Court Opinion

ID: 4043000
Source: CourtListenerOpinion
Date Created: 2016-09-28 23:13:40.82887+00
Date Added: 2024-06-11T14:30:23.184109
License: Public Domain

Opinion filed August 31, 2015

                                      In The

        Eleventh Court of Appeals
                                   __________

                                No. 11-13-00209-CV
                                    __________

                           IVA HODGES, Appellant
                                         V.
          FIRST TEXAS TITLE COMPANY, LLC, Appellee

                     On Appeal from the 42nd District Court
                                Taylor County, Texas
                          Trial Court Cause No. 48,398-A

                      MEMORANDUM OPINION
      Iva Hodges sued First Texas Title Company, LLC (First Texas) and others for
several claims that she alleged arose out of the sale of her unimproved real property.
The gist of Hodges’s claims is that she signed a contract to convey her property upon
terms to which she purportedly did not agree. Specifically, the contract and the
warranty deed did not contain a reservation of her royalty and mineral interest. But
Hodges signed the contract even though she knew that it did not include a
reservation. She also signed the warranty deed even though she knew that it did not
reserve her royalty and mineral interest and even though she also knew that the
buyers had not agreed to her reservation of her royalty and mineral interest.
        Hodges sued First Texas, the escrow agent, and she claimed that it misled her
about the consequences of her execution of the deed that complied with the express
terms of the contract she had signed. First Texas moved for summary judgment on
traditional and no-evidence grounds. The trial court granted First Texas’s motion
and dismissed all of Hodges’s claims against First Texas. In two issues, Hodges
argues that the trial court erred when it granted summary judgment in favor of First
Texas. We affirm.
                                  I. Background Information
        Hodges owned a tract of real property together with an interest in the
minerals.1 Hodges decided to sell her property and contacted Jerry Manske, a real
estate agent with Panian & Mash LP, a Coldwell Banker real estate firm, to list her
property for sale. Hodges explained to Manske that, in addition to the surface estate,
she would include her royalty and mineral interest if the property sold for her full
asking price.2 But Hodges also told him that, if the property sold for less than that
full price, then she wanted to reserve her royalty and mineral interest. Manske told
her that he had buyers for the property—Tommy Ross and Dayna Ross.

        1
         An attorney for First Texas, Andy McCall, stated in his affidavit that Hodges had indicated that
she received a royalty payment on her interest in the tract of real property.
        2
        Hodges presented no evidence of her full asking price. The contract had an original price of
$150,000, but that was marked out and the price of $167,500 was inserted.

                                                   2
        A. The Contract
        Manske sent a contract for the sale of Hodges’s real property3 to her for her
to review and sign.4 The contract not only contained typewritten terms, it also
contained several handwritten changes. All of the changes were initialed by the
Rosses and Hodges except for one change that is not relevant to our discussion.
Hodges reviewed the contract and noticed that it did not include a reservation of her
royalty and mineral interest. Hodges talked to Manske’s wife, Judy Charland-
Manske, and informed her of the missing reservation clause. Charland-Manske, who
also worked at Panian & Mash, told Hodges to sign the contract and return it to her.
Charland-Manske said she would then correct the contract to add the reservation of
the royalty and mineral interest.
        Just above the signature lines, the contract contained a notice to the effect that,
if the parties did not understand the contract, they should consult an attorney about
the contract because real estate agents cannot give legal advice. The contract also
contained a mediation provision that required “any dispute between Seller and Buyer
related to this contract which is not resolved through informal discussion” to be
submitted to mediation. Lastly, the contract contained a clause that provided as
follows: “This contract contains the entire agreement of the parties and cannot be
changed except by their written agreement” (emphasis added). Hodges signed the
contract, without the inclusion of the reservation of her royalty and mineral interest,
and returned it to Charland-Manske.

        3
         The contract was an unimproved property contract, Form No. 9-7, which was promulgated by the
Texas Real Estate Commission (TREC). The contract does not have an execution date on it, and there is
no reference in either McCall’s or Hodges’s affidavits as to who drafted the contract, who made the
handwritten changes, or when the parties signed the contract.
        4
         Hodges stated in her affidavit that Jacy Gates, another agent who also worked for Panian & Mash,
represented the Rosses.

