any wife of Titus Mundine. Accordingly, neither I, as the responsible landman for the City of San Antonio, nor to my knowledge any other agent or representative of the City of San Antonio, had either constructive or actual notice of the existence of Bessie Mundine, or the fact that Titus Mundine was ever married or had any children, at the time San Antonio purchased the property in question from Milton Mundine in May 1983. (Emphasis added). 3. Rosalis, Tabor, and Bailey state in response to request for admission twenty-seven that Keng's letter to the City of San Antonio was written in 1983; however, their response to request for admission twenty-eight admits that Exhibit "E" is a true and correct copy of the letter. Exhibit "E" was dated February 16, 1984.