Court Opinion

ID: 4101874
Source: CourtListenerOpinion
Date Created: 2016-11-23 16:22:43.304546+00
Date Added: 2024-06-11T14:36:31.702135
License: Public Domain

ACCEPTED
                                                                              03-16-00621-CV
                                                                                    13888460
                                                                   THIRD COURT OF APPEALS
                                                                              AUSTIN, TEXAS
                                                                        11/18/2016 6:44:16 PM
                                                                            JEFFREY D. KYLE
                                                                                       CLERK
                         NO. 03-16-00621-CV

                IN THE THIRD COURT OF APPEALS            FILED IN
                                                  3rd COURT OF APPEALS
                        AT AUSTIN, TEXAS               AUSTIN, TEXAS
_________________________________________________________________
                                                  11/18/2016 6:44:16 PM
                                                         JEFFREY D. KYLE
                       TOLL AUSTIN TX, LLC                    Clerk
                             Appellant

                                 v.

             BRENT DUSING AND ELIZABETH DUSING
                          Appellees

__________________________________________________________________

             On Appeal from the 353rd Judicial District Court
                          Travis County, Texas
                     Cause No. D-1-GN-16-002196
__________________________________________________________________

 APPELLANT’S RESPONSE TO APPELLEES’ BRIEF ON THE MERITS
__________________________________________________________________

                              Thomas R. Stauch;
                              tstauch@ns-law.net
                              State Bar No. 00794687

                              Mark C. Roberts II
                              mroberts@ns-law.net
                              State Bar No. 00788293

                              NOWAK & STAUCH, LLP
                              10000 North Central Expressway, Suite 1040
                              Dallas, Texas 75231
                              Telephone: (214) 823-2006
                              Facsimile:    (214) 823-2007

                              Attorneys for Appellant
                              NO. 03-16-00621-CV

                 IN THE THIRD COURT OF APPEALS
                         AT AUSTIN, TEXAS
 _________________________________________________________________

                            TOLL AUSTIN TX, LLC
                                  Appellant

                                        v.

                 BRENT DUSING AND ELIZABETH DUSING
                              Appellees

__________________________________________________________________

             On Appeal from the 353rd Judicial District Court
                          Travis County, Texas
                     Cause No. D-1-GN-16-002196
__________________________________________________________________

   APPELLANT’S REPLY TO APPELLEES’ BRIEF ON THE MERITS

__________________________________________________________________

TO THE HONORABLE THIRD COURT OF APPEALS:

      COMES NOW, Toll Austin TX, LLC (“Toll”) in the above-styled

numbered cause, and files its Reply to Appellees’ Brief on the Merits, and in

support thereof shows the Court the following:

