Frank Keathley and Melissa Keathley v. Corbitt Baker, Carroll Bobo D/B/A United Country Bobo Realty, and Molly Bob D/B/A United Country Bobo Realty ( 2009 )

NO. 12-07-00477-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
FRANK KEATHLEY AND MELISSA § APPEAL FROM THE
KEATHLEY,
APPELLANTS
V. § COUNTY COURT AT LAW #3
CORBITT BAKER, CARROLL BOBO
D/B/A UNITED COUNTRY BOBO
REALTY, AND MOLLY BOBO D/B/A
UNITED COUNTRY BOBO REALTY,
APPELLEES § SMITH COUNTY, TEXAS
MEMORANDUM OPINION
Frank Keathley and Melissa Keathley appeal the trial court’s summary judgments in favor
of Corbitt Baker, Carroll Bobo d/b/a United Country Bobo Realty, and Molly Bobo d/b/a United
Country Bobo Realty. The Keathleys raise three issues on appeal. We affirm in part, and reverse
and remand in part.
BACKGROUND
On October 16, 2003, Ruth Baker entered into a residential real estate listing agreement with
the Bobos to sell her house located in Tyler, Smith County, Texas. At some point, the Keathleys,
who were attempting to relocate to East Texas, became interested in purchasing Ruth’s house.
However, Ruth died on January 16, 2004. On February 20, 2004, Ruth’s son, Corbitt Baker, agreed
to sell Ruth’s house to the Keathleys and entered into a residential real estate contract (the
“contract”) with them. According to Frank Keathley, Corbitt and the Bobos informed him that
Corbitt had inherited Ruth’s house. Frank Keathley, a licensed real estate agent, represented himself
and his wife in the transaction. The closing date specified in the contract was June 1, 2004. Later,
the Bobos and Corbitt entered into an amended listing agreement for Ruth’s house.
Pursuant to its terms, the contract was submitted to a title company for closing. The title
policy commitment dated February 10, 2004 revealed that title to Ruth’s house was held by The
Bobby H. Baker and Ruth E. Baker Revocable Living Trust. The title commitment also revealed that
Corbitt’s father, Bobby H. Baker, and Ruth had divorced and that Bobby had conveyed his interest
in the house to Ruth. According to Corbitt, however, the trust was never amended or revoked. The
title company informed Corbitt that the company could not issue a title policy on the house unless
Corbitt’s father and his brother signed the deed conveying the house to the Keathleys. Corbitt’s
father and brother refused to do so despite Corbitt’s attempts to negotiate with them. Eventually,
Corbitt filed a declaratory judgment action to establish his title to the property. On September 16,
2005, Corbitt obtained a judgment establishing that he had clear title to Ruth’s house.
Although the Keathleys were aware that the trust held title to Ruth’s house, they were not
informed that Corbitt was having problems obtaining clear title. According to Frank Keathley,
Carroll Bobo told him that all Corbitt needed to do was probate the will or ask the judge to set his
mother’s house aside from the proceedings in order to sell it. In the meantime, the Keathleys still
believed that they would close on the house by the June 1 deadline and, according to Frank Keathley,
sold their home, were approved for a loan to purchase the house, and notified the parties that they
were ready to close. Frank Keathley stated that, at that time, he was informed by Carroll Bobo that
Corbitt had not obtained clear title to Ruth’s house, but was not told about the title dispute between
Corbitt and his father and brother. The closing did not occur on June 1, and the Keathleys sought and
purchased another property in September of 2004. On January 31, 2006, Corbitt informed the
Keathleys that he had cured the objections in the title commitment and was prepared to close on
Ruth’s house in seven days.
On February 3, 2006, the Keathleys filed suit against Corbitt and the Bobos, alleging
violations of the Deceptive Trade Practices Act (DPTA), breach of contract, common law and
statutory fraud, and negligent misrepresentation. More specifically, the Keathleys claimed that they
suffered damages because Corbitt was unable to complete the sale and the Bobos failed to inform
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them of the title problems. Corbitt filed a counterclaim against the Keathleys, alleging breach of
contract for failing or refusing to close in accordance with the contract once he had cured the title
objections. Corbitt and the Bobos then filed both traditional and no evidence motions for summary
judgment.1 After a hearing, the trial court granted Corbitt’s and the Bobos’ motions for summary
judgment, rendered a take nothing judgment against the Keathleys, and awarded Corbitt and the
Bobos attorneys fees.2 This appeal followed.
STANDARD OF REVIEW
The movant for traditional summary judgment has the burden of showing that there is no
genuine issue of material fact and that it is entitled to judgment as a matter of law. TEX . R. CIV . P.
166a(c); Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex. 1985). The movant must either
negate at least one essential element of the nonmovant's cause of action or prove all essential
elements of an affirmative defense. See Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640,
644 (Tex. 1995). Once the movant has established a right to summary judgment, the nonmovant has
the burden to respond to the motion and present to the trial court any issues that would preclude
summary judgment. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678-79
(Tex. 1979). A defendant moving for summary judgment on an affirmative defense has the burden
to conclusively establish that defense or, more specifically, prove each essential element of that
defense. Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); The Ryland Group, Inc.
v. Hood, 924 S.W.2d 120, 121 (Tex. 1996).
