Smith–gilbard v. Perry

• Decision Date: 07 February 2011
• Docket Number: No. 05–09–01020–CV.,05–09–01020–CV.
• Citation: 332 S.W.3d 709
• Parties: Bianca SMITH–GILBARD, Appellant,v.Joanne PERRY, Appellee.
• Court: Texas Court of Appeals

332 S.W.3d 709

Bianca SMITH–GILBARD, Appellant,

v.Joanne PERRY, Appellee.

No. 05–09–01020–CV.

Court of Appeals of Texas, Dallas.

Feb. 7, 2011.

Brent E. Dyer, Patrick Dennis Souter, Looper, Reed & McGraw, P.C., Frieda A. Clark, Sourt Law Firm, P.C., Dallas, TX, for Appellant.Jacob D. Thomas, The Law Offices of Jacob D. Thomas, Don T. Cates, Scott Gray, Forney, TX, for Appellant.Before Justices MOSELEY, O'NEILL, and MYERS.

OPINION

Opinion By Justice MYERS.

Appellant, Bianca Smith–Gilbard, appeals from an adverse judgment in a lawsuit that sought reformation of a warranty deed. In two issues, she argues the evidence is legally and factually insufficient to support the trial court's finding of mutual mistake and its conclusion that appellee, Joanne Perry, was entitled to the equitable remedy of reformation. We reverse and render judgment in favor of Smith–Gilbard.

Background and Procedural History

This case is based on the sale of a parcel of real property by Perry to Smith–Gilbard. In 2001, Smith–Gilbard and her husband, Dr. Charles Turner Lewis, III, were in the market for an undeveloped piece of real estate for the purpose of building a pediatric health care facility in Kaufman County. Smith–Gilbard and Dr. Lewis were informed that Ray Raymond, a long time Kaufman resident, might be able to assist them in locating a parcel of land suitable for their purpose. Dr. Lewis asked for Raymond's help in locating a parcel of land near the hospital. Raymond, who was working as the Executive Director for the Kaufman Economical Development Corporation at the time, agreed to assist Dr. Lewis.

In 2001, Perry owned a piece of property along West Grove Street in Kaufman, Texas. While looking for some land that would suit Dr. Lewis's purpose, Raymond considered Perry's lot along West Grove Street. Raymond approached Perry and asked, according to Perry's testimony, “Would you be interested in selling the vacant lot on the other side of the fence next to your property....” Perry replied that she might be interested in selling the lot west of the fence line. Raymond testified that he informed Dr. Lewis that Perry was interested in selling her land west of the fence line. Raymond did not recall having “much conversation” with Dr. Lewis after telling him that Perry would sell the property. Dr. Lewis testified that Raymond never spoke to him about a fence line on the property, and that although he spoke to Perry about the selling price, he and his wife hired a realtor, Sam Musso, “to handle the rest of the transaction.” Smith–Gilbard denied there was any agreement regarding the portion of the lot east of the fence line.

Perry subsequently entered into an “Unimproved Property Contract” with Smith–Gilbard. At the time of the sale, Perry provided Smith–Gilbard with a warranty deed dated November 15, 1965 (the 1965 warranty deed). Perry told Smith–Gilbard that she did not see any reason to incur the additional expense of having a new survey made because there had been no changes to the property described in the 1965 warranty deed since Perry purchased it. The tract contained in the 1965 warranty deed was specifically referred to as a parcel of land “situated in the County of Kaufman, State of Texas, a part of the C.A. Lovejoy Survey, Abstract Number 303” (the C.A. Lovejoy Survey). The contract for sale signed by the parties on December 10, 2001 likewise described the property as “Lot 125, Block C.A. Lovejoy Addition,” City of Kaufman, Kaufman County, Texas, and indicated that it measured “113 x 200? [feet], adjacent to 1003 W. Grove.” The property measurements in the contract were provided by Perry's son, Johnny, who was not a trained surveyor. Johnny did not testify at the trial of this case, and Perry testified that she did not know how her son ascertained the “113 x 200” foot measurement of the property.

The property was formally conveyed to Smith–Gilbard in a deed of trust dated March 8, 2002 (the 2002 warranty deed). The conveyed property was described as the parcel of land situated in the “County of Kaufman, State of Texas, a part of the C.A. Lovejoy Survey, Abstract Number 303.” The property was then described by metes and bounds in terms that were identical to the 1965 warranty deed that Perry had provided in lieu of a survey. The metes and bounds descriptions of the property, however, included an additional 1,881 square feet of the lot that extended east beyond the fence line. At trial, it was undisputed that the “Lot 125” of the “C.A. Lovejoy Addition” referred to in the contract between the parties was the same piece of property described in both the 1965 and 2002 warranty deeds as part of the “C.A. Lovejoy Survey.” Perry did not tell Smith–Gilbard she did not intend to convey all of the property described in both the 1965 warranty and 2002 deeds as the “C.A. Lovejoy Survey.”

