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CASE NO. 10-0334 IN THE SUPREME COURT OF TEXAS

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CASE NO. 10-0334 IN THE SUPREME COURT OF TEXAS Powered By Docstoc
					                        CASE NO. 10-0334

            __________________________________________

                           IN THE
                   SUPREME COURT OF TEXAS

            __________________________________________

                        PRADIP PODDER,
                           Petitioner

                                V.

                   FUNDING PARTNERS, L.P.
                              and
              ACQUISITION FUNDING SOURCE, INC.,
                          Respondents

__________________________________________________________________

                      PETITION FOR REVIEW
__________________________________________________________________




                                     Bruce R. Hardesty
                                     Texas Bar No. 08957375
                                     1411 West Ave., Suite 100
                                     Austin, Texas 78701-1537
                                     Telephone: 512-479-9500
                                     Telecopier: 512-479-9510
                                     e-mail: bruce@1411west.com

                                     ATTORNEY FOR PETITIONER,
                                     PRADIP PODDER
                      IDENTITY OF PARTIES AND COUNSEL

The names of the parties to the trial court’s judgments appealed from, and the names and
addresses of all trial and appellate counsel, are as follows:

Plaintiff/Appellant/Petitioner:
       Pradip Podder

Trial and Appellate Counsel:
       Bruce R. Hardesty
       1411 West Ave., Suite 100
       Austin, Texas 78701-1537




Defendants/Appellees/Respondents:
      Funding Partners, L.P.
      Acquisition Funding Source, Inc.

Trial Counsel #1:
       Austin H. England
       909 Lake Carolyn Pkwy., Suite 150
       Irving, Texas 75039

Trial Counsel #2:
       John Glenn Meazell
       1400 Gables Ct.
       Plano, Texas 75075

Appellate Counsel:
      John Glenn Meazell
      1400 Gables Ct.
      Plano, Texas 75075




                                           ii
                                       TABLE OF CONTENTS

Identity of Parties and Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii

Table of Contents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

Index of Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv

Statement of the Case. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Statement of Jurisdiction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

Issue Presented. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

Statement of Facts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Summary of the Argument.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Argument.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

        Issue: The respondents are not entitled to a judgment in their favor as a matter of
        law on the issue of their liability. The applicable case law states that there is an
        implied warranty of habitability in connection with the sale of a new house. The
        question of whether the seller is in the business of building houses is never the issue
        in any of the applicable opinions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Prayer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Certificate of Service. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Appendix
     1. Order on Defendants’ Motion for Summary Judgment
     2. Summary Judgment
     3. Order on Defendants’ Motion for Final Summary Judgment
     4. Final Summary Judgment
     5. Opinion and Judgment of the Court of Appeals




                                                     iii
                                   INDEX OF AUTHORITIES

                                                 Cases

Bynum v. Prudential Residential Services, L.P., 129 S.W.3d 781 (Tex. App.–Houston
     [1st Dist.] 2004, pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Centex Homes v. Buecher, 95 S.W.3d 266 (Tex. 2002). . . . . . . . . . . . . . . . .               8, 11

Diana v. Parks, 433 S.W.2d 761 (Tex. Civ. App.–Texarkana 1968, no writ). . 8, 9, 11

Gupta v. Ritter Homes, Inc., 646 S.W.2d 168 (Tex. 1983). . . . . . . . . . . . . . . . . 10

Humber v. Morton, 426 S.W.2d 554 (Tex, 1968). . . . . . . . . . . . . . . . . . . . .             8, 11

Wiggins v. Overstreet, 962 S.W.2d 198 (Tex. App.–Houston [14th Dist.] 1998,
      pet. denied). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-11

                                                Statutes

Tex. Gov’t Code Ann. §22.001(a)(2) (Vernon 1998). . . . . . . . . . . . . . . . . . . . . . vi

Tex. Gov’t Code Ann. §22.001(a)(6) (Vernon 1998). . . . . . . . . . . . . . . . . . . . . . vi




                                                   iv
                             STATEMENT OF THE CASE

       This is a suit for damages. CR 51-59. The basis of this suit is a claim for breach of

the implied warranty of habitability of a residence, and a claim under the Texas Deceptive

Trade Practices Act for the breach of that implied warranty. There were two judgments

appealed from: one signed by the Honorable Stephen Yelenosky, and one signed by the

Honorable Lora Livingston. Both summary judgments were in favor of the respondents.

The trial court was the 126th District Court of Travis County, Texas. The disposition of

the case by the trial court was two summary judgments. The parties in the court of appeals

were Pradip Podder, the appellant, and Funding Partners, L.P. and Acquisition Funding

Source, Inc., the appellees. The district of the court of appeals was the Third District of

Texas, at Austin, Texas. The justices who participated in the decision in the court of

appeals were the Honorable Chief Justice J. Woodfin Jones, the Honorable Justice Alan

Waldrop, and the Honorable Justice Diane M. Henson. The author of the opinion for the

court of appeals was the Honorable Diane M. Henson. There were no separate opinions.

The Westlaw citation for the court of appeals’ memorandum opinion is 2010 WL 850175,

and has not been published in the South Western Reporter, as far as the petitioner’s

attorney is aware. The court of appeals affirmed the trial court judgments in all things.




                                             v
                           STATEMENT OF JURISDICTION

       The basis of the Supreme Court’s jurisdiction over this appeal is Section

22.001(a)(2) and (6):

“The supreme court has appellate jurisdiction, except in criminal law matters, coextensive

with the limits of the state and extending to all questions of law arising in the following

cases when they have been brought to the courts of appeals from appealable judgment of

the trial courts: ...(2) a case in which one of the courts of appeals holds differently from

a prior decision of another court of appeals or of the supreme court on a question of law

material to a decision of the case; ...(6) in any other case in which it appears that an error

of law has been committed by the court of appeals, and that error is of such importance

to the jurisdiction of the state that, in the opinion of the supreme court, it requires

correction,...”. Tex. Gov’t Code Ann. §22.001(a) (Vernon 1988).




