Opinion
09-19-00196-CV
06-29-2021
JEREMY ROHRS AND JOYCE ROHRS, Appellants v. GEORGE E. HARTZ AND MAUREEN J. HARTZ, Appellees
Submitted on March 1, 2021
On Appeal from the 284th District Court Montgomery County, Texas Trial Cause No. 17-12-14931-CV
Before Golemon, C.J., Kreger and Johnson, JJ.
MEMORANDUM OPINION
W. SCOTT GOLEMON CHIEF JUSTICE
Appellants Jeremy and Joyce Rohrs (collectively referred to as "the Rohrses") appeal the trial court's take nothing judgment on their claims against George E. Hartz and Maureen J. Hartz (collectively referred to as "the Hartzes") relating to their purchase of the Hartzes' house. In four issues on appeal, the Rohrses complain that the trial court erred by issuing a directed verdict on Joyce's claims for breach of contract and fraud by nondisclosure, failing to submit a negligence question to the jury, and refusing to allow expert testimony. We affirm the trial court's judgment.
BACKGROUND
On April 20, 2017, Joyce executed a Residential Contract with the Hartzes to purchase their house, and the contract contained a Seller's Disclosure Notice, in which the Hartzes reported that during the 2016 Memorial Day Flood, there was one inch of water in the home for one hour and that they had repaired the house. After the house flooded during Hurricane Harvey, the Rohrses found "oddities" in the previous repairs that the Hartzes had completed and extensive mold. Based on their discovery that the Hartzes failed to properly remediate the house by removing the baseboards and cabinets, the Rohrses filed suit against the Hartzes, alleging causes of action for common law fraud, fraudulent inducement, statutory fraud, fraudulent misrepresentation, fraud by nondisclosure, breach of contract, negligent misrepresentation, negligence, negligence per se, unjust enrichment, conspiracy, exemplary damages in connection with the purchase of a property, and violations of the Texas Deceptive Trade Practices Act ("DTPA"), including unconscionable actions or courses of actions under the Texas Business and Commerce Code. The Hartzes filed a general denial, verified denial, affirmative defenses, an inferential-rebuttal defense (Act of God), and a counterclaim for attorney's fees.
The trial court conducted a jury trial. Jeremy Rohrs testified that he and his wife, Joyce, purchased their house located in Magnolia, Texas from the Hartzes. Jeremy testified that the first time he saw the house, Maureen Hartz told him that the house had flooded on Tax Day and it was a "freak accident, like an occurrence of weather phenomenon[.]" According to Jeremy, Maureen told him that a blockage in the drainage or water easement was a contributing factor to the flood, and that the debris and fencing that caused the blockage had been removed. Jeremy testified that Maureen told him that during the flood one inch of water was in the house for one hour, and during his second visit, Maureen "reiterated the 1 inch for one hour thing several times[.]" According to Jeremy, Maureen did not tell him about any neighborhood flooding. Jeremy further testified that Maureen told him that "everything was repaired[]" after the flood.
Jeremy explained that the sales flyer from the home disclosed that "[t]his home had 1 inch of flooding on 5-16, 500-year flood, but has been completely restored with new drywall, trim, and paint[, ]" along with "[n]ew baseboards, doorjambs and doors, custom cabinets throughout." Jeremy testified that the sales flyer also indicated that the house "[f]looded past Memorial Day for one hour with 1 inch of water. Water did not stand in house. No water lines in house were found. Extreme unusual weather." According to Jeremy, the sales flyer disclosed that the repairs included two feet of drywall and painting, and Jeremy believed that "everything was thoroughly fixed[.]"
Jeremy also explained that he relied on the Seller's Disclosure Notice, in which the Hartzes disclosed "'[i]n 500-year flood zone, Memorial Day 2016, Houston. Unusual weather. 1 inch water in house for . . . one hour. No water line found. Repaired. Have pictures.'" According to Jeremy, the Hartzes never indicated that their catch phrase of "1 inch for one hour[]" was a guess. Jeremy testified that the Seller's Disclosure Notice did not include any necessary repairs and stated that the Hartzes had received insurance proceeds that were used to repair the house. Jeremy explained that while he was concerned about buying a house that had flooded, he did so because the Seller's Disclosure Notice led him to believe that the house had been adequately repaired. Jeremy also testified that the Supplemental Seller's Disclosure did not report any mold in the house.
Jeremy explained that he hired a home inspector, because he "wanted a professional to look over the house to make sure it was as described." According to Jeremy, the inspection was "very thorough[, ]" and the report indicated that "[e]verything was good, overall[.]" Jeremy explained that after the inspection came back, he and Joyce decided to buy the house, but Jeremy did not sign the contract with Joyce because she secured the financing alone. Jeremy testified that the contract stated that they were accepting the property "'As is.'" After hearing Jeremy's testimony, the trial court found that Jeremy was not a party to the contract and lacked standing to pursue a breach of contract claim. The trial court also dismissed Jeremy's claim for fraudulent inducement.
Jeremy also testified that he and Joyce did not purchase flood insurance because they did not know of any other flooding history other than the "freak occurrence[]" that the Hartzes disclosed. Jeremy explained that during Hurricane Harvey, approximately twenty-two inches of water was in the house for about four days. Jeremy testified that as soon as the water went down, he pumped the water out and pulled out the baseboards and sheetrock. Jeremy explained that when he pulled off the baseboards in the kitchen and bathrooms, he discovered that they were pieces of molding that acted as a veneer covering over the original baseboards, which had holes drilled in them that were plugged with tape and plaster. According to Jeremy, the Hartzes never disclosed that there were holes drilled in the original baseboards in areas that had built-in cabinets and vanities, and he was shocked to find mold on the baseboards that the Hartzes failed to remove after the Memorial Day Flood. Jeremy testified that he did not find mold in any other areas of the house. Jeremy explained that he hired Fernando Martinez, a mold expert, to perform a mold inspection because he was worried about the mold, and after reviewing the expert's report, Jeremy "thought we got taken."
