Jungran Lim and B.K. Lim v. Floyd Baker and Dolores Baker--Appeal from 225th Judicial District Court of Bexar County

MEMORANDUM OPINION
No. 04-06-00703-CV
Jungran LIM and B.K. Lim,
Appellants
v.
Floyd BAKER and Dolores Baker,
Appellees
From the 225th Judicial District Court, Bexar County, Texas
Trial Court No. 2004-CI-01148
Honorable John D. Gabriel, Jr., Judge Presiding

Opinion by: Catherine Stone, Justice

 

Sitting: Catherine Stone, Justice

Sandee Bryan Marion, Justice

Phylis J. Speedlin, Justice

 

Delivered and Filed: November 28, 2007

 

AFFIRMED

Jungran and B.K. Lim sued Floyd and Dolores Baker asserting various causes of action arising from the Lims' purchase of the Bakers' home. The Bakers filed both a traditional and no-evidence motion for summary judgment, and the trial court granted summary judgment in favor of the Bakers without specifying a basis. Because the Lims purchased the home pursuant to an "as is" agreement, and there is no evidence of fraudulent inducement, we affirm the trial court's judgment. (1)

Background

On September 6, 2002, the Lims entered into a sales contract with the Bakers to purchase the Bakers' home for $1,150,000.00. Both the Lims and the Bakers were represented by real estate agents in the transaction. Pursuant to the contract, the Lims accepted the property "in its present condition." On the Seller's Disclosure Notice, Mr. Baker checked that the Bakers were not aware of any water penetration but noted that he had replaced six windows.

Prior to closing, the Bakers provided the Lims with a copy of a 1999 property inspection report prepared by AmeriSpec Home Inspection Service. The report contained numerous observations regarding staining under windows and damage to wood around windows. In addition to the AmeriSpec report, the Bakers sent the Lims' agent a list of the repairs that they had performed with regard to the house. The list included: (1) the replacement of wood due to wood rot; (2) the recaulking of all downstairs windows; and (3) the replacement of dining room windows, left front living room window, large window at stairway, two small windows at stairway, and left window in media room.

The Lims hired their own property inspector and signed a "walk thru" and acceptance form stating they had reviewed the property inspector's report. Richard Rodriguez with American Home Pro inspected the property and prepared the report. In his report, Mr. Rodriguez noted water rot/fungi in several areas, and "approximately - 10 - window frame/trim water damaged." In his deposition, Mr. Rodriguez clarified that the fungi actually consisted of mushrooms growing out of the window frame. After reviewing this report, the Lims obtained an estimate for various repairs, including repairs to windows. After the estimate was obtained, the parties negotiated and signed an addendum to the sales contract pursuant to which the Bakers agreed to pay the Lims $10,000.00 "in lieu of repairs." In addition, the addendum provided that a "[m]old test must show no content of stachyvotrys nycotoxin to close this sale." The Lims obtained a mold test report prior to closing.

In October of 2002, shortly after the Lims moved into the house, the Lims alleged that nearly every window in the house began leaking profuse amounts of brown water into the house during a heavy rainfall. The Lims sued various parties including the Bakers. The trial court granted summary judgment in favor of the Bakers.

Standard of Review

We review a trial court's summary judgment de novo. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 156-157 (Tex. 2004). When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Id. The party moving for summary judgment bears the burden to show that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Id. Because the trial court did not specify the basis for its ruling, we will affirm if any ground supports the ruling. Browning v. Prostok, 165 S.W.3d 336, 344 (Tex. 2005).

Discussion

Proof of causation is essential for recovery on all of the Lims' causes of action against the Bakers. See Prudential Ins. Co. of America v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 160-61 (Tex. 1995); Larsen v. Carlene Langford & Assocs., Inc., 41 S.W.3d 245, 249-50 (Tex. App.--Waco 2001, pet. denied). By agreeing to purchase something "as is," a buyer agrees to make his own appraisal of the bargain and to accept the risk that he may be wrong. Prudential Ins. Co. of America, 896 S.W.2d at 161. The sole cause of a buyer's injury in such circumstances, by his own admission, is the buyer himself. Id. He has agreed to take the full risk of determining the value of the purchase and removes the possibility that the seller's conduct will cause him damage. Id.

In determining whether an "as is" agreement is enforceable, the nature of the transaction and the totality of the circumstances surrounding the agreement must be considered. Id. at 162. In this case, the "as is" clause was an important part of the basis of the bargain as evidenced by the parties' negotiation of an addendum when the inspection report revealed the need for repairs. Moreover, both parties were represented by real estate agents, and the agreement was freely negotiated in an arms-length transaction. Accordingly, the "as is" agreement was enforceable unless the Bakers fraudulently induced the Lims into making the agreement or impaired the Lims' inspection of the house. See id.

The Lims do not allege that the Bakers impaired their inspection of the house; however, they do allege that they were fraudulently induced to enter into the sales contract based on the Bakers' failure to disclose the water penetration problem. To successfully raise the counter-defense of fraudulent inducement, the Lims must present some evidence sufficient to raise a fact issue on each element of a simple fraud claim. Larsen, 41 S.W.3d at 253.

In order for the Lims to have been fraudulently induced, they had to rely on statements made by the Bakers or the Bakers had to conceal material information. See id. In this case, the record conclusively established that the Lims obtained their own inspection report that disclosed the water penetration problem. See Dubrow v. Dragon, 746 S.W.2d 857, 860 (Tex. App.--Dallas 1988, no writ) (noting inspection provided basis for purchase and superseded any wrongful act by buyer); Lim v. Lomeli, No. 04-06-00389-CV, 2007 WL 2428078, at *3-4 (Tex. App.--San Antonio Aug. 29, 2007, no pet. h.) (holding reliance and causation elements of claims defeated by professional inspections). Moreover, the Bakers provided the Lims with both an earlier inspection report disclosing damage caused by water penetration and a list of the repairs they had made. Although the Lims rely on evidence that the Bakers had contacted the prior owner regarding the windows they replaced due to leaks, the Bakers disclosed that they replaced the windows, and Mr. Baker testified that he did not continue to experience water leaking into the house after the windows were replaced. While the Bakers did not check that they were aware that water penetration was a problem on the seller's disclosure, they did note that they had replaced six windows. Based on the information the Lims received from the reports, they separately negotiated a $10,000.00 discount off the purchase price based on their estimate of the cost to repair the problems disclosed in the inspection report. A seller of a house is charged only with disclosing such material facts as to put a buyer exercising reasonable diligence on notice of the condition of the house. Cole v. Johnson, 157 S.W.3d 856, 860-61 (Tex. App.--Fort Worth 2005, no pet.). In this case, the record conclusively establishes that the Bakers sufficiently disclosed the water penetration problem, and the Lims were on notice through the disclosures and the inspection reports regarding the condition of the house. Therefore, the Lims failed to raise a fact issue on their counter-defense of fraudulent inducement.

Conclusion

The judgment of the trial court is affirmed.

Catherine Stone, Justice

 

1. In reaching our decision in this appeal, we consider only the Bakers' motions, the Lims' responses to those motions, and the summary judgment evidence submitted in support of those motions and responses. Tex. R. Civ. P. 166a(c); see generally Timothy Patton, Summary Judgments in Texas, 7.01 (3d ed. 2006).