IN THE TENTH COURT OF APPEALS
No. 10-23-00134-CV
MARCUS BLALOCK, Appellant v.
CASA LATINAS, LLC AND NIDIA SALDIVAR, Appellees
From the 13th District Court Navarro County, Texas Trial Court No. D22-30215-CV
MEMORANDUM OPINION
Marcus Blalock appeals from a summary judgment rendered against him in his
suit against Casa Latinas, LLC and Nidia Saldivar in a dispute arising from his purchase
of a home. In two issues, Blalock asserts the judgment should be reversed and the cause
remanded because he was fraudulently induced into entering the contract. We affirm. Background
Blalock purchased a home from Appellees in April 2020. Thereafter, he
experienced numerous problems with the home. Alleging that Appellees made multiple
misrepresentations and failed to disclose defects in the home, he sued them for violations
of the Texas Deceptive Trade Practices Act (DTPA) and fraud in connection with a real
estate transaction pursuant to Chapter 27 of the Texas Business and Commerce Code.
Appellees filed a traditional motion for summary judgment asserting there is no
genuine issue of material fact as to the causation element of Blalock's DTPA and statutory
fraud causes of action because the "as is" clause in the sales contract negates that element.
Further, they asserted that there is no genuine issue of material fact as to any exception
that would negate the application of the "as is" clause. The trial court granted the motion
and ordered that Blalock take nothing from Appellees.
The As Is Clause
In his first issue, Blalock contends Appellees fraudulently induced him into
purchasing the residence by concealing material information concerning the condition
and circumstances of the home. He contends Appellees knew there were deficiencies in
the plumbing and electrical systems which they failed to disclose. He also asserts they
failed to disclose that a room had been added to the residence after construction of the
home was completed and that the residence had been occupied before Blalock entered
into the contract to purchase it.
Blalock v. Casa Latinas, LLC Page 2 In his second issue, Blalock contends the contract's "as is" clause is not binding on
him because it is a product of fraud. He asserts that he was induced to enter the
agreement by Appellees' fraudulent misrepresentations and failure to disclose required
material information. He further argues that the totality of the circumstances
surrounding the purchase of the residence precludes binding him to the "as is" clause.
He claims that Appellees were more sophisticated in real estate transactions than he was,
and the "as is" clause was just boiler plate language in a standard form purchase
agreement that could not have been negotiated.
STANDARD OF REVIEW
We review the trial court's decision to grant summary judgment de novo. Eagle
Oil & Gas Co. v. TRO-X, L.P., 619 S.W.3d 699, 705 (Tex. 2021). The movant for traditional
summary judgment has the burden of showing that there is no genuine issue of material
fact, and it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Eagle Oil &
Gas Co., 619 S.W.3d at 705. A defendant who conclusively negates at least one of the
essential elements of the cause of action or conclusively establishes an affirmative defense
is entitled to summary judgment. Frost Nat'l Bank v. Fernandez, 315 S.W.3d 494, 508 (Tex.
2010). Once the movant establishes its right to summary judgment as a matter of law, the
burden shifts to the nonmovant to present evidence sufficient to raise a genuine issue of
material fact, thereby precluding summary judgment. Lujan v. Navistar, Inc., 555 S.W.3d
79, 84 (Tex. 2018).
Blalock v. Casa Latinas, LLC Page 3 To determine if the nonmovant has raised a fact issue, we review the evidence in
the light most favorable to the nonmovant, crediting evidence favorable to that party if
reasonable jurors could, and disregarding contrary evidence unless reasonable jurors
could not. B.C. v. Steak N Shake Operations, Inc., 512 S.W.3d 276, 279 (Tex. 2017). We
indulge every reasonable inference in favor of the nonmovant and resolve any doubts in
his favor. Eagle Oil & Gas Co., 619 S.W.3d at 705. The evidence raises a genuine issue of
fact if reasonable and fair-minded jurors could differ in their conclusions in light of all
the summary judgment evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754,
755 (Tex. 2007) (per curiam).