                                                   3
       B. First Texas’s Role in the Transaction
        The contract contained terms that named First Texas as the escrow agent to
close the transaction. However, First Texas was not involved in the negotiation of
the contract and did not draft the contract. First Texas’s lawyers, who are part of the
law firm of Bradshaw & McCall, LLP, did not represent Hodges, and she was not a
client of First Texas. First Texas received the contract on January 22, 2010;5 the
contract did not contain a reservation of any royalty or mineral interest to Hodges.
By the time that First Texas received the contract, both the Rosses and Hodges had
signed it. The Rosses deposited an escrow payment of $2,000 with First Texas. The
record also indicated that one of the real estate agents sent First Texas a proposed
unexecuted amendment to the contract—to include a reservation of her royalty and
mineral interest—with a request to have it executed at closing.6
       C. The Closing
       McCall stated in his affidavit that, on the day of closing, Hodges contacted
First Texas’s office and told First Texas that she received a royalty payment from
the real property and that she wanted to reserve her royalty and mineral interest.
First Texas told her that the contract did not address her royalty and mineral interest
and that she should contact Mankse. Manske contacted First Texas that same day
and was told that the contract did not contain terms that addressed the reservation of
Hodges’s royalty and mineral interest. Hodges stated that Manske arrived at First
Texas’s office and spoke with McCall about the contract. Manske and Hodges then
left the office and went to Manske’s house to retrieve something. Afterward, both

       5
          There is no evidence in the record to indicate when Manske and Hodges received a signed copy
of the contract. There also is no evidence to indicate when the Rosses received their signed copy of the
contract.
       6
        The proposed amendment is not part of the record.

                                                   4
Manske and Hodges returned to First Texas’s office and met with McCall about the
contract.
        McCall indicated that Manske sent First Texas a proposed unexecuted
amendment to the contract, to include a reservation of royalty and mineral interest,
with a request to have it executed at closing. When Hodges attempted to have the
contract amended, by having the Rosses sign the amendment, the Rosses refused to
accept the change and refused to sign the amendment. The Rosses demanded that
the transaction close as outlined and agreed upon in the contract. Hodges initially
refused to sign a deed and complete the closing. But a short time later that day, she
signed a deed that had no reservation of her royalty and mineral interest. After the
deed was signed by Hodges, it was recorded.
        D. Hodges’s Allegations and Suit
        Hodges sued First Texas for fraud, negligence, breach of fiduciary duty,
breach of duty as a title company or escrow officer, deceptive trade practices, and
civil conspiracy.7 Hodges stated in her affidavit that she had lost “thousands of
dollars of mineral and/or royalty interests” because she was forced to sign the deed
or “go to jail.” Hodges further stated in her affidavit, which was attached to her
response to First Texas’s motion for summary judgment, that she only signed the
deed because First Texas’s lawyer, McCall, had told her at the closing that, if she
did not close the transaction, “the Rosses could sue [her] for Breach of Contract”
and that, “if [she] lost,” she “would ‘go to jail.’” She argues in her response that
First Texas had a duty to treat both sides “fairly” and be the “gate keeper to a fair

        7
          Appellant actually filed two lawsuits: Cause No. 48,078-A and 48,079-A, but the latter case is not
part of this appeal.

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deal for both sides.” Hodges asserts that the closing should have been delayed until
a clause that reserved her royalty and mineral interest was added to the contract.
        E. First Texas’s No-Evidence Motion for Summary Judgment and
           Hodges’s Response to the Motion
        First Texas moved for summary judgment on no-evidence grounds as to the
elements of (1) duty, (2) breach of any duty, (3) causation, and (4) damages for all
of Hodges’s claims.8 Hodges filed evidence9 with her response and asserted that
First Texas breached its duty to treat both parties “fairly.” Hodges argued that there
was a “mistake of fact” that required the contract to be modified to include the clause
that reserved her royalty and mineral interest. Hodges asserted that First Texas
refused to delay the closing to allow the error in the contract to be “rectified.”10
Hodges also argued that First Texas did not advise the buyers of the mistake in the
contract and also refused to properly advise her of the legal implications of not going
through with the closing. Hodges further alleged that, in McCall’s affidavit, McCall
addressed his conversation with the Rosses but failed to address his conversations
with Panian & Mash’s brokers. Thus, First Texas, according to Hodges, chose sides
and “sided” with the Rosses when it went through with the closing. Hodges also
alleged that First Texas made a material misrepresentation when its agent, McCall,

