Steven Dryzer v. Charles and Karen Bundren ( 2014 )

In The
Court of Appeals
Seventh District of Texas at Amarillo
No. 07-12-00167-CV
STEVEN L. DRYZER, APPELLANT
V.
CHARLES BUNDREN AND KAREN BUNDREN, APPELLEES
On Appeal from the 393rd District Court
Denton County, Texas
Trial Court No. 2007-60118-393, Honorable Douglas M. Robison, Presiding
May 6, 2014
MEMORANDUM OPINION
Before QUINN, C.J., and CAMPBELL and PIRTLE, JJ.
Appellees and cross-appellants, Charles Bundren and wife Karen Bundren, sued
their former landlord, appellant and cross-appellee Steven Dryzer, for retaining their
security deposit. Trial was by jury and on a verdict favorable to the Bundrens the court
rendered judgment. Dryzer appeals, asserting reversible charge error. By cross-
appeal, the Bundrens seek additional attorney’s fees. Finding the trial court erred and
the error was not harmless we will reverse the judgment, dismiss as moot the Bundrens'
cross-appeal, and remand the cause to the trial court for a new trial.
Background
Charles Bundren and Steven Dryzer are practicing attorneys. In August 2002,
the Bundrens leased a house in Frisco, Texas, from Dryzer. As required by the parties’
lease agreement, the Bundrens posted a $15,000 security deposit with Dryzer.
Thereafter, the Bundrens and their children occupied the dwelling as their residence.
Acrimony soon developed between the Bundrens and Dryzer over issues relating
to the condition of the house. When the Bundrens vacated the property on March 31,
2005, Dryzer did not refund their security deposit. Rather, in a letter dated April 27,
2005, he provided them a written itemization of deductions from the security deposit.
According to Dryzer, the amount necessary to remedy damages caused by the
Bundrens, beyond normal wear and tear, exceeded the amount of the security deposit
by over two thousand dollars. Dryzer demanded payment of the excess sum within ten
days.
The Bundrens did not pay the monies demanded. Instead, appearing for himself
and his wife, Mr. Bundren filed suit against Dryzer in 2007. The Bundrens alleged
Dryzer breached the terms of the lease agreement by retaining their security deposit.
They further alleged his retention of the security deposit was in bad faith, violating
Texas Property Code § 92.109(a).1 As allowed by § 92.109(a), the Bundrens sought
1
The statute provides, “A landlord who in bad faith retains a security deposit in
violation of this subchapter is liable for an amount equal to the sum of $100, three times
the portion of the deposit wrongfully withheld, and the tenant’s reasonable attorney’s
fees in a suit to recover the deposit.” TEX. PROP. CODE ANN. § 92.109(a) (West 2007).
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recovery from Dryzer of three times the amount of the security deposit, plus $100, and
attorney’s fees.
The case was tried by jury during June 2011. By that time the Bundrens had
engaged an attorney. Dryzer was also represented by counsel. The evidence
portrayed the sharp disagreements and wrangling between the Bundrens and Dryzer
over the residence. During trial, in conferences outside the presence of the jury, the
court and the attorneys worked on the jury charge. Among the subjects they discussed
was the operation of the bad faith presumption authorized under specified facts by
Property Code § 92.109(d).2
The case was submitted to the jury on broad form questions. Two liability
questions supported with instructions inquired whether Dryzer retained the Bundrens’
security deposit in bad faith and whether he breached the parties’ lease agreement by
failing to refund a portion of the deposit. The jury answered both liability questions
affirmatively. It awarded the Bundrens $14,115 on the bad faith statutory cause of
action and an additional $14,115 under the common law breach of lease claim.
Concerning attorney’s fees, the jury awarded the Bundrens $12,000 for their attorney’s
trial representation but nothing for Mr. Bundrens’ self-representation. It also awarded
nothing for an appeal to a court of appeals and nothing for a petition for review before
the Supreme Court of Texas. The trial court granted in part the Bundrens’ post-trial
2
“A landlord who fails either to return a security deposit or to provide a written
description and itemization of deductions on or before the 30th day after the date the
tenant surrenders possession is presumed to have acted in bad faith.” TEX. PROP. CODE
ANN. § 92.109(d) (West 2007).
