Court of Appeals of Texas, Fifth District, Dallas
Appeal from the County Court at Law No. 3 Dallas County,
Texas Trial Court Cause No. CC-15-04871-C
Justices Brown, Schenck, and Pedersen, III
PEDERSEN, III JUSTICE
appeal arises from the sale of a condominium unit. The buyer,
Kevin Dugas, claims the seller's agent, Ebby Halliday
Real Estate, Inc. (Ebby), misrepresented the property's
square footage. Ebby appeals a jury verdict awarding Dugas
damages. Among other issues, Ebby challenges the legal
sufficiency of the evidence to support the jury's finding
that Ebby made a false representation. We conclude the
evidence is legally insufficient to support the jury's
finding. We therefore reverse and render.
seller, Elizabeth McLarry, retained Ebby to put her
condominium unit on the market. Karen Estes, a salesperson
employed by Ebby, listed the property on the Multiple Listing
Service (MLS). The MLS database contains a drop-down menu
from which the listing agent can select
"appraisal," "builder," "tax,"
or "other" as the source of the subject home's
square-footage information. Estes selected "tax"
for the unit in question, as do most agents when listing
properties. Based on this selection, the MLS database
accessed the unit's square footage from Dallas Central
Appraisal District (DCAD) records and uploaded this
information into the MLS listing. The listing noted the
property's square footage as "1, 178 / Tax."
The listing also contained a narrative field prepared by
Estes in which she described the property as a
"[d]arling 1, 178 sq. ft." unit. The foregoing
descriptions were consistent with DCAD's records, which
list both the "[l]iving [a]rea" and the
"[t]otal [a]rea" of the unit as 1, 178 square feet.
However, this is not the unit's "livable"
square footage. This number includes the balcony and garage.
agent, Lisa DeWaal, gave him a copy of the MLS listing. Dugas
was a first time home buyer, and he relied on the
listing's description of the property's square
footage in deciding to make an offer to purchase the
property. Dugas purchased the condominium in March 2015 for
$130, 000. Although a buyer's lender typically requires
an appraisal of the property, in this case Dugas borrowed the
purchase money from his father. Thus, no appraisal was
performed. After the transaction closed, Dugas measured the
unit and discovered that its "livable" square
footage-i.e., the interior climate-controlled space
excluding the balcony and garage-was only 885 square
feet. In other words, the unit was approximately twenty-five
percent smaller than Dugas had understood it to be.
sued Ebby and Estes and asserted claims for (i) violations of
the Deceptive Trade Practices Act (DTPA), see Tex.
Bus. & Com. Code Ann. §§ 17.41-.63, (ii)
statutory fraud, see id. § 27.01, and (iii)
negligent misrepresentation. Dugas also asserted a claim
against Ebby for its negligent supervision and training of
Estes. The defendants generally denied Dugas's claims,
and they also pleaded section 17.506 of the Business Commerce
Code. Id. § 17.506(a)(1)-(2). This section
provides an affirmative defense to a DTPA claim if the
defendant gave reasonably and timely written notice to the
plaintiff of the defendant's reliance on written
information from official government records or other sources
that, if false, the defendant did not know and could not
reasonably have known of such falsity. Id.
DTPA and statutory fraud claims against Ebby were tried
before a jury in April 2017. At the conclusion of the trial,
the jury found that Ebby engaged in false, misleading, or
deceptive trade practices and committed statutory fraud. The
jury awarded Dugas $32, 335.48, which is the amount that he
claims he overpaid for the subject unit, plus additional sums
for attorney's fees. However, in response to Question 2
of the charge, the jury found for Ebby regarding its DTPA
the jury's verdict, Dugas filed a motion for entry of
judgment and to disregard certain answers in the verdict.
Ebby countered by filing a motion for judgment
notwithstanding the verdict. On June 26, 2017, the court held
a hearing on both motions. A little over a month later, on
July 31, the court rendered judgment awarding Dugas $32,
335.48, plus additional sums for attorney's fees. The
judgment also awarded Dugas pre- and post-judgment interest
and costs. Moreover, the judgment stated the court had
disregarded the jury's answer to Question 2 because no
evidence supported this answer. Ebby then filed this appeal.
raises eight issues, two of which relate to Dugas's DTPA
claim, four of which relate to his statutory fraud claim, and
two of which relate to other topics. It appears that the
court's judgment awarded damages to Dugas based on his
statutory fraud claim. Therefore, we will begin by considering
Ebby's issues related to Dugas's fraud claim.