ANALYSIS
Causation
In their motion, Appellees asserted that they carried their initial summary
judgment burden by producing evidence that Blalock purchased the property subject to
an "as is" clause in the contract, which negates the causation element of all of Blalock's
claims. Under paragraph 7D(1) of the parties' contract, Blalock agreed to accept the
property "as is." Paragraph 7D provides:
ACCEPTANCE OF PROPERTY CONDITION: "As is" means the present condition of the Property with any and all defects and without warranty except for the warranties of title and the warranties in this contract. Buyer's agreement to accept the Property As Is under Paragraph 7D(1) or (2) does not preclude Buyer from inspecting the Property under Paragraph 7A, from negotiating repairs or treatments in a subsequent amendment, or from terminating this contract during the Option Period, if any. (Check one box only)
Blalock v. Casa Latinas, LLC Page 4 [X] (1) Buyer accepts the Property As Is. [ ] (2) Buyer accepts the Property As Is provided Seller, at Seller's expense, shall complete the following specific repairs and treatments:______________________________________________________ (Do not insert general phrases, such as "subject to inspections" that do not identify specific repairs and treatments.)
Buyers who contract to purchase something "as is" agree to make their own
appraisal of the bargain and to accept the risk that they may be wrong. Prudential Ins. Co.
of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 161 (Tex. 1995). Generally, an "as is"
agreement negates the causation essential to recovery for a DTPA violation and fraud.
See id. The sole cause of a buyer's injury in such circumstances is the buyer himself. Id.
Accordingly, because the parties' contract contains an "as is" clause, Appellees showed
entitlement to summary judgment by conclusively negating the causation element of
Blalock's claims. See Fernandez, 315 S.W.3d at 508. The burden then shifted to Blalock to
raise a genuine issue of fact precluding summary judgment. See Lujan, 555 S.W.3d at 84.
Exceptions
1. Circumstances
Blalock contends the "as is" clause is not binding. The Prudential court identified
exceptions to the enforcement of an "as is" clause. See Prudential, 896 S.W.2d at 162.
When determining the enforceability of an "as is" clause, we examine the nature of the
transaction and totality of the circumstances. See id. Blalock contends he lacked
sophistication in real estate matters. Blalock was a first-time home buyer, while
Appellees owned and operated four rental properties. Although Saldivar testified that
Blalock v. Casa Latinas, LLC Page 5 she had bought "homes that were in auction," she did not have those homes constructed.
There is no evidence of the actual expertise of either side in real estate matters. Moreover,
both sides were represented by a realtor through which the parties engaged in an arms-
length transaction.
The parties used a standard Texas Real Estate Commission form that included a
provision setting out two options regarding buyer's acceptance of the property's
condition. Blalock could have accepted the property subject to the seller's completion of
certain repairs, or, as chosen, Blalock could agree to accept the property in its current
condition. See Van Duren v. Chife, 569 S.W.3d 176, 185-86 (Tex. App.—Houston [1st Dist.]
2018, no pet.). Because the contract required the parties to choose from two options, the
"as is" clause is not, as Blalock asserts, boilerplate language. Id. at 187. Here, the "as is"
clause is an important part of the basis of the bargain, not an incidental or boilerplate
provision, and was entered into by parties of relatively equal bargaining position.
Blalock's agreement in paragraph 7D that he accepts the property in its present condition,
without reliance on statements by the seller, should be given effect. See Prudential, 896
S.W.2d at 162. Reviewing the evidence in the light most favorable to Blalock, we conclude
he did not present evidence indicating there is a fact question regarding the relative
sophistication of the parties, whether the parties freely negotiated the contract at arm's
length, or whether any other circumstances of the transaction invalidate the "as is"
Blalock v. Casa Latinas, LLC Page 6 agreement. Blalock has not raised any fact questions on application of this exception to
the determinative effect of the "as is" clause. See id.
2. Fraudulent Inducement
Additionally, Blalock argues that he is not bound by the purchase contract due to
the fraudulent inducement exception set out in Prudential. Under that exception, an "as
is" clause is not binding on a buyer who is induced to enter the contract because of the
seller's fraudulent representation or concealment of information. Id. In the context of a
summary judgment proceeding, fraudulent inducement is in the nature of a counter-
defense responding to the defense raised by the seller. Larsen v. Carlene Langford & Assocs.,
Inc., 41 S.W.3d 245, 253 (Tex. App.—Waco 2001, pet. denied); see also Fryar v. Mees, No.
