First American Title Co. of El Paso v. Prata

• Decision Date: 27 December 1989
• Docket Number: No. 08-88-00235-CV,08-88-00235-CV
• Parties: FIRST AMERICAN TITLE COMPANY OF EL PASO and Coronado State Bank, Appellants, v. Sylvia V. PRATA, Appellee.
• Court: Texas Court of Appeals

Page 697

783 S.W.2d 697

FIRST AMERICAN TITLE COMPANY OF EL PASO and Coronado State Bank, Appellants, v. Sylvia V. PRATA, Appellee.

No. 08-88-00235-CV.

Court of Appeals of Texas,

El Paso.

Dec. 27, 1989.

Rehearing Overruled Jan. 24, 1990.

Steven L. Hughes, Grambling & Mounce, James T. McNutt, James R. Dennis, Scott, Hulse, Marshall, Feuille, Finger and Thurmond, El Paso, Larry E. Meyer, Meyer & Cribbs, P.C., Houston, for appellants.

Gordon Stewart, Schwartz, Earp, McClure, Cohen & Stewart, El Paso, for appellee.

Before OSBORN, C.J., and FULLER and WOODARD, JJ.

OPINION

OSBORN, Chief Justice.

This suit was filed by the owner of a house who lost a possible sale when the prospective buyer learned of pending condemnation proceedings which had been filed prior to the owner's purchase of the property from the Bank. The owner sued the Bank for damages under the Deceptive Trade Practices Act and the company which issued the title policy under the Texas Insurance Code. Based upon a favorable jury verdict, judgment was entered for the owner of the house. We reverse and remand the judgment against the Title Company and reverse and render judgment for the Bank.

On February 7, 1984, Coronado State Bank purchased a house which had been owned by Sylvia Prata's mother and stepfather at a sheriff's sale. The day before the foreclosure sale, El Paso Community College had filed a condemnation statement to obtain the same property. No lis pendens notice was filed and notice of the proceedings was not served upon the owner. Without any notice of the condemnation proceedings, the Bank sold the house to Sylvia Prata for $56,000.00 on May 18, 1984, and conveyed title to her by a special warranty deed. The closing was handled by First American Title Company of El Paso which issued a title commitment and a title insurance policy. The title commitment made no reference to condemnation proceedings, but the title insurance policy had an exclusion as to condemnation proceedings. The College did not serve anyone as owner of the property until Sylvia Prata was served on May 21, 1987, more than three years after the condemnation statement had been filed.

Sylvia Prata testified that the attorney for the Bank represented to her that she would receive "free and clear title" or "clear title" to the house. She said, at the closing, representatives of the Title Company represented that she was getting free and clear title to the property.

In November 1984, Prata entered into a contract to sell the house to Tito Gonzalez, a realtor who was acting as trustee for William Abraham, for $250,000.00. That contract had a proviso that it was "subject to inspection and approval of property within 20 working days." The property was never inspected for any type of approval and no sale was consummated because of the pending condemnation proceedings.

In answer to questions submitted, the jury found: (1) that the Title Company engaged in a false, misleading or deceptive act or practice or made misrepresentations in connection with the purchase of the property or in the issuance of the title policy on the property, (2) that such conduct was a producing cause of damages to Prata, (3) that the Title Company and Prata entered into an agreement based upon the title commitment instrument, (4) that the Title Company breached that agreement, (4A) that such breach was a proximate cause of damages to Prata, (5) that Prata sustained damages of $39,000.00 for loss of a sale, $5,850.00 for loss of rental value, $2,000.00 for loss of credit reputation in the past, $9,500.00 attorney's fees in the condemnation proceeding, $2,000.00 for travel expenses and that $39,000.00 was the difference in the value of the property as received and the value it would have had if it had been as represented, $2,000.00 for inconvenience, $1,000.00 for physical pain in the past and $2,500.00 for mental anguish in the past.

With regard to the Bank, the jury found: (6) that the Bank engaged in a false, misleading or deceptive act or practice in the sale of the house, (7) that such conduct was a producing cause of any damages of Prata, (8) damages identical to those found as to the Title Company except they increased the attorney's fees for condemnation proceeding to $9,713.75, and (9) failed to find that the Bank knowingly committed the false, misleading acts or practices. The jury found Prata's reasonable attorney's fees for trial to be $19,213.75, with additional attorney's fees of $16,750.00 depending on appellate proceedings. They failed to find Prata's suit against the Bank and against the Title Company was groundless and brought in bad faith or for harassment.

