R2 Restaurants, Inc. v. Mineola Community Bank, SSB , 561 S.W.3d 642 ( 2018 )

NO. 12-17-00328-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
R2 RESTAURANTS, INC., § APPEAL FROM THE 402ND
APPELLANT
V. § JUDICIAL DISTRICT COURT
MINEOLA COMMUNITY BANK, SSB,
APPELLEE § WOOD COUNTY, TEXAS
OPINION
R2 Restaurants, Inc. appeals the trial court’s declaratory judgment and award of
attorney’s fees rendered in favor of Appellee Mineola Community Bank, SSB. R2 raises four
issues on appeal. We affirm in part and reverse and remand in part.
BACKGROUND
The instant case arises out of easements on property adjacent to a Wal-Mart parking lot in
Wood County, Texas. The property, which consists of two vacant lots, was conveyed by
Wal-Mart to Perimeter Properties, L.P. in 1994. At or about that time, Wal-Mart conveyed to
Perimeter an easement, which set forth, in pertinent part, as follows:
WHEREAS, Wal-Mart is the owner of that certain tract or parcel of land situated in the
city of MINEOLA, county of WOOD, state of TEXAS identified as Tract 1 on the site plan
attached hereto as Exhibit “A” and more fully described on Exhibit “B” (“Tract 1”); and
WHEREAS, Grantee will be by the time this instrument is recorded the owner of that
certain 1.117 acre tract or parcel of land in the same city, county, and state, which tract lies
adjacent to Tract 1 and is identified as Tract 2 on Exhibit “A” and more fully described on Exhibit
“C” (“Tract 2”) which tract Wal-Mart Stores, Inc. is current owner of and intends to convey fee
simple title to Grantee by a warranty deed; and
WHEREAS, Grantee has requested from Wal-Mart, and Wal-Mart is desirous of granting
to Grantee, a non-exclusive easement for pedestrian and vehicular ingress and egress over and
across that portion of Tract 1 part of which is identified as Easement A and Easement B on Exhibit
“A” and more fully described on Exhibit “D,” which Easement A and Easement B are actually the
drive way/curb cut connectors to the limits of agreed access (collectively the “Access Area”).
NOW THEREFORE, in consideration of one dollar ($1.00) and other good and valuable
consideration, Wal-Mart does hereby grant, sell, and convey to Grantee a non-exclusive, perpetual
easement for the benefit of and appurtenant to Tract 2, for the purpose of vehicular and pedestrian
ingress and egress over and across the Access Area, and then across Tract 1 to the extent necessary
and convenient for access between Tract 2 and State Highway 37 and State Highway 584, to have
and to hold, unto Grantees, its successors and assigns, and all of their tenants and their respective
customers, invitees, employees, agents, contractors, and suppliers . . . .
....
7. Duration. The agreements contained herein and the rights granted hereby shall run
with the titles to Tract 2 and the Access Area and shall bind and enure to the benefit of the parties
hereto and their respective heirs, successors, and assigns.
The site plan comprising Exhibit “A” to the Wal-Mart easement depicts the tracts and easements,
in pertinent part, as follows:
In 1995, Perimeter conveyed the north lot to UP Enterprises, a Taco Bell franchisee.
Around that time, Perimeter and UP entered into a reciprocal easement agreement (REA). 1 The
REA stated, in pertinent part, as follows:
1
R2 is the successor in interest to UP. Joe Upshaw, who signed the REA, owned sixty percent of UP. His
son, Richard, owned the remaining forty percent of UP. When Joe passed away a year following the execution of
the REA, his interest passed to Richard, who is the owner of R2.
2
WHEREAS, Perimeter Properties, L.P. and UP Enterprises, Inc. wish to grant to each
other certain easement rights for the benefit of their respective tracts and impose certain
obligations and restrictions;
NOW, THEREFORE, in consideration of good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, Perimeter Properties, L.P. and UP Enterprises,
Inc. do hereby agree as follows:
....
2. Perimeter Properties, L.P. to UP Enterprises, Inc. Access Easement. Perimeter
Properties, L.P. does hereby grant to UP Enterprises, Inc. a perpetual non-exclusive easement for
pedestrian and vehicular ingress and egress over and across the drive lanes and sidewalks, and
entrances on Tract 1 identified as (the “Access Easement 1”) attached hereto and shown on
Exhibit D. UP Enterprises, Inc. shall use the Access Easement 1 for vehicular and pedestrian
ingress, access and egress. The Access Easement granted hereunder is a permanent easement and
will continue in full force and effect so long as the easement is used by the owners of Tract 1 and
Tract 2, its successors and assigns pursuant to this document recorded in the Real Property
Records of Wood County, Texas. Access Easement 1 shall be used by UP Enterprises, Inc., its
customers, employees, tenants and invitees.
3. UP Enterprises, Inc. to Perimeter Properties, L.P. Access Easement. UP
Enterprises, Inc. does hereby grant to Perimeter Properties, L.P. a perpetual, non-exclusive
easement for vehicular and pedestrian ingress and egress over and across the drive lanes,
sidewalks and entrances on Tract 2 identified as (the “Access Easement 2”) attached hereto as
Exhibit D and made a part hereof. Perimeter Properties, L.P. shall use Access Easement 2 for
vehicular and pedestrian ingress, access, and egress. The Access Easement 2 granted hereunder is
a permanent easement and will continue in full force and effect so long as the easement is used by
the owners of Tract 1 and Tract 2, its successors and assigns pursuant to this document recorded in
the Real Property Records of Wood County, Texas. The Access Easement 2 shall be used by
Perimeter Properties, L.P., its customers, employees, tenants and invitees.
