Eun Bok Lee v. Ho Chang Lee , 411 S.W.3d 95 ( 2013 )

Opinion issued August 20, 2013
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-12-00117-CV
———————————
EUN BOK LEE, Appellant and Cross-Appellee
V.
HO CHANG LEE, Appellee and Cross-Appellant
On Appeal from the 151st District Court
Harris County, Texas
Trial Court Case No. 2005-57998
OPINION
Appellee Ho Chang Lee sued his former landlord, appellant Eun Bok Lee,
for breach of contract, wrongful eviction, conversion, theft, and unjust enrichment
after the conclusion of a 12-year leasing relationship. After a jury trial, the trial
court entered judgment in favor of the tenant, but it did not award exemplary
damages that the tenant requested and the jury found. The landlord appeals,
primarily arguing that insufficient evidence supported the jury’s findings regarding
several of the tenant’s theories of liability. The tenant also appeals, challenging the
trial court’s failure to award exemplary damages in the judgment. We reverse the
portion of the trial court’s judgment which awarded the tenant treble statutory
damages for the amount of the security deposit, remand to the trial court for
recalculation of the award of prejudgment interest, and affirm the judgment in all
other respects.
Background
This appeal involves a dispute over whether, in the sale of a convenience-
store business and the lease of its premises, several pieces of equipment connected
to the store, including several large underground gasoline storage tanks, were sold
or merely leased. In 1993, pursuant to a Korean-language sales agreement, Eun
Bok Lee sold his business, “Lee’s Chevron,” to Ho Chang Lee. The parties also
entered into a separate English-language lease agreement for the premises. The
lease also had an addendum written in Korean.
The sales agreement was titled “Sales Contract.” At trial the parties
introduced different English translations of the contract, which differed as to
whether the contract transferred “ownership” or “possession” of items listed in the
2
contract. Both translations identified Eun Bok Lee and his wife, “owners and
operators of a gas station and convenience store known as Lee’s Chevron,” as
“sellers,” with Ho Chang Lee and his wife identified as “buyers.” According to the
buyer-tenant’s translation, the contract provides the following terms:
1. Name of Business: Lee’s Chevron’s assumed name shall be
changed to the Buyers.
2. Sales Price: $120,000, plus inventory. The inventory shall be
calculated as 30% less than retail price.
3. Items to Transfer of Ownership:
a. Inventory (as in the above, number 2)
b. Items:
Cashier Machine (one)
Air Compressor (one)
Ice Creame refrigerator (one)
Ice Cube refrigerator (one)
Dolly (one)
Fire Extinguisher (two)
Ladder (one)
Coffee Maker (one)
Filing Cabinet (one)
Walk in Cooler (one)
Ground Gasoline Tank (three)
4. Leased Items:
Ice Machine (one)
Soft Drink Dispenser (one)
Ice Cube Dispenser (one)
Credit Card Machine (one)
Alarm System (one)
Trash Dump (one)
3
5. The installation cost of Gasoline Nozzle Vacuum System that is
required by Texas or federal governments is expected to be
about $20,000.00. It is planned that the construction is planned
in November 1993. This cost will be paid by the Buyer;
however, if the cost exceeds $20.000.00, Sellers agreed to pay
Buyer the difference.
6. Payment: At the execution of the agreement, Buyer shall pay
$15,000.00, and the remaining balance of the sales price shall
be paid as soon as possible before the transfer of possession.
The cost of inventory shall constitute a loan at interest of 8%
per annum, and total amount due shall be paid in one or two
years. In the event that total balance is not paid, the business
shall not transfer.
7. Transfer: June 27, 1993, after business inventory shall be taken
before transfer.
The seller-landlord’s translation differs in that paragraph 3 of the contract states:
“Items identified for the transfer of the possession.” Also in the seller-landlord’s
version, paragraph 7 references “Transfer of the Possession,” rather than simply
“transfer.”
