Samuel Adam Aflalo v. Devin Lamar Harris and Meghan Theresa Harris
05-16-01472-CV
Tex. App.Dec 13, 2018Background
- Aflalo (seller) and the Harrises (buyers) signed a residential sales contract requiring the seller to deliver a Seller’s Disclosure Notice “pursuant to § 5.008, Texas Property Code” within three days; buyers could terminate if they did not receive the notice or within seven days after receiving it.
- Aflalo provided a completed TAR-1406 disclosure form the same day, checking that the property had present flood insurance and was in a floodway, and adding a handwritten explanation, but he did not attach the TAR-1414 informational form that the TAR-1406 directed sellers to attach when present flood insurance was checked.
- The Harrises’ agent requested the missing TAR-1414; Aflalo did not respond. One day before closing, the Harrises terminated the contract under the disclosure provision and sought return of earnest money.
- Aflalo relisted the property, sued the Harrises for specific performance, and argued he complied with § 5.008 because neither the statute nor the contract expressly required TAR-1414; TAR-1414 was provided only later in discovery.
- The majority held Aflalo’s completed TAR-1406 satisfied the contract/statute and that failure to attach TAR-1414 did not constitute a breach justifying termination; the dissent (Justice Francis) argues the trial court correctly found Aflalo’s omission was a breach permitting termination.
Issues
| Issue | Plaintiff's Argument (Aflalo) | Defendant's Argument (Harrises) | Held (dissent view) |
|---|---|---|---|
| Whether seller’s failure to attach TAR-1414 to TAR-1406 constituted noncompliance with the contract’s Seller’s Disclosure Notice requirement | TAR-1406 answered and explained as statute requires; § 5.008 or contract does not explicitly require TAR-1414, so omission is immaterial | Seller chose TAR-1406 which expressly directed attachment of TAR-1414 when present flood insurance is checked; failing to attach means seller did not provide the disclosure the contract required | Dissent: omission was breach of contract permitting buyer termination |
| Whether a disclosure form that ‘‘exceeds’’ statutory minimum can impose additional contractual obligations | Seller: forms cannot broaden statutory obligations; only the statute’s minimum controls | Harrises: parties adopted a disclosure form that included additional, mandatory attachments, thus contracting for more than statutory minimum | Dissent: parties’ chosen form is part of the contract and its extra attachment requirement is enforceable |
| Whether a completed TAR-1406 without TAR-1414 was a completed ‘‘Notice’’ under § 5.008 and the contract | Seller: TAR-1406 responses and handwritten explanation satisfy the ‘‘notice prescribed by § 5.008’’ or its substantial equivalent | Harrises: the TAR-1406 as completed required TAR-1414; absent attachment, notice was incomplete | Dissent: notice incomplete; seller failed to timely perform |
| Whether buyers’ termination for incomplete disclosure was untimely and thus a breach by buyers | Seller: buyers’ termination was untimely because the statutory/contractual notice was provided | Harrises: termination was timely because disclosure delivered lacked the TAR-1414 the contract-form required | Dissent: termination was timely; Harrises entitled to refund and summary judgment was proper |
Key Cases Cited
- Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex. 2005) (contract interpretation: court seeks parties’ intent from the instrument and harmonizes provisions)
- Ogden v. Dickinson State Bank, 662 S.W.2d 330 (Tex. 1983) (presumption that parties intend every clause to have effect)
- Heritage Resources, Inc. v. NationsBank, 939 S.W.2d 118 (Tex. 1996) (unambiguous contract enforced as written)
- Sherman v. Elkowitz, 130 S.W.3d 316 (Tex. App.—Houston [14th Dist.] 2004, no pet.) (use of varying disclosure forms cannot reduce statutory disclosure obligations; form variance analyzed against statute)