After adequate time for discovery, a party without the burden of proof at trial may move for
summary judgment on the ground that there is no evidence of one or more essential elements of a
claim or defense. TEX . R. CIV . P. 166a(i). Once a no evidence motion has been filed in accordance
1
Corbitt and the Bobos subsequently amended their traditional and no evidence motions for summary
judgment. All references in this opinion to their motions for summary judgment are to the amended motions.
2
Although the judgment does not specifically mention Baker’s counterclaim for breach of contract, the
judgment contains a Mother Hubbard clause denying all relief not expressly granted. Further, the judgment includes
unequivocal language that indicates finality by stating that “[t]his Judgment finally disposes of all parties and claims
and is appealable.” Thus, the judgment is final, and we have jurisdiction over this appeal. See In re Burlington
Coat Factory Warehouse of McAllen, Inc., 167 S.W .3d 827, 830 (Tex. 2005).
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with Rule 166a(i), the burden shifts to the nonmovant to bring forth evidence that raises a fact issue
on the challenged evidence. See Macias v. Fiesta Mart, Inc., 988 S.W.2d 316, 317 (Tex.
App.–Houston [1st Dist.] 1999, no pet.). We review a no evidence motion for summary judgment
under the same legal sufficiency standard as a directed verdict. King Ranch, Inc. v. Chapman, 118
S.W.3d 742, 750-51 (Tex. 2003). A no evidence motion is properly granted if the nonmovant 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 nonmovant would have the burden
of proof at trial. See id. at 751. 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, and the legal effect is that there is no evidence. See
id.
In both traditional and no evidence summary judgment motions, we review the entire record
in the light most favorable to the nonmovant, indulging every reasonable inference and resolving any
doubts against the motion. Sudan v. Sudan, 199 S.W.3d 291, 292 (Tex. 2006); KPMG Peat
Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). All theories in
support of or in opposition to a motion for summary judgment must be presented in writing to the
trial court. See TEX . R. CIV . P. 166a(c). If the trial court’s order granting summary judgment does
not specify the grounds relied on for the ruling, we will affirm if any of the theories advanced are
meritorious. State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 380 (Tex. 1993). When a party
moves for both a traditional and a no evidence summary judgment, we first review the trial court’s
summary judgment under the no evidence standard of Rule 166a(i). Ford Motor Co. v. Ridgway,
135 S.W.3d 598, 600 (Tex. 2004). If the no evidence summary judgment was properly granted, we
do not reach arguments under the traditional motion for summary judgment. See id.
LEGAL SUFFICIENCY OF THE NO EVIDENCE
MOTIONS FOR SUMMARY JUDGMENT
As part of their first issue, the Keathleys contend that portions of Corbitt’s and the Bobos’
no evidence summary judgment motions are legally insufficient. More specifically, they argue that
the motions fail to identify elements of their causes of action that are unsupported by evidence as
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required by rule 166a(i) of the Texas Rules of Civil Procedure.
Applicable Law
Summary judgments must stand on their own merits. Cuyler v. Minns, 60 S.W.3d 209, 212
(Tex. App.–Houston [14th Dist.] 2001, pet. denied). As set forth previously, a no evidence motion
for summary judgment must state the elements as to which the movant contends there is no evidence.
See Callaghan Ranch, Ltd. v. Killam, 53 S.W.3d 1, 3 (Tex. App.–San Antonio 2000, pet. denied).
The motion must be specific in challenging the evidentiary support for an element of a claim or
defense; conclusory motions or general no evidence challenges to an opponent’s case are not
authorized. Id. If a no evidence motion for summary judgment is not specific in challenging a
particular element or is conclusory, the motion is legally insufficient as a matter of law and may be
challenged for the first time on appeal. Id.; see also Crocker v. Paulyne’s Nursing Home, Inc., 95
S.W.3d 416, 419 (Tex. App.–Dallas 2002, no pet.); Cuyler, 60 S.W.3d at 213.
Analysis
In special exceptions to Corbitt’s and the Bobos’ no evidence motions for summary
judgment, the Keathleys complained to the trial court that four paragraphs of Corbitt’s motion (Nos.
28, 29, 33, and 43) and three paragraphs of the Bobos’ motion (Nos. 30, 31, and 43) failed to clearly
identify the grounds upon which summary judgment was urged. The trial court denied the
Keathleys’ special exceptions.
In paragraph 29 of Corbitt’s supplement to his no evidence motion for summary judgment
and paragraph 31 of the Bobos’ no evidence motion, Corbitt and the Bobos allege that the Keathleys
cannot produce evidence that Corbitt and the Bobos committed a wrongful, false, misleading or
deceptive act or that Corbitt’s and the Bobos’ actions were a producing cause of the Keathleys’
damage. By these allegations, Corbitt and the Bobos identified which elements of the Keathleys’
DTPA claims had no evidentiary support. See Killam, 53 S.W.3d at 3. Consequently, regarding the
challenged elements of the Keathleys’ DTPA claims, Corbitt’s paragraph 29 and the Bobos’
paragraph 31 are specific and, thus, legally sufficient.
