Preview
Filed: 8/19/2020 3:40 PM
J OHN D. KINARD - District Clerk
Galveston County, Texas
Envelope No. 45527220
By: Lisa Kelly
8/19/2020 3:42 PM
NO. 20-CV-0857
MATTHEW GLASS and IN THE DISTRICT COURT
MADELINE GLASS,
Plaintiffs,
Vv. 122NP JUDICIAL DISTRICT
TAYLOR MORRISON OF TEXAS, INC.,
and TAYLOR WOODROW
COMMUNITIES — LEAGUE CITY, LTD.,
Defendants. GALVESTON COUNTY, TEXAS
DEFENDANTS’ MOTION FOR PROTECTION
TO THE HONORABLE JUDGE OF SAID COURT:
Defendants TAYLOR MORRISON OF TEXAS, INC. (“Taylor Morrison”) and TAYLOR
WOODROW COMMUNITIES — LEAGUE CITY, LTD. (“Taylor Woodrow”) (collectively,
“Defendants”), subject to and without waiving their rights to enforce Plaintiffs’ arbitration
agreement and to an immediate stay/abatement of other trial court proceedings, move this Court
to issue an order protecting Defendants in this proceeding from any obligation to respond to or to
specifically object to Plaintiffs’ written discovery requests, which were served upon Defendants
along with Plaintiffs’ Original Petition and this Court’s Citations.!
In support of this Motion for Protection, Defendants incorporate herein DEFENDANTS’
ORIGINAL ANSWER, INCLUDING MOTION TO COMPEL ARBITRATION, PLEA IN
ABATEMENT & SPECIAL EXCEPTIONS, filed July 27, 2020 (hereinafter “Answer/Mtn to
Compel Arb”).
' See PLAINTIFF'S ORIGINAL PETITION, filed 6/24/2020 (hereinafter “Petition”).
DEFENDANTS’ MOTION FOR PROTECTION PAGE 1
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I INTRODUCTION
1.1 Plaintiffs own property located at 2135 Belcara View, League City, Texas 77573
(“Property”) and sued Defendants regarding original construction of that Property. Plaintiffs claim
that Defendants built the Property and sold it to original purchasers Thomas and Kittie Cart
(“Carts”), and the Carts subsequently sold the Property to Plaintiffs. The Property was constructed
pursuant to a March 22, 2010 Purchase Agreement between the Carts and Taylor Morrison
(“Purchase Agreement”), a copy of which is attached hereto and incorporated herein as Exhibit A.
The Purchase Agreement contains an enforceable arbitration agreement applicable to disputes
arising from construction of the Property. Plaintiffs acquired the Property from the Carts in April
2014, as shown by the Warranty Deed for the Property attached hereto and incorporated herein as
Exhibit B.
1.2 Plaintiffs are not parties to the Purchase Agreement by their signatures. However,
because of Plaintiffs’ claims against Defendants for original construction of the Property, Plaintiffs
are bound to the Purchase Agreement and bound to arbitrate their claims pursuant to the Purchase
Agreement’s Paragraph 11 arbitration agreement under the direct-benefits estoppel doctrine. See
In re Weekley Homes at 131 (contract and agency law may bind a nonparty to an arbitration
agreement; nonparty may be compelled to arbitrate if it seeks, through the claim, to derive a direct
benefit from the contract containing the arbitration provisions); /n re Ford Motor Co., 220 S.W.3d
21, 24-25 (Tex. App. — San Antonio 2006) (applying direct benefits estoppel to require arbitration
of minor children’s claims because a litigant who sues based on a contract subjects him or herself
to the contract’s terms, citing Jn re Weekley Homes). Whether a claim seeks a direct benefit from
a contract turns on the substance of the claim, not artful pleading. /d. Claims must be brought on
the contract (and arbitrated) if liability arises solely from the contract or must be determined by
reference to it. /d. at 132.
DEFENDANTS’ MOTION FOR PROTECTION PAGE 2
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1.3 By their claims and causes of action in their Petition, Plaintiffs chose to pursue
claims against Defendants “on the contract.” Their claims seek direct benefits from the Purchase
Agreement. A litigant who sues based on a contract subjects him or herselfto the contract’s terms.
In re FirstMerit Bank, N.A., 52 S.W.3d 749, 755 (Tex. 2001). When the litigant’s claims make
reference to or presumes the existence of the written agreement, such claims arise out of and relate
directly to the written agreement, and arbitration is appropriate. See Meyer v. WMCO-GP, LLC,
211 S.W.3d 302, 306 (Tex. 2006). The claim must depend on the existence ofthe contract and be
unable to stand independently without the contract. G.T. Leach Builders, LLC v. Sapphire V.P.,
LP, 458 S.W.3d 502, 528 (Tex. 2015).
1.4 By the written Purchase Agreement for original construction and sale of the
Property, Plaintiffs are bound by the Paragraph 11 DISPUTE RESOLUTION — ARBITRATION
provisions contained therein. That Paragraph 1 arbitration agreement states: “any and all Disputes
shall be arbitrated — which arbitration shall be mandatory and binding — pursuant to the Federal
Arbitration Act”; and they “ARE GIVING UP THEIR RESPECTIVE JUDICIAL RIGHTS TO
DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED
IN THIS ARBITRATION AGREEMENT.” Plaintiffs dispute that they are bound to the Paragraph
11 arbitration agreement. Plaintiffs filed this lawsuit in this Court and served Defendants with
numerous Requests for Disclosures, Requests for Admissions, Requests for Production, and
Interrogatories in this proceeding (“Plaintiffs’ lawsuit discovery requests”) along with Plaintiffs”
Original Petitions and this Court’s Citations. Defendants immediately moved to compel Plaintiffs’
dispute to arbitration pursuant to the Paragraph 1 arbitration agreement.
1.5 The Paragraph 11 arbitration agreement specifically includes the “right to conduct
a reasonable amount of discovery, including written discovery, depositions, and inspections and
testing, all as approved and coordinated by the Arbitrator.” Plaintiffs did not initiate an arbitration
DEFENDANTS’ MOTION FOR PROTECTION PAGE 3
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proceeding regarding their claims against Defendants and Plaintiffs did not submit Plaintiffs’
lawsuit discovery requests to an Arbitrator for approval and coordination.
1.6 Defendants generally object to Plaintiffs’ lawsuit discovery requests, in breach of
the Purchase Agreement’s Paragraph 11 arbitration agreement obligations, as an undue burden,
unnecessary expense, harassment, annoyance, and invasion of Defendants’ personal,
constitutional, and property rights. TEX. R. CIV. P. 192.6 (b). Further, Plaintiffs’ lawsuit
discovery requests are not reasonably calculated to lead to the discovery of admissible evidence in
this proceeding at this time. Defendants seek this Court’s protection of Defendants from such
discovery requests in this proceeding while Defendants seek enforcement of the Paragraph 11
arbitration agreement.
Il. FACTUAL BACKGROUND
2.1 The Purchase Agreement for original construction of the Property shows that:
... [A]ny and all Disputes shall be arbitrated — which arbitration shall be mandatory
and binding — pursuant to the Federal Arbitration Act.”
The Purchase Agreement shows the applicable waiver of “JUDICIAL RIGHTS TO
DISCOVERY”:
BY INITIALING IN THE SPACE BELOW, BUYER AND SELLER AGREE TO
HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN
THIS ARBITRATION AGREEMENT (PARAGRAPH 11 OF THIS PURCHASE
AGREEMENT) ENTITLED “DISPUTE RESOLUTION — ARBITRATION”
DECIDED BY NEUTRAL ARBITRATION IN ACCORDANCE WITH THE
FEDERAL ARBITRATION ACT, AND BUYER AND SELLER ARE GIVING
UP ANY RIGHTS BUYER AND SELLER MIGHT POSSESS TO HAVE THE
DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN
THE SPACE BELOW
? Answer/Mtn to Compel Arb, Ex. A-1, p. 8.
3 Answer/Mtn to Compel Arb, Ex. A-1, p. 9 (highlighting added).
DEFENDANTS’ MOTION FOR PROTECTION PAGE 4
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The Purchase Agreement further shows the right to conduct a reasonable amount of discovery in
arbitration, “all as approved and coordinated by the Arbitrator”:
[T]he parties to the arbitration shall have the right to conduct a reasonable amount
of discovery, including written discovery, depositions and inspections and testing,
all as approved and coordinated by the Arbitrator.*
2.2 Plaintiffs chose to initiate this lawsuit by their Petition that claims “Plaintiffs’ home
has developed excessive moisture, humidity and significant mold growth and mycotoxins resulting
from multiple design and construction defects.”*> The following written discovery requests to each
Defendant (collectively, “Discovery Requests”) accompany the Petition:
. Requests for Disclosures;
. Sixty-eight (68) Requests for Production;
. Nineteen (19) Interrogatories; and
. Nineteen (19) Requests for Admissions.°
The Discovery Requests all expressly request or demand service of Defendants’ disclosures and
responses upon Plaintiffs’ attorneys “no later than fifty (50) days after the date of service hereof.””
Plaintiffs served their Petition, including the Discovery Requests, on each Defendant on June 30,
2020. Defendants’ objections and responses to the Discovery Requests are therefore due on
August 19, 2020. See TEX. R. Civ. P. 194.3(a), 196.2(a), 197.2(a) & 198.2(a). Defendants risk
waiver of their specific objections to each request for discovery absent this Court’s order(s) of
referral to arbitration and protection of Defendants. See TEX. R. Civ. P. 193.2 (e).
