Margaret Pleasant and Mark Bowles D/B/A Prudential Synergy Realtors v. Jason Bradford and Ashley Bradford ( 2008 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-07-00167-CV
Margaret Pleasant and Mark Bowles d/b/a Prudential Synergy Realtors, Appellants
v.
Jason Bradford and Ashley Bradford, Appellees
FROM THE DISTRICT COURT OF BELL COUNTY, 146TH JUDICIAL DISTRICT
NO. 212,458-B, HONORABLE RICK MORRIS, JUDGE PRESIDING
OPINION
This appeal involves a realtor’s representation with respect to the square footage of
improvements to a piece of residential real estate. The purchasers Jason and Ashley Bradford were
awarded damages at trial on their fraud, negligent misrepresentation, and Deceptive Trade Practices
Act claims based on an alleged overstatement by the realtor representing the sellers of the square
footage of the home. On appeal, the sellers’ realtor complains of (1) the jury finding that the
Bradfords acted in reliance on the realtor’s representation rather than on their own independent
investigation; (2) the trial court’s failure to submit a jury question on waiver of claims; and (3) the
insufficiency of the evidence presented at trial to support the amount awarded by the jury under the
benefit-of-the-bargain measure of damages. We affirm the judgment of the district court.
Factual and Procedural Background
Appellees Jason and Ashley Bradford, in early 2005, began shopping for their first
home. Jason Bradford was graduating from medical school and believed that he would be accepted
into the OB/GYN residency program at a hospital in Temple due to his existing relationships
within the program. His wife, Ashley Bradford, had been a leasing agent for six months in 2002
during which time she had held a real estate license, but was now a stay-at-home mother of their
three-month-old daughter. The Bradfords were looking for a house that would be affordable on the
salary of a medical resident, that was located near the hospital in Temple because at times Jason
would need to be on-call, and that was priced below-market so that they might make money on the
house in the event that they left Temple at the end of Jason’s four-year residency.
After viewing “around ten” houses for sale, the Bradfords were informed by their
realtor on January 25, 2005, of a house just placed on the market that appeared to match the
Bradfords’ search criteria. The house was owned by John and Beatrice Vasquez, who had hired
appellant Margaret Pleasant as their real estate agent to sell their house. Pleasant had received her
real estate license in 2004 and been hired as an independent contractor by appellant Mark Bowles
d/b/a Prudential Synergy Realtors, a real estate broker with offices in Temple, Waco, and Killeen.
Pleasant had listed the Vasquez home on the Multiple Listing Service (“MLS”) on
January 24. An MLS listing contains a variety of information about a house and notifies fellow
realtors that the house is for sale. Pleasant represented on the MLS listing that the “approximate
heating area” of the Vasquez home was 1,824 square feet, which figure she obtained from the
Bell County Appraisal District (“Bell CAD”). This figure turned out to be incorrect. With
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the asking price entered at $119,500, the MLS automatically calculated and listed the price per
square foot at $65.52. The source for a house’s square footage information was not a required field
on the MLS listing, although other realtors (along with Pleasant herself) testified at trial that it
was their standard practice to identify the source on a listing. The source for the Vasquez home’s
square footage was not included on the listing. Pleasant attributed this omission to a clerical error
by a secretary in the Temple office—an employee of Mark Bowles—who did the actual entry into
the MLS system of the information prepared by Pleasant.
There was a factual dispute at trial as to how the Bradfords received a copy of the
MLS listing. According to the Bradfords, there were several copies of the listing sheet inside the
house with a stack of Pleasant’s business cards during their visits to the house the afternoon of
January 25. According to Pleasant, she had removed all such copies from the house after the 11 a.m.
open house for realtors on January 25. At trial, appellants pointed to the fact that the MLS listing
page entered into evidence by the Bradfords stated “01/25/2005 04:00PM” in its footer as evidence
that the page came not from Pleasant’s open house but from the Bradfords’ realtor, Angela Bruce,
who testified she “would bet” she did give the Bradfords the sheet since it is her practice to give her
clients all the data sheets of a prospective house for her clients. Regardless of how they obtained the
MLS listing print-out for the Vasquez home, the Bradfords testified they were drawn to the listing’s
price per square foot because all the other houses they had viewed were priced between $75 and $80
per square foot. The Bradfords attributed the lower price per square foot to the sellers’ immediate
need to sell the house (John Vasquez had unexpectedly become unemployed) and to the condition
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of the home, which included rotting wood on a supporting column in the front, stained carpets, the
lack of a privacy fence in the back, and the lack of a garage door opener.