In paragraph 28 of Corbitt’s no evidence motion and paragraph 30 of the Bobos’ no evidence
motion, they allege that there is no evidence of one or more elements on which the Keathleys have
the burden of proof under the DTPA. In paragraph 43 of Corbitt’s and the Bobos’ no evidence
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motions, they assert that there is no evidence of one or more elements of breach of contract on which
the Keathleys have the burden of proof. In paragraph 33 of Corbitt’s no evidence motion under a
section regarding a misrepresentation claim under the DTPA, Corbitt simply asserts that there is no
evidence of any violation of subsection 17.46(b)(19) of the DTPA. None of these contentions by
Corbitt or the Bobos identify the specific elements for which they contend there is no evidence.
These paragraphs are, at most, general no evidence challenges to the Keathleys’ DTPA causes of
action. See id. Moreover, paragraph 33 of Corbitt’s no evidence motion is conclusory. See id.
Because these paragraphs in Corbitt’s and the Bobos’ no evidence motions for summary
judgment do not specifically challenge a particular element of the Keathleys’ DTPA causes of action,
and paragraph 33 of Corbitt’s motion is also conclusory, these contentions are legally insufficient
to support their no evidence motions. See id. Thus, we conclude that paragraphs 28, 33, and 43 of
Corbitt’s no evidence motion and paragraphs 30 and 43 of the Bobos’ no evidence motion are legally
insufficient and that the trial court erred in denying the Keathleys’ special exceptions regarding these
paragraphs. Therefore, in our review of Corbitt’s and the Bobos’ no evidence motions for summary
judgment, we will not consider the assertions made in these paragraphs in support of the motions.
We overrule that portion of the Keathleys’ first issue regarding paragraph 29 of the
supplement to Corbitt’s no evidence motion and paragraph 31 of the Bobos’ no evidence motion.
We sustain that portion of the Keathleys’ first issue regarding paragraphs 28, 33, and 43 of Corbitt’s
no evidence motion, and paragraphs 30 and 43 of the Bobos’ no evidence motion.
OBJECTIONS TO EVIDENCE ATTACHED TO THE
TRADITIONAL MOTIONS FOR SUMMARY JUDGMENT
As part of their second issue, the Keathleys argue that the trial court erred in denying their
objections to portions of the evidence supporting Corbitt’s and the Bobos’ traditional motions for
summary judgment. An appellate brief must contain a clear and concise argument for the
contentions made, with appropriate citations to authorities and to the record. TEX . R. APP . P. 38.1(i).
Here, the Keathleys do not provide any argument or citations to authorities to demonstrate why the
trial court erred in denying their objections. The Keathleys’ argument consists only of conclusory
statements that they filed objections to Corbitt’s and the Bobos’ summary judgment evidence, that
the trial court denied their objections, and that they reurge those objections on appeal. Because the
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Keathleys have failed to provide an adequate substantive analysis of this issue, they have presented
nothing for our review. See TEX . R. APP . P. 38.1(i). Therefore, we overrule that portion of the
Keathleys’ second issue regarding the trial court’s order denying their objections to Corbitt’s and the
Bobo’s traditional motions for summary judgment.
THE KEATHLEYS’ CAUSES OF ACTION
In their first issue, the Keathleys argue that the trial court erred in granting Corbitt’s and the
Bobos’ no evidence motions for summary judgment. In their second issue, the Keathleys argue that
the trial court erred in granting Corbitt’s and the Bobos’ traditional motions for summary judgment.
Pursuant to the standard of review, we first examine each cause of action alleged by the Keathleys
to determine if they produced more than a scintilla of evidence supporting the challenged elements.
See Ridgway, 135 S.W.3d at 600. If the Keathleys failed to produce more than a scintilla of evidence
as to each such element, we do not review the traditional motions for summary judgment. See id.
However, if the Keathleys produced more than a scintilla of evidence as to any cause of action, we
examine whether the trial court properly granted Corbitt’s and the Bobos’ traditional motions for
summary judgment as to each such cause of action.
DECEPTIVE TRADE PRACTICES ACT
As a portion of their first issue, the Keathleys argue that they produced sufficient evidence
to defeat Corbitt’s and the Bobos’ no evidence motions for summary judgment for violations of the
DTPA based on false representations related to goods or services, false representations related to an
agreement, failure to disclose information concerning goods or services, and unconscionable
conduct. See TEX . BUS. & COM . CODE ANN . § 17.46(b)(5), (12), (24), § 17.50(a)(3) (Vernon Supp.
2008).
Applicable Law
A consumer may recover damages incurred as a result of another’s false, misleading, or
deceptive acts or practices. See TEX . BUS. & COM . CODE ANN . § 17.50(a)(1) (Vernon Supp. 2008).