                                              vi
                                  ISSUE PRESENTED

       Issue: The respondents are not entitled to a judgment in their favor as a matter of

law on the issue of their liability. The applicable case law states that there is an implied

warranty of habitability in connection with the sale of a new house. The question of

whether the seller is in the business of building houses is never the issue in any of the

applicable opinions.




                                            vii
                                STATEMENT OF FACTS

       The court of appeals correctly stated the nature of the case, except in the particulars

pointed out below.

       The court of appeals omitted the following facts: Before the petitioner, Pradip

Podder (“Podder”) bought the house and lot located at 12504 Twin Creeks Road,

Manchaca, Texas (the “Property”), he looked at the house and land twice. CR 71. Before

Podder bought the Property he did not see any evidence that the Property (either the land

or the house) had flooded in the past. Id. Podder had no way of knowing that the land or

the house might flood during rain storms. Id. The land did not appear to be in an obviously

low spot, and there were no signs of prior floods, such as marks on the house, land

erosion, or dirt that had been washed away. Id. The floor of the house on the Property was

about two feet higher than the land surrounding the house when Podder bought the

property. Id. Podder could not see by looking at the house on the Property and the land

around that house that water draining across the Property might get high enough to get

over the foundation and inside the house. Id. The Property was not in a flood zone when

Podder bought it. Id. Nobody ever warned Podder that the Property (either the land or the

house) might flood. Id. In fact, before Podder bought the Property he never had any

discussions with anyone about flooding on the Property or water drainage across the

Property. Id.

       Podder moved into the house on the Property shortly after he bought the Property.


                                              1
CR 72. Podder has lived in that house continuously since that time. Id. During the time

that Podder has lived in the house, there have been three major floods on the Property. Id.

All of those floods occurred during rain storms. Id. The first major flood happened in

November, 2004, about eight months after Podder moved into the house. Id. During that

flood, the water on the land was over two feet deep in some places; it might have been up

to three feet deep. Id. The water from that flood did not recede completely from the

Property until two to three days after the rain ended. Id. After that flood, Podder had about

six inches of fill dirt placed around the house. Id.

       The second major flood on the Property happened in May or June, 2005. CR 72.

During that flood, the water on the land was over two feet deep in some places. Id. The

water from that flood did not completely recede from the Property until two to three days

after the rain ended. Id.

       The third major flood on the Property happened in January, 2007, which was the

most severe of all of the floods. CR 72. The water from that flood was high enough to

come over the foundation of the house on the Property, and into the house itself. Id. There

was about one-half inch of water inside the house. Id. The water from that flood did not

completely recede from the Property until two to three days after the rain ended. Id.

       During floods in the Property, the house on that land is not safe, sanitary, or fit for

human habitation by normal people. CR 72. During those floods, the Property and the

house on the Property are unsuitable for their intended use as a home. Id. When Podder


                                              2
bought the Property and the house, he expected to have toilets that would work all the

time, not just when there was no flooding. Id. Podder does not consider a house without

working toilets to be sanitary or fit for habitation by normal people. Id. During floods in

the Property, it is impossible to use the land around the house for any purpose at all. Id.

During floods on the Property, it is impossible to leave the house and go anywhere without

wading through water that is 2-3 feet deep. Id. During those floods, it is impossible for a

car to get from the house to any public road, or from any public road to the house. Id. If

Podder wants to leave the house and go anywhere during floods, he would have to park

a car on Twin Creeks Road before the flooding started, and then wade through standing

water to get to the car. Id.

       When Podder bought the house on the Property and first moved in, it did not look

like anyone had ever lived in that house before. CR 72. There were screens in only about

half of the windows, and Podder had to install screens on the rest of the windows. Id.

There were no blinds, curtains, or any other window coverings on the inside of any of the

windows. Id. Podder had to install interior coverings on all of the windows. Id. Everything

in the house was clean and unused. Id. There was no refrigerator in the house. Id. The

stove, dishwasher, and microwave oven were all brand-new, with warranties and manuals.

CR 72-73. The septic tank and septic system on the Property had only recently been

installed, and Podder never saw any outhouses or portable toilets on the Property. CR 73.

       The court of appeals incorrectly stated the undisputed facts that are related to the


                                            3
chain of ownership of the Property. Before Funding Partners, L.P. (“Funding Partners”)

sold the Property to Podder, Funding Partners bought the Property from Carmen Reyes

(“Reyes”) and her husband. CR 92-93. Neither Jacque Lewis nor Dwight Walters was

ever the record title holder of the Property from the date that Reyes first acquired the

property to the date that Funding Partners sold the Property to Podder. CR 78. In 1979,

long before either Reyes, Funding Partners, or Podder owned the Property, the Property

was severely flooded. CR 174-175. That flood was worse than the floods that occurred on

the Property after Funding Partners bought and sold the Property. CR 172-177.