Jeremy further testified that the Hartzes disclosed that everything had been repaired, but Jeremy found original sheetrock and rusty nails behind the cabinet areas. According to Jeremy, the Hartzes did not accurately describe the condition of the house because it was not completely repaired. Jeremy explained that he would not have purchased the house had he known about its condition. Jeremy testified that after Hurricane Harvey, he had to demolish everything and put in all new drywall, molding, and cabinets. Jeremy further testified that he filed the lawsuit because "we had a contract[, ]" and the Hartzes "told us one thing, and it was the complete opposite." Jeremy explained that he worries about whether he will be able to completely repair or sell the house, and although he currently has flood insurance, he worries about future flooding.
On cross-examination, Jeremy testified that it was six or seven days after Hurricane Harvey when he removed the molding and found the mold, and Jeremy agreed that the flood water was higher during Hurricane Harvey, and he did not know whether the damage was caused by Hurricane Harvey or the Memorial Day Flood. Jeremy testified that although the Hartzes disclosed the Memorial Day Flood, he felt that the Hartzes had intentionally lied to him and mispresented the truth about the "way the house was remediated." Jeremy explained that based on Martinez's report, he believed that the mold was caused by the Memorial Day Flood because it was attached to drywall and molding that the Hartzes failed to remove.
According to Jeremy, a fair resolution for the damage that the Hartzes had caused him would be to undo the sale and for the Hartzes to give him his money back, but knowing that was impossible, Jeremy sent a demand letter asking the Hartzes to pay $719,484 in damages. Jeremy explained he did not purchase flood insurance because he relied on the Hartzes' representation that the Memorial Day Flood was a "freak occurrence" and that there was no other flood history. Jeremy also testified that he relied on the professional advice of his real estate agent who represented him during the purchase as well as the advice of Charles Pyle, the home inspector he hired prior to buying the house. According to Jeremy, Pyle's inspection report did not mention any mold or moisture problems or air quality concerns. Jeremy testified that he also got a favorable septic inspection prior to the purchase, but he was suing the Hartzes for damages to the water well that occurred after Hurricane Harvey, because the Hartzes failed to disclose that the pipes to his water well were attached to the neighbors' wells.
Maureen testified that she hired realtor Sonya Renteria to sell her house. Maureen testified that she told the Rohrses that when it rains water flows across the road and passes through her property. Maureen also testified that the only time her house flooded was during the 2016 Memorial Day Flood. Maureen explained that she was not at the house the night it flooded, and when she returned the next day, the water was gone and there were only a "couple of puddles" inside the house. According to Maureen, there was no water line inside the house, and from what she could tell from the time frame, she guessed that water had been in the house for "as long as one hour or a little bit less, more." Maureen testified that she told the Rohrses that one inch of water had been in the house for one hour, and that she believes that is a correct representation.
Maureen testified that she made a flood insurance claim because some of the baseboards peeled away from the wall. Maureen testified that they did not conduct any mold testing after the Memorial Day Flood.
Maureen explained that a contractor and a neighbor helped her with the demolition, which included taking out the drywall and baseboards but not the cabinets or any stone veneer. Maureen further explained that she hired a custom cabinet worker to drill holes in the bottom piece of wood on the cabinets because "[t]hat's what FEMA told us to do," and then she had another worker put a kickplate over the holes. Maureen also testified that she hired a contractor to repair the elevated tub in the master bathroom, and she believed that he had done so.
Maureen testified that she and her husband, George, filled out the Seller's Disclosure Notice form, and she disclosed that the house had one inch of water for one hour because that is what she believes. Maureen explained that she was "only going by what we were told and what we saw and the information we were handed." According to Maureen, she had lived in the house thirteen years and never had water in the house, and she wanted the purchaser to know that water had gotten in the house. Maureen explained that someone from the flood zone told her that her neighbor's fences had caused her to flood because they were built in the floodway, and after the flood knocked the fences down, they were never rebuilt. Maureen testified that she told the Rohrses that the "house was being sold as-is."
George testified that the first time his house flooded was on Memorial Day of 2016. George explained that when he returned to his house, he observed "just one puddle and puddles by the doors," as well as "a little bit of water" in the bedroom and at the front door. George testified that he did not know exactly how long water had been in the house because he was not there when it flooded. According to George, one inch of water was their "best guestimate[, ]" so they put it in the disclosure to "make sure that whoever bought the home knew that the water had come in and . . . had gone out very quickly."
George explained he received $85,000 from his insurance company to repair the house and that the actual work performed after the flood was smaller than the insurance scope, because once the contractor removed the drywall, they could see that the water had not gotten into anything else. George also explained that he could not get reliable contractors to do all the work, so he and Maureen did quite a bit of the work themselves. According to George, in addition to the time he spent performing repairs, he paid $28,486 to contractors and replaced a lot of things, including a washer and dryer and items in the garage. George testified that he never conducted any moisture or mold testing in the house, and after he finished the repairs, which took about four to six months, he put the house on the market. George explained that he signed the Seller's Disclosure Notice and noted that there had been previous flooding in the house because he wanted the purchaser to "know that water did get in the house, water got out of the house quickly, and that we never saw hardly any water in the home, and that we repaired it to the best of our knowledge." According to George, he also disclosed that he had flood insurance and had made a claim on that insurance.
George also testified that when he returned after the flood, he did not observe any water lines inside the house or on any of the furniture. George explained that the repairs included removing up to two feet of the drywall in the house and garage. George testified that during the renovation, he never saw any substance that he believed to be mold. George also explained that he did not notice any water in any of the cabinets inside the house and that holes were drilled underneath the cabinets to check for water and to "spray things in there to clean it." According to George, he did not remove any cabinetry, and he never disclosed that they had drilled holes in the cabinets. George testified that he was satisfied with the condition of the home after the repairs were finished.
George further testified that the water well was working properly when he sold the house to the Rohrses, and although his well was originally connected to his neighbors' house, there was a shut off valve in his pump house that had always remained shut off. After George received a demand letter from the Rohrses in October of 2017, he had the water well inspected to determine what the problem was, and the inspection indicated that the problem was caused by the well being underwater during Hurricane Harvey. George testified that he paid for the inspection and had also incurred attorney's fees to defend against the Rohrses' lawsuit.
