Elbar Investments, Inc. v. Williamson & Sears, L.L.P., Jimmy Williamson, Waters & Waters, and King Waters

Opinion issued June 10, 2004









     

In The

Court of Appeals

For The

First District of Texas





NO. 01-03-00278-CV





ELBAR INVESTMENTS, INC., Appellant


V.


WILLIAMSON & SEARS, L.L.P., JIMMY WILLIAMSON, WATERS & WATERS, AND KING WATERS, Appellees





On Appeal from the 334th District Court

Harris County, Texas

Trial Court Cause No. 2001-49536A





MEMORANDUM OPINION


          This is an appeal of summary judgments rendered for third-party defendants/appellees Williamson & Sears, L.L.P., Jimmy Williamson, Waters & Waters, and King Waters against appellant, Elbar Investments, Inc. In its sole issue, Elbar contends that the trial court misapplied the law and erred in rendering the summary judgments. We affirm.

Factual & Procedural Background

          Kokee Woods Apartments, Inc., represented by Jimmy Williamson of Williamson & Sears, L.L.P., obtained a multi-million dollar judgment against McDill Columbus Corporation and a writ of execution against the judgment. Pursuant to the writ, Kokee Woods sought a constable’s sale of 11 properties allegedly owned by McDill. The sale was rescheduled several times, but eventually took place on January 4, 2000. About a month earlier, Williamson had received a letter from McDill’s attorney, who informed him that several of the properties to be posted for sale had actually been conveyed in previous years to various owners and attached copies of the deeds to these identified properties.

          Sheila Mylar was one of those owners and was living at 13422 Chimney Sweep in Houston, Texas. Williamson did nothing in response to the letter, and the sale of all 11 properties moved forward as planned. Elbar bid on several of the properties, as did First Capital, another company present at the sale. After the sale was completed, Elbar and First Capital exchanged several properties and notified the constable, who made out the deeds as requested.

          One of the properties Elbar acquired in the swap was Mylar’s. After Elbar unsuccessfully attempted to evict Mylar, she sued Elbar. Elbar then filed a third-party action against the attorneys who represented the judgment creditors. Williamson and Waters each moved for traditional summary judgment on behalf of their firms as well as themselves. The trial court granted both motions and severed the cause, making the summary judgments final for purposes of appeal.

Summary Judgments

          In its sole issue, Elbar contends the trial court erred in rendering summary judgments for Waters and Williamson and their respective law firms because it misapplied the law to the facts.

          Standard of Review

          The standard of review in an appeal from a traditional summary judgment requires a defendant who moved for a summary judgment on the plaintiff’s causes of action (1) to show there is no genuine issue of material fact as to at least one element of each of the plaintiff's causes of action or (2) to establish each element of the defendant’s affirmative defense. Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 1995). If there is no genuine issue of material fact, judgment should issue as a matter of law. Haase v. Glazner, 62 S.W.3d 795, 797 (Tex. 2001). All evidence favorable to the nonmovant is taken as true, and we make all reasonable inferences in the nonmovant’s favor. Id. Here, there are no disputed fact issues; rather, Elbar contends the trial court erred by misapplying the law.

          DTPA Causes of Action

          In his pleadings, Elbar alleged violations of the Deceptive Trade Practices Act (DTPA). See Tex. Bus. & Com. Code Ann. §§ 17.46(b)(14), (24) (Vernon Supp. 2004) (misrepresenting an agent’s authority to consummate a sale; failing to disclose material information with the intent to induce a party into a transaction into which he would not have entered had he known the information). To prevail under the DTPA, a plaintiff must show that (1) the plaintiff was a consumer; (2) the defendant committed, among other things, a “laundry-list” violation under section 17.46(b) on which the plaintiff detrimentally relied or any unconscionable action or course of action; and (3) the wrongful act was a producing cause of the plaintiff’s damages. See Tex. Bus. & Com. Code Ann. § 17.50(a) (Vernon 2002). The crux of Elbar’s argument regarding the nondisclosure is that, had it known Mylar held a deed to the Chimney Sweep property, it would not have bought this property at the constable’s sale.

