Richard Uribe v. Briar-Ridge, LLC ( 2021 )

NUMBER 13-20-00167-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI – EDINBURG
RICHARD URIBE, Appellant,
v.
BRIAR-RIDGE, LLC, Appellee.
On appeal from the 197th District Court
of Cameron County, Texas.
MEMORANDUM OPINION
Before Chief Justice Contreras and Justices Benavides and Silva
Memorandum Opinion by Justice Benavides
In this commercial real estate dispute, the trial court granted a partial directed
verdict in favor of appellee Briar-Ridge, LLC1 on appellant Richard Uribe’s claims for
1 In its original answer and counterclaim, appellee alleged that it was misnamed in the petition and
that its proper name is Briar-Ridge, Inc., not Briar-Ridge, LLC. Uribe did not amend his petition to reflect
this purported error, so we will refer to appellee by the name contained in Uribe’s live pleading and the final
fraudulent inducement and statutory fraud. On appeal, Uribe contends that both claims
should have been submitted to the jury because they were supported by legally sufficient
evidence. We affirm.
I. BACKGROUND
A. The Lease
In July 2016, Uribe agreed to lease from Briar-Ridge a standalone commercial
building in San Benito, Texas for the purpose of opening a restaurant. As part of the
negotiated terms, Briar-Ridge agreed to contribute $40,000 towards an estimated
$79,877 in remodeling costs, abate the rent for five months, include an option to purchase,
and assume certain maintenance and repair obligations. In return, Uribe agreed to pay
the balance of the remodeling costs, pay $4,600 a month for sixty months, pay property
taxes and insurance premiums for the premises during the same term, and to assume
certain other maintenance and repair obligations. The lease commenced on August 1,
2016, the first payment was due on January 1, 2017, and the lease term expired on
December 31, 2021.
The commercial lease agreement, based on a form promulgated by the Texas
Association of Realtors, also contains the following provisions:
10. LEGAL COMPLIANCE:
....
C. [Briar-Ridge] does not represent or warrant that the leased premises or
Property conform to applicable restrictions, zoning ordinances, setback
lines, parking requirements, impervious ground cover ratio requirements,
and other matters that may relate to [Uribe]’s use. [Uribe] must satisfy itself
that the leased premises may be used as [Uribe] intends by independently
judgment.
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investigating all matters related to the use of the leased premises or
Property. [Uribe] agrees that it is not relying on any warranty or
representation made by [Briar-Ridge], [Briar-Ridge]’s agent, or any broker
concerning the use of the leased premises or Property.
....
13. MOVE-IN CONDITION: [Uribe] has inspected the leased premises and
accepts it in its present (as-is) condition unless expressly noted otherwise
in this lease or in an addendum. [Briar-Ridge] and any agent have made no
express or implied warranties as to the condition or permitted use of the
leased premises of Property.
The “as-is” provision is not modified by any other provision in the lease. The lease also
includes the following addendum: “[Briar-Ridge] and [Uribe] hereby agree and understand
that [Uribe] shall have the option to purchase this property on a mutually agreed to fair
market value prior to the termination of this lease provided [Uribe] gives [Briar-Ridge] 90
days[’] notice prior to the termination of the lease.”
B. Uribe Files Suit and Briar-Ridge Countersues
The contractor originally estimated that it would take “60 days to make repairs and
have [the] restaurant in working order and up to code.” The remodel took much longer
and cost much more than the original estimate, and the parties disagreed about who
should bear these costs. Uribe contended that during the remodel, he uncovered
undisclosed defects in the condition of the property that were structural in nature, and
therefore, under the terms of the lease, Briar-Ridge was responsible for these repairs.
Briar-Ridge countered that it had satisfied all its obligations under the lease and that Uribe
was responsible for completing the remodel, including the payment of any overages.
On June 21, 2017, Briar-Ridge sent Uribe a letter notifying him that he was in
default under the lease and demanding rent payment for the months of January,
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February, March, April, May, and June 2017. Uribe filed suit soon after, claiming breach
of contract, breach of the implied warranty of suitability, fraudulent inducement, statutory
fraud, negligent misrepresentation, estoppel, and seeking declaratory relief.
Briar-Ridge filed a general denial, asserting various affirmative defenses, including
the defense that Uribe leased the premises “as is.” Briar-Ridge also countersued for
breach of contract and declaratory relief.