2.3 The Discovery Requests concern the merits of Plaintiffs’ dispute with Defendants
regarding defects in original construction of the Property, not the merits of the validity and
4 Answer/Mtn to Compel Arb, Ex. A-1, p. 8.
5 Petition P 12.
© Petition pp. 16-40.
7 Petition pp. 13, 18, 30, and 37.
DEFENDANTS’ MOTION FOR PROTECTION PAGE 5
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enforceability of the Purchase Agreement’s Paragraph 11 arbitration agreement. Such requests are
neither relevant to nor reasonably necessary to lead to discovery of admissible evidence for: this
Court’s determination that Plaintiffs are bound to a valid and enforceable arbitration agreement;
and/or this Court’s determination that Plaintiffs’ claims are within the scope of such arbitration
agreement.
2.4 Plaintiffs’ demand for Defendants’ responses to Plaintiffs’ lawsuit discovery
requests, despite the enforceable waiver of judicial rights to discovery and the requirement to
obtain Arbitrator approval and coordination of such written discovery contained within the
Purchase Agreement’s Paragraph 11 arbitration agreement, present a dispute that must be
arbitrated according to that arbitration agreement. Defendants seek this Court’s protection from
any obligation to respond to or to specifically object to Plaintiffs’ lawsuit discovery requests in
this proceeding.
lll. ARGUMENT & AUTHORITIES
3.1 Defendants’ Answer/Mtn to Compel Arb explains that, since Plaintiffs assert
claims against Defendants for original construction of the Property, Plaintiffs are bound to the
Purchase Agreement’s Paragraph 11 arbitration agreement. Since Plaintiffs are bound to that
arbitration agreement, Plaintiffs are bound to the waiver of judicial discovery and to the
requirement to obtain Arbitrator approval and coordination of written discovery contained therein.
When an arbitration provision applies, the Texas Supreme Court provides this guidance regarding
discovery disputes:
The assessment of particular discovery needs in a given case and, in turn, the
enforceability of limitations thereon, is a determination we believe best suited to
the arbitrator as the case unfolds.
In re Poly-America, L.P., 262 S.W.3d 337, 358 (Tex. 2008).
3.2 The Texas Arbitration Act (“TAA”) authorizes limited pre-arbitration discovery,
but only when a trial court cannot fairly and properly make its decision on the motion to compel
DEFENDANTS’ MOTION FOR PROTECTION PAGE 6
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arbitration because it lacks sufficient information regarding the scope of an arbitration provision
or other issues of arbitrability. See In re Houston Pipe Line Co., 311 S.W.3d 449, 451 (Tex. 2009);
In re Copart, Inc., 563 S.W.3d 427, 432 (Tex. App.—E] Paso 2018, writ denied). Under the TAA,
the party seeking pre-arbitration discovery bears the burden of moving for and establishing that
the requested discovery is “reasonably necessary” and related to issues raised by the motion to
compel arbitration. Jn re Copart, 563 S.W.3d at 432. Absent such motion and proof sustaining
the burden, a trial court abuses its discretion in allowing discovery. /d. Here, the TAA is
inapplicable, since the Paragraph 1 arbitration agreement shows that it is governed by the Federal
Arbitration Act. When the arbitration provision states that it is governed by the Federal Arbitration
Act, the FAA applies. See In re Kellogg Brown & Root, 80 S.W.3d 611, 617 (Tex. App. — Houston
[1st Dist.] 2002). The FAA does not contain any statutory authorization for pre-arbitration
discovery. See 9 USC §§ 1-16. Plaintiffs lawsuit discovery requests are not reasonably calculated
to lead to the discovery of admissible evidence in this proceeding at this time and are completely
unnecessary. Cf: In re Alford Chevrolet-Geo, 997 S.W.2d 173 (Tex. 1999) (trial court may limit
discovery pending resolution of threshold issues like venue, jurisdiction, forum non conveniens,
and official immunity).
3.3 Pre-arbitration discovery “as to the merits of the underlying controversy” is not
permissible. See In re Houston Pipe Line Co., 311 S.W.3d 449, 451-452 (Tex. 2009) (concluding
that trial court abused its discretion by permitting pre-arbitration discovery related to defendant’s
damages calculations and existence of other potentially liable parties). Here, Plaintiff's Discovery
Requests relate to the merits of the underlying controversy, not to the enforceability or validity of
the arbitration clause. Plaintiffs did not request or obtain Arbitrator approval as required by their
arbitration agreement. Plaintiffs likewise did not apply to this Court for its order authorizing pre-
arbitration discovery as required by the TAA. Jn re Copart, Inc., 563 S.W.3d at 431-32.
DEFENDANTS’ MOTION FOR PROTECTION PAGE7
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3.4 Appellate courts have recognized that a trial court’s error in ordering pre-arbitration
discovery cannot be cured by ordinary appeal and, therefore, mandamus relief is appropriate. Jn
re Susan Newell Custom Home Builders, Inc., 420 $.W.3d 459, 462 (Tex. App.—Dallas 2014, writ
denied) (directing trial court to vacate its order allowing depositions of home builder’s principal
and bookkeeper, and to enter an order compelling arbitration of homeowners’ claims, and staying
all proceedings in trial court); Jn re VNA, Inc., 403 S.W.3d 483, 488 (Tex. App. — El Paso 2013)
(noting that defendant had no adequate remedy on appeal where trial court ordered pre-arbitration
discovery without adequate basis, which was “unjustifiably harassing” and “unduly burdensome”).
PRAYER
WHERFORE, PREMISES CONSIDERED, Defendants Taylor Morrison of Texas, Inc.
and Taylor Woodrow Communities—League City, Ltd. respectfully request that the Court issue
an order protecting Defendants from any obligation to respond to or to specifically object to
Plaintiffs’ lawsuit discovery requests in this proceeding.
DEFENDANTS’ MOTION FOR PROTECTION PAGE 8
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Respectfully submitted,
LE. Carl / Wilkerson
Stat Bar No. 21478400
cwilkerson@brstexas.com
BUSH RUDNICKI SHELTON, P.C
James Rudnicki
State Bar No. 24006148
james@brstexas.com
Diana Alcala
State Bar No. 24007590
dalcala@brstexas.com
2508 Ashley Worth Blvd., Suite 200
Austin, Texas 78738
Telephone: 512-263-8408
Facsimile: 512-263-2562
- and -
Carl J. Wilkerson
State Bar No. 21478400
cwilkerson@brstexas.com
200 N. Mesquite St., Suite 200
Arlington, Texas 76011
Telephone: 817-274-5992
Facsimile: 817-261-1671
ATTORNEYS FOR DEFENDANTS
TAYLOR MORRISON OF TEXAS.
INC., AND TAYLOR WOODROW
COMMUNITIES - LEAGUE CITY.
LTD.
DEFENDANTS’ MOTION FOR PROTECTION PAGE 9
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CERTIFICATE OF CONFERENCE
I certify that I conferred with Plaintiffs’ counsel of record A. Craig Eiland regarding
Defendants’ proposed Motion for Protection and requested relief. Mr. Eiland said Plaintiffs oppose
Defendants’ Motion for Protection. Despite best efforts, counsel cannot fully resolve Defendants’
requested relief by agreement and Defendants request the Court’s consideration and hearing.
Certified to on August 19, 2020.
/s/ Carl J. Wilkerson
Carl J. Wilkerson
CERTIFICATE OF SERVICE
I certify that a true and correct copy of the foregoing document was delivered to all counsel
of record in accordance with Rule 21a of the Texas Rules of Civil Procedure, via electronic
delivery for those counsel available through the e-filing system on August 19, 2020.
A. Craig Eiland Shaun W. Hodge
EILAND & BONNIN, P.C. HopcE LAw Firm, PLLC
2200 Market St., Suite 501 Old Galveston Square
Galveston, Texas 77550 2211 The Strand, Suite 302
ceiland@eilandlaw.com Galveston, Texas 77550
ATTORNEY FOR PLAINTIFFS shodge@hodgefirm.com
ATTORNEY FOR PLAINTIFFS
Dax O. Faubus
THE FAUBUS FIRM
1001 Texas Avenue, 11" Floor
Houston, Texas 77002
dax-notice@faubusfirm.com
ATTORNEY FOR PLAINTIFFS
Carl J. Wilkerson
DEFENDANTS’ MOTION FOR PROTECTION PAGE 10
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TWH - Mar Bella 65'
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taylor
morrison
Homes Inspired by You
“Purchase Agreement”
AAaR
Purchase Agreement, Escrow | ictions and De; sit Receipt)
THIS DOCUMENT IS A LEGALLY BINDING CONTRACT WHEN SIGNED BY BOTH PARTIES. PLEASE READ IT CAREFULLY. IF YOU
HAVE ANY QUESTIONS ABOUT YOUR RIGHTS OR OBLIGATIONS UNDER THIS PURCHASE AGREEMENT, YOU SHOULD
CONSULT WITH A LEGAL PROFESSIONAL, TAX ADVISOR OR OTHER FINANCIAL ADVISOR BEFORE SIGNING IT.
Basic Terms of Purchase Agreement (the “Basic Terms”)
FHA Loai VA Loan [_] CONVENTIONAL Loan] OR CASH []
Seller: Taylor Morrison of Texas, Inc., a Texas corporation
0 Co-Broker (if this box is checked, Buyer is represented by Buyer's Broker indicated on the signature page below and
on Exhibit D.)