Martinez testified that he owns Preferred Home Inspections and is licensed to perform mold consulting and inspections. Martinez testified that he is required to take additional trainings to renew his company's license to conduct mold inspections. Martinez explained that during a mold inspection, he looks for sources of water penetration from outside the house, and he conducts thermal imaging and moisture meter testing inside each individual room. Martinez further explained that to determine whether there is mold in the house, he uses an impaction cassette to trap mold spores that are drawn in from the air return, and he sends the mold spores to a lab to be analyzed. According to Martinez, this process gives the spore count per cubic meter of what kind of spores are in the air.
Martinez testified that on September 11, 2017, he conducted a mold inspection for the Rohrses. Martinez explained that he arrived in an "unusual circumstance" because the Rohrses had taken all the wet items apart within the prescribed forty-eight-hour period to prevent additional mold growth. During Martinez's testimony, the Hartzes challenged Martinez's qualifications to testify as a mold expert, and the Hartzes' counsel took Martinez on voir dire outside the presence of the jury.
During voir dire, Martinez testified that he had been conducting mold assessments since 2005, which was before any licensing was required. Martinez explained that to qualify as a mold assessment consultant, he took training classes in Florida to learn how to test for mold, and he currently uses Inspector Lab, a lab in Fort Lauderdale which is licensed to do business in Texas. According to Martinez, he received training to identify the types of molds and learn about mold growth, but he did not receive any specialized training concerning the cellular makeup of mold. When asked what specific education and training allows him to render an opinion regarding when the mold started and stopped growing on the baseboards, Martinez testified that "all the different classes that I've taken over the years and my experience." Martinez testified, "I can't go back in time and tell you exactly which class it was, but I'm saying it's countless classes over the years that have taught me how to identify mold[.]" Martinez also explained that a specific test to determine the age of mold is conducted by the lab that he sends his bulk samples to, so his opinion regarding the mold is based on the interpretations of individuals from the lab. According to Martinez, he is not a microbiologist and does not perform any mold analysis, but the lab uses the bulk samples he collects to determine the type of mold and the number of colonies, which is then used to determine the age of the mold. Martinez testified that "there's no test that I'm aware of that tells you whether mold is ten days, 100 days, or 30 years old."
Based on Martinez's voir dire testimony, the Hartzes moved to disqualify Martinez as an expert, arguing that Martinez had been unable to explain any specific training or education that would qualify him to give any opinions based on the mold growth and age. The trial court expressed concern that Martinez relies on the analysis conducted at the lab and does not have the qualifications to interpret the information or the expertise to determine the mold's age. The trial court explained that Martinez's experience cannot be his methodology, and Martinez's training includes data collection rather than performing tests to determine the mold's age. When the trial court asked if the lab determines how old the mold is, Martinez explained that "[n]obody can say that[, ]" but Martinez also testified that based on his training and expertise, he can tell how old the mold is before he sends it to the lab. After hearing Martinez's explanation, the trial court stated that "now we're in a world of complete speculation[.]" The trial court found that Martinez could only testify as a fact witness based on his observations at the house, but Martinez was not qualified to testify as an expert and could not render any opinions.
The Rohrses made an offer of proof outside the presence of the jury, which included Martinez's excluded expert testimony and his mold assessment report. During the offer of proof, Martinez testified about the mold and air quality tests he performed at the house. Martinez testified that there were two units in the front and back of the house and when he tested the units, both tests came back with highly elevated mold spore counts of "20-something thousand spore[s] per cubic meter." Martinez explained that he also performed a bulk test, which was sent to the lab along with the cassettes. According to Martinez, the bulk test lab results "came back Chaetomium, which is a toxic mold." Martinez also testified that the Rohrses had performed a proper demolition, which included tearing out the cabinets. According to Martinez, if any water enters a home, it is improper to drill holes in the bottom of cabinets because "you can't get all the moisture and the mold has been absorbed in the cleats into the cabinets."
Martinez testified that he noted in his mold assessment report that there was heavy mold growth because there had been previous water penetration, and the cabinets had not been removed. Martinez explained that while you cannot tell exactly how old mold is, "you can tell how old it is not." According to Martinez, "[t]he mold growth there was minimum weeks old[, ]" and based on his experience, he opined that the mold was definitely from a previous flood. Martinez testified that the mold could not have been from Hurricane Harvey because the mold did not have time to grow because the Rohrses immediately tore everything out, and based on photographs, Martinez could tell that the cabinets had been covered with a veneer "so that an inspector would not be able to see that there had been previous water penetration." Martinez opined that based on the extremely high numbers in the lab report, "there is no way that those numbers could have happened during Harvey."
After the offer of proof, Martinez testified in front of the jury as a fact witness. Martinez testified that he is a home inspector, and on September 11, 2017, he conducted a non-invasive home inspection for the Rohrses, which included examining the debris from the demolition of the house. According to Martinez, he observed holes on all the toe kicks from all the cabinets in the house.
Jeanette Seidel testified that she lives across the street from the house that the Hartzes sold to the Rohrses. Seidel testified that she had lived in the neighborhood since 1989, and the Hartzes moved to the neighborhood in 2005 or 2006. Seidel testified that the neighborhood flooded in 1994, 2000, and on Memorial Day of 2016. Seidel explained that the end of the road flooded on Tax Day of 2016. Seidel also explained that she stayed at her house during the Memorial Day Flood, and the Hartzes returned the following day. Seidel testified that she did not know how long the water was in the Hartzes' house and that Maureen told her that nothing got under the cabinets.
Joyce testified that on her second visit to the house she spoke with Maureen, who told her that the property had flooded on Tax Day, not Memorial Day, and that it had flooded "very minimally, only an inch for about an hour, and it was a complete fluke, weather phenomenon, basically." According to Joyce, the Hartzes were very consistent with their estimate that there was one inch of water in the home for one hour. Joyce explained that Maureen walked her through the backyard and showed her the natural drainage, and Maureen explained that the house flooded because of a blockage in the drainage easement. Joyce further testified that Maureen did not disclose any other neighborhood flooding. According to Joyce, she did not have any bad feelings about purchasing the house because she thought the Memorial Day Flood was a very unusual circumstance.
