Court Opinion

ID: 2959073
Source: CourtListenerOpinion
Date Created: 2015-09-17 03:48:08.212291+00
Date Added: 2024-06-11T09:32:55.682794
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                      NO. 03-13-00060-CV

                     Homer Alvarado and Valania Alvarado, Appellants

                                                 v.

 The Abijah Group, Inc., d/b/a and f/k/a Baker Surveying and Engineering, Inc., Appellee

    FROM THE DISTRICT COURT OF BLANCO COUNTY, 424TH JUDICIAL DISTRICT
        NO. CV07317, HONORABLE DONALD LEONARD, JUDGE PRESIDING

                            MEMORANDUM OPINION

               At issue in this appeal is whether limitations bars Homer and Valania Alvarado from

asserting claims against a surveyor, The Abijah Group, Inc., d/b/a and f/k/a Baker Surveying and

Engineering, Inc. (Baker), for errors in a survey that the surveyor disclosed five years before the

Alvarados filed this suit. We hold the trial court did not err by dismissing through summary

judgment the Alvarados’ claims on limitations grounds.

                                    BACKGROUND FACTS

               In 2004, Baker prepared a partial survey of the Clear Rock Ranch near Johnson City,

Texas in connection with efforts by its owners and developers to subdivide the property. As part

of the survey, Baker partitioned a 355-acre tract into two adjacent lots measuring 160 and 195

acres, respectively. Baker’s survey misstated the actual acreage of the two adjacent tracts, however,

showing that the larger tract had 200 acres when, in fact, it consisted of just under 195 acres. The
adjacent tract contained the remaining five acres, but Baker’s survey mislabeled the property as

having 155 acres, rather than its actual 160 acres.

                 In February 2006, the Alvarados purchased the purported 200-acre tract with the

intent of subdividing the property into two tracts. The restrictions governing the subdivision, though,

prohibited the subdivision of property into tracts containing less than 100 acres. Based on Baker’s

survey showing that the tract contained 200 acres, the Alvarados believed that their tract could be

subdivided. In fact, as previously stated, their tract consisted of just 195 acres, and the remaining

five acres had been conveyed to their neighbor, Darryl Crawford, as a part of his purchase of the

adjacent plot.

                 By June 2007, the parties agree that Baker had discovered and disclosed the survey

errors to the Alvarados. The Alvarados, Baker, and Crawford then met shortly thereafter to discuss

the survey errors. The record is unclear as to whether the parties reached an agreement during this

meeting, and if so, what the terms were for the agreement. It is undisputed, however, that Baker paid

a contractor after the meeting to move the fence line between the properties. The new fence line

purported to delineate a changed boundary between the properties, moving the disputed five acres

from Crawford’s tract to the Alvarados’ tract. It is also undisputed that Baker provided the Alvarados

with an amended survey and deed showing this purported corrected boundary.

                 The Alvarados filed the updated survey and amended general warranty deed on

February 2, 2010. In his sworn affidavit, Homer Alvarado averred that Baker “by and through its

various representations affirmatively indicated to us that our concerns about not owning a full

200 acres had been taken care of with the updated survey and the amended deed.” An amended

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surveyor’s report prepared by Baker indicated, however, that the Alvarados had received a letter

from Crawford stating that he “would be ready to pursue the agreement” only after certain actions

were completed, including obtaining HOA approval. There is no indication in the record that approval

was obtained from the homeowners’ association or of a written agreement reached between the

Alvarados and Crawford.

               In May 2010, Crawford moved the fence back to its original location and sold his

property, including the disputed five acres. The Alvarados then attempted to sell a 100-acre tract

from their property and received an offer. In connection with the sale, the title company retained

Baker to provide an updated survey of the property. Baker reported back that the Alvarados’ parcel

designated for sale contained only 95 acres. Because the partition violated the deed restrictions, the

sale could not be completed. Shortly thereafter, the homeowners’ association sued the Alvarados

for improperly partitioning the property in violation of the restrictive covenants. The parties to that

suit entered an agreed judgment in May 2011, recording the correct legal description of the property

as just under 195 acres, enjoining the Alvarados from any future attempts to partition the property,

and awarding attorney’s fees against the Alvarados.