                                        ii
                                         TABLE OF CONTENTS

INDEX OF AUTHORITIES ............................................................................ iv

REPLY TO APPELLEES’ ISSUE NO. 1 ....................................................... 1

REPLY TO APPELLEES’ ISSUE NO. 2 ....................................................... 3

REPLY TO APPELLEES’ ISSUE NO. 3 ....................................................... 7

PRAYER ............................................................................................................ 14

CERTIFICATE OF SERVICE ....................................................................... 15

CERTIFICATE OF COMPLIANCE ............................................................. 16

APPENDIX ........................................................................................................ 17

                                                           iii
                                         INDEX OF AUTHORITIES

Cases
Bonded Builders Home Warranty Association of Texas v. Rockoff, 2016 WL 3383461
  (Tex.App.—El Paso 2016, no pet.)..........................................................................6
Capitan Enters., Inc. v. Jackson, 903 S.W.2d 772 (Tex.App.—El Paso, writ denied) 6
Carlin v. 3V Inc., 928 S.W.2d 291 (Tex.App.—Houston [14th Dist.] 1996 no pet.)
   ....................................................................................................................... 10, 11
Chapman Custom Homes, Inc. v. Dallas Plumbing Co., 445 S.W.3d 716 (Tex.
  2014) .....................................................................................................................11
Creative Artists Agency, LLC v. Las Palmas Race Part, LLC, 2015 WL 6652655
  (Tex.App.—Corpus Christi 2015) ..........................................................................7
Greenberg Traurig, LLP v. National American Ins. Co., 448 SW.3d 115 (Houston
  [14th Dist.] 2014, no pet.)............................................................................... 10, 11
In re Koch Indus., 49 S.W3d 439 (Tex.App.—San Antonio 2001, org. proceeding) ..6
In re Weekley Homes, L.P., 180 S.W.3d 127 (Tex. 2005) .........................................7
Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617 (Tex. 1986) ...............................12
LAN/STV v. Martin K. Eby Constr. Co., 435 S.W.3d 234 (Tex. 2014) ...................12
Merrill Lynch v. Eddings, 838 S.W.2d 874 (Tex.App.—Waco 1992, no writ)
  (emphasis added) ........................................................................................... 10, 11
Mohamed v. Auto Nation USA Corp., 89 S.W.3d 830 (Tex.App.—Houston [1st Dist.]
  2002, no pet.)...........................................................................................................6
NextEra Retail of Tex., LP v. Investors Warranty of Am., Inc., 418 S.W.3d 222
  (Tex.App.—Houston [1st Dist] 2013, pet. denied) .................................................8
Proctor v. Foxmeyer Drug Co., 884 S.W.2d 853 (Tex.App.—Dallas 1994, no writ)
   ....................................................................................................................... 3, 4, 5
Stonewall Ins. Co. v. Modern Exploration, Inc., 757 S.W.2d 432 (Tex.App.—
  Dallas 1988, no writ) ..............................................................................................6
Thompson v. North Tex. Nat’l Bank, 37 S.W.2d 735 (Tex. Comm’n.App. 1931,
  holding approved) ...................................................................................................4
Walker Sand, Inc. v. Baytown Asphalt Materials, Ltd., 95 S.W.3d 511 (Tex.App.—
  Houston [1st Dist.] 2002, no pet.) ...........................................................................1
Rules
TEX. CIV. PRAC. & REM. CODE §171.021(a) ................................................................1
Tex. Civ. Prac. & Rem. Code §171.025 ..................................................................13

                                                               iv
                    REPLY TO APPELLEES’ ISSUE NO. 1

      Issue No. 1 of Appellees’ Brief contends that this Court should dismiss the

instant appeal for lack of subject matter jurisdiction because the Trial Court’s

Order is an unappealable interlocutory order. [Appellees’ Brief at 16]. According

to the Dusings, Toll’s Plea in Abatement did not constitute a motion to compel

arbitration because it only requested that the case be stayed in favor of arbitration

instead of also requesting that arbitration be compelled. The Dusings contend that,

without a request for an order compelling arbitration, there is no subject matter

jurisdiction under Walker Sand, Inc. v. Baytown Asphalt Materials, Ltd., 95
S.W.3d 511 (Tex.App.—Houston [1st Dist.] 2002, no pet.). The Dusings are

incorrect because Toll’s Plea in Abatement was timely filed and specifically

requested that arbitration be ordered.

Toll’s Plea in Abatement stated:

      Pursuant to Section 171.021 of the TEXAS CIVIL PRACTICE & REMEDIES
      CODE, upon the showing of an agreement to arbitrate between these
      parties, the Court is required to order the parties to arbitrate. TEX. CIV.
      PRAC. & REM. CODE §171.021(a). All of Plaintiffs’ claims against Toll
      Dallas (or Toll Austin) arise solely from either the Agreement of Sale or
      the Warranty. The Agreement of Sale and the Warranty contain valid
      and enforceable arbitration clauses.          Accordingly, pursuant to
      §171.021(a) of the TEXAS CIVIL PRACTICE & REMEDIES CODE, Toll
      Austin respectfully requests that the Court abate these proceedings in
      favor of arbitration in accordance with the express terms of the
      Agreement of Sale and the Warranty.

[CR 12](emphasis added).

                                          1
      In addition to this request, Toll filed a Brief in Support of Plea in

Abatement, which stated:

      Toll has filed a verified Plea in Abatement and has moved the Court to
      compel arbitration based upon the arbitration clause contained in the
      both the Agreement of Sale and Home Builder’s Limited Warranty….

[CR 79](emphasis added).

      In response, the Dusings filed a Response to the Plea in the Abatement, in

which they twice argued against enforcement of the arbitration provision. The

Dusings’ Response stated: “The Defendants could not enforce the agreement or

compel arbitration” and “…Plaintiffs contend that the Defendant’s (sic) arbitration

provision (Article 11) does not constitute a valid agreement with Plaintiffs, and as

such, should not be enforced.” [CR 69].

