R E V E R S E a n d R E M A ND; a n d O p i n i o n F il e d J u ly 8, 2015. 

# S

In The



## Cour t o f A pp ea l s

F if t h D i s tr i c t o f Te x a s a t Da l l as

No. 05

- 14

- 00831

- CV

DA LL AS DRAIN C O M PANY, I N C. AND K E VIN T RAVI S , A pp e l l a n t s

V.

K E VIN D. W ELS H AND K ELL Y A. W ELS H, A pp e ll ee s

On A pp e al f r om t h e 1 4t h J ud i c ial Dis tr i c t Co u r t

Dallas Co un t y, T e xas

T r ial Co u r t Ca u se No. DC

- 13

- 09129



### MEMO RA N D U M OP I N I ON

B ef o r e J usti ce s B r i d g e s, F illmo re

, a nd B r own

Opinion b y J usti c e F illmo r e

The t r i a l c ou r t g ra nt e d summ a r y ju d g m e nt in fa vor of a pp e ll e e s K e vin D. W e lsh a nd

K e l l y A. W e lsh on th e ir c l a ims a g a inst a pp ellants D a ll a s D ra in C omp a n y

, I n c

. a nd K e vin T ra vis.

D a ll a s D ra in a nd T r a vis a pp ea l the summ a r y ju d gm e nt, a nd D a ll a s D ra in a pp ea ls the d e ni a l of its

motion to e x t e nd po s t

- jud g m e nt d ea dlin e s. I n six issu e s on a pp ea l, a pp e ll a nts a ss er t: ( 1) b eca use

a pp e ll ee s’ motion f or s u mm a r y ju d g m e nt on t h e ir n e g l i g e n c e a nd b r eac h of impli e d w arr a n t y

c l a ims w a s suppo r t e d on l y b y a n imp r op e r d ee m e d a dmission, the t r i a l c ou r t erre d b y f indi n g

a pp e ll ee s m e t th e ir su m m a r y ju d g m e nt bu r d e n; ( 2) no summ a r y jud g m e nt e vid e n c e e s t a blish e s

a pp e ll a nts ar e build er s a nd, th eref o r e

, the t r i a l c ou r t erre d b y g r a nting s umm a r y ju d g m e nt on

a pp e ll ee s’ b r e a c h of impli e d w arra n t y c l a ims; ( 3) a pp e ll ee s fa il e d to s uppo r t th e ir b reac h of

impli e d w arra n t y o f h a b it a bili t y c l a im with summ a r y ju d g m e nt e vid e n c e th a t the dw e lling a t

issue w a s not h a bit a bl e ; ( 4) the t r i a l c ou r t erre d b y f indi n g a pp e ll e e s c o n c lusiv e l y e st a blish ed– 2 e ntitl e m e nt to a tto r n e y ’ s fee s i n c u rr e d in p r os ec uting th e ir n e g lig e n c e a nd b re a c h of impli e d

w arr a n t y c l a ims; ( 5) the t r i a l c ou r t er r e d b y f inding a pp e ll ee s c on c lusiv e l y e st a blish e d th a t T r a vis

is p er son a l l y li a ble f or c l a ims a g a inst D a ll a s D ra in f or n e g lig e n c e a nd b reac h o f impli e d

w arr a nti e s; a nd ( 6) the t r i a l c ou r t erre d b y d e n y i n g D a ll a s D r a in ’ s motion to e x t e nd post

jud g m e nt d ea dlin e s. W e re v e r se the t r i a l c ou r t ’ s jud g m e nt a nd re m a nd this ca use to the t r i al

c ou r t.

B a c k g r o un d

App e ll ee s’ All e gations

This is a c onst r u c tion d e fec t li a bili t y ca s e

. App e ll ee s, own er s of a re sid e n c e lo ca t e d at

3317 D ar tmouth A v e n u e in H i g hl a nd Pa r k, T e x a s ( the r e sid e n c e )

, s u e d S h ar if & Munir

Ent erp r is e s, I n c

., the b uild e r of the re sid e n c e ; D a ll a s D ra in, a sub c o nt rac to r ; a nd T r a vis,

p re sid e nt a nd di r e c tor o f D a ll a s D r a in. App e ll ee s a ll e g e th a t d u r ing t he c onst r u c tion of the

re sid e n c e

, S h ar if a nd “ o ne of its sub c ont r ac to r s” in c o rr e c t l y c onn e c t e d a sump pump p r oviding

b a s e m e nt a nd e l e v a tor d r a in a g e to the s a nit a r y s e w e r lin e

.

A cc o r di n g to a pp e ll ee s ’ pl ea din g

, S h ar if built the re sid e n c e som e time a f t e r 2000. The

o r i g in a l own e r of the re s i d e n c e sold the re sid e n c e in 2008; those pu rc h a s e r s sold the re sid e n c e to

the e nti t y fr om whi c h a pp e ll ee s pu r c h a s e d t h e r e sid e n c e in 2013. S ho r tl y a f t e r p u rc h a si n g t h e

re sid e n c e

, a p p e ll ee s l ea r n e d the s a nit a r y s e w e r line to the re sid e n c e h a d s e ttl e d a nd s a gg ed

ca using the s e w e r line to b ac k up. A plumb e r hi r e d to r ec ti f y the s a g g i n g s e w e r line dis c ov e re d

the sump pump w a s imp r op er l y c on n ec t e d to the s e w e r lin e

, inst ea d o f p r o p er l y c on n ec t e d to the

sto r m w a t e r d r a in a g e s y s t e m. App e ll ee s a ll e g e t h e c onn e c tion of the sump pump to the s a nit a r y

s e w e r line viol a t e d a H i ghl a nd P ar k o r din a n ce

. A pp e ll ee s a ll e g e th e y h a ve und er t a k e n re p a i r s b y

c onn ec ti n g the sump p u mp di rec t l y to the sto r m w a t e r d r a in a g e s y st e m.– 3 I n th e ir live pl ea di n g

, a pp e ll ee s a ll e g e D a ll a s D ra in n e g lig e nt l y b r ea c h e d a du t y t o

p erf o r m wo r k in a g ood a nd wo r km a nlike m a nn e r b y imp r op er l y c onn ec t i ng the sump pump to

the s a nit a r y s e w e r lin e

, whi c h p r o x im a t e l y ca u s e d a p p e ll ee s’ d a m a g e s. App e ll ee s a lso a ll e g e

th a t D a ll a s D ra in ’ s imp r op e r c onn e c tion of the sump pump to the s a ni t a r y s e w e r line w a s a

b reac h of t h e impli e d w arra nti e s of g ood a nd w o r km a nlike c onst r u c tion a nd h a bit a bili t y whi ch

p r o x im a t e l y ca us e d th e i r d a m a g e s. Ap p e ll ee s a ll e ge D a ll a s D ra in f o rfe it e d its c o r po r a te

p r ivil e g e s on J a nu a r y 2 8

, 2011, without its c o rp o ra te p r ivil e g e s h a vi n g b ee n re vi v e d, a nd th a t

T ra vis, a s p re sid e nt a nd a di rec tor of D a ll a s D r a in, is li a ble und e r the T e x a s T a x C ode f or a

jud g m e nt a g a inst D a ll a s D ra in th a t c onstitut e s a “ d e bt” of D a ll a s D ra in. App e ll ee s s e e k a c tu al

a nd e x e mpl a r y d a m a g e s a nd a tto r n e y ’ s fee s.

Pro ce dural Ba ck ground

App e ll ee s f il e d suit on A u g ust 15, 2013 a g a inst S h ar i f , D a ll a s D ra in, a nd T ra vis. S h ar if

w a s non

- suit e d b y a p p e ll ee s af t e r he f il e d a n a n s w er

. D a ll a s D r a in a nd T ra vis w e r e s er v e d with

a pp e ll ee s’ O r i g in a l P e t ition a nd w r itt e n dis c ov e r y ( r e qu e sts f o r d i s c losu re

, r e qu e sts f or

p r odu c tion, int err o g a to r i e s, a nd re q u e sts f or a dmissions )

. T ra vis, a s p re s id e nt of D a ll a s D r a in,

f il e d a p r o se a ns w e r on b e h a lf of a p p e ll a nts. B y l e tt e r to T ra vis, the t r i a l c ou r t a dvis e d him th a t

he c ould not re p re s e nt t h e c o rpo ra te e nti t y D a ll a s D ra in a nd would n ee d to “ obt a in a n a tto r n e y to

re p re s e nt this c omp a n y in a n y h e ar i n g th a t m a y be s c h e dul e d, a nd d u r ing t r i a l.” S e e K S

NG

Ar c hit ec ts, I n c

. v

. B e asl ey

, 109 S

. W .3d 894, 8 9 6 ( T e x

. App.