      Carmen Reyes and her father bought the property in 1994. CR 133-134. Reyes’

father gave the Property to her. CR 134-136. From 1994 to 2001, Reyes was the sole

owner or a co-owner of the Property. CR 135-136. When Reyes acquired the Property,

there was no house on it. CR 136-137. She and her husband built part of the house on the

Property, but they did not complete that house. CR 137-140. When Reyes and her husband

stopped building the house, there were no restrooms, no showers, no tubs, no septic tank

or septic field, no kitchen, no carpet, and no tile in the house. CR 140-141. A house has

to use a septic system in that location. CR 141; 146. The inside of the house wasn’t

finished. CR 140-141. The house was only a shell. Id. Reyes and her husband sold the

Property to Funding Partners on January 10, 2002. CR 143; 169-170; 92-93. Again, the

court of appeals completely misstated this undisputed fact. The house was in the same

condition when Reyes and her husband sold the Property to Funding Partners as it was


                                           4
when Reyes and her husband stopped working on the house. CR 144-145. There was no

septic system installed. CR 154-155. Only one out of two air conditioning units was

installed. CR 147-148; 154. No heater was installed. CR 147-149; 154. There were no

carpets, tile, or linoleum, or other flooring. CR 157-158. The floors were cement. Id.

There were no cabinets, not enough toilets, not enough showers, no sinks, no interior

doors, no electrical plug plates. CR 152; 154; 158. Not all of the ceilings had been

installed. CR 157-158. During the time that Reyes, her father, and her husband owned the

property, nobody ever lived in the house, and they never rented out the house. CR 145.

There was never a portable toilet or outhouse at the property. CR 156. After Reyes and

her husband sold the house to Funding Partners, Reyes never had any interest in the

property. CR 145.

       After Funding Partners bought the Property, and before Funding Partners sold the

Property to Podder, Funding Partners had work done on the land and in the house on the

Property. CR 27. This work included the installation of septic system tanks. Id.

       Carmen Reyes and her husband deeded the Property to Funding Partners on January

10, 2002. CR 92-93; 108; 120. Dwight Walters never occupied or lived on the Property

or in the house on the Property. CR 109; 121. Funding Partners never occupied or lived

on the Property or in the house on the Property, and never leased the Property to anyone

else to live there. CR 110; 122. Dwight Walters replaced the roof on the house and

installed floor tiles. CR 109; 121. On June 2, 2003, Funding Partners sent a protest to the


                                            5
Travis Central Appraisal District concerning the Property. CR 109; 121. In that protest,

Funding Partners contended that the assessed value for the Property for the year 2003 was

too high. CR 109-110; 121-122. Podder bought the Property directly from Funding

Partners on February 4, 2004. CR 111; 123. There was never a waiver of the implied

warranty of habitability in connection with the sale of the Property from Funding Partners

to Podder. CR 111; 123. Funding partners never made any express warranties to Podder

about flooding of the Property or drainage of the Property. CR 112; 124.

       The reason for Funding Partners’ protest of the Property’s assessed value was

“improvements set @ 50%”. CR 97. Funding Partners provided the Travis Central

Appraisal District with a document entitled “Take off for 12405 Twin Creeks”, which

listed over $61,000 worth of improvements to be made at the Property. CR 101.

       Podder alleged in his pleadings in this suit that Acquisition Funding Source, Inc.

is fully liable for the wrongful acts of Funding Partners, L.P., because it is the general

partner of that limited partnership. CR 3; 55. Neither of the respondents denied that

allegation, under oath or otherwise. CR 8-13; 47-48; 49-50.

       The trial court granted two summary judgments in favor of the respondents. The

first summary judgment stated that the respondents were not liable for breach of the

implied warranty of habitability. The second summary judgment held that the petitioner

was liable to the respondents for attorney’s fees.




                                            6
                          SUMMARY OF THE ARGUMENT

       Pradip Podder, the petitioner, is entitled to recover damages from the respondents

under his claim for breach of the implied warranty of habitability. The evidence is

undisputed that Funding Partners or its contractors built a substantial portion of the house

when Funding Partners owned the property, and installed a septic system on that property.

The house was new when Podder bought it from Funding Partners and when Podder began

to live in it. Nobody had ever lived in that house before. The relevant fact is that Podder

bought a new house from Funding Partners. It is completely irrelevant that Funding

Partners was not in the business of building houses.




                                             7
                                        ARGUMENT

       The facts are not in dispute. When Funding Partners sold a new house to Podder,

it gave an implied warranty of habitability.

       Issue: The respondents are not entitled to a judgment in their favor as a
       matter of law on the issue of their liability. The applicable case law states
       that there is an implied warranty of habitability in connection with the sale
       of a new house. The question of whether the seller is in the business of
       building houses is never the issue in any of the applicable opinions.

       A person who builds a house and then sells it as a new house impliedly warrants that

the house was constructed in a good and workmanlike manner and that the house is suitable

for human habitation. Humber v. Morton, 426 S.W.2d 554 (Tex. 1968). “Under such

circumstances, the law raises an implied warranty.” Id. at 555. “As first seller of a newly

constructed house, defendant M. R. Parks, appellee here, impliedly warranted that the

house was constructed in a good and workmanlike manner and was suitable for human

habitation. [citing Humber v. Morton].” Diana v. Parks, 433 S.W.2d 761, 762-763 (Tex.

Civ. App.–Texarkana 1968, no writ).

       The implied warranty of habitability, which accompanies a new home sale, was

explained in greater detail by this court in Centex Homes v. Buecher, 95 S.W.3d 266 (Tex.

2002). That warranty “protect[s] the purchaser only from those defects that undermine the

very basis of the bargain. ...It requires the builder to provide a house that is safe, sanitary,

and otherwise fit for human habitation. ...this implied warranty only protects new home

buyers from conditions that are so defective that the property is unsuitable for its intended


                                               8
use as a home. ...the warranty of habitability represents a form of strict liability...” Id. at

273. “We created the Humber implied warranties to protect the average home buyer who

lacks the ability and expertise to discover defects in a new house.” Id. at 274.