False, misleading, or deceptive acts or practices include representing that goods or services have
characteristics or benefits which they do not have and representing that an agreement confers or
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involves rights or obligations which it does not have or involve. Id. § 17.46(b)(5), (12). It also
includes failing to disclose information concerning goods or services that was known at the time of
the transaction if the failure to disclose such information was intended to induce the consumer into
a transaction and the consumer would not have entered into the transaction had the information been
disclosed. Id. § 17.46(b)(24). To prevail on a claim for failure to disclose under the DTPA, the
consumer must prove that the defendant knew information regarding the goods or services, the
information was not disclosed, there was an intent to induce the consumer to enter into the
transaction through the failure to disclose, and the consumer would not have entered into the
transaction had the information been disclosed. Patterson v. McMickle, 191 S.W.3d 819, 827 (Tex.
App.–Fort Worth 2006, no pet.). Mere nondisclosure of material information is not enough to
establish an actionable DTPA claim. Id.
A consumer may recover actual damages for any unconscionable action or course of action
that is the producing cause of such damages. TEX . BUS. & COM . CODE ANN . § 17.50(a)(3) (Vernon
Supp. 2008). An “unconscionable action or course of action” means “an act or practice which, to
a consumer’s detriment, takes advantage of the lack of knowledge, ability, experience, or capacity
of the consumer to a grossly unfair degree.” Id. § 17.45(5) (Vernon Supp. 2008). Unconscionability
is an objective standard for which scienter is irrelevant. Ins. Co. of N. Am. v. Morris, 981 S.W.2d
667, 677 (Tex. 1998). To prove an unconscionable action, a consumer must show that the
defendant’s acts took advantage of his lack of knowledge and “that the resulting unfairness was
glaringly noticeable, flagrant, complete and unmitigated.’” Id. (quoting Chastain v. Koonce, 700
S.W.2d 579, 584 (Tex.1985)).
Mere breach of contract, without more, does not violate the DTPA. Formosa Plastics Corp.
USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41, 46 (Tex. 1998). But when
representations are made outside the contract, a violation of the DTPA may occur. Cont’l Dredging,
Inc. v. De-Kaizered, Inc., 120 S.W.3d 380, 390 (Tex. App.–Texarkana 2003, pet. denied). Whether
a breach of contract rises to the level of a misrepresentation sufficient to trigger the DTPA is a fact
driven inquiry that, once the facts are ascertained, is a question of law. Id. at 389. When a
representation by a defendant causes no harm itself but instead the injury or damage was caused by
the breach of contract, that injury is governed by contract law, not the DTPA. See Crawford v. Ace
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Sign, Inc., 917 S.W.2d 12, 14-15 (Tex. 1996).
Violation of Sections 17.46(b)(5), (12)
In their brief, the Keathleys argue that they presented evidence that Corbitt’s and the Bobos’
representations violated the DTPA. The Keathleys contend that these violations included
1. that Corbitt owned Ruth’s house;
2. that Corbitt was Ruth’s heir to the property;
3. that after probating the will, Corbitt would be ready to convey the property;
4. that probating the will would not take long;
5. that Corbitt would be able to close once the Keathleys received loan approval;
6. that if the Keathleys arranged a bridge loan and waived the financing contingency,
the Keathleys would be able to complete the purchase by the June 1, 2004 closing
date; and
7. that if the closing was delayed, the Keathleys would be able to move in on a
temporary rental agreement .
See TEX . BUS. & COM . CODE ANN . § 17.46(b)(5), (12). The Keathleys also presented evidence of
damages they incurred as a result of the alleged violations. Corbitt and the Bobos contend that these
representations are no evidence of a false, misleading, or deceptive act or practice under the DTPA.
Instead, they argue that these statements are mere representations that a contract will be performed.
See Formosa Plastics Corp. USA, 960 S.W.2d at 46.
Other than Corbitt’s and the Bobos’ representation regarding a temporary rental agreement,
their representations arise from the contract and simply outline Corbitt’s promise to perform pursuant
to that contract. See id. Regarding the representation that the Keathleys could reside on the property
under a temporary rental agreement, the Keathleys presented no evidence that this statement was
false or that they requested a temporary rental agreement after they determined that the closing would
not occur. Because the Keathleys presented no evidence that Corbitt’s and the Bobos’
representations were false or related to more than a mere breach of contract, we conclude that these
representations do not rise to the level of violations of subsections 17.46(b)(5) and (12) of the DTPA.
Violation of Subsections 17.46(b)(24) and 17.50(a)(3)
The Keathleys also argue that they presented evidence that, shortly after entering into the
contract, Corbitt and the Bobos became aware that Corbitt would not be able to convey clear title
by the closing date, and that Corbitt’s father and brother refused to cooperate so that Ruth’s property
9
could be timely conveyed to the Keathleys. The Keathleys’ allegations focus on the will contest
between Corbitt and his relatives and his inability to convey Ruth’s house so that the closing could
occur on June 1, 2004. See TEX . BUS. & COM . CODE ANN . § 17.46(b)(24), § 17.50(a)(3). According
to the evidence presented by Corbitt and the Bobos, however, this information was not discovered
until after the Keathleys agreed to purchase Ruth’s house and entered into the contract. The parties
became aware that the trust held title to Ruth’s house only after the title commitment was issued.
