Court Opinion

ID: 6327627
Source: CourtListenerOpinion
Date Created: 2022-03-29 12:12:01.847871+00
Date Added: 2024-06-11T09:22:28.452182
License: Public Domain

Fourth Court of Appeals
                                       San Antonio, Texas
                                   MEMORANDUM OPINION

                                          No. 04-21-00048-CV

                                    FDP, LP and Larry Friesenhahn,
                                             Appellants

                                                    v.

                                    Robert MARX and Debbie Marx,
                                             Appellees

                       From the 218th Judicial District Court, Wilson County, Texas
                                   Trial Court No. 17-07-0416-CVW
                           Honorable Polly Jackson Spencer, Judge Presiding 1

Opinion by:         Liza A. Rodriguez, Justice

Sitting:            Luz Elena D. Chapa, Justice
                    Beth Watkins, Justice
                    Liza A. Rodriguez, Justice

Delivered and Filed: March 23, 2022

AFFIRMED

           FDP, LP and Larry Friesenhahn (collectively “FDP”) appeal from the trial court’s

judgment in favor of Robert and Debbie Marx. We affirm.

           The factual background of the dispute between FDP and the Marxes is detailed in our

previous opinion, Marx v. FDP, LP, 474 S.W.3d 368 (Tex. App.—San Antonio 2015, pet. denied).

After mandate issued in the previous appeal, the Marxes executed a Warranty Deed with Vendor’s

1
    Sitting by assignment
                                                                                               04-21-00048-CV

Lien, which contained an option to purchase the Marxes’ homestead property. The deed, which

conveyed 417.355 acres to FDP, contains the following option provision:

        Option: Grantor [the Marxes] hereby grants to Grantee [FDP] the exclusive option
        to purchase the Homestead Property, described on the attached Exhibit “C,” for the
        price of $500,000.00, for the period of 120 days from the earlier of: (i) written
        notice from the Grantor; (ii) the death of the last surviving Grantor; (iii) or the
        expiration of eight (8) years [from] the effective date of this Warranty Deed with
        Vendor’s Lien.

Thereafter, FDP sued the Marxes for breach of contract, 2 alleging that Robert Marx had removed

fixtures from the Homestead Property and had announced that he intended to remove additional

fixtures from the property. FDP alleged that it sought “an order of specific performance ordering

[the Marxes] to perform the agreements made with [FDP], including but not limited to preserving

the property [that] is the subject of the exclusive option agreement, and to maintain security over

the premises.” FDP further prayed for permanent injunctive relief over “any farm and ranch

improvements or fixtures on or about” the Homestead Property. In response to the lawsuit, the

Marxes filed a counterclaim, seeking declaratory relief under the Texas Uniform Declaratory

Judgments Act. They further alleged (1) FDP had no standing to bring its claims, and (2) the

doctrine of merger by deed barred FDP’s suit.

        The Marxes then moved for partial summary judgment, arguing first that the doctrine of

merger by deed barred FDP’s breach of contract claim because the “Pre-Judgment Agreements” 3

that were entered into before the first lawsuit and appeal were merged into the subsequent warranty

deed filed by the Marxes. The Marxes further argued that because an option provision in the

warranty deed does not give FDP a legal or equitable interest in the Homestead Property, FDP

2
 Larry Friesenhahn also sued Robert Marx for assault and fraud but nonsuited those claims before the jury trial.
3
 These agreements included the original “Farm and Ranch Contract,” the “Mediated Settlement Agreement,” the
arbitration ruling and confirmation of arbitration award.

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                                                                                      04-21-00048-CV

lacked standing to bring its breach of contract claim. After considering the Marxes’ motion, the

trial court granted partial summary judgment in favor of the Marxes and decreed the following:

       1. That [FDP] take nothing on [its] claims for damages or injunctive relief based upon
          any breach of the Pre-Judgment Agreements, as that term is defined [in] the [Marxes’s
          motion for partial summary judgment], as such claims are barred by the [d]octrine of
          [m]erger.