— D a ll a s 2 003, no p e t.) ( on l y a

li ce ns e d a tto r n e y ca n a p p ea r a nd re p r e s e nt a c o rp o ra tion in liti g a tion )

.

App e ll ee s f il e d a motion f or summ a r y ju d g m e nt on th e ir c l a ims a g a inst a pp e ll a nts. No

re sponse to the motion f or summ a r y ju d g m e nt w a s f il e d b y a pp e ll a nts. On Fe b r u a r y 26, 2014,

the t r i a l c o u r t si g n e d t h e O r d e r G ra nti n g S umm a r y J ud g m e nt a nd F in a l J ud g m e nt in fa v o r of– 4 a pp e ll ee s, a w ar di n g a p p e ll ee s d a m a g e s, a tto r n e y ’ s fee s, c o u r t c osts, a nd p r e

- jud g m e nt a nd post

jud g m e nt int ere st.

On Ap r il 28, 2014, D a ll a s D ra in a nd T ra vis, r e p re s e nt e d b y c ouns e l, f il e d a motion t o

e x t e nd post

- jud g m e nt d e a dlin e s und e r r u l e 306a of the r ul e s of c ivil p r o c e du r e a nd a motion f or

n e w t r i a l. B y o r d e r s i g n e d J une 16, 2014, the t r i a l c ou r t g ra nt e d T ra vis ’ s motion to e x t e nd post

jud g m e nt d e a dlin e s a nd motion f or n e w t r i a l a nd d e ni e d D a ll a s D r a in ’ s motion to e x t e nd post

jud g m e nt d ea dlin e s

. 1 On J une 25, 2014, D a ll a s D ra in a nd T r a vis joint l y f il e d th e ir noti c e of

a pp ea l of the t r i a l c o ur t ’ s Fe b r u a r y 26, 2014 o r d e r g r a nting summ a r y jud g m e nt a nd f in a l

jud g m e nt a nd t h e t r i a l c o u r t ’ s J une 16, 2014 o r d e r d e n y i n g D a ll a s D ra in ’ s motion to e x t e nd post

jud g m e nt d e a dlin e s.

A pp e lla t e J u r is d i ct ion o f Dallas D r ai n ’ s A pp e al

I n its si x th issu e

, D a ll a s D ra in a ss e r ts the t r i a l c o u r t erre d b y d e n y i n g its motion to e x t e nd

post

- jud g m e nt d e a dlin e s und e r r ule o f c ivil p r o c e du r e 30 6 a

. App e ll e e s r e spond th a t this C ou r t

l ac ks ju r isdi c tion ov e r D a ll a s D ra i n ’ s a p p ea l b ec a use the t r i a l c ou r t ’ s d e ni a l of D a ll a s D r a in ’ s

motion to e x t e nd post

- j ud g m e nt d ea dlin e s un d e r r ule 30 6 a is not s e p a r a t e l y a pp e a l a ble a nd,

th eref o r e

, D a ll a s D ra in ’ s d ea dline to f ile i t s noti c e of a pp ea l p a ss e d b ef o r e D a ll a s D ra in f il e d its

noti c e of a pp ea l

. 2 B e c a use this issue c o n cer ns this C ou r t ’ s ju r isdi c tion ov e r D a ll a s D ra in ’ s

a pp ea l, w e c onsid e r it p r i or to c onsid era tion of the oth e r issu e s ra is e d on a p p ea l.

On Ap r il 28, 2014, a pp e ll a nts f il e d a motion f or n e w t r i a l a nd a motion t o e x t e nd post

jud g m e nt d ea dlin e s un d e r r ule of c ivil p r o c e du r e 306 a

, a s s er ting th e y did not re c e ive noti c e fr om

1 T h e app e ll at e r e c or d c o nt a i n s n o r e p or t e r’ s r e c or d

. T h e c l e r k ’ s r e c or d r e f l e ct s t h a t a h e a ri n g o n D a ll a s Dr a i n a n d T r a v i s ’ s m o ti o n t o

e x t e n d p o s t

- j u d g m e n t d ea d li n e s w a s s ch e d u l e d fo r J u n e 1 6

, 2 0 1 4

.

2 F ol l o w in g th e f i l in g o f D a ll a s Dr ai n’ s n o tic e o f a p p e a l

, w e f o r w a r d e d c orr e s p o nd e nc e t o D a ll a s Dr a i n a n d T r a v i s ’ s att or n e y q u e s ti o n i n g

o u r ju r i s d i c ti o n ov e r D al l a s Dr ain ’ s a pp e a l a n d r e qu e s t i n g t h a t D a ll a s Dr a i n f i l e a j u r i s di c ti o na l l e tt e r b r i e f a d d r e ss in g t h e ti m e l in e ss o f it s n ot ic e

o f app e a l

. D a ll a s Dr a i n f i l e d a l e tt e r b r i e f a d d r e ss in g th e j u r i s d i c t i on a l qu e s ti on

, a s d i d a p p e ll e e s. Af t e r r e c e ip t o f th e ju r i s d i c ti o na l l e tt e r b r i e f s,

w e c o mm uni c at e d t o t h e pa rt i e s th a t r e s ol uti o n o f th e i ss u e o f app e ll at e ju r i s d i c t i o n o v e r D a ll a s Dr ain ’ s app e a l w a s d e f e r r e d t o th e s ub m i ss i o n o f

t h i s a p p e a l

.– 5 the t r i a l c ou r t o r a c qui r e ac tu a l know l e d g e of the F e b r u a r y 26, 2014 o r d e r g r a nting summ a r y

jud g m e nt until M a rc h 2 7, 2014, a nd c ons e q u e nt l y

, the time p e r iod du r i n g whi c h the t r i a l c ou r t

c ould e mpl o y its pl e n a r y po w e r to modi f y

, a lt e r

, or v a c a te the f in a l ju d g m e nt a nd a p p e ll a nts’

c ould f ile post

- jud g m e nt motions refere n c e d in r ule 306a did not b e g in to r un until M arc h 27,

2014. S e e T E X

. R

. C I V

. P

. 306 a( 3 )

, ( 4) ( if p ar t y aff e c t e d b y ju d g m e nt or oth e r a p p ea l a ble o r d e r

h a s not, within tw e n t y d a y s af t e r the o r d e r w a s si g n e d, e ith e r r ece i v e d noti c e re qui r e d b y r ule of

c ivil p r o ce du r e 306 a( 3 ) or ac qui r e d ac t u a l knowl e dge of the o r d er

, t h e n a n y p e r iod th a t, und e r

the r ul e s of a pp e ll a te p r o ce du re

, r uns f r om the s i gning of the o r d e r will b e gin on the e a r li e r o f the

d a te w h e n the p ar t y r e c e iv e s noti c e o r ac qui re s a c tu a l knowl e d ge of the s i g ni n g ; no s u c h p e r iod

m a y b e g in to r un mo r e th a n nin e t y d a y s af t e r the jud g m e nt or o r d e r w a s si g n e d ) ; T E X

. R

. A PP

. P.

4.2 (a)( 1 )

. On J une 16, 2 014, the t r i a l c ou r t si g n e d a n o r d e r g ra nti n g T ra v is ’ s motion to e xt e nd

the post

- jud g m e nt d ea dl i n e s whi c h p r ovid e d: T r a vis did not rece ive ac t u a l noti c e of the o r d e r

g r a nting summ a r y ju d gm e nt a nd f in a l ju d g m e n t a g a inst him until M a r c h 27, 2014; the time

p er iod in whi c h the t r i a l c ou r t c ould e x erc ise its pl e n a r y pow e r a s p r ovi d e d und e r r ule 306 a ( 1)

a nd T ra vis c ould f ile post

- jud g m e nt motions lis t e d in r ule 306 a( 1) did not b e g in to r un until

M arc h 27, 2014; a nd T ra vis ’ s Ap r il 28, 2014 m otion f or n e w t r i a l w a s t im e l y f il e d. Althou g h

D a ll a s D r a in ’ s motion to e x t e nd post

- jud g m e nt d e a dlin e s a nd motion f or n e w t r i a l w er e b a s e d on

the s a me o p e r a tive f ac ts a s T r a vis ’ s motions to e x t e nd post

- jud g m e nt d ea dlin e s a nd motion f or

n e w t r i a l, in its J une 16, 2014 o r d er

, the t r i a l c ou r t d e ni e d D a ll a s D r a in ’ s motion to e xt e nd post

jud g m e nt d e a dlin e s

. 3

W e n ee d not d e t er mine wh e th e r t h e a p p e ll a te t i m e t a ble w a s e x t e nd e d a s to D a ll a s D ra in

b a s e d on the t r i a l c ou r t ’ s pu rpo r t e d e rr or in d e n y i n g its motion to e x t e nd post

- jud g m e nt d e a dlin e s

und e r r u l e 306a of t h e r ul e s of c ivil p r o ce d u re

, b eca use D a ll a s D r a in ’ s noti c e of a pp e a l w as

3 T

h e J un e 1 6

, 2 01 4 or d e r d o e s n o t s p e ci fi ca ll y add r e ss w h e th e r th e t r ia l c our t fo u n d D a ll a s Dr a i n ’ s m ot i o n fo r n e w t r ia l t o b e ti m e l y

.– 6 tim e l y un d e r r ule o f a p p e ll a te p r o ce d u r e 26.1 ( d )

. Und e r r ule of a p p e ll a te p r o ce du r e 26.1 ( d )

, if

a n y p a r t y tim e l y f il e s a n oti c e of a pp e a l, a noth e r p ar t y m a y f ile a noti c e of a pp ea l within f ou r t e e n

d a y s af t e r the f i r st f il e d noti c e of a p p ea l. T E X

. R . A PP

. P

. 26.1 ( d ) ; Gonzal e s v

. Hi Plains Hosp.