               On February 27, 2012, the Alvarados sued Baker for DTPA violations and negligence,

alleging injuries from the errors in the initial survey conducted by Baker in 2004. Baker initially

filed a general denial but amended its pleadings, on November 7, 2012, to add limitations as a

defense. The same day, Baker also filed a motion for summary judgment on limitations grounds.

On December 14, the Alvarados filed a response contending that limitations did not bar their

claims under the discovery rule or fraudulent-concealment doctrines. Baker, in turn, filed a reply

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contending that the Alvarados could not invoke these defenses in response to the summary-judgment

motion because they had not been pleaded in either the Alvarados’ original petition or in an

amended petition. See Woods v. William M. Mercer, Inc., 769 S.W.2d 515, 517–18 (Tex. 1988) (“A

party seeking to avail itself of the discovery rule must therefore plead the rule, either in its original

petition or in an amended or supplemented petition in response to defendant’s assertion of the

defense as a matter in avoidance.”); see also KPMG Peat Marwick v. Harrison Cnty. Hous. Fin.

Corp., 988 S.W.2d 746, 750 (Tex. 1999) (party asserting fraudulent concealment as an affirmative

defense to limitations has burden of pleading defense and supporting it with summary-judgment

evidence). Baker nevertheless responded to the merits of the Alvarados’ defenses, contending that

the discovery rule did not apply because the Alvarados had actual knowledge of the surveying error

many years prior to their filing suit and that fraudulent concealment was inapplicable because Baker

had disclosed rather than concealed the error.

                On the morning of the summary-judgment hearing, the Alvarados filed an amended

petition incorporating the fraudulent-concealment and discovery-rule defenses that had been set forth

in their summary-judgment response but not included in their original petition. They did not file a

motion for leave to amend their pleadings within seven days of the summary-judgment hearing but

orally requested leave at the hearing. See Tex. R. Civ. P. 63 (amended pleadings filed within seven

days of trial shall be filed only after leave of trial court is obtained); IKB Indus. Ltd. v. Pro-Line

Corp., 938 S.W.2d 440, 441 (Tex. 1997) (summary-judgment proceeding is a trial within the meaning

of Tex. R. Civ. P. 63).

                Baker objected to the Alvarados amending their petition on the morning of the

summary-judgment hearing, contending they could not raise new issues in their pleadings on the day

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of the hearing and that the new pleadings would require them to “start all over” after already

completing discovery. See Tex. R. Civ. P. 63 (motion for leave to amend pleadings within seven

days of trial “shall be granted by the judge unless there is a showing that such filing will operate as

a surprise to the opposite party”). The trial court sustained Baker’s objection to the Alvarados’

summary-judgment response and denied leave to amend their petition, thus leaving the Alvarados’

original petition as the only live pleading. Based on the original petition, the trial court then granted

summary judgment on limitations.

                In two issues on appeal, the Alvarados contend: (1) the trial court erred in failing to

consider their defenses to limitations; and (2) in light of their defenses, the trial court erred in

granting summary judgment because fact issues existed as to when their causes of action accrued

under the discovery-rule and fraudulent-concealment doctrines.

                                    STANDARD OF REVIEW

                Defendants moving for summary judgment on the affirmative defense of limitations

must prove conclusively the elements of that defense. Pustejovsky v. Rapid-Am. Corp., 35 S.W.3d 643,

646 (Tex. 2000). This includes conclusively proving when the cause of action accrued. KPMG,
988 S.W.2d at 748. In addition, if the plaintiff has pleaded the discovery rule, the defendant has the

burden of negating the rule by proving as a matter of law that there is no genuine issue of fact as to

when the plaintiff discovered or should have discovered the nature of the injury. Id. If the movant

establishes that the statute of limitations bars the action, the nonmovant must then adduce summary-

judgment proof raising a fact issue in avoidance of the statute of limitations. Id.