In accordance with this sales agreement, the buyer-tenant paid the seller-
landlord $120,000 plus an additional $20,000 to $30,000 more for the value of the
inventory. The buyer-tenant testified that he believed this purchase price included
purchase of the items listed under “Items,” specifically including the underground
storage tanks, because the landlord was worried about the risk of being responsible
for a leakage of the tanks. The seller-landlord testified that he believed the
$120,000 purchase price was paid to obtain the right to operate the business, but
4
that the listed items of equipment, such as the storage tanks and walk-in cooler,
were only temporarily being transferred to the possession of the buyer-tenant for
the duration of the lease.
The agreement for the lease of the premises provided for a six-year term and
monthly rent of $3,500. It provided that: “All alterations, additions, and
improvements, except trade fixtures, installed at expense of Tenant, shall become
the property of Landlord, and shall remain upon and be surrendered with the leased
premises as a part thereof on the termination of this lease.” The lease also
provided: “Adjustment to the rent, if any, for rent escalations, for percentage of net
rent, or for increases in building operation costs (including, but not limited to
insurance, custodial services, maintenance, and utilities) shall be set forth in an
attached addendum.”
The lease addendum, titled “Additional Agreement,” stated with respect to
the rent:
The rent shall be frozen for three years from the effective date of the
lease. Thereafter, the rent shall be adjusted once every year, taking
into account of increase in price index, property tax, insurance
premium, etc. and in commensurate with such increase.
The addendum set the amount of the security deposit at $3,500, to be paid within
one year of signing. The “owner” would purchase insurance for the building,
while the lessee was obligated to purchase the insurance for the “gas tanks, fixtures
and furniture, inventory, workmen’s compensation, liabilities and all others.”
5
Three years later, at the end of the period during which rent was set at
$3,500, the landlord sent the tenant a “Gas Station Rent” contract. The contract
provided that the monthly rent would increase from $3,500 to $4,300 a month,
“and other terms shall remain unchanged.” Although the tenant disagreed that the
rent increase reflected a change based on the consumer price index as agreed in the
lease addendum, he signed the new rent contract and paid the increased monthly
rent. At the end of the initial six-year lease term in 1999, the parties extended the
lease for an additional six years. During the second six-year term, the landlord
increased the rent three additional times, listing an inflation rate for the previous
year as the reason for each rent increase. For the year 2000, the landlord increased
the monthly rent to $4,532, based on a stated inflation rate of 5.4%. Rent was
increased to $4,650 in 2001, and it increased to $4,750 in 2002.
In spring 2005, near the conclusion of the final lease term, the tenant’s son
and the landlord’s son agreed to arrange a transfer of the ownership of the business
back to the landlord and his son. The parties agreed to hire a professional to value
the remaining inventory in the store. They also agreed to meet to transfer the
possession of the store on May 31, although the final rent period was from May 15
to June 15. As part of this process, the tenant expected to receive payment for the
items at the store, including those items he believed he had purchased in the sales
contract.
6
On May 31, 2005, the landlord’s son proposed to transfer possession of the
store in exchange for a check for the value of the inventory, which was assessed at
a wholesale value of $18,000. The tenant’s son refused the check, however,
because he insisted that the landlord owed an additional $100,000 for the gasoline
tanks and other equipment listed in the sales contract. The tenant’s son presented a
copy of the original sales contract, explaining that the tenant expected to be paid
the value of the gasoline storage tanks and other equipment in addition to the
inventory before he would turn over the business. The landlord’s son was not
prepared to pay this much, and he suggested that their fathers meet to resolve the
disagreement. The tenant’s son then left. At that time, the landlord changed the
locks to the store, although he had not told the tenant in advance he would do so.
Thus without paying for the inventory or any other items, the landlord and his son
took possession of the premises, and they canceled the regular order to refill the
gas tanks.
Thereafter, the landlord and the tenant met, along with their sons. The
tenant insisted that the gasoline tanks belonged to him, and he demanded money
for them because he believed the original price he paid for the business of
$120,000 included that equipment. The landlord refused to pay because he
believed that he had not sold the equipment, such as the tanks and the walk-in
cooler, but that he would receive those items back at the end of the lease.
