No. 05-11-00265-CV IN THE FIFTH COURT OF APPEALS AT

Transcription

No. 05-11-00265-CV
ACCEPTED
225EFJ016342342
FIFTH COURT OF APPEALS
DALLAS, TEXAS
11 June 3 P3:55
Lisa Matz
CLERK
IN THE
FIFTH C O U R T OF A P P E A L S
AT DALLAS
J E A N PIERRE,
Appellant,
V.
R. S C O T T S T E I N B A C H A N D T H E S T E I N B A C H L A W F I R M ,
Appellees
n
A p p e a l e d from the 192 Judicial District Court o f
Dallas County, Texas
APPELLANT'S BRIEF
Cary Schachter, N o . 17719900
Raymond P. Harris, Jr. N o . 09088050
Lesley W . Lewis, N o . 24060818
SCHACHTER HARRIS, LLP
220 Canal Centre
400 E . Las Colinas B l v d .
Irving, Texas 75039
(214)999-5700; Fax (214)999-5747
ATTORNEYS FOR APPELLANT,
J E A N PIERRE
APPELLANT REQUESTS O R A L A R G U M E N T
N o . 05-11-00265-CV
J E A N PIERRE,
Appellant,
V.
R. SCOTT S T E I N B A C H A N D T H E S T E I N B A C H L A W F I R M ,
Appellees
IDENTITY OF PARTIES & COUNSEL
Plaintiff-Appellant Jean Pierre, represented by
Cary Schachter, N o . 17719900
Schachter Harris, L L P
220 Canal Centre
Irving, Texas 75039
(214)999-5700; Fax (214)999-5747
Defendants-Appellees R . Scott Steinbach and The Steinbach L a w Firm, represented by
A l i s o n H . Moore, N o . 09836500
Stephen C . Richman, N o . 24074952
Thompson, Coe, Cousins & Irons, L L P
Plaza of the Americas
700 N . Pearl Street, Twenty-Fifth Floor
Dallas, Texas 75201-2832
(214)871-8266; Fax (214)871-8209
Defendants were represented in the trial court by Dennis O. Olson, N o . 19131400,
1201 M a i n Street, Suite 2470, Dallas, Texas 75202. 214 979-7300.
ii
T A B L E OF CONTENTS
IDENTITY OF PARTIES & COUNSEL
ii
I N D E X OF AUTHORITIES
v
S T A T E M E N T OF T H E C A S E
1
STATEMENT O N ORAL ARGUMENT
2
ISSUES P R E S E N T E D
3
S T A T E M E N T OF F A C T S
4
S U M M A R Y OF THE A R G U M E N T
14
ARGUMENT
16
I S S U E 1: The trial court erred in reducing the judgment in this legal malpractice case
because o f funds received by plaintiff as a result o f a breach o f contract case against a
party that was not jointly liable with defendants involving events occurring after the
malpractice
16
I.
II.
Judgment on the verdict would not have created double recovery that
triggers the one-satisfaction rule
Defendants failed to establish either of the two requirements for a
credit: indivisible injury andjoint liability
18
A.
Defendants failed to establish indivisible injury
18
1.
Different amounts
18
2.
Different computation methodology
19
3.
Different evidentiary issues
20
4.
Difference on attorney's fees
20
Defendants failed to establish j oint liability
20
B.
III.
16
The joint liability cases are not wrongly decided as defendants argued below . . 21
iii
IV.
Other cases cited by defendants are not analogous
24
V.
Settlement credits are not a one-way street
27
VI.
Alternative applications of the one-satisfaction rule
28
I S S U E 2: N o legally or factually sufficient evidence supports the jury's 30%
negligence finding against plaintiff.
30
I S S U E 3: Judgment should have been entered against defendant The Steinbach
L a w Firm based on its undisputed vicarious liability for the conduct o f defendant
Steinbach
31
PRAYER
33
C E R T I F I C A T E OF SERVICE
34
INDEX TO APPENDIX
36
iv
INDEX OF AUTHORITIES
A l l a n v. Nersesova, 307 S.W.3d 564 (Tex. App.—Dallas 2010, no pet)
24
Bartley v. Guillot, 990 S.W.2d 481 (Tex. App.—Houston [14th D i s t ] 1999, pet. denied)
21
Berry Prop. Mgmt. Inc. v. Bliskey, 850 S.W.2d 644 (Tex. App—Corpus Christi 1993,
writ dism'd by agr.)
26
Bradshaw v. Baylor Univ., 84 S.W.2d 703 (Tex. 1935)
16
Buccaneer Homes of A l a . , Inc. v. Pelis, 43 S.W.3d 586 (Tex. App.—Houston [1st D i s t ]
2001, no pet.)
20, 27
Burke v. U n i o n Pac. Res. Co., 138 S.W.3d 46 (Tex. App.—Texarkana 2004, pet. denied)
22, 23
Cottman Transmission Sys., L L C v. F V L R Enterprises, L L C , 295 S.W.3d 372 (Tex.
App.—Dallas 2009, pet denied)
25
Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378 (Tex. 2000)
17, 28
C T T I Priesmeyer, Inc. v. K & O L t d . P'ship, 164 S.W.3d 675 (Tex. App.—Austin 2005,
no pet)
14, 18, 2 0 , 2 1 , 2 2 , 23
Emerson Electric Co. v. American Permanent Ware Co., 201 S.W.3d 301 (Tex. A p p . —
Dallas 2006, no pet.)
25
First Title C o . v. Garrett, 860 S.W.2d 74 (Tex. 1993)
18
Galle, Inc. v. Pool, 262 S.W.3d 564 (Tex. App.—Austin 2008, pet. denied)
21
Goose Creek Consol. Indep. School Dist. v. Jarrar's Plumbing, Inc., 74 S.W.3d 486 (Tex.
App—Texarkana2002, pet. denied)
23, 24
Greenstein, Logan & C o . v. Burgess Marketing, Inc., 744 S.W.2d 170 (Tex. App.—Waco
1987, writ denied)
30
In re Frank A . Smith Sales, Inc., 32 S.W.3d 871 (Tex. App.—Corpus Christi 2000, no
pet.)
14,18
v
Livezey v. Putnam Supply Co., 30 S.W.2d 902 (Tex. C i v . App.—Eastland 1930, writ
refd)
33
L J Charter, L . L . C . v. A i r A m . Jet Charter, Inc., N o . 14-08-00534-CV, 2009 Tex. A p p .
L E X I S 9469 (Tex. App.—Houston [14th Dist.] Dec. 15, 2009, pet. denied) (mem. op)
21
Minyard Food Stores v. Goodman, 80 S.W.3d 573 (Tex. 2002)
32
Oyster Creek Fin. Corp. v. Richwood Invs. II, Inc., 176 S.W.3d 307 (Tex. A p p . —
Houston [1st Dist.] 2004, pet. denied)
22, 24
R E S T A T E M E N T ( T H I R D ) OF T O R T S : A P P O R T I O N M E N T OF L I A B I L I T Y § 26,
cmt. g(2000)
23
Stewart Title Guar. C o . v. Sterling, 822 S.W.2d 1 (Tex. 1991)
16
Taylor Pub. C o . v. Systems Marketing Inc., 686 S.W.2d 213 (Tex. App.—Dallas 1984,
writ denied)
33
Texas & P. R. C o . v. Mercer, 90 S.W.2d 557 (Tex. 1936)
29
Tompkins v. Cry, 202 F.3d 770 (5th Cir. 2000)
26
vi
STATEMENT OF T H E CASE
Nature of the Case: This is a legal malpractice case by Plaintiff Jean Pierre
against defendant R. Scott Steinbach and The Steinbach L a w Firm. ( C R 8).
Course of Proceedings:
The jury's verdict found both M r . Steinbach and M r .
Pierre negligent, attributed the negligence 70% to M r . Steinbach and 30% to M r . Pierre,
and determined the damages proximately caused by the negligence to be $275,000. ( C R
27-29). Plaintiff moved to disregard the negligence finding against him and for judgment
for the full damages against both defendants. ( C R 32). Alternatively, plaintiff moved for
judgment on the verdict. ( C R 32). Defendant moved for judgment notwithstanding the
verdict claiming lack o f evidence to support it. ( C R 202,210). Alternatively,
defendants claimed a credit based on the one-satisfaction rule because of the outcome o f
an earlier lawsuit. ( C R 202, 210, 314) Separately, The Steinbach L a w F i r m moved for
judgment because no jury issue had been submitted as to it. ( C R 223).
Trial Court Disposition:
The trial rendered judgment for M r . Pierre against only
M r . Steinbach in the amount of $11,998.52. ( C R 367). The trial court denied plaintiffs
motion to modify, correct, or reform the judgment on February 7, 2011. ( C R 378).
STATEMENT O NORAL ARGUMENT
Oral argument would assist the Court in analyzing the issues presented in this
appeal, which are complicated factually and legally because, among other things,
defendants' arguments for a credit involve the interrelationship of two lawsuits.
2
ISSUES P R E S E N T E D F O R R E V I E W
1.
The trial court erred i n reducing the judgment i n this legal malpractice
case because o f funds received b y plaintiff as a result o f a breach o f contract case
against a party that was not j o i n t l y liable w i t h defendants i n v o l v i n g events
occurring after the malpractice.
2.
N o legally or factually sufficient evidence supports the j u r y ' s 3 0 %
negligence finding against plaintiff.
3.
Judgment should have been entered against defendant The Steinbach
L a w f i r m based on its undisputed vicarious liability for the conduct o f defendant
Steinbach.
3
STATEMENT OF FACTS
I.
Overview
M r . Pierre sued M r . Steinbach for committing legal malpractice representing him
in a contract to sell an eight million dollar property to Greenstreet Properties o f Texas,
L L C ("Greenstreet").
(CR. 8). The central factual dispute at trial was whether M r .
Steinbach advised his client that the contract contained a loophole that allowed
Greenstreet to tie up the property for many months, yet still get a refund o f virtually all
the $400,000 in earnest money that it had deposited. ( R R 2-44, 3-38-39).
The jury decided that M r . Steinbach was negligent and responsible for 70% of M r .
Pierre's damages and that M r . Pierre was 30% negligent. ( C R 27, 28). The jury found
Pierre's damages were $275,000. ( C R 29).
In the trial of the malpractice case the jury was not informed about an earlier case
between M r . Pierre and Greenstreet. In that case, the parties transferred the $400,000
escrow to the Clerk o f the District Court, submitted the question o f its disposition to the
court, and ultimately reached a resolution under which the court ordered one portion
distributed to Greenstreet and another to M r . Pierre and his lawyers. ( C R 52-53). The
judge who had presided over the Greenstreet case also presided over the malpractice trial,
and what had happened in the earlier Greenstreet case was not disputed by the parties.
Accordingly, the judge excluded in limine any mention of the events of the Greenstreet
case and deferred until after the trial the issue of whether the disposition o f the
Greenstreet case would impact the judgment in the malpractice case. ( C R 32-33).
4
Accordingly, after trial, the plaintiff made the undisputed facts of the Greenstreet
case a part o f the record ( C R 32, 52-53), and both sides briefed whether those facts
required adjustment in the amount of the judgment. ( C R 32, 312, 351). Ultimately, the
trial court accepted M r . Steinbach's argument that the one-satisfaction rule required a
credit and fashioned its judgment accordingly. ( C R 312, 314, 367). Judgment on the
verdict would have been for $192,500, yet the court's judgment awarded only
$11,998.52. ( C R 3 6 7 ) .
The decision to apply the one-satisfaction rule, the propriety of a judgment based
on the plaintiffs negligence, and the failure of the court to enter judgment against both
M r . Steinbach and his firm are the three issues M r . Pierre raises on appeal. M r .
Steinbach has also challenged jurisdiction in a pending motion that both sides have
briefed and that w i l l not be addressed further in this brief.
II.
M r . Steinbach's representation of M r . Pierre
M r . Pierre had been in the real estate business for many years. (RR2-20). M r .
Steinbach represented M r . Pierre in virtually all his transactions. ( R R 2-31). The
property involved in this case was approximately 716,997 square feet o f land located at
the northeast corner of Dallas Parkway and Stonebrook in Frisco, Collin County, Texas.
(P.Ex. 2). M r . Steinbach's first involvement with that property was representing M r .
Pierre when he bought it. ( R R 2-30, 34). He also drafted a contract for M r . Pierre's
attempted sale of the property to a prospective purchaser named Greenway, an entity
5
unrelated to Greenstreet in any way other than the color coincidence in the first syllable
of their names. (RR2-30).
III.
M r . Pierre agrees to business terms with Greenstreet
After the proposed sale of the property to Greenway did not close, Greenstreet -
an unrelated entity - expressed interest in the property. Ultimately, M r . Pierre and
Greenstreet signed a letter of intent dated June 21, 2007. (RR 2-24, P.Ex. 1).
The letter of intent allowed Greenstreet to withdraw from the transaction without
losing most o f its $100,000 earnest money i f it made a decision within an initial due
diligence/permitting period. ( R R 2-25-26). After that, however, Greenstreet agreed to
compensate M r . Pierre for the agreed upon value o f keeping his property off the market
for an extended period of time. (P.Ex. 1). Under the letter o f intent, Greenstreet could get
30 more days to decide only by allowing the first $100,000 o f earnest money to become
nonrefundable, and by depositing an additional non-refundable $100,000. ( R R 2-28-29,
P.Ex. 1). Greenstreet could get two more 30-day extensions i f it wished, each time by
depositing an additional non-refundable $100,000. (RR 2-28-29, 69, P.Ex. 1).
The parties' intention that the money be non-refundable was explicit in the letter
of intent, as it provided for "three (3) additional thirty (30) day periods, by depositing
into escrow for each extension the sum of $100,000, applicable to the purchase price but
nonrefundable other than due to a Seller default." (P.Ex. 1).
M r . Pierre gave Greenstreet the old Greenway contract as a form to use in creating
the contract for their transaction. ( R R 2-32, 36). He felt it was a form that had already
6
passed review by his lawyer. ( R R 2-34). Greenstreet sent back a proposed contract that
followed the form M r . Pierre had given it, but containing "all kinds o f scratch this,
scratch that changes." ( R R 2-37). M r . Pierre believed he did not know anything about
"those type of things, so that was the time to call the cavalry, M r . Steinbach." ( R R 2-37).
IV.
M r . Steinbach becomes involved in drafting the contract
M r . Pierre sent the draft with many changes to M r . Steinbach. ( R R 2-37-38, P.Ex.
3). Next, M r . Pierre met with M r . Steinbach and brought him the letter o f intent. ( R R 2¬
41, 112). M r . Steinbach's role was to do "what he always has done . . . embedding our
business agreement, which is the letter o f intent, into the contract." ( R R 2-38). M r .
Pierre asked M r . Steinbach to work with Greenstreet's lawyer to prepare the final
contract. ( R R 2-30). Thereafter, several drafts were exchanged through the lawyers until
a final contract was ultimately signed dated July 16, 2007. ( R R 2-30-31, P.Ex. 2).
Unfortunately for M r . Pierre, Greenstreet's first draft introduced changes that
created the loophole related to the earnest money. (P.Ex. 4). These changes remained
through the subsequent drafts, and became parts of the final contract signed by the
parties. (P.Ex. 2). Thus, in the final agreement, language in paragraph three on page two
and paragraph seven on page four of the final contract—when read together—gave
Greenstreet the power to make elections that would keep all $400,000 refundable, except
for nominal consideration of $100 that had to remain nonrefundable or the contract was
unenforceable. ( R R 3-14-15, P.Ex. 2). Stated differently, although paragraph three, at
least to a layman "clearly says nonrefundable" as to the earnest money, ( R R 2-115)
7
paragraph seven takes away the nonrefundability. A s a result of the Greenstreet changes
to the contract language, Greenstreet could get back virtually all its money even though it
could keep M r . Pierre tied up for many months unable to sell to someone else while it
dithered over whether to buy the property. ( R R 2-115).
M r . Pierre, o f course, saw that the contract contained proposed changes to the
early draft. ( R R 2-39). But, as a layman, he did not appreciate what the changes had
done to the business terms he and Greenstreet had already agreed upon. (RR 2-28-29,
P.Ex. 1). He testified that he did not feel himself competent to evaluate the legal effect of
all those changes. (RR. 2-39). A s he explained, "It's just—it's not just a matter o f
reading it. Reading it, I can read. But putting them together because one element has to
do with another element." (RR 2-39). He said he was not trained to do that kind of
analysis: "I would never know where to start from." (RR 2-40). This is why he called
"the cavalry, M r . Steinbach." (RR2-37).
V.
M r . Steinbach commits malpractice
The standard o f care was not in dispute i n the case. M r . Steinbach agreed that a
lawyer representing M r . Pierre should have discovered the change in the refundability o f
the earnest money and should have explained that change to his client. ( R R 2-120-21, 3¬
38-39). H e also admitted knowing about the loophole. ( R R 2-121). The major fact issue
at trial was whether M r . Steinbach explained to his client the legal significance of the
new language introduced in two separate paragraphs.