Because Corbitt and the Bobos did not have this information at the time the Keathleys entered into
the contract to purchase Ruth’s home, they could not have failed to disclose it in order to induce the
Keathleys to enter into the contract. The Keathleys also failed to produce evidence that Corbitt or
the Bobos took advantage of their lack of knowledge regarding Corbitt’s inability to convey clear
title or the title dispute to a grossly unfair degree. See TEX . BUS. & COM . CODE ANN . § 17.50(a)(3).
Because the Keathleys presented no evidence that Corbitt’s or the Bobos’ failed to disclose
information to induce them to enter into the contract or took advantage of their lack of knowledge
to a grossly unfair degree, we conclude that the complained of actions do not support a cause of
action under subsections 17.46(b)(24) and 17.50(a)(3) of the DTPA.
Survival of DTPA claims against the Bobos
Finally, the Keathleys argue that the Bobos were not parties to the contract, and thus, the
DTPA causes of action should survive against them. This contention ignores the fact that the Bobos
were Corbitt’s agents in the contract negotiations. If the representations complained of by the
Keathleys supported a DTPA cause of action against Corbitt, the Bobos would likewise have
potential liability for their representations under the DTPA. See Miller v. Keyser, 90 S.W.3d 712,
715-17 (Tex. 2002); Light v. Wilson, 663 S.W.2d 813, 815 (Tex. 1983) (Spears, J., concurring). But
because the complained of representations support only a breach of contract action against Corbitt,
these same representations cannot support a DTPA cause of action against the Bobos.
Conclusion
The Keathleys failed to produce any evidence that Corbitt or the Bobos made false
representations related to goods or services, false representations related to an agreement, failed to
disclose information concerning goods or services, or committed unconscionable acts. See TEX . BUS.
& COM . CODE ANN . § 17.46(b)(5), (12), (24), § 17.50(a)(3). Therefore, the trial court did not err in
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granting Corbitt’s and the Bobos’ no evidence motions for summary judgment regarding violations
of the DTPA. Accordingly, we overrule that portion of the Keathleys’ first issue regarding the
DTPA causes of action. Because the trial court did not err in granting the no evidence motions as to
the Keathleys’ DTPA claims, we do not address the portion of the Keathleys’ second issue regarding
Corbitt’s and the Bobos’ traditional motions for summary judgment related to those claims. See
Ridgway, 135 S.W.3d at 600.
NEGLIGENT MISREPRESENTATION
As a portion of their first issue, the Keathleys argue that they produced sufficient evidence
to defeat Corbitt’s and the Bobos’ no evidence motions for summary judgment for negligent
misrepresentation.
Applicable Law
The elements of a negligent misrepresentation claim are that (1) the representation is made
by a defendant in the course of his business, or in a transaction in which he has a pecuniary interest;
(2) the defendant supplies false information for the guidance of others in their business; (3) the
defendant did not exercise reasonable care or competence in obtaining or communicating the
information; and (4) the plaintiff suffers pecuniary loss by justifiably relying on the representation.
Jeffries v. Pat A. Madison, Inc., 269 S.W.3d 689, 691 (Tex. App.–Eastland 2008, no pet.).
Negligent misrepresentation claims frequently arise when the parties have a relationship, but a
plaintiff need not prove privity of contract. Id. In fact, negligent misrepresentation claims are not
generally available when a contract is in force between the parties. Agillion, Inc. v. Oliver, 114
S.W.3d 86, 89 (Tex. App.–Austin 2003, no pet.).
Analysis
The Keathleys argue that the same representations by Corbitt and the Bobos as alleged in
their claims for violations of the DTPA support their claims for negligent misrepresentation.
However, we have held that all but one of the alleged representations merely outline Corbitt’s
promise to perform pursuant to the contract. See Agillion, Inc., 114 S.W.3d at 89. Regarding the
representation that the Keathleys could reside on Ruth’s property under a temporary rental
agreement, the Keathleys presented no evidence that this statement was false. See Jeffries, 269
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S.W.3d at 691. Although the Keathleys presented evidence that the contract did not timely close,
they never produced evidence that they requested a temporary rental agreement once they determined
that the closing would not occur. Because the Keathleys presented no evidence that the
representations made by Corbitt and the Bobos were false or were not related to the contract, the trial
court did not err in granting Corbitt’s and Bobos’ no evidence motions for summary judgment
regarding negligent misrepresentation. See id. Thus, we overrule that portion of the Keathleys’ first
issue regarding their negligent misrepresentation cause of action. Because the trial court did not err
in granting the no evidence motions as to the Keathleys’ negligent misrepresentation claims, we do
not address that portion of the Keathleys’ second issue regarding Corbitt’s and the Bobos’ traditional
motions for summary judgment related to those claims. See Ridgway, 135 S.W.3d at 600.
