Opinion
01-20-00307-CV
03-03-2022
DOUGLAS CHRISTIANS INDIVIDUALLY, AND IN HIS CAPACITY ASEXECUTOR FOR THE ESTATE OF DALE K. CHRISTIANS, AND THEESTATE OF DALE K. CHRISTIANS, Appellants v. SERGIO FLORES, Appellee
On Appeal from the 353rd District Court Travis County, Texas Trial Court Case No. D-1-GN-19-000556
Panel consists of Justices Hightower, Countiss, and Guerra.
MEMORANDUM OPINION
Richard Hightower, Justice
Appellee Sergio Flores sued appellants Douglas Christians, individually and in his capacity as executor for the Estate of Dale K. Christians, and the Estate of Dale K. Christians (collectively, Christians) in connection with the purchase of a home, asserting that Christians, in both his individual capacity and as a representative of the Estate, failed to disclose problems with the home's roof and breached a subsequent agreement to use insurance proceeds to repair the damaged roof. Flores alleged causes of action for breach of contract, violations of the Texas Deceptive Trade Practices Act (DTPA), negligent misrepresentation and misrepresentation by nondisclosure, fraud in a real-estate transaction and fraud in the inducement, violations of the Texas Property Code, promissory estoppel, and unjust enrichment. Christians filed a counterclaim asserting that Flores's filed a frivolous and groundless lawsuit pursuant to Rule of Civil Procedure 13. Following a bench trial, the trial court found in favor of Flores and rendered judgment awarding him $79,750 in actual damages, $159,500 in exemplary damages under the DTPA, $47,475.87 in attorney's fees, plus pre- and post-judgment interest and costs.
Pursuant to its docket equalization authority, the Supreme Court of Texas transferred this appeal from the Court of Appeals for the Third District of Texas to this Court. See Tex. Gov't Code § 73.001 (authorizing transfer of cases). We are unaware of any conflict between precedent of that court and that of this Court on any relevant issue. See Tex. R. App. P. 41.3.
In ten issues on appeal, Christians argues that the trial court erred: (1) in rendering judgment for Flores under Property Code section 5.008 "because as an estate, the seller was exempt from providing disclosures"; (2) in finding Douglas Christians personally liable; (3) in rendering judgment in favor of Flores because his claims are precluded as a matter of law by his purchase of the home "as is"; (4) in finding in favor of Flores on his breach of contract claim because it is barred by a merger clause and because "the evidence is factually and legally insufficient to establish consideration"; (5) in finding in favor of Flores on his claims of fraud in a real-estate transaction and fraudulent inducement; (6) in rendering judgment under the DTPA; (7) in awarding Flores treble damages under the DTPA because the evidence is legally and factually insufficient to establish a knowing violation; (8) in finding in favor of Flores on his claim of negligent misrepresentation; (9) in awarding personal property to Flores because no pleading supports this award; and (10) in awarding Flores attorney's fees as a matter of law.
We conclude that the trial court did not err in rendering judgment in favor of Flores pursuant to the DTPA. Accordingly, we affirm.
Background
This dispute involves a house located on Saddlestring Trail in Austin, Texas (the Property). The Property had been owned by Dale K. Christians and, toward the end of Dale's life, his sons Douglas Christians and Monte Christians took on some responsibility for maintaining the Property. Prior to Dale's death, Douglas stayed in the Property from time to time to care for Dale. Douglas also maintained the outside of the property, including the yard and roof. Upon Dale's death, the Property passed into his Estate. Douglas was a beneficiary of the Estate and served as the executor. The other beneficiaries of the Estate included Douglas's brother, Monte, and his sister, Cathyann Christians, the mother of appellee Sergio Flores.
At some point after Douglas began maintaining the Property, the roof of the Property was damaged in a storm. A tree limb punctured the aluminum shake roof, and the roof was also damaged by hail. At trial, the roofer, Jon Duncanson, testified that he had constructed a new roof on the Property while Dale was still alive, and the roof was relatively new at the time of Dale's passing. At the time the roof was damaged, Douglas consulted with Duncanson. Duncanson testified that, due to the nature of the aluminum shake roof and the damage it had sustained, he could not repair a portion of the roof but instead needed to replace the entire roof. Douglas declined to have the roof repaired.
The date of loss identified in the insurance documents was July 30, 2016.
Subsequently, Cathyann decided to gift her one-third interest in the Property to her son, Flores, and Flores entered into an agreement with the Estate to purchase the remaining two-thirds from Douglas and Monte. The "One to Four Family Residential Contract (Resale)" was executed on August 15, 2017 (the Contract). The Seller was identified as the "Estate of Dale K Christians," and Flores and his wife were identified as the Buyers. Flores agreed to pay $250,667 for the Property. The Contract further stated that the Seller "is not required to furnish the notice under the Texas Property Code [section 5.008]" and stated that the Buyer "accepts the Property As is." The Contract explained:
"As Is" means the present condition of the Property with any and all defects and without warranty except for the warranties of title and the warranties in this contract. Buyer's agreement to accept the Property As Is under Paragraph 7D(1) or (2) does not preclude Buyer from inspecting the Property under Paragraph 7A, from negotiating repairs or treatments in a subsequent amendment, or from terminating this contract during the Option Period, if any. Buyer accepts the Property "As Is."