       2. That [FDP] take nothing on [its] claims for monetary damages based upon damage to
          the personal property and/or real property to be conveyed, if and when [its] option is
          exercised, as [FDP] do[es] not have a legal or equitable interest in the [Marxes’]
          property sufficient to provide standing to recover monetary damages for its loss.

       3. That [FDP is] not entitled to injunctive relief to preserve the personal property and/or
          real property to be conveyed, if and when [its] option is exercised, as [FDP has] not
          legal or equitable interest in that property sufficient to provide standing to obtain
          injunctive relief for its protection.

After the trial court granted partial summary judgment, the remaining issue of attorney’s fees was

decided by a jury. The trial court then signed a final judgment that incorporated its partial summary

judgment and awarded the Marxes attorney’s fees pursuant to section 37.009 of the Texas Civil

Practice and Remedies Code in the amount of $41,709.38 for trial, with additional attorney’s fees

to be paid if FDP appealed.

       On appeal, FDP argues the trial court erroneously granted summary judgment in favor of

the Marxes. According to FDP, “[a]s a matter of law, the Marxes do not have the right to destroy

or remove the real property covered by the option, and FDP has standing to sue for the destruction

and threatened destruction of the Homestead Property.” In support of this assertion, FDP first

argues the holder of an option to purchase property has “the right to compel a sale of property on

the stated terms before the expiration of the option.” Riley v. Campeau Homes (Tex.), Inc., 808

S.W.2d 184, 188 (Tex. App.—Houston [14th Dist.] 1991, writ dism’d pursuant to agreement).

Second, FDP argues “[a]n option to purchase land creates an interest in land.” Madera Prod. Co.

v. Atlantic Richfield Co., 107 S.W.3d 652, 600 (Tex. App.—Texarkana 2003, pet. denied in part,

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pet. dism’d in part). Third, FDP argues that an optionor fails to perform his obligations under the

deed if his actions prevent the completion of the sale. See Colligan v. Smith, 366 S.W.2d 816, 820

(Tex. Civ. App.—Fort Worth 1963, writ ref’d n.r.e.).

         We agree with the general proposition that FDP, at the time the option period is triggered,

may compel the Marxes to sell the Homestead Property as stated in the option provision in the

warranty deed before expiration of the option period. See Riley, 808 S.W.3d at 188. We further

agree that “[o]ne who owns an option to purchase real property most certainly has an ‘interest’ in

specific land not possessed by members of society in general.” Hitchcock Props., Inc. v. Levering,

776 S.W.2d 236, 238 (Tex. App.—Houston [1st Dist.] 1989, writ denied). However, as explained

by the supreme court, “[a]n option agreement does not pass title or convey an interest in property.”

N. Shore Energy v. Harkins, 501 S.W.3d 598, 605 (Tex. 2016) (per curiam) (emphasis added).

Finally, we agree with the “general rule that an optionor who has given the right to purchase

property within a specified time may not commit any act or omit to perform any duty calculated

to cause the optionee any delay in exercising the right.” Colligan, 366 S.W.2d at 820. 4 However,

these general statements of law cited by FDP simply do not support FDP’s assertion that the

Marxes owe a duty to not remove or destroy any fixtures on the Homestead Property before the

option period is triggered. We note that FDP has not cited any caselaw supporting this specific

assertion.

4
 For example, in Elliott v. Lewis, No. 05-91-01216, 1994 WL 709333, at *1 (Tex. App.—Dallas 1994, no writ), the
parties executed a residential lease agreement with an option to purchase the property after the one-year lease
terminated. At the end of the lease and prior to the option period ending, the optionor wrote a letter to the optionee’s
lenders that “troubled both lenders,” causing the lenders to worry the optionor was no longer willing to sell her
property. Id. at *2. The optionor then told the optionee that she was still willing to sell, but that she would not sign
anything to reassure the lenders, resulting in the optionee failing to secure financing until after the option period ended.
Id. The optionee then sued for specific performance. Id. at *3. The court of appeals held that the optionee’s failure to
tender the purchase price during the option period was excused because of the optionor’s actions. Id. at *5. The court
noted that an optionor “may ‘not commit any act or omit to perform any duty’ that would cause the optionee not to
exercise the option.” Id. (quoting Colligan, 366 S.W.2d at 820).