        8
         First Texas also moved for summary judgment on traditional grounds.
        9
         Hodges attached to her response to First Texas’s motion for summary judgment the following:
(1) her petition; (2) First Texas’s Special Exceptions and Answer; (3) First Texas’s Responses to Hodges’s
Request for Disclosures; and (4) her and her attorney’s affidavits. She also referenced the contract.
        10
          The odds that the dispute between the parties could have been “rectified” short of a lawsuit were
remote. As previously noted, the Rosses did not agree to a reservation of the royalty and mineral interest.
Furthermore, there is no evidence in the record that Hodges proposed or would have agreed to lower the
sales price to include this clause.

                                                    6
told Hodges that she would go to jail if she did not sign the deed. Hodges claimed
that First Texas engaged in fraud and deceptive trade practices.
      The trial court granted First Texas’s motion and made its order final when it
severed Hodges’s claims against First Texas into a separate cause number.11
                                II. Issues Presented
      Hodges asserts in two issues on appeal that the trial court erred when it granted
summary judgment in First Texas’s favor because First Texas was not entitled to
judgment as a matter of law and because there was more than a scintilla of evidence
to raise a genuine issue of material fact on her claims. We will first address First
Texas’s no-evidence motion for summary judgment.
                              III. Standard of Review
      A party that files a no-evidence motion for summary judgment asserts that
there is no evidence of one or more essential elements of a claim or defense on which
the adverse party would have the burden of proof. See TEX. R. CIV. P. 166a(i). The
adverse party then must respond with evidence to raise a genuine issue of material
fact on each of the challenged elements in the claim or defense. See id. With a no-
evidence motion, we review the evidence in the light most favorable to the
nonmovant, and we disregard all contrary evidence and inferences. King Ranch,
Inc. v. Chapman, 118 S.W.3d 742, 750–51 (Tex. 2003) (citing Merrell Dow Pharm.,
Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). As the court outlined in
King Ranch:
       A no evidence point will be sustained when (a) there is a complete
       absence of evidence of a vital fact, (b) the court is barred by rules of
       law or of evidence from giving weight to the only evidence offered to
       prove a vital fact, (c) the evidence offered to prove a vital fact is no

      11
        Cause No. 48,398-A.

                                           7
       more than a mere scintilla, or (d) the evidence conclusively establishes
       the opposite of the vital fact.

King Ranch, 118 S.W.3d at 751 (quoting Merrell Dow, 953 S.W.2d at 711). A no-
evidence summary judgment is essentially a pretrial directed verdict, and we apply
the same legal sufficiency standard when we review a no-evidence summary
judgment that we apply when we review a directed verdict. Id. at 750–51.
                                  IV. Analysis
      Where, as here, the trial court does not specify the ground or grounds on which
it relied in granting summary judgment, we must affirm the summary judgment if
any summary judgment ground advanced by the movant is meritorious. FM Props.
Operating Co. v. City of Austin, 22 S.W.3d 868, 872–73 (Tex. 2000); Carr v.
Brasher, 776 S.W.2d 567, 569 (Tex. 1989).
     A. Hodges’s Summary Judgment Evidence
     Hodges attached to her response (1) her petition, (2) First Texas’s Special
Exceptions and Answer, (3) First Texas’s Responses to Hodges’s Request for
Disclosures, and (4) her and her attorney’s affidavits. She also referenced the
contract. Normally, in cases of this nature, pleadings are not competent evidence
even if they are sworn or verified. Laidlaw Waste Sys. (Dallas), Inc. v. City of
Wilmer, 904 S.W.2d 656, 660 (Tex. 1995) (citing Hidalgo v. Surety Sav. & Loan
Ass’n, 462 S.W.2d 540, 545 (Tex. 1971)); City of Houston v. Clear Creek Basin
Auth., 589 S.W.2d 671, 678 (Tex. 1979). Hodges may not rely on her petition as
competent summary judgment evidence. We also note that First Texas’s responses
to Hodges’s request for disclosures and First Texas’s pleadings contain no
admissions. In addition, the affidavit of her attorney only addresses the issues of