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motion to disregard certain jury findings and awarded conditional appellate fees of
$7,500 if appealed to a court of appeals and a like sum for a petition for review. The
trial court did not disturb the jury’s failure to award any attorney’s fees for Mr. Bundrens’
self-representation in the trial court.
The final judgment was signed in January 2012. It awarded the Bundrens
$42,4453 on their statutory bad faith cause of action, $14,115 for their breach of lease
claim, $12,000 as attorney’s fees for their attorney’s trial representation, $7,500 as
attorney’s fees conditioned on prevailing in the court of appeals, $7,500 as attorney’s
fees for prevailing on a petition for review in the supreme court, pre-judgment and post-
judgment interest, and costs of court. Dryzer’s motion for new trial was apparently
overruled by operation of law and this appeal followed.
Analysis
Dryzer argues, inter alia, the trial court wrongly instructed the jury on the
statutory presumption of bad faith because the evidence did not support its inclusion.
Specifically, he asserts on appeal, as in the trial court, the presumption did not arise
because he sent the Bundrens a letter describing and itemizing deductions before the
thirtieth day after the date they surrendered possession of the residence.
We first consider preservation of the claimed error. The Bundrens argue Dryzer
did not specifically object to the complained-of instruction and therefore waived any
complaint on appeal. The record demonstrates Dryzer timely and plainly made the trial
3
That is, three times the jury finding of $14,115 plus $100 as required by §
92.109(a).
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court aware of his complaint, that is, the statutory presumption did not arise because he
sent the Bundrens a letter describing and itemizing deductions before the thirtieth day
after the date the Bundrens surrendered possession of the residence. While the record
may not reflect an express ruling by the trial court on Dryzer’s presumption complaint
the charge actually submitted instructed the jury, “You are further advised that a
landlord who fails to return a security deposit on or before the 30th day after the date
the tenant surrenders possession is presumed to have acted in bad faith.” The trial
court’s decision to leave the presumption instruction in the charge establishes that
Dryzer’s complaint was at least implicitly overruled. TEX. R. APP. P. 33.1(a)(2)(A); see
State v. Colonia Tepeyac, Ltd., 391 S.W.3d 563, 568 (Tex. App.—Dallas 2012, no pet.)
(concluding in condemnation case that while the trial court did not expressly overrule
the State’s objection it did so implicitly by failing to change the jury charge at the
conclusion of the charge conference that included a lengthy discussion of the State’s
objection). Given the discussion of Dryzer’s complaint by the court and counsel, the
inclusion of the presumption instruction in the charge was surely no oversight. See
State Department of Highways and Public Transportation v. Payne, 838 S.W.2d 235,
239 (Tex. 1992). Dryzer sufficiently preserved his complaint as to the charge on the
presumption of bad faith.
As noted, Property Code § 92.109(d) provides, “A landlord who fails either to
return a security deposit or to provide a written description and itemization of deductions
on or before the 30th day after the date the tenant surrenders possession is presumed
to have acted in bad faith.” As the Dallas Court of Appeals has paraphrased it, “[b]ad
faith is presumed when a landlord fails to: (1) return the security deposit; or (2) provide
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a written description of the damages and an itemized list of all deductions within thirty
days after the tenant surrenders the premises.” Pulley v. Milberger, 198 S.W.3d 418,
428 (Tex. App.—Dallas 2006, pet. denied).
Among its general instructions the trial court charged the jury:
Bad faith implies deliberate intention to deprive the tenant of a lawfully due
refund. You are further advised that a landlord who fails to return a
security deposit on or before the 30th day after the date the tenant
surrenders possession is presumed to have acted in bad faith. The
landlord has the burden of proving by a preponderance of the evidence
that the retention of any portion of the security deposit was reasonable.
The landlord may rebut the presumption of bad faith by proving by a
preponderance of the evidence his honesty in fact in his conduct in
retaining the security deposit, or portions of the deposit.