      Toll properly pleaded that it was seeking to compel arbitration in its Plea in

Abatement; Toll’s Brief in Support of it Plea in Abatement expressly stated that

Toll was seeking to compel arbitration; and the Dusings’ Response argued against

Toll’s effort to compel arbitration. Clearly, the Dusings understood Toll’s Plea in

Abatement sought to compel arbitration because their Response argued against it.

[CR 69].    Thus, Appellees’ argument that there was no motion to compel

arbitration is rather disingenuous, and wholly without merit.

                                          2
                       REPLY TO APPELLEES’ ISSUE NO. 2

       The Dusings are the successors in interest. Issue No. 2(A) of the Dusings’

Brief asserts that Toll is improperly applying the “boilerplate” contract term of

“successor.” [Appellees’ Brief at 18]. Relying on Proctor v. Foxmeyer Drug Co.,

884 S.W.2d 853 (Tex.App.—Dallas 1994, no writ), the Dusings make a seemingly

contradictory argument with respect to the term “successor.” On one hand, they

argue that the term “successor” ordinarily applies to corporate entities. [Appellees’

Brief at 18]. Later, they quote Proctor as support for their argument that “that the

definition of successor when applied to individuals is ‘intended to designate those

to whom property descended through [a] deceased natural-person party to [an]

agreement and extended perpetually to… descendants.’” 1 [Appellees’ Brief at 19].

There are several reasons why the Dusings’ analysis is flawed.

       First, the provision cited by the Dusings actually states that the agreement

“shall be binding upon the respective heirs and successors of the parties.”

[CR22](emphasis added). If one substitutes the Dusings’ interpretation of the term

“successor,” this phrase would read that the agreement “shall be binding upon the

       1
         Toll recognizes this quotation from Proctor, as edited by the Dusings, is awkwardly
worded. Nevertheless, Toll is providing the edited quotation as it is worded in Appellees’ Brief.
Moreover, the jump page provided in Appellees’ Brief is incorrect. The full, unedited quotation
from Proctor is actually: “We further conclude that the term ‘successor’ was intended to
designate those to whom property descended through a deceased natural-person party to this
agreement. The option in Paragraph 6.9, therefore, extends perpetually to appellant’s
descendants and is unlimited in duration.” Proctor, 884 S.W.2d at 861.

                                               3
respective heirs and ones whom property descended through.” The term “heir” is

the functional equivalent of the term “one whom property descended through.”

Thus, they are interchangeable and when one makes this equivalent substitution,

the phrase would functionally become: “the agreement shall be binding upon the

respective heirs and heirs of the parties.” Because such an interpretation would be

illogical, the term “successor” simply cannot mean what the Dusings assert it

means.

      Second, the only case that the Dusings rely on actually supports Toll’s

position. In Proctor, the Dallas Court of Appeals held, “[t]he exact meaning of the

word ‘successor’ when used in a contract depends largely on the kind and character

of the contract, its purposes and circumstances, and the context.” Proctor, 884
S.W.2d at 861 citing Thompson v. North Tex. Nat’l Bank, 37 S.W.2d 735, 739

(Tex. Comm’n. App. 1931, holding approved). Under the character, purpose,

circumstances, and context of the Agreement of Sale between Toll and Pool, the

term “successor” clearly applies to the Dusings. The Agreement of Sale references

“heirs,” “successors,” “buyer,” and “permanent residents of the Premises” at

various points. [CR 21, 22]. Thus, the context, character, and purpose of the

Agreement of Sale make clear that it was intended to provide for the resolution of

all disputes between Toll and its customer, or anyone who might later acquire an

ownership interest in the home. [CR 21, 22 at Articles 11 and 15(d)]. It is

                                        4
undisputed that the Dusings purchased the home from Pool, who purchased the

home from Toll. [CR 4, 11 – 12]. Clearly, the Dusings are the “successor”

homeowner, and the successors in interest to the property in question. This is the

definition of vertical privity, and the Dusings cannot escape this vertical privity by

seeking to deny the provisions of the Agreement of Sale for their convenience.

