Milestone Properties, Inc. v. Federated Metals Corp.
| Decision Date | 08 December 1993 |
| Docket Number | No. 3-93-098-CV,3-93-098-CV |
| Parties | MILESTONE PROPERTIES, INC., Appellant, v. FEDERATED METALS CORPORATION, Asarco, Inc., and Lone Star Lead Construction Corporation, Appellees. |
| Court | Texas Court of Appeals |
William T. Little, Gilpin, Paxson & Bersch, Houston, for appellant.
T. John Ward, Brown McCarroll & Oaks Hartline, Houston, for appellees.
Before POWERS, JONES and KIDD, JJ.
Appellant Milestone Properties, Inc. ("Milestone") sought to resurrect certain tort claims 1 against appellees Federated Metals Corporation, ASARCO, Inc., and Lone Star Lead Construction Corporation (collectively "appellees"), that Milestone had originally pursued in separate lawsuits, by including the tort claims in its second amended petition in a suit for judicial review of a Texas Water Commission hazardous waste order (the "agency appeal"). Milestone contended that its tort claims related back to claims it had made against the appellees for contribution and/or indemnity in its first amended petition in the agency appeal. The trial court rendered summary judgment for the appellees, holding that Milestone's tort claims were barred by the applicable statutes of limitations. We will affirm in part and reverse and remand in part.
Milestone and Federated filed separate suits for judicial review of a Texas Water Commission ("TWC") order. The order directed the two companies to clean up environmental damage to land that Milestone had purchased from Federated. The suits for judicial review were consolidated on December 22, 1988, to form the agency appeal. On March 14, 1990, Milestone filed its first amended petition in the agency appeal that included a cross-claim for contribution and/or indemnity from the appellees and the Missouri Pacific Railroad Company. On February 6, 1992, Milestone filed its second amended petition, adding the tort claims against the appellees. The origin of the dispute underlying the tort claims was a 1980 purchase by Milestone from Federated of approximately fifteen acres of land in the eastern part of Houston, Texas ("the Site"). Federated and Lone Star Lead Construction Corporation, Federated's subsidiary, had used the Site as a chemical dump for approximately forty years.
On August 1, 1980, Milestone executed an option agreement to purchase the Site from Federated. The option agreement stated that Federated had deposited "certain materials" on the site. The agreement also provided that Federated "make available to [Milestone] upon request all studies [Federated] has obtained with respect to said land and the nature of said materials." Milestone made such a request, and in response, Federated produced a two-page letter dated June 16, 1980, from Ronald A. Robbins, Supervisor of Laboratory Services for ASARCO, Federated's parent company, addressed to Federated's Houston plant manager. The letter stated, "I do not feel the material from the property in question is suitable for top soil or garden soil; however, providing current slag is not being dumped there, I do not believe the material violates any existing standards or would be unsuitable for fill." Test results from soil samples taken from the Site were attached to the letter. Milestone did not conduct its own tests of the Site, although the option agreement permitted it to do so. Milestone exercised the option agreement and the sale of the Site closed on December 16, 1980.
In a letter dated July 24, 1986, the TWC notified Milestone that the agency was planning an investigation to assess the potential presence and effect of hazardous waste at the Site. The letter notified Milestone of an upcoming public meeting concerning the investigation, to be held in Houston on August 21, 1986. A Milestone representative attended this meeting. On November 3, 1986, the TWC gave notice by letter that the Site would be listed on the State of Texas Registry as containing hazardous waste. On February 5, 1987, Milestone representatives attended another public meeting held by the TWC to discuss the status of the Site. Soon after this meeting, on February 10, 1987, the TWC informed Milestone that, as an owner of a State Registry Site, it must deed record Milestone and Federated sought judicial review of the TWC order in separate suits, which were consolidated to form the agency appeal on December 22, 1988. Meanwhile, believing that Federated had not fully disclosed the extent of its hazardous waste dumping at the Site, Milestone filed a separate lawsuit in Travis County against Federated on May 17, 1988 ("Cause II"), alleging breach of warranty, breach of contract, and DTPA violations. Tex.Bus. & Com.Code Ann. § 17.46 (West 1987). On March 14, 1990, Milestone filed its first amended petition in the agency appeal, cross-claiming for contribution and/or indemnity against appellees, and seeking apportionment of the environmental cleanup costs under the Texas Health and Safety Code. Tex.Health & Safety Code Ann. §§ 361.276, 361.343, 361.344 (West 1992).
the Site. 2 Finally, on February 1, 1988, the TWC issued an order directing both Milestone and Federated to remedy the environmental problems caused by the hazardous wastes dumped at the Site
On August 29, 1990, Cause II was placed on the district court's dismissal docket and was dismissed for want of prosecution on October 17, 1990. Milestone did not file a motion to reinstate, as permitted under Texas Rule of Civil Procedure 165a(3). See Tex.R.Civ.P. 165a(3).