                                          8
attorney’s fees. What remains of her summary judgment evidence is the contract
and her affidavit.
     B. First Texas’s No-Evidence Challenge to Causation
      Even if we assume, which we do not hold, that First Texas owed and breached
some duty to Hodges, under a fraud, negligence, breach of fiduciary duty, or breach
of a duty as an escrow agent theory, her claims fail because she has presented no
evidence to raise a genuine issue of material fact on the challenged element of
causation. See Hamilton v. Wilson, 249 S.W.3d 425, 426 (Tex. 2008) (trial court
must grant a no-evidence motion for summary judgment unless the respondent to the
motion produces summary judgment evidence raising a genuine issue of material
fact). Fraud requires proof of injury as a result of the false misrepresentation.
Herod v. Baptist Found. of Tex., 89 S.W.3d 689, 694 (Tex. App.—Eastland 2002,
no pet.). Negligence and breach of fiduciary duty also require proof of proximate
cause. See Greater Houston Transp. Co. v. Phillips, 801 S.W.2d 523, 525 (Tex.
1990) (negligence); Plotkin v. Joekel, 304 S.W.3d 455, 479 (Tex. App.—Houston
[1st Dist.] 2009, pet. denied) (breach of fiduciary duty). Proximate cause is generally
a question of fact for the jury, but proximate cause may be established as a matter of
law if the circumstances are such that reasonable minds could not arrive at a different
conclusion. Boyd v. Fuel Distribs., Inc., 795 S.W.2d 266, 272 (Tex. App.—Austin
1990, writ denied) (citing Mo. Pac. R.R. Co. v. Am. Statesman, 552 S.W.2d 99, 104–
05 (Tex. 1977)).
      The two elements of proximate cause are “foreseeability” and “cause in fact.”
IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc. v. Mason, 143 S.W.3d 794, 798
(Tex. 2004) (citing Travis v. City of Mesquite, 830 S.W.2d 94, 98 (Tex. 1992)).
“‘Foreseeability’ means that the actor, as a person of ordinary intelligence, should

                                           9
have anticipated the dangers that his negligent act created for others.” Travis, 830
S.W.2d at 98 (citing Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 549–50 (Tex.
1985); Mo. Pac. R.R. Co., 552 S.W.2d at 103). “Cause in fact” means that the act
or omission was a substantial factor in bringing about the injury, and without it harm
would not have occurred. Id. (citing Kerby v. Abilene Christian Coll., 503 S.W.2d
526, 528 (Tex. 1973)); see W. Invs., Inc. v. Urena, 162 S.W.3d 547, 551 (Tex. 2005)
(citing Marathon Corp. v. Pitzner, 106 S.W.3d 724, 727 (Tex. 2003)). Cause in fact
must be proved by evidence of probative force and not by mere conjecture, guess,
or speculation. Leitch v. Hornsby, 935 S.W.2d 114, 119 (Tex. 1996).
      Despite Hodges’s execution of a contract that did not contain a provision that
she wanted, she contends that First Title is liable for her subsequent execution of a
deed that contained the same terms as those expressed in the contract she executed.
We conclude that First Title’s actions were not a “cause in fact” of her alleged
damages for loss of royalty payments. Hodges’s assertion that Charland-Manske
said she would amend the contract after Hodges signed it, even if true, fails to raise
a genuine issue of material fact that First Texas did anything, or failed to do
something, that was a “cause in fact” of her alleged damages. Hodges signed the
contract before First Texas ever became involved in the transaction. Once Hodges
signed the contract, it could not be changed without the written agreement of the
Rosses, as provided in the express terms of the contract. Had Hodges simply added
the reservation clause to the contract prior to signing it or refused to sign the contract
until the reservation clause was added to it, she would not have suffered her claimed
damages of the loss of her royalty and mineral interest. Furthermore, had Hodges
consulted an attorney before she signed the contract, as it expressly urged her to do,