8
M r . Steinbach claimed he had a conversation with M r . Pierre in which he
explained the ramifications the changes would have on the refundability of the earnest
money. ( R R 2-121, 3-39). When asked whether the conversation occurred, M r . Pierre
responded, "absolutely not." ( R R 2-44). H e testified there would have been no reason
for him to consent to change the business terms agreed upon in the letter of intent, and
that he would not have signed the contract i f he was informed that the final contract
would be interpreted so that the earnest money could become refundable. ( R R 2-44). A
contract like that could tie up the property for many months without his receiving any
compensation for keeping the property off the market as to other potential purchasers,
undercutting the very reason for providing for earnest money. ( C R 2-44, 52). Being
uninformed of the legal significance of the changes, he signed the contract that he
otherwise would not have signed. (RR 2-116, 117). A s subsequent events would show,
he became ensnared in a contract in which the promise o f earnest money to compensate
him i f the contract did not close was illusory.
VI.
Events after the contract was signed
Greenstreet signed the contract on July 16, 2007, and deposited the first $100,000.
(P.Ex. 2). In September, M r . Pierre voluntarily agreed to amend the Greenstreet contract
and expand the initial review period 80 days without additional earnest money. ( R R 2-45,
P.Ex. 31). On December 3, 2007, Greenstreet sent notice that it had deposited an
additional $100,000 earnest money to extend the review period, claiming that the
additional earnest money would be refundable.
9
( C R 178, P.Ex. 35).
M r . Pierre was shocked at the claim of refundability because he thought the
contract provided precisely the opposite, which was that any extensions beyond
December 3, 2007, would result in all the earnest money (except the nominal $100)
becoming completely nonrefundable. ( R R 2-46-47). Controversy ensued as M r . Pierre
disputed the right to maintain refundability. ( R R 2-46-47, P.Ex. 35-40).
Greenstreet made two additional $100,000 deposits into escrow on or about
December 28, 2007, and February 1, 2008, both times claiming the deposits were fully
refundable i f it elected in its sole discretion to terminate the contract. ( C R 178). Thus,
between July 17, 2007, and February 1, 2008, Greensteet had made earnest money
deposits with an escrow agent that totaled $400,000. ( C R 177-79). On February 21,
2008, Greenstreet terminated the contract and demanded return o f all the earnest money
except the nominal $100. ( C R 179). M r . Steinbach believed the money was indeed
refundable, and instructed M r . Pierre to return it. (P.Ex. 5).
M r . Pierre testified that his damages were at least as high as the agreed upon
consideration o f $400,000 for keeping his property off the market for what amounted to
more than seven months. (RR 2-51-52).
VII.
The verdict and post-trial motions
A t the close o f defendants' case, M r . Pierre moved for instructed verdict on
defendant's claim that he had been negligent. ( R R 3- 67-68). The court denied the
motion and submitted the case to the jury.
In response to Question 1 the jury found both
M r . Steinbach's and M r . Pierre's negligence were proximate causes of the injury in
10
question. ( C R 27). In response to Question 2 the jury attributed 70% o f the negligence
to M r . Steinbach and 30% to M r . Pierre. ( C R 28). In response to Question 3 the jury
found M r . Pierre's damages to be $275,000. ( C R 29).
A l l parties filed post judgment motions. The key issue was the impact o f the
earlier Greenstreet case on the amount of the judgment, the issue that had been deferred
by the pretrial ruling of the trial judge. ( C R 32, 312, 351).
VIII. The Greenstreet case
What had happened in the earlier Greenstreet case was undisputed and was
established in an affidavit o f M r . Pierre filed with his motion for judgment so that those
facts would be part o f the record. ( C R 32, 52).
After M r . Steinbach advised M r . Pierre to authorize release of the earnest money
to Greenstreet, M r . Pierre employed new counsel. M r . Pierre not only refused to
authorize release of the funds, he instituted a declaratory judgment action against
Greenstreet to determine who was entitled to the funds. ( C R 52). M r . Pierre invited M r .
Steinbach to participate in that effort. ( C R 52, 60). B y agreement, the funds were
transferred from the escrow agent to the Clerk of the District Court, to be held pending a
decision o f the trial judge as to who was entitled to them. ( C R 52). M r . Pierre argued
that Greenstreet missed its deadlines to maintain nonrefundability. ( C R 175). He argued
that a letter purporting to do so on December 3, 2007, had not been timely. ( C R 178).
The trial court disagreed with M r . Pierre, and ordered all but $100 of the money
on deposit with the court to be paid to Geenstreet. ( C R 191). M r . Pierre appealed the
11
decision. ( C R 53). While the case was on appeal, the parties reached a resolution o f the
Greenstreet case under which the money on deposit with the court would be divided.
(CR 53). A s a result, the trial court ordered the Clerk of the Court to issue a check for
$180,501.48, payable to M r . Pierre and his lawyers, with the remainder going to
Greenstreet. ( C R 53). After deducting attorney fees and expenses, M r . Pierre received a
total o f $103,527.13. ( C R 5 3 ) .
It was only after having done all he could do to mitigate his damages before suing
M r . Steinbach that M r . Pierre instituted this malpractice action on September 10, 2009.
(CR 8).
IX.
The trial court fashions its judgment
In his motion for judgment, M r . Pierre asked the trial court to disregard the jury
finding of his 30% negligence and enter judgment for $275,000. In the alternative, he
prayed for judgment on the verdict for $192,500 (70% of $275,000). ( C R 32).
M r . Steinbach and The Steinbach L a w F i r m asked the court to first reduce the
verdict based on plaintiffs negligence and then apply the one-satisfaction rule to further
reduce the judgment based on the result of M r . Pierre's earlier lawsuit with Greenstreet.
( C R 314). M r . Pierre responded that the one-satisfaction rule should not apply because
defendants had not proved the requirements for its application and because judgment on
the verdict would not result in M r . Pierre receiving more than the $400,000 at issue in his
case with Greenstreet. The amount o f a judgment on the verdict, $192,500, plus the
amount received in the Greenstreet case, $180,501.48, equals $373,001.48. ( C R 352).
12
Alternatively, M r . Pierre asserted the only reduction should be the amount he
actually received, $103,527.13, not the amount both he and his lawyers received, or that
any adjustment should be made from the damages at issue in the Greenstreet case so that
the resulting judgment would be $154,429.04.' ( C R 340).
The trial court fashioned its judgment as defendants requested by first reducing the
damages 30% to reflect the share of negligence allocated to M r . Pierre, and from that
amount, $192,500, further reducing the damages by a portion of the funds in the
Greenstreet case received by M r . Pierre and his lawyers, $180,501.48. Thus the court
awarded judgment to M r . Pierre in the amount of only $11,998.52. ( C R 3 6 7 ) . In
addition, the court awarded judgment only against M r . Steinbach and denied plaintiffs
motion to modify, correct, or reform judgment to include The Steinbach L a w F i r m on
February 7,2011. ( C R 378).
1
After deducting $189,501.48 from the amount at issue in the Greenstreet case, the remaining amount at issue for
which Mr. Pierre had not been compensated through the Greenstreet litigation was $220,612.92. If the onesatisfaction rule must be applied in that manner to set a cap, an adjustment would be required to reduce the $275,000
damages found by the jury to $220,612.92. If the 70% - 30% allocation by the jury in response to Question 2 of the
verdict form is applied to the capped damages of $220,612.92, the resulting judgment would be $154,429.04.
13
S U M M A R Y OF THE A R G U M E N T
Defendants led the trial court into error by claiming a settlement credit under the
one-satisfaction rule, a common-law doctrine applied only to prevent a windfall. When
two cases are involved, a windfall arises only i f a party received more than was at issue i n
either case. Adding the absolute dollars recovered in the Greenstreet case, $180,501.48,
to a judgment o f $192,500 on the verdict in this case, totals $373,001.48, an amount that
is less than the $400,000 (plus interest) res at issue in the Greenstreet case. Thus,
judgment on verdict would not create a windfall that must be remedied by a credit.
Furthermore, a defendant must satisfy two requirements to get a credit: 1) the
settlement must be for damages for which both the settling and the non-settling parties
are jointly liable, and 2) the settlement must have been paid as damages for the same
indivisible injur}'. CTTIPriesmeyer, Inc. v. K&OLtd.
P'ship, 164 S.W.3d 675, 683-684
(Tex. App.—Austin 2005, no pet.). Greenstreet was not jointly liable for defendants'
malpractice and could not have joined M r . Steinbach in the case against it as a party
responsible to pay any of the earnest money on deposit with the court.
A n "indivisibility injury" occurs only i f there is "no rational basis for
distinguishing between the damages sought in one case and the damages underlying a
settlement in another case." In re Frank A. Smith Sales, Inc., 32 S.W.3d 871, 874 (Tex.
App.—Corpus Christi 2000, no pet.). Several rational bases distinguish the Greenstreet
recovery from the damages found by the jury in the malpractice case. The malpractice
damages o f $275,000 differed i n amount and computation method from the $400,000 res
14
at issue i n the Greenstreet case, and the damage amounts were based on different
evidentiary issues. The Greenstreet case was a winner-take-all battle over a fixed
amount that would be decided by whether Greenstreet met a deadline. The damages in
the malpractice case were not a liquidated sum; rather the jury had to determine how
much damage M r . Pierre suffered when malpractice ensnared him in a bad contract that
prevented him from marketing his property.
The trial court also erred in reducing the judgment amount by plaintiffs
negligence. A lawyer who is employed to decipher and explain proposed language in a
complicated commercial agreement cannot diminish his liability by claiming his client
should have done the legal analysis to unravel the legal significance of wording changes
to interrelated provisions o f a complex contract. In a professional liability case,
contributory negligence consists solely o f doing something that prevents the professional
from performing his duties. N o such evidence was presented by defendants in this case.
Finally, the trial court erred in failing to enter judgment against both defendants.
It was undisputed that The Steinbach L a w Firm was vicariously liable for the work
performed by M r . Steinbach. Accordingly, no jury question needed to be submitted on
the issue.
15
ARGUMENT
Issue 1: The trial court erred i n reducing the judgment i n this legal malpractice
case because o f funds received b y plaintiff as a result o f a breach o f contract case
against a party that was not j o i n t l y liable w i t h defendants i n v o l v i n g events
occurring after the malpractice.
I.
Judgment on the verdict would not have created double recovery that
triggers the one-satisfaction rule
The Greenstreet lawsuit was a battle over who owned $400,000 on deposit in the
registry o f the court. The money had initially been deposited as earnest money by
Greenstreet. M r . Pierre asserted he was entitled to it because Greenstreet had missed
deadlines for exercising rights that would have preserved the refundability of the money.
If M r . Pierre had settled his legal malpractice case with Steinbach before the Greenstreet
case was resolved, Greenstreet could not have received a settlement credit in the
judgment. Yet because the Greenstreet case was resolved before the Steinbach case, M r .
Steinbach argued that the one-satisfaction rule required that the amount M r . Pierre
received in that case, must be deducted from the Steinbach judgment.
( C R 314).
The one-satisfaction rule is a common law doctrine that ensures a plaintiff w i l l not
be compensated twice for a single injury. Stewart Title Guar. Co. v. Sterling, 822 S.W.2d
1, 7 (Tex. 1991); Bradshaw v. Baylor Univ., 84 S.W.2d 703, 705 (Tex. 1935). Thus, a
plaintiff cannot receive in resolution of two cases more money than was at issue i n either
of them. Here that would not have happened i f the trial court had entered judgment on
the verdict. Adding the absolute dollars recovered in the Greenstreet case, $180,501.48,
2
Defendant did not plead or argue for application of a settlement credit under Chapter 33, and thus waived any such
credit, even had a Chapter 33 credit been appropriate, which it was not.
16
to a judgment o f $192,500 on the verdict in this case totals $373,001.48, an amount that
is less than the res of $400,000 plus interest on deposit with the trial court and at issue in
the Greenstreet case.
Moreover, the one-satisfaction rule is a doctrine designed only to prevent
windfalls. Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378, 390 (Tex. 2000). It should not
be used to provide a windfall to the defendant, which is precisely what the trial court's
use o f the one-satisfaction rule did in this case. M r . Steinbach instructed M r . Pierre that
the earnest money was indeed refundable. (P.Ex. 5). M r . Pierre could have agreed to give
back the earnest money and simply pursued his malpractice claims against M r . Steinbach.
Nevertheless, M r . Pierre did his best to mitigate his damages based on the argument that
Greenstreet had blown its deadline for maintaining refundability. A n d he invited M r .
Steinbach to participate in that effort. ( C R 52, 60). Yet, M r . Steinbach did not
participate.
Given M r . Steinbach's position, M r . Pierre had no obligation to mitigate his
damages. M r . Pierre went to considerable expense to contest returning all o f the earnest
money. Neither equity nor law support M r . Steinbach's position that he is entitled to a
credit. M r . Pierre did not receive more than the $400,000 at issue in the Greenstreet case
to trigger one-satisfaction-rule analysis. Furthermore, defendants failed to establish
either o f the requirements for a credit.
17
II.
Defendants failed to establish either of the two requirements for a
credit: indivisible injury and joint liability
Two requirements not met in this case prevent treating the resolution of the
Greenstreet case as a settlement credit. The settlement must have been paid as damages
for the same indivisible injury. First Title Co. v. Garrett, 860 S.W.2d 74 (Tex. 1993).
Moreover, the settlement must be damages for which both the settling and the nonsettling parties are jointly liable. See, e.g. CTTIPriesmeyer, Inc. v. K&O Ltd. P'ship, 164
S.W.3d 675, 683-684 (Tex. App.—Austin 2005, no pet.). Here neither requirement for a
settlement credit was met.
A.
Defendants failed to establish indivisible injury
The first requirement for a settlement credit is that the harm must be identical and
indivisible to justify a settlement credit. First Title Co. v. Garrett, 860 S.W.2d 74 (Tex.
1993). Stated another way, there must be "no rational basis for distinguishing between
the damages sought in one case and the damages underlying a settlement in another
case." In re Frank A. Smith Sales, Inc., 32 S.W.3d 871, 874 (Tex. App.—Corpus Christi
2000, no pet.). Several rational bases exist that distinguish the amount recovered by M r .
Pierre in the resolution of the Greenstreet case and the damages at issue in this case.
1.
Different amounts
Indisputably $400,000 differs from $275,000. The res at issue in the Greenstreet
litigation was $400,000, with interest, on deposit in the registry of the Court, an amount
to which each party asserted ownership. In the case at bar, the jury found that a different
18
amount, $275,000, was the damage caused by the malpractice of M r . Steinbach.
2.
Different computation methodology
In the Greenstreet case the amount at issue was a liquidated amount, $400,000,
that had been deposited as earnest money and had become an identifiable res under the
control of the Court. If the case proceeded to its resolution, M r . Pierre would either get
all of the money or only $100.
In the malpractice case, the jury had to assess tort damages by deciding the
amount of harm caused to M r . Pierre by keeping the property tied up for more than seven
months. The earnest money amounts were evidentiary, but so too were other factors such
as M r . Pierre's voluntary agreement to amend the Greenstreet contract and expand the
initial review period o f 80 days without additional earnest money. (RR 2-45). Thus, the
jury was not tied to and did not find that the damages were equal to the earnest money of
$400,000. In fact, the $275,000 damage award did not match up with any combination
of the four $100,000 earnest money deposits. Rather, the jury decided that $275,000 was
the reasonable compensation for the mess M r . Pierre got into by signing the contract and
being unable to market the property while it was tied up in the Greenstreet contract.
In the Greenstreet case, the court had no discretion to decide the value of the harm
caused to M r . Pierre. A set amount was at issue, and on deposit with the court. Its
disposition was decided by contract. The situation was essentially winner-take-all. I f
the court decided Greenstreet met its deadline, the money would go to it. Otherwise, M r .
Pierre got it.
19
3.
Different evidentiary issues
Case law explains that a key factor in determining whether a settlement
compensated for the same injury is whether "the evidence supporting each cause o f action
is the same." Buccaneer Homes of Ala., Inc. v. Pelis, 43 S.W.3d 586, 590 (Tex. A p p . —
Houston [1st Dist.] 2001, no pet.). The evidence supporting this case focused primarily
on what happened before the contract was executed on July 16, 2007. The issues in the
Greenstreet case focused on what happened almost five months later on or about
December 3, 2007: D i d Greenstreet meet its deadline for making an initial earnest
money deposit to extend its right to withdraw from the contract and still receive a refund
of virtually all the earnest money?
4.
Difference on attorney's fees
Attorney's fees are recoverable in a contract action and were at issue in the
Greenstreet litigation. In a pure negligence case, such as that brought against M r .
Steinbach, attorney's fees are not an element of damages. Accordingly, resolution of the
Greenstreet case included settlement for a harm (attorney's fees) that could not be
recovered in the tort action.
B.
Defendants failed to establish joint liability
A second fundamental requirement for a credit is: "The nonsettling defendant may
only claim a credit based on the damages for which all tortfeasors are jointly liable."
See, e.g. CTTIPriesmeyer, Inc. v. K&OLtd.
P'ship, 164 S.W.3d675, 683-684 (Tex.
