Jungran Lim and B.K. Lim v. Eliseo Lomeli, SATEX Properties, Inc. and Best Homes GMAC Real Estate--Appeal from 225th Judicial District Court of Bexar County

MEMORANDUM OPINION
No. 04-06-00389-CV
Jungran and B.K. LIM,
Appellants
v.

Eliseo LOMELI, SATEX PROPERTIES, INC., and BEST HOMES GMAC REAL ESTATE,

Appellees
From the 225th Judicial District Court, Bexar County, Texas
Trial Court No. 2006-CI-06538
Honorable Janet P. Littlejohn, Judge Presiding

Opinion by: Catherine Stone, Justice

 

Sitting: Catherine Stone, Justice

Karen Angelini, Justice

Steven C. Hilbig, Justice

 

Delivered and Filed: August 29, 2007

 

AFFIRMED

This appeal arises out of a suit for damages arising from the purchase of a home with numerous defects. The purchasers of the home, Jungran and B.K. Lim, appeal the trial court's grant of summary judgment in favor of Eliseo Lomeli, Satex Properties, Inc., and Best Homes GMAC Real Estate. We affirm the judgment of the trial court.

Factual and Procedural Background

Viewed in the light most favorable to the Lims, the summary judgment record reveals that in September 2002, Floyd and Dolores Baker listed their home for sale with Ann Reese, a real estate agent with the Phyllis Browning Company. The Lims found the Bakers' house listing through their own real estate agent, Eliseo Lomeli. The Bakers offered to sell the house to the Lims for $1,150,000, and the parties executed a contract that gave the Lims a ten-day termination option. During the ten-day period, the Lims hired Richard Rodriguez to perform an inspection of the house. Rodriguez issued an inspection report which contained multiple findings regarding potential water damage throughout the house.

After the inspection, Lomeli met with Rodriguez to discuss the inspection findings, and then met with Mrs. Lim to discuss the report. In her affidavit, Mrs. Lim stated that Lomeli specifically told her during this meeting "not to worry" about the areas of wood rot and possible water penetration that were found during the inspection as these were "minor" issues. However, Lomeli did advise Mrs. Lim that she should be concerned about a large panoramic window, and he suggested they should get estimates about the cost to repair the window. Mrs. Lim obtained an estimate of approximately $10,000 to fix the window. After being presented with this estimate, the Bakers agreed to pay the Lims "$10,000.00 in lieu of repairs."

Lomeli then advised the Lims to accept the Bakers' offer to pay them the $10,000 and to close on the sales contract, which included a clause stating that the "buyer accepts the property in its present condition." Lomeli advised Mrs. Lim that this clause was nothing to worry about and that it would not apply in the event the Lims found something wrong with the house beyond the panoramic window. The Lims allege they relied on Lomeli's representations about the inspection findings and the acceptance clause when deciding to purchase the house.

In October of 2002, within two weeks of the Lims' closing on the house, the San Antonio area experienced a very heavy rainfall and the Lims allege that nearly every window leaked "profuse amounts of brown water into the house" which stained the paint and window sills throughout the house. Additionally, they stated that vast amounts of water ran down the walls, puddled on the window sills, and stained the carpet.

This case was originally filed by the Lims against Floyd and Dolores Baker, the sellers; Phyllis Browning Company, the sellers' agent; Richard Rodriguez, the inspector; Lomeli, their real estate agent; and Satex and Best Homes, which were Lomeli's employer and listing broker. In their second amended petition, the Lims accused Lomeli of negligent misrepresentation, fraudulent inducement, statutory fraud, DTPA violations, breach of duty of good faith and fair dealing, breach of fiduciary duty, negligence, and negligence per se. They also alleged that Satex should be held liable as a licensed broker under the Texas Occupations Code, and claimed that both Satex and Best Homes were vicariously liable. In response, Lomeli, Satex, and Best Homes jointly filed traditional and no-evidence motions for summary judgment challenging each of the Lims' claims. The trial court granted these motions without specifying which summary judgment motion was relied upon and severed the Lims' claims against Lomeli, Satex, and Best Homes from their claims against the other defendants.

On appeal, the Lims contend the no-evidence summary judgment should be reversed because the Lims presented more than a scintilla of evidence in support of each element of each of their claims. They also claim the traditional summary judgment should be reversed because Lomeli, Satex, and Best Homes failed to demonstrate that they are entitled to judgment as a matter of law in light of the numerous fact issues that exist in this case.

