Parkway Co. v. Woodruff

• Decision Date: 10 June 1993
• Docket Number: No. 01-92-00157-CV,01-92-00157-CV
• Citation: 857 S.W.2d 903
• Parties: The PARKWAY COMPANY, Parkway Company of Texas, and Sugar Creek Corporation, Appellants, v. Ray WOODRUFF, Constance Woodruff Presley, Mickelson & Klein, Inc., and Vansickle, Mickelson & Klein, Inc., Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 903

857 S.W.2d 903

The PARKWAY COMPANY, Parkway Company of Texas, and Sugar Creek Corporation, Appellants, v. Ray WOODRUFF, Constance Woodruff Presley, Mickelson & Klein Inc., and Vansickle, Mickelson & Klein, Inc., Appellees.

No. 01-92-00157-CV.

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

June 10, 1993.

Rehearing Denied July 22, 1993.

Edward J. Hennessy, Randall D. Wilkins, Houston, for appellants.

Michael T. Powell, Amy Dunn Taylor, Houston, for appellees.

Before OLIVER-PARROTT, C.J., and COHEN and HEDGES, JJ.

OPINION

OLIVER-PARROTT, Chief Justice.

This is a suit for damages resulting from the flooding of residential property. Ray and Constance Woodruff (the Woodruffs ¹) sued The Parkway Company, Parkway Company of Texas, and Sugar Creek Corporation, (Parkway ²), alleging that the developers diverted surface water across their property by placing dirt fill and a concrete wall adjacent to their property. The Woodruffs asserted causes of action for negligence, gross negligence, violation of the Texas Water Code, private nuisance, trespass, and violations of the Texas Deceptive Trade Practices Act (DTPA). ³ Parkway, in turn, brought third-party actions against more than one engineering firm, the homebuilder, and an adjacent property owner. Various other third party actions and cross-actions, irrelevant to this appeal, were also filed.

In one third-party action, Parkway sued the engineering firms of Mickelson & Klein, Inc. and Vansickle, Mickelson & Klein, Inc. (collectively, Mickelson), asserting negligence in the design and construction of a wall placed adjacent to the Woodruffs' east property line and parallel to the back property line of the lots in section 34. The trial court directed a verdict in favor of Mickelson on that third-party claim.

After trial to a jury, judgment was rendered in favor of the Woodruffs against Parkway on their theories of negligence, DTPA violations, Water Code violations, and the knowing breach of an implied warranty. Parkway obtained a judgment for indemnity against one engineering firm that is not a party to this appeal. The judgment denied relief as to all other parties and claims. Parkway appeals, raising 13 points of error. The Woodruffs bring a single cross-point.

Factual Background

In April 1981, the Woodruffs bought the home located on lot 55 of section 24 of the Sugar Creek subdivision, a residential "master planned" community. As the developer of the Sugar Creek subdivision, Parkway provided all necessary services to develop and prepare raw land for sale to builders, who then built homes on the land for sale to buyers such as the Woodruffs. Parkway was responsible for such development services as the master planning of layout, planning and implementation of flood control, drainage, elevations, gradings, streets and utilities, including storm sewers, and all subdivision management and maintenance.

At the time of the Woodruffs' purchase in section 24, section 34 of the subdivision, which directly abuts the eastern boundary of the Woodruffs' lot, was undeveloped. The area north of the Woodruffs' lot, which is also abutted on the east by section 34, is a large commercial tract known as the Kaneb tract. The back yards of the houses in section 24, including the Woodruffs' back yard, and the back yards of the houses on the west side of Lakeside Boulevard in section 34 abut the Kaneb tract.

In February 1983, Parkway began development of section 34, initially by regrading that portion of the section that ran alongside the eastern border of the Woodruffs' lot. Included in the development plan was the proposed construction of a concrete wall along the eastern side of lot 55. Before the work began, water from the Kaneb tract had drained naturally into a "swale" ⁴ along and outside the northernmost corner of the Woodruffs' land and across the undeveloped lots (lots 1 and 2) in section 34 that abutted the Woodruffs' side yard. After the regrading began, the Woodruffs communicated to Parkway by letter dated February 3, their concerns that the regrading had altered drainage patterns. They urged Parkway to consider the impact that further construction of the concrete wall would have on the drainage of their property. Just six days later, on February 9, when a heavy rain occurred, the regrading activities had the predicted effect of diverting rainwater runoff onto the Woodruffs' property.