After viewing the Vasquez home, the Bradfords signed a form provided by their
realtor Angela Bruce that stated the following:
The Buyer is advised to verify all information important to him/her and to ask the
appropriate questions of the appropriate authorities himself/herself or through an
attorney with respect to important issues such as . . . size of structure . . . . Any
statements with respect to problems or with respect to the availability or existence
of any of these items which were made by the REALTOR and his/her associates were
made based on information given to the REALTOR by the Seller/Owner and/or
government agencies, and/or others, and there is no intention that the Buyer rely on
the statements of the REALTOR and his/her associates, and the Buyer is urged to
confirm any such statements on his/her own.
Having read the foregoing disclaimer, I/we, the prospective Buyer(s), by my/our
signature(s) below, state that I/we have not relied upon any statement given to me/us
by the REALTOR and/or his/her associates with regard to the property, and my/our
decision to make an offer on the property and to subsequently purchase the property
is based on my/our independent decision with or without legal counsel.
At some point after the Bradfords signed the form on the signature lines marked “Buyer,” the
Vasquezes signed the same form on the signature lines marked “Seller.”
After viewing the Vasquez home, Jason Bradford went on the Bell CAD website and
observed that the square footage for the home was listed at 1,824 square feet, the same amount as
on the MLS listing. He testified that his reason for going on the website was to check the property
tax amount on the property and not to confirm the square footage.
Shortly thereafter, the Bradfords made an offer on the house in the amount of
$118,000, which the Vasquezes accepted. The sales price was subsequently raised to $119,200, to
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account for an additional $1,200 for repairs on the house. Because Jason’s residency would not be
confirmed until March, the closing date was set at April 1, 2005. However, the Bradfords moved
into the house in late February, paying the Vasquezes’ March mortgage payment as rent. During that
time period, the Bradfords began making improvements to the house, including painting the interior
walls and replacing the flooring in the kitchen and master bathroom.
At the closing on April 1, the Bradfords learned that an appraisal had been done on
the house at the request of the lender bank and that they had the right to receive a copy. They
requested a copy of the lender’s appraisal and within five days after the closing they received their
copy of the appraisal, which listed the house’s living area at 1,571 square feet. This measurement
was 253 square feet less than that represented by the MLS listing, resulting in a price per square foot
of $76.07 rather than $65.52. The Bradfords contacted a lawyer and filed suit against appellants in
district court on August 25, 2005.1
The matter was tried to a jury in December 2006. The jury found that Pleasant acted
as an agent of Mark Bowles, that the square footage representation in the MLS listing constituted
fraud, negligent misrepresentation, and a false, misleading, or deceptive act or practice under the
Deceptive Trade Practices Act (“DTPA”) by both appellants, that the difference between the value
of the house as it had been represented and the value of the house as received was $2,621.08, and
that the difference between the purchase price and the value of the house as received was $5,000.
The district court awarded the Bradfords $2,621.08 in damages, plus attorneys’ fees, interest, and
1
The Vasquezes were also included as defendants, but the Bradfords nonsuited their claims
against the Vasquezes shortly before trial.
5
costs. On appeal, appellants raise the following issues: (1) there was legally and factually
insufficient evidence to support the jury finding that the Bradfords relied on the MLS listing’s
representation of square footage; (2) the court improperly refused to submit a jury question on
appellants’ affirmative defense of waiver; (3) for the damages award of $2,621.08, there was no
evidence at trial of the value as represented; and (4) such damages award was an arbitrary amount
with no support in the evidence.2
Reliance on the Misrepresentation
Appellants’ first point on appeal is that there is legally and factually insufficient
evidence to support the jury finding that the Bradfords relied on appellants’ representation of
the Vasquez home’s square footage. In reviewing a legal sufficiency challenge, we review
the evidence in the light favorable to the verdict, crediting favorable evidence if reasonable jurors
could and disregarding contrary evidence unless reasonable jurors could not. City of Keller
v. Wilson, 168 S.W.3d 802, 807 (Tex. 2005). We will sustain appellants’ complaint if the record
reveals: (1) the complete absence of a vital fact; (2) the court is barred by rules of law or evidence
from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to
prove a vital fact is no more than a mere scintilla; or (4) the evidence conclusively establishes the
opposite of the vital fact. See id. at 810. More than a scintilla of evidence exists if the evidence rises
2
Appellants also presented a fifth issue on appeal—that the trial court’s award to the
Bradfords of attorneys’ fees for an appeal by appellants to this Court should have been conditioned
on the Bradfords’ success in the appeal. Because we affirm the judgment of the trial court on all
other issues, and thus the Bradfords are successful in this appeal, we need not address appellants’
argument on the attorneys’ fees issue.
6
to a level that would enable reasonable and fair-minded people to differ in their conclusions.
Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004).
In reviewing a factual sufficiency challenge, we must consider and weigh all the
evidence in the record, both supporting and against the finding, to decide whether the verdict should
be set aside. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986). We set aside the verdict
for factual insufficiency only if the evidence that supports the jury’s finding is so contrary to the
overwhelming weight of the evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d
175, 176 (Tex. 1986).