,

No. 07

- 03

- 0264

- C V, 2 0 03 W L 21658321, a t *1 ( T e x

. App.

— Am ar illo Ju l y 15, 2003, no p e t.)

( p e r c u r i a m )

. F ollowi n g the t r i a l c ou r t ’ s J une 16, 2014 o r d e r g ra nti n g T r a v is ’ s motion to e x t e nd

post

- jud g m e nt d e a dlin e s, T ra vis f il e d his noti c e o f a pp e a l on J une 25, 2 0 14. App e ll e e s do not

c ont e nd T ra vis ’ s noti c e o f a pp ea l w a s untim e l y

.

On J une 25, 2014, D a ll a s D ra in a nd T r a vis joint l y f il e d th e ir noti c e of a p p ea l of the t r i al

c ou r t ’ s Fe b r u a r y 26, 2 0 14 o r d e r g ra nti n g summ a r y ju d g m e nt a nd f in a l j ud g m e nt a nd the t r i a l

c ou r t ’ s J une 16, 2014 o r d e r d e n y i n g D a ll a s D r a in ’ s motion to e x t e nd p o st

- jud g m e nt d ea dlin e s.

B e c a use D a ll a s D ra in ’ s noti c e of a pp ea l w a s ti m e l y un d e r r ule o f a p p e ll a te p r o c e du r e 26.1 ( d) a s

h a ving b e e n f il e d within f ou r t ee n d a y s of T r a vis ’ s noti c e of a pp ea l, we c o n c lude this C ou r t h a s

ju r isdi c tion ov e r D a ll a s D ra in ’ s a p p ea l.

Su m m a r y J ud g m e n t S t a nd a r d of R e vi ew

W e a pp l y w e ll known s t a nd ar ds in our re vi e w of t ra dition a l summ a r y ju d gm e nt motions.

S e e N i x on v

. M r. Prop. M gmt. C o.

, 690 S

. W

. 2 d 546, 548 ( T e x

. 1985 )

. The mov a nt h a s the

bu r d e n to d e monst ra te th a t no g e nuine issue o f m a t er i a l f ac t e x ists a nd jud g m e nt should be

re nd e r e d a s a m a tt e r of l a w. T E X

. R

. C I V

. P

. 166 a(c) ; N i x on

, 690 S

. W .2d a t 548

– 49. W e

c onsid e r the e vid e n c e in the li g ht most fa vo ra ble t o the nonmov a nt. M urray v

. Ford M otor C o.

,

97 S

. W .3d 888, 891 ( T e x

. App.

— D a ll a s 2003, n o p e t. )

. W e cre dit e vi d e n c e fa v o ra ble to the

nonmov a nt if a rea son a ble fac t

- f ind e r c ould, a nd we dis re g ar d e vi d e n c e c ont r a r y to the

nonmov a nt unl e ss a r e a s on a ble f ac t

- f in d e r c ould not. M ann Fra n k fort St e in & L ipp Ad v isors,

I

n c

. v

. Fi e lding

, 289 S

. W .3d 844, 848 ( T e x

. 2 0 09 )

. W ithin this fra m e wo r k, we re vi e w the t r i a l– 7 c ou r t ’ s summ a r y ju d g m e nt de novo. T ra ve l e rs I ns. C o. v

. J oa c him

, 315 S

. W .3d 860, 862 ( T e x

.

2010 )

.

E vi d e n c e of E l e m e n t s o f A pp e ll ee s’ Clai m s

I n th e ir f i r st issu e

, a pp e l l a nts ar g u e the t r i a l c ou r t erre d in g r a nting a p p e ll ee s’ t ra dition a l

summ a r y ju d g m e nt b e ca use a pp e ll ee s did not m e e t th e ir summ a r y ju d g m e nt bu r d e n b y a dd u c i n g

e vid e n c e e st a blishing e a c h e l e m e nt of th e ir c l a ims. S p ec i f i ca l l y

, a pp e ll a nts a ss er t th a t a pp e ll e e s’

motion f or summ a r y ju d g m e nt on th e ir n e g l i g e n c e a nd b re a c h of impli e d w arra n t y c l a ims w as

suppo r t e d on l y b y a d ee m e d a dmission “ th a t a ll the a ll e g a tions of [ a pp e ll a nts ’ ] O r i g in a l P e titi o n

ar e t r u e

. ” App e ll ee s a r gue th a t, a s to th e ir n e g l i g e n c e a nd b re a c h of impli e d w arra n t y c l a ims,

“ the d ee m e d a dmissions ar e g ood a nd a pp r o p r i a te summ a r y ju d g m e nt e vi d e n ce .”

Me rits

- Pr ec lusi v e D e e m e d Admission

N e ith e r D a ll a s D ra in nor T ra vis s er v e d a nsw er s to a pp e ll ee s’ re q u e sts f or a d missions, a nd

the re qu e sts a r e d ee m e d a dmitt e d. S e e Sh e rman A c quisition I I L P v

. Ga r c ia

, 229 S

. W .3d 802,

811

– 12 ( T e x

. App.

— W ac o 2007, no p e t. ) ; s e e al s o T E X

. R

. C I V

. P

. 198.2 ( c )

. I n th e ir motion f or

summ a r y ju d g m e nt, a p p e ll ee s a ss e r t e d with r e g a r d to D a ll a s D ra in ’ s li a bi l i t y f or n e g li g e n c e a nd

b reac h of impli e d w arra n ti e s of wo r km a nship a nd h a bit a bili t y

, th a t the iss u e w a s wh e th e r D a ll a s

D ra in w a s li a ble to th e m “ b y v i r tue of [ its] d ee m e d a dmissions. ” 4 App e ll ee s a ss er t e d t h e y w e r e

e ntitl e d to summ a r y ju d g m e nt on th e ir c l a ims b eca use th e r e ar e no g e n uine issu e s of m a t er i al

fac t with r e g ar d to the f o l lowin g :

1. [ App e ll a nts] w er e s er v e d with a l a wsuit b y [ a pp e l l ee s ] ;

2. [ App e ll a nts] w er e s er v e d with dis c ov e r y with c it a t ion;

3. Th a t dis c ov e r y in c lud e d, int e r alia

, re qu e sts f or a d mission;

4 W e qu e s ti o n w h e th e r a p p e l l ee s m ov e d fo r s u mm a r y jud g m e n t o n th e i r b r e ac h o f i m p l i e d w a rr ant y o f ha b i t a b i l it y c l ai m; th e m ot i o n for

s u mm a r y jud g m e n t a ss e r t e d a n e nt i t l e m e n t t o s u mm a r y jud g m e n t o n a p p e l l ee s’ c l ai ms o f ne gl ig e nc e an d b r e a c h o f i m p l i e d w a rr ant y o f “ g oo d

w o r k m an s h i p ” o n l y

. H o w e v e r

, th e t r ia l c o u r t ’ s or d e r gr ant i n g s u mm a r y jud g m e n t a n d fi na l j u d g m e n t gr a nt e d a p p e ll e e s’ m o ti o n fo r s u mm a r y

j u d g m e n t “ a s t o a l l o f [ a p p e l l ee s ’ ] c l a i ms a g a i n st [ a p p e ll ant s ]

. ” I n thi s o p in i o n

, w e add r e ss th e s u mm a r y jud g m e n t e v id e nc e i n s u pp or t o f a ll e g e d

c l ai ms o f n e gl i g e nc e

, b r e ac h o f i m p l i e d w a rr ant y o f w or k m an s h i p

, a n d b r e ac h o f i m p l i e d w a rr ant y o f h a b i t a bi li t y

.– 8 4. [ App e ll a nts] a pp eare d in this ac tion th r ou g h the f i l ing of a n a nsw e r ;

* * *

6. [ App e ll a nts ’ ] a dmissions c onstitute su ff i c i e nt a d m issions to w arra nt

g r a nting summ a r y ju d g m e nt in fa vor of [ a pp e ll e e s ] ;

7. D a ll a s D ra in h a s f o r f e it e d its e x i s t e n ce ;

8. T ra vis is li a ble f or D a ll a s D ra in ’ s mis c ondu c t;

9. [ App e ll ee s] own the [ re sid e n ce ] ;

10. [ App e ll ee s] in c u rre d $9 9 ,559.64 in re p a i r s to c o rr ec t the [ si c ] re nd e r

D a ll a s D ra in ’ s inst a ll a ti o n c ode c ompli a nt;

11. [ App e ll ee s] in c u rre d a tt o r n e y s’ f ee s in p r os e c uting this ac tion.

