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In The

Court of Appeals

Ninth District of Texas at Beaumont

____________________

NO. 09-13-00060-CV

____________________

LBM INVESTMENTS, INC., Appellant

V.

CARIBE PROPERTIES, INC., Appellee

_________________________________ ______________________ 

On Appeal from the 284th District Court 

Montgomery County, Texas

Trial Cause No. 10-08-09369 CV 

____________________________________________ ____________ 

MEMORANDUM OPINION 

LBM Investments, Inc. (“LBM”) sued Caribe Properties, Inc. (“Caribe”) for 

fraudulent misrepresentation, fraud in the inducement, fraud in a real estate 

transaction, breach of contract, negligence, negligent misrepresentation, fraud by 

nondisclosure, and breach of implied warranties arising out of LBM’s purchase of 

real property from Caribe. Caribe filed a motion for traditional and no-evidence 

summary judgment, which the trial court granted. In three appellate issues, LBM 
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challenges the trial court’s summary judgment ruling. We affirm the trial court’s 

judgment.

Factual Background

In 2007, the parties entered a contract in which LBM agreed to purchase 

property from Caribe. The contract provided that “Buyer accepts the [p]roperty in 

its present condition[.]” The property was inspected in January 2008 and the 

inspector classified the drainage as “Good” and found that the “[p]roperty appears 

in excellent overall condition.” The inspector noted:

A considerable amount of fill dirt was used to build up the site before 

the concrete slab was poured. At the rear of the building, the base of 

the foundation sits approximately 1 1/2 to three feet above the original 

land. Fill dirt, which extends approximately eight to ten feet from the 

edge of the foundation, is bare and is beginning to show significant 

erosion in some places. In completion of site preparation, to limit 

erosion, this area should be stabilized with plant material such as grass 

seeding or vegetation. If left unattended during the wet winter months, 

erosion could eventually compromise the foundation.

The parties closed on the property in March 2008. 

After taking possession of the property, LBM noticed pooling, improper 

drainage, and defects in the slab and foundation of the building on the property. In 

May 2009, LBM obtained a geotechnical exploration study, which revealed that 

the soil was composed of silty sand and sand clay. The inspector explained that 

“silty sands are highly permeable and can become susceptible to perched trapped 
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groundwater conditions[]” and the “perched trapped water tends to soften the 

sandy clays, which severely undermine the pavement integrity.” “[S]andy clays are 

medium to high in plasticity” and “sandy clays with plasticity index larger than 25 

are expected to experience shrink and swell movements that are associated with 

seasonal changes in moisture content in the upper layer.” According to the 

inspector, “[d]uring inclement (rainy) weather, the rainwater permeates through the 

silty sands and ponds on top of the sandy clays, thus creating a perched (trapped) 

groundwater condition.” Perched water tends to soften sandy clay, which severely 

undermines the pavement’s integrity and may cause premature pavement failure. 

The inspector stated that no positive drainage was found in the vicinity of the 

paved area on the property. The inspector opined:

[T]he combination of perched water which resulted from poor 

drainage, the lack of subgrade stabilization, and repeated dynamic 

loads by vehicular traffic [were] the major contributing factors to the 

pavement distress . . . . The repeated dynamic vehicular traffic loads 

usually liquefy the existing loose and wet silty sands. Once the silty 

sands liquefy, they lose their strength and become unable to transfer 

the loads to the surrounding subgrade[.]

In an affidavit, Ty Odeh, president of LBM, stated that Caribe gave false and 

incomplete information regarding the quality and condition of the pavement, 

misrepresented the property’s drainage conditions, and failed to disclose the lack 

of permitting and the lack of compliance with local ordinances. Odeh stated that he 
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did not intend to purchase the improvements on the property “as-is” and he stated 

that he never heard the parties mention or discuss the sale of the improvements 

“as-is.” In her affidavit, Gail Moran, Caribe’s president, stated that she was 

unaware of any “issues” with the property. 

In its traditional motion for summary judgment, Caribe argued that LBM 

had purchased the property “as is” and could not recover on any of its claims 

because the “as is” language in the contract negated causation and disclaimed 

express or implied warranties. Caribe further argued that it had no duty to disclose 

defects of which it was unaware. In the no-evidence portion of its motion, Caribe 

contended that LBM lacked any evidence to substantiate the causation element of 

its claims. The trial court’s summary judgment order does not state on which 

grounds Caribe’s motion was granted. 

Traditional Summary Judgment

In issues one and two, LBM challenges the trial court’s decision to grant 

Caribe’s traditional motion for summary judgment. We review a trial court’s ruling 

on a traditional summary judgment motion de novo. Provident Life & Accident Ins. 

Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). We “consider whether reasonable 

and fair-minded jurors could differ in their conclusions in light of all of the 

evidence presented.” Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 
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(Tex. 2007) (per curiam). We “consider all the evidence in the light most favorable 

to the nonmovant, indulging every reasonable inference in favor of the nonmovant 

and resolving any doubts against the motion.” Id. at 756.

Contract language stating that the buyer accepts the property in its present 

condition constitutes an “as is” clause. Boehl v. Boley, No. 07-09-0269-CV, 2011 

Tex. App. LEXIS 528, at *5 (Tex. App.—Amarillo Jan. 26, 2011, pet. denied) 

(mem. op.); Cherry v. McCall, 138 S.W.3d 35, 39 (Tex. App.—San Antonio 2004, 

pet. denied). When a buyer agrees to purchase something as is, he agrees to make 

his own appraisal of the bargain and to accept the risk that he may be wrong.

Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 161 (Tex. 

