In Re Kimball Hill Homes Texas, Inc.
In Re Kimball Hill Homes Texas, Inc.
Opinion of the Court
OPINION
This mandamus proceeding involves a suit for damages brought by several hundred homeowners in the Houston area against Kimball Hill Homes Texas, Inc. and Kimball Hill, Inc., (“Kimball Hill”) and Houston Lighting and Power (“HL & P”). Kimball Hill is the relator. It claims the trial court abused its discretion by not abating the case under the Residential Construction Liability Act (“the RCLA”).
On October 29, 1997, the homeowners, the real parties in interest, filed their first amended original petition and petition for intervention against relators and Houston Lighting and Power (“HL & P”).
We must first determine whether the denial of a motion to abate under the RCLA is appropriate for review by mandamus. Mandamus relief is available if the trial court violates a duty imposed by law or abuses its discretion in resolving factual issues or in determining legal principles when there is no other adequate remedy by law. Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex. 1992). A trial court abuses its discretion if “it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law.” Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex. 1985). When alleging that a trial court abused its discretion in its resolution of factual issues, the party must show the trial court could reasonably have reached only one decision. Id. at 918. As to determination of legal principles, an abuse of discretion occurs if the trial court clearly fails to analyze or apply the law correctly. Walker, 827 S.W.2d at 840.
Mandamus is intended to be an extraordinary remedy, only available in limited circumstances “involving manifest and urgent necessity and not for grievances that may be addressed by other remedies.” Holloway v. Fifth Court of Appeals, 767 S.W.2d 680, 684 (Tex. 1989). The Texas Supreme Court has held that incidental rulings by the trial court are generally not subject to review by mandamus because those rulings can be adequately reviewed on appeal. See Abor v. Black, 695 S.W.2d 564, 566-67 (Tex. 1985). Where the trial court’s order is void, howev
In Permanente Medical Ass’n v. Johnson, 917 S.W.2d 515, 517 (Tex.App. — Ft. Worth 1996, orig. proceeding), the court granted mandamus relief to the defendant when the trial court failed to abate the case under the Medical Liability and Insurance Improvement Act. See Tex.Rev.Civ. Stat Ann. Aet. 4590i § 4.01 (Vernon Supp 1998). Stating that “issuance of writs of mandamus is limited to those instances in which no adequate remedy by appeal exists,” the court held that “when a plaintiff fails to give the statutory notice that is a prerequisite to filing suit and a defendant’s timely request for an abatement is denied, that defendant is entitled to seek review of the court’s denial by mandamus.” See id. (citing Hines v. Hash, 843 S.W.2d 464, 469 (Tex. 1992)). This Court recently followed Hines and Permanente in America Online, Inc. v. Williams, 958 S.W.2d 268, 271-72 (Tex.App. — Houston [14 th Dist] 1997, no writ), where we held the trial court erroneously certified a class during the mandatory abatement period under the DTPA.
Like the DTPA and article 4590i, the RCLA has a notice provision that is a mandatory prerequisite to filing suit. See Hines, 843 S.W.2d at 469; see also Trimble v. Itz, 898 S.W.2d 370, 373-74 (Tex.App.— San Antonio), writ denied, 906 S.W.2d 481 (Tex. 1995). The purpose of the notice requirement is to encourage pre-suit negotiations to avoid the expense of litigation. Trimble, 898 S.W.2d at 374. Forcing Kim-ball Hill to trial without reviewing the propriety of an abatement under the RCLA will deprive Kimball Hill of the opportunity to inspect the homes, make a reasonable settlement offer and present a defense to damages based on such an offer. See Tex. PROP.Code Ann. § 27.004(a), (b), (f). Even Abor does not foreclose mandamus review of incidental rulings “when the district court fails to observe a mandatory statutory provision conferring a right or forbidding a particular action.” 695 S.W.2d at 567. An appeal will be an inadequate remedy where a party’s ability to present a defense at trial is vitiated or severely compromised by the trial court’s error. See Walker, 827 S.W.2d at 843. Here, Kimball Hill’s defense to the suit is compromised if the trial court failed to observe the mandatory notice provision under the RCLA Therefore, an appeal is inadequate and review by mandamus is appropriate. We now address the application of the RCLA
The RCLA applies to “any action to recover damages resulting from a construction defect.” Tex. Prop.Code Ann. § 27.002(a). “A construction defect” means “a matter concerning the design, construction or repair of a new residence ... on which a person has a complaint against a contractor” and “may include physical damage to the residence ... proximately caused by a construction defect.” Id. at § 27.001(2). A claimant seeking damages arising from a construction defect must give the contractor written notice of the defect sixty days before filing suit. See Tex. PROP.Code Ann. § 27.004(a). If the claimant fails to give the required notice, the trial court, after a hearing, must abate the suit. See id. at § 27.004(d). The suit is automatically abated without court order on the eleventh day after the date a verified plea in abatement is filed, if the claimant does not file a controverting affidavit before the eleventh day. See id.
