In Re 705 Sunrise, LLC v. the State of Texas

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-25-00776-CV

In re 705 Sunrise, LLC

ORIGINAL PROCEEDING FROM LLANO COUNTY

MEMORANDUM OPINION

Relator 705 Sunrise, LLC seeks mandamus relief from the county court’s

abatement of a forcible detainer proceeding on appeal in the county court. Before

commencement of the trial de novo, the county court abated the underlying proceeding pending

the full and final resolution of a separate title dispute against Relator filed in the district court. In

this original proceeding, Relator seeks a writ of mandamus directing the trial judge to vacate the

order of abatement to allow the parties to proceed to trial de novo on the forcible detainer action

before the county court at law. Because we determine that the issue of possession is not

inextricably intertwined with the title dispute, we conditionally grant the writ.

BACKGROUND

Real party in interest Carleen Pengg filed for divorce from her husband,

Georg Pengg, in August 2023 after twenty years of marriage, during which the couple acquired

several properties. The real property located at 707 Sunrise Avenue in Sunrise Beach Village,

Texas is the property at issue in this suit. That property was owned by Lake LBJ Boutique

Resort & Marina, LLC (LBJ Marina), a company for which Georg and Carleen are the sole
members. In 2015, Georg, as a representative of LBJ Marina, executed a deed of trust securing a

note on 707 Sunrise Avenue and other properties. The deed of trust provides:

In the event that there be a trustee’s sale hereunder, and, if at the time of such
sale, Grantor, or Grantor’s heirs, personal representatives, successors or assigns,
is or are occupying the Mortgaged Property so sold, each and all shall
immediately surrender and deliver possession of the Mortgaged Property so sold
to the purchaser at such sale, and in the event of their failure to do so, they shall
thereupon become the tenant of the purchaser at such sale, which tenancy shall be
a tenancy at sufferance, terminable at the will of such purchaser as landlord . . . .
An action of forcible entry and detainer and any other legal proceedings may be
brought by any purchaser if the tenant holds over after a demand in writing for
possession of any of the Mortgaged Property and this Deed of Trust and the
trustee’s deed delivered at such sale shall constitute the lease and agreement under
which any such tenant’s possession arose.

Carleen states in her brief that while she was separated from Georg and living in Florida, Georg

intentionally defaulted on the note securing financing for 707 Sunrise Avenue and concealed the

default and foreclosure proceedings from her so she had no opportunity to protect her interests.

In the divorce proceeding and title suit pending in the district court, she argues that he did so

despite being able to afford the payments, then orchestrated the foreclosure so that the couple’s

properties, then held by LBJ Marina, would be sold to Relator for the amount left on the note

(around $1.3M to $1.4M). She alleges Georg struck a deal with Relator that would allow him to

repurchase the property (allegedly valued at $6M) for about double the amount for which it was

sold. In her live divorce petition, Carleen has asserted causes of action for wrongful foreclosure,

fraud, constructive fraud, conversion, conspiracy, intentional infliction of emotional distress, and

wrongful eviction against Relator, who is a third-party respondent in the divorce suit, all

premised on objections to what she alleges was a fraudulent, invalid, or void foreclosure sale.

On April 3, 2025, Relator filed a forcible detainer action in Justice Court One,

Llano County, to evict Carleen from 707 Sunrise Avenue (no similar action is pending for
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Georg). The trial court dismissed the forcible detainer action for lack of jurisdiction based on the

title dispute and possibly void foreclosure. Relator appealed de novo to the County Court of

Llano County. About a week after a brief status hearing, the county court entered an apparently

erroneous final judgment, which referred to a hearing on July 9, 2025, that undisputedly never

occurred; the erroneous judgment awarded possession of 707 Sunrise to “708 Sunrise LLC,” a

nonexistent entity. Carleen moved to vacate the final judgment, and Relator agreed that the

judgment should be vacated and the case should proceed to a hearing on the merits. Along with

her motion, Carleen submitted for consideration a multiple-choice order that provided options for

granting the motion to vacate and proceeding to trial, granting the motion to vacate and

abating pending resolution of the district court dispute, and denying the motion to vacate. On

August 11, 2025, the county court granted the motion to vacate and abated the case pending

resolution of the property dispute in district court. Relator moved to reconsider and lift the

abatement. The county court denied the motion because “the matter is involved in title disputes

of the 33rd District Court of Llano County, Texas, Cause No. 22849 affecting the same property

that is the subject to the forcible detainer.”