Joyce also testified that Maureen told her that everything had been remediated after the flood, and the house appeared to have been completely repaired. Joyce explained that she received a Seller's Disclosure Notice, which reiterated that the flood was a "fluke type of weather phenomenon and that there was [one] inch of water in the house for one hour." Joyce testified she purchased the house with her husband, Jeremy, but his name was not on the contract because of his status as a small business owner. Joyce further testified that the contract she signed stated that the buyer accepts the property as-is. According to Joyce, she purchased the house for $429,000.
Joyce testified that after the water receded from Hurricane Harvey, she and Jeremy immediately began demolition work because they did not want any mold in the house. Joyce explained that when they removed the baseboards and cabinets, she was confused when she observed that holes had been drilled in the bottom of the cabinets. According to Joyce, the Hartzes did not disclose that they had drilled holes in the cabinets, and Joyce would not have bought the house had she known about the repairs. Joyce explained that she believed the Hartzes had lied to her. Joyce also explained that the value of her house had decreased to approximately $250,000 since she bought it, and there are several houses in her neighborhood that are on the market for a decreased price. According to Joyce, purchasing the house and dealing with a flood has negatively affected her finances and her daily life, and she filed the lawsuit to "make right the situation that we were put in."
On cross-examination, Joyce testified that she accepted the property "'As is[, ]'" which according to the contract, means the "'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.'" Joyce also testified that the contract allowed her to inspect the property, and she hired Pyle to perform an independent inspection, which revealed numerous problems that were "fairly minor." According to Joyce, she relied on Pyle's report, which did not include a mold inspection. Joyce explained that she did not purchase flood insurance on the house even though it had previously flooded, because she judged the Hartzes' "experience to be a fluke and not something that we were likely to incur again." Joyce testified that Hurricane Harvey "was unprecedented as far as its strength and length," but not a "'fluke' necessarily." Joyce also testified that the survey she received prior to the purchase showed that the property was affected by the 100-year flood plain.
Joyce further testified although the Seller's Disclosure indicated that the Hartzes had photographs of the damages and repairs that were done after the Memorial Day Flood, Joyce did not feel that it was necessary to obtain them based on the information she was given. According to Joyce, if she had viewed the photograph showing the holes drilled in the bottom of the cabinet, she would not have purchased the house, because it was not a proper way to remediate after a flood. Joyce explained that the pictures that she declined to review would have caused concerns and raised more questions about the repairs. Joyce also explained that she had no major complaints about the house prior to Hurricane Harvey and that her estimation that the house was valued at $250,000 was based on its current condition, which included incomplete repairs, as well as its history of multiple floods.
Joyce testified that her lead contractor, Barry Thompson, was the first person who found a green substance in the house after Hurricane Harvey, and Joyce explained that she was suing Thompson's company regarding the work he performed at her house and for making representations about his contract that were untrue. Joyce also testified that the Hartzes made misrepresentations in the Seller's Disclosure Notice by failing to disclose wood rot, the amount of water that got in the house, the time frame the water remained in the house, and the improper drainage. According to Joyce, her entire house was under twenty-two inches of water after Hurricane Harvey, but she knew the mold was caused by the Memorial Day Flood, because it was "only in the places where the previous repairs were not inclusive of removing everything." Joyce testified that she was suing the Hartzes for "selling us a house that we believe was not remediated correctly." According to Joyce, the Hartzes knew that the house was not repaired and remediated correctly. Joyce explained that she was seeking to recover the loss of value of the house, the cost of repair, mental anguish, and attorney's fees. Joyce's attorney testified that his attorney's fees for prosecuting the case totaled $36,253.54.
After the Rohrses rested, the Hartzes made a motion for a directed verdict on the Rohrses' claim of unconscionability under the Deceptive Trade Practices Act (DTPA), arguing that no testimony was elicited regarding an unconscionable act or any evidence that the Rohrses were taken advantage of to a grossly unfair degree based on their lack of experience, knowledge, or capacity. After taking the matter under advisement, the trial court denied the motion for directed verdict on the Rohrses' claim under the unconscionability provision of the DTPA. See Tex. Bus. & Com. Code Ann. § 17.50(a)(3). The trial court also found that there was no evidence to show that there was any knowledge of any falsity and granted the Hartzes' motion for directed verdict as to the "knowingly" and "intentionally" elements under the DTPA. See id. § 17.45(9), (13).
Regarding the DTPA laundry-list provisions under section 17.46(b), the trial court denied the Hartzes' motion for directed verdict as to sections 17.46(b)(9) (advertising goods or services with intent not to sell them as advertised) and 17.46(b)(13) (knowingly making false or misleading statements of fact concerning the need for parts, replacement, or repair service), but granted the motion as to sections 17.46(b)(12) (representing that an agreement confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law), 17.46(b)(15) (basing a charge for the repair of any item in whole or in part on a guaranty or warranty), and 17.46(b)(20) (representing that a guaranty or warranty confers or involves rights or remedies which it does not have or involve). See id. § 17.46(b)(9), (12), (13), (15), (20). The trial court also denied the Hartzes' motions for directed verdict on the Rohrses' claims for common law fraud and fraudulent inducement, but granted the Hartzes a directed verdict on the Rohrses' claims for negligent misrepresentation, negligence per se, civil conspiracy, fraud by nondisclosure, and on the issues of gross negligence, fraud, and malice as a basis for submitting a punitive damages question.
In their defense, the Hartzes presented the testimony of Renteria, who testified that she represented the Hartzes during the sale of their house to the Rohrses. Renteria explained that the contract contained an "as is" provision. Renteria testified that she knew the house had previously flooded and had discussed the damages and repairs with the Hartzes and with the Rohrses' real estate agent, and Renteria explained that she sent the Rohrses' agent pictures showing the condition of the house the day after the flood. Renteria further testified that she did not know how much water was in the house during the Memorial Day Flood, and she told the Rohrses' agent that they may want to check on flood insurance. Renteria explained that when she looked at the cabinets, she did not observe any green substance. Renteria also explained that she did not know that the Hartzes had drilled holes in the trim below the cabinets. According to Renteria, after the Rohrses conducted a home inspection, they requested some repairs.
