FACTS OF CASE
In Salinas v. Gary Pools, Inc., __SW3rd__, 2000 WL 1344509 (4th Court of Appeals - San Antonio, September 20, 2000)., the Fourth Court of Appeals decided whether or not the discovery rule applied to tolling statute of limitations in a case alleging violations of the Texas Deceptive Trade Practices Act (DTPA) and negligence. The Court found that the statute of limitations was tolled for the cause of action alleging violations of DTPA for a period of ten (10) years and found that summary judgment based upon the statute of limitations was improper.
In 1988, Jose and Maria Salinas contracted with Gary Pools (Gary) to install a pool in the backyard of their home. All contracts were signed, agreed to, and the necessary approvals obtained from the City of San Antonio. During the course of the construction of the pool, it was determined by Gary that the construction of the pool would not work in the backyard and the pool was moved to a side yard. The pool area was built upon the city's easement. Gary failed to get a modification of the contract or submit the revised plan to the City of San Antonio. Ten (10) years later, in 1998, the Salinas' attempted to sell their home. In the course of selling their home, it was discovered during a title search that the pool had been built upon the easement owned by the City of San Antonio. The easement was not apparent from a visual view.
Mr. and Mrs. Salinas brought a cause of action against Gary for violations of the DTPA and negligence. Gary moved for summary judgment based upon statute of limitations, specifically that the Salinas' failed to bring their causes of action within two (2) years after the building of the pool or before 1990. The trial court granted the summary judgment in favor of Gary and the Salinas' appealed to the Fourth Court of Appeals. The Fourth Court of Appeals reversed the trial court's finding and found that the statute of limitations had been tolled under the discovery rule.
DISCOVERY RULE TOLLED STATUTE OF LIMITATIONS AS CONSTRUCTIVE NOTICE DID NOT APPLY TO CASES FILED PURSUANT TO THE TEXAS DECEPTIVE TRADE PRACTICES ACT
The Court noted that the "discovery rule" defers accrual of certain causes of action until the plaintiff knew or exercising reasonable diligence should have known of the wrongful act causing injury. In cases under the DTPA, claims accrue on the date on which the false, misleading or deceptive act or practice occurred or when the consumer discovered or in the exercise of reasonable diligence should have discovered the occurrence of the false, misleading, or deceptive act or practice. Gary argued that since the easement was recorded in the public records, the Salinas' knew or in the exercise of reasonable diligence should have discovered, the existence of the easement. Gary Pools, Inc. argued that the Salinas' had "constructive notice" of the public easement.
The Court of Appeals noted that the constructive notice doctrine only applies in situations involving title to real property or in rem proceedings. The Court of Appeals noted that this case did not involve either of those two situations and therefore the constructive notice doctrine did not apply. The Court further confirmed that the constructive notice doctrine does not apply to causes of action brought under the DTPA . In their response to Gary's Motion for Summary Judgment, the Salinas' noted that the easement was not visible to the naked eye and that they had never done a search of the record prior to their purchase of the home (due to the fact that they assumed the note from the previous owner.) Consequently, they were not on notice of the easement and therefore the discovery rule applied. The Court found that in this situation, the statute of limitations for the violation of the DTPA was tolled until 1998- when the Salinas's first discovered the easement in the public records.
STATUTE OF LIMITATIONS FOR NEGLIGENCE CAUSE OF ACTION NOT NECESSARILY TOLLED
The Court further discussed the fact that the discovery rule is different in a negligence cause of action. Under a negligence cause of action, the "discovery rule" tolls a statute of limitations when the nature of the injury is inherently undiscoverable and the injury itself is objectively verifiable. The Court declined to apply the discovery rule in the negligence action as it had under the Deceptive Trade Practices Act cause of action. Essentially, the court noted that "constructive notice" of the filing of the easement would apply as the public record of the easement was not inherently undiscoverable. In this regard, the court noted that if the easement was on file for more than two years before the Salinas' filed their cause of action, then the two-year statute of limitations would prevent the Salinas' from moving forward with their negligence cause of action. However, the Court found that in this case, Gary had provided no evidence that the easement had been on file more than two (2) years before the Salinas' eventually discovered it and therefore the Court found that the negligence cause of action should be remanded back to the Court for trial.
ANALYSIS OF OPINION
In summary, the Court of Appeals stated that the discovery rule under the DTPA is somewhat different from the discovery rule in a negligence cause of action. "Constructive notice" of an easement is not a defense in regards to the tolling of limitations under the DTPA. However, "constructive notice" of an easement would be enough to raise a defense under statute of limitations in a negligence cause of action.
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