### T E X A S C O U R T O F A P P E A L S , T H I R D D I S T R I C T , A T A U S T I N

NO. 03-12-00071- CV

Marian Sw anson and Clau dia Rom ain, App ellants

v. Stouf fer & Associat es, LLP, A ppellee

F ROM TH E DISTRI CT COURT O F CO MAL CO UNTY, 207 TH JUDICI AL DISTRICT NO. C2009 -06 53B , H ONO RAB LE DIB WALDRIP , JUDGE P RESIDING

M E M O R A N D U M O P I N I O N

Marian Swanson and Claudia Romain (Swanson and Romain) appea l a district court order g ranting summary judgme nt in favor of Stouffer & Associates, L L P on Swanson and Romain’s claims of neg lige nt misrepre sentation and neg lige nce in the prepa ration of a rea l-estate ap p raisal repor t. We will affirm the district court’ s summary judgme nt.

F ACTUAL AND P ROCEDURAL BACK GR OUND I n 2006, Swanson and Romain beg an neg otiations to purcha se an RV park. They sent Swanson’s husband Tim, who is a licensed rea l-estate ag ent, to examine the proper ty , speak with the owner , and make a rec ommendation about whether to purcha se the park. Swanson and Romain decide d to move forwa

rd with the deal and obtained a purcha se-money lender , which hired Stouffer t o appra ise the proper

ty
. Stouffer examined the proper ty for the lender and, finding “no neg ati v easpec ts,” supplied its Summary Appra isal Report direc tly to the lender

. Swanson an d R o m ain

purcha sed the prope rty

in November

2006. Swanson and Romain beg an to opera te the RV park, hiring Tim Swanson to manag e it a nd coordina te its ex pansion. I n J uly 2007, Swanson and Romain a dded more RV renta l spa ces to the park. When the additional vehicles wer e connec ted to the septic sy stem, it malfunctioned and ultimately failed. The park was shut down until the septic sy stem and other rela ted utilit y units could be repa ired. Swanson and Romain a ssert that they discovere d, throug h a sear ch of county rec ords, that a majority of the septic sy stem had never been proper ly permitted by the previous owner s, had insufficient capa city , and had been opera ted illega lly

. Additionally , Swanson and Romain found that the proper

ty had been subdivided int o fi v e p ar t s and neede d to be reunited into one parc el in order to proper ly permit the septic sy stem. Swanson and Romain claim that the cost to corr ect these problems and the pr ofits lost whil e the pa rk wa s shut down totaled approximately $700,000. I n May 2009, Swanson and Romain sued Stouf fe r for neg lige nt misrepre sentation and neg lige nce arising from Stouffer’ s appra isal. Swanson and Romain alleg ed that Stouffer should have either discovere d the septic sy stem and land division issues and disclosed the problems in the appra isal repor

t or made c lear

that it made cer

tain “extraordinar

y assumptions” about the prope rty in the repor

t. Stouffer moved for summary judgme nt, claiming among other things that the suit was barr ed by a two-y ear statute of limit ations running from November 2006 when the rea l-esta te contra ct closed. Swanson and R omain asser ted t hat t he dis cover

y rul e ap p l ied t o defe r accrua l of the claim until J uly

2007 when the de ficient septic sy stem first malfunctioned.

2The trial court deter mined that the discovery rule did not toll the statute of limit ations and that Swanson and Romain’s claims are time barr ed. The court g rante d Stouffer’ s m o t i o n fo r summary judgme nt, from which Swanson a nd Romain now appea l.

