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Duren v. Chife

Court of Appeals of Texas, First District

May 17, 2018


          On Appeal from the 268th District Court Fort Bend County, Texas Trial Court Case No. 16-DVC-231156A

          Panel consists of Justices Higley, Bland, and Caughey.


          Jane Bland Justice.

         This case arises out of water penetration that damaged a residential home. Seeking to recover their losses associated with the water damage, the buyers of the home sued the sellers, as well as the sellers' real estate broker and his company. The sellers counterclaimed, seeking recovery on notes the buyers had signed to finance the home purchase and for breach of corresponding deeds of trust. The trial court granted summary judgment to the sellers, the broker, and the real estate company on all of the claims brought against them by the buyers. It then severed the sellers' counterclaims against the buyers into a separate cause.

         The buyers appeal, contending that the trial court erred in granting summary judgment because they adduced evidence in support of each of their claims.

         Because the sellers' counterclaims remain pending, the summary judgment in their favor does not dispose of all the claims between them and the buyers. We therefore dismiss the buyers' appeal of the judgment disposing of their claims against the sellers for lack of jurisdiction. We affirm the trial court's summary judgment in favor of the real estate broker and his company.


         In November 2013, Reggie Lee and Sonya Van Duren purchased a home from Aloy and Gesare Chife. The home is located at 410 Royal Lakes Manor Boulevard in Richmond, Texas. The purchase price was $1, 250, 000. The Chifes financed a large part of the Van Durens' purchase price. The Van Durens paid $60, 000 at closing and agreed to pay another $140, 000 within four months. They agreed to pay the remainder owed on the note to the Chifes in monthly installments of $5, 636.63.

         After living in the home for about two years, the Van Durens discovered water in the front entryway of the home. Further investigation revealed wet, rotting wood throughout the structure of the house. Testing for mold was positive.

         The Van Durens sued the Chifes for negligent misrepresentation, fraud by nondisclosure, statutory fraud in a real estate transaction, and violations of the Deceptive Trade Practices Act. The gravamen of the Van Durens' claims is that the Chifes knew that construction defects existed in the home but failed to disclose them to the Chifes, and that these defects caused the water intrusion and mold growth. The Chifes counterclaimed, alleging that the Van Durens had not made the $140, 000 payment and stopped making the monthly installment payments in May 2016.

         The Van Durens also sued the Chifes' real estate broker, Stacy Mathews, and his realty company, Stacy, Inc., which does business as Prudential Premier Properties. Against the broker defendants, the Van Durens asserted claims for negligence, negligent misrepresentation, fraud by nondisclosure, statutory fraud in a real estate transaction, and breach of fiduciary duty. As in their claims against the Chifes, the Van Durens alleged that Mathews knew about the construction defects that caused the water intrusion and concealed these defects. In addition, the Van Durens asserted claims for negligence, negligent misrepresentation, and breach of fiduciary duty against Mathews and his company arising from the 2014 sale of their home at 26315 Crescent Cove Lane in Katy, Texas, after they had purchased the Chifes' home. Mathews acted as the Van Durens' broker in that sale. They allege that he failed to disclose a conflict of interest and persuaded them to sell their home for less than it was worth in pursuit of his own interest.

         The Chifes moved for traditional and no-evidence summary judgment. So did Mathews and his company. Among other grounds, the defendants asserted that the Van Durens had agreed to buy the Royal Lakes home "as-is, " which barred their claims absent evidence of any affirmative misrepresentation. Mathews also asserted that the Van Durens' claims for negligence and negligent misrepresentation relating to the Royal Lakes home were barred by the two-year statute of limitations. As to the Crescent Cove home, Mathews contended that the Van Durens agreed to its sales price and that they had no evidence of any damages.

         The Van Durens responded, contending that the present-condition clause in the Royal Lakes contract was unenforceable on multiple grounds, including fraudulent inducement. They asserted the discovery rule and fraudulent concealment as defenses to limitations. With respect to the Crescent Cove home, they denied that they gave Mathews permission to lower the sales price and submitted an affidavit in support of home's market value.

