Who Has Jurisdiction?

[Hypnotist321]

What is the name of your state (only U.S. law)? TX/NM

Howdy Y'all,

Without going into great detail, this is a breach of Real Estate Contract issue. The property is located in NM. The parties (one Seller, two Purchasers) were TX residents at date of REC execution (10-26-03). The Purchasers breach is arguably Fraud topping a long list of other complaints. Fraud occurred well within statutes of limitations in both TX and NM.

Seller and one Purchaser are still residents of TX, and one Purchaser is still employed in TX, although he now "resides" in the NM property. I believe based on those facts, a TX court would have personal jurisdiction over the parties to decide the matter.

The question is...does a TX court have subject matter jurisdiction? Or because the property is in NM, is NM the correct venue to file suit?

I believe TX would have subject matter jurisdiction if the court views the matter as a contract dispute vs a real estate dispute.

Am I correct in my thinking?

Thanks in advance!

 

[Rexlan]

Real property jurisdiction can be had in NM if that is where the property is or in the county or residence of the defendants.

Check the SOL to see if you can file suit. 8 years old.

Ya'll come back now ... LOL

Tacky, tacky, tacky!

 

[Hypnotist321]

I prefer Texas

@ Rexlan,

Thanks for the reply!

Do I understand you to say either state would have subject matter jurisdiction? Truth is, I prefer Austin, Texas for many reasons including the potential for higher damage awards as compared to NM.

And yes, the TX SOL for Fraud have not expired. The cause of action occurred in late '09 and was only discovered by the plaintiff late last August.

Texas Civil Practice and Remedies Code:
Sec. 16.004. FOUR-YEAR LIMITATIONS PERIOD. (a) A person must bring suit on the following actions not later than four years after the day the cause of action accrues:
(1) specific performance of a contract for the conveyance of real property;
(2) penalty or damages on the penal clause of a bond to convey real property;
(3) debt;
(4) fraud; or
(5) breach of fiduciary duty.

YeeeHaaawww!!!

 

[latigo]

What is the name of your state (only U.S. law)? TX/NM

Howdy Y'all,

Without going into great detail, this is a breach of Real Estate Contract issue. The property is located in NM. The parties (one Seller, two Purchasers) were TX residents at date of REC execution (10-26-03). The Purchasers breach is arguably Fraud topping a long list of other complaints. Fraud occurred well within statutes of limitations in both TX and NM.

Seller and one Purchaser are still residents of TX, and one Purchaser is still employed in TX, although he now "resides" in the NM property. I believe based on those facts, a TX court would have personal jurisdiction over the parties to decide the matter.

The question is...does a TX court have subject matter jurisdiction? Or because the property is in NM, is NM the correct venue to file suit?

I believe TX would have subject matter jurisdiction if the court views the matter as a contract dispute vs a real estate dispute.

Am I correct in my thinking?

Thanks in advance!

(Edited response)

The jurisdictional question is not precisely like you've presented it. What you are doing is confusing in rem jurisdiction (jurisdiction over the res or thing in controversy) with subject matter jurisdiction. And more importantly you need to be considering the issue of personal jurisdiction.

Subject matter jurisdiction has to do with the scope or areas about which a designated state court level is given the power to adjudicate and resolve legal controversies.

In rem jurisdiction describes the power a court has over a particular thing or res such as real property.

But a given court may have subject matter jurisdiction, yet not in rem jurisdiction because the thing is without the geographical limits of the court.

Example here: The courts of general jurisdiction, including exclusive jurisdiction over title to land, in both Texas and New Mexico are called district courts. But because the site of the real property is New Mexico a Texas district court would not have in rem jurisdiction.

The information here is meager, but I have the impression that you – as the seller, or speaking on behalf of the seller - would prefer to have the controversy litigated in Texas and not New Mexico. But your reasoning favoring Texas relies to heavily on what you see as an assumed distinction between a “real estate dispute”, which, if it involves the respective contracting parties rights and duties with respect to the land would be non transitory (New Mexico alone having in rem jurisdiction) –

and a “contract dispute”, which may or may not be transitory depending on what sort of judicial relief is sought.

