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Tealwood Real Estate Holdings Po, LLC v. Josephs

Court of Appeals of Texas, Fifth District, Dallas

June 27, 2019

TEALWOOD REAL ESTATE HOLDINGS PO, LLC, Appellant
v.
RAMONA D. JOSEPHS, MARIO F. LARSEN, AND DNI PROPERTIES, LLC, Appellees

          On Appeal from the 162nd Judicial District Court Dallas County, Texas Trial Court Cause No. DC-17-10423

          Before Justices Whitehill, Partida-Kipness, and Pedersen, III

          MEMORANDUM OPINION

          ROBBIE PARTIDA-KIPNESS JUSTICE.

         In this appeal, appellant Tealwood Real Estate Holdings PO, LLC challenges the trial court's take-nothing summary judgment in the lawsuit it filed against appellees Ramona D. Josephs, Mario F. Larsen, and DNI Properties, LLC[1]. Tealwood presents three issues generally asserting the summary judgment was improper because (1) the evidence raised genuine issues of material fact regarding Tealwood's justifiable reliance on appellees' alleged representations, (2) its damages for negligent misrepresentation included out-of-pocket losses, and (3) Tealwood presented sufficient evidence of damages to support its claims. For the reasons that follow, we conclude the trial court did not err because the summary judgment evidence conclusively negated the justifiable reliance element necessary for all of Tealwood's claims. Accordingly, we affirm the trial court's judgment. We issue this memorandum opinion because the issues are well-settled in law. See Tex. R. App. P. 47.4.

         BACKGROUND

         This dispute arises out of Tealwood's purchase of twelve condominium units from appellees in 2017.[2] The following facts were undisputed in the trial court. The parties entered into the sales contracts on or about January 26, 2017. Each contract contained an addendum that, among other things, included the following representations and promises:

3. Representations, Warranties and Covenants of Seller. For the purpose of inducing Buyer to enter into this Contract and to consummate the sale and purchase of the Property in accordance herewith, Seller makes the following representations, warranties and covenants to Purchaser:
. . .
(b) Seller has not received any written notice from a governmental authority that the Property fails to comply with any laws, regulations, ordinances, orders or other requirements of any governmental authority having jurisdiction over or affecting the Property or any part thereof nor, to Seller's knowledge, is the Property or any part thereof not in compliance therewith;
. . .
(j) Seller has not received any notice of any violation of, and to the best of Seller's knowledge it has complied with, any and all condominium declarations, ordinances; regulations, laws and statutes pertaining to the Property or any portion thereof, or the location, construction, occupancy, operation and use thereof;
. . .
The continued validity in all respects of the aforesaid representations and warranties and the continued performance of the covenants set forth in Paragraph 4 below shall be a condition precedent to Buyer's obligations to close the transaction contemplated hereby. All representations and warranties contained in this Paragraph 3 or elsewhere in this Contract shall be deemed remade as of the date of Closing and shall survive Closing for a period of one (1) year. If any of said representations and warranties shall not be correct at the time the same is made or as of the Closing or if any of said covenants shall not be performed during the term of this Contract, such event shall be a default by Seller under this Contract and upon written notice from Buyer to Seller on or prior to Closing, this Contract shall become null and void, in which event, the Earnest Money Deposit shall be immediately returned to Buyer and neither party hereto shall have any further liability or obligation hereunder.

         More than two weeks before closing, on February 23, Tealwood received resale certificates from the condominium association revealing, among other things, that the association's board "has received notice from a governmental authority concerning violations of health or building codes with respect to the Unit, the limited common elements assigned to the Unit, or any other portion of the condominium project. Notices received are: City code inspector & attorney have agreed to a two-year plan for rotten wood replacement." The resale certificates also indicated that the letter from the city ...


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