Pyle testified that he is a home inspector, and he conducted a visual inspection of the house for the Rohrses. Pyle testified that he does not conduct mold inspections. Pyle further testified that during his inspection, he did not observe any organic growth in the house. According to Pyle, he did not know that the house had flooded, and he did not see any signs that water had been in the house. Pyle explained that his inspection did not include looking behind the baseboards.
Tony Dugue testified that he is a trim carpenter, and he did work for the Hartzes after the Memorial Day Flood. Dugue explained that when he arrived at the house approximately two and a half months after the flood, the trim, sheetrock, and insulation had been removed. Dugue also explained that he put a quarter inch "skin over the front of the toe space[]" on the cabinets. Dugue testified that he did not drill the holes in the boards, and that it is not unusual to put a veneer over boards that have holes drilled in them. According to Dugue, he did not see any organic growth on the boards when he installed the veneer.
Randy Goff testified that in July of 2016, he completed drywall work for the Hartzes. Goff explained that he did not see any signs that water had been in the house, and he did not smell any mold or see any organic growth. According to Goff, if he had smelled mold, he would not have completed the drywall work and would have recommended that the Hartzes remove the sheetrock and insulation. Goff testified that it is a common procedure to drill holes in the boards underneath the cabinets to allow them to ventilate and dry out, and he observed the exposed holes when he was at the house.
Mary Ann Nelson testified that she has known the Hartzes since 2005, and she met the Rohrses after Hurricane Harvey. Nelson explained that she had lived in the neighborhood since 1988, and the neighborhood had flooded in 1994, on Memorial Day 2016, and during Hurricane Harvey. According to Nelson, her house took on twenty-four inches during the Memorial Day Flood, and the water receded the next day. Nelson testified she did not go into the Hartzes' house after the Memorial Day Flood, but the Hartzes told her that they "got just a little bit of water in the house, but the garage took on most of the water." Nelson further testified that she did not know how much water entered the Rohrses' house during Hurricane Harvey, but she knew that it was "a lot more than the Memorial Day Flood."
Jon Christopher Laster testified that he owns the Spa Doctor Services of Houston. Laster testified that after the Memorial Day Flood, he performed work on the jacuzzi bathtub located in the Hartzes' master bedroom. Laster explained that when he worked on the bathtub on June 24, 2016, he pulled off the cultured marble panels and it was "very clean down below[, ]" and he did not observe any organic growth. According to Laster, three feet of drywall had been removed and the area had been treated, and Laster gave advice about cleaning the area underneath the bathtub with bleach to prevent mold. Laster testified that the house felt crisp and clean, and Laster did not have any personal knowledge about how much water entered the house.
The Hartzes sought attorney's fees as prevailing parties under the contract and the DTPA, and their attorney, John Paul Hopkins, testified that the Hartzes had incurred $43,500 in attorney's fees in connection with defending the lawsuit. After Hopkins testified, the Rohrses moved for a directed verdict on the Hartzes' counterclaim for attorney's fees under the contract, and the trial court denied the motion for directed verdict on the counterclaim. The Hartzes moved for a directed verdict on the Rohrses' breach of contract claim, which the trial court granted. The trial court denied the Hartzes' motion for directed verdict on the Rohrses' claims for statutory fraud and mental anguish.
The jury returned a verdict finding that that Hartzes did not engage in any false, misleading, or deceptive act or practice that the Rohrses relied on to their detriment and that was a producing cause of the Rohrses' damages; engage in any unconscionable action or course of action that was a producing cause of the Rohrses' damages; or commit fraud or statutory fraud against the Rohrses. The jury also found that the Hartzes were not unjustly enriched from the sale of the property to the Rohrses. The jury awarded the Hartzes $46,000 in attorney's fees. The trial court rendered a final judgment ordering that the Rohrses take nothing on their claims against the Hartzes and that the Hartzes recover $46,000 in attorney's fees from Joyce. The record shows that the Rohrses filed a motion for judgment notwithstanding the verdict and motion to disregard certain jury findings as well as a motion for new trial, and the trial court denied the motions. The Rohrses also filed a bill of exceptions concerning the excluded testimony of a rebuttal witness.
ANALYSIS
In issues one and two, the Rohrses complain that the trial court erred by granting the Hartzes' motion for a directed verdict on Joyce's claims for breach of contract and fraud by nondisclosure. The Rohrses argue that the evidence showed that the Seller's Disclosure Notice was false, and Joyce would not have purchased the property had she known that the Hartzes had misled her prior to the purchase. According to the Rohrses, the Hartzes had a duty to disclose the truth about the property's flooding history and completed repairs, but the Hartzes hid facts from Joyce, leading Joyce to buy the property based on their partial disclosure.
We review a trial court's ruling on a directed verdict under a legal sufficiency standard. City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005). In reviewing a trial court's granting of a directed verdict, we must determine whether there is more than a scintilla of evidence to raise a fact issue on each element of the plaintiff's claim. Coastal Transp. Co., Inc. v. Crown Cent. Petroleum Corp., 136 S.W.3d 227, 233 (Tex. 2004). We consider all the evidence in the light most favorable to the non-movant, and if the evidence supporting a finding on each element rises to a level that would enable reasonable and fair-minded people to differ in their conclusions, it constitutes more than a scintilla of evidence and the case must be reversed and remanded for a jury determination. Id. at 234. In other words, when a plaintiff fails to present evidence in support of a fact essential to his right to recover or a defense against the plaintiff's cause of action is conclusively proved or admitted, a directed verdict for the defendant is proper. Villegas v. Griffin Indus., 975 S.W.2d 745, 749 (Tex. App.-Corpus Christi 1998, pet. denied).
