Court Opinion

ID: 3130414
Source: CourtListenerOpinion
Date Created: 2015-10-16 16:46:08.759873+00
Date Added: 2024-06-11T12:47:02.451200
License: Public Domain

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                                               OPINION

                                           No. 04-09-00681-CV

                              TEXAS REAL ESTATE COMMISSION,
                                          Appellant

                                                     v.

                              Gilbert RODRIGUEZ and Alice Rodriguez,
                                            Appellees

                      From the 218th Judicial District Court, Wilson County, Texas
                                  Trial Court No. 01-09-338-CVW-A
                                Honorable Stella Saxon, Judge Presiding

Opinion by:       Sandee Bryan Marion, Justice

Sitting:          Sandee Bryan Marion, Justice
                  Phylis J. Speedlin, Justice
                  Marialyn Barnard, Justice

Delivered and Filed: June 16, 2010

AFFIRMED

           This is an appeal from the trial court’s order allowing appellees recovery from the Real Estate

Recovery Trust Account (“the RTA”), which is maintained by the Texas Real Estate Commission

(“the TREC”). We affirm.

                                            BACKGROUND

           The appellees, Gilbert and Alice Rodriguez, owned a plot of land on which they wanted to

build a house. In 2000, the Rodriguezes met Carol Kilby, who introduced herself as a real estate
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agent. Ms. Rodriguez stated she and her husband wanted a real estate agent because they knew

nothing about obtaining funding for the house, did not know any builders, and did not know “the

process of closing.” Kilby told Ms. Rodriguez she knew about all of these issues and would help

them. Kilby arranged for Chavez Homes to act as builder, negotiated the price to build the house,

arranged for the financing, and handled the closing. Ms. Rodriguez said she and her husband “hardly

ever had any contact with the builder.”

         The Rodriguezes later sued Kilby alleging she knew the builder was inexperienced, the

plumbing subcontractors were not licensed, and the house was not built in accordance with plans and

specs. The Rodriguezes obtained a judgment against Kilby, and thereafter, they sought recovery

from the RTA. TREC contested the claim, but after a hearing the trial court found in favor of the

Rodriguezes. This appeal by TREC ensued.

                                                    DISCUSSION

         The Real Estate License Act (“RELA”) provides, as applicable here, that use of the RTA “is

limited to an act that constitutes a violation of Section [15(a)(6)] of this Act if the judgment debtor

was at the time of the violation a licensed real estate broker . . . .” Former TEX . CIV . STAT . art.

6573a, § 8(a).1 Section 15(a)(6) is a laundry list of prohibited actions. Thus, the RTA was created

to protect the general public, that is, the clients of those engaged in the real estate business. Burnett

v. Foley, 660 S.W.2d 884, 887 (Tex. App.—Fort Worth 1983, no writ). Accordingly, the RTA

compensates persons who are unable to collect from a licensed real estate broker for judgment

         1
          … The Real Estate License Act (“RELA”) was the governing law at the time of the underlying lawsuit. RELA
has since been repealed and is now codified in the Texas Occupation Code. See former Texas Revised Civil Statute
article 6573a, repealed by Acts of 2001, 77th Leg., R.S., ch. 1421, § 13(a); T EX . O CC . C OD E A N N . §§ 1101.001 - .658
(Vernon 2004 & Supp. 2009). The two versions of the statute are substantially similar.

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awards based on specified types of wrongdoing. The Rodriguezes’ theory of recovery from the RTA

required them to prove that they: (1) obtained a judgment against Kilby based on facts showing Kilby

engaged in an act permitting recovery; (2) attempted execution on the judgment, which was returned

nulla bona; (3) perfected a judgment lien and filed, in the court that rendered judgment, a claim for

reimbursement from the RTA; and (4) at a hearing on this claim for reimbursement, showed that the

judgment was based on facts establishing fraud or misrepresentation. See former TEX . CIV . STAT .

art. 6573a, § 8(e); see also Wilson v. Bloys, 169 S.W.3d 364, 370 (Tex. App.—Austin 2005, pet.

denied). At trial and on appeal, TREC does not dispute that Kilby is a licensed real estate broker,

that she acted dishonestly, and that the Rodriguezes satisfied the second, third, and fourth elements.

Instead, at trial and on appeal, TREC contests the first element by arguing the Rodriguezes did not

establish Kilby acted as their real estate broker in exchange for a commission or other valuable

consideration, or with the expectation of receiving a commission or other valuable consideration.

We disagree.

