Arlington Home, Inc. v. Peak Environmental Consultants, Inc.

361 S.W.3d 773, 2012 WL 639716, 2012 Tex. App. LEXIS 1506
CourtCourt of Appeals of Texas
DecidedFebruary 28, 2012
Docket14-10-01000-CV
StatusPublished
Cited by18 cases

This text of 361 S.W.3d 773 (Arlington Home, Inc. v. Peak Environmental Consultants, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Arlington Home, Inc. v. Peak Environmental Consultants, Inc., 361 S.W.3d 773, 2012 WL 639716, 2012 Tex. App. LEXIS 1506 (Tex. Ct. App. 2012).

Opinions

OPINION

ADELE HEDGES, Chief Justice.

In this tort case, appellant Arlington Home, Inc. challenges the trial court’s entry of a judgment notwithstanding the verdict (“JNOV”) in favor of appellees Peak Environmental Consultants, Inc. d/b/a Live Oak Environmental Consultants (“Live Oak”) and Sandion, Ltd. d/b/a Cold-well Banker United Realtors (“Coldwell Banker”). In two issues, Arlington challenges the trial court’s grant of the JNOV and its award of attorney’s fees to Live Oak and Coldwell Banker. Although we affirm the trial court’s JNOV, we reverse and remand on the attorney’s fees issues.

BACKGROUND

Naela Kaki, a Saudi Arabian woman who travels to Houston to receive cancer treatment, signed an earnest money contract (the “contract”) on August 26, 2005, for purchase of a $5.35 million house near Memorial Park in Houston. She then assigned her rights under the contract to Arlington Home, Inc., a corporation specifically created to purchase and own the residence. The president of Arlington was Sammy Haress. When Kaki and her family had to return overseas, Coldwell Banker agent David Young supervised the process of obtaining inspections for the home before closing. Because an engineering report had revealed mold and water damage to the house in the past, Arlington requested- a mold inspection. On September 8, 2005, Young contacted Gary Martens, a licensed mold assessment consultant who operated Live Oak. The assessment needed to be done quickly because the contract option period expired September 13, 2005. [776]*776Arlington would owe an additional $250,000 under the contract if closing did not occur timely. Martens provided a proposal in which he stated that Live Oak would perform the following tasks as part of his inspection:

Live Oak will perform a visual inspection of the interior areas of the structure for the presence of mold. If visible evidence is identified, Live Oak will collect a tape sample for submission to the laboratory for analysis.
In addition, Live Oak will collect up to ten air samples: nine samples will be collected in the interior of the residence; a single air sample will be collected outdoors for comparison to the indoor results. Following collection of the samples, they will be delivered to the laboratory for analysis. Rush turnaround time for laboratory analysis is approximately one day.
Following the receipt of the laboratory analysis, Live Oak will issue a report which contains the sample results and will include any recommendations for remediation, further testing, etc.
The estimated cost for the inspection and laboratory testing services as indicated above is estimated not to exceed $1400.00 which includes the inspection, all sample media and equipment, 10 air samples and analysis. If additional samples are required/requested, the additional cost of $110.00 per sample will apply. Live Oak will not exceed the number of samples proposed without prior authorization from the client. If less samples are collected, we will adjust the price accordingly.
If this proposal meets with your approval, please fax us a signed copy of this authorization letter. Live Oak will schedule sampling activities immediately upon receipt of your authorization. At this time, we have scheduled the sampling event for Friday morning, September 9, 2005 at 9:15 AM. Payment is due upon completion of the sampling event. Upon our receipt of the laboratory results, we will contact you by telephone to give a verbal report of the mold inspection. A written report, including laboratory results will follow in a day or two. The final report for this project will be forwarded to the address below unless otherwise instructed.

Martens was not informed of the size of the home, or that prior inspections had revealed mold and water damage. Martens initially performed a visual inspection of much of the property. While there, he discovered that the engineering report had recommended a mold inspection and had described specific instances of water intrusion into several areas of the home. He did not change the nature of his inspection based on this newly discovered information. During his inspection, he was unable to gain access to a few areas of the home, a fact not disclosed to Young or Arlington. He took seven air samples from inside the home and one from outside the home. After receiving the results of his samples taken during the inspection, Martens emailed Young:

Just received the lab results for the subject property. It passed. No Sta-chybotrys (“toxic black mold”) or Chae-tomium spores; these are the primary indicators of a moisture problem.
The interpretation of the lab data coupled with the observations made at the time of the inspection indicate no significant mold amplification expected to pose a threat to the subject property or its occupants.
A complete written report, with copies of the laboratory results will be issued,

(emphasis added).

Young forwarded this information to Haress. At the time that Haress received [777]*777this information, Arlington could have abandoned the contract without penalty and had its earnest money returned. Arlington closed on the property on October 17, after a delay due to Hurricane Rita. During remodeling of the home in November, a significant mold problem was discovered. Arlington spent $539,594.84 to remediate the mold in the home.

Arlington sued Coldwell Banker and Live Oak for negligence, violations of the DTPA, and negligent misrepresentation. Arlington also sued Coldwell Banker for breach of fiduciary duty and sought attorney’s fees from both Coldwell Banker and Live Oak under the DTPA and paragraph 17 of the contract. Arlington sought actual and consequential damages. Live Oak counterclaimed for breach of contract based on its mold inspection proposal.

After an eight-day jury trial in October and November 2009, the jury found Live Oak and Arlington both negligent, with Live Oak bearing 60% of the responsibility. The jury further found that Live Oak had engaged in false, misleading, or deceptive acts, that Arlington had relied on these acts, and that these acts were a producing cause of Arlington’s damages (the “DTPA claim”). The jury also found that Live Oak had negligently misrepresented information to Arlington, upon which Arlington justifiably relied, which negligent misrepresentation proximately caused injury to Arlington. The jury found that Coldwell Banker had not breached its fiduciary duty to Arlington and made negative findings on the questions of Coldwell Banker’s negligence, negligent misrepresentation and violations of the DTPA. It determined that the reasonable and necessary costs of investigating, remediating, and repairing the mold problems with the property was $539,594.84. The jury found reasonable and necessary attorney’s fees for Arlington to be $300,000; for Coldwell Banker to be $150,000; and for Live Oak, $150,000. Finally, the jury determined that Arlington had breached its contract with Live Oak by failing to pay Live Oak’s fee for the mold inspection.

Live Oak filed a motion for JNOV in April 2010, to which Arlington responded. The trial court signed a final judgment on October 4, 2010, granting Live Oak’s JNOV without stating the basis for its decision and ordering that Arlington take nothing.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In re General Motors LLC Ignition Switch Litigation
257 F. Supp. 3d 372 (S.D. New York, 2017)
MEMC Pasadena, Inc. v. Riddle Power, LLC
472 S.W.3d 379 (Court of Appeals of Texas, 2015)
Kiper v. BAC Home Loans Servicing, LP
884 F. Supp. 2d 561 (S.D. Texas, 2012)
Arlington Home, Inc. v. Peak Environmental Consultants, Inc.
361 S.W.3d 773 (Court of Appeals of Texas, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
361 S.W.3d 773, 2012 WL 639716, 2012 Tex. App. LEXIS 1506, Counsel Stack Legal Research, https://law.counselstack.com/opinion/arlington-home-inc-v-peak-environmental-consultants-inc-texapp-2012.