Bel-Go Associates-Mula Road v. Vitale

• Decision Date: 20 November 1986
• Docket Number: ASSOCIATES-MULA,No. 01-85-0407-CV,BEL-GO,01-85-0407-CV
• Citation: 723 S.W.2d 182
• Parties: ROAD, Appellant, v. Elizabeth VITALE, Victor A. Mercatante, Dominica Mamie Mercatante, and Leonard Scarcella, Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 182

723 S.W.2d 182

BEL-GO ASSOCIATES-MULA ROAD, Appellant, v. Elizabeth VITALE, Victor A. Mercatante, Dominica Mamie Mercatante, and Leonard Scarcella, Appellees.

No. 01-85-0407-CV.

Court of Appeals of Texas Houston (1st Dist.).

Nov. 20, 1986.

Rehearing Denied Dec. 31, 1986.

Charles E. Fitch, Preston C. Goodwin, De Lange, Hudspeth, Pitman & Katz, Houston, for appellant.

Harvey G. Brown, Jr., Barry Abrams, Sewell & Riggs, William A. Olson, John F. Olson, Olson & Olson, Houston, for appellees.

Before LEVY, DUNN and KEITH (Retired), JJ.

OPINION

DUNN, Justice.

This is an appeal from summary judgment awarded to the appellees.

The appellant, a joint venture composed of Belcourt Construction Co. of Houston, Inc. and Sam B. Gottlieb (hereinafter referred to as "Bel-Go" or "appellants"), entered into an earnest money contract with Victor A. Mercatante, Dominica Mamie Mercatante, and Elizabeth Vitale, the mother of Dominica Mercatante and mother-in-law of Victor Mercatante (hereinafter referred to as "sellers" or "appellees"), to purchase a 10.58 acre tract of land, which fronted on State Farm to Market Road 1092, within the city limits of Stafford, Texas.

The parties first met on December 7, 1978, to review a proposed earnest money contract that had been drawn by Bel-Go's attorney. The sellers hired as their attorney Leonard Scarcella, (hereinafter referred to as "Scarcella"), one of the appellees herein and also mayor of Stafford, to review the proposed contract. Scarcella, in reviewing the proposed earnest money contract, specifically objected to two paragraphs, paragraphs 9(d) and 9(e), which are reproduced below:

9(d). Seller represents and warrants as of the date of this Agreement, and shall represent and warrant as of the closing date, that Seller has no knowledge of any matters which would, upon closing of the transaction herein contemplated, prevent Purchaser from obtaining a building permit for construction of an industrial warehouse and light manufacturing building or buildings to be constructed upon the property from all authorities from whom such permits and licenses may be necessary in order for Purchaser to commence and complete the construction contemplated by Purchaser. Such permits shall include approval of any architectural committees or other such bodies having authority to withhold approval of construction with respect to the property being conveyed hereunder.

9(e). Seller [will] provide to Purchaser within thirty (30) days from date of execution hereof evidence reasonably satisfactory to Purchaser that all utilities, including, without limitation, gas, electricity, sewer, and adequate storm sewer systems are all available to the premises.

Scarcella explained to the purchaser, Bel-Go, that virtually all property in the Stafford area had some type of problem with drainage and that "drainage matters had to be addressed in regards to any building permit." Bel-Go's attorney agreed to modify these provisions in the earnest money contract.

Further negotiations were halted due to the fact that Bel-Go had developed financial problems. On May 18, 1979, Bel-Go's attorney contacted sellers to inform them that proper financing arrangements had been made, and another proposed earnest money contract was delivered to appellees by Bel-Go. This contract modified paragraph 9(d) and eliminated paragraph 9(e). The modified paragraph 9(d) differs from the proposed paragraph in the addition of a single sentence which has been underlined in the paragraph which is reproduced below:

(d) Seller represents and warrants as of the date of this Agreement, and shall represent and warrant as of the closing date, that Seller has no knowledge of any matters which would, upon closing of the transaction herein contemplated, prevent Purchaser from obtaining a building permit for construction of an industrial warehouse and light manufacturing building or buildings to be constructed upon the property from all authorities from whom such permits and licenses may be necessary in order for Purchaser to commence and complete the construction contemplated by Purchaser. Such permits shall include approval of any architectural committees or other such bodies having authority to withhold approval of construction with respect to the property being conveyed hereunder. In this respect, Seller shall cooperate with Purchaser in the submission of plans designed to obtain permits from the appropriate governmental authorities.