BREACH OF CONTRACT
As a portion of their first issue, the Keathleys contend that they produced sufficient evidence
to defeat Corbitt’s and the Bobos’ no evidence motions for summary judgment for breach of
contract. As a portion of their second issue, the Keathleys argue that in Corbitt’s traditional motion
for summary judgment, he, at best, raised a fact issue regarding whether the contract terminated and
whether his offer to close was timely.
Applicable Law
The elements of a breach of contract claim are (1) the existence of a valid contract; (2)
performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant;
and (4) damages caused by the breach. Roof Sys., Inc. v. Johns Manville Corp., 130 S.W.3d 430,
442 (Tex. App.–Houston [14th Dist.] 2004, no pet.). Even if a jury determines that the plaintiff
suffered no actual pecuniary loss from a breach, the plaintiff still would be entitled to nominal
damages. Gilmore v. SCI Texas Funeral Serv., Inc., 234 S.W.3d 251, 259 (Tex. App.–Waco 2007,
pet. denied). When a party fails or refuses to perform an act that it expressly promised to do, that
party breaches the contract. Roberts v. Clark, 188 S.W.3d 204, 209 (Tex. App.–Tyler 2002, pet.
denied). In construing a written contract, the primary concern of the court is to ascertain the true
intentions of the parties as expressed in the contract. Id. at 210. We examine the entire contract and
give effect to all provisions of the contract so that none will be rendered meaningless. Id. If the
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contract can be given a certain or definite legal meaning, then it is not ambiguous and the court will
construe the contract as a matter of law. Id. Even if a contract does not specify a time within which
a party must fulfill a condition precedent, performance still must occur within a reasonable time.
HECI Exploration Co. v. Clajon Gas Co., 843 S.W.2d 622, 634 (Tex. App.–Austin 1992, writ
denied).
No Evidence Motion for Summary Judgment
Regarding the Bobos’ no evidence motion for summary judgment for breach of contract, the
Bobos were Corbitt’s agents. As such, the Bobos are not personally liable under the contract. See
Eppler, Guerin & Turner, Inc. v. Kasmir, 685 S.W.2d 737, 738 (Tex. App.–Dallas 1985, writ ref’d
n.r.e.). Therefore, the trial court did not err in granting the Bobos’ no evidence motion for summary
judgment regarding the Keathleys’ breach of contract claim.
Regarding Corbitt’s no evidence motion for summary judgment, the Keathleys agreed to
purchase, and Corbitt agreed to sell, the home owned by Ruth Baker before she died. Before the
closing date, the parties received a title policy commitment stating that title to the property was
vested in The Bobby H. Baker and Ruth E. Baker Revocable Living Trust. The title commitment
further contained a Schedule C title exception requiring a copy of the trust agreement and
information as to the status of Ruth Baker’s interest in the property. The title commitment indicated
that, upon receipt of this information, additional requirements would be necessary. The Keathleys
presented evidence that they sold their home, were approved for a loan to purchase the house, and
notified the parties that they were ready to close. However, the Keathleys were informed that Corbitt
had not obtained clear title to Ruth’s house. Although Corbitt eventually obtained clear title to the
property, he was not able to close at or near the original closing date of June 1, 2004. Regarding
damages, the Keathleys presented evidence of pecuniary losses due to their attempt to purchase the
property, including inspections, traveling expenses, appraisals, earnest money, and fee options.
Thus, the Keathleys presented evidence of a contract, their tendered performance, Corbitt’s failure
to perform, and damages caused by the breach. Because the Keathleys presented more than a
scintilla of probative evidence to raise a genuine issue of material fact, the trial court erred in
granting Corbitt’s no evidence motion for summary judgment regarding the Keathleys’ breach of
contract cause of action.
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Traditional Motion for Summary Judgment
In his traditional motion for summary judgment, Corbitt raises two affirmative defenses.
First, Corbitt argues that the contract terminated prior to the specified closing date pursuant to
paragraphs 4A and 6D of the contract. Paragraph 4A of the contract states that the portion of the
sales price not payable in cash would be paid through third party financing, or through one or more
third party mortgage loans. The paragraph also stated that if the property does not satisfy the lenders’
underwriting requirements for the loan, the contract would terminate. In his motion, Corbitt stated
that there was no evidence that the Keathleys submitted the title commitment to a lender for
consideration or that the property satisfied any lender’s underwriting requirements. However, Corbitt
presented no evidence that the Keathleys did not obtain third party financing. On the other hand, the
Keathleys presented evidence that they were approved for a bank loan to purchase the property.
