Court Opinion

ID: 3111797
Source: CourtListenerOpinion
Date Created: 2015-10-16 06:59:19.794375+00
Date Added: 2024-06-11T09:22:33.793508
License: Public Domain

NO. 07-09-0269-CV

                        IN THE COURT OF APPEALS

                   FOR THE SEVENTH DISTRICT OF TEXAS

                              AT AMARILLO

                                PANEL B

                            JANUARY 26, 2011

               WELDON E. BOEHL, JR. AND SHARON M. BOEHL,

                                             Appellants
                                   v.

       ROGER BOLEY, ELLEN E. DAWSON, RICHARD SMITH COMPANY D/B/A
                   COLDWELL BANKER UNITED, REALTORS,

                                    Appellees
                      ___________________________

            FROM THE 200TH DISTRICT COURT OF TRAVIS COUNTY;

     NO. D-1-GN-06-004062; HONORABLE GUS J. STRAUSS JR., PRESIDING

                           Memorandum Opinion

Before QUINN, C.J., and CAMPBELL  and HANCOCK,  JJ.
      A take-nothing summary judgment was entered in Weldon and  Sharon
Boehl’s (the Boehls)  lawsuit  against  Roger  Boley  (Boley),  Richard
Smith  Company  d/b/a  Coldwell  Banker  United,   Realtors   (Coldwell
Banker), and Ellen E. Dawson (Dawson),  (the  Coldwell  Banker  listing
agent).    The   Boehls   sought   damages   arising   from   purported
misrepresentations and omissions with respect to  a  home  they  bought
from Boley.  In addition to  receiving  a  favorable  judgment,  Boley,
Coldwell Banker and Dawson also  were  awarded  attorney’s  fees.   The
Boehls contend, on appeal, the trial court erred  in  1)  holding  that
the home was sold “as is” per the sales contract  and  that  such  fact
negated their ability to prove causation, and  2)  awarding  attorney’s
fees to Coldwell Banker and Dawson since they were not parties  to  the
sales contract.  We affirm the judgment.
      Background
      On April 28, 2006, Boley and the  Boehls  entered  into  a  sales
contract for a property located at  17106  Majestic  Ridge  in  Austin,
Texas.  It consisted of a form  Texas  Real  Estate  Commission  (TREC)
agreement and provided that the buyer accepted  the  property  “in  its
present condition.”[1]  Though the document  obligated  the  Boehls  to
buy the land, they nevertheless acquired an  option  to  terminate  the
contract within twelve  days  of  its  execution,  if  they  so  chose.
Later, the parties extended the option period to eighteen days, or  May
15, 2006.  On the latter date, the parties again amended the  agreement
to include a provision requiring Boley to perform  certain  repairs  to
the property.  The closing date was also extended to July 12, 2006.
      Prior to entering the contract, Boley represented to  the  Boehls
that “[e]verything in this home works the  way  it  should  work,”  the
water well on the property had 280 feet of water in it, and he had  not
had any problems with the well.[2]  The Boehls  had  no  separate  well
inspection  performed  prior  to  closing  although  a   general   home
inspector informed them that it was working.
      Shortly before the closing was scheduled, there arose  a  problem
with the well.  This resulted in the replacement of a  pressure  switch
on July 6.  Thereafter, the well continued to produce water.   About  a
week later, the sale closed.  Within a month, though, the Boehls  began
experiencing a shortage of water from the well.  An investigation  into
the circumstances reveals that the well was going dry and  necessitated
extensive repairs.
      The  Boehls  sued  for   fraud,   DTPA   violations,   fraudulent
inducement, negligent and fraudulent misrepresentations, and breach  of
contract.  In response, the defendants sought partial summary  judgment
because the Boehls bought the property “as  is”  thereby  negating  any
proof of causation.  Boley also asserted that  he  could  not  be  held
liable pursuant to §1101.805 of  the  Texas  Occupation  Code.[3]   The
trial court granted summary judgment and,  after  a  bench  trial,  the
court entered  judgment  favoring  the  defendants  and  awarding  them
attorney’s fees per a provision of the contract.
      Standard of Review
      The standard for review for a summary judgment is found in  Nixon
v. Mr. Property  Management  Company,  690 S.W.2d 546,  548-49  (Tex.
1985).  When the summary judgment does not  specify  the  grounds  upon
which it was granted, it may be affirmed on any ground  in  the  motion
that is meritorious.  Harwell v. State Farm Mut.  Auto  Ins.  Co.,  896
S.W.2d 170, 173 (Tex. 1995).