ANALYSIS

Standard of Review

Generally, to obtain mandamus relief, a relator must show both that the trial court

clearly abused its discretion and that relator has no adequate remedy by appeal. In re Prudential

Ins. Co. of Am., 148 S.W.3d 124, 135–36 (Tex. 2004) (orig. proceeding); Walker v. Packer,

827 S.W.2d 833, 839–40 (Tex. 1992) (orig. proceeding). An abatement order may be reviewed

on mandamus when the abatement is indefinite in duration or it effectively vitiates a party’s

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ability to present a claim or defense. See In re Shulman, 544 S.W.3d 861, 867 (Tex. App.—

Houston [14th Dist.] 2017, orig. proceeding). An adequate remedy by appeal does not exist

when the plaintiff is effectively denied any other method of challenging the court’s action for an

indefinite period of time during which the cause of action remains in a suspended state. In re

Immobiliere Jeuness Establissement, 422 S.W.3d 909, 914 (Tex. App.—Houston [14th Dist.]

2014, orig. proceeding). A trial court has no discretion in determining what the law is and

applying it to the facts, and a trial court abuses its discretion if it fails to analyze or apply the law

correctly. In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005) (orig.

proceeding); Walker, 827 S.W.2d at 840.

Forcible Detainer

A forcible detainer action will lie when a person in possession of real property

refuses to surrender possession on demand if the person “is a tenant at will or by sufferance,

including an occupant at the time of foreclosure of a lien superior to the tenant’s lease.” Tex.

Prop. Code § 24.002(a)(2); Coinmach Corp. v. Aspenwood Apartment Corp., 417 S.W.3d 909,

915–16 (Tex. 2013). It provides a mechanism to determine the right to immediate possession of

real property where there is no unlawful entry. Adams v. Godhania, No. 03-18-00371-CV,

2019 WL 2293572, at *2 (Tex. App.—Austin May 30, 2019, pet. denied) (mem. op.); Williams

v. Bank of N.Y. Mellon, 315 S.W.3d 925, 926 (Tex. App.—Dallas 2010, no pet.). It is intended

to be a speedy, inexpensive, summary procedure for obtaining possession without resorting to a

suit on the title. Williams 315 S.W.3d at 926–27 (citing Scott v. Hewitt, 90 S.W.2d 816, 818–19

(Tex. 1936)). To prevail in a forcible detainer action, a party need show only sufficient evidence

of ownership to demonstrate a superior right to immediate possession. See Rice v. Pinney,

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51 S.W.3d 705, 709 (Tex. App.—Dallas 2001, no pet.); see also Tex. R. Civ. P. 510.3(e) (“The

court must adjudicate the right to actual possession and not title.”).

Jurisdiction over forcible detainer actions is expressly given to the justice court of

the precinct where the property is located and, on appeal, to county courts for a trial de novo.

Tex. Prop. Code § 24.004; Tex. R. Civ. P. 510.10(c). Forcible detainer actions are cumulative of

any other remedy a party may have in the courts of this state, and the displaced party is entitled

to bring a separate suit in the district court to determine questions of title. Salaymeh v. Plaza

Centro, LLC, 264 S.W.3d 431, 436 (Tex. App.—Houston [14th Dist.] 2008, no pet.). “In most

disputes, the right to title can be determined separately from the right to immediate possession,

and the legislature has expressly established a system designed to decide the two issues

separately.” Roark v. Rice Capital, LLC Series 20, No. 03-22-00514-CV, 2024 WL 2429408 at

*1 (Tex. App.—Austin May 24, 2024, no pet.) (mem. op.) (citing Rice, 51 S.W.3d at 709–10);

see Sissom v. Equity Tr. Co. FBO 200186851 IRA, No. 03-20-00154-CV, 2021 WL 3148871 at

*2 (Tex. App.—Austin July 27, 2021, no pet.) (mem. op.) (“[C]hallenges to the title, or to the

foreclosure process, must be pursued, if at all, in a separate suit.”). “Matters relating to

possession may even overlap in the two proceedings without affecting a county court’s

jurisdiction to determine immediate possession because ‘a judgment of possession in a forcible

detainer action is a determination only of the right to immediate possession and does not

determine the ultimate rights of the parties to any other issue in controversy relating to the realty

in question.’” Hong Kong Dev., Inc. v. Nguyen, 229 S.W.3d 415, 437 (Tex. App.—Houston [1st

Dist.] 2007, no pet.) (quoting Lopez v. Sulak, 76 S.W.3d 597, 605 (Tex. App.—Corpus Christi–

Edinburg 2002, no pet.)). Only when a question of title is so intertwined with the issue of

possession as to preclude adjudication of the right to possession without first determining title

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will the county court be deprived of jurisdiction to determine the right to immediate possession.