Seller’s Sales Associate: Koren Campbell
Purchase Agreement Date:
Buyer: Thomas Cart
Buyer’s address: 3031 Keva Glen Dr. _Leaque City, TX. 7757:
Telephone number is: Home: Business: Cell: 713-979-6316
Email address is: thomas.cart@slaico.com
Co-Buyer: Kittee Cart
Co-Buyer’s address: .1X
Telephone number is: Home: Error! Reference source not found. Business: NA_Cell: NA
Email address is: NA
(collectively and individually, “Buyer")
Buyer will take title to the Property as: Thomas Cart and Kittee Cart
THE MANNER OF TAKING TITLE MAY HAVE LEGAL AND/OR TAX CONSEQUENCES. BUYER IS
ENCOURAGED TO DISCUSS THE SUBJECT WITH BUYER'S LEGAL AND/OR TAX ADVISOR. If the vesting
of title will be different from that which is indicated herein, Buyer shall notify Seller in writing not more than seven
(7) days after the Purchase Agreement Date defined above.
Plan Name/Elev: 1502834
/ Danford /C1/R
Inventory: b To-Be-Built: [1] Model: (1) (if “Model” is checked, please see Model Home Addendum)
Property:
Lot 4 (“Lot”), Block 04 (“Block”), Section 02 (“Section”) of TWH - Mar Bella 65’ ("Subdivision"), commonly
known as 2135 Belcara View , Leaque City, TX, within the TWH - Mar Bella 65' Community ("Community") in
the City of Leaque City, County of Galveston, State of Texas according to the plat of said Subdivision thereof
recorded in the Official Public Records of Galveston County, Texas together with the residential single-family
home to be constructed thereon (the “Home”) in accordance with this Purchase Agreement.
NOTICE OF ARBITRATION AND WAIVER OF RIGHT TO HAVE DISPUTES LITIGATED IN A COURT OR
JURY TRIAL: PARAGRAPH 11 OF THIS PURCHASE AGREEMENT PROVIDES FOR MANDATORY
BINDING ARBITRATION OF, AMONG OTHER THINGS, ANY DISPUTE ARISING OUT OF OR RELATING
TO THE TERMS OF THIS PURCHASE AGREEMENT OR THE PLANNING, DESIGN, ENGINEERING,
GRADING, CONSTRUCTION OR OTHER DEVELOPMENT OF THE PROPERTY.
Page 1 of 15
Exhibit A
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In consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows:
1) INCORPORATION OF BASIC TERMS:
The Basic Terms on Page 1 are incorporated herein and made a part hereof and identify the Property,
including the applicable Lot, Plan, Home Elevation, Subdivision and Community in which the Property is
located. The Total Purchase Price, the Earnest Money Deposit amounts and other terms of this transaction
and references to items herein shall be deemed to refer to the applicable information set forth in Paragraph
3 below. Buyer acknowledges that the terms and information contained in the Basic Terms and Paragraph
3 are accura.e in all respects.
2) PURCHASE OF SUBJECT PROPERTY:
Seller agrees to sell and Buyer, jointly and severally if more than one, agrees to purchase the subject
Property as described in the Basic Terms. The Plan is on file in the office of Seller and is available for
review by Buyer during Seller's normal business hours.
The "Effective Date" shall be the date on which this Purchase Agreement is fully executed by both Buyer
and Seller, which is found in the signature block on Page 15; provided, however, the time requirement for
the completion of construction of the Home on the Property by Seller for the sale to qualify for the
“Improved Lot Exemption” (as hereinafter defined) shall be measured from the Purchase Agreement Date
defined in the Basic Terms.
3) PURCHASE PRICE:
The “Purchase Price” more particularly described below shall mean the purchase price for the Property
(including related premiums and pre-selected options) as set forth below. The “Total Purchase Price” shall
mean the Purchase Price plus all options and upgrades selected by Buyer, as applicable (less any credits,
discounts and price reductions) in accordance with state laws within the time periods specified in this
Purchase Agreement or applicable Options Report Addendum, prior to the Closing Date (as hereinafter
defined).
Buyer acknowledges that the Total Purchase Price may not be determined at the time of execution of this
Agreement due to selections for options and upgrades etc. by Buyer during the course of Escrow (as
defined belo:v), as specified in one or more Options Report Addendums between Buyer and Seller. The
balance of the Total Purchase Price shall be paid by Buyer (or Buyer shall cause its designated lender to
pay the balance of the Total Purchase Price) to Seller as of the Closing Date. Buyer shall make all deposits
required under the Purchase Agreement on or before the date specified herein or any other deposits or
payments required for upgrades, extra or option items at the time specified in Exhibit A attached hereto and
made a part hereof (the “Options Report Addendum”). Except as otherwise expressly provided in this
Purchase Agreement or as approved by Seller due to final adjustments on the HUD Settlement Statement
or other limited circumstances, Buyer shall deposit into Escrow all additional sums required by Buyer to
close this transaction (other than any portion of the Total Purchase Price obtained from Buyer's lender or
any portion previously deposited directly with Seller and reflected on the Settlement Statement) as of the
Closing Date as defined below. In addition, Buyer shall cause its lender to deposit finance funds into
Escrow, so as to not delay the Closing Date. All of Buyer's funds required as of the Closing Date under this
Purchase Agreement will be paid by bank cashier's check, certified check or wire transfer paid through a
Texas institution Except as expressly set forth in the VA/FHA Addendum (if applicable), the Total
Purchase Price is not conditioned on an appraisal at the same price and is set forth below and Buyer hereby
waives any right to terminate Buyer's obligations under this Purchase Agreement in the event that an
appraisal on the Property is less than the Total Purchase Price,
The Total Purchase Price does not include Buyer's Closing costs, prepaid expenses and impounds
(to the extent applicable), estimates of which will be provided to you prior to the Closing Date.
Earnest Money Deposit: $3,500.01
Purchase Price, excluding future
Option Report Addendums as
provided for herein
(i) Base Home Price: $243,990.00
(ii) Lot Price/Premium: $10,000.00
(iii) Options as of the Purchase $30378.00
Agreement Date:
Total Purchase Price: $284,368.00
AS OF THE CLOSING DATE, THE EARNEST MONEY DEPOSIT AND OPTIONAL ITEMS DEPOSIT (AS
APPLICABLE) WILL BE CREDITED AGAINST THE TOTAL PURCHASE PRICE.
4) ACKNOWLEDGEMENT; ALL MONIES DEPOSITED; ESCROW PROVISIONS:
Buyer acknowledges that Seller will deposit the Earnest Money Deposit and Optional Items Deposits in
Seller's general account, and that no interest will accrue on the Earnest Money Deposits and Optional Items
Deposits for benefit of Buyer.
Page 2 of 15 Buyer's Initials _ @-
Exhibit A
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Any option, extra or upgrade items selected by Buyer, along with the price of such items and method of
payment, shall be listed in an Options Report Addendum. Buyer understands and agrees that (a) payments
made for option, extra or upgrade items are in addition to the Earnest Money Deposit; (b) that the option,
extra and upgrade items may not receive any or full value in an appraisal of the Property and (c) Buyer's
obligations under this Purchase Agreement are not conditioned on the Property appraising at the Total
Purchase Price and if the appraised value is less than the Total Purchase Price Buyer will be required to
OO
pay the difference between the Total Purchase Price and the appraised value of the Property. These
provisions are not intended to affect or in any manner modify the FHA/VA Financing Addendum.
Initial: Is:
Buyer.
In the event any portion of the Earnest Money Deposit or any Optional Items Deposit are paid by check and
the check is returned for insufficient funds ("NSF"), such check must be replaced (inclusive of the
reimbursement of the NSF Fee incurred by Seller) with a cashier's check or by wire transfer by Buyer within
forty-eight (48) hours after request of Seller. |f Buyer fails to do so, Buyer shall be in default under this
Purchase Agreement and Seller may terminate this Purchase Agreement in accordance with Paragraph
12a below.
If the sale of the Property is not closed for any reason other than default by Seller, the Earnest
Money Deposits, Optional Items Deposits, and all other monies paid to Seller shall be non-
refundable and retained by Seller as set forth in Paragraph 13.
Should Buyer request a transfer of Property to a different homesite or Taylor Morrison Community after the
Effective Date, approval and establishment of terms will be required by Seller. Additionally, should Seller
approve the transfer, the Buyer will be required to a pay a $500.00 non-refundable lot transfer fee as a
reasonable estimate of Seller's costs in accommodating Buyer's request.
5) GOVERNING DOCUMENTS:
Pursuant to Exhibit “K”, Buyer acknowledges receipt of the Declaration of Covenants, Conditions,
Restrictions and Easements also known as the CC&Rs (which includes any amendments to date and any
applicable supplemental declarations) (collectively, the “Declaration”) for the Mar Bella subdivision, as well
as the Articles of Incorporation (“Articles of Incorporation’), Bylaws ("Bylaws"), Rules and Regulations of
the Association (“Rules”), the Budget of the Association (“Budget') and Architectural Guidelines (“Design
Guidelines") of the Spectrum, membership in which is automatic with ownership of a lot in the above-
referenced Subdivision.
6) PRE-QUALIFICATION, FINANCING, CASH SALES AND EVIDENCE OF FUNDS:
a. Seller’s Approved Lender/Pre-Qualification Process: Prior to entering into this Purchase
Agreement, Buyer must deliver to Seller written evidence, issued by Seller's preferred lender
(‘Approved Lender’) Taylor Morrison Home Funding (“TMHF"), an affiliate of Seller, that Buyer has
been pre-qualified for Buyer's loan in an amount sufficient to complete the purchase of the Property
(including an estimate of Options/Upgrades to be purchased by the Buyer). Buyer is not obligated
to use the service of Seller's Approved Lender; Buyer may select any lender of its choice.