(Emphasis added.) An addendum to the contract added the following language to paragraph 9(d):

It is specifically recognized that Seller has furnished to Purchaser a copy of the current Land Use Subdivision Ordinance of the City of Stafford (Ordinance Number 114) as well as the latest draft (Draft 3) of the proposed land subdivision ordinance of the City of Stafford, and Seller has referred Purchaser to the Southern Standard Building Code, the National Electrical Code and to environmental regulations, and standards of appropriate state and federal agencies, and Purchaser is aware all proposed improvements may, and most probably will, be required to comply with these above referenced sources in their updated form at the time of application for subdivision plat approval and building permits.

The modified earnest money contract was signed by the parties on July 11, 1979.

Bel-Go hired Clarence Watkins, an architect who worked for Concept Consultants, Inc. ("C.C.I."), to prepare plans for the proposed development. Watkins met with Lawrence Vaccaro, the City of Stafford Building Director, to review the proposed development plans. The two men discussed the need for adequate drainage on the tract. C.C.I. hired Louis Fontenot, a civil engineer, to assist in obtaining a building permit from the City. Knowing that the tract drained onto F.M. 1092, a state street, Fontenot was familiar with the drainage regulations imposed by the Texas Highway Department. One such regulation was that only 150 feet of the property would be allowed to drain into the state street drainage ditch. However, Fontenot was also under the impression that the department routinely waived such requirements, and he assumed such a waiver would be available to Bel-Go. The sale of the property closed on December 28, 1979.

In January 1980, the appellants learned that although the City of Stafford had approved their building plans, no building permit would be issued until adequate drainage was obtained. The drainage would not be considered adequate until Texas Highway Department regulations had been met. This problem was relayed to Bel-Go by C.C.I. on January 26, 1980, in a memorandum setting out the specifics. The pertinent part of this memo is reproduced below:

PROBLEM:

* Drainage of 10.5 acre site must go to FM 1092.

* Since FM 1092 is a state owned street, it has to be approved by the State Highway Department.

* Highway Department will only allow 150' of the property to be drained.

* 10.5 acre site is approximately 946' deep.

* State decision was not to allow any project to drain to FM 1092 over 150' deep, because the drainage system running parallel to 1092 is insufficient to carry the additional load.

* The State designed 1092 to only carry rain water 150' on both sides of the street.

It must be stressed that Bel-Go had knowledge of the existence of a 150 foot drainage regulation and that Bel-Go believed this requirement would be waived by the Highway Department because it had been waived in the past. The department's change in policy concerning the enforcement of the 150' drainage regulation created Bel-Go's problem. Bel-Go claims that the defendants had knowledge that the highway department changed its policy as to the 150' drainage waiver prior to or at the time the property was sold, on December 28, 1979. Bel-Go filed suit on December 12, 1980, and in its amended petition alleged fraud and violation of the Deceptive Trade Practices Act.

The sellers and Scarcella both presented motions for summary judgment, and they were granted.

When the movant in a summary judgment is a defendant, he is entitled to prevail on a motion for summary judgment if he establishes, as a matter of law, that there exists no genuine issue of material fact as to one or more elements of plaintiff's cause of action. Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 (Tex.1970); Federated Department Stores, Inc. v. Houston Lighting & Power, 646 S.W.2d 509, 511 (Tex.App.--Houston [1st Dist.] 1982, no writ). Once the defendant has negated, as a matter of law, such elements of plaintiff's cause of action, the plaintiff has the burden of introducing evidence that raises issues of fact with respect to the elements negated by the defendant's summary judgment evidence. Federated Department Stores, Inc., 646 S.W.2d at 511. This evidence must be of probative force. Woolhouse v. Tolchin Instruments, Inc., 601 S.W.2d 106, 108 (Tex.Civ.App.--Dallas 1980, no writ) (citing Garza v. Allied Finance Co., 566 S.W.2d 57, 61 (Tex.Civ.App.--Corpus Christi 1978, no writ)).

In summary judgment proceedings, all of the evidence must be viewed in the light most favorable to the non-movant. All conflicts must be disregarded, and the evidence that tends to support the position of the non-movant is accepted as true. Montgomery v. Kennedy, 669 S.W.2d 309, 310-11 (Tex.1984); see Mostek Corp. v. Chemetron, 642 S.W.2d 20, 23 (Tex.App.--Dallas 1982, writ dism'd by agr.). Only when the proof establishes that no genuine issues of fact exist and that the movant is entitled to judgment as a matter of law should a summary judgment be granted. Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 (Tex.1970); Herndon Marine Products v. San Patricio County, 695 S.W.2d 29, 33 (Tex.App.--Corpus Christi 1985, writ pending); Tex.R.Civ.P. 166-A, sec. c.

After reviewing the summary judgment evidence, including all depositions and affidavits, in the light most favorable to the appellants, we hold that the summary...