Juanita V. Garza v. Wells Fargo Home Mortgage, Inc. & Alamo Title Company--Appeal from 45th Judicial District Court of Bexar County

MEMORANDUM OPINION
No. 04-03-00391-CV
Juanita V. GARZA,
Appellant
v.
WELLS FARGO HOME MORTGAGE, INC., and ALAMO TITLE COMPANY,
Appellees
From the 45th Judicial District Court, Bexar County, Texas
Trial Court No. 2003-CI-06360
Honorable David Peeples, Judge Presiding (1)

Opinion by: Phylis J. Speedlin, Justice

Sitting: Catherine Stone, Justice

Sarah B. Duncan, Justice

Phylis J. Speedlin, Justice

Delivered and Filed: August 25, 2004

AFFIRMED

Juanita Garza appeals from a summary judgment granted in favor of Wells Fargo Home Mortgage, Inc., and Alamo Title Company. We affirm the judgment of the trial court.

In April 2000, Garza entered into an earnest money contract for the purchase of a home owned by Richard and Stella Nelson. The contract referenced the sellers' disclosure notice as an addendum, and receipt of the disclosure notice was acknowledged by Garza. No real estate agents were involved in the transaction. Texas Homeplace Mortgage financed the purchase, but eventually assigned its interest to Wells Fargo. Delia Araujo, an escrow agent for Alamo Title, handled the closing on April 26, 2000. Garza took possession of the house and, approximately four months later, began to suspect possible foundation and plumbing problems. Garza contacted Alamo Title and requested a copy of the sellers' disclosure notice, which Garza claimed she had not previously received. The disclosure notice revealed that the sellers were aware of "some settling of foundation/small cracks on patio slab." Within seven days of receiving the disclosure notice, Garza notified the sellers, Alamo Title and Wells Fargo that she was terminating the contract and seeking a refund of her money. She stopped making payments to Wells Fargo on her mortgage loan, and Wells Fargo filed a foreclosure action.

Garza filed suit against the sellers, Texas Homeplace Mortgage, Wells Fargo, and Alamo Title asserting claims for deceptive trade practices, breach of contract, fraud and Federal Trade Commission Act violations -- all based on the sellers' failure to provide the disclosure notice. Garza maintained that 5.008 of the Texas Property Code gives her the right to terminate the contract, and any related assignments, pertaining to the purchase of her home. See Tex. Prop. Code Ann. 5.008 (Vernon Supp. 2004) (requiring seller to disclose property conditions). Wells Fargo and Alamo Title moved for summary judgment arguing that all of Garza's causes of action against them were predicated upon a misapplication of 5.008. The trial court granted both summary judgments and severed Garza's suit against Wells Fargo and Alamo Title, (2) thereby making the summary judgments final and appealable.

The ultimate issue on appeal is whether the trial court correctly determined that, as a matter of law, 5.008 of the Texas Property Code does not give Garza any cause of action against Wells Fargo and Alamo Title. We conclude that it did. The statute is entitled "Seller's Disclosure of Property Condition," and provides in pertinent part:

(a) A seller of residential real property ... shall give to the purchaser of the property a written notice as prescribed by this section or ... a written notice substantially similar ... which contains, at a minimum, all of the items in the notice prescribed by this section ...

(d) The notice shall be completed to the best of seller's belief and knowledge as of the date the notice is completed and signed by the seller ...

(f) The notice shall be delivered by the seller to the purchaser on or before the effective date of an executory contract binding the purchaser to purchase the property. If a contract is entered without the seller providing the notice required by this section, the purchaser may terminate the contract for any reason within seven days after receiving the notice.

Tex. Prop. Code Ann. 5.008 (a), (d), (f) (Vernon Supp. 2004) [emphasis added].

In interpreting a statute, we begin with the "plain and common meaning of the statute's words." McIntyre v. Ramirez, 109 S.W.3d 741, 745 (Tex. 2003). If the statutory language is unambiguous, we interpret the statute according to its plain meaning. Id. The plain language of 5.008 clearly imposes the duty to provide the disclosure notice exclusively on the seller of the property. The Houston Court of Appeals, Fourteenth District, recently recognized this when it held the disclosure notice required by 5.008 is a disclosure by the seller only, and not by the seller and broker regardless of whether the broker has also signed the disclosure notice. See Sherman v. Elkowitz, 130 S.W.3d 316, 321 (Tex. App.--Houston [14th Dist.] 2004, no pet.). Thus, the listing broker and realty company could not be held liable for any alleged misrepresentations or nondisclosures in the seller's disclosure notice. Id.

If the legislature had intended mortgage companies and title companies to be liable for a seller's failure to make a disclosure required by 5.008, or to provide the disclosure notice at all, it could have included a phrase indicating such intent. See Laidlaw Waste Sys. (Dallas), Inc. v. City of Wilmer, 904 S.W.2d 656, 659 (Tex. 1995) (stating rule of statutory construction that when legislature uses a term in one section of statute, but excludes it in another section, the term should not be implied where excluded). The fact that the statute uses the term "seller" throughout all of its provisions, and specifically includes an additional entity, the "seller's agent," in subsection (c) and in no other subsections, indicates that the legislature intended the disclosure duty to apply only to the seller of the property. The unambiguous statutory language of 5.008 does not impose a disclosure duty on Wells Fargo or Alamo Title, and does not give rise to a cause of action against them based on the sellers' violation of 5.008.

Garza has no cause of action against Wells Fargo or Alamo Title under 5.008 of the Texas Property Code. All of Garza's other causes of action against Wells Fargo and Alamo Title are predicated on her misinterpretation of 5.008. We hold, therefore, that the trial court properly granted summary judgment in favor of Wells Fargo and Alamo Title. See Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 476-77 (Tex. 1995) (defendant is entitled to summary judgment if at least one element of each of plaintiff's causes of action is negated as a matter of law); see also Nixon v. Mr. Property Mgmt. Co., 690 S.W.2d. 546, 548-49 (Tex. 1985) (in reviewing a summary judgment, we consider the evidence and resolve any doubts in favor of the non-movant). We need not address Garza's other issues on appeal because they too flow from her misinterpretation of 5.008. The motions to dismiss the appeal filed by Wells Fargo and Alamo Title are denied as moot.

Phylis J. Speedlin, Justice

1. The Honorable Barbara Nellermoe is the presiding judge of the 45th District Court. The Honorable David Peeples, presiding judge of the 224th District Court, however, signed the order granting Wells Fargo's motion for summary judgment. The Honorable Solomon Casseb, Jr., Senior District Judge, signed the order granting Alamo Title's motion for summary judgment.

2. By order dated April 29, 2003, the trial court severed the summary judgments granted in favor of Wells Fargo and Alamo Title, and all related pleadings, from Cause No. 2001-CI-03118 into Cause No. 2003-CI-06360.