       The court opinion that is most directly on point in this lawsuit is Diana v. Parks,

433 S.W.2d 761 (Tex. Civ. App.–Texarkana 1968, no writ). In that lawsuit, “The plaintiff

as purchaser, and defendant as seller, entered into a written contract for the sale of a lot

and partially completed house thereon in an addition to the City of Irving, Texas.” Id. at

761.There is no indication that the seller was in the business of building houses, or that the

seller had built the first part of the house. Despite the lack of those facts in the opinion,

the court stated that the seller had impliedly that the house was suitable for human

habitation, “as first seller of a newly constructed house.” Id. at 762.

       None of the opinions cited by the respondents in their motion for summary

judgment, and none of the opinions cited in this petition, require that the seller be in the

business of building homes in order for the implied warranty of habitability to be given.

None of the opinions state that the seller must have built all or any portion of the house

with his own hands. The purpose of the implied warranty is to protect a buyer who does

not have the knowledge or the wherewithal to investigate for latent defects. The implied

warranty is in the nature of strict liability. It does not matter if Funding Partners, L.P. or

Acquisition Funding Source, Inc. knew about the flooding problem before they sold the

Property to Podder. The undisputed evidence proves that the flooding problem was a latent


                                              9
defect. There is no evidence to the contrary. The undisputed evidence proves that when

the house floods, it is unfit for human habitation. In this day and age, residences are meant

to have indoor plumbing that actually functions at all times. Podder never intended to buy

a house that is becomes an island when it rains, unaccessible from the nearest road. Podder

did not buy a house in the middle of a lake. He bought a house with a yard - a yard that

is unusable for days after a heavy rain. The undisputed evidence shows that Podder bought

a new house - a house that was partially built by Funding Partners, and sold by Funding

Partners as a new house. Nobody had lived in that house before Podder did. Funding

Partners and its general partner, Acquisition Funding Source, Inc., impliedly warranted

that the house was fit for human habitation. That warranty was untrue, and the respondents

are liable for Podder’s damages.

       Gupta v. Ritter Homes, Inc., 646 S.W.2d 168 (Tex. 1983) is not on point. That

opinion merely held that if the seller has given an implied warranty of habitability to the

first purchaser of a new residence, that warranty will extend to subsequent purchasers of

that residence.

       Wiggins v. Overstreet, 962 S.W.2d 198 (Tex. App.–Houston [14th Dist.] 1998, pet.

denied) is not on point. In that case, the defendant/seller had lived in the house before he

sold it to the plaintiff/purchaser. The purchaser did not buy a new house. The seller’s

father was the owner of the company that had built the house. The seller was an employee

of that building company. If the plaintiff had sued the building company, she would have


                                             10
been entitled to recover her damages under Gupta.

       Bynum v. Prudential Residential Services, L.P., 129 S.W.3d 781 (Tex.

App.–Houston [1st Dist.] 2004, pet. denied) is not on point. In that case, the owners of a

residence, who were living in the residence, caused repair and remodeling work to be done

on the house. The owners then sold the property to a relocation company, who in turn,

sold the property to the plaintiff. Neither the original owners nor the relocation company

sold a new house to the plaintiff. The remodeling company might have been liable for the

plaintiff’s damages, but that was not the issue in the opinion.

       The only relevant issue, in a case involving an implied warranty of habitability of

a residence, is whether the house was new when it was sold to the injured party. The court

of appeals’ opinion relied on an irrelevant fact: that the respondents were not in the

business of building houses. The court of appeals, therefore, held differently from a prior

decision of another court of appeals: Diana v. Parks, 433 S.W.2d 761 (Tex. Civ.

App.–Texarkana 1968, no writ). Furthermore, the court of appeals held differently from

at least two prior decisions of the supreme court: Humber v. Morton, 426 S.W.2d 554

(Tex. 1968), and Centex Homes v. Buecher, 95 S.W.3d 266 (Tex. 2002). That holding of

the court of appeals was on a question of law material to the decision of the case. The

error of law by the court of appeals is extremely important to the jurisprudence of Texas

at this date and time. We are in the middle of one of the greatest periods of home

foreclosures in our history. Many home builders have gone out of business. If those home


                                            11
builders leave partially completed houses, the lenders or foreclosure sale buyers who

acquire those houses should not be able to complete those houses and sell them without any

potential liability. This court has held that the sale of a new house includes an implied

warranty of habitability, a form of strict liability. In those circumstances, an innocent

buyer, a person or family who has no expertise in looking for latent defects, should not be

left without a remedy in our judicial system.




                                            12
                                         PRAYER

       WHEREFORE, PREMISES CONSIDERED, Pradip Podder, the petitioner, prays

that this court grant this petition for review, request briefs from the parties, set this case

for oral argument, and after argument, reverse the judgments of the trial court and the

court of appeals, and remand this case to the trial court for a new trial on the merits,

consistent with this court’s holdings.

                                                  Respectfully submitted,

                                                  BRUCE R. HARDESTY, P.C.
                                                  1411 West Ave., Suite 100
                                                  Austin, Texas 78701-1537
                                                  Telephone: 512-479-9500
                                                  Telecopier: 512-479-9510
                                                  e-mail: bruce@1411west.com

                                                  By:/s/ Bruce R. Hardesty
                                                     Bruce R. Hardesty
                                                     State Bar No. 08957375

                                                  ATTORNEY FOR PETITIONER,
                                                  PRADIP PODDER




                                             13
                             CERTIFICATE OF SERVICE

       I certify that a copy of this Petition for Review was sent by e-mail and by certified
mail, return receipt requested, to John Glenn Meazell, 1400 Gables Ct., Plano, Texas
75075 on May 26, 2010.