          In his motion for summary judgment, Williamson contended there was only one representation made—the notice of the constable’s sale—and that this notice did not guarantee title. Williamson also contended he had no duty to disclose any information to the potential buyers and, even if he had, there was no causal connection between the information not disclosed and Elbar’s injury. In his motion for summary judgment, Waters simply argued that neither he nor his firm requested that the properties be posted for sale—Royce Marek, Kokee Woods’ agent, requested it. Waters also contended that he and his firm were exempt from liability under DTPA because they only rendered professional services. See Tex. Bus. & Com. Code Ann. § 14.49(c) (Vernon Supp. 2004) (exempting professional services).

          The record reflects that Waters is correct in his assertions that neither he nor his firm ordered the sale. In fact, neither law firm directed the constable to hold the sale; rather, Kokee Woods’ agent Royce Marek was responsible. The real issue here, however, is not who was directly responsible for the sale’s being conducted. The real issue is whether the judgment creditors or their attorneys had a duty to disclose information regarding the existence of other claims to the property being offered for sale. Because we conclude there was no such duty, we find no error in the trial court’s rendition of summary judgment.

          A constable’s deed is a quitclaim deed. Diversified, Inc. v. Hall, 23 S.W.3d 403, 407 (Tex. App.—Houston [1st Dist.] 2000, pet. denied). A quitclaim deed conveys any interest of the grantor, but does not profess that title is valid; nor does it include any warrant or covenant of title. Id. Because the deed here passed only the interest McDill had in the property, Elbar received only that interest—nothing more than a chance at title. See id. Moreover, the grantee of a quitclaim deed takes with notice of all defects in the grantor’s title. Id. Thus, the nature of a constable’s sale itself places a purchaser on notice that there may be competing claims to title. In such circumstances, further disclosure is not necessary.

          In Apex Financial Corporation v. Garza, a case with facts very similar to those before us, Verizon obtained a money judgment against LaCrosse in a lawsuit, had a writ of execution issued, and conducted a sheriff’s sale of LaCrosse’s properties to satisfy the judgment. See No. 05-03-00872-CV, 2004 WL 95203 *1 (Tex. App.—Dallas Jan. 21, 2004, pet. filed). Apex was the highest bidder at the sale and received a sheriff’s deed to the property. Id. LaCrosse, however, had already signed a quitclaim deed to Garza on the property three years earlier. Id. After Garza sued Apex to retain possession, Apex filed a third-party action against Verizon. Id. It was later determined that LaCrosse had no title to convey, because the sale conveyed only the right, title, and interest LaCrosse had and did not contain a warranty or covenant of title. Id. In holding that the sheriff’s deed was not rendered void because LaCrosse no longer had title to the property, the court noted that the buyer of a property is charged with constructive notice of all claims of a party who is in possession of the property. Id. at *2, *4. A buyer has the duty to ascertain the rights of a third-party possessor when possession is visible and open. Id. at *2. Just as Apex had constructive notice that Garza was operating a garage on the premises of the property it purchased at the sheriff’s sale, Elbar had constructive notice that Mylar was living in the property on Chimney Sweep.

          Because the buyer, not the judgment creditor or its attorneys, bears the burden of discovering other claims to the property it purchases at a constable’s sale, we hold that Waters, Williamson, and their respective firms had no duty of disclosure. Accordingly, Elbar cannot satisfy the elements necessary to recover under their DTPA causes of action. We further hold that the trial court did not err in rendering the summary judgments and severing the cause.

          We overrule Elbar’s sole issue.

          We affirm the judgment of the trial court.

 


                                                                        Evelyn V. Keyes

                                                                        Justice

 

Panel consists of Justices Nuchia, Jennings, and Keyes.