Town Center Mall, L.P. v. Jacques Gia Dao ( 2012 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-10-00281-CV
TOWN CENTER MALL, L.P. APPELLANT AND APPELLEE
V.
JACQUES GIA DAO APPELLEE AND APPELLANT
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FROM THE 342ND DISTRICT COURT OF TARRANT COUNTY
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MEMORANDUM OPINION1
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The trial court granted summary judgment for Jacques Gia Dao in his suit
against his landlord Town Center Mall, L.P., in a dispute over the parties’ lease
agreement. The trial court declined, however, to award Dao costs or attorney’s
fees. Both parties now appeal. In its appeal, Town Center brings four issues,
arguing that (1) the trial court erred in its interpretation of the lease provisions; (2)
1
See Tex. R. App. P. 47.4.
the trial court erred in its application of the facts; (3) the evidence was insufficient
to support summary judgment for Dao; and (4) the trial court erred by granting
summary judgment on a ground not presented in Dao’s summary judgment
motion. Dao raises two issues in his appeal, one challenging the trial court’s
failure to award him costs and the other challenging the trial court’s failure to
award him attorney’s fees. Because we hold that the trial court did not err by
granting summary judgment for Dao, that the trial court did not abuse its
discretion by not awarding Dao attorney’s fees, and that Dao failed to preserve
his complaint regarding the taxing of costs, we affirm.
In August 1997, Dao and Town Center entered into a lease agreement for
property at La Gran Plaza mall. The lease term was defined as beginning on
August 1, 1997 and ending on July 31, 2008. The lease contained a provision
stating that Dao could extend his lease for one ten-year term. The lease also
contained provisions allowing Town Center to terminate the lease upon an
uncured default by Dao.
In August 2007, Town Center’s representative sent Dao’s wife a letter to
notify her of “operations issues that must be addressed immediately.” The letter
identified some problems on the premises that Dao needed to remedy, such as
“heating ventilation and air-conditioning must be in working order” and “[s]mall
ladder must be removed from the canopy.” The letter did not mention any
problems with the fire prevention system. Dao’s wife responded with a letter
indicating that the problems had been remedied.
2
In April 2008, Dao notified Town Center of his intent to exercise the ten-
year extension of the lease. In May 2008, Town Center sent Dao a letter “in
efforts to resolve the ongoing operational issues noted in recent inspections of
the Premises.” One of the problems listed in the letter was that “[t]he fire system
needs to have a current and clear inspection”; the letter informed Dao that “[y]ou
will need to provide the Landlord with verification when this has been completed.”
In June 2008, Town Center notified Dao that the City of Fort Worth had
found that the fire sprinkler system on the premises was inoperable and needed
to be either activated or removed entirely. Town Center stated that it would not
consent to removal of the sprinkler system and that Dao therefore needed to
activate the sprinkler system to remain in compliance with the lease. Town
Center stated in the letter that if Dao did not remedy the problem with the
sprinkler system, Town Center would “have no choice but to exercise all of its
rights and remedies under the Lease, including termination.” In September 2008,
Town Center notified Dao that it was terminating the lease.
Dao filed suit against Town Center for breach of contract, seeking specific
performance and, alternatively, a declaratory judgment that Town Center had
breached the contract and that he had not breached the contract. Town Center
filed a counterclaim for declaratory judgment, seeking a declaration that, among
other things, it had properly terminated the lease.
Both parties filed motions for summary judgment. The trial court granted
Dao’s motion and denied Town Center’s motion. In the proposed judgment that
3
Dao had provided to the trial court, Dao had included language that he “be
entitled to recover reasonable and necessary attorneys’ fees and court costs as
determined at a later time by the Court or trier of fact.” The trial court crossed out
this language. Dao then filed a motion for attorney’s fees and to modify the
judgment to award attorney’s fees, which the trial court denied. Both parties then
appealed.
Town Center’s Appeal
In its first issue, Town Center argues that the trial court erred in its
interpretation of the lease provisions. It argues that (1) the lease required Dao to
make any repairs or replacements required by any authority; (2) the Fort Worth
Fire Department (FWFD) issued warnings on at least two occasions that the fire
sprinkler system needed repair or removal; and (3) therefore, it was Dao’s
responsibility under the lease to repair or replace the fire sprinkler system. Dao
argued in his motion for summary judgment that FWFD had given him the option
of repairing or removing the sprinkler system. Dao attached summary judgment
evidence in the form of testimony from Shelly Campbell, Operations Director for
La Gran Plaza, at a temporary injunction hearing in this case. Campbell
acknowledged that FWFD had given Dao the option of removing the sprinkler
system to bring it into compliance, that Dao had tried to remove it, and that Town
Center would not allow him to do so.