Rule 277 of the Texas Rules of Civil Procedure states:
In all jury cases the court shall, whenever feasible, submit the cause upon
broad-form questions. The court shall submit such instructions and
definitions as shall be proper to enable the jury to render a verdict.
...
The court shall not in its charge comment directly on the weight of the
evidence or advise the jury of the effect of their answers, but the court’s
charge shall not be objectionable on the ground that it incidentally
constitutes a comment on the weight of the evidence or advises the jury of
the effect of their answers when it is properly a part of an instruction or
definition.
TEX. R. CIV. P. 277. A jury instruction is proper if it: (1) assists the jury; (2) accurately
states the applicable law; and (3) finds support in the pleadings and evidence.
Columbia Rio Grande Healthcare, L.P. v. Hawley, 284 S.W.3d 851, 855-56 (Tex. 2009).
Rule 277 affords the trial court considerable discretion in selecting necessary and
proper instructions. State Farm Lloyds v. Nicolau, 951 S.W.2d 444, 451-52 (Tex. 1997);
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GuideOne Lloyds Ins. Co. v. First Baptist Church of Bedford, 268 S.W.3d 822, 836 (Tex.
App.—Fort Worth 2008, no pet.).
We review for abuse of discretion a trial court’s decision to submit an instruction.
Shupe v. Lingafelter, 192 S.W.3d 577, 579 (Tex. 2006) (per curiam). A trial court
abuses its discretion when it acts arbitrarily, unreasonably, or without reference to any
guiding principles. Wal-Mart Stores, Inc. v. Middleton, 982 S.W.2d 468, 469-70 (Tex.
App.—San Antonio 1998, pet. denied). This includes failing to analyze or apply the law
correctly. McDaniel v. Yarbrough, 898 S.W.2d 251, 253 (Tex. 1995). The Supreme
Court of Texas explained over a century ago when considering alleged charge error,
“[w]e must look at the court’s charge as practical experience teaches that a jury,
untrained in the law, would view it.” Galveston, H. & S.A. Ry. Co. v. Washington, 94
Tex. 510, 63 S.W. 534, 538 (1901).
Reversal for charge error is not required if the error did not cause the rendition of
an improper judgment. TEX. R. APP. P. 44.1(a) (“No judgment may be reversed on
appeal on the ground that the trial court made an error of law unless the court of
appeals concludes that the error complained of . . . probably caused the rendition of an
improper judgment”); Star Enterprise v. Marze, 61 S.W.3d 449, 456 (Tex. App.—San
Antonia 2001, pet denied). We review the entire record to determine whether the
submission or refusal to submit an instruction probably resulted in an improper
judgment. Timberwalk Apartments Partners, Inc. v. Cain, 972 S.W.2d 749, 756 (Tex.
1998). An error in the charge relating to a contested critical issue is generally harmful.
Columbia Rio Grande Healthcare, 284 S.W.3d at 856. Further, an erroneous instruction
presents harmful error if the reviewing court is unable to determine whether the jury
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based its verdict on an invalid theory. United Enters. v. Erick Racing Enters., No. 07-
01-0467-CV, 2002 Tex. App. Lexis 9271, at *19 (Tex. App.—Amarillo Dec. 31, 2002,
pet. denied) (not designated for publication) (citing Crown Life Ins. Co v. Casteel, 22
S.W.3d 378, 388-89 (Tex. 2000)).
Because it was undisputed that Dryzer had timely satisfied the written description
and itemization requirement, we agree with Dryzer that the bad faith presumption had
no place in the case under the evidence presented and the jury should not have been
instructed regarding the presumption. Moreover, the instruction given the jury regarding
the presumption was not an accurate statement of the applicable law because it told the
jury that Dryzer would be presumed to have acted in bad faith merely by evidence that
he failed to return the deposit within thirty days of surrender of the premises. The
instruction ignored the provision of § 92.109(d) for a written description and itemization.
By so instructing the jury the trial court abused its discretion.
