Bow Grove v. Marion Gine Franke and Brenda Kay Lynch ( 2019 )


Menu:
  •                                        In The
    Court of Appeals
    Ninth District of Texas at Beaumont
    __________________
    NO. 09-18-00119-CV
    __________________
    BOW GROVE, Appellant
    V.
    MARION GINE FRANKE AND BRENDA KAY LYNCH, Appellees
    __________________________________________________________________
    On Appeal from the 410th District Court
    Montgomery County, Texas
    Trial Cause No.15-05-05374-CV
    __________________________________________________________________
    MEMORANDUM OPINION
    The underlying litigation arose from the sale of a log home in Montgomery
    County, Texas. Bow Grove purchased the property from Henric Ekehed, 1 and
    Marion Gine Franke and Brenda Kay Lynch acted as Henric’s real estate agents (the
    Agents). 2 Dissatisfied with the condition of the home after purchase, Grove initially
    1
    We refer to the seller by his first name.
    2
    Brenda Kay Lynch is also referred to as Brenda King in the record. Lynch
    acted as Henric’s agent, and Franke owned the real estate agency.
    1
    sued Henric. In his third amended petition, Grove added Henric’s wife and the
    Agents as defendants. Grove’s sole cause of action against the Agents is statutory
    fraud in a real estate transaction. 3 Grove appeals the trial court’s order granting
    summary judgment in favor of the Agents, as well as the trial court’s order awarding
    the Agents their attorney’s fees. In two issues, Grove contends: (1) the trial court
    erred in granting the Agents’ summary judgment on his statutory fraud claim
    because the contract language did not operate as an “as-is” clause; and (2) the trial
    court erred in awarding attorney’s fees to the Agents when the contractual clause
    merged with the deed. 4 We affirm the trial court’s judgment.
    I. Background
    In January 2013, Henric listed his 1930’s log home and acreage for sale.
    Henric completed a Texas Association of Realtors Seller’s Disclosure Notice dated
    January 10, 2013. The Seller’s Disclosure Notice did not note any issues with wood
    rot or wood destroying insects (WDI). In February 2014, Henric entered into a
    contract with potential buyers. During that process, the potential buyers had the
    3
    Grove asserted additional causes of action against the Ekeheds, including
    common law fraud, breach of contract, a Texas Deceptive Trade Practices Act claim,
    and negligent misrepresentation.
    4
    The trial court granted summary judgment in favor of Henric’s wife but
    denied summary judgment in favor of Henric. Grove ultimately settled his claims
    against Henric, and the Ekeheds are not parties to this appeal.
    2
    property inspected. According to Grove, that inspection uncovered extensive wood
    rot and damage from WDI. Grove alleged that Henric offered the potential buyers a
    $50,000.00 price reduction because of the wood rot and WDI damage, and the
    Agents were “fully informed and aware of the extensive wood rot damage and WDI
    damage discovered[.]” Ultimately, the potential buyers terminated the contract.
    Following this unsuccessful sale of the property, Henric hired a contractor to replace
    a number of logs on the home totaling 196 linear feet. The quote from the contractor
    noted that additional logs would need to be replaced “in due time.” Henric, though,
    did not amend his Seller’s Disclosure Notice after these events.
    On May 9, 2014, Grove and Henric executed a TREC earnest money contract
    for the purchase of the property with a sales price of $461,000.00. Grove purchased
    a $100.00 option allowing him to terminate the contract within a set time period.
    Grove hired his own inspector to inspect the log cabin and prepare a report. The
    inspector admittedly had never examined a log home prior to this property and was
    unaware that to properly inspect a log home, he needed to tap each individual log
    with a hammer to check for wood rot. The inspector identified several other
    significant problems with the property, including electrical issues, potential roofing
    issues, and issues with the foundation. The inspector noted in his report that the
    exterior walls included logs with some areas of wood shingles, and the wood
    3
    shingles had reached the end of their useful life. He also noted areas of rotten wood
    fascia under the window near one of the air conditioning units. The inspector did not
    specifically identify any rotten logs during his inspection. The inspector testified in
    his deposition that he did not recall reviewing the Seller’s Disclosure Notice before
    inspecting the property and that he typically does not rely on those disclosures as
    they are commonly inaccurate. Grove had a separate termite inspection performed
    on the property and the inspector did not identify any active WDI.