Both Jason and Ashley Bradford testified that they had relied on the MLS
representation of square footage in purchasing the home. Jason testified that in his search for
“a great deal” he depended on a house’s price per square foot and, specifically in regard to the
Vasquez home, he relied on the MLS listing for the price per square foot. He further stated that the
price per square foot was his “biggest concern.” Likewise, Ashley testified that the low price per
square foot of the Vasquez home, as represented on the MLS listing, was important to her and was
“the overriding factor” in her decision to go through with the purchase of the house.
Despite the Bradfords’ testimony regarding reliance, appellants assert that the
evidence of reliance was legally and factually insufficient due to the following conduct by the
Bradford: (1) they verified with their realtor that appellants’ source for the home’s square footage
was the Bell CAD, visited the Bell CAD’s website, confirmed the square footage on the website, and
relied on that source of information; (2) they lived in the home for over 30 days before closing,
during which time they made repairs and had the opportunity to inspect any aspect of the house; and
7
(3) they signed a form provided by their realtor in which they disclaimed any reliance on statements
given by “the REALTOR.”
As appellants assert on appeal, Angela Bruce referred the Bradfords to the Bell CAD
website, and Jason Bradford accessed the website and observed that the square footage figure was
identical to the amount provided by appellants in the MLS listing. Furthermore, on cross
examination Ashley Bradford admitted that she relied on the Bell CAD’s square footage amount.
This admission was coupled, however, with her testimony that her reliance on the Bell CAD website
was no greater than her reliance on the MLS listing. We are, therefore, faced with the question of
whether a subsequent source for a misrepresentation precludes reliance on the initial source for the
misrepresentation.
Appellants rely on Bartlett v. Schmidt, 33 S.W.3d 35 (Tex. App.—Corpus Christi
2000, pet. denied), to argue that a subsequent source for a misrepresentation will negate reliance on
an earlier source. In Bartlett, a seller of real estate knowingly misrepresented to a buyer that a
property had no restrictions on commercial use when in fact it was restricted to residential use only.
See 33 S.W.3d at 36-37. The buyer obtained the same misinformation from the title company and
then confirmed his understanding of the lack of restrictions with his attorney. See id. at 37. After
buying the property and commencing construction for a shipbuilding enterprise, the buyer learned
of the existing restrictions on the property. See id. The court held that the buyer could not recover
for either fraud or negligent misrepresentation because reliance on representations is not present
where the plaintiff “conducts an independent investigation into the matters covered by the
representations, which is sufficient to inform him of the truth, and which is not interfered with or
8
rendered nugatory by any act of any other party.”3 Id. at 38 (quoting Marcus v. Kinabrew,
438 S.W.2d 431, 432 (Tex. Civ. App.—Tyler 1969, no writ)).
The Bradfords argue that the independent-investigation rule applied in Bartlett is
inapplicable here because Jason Bradford’s viewing of the Bell CAD’s website did not “inform him
of the truth.” We agree that the rule does not apply, but not for this reason.4 According to the court
3
The court in Bartlett held that the buyer could not recover for fraud or negligent
misrepresentation “as a matter of law.” Bartlett v. Schmidt, 38 S.W.3d 35, 38 (Tex. App.—Corpus
Christi 2000, pet. denied). Of course, the court was not stating that any evidence of an investigation
defeats an allegation of reliance, but rather that there was legally sufficient evidence of an
unimpaired investigation by the buyer sufficient to show a lack of reliance on the seller’s
representations.
4
A buyer’s investigation that reveals the falsity of a seller’s statement can negate subsequent
reliance on the statement. See, e.g., Camden Mach. & Tool, Inc. v. Cascade Co., 870 S.W.2d
304, 310-11 (Tex. App.—Fort Worth 1993, no writ). Bartlett stands for the proposition, however,
that an investigation that does not uncover the truth can also negate reliance on the statement.
See Bartlett, 33 S.W.3d at 38 (“[R]egardless of the result of his investigation, the buyer’s decision
to undertake such an investigation indicates that he . . . is not relying on the seller’s representations
about the property.”). It seems, then, that under Bartlett the phrase “which is sufficient to inform
him of the truth” describes the scope of the investigation rather than its effectiveness. We express
no opinion whether the Bradfords’ accessing the Bell CAD website in order to check the house’s
square footage would have been an investigation sufficient in scope to negate the element of reliance
because we find sufficient evidence that the Bradfords did not conduct such an investigation.