7
After the unsuccessful meeting, the tenant’s lawyer sent a letter informing
the landlord that the tenant protested the lock-out and early termination of the
lease. In the letter, the tenant’s lawyer noted “that the parties have agreed to apply
the security deposit of $3,500 to be applied toward the last month’s rent,” but the
landlord “sent no notice of termination of the lease agreement or a notice to vacate
the premises.” The tenant demanded immediate re-entry, complained that the
landlord charged rent in excess of the consumer price index rate for years, and
demanded payment for the overcharged rent and the equipment listed in the 1993
sales contract. In response, the landlord sent a letter to the tenant demanding
$10,151.61 in payment for damages to the store and unpaid rent from May 15 to
May 31, reduced by the amount of the security deposit. He also asked for the
tenant to disconnect the utility services to the store. Unless the tenant paid the
requested sum, the landlord threatened to “liquidate [the tenant’s] inventory and
asset[s] appropriately and send him the liquidation report within 60 days after
June 28, 2005.”
The landlord and his son left the store closed until July 1, in part because
they were unable to obtain a license to sell the beer inventory. During this period,
the store’s power was turned off, damaging the perishable inventory. Ultimately,
the landlord never paid the tenant for the inventory, and the tenant never collected
the inventory from the store. The landlord’s son stored some of it, and then,
8
sometime before reopening the store, the remaining inventory was “liquidated.”
Once the store was reopened in July, the landlord and his son used the underground
gasoline tanks, the walk-in cooler, and the vapor recovery system (referenced in
the sales agreement as the “Gasoline Nozzle Vacuum System”) to operate the
business.
The tenant sued the landlord. In his amended pleadings, the tenant asserted
numerous causes of action, including breach of contract, conversion, theft, unjust
enrichment, wrongful eviction, fraud, and promissory estoppel. The landlord
counterclaimed for breach of the lease agreement. At trial, the landlord introduced
evidence in support of his contention that he owned the gasoline tanks. From 2001
to 2005, the landlord was registered as the “owner/operator” of the tanks with the
Texas Commission of Environmental Quality’s petroleum storage tank program,
which records self-certification of the tanks as being “compliant with all technical
and administrative standards for fuel delivery.” The landlord also introduced a
copy of a property tax form that the tenant submitted to the Harris County
Appraisal District in 1994, showing that the tenant did not specifically list the
gasoline tanks as part of his property, only “store fixtures” and the “vapor recovery
system.”
At trial, the jury found that the landlord overcharged for rent from 2001 to
2005 and wrongfully retained the security deposit, wrongfully evicted the tenant by
9
locking him out, converted the tenant’s property, committed theft, and unjustly
enriched himself at the tenant’s expense. The jury also determined that the tenant
was entitled to the value of his security deposit and the amount of overcharged rent
as damages for the contract claim, and one-half month’s rent as actual damages for
wrongful eviction. In three separate questions corresponding to the causes of
action for conversion, theft, and unjust enrichment, the jury awarded identical
amounts of damages for fourteen separate items. The jury also awarded damages
for overcharged rent under the unjust enrichment cause of action. Altogether, the
jury’s damages findings were as follows:
Security deposit $3,500.00
Overcharged rent $16,968.00
Actual damages for wrongful eviction $5,000.00
Month’s Rent for wrongful eviction $2,375.00
Inventory (grocery) $18,810.00
Inventory (gasoline) $2,249.60
Underground Gasoline Tank (3) $80,000.00
Ice Maker $2,150.00
Ice Storage $500.00
ATM Machine $1,500.00
Single Beer Container $1,300.00
Coffee Maker $200.00
Ice Cream Freezer $350.00
Vapor Recovery System $10,000.00
Walk-in Cooler $7,500.00
Ginseng Energy Drink $1,400.00
Decorations for sale (in boxes) $2,100.00
Total $155,902.60
10
The jury also determined that the tenant was entitled to recover attorney’s fees and
$450,000 in exemplary damages.