App.—Austin 2005, no pet.); Bartley v. Guillot, 990 S.W.2d 481, 484-485 (Tex. A p p . —
20
Houston [14th Dist.] 1999, pet. denied) (no set off under Chapter 33 unless payment by a
joint-tortfeasor); LJ Charter, L.L.C v. Air Am. Jet Charter, Inc., N o . 14-08-00534-CV,
2009 Tex. A p p . L E X I S 9469 (Tex. App.—Houston [14th Dist.] Dec. 15, 2009, pet.
denied) (mem. op) ("non-settling defendant is only entitled to a settlement credit based on
the damages for which all defendants are jointly liable.. . [Because defendants] were not
parties to the Agreement, they could not be jointly liable for the breach o f contract
damages.").
Because it is undisputed that the judgment in this case results from a tort, and the
amounts received as a result of the Greenstreet case arise solely from contract claims,
there can be no settlement credit. Even i f there were an exception to the rule against
offsetting tort damages with contract damages, it would not apply in this case. There is
still a requirement of "joint liability." Greenstreet could not have joined M r . Steinbach as
a defendant in its suit over the earnest money, and M r . Steinbach did not and could not
submit the responsibility of Greenstreet under Chapter 33.
III.
The joint liability cases are not wrongly decided as defendants argued below
The defendants' response to the cases articulating the joint liability requirement is
to claim that the cases were wrongly decided. They argued below that that CTTI
Priesmeyer, Inc. v. K&O Ltd. P'ship should not guide the court because "the court's
analysis and reasoning in that case is flawed and has not been followed in subsequent
cases." ( C R 316). The first case defendants cited after this assertion is Galle, Inc. v.
Pool, 262 S.W.3d 564, 571 (Tex. App.—Austin 2008, pet. denied). In Galle, the
21
settlement credit was applied, but it was not because the court disapproved the analysis in
CTTI Priesmeyer.
To the contrary, the court cited that case with approval. Galle, 262
S.W.3d at 573. Moreover, Galle's analysis reflects the reasoning in that case. For
example, the Galle Court reasoned: "the negligent misrepresentation damages the jury
awarded were based on pleading and evidence o f a common harm or injury." Id. at 574.
Galle illustrates the kind o f case where a settlement credit has been found. It was
a mold case, alleging malfeasance and negligent misrepresentation by a contractor and
the insurer that hired it. Although the plaintiff also sued the insurer for statutory and
contractual violations, the court emphasized, "The Pools sought recovery from Galle for
the same harm for which they had sought recovery from Allstate. In their live pleadings
at the time of trial, the Pools asserted a common cause of action for negligent
misrepresentation against all 'Defendants' collectively." Id. at 571. Unlike Galle, the live
pleadings in this case contained no common causes o f action against the Steinbach
defendants and Greenstreet, and none existed.
Generally, courts do not apply settlement credits in tort actions for settlements o f
breach o f contract claims. The few cases that have done so arise in circumstances unlike
those in this malpractice case. Moreover, as the Austin Court noted in the CTTI opinion,
those cases have a misplaced focus:
We acknowledge that there are cases in which the courts have applied the
one satisfaction rule and granted settlement credits or required an election
of remedies where there are co-existing tort and contract claims. See Burke
v Union Pac. Res. Co., 138 S.W.3d 46 (Tex. App.—-Texarkana 2004, pet.
filed); Oyster Creek Fin. Corp. v. Richwoodlnv. II, Inc., N o . 01-02- 00788,
176 S.W.3d 307, 2004 Tex. A p p . L E X I S 7269 (Tex. App.—Houston [1st
22
Dist.] Aug. 12, 2004, pet. denied); Goose Creek Consol Indep. School
Dist. v. Jarrar's Plumbing, Inc., 74 S.W.3d 486 (Tex. App.—Texarkana
2002, pet. denied). In those cases, the courts have focused on the indivisible
nature of the injury to the plaintiffs, and have not discussed the requirement
of joint liability. We rind that focus to be misplaced and decline to follow
those decisions. See R E S T A T E M E N T (THIRD) O F T O R T S :
A P P O R T I O N M E N T O F L I A B I L I T Y § 26, cmt. g (2000) (indivisible
nature of the injury is only the proper inquiry where the contributing factors
are all actions of the plaintiff and tortfeasors). If we were to hold that, due
to the indivisible nature of the resulting injury, breach o f contract
defendants and tort defendants are jointly and severally liable for all
damages, we would be forced to hold a person not a party to a contract
liable for the breach of that contract.
Id. at 684-685.
Not only are the mixed theory cases subject to the criticisms articulated in CTTI,
none of them involve situations similar to the case at bar. In Burke the settlement credit
at issue arose from a settlement with a co-defendant sued for tort claims as well as
contract claims in the same litigation in which a settlement credit was sought by a nonsettling defendant. Burke v. Union Pac. Res. Co., 138 S.W.3d 46, 56 (Tex. A p p . —
Texarkana 2004, pet. denied). The court held that the plaintiff had failed to demonstrate
how much of the settlement was allocable to contract claims and how much to tort
claims. Here the only claims against Greenstreet were for contract claims and thus the
entire settlement amount is allocated to the contract-based claim.
Oyster Creek also involved a settlement by a co-defendant in the same lawsuit in
which a settlement credit was sought. In that case, the effort to couch the settlement as
relating to a breach o f contract was suspect because it was undisputed "that no
contractual right or obligation existed between [the plaintiff] and [the settling party] until
23
they entered into a settlement agreement. " Oyster Creek Fin. Corp. v. Richwood Invs. II,
Inc., 176 S.W.3d 307, 328 (Tex. App.—Houston [1st Dist.] 2004, pet. denied) (emphasis
in the original). In this case, M r . Pierre had only breach o f contract claims against
Greenstreet from the very beginning. There can be no allegation o f contrivance to
fabricate a contract claim settlement.
The final case discussed in CTTIPriesmeyer
is Goose Creek Consol. Indep.
School Dist. v. Jarrar's Plumbing, Inc., 74 S.W.3d 486 (Tex. App.—Texarkana 2002,
pet. denied). A school district sued a general contractor for damages to school buildings.
The contractor brought a third party action against a plumbing company, claiming it too
was liable to the school district for those damages. The contractor settled with the school
district, which proceeded to trial against the plumber and won. The court held that the
plumbing company was entitled to a settlement credit. Unlike Goose Creek, no third
party claim could have been brought by Greenstreet against Steinbach. There is no
legitimate claim that Greenstreet and M r . Steinbach were joint tortfeasors. Thus, no
credit is appropriate.
IV.
Other cases cited by defendants are not analogous
In their arguments below, Defendants argued for a credit by analogizing this case
to a series o f cases that are completely dissimilar. Thus they cited Allan v. Nersesova,
307 S.W.3d 564 (Tex. App.—Dallas 2010, no pet.), in which the plaintiff had sued a
number of parties for causing $ 12,885.51 in water damage to her apartment. The
damages to which the settling party contributed were the same as those sought against the
24
trial defendant. In the words of the court, the plaintiff "alleged these injuries were caused
by the settling defendant and the appellees." Id. at 574. The court applied the onesatisfaction rule so that plaintiff would not recover more than the amount at issue
$12,885.51. Unlike the plaintiff in Allan, the plaintiff here has not alleged joint causation
of unitary damages, and unlike Allan, entering judgment on the verdict w i l l not result in
the plaintiffs receiving more than the amount o f damages at issue in the case against the
settling party.
Similarly, defendants relied on Cottman Transmission Sys., LLC v. FVLR
Enterprises, LLC, 295 S.W.3d 372 (Tex. App.—Dallas 2009, pet. denied). That case has
nothing to do with settlement credits. Rather, the plaintiff submitted both tort and
contract causes of action for the same conduct against a single defendant, obtaining jury
findings o f identical damages on the tort and contract claims. The court said it did not
need to determine whether error occurred with respect to the tort claims, because the
damages were sustainable based on the contract findings.
Defendants also cited Emerson Electric Co. v. American Permanent Ware Co.,
201 S.W.3d 301, 314 (Tex. App.—Dallas 2006, no pet). In that case, plaintiff sued both
Maytag and Emerson in the same action because o f a defective heating element for a 15second bagel toaster. Maytag was the original owner of the factory where the heating
element was produced. The factory was later bought by Emerson. Both companies
participated in the same way in the design of the allegedly defective product. Thus, a
25
settlement by one was properly credited against the other so that the plaintiff would not
recover more than one satisfaction of the amount at issue.
Defendants cited Tompkins v. Cry, 202 F.3d 770, 786 (5th Cir. 2000), to argue
against the indisputable fact that the $400,000 on deposit in the registry of the Court (the
amount at issue in the Greenstreet case) differs in amount from the $275,000 that was
found by the jury to be the damage caused by the malpractice of M r . Steinbach.
Tompkins involved a defective jury submission that permitted double recovery of both
emotional distress and mental anguish. A s the court explained, "There was nothing,
either in the general instructions or within any of the individual sections of the verdict
form, that explained that the Tompkinses were not entitled to recover twice for the same
injuries—the emotional distress and mental anguish—even though each of these same
injuries appeared under more than one tort." Id. at 785.
Unlike dual recovery o f emotional distress and mental anguish for the same event,
this malpractice case and the Greenstreet case were not about the same event. This
malpractice case was about M r . Steinbach's negligence that caused the plaintiff to enter
into a contract he would not have entered. The Greenstreet case was about events months
later when the issue was whether Greenstreet had made timely elections to extend its
review period and maintain the refundability o f earnest money.
N o r is this a case like Berry Prop. Mgmt. Inc. v. Bliskey, 850 S.W.2d 644 (Tex.
App—Corpus Christi 1993, writ dism'd by agr.), in which the plaintiff was not permitted
to recover separately for both D T P A and negligence damages findings for the same
26
event. The facts of this case are also nothing like Buccaneer Homes of Alabama, Inc. v.
Perils, 43 S.W.3d 586 (Tex. App.—Houston [1st Dist.] 2001, no pet.). That case
followed the rule, articulated above, that a credit may be appropriate i f the evidence
supporting the causes o f action are the same. In that case, the evidence was identical.
The plaintiff had sued a mobile home manufacturer for selling a defective home. Yet, the
plaintiff had already recovered from the retailer whom the court held to be jointly liable
for the same damages. In this case at bar, Greenstreet was not and could not have been
jointly liable for the malpractice of M r . Steinbach.
In short none of the cases cited by defendants are similar to the facts before this
court. The res at issue in the Greenstreet litigation was $400,000, with interest, on
deposit in the registry o f the Court, an amount to which each party asserted ownership.
In the case at bar, the jury found that a different amount, $275,000, was the damage
caused by the malpractice of M r . Steinbach.
V.
Settlement credits are not a one-way street
A good question to test the defendant's theory is to ask whether Greenstreet would
have been entitled to j o i n Steinbach in the case against it as a party responsible for
plaintiffs damages or claim a credit i f plaintiff had first settled his malpractice claim
with Steinbach before suing Greenstreeet. N o authority supports having a party to a
contract inpleading the other party's lawyer claiming he committed malpractice that
allowed the defendant to get a better deal.
27
Moreover, the Court would have had no authority to award less to M r . Pierre than
the full $400,000 on deposit with it had it determined Greenstreet indeed blew its
deadlines. Defendants can cite no cases holding that a settlement credit can be a one-way
street I f Greenstreet could not get a settlement credit from Steinbach, Steinbach can not
get one from Greenstreet.
VI.
Alternative applications of the oae-satisfaction rule
The one-satisfaction rule is a doctrine designed to prevent windfalls. Crown Life
Ins. Co. v. Casteel, 22 S.W.3d 378, 390 (Tex. 2000). It should not be used to provide a
windfall to the defendant. Thus, any application of the rule must prevent injustice. In
this case M r . Pierre was under no obligation to incur the substantial expense of costly
contract litigation against Greenstreet in an effort to mitigate his damages. Nevertheless,
M r . Steinbach prevailed upon the trial court to first reduce the $275,000 damages in the
case by 30% to reflect M r . Pierre's negligence and then deduct the full $180,501.48 paid
to M r . Pierre and his counsel.
While disputing application of the one-satisfaction rule, plaintiff proposed to the
trial court two ways in which the rule could be applied more equitably to this case. In the
alternative, plaintiff advances each method on appeal.
First, as plaintiff argued below the amount M r . Pierre actually received from the
Greenstreet litigation as established by his affidavit was $103,527.13. ( C R 53). The
remainder went to his lawyers as the cost of mitigating the damages he suffered.
The
jury's damage finding of $275,000 in this case is still below a damage cap computed by
28
deducting the amount M r . Pierre actually received from the Greenstreet litigation from
the amount originally at issue in that lawsuit.
3
Accordingly, the total does not exceed the
cap and judgment should be entered on the verdict for $192,500 (70% o f $275,000).
If any amount should be deducted it should be only the amount actually received
by M r . Pierre, $103,527.13. It should not include the portion received by his lawyers in
the effort to mitigate damages. Costs of mitigating damages are traditionally considered
part o f a party's damages. Texas & P. R. Co. v. Mercer, 90 S.W.2d 557, 560 (Tex. 1936)
("The plaintiff owed the duty to use ordinary care to mitigate his damages and is entitled
to recover, as damages, the amount reasonably expended in his effort so to do.").
Reducing the judgment by the amount received by M r . Pierre results in a judgment o f
$171,472.87 ($275,000 - $103,527.13 = $171,472.87).
If the portion of the distribution o f earnest money that went to M r . Pierre's
lawyers must be included in the computations, there is a more equitable way to proceed
than was employed by the trial court. The amount on deposit after the accumulation of
interest was $401,114.40, of which $180,501.48 was paid jointly to plaintiff and his
lawyers.
4
Doing the math results in a remaining amount at issue for which M r . Pierre
had not been compensated though the Greenstreet litigation o f $220,612.92. If the onesatisfaction rule must be applied in that manner to set a cap, the cap should thus be
$220,612.92. Applying that cap reduces the $275,000 damages found by the jury to
3
That amount is computed as follows: $401,114.40 - $103,527.13 - $297,587.27.
The check to Mr. Pierre and his counsel was for $180,501.48, of which $501.48 was interest. It is assumed that the
Greenstreet check reflected interest at the same rate. If so, Greenstreet would have received $612.92 in interest, and
the total interest earned would have been $1,114.40.
4
29
$220,612.92. If the 70% - 30% allocation by the jury in response to Question 3 of the
verdict form is applied to the capped damages o f $220,612.92. the resulting judgment
would be $154,429.04.
I S S U E 2: N O L E G A L L Y O R F A C T U A L L Y S U F F I C I E N T E V I D E N C E S U P P O R T S
T H E J U R Y ' S 30% N E G L I G E N C E F I N D I N G A G A I N S T P L A I N T I F F .
In answer to Question 1 the jury found Mi*. Pierre negligent. ( C R 27). In answer
to Question 2, it attributed 30% of the negligence to Mr. Pierre. ( C R 28). The only
negligence i n the record against M r . Pierre was in failing to discover the loophole in the
contracts related to the earnest money.
N o case supports the proposition that a lay client can be held to have been
negligent for failing to do what he employs the lawyer to do—interpret a lengthy contract
full o f confusing cross referenced provisions. To the contrary, in other professional
contexts, contributory negligence of the client requires doing something that prevented
the professional from doing his job. Greenstein, Logan & Co. v. Burgess
Marketing,
Inc., 744 S.W.2d 170, 190 (Tex. App.—Waco 1987, writ denied) (contributory
negligence of the client is a defense only where it has contributed to the professional's
negligence.)
Here there was no evidence that Mi*. Pierre prevented Mr. Steinbach from learning
about the loophole interjected by Greenstreet in the contract. To the contrary, M r .
Steinbach admitted knowing about it. ( R R 2-121). The only issue was whether he
complied with his duty to inform M r . Pierre. M r . Steinbach said he did, M r . Pierre said
30
he did not.
( R R 2-44,121). The jury's finding that M r . Steinbach was negligent resolved
that issue in favor of M r . Pierre.
This is not a case o f a client negligently failing to note an obvious error in an
easily identifiable business point in a contract.
Here the loophole was created by the
interplay of provisions deep within the boilerplate of the contract.
Paragraph 3 says the
earnest money is non-refundable, but paragraph 7 sets up a mechanism under which it
can become refundable. Without being alerted to the issue in advance, even lawyers can
miss such nuances. N o one testified at trial that recognition of this kind of trap for the
unwary is within the competence o f a lay person.
Concluding that a lawyer can escape any portion of his liability by asserting that
his client should have done the legal work the lawyer was retained to perform, would not
only be unprecedented, it would strike at the very core of the confidence that the public is
entitled to have in the lawyers they hire. A s a matter o f law, the contributory negligence
finding simply cannot stand.
