Kawecki, Andrew and Kawecki, Joanna v. International Bank of Commerce--Appeal from 189th District Court of Harris County

Affirmed and Memorandum Opinion filed July 31, 2003

Affirmed and Memorandum Opinion filed July 31, 2003.

In The

Fourteenth Court of Appeals

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NO. 14-01-01025-CV

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ANDREW KAWECKI AND JOANNA KAWECKI, Appellants

V.

INTERNATIONAL BANK OF COMMERCE, Appellee

On Appeal from the 189th District Court

Harris County, Texas

Trial Court Cause No. 00-17597

M E M O R A N D U M O P I N I O N

Appellants, Andrew and Joanna Kawecki, appeal from a summary judgment dismissing their three DTPA claims of failure to disclose, misrepresentation, and breach of warranty, plus their claims of negligence, negligent misrepresentation, fraudulent concealment and civil conspiracy against appellee International Bank of Commerce ( IBC ). We affirm.

Factual Background

The Kaweckis purchased an unfinished home located at 17206 Cedar Placid Lane, Houston, Texas in the Northgate Forest subdivision on September 2, 1998 from IBC, successor to University State Bank.[1] Over a year earlier, on August 5, 1997, Northgate Forest Community Association, Inc. filed a Notice of Noncompliance with Dedicatory Instruments in the real property records of Harris County, which listed six violations of deed restrictions on the property. The homeowners= association informed IBC about the notice. IBC corrected some of the violations, but did not bring the landscaping into full compliance with the deed restrictions. The property was not in compliance with the deed restrictions while it was for sale.

The Kaweckis signed an as is earnest money contract on August 1, 1998 to purchase the home, which contained an addendum disclosing the deed restrictions. They never had direct contact with anyone from IBC or the title company prior to the closing. At the closing on September 2, 1998, IBC executed and delivered a Special Warranty Deed to the Kaweckis. The Kaweckis signed an amended title commitment that day that listed the notice of noncompliance on an interior page. Before the closing no one advised them the property had a recorded notice of noncompliance with deed restrictions. Less than six weeks later, the Kaweckis received a demand letter from the homeowners= association ordering them to bring the property into compliance with deed restrictions. They incurred unplanned debt and spent substantial sums of money to comply with the deed restrictions. They contend they would not have bought the property if IBC had disclosed the Notice of Noncompliance to them and if they had known they would be required to install the landscaping immediately after purchasing the house.

Procedural Background

In April 2000, the Kaweckis sued IBC for damages related to the nondisclosure of the notice of noncompliance with the deed restrictions.[2] In their live pleading the Kaweckis alleged DTPA violations of failure to disclose information, misrepresentation, and breach of warranty as well as negligence, negligent misrepresentation, fraudulent concealment[3] and civil conspiracy to defraud claims. They sought economic, mental anguish and treble damages along with attorneys= fees.

In April 2001, IBC filed a no-evidence motion for summary judgment, and alternatively, a partial motion for summary judgment to which the Kaweckis responded. After overruling the Kaweckis= special exceptions and objections to IBC=s motion for summary judgment, the trial court granted the motion for summary judgment without stating the basis of its ruling. The Kaweckis filed a notice of appeal.

Issues Presented

The Kaweckis= brief lists the following issues:

A. Whether there was more than a scintilla of evidence of 1) failure to disclose under the DTPA, 2) civil conspiracy, 3) fraudulent concealment, 4) detrimental reliance, 5) producing causation, 6) breach of warranty, 7) mental anguish, and 8) economic damages;

B. Whether the sale of real property as is is a complete defense to a DTPA claim for failure to disclose;

C. Whether the earnest money contract=s clause regarding the survival of representations of the parties applied also to the as is clause in the earnest money contract;

D. Whether, even if the as is clause survived closing, the as is clause waived the Kaweckis= rights under the fraudulent nondisclosure provisions of the DTPA;

E. Whether imputed notice of the Harris County Real Property Records defeats the Kaweckis= right to submit evidentiary issues of intent to induce and detrimental reliance to the trier of fact; and

F. Whether there is a presumption of intentional misconduct under the DTPA when the consumer can show objective manifestations that a defendant acted intentionally.