DISCUSSIO N Stan dard of Revie w

To preva il on a motion for summary judgme nt, a m o v an t must show that there is

no g enuine issue of materia l fac t and that he is entitled to judgme nt as a matter of law. Tex. R. Civ. P. 166a(c ). The standard of revie w for summary judgme nt require s that we take as true all evidenc e favor ab l e t o t h e non-movant, indulging ever y rea sonable infere nce and resolving any doubts in the non-movant’s favor

. Nixon v. Mr. Prop. Mgmt. Co. , 690 S.W .2d 546, 548–49 (Tex. 1985)

. A movant pleading the aff

irmative defe nse of limit ations must both conclusively establish that defe nse and neg ate the discovery -rule ex ception if it is pleade d by the non-movant. Rhone-P oulenc, Inc. v. Steel , 997 S.W .2d 217, 2 2 3 (Tex. 1999). A m ovant nega tes the di scover y rule by showing that there is no g enuine issue of materia l f act c oncer

ning w hen the plaintiff discovere d, or should ha ve discovere d, the injury

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

Statu te of Limi tation s

The statute of limit ations is two y ear s for neg lige nce and neg lige nt misrepre sentation claims. See Tex. Ci v. Prac. & Rem. Code § 16.003; FDSTO, Inc. v . Blakeslee , No. 03-00-00552- CV, 2001 Tex. App. L EXI S 3728, at *7 (Tex. App.—Austin J une 7, 2001, no pet.) (not desig nated

3for publication). Stouffer arg ues that this cause of action acc rued on the date owner s hip of the

proper ty transfe rre d to Swanson and Romain i n No vember 2006. Thus, the two-y ear statute of limit ations would require that Swanson and Romain’s claim be filed by November 2008 in order to be timely

. Swanson and Romain f iled their claim in Ma

y 2009 but contend that the discovery rule tolls t he statute of limitations.

The discovery rule provides a narr ow exception to the normal limit ations bar by defe rring the acc rual of a cause of action until the time that a plaintiff knew or should have known, throug h rea sonable diligenc e, about the fac ts g iving rise to the injury

. See Computer Assocs. Int’l, Inc. v. Altai, Inc. , 918 S.W .2d 453, 455 (Tex. 1996). Her e, Swanson and Romain claim that Stouffer

was neg lige nt beca

use it failed to notify them of any abnorma lities with the land and septic sy stems. When a plaintiff’s claim is ba sed on a failure to notify , the plaintiff “knows or should have known

o f t h e fa i lure to notify when it knows or should have known the fac ts about which it was to b e notified.” HECI Exploration Co. v. Neel , 982 S.W .2d 881, 886 (Tex. 1998).

The Discove ry Rule is Negated Because the Injuri es were N ot Inh erently Undiscove rable The Texas Supreme Court has ar t i cu l ated a “unify ing principle” that g uides the application of the discovery rule: the rule applies to those claims in which “the nature of the injury incurre d is inhere ntly undiscovera ble and the evidenc e of injury is objectively verifia ble.” Computer Assocs. Int’l , 918 S.W .2d at 456; see also S.V. v. R.V. , 933 S.W .2d 1, 6 (Tex. 1996). At the outset,

we ask whether the injuries alleg ed by Swanson and Romain—the lack of septic s y stem permits

an d the subdivision of the land—wer e inhere ntly undiscovera ble. I njuries are rar ely found to b e inhere ntly u n d i s cover able, and there fore , the discovery rule has been permitted only in limit ed
4circ umstances. See FDSTO, Inc. , 20 0 1 Tex. App. L EXI S 3728, at *10 (citing W illis v. Maverick

, 760 S.W .2d 642, 6 4 5 (T ex . 1988) (apply ing rule t o attorney -client relationship); Kelley v. Rinkle , 532 S.W .2d 947, 949 (Tex. 1976) (allowing rule for claim involving false cre dit repor t and sh o rt statute of limitations); Hays v . Hall , 488 S.W .2d 412, 414 (Tex. 1972) (per mitti ng rule in botched

vasec tomy medi cal- malprac tice case ); Gaddis v. Smith , 417 S.W .2d 577, 580-81 (Tex. 1967) (adopting rule in fore ign- objects medical malprac tice case )). Swanson and Romain arg ue that their 1 injuries are among the fe w ty pes that are inhere ntly