The Contract also provided that a party "who prevails in any legal proceeding related to this contract is entitled to recover reasonable attorney's fees and all costs of such proceeding." The Contract was signed by Flores and his wife as the buyers and by Douglas Christians on behalf of the Estate.
At the time he entered into the Contract, Flores was not aware of the damage to the roof. No inspections occurred. Flores testified that he trusted his uncles, and Monte Christians had told him that an inspection was a waste of money because his family members would tell him what was wrong with the house. After Flores had executed the Contract, Duncanson informed Flores about the necessity of repairing the roof.
Flores spoke with Douglas regarding the roof and asked Douglas to file an insurance claim with the Property's insurer, USAA, to cover the weather-related damage to the roof. Douglas did not think the insurance would pay enough to fix the roof, and he did not want to delay the closing scheduled for September 15, 2017. Nevertheless, according to Flores, Douglas agreed to file an insurance claim and use the proceeds to fix the damaged roof.
On August 30, 2017, the claim was filed with USAA. USAA inspected the roof on September 7, 2017 and issued a report to the Estate, stating, "Due to the amount of damage as well as the overall condition, [the] roof is not repairable and [it is] more cost effective to recommend total replacement. Damage exceeds reasonable repair allowance [and] therefore total replacement is warranted and recommended." USAA approved a "net claim" for $34,730.89 and a "net claim if depreciation is recovered" for $39,160.89. USAA sent Douglas Christians a check dated September 8, 2017, for the net claim amount of $34,730.89.
Douglas Christians asserts that Cathyann was the person who actually filed the USAA claim. The documents from USAA identify only the insured, naming Dale Christians. The documents indicated that communications were addressed to the Estate of Dale Christians.
Douglas did not disclose any of the communications with USAA to Flores prior to the closing, which was dated September 15, 2017, but which the parties assert actually occurred two days later. According to Flores, at the closing, Douglas told him that the USAA estimate was higher than Douglas expected and that there would be enough money to fix the roof. Flores proceeded with closing on the house and began paying the utilities and other expenses for the Property. Flores testified that he would not have proceeded with closing on the Property but for Douglas's assurances that the insurance proceeds would be used to fix the roof because Flores could not afford to repair or replace the roof on his own. The proceeds from the sale of the Property were paid directly to Douglas and Monte.
Douglas, as executor of Dale's estate, removed Dale's personal property from the home prior to closing, but some items of personal property remained after closing.
Douglas then kept the insurance proceeds in the Estate. He obtained estimates for minimal roof repairs rather than a full replacement roof. He encouraged Flores to obtain an asphalt shingle roof as a less-expensive alternative to fixing the aluminum shake roof or to patch the damaged portion of the roof. Douglas had multiple roofers provide bids for repairing the roof, and all of them but one refused to provide a repair quote because a full replacement was needed and would cost less than making repairs. Duncanson provided an estimate on December 14, 2017, to replace the roof for $57,671.51, but he also testified that he had agreed to do the job for whatever USAA agreed to pay.
According to Flores, Douglas did not tell him that USAA had determined that the roof could not be repaired, but instead needed to be replaced. Flores did not discover the USAA recommendations until after closing when he requested them directly from USAA himself. Subsequently, on August 14, 2018, he sent a DTPA demand letter to Douglas. Flores offered to settle the dispute for the amount of the insurance proceeds-$34,730.89-plus $1,500 in attorney's fees. Douglas did not settle the claim and did not use the insurance proceeds to fix the roof. Instead, he used $30,000 of the proceeds to pay his own attorney's fees and those of the Estate and $1,500 to pay for mediation fees. He also used $2,100 of the insurance proceeds to pay for appraisals of Estate jewelry.
Flores filed his original petition against Douglas Christians, individually and as the Executor of the Estate, and against the Estate (collectively, Christians, as stated above), asserting various causes of action including breach of contract, fraudulent inducement, fraud in a real estate transaction, and violations of the DTPA. Christians counterclaimed pursuant to Rule of Civil Procedure 13 asserting that Flores's suit was frivolous and groundless.
Douglas Christians answered interrogatories admitting that he was aware of the damage to the roof caused when a "limb punctured one of the tiles" and made a hole "about the size of a silver dollar." He admitted that the parties "agreed to repair the roof but later he "gave up and notified the heirs via email that [he] was going to cancel the agreement." He also stated in his interrogatories that he was approached by Flores and his mother Cathyann "to go ahead and make a roof Claim to USAA which [he] did the same day."
The trial court held a three-day bench trial. At trial, Douglas Christians testified that there was never an agreement to repair the roof prior to closing, contradicting Flores's testimony regarding the parties' agreement. He also asserted that he did not file the USAA claim, but that it was done by Cathyann instead. The roofer, Jon Duncanson, testified that the cost to repair the roof at the time of trial was approximately $61,000. Flores also presented evidence regarding his attorney's fees incurred in litigating his suit against Christians.