Although Town Center wanted Dao to repair rather than remove the
sprinkler system, Dao submitted summary judgment evidence sufficient to show
4
that FWFD would allow him to either repair or remove the sprinkler system and
thus that FWFD did not require him to repair the sprinkler system. Town Center
did not provide any evidence in its response showing that any other authority
required Dao to repair, rather than remove, the sprinkler system. Accordingly,
because no authority required Dao to repair the sprinkler system, the section of
the lease requiring Dao to make repairs as required by authority did not give rise
to a contractual duty to repair the sprinkler system in this case. We overrule
Town Center’s first issue.
In its second issue, Town Center argues that the trial court erred in its
application of the facts because the great weight and preponderance of the
evidence demonstrated that Dao breached the lease. We interpret this argument
to assert either that Town Center produced sufficient summary judgment
evidence to raise a genuine issue of material fact on Dao’s summary judgment
grounds or that Town Center established its right to summary judgment as a
matter of law.2
Much of Town Center’s argument under this issue duplicates its argument
under its first issue, and to the extent that it does so, we overrule Town Center’s
issue. Town Center also argues that the lease required Dao to make any
needed repairs to plumbing fixtures and that the sprinkler system was a plumbing
fixture. But that provision of the lease stated that Dao was required to make “all
2
See Tex. R. Civ. P. 166a.
5
needed repairs and replacements, including . . . repairs and replacements of
plumbing fixtures.” [Emphasis added.] Town Center does not direct this court to
any evidence in the record showing that the repairs it wanted Dao to make to the
sprinkler system were needed, other than FWFD requiring Dao to either repair or
remove the sprinkler system. Thus, Town Center did not establish its right to
judgment as a matter of law on this ground, and it did not produce evidence
sufficient to raise a fact issue on this ground. We therefore cannot say that the
trial court erred by concluding that the lease did not require Dao to repair the
sprinkler system. We overrule Town Center’s second issue.
In its third issue, Town Center argues that the trial court erred by rendering
summary judgment for Dao because there was insufficient evidence to support
such a finding. In Town Center’s first argument under this issue, it contends that
Dao’s affidavit, which was attached to his motion as summary judgment
evidence, fails to prove all the essential elements of his breach of contract claim
and that the granting of summary judgment rested almost entirely on this
affidavit.
We disagree with Town Center’s characterization of the evidence. The
trial court had before it as summary judgment evidence a copy of the lease,
which provided that Dao “may extend the Lease Term for one consecutive period
of ten years.” The trial court also had evidence before it that, rather than allowing
Dao to extend the lease, Town Center had elected to terminate the lease on the
ground that Dao was in default for not repairing the sprinkler system. Finally, the
6
trial court had before it evidence from which, as discussed above, it could
conclude that Dao was not required by any authority to repair the sprinkler
system. Applying the appropriate standard of review,3 we overrule the part of
Town Center’s issue arguing that the trial court’s grant of summary judgment was
erroneous on the ground that it was based almost entirely on Dao’s affidavit.
Town Center also argues that the trial court erred by granting summary
judgment for Dao because he failed to provide any evidence of damages. Dao
was not required, however, to prove damages to be entitled to either of the
remedies he sued to obtain.4 We overrule this part of Town Center’s third issue.
Finally under its third issue, Town Center argues that the trial court erred
by failing to strike certain statements in Dao’s affidavit. We have held that the
3
Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010); Mann
Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.
2009); 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008).
4
Bexar Metro. Water Dist. v. City of Bulverde, 156 S.W.3d 79, 88 (Tex.
App.—Austin 2004, pet. denied) (“A person seeking a declaratory judgment need
not have incurred actual injury.”); Tex. & N. O. R. Co. v. Houston Belt & Terminal
Ry. Co., 308 S.W.2d 912, 919 (Tex. Civ. App.—Houston 1957, no writ)
(addressing the appellee’s argument that the appellant’s suit could not be
maintained because the appellant did not show damages and holding that “our
courts are empowered to declare rights and other legal relations whether or not
other relief is asked,” that the appellant asked for a determination of the
appellees’ rights under an agreement, and that “it is legally entitled to an answer
without showing of damages”); see also Paciwest, Inc. v. Warner Alan Props.,
LLC, 266 S.W.3d 559, 575 (Tex. App.—Fort Worth 2008, pet. denied) (noting
that damages and specific performance are alternative remedies); Purington v.