Seller’s Authorization to Disclose: By executing this Purchase Agreement, Buyer gives Seller or
Seller's designated agent permission to obtain a credit report on Buyer. Additionally, Buyer hereby
authorizes Seller to disclose to Buyer's lender information about Buyer known to Seller and to
obtain information from Buyer's lender regarding Buyer's loan, and further authorizes Buyer's lender
to disclose to Seller all information about Buyer known to such lender. Such information may
include exchanging copies of completed applications and other documents given by Buyer and such
personal financial or other information will be treated in accordance with all federal, state and lender
regulations regarding same. Buyer shall execute such further forms of written authorization for
Seller to obtain information regarding Buyer's loan with Buyer's lender as such lender may
reasonably request.
Buyer Financing/Loan Default: If Buyer is financing any portion of the Property purchase, Buyer
hereby authorizes Buyer's lender to pay the loan proceeds, through Escrow, directly to Seller. In
the event of a financed sale, Seller shall not be required to authorize starting construction of the
Home on the Property until the Earnest Money specified in the Basic Terms has been paid and
Buyer has obtained “loan approval” in accordance with the provisions of this Purchase Agreement.
“Loan approval” for the purposes.of this Purchase Agreement shall mean a firm commitment for a
loan from Buyer's tender, ‘subject to no contingencies. Buyer is entering into this Purchase
Agreement without any guarantee from Seller with respect to Buyer's ability to obtain financing for
the purchase of the Property. Buyer is relying on Buyer's own ability to obtain the funds necessary
to make the payments described above and Buyer's obligations under this Purchase Agreement are
not contingent on Buyer obtaining financing unless Seller and Buyer have entered into a mortgage
contingency addendum. Please refer to Exhibit G attached hereto and made a part hereof (the
“Financing Addendum”). Seller's right to delay starting construction of the Home pursuant to this
Paragraph 6 shall not be construed in any manner whatsoever to release Seller from its obligations
to complete construction of the Home pursuant to the terms of this Purchase Agreement and within
Page 3 of 15
Exhibit A
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the timeframe required by the Interstate Land Sales Full Disclosure Act ("ILSA"), it being the
intention of the parties that this sale be exempt from ILSA.
Cash Sale Default: In the event that Buyer is purchasing the Property on an “all-cash” basis,
Seller may elect to not commence construction of the Home until Seller has received evidence
acceptable to Seller in its sole discretion of Buyer's ability to pay the Total Purchase Price and all
other amounts payable by Buyer under this Purchase Agreement in cash without the need of any
third party financing (“Evidence of Funds’), Any such delay in Seller's commencement of
construction of the Home shall not extend the Closing Date. If Buyer fails to deposit any amount
required by this Purchase Agreement or any addenda hereto within the time period specified therein
Buyer shall be deemed to be in default under this Purchase Agreement, whereupon Seller may
exercise the remedies provided in Paragraph 12a.
Evidence of Funds: Regardless of whether Buyer has elected a cash purchase or a financed
purchase, within five (5) business days following the Effective Date, Buyer must deliver the
Evidence of Funds (which if Buyer has elected a cash purchase will apply to all funds (other than
financed funds) required of Buyer to close Escrow) to Seller for its approval. If Buyer fails to provide
the Evidence of Funds or Seller, in its sole discretion, disapproves same, Seller may terminate this
Purchase Agreement by written notice to Buyer, in which event any Earnest Money or other
depcsits (if applicable) paid by Buyer shall be returned to Buyer.
7) ESCROW:
Upon receipt of ithe fully executed Purchase Agreement, the Title Company (defined below) will open an
order for title work to be completed and perform both title and escrow duties to close the transaction
(including, but not limited to, the issuance of the title policy described herein, preparation of the Settlement
Statement, disbursement of funds (other than those provided directly to Seller as described herein) to all
respective parties, distribution of documents to all respective parties for execution, and recordation of such
documents to effectuate the Close of Escrow (collectively, the process is referred to herein as the
“Escrow’). Escrow shall be deemed opened with Escrow Holder upon Seller's delivery to Escrow Holder
(defined below) of a fully executed copy of this Agreement and all Addenda attached hereto.
To perform the services described above, the parties hereto employ Advantage Title of Fort Bend, L.C.,
which is licensed by the State of Texas, (“Title Company”) to serve as escrow holder of all documents and
funds for this transaction, other than such documents or funds provided directly to the Seller as described
herein ("Escrow Holder’), which may be affiliated with Seller, to issue policies of title insurance (‘Title
Insurer’). Please refer to Exhibit F, which is attached hereto and made a part hereof (“Affiliated Business
Disclosure Statement’).
In the event Buyer elects to use a title insurance company other than Title Insurer, or another title insurance
agent selected by Seller, and arranges for title insurance in place of the title insurance provided by Seller,
Buyer must do so by written notice to Seller delivered within seven (7) calendar days after the Effective Date
of this Purchase Agreement. Buyer's failure to do so shall be deemed waiver of Buyer's right to select
another title insurance company. When choosing another title company, Buyer agrees to pay that title
company's charges associated with the closing of the transaction.
This Purchase Agreement shall serve as the written escrow instructions to govern the consummation of the
purchase and sale of the Property. Seller and Buyer do hereby authorize and direct the Escrow Holder to
receive, hold, deliver and disburse, pursuant to the terms of this Purchase Agreement, all documents and
monies to be deposited except as expressly provided for in the Purchase Agreement or any exhibit,
addenda or amendment thereto in which such documents and monies are deposited with Seller. Should
Escrow Holder request additional instructions from the parties hereto or if additional instructions are required
by FHA or VA regulations, the parties shall execute such instructions, so long as the same shall not be
inconsistent with the provisions of this Purchase Agreement or any Addenda or amendments hereto.
Provisions regarding resolution of disputes and/or an award of attorneys’ fees and similar costs in any
additional escrow instructions shall apply only to disputes between Escrow Holder, Buyer and Seller, and
not to disputes between Buyer and Seller. If there is any conflict between this Purchase Agreement and
such escrow instructions, the provisions of this Purchase Agreement shall control. Buyer shall diligently and
timely perform all reasonable actions requested by Escrow Holder and Seller, including without limitation
completing and delivering to Seller or Escrow Holder, as applicable, all further instructions, documents,
instruments, forms, statements and applications required by Seller or Escrow Holder to complete the
transaction contemplated herein, including any disclosures concerning the Property, within three (3)
business days (or less, if so instructed) after receipt of such request, and shall otherwise cooperate fully with
Seller and Escrow Holder. Buyer's failure to so cooperate shall be a default hereunder entitling Seller to
terminate this Agreement, cancel Escrow and proceed in accordance with Paragraph 12a.
8) CLOSING DATE; CLOSING COSTS; PRORATIONS:
a Closing Date/Close of Escrow: Unless earlier terminated or extended by Seller as provided
herein, the “Closing Date" for this transaction shall occur following substantial completion of the
Home on a date to be specified by oral or written notice to be provided by Seller to Buyer (not
subject to “Notice” requirements as set forth in Paragraph 19). Substantial completion of the
Home shall be deemed to have occurred when a certificate of occupancy (or its equivalent) has
been issued. Seller will give Buyer at least ten (10) calendar days prior notice of the Closing Date,
as well as the time and place for the closing once a firm date is established. BECAUSE OF THE
Page 4 of 15 posi COC xe )
Exhibit A
TWH - Mar Belia 65°
Cart
021001
UNPREDICTABLE NATURE OF HOME CONSTRUCTION, IT IS NOT POSSIBLE TO ESTIMATE
THE EXACT CLOSING DATE WITH ABSOLUTE ACCURACY. DUE TO A VARIETY OF
FACTORS INCLUDING SELLER’S DECISIONS CONCERNING THE SCHEDULING OF WORK,
AVAILABILITY OF MATERIALS AND LABOR, THE ACTIONS OF PUBLIC AUTHORITIES,
REGULATORY REQUIREMENTS, WEATHER CONDITIONS, AND LENDER AND APPRAISAL
CONDITIONS, THE CLOSING DATE COULD BE EXTENDED BY SEVERAL WEEKS OR
MONTHS. BUYER ACCEPTS THE UNCERTAINTY OF THE ESTIMATED CLOSING DATE AND
WAIVES ALL CLAIMS AGAINST SELLER, ITS AGENTS, EMPLOYEES AND CONTRACTORS
ARISING IN CONNECTION THEREWITH. Further, notwithstanding any earlier notice date set forth
above, Seller reserves the right to postpone the Closing Date after initial notice is given with one (1)
day notice of the firm Closing Date. The “Close of Escrow” shall be the date on which the Deed
conveying the Property to Buyer is recorded in the Office of the County Recorder identified in the
Basic Terms.
