Court of Appeals
Tenth Appellate District of Texas
10-23-00426-CV
Theresa Vu,
Appellant
v.
Misty Medina,
Appellee
On appeal from the
87th District Court of Limestone County, Texas
Judge Amy Thomas Ward, presiding
Trial Court Cause No. 31632-B
JUSTICE HARRIS delivered the opinion of the Court.
MEMORANDUM OPINION
Appellant Theresa Vu (“Vu”) appeals the trial court’s judgments
granting Appellee Misty Medina’s (“Medina”) claims and awarding attorney’s
fees and interest. We find that the trial court did not err in granting Medina’s
motion for summary judgment, that the homestead protection allowed the
trial court to properly void the conveyance of property, that the court did not
err in granting money damages for Medina’s usury claims, and that the award of attorney’s fees present no reversible error. We find the award of
prejudgment interest on Medina’s usury claim improper. We reverse the
portion of the final judgment awarding prejudgment interest; otherwise, we
affirm.
BACKGROUND
Medina closed on a home in Mexia, Limestone County, Texas on
July 25, 2006 (the “Mexia House”). Medina received a transfer of leasehold
estate and filed the transfer in the public records on July 26, 2006. Medina
then filed a designation of homestead for the Mexia House in the Limestone
Central Appraisal District in January of 2008. Medina never withdrew this
homestead exemption.
The evidence shows that the Mexia House is the only real property
Medina has ever owned. Affidavits submitted by Medina’s mother and friend
state that Medina raised her children in the Mexia House. The evidence also
shows that Medina’s son was living at the Mexia House and attending
Groesbeck High School until at least May 2017. The affiants also stated that
Medina has several dogs and that the dogs never left the Mexia House. They
went on to state that most of Medina’s personal effects never left the house,
either before February 8, 2017, or after. Medina regularly returned to the
Mexia House, even after extended stays out of town.
Vu v. Medina Page 2
Vu, a licensed real estate broker, leased a house in Shady Shores,
Texas, to Michael Tischler in 2014 (the “Shady Shores House”). Medina began
a relationship with Tischler in 2016. Vu argues that Medina “moved in” with
Tischler around this time. In February 2017, Tischler and Medina consulted
Vu about moving into a larger house in the Lake Dallas area (the “Lake
Dallas House”). Tischler and Medina entered a one-year lease on the Lake
Dallas House.
Also, in early 2017, Medina and Tischler approached Vu to secure a
$20,000 loan. Tischler stated it was for a legal matter and that he needed the
money fast. Vu sought collateral for the loan. Medina first sought to sell the
Mexia House to Vu, but after consulting with an attorney, she informed
Medina that she would need to execute a Transfer of Leasehold Estate
because she did not own the property in fee. Thereafter, Medina, Tischler,
and Vu entered a Promissory Note Agreement on February 8, 2017 (the
“Promissory Note”), wherein Vu loaned the couple $20,000, received the
Transfer of Leasehold Estate, and charged interest on payments. The
Promissory Note laid out a payment schedule in which Medina and Tischler
would receive $18,000 and repay $34,000 within twenty-three months. Vu
would hold the Transfer of Leasehold Estate as security, and once the loan
was paid off, would return the Transfer of Leasehold Estate back to Medina.
Vu v. Medina Page 3
Medina and Tischler struggled to make timely payments, and on
July 7, 2017, Vu recorded the Transfer of Leasehold Estate in the Limestone
County records. Medina’s arrangements with Tischler “did not work out,” and
she moved back into the Mexia House in December 2017.