10-06-00135-CV, 2007 Tex. App. LEXIS 3204, at *6 (Tex. App.—Waco April 25, 2007, no
pet.) (mem. op). The buyer must present competent evidence creating a material issue of
fact on each element of a simple fraud claim. Larsen, 41 S.W.3d at 253.
Fraudulent inducement is a species of common-law fraud that arises only in the
context of a contract. Int'l Bus. Machs. Corp. v. Lufkin Indus., LLC, 573 S.W.3d 224, 228 (Tex.
2019). A fraudulent-inducement claim requires proof that: (1) the defendant made a
material misrepresentation; (2) the defendant knew at the time that the representation
was false or made it recklessly without any knowledge of its truth; (3) the defendant
intended that the plaintiff should rely or act on the misrepresentation; (4) the plaintiff
relied on the misrepresentation; and (5) the plaintiff's reliance on the misrepresentation
Blalock v. Casa Latinas, LLC Page 7 caused injury. Id. Failure to disclose information may be the equivalent of a false
representation where there is a duty to disclose the information and the party deliberately
remains silent. Bradford v. Vento, 48 S.W.3d 749, 755 (Tex. 2001). Additionally, the plaintiff
has to show that its reliance on the misrepresentation or omission was justifiable.
JPMorgan Chase Bank, N.A. v. Orca Assets G.P., L.L.C., 546 S.W.3d 648, 653-54 (Tex. 2018).
Electrical and Plumbing Systems
Blalock asserts that, after closing, he learned that the house's electrical and
plumbing systems are defective. At the heart of his argument regarding alleged
omissions about the electrical and plumbing systems is an inspection report prepared by
Texans First Inspection Services, dated December 31, 2019, which was prepared for a
prior potential buyer of the property. The inspector noted: there are no arc fault breakers
present and there is a double lugged wire that could lead to fire, smoke alarms need to
be finished out and batteries added, there are no GFCI's on the back porch, and some
walls are missing outlets. The Texans First report indicates that the master shower failed
the pan test and needs to be replaced, and there is a loose shower handle and a small leak
in a hose bib. The inspector noted that he could not inspect the drain lines. He
recommended having a plumber scope the lines with a camera. Because of the contents
of this report, Blalock asserts that Appellees knew, and failed to disclose, that there were
defects in the electrical system and there was a problem with sewer lines backing up.
Blalock v. Casa Latinas, LLC Page 8 In his response to the summary judgment motion, Blalock argued that the court
must take as true his statement that he relied on Saldivar's honesty, and that statement
proves detrimental reliance. In his affidavit, Blalock stated that he relied on Saldivar's
honesty in complying with the law for disclosing any defects to the property.1 Prior to
closing, they amended the contract to provide that "Seller shall pay $4,000 to the buyer
upon closing for repair of bathroom showers." In his affidavit, he stated that the contract
was amended without any prior consultation with him, and he denied authorizing the
electronic signature on the amendment. He stated that, during closing, "Saldivar
explained to [him] that the shower pan had failed a test during inspection by Texas (sic)
First" but that neither she nor anyone else disclosed any other defects before he signed
the final documents at closing.
Appellees contend Blalock's argument fails because there were no omissions.
They assert that he saw the report before closing and, therefore, he knew of any
deficiencies identified in the report. In her affidavit, Saldivar explained that, after
receiving the inspection report, she "became aware of the shower pan issue as well as
other minor issues discussed in the report . . . ." Saldivar testified in her deposition that
she received a copy of the inspection report and then negotiated the amendment to
address the shower pan problem. She also stated in her affidavit that Blalock was
1 The trial court sustained Appellees' objections to specific paragraphs of Blalock's affidavit and
that ruling is not challenged on appeal. These paragraphs are not considered in our review.
Blalock v. Casa Latinas, LLC Page 9 provided a copy of the inspection report as "evidenced by the fact he produced a copy of
the same in response to [her] discovery in this case and the fact that [she] paid him $4000
at closing for repair of the defective shower pan identified in the report."