I S S U E 3: J U D G M E N T S H O U L D H A V E B E E N E N T E R E D A G A I N S T D E F E N D A N T
T H E S T E I N B A C H L A W F I R M B A S E D O N ITS U N D I S P U T E D V I C A R I O U S
L I A B I L I T Y F O R T H E C O N D U C T OF D E F E N D A N T S T E I N B A C H
Plaintiff sued both R . Scott Steinbach and The Steinbach L a w Firm, alleging that
M r . Steinbach was "agent" for the firm. ( C R 8). Both the individual and the entity
answered. ( C R 14). After the verdict, the Steinbach L a w F i r m argued for judgment on
the ground that separate jury issues should have been submitted as to it. ( C R 223).
Plaintiff argued that it was undisputed that M r . Steinbach was the firm's agent and that it
31
was vicariously liable for his negligence. ( C R 351). The trial court did not enter
judgment against The Steinbach L a w Firm.
After Plaintiff moved to modify, amend, or correct the judgment ( C R 368), The
Steinbach L a w F i n n , argued for the first time, without evidentiary support that it was a
sole proprietorship and that the court was correct in not entering judgment against it for
that reason. ( C R 375). The Steinbach L a w F i r m did not plead that it was not liable in
the capacity sued or any other defense under Rule 93 of the Texas Rules o f C i v i l ( C R
14), nor did it seek to have its status changed to that o f a sole proprietorship or mere
"d/b/a" before the judgment was signed.
Neither defendant introduced any evidence at trial that elucidated what kind o f
entity The Steinbach F i n n was. Nevertheless, abundant evidence established that it was
an entity in whose name, M r . Steinbach performed services in this case. The Greenstreet
contract contained a provision requiring that any notice sent to M r . Pierre also be sent to
" T H E S T E I N B A C H L A W F I R M " after which M r . Steinbach's name was listed. (P.Ex.2
at page 14). Additional correspondence from M r . Steinbach was signed by him on behalf
of the Steinbach L a w Firm. (P.Ex. 25).
Thus, the doctrine of vicarious liability makes the firm liable for M r . Steinbach's
conduct. Minyard Food Stores v. Goodman, 80 S.W.3d 573, 578 (Tex. 2002). The
claim that a jury issue should have been submitted on vicarious liability o f The Steinbach
law firm for the conduct of M r . Steinbach is fallacious. That M r . Steinbach was acting as
agent for The Steinbach L a w firm was undisputed. Thus, there was no disputed fact issue
that required the submission of a separate jury issue. See Taylor Pub. Co. v. Systems
Marketing Inc., 686 S.W.2d 213, 217 (Tex. App.—Dallas 1984, writ denied) ("When the
damage components are undisputed or uncontroverted, it is unnecessary to submit a
damage issue to the jury."); Livezey v. Putnam Supply Co., 30 S.W.2d 902, 905 (Tex.
Civ. App.—Eastland 1930, writ r e f d) ("*[0]nly disputed issues o f fact should be
submitted to the jury.").
PRAYER
For the reasons articulated above, M r . Pierre's prays that the Court reverse the
judgment o f the court below and render judgment in his favor against both R . Scott
Steinbach and The Steinbach L a w Firm, in one of the following amounts, which are
stated in decreasing order of preference:
a.
i n the amount o f $275,000, by disregarding the jury's 30%
negligence finding against M r . Pierre, and not making a deduction
based on funds received from the Greenstreet litigation, or in the
alternative,
b.
i n the amount $220,612.92 to reflect the damages as adjusted to a
cap representing the uncompensated portion of the funds on deposit
in the Greenstreet case ($401,114.40 -$180,501.48 - $220,612.92),
or in the alternative,
c.
in the amount of $192,500, to enter judgment on the verdict, or in
the alternative,
d.
in the amount o f $171,472.87 to enter judgment disregarding the
jury's 30% negligence finding against M r . Pierre, but deducting the
amount actually received M r . Pierre after discharging the costs
necessary to mitigate his damages in the Greenstreet case($275,000 $103,527.13 - $171,472.87), or in the alternative.
33
e.
in the amount of $154,429.04 to reflect 70% o f the damages as
adjusted to a cap representing the uncompensated portion of the
funds on deposit in the Greenstreet case ($401,114.40 -$180,501.48
= $220,612.92 x 70% = $154,429.04).
In the alternative, Plaintiff further prays for a new trial because of the factual
insufficiency of the evidence to support the jury's negligence finding against plaintiff.
Finally, plaintiff prays for cost o f court, and such other and further relief as the court
deems just.
Respectfully Submitted,
Cary Sthachter, N o . 17719900
SCHACHTER HARRIS, LLP
220 Canal Centre
Irving, Texas 75039
(214)999-5700; Fax (214)999-5747
ATTORNEYS FOR APPELLANT,
JEAN PIERRE
CERTIFICATE OF SERVICE
I certify that on June 3, 2011, a true and correct copy of Appellant's B r i e f was
served on appellees, R . Scott Steinbach and The Steinbach L a w F i n n , through counsel o f
record, A l i s o n Moore, by electronic service in accordance with Local Rule 3. In addition,
34
a copy of Appellant's Brief was sent to appellees' counsel of record listed below via e¬
mail addressed to:
A l i s o n H . Moore, Esq.
Thompson, Coe, Cousins & Irons, L . L . P .
Dallas, Texas 75201
[email protected]
Stephen C . Richman, Esq.
Thompson, Coe, Cousins & Irons, L . L . P .
Dallas, Texas 75201
[email protected]
Cary Schachter
35
N o . 05-11-00265-CV
J E A N PIERRE,
Appellant,
V.
R. S C O T T S T E I N B A C H A N D T H E S T E I N B A C H L A W F I R M ,
Appellee.
APPELLANT'S APPENDIX
LIST OF D O C U M E N T S
1.
Final Judgment dated December 14, 2010
Tab A
2.
Charge of the Court
Tab B
3.
Plaintiffs Exhibit 1: Letter of Intent dated June 21, 2007
Tab C
4.
Plaintiffs Exhibit 2:Final Contract dated July 13, 2007
Tab D
36
Tab A
0(11050
CAUSE NO. DC-09-12021
§
§
§
§
§
JEAN PIERRE,
Plaintiff,
v.
R. SCOTT STEINBACH AND THE
STEINBACH LAW FIRM,
Defendants.
IN THE DISTRICT COURT OF
DALLAS COUNTY, TEXAS
§
§
§
192ND JUDICIAL DISTRICT
FINAL JUDGMENT
On September 13, 2010, ibis case was called for triaL Plaintiff, Jean Pierre, appeared in
person and through his attorney announced ready for trial. Defendant, R. Scott Steinbach,
appeared in person and through his attorney announced ready for trial.
After a jury was impaneled and sworn, it heard the evidence and arguments of counsel.
In response to the jury charge, the jury made findings that the court received, filed, and entered
of record. Plaintiff and Defendants filed motions forjudgment
The Court hereby RENDERS judgment for Plaintiff Jean .Pierre; andagainst Defendant R.
Scott Steinbach.
Therefore, the Court orders that Plaintiff recover damages from Defendant in the sum of
$11,998.52, and prejudgment and post-judgment interest calculated in accordance •with
applicable statute.
This is a final judgment and completely disposes of all matters in this case. The court
therefore orders execution to issue for this judgment
I:
TabB
J
CAUSE-NO. DC-09-12021-K
JEAN PIERRE,
Plaintiff,
v.
R SCOTT STEINBACH and
THE STEINBACH LAW FI RM,
Defendant.
§
§
§
§
§
§
§
DALLAS COUNTY, TEXAS
CHARGE OF THE COURT
LADIES AND GENTLEMEN OF THE JURY:
This case is submitted to you by asking questions about the facts which you must decide from
the evidence you nave heard in this trial. You are the sole judge of the credibility of the witnesses
and the weight to be given their testimony, but in matters of law, you must be governed by the
instructions in this charge. In discharging your responsibility on this jury, you will observe all the
instructions which have previously been given you. I shall now give you additional instructions
which you should carefully and strictly follow during your deliberations.
1. Do not let bias, prejudice or sympathy play any part in your deliberations.
2. In arriving at your answers, .consider only the evidence introduced here under oath and
such exhibits, if any, as have been introduced for your consideration under the rulings of the Court,
that is, what you have seen and heard in this courtroom, together with the law as given you by the
Court. In your deliberations, you will not consider or discuss anything that is not represented by
the evidence in this case.
3. Since every answer that is required by the charge is important, no juror should state or
consider that any required answer is not important.
CHARGE OF THE COURT - Page 1
23
4. You must not decide who yon think should win, and then try to answer the questions
accordingly. Simply answer the questions, and do not discuss nor concern yourselves with the
effect of your answers.
5. You will not decide the answer to a question by lot or by drawing straws, or by any other
method of chance. Do not return a quotient verdict. A quotient verdict means that the jurors agree
to abide by the result to be reached by adding together each juror's figures and dividing by the
number of jurors to get an average. Do not do any trading on your answers; that is, one juror
should not agree to answer a certain question one way if others will agree to answer another question
another way.
6. You may render your verdict upon the vote of ten or more members of the jury. The
same ten or more of you must agree upon all of the answers made and to the entire verdict. You
will not, therefore, enter into an agreement to be bound by a majority or any other vote of less than
ten jurors. If the verdict and all of the answers therein are reached by unanimous agreement, the
presiding juror shall sign the verdict for the entire jury. If any juror disagrees as to any answer
made by the verdict, those jurors who agree to all findings shall each sign the verdict.
These instructions are given yon because your conduct is subject to review the same as that
of the witnesses, parties, attorneys and the Judge. If it should be found that you have disregarded
any of these instructions, it will be jury misconduct, and it may require another trial by another jury.
Then all of our time will have been wasted.
The presiding juror or any other who observes a violation of the court's instructions shall
immediately warn the one who is violating the same and caution the juror not to do so again.
CHARGE OF THE COURT -- Page 2
•.
24
I
When words are used in mis charge in a sense which varies from the meaning commonly
understood, }'ou are given a proper legal definition, which you are bound to accept in place of
any other meaning.
Answer "Yes" or "No" to all questions unless otherwise instructed. A "Yes" answer must
be based on a preponderance of the evidence. If you do not find that a preponderance of tie
evidence supports a "Yes" answer, then answer "No."
The term "preponderance of the evidence" means the greater weight of credible
evidence admitted in this case. A preponderance of the evidence is not measured by the number of
witnesses or by the number of documents admitted in evidence. For a fact to be proved by a
preponderance of the evidence, you must find that the fact is more likely true than not true.
Whenever a question requires an answer other than a "Yes" or "No", your answer must be based on
a preponderance of the evidence unless you are otherwise instructed.
A fact may be established by- direct evidence or by circumstantial evidence or both.
A fact is established by direct evidence when proved by documentary evidence or by witnesses
who saw the act done or heard the words spoken. A fact is established by circumstantial
evidence when it may be fairly and reasonably inferred from other facts proved.
"Ordinary care" when used with respect to the conduct of R. Scott Steinbach, means that
degree of
care that an attorney of ordinary prudence would use under the same or similar
circumstances.
"Ordinary care" when used with respect to the conduct of Jean Pierre, means that degree
of
care that would be used by a person of ordinary prudence under the same or similar
circumstances.
"Negligence" when used with respect to the conduct of R. Scott Steinbach, means failure
to use- ordinary care, that is, failing to do' that which an attorney of ordinary prudence would have
done under the same or similar circumstances, or doing that which dfrparcorwf ordinary prudence
K
25
would not have done under the same or similar circumstances.
"Negligence" when used with respect to the conduct of Jean Pierre, means the failure to
use ordinary care, that is, failing to do that which a person of ordinary prudence would have done
under the same or similar circumstances, or doing thatwhich a person of ordinary prudence would
not have done under the same or similar circumstances.
"Proximate cause" when used with respect to the conduct of R. Scott Steinbach, has two
parts:
1.
A proximate cause is a substantial factor that brings about an event and without
which, the event would not have occurred; and
2.
A proximate cause is foreseeable.
"Foreseeable" means that an attorney using
ordinary care would have reasonably anticipated that his acts or failure to act would
have caused the event or some similar event.
. There may be more than one proximate cause of an event.-
"Proximate cause" when used with respect to the conduct of Jean Pierre, has two parts:
1.
A proximate cause is a substantial factor that brings about an event and without
which, the event would not have occurred; and
2.
A proximate cause is foreseeable. "Foreseeable" means that aperson using ordinary
care would have reasonably anticipated that his acts or failure to act would have
caused the event or some similar event.
There may be more than one proximate cause of an event
CHARGE OF THE COURT
Page 4
I
QUESTION NUMBER 1
Did the negligence, i f any, of the persons named below proximately cause the injury
in question?
tc
,:>
Answer "Yes or No for each of the following:
a.
R, Scott Steinbach
b.
Jean Pierre
27
J
If you have answered "Yes" to Question Number 1 for both persons named, then answer
Question Number 2. Otherwise, do not answer Question Number 2.
QUESTION N U M B E R 2
For each person you found caused or contributed to cause the injury, find the percentage of
negligence attributable to each:
The percentages you find must total 100 percent The percentages must be expressed in
whole numbers. The negligence attributable to a person named below is not necessarily measured
by the number of acts or omissions found.
a.
R. Scott Steinbach
b.
Jean Pierre
TOTAL
100%
n
.28
J
Answer Question Number 3, i f you answered "Yes" for R. Scott Steinbach to Question
Number 1 and answered:
1.
"No" for Jean Pierre to Question Number 1, or
2.
50% or less of Jean Pierre to Question Number 2.
Otherwise, do not answer Question Number 3.
QUESTION NUMBER 3
What sum of money, if paid now in cash, would fairly and reasonably compensate Jean Pierre
for his economic loss, if any, that resulted from the injury in question?
Do not include interest on any amount of damages you find. Do not reduce the amounts, if
any, in your answers because of the negligence, i f any, of Jean Pierre.
Answer in dollars and cents for damages, i f any.
Answer: $
After you retire to the jury room, you will select your own presiding juror. Then you
will deliberate upon your answers to the questions asked.
It is the duty of the presiding juror:
1. To preside during your deliberations;
2. To see that your deliberations are conducted in an orderly mariner and in
accordance with the instructions in this Charge;
3. To write out and hand to the bailiff any communication concerning the
case which you desire to have delivered to the Judge;
4. To vote on the questions;
5. To write your answers to the questions in the spaces provided; and
6. To. certify to your verdict in the space provided for the presiding juror's
signature or to obtain the signatures of all the jurors who agree with the
verdict i f your verdict is less than unanimous.
After you have retired to consider your verdict, no one has any authority to communicate with
you except the bailiff of this court. You should not discuss the case with anyone, not even with
other members of the jury, unless all of you are present and assembled in the jury room.
Should anyone attempt to talk to you about the case before the verdict is returned, whether
at the courthouse, at your home, or elsewhere, please inform the judge of this fact.
When you have answered all of the questions you are required to answer under the
instructions of the judge, and your presiding juror has placed your answers in the spaces
provided and the following certificate has been signed in accordance with the instructions
in this charge, you will inform the bailiff at the door of the jury room that you have
reached a verdict, and then you will return into court with your verdict.
0
CERTIFICATE
We, the jury, have answered the above and foregoing questions as
herein indicated, and herewith return same into Court as our verdict, ^jj
(To be signed by the Presiding Juror ONLY i f each and every juror agrees to all the
answers to each and every question.)
PRESIDING J U R O R
(If. A N Y juror disagrees with any answer made to any question, then those same 10 or
more jurors who agree upon all the answers made to each and every question must sign on these
lines, indicating that the answers made are their verdict.)-
m
31
TabC
GRE E N
P
R
O
P
STREET
E
R
T
I
E
S
June 21,2007
fax: 972-661-8424
email: [email protected]
Jean Pierre
MiHennivini Property Management
P O Box 112
Lewzsville, TX 75067
Re:
Greenstreet Properties, LLC
Proposed Purchase of Property at NEC Dallas North ToUway and Stone
Brook Parkway? Frisco, TX (approximately 16.5 Net usable acres — the
"Property" - approximately depicted on exhibit which is to follow).
Dear Jean Pierre:
This letter is to outline general terms pursuant to which Greenstreet Properties, L L C
proposes to purchase the above-referenced Property.
L
Buyer: Greenstreet Properties, L L C or a nominee (norninee to be a company in
which Greenstreet Properties will own an equity interest).
2.
Purchase Price: $8,426,188 [provided, however, if a survey of the Property later
shows the net usable acres of the property to be more or less than 716,997 square
feet, the price shall be adjusted to achieve a total purchase price of $11.75 per
square foot.]
3.
Deposit; $100,000, to be deposited within three (3) business days after opening of
escrow. Deposit to be applicable to the purchase price but non-refundable after the
due diligence period and permitting period, other than due to a Seller default or
inability to secure permits.
4.
Due diligence: 60 days after the later of operung of escrow and delivery to Buyer
copies of the following items, to assist Buyer with its investigation: a current title
cormrutment with all exceptions referenced therein, an existing A L T A survey of the
Property, incorporating the Schedule B items of the title commitment, all
environmental reports, appraisals, site plans, building plans, utility locations,
permits, leases and contracts, information and/or soil reports relating to
geotechnical conditions, and other urformation or documentation in Seller's
possession relating to or pertaining to the Property. The business day which
follows the last day of Due Diligence, and additional earnest amount of $100,000,
shall be deposited into escrow and shall be applicable to the purchase price, but
non-refundable, as with Deposit described above, other man due to a Seller Default.