 Kaweckis= Waiver of Issues

The Kaweckis did not assert a general assignment of error that the trial court erred in granting the summary judgment. When, as here, the trial court renders a general summary judgment, the nonmoving party on appeal must raise a general point of error stating generally that the trial court erred in granting the summary judgment, or the nonmoving party must negate each specific ground raised in the motion and on which the trial court could have granted summary judgment. Malooly Brothers, Inc. v. Napier, 461 S.W.2d 119, 121 (Tex. 1970). Therefore, our review is limited to the issues the Kaweckis have raised and argued on appeal. The remaining claims are waived.

Standard of Review

In reviewing a summary judgment in which the trial court has not provided the basis for its decision, we must review each ground asserted in the motion and affirm the trial court=s judgment if any of these grounds is meritorious. See Star Telegram, Inc. v. Doe, 915 S.W.2d 471, 473 (Tex. 1995); Rogers v. Ricane Enter., Inc., 772 S.W.2d 76, 79B80 (Tex. 1989). As referenced above, the appellant is required to specifically attack each possible basis for summary judgment to avoid a waiver of those grounds, unless appellant included a general issue complaining of summary judgment. Warner v. Orange County, 984 S.W.2d 357, 358 (Tex. App.CBeaumont 1999, no pet.) (citing Parrish v. Brooks, 856 S.W.2d 522, 527 (Tex. App.CTexarkana 1993, writ denied). If summary judgment may have been granted, properly or improperly, on a ground not challenged, the summary judgment must be affirmed. Warner, 984 S.W.2d at 358 (citing Holloway v. Starnes, 840 S.W.2d 14, 23 (Tex. App.CDallas 1992, writ denied)).

The function of a summary judgment is not to deprive a litigant of its right to a full hearing on the merits of any real issue of fact but is to eliminate patently unmeritorious claims and untenable defenses. See Gulbenkian v. Penn, 151 Tex. 412, 416, 252 S.W.2d 929, 931 (1952). A no evidence summary judgment is essentially a pretrial directed verdict, to which we apply the same legal sufficiency standard of review. Id.

A no evidence summary judgment should be sustained in any of the following situations: (1) there is a complete absence of proof of a vital fact; (2) the court is barred by rules of law or evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence conclusively establishes the opposite of a vital fact. Dagley v. Haag Eng g Co., 18 S.W.3d 787, 793 (Tex. App.CHouston [14th Dist.] 2000, no pet.). We examine the evidence in the light most favorable to the nonmovant and disregard all evidence and inferences to the contrary. Blan v. Ali, 7 S.W.3d 741, 747 (Tex. App.CHouston [14th Dist.] 1999, no pet.); Lampasas v. Spring Ctr., Inc., 988 S.W.2d 428, 432 (Tex. App.CHouston [14th Dist.] 1999, no pet.).

A no evidence summary judgment is improperly granted if the non-movant counters with more than a scintilla of probative proof to raise a genuine issue of material fact. Id. More than a scintilla of proof exists when the proof rises to a level that would enable reasonable and fair minded people to differ in their conclusions. See Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997) (quoting Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex. 1994)).

A Rule 166a(i) motion must specifically set forth the elements of the adverse party=s claim for which there is no evidence. Tex. R. Civ. P. 166a (i); Lake Charles Harbor & Terminal Dist. v. Bd. of Trs. of Galveston Wharves, 62 S.W.3d 237, 241 (Tex. App.CHouston [14th Dist.] 2001, pet. denied). The motion cannot be conclusory or generally allege that there is no evidence to support the claims. Id. Unlike a movant for traditional summary judgment, a movant for a no evidence summary judgment does not bear the burden of establishing a right to judgment by proving each claim or defense. Id. By filing the motion, the movant shifts the burden to the non-movant. A non-movant will defeat a Rule 166a(i) motion for summary judgment only by presenting the court with some evidence on each element of his claim for which the movant asserts there is no evidence. The non-movant is not required to marshal its proof, but should identify more than a scintilla of evidence raising a fact issue on the challenged elements. See Tex. R. Civ. P. 166a (i) cmt. A non movant puts forth less than a mere scintilla of evidence when that which is proffered is so weak as to do no more than create a mere surmise or suspicion Cthe effect being that there is no evidence offered. Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983); Hight v. Dublin Veterinary Clinic, 22 S.W.3d 614, 619 (Tex. App.CEastland 2000, pet. denied).