The trial court ultimately found in favor of Flores on all of his claims. The trial court made numerous findings of fact and conclusions of law. Significantly, the trial court "found Flores's testimony credible, and found the testimony supporting Flores's case credible, but found the testimony of Doug Christians not credible." The trial court concluded that Christians "entered into a valid and enforceable oral agreement with Flores to use the proceeds from the insurance claim to fix the roof of the [Property]" and that the "as is" clause in the Contract "did not relieve Defendants [Christians, individually and as executor, and the Estate] of their oral agreement to use the USAA proceeds to fix the roof." The trial court also concluded, in relevant part:
15. The conduct and misrepresentations made by Defendants were false, misleading and deceptive. Specifically, Defendants engaged in one or more false, misleading or deceptive acts or practices that are specifically enumerated under Section 17.46 of the DTPA, including:
(A) Defendants represented that the property had characteristics, ingredients, uses, or benefits which it did not have [DTPA § 17.46(b)(5)];
(B)Defendants represented that the property was of a particular standard, quality, or grade, when it was of another [DTPA § 17.46(b)(7)];
(C) Defendants represented that an agreement confers or involves rights or remedies, which it does not have or involve [DTPA § 17.46(b)(12)];
(D) Defendants knowingly made false or misleading statements of fact concerning the need for replacement or repair [DTPA § 17.46(b)(13)]; or
(E) Defendants failed to disclose information concerning goods which were known at the time of the transaction and such failure to disclose such information was intended to induce the consumer into a transaction into which the consumer would not have entered had the information been disclosed [DTPA § 17.46(b)(24)].
16. Defendants' conduct is actionable as unconscionable acts in violation of § 17.50(a)(3).
17. Defendants' conduct and misrepresentations were false, misleading, and deceptive and were relied upon by Flores to his detriment.
18. Defendants' conduct was a producing cause of damages to Flores.
19. Flores has suffered damages caused by Defendants' violation of the DTPA in the form of economic damages that arose from Flores's reliance on false, misleading, and deceptive acts or practices, in addition to benefit-of-the-bargain damages, and lost time.
20. Defendants committed a knowingly violation when they represented to Flores that his roof would be fixed with the proceeds of the insurance claim.
21. Flores is entitled to recover treble damages under the DTPA.
The trial court rendered its final judgment in favor of Flores based on the DTPA findings and conclusions. It ordered that Flores recover damages from "Defendants Douglas Christians, Individually and in his capacity as Executor of the Estate of Dale K. Christians, and the Estate of Dale K. Christians, jointly and severally." The trial court awarded Flores "actual damages in the amount of $79,750.00, consisting of benefit of the bargain damages in the amount of $61,000.00 and lost time damages in the amount of $18,750.00." The trial court further awarded Flores DTPA exemplary damages of $159,500 and attorney's fees of $47,475.87, plus pre- and post-judgment interest and costs. This appeal followed.
DTPA Claim
While the trial court made numerous findings of fact and conclusions of law on Flores's various claims, it rendered judgment based on Flores's claim that Christians violated the DTPA. We address that issue first.
A. As-Is provision
In his third issue, Christians argues that the "as-is" provision in the Purchase Agreement bars Flores's recovery by negating the essential element of causation in his DTPA claim, among others.
The trial court found that Christians concealed material information from Flores and that Christians "induced Flores into proceeding with the Closing by means of fraudulent representations or concealment of information." The trial court found that "[b]ut for [Christians'] misrepresentations and concealment of information, Flores would not have purchased the [Property]." The trial court concluded that Christians "entered into a valid and enforceable agreement with Flores to use the proceeds from the insurance claim to fix the roof and that the "as-is" clause in the Contract "did not relieve [Christians] of their oral agreement to use the USAA proceeds to fix the roof." The trial court further concluded that the "transaction between Flores and his uncle Doug Christians was not an 'arm's length' transaction." The trial court further concluded:
25. [Christians'] "as is" defense does not preclude Flores's causes of action because there is proof of fraudulent misrepresentation, concealment of information, or impairment of inspection. See Prudential Ins., 896 S.W.2d at 162; Weitzel v. Barnes, 691 S.W.2d 598, 599-600 (Tex. 1985); Larsen v. Carlene Langford & Assocs., 41 S.W.3d 245, 252 (Tex. App.-Waco 2001, pet. denied). [Christians] "cannot have it both ways: [they] cannot assure the buyer of the condition of a thing to obtain the buyer's agreement to purchase 'as is' and then disavow the assurance which procured the 'as is' agreement." Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156 (Tex. 1995).
Christians, however, argues that the as-is clause precludes Flores from recovering on his DTPA claim or any other claim. Causation is an element of Flores's DTPA claim. See Pogue v. Williamson, 605 S.W.3d 656, 665 (Tex. App.-Houston [1st Dist.] 2020, no pet.); Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 160-61 (Tex. 1995); see also Tex. Bus. & Com. Code § 17.50(a) (providing that claims brought under DTPA require showing of "producing cause"). An enforceable "as is" clause negates causation as a matter of law. Pogue, 605 S.W.3d at 665 (citing Prudential Ins. Co., 896 S.W.2d at 161). Whether an "as-is" clause is enforceable is a question of law we review de novo. Id.