Regarding paragraph 6D of the contract, the Keathleys were given five days after receiving
the title commitment to object in writing to defects, exceptions, or encumbrances to the title. The
Keathleys’ failure to object within the time allowed constitutes a waiver of their right to object,
except that the requirements in Schedule C of the title commitment could not be waived. Corbitt was
obligated to cure the timely objections of the Keathleys or any third party lender and, if such
objections were not cured within the time allowed, the contract would terminate. Regarding the title
objections, Corbitt presented no evidence that the Keathleys objected to the title and, in fact, the
Keathleys acknowledged that they did not object to any aspect of the title. The title company listed
some Schedule C objections that, pursuant to the contract, could not be waived by the Keathleys.
However, there is no evidence that Corbitt failed to cure those objections, specifically to give the title
company a copy of the trust agreement and information as to Ruth’s interest in the property. Because
there is no evidence that the Keathleys failed to obtain third party financing or that Corbitt failed to
cure any title objections, Corbitt failed to conclusively establish his affirmative defense. See Rhone-
Poulenc, Inc., 997 S.W.2d at 223; The Ryland Group, Inc., 924 S.W.2d at 121.
Second, Corbitt argued that his offer to close more than eighteen months after the initial
closing date was evidence that he performed his duties according to the contract and did not breach
it. But even if a contract does not specify a time within which a party must fulfill a condition
precedent, performance still must occur within a reasonable time. See HECI Exploration Co., 843
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S.W.2d at 634. What is reasonable depends on the facts and circumstances as they existed at the date
of the contract. Cherco Prop., Inc. v. Law, Snakard & Gambill, 985 S.W.2d 262, 266 (Tex.
App.–Fort Worth 1999, no pet.). Factors include the nature and character of the action and the
difficulty of accomplishing it, as well as the purpose of the agreement. Pearcy v. Envtl. Conservancy
of Austin and Cent. Tex., Inc., 814 S.W.2d 243, 246 (Tex. App.–Austin 1991, writ denied). Where
the material facts are undisputed, the question of what is a reasonable time is a matter of law. Id.
Here, Corbitt was forced to file a declaratory judgment action to establish clear title to Ruth’s
property. However, the action was not resolved until over a year after closing, and Corbitt did not
inform the Keathleys that he was ready to close until January of 2006. Even accepting Corbitt’s
difficulty with obtaining clear title, an eighteen month delay in a real estate transaction could be seen
as unreasonable. See Cherco Prop., Inc., 985 S.W.2d at 266. By presenting evidence that he agreed
to perform under the contract more than eighteen months after the original closing date, Corbitt did
no more than create a fact issue as to whether his performance was timely. Because Corbitt failed
to conclusively prove his affirmative defenses, the trial court erred in granting Corbitt’s traditional
motion for summary judgment regarding the Keathleys’ breach of contract cause of action.
Conclusion
We sustain that portion of the Keathleys’ first and second issues regarding their breach of
contract claim against Corbitt. However, we overrule that portion of the Keathleys’ first issue
regarding their breach of contract cause of action against the Bobos. Accordingly, we do not address
that portion of the Keathleys’ second issue regarding the Bobos’ traditional motion for summary
judgment related to the Keathleys’ breach of contract cause of action. See Ridgway, 135 S.W.3d at
600.
COMMON LAW AND STATUTORY FRAUD
As part of their first issue, the Keathleys argue that they presented sufficient evidence to
defeat Corbitt’s and the Bobos’ no evidence motions for summary judgment for common law and
statutory fraud.
Applicable Law
The elements of a cause of action for common law fraud are that (1) the defendant made a
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material representation; (2) the representation was false; (3) when the defendant made the
representation, he knew it was false or made it recklessly without any knowledge of the truth and as
a positive assertion; (4) the defendant made the representation with the intent that the plaintiff should
act upon it; (5) the plaintiff acted in reliance on the representation; and (6) the plaintiff thereby
suffered injury. Ins. Co. of N. Am., 981 S.W.2d at 674. The elements of statutory fraud under
section 27.01 of the Texas Business and Commerce Code are essentially identical to the elements
of common law fraud, except that section 27.01 does not require proof of knowledge or recklessness
as a prerequisite to the recovery of actual damages. TEX . BUS. & COM . CODE ANN . § 27.01 (Vernon
2009); Trinity Indus., Inc. v. Ashland, Inc., 53 S.W.3d 852, 867 (Tex. App.–Austin 2001, pet.
denied). Under both common law and statutory fraud, the plaintiff’s reliance must be reasonable and
justified. Ortiz v. Collins, 203 S.W.3d 414, 421 (Tex. App.–Houston [14th Dist.] 2006, no pet.).
Further, a pure expression of opinion will not support an action for fraud. Transport Ins. Co. v.
Faircloth, 898 S.W.2d 269, 276 (Tex. 1995).
Silence is equivalent to a false representation where circumstances impose a duty to speak
and one nevertheless deliberately remains silent. Lesikar v. Rappeport, 33 S.W.3d 282, 299 (Tex.
