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Dubow v. Dragon – Case Brief Summary (Texas)

In Dubow v. Dragon, 746 S.W.2d 857 (Tex. App.--Dallas 1988, no writ), the buyers visited a home on two occasions and hired professionals to inspect the home. Id. at 858.

Although the inspection reports found existing and potential problems throughout the home, the Dubows nevertheless negotiated a lower price and signed a contract with an "as is" clause. Id. at 858--59.

The court of appeals upheld the summary judgment against the Dubows, concluding that their inspection superseded the seller's wrongful conduct. Id. at 860--61.

The prospective buyers of a home hired an independent inspector to evaluate the home's condition. 746 S.W.2d at 858-59.

The inspection revealed several existing problems and potential problems including the need for foundation repairs. Id. After receiving the report, the buyers had estimates prepared for correcting the problems and renegotiated the purchase price to lower it by $ 17,500. Id. at 859.

The contract of sale was also modified to include the following language:

After careful inspection of the house, and with professional opinions, we feel that the house will need extensive on-going maintenance because of the site positioning, foundation and drainage. See attached inspection report. We will take the home as is, WITH ALL CONTINGENCIES REMOVED.

Id. After taking possession of the house, the buyers encountered further problems with the home's foundation and roof and sued the sellers for failing to disclose their knowledge of the home's condition. Id.

Based on the facts presented in Dubow, this Court concluded that "the buyers' 'careful' inspection of the house's condition constituted a new and independent basis for the purchase which intervened and superseded the sellers' alleged wrongful act." Id. at 860.

But the crucial fact in Dubow was not the buyers' procurement of an independent inspection; it was their express and exclusive reliance on the "professional opinions" they received to renegotiate the sales contract that resulted in the sale of the house. Id.

The Dallas Court of Appeals has held that a careful subsequent investigation was an intervening and superseding, "new and independent" cause of a buyer's damages. See Dubow, 746 S.W.2d at 860.

In Dubow, appellants sought to purchase a home from appellees. Dubow, 746 S.W.2d at 858. After consulting with experts and conducting further investigation which disclosed certain defects in the house, appellants renegotiated the purchase price for the home. Dubow, 746 S.W.2d at 859.

When appellants were dissatisfied with the house, they subsequently claimed that statements made by the sellers were the producing cause of their injuries. Dubow, 746 S.W.2d at 860.

The court of appeals affirmed a summary judgment for the sellers, concluding that "the 'careful inspection of the house' and the 'professional opinions' obtained by the appellants were the sole efficient cause of the appellants' actual damages." Id.

The court concluded that the sellers proved as a matter of law that their representations were not the producing cause of the appellants' injuries. Dubow, 746 S.W.2d at 861.

In sum, the buyers hired an independent engineer and a foundation specialist to inspect the property in question.

They uncovered some problems, and the buyers, concerned about these and future problems with the house, renegotiated the contract. In exchange for lowering the sales price, the following provision was added to the contract:

After careful inspection of the house, and with professional opinions, we feel that the house will need extensive ongoing maintenance because of the site positioning, foundation and drainage. See attached inspection report. We will take the home as is, WITH ALL CONTINGENCIES REMOVED. Dubow, 746 S.W.2d at 859.

After closing, the buyers discovered additional problems with the home. They sued the sellers for failure to disclose the foundation problems and roof leaks.

The Dallas Court of Appeals, focusing on the buyers' reliance upon the experts' opinions and the fact that the contract had been renegotiated, held that the buyers' careful inspection of the house "constituted a new and independent basis for the purchase which intervened and superseded" any wrongful conduct on the part of the seller. Id. at 860.

That being so, the court concluded the buyers had actual knowledge of the defects and had not relied upon any actions by the sellers in closing the deal. Id.