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                The burden of proof is the opposite, however, for fraudulent concealment. Fraudulent

concealment is an affirmative defense to the adverse party’s plea of limitations. See American

Petrofina, Inc. v. Allen, 887 S.W.2d 829, 830 (Tex. 1994). Therefore, the party asserting fraudulent

concealment has the burden of raising it in response to the summary-judgment motion and

submitting evidence raising a fact issue on each element of fraudulent concealment. Id. A mere

pleading or response to the summary-judgment motion does not satisfy this burden to come forward

with sufficient evidence to prevent summary judgment. Id.

                                           DISCUSSION

                The Alvarados filed suit against Baker on February 27, 2012, alleging negligence

and DTPA claims based on the survey errors disclosed by Baker in June 2007. Generally, a cause

of action accrues and the limitation period begins to run when facts come into existence authorizing

a claimant to seek a judicial remedy. Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 202

(Tex. 2011); see also KPMG, 988 S.W.2d at 749 (“[A]ccrual occurs when the plaintiff knew or

should have known of the wrongfully caused injury.”). Here, even assuming that the Alvarados

cause of action did not accrue until Baker informed them of the errors in the survey, they filed suit

well past the undisputed two-year statute of limitation applicable to negligence and DTPA claims.

Thus, absent some theory that tolls the running of limitations or estops Baker from asserting

limitations as a defense, limitations bars the Alvarados’ claims as a matter of law.

                The Alvarados counter that the discovery rule or fraudulent concealment doctrines

tolled the accrual of their claims until they attempted to sell the property and discovered that Baker’s

efforts to remedy the survey errors had failed. Described as a “very limited exception to statute of

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limitations,” the discovery rule defers accrual of a cause of action until the plaintiff’s injury could

reasonably have been discovered. BP Am. Prod. Co. v. Marshall, 342 S.W.3d 59, 65 (Tex. 2011).

The discovery rule is applied categorically to instances in which the nature of the injury incurred is

inherently undiscoverable and the evidence of injury is objectively verifiable. Id. at 66. The discovery

rule does not, however, toll limitations until the plaintiff discovers all of the elements of a cause of

action. KPMG, 988 S.W.2d at 749; Seibert v. General Motors Corp., 853 S.W.2d 773, 776 (Tex.

App.—Houston [14th Dist.] 1993, no writ). Rather, “[k]nowledge of injury initiates the accrual of

the cause of action and triggers the putative claimant’s duty to exercise reasonable diligence to

investigate the problem, even if the claimant does not know the specific cause of the injury or the

full extent of it.” Emerald Oil, 348 S.W.3d at 209.

                The second doctrine the Alvarados contend serves to extend the limitations period

for their claims is fraudulent concealment. Under this equitable doctrine, a “defendant’s fraudulent

concealment of wrongdoing may toll the statute of limitations after the cause of action accrues.”

BP Am. Prod. Co., 342 S.W.3d at 67. “A party asserting fraudulent concealment must establish an

underlying wrong, and that the defendant actually knew the plaintiff was in fact wronged, and

concealed that fact to deceive the plaintiff.” Id. Unlike the categorical approach used for the

discovery rule, fraudulent concealment is fact-specific and equity-driven. Id. But even where the

doctrine is invoked, fraudulent concealment only tolls the running of limitations “until the party

learns of the right of action or should have learned thereof through the exercise of reasonable

diligence.” Borderlon v. Peck, 661 S.W.2d 907, 908 (Tex. 1983). The estoppel effect of fraudulent

concealment “ends when a party learns of facts, conditions, or circumstances which would cause a

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reasonably prudent person to make inquiry, which, if pursued, would lead to discovery of the

concealed cause of action. Knowledge of such facts is in law equivalent to knowledge of the

cause of action.” Id. at 909; see Kerlin v. Sauceda, 263 S.W.3d 920, 925 (Tex. 2008) (“Fraudulent

concealment will not . . . bar limitations when the plaintiff discovers the wrong or could have

discovered it through the exercise of reasonable diligence.”).

                Thus, neither the discovery rule nor fraudulent concealment applies to claims that

could have been discovered during the limitations period through the exercise of reasonable

diligence. See Kerlin, 263 S.W.3d at 925 (“Like fraudulent concealment, the discovery rule does

not apply to claims that could have been discovered through the exercise of reasonable diligence.”).

