Opinion
No. 05-19-01576-CV
04-07-2021
BILLY JOE HOLLINGSWORTH, II AND TAMMY HOLLINGSWORTH, D/B/A MILLION DOLLAR PAWN AND GUN, Appellants v. PARKLANE CORPORATION, Appellee
On Appeal from the 134th Judicial District Court Dallas County, Texas
Trial Court Cause No. DC-18-02073
MEMORANDUM OPINION
Before Justices Schenck, Smith, and Garcia
Opinion by Justice Garcia
This is a commercial lease dispute in which both parties claimed breach and fraud. After a jury trial on competing claims, the court entered judgment for the landlord Parklane Corporation ("Parklane") according to the verdict. In four issues, appellants Billy Joe Hollingsworth, II and Tammy Hollingsworth d/b/a Million Dollar Pawn and Gun (collectively, "Pawn") argue the judgment is erroneous because (i) the jury did not find that Pawn's breach was material, (ii) the jury found that Parklane's breach was not excused (which they assert supports immateriality of Pawn's breach), (iii) the jury's fraud findings do not support a fraud judgment for Parklane, and (iv) the evidence is factually insufficient to support an award to Parklane. Parklane raises four conditional cross-points.
We conclude that Pawn did not preserve its evidentiary sufficiency arguments, and because there were no objections to the court's charge or written findings, the materiality element is deemed found. Even if Pawn had preserved error, the jury's finding on Parklane's equitable estoppel defense was not related to the materiality of Pawn's breach. The court did not enter a judgment for fraud, which is consistent with the jury's findings. Because we overrule Pawn's issues, we need not address Parklane's cross-points and affirm the trial court's judgment.
I. BACKGROUND
In 2014, Parklane and Pawn entered a commercial lease (the "Lease") for Pawn's operation of a pawn shop on the leased premises (the "Premises"). The initial term was for five years, with $12,500 monthly rent payable on the first of the month without offset, deduction, or prior demand. For the remaining three years, $13,500 monthly rent was payable on the same terms.
The Lease required the parties to maintain their own insurance policies and also addressed damage or destruction to the premises in whole or in part due to windstorm, fire, tornado, or other casualty. If the premises could not be occupied, the rent payable during that time was to be "equitably adjusted," but the Lease does not include a formula for such adjustment.
In June 2016, Pawn requested a rent reduction, claiming that highway construction impacted its ability to pay rent. Parklane's owner verbally agreed to defer $5,500 in monthly rent payments, which was to be paid once construction was complete. Despite the concession, Pawn failed to pay rent, and by December 2016, owed Parklane $55,150.
A January 2017 storm damaged the roof of the Premises. A second storm caused additional damage in March. Although the casualties were insured, the parties disagreed about who would make the repairs and whether the completed repairs were timely. Parklane blamed the purported delay in repairs on alleged fraud by Pawn.
In February 2018, still in arrears on its rent obligations, Pawn sued Parklane for failing to make timely repairs and for fraud. Nonetheless, Pawn did not vacate the Premises or seek to terminate the Lease. Pawn ceased making rent payments altogether in April or May but continued to occupy the Premises until being locked out in August 2019.
Pawn's initial pleadings sought recovery under the DTPA and insurance code, but those claims were subsequently nonsuited.
Parklane answered Pawn's suit and asserted several affirmative defenses, including prior material breach and equitable estoppel. Parklane also counterclaimed for breach of the Lease and for fraud. Pawn did not answer the counterclaim or assert any affirmative defenses.
The case was tried to a jury. The evidence included Parklane's rent ledger showing $498,560 due for base rent and late fees and testimony about the ledger, and Pawn's evidence of storm-related damages and repairs.
The jury found that both parties breached the Lease but Pawn breached first. The jury also found that neither party committed fraud and Parklane's breach was not excused. The jury awarded damages to both parties: $114,097 to Pawn for "loss of full use of the leased premises" and $437,725 to Parklane for lost rent. The jury also awarded Parklane $93,750 for trial attorney's fees.
