Goldman, Mark & Caroline v. Olmstead, Jeffrey & Summer, Sandra Hewett, NRT Texas, LLC
2013 Tex. App. LEXIS 13286
| Tex. App. | 2013Background
- Mark and Caroline Goldman contracted (Sept. 26, 2009) to buy the Olmsteads’ house for $810,000 but failed to close; parties signed a "clean" copy thereafter (Oct. 2009).
- Goldmans asserted defenses and third‑partied their real estate agent Sandra Hewett and broker NRT, alleging negligence, DTPA, fraud, breach of fiduciary duty, and negligent misrepresentation; Hewett counterclaimed for fraud against the Goldmans.
- The trial court granted Olmsteads partial summary judgment on breach, later awarded them $56,929.85 (carrying costs) plus $151,110.17 in attorney’s fees; trial court found Goldmans’ claims against Hewett/NRT failed and awarded Hewett/NRT $150,000 in fees under the contract.
- On appeal Goldmans challenged summary judgment, evidentiary rulings, amendment of pleadings, damages measure, expert disclosures, prevailing‑party fee awards, and failure to segregate fees.
- The court of appeals: affirmed liability ruling (no genuine fact issue on breach), reversed on damages (holding the proper measure precludes recovery of carrying costs where market value equals contract price) and reversed/remanded the attorney’s‑fees awards for segregation and related issues; otherwise affirmed.
Issues
| Issue | Plaintiff's Argument (Goldmans) | Defendant's Argument (Olmsteads / Hewett & NRT) | Held |
|---|---|---|---|
| 1. Summary judgment on breach / novation / contract enforceability | Contract was illegible/indefinite, sellers unnamed, void/voidable, financing contingency terminated contract, or October "clean" copy was a novation | Contract was enforceable; October copy was retyped, not a novation; financing email did not terminate contract | Affirmed: contract enforceable; no novation; summary judgment for Olmsteads stands on unchallenged grounds |
| 2. Measure of damages for seller after buyer breach | Trial court may award carrying costs (mortgage interest, taxes, utilities, insurance, maintenance) as damages | Proper measure is difference between contract price and market value at breach; Olmsteads’ market value equaled contract price so no damages | Reversed: carrying costs are not recoverable as monetary damages where seller elects damages; judgment rendered that Olmsteads recover nothing |
| 3. Amendment of pleadings (Rule 11) | Trial court erred allowing fifth amended petition on day of trial to add carrying‑cost damages contrary to Rule 11 agreement | Leave to amend was permissible to correct technical defects; trial court discretion | Not addressed on merits because damages award reversed; issue moot here |
| 4. Attorney’s fees — entitlement, prevailing party, and segregation | Goldmans: Hewett/NRT not prevailing parties; fees not segregated between recoverable/nonrecoverable claims; Olmsteads’ fees not segregated | Hewett/NRT defended and therefore prevailed under the contract; all parties sought fees; experts testified amounts | Mixed: Held Hewett/NRT may be prevailing parties under contract (fee entitlement survives), but fee awards to Olmsteads and Hewett/NRT are reversed and remanded for reconsideration/segregation because experts failed to segregate fees between recoverable and unrecoverable claims |
| 5. Expert disclosure for attorney‑fee testimony | Olmsteads/Hewett failed to disclose general substance of expert opinions | Disclosures identified attorneys who would testify on reasonableness of fees and basis; fees were ongoing, so no report expected | Overruled: trial court did not abuse discretion; testimony admissible (no unfair surprise) |
Key Cases Cited
- Travelers Ins. Co. v. Joachim, 315 S.W.3d 860 (Tex. 2010) (standard of review for summary judgment)
- Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546 (Tex. 1985) (movant’s burden on traditional summary judgment)
- Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (credit evidence favorable to nonmovant in summary judgment review)
- Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831 (Tex. 2000) (contract indefiniteness doctrine)
- Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (segregation requirement for attorney’s fees when claims mix recoverable and nonrecoverable fees)
- MBM Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660 (Tex. 2009) (American Rule and contractual/statutory exceptions for fee recovery)
- Intercontinental Grp. P’ship v. KB Home Lone Star L.P., 295 S.W.3d 650 (Tex. 2009) (no recovery under contract when not pleaded)
- Barry v. Jackson, 309 S.W.3d 135 (Tex. App.—Austin 2010) (analysis of proper damage measures and consequential damages in real estate breach)