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Ho & Huang Properties, L.P. v. Parkway Dental Associates, P.A.

Court of Appeals of Texas, Fourteenth District

May 24, 2017

HO & HUANG PROPERTIES, L.P. AND SW PARKWAY MANAGEMENT, INC., Appellants
v.
PARKWAY DENTAL ASSOCIATES, P.A., POORANG PAHLAVAN, H. TRAM NGUYEN, AND SHANNON PRESLEY, Appellees

         On Appeal from the 80th District Court Harris County, Texas Trial Court Cause No. 2007-69193

          Panel consists of Chief Justice Frost and Justices McCally and Brown. [11]

          OPINION

          KEM THOMPSON FROST, CHIEF JUSTICE

         This appeal - the second in this case - arises out of a landlord-tenant dispute under a commercial lease. The tenant sued the landlord and its management company, asserting breach of the lease. On remand following the first appeal, the trial court rendered judgment on the jury's verdict, awarding the tenant actual damages and attorney's fees. In this appeal, the landlord challenges the sufficiency of the evidence to support several jury findings and asserts that one jury finding mandated rendition of judgment in the landlord's favor. The landlord also asserts that the tenant failed to provide written notice of the landlord's alleged breach, the trial court reversibly erred in rejecting two jury-charge complaints, and the trial court erred in calculating prejudgment interest. We affirm.

         I. Factual and Procedural Background

         Appellee/plaintiff Parkway Dental Associates, P.A. as tenant, and appellant/defendant SW Parkway Management, Inc., as agent for appellant/defendant Ho & Huang Properties, L.P., as landlord, executed a commercial lease (the "Parkway Lease") in January 2004, for property located in a shopping center. Appellees/third-party defendants Poorang Pahlavan, H. Tram Nguyen, and Shannon Presley (collectively the "Guarantors"), officers of Parkway Dental, guarantied Parkway Dental's obligations under the Parkway Lease.

         Competitive-Business Restriction under the Lease

         Parkway Dental used the leased premises for the practice of general dentistry. The Parkway Lease included an "Addendum Regarding Restrictions on Use of Project by Other Tenants, " which provided that, "[u]less a Default of this Lease has occurred and remains uncured upon the expiration of any grace or notice periods, Landlord covenants and agrees that Landlord shall not permit any portion of the Project to be used for a Competitive Business." Under this provision (the "Covenant"), the parties defined "Competitive Business" as "Businesses practic[ing] . . . [g]eneral dentistry." As used in this provision, "Project" included the complex in which the leased premises were located, any of the common areas, as well as the shopping-center parking areas.

         The Lease-Extension Option

         The term of the Parkway Lease began on April 1, 2004, and ended on March 31, 2009 (the "Lease Term."). Provided that Parkway Dental was not in default, the Parkway Lease gave Parkway Dental the option to extend the term of the Parkway Lease for an additional five years (the "Extension Option").

         Aquarium Dental's Lease of Property in the Shopping Center

         Parkway Dental occupied the leased premises and paid rent under the Parkway Lease to the landlord throughout the Lease Term. Midway through the Lease Term, in June 2006, Ho & Huang Properties, L.P. sold a portion of the shopping-center parking lot to a third party without requiring that the purchaser agree to a restriction that was the same as or similar to the Covenant. The purchaser later sold the portion of the parking lot to another party who had a building constructed and entered into a lease agreement with Dr. Tuan Thanh Pham d/b/a Aquarium Dental ("Aquarium Dental"). The following year, Aquarium Dental posted a sign on the newly constructed space stating that Aquarium Dental would be opening soon.

         Parkway Dental's Suit for Injunctive and Monetary Relief

         Parkway Dental filed suit in November 2007, seeking injunctive and monetary relief against Ho & Huang Properties, L.P. and Aquarium Dental as well as SW Parkway Management, Inc. (the "Management Company"). The trial court granted no injunctive relief in Parkway Dental's favor. Parkway Dental later nonsuited its claims against Aquarium Dental but continued to pursue its claims against Ho & Huang Properties, L.P. and the Management Company (collectively, the "Landlord Parties").

         Expiration of the Parkway Lease

         Parkway Dental decided not to exercise the Extension Option, and on March 31, 2009, the Parkway Lease terminated by its own terms. Parkway Dental then closed the dental practice that it had been operating on the leased premises.

         The Trial Court's Judgment

         Pursuing the lawsuit, Parkway Dental asserted various claims against the Landlord Parties, including breach of the Parkway Lease and anticipatory repudiation. The trial court granted summary judgment in favor of the Landlord Parties as to all of Parkway Dental's claims. Based upon the dismissal of Parkway Dental's claims, the trial court concluded that the Landlord Parties were "prevailing parties" under a Parkway Lease provision allowing a prevailing party to recover its reasonable attorney's fees and litigation costs. The parties tried to a jury the issue of reasonable fees for the services of the Landlord Parties' attorneys as well the amount of the Landlord Parties' out-of-pocket litigation costs. The trial court rendered a final judgment in favor of the Landlord Parties and against Parkway Dental for the amounts the jury found.