....
8. Successors. The rights and obligations contained herein shall run with the title
to Tract 1 and Tract 2 and shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto.
9. Severability. In the event that any of the terms or conditions of this Reciprocal
Easement Agreement shall be deemed invalid, illegal, or unenforceable in any respect, the validity
of the remainder of this Reciprocal Easement Agreement shall in no way be affected and shall
remain in full force and effect to the fullest extent permitted by law.
10. Development Plan. Prior to commencing site grading on Tract 2, UP
Enterprises, Inc., shall provide to Perimeter Properties, L.P. a Plan of Development for approval
which includes exterior plans, specifications, and curb cuts showing the placement of buildings
and other improvements, including signage, setbacks from lot lines, location and dimensions of
parking areas and spaces, driveways, service areas and landscaping and such approval shall not be
unreasonably withheld.
(a) Sanitary Sewer. UP Enterprises, Inc. shall design and construct an 8”
sanitary sewer line and in accordance with plans and specifications approved by Perimeter
Properties, L.P.’s engineers, Doucet & Associates . . . .
3
(b) Curb Cuts. UP Enterprises, Inc. shall design and construct two curb
cuts to the Wal-Mart parking lot, two curb cuts to the Perimeter Properties, L.P. parking lot and
the mutual access drive from State Highway 37 located as shown on the site plan attached hereto
as Exhibit A, in accordance with plans and specifications approved by Perimeter Properties, L.P.’s
engineers, Doucet & Associates . . . .
....
14. Duration. All covenants, conditions and restrictions shall remain in force for
fifty (50) years.
The site plan comprising Exhibit “A” to the REA depicts the tracts and easements, in pertinent
part, as follows:
Further, Exhibit “D” to the REA depicts the tracts and easements, in pertinent part, as follows:
4
UP installed a “mutual access” lane between the two lots. But neither Perimeter nor its
successors installed a “mutual access” driveway to Highway 564.
That same year, UP constructed a Taco Bell franchise on the north lot. R2 has owned
and operated this Taco Bell franchise continuously since 1995. For seven and one-half years, the
south lot remained vacant. But on June 25, 2002, Perimeter and UP executed an Amendment to
the REA, in part to correct representations of ownership set forth in the REA. The amendment
further states that “‘Access Easement’ shall mean the driveways, walkways and sidewalks, curb
cuts, exits and entrances and other common areas as may from time to time exist on [the south
lot].”
Fifteen Thirteen, LLC later acquired the south lot and constructed a car wash on it in July
2002. During that time, Fifteen Thirteen constructed a driveway from the south lot to Highway
37. On September 24, 2010, Fifteen Thirteen sold the south lot to MCB. MCB demolished the
car wash building in 2011, but left in place the pad and concrete driveway connecting the two
lots at the mutual access easement on the eastern side of the lots. During the years that followed,
MCB’s activities on the lot were limited to having someone mow the grass, placing an
advertising sign on the lot for the bank, and permitting community groups to put signs at the
5
corner of the lot. The following aerial photograph of the property as it currently exists is part of
the record in this case:
In 2016, R2 commenced reconstruction of the Taco Bell located on the north lot. The
new restaurant was to be built in accordance to a corporate prototype plan, one aspect of which
required the dumpster to be placed as far away from customers as possible. Prior to the
commencement of construction, Chet Davis, R2’s vice president, contacted James Herlocker,
MCB’s president, and asked if R2’s contractor could place a small portable building and a
temporary dumpster on the south lot during construction. Herlocker gave permission for the
contractor to do so.
During construction, a new dumpster enclosure was constructed in the southeast corner of
the north lot where the easement between the two lots was located. Furthermore, the curb cut at
the location of the easement between lots on their western sides was closed. Thereafter,
Herlocker complained to Davis about the location of the dumpster enclosure. In response, Davis
suggested that MCB get its own easement from Wal-Mart to access the Wal-Mart parking lot.
MCB also contacted the Texas Department of Transportation (TXDOT) about installing a
driveway from the south lot to Highway 564, but TXDOT denied its request.2
2
The record reflects that under TXDOT regulations in effect at the time the REA was executed, the
installation of a driveway from the south lot to Highway 564 was permissible, but the installation of such a driveway
would violate current TXDOT regulations.
6
MCB filed the instant suit seeking, among other things, a declaratory judgment that the
REA remained in effect and granted MCB access over the north lot. MCB also sought to recover
attorney’s fees. R2 filed a counterclaim, by which it sought a declaratory judgment that the REA
terminated prior to its constructing the new dumpster enclosure, MCB has no rights under the
1994 Wal-Mart easement, and MCB breached the REA by not installing the Highway 564
entrance. R2 also sought to recover attorney’s fees.
Following a bench trial, the trial court rendered a declaratory judgment in MCB’s favor
and denied R2’s counterclaim and request for attorney’s fees. In accordance with its findings of
fact and conclusions of law, the trial court, in its judgment, declared that the REA remained in
effect, ordered R2 to remove the obstruction to the easement, enjoined R2 from obstructing the
easement, and awarded MCB $80,620 in attorney’s fees through trial and $20,000 for attorney’s
fees in the event of an unsuccessful appeal. This appeal followed.
TERMINATION OF THE REA
In its first issue, R2 argues that the REA terminated before R2 relocated its dumpster
enclosure to the southeastern corner of the north lot. Specifically, R2 contends that the REA
terminated either (1) in accordance with its terms, (2) due to impossibility of performance on
MCB’s part, (3) as a result of material breach on the part of MCB and its predecessors in title, or
(4) due to failure of consideration. R2 further argues that its closing of the west side curb cut
during the 2016 construction project is irrelevant because of the REA’s prior termination.