Standard of Review

The rules of civil procedure authorize a no evidence motion for summary judgment. Tex. R. Civ. P. 166a(i). After adequate time for discovery, a party may move for summary judgment on the ground that there is no evidence of one or more essential elements of a claim or defense on which an adverse party would have the burden of proof at trial. Id. The movant need not produce any proof in support of its no evidence claim. Id.; see also Judge David Hittner and Lynne Liberato, Summary Judgments in Texas, 34 Hous. L. Rev. 1303, 1356 (1998). The motion must allege with specificity a lack of evidence on an essential element of a cause of action. Denton v. Big Spring Hosp. Corp., 998 S.W.2d 294, 298 (Tex. App.-Eastland 1999, no pet.). Once a no evidence motion has been filed in accordance with Rule 166a(i), the burden shifts to the non-movant to bring forth evidence that raises a fact issue on the challenged element. Macias v. Fiesta Mart, Inc., 988 S.W.2d 316, 316-17 (Tex. App.-Houston [1st Dist.] 1999, no pet.). A no evidence motion is properly granted if the non-movant fails to bring forth more than a scintilla of probative evidence to raise a genuine issue of material fact as to an essential element of the nonmovant's claim on which the non-movant would have the burden of proof at trial. Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex.1997). If the evidence supporting a finding rises to a level that would enable reasonable, fair-minded persons to differ in their conclusions, then more than a scintilla of evidence exists. Id. Less than a scintilla of evidence exists when the evidence is so weak as to do no more than create a mere surmise or suspicion of a fact; the legal effect is that there is no evidence. Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.1983). In determining whether the non-movant has met his burden, we consider the evidence in the light most favorable to the non-movant. Gen. Mills Rests. Inc v. Tex. Wings, Inc., 12 S.W.3d 827, 833 (Tex. App.-Dallas 2000, no pet.).

The movant for a traditional summary judgment has the burden of showing no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). When deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the non-movant is taken as true and the court must indulge every reasonable inference and resolve any doubts in favor of the non-movant. Id. at 548-49. To be entitled to summary judgment, a defendant, as the movant, must either (1) conclusively negate at least one essential element of each of the plaintiff's causes of action, or (2) conclusively establish each element of an affirmative defense to each claim. Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). A summary judgment may be affirmed on any of the movant's theories which has merit. See Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 627 (Tex. 1996).

When a party moves for summary judgment under both Rules 166a(c) and 166a(i), we will first review the trial court's judgment under the standards of Rule 166a(i). Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). If the appellants fail to produce more than a scintilla of evidence under that burden, then there is no need to analyze whether the appellee's summary judgment proof satisfied the less stringent Rule 166a(c) burden. Id.

We review a trial court's decision to grant a summary judgment de novo. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). "When the trial court does not specify the basis for its summary judgment, the appealing party must show it is error to base it on any ground asserted in the motion." Star-Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995).

Professional Inspections

In his motions for summary judgment and on appeal, Lomeli argues that the professional inspections of the home negate the elements of reliance and causation as a matter of law. In support of his claims, Lomeli relies upon two cases in which Texas Courts of Appeals have held that independent inspections by the purchaser establish as a matter of law that the purchaser did not rely on another party's misrepresentation or failure to disclose. See Camden Machine & Tool, Inc. v. Cascade Co., 870 S.W.2d 304, 311 (Tex. App.-Fort Worth 1993, no writ); Dubow v. Dragon, 746 S.W.2d 857, 860-61 (Tex. App.-Dallas 1988, no writ).

In Dubow v. Dragon, the buyers visited a home on two occasions and noticed the home's poor condition. 746 S.W.2d at 858. Additionally, they hired several professionals to inspect the home, and the inspection reports found existing and potential problems throughout the home. Id. at 858-59. After receiving these reports, the Dubows negotiated a lower price for the home and signed a contract with an "as is" clause. Id at 859. The court of appeals upheld the summary judgment against the Dubows, concluding that the Dubows' careful inspection superseded the seller's wrongful conduct. Id. at 860-61.

In Camden Machine & Tool, Inc. v. Cascade Co., the buyer conducted his own investigation of the property and retained several contractors to provide him with estimates as to the extent of damage and repairs required. 870 S.W.2d at 311. The court held that the evidence showed that the buyer made his own investigation about necessary house repairs and knew the severity of the problems before purchasing the house. Id.