      “As Is” Contract
      By purchasing a property “as is,” the buyer accepts the risk that
the property is worth less than the price paid.   Prudential  Insurance
Company of America v. Jefferson Associates, Ltd., 896 S.W.2d 156,  161
(Tex. 1995).  He is thus  precluded  from  proving  that  the  seller’s
conduct caused him harm.  Id. There are, however,  exceptions  to  this
rule.   If  the  totality  of   the   circumstances   surrounding   the
transaction suggest that the “as is” clause  is  merely  a  boilerplate
provision between parties of unequal bargaining power, the  clause  may
not be given effect.  Id. at 162.  Further, if the buyer is induced  to
enter  the  agreement  because  of  a  fraudulent   representation   or
concealment of information by the  seller,  the  seller  may  not  hide
behind the “as is” provision.  Id.; Weitzel v. Barnes, 691 S.W.2d 598,
601 (Tex. 1985).
      Next,  a  TREC  contract  using  the  language  “in  its  current
condition” has been construed to be an  “as  is”  agreement.   Sims  v.
Century 21 Capital Team,  Inc.,  No.  03-05-00461-CV,  2006  Tex.  App.
Lexis 7990, at *5-6 (Tex. App.–Austin September 7, 2006, no pet.);  see
also Cherry v. McCall, 138 S.W.3d 35, 39 (Tex. App.–San  Antonio  2004,
pet. denied); Fletcher v. Edwards, 26 S.W.3d 66,  75  (Tex.  App.–Waco
2000, pet. denied).  And, because this case was  transferred  from  the
Austin Court of Appeals, we must abide  by  its  precedent,  though  it
does not necessarily control the outcome of  cases  originating  within
the geographic  borders  of  the  Court  of  Appeals  for  the  Seventh
District of Texas.
      We further note that the record  illustrates  that  both  parties
were represented by real estate agents, the Boehls paid  extra  for  an
option to withdraw from  the  transaction,  the  Boehls  negotiated  an
extension of that  option  period,  and  they  further  negotiated  the
repair  of  certain  items  by  Boley.   Therefore,  the  circumstances
surrounding execution of the sales contract do not depict  a  situation
reminiscent of an adhesion contract or like  relationship  wherein  one
party has little to no bargaining power; this is of import for  such  a
situation may nullify the “as is” nature  of  the  contract  at  issue,
according to the court in Sims.  See Sims v. Century 21  Capital  Team,
Inc., 2006 Tex. App. Lexis 7990, at *8-9.
       And, to the extent that the effect of an “as  is”  contract  may
also be nullified through  the  seller’s  use  of  fraud,  we  find  no
evidence of record illustrating that Boley knew  the  actual  condition
of the well when he made representations about it being  functional  or
having a certain level  or  amount  of  water.   Nor  does  the  record
contain evidence from  which  reasonable  minds  could  infer  that  he
garnered such knowledge after making those representations  and  before
the closing date.  He did cause a well switch to be  repaired,  but  no
evidence developing that  circumstance  exists  from  which  one  could
reasonably infer that  he  garnered  information  rendering  his  prior
representations inaccurate.  Nor does the  statement  of  a  technician
tendered by the Boehls to the effect that Boley must have known of  the
well’s defects fill the void.  That is nothing more  than  ipse  dixit,
or a conclusion without factual support.  As such,  it  constitutes  no
evidence.  City of San Antonio v. Pollock, 284 S.W.3d 809,  816  (Tex.
2009) (explaining ipse dixit and that it is not competent evidence).
        To the extent that the Boehls rely upon Pairett  v.  Gutierrez,
969 S.W.2d 512 (Tex. App.–Austin 1998, pet. denied)  to  support  their
argument that a material question of fact existed, we find the  opinion
inapposite.  Unlike  the  situation  here,  evidence  appeared  in  the
Pairett  record  suggesting  that  the  crack  in  the  foundation  was
sufficiently open and obvious for  a  long  enough  time  that  someone
living in the house would have known of it.  Id. at 515.   We  have  no
such evidence at bar.
      Nor do we find relevant the argument that Boley’s  affidavit  was
not  competent  summary  judgment  evidence  since  it  was   from   an
interested party.  This is so because the  exception  to  the  “as  is”
nature of the contract likens to  a  defense  or  affirmative  defense.
So, to the extent that the non-movants attempted to invoke it as a  bar
to summary  judgment,  the  burden  was  theirs  to  present  competent
evidence creating a material issue of fact  viz  each  element  of  the
defense.  Forrest v. Vital Earth Resources, 120 S.W.3d 480,  487  (Tex.
App.–Texarkana 2003, pet. denied) (describing the burden of proof on  a
non-movant attempting to invoke a defense to defeat summary  judgment).
  Boley  need  not  have  presented  any  evidence;  so,  whether   the
statements in his affidavit  about  lacking  knowledge  of  the  well’s
actual condition are  competent  summary  judgment  evidence  does  not
matter.
      Finally, the Boehls contend that  because  Boley  chose  to  make
representations about the property  instead  of  remaining  silent,  he
removed himself from the protection  of  the  “as  is”  nature  of  the
contract.   As  already  noted,  there  is  no  evidence   that   those
statements were not true at the time they were made or that Boley  knew
that  they  were  inaccurate.   See  Prudential  Insurance  Company  of
America v. Jefferson Associates, Ltd., 896 S.W.2d at 163 (stating  that
there was no evidence that the property manager knew or had any  reason
to suspect that her  statement  that  there  were  no  defects  in  the
building  other  than  the  foundation  in  the  mechanical  room   was
inaccurate). Accordingly, we find the summary judgment was  proper  and
overrule the Boehls’ issue.