In March 2019, Medina filed a lawsuit against Vu asserting claims for
usury and violation of Article 16 of the Texas Constitution’s prohibition on
pretend sales of a homestead, among other claims. As a defense to Medina’s
Article 16 homestead claim, Vu asserted the affirmative defenses of estoppel
and quasi-estoppel, arguing that she relied on Medina’s representations that
the Mexia House was not her homestead. In 2022, Medina filed “Plaintiff’s
Second Amended Traditional and No Evidence Motion for Summary
Judgment” (the “2022 Second MSJ”). Among other motions related to usury,
Medina sought to void the transfer of the Mexia House as a pretended sale
under Article 16. She also moved for a no-evidence summary judgment on
Vu’s estoppel and quasi-estoppel defenses. The trial court entered two final
judgments granting the 2022 Second MSJ, one on November 29, 2023, and
one on December 22, 2023, which also included interest and attorney’s fees.
Vu timely appealed both judgments.
Vu v. Medina Page 4
STANDARD OF REVIEW
A trial court’s decision to grant a motion for summary judgment is
reviewed de novo. BMTP Holdings, L.P. v. City of Lorena, 359 S.W.3d 239
(Tex. App.—Waco 2011), aff'd, 409 S.W.3d 634 (Tex. 2013). If a party moves
for summary judgment on both traditional and no-evidence grounds, the
court first considers the no-evidence motion. Lightning Oil Co. v. Anadarko
E&P Onshore, LLC, 520 S.W.3d 39, 45 (Tex. 2017). “To defeat a no-evidence
motion, the non-movant must produce at least a scintilla of evidence raising a
genuine issue of material fact as to the challenged elements.” Id. The nonmovant meets this burden if the evidence “rises to a level that would enable
reasonable and fair-minded people to differ in their conclusions.” Essex Crane
Rental Corp. v. Carter, 371 S.W.3d 366, 376 (Tex. App.—Houston [1st Dist.]
2012, pet. denied). A party fails to produce a scintilla of evidence when the
evidence is “so weak as to do no more than create a mere surmise or
suspicion” of a fact. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex.
2003). Courts review the evidence presented by the motion and response in
the light most favorable to the non-moving party, crediting evidence
favorable to that party if reasonable jurors could, and disregarding contrary
evidence unless reasonable jurors could not. Mack Trucks, Inc. v. Tamez, 206
S.W.3d 572, 582 (Tex. 2006).
Vu v. Medina Page 5
To prevail on a traditional summary judgment motion, the movant has
the burden of proving that there are no genuine issues of material fact and
that he is entitled to judgment as a matter of law. Carter, 371 S.W.3d at 376;
TEX. R. CIV. P. 166a(c). In reviewing a summary judgment, courts must
accept as true evidence in favor of the nonmovant, indulging every reasonable
inference and resolving all doubts in the nonmovant's favor. Cathey v. Booth,
900 S.W.2d 339, 341 (Tex. 1995) (citing Nixon v. Mr. Property Management
Co., 690 S.W.2d 546, 548–49 (Tex.1985)).
DISCUSSION
On appeal, Vu raised four issues: (1) did the trial court err in granting
Medina’s 2023 motion for summary judgment; (2) did the trial court err in
granting Medina’s 2022 motion for summary judgment; (3) did the trial court
err in awarding prejudgment interest on usury damages, attorney fees, and
court costs; and (4) did the trial court err in not conditioning its award of
appellate attorney’s fees on the success or failure of Vu’s appeal. We will
address them in turn.
2023 MSJ
Vu challenges both the 2022 Second MSJ titled “Plaintiff’s Second
Amended Traditional and No Evidence Motion for Summary Judgment” and
a 2023 motion titled “Plaintiff’s Second Traditional Motion for Partial
Vu v. Medina Page 6 Summary Judgment.” In both final judgements signed by the trial court, the
language clearly grants “Plaintiff’s Second Amended Traditional and No
Evidence Motion for Summary Judgment.” We find no order before this court
where the 2023 motion titled “Plaintiff’s Second Traditional Motion for
Partial Summary Judgment” was granted by the trial court in name or in
substance. As such there is no ruling on the 2023 summary judgment motion
to challenge or for this Court to review. We turn to the challenge of the trial
court’s granting of the 2022 Second MSJ.
