Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:At a foreclosure sale, Andrew Collins and Tim Welsh bought property that had once been owned by Robert Ortiz. The buyers sought possession of the property through a forcible detainer, but were unable to secure possession. Represented by an attorney, Jerel Twyman, Collins and Welsh brought another forcible detainer action nearly two months after the foreclosure sale. While this action was pending, the buyers, Twyman and Ortiz tried to negotiate a settlement. Ortiz claimed the Collins agreed on his and Walsh’s behalf to sell Ortiz the property for $10,000 more than they had paid for it. Ortiz claimed Twyman told Ortiz’s attorney that he would wait 15 days before executing a writ of possession to allow the deal to be finalized. Ortiz did not attend the trial on the detainer action because, he says, he was relying on the buyers’ and Twyman’s representations. The buyers did not prepare a contract for sale; Ortiz did, but neither Collins nor Walsh signed it. Fifteen days after the trial, Twyman executed a writ of possession, giving Ortiz 24 hours to vacate the property. Ortiz sued Twyman, Collins and Welsh at the end of December 2002. He alleged claims of fraud, negligent misrepresentation, promissory estoppel, breach of contract, violation of the Deceptive Trade Practices-Consumer Protection Act and conspiracy to defraud and violate the DTPA. Between December 2002 and May 2003, when the defendants moved for summary judgment, Ortiz had three live pleadings. After the defendants moved for summary judgment, but before the trial court ruled on the motion, Ortiz filed two more supplemental petitions adding new claims. On July 22, the trial court granted the defendants’ motion as to the claims moved on (the pre-May 2003 claims), and in September, issued a clarifying order saying that the July 22 order was interlocutory. The defendants again moved for summary judgment in October 2003. Before the trial court ruled on these motions on Aug. 12, 2004, Ortiz had filed another petition that included supposedly new claims and that added a fourth defendant who was never served. The trial court granted the defendants’ motion Aug. 12. On Oct. 21, 2004, the trial court granted Ortiz’s motion to nonsuit the fourth defendant, adding to this order, “All claims of all parties in the cause have been disposed and are appealable.” Ortiz filed his notice of appeal Nov. 19. HOLDING:Affirmed in part; reversed and remanded in part. The court first addresses the defendants’ cross-issue on appeal, which is that Ortiz’s notice of appeal was filed more than 30 days after the trial court’s final judgment Aug. 12. The court notes that in each of the defendants’ motions for summary judgment, a claim was made for recovery of attorneys’ fees under the DTPA for Ortiz’s filing a groundless claim. The court agrees with Ortiz that such a request amounts to a counterclaim, and that counterclaim was not addressed until Oct. 21, when the trial court specified that its order disposed of all claims from all parties. Ortiz’s notice of appeal Nov. 19 was therefore timely. The court next discusses whether summary judgment was proper on Ortiz’s claims of fraud, negligent misrepresentation, promissory estoppel and conspiracy to defraud. The court agrees with the defendants that all of these claims involve an element of reliance on representations made by Collins, Welsh and/or Twyman, and reliance on any of their statements in the negotiations while the forcible detainer action was pending was unreasonable because the statements were made in the adversarial context of litigation. Even assuming the parties entered into an oral agreement to sell Ortiz the property, the mere existence of that agreement did not align all of the parties’ interests and remove the adversarial nature of the relationship, particularly considering that the written details had not been worked out. Consequently, as a matter of law, any reliance by Ortiz on statements made by the defendants during the negotiation process was unjustified and unreasonable. The court next addresses the breach-of-contract claims. Ortiz claims that the promise to prepare a contract is sufficient to raise a fact issue on his promissory estoppel defense, but as previously discussed, Ortiz’s promissory estoppel claim fails as a matter of law because, given their adversarial relationship, his reliance on any statements made by the defendants, including the alleged promise to prepare a contract, was unjustified. The court further notes that Ortiz admittedly did not rely on because he eventually drafted a contract himself. On Ortiz’s DTPA and conspiracy to violate DTPA claims, the court agrees that Ortiz was not a consumer of Twyman’s services. The transaction at issue was not the purchase of a house; it was an attempted settlement of a forcible detainer action. Negotiations to settle do not constitute consumer transaction. Summary judgment as to Twyman was therefore proper. Summary judgment as to Welsh and Collins on these claims, however, was improper because their motion for summary judgment did not comply with Texas Rule of Civil Procedure 166a(i). The motion did not identify which elements of Ortiz’s DTPA claims they were challenging. OPINION:Yates, J.; Yates and Anderson, JJ., and Mirabal, SJ. CONCURRENCE:Mirabal, J. The concurrence agrees with the result, but not the reasoning of the section holding that Ortiz’s reliance on the defendants’ statements was unreasonable. “This case involves a common situation. The parties to the litigation entered into settlement negotiations. Both sides were represented by counsel. The parties did not reduce their negotiated agreement, if any, to writing. Thus, the agreement, if any, was not enforceable and could not reasonably have been relied on by either side.”

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.