While reasonable diligence is generally an issue of fact, “in some circumstances, we can still

determine as a matter law that reasonable diligence would have uncovered the wrong.” Hooks v.

Samson Lone Star, Ltd. P’ship, 457 S.W.3d 52, 58 (Tex. 2015). “For example, if the plaintiff has

‘actual knowledge . . . of injury-causing conduct,’ then this ‘starts the clock on the limitations period.’”

Id. at 59 (quoting Emerald Oil, 348 S.W.3d at 209.). Therefore, “irrespective of the potential effect

of fraudulent concealment or the discovery rule on limitations, actual knowledge of alleged

injury-causing conduct starts the clock on the limitations period.” Emerald Oil, 348 S.W.3d at 209

(holding neither discovery rule nor fraudulent concealment tolled limitations where royalty owners

had knowledge of alleged injury-causing conduct but failed to file suit within limitations period).

                Here, even assuming that the trial court erred in failing to consider the Alvarados’

assertion of the discovery rule and fraudulent concealment doctrines, the summary judgment

evidence established that the Alvarados had actual knowledge, more than four years prior to filing

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suit, of the survey errors they pleaded as the basis for their negligence and DTPA claims. Thus, we

do not reach the question of whether the trial court erred in failing to consider these defenses because

we conclude, regardless of the application of the discovery rule or fraudulent concealment doctrines,

the Alvarados’ actual knowledge of the survey errors started the limitations period for their claims.

See id. (not reaching question of whether fraudulent concealment or discovery rule tolled limitations

where plaintiffs had actual knowledge of alleged wrongful conduct more than two years prior to

filing suit).

                Despite their actual knowledge of the survey errors, the Alvarados contend that

Baker’s remedial efforts should toll the limitations period until they attempted to sell their property

and discovered the remedial efforts had failed. While faulty remedial efforts or false assurances of

repair may give rise to an independent cause of action, see PPG Indus., Inc. v. JMB/Houston Ctrs.

Partners, 146 S.W.3d 79, 95–96 (Tex. 2004), the Alvarados do not contend Baker’s remedial efforts

gave rise to new causes of action, and Texas courts have generally held that unsuccessful remedial

efforts alone cannot toll limitations. See, e.g., id. at 96 (seller’s repair efforts alone not enough to

extend limitations period for consumer’s breach of warranty claims); Dean v. Frank W. Neal &

Assocs., Inc., 166 S.W.3d 352, 360 (Tex. App.—Fort Worth 2005, no pet.) (“[W]e have not found

any cases in which the mere making of repairs, without more, estopped a defendant from asserting

limitations.”); Pako Corp. v. Thomas, 855 S.W.2d 215, 219 (Tex. App.—Tyler 1993, no writ)

(“Neither the attempts to repair, nor the vendor’s representatives’ assurances of the success of the

efforts, toll the running of the statute of limitations.”); Clade v. Larsen, 838 S.W.2d 277, 281 (Tex.

App.—Dallas 1992, writ denied) (“Nor does remedial performance, such as structural repairs, toll

the running of the statute of limitations.”); Bishop-Babcock-Becker Co. v. Jennings, 245 S.W. 104,

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105 (Tex. Civ. App.—Austin 1922, no writ) (vendors efforts to repair defects in machinery and

assurances of success did not affect limitations, rather limitations was put in motion by discovery

of the defect and “not interrupted by subsequent attempts to remedy the defects nor by assurances

given”); see also K-7 Enters., L.P. v. Jeswood Oil Co., No. 2-03-312-CV, 2005 WL 182947, at *6

(Tex. App.—Fort Worth Jan. 27, 2005, no pet.) (mem. op.) (where property owner was aware of

contamination from leak in neighboring underground gas tanks, court held that false assurances

of successful remediation of contamination did not toll limitations because owner “possessed

knowledge of facts that would make a reasonable person verify the contamination levels on its

property after the alleged remediation . . . [and] undisputedly possessed knowledge of facts that, if

investigated, would have revealed [its] cause of action”).