    Based on the inspection report, Grove and his real estate agent sought
    monetary concessions from Henric against the purchase price. Henric agreed to
    reduce the purchase price by $13,000.00. The standard Texas Real Estate
    Commission (TREC) contract form the parties signed contained two options under
    “Acceptance of Property Condition.” The options were “(1) Buyer accepts the
    Property in its present condition[, or] (2) Buyer accepts the Property in its present
    condition provided Seller, at Seller’s expense, shall complete the following specific
    repairs and treatments[.]” The parties chose the first option and closed on the
    property on May 23, 2014. The Agents included the sales contract as summary
    judgment evidence.
    After occupying the property, Grove experienced multiple problems, many of
    which his inspector identified and listed in the report prior to purchase. Grove denied
    4
    performing any repairs on the property after taking possession. Grove testified that
    he could not recall if he reviewed the Seller’s Disclosure Notice prior to purchasing
    the property, yet he also testified that he relied on it when he decided to purchase the
    property because no major issues were identified in the disclosure to draw his
    attention to the notice.
    On appeal, Grove only complains of the wood rot and WDI damage to the
    home. 5 He sued Henric for common law fraud, breach of contract, statutory fraud in
    a real estate transaction, Texas DTPA violations, and negligent misrepresentation.
    The only claim he asserted against the Agents was for statutory fraud in a real estate
    transaction. The Agents’ first amended answer asserted a counter-claim for
    attorney’s fees based on a provision in the TREC earnest money contract.
    After conducting discovery, the Agents moved for traditional and no-evidence
    summary judgment. The Agents asserted that there was no evidence of the following
    elements in a statutory fraud in a real estate transaction cause of action, specifically:
    (1) that during the transaction the Agents made a false representation of fact, made
    a false promise, or benefitted by not disclosing that a third party’s representation was
    false; (2) that the false representation was made for the purpose of inducing Grove
    5
    In his live pleading, he complains of other things, which included items
    expressly mentioned as deficient in his inspector’s report; however, he does not raise
    them on appeal.
    5
    to enter into the contract; (3) that Grove relied on the false representation by entering
    into the contract; and (4) that the reliance caused Grove’s injury. In their traditional
    motion for summary judgment, the Agents argued that the “as-is” provision in the
    contract coupled with the plaintiff’s own inspections of the property negated the
    reliance element of the cause of action. Grove responded to the Agents’ no-evidence
    motion arguing evidence existed on every element of the cause of action. He further
    argued in response to the Agents’ traditional motion for summary judgment that any
    “as-is” language in the contract merged into the deed at closing and that fraudulent
    inducement precluded enforcement of the “as-is” provision; therefore, the “as-is”
    language failed to negate the element of reliance. The trial court granted the Agents’
    motion without specifying the grounds. The Agents then moved for an award of
    attorney’s fees, which the trial court granted in a final judgment. Grove timely
    appealed.
    II. Issue One: Summary Judgment
    A. Standard of Review
    We review a trial court’s decision to grant summary judgment de novo. See
    Shell Oil Co. v. Writt, 
    464 S.W.3d 650
    , 654 (Tex. 2015) (citation omitted). We view
    the evidence in the light most favorable to the nonmovant. 
    Id. (citing City
    of Keller
    v. Wilson, 
    168 S.W.3d 802
    , 824 (Tex. 2005)). In doing so, we indulge every
    6
    reasonable inference and resolve any doubts against the motion. See City of 
    Keller, 168 S.W.3d at 824
    . “Undisputed evidence may be conclusive of the absence of a
    material fact issue, but only if reasonable people could not differ in their conclusions
    as to that evidence.” Buck v. Palmer, 
    381 S.W.3d 525
    , 527 (Tex. 2012) (citation
    omitted).