C. The Trial
Uribe, forty-five years old at the time of trial, testified that he had worked primarily
in the restaurant industry since he was sixteen. After working cumulatively for thirteen to
fourteen years in the fast-food industry, rising to the position of general manager over
three Jack-in-the-Box locations, a proprietor asked him to be the general manager of a
local restaurant. Uribe, already considering opening his own restaurant at that point,
decided to accept the position so that he could learn how to run a small business, as
opposed to the corporate franchises he had managed in the past. As Uribe explained it,
he brought structure to the local restaurant, and in turn, the proprietor taught him how to
be an entrepreneur.
During his tenure as general manager, the restaurant opened a second location in
another city, and Uribe was heavily involved in the new enterprise: “So I did everything
from the banking to—to the purchase of the property, involved in the negotiation of the
property, buying the property.” Uribe was also involved in “the design of the building” at
the second location.
After managing the local restaurants for approximately fifteen years, Uribe decided
4
to open his own business. When looking at possible locations, Uribe said that potential
ownership of the building was an important consideration. He knew the property in
question had been a restaurant in the past and was vacant at the time. Uribe contacted
a real estate broker, Connie De La Garza, who acted as an intermediary between Uribe
and Briar-Ridge.
After Uribe and Briar-Ridge expressed mutual interest in reaching an agreement,
Uribe and his contractor met with Briar-Ridge’s president, Bill Weekly, at the location to
conduct a walk-through. Uribe explained that he told the contractor to “really look at it and
tell [him] what it needs . . . so [he] can get it opened.” In turn, the contractor provided
Uribe with a two-page “proposal for upgrades” that was attached to the lease as an
exhibit.
According to Uribe, Weekly told him during the walk-through that the property was
a “functioning restaurant.” However, Uribe also acknowledged that the property was “very
dated” and that many of the commercial grade appliances, like the exhaust hoods and
walk-in freezer, would need to be replaced. When asked what specifically he inspected
before signing the lease, Uribe responded, “Well, I mean, gas, you know, water, you
know, basic necessities to run it, electricity.”
[Attorney]: And so in that meeting where you reviewed the property, you
were able to see the parts of the building that you would need
fixed, correct?
[Uribe]: I saw cosmetic things that I would want to fix, you know, as a
cosmetic. But as a functioning, whether or not the water
turned on or not, or, you know—
Uribe also acknowledged that he was provided with a key to the building to
5
continue his inspection, but other than the initial two-hour walk-through with his contractor
and Weekly, he did not return to the building or have it professionally inspected before
signing the lease:
[Attorney]: Actually, weren’t you given a key where you could continue
to go in there day after day?
[Uribe]: Afterwards, yes.
[Attorney]: So you could have inspected for over the next week, if you
wanted to?
[Uribe]: Sure. Absolutely.
[Attorney]: Okay. You weren’t deprived of any opportunity to inspect.
You could inspect all you want; true?
[Uribe]: Correct.
Uribe said that, in exchange for remodeling the property, he initially asked for a
twelve-month rent abatement “[b]ecause that’s standard in real estate.” Briar-Ridge
counteroffered with a five-month rent abatement and a contribution of $40,000 towards
the $79,877 in estimated remodeling costs. Uribe testified that he also agreed to a higher
rent in exchange for Briar-Ridge assuming certain maintenance and repair obligations
that would normally fall to the tenant in a commercial lease. De La Garza prepared the
lease agreement in accordance with the terms agreed to by the parties.
Uribe testified that during the remodel, he discovered several defects in the
condition of the property that had not been disclosed by Briar-Ridge. The first “was a big
fire in the restaurant.” According to Uribe, he discovered fire damage after removing the
exhaust hoods, and at that point, he noticed “the trusses were burned, electrical was shot,
it was all burnt.” In his opinion, “[t]here’s no way I could have told you, or the contractor,
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anybody could have told you that there was a fire . . . before.” It was undisputed that
charring was visible on the rafters, less than four feet from the entrance to the attic. Uribe
said his contractor did go in the attic, but he was unsure whether the contractor used a
flashlight or “had a good look at it or not.”
Uribe also testified that a wall had to be completely replaced because it was
“warped” and “rotted from water damage.” According to Uribe, the water damage was due
to a leak in the roof and a leak in a water line that runs through the attic. There is no
evidence that Uribe had the roof inspected before signing the lease. Weekly testified that
the water damage was readily apparent during the walk-through, saying it looked as if
someone had mopped the wall and that “everybody could see that.” Uribe did not dispute
Weekly’s account.
