Shawn Holloway and Stephanie Holloway v. Flutobo, Inc. D/B/A Keller Williams Realty Northeast

419 S.W.3d 622, 2013 WL 6174477
CourtCourt of Appeals of Texas
DecidedNovember 26, 2013
Docket14-12-00104-CV, 14-12-00170-CV
StatusPublished
Cited by8 cases

This text of 419 S.W.3d 622 (Shawn Holloway and Stephanie Holloway v. Flutobo, Inc. D/B/A Keller Williams Realty Northeast) 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
Shawn Holloway and Stephanie Holloway v. Flutobo, Inc. D/B/A Keller Williams Realty Northeast, 419 S.W.3d 622, 2013 WL 6174477 (Tex. Ct. App. 2013).

Opinion

OPINION

KEM THOMPSON FROST, Chief Justice.

In this case we examine a real estate company’s liability to buyers in the context of the sale of a home owned by one of the company’s salespersons in a transaction in which the company was both the buyer’s agent and the seller’s agent. After the sale, the buyers of the home discovered termite damage and sued the termite in *626 spector, the seller, the real estate company, and the real estate broker designated by the company as the company’s agent for purposes of the Texas Real Estate License Act. The buyers settled their claims against the inspector. The trial court severed the claims against the seller after she filed for bankruptcy protection. The trial court granted summary judgment in favor of the real estate broker and severed these claims to make the judgment final. The claims against the real estate company were tried to a jury, which found liability and damages under various claims. In consolidated appeals, we conclude that the evidence is legally insufficient to support a finding that (1) the company is liable for the seller’s conduct, (2) the company knew of any unrepaired termite damage before the Holloways’ discovery of this damage; or (3) any remaining allegedly actionable conduct of the company caused the buyers damage. Accordingly, we reverse the trial court’s judgment against the real estate company and render judgment that the buyers take nothing against the real estate company. Because the trial court did not err in granting summary judgment, we affirm the trial court’s judgment in the severed case.

I. Factual and Procedural Background

Shawn and Stephanie Holloway decided to move from their home in Summerwood to Kingwood in the Spring of 2009. To assist them in selling their home and purchasing a new one, they enlisted the help of Jeremy Williams (hereinafter “Williams”), a licensed real estate salesperson associated with Flutobo, Inc. d/b/a Keller Williams Realty Northeast, a licensed real estate broker (hereinafter “Keller Williams”). 1 As to Williams’s services regarding their efforts to purchase a house, the Holloways and Williams had an oral contract.

In April 2009, the Holloways were progressing towards closing on the sale of their home and purchasing a property in Kingwood (hereinafter “the River Falls House”). The Holloways entered into a contract to buy the River Falls House. Williams recommended two inspection companies for use in inspecting the River Falls House. The Holloways selected one of them, Clint Simon d/b/a Sherlock Pest & Sherlock Spec (hereinafter “Simon”), who performed both the home inspection and termite inspection on the River Falls House. After these inspections were performed, the Holloways decided not to buy the River Falls House and exercised their right to terminate the contract.

Around the same time as the Holloways were deciding not to buy the River Falls House, Williams learned that Jennifer Blalock, another licensed real estate salesperson associated with Keller Williams, was planning to sell the Kingwood house in which she lived. 2 Before Blalock listed her home for sale, she let Williams know that she was trying to sell her house. Williams sent the Holloways an email with information about the house Blalock wanted to sell (hereinafter the “Property”). Two days later, Williams showed the Property to the Holloways with Blalock present. The Hol-loways decided they were interested in the *627 Property and wanted to make an offer to buy it. According to Shawn Holloway, Williams told them while they were looking at the Property that if the Holloways liked the Property they needed to act “pretty quickly” and that Blalock had told Williams that she had “three or four people already lined up to see the house.”

Because Keller Williams had a policy that a real estate salesperson associated with Keller Williams could not serve as the salesperson associated with Keller Williams on the listing of the salesperson’s own house for sale, in documents related to this transaction, Tina Martin, a real estate salesperson associated with Keller Williams, was designated as the salesperson associated with the listing broker, Keller Williams. Williams sent the Holloways an “Intermediary Relationship Notice” confirming that Keller Williams was serving as both the buyer’s agent for the Hol-loways and the seller’s agent for Blalock. According to this notice, Keller Williams appointed Martin as the salesperson to communicate with Blalock, carry out Blal-ock’s instructions, and provide opinions and advice to Blalock during negotiations, and Keller Williams appointed Williams as the salesperson to perform the same services for the Holloways. Nonetheless, Williams testified that he negotiated directly with Blalock and that he communicated with Martin “very little” regarding this transaction.

Blalock provided the Holloways with a “Seller’s Disclosure Notice,” in which Blal-ock stated that she was not aware of (1) active infestation of termites or other wood destroying insects, (2) previous termite or wood-destroying-insect “damage repaired,” or (3) termite or wood-destroying-insect damage needing repair. Blalock disclosed that she was aware of previous treatment for termites or wood destroying insects. The Holloways soon entered into a contract for sale of the Property. The contract reflected that Keller Williams was a broker serving as both buyer’s agent and seller’s agent, that the salesperson associated with Keller Williams regarding the Holloways was Williams, and that the salesperson associated with Keller Williams regarding Blalock was Martin. The Holloways had a ten-day period during which they could terminate the contract, thus allowing them time to inspect the Property.

The Holloways hired Simon to perform both the home inspection and the termite inspection of the Property. Simon had a scheduling problem and did not perform the home inspection, but he did perform the termite inspection. Before Simon performed the inspection, Shawn Holloway instructed Williams to give Simon a copy of Blalock’s Seller’s Disclosure Notice. Williams did not do so. In his report, Simon stated that his inspection revealed no visible evidence of an active infestation or a previous infestation of termites or wood destroying insects in or on the structure. Simon also stated that his inspection revealed visible evidence in or on the structure of previous treatment for subterranean termites, but not such evidence of previous treatment for other types of termites or wood destroying insects.

The Holloways did not exercise their option to terminate the contract and closed on the purchase of the Property. Neither Keller Williams nor Martin received any commission regarding Martin’s services for Blalock. Keller Williams and Williams received a commission regarding Williams’s services for the Holloways. Soon after the closing, the Holloways hired contractors to start some renovations to the Property. The contractors discovered extensive termite damage, substantial enough to cause the Holloways to move out of the newly purchased home.

*628 The Holloways filed suit asserting various claims against Blalock, Simon, and Keller Williams.

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

Related

Cite This Page — Counsel Stack

Bluebook (online)
419 S.W.3d 622, 2013 WL 6174477, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shawn-holloway-and-stephanie-holloway-v-flutobo-inc-dba-keller-texapp-2013.