Christopher Pace v. Aces Autos, LLC

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CHRISTOPHER PACE, CATERINA ITZI, and ADAM CRAWSHAW, Appellants, v. ACES AUTOS, LLC and LENTEGRITY, LLC, Appellees.

No. 08-23-00127-CV

Court of Appeals of Texas, Eighth District, El Paso

March 22, 2024

Appeal from the 438th Judicial District Court of Bexar County, Texas (TC# 2021CI26178)

Before Alley, C.J., Palafox and Soto, JJ.

MEMORANDUM OPINION ^[1]

JEFF ALLEY, Chief Justice

This case arises from the sale of a used car. Caterina Itzi and Christopher Pace, Appellants here, sued Aces Autos, LLC and Lentegrity, LLC (collectively Appellees), who respectively sold and financed the vehicle purchase. Appellants claim the vehicle has defects rendering it worthless; Appellees emphasize the vehicle was purchased "as-is" with no warranties and with ample warning that it might have mechanical problems. The trial court sided with Appellees by granting their hybrid no-evidence and traditional motion for summary judgment, and in addition, awarded sanctions against Appellants' attorney, Adam Crawshaw, for filing a frivolous claim. Itzi, Pace, and Crawshaw appeal from that judgment. We affirm in part and reverse in part.

Factual &Procedural Background

We take the factual record from the summary judgment proofs submitted by the parties.

A Itzi and Pace agree to buy a used Jeep from Aces Autos

On July 4, 2021, Caterina Itzi contacted Aces Autos through Facebook Marketplace to ask about a 2009 Jeep Wrangler that she had seen advertised there. The next day, she and her husband Christopher Pace went to the dealership and test drove the vehicle. They noticed that the air conditioner was not working and were told that Aces Autos had replaced the instrument cluster earlier that week which might still be faulty. The sales representative offered to send the Jeep to their shop so that it could be fixed along with looking over the 4-wheel drive components for other issues. The sales representative also stated that Aces Autos had had the vehicle for three months but that it was in the shop most of that time.

That day, Itzi and Pace made a $5,000 downpayment and then left the dealership while it looked for a lender to finance the balance of the transaction and send the vehicle out for the promised repair. During the next week, Itzi provided credit related information as Aces Auto secured a lender. They completed the transaction on July 13, 2021. When Appellants arrived at the dealership, they were told that the instrument cluster was again replaced and everything was working correctly. Itzi agreed that the vehicle started and sounded okay, and that the AC was working.

Aces Autos then asked Appellants for another $3,000 dollars down so it could get the lender to approve them. Appellants then "stood up to leave" and asked for return of the $5,000 down payment. The salesperson had them stay while he talked to the lender. While they waited, Aces Auto's owner, Orlando Huc, told them that he had bought the Jeep as a personal vehicle, lots of preventative work was done, they had "chased electrical issues" on it for a long time which he attributed to the instrument cluster getting wet, but that it was now fixed. Itzi testified that Huc said the Jeep was "reliable and there were absolutely no issues" with it. After the salesperson reconfirmed the sales price as originally set, they completed paperwork that we describe next.

B. The purchase paperwork disclaims all warranties and sold the Jeep "as-is"

Either Itzi, Pace, or both signed, among other documents, the following: (1) a Conditional Sales Agreement, (2) a Disclosure Concerning Used Car Condition, (3) a "Buyers Guide," and (4) an "As-Is Sold Without Warranty" form. They also selected a Vehicle Protection Plan provided through a separate entity, ASC Warranty.

The terms of the conditional Sales Agreement provide that Itzi and Pace bought the 2009 Jeep Wrangler for $23,497.71. The single-page Disclosure Concerning Used Car Condition stated that the Jeep was "a used vehicle" with 99,925 miles. In all capital letters, it cautioned the buyers that they "SHOULD HAVE THE ABOVE REFERENCED VEHICLE INSPECTED BY A MECHANIC AND/OR A REPAIR SHOP INCLUDING A BODY SHOP OF YOUR OWN CHOICE PRIOR TO PURCHASE." The form also states, again in all capital letters "ANY EMPLOYEE, SALESPERSON OR AGENTS OF ACES AUTOS LLC THAT YOU ARE DEALING WITH ARE NOT AUTHORIZED TO MAKE OR EXPRESS AN OPINION AS TO WHAT REPAIRS MAY HAVE BEEN PERFORMED IN THE PAST." Both Itzi and Pace signed and dated the form.

