Court Opinion

ID: 2820377
Source: CourtListenerOpinion
Date Created: 2015-07-27 07:55:50.618786+00
Date Added: 2024-06-11T11:30:56.331367
License: Public Domain

Reverse and Render in part; Affirm in part; Opinion Filed July 23, 2015.

                                              In The
                                Court of Appeals
                         Fifth District of Texas at Dallas
                                      No. 05-13-01269-CV

                  TIFFANY LYNN FRASER, Appellant
                                V.
    TIMOTHY PURNELL, AS INDEPENDENT EXECUTOR, ESTATE OF TOMMY
                ARTHUR PURNELL, DECEASED, Appellee

                           On Appeal from the Probate Court No. 1
                                    Dallas County, Texas
                             Trial Court Cause No. PR-11-927-1

                             MEMORANDUM OPINION
                              Before Justices Lang, Stoddart, and Schenck
                                  Opinion by Justice Stoddart
       This case presents an appeal from a bench trial in which the trial court found in favor of

appellee Timothy Purnell, as Independent Executor of the Estate of Tommy Arthur Purnell,

Deceased (Purnell), against appellant Tiffany Lynn Fraser on Purnell’s claims of common law

fraud and statutory fraud in a real estate transaction. The trial court awarded damages, pre- and

post-judgment interest, and attorney’s fees to Purnell. In three issues, Fraser argues there is

legally insufficient evidence to support the judgment for fraud and statutory fraud and, assuming

the evidence supports the judgment, the trial court erred by refusing to apportion responsibility to

two designated third parties. In two cross-points, Purnell asserts the trial court’s holding that he

take nothing on his claim for negligent misrepresentation is against the greater weight and

preponderance of the evidence and the trial court erred by striking his’s fifth amended original
petition. We reverse the trial court’s judgment and render a take-nothing judgment in favor of

Fraser.

                                        FACTUAL BACKGROUND

          Fraser is a real estate agent who worked for Kevin Wiley and Tower Custom Homes,

LLC in a transaction to purchase a property from Purnell. On December 18, 2009, she submitted

an offer via email from Tower Custom Homes to Purnell in which she represented the offer was

a cash offer and Tower Custom Homes could close in February 2010. In the email she noted that

“Buyer can close much sooner” than February.

          The parties agreed to a contract, which was set to close on February 12, 2010. The

contract states: “Upon execution of this contract by all parties, Buyer shall deposit $2,500.00 as

earnest money with Fidelity National Title as escrow agent. . .” The contract did not include

terms for financing any portion of the purchase price. On January 26, 2010, Purnell and Fraser

exchanged emails. Purnell’s email stated: “Attached is the initialized option page for your copy

of the contract.” In response, Fraser wrote: “I’m not sure if its [sic] my computer, but I didn’t

receive the attachment. . . . The earnest money and fully executed contract will be sent to Title

today.” The basis for Fraser’s statement that the “earnest money and fully executed contract will

be sent to Title today” was Wiley’s representation to her that he was going to deliver the earnest

money to the title company. Wiley never delivered the earnest money to the title company, and

never told Fraser he did not deposit the money. Likewise, Fraser never contacted Purnell to

inform him the earnest money was not deposited.

          Fraser emailed Purnell on February 6, 2010, and informed him: “Evidently, Tower

Custom Homes has an investor that will need to be present for Closing. He will not be back in

town for closing until the end of the month.” Purnell replied he had “no trouble with pushing

closing back to late Feb[ruary].” On February 23, 2010, Fraser sent another email to Purnell: “I

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just got this amendment from Tower Custom Homes. Evidently, he is taking out a small

construction loan and doing a one time close on this property. The loan is underwriting and

should be able to close by next Friday. Sorry, I just received this amendment. . . . Sorry, for the

delay, evidently the cost associated with the updating required Mr. Wiley to need a small loan.”

Purnell replied that he could extend the closing date until March 6, 2010.

       Although the closing date was extended several times, the contract never closed. Fraser

testified at trial: “I don’t think he [Wiley] had the investor or cash to close.” Purnell learned the

earnest money was never deposited in April 2010 when he terminated the contract and attempted

to collect the money.

       In his fourth amended original petition, Purnell sued Fraser for common law fraud, fraud

in a real estate transaction, and negligent misrepresentation. Purnell alleged Fraser made several

misrepresentations, including her email that the “earnest money and fully executed contract will

be sent to Title today,” and that “Fraser knew at the end of the day of the written representation,

reaffirming the earlier oral representation [sic] that the deposit had not been made that day.”

