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LP v. JAC Entertainment

Court of Appeals of Texas, Third District, Austin

October 1, 2019

WC 4th and Colorado, LP and WC 4th and Colorado GP, LLC, Appellants
v.
JAC Entertainment, Appellee

          FROM THE COUNTY COURT AT LAW NO. 2 OF TRAVIS COUNTY NO. C-1-CV-15-009352, THE HONORABLE ERIC SHEPPERD, JUDGE PRESIDING

          Before Justices Goodwin, Baker, and Kelly

          MEMORANDUM OPINION

          THOMAS J. BAKER, JUSTICE.

         In this commercial landlord-tenant dispute, the tenant, JAC Entertainment (JAC), prevailed on its claims for breach of contract, declaratory judgment, damages, and attorney's fees. The landlords, WC 4th and Colorado, LP and WC 4th and Colorado GP, LLC (collectively, WC), complain on appeal that the evidence was legally insufficient to support the trial court's award of damages and that, therefore, JAC was not entitled to attorney's fees because it was not a prevailing party. We will affirm the judgment.

         BACKGROUND[1]

         JAC and WC have operated under a commercial lease regarding certain premises in downtown Austin for several years. The original lease is a five-year term with JAC having the option to renew the lease twice. In addition to monthly base rent of $15,000, the lease requires JAC to pay monthly its pro rata share of "CAM Charges," defined as "the reasonable cost of ownership, operation, and maintenance of the Common Areas." The lease defines "Common Areas" as "all facilities and areas of the Building that are intended and designated by Landlord from time to time for the common, general, and nonexclusive use of all tenants of the Building, including parking lots." The lease sets the initial monthly CAM Charge at $0.

         During the lease's first term, WC began charging JAC CAM Charges in the monthly amount of $976.53. A dispute arose between the parties when WC increased the CAM Charges to $1,605 per month. In response to JAC's request for documentation supporting the charges, WC furnished JAC with ledgers. After inspection, JAC refused to pay any further CAM Charges, alleging that they were unauthorized by the lease because they constituted JAC's prorated share of WC's total general, administrative, and operating expenses for the entire premises rather than just the common areas. When the parties were unable to resolve their dispute, JAC filed this lawsuit, making claims for breach of contract, declaratory judgment, and fraud and seeking damages and attorney's fees. WC answered and filed counterclaims for breach of contract and declaratory judgment.

         WC filed no-evidence and traditional motions for summary judgment, arguing that JAC had no evidence to support any of its claims, JAC's fraud claim fails as a matter of law, JAC cannot recover attorney's fees against a limited liability company as a matter of law, WC was entitled to judgment that it had not breached the lease by collecting CAM Charges, and JAC was in breach by failing to make further CAM Charges payments. Shortly thereafter, JAC filed a motion for summary judgment in which it sought various declarations, including (1) it is not liable for "CAM Charges" that include costs associated with areas of the premises that are not "Common Areas" as defined in the lease and (2) WC is in breach of the lease by collecting and attempting to collect expenses associated with the entire building as "CAM Charges." JAC attached evidence to its motion, including: affidavits, deposition excerpts, copies of the lease and amendments thereto, and ledgers depicting WC's calculation of CAM Charges. JAC's motion contended that WC had "billed operating expenses for the entire building as 'CAM Charges.'"

         After a hearing, the trial court signed an order granting JAC partial summary judgment, denying WC's motion for summary judgment, and ordering-"pursuant to the Declaratory Judgments Act"-that

1. Under the terms of the Lease, Plaintiff may be assessed "CAM Charges" which only include reasonable cost of ownership, operation and maintenance of areas designated for the common, general, and nonexclusive use of all tenants of the Building (Common Areas). Plaintiff may not be charged for costs of ownership, operation and maintenance of areas which are not Common Areas as defined in the Lease, and which specifically does not apply to repairs to roof or foundation or to utilities.
2. Defendant's conduct collecting and attempting to collect expenses associated with the entire building as "CAM Charges" constitute breaches of the Lease.
3. The court overrules Defendants' objections and special exceptions to the affidavits and summary judgment evidence.
4. Plaintiff's claims for damages, attorney's fees and fraud are postponed until an evidentiary hearing is held to determine damages, attorney's fees and fraud.

         Having adjudged liability, the trial court later conducted an evidentiary hearing on the remaining issues of damages and attorney's fees. The trial court's final judgment awarded JAC $15,404.81 in damages on its breach-of-contract claim and $73,160.00 in attorney's fees. It also ordered that WC take nothing on its counterclaims and that JAC take nothing on its fraud claim.[2] WC appeals the final judgment's award of damages and attorney's fees but does not challenge the trial court's liability determination in its partial summary judgment that WC breached the lease by collecting or ...


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