      Attorney’s Fees
      The Boehls also complain of  the  award  of  attorney’s  fees  to
Coldwell Banker and Dawson because they were not parties to  the  sales
agreement.  That agreement provided:   “The  prevailing  party  in  any
legal proceeding related  to  this  contract  is  entitled  to  recover
reasonable attorney’s fees and all costs of  such  proceeding  incurred
by the prevailing party.”  The Austin Court of Appeals  has  held  that
such language permits real estate brokers to  recover  attorney’s  fees
as long as they are a prevailing party in a  legal  proceeding  related
to the contract.  See Sierra Associate Group, Inc. v. Hardeman, No. 03-
08-00324-CV, 2009 Tex. App. Lexis 1181,  at  *26-28  (Tex.  App.–Austin
February 20, 2009, no pet.) (mem. op.).  We are bound  to  follow  that
decision as well.  Tex. R. App. P. 41.3.
      In their reply brief, the Boehls argue that  its  claims  against
Coldwell Banker and Dawson are not breach of contract  claims  and  are
therefore not “related to this  contract.”   However,  the  defense  of
both parties and the basis for summary  judgment  in  their  favor  was
that the sales agreement was an “as is” contract.  We, therefore,  find
the lawsuit to be related to the sales agreement.
      Having overruled each issue, we affirm the summary judgment.

                                        Per Curiam

-----------------------
      [1]The provision stated:  “Buyer  accepts  the  Property  in  its
present  condition;  provided  Seller,  at  Seller’s   expense,   shall
complete the following specific repairs and treatments:  ______.”   The
blank was not completed in  the  original  contract,  but  the  parties
later negotiated an amendment under which Boley was to  make  a  number
of repairs.

      [2]Weldon Boehl admitted he was never told that the well wouldn’t
go dry.

      [3]That  statute  provides:  “A  party  is  not  liable   for   a
misrepresentation or a  concealment  of  a  material  fact  made  by  a
license holder in a real estate  transaction  unless  the  party:   (1)
knew of the falsity of the misrepresentation or  concealment;  and  (2)
failed to  disclose  the  party’s  knowledge  of  the  falsity  of  the
misrepresentation or concealment.”  Tex. Occ.  Code  Ann.  §1101.805(d)
(Vernon 2004).