               But even if false assurances of remediation can toll limitations, the Legislature

has limited the amount of time a plaintiff has to file such a claim under the DTPA. The limitations

provision of the DTPA provides:

       All actions brought under this subchapter must be commenced within two years after
       the date on which the false, misleading, or deceptive act or practice occurred or
       within two years after the consumer discovered or in the exercise of reasonable
       diligence should have discovered the occurrence of the false, misleading, or
       deceptive act or practice. The period of limitation provided in this section may be
       extended for a period of 180 days if the plaintiff proves that failure to timely
       commence the action was caused by the defendant’s knowingly engaging in conduct
       solely calculated to induce the plaintiff to refrain from or postpone the
       commencement of the action.

Tex. Bus. & Com. Code § 17.565 (emphasis added). Thus, even if the Alvarados established that

Baker knowingly engaged in conduct solely calculated to induce them to postpone filing suit, the

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limitations period for their DTPA claims can only be extended an additional 180 days. As it is

undisputed that the Alvarados filed their DTPA claims past this 180-day tolling period, limitations

bars those claims as a matter of law.

               For the Alvarados’ common-law negligence claims, this Court has applied equitable

tolling in cases where a defendant’s actions—unmixed with any want of diligence on the plaintiff’s

part—induced the plaintiff to not bring a timely suit on a claim the plaintiff knew he possessed

against the defendant. See Leonard v. Eskew, 731 S.W.2d 124, 128 (Tex. App.—Austin 1987, writ

ref’d n.r.e.); see also Smith v. J-Hite, Inc., 127 S.W.3d 837, 843 (Tex. App.—Eastland 2003, no pet.)

(equitable tolling applies where claimant has been induced or tricked by adversary’s misconduct

into allowing filing deadline to pass). The Alvarados, however, did not plead nor argue equitable

tolling at the trial court, nor have they argued the applicability of the doctrine on appeal. See Hand

v. Stevens Transp., Inc. Empl. Benefit Plan, 83 S.W.3d 286, 293 (Tex. App.—Dallas 2002, no pet.)

(proponent of equitable tolling bears burden of showing entitlement to doctrine). Regardless, even

when the doctrine is properly invoked, a plaintiff must establish diligence in filing “the cause of

action he knows he has [and] may not continue to rely upon the defendant’s original inducement

beyond a point when it becomes unreasonable to do so.” Leonard, 731 S.W.2d at 129; see also Neal

v. Pickett, 280 S.W. 748, 753 (Tex. Comm’n App. 1926, jdgmt adopted) (“[O]ne claiming suspended

operation of the statutes of limitations, or estoppel against their apparent effect, must have not

ignored the requirements of due care and blindly relied upon a situation as being what it seemed

rather than as being what it in reality was.”). Here, the uncontroverted summary-judgment evidence

showed that the Alvarados had notice within the limitations period—despite whatever assurances

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were allegedly given by Baker—that their neighbor had not agreed to the boundary change. See PPG

Indus., Inc., 146 S.W.3d at 98 (noting that even if false assurances of repair could toll limitations,

there was no evidence plaintiff was misled by defendant’s false assurances rather than its own false

hopes). Moreover, the Alvarados waited to file their suit until almost two years after their neighbor

moved the fence line and almost a year after they lost their suit to the homeowners’ association.

Even where the doctrine applies, equitable tolling will not extend the limitations period indefinitely,

and a plaintiff must be diligent in the prosecution of his suit. See, e.g, Ruiz v. Austin Indep. Sch.

Dist., No. 03-02-00798-CV, 2004 WL 1171666, at *5 (Tex. App.—Austin May 27, 2004, no pet.)

(“We see no reason to apply an equitable tolling theory to allow for an indefinite period of time

within which to re-file a suit in this case.”). As the Alvardos have neither preserved error for

equitable tolling nor shown diligence, we see no reason to apply an equitable tolling theory to

indefinitely extend the limitations period for their negligence claim.

                                          CONCLUSION

               Concluding limitations bars the Alvardos’ DTPA and negligence claims, we affirm

the judgment of the trial court.

                                               ____________________________________________

                                               David Puryear, Justice

Before Chief Justice Rose, Justices Puryear and Pemberton

Affirmed

Filed: July 29, 2015

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