App e ll ee s r e li e d on d ee m e d a dmissions to the f ollowing r e qu e sts f or a dmission to D a ll a s

D ra in a s summ a r y ju d g m e nt e vid e n c e :

3. Admit th a t y ou kn e w th a t the sump pump w a s c o n n ec t e d to the s a nit a r y

s e w e r b ef o r e J a nu a r y 1, 2013.

4. Admit th a t the a ll [ si c ] of a ll e g a tions of [ a pp e ll a nts ’ ] O r i g in a l P e tition ar e

t r u e.

5. Admit th a t [ D a ll a s D ra in] f o rfe it e d its e x ist e n c e on J a nu a r y 28, 2011.

App e ll ee s r e li e d on d ee m e d a dmissions to the f ollowing r e qu e sts f or a dmission to T ra vis as

summ a r y ju d g m e nt e vi d e n ce :

3. Admit th a t y ou kn e w th a t the sump pump w a s c o n n ec t e d to the s a nit a r y

s e w e r b ef o r e J a nu a r y 1, 2013.

4. Admit th a t the a ll [ si c ] of a ll e g a tions of [ a pp e ll ee s ’ ] O r i g in a l P e tition ar e

t r u e.

5. Admit th a t [ D a ll a s D ra in] f o rfe it e d its e x ist e n c e on J a nu a r y 28, 2011.

6. Admit th a t y ou a r e a n o ff i ce r of [ D a ll a s D r a in ]

.

7. Admit th a t y ou a r e a di r e c tor of [ D a ll a s D r a in ]

.– 9 “ B y vi r tue o f [ D a ll a s D r a in ’ s] d ee m e d a dmission” to R e qu e st f or Admis s ion No. 4 th a t

the a ll e g a tions of a pp e ll ee s’ O r i g in a l P e tition ar e t r u e

, a pp e ll ee s a ss e r t e d in th e ir m o tion f or

summ a r y ju d g m e nt th a t: D a ll a s D ra in w ar r a nt e d g ood a nd wo r km a nlike c onst r u c tion; D a ll a s

D ra in r out e d su rf a c e w a s te w a t e r fr om the re sid e n ce’ s sump pump to the s a nit a r y s e w e r lin e

, as

oppos e d to the sto r m w a t e r d ra i n a g e s y st e m; D a l l a s D ra in ’ s r outing o f su r fac e w a ste w a t e r fr om

the re sid e n c e ’ s sump p u mp to the s a nit a r y s e w e r lin e

, a s oppos e d to the sto r m w a t e r d ra in a ge

s y st e m, b r e ac h e d impli e d w arra nti e s of g ood a nd wo r km a nlike c onst r u c tion; a nd D a ll a s D ra in ’ s

r outing of s u rf a c e w a ste w a t e r f r om the r e sid e n ce’ s sump pump to the s a nit a r y s e w e r lin e

, as

oppos e d to the sto r m w a t e r d ra i n a g e s y st e m, p r o x im a t e l y ca us e d th e i r d a m a g e s.

“ G e n e ra l l y

, pl ea di n g s a r e not c omp e t e nt e vid e n c e

, e v e n if s wo r n or v er i f i e d.” L aidlaw

W

aste S y s. ( Dalla s )

, I n c

. v

. C ity of W ilm e r

, 9 0 4 S

. W .2d 656, 660 ( T e x

. 1995 )

. “ P l ea din g s

outline the issu e s, but t h e y a r e not e vid e n c e .” Sha w e ll v

. P e nd O r e ille Oil & Gas C o.

, 823

S

. W .2d 336, 338 ( T e x

. App.

— T e x ar k a na 19 9 1, w r it d e ni e d )

. Th e r ef o re

, a n y a v er m e nts

c ont a in e d in pl ea din g s ar e not p r op e r summ a r y ju d g m e nt e vid e n c e a nd will not sust a in a

summ a r y ju d g m e nt. Ce d yc o C orp. v

. W hit e h e a d

, 253 S

. W .3d 877, 880 ( T e x

. App.

— B e a umont

2007, p e t. d e ni e d )

. H o w e v er

, “ [ d ] ee m e d a dm i ssions m a y be e mpl o y e d a s p r oo f

, a nd on c e

a dmissions ar e d e e m e d a dmitt e d b y o p e r a tion of l a w a nd wh e r e t h e a d missions f ul l y supp o r t

eac h e l e m e nt of a ca use of ac tion, in c luding d a m a g e s, th e y will f ul l y su p po r t a jud g m e nt b a s e d

th ere on.” Oliphant Fin

. , LL C v

. Gala v iz

, 299 S

. W .3d 829, 838 ( T e x

. A pp.

— D a ll a s 2009, no

p e t. )

. “ [ U ] n a nsw ere d r e qu e sts f or a dmissions ar e d ee m e d a dmitt e d without the n ece ssi t y of a

c ou r t o r d e r a nd a n y m a tt e r thus a dmitt e d is c on c lusiv e l y e st a blish e d a s b e ing t r u e

. ” I d

.

Th eref o re

, f a c ts a dmitt e d th r ou g h d ee m e d a dmi s sions “ m a y not be c ont r a di c t e d b y e vi d e n c e a t

the t r i a l.” I d

.– 10 Althou g h a dmissions of f ac t on f ile a t the time o f a summ a r y ju d g m e nt h ea r ing ar e p r op e r

summ a r y ju d g m e nt p r o o f a nd will suppo r t a mot i on f or summ a r y ju d g m e nt, s e e T E X

. R

. C I V

. P.

166 a(c)

, a r e qu e st f or a d mission a sking a p ar t y to a dmit or d e n y a pu re l y l e g a l issue is i mp r op er

,

a nd a d ee m e d a dmission involving a pu re l y l e g a l i ssue is of no eff e c t. W hi t e h e ad

, 253 S

. W .3d at

880; Boul e t v . Stat e

, 189 S

. W .3d 833, 838 ( T e x

. App.

— Houston [ 1st Dist.] 2006, no p e t. ) ; Fort

B e nd C e nt. Appraisal Dist. v . Hin e s W hol e sale N urs e ri e s , 844 S

. W .2d 85 7 , 858

– 59 ( T e x . App.

—

T e x ar k a na 1992, w r it d e ni e d ) ; s e e also Esparza v

. Diaz

, 802 S

. W .2d 7 72, 775 ( T e x

. App.

—

Houston [ 14th Dist.] 1990, no w r it )

. This is so b e c a use t h e p r im a r y p u rpose of r e qu e sts f o r

a dmissions is to s i mpli f y t r i a ls b y e limin a ting m a tt er s a bout whi c h th e r e is no rea l c ont r o v er s y

.

S e e St e lly v

. Papania

, 927 S

. W .2d 620, 622 ( T e x

. 1996 )

. A re qu e st f or a dmission “ w a s n e v er

int e nd e d to be u s e d a s a d e m a nd upon a pl a inti f f or d e f e nd a nt to a dmit th a t he h a d no c a use o f

ac tion or g r ound of d e f e ns e .” I d

. (c iti n g f o r m e r r ule 169 of the r ul e s of c i vil p r o ce du re ; quoting

Sand e rs v . Hard e r , 148 T e x . 593, 227 S

. W .2d 206, 208 ( 1950 ))

.

