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Click here for the full text of this decision FACTS:Lori and Michael Sherman were interested in buying a home listed for sale by Amy and Patrick Shields. Richard Elkowitz, an agent with Re/Max Westside Realtors, was the Shields’ listing agent. The Shields’ submitted a “Seller’s Disclosure Notice,” which identified cracks in the driveway as a known defect needing repair. The three-page notice, printed by the Texas Association of Realtors, included a disclaimer that it reflected the seller’s knowledge and was completed by the seller. It also included the notation that the “Listing Broker and Other Broker have relied on this notice as true and correct and have no reason to believe it to be false or inaccurate.” Under a provision in the notice that asked if there were any “lawsuits or other legal proceedings directly or indirectly affecting” the property, the Shields’ did not list anything. The Shermans bought the house in 1998. After moving in, the Shermans discovered various defects in the property, eventually learning that the Shieldses had sued the previous owner for failing to disclose those same defects. The Shermans filed suit against the Shieldses, Elkowitz and Re/Max for common law fraud, negligence, gross negligence and various violations of the Deceptive Trade Practices Act. They claimed that the Shieldses and Elkowitz should have disclosed the defects and the earlier lawsuit. Amy Shields testified that she and Elkowitz talked about whether to disclose the earlier lawsuit. She said Elkowitz asked her if she had repaired everything. She told him she had repaired everything but the driveway, and he said that she should just disclose the driveway. Amy also testified that Elkowitz knew that the settlement from the lawsuit was not enough to cover the costs of repairs. The Shermans won at trial against the Shieldses, but the trial court directed a verdict in favor of Elkowitz and Re/Max at the close of the Shermans’ case. HOLDING:Affirmed. The court first considers whether the defects were either misrepresented by or concealed in the seller’s disclosure. The court points out that the form the Shieldses filled out is substantially similar to the form prescribed in Property Code �5.008. Contrary to the Shermans’ assertion that the language about the listing broker and other broker having relied on the notice shows that Elkowitz knew about the defects, the court finds the language has the opposite effect. The notice twice states that the notice does not constitute warranties made by the seller or the seller’s agent. The statement that the broker has not reason to believe that the seller’s disclosures are false or inaccurate is not an affirmative representation by the broker of the property’s condition. The court considers the facts that Elkowitz knew of the earlier lawsuit and knew the Shields’ had not received enough money from the suit to recover repairs; that Elkowitz had been named in the lawsuit as a person with knowledge of the relevant facts. The court finds Elkowitz’s prior knowledge of the lawsuit, even in his conversation with Amy about whether to disclose it, was no evidence that he knew or was ever informed of the relevant specifics of that suit, nor does it raise a fact issue that he had knowledge of any defects alleged in the suit. Elkowitz’s knowledge of the shortcomings of the lawsuit’s settlement proceeds says nothing about his knowledge of the defects underlying the suit, the court finds. And the fact that Elkowitz was listed as a person with knowledge of relevant facts does not address whether he knew of the defects. The court also notes that Patrick Shields admitted that he did not contend that Elkowitz knew of defects and the property that had not been repaired by him and his wife. To determine whether Elkowitz and Re/Max should have disclosed the earlier lawsuit, the court compares the language of the notice with the language used in �5.008. The court notes that the language tracks the statute about suits directly or indirectly affecting the property, but also adds a narrowing language, asking the seller to detail whether a the lawsuits if any, are the result of condemnation, pending or threatened zoning or deed restrictions or other. The court finds the statute refers only to pending lawsuits. If the legislature had intended for prior lawsuits to be listed, it could have done so. Furthermore, at the start of the disclosure form, it states that the condition of the property is “as of the date signed by seller.” The court adds that interpreting the question to require old, non-pending lawsuits “injects an element of uncertainty not there if it is read to require only currently pending lawsuits.” OPINION:Fowler, J.; Yates, Hudson and Fowler, JJ.

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