COURT OF APPEALS

SECOND DISTRICT OF TEXAS

FORT WORTH

NO. 02-11-00490-CV

JIM AND REBECCA BROWN APPELLANTS

V.

CALDWELL & FAMILY CUSTOM 

HOMES, INC.

APPELLEE

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FROM THE 362ND DISTRICT COURT OF DENTON COUNTY

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MEMORANDUM OPINION1

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Appellants Jim Brown and Rebecca Brown brought claims against 

appellee Caldwell & Family Custom Homes, Inc. for negligence, breach of 

warranty, and violation of the Deceptive Trade Practices-Consumer Protection 

Act (DTPA).2 The trial court granted summary judgment for appellee on 

 

1See Tex. R. App. P. 47.4.

2See Tex. Bus. & Com. Code Ann. § 17.41 (West 2011).
2

limitations grounds on appellants’ negligence and DTPA claims.3 In one issue, 

appellants argue that the trial court erred by granting appellee’s motion for 

summary judgment because the limitations period was tolled by application of the 

discovery rule. We affirm.

Background Facts

Appellee has been building homes throughout Carrollton, North Dallas, 

Plano, and Frisco since 1997. In 2005, appellants bought a home in Carrollton 

that had been built by appellee in 1999 and had been lived in by previous 

owners. Wade Otte delivered an inspection report to appellants prior to the 

purchase. Otte’s report disclosed many concerns about the home, including a 

negative drain angle on the front balcony and porch. Additionally, the previous 

home owners informed appellants that one of the balconies had leaked and had 

been repaired by appellee.

After appellant Jim Brown noticed in 2007 that water was intruding on the 

ceiling at the front of the house, appellants hired a contractor to restructure the 

balconies and invited Patrick Caldwell, appellee’s president, to the home to 

speak to the contractor. Appellants’ contractor reported that the leaks had been 

caused by faults in the original construction of the balconies. Appellants and 

Caldwell then exchanged several letters in which appellants requested that 

 

3

The court also granted summary judgment against appellants’ breach of 

warranty claim because the “defect was not latent.”
3

Caldwell reimburse them for the cost of the repairs.4 They were unable to come 

to an agreement.

Appellants sued appellee in July 2009. They asserted claims for negligent 

construction of the balconies, for breach of the warranty of good and 

workmanlike construction, and for violation of the DTPA. Appellee answered the 

suit through a general denial and by asserting that appellants’ claims were barred 

by a statute of limitations. Appellee filed a motion for summary judgment on that 

ground, among others. Appellants responded by asserting that the balcony flaws 

were latent defects and thus the discovery rule tolled the statute of limitations. 

The trial court granted appellee’s motion for summary judgment. As to 

appellants’ negligence and DTPA claims, the trial court expressly determined that 

the claims were barred by limitations. This appeal followed.

Standard of Review

We review a summary judgment de novo. Travelers Ins. Co. v. Joachim, 

315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the 

light most favorable to the nonmovant, crediting evidence favorable to the 

nonmovant if reasonable jurors could, and disregarding evidence contrary to the 

nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp 

Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every 

reasonable inference and resolve any doubts in the nonmovant’s favor. 20801, 

 

4Appellants’ homeowner’s insurance company declined to cover the cost of 

the repairs.
4

Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A defendant is entitled to 

summary judgment on an affirmative defense if the defendant conclusively 

proves all elements of the affirmative defense. Frost Nat’l Bank v. Fernandez, 

315 S.W.3d 494, 508–09 (Tex. 2010); see Tex. R. Civ. P. 166a(b), (c).

Appellee’s Statute of Limitations Affirmative Defense

A defendant moving for summary judgment on the affirmative defense of 

limitations must conclusively establish that defense by (1) showing when the 

cause of action accrued, and (2) negating the discovery rule, if it applies and has 

been pled, by proving as a matter of law that there is no genuine issue of 

material fact about when the plaintiff discovered, or in the exercise of reasonable 

diligence should have discovered, the nature of the injury. KPMG Peat Marwick 

v. Harrison Cnty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). As 

appellants acknowledge, the statute of limitations on DTPA and negligence 

claims is two years. See Tex. Bus. & Com. Code Ann. § 17.565 (West 2011); 

Tex. Civ. Prac. & Rem. Code Ann. § 16.003(a) (West Supp. 2012); KPMG Peat 

Marwick, 988 S.W.2d at 749; Zavadil v. Safeco Ins. Co. of Ill., 309 S.W.3d 593, 

594 (Tex. App.—Houston [14th Dist.] 2010, pet. denied); Pirtle v. Kahn, 177 

S.W.3d 567, 571 (Tex. App.—Houston [1st Dist.] 2005, pet. denied).