    When a no-evidence motion has been filed, it “is essentially a pretrial directed
    verdict, and we apply the same legal sufficiency standard in reviewing a no-evidence
    summary judgment as we apply in reviewing a directed verdict.” See King Ranch,
    Inc. v. Chapman, 
    118 S.W.3d 742
    , 750–51 (Tex. 2003) (citations omitted).
    A no evidence point will be sustained when (a) there is a complete
    absence of evidence of a vital fact, (b) the court is barred by rules of
    law or of evidence from giving weight to the only evidence offered to
    prove a vital fact, (c) the evidence offered to prove a vital fact is no
    more than a mere scintilla, or (d) the evidence conclusively establishes
    the opposite of the vital fact.
    Merrell Dow Pharms., Inc. v. Havner, 
    953 S.W.2d 706
    , 711 (Tex. 1997) (citation
    omitted).
    A party moving for traditional summary judgment has the burden of
    establishing there is no genuine issue of material fact as to at least one requisite
    element of the asserted cause of action and that it is entitled to judgment as a matter
    of law. See Tex. R. Civ. P. 166a(c); Lightning Oil Co. v. Anadarko E&P Onshore,
    LLC, 
    520 S.W.3d 39
    , 45 (Tex. 2017) (citations omitted). When the trial court fails
    7
    to specify the grounds on which it granted summary judgment, we must affirm if any
    of the summary judgment grounds are meritorious. FM Props. Operating Co. v. City
    of Austin, 
    22 S.W.3d 868
    , 872–73 (Tex. 2000) (citation omitted); Palma v. Chribran
    Co., 
    327 S.W.3d 866
    , 869 (Tex. App.—Beaumont 2010, no pet.) (citations omitted).
    B. Analysis
    In his first issue, Grove contends that the contract language in this case did
    not operate as an “as-is” clause. On appeal, Grove points to the facts and
    circumstances test in Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd. and
    Henric’s alleged fraudulent inducement as vitiating the “as-is” clause. See 
    896 S.W.2d 156
    , 162 (Tex. 1995).
    Grove asserted a single claim against the Agents for statutory fraud in a real
    estate transaction. See Tex. Bus. & Com. Code Ann. § 27.01 (West 2015).
    The elements of statutory fraud in a real estate transaction are a: “(1)
    false representation of a past or existing material fact, when the false
    representation is (A) made to a person for the purpose of inducing that
    person to enter into a contract; and (B) relied on by that person in
    entering into that contract; or (2) false promise to do an act, when the
    false promise is (A) material; (B) made with the intention of not
    fulfilling it; (C) made to a person for the purpose of inducing that person
    to enter into a contract; and (D) relied on by that person in entering into
    that contract.”
    Flynn v. Keller Williams Inc., No. 04-12-00307-CV, 
    2013 WL 979196
    , at *2 (Tex.
    App.—San Antonio Mar. 13, 2013, no pet.) (mem. op.) (quoting Tex. Bus. & Com.
    8
    Code Ann. § 27.01(a)). 6 Reliance is a requisite element for a claim of statutory fraud
    in a real estate transaction. Tex. Bus. & Com. Code Ann. § 27.01(a)(1)(B);
    Schlumberger Tech. Corp. v. Swanson, 
    959 S.W.2d 171
    , 182 (Tex. 1997); Van
    Duren v. Chife, 
    569 S.W.3d 176
    , 185 (Tex. App.—Houston [1st Dist.] 2018, no pet.).
    Buyers who contract to purchase something “as-is” agree to make their own
    appraisal of the bargain and to accept the risk that they may be wrong. 
    Prudential, 896 S.W.2d at 161
    ; Van 
    Duren, 569 S.W.3d at 185
    . An enforceable as-is clause
    negates the element of reliance on claims relating to the sale. 