Kimball Hill argues the RCLA applies because the real parties’ first and second amended petitions allege construction defects. The real parties, on the other hand, argue the RCLA does not apply because they allege only fraud based on pre-construction misrepresentations made by Kimball Hill and
In O’Donnell v. Roger Bullivant of Texas, Inc., 940 S.W.2d 411, 413 (Tex.App.— Ft. Worth 1997, writ denied), the plaintiffs sued their contractor for faulty foundation repairs to their home. The plaintiffs asserted causes of action for negligence, gross negligence, product liability, breach of warranty, breach of contract and violation of the DTP A. Id. As in this case, the plaintiffs did not plead the RCLA, but sought a declaratory judgment that the RCLA did not limit their claims. Id. at 413-14. The trial court instead granted summary judgment for the contractor and denied the plaintiffs’ counter-motion for partial summary judgment, finding that the plaintiffs’ suit was governed by the RCLA. Id. Thus, while the plaintiffs never pled the RCLA, the court of appeals held the RCLA applied. Likewise, in Trimble, an insurance company asserted causes of action for breach of contract, breach of warranty, and violation of the DTP A. 898 S.W.2d at 371. Although.the RCLA was never pled, the trial court sanctioned the insurance company in part for failing to give notice under the RCLA. Id. In reversing the sanctions order, the court of appeals also applied the RCLA and held that the proper remedy for failure to give notice under the statute is abatement, not sanctions. Id. at 373-74. Thus, the failure of the real parties to plead the RCLA does preclude its application where appropriate.
Additionally, following the Texas Supreme Court’s lead, this Court has consistently held that the underlying nature of the claim controls and a plaintiff cannot by artful pleading recast a claim in order to avoid the adverse effect of a statute. See Mulligan v. Beverly Enterprises-Texas, Inc., 954 S.W.2d 881, 883-84 (Tex.App.-Houston [14 th Dist.] 1997, no writ) (plaintiff could not avoid article 4590i by pleading DTPA claim); Viviano v. Moore, 899 S.W.2d 326, 327 (Tex.App.— Houston [14 th Dist.] 1995, writ denied) (same); see also Marks-Brown v. Rogg, 928 S.W.2d 304, 306 (Tex.App.-Houston [14 th Dist.] 1996, writ denied) (plaintiff could not avoid 4590i by pleading fraud claim). Likewise, in the underlying suit, the real parties cannot avoid the requisites of the RCLA by artful pleading. Similar to their first amended petition, the real parties allege in their second amended petition that their homes “did not ... meet the published ‘Good Cents Home’ standards” and “were built with substandard workmanship, ... inferior materials, and ... wholly lacking in craftsmanship.” While the context of these allegations concerns Kimball Hill’s purported misrepresentations and false promises, without the alleged construction defects, there is no claim under the first or seeond amended petition. Furthermore, the real parties seek damages for reduced market value, which are specifically recognized by the RCLA. See Tex. Prop.Code Ann. § 27.004(h)(3).
It is undisputed that Kimball Hill filed a verified motion to abate on November 26, 1997, and that the real parties did not timely controvert that motion pursuant to section 27.004(d). The real parties contend this provision relates only to notice under the statute and that they were not required to controvert the notice issue because they did not seek relief under the statute. We disagree. If the real parties’ contention is that notice was not required because the statute
Relator’s petition for writ of mandamus is hereby conditionally granted. The trial court should vacate its December 17th order and abate the case in accordance with the procedures mandated by the RCLA. Should the trial court fail to comply, the writ will issue.