Lastly, R2 argues that several of the trial court’s findings and conclusions related to this issue are
either erroneous or irrelevant.
Standards of Review
R2’s issues concern contractual interpretation and evidentiary sufficiency. The
applicable standards of review are discussed below.
Contractual Interpretation
A written agreement is ambiguous only if, after the application of established rules of
construction, an agreement is still susceptible to more than one reasonable meaning. See RSI
Int’l, Inc. v. CTC Transp., Inc., 291 S.W.3d 104, 106 (Tex. App.–Fort Worth 2009, no pet.); see
also Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex.
1996). If a contract is unambiguous, its terms can be interpreted as a matter of law by the court.
7
Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). When an issue turns on a question of law,
we do not give any particular deference to legal conclusions of the trial court and apply a de
novo standard of review. Trinity Indus., Inc. v. Ashland, Inc., 53 S.W.3d 852, 868 (Tex. App.–
Austin 2001, pet. denied).
When an appellate court concludes that contractual language can be given a certain or
definite meaning, then the language is not ambiguous, and the appellate court is obligated to
interpret the contract as a matter of law. DeWitt County Elec. Coop., Inc. v. Parks, 1 S.W.3d
96, 100 (Tex. 1999); Loaiza v. Loaiza, 130 S.W.3d 894, 905 (Tex. App.–Fort Worth 2004, no
pet.).
Evidentiary Sufficiency
Moreover, a trial court’s findings of fact have the same force and dignity as a jury’s
answers to jury questions and are reviewable for legal and factual sufficiency of the evidence to
support them by the same standards. See Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994);
Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991); Lindemann Properties,
Ltd. v. Campbell, 524 S.W.3d 873, 880 (Tex. App.–Fort Worth 2017, pet. filed); see also MBM
Fin. Corp. v. Woodlands Operating Co., 292 S.W.3d 660, 663 n.3 (Tex. 2009). We may sustain
a legal sufficiency challenge only when (1) the record discloses a complete absence of evidence
of a vital fact, (2) the court is barred by rules of law or of evidence from giving weight to the
only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is no
more than a mere scintilla, or (4) the evidence establishes conclusively the opposite of a vital
fact. Ford Motor Co. v. Castillo, 444 S.W.3d 616, 620 (Tex. 2014); Uniroyal Goodrich Tire
Co. v. Martinez, 977 S.W.2d 328, 334 (Tex. 1998). When reviewing an assertion that the
evidence is factually insufficient to support a finding, we set aside the finding only if, after
considering and weighing all of the evidence in the record pertinent to that finding, we determine
that the credible evidence supporting the finding is so weak, or so contrary to the overwhelming
weight of all the evidence, that the answer should be set aside and a new trial ordered. Pool v.
Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986) (op. on reh’g); Cain v. Bain, 709 S.W.2d
175, 176 (Tex. 1986); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965). We defer to
unchallenged findings of fact that are supported by some evidence. Tenaska Energy, Inc. v.
Ponderosa Pine Energy, LLC, 437 S.W.3d 518, 523 (Tex. 2014).
8
There is a general presumption of validity extending to the judgment of a court of general
jurisdiction, regardless of whether the judgment is the result of a jury trial or a bench trial.
Vickery v. Comm’n for Lawyer Discipline, 5 S.W.3d 241, 250 (Tex. App.–Houston [14th Dist.]
1999, pet. denied); In re Estate of Miller, 446 S.W.3d 445, 450 (Tex. App.–Tyler 2014, no pet.).
The court’s findings of fact form the basis of the judgment upon all grounds of recovery and
defenses. TEX. R. CIV. P. 299. When a court makes fact findings but inadvertently omits an
essential element of a ground of recovery or defense, the presumption of validity will supply by
implication any omitted unrequested element that is supported by evidence. See id.
We may review conclusions of law to determine their correctness based upon the facts,
but we will not reverse because of an erroneous conclusion if the trial court rendered the proper
judgment. City of Austin v. Whittington, 384 S.W.3d 766, 779 n.10 (Tex. 2012) (citing BMC
Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002)); Campbell, 524 S.W.3d
at 880.
Governing Law
In a declaratory judgment action, the party who asserts an affirmative claim for relief has
the burden of proving its allegations. Garden Oaks Maint. Org. v. Chang, 542 S.W.3d 117, 129
(Tex. App.–Houston [14th Dist.] 2017, no pet.). Here, R2 pleaded that the REA terminated in
accordance with its own terms. See Azad v. Aaron Rents, Inc., No. 14-07-01087-CV, 2009 WL
4842761, at *4–6 (Tex. App.–Houston [14th Dist.] Dec. 17, 2009, no pet.) (mem. op.)
(categorizing condition subsequent as an affirmative defense).3
An easement is a nonpossessory interest that authorizes a holder’s use of property for
only a particular purpose. Marcus Cable Assocs., L.P. v. Krohn, 90 S.W.3d 697, 700 (Tex.