Extension Fee/Revised Closing Date: Buyer does not have the right to extend, delay or postpone
the Closing Date. If Buyer fails to consummate the acquisition of the Property on the Closing Date,
Buyer shall be in default of this Purchase Agreement and Seller shall have the right to extend the
Closing Date in its sole and absolute discretion, in addition to any remedy or right Seller may have
under this Purchase Agreement. In the event that Seller extends the Closing Date, Buyer agrees to
pay Seller an extension fee of One Hundred Dollars ($100.00) for each calendar day that the
Closing Date is postponed (the “Extension Fee"). The Extension Fee is a reasonable estimate of
the damages, which are incapable or very difficult of accurate estimation, to Seller for delay in
closing the transaction as of the originally scheduled Closing Date. Nothing herein shall be
construed to obligate Seller to extend the Closing Date. Any Extension Payment made by Buyer
shall not be applicable to or used as a credit or offset toward the Purchase Price and shall be
consideration to Seller to extend the Closing Date. Seller may terminate this Purchase Agreement
and exercise all rights under this Purchase Agreement in the event of Buyer's default, if the
Extension Payment is not timely received. If Seller does not extend the Closing Date, Buyer will be
deemed in default under this Purchase Agreement and Seller will be entitled to exercise its rights
and remedies under Paragraph 12a hereof. The Extension Fee shall be immediately due and
payable at Closing Date for every day through to and including the revised date for the Clo
Preview
Filed: 8/19/2020 3:40 PM J OHN D. KINARD - District Clerk Galveston County, Texas Envelope No. 45527220 By: Lisa Kelly 8/19/2020 3:42 PM NO. 20-CV-0857 MATTHEW GLASS and IN THE DISTRICT COURT MADELINE GLASS, Plaintiffs, Vv. 122NP JUDICIAL DISTRICT TAYLOR MORRISON OF TEXAS, INC., and TAYLOR WOODROW COMMUNITIES — LEAGUE CITY, LTD., Defendants. GALVESTON COUNTY, TEXAS DEFENDANTS’ MOTION FOR PROTECTION TO THE HONORABLE JUDGE OF SAID COURT: Defendants TAYLOR MORRISON OF TEXAS, INC. (“Taylor Morrison”) and TAYLOR WOODROW COMMUNITIES — LEAGUE CITY, LTD. (“Taylor Woodrow”) (collectively, “Defendants”), subject to and without waiving their rights to enforce Plaintiffs’ arbitration agreement and to an immediate stay/abatement of other trial court proceedings, move this Court to issue an order protecting Defendants in this proceeding from any obligation to respond to or to specifically object to Plaintiffs’ written discovery requests, which were served upon Defendants along with Plaintiffs’ Original Petition and this Court’s Citations.! In support of this Motion for Protection, Defendants incorporate herein DEFENDANTS’ ORIGINAL ANSWER, INCLUDING MOTION TO COMPEL ARBITRATION, PLEA IN ABATEMENT & SPECIAL EXCEPTIONS, filed July 27, 2020 (hereinafter “Answer/Mtn to Compel Arb”). ' See PLAINTIFF'S ORIGINAL PETITION, filed 6/24/2020 (hereinafter “Petition”). DEFENDANTS’ MOTION FOR PROTECTION PAGE 1 Glass I INTRODUCTION 1.1 Plaintiffs own property located at 2135 Belcara View, League City, Texas 77573 (“Property”) and sued Defendants regarding original construction of that Property. Plaintiffs claim that Defendants built the Property and sold it to original purchasers Thomas and Kittie Cart (“Carts”), and the Carts subsequently sold the Property to Plaintiffs. The Property was constructed pursuant to a March 22, 2010 Purchase Agreement between the Carts and Taylor Morrison (“Purchase Agreement”), a copy of which is attached hereto and incorporated herein as Exhibit A. The Purchase Agreement contains an enforceable arbitration agreement applicable to disputes arising from construction of the Property. Plaintiffs acquired the Property from the Carts in April 2014, as shown by the Warranty Deed for the Property attached hereto and incorporated herein as Exhibit B. 1.2 Plaintiffs are not parties to the Purchase Agreement by their signatures. However, because of Plaintiffs’ claims against Defendants for original construction of the Property, Plaintiffs are bound to the Purchase Agreement and bound to arbitrate their claims pursuant to the Purchase Agreement’s Paragraph 11 arbitration agreement under the direct-benefits estoppel doctrine. See In re Weekley Homes at 131 (contract and agency law may bind a nonparty to an arbitration agreement; nonparty may be compelled to arbitrate if it seeks, through the claim, to derive a direct benefit from the contract containing the arbitration provisions); /n re Ford Motor Co., 220 S.W.3d 21, 24-25 (Tex. App. — San Antonio 2006) (applying direct benefits estoppel to require arbitration of minor children’s claims because a litigant who sues based on a contract subjects him or herself to the contract’s terms, citing Jn re Weekley Homes). Whether a claim seeks a direct benefit from a contract turns on the substance of the claim, not artful pleading. /d. Claims must be brought on the contract (and arbitrated) if liability arises solely from the contract or must be determined by reference to it. /d. at 132. DEFENDANTS’ MOTION FOR PROTECTION PAGE 2 Glass 1.3 By their claims and causes of action in their Petition, Plaintiffs chose to pursue claims against Defendants “on the contract.” Their claims seek direct benefits from the Purchase Agreement. A litigant who sues based on a contract subjects him or herselfto the contract’s terms. In re FirstMerit Bank, N.A., 52 S.W.3d 749, 755 (Tex. 2001). When the litigant’s claims make reference to or presumes the existence of the written agreement, such claims arise out of and relate directly to the written agreement, and arbitration is appropriate. See Meyer v. WMCO-GP, LLC, 211 S.W.3d 302, 306 (Tex. 2006). The claim must depend on the existence ofthe contract and be unable to stand independently without the contract. G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 528 (Tex. 2015). 1.4 By the written Purchase Agreement for original construction and sale of the Property, Plaintiffs are bound by the Paragraph 11 DISPUTE RESOLUTION — ARBITRATION provisions contained therein. That Paragraph 1 arbitration agreement states: “any and all Disputes shall be arbitrated — which arbitration shall be mandatory and binding — pursuant to the Federal Arbitration Act”; and they “ARE GIVING UP THEIR RESPECTIVE JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THIS ARBITRATION AGREEMENT.” Plaintiffs dispute that they are bound to the Paragraph 11 arbitration agreement. Plaintiffs filed this lawsuit in this Court and served Defendants with numerous Requests for Disclosures, Requests for Admissions, Requests for Production, and Interrogatories in this proceeding (“Plaintiffs’ lawsuit discovery requests”) along with Plaintiffs” Original Petitions and this Court’s Citations. Defendants immediately moved to compel Plaintiffs’ dispute to arbitration pursuant to the Paragraph 1 arbitration agreement. 1.5 The Paragraph 11 arbitration agreement specifically includes the “right to conduct a reasonable amount of discovery, including written discovery, depositions, and inspections and testing, all as approved and coordinated by the Arbitrator.” Plaintiffs did not initiate an arbitration DEFENDANTS’ MOTION FOR PROTECTION PAGE 3 Glass proceeding regarding their claims against Defendants and Plaintiffs did not submit Plaintiffs’ lawsuit discovery requests to an Arbitrator for approval and coordination. 1.6 Defendants generally object to Plaintiffs’ lawsuit discovery requests, in breach of the Purchase Agreement’s Paragraph 11 arbitration agreement obligations, as an undue burden, unnecessary expense, harassment, annoyance, and invasion of Defendants’ personal, constitutional, and property rights. TEX. R. CIV. P. 192.6 (b). Further, Plaintiffs’ lawsuit discovery requests are not reasonably calculated to lead to the discovery of admissible evidence in this proceeding at this time. Defendants seek this Court’s protection of Defendants from such discovery requests in this proceeding while Defendants seek enforcement of the Paragraph 11 arbitration agreement. Il. FACTUAL BACKGROUND 2.1 The Purchase Agreement for original construction of the Property shows that: ... [A]ny and all Disputes shall be arbitrated — which arbitration shall be mandatory and binding — pursuant to the Federal Arbitration Act.” The Purchase Agreement shows the applicable waiver of “JUDICIAL RIGHTS TO DISCOVERY”: BY INITIALING IN THE SPACE BELOW, BUYER AND SELLER AGREE TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THIS ARBITRATION AGREEMENT (PARAGRAPH 11 OF THIS PURCHASE AGREEMENT) ENTITLED “DISPUTE RESOLUTION — ARBITRATION” DECIDED BY NEUTRAL ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT, AND BUYER AND SELLER ARE GIVING UP ANY RIGHTS BUYER AND SELLER MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW ? Answer/Mtn to Compel Arb, Ex. A-1, p. 8. 3 Answer/Mtn to Compel Arb, Ex. A-1, p. 9 (highlighting added). DEFENDANTS’ MOTION FOR PROTECTION PAGE 4 Glass The Purchase Agreement further shows the right to conduct a reasonable amount of discovery in arbitration, “all as approved and coordinated by the Arbitrator”: [T]he parties to the arbitration shall have the right to conduct a reasonable amount of discovery, including written discovery, depositions and inspections and testing, all as approved and coordinated by the Arbitrator.* 2.2 Plaintiffs chose to initiate this lawsuit by their Petition that claims “Plaintiffs’ home has developed excessive moisture, humidity and significant mold growth and mycotoxins resulting from multiple design and construction defects.”*> The following written discovery requests to each Defendant (collectively, “Discovery Requests”) accompany the Petition: . Requests for Disclosures; . Sixty-eight (68) Requests for Production; . Nineteen (19) Interrogatories; and . Nineteen (19) Requests for Admissions.