Instead, Milestone filed a third suit, this time in Harris County ("Cause III"), on January 23, 1991, three months after the dismissal of Cause II. In this suit, Milestone alleged common law fraud; real estate fraud, Tex.Bus. & Com.Code Ann. § 27.01 (West 1987); breach of warranty; commercial frustration; and contribution and/or indemnity. Milestone voluntarily nonsuited Cause III on June 5, 1992, seventeen months after filing.
Meanwhile, Milestone had returned its attention to the agency appeal. On February 6, 1992, Milestone filed its second amended petition in the agency appeal to include the tort claims against appellees along with its suit for judicial review of the agency order. On October 6, 1992, appellees responded with a motion for summary judgment on the tort claims, asserting that they were barred by the applicable statutes of limitations. Milestone raised three arguments in defense of the summary judgment motion, which now constitute Milestone's points of error on appeal. First, Milestone contended that the tort claims in its second amended petition filed in 1992 related back to its first amended petition filed in 1990, and thus at least were not barred by the four-year statute of limitations. Second, Milestone argued that although Cause II was dismissed for want of prosecution, its filing in 1988 tolled the running of the statutes of limitations on the tort claims. Third, Milestone urged that disputed fact issues concerning the tolling of the statutes of limitations made summary judgment inappropriate.
The trial court rejected Milestone's arguments and rendered partial summary judgment in favor of the appellees on the tort claims on December 23, 1992. The trial court concluded that "whatever civil claims and causes of action may have accrued to Milestone against [the appellees] regarding the sale of [the Site] did so more than four (4) years prior to the filing of Milestone's Second Amended Petition," and that the tort claims asserted in its second amended petition in the agency appeal did not relate back to any claims made in its first amended petition. The trial court severed the tort claims subject to the partial summary judgment order, making the judgment final, and Milestone appealed. We will affirm the summary judgment on Milestone's DTPA and negligent misrepresentation claims, but will reverse the summary judgment on Milestone's common law fraud and statutory real estate fraud claims.
In its first point of error, Milestone argues that the trial court erred in holding that its tort claims did not relate back to its The primary purpose of statutes of limitations is to insure that claims are asserted within a reasonable time, giving the opposing party a fair opportunity to defend while evidence is still available. Matthews Constr. Co. v. Rosen, 796 S.W.2d 692, 694 (Tex.1990). Statutes of limitations also insure that notice of claims be given to adverse parties in order to prevent "fraudulent and stale claims from springing up at great distances of time and surprising the other party." Hallaway v. Thompson, 226 S.W.2d 816, 820 (Tex.1950). Thus, limitations establish a point of repose and terminate stale claims. Murray v. San Jacinto Agency, Inc., 800 S.W.2d 826, 828 (Tex.1990).
first amended petition and were therefore barred by statutes of limitations. We agree.
Section 16.068 of the Civil Practice and Remedies Code limits the application of statutes of limitations to amended pleadings:
If a filed pleading relates to a cause of action, cross action, counterclaim, or defense that is not subject to a plea of limitation when the pleading is filed, a subsequent amendment or supplement to the pleading that changes the facts or grounds of liability or defense is not subject to a plea of limitation unless the amendment is based on a new, distinct, or different transaction or occurrence.
Tex.Civ.Prac. & Rem.Code Ann. § 16.068 (West 1986). The purpose of section 16.068 was that "limitation statutes should be relaxed to avoid undue harshness where this can be done consistently with the true reason of [the] statutes." Lynch v. American Motorists Ins. Co., 101 F.Supp. 946, 949 (N.D.Tex.1951). See also Oliveros v. Dillon-Beck Mfg. Co., 260 S.W.2d 707, 710 (Tex.Civ.App.--Galveston 1953, no writ) ("The manifest purpose of [section 16.068] was to liberalize the right of ...
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