Parkway proposed to design and install drains to prevent future flooding on the Woodruffs' property and hired an engineering firm to prepare the plans. In fact, certain engineering work was done, including the installation of two drains. Parkway completed construction of the concrete wall in July of 1983. In August of 1983, during Hurricane Alicia, water came up to the slab of the Woodruffs' house and into their sunroom, which was lower than the main portion of the slab. In September of that same year during a rainstorm, the inside of the house flooded. In addition, during the 1983 flooding, water ran underneath the slab of the house, causing the slab to heave and resulting in structural damage. The Woodruffs' filed suit in 1984. The property flooded again in 1986 and in 1987.

Trial was to a jury. After finding the injuries to the property were permanent, the jury awarded damages for both cost of repairs ($100,000) and diminution of value ($120,000); out-of-pocket expenses ($14,000); mental anguish ($75,000 past and $10,000 future mental anguish for Ray and $25,000 past mental anguish for Constance Woodruff); additional discretionary damages for the knowing violation of the DTPA ($30,000); and attorneys' fees (33 1/3% of all amounts recovered by the Woodruffs). The trial court entered judgment for all damages found by the jury for cost of repair and diminution in value, mental anguish, additional discretionary damages, and attorneys' fees, and awarded prejudgment interest on all damages, except future mental anguish. The judge refused to award the out-of-pocket damages.

Consumer Status

In its first point of error, Parkway complains that the evidence is legally insufficient to establish that the Woodruffs were consumers under the DTPA with respect to any transaction involving Parkway. Whether a claimant is a consumer is generally a question of law, not fact. ⁵ Holland Mortgage. & Inv. Corp. v. Bone, 751 S.W.2d 515, 517 (Tex.App.--Houston [1st Dist.] 1987, writ ref'd n.r.e.); Reed v. Israel Nat'l Oil Co., Ltd., 681 S.W.2d 228, 233 (Tex.App.--Houston [1st Dist.] 1984, no writ). To establish consumer status under the DTPA, the Woodruffs must show that (1) they sought or acquired goods ⁶ or services by purchase or lease, and (2) the goods or services form the basis of their complaint. Melody Home Mfg. Co. v. Barnes, 741 S.W.2d 349, 351-52 (Tex.1987); Cameron v. Terrell & Garrett, Inc., 618 S.W.2d 535, 539 (Tex.1981).

Parkway agrees that the Woodruffs' purchase, from the third-party seller, of lot 55 and the home on the lot, meets the first prong of the consumer status test, qualifying the Woodruffs as consumers in relation to the seller of the home. However, Parkway argues that because it was not a party to that transaction, the purchase of the home does not qualify the Woodruffs as consumers in relation to Parkway. We do not agree.

The supreme court has explained that standing as a consumer is established by the plaintiffs' relationship to the transaction.

We find no indication in the definition of consumer in Section 17.45(4), or any other provision of the act, that the legislature intended to restrict its application only to deceptive practices committed by persons who furnish the goods or services on which the complaint is based.... The Act is designed to protect consumers from any deceptive trade practice made in connection with the purchase or lease of any goods or service....

Consumer is defined in Section 17.45(4) only in terms of a person's relationship to a transaction in goods or services. It does not purport to define a consumer in terms of a person's relationship to the party he is suing. Section 17.45(4) ... does not say who a consumer can sue under Section 17.50 for a deceptive trade practice violation. [It] expressly states that a consumer can bring a suit if he has been adversely affected by "the use or employment by any person of an act or practice declared to be unlawful in Section 17.46.... We, therefore, hold that a person need not seek or acquire goods or services furnished by the defendant to be a consumer as defined in the DTPA.

Cameron, 618 S.W.2d at 540-41 (emphasis in original). See also Flenniken v. Longview Bank & Trust Co., 661 S.W.2d 705, 707 (Tex.1983); Tuscarora Corp. v. HJS Indus., Inc., 794 S.W.2d 435, 441 (Tex.App.--Corpus Christi 1990, writ denied). Furthermore, contrary to Parkway's contention, there is no requirement that the deceptive act or practice be committed before or during the purchase or lease, only that it occur in connection with it. ⁷ Cameron, 618 S.W.2d at 541.

In Luker, a situation very similar to the case before us, the Fort Worth Court of Appeals considered a test for defining whether a particular defendant is "connected with" a transaction. Luker, 843 S.W.2d at 111. In determining whether Luker, a developer who was not a direct party to the plaintiff's purchase of real property, acted "in connection with" the purchase, the court asked whether the developer "sought to enjoy the benefits of the transaction" made the basis of the complaint. Id. The court relied on the analysis employed by the supreme court in Knight v. International Harvester Credit Corp., 627 S.W.2d 382, 389 (Tex.1982), when it faced a similar question, whether Knight was a consumer in relation to a defendant who did no more than provide a loan for Knight's purchase of a truck.

The Knight court first determined that acquiring the loan and purchasing the truck were parts of a single transaction. Then, upon concluding that the defendant/lender's...