The trial court entered a take-nothing judgment on both parties' fraud claims and awarded damages and attorney's fees to Parklane in accordance with the jury's findings. Pawn filed a motion for reconsideration of the judgment and a motion for remittitur, which the trial court denied.
II. ANALYSIS
A. Material Breach
Pawn first argues that the judgment entered for Parklane on its breach of contract claim was erroneous because the court did not instruct the jury that Pawn's failure to comply under the lease must be material. However, neither party requested a jury question or instruction on material breach. Pawn admits this and to the fact that neither party objected to the form of the jury charge.
It is a fundamental principle of contract law that when one party to a contract commits a material breach of that contract, the other party is discharged or excused from further performance. Hernandez v. Gulf Group Lloyds, 875 S.W.2d 691, 692 (Tex. 1994). A material breach is conduct that deprives the injured party of the benefit that it reasonably could have anticipated from the breaching party's full performance. Id. at 693. When a party to a contract commits a material breach of the contract, the non-breaching party is excused from further performance. Bartush-Schnitzius Foods Co. v. Cimco Refrigeration, Inc., 518 S.W.3d 432, 436-37 (Tex. 2017) (per curiam) (quoting Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004)).
Jury Charge
Here, the charge included broad-form breach of contract questions and inquired as follows:
QUESTION NO. 1:
Did either or both of the following parties fail to comply, with the commercial lease agreement?
Answer "Yes" or "No" for each of the following:
a. Parklane YES
b. Million Dollar Pawn YES
If you answered "yes" to both Parklane and Million Dollar Pawn, answer the following Question. Otherwise, do not answer the following Question and proceed to Question No. 3.
QUESTION NO. 2:
Who first failed to comply with the commercial lease agreement between Parklane and Million Dollar Pawn?
Answer "Parklane" or "Million Dollar Pawn":
Answer: Million Dollar Pawn
If you answered "yes" for Parklane in response to Question No. 1, answer the following Question. Otherwise, do not answer the following Question and proceed to Question No. 4.
These questions tracked the Texas Pattern Jury Charges ("PJC") for competing breach of contract claims where materiality is not at issue. See State Bar of Texas, Texas Pattern Jury Charges: Business, Consumer, Insurance & Employment PJC 101.2 (2018). Although pattern jury charges are not law, they are "heavily relied upon by both bench and bar," H.E. Butt Grocery Co. v. Bilotto, 928 S.W.2d 197, 199 (Tex. App.—San Antonio 1996), aff'd 985 S.W.2d 22 (Tex. 1998) and the PJC informs our analysis here.
The PJC includes an additional instruction incorporating the Mustang Pipeline materiality factors that may accompany the breach of contract questions. PJC 101.2 cmt.; see also, Mustang Pipeline, 134 S.W.3d at 199. But, nothing in the record suggests that the materiality of Pawn's rental obligation was ever at issue. If the parties disputed the materiality of the breach, they could have requested that an instruction or question be included, or objected to its exclusion in the jury charge. Neither party requested such a question or instruction on material breach.
The materiality factors include: (a) the extent to which the injured party will be deprived of the benefit which he reasonably expected; (b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived; (c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture; (d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of the circumstances including any reasonable assurances; and (e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing. Id.
Rule 274 requires an objection to the charge. See TEX. R. CIV. P. 274. In addition, TEX. R. CIV. P 278 provides that "failure to submit a definition or instructions shall not be deemed a ground for reversal of the judgment unless a substantially correct definition or instruction has been requested in writing and tendered by the party complaining of the judgment."