App.–Texarkana 2000, pet. denied). In other words, for there to be fraud by nondisclosure, there
must be a duty to disclose. Id. A duty to disclose may arise in four situations: (1) where there is a
special or fiduciary relationship; (2) where one voluntarily discloses partial information, but fails to
disclose the whole truth; (3) where one makes a representation and fails to disclose new information
that makes the earlier representation misleading or untrue; or (4) where one makes a partial
disclosure and conveys a false impression. Id.
No Evidence Motion for Summary Judgment
Regarding the claim for common law fraud, Corbitt and the Bobos argue that the Keathleys
produced no evidence that they knew the alleged representations were false, or that the alleged
representations were recklessly made, made as a positive assertion, or made with the intent to induce
reliance. Further, regarding the claim for statutory fraud, Corbitt contends the Keathleys produced
no evidence that he made any representation that he knew to be false, that he intended the Keathleys
to act on, or that caused them injury. The Bobos argue that the Keathleys produced no evidence that
they made any representation which was intended to induce the Keathleys to enter into the contract
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or that the Keathleys’ reliance on any such representation was likely or justified.
The Keathleys produced evidence that they were told by the Bobos that Corbitt was the
owner of the property and had the authority to sell it. According to the Keathleys, Corbitt stated that
he had inherited Ruth’s house. Corbitt and the Bobos told the Keathleys that Ruth’s will would need
to be probated, but that it would not be difficult. Subsequently, Corbitt and the Bobos realized that
obtaining clear title would, indeed, be difficult. Yet, according to the Keathleys, Corbitt and the
Bobos never disclosed this information to them. Further, the Keathleys presented evidence that this
information was not disclosed so that the Keathleys would not terminate the contract. Specifically,
after Frank Keathley received a copy of the title commitment showing that the property was owned
by the trust, he questioned Carroll Bobo and was told that Corbitt would have the title cleared before
the closing date. Frank Keathley stated that Carroll Bobo presented several possible scenarios
regarding the probate of Ruth’s will that would all result in title being cleared before closing. Frank
Keathley stated that he relied on these representations and presented evidence of damages incurred
as a result including inspections, traveling expenses, appraisals, earnest money, and fee options.
Thus, the Keathleys presented evidence that Corbitt’s and the Bobos’ representations
regarding ownership of the property and the time and effect of the probate of Ruth’s will were
material, false, reckless, positive, and made with the intention that the Keathleys rely upon them.
The Keathleys also presented evidence that they relied on the representations and were damaged as
a result. See Lesikar, 33 S.W.3d at 299; Ins. Co. of N. Am., 981 S.W.2d at 674. Moreover, Corbitt
and the Bobos had a duty to disclose because they voluntarily disclosed partial information regarding
ownership of the property and the probate of the will, but failed to disclose the title dispute or new
information regarding the title dispute that made their earlier representations misleading or untrue.
See Lesikar, 33 S.W.3d at 299. Because the Keathleys presented more than a scintilla of probative
evidence to raise a genuine issue of material fact, the trial court erred in granting Corbitt’s and the
Bobos’ no evidence motions for summary judgment regarding the Keathleys’ common law and
statutory fraud causes of action.
Traditional Motion for Summary Judgment
A motion for summary judgment must expressly present the grounds upon which it is made.
McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993). Moreover, a motion
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must stand or fall on the grounds expressed in the motion. Id. Corbitt’s and the Bobos’ traditional
motions for summary judgment include arguments, authorities, and evidence on the Keathleys’ other
claims but not on their claims for common law and statutory fraud. Therefore, the trial court erred
in granting Corbitt’s and the Bobos’ traditional motions for summary judgment regarding the
Keathleys’ common law and statutory causes of action.
Conclusion
Because the no evidence and traditional motions for summary judgment were erroneously
granted, we sustain that portion of the Keathleys’ first and second issues regarding the common law
and statutory fraud causes of action.
ATTORNEY ’S FEES
In their third issue, the Keathleys argue that the trial court erred in awarding attorney’s fees
to Corbitt and the Bobos. Because we have sustained the Keathleys’ first and second issues as to the
breach of contract and common law and statutory fraud causes of action, the trial court should be
given an opportunity to reconsider its award of attorney’s fees when it renders a new judgment. See
Bruni v. Bruni, 924 S.W.2d 366, 368-69 (Tex. 1996). We therefore conclude that the award of
attorney’s fees should be reversed and the issue remanded to the trial court for further proceedings.
See Countrywide Home Loans, Inc. v. Howard, 240 S.W.3d 1, 7 (Tex. App.–Austin 2007, pet.
denied).
CONCLUSION
We have sustained in part and overruled in part the Keathleys’ first and second issues.
Accordingly, we affirm the trial court’s judgment that the Keathleys take nothing against Corbitt and
the Bobos regarding their DTPA and negligent misrepresentation causes of action. However, we
reverse the trial court’s judgment regarding the Keathleys’ breach of contract, common law fraud,
and statutory fraud causes of action against Corbitt and the Bobos, and its award of attorney’s fees,
and remand this case for further proceedings.
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BRIAN HOYLE
Justice
Opinion delivered June 30, 2009.
Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.
(PUBLISH)
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