1995). When determining the enforceability of an as-is clause, we consider the 

nature of the transaction and the totality of the circumstances, including (1) 

whether the as-is clause is an important part of the basis of the bargain, not an 

incidental or boilerplate provision, (2) the parties are sophisticated, of relatively 

equal bargaining position, (3) the contract was freely negotiated, and (4) the 

contract was an arm’s-length transaction. Id. at 162.

LBM first contends that the as-is clause is incidental boilerplate language. 

The contract in this case is a standard commercial contract from the Texas 

Association of Realtors. However, the record does not indicate that the contract 
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was non-negotiable. LBM does not dispute that the parties were sophisticated or of 

relatively equal bargaining position, that the contract was freely negotiated, or that

the contract was an arm’s-length transaction. See id. Nor is there evidence that 

LBM entered the contract from an unequal bargaining position or that the 

transaction was not made at arm’s length. See Cherry, 138 S.W.3d at 39. In his 

affidavit, Odeh stated that he was directly involved in the negotiations with Caribe. 

The contract is signed by both Odeh and LBM’s attorney. LBM was not obligated 

to assume the full risk of determining the value of the purchase, but could have 

insisted that Caribe assume part or all of that risk. See Prudential, 896 S.W.2d at 

161. The as-is clause is enforceable under the totality of the circumstances.

LBM also contends that the as-is clause does not apply to improvements. 

The contract describes the “property” as “that real property situated in 

Montgomery County, Texas at 8774 Fawn Trail, Conroe, TX 77385 and that is 

legally described . . . as . . . Northline Forest, Lot 33, 34, Acres 1.180.” The sale of 

the property included “all buildings, improvements, and fixtures[.]” Because the 

contract defines the property as “real property” and the definition does not 

specifically mention improvements, LBM maintains that the as-is clause is limited 

to the land. The definition of “real property” has been broadly construed to include 

both the land and anything erected on, growing on, or affixed to the land. San 
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Antonio Area Found. v. Lang, 35 S.W.3d 636, 640 (Tex. 2000); Tex. Real Estate 

Comm’n v. Rodriguez, No. 04-09-00681-CV, 2010 Tex. App. LEXIS 4532, at *5 

(Tex. App.—San Antonio June 16, 2010, pet. denied); Black’s Law Dictionary 

1337 (9th ed. 2009) (Defining “real property” as “[l]and and anything growing on, 

attached to, or erected on it[.]”). Because real property includes improvements, the 

as-is clause applies to both the land and any improvements thereon. See Lang, 35 

S.W.3d at 640; see also Rodriguez, 2010 Tex. App. LEXIS 4532, at *5; Black’s 

Law Dictionary 1337.

Finally, LBM argues that the as-is clause does not disclaim a fraudulent 

inducement cause of action. Under the fraudulent inducement exception, an as-is 

clause is not binding on a buyer who is induced to enter the clause because of the 

seller’s fraudulent representation or concealment of information. Prudential, 896 

S.W.2d at 162. A seller has no duty to disclose facts he does not know and is not 

liable for failing to disclose what he only should have known. Id. A statement is 

fraudulent when the maker knew it was false when he made it or made it recklessly 

without knowledge of its truth. Id. at 163. “In the context of a summary judgment 

proceeding, fraudulent inducement is in the nature of a counter-defense responding 

to the defense raised by the seller.” Fryar v. Mees, No. 10-06-00135-CV, 2007 

Tex. App. LEXIS 3204, at *6 (Tex. App.—Waco Apr. 25, 2007, no. pet.) (mem.
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op.). The buyer must present evidence that “but for” the seller’s representations 

regarding the condition of the property, the buyer would not have assented to a 

contract which contained an “as is” clause. Id. The buyer must present competent 

evidence creating a material issue of fact. Boehl, 2011 Tex. App. LEXIS 528, at 

*8; Fryar, 2007 Tex. App. LEXIS 3204, at *6. 

In his affidavit, Odeh states that the 2009 study demonstrates the defects in 

the paved improvements. According to Odeh, to induce him to purchase the 

property, Caribe provided false and incomplete information regarding the quality 

and condition of the paved improvements, misrepresented the drainage conditions, 

and failed to disclose the lack of permits and compliance with local ordinances. 

However, Odeh’s affidavit does not state the facts underlying these assertions. See 

LeBlanc v. Lamar State College, 232 S.W.3d 294, 301 (Tex. App.—Beaumont 

2007, no pet.) (“Statements are conclusory if they fail to provide underlying facts 

to support their conclusions.”); see also Aldridge v. De Los Santos, 878 S.W.2d 

288, 296 (Tex. App.—Corpus Christi 1994, writ dism’d w.o.j.) (“Affidavits 

containing conclusory statements unsupported by facts are not competent summary 

judgment proof.”). LBM does not present evidence establishing what statements 

Moran or Caribe made, that Caribe knew the condition of the improvements, or 

that Caribe made any representations that were known to be false when made or 
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that were made recklessly without knowledge of the truth. See Prudential, 896 

S.W.2d at 163; see also Fryar, 2007 Tex. App. LEXIS 3204, at **7-8.

Viewing the evidence in the light most favorable to LBM, we conclude that 

there are no genuine issues of material fact, and Caribe was entitled to summary 

judgment as a matter of law. See Tex. R. Civ. P. 166a(c); see also Mayes, 236 

S.W.3d at 756; Knott, 128 S.W.3d at 215. We overrule issues one and two. Having 

found that the trial court properly granted Caribe’s traditional motion for summary 

judgment, we need not address LBM’s third issue challenging the no-evidence 

summary judgment ruling. See Tex. R. App. P. 47.1. We affirm the trial court’s 

judgment.

AFFIRMED.

 ________________________________

 STEVE McKEITHEN

 Chief Justice

Submitted on September 16, 2013

Opinion Delivered October 17, 2013

Before McKeithen, C.J., Kreger and Horton, JJ.