           RELA defines a “real estate broker” as a person who takes certain actions in relation to “real

estate”:

           [A real estate broker is] a person who, for another person and for a fee, commission,
           or other valuable consideration, or with the intention or in the expectation or on the
           promise of receiving or collecting a fee, commission, or other valuable consideration
           from another person:

           (A) sells, exchanges, purchases, rents, or leases real estate;
           (B) offers to sell, exchange, purchase, rent, or lease real estate;
           (C) negotiates or attempts to negotiate the listing, sale, exchange, purchase, rental,
           or leasing of real estate;
           (D) lists or offers or attempts or agrees to list real estate for sale, rental, lease,
           exchange, or trade;
                                   ...

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        (H) aids, attempts, or offers to aid in locating or obtaining for purchase, rent, or lease
        any real estate; . . . .

Former TEX . CIV . STAT . art. 6573a, § 2(2).

        RELA defines “real estate” as “a leasehold, as well as any other interest or estate in land,

whether corporeal, incorporeal, freehold, or nonfreehold, and whether the real estate is situated in

this state or elsewhere.” Id. § 2(1). The phrase “real property” is expansively defined to include

both land and usually whatever is erected or growing upon or affixed to the land. San Antonio Area

Found. v. Lang, 35 S.W.3d 636, 640 (Tex. 2000); see also City of San Antonio v. Estrada, 219
S.W.3d 28, 32 n.4 (Tex. App.—San Antonio 2006, no pet.) (in suit under Tort Claims Act, holding

that fire pole and fire station both considered real property); TEX . TAX CODE ANN . § 1.04(2)(A), (B),

(3)(A) (Vernon 2008) (defining “real property” to include, not only land, but also “an improvement,”

which is defined to include “a building [or] structure . . . .”).

        The fact that the Rodriguezes’ house had not yet been built on the land at the time they

engaged Kilby’s services does not alter the nature of Kilby’s actions. Kilby’s actions “aided . . . in

locating or obtaining for purchase . . . real estate.” Therefore, we conclude Kilby’s actions were

those of a real estate broker.

        TREC next argues Kilby never provided any service to the Rodriguezes in exchange for or

with the expectation of receiving a commission or other valuable consideration. Again, we disagree.

Ms. Rodriguez stated Kilby did not tell her about her compensation, but she knew Kilby would be

compensated by Chavez Homes. In addition to Ms. Rodriguez’s live testimony, a portion of Kilby’s

deposition was read into evidence as follows (questions omitted):

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                                                                                      04-09-00681-CV

               . . . Chavez Homes was the builder. I mean, I was the gopher, do you know,
       put the deal together, everything, but I wasn’t the builder. . . . .
               I officed with [Mr. Chavez] and that was the deal. I mean, honestly, if you
       want to say what did I get, I didn’t get money, but what I got was help from him on
       his account. I — I didn’t have much money and I didn’t have a lumber account for
       my building so I didn’t have any money for the lumber, you know, I couldn’t call the
       lumber company and order something. So Mr. Chavez had a lumber account. He
       had good credit and he had a lumber account so I used his lumber account. So if you
       want to say I got paid, maybe I did get paid that way.

       On appeal, TREC characterizes the lumber account as “simply an after-the-fact ‘perk’.”

However, the Revisor’s Note following Texas Occupation Code section 1101.002 states that

“‘consideration’ means something of value.” TEX . OCC . CODE § 1101.002, revisor’s note (3)

(Vernon 2004). There is no dispute the appellees did not pay Kilby any consideration, but neither

the RELA nor the Occupation Code require that any commission or consideration received be from

the individual on whose behalf the broker acts. See Canada v. Kearns, 624 S.W.2d 755, 756 (Tex.

Civ. App.—Beaumont 1981, no writ) (although salesperson acting under a broker did not receive

a commission from buyers, “[t]he house was advertised, listed, and sold through defendant’s agency,

which undoubtedly was motivated by the hope of receiving “‘other valuable consideration.’”). In

fact, neither the RELA nor the Occupation Code require that the broker actually receive any

commission or other consideration; an expectation of a commission or other consideration is

sufficient. We therefore conclude Kilby’s actions on behalf of the Rodriguezes were actions taken

“with the intention or in the expectation or on the promise of receiving or collecting . . . valuable

consideration.” Former TEX . CIV . STAT . art. 6573a, § 2(2).

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                                                                                     04-09-00681-CV

                                         CONCLUSION

       We conclude Kilby acted as a real estate broker with the intention or in the expectation of

receiving valuable consideration. Therefore, we overrule TREC’s issue on appeal and affirm the trial

court’s judgment.

                                                      Sandee Bryan Marion, Justice

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