                                           10
she would not have suffered her claimed damages of the loss of her royalty and
mineral interest.
      Even if we assume, without deciding, that First Texas knew it had made or
had recklessly made a material misrepresentation of fact, upon which Hodges relied,
or that it breached a duty, which we do not hold, Hodges has not presented any
competent summary judgment evidence to raise a genuine issue of material fact as
to how First Texas’s actions or statements were a “cause in fact” of the loss of her
royalty and mineral interest. We note that the case before us does not involve
Hodges’s claims against the real estate agent, only those against First Texas. We
hold that Hodges has failed to raise a genuine issue of material fact as to proximate
causation for her fraud, negligence, and breach of fiduciary duty claims against First
Texas.
     C. Hodges’s DTPA Claims
      Hodges alleged that First Texas engaged in deceptive trade practices under
Section 17.46(b)(5), (12), and (24) and engaged in an unconscionable course of
action under Section 17.50(a)(1)(B)(3) and that those acts were a producing cause
of her damages. TEX. BUS. & COM. CODE ANN. §§ 17.45(5), 17.46, 17.50(a) (West
2011). A producing or contributing cause is equivalent to the “cause in fact” element
of proximate cause. Prudential Ins. Co. of Am. v. Jefferson Assocs., 896 S.W.2d
156, 161 (Tex. 1995); Title Agency of Tex., Inc. v. Arellano, 835 S.W.2d 750, 754–
55 (Tex. App.—Houston [14th Dist.] 1992, writ denied). Producing cause does not
include the element of foreseeability embraced within the standard of proximate
cause. Riojas v. Lone Star Gas Co., 637 S.W.2d 956, 959 (Tex. App.—Fort Worth
1982, writ ref’d n.r.e.). We again note that the case before us does not involve any
DTPA claims by Hodges against the real estate agent, only those against First Texas.

                                         11
Because we have previously held that Hodges failed to adduce competent summary
judgment evidence that would raise a genuine issue of material fact as to how First
Texas’s actions or statements were a “cause in fact” of her alleged damages, we also
hold that her DTPA claims against First Texas fail.
     D. Hodges’s Civil Conspiracy Claim
      Hodges alleged that First Texas, Manske, Charland-Manske, Gates, and
Panian & Mash were engaged in a civil conspiracy to get Hodges to close a
transaction that did not include the reservation of her royalty and mineral interest in
her tract of real property. To prevail on a claim for civil conspiracy, a plaintiff must
show that two or more persons sought to accomplish an unlawful purpose or sought
to accomplish a lawful purpose by unlawful means that proximately caused damages
to the plaintiff. Massey v. Armco Steel Co., 652 S.W.2d 932, 934 (Tex. 1983). Civil
conspiracy is a derivative tort and is dependent on participation in an underlying
statutory violation or tort, other than negligence. Chu v. Hong, 249 S.W.3d 441,
444–47 (Tex. 2008); Tri v. J.T.T., 162 S.W.3d 552, 557 (Tex. 2005); Tilton v.
Marshall, 925 S.W.2d 672, 681 (Tex. 1996). Again, Hodges’s claims against the
real estate agent are not before us, only those against First Texas are before us.
Because Hodges has failed to raise a genuine issue of material fact as to proximate
causation for her claims against First Texas, as well as producing cause for her
DTPA claim against First Texas, her conspiracy claim against First Texas also fails.
                                  V. Conclusion
      We have reviewed the record and hold that the trial court did not err if it
granted First Texas’s no-evidence motion for summary judgment on the causation
issue on each of Hodges’s claims. We overrule Hodges’s issue that pertains to the
no-evidence motion for summary judgment. We do not reach her issue that First

                                          12
Texas failed to prove that it was entitled to summary judgment as a matter of law on
the grounds outlined in its traditional motion.
                            VI. This Court’s Ruling
      We affirm the order of the trial court.

                                                MIKE WILLSON
                                                JUSTICE

August 31, 2015
Panel consists of: Wright, C.J.,
Willson, J., and Bailey, J.

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