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Stapel, LP v. Scott and White Memorial Hospital

Court of Appeals of Texas, Third District, Austin

January 3, 2018

Stapel, LP, Appellant
v.
Scott and White Memorial Hospital, Appellee

         FROM THE DISTRICT COURT OF WILLIAMSON COUNTY, 368TH JUDICIAL DISTRICT NO. 14-0303-C368, HONORABLE RICK J. KENNON, JUDGE PRESIDING

          Before Justices Puryear, Pemberton, and Goodwin

          MEMORANDUM OPINION

          DAVID PURYEAR, JUSTICE

         Appellant Stapel, LP sued appellee Scott and White Memorial Hospital, asserting that Scott and White had breached its lease with Stapel. Scott and White filed counterclaims for breach of the lease's maintenance obligations, constructive eviction, and breach of the implied warranty of suitability. Following a bench trial, the trial court determined that Stapel had breached the lease, violated the implied warranty of suitability, and constructively evicted Scott and White. The court signed a judgment awarding Scott and White $155, 000 in actual damages and $120, 000 in attorney's fees through trial with conditional attorney's fees in the event of post-trial motions and appeal. Stapel argues on appeal that the trial court should have granted its motion for a corrected and amended judgment in Stapel's favor and that the court erred in awarding Scott and White damages and attorney's fees. We reverse the judgment and remand to the trial court for further proceedings.

         Standard of Review

         We give a trial court's findings of fact the same weight as we do a jury's verdict and review them under the same standards applied to a jury verdict. Carson v. State, 117 S.W.3d 63, 66 (Tex. App.-Austin 2003, no pet.). In considering whether a finding is supported by legally sufficient evidence, we credit all evidence that supports the finding, if a reasonable factfinder could have done so, and disregard contrary evidence, unless a reasonable factfinder could not have done so. 4Front Engineered Sols., Inc. v. Rosales, 505 S.W.3d 905, 908 (Tex. 2016); Dallas Nat'l Ins. Co. v. De La Cruz, 470 S.W.3d 56, 58 (Tex. 2015) (quoting Graham Cent. Station, Inc. v. Pena, 442 S.W.3d 261, 263 (Tex. 2014)). We will sustain a legal-sufficiency challenge only if the evidence that supports the finding amounts to no more than a scintilla. Rosales, 505 S.W.3d at 909. In reviewing for factual sufficiency, we consider and weigh all of the relevant evidence and set aside a finding only if the credible supporting evidence is so weak or so contrary to the overwhelming weight of all the evidence as to be manifestly unjust. See Crosstex N. Tex. Pipeline, L.P. v. Gardiner, 505 S.W.3d 580, 615 (Tex. 2016). Although we defer to a trial court's determinations of historical facts, we do not defer to the trial court's determination of what the law is or its application of the law to the facts. Tenaska Energy, Inc. v. Ponderosa Pine Energy, LLC, 437 S.W.3d 518, 523 (Tex. 2014); Gulf Chem. & Metallurgical Corp. v. Hegar, 460 S.W.3d 743, 747-48 (Tex. App.-Austin 2015, no pet.). When a trial court makes findings of fact on some elements supporting its judgment but omits findings of other elements, we will presume the court made omitted findings in support of its judgment if they are supported by the evidence. Buxani v. Nussbaum, 940 S.W.2d 350, 352 (Tex. App.-San Antonio 1997, no writ); Teague v. Bandy, 793 S.W.2d 50, 57 (Tex. App.-Austin 1990, writ denied); see also Tex. R. Civ. P. 299 (explaining when reviewing court may imply omitted element of claim supporting judgment); Davey v. Shaw, 225 S.W.3d 843, 857 (Tex. App.-Dallas 2007, no pet.) (appellate court will not presume finding that was requested and refused).

         "Absent ambiguity, contracts are construed as a matter of law." Plains Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296, 305 (Tex. 2015). "An unambiguous document will be enforced as written, " In re Davenport, 522 S.W.3d 452, 457 (Tex. 2017) (orig. proceeding), and when a contract is unambiguous, our task on appeal is to determine the parties' intentions as expressed in the contract, taking a "holistic" approach and considering the entire contract "'in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless, '" Apache Deepwater, LLC v. McDaniel Partners, Ltd., 485 S.W.3d 900, 906 (Tex. 2016) (quoting J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003)). "No single provision taken alone is controlling, but rather all provisions are 'considered with reference to the whole instrument.'" Id. (quoting Webster, 128 S.W.3d at 229). "We also give words their plain, common, or generally accepted meaning unless the contract shows that the parties used words in a technical or different sense." Plains Expl. & Prod., 473 S.W.3d at 305. "A contract's plain language controls, not 'what one side or the other alleges they intended to say but did not.'" Great Am. Ins. Co. v. Primo, 512 S.W.3d 890, 893 (Tex. 2017) (quoting Gilbert Tex. Const., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 127 (Tex. 2010)).