                                                 /s/ Bruce R. Hardesty
                                                 Bruce R. Hardesty




                                            14
                                    APPENDIX

1. Order on Defendants’ Motion for Summary Judgment

2. Summary Judgment

3. Order on Defendants’ Motion for Final Summary Judgment

4. Final Summary Judgment

5. Opinion and Judgment of the Court of Appeals
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                                 pR.Wfr          PODDER,                                                          ~               rx THE DlSTRICT            COL'RT

                                               Plaintiff



                                 vs                                                                                               t26H: JL1)IClAL IXSTlUCT

                                                                                                                  ;~




                                  ACQt.!tSLTION FUNDlNG SOURCE. !NC.                                              s
                                               Defendants.                                                                        TRA. VIS CO\);-,-[Y, TEXAS




                                               On March 26.                  ,2(tV-I       trt.;   C0(![I   heardDefendants                Motion for Summary Judgment




                                               Therefore.           the         COUlt            ·.,J':.kr, that Pic'loti IT lakes nothing               by hi~ :o.llit il£aimr




                                               SIGNED on 'hi,                    _i~_               d"      CfiJftW<.----.            2009.




                                                                                                            e     ;«:;;itJ                    i:E1 :;pm"-      -TE~'.jOSKY




                                  SL'illiAl\ y Jv1)O:\:r.~NI
                                  Page J of 2




                                                                                                                182
                             '::,1 !'::",:                       ,W,Ht"   ~.lr   t,':-r: t.t     PAGE
                       ~.    (',/[1)         Lteu:DC   BK09098 PG2635,:
Apr 07 2009   4;OBPH        Law          Cr"f'I~:es                                            p.5




         SUi\1MARY,lt:DGME!"T
         Page 2 of2




                                                           183
07/10/2009       11:25         9~          138488                          JOHN MEAZELL                                    PAGE        02/05
                                 10....   _!VED         DC
                                                    ~7/0L.     BK09202 PG671.
                                                                 __
                                                                ..   -.-   w                        J().IN MEAZEl.L
Jul   De   2009       2:3+PH              Law Offices                                  512-4?S-9510                    p.4
                                                                                                   Filed in The District Court
                                                                                                    of Travis County, Texas



                                                      CAUSE NO. D-I-GN-06-000431                   At
                                                                                                          JUL 15 2009
                                                                                                                          .
                                                                                                                      i~Os-
                                                                                                                               t. M.
                                                                                                   Amalia Rodriguez-Mendoza,   Clerk
                PRADIP PODDER,                                         §       IN THE DISTRICT COURT
                          Plaintiff.                                   §

                                                                       §

                vs,                 NOTICE MAILED                      §

                                                                       §

                FUNDING PARTNERS, L.P. AND                             §

                ACQUlSmON FUNDING SOURCE, INC. §
                         Dcfendmts.                                            TRAVIS COUNTY, TEXAS

                      ORDER ON DEFENDANTS' MlYUON FOR FINAL StlMMARy runGMENT
                         On JaDe 30,.2009           afte:r the CoUlt considered Derendants' Motion for Final

                Snmm.aty Judgment. the response, the affidavits and other O\'ldence on tile with the

                Court. the Court

                         GRANTS Def=WaDll!' Motion for Final               SUDlltW)'   Judgment.


                                                          b-
                         SIGNED on this               15' day of July 2009.

                                                                                                       GSTON




               ORJ)BR'ON DEFENDANTS' MOnON FOR. FINAL SUMMARY IUDOMENT
               Page 1 of2



                                                                  B
   111111111111111111111111111111111111111111111111111111\        o
   001076741                                                      H 226
07/10/2009 11:26     9'   .88488                      JOHN MEAZELI                       PAGE 03/05
                          _IVED 67/eDC    BK09202      ~<;;_~?;       JOI+l />£AZELL
Jul 08 2009 2:34PM        Law O~fice~                       512-479-9510               p.5




          APPROVED AS TO FORM:




         ORDER ON DEFENDANTS' MOTION FOR }'INAL stlMMAR.V.rtJooMENT
         Page2of2




                                                227
07/10/2009          11:25      97·        9488                           .lnHN MFAZELL                             PAGE        04/05
                                                          DC    BK09202 PG694
                                                                                                   rii~L:~T:1~District Court
                                                                                                     of Travis County, Texas

                                                                                                          .." 15 2u1)9
                                                                                                          JuL          ~
                                                    CAUSE NO. D-I-GN-06-000431
                                                                                                   At          ±~()S- ~            M.
                                                                                                   Amalia ROdriguez-Mendoza,    Clerk

          PRADIP PODDER.                                            §        IN mE DISTRICT COURT

                       Plaintiff.                                   §

                                                                    §

          VS.                       NonCE MAILED                    §        126TH JUDICIAL DISTRICT

                                                                    §

          FlJNDING PARTNERS, LP. AND                                §

          ACQUISITION FUNDING SOURCE, INC. §

                       Defendants.                                           TRAVIS COUNTY, TEXAS

                                                   FINAL SUMMARY JUDGMENT

                       On June 30, 2009. the court heard Defendants'                 Motion for Final Summary

             Judgment.      After considering the motion, response, evidence on file, and arguments of

             counsel, the court grants the motion.