. The Texas Association of Builders, the Greater Houston Builders Association, the Home & Apartment Builders Association of Metropolitan Dallas and the Greater Fort Worth Builders Association have filed amicus curiae briefs asserting the applicability of the RCLA.
. HL & P” is also a real party in interest and has filed a brief. Reference to the "real parties” in this opinion, however, means only the homeowners unless otherwise indicated.
. Section 27.004(h)(3) permits recovery for the reduction in market value to the extent the reduction is due to structural failure. At oral argument, the real parties conceded there were numerous structural problems with their homes.
. We interpret this to mean that an abatement applies to all claims and all parties. See Tex. Prop.Code Ann. § 27.004(d) (referring to abatement of "a suit”). Indeed, it would make no sense to partially abate this case because all of the real parties’ claims arise out of alleged construction defects.
Dissenting Opinion
dissenting.
I respectfully dissent.
Abatement is generally an incidental ruling not susceptible to mandamus. Trial courts generally have discretion in abatement decisions. Dolenz v. Continental Nat’l Bank of Fort Worth, 620 S.W.2d 572, 575 (Tex. 1981); Abor v. Black, 695 S.W.2d 564, 567 (Tex. 1985); Pope v. Ferguson, 445 S.W.2d 950, 954 (Tex. 1969), cert. denied, 397 U.S. 997, 90 S.Ct. 1138, 25 L.Ed.2d 405 (1970). The trial courts should consider what effect, if any, the abatement will have on Plaintiffs ability to prosecute the remaining claims. Gebhardt v. Gallardo, 891 S.W.2d 327, 332 (Tex.App.— San Antonio 1995, no writ).
The trial court in this case used its discretion to determine that the abatement sought was not applicable at the time under the unique facts presented. The trial court order denying abatement on December 17, 1997 was not void. Although, assuming paragraph 4 of Plaintiff’s Original Petition entitled “Breach of Contract and Warranty” may have constituted a cause of action under RCLA and that an automatic abatement was effected on December 8, 1997, because no verified controverting plea was filed by the real parties (the homeowners) pursuant to Section (d)(2) of § 27.004 of the RCLA, the trial court was required to allow the real parties a reasonable opportunity to amend to remove the abatement. Bryce v. Corpus Christi Area Convention and Tourist Bureau, 569 S.W.2d 496, 499 (Tex.Civ.App.— Corpus Christi 1978, writ ref'd n.r.e.); Atkinson v. Reid, 625 S.W.2d 64, 67 (Tex.App.— San Antonio 1981, no writ); Bluebonnet Farms, Inc. v. Gibraltar Savings Association, 618 S.W.2d 81, 83 (Tex.Civ.App. — Houston [1 st Dist.] 1981, writ ref'd n.r.e.); M & M Const. Co. v. Great American Ins., 747 S.W.2d 552, 554 (Tex.App. — Corpus Christi 1988, no writ). It would have been error had the trial court refused the real parties the right to amend as they did to delete said paragraph 4. The the real parties amendment had already been filed at the time of the hearing on the Motion to Abate. It would have been absurd to require the real parties to refile their Second Amended Petition immediately after that hearing. The majority opinion errs because it holds the Second Amended Petition to be a nullity and it doesn’t set forth information necessary to guide the real parties to a correct procedure to correct the defect which can be cured. M & M Const. Co. v. Great American Ins., 747 S.W.2d at 554; Bryce v. Corpus Christi Area Convention and Tourist Bureau, 569 S.W.2d at 499; Atkinson v. Reid, 625 S.W.2d at 67. The real parties should have been given a reasonable opportunity to amend as was pos
The trial court did not abuse its discretion in deciding there was no longer an RCLA cause of action in the case. I would deny the mandamus.
Reference
- Full Case Name
- In Re KIMBALL HILL HOMES TEXAS, INC. and Kimball Hill, Inc, Relators
- Cited By
- 63 cases
- Status
- Published