Based on these findings, the trial court entered judgment in the tenant’s
favor. The damages award listed $152,402.60 as “principal amount due,” which is
the same amount as the total of all the jury’s damages, minus the amount for the
security deposit. The judgment separately awarded $10,500 in “statutory damages
on failure to return security deposit.” Additionally, it awarded $50,263.51 as
prejudgment interest on the non-exemplary damages and $55,000.00 in attorney’s
fees. The judgment did not specify the theory of liability on which it awarded
damages, and it did not award exemplary damages. The landlord then timely filed
this appeal. The tenant filed a cross-appeal, contesting the trial court’s failure to
enter an award for exemplary damages.
Analysis
In his appellant’s brief, the landlord states that the trial centered on a “single
disputed ownership issue”: whether the tenant purchased the gas station’s
equipment, including the gasoline storage tanks, when he purchased the business
from the landlord, or whether he merely obtained temporary possession of those
items. Although he relies upon the 1993 sales contract to frame the dispute, the
landlord nevertheless does not dispute on appeal that there was sufficient evidence
in the form of the parties’ differing translations and testimony about the meaning
11
of the Korean-language sales contract for the jury to conclude that the tenant had
purchased the property listed in the sales agreement. Instead, the landlord
challenges the legal sufficiency of the evidence to support the jury findings on
breach of contract, wrongful eviction, conversion, theft, unjust enrichment, and
damages for those claims.
When a party attacks the legal sufficiency of an adverse finding on which he
did not have the burden of proof, he must show that there is no evidence to support
the adverse finding. O’Brien v. Daboval, 388 S.W.3d 826, 837–38 (Tex. App.—
Houston [1st Dist.] 2012, no pet). In conducting a legal-sufficiency review, we
credit favorable evidence if a reasonable factfinder could and disregard contrary
evidence unless a reasonable factfinder could not. City of Keller v. Wilson, 168
S.W.3d 802, 827 (Tex. 2005). We consider the evidence in the light most
favorable to the finding and indulge every reasonable inference that would support
it. Id. at 822. We will sustain a no-evidence point only if: (1) the record reveals a
complete absence 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 conclusively establishes the opposite of the vital fact. Id. at 810;
Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). If more
than a scintilla of evidence exists to support the finding, the legal sufficiency
12
challenge fails. Haggar Clothing Co. v. Hernandez, 164 S.W.3d 386, 388 (Tex.
2005) (citing Formosa Plastics Corp. USA v. Presidio Eng’rs & Contractors, Inc.,
960 S.W.2d 41, 48 (Tex. 1998)).
The factfinder is the sole judge of the credibility of witnesses and the weight
to be given their testimony; the factfinder is free to choose to believe one witness
over another. Pitts & Collard, L.L.P. v. Schechter, 369 S.W.3d 301, 312 (Tex.
App.—Houston [1st Dist.] 2011, no pet.) (citing Golden Eagle Archery, Inc. v.
Jackson, 116 S.W.3d 757, 761 (Tex. 2003)). It is for the factfinder to resolve
conflicting evidence, and we may not impose our own opinion in opposition to the
factfinder’s implied credibility determinations. Id. If the evidence at trial would
enable reasonable and fair-minded people to differ in their conclusions, then jurors
must be allowed to do so. City of Keller, 168 S.W.3d at 822; see also King Ranch
v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003).
When construing a contract, our primary concern is to ascertain and give
effect to the intent of the parties as objectively manifested in that contract. Frost
Nat’l Bank v. L&F Distribs., Ltd., 165 S.W.3d 310, 311–12 (Tex. 2005) (per
curiam). Whether a contract is ambiguous is a question of law, which we review
de novo. Pitts & Collard, 369 S.W.3d at 313; see also Coker v. Coker, 650
S.W.2d 391, 394 (Tex. 1983); Tellepsen Builders, L.P. v. Kendall/Heaton Assocs.,
Inc., 325 S.W.3d 692, 696 (Tex. App.—Houston [1st Dist.] 2010, pet. denied). If
13
the words used in the written instrument can be given a certain or definite legal
meaning or interpretation, then it is not ambiguous and we will construe the
contract as a matter of law. Toler v. Sanders, 371 S.W.3d 477, 480 (Tex. App.—
Houston [1st Dist.] 2012, no pet.) (citing Coker, 650 S.W.2d at 393). Courts must
