Precision Sheet Metal Mfg. Co., Inc. v. Yates

• Decision Date: 09 July 1990
• Docket Number: No. 05-89-00740-CV,05-89-00740-CV
• Citation: 794 S.W.2d 545
• Parties: PRECISION SHEET METAL MFG. CO., INC., and James T. Durham, Appellants, v. Wallace H. YATES and Lorraine P. Yates, Appellees.
• Court: Texas Court of Appeals

Page 545

794 S.W.2d 545

PRECISION SHEET METAL MFG. CO., INC., and James T. Durham, Appellants, v. Wallace H. YATES and Lorraine P. Yates, Appellees.

No. 05-89-00740-CV.

Court of Appeals of Texas,

Dallas.

July 9, 1990.

Rehearing Denied Aug. 29, 1990.

Steve Terry, Newsom, Terry & Newsom, Dallas, for appellants.

Jack W. Frieze, Irving, for appellees.

Before STEWART, THOMAS and KINKEADE, JJ.

OPINION

THOMAS, Justice.

Precision Sheet Metal Mfg. Co., Inc. and James T. Durham appeal from a summary judgment rendered in favor of Wallace H. Yates and Lorraine P. Yates (the Yates). In a single point of error, Precision and Durham contend that the trial court erred in granting summary judgment. We agree and, accordingly, reverse the trial court's judgment and remand the cause to the trial court for further proceedings.

FACTUAL BACKGROUND

In 1978, the Yates purchased a tract of land located in the Irby Lane Industrial Park Addition in Irving, Texas. In November 1980, the Yates divided the property into two parts but did not file a replat or request approval from the City of Irving. On November 21, 1980, they sold a portion of the tract to Precision. On that same day, Precision transferred the property to Durham, its president. Precision occupied and used the property for its business. On December 12, 1986, Precision attempted to expand its building but was refused a building permit because the land was not platted. Thereafter, Precision discovered that the Yates had not filed a replat or requested approval from the City of Irving for division of the tract. Precision further learned that, in order to secure approval of a plat, it would have to construct improvements on its property as well as the adjoining property which was still owned by the Yates. When the Yates refused to assist in the replatting process, Precision and Durham filed suit on December 9, 1988, alleging violations of the Deceptive Trade Practices Act (DTPA) and article 974a of the Texas Revised Civil Statutes Annotated. ¹ Alternatively, Precision and Durham sought equitable rescission of the contract due to fraud, failure of consideration, and mutual mistake of fact. Certain affirmative defenses were asserted by the Yates, and they thereafter filed a motion for summary judgment alleging that they were entitled to judgment as a matter of law because: (1) the statute of limitations barred recovery for all causes of action arising out of the contract of sale dated November 1980; (2) Durham was not a party to the contract; therefore he was not entitled to any relief; (3) the contract of sale did not obligate them to furnish a plat to Precision; therefore there could be no breach of contract; and (4) the pleadings did not state a cause of action for breach of contract. Precision and Durham responded alleging that: (1) the discovery rule applied to toll the statute of limitations; (2) the causes of action alleged in this lawsuit do not require privity of contract; and (3) except to the extent that the request for equitable recission of the transaction can be considered a cause of action touching upon contract, they did not attempt to allege any cause of action based in contract. The trial court granted the Yates' motion for summary judgment and Precision and Durham appealed. ²

STANDARD OF REVIEW

The standards for reviewing a motion for summary judgment are:

1. The movant for summary judgment 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 non-movant will be taken as true.

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

Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.1985); Montgomery v. Kennedy, 669 S.W.2d 309, 310-11 (Tex.1984). The function of a summary judgment is not to deprive a litigant of his right to a full hearing on the merits of any real issue of fact, but to eliminate patently unmeritorious claims and untenable defenses. Gulbenkian v. Penn, 151 Tex. 412, 416, 252 S.W.2d 929, 931 (1952). A defendant who moves for summary judgment has the burden of showing as a matter of law that no material issue of fact exists as to the plaintiff's cause of action. Arnold v. National County Mut. Fire Ins. Co., 725 S.W.2d 165, 166-67 (Tex.1987); Griffin v. Rowden, 654 S.W.2d 435, 435-36 (Tex.1983). A summary judgment for the defendant disposing of the entire case is proper only if, as a matter of law, the plaintiff could not succeed upon any theories pleaded. Delgado v. Burns, 656 S.W.2d 428, 429 (Tex.1983); Dodson v. Kung, 717 S.W.2d 385, 390 (Tex.App.--Houston [14th Dist.] 1986, no writ).

