Head v. US INSPECT DFW, INC.

• Decision Date: 24 February 2005
• Docket Number: No. 2,2
• Citation: 159 S.W.3d 731
• Parties: Jacqueline C. HEAD, Individually and as Successor, Trustee Under the FTW Living Trust, Appellant, v. U.S. INSPECT DFW, INC. f/k/a Affordable Inspections, Inc. and John Fox, Appellees.
• Court: Texas Court of Appeals

159 S.W.3d 731

Jacqueline C. HEAD, Individually and as Successor, Trustee Under the FTW Living Trust, Appellant, v. U.S. INSPECT DFW, INC. f/k/a Affordable Inspections, Inc. and John Fox, Appellees.

No. 2-03-152-CV.

Court of Appeals of Texas, Fort Worth.

February 24, 2005.

Fielding, Parker, Hallman and Timothy G. Chovanec, Fort Worth, and Bragg, Chumlea, McQuality and Mark S. McQuality and Cheryl C. Turner, Dallas, for Appellant.

Ray and Wilson and Donald H. Ray, Fort Worth, for Appellees.

Panel A: CAYCE, C.J.; GARDNER and McCOY, JJ.

OPINION

ANNE GARDNER, Justice.

INTRODUCTION

Jacqueline Head appeals from the trial court's grant of summary judgment in favor of U.S. Inspect DFW, Inc. f/k/a Affordable Inspections, Inc. ("Affordable") and John Fox. Head argues that the trial court erred in (1) holding that the professional services exemption barred her claims under the Deceptive Trade Practices Act ("DTPA"), (2) holding that a limitation of liability clause in Head's contract with Affordable applied to her breach of contract and negligence claims, and (3) awarding attorneys' fees to Appellees. We affirm in part and reverse and remand in part.

FACTUAL AND PROCEDURAL BACKGROUND

Purchase and Inspection of the Residence

In 1998, the FTW Living Trust, through its trustee Leonard Rodes, contracted to purchase a home in Fort Worth from Alfred and Susan Finley for the benefit of Appellant Jacqueline Head, as sole beneficiary of the FTW Living Trust. Head intended to occupy the home as her residence. Mike Goodrich, a Fort Worth attorney board certified in real estate law, assisted Head and Rodes during this process.

Prior to Head's purchase of the home, four separate inspections were conducted. The inspection that is the subject of this lawsuit was conducted by Affordable.¹ On June 19, 1998, Head entered into a written agreement with Affordable for a "Real Estate Inspection" of the home. The contract provided that a "licensed real estate inspector" would perform the inspection, limited to a visual inspection of the "Readily Accessible Items Agreed To Be Inspected." The contract specified that neither the inspection nor the report would include any warranties, express or implied, unless specifically stated. Additionally, the agreement contained a clause that limited liability for "errors and omissions" to the amount paid for the inspection, not to exceed $500. This limitation of liability clause was set apart from the other provisions, enclosed in a box, and separately initialed by Head. The contract was signed by Head and by John Fox, identified as "Inspector."

According to Head's affidavit, filed in response to Appellees' Motion for Summary Judgment, she was present when John Fox, assisted by Jim Blaeser, performed the inspection on June 19, 1998. Head averred that Blaeser, whom she only later learned was an "apprentice inspector" rather than a licensed real estate inspector, conducted the inspection of the attic and roof of the home without the assistance or supervision of Fox. Head alleges that Fox never entered the attic nor climbed on the roof, although Fox stated in a deposition, attached to Head's response to Appellees' motion for summary judgment, that he did climb onto the roof and did perform the roof inspection.

Following the inspection, Fox prepared an inspection report, which was provided to Head and her attorney. The report was signed by John Fox, but not Jim Blaeser. The inspection report indicated the areas of the residence inspected by Fox and included a summary of potential problem areas and items in need of repair. The report is checkmarked, showing that the rooftop was accessible and that the roof, roof structure, and attic were inspected. The report is checkmarked indicating "Evidence of Visible Water Penetration" on the roof, but there is also a notation that the roof was "Performing its function as intended AT THIS TIME." [Emphasis in original.] Head stated in her affidavit that she and Fox discussed particular problem areas that he thought were important, such as missing weather seals and the absence of caulking from some of the windows, but that Fox never told her that the weather seals or caulking were causing water penetration, nor did he mention any problems with the roof.

