beverly-enterprises-texas-inc-and-beverly-health-and-rehabilation ( 2005 )

NO. 07-03-0104-CV
IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL D
MAY 31, 2005
______________________________
BEVERLY ENTERPRISES-TEXAS, INC. and BEVERLY
HEALTH and REHABILITATION SERVICES, INC.,
f/k/a BEVERLY ENTERPRISES, INC.
Appellants
v.
CLIFFORD E. MORTON, successor-in-interest to M.S. INVESTMENTS,
Appellee
_________________________________
FROM THE 251ST DISTRICT COURT OF RANDALL COUNTY;
NO. 43,907-C; HON. PATRICK A. PIRTLE, PRESIDING
_______________________________
Memorandum Opinion
_______________________________
Before QUINN, C.J., and REAVIS and CAMPBELL, JJ.
Beverly Enterprises-Texas, Inc. and Beverly Health and Rehabilitation Services, Inc.,
f/k/a Beverly Enterprises, Inc. (Beverly) appealed from a judgment granted in favor of
Clifford E. Morton, successor-in-interest to M.S. Investments (Morton). Five issues, some
with multiple sub-issues, were raised by Beverly. They involved the sufficiency of the
evidence supporting the jury’s verdict, the exclusion of evidence, the trial court’s jury charge
and the purported irreconcilable answers of the jury to various questions posed in the
charge, and the manner in which prejudgment interest was calculated. In turn, Morton
cross-appealed, and his issue also concerns the manner in which prejudgment interest was
calculated. We reverse the judgment and remand the cause.
Background
The dispute between the parties concerned Beverly’s obligations under a lease
agreement. It leased a facility from Morton to operate a nursing home. Morton sued
Beverly to recover damages due to Beverly’s failure to maintain the leased premises as
promised in the lease. Trial was to a jury, which body ultimately found in favor of Morton.
After judgment was entered, both sides appealed.
Issue One – Sufficiency of the Evidence
Through its first issue, Beverly attacks the sufficiency of the evidence underlying
aspects of the jury’s verdict. This particular issue consists of multiple sub-issues which we
consider in the order raised.
Waiver
Beverly initially contends that Morton waived any right he had to sue upon the
obligations imposed in article 13 of the lease or, alternatively, Beverly was entitled to an
instruction on waiver given the presence of some evidence creating an issue of fact on the
matter. This is purportedly so because Morton’s partner (Stan Studer and co-lessor)
informed Beverly, via a letter dated February 13, 1996, that it was his and Morton’s
intention “to have Beverly return to us the facility in the original condition delivered to
Beverly in 1981, reasonable wear and tear excepted.” The quoted provision, according to
Beverly, evinced the intent of both Morton and Studer to impress upon the tenant those
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obligations imposed by article 19 of the lease and forego those imposed by article 13. We
sustain the issue.
Article 13 obligated the lessee (Beverly) to:
. . . maintain in good condition the roof, exterior walls (including painting) and
the foundation so that the premises will be tenantable . . . [and] . . . at its sole
expense . . . keep in good repair the interior portions of the building including
interior painting, painting of exterior trim and walls and to make necessary
repairs, including but not limited to, the repair of the driveways and parking
lot, landscaping, electrical services and plumbing in the building, floor drains,
floor covering, light fixtures and maintenances [sic] of the air conditioning and
heating equipment, fire alarm and sprinkler systems, and the glass, including
the replacement of glass if necessary. All repairs made by Lessee shall be
at least equal in quality to the original. The Lessee shall receive all benefits
which the Lessors may be entitled to receive from any warranties and
guaranties on account of work in or on the premises, including any
equipment therein, the maintenance of which is the responsibility of the
Lessee . . . .
Additionally, the repairs contemplated were to “be at least equal in quality to the original.”
So too did Beverly bind itself to return the premises “in as good condition as the same is
at the date of commencement of the term thereof, reasonable wear and tear only
excepted.” The latter duty appeared in article 19 of the agreement. And, as can be seen,
the duties imposed by each provision differed somewhat.
Simply put, article 13 addressed the repairs to be undertaken by the lessee during
the term of the lease while article 19 involved the condition in which the lessee was to
return the property upon expiration of the leasehold. Furthermore, both envisioned that the
property would be maintained in “good condition.” See Fisher v. Temco Aircraft Corp., 324
S.W.2d 571, 575 (Tex. Civ. App.–Texarkana 1959, no writ) (stating that “the covenant ‘to
repair’ or ‘to keep in repair’ is essentially the same as the covenant to deliver up the
premises in good order and condition”). Yet, each contained additional language that the
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other omitted and that further described the duty contemplated by the respective article.
