Fabio LaBrada and Kerri LaBrada v. Jim Griffith and Kathy Griffith--Appeal from County Court at Law of Wise County

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State: Texas

Court: Texas Northern District Court

Docket No: 10-05-00183-CV

Case Date: 04/26/2006

Plaintiff: Fabio LaBrada and Kerri LaBrada

Defendant: Jim Griffith and Kathy Griffith--Appeal from County Court at Law of Wise County

Preview:Fabio LaBrada and Kerri LaBrada v. Jim Griffith and Kathy Griffith--Appeal from County Court at Law of Wise County
IN THE TENTH COURT OF APPEALS

No. 10-05-00183-CV Fabio LaBrada and Kerri LaBrada, Appellants v. Jim Griffith and Kathy Griffith, Appellees

From the County Court at Law Wise County, Texas Trial Court No. 2683 MEMORANDUM Opinion

Fabio and Kerri LaBrada entered into a Farm and Ranch Contract on a Texas Real Estate Commission form for the purchase of a rural home and ten acres in Wise County for $185,000 from Jim and Kathy Griffith. The contract had been prepared by the LaBradas real estate agent and presented to the Griffiths.[1] Two provisions in the contract specifically relate to the parties dispute over whether a $5,000 payment is a non-refundable deposit or refundable earnest money. Paragraph 11, the Special Provisions paragraph, has two relevant provisions that were typed in by the LaBradas agent: (1) Property must appraise for full purchase price or purchase price must be renegotiated or contract is null and void & earnest monies returned to buyer. . . . (3) $5000.00 earnest monies will be refunded to buyer at closing, & will not be refunded if sale does not close. Paragraph 5 provides in pertinent part: 5. EARNEST MONEY: Buyer shall deposit $5,000.00 as non-refundable deposit with Seller . . . The term non-refundable deposit is typed above the term earnest money, which is stricken through. All four parties initialed this change, which was made by the Griffiths real estate lawyer, who testified he made this change at this place in the contract to clarify the special provision language that the $5,000 was to be held as a non-refundable
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deposit, not as earnest money, and because that was the critical place where it was defined.[2] The LaBradas were pre-approved for a $185,000 mortgage. Their mortgage lender hired Jim Rollins, a Dallas appraiser, to appraise the property. He did not submit a formal appraisal to avoid billing the expense of a written appraisal; instead, he telephoned the mortgage lender and Kerri, telling them that he did not believe the property would appraise for more than $152,000 and that it would not appraise for $185,000. The LaBradas informed the Griffiths about Rollins s opinion, and Fabio agreed with the Griffiths suggestion that an appraiser more familiar with Wise County appraise the property. Ronald Hickman appraised the property at $187,000. The LaBradas were happy with the Hickman appraisal, for which the Griffiths paid $400. The contract called for the LaBradas to pay for the appraisal; the Griffiths testified that Fabio said he would pay for it. However, the LaBradas mortgage application was denied because the Hickman appraisal was unacceptable to their mortgage lender. The LaBradas did not apply with any other mortgage lenders, and no renegotiation of the price, except for an apparently facetious inquiry if the Griffiths would accept $152,000. The LaBradas moved out and soon purchased a house and some land for $192,000. After making some minor improvements (enclosing the carport with tin siding and adding on an 8x10 closet on a porch, at a cost of about $1,500), the Griffiths sold the property (but without the road exclusivity) to another buyer about eight months later for $185,000. After the Griffiths refused to return the $5,000 deposit, this lawsuit followed. After a bench trial, the trial court found that the sum was a non-refundable deposit, allowed the Griffiths to keep it, and awarded them $1,000 in additional damages, $5,000 in attorney s fees, and $3,500 in contingent appellate attorney s fees.[3] Raising three issues, the LaBradas appeal. We will modify the judgment and affirm it as modified. The LaBradas first issue asserts that the trial court incorrectly interpreted the contract in concluding that the $5,000 payment was a non-refundable deposit, rather than earnest money. They argue that it was earnest money and that they are entitled to its return under the contract s provision for its refund if they could not obtain financing. The construction of a written contract, including the parties true intent, whether the contract is ambiguous, and the rights and obligations under the contract, are questions of law reviewed de novo. Fox v. Parker, 98 S.W.3d 713, 719 (Tex. App. Waco 2003, pet. denied). The court also views the contract in light of the circumstances present when the contract was entered. See National Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). When the parties disagree over the meaning of an unambiguous contract, the court must determine the parties intent from the agreement itself, not from the parties present interpretation. Sun Oil Co. v. Madeley, 626 S.W.2d 726, 731-32 (Tex. 1981). Each part of the contract is considered against all other parts to determine its meaning, and we presume the parties intended every part to have some effect. Heritage Resources, Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). We agree with the trial court s conclusion that the $5,000 payment was a non-refundable deposit, rather than traditional earnest money. Paragraph 11(1) plainly provides that the $5,000 (described here as earnest monies ) would be returned only if (a) the property did not appraise for $185,000 and (b) the price was not renegotiated. It is undisputed that, after paragraph 11(1) had been drafted, all of the parties agreed to change paragraph 5 s designation of the $5,000 payment from an earnest money deposit to a non-refundable deposit.[4] When there is a conflict between two provisions, the specific provision controls over the general provision. Ostrowski v. Ivanhoe Property Owners Improvement Ass n, 38 S.W.3d 248, 254 (Tex. App. Texarkana 2001, pet. denied). More importantly, to the extent that added provisions conflict with a form s provisions, the added provisions must be given effect over the form s provisions. McCreary v. Bay Area Bank & Trust, 68 S.W.3d 727, 732 (Tex. App. Houston [14th Dist.] 2001, pet. dism d). The rationale for this rule is that the added provisions are the immediate language and terms selected by the parties themselves as setting forth their intentions, while the form is intended for general use without reference to particular objects and aims.[5] Id. We overrule the first issue. In their second issue, the LaBradas argue that the evidence is legally and factually insufficient to support the trial court s finding that Hickman s appraisal satisfied the special provision that would allow the Griffiths to keep the $5,000 if the property appraised for the full purchase price.[6] It is not disputed that the LaBradas agreed with having a second appraisal done, that one (Hickman s) was done, and that the LaBradas were happy with it Fabio testified he thought it