                       Defendants requested attorney fees and filed an affidavit proving reasonable and

             necessary attorney fees in the amount of $41,040.00.               The Court orders Plaintiff, Pradip

             Podder, to pay Defendants $41,040.00 for attorney fees, post-judgment interest on the

             total sum at the annual rate of 5%, and court costs,

                       In addition, the court finds from the affidavit supplied proving reasonable and

             necessary attorney fees for post trial attorney fees is as follows: if the Plaintiff files a post
             \




             trial motion, the judgment for attorney's fees will be credited with $3,500.00; if this cause

                 is appealed, the judgment             for attorney's fees will be credited with $6,500.00;        if

             Defendants must respond to a writ of error, the judgment for attorney's fees will be
                                                                    B
      1111111111111111111111111111111111111111111111111111111        o
       001076746
                                                                     H
                 FINAL SUMMARY       JUDGMENT
             Page 1 0(2

                                                                   228
07/113/200911:25              9-     <:18488                        .lnI-lNMI="A7.ELl                           PAGE   135/135
                                                  DC         BK09202 PG695
                                ~~IVED   67/0~,~gQ~ .~;~~           ~1~w~OQ~QQ                J~   MEAZELL
Jul 09 2Q09 2:34PM                  Law Offices                                  512-479-951Q                 p.3




               eredi.ted with $~,500.00; :md if the SupreDll:' Court grants the writ of error, the judgment

               fC¥t   attorney's fees will be credited with an additional. $3,000.00.

                          The court dealies all relief not granted ill this jutigt:nalt.   This Final Summary

               Judgment is intended to be a final and appealab~ jUdgment

                          The court orders execution to issue for this judgment.

                                                  ~    ...


                          SIGNED on lbls       L      day of July 2009.




               APPROVED AS TO FORM:




               PINM. SUMMAR.Y JUDGMENT
               PaSt 2 of2




                                                                229
I




          TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN


                                           NO.03-09-004S8-CV



                                        Pradip Podder, Appellant

                                                      v.

              Funding Partners L.P.; and Acquisition Funding Source, Inc., Appellees



         FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT
          NO. D-I-GN-06-000431, HONORABLE LORA J. LIVINGSTON, JUDGE PRESIDING



                                 MEMORANDUM                  OPINION


                   Appellant Pradip Podder appeals from the trial court's grant of summary judgment

    in favor of Funding Partners L.P. and its general partner, Acquisition Funding Source, Inc.,

    (collectively, "Funding Partners") in Podder's suit alleging breach of the implied warranty of

    habitability in connection with the purchase of his home. Podder also appeals the trial court's order

    awarding attorney's fees to Funding Partners. We affirm the judgment ofthe trial court.


                                             BACKGROUND

                   On February 4,2004, Podder purchased a house and lot in Manchaca, Texas from

    Funding Partners. After moving into the home, Podder discovered that the lot suffered from flooding

    conditions during heavy rains. According to Podder, when the property floods, the house becomes

    "an island in the middle of a pond," and the toilets in the home stop working for several hours until

    the flood water recedes. Potter alleges that during a particularly severe flood in January 2007, flood
water came over the foundation and into the house itself, resulting in a half-inch of standing water

on the floors of the home.

               Podder filed suit against Funding Partners, raising a number of claims related to the

flooding problems. Podder subsequently entered into a Rule 11 agreement, limiting his claims to

breach of the implied warranty of habitability and a corresponding claim under section 17.50 of the

Texas Deceptive Trade Practices Act (DTPA). See Tex. Bus. & Com. Code Ann. § 17.50(a)(2)

(West Supp. 2009) (allowing cause of action for breach of express or implied warranty).

               Funding Partners filed a motion for summary judgment on the issue of liability,

arguing that the implied warranty of habitability did not apply to its sale of the home to Podder

because Funding Partners was not the builder of the home. The summary-judgment evidence reflects

that construction on the house began in 1996, when previous owners Magdaleno and Carmen Reyes

designed and began construction of the home themselves.' According to Carmen Reyes's deposition

testimony, she and her husband laid the foundation for the home, did the framing, ran the electrical

wiring, had plumbing installed, did the roofing, and installed windows, exterior doors, drywall,

rafters, and shingles. However, Magdaleno Reyes became ill before construction was completed,

and the Reyeses were unable to finish the interior of the home.       Instead, they entered into an

agreement to sell the home to Jacque Lewis and Dwight Walters.

               In order to obtain the funds to purchase the property, Lewis and Walters entered into

an agreement with Funding Partners. According to Funding Partners, it is in the business ofloaning



        ] At the time construction began, the property was owned by the parents of Carmen Reyes.
Reyes originally purchased the lot herself in February 1994, but transferred the property to her
parents in December 1994, who then transferred it back to her in May 2001.

                                                 2
money to investors for the purchase and repair, if necessary, of houses. In a typical transaction,

Funding Partners loans funds to an investor for use in purchasing a house. The investor then assigns

the real-estate contract over to Funding Partners, which takes title in its own name. Simultaneous

with the closing of a property from the seller, Funding Partners enters into a note and contract for

deed with the investor. If the investor subsequently sells the property, Funding Partners transfers the

property back to the investor on the closing date with the third-party buyer. If the investor fails

to sell the property, Funding Partners cancels the contract for deed and then sells the property in

its own name.

                The latter scenario played out in the agreement with Lewis and Walters.          After

completing some work on the property, including replacing the roof and installing flooring, Lewis

and Walters abandoned the property and defaulted on the loan from Funding Partners. Funding

Partners then canceled the contract for deed and hired third-party contractors to perform the

necessary work left to complete the house, including the installation of cabinets, interior doors, and

a septic system. On February 4,2004, Funding Partners sold the property to Podder. It is undisputed

that Podder was the first owner to actually reside in the home.