         The First Appeal

         On Parkway Dental's appeal, this court reached the following conclusions:

(1) The summary-judgment evidence raised a genuine issue of fact as to whether there was a competing business engaged in the practice of general dentistry on the Project before the Parkway Lease expired.
(2) A genuine fact issue existed as to whether the Landlord Parties breached the Parkway Lease because, under the unambiguous language of the Parkway Lease, the conveyance of part of the Project does not absolve the Landlord Parties of liability if the Covenant is breached based on the use of that part of the Project for a business involving the practice of general dentistry during the term of the Parkway Lease.
(3) A genuine fact issue existed as to Parkway Dental's damages under a reliance measure of damages, whose purpose is to put the injured party in as good an economic position as it would have occupied had the contract not been made.
(4) The summary-judgment evidence raised a genuine fact issue as to whether Parkway Dental suffered any harm or damages resulting from a material breach by the Landlord Parties of any of the landlord's obligations under the Parkway Lease.

See Parkway Dental Assocs., P.A. v. Ho & Huang Properties, L.P., 391 S.W.3d 596, 602-10 (Tex. App.-Houston [14th Dist.] 2012, no pet.). We reversed the trial court's summary judgment as to Parkway Dental's claims for breach of the Parkway Lease and anticipatory repudiation and remanded these claims and the parties' requests for attorney's fees to the trial court for further proceedings. See id. at 612. We affirmed the trial court's summary judgment as to all of Parkway Dental's other claims. See id.

         Trial on Remand Following the First Appeal

         Following remand, the parties tried the remaining claims, and the jury answered the questions submitted to it as follows:

(1) The Landlord Parties failed to comply with the Covenant;
(2) The failure to comply was not excused;
(3) There was an event of Default by Parkway Dental under the Parkway Lease "before March 31, 2009 that had occurred and remained uncured."
(4) The event of Default was excused.
(5) The sum of $11, 500, if paid now in cash, would fairly and reasonably compensate Parkway Dental for its damages that resulted from the Landlord Parties' failure to comply.

         The jury also found amounts for the reasonable fees for the necessary services of Parkway Dental's attorneys and the Landlord Parties' attorneys. The Landlord Parties moved the trial court to disregard various jury findings, arguing, among other things, the legal insufficiency of the evidence to support these findings. The trial court rendered judgment on the jury's verdict, implicitly rejecting the Landlord Parties' legal-sufficiency challenges. In its judgment, the trial court ordered that Parkway Dental recover from the Landlord Parties Parkway Dental's contract damages, trial and appellate attorney's fees, prejudgment and postjudgment interest, and court costs. The trial court rendered judgment that the Landlord Parties take nothing on the Landlord Parties' claims against Parkway Dental and the Guarantors. The Landlord Parties now challenge the judgment rendered on the jury's verdict in the second trial.

         II. Issues Presented

         In this appeal, the Landlord Parties present seven issues, asserting the following:

(1) The jury's event-of-default finding in its answer to Question 3 entitled the Landlord Parties to judgment in their favor, and no evidence supports the jury's answer to Question 4 (asking whether Parkway Dental's default was excused);
(2) The trial court erred in failing to disregard the jury's damage finding in response to Question 5 as unsupported by legally sufficient evidence;
(3) The trial court erred in failing to disregard the jury's finding in response to Question 1 (the failure-to-comply-with-Covenant question) as unsupported by legally sufficient evidence or in failing to grant a new trial because the evidence is factually insufficient to support this finding;
(4) As a matter of law, Parkway Dental failed to give the Landlord Parties notice and opportunity to cure under Section 27 of the Parkway Lease, which they alleged is a condition precedent to Parkway Dental's ability to prosecute the lawsuit;
(5) The trial court reversibly erred in rejecting two jury-charge complaints;
(6) The trial court erred in failing to disregard the jury's findings in response to Question 6 (Parkway Dental's reasonable and necessary fees) as unsupported by legally sufficient evidence; and
(7) The trial court erred in calculating prejudgment interest.

         III. Legal-Sufficiency and Factual-Sufficiency Standards of Review

         When reviewing the legal sufficiency of the evidence, we consider the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005). We must credit favorable evidence if a reasonable factfinder could and disregard contrary evidence unless a reasonable factfinder could not. See id. at 827. We must determine whether the evidence at trial would enable reasonable and fair-minded people to find the facts at issue. See id. The factfinder is the only judge of witness credibility and the weight to give to testimony. See id. at 819.

         When reviewing a challenge to the factual sufficiency of the evidence, we examine the entire record, considering both the evidence in favor of, and contrary to, the challenged finding. Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex. 1998). After considering and weighing all the evidence, we set aside the fact finding only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. Id. The trier of fact stands as the sole judge of the credibility of the witnesses and the weight to be given to their testimony. GTE Mobilnet of S. Tex. v. Pascouet, 61 S.W.3d 599, 615-16 (Tex. App.-Houston [14th Dist.] 2001, pet. denied). We may not substitute our own judgment for that of the trier of fact, even ...


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