Question 5 of the court's charge asked whether Ebby
"committed statutory fraud" against Dugas.
According to the charge, statutory fraud occurs when, among
other elements, "there is a false representation of a
past or existing material fact." See Tex. Bus.
& Com. Code Ann. § 27.01(a)(1) (providing statutory
basis for the foregoing definition). The jury answered
"yes" to Question 5. It also found, in response to
Question 6, that Ebby was not actually aware that the subject
representation was false. See id. § 27.01(c)
(providing for exemplary damages if a defendant makes a false
representation with actual awareness of such falsity).
Ebby's third issue challenges the legal sufficiency of
the evidence to support the jury's finding that Ebby
misrepresented the size of the condominium unit.
prevail on this issue, Ebby must demonstrate that no evidence
supports the jury's finding. Graham Central Station,
Inc. v. Pena, 442 S.W.3d 261, 263 (Tex. 2014) (per
curiam). "We will sustain a legal sufficiency challenge
if the evidence offered to prove a vital fact is no more than
a scintilla." Id. (citation and internal
quotation marks omitted). In conducting this analysis,
"we credit evidence that supports the verdict if
reasonable jurors could have done so and disregard contrary
evidence unless reasonable jurors could not have done
so." Id. (citation and internal quotation marks
omitted). We must determine "'whether the evidence
at trial would enable reasonable and fair-minded people to
reach the verdict under review.'" Id.
(quoting City of Keller v. Wilson, 168 S.W.3d 802,
827 (Tex. 2005)).
discussed previously, the MLS listing prepared by Estes
referred to the subject unit as "1, 178 / Tax."
Ebby contends this notation meant 1, 178 square feet
according to DCAD. It argues the MLS listing accurately
reported the DCAD records' description of the
property's size. Dugas responds that a reasonable juror
could have found that the term "/ Tax" either had
no meaning or meant the amount of square footage on which the
unit would be taxed-in other words, the unit's
"livable" square footage. In Dugas's view,
Ebby's statement was false because in reality the unit
had only 885 "livable" square feet. As support, he
points to Estes's testimony that the reference to 1, 178
square feet in Ebby's listing (i) was intended to convey
"livable" square feet and (ii) was false if the
actual square footage was less.
statutory fraud clam requires proof of a misrepresentation,
not an omission. Tex. Bus. & Com. Code Ann. §
27.01(a); cf. Bradford v. Vento, 48 S.W.3d 749, 755
(Tex. 2001) (noting, as a general rule, that "[s]ilence
may be equivalent to a false representation only when the
particular circumstances impose a duty on the party to speak
and he deliberately remains silent."). We must focus on
the actual language of the purported misrepresentation, i.e.,
"1, 178 / Tax," as opposed to what Ebby
subjectively intended it to say. Cf. Great Am. Ins. Co.
v. Primo, 512 S.W.3d 890, 893 (Tex. 2017) ("A
contract's plain language controls, not what one side or
the other alleges they intended to say but did not."
(citation and internal quotation marks omitted)). In
interpreting the term "/ Tax," we may consider its
commonly accepted meaning within the real estate industry.
Cf. RSUI Indem. Co. v. The Lynd Co., 466 S.W.3d 113,
121 n.1 (Tex. 2015) (stating same in context of construing
undefined contract terms). However, the commonly accepted
meaning "may not apply when the language and its context
demonstrate that the parties intended a different
What Was the Representation?
evidence established that MLS listings can be accessed only
by licensed real estate agents who are members of the
MetroTex Association of Realtors, though a prospective
homebuyer may obtain an individual listing from his or her
agent or in an "open house." Terri Cox, a retained
expert for Ebby, testified that the term "/ Tax" is
understood within the real estate industry to mean
the source of the square footage information, which in this
case was DCAD. Likewise, both Estes and DeWaal understood
"/ Tax" in the subject listing to mean that tax
records were the source of the listing's description of
the unit's size. In addition, both Estes and Cox
testified that a home's square footage is understood in
the industry to mean its "livable" square feet.
Based on this evidence, we interpret "1, 178 / Tax"
as a representation by Ebby that DCAD had reported the
subject unit as 1, 178 "livable" square feet.
Was There a ...