App e ll ee s’ motion f or s u mm a r y ju d g m e nt st a t e d t h er e is no g e nuine issue of m a t er i a l fac t

th a t a pp e ll a nts “a pp e ar e d in this ac tion th r ou g h the f iling of a n a ns w e r .” I n th e ir a ns w er

,

a pp e ll a nts d e n i e d li a bility f or a pp e ll e e s’ c l a ims. S e e Boul e t

, 189 S

. W .3d a t 837 ( b y v i r tue of

a pp e ll a nt ’ s g e n e r a l d e ni a l in his o r i g in a l a nsw er

, a pp e ll e e h a d b ee n put o n noti c e th a t a pp e ll a nt

disput e d a m a tt e r l a t e r subj ec t of a d ee m e d a d mission )

. D e spite th a t d e ni a l of li a bili t y f or

a pp e ll ee s’ c l a ims, a pp e l l ee s re li e d on d ee m e d a d missions b y a pp e ll a nts t h a t a pp e ll a nts a r e li a ble

to a pp e ll ee s f or n e g lig e n c e a nd b r e a c h of impli e d w ar r a nti e s of wo r km a nship a nd h a bit a bili t y

.

S u c h a re li a n c e is in a p p r op r i a t e

, a s re q u e sts f o r a dmissions re l a ting to qu e stions of l a w a r e

imp r op er

, a nd a d ee m e d a dmission involving a pu re l y l e g a l issue is of no e ffec t. S e e W hit e h e ad

,

253 S

. W .3d a t 88 0 ; Fort B e nd C e nt. Appraisal D i st.

, 844 S

. W .2d a t 858

– 5 9; s e e also W h e e l e r v.

Gr ee n e

, 157 S

. W .3d 43 9

, 443 ( T e x

. 2005) (e qu a ting m er its

- p r e c lusive dis c ov e r y s a n c tions with– 11 m er its

- p rec lusive d e e m e d a dmissions f or due p r o ce ss pu r pos e s ) ; Boul e t

, 189 S

. W .3d a t 838

( d ee m e d a dmissions re l i e d upon in motion f or s umm a r y ju d g m e nt e mb r ace d “ the f und a m e nt a l

l e g a l issu e s to be t r i e d ” ; wh e n p ar t y u s e s d ee m e d a dmissions to t r y to p r ec lude p re s e nt a tion of

the m er its, c onstitution a l du e

- p r o ce ss c on c er ns a r is e) ; Gore v

. C unningham

, 297 S

. W .2d 287,

291 ( T e x

. C iv. App.

— B ea umont 1956, w r it r ef’ d n. r

. e

. ) ( r e qu e sts f o r a dmissions e x i st “ t o

e limin a te in a dv a n c e o f the t r i a l fac t issu e s whi c h would not be in disput e

, a nd

. . . the r ule do e s

not c ont e mpl a te o r a utho r i z e a dmissions to q u e stions involving poi n ts of l a w

, ” c iting 3

M c Don a ld ’ s T e x a s C ivil P rac ti ce , ¶ 10.0 6 )

.

App e ll ee s’ motion f or summ a r y ju d g m e nt w a s b a s e d on imp r op e r summ a r y ju d g m e nt

e vid e n c e in the f o r m of a m er its

- p rec lusive d e e m e d a dmission c on cer ni n g li a bili t y f or a p p e ll ee s’

c l a ims of n e g lig e n c e a nd b r e ac h o f impli e d w arr a nti e s of wo r km a n ship a nd h a bit a bili t y

.

A cc o r di n g l y

, w e c o n c lude the m er its

- p rec lusive d ee m e d a dmission fa il e d t o p r ove the e l e m e nts

of a pp e ll ee s’ c l a ims of n e g l i g e n c e a nd b r eac h of impli e d w arra nti e s of wo r km a nship a nd

h a bit a bili t y

. C ons e qu e nt l y

, the m er its

- p r e c lusive d ee m e d a dmission w a s not, a s a r g u e d b y

a pp e ll ee s, summ a r y ju d g m e nt e vid e n c e th a t: D a ll a s D ra in w ar r a nt e d good a nd wo r km a nlike

c onst r u c tion; D a ll a s D r a in r out e d su rfac e w a ste w a t e r fr om the re si d e n c e’ s sump pump to the

s a nit a r y s e w e r lin e

, a s o ppos e d to the sto r m w a t e r d ra i n a g e s y st e m; D a l l a s D ra in ’ s r outi n g of

su rfa c e w a ste w a t e r fr om the re sid e n ce’ s sump pump to the s a nit a r y s e w e r lin e

, a s oppos e d to t h e

sto r m w a t e r d ra in a g e s y s t e m, b reac h e d impli e d w arra nti e s of good a nd wo r km a nlike

c onst r u c tion; a nd D a ll a s D ra in ’ s r outing of s u rf ac e w a s t e w a t e r fr om t h e r e sid e n c e ’ s sump pump

to the s a nit a r y s e w e r lin e

, a s oppos e d to the sto r m w a t e r d ra in a ge s y st e m, p r o x im a t e l y ca u s ed

th e ir d a m a g e s. W e r e solve a pp e ll a nts’ f i r st issue in th e ir fa vo r

.– 12 Summary J udg m e nt as a M att e r of L aw

N e x t, we c onsid e r w h e t h e r th e r e is summ a r y ju d gm e nt e vid e n c e e st a blishing the e l e m e nts

of a pp e ll a nts’ c a us e s of a c tion a s a m a tt e r of l a w.

N e g lig e n ce

App e ll ee s a r g u e th a t a p p e ll a nts did not c h a ll e n g e on a p p ea l the t r i a l c ou r t ’ s summ a r y

jud g m e nt on th e ir n e g lig e n c e c l a im. W e dis a g re e

. I n th e ir f i r st issu e

, a p p e ll a nts not on l y a r g ue

th a t a pp e ll ee s imp r op er l y r e l y on D a ll a s D r a in ’ s d ee m e d a dmission th a t the a ll e g a tions in

a pp e ll ee s’ O r i g in a l P e tition ar e t r ue to suppo r t th e ir “ w ar r a n t y a nd n e g l i g e n c e c l a ims,” th e y a lso

a r g ue t h a t a pp e ll e e s did not m ee t th e ir summ a r y ju d g m e nt b u r d e n b y a ddu c ing e vid e n c e th a t

e st a blish e d th e ir c l a ims a s a m a tt e r of l a w.

App e ll ee s a ll e g e D a ll a s D ra in n e g lig e nt l y b r eac h e d a du t y to p erf o r m wo r k in a g ood a nd

wo r km a nlike m a nn e r b y imp r op er l y c on n ec ti n g the sump pump to the s a nit a r y s e w e r lin e

. To

p re v a il on a n e g l i g e n c e ca use o f a c tion, the pl a i nti f f must e st a blish the e x ist e n c e of a du t y

, a

b reac h of th a t du t y

, a nd d a m a g e s p r o x im a t e l y c a u s e d b y the b r e ac h. D. H o uston, I n c

. v

. L o ve

, 92

S

. W .3d 450, 454 ( T e x

. 2 002 ) ; El Chi c o C orp. v

. Pool e

, 732 S

. W .2d 306, 311 ( T e x

. 1987 )

. As

pl ea d e d, a pp e ll ee s so u g h t d a m a g e s f o r “ un d er t a k ing to f ix wh a t should h a ve b e e n r i g ht in the

f i r st pl ace

. ” Ho w e v er

, u nd e r the e c onomic loss d o c t r in e

, a p p e ll ee s f a il e d to m ee t th e ir summ a r y

jud g m e nt bu r d e n b y a d d u c ing e vid e n c e th a t e st a b lish e d th e ir n e g lig e n c e c l a im a s a m a tt e r of l a w.

The e c onomic loss do c t r i ne a ppli e s to n e g lig e n c e c l a ims. S e e C lark v

. PF PP L td. P ’ ship

,

455 S

. W .3d 283, 287 ( T e x

. App.

— D a ll a s 2015, no p e t. ) ; M urray v

. Ford M otor C o.

, 97 S

. W .3d

888, 891 ( T e x

. App.

— D a ll a s 2003, no p e t. ) ; s e e also T rans

- Gulf C orp. v

. P e rforman c e Air c raft

S e r v s., I n c

. , 82 S

. W .3d 6 91, 695 ( T e x

. App.

— E a s tl a nd 2002, no p e t.) (“ S i mp l y st a t e d, a du t y in

to r t do e s not lie und e r t h e ec onomic loss r u l e w h e n the on l y inju r y c l a im e d is one f or ec onomic

d a m a g e s. ” )

. “ T h e e c on o mic loss r ule g e n e ra l l y p rec lud e s rec o v e r y in t o r t f or e c onomic loss es– 13 re sulting fr om a p a r t y ’ s fa ilu r e to p e r f o r m und e r a c ont r ac t w h e n the h a r m c onsists on l y of the

ec onomic loss of a c on t r ac tu a l e x p ec t a n c y

. ” Ch a pman C ustom Hom e s, I n c

. v

. Dallas Plumbing

C o.