Discovery of Leaks

After closing on the home in July of 1998, Appellant hired contractors to make some minor updates and modifications to the home, which included changing wall and window treatments. Appellant stated in her affidavit that due to sensitivity to paint and "other construction related materials" she did not plan on moving into the home until after the painting was complete. Head went to the house on October 2, 1998 during a rainstorm and met with several contractors from A Window Warehouse. Head stated that she and the contractors discovered water running down the interior of the kitchen windows and pooling onto the countertop, water running down the interior of the glass block window in the master bathroom, and water leaking in from the living room ceiling. Head instructed the contractors to remove sheetrock from around the kitchen windows in an attempt to find the source of the leak and stated that when the sheetrock was removed, she observed "water, extensive wood rot, mold, and rusty nails."

Subsequently, A Window Warehouse provided a report to Head, noting its initial observations on October 2, 1998 and also containing a description of other damage observed on October 6, 1998. The report supports Head's observations in the kitchen and also describes other water damage, including water in a light fixture and stains on the ceiling in the garage and evidence that the living room ceiling had been recently textured, covering old water stains. The report from A Window Warehouse shows that the roof was inspected in an attempt to locate other potential sources of water damage, makes numerous notations of problems with the roof, and concludes that the roof should be inspected by a roof professional. Head then hired PSM Consultants to conduct an inspection to determine the condition of the roof and walls and to determine the source of the leaks. The report provided by PSM Consultants lists numerous anomalies on the roof that, in its opinion, would allow water to penetrate into the house. The report by PSM concluded that, in its opinion, the problems discovered on the roof existed prior to 1998 and "should have been obvious to anyone familiar with proper wall and roof construction methods and materials."

On November 9, 1998, a structural and foundation inspection was conducted by David Bulla, a structural engineer. He conducted a visual inspection and compiled a report on the roof. He indicated that "[o]verall, this roof is in very poor condition and has not been properly constructed. Leakage into the interior and exterior walls is unavoidable in the present condition." The report continues that "[t]he roof system has excessive deterioration; and the shingles are in poor condition and improperly installed. . . . The roof has several areas that are leaking and allowing water to enter the walls and interior of the residence. Total replacement will probably be necessary. . . ." The report concludes that the "situation did not develop in a short period of time as indicated by the amount of patching and repair work that had been attempted" and the "extent of damage that was observed must have been developing over several years."

LAWSUIT

On July 28, 2000, Head and Leonard Rodes, as trustee under the FTW Living Trust, sued the sellers of the residence, Alfred and Susan Finley; Affordable; and John Fox. On September 21, 2001, a "First Amended Original Petition" was filed leaving Head, individually and as successor trustee under the FTW Living Trust, as the sole plaintiff. Head asserted claims for violations of the DTPA and fraud against the Finleys² and breach of contract, breach of warranty, negligence, and DTPA violations against Affordable and Fox.

Causes of Action Against Affordable and Fox

In her lawsuit, Head alleged that Affordable and Fox (1) breached their contract by failing to perform in substantial conformity with the contract and failing to perform in a good and workmanlike manner; (2) breached an implied warranty that their services would be performed in a good and workmanlike manner; (3) were negligent in failing to "detect severe decay, mold, fungal growth and extensive deterioration caused by excessive water intrusion"; and (4) violated several provisions of the DTPA, including violations of the laundry list provisions,³ breach of express and implied warranties, and unconscionable action or course of action. Tex. Bus. & Com.Code Ann. § 17.50(a)(1), (2), and (3) (Vernon 2002).

Summary Judgment

On December 11, 2001, Affordable and Fox filed a traditional motion for summary judgment on the pleadings, asserting that they were entitled to judgment as a matter of law on all Head's claims. First, they asserted that Head's DTPA claims were barred by the professional services exemption, claiming the inspection and report by Fox was a professional service "the essence of which is the providing of advice, judgment, opinion, or similar professional skill." Tex. Bus. & Com.Code Ann. § 17.49(c) (Vernon Supp.2004-05). Secondly, they moved for summary judgment on the implied warranty claim asserting that there is no implied warranty on the type of service they provided. Finally, Affordable and Fox moved for summary judgment on the breach of contract and negligence claims based upon the limitation of liability clause in the inspection agreement, which limited recovery to the amount paid for the services not to exceed $500. Affordable and Fox asserted that they had tendered $348.27 to Head, which was the amount paid for the inspection, and therefore they had no further liability.

Head filed a response to the motion for summary judgment, asserting that the DTPA claims fell within statutory...