"In general, a buyer who purchases something 'as is' agrees to make her own appraisal of the property and accept the risk that she may be wrong." Id. (citing Williams v. Dardenne, 345 S.W.3d 118, 123-24 (Tex. App.-Houston [1st Dist.] 2011, pet. denied)); see also Prudential Ins. Co., 896 S.W.2d at 161 (holding that "as-is" clause acts to sever causal link between alleged misrepresentation and damages that is necessary for recovery because, when buyer agrees to purchase property "as is," buyer acknowledges, by his own admission, that buyer himself is sole cause of any damage that may result from unknown defects).
An as-is clause generally is enforceable if it was a significant part of the basis of the bargain, rather than an incidental or boilerplate provision, and was entered into by parties of relatively equal bargaining position. See Prudential Ins. Co., 896 S.W.2d at 162; Bynum v. Prudential Residential Servs., 129 S.W.3d 781, 789 (Tex. App.-Houston [1st Dist.] 2004, pet. denied). 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. 896 S.W.2d at 162; Bynum, 129 S.W.3d at 788-89.
However, "[a] buyer is not bound by an 'as-is' clause if he demonstrates that he was induced to enter the agreement by fraudulent representation or concealment of information by the seller." Pogue, 605 S.W.3d at 665; see Prudential Ins. Co., 896 S.W.2d at 162. To prove fraudulent representation, the plaintiff buyer must show that "the defendant made a material misrepresentation; the defendant was either aware that the representation was false or that he lacked knowledge of its truth; the defendant intended for the plaintiff to rely on the misrepresentation; the plaintiff relied on the misrepresentation; and the plaintiffs reliance caused injury." Pogue, 605 S.W.3d at 665-66; see Int'l Bus. Machs. Corp. v. Lufkin Indus., LLC, 573 S.W.3d 224, 228 (Tex. 2019).
Flores asserted-and the trial court found-that Douglas had actual knowledge of the damage to the roof that he failed to disclose to Flores prior to them entering the Contract. The trial court also found that Christians "induced Flores into proceeding with the Closing by means of [Douglas's] fraudulent representations or concealment of information." The trial court found that "[b]ut for [Christians'] misrepresentations and concealment of information, Flores would not have purchased the [Property]." The trial court further found that Douglas told Flores he would use the insurance proceeds to fix the roof and that this representation induced Flores to close on the Property. However, even at the time he made the representations, Douglas was concealing information from Flores. Christians ultimately used the insurance proceeds for the benefit of Douglas Christians, individually, and for the Estate, not to repair the roof.
The evidence supporting these findings is sufficient. See Tex. Outfitters Ltd. v. Nicholson, 572 S.W.3d 647, 653 (Tex. 2019) (holding that courts review trial court's findings for legal and factual sufficiency using same standards that we use to review jury verdict); City of Keller v. Wilson, 168 S.W.3d 802, 822-27 (Tex. 2005) (holding that, in legal sufficiency review, we examine evidence in light most favorable to finding under review and evidence is legally sufficient unless it amounts to no more than scintilla); Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001) (holding that, in factual sufficient review, we consider all evidence in neutral light and reverse only if evidence is so weak or finding is so against weight and preponderance of evidence that it is clearly wrong and unjust).
Douglas's own testimony, his responses to interrogatories, and the testimony of roofer Jon Duncanson support the trial court's finding that Douglas had actual, personal knowledge of the damaged roof prior to entering the Contract on behalf of the Estate. Flores testified that Douglas did not disclose damage to the roof, so Flores was not aware of the damage to the roof at the time he entered into the Contract. He learned of the damage from Duncanson after signing the Contract but before closing. Flores further testified that Douglas agreed to file an insurance claim and use the proceeds to fix the roof, and that promise was the reason he continued with closing on the Property. Douglas did not believe that the insurance payout would be sufficient to repair the roof, but he agreed to file the claim. However, instead of providing the proceeds that he had already obtained from USAA, Douglas attempted to seek numerous lower bids and ultimately failed to fix the roof or to provide the proceeds to Flores so that he could fix the roof.
Thus, the evidence was legally and factually sufficient to demonstrate that Christians made a material false representation when he agreed to use the USAA insurance proceeds to repair the concealed roof damage; that he intended for Flores to rely on his misrepresentation; that Flores did, in fact, rely on Christians' misrepresentation; and that Flores suffered damages as a result. See Int'l Bus. Mach. Corp., 573 S.W.3d at 228; Pogue, 605 S.W.3d at 665-66.
Christians points to Douglas Christians' trial testimony that conflicts with Flores's account of the parties' negotiations and subsequent agreement. The trial court, however, found Flores's testimony credible, and we defer to that finding. In a bench trial, the trial court is the sole judge of the witnesses' credibility, and the court may choose to believe one witness over another. Woods v. Kenner, 501 S.W.3d 185, 196 (Tex. App.-Houston [1st Dist] 2016, no pet.). We may not substitute our judgment for that of the trial court. Id.