For instance, the repairs undertaken per article 13 during the leasehold had to be of the ilk
required to “at least” restore the item being repaired to the “quality [of] the original.” The
same cannot be said, however, of repairs within the ambit of article 19; there, the standard
remained one of good condition but allowed for “reasonable wear and tear.” That is, the
tenant had to return the property in as good condition as when first received except for
those items that deteriorated because of reasonable wear and tear.
So, as can be seen, the lease imposed two different duties upon Beverly. Though
each contemplated the property being in good condition, the scope of the duty viz
maintaining the property in that condition differed depending upon the period in the life of
the lease. During the lease term (i.e. as long as Beverly continued to use the premises),
Beverly had to maintain the property and correct deficiencies via means which returned it
to the “quality of the original.” Yet, when the lease ended and Beverly relinquished the
property to the lessors, good condition no longer meant that the components of the facility
were to be repaired to the “quality of the original” but rather it entitled Beverly to return the
premises or parts thereof in a condition less than original in quality if the diminution was
attributable to reasonable wear and tear. See Nadler v. American Motors Sales Corp., 764
F.2d 409, 414 (5th Cir. 1985) (noting this difference in duties in a similarly worded lease).
With the foregoing difference in duties in mind, we return to the Studer letter. Prior
to its delivery, Morton found fault in how Beverly complied with its duty to repair the
premises it continued to occupy. A September 1995 letter sent by his attorney indicated
as much; indeed, express reference was made to article 13 and Beverly’s obligations under
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it.1 Several months later and days before the lease was to end, Studer forwarded to
Beverly a letter simply directing it to return the property “in the original condition delivered
. . . reasonable wear and tear excepted.” Nothing was said in the letter about article 13 or
repairing the facility or its components to the “quality of the original.” Rather, Studer used
words akin to those used in article 19 and permitting Beverly to return the facility without
correcting those conditions caused by reasonable wear and tear. So, comparison of the
two letters illustrated a difference in the demands being made upon Beverly. Earlier, the
lessors sought compliance from Beverly with both articles while later they sent a letter
demanding compliance with those duties mentioned in article 19 alone.
Waiver is defined as the intentional relinquishment of a known right or intentional
conduct inconsistent with claiming the right. Shaver v. Schuster, 815 S.W.2d 818, 824
(Tex. App.–Amarillo 1991, writ denied). Whether such occurred is normally a fact issue for
the jury to determine based upon the evidence and reasonable inferences therefrom. Id.
Moreover, if some evidence of waiver appears of record and the defense is alleged in the
pleadings, then the trial court must instruct the jury of the matter. Hyundai Motor Co. v.
Rodriguez, 995 S.W.2d 661, 663-64 (Tex. 1999) (stating that the trial court must submit in
its charge all questions, instructions, and definitions raised by the pleadings and evidence);
Cresthaven Nursing Residence v. Freeman, 134 S.W.3d 214, 227 (Tex. App.–Amarillo
2003, no pet.) (requiring the same). Here, Beverly pled waiver in its supplemental answer.
Furthermore, comparison of the September and February letters illustrate that the lessors
1) knew of articles 13 and 19 and the rights and duties encompassed in each and 2) days
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So too did th e letter refer to the con dition in which the property had to be upon its return and as
con tem plated by article 19.
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before the lease was to end, demanded compliance with article 19, not article 13. This is
some evidence sufficient to create a fact issue regarding each element of waiver. And,
being sufficient to so create an issue of fact, the trial court was obligated to have the jury
determine if Morton waived compliance with article 13. By not doing so, the trial court
erred. Finally, the error was harmful given that waiver, if found by the jury to have
occurred, would have altered the damages recoverable by Morton.2
In short, we sustain that portion of issue one involving the trial court’s failure to
instruct the jury on waiver. Moreover, sustaining that issue relieves us from having to
address the remaining issues. Accordingly, we reverse the judgment of the trial court and
remand for further proceedings.
Brian Quinn
Chief Justice
2
Though the jury generally was asked to determine the amount of damages suffered by Morton due
to Beverly’s purported failure to comply with the lease provisions (which included articles 13 and 19), the trial
court also asked that it decide what amount of damages was attributable sole ly to the breach of article 19.
The former sum was $848,310 while the latter was $100,0 00. Thus , had the jury bee n give n the opp ortun ity
to decide if Morton waived the rights contained in article 13, the amount of damages recoverable from Beverly
ma y have been quite less.
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