Brown, 133 S.W. 1080, 1081 (Tex. Civ. App.—San Antonio 1911, no writ)
(stating that damages and specific performance are “utterly inconsistent with
each other” and that “recovery in one would absolutely preclude recovery in the
other”).
7
trial court had evidence before it, other than the objected-to portions of Dao’s
affidavit, from which it could have properly granted summary judgment. Thus, if
the trial court’s failure to strike those portions was error, it was harmless error.5
We overrule Town Center’s third issue.
Town Center argues in its fourth issue that the trial court erred by granting
summary judgment on a ground not presented in Dao’s motion. In its judgment,
the trial court did not grant the declaratory relief that Dao had sought in his
petition—that the trial court declare that he had not breached the lease and that
Town Center had breached the lease. Rather, the trial court granted declaratory
relief that in effect gave Dao the specific performance he had sought in his
petition, ordering that “Dao be entitled to a declaratory judgment allowing him to
extend his current lease with [Town Center] as per agreed upon terms and
conditions set forth in the parties’ lease agreement.” In the section of its brief on
this issue, Town Center does not argue that the trial court erred by granting
specific performance as relief on a declaratory judgment claim. Rather, it argues
that Dao did not establish his right to declaratory relief, stating that “Dao moved
for summary judgment only on his breach of contract cause of action” but that the
trial court granted “Dao final judgment on his cause of action for declaratory
judgment.”
5
See Tex. R. App. P. 44.1.
8
Town Center argues that “Dao neglected to cite the Uniform Declaratory
Judgments Act, or even mention a declaratory judgment, in the Argument section
of his Motion for Final Summary Judgment”; that “[t]he only hint that Dao might
be seeking summary judgment on his cause of action for declaratory judgment is
found in the ‘Prayer’ section of his motion”; and that Dao’s motion “fails to meet
the fair notice requirement.” Town Center also argues that Dao “failed to identify
the elements of a cause of action for declaratory judgment or explain how or why
no genuine issues of material fact exist on each element.”
We do not know which elements of Dao’s claim that Town Center believes
were not addressed because Town Center does not identify those elements in its
brief. But we point out that a declaratory judgment is simply a remedy for a
cause of action already within the court’s jurisdiction.6 Dao’s declaratory
judgment claim was premised entirely on his breach of contract claim, the
elements of which Dao set out in his motion. Dao correctly noted in his motion
that he had sued Town Center for breach of contract and sought a declaratory
judgment. As discussed above, in Dao’s petition, he had asserted a claim for
breach of contract seeking the remedy of specific performance, and he
6
Reynolds v. Reynolds, 86 S.W.3d 272, 275–76 (Tex. App.—Austin 2002);
see also Tex. Dep’t of Transp. v. Sefzik, 355 S.W.3d 618, 622 (Tex. 2011)
(referring to the uniform declaratory judgments act as “merely a procedural
device for deciding cases already within a court’s jurisdiction”); Sid Richardson
Carbon & Gasoline Co. v. Interenergy Res., Ltd., 99 F.3d 746, 752 (5th Cir.
1996) (“Although the petition formally stated two independent causes of action for
breach of contract and declaratory judgment, the latter ground is merely a theory
of recovery for the former”).
9
alternatively asserted a claim for a declaratory judgment that he was in
compliance with the contract and that Town Center had breached the contract.
Thus, all of the relief requested by Dao was premised on an allegation that Town
Center was in breach of the lease.
In Dao’s summary judgment motion, he stated that he was “entitled to
summary judgment because [he] can prove each element of his cause of action
as a matter of law,” and he noted that “[t]o carry his burden, [he] must prove all
elements of his cause of action for breach of contract.” If Dao was entitled to a
declaration that Town Center had breached the contract, then to establish his
right to such a declaration, he would have to prove that Town Center was in
breach.7
Dao set out in his motion the elements for breach of contract, and he also
pointed to the evidence that he believed showed as a matter of law that Town
Center had breached the lease. Then, in his prayer, he prayed that the trial court
“grant this motion for summary judgment, declare that [Dao] has not breached
the lease agreement, declare that plaintiff [sic] has breached the lease
7
See MBM Fin. Corp. v. Woodlands Operating Co., L.P., 292 S.W.3d 660,
667 (Tex. 2009) (stating that declaratory relief is available in contract cases even
after a breach of the contract has occurred); see also Tex. Civ. Prac. & Rem.