When an element of a claim is omitted from the jury charge without objection and no written findings are made by the trial court on that element then the omitted element is deemed to have been found by the court in such a manner as to support the judgment. TEX. R. CIV. P. 279; Chon Tri v. J.T.T., 162 S.W.3d 552, 558 (Tex. 2005); In re J.F.C., 96 S.W.3d 256, 263 (Tex. 2002). Because neither party objected that the materiality element was omitted and the trial court did not make findings on that element, the materiality element is deemed found in support of the judgment. But just as with any other finding, there must be evidence to support a deemed finding. See Service Corp. Intern. v. Guerra, 348 S.W.3d 221, 229 (Tex. 2011); see also Hollingsworth v. Hollingsworth, 274 S.W.3d 811, 815 (Tex. App.—Dallas 2008, no pet.) (implied findings can be challenged for legal and factual sufficiency).
Sufficiency of the Evidence
We afford Pawn's appellate brief liberal construction as required by the rules, see TEX. R. APP. P. 38.1; see also Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989) (courts liberally construe points of error to "obtain a just, fair, and equitable adjudication of the rights or the litigants."). Under these circumstances, we construe Pawn's argument as a challenge to the sufficiency of the evidence to support the judgment.
The brief cites the standards of review for legal and factual sufficiency but offers no application of these standards to this case. Then, citing the Mustang Pipeline materiality factors, see Mustang Pipeline, 134 S.W.3d at 199, Pawn concludes that the factors do not apply and Parklane failed to submit evidence to support these factors. Later, in a single sentence, Pawn argues "[t]he evidence together with the testimony and the findings of the jury demonstrate no material breach occurred."
To preserve a challenge to the legal sufficiency of the evidence to support a jury's finding, the party must raise the specific complaint in the trial court either by: (1) a motion for directed verdict, (2) a motion for judgment notwithstanding the verdict (JNOV), (3) an objection to the submission of the jury question, (4) a motion to disregard the jury's finding on a vital fact issue, or (5) a motion for new trial. Cecil v. Smith, 804 S.W.2d 509, 510-11 (Tex. 1991); Maya Walnut, LLC v. Lopez-Rodriguez, No. 05-16-00750-CV, 2017 WL 1684679, at *4 (Tex. App.—Dallas May 3, 2017, no pet.) (mem. op.). To preserve a factual sufficiency challenge, the party must present the specific complaint to the trial court in a motion for new trial. TEX. R. CIV. P. 324(b)(2), (3); Cecil, 804 S.W.2d at 510; Maya Walnut, LLC, 2017 SL 1684679, at *4. Pawn took none of these actions.
Instead, Pawn filed a motion for remittitur and a motion to reconsider the judgment. A motion for remittitur and a motion for new trial are separate motions not to be treated interchangeably. See Airco, Inc. v. Tijerina, 603 S.W.2d 785, 786 (Tex. 1980). We therefore do not consider the remittitur motion in our preservation analysis.
The motion to reconsider the judgement, however, includes a single sentence that reads "Plaintiff's alternatively ask this Court to treat this Motion as a Motion for New Trial and/or to Modify, Correct, or Reform a Judgment pursuant to Rule 329b." (Emphasis added). Then, the motion argues that it is timely under Rule 329(b). The motion does not refer to rule 324, the rule governing motions for new trial See TEX. R. CIV. P. 324), but it urges that the evidence adduced at trial does not support the amount awarded to Parklane. Pawn claims there is contradictory evidence concerning the amount of rent Pawn owed and incorporates the motion for remittitur by reference. The prayer requests that the court modify the judgment and "lower the excessive damages," but does not seek a new trial.
Rule 329b references the timing of motions for new trial and motions to modify, correct, or reform a judgment. See TEX. R. CIV. P. 329(b).