Uribe said that as the remodel was nearing completion, he discovered an issue
with the plumbing when “the toilets wouldn’t flush.” Further investigation revealed a leak
in the plumbing and that the property’s sewer line was not connected to the city’s line;
instead, it was emptying into the grass at the front of the property. During cross-
examination, Uribe acknowledged that a provision in the lease provides that “Tenant
should determine if all necessary utilities are available to the leased premises and are
adequate for Tenant’s intended use.” There is no evidence that Uribe had a plumber
conduct an inspection before signing the lease.
Finally, Uribe also testified that the entire parking lot had to be replaced at a cost
of approximately $90,000. Uribe conceded that he and his contractor did not examine the
parking lot during the walk-through because it was dark outside.
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Uribe discussed his expectations about the condition of the property when he
signed the lease:
[N]othing has been maintained in the building. If I’d known that, it just would
have been different. But I had certain expectations of things working, and
they weren’t. And we’re talking about basic, basic things, not stuff that I want
because I wanted to make it look nice or I want it pretty. It needs to work.
When asked why he did not conduct a more thorough investigation, Uribe said he “relied
on” the reputation of the realtor and Briar-Ridge as “reputable” and “ethical.”
When asked how he reacted to the discovery of the defects and the need for
additional remodeling, Uribe said, “I was okay with it, because it’s—it’s—my
understanding, it’s a 40-year-old building, it’s not new construction.” He added, “I was
fully aware” that issues may arise. Uribe said he showed Weekly what he deemed to be
“structural” damage to the building and asked Briar-Ridge to pay for the additional work
but that Weekly refused. Uribe stated that he felt comfortable signing the lease, including
paying substantially more than the prior tenant, because, based on his understanding of
the agreement, Briar-Ridge accepted responsibility for repairing and maintaining any
structural problems with the building.
It was undisputed that the lease assigned certain repair and maintenance
obligations to Briar-Ridge, including “[f]oundation, exterior walls, roof, and other structural
components” and “[p]arking areas and walks.” The parties disagreed, however, about
when those obligations commenced. According to Briar-Ridge, they did not begin until
Uribe completed the buildout, and any structural issues that arose during the remodel
were Uribe’s responsibility. According to Uribe, Briar-Ridge was responsible for
maintaining and repairing these items from day one of the lease, regardless of whether
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the buildout was ongoing. Ultimately, this question was submitted to the jury by
agreement of the parties, and the jury found that it was the parties’ mutual intent that the
landlord’s repair obligations under the lease would begin after the remodeling of the
restaurant was complete. Based on this finding, the jury did not reach the question of
whether Briar-Ridge breached its obligation to maintain and repair the foundation, exterior
walls, roof, and other structural components. Uribe has not challenged the jury’s findings
on appeal.
Weekly testified that he never made any representation about whether the building
could function as a restaurant. Instead, Weekly claimed that he told Uribe that he had “no
idea what works and what doesn’t work.” He said the inclusion of the disclaimer-of-
reliance and “as is” provisions in the lease were “[v]ery important” to him “because [he]
could make no representations about the building.”
To aid Uribe in his remodeling efforts, Briar-Ridge returned Uribe’s first month’s
rent and deposit. Weekly said that Briar-Ridge contributed at least an additional
$68,756.47 above the $40,000 it agreed to contribute under the terms of the lease. This
amount included paying insurance premiums and property taxes that were Uribe’s
obligation under the lease. It was undisputed that after Briar-Ridge returned the first
month’s rent, Uribe never made another rent payment to Briar-Ridge, even after Uribe
opened his restaurant in August of 2018.2 Briar-Ridge’s bookkeeper testified that Uribe
2 In October 2018, the trial court ordered Uribe to pay monthly rent into the registry of the court
“until the trial of the merits in this cause.” The same order contains a trial setting for February 18, 2019.
After that date passed, Uribe stopped making payments into the registry of the court because he believed
he had satisfied his obligations under the order. The trial commenced in January 2020.
9
owed Briar-Ridge a total of $180,762.12 for unpaid rent, insurance premiums, and
property taxes.
