Johnson v. Prudential Relocation Management Ltd. Partnership

918 S.W.2d 68, 1996 Tex. App. LEXIS 590, 1996 WL 66106

• Court: Court of Appeals of Texas
• Decided: February 15, 1996
• Docket: No. 11-95-077-CV
• Status: Published

Opinions

Opinion

DICKENSON, Justice.

This is a limited appeal under TEX.R.APP.P. 40(a)(4). The question is whether appellants’ “constructive notice” of easements which were properly recorded bars the lawsuit which they filed more than two years after they were told by appellees that there were no easements on the residential property which they bought. The lawsuit was filed less than two years after appellants discovered that there were high pressure gas pipelines buried in their backyard.

Larry Johnson and Marilyn Johnson (appellants) limited their appeal to that portion of the trial court’s final judgment which incorporated prior interlocutory summary judgments that they take nothing on their claims based upon the Deceptive Trade Practices-Consumer Protection Act,¹ negligence, and gross negligence.

Prudential Relocation Management Limited Partnership,² Stewart Title Company of Fort Bend County, Stewart Title Guaranty Company, and Faye Stromatt (appellees) had been granted summary judgment that appellants take nothing from them because of the two year statute of limitations.³ We reverse and remand.⁴

Point of Error

The sole point of error reads in full as shown:

The trial court erred in granting the appellees’ motions for summary judgment as to the Johnsons’ DTP A, negligence, and gross negligence claims.

We sustain this point of error because appel-lees’ summary judgment proof does not conclusively show that appellants’ claims are barred by the two year statute of limitations.

Discovery Rule

Section 17.565 of the Deceptive Trade Practices Act provides in part:

All actions brought under this subchap-ter must be commenced within two years after the date on which the false, misleading, or deceptive act or practice occurred or within two years after the consumer discovered or in the exercise of reasonable diligence should have discovered the occurrence of the false, misleading, or deceptive act or practice. (Emphasis added)

Appellees argue that, as a matter of law, appellants were charged with notice of the recorded easements under TEX.PROP.CODE ANN. § 13.002 (Vernon 1984)⁵ and that, consequently, they “discovered or in the exercise of reasonable diligence should have discovered” that the assurance of no easements on their property was “false” more than two years before the lawsuit was filed.

Constructive Notice

The Supreme Court of Texas made it clear in Ojeda de Toca v. Wise, 748 S.W.2d 449 (Tex.1988), that “notice” of properly recorded instruments under Section 13.002 does not bar claims under the Deceptive Trade Practices Act for misrepresentations. After holding that “imputed notice under real property recording statutes” is not a defense to a buyer’s action for damages from deceptive trade practices, the court points out, supra at 451:

Title to [appellant’s] house is not in issue, and we perceive no valid reason to allow [appellees] to escape damages liability arising out of fraud or conduct proscribed by DTPA § 17.46(b)(23). There are defenses to a deceptive trade practices action ... but imputed notice under real property recording statutes is not one of them.

See also Holmes v. P.K Pipe & Tubing, Inc., 856 S.W.2d 530 (Tex.App.—Houston [1st Dist.] 1993, no writ); ECC Parkway Joint Venture v. Baldwin, 765 S.W.2d 504 (Tex.App.—Dallas 1989, writ den’d). Both of these cases cite and follow Ojeda de Toca.

The First Court of Appeals said in Holmes v. P.K. Pipe & Tubing, Inc., supra at 542:

In Ojeda de Toca, the supreme court- stated that the purpose of the recording statutes is to protect a good faith purchaser from losing title to real estate when that person has exercised diligence to verify the seller’s ownership; they were not enacted for the purpose of protecting perpetrators of fraud.

⅜ ⅝ ⅜ ⅜ * ⅜

Actual notice includes knowledge of all facts that reasonable inquiry would have disclosed. The duty of inquiry extends only to those matters that are fairly suggested by facts that are actually known, rather than circumstances that merely arouse suspicion in the mind of a reasonably prudent person. (Emphasis added)

The Dallas Court of Appeals said in ECC Parkway Joint Venture v. Baldwin, supra at 509:

As de Toca notes, deed records by statute afford notice of interests conveyed in real property for the purpose of protecting those interests and subsequent grantees, not for the purpose of protecting perpetrators of fraud.

⅜ ⅝ ⅜ ⅜ ⅜: ⅝

Although de Toca does not expressly address whether constructive notice is a defense to other claims, like ECC’s claims for negligent misrepresentation and breach of fiduciary duty, we see no basis for allowing the defense to these claims and not the others. (Emphasis added)

Those portions of the trial court’s judgment which have not been challenged by this limited appeal are affirmed; the remainder of the trial court’s judgment is reversed, and the cause is remanded.

1 . See TEX.BUS. & COM.CODE ANN. §§ 17.41-17.63 (Vernon 1987 & Supp.1996).

2 . Formerly known as Merrill Lynch Operating Partnership, L.P.

3 .Other claims and parties were also involved in the trial court proceedings. The trial court's final judgment, after trial on the merits before a jury, provided that plaintiffs take nothing on those claims. Those claims are not involved in this appeal.

4 . Other portions of the trial court’s judgment were not challenged by the limited appeal, and those portions of the trial court’s judgment are affirmed.

5 . Section 13.002 provides that:

An instrument that is properly recorded in the proper county is notice to all persons of the existence of the instrument.