The Bradfords also argue that Bartlett is “out of line with Texas law.” In Warehouse
Associates Corporate Centre II, Inc. v. Celotex Corp., 192 S.W.3d 225, 244-45
(Tex. App.—Houston [14th Dist.] 2006, pet. filed), the Fourteenth Court of Appeals held that
Bartlett was contrary to the Texas Supreme Court’s opinion in Prudential Insurance Co.
v. Jefferson Associates, 896 S.W.2d 156 (Tex. 1995). In Prudential, the court held that an “as is”
agreement in an arms-length transaction negates the causation element in a fraud or DTPA claim by
the buyer unless the seller impaired the buyer’s inspection or the “as is” agreement itself was induced
by fraudulent representation or concealment. See 896 S.W.2d at 160-62. We need not address the
Warehouse Associates holding because we determine there was sufficient evidence that the rule in
Bartlett did not apply to the Bradfords’ actions. Therefore, we decline to consider whether, given
Prudential, a seller could avail himself of both the defense of the buyer’s independent investigation
and the defense of the buyer having assented to an “as is” agreement, or whether a buyer’s
independent investigation of a statement could demonstrate the buyer’s lack of reliance on that
statement in entering into an “as is” agreement.
9
in Bartlett, a person’s independent investigation of information can defeat an assertion of reliance
because the very decision to undertake an investigation can indicate that the person is not relying on
the information. See id. at 38 (“[R]egardless of the result of his investigation, the buyer’s decision
to undertake such an investigation indicates that he . . . is not relying on the seller’s representations
about the property.”).
Contrary to appellants’ assertion that the Bradfords verified with their realtor the
source of the MLS representation of square footage, Jason Bradford testified that Angela Bruce’s
referral to the Bell CAD website was not related to the square footage, but was in response to
his asking what else might be wrong with the house. According to his testimony, his concern was
that the low price was an indication of problems with the house. Although appellants claim that
Angela Bruce testified she “did, in fact, verify the source of the square footage for the Bradfords,”
her actual testimony was equivocal. Specifically, she stated that she “probably” went on the Bell
CAD website to confirm the square footage and that she did not remember whether she had given
Jason Bradford a printed copy from the website but “would have done it if he had asked me.” The
only other witness on this subject, Ashley Bradford, testified simply that she never asked Angela
Bruce to ascertain the source of the MLS representation of square footage.
Jason Bradford further testified that his subsequent access of the Bell CAD website
was not for the purpose of confirming the house’s square footage. Rather, he claimed that he
accessed the website to learn the property tax amount on the house, and his viewing of the
square footage on the website was merely incidental to such purpose. Regardless of the vitality
of the holding in Bartlett, this was not an “independent investigation” as contemplated by Bartlett.
10
Therefore, taking Jason’s testimony as true, neither his viewing of the Bell CAD website
nor Ashley’s professed partial reliance on that source would negate their continued reliance on
the MLS listing.
In order to negate the element of reliance, appellants next refer to the fact that the
Bradfords lived in the home for over thirty days before the closing, during which time they made
repairs and had the opportunity to inspect the square footage of the house. First, we note that the
Bradfords’ residence in the house prior to closing does not demonstrate an “independent
investigation” as described in Bartlett. Appellants do not argue, and no evidence was presented at
trial, that during the time of such residence the Bradfords measured the house or conducted any other
investigation of the square footage. Instead, appellants’ position appears to be that there was
opportunity for an independent investigation. As we have discussed, it is actually conducting an
independent investigation that can indicate the absence of reliance under Bartlett. See id. The mere
opportunity to conduct an investigation, without evidence that opportunity resulted in an actual
investigation, is insufficient for the rationale of Bartlett to apply. The opportunity to conduct an
independent investigation of a representation, without more, may be relevant to whether reliance on
that representation was reasonable. See Ortiz v. Collins, 203 S.W.3d 414, 421 (Tex. App.—Houston
[14th Dist.] 2006, pet. denied) (reliance must be “reasonable and justified” under fraud and negligent
misrepresentation claims). However, such an opportunity, by itself, does not negate reliance.
Appellants seem to imply that the Bradfords’ residence and repairs in the home impair
the reasonableness of their continued reliance on the MLS listing as of the closing. As to the
Bradfords’ residence, appellants focused on Ashley Bradford having had a real estate license in 2002
11
and suggest that this implies special expertise to determine the square footage of a house. However,
appellants’ own expert appraiser conceded that it was “kind of hard to tell” a house’s square footage,
that he could “hit it within, you know, I mean probably 4- or 500 feet real easy,” and that a house
appearing to contain 2,000 square feet might actually contain only 1,700 square feet. As to the
repairs, prior to the closing the Bradfords purchased tile and hired someone to install it in the kitchen
and master bathroom. However, there was no indication that prior to the closing the Bradfords
measured or replaced the flooring anywhere else in the house.
