Court of Appeals of Texas, Eighth District, El Paso
from the County Court at Law Number Five of El Paso County,
Texas (TC# 2014-CCV00803)
McClure, C.J., Rodriguez, and Hughes, JJ. Hughes, J., not
CRAWFORD McCLURE, Chief Justice
Andrew Whatley and Virginia Graf Whatley sought relief
against Rosalie Graf Schneider pursuant to Texas Property
Code Section 92.109, which permits recovery from a landlord
who in bad faith retains a security deposit. Schneider
counterclaimed for breach of contract. Tex.Prop.Code Ann.
§ 92.109(a) (West 2014). After a bench trial, and as
authorized by Section 92.109, the trial court entered
judgment against Schneider, holding her liable for the sum of
$100 plus three times $1, 990, the balance of the wrongfully
withheld security deposit balance, and awarded the Whatleys
reasonable attorneys' fees of $3, 000. Tex.Prop.Code Ann.
§ 92.109(a) (West 2014).
single issue, Schneider contends the evidence is legally
insufficient to support a finding that she acted in bad faith
as required under Section 92.109(a). Tex.Prop.Code Ann.
§ 92.109(a) (West 2014). For the following reasons, we
Lease, Security Deposit, and Landlord's Notice of
2012, the Whatleys leased Schneider's El Paso house while
she lived out of state. They paid a security deposit of $2,
650, and on April 19, 2013, gave written notice of their
intention to move on June 30, 2013. Schneider had a new
tenant move in on July 1, 2013.
the Whatleys moved, Schneider sent written notice dated July
10, 2013, which included a list of repairs for which she had
obtained estimates. The list included removal of stapled
cables on the floor, door, molding and walls of the house;
preparation and painting of walls and alcoves through the
house; "touch up" of walls throughout the house;
removal of towel bars in the bathrooms and window blinds in
the office; patching and painting; removal of shelves from
garage walls; repair of a garage wall; removal of a satellite
dish; repair of roof damage; and the repair of
"elastomeric paint from speaker area." Schneider
included estimates totaling $3, 142.56, and after deducting
the security deposit of $2, 650, she informed the Whatleys
they owed her $492.56.
Whatleys' attorney notified Schneider that with her
knowledge, they had made improvements to the home at their
own expense as permitted by the terms of the lease. The
letter also noted that as late as April 2013, Schneider had
expressed her gratitude and appreciation for the Whatleys
"taking such good care" of the home. The Whatleys
suggested that the reasonable cost of reimbursement for
repairs would be approximately $300 to $400. Pursuant to
Sections 92.102 and 92.103 of the Property Code, the Whatleys
demanded that Schneider refund their security deposit less
itemized repair charges on or before thirty days of the date
on which the Whatleys had surrendered the property and gave
Schneider a forwarding address supported by receipts for the
repair work performed. See Tex.Prop.Code Ann.
§§ 92.102, 92.103 (West 2014).
December 2013, the case proceeded to trial in the justice
court, and concluded with a judgment entered against
Schneider. Schneider appealed, and the case proceeded to a
de novo bench trial in county court in August 2014.
Tex.R.Civ.P. 506.3. The trial court heard evidence from seven
witnesses. Charles acknowledged that the terms of the lease
permitted deductions of reasonable charges from the security
deposit for restoration of walls, flooring, landscaping or
any alterations not approved in writing by the landlord, and
agreed that Schneider had not approved changes in writing but
noted that she had thanked them in writing. The Whatleys
claimed they had made changes to the house with
Schneider's permission, which was expressed to them
either verbally or by email. They had subsequently recapped
with Schneider the modifications that had been made.
admitted that the Whatleys would inform her of the work
performed but noted that they would present it "like it
was a good thing[.]" Schneider felt that she could not
change completed additions. After the Whatleys vacated the
home, Schneider preferred that the house be returned to its
original state. She secured estimates which formed the basis
of her retention and demand letter to the Whatleys. With the
exception of the bathroom towel bars that the Whatleys had
installed and the cleaning of the garage "carpet, "
Schneider alleged that all repair work in the house had been
performed but the security deposit was insufficient to cover
the actual cost of repairs in the sum of $3, 065, which she
believed to be reasonable.
acknowledged that under the terms of the lease, he and
Virginia were prohibited from removing any fixtures they
installed at the house because the lease provided that all
fixtures would become the property of the landlord. He
described the relationship with Schneider as friendly until