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was legitimate. Rollins, the first appraiser, testified that the Hickman appraisal was legitimate but that he disagreed with it because its comparables were not close enough in square footage. He also criticized it because an appraisal apprentice, rather than Hickman, had done significant work on the appraisal, but Hickman had signed it, and because he thought the acreage value was too high. Hickman s $187,000 appraisal was in evidence, as was evidence of the Griffiths subsequent sale of the same property to other purchasers for $185,000 (with minor improvements that Rollins said increased the value less than $10,000, but without road exclusivity, which Rollins conceded was of some value). Rollins agreed that this subsequent sale could serve as a comparable. The evidence is legally and factually sufficient to support the trial court s implied finding that the Hickman appraisal satisfied the contract s special provision. The LaBradas second issue is overruled. In their third issue, the LaBradas complain of the trial court s award of attorney s fees and $1,000 in additional damages to the Griffiths. A prevailing party cannot recover attorney s fees from an opposing party unless permitted by statute or a contract between the parties. Holland v. Wal-Mart Stores, Inc., 1 S.W.3d 91, 95 (Tex. 1999). The contract provided for the recovery of reasonable attorney s fees to the prevailing party in any legal proceeding brought under or with respect to the transaction. . . . Whether in defense to the LaBradas claim for the $5,000 or on their counterclaim to keep it, the Griffiths prevailed. The trial court properly awarded them attorney s fees of $5,000, and the Griffiths are entitled to an additional $3,500 in appellate attorney s fees. The general rule for measuring damages for breach of contract is just compensation for the loss or damage actually sustained. Stewart v. Basey, 150 Tex. 666, 245 S.W.2d 484, 486 (1952). A claimant generally is entitled to all actual damages necessary to put it in the same economic position that it would have been in had the contract not been breached. Abraxas Pet. Corp. v. Hornburg, 20 S.W.3d 741, 761 (Tex. App. El Paso 2000, no pet.). The contract called for the LaBradas to pay for the appraisal. It is undisputed that the LaBradas wanted a second appraisal, that Hickman did an appraisal, and that the Griffiths not the LaBradas paid the $400 appraisal fee.[7] But the $600 listing fee that the Griffiths paid before they ever met the LaBradas cannot have resulted from the contract breach, and the Griffiths position is that the $5,000 non-refundable deposit was to compensate them for taking the property off the market. We overrule in part and sustain in part the LaBradas third issue. We modify the trial court s judgment to award actual damages to the Griffiths of $400. Because the Griffiths have been successful in this appeal, they are entitled to recover an additional attorney s fee of $3,500 from the LaBradas. As modified, the judgment is affirmed. BILL VANCE Justice Before Chief Justice Gray, Justice Vance, and Justice Reyna (Chief Justice Gray concurs in the judgment only with a note. Based on the issues as briefed and argued on appeal, I concur in the judgment. ) Affirmed as modified Opinion delivered and filed April 26, 2006 [CV06]