Homestead Claim
In part, Vu challenges the trial court’s granting of Medina’s summary
judgment relating to Medina’s claim that the Mexia House was her
homestead. Section 50 of Article XVI of the Texas Constitution provides, in
relevant part:
No mortgage, trust deed, or other lien on the homestead shall
ever be valid, except for the purchase money therefor, or
improvements made thereon, as hereinbefore provided, whether
such mortgage, or trust deed, or other lien, shall have been
created by the husband alone, or together with his wife; and all
pretended sales of the homestead involving any condition of
defeasance shall be void.
When a party shows that a conveyance was intended as security for debt,
with a condition of defeasance upon the payment of the debt, a pretended sale
prohibited by the Constitution is shown. Anglin v. Cisco Mortg. Loan Co., 141
Vu v. Medina Page 7 S.W.2d 935, 938 (Tex. 1940). If the purchaser of a homestead, or a lender,
knows or has reason to believe that a purported sale has been simulated for
the purpose of fixing a lien on a homestead contrary to the constitutional
prohibition, the sale and the lien are void. See Fuller v. Preston State Bank,
667 S.W.2d 214, 218 (Tex. App.—Dallas 1983, writ ref’d n.r.e.); Anglin, 141
S.W.2d at 940. The key issue in determining whether a sale is real or
pretended is the factual question of whether the parties intended title to vest
in the purchaser. Ketcham v. First Nat. Bank of New Boston, Tex., 875 S.W.2d
753, 756 (Tex. App.—Texarkana 1994, no writ).
The parties do not dispute that the transfer of the Mexia House created
a lien on the home. The Promissory Note specified that once Medina and
Tischler paid off the loan, Vu would return the deed to Medina. Thus, the
only issues are (1) whether Medina is estopped from claiming the property as
her homestead, and (2) whether the Mexia House was Medina’s homestead at
the time of the transfer on February 8, 2017.
I. Vu failed to provide more than a scintilla of evidence that
Medina should be estopped from claiming the Mexia House as
her homestead.
“Misrepresentations by a homestead claimant may, under the proper
circumstances, create an estoppel to claim the homestead exemption.” First
Interstate Bank of Bedford v. Bland, 810 S.W.2d 277, 283 (Tex. App.—Fort
Vu v. Medina Page 8 Worth 1991, no writ). A homestead claimant may be estopped to claim the
homestead exemption where physical facts open to observation lead to a
conclusion that the property in question is not the homestead, the use of the
property is not inconsistent with the claimant's representations that the
property is disclaimed as the homestead, and the representations were
intended to be and were actually relied upon by the lender. Id. at 285–86.
“[T]he law is well settled that the one who wilfully or knowingly brings about
a situation and withholds from an innocent party facts which it is his duty to
disclose and if his failure to do so causes such innocent party to act to his
prejudice, he must suffer the consequence of his own wrongful act.” Uptmor v.
Janes, 210 S.W.2d 235, 238 (Tex. App.—Waco 1948, writ ref’d n.r.e.). Thus, to
prevail on her estoppel defenses, Vu must show that Medina represented to
Vu that the Mexia House was not her homestead, show facts consistent with
these representations, and show that she relied on Medina’s representations.
Here, Vu has not shown that Medina made any affirmative
representations about the homestead status of the Mexia House at all. Vu
argues that Medina’s initial plan to sell the house shows that Medina
intended to abandon the homestead. But this is not an affirmative
representation that, at the time the conversation took place, the home was
not her homestead. Vu also contends that she understood that Medina lived
Vu v. Medina Page 9 with Tischler in the Shady Shore House. This fact might support Vu’s
estoppel defense if Medina had in fact made affirmative representations
regarding the Mexia House’s homestead status. But again, Vu provided no
evidence that on or before February 8, 2017, the date of the transfer, Medina
ever made any such representations. Because Vu failed to provide any
evidence Medina represented that the Mexia House was not her homestead,
Vu failed to create more than “a mere surmise or suspicion” that Medina
made representations regarding the homestead status of the Mexia House.
