Dearl Flowers & Lois Flowers v. Atilano Zuniga & Gricelda Zuniga ( 2008 )

Opinion filed April 10, 2008

Opinion filed April 10, 2008

                                                                        In The

    Eleventh Court of Appeals

                                                                 ____________

                                                          No. 11-06-00144-CV

                                                    __________

                      DEARL FLOWERS & LOIS FLOWERS, Appellants

                                                             V.

                  ATILANO ZUNIGA & GRICELDA ZUNIGA, Appellees        

                                          On Appeal from the 70th District Court

                                                           Ector County, Texas

                                                Trial Court Cause No. A-117,462

                                             M E M O R A N D U M   O P I N I O N                   

Atilano and Gricelda Zuniga filed a declaratory judgment action seeking to have a real estate purchase agreement they entered into with Dearl and Lois^[1] Flowers declared an executory contract.  The trial court found that the real estate purchase agreement was an executory contract for the purchase of real property.  The trial court awarded the Zunigas $10,100 in damages.  We affirm.

The Zunigas and Flowers entered into a real estate purchase agreement (the agreement) in which the Zunigas were to purchase a home from the Flowers.  The Flowers agreed to finance the purchase of the property, and the terms of the agreement provided:

Buyer agrees to pay the total amount of $65,000.00 with the interest rate of 0%. Down payment of $6,500.00 payable as follows: $2,000.00 on date of signing and four payments of $1,125.00 beginning October 10, 2002 and monthly payments of $400.00 per month due and payable on the 10th day of each month beginning on November 10th, 2002 until the total of $65,000.00 is paid.

The record shows that the Zunigas paid the $6,500 down payment and also paid $3,600 in monthly payments.  On August 20, 2003, the Flowers sent the Zunigas a A3 day eviction notice@ due to noncompliance with the agreement by failing to maintain the insurance on the property.  The Zunigas complied with the notice and vacated the property.  The Zunigas filed a declaratory judgment seeking to have the agreement declared an executory contract pursuant to Tex. Prop. Code Ann. ch. 5(D) (Vernon 2004 & Supp. 2007).  A jury trial was held on April 20, 2006.  During the trial, the trial court determined that all issues before the jury were questions of law to be decided by the court.  The trial court dismissed the jury and found that the agreement was an executory contract.  The Flowers appeal.

In their first point of error, the Flowers argue that the trial court erred in finding that the agreement was an executory contract.  An executory contract is also known as a contract for deed.  Flores v. Millennium Interests, Ltd., 185 S.W.3d 427, 429 (Tex. 2005).  A contract for deed is an agreement by a seller to deliver a deed to property once certain conditions have been met.  Ward v. Malone, 115 S.W.3d 267, 270-71 (Tex. App.CCorpus Christi 2003, pet. denied); Graves v. Diehl, 958 S.W.2d 468, 470 (Tex. App.CHouston [14th Dist.] 1997, no pet.).  These contracts typically provide that, upon the making of a down payment, the buyer is entitled to immediate possession of the property; however, the seller is not obliged to deliver legal title to the property until the buyer pays the purchase price in full.  Ward, 115 S.W.3d at 271.  The purchase price is typically paid in installments over a course of several years.  Id.

The Flowers argue that the agreement was not an executory contract because the agreement provided for a closing after the Zunigas completed paying the down payment.  The agreement stated that A[c]losing shall take place upon the final tender of the $6,500.00 down payment.@  It is undisputed that the Zunigas paid the entire $6,500 down payment and that the parties never closed on the property.  The agreement states that the Zunigas will pay the balance of the down payment in four payments beginning October 10, 2002; however, the agreement does not state a payment schedule for the remaining payments.  The agreement does not specifically provide that the four payments are to be made monthly.  Rather, the agreement states that the first payment is due October 10, 2002, and that the monthly payment of $400 toward the purchase price is to be paid monthly.  The agreement does not provide a specific time frame in which the down payment is to be completed.  Therefore, there is no anticipated date for closing.  Because the agreement provides for certain conditions to be met at an unknown time before delivery of legal title, the trial court did not err in finding the agreement to be an executory contract.

The Flowers also argue that the trial court erred in awarding damages under Section 5.077. Section 5.077(a) provides that the seller Ashall provide the purchaser with an annual statement in January of each year for the term of the executory contract.@ The statement must include the amount paid under the contract, the remaining amount owed under the contract, the number of payments remaining under the contract, as well as insurance and tax information.  Section 5.077(b).  A seller who does not provide the annual statement is liable to the purchaser for Aliquidated damages in the amount of $250 a day for each day after January 31 that the seller fails to provide the purchaser with the statement . . . and reasonable attorney=s fees.@  Section 5.077(d).