A plaintiff relying on fraudulent inducement as a defense must show his reliance
was justifiable. See JPMorgan Chase Bank, N.A., 546 S.W.3d at 653-54. Blalock admitted
that, during closing, Saldivar disclosed a defect that had been discovered during the 2019
inspection by Texans First Inspection Services. Even if reasonable jurors believed
Blalock's assertion that Saldivar did not disclose any other defects, he knew of the 2019
report, and that report was a "red flag" indicating that reliance on Saldivar's honesty was
not warranted. See id. at 655. At that point, he knew of the existence of the report and
was on notice of the possibility that other defects were named in the same report. See
Nat'l Prop. Holdings, L.P. v. Westergren, 453 S.W.3d 419, 423-24 (Tex. 2015) (per curiam)
(plaintiff did not justifiably rely on defendant's statements about contents of release when
plaintiff had opportunity to read release but did not do so). Mere confidence in her
honesty does not excuse Blalock's failure to exercise reasonable diligence to examine the
report in its entirety. See JPMorgan Chase Bank, N.A., 546 S.W.3d at 654. In this arm's
length transaction, it would not be a reasonable inference to say Blalock was justified in
relying on Saldivar's honesty and integrity. Id.
In his affidavit, Blalock never stated that he did not read the 2019 report before
closing. To support his argument, that fact would have to be supplied by inference. In
Blalock v. Casa Latinas, LLC Page 10 light of the fact Blalock knew before closing was complete that there was an inspection
report, and it revealed a $4,000 defect, reasonable jurors could disregard the inference
that he never saw or read the report itself. See Eagle Oil & Gas Co., 619 S.W.3d at 705.
Blalock did not raise a fact issue on the element of reliance as to the alleged omissions
regarding the electrical and plumbing systems.
Furthermore, Blalock asserted that, after he purchased the home, the toilets would
not drain out properly, instead they backed up into the home. He contends Appellees
failed to disclose this defect. Blalock hired a plumber who used a camera to inspect the
lines. The plumber determined that the sewer lines were improperly installed and the
cost to repair them would be $38,000. An element of fraudulent inducement is the
defendant's knowledge of the misrepresentation or omission. See Int'l Bus. Machs. Corp.,
573 S.W.3d at 228. The 2019 inspection report did not indicate there was a problem with
the sewer lines. The inspector did not inspect the lines. Blalock did not meet his burden
to produce evidence raising a fact question as to whether Appellees knew of this builder's
defect before Blalock purchased the house. See Lujan, 555 S.W.3d at 84.
Additional Room
Blalock contends Appellees had an obligation to disclose that a room had been
added to the residence after construction was completed but failed to do so. Saldivar
testified that the home was completed between September and October 2018. But a
January 7, 2019 invoice reflects that Saldivar requested the contractor to "add an
Blalock v. Casa Latinas, LLC Page 11 additional room" at the back of the house for an office, which he did. On her disclosure
notice, she indicated that she was not aware of any room additions made without
necessary permits, with unresolved permits, or not in compliance with building codes.
Blalock argues that a post-construction room addition is material information,
raising issues of foundation separation and cracks in the foundation. Material means a
reasonable person would attach importance to and would be induced to act on the
information in determining his choice of actions. Italian Cowboy Partners v. Prudential Ins.,
341 S.W.3d 323, 337 (Tex. 2011). The record does not clarify how the additional room was
added. An addition might be material if it required a new permit or was not built in
compliance with building codes. Nothing in the record suggests a separate slab was
poured or that the roofline was extended. Blalock did not provide evidence of any
structural modifications or alterations made without necessary permits or not in
compliance with building codes. Further, Blalock presented no evidence that Saldivar
knew that her request to add a room constituted a structural modification not in
compliance with building codes. See Int'l Bus. Machs. Corp., 573 S.W.3d at 228.
Appellees presented a report generated by Geohazards Engineering and Geology,
dated September 14, 2021, made in response to an insurance claim by Blalock. The
engineer noted interior surface irregularities and cracks and, on the exterior, separation
between the mortar and concrete slab. He observed a repair to the concrete slab. He
explained that interior surface irregularities "were consistent with irregularities from the
Blalock v. Casa Latinas, LLC Page 12 finishing of the joints between wall panels." He also indicated that the cause of cracks in
the concrete slab were initial post-construction shrinkage of the concrete during the
curing process which was common and may be anticipated to occur.