The purpose of a statute of limitations is to “compel the exercise of a right 

[of action] within a reasonable time so that the opposing party has a fair 

opportunity to defend while witnesses are available and the evidence is fresh in 

their minds.” Brinker Tex., L.P. v. Looney, 135 S.W.3d 280, 284 (Tex. App.—
5

Fort Worth 2004, no pet.) (citing Cont’l S. Lines, Inc. v. Hilland, 528 S.W.2d 828, 

831 (Tex. 1975)). A cause of action accrues, and the statute of limitations begins 

to run, when facts come into existence that authorize a claimant to seek a judicial 

remedy. Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 202 (Tex. 

2011) (op. on reh’g) (citing Provident Life & Accident Ins. Co. v. Knott, 128 

S.W.3d 211, 221 (Tex. 2003)). When a cause of action accrues is normally a 

question of law. Id.

The discovery rule is a limited exception to the general principle that a 

statute of limitations begins to run when an injury occurs, regardless of when the 

plaintiff learns of the injury. Computer Assocs. Int’l, Inc. v. Altai, Inc., 918 S.W.2d 

453, 455 (Tex. 1996) (op. on reh’g); Trinity River Auth. v. URS Consultants, Inc.-

Tex., 889 S.W.2d 259, 262 (Tex. 1994); Moreno v. Sterling Drug, Inc., 787 

S.W.2d 348, 351 (Tex. 1990). The discovery rule applies only when the “nature 

of the plaintiff’s injury is both inherently undiscoverable and objectively verifiable.” 

Shell Oil Co. v. Ross, 356 S.W.3d 924, 930 (Tex. 2011). An injury is inherently 

undiscoverable if by its nature, it is “unlikely to be discovered within the 

prescribed limitations period despite due diligence.” Id.; see Wagner & Brown, 

Ltd. v. Horwood, 58 S.W.3d 732, 734–35 (Tex. 2001); Rashti v. GS Roofing 

Prods., Inc., No. 02-03-00250-CV, 2004 WL 1879641, at *1 (Tex. App.—Fort 

Worth Aug. 23, 2004, no pet.) (mem. op.).

When the discovery rule applies, the period of limitations begins to run 

when the plaintiff actually discovers, or with the exercise of reasonable diligence 
6

should have discovered, the nature of the injury. Moreno, 787 S.W.2d at 351; 

Holland v. Lovelace, 352 S.W.3d 777, 790–91 (Tex. App.—Dallas 2011, pet. 

denied). The plaintiff does not need to know the full extent of the injury before 

the statute of limitations begins to run. Dean v. Frank W. Neal & Assocs., Inc., 

166 S.W.3d 352, 356 (Tex. App.—Fort Worth 2005, no pet.); see also PPG 

Indus., Inc. v. JMB/Houston Ctrs. Partners Ltd. P’ship, 146 S.W.3d 79, 93–94

(Tex. 2004) (stating that limitations begins to run under the discovery rule even if 

the plaintiff does not know the specific cause of the injury, the party responsible 

for it, the full extent of it, or the chances of avoiding it); Bayou Bend Towers 

Council of Co-Owners v. Manhattan Constr. Co., 866 S.W.2d 740, 743 (Tex. 

App.—Houston [14th Dist.] 1993, writ denied) (“[A]ll that is required to commence 

the running of the limitations period is the discovery of an injury and its general 

cause, not the exact cause in fact and the specific parties responsible.”).

In Dean, the plaintiffs contracted with the defendants to build their home. 

