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Desio v. Del Bosque

Court of Appeals of Texas, Fifth District, Dallas

December 20, 2019


          On Appeal from the 14th Judicial District Court Dallas County, Texas Trial Court Cause No. DC-17-04408

          Before Justices Schenck, Molberg, and Reichek



         This case involves competing claims in a commercial lease dispute. Following a bench trial, the trial court found Christine Flores Desio d/b/a Professional Center of Grand Prairie and Francis Anthony Desio, Jr. a/k/a Frank Desio Jr., breached several leases but awarded no damages to the tenant, appellee Mike Del Bosque d/b/a Injury and Rehab Center in Grand Prairie. The trial court did, however, award attorney's fees to appellee.

         On appeal, appellants challenge the trial court's determination that they, rather than appellee, breached the leases, as well as the award of attorney's fees. For reasons set out below, we affirm the trial court's judgment that appellants breached the leases but reverse the award of attorney's fees and remand for the trial court to recalculate the amount of such fees.

         Factual Background

         Christine Flores Desio owns the Professional Center of Grand Prairie; her son, Frank, manages the property. Appellants entered into multiple leases with appellee. One lease was for property on the first floor and ended in 2018(the "First-Floor Lease"). Three leases were for second-floor suites (the "Second-Floor Leases") and ended in 2019.

         This appeal primarily deals with the Second-Floor Leases, where appellee operated medical labs and "administrative and other related business." Under these leases, appellee defaulted if he abandoned the premises. Abandonment was defined as "[f]ailure of Tenant for five (5) days or more to occupy the Premises for one or more of the purposes permitted under this lease, unless such failure is excused under other provisions of this Lease."

On Monday, November 28, 2016, appellee sent appellants the following email:
Good morning, Frank….
Hope your mother & yourself had a wonderful Thanksgiving….I want to inform you that my lease space upstairs was moved out over the holiday….I am NOT breaking the lease but I would to [sic] offer you to let the lease dissolve so that you could rent it out for more than what I am paying…Everything is shut down and completely turned off…I do have several items that I need to get out this week…Also, there are 3 refrigerators in the walk way that will be removed today….Thank yoy [sic]…

         The following day, appellants excluded appellee from the second-floor premises, changed the locks, and thereafter disposed of the property left on the premises. No notice was given before appellants locked appellee out.

         Four months later, appellants locked appellee out of his first-floor suite for failure to pay rent. Appellee obtained a writ of reentry into the premises and resumed operations. Nine days later, however, appellee was locked out again.

         Following the second lockout of the first-floor suite, appellee filed this lawsuit against appellants, alleging breach of contract, interference with existing contract, interference with prospective contracts, trespass, and conversion. Appellee sought damages and attorney's fees. Appellants filed an answer in which they raised the affirmative defense of failure to mitigate damages and also counterclaimed for breach of contract. Appellants alleged that appellee defaulted on all of the leases by (1) abandoning the second-floor premises and failing to pay rent and (2) damaging and failing to maintain the first-floor premises. They sought to recover unpaid lease payments, late fees, returned check charges, and unpaid prorated utilities and taxes, repair costs for damages to both the first- and second-floor premises, and mitigation expenses. In addition, they sought recovery of their attorneys' fees.

         The case was tried without a jury to the court. Frank Desio testified that he did not know how many days appellee spent moving out of the second-floor premises but said he "recognized" activities prior to Thanksgiving that "suggested" appellee abandoned the property. In particular, he said he saw appellee's brother moving an executive chair from the premises on the day before Thanksgiving Day. After the staff had left for the day, he said he went upstairs and saw that there "was no equipment, no furniture, nothing to indicate that there was an active business."

         Nevertheless, Frank also acknowledged that on the following Monday, November 28, he observed appellee moving belongings from the second-floor suites. On that same morning, he received appellee's email about moving out. After receiving the email, Frank contacted counsel, who advised him to "watch and see, touch nothing, do nothing," and to "wait a minimum of seven to ten days" to act. The next day, both appellee and Frank called the Grand Prairie police when appellee returned but was excluded from the premises.[1] By the following day, the locks on the suite doors had been changed. Subsequently, Frank called the scrapyard to retrieve appellee's property. Frank acknowledged that at the time of the lockout, appellee had paid rent for both November and December and had offered to continue to pay rent for the premises. Frank acknowledged that he did not give appellee notice before locking him out of the premises, but two months after the lockout, appellants gave appellee notice of default for failure to pay rent in January.

         Appellee testified that he was in the process of moving on Monday, November 28, and, in contrast to Frank's testimony, said he left behind a copier, office furniture, and office supplies but had moved the lab equipment by that date. He said he did not intend to abandon the second-floor leases; rather, as his business grew, he planned to use them for physician offices and storage space, uses he believed were consistent with the terms of the leases. At trial, he testified he told Frank he wanted to continue to use the space, although he acknowledged that he testified to the contrary at his deposition.

         Appellee said he never had access to the premises once the locks on the doors were changed. He also said he told Frank that he would pick up the refrigerators, which were left in the breezeway area, within 24 hours, and Frank told him he had "three days." Nevertheless, appellee said the refrigerators were "gone" on the second day. He did not know what happened to the copy machine, office furniture, and office supplies left inside the suites. He valued the copier at $2000, the refrigerator at "a couple of hundred dollars each," and the office furniture and supplies at $200 to $300.

         At the conclusion of the evidence and after hearing argument, the trial court made oral findings that appellee abandoned the lease but was entitled to twenty days' notice under the leases, which he did not receive. Further, the court found that appellee was the "prevailing party predominantly" and announced its intent to award attorney's fees. The court directed appellee to provide appellants with his attorney's fee information, so that appellants could make any objections.

         Subsequently, the trial court rendered judgment in which it found in favor of appellee on (1) on appellee's claims for breach of contract, interference with existing contract, interference with prospective contracts, trespass to real property, and conversion; (2) appellants' claim for breach of contract; (3) appellants' affirmative defense of failure to mitigate damages; and (4) appellees' affirmative defense of prior material breach. Appellee elected to recover on his breach of contract claim. The trial court awarded appellee zero damages, but ordered that he recover $75, 033 ...

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