    Prudential, 896 S.W.2d at 161
    ; Williams v. Dardenne, 
    345 S.W.3d 118
    , 124 (Tex. App.—Houston [1st Dist.]
    2011, pet. denied). “Contract language stating that the buyer accepts the property in
    its present condition constitutes an ‘as[-]is’ clause.” LBM Invs., Inc. v. Caribe
    Props., Inc., No. 09-13-00060-CV, 
    2013 WL 5658555
    , at *2 (Tex. App.—Beaumont
    Oct. 17, 2013, pet. denied) (mem. op.) (citations omitted); see also Van 
    Duren, 569 S.W.3d at 185
    (noting that numerous courts have held present condition clauses
    6
    Although not mentioned in the motion for summary judgment or response
    as a required element of statutory fraud in a real estate transaction, “when a plaintiff
    seeks to hold a real estate broker or agent liable for the misrepresentations of another,
    the plaintiff must prove the broker or agent (1) knew of the falsity of the
    misrepresentation or concealment; and (2) failed to disclose the party’s knowledge
    of the falsity of the misrepresentation or concealment.” Flynn v. Keller Williams
    Inc., No. 04-12-00307-CV, 
    2013 WL 979196
    , at *2 (Tex. App.—San Antonio Mar.
    13, 2013, no pet.) (mem. op.) (citing Tex. Occ. Code Ann. § 1101.805(e), (f) (West
    Supp. 2018)).
    9
    operate as as-is clauses) (citing Luftak v. Gainsborough, No. 01-15-01068-CV, 
    2017 WL 2180716
    , at *3 (Tex. App.—Houston [1st Dist.] May 18, 2017, no pet.) (mem.
    op.)).
    Under Prudential, when determining the enforceability of an as-is clause, we
    examine the nature of the transaction and totality of the circumstances, including
    “(1) whether the as-is clause is an important part of the basis of the bargain, not an
    incidental or boilerplate provision, (2) the parties are sophisticated, of relatively
    equal bargaining position, (3) the contract was freely negotiated, and (4) the contract
    was an arm’s length transaction.” LBM, 
    2013 WL 5658555
    , at *2 (citing 
    Prudential, 896 S.W.2d at 162
    ). Despite Grove’s contention otherwise, the provision contained
    in this standard TREC contract was not boilerplate. The contract provided two
    options from which the parties could choose, and Grove agreed to accept the
    property in its present condition. Grove’s other contract clause option was to accept
    the property subject to the seller’s completion of certain repairs. See Van 
    Duren, 569 S.W.3d at 186
    –87. “A mandatory form contractual provision that requires the parties
    in any given transaction to choose from two or more options is by definition
    negotiable and not boilerplate.” 
    Id. at 187
    (citations omitted). The record revealed
    both parties had experience in purchasing real estate, and real estate agents
    represented both parties. Grove does not dispute the parties’ level of sophistication
    10
    or the relatively equal bargaining position. See LBM, 
    2013 WL 5658555
    , at *3. There
    is no evidence in the record to contradict that the parties freely negotiated the
    contract at arm’s length. See 
    id. Rather, the
    record reveals Grove negotiated a price
    reduction of $13,000.00 through his agent. We conclude the language contained in
    this TREC contract that Grove agreed to accept the property “in its present
    condition” operated as an as-is clause. See Van 
    Duren, 569 S.W.3d at 190
    ; LBM,
    
    2013 WL 5658555
    , at *3.