undiscovera

ble; thus the discovery

rule ser ves to defe r the a ccr

ual of the c ase of

action. We disag ree . T h e in h e r e n tly undiscovera

ble require ment encompa sses two b a s ic c o mp o n e n ts

— th e g ener al nature of t he inj ury and the rea sonable dil ige nce exercised b y t h e i n j u re d party
. See S.V. , 933 S.W .2d at 7 (“A n injury is inhere ntly undiscovera ble if it is by nature unlikely to be discovere d within the presc ribed limit ations period despite due diligenc e.”) ; see also AT& T Corp. v. Rylander , 2 S.W .3d 546, 556 (Tex. App.—Austin 1999, pet. denied) (“I t is not enoug h that the particula r injury compl ai n ed o f i s not discovere d; rathe r, the question is whether the injury is of the ty pe that is g ener ally discovera

ble by the exercise of

due dilige nce.” ). T he emphasis on the nature of the injury require s that we evalua te the gen er al cate g ory into which the injury complained of falls, rathe r than examine t he specific injury itself. Stated differ ently , “the applicability of the discovery rule is deter mined cate g orica lly ” by examining

Both Hays and Gaddis have been superse ded by the Medica l L iability Act, which abolished 1 the discovery rule and instit uted a repose period for health car e liability claims g overne d by the Act. See Tex. Civ. Prac. & Rem. Code § 74.251; see also W alters v. Cleveland Reg’l Med. Ctr. , 307 S.W .3d 292, 298 (Tex. 2010). 5“par

ticular ty pes of case s rathe r than

. . . a particula r case .” HECI

, 982 S.W .2d at 886. There fore , we must deter

mine whether the underlying injuries here —unpermitted septic sy stems and unknown land subdivisions —are of the g ener al t y p es o f injuries that are inhere ntly undiscovera ble. We conclude that they

are not. As both Swanson and Romain and Stouffer have acknow ledg ed, septic tank permits

can be found (or, as in this case , their absenc e can be deter mined) by a sear ch of publicly available county rec ords. Simi larly , land subdivision information can be obtained throug h a sear ch of public

rec ords. This is true both as a matter of g ener al knowled ge ab o u t public documents and, in the instant case , is further proven by Marian Swanson’s own admission and the fac t that she was able to discover the documents when she undertook to sear ch the public rec ords. Although it is the g ener al nature or categ ory of an injury that is the prim ary targ et of the di scover y -rule inquiry , the s pecif

ic details in the case befor e us bolster the trial court’s conclusion that the ty pe of injury Swanson and Romain complain of was not inher ently undiscovera

ble. When the RV p ar k ’s septic sy stem failed in J uly 2007, Swanson and Romain 2

rec eived a notice from Comal County that the sy stem had overloa ded. Marian Swanson stated in her deposition that, upon rec eipt of that notice, she went to the Comal County courthouse to sear ch for the septic-tank permits. Swanson testified that her sear ch y ielded the discovery of only one permit for tanks, when there should have been sever al, and that the ot h er s we re missing beca use they had never been obtained. Swanson admitted that the permit was in the public rec ord prior to her purcha se of the land in 2006 but that she never sear ched for the documents befor e buy ing the park.
Notably , this first failure oc curr ed within the two-y ear limit ations period. 2 6Had she done so, she could have, throug h public rec ords, been aler ted to the information about the missing tank permits prior to purcha sing the proper ty
. Simi larly , rec ords showing land subdivisions

are g ener ally available for public revie w. Swanson admitted that she eventua lly discovere d that the proper ty was divided into five pa

rce ls. She a

rg ues that bec ause tha

t discovery

took severa l weeks and require d the assistance of public officia ls and private investiga tors, the injury was i n h er entl y undiscovera

ble. But she also admits that the same documents are “norma lly on file with the county .” We ag ree that the documents can normally b e fo u n d i n t he county rec ords and thus need g o no further in this portion of our analy sis—recor ds showing proper ty subdivisions are ty

pically available to the public, and thus the re levant docume nts, which are in public rec ords, wer e discove rable

.

