de Monet v. PERA

• Decision Date: 04 March 1994
• Docket Number: No. 05-92-02711-CV,05-92-02711-CV
• Citation: 877 S.W.2d 352
• Parties: Joaquin de MONET, Ricardo de Monet, Charles Schonfeld, and Helga Schonfeld, Appellants, v. PERA, A Colorado General Partner, as nominee for Public Employees Retirement Association of Colorado, Appellee.
• Court: Texas Court of Appeals

Page 352

877 S.W.2d 352

Joaquin de MONET, Ricardo de Monet, Charles Schonfeld, and Helga Schonfeld, Appellants, v. PERA, A Colorado General Partner, as nominee for Public Employees Retirement Association of Colorado, Appellee.

No. 05-92-02711-CV.

Court of Appeals of Texas,

Dallas.

March 4, 1994.

Rehearing Denied May 9, 1994.

Frederick W. Addison, III, Elizabeth E. Mack, Dallas, Harry M. Reasoner, Houston, for appellant.

Cynthia Hollingsworth, Stacy R. Obenhaus, Dallas, for appellee.

Before BAKER, MALONEY and ROSENBERG, JJ.

OPINION

ROSENBERG, Justice.

This is a summary judgment case. Joaquin de Monet, Ricardo de Monet, Charles Schonfeld, and Helga Schonfeld (Sellers) appeal the trial court's decision to grant PERA rescission of a $30 million purchase agreement on the grounds of mutual mistake. Sellers bring seventeen points of error, contending that the trial court erred in granting summary judgment to Public Employees Retirement Association of the State of Colorado (PERA) and denying their cross-motion for summary judgment.

We conclude that a material fact issue exists regarding mutual mistake. We sustain Sellers' point of error one and overrule point of error two. Because of our disposition of point of error one, we do not address Sellers' points of error three, four, five, six, seven, eleven, thirteen, and seventeen. Sellers' remaining points of error complain that the trial court erred in denying their cross-motion for summary judgment. Because the trial court expressly denied Sellers' summary judgment solely on its erroneous finding of mutual mistake as a matter of law and did not consider the merits of Sellers' grounds for summary judgment, we will not review these issues for the first time on appeal. We reverse the trial court's order granting summary judgment to PERA and denying summary judgment to Sellers. We remand the entire cause to the trial court for further proceedings.

BACKGROUND FACTS

In 1986, PERA purchased property at 1200 Main Street in downtown Dallas, which included a twenty-seven floor office building, from Sellers. A federal agency, the General Services Administration (GSA), was the building's primary tenant, occupying more than seventy percent of the building. In 1984, Sellers discovered that the building contained asbestos, which GSA required to be removed as a prerequisite for renewing its lease. Sellers hired a company called PICO, Inc., to remove the asbestos-contaminated material. PICO contracted to bring the building into compliance with the GSA lease restrictions on asbestos. GSA renewed its lease.

At the time of the sale, GSA remained the building's primary tenant, and PICO continued the asbestos-abatement program. During negotiations for purchase of the building, the attorneys for Sellers and PERA discussed the necessity of satisfactory removal of asbestos in the building. During the course of the abatement work, Matrix Engineering periodically tested the air quality in the building and reported its readings to GSA, which determined that the air readings were within acceptable levels. PICO represented to Sellers that it had removed the asbestos in an amount consistent with the GSA lease restrictions on all but four floors. Neither Sellers, GSA, nor PERA supervised or inspected PICO's asbestos-abatement work to determine whether PICO had properly removed the fireproofing material.

In the purchase agreement, Sellers represented to PERA that, in reliance on the air clearance tests performed by Matrix, the asbestos removal was complete and consistent with GSA guidelines, except for four floors. At the closing, the parties acknowledged that PICO had not performed its abatement work on four floors of the building. In a letter-of-credit agreement, Sellers agreed to complete the abatement work necessary on these four floors to ensure compliance with federal guidelines. PERA held back 1.3 million dollars of the purchase price until the abatement work was completed on the remaining four floors.

The parties also executed an assignment and assumption of lease agreements, which included an assignment of the GSA lease. In the assignment, Sellers stated that to the best of their actual knowledge, there were no defaults under the leases and that there was nothing which, with the passage of time or the giving of notice, could become a default under the lease, except as they had previously disclosed in writing.

In Spring 1987, PICO completed its work on the remaining floors, and GSA occupied these floors based on the results of the air-monitoring tests. PERA released the letters of credit.