Further, Vu provided no evidence that she relied on any representation
by Medina. All the evidence that Vu cites to support these defenses was
struck when the trial court sustained Medina’s objections to this evidence.
Further, in her deposition, Vu stated that she consulted the Limestone
County Appraisal District records to determine the value of the Mexia House.
These records also included Medina’s homestead designation. In the context
of a pretended sale, inquiry notice is equivalent to actual notice. Fuller v.
Preston State Bank, 667 S.W.2d 214, 2018 (Tex. App.—Dallas 1983, writ ref’d
n.r.e.) (“knowledge of facts that would cause a prudent lender to make
inquiry is equivalent to actual knowledge of the simulated character of the
transaction.”). Because Vu failed to create more than a mere surmise or
suspicion that she relied on any representations by Medina, and because she
Vu v. Medina Page 10 had reason to make inquiry about the homestead status of the property, Vu
produced less than a scintilla of evidence to support either of her estoppel
defenses. Thus, the trial court properly granted Medina’s no-evidence
summary judgment motion on this defense.
II. Medina proved that, as a matter of law, the Mexia House was
her homestead on February 8, 2017.
The initial burden of establishing that property is homestead property
is on the person claiming its protection. Lifemark Corp. v. Merritt, 655
S.W.2d 310, 314 (Tex. App.—Houston [14th Dist.] 1983, writ ref’d n.r.e.). “It
is well settled in this state that in order to establish homestead rights, the
proof must show a combination of both overt acts of homestead usage and the
intention on the part of the owner to claim the land as a homestead.” Id.
(citing Sims v. Beeson, 545 S.W.2d 262, 263 (Tex. App.—Tyler 1976, writ ref'd
n.r.e.); Prince v. North State Bank, 484 S.W.2d 405, 409 (Tex. App.—Amarillo
1972, writ ref'd n.r.e.)). “Once the claimant has established his homestead,
the burden shifts to the creditor to disprove its continued existence.” Id.
(citing Chalk v. Daggett, 257 S.W. 228, 232 (Tex. Comm'n App. 1924,
judgment adopted)). The creditor must then overcome the presumption that
the homestead continues until the creditor proves termination. Id.
“The general rule is that the testimony of interested witnesses, such as
parties to the suit, merely raises a fact issue to be determined by the jury.”
Vu v. Medina Page 11 Merritt, 655 S.W.2d at 315. However, courts need not investigate intent when
the land is put to homestead uses. Id. “Such actual use of the land is the most
satisfactory and convincing evidence of intention.” Id.
Here, Medina points to multiple overt acts showing her intent to claim
the Mexia House as her homestead. Medina offered the affidavits of Tammy
DeCarlo and Norma Zuniga, Medina’s mother, showing that Medina actually
used the property as a homestead. Both witnesses corroborated Medina’s
claims that she had raised her family in the house since 2006, her personal
belongings remained in the house, she regularly returned to the house, her
dogs never left the house, and that Medina’s son attended high school at
nearby Groesbeck High School until May 2017.
DeCarlo stated that she knew Medina since Medina was sixteen, and
Medina never gave up her home. She said that “at no time did she ever tell
me she sold her home or that she was going to lease her home out, or that she
never intended to return to her home in Mexia.” Zuniga testified that she had
lived in Mexia since 1998 and regularly visited her daughter and
grandchildren. She stated, “At no time did (Medina) ever tell me or suggest
that she was moving out of her home in Mexia with the intent not to return.”
The two affidavits, along with the Groesbeck High School records, show
that Medina actually used the property as a homestead and claimed it as
Vu v. Medina Page 12 such through overt acts. Thus, the court need not investigate Medina’s intent.
And even if Medina’s intent was an issue, the affidavits offer additional proof
aside from Medina’s own testimony that she intended the home to be and
remain her homestead.