° The Discovery Requests all expressly request or demand service of Defendants’ disclosures and responses upon Plaintiffs’ attorneys “no later than fifty (50) days after the date of service hereof.”” Plaintiffs served their Petition, including the Discovery Requests, on each Defendant on June 30, 2020. Defendants’ objections and responses to the Discovery Requests are therefore due on August 19, 2020. See TEX. R. Civ. P. 194.3(a), 196.2(a), 197.2(a) & 198.2(a). Defendants risk waiver of their specific objections to each request for discovery absent this Court’s order(s) of referral to arbitration and protection of Defendants. See TEX. R. Civ. P. 193.2 (e). 2.3 The Discovery Requests concern the merits of Plaintiffs’ dispute with Defendants regarding defects in original construction of the Property, not the merits of the validity and 4 Answer/Mtn to Compel Arb, Ex. A-1, p. 8. 5 Petition P 12. © Petition pp. 16-40. 7 Petition pp. 13, 18, 30, and 37. DEFENDANTS’ MOTION FOR PROTECTION PAGE 5 Glass enforceability of the Purchase Agreement’s Paragraph 11 arbitration agreement. Such requests are neither relevant to nor reasonably necessary to lead to discovery of admissible evidence for: this Court’s determination that Plaintiffs are bound to a valid and enforceable arbitration agreement; and/or this Court’s determination that Plaintiffs’ claims are within the scope of such arbitration agreement. 2.4 Plaintiffs’ demand for Defendants’ responses to Plaintiffs’ lawsuit discovery requests, despite the enforceable waiver of judicial rights to discovery and the requirement to obtain Arbitrator approval and coordination of such written discovery contained within the Purchase Agreement’s Paragraph 11 arbitration agreement, present a dispute that must be arbitrated according to that arbitration agreement. Defendants seek this Court’s protection from any obligation to respond to or to specifically object to Plaintiffs’ lawsuit discovery requests in this proceeding. lll. ARGUMENT & AUTHORITIES 3.1 Defendants’ Answer/Mtn to Compel Arb explains that, since Plaintiffs assert claims against Defendants for original construction of the Property, Plaintiffs are bound to the Purchase Agreement’s Paragraph 11 arbitration agreement. Since Plaintiffs are bound to that arbitration agreement, Plaintiffs are bound to the waiver of judicial discovery and to the requirement to obtain Arbitrator approval and coordination of written discovery contained therein. When an arbitration provision applies, the Texas Supreme Court provides this guidance regarding discovery disputes: The assessment of particular discovery needs in a given case and, in turn, the enforceability of limitations thereon, is a determination we believe best suited to the arbitrator as the case unfolds. In re Poly-America, L.P., 262 S.W.3d 337, 358 (Tex. 2008). 3.2 The Texas Arbitration Act (“TAA”) authorizes limited pre-arbitration discovery, but only when a trial court cannot fairly and properly make its decision on the motion to compel DEFENDANTS’ MOTION FOR PROTECTION PAGE 6 Glass arbitration because it lacks sufficient information regarding the scope of an arbitration provision or other issues of arbitrability. See In re Houston Pipe Line Co., 311 S.W.3d 449, 451 (Tex. 2009); In re Copart, Inc., 563 S.W.3d 427, 432 (Tex. App.—E] Paso 2018, writ denied). Under the TAA, the party seeking pre-arbitration discovery bears the burden of moving for and establishing that the requested discovery is “reasonably necessary” and related to issues raised by the motion to compel arbitration. Jn re Copart, 563 S.W.3d at 432. Absent such motion and proof sustaining the burden, a trial court abuses its discretion in allowing discovery. /d. Here, the TAA is inapplicable, since the Paragraph 1 arbitration agreement shows that it is governed by the Federal Arbitration Act. When the arbitration provision states that it is governed by the Federal Arbitration Act, the FAA applies. See In re Kellogg Brown & Root, 80 S.W.3d 611, 617 (Tex. App. — Houston [1st Dist.] 2002). The FAA does not contain any statutory authorization for pre-arbitration discovery. See 9 USC §§ 1-16. Plaintiffs lawsuit discovery requests are not reasonably calculated to lead to the discovery of admissible evidence in this proceeding at this time and are completely unnecessary. Cf: In re Alford Chevrolet-Geo, 997 S.W.2d 173 (Tex. 1999) (trial court may limit discovery pending resolution of threshold issues like venue, jurisdiction, forum non conveniens, and official immunity). 3.3 Pre-arbitration discovery “as to the merits of the underlying controversy” is not permissible. See In re Houston Pipe Line Co., 311 S.W.3d 449, 451-452 (Tex. 2009) (concluding that trial court abused its discretion by permitting pre-arbitration discovery related to defendant’s damages calculations and existence of other potentially liable parties). Here, Plaintiff's Discovery Requests relate to the merits of the underlying controversy, not to the enforceability or validity of the arbitration clause. Plaintiffs did not request or obtain Arbitrator approval as required by their arbitration agreement. Plaintiffs likewise did not apply to this Court for its order authorizing pre- arbitration discovery as required by the TAA. Jn re Copart, Inc., 563 S.W.3d at 431-32. DEFENDANTS’ MOTION FOR PROTECTION PAGE7 Glass 3.4 Appellate courts have recognized that a trial court’s error in ordering pre-arbitration discovery cannot be cured by ordinary appeal and, therefore, mandamus relief is appropriate. Jn re Susan Newell Custom Home Builders, Inc., 420 $.W.3d 459, 462 (Tex. App.—Dallas 2014, writ denied) (directing trial court to vacate its order allowing depositions of home builder’s principal and bookkeeper, and to enter an order compelling arbitration of homeowners’ claims, and staying all proceedings in trial court); Jn re VNA, Inc., 403 S.W.3d 483, 488 (Tex. App. — El Paso 2013) (noting that defendant had no adequate remedy on appeal where trial court ordered pre-arbitration discovery without adequate basis, which was “unjustifiably harassing” and “unduly burdensome”). PRAYER WHERFORE, PREMISES CONSIDERED, Defendants Taylor Morrison of Texas, Inc. and Taylor Woodrow Communities—League City, Ltd. respectfully request that the Court issue an order protecting Defendants from any obligation to respond to or to specifically object to Plaintiffs’ lawsuit discovery requests in this proceeding. DEFENDANTS’ MOTION FOR PROTECTION PAGE 8 Glass Respectfully submitted, LE. Carl / Wilkerson Stat Bar No. 21478400 cwilkerson@brstexas.com BUSH RUDNICKI SHELTON, P.C James Rudnicki State Bar No. 24006148 james@brstexas.com Diana Alcala State Bar No. 24007590 dalcala@brstexas.com 2508 Ashley Worth Blvd., Suite 200 Austin, Texas 78738 Telephone: 512-263-8408 Facsimile: 512-263-2562 - and - Carl J. Wilkerson State Bar No. 21478400 cwilkerson@brstexas.com 200 N. Mesquite St., Suite 200 Arlington, Texas 76011 Telephone: 817-274-5992 Facsimile: 817-261-1671 ATTORNEYS FOR DEFENDANTS TAYLOR MORRISON OF TEXAS. INC., AND TAYLOR WOODROW COMMUNITIES - LEAGUE CITY. LTD. DEFENDANTS’ MOTION FOR PROTECTION PAGE 9 Glass CERTIFICATE OF CONFERENCE I certify that I conferred with Plaintiffs’ counsel of record A. Craig Eiland regarding Defendants’ proposed Motion for Protection and requested relief. Mr. Eiland said Plaintiffs oppose Defendants’ Motion for Protection. Despite best efforts, counsel cannot fully resolve Defendants’ requested relief by agreement and Defendants request the Court’s consideration and hearing. Certified to on August 19, 2020. /s/ Carl J. Wilkerson Carl J. Wilkerson CERTIFICATE OF SERVICE I certify that a true and correct copy of the foregoing document was delivered to all counsel of record in accordance with Rule 21a of the Texas Rules of Civil Procedure, via electronic delivery for those counsel available through the e-filing system on August 19, 2020. A. Craig Eiland Shaun W. Hodge EILAND & BONNIN, P.C. HopcE LAw Firm, PLLC 2200 Market St., Suite 501 Old Galveston Square Galveston, Texas 77550 2211 The Strand, Suite 302 ceiland@eilandlaw.com Galveston, Texas 77550 ATTORNEY FOR PLAINTIFFS shodge@hodgefirm.com ATTORNEY FOR PLAINTIFFS Dax O. Faubus THE FAUBUS FIRM 1001 Texas Avenue, 11" Floor Houston, Texas 77002 dax-notice@faubusfirm.com ATTORNEY FOR PLAINTIFFS Carl J. Wilkerson DEFENDANTS’ MOTION FOR PROTECTION PAGE 10 Glass TWH - Mar Bella 65' Cart 021001 taylor morrison Homes Inspired by You “Purchase Agreement” AAaR Purchase Agreement, Escrow | ictions and De; sit Receipt) THIS DOCUMENT IS A LEGALLY BINDING CONTRACT WHEN SIGNED BY BOTH PARTIES. PLEASE READ IT CAREFULLY. IF YOU HAVE ANY QUESTIONS ABOUT YOUR RIGHTS OR OBLIGATIONS UNDER THIS PURCHASE AGREEMENT, YOU SHOULD CONSULT WITH A LEGAL PROFESSIONAL, TAX ADVISOR OR OTHER FINANCIAL ADVISOR BEFORE SIGNING IT. Basic Terms of Purchase Agreement (the “Basic Terms”) FHA Loai VA Loan [_] CONVENTIONAL Loan] OR CASH [] Seller: Taylor Morrison of Texas, Inc., a Texas corporation 0 Co-Broker (if this box is checked, Buyer is represented by Buyer's Broker indicated on the signature page below and on Exhibit D.) Seller’s Sales Associate: Koren Campbell Purchase Agreement Date: Buyer: Thomas Cart Buyer’s address: 3031 Keva Glen Dr. _Leaque City, TX. 7757: Telephone number is: Home: Business: Cell: 713-979-6316 Email address is: thomas.cart@slaico.com Co-Buyer: Kittee Cart Co-Buyer’s address: .1X Telephone number is: Home: Error! Reference source not found. Business: NA_Cell: NA Email address is: NA (collectively and individually, “Buyer") Buyer will take title to the Property as: Thomas Cart and Kittee Cart THE MANNER OF TAKING TITLE MAY HAVE LEGAL AND/OR TAX CONSEQUENCES. BUYER IS ENCOURAGED TO DISCUSS THE SUBJECT WITH BUYER'S LEGAL AND/OR TAX ADVISOR. If the vesting of title will be different from that which is indicated herein, Buyer shall notify Seller in writing not more than seven (7) days after the Purchase Agreement Date defined above. Plan Name/Elev: 1502834 / Danford /C1/R Inventory: b To-Be-Built: [1] Model: (1) (if “Model” is checked, please see Model Home Addendum) Property: Lot 4 (“Lot”), Block 04 (“Block”), Section 02 (“Section”) of TWH - Mar Bella 65’ ("Subdivision"), commonly known as 2135 Belcara View , Leaque City, TX, within the TWH - Mar Bella 65' Community ("Community") in the City of Leaque City, County of Galveston, State of Texas according to the plat of said Subdivision thereof recorded in the Official Public Records of Galveston County, Texas together with the residential single-family home to be constructed thereon (the “Home”) in accordance with this Purchase Agreement. NOTICE OF ARBITRATION AND WAIVER OF RIGHT TO HAVE DISPUTES LITIGATED IN A COURT OR JURY TRIAL: PARAGRAPH 11 OF THIS PURCHASE AGREEMENT PROVIDES FOR MANDATORY BINDING ARBITRATION OF, AMONG OTHER THINGS, ANY DISPUTE ARISING OUT OF OR RELATING TO THE TERMS OF THIS PURCHASE AGREEMENT OR THE PLANNING, DESIGN, ENGINEERING, GRADING, CONSTRUCTION OR OTHER DEVELOPMENT OF THE PROPERTY. Page 1 of 15 Exhibit A ‘TWH - Mar Bella 65° Cart 021001 In consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows: 1) INCORPORATION OF BASIC TERMS: The Basic Terms on Page 1 are incorporated herein and made a part hereof and identify the Property, including the applicable Lot, Plan, Home Elevation, Subdivision and Community in which the Property is located. The Total Purchase Price, the Earnest Money Deposit amounts and other terms of this transaction and references to items herein shall be deemed to refer to the applicable information set forth in Paragraph 3 below. Buyer acknowledges that the terms and information contained in the Basic Terms and Paragraph 3 are accura.e in all respects. 