, 445 S

. W .3d 716, 7 18 ( T e x

. 2014 )

. “ [ A ] p a r t y st a t e s a to r t c l a im wh e n the du t y a ll e g e d l y

b reac h e d is ind e p e n d e nt of the c ont r a c tu a l und e r t a king a nd the h a r m su f f

ere d is not m e r e l y t h e

ec onomic loss of a c ont rac tu a l b e n e f it.” I d .; s e e also S w

. B e ll T e l. C o. v

. D e L ann ey

, 809 S

. W .2d

493, 494

– 95 ( s u g g e sti n g t h a t the sou r c e o f the du t y a nd the n a tu r e of the w r o n g should be

e x a min e d to d e t er mine w h e th e r the und e r l y i n g c l a im is in to r t or c ont rac t )

.

App e ll ee s a ll e g e sub c o nt rac tor D a ll a s D ra in ’ s du t y

, un d er t a k e n in i t s c ont rac t with

S h ar i f

, w a s to p r op er l y c onn ec t the sump pump to the sto r m w a t e r d ra i n a ge s y st e m, a nd the

d a m a g e s a ll e g e d l y in c ur re d f or D a ll a s D ra in ’ s b reac h o f th a t du t y w a s f or r outing the su r f ace

w a ste w a t e r fr om the s u mp pump to the e x i s ting sto r m w a t e r d ra i n a g e s y st e m. Thus, th er e w as

no a ll e g e d p er so n a l inju r y o r d a m a g e to oth e r p r op er t y th a t would h a ve p er mitt e d a pp e ll e e s to

a ss er t a to r t c l a im th a t would be e x ce pt e d fr om the ec onomic loss do c t r in e

. S e e Pugh v

. G e n.

T

e rrazzo Suppli e s, I n c

. , 243 S

. W .3d 84, 94 ( T e x

. App.

— Houston [ 1st Dis t .] 2007, p e t. d e ni e d )

.

App e ll ee s’ n e g l i g e n c e c a use of ac tion a g a inst su b c ont rac tor D a ll a s D r a in i s b arr e d b y t h e

ec onomic loss do c t r in e

. A cc o r din g l y

, w e c o n c lude a pp e ll ee s fa il e d to ca r r y th e ir bu r d e n of

e st a blishing th e y w er e e n titl e d to jud g m e nt a s a m a tt e r of l a w on th e ir n e g l i g e n c e c l a im. F or this

a ddition a l rea son, we re s olve a pp e ll a nts’ f i r st issue with re g ar d to a pp e ll e e s’ n e g l i g e n c e c l a im in

a pp e ll a nts’ fa v o r

.

I mpli e d W arr a nti e s of W o r km a nship a nd H a bit a b i li t y

I n t h e ir s ec ond issu e

, a p p e ll a nts a r g ue th e r e is no s umm a r y ju d g m e nt e vid e n c e th a t D a ll a s

D ra in or T ra vis ar e build er s a nd, th er e f o re

, the t r i a l c ou r t er r e d b y g r a nting summ a r y ju d g m e nt in

fa vor of a p p e ll ee s on th e ir b reac h of impli e d w a r ra n t y o f wo r km a nship a nd h a bit a bili t y c l a ims.

App e ll ee s ac know l e d g e th e y did not a ll e ge e ith e r D a ll a s D ra in or T ra vis w a s a build er

.– 14 How e v e r

, a pp e ll ee s a s s er t D a ll a s D ra in a d mitt e d it b reac h e d a n impli e d w arra n t y of

wo r km a nship th r o u g h t he d ee m e d a dmission of a pp e ll e e s’ a ll e g a tion th a t it imp r op er l y

c onn ec t e d t h e sump pump to the s a nit a r y s e w e r lin e.

I n th e ir thi r d issu e

, a pp e l l a nts a ss er t the t r i a l c ou r t err e d b y g ra nti n g su m m a r y ju d g m e nt

on a pp e ll a nts’ c ommon l a w b reac h of impli e d w arra n t y of h a bit a bility c l a im, b e c a use the

summ a r y ju d g m e nt e vid e n c e do e s not e st a blish the re sid e n c e is so d efec tive th a t it is unsuit a ble

f

or use a s a d w e llin g

. A pp e ll ee s ac kn o wl e d g e t h e ir on l y summ a r y ju d g m e nt e vid e n c e in suppo r t

of this c l a im is the aff id a vit of a pp e ll e e K e l l y A. W e lsh in whi c h s h e a tt e st e d the C i t y of

Hi g hl a nd P ar k re qui r e d re m e di a tion of the r outing of su rf a c e w a t e r fr o m the re sid e n ce’ s sump

pump to the s a nit a r y s e w e r line a nd t h a t, “ [ o ] th er wis e

, [ a ] pp e ll a nts ar e c o r rec t th a t th e r e w a s no

summ a r y ju d g m e nt e vi d e n c e th a t p r ov e s [ the r e sid e n ce ] w a s uninh a bit a bl e

. ”

“ Th r o u g h the impli e d w a rra n t y of g ood wo r km a n s hip, the c ommon l a w r ec o g ni z e s th a t a

n e w home build e r shou l d p erf o r m with a t l ea st a minim a l st a nd ar d of c a r e .” C e nt e x Ho m e s v.

Bu ec h e r

, 95 S

. W .3d 266, 273 ( T e x

. 2002 )

. “ This impli e d w arra n t y r e qui re s the build e r to

c onst r u c t the home in the s a me m a nn e r a s would a g e n e r a l l y p r o f i c i e nt build e r e n g a g e d in

simil a r wo r k a nd p e rf o r ming und e r simil a r c i r c umst a n ce s.” I d .; M id

- C ontin e nt C as. C o. v

.

C

astagna

, 410 S

. W .3d 4 45, 461 ( T e x

. App.

— D a l l a s 2013, p e t. d e ni e d )

. “ The impli e d w a r ra n t y

of g ood wo r km a nship s e r v e s a s a ‘ g a p

- f ill er ’ o r ‘ d efa ult w a rra n t y ’ ; it a pp l i e s unl e ss a nd until the

p ar ti e s e x p re ss a c ont ra r y in t e ntion.” Bu ec h e r

, 95 S

. W .3d a t 273. “ Thu s

, the imp l i e d w arra n t y

of g ood w o r km a nship a t t ac h e s to a n e w home s a le if the p ar ti e s’ a g r ee m e nt do e s not p r ovide

how the build e r or the st r u c tu r e is to p erf o r m.” I d

.

“ The impli e d w a r ra n t y of h a bit a bili t y

, on the oth e r h a nd, looks on l y to the f inish e d

p r odu c t.” I d

. “ This i m pli e d w arra n t y is mo r e l imit e d in s c op e

, p r ot ec ting the pu r c h a s e r on l y

fr om those d e f ec ts th a t u nd er mine the v e r y b a sis of the b a r g a in.” I d

. “ I t re qui re s the build e r to– 15 p r ovide a h o use th a t is s afe

, s a nit a r y

, a nd oth e r wise f it f or hum a n h a bit a tion.” I d

. “ I n oth e r

wo r ds, this impli e d w arra n t y on l y p r ot e c ts n e w home b u y er s fr om c onditions th a t ar e so

d efec tive th a t the p r op e r t y is unsuit a ble f or its i n t e nd e d use a s a hom e .” I d

. a t 273, 274. “ As

c omp are d to the w a r ra n t y of g ood wo r km a nship, ‘ the impli e d w ar r a n t y of h a bit a bili t y re p re s e nts

a f o r m o f st r i c t li a bili t y sin c e the a d e q u a c y o f t he c ompl e t e d st r u c tu r e a nd not the m a nn e r of

p erf o r m a n c e b y the buil d e r g ov er ns li a bili t y

. ’ ” I d

. a t 273 (c iting D a vis, T he I llusi v e W arranty of

W

o r k manli k e P e rforman ce : C onstru c ting a C on ce ptual Fram e w or k

, 72 N E B

. L

. R E V

. 981, 1015

( 1993 ))

. W hile the impli e d w a r ra n t y of g ood wo r km a nship f o c us e s on the build er’ s c ondu c t, the

impli e d w arra n t y of h a bit a bili t y f o c u s e s on the st a t e of the c ompl e t e d st r u c t u re

. I d

. a t 272

– 73.

T e x a s c ou r ts h a ve c onsist e nt l y h e ld th a t a p r o p er t y own e r m a y not r e c ov e r und e r a n

impli e d w arra n t y t h e o r y fr om a sub c ont r a c tor w ith whom the own e r h a d no di rec t c ont r a c tu a l

re l a tionship. S e e P. Mc Gr e gor Ent e rs., I n c

. v

. Hi ck s C onstr. Grp., LLC , 420 S

. W .3d 45, 50

– 51

( T e x

. App.