Christians further argues that Flores could not have reasonably relied on the representation that the insurance proceeds would be used to repair the roof. Christians argues that the Contract itself contained no such obligation and could not be modified orally, that there was no consideration to support the purported agreement to fix the roof, and that Flores was obligated under the Contract to follow through with closing on the sale regardless of what he discovered between signing the contract and closing. These arguments disregard the evidence presented at trial.
The agreement was not a modification of the Contract. It was a separate, valid and enforceable oral agreement between the parties. In consideration of the agreement, Flores agreed to proceed to closing on the sale rather than defaulting on the Contract or delaying the closing and requiring Christians to incur additional carrying costs on the Property. And, contrary to Christians' assertions, Flores could have defaulted on the sale under the terms of the Contract, leaving Christians to pursue his remedies in the event of a buyer's default. Thus, none of these arguments undermine the trial court's conclusion that the as-is clause in the Contract "did not relieve [Christians] of their oral agreement to use the USAA proceeds to fix the roof." Nor do these arguments undermine the fraudulent inducement findings.
The Contract provided, "If Buyer fails to comply with this contract, Buyer will be in default, and Seller may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or (b) terminate this contract and receive the earnest money as liquidated damages, thereby releasing both parties from this contract."
In his first issue, Christians argues that he did not have a duty to disclose the condition of the roof. Under Property Code section 5.008, a seller of certain residential real property is required to give written notice to the buyer of his or her knowledge of the condition of the property, in a form substantially similar to that prescribed in the statute. See Tex. Prop. Code § 5.008(a), (b). However, section 5.008(e) provides that it does not apply to a transfer "by a fiduciary in the course of the administration of a decedent's estate, guardianship, conservatorship, or trust." Id. § 5.008(e)(5). We observe, however, that section 5.008 is not implicated in the oral agreement between Christians and Flores to use the USAA proceeds to fix the roof. We overrule Christians' first issue.
Christians also argues that the trial court's conclusion of law that the sale of the Property was not an arms-length transaction does not invalidate the "as is" provision. The determination of whether the sale was an arms-length transaction is relevant to the validity of the as-is clause. See Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 179-80 (Tex. 1997); Prudential Ins. Co., 896 S.W.2d at 162. We have already concluded, however, that the as-is clause from the Contract did not relieve Christians of his obligations under the separate oral agreement to use the insurance proceeds to fix the roof-an agreement that Christians used to fraudulently induce Flores into closing on the sale of the Property.
Christians complains in part that whether this was an arms-length transaction is a fact issue that cannot be decided as a matter of law. We note that the trial court acted as the factfinder here, and the findings of fact expressly state, "To the extent that any finding of fact made by this Court should properly be considered a conclusion of law and to the extent that any conclusion of law made by this Court should properly be considered a finding of fact, it is the express intent of the Court that any statement identified herein as a finding of fact also be deemed a conclusion of law and any statement identified herein as a conclusion of law shall also be deemed a finding of fact." Accordingly, we construe this conclusion as a finding of fact by the trial court.
Accordingly, we affirm the trial court's findings and conclusions that Christians fraudulently induced Flores into closing on the sale and, thus, the as-is clause did not relieve Christians of the obligations under the oral agreement to use the USAA proceeds to repair the roof. We further conclude that the as-is clause in the Contract here did not negate the causation element of Flores's DTPA claims based on Christians' false representations regarding fixing the roof. We overrule Christians' third issue.
B. DTPA Violation
In his sixth issue, Christians argues that the trial court erred in rendering judgment under the DTPA.
To prevail on a DTPA claim, DTPA plaintiffs are required to show (1) that they were consumers with respect to the purchase at issue, (2) that the defendant engaged in false, misleading, or deceptive acts, and (3) that the defendant's acts were a producing cause of the plaintiffs' damages. See Tex. Bus. & Com. Code § 17.50(a); Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 478 (Tex. 1995); Main Place Custom Homes, Inc. v. Honaker, 192 S.W.3d 604, 623 (Tex. App.-Fort Worth 2006, pet. denied). The trial court found that Flores was a consumer under the DTPA, and Christians does not challenge this finding on appeal.
The trial court further found that Christians "engaged in one or more false, misleading, or deceptive acts or practices that are specifically enumerated under Section 17.46 of the DTPA." Relevant to our analysis, the trial court found that Christians "represented that an agreement confers or involves rights or remedies, which it does not have or involve" pursuant to section 17.46(b)(12); that Christians "knowingly made false or misleading statements of fact concerning the need for replacement or repair" pursuant to section 17.46(b)(13); and that Christians "failed to disclose information concerning goods which were known at the time of the transaction and such failure to disclose such information was intended to induce the consumer into a transaction which the consumer would not have entered had the information been disclosed" pursuant to section 17.46(b)(24). As discussed above, these findings are supported by sufficient evidence.