enforce an unambiguous contract as written. Id. at 480–81; Tellepsen Builders,
325 S.W.3d at 696.
A contract is ambiguous if, after applying established rules of construction,
its meaning is uncertain and doubtful or the writing is reasonably susceptible to
more than one meaning. DeWitt Cnty. Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 100
(Tex. 1999); Coker, 650 S.W.2d at 393. A writing is not ambiguous merely
because it lacks clarity or because a disagreement in interpretation arises. DeWitt
Cnty. Elec. Coop., 1 S.W.3d at 100; Tellepsen Builders, 325 S.W.3d at 696. In
determining whether a contract is ambiguous, courts construe and harmonize all
provisions of the contract to discern the parties’ intent. Coker, 650 S.W.2d at 393;
Tellepsen Builders, 325 S.W.3d at 695. This inquiry also considers the context of
the agreement of the parties and the circumstances present when the agreement
arose. Friendswood Dev. Co. v. McDade & Co., 926 S.W.2d 280, 282 (Tex.
1996). If the contract is ambiguous as a matter of law, only then is parol evidence
of the parties’ interpretation of the contract admissible. Pitts & Collard, 369
S.W.3d at 313.
14
I. Breach of contract
The jury found that the landlord had breached the lease agreement,
determining that the tenant was owed compensation of $16,968 for overcharged
rent between 2001 and 2005 and $3,500 for wrongful retention of the security
deposit. The landlord contends that there is conclusive evidence negating these
findings.
A. Overcharged rent
First, the landlord argues that it is undisputed that the tenant agreed to the
rent increases because the tenant agreed to extend the lease in 1999 for an
additional six-year term, knowing that rent was set at $4,300 a month since 1996,
and the subsequent invoices the landlord sent to the tenant all included calculations
for yearly consumer price index increases.
The 1993 lease agreement provided that the monthly rent, which was
originally set at $3,500, may be adjusted “as set forth in the attached addendum.”
The addendum stated that after an initial three-year period during which time the
amount of rent was “frozen,” “the rent shall be adjusted once every year, taking
into account of increase in price index, property tax, insurance premium, etc. and
in commensurate with such increase.” After increasing rent to $4,300 in 1996
pursuant to the parties’ written agreement, the landlord increased rent to $4,532 in
the year 2000, based on a consumer price index increase of 5.4% over a period of
15
two years; to $4,650 a month in the year 2001, based on a rate of 3.7%; and to
$4,750 from 2002 to 2005, based on a rate of 3.2%.
There were several pieces of evidence introduced to challenge the landlord’s
rent adjustments under the terms of the lease addendum. The tenant introduced a
Bureau of Labor Statistics consumer price index report, showing that the landlord’s
listed inflation rates in support of his increases from 2001 to 2003 used a different
consumer price index rate than the official consumer price index rates for either the
nation or the Houston area. The landlord’s own testimony indicated that the rent
increases were not always calculated under the terms of the addendum. When
asked whether any of the increases in the rent amount reflected increase in the
consumer price index, property taxes, or insurance premiums—the factors
authorized under the lease addendum—the landlord only stated that he did not
“recall exactly,” but “there was some increase” in those factors.
From this evidence introduced at trial, the jury could have found that the
landlord unilaterally increased rent without proper reference to the lease
addendum. The purported reliance upon the consumer price index to justify rent
increases was disputed by evidence about the appropriate consumer price index
rates, and the landlord’s notices did not identify any other basis for the increases.
Based on the conflicting evidence about the proper consumer price index and the
16
landlord’s determinations, we conclude that some evidence supported the jury’s
determination that the landlord had overcharged rent.
B. Wrongful retention of security deposit
Second, the landlord argues that it was undisputed that the parties had agreed
to apply the security deposit to the last month’s rent. He argues that there was no
dispute regarding these facts or ambiguity to be resolved in the lease agreements,
so there was no evidence of breach of contract.