D. The Directed Verdict
After both sides rested, the trial court announced that it was finding the “as is”
provision in the lease enforceable, and therefore, Uribe could not prove an essential
element of his fraud claims. Prior to the trial starting, the trial court declared the purchase
option unenforceable, explaining that it was nothing more than an “agreement to agree.”
None of Uribe’s fraud claims were submitted to the jury, only the parties’ respective
breach of contract claims.
E. The Judgment
The jury returned a verdict in favor of Briar-Ridge on its breach of contract claim
and against Uribe on his breach of contract claim, awarding Briar-Ridge $180,762.12 in
actual damages. The parties thereafter agreed to submit the question of attorney’s fees
to the trial court, and the court awarded Briar-Ridge $181,988.75 in attorney’s fees
through trial, as well as conditional attorney’s fees for successfully defending the
judgment on appeal. After entry of the judgment, this appeal ensued.
II. STANDARD OF REVIEW & APPLICABLE LAW
A motion for a directed verdict is a procedural device that asks the court to render
judgment without submitting the case to the jury because there is nothing for the jury to
decide. C.B. v. Tex. Dep’t of Fam. & Protective Serv., 440 S.W.3d 756, 769 (Tex. App.—
El Paso 2013, no pet.). A defendant is entitled to a directed verdict when there is no
evidence of a fact essential to the plaintiff’s claim or the evidence conclusively negates
10
the plaintiff’s right of recovery. Prudential Ins. Co. of Am. v. Financial Rev. Servs., 29
S.W.3d 74, 77 (Tex. 2000) (citing Latham v. Castillo, 972 S.W.2d 66, 67–68, 70–71 (Tex.
1998); Villegas v. Griffin Indus., 975 S.W.2d 745, 748–49 (Tex. App.—Corpus Christi–
Edinburg 1998, pet. denied)).
When reviewing a directed verdict, “our task, as an appellate court, is to determine
whether there is any evidence of probative force sufficient to raise a fact issue on the
material questions presented.” Daniels v. Allsup’s Convenience Stores, Inc., 604 S.W.3d
461, 465 (Tex. App.—Amarillo 2020, pet. denied) (citing Collora v. Navarro, 574 S.W.2d
65, 68 (Tex. 1978)). We consider all the evidence in the light most favorable to the party
against whom the verdict was directed and disregard all contrary evidence and
inferences. Id.; Encina P’ship v. Corenergy, L.L.C., 50 S.W.3d 66, 68 (Tex. App.—Corpus
Christi–Edinburg 2001, pet. denied). If we find that reasonable minds could differ as to
the truth of the controlling facts, then an issue of fact exists, and that issue should be
submitted to the jury. Daniels, 604 S.W.3d at 465. We are not bound by the movant’s
arguments or the trial court’s reasoning for granting the directed verdict; instead, we may
affirm the verdict on any ground supported by the record. Encina, 50 S.W.3d at 68.
“Fraudulent inducement is a species of common law fraud” that arises only in the
context of a contract: a person may not use a fraudulent misrepresentation to induce
another to enter a contract. Anderson v. Durant, 550 S.W.3d 605, 614 (Tex. 2018) (citing
Haase v. Glazner, 62 S.W.3d 795, 798 (Tex. 2001)). The basic elements of fraud must
be established as they relate to an agreement between the parties: (1) a material
misrepresentation, (2) made with knowledge of its falsity or asserted without knowledge
11
of its truth, (3) made with the intention that it should be acted on by the other party,
(4) which the party relied on, and (5) which caused injury. Id. (citing Zorrilla v. Aypco
Constr. II, LLC, 469 S.W.3d 143, 153 (Tex. 2015)). Actionable misrepresentations include
a failure to disclose material information where a legal duty to disclose such information
exists (i.e., fraud by nondisclosure) and a false promise made with a present intent not to
perform. Id. (citing Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc.,
960 S.W.2d 41, 48 (Tex. 1998) (op. on reh’g)); Bradford v. Vento, 48 S.W.3d 749, 755
(Tex. 2001).
The elements of statutory fraud are essentially the same as those of fraudulent
inducement, but the claim is specific to a contract involving real estate or stock, and the
plaintiff need not prove the defendant’s knowledge of falsity or recklessness to recover
actual damages. See TEX. BUS. & COM. CODE ANN. § 27.01(a)–(c). A lease agreement
with an option to purchase is a transaction involving real estate for purposes of statutory
fraud. Wise v. Pena, 552 S.W.2d 196, 198, 202 (Tex. App.—Corpus Christi–Edinburg
1977, writ dism’d) partially overruled on other grounds by Fortune Prod. Co. v. Conoco,
Inc., 52 S.W.3d 671, 678 (Tex. 2000).