166 S.W.3d at 354. After moving into the house in 1996, the plaintiffs noticed 

cracks around the house and contacted the defendants to discuss possible 

remedies. Id. at 355. When the defendants refused to pay for repairs, the 

plaintiffs sued for negligence, breach of warranty, and violation of the DTPA, 

among other causes of action, in January 2002. Id. The trial court granted the 

defendants’ motion for summary judgment on the ground that the plaintiffs’ 

claims were barred by the statute of limitations. Id. The plaintiffs contended that 

they could not have discovered the full extent of the house’s foundation problems 
7

until they hired an engineer to examine the house in late 1998. Id. at 356. We 

held that the discovery rule did not toll the statute until the plaintiffs learned of the 

actual cause of the injury but that the limitations period instead began to run 

when the plaintiffs saw cracking in the house and knew of some movement in the 

foundation. Id. at 357.

Likewise, in Booker v. Real Homes, Inc., the plaintiffs hired the defendant 

to construct their home. 103 S.W.3d 487, 490 (Tex. App.—San Antonio 2003, 

pet. denied). Because of construction defects, the windows in the plaintiffs’ 

home began to leak. Id. One year after moving into the house, the plaintiffs 

wrote a letter to the defendant complaining of several issues in the home, 

including leaky windows. Id. The plaintiffs had also noticed a musty odor inside 

the home. Id. The defendant made repairs to the home but the musty smell 

returned. Id. Three years after moving into the home, the plaintiffs discovered 

toxic mold in the walls caused by the window leaks. Id. The plaintiffs filed 

negligence and DTPA claims more than two years after initially contacting the 

defendant about the leaky windows. Id. The plaintiffs argued that the discovery 

rule tolled the statute of limitations until they knew the exact cause of the leaks

and that their knowledge of the leaks themselves was insufficient to begin the 

limitations period. Id. at 492. The San Antonio Court of Appeals disagreed, 

concluding that that “all that is required to commence the running of the 

limitations period is the discovery of an injury and its general cause, not the exact 

cause in fact and the specific parties responsible.” Id.; see also Rashti, 2004 WL 
8

1879641, at *1–2 (holding that the limitations period began to run when a 

shopping center owner discovered leaks in her building and not when she 

discovered the specific condition that caused the leaks).

Appellants argue that their balcony leak, which caused damage to the 

inside of their home, was a latent defect, therefore tolling the limitations period 

under the discovery rule. A latent defect is one that is not discoverable by a 

reasonably prudent inspection. Gupta v. Ritter Homes, Inc., 646 S.W.2d 168, 

169 (Tex. 1983); 7979 Airport Garage, L.L.C. v. Dollar Rent A Car Sys., Inc., 245 

S.W.3d 488, 503 (Tex. App.—Houston [14th Dist.] 2007, pets. denied) (op. on 

reh’g). Appellants claim that they did not discover any defects until the balconies 

began leaking water inside their home in 2008 and, as such, the statute of 

limitations should be tolled until that point. But Otte’s home inspection report, 

which he delivered to appellants in the latter part of 2005, stated in part,

The inspection is of conditions which are present and visible at the 

time of the inspection. . . .

This report is intended to provide you with information 

concerning the condition of the property at the time of the inspection. 

Please read the report carefully. . . .

. . . .

A negative drain angle was noted at the front porch and the 

balcony above (porch/balcony slopes toward the house). This is 

improper and should be further investigated by a structural engineer 

to determine what if any repairs should be [completed] and by a 

qualified contractor to determine if any damage has occurred prior to 

closing on this house. The engineer should also rule out damage to 

the structure of the house.
9

. . . .

Rust was noted at the flashing to the west of the main upper 

level balcony door. This appears to be one of the areas where water 

is holding. This should be further investigated and repaired as 

needed. [Emphasis added.]

Appellants argued in the trial court that appellee had “brought forth no 

evidence to support its claim that [appellees were] aware of the leak any earlier 

than 2008.” Appellant Jim Brown’s affidavit states that at the time he and his wife 

bought the house, they were not aware of water penetration issues on the 

balcony. Although the inspection report did not specifically convey to appellants 

that the balconies leaked water into their home, it did put them on notice that the 

balconies had a drainage problem, and it advised them to investigate the 

problem and to determine if any damage had been caused by it. Cf. Irwin v. 

Nortex Found. Designs, Inc., No. 02-08-00436-CV, 2009 WL 2462566, at *5 

(Tex. App.—Fort Worth Aug. 13, 2009, no pet.) (mem. op.) (holding that an 

engineering report demonstrated that the plaintiffs were on notice of their house’s 

potential foundation problems and that the plaintiffs could have discovered the 

problems by exercising reasonable diligence).