5400 IB J Freeway, SliJg; 1, Suk& #1460, Dallas, Texas 75710 '
972.371.5640 phohe f
972.371.5641 fax
5.
Closing: 30 days after the expiration of pennitting period, with the right to extend
same for three (3) additional thirty (30) day periods, by depositing into escrow for
each extension the sum of $100,000, applicable to the purchase price but nonrefundable other than due to a Seller default. Seller to convey the Property to Buyer
by customary warranty deed, free and clear of all liens and encumbrances, other
than the matters in the title commitment approved by Buyer in writing during the
due diligence period.
6.
Seller representations:
Seller to provide customary representations in the
purchase agreement, the actual provisions of which shall be negotiated between the
parties when the purchase agreement is prepared.
7.
Property Condition: Buyer's obligations are conditioned upon the Property being
designated as a separate legal parcel which may be legally sold and conveyed to
Buyer.
8.
Closing costs; Taxes: Real property taxes relating to the current tax year shall be
prorated between Seller and Buyer as of closing- Assessments shall be paid in full
by Seller at closing. Seller shall pay the premium for a standard owner's policy of
title insurance in the amount of the Purchase Price, and Buyer shall pay for the
increased premium for issuance to Buyer of an A L T A extended owner's policy of
title insurance, if same is desired by Buyer. The cost of recording the Deed and any
transfer taxes and/or deed tax shall be paid by Seller. Expenses of escrow shall be
shared equally by Seller and Buyer. All other escrow and closing costs shall be
allocated and paid by the parties in accordance with the standard practice in the
county where the Property is located.
9.
Commissions: Seller shall pay a commission of 3% of the Purchase Price to
Brokerage party or parties, which shall include a specific distribution of 1-5% to
Millennium Property Management and 1.5% to J Sena and Associates, Inc.
10.
Additional Property Option: If during feasibility. Buyer chooses to purchase
approximately 3.5 acres of adjacent property to the north then Buyer shall so
indicate such prior to the expiration of Due Diligence. Should such option not be
executed by Buyer, then Buyer shall agree to provide reasonable and customary
vehicular and utility access.
NEC DKT and Stone Brook
June 21.2007
If the enclosed is acceptable to you, please execute this letter and return same to me, and
we shall expect to receive from you a Purchase and Sale Agreement which contains the business
points set forth above.
Very truly yours,
Thomas B, Acevedo, Manager
The foregoing outline is generally acceptable, subject to the parties entering into a formal
purchase and sale agreement.
Print name and title
NEC UtTT and Stone Brook
June 2 i„ 2007
Page 3
TabD
CONTRACT FOR SALE AND PURCHASE OF
UNIMPROVED REAL PROPERTY
THIS CONTRACT FOR SALE AND P U R C H A S E OF UNIMPROVED REAL
PROFERTY (this "Contract") is made and entered into by and between Jean Pierre (the
"Seller"), and Greenstreet Properties of Texas, L L C and/or assigns (the "Purchaser").
WITNESSETH:
WHEREAS, Jean Pierre owns that certain approximately 716,997 square feet of land
located at the northeast corner of Dallas Parkway and Stonebrook in Frisco, Collin County,
Texas (the "Land")* being more fully described on Exhibit " A - l " attached hereto.
WHEREAS, Purchaser is desirous of purchasing the Land and Seller is agreeable to
selling the Land to Purchaser upon the following conditions and agreements.
NOW, THEREFORE, in consideration of the foregoing premises and the respective
undertakings of the parties hereinafter set forth, the receipt and sufficiency of which
consideration are hereby acknowledged, it is hereby agreed as follows:
L
Purchase and Sale of the Land. Subject to the terms hereof, specifically
including, without limitation, Paragraph 15 hereof, Seller shall sell to Purchaser, and Purchaser
shall purchase from Seller, the Land, together with (but without warranty) any and allright,title
and interest of Seller, if any, in and to therightsand appurtenances pertaining to the Land; strips
or gores, roads, easements, streets and rights-of-way founding the Land; all utility capacity,
water rights, licenses, permits, entitlements, and bonds, if any* and all other rights and benefits
attributable to the Land; and all rights of ingress and egress thereto (collectively, the "Additional
Interests'") (the-Land together with the Additional Interests is collectively referred to as the
"Property"), for the sum (the "Purchase Price'') of EIGHT MILLION FOUR HUNDRED
TWENTY-SDC. THOUSAND ONE HUNDRED EIGHTY-EIGHT A N D 00/1OG Dollars
($8,426, 18S.O0)U The Purchase Price shall be payable at Closing (as defined in Paragraph 8
below) in the manner set forth in Paragraph 8 below. If the Survey reveals that the Land
contains more or less than 716,997 Net Square Feet (as hereinafter defined), then the Purchase
Price shall be proportionately decreased or increased, as applicable, so that the Purchase Price
shallibe the number of Net Square Feet of the Land multiplied by $11.75 plus $15,000.00. "Net
Square Feet* shall mean for purposes of this Agreement, the number of gross square feet of Land
less the amount of square feet (or portion thereof) lying within a public streetright-of-way;,flood
plain;, wetlands area, and slope easements.
r
2.
Conveyance of Property. Subject to the terms hereof, Seller hereby agrees to
convey good and indefeasible fee simple title to the Property to Purchaser at the Closing, free
and clear of any and all liens, encumbrances, conditions, easements, assessments and restrictions,
except for the lien for current taxes not yet due and payable and the Permitted Exceptions (as
defined in Paragraph 6 below) and provided, however, that notwithstanding anything seemingly
to the contrary contained herein, the term "Property" as used herein shall not include and there
shall be excepted therefrom all oil, gas and o!ber minerals in, on or under the Land, Purchase
#U0959-vS
SOO'J
1
575269 *S (5>M0.000I7,OOO)
acknowledges that Seller does not own and shall acknowledge same in the Deed (as defined in
Paragraph 8(a) below). Any and all Hens secured by the Property will be released (both in feet
and of record) on or prior to the Closing Date (as defined in Paragraph 8 below), and the only
liens existing following Closing will be the Hens placed upon the Property by Purchaser in
accordance with its purchase of same, if any, and the liens for current taxes not yet due and
payable.
3.
Independent Consideration., Earnest Money, Additional Earnest Money and
Extension Period Within three (3) business days following the day that Seller and Purchaser
execute and deliver a copy of this Contract to the Title Company and the Title Company
acknowledges receipt thereof (the "Effective Date"), Purchaser shall deposit with Community
Title Company, 5944 Luther Lane, Suite 725, Dallas, Texas 75225, Phone Number; (214) 890¬
0134, Fax Number (214) 507-7847, Attention; Rick Payne (the "Title Company")- earnest
money (the "Earnest Money"), in the amount of One Hundred Thousand and No/100 Dollars
($100,000.00), in the form of cash, a cashiers check or wire-transfer. Purchaser hereby instructs
Title Company that all Earnest Money delivered by Purchaser to the Title Company shall be
immediately deposited in an. interest bearing account, with all interest earned thereon to become
a part of the Earnest Money. In the event Purchaser fails to timely deposit any portion of the
Earnest Money or should any check representing any portion of the Earnest Money not be
Supported by good funds, as and when required, this contract shall be deemed null and void. At
the CIosing the Earnest Money shall be credited to me Purchase Price, Unless expressly set
forth otherwise herein, a portion of the Earnest Money, in the amount of One Hundred and.
No/I 00 Dollars ($100.00), shall be non-refundable to Purchaser and shall be distributed to Seller
upon any termination of this Contract as full payment and independent consideration (the
"Independent Consideration") for Seller's execution of this Contract.
T
Purchaser may extend the Review Period (as defined in Paragraph 7 below) for three (3)
additional thirty. (30) day periods (each an "Extension Period"), by :givhig written notice to Seller
prior to the expiration date of the Review Period being extended and prior to expiration of any
and each Extension Period and by depositing, at the time of any such written notice, with the
Title: Company in connection with each Extension Period the sum of $100,000.00 (the
"Additional Earnest Money"), which along with the initial Earnest Money shall be nonrefundable, except as otherwise expressly provided herein. Upon deposit of the Additional
Earnest Money it shall constitute a portion of the Earnest Money.
4,
Deliveries. Within seven (7) days following the Effective Date, the Title
Company shall deliver to Purchaser:
(a)
A current commitment for title insurance dated not earlier than the
Effective Date (ômmitrnent") issued by the Title Company acting as agent for Lawyers Title
Insurance Company, covering the Land, together with true, legible (to the extent available from
the Collin County Clerk's Office) and complete copies of ail documents referred to therein as
exceptions; and
(b)
Current tax certificates or paid tax receipts applicable to the Land from all
applicable taxing authorities.
2
tOO'd
578269 v« (53440.00017.000)
i
(c)
Seller shall deliver copies of the following documents to the extent such
documents exist and are in the possession or control of Seller (i) all tax notices and receipts for
calendar years 2004, 2005 and 2006, including, but not limited to, property, personal, rental and
roadway assessments and current tax statements; (ii) surveys, topographical maps, and
engineering and feasibility studies; (iii) any and all information regarding condemnation notices,
prcêdings and awards; (iv) any and all environmental and critical feature inspection reports in
Seller's possession; (v) any and all information regarding utility availability to the Property,
(vi)!any other documents in the possession or control of Seller that relate to the Property to the
extent requested by Purchases and (vii) any and all other documents and agreements related to
the Property from the City of Frisco, Collin County or other governmental authorities
(coJlectively, the "Documents")- In addition, during the pendency of this Contract, Seller shall
promptly deliver to Purchaser copies of any new Documents that come into the possession or
control of Seller or its agents or ernployees5.
Survey, Purchaser acknowledges receipt of an existing survey of the Land from
Seller. At Purchaser's expense, Purchaser may, within forty (40) days after the Effective Date,
have a current or updated survey of the Land (the "Survey'"), prepared by a duly licensed land
surveyor. Seller in no manner guarantees the accuracy of any survey.
:
6,
Title Review Period. Purchaser shall have the period (the "Objection Period")
commencing on the date hereof and ending on the twentieth (20 ) day after receipt of the Title
Corrimitment and an updated Survey, if any, in which to approve, disapprove of or object to, any
title; items or matters, whether or not disclosed therein. If, during the Objection Period,
Purchaser shall, fail to give written notice to Seller of any such item(s) or matter(s) to which
Purchaser objects, Purchaser shall have waived itsrightsto object to any such items or matters.
Those items or matters to which Purchaser does not object (or waive, as hereinafter provided)
shall be referred to individually as a "Permitted Exception" and collectively, as the "Permitted
Exceptions-"
th
If Purchaser shall tirnely object to any such items or matters during such Objection Period^ then
Seller, during the ten (IQ) day period (the "Cure Period") immediately thereafter may (a) cure or
correct such objections to Purchaser's reasonable satisfaction, but without any obligation to do
so, (b) deliver written notice (the "Cure Response") to Purchaser as to which of Purchaser's
objections it will and/or will not cure prior to or at Closing, or (c) neither of the foregoing. If
Seller shall fail during the Cure Period to cure or correct any of Purchaser's objections or to
notify Purchaser in writing of which objections Seller will cure prior to or at Closing, then
Purchaser may, during the period which expires on the tenth (10 ) day following the earlier to
occur of the delivery of (1) the Cure Response or (2) the expiration of the Cure Period, elect to
terminate this Contract by delivering written notice thereof to Seller and the Tide Company,
whereupon all of the Earnest Money and the Additional Earnest Money shall be returned to
Purchaser, the Independent Consideration shall be paid to Seller, and the parties hereto shall have
no further rights, obligations or liabilities one to the other hereunder other than pursuant to the
radernnity provisions contained in Paragraph 7.
th
In the event that Purchaser fails to timely elect to terminate this Contract in accordance with the
previous sentence, each item or matter to which Purchaser has objected and which Seller has not
cured or committed in writing to cure at or prior to Closing shall be deemed to be waived by
#U0959-v5
^QQ'd
3
578269 v8(53440_00017.000>
.
"f P U
8O02-AO-83J
Purchaser and shall constitute an addirional Permitted Exception. Notwithstanding anything
herein to the contrary, under no circumstances shall Purchaser be required to object to any
existing Hens reflected in the Title Commitment, any other matters shown on Schedule C "
thereto or any liens or encumbrances against the Property created by Seller following the
Effectiye Date without Purchaser s advance written consent, all of which (except for the lien or
liens for taxes not yet due and payable) shall be released or satisfied by Seller at its expense Drior
to Closing.
a
1
7,
Initial Review Period, Purchaser shall have the period commencing on the
Effective Date and ending at 5:00 p-m. local time in Dallas, Texas on me^sb0etir(6ufD) day
thereafter (the. "Initial Review Period") in which to conduct, at Purchaser's sole cost and
expense, any and all physical, environmental, engineering, feasibility and other inspections,
reviews and studies which Purchaser deems necessary and to review and approve all matters
pertaiiung to the Property, in order to determine whether or not to proceed with the Closing.
Thei Initial Review Period as the same be extended is herein referred to as the "Review Period."
In this regard, Purchaser, and/or Purchaser's agents or employees, may have reasonable access to
the iProperty during the Review Period to conduct such studies and inspections; provided,
however, Purchaser shall save, defend, indemnify and hold Seller and the Property
harmless from any and all claims, demands, actions, causes of action, liabilities, costs,
expenses and damages incurred in relation to, or in any manner arisjuag ont 0%, Purchaser's
tests, inspections and studies, including, without limitation, for (i) the cost of any test, study
or inspection,^ (ii) any damage to Property, or (in) any injury or death to person(s);
provided, however, that such indemnify shall not extend to the correction of any preexisting condition merely discovered by Purchaser or any liens, claims, causes of action,
damages, liabilities or expenses that are attributable to the action or inaction of Seller or its
agents or employees- Such indemnity provision shall survive Closing or termination of this
Contract notwithstanding anything seemingly to the contrary contained herein.
In the event, for any reason, that Purchaser, in its sole discretion, deteruunes that the Property is
not suitable, then, on or before the expiration of the Review Period, Purchaser may terminate this
Contract by delivering written notice to Seller, referencing this Contract and staring that "the
Contract is hereby terminated pursuant to Paragraph 7 thereof" in which event all Earnest
Money shall be:returned to Purchaser, inmêdiately after delivery of all studies and due diligence
documents gathered and created by Purchaser to Seller, the Independent Consideration shall be
paidito Seller and the parties hereto shall have no further rights, obligations or liabilities, one to
the other hereunder (other than pursuant to the indemnity provision set forth above). This
provision shall not apply to any termination after the expiration of the Review Period, after
which date and time the Earnest Money and all Addirional Earnest Money shall not be
refundable to Purchaser except as expressly set forth herein. Failure by Purchaser to timely
notify Seller of its election under the previous sentence shall: be deemed to constitute (a)
Purchaser's waiver of its right to terminate this Contract under this Paragraph 7, and (b) all
Earnest Money becoming non-refundable, save and except as expressly provided herein.
During the pendency of this Contract, Purchaser at its sole cost and expense shall be entitled to
file applications with the City of Frisco, Collin County, and other applicable governing
#110959-v5
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authorities to plat or replat the Property in a manner acceptable to Purchaser for its planned
devbloprnent, and to obtain all development coraniitrnenK, entidements, permits and any other
approvals as may be deemed necessary by Purchaser in connection with its contemplated use and
development of the Property, any site development pennits, utility comrnitrnents, entitlements,
xs>ning variances or amendments (all of the foregoing comrnitments, permits, and approvals set
forth hereinabove being collectively referred to herein as the "Approvals**), and Seller agrees to
reasonably cooperate with Purchaser and execute such documents -as may be reasonably required
in connection with the Approvals, Notwithstanding the foregoing, except as otherwise provided
in this Contract, under no circumstances shall any such Approvals impose any burden or be
binding upon the Property prior to Closing, nor shall the same impose any cost or liability on
Seller. Notwithstanding anything to the contrary contained in this Contract, all Earnest Money
and; deposits by Purchaser hereunder shall be refundable i f Purchaser does not obtain the
Approvals by October 26, 2007. Failure by Purchaser to timely notify Seller of its election to
terminate this Contract because the Approvals have not been obtained by October 26, 2007 shall
be deemed to constitute (a) Purchaser's waiver of its right to terminate this Contract under this
subparagraph, and (b) all Earnest Money becoming nonrefundable, save and except as expressly
provided herein.
If Purchaser shall not have terminated the Contract (i) with respect to its due diligence
mvestigations relating to the Property before the end of the Review Period, or (ii) with respect to
the obtaiiring the Approvals before October 26, 2007, then Purchaser shall either aumorize the
Title Company to release the Earnest Money to Seller or Purchaser shall deliver Seller a written
notice stating that (a) such periods have expired, (b) that all conditions precedent to Purchaser's
obligations to close have been satisfied or waived except the conditions in Paragraph 8 and
Paragraph 16 of this Contract, and (c) i f Purchaser docs not close for any reason other than the
default of Seller, Purchaser shall not object in any manner to the Title Company releasing the
Earnest Money and any deposits to Seller upon demand by Seiler.
