A Texas court has ruled in a significant case involving Alejandro Villeda and HK REO, LLC, concerning a tax lien foreclosure sale. The Texas Court of Appeals, 13th District, issued its opinion on July 2, 2026, affirming the lower court's decision. This ruling affects property rights and the process of tax lien foreclosures in Texas.

The case centers around a property that Villeda previously owned, which was sold due to unpaid taxes. Villeda argued that the trial court made errors in handling his case, particularly in striking his answer and granting summary judgment to HK REO. The ruling is important as it clarifies the legal processes surrounding tax lien foreclosures and the rights of property owners.

Background

Alejandro Villeda owned three tracts of land in Hidalgo County, Texas. In March 2019, a court ordered a foreclosure sale due to $35,358.33 in delinquent taxes owed on the property. Propel Financial Services, LLC, was among the plaintiffs seeking the foreclosure. On August 4, 2020, TLF REO, LLC purchased the property at a tax lien foreclosure sale for $31,234.51. The deed recorded on March 15, 2021, noted that Villeda had the right to redeem the property within a specified time.

In October 2021, TLF conveyed the property to HK REO, LLC. Villeda filed a lawsuit against Propel’s successor, PFS Tax Lien Trust, in January 2023, alleging breach of contract and seeking various forms of relief related to the property. Villeda claimed he had an agreement with Propel that required him to make regular payments to settle the outstanding taxes, asserting he paid over $183,000 in satisfaction of the purchase price.

On April 21, 2023, HK REO intervened in the case, filing a petition against Villeda for declaratory relief and other claims. HK REO argued that the foreclosure sale extinguished Villeda’s interest in the property and that he could not contest the sale due to the statute of limitations. The trial court set a hearing for HK REO's motion for summary judgment on December 18, 2023.

The Ruling

The Texas Court of Appeals ruled on two main issues raised by Villeda. First, the court examined whether the trial court abused its discretion by striking Villeda's answer, which included counterclaims against HK REO. The court found that Villeda filed his answer just three days before the summary judgment hearing without seeking the court's permission, violating Texas Rule of Civil Procedure 63.

The court ruled, "A party may amend or respond to pleadings 'at such times not to operate as a surprise to the opposite party.'"

Second, the court addressed whether the trial court erred in granting summary judgment in favor of HK REO. Villeda's appeal did not provide sufficient arguments or evidence regarding the merits of HK REO's motion. The court noted that Villeda's briefing was inadequate and did not demonstrate a viable fact issue to defeat the summary judgment.

The court stated, "We cannot make the party’s arguments for him, and then adjudicate the case based on the arguments we have made on his behalf."

Ultimately, the court affirmed the trial court's judgment, confirming that Villeda's claims were not sufficiently substantiated.

Impact

This ruling has significant implications for property owners involved in tax lien foreclosures in Texas. It underscores the importance of adhering to procedural rules when contesting foreclosure sales and highlights the challenges property owners may face if they do not act within the required timeframes. The court's decision reinforces the principle that failure to properly file pleadings can lead to the loss of rights in property disputes.

The ruling also clarifies the limits of appealing a trial court's decision when the appellant does not adequately present their arguments. This case serves as a reminder for individuals involved in similar disputes to seek legal guidance and ensure they follow proper legal procedures to protect their interests.

What's Next

Details were not available in the court filing regarding any potential appeals or related cases pending. However, Villeda may consider further legal options, including appealing to a higher court, depending on the circumstances surrounding the case.