       Third, to the extent the Dusings contend that Proctor stands for the

proposition that the term “successor” only applies to corporations, the Dusings are

misinterpreting Proctor. A careful reading of Proctor reveals that, in the context

of the contract at issue in that case, “the term ‘successor’ was also intended to

apply to the natural-person parties of the agreement.” Proctor, 884 S.W.2d at 861

(emphasis in original). Thus, the very case the Dusings’ rely upon does not stand

for the proposition that “successors” can only refer to corporate entities.

       The Dusings, as successors in interest, acquired no more rights than Mr.

Pool enjoyed as their predecessor in interest. In Issue No. 2(B), the Dusings

attempt to distinguish Toll’s cases on the basis that they involve either corporate

entities or involve assignments.      [Appellees’ Brief at 21].      This attempt at

distinguishment is misplaced for two reasons. First, as discussed immediately

above, the term “successor” has never been, and is not here, limited to corporate

entities. Id.

                                          5
      Second, the cases cited by Toll stand for the proposition that one who steps

into the shoes of a predecessor, takes only those rights which the predecessor had.

To demonstrate the broad expanse of this well-recognized legal principal, Toll

cited cases where it has been applied in a wide range of contexts, including

“[a]ssignees, third party beneficiaries, and successors,” see Bonded Builders Home

Warranty Association of Texas v. Rockoff, 2016 WL 3383461 *7 (Tex.App.—El

Paso 2016, no pet.)(citations omitted)(emphasis added)), and also in the context of a

“successor-in-interest.” (Mohamed v. Auto Nation USA Corp., 89 S.W.3d 830, 836

(Tex.App.—Houston [1st Dist.] 2002, no pet.) citing Capitan Enters., Inc. v. Jackson,

903 S.W.2d 772, 775 (Tex.App.—El Paso, writ denied)).                Toll has further

demonstrated that a party assuming contractual liability is liable to same extent as the

party from which it assumed the contract, (In re Koch Indus., 49 S.W3d 439, 447

(Tex.App.—San Antonio 2001, org. proceeding)), and that Texas law holds, “the

beneficiary for whose advantage a contract is made cannot acquire a better

standing to enforce the contract than that occupied by the contracting party itself.”

Stonewall Ins. Co. v. Modern Exploration, Inc., 757 S.W.2d 432, 435 (Tex.App.—

Dallas 1988, no writ).

      The unmistakable point that the foregoing cases collectively make is that

when one steps into the shoes of another, one acquires the rights owned by one’s

predecessor, and only those rights. Despite the Dusings’ attempt to artfully plead

                                           6
around the binding arbitration clause, the fact remains that all of their causes of

action are based on Toll’s alleged defective design and construction and

performance of the home. Toll’s liability for such design or construction arises

only from the Agreement of Sale and the Warranty (which expressly disclaims any

implied warranties). [CR 20 at Article 10]. Since both the Agreement of Sale and

Warranty require arbitration of claims related to the design, construction or

performance of the home, it is clear that Pool could not have avoided arbitration if

he had brought these same claims against Toll. As a matter of law, therefore, the

Dusings’ purchase of the home from Pool cannot, and did not, confer on the

Dusings any different (or greater) rights than Pool would have had concerning the

assertion of these same claims against Toll. Like Pool, therefore, the Dusings are

bound by the arbitration provisions as a matter of law.

                     REPLY TO APPELLEES’ ISSUE NO. 3

        In Issue No. 3 of Appellees’ Brief, the Dusings contend they did not assume

the Agreement of Sale and are not claiming a direct benefit of the Agreement of

Sale.    [Appellees’ Brief at 23].    The Dusings therefore assert that, as non-

signatories to the Agreement of Sale, they are not bound to arbitration provision of

the Agreement of Sale. The Dusings then attempt to distinguish the cases Toll

relied upon to refute this notion. As set forth below, the Dusings’ analysis misses

the mark.

                                         7
       The Dusings are Bound under the Assumption Exception that Binds

Non-Signatories to the Arbitration Agreements.                   Toll cited In re Weekley

Homes, L.P., 180 S.W.3d 127, 130 (Tex.2005) and Creative Artists Agency, LLC v.