The second component in evalua ting whether an injury is inhere ntly undiscovera ble examines the injured party ’s due diligenc e. As a g ener al cate g ory , information contained in public

rec ords can be asce rtained throug h rea sonable diligenc e and thus is not inhere ntly undiscovera ble. See She rman v. Sipper , 152 S.W .2d 319, 321 (Tex. 1941) (noting that “we ll se ttled is the r ule that wher e a person has a rig ht in proper ty , when the rec ords rela

ting to
. . . title are open to him he must exercise rea sonable diligenc e . . . [and if] he could have discovere d [a] defe ct
. . . he is held to have known it, and limit ation will run ag ainst his claim from the time he could have made such discovery by the exercise of ordinary diligenc e”)

. I ndeed, Swanson and Romain found the rec ords when they undertook to look for them. Under these fac ts, Swa nson and Romain failed to exercise rea sonable diligenc e prior to purcha sing t h e R V park in discovering the defe cts they now blame Stouffer for failing to inform them about. As potential owner s of the proper ty , Sw an s o n and Romain had an obliga tion to exercise rea s o nable diligenc e rela ted to their financ ial interests, particula rly when

7those i n t ere sts included opera ting a profitable commerc ial enter prise. Cf. W

agner & Brown, Ltd.

v. Horw o o d , 58 S.W .3d 732, 736–37 (Tex. 2001) (finding that roy alty owner s have obliga tion to protec t their financ ial interests throug h rea sonable diligenc e, even when information is not available throug h public source ). That Swanson and Romain did not discover the fac ts tha t the y now alleg e to have resulted in this particula r injury does not mean the injury was inhere ntly undiscovera ble—it simply reve als a less than diligen t sear ch. We find that Swanson and Romain’s eff orts to obtain information re lated to the injuries sustained we re not re asonably diligent. Ha v i n g deter

mined that Swanson and Romain’s injuries wer e not inhere ntly undiscovera

ble, we nee d not rea ch the second prong of the discovery -rule inquiry —whether the injuries wer e objectively verifia ble. See C o mp u ter Assocs. Int’l , 918 S.W .2d at 458 (dec lining to

rea ch question of whether evidenc e was objectively verifia ble afte r having found that trade -sec retmisappropriation cla ims were not inher ently undiscovera

ble).

The Sum m ary Judgm ent Bu rden was Met Despite an Absence of Doc um ents

Swanson and Romain further arg ue that the trial co u rt err ed in g ranting summary judgme nt beca

use Stouffer did not show that ev idence of the previous owner ’s neg lige nce (in not obtaining septic-sy stem permits) and the plat for the proper ty wo u l d h av e been discovera ble throug h the county rec ords at the time the contra ct was signe d. Stouffer bor e the bur den to ne g ate the discovery rule by showing that there is no g enuine issue of materia l fac t as to when Swanson and Romain discovere d, or should have discovere d, the alleg ed injury

. See KPMG , 988 S.W .2d at 748. As set forth above, the evidenc e shows that t h e i n j u ri es Swanson and Romain alleg e wer e not inhere ntly undiscovera ble, i.e., the g ener al cate g ory of information at issue could have been

8discovere d by Swanson and Romain at the time the proper ty was purcha sed had they exercised due d i l i gence . An evaluation of i nhere nt undiscovera bility focuse s on the gene ral nature of an inj ury , not on the specifi c i n

jury

. See S.V. , 933 S.W .2d at 7. Gene rally , the ty pes of rec ords in question here are available to the public. That they may have be en diffic ult to find in t his particular case is immaterial to our evalua tion of the application of the discovery rule and of the summary judgme nt. Stouffer ha s satisfied its burden.

CONCLUSION

The evidenc e prese nted neg ates the discovery rule exception pleade d by Swanson and Romain. Be cause we find th at t h e suit is barr ed by the statute of limit ations, we need not addre ss the additional issues raised by Swanson. We aff irm the trial court’s order g ranting Stouffer’ s motion for summary

judgme nt.

__________________________________________

J eff Rose, J ustice Be fore Chief J ustice Jones, J ustices Rose and Goodw in Affir med Filed: May

30, 2014

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