— Am ar illo 2012, no p e t.) (“ A re vi e w of the opinions of the int er m e di a te c ou r ts of

a pp ea l in T e x a s r e g ar di n g the qu e stion of impli e d w arra nti e s b e tw ee n th e own e r of a p r op er t y

a nd a sub c ont r a c tor re v e a ls th a t our sist e r c o u r ts h a ve c onsist e nt l y h e ld t h a t a p r op er t y own e r

m a y not r ec o v e r f r om a s ub c ont rac tor with whom the own e r h a d no di r e c t r e l a tionship. ”) ; Pugh

,

243 S

. W .3d a t 89 ( p r o p er t y own e r m a y not r ec ov e r und e r impli e d w arr a n t y t h e o r y fr om

sub c ont rac tor with wh o m own e r h a d no c ont r a c tu a l re l a tionship ) ; Ra y on v

. En e rgy Sp e c ialti e s,

I

n c

. , 121 S

. W .3d 7, 21 ( T e x

. App.

— F o r t W o r th 2002, no p e t.) ( hold i ng pl a inti ff’ s impli e d

w arr a n t y c l a im a g a inst sub c ont rac tor w a s b ar r e d a s a m a tt e r of l a w ) ; R a y mond v

. Ra h m e

, 78

S

. W .3d 552, 563 ( T e x

. App.

— Austin 2002, no p e t.) ( noting th a t, b ec a u se p r op er t y o wn e r h a s

rec ou r s e a g a inst g e n era l c ont rac tor with whom he c ont r a c t e d, “ th e r e is no c omp e lling public

poli c y rea son to impose a n impli e d w ar r a n t y a g a inst a sub c ont r ac to r

, ” a nd holding e vid e n c e

l e g a l l y insu f f i c i e nt to s u ppo r t a f indi n g of impli e d w ar r a n t y of good a nd wo r km a nlike c ond u c t– 16 b e tw ee n sub c on t rac tor a nd p r op er t y own e r) ; J

. M

. K rupar C onstr. C o. v

. Ros e nb e rg

, 95 S

. W .3d

322, 332 ( T e x

. App.

— H ouston [ 1st Dist

. ] 2002, no p e t.) ( holdi n g hom e ow n e r did not h a v e c a use

of ac tion f or c ommon l a w b re a c h of impli e d w arra n t y a g a inst sub c ont rac tor who p erf o r m e d

f

ound a tion wo r k on home a nd st a ting th a t hom e own er’ s r e m e d y f or d a m a g e s re sulting f r om

fa ul t y c onst r u c tion w a s a g a inst g e n e r a l c on t rac to r ) ; C odn e r v

. Ar e llano

, 40 S

. W .3d 666, 672

– 73

( T e x

. App.

— Austin 20 0 1, no p e t.) (“ d ec lin [ in g ] t o a pp l y

, a s a m a tt e r of public poli c y

, a n impli e d

w arr a n t y .

. . b e tw e e n a hom e own e r a nd a sub c o nt rac to r ” )

. 5 W ith re g ar d t o a pp e ll ee s’ b r e ac h o f

impli e d w arra n t y of w o r km a nship a nd h a bit a bili t y c l a ims, th e r e w a s n o summ a r y ju d g m e nt

e vid e n c e D a ll a s D r a in o r T ra vis w e r e build er s o f the re sid e n ce

, su c h t h a t th e y o w e d a du t y to

a pp e ll ee s.

F u r th er

, with r e g ar d to a pp e ll ee s’ b r e ac h of impli e d w ar r a n t y o f h a bit a bility c l a im a g a inst

D a ll a s D ra in, a n impli e d w arr a n t y o f h a bit a bili t y p r ot ec ts n e w ho m e b u y e r s fr om c onditions th a t

ar e so d ef e c tive th a t the p r op er t y is unsuit a ble f o r its int e nd e d pu rpose a s a n e w hom e

. Bu ec h e r

,

95 S

. W .3d a t 273. As a pp e ll ee s judi c i a l l y a d mit in th e ir pl ea din g s a nd in K e l l y W e lsh ’ s

aff id a vit, th e y w e r e not the o r i g in a l pu r c h a s e r s of the re sid e n ce

. As ac kn o wl e dg e d b y a pp e ll ee s,

th er e is no summ a r y ju d g m e nt e vid e n c e th a t the re sid e n c e w a s not h a bit a ble b eca use the sump

pump w a s imp r op er l y c onn ec t e d to the s a nit a r y s e w e r lin e

, a nd a pp e ll e e s n e v e r a ll e g e d th e ir

“ s a g g ing” s e w e r line a n d a n y b ac ki n g up of t h e s e w e r line w a s in a n y w a y c a us e d b y the

c onn ec tion of the sump p ump to th a t lin e

.

Th er e is no summ a r y jud g m e nt e vid e n c e th a t D a ll a s D ra in or T ra vis w e r e build er s of the

re sid e n c e

, a n e c e ss a r y e l e m e nt of a pp e ll ee s’ b r e ac h of impli e d w arra n t y of wo r km a nship a nd

5 Se e al s o S c h e l e r v

. S m i t h

, No

. 0 5

- 08

- 0 1 4 3 9

- C V

, 2 0 1 0 W L 29 7 8 33 3

, a t * 2 ( T e x

. A pp.

— D a ll a s J u l y 30

, 2 0 1 0

, n o p e t. ) ( m e m. o p. ) ( c o u r t s

p r e s e nt e d w it h q u e s ti o n o f w h e th e r i m p l i e d w a rr ant y e x i s t s w it h r e s p e c t t o s u bc on t r a ct o r h a v e h e l d n o s u c h w a rr a n t y e x i s t s b e cau se t h e

h o m e o w n e r ha s a r e m e d y a g ai n st a g e n e r a l c o nt r a c t or) ; S c ha m b a c h e r v

. R

. E

. I

. E le c

. , I n c

. , No

. 2

- 0 9

- 3 45

- C V

, 2 01 0 W L 3 07 5 70 3

, a t * 4 ( Te x

. A

pp.

— F or t Wor t h A u g

. 5

, 2 01 0

, n o p e t. ) ( m e m. o p. ) ( “ R e g a r d i n g b r e a c h o f i m p l i e d w a rr ant y c l ai ms, Te x a s c o u r t s ha v e c o n s i s t e n t l y h e l d th a t a

p ro p e r t y o w n e r m a y n o t r e c o v e r f

r o m a s u bc o nt r a ct o r w it h w h o m t h e o w n e r ha d n o di r e c t c o nt r a c t u a l r e l ati o n s h i p .” ) ; G l e n n v

. No r t e

x F o un d

. D e s i g n s

, I nc

. , No

. 2

- 0 7

- 1 72

- C V

, 20 0 8 W L 20 7 8 51 0

, a t * 3 ( T e x

. A pp

. — F or t W o r t h Ma y 15

, 2 00 8

, n o p e t

. ) ( m e m. o p. ) ( “ T e x a s c o u r t s ha v e

c o n s i s t e nt l y h e l d t ha t a p ro p e r t y o w n e r m a y n o t r e c ov e r fro m a s u b c o nt r act o r w it h w h o m t h e o w n e r ha d n o di r e c t c o nt r a c t ua l rel ati o n s h i p .” )

.– 17 h a bit a bili t y c l a ims. Th e r e is a lso no summ a r y j ud g m e nt e vid e n c e a pp e l l ee s w e r e the o r i g in a l

pu rc h a s e r s of the re sid e n c e or th a t the re sid e n c e w a s not h a bit a ble a s a r e sult of the sump pump

line b e i n g imp r op e r l y c onn ec t e d to the s a nit a r y s e w e r lin e

, n e c e ss a r y e l e m e nts of a pp e ll ee s ’

b reac h of impli e d w a r r a n t y of h a bit a bili t y c l a i m. App e ll ee s, th e r ef o r e

, fa il e d to c arr y t h e ir

bu r d e n of e st a blishi n g t h e y w e r e e ntitl e d to ju d g m e nt a s a m a tt e r of l a w on th e ir b r eac h of

impli e d w arr a n t y of wo r km a nship a nd h a bit a bility c l a ims. A cc o r di n g l y

, we r e solve a pp e ll ee s ’

s ec ond a nd thi r d issu e s i n th e ir fa vo r.