[1] At the same time, the LaBradas leased the property for a year from the Griffiths for $1,500 a month. The Griffiths had built the house for the sole purpose of reselling it with acreage.

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[2] Because the Griffiths were taking the property off the market during the LaBradas lease in contemplation of the LaBradas purchase, the purpose of the deposit was to compensate the Griffiths if the sale did not close. Kathy discussed this purpose with Fabio and the LaBradas agent. Fabio paid the $5,000 deposit to the Griffiths and authorized them to cash it. Fabio and Kathy both signed a receipt for the $5,000 deposit with the notation nonrefundable. Because the LaBradas expected the deal to go through, they also expected to receive the $5,000 deposit as a credit at closing. [3] In a letter ruling, the trial court found that Hickman s appraisal satisfied the contract s condition that made the $5,000 deposit non-refundable, that the $5,000 payment was a non-refundable deposit, rather than earnest money, and that if other money had been tendered as earnest money, the contract s other provisions on the return of earnest money would have applied. [4] The change to paragraph 5 made clearer the parties intent that the payment be a nonrefundable deposit controlled by paragraph 11(1), rather than handled as traditional earnest money. This construction also comports with the circumstances surrounding the contract: the Griffiths took the property off the market; Fabio signed a receipt describing the $5,000 payment as non-refundable and told the Griffiths they could cash it, which they did; and the $5,000 was not tendered to a traditional escrow agent, such as a title company, and held in escrow pending the closing. [5] Because the parties subsequently clarified that the $5,000 payment was a non-refundable deposit, the result is that no earnest money was paid and paragraph 11(1) controlled whether the deposit would be returned. We therefore reject the LaBradas reliance on the form s numerous references to earnest money and their contention that the form s earnest money provisions conflict with the parties added paragraphs. [6] In reviewing the legal sufficiency of the evidence, we view the evidence in the light favorable to the verdict, crediting favorable evidence if a reasonable factfinder could, and disregarding contrary evidence unless a reasonable factfinder could not. City of Keller v. Wilson, 168 S.W.3d 802, 807 (Tex. 2005). There is legally insufficient evidence or no evidence of a vital fact when (a) there is a complete absence of evidence of a vital fact; (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (c) the evidence offered to prove a vital fact is no more than a mere scintilla; or (d) the evidence conclusively establishes the opposite of the vital fact. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). More than a scintilla of evidence exists when the evidence supporting the finding, as a whole, rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. Havner, 953 S.W.2d at 711 (quoting Burroughs Wellcome Co. v. Crye, 907 S.W.2d 497, 499 (Tex. 1995)). When the party without the burden of proof at trial complains of the factual sufficiency of the evidence to support an adverse express or implied finding, we must consider and weigh all of the evidence, not just the evidence that supports the verdict. Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex. 1998); Checker Bag Co. v. Washington, 27 S.W.3d 625, 633 (Tex. App. Waco 2000, pet. denied). We will set aside the finding only if it is so contrary to the overwhelming weight of the evidence that the finding is clearly wrong and unjust. Ellis, 971 S.W.2d at 407. Reversal can occur because the finding was based on weak or insufficient evidence or because the proponent's proof, although adequate if taken alone, is overwhelmed by the opponent's contrary proof. Checker Bag, 27 S.W.3d at 633. [7] Other than a specific claim for the $5,000 deposit in their counterclaim, the Griffiths only generally prayed for all further relief to which they were entitled. The Griffiths additional damages, to the extent legally recoverable, were thus tried by consent. See National Convenience Stores, Inc. v. Erevia, 73 S.W.3d 518, 522 (Tex. App. Houston [1st Dist.] 2002, pet. denied).

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