Firm News

Houston Partners Prevail in Agent/Broker Statutory Fraud Suit

October 24, 2019 Press Release

Houston partners Bob McCabe and Andrew Johnson recently won an appeal in the Beaumont Court of Appeals for their real estate agent clients. 

After purchasing a residential home, the plaintiff sued the seller and seller’s agents claiming there were undisclosed defects with the home.  The plaintiff sued the agents for statutory fraud for allegedly making misrepresentations in the Texas Real Estate Commission (“TREC”) Seller’s Disclosure, a form all sellers in Texas are required to complete. 

In the trial court, Mr. McCabe obtained summary judgment for the agents by arguing that, in Texas, agents do not have a general duty to ensure sellers accurately complete Seller’s Disclosures—this is the sellers’ duty.  He also argued the “as-is” clause in the form TREC contract placed the burden on the buyer to catch defects.  The buyer made numerous arguments why the circumstantial evidence shows the agents should have known about the alleged misrepresentations, but the trial court disagreed.  Mr. McCabe also obtained an award of attorney’s fees based on the TREC contract’s prevailing-party clause.

On appeal to the Beaumont Court of Appeals, board-certified appellate specialist Andrew Johnson handled briefing for the agents.  The Court of Appeals agreed with the agents’ arguments and issued an opinion that recognizes important protections for real estate agents regarding “as-is” clauses and Seller’s Disclosures. 

This is another victory for Thompson Coe’s professional liability and appellate sections.