In the trial court, appellants argued that the damage to the inside of their 

home was caused, in part, by the fact that a “rubber pan was not attached to the 

[balcony’s] flashing[,] allowing the water to run under the flashing and into the 

residence.” Thus, on appeal, appellants appear to contend that the inspection 

report, which described rusted flashing and a negative drain angle but not the 
10

absence of a rubber pan, was insufficient to show that with reasonable diligence,

they should have discovered the leak. But in appellants’ summary judgment 

evidence, they conceded that the water damage in their home was at least 

partially caused by the negative drain angle that the inspection report warned 

them about, even if it was also caused by other factors. Specifically, in January 

2009, in a letter to Caldwell, appellant Jim Brown stated that contractors he had 

hired had opined about “many issues with the original construction that [had] 

caused the leaking of the balcony,” including “Slope: The large balcony sloped 1 

1⁄2 [inches] in towards the house. This caused water to sit on the balcony and run 

to the back of it.” [Emphasis added.] Regarding the rubber pan, Brown’s letter to 

Caldwell stated, “The rubber pan was not attached in [any way] to the metal 

flashing . . . , so as water would run back towards the house it would go right 

under the metal flashing.” [Emphasis added.]

We conclude that the combination of Otte’s inspection report, which 

disclosed the negative drain angle and advised appellants to determine whether

that condition had caused damage, and of appellants’ concession that the 

negative drain angle partly caused the damage of which they complain, comprise 

conclusive evidence that with the exercise of reasonable diligence, appellants 

should have discovered the nature of the injury at the time that they received the 

report in 2005. See Moreno, 787 S.W.2d at 351; Dean, 166 S.W.3d at 357.

5

 

 

5Because we hold that the summary judgment evidence conclusively 

establishes that appellants should have discovered the nature of their injury by
11

Appellants’ later discovery of the issue with the flashing and the rubber pan is 

immaterial to whether, as a result of the report about the negative drain angle, 

they should have discovered the nature of their injury in 2005. See Bayou Bend, 

866 S.W.2d at 743 (holding that the plaintiff must only discover an injury and 

general cause but not the exact cause in fact to commence the running of the 

limitations period).

Therefore, we hold that even if the discovery rule applied to the facts of 

this case, the two-year statute of limitations for appellants’ negligence and DTPA 

claims began to run, at the latest, in 2005, when they received the inspection 

report and, with reasonable diligence, should have discovered the nature of their 

injury. See Moreno, 787 S.W.2d at 351; Dean, 166 S.W.3d at 357. Because 

appellants did not file those claims until 2009, we hold that they are barred by 

limitations and that the trial court did not err by granting appellee’s motion for 

summary judgment.

Furthermore, the trial court granted summary judgment on appellants’ 

breach of warranty claim on the ground that the defect was not latent.6 See 

 

exercising reasonable diligence after receiving the inspection report, we conclude 

that the statement in Jim Brown’s affidavit that he did not actually know of water 

penetration issues until 2007 is immaterial. See Moreno, 787 S.W.2d at 351 

(“When applied, the [discovery] rule operates to toll the running of the period of 

limitations until the time that the plaintiff discovers, or through the exercise of 

reasonable care and diligence should discover, the nature of his injury.”).

6Although appellants’ brief does not contain argument particularly related 

to their breach of warranty claim, we have broadly construed the brief as 

challenging the summary judgment on all three claims.
12

Gupta, 646 S.W.2d at 169 (stating that the implied warranty that a building 

constructed for residential use has been constructed in a workmanlike manner 

covers “latent defects not discoverable by a reasonably prudent inspection of the 

building at the time of sale”). For the reasons stated above, the summary 

judgment evidence conclusively establishes that the alleged defect in appellee’s 

construction of appellants’ home was not latent (because it was discoverable 

through a reasonably prudent inspection), so we hold that the trial court correctly 

granted summary judgment on the breach of warranty claim as well. See id.

For all of these reasons, we overrule appellants’ sole issue.

Conclusion

Having overruled appellants’ issue, we affirm the trial court’s judgment.

TERRIE LIVINGSTON

CHIEF JUSTICE

PANEL: LIVINGSTON, C.J.; MCCOY and MEIER, JJ.

DELIVERED: October 4, 2012