    The Prudential Court outlined two exceptions to the enforcement of an “as-
    is” clause. See 
    Prudential, 896 S.W.2d at 162
    . First, the court explained that a buyer
    would not be bound to an “as-is” provision in a contract if he was fraudulently
    induced. See 
    id. Second, the
    Court noted that a buyer would not be bound by an “as-
    is” agreement if the seller impairs his ability to inspect the property. See 
    id. Grove asserts
    on appeal that he was fraudulently induced to enter into the contract,
    precluding the application of the “as-is” clause. Grove relies on Henric’s Seller’s
    Disclosure Notice and a statement he made in an email regarding the replacement of
    logs. Having conclusively established the contract contained a valid “as-is” clause,
    the burden shifted to Grove to raise a genuine issue of material fact as to the clause’s
    enforceability. See LBM, 
    2013 WL 5658555
    , at *4 (“‘In the context of a summary
    judgment proceeding, fraudulent inducement is in the nature of a counter-defense
    11
    responding to the defense raised by the seller.’”) (quoting Fryar v. Mees, No. 10-06-
    00135-CV, 
    2007 WL 1218221
    , at *2 (Tex. App.—Waco Apr. 25, 2007, no pet.)
    (mem. op.)). To show fraudulent inducement by the Agents, however, Grove must
    show that they made a false material representation, that they knew it was false when
    made, intended to induce reliance, and did induce reliance. See Van 
    Duren, 569 S.W.3d at 188
    (citing 
    Williams, 345 S.W.3d at 125
    ).
    The law imposes a duty on sellers of real property, not their agents, to
    complete the Seller’s Disclosure Notice. 
    Id. (citing Tex.
    Prop. Code Ann. § 5.008(a),
    (d) (West Supp. 2018)). The form promulgated by the Texas Association of Realtors
    clearly states the representations in the disclosure are exclusively those of the seller.
    See Sherman v. Elkowitz, 
    130 S.W.3d 316
    , 320–21 (Tex. App.—Houston [14th
    Dist.] 2004, no pet.); see also Van 
    Duren, 569 S.W.3d at 188
    . A broker generally
    cannot be held liable for omissions or misrepresentations in the form, because they
    did not make them. See 
    Sherman, 130 S.W.3d at 320
    –21. There is an exception if
    the Agents had reason to believe the seller’s disclosures are false or inaccurate. 
    Id. at 321;
    Van 
    Duren, 569 S.W.3d at 188
    .
    Grove argues that the Agents “judicially admitted that their client fraudulently
    concealed the state of the log structure of the cabin.” Grove points to the statement
    that the Agents “were aware the previous potential buyers advised that they
    12
    cancelled the sales contract because of the condition of the logs on the outside of the
    home.” However, the quoted statement, without more, is not sufficient to impute
    actual knowledge to the Agents that the condition involved wood rot or WDI nor is
    it sufficient to create a reasonable inference that the Agents had reason to believe the
    Seller’s Disclosure Notice was false. There is no evidence the prior potential buyers
    provided the Agents with their inspection reports. Additionally, there is no evidence
    in the record that the Agents ever read or reviewed the Seller’s Disclosure Notice.
    Grove also points to Henric’s email stating that he had the foundation checked
    when he replaced some logs as being indicative of the Agents’ awareness of
    problems with the logs. The email only evidences that Henric replaced some logs.
    There is no evidence that the Agents knew other logs required repair or replacement
    at the time Henric sent the email. “Knowledge of past repairs does not establish
    knowledge of a present defect[.]” Van 
    Duren, 569 S.W.3d at 188
    (explaining the fact
    that the agent being copied on email correspondence does not support a reasonable
    inference that the agent knew of undisclosed defects) (citing Birnbaum v. Atwell,
    No. 01-14-00556-CV, 
    2015 WL 4967057
    , at *7 (Tex. App—Houston [1st Dist.]
    August 20, 2015, pet. denied) (mem. op.); 
    Sherman, 130 S.W.3d at 322
    )).
    There is no evidence that the Agents hindered Grove from obtaining an
    independent inspection of the property. When a buyer has agreed to an as-is clause,
    13
    he “assumes the responsibility of assessing the property’s value and condition as
    well as the resulting risk that the property is worth less than the price paid.” 
    Williams, 345 S.W.3d at 124
    (citing 
    Prudential, 896 S.W.2d at 161
    ). The buyer’s evaluation
    “constitutes a new and independent basis for the purchase, one that disavows any
    reliance on representations made by the seller.” 
