X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:Appellants, James and Patricia Chapman, sellers under a real estate sales contract, appeal the trial court’s judgment in favor of the buyers, appellees Doug and Eleanor Olbrich. Based on a unanimous jury’s findings, the trial court exercised its equitable powers to award the Olbrichs specific performance on their contract to purchase real property from the Chapmans. The Chapmans owned three lots in the Timberlakes Estate subdivision. In 1999, the Olbrichs purchased a lot adjacent to the Chapmans’ property. On Easter Sunday of 2002, the Olbrichs learned the Chapmans were interested in selling their property and moving elsewhere. On April 3, 2002, the Olbrichs, interested in purchasing one of the Chapmans’ three lots, wrote the Chapmans a letter offering to purchase Lot 21 for $20,000 cash. The Chapmans stated that they had no immediate plans to do anything other than keep the lot vacant. After the Chapmans expressed interest in selling Lot 21, Olbrich (Doug) drew up an earnest money contract. Both parties signed this contract, and the Olbrichs deposited $1,000 as earnest money with the North American Title Company. On May 3, 2002, the Olbrichs had a survey done on Lot 21 and on their own property. The survey revealed that the boundary line for Lot 21 went through the pool on the Chapmans’ property. On May 5, 2002, Doug notified Patricia of this discovery. Doug testified that at this point Patricia indicated that she intended to remove the swimming pool, which was overgrown with wisteria and lily pads, because it was an eyesore inhibiting the sale of the Chapmans’ house. When Patricia told Doug that it would be very expensive to remove the pool, he suggested that she remove the pool’s top coping, punch holes in its bottom to prevent buoyancy if rain water soaked into the ground, and fill the pool with dirt. Patricia responded that she would deal with the pool but did not know how long it would take. Although the closing was set for May 25, Doug suggested they extend the closing date to give the Chapmans time to resolve the pool issue. Doug drew up an addendum (dated May 14, 2002) to the contract, extending the closing date to June 9, 2002. On Friday, June 7, Doug approached Patricia and suggested that they close that same afternoon. Patricia responded that she needed more time to finish the pool project, to which Doug replied that she could have all the time she needed. Doug observed workers with backhoes and large equipment working on the pool until June 23, 2002, after which he saw nobody at the Chapmans’ house. Doug tried to call the Chapmans, but no one answered. In the meantime, Patricia contracted to sell all three lots to Jorge and Yuwandee Medrano. Medrano testified that he became familiar with the property in June 2002, when he visited a neighbor of the Chapmans. Medrano did not go into the Chapmans’ home, but he talked to Patricia, who was outside mowing the yard. Medrano testified that Patricia informed him she could not sell him the house until after July 1, 2002. On July 2, 2002, Medrano returned with his wife to look at the property and thereafter entered into a contract to buy all three lots from the Chapmans. On July 15, Doug spoke to Patricia. Unaware of the Chapmans’ intention to sell the property to someone else, Doug inquired about the progress on the pool. Patricia informed Doug that “[t]he contract is over” and that the Chapmans had contracted to sell the property to somebody else. Doug immediately called his attorney and then wrote to the title company, stating that the Olbrichs intended to enforce their contract by specific performance: “Pursuant to the Contract of Sale between James and Patricia Chapman, the Sellers, and Doug and Eleanor Olbrich, the Buyers, for Lot 21, Block 8, Section 1, Timberlake Estates, Harris County, Texas, the Property, dated April 19, 2002, and Addendum No. 1, dated May 1, 2002, the Sellers have failed to comply with the contract as agreed and are in default. As provided under Section 15, DEFAULT, (a)”the Buyer may enforce specific performance, seek such other relief as may be provided by law, or both’. [sic] Buyer intends to enforce specific performance of the contract and wishes to proceed with immediate closing.” The Olbrichs sent the Chapmans a copy of this letter. The next day, July 16, 2002, the Olbrichs wrote the Chapmans, informing them that they were claiming specific performance and demanding an immediate closing, after which the Olbrichs would contract for the removal of the swimming pool “with reimbursement to [the Olbrichs] of associated expenses and any attorney