III. FAILURE TO DISCLOSE
By his first issue, Uribe argues that there was legally sufficient evidence to support
his claim for fraudulent inducement based on Briar-Ridge’s failure to disclose material
facts about the condition of the property that were not discoverable by the exercise of
ordinary care and due diligence, or which a reasonable investigation and inquiry would
not have uncovered. See Smith v. Nat’l Resort Cmtys., Inc., 585 S.W.2d 655, 658 (Tex.
12
1979) (recognizing that “a seller of real estate is under a duty of disclosing material facts
which would not be discoverable by the exercise of ordinary care and diligence on the
part of the purchaser, or which a reasonable investigation and inquiry would not
uncover”). In particular, Uribe argues on appeal that Briar-Ridge failed to disclose
“structural deficiencies in the building[,] including those related to sewage, previous
structural fire damage, structural water damage, and [the] foundation.”
The trial court concluded that the “as is” provision in the lease negated the
causation element of Uribe’s fraudulent inducement claim as a matter of law. See
Prudential Ins. Co. of Am. v. Jefferson Assocs., 896 S.W.2d 156, 161 (Tex. 1995) (“A
valid ‘as is’ agreement, like the one in this case, prevents a buyer from holding a seller
liable if the thing sold turns out to be worth less than the price paid because it is impossible
for the buyer’s injury on account of this disparity to have been caused by the seller.”).
Uribe argues on appeal that the clause is unenforceable because Briar-Ridge induced
him to lease the property “as is” by fraudulently concealing material defects in the
condition of the property. Id. at 162 (“A buyer is not bound by an agreement to purchase
something ‘as is’ that he is induced to make because of a fraudulent representation or
concealment of information by the seller.”). There are other aspects of a transaction that
may make an “as is” agreement unenforceable, including disclaimer-of-reliance language
in the clause, how important the clause was to the bargain, and the relative bargaining
positions of the parties. Id.We need not address the issue of whether the “as is” clause is enforceable, though,
because the evidence in the record conclusively establishes that Uribe could have
13
discovered the defects by exercising ordinary care, namely, by conducting a reasonable
inspection of the property.3 See Barrow-Shaver Res. Co. v. Carrizo Oil & Gas, Inc., 590
S.W.3d 471, 497 (Tex. 2019) (“We recognize a long-standing principle that a ‘party
claiming fraud has a duty to use reasonable diligence in protecting his own affairs’—
specifically that ‘[i]n an arm’s-length transaction the defrauded party must exercise
ordinary care for the protection of his own interests and is charged with knowledge of all
facts which would have been discovered by a reasonably prudent person similarly
situated.’” (alteration in original) (quoting Thigpen v. Locke, 363 S.W.2d 247, 251 (Tex.
1962))); Italian Cowboy Partners v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 339 (Tex.
2011) (“The persistent odor problem did not appear until a layer of solidified grease was
removed from the grease trap, meaning that a reasonable inspection of the premises by
Italian Cowboy would not have revealed the problem .”).
There are several circumstances that inform our conclusion that Uribe did not
exercise ordinary care to protect his interests under the circumstances. “[A] plaintiff may
not ‘blindly rely on a representation by a defendant’ when the plaintiff’s knowledge,
experience, and background alert it to investigate the defendant’s representation before
acting in reliance on those representations.” Barrow-Shaver, 590 S.W.3d at 497 (quoting
JPMorgan Chase Bank, N.A. v. Orca Assets G.P., L.L.C., 546 S.W.3d 648, 654 (Tex.
3 At trial, Briar-Ridge vigorously denied any prior knowledge of the defects. See Prudential Ins. Co.
of Am. v. Jefferson Assocs., 896 S.W.2d 156, 162 (Tex. 1995) (“A seller has no duty to disclose facts he
does not know. . . . Nor is a seller liable for failing to disclose what he only should have known.” (citing
Robinson v. Preston Chrysler–Plymouth, Inc., 633 S.W.2d 500, 502 (Tex. 1982); Ozuna v. Delaney Realty,
Inc., 600 S.W.2d 780, 782 (Tex. 1980) (per curiam))). Uribe argues on appeal that there was sufficient
circumstantial evidence to raise a reasonable inference that Briar-Ridge was aware of the defects but
nonetheless remained deliberately silent. Because Uribe failed to present legally sufficient evidence of
another element of its fraudulent inducement claim, we do not reach this sub-issue. See TEX. R. APP. P.
