Gibbs v. Main Bank of Houston

• Decision Date: 12 January 1984
• Docket Number: No. 01-82-0873-CV,01-82-0873-CV
• Citation: 666 S.W.2d 554
• Parties: David K. GIBBS, Appellant, v. MAIN BANK OF HOUSTON, et al., Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 554

666 S.W.2d 554

David K. GIBBS, Appellant, v. MAIN BANK OF HOUSTON, et al., Appellees.

No. 01-82-0873-CV.

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

Jan. 12, 1984.

Rehearing Denied Feb. 9, 1984.

Joe K. Longley, Austin, Alice Trevathan, Houston, for appellant.

Joe J. Reynolds, Gary J. Langford, Houston, for appellees.

Before EVANS, C.J., and BASS and DUGGAN, JJ.

OPINION

EVANS, Chief Justice.

This suit is the outgrowth of a decision rendered in Lawson v. Gibbs, 591 S.W.2d 292 (Tex.Civ.App.--Houston [14th Dist.] 1979, writ ref'd n.r.e.). In that case, the plaintiff David K. Gibbs challenged the validity of a foreclosure sale of property he had earlier purchased from Wortham Investments, Inc. The trial court entered a summary judgment in favor of Gibbs, decreeing that the foreclosure sale was invalid. However, that judgment was reversed by the Court of Civil Appeals and the cause was remanded for trial of the damage claim asserted against Gibbs by the purchaser at the foreclosure sale. The Supreme Court of Texas refused Gibbs' application for writ of error and on July 23, 1980, overruled his motion for rehearing. Gibbs v. Lawson, 23 Tex. S.Ct. Journal 526 (July 26, 1980).

On December 5, 1980, Gibbs filed a supplemental petition in the remanded suit, adding as defendants Guardian Title Company of Houston Inc., Safeco Title Insurance Company and Miles Wortham. In this petition Gibbs asserted a claim against Safeco on the title policy issued when he purchased the property; a claim against Guardian, Safeco, Miles Wortham and Wortham Investments, Inc. for fraud and/or misrepresentation and for violations of the Deceptive Trade Practices Act; and a claim against Guardian and Safeco for violations of art. 21.21, Texas Insurance Code; and rules and regulations promulgated by the State Board of Insurance. On February 12, 1982, Gibbs alleged an additional cause of action against Guardian and Safeco for negligence and gross negligence. The case was tried before a jury, and after both sides rested, the court instructed a take nothing judgment in favor of all three defendants. Gibbs brings this appeal from that judgment.

The record reflects that in August, 1975, Gibbs responded to a newspaper advertisement for the sale of a small apartment complex in Houston. He was shown the apartment units by Mr. Dan Besborn, who represented himself to be the partner of the defendant, Miles Wortham, and also as an officer in Wortham Investments, Inc., the owner of the property. Besborn told Gibbs that the asking price for the property was $135,000, which could be paid with a $35,000 cash down payment and the purchaser's assumption of a first lien mortgage indebtedness in favor of Wren Mortgage in the approximate amount of $100,000. After negotiation, the parties executed an earnest money contract providing for a total purchase price of $125,000, a cash down payment of $15,000, the assumption of the $100,000 Wren Mortgage debt, and the execution of a second lien note to the seller, Wortham Investments, Inc., for the balance of the purchase price in the approximate amount of $10,000.

Prior to the date of closing, Guardian Title Company issued and furnished to Gibbs a preliminary title report, evidencing title in Wortham Investments, Inc., and showing no outstanding liens other than the lien securing the $100,000 debt to Wren Mortgage. On October 14, 1975, Gibbs and Wortham Investments Inc. closed their transaction pursuant to the contract by executing appropriate documents. Among the instruments executed at that time was the Wortham defendants' affidavit representing that there were no liens outstanding against the property other than that securing the Wren Mortgage note. Several days later, on October 17, 1975, Gibbs received an owner's title insurance policy issued by defendant Safeco Title Insurance Company, and signed by its authorized agent, Guardian Title Company, containing no pertinent exceptions, other than those reflected by the preliminary title report. Thus, neither the closing documents nor the title policy revealed the existence of an outstanding recorded lien securing a $10,000 note from Wortham Investments, Inc. to Mr. William Craig dated April 1, 1975. Following the closing of his transaction with Wortham, Gibbs paid all monthly installments coming due on the $100,000 Wren mortgage debt which he had assumed, and also made all required payments on his second lien note to Wortham Investments, Inc.