Code Ann. § 37.004 (West 2008) (stating that a person interested under a
contract may obtain a declaration of rights, status, or other legal relations under
the contract and that the contract may be construed either before or after there
has been a breach of the contract). But see Hill v. Heritage Res., Inc., 964
S.W.2d 89, 140 (Tex. App.—El Paso 1997, pet. denied) (concluding that if a
factual dispute as to whether a party had breached a contract was the only issue
to be resolved, a declaratory judgment was not the proper remedy).
10
agreement, and for such other relief the court deems just and proper.” We
disagree with Town Center’s assertions that the motion did not give notice that
Dao sought summary judgment on his declaratory judgment claim and that the
trial court granted summary judgment on a ground not asserted in the motion. 8
We overrule Town Center’s fourth issue.
Dao’s Appeal
In Dao’s first issue, he argues that the trial court abused its discretion by
failing to award him costs under rules 131 and 141 of the rules of civil procedure9
or under section 37.00910 of the civil practice and remedies code.
Civil procedure rule 131 provides that “[t]he successful party to a suit shall
recover of his adversary all costs incurred therein, except where otherwise
provided.”11 Rule 141 states that “[t]he court may, for good cause, to be stated
on the record, adjudge the costs otherwise than as provided by law or these
rules.”12 Dao argues that the trial court abused its discretion by not either
8
See Clement v. City of Plano, 26 S.W.3d 544, 549–50 (Tex. App.—Dallas
2000, no pet.) (stating that in the context of summary judgment motions, “[a]
‘ground’ is a reason the movant is entitled to summary judgment”), disapproved
of on other grounds by Telthorster v. Tennell, 92 S.W.3d 457 (Tex. 2002); Bryan
A. Garner, A Dictionary of Modern Legal Usage 393 (2d ed. 1995) (equating
“ground” with “reason”).
9
Tex. R. Civ. P. 131, 141.
10
Tex. Civ. Prac. & Rem. Code Ann. § 37.009 (West 2008).
11
Tex. R. Civ. P. 131.
12
Tex. R. Civ. P. 141.
11
awarding costs under rule 131 or providing an explanation in accordance with
rule 141 as to why the costs were not awarded to him.
Because Dao was the successful party,13 the rules of civil procedure
required the trial court to award him costs except for good cause shown on the
face of the record.14 Town Center argues, however, that under section 37.009 of
the civil practice and remedies code, the trial court has discretion in awarding
costs in declaratory judgment actions.15 Town Center contends that the trial
court is not required to award costs to the successful party in a declaratory
judgment action because section 37.009 falls within the “except where otherwise
provided” language in rule 131 and that section 37.009 therefore controls over
rule 131.
Courts of appeals appear to be split on the question of whether section
37.009 controls over rule 131 in declaratory judgment actions.16 The Supreme
13
See Mixon v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa., 806 S.W.2d
332, 335 (Tex. App.—Fort Worth 1991, writ denied) (defining “successful party”
as “one who obtains a judgment of a competent court vindicating a civil claim of
right”).
14
See Tex. R. Civ. P. 141; Rogers v. Walmart Stores, Inc., 686 S.W.2d
599, 601 (Tex. 1985).
15
See Tex. Civ. Prac. & Rem. Code Ann. § 37.009 (“In any proceeding
under this chapter, the court may award costs and reasonable and necessary
attorney’s fees as are equitable and just.”) (emphasis added).
16
See McCuen v. Huey, 255 S.W.3d 716, 735 (Tex. App.—Waco 2008, no
pet.) (noting the division among the courts as to whether rules 131 and 141 apply
in declaratory judgment actions).