They also signed a one-page document titled AS-IS SOLD WITHOUT WARRANTY (in all bold, and large font) that identified the vehicle, and in three places, in all caps stated the vehicle was sold with no warranty and the buyer would "bear the entire expense of repairing or correcting any defects that presently exist and/or may occur in the vehicle unless the salesperson promises in writing at the time of the sale to correct such defects." The document appears as follows in our record (without our redactions):

(Image Omitted)

Itzi also signed acknowledging a two-page Buyers Guide, the top portion of the first page appears as follows:

(Image Omitted)

Further down on the Buyer's Guide, the form advised the buyer to "ASK THE DEALER IF YOUR MECHANIC CAN INSPECT THE VEHICLE ON OR OFF THE LOT." The second page of the form sets out a "list of some major defects that may occur in used vehicles" with more than 50 items arranged under headers for different vehicle components. Finally, the form stated, "IMPORTANT: The information on this form is part of any contract to buy this vehicle."

Appellants also secured a repair warranty from third-party-provider ACS that covered specific issues that might develop with the Jeep.

C. The Jeep has mechanical problems

On July 22, 2021, the check engine light came on. Appellants took the Jeep to an auto parts store to have the computer codes read which Itzi claims showed the emissions system "had a major leak or malfunction." On August 22, 2021, according to Itzi, the Jeep "completely broke down." The battery light came on, and soon after the engine died. The engine started but died again when put in gear. Appellants had it towed to one dealership that told them to replace all the spark plugs- a repair that was not covered under their ACS warranty. They had it taken to a second dealership that confirmed the Jeep's engine would die in every gear other than park and neutral. The mechanic there told them to replace the sensors and the radiator. ACS warranty paid for the radiator replacement, but not the sensor issue.^[2] From July 13, 2021, through August 22, 2021, Itzi had driven the Jeep about 948 miles.

After that repair, Itzi claims the Jeep "ran great, but continued to stall randomly." Appellants later identified problems with the vehicle wiring harnesses, which they and their expert testified render the value of the vehicle as zero. Their expert identified several problems with the vehicle including that "[t]he electrical system is faulty, and shorts out once powered" and he found "burned wires" under the passenger seat.

D. The lawsuit

In December 2021, Appellants sued Aces Autos and Lentegrity. They alleged claims (1) under the DTPA against both; (2) a count for cancellation of debt against Lentegrity; and (3) claims for common law fraud, negligent misrepresentation, deceptive advertising, breach of contract, breach of express and implied warranty, negligence, negligence per se, and failure to provide odometer disclosure statement against Aces Autos. After a period of discovery, Appellees filed a joint motion for traditional and no evidence summary judgment on the claims asserted against them. The joint motion also asked the court to sanction Appellants' attorney for filing allegedly groundless claims. After Appellees moved for summary judgment, Appellants filed an amended petition and a response to the motion for summary judgment.^[3]

A document entitled "Judge's Notes" made following a hearing on the motion for summary judgment stated that the trial court granted Appellees' motion for summary judgment on Appellants' claims and Appellees' request for sanctions. The notes also stated that attorney's fees would be submitted for consideration as sanctions. The court then conducted another hearing on the amount of attorney's fees to be assessed. The court later signed a final order granting the combined traditional and no-evidence motion for summary judgment, and assessed "$11,920 in attorney's fees and $470.40 in costs as sanctions" against Appellants' counsel. Itzi and Pace appeal the take-nothing judgment rendered against them, and their counsel appeals the sanctions assessed against him.

Take-Nothing Summary Judgment Against Itzi and Pace

Appellees' hybrid summary judgment motion asserted that Appellants lacked evidence on some elements of their claims. The motion also asserted a traditional summary judgment premised on the argument that the "as is" language contained in the sales paperwork defeats the causation element required for other claims.

A. Standard of review

We review both traditional and no-evidence motions for summary judgment de novo, "taking as true all evidence favorable to the nonmovant and indulging every reasonable inference in the nonmovant's favor." See JLB Builders, LLC v. Hernandez, 622 S.W.3d 860, 864 (Tex. 2021); Fibela v. Wood, 657 S.W.3d 664, 670 (Tex. App.-El Paso 2022, no pet.). When, as here, the trial court's order does not specify the grounds for granting the summary judgment, we must affirm the judgment on any theory presented to the trial court and preserved for our review. Fibela, 657 S.W.3d at 670.

A no-evidence motion for summary judgment is essentially a pretrial directed verdict, and we apply the same legal...