Mark and Kelly Hall v. Randy and Melinda Rogers

Court of Appeals of Texas·Decided June 29, 2021·No. 01-19-00408-CV·Published

Opinion

Opinion issued June 29, 2021

In The

Court of Appeals

For The

First District of Texas

the ground that the Halls’ contractual acceptance of the property “in its present condition” barred their claims. The trial court granted the motion for directed verdict and entered a final judgment that the Halls take nothing on their claims. In two issues on appeal, the Halls contend the trial court erred by (1) directing a verdict against them and (2) excluding evidence of their attorney’s fees.

We affirm.

Background

In September 2013, the Halls purchased the Rogerses’ home in the Powder Mills Estates subdivision in Tomball, Texas. After living in the home for a few months, the Halls discovered that “multiple sink holes” had formed under the deck at the back of the home, which the Halls alleged reduced the value of the property and were expensive to remediate. They learned the Rogers had removed a collapsed retaining wall from the property and replaced it with underground piers or posts but did not disclose either the retaining wall’s prior existence or its removal and replacement in connection with the sale.

The Halls sued the Rogerses for breach of contract, statutory and common-law fraud, fraudulent inducement, negligent misrepresentation, violations of the Texas Deceptive Trade Practices Act (“DTPA”), and unjust enrichment.1 The Halls sought

1 The Halls also sued their home inspector, the Rogerses’ real estate agent, and a title company. The other defendants were dismissed or nonsuited before the case

actual damages and “all reasonable and necessary attorney’s fees” incurred by them.2 Common to all of the Halls’ claims was the allegation that the Rogerses failed to disclose certain facts or made misleading and false statements about the condition of the property.

The Rogerses responded, asserting that the Halls’ claims were barred because the parties’ real estate contract included the Halls’ agreement to purchase the property “as is.” The contract at issue is a One to Four Family Residential Contract (Resale), a standard form agreement promulgated by the Texas Real Estate Commission (“TREC”). Under the section heading “Property Condition,” the contract indicates the Halls’ receipt of a Seller’s Disclosure Notice from the Rogerses and their agreement to “[a]ccept the property in its present condition.” The contract gave the Halls the right to have the property inspected and noted that their agreement to accept the property “in its present condition” did not preclude them from inspecting the property, negotiating repairs, or terminating the contract during a ten-day option period negotiated by them.

As indicated in the contract, the Rogerses executed a standard form Seller’s Disclosure Notice and a Supplemental Seller’s Disclosure Notice in connection with

proceeded to trial. The Rogerses were the only defendants remaining at the time of trial.

2 The Halls also sought exemplary damages on a theory of gross negligence. But they have not challenged the dismissal of their gross negligence claim on appeal.

listing the property for sale.3 The Seller’s Disclosure Notice states at the top of the form that it was submitted pursuant to the requirements of Section 5.008 of the Texas Property Code4 and notes in capital letters:

THIS NOTICE IS A DISCLOSURE OF SELLER’S KNOWLEDGE OF THE CONDITION OF THE PROPERTY AS OF THE DATE SIGNED BY SELLER AND IS NOT A SUBSTITUTE FOR INSPECTIONS OR WARRANTIES THE BUYER MAY WISH TO OBTAIN. IT IS NOT A WARRANTY OF ANY KIND BY SELLER, SELLER’S AGENTS, OR ANY OTHER AGENT.

The Supplemental Seller’s Disclosure instructed the Rogerses, as the sellers, to answer based not only on their personal knowledge “but also on any second-hand knowledge obtained by [them] from any source.”

In the Seller’s Disclosure Notice, the Rogerses answered “no” to the question whether they were aware of any condition of the property with respect to improper drainage, soil movement, water penetration, subsurface structure or pits, or other structural repairs. They also answered “no” to the question whether they were aware

3 The Seller’s Disclosure Notice reflects that both Randy and Melinda Rogers signed on April 15, 2013, about four months before the Halls contracted to buy the home and about five months before the sale closed. The Supplemental Seller’s Disclosure was dated around the same time, on March 15, 2013, by Randy and April 15, 2013, by Melinda.

4 TEX. PROP. CODE § 5.008(a) (instructing that “seller of residential real property comprising not more than one dwelling unit located in this state shall give to the purchaser of the property a written notice as prescribed by this section or a written notice substantially similar to the notice prescribed by this section which contains, at a minimum, all of the items in the notice prescribed by [subsection (b)].”).

of “any item, equipment, or system in or on the [p]roperty that is in need of repair” and which had not previously been disclosed in the notice. And in the supplemental disclosure, the Rogerses again indicated that they did not know of or had not heard of any prior water penetration or improper drainage at the property.

During the contract option-period, the Halls hired a TREC-licensed inspector to investigate the condition of the property. The inspector delivered to the Halls a written inspection report, which referenced “[m]inor erosion on right side of home,” and pointed out that “[t]he gutter at the rear is missing the 90 degree elbow to direct water away from the foundation.” The Halls asked the Rogerses to take certain actions to repair defects or conditions identified by the inspector, including providing covers for electrical boxes in the attic and repairs to the home’s hot water heater and irrigation and septic systems. The requested repairs were completed before the closing date of the sale. The Halls did not request any action related to soil erosion or stability.

The evidence the Halls presented to the jury at trial included the residential real property sale documents, evidence of the costs to address the sink holes on the property, and the testimony of multiple witnesses. Mark Hall testified that his complaint concerned the Rogerses’ failure to disclose that they had removed a retaining wall. He stated that he relied on the Rogerses’ disclosure notices in

deciding to buy the property and had the Rogerses disclosed the retaining wall’s collapse and removal, he would not have purchased the property.

Randy Rogers (“Randy”) testified that the home purchased by the Halls was constructed by a custom-home builder in 1999. That same year, Randy elected to install a forty- or sixty-foot retaining wall “to raise the level of the yard” and make the yard “more manageable.” He asserted the decision was made for aesthetic reasons, not for soil stability, and not at the recommendation of any engineer. Sometime later, he modified the retaining wall to add an additional two feet of height to “make it easier to mow the lawn,” and the retaining wall collapsed as a result.5 He did not reconstruct the retaining wall; instead, he hired a contractor to remove the entire retaining wall and bury a post or piers underground to hold the soil in place.6 Thereafter, he did not notice any problems in that area with regard to soil movement or erosion.

Randy acknowledged that another area of the property had, for a time, poor drainage as a result of the gutters on the house being removed. He explained that,

5 Randy could not recall the specific date that the retaining wall was modified or the specific date of the collapse. He estimated that the retaining wall collapsed either at the beginning or middle of the decade between the years 2000 and 2010.

6 Randy admitted that the underground post or piers would not have been visible to someone viewing the property and that he answered “no” to the question on the Seller’s Disclosure Notice as to the presence of any subsurface structure on the property.

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Mark and Kelly Hall v. Randy and Melinda Rogers, (Tex. Ct. App. 2021).

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