8.
Closing. The closing of the purchase and sale of the Property covered hereby (the
"Closing") shali be held at the offices of the Title Company, or at such other location as may be
acceptable to Purchaser and Seller, commencing at 10:00 a.m., local time in Dallas/Fort Worth,
Texas, thirty (30) days after the end of Review Period (the "Closing Date"). At the Closing,
Seller shall deliver to Purchaser and, where applicable, the Tide Company, the following items:
(a)
A special warranty deed with reservations (the "Deed") conveying the
portion of the Property, executed and acknowledged by Seller, to JHirchaser, subject only to the
Permitted Exceptions, in the form attached hereto as Exhibit " B " and made a part hereof by
reference for all purposes;
(b)
A certificate from Seller, in such form as may be required by the Internal
Revenue Service pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended, or
the regulations issued pursuant thereto, certifying as to the non-foreign status of a transferor,
with such certificate (the "FIRPTA Certificate") to be substantially in the form of Exhibit "C"
attached hereto and made a pan hereof by reference for all purposes,, or such variation thereof as
may be required by the mternal Revenue Service;
#110959*5
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(c)
Evidence of the authority of Seller and the person(s) executing and
delivering closing documents on its behalf to consummate the Closing, in form and content
reasonably acceptable to the Title Company and Purchaser; and
(d)
Such other documents as are necessary and appropriate in the
consummation of this transaction and any other documents required by the Title Company.
At the Closing, Purchaser shall deliver to Seller and, where applicable, the Title
Company, the following items;
(i)
Purchaser shall deliver to Seller the balance of the Purchase Price,
payable i n cash or by other evidence of good funds acceptable to the Title Company for
immediate disbursement at Closing;
(ii)
Evidence of the authority of fhirchaser and the person(s) executing
and dehvering .closing documents on its behalf to consummate the Closing, in form and content
reasonably acceptable to the Title Company and Seller, and
(iii)
Such other documents as are necessary and appropriate in the
consummation• of this transaction, mcluding, without limitation, evidence of Purchaser's
authority to consummate the transaction described herein and any other documents required by
the Title Company.
At least three (3) business days prior to the scheduled Closing Date, the Tide Company
shaH deliver to Seller and Purchaser (and their respective counsel) copies of any and all
documents that the Title Company will require to be signed by either or both of such parties at
Closing which are not attached as exhibits hereto. This requirement will be deemed waived if
the parries close this transaction without received such documents.
9.
Title Policy. At the Closing, Seller pay the base premium for a Texas Standard
Owner's Policy of Tide Insurance (the "Owner's Title Policy") in the full amount of the
Purchase Price, issued by the Title Company, insuring Purchaser as owner of the Land, in fee
simple, and containing no exceptions to title other than the Permitted Exceptions and the
standard preprinted exceptions, provided, however, that (a) the exception for restrictive
covenants shall be deleted, or limited to restrictions which constitute Perrmtted Exceptions, and
(b) the exception for taxes shall be limited to the year in which the Closing occurs, and
subsequent years and subsequent assessments for prior years due to change in land usage or
ownership. Seller shall pay the standard premium for the Owner's Title Policy; provided,
however, that Purchaser shall pay the additional premium for the "survey deletion" to Item 2 of
Schedule B of the Owner's Policy, if requested,
10.
Possession of Property. Purchaser shall be entitled to full possession of the
Property at Closing, subject only to the Permitted Exceptions.
H.
Prorations and Costs. Rents, i f any, and any and all standby fees, ad valorem
taxes and assessments applicable to the Property for the current year shall be prorated at the
Closing and effective as of the Closing Date using the best available computations of such items
(e>g.^ the tax rates applicable to the immediately preceding tax year and the most recent assessed
#110959-v5
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valuation of the Property), such that Ptxcchaser shall be responsible and pay for any and all such
standby fees, taxes and assessments applicable to the Property assessed from and after the
Closing Date.
Any taxes relating to the year of Closing or prior years arising out of the change in land usage or
ownership or •otherwise whether arising before or after Closing (collectively the "Rollback
Taxes") shall be-timely paid by Seller when assessed and Purchaser shall have no obligation with
respect thereto:
Prior to Closing, Seller shall cause Title Company to determine whether or not any portion of the
Property is designated or assessed for "agricultural use" or as "qualified open space land", and in
the :event any of the Property has been so classified, an estimate of such Rollback Taxes from
the.proper authority (the "Estimated Rollback Amount") shall be forwarded to Purchaser in
writing at least three (3) business days prior to the scheduled Closing Date, and at Closing,
pursuant to an escrow agreement satisfactory to Seller, Purchaser and the Title Company, Seller
shall escrow such Estimated Rollback Amount
All said prorations shall befinaland not subject to adjustment. Closing costs shall be paid by the
parries in the manner which is customary for raw land purchase and sale transactions in Collin
County, Texas; provided, however, that (i) the premiums, fees and costs associated with the
Owner's Title Policy shall be paid by Seller and Purchaser as provided under Paragraph 9 above,
and (ii) each parry shall pay for its own attorneys' fees, except as provided in Paragraph 22(c)
below. This provision shall expressly survive the Closing of this Contract,
12.
Commissions. If, as and when, but only if, as and when, Closing occurs and is
fully consvnnmated and funded, Millennium Property Management and J Sena and Associates,
Inc. (collectively the "Brokers") shall have earned, Seller shall pay, as real estate corrunission
equal to one and one-half percent (1.5%) of the Purchase Price to J Sena and Associates, Inc. and
one .and one-haif percent (1.5%) of the Purchase Price to Millennium Property Management.
Seller shall save, defend, indemnify and hold Purchaser harmless therefrom. Each party
represents and warrants to the other that it has dealt with no parties other than Brokers, which
would* give rise to a real estate cornmission or similar fee, and each party shall save, defend,
mdernnify and hold the other harmless from and against any and all claims for commissions due
in relation to this transaction by reason of any action taken or alleged to have been taken, or any
representation or commitment made or alleged to have been made by it, other than with respect
to the cornmission due Brokers as set forth above. This provision shall expressly survive the
termination or Closing of this Contract. Purchaser acknowledges that it has been advised that it
should either obtain an owner's policy of title irtsurance covering the Land, or have an abstract of
title to the Land examined by an attorney of its choice.
13.
Seller's Remedies. In the event Purchaser is in default or breach of any of its
obligations, covenants, agreements, representations or warranties hereunder (including, without
limitation, failing to timely consummate the Closing), other than due to the default of Seller or
the proper termination hereby by Purchaser pursuant to the applicable provisions hereof and such
default or breach continues for five (5) days after Purchaser's receipt of written notice thereof
from; Seller, then Seller may terrninate this Contract and shall be entitled to receive and retain the
Independent Consideration and ail of the Earnest Money deposited including the initial earnest
#!H»59-v5
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money deposit and all addition earnest money deposits for the extension periods hereunder as
liquidated damages and as Seller's sole and exclusive remedy therefor; Seller and Purchaser
agreeing that actual damages due to Purchaser's default hereunder would be difficult and
inconvenient to ascertain and that such amount is not a penalty and is fan and reasonable in light
of all relevant circumstances- Further, upon receipt of all of said liquidated damages Seller's
receipt thereof shall be deemed to be a waiver of anyrightswhich Seller may have to seek or
obtain damages or specific performance hereof due to a default by Purchaser in the terms hereof
14,
Purchaser's Remedies. If Seller fails to consummate the Closing or is otherwise
in default or breach of any of Seller's obligations, covenants, agreements, representations or
warranties hereunder, for any reason other than as a result of Purchaser's default hereunder and
such failure, default or breach continues for five (5) days after Seller's receipt of written notice
thereof from Purchaser, then Purchaser may, at its option, either (i) terminate this Contract and
receive a full and immediate refund of the Earnest Money (including the Independent
Consideration) and the Additional Earnest Money previously deposited, or (ii) seek to enforce
specific performance hereof (but not as to any title curative measures unless Seller expressly
agreed to cure same, in writing); provided, however, that in the event that the remedy of specific
performance is not a remedy available to Purchaser because of acts or omissions of Seller, then
Purchaser shall be entitled to enforce any remedies available to Purchaser at law or in equity,
except as waived herein- Further, Purchaser hereby expressly waives anyrightsit may have to
seek or obtain damages or any other act or thing of any kind or character, except as provided in
this Paragraph 14, due to a default by Seller in the terms hereof.
15.
Disclaimers and Releases.
(a)
PURCHASER ACKNOWLEDGES AND AGREES THAT IT IS
EXPERIENCED IN ACQUIRING, OWNING, DEVELOPING, MARKETING, LEASING,
OPERATING, MANAGING AND SELLING OF PROPERTIES SIMILAR TO THE
PROPERTY, AND THAT PURCHASER HAS, PRIOR TO ITS EXECUTION HEREOF, OR
SHALL HAVE, DURING THE REVIEW PERIOD, THOROUGHLY INSPECTED, TESTED,
STUDIED, REVIEWED AND INVESTIGATED ALL ASPECTS OF THE PROPERTY TO
ITS FULL SATISFACTION, AND THAT PURCHASER IS RELYING SOLELY THEREON
IN MAKING ITS DECISION TO ACQUIRE THE PROPERTY- PURCHASER FURTHER
ACKNOWLEDGES AND AGREES THAT EXCEPT AS OTHERWISE SPECIFICALLY
STARTED XN THIS CONTRACT, SELLER IS NOT MAKING, AND HEREBY
SPECIFICALLY DISCLAIMS
MAKING ANY WARRANTY, GUARANTY OR
REPRESENTATION, OF ANY KIND OR CHARACTER, WHETHER EXPRESS OR
IMPLIED, STATUTORY OR ARISING BY OPERATION OF LAW, ORAL OR WRITTEN,
PAST, PRESENT OR FUTURE, OF, AS TO, OR CONCERNING THE PROPERTY,
INCLUDING, WITHOUT LIMITATION, (I) THE PHYSICAL AND ENVIRONMENTAL
NATURE AND CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION,
THE: WATER, SOIL AND GEOLOGY, AND THE SUITABILITY THEREOF AND OF THE
PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER MAY
ELECT TO CONDUCT THEREON, AND THE EXISTENCE OF ANY ENVIRONMENTAL
HAZARDS OR CONDITIONS THEREON (INCLUDING THE PRESENCE OF ASBESTOS
OR OTHER HAZARDOUS SUBSTANCES) OR THE COMPLIANCE OF THE PROPERTY
WITH ANY AND ALL APPLICABLE ENVIRONMENTAL LAWS, RULES OR
#110959~v5 .
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REGULATIONS; (II) EXCEPT FOR ANY WARRANTIES CONTAINED IN THE
DOCUMENTS TO BE DELIVERED BY SELLER AT CLOSING, THE NATURE AND
EXTENT OF ANY RIGHT-OF-WAY, LEASE, POSSESSION, LIEN, ENCUMBRANCE,
LICENSE, RESERVATION, CONDITION OR OTHER MATTER AFFECTING TITLE; (in)
THE COMPLIANCE OF THE PROPERTY OR ITS OPERATION WITH ANY LAWS,
STATUTES, ORDINANCES, RULES, REQUIREMENTS OR REGULATIONS OF ANY
GOVERNMENT OR OTHER BODY; (IV) THE ECONOMIC VIABILITY OR
MARKETABILITY OF THE PROPERTY; (V) TAX MATTERS PERTAINING TO THE
TRANSACTION
CONTEMPLATED HEREBY; (VI) THE ACCURACY OR
COMPLETENESS OF ANY REPORTS OR OTHER INFORMATION FURNISHED BY
SELLER TO PURCHASER WITH RESPECT TO THE PROPERTY, INCLUDING,
WITHOUT LIMITATION, ENGINEERING, ENVIRONMENTAL OR OTHER REPORTS,
STUDIES OR INVESTIGATIONS, IF ANY; (VII) ZONING; (Vffi) VALUATION; (IX)
HABIT ABILITY; (X) MERCHANTABILITY; OR (XT) SUITABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
FURTHER, PURCHASER HEREBY EXPRESSLY
ACKNOWLEDGES AND AGREES THAT THE PURCHASE OF THE- PROPERTY, AS
PROVIDED FOR HEREIN, IS BEING MADE. ON AN "AS IS" BASIS, "WITH ALL
FAULTS," AND UPON CLOSING, PURCHASER SHALL ACCEPT THE PROPERTY
SUBJECT TO ALL ADVERSE MATTERS, INCLUDING, WITHOUT LIMITATION,
ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS THAT MAY EXIST WITH
RESPECT TO THE PROPERTY AND WITH FULL KNOWLEDGE AND ACCEPTANCE BY
PURCHASER OF ALL INFORMATION AND MATTERS DISCLOSED IN ANY AND ALL
REPORTS, STUDIES, ASSESSMENTS,
INVESTIGATIONS,
PROPOSALS AND
DOCUMENTS FURNISHED TO, OR OBTAINED BY, PURCHASER WITH RESPECT TO
THE PROPERTY. FURTHER, PURCHASER ACKNOWLEDGES AND AGREES THAT
THERE ARE NO ORAL AGREEMENTS, WARRANTIES OR REPRESENTATIONS,
COLLATERAL TO OR AFFECTING THE TRANSACTION CONTEMPLATED HEREBY
WHICH HAVE BEEN MADE BY SELLER OR ANY THIRD PARTY.
(b)
ANY FACTUAL INFORMATION SUCH AS PROPERTY TAXES,
UTILITY INFORMATION, PROPERTY DIMENSIONS, SQUARE FOOTAGE, OR
SKETCHES SHOWN TO PURCHASER OR SET FORTH HEREIN ARE OR MAY BE
APPROXIMATE. PURCHASER REPRESENTS TO SELLER. THAT PURCHASER HAS,
PRIOR TO ITS EXECUTION HEREOF, OR SHALL HAVE, DURING THE REVIEW
PERIOD, INSPECTED AND VERIFIED THE FACTS AND INFORMATION TO
PURCHASER'S SATISFACTION. NO LIABILITY FOR ANY INACCURACIES, ERRORS
OR OMISSIONS IS ASSUMED BY SELLER OR OTHER AGENTS OR
REPRESENTATIVES
OF SELLER.
PURCHASER
UNDERSTANDS
AND
ACKNOWLEDGES THAT DOCUMENTS DELIVERED TO PURCHASER PRIOR TO THE
EXECUTION OF THIS CONTRACT MAY HAVE BEEN PREPARED BY PARTIES OTHER
THAN SELLER AND THAT SELLER MAKES NO REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR IMPLIED, AS TO THE COMPLETENESS, CONTENT OR
ACCURACY OF THE SAID SALES BROCHURES AND OTHER DOCUMENTS.
PURCHASER SPECIFICALLY RELEASES SELLER AND SELLER'S BROKERS,
EMPLOYEES, OFFICERS, DIRECTORS, AGENTS, CONTRACTORS, AND AFFILIATES,.
FROM ALL CLAIMS, DEMANDS, CAUSES OF ACTION, JUDGMENTS, LOSSES,
DAMAGES, LIABILITIES, COSTS AND EXPENSES (INCLUDING, WITHOUT
#110959-V5
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LIMITATION, REASONABLE ATTORNEYS' FEES, WHETHER SUIT IS INSTITUTED OR
NOT, AND ENVIRONMENTAL CONSULTANTS' FEES) WHETHER KNOWN OR
UNKNOWN, LIQUIDATED OR CONTINGENT (COLLECTIVELY ""CLAIMS") ASSERTED
AGAINST OR INCURRED B Y PURCHASER B Y REASON OF THE INFORMATION
CONTAINED IN, OR THAT SHOULD HAVE BEEN CONTAINED IN, THE SAID
DOCUMENTS.
(c)
IN THE EVENT THAT FROM A N D AFTER CLOSING A N Y
INVESTIGATION,
REMOVAL,
ABATEMENT, REMEDIATION,
OR
OTHER
CORRECTIVE ACTION IS AT A N Y TIME REQUIRED IN CONNECTION WITH THE
PROPERTY OR A N Y ADJACENT OR NEARBY PROPERTY AS A RESULT OF THE
PRESENCE OF A N Y ENVIRONMENTAL PROBLEMS, HAZARDOUS SUBSTANCES,
HAiZARDOUS MATERIALS, OR ENVIRONMENTAL CONTAMINATION AT OR ON THE
PROPERTY OR A N Y ADJACENT OR NEARBY PROPERTY, INCLUDING, WITHOUT
LIMITAHON, ASBESTOS AND PETROLEUM PRODUCTS A N D BYPRODUCTS AND
A N Y CONSTITUENTS THEREOF, REGARDLESS OF WHEN SAME OCCURRED,
PURCHASER
ACKNOWLEDGES AND AGREES
THAT: (I). A N Y SUCH
INVESTIGATION, REMOVAL, REMEDIATION, OR CORRECTIVE ACTION SHALL B E
PERFORMED BY PURCHASER AND AT PURCHASER'S SOLE COST AND EXPENSE;
AND (II) THE SELLER HAS NO DUTY OR OBLIGATION TO PERFORM OR CAUSE TO
BE PERFORMED A N Y SUCH INVESTIGATION, R E M O V A L , REMEDIATION, OR
CORRECTIVE ACTION.
