## Facts

- Robert and Maria Cherry bought a residence from Brian and Rebekah McCall under a written contract stating the buyers took the property “as is.”
- After closing, the Cherrys discovered a concealed, walled-in basement room filled with damp trash and materials contaminated with mold.
- The Cherrys filed a declaratory-judgment action seeking declarations that the McCalls breached the contract and that the hidden room was a mutual mistake warranting rescission.
- The McCalls denied liability, relied on the “as is” provision as an affirmative defense, and counterclaimed for attorney’s fees.
- The trial court granted partial summary judgment that the Cherrys take nothing on their declaratory claims and refused to consider deposition “corrections” offered by errata sheet.
- After that ruling, the Cherrys amended to add negligent misrepresentation, fraud, and DTPA claims; the trial court struck those claims, severed issues, and granted further summary judgment establishing and awarding the McCalls $30,000 in attorney’s fees.
- The trial court denied the Cherrys’ motion for new trial.

## Issues

1. Whether an “as is” clause in a residential sales contract allocates the risk of unknown conditions to the buyer, defeating rescission based on mutual mistake and related contract theories.
2. Whether the trial court abused its discretion by refusing to treat deposition errata as evidence creating a fact issue to defeat summary judgment.
3. Whether the trial court abused its discretion by striking newly added causes of action filed after entry of partial summary judgment.
4. Whether the trial court properly granted and calculated attorney’s fees to the prevailing sellers in a declaratory-judgment action.

## Decision

- The court of appeals affirmed the judgment in full.
- The “as is” clause placed the risk of unknown defects on the Cherrys and barred rescission based on mutual mistake as a matter of law.
- The trial court did not abuse its discretion in refusing to consider the errata sheet as substantive testimony changes for summary-judgment purposes.
- The trial court did not abuse its discretion in striking the post-summary-judgment amended claims.
- The award of $30,000 in attorney’s fees to the McCalls under the declaratory-judgment statute was affirmed.

## Legal Principles

- Mutual mistake may support rescission only when the party seeking rescission has not agreed to bear the risk of the mistaken fact.
- A valid “as is” clause is an express allocation of risk to the buyer for unknown property conditions; absent a vitiating circumstance (e.g., fraud), it defeats mutual-mistake rescission and related theories premised on unknown defects.
- Trial courts have discretion to disregard deposition errata offered as late, substantive revisions—particularly when used to manufacture a fact issue in response to summary judgment without an adequate explanation.
- After partial summary judgment, a trial court may strike late amendments asserting new causes of action when allowing them would undermine the effect of the prior judgment and prejudice the opposing party.
- A prevailing party in a declaratory-judgment action may recover attorney’s fees that the court finds equitable and just, including by summary judgment when the record supports entitlement and amount.

## Conclusion

The court enforced the contract’s “as is” risk allocation to bar mutual-mistake rescission over a concealed basement condition, upheld the trial court’s management of summary-judgment evidence and late pleadings, and affirmed a declaratory-judgment attorney-fee award to the sellers.


Cherry v. McCall, 138 S.W.3d 35 (Tex. App.—San Antonio 2004, pet. denied)