Looking then to harm, reversible error may result from the inclusion in the charge
of unnecessary jury instructions focusing the jury’s attention on issues not belonging in
the case. Middleton, 982 S.W.2d at 471 (citing Lemos v. Montez, 680 S.W.2d 798, 799
(Tex. 1984)). The error is harmful because “the court’s instructions become the law of
the case and are to be accepted by the jury as the guide on which they must rely.”
Middleton, 982 S.W.2d at 471 (citing Texas Power & Light Co. v. Lovinggood, 389
S.W.2d 712, 717 (Tex. Civ. App.—Dallas 1965, writ ref’d n.r.e.)). The erroneous
inclusion of the presumption instruction in the charge meant Dryzer not only had to
establish his reasonableness in withholding the deposit, but he was compelled also to
prove his honesty in fact. In the end, more likely than not, the jury of lay people based
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its finding that Dryzer acted in bad faith on the perceived weight of an instruction that
effectively informed them the trial court presumed Dryzer retained the Bundrens’
security deposit in bad faith because it was not refunded within thirty days. 4 On this
sharply disputed issue, we conclude the trial court’s error was harmful.
The harm from the erroneous bad faith instruction did not end with the jury’s
consideration of the first liability question. The second liability question asked if Dryzer
breached the lease by failing to refund any portion of the security deposit. According to
the bad faith instruction, the jury was to presume Dryzer’s bad faith because he did not
return the security deposit within thirty days. This tied to another general instruction
charging the jury “bad faith implies a deliberate intention to deprive the tenant of a
lawfully due refund.” The Bundrens’ attorney argued Dryzer breached the lease
because he did not refund the security deposit within thirty days. Buttressed by this
argument, the jury considered the breach of lease question directed by an erroneous
presumption that unless rebutted the Bundrens were “lawfully due” a refund of their
security deposit. We find more likely than not the erroneous instruction led to an
improper affirmative finding on the breach of lease question. See King v. Skelly, 452
S.W.2d 691, 696 (Tex. 1970) (explaining under harmless error review the standard is
not “but for”; rather, the determination of whether in reasonable probability the error
resulted in an improper verdict is a matter the appellate court’s judgment in light of the
4
And the argument of the Bundrens’ attorney reinforced the erroneous
instruction when he told the jury:
And the Judge makes it clear as to who has the burden of proof in this
case because it says in the Charge that he read to you that the landlord’s
presumed to have acted in bad faith if he keeps my client’s money. The
burden of proof is on the landlord to show that any retention of any part of
that security deposit was reasonable.
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entire record); W. Wendell Hall et al., Hall’s Standards of Review in Texas, 42 St.
Mary’s L. J. 3, 247 (2010) (test for reversible error is one of probability and not “but for”);
see also Ponder v. Texarkana Memorial Hosp., Inc., 840 S.W.2d 476, 479 (Tex. App.—
Houston [14th Dist.] 1991, writ denied) (explaining whether a particular error was
calculated to cause and probably did cause the rendition of an improper judgment is
necessarily a judgment call entrusted to the sound discretion and good sense of the
reviewing court made from an evaluation of the whole case).
Because we reverse the affirmative findings on the two liability questions, it is
axiomatic there can be no stand-alone recovery of damages. See Mitchell v. Bank of
Am., N.A., 156 S.W.3d 622, 627 (Tex. App.—Dallas 2004, pet. denied) (“It is well
established in Texas that no recovery is allowed unless liability has been established.
In the absence of liability, the question of damages becomes immaterial”). Moreover,
the trial court conditioned an award of attorney’s fees on the recovery of an amount of
money by the Bundrens. Since the trial court’s monetary awards are reversed, there
can be no corresponding award of attorney’s fees and the Bundrens’ cross-appeal
complaining of the dollar amounts of attorney’s fees is dismissed as moot.
Conclusion
Finding error and that it was not harmless, we reverse the judgment of the trial
court, dismiss the cross-appeal of the Bundrens as moot, and remand the cause to the
trial court for a new trial.
James T. Campbell
Justice
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