THE PURCHASER FURTHER ACKNOWLEDGES A N D
AGREES THAT, EFFECTIVE UPON CLOSING, PURCHASER, FOR ITSELF, AND ITS
SUCCESSORS AND ASSIGNS, HEREBY IRREVOCABLY A N D UNCONDITIONALLY
WAIVES, RELEASES, AND DISCHARGES SELLER F R O M A N Y AND A L L CLAIMS OR
RIGIHTS OF CONTRIBUTION (INCLUDING A N Y RIGHT TO CONTRIBUTION UNDER
42 l U S . G §9613(F)) WHICH THE PURCHASER OR ITS SUCCESSORS, L E G A L
REPRESENTATIVES OR ASSIGNS NOW HAS OR M A Y H A V E AGAINST SELLER,. ITS
PARTNERS, PRINCIPALS, AFFILIATES, AGENTS OR A N Y OF ITS EMPLOYEES OR
AGENTS B Y REASON OF THE PRESENCE OF A N Y HAZARDOUS SUBSTANCE
(INCLUDING, BUT NOT LIMITED TO, ASBESTOS A N D PETROLEUM PRODUCTS A N D
BYPRODUCTS A N D THE CONSTITUENTS THEREOF) OR A N Y OTHER ADVERSE
ENVIRONMENTAL CONDITION, DEFECT, OR P R O B L E M WITH RESPECT TO THE
PROPERTY (WHETHER SUCH CONDITION, DEFECT, OR CONDITION BE KNOWN OR
UNKNOWN, LATENT OR PATENT, OR WHETHER OR NOT A N Y INVESTIGATION,
REMEDIATION, OR CORRECTIVE ACTION M A Y BE REQUIRED OR DESIRABLE
WITH RESPECT TO THE PROPERTY).
(d)
WITHOUT LIMITING THE FOREGOING PROVISIONS, EFFECTIVE
UPON CLOSING, PURCHASER HEREBY UNCONDITIONALLY, IRREVOCABLY AND
FOREVER RELEASES A N D DISCHARGES SELLER F R O M A N Y AND A L L CLAIMS,
DEMANDS, ACTIONS, LIABILITIES, LOSSES, COSTS AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, REASONABLE ATTORNEYS* FEES) ARISING FROM OR
RELATED TO THE PHYSICAL OR ENVIRONMENTAL CONDITION OF THE
PROPERTY. THE RELEASE SET FORTH IN THIS SECTION SPECIFICALLY INCLUDES
A N Y CLAIMS UNDER A N Y ENVIRONMENTAL LAWS. "ENVIRONMENTAL L A W S "
INCLUDES, BUT IS NOT LIMITED TO, THE RESOURCE CONSERVATION A N D
#I10959-v5
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RECOVERY ACT (42 U.S.C 6901, ET SEQ.), THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE, COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED BY THE
SUPERFUND AMENDMENTS AND REAUTHORIZATION ACT (42 U.S.G 9601, ET
SEQ.); THE CLEAN AIR ACT (42 U.S.C. 4701, ET SEQ.); THE EMERGENCY PLANNING
AND COMMUNITY RIGHT-TO- KNOW ACT (42 U.S.C. §1101, ET SEQ.); THE
HAZARDOUS MATERIALS TRANSPORTATION ACT OF 1974 (49 U.S.C. §1801, ET
SEQ.); THE FEDERAL WATER POLLUTION CONTROL ACT (33 U.S.C. §1251, ET SEQ.);
THE FEDERAL INSECTICIDE, FUNGICIDE AND RODENT1CIDE ACT (7 U.S.C. §137, ET
SEQ.); THE SAFE DRINKING WATER ACT (42 U.S.C. §3001, ET SEQ.); AND THE TOXIC
SUBSTANCE CONTROL ACT (15 U.S.C. §2601, ET SEQ.), AS ANY OF THE SAME MAY
BE AMENDED FROM TIME TO TIME AND ANY COMPARABLE OR SUCCESSOR
PROVISIONS OF FEDERAL, STATE OR LOCAL LAW, AND ANY REGULATIONS,
ORDERS, RULES, PROCEDURES, GUIDELINES AND THE LIKE PROMULGATED IN
CONNECTION THEREWITH.
(e)
THE DISCLAIMERS AND RELEASES SET FORTH IN THIS
SECTION SHALL SURVIVE THE CLOSING AND SHALL NOT MERGE THEREIN OR
INTO ANY DOCUMENTS EXECUTED IN CONNECTION THEREWITH.
16.
Representations and Warranties. Seller represents and warrants to Purchaser that
Seller prcsendy is a real estate agent licensed in the state of Texas and will have at closing record
title to the Property, and that at Closing; such title shall be free and clear of all hens,
encumbrances, covenants, restrictions,rights-of-way,easements, leases and other matters
affecting title except for the Permitted Exceptions. Seller further represents and warrants to
Purchaser that the Property wjU be transferred to Purchaser free and clear of any management,
service or other: contractual obligations.
Seller further covenants and agrees with Purchaser that, from the date hereof until
Closing, Seller shall not sell, assign or convey any right, tide or interest whatsoever in or to the
Property, or create or permit to exist any hen, security interest, easement, encumbrance, charge
or condition affecting the Property (other than the Permitted Exceptions) without promptiy
discharging the;same prior to Closing.
Seller hereby further represents and warrants to Purchaser as follows:
(a)
No Actions. There are no actions, suits or proceedings pending or, to the
best:of Seller's knowledge, threatened against Seller or otherwise affecting any portion of the
Property, at law or in equity, or before or by any federal, state, municipal or other governmental
court, department, commission, board, bureau, agency or instrumentality, domestic or foreign,
except for a law suit against Collin County regarding the assessed valuation of the Property.
0>)
Authority. The execution by Seller of this Contract and the consummation
by Seller of the sale contemplated hereby have been duly authorized, and do not, and, at the
Closing Date, will not, result in a breach of any of the terms or provisions of, or constitute a
default under any indenture, agreement, instrument or obligation to which Seller is a parry or by
which the Property or any portion thereof is bound.
#U0959-v5
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(c)
Continued Maintenance- From the date of execution of this Contract
through the date of Closing, Seller shall continue to maintain the Property in its present
condition,
(A)
Leases. From the date of execution of this Contract through the date of
Closing, Seller will not enter into any lease of any portion of the Property. No leases affect the
Property as of the date of this Contract and none will affect the Property at Closing.
(e)
No Agreements. From the date of execution of this Contract through the
date of Closing, Seller will not enter into any oral or written agreements affecting the Property
which might become binding on Purchaser or the Property at or after Closing.
(f)
Compliance with Laws. To the best knowledge of Seller, the Property is
not lin violation of any applicable laws and ordinances.
(g)
Environmental. To The best of Seller's knowledge, there has been no
storage, production, transportation, disposal, treatment or release of any solid waste, hazardous
waste, toxic substance, or any other pollutants or coniarninants (he^mafter collectively referred
to as "Pollutants') on or in the Property. To the best of Seller's knowledge, there are no wells,
underground storage tanks, covered surface impoundments or other sources of environmental
Pollutants or contaminants on the Property.
1
(h)
Condemnation. To the best of Seller's knowledge, there are no reading,
threatened condemnation or similar proceedings affecting the Property.
If, on or before.the Closing, Purchaser learns that one (1) or more of the representations
and warranties made above or elsewhere in this Contract shall be or become untrue or incorrect
in any material respect, then Purchaser, as its sole and exclusive remedy therefor
(notwithstanding Paragraph 14 hereof), may terminate this Contract and receive a full refund of
all Earnest Money and the Additional Earnest Money, and thereafter, Purchaser and Seller shall
have no furtherirights, obligations or duties one to the other hereunder (other than pursuant to the
mdemnity provision set forth above). Except as expressly set forth in this Contract to the
contrary, die representations, warranties, covenants and agreements of Seller and Purchaser set
forth in this Contract shall not survive the Closing but rather shall merge into the documents
executed and delivered by Seller in connection therewith; provided, however, that the
representations and warranties of Seller set forth in this Paragraph, 16 shall remain operative and
Shall survive Closing and the execution and delivery of the Deed and other documents delivered
at Closing by Seller; provided, however, that (i) such representations and warranties shall apply
only! as to facts and circumstances which existed as of the Closing and, where qualified, to the
current actual knowledge of Seller as of Closing; (ii) as a condition precedent to Purchaser's
enforcement of anyrightsor remedies for the breach o f any of Seller's representations and
warranties set forth in this Paragraph 16 following Closing, Purchaser must have delivered a
written claim to Seller on or before the date which is the one (I) year anniversary of the Closing
Date; and (iii) thereafter, Purchaser must have filed an action with respect thereto no later than
the date which is two (2) years and one (1) day following the Closing Dale; otherwise, all such
representations and warranties shall terminate and shall thereafter be null and void, have no
farther force or effect and Purchaser shall be deemed to have waived any and allrights,remedies
#110959-V5
etcd
12
S7S269 v? (53440.00017.000)
81 = 11
S003-Z.O-83J
and recourse that it then may have had, has or would nave in the future. As used herein, the term
"to jthe current .actual knowledge" of Seller shall mean that no facts have come to the attention of
Jean Pierre that would give him knowledge or notice that any such facts are not true, correct and
complete, and except as otherwise expressly stated herein. Seller has undertaken' no
investigation, inquiry or verification of any such matters to determine the existence or absence of
such facts, and no inference of Seller's knowledge of the existence or absence of such facts
should be drawn from the statements made herein; Notwithstanding the previous sentence, under
no circumstances shall the person named in the previous sentence have any personal liability for
the breach of any representation, warranty or covenant contained herein.
17.
Purchasers Representations, Warranties and Covenants. Purchaser represents and
warrants to, and/or covenants and agrees with. Seller as follows:
(a)
Purchaser has fullright,power and authority to execute this Contract and
to consmnmate the transactions described herein, without the consent or joinder of any other
party.
(b)
Purchaser is not a party to any suit, arbitration or other proceedings or any
governmental investigations, and none, to its current actual knowledge, are threatened against it,
which would adversely affect itsrightor ability to enter into this Contract or to consummate the
transactions contemplated hereby.
(•c)
Purchaser hereby acknowledges and understands that the property is
located within , and is subject to the terms, conditions, and provisions, including monetary
assessments and claims, of a Land Owner's Association, iircluding the association known as the
Frisco Post Oak Property Owners Association, Inc.
18.
Seller's 1031 Exchange. Purchaser acknowledges that the sale of the Property
may be part of one (1) or more exchanges being made by Seller pursuant to Section 1031 of the
Internal Revenue Code of 1986, as amended, and the regulations promulgated with respect
thereto. In such event, Purchaser agrees to cooperate fully with Seller in order that Seller may
effectuate one (I) or more exchanges; provided, however, that (a) all additional costs and
expenses related thereto shall be home solely by Seller; (b) Purchaser shall incur no additional
liability as aresult of such exchange; and (c) the contemplated exchange shall not delay any of
the time periods or other obligations of Seller hereby, including, without Hmitation, those
relating to Closing and the scheduled date for same. At any time prior to Closing, Purchaser may
elect to have the transaction contemplated hereunder consummated as part of a tax-deferred
exchange under Section 1031 of the Internal Revenue Code. Seller agrees to execute such
documents in connection with any such tax-deferred exchange as may be reasonably required
and to otherwise reasonably cooperate with the Purchaser to effectuate such exchange.
:
19.
Seller's Use of Property. From and after the date hereof, prior to the Closing or
earlier termination hereof, Seller shall not (a) knowingly violate any statute, law, ordinance, rule
or regulation affexîng the Land; or (b) develop, construct improvements upon or change the
grading of any portion of the Land.
mI0959-V5
13
5TS269 v6 (53440 000i7.000>
Bt:I?
SOOS-iO-83i
20.
Condemnation. In the event that any portion of the Property shall be taken in
condemnation or under therightof eminent domain, if written notice of an eminent domain
action affecting any portion of the Property is given, or if any portion of the Property shall be
conveyed, by deed in lieu of condemnation, after the date hereof and before the Closing Date,
Purchaser may, at its option, either: (i) terminate this Contract and receive an immediate refund
of all Earnest Money and the Additional Earnest Money on deposit hereunder; or (ii) apply the
proceeds received by Seller from such condemnation or right of eminent domain proceeding, or
by conveyance in Jieu of condemnation, against the Purchase Price, and receive a pro tanto
reduction in the Purchase Price, and proceed to close the transaction described herein as to the
remaining portion of the Property.
21.
Notices. Any notice, request, demand or other communication to be given by
Seller or Purchaser to the other party hereunder, except those required to be delivered at Closing,
shall be in writing, may only be delivered by hand, courier service, registered or certified mail,
return receipt requested or facsimile with telephonic or electronic verification of receipt (so long
as the original of the facsimile notice is deposited in the U.S. mail within three (3) days after the
facsimile notice is sent) and shall be deemed to be delivered (i) on. receipt, if hand delivered by a
nationally-recognized air courier service (e.g., FedEx) or bonded local courier, as applicable, or
(ii) on the second business day after having been sent by registered or certified mail, return
receipt requested, or (iii) if by facsimile, upon telephonic or electronic verification of receipt, to
the number of -the recipient patty, or such other notice address as either party may hereafter
provide to the other;
:
TO SELLER:
Mr. Jean Pierre
P.O.Box 112
Lewisville, XX 75067
Telephone No.: (972)333-7368
Telecopy No.: (972)661-0883
WITH A COPY TO:
THE STEINBACH LAW FIRM
R. Scott Steinbach
14643 Dallas Parkway, Suite 325
Dallas, Texas 75254-8817
Telephone No.: (972)960-1850
Telecopy No.: (972) 960-8815
Email: [email protected]
TO PURCHASER:
Greenstreet Properties of Texas, LLC
5400 LBJ Freeway, Bldg. 1, Suite 1460
Dallas, Texas 75240
Attn: Thomas B. Acevedo
Telephone No.: (972)371-5640
Telecopy No.: (972)371-5641
WITH A COPY TO:
Kane Russell Coleman & Logan PC
1601 Elm Street, Suite 3700
Dallas, Texas 75201
Attn: Gregory. A. Kline
Telephone No.: (214)777-4291
Telecopy No.: (214)777-4299
Any notice, request, demand or other communication to be given by Seller or Purchaser pursuant
to this Contract may not be given by facsimile or e-mail.
22.
Special Utility District Disclosure Notice. IF THE PROPERTY IS SITUATED
IN A UTILITY OR OTHER STATUTORILY CREATED DISTRICT PROVIDING WATER,
SEWER, DRAINAGE OR FLOOD CONTROL FACILITIES AND SERVICES, CHAPTER 49
#110959-v5
sicr'a
14
S7S269VS (S344D.0CttI7.000>
ST = T t
BQ0£-£0-S3i
OF THE TEXAS WATER CODE REQUIRES SELLER TO DELIVER TO PURCHASER,
AND PURCHASER TO SIGN, THE STATUTORY NOTICE RELATING TO THE TAX
RATE, BONDED INDEBTEDNESS OR STANDBY FEE OF THE DISTRICT PRIOR TO
THE FINAL EXECUTION OF THIS CONTRACTIF SAME HAS NOT BEEN
ACCOMPLISHED, SELLER SHALL DELIVER SUCH NOTICE TO PURCHASER WHHIN
THE PERIOD PROVIDED UNDER PARAGRAPH 4 ABOVE FOR OTHER DELIVERIES,
AND PURCHASER SHALL EXECUTE SAME PRIOR TO THE EXPIRATION OF THE
REVIEW PERIOD. IF'PURCHASER FAILS TO TIMELY DO SO, PURCHASER SHALL BE
DEEMED TO HAVE TERMINATED THIS CONTRACT PURSUANT TO THE TERMS OF
PARAGRAPH 7 ABOVE,
23.
Miscellaneous.
(a)
Construction of Number and Gender. Words of any gender used herein
shall be deemed tp include the masculine, fernmine and neuter, and words used in the singular
shall include the plural and vice versa, all as the context hereof may reasonably require.
(b)
Forms. In case of a dispute as to the form of any document required
hereunder or otherwise contemplated hereby, the parties agree to act reasonably.
T
(c)
Attomeys Fees. If either party shall be required to employ an attorney to
enforce or defend therightsof such party hereunder, the prevailing party shall be entitled to
recover reasonable attorneys*feesand cost of suit.
(d)
Integration. This Contract contains the complete agreement between the
parties with respect to the subject matter hereof and cannot be varied except by the written
agreement of the parties. The parties agree that there are no oral agreements, understandings,
representations or warranties which are not expressly set forth herein.