2) PURCHASE OF SUBJECT PROPERTY: Seller agrees to sell and Buyer, jointly and severally if more than one, agrees to purchase the subject Property as described in the Basic Terms. The Plan is on file in the office of Seller and is available for review by Buyer during Seller's normal business hours. The "Effective Date" shall be the date on which this Purchase Agreement is fully executed by both Buyer and Seller, which is found in the signature block on Page 15; provided, however, the time requirement for the completion of construction of the Home on the Property by Seller for the sale to qualify for the “Improved Lot Exemption” (as hereinafter defined) shall be measured from the Purchase Agreement Date defined in the Basic Terms. 3) PURCHASE PRICE: The “Purchase Price” more particularly described below shall mean the purchase price for the Property (including related premiums and pre-selected options) as set forth below. The “Total Purchase Price” shall mean the Purchase Price plus all options and upgrades selected by Buyer, as applicable (less any credits, discounts and price reductions) in accordance with state laws within the time periods specified in this Purchase Agreement or applicable Options Report Addendum, prior to the Closing Date (as hereinafter defined). Buyer acknowledges that the Total Purchase Price may not be determined at the time of execution of this Agreement due to selections for options and upgrades etc. by Buyer during the course of Escrow (as defined belo:v), as specified in one or more Options Report Addendums between Buyer and Seller. The balance of the Total Purchase Price shall be paid by Buyer (or Buyer shall cause its designated lender to pay the balance of the Total Purchase Price) to Seller as of the Closing Date. Buyer shall make all deposits required under the Purchase Agreement on or before the date specified herein or any other deposits or payments required for upgrades, extra or option items at the time specified in Exhibit A attached hereto and made a part hereof (the “Options Report Addendum”). Except as otherwise expressly provided in this Purchase Agreement or as approved by Seller due to final adjustments on the HUD Settlement Statement or other limited circumstances, Buyer shall deposit into Escrow all additional sums required by Buyer to close this transaction (other than any portion of the Total Purchase Price obtained from Buyer's lender or any portion previously deposited directly with Seller and reflected on the Settlement Statement) as of the Closing Date as defined below. In addition, Buyer shall cause its lender to deposit finance funds into Escrow, so as to not delay the Closing Date. All of Buyer's funds required as of the Closing Date under this Purchase Agreement will be paid by bank cashier's check, certified check or wire transfer paid through a Texas institution Except as expressly set forth in the VA/FHA Addendum (if applicable), the Total Purchase Price is not conditioned on an appraisal at the same price and is set forth below and Buyer hereby waives any right to terminate Buyer's obligations under this Purchase Agreement in the event that an appraisal on the Property is less than the Total Purchase Price, The Total Purchase Price does not include Buyer's Closing costs, prepaid expenses and impounds (to the extent applicable), estimates of which will be provided to you prior to the Closing Date. Earnest Money Deposit: $3,500.01 Purchase Price, excluding future Option Report Addendums as provided for herein (i) Base Home Price: $243,990.00 (ii) Lot Price/Premium: $10,000.00 (iii) Options as of the Purchase $30378.00 Agreement Date: Total Purchase Price: $284,368.00 AS OF THE CLOSING DATE, THE EARNEST MONEY DEPOSIT AND OPTIONAL ITEMS DEPOSIT (AS APPLICABLE) WILL BE CREDITED AGAINST THE TOTAL PURCHASE PRICE. 4) ACKNOWLEDGEMENT; ALL MONIES DEPOSITED; ESCROW PROVISIONS: Buyer acknowledges that Seller will deposit the Earnest Money Deposit and Optional Items Deposits in Seller's general account, and that no interest will accrue on the Earnest Money Deposits and Optional Items Deposits for benefit of Buyer. Page 2 of 15 Buyer's Initials _ @- Exhibit A TWH - Mar Bella 65° Cart 021001 Any option, extra or upgrade items selected by Buyer, along with the price of such items and method of payment, shall be listed in an Options Report Addendum. Buyer understands and agrees that (a) payments made for option, extra or upgrade items are in addition to the Earnest Money Deposit; (b) that the option, extra and upgrade items may not receive any or full value in an appraisal of the Property and (c) Buyer's obligations under this Purchase Agreement are not conditioned on the Property appraising at the Total Purchase Price and if the appraised value is less than the Total Purchase Price Buyer will be required to OO pay the difference between the Total Purchase Price and the appraised value of the Property. These provisions are not intended to affect or in any manner modify the FHA/VA Financing Addendum. Initial: Is: Buyer. In the event any portion of the Earnest Money Deposit or any Optional Items Deposit are paid by check and the check is returned for insufficient funds ("NSF"), such check must be replaced (inclusive of the reimbursement of the NSF Fee incurred by Seller) with a cashier's check or by wire transfer by Buyer within forty-eight (48) hours after request of Seller. |f Buyer fails to do so, Buyer shall be in default under this Purchase Agreement and Seller may terminate this Purchase Agreement in accordance with Paragraph 12a below. If the sale of the Property is not closed for any reason other than default by Seller, the Earnest Money Deposits, Optional Items Deposits, and all other monies paid to Seller shall be non- refundable and retained by Seller as set forth in Paragraph 13. Should Buyer request a transfer of Property to a different homesite or Taylor Morrison Community after the Effective Date, approval and establishment of terms will be required by Seller. Additionally, should Seller approve the transfer, the Buyer will be required to a pay a $500.00 non-refundable lot transfer fee as a reasonable estimate of Seller's costs in accommodating Buyer's request. 5) GOVERNING DOCUMENTS: Pursuant to Exhibit “K”, Buyer acknowledges receipt of the Declaration of Covenants, Conditions, Restrictions and Easements also known as the CC&Rs (which includes any amendments to date and any applicable supplemental declarations) (collectively, the “Declaration”) for the Mar Bella subdivision, as well as the Articles of Incorporation (“Articles of Incorporation’), Bylaws ("Bylaws"), Rules and Regulations of the Association (“Rules”), the Budget of the Association (“Budget') and Architectural Guidelines (“Design Guidelines") of the Spectrum, membership in which is automatic with ownership of a lot in the above- referenced Subdivision. 6) PRE-QUALIFICATION, FINANCING, CASH SALES AND EVIDENCE OF FUNDS: a. Seller’s Approved Lender/Pre-Qualification Process: Prior to entering into this Purchase Agreement, Buyer must deliver to Seller written evidence, issued by Seller's preferred lender (‘Approved Lender’) Taylor Morrison Home Funding (“TMHF"), an affiliate of Seller, that Buyer has been pre-qualified for Buyer's loan in an amount sufficient to complete the purchase of the Property (including an estimate of Options/Upgrades to be purchased by the Buyer). Buyer is not obligated to use the service of Seller's Approved Lender; Buyer may select any lender of its choice. Seller’s Authorization to Disclose: By executing this Purchase Agreement, Buyer gives Seller or Seller's designated agent permission to obtain a credit report on Buyer. Additionally, Buyer hereby authorizes Seller to disclose to Buyer's lender information about Buyer known to Seller and to obtain information from Buyer's lender regarding Buyer's loan, and further authorizes Buyer's lender to disclose to Seller all information about Buyer known to such lender. Such information may include exchanging copies of completed applications and other documents given by Buyer and such personal financial or other information will be treated in accordance with all federal, state and lender regulations regarding same. Buyer shall execute such further forms of written authorization for Seller to obtain information regarding Buyer's loan with Buyer's lender as such lender may reasonably request. Buyer Financing/Loan Default: If Buyer is financing any portion of the Property purchase, Buyer hereby authorizes Buyer's lender to pay the loan proceeds, through Escrow, directly to Seller. In the event of a financed sale, Seller shall not be required to authorize starting construction of the Home on the