"Both direct and circumstantial evidence may be used to establish any material fact." Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004). A fact is established by circumstantial evidence when it can be fairly and reasonably inferred from other facts that are proved in the case. Russell v. Russell, 865 S.W.2d 929, 933 (Tex. 1993). To withstand a legal sufficiency challenge, any circumstantial evidence must consist of more than a scintilla. Blount v. Bordens, Inc., 910 S.W.2d 931, 933 (Tex. 1995). Since Joyce's breach of contract and fraud by nondisclosure claims are dependent upon the alleged fraud associated with the Seller's Disclosure Notice, we will first address the fraud issue.
FRAUD BY NONDISCLOSURE
"[A] seller of real estate is under a duty of disclosing material facts which would not be discoverable by the exercise of ordinary care and diligence on the part of the purchaser, or which a reasonable investigation and inquiry would not uncover." Smith v. Nat'l Resort Cmties., Inc., 585 S.W.2d 655, 658 (Tex. 1979); see Royce Homes, L.P. v. Dyck, No. 09-06-034-CV, 2006 WL 3094323, at *6 (Tex. App.-Beaumont Nov. 2, 2006, no pet.) (mem. op.). A seller has no duty to disclose facts that he does not know and is not liable for failing to disclose "what he only should have known." Prudential Ins. Co. of Am. v. Jefferson Assocs., Ltd., 896 S.W.2d 156, 162 (Tex. 1995). Section 5.008(a) of the Texas Property Code requires a seller of residential real property to give the purchaser a written notice that "contains, at a minimum, all of the items in the notice prescribed by [that] section." Tex. Prop. Code Ann. § 5.008(a). The Seller's Disclosure Notice of Property Condition form must include a statement in capital letters that the notice "is a disclosure of seller's knowledge of the condition of the property as of the date signed by seller and is not a substitute for any inspections or warranties the purchaser may wish to obtain." Id. § 5.008(b). The notice "shall be completed to the best of seller's belief and knowledge as of the date the notice is completed and signed by the seller." Id. § 5.008(d).
The elements of fraud by nondisclosure are: (1) the defendant failed to disclose facts to the plaintiff, (2) the defendant had a duty to disclose those facts, (3) the facts were material, (4) the defendant knew the plaintiff was ignorant of the facts and did not have an equal opportunity to discover the facts, (5) the defendant was deliberately silent when he had a duty to speak, (6) by failing to disclose the facts, the defendant intended to induce the plaintiff to take some action or refrain from acting, (7) the plaintiff relied on the defendant's nondisclosure, and (8) the plaintiff suffered injury as a result of acting without knowledge. Horizon Shipbuilding, Inc. v. BLyn II Holding, LLC, 324 S.W.3d 840, 850 (Tex. App.-Houston [14th Dist.] 2010, no pet.). The Rohrses contend that the Hartzes breached their duty to Joyce by conveying a false impression and making a partial disclosure and by failing to disclose the whole truth about the property's flooding history and completed repairs. See Holland v. Thompson, 338 S.W.3d 586, 598 (Tex. App.-El Paso 2010, pet. denied). According to the Rohrses, the Hartzes' representations in the Seller's Disclosure Notice were actionable statements of fact and not pure expressions of opinion. See Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 337-38 (Tex. 2011).
The record shows that the Hartzes completed the Seller's Disclosure Notice, which states that "[t]his form complies with and contains additional disclosures which exceed the minimum disclosures required by the Code." The Hartzes disclosed that they had flood insurance coverage and the property had previously flooded, and they explained that the property was in a 500-year flood zone and had flooded on Memorial Day 2016. The Hartzes further disclosed that they had filed a flood insurance claim due to the flood and that one inch of water was in the house for one hour, no water line was found, and the house was "[r]epaired[;] [h]ave pictures." The Hartzes also disclosed that they were not aware of any wood rot or other water penetration. The Hartzes provided an additional Supplemental Seller's Disclosure, in which they disclosed that they had filed an insurance claim for water penetration during the 2016 flood, and they had never been informed that there was visible mold anywhere on the property. The Hartzes further disclosed that they did not know of any improper drainage on the property or have any prior inspection reports concerning the property.
Maureen testified that she and George filled out the Seller's Disclosure Notice, and that based on what she observed and on what she was told, she believes that her representations were correct. George testified that the information in the disclosure was their "best guestimate[, ]" and that he was satisfied with the condition of the house after the repairs. George explained that he received insurance money to repair the house and that he used the money to pay contractors and replace things, and since he could not find reliable contractors, he and Maureen had to do a lot of the work themselves. George further testified that he never conducted any moisture or mold testing in the house, and that during the renovation, he never saw any substance that he believed to be mold. The Hartzes did not have a duty to disclose facts that they were unaware of, and the record does not show that the Hartzes were aware of any mold in the house at the time of the sale. See Prudential, 896 S.W.2d at 162. The Hartzes also did not have a duty to investigate the presence of mold or to disclose any general concerns they may have had about mold. See generally id.
Although the Rohrses argue that the Hartzes were required to make additional disclosures regarding the details of the repairs that were completed and the flooding history of the neighborhood, nothing in the text of section 5.008 imposes liability on a seller for failing to exceed section 5.008's disclosure requirements. See Tex. Prop. Code Ann. § 5.008; Aflalo v. Harris, 583 S.W.3d 236, 247 (Tex. App.-Dallas 2018, pet. denied). The Hartzes also did not have a duty to describe the details of the remediation work or of any potential mold. See Jones v. Zearfoss, 456 S.W.3d 618, 627 (Tex. App.-San Antonio 2015, no pet.). The Hartzes' disclosure that repairs had been made gave the Rohrses sufficient notice that water damage was remediated. See id. at 626. After the Hartzes met their duty of disclosure, the Rohrses could have exercised due diligence to obtain additional information regarding the extent of the water penetration and remediation before buying the house. See id. The only way to determine whether mold was present in the house was to conduct a mold inspection, which the Rohrses chose not to do, and the record does not show that the Hartzes interfered with the Rohrses' ability to inspect the home further. The record also shows that the Rohrses did not attempt to view the photos offered by the Hartzes. The Hartzes had no duty to disclose facts that the Rohrses could have discovered during a reasonable investigation, and since the Rohrses failed to show that a reasonable investigation would not have disclosed the remediation repairs, the Rohrses failed to prove that the Hartzes had a duty to more specifically disclose the repairs. See Smith, 585 S.W.2d at 658; Dyck, 2006 WL 3094323, at *6-7.