IBC alternatively filed a motion for a traditional summary judgment. In that instance, the movant has the burden of showing, with competent proof, that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a;Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). When a defendant is the movant for summary judgment, the defendant has the burden to conclusively negate at least one essential element of the plaintiff=s cause of action or conclusively establish each element of an affirmative defense. Castillo v. Westwood Furniture, Inc., 25 S.W.3d 858, 860 (Tex. App.CHouston [14th Dist.] 2000, no pet.). If the movant s motion and summary judgment proof facially establish a right to judgment as a matter of law, the burden shifts to the non movant to raise a material fact issue sufficient to defeat summary judgment. Id. In deciding whether a disputed material fact issue precluding summary judgment exists, we resolve every reasonable inference in favor of the non movant and take all evidence favorable to the non movant as true. Nixon, 690 S.W.2d at 548B49; Castillo, 25 S.W.3d at 860.

Summary judgment evidence may include deposition transcripts, interrogatory answers, pleadings, affidavits, and other discovery responses referenced or set forth in the motion or response. Tex. R. Civ. P. 166a(c). The evidence must, however, be presented in a form that would be admissible at trial. See United Blood Servs. v. Longoria, 938 S.W.2d 29, 30 (Tex. 1997). The Kaweckis filed special exceptions and made objections to IBC=s motion for summary judgment, which the trial court overruled. However, they assert no issues on appeal complaining that the trial court erred in these rulings. Therefore, any error in denying the exceptions and objections is waived. Tex. R. App. P. 38.1 (e).

Negligence and Civil Conspiracy Claims

The portion of the Kaweckis= brief regarding the grant of the traditional summary judgment contains only argument that [t]here are genuine issue [sic] of material fact that are questions for a jury to consider on fraud, misrepresentation, conspiracy, concealment, and DTPA issues with no record references and no citation to legal authority for elements of the negligence and civil conspiracy claims. In fact, the Kaweckis do not address their negligence claim at all and only present argument about the civil conspiracy claim. The argument portion of a brief must contain a clear and concise argument for the contentions made, with appropriate citations to [legal] authorities and to the record. Tex. R. App. P. 38.1(h). The Kaweckis also make global references to several depositions for specific factual support.[4] As an appellate court, we are not required to search the record, without more specific guidance from the Kaweckis, for a scintilla of evidence raising a material fact issue on any claim, but in this instance, particularly the Kaweckis= negligence and civil conspiracy claims. See Hall v. Stephenson, 919 S.W.2d 454, 467 (Tex. App.CFort Worth 1996, writ denied). Likewise, we have no duty to search the record for other possible trial court error. Harkins v. Dever Nursing Home, 999 S.W.2d 571, 573 (Tex. App.CHouston [14th Dist.] 1999, no pet.). Therefore, we affirm summary judgment on the negligence and civil conspiracy claims.

No Evidence of Damages

In its motion for a no evidence summary judgment, IBC challenged all of the causes of action alleged by the Kaweckis contending they had no evidence to support one or more of the necessary elements of each claim. Essentially, IBC challenged the existence of any evidence of liability, causation and damages. IBC also argued that as a matter of law, the Kaweckis could not recover due to IBC=s affirmative defenses of actual and constructive notice of deed restriction violations, and waiver due to the as is provision in the Earnest Money Contract.

Finding it dispositive, we address IBC=s argument that there is no evidence of damages, an element common to all of the causes of action asserted by the Kaweckis. The Kaweckis=summary judgment evidence consisted of depositions, the affidavit of an attorney for the homeowners=association, Plaintiffs=Second Supplemental Response to Defendants=Request for Disclosure, and unauthenticated documents allegedly produced in discovery. We examine the Kaweckis= citations to this evidence to determine whether it contains more than a scintilla of probative evidence of damages. See Stephan v. Baylor Med. Ctr. at Garland, 20 S.W.3d 880, 891 (Tex. App.CDallas 2000, no pet.).

Economic Damages

To be entitled to damages for DTPA violations, fraud and negligent misrepresentation, a party must plead and prove economic damages. See Gulf States Utils. Co. v. Low, 79 S.W.3d 561, 566B67 (Tex. 2002); Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 681 (Tex. 2000); Formosa Plastics Corp. USA v. Presidio Eng rs and Contractors, Inc., 960 S.W.2d 41, 49 (Tex. 1998); Fed. Land Bank Ass n v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991). Yet, the summary judgment evidence conclusively proved the opposite of a vital factCnamely that the Kaweckis suffered no economic damages.

