THOMAS LANNY VLASAK AS TRUSTEE FOR THE SILBER FAMILY TRUST, Appellant
TAXCO, INC., Appellee
Appeal from the 11th District Court Harris County, Texas
Trial Court Case No. 2014-49207
consists of Chief Justice Radack and Justices Brown and
Silber Family Trust sought to purchase a tear-down house from
Taxco, Inc. and, when the sale failed to close, sued Taxco
for specific performance. A bench trial resulted in a
take-nothing judgment. The trial court held that the sale
agreement had expired on the closing date listed in the sale
agreement and that, because Taxco had not breached the
agreement, the Trust was not entitled to specific
Trust appeals the judgment, contending that the evidence is
legally and factually insufficient. The Trust argues that the
contract did not expire on the specified closing date, Taxco
continued to have a contractual obligation to complete the
sale, and Taxco breached the agreement by refusing to close
two months after the specified closing date.
owned a residential property in Houston, Texas that both
parties have referred to as a "tear-down." The
Trust had purchased several other tear-downs in the same
neighborhood and was interested in purchasing this property,
which the Trust's trustee, Thomas Vlasak, described as
"derelict" but in a good location. The Trust
intended to remove the existing structure, construct a new
home, and "flip" it once the new home was ready for
Trust and Taxco entered into a standard form residential
earnest money contract on December 3, 2013 for a purchase
price of $200, 000 with a payment of earnest money. The
contract specified that the closing would occur later that
month, on or before December 29.
earnest money contract provided that the seller, Taxco, was
obligated to provide, at the buyer's expense, a title
commitment "subject to promulgated exclusions"
within 20 days. Other than standard objections, the buyer was
required to object to any listed exceptions, but the portion
of the form specifying the date for such objections was not
completed. If the buyer failed to timely object, it waived
its rights, except for the requirements in Schedule C. If the
buyer did object, the seller was obligated to cure the timely
objection. If the seller failed to do so, the contract would
terminate unless the buyer waived the objections. Finally,
the contract stated that at the closing the seller and buyer
would "execute and deliver any . . . documents
reasonably required for . . . the issuance of the Title
Trust had used Chicago Title Co. as a title insurer in other
real estate transactions and selected it to issue a title
insurance policy on this property. On December 23, Chicago
Title issued to the Trust a title commitment, which stated
that Chicago Title would issue a title policy "upon
compliance with the requirements in Schedule B and Schedule
C." Schedule B listed exceptions from coverage, such as
outstanding taxes, homestead rights, easements, and set back
requirements. Schedule C listed other items that would not be
covered under the policy unless the Trust managed to
adequately "dispose of these matters to our satisfaction
before the Policy is issued."
C included four City of Houston notices of public hearing and
four orders from the City's Department of Public Works
and Engineering. These notices and orders related to
violations of the City's ordinances and to the City's
earlier findings that the property was "dilapidated,
substandard, or unfit for human habitation, "
"constitute[d] a hazard to the health, safety or welfare
of its occupants and/or the citizens, " and a public
nuisance. The notices provided that the house could not be
remodeled or torn down without the City's approval. These
notices were not liens on the property and did not demand any
Title's cover letter to the title commitment highlighted
the City-notice issue and informed the parties that Chicago
Title would "need a review" of the items listed in
Schedule C before closing and would "also need to secure
their release." While neither the cover letter nor the
title commitment stated whether the burden to obtain the
releases was on the buyer or the seller, the contract
provided that the seller, Taxco, was obligated to provide a
title commitment "subject to promulgated
parties received the title commitment discussing the
City-notice issue six days before the specified closing date.
the City-notice issues still unresolved, the Trust signed the
closing documents before the specified closing date and paid
the purchase price to the title company to hold in escrow.
There is no evidence that Taxco was told that the Trust had
tendered the purchase price or signed the closing documents.
on its end, contacted the City of Houston to address its
notices. According to Taxco's president, Patrick Walker,
the City told Taxco that it did not provide releases for its
notices. Based on that information, Taxco informed
the title company in mid-December that releases could not be
December 23, Chicago Title's vice president, Marc
Archuleta, emailed the parties that the title company
"still need[ed] some items" from Taxco, referring
to releases from the City. Taxco responded by again telling
the title company that it could not obtain releases from the
is no evidence that Chicago Title contacted Taxco between
December 23 and December 29 to schedule Taxco's execution
of the documents needed for closing or to inform Taxco that
the City-release issue was resolved or waived.
29 passed without a closing.
January 9, 2014-11 days after the specified closing date-the
Trust emailed Taxco to alert it that Chicago Title would be
sending a list of "items needed to close, "
including the City-notice issue. That same day, Archuleta
forwarded copies of the City's notices to both parties
for their "reference and to assist in satisfying this
matter." There is no documentary evidence that Chicago
Title had any further contact with the parties in January.
testified that, even though Chicago Title had requested the
parties' assistance in satisfying the City-notice issue,
Chicago Title, itself, obtained the City's releases in
January, which allowed the closing could go forward.
Archuleta did not bring copies of those releases to trial.
After this testimony, the trial court granted a continuance
that allowed Archuleta to retrieve records from his office.
Even after the continuance, he failed to provide documentary
evidence that the releases had been obtained.
is no documentary evidence that Chicago Title ever provided
the parties with copies of the releases. Nor is there
evidence that Chicago Title informed Taxco that it had
obtained the releases. And Archuleta did not recall ever
asking Taxco to execute the closing documents.
next month, on February 14, 2014, the Trust emailed Taxco to
ask when Taxco would be ready to close. Taxco responded on
February 20 that "it does not appear this transaction is
going to close, " explaining that Chicago Title had
"agreed to check and get back with [Taxco]" about
the City's notices but never did. Taxco wrote that it had
never received "any notice that this requirement had
been waived." According to Taxco, it "assumed the
deal had fallen apart" because it was not contacted by
the Trust or Chicago Title for over a month following the
January 9 email. Taxco concluded by stating that it had
assumed that the contract had been terminated because Chicago
Title was requiring releases that could not be obtained.
Taxco agreed to the return of the Trust's earnest money.
trial witnesses provided additional context to these emails
through their testimony. Vlasak testified that the Trust had
fully complied with its contractual obligations before the
December 29 closing date. Yet he did not testify that the
Trust ever informed Chicago Title or Taxco that it would
waive the exceptions in the title policy for the City
agreed that the Trust closed its portion of the transaction
before the closing date. Regarding the City-notice issue, he
testified that Taxco did not resolve the issue or request a
waiver of the Schedule C exceptions. Instead, Chicago Title
resolved the issue itself in January 2014 when it obtained
the releases from the city directly. According to Archuleta,
because Chicago Title resolved the city-notice issue, all
that was left for Taxco to do was show up for the closing.
Based on Archuleta's testimony, the Trust argued that
Taxco's failure to appear for closing breached the