However, Purnell alleged, Fraser failed to disclose to him that the earnest money was never

deposited. In his opening statement before the trial court, counsel for Purnell further explained

Purnell’s argument:

               There was a representation from the realtor both verbally and in writing
       that the earnest money deposit and the contract would go to the title company
       today, and that was made on January -- the email was sent on January 26 of 2010
       and it was confirming an earlier oral statement earlier in January. The reason I
       mention that in that much detail is if there is authority that when a person makes a
       statement, even though they think it is true at the time and later gains information
       that makes him know that it was not true, then there’s a duty to convey that
       information to the person who is spoken to.
               And the way the courts say it is that the Defendant has a duty to disclose
       material facts when it discovers new information that makes an earlier
       representation false or misleading.
               And if she sends out an email confirming an earlier conversation that,
       “I’m sending my earnest money to the title today,” and at the end of the day, if
       she didn’t send it, then she has a duty to contact him and say, you know, “I
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       thought when I told you that he was going to send earnest money. It didn’t come
       in. I didn’t send it and it has not been made.”

        The trial court entered findings of fact and conclusions of law, including that Fraser

“made false statements of fact and promises of future performance with the intent, at the time the

promise was made, not to perform as promised”; Fraser failed to disclose material facts when she

discovered new information that made an earlier representation false or misleading; Fraser made

false representations and failed to disclose material facts with the intent that Purnell would act on

her misrepresentations; and Fraser made false misrepresentations of past or existing facts to

Purnell to induce Purnell to enter a contract and Purnell relied on the misrepresentation; Fraser

made “false promises to do an act” with “the intent of not fulfilling it” to induce Purnell to enter

into a contract. The trial court concluded Purnell showed Fraser committed common law fraud

and statutory fraud in a real estate transaction, but failed to show negligent misrepresentation.

                                         LAW & ANALYSIS
A.     Fraud and Statutory Fraud

       In her first issue, Fraser asserts there is legally insufficient evidence to support the trial

court’s judgment for fraud and statutory fraud because there is no evidence Fraser made a

misrepresentation that she knew was false at the time it was made, on which Purnell justifiably

relied, for purposes of inducing Purnell to sign the contract, and that caused Purnell the damages

the trial court awarded.

       1.      Standard of Review

       In an appeal from a bench trial, the trial court’s findings of fact have the same force and

effect as jury findings. Sharifi v. Steen Auto., LLC, 370 S.W.3d 126, 147-48 (Tex. App.—Dallas

2012, no pet.) (citing Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991);

Walker v. Anderson, 232 S.W.3d 899, 907 (Tex. App.—Dallas 2007, no pet.)). Unchallenged

findings of fact are binding on the appellate court, unless the contrary is established as a matter

                                                –4–
of law or there is no evidence to support the finding. Id. (citing McGalliard v. Kuhlmann, 722
S.W.2d 694, 696 (Tex. 1986); Bundren v. Holly Oaks Townhomes Ass’n, Inc., 347 S.W.3d 421,

429–30 (Tex. App.—Dallas 2011, pet. denied); Walker, 232 S.W.3d at 907). When, as here, the

appellate record contains a reporter’s record, findings of fact on disputed issues are not

conclusive and may be challenged for sufficiency of the evidence.            Id. (citing Sixth RMA

Partners, L.P. v. Sibley, 111 S.W.3d 46, 52 (Tex. 2003); Las Colinas Obstetrics–Gynecology–

Infertility Ass’n, P.A. v. Villalba, 324 S.W.3d 634, 638 (Tex. App.—Dallas 2010, no pet.)).

       We review a trial court’s findings of fact under the same standards used when

determining if sufficient evidence exists to support an answer to a jury question. Id. (citing

Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994); Darocy v. Abildtrup, 345 S.W.3d 129,

136 (Tex. App.—Dallas 2011, no pet.)). When, as here, an appellant attacks the legal sufficiency

of an adverse finding on an issue on which she did not have the burden of proof, she must

demonstrate that no evidence supports the finding. Id. (citing Croucher v. Croucher, 660 S.W.2d
55, 58 (Tex. 1983)). We review the evidence presented at trial in the light most favorable to the

fact-finder’s findings, crediting evidence to that party if a reasonable fact-finder could and

disregarding evidence unless a reasonable fact-finder could not. Id. (citing Guevara v. Ferrer,

247 S.W.3d 662, 665 (Tex. 2007); City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005)).

Anything more than a “scintilla of evidence” is legally sufficient to support the finding. Id.

