Valerie Gray and 1720 W. Anderson Lane, L.L.C. v. Catherine Galvan
03-19-00773-CV
| Tex. App. | Oct 29, 2021Background
- Homeowner Catherine Galvan, facing foreclosure, met property manager Valerie Gray who obtained her signatures on forms on October 16, 2017, including an amendment that listed 1720 W. Anderson Lane, LLC (1720) as buyer and changed the sales price and closing terms.
- The Amendment provided a cash portion ($78,000), financing ($70,000), closing payment of $3,000 to seller, and a $75,000 retainer payable to seller upon vacatur; 1720 later paid off the mortgage and liens and recorded a warranty deed.
- Galvan alleged Gray promised future benefits (placing Galvan in a new house, paying bills, preventing eviction) to induce her to sign; she claimed fraud and negligent misrepresentation.
- A jury rejected statutory fraud but found negligent misrepresentation and awarded $185,000; the trial court directed a verdict that Gray acted as 1720’s agent and entered judgment making Gray and 1720 jointly liable and awarding title to 1720.
- On appeal Gray and 1720 challenged the sufficiency of the negligent-misrepresentation and damages findings and sought attorney’s fees under the contract; the Court of Appeals reversed, holding the negligent-misrepresentation finding legally insufficient because the alleged statements were promises of future conduct (not existing-fact misstatements), rendered a take-nothing judgment for Galvan, and remanded to determine 1720’s contract attorney’s fees as the prevailing party.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Legal sufficiency of negligent-misrepresentation finding | Galvan: Gray made representations that supplied false information and Galvan justifiably relied (promises to place her in a house, pay bills, prevent eviction). | Gray/1720: Alleged statements were promises of future conduct, not misstatements of existing fact, so cannot support negligent misrepresentation. | Held: Reversed — evidence legally insufficient because negligent misrep requires false statements of existing fact, not future promises. |
| Directed verdict that Gray was 1720’s agent (joint liability) | Galvan: Trial court properly treated Gray as 1720’s agent; 1720 liable. | 1720: Directed verdict not supported. | Held: Not reached on merits — issue rendered moot by disposition; appellate court relied on negligent-misrep reversal to dispose of liability. |
| Sufficiency of damages ($185,000 jury award) | Galvan: Award supported by appraisals and loss evidence. | Gray/1720: Damages unsupported because misrepresentation claim fails. | Held: Not reached — damages challenge unnecessary after reversal on liability. |
| Entitlement to attorney’s fees under the Contract | Galvan: argued in briefing but did not perfect cross-appeal; not awarded. | 1720: As prevailing party under contract paragraph awarding fees to the prevailing party, 1720 sought fees and costs. | Held: 1720 is prevailing party (title awarded and Galvan’s claims failed); remanded to trial court to determine reasonable attorney’s fees and costs. |
Key Cases Cited
- JPMorgan Chase Bank, N.A. v. Orca Assets G.P., 546 S.W.3d 648 (Tex. 2018) (standard for reviewing legal sufficiency of evidence).
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (framework for legal-sufficiency review).
- Southwestern Bell Tel. Co. v. DeLanney, 809 S.W.2d 493 (Tex. 1991) (distinguishing tort duties from contractual promises; no tort liability for mere nonperformance of a promise absent independent duty).
- Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644 (Tex. 2006) (promise enforceability and requirement of consideration for contract remedies).
- Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc., 960 S.W.2d 41 (Tex. 1998) (fraud in procurement of contract is a separate duty from contract obligations).
- New York Life Ins. Co. v. Miller, 114 S.W.3d 114 (Tex. App.—Austin 2003) (negligent misrepresentation is based on existing facts and is often unavailable when contract governs).
- Smith v. Patrick W.Y. Tam Tr., 296 S.W.3d 545 (Tex. 2009) (ordinarily the reasonableness of attorney’s fees is for the factfinder).
- Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019) (standards for determining reasonable attorney’s fees).