HTM Restaurants, Inc. v. Goldman, Sachs & Co.

797 S.W.2d 326, 1990 WL 132041
CourtCourt of Appeals of Texas
DecidedSeptember 13, 1990
DocketB14-89-00965-CV
StatusPublished
Cited by20 cases

This text of 797 S.W.2d 326 (HTM Restaurants, Inc. v. Goldman, Sachs & Co.) 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
HTM Restaurants, Inc. v. Goldman, Sachs & Co., 797 S.W.2d 326, 1990 WL 132041 (Tex. Ct. App. 1990).

Opinion

OPINION

SEARS, Justice.

Appellant complains of three take-nothing summary judgments granted in favor of Goldman, Sachs & Co. (Goldman), Institutional Property Assets (IPA), and Buffalo Tower Company (Buffalo).

HTM brought suit against appellees based on a lease of premises (the building). Buffalo, which owned the building at the time the lease was executed, later sold the building to IPA and assigned all leases to IP A. Goldman manages IPA’s assets. At the time the parties executed the lease, Mutual Life Insurance Company of New *328 York (MONY) had a lien and deed of trust on the building. Upon IPA’s default, MONY foreclosed and terminated appellant’s lease.

HTM sued appellees for breach of the implied covenant of quiet possession and enjoyment. HTM also sued for fraud, fraudulent concealment and non-disclosure of asbestos in the building, for negligent concealment and non-disclosure of the asbestos, and for negligent misrepresentation regarding the asbestos. Each appellee filed a motion for summary judgment. The trial court granted all three motions. In one point of error, appellant contends the trial court erred in granting appellees’ motions for summary judgment. We affirm.

A defendant is entitled to prevail on a motion for summary judgment if it establishes, as a matter of law, that at least one essential element in each of plaintiff’s causes of action does not exist. Rosas v. Buddies Food Store, 518 S.W.2d 534, 537 (Tex.1975).

Quiet Enjoyment

In every lease of land, in the absence of express language to the contrary, there is an implied covenant that the lessee shall have the quiet, peaceful enjoyment of the leased premises. L-M-S Inc. v. Blackwell, 149 Tex. 348, 233 S.W.2d 286, 289 (Tex.1950) (emphasis added); see also Restatement (Second) of PropeRty § 4.3 (1977). In its petition, HTM asserted a claim for breach of a covenant of quiet enjoyment. HTM based its claim on IPA’s failure to make the mortgage payments to MONY, resulting in MONY’s foreclosing on the lease. However, article 22 of the lease states:

Lessee accepts this lease and the leased premises in their entirety subject to any deeds of trust, security interests, or mortgages which might now or hereafter constitute a lien upon the building or improvements therein or on the leased premises....

When the lease containing this provision was executed, the deed of trust in favor of MONY had been recorded for five years. Therefore, HTM executed the lease with the knowledge that the deed of trust existed and that any lease provision was subordinate to the mortgage. We find that an action for breach of the covenant of quiet enjoyment, based on IPA’s failure to make the mortgage payments, is not a viable cause of action because the implied covenant is precluded by the express terms of the lease.

Fraud

Fraud requires a material misrepresentation that was false; that the speaker knew it was false or made it recklessly without any knowledge of its truth; that the speaker made it with the intention it should be acted upon; and that the plaintiff acted in reliance upon it and thereby suffered injury. Stone v. Lawyers Title Ins. Corp., 554 S.W.2d 183, 185 (Tex.1977). In alleging fraud in its first amended original petition, HTM stated:

HTM incorporates the allegations set forth above and would show that Buffalo Tower, Goldman Sachs and Institutional Property intentionally represented facts to HTM. When those representations were made, they were known to be false or they were made recklessly, without any knowledge of their truth, as a positive assertion ... (emphasis added).

This allegation does not state what misleading factual representations appellees made. However, because HTM “incorporates the allegations set forth above” in its petition, we assume they are referring to their allegation of breach of covenant of quiet enjoyment. Therefore, we must also assume appellant is contending appellees failed to disclose the MONY mortgage that existed at the signing of the lease, or made material misrepresentations regarding the mortgage. Article 22 of the lease stated: “Lessee accepts this lease and the leased premises in their entirety subject to any deeds of trust, security interests, or mortgages.” However, the language of the lease expressly stated that HTM accepted it subject to any existing mortgages, the mortgage had been recorded for five years when HTM signed the lease, and appellant failed to allege any material misrepresenta *329 tion of those facts. Therefore, we find no fraud concerning the existence of the MONY mortgage.

Fraudulent and Negligent Concealment

A party cannot be guilty of fraudulently or intentionally concealing facts of which he is not aware. Barnard v. Thompson, 138 Tex. 277, 158 S.W.2d 486 (1942); Raney v. Mack, 504 S.W.2d 527, 534 (Tex.Civ.App.—Texarkana 1973, no writ). Although silence can be a form of misrepresentation, the duty to speak does not arise until the silent party is aware of the facts. Storms v. Tuck, 579 S.W.2d 447, 452 (Tex.1979). Thus, appellees had no duty to disclose the presence of the asbestos until they become aware of it.

In its petition, HTM alleged Buffalo, Goldman, and IPA, fraudulently concealed and failed to disclose “the actual truth about the asbestos problem.” On appeal, HTM relies on “the failure of Goldman Sachs, IPA and Buffalo Tower to disclose the existence of asbestos.” In its motion for summary judgment, Buffalo included the affidavit of Ralph Ragland, a general partner of Buffalo. In his affidavit, Ragland stated that on behalf of Buffalo he conducted the lease negotiations that led to the execution of the lease with HTM. He stated that he had no personal knowledge that the building contained asbestos, and he further stated the building specifications did not reveal asbestos was used in the building. In its response to Buffalo’s motion for summary judgment, HTM did not dispute Ragland’s assertions. Since Buffalo’s assertion that it was not aware of the asbestos during the lease negotiations was undisputed, it could not be found guilty of fraudulent concealment. See id.

With respect to its claim against Goldman, HTM alleged Goldman and IPA “intentionally concealed and failed to disclose material facts to HTM with the intent to induce HTM to take a course, or courses of action it would not have taken if it knew the actual facts.” HTM exercised its option to renew the lease on January 29, 1987. On May 13, 1987, HTM refused Goldman’s offer to rescind the renewal, even though

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

Related

Amazon.com Services LLC v. Reginald Grant
Court of Appeals of Texas, 2024
Linda S. Nowlin v. Lori Keaton
Court of Appeals of Texas, 2019
in Re Shelby Longoria
Court of Appeals of Texas, 2015
In re Longoria
470 S.W.3d 616 (Court of Appeals of Texas, 2015)
Myre v. Meletio
307 S.W.3d 839 (Court of Appeals of Texas, 2010)
Dewayne Rogers Logging, Inc. v. Propac Industries, Ltd.
299 S.W.3d 374 (Court of Appeals of Texas, 2009)
Four Bros. Boat Works, Inc. v. Tesoro Petroleum Companies
217 S.W.3d 653 (Court of Appeals of Texas, 2007)
Mowbray v. Avery
76 S.W.3d 663 (Court of Appeals of Texas, 2002)

Cite This Page — Counsel Stack

Bluebook (online)
797 S.W.2d 326, 1990 WL 132041, Counsel Stack Legal Research, https://law.counselstack.com/opinion/htm-restaurants-inc-v-goldman-sachs-co-texapp-1990.