The trial court did not award damages pursuant to Section 5.077.  The Zunigas did not request liquidated damages pursuant to the statute but, rather, sought attorney=s fees and the return of all money paid under the contract.

Section 5.070(a)(1) states that, before an executory contract is signed by the purchaser, the seller must provide the purchaser with a tax certificate.  The purchaser is entitled to cancel and rescind the executory contract and receive a full refund of all payments made to the seller if the seller fails to provide the tax certificate.  Section 5.070(b)(2).  The trial court heard testimony that the Flowers did not provide the tax certificate as required by Section 5.070(a)(1).  The trial court did not err in awarding the Zunigas $10,100 in damages.  The Flowers= first point of error is overruled.

In their second point of error, the Flowers argue that the trial court denied them due process of law in not allowing them to present their counterclaim for damage done to the property.  The record does not show that the Flowers requested to put on evidence relating to their counterclaim.  There is nothing in the record to show that the Flowers objected to the denial of their counterclaim.  Therefore, the Flowers have waived this issue for appellate review. Tex. R. App. P. 33.1(a).  The Flowers= second point of error is overruled.

The Zunigas bring two cross-issues arguing that the trial court erred in denying their request for attorney=s fees.  They first argue that the trial court should have awarded attorney=s fees pursuant to Section 5.077(d).

The decision to grant or deny attorney=s fees is within the trial court=s sound discretion.  Oake v. Collin County, 692 S.W.2d 454, 455 (Tex. 1985); Gage Van Horn & Assocs., Inc. v. Tatom, 26 S.W.3d 730, 734 (Tex. App.CEastland 2000), pet. denied, 87 S.W.3d 536 (Tex. 2002).  However, any fees granted must be reasonable and necessary, which are questions of fact, as well as equitable and just, which are questions of law.  Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998).

Unless authorized by statute or contract, a party is not entitled to recover attorney=s fees.   Dallas Cent. Appraisal Dist. v. Seven Inv. Co., 835 S.W.2d 75, 77 (Tex. 1992); Gage Van Horn, 26 S.W.3d at 734.   Additionally, if attorney=s fees are authorized for some, but not all, of a party=s claims, that party generally has the duty to segregate the recoverable attorney=s fees from the unrecoverable attorney=s fees.  Stewart Title Guar. Co. v. Sterling, 822 S.W.2d 1, 10‑11 (Tex. 1991); Gage Van Horn, 26 S.W.3d at 734.  A party is not required to segregate attorney's fees incurred in litigating different claims if the claims involved the same set of facts or circumstances and are Aintertwined to the point of being inseparable.@  Stewart Title Guar. Co., 822 S.W.2d at 11; Gage Van Horn, 26 S.W.3d at 734.

The trial court found that both parties failed to substantially perform their respective obligations under the contract.  The record shows that the Flowers did not comply with more than one of the provisions dealing with executory contracts.  The trial court did not specifically identify the provisions of the Property Code with which it found that the parties did not comply.  Section 5.061 dealing with executory contracts provides various remedies for violating the respective statutes.  The failure to provide some information required of executory contracts allows the buyer to rescind the contract and receive a refund of all payments made without awarding attorney=s fees.  See Section 5.070(b)(2). The trial court awarded the Zunigas as damages the refund of all payments made under the agreement. We do not find that the trial court abused its discretion in failing to award attorney=s fees pursuant to Section 5.077(d).

The Zunigas next argue that the trial court erred in refusing to award attorney=s fees pursuant to Tex. Civ. Prac. & Rem. Code Ann. ' 37.009 (Vernon 1997). Section 37.009 states that Athe court may award costs and reasonable and necessary attorney=s fees as are equitable and just.@  The decision to award attorney=s fees pursuant to Section 37.009 is within the discretion of the trial court.  Gage Van Horn, 26 S.W.3d at 734.  The trial court found that both parties failed to comply with their obligations under the contract.  The Property Code provided for the rescission of the contract and a return of all payments made. The trial court did not abuse its discretion in failing to award attorney=s fees pursuant to Section 37.009.  The Zunigas= cross-issues on appeal are overruled.

The judgment of the trial court is affirmed.

JIM R. WRIGHT

CHIEF JUSTICE

April 10, 2008

Panel consists of:  Wright, C.J.,

McCall, J., and Strange, J.

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^[1]We note that Lois Flowers=s name is also spelled Loyce Flowers.