Appellants also argue that the disclaimer form signed by the Bradfords for their
realtor negates reliance in their circumstances. The form advises the Bradfords to verify information
that they consider important, including the home’s size, disclaims any reliance by the Bradfords on
statements by “the REALTOR,” and declares the home purchase to be the Bradfords’ “independent
decision.” Although the form does not define the term “REALTOR,” appellants insist that the term
includes both the buyer’s realtor (Angela Bruce) and the seller’s realtor (appellants), because the
form contained signature lines for both buyers and sellers and the Vasquezes signed the form on the
sellers’ signature lines. According to Jason and Ashley Bradford’s testimony, however, at the time
they signed the form, it did not yet contain the Vasquezes’ signatures. Furthermore, Jason Bradford
testified that his understanding in signing the form, which was on Angela Bruce’s real estate
company letterhead, was that “REALTOR” referred only to his own realtor, not to appellants.
Ashley Bradford testified to the same understanding and added that before signing the form they had
sought explanation from Angela Bruce, who clarified to them that the form referred specifically to
Angela Bruce and her real estate company but not to Margaret Pleasant and her real estate company.
12
In reviewing all the evidence, we find that the jury could reasonably conclude that the
Bradfords’ intention in obtaining information from their realtor and in accessing and viewing the
Bell CAD website was for purposes other than investigating the home’s square footage, that the
Bradfords’ residence and repairs in the home prior to closing was insufficient to inform them of the
home’s actual square footage or alert them to a reason to conduct an investigation, and that the
Bradfords’ disclaimer of reliance applied to their realtor’s statements but not to appellants’
statements. More than a scintilla of evidence exists to support the jury’s finding of reliance, and
such finding is not so contrary to the overwhelming weight and preponderance of the evidence as
to be clearly wrong and unjust. See Ford Motor Co., 135 S.W.3d at 601 (legal sufficiency); Cain,
709 S.W.2d at 176 (factual sufficiency). We, therefore, hold that the evidence was legally and
factually sufficient for the jury to conclude that the Bradfords relied on the MLS listing’s
representation of the Vasquez home’s square footage.
Jury Question Regarding Waiver
Appellants’ next point on appeal is that the trial court erred by failing to submit
an issue on waiver to the jury based on the disclaimer form. Texas rules of civil procedure
require a trial court to submit to the jury questions raised by the written pleadings and the evidence.
Tex. R. Civ. P. 278. Appellants raised the affirmative defense of waiver in their pleadings and
presented a written question on waiver during the charge conference, which was refused by the trial
court.5 “So long as matters are timely raised and properly requested as part of a trial court’s charge,
5
Appellants presented the following written question: “Do you find that the Bradfords
waived reliance upon any representation made by Defendants regarding the square footage of the
home? Waiver is an intentional surrender of a known right or intentional conduct inconsistent with
claiming the right. Answer ‘Yes’ or ‘No.’”
13
a judgment cannot be permitted to stand when a party is denied proper submission of a . . . vital
defensive issue raised by the pleadings and evidence.” Exxon Corp. v. Perez, 842 S.W.2d 629, 631
(Tex. 1992). A trial court may refuse to submit an issue only if no evidence exists to warrant its
submission. Elbaor v. Smith, 845 S.W.2d 240, 243 (Tex. 1992).
Waiver is an intentional relinquishment of a known right or intentional
conduct inconsistent with claiming that right. Sun Exploration & Prod. Co. v. Benton, 728 S.W.2d
35, 37 (Tex. 1987). A waivable right may spring from law or from contract. Tenneco Inc.
v. Enterprise Prods. Co., 925 S.W.2d 640, 643 (Tex. 1996).
Appellants argue that the form signed by the Bradfords, which disclaimed reliance
on any statements by “the REALTOR,” was a written waiver of reliance. However, none of the
cases cited by appellants stands for the proposition that reliance is a known right, springing from law
or from contract, that may be waived. See In re General Elec. Capital Corp., 203 S.W.3d 314
(Tex. 2006) (waiver of contractual right to non-jury trial); Jernigan v. Langley, 111 S.W.3d 153
(Tex. 2003) (waiver of statutory right to seek dismissal of lawsuit); Sun Exploration, 728 S.W.2d
at 37 (waiver of condition precedent to contract). A written waiver of a party’s causes of action can
support an affirmative defense of waiver against a fraud claim. See Roberts v. Whitfill, 191 S.W.3d
348, 358-59 (Tex. App.—Waco 2006, no pet.) (trial court erred in refusing to submit jury question
on defendant’s affirmative defense of waiver where a settlement agreement provision waived all
causes of action). A DTPA claim may also be waived, although there are specific statutory
requirements for the waiver to be valid and enforceable. See Tex. Bus. & Com. Code Ann. § 17.42
(West 2002). However, we find no evidence in the record that the Bradfords waived their right to
14
sue appellants or their right to assert a fraud, misrepresentation, or DTPA claim. To the extent the
Bradfords disclaimed reliance on any statements by appellants, they did not relinquish any right to
assert their causes of action. Rather, the disclaimer of reliance, if effective against appellants, could
“conclusively negate the element of reliance” in the Bradfords’ causes of action. Schlumberger Tech.