         Factual and Procedural Summary

         The evidence presented at trial shows that in late 2006, Scott and White leased space in a shopping center owned by Stapel for the purpose of "[o]ffices for health care professionals or businesses" for a term of three years and three months, with rent of almost $4, 000 a month. Scott and White agreed to maintain the property "in a first-class condition, " to keep in good repair its leased premises, and to "make all other repairs . . . made necessary by Tenant's failure to comply with its obligations" to keep the property in good repair. Stapel was responsible for maintaining and operating the common areas and "the Property[, ] to include land and building, parking areas and all exterior building components." Stapel was not required "to make any improvements, replacements or repairs of any kind of character" to the leased premises except for maintaining and repairing the roof, foundation, parking and common areas, and "the structural soundness of the exterior walls, " and Stapel's costs in maintaining those areas were "subject to the additional rent provisions of this Lease." Pest control was mentioned only once, in the provision governing "Common Area Costs" passed along to Scott and White and the other tenants, which defined those costs as "all expenses of Landlord with respect to the maintenance, servicing, repairing and operation of the Property, land and all building components, including but not limited to" costs of repair and maintenance, utilities, security, janitorial and trash services, "landscaping and pest control." Elsewhere in the contract, in the provision governing "Utilities and Service, " Stapel agreed to provide the facilities necessary for utilities and to "provide routine maintenance, painting, and electrical lighting service for all Common Areas and special service areas of the Property in the manner and to the extent deemed by Landlord to be standard." Stapel could also, "in its sole discretion, provide[] additional services not enumerated herein, " and "[f]ailure by Landlord to any extent to provide any services of Landlord specified herein or any other services not specified . . . shall not render Landlord liable in any respect for damages to either person or property, be construed as an eviction of Tenant, warrant an abatement of rent or relieve Tenant from fulfillment of any covenant in this Lease."

         In the case of a default by Stapel, the contract provided that Scott and White's "recourse against [Stapel] for monetary damages will be limited to [Scott and White's] interest in the Lease premises." The contract further provided that "[t]he captions appearing in this Lease are for convenience only and in no way define, limit, construe or describe the scope or intent of any Section" and that "[e]ach covenant and agreement contained in this Lease shall be construed to be a separate and independent covenant and agreement, and the breach of any such covenant or agreement by Landlord shall not discharge or relieve Tenant from Tenant's obligation to perform each and every covenant and agreement of this lease to be performed by Tenant."

         In the two clauses that are central to our analysis, the parties agreed as follows:

12.14 Limitation of Warranties. LANDLORD AND TENANT EXPRESSLY AGREE THAT THERE ARE AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY, SUITABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, AND THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN THIS LEASE, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, TENANT EXPRESSLY ACKNOWLEDGES THAT LANDLORD HAS MADE NO WARRANTIES OR REPRESENTATIONS CONCERNING ANY HAZARDOUS SUBSTANCES OR OTHER ENVIRONMENTAL MATTERS AFFECTING ANY PART OF THE PROPERTY, AND LANDLORD HEREBY EXPRESSLY DISCLAIMS AND TENANT WAIVES ANY EXPRESS OR IMPLIED WARRANTIES WITH RESPECT TO ANY SUCH MATTERS.
12.15Waiver And Releases. TENANT SHALL NOT HAVE THE RIGHT TO WITHHOLD OR TO OFFSET RENT OR TO TERMINATE THIS LEASE EXCEPT AS EXPRESSLY PROVIDED HEREIN. TENANT WAIVES AND RELEASES ANY AND ALL STATUTORY LIENS AND OFFSET RIGHTS.

         In 2010, Scott and White wanted to expand, so it and Stapel signed two amendments that governed the expansion, extending the lease into 2015 and providing for a rent increase to more than $10, 000 a month.[1] Paragraph 11 of the first amendment stated that:

Landlord, to the best of its knowledge, warrants and represents that the shell, building, and common areas including landscaping are delivered to Tenant in compliance with all laws, rules, regulations and ordinances, including all environmental laws and including the American[s] with Disabilities Act of 1990, (ADA) and shall be responsible thereafter for any legal requirements pursuant to these laws, rules, regulations or ordinances applicable to the shell building or common areas. Tenant and its ...

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