A tt o r n e y ’ s F ees

I n its F e b r u a r y 26, 2014 o r d e r g r a nting summ a r y jud g m e nt a nd f i n a l judgm e nt, the t r i a l

c ou r t o r d ere d D a ll a s D r a i n a nd T ra vis joint l y a nd s e v era l l y li a ble f or a pp e l l ee s’ a tto r n e y ’ s f ee s in

the a mount of $20,000, a nd c onti n g e nt a tto r n e y ’ s fee s in the a mounts of $10,000 f or a p p e ll ee s

su cce ss f ul l y opposi n g a bill of re vi e w or a pp e a l to the c ou r t o f a pp ea ls, $5,000 in the e v e nt a

p e tition f or re vi e w is f il e d in the T e x a s S up re me C ou r t, a nd $7,500 in t he e v e nt a p e tition f or

re vi e w is g r a nt e d b y t h e T e x a s S up re me C ou r t. I n th e ir f ou r th issu e

, a pp e ll a nts c ont e nd the t r i a l

c ou r t imp r op er l y a w ar d e d a pp e ll ee s a tto r n e y ’ s f e e s a s th e y w e r e not r ec ov era ble un d e r e ith e r

a pp e ll ee s’ n e g l i g e n c e or b reac h of impli e d w a r ra n t y c l a ims. App e ll ee s a r gue th e y a r e e ntitl e d to

a n a w ar d o f a tto r n e y ’ s f ee s b a s e d on the summ a r y ju d g m e nt in th e ir fa v or on th e ir b re a c h of

impli e d w arra n t y o f wo r km a nship c l a im. W e r e vi e w the t r i a l c ou r t ’ s d e c ision to g r a nt or d e n y

a tto r n e y ’ s f e e s f or a n a b use of dis cre tion. Ridge Oil C o. v

. Guinn I n v s., I n c

. , 148 S

. W .3d 143,

163 ( T e x

. 2004 ) ; I n w ood N at ’ l Bank v

. W e lls Fargo Ban k

, N .A.

, No. 05

- 1 3

- 01689

- C V, 2015 W L

1929251, a t *8 ( T e x . App.

— D a ll a s Ap r . 29, 201 5 , no p e t. h. )

.

On this rec o r d, w e h a ve c on c lud e d a bove t h a t summ a r y ju d g m e nt on a pp e ll ee s’

n e g l i g e n c e a nd b re a c h of impli e d w a rra n t y c l a ims w a s imp r op er l y g r a nt e d; th er e f o re

, th e se– 18 c l a ims ca nnot suppo r t a summ a r y ju d g m e nt a w ar d of a p p e ll ee s’ a tto r n e y ’ s f ee s. W e re solve

a pp e ll a nts’ f ou r th issue i n th e ir fa vo r

.

T r avis ’ s L ia b i l i t y f or Clai m s Agai n st Dallas D r ain

I n th e ir f i f

th issu e

, a pp e l l a nts a ss er t the t r i a l c ou r t erre d a s a m a tt e r o f l a w b y re n d er i ng

jud g m e nt th a t T ra vis, a s a n o ff i ce r o r di rec tor of D a ll a s D ra in, is p er son a l l y li a b l e to a pp e ll ee s

f

or unint e ntion a l a c ts of D a ll a s D r a in b a s e d on D a ll a s D ra in ’ s f o r fe itu r e o f its c o rpo r a te st a tus.

R e l y i n g on th e ir summ ar y j u d g m e nt p r oof th a t D a ll a s D ra in f o r f e it e d its c o r po ra te e x ist e n c e on

J a nu a r y 28, 2011, a nd T r a vis is a n o ff i c e r a nd di r ec tor of D a ll a s D r a in, a p p e ll ee s c ont e nd T ra vis

is li a ble f or t h e ju d g m e nt a g a inst D a ll a s D r a in a s a c o rp o ra te “ d e b t ” und e r s ec tion 171.255 of t h e

T e x a s T a x C od e

. 6

On this r e c o r d, we h a v e c on c lud e d t h a t summ a r y jud g m e nt on a p p e ll ee s’ n e g l i g e n c e a nd

b reac h of impli e d w a rr a n t y c l a ims w a s imp r op e r l y g ra nt e d; t h er e f o re

, the c l a ims c a nnot suppo r t

a “ ju d g m e nt” c onstituting a c o rpo ra t e “ d e bt” f o r whi c h T ra vis, a s a di r e c tor a nd o ff i c e r of D a ll a s,

c ould be li a bl e

. W e re so l ve a pp e ll a nts’ f i f

th issue in th e ir fa vo r

.

6 P u r s u a n t t o s e cti o n 17 1

. 2 5 1 o f th e T e x a s T a x C o d e

, th e c o m pt rol l e r s ha l l for f e i t th e c or p or a t e p r i v i l e g e s o f a c or p or ati o n o n w h i c h t h e

fr an c hi se t a x i s i m p o s e d i f t h e c or p or ati o n : ( 1 ) d o e s n o t f i l e th e r e qui r e d [t a x ] r e p or t w it h i n for t y

- f i v e d a y s o f th e dat e th e n o tic e o f forf e itu r e i s

m ai l e d ; ( 2 ) d o e s n o t p a y th e t a x i m po s e d w ith i n for t y

- f i v e da y s o f th e d a t e th e n o t i c e o f forf e itu r e i s m ai l e d o r d o e s n o t pa y w ith i n th o se for t y

da y s a p e na l t y i m p o s e d r e l atin g t o t h a t ta x ; o r ( 3 ) d o e s n o t p e r m i t th e c o m pt roll e r t o e x a m in e th e c or p or at e r e c or d s. Se e T EX

. T A X C ODE A NN

. § 1 7 1

. 2 5 1 ( W e st 2 0 15 )

. Un d e r s e ct io n 1 7 1

. 2 5 5

, d i r e ct or s a n d off ic e

r s m a y lo s e th e i r p ro t e cti o n fro m l ia b i l it y p rov id e d b y th e c or p or at e for m.

Se e i d

. § 1 7 1

. 25 5 ( a ) ; I n r e T r a mm e l l

, 24 6 S

. W .3 d 8 1 5

, 8 21

– 2 2 ( Te x

. A pp.

— D a ll a s 2 0 0 8

, or i g

. p ro c ee d ing)

. I f a c or p or ati o n ’ s c or p or at e

p r i v i l e g e s a r e for f e it e d

, e a c h di r e ct o r o f off ic e

r i s l i a b l e fo r e ac h d e b t o f th e c o r p or ati o n t h a t i s c r e at e d o r i n c u rr e d i n Te x a s a f t e

r t h e dat e o n

w hic h t h e ta x r e p or t

, ta x

, o r p e n a l t y i s d u e a n d b e for e th e c or p or at e p r i v i l e g e s a r e r e v i v e d

. Se e T EX

. T A X C ODE A NN

. § 1 7 1

. 2 55 ( a ) ; I n re

T

r a mm e l l

, 2 4 6 S

. W

. 3 d a t 8 2 1

.– 19 Co n c l u sion

W e h a ve ju r isdi c tion ov e r D a ll a s D ra in ’ s a pp e a l. H a vi n g re sol v e d a pp e l l a nts’ issu e s in

th e ir fa vo r

, we re v er se t he t r i a l c o u r t ’ s ju d g m e n t a nd re m a nd this ca use to the t r i a l c ou r t f or

f u r th e r p r o c e e din g s.

/ R ob er t M. F illmo re /

R O B E R T M. F I L L M O R E

J U S T I C E

140831 F

. P 05– 20 

# S

Cour t o f A pp ea l s

F if t h D i s tr i c t o f Te x a s a t Da l l as

J U D GMENT

D A L L AS D R A I N C O M P ANY, I N C . AND

KE V I N T R A V I S , Ap p e ll a nts

No. 05

- 14

- 00831

- C V V.

KE V I N D. W E L S H A N D K E L L Y A.

W E L S H, App e ll ees On App ea l f r om the 14th J udi c i a l Dist r i c t

C ou r t, D a ll a s C oun t y , T e x a s,

T r i a l C ou r t C a use No. D C 13

- 09129.

Opinion d e liv ere d b y J usti c e F illmo re

,

J us t i ce s B r i d g e s a nd B r o wn p ar ti c ip a ti n g

.

I n acc o r d a n c e with this C ou r t ’ s opinion of this d a t e , the jud g m e nt of the t r i a l c ou r t is

R E V E R SE D a nd this ca use is R E M AND E D to t he t r i a l c ou r t f o r f u r th e r p r o cee di n g s.

I t is ORD E R E D th a t a p p e ll a nts D a ll a s D ra in C o m p a n y

, I n c

. a nd K e vin T r a vis rec ov e r

th e ir c osts of this a pp ea l fr om a pp e ll e e s K e vin D. W e lsh a nd K e l l y A. W e l sh.

J ud g m e nt e nt ere d this 8th d a y o f J u l y , 2015.