fees.” The Olbrichs offered to meet with the Chapmans for mediation within two days; after that time, the Olbrichs planned to file a lis pendens on the property. The Olbrichs received no reply to the July 15 and 16 letters. On July 20, 2002, Eleanor Olbrich wrote Patricia and offered to purchase Lot 21, reduced in size by 3,325 square feet so that the swimming pool would be entirely located on the Chapmans’ property, for the original $20,000 purchase price. The Chapmans failed to respond to the July 20 offer. On July 22, 2002, the Olbrichs sued the Chapmans for breach of contract, seeking specific performance and attorney’s fees. In their petition, the Olbrichs stated that they “here [sic] tender their performance and undertake to do such things and pay such amounts as required by the contract, the law, and the orders of this Court. They offer to do equity.” On July 26, 2002, the Olbrichs filed a notice of lis pendens on the property. The Chapmans filed a counterclaim in which they sought a declaratory judgment that the contract was terminated or expired on or before June 9, 2002. They also sought attorney’s fees. The Chapmans and the Medranos closed on the sale of the Chapmans’ property on Aug. 8 or 9, 2002. At the time of trial, the Medranos still owned, and were living on, the property they purchased from the Chapmans. The jury found that the Chapmans had failed to comply with their agreement to sell Lot 21 to the Olbrichs and that their failure to comply was not excused. The jury awarded attorney’s fees totaling $55,000 for trial and appeals. In its final judgment, the trial court awarded the Olbrichs specific performance and ordered that Lot 21 be vested in the Olbrichs and “divested from any person claiming the same since July 1, 2002, including the Defendants, James and Patricia Chapman, and their purchasers of Lot 21 . . . Jorge S. and Yuwadee S. Medrano.” The trial court also ordered the Chapmans to sign a release of escrow to North American Title Company in favor of the Olbrichs for release of their $1,000 earnest money. The trial court further ordered that the $20,000 purchase price of Lot 21 be applied to the Olbrichs’ award of attorney’s fees and that the Olbrichs recover the remaining $35,000 from the Chapmans, with the amounts for appeals credited if no appeal were filed in the court of appeals or the Texas Supreme Court. HOLDING:Affirmed. The language of Paragraph 6.B of the contract unambiguously allows the Olbrichs to object to a defect or encumbrance to title shown on a survey furnished to a third-party lender at the buyers’ expense, within five days of the Olbrichs’ receipt thereof. The transaction between the Chapmans and the Olbrichs did not involve a third-party lender. Thus, Paragraph 6.B. does not apply. To accept the Chapmans’ argument that “Addendum No. 1 ” was an objection under Paragraph 6.B. would require that the contract be read as though it provided the Olbrichs the option to object upon receipt of a survey other than the survey referenced in the contract. The court interprets words in a contract according to their usual grammatical meaning, and construes the contract as written. Under the contract’s plain language, the Olbrichs could not have objected under Paragraph 6.B. and thus the “ cure” language upon which the Chapmans rely is inapplicable. The evidence is legally sufficient to support a finding that the Olbrichs were excused from tendering performance because of the Chapmans’ repudiation of the contract. The Chapmans contend that the trial court erred in excluding defendants’ Exhibit 5 from evidence. The record before the court of appeals does not contain defendants’ Exhibit 5 the document that the Chapmans assert should have been admitted into evidence or read to the jury. The Chapmans’ offer of proof does not make it clear that the responses read into the record are the same as those that were contained in defendants’ Exhibit 5. Further, the offer of proof does not describe these responses specifically enough to allow this court to determine whether the trial court erred. Therefore, the Chapmans have not preserved error. Instead of requiring the Olbrichs to pay the Chapmans the purchase price of the land, the trial court deducted the purchase price of the land from the attorney’s fees award. The Chapmans contend that this offset was made in error because the property was part of their protected “homestead.” The court disagrees and concludes that the Chapmans failed to establish that this property was their homestead. OPINION:Frost, J.; Hudson, Frost and Seymore, J.J. (Hudson, J., dissenting).

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.