47.1.
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2018)). Uribe acknowledged during his testimony that he was “fully aware” that the
building was “40 years old” before he signed the lease and that based on the building’s
age and his substantial experience managing restaurants, he expected repair and
maintenance issues to arise over the course of the lease. Uribe also acknowledged that,
unlike a residential lease, most repair and maintenance obligations fall to the tenant in
commercial leases. That was certainly the case here. Although Uribe negotiated some
concessions in this area, he was still responsible for repairing and maintaining fourteen
out of the eighteen designated categories in the lease, including plumbing systems,
electrical systems, and HVAC systems.
Additionally, between the monthly rent of $4,600 and the estimated monthly
expenses for taxes and insurance premiums of $1,226.23, Uribe committed himself to a
minimum obligation of $349,573.80 over the sixty-five-month term of the lease. 4 On
appeal, Uribe himself describes the length of the lease as “shocking.” Finally, regardless
of its eventual enforceability, the inclusion of an “as is” provision in a commercial lease
would put a prudent tenant on notice that a careful inspection of the premises is necessary
before signing the lease. See Gym-N-I Playgrounds, Inc. v. Snider, 220 S.W.3d 905, 914
(Tex. 2007) (“By agreeing to lease property ‘as is,’ a lessee agrees to make his own
appraisal of the bargain and accepts the risk that he may misjudge its value.” (citing
Prudential, 896 S.W.2d at 161)). In short, by agreeing to lease this premises under these
terms, Uribe exposed himself to considerable risks.
Despite these known risks, Uribe’s only “inspection” of the building occurred during
4 As previously mentioned, the rent was abated for the first five months of the lease; therefore,
($4,600 + $1,226.23) × 60 = $349,573.80.
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a two-hour walk-through with his contractor—at nighttime. He did not have the premises
professionally inspected, as commonly occurs in residential purchases where, like Uribe,
the buyer is making a significant financial commitment. See, e.g., Lesieur v. Fryar, 325
S.W.3d 242, 246 (Tex. App.—San Antonio 2010, pet. denied) (holding that causation and
reliance elements of fraud claim were conclusively defeated when buyer’s independently
obtained inspection report contained same information about foundation issues as report
sellers failed to disclose); Ritchey v. Pinnell, 324 S.W.3d 815, 819 (Tex. App.—Texarkana
2010, no pet.) (holding fraud claim was not precluded where buyer hired an inspector but
the inspection did not reveal the complained of defect). Whatever its form, to exercise
ordinary care, Uribe’s inspection had to be “reasonable” under the circumstances. Italian
Cowboy, 341 S.W.3d at 339. We conclude that it was not.
Although Uribe claimed during his testimony that several of the defects were
undiscoverable until he began remodeling the building, he also acknowledged that he and
his contractor were focused on cosmetic aspects of the building during the walk-through,
not its functionality. Regardless, Uribe’s conclusory statement is contrary to the evidence.
See Anderson v. Snider, 808 S.W.2d 54, 55 (Tex. 1991) (per curiam) (explaining
conclusory statements alone are not legally sufficient evidence). According to Uribe, he
first discovered the issue with the sewer line when “the toilets wouldn’t flush.” Obviously,
there was nothing preventing Uribe from testing the toilets during the walk-through. See
Robbins v. Capozzi, 100 S.W.3d 18, 25 (Tex. App.—Tyler 2002, no pet.) (holding seller
was entitled to summary judgment on buyer’s fraud claim because “[h]ad [buyer]
exercised ordinary care and due diligence by attempting to park her vehicle in either of
16
the garages before the closing date, she would have discovered that she could not turn
her vehicle into the garages”). And while nonfunctioning toilets may not have revealed the
full extent of any defects in the sewer line, testing them during the walk-through would
have put Uribe on notice that further investigation of the plumbing was necessary before
signing the lease. See Barrow-Shaver, 590 S.W.3d at 497. Similarly, Uribe admitted that
he did not inspect the parking lot because it was dark outside. This repair alone accounted
for approximately seventy-five percent of the additional costs above the contractor’s
estimate. Finally, it was undisputed that the water damage was visible during the walk-
through and that the fire damage was visible on rafters less than four feet from the
entrance to the attic. Uribe himself said that the wall was “warped” from the water damage,
and he could not say whether his contractor had a flashlight or “had a good look at [the
attic] or not.” Simply put, these were not latent defects; instead, as Uribe put it, these were
“basic, basic things” that needed to be repaired.