2002). Ordinarily, intent to abandon an easement must be established by clear and satisfactory
evidence, and abandonment of an easement will not result from nonuse alone; instead, the
circumstances must disclose some definite act showing an intention to abandon and terminate the
right possessed by the easement owner. See Toal v. Smith, 54 S.W.3d 431, 437 (Tex. App.–
3
R2 describes the lack of use language in the REA as a “conditional limitation.” The primary distinction
between a conditional limitation and a condition subsequent is whether the happening of an event automatically
terminates the estate without the necessity of reentry versus the happening of an event, which gives the grantor the
right to terminate the estate by reentry. See Field v. Shaw, 535 S.W.2d 3, 5 (Tex. Civ. App.–Amarillo 1976, no
writ). We need not determine if the language of the REA imposed a conditional limitation or a condition
subsequent. Here, R2 raised the matter defensively to MCB’s claim that it had property rights under the REA, and
we conclude that the matter constitutes an affirmative defense, on which R2 bore the burden of proof. Cf. Azad,
2009 WL 4842761, at *4–6.
9
Waco 2001, pet. denied). But the easement holder’s rights are limited to those that are expressed
in the grant. DeWitt Cty. Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 103 (Tex. 1999). Thus, it is
reasonable that we apply basic principles of contract construction and interpretation when
considering this express easement’s terms. See Marcus Cable, 90 S.W.3d at 700; Parks, 1
S.W.3d at 100. We give the terms their plain and ordinary meaning when they are not expressly
defined, and we read the terms of an easement as a whole to determine the parties’ intentions and
to carry out the purpose for which the easement was created. Marcus Cable, 90 S.W.3d at 701;
Parks, 1 S.W.3d at 101. We assume that the parties intended for every clause to have some
effect. Koelsch v. Indus. Gas Supply Corp., 132 S.W.3d 494, 498 (Tex. App.–Houston [1st
Dist.] 2004, pet. denied).
Termination of the REA in Accordance with Its Terms
R2 argues that the evidence conclusively demonstrates that the REA terminated in
accordance with its terms. Specifically, it argues that the parties and their respective
predecessors in title did not use the tract in accordance with the uses described in the REA and,
as a result of this nonuse, the easements terminated.
We first review the language of the easement to determine if it unambiguously sets forth
the parties’ obligations to avoid its termination. The REA sets forth that the access easements
“will continue in full force and effect so long as [they are] used by the owners of Tract 1 and
Tract 2, [their] successors and assigns” pursuant to its terms.
Failure to Construct Highway 564 Entrance
R2 first argues that since no owner of the south lot installed an entrance to Highway 564
as depicted on Exhibit “D,” the owners of the two lots never used that entrance and the REA
terminated as a result of this nonuse. On Exhibit “D,” this entrance is described as a “Mutual
Access” easement. The amendment to the REA states that the phrase “Access Easement” means
“the driveways, walkways and sidewalks, curb cuts, exits and entrances and other common areas
as may from time to time exist on Tract 1.” (emphasis added). The use described in the REA is
“for vehicular and pedestrian ingress, access, and egress.” The REA further mandates that UP
shall design and construct curb cuts at certain locations on the property, but imposes no such
obligation on Perimeter or its successors.
We initially note that the easement abutting Highway 564 as shown on Exhibit “D” is one
of mutual “access” as compared to the driveway subject of one of UP’s curb cuts, which is
10
labeled “Mutual Ingress/Egress.” We reiterate that, according to the language of the amendment
to the REA, an “access easement” includes common areas as “may from time to time exist on
[the south lot].” The word “access” means, among other things “freedom or ability to . . . make
use of something.” Access, Merriam-WEBSTER’S COLLEGIATE DICTIONARY (11th ed. 2011).
Based on our reading of the REA and its exhibits, we conclude, that nothing therein required UP
or its successors, including MCB, to construct a curb cut, driveway, or other entryway from the
south lot to Highway 564, and the owners of the south lot’s failure to undertake such
construction, without more, has not interfered with R2’s right of access to that portion of the
south lot.4
Failure of Consideration
R2 further contends that the REA terminated due to a failure of consideration.
Specifically, it contends that the stated purpose of the REA was the granting of reciprocal
easements by the parties for the benefit of their respective tracts and R2 did not receive the
promised entrance to Highway 564.
Failure of consideration, an affirmative defense, occurs when, because of some
supervening cause after a contract is formed, the promised performance fails. See TEX. R. CIV. P.
94; Burges v. Mosley, 304 S.W.3d 623, 628 (Tex. App.–Tyler 2010, no pet.). As set forth above,
nothing in the REA required UP or its successors, including MCB, to construct a curb cut,
driveway, or other entryway from the south lot to Highway 564, and the various owners of the
south lot’s failure to undertake such construction, without more, has not interfered with R2’s
right of access to that portion of the south lot. Therefore, there is no failure of consideration.
Further still, R2 and its predecessors received other consideration in accordance with the
stated purpose of the REA. Consideration is a present exchange bargained for in return for a
promise and consists of benefits and detriments to the contracting parties. Roark v. Stallworth
Oil & Gas, Inc., 813 S.W.2d 492, 496 (Tex. 1991). The detriments must induce the parties to
make the promises, and the promises must induce the parties to incur the detriments. Id.
Here, the REA set forth that UP would construct a sewer line and Perimeter would
reimburse UP for the cost of that sewer line. The evidence presented at trial reflects that the
4
As a result of this conclusion, we need not address (1) R2’s alternative argument that the REA terminated
because of the impossibility of installing the entrance to Highway 564 due to TXDOT regulations concerning the
distance requirements between driveways and highway intersections or (2) whether MCB’s or its predecessors’
failure to construct a driveway to Highway 564 amounted to material breach of the REA. See TEX. R. APP. P. 47.1.
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sewer line constructed passes under the south lot and connects to another sewer line running
along Highway 564. The evidence further indicates that R2 has used this sewer line from the
time of its construction up to and including the time of trial. Thus, we conclude that even
assuming that there was failure of some consideration as R2 contends, the REA would not be
entirely devoid of consideration.
