ECC Parkway Joint Venture v. Baldwin

765 S.W.2d 504, 1989 Tex. App. LEXIS 479, 1989 WL 21916
CourtCourt of Appeals of Texas
DecidedJanuary 18, 1989
Docket05-87-00060-CV
StatusPublished
Cited by48 cases

This text of 765 S.W.2d 504 (ECC Parkway Joint Venture v. Baldwin) 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
ECC Parkway Joint Venture v. Baldwin, 765 S.W.2d 504, 1989 Tex. App. LEXIS 479, 1989 WL 21916 (Tex. Ct. App. 1989).

Opinion

ENOCH, Chief Justice.

ECC Parkway Joint Venture complains that it was sold a tract of raw land without being told that the property was subject to a prior deed restriction limiting to thirty feet the height of any building constructed on the property. From this simple seed has sprung a veritable wilderness of litigation. ECC first sued its title insurer, Title Insurance Company of Minnesota, to recover under its title policy, and was paid a sum *506 of money in settlement of that action. Now in this action ECC has sued the seller, Peter W. Baldwin, d/b/a The Baldwin Company, and a broker, Duvall-Giles Company, Inc., for fraud, negligent misrepresentation, and violations of the Texas Deceptive Trade Practices Act 2 , alleging that Baldwin and Duvall-Giles failed to disclose the existence of the height restriction and represented that the restriction did not exist when they knew it did. ECC has also sued Duvall-Giles for breach of fiduciary duty. Baldwin, in turn, has sued Duvall-Giles and its agent, Frank W. Harrison III, for contribution and indemnity. Both Baldwin and Duvall-Giles have also sued Minnesota Title, its agent, American Title Company of Dallas, and American Title’s employee, William R. Fox, for contribution and indemnity. The trial court granted motions for summary judgment dismissing all these claims, and severed them from the claims remaining in the case, mostly for attorneys fees. ECC, Baldwin and Duvall-Giles appeal.

We conclude that the trial court was correct in granting the motions for summary judgment in favor of Minnesota Title, American Title, and Fox. However, the trial court erred in granting the balance of the motions for summary judgment. We hold, among other things, that:

—ECC’s constructive knowledge of the height restriction from the deed records is no defense to ECC’s claims against Baldwin and Duvall-Giles;
—ECC is not precluded from recovering on its claims against Baldwin and Du-vall-Giles by a provision in the contract of sale calling for title insurance;
—ECC’s claims against Baldwin and Du-vall-Giles are not barred by the doctrine of merger;
—genuine issues of material fact subsist precluding summary judgment against ECC; and
—Baldwin and Duvall-Giles have no action for contribution and indemnity against the title companies who insured ECC’s title because ECC has no action against such title companies for negligent misrepresentation.

Accordingly, we affirm the judgment of the trial court dismissing all claims against Minnesota Title, American Title and Fox, and in all other respects, we reverse the judgment and remand the case for further proceedings.

I

Before turning to the parties’ arguments, we first set out the factual background of the case, which is not especially complex, and the procedural background, which is more so.

A

The summary judgment record discloses the following material facts which, except as indicated, are undisputed.

Peter W. Baldwin, a real estate broker doing business as The Baldwin Company, acquired the 2.264-acre tract of raw land which is the subject of this case, by a deed, duly recorded, which included the following restrictive covenant:

This Deed is executed, and accepted subject to the following restriction, which restriction shall be a covenant running with the land:
No building over thirty (30) feet in height shall be constructed, erected or placed on the property described and conveyed herein.

To help sell the property, Baldwin agent John Aldrich enlisted the aid of Frank Harrison, a real estate salesman associated with Duvall-Giles Company, Inc., real estate brokers. Having shown other properties in the same area to ECC Parkway Joint Venture, Harrison presented Baldwin’s property to ECC.

Eventually, ECC agreed to buy the property and executed a contract, also signed by Harrison and Aldrich, which provided that Baldwin would convey to ECC “good and marketable title in fee simple to all of the property, free and clear of any and all liens, encumbrances, conditions, easements, assessments and restrictions,” with certain *507 exceptions immaterial to this case. The contract also contained the following provision relating to title insurance:

Within thirty (30) days from the date hereof, Seller agrees, at his sole expense, to cause to be furnished to Purchaser a current title commitment for an Owner’s Title Insurance Policy ... setting forth the state of all title of the property and all exceptions, including easements, restrictions, rights of way, covenants, reservations and other conditions, if any, affecting the property which would appear in an Owner’s Title Policy if issued, or which would affect in any way Purchaser’s intended use of the property. Accompanying such title commitment, Seller shall also furnish Purchaser with copies of all documents affecting the property. In the event any exceptions appear in such commitment, other than those listed [in the contract], and other than the standard printed exceptions, that are unacceptable to Purchaser, then Purchaser shall within fifteen (15) days after receipt thereof, notify Seller in writing of such fact. Failure to object within the time set forth above constitutes waiver of all matters shown on said binder and acceptance thereof. Seller may then promptly undertake to eliminate or modify such unacceptable exceptions to the reasonable satisfaction of Purchaser. In the event Seller is unable to do so within thirty (30) days thereafter, Purchaser may terminate this Contract by notice in writing to Seller and be entitled to an immediate refund of the earnest money deposit or may accept such title as Seller can deliver at Purchaser’s option.

The contract did not disclose the existence of a height restriction on the property.

The title policy commitment called for by the contract was issued by the Title Insurance Company of Minnesota through its authorized agent, American Title Company of Dallas. That commitment disclosed two restrictions which Baldwin or his agent explained did not affect ECC’s planned commercial development and to which ECC therefore did not object. Neither the commitment nor any documents furnished with it in accordance with the contract disclosed the existence of the height restriction in the deed to Baldwin. American Title admits that it was negligent in failing to find the height restriction.

Baldwin conveyed the property to ECC by deed which provided:

This Deed is executed and delivered subject to easements, reservations, conditions, covenants and restrictive covenants affecting the property conveyed hereby as the same appear of record in the Office of the County Clerk of Dallas County, Texas.

Baldwin and Aldrich knew of the height restriction before ECC contracted to purchase the property but never told ECC about it.

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Bluebook (online)
765 S.W.2d 504, 1989 Tex. App. LEXIS 479, 1989 WL 21916, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ecc-parkway-joint-venture-v-baldwin-texapp-1989.