El Paso Associates, Ltd. v. J.R. Thurman & Co.

• Citation: 786 S.W.2d 17
• Decision Date: 31 January 1990
• Docket Number: No. 08-89-00279-CV,08-89-00279-CV
• Court: Court of Appeals of Texas
• Parties: EL PASO ASSOCIATES, LTD., a California Limited Partnership, et al., Appellants, v. J.R. THURMAN & COMPANY, et al., Appellees.

Page 17

786 S.W.2d 17

EL PASO ASSOCIATES, LTD., a California Limited Partnership,

et al., Appellants,

v.

J.R. THURMAN & COMPANY, et al., Appellees.

No. 08-89-00279-CV.

Court of Appeals of Texas,

El Paso.

Jan. 31, 1990.

Steven L. Hughes, Grambling & Mounce, El Paso, for appellants.

E. Link Beck, Beck & James, El Paso, for appellees.

Before OSBORN, C.J., and WOODARD and KOEHLER, JJ.

OPINION

WOODARD, Justice.

This is an appeal from a summary judgment granted to the defendant below on alleged causes of action for violations of the Deceptive Trade Practices--Consumer Protection Act, breach of implied warranty, breach of contract, breach of fiduciary duty, negligence and fraud. Appellee successfully moved for summary judgment on the grounds that the statute of limitations barred all causes of action. We reverse.

The Appellant, El Paso Associates, Ltd., (EPAL), is a property investor partnership which acquired the interest of Diversified Realty Group, Inc., to all their purchase rights to El Paso property known as Mesa Atrium. On July 30, 1981, the sale was completed from the owner, ESST Joint Venture, also a limited partnership. Trigon Development Corporation was contracted by EPAL, to manage the property. ESST, the selling partnership, and Trigon, the agent for the buying partnership, are both companies that are controlled by the Appellee Thurman. The building was constructed on an old landfill. The causes of action are based upon structural problems which manifested themselves in the completed building.

Point of Error No. Two alleges the trial court erred in sustaining the Appellee's oral hearsay objection to an EPAL summary judgment response affidavit. Defects in the form of the summary judgment proof are waived by failure to except in writing prior to the entry of judgment. Tex.R.Civ.P. 166a(e), Vaughn v. Burroughs Corporation, 705 S.W.2d 246 (Tex.App.--Houston [14th Dist.] 1986, no writ). The trial judge delayed her ruling on the oral objection until finally sanctioning the objection in the judgment which recited that the evidence was not considered. Appellee contends that although the objection was oral, there was substantial compliance with the rule requiring written objection. There were two summary judgment hearings held in the unusual presence of a court reporter. In compliance with the law, no oral testimony was received. The oral objection was made in the first hearing, thus, according to the Appellee, giving the Appellant notice and opportunity to remedy any hearsay defect just as if he had had prior written objection pursuant to the rule. Rule 166a(c) requires "[i]ssues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as grounds for reversal." The word "written" modifies not only the word "motion," but also the words "answer" and "other response." The "issues" required by the rule to be "expressly presented" are those pointed out to the trial court in written motions, written answers or written responses to the motion. The permit "issues" to be presented orally would encourage parties to request that a court reporter record summary judgment hearings, a practice neither necessary, nor appropriate to the purposes of such hearing. City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 677 (Tex.1979). Rule 166a(e) requires that the affidavits "shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." In ruling on a motion for summary judgment only admissible testimony having probative force is to be considered. Box v. Bates, 162 Tex. 184, 346 S.W.2d 317 (1961). The affidavit in question contains statements to the effect that Appellee was advised of defects and problems by various reports and correspondence, was, therefore, aware of the defects and failed to provide Appellant with that information. The affiant stated these matters were of his personal knowledge. In reading the affidavit, (particularly in light of the affiant's deposition that was referenced to by the Appellant in its response to the Motion for Summary Judgment), it is based upon hearsay. Prior to September, 1983, hearsay could not be competent evidence. From that date on, Tex.R.Civ.Evid. 802 provides hearsay may now have probative value if it is unobjected to. Therefore, we have an affidavit stating it is based upon personal knowledge, such knowledge was gained by statements of others, such hearsay was not properly objected to and, hence, became admissible and competent testimony. Dolenz v. A_ B_, 742 S.W.2d 82, 83 n. 2 (Tex.App.--Dallas 1987, writ denied).

Appellee further contends that Appellant failed to object to the trial court's ruling, and, therefore, they failed to preserve error. Tex.R.App.P. 52(a). The rule further states that a formal exception to the ruling is not necessary to authorize appellate review. Rule 166a(c) provides "[i]ssues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as grounds for reversal." The excluded evidence in affidavit form is before the reviewing court as a proper part of the record. LeNoble v. Weber, Hall, Cobb and Caudle, Inc., 503 S.W.2d 321 (Tex.Civ.App.--Tyler 1973, no writ). The improper procedure utilized in the summary judgment hearings and the pronouncement of the evidence ruling in the summary judgment effectively denied the Appellant opportunity to except. Rule 52's predecessor, Tex.R.Civ.P. 373 (repealed April 10, 1986, eff. Sept. 1, 1986), expressly provided "if a party has no opportunity to object to a ruling or order at the time it is made, the absence of an objection does not thereafter prejudice him." Under the facts of this case, the Appellant had no opportunity to except to the ruling at any time, and therefore, should not be subject to prejudice under Rule 52 or Rule 166a.

In addition, Appellee's "notice" evidence consisted of an affidavit that an officer of Trigon contacted a Darby Keen of EPAL December 15, 1981, and told him of settlement problems, that engineers had been contacted to analyze the problem, that the indications were that no major problem existed and that a detailed report would follow upon completion of the consulting work. (The affidavit referred to in the prior paragraph and the affiant's deposition indicated Keen denied this).

Further summary judgment evidence disclosed that an anonymously authored document entitled "Inspection Report," dated 4...