(citing Cont’l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 450 (Tex. 1996)). To constitute

more than a scintilla, the evidence must rise “to a level that would enable reasonable and fair-

minded people to differ in their conclusions.” Id. (quoting Transp. Ins. Co. v. Moriel, 879
S.W.2d 10, 25 (Tex. 1994)). When reviewing the legal sufficiency of the evidence, we are

mindful that the trial court was the sole judge of the credibility of the witnesses and the weight to

be given their testimony. Id. (citing City of Keller, 168 S.W.3d at 819; Wright Grp. Architects–

                                                –5–
Planners, P.L.L.C. v. Pierce, 343 S.W.3d 196, 199 (Tex. App.—Dallas 2011, no pet.)). We

review a trial court’s conclusions of law de novo to determine if the trial court drew the correct

legal conclusions from the facts. Id. (citing Bundren, 347 S.W.3d at 429–30; Wright Grp.

Architects–Planners, P.L.L.C., 343 S.W.3d at 199). We must uphold conclusions of law if “any

legal theory supported by the evidence sustains the judgment.” Id. (citing Bundren, 347 S.W.3d

at 430). We will reverse the trial court’s judgment only if the conclusions of law are erroneous

as a matter of law. Id.

       2.      Elements of Fraud and Statutory Fraud

       The elements of fraud are: (1) a material misrepresentation was made; (2) the

representation was false; (3) when the representation was made, the speaker knew it was false or

made it recklessly without any knowledge of the truth and as a positive assertion; (4) the speaker

made the representation with the intent that the other party should act upon it; (5) the party did

act upon it; and (6) the party thereby suffered injury.         Collective Asset Partners LLC v.

Schaumburg, 432 S.W.3d 435, 443 (Tex. App.—Dallas 2014, pet. denied).

       The elements of statutory fraud are: (1) a transaction involving real estate or stock; (2)

the defendant made a false representation of a past or existing material fact or made a promise to

do an act with the intention of not fulfilling it; (3) the false representation or promise was made

for the purpose of inducing the claimant to enter into a contract; and (4) the plaintiff relied on the

false representation or promise in entering into the contract. Id. (citing Anderton v. Cawley, 378
S.W.3d 38, 56–57 (Tex. App.—Dallas 2012, no pet.); TEX. BUS. & COM. CODE. ANN. §

27.01(a)(1) (West 2009)).

                                                 –6–
       3.      Analysis

       Purnell cites three statements from Fraser to support his fraud claim. First is Fraser’s

statement: “[T]he earnest money and fully executed contract will be sent to Title today.” Purnell

argues that because the earnest money was never deposited and Fraser did not notify Purnell the

earnest money was not deposited, Fraser committed fraud. Second, he asserts Fraser’s statement

that Wiley could close in February, or earlier if Purnell desired, was a misrepresentation intended

to put Wiley’s bid above others, and that the misrepresentation did so. Finally, he argues

Fraser’s representation that the purchase was a cash offer was not true.

       Purnell was required to establish that at the time Fraser made the statements about which

he complains, Fraser knew they were false or she made them recklessly without any knowledge

of the truth of the statements. See id. However, there is no evidence in the record showing

Fraser knew, at the time she made any of these statements, that Wiley would not deposit the

earnest money, Wiley would not be able to close in February, or Wiley would need financing for

the transaction. While the evidence shows Wiley did not deliver the earnest money to the title

company, it does not show Fraser knew Wiley would not deliver the money when she sent the

email. Rather, Fraser’s testimony shows she sent the email based on Wiley’s representation to

her that he was going to deliver the earnest money to the title company, and there is no evidence

that, at the time she wrote the email, she knew Wiley did not intend to deliver the money.

Additionally, Wiley never told Fraser he did not deposit the money. Purnell also did not present

evidence that Fraser knew Wiley could not close in February and knew Wiley could not pay cash

for Purnell’s house at the time she made the statements to Purnell. Based on this record, we

conclude there is no evidence Fraser made any false representations to Purnell.

                                               –7–
          Because we conclude there is no evidence Fraser made a false representation to Purnell,

we do not consider whether there is evidence satisfying the other elements of fraud and statutory

fraud. See TEX. R. APP. P. 47.1.

          4.     Conclusion

          Because there is no evidence Fraser made a false representation to Purnell, the evidence

is insufficient to support the trial court’s judgment for fraud and statutory fraud. We sustain

Fraser’s first issue, and reverse the trial court’s judgment in favor of Purnell on his claims for

fraud and statutory fraud against Fraser.

          Because we sustain Fraser’s first issue, we need not address her second and third issues in

which she argues the evidence is insufficient to support the judgment for statutory fraud because

there is no evidence that real property was transferred and, assuming the evidence supports the

judgment, the trial court erred by refusing to apportion responsibility to designated third parties.