    Id. (citations omitted).
    The record
    reveals Grove hired his own inspector, but his inspector had no prior experience
    inspecting log homes, and he did not perform the inspection accurately. Grove
    asserts the defects in the logs were not readily observable, but the record does not
    support this. Rather, the inspector’s deposition testimony reveals that he did not
    know to bring a hammer to tap the logs and check for rot, but he would do so in the
    future. Grove’s reliance on this independent inspection is borne out by his
    subsequent negotiation of a price reduction based on the inspection report and other
    defects, such as the foundation and electrical issues. Grove agreed to accept the
    property “as-is” and hired his own inspector to check for defects. His reliance on an
    individual inexperienced in log home inspections cannot be held against the Agents
    when the record does not support a reasonable inference that they knew of existing
    defects or hindered the inspection process.
    14
    The present condition clause negates the reliance element of Grove’s claim
    against the Agents as a matter of law. Because Grove failed to raise a genuine issue
    of material fact as to any exception precluding the clause’s enforceability, we
    conclude the trial court properly granted the Agents’ traditional motion for summary
    judgment on his claim of statutory fraud in a real estate transaction. See Van 
    Duren, 569 S.W.3d at 190
    ; LBM, 
    2013 WL 5658555
    , at *4. We overrule Grove’s first
    issue. 7, 8
    7
    Grove also argues that the as-is clause in the contract is unenforceable,
    because it merged into the deed at closing. However, several cases cited above allow
    for enforcement of this identical provision from a TREC contract after closing. See
    Van Duren v. Chife, 
    569 S.W.3d 176
    , 190 (Tex. App.—Houston [1st Dist.] 2018, no
    pet.); LBM Invs., Inc. v. Caribe Props., Inc., No. 09-13-00060-CV, 
    2013 WL 5658555
    , at *2 (Tex. App.—Beaumont Oct. 17, 2013, pet. denied) (mem. op.)
    (citations omitted). Further, Grove cannot sue for statutory fraud in a real estate
    transaction based on the Seller’s Disclosure Notice required by this very contract
    then attempt to eliminate the Agents’ defenses based on the contract by arguing it
    merged into the deed. See Munawar v. Cadle Co., 
    2 S.W.3d 12
    , 17 (Tex. App.—
    Corpus Christi 1999, pet. denied) (noting doctrine of merger does not apply to claims
    of fraud).
    8
    Having determined the trial court properly granted the Agents’ traditional
    motion for summary judgment, it is unnecessary for us to address Grove’s assertion
    the trial court improperly granted their no-evidence motion. See Tex. R. App. P.
    47.1.
    15
    III. Issue Two: Attorney’s Fees
    A. Standard of Review
    We generally review an award for attorney’s fees under an abuse of discretion
    standard. See EMC Mortg. v. Davis, 
    167 S.W.3d 406
    , 418 (Tex. App.—Austin 2005,
    pet. denied) (citation omitted). A trial court that acts without reference to any guiding
    principles, arbitrarily or unreasonably abuses its discretion. 
    Id. (citation omitted).
    B. Analysis
    In their first amended answer, the Agents counterclaimed for attorney’s fees
    based on a provision in the earnest money contract. Specifically, paragraph 17 of the
    earnest money contract provides “ATTORNEY’S FEES: A Buyer, Seller, Listing
    Broker, Other Broker, or escrow agent who prevails in any legal proceeding related
    to this contract is entitled to recover reasonable attorney’s fees and all costs of such
    proceeding.” After the trial court granted their motion for summary judgment, the
    Agents moved for an award of attorney’s fees. In support of their motion, the Agents
    included the earnest money contract and an affidavit of counsel attesting to the
    amount of attorney’s fees, among other things. The trial court awarded the Agents
    their attorney’s fees.
