Opinion ID: 2363755
Heading Depth: 1
Heading Rank: 2

Heading: fort worth property

Text: Construction: In the fall of 1972 Blaylock and Dollar Inns began negotiations for construction of two motels. Thereafter, on December 29, 1972, Dollar Inns and Blaylock entered into a preliminary agreement whereby Blaylock agreed to construct motels on both the Fort Worth and Irving sites pursuant to a general construction contract to be executed at a later date. At this time, Dollar Inns further directed Blaylock to proceed with construction on the land as much as possible until the building permit could be obtained. Pursuant to such an agreement, subcontractors of Blaylock began subsurface investigation of the site on January 24, 1973. Such work involved the drilling of core borings and analysis of the content of the soil. Thereafter, between January 25, 1973 and March 1, 1973, another subcontractor of Blaylock performed job site engineering and topographical survey work upon the site, which entailed the placing of various stakes and iron rods to locate drives, grades, and building sites upon the land. By March 1, 1973 approximately one hundred fifty stakes and eight iron rods were placed on the land and stood visibly one to three feet above the ground. During this period, on February 21, 1973, Blaylock and Dollar Inns finalized their agreement in a written construction contract. On March 5, 1973 lumber for batter boards was delivered, and delivery of fill dirt was begun. Erection of the batter boards was begun on the same day as delivery and such work was completed by March 9, 1973. Batter boards are L-shaped structures which stand two feet off the ground and extend five feet in each direction. Such boards define the corners of the building and are preparatory to building the foundation. At the same time the batter boards were being erected, and continuing for approximately forty-five days, Blaylock began spread operations with the fill dirt being delivered. Such operations entailed the moving of dirt upon the land to prepare the ground for the foundation and the grading of the lot and involved six trucks and front-end loaders working on the property. Excavation for a retaining wall was also begun. As of March 9, 1973 all batter boards were erected, and a sign was placed at the job site indicating that construction of a Dollar Inns motel was in progress. Thereafter, on March 16, 1973, a building permit was obtained for the Fort Worth project. After the permit was received, foundation work was begun by a subcontractor of Blaylock. Such foundation work required the subcontractor to excavate for perimeter beans around the foundation and to lay the concrete foundation upon the dirt pad formed during the spread operations. After the completion of construction, on January 19, 1974, Blaylock filed its mechanic's lien pursuant to Article 5453, Texas Revised Civil Statutes Annotated, to secure the unpaid portion of the construction contract relative to the Fort Worth project, amounting to $68,009.29. Financing: In November 1972 Dollar Inns began negotiations with DMI concerning permanent financing for the construction of two motels. Similar negotiations were conducted with Palomar Mortgage Investors in January 1973. On December 11, 1972 Dollar Inns, acting through K. R. Riley, contracted to purchase property in Fort Worth from J. M. Loffland, Jr., trustee. [1] Under such contract of sale, Dollar Inns placed $5,000 earnest money in escrow. Later, Dollar Inns placed an additional $5,000 in escrow in order to extend the closing date beyond the January 15, 1975 closing date specified in the contract of sale. The $10,000 earnest money was later applied toward the total cost of closing. On February 16, 1973 Dollar Inns and Palomar executed a loan agreement by which Palomar agreed to provide interim financing for the purchase of the Fort Worth property and construction of a motel thereon. Palomar, in exchange for its funds, received Dollar Inns' promissory note in the amount of $1,200,000 and secured the same through a deed of trust covering the Fort Worth property and improvements erected thereon. Such loan agreement incorporated by reference a commitment of DMI dated November 10, 1972 and a commitment of Palomar dated January 15, 1973. In such commitments and a tri-party agreement executed by Dollar Inns, DMI, and Palomar, it was agreed that Palomar would provide interim financing for the purchase of land and construction of the motel and that DMI would provide permanent financing after construction was completed. Thereafter, on March 8, 1973, Dollar Inns consummated the purchase of the Fort Worth property at a purchase price of $135,000. At that time the property was free and clear of any liens. Palomar, through the title company, paid Dollar Inns $598,352.45, $135,000 of which was used to purchase the Fort Worth property. [2] On March 9, 1973 the deed of trust was filed and recorded. On February 5, 1974, after construction was completed on the Fort Worth motel, Palomar assigned its security interest in the Fort Worth motel and property, as well as to the Irving motel and property, to DMI for a total consideration of $2,757,150. After the assignment, Dollar Inns defaulted on its deed of trust. DMI foreclosed its deed of trust lien on the property with the motel located thereon and purchased the same at the foreclosure sale on December 3, 1974 for a price of $600,000.