Opinion issued April 5, = 2007=20
In this=20
restricted appeal, appellant, World Savings Bank, FSB ("World =
Savings"),=20
challenges the trial court's default judgment entered in favor of=20
appellees, Julio Alaniz and Susana Beltran, on their claim for =
fraud in a=20
real estate transaction. We reverse=20
and render. On February=20
11, 2005, appellees filed the instant suit against Gerardo J. =
Lerma,=20
Imelda Lerma ("the Lermas") World=20
Savings did not answer the lawsuit, and appellees filed their =
motion for=20
default judgment. Appellees=20
explained to the trial court that, based on section 27.01 of the =
Texas=20
Business and Commerce Code, they were seeking actual damages in =
the amount=20
of $33,500, consisting of $18,500 for the amount of payments that =
Beltran=20
had paid on the loan and $15,000 for mental anguish damages based =
on=20
"sleeping in the dilapidated conditions with potential fires" and =
being=20
"scared of the horrible conditions of the house that the bank told =
her had=20
been repaired." Appellees also sought $450 for costs of court, =
$8,000 in=20
attorney's fees, and $2,100 in pre-judgment interest. In regard to =
their=20
attorney's fees, appellees' counsel testified that as of the date =
of the=20
hearing, he had worked forty hours on the case at a rate of $200 =
per=20
hour. On March=20
27, 2006, the trial court entered a no-answer default judgment =
against=20
World Savings "[w]ith respect to the causes [sic] of action for =
Fraud In A=20
Real Estate Transaction" in favor of appellees for the amount of =
$44,050.=20
World Savings timely filed this restricted =
appeal.Restricted=20
Appeal In its=20
first issue, World Savings argues that the trial court erred in =
granting=20
appellees' motion for default judgment because they did not =
present=20
sufficient evidence to prove their cause of action for fraud in a =
real=20
estate transaction. To attack a=20
judgment by a restricted appeal, the appeal must be filed (1) =
within six=20
months after the trial court signed the judgment; (2) by a party =
to the=20
suit; (3) who, either in person or through counsel, did not =
participate at=20
trial and did not timely file any post-judgment motions or =
requests for=20
findings of fact and conclusions of law; and (4) error must be =
apparent=20
from the face of the record. Tex. R. App. P. 26.1(c), 30; =
Alexander v.=20
Lynda's Boutique, 134 S.W.3d 845, 848 (Tex. 2004); Barry =
v.=20
Barry, 193 S.W.3d 72, 74 (Tex. App.--Houston [1st Dist.] =
2006, no=20
pet.). The face of the record consists of all the papers on file =
in the=20
appeal, including any reporter's record. Osteen v. =
Osteen, 38=20
S.W.3d 809, 813 (Tex. App.--Houston [14th Dist.] 2001, no pet.). =
Here, the=20
parties dispute only the appearance of error on the face of the=20
record. (1) false=20
representation of a past or existing material fact, when the false =
representation is (A) made to=20
a person for the purpose of inducing that person to enter into a =
contract;=20
and (B) relied=20
on by that person in entering into that contract; or (2) false=20
promise to do an act, when the false promise is (A)=20
material; (B) made=20
with the intention of not fulfilling it; (C) made to=20
a person for the purpose of inducing that person to enter into a =
contract;=20
and (D) relied=20
on by that person in entering into that contract. Tex. Bus.=20
& Com. Code Ann. =A7 27.01(a) (Vernon 2002). Unlike common law =
fraud,=20
statutory fraud under section 27.01 does not require proof of =
knowledge or=20
recklessness as a prerequisite to the recovery of actual damages.=20
Burleson State Bank v. Plunkett, 27 S.W.3d 605, 611 (Tex. =
App.--Waco 2000, pet. denied). However,=20
section 27.01 only applies to misrepresentations made to induce =
another to=20
enter into a contract for the sale of land or stock. Id. =
A loan=20
transaction, even if secured by land, does not fall under the =
statute.=20
Id.; see also Greenway Bank & Trust v. =
Smith, 679=20
S.W.2d 592, 596 (Tex. App.--Houston [1st Dist.] 1984, writ ref'd =
n.r.e.)=20
("The statute makes no mention of any application to guaranty =
agreements,=20
secured by real estate, or to a party who 'merely' loaned money =
for the=20
purchase of real estate."). Here, in=20
their original petition, appellees indicate that prior to applying =
for a=20
loan with World Savings, they had already entered into a real =
estate sales=20
contract with the Lermas for the purchase of the house in =
question.=20
Because the face of the record establishes that there was neither =
a=20
contract for, nor a sale of, land or stock between appellees and =
World=20
Savings, section 27.01 is inapplicable. Accordingly, we hold that =
the=20
trial court erred in granting the default judgment in favor of =
appellees'=20
based on their claims under section 27.01. See Paramount Pipe =
&=20
Supply Co., Inc. v. Muhr, 749 S.W.2d 491, 491 (Tex. 1988) (a =
default=20
judgment will be held erroneous if the petition affirmatively =
discloses=20
the invalidity of the claim). Having held=20
that the trial court erred in granting the default judgment in =
favor of=20
appellees on their claim under section 27.01, we further hold that =
it was=20
error to award appellees attorney's fees. We sustain=20
World Savings's second issue. We reverse=20
the judgment of the trial court and render judgment in favor of =
World=20
Savings on appellees' claim for fraud in a real estate=20
transaction. Terry=20
Jennings Panel=20
consists of Chief Justice Radack and Justices Jennings and Bland.=20
2. In its brief, World Savings challenges =
the default=20
judgment on the grounds that appellees did not meet their burden =
of proof=20
on their claims of common law fraud, fraud in a real estate =
transaction,=20
and breach of contract. However, as noted by appellees, the trial =
court=20
entered the default judgment only on their claim for fraud in a =
real=20
estate transaction and denied all other relief requested, and we =
consider=20
only the fraud in a real estate transaction claim on appeal.=20
3. Gerardo J. Lerma and Imelda Lerma are not =
parties=20
to this appeal.=20
4. After the Lermas filed a general denial, =
appellees=20
non-suited =
them.