Appellees also presented a March 5, 2022 report created by ARIEL Inspections &
Engineering prepared at Blalock's request. The engineer stated that "[n]o cracks were
noted in foundation perimeter" and the "[f]oundation is performing as intended."
However, he also determined that the "[f]oundation is not level and mortar was used to
align brick veneer – poor workmanship." Considering the evidence in the light most
favorable to Blalock, it indicates that he purchased a home that was not built in the best
workmanlike manner. But neither engineer mentioned a post-construction add-on and
none of their findings hint at the possibility that any noted deficiencies resulted from such
an add-on. We conclude that the evidence did not raise a fact question as to the
materiality of the alleged omission or whether the alleged omission caused Blalock's
damages. See Mayes, 236 S.W.3d at 755.
Prior Occupant
Blalock asserts that Appellees failed to disclose that someone had lived in the
house before he purchased it. Saldivar testified that she built the house for herself, spent
a lot of time there, but never lived in the house. She spent two or three nights there
sleeping on the floor. On two occasions, two of her sisters spent the night there with her.
She said no one has ever rented the home.
Blalock v. Casa Latinas, LLC Page 13 Blalock presented records of the B & B Water Company to support his contention
that someone had lived in the home before he purchased it. In the affidavit
accompanying the records, the affiant explained that an application for water service was
tendered on August 22, 2018, and a second one was made on December 5, 2018. There
was continuous water usage under the name of the second application until March 24,
2020. A reasonable juror could infer that the builder first applied for water service and
Saldivar was the second to apply. While there was a significant amount of water usage
in some months, and a reasonable juror could infer that Saldivar paid for it, Saldivar
denied that anyone lived there. The record shows usage varied most months from
January 2019 through March 2020 from "Usage of 0 Water" to "Usage of 8300 Water" at
the highest point.2 There was no pattern or uniformity in usage. In consecutive months
it started at 4900 for two months in a row, then plummeted to 0, then bounced to 4700,
3500, 2900, 6700, 8300, 3300, and 3100 before dropping to between 100 and 300 for five
months. There was no water use in April 2020, the month the parties closed on the sale.
A third application was made on May 5, 2020 and was continuous to February
2023. It is reasonable to infer that Blalock was the third applicant. Usage during this time
period was not entirely consistent. It once rose to 2800, and once dropped to 700.
Normally, it remained between 1300 and 2500. However, the numbers are more uniform
2Neither the report, the business record affidavit supporting it, nor Blalock provides clarification as to the unit of measure. We assume usage is measured in gallons. Blalock v. Casa Latinas, LLC Page 14 than those of the previous applicant and the evidence shows Blalock was living in the
home during this time period. Comparing usage during the two time periods, a
reasonable juror could infer that water usage during the period from January 2019 to
March 2020 cannot be attributed to normal household usage by an inhabitant of the home.
A reasonable juror could infer that Saldivar paid for water at a home she owned and used
it for some undisclosed purpose, although no one lived there.
Blalock provided no evidence in support of his contention that the home had
previously been occupied except the water company records, and they do not raise a fact
question regarding whether someone was living in the house. Furthermore, Blalock did
not raise a fact question addressing whether an undisclosed previous occupant was a
material omission. See Lujan, 555 S.W.3d at 84.
Regarding each of the alleged omissions, Blalock failed to raise a fact question on
one or more elements of fraudulent inducement. Therefore, he has not shown entitlement
to the fraudulent inducement exception to the "as is" clause. See Prudential Ins. Co., 896
S.W.2d at 162; Larson, 41 S.W.3d at 253.
Conclusion
Because the parties' contract includes an "as is" clause, Appellees conclusively
negated the causation element of Blalock's causes of action. Blalock did not raise a
genuine issue of fact as to any exception precluding the "as is" clause's enforceability. We
overrule Blalock's first and second issues.
Blalock v. Casa Latinas, LLC Page 15 We affirm the trial court's judgment.3
STEVE SMITH Justice
Before Chief Justice Gray, Justice Johnson, and Justice Smith (Chief Justice Gray concurs.) Affirmed Opinion delivered and filed November 2, 2023 [CV06]
3 All pending motions are dismissed as moot. Blalock v. Casa Latinas, LLC Page 16