In re Gallegos, No. 13-13-00504-CV, 2013 WL 6056666, at *5 (Tex. App.—Corpus Christi–

Edinburg Nov. 13, 2013, orig. proceeding) (mem. op.); see, e.g., Riley v. Deanda, 706 S.W.3d 578,

582–83 (Tex. App.—Houston [1st Dist.] 2024, no pet.) (“a defendant’s assertion of an adverse

possession claim that is not defective on its face is one circumstance in which a title dispute is

inextricably intertwined with the right to immediate possession”); Yarbrough v. Household Fin.

Corp. III, 455 S.W.3d 277, 282–83 (Tex. App.—Houston [14th Dist.] 2015, no pet.) (collecting

cases on intertwinement of title and possession issues and concluding that because defendants

contended “the deed of trust and resulting substitute trustee’s deed are void due to forgery, they

have raised a genuine issue of title so intertwined with the issue of possession as to preclude

jurisdiction in the justice court”); Yarto v. Gilliland, 287 S.W.3d 83, 89 (Tex. App.—Corpus

Christi–Edinburg 2009, no pet.) (intertwined title issue when the parties disputed whether a

landlord-tenant or buyer-seller relationship existed because defendants asserted they had fully

performed oral contract for deed thereby raising a claim of equitable title).

Carleen does not challenge the validity of the 2015 deed of trust, the terms of

which created a landlord and tenant-at-sufferance relationship between the purchaser and any

“Grantor, or Grantor’s heirs, personal representatives, successors or assigns” occupying the

property in the event of foreclosure. She instead argues that the county court correctly abated

and that the issue of possession is intertwined with a title dispute because Relator conspired with

her husband and others to deprive her of community property through a fraudulent foreclosure

that she alleges was void ab initio. She also alleges defects relating to the foreclosure process

based on there having been multiple substitute trustees, such that there are questions about who

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had authority to conduct the sale. She further alleges that the foreclosure sale never actually

occurred, and thus, the sale was void.

Where, as here, a foreclosure pursuant to a deed of trust establishes a landlord and

tenant-at-sufferance relationship between the parties, the trial court has an independent basis to

determine the issue of immediate possession without resolving the issue of title to the property.

See Schlichting v. Lehman Bros. Bank FSB, 346 S.W.3d 196, 198 (Tex. App.—Dallas 2011, pet.

dism’d); Adams, 2019 WL 2293572, at *2, *3 (explaining that appellants became tenants at

sufferance under terms of deed they executed when they defaulted on their payments and that

when foreclosure under deed of trust established landlord and tenant-at-sufferance relationship,

there was basis for determining issue of immediate possession without resolving any title

dispute). This Court has consistently held that “defects in the foreclosure process cannot be used

either to negate a landlord-tenant relationship provision in a deed of trust or to raise a question of

title depriving the justice or county courts of jurisdiction to resolve the question of immediate

possession.” Wilder v. Citicorp Tr. Bank, F.S.B., No. 03-13-00324-CV, 2014 WL 1207979, at

*2 (Tex. App.—Austin Mar. 18, 2014, pet. dism’d w.o.j.) (mem. op.); see Elwell v. Countrywide

Home Loans, Inc., 267 S.W.3d 566, 568–69 (Tex. App.—Dallas 2008, pet. dism’d w.o.j.)

(rejecting attempt to use title dispute to defend against purchaser’s right to possession in forcible-

detainer action). “Arguments concerning defects in the foreclosure process or with title to the

property ‘may be pursued in suits for wrongful foreclosure or to set aside the substitute trustee’s

deed, but they are not relevant’ in forcible-detainer actions.” Wilson v. Ditech Fin., LLC,

No. 03-21-00100-CV, 2022 WL 2135774, at *2 (Tex. App.—Austin June 15, 2022, no pet.)

(mem. op.) (citing Williams, 315 S.W.3d at 927). Based on these precedents, we conclude that

Carleen’s complaints about defects in the foreclosure process do not implicate questions of title

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that must be decided prior to the issue of possession. See Wilson, 2022 WL 2135774, at *1–2

(Tex. App.—Austin June 15, 2022, no pet.) (mem. op.) (failure to give notice of default and of

intent to accelerate were defects in foreclosure process that may not be considered in a forcible

detainer action).

CONCLUSION

Having reviewed the cases cited by both parties, we conclude that the question of

immediate possession does not, on this record, necessarily require a determination of title.

See Rice, 51 S.W.3d at 709. We therefore hold that the county court abused its discretion in

abating this case until the title issues were resolved by the district court in a separate lawsuit.

We conditionally grant mandamus relief and direct the county court vacate its abatement order so

that it can proceed to a trial on the merits. The writ will issue only if the county court does not

take action in accordance with this opinion.

__________________________________________
Rosa Lopez Theofanis, Justice

Before Justices Triana, Kelly, and Theofanis

Filed: December 12, 2025

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