The Kaweckis understood, before they bought the home, that the neighborhood was governed by deed restrictions. Both Mr. and Mrs. Kawecki testified they recognized they had to install landscaping after they bought the unfinished home. They knew there was a high standard for landscaping in the Northgate subdivision. They knew their new home had minimal landscaping and they realized they would have to install landscaping comparable to that of their neighbors. Further, before buying the home, Mr. Kawecki had even estimated it would cost approximately $25,000 to install landscaping. Their total landscaping costs were less than this. As part of the summary judgment evidence, they introduced documents reflecting a total of $18,445.54 incurred for landscaping.

The second part of the Kaweckis= claim for economic damages also is unsupported. The Kaweckis allege they had to make significant, costly improvements to the property far ahead of the time they would have implemented a major relandscaping [sic] program. In their brief, they charge they were forced to incur unplanned debt at high interest rates to bring their home into compliance with the deed restrictions. Yet, no evidence was presented to the trial court to substantiate these allegations of damages. In his deposition, Mr. Kawecki testified that this lawsuit was all about the fact that they had to finish the landscaping before they had planned and budgeted to do it. Their damages allegations imply that the Kaweckis were damaged by the time value of money and a resulting injury to their credit, because they had to borrow money to install the landscaping before they anticipated. But, the record contains no evidence addressing out-of-pocket costs for landscaping versus debt allegedly incurred, the cost of carrying the alleged debt, or injury, if any, to their credit rating due to borrowing for landscaping. Rather, in their deposition testimony before the trial court, the Kaweckis specified the total cost of the landscaping installation as their economic damages and submitted a document with back-up that listed landscaping costs totaling $18,745.54.

Because the Kaweckis (1) admitted that before buying the home, they recognized a need to spend approximately $25,000 to bring their landscaping in line with that of the neighborhood; and (2) spent less than what they anticipatedC$18,745.54Con landscaping after buying the home, coupled with no evidence specifying the cost of credit or injury to their credit reputation, we find no evidence of economic damages. With no evidence of economic damages suffered as a result of the alleged nondisclosure of the Notice of Noncompliance, the Kaweckis could not recover on their causes of action for DTPA violations, fraud or negligent misrepresentation.

Mental Anguish Damages

The Kaweckis also claim they suffered mental anguish. Under the DTPA, if the trier of fact finds that the defendant acted knowingly, the plaintiff also may recover damages for mental anguish and additional statutory damages up to three times the amount of economic damages. Tex. Bus. & Com. Code Ann. ' 17.50 (b) (1) (Vernon 2002). Damages for mental anguish cannot be awarded without either direct evidence of the nature, duration, or severity of [plaintiffs=] anguish, thus establishing a substantial disruption in the plaintiffs= daily routine, or other evidence of a high degree of mental pain and distress that is more than mere worry, anxiety, vexation, embarrassment, or anger. Saenz v. Fid. & Guar. Ins. Underwriters, 925 S.W.2d 607, 614 (Tex. 1996); Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995). As the non-movants to a no-evidence summary judgment motion, the Kaweckis were required to introduce evidence of the nature, duration, and severity of their mental anguish. Id. The record must reflect more than a scintilla of evidence that the Kaweckis suffered a high degree of mental pain and distress C more than mere worry, anxiety, vexation, embarrassment, or anger. Id. Mr. Kawecki testified in his deposition he suffered no mental anguish outside of the aggravation of litigation. Mrs. Kawecki testified at her deposition that she was irritable and angry, and at times she could not sleep at night. In addition, she said she had severe muscle spasms, headaches, and severe shaking pains in her arms. However, she also admitted having been in an auto accident in Houston that injured her as well as having undergone two surgeries prior to moving to Houston that caused her postoperative pain. In her deposition, she confessed that the muscle spasms, headaches and shooting pains in her arms were remnants of her two prior surgeries, not damages as a result of IBC=s conduct.