See id.

B.        Negligent Misrepresentation

          In his first cross-point, Purnell asserts the trial court erred by ordering he take nothing on

his claim for negligent misrepresentation. To recover on a claim for negligent misrepresentation,

a plaintiff must prove: (1) a representation was made by the defendant in the course of business

or in a transaction in which it had a pecuniary interest; (2) the defendant supplied false

information for the guidance of others in their business; (3) the defendant did not exercise

reasonable care or competence in obtaining or communicating the information; and (4) the

plaintiff suffered pecuniary loss by justifiably relying on the representation. Schaumburg, 432
S.W.3d at 438. In his brief, Purnell relies on the same arguments discussed above to support his

first cross-point. However, as previously addressed, there is no evidence that Fraser supplied

any false information to Purnell. Fraser made statements that she believed to be true at the time

                                                   –8–
that she made them. Wiley, then, failed to follow through, but Wiley’s failures do not convert

Fraser’s statements to falsities.

        Further, “[a] cause of action for negligent misrepresentation . . . requires a misstatement

of existing fact rather than a promise of future conduct.” Petras v. Criswell, 248 S.W.3d 471,

476 (Tex. App.—Dallas 2008, no pet.). As noted above, the representations forming the basis of

Purnell’s negligent misrepresentation claim are nothing more than Fraser’s statements about

what she believes Wiley will do in the future. Because such promises are not misrepresentations

of existing fact, they cannot support Purnell’s negligent misrepresentation claim.

        We overrule Purnell’s first cross-issue.

C.      Fifth Amended Petition

        In his second cross-point, Purnell argues the trial court erred by striking his fifth amended

petition. In his brief, Purnell states: “This point is offered conditionally, in the event that for any

reason the measure of damages based on the shortfall between the net proceeds of the ultimate

sale as compared to the Tower/Wiley contract should be found to be reversible on appeal, and

only in that event.” He explains that in his fifth amended petition, he re-pleaded to reduce his

alleged damages, but the trial court improperly struck the pleading.

        Purnell’s argument relates to the amount of damages he believes he suffered. However,

for Purnell to recover damages, he would have had to prevail on his fraud and negligent

misrepresentation causes of action.      Because we concluded Purnell’s claims for fraud and

negligent misrepresentation fail, we do not address the merits of his second cross-point. See

TEX. R. APP. P. 47.1.

                                                   –9–
                                          CONCLUSION

       We reverse the trial court’s judgment on Purnell’s claims for fraud and statutory fraud in

a real estate transaction. We render judgment in Fraser’s favor on these claims and order Purnell

take nothing. We affirm the trial court’s judgment on Purnell’s claims for breach of contract and

negligent misrepresentation.

                                                  /Craig Stoddart/
                                                  CRAIG STODDART
                                                  JUSTICE

131269F.P05

                                              –10–
                               Court of Appeals
                        Fifth District of Texas at Dallas
                                      JUDGMENT

TIFFANY LYNN FRASER, Appellant                         On Appeal from the Probate Court No. 1,
                                                       Dallas County, Texas
No. 05-13-01269-CV         V.                          Trial Court Cause No. PR-11-927-1.
                                                       Opinion delivered by Justice Stoddart.
TIMOTHY PURNELL, AS                                    Justices Lang and Schenck participating.
INDEPENDENT EXECUTOR, ESTATE
OF TOMMY ARTHUR PURNELL,
DECEASED, Appellee

        In accordance with this Court’s opinion of this date, the judgment of the trial court is
REVERSED in part and judgment is RENDERED that appellee Timothy Purnell, as
Independent Executor of the Estate of Tommy Arthur Purnell, Deceased, take nothing against
appellant Tiffany Lynn Fraser on the claims of common law fraud and statutory fraud in a real
estate transaction. Appellee Timothy Purnell, as Independent Executor of the Estate of Tommy
Arthur Purnell, Deceased shall not recover judgment from appellant Tiffany Lynn Fraser.

       The judgment of the trial court is AFFIRMED in part that appellee Timothy Purnell, as
Independent Executor of the Estate of Tommy Arthur Purnell, Deceased, take nothing against
appellant Tiffany Lynn Fraser on the claims of breach of contract and negligent
misrepresentation.

       It is ORDERED that appellant Tiffany Lynn Fraser recover her costs of this appeal from
appellee Timothy Purnell, as Independent Executor of the Estate of Tommy Arthur Purnell,
Deceased.

Judgment entered this 23rd day of July, 2015.

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