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Schneider v. Whatley

Court of Appeals of Texas, Eighth District, El Paso

November 29, 2017


         Appeal from the County Court at Law Number Five of El Paso County, Texas (TC# 2014-CCV00803)

          Before McClure, C.J., Rodriguez, and Hughes, JJ. Hughes, J., not participating


          ANN CRAWFORD McCLURE, Chief Justice

         Charles 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).

         In a 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 affirm.


         The Lease, Security Deposit, and Landlord's Notice of Retention

         In June 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.

         After 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.

         The 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).

         Trial De Novo

         In 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.

         Schneider 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.

         Charles 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 ...

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