STATUTE OF LIMITATIONS

The first basis asserted by the Yates supporting summary judgment alleges that the causes of action are barred by either section 17.565 of the Business and Commerce Code, a two-year statute of limitations, or section 16.004 of the Civil Practice and Remedies Code, a four-year statute of limitations. The Yates assert that all facts necessary to the accrual of any alleged cause of action existed in November of 1980 when the sale was consummated. By moving for summary judgment on the basis of the running of the statute of limitations, the Yates assumed the burden of showing as a matter of law that the suit is barred by limitations. Delgado, 656 S.W.2d at 429. In response to the Yates' motion for summary judgment, Precision and Durham asserted that the discovery rule applied. When a non-movant asserts the discovery rule, to circumvent the bar of limitations, the non-movant must offer competent summary judgment proof raising that as an affirmative defense. Smith v. Knight, 608 S.W.2d 165, 166 (Tex.1980). It is then the burden of the movant to negate the pleading of the discovery rule by proving as a matter of law that there is no genuine issue of fact concerning the time when the plaintiff discovered or should have discovered the nature of the injury. Weaver v. Witt, 561 S.W.2d 792, 794 (Tex.1977); Mitchell v. Jones, 694 S.W.2d 61, 63 (Tex.App.--Houston [14th Dist.] 1985, no writ).

A. DTPA

Section 17.565 of the Business and Commerce Code provides in pertinent part:

All actions brought under this subchapter must be commenced within two years after the date on which the false, misleading, or deceptive act or practice occurred or within two years after the consumer discovered or in the exercise of reasonable diligence should have discovered the occurrence of the false, misleading, or deceptive act or practice ...

TEX.BUS. & COM.CODE ANN. § 17.565 (Vernon 1987) (emphasis added). In Brooks Fashion Stores v. Northpark National Bank, 689 S.W.2d 937, 943 (Tex.App.--Dallas 1985, no writ), this Court held that section 17.565 governs exclusively the limitations period applicable to DTPA suits. See also Diamond v. Meacham, 699 S.W.2d 950, 954 (Tex.App.--El Paso 1985, writ ref'd n.r.e.). In their supporting affidavits in response to the Yates' motion for summary judgment, Precision and Durham established that the Yates sold the land to Precision on November 21, 1980. On the same day, Precision transferred the land to its president, Durham. On December 12, 1986, Precision was refused a building permit when it attempted to expand its building. Precision thereafter discovered that the Yates had not filed a plat when they resubdivided the lot with the City of Irving. Precision and Durham filed suit December 9, 1988, which is within two years after they discovered the failure to replat. The only summary judgment proof offered by the Yates was an affidavit stating that the contract of sale was executed in November 1980. This proof does not negate the discovery rule allegation. Therefore, it was error for the trial court to render summary judgment on the grounds that the statute of limitations barred the DTPA action.

B. Failure to Comply With Platting Statute

The Yates allege that the platting status of the property at issue was fixed on the date of the sale and it did not change thereafter. They contend that Precision and Durham were required to exercise reasonable diligence in considering the quality of the property conveyed and all terms of the proposed contract of sale prior to consummating the transaction. Thus, the Yates assert that Precision and Durham had constructive or actual notice of all laws in effect at the time of the sale including the platting statute and are therefore barred by the statute of limitations. Precision and Durham contend that vendees of land lying within a city's limits should be entitled to rely on a presumption that the vendor has complied with the law in subdividing his property. Accordingly, the vendee's cause of action should not accrue until he is put on notice that his use is restricted by an appropriate governmental authority, which would be when Precision and Durham learned that their land was first restricted on December 12, 1986.

In deciding whether the discovery rule should be extended to a particular cause of action, a balancing test is employed. In striking the balance, the courts have considered:

(1) the nature of the plaintiff's case, and the type of evidence required to establish and defend the claim;

(2) the length of the limitations period in question, and the wrongful act's susceptibility to discovery within that period; and

(3) the susceptibility of cases to fraudulent prosecution if limitation is tolled.

Southwest Bank & Trust Co. v. Bankers Commercial Life Ins. Co., 563 S.W.2d 329, 331 (Tex.Civ.App.--Dallas 1978, writ ref'd n.r.e.). Suits concerning compliance with platting will primarily depend on documentary evidence so there would be no reason to presume that evidence would become stale merely because of the passage of time. Further, the necessity of documentary proof lessens the likelihood of fraudulent suits. Accordingly, this...