Las Palmas Race Part, LLC, 2015 WL 6652655 *3-4 (Tex.App.—Corpus Christi

2015) for the proposition that the Dusings are bound by the terms of the arbitration

provisions set forth in the Agreement of Sale and Warranty under the “assumption”

exception that binds non-signatories to arbitration agreements.                 The Dusings

attempt to distinguish both of these on the basis that they involve corporate entities

and a written assignment.

       As discussed above, the discussion of corporate entities versus individuals in

the context of being “successors” under the Agreement of Sale is a distinction

without difference. As for the issue of a written assignment, the Dusings did

receive a written assignment when they purchased the home from Pool. As set

forth in the Warranty Deed from Pool to the Dusings dated February 2, 2015, Pool

as grantor assigned his right, title and interest in the property to the Dusings as

follows:

       Grantor for the Consideration… grants, sells, and conveys to Grantee
       the Property, together will all and singular rights and appurtenances
       thereto in any way belonging, to have and to hold it to Grantee and
       Grantee’s heirs, successors, and assigns forever.2

       2
           See Warranty Deed with Vendor’s Lien in attached Appendix hereto. (Emphasis
added). While this Warranty Deed was not part of the Trial Court’s Record, its absence is due to
the fact that the Dusings failed to produce any evidence at the Trial Court, and Toll could not

                                               8
Thus, when the Dusings took the home along with all “rights and appurtenances

thereto” for themselves and for their “heirs, successors, and assigns,” they were

taking an assignment of the bundle of rights that Pool had to give, including those

arising under the Agreement of Sale and Warranty. This transfer created the

vertical privity between Toll and the Dusings that made the Dusings the

“successors” to Pool, who are therefore bound to the arbitration provisions in the

Agreement of Sale and the Warranty.

       Even without this assignment in the Warranty Deed, the Dusings still

impliedly assumed the Agreement of Sale and the Warranty. The Dusings’ lawsuit

against Toll claims a breach of duties by Toll that only arise from the Agreement

of Sale or the Warranty as a matter of law. “An implied assumption of contractual

obligations may arise ‘when the benefit received by the assignee is so entwined

with the burden imposed by the assignor’s contract that the assignee is estopped

from denying assumption and the assignee would otherwise be unjustly

enriched.’” Creative Artists Agency, LLC v. Las Palmas Race Part, LLC, 2015
WL 6652655 *3-4 (Tex.App.—Corpus Christi 2015) quoting NextEra Retail of

Tex., LP v. Investors Warranty of Am., Inc., 418 S.W.3d 222, 227-228 (Tex.App.—

have reasonably foreseen the Dusings would deny their standing in the chain of title as an
assignee of Pool’s rights. As such, the Dusings should be barred from raising this issue herein.
Moreover, this Court may also take judicial notice of the Warranty Deed which is filed as
Document Number 2015017005 in the Deed Records of Travis County, Texas.

                                               9
Houston [1st Dist] 2013, pet. denied). Simply put, without the Agreement of Sale,

there would have been no construction of the home and the Warranty expressly

states that Toll’s duty to Pool (and his successors) after closing are governed by

solely by the Warranty. [CR 20 at Article 10]. Any suit for defects in the home

must, therefore, be subject to all of the provisions of the Agreement of Sale and

Warranty, including the arbitration provision.

      Equitable Estoppel and Direct Benefits. The Dusings continue to resist

the authority cited by Toll on the equitable estoppel/direct benefits exception to the

non-signatory exemption on the basis that Toll’s cases involve corporate entities or

an express assignment. [Appellees’ Brief at 27]. Because those issues are briefed

above, Toll will not brief the issues again here. However, the Dusings also attempt

to avoid application of the equitable estoppel/direct benefits exception by claiming

that their causes of action sound in tort rather than in contract. As such, the

Dusings assert they are not claiming benefits under the Agreement of Sale or the

Warranty at all. [Appellees’ Brief at 27] This argument was flatly rejected in

Weekley Homes which states: “[W]hether a claim seeks a direct benefit from a

contract containing an arbitration clause turns on the substance of the claim, not

artful pleading.” Weekley Homes, 180 S.W.3d at 131–32 (emphasis added).