To know the proper state venue one would have to know the sort of relief you would be seeking and upon what specific legal grounds. You tell us that the seller and a co-purchaser reside in Texas and the other co-purchaser is in possession of the property in New Mexico.

If the seller is seeking monetary relief against the purchasers, in whole or in part, because of an alleged breach of contract, then the forum must be one that can exercise personal jurisdiction over the purchasers. And I don’t see how Texas could assume personal jurisdiction over the purchaser residing in New Mexico, unless he or she could be personally served with process in Texas.

On the other hand, assuming the contract was struck in New Mexico, that state could exercise personal jurisdiction over the Texas resident under the state’s long arm statute.

The you talk confidently about the purchasers have committed some fraudulent act. But I’m having difficulty conceiving of how a purchaser of land could be guilty of actionable fraud. And I use the modifier “actionable” advisedly.

Perhaps you could explain your theory as well as the nature of the alleged breach of contract as it does not appear that the seller wants the property back. And depending on how the contract is structured – I’m assuming were not talking about a deed of trust - he may have to make an election.

 

[Hypnotist321]

Thanks latigo

latigo,

Thank you for your time, your reply and for your friendly and professional tone. You have helped me understand the distinction between subject matter and in rem jurisdiction.

The purchaser currently residing in the property was a resident of Texas at the time the REC was executed...and may still claim residence in Texas. Additionally, his main office is based in Texas.

It was a split closing. Seller and one purchaser closed in Texas. The purchaser in possession of the property closed in NM while a resident of Texas. Notices for all parties are to be delivered to Texas addresses. BTW, no GL provision was included in the REC.

Facts:
~ The purchaser contacted the escrow agent/attorney requesting the original Warranty Deed
~ Through misrepresentation to the escrow agent/attorney the purchaser gained possession of the original Deed (as evidenced by escrow agent's affidavit)...and without seller's knowledge or permission.
~ With total disregard to the escrow agent's instructions NOT to record the Deed and to show only, the purchaser did record the Deed.
~ By recording the Deed, the purchaser claimed unencumbered fee simple ownership of the property.
~ The REC clearly states that title will transfer from seller to purchaser only upon satisfaction of the terms of the REC including full payment of the note. Because the purchaser had not yet fulfilled his obligations under the REC, the purchaser's act of recording the Deed was a fundamental breach of contract.
~ Upon discovering the purchaser's act of recording the Deed (7 months later) the seller filed a quiet title suit with lis pendens in NM to mitigate further damages which could be inflicted by the purchaser encumbering the property.
~ The purchaser returned title rather than have a jury decide the merits.
~ The seller now wants to be repaid the hard dollars expended to regain title to the property. The seller also wants the property back and is aware damages may be awarded depending on relief sought.

My Thinking:
~ I believe a Texas court has personal jurisdiction over all parties.
~ I believe the contract is unconscionable and a trier of fact will find it so, whether it took the form of a real estate contract or any other.
~ If a Texas trier of fact does find that the contract is unconscionable, it may declare the contract void...not rescinded.
~ A void contract never happened.
~ All title defects which occurred as a result of the purchasers' actions/inactions (there are several) are then nullified.

Of course, this is just a snapshot of the matter and my thinking.

A NM RE attorney advised us that Texas MAY be the appropriate venue. This is why I ask the opinion(s) of you good folks here on the boards. He also suggested we get "very creative" with our damage calculations.

Let me just mention that this story is only a single brush stroke in a much bigger picture. Over five million stories of elder abuse (including financial abuse) occur in this country each year…and growing. These are tragic, real life stories with real live people. And like child abuse, most of these stories are never told, never discovered, much less ever prosecuted. This one will be prosecuted...no matter what forum is ultimately deemed appropriate!