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George D. Thomas Builder v. Timmons: Texas Purchaser Uses Consumer Protection Act to Recover Damages From Broker and Seller for Misrepresentation/MLS Error

In George D. Thomas Builder v. Timmons, the Court of Appeals of Texas addressed an alleged MLS error regarding square footage under the Texas Deceptive Trade Practice Act (DPTA). The court found that the seller had not misrepresented the square footage and was not negligent regarding the error. The court found that the agent was liable under the DPTA and assessed treble damages. The court also held that the seller was jointly liable.

The Timmons (buyers) bought a home through Cardon, a real estate agent. Thomas, the builder and seller, testified that he had planned to build a house with 1,286 square feet and listed the house at that figure. The information was recorded in a MLS at 1,286 square feet. A FHA commitment indicated that the improved floor area of the home was 1,420 square feet. This report was prepared by a FHA inspector who measured the house. Thomas had nothing to do with the inspection or the report.

The Timmons said Cardon stated the house contained 1,420 square feet of improved living space. The Timmons also claimed they relied on this figure when they purchased the home. Later, when the Timmons sought to sell the house, the FHA determined that the stated square footage was inaccurate. A redetermination affirmed the accuracy of the 1,286 figure. The Timmons then sued Thomas and Cardon for misrepresentation under the DPTA and for negligence. The DPTA allows for treble damages.

The court of appeals found no evidence that Thomas, the Seller ever represented the house as having 1,420 square feet. Thus, he was not liable for misrepresentation. As for the negligence claim, the court found no evidence that he was negligent in failing to inspect the square footage. To the contrary, the evidence showed that he always reported the correct square footage in the house.

While releasing Thomas on the misrepresentation and negligence claims, the court of appeals did not afford him complete relief. Under the holding in Loma Vista Development Co. v. Johnson, 142 Tex. 686, 180 S.W.2d 922 (1944), the vendor is liable for actual damages even though the vendor did not authorize the representations made by the real estate agent. The court of appeals mitigated Thomas's liability by stating that the real estate agent was a special agent with no implied authority from Thomas to make representations with respect to the quality of the property sold, and therefore, Thomas should not be liable for additional penalties. Thus, Thomas was held jointly and severally liable with Cardon for $3,000 and costs, but not for the upper two-thirds of the treble damages award.

Next, the Court of Appeals of Texas found Cardon, the agent, liable under the misrepresentation and negligence claims, jointly and severally liable for $3,000 and costs, and solely liable for the upper two-thirds of the treble damages.

George D. Thomas Builder v. Timmons, 658 S.W.2d 194 (Tex. Ct. App. 1983).