Failure to Use the Easements
We next consider R2’s contention that the parties lack of use of the various mutual access
easements caused the REA to terminate in accordance with its terms. At oral argument of this
case, R2 suggested that the period of time after which the REA would terminate for this reason
should be implied to be a “reasonable” period of time.5 We agree. In making this determination,
we will consider whether there is legally sufficient evidence to support the trial court’s implied
finding that any periods of nonuse by an owner of the south lot do not exceed a reasonable period
of time. See Joines v. Burke, 540 S.W.2d 798, 801 (Tex. Civ. App.–Corpus Christi 1976, no
writ). Thus, we interpret R2’s argument to be that the evidence conclusively establishes that any
period of nonuse extended beyond a reasonable period of time. See Castillo, 444 S.W.3d at 620.
For a trial court to imply a term into an agreement, it must appear that it is necessary to
do so in order to effectuate the purposes of the contract as a whole as gathered from the written
instrument. See Westerngeco, L.L.C. v. Input/Output, Inc., 246 S.W.3d 776, 783 (Tex. App.–
Houston [14th Dist.] 2008, no pet.). What constitutes a reasonable time must be determined by
the circumstances in evidence surrounding the situation of the parties and the subject matter
under which the contract was executed. Hall v. Hall, 308 S.W.2d 12, 16–17 (Tex. 1957). The
fact that such determination is usually a question of fact and almost always is made well after the
date of the contract does not make it depend on facts arising after the contract. See id.
In this case, the REA fails to set forth what period of nonsuse will result in termination.
However, the REA does set forth that “[a]ll covenants, conditions and restrictions shall remain in
force for fifty (50) years.” This language does not apply directly to the granting clause creating
the easements since an easement is distinct from a covenant or a restriction. See Hubert v.
Davis, 170 S.W.3d 706, 711 (Tex. App.–Tyler 2005, no pet). Nonetheless, since the overall
5
The trial court made fact findings related to this defensive issue, but omitted the element of whether any
period of nonuse extended past a reasonable period of time. There is no indication from the record that this
omission was anything but inadvertent. See Vickery, 5 S.W.3d at 252–53. Accordingly, the presumption of validity
will supply by implication this omitted, unrequested element, and we will consider whether there is sufficient
evidence to support the trial court’s implicit finding. See Miller, 446 S.W.3d at 450.
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purpose of the contract at issue was the grant of reciprocal access easements, the trial court
reasonably could have found this duration clause to be a helpful guide in determining what a
reasonable period of nonuse might be or when such a period might commence. See J.M.
Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003) (in construing written contract,
court must consider entire writing in an effort to harmonize and give effect to all provisions of
contract so that none will be rendered meaningless).
Moreover, at the time of the REA’s execution, the evidence reflects that the north and
south lots were vacant. And there is no language in the REA or elsewhere in the record
mandating that the owner of either of the lots build commercial structures. It would not be
uncommon or unwise for a party to buy a commercial lot, allow it to remain vacant, and later sell
it in its unimproved state. Indeed, the record reflects that Perimeter never constructed businesses
on either lot. The mutual access easements undoubtedly add value to the south lot, regardless of
whether there is a commercial business operating on it. Thus, since at the time of the REA’s
execution, these commercial lots were vacant, the trial court reasonably could have found that a
reasonable period of nonsuse would be a long period of time, particularly for the easements on
the south lot since it has been vacant for longer periods of time.
Further still, as R2 notes in its brief, the REA requires use by the owners of both lots.
However, the evidence reflects that the north lot contains entrances to the Wal-Mart parking lot
and the only entrance of ingress and egress on the south lot is to Highway 37, a highway to
which the north lot already has access. As a result, the trial court reasonably could have found a
reasonable period of nonuse for the north lot to be longer than a reasonable period of nonuse for
the south lot.
The evidence at trial reflects that after the REA was executed, the south lot remained
vacant for seven and one half years. The evidence further reflects that in June 2002, the parties
executed an amendment to the REA. The evidence indicates that a car wash was operated on the
south lot from July 2002, until September 2010, and the access easement was used during that
time. The evidence also indicates that MCB demolished the car wash in 2011. The evidence
reflects that from that point forward, MCB hired someone to mow the property once per week,
placed an advertising sign for the bank on the property, permitted others to access the property to
place signage, and, in 2016, gave permission for R2’s contractor to access the south lot to set up
a temporary building and dumpster in connection with its construction activities on the north lot.
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The evidence further reflects that Taco Bell employees were instructed to park as far away from
the front door as possible and, as a result, employees would park their cars in the southeast
corner of the north lot facing the driveway located on the northeast corner of the south lot.6
From this evidence, the trial court reasonably could have made implied findings that (1)
there was approximately a seven-year period of nonuse from the date the REA was executed
until June 2002, at which time the parties acknowledged the continued existence of the REA by
executing an amendment to it,7 (2) following less than a month of nonuse, Fifteen Thirteen used
the easements continuously in its operation of the carwash until September 2010, (3) following a
period of nonuse, MCB used the easements while demolishing the car wash, (4) MCB used the
easements to access the south lot to mow it on a weekly basis, and place an advertising sign, (5)
after the car wash was demolished, R2 employees regularly accessed a portion of the easement
abutting the driveway to park their cars, (6) in 2016, R2 used the easement to access the south lot
while engaging in construction on its new Taco Bell facility, and (7) none of these periods of
nonuse exceeded a reasonable period of time.