(e)
Business Day. If any date herein set forth for the performance or any
obligations by Seller or Purchaser or for the delivery of any item, instrument or notice as herein
provided should be on a Saturday, Sunday, of legal holiday, the compliance with such
obligations or delivery shall: be deemed acceptable on the next business dayfollowingsuch
Saturday, Sunday, or legal holiday. As used herein, the term "legal holiday" means any state or
federal holiday for which financial institutions or post offices are generally closed in the State of
Texas. Unless otherwise specified herein, the deadline on a stated date or the last day of a
defined period shall be 5:00 p.m., local time, in Dallas, Texas.
(f)
Multiple Counterparts. Counterparts of this Contract may be executed in
one or more counterparts, and all so executed shall constitute one (1) and the same agreement,
binding upon the parties hereto, and notwithstanding that all of the parties are not signatories to
the same counterparts.
(g)
provision hereof!
#110959-v5
9T0'd
Time of the Essence. Time is of the essence of this Contract and every
15
578269 vk (S3440.00017.000)
0>)
Choice of Laws. THIS CONTRACT SHALL BE GOVERNED BY THE
LAWS OF THE UNITED STATES OF AMERICA AND THE INTERNAL LAWS OF THE
STATE OF TEXAS, WITHOUT REGARD TO ITS CONFLICT RULES.
(i)
Severability. If any provision of this Contract is held to be illegal, invalid
or unenforceable under present or future laws, such provision shall be fully severable, and this
Contract shall be construed and enforced as if such illegal, invalid, or unenforceable provision
hadnever comprised a part of this Contract, and the remaining provisions of this Contract shall
remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance from this Contract. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this Contract, a provision
as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
:
(j)
Negotiation by Counsel, The parties acknowledge that each party and its
counsel have reviewed and revised this Contract, and agree that the normal rule of construction
to the effect that any ambiguities are to be resolved against the drafting party shall not be
employed in the Interpretation of this Contract or any amendments or exhibits hereto.
(k)
Authority of Signatory. Seller and Purchaser represent and warrant that
each of the signatories hereto has all right and authority to execute this Contract on behalf of the
party named herein, and that this Contract is a valid and bmding obligation of such party, subject
to its terms.
(J)
Seller's and Purchaser's Respective Representatives. The individuals
respectively executing this Contract on behalf of Seller and Purchaser are doing so in their
respective representative capacities only, solely as a representative of Seller or Purchaser, as
applicable, and any liability resulting hereunder based upon the actions of such individual shall
merely be that of Seller or Purchaser, as applicable, and not such individual.
(m)
Binding Effect. This Contract and the terms and provisions hereof shall
inure to the benefit of and be binding upon the parties hereto and then respective heirs, legal
representatives, .successors and assigns, wherever the context so requires or permits.
(a)
Headings. The article headings contained herein are for purposes of
identification only and shall not be considered in construing this Contract,
(o)
Assignment of Contract. Except as set forth herein, Purchaser may not
assign this Contract without the prior written consent of Seller, not to be unreasonably withheld
or delayed. Notwithstanding the foregoing, this Contract may be assigned by Purchaser to an
entity owned or controlled by, or affiliated with, Purchaser, without Seller's written consent;
provided, however, that (a) as a condition precedent thereto, Purchaser and its assignee shall
have entered into a written instrument of assignment under which the assignee agrees, in writing,
to be specifically bound by the terms of this Contract, and a copy of same shall have been
delivered to Seller and Title Company no later than three (3) business days before Closing; and
(b) the originally named Purchaser shall not be releasedfromliability hcrermder.
#II0959-v5
LlO'd
16
vS (53*40.00017.00&)
;(p)
Confidentiality. Purchaser and its representatives shaU hold in strictest
confidence all data and information obtained with respect to the Property and Seller, whether
obtained before or after the execution and delivery of this Contract, and Purchaser shall not
disclose same to others; provided, however, that it is understood and agreed that Purchaser may
disclose such data and information to its employees, consultants, accountants and attorneys and
* any- person or entity which Purchaser anticipates will invest in the Property, be a permitted
assignee, or finance the transaction contemplated hereby or any portion thereof. In the event this
Contract is terminated or Purchaser fails to perform hereunder. Purchaser, without any
representation . or warranty whatsoever, shall promptly deliver to Seller any statements,
documents, schedules, exhibits or other written information obtainedfromSeller in connection
with this Contract or the transactions contemplated herein, together with all printed reports and
all other due diligence items and, all engineering plans, drawings or other work obtained by or
for me benefit of Purchaser with respect to the Property without compensation therefor;
provided, however, that Purchaser shall not be obligated to deliver to Seller any financial
analyses and market studies relating to the Property. Purchaser shall promptly pay all
outstanding invoices related thereto. In the event of a breach or threatened breach by Purchaser
or its agents or representatives of this Paragraph 23(p) Seller shall be entitled to an injunction
restraining Purchaser, its agents or representatives from disclosing, in whole or in part, such
confidential irôrraation. Nothing herein shall be construed as prohibiting Sellerfrompursuing
any other available at remedy at law or in equity for such breach or threatened breach.
(q)
Effective Date. All references in this Contract to the "date hereof or the
"effective date hereof or any similar reference shall be deemed to refer to the last date, in point
of time, on which all parties hereto have fully executed (and, if required, initialed) this Contract
and the same has been received by the Title Company,
(r)
Adjacent Property Option. If during the Review Period, Purchaser elects
to purchase the balance of the adjacent property currently owned by Seller to the north of the
Land (the "Adjacent Property"), then Purchaser shall make such election in writing on or before
the expiration of the Review Period, In such event, said property shall be purchased on the same
terms and conditions set forth herein with the exception that the Purchase Price calculated in
accordance with Paragraph 1 herein above shall be increased by the sum of $1,826,319.00, and
the term "Property" as used herein shall be amended to include the said Adjacent Property.
Should Purchaser not exercise such option to purchase the Adjacent Property, then Purchaser
agrees that at the Closing, Purchaser shall grant Seller reasonable and customary pedestrian and
vehicular access and ingress and egressrightof way easements, and utility access easements for
Seller and Seller's successors and assigns and subsequent owners of the property for the benefit
of the Adjacent Property pursuant to a reasonably acceptable reciprocal easement agreement to
be mutually agreed upon by Seller and Purchaser during the Review Period.
(s)
Termination of Offer. This Contract constitutes an offer to purchase/sell
the Land by thefirstparty to execute same on the terms and conditions set forth herein. Unless
soonerterminatedor withdrawn by the first party, this offer shall êxpire, be of no further force
and effect, lapse and terminate at 5;00 PM on Friday, July 13, 2007, unless, prior to such time,
the other party has executed and delivered at least one (1) fully-executed counterpart hereof to
the Title Company.
#I10959-v5
17
578269 v3<S>440.00017,«X>)
\Z~\\
B00Z-iD-S3d
<t)
WAIVER OF CONSUMER RiGHTS. This waiver of consumer rights is
made on the date of this contract, in connection with above Contract by and between Seller and
Purchaser regarding me Property.
WAIVER OF CONSUMER RIGHTS: IN CONNECTION WITH THE
FOREGOING CONTRACT, PURCHASER WAIVES PURCHASER'S RIGHTS UNDER
THE DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT,
SECTION 17.41 JET SEQ., TEXAS BUSINESS & COMMERCE CODE, A LAW THAT
GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS.
AFTER
CONSULTATION WITH AN ATTORNEY OF PURCHASER'S OWN SELECTION,
PURCHASER VOLUNTARILY CONSENTS TO THIS WAIVER.
18
610 'd
57826? vS (5344O.00OI7.000)
EXECUTED by Seller this V^l day of July, 2007.
SEJXEJR:
JEAN PI
#110959-v5
19
578269 vS (534^0,00017.000)
EXECUTED by Purchaser this
day of July, 2007.
PURCHASER:
GREENSTREET PROPERTIES OF TEXAS, LLC,
a Texas bruited liability coi
Name:.
Title:
20
57X269 «B(S3*«I.O0GnflKJ>
ACCEPTANCE BY TITLE COMPANY
Community Title Company, referred to in this Contract as the "Title Company" hereby
acknowledges receipt of two (2) fully executed counterparts) hereof and the Title Company
certifies that it has received and understands the Contract and hereby accepts the obligations of
the Title Company as set form herein, including, without limitation, its agreement to hold the
Earnest Money and dispose of same in accordance with the terms and provisions of this Contract
fn addition, the Title Company hereby agrees and commits to deliver one (1) fully executed
counterpart of the Contract (or a copy thereof originally executed by the Title Company) to the
Purchaser and Seller, respectively, at the appropriate addresses as set forth in Paragraph 21 of the
Contract
COMMUNITY TITLE COMPANY,
Attachments:
Exhibit "A-l" - Legal Description of the 716,997 square feet
Exhibit "A»2" - Depiction of Adjacent Property
Exhibit "B!! - Form of Special Warranty Deed with Reservations
Exhibit "C* - Form of FIRPTA Certificate
#110959-V5
ZZO'd-"-'
21
S78269vS(5344O.O00I7.000)
ZZ--XV
BQ02-A0-834
EXHIBIT "A-T
LEGAL DESCRIPTION
ExhibifA-l^Pagelofl
EXHIBIT "A-2
W
ADJACENT PROPERTY
Exhibit *A-2** Page 1 of 1
-tZO'd
• ZZ-'ll
.BOQZ-10S3-A
a
EXHIBIT B "
Mailing Address of Grantee;
NOTICE OF CONFIDENTIALITY RIGHTS: IE YOU ARE A NATURAL PERSON,
YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION
FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC
RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE
NUMBER.
SPECIAL WARRANTY DEED
THE STATE OF TEXAS
C013NTY OF COLLIN
§
§
§
KNOW ALL PERSONS BY THESE PRESENTS:
THAT, Jean Pierre, an individual (hereinafter referred to as "Grantor"), for and in
consideration of the sum of Ten and No/100 Dollars ($10,00) and other valuable consideration to
the undersigned paid by Greenstreet Properties of Texas, LLC and/or assigns (hereinafter
referred, to as "Grantee"), the receipt and sufficiency of which consideration are hereby
acknowledged, has GRANTED, SOLD AND CONVEYED, and by these presents does GRANT,
SELL AND CONVEY unto Grantee, the following described property in Collin County, Texas
(the f'Property"), to-wit:
See Exhibit "A-l" attached hereto and made a part hereof; subject, however, to those
matters set forth on Exhibit "B" attached hereto and made a part hereof to the extent the same are
valid and existing and affect the Property.
TO HAVE AND TO HOLD the Property, together with all and singular the rights and
appurtenances thereto in anywise belonging to Grantor (mcludtng, without limitation, any and all
right[_titleand interest of Grantor, if any, in and to adjacent streets and alleys), unto the said
Grantee, its successors and assigns forever, and Grantor does hereby bind itself and its
successors to WARRANT AND FOREVER DEFEND all and singular its interest in the Property
unto: the said Grantee, its successors and assigns, against every person whomsoever lawfully
claiming or to claim the same or any part thereof, by or under- said Grantor, but not otherwise,
and subject as aforesaid.
There having been a proration of standby fees, ad valorem taxes and assessments
applicable to the Property between Grantor and Grantee, subject to Grantor's obligation to pay
any and all taxes allocable to periods prior to the date hereof, by its acceptance hereof, Grantee
E x h i b i t s Page 1 of 2
920 'A
ZZ'W
B00Z-AD-83i
On
hereby assumes and agrees to pay ail standby fees, ad valorem taxes and assessments assessed
against the above-described property for 2007 and all subsequent years.
EXECUTED effective as of (although not necessarily on) the
day of July, 2007.
GRANTOR:
By:
JEAN PIERRE
STATE OF TEXAS
COUNTY OF DALLAS
§
§
§
This instrument was acknowledged before me on
•
, 2007, by
Jean; Pierre, ah individual, known to mc to*.bc the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he signed the same for the purpose and
consideration therein expressed and as the act and deed of such individual.
[Personalized Seal]
Notary Public, Stale of Texas
Attachments:
Exhibit "A" - Legal Description
Exhibit B" - Permitted Exceptions
tc
Exhibit "B" Page 2 of 2
3Z0 "d
tZ-1 T BD0Z--LO-83.4
EXHIBIT "C"
CERTIFICATE OF NON-FOREIGN STATUS
ENTITY TRANSFEROR
-
Section 1445 of the Internal Revenue Code of 1986, as amended (the "Code"), provides
transferee of an interest in real property located within the United States of America must
withhold tax if the transferor is a foreign person, partnership, corporation, estate or trust (as
defined in the Code and the U.S. Treasury Regulations promulgated pursuant Thereto). For U.S.
Taxipurposes (mcluding section 1445), the owner of a disregarded entity {which has legal title to
a U;S. real property interest under local law) will be me transferor of the property and not the
disregarded entity. To inform Greenstreet Properties of Texas, LLC and/or assigns
("Purchaser"), that withholding tax is not required upon the disposition of an interest in real
property located within the United States of America by Jean Pierre, and individual ("SeHer"),
the undersigned hereby certifies the following:
thatia
1.
Seller is not a foreign corporation, foreign partnership, foreign trust or foreign
estate (as those terms are defined in the Code and the U. S. Treasury Regulations promulgated
pursuant thereto);
2.
Seller is not a disregarded entity as defined in § L 1445-2(b)(2)(iii);
3.
Seller's U.S. Employer Identification Number is
4.
Seller's office address is P.O. Box 112, Lewisville, Texas 75067.
; and
The undersigned understands that this Certificate may be disclosed to the Internal Revenue
Service by f^nchaser or any real estate broker,tidecompany representative or attorney involved
in the transactions for which it was issued, and that any false statement contained herein could be
punished by fine, imprisonment, or both.
Under the penalties o f perjury, the undersigned declares that it has examined this
certification, and to the best of its knowledge and belief, it is true, correct and complete.
Dated as of,
,2007.
SELLER:
Jean Pierre
tL
Exhibit C" Page 1 of 1
;LZ0' d
ZZ-XX'
B002-i0-S3d-
Collin Appraisal Review
Board
NOTICE OF ISSUANCE AND ORDER DETERMINING PROTESTING
AND/OR CORKECTING APPRAISAL RECORDS
07/03/07
P r o p ID:
2D21446-ARB-ORD
TO: PIERRE JEAN
PO BOX 112
LEWJSVHJLE, TX 75067-0112
Cause Number
AccountiNurnber
Legal •
Hearing 'Date
2007-8014
R-6032r002-0260-1 / 2 0 2 4 4 4 6
A B S AQ032 B O L I N . J A M E S . BLK 2 . T R A C T 26, 2 0 . 0 2 8 3 A C R E S
D7/D2/20O7
The Board delivered written notice of the hearing date, time and place to the protesting property
owner.; The property owner and chief appraiser, were given the opportunity to testify, present
evidence and testimony. After reviewing t h e Notice of Protest and after hearing the testimony
and evidence presented, the Board has made a determination with a quorum present a s to the
folIoWiri'g issues;
;
V A L U E IS O V E R M A R K E T V A L U E - A P P R O V E D
The final 2007 values are stated below:
Land market/ nomesile;
Land market/ non homesite:
Improvement market/ horoesite:
Improvement marfcefcf non homesite:
Totat market:
Land ag market:
Land ag use;
Total Assessed;
S0
$ 4,900,000
50
50
$4,900,000
$0
$0
5 4,900,000
Exemptions:
THE APPRAISAL REVIEW BOARD HAS MADE A FINAL DECISION ON YOUR PROTEST. NO
FURTHER APPEAL TO THE APPRAISAL REVIEW BOARD IS PERMITTED.
YOU HAVE A RIGHT TO APPEAL THIS ORDER TO THE DISTRICT COURT OR REQUEST BINDING
ARBITRATION, YOU MUST DO SO WITHIN 4 5 DAYS OF THE DATE YOU RECEIVED THIS NOTICE.
IF YOU DO APPEAL AND YOUR CASE IS PENDING, YOU MUST PAY THE AMOUNT OF TAXES
NOT IN DISPUTE OR THE AMOUNT OF TAXES DUE ON THE PROPERTY UNDER THE ARB
ORDER, WHICHEVER IS LOWER, TO EACH TAXING UNIT BEFORE TAXES FOR THE YEAR
BECOME DELINQUENT.
1
y * v ^ ixspfr*'
CC:
JimmieC. Honea, Chief Appraiser
.250 W iidorada Phv^y
WlcKinney. Texas 75069-3023
H20" d
" CHAIRMAN, APPRAISAL REVIEW BOARD
Metro «69,742-8200
ToIt-T-ree 866.467,1110
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10&;D0fcc£^2<ixxiibraoi^^
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THENCE \YRh ihc mwhwcsfcilyrighE-of-woyfoeof said Stoncbrook Psrfcway, die fbUtwing cctocs and
disancesôvi!;
Sou^wtstoiy'VPsih said ain't, an ait disawa; of441.02fceelo a 5/8" iron lodsclforcomer,
ooo{ainiing20.02S3 acres of land.
620'd

No. 05-11-00265-CV IN THE FIFTH COURT OF APPEALS AT

Transcription

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