                The trial court granted summary judgment in favor of Funding Partners on the issue

ofliability, dismissing Podder's claims for breach ofthe implied warranty of habitability. Funding

Partners then filed a motion for final summary judgment seeking attorney's fees under the real-estate

sales contract, which provides that the "prevailing party in any legal proceeding related to this

contract is entitled to recover reasonable attorney's fees and all costs of such proceeding incurred




                                                   3
by the prevailing party." The trial court granted this motion as well, awarding Funding Partners

$41,040 in attorney's fees. This appeal followed.


                                   STANDARD OF REVIEW

               Summary judgments are reviewed de novo.         Valence Operating Co. v. Dorsett,

164 S.W.3d 656, 661 (Tex. 2005). To prevail on amotion for summary judgment, the movant must

show that there is no issue of material fact and that it is entitled to judgment as a matter of law.

TX Far West, Ltd. v. Texas Invs. Mgmt., Inc., 127 S.W.3d 295, 301 (Tex. App.-Austin           2004,

no pet.). Evidence favorable to the non-movant is taken as true and every reasonable inference must

be indulged in favor of the non-movant and any doubts resolved in its favor. Id.


                                          DISCUSSION

Implied Warranty of Habitability

               In his first issue on appeal, Podder argues that the trial court erred in granting

summary judgment on the issue of liability because the implied warranty of habitability applied to

his purchase of the home from Funding Partners. According to Podder, the issue is not whether

Funding Partners is in the business-of home construction, but whether he was the first purchaser to

reside in the newly constructed home. Funding Partners, on the other hand, argues that the warranty

of habitability is inapplicable here because Funding Partners did not actually build the home.

               The Texas Supreme       Court adopted the implied warranty of habitability         ill



Humber v. Morton, stating that where "it is undisputed that [the appellee] built the house and then

sold it as a new house," he thereby impliedly warranted that the house "was suitable for human



                                                 4
habitation." 426 S.W.2d 554,555 (Tex. 1968). In reaching its conclusion, the court noted that the

appellee "was in the business of building or assembling houses." Id. The court justified its rejection

of the rule of caveat emptor in this context by observing that "[t]o apply the rule of caveat emptor

to an inexperienced buyer, and in favor of a builder who is daily engaged in the business of building

and selling houses, is manifestly a denial of justice."    Id. at 561 (quoting Bethlahmy v. Bechtel,

415 P.2d 698, 710 (Idaho 1966». The supreme court has since described the warranty of habitability

as requiring "the builder to provide a house that is safe, sanitary, and otherwise fit for human

habitation."   Centex Homes v. Buecher, 95 S.W.3d 266,273 (Tex. 2002).2

                In describing the policy reasons for the implied warranty of habitability, the Texas

Supreme Court emphasized that:


        (1) a builder should be in business to construct buildings free oflatent defects; (2) the
        buyer cannot, by reasonable inspection or examination, discern such defects; (3) the
        buyer cannot normally rely on his own judgment in such matters; (4) in view ofthe
        circumstances and the relations of the parties, the buyer is deemed to have relied on
        the builder; and (5) the builder is the only one who has or could have had knowledge
        of the manner in which the building was built.


Gupta v. Ritter Homes, Inc., 646 S.W.2d 168, 169 (Tex. 1983), overruled on other grounds by

Amstadt v. United States Brass Corp., 919 S.W.2d 644,649-50 (Tex. 1996). Many of these policy

reasons for the implied warranty of habitability are clearly inapplicable to the transaction between

Podder and Funding Partners.       Funding Partners is not in business to construct buildings, and




        2 The warranty of habitability has been incorporated into the property code. See Tex. Prop.
Code Ann. § 430.002 (West 2008) ("The construction of each new home or home improvement shall
include the warranty of habitability.").

                                                    5
therefore has no obligation to construct buildings free of defects. There is no indication that Funding

Partners, a fmance company with no particular expertise in home construction, was in any better

position than Podder to discern latent construction defects by reasonable inspection or examination.

Finally, Funding Partners does not occupy a special position as the sole party with knowledge of the

manner in which the home was built.

                In support of his argument that the warranty of habitability is not limited to

transactions in which the seller is in the business of building houses, Podder relies on the following

languagefromDianav.     Parks, 433 S.W.2d 761,762-63 (Tex. Civ. App.-Texarkana           1968,no writ):

"As first seller of a newly constructed house, defendant M.R. Parks, appellee here, impliedly

warranted that the house was constructed in a good and workmanlike manner and was suitable for

human habitation."    Podder contends that because Funding Partners was the first seller of the

finished home in this case, the warranty of habitability applies. Diana, however, does not support

this proposition, as the opinion suggests that the appellee was not only the first seller of the home,

but the builder as well. See id. at 764. In discussing whether the seller breached the contract, the

court observed that the seller was contractually obligated to treat the house for termites, and that the

record "does not show a breach in this respect; it does not show that the builder did not have the

house treated before relinquishing possession or that he did not furnish [the buyer] a certificate as

contracted."   Id. (emphasis added).    Thus, Diana does not support Podder's argument that the

implied warranty of habitability always applies to the first sale of a completed home, even if the

seller did not build the home.




                                                   6
                Other courts of appeals have held that the implied warranty of habitability applies

only to the sale of a home by the builder.        See Wiggins v. Overstreet, 962 S.W.2d 198, 203

(Tex. App.-Houston       [14th Dist.] 1998, pet. denied); March v. Thiery, 729 S.W.2d 889, 892

(Tex. App.-Corpus     Christi 1987, no writ). In Wiggins, the seller, who had lived in the townhome

in question before selling it, was the son of the builder. 962 S.W.2d at 199. The court of appeals

affirmed the trial court's grant of summary judgment on the ground that the seller "was not a proper

party because he did not build the townhome." Id. The court observed that the seller "was not the

proper party to be sued because he was not the builder/contractor subject to implied warranties of

good workmanship and habitability."      Id. at 203.