The evidence indicated that Christians had actual personal knowledge of the damage to the roof. Douglas Christians was maintaining the exterior of the property, including the roof, prior to entering into the Contract. Duncanson told Douglas Christians prior to the execution of the Contract that the entire roof would need to be replaced. Christians did not disclose this information to Flores, and Monte Christians told Flores that an inspection was not necessary because his family would tell him about the condition of the Property. When he discovered the damage to the roof through a third party, Flores discussed the problem with Douglas Christians. Douglas Christians agreed to file an insurance claim with USAA and to use the funds received to fix the roof. Douglas Christians received communications from USAA and $34,730.89 in funds from USAA. Christians did not disclose the nature of those communications to Flores. Multiple roofing experts, including Duncanson, told Christians that the roof could not be repaired, but instead needed to be replaced. But rather than proceeding to fix the roof as recommended by Duncanson and others, Christians urged Flores to accept an asphalt shingle roof or more limited repairs. Christians did not use the funds to fix the roof, nor did he release the funds to Flores. Flores testified that he would not have closed on the Property but for Christians' representations, and the trial court found this testimony credible.
Thus, the evidence indicates that Christians knowingly mislead Flores concerning the need for replacement or repair of the roof. See Tex. Bus. & Com. Code § 17.46(b)(13). Christians failed to disclose information concerning the roof and the insurance claim that were known to him at the time of closing; his failure to disclose that information was intended to induce Flores into proceeding with the transaction; and Flores would not have closed on the transaction had the full information regarding the roof and the use of insurance proceeds to fix it been disclosed to him. See id. § 17.46(b)(24).
Christians argues that, as a matter of law, no DTPA violation occurred because Flores' claims constitute a breach-of-contract action and not a DTPA violation. Christians cites Crawford v. Ace Sign, Inc., 917 S.W.2d 12 (Tex. 1996) and Holloway v. Dannenmaier, 581 S.W.2d 765 (Tex. App.-Fort Worth 1979, writ dism'd) to support this claim. These cases are distinguishable.
In Holloway, the Fort Worth Court of Appeals determined that a tenant failed to allege any facts that fell within the DTPA, observing that "mere failure to later perform a promise does not constitute a misrepresentation" and that the tenant "failed to allege or attempt to prove that the landlords' failure to return the security deposit or an accounting thereof was part of some continuing practice or scheme." 581 S.W.2d at 767. Likewise, in Crawford, the supreme court held that "[a]n allegation of a mere breach of contract, without more, does not constitute a 'false, misleading or deceptive act' in violation of the DTPA." 917 S.W.2d at 14 (quoting Ashford Dev., Inc. v. USLife Real Estate Servs., 661 S.W.2d 933, 935 (Tex. 1983)). The supreme court concluded that the "essence" of the plaintiff's allegations in Crawford was that "the defendant represented that they would perform under the contract" and "nonperformance means that they misrepresented that they would perform under the contract." Id. The court stated, "To accept this reasoning, however, would convert every breach of contract into a DTPA claim. [Defendant's] statements were nothing more than representations that the defendants would fulfill their contractual duty . . ., and breach of that duty sounds only in contract. The statements themselves did not cause any harm." Id.
Here, by contrast, Flores alleged more than a mere breach of the oral agreement to use the USAA proceeds to repair the roof. He alleged and provided evidence, which the trial court found credible, indicating that Christians concealed the damaged condition of the roof, fraudulently induced Flores into closing on the sale by promising to use insurance proceeds to fix the roof, concealed communications from the insurance company, and misused the funds from the insurance company. These facts rise above the allegation of a "mere failure to perform a promise." See Holloway, 581 S.W.2d at 767. And Flores alleged and proved that Douglas's misrepresentations themselves caused more damage than just a breach of the agreement-the statements induced Flores to close on the Property rather than walk away once he realized that the damage to the roof had been concealed from him, and Douglas continued to misrepresent the communications with the insurance company and the nature of the repairs that were necessary to fix the damaged roof. See Crawford, 917 S.W.2d at 14.
Christians also argues that the evidence that his conduct was unconscionable is legally and factually insufficient. We observe, however, that to succeed on his DTPA claim, Flores was required to prove (1) that he was a consumer with respect to the purchase at issue, (2) that Christians engaged in false, misleading, or deceptive acts, and (3) that Christians' acts were a producing cause of Flores's damages. See Tex. Bus. & Com. Code § 17.50(a); Doe, 907 S.W.2d at 478; Main Place Custom Homes, Inc., 192 S.W.3d at 623. The element requiring that Christians engaged in false, misleading, or deceptive acts can be established by a showing that he committed a wrongful act by engaging in a false, misleading, or deceptive act that is enumerated in a subdivision of the Texas Business and Commerce Code section 17.46(b), breached an express or implied warranty, or engaged in an unconscionable action or course of action. See Tex. Bus. & Com. Code § 17.50(a); Godfrey v. Sec. Serv. Fed. Credit Union, 356 S.W.3d 720, 725 (Tex. App.-El Paso 2011, no pet.); Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 649 (Tex. 1996). We have already concluded that that the trial court's findings that Christians committed at least one wrongful act enumerated in section 17.46(b) were supported by legally and factually sufficient evidence. Accordingly, we need not address these arguments regarding unconscionable actions.