Additionally, Medina designated her property as a homestead in 2008
pursuant to TEX. PROP. CODE §41.005(e). A “Designation of Homestead” is
prima facie evidence of the person's intent to claim the property designated
therein as their homestead. Barrera v. State, No. 14-04-01030-CR, 2005 WL
1691037, at *5 (Tex. App.—Houston [14th Dist.] July 21, 2005, no pet.). “This
presumption may only be rebutted by clear evidence.” Id. Because Medina
met her burden to show overt acts of homestead usage coupled with an intent
to claim the property as a homestead, the burden shifted to Vu to rebut the
presumption of homestead.
III. Vu failed to raise an issue of material fact regarding whether
Medina abandoned her homestead.
A party asserting abandonment of a homestead has the burden of
proving it by competent evidence. Caulley v. Caulley, 806 S.W.2d 795, 797
(Tex. 1991). To prove abandonment of a homestead, “it must be undeniably
clear and beyond almost the shadow, at least (of) all reasonable ground of
dispute, that there has been a total abandonment with an intention not to
Vu v. Medina Page 13 return and claim the exemption.” Rancho Oil Co. v. Powell, 175 S.W.2d 960,
963 (Tex. 1943).
Here, the evidence shows that Medina still used the home up to and
after the date of the transfer on February 8, 2017. Medina’s dogs continued to
live at the home. When Medina was away, her mother and Ms. DeCarlo
would care for them. Her personal belongings remained in the home, and
when she visited Tischler, she packed a suitcase. Her son continued to attend
Groesbeck High School through May 2017.
Vu points to statements, acts, and testimony suggesting that Medina
was living with Tischler on February 8, 2017. But even taking these facts as
true and drawing all reasonable inferences in their favor, a reasonable juror
could not disregard Medina’s continued use of the Mexia House. Though
Medina’s use may have become less frequent, it did not rise to the level of
abandonment. Because Vu’s evidence falls short of “undeniably clear”
evidence that Medina totally abandoned her homestead, the trial court
properly granted Medina’s motion for summary judgment on this point.
Usury Claim
Vu also challenges the award of damages for Medina’s usury claim.
While Vu seemingly does not contest that the Promissory Note was usurious,
she argues that summary judgment on Medina’s usury claim was improper
Vu v. Medina Page 14 because Vu was not put on proper notice of Medina’s usury claim, because Vu
corrected the usury violation, and because Medina did not demonstrate that
the usurious interest was in connection with a transaction for personal,
family, or household use.
In relevant part, the Texas Finance Code states:
Not later than the 61st day before the date an obligor files a suit
seeking penalties for a transaction in which a creditor has
contracted for, charges, or received usurious interest, the obligor
shall give the creditor written notice stating in reasonable detail
the nature and amount of the violation.
TEX. FIN. CODE §305.006(b).
Vu admits that months prior to the filing of the lawsuit, she received at
least one letter from Medina and/or Tischler that stated “the interest rate you
charge may violate the Texas Finance Code provisions for usury interest
which could lead to additional statutory penalties being charged against you.”
The short promissory note sets out a flat fee and origination fee of $14,500
and $2,000 respectively for a $20,000 loan. The amount is usury on its face.
We are not persuaded that upon receipt of a letter containing the aboveidentified language, Vu would not be able to surmise the nature or amount of
the violation alleged as required by statute.
While we are satisfied that the pre-suit letter constituted notice as
required by TEX. FIN. CODE §305.006(b), both statute and case law allow for
Vu v. Medina Page 15 abatement in the event pre-suit notice is not provided. TEX. FIN. CODE
§305.006(d); Lagow v. Hamon ex rel. Roach, 384 S.W.3d 411, 415 (Tex. App.—
Dallas 2012, no pet.). After Medina filed the lawsuit on or about April 2,
2019, Medina sent another notice letter stating,
“Based on the terms of the Note providing for a $20,000.00
principal with total interest of $14,500.00 over a term of 23
months plus an origination fee of $2,000, the rate of interest
charges in this instrument is greater than 37%. This rate and
amount of interest is in violation of the provisions of the Texas
Constitution and Finance Code prohibiting usurious interest and
that you are liable for this violation to Ms. Medina for the
amount of penalties and attorney’s fees as provided by applicable
law.”