         The summary-judgment evidence consisted of the Royal Lakes contract documents, excerpts from the parties' depositions, and a few e-mails. Viewed in the light most favorable to the Van Durens, the evidence established the following:

The Chifes bought the Royal Lakes home new from the builder in 2011 or 2012. They moved out in July 2013. Caretakers looked after the home between July and its sale to the Van Durens in November. Mathews represented the Chifes in the sale of the home to the Van Durens. Another broker, Jared Lofton, represented the Van Durens.

         The Van Durens visited the Royal Lakes home at least twice before they bought it. They understood that they had the right to have it inspected before buying it, but they chose not to do so. According to the Van Durens, there was not enough time to inspect the home due to how quickly the Chifes wanted to close the sale. The Van Durens also testified that Mathews told them that the home had been inspected in July 2013. Because he said that the July 2013 inspection identified only minor problems, which were repaired, the Van Durens felt comfortable relying on Matthews' representation in lieu of hiring their own inspector.

         The record does not contain a July 2013 inspection report or any documentary references to one. Mathews testified that was not aware of a July 2013 inspection.

         Reggie Van Duren testified that he relied on the Sellers' Disclosure Notice completed by the Chifes in September 2013 in deciding to buy the home. In the Notice, the Chifes indicated that they were not aware of any defects or malfunctions in the home's roof, ceilings, walls, or structural components. They also indicated that they were not aware of any repairs to the roof or other structural components, water penetration, wood rot, or any condition that would materially affect one's health or safety. In the Notice, the Chifes disclosed a prior inspection of the home that took place in October 2012, but the Notice made no mention of a July 2013 inspection.

         The Van Durens maintained that the Chifes' disclosures in the Notice were knowingly false. Reggie testified that the Notice misrepresented the condition of the home by failing to disclose water penetration. Relying on a series of e-mails from November 2012 and November 2013, the Van Durens contended that the Chifes and Mathews were aware of the water penetration before they sold the Royal Lakes home.

         In the 2012 e-mails, Aloy Chife complained to the home builder of "construction anomalies" and "code violations" and asked that the builder make "the necessary repairs." Aloy expressed dissatisfaction that the builder had sent a carpenter to address these issues rather than "licensed plumbers and electricians" as promised. Mathews was copied on these e-mails.

         Gesare Chife testified that the builder "fixed everything" and that the Chifes did not have "any other problems" with the Royal Lakes home afterward. The record contains no contrary evidence.

         In the 2013 e-mails, Mathews informed the Chifes of several issues with the home, including an exterior leak above the front door from the balcony above it. He told them that it "may be a structural issue." Gesare responded that the area needed to be checked out, fixed, and repainted. She asked Mathews to "get a handy man" to do so, and Mathews replied that he would get a bid from someone that week.

         Gesare and Mathews testified that the 2013 e-mails were written after the Van Durens brought the leak under the balcony to Mathews' attention. Mathews testified that he photographed the leak and other issues as the Van Durens-accompanied by their broker, Lofton-pointed them out to Mathews during one of their visits to the property.

         While not directly contradicting him, the Van Durens implicitly denied Mathews' version of events. Reggie stated that he did not enter through the front door on his visits and therefore did not see the area beneath the balcony before buying the home. Sonya stated that she entered the home through the front door but did not notice any water damage on the front porch. The record does not contain any testimony from Lofton.

         There also was conflicting evidence as to whether the balcony leak had been repaired. According to Gesare, Mathews told her that he contacted the builder to address the leak, but she did not know if it was repaired. Mathews testified that he did not obtain bids or hire anyone to fix the leak and could not confirm whether repairs were made. He stated that Aloy did not want to make repairs to the home due to the modest size of the Van Durens' down payment. Reggie testified that the Van Durens later discovered evidence of repairs in the area above the front door and beneath the balcony.

         Mathews explained that he negotiated with Lofton for the Van Durens to buy the home "as is." Unlike a prior draft, the final version of the parties' contract provided that the Van Durens accepted the property "in its present condition."

         After the Van Durens moved into the Royal Lakes home, they hired Mathews to sell the Crescent Cove home where they previously had resided. Reggie averred that its market value was $525, 000 but that Mathews persuaded the Van Durens to sell it for $430, 000. The Van Durens alleged that Mathews had a conflict of interest due to a term in the Royal Lakes contract. Under that contract, a portion of Mathews's commission was not due until the Van Durens paid the $140, 000 installment to the Chifes. The Van Durens contend that Mathews advocated the ...

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