We overrule Christians' sixth issue.
C. DTPA Treble Damages
In his seventh issue, Christians challenges the trial court's award of exemplary damages under the DTPA.
The DTPA provides that the trier of fact may award up to three times the amount of economic damages if it finds that the defendant knowingly committed the unlawful conduct. Tex. Bus. & Com. Code § 17.50(b)(1). "Knowingly" means "actual awareness, at the time of the act or practice complained of, of the falsity, deception, or unfairness of the act or practice giving rise to the consumer's claim[.]" Id. § 17.45(9). The DTPA further provides that "actual awareness may be inferred where objective manifestations indicate that a person acted with actual awareness." Id.
Christians argues that Flores failed to establish that Christians did not intend to repair the roof at the time of the alleged promise. We disagree. The evidence demonstrated that Christians knew, at the time of closing, that USAA paid $34,730.89 on the roof claim and that both Duncanson and the USAA inspector reported that the roof could not be repaired, but needed to be replaced. Rather than provide this information to Flores, Christians promised that he would use the insurance proceeds to fix the roof, but then contacted numerous other roofers in an attempt to find a cheaper way to fix the roof. Despite having the funds from the USAA check and Duncanson's offer to replace the roof for whatever USAA paid on the claim, Christians nevertheless failed to fix the roof. This is conduct that would allow the factfinder to infer that Christians never intended to use the USAA proceeds to fix the roof and that he knowingly withheld information and funds from Flores.
Christians argues in his brief that he sent "at least eleven roofers to the [Property] to bid on roof repairs" and "was attempting in good faith to come up with a win-win situation for his nephew." However, Christians' ongoing concealment of material information, beginning with failing to tell Flores about the roof damage prior to signing the Contract and continuing through his misrepresentations prior to and after closing, support the trial court's conclusion that Christians did not act in good faith.
We overrule Christians' seventh issue.
Because we conclude that the trial court's judgment awarding damages under the DTPA was supported by the evidence, we need not consider Christians' issues challenging other potential bases for judgment, including his fourth issue challenging the breach of contract claim, his fifth issue challenging the fraud in a real estate transaction claim, and his eighth issue challenging the negligent misrepresentation claim.
Christians' Individual Liability
In his second issue, Christians argues that he cannot be found personally liable as a matter of law under the purchase Contract. He argues he was acting solely as the executor of the Estate. We observe, however, that the trial court's judgment was rendered on the basis of DTPA violations, and the evidence at trial indicated that Douglas Christians acted, at times, on his own behalf, as a beneficiary of Estate, and in his capacity as executor of the Estate.
The trial court made the following conclusions:
68. Defendants [defined as Christians, individually and as executor, and the Estate] are jointly and severally liable in this lawsuit.
69. Doug Christians is personally liable in this lawsuit for several reasons, including the fact that he failed to disclose and concealed material and known facts that were within his own personal knowledge regarding the roof damage. He obtained this knowledge while Dale K. Christians was still alive and before Doug Christians became the Executor of the Estate. Doug Christians cannot disavow knowledge he has in his individual capacity and attempt to hide behind his role as Executor of the Estate.
70. Doug Christians is also personally liable in this lawsuit because he purposefully and intentionally drained the Estate's bank account of all but $750.00. The funds put into the Estate's bank account included the USAA proceeds that should have been used to repair or replace the roof.
71. Doug Christians is also personally liable because he used the USAA proceeds for other purposes, including to have Estate jewelry appraised.
72. Doug Christians is also personally liable because he instructed the heirs to pay each other directly for personal property items so that no
additional money would come into the Estate to pay Flores, and he paid the proceeds of the sale of the house in the amount of approximately $255,000.00 to himself and Monte Christians, knowing that there was an actual or potential outstanding liability against the Estate for the repair or replacement of the damaged roof.
Christians cites Mohseni v. Hartman, 363 S.W.3d 652 (Tex. App.-Houston [1st Dist] 2011, no pet.) and similar cases to support his proposition that his duties were to the Estate and not to Flores, but Mohseni is factually distinguishable. In Mohseni, this Court reaffirmed the general principle that an "independent executor's fiduciary duty runs to the estate's beneficiaries," and, thus, "the independent executor owes a legal duty of care to the estate and its beneficiaries." 363 S.W.3d at 657. We concluded that an executor's duties did not extend to benefit the estate creditors. Id. at 658. Nothing in Mohseni supports a conclusion that an individual-even one who also serves as an independent executor-cannot be held liable for his own fraudulent acts or violations of the DTPA. Here, Flores did not assert that Christians owed him a duty regarding handling Estate funds; rather, Flores argues that Christians, both individually and on behalf of the Estate, committed violations of the DTPA.
