Smith v. Herco, Inc.

900 S.W.2d 852, 1995 Tex. App. LEXIS 965, 1995 WL 258122
CourtCourt of Appeals of Texas
DecidedMay 4, 1995
Docket13-93-410-CV
StatusPublished
Cited by26 cases

This text of 900 S.W.2d 852 (Smith v. Herco, Inc.) 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
Smith v. Herco, Inc., 900 S.W.2d 852, 1995 Tex. App. LEXIS 965, 1995 WL 258122 (Tex. Ct. App. 1995).

Opinion

YÁÑEZ, Justice.

Upon consideration of the appellant’s motion for rehearing filed in this case, we grant the motion, withdraw our prior opinion rendered March 16, 1995, and substitute the following opinion and judgment in its place.

Bruce Smith appeals from a judgment rendered in his favor. He contends that the trial court erred by not awarding him the largest sum of damages under the jury’s verdict. By cross-points, Shearer Engineering contends that the trial court erred by ordering it to indemnify the Hershey Corporation (Herco) for any sum it pays to Smith. We affirm in part, modify in part, and reverse and render in part the trial court’s judgment.

Facts

In April 1985, Bruce Smith sought to purchase a townhouse in Corpus Christi from Herco, specifically, unit 13 of the Brandywine Townhomes. Smith met Robert Early, Her-co’s agent, at the townhouse. Though Early could not remember the specifics of their conversation, he recalled that he showed Smith the interior of unit 13 and told Smith that it was for sale. The two discussed what Smith would be purchasing if he bought the townhouse. Early told Smith that he would be deeded the inside of unit 13, which consisted of the interior living area to halfway into the walls. Early also informed Smith that there was a townhome association which included the individual owners and that each owner paid monthly dues for sewage, garbage pickup, and maintenance of the common areas. Early explained that the common areas were owned by all of the unit owners. After negotiating price, Smith agreed to pay Herco $64,000 for unit 13. By contract, Her-co represented that it would sell Smith unit 13 and deliver a general warranty deed conveying title. Smith arranged financing with Lomas and Nettleton Mortgage Company and became obligated to them for monthly mortgage payments. On June 3,1985, Herco delivered to Smith a Warranty Deed with a Vendor’s Lien conveying good title, along with Herco’s written promise to defend title.

At closing, Shearer Engineering Inc., a survey company, provided Smith with a survey. On the survey was a seal indicating that it had been prepared by Harold Shearer, a registered public surveyor. The survey contained a written assurance by Shearer that “a survey had been made on the ground, that the plan was true and correct, and that there were no encroachments.” Smith moved into his townhouse.

In September 1986, Smith’s employer offered him a transfer to Houston. The company had a program whereby it would relieve Smith of his remaining $63,000 debt to Lo-mas and Nettleton by paying off Smith’s mortgage or making monthly payments until it sold the townhouse. The company would pay all closing costs and any loss caused by Smith’s negative equity.

The company sent a property appraiser to Smith’s townhouse on October 14, 1986, where he met with Smith who gave him a copy of Shearer’s May 31, 1985 survey. The company’s appraiser discovered a discrepancy between his own diagram and measurements of unit 13, and the Shearer survey. *856 He discovered that the Shearer survey failed to show that the northeast corner of unit 13 extended approximately four feet over the building line into the development’s common area. Shearer was called to prepare a corrected survey which it did on October 31, 1986. After Shearer met with the company’s surveyor, Shearer issued a revised survey dated November 14, 1986, which revealed that the northeast corner of unit 13 encroached onto the common areas of the development.

The company appraised the property at $62,500 conditioned upon a waiver by all of the owners of the property upon which the encroachment occurred. The company appraiser testified that, because of the encroachment, there was no longer fee simple ownership. The company appraiser testified that the encroachment impacts the market value because the owner cannot transfer his property free and clear.