Corp. v. Swanson, 959 S.W.2d 171, 179-81 (Tex. 1997) (emphasis added); see Ortiz, 203 S.W.3d
at 421 (reliance is element of fraud and negligent misrepresentation claims); Tex. Bus. & Com. Code
Ann. § 17.50(a)(1) (West Supp. 2007) (reliance is element of the Bradfords’ DTPA claim). Such
a form does not act as a waiver of reliance.
Appellants’ submitted question regarding waiver essentially acted as an inferential
rebuttal. An inferential rebuttal question seeks to disprove the existence of an essential element
submitted in another question. Select Ins. Co. v. Boucher, 561 S.W.2d 474, 477 (Tex. 1978);
In re Nance, 143 S.W.3d 506, 513 n.7 (Tex. App.—Austin 2004, no pet.) (“Inferential rebuttal issues
attempt to disprove a claim by establishing the truth of a positive factual theory that is inconsistent
with some factual element of the ground of recovery.”). That is precisely what appellants sought to
accomplish with their waiver question. Appellants’ theory of waiver was an attempt to negate the
Bradfords’ reliance, which was included as an element in each of the jury questions for the
Bradfords’ claims of fraud, misrepresentation, and violation of the DTPA. According to the Texas
rules of civil procedure: “Inferential rebuttal questions shall not be submitted in the charge.”
Tex. R. Civ. P. 277. Appellants’ submitted question regarding waiver was an inferential rebuttal
question. Consequently, it was prohibited by Texas Rule of Civil Procedure 277.
15
It is worth noting that appellants do not complain of the trial judge’s refusal to submit
a jury instruction that would have informed the jury of the disclaimer form’s impact on the element
of reliance in each of the Bradfords’ claims, in the event the jury determined that the term
“REALTOR” encompassed Pleasant and her real estate company. See City of Houston v. Levingston,
221 S.W.3d 204, 237-38 (Tex. App.—Houston [1st Dist.] 2006, no pet.) (finding jury instruction
rather than separate jury question to be proper where the defense acted to negate the causation
element of the plaintiff’s cause of action); Columbia Rio Grande Reg’l Healthcare, L.P. v. Hawley,
188 S.W.3d 838, 859 (Tex. App.—Corpus Christi 2006, pet. granted) (new and independent cause,
which can negate the causation element in a negligence claim, “is an inferential rebuttal defense that
may be submitted to the jury as an instruction but not as a special issue”); Mayes v. Stewart,
11 S.W.3d 440, 455 (Tex. App.—Houston [14th Dist.] 2000, pet. denied) (discussing a proposed jury
instruction on a factual issue by which defendant sought to negate the element of reliance in a fraud
claim); Weitzul Constr., Inc. v. Outdoor Environs, 849 S.W.2d 359, 365 (Tex. App.—Dallas 1993,
writ denied) (“The proper method to submit an inferential rebuttal issue is by instruction, not by
question.”). Instead, appellants submitted a proposed jury question, which was an improper
inferential rebuttal question. Therefore, the trial court’s exclusion of appellants’ question on waiver
from the jury charge was proper.6
6
Appellants also argue that the Bradfords’ conduct other than signing the
disclaimer—verifying with their realtor that the source for the home’s square footage was the
Bell CAD, observing the square footage misinformation on the Bell CAD website and relying on that
source of information, and living in the home for over 30 days before closing—was inconsistent with
“claiming a right of reliance” and warranted submission to the jury of their question based on
implied waiver. See Jernigan v. Langley, 111 S.W.3d 153, 156 (Tex. 2003) (“[F]or implied waiver
to be found through a party’s actions, intent must be clearly demonstrated by the surrounding facts
and circumstances.”). We reject this argument for the same reason that we reject appellants’
argument concerning the disclaimer form—appellants’ jury question was an improper inferential
rebuttal question.
16
Benefit-of-the-Bargain Damages
Appellants’ remaining points on appeal relate to the amount awarded by the jury
under the benefit-of-the-bargain measure of damages.
Appellants assert that the Bradfords failed to introduce any evidence of the value of
the house as represented. The jury awarded the Bradfords $2,621.08 in “benefit-of-the-bargain”
damages. Benefit-of-the-bargain damages are the difference, at the time of the sale, between the
value as represented (the value of the house if it had contained 1,824 square feet) and the value as
received (the value of the house given its actual square footage). See Arthur Andersen & Co.
v. Perry Equip. Corp., 945 S.W.2d 812, 817 (Tex. 1997). Appellants do not dispute that evidence
of the value as received was introduced: the Bradfords’ expert appraised the home at $111,000
(after two earlier appraisals of $114,500 and $117,000), the appraisal that alerted the Bradfords to
the square footage misrepresentation gave the home a value of $119,500, and appellants’ expert
appraised the home at $122,500. However, the Bradfords never introduced a specific appraised
value of the house that assumed it did in fact contain 1,824 square feet.
