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Rima Group, Inc. v. Janowitz

Court of Appeals of Texas, Fourteenth District

April 23, 2019

RIMA GROUP, INC., Appellant
v.
DAVID H. JANOWITZ AND CYNTHIA EDMISTON, AS TRUSTEES OF THE JANOWITZ EDMISTON FAMILY LIVING TRUST, Appellees

          On Appeal from the 80th District Court, Harris County, Texas, Trial Court Cause No. 2017-00370

          Panel consists of Chief Justice Frost and Justices Christopher and Bourliot.

          OPINION

          KEM THOMPSON FROST, CHIEF JUSTICE

         This appeal arises out of contracts for the sale of real property. The buyer appeals the trial court's grant of the seller's summary-judgment motion as to the buyer's claims for specific performance of the contracts. The buyer challenges the trial court's ruling that as a matter of law the seller properly terminated the contracts. Concluding that a genuine fact issue as to waiver precluded summary judgment in the seller's favor, we reverse and remand.

         I. Factual and Procedural Background

         Amir Bajmanlou, on behalf of appellant Rima Group, Inc., as buyer, and appellees David H. Janowitz and Cynthia Edmiston, as trustees of the Janowitz Edmiston Family Living Trust (the "Trust"), [1] as seller, executed two contracts for the sale of real property in Harris County, Texas. Each contract contained a "Seller Financing Addendum," under which Rima agreed to deliver a credit report to the Trust within five days after December 9, 2016 (the "Effective Date"), the effective date of each contract. Rima did not deliver a credit report to the Trust on or before December 14, 2016.[2]

         Under each contract, the parties agreed that if Rima did not provide the credit report within the specified time, the Trust could terminate the contract by notice to Rima within seven days after the expiration of the time for delivery of the credit report. In this litigation, the parties agree that time for delivery of the credit report expired on December 14, 2016 (the "Credit Report Deadline"), and that if the Trust chose to terminate the contract based on Rima's failure to deliver a credit report timely, the Trust had to give notice of termination on or before December 21, 2016 (the "Termination Deadline").

         On the Termination Deadline, the Trust gave notice to Rima that the Trust was terminating each contract based solely on Rima's failure to deliver a credit report.

         Two weeks later, Rima filed this suit against the Trust[3] seeking specific performance of each contract as well as reasonable attorney's fees. The Trust filed an answer and a counterclaim against Rima. The Trust asserted claims for breach of each contract and sought a declaratory judgment that the Trust properly terminated each contract and is entitled to the earnest money. The Trust also sought to recover reasonable and necessary attorney's fees.

         Five days after answering Rima's petition, the Trust filed a traditional motion for summary judgment and submitted the following proof: (1) an affidavit of Cynthia Edmiston, (2) authenticated copies of each contract, (3) the notice of termination and a related email; and (4) an attorney's-fees affidavit from the Trust's attorney. In the motion, the Trust asserted that (1) the Trust properly terminated each contract based on Rima's failure to deliver a credit report; (2) Rima breached each contract by not delivering a credit report; (3) the lis pendens that Rima filed on the real property at issue is wrongful because Rima cannot obtain specific performance of contracts that Rima breached; (4) Rima is not entitled to specific performance; (5) under each contract, the Trust is entitled to the earnest money; (6) the Trust is entitled to recover its reasonable and necessary attorney's fees; and (7) the Trust is entitled to declarations that the Trust properly terminated the contracts, the Trust gets the earnest money, and the Trust gets a release of the lis pendens.

         Rima responded in opposition providing the following summary-judgment proof: (1) an affidavit from Bajmanlou, (2) an affidavit from Rima's attorney; (3) several emails, and (4) the notice of termination. Rima asserted that a fact issue exists as to whether the Trust waived, or is estopped from requiring, compliance with the requirement that Rima deliver to the Trust a credit report by the Credit Report Deadline. Rima asserted that the Trust breached the contracts by purporting to terminate the contracts without a valid reason to do so. Rima asserted that there is a fact issue as to whether Rima is entitled to specific enforcement of the contracts. Rima also relied on its attorney's affidavit challenging two aspects of the Trust's proof regarding reasonable and necessary attorney's fees.

         At the Trust's request, the trial court dismissed without prejudice the Trust's claim to recover the earnest money.

         The trial court rendered a final judgment in which it granted the part of the Trust's motion that requested declaratory relief and attorney's fees. In the judgment, the trial court declared that the Trust properly terminated the contracts and that the "Lis Pendens filed by [Rima] is not valid and shall be released." The trial court also ordered Rima to pay the Trust reasonable and necessary attorney's fees for work in the trial court and also made contingent awards for attorney's fees on appeal. The trial court denied relief as to Rima's claims and as to the Trust's breach-of-contract claim.

         II. Issues and Analysis

         On appeal, Rima asserts in three issues that (1) the trial court erred in granting the Trust's summary-judgment motion due to fact issues as to waiver and estoppel; (2) the trial court erred in granting summary judgment because the Trust failed to present evidence that the Trust terminated each contract in good faith and there is evidence that the Trust failed to act in good faith in terminating the contracts; and (3) the trial court erred in granting the Trust's summary-judgment motion as to attorney's fees.

         As to a traditional motion for summary judgment, if the movant's motion and summary-judgment evidence facially establish its right to judgment as a matter of law, the burden shifts to the nonmovant to raise a genuine, material fact issue sufficient to defeat summary judgment. M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000). In our de novo review of a trial court's summary judgment, we consider all the evidence in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006). The evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions in light of all of the summary-judgment evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007).

         A. Does the summary-judgment evidence raise a genuine fact issue as to waiver?

         1. The Contracts' Unambiguous Language

         The relevant parts of each contract are the same. In each contract, the parties agreed that the contract contains the parties' entire agreement and that the "Seller Financing Addendum" is part of the contract. In each "Seller Financing Addendum," the parties agree in pertinent part as follows:

A. CREDIT DOCUMENTATION. To establish Buyer's creditworthiness, Buyer shall deliver to Seller within 5 days after the effective date of this contract, [√] credit report . . . . Buyer hereby authorizes any credit reporting agency to furnish copies of ...

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