The company told Smith that to sell the townhouse and convey clear title, all of the unit owners and their mortgage companies in the development would have to sign a deed conveying that portion of unit 13 that encroached onto the common area to Smith. It was up to Smith to obtain all of the property owners’ signatures. Smith accepted his job transfer, moved to Houston, and attempted to obtain all of the necessary signatures by phone from November 1986 until February 1987. He was unsuccessful, and in March 1987, his employer temporarily transferred him back to Corpus Christi to work on a special project. During his evenings and weekends, he continued to attempt to obtain the signatures of the other owners. Smith’s special project assignment ended June 1, 1987. Smith could not afford to live in Houston and continue making the mortgage payments on the townhouse in Corpus Christi. In June, Smith stopped making mortgage payments. On two occasions, Smith notified Herco that it had sold him a townhouse that was located on common property. The mortgage company foreclosed on the property.

Procedural History

Smith sued Herco and Shearer. Against Herco, Smith alleged Deceptive Trade Practices Act (DTPA) violations, a breach of contract, and a breach of expressed and implied warranties. Against Shearer, Smith alleged that Shearer violated the DTPA by misrepresenting unit 13 in its May 31, 1985 survey of Smith’s townhouse and that it was negligent in conducting the survey. Smith sued Shearer by his first amended original petition filed February 9, 1989. Shearer answered the lawsuit and raised the affirmative defense of limitations. Specifically, Shearer contended that more than two years had passed since Smith discovered the mistake in the survey and that, under Texas Business and Commerce Code section 17.565, any cause of action by Smith or any cross-action for indemnity and contribution by Herco under the DTPA was barred.

Herco filed a cross-claim against Shearer Engineering for contribution for any liability that may be found to exist against Herco as a result of Smith’s suit. Herco alleged negligence and breach of warranty for failing to complete the survey in keeping with professional standards. Additionally, Herco filed a supplemental answer and cross-action t;o all pleadings and pleaded fraud and illegality.

The trial court submitted thirty ques tions to the jury asking fact questions related to DTPA, breach of warranty, and negligence claims. Following a favorable verdict, the trial court entered judgment in Smith’s favor. Based upon the jury’s answers to the charge, the trial court ordered that Smith recover $32,000 from Herco as actual damages under Smith’s cause of action for its failure to deliver good and marketable title to unit 13 and for breach of its covenant of a good right to convey the property. The trial court specifically found and concluded that Smith was not entitled to prejudgment interest and denied Smith’s request. The trial court ordered that Smith recover $10,720 from Herco as attorney’s fees. Additionally, the trial court ordered that Smith recover post judgment interest. Regarding the cause of action brought by Herco against Shearer, the trial court’s order recites that “it appearing to the Court that said conduct constituted fraud is of the opinion that Herco should make payments to Smith and that Herco should have and recover complete indemnity from Shear *857 er.” Smith appeals and Shearer brings cross-points.

Smith v. Shearer

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

Related

Borgen v. a & M MOTORS, INC.
273 P.3d 575 (Alaska Supreme Court, 2012)
Barry v. Jackson
309 S.W.3d 135 (Court of Appeals of Texas, 2010)
in Re Texas State Board of Public Accountancy
Court of Appeals of Texas, 2010
Smith v. Smith
22 S.W.3d 140 (Court of Appeals of Texas, 2000)
Norwest Mortgage, Inc. v. Salinas
999 S.W.2d 846 (Court of Appeals of Texas, 1999)
Ken Petroleum Corp. v. Questor Drilling Corp.
976 S.W.2d 283 (Court of Appeals of Texas, 1998)
Kessler v. Fanning
953 S.W.2d 515 (Court of Appeals of Texas, 1997)
Thedford v. Missouri Pacific Railroad
929 S.W.2d 39 (Court of Appeals of Texas, 1996)
Otero v. Jordan Restaurant Enterprises
922 P.2d 569 (New Mexico Supreme Court, 1996)

Cite This Page — Counsel Stack

Bluebook (online)
900 S.W.2d 852, 1995 Tex. App. LEXIS 965, 1995 WL 258122, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-herco-inc-texapp-1995.