      Although the Dusings have carefully attempted to avoid suing Toll for breach

of contract or breach of warranty, all of their claims arise from Toll’s alleged failure

                                          10
to “properly design and construct the foundation, French drainage system, and

waterproofing” of the home. [CR 5-6]. Any duty to properly design or construct the

home arose only from the Agreement of Sale, and any duty to remedy such defects

arises only from the Warranty. Thus, despite their artful pleadings, any cause of

action asserted by the Dusings against Toll related to the construction of the home are

expressly covered by the arbitration provision set forth in the Agreement of Sale. In

fact, the arbitration clause in the Agreement of Sale even contemplates the inclusion

of tort claims in the requirement to arbitrate:

      Buyer, on behalf of Buyer and all permanent residents of the Premises,
      including minor children, hereby agree that any and all disputes with
      Seller, Seller’s parent company or their subsidiaries or affiliates arising
      out of the Premises, this Agreement, the Home Warranty, any other
      agreements, communications or dealings involving Buyer, or the
      construction or condition of the Premises including, but not limited to,
      disputes concerning breach of contract, express or implied warranties,
      fraud, misrepresentation, personal injuries and/or illness, mold-related
      claims, representations and/or omission by Seller, on-site and off-site
      conditions and all other torts and statutory causes of action, including
      but not limited to those arising or administered under the Deceptive
      Trade Practices Act (DTPA), Residential Construction Liability Act
      (RCLA) or Texas Residential Construction Commissions Act
      (TRRCA)(the “Claims”) shall be resolved by binding arbitration…

[CR 21]. Based on this language, and despite the Dusings’ attempt to artfully plead

their claims to avoid arbitration, it is clear that the Dusings’ claims against Toll must

be arbitrated.

      Indeed, in Carlin v. 3V, the Fourteenth Court of Appeals compelled

arbitration because 3V “based its entire case on the rights it acquired from the

                                            11
[Carlin and SIGMA] agreement and would have no case if it did not exist.” Carlin

v. 3V Inc., 928 S.W.2d 291, 295 (Tex.App.—Houston [14th Dist.] 1996 no pet.).

Similarly, in Merrill Lynch v. Eddings, the Tenth Court of Appeals compelled

arbitration because     the “underlying basis for all of the claims” and the

beneficiaries “would have no claims had the account agreement never been signed

by the trustee.” Merrill Lynch v. Eddings, 838 S.W.2d 874, 879 (Tex.App.—Waco

1992, no writ) (emphasis added). Here, the Dusings’ claims are likewise derivative

of the original contractual relationship between Toll and Pool. In Greenberg

Traurig, LLP, v. National American Ins. Co., the Fourteenth Court of Appeals

compelled arbitration because:

      Okie’s claims are based on the retainer agreement…. Each claim that
      Okie asserts—negligence, malpractice, and breach of fiduciary duty—
      is based on Greenberg’s legal representation of Okie, which arises out
      of the agreement…. Because Okie insists that Greenberg violated
      various duties owed to Okie as a client, it cannot avoid the arbitration
      provision in the agreement providing for Okie’s legal representation.

Greenberg Traurig, LLP v. National American Ins. Co., 448 SW.3d 115, 121

(Houston [14th Dist.] 2014, no pet.). In the present case, it is clear that but for the

Agreement of Sale between Toll and Pool, the home in question would never have

been constructed and warranted by Toll. Accordingly, despite their counsel’s

clever attempts to avoid asserting contractual claims, all of the Dusings’ alleged

claims arise from, and are inextricably tied to (and bound by) the Agreement of

Sale and the Warranty. As was the result in Carlin v. 3V,

                                          12
Eddings, and Greenberg Traurig, LLP, v. National American Ins. Co., arbitration

of the Dusings’ claims against Toll should be compelled.

       The Economic Loss Rule precludes the Dusings’ tort claims.               The

Dusings’ contention the economic loss rule’s bar of tort claims would not apply in

this case is misplaced.      The contention relies solely upon Chapman Custom

Homes, Inc. v. Dallas Plumbing Co., 445 S.W.3d 716 (Tex. 2014), the facts of

which are distinguishable and thus rendering the opinion irrelevant and unable to

alter the proper result in this case.