12
Court of Texas has not addressed the issue, but it has previously applied rule
131 in a declaratory judgment action and held that the trial court’s taxing of costs
against the successful party was contrary to that rule.17 By implication, the
Supreme Court appears to consider rule 131 to be applicable in declaratory
judgment actions, but the Camarena court did not discuss the relation between
the two provisions. We need not decide the question, however, because Dao did
not preserve this complaint for appeal. Although Dao stated in his summary
judgment motion that he had incurred attorney’s fees and costs, he did not ask
the trial court to award him his costs in the motion. And in his motion to modify
the judgment in which he asked the trial court to award him attorney’s fees, he
did not ask the trial court to award him costs. We overrule Dao’s first issue.18
In Dao’s second issue, he argues that the trial court abused its discretion
by not awarding him attorney’s fees. Dao did not move for summary judgment
on attorney’s fees. Dao argues, however, that in his post-judgment motion to
modify the judgment to award attorney’s fees, he included an affidavit from his
attorney “to establish the reasonableness, the amount, the necessity, the
17
Camarena v. Tex. Emp’t Comm’n, 754 S.W.2d 149, 152 (Tex. 1988).
18
See Tex. R. App. P. 33.1; see also Samco Props., Inc. v. Cheatham, 977
S.W.2d 469, 479 (Tex. App.—Houston [14th Dist.] 1998, pet. denied) (holding
that party did not preserve for appeal its complaint about the taxing of costs
because it did not make the trial court aware of its complaint).
13
equitableness, and the justness of the fees sought.” He argues that the trial
court abused its discretion by not awarding the fees under section 37.009.19
Unlike with costs, the rules of civil procedure do not provide that the trial
court should grant the successful party recovery of his or her attorney’s fees.
Attorney’s fees are generally not recoverable in Texas except where provided for
by statute or by contract.20 One statute that provides for the recovery of
attorney’s fees is section 37.009, which gives the trial court discretion to award
reasonable attorney’s fees “as are equitable and just.”21
In MBM Financial Corporation, the Supreme Court of Texas addressed the
question of attorney’s fees in a declaratory judgment action based on breach of
contract when no damages were awarded.22 That court stated that
when a claim for declaratory relief is merely tacked onto a standard
suit based on a matured breach of contract, allowing fees under
Chapter 37 would frustrate the limits Chapter 38 imposes on such
fee recoveries. And granting fees under Chapter 37 when they are
not permitted under the specific common-law or statutory claims
involved would violate the rule that specific provisions should prevail
over general ones. While the Legislature intended the [Declaratory
19
See Hunter v. PriceKubecka, PLLC, 339 S.W.3d 795, 804 (Tex. App.—
Dallas 2011, no pet.) (reviewing a trial court’s denial of a motion to modify a
judgment for abuse of discretion); see also Eng’rs’ Petroleum Co. v. Gourley, 243
S.W. 595, 598 (Tex. Civ. App.—Fort Worth 1922, no writ) (holding trial court did
not abuse its discretion by amending judgment during term).
20
Dallas Cent. Appraisal Dist. v. Seven Inv. Co., 835 S.W.2d 75, 77 (Tex.
1992).
21
Tex. Civ. Prac. & Rem. Code Ann. § 37.009.
22
MBM Fin. Corp., 292 S.W.3d at 670.
14
Judgments Act] to be remedial, it did not intend to supplant all other
statutes and remedies.
At trial, the Woodlands recovered no damages on its breach of
contract claim, so it cannot recover fees under Chapter 38. Allowing
it to recover the same fees under Chapter 37 would frustrate the
provisions and limitations of the neighboring chapter in the same
Code. Accordingly, we hold the Woodlands cannot recover
attorney’s fees under the Declaratory Judgments Act.23
Similarly, here, Dao prevailed on his claim, but the claim was based on a
matured breach of contract, and he recovered no damages. Rather than seeking
declaratory relief that would afford him greater or different relief than he was
entitled to on his breach of contract specific performance claim, Dao’s
declaratory judgment claim was premised entirely on his breach of contract
claim. Under the Supreme Court’s opinion in MBM Financial, Dao was not
entitled to recover attorney’s fees. Accordingly, we cannot say that the trial court
abused its discretion by not awarding them. We overrule Dao’s second issue.
Conclusion
Having overruled all of Town Center’s and Dao’s issues, we affirm the trial
court’s summary judgment.
LEE ANN DAUPHINOT
JUSTICE
PANEL: DAUPHINOT, MEIER, and GABRIEL, JJ.
DELIVERED: May 17, 2012
23
Id.
15