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Ivy v. Garcia

Court of Appeals of Texas, Third District, Austin

August 9, 2019

Marlonia Ivy, Appellant
Victor Garcia and Wanda Garcia, Appellees


          Before Chief Justice Rose, Justices Kelly and Smith



         In the suit underlying this appeal, appellant Marlonia Ivy alleges that appellees Victor Garcia and Wanda Garcia misrepresented and failed to disclose certain information in connection with Ivy's purchase of the Garcias' home. The Garcias filed a motion for summary judgment, arguing that the as-is clause in the parties' purchase contract precluded Ivy's recovery as a matter of law. After the trial court granted the Garcias' motion and signed a final summary judgment dismissing Ivy's claims, Ivy timely filed her notice of appeal in this Court. Because we conclude that a fact issue exists as to whether the as-is clause is enforceable, we reverse the summary judgment and remand the case to the trial court for further proceedings.


         On July 26, 2015, Ivy entered into a contract to purchase the Garcias' home in Williamson County (the Property), using the standard One to Four Residential Resale Contract promulgated by the Texas Real Estate Commission. In part, the purchase contract stated that the Garcias had provided Ivy with a Seller's Disclosure Notice concerning the home's condition, as required by Section 5.008 of the Texas Property Code, and that Ivy was accepting the Property "As Is," which was defined in the contract as "the present condition of the Property with any and all defects and without warranty except for the warranties of title and the warranties in this contract."

         The contract also provided Ivy with an unrestricted right to terminate the contract during a ten-day "option" period, in exchange for her payment of $250. During this option period, Ivy hired Mike Larkin with Barfield Home Inspections to conduct an inspection of the Property. Larkin issued a 23-page report identifying numerous problems with the house (the Barfield Inspection Report). Among other things, that report detailed multiple roof leaks and resulting damage visible in the attic; nonfunctioning lights above the fireplace; gas leaking at the water heater, causing him to "recommend having the water heater unit serviced and further evaluated by a licensed repair person"; a loose and leaking master bathroom toilet along with "deterioration of the plywood decking under the toilet"; and improperly sealed duct lines in the heating ventilation and cooling system (HVAC), causing him to "recommend contacting a licensed HVAC contractor to address these issues and to further evaluate."

         Ivy then requested, in writing, that the Garcias repair many of the issues identified in the Barfield Inspection Report, including the issues related to the roof, the HVAC system, and the electrical system. The Garcias refused to make the requested repairs but instead offered to increase the purchase price of the home by $3, 500 and to pay $3, 500 towards Ivy's closing costs. According to Wanda Garcia, she and her husband declined to make any of the requested repairs because they "believed that [they] were selling [their] home below its market value" and that their offer, if accepted, would "free[] up some cash that Ms. Ivy would not have to pay at closing that she could use to make [the requested] repairs." Ivy accepted the Garcias' proposal and did not exercise her option to terminate the purchase contract. Instead, the parties executed an amendment to the purchase contract to reflect the agreed-to increase in the price of the Property as well as the Garcias' corresponding obligation to pay part of Ivy's closing costs. On August 24, 2015, Ivy closed on her purchase of the Property at the renegotiated price.

         On August 17, 2017, Ivy filed suit against the Garcias asserting various claims related to the condition of the Property, including claims for common law fraud, violations of the Texas Deceptive Trade Practices Act (DTPA), breach of fiduciary duty, negligent misrepresentation, conspiracy, and intentional infliction of emotional distress. Common to all of Ivy's claims is the allegation that the Garcias failed to disclose certain facts or made misleading and false statements about the condition of the Property. The Garcias filed an answer generally denying all of Ivy's allegations and, later, a traditional motion for summary judgment on all of Ivy's claims.

         Following a non-evidentiary hearing, the trial court granted the Garcias' motion and signed a final summary judgment dismissing all of Ivy's claims. In one issue on appeal, Ivy contends that the trial court erred in granting summary judgment in favor of the Garcias on her claims for violations of the DTPA, fraud, and misrepresentation.[1]


         We review the trial court's decision to grant summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). To prevail on a traditional motion for summary judgment, a movant must establish that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a. In reviewing the trial court's ruling, we take as true all evidence favorable to the nonmovant, indulge every reasonable inference in the nonmovant's favor, and resolve any doubts in the nonmovant's favor. Provident Life & Accident Ins. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). A defendant who moves for traditional summary judgment on the plaintiff's claim must conclusively negate at least one element of the plaintiff's cause of action or conclusively establish each element of an affirmative defense to the claim. KCM Fin.LLC v. Bradshaw, 457 S.W.3d 70, 79 (Tex. 2015).


         In their motion for summary judgment, and now on appeal, the Garcias assert that Ivy's claims for violations of the DTPA, fraud, and misrepresentation are defeated, as a matter of law, by the as-is clause in the parties' purchase contract and by the independent inspection conducted by Larkin at Ivy's request. In support of their argument, the Garcias cite to Prudential Insurance Company of America v. Jefferson Associates, 896 S.W.2d 156, 161 (Tex. 1995). In that case, the Texas Supreme Court considered the effect of an as-is clause in the context of a commercial real estate transaction and concluded that the clause precluded the buyer from recovering damages based on the seller's alleged failure to disclose potential asbestos in the building. Id. In reaching this conclusion, the Supreme Court recognized that a buyer who agrees to purchase something "as is" agrees to make his own appraisal of the bargain and accept the risk that he may be wrong. Id. Moreover, by choosing to "rely entirely upon his own determination of the condition and value of his purchase," the buyer "removes the possibility that the ...

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