       Dallas Plumbing involved a plumbing subcontractor who contracted with

the general contractor to install plumbing in the construction of a new home. Id. at

717. Thus, the relevant contract in that case was a subcontract for installation of

the plumbing within the home rather than the builder’s contract with the buyer for

the construction of the entire home. When flooding occurred due to a plumbing

defect, the damage exceeded the scope of the applicable plumbing subcontract

because damage was done to the structure of the home. Id. Thus, the Texas

Supreme Court held that the economic loss rule did not apply because “a party

states a tort claim when the duty allegedly breached is independent of the

contractual undertaking and the harm suffered is not merely the economic loss of a

contractual benefit.” Dallas Plumbing, 445 S.W.3d at 718. The Court noted that

the “damages allegedly caused by the breach of [the] duty extend beyond the

                                        13
economic loss of any anticipated benefit under the plumbing contract.” Id.

(emphasis added).

      In the Dusings’ case, the subject of the Agreement of Sale was the

construction, sale and warranty of the entire home. Thus, every complaint and all

damages claimed by the Dusings in this case are associated with the economic loss

of the original contractual expectancy under the Agreement of Sale.         Under

LAN/STV v. Martin K. Eby Constr. Co., 435 S.W.3d 234 (Tex.2014) and Jim

Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 618 (Tex. 1986), the economic loss

rule would indeed bar any tort claims by the Dusings. Any potential recovery of

damages by the Dusings, even if currently couched as a tort claim, is therefore

governed by the contractual limitations in the Agreement of Sale. The equitable

estoppel and direct benefits exception applies and requires arbitration of the

Dusings’ claims because all of the Dusings’ claims against Toll, to the extent they

are viable, must rise or fall under the duties created in the Agreement of Sale and

the Warranty.

                                    PRAYER

      FOR THESE REASONS, Toll requests this Court find that the Trial Court

erred in denying Toll’s Plea in Abatement. Toll further requests this Court reverse

the Trial Court’s denial of the Plea in Abatement; render an Order granting the

Plea in Abatement and ordering the Dusings’ to arbitrate their claims with Toll;

                                        14
and stay the underlying proceedings in the Trial Court under Tex. Civ. Prac. &

Rem. Code §171.025 until an award is rendered in arbitration as appropriate. Toll

seeks such other and further relief, including is reasonable and necessary attorney

fees and costs of appeal, to which it may be justly entitled.

                                        Respectfully submitted,

                                        NOWAK & STAUCH, LLP

                                        /s/ Thomas R. Stauch
                                        Thomas R. Stauch
                                        tstauch@ns-law.net
                                        State Bar No. 00794687
                                        Mark C. Roberts II
                                        mroberts@ns-law.net
                                        State Bar No. 00788293

                                        10000 North Central Expressway, Suite
                                        1040
                                        Dallas, Texas 75231
                                        Telephone: (214) 823-2006
                                        Facsimile: (214) 823-2007

                                        ATTORNEYS FOR APPELLANT

                          CERTIFICATE OF SERVICE

      I hereby certify that a true and correct copy of the foregoing document was

served in accordance with TEXAS RULES OF CIVIL PROCEDURE 21 and 21a

on all parties to this case on this the 18th day of November, 2016.

                                          /s/ Mark C. Roberts II      . .
                                        Mark C. Roberts II

                                          15
                     CERTIFICATE OF COMPLIANCE

      I certify that Appellant’s Response to Appellees’ Brief on the Merits is in

compliance with to Texas Rule of Appellate Procedure 9.4(i) as it contains 3,376

words in the document.

                                       /s/ Mark C. Roberts II     . .
                                     Mark C. Roberts II

                                       16
                              NO. 03-16-00621-CV

                 IN THE THIRD COURT OF APPEALS
                         AT AUSTIN, TEXAS
 _________________________________________________________________

                            TOLL AUSTIN TX, LLC
                                  Appellant

                                        v.