Part of the process of building the pediatric health clinic ¹ involved submitting building plans to the local zoning and commission boards. The discussions and planning regarding the clinic were based on the metes and bounds description in the 2002 warranty deed that, in turn, incorporated the metes and bounds description of the 1965 deed. During this process, Smith–Gilbard learned, for the first time, that a third of the property located on a service road at the front of the property was subject to a highway frontage easement. Smith–Gilbard was reimbursed under her title policy for the loss of the property subject to the easement, and her dealings with the title company did not involve the property line that is the subject of this litigation. Perry attended one of the zoning meetings concerning the clinic and was aware of the plans submitted by Smith–Gilbard, but did not speak to her or Dr. Lewis regarding the property line.

Perry sued Smith–Gilbard in September 2004, seeking reformation of the deed based on an alleged mutual mistake of the parties. The petition acknowledged that Perry executed and delivered the 2002 warranty deed to Smith–Perry. Perry argued, however, that it was the specific intent of the parties to sell the property described in the deed “up to but not including” the portion of the lot that extended east beyond the fence line. Specifically, she alleged that [b]y mistake of the parties, principally through the title company assisting in the closing, the premises were erroneously described therein as the adjacent tract (instead of the property to the fence line). As a result of said erroneous property description in the deed, an additional parcel of land adjacent to the property actually intended to be conveyed was mistakenly included therein.

Perry also alleged that she made repeated requests to Smith–Gilbard to reform the deed, to no avail. Smith–Gilbard's answer denied all of the allegations and raised the affirmative defenses of estoppel, laches, and that Perry had no cause of action under Texas law. Following a bench trial, the trial court concluded Perry was entitled to reformation of the warranty deed because there was an agreement among the parties that was not reflected in the deed, and that the deed should thus be reformed to describe the eastern boundary of the property sold by Perry to Smith–Gilbard as ending at “the existing fence line.” This appeal followed.

Discussion

In her first issue, appellant argues we should reverse the trial court's judgment because there is no evidence to support a cause of action for mutual mistake.

We review findings of fact entered in a bench trial for legal and factual sufficiency of the evidence by the same standards used to review jury findings. Girdner v. Rose, 213 S.W.3d 438, 445 (Tex.App.-Eastland 2006, no pet.); Dunn v. Dunn, 177 S.W.3d 393, 396 (Tex.App.-Houston [1st Dist.] 2005, pet. denied). In a legal sufficiency review, we view the evidence in a light favorable to the finding, crediting favorable evidence if a reasonable fact finder could, and disregarding contrary evidence unless a reasonable fact finder could not. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.2005). When reviewing the factual sufficiency of evidence, we examine all the evidence and set aside a finding only if it is so contrary to the evidence as to be clearly wrong and unjust. Cameron v. Cameron, 158 S.W.3d 680, 683 (Tex.App.-Dallas 2005, pet. denied). The trial court's conclusions of law are reviewed de novo. Smith v. Smith, 22 S.W.3d 140, 143–44 (Tex.App.-Houston [14th Dist.], no pet.).

The only cause of action alleged by Perry was mutual mistake. A mutual mistake of fact occurs when the parties to an agreement have a common intention, but the written contract does not reflect the intention of the parties due to a mutual mistake. Johnson v. Conner, 260 S.W.3d 575, 581 (Tex.App.-Tyler 2008, no pet.); N. Natural Gas v. Chisos Joint Venture I, 142 S.W.3d 447, 456 (Tex.App.-El Paso 2004, no pet.). When a party alleges that, by reason of mutual mistake, an agreement does not express the real intentions of the parties, extrinsic evidence is admissible to show the real agreement. Johnson, 260 S.W.3d at 581.

To prove a mutual mistake, the evidence must show that both parties were acting under the same misunderstanding of the same material fact. Walden v. Affiliated Computer Servs., Inc., 97 S.W.3d 303, 326 (Tex.App.-Houston [14th Dist.] 2003, pet. denied); see also City of The Colony v. N. Tex. Mun. Water Dist., 272 S.W.3d 699, 735 (Tex.App.-Fort Worth 2008, pet. filed); Wallerstein v. Spirt, 8 S.W.3d 774, 781 (Tex.App.-Austin 1999, no pet.). A mutual mistake regarding a material fact is grounds for avoiding a contract, but the mistake must be mutual rather than unilateral. Holley v. Grigg, 65 S.W.3d 289, 295 (Tex.App.-Eastland 2001, no pet.). “A mistake by only one party to an agreement, not known to or induced by acts of the other party[,] will not constitute grounds for relief.” Johnson v. Snell, 504 S.W.2d 397, 399 (Tex.1974). A unilateral mistake does not provide grounds for relief...