Having considered the circumstances existing at the time of the execution of the REA and
the evidence of varying periods of use and nonuse by the parties, we conclude that there is
legally sufficient evidence to support the trial court’s implicit finding that any period of nonuse
on the part of the owners of the north and south lots did not extend beyond a reasonable time so
as to cause the REA to terminate by its own terms.
Specific Challenges to Findings and Conclusions
Lastly, R2 makes specific challenges to numerous findings of fact, conclusions of law,
and resultant rulings made by the trial court. Among these challenges,8 the following are
germane to the foregoing discussion:
6
The record reflects that there were parking lines drawn on this part of the north lot, within the access
easement.
7
At trial, Richard Upshaw, R2’s president, testified that the REA was in full force and effect when he
signed the amendment to the REA.
8
R2 also references Findings of Fact 10, 11, 13, 15, 20, Conclusion of Law 8, and Rulings 2, 3, and 5.
None of these findings of fact or conclusions of law are relevant to our de novo review of the unambiguous language
of the REA or our consideration of the evidence as it pertains to the implied finding of whether a reasonable period
of nonuse of the easements had taken place. R2’s challenges regarding the remaining rulings of the trial court are
based on its contention that the REA terminated.
14
Finding of Fact No. 8
No express requirement that Plaintiff construct access to State Highway 564 exists in any
of the documents related to the property [that is] the subject of this litigation.
Finding of Fact No. 17
Both parties enjoyed the benefit of the concrete driveway that traverses Plaintiff’s
property and connects Highway 37 and the curb cut on Defendant’s property adjoining the
Wal-Mart Property.
Conclusion of Law No. 6
Defendant’s failure to include express language in the easement agreement, either at the
time of the original 1995 sale or the 2002 amendment to same, requiring Plaintiff to construct road
access to State Highway 564 supposes a tacit agreement that Mineola Community Bank was under
no obligation to do so in order to maintain its Reciprocal Easement Agreement with R2
Restaurants, Inc.
Court’s Ruling No. 1
The Reciprocal Easement Agreement between R2 Restaurants, Inc. and Mineola
Community Bank is valid and in existence.
Court’s Ruling No. 4
R2 Restaurants, Inc. and Mineola Community Bank both enjoyed the benefit of the
Reciprocal Easement Agreement prior to the intentional obstruction of the same by R2
Restaurants, Inc.
As set forth above, we have conducted a de novo review of the REA and its amendment
and have reviewed the record to conduct our analysis of sufficiency of the evidence. Having
done so, we conclude that there is no error in the aforementioned findings of fact, conclusions of
law, or rulings made by the trial court. R2’s first issue is overruled.
MCB’S RIGHTS PURSUANT TO THE WAL-MART EASEMENT
In its second issue, R2 argues that the trial court erred by failing to rule on R2’s
counterclaim for declaratory judgment concerning the parties’ rights under the access easement
granted by Wal-Mart to Perimeter. However, the trial court did, in fact, make the following
findings of fact and conclusions of law9 concerning the Wal-Mart easement:
9
These findings of fact and conclusions of law are designated as Findings of Fact 1–3. However, we
construe Findings of Fact 2 and 3 as conclusions of law. Cf. Simpson v. Curtis, 351 S.W.3d 374, 379 n.1 (Tex.
App.–Tyler 2010, no pet.).
15
Wal-Mart Stores, Inc. conveyed by warranty deed a 1.117 acre tract connected and
adjacent to its Mineola location to Perimeter Properties, LP in 1994.
Contemporaneously with the warranty deed conveyance, Wal-Mart Stores, Inc. granted
Perimeter Properties, LP, a non-exclusive, express easement for pedestrian and vehicular ingress
and egress over and across that portion of Wal-Mart’s property for the benefit of Perimeter
Properties, LP, its successors and assigns.
The Access Easement granted to Perimeter Properties, LP by Wal-Mart was perpetual,
non-exclusive and granted to allow access to Highway 37 and State Highway 564 via curb cuts to
Wal-Mart property. Two curb cuts were expressly noted in the original reciprocal easement
document.
In its counterclaim, R2 alleged that the Wal-Mart easement was intended only to benefit
the north lot. Because the trial court denied R2’s counterclaims, we will conduct a de novo
review of the legal correctness of the trial court’s implicit conclusion of law that the plain
meaning of the Wal-Mart easement demonstrated that the parties intended that the entire 1.117
acre tract receive the benefit of the easements.
As set forth above in greater detail, the Wal-Mart easement states that (1) Wal-Mart is the
owner of Tract 1, (2) Perimeter is the owner of the 1.117 acre tract adjacent to Tract 1, which is
identified as Tract 2 on Exhibit “A,” (3) Perimeter requested and Wal-Mart desired to grant
Perimeter a nonexclusive easement for pedestrian and vehicular ingress and egress over and
across that portion of Tract 1 part of which is identified as Easement “A” and Easement “B” on
Exhibit “A.” Further still, the Wal-Mart easement sets forth, in pertinent part, as follows:
Wal-Mart does hereby grant, sell, and convey to [Perimeter] a non-exclusive, perpetual
easement for the benefit of and appurtenant to Tract 2, for the purpose of vehicular and
pedestrian ingress and egress over and across the Access Area, and then across Tract 1 to the
extent necessary and convenient for access between Tract 2 and State Highway 37 and State
Highway 584, to have and to hold, unto [Perimeter], its successors and assigns, and all of their
tenants and their respective customers, invitees, employees, agents, contractors, and suppliers . . . .
....
7. Duration. The agreements contained herein and the rights granted hereby shall run
with the titles to Tract 2 and the Access Area and shall bind and enure to the benefit of the
parties hereto and their respective heirs, successors, and assigns.