Even if we considered the above sufficient to constitute a motion for new trial, it does not seek a new trial on the points raised on appeal. Stettner v. Lewis & Maese Auction, LLC, 611 S.W.3d 102, 107 (Tex. App.—Houston [14th Dist.] 2020, no pet.) (a motion for new trial preserves for appellate review only those complaints raised in the motion); see also In re Commitment of Lopez, 462 S.W.3d 106, 114 (Tex. App.—Beaumont 2015, pet. denied) ("An issue on appeal must comport with the objection made at trial; otherwise, the issue is not preserved for appellate review."); TEX. R. APP. P. 33.1(a). The motion does not reference or refer to materiality or argue that the evidence is legally insufficient to support a deemed finding. Similarly, the motion is not sufficiently specific to make the trial court aware of a factual sufficiency complaint. See EYM Diner L.P. v. Yousef, No. 05-19-00636-CV, 2020 WL 6883171, at *6 (Tex. App.—Dallas Nov. 24, 2020, no pet.) (mem. op.) (motion must state the factual sufficiency complaint with sufficient specificity to make the trial court aware of the complaint unless specific grounds were apparent from the context). Accordingly, Pawn did not preserve its challenge to the sufficiency of the evidence supporting the materiality element that was deemed found.
The motion is also not sufficiently specific to preserve Pawn's challenges to the factual sufficiency of the evidence to support the damage and attorney's fees awards.
Moreover, even if the challenge had been preserved, the materiality evidence supports the judgment. See Mustang Pipeline, 134 S.W.3d at 199. Parklane was deprived of the reasonably expected benefit of rent. The Lease provided for forfeiture if rent was not paid. The payments that were made fell far short of what was due and continued to be short one and a half years after the initial breach.
Pawn's first issue is overruled.
B. Finding that Parklane's Breach was not Excused
Pawn's second issue argues that the jury's response to Question 3 finding that Parklane's breach was not excused precludes a material breach finding as a matter of law.
There was no objection to the charge. See TEX. R. CIV. P. 274. However, if we construed Pawn's motion and arguments below to liberally conclude that it preserved this challenge for appellate review, see TEX. R. APP. P. 33.1(a)(1); Ryland Enter. v. Witherspoon, 355 S.W.3d 664, 665 (Tex. 2011) and likewise construed its appellate briefing, see TEX. R. APP. P. 38.1(i), we do not find this argument persuasive.
In Question 3, the jury was asked if Parklane's failure to comply was excused because Pawn: (a) by words or actions made a false representation of material facts, (b) with knowledge of the facts or with knowledge or information that would lead a reasonable person to discover the facts, (c) with the intention that Parklane would rely on the false representation or concealment in acting or deciding not to act. The jury answered "No."
Pawn urges that the jury's answer to this question rendered the jury's response to Question 2 immaterial. In other words, Pawn argues that the jury's finding that it breached the Lease first is of no consequence because the jury found that Parklane's breach was not excused. This argument is premised on reading Questions 2 and 3 as addressing the same legal issue—prior material breach. They do not.
When determining whether jury findings conflict, the threshold question is whether the findings address the same material fact. Bender v. S. Pac. Transp. Co., 600 S.W.2d 257, 260 (Tex. 1980). We may not strike jury answers on the ground of conflict if there is any reasonable basis upon which they can be reconciled in light of the pleadings and evidence, the manner of submission, and other findings considered as a whole. Ford Motor Co. v. Miles, 141 S.W.3d 309, 314-15 (Tex. App. —Dallas 2004, pet. denied). There is no conflict here.
The jury's answers to questions 2 and 3 are not inconsistent. See Wang v. Gonzalez, No. 01-11-00434-CV, 2013 WL 174576, at *8 (Tex. App.—Houston [1st Dist.] Jan. 17, 2013, no pet.) (mem. op.). Parklane pleaded several affirmative defenses, including equitable estoppel. See Daniel v. Falcon Interest Realty Corp., 190 S.W.3d 177, 178 (Tex. App.—Houston [1st Dist.] 2005, no pet.) (equitable estoppel is an affirmative defense). An affirmative defense does not seek to rebut factual propositions asserted by a plaintiff but seeks to establish an independent reason why the plaintiff should not recover. Gorman v. Life Ins. Co. of N. Am., 811 S.W.2d 542, 546 (Tex. 1991). Parklane claimed it was deceived into hiring the Hollingsworth's son and his friend to take over the repairs that Pawn subsequently claimed were untimely and deficient. Given Pawn's role in the delay, Parklane claimed Pawn was equitably estopped from claiming that Parklane breached the Lease for failing to timely and reasonably make repairs. Question 3 asks the jury to determine whether Parklane proved this defense.