Property until the Earnest Money specified in the Basic Terms has been paid and Buyer has obtained “loan approval” in accordance with the provisions of this Purchase Agreement. “Loan approval” for the purposes.of this Purchase Agreement shall mean a firm commitment for a loan from Buyer's tender, ‘subject to no contingencies. Buyer is entering into this Purchase Agreement without any guarantee from Seller with respect to Buyer's ability to obtain financing for the purchase of the Property. Buyer is relying on Buyer's own ability to obtain the funds necessary to make the payments described above and Buyer's obligations under this Purchase Agreement are not contingent on Buyer obtaining financing unless Seller and Buyer have entered into a mortgage contingency addendum. Please refer to Exhibit G attached hereto and made a part hereof (the “Financing Addendum”). Seller's right to delay starting construction of the Home pursuant to this Paragraph 6 shall not be construed in any manner whatsoever to release Seller from its obligations to complete construction of the Home pursuant to the terms of this Purchase Agreement and within Page 3 of 15 Exhibit A TWH - Mar Bella 65° Cart 021001 the timeframe required by the Interstate Land Sales Full Disclosure Act ("ILSA"), it being the intention of the parties that this sale be exempt from ILSA. Cash Sale Default: In the event that Buyer is purchasing the Property on an “all-cash” basis, Seller may elect to not commence construction of the Home until Seller has received evidence acceptable to Seller in its sole discretion of Buyer's ability to pay the Total Purchase Price and all other amounts payable by Buyer under this Purchase Agreement in cash without the need of any third party financing (“Evidence of Funds’), Any such delay in Seller's commencement of construction of the Home shall not extend the Closing Date. If Buyer fails to deposit any amount required by this Purchase Agreement or any addenda hereto within the time period specified therein Buyer shall be deemed to be in default under this Purchase Agreement, whereupon Seller may exercise the remedies provided in Paragraph 12a. Evidence of Funds: Regardless of whether Buyer has elected a cash purchase or a financed purchase, within five (5) business days following the Effective Date, Buyer must deliver the Evidence of Funds (which if Buyer has elected a cash purchase will apply to all funds (other than financed funds) required of Buyer to close Escrow) to Seller for its approval. If Buyer fails to provide the Evidence of Funds or Seller, in its sole discretion, disapproves same, Seller may terminate this Purchase Agreement by written notice to Buyer, in which event any Earnest Money or other depcsits (if applicable) paid by Buyer shall be returned to Buyer. 7) ESCROW: Upon receipt of ithe fully executed Purchase Agreement, the Title Company (defined below) will open an order for title work to be completed and perform both title and escrow duties to close the transaction (including, but not limited to, the issuance of the title policy described herein, preparation of the Settlement Statement, disbursement of funds (other than those provided directly to Seller as described herein) to all respective parties, distribution of documents to all respective parties for execution, and recordation of such documents to effectuate the Close of Escrow (collectively, the process is referred to herein as the “Escrow’). Escrow shall be deemed opened with Escrow Holder upon Seller's delivery to Escrow Holder (defined below) of a fully executed copy of this Agreement and all Addenda attached hereto. To perform the services described above, the parties hereto employ Advantage Title of Fort Bend, L.C., which is licensed by the State of Texas, (“Title Company”) to serve as escrow holder of all documents and funds for this transaction, other than such documents or funds provided directly to the Seller as described herein ("Escrow Holder’), which may be affiliated with Seller, to issue policies of title insurance (‘Title Insurer’). Please refer to Exhibit F, which is attached hereto and made a part hereof (“Affiliated Business Disclosure Statement’). In the event Buyer elects to use a title insurance company other than Title Insurer, or another title insurance agent selected by Seller, and arranges for title insurance in place of the title insurance provided by Seller, Buyer must do so by written notice to Seller delivered within seven (7) calendar days after the Effective Date of this Purchase Agreement. Buyer's failure to do so shall be deemed waiver of Buyer's right to select another title insurance company. When choosing another title company, Buyer agrees to pay that title company's charges associated with the closing of the transaction. This Purchase Agreement shall serve as the written escrow instructions to govern the consummation of the purchase and sale of the Property. Seller and Buyer do hereby authorize and direct the Escrow Holder to receive, hold, deliver and disburse, pursuant to the terms of this Purchase Agreement, all documents and monies to be deposited except as expressly provided for in the Purchase Agreement or any exhibit, addenda or amendment thereto in which such documents and monies are deposited with Seller. Should Escrow Holder request additional instructions from the parties hereto or if additional instructions are required by FHA or VA regulations, the parties shall execute such instructions, so long as the same shall not be inconsistent with the provisions of this Purchase Agreement or any Addenda or amendments hereto. Provisions regarding resolution of disputes and/or an award of attorneys’ fees and similar costs in any additional escrow instructions shall apply only to disputes between Escrow Holder, Buyer and Seller, and not to disputes between Buyer and Seller. If there is any conflict between this Purchase Agreement and such escrow instructions, the provisions of this Purchase Agreement shall control. Buyer shall diligently and timely perform all reasonable actions requested by Escrow Holder and Seller, including without limitation completing and delivering to Seller or Escrow Holder, as applicable, all further instructions, documents, instruments, forms, statements and applications required by Seller or Escrow Holder to complete the transaction contemplated herein, including any disclosures concerning the Property, within three (3) business days (or less, if so instructed) after receipt of such request, and shall otherwise cooperate fully with Seller and Escrow Holder. Buyer's failure to so cooperate shall be a default hereunder entitling Seller to terminate this Agreement, cancel Escrow and proceed in accordance with Paragraph 12a. 8) CLOSING DATE; CLOSING COSTS; PRORATIONS: a Closing Date/Close of Escrow: Unless earlier terminated or extended by Seller as provided herein, the “Closing Date" for this transaction shall occur following substantial completion of the Home on a date to be specified by oral or written notice to be provided by Seller to Buyer (not subject to “Notice” requirements as set forth in Paragraph 19). Substantial completion of the Home shall be deemed to have occurred when a certificate of occupancy (or its equivalent) has been issued. Seller will give Buyer at least ten (10) calendar days prior notice of the Closing Date, as well as the time and place for the closing once a firm date is established. BECAUSE OF THE Page 4 of 15 posi COC xe ) Exhibit A TWH - Mar Belia 65° Cart 021001 UNPREDICTABLE NATURE OF HOME CONSTRUCTION, IT IS NOT POSSIBLE TO ESTIMATE THE EXACT CLOSING DATE WITH ABSOLUTE ACCURACY. DUE TO A VARIETY OF FACTORS INCLUDING SELLER’S DECISIONS CONCERNING THE SCHEDULING OF WORK, AVAILABILITY OF MATERIALS AND LABOR, THE ACTIONS OF PUBLIC AUTHORITIES, REGULATORY REQUIREMENTS, WEATHER CONDITIONS, AND LENDER AND APPRAISAL CONDITIONS, THE CLOSING DATE COULD BE EXTENDED BY SEVERAL WEEKS OR MONTHS. BUYER ACCEPTS THE UNCERTAINTY OF THE ESTIMATED CLOSING DATE AND WAIVES ALL CLAIMS AGAINST SELLER, ITS AGENTS, EMPLOYEES AND CONTRACTORS ARISING IN CONNECTION THEREWITH. Further, notwithstanding any earlier notice date set forth above, Seller reserves the right to postpone the Closing Date after initial notice is given with one (1) day notice of the firm Closing Date. The “Close of Escrow” shall be the date on which the Deed conveying the Property to Buyer is recorded in the Office of the County Recorder identified in the Basic Terms. Extension Fee/Revised Closing Date: Buyer does not have the right to extend, delay or postpone the Closing Date. If Buyer fails to consummate the acquisition of the Property on the Closing Date, Buyer shall be in default of this Purchase Agreement and Seller shall have the right to extend the Closing Date in its sole and absolute discretion, in addition to any remedy or right Seller may have under this Purchase Agreement. In the event that Seller extends the Closing Date, Buyer agrees to pay Seller an extension fee of One Hundred Dollars ($100.00) for each calendar day that the Closing Date is postponed (the “Extension Fee"). The Extension Fee is a reasonable estimate of the damages, which are incapable or very difficult of accurate estimation, to Seller for delay in closing the transaction as of the originally scheduled Closing Date. Nothing herein shall be construed to obligate Seller to extend the Closing Date. Any Extension Payment made by Buyer shall not be applicable to or used as a credit or offset toward the Purchase Price and shall be consideration to Seller to extend the Closing Date. Seller may terminate this Purchase Agreement and exercise all rights under this Purchase Agreement in the event of Buyer's default, if the Extension Payment is not timely received. If Seller does not extend the Closing Date, Buyer will be deemed in default under this Purchase Agreement and Seller will be entitled to exercise its rights and remedies under Paragraph 12a hereof. The Extension Fee shall be immediately due and payable at Closing Date for every day through to and including the revised date for the Clo