(emphasis added).
The plain language of the Wal-Mart easement sets forth that the easement is intended to
benefit Tract 2 for access between Tract 2 and Highway 37 and Highway 584. It further states
that the rights granted shall run with the titles to Tract 2 and shall bind and enure to the benefits
16
of the parties and their respective successors. The site plan comprising Exhibit “A” to the
Wal-Mart easement, plainly indicates with two distinct arrows that “Tract 2” includes both the
north and south lots, which, as R2 notes in its brief, were separately platted when Wal-Mart
granted Perimeter the easement. And when Perimeter conveyed the north lot to UP, it did not
need to reserve right of access to the Wal-Mart easements for the south lot since both lots are
part of “Tract 2” under the Wal-Mart easement. Thus, despite the fact that Perimeter conveyed
the north lot to UP “with all rights tenements, appurtenances and hereditaments[,]” the south lot
retained its rights under the Wal-Mart easement by virtue of its being part of “Tract 2” under the
plain language of the easement. But even if we assume that the rights to the Wal-Mart easement
passed to the north lot with its sale by Perimeter to UP, the fact remains that “Access to
Wal-Mart” is plainly indicated on Exhibits “A” and “D” to the REA.
Based on our consideration of the plain language of the Wal-Mart easement and its
exhibits, we conclude that the trial court reasonable could have determined that the easements
were granted to the entirety of Tract 2, which consisted of the north and south lots and
Perimeter’s sale of the north lot to UP did not divest the south lot owners of their rights under
that easement. R2’s second issue is overruled.
R2’S ATTORNEY’S FEES
In its third issue, R2 argues that the trial court abused its discretion in denying its request
for attorney’s fees. However, R2’s third issue is entirely premised on this court’s reversing the
trial court’s declaratory judgment. Since we overruled R2’s first and second issues, we likewise
overrule R2’s third issue.10
MCB’S ATTORNEY’S FEES
In its fourth issue, R2 argues that the trial court abused its discretion in awarding MCB
attorney’s fees of $80,620 and $20,000 in the event of an unsuccessful appeal on R2’s part.
Specifically, R2 argues that MCB, by way of its counsel’s testimony, elected to establish its
entitlement to attorney’s fees using the lodestar method and that the evidence is insufficient to
support the fees awarded under this method.
10
We are mindful that a trial court may award attorney’s fees to a nonprevailing party in a declaratory
judgment action. See Feldman v. KPMG LLP, 438 S.W.3d 678, 685 (Tex. App.–Houston [1st Dist.] 2014, no pet.).
17
Texas Civil Practice and Remedies Code, Section 37.009, permits recovery of attorney’s
fees in a declaratory judgment action so long as those fees are proven to be reasonable and
necessary, as well as equitable and just. See TEX. CIV. PRAC. & REM. CODE ANN. § 37.009 (West
2015). A “reasonable” attorney’s fee is one that is not excessive or extreme, but rather moderate
or fair. Helms v. Swansen, No. 12-14-00280-CV, 2016 WL 1730737, at *6 (Tex. App.–Tyler
Apr. 29, 2016, pet. denied) (mem. op.). We review the decision by a trial court to either grant or
deny attorney’s fees under an abuse of discretion standard, and we review the amount awarded as
attorney’s fees under a legal sufficiency standard. EMC Mortg. Cor. v. Davis, 167 S.W.3d 406,
418 (Tex. App.–Austin 2005, pet. denied). In conducting our review, we consider the evidence
in the light most favorable to the finding under review and indulge every reasonable inference
that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). If more than a
scintilla of evidence supports the challenged finding, the legal sufficiency challenge fails.
Wal-Mart Stores, Inc. v. Canchola, 121 S.W.3d 735, 739 (Tex. 2003).
The lodestar method for proving attorney’s fees involves evidence relating the hours
worked for each attorney multiplied by their respective hourly rates for a total fee. See Long v.
Griffin, 442 S.W.3d 253, 255 (Tex. 2014); Helms, 2016 WL 1730737, at *6. The supreme court
has held that where a party elects to use the lodestar method, it must offer evidence of the time
expended on particular tasks. See Griffin, 442 S.W.3d at 255. That party must provide evidence
that is sufficiently specific to allow the factfinder to determine the amount of time spent on a
particular task and to decide whether that length of time was reasonable. El Apple I Ltd. v.
Olivas, 370 S.W.3d 757, 763 (Tex. 2012).
At trial, MCB’s attorney testified that she charged an hourly rate of three hundred dollars.
She further testified that six different attorneys at her firm worked on the case at different times.
She referenced each associate attorney by name, along with that attorney’s hourly rate. She
stated that these rates were reasonable “within the area.” She further stated that the total
attorney’s fees for the case is $80,620, which she described as reasonable for the instant case
“due to the time and labor and the novelty and difficulty” of it. MCB’s attorney also made
reference to an “extensive Motion for Summary Judgment” she and her associates prepared in
conjunction with the case as well as to time spent prior to filing suit in an effort to resolve the
matter without litigation. She described the time spent in general terms as “ten months of a lot of
research and writing.” She also requested attorney’s fees for an appeal to an intermediate
18
appellate court in the amount of $20,000 and an appeal to the Texas Supreme Court in the
amount of $30,000. In conclusion, she reiterated that the fees were “certainly reasonable and
necessary and appropriate” for the time spent on the case.