                 BRENT DUSING AND ELIZABETH DUSING
                              Appellees

__________________________________________________________________

             On Appeal from the 353rd Judicial District Court
                          Travis County, Texas
                     Cause No. D-1-GN-16-002196
__________________________________________________________________

                     APPELLANT’S APPENDIX
__________________________________________________________________

       Pursuant to Texas Rule of Appellate Procedure 38.1(k), the item listed below
is contained in the Appendix:

                       Warranty Deed with Vendor’s Lien

                                        17
ELECTRONICALLY RECORDED                            2015017005
                                  TRV          3        PGS

     NOTICE OF CONFIDENTIALITY RIGHTS:   IF YOU ARE A NATURAL PERSON,
     YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION
     FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY
     BEFORE IT IS FILED ·FOR RECORD IN THE PUBLIC RECORDS:       YOUR
     SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
     02>-0\.Ql\l-3L\1Q.ct..'\2>o~-                   ~
                                   Warranty Deed with Vendor's Lien

    Date:            February,?... , 2015

     Grantor:        Brodney Pool and Kady Pool
     Grantor's Mailing Address:

    Grantee:         Brent William Dusing and Edith Dusing

    Grantee's Mailing Address:    ~ffN~~ \!_,
    Consideration:          A Promissory Note in the original principal sum of Seven Hundred
                            Twelve Thousand Five Hundred and No/100 Dollars ($712,500.00)
                            payable to the order of Pioneer Bank, SSB ("Lender"), which Promissory
                            Note is secured by a Deed of Trust of even date to Ruth W. Gamer,
                            Trustee.
    The debt evidenced by said Note is in part payment of the purchase price of the Property. The
    debt is secured by a deed of trust and by a vendor's lien on the Property, which is expressly
    retained. The lien created by the deed of trust and the vendor's lien is transferred to Lender by
    this deed. The deed of trust does not waive the vendor's lien, and the two liens and the rights
    created by said deed of trust are cumulative. Lender may elect to foreclose under either of the
    liens without waiving the other or may foreclose under both.
    Property (including any improvements):
              Lot 4, Block D, of AMENDED PLAT OF LOTS I-13, BLOCK D, LOTS 1-13, BLOCK
            · F, LOTS 1 & 2, BLOCK G, OF WERKENTHIN SECTION TIIREE, AND LOT 14,
              BLOCK F, OF WERKENTHIN SECTION FIVE, a subdivision in Travis County, Texas,
              according to the map or plat of record in Document Number 200000126, of the Official
              Public Records of Travis County, Texas.

    Reservations from Conveyance:           None

     GF#OI247-34729-JW
Exceptions to Conveyance and Warranty:

        Liens, if any, described as part of the Consideration and any other liens described in this
deed as being either assumed or subject to which title is taken; validly existing easements, rights-
of-way, and prescriptive rights, whether of record or not; all presently recorded and validly
existing instruments, other than conveyances of the surface fee estate, that affect the Property;
and taxes for the current year, which Grantee assumes and agrees to pay.

       Grantor, for the Consideration and subject to the Reservations from Conveyance and the
Exceptions to Conveyance and Warranty, grants. sells, and conveys to Grantee the Property,
together with all and singular the rights and appurtenances thereto in any way belonging, to have
and to hold it to Grantee and Grantee's heirs, successors, and assigns forever. Grantor binds
Grantor and Grantor's heirs and successors to warrant and forever defend all and singular the
Property to Grantee and Grantee's heirs, successors, and assigns against every person
whomsoever lawfully claiming or to claim the same or any part thereof, except as to the
Reservations from Conveyance and the Exceptions to Conveyance and Warranty.

       Lender, at Grantee's request, has paid in cash to Grantor that portion of the purchase
price of the Property that is evidenced by the note. The first and superior vendor's lien against
and superior title to the Property are retained for the benefit of Lender and are transferred to
Lender without recourse against Grantor.

       The vendor's lien against and superior title to the Property are retained until each note
described is·fully paid according to its terms, at which time this deed will become absolute.

       When the context requires, singular nouns and pronouns include the plural.

B'rodn~l
               1

GF#O 1247-34729-JW
STATE OF TEXAS                         )

COUNTY OF\~~\'5                        )

       This instrument was acknowlooged before me February~ 2015, by Brodney Pool and
Kady Pool.

                                             No ~WteofTexas

                                                                   FILED AND RECORDED
                                                                 OFFICIAL PUBLIC RECORDS
GF#Ol247-34729-I\V
                                                                       ll,;r-c~w...,«ib.r"L
                                                              DANA DEBEAUVOIR, COUNTY CLERK
                                                                  TRAVIS COUNTY, TEXAS
                                                                 · February 04 2015 04:32 PM
                                                                         FEE:$    34.00   2015017005