Under the statute then in effect, the court trebled the damages against the Title Company and with prejudgment interest awarded a recovery of $192,685.63, and awarded a recovery of $79,735.63 against the Bank. In addition, the judgment awarded attorney's fees as found by the jury, plus interest and costs.

Initially, a contention is made that the trial court lacked subject matter jurisdiction and that it erred in overruling a plea in abatement. The argument presented is that there was no justiciable issue ripe for adjudication because all issues were contingent upon the condemnation case which had not been decided at the time this case was tried. The assertion is made that only an advisory judgment could be entered prior to disposition of the exercise of any right of condemnation. Appellants rely upon City of Garland v. Louton, 691 S.W.2d 603 (Tex.1985) and California Products, Inc. v. Puretex Lemon Juice, Inc., 160 Tex. 586, 334 S.W.2d 780 (1960). To be an advisory decision, the judicial determination must be based upon some hypothetical or contingent situation. Freeport Operators, Inc. v. Home Insurance Company, 666 S.W.2d 566 (Tex.App.--Houston [14th Dist.] 1984, no writ). The facts in this case were established at the time of trial and the pleadings were based upon prior conduct involving these parties and a third party condemnor. Whether the condemnation case proceeded to its final disposition would not affect the claims asserted in this case since the condemnor had not been joined as a party defendant. The Bank's Points of Error Nos. One and Two and the Title Company's Point of Error No. Fifteen are all overruled.

Turning to the merits of the case, the controlling issue is not whether the Title Company or the Bank committed the acts found by the jury, but whether such conduct was a producing cause of the damages found by the jury. For the sake of discussion only, we assume that both Appellants committed the various acts found by the jury. With that assumption, did the Title Company's acts or misrepresentations in connection with the purchase of the property by Sylvia Prata or the issuance of the title insurance policy produce damages to her, all of which arose out of her failure to sell such property to William Abraham?

The Title Company asserts, in its third point of error, that there was no evidence or insufficient evidence to support the jury finding of causation. The argument is made that the filing of the condemnation suit was the only producing cause of any damages sustained by Sylvia Prata. The Title Company argues that even assuming that there was a misrepresentation about the title at the time of the loan closing, the title which Prata received had absolutely nothing to do with her failure to complete the sale to William Abraham. We agree and note that the contention in this point of error perhaps should have been directed to the jury's answer to question number two as well as number five particularly since the reference to the motion for new trial relates to the answer to issue two as well as five. In any event, it is the contentions under the points and not the points themselves which are controlling. O'Neil v. Mack Trucks, Inc., 542 S.W.2d 112 (Tex.1976).

The testimony with regard to the question of causation is set out verbatim from those persons who were involved in the sale. First, Sylvia Prata, the owner and prospective vendor, testified as follows:

Q (BY MR. STEWART) Did you actually, yourself, attend at some point in December, any kind of meeting concerning this property?

A Yes; I did.

. . . . .

Q And what was your understanding of that meeting?

. . . . .

THE WITNESS: They showed us the condemnation paper and said that the house had been condemned and I had to tell Mr. Gonzalez and I lost the sale.

Q (BY MR. STEWART) Did you--were you aware of any other reason the sale was lost?

A Because of the condemnation.

Q Were you aware of any other reason?

A No.

Next, Mr. William Abraham, the prospective purchaser, testified as follows:

Q Okay. Did those problems have anything to do with the house or solely to do with this proceeding that came to your attention?

A Well, to be honest with you I didn't. I don't think we ever got to the--to the inspection and approval stage. I think that shortly after submittal it had come to our attention or come not to my attention but to Mr. Gonzalez' attention in that there was some problem as far as condemnation that was down the road.

Q Were you interested in buying a property or was this condemnation proceeding it?

A No, sir.

Finally, Tito Gonzalez, the realtor who represented Mr. Abraham and had signed the purchase agreement in his capacity as trustee testified as follows:

Q And what happened with the contract?

A Well, the contract--one thing that I asked Sylvia was to make sure it wasn't, you know, being condemned and she made sure and found out the opposite. It was being condemned. So that killed the contract.

There is no evidence the sale was not completed because Sylvia Prata had a defective title to the property, or her title insurance policy was not as represented to her or that she could not deliver clear title to the property. The only reason the sale fell through was because a condemnation suit had been filed, a matter totally...