Based on our interpretation of the holdings from the Texas Supreme Court and the
holdings of our sister courts, we interpret MCB’s attorney’s reference to her and her associates’
respective hourly rates as an election to use the lodestar method. See Helms, 2016 WL 1730737,
at *7 (citing Long, 442 S.W.3d at 255) (“The affidavit supporting the Griffins’ request for
attorney’s fees used the lodestar method by relating the hours worked for each of the two
attorneys multiplied by their hourly rates for a total fee.”); see also City of Larado v. Monano,
414 S.W.3d 731, 736 (Tex. 2013) (holding that property owner chose to prove up attorney’s fees
using lodestar method by testifying that he arrived at his fee by multiplying the number of hours
worked by his hourly rate); Felix v. Prosperity Bank, No. 01-014-00997-CV, 2015 WL
9242048, at *3–4 (Tex. App.–Houston [1st Dist.] Dec. 17, 2015, no pet.) (mem. op.) (applying
El Apple I requirements where attorney seeking fees pursuant to Texas Civil Practice and
Remedies Code, Section 38.001 presented evidence of his hourly fee); Auz v. Cisneros, 477
S.W.3d 355, 359–60 (Tex. App.–Houston [14th Dist.] 2015, no pet.) (holding that El Apple I
requirements apply where attorney seeking fees pursuant to Texas Civil Practice and Remedies
Code, Section 38.001 presented evidence that he arrived at his total fee by multiplying his hourly
fee by number of hours he worked); but see In re E.B., No. 05-14-00295-CV, 2015 WL
5692570, at *2 (Tex. App.–Dallas Sept. 29, 2015, no pet.) (mem. op.) (in case brought pursuant
to family code, party who presented evidence of hourly fee and number of hours held to have
used traditional method, not lodestar method); Myers v. Sw. Bank, No. 02-14-00122-CV, 2014
WL 7009956, at *6 (Tex. App.–Fort Worth Feb. 5, 2015, pet. denied) (mem. op.) (although
attorney testified as to his hourly rate and number of hours worked, court characterized case as
“ordinary hourly-fee breach of contract case” not requiring time sheets or other detailed hour
calculations); Ferrant v. Graham Assocs., Inc., No. 02–12–00190–CV, 2014 WL 1875825, at
*7–8 (Tex. App.–Fort Worth May 8, 2014, no pet.) (mem. op.) (although attorney testified as to
his hourly rate and number of hours worked, court characterized case as “ordinary non-lodestar,
hourly-fee breach of contract case” not requiring hourly time records); Metroplex Mailing
Servs., LLC v. R.R. Donnelley & Sons Co., 410 S.W.3d 889, 900 (Tex. App.–Dallas 2013, no
19
pet.) (drawing distinction between cases governed by lodestar approach and “nonlodestar awards
of fees such as those made in breach of contract cases”).
Therefore, based on MCB’s election, it was required to introduce sufficient evidence to
allow the trial court to apply the lodestar method. See Helms, 2016 WL 1730737, at *7. MCB’s
attorney noted the complexity of this case, set forth her and her associates’ hourly rate, which she
characterized as reasonable and necessary, and asked for a total amount in attorney’s fees, which,
presumably, she calculated by multiplying the various hourly rates by the number of hours
worked. See id. MCB’s attorney’s testimony is generalized. See id. Counsel did not provide
testimonial evidence of the time expended on specific tasks. See id. Further, she presented no
documentation in support of her request for fees. See id. Without any evidence of the time spent
on specific tasks, the trial court did not have enough evidence to review the fee request in a
meaningful manner. See id.; see also Long, 442 S.W.3d at 255. Thus, we conclude that the trial
court was not provided sufficient evidence to calculate a reasonable fee. See Long, 442 S.W.3d
at 254–55; Helms, 2016 WL 1730737, at *7. Accordingly, we hold that the trial court’s award
of attorney’s fees to MCB amounted to an abuse of discretion. R2’s fourth issue is sustained in
part.11
DISPOSITION
We have overruled R2’s first, second, and third issues and overruled its fourth issue in
part. Having done so, we reverse the portion of the trial court’s judgment awarding attorney’s
fees to MCB and remand the cause to the trial court for further consideration of the issue of
MCB’s entitlement to attorney’s fees, if any. We affirm the remainder of the trial court’s
judgment.
JAMES T. WORTHEN
Chief Justice
Opinion delivered July 25, 2018.
Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.
(PUBLISH)
11
We do not reach the merits of R2’s alternative arguments in its fourth issue. See TEX. R. APP. P. 47.1.
20
COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT OF TEXAS
JUDGMENT
JULY 25, 2018
NO. 12-17-00328-CV
R2 RESTAURANTS, INC.,
Appellant
V.
MINEOLA COMMUNITY BANK, SSB,
Appellee
Appeal from the 402nd District Court
of Wood County, Texas (Tr.Ct.No. 2016-760)
THIS CAUSE came to be heard on the oral arguments, appellate record
and the briefs filed herein, and the same being considered, because it is the opinion of this court
that there was error in the judgment of the court below, it is ORDERED, ADJUDGED and
DECREED by this court that the portion of the trial court’s judgment awarding attorney’s fees to
MCB be reversed and the cause remanded to the trial court for further consideration of the
issue of MCB’s entitlement to attorney’s fees, if any, the remainder of the trial court’s judgment
is affirmed, and that the costs of this appeal are hereby assessed one-half against the Appellant,
R2 RESTAURANTS, INC., and one-half against the Appellee, MINEOLA COMMUNITY
BANK, SSB, in accordance with the opinion of this court; and that this decision be certified to
the court below for observance.
James T. Worthen, Chief Justice.
Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.