    16
    Grove argues that the doctrine of merger prohibits an award of attorney’s
    fees.9 He contends the clause in the earnest money contract allowing a prevailing
    party to recover attorney’s fees and costs merged into the deed at closing, so the
    Agents cannot recover fees and costs. 10 The merger doctrine provides that once a
    deed has been executed and accepted as performance on an earnest money contract
    for a real estate conveyance, the rights and duties created by the earnest money
    contract merge into the deed when the seller delivers and the buyer accepts the deed.
    See Commercial Bank, Unincorporated, of Mason, Tex. v. Satterwhite, 
    413 S.W.2d 905
    , 909 (Tex. 1967). “‘Though the terms of the deed may vary from those contained
    in the contract, still the deed must be looked to alone to determine the rights of the
    parties.’” Alvarado v. Bolton, 
    749 S.W.2d 47
    , 48 (Tex. 1988) (quoting Baker v.
    Baker, 
    207 S.W.2d 244
    , 249 (Tex. Civ. App.—San Antonio 1947, writ ref’d n.r.e.)).
    The doctrine of merger does not bar claims of fraud, accident, or mistake in
    transactions leading up to the deed. Munawar v. Cadle Co., 
    2 S.W.3d 12
    , 17 (Tex.
    App.—Corpus Christi 1999, pet. denied); see also Head v. Finley, 2-03-296-CV,
    
    2004 WL 1699895
    , at *7 (Tex. App.—Fort Worth July 29, 2004, pet. denied) (mem.
    op.). “To adopt the position that written real estate contracts are never actionable
    9
    Grove conceded the fees were reasonable during the hearing and only
    contested the Agents’ entitlement to recover fees.
    10
    There is no copy of the deed in the record.
    17
    upon delivery of a deed, would foreclose every cause of action for deceptive trade
    practices or fraud in the sale of real estate, unless the misrepresentation appeared in
    the deed itself.” 
    Munawar, 2 S.W.3d at 17
    (citation omitted). When the earnest
    money contract contains contractual obligations apart from the mere conveyance of
    property, the merger doctrine does not apply. Harris v. Rowe, 
    593 S.W.2d 303
    , 306–
    07 (Tex. 1979) (citation omitted).
    Grove relied on the Seller’s Disclosure Notice required under the earnest
    money contract when he sued, despite the doctrine of merger and cannot now attempt
    to use that doctrine to preclude his payment of attorney’s fees. See Head, 
    2004 WL 1699895
    , at *7. “Absent a contract or statute, trial courts do not have inherent
    authority to require a losing party to pay the prevailing party’s [attorney’s] fees.”
    Tony Gullo Motors I, L.P. v. Chapa, 
    212 S.W.3d 299
    , 311 (Tex. 2006) (citation
    omitted). Here, the contract provided that a non-prevailing party in a legal
    proceeding relating to the contract is obligated to pay fees. As the non-prevailing
    party, Grove is obligated to pay the fees as ordered by the trial court. See id.; see
    also Lawson v. Keene, 03-13-00498-CV, 
    2016 WL 767772
    , at *6 (Tex. App.—
    Austin Feb. 23, 2016, pet. denied) (mem. op.) (concluding the identical TREC
    provision allows for an award of attorney’s fees when a party sued for fraud,
    18
    negligent misrepresentation, and breach of fiduciary duty). We overrule Grove’s
    second issue.
    IV. Conclusion
    The present condition language in the contract operated as an as-is clause
    negating the element of reliance. Grove failed to submit any evidence to create a
    genuine issue of material fact regarding the enforceability of the clause.
    Accordingly, the trial court properly granted the Agents’ motion for summary
    judgment. The doctrine of merger does not preclude enforcement of the as-is clause
    or an award of attorney’s fees to a prevailing party based on a provision in the earnest
    money contract after a deed is executed and delivered. We overrule Grove’s issues
    on appeal and affirm the trial court’s judgment.
    AFFIRMED.
    _________________________
    CHARLES KREGER
    Justice
    Submitted on March 6, 2019
    Opinion Delivered October 17, 2019
    Before McKeithen, C.J., Kreger and Johnson, JJ.
    19