A defendant seeking to avoid judgment based on equitable estoppel must prove: (1) a false representation or concealment of material facts; (2) made with knowledge, actual or constructive, of those facts; (3) with the intention that it should be acted on; (4) to a party without knowledge or means of obtaining knowledge of the facts; (5) who detrimentally relies on the representations. Johnson & Higgins of Tex., Inc. v. Kenneco Energy, Inc., 962 S.W.2d 507, 515-16 (Tex. 1998). Question 3, taken from the PJC instruction on equitable estoppel, tracks these elements. See PJC 101.25. The PJC comments to this section make clear that the instruction pertains to "the affirmative defense of equitable estoppel." PJC 101.25 cmt.
A prior material breach and a party's affirmative defense that such a breach is excused do not address the same material facts. Questions 1 and 2 submitted the competing breach of contract claims. Question 3 submitted Parklane's equitable estoppel affirmative defense and required different findings. Consequently, the jury's response to this separate theory does not render the response to Question 2 immaterial. Pawn's second issue is overruled.
In fact, the reverse is true. The jury's response to Question 2 renders the response to Question 3 immaterial because Parklane's equitable estoppel defense would only apply if the jury found that Parklane breached first.
C. Fraud
Pawn's third issue argues that the trial court erroneously entered judgment on Parklane's fraud counterclaim despite the jury's findings that neither party committed fraud. The record shows otherwise.
The final judgement states that judgment is rendered "in favor of [Parklane] on its counterclaim against [Pawn] for breach of contract and against [Parklane] on its counter claim for fraud." The judgment is in accord with the jury's findings. Pawn's third issue is overruled.
D. Factual Sufficiency
Pawn's fourth issue challenges the factual sufficiency of the evidence to support the damages and attorney's fees awarded to Parklane. We have concluded, however, that Pawn failed to preserve its sufficiency challenges for our review. See TEX. R. APP. P. 33.1. To the extent that Pawn intended its challenge to the admission of an attorney's fees invoice as an issue separate from its sufficiency challenge, we also reject that argument.
Pawn argues that Parklane's attorney's fees invoice should not have been admitted into evidence because it was not timely produced as required by the court's scheduling order. There is no scheduling order in our record. And even if the order was included, the trial court has broad discretion to interpret and apply its pretrial orders. See In re Estate of Henry, 250 S.W.3d 518, 526 (Tex. App.—Dallas 2008, no pet.). Pawn has not demonstrated that the trial court abused its discretion in interpreting the order or by admitting the evidence. See Gharda USA, Inc. v. Control Sols, Inc., 464 S.W.3d 338, 347 (Tex. 2015) (court's decision to admit or exclude evidence reviewed for abuse of discretion). Pawn's fourth issue is overruled.
Pawn's factual sufficiency argument also includes a complaint about the admission of Parklane's rent ledger. If intended as an issue apart from the sufficiency challenge, the record does not demonstrate that the court abused its discretion by admitting the evidence. See id. --------
Having resolved all of Pawn's issues against it, we need not reach Parklane's conditional cross-points. See TEX. R. APP. P. 47.1. The trial court's judgment is affirmed.
/Dennise Garcia/
DENNISE GARCIA
JUSTICE 191576F.P05
JUDGMENT
On Appeal from the 134th Judicial District Court, Dallas County, Texas
Trial Court Cause No. DC-18-02073.
Opinion delivered by Justice Garcia. Justices Schenck and Smith participating.
In accordance with this Court's opinion of this date, the judgment of the trial court is AFFIRMED.
It is ORDERED that appellee PARKLANE CORPORATION recover its costs of this appeal from appellant BILLY JOE HOLLINGSWORTH, II AND TAMMY HOLLINGSWORTH, D/B/A MILLION DOLLAR PAWN AND GUN. Judgment entered April 7, 2021