On December 9, 1976, slightly over a year after the date of his purchase, Gibbs for the first time learned from Wren Mortgage that Main Bank of Houston, the assignee of the William Craig note and lien, had caused the lien securing the note to be foreclosed and the property sold at a public foreclosure sale. Gibbs promptly contacted Guardian Title which filed, on his behalf, the above-mentioned suit to have the foreclosure sale set aside. When the appellate court's decision in that action defeated Gibbs' effort to recover title to the property, he filed the supplemental petition in the instant proceeding, asserting the claims which are the subject of this appeal.

The standard of review applicable to this appeal from a directed verdict requires that the evidence be viewed in the light most favorable to Gibbs' position, and that all contrary evidence and inferences to be drawn therefrom be disregarded. If there is evidence on a controlling fact about which reasonable minds could differ, the trial court's judgment must be reversed and the cause remanded for a new trial. Henderson v. Travelers Ins. Co., 544 S.W.2d 649, 650 (Tex.1976). On this appeal, it is Gibbs' burden to show that the court's directed verdict cannot be supported on any of the grounds set forth in the defendants' motion for instructed verdict, McKelvy v. Barber, 381 S.W.2d 59, 62 (Tex.1964). In deciding whether Gibbs met that burden, this court must consider whether the record contains any evidence of probative force, which, considered alone, raises a fact issue that would support a judgment in favor of Gibbs. Freitas v. Twin City Fisherman's Coop. Ass'n, 430 S.W.2d 579, 581 (Tex.Civ.App.--Waco 1968, no writ).

The trial court's take nothing judgment does not specify which of the several grounds alleged in the defendants' motion constituted the basis for its judgment. Therefore, we must determine whether the judgment may be sustained on the basis of any one or more of the grounds alleged in the motion.

The defendants' motion for instructed verdict asserts:

1. That all causes of action except the claim on the title policy are barred by limitation.

2. That Gibbs is not a "consumer" within the meaning of the Deceptive Trade Practices Act.

3. That Gibbs failed to prove a cause of action for damages under any of its theories.

4. That the defendants were under no duty to disclose material facts known to them to Gibbs.

5. That Gibbs failed to offer evidence showing nondisclosure of a material fact by the defendants.

We first consider the defendants' contention that Gibbs' causes of action, except only his claim on the title policy, are barred by limitation as a matter of law.

The evidence shows that Gibbs first became aware of the outstanding Craig lien on December 9, 1976, and that his claims asserted under the Deceptive Trade Practices Act were filed within four years of that date. Assuming that Gibbs' cause of action under the Deceptive Trade Practices Act arose when he first learned of the outstanding lien, we are faced with the question of whether the two year or the four year statute of limitation applies to such action.

The Deceptive Trade Practices Act, as amended effective August 27, 1979, provides for a two year limitation period for actions brought under the Act. However, Gibbs' claims are based on alleged violations of the Act occurring prior to the 1979 amendment, and the four year statute of limitation is therefore applicable. Jim Walter Homes, Inc. v. Chapa, 614 S.W.2d 838 (Tex.App.--Corpus Christi 1981, writ ref'd n.r.e.). Since Gibbs' claims based on common law fraud and for alleged violations of the Texas Insurance Code immediately grew out of transactions in writing, we hold that such claims also are governed by the four year statute of limitations. See, Holifield v. Coronado Building, Inc., 594 S.W.2d 214 (Tex.Civ.App.--Houston [14th Dist.] 1980, no writ).

We further hold that the pleadings and the evidence raised fact issues for the jury as to whether the defendants are estopped from asserting the defense of limitations.

The evidence shows that after Gibbs first learned of the outstanding Craig lien, he had a telephone conversation with Mr. Barry Bradley, the president of Guardian Title Company, concerning the undisclosed lien....