The Rohrses failed to present more than a scintilla of evidence to support their contention that the testimony of Laster, Seidel, and Nelson shows that the Hartzes' representations were false, because none of those witnesses testified that the information that the Hartzes provided in the Seller's Disclosure Notice was untrue. Additionally, Goff testified that it is common to drill holes in the boards underneath the cabinets to allow them to ventilate and dry out, and he observed the exposed holes when he was at the house. More importantly, Goff did the drywall work on the Hartzes' home in July of 2016, and he did not smell any mold or see any organic growth at that time. Likewise, Dugue testified that he did not drill the holes in the cabinet boards, but it was not unusual to put veneer over boards with drilled holes. More importantly, Dugue performed his trim work approximately two and a half months after the Memorial Day flood and he did not see any organic growth on the boards when he installed the veneer. Also, Laster testified that when he worked on the bathtub on June 24, 2016, he pulled off the cultured marble panels and it was "very clean down below[, ]" and he did not observe any organic growth.
Based on our review of the record, we conclude that the Hartzes provided the Rohrses with a completed Seller's Disclosure Notice, which was completed to the best of their knowledge, and which complies with the minimum disclosures required by section 5.008(b) of the Property Code. See Tex. Prop. Code Ann. § 5.008(b), (d). Since the Hartzes did not have a duty to disclose facts that they were unaware of, investigate the presence of mold, disclose any general concerns about mold potential, or describe the details of the remediation work, we further conclude that the Rohrses failed to present more than a scintilla of evidence to support their contention that the Hartzes breached their duty to disclose material facts. Without such evidence, there is not more than a scintilla of evidence to raise a fact issue as to fraud by nondisclosure. See Coastal Transp. Co., 136 S.W.3d at 233-34; Horizon Shipbuilding, 324 S.W.3d at 850. Accordingly, the trial court properly granted the Hartzes' motion for directed verdict on the Rohrses' claim for fraud by nondisclosure. See Villegas, 975 S.W.2d at 749. We overrule issue two.
BREACH OF CONTRACT
The Rohrses also complain that the trial court erred by granting the Hartzes' motion for directed verdict on Joyce's claim for breach of contract. The elements of breach of contract are: (1) the existence of a valid contract, (2) the plaintiff's performance or tendered performance, (3) the defendant's breach of the contract, and (4) damages resulting from the breach. Trahan v. Fire Ins. Exchange, 179 S.W.3d 669, 674 (Tex. App.-Beaumont 2005, no pet.). Failure to present evidence in support of one of these elements is fatal to the Rohrses' complaint. See Villegas, 975 S.W.2d at 749. Having already overruled the fraud by nondisclosure claim and having determined that the Hartzes completed a Seller's Disclosure Notice that complies with the minimum disclosures required by section 5.008(b), we conclude that the Rohrses failed to present more than a scintilla of evidence to show that the Hartzes breached the contract by failing to disclose the truth about the property's flooding history and completed repairs. See Coastal Transp. Co., 136 S.W.3d at 233-34; Villegas, 975 S.W.2d at 749.
Additionally, we conclude that the record shows that the contract is valid, Joyce agreed to accept the property "As Is[, ]" and she had the option to terminate the contract for any reason within seven days of receiving the Seller's Disclosure Notice. The contract defined "As Is" to mean 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." The contract states that "[i]f any representation of Seller in this contract is untrue on the Closing Date, Seller will be in default." The contract also provided Joyce with access to have the property inspected, and the record shows that Jeremy obtained an independent inspection.
An "As Is" clause is not valid and enforceable if it "is a product of fraudulent representation or fraudulent concealment by the seller or the seller obstructs the buyer's ability to inspect the property." Juda v. Marinemax, Inc., No. 01-08-00138-CV, 2018 WL 6693586 at *5 (Tex. App.- Houston [1st Dist.] Dec. 20, 2018, no pet.) (mem. op.) (citing Prudential, 896 S.W.2d at 162; Bynum v. Prudential Residential Servs., 129 S.W.3d 781, 788-89 (Tex. App.-Houston [1st Dist.] 2004, pet. denied)). However, none of the Rohrses' arguments can negate Joyce's agreement to buy the house "as is" in its present condition with any and all defects, because the Rohrses have failed to show that the Hartzes induced them into buying the house by making fraudulent representations, by concealing information, or by engaging in conduct that impaired the Rohrses' ability to inspect the house. See Prudential, 896 S.W.2d at 162; see also Warehouse Assocs. Corp. Ctr. II, Inc. v. Celotex Corp., 192 S.W.3d 225, 230-31 (Tex. App.-Houston [14th Dist.] 2006, pet. denied). By purchasing the home "as is," Joyce agreed to make her own appraisal of the bargain and to accept the risk as to the quality of the house and any resulting loss. See Prudential, 896 S.W.2d at 161; Mid Continent Aircraft Corp. v. Curry Cty. Spraying Serv., Inc., 572 S.W.2d 308, 313 (Tex. 1978).
We conclude that the Rohrses failed to present more than a scintilla of evidence to raise a fact issue as to breach of contract. Accordingly, the trial court properly granted the Hartzes' motion for directed verdict on Joyce's breach of contract claim. See Villegas, 975 S.W.2d at 749. We overrule issue one.
NEGLIGENCE
In issue three, the Rohrses argue that the trial court abused its discretion by failing to submit a negligence question to the jury. The Rohrses argue that the evidence at trial supported a negligence question, because the evidence established that the Hartzes had a duty to fully disclose the property's history and condition, which included the completed repairs. However, we have already concluded that the Rohrses failed to present more than a scintilla of evidence to raise a fact issue as to fraud by nondisclosure or breach of contract; and therefore, there is an enforceable valid contract with a valid "As Is" clause.
