National Resort Communities v. Short

• Citation: 712 S.W.2d 200
• Decision Date: 14 May 1986
• Docket Number: No. 14530,14530
• Parties: NATIONAL RESORT COMMUNITIES, d/b/a N.R.C., Inc., Appellant, v. Mildred G. SHORT, Appellee.
• Court: Texas Court of Appeals

Page 200

712 S.W.2d 200

NATIONAL RESORT COMMUNITIES, d/b/a N.R.C., Inc., Appellant, v. Mildred G. SHORT, Appellee.

No. 14530.

Court of Appeals of Texas,

Austin.

May 14, 1986.

Rehearing Denied July 2, 1986.

Joanne Summerhays, Barry Bishop, Clark, Thomas, Winters & Newton, Austin, for appellant.

Charles O. Grigson, Austin, for appellee.

Before SHANNON, C.J., and SMITH and GAMMAGE, JJ.

SHANNON, Chief Justice.

Mildred Short sued appellant National Resort Communities (NRC) in the district court of Travis County for damages for fraud in the sale of land. After trial to a jury, the district court rendered judgment for Short for $4,300 in actual damages and $25,000 in exemplary damages. This Court will reverse the judgment.

Short, a Tyler resident, was interested in buying a lot from NRC in its Bar-K Ranches subdivision, near Austin. On June 22, 1972, she purchased lot 7030 for $6,800. NRC's salesman allegedly represented to her that the street to her lot would be paved and that utilities would be available within two years.

Short came to Austin several times between 1972 and 1975. Sometime between those dates, she attempted to locate lot 7030. She drove about in the Bar-K Ranches subdivision looking for the lot; however, the immediate area was overgrown and she was unable to find the lot.

Short pleaded that on May 30, 1978, she visited the Bar-K Ranches subdivision and, at that time, she discovered that the street to her lot had not been paved and that utilities had not been put in place. Short filed suit for fraud on May 30, 1980. In defense of the suit, NRC pleaded that her suit was barred by limitations.

The jury found that NRC represented that the street to Short's lot would be paved and the utilities would be in place within two years from the date of purchase; that NRC did not intend to pave or install the utilities at the time the representations were made; that the representations were material and were made with the intention that Short should act on them; and that Short relied upon the representations to her damage.

NRC filed a motion for judgment non obstante veredicto claiming, in the main, that under the undisputed facts Short's suit was barred by limitations and that Short did not tender special issues submitting a defense to limitations. The district court overruled the motion for judgment non obstante veredicto and, instead, rendered judgment for Short.

NRC claims that the district court erred in overruling its motion for judgment non obstante veredicto. In support of its claim, NRC asserts that Short's suit for fraud, as pleaded and proved, was barred by limitations and that Short, by failing to obtain a jury finding that she exercised reasonable diligence to discover that the street was not paved and the utilities were not in place, waived any defense to limitations.

Short, on the other hand, defends the judgment asserting that NRC had the burden to request an issue and obtain a jury finding to establish its limitations defense. Because NRC failed to do so, Short asserts that it waived its limitations defense. She argues:

The fraud here occurred in 1972. In [Short's] pleadings and in the evidence adduced at the trial it was shown that [Short] did not discover the fraud until May 31, 1978 (sic). Since [Short's] pleadings and proof were adequate to show why the fraud was not discovered within two years, it became [NRC's] duty to request an issue on limitations to the jury. By failing to do so and by failing to object to the charge for its failure to contain an issue on limitations, [NRC] waived this defense.

Suits for damages for fraud are governed by the two-year statute of limitations. Tex.Rev.Civ.Stat.Ann. art. 5526 (now codified as Texas Civil Practice and Remedies Code § 16.003); Blondeau v. Sommer, 139 S.W.2d 223 (Tex.Civ.App.1940, writ ref'd); National Resort Communities, Inc. v. Holleman, 594 S.W.2d 195 (Tex.Civ.App.1980, writ ref'd n.r.e.).

Fraud will prevent the running of limitations only until such time as the fraud is discovered or by the exercise of reasonable diligence should have been discovered. Sherman v. Sipper, 137 Tex. 85, 152 S.W.2d 319 (1941). The party seeking to suspend the running of limitations has the burden to plead and prove that he comes within this so-called "discovery" rule. Sherman v. Sipper, supra; See Weaver v. Witt, 561 S.W.2d 792 (Tex.1977); Wise v. Anderson, 163 Tex. 608, 359 S.W.2d 876 (1962); Compare : Intermedics v. Grady, 683 S.W.2d 842 (Tex.App.1984, writ ref'd n.r.e.); Hoffman v. Wall, 602 S.W.2d 324 (Tex.Civ.App.1980, writ ref'd n.r.e.).

Although Short insists to the contrary, and the opinions are not entirely free from ambiguity, ¹ this Court has concluded that the party seeking to suspend the running of limitations has the burden to obtain a jury finding to the...