Christians further argues that he was essentially acting as an agent of the Estate. See Ward v. Prop. Tax Valuation, Inc., 847 S.W.2d 298, 300 (Tex. App.- Dallas 1992, writ denied). As we have stated above, however, Flores alleged acts that went beyond Christians' role as executor of the Estate. The trial court found that Douglas Christians, individually, had material information that he concealed and that he personally made material misrepresentations to Flores, and the evidence supports these findings.
We overrule Christians' second issue.
Award of Personal Property
In his ninth issue, Christians argues that the trial court erred in awarding Flores the personal property that remained in the house after the sale.
Christians argues that Flores did not plead for the award of personal property. However, the amended petition-the live pleadings at the time of trial- contained the following allegations:
In addition, Doug Christians, as Executor of the Estate agreed that Flores could purchase certain items from his Grandfather's estate at an agreed upon price, such as a Grandfather clock. Other items (generally under $15 resale value) of his Grandfather's personal property which were left in the home that Flores wished to keep for sentimental purposes remained at [the Property] at closing. The Estate removed all personal effects of Flores's grandfather, which the Estate believed they could sell. Recently, items that the Estate was unable to sell have been donated to nonprofit charities because the Estate determined that the time to profit ratio was not worth the effort of selling said remaining items. Doug Christians initially had no interest in any items in Flores's possession, but has now demanded that Flores make a bid on items that Flores took possession of over a year prior. Doug Christians has now stated his intention to make a counter bid with the intent that Flores's items would be given to the highest bidder.
Thus, there were pleadings addressing the issue of personal property left in the Property at closing.
Christians argues on appeal that Flores has not paid for any of these items of personal property, but Christians did not file his own counterclaim seeking to have this property awarded to him or to the Estate. He did not ask to have this personal property valued. He argues that the award of personal property is not a proper measure of damages for any of Flores's causes of action, but the trial court did not award the personal property as a measure of damages. The judgment awarded actual damages based on the estimates to replace the roof and states in a separate paragraph that "all personal property items in Plaintiffs' possession at the time of the purchase of the property at issue, located at 3601 Saddlestring Trail, Austin, Texas 78739, are the property of Plaintiff." Given the state of the pleadings and the evidence, we cannot conclude that the trial court erred in resolving the issue of the ownership of personal property left in the Property at the time of closing.
We overrule Christians' ninth issue.
Attorney's Fees
In his tenth issue, Christians argues that the trial court erred in awarding Flores attorney's fees.
The DTPA provides that "[e]ach consumer who prevails shall be awarded court costs and reasonable and necessary attorneys' fees." Tex. Bus. & Com. Code § 17.50(d). Flores prevailed on his DTPA claims, and he presented evidence of the attorney's fees he incurred in litigating his suit. During closing arguments, Christians contended that Flores's attorney failed to segregate fees incurred in prosecuting his own claims from fees incurred in defending against Christians' counterclaim under Rule of Civil Procedure 13 that the suit was frivolous and groundless. The trial court rejected this contention, concluding that "Flores only needed prove the elements of his own causes of action to defeat Defendants' counterclaim for frivolous or groundless lawsuit," and so segregating fees on that basis was impossible. The trial court further found:
74. Flores submitted invoices for all of the attorneys' fees he incurred in this litigation, which were admitted as a trial exhibit.
75. A review of the Flores's attorneys' fee invoices admitted as a trial exhibit shows that none of Flores's attorneys' fees were incurred in defending Defendants' counterclaim, and all attorneys' fee invoices were for work on prosecuting Flores's case in chief.
The trial court concluded:
57. Flores is entitled to recover his reasonable and necessary attorneys' fees and expenses in the amount of $47,475.87 for the prosecution of this case through judgment.
. . . .
63. The only counterclaim brought by Defendants alleged that Plaintiff brought a "frivolous and groundless lawsuit." Flores's lawsuit against Defendants is not frivolous, groundless, or brought in bad faith.
64. Flores is not obligated to segregate out his attorneys' fees for defending against Defendants' sole counterclaim rather than Flores's affirmative causes of action because Defendants' counterclaim that Flores's lawsuit was frivolous or groundless is so intertwined with Flores's affirmative claims that, they are in fact, one and the same
issue. The argument that Flores is right and justified in his claims is the same argument that Defendants are wrong and unjustified in their claims.
65. All of the attorneys' fees incurred by Flores were to further his causes of action and to defeat Defendants' position that Flores's causes of action were frivolous or groundless, and cannot be separated out or segregated.
Christians now argues on appeal that the trial court erred in awarding Flores's attorney's fees as a matter of law because he failed to segregate his attorney's fees between recoverable and nonrecoverable claims. However, Christians failed to object on this basis in the trial court, and so this complaint is waived. See Haden v. David J. Sacks, P.C., 332 S.W.3d 503, 516 (Tex. App.- Houston [1st Dist] 2009, pet. denied) (holding lack of objection to failure to segregate fees waives error); Martinez Jardon v. Pfister, 593 S.W.3d 810, 831 (Tex. App.-El Paso 2019, no pet.) (holding that "[a] complaint on appeal that does not comport with the party's objection at trial is not preserved for review").
We overrule Christians' tenth issue.
Conclusion
We affirm the judgment of the trial court.