While clear on the face of the Promissory Note, the post-suit notice letter also
details the nature and amount of the violation to satisfy TEX. FIN. CODE
§305.006(b). The trial court did not err in granting summary judgment on
Medina’s usury claims on the grounds of improper notice.
Following the above-mentioned notice letters and the filing of Medina’s
lawsuit, Vu alleges she provided multiple cure notices correcting the usury
issues. To avoid liability for a usury violation of Chapter 305 of the Texas
Finance Code, the creditor must correct the violation not later than the 60th
day after the date the creditor actually discovers the violation or within 60
days of receiving notice pursuant to TEX. FIN. CODE §305.006(b). See TEX.
FIN. CODE §305.103(a) and §305.006(d).
Vu v. Medina Page 16
As stated, we find Vu received a proper notice of the usury claims by at
least April 2, 2019. Medina argues that the timely cure letter(s) did not
correct the usury issues. We agree. Vu’s May 2019 cure letter does not
address the $2,000 origination fee, which was expressly identified as an issue
in Medina’s April 2019 notice letter. “[A] correction of a usury violation under
§305.006 & §305.103 must be just that—an acknowledgment of the existence
of a usury violation accompanied by the adjustment or correction required in
order to bring the transaction into compliance with the applicable usury
standard.” In re Kemper, 263 B.R. 773, 784 (Bankr. E.D. Tex. 2001). Vu’s May
2019 cure letter did not fully address the usury issues and did not bring the
transaction into compliance so as to avoid liability pursuant to TEX. FIN.
CODE §305.103(a) or TEX. FIN. CODE §305.006(d). Because Vu is not protected
by the cure defense, the trial court did not err in granting summary
judgement on Medina’s usury claim.
Vu argues that a creditor is liable for usurious interest under Chapter
305 of the Texas Finance Code only if that interest is charged “in connection
with a transaction for personal, family, or household use.” TEX. FIN. CODE
§§305.001(a) & 305.002(b). Vu cites to no case law defining what constitutes
personal, family, or household use. We are not inclined to presume that the
loan was not for personal, family, or household use.
Vu v. Medina Page 17
We find that the trial court did not err in granting a money judgment
for Medina’s usury claim.
Prejudgment Interest
Vu challenges the award of prejudgment interest on Medina’s usury
claim. Texas case law has settled that the recovery of prejudgment interest
for a usury claim is not authorized. Steves Sash & Door Co. v. Ceco Corp., 751
S.W.2d 473, 476 (Tex. 1988). As such, we reverse that portion of the final
judgment awarding prejudgment interest and render a take-nothing
judgment on the prejudgment interest award.
Attorney’s Fees
Vu challenges the summary judgement award of attorney’s fees on the
basis that the award was not conditioned upon Medina’s successful appeal.
An appellate court generally reviews a trial court's decision to award
appellate attorney’s fees for an abuse of discretion. See Ventling v. Johnson,
466 S.W.3d 143, 155 (Tex. 2015). If the party awarded attorney's fees is
successful on appeal, then the trial court's omission of conditional language is
not reversible error. Arena v. Arena, 822 S.W.2d 645, 651 (Tex.App.—Fort
Worth 1991, no writ). Because we affirm the trial court’s final judgements on
all but the prejudgment interest issue, we find that Medina is successful on
Vu v. Medina Page 18 appeal. Therefore, the final judgment’s omission of conditional language in
awarding attorney’s fees is harmless error. We overrule Vu’s final issue.
CONCLUSION
We reverse the portion of the final judgment awarding prejudgment
interest and render a take-nothing judgment on the prejudgment interest
award. Otherwise, we affirm.
LEE HARRIS
Justice
OPINION DELIVERED and FILED: August 31, 2026
Before Chief Justice Johnson,
Justice Smith, and
Justice Harris
Affirmed in part
Reversed and rendered in part
CV06
Vu v. Medina Page 19