The summary judgment record in the instant case reveals that during the ten-day termination period, the Lims conducted their own investigation regarding the condition of the home. The Lims retained Richard Rodriguez, a licensed residential property inspector, to inspect the home. Rodriguez inspected the home and left pink dots of paper in the home to notify the Lims of where he saw problems with possible water penetration. Following his inspection, Rodriguez issued a report to the Lims, which they acknowledged receiving and reviewing. The report listed numerous areas of the home possibly requiring repair:

1. Water ponding along the wall adjacent to the water fountain.

2. Approximately 30 chipped or cracked roof tiles.

3. Detached skylight flashing.

4. Water seepage around circular gable vents.

5. Obvious crack/blister repairs.

6. East lower stair area door does not open; frame and trim water rot noted.

7. Unsealed flooring tile on a patio.

8. Water rot fungi noted in several window areas.

9. Fogged inner glass panes with seal leaks noted.

10. Window seal leaks in master bath.

11. Window frame/trim water damage noted on approximately 10 windows.

Following this inspection, the Lims obtained information indicating the presence of mold in the home, although apparently not any toxic molds. Additionally, the Lims received an inspection report from the sellers which indicated prior water penetration problems. Mrs. Lim obtained a repair estimate in the amount of $7,403.31 for many of the areas of concern noted in the Rodriguez report. This estimate indicated the repairs were for "cosmetic damage." Additionally, she obtained an estimate for $10,000 to repair or replace a defective panoramic window.

Although the Lims hired a professional to inspect the damage, they argue that they relied upon Lomeli's interpretation of the inspection report when deciding whether to buy the home. They allege that Lomeli had additional discussions with Ron Rogers of Pella Windows that revealed more water damage and higher repair costs which Lomeli never disclosed to them. The record does not support this allegation. Mrs. Lim testified that she could not remember the details of Lomeli's meeting with the Pella Windows representative, but she did have a vague recollection that Lomeli shared information with her regarding his meeting. This testimony is not evidence that Lomeli knew the home suffered from greater defects than what was revealed in the inspection reports and that he failed to share such knowledge with the Lims. The only evidence of Lomeli's knowledge about the extent of the defects is his testimony that he was unaware of any problems beyond what was visible and what was noted in the various professional inspection reports. This information was equally available to the Lims. We therefore conclude as a matter of law that because the Lims' hired professional inspectors and obtained and reviewed their reports, the Lims cannot establish that they detrimentally relied on Lomeli's alleged misrepresentations. In short, the Lims have failed to present more than a scintilla of evidence that Lomeli knew anything more or different than the Lims did about the condition of the home. The record establishes that his knowledge was derived from his viewing of the home with the Lims and from the inspection reports, which the Lims also received and reviewed. Because each of the causes of action alleged by the Lims require a showing of reliance or causation, (1)

the trial court properly entered summary judgment against the Lims on each of their asserted claims. Vicarious Liability and General Liability of a Broker

The Lims also allege that Satex and Best were vicariously liable for the acts and conduct of Lomeli under the doctrine of respondeat superior, as well as under section 1101.803 of the Texas Occupations Code, which states: "A licensed broker is liable to the commission, the public, and the broker's clients for any conduct engaged in under this chapter by the broker or by a salesperson associated with or acting for the broker." Tex. Occ. Code Ann. 1101.803 (Vernon 2004). Under the doctrine of respondeat superior, an employer is vicariously liable for the negligence of an employee acting within the scope of his employment. St. Joseph Hosp. v. Wolff, 94 S.W.3d 513, 541-42 (Tex. 2002). "It is fundamental that the agent's acts must be in some way wrongful before the principal can be 'liable' for the acts of the agent." Bradt v. West, 892 S.W.2d 56, 78 (Tex. App.-Houston [1st Dist.] 1994, writ denied). Because the Lims failed to produce more than a scintilla of evidence that they detrimentally relied on any misrepresentations by Lomeli, summary judgment in favor of Best and Satex was appropriate. See generally id. (holding that because the acts of the attorney-appellees were not wrongful, the appellants' case against the insurance company-appellees necessarily fails because the principal cannot be liable for the acts of its agent when those acts were not wrongful).

Conclusion

Based on the foregoing, the judgment of the trial court is affirmed.

Catherine Stone, Justice

1. See Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 478 (Tex. 1995) (holding that DTPA violation must be a producing cause of injury); Sears, Roebuck & Co. v. Meadows, 877 S.W.2d 281, 282 (Tex. 1994) (fraud and fraudulent inducement include elements of reliance and causation); Fed. Land Bank Ass'n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991) (negligent misrepresentation requires showing of justifiable reliance proximately causing damages); Jones v. Blume, 196 S.W.3d 440, 447 (Tex. App.-Dallas 2006, pet. denied.) (holding that breach of fiduciary duty requires showing that breach caused damages); Larsen v. Charlene Langford & Assocs., Inc., 41 S.W.3d 245, 249 (Tex. App.-Waco 2001, pet. denied) (statutory fraud requires showing of reliance and causation).