Evidence in support of mental anguish damages must provide specific details of the nature, duration and severity of the mental anguish. Simply because a plaintiff says he or she suffered mental anguish does not constitute evidence of the nature, duration, and severity of any mental anguish that is sufficient to show a substantial disruption of one=s daily routine. Gunn Infiniti, Inc. v. O=Byrne, 996 S.W.2d 854, 861 (Tex. 1999). Conclusory statements are not sufficient. See Gonzales v. Temple-Inland Mortg. Corp., 28 S.W.3d 622, 626 (Tex. App.CSan Antonio 2002, no pet.) (citing Gunn Infiniti, Inc., 996 S.W.2d at 861 and Ryland Group, Inc. v. Hood, 924 S.W.2d 120, 122 (Tex. 1996)). Other than their deposition testimony, the Kaweckis produced no evidence of mental anguish such as affidavits or medical records in response to IBC=s motion for summary judgment. None of the summary judgment evidence gave specific details of the Kaweckis= mental anguish attributable to IBC=s nondisclosure of the Notice of Noncompliance with Dedicatory Instruments. It did not establish a substantial disruption in their daily routine, or other evidence of a high degree of mental pain and distress that is more than mere worry, anxiety, vexation, embarrassment, or anger. Parkway, 901 S.W.2d at 444 (citation omitted). In other words, the Kaweckis= deposition testimony is too conclusory to raise a genuine issue of material fact as to whether they sustained mental anguish damages. Therefore, we hold that the Kaweckis presented no evidence of mental anguish damages.

Conclusion

Because the Kaweckis failed to provide a scintilla of evidence of economic or mental anguish damages recoverable under any of their asserted claims, in particular those claims upon which they presented issues and briefed on appeal, namely DTPA, fraud and negligent misrepresentation, the trial court properly granted summary judgment. See Verinakis v. Med. Profiles, Inc., 987 S.W.2d 90, 96 (Tex. App.CHouston [14th Dist.] 1998, pet. denied). The first issue is overruled.

As a result of our disposal of the first issue, we need not address the remaining issues, which challenge whether IBC established the affirmative defenses of an as is clause, waiver, and actual and constructive notice of a filing in the real property records as a matter of law. Finding no error in the trial court=s judgment, we affirm.

/s/ Wanda McKee Fowler

Justice

Judgment rendered and Memorandum Opinion filed July 31, 2003.

Panel consists of Justices Yates, Anderson, and Fowler.

[1] IBC owned the home as a result of foreclosure, after its borrower, a builder, defaulted.

[2] The Kaweckis also sued First American Title Insurance Company of Texas, Inc.; however, the trial court granted summary judgment in favor of First American and severed it from the main case. First American is not a party to this appeal.

[3] As a preliminary matter, we note that the Kaweckis have pled fraudulent concealment. Fraudulent concealment is an equitable doctrine that provides an affirmative defense to the statute of limitations. See Weaver v. Witt, 561 S.W.2d 792, 793 (Tex. 1977) (per curiam); Santanna Natural Gas Corp. v. Hamon Operating Co., 954 S.W.2d 885, 890 (Tex. App.CAustin 1997, pet. denied). Like the discovery rule, proof of fraudulent concealment tolls accrual of limitations. See Kanon v. Methodist Hosp., 9 S.W.3d 365, 368 (Tex. App.CHouston [14th Dist.] 1999, no pet.) (citing to Borderlon v. Peck, 661 S.W.2d 907, 908 (Tex. 1983); Dougherty v. Gifford, 826 S.W.2d 668, 673 (Tex. App.CTexarkana 1992, no writ)). It is not an independent cause of action. Mayes v. Stewart, 11 S.W.3d 440, 452 (Tex. App.CHouston [14th Dist.] 2000, pet. denied); see Chandler v. Chandler, 991 S.W.2d 367, 394 (Tex. App.CEl Paso 1999, pet. denied). We believe the Kaweckis meant to plead fraudulent nondisclosure. Therefore, we, like IBC and the trial court, will treat their fraudulent concealment claim as one for fraudulent nondisclosure which requires proof of the same elements as fraud. Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 181 (Tex. 1997).

[4] In addition, we note that both parties failed to file any appendix to their briefs in violation of Tex. R. App. P. 38.1 (j) (1) and 38.2 (a) (1). In particular, ready access to the Earnest Money Contract with its exhibit and addendums, the Special Warranty Deed, and the Notice of Noncompliance would have been helpful to the Court.