                We recognize that the present case can be distinguished from Wiggins on the basis

that the appellant in Wiggins was not the first occupant of the home. See id. ("The sale of a used

house by a nonbuilder owner does not imply warranty of habitability on the part of the nonbuilder

owner.") (emphasis added). We find this distinction to be insignificant.        In March, the court of

appeals held that it is the identity of the builder/vendor, rather than the identity of the home's first

resident, that dictates whether the warranty of habitability applies. 729 S.W.2d at 892. In holding

that a builder/vendor who occupied the home before selling it remained subject to the implied

warranty of habitability, the court stated that the "same result is reached whether we consider

appellants to be the first purchasers or whether appellees are viewed as the first purchasers. In either

case, the builder/vendor impliedly warrants that the house was constructed in a good workmanlike

manner and fit for human habitation." Id. (emphasis in original).




                                                       7
                While Podder argues that Funding Partners "partially built" the home by finishing the

interior, it is undisputed that the grading, foundation, exterior work, and plumbing were completed

by Magdaleno and Carmen Reyes. To the extent any of the work actually paid for by Funding

Partners could have contributed to the flooding problems, the summary-judgment evidence reflects

that Funding Partners hired third-party contractors to complete this work. Where anonbuilder owner

hires a third party to repair or modify an existing home, any implied warranty affecting those

repairs or modifications applies to the entity that actually performed the remodeling.     See Bynum

v. Prudential Residential Servs., 129 S.W.3d 781, 794 (Tex. App.-Houston             [1st Dist.] 2004,

pet. denied) (holding that where nonbuilder sellers had significant remodeling done before selling

home, (1) sellers made no implied warranty of habitability because they did not build home, and

(2) sellers made no implied warranty that repairs and modifications          were done in good and

workmanlike manner because third-party contractor, as opposed to sellers, actually did remodeling).

               In light of Wiggins, March, Bynum, and the policy reasons behind the implied

warranty of habitability, we hold that the warranty does not apply to the transaction at issue here, in

which Podder purchased the home from a seller who did not build the home and is not in the

business of building houses. See Wiggins, 962 S.W.2d at 203; March, 729 S.W.2d at 892; see also

Gupta, 646 S.W.2d at 169. Podder's first issue is overruled.


Attorney's Fees

               In his second issue on appeal, Podder argues that the trial court erred in awarding

Funding Partners attorney's fees under the residential sales contract. As previously stated, the real-

estate sales contract between Podder and Funding Partners provides that the "prevailing party in any


                                                   8
legal proceeding related to this contract is entitled to recover reasonable attorney's fees and all costs

of such proceeding incurred by the prevailing party." According to Podder, his suit is not "related

to" the sales contract because it is limited to common-law warranty and statutory warranty causes

of action, as opposed to a claim for breach of contract. 3

                We do not read the language of the contractual provision authorizing attorney's fees

to limit the recovery of fees to claims of breach of contract. Rather, the language broadly refers to

all suits "related to this contract."   In Podder's live pleading, he alleged that Funding Partners

"breached the implied warranty of habitability when they contracted for and sold the Property to the

plaintiff." Furthermore, Podder's claims are based on his contention that Funding Partners breached

a warranty of habitability that was implied in the real-estate sales contract. See Gupta, 646 S.W.2d

at 169 (holding that implied warranty is "implicit in the contract between the builder/vendor and

original purchaser"). Finally, we have previously held that claims based in tort and statutory causes

of action, including the DTP A, can be considered "related to" a sales contract for purposes of

awarding attorney's fees under a contract provision identical to the one in the present case. See

Sierra Assoc. Group, Inc. v. Hardeman, No. 03-08-00324-CV, 2009 Tex. App. LEXIS 1181, at *24

(Tex. App.-Austin     Feb. 20, 2009, no pet.) (mem. op.). As a result, we find Podder's claims to be

sufficiently related to the contract to support the award of attorney's fees to Funding Partners.

Podder's second issue is overruled.




        3 Podder also argues that Funding Partners was not entitled to attorney's fees because he

should have been the prevailing party in his suit. In light of our conclusion that the trial court
properly granted summary judgment in favor of Funding Partners on the issue of liability, we need
not reach this issue.

                                                   9
                                         CONCLUSION

                Having found no error in the trial court's orders granting summary judgment in favor

of Funding Partners on the issues ofliability and attorney's fees under the contract, we affirm the

judgment of the trial court.




                                              Diane M. Henson, Justice

Before Chief Justice Jones, Justices Waldrop and Henson

Affirmed

Filed:   March 12,2010




                                                 10
       TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN


                          JUDGMENT RENDERED MARCH 12, 2010




                                       NO. 03-09-004S8-CV



                                    Pradip Podder, Appellant

                                                 v.

            Funding Partners, L.P.; and Acquisition Funding Source, Inc., Appellees




          APPEAL FROM 126TH DISTRICT COURT OF TRAVIS COUNTY
       BEFORE CHIEF JUSTICE JONES, JUSTICES WALDROP AND HENSON
                 AFFIRMED -- OPINION BY JUSTICE HENSON




THIS CAUSE came on to be heard on the record of the court below, and the same being

considered, because it is the opinion of this Court that there was no error in the trial court's

judgment:     IT IS THEREFORE considered, adjudged and ordered that the judgment of the trial

court is in all things affirmed. It is FURTHER ordered that the appellant pay all costs relating

to this appeal, both in this Court and the court below; and that this decision be certified below for

observance.

				
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