The Fort Worth Court of Appeals was faced with a similar situation in Matheus
v. Sasser, 164 S.W.3d 453 (Tex. App.—Fort Worth 2005, no pet.). In Matheus, the plaintiff
purchased a home in reliance on an MLS listing sheet stating the house had 4,218 square feet. See
164 S.W.3d at 456-57. However, the seller’s real estate agents had overstated the square footage by
625 square feet, which the plaintiff learned after the closing from the appraisal performed at the
request of his mortgage company. See id. The court of appeals held that, unlike here, the plaintiff
failed to produce evidence on the value of the house as received, but prior to reaching this holding,
17
the court addressed the realtors’ argument that the plaintiff failed to offer any evidence on the
value as represented. See id. at 462-63. The court disagreed with the realtors, concluding that the
“price agreed on by the parties is evidence of the property’s fair market value as represented.” Id.
at 462. We also conclude that the purchase price agreed to by the Bradfords and appellants, at a time
when both parties believed the house contained 1,824 square feet, is evidence of the house’s value
as represented. See Ford Motor Co. v. Cooper, 125 S.W.3d 794, 799 (Tex. App.—Texarkana 2004,
no pet.); Barraza v. Koliba, 933 S.W.2d 164, 169 (Tex. App.—San Antonio 1996, writ denied);
Chrysler Corp. v. Schuenemann, 618 S.W.2d 799, 805 (Tex. Civ. App.—Houston [1st Dist.] 1981,
writ ref’d n.r.e.). The Bradfords presented undisputed evidence of both the agreed price of $118,000
and the subsequent increase to $119,200 in order to cover initial repairs. Therefore, we find that the
Bradfords introduced legally sufficient evidence on the value of the home as represented.
Appellants’ real problem with the damage evidence is not that there was not
evidence of the value as represented. Rather, it is that the jury did not adhere to that evidence and,
thus, that the damages award is not supported by the evidence. In addition to the jury question on
benefit-of-the-bargain damages, the court submitted a jury question on “out-of-pocket” damages,
which are the difference at the time of the sale between the value the buyer paid and the value as
received. See Arthur Andersen, 945 S.W.2d at 817. Because the jury’s answer of $5,000 is not
identical to its benefit-of-the-bargain award of $2,621.08, it is apparent that the jury did not, in fact,
conclude that the value as represented equaled the purchase price. Given this fact, and the specificity
of the damages figure with no readily apparent source from the record, appellants assert that the
jury’s award of damages under the benefit-of-the-bargain measure of damages was arbitrary.
18
The legal sufficiency test is inapplicable here. We have previously held that
“evidence corresponding to the precise amount found by the jury is not essential” in order to
withstand a legal-sufficiency challenge. Carrow v. Bayliner Marine Corp., 781 S.W.2d 691, 695
(Tex. App.—Austin 1989, no writ). As we have already concluded that the Bradfords introduced
some evidence of both the value as represented and the value as received, appellants must rely on a
factual-sufficiency challenge in order to successfully attack the jury award for benefit-of-the-bargain
damages. See id.
So long as a rational basis for the calculation of damages exists, a jury’s finding will
not be disregarded merely because its reasoning in arriving at its figure may be unclear. McMillin
v. State Farm Lloyds, 180 S.W.3d 183, 201-02 (Tex. App.—Austin 2005, pet. denied). Conversely,
a jury cannot arbitrarily award an amount neither authorized nor supported by the evidence presented
at trial. Mills v. Jackson, 711 S.W.2d 427, 434 (Tex. App.—Fort Worth 1986, no writ). Appellants
rely on our opinion in First State Bank v. Keilman, 851 S.W.2d 914 (Tex. App.—Austin 1993,
writ denied), to argue that the jury’s award was arbitrary. In Keilman, in connection with a usury
claim, the opposing parties provided conflicting methods for calculating the amount of unauthorized
interest. See 851 S.W.2d at 929-30. The debtor claimed that the entire sum of $12,669.92 in a
demand letter was interest, $7,161.44 of which was unauthorized ($5,508.48 was past due). The
lender introduced evidence that the $12,669.92 figure consisted of $12,500 in principal and $169.92
in interest, none of which was unauthorized. See id. at 930. The jury found an amount in between
those figures—$360. We concluded that the jury “pulled its answer out of a hat,” and therefore, the
evidence was factually insufficient to support the jury’s finding. Id. at 931.
19
Central to our conclusion in Keilman was the fact that the “evidence presented by
both the [parties] provided a relatively precise method for calculating unauthorized interest.” Id.
