On Appeal from the 402nd Judicial District Court Wood County
The appellant purchased a house from the appellees pursuant to a sales agreement that provided that the appellant accepted the property “as was.” Prior to sale, the appellee had remodeled the house, doing most of the electrical work and all of the plumbing work himself without obtaining permits from the city. After the sale had been completed, the appellant was unable to obtain a certificate of occupancy from the city because the appellee’s electrical and plumbing work failed to comply with building code requirements, and the appellant was barred by municipal authorities from occupying the house. The appellant filed suit against the appellees for statutory real estate fraud, alleging that the appellees’ failure to disclose in the statutorily mandated seller’s disclosure notice that the repairs to the house made by the appellee violated building code requirements amounted to misrepresentation or concealment of a material fact. The appellees moved for summary judgment, arguing that the “as was” clause in the purchase agreement defeated the reliance element of statutory real estate fraud. The trial court granted the appellees’ motion for summary judgment and entered a take-nothing judgment. The appellate court noted that the appellee’s application for a fence permit supported the appellant’s argument that at the time the disclosure notice was made, the appellees knew the building ordinances, rules, and regulations, and would have been aware that their disclosure representation regarding the repairs, permits and compliance with building codes was false. A genuine issue of material fact existed if more than a scintilla of evidence establishing the existence of the challenged element was produced. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). Although the evidence presented by the appellant was just barely more than a scintilla, the court determined that it was enough to create a fact question. Accordingly, the trial court's judgment was reversed and remanded.