Uribe has never argued or presented evidence that Briar-Ridge frustrated his
ability to inspect the property. Cf. Jefferson Assocs., 896 S.W.2d at 162 (recognizing that
an “as is” provision is not enforceable where buyer’s ability to inspect the property is
impaired by the seller). To the contrary, Uribe acknowledged that he was provided with a
key to the building so that he could return in the daylight and continue his inspection. He
chose not to. When asked why he did not conduct a more thorough inspection, Uribe said
he “relied on” the reputation of the real estate broker and Briar-Ridge as “reputable” and
“ethical.” However, a party in an arm’s length transaction must exercise ordinary care for
the protection of his own interests, and any failure to do so will not be excused “by mere
17
confidence in the honesty and integrity of the other party.” Barrow-Shaver, 590 S.W.3d at
497 (quoting Thigpen, 363 S.W.2d at 251).
Having failed to exercise ordinary care under the circumstances, Uribe is charged
with knowledge of the defects in the condition of the premises. See id. Thus, as a matter
of law, Uribe cannot establish that he justifiably relied on Briar-Ridge’s failure to disclose
material defects in the condition of the property, and Briar-Ridge was entitled to a directed
verdict on this claim. See id. We overrule Uribe’s first issue.
IV. OPTION TO PURCHASE
Alternatively, Uribe argues that both his fraudulent inducement and statutory fraud
claims were supported by legally sufficient evidence that (1) his decision to enter the lease
was largely based on the agreement’s inclusion of the purchase option, and (2) Briar-
Ridge had no intention of selling the property to him when the lease was executed.
“[A] fraud claim can be based on a promise made with no intention of performing,
irrespective of whether the promise is later subsumed within a contract.” Formosa
Plastics, 960 S.W.2d at 46. However, “[w]ithout a binding agreement, there is no
detrimental reliance, and thus no fraudulent inducement claim.” Haase, 62 S.W.3d at 799.
An agreement to agree is unenforceable. Fischer v. CTMI, L.L.C., 479 S.W.3d 231, 237
(Tex. 2016) (“It is well settled law that when an agreement leaves material matters open
for future adjustment and agreement that never occur, it is not binding upon the parties
and merely constitutes an agreement to agree.” (quoting Fort Worth Indep. Sch. Dist. v.
City of Fort Worth, 22 S.W.3d 831, 846 (Tex. 2000))).
Here, the purchase option provides that Uribe “shall have the option to purchase
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this property on a mutually agreed to fair market value prior to the termination of this
lease.” (Emphasis added). The trial court declared the purchase option an unenforceable
agreement to agree, thereby foreclosing the purchase option as a basis for Uribe’s
fraudulent inducement or statutory fraud claims. See Haase, 62 S.W.3d at 799.
On appeal, Uribe has failed to address the enforceability of the purchase option.
Because Uribe has the burden to discredit each ground for Briar-Ridge’s directed verdict,
he has waived any error related to the trial court’s directed verdict on these claims, and
we must affirm the trial court’s ruling. See McKelvy v. Baker, 381 S.W.2d 59, 62 (Tex.
1964) (failing to address all grounds raised in directed-verdict motion waives complaint);
Guynn v. Corpus Christi Bank & Tr., 589 S.W.2d 764, 770 (Tex. App.—–Corpus Christi–
Edinburg 1979, writ dism’d) (same); see also Vawter v. Garvey, 786 S.W.2d 263, 264
(Tex. 1990) (per curiam) (concluding appellate court erred in reversing judgment on
grounds raised by court sua sponte); McCoy v. Rogers, 240 S.W.3d 267, 272 (Tex.
App.—Houston [1st Dist.] 2007, pet. denied) (stating, in context of summary judgment,
that a court “must affirm when a judgment may have been rendered, whether properly or
improperly, on a ground not challenged on appeal”). Uribe’s second issue is overruled.
V. CONCLUSION
We affirm the trial court’s judgment.
GINA M. BENAVIDES
Justice
Delivered and filed on the
18th day of November, 2021.
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