In 1989, PERA discovered unabated asbestos in the building. Several inspections, more extensive than air quality tests, revealed that none of the building's floors were in compliance with the GSA lease restrictions. In 1990, PERA filed suit, contending that Sellers negligently misrepresented the status of the asbestos abatement and breached their warranties. PERA sued for damages based on fraud, misrepresentation, negligence, and breach of contract. PERA also sued for rescission of the purchase agreement on the grounds of mutual mistake. Both parties moved for summary judgment.

The trial court voided the contract and letters of credit, ordered rescission of the $30 million purchase agreement, and sought to restore the parties to their original positions. The trial court required PERA to tender title to the building and required Sellers to return the purchase price with interest minus an offset for income received on the property. The trial court determined that the remaining claims and counterclaims between the parties were inconsistent with the finding of mutual mistake and entered a take-nothing judgment on those claims and counterclaims.

SUMMARY JUDGMENT

A trial court may render summary judgment only if the pleadings, depositions, admissions, and affidavits on file show that no genuine issue exists regarding any material fact and that the movant is entitled to judgment as a matter of law. TEX.R.CIV.P. 166a(c); Black v. Victoria Lloyds Ins. Co., 797 S.W.2d 20, 23 (Tex.1990). Summary judgment is designed to eliminate unmerited claims or untenable defenses; it is not intended to deprive litigants of their right to a full hearing on fact issues. Compton v. Calabria, 811 S.W.2d 945, 949 (Tex.App.--Dallas 1991, no writ) (citing Gulbenkian v. Penn, 151 Tex. 412, 416, 252 S.W.2d 929, 931 (1952)).

Under rule 166a, both plaintiff and defendant may simultaneously move for summary judgment. TEX.R.CIV.P. 166a. A movant must expressly present, in the summary judgment motion, the specific grounds for summary judgment. McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex.1993). Each party must carry its own burden, and neither can prevail due to the other's failure to meet its burden. See Cove Inv., Inc. v. Manges, 602 S.W.2d 512, 514 (Tex.1980).

On appeal, this Court considers all evidence accompanying both motions. Edinburg Consol. Indep. Sch. Dist. v. St. Paul Ins. Co., 783 S.W.2d 610, 612 (Tex.App.--Corpus Christi 1989, no writ). In reviewing the summary judgment evidence, we apply the following standards:

1. The movant has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law;

2. In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant is taken as true; and

3. Every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor.

Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985).

When a trial court's order granting summary judgment for one movant and denying summary judgment for the other does not specify the grounds upon which it rests, this Court may affirm the trial court's judgment if any of the grounds raised in the prevailing movant's motion are meritorious. Carr v. Brasher, 776 S.W.2d 567, 569 (Tex.1989); Rogers v. Ricane Enters. Inc., 772 S.W.2d 76, 79 (Tex.1989). This Court may also reverse the trial court's judgment and render judgment for the other movant based on any meritorious grounds raised in its motion. See id.; Jones v. Strauss, 745 S.W.2d 898, 900 (Tex.1988).

However, when a trial court's order explicitly specifies the ground relied on for the summary judgment ruling, the summary judgment can be affirmed only if the theory specified in the trial court's order is meritorious. If the specified ground is not meritorious, the appellate court must remand the cause to allow the trial court to rule on the remaining grounds. State Farm Fire & Casualty Co. v. S.S., 858 S.W.2d 374, 380 (Tex.1993) (plurality opinion) (citing State v. Flag-Redfern Oil Co., 852 S.W.2d 480, 484 n. 6 (Tex.1993)).

Here, the summary judgment order is specific. The judgment provides, "[PERA] and Sellers, at the time they entered into the Purchase Agreement were mutually mistaken concerning a material fact, namely, the existence of asbestos-containing fireproofing material in the building." The judgment further recites, "All parties believed that such asbestos had been removed or properly abated on all floors ... and the parties would not have entered into the transaction and executed the agreements if they had known the truth.... Accordingly, the parties are entitled to be restored to their original positions and to restitution of all consideration paid...."

At the summary judgment proceeding, PERA had the burden to establish that there exists no genuine issue of material fact, thereby entitling it to judgment as a matter of law. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex.1979). All doubts as to the existence of a genuine issue of material fact are resolved against PERA, and we view the evidence in the light most favorable to Sellers. See Great Am. Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex.1965).

MUTUAL MISTAKE

In point of...