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                                                                                       04-21-00048-CV

       “An option contract has two components: (1) an underlying contract that is not binding

until accepted, and (2) a covenant to hold open to the optionee the opportunity to accept.” N. Shore

Energy, 501 S.W.3d at 606 (quoting Faucette v. Chantos, 322 S.W.3d 901, 908 (Tex. App.—

Houston [14th Dist.] 2010, no pet.)). An option contract involving real estate typically gives the

optionee the right to elect to purchase the property at stated terms within a specified period of time,

but with no obligation to do so. Lefevere v. Sears, 629 S.W.2d 768, 770 (Tex. Civ. App.—El Paso

1981, no writ). As such, an option contract is considered unilateral in nature and does not become

a binding, bilateral contract unless and until the prospective buyer exercises the option. Colligan,

366 S.W.2d at 820; see N. Shore Energy, 501 S.W.3d at 606 (explaining that option contract is not

binding until accepted). Because it is not binding until accepted, an option contract does not pass

title or convey any interest in the property at the time it is formed. N. Shore Energy, 501 S.W.3d

at 605; Knox v. Brown, 277 S.W. 91, 94 (Tex. [Comm’n Op.] 1925). It merely gives the optionee

the option to purchase property or execute a lease within a certain time period. Knox, 277 S.W. at

94; Faucette, 322 S.W.3d at 907.

       In applying these legal principles, we conclude the option provision in the warranty deed

does not grant possession or title of the Homestead Property to FDP. The option provision merely

gives FDP the option to purchase the Homestead Property at a certain time. See N. Shore Energy,

501 S.W.3d at 606. While FDP’s option to purchase the Homestead Property gives FDP “an

‘interest’ in [the Homestead Property] not possessed by members of society in general,” Hitchcock,

776 S.W.2d at 23, it does “not pass title or convey an interest in property,” N. Shore Energy, 501

S.W.3d at 605 (emphasis added). We note that FDP urges us to analyze an option contract in the

same manner as a life estate, where a life tenant has the obligation to upkeep and repair the real

property and owes a duty not to destroy the property. See Knopf v. Gray, 545 S.W.3d 542, 546

(Tex. 2018). However, when a person grants another a life estate in his property, he retains a

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                                                                                     04-21-00048-CV

reversionary interest in the property. See El Dorado Land Co. v. City of McKinney, 395 S.W.3d

798, 802 n.7 (Tex. 2013). In contrast, an option contract does not pass title or convey an interest

in property. N. Shore Energy, 501 S.W.3d at 605. Thus, the duties a life tenant owes are not

comparable to the facts presented here.

       We find no support for FDP’s assertion that the Marxes owe any duty to not remove fixtures

until the option period is triggered. Accordingly, we conclude FDP has no standing to bring its suit

against the Marxes. See N. Shore Energy, 501 S.W.3d at 606 (holding that “because an option

contract does not grant possession or title to property, even if the Option Agreement had granted

North Shore the exclusive option to explore the land, North Shore would not have standing to sue

Dynamic for trespass because North Shore does not have a possessory interest in the land via the

Option Agreement”).

                                          CONCLUSION

       Having determined that FDP has no standing as a matter of law to bring its lawsuit against

the Marxes, we need not consider the other independent ground in support of the summary

judgment, the doctrine of merger. Further, we need not consider FDP’s alternative issue regarding

the award of attorney’s fees. We affirm the trial court’s judgment.

                                                 Liza A. Rodriguez, Justice

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