The Texas Supreme Court has held that, generally, an "as is" clause will defeat the element of causation in DTPA, fraud, and negligence claims. See Prudential, 896 S.W.2d at 161. When an agreement to purchase something "as is" is executed, a buyer agrees to make his own appraisal of the bargain and accept the risk that he may be wrong. Id. "The seller gives no assurances, express or implied, concerning the value or condition of the thing sold[, ]" and the buyer chooses to rely completely on his own determination of the condition and value of the purchase, removing the possibility that the seller's conduct will cause him damage. Id.
"The acts of a party may breach duties in tort or contract alone or simultaneously in both." Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 618 (Tex. 1986). Courts consider the nature of the injury to determine which duties are breached. See id. "When the only loss or damage is to the subject matter of contract, the plaintiff's action is ordinarily on the contract." Sw. Bell Tel. Co. v. DeLanney, 809 S.W.2d 493, 494 (Tex. 1991). The key to determining whether a duty is contractual or common law is to look to the origin of the duty and the nature of the alleged damages. See Formosa Plastics Corp. USA v. Presidio Eng'rs & Contractors, Inc., 960 S.W.2d 41, 45 (Tex. 1998); Crawford v. Ace Sign, Inc., 917 S.W.2d 12, 13 (Tex. 1996); DeLanney, 809 S.W.2d at 494. Using that evaluation, a party may not bring a tort claim when the loss is the subject matter of a contract; when the only loss or damages is to the subject matter of the contract, the plaintiff's action is ordinarily exclusively on the contract. Formosa Plastics, 960 S.W.2d at 45; DeLanney, 809 S.W.2d at 494. Indeed, "under the economic loss rule, a duty in tort does not lie when the only injury claimed is one for economic damages recoverable under a breach of contract claim." Sterling Chems., Inc. v. Texaco Inc., 259 S.W.3d 793, 796 (Tex. App.-Houston [1st Dist.] 2007, pet. denied).
Additionally, we agree with the Hartzes that the Rohrses' negligence claim is precluded by the economic loss rule. In general, the economic loss rule exists to bar a party from seeking tort damages where damages exist as a breach of a duty created under contract, as opposed to a duty that is imposed by law. Chapman Custom Homes, Inc. v. Dallas Plumbing Co., 445 S.W.3d 716, 718 (Tex. 2014). The Rohrses have not shown that the Hartzes breached a duty imposed by law that is independent of the contract, and they have not shown that the alleged harm is not merely the economic loss of a contractual benefit. See id. Accordingly, we conclude that the trial court did not abuse its discretion by failing to submit a negligence question to the jury. We overrule issue three.
MOLD EXPERT
In issue four, the Rohrses complain that the trial court abused its discretion by refusing to allow Martinez to testify as a mold expert. According to the Rohrses, Martinez was qualified to testify as an expert. The record shows that the trial court found that Martinez was not qualified to testify as a mold expert, because his opinion relies on a lab analysis that he does not have the qualifications to interpret and because he does not have the expertise to determine the age of mold. The trial court explained that Martinez's experience cannot be his methodology, and Martinez's training only includes data collection and not mold testing.
A trial court functions as a gatekeeper in deciding whether to admit or exclude expert opinion testimony. In re Commitment of Gollihar, 224 S.W.3d 843, 853 (Tex. App.-Beaumont 2007, no pet.) (citing Harvey Brown, Procedural Issues Under Daubert, 36 Hous. L. Rev. 133, 1158-59 (1999)). The determination of whether a witness is qualified to testify as an expert is within the trial court's discretion. See Broders v. Heise, 924 S.W.2d 148, 151 (Tex. 1996). Absent an abuse of discretion, an appellate court will not disturb a trial court's ruling on reliability unless the record shows that the court acted without reference to guiding rules or principles. E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 558 (1995). An appellate court reviews a trial court's decision to admit or exclude expert testimony for an abuse of discretion. Gammill v. Jack Williams Chevrolet, Inc., 972 S.W.2d 713, 727 (Tex. 1998); see Robinson, 923 S.W.2d at 558.
Under Rule 702 of the Texas Rules of Evidence, the party seeking to admit expert testimony must establish that (1) the expert is qualified to render an opinion on the subject matter and (2) the testimony is relevant to an issue in the case. Tex. R. Evid. 702; TXI Transp. Co. v. Hughes, 306 S.W.3d 230, 234 (Tex. 2010). Expert testimony must rely on sufficient data and proper methodology. Volkswagen of Am., Inc. v. Ramirez, 159 S.W.3d 897, 905-06 (Tex. 2004); Kerr-McGee Corp. v. Helton, 133 S.W.3d 245, 257 (Tex. 2004). "An expert's bare opinion will not suffice." Ramirez, 159 S.W.3d at 906. "When the expert's underlying scientific technique or principle is unreliable, the expert's opinion is no more than subjective belief or unsupported speculation and is inadmissible." Wiggs v. All Saints Health Sys., 124 S.W.3d 407, 410 (Tex. App.-Fort Worth 2003, pet. denied).
The record shows that during voir dire, Martinez was unable to explain any specific training or education that would qualify him to give an opinion about the mold's age or growth. According to Martinez, he received training about how to collect and identify mold and about mold growth, but he did not receive any specialized training concerning the cellular makeup of mold or mold testing. Martinez explained that he is not a microbiologist and does not perform any mold analysis, and that he relies on the lab's testing and interpretation of the bulk samples he collects to determine the age of the mold. However, Martinez testified that that "there's no test that I'm aware of that tells you whether mold is ten days, 100 days, or 30 years old[, ]" and when asked if the lab determines how old the mold is, Martinez explained that "[n]obody can say that."
We conclude that the Rohrses failed to demonstrate that Martinez had any specialized knowledge regarding mold testing or any expertise to determine the age of mold. See Tex. R. Evid. 702; Hughes, 306 S.W.3d at 234. We further conclude that the trial court did not abuse its discretion by determining that Martinez was not qualified to testify as a mold expert and render an opinion concerning the age of the mold. See Gammill, 972 S.W.2d at 727; Broders, 924 S.W.2d at 151; Robinson, 923 S.W.2d at 558. We overrule issue four.
Having overruled each of the Rohrses' issues, we affirm the trial court's judgment.
AFFIRMED.