Face Challenges Confidently

169 Ramirez v. Flores

Friday, September 4th, 2015

Richard F. Brown

Ramirez v. Flores, No. 04-05-0075-CV, 2006 WL 927295 (Tex. App.—San Antonio April 12, 2006, no pet.), is a suit for reformation of a deed. Ramirez agreed to sell the surface and 1/16th of the mineral estate in certain land to Flores. After the sale closed, Ramirez discovered that the title company made a mistake and that the deed transferred the surface estate and the entire mineral estate to Flores. Flores refused to correct the error.
A party is entitled to reformation of a deed when it can prove it reached an agreement with the other party, but the deed contains a mutual mistake, and it does not accurately reflect the agreement that was entered into between the parties. A mutual mistake is “one common to both or all parties, wherein each labors under the same misconception respecting a material fact, the terms of the agreement, or provision of a written instrument designed to embody such an agreement.” It is well established in Texas that a scrivener’s failure to embody the true agreement of the parties in a written instrument is a “mistake” that is grounds for reformation on the basis of mutual mistake.
A senior escrow agent for the title company testified about the agreement between the parties at trial. She stated that the earnest money contract reflected that Ramirez agreed to convey the surface estate and 1/16th of the mineral estate to Flores. She also testified that due to an oversight, the attorney preparing the deed was not furnished a copy of the earnest money contract, and thus the warranty deed was erroneously drafted. Ramirez testified there were no subsequent agreements entered into by the parties to alter or change the agreed upon terms of the earnest money contract. Flores testified that the warranty deed was consistent with an oral agreement reached between the parties after the earnest money contract was executed.
The earnest money contract signed by the parties provided: “This contract contains the entire agreement of the parties and cannot be changed except by their written agreement.” Texas law generally permits a written contract, not required by law to be in writing, to be modified by a subsequent oral agreement, even if the contract includes a clause prohibiting oral modifications to the agreement. However, the earnest money contract entered into by Ramirez and Flores could not be modified by a subsequent oral agreement, because it was required by law to be in writing.   After reviewing the evidence, the Court held that Ramirez was entitled to reformation of the warranty deed as a matter of law.