in Re GMAC Mortgage Corporation

Opinion filed March 16, 2006 Opinion filed March 16, 2006 In The Eleventh Court of Appeals __________ No. 11-05-00351-CV __________ IN RE GMAC MORTGAGE CORPORATION Original Mandamus Proceeding M E M O R A N D U M    O P I N I O N This is an original mandamus proceeding. GMAC Mortgage Corporation seeks a writ of mandamus directing the trial court to grant a motion to cancel a notice of lis pendens. The writ of mandamus is conditionally granted. This action arises out of Taylor Investments, a General Partnership v. David C. Berg and Mardean Berg, Professional Placement Centre, Inc., and GMAC Mortgage Corporation, Trial Court Cause No. 22,511-B, which was filed in the 104th District Court in Taylor County. Taylor Investments has sued the defendants for the conversion and fraudulent transfers of at least $500,000 and for breach of a fiduciary duty. Taylor Investments seeks various forms of relief including a constructive trust on land owned by the Bergs in Ovalo, Texas, and a declaration concerning the priority of liens attached to the property. In conjunction with its suit, Taylor Investments filed a notice of lis pendens on the real property owned by the Bergs. GMAC contends that lis pendens is not authorized in this fact situation and cites Flores v. Haberman, 915 S.W.2d 477 (Tex. 1995)(orig. proceeding), to support its position. We agree. Tex. Prop. Code Ann. ' 12.007 (Vernon 2004) provides that a party seeking affirmative relief may file a notice of lis pendens in an action involving the title to real property, the establishment of interest in real property, or the enforcement of an encumbrance against real property. The Flores court conditionally granted a writ of mandamus directing the trial court to cancel the notices of lis pendens and held that the creation of a constructive trust was Aa collateral interest in the property@ and that lis pendens was not proper. Flores, 915 S.W.2d at 478. In determining whether lis pendens is available under Section 12.007 and Flores, the appellate court examines whether there is an adequate nexus between the claim against the owner of the property and the property in question. In re Fitzmaurice, 141 S.W.3d 802 (Tex. App.CBeaumont 2004, orig. proceeding); In re Wolf, 65 S.W.3d 804 (Tex. App.CBeaumont 2002, orig. proceeding). If there is no adequate nexus, the claim is collateral, and lis pendens is not available. Flores, 915 S.W.2d at 478; In re Fitzmaurice, 141 S.W.3d at 805; In re Wolf, 65 S.W.3d at 806. The gist of the underlying suit is Taylor Investments=s allegations that Mardean Berg inappropriately used its funds to make not only mortgage payments but also improvements on two pieces of real property, including the tract located in Ovalo. In its petition, GMAC argues that this is a collateral interest on the property to prevent unjust enrichment in favor of the Bergs. In its response, Taylor Investments contends that it is seeking to establish an equitable interest in the property and that the Bergs cannot have title in the property in question because that property was acquired with stolen funds. We disagree with Taylor Investments=s characterization of the nature of the claim. In its pleadings, Taylor Investments clearly asserts a collateral claim on the property in question by seeking actual damages, exemplary damages, and a superior lien in the form of a constructive trust on the property due to Mardean Berg=s alleged conversion of Taylor Investments=s funds which she and her husband then invested in the property in question. Taylor Investments=s claim is not an action involving the title to real property, the establishment of interest in real property, or the enforcement of an encumbrance against real property within the meaning of Section 12.007; therefore, lis pendens is not appropriate. Section 12.007; Flores, 915 S.W.2d at 478; In re Fitzmaurice, 141 S.W.3d at 805; In re Wolf, 65 S.W.3d at 806. We sustain GMAC=s issues that the trial court abused its discretion by denying the motion to cancel the notice of lis pendens. The writ is conditionally granted. In the event that the trial court does not rescind its September 26, 2005, order denying the motion to cancel Taylor Investments=s notice of lis pendens on the property owned by Mardean and David C. Berg located in Ovalo, Texas, and issue an order granting the motion to cancel the notice of lis pendens, then writ of mandamus shall issue. JIM R. WRIGHT CHIEF JUSTICE March 16, 2006 Panel consists of: Wright, C.J., and McCall, J., and Strange, J.