We have distinguished Keilman in subsequent opinions where the evidence supports a range of
damage options rather than an either-or situation. See McMillin, 180 S.W.3d at 202-03; Mayberry
v. Texas Dep’t of Agric., 948 S.W.2d 312, 317 (Tex. App.—Austin 1997, writ denied). Other courts
have done the same. See Formosa Plastics Corp. v. Kajima Int’l, Inc., 216 S.W.3d 436, 454-55
(Tex. App.—Corpus Christi 2006, pet. denied); City of Houston v. Harris County Outdoor Adver.
Ass’n, 879 S.W.2d 322, 335 n.5 (Tex. App.—Houston [14th Dist.] 1994, writ denied). Thus, while
appellants are correct that a jury award is not per se rational simply because it falls in between
the figures presented by expert testimony, neither is a damages award per se arbitrary because it
does not match up precisely with figures presented in expert testimony. See Parallax Corp.
v. City of El Paso, 910 S.W.2d 86, 91-92 (Tex. App.—El Paso 1995, writ denied) (jury can depart
from expert valuations if other evidence presented at trial is sufficient for the jury to do so).
This was not a case in which there were only certain figures that the jury could select
in making the damages award. The jury heard five different appraisals for the value of the home as
received: $111,000, $114,500, $117,000, $119,500, and $122,500. The jury also heard two different
purchase prices, which were evidence of the value of the home as represented: the accepted offer
of $118,000 and the final contract price of $119,200. In addition, the jury may have determined or
adjusted its award based on square footage valuations. The jury was presented with different
amounts of the square footage of the home as received: 1,567 square feet according to the
Bradfords’ expert witness’s appraisal, 1,571 square feet according to the lender bank’s pre-closing
20
appraisal, and 1,597 square feet according to appellants’ expert witness’s appraisal. This enabled
three different starting points for a comparison between the house as received and the house with its
represented 1,824 square feet. The jury was also presented with two separate dollar-per-square-foot
adjustment amounts used by the expert witnesses in appraising the Vasquez home based on sales of
homes with higher or lower square footage amounts. The Bradfords’ expert witness testified to an
adjustment of $46.67 per square foot, whereas appellants’ expert witness used an adjustment of only
$20 per square foot.7 Finally, we note that the jury may have taken into consideration the price-per-
square-foot amounts of the Vasquez home and comparable houses sold in the area. The MLS listing
offered the Vasquez house at a price per square foot of $65.52. The Bradfords testified that the other
houses they had looked at had prices per square foot in the $75 to $80 range. Altogether, the five
7
Appellants point out that these adjustment values were presented to the jury solely for
purposes of the expert witnesses explaining or defending their appraisals. However, just as we
concluded that the home’s purchase price was evidence of the home’s value as represented even if no
testimony actually identified it as such, we consider the experts’ home appraisal adjustments based
on square footage differences to be evidence applicable to benefit-of-the-bargain damages even if
no testimony identified them as such. In this regard, we note that the Bradfords’ counsel during
closing argument asked the jury to use the $46.67 figure to determine the benefit-of-the-bargain
damages.
Also, we recognize that the Fort Worth Court of Appeals in Matheus held that it was
improper to determine benefit-of-the-bargain damages for a home sale—where price is not
negotiated on a per-unit basis—by multiplying the price per square foot as represented (the purchase
price divided by the misrepresented square footage) by the difference between the square footage as
represented and the square footage as received. See Matheus v. Sasser, 164 S.W.3d 453, 460-62
(Tex. App.—Fort Worth 2005, no pet.). We do not consider Matheus’s holding to be applicable to
the figures we are citing because, rather than the represented price per square foot from the home
purchase, we refer to an appraiser’s price-per-square-foot adjustment, which is intended to be used
to adjust home values based on differences in square footage.
21
appraisals of the Vasquez home entered into evidence used ten comparable home sales, each with
separate prices per square foot ranging from $69.48 to $82.45.
Based on all of the above evidence, we find that this was not a case in which the jury
only had distinct damages figures to choose from or in which there were no variables involved in
applying a predetermined formula. See Mayberry, 948 S.W.2d at 317. The evidence presented
the jury with a range of possible reasonable values. $2,621.08 was within the range of damage
amounts supported by the evidence. See Gulf States Utils. Co. v. Low, 79 S.W.3d 561, 566
(Tex. 2002) (“In determining damages, the jury has discretion to award damages within the range
of evidence presented at trial.”). The evidence was legally and factually sufficient to support the
jury’s finding of $2,621.08 for benefit-of-the-bargain damages.
Conclusion
We hold that the trial court’s refusal to submit a question to the jury on the issue of
waiver was proper. We also hold that the evidence was legally and factually sufficient to support
the jury’s findings on the element of reliance and on the amount of benefit-of-the-bargain damages
owed to the Bradfords by appellants. We affirm the judgment of the district court.
__________________________________________
G. Alan Waldrop, Justice
Before Chief Justice Law, Justices Waldrop and Henson
Affirmed
Filed: June 26, 2008
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