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Legal Update 2020
Instructor: John Henderson JT@grar.com

0:17 Minutes

MISREPRESENTATION 

Texas Brokerage Not Liable for Uploaded, Incorrect Tax/Square Footage Information 

Ebby Halliday Real Estate, Inc. v. Dugas, 2019 Tex. App. LEXIS 2831; 2019 WL 1529174 (2019) 

Court of Appeals of Texas, Fifth District 

Facts: A brokerage firm’s salesperson created a listing by using an MLS drop-down menu of square footage sources, which uploaded information from Dallas Central Appraisal District (DCAD) property tax records. The listing thus showed the square foot- age of the subject condo unit as “1,178/Tax.” The salesperson’s listing narrative referred to a “darling” 1,178 square foot unit, and contained the notation, “Deemed Reliable But Not Guaranteed.” The purchaser relied on the square footage information in the listing, but later discovered that it consists of only 885 livable square feet. He sued the brokerage firm for, among other things, statutory fraud and violation of the Texas Deceptive Trade Practices Act (DTPA). A jury found that the firm committed statutory fraud through “false representation of a past or existing material fact,” but also found that the brokerage firm was not actually aware that the square footage was false. The jury also found that the firm committed DTPA violations, but accepted its affirmative defense that it “did not know and could not reasonably have known” that the source relied upon for the square footage was false. The trial judge disregarded the latter finding because “no evidence supported” it and entered a judgment for damages and costs in favor of the buyer. The brokerage firm appealed. 

Issue: Was the brokerage firm liable for the incorrect uploaded square footage information? 

Held: No. Reversed and “take nothing” judgment rendered against the buyer. The term “tax” in the “1,178/Tax” reference is understood in the local real estate industry to mean square footage derived from DCAD tax records, and “square footage” is commonly understood to mean livable square feet. The incorrect square footage in the listing did not constitute a misrepresentation because it accurately reflected the DCAD information. Also for that reason, the salesperson’s MLS narrative did not constituted a separate, independent verification or guarantee of the unit’s square footage or constitute a DTPA violation. There was no evidence from which a reasonable juror could infer that the brokerage firm intended to deceive the buyer, and thus there was insufficient support for a finding of statutory fraud. 
 

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