The lease agreement provides that “Refund [of the security deposit] shall be
made upon performance of this lease agreement by Tenant, minus any assessments
or damages.” The tenant’s son testified that the tenant never received the security
deposit back from the landlord. He also testified that they did not believe that the
tenant was obligated to pay the last month’s rent because they were wrongfully
“kicked out” on May 31 and were still disputing the ownership of the gas station
equipment when the final rent payment was due on June 15. This was evidence
from which the jury could reasonably conclude that the tenant was entitled to the
security deposit, which the landlord could not apply to the rent period from May 15
to June 15 when no rent was necessarily due for that period.
The tenant’s lawyer stated in a letter, dated June 9, 2005, that “[i]t appears
that the parties have agreed to apply the security deposit of $3,500.00 to be applied
to the last month’s rent.” Under the circumstances of the landlord’s lockout in the
17
middle of the rent period without paying for the inventory and the disagreement
over the ownership of the equipment, however, this remark in a letter is not
conclusive proof that the landlord could retain the security deposit to negate the
jury’s finding to the contrary. The factfinder is the sole judge of the credibility of
witnesses and the weight to be given their testimony, and may resolve any
conflicting evidence. See Golden Eagle, 116 S.W.3d at 761. Accordingly, there
was sufficient evidence to support the jury’s finding that the landlord breached his
contractual duty to return the security deposit at the end of the lease. We therefore
overrule the landlord’s points of error on the sufficiency of the evidence supporting
the award for breach of contract.
II. Statutory damages for withheld security deposit (Property Code
§ 93.011)
Although the tenant had not sought statutory damages in his pleadings or
included an instruction for them in the jury charge, in his motion for entry of
judgment he requested additional damages based on section 93.011 of the Texas
Property Code. That section provides that a “landlord who in bad faith retains a
security deposit” is liable for “three times the portion of the deposit wrongfully
withheld.” TEX. PROP. CODE ANN. § 93.011(a) (West 2007). The trial court
awarded the triple damages in its judgment. The landlord argues that the trial court
erred in awarding these damages because (1) the violation of the property code was
18
not pleaded, (2) the jury did not make a finding of bad faith as required by the
statute, and (3) the issue was not tried by consent.
The purpose of pleadings is to give an adversary notice of claims, defenses,
and the relief sought. Chevron Phillips Chem. Co. v. Kingwood Crossroads, L.P.,
346 S.W.3d 37, 64 (Tex. App.—Houston [14th Dist.] 2011, pet. denied). A trial
court may not grant relief on a theory of recovery not sufficiently stated in the
party’s pleadings or tried by consent. Id.; Prize Energy Res., L.P. v. Cliff Hoskins,
Inc., 345 S.W.3d 537, 567 (Tex. App.—San Antonio 2011, no pet.); see also TEX.
R. CIV. P. 301 (“judgment of the court shall conform to the pleadings”). Here, the
issue of section 93.011 statutory damages for wrongful retention of the security
deposit in bad faith was not raised in either party’s pleadings. Thus, we must
determine whether the issue was tried by consent.
An issue is tried by consent when both parties present evidence on an issue
and the issue is developed during trial without objection. Ingram v. Deere, 288
S.W.3d 886, 893 (Tex. 2009); see TEX. R. CIV. P. 67 (issues not raised in pleadings
that are tried by consent are “treated in all respects as if they had been raised in the
pleadings”). Trial by consent is intended for the exceptional case in which it
appears clearly from the record as a whole that the parties tried an unpleaded
issue—it should be applied with care and never in a doubtful situation. Compass
Bank v. MFP Fin. Servs., Inc., 152 S.W.3d 844, 854 (Tex. App.—Dallas 2005, pet.
19
denied). “When evidence relevant to both a pleaded and an unpleaded issue has
been admitted without objection, the doctrine of trial by consent should not be
applied unless clearly warranted.” Id. (relying on Johnston v. McKinney Am., Inc.,
9 S.W.3d 271, 281 (Tex. App.—Houston [14th Dist.] 1999, pet. denied)). The trial
court has broad discretion in determining whether an unpleaded issue was tried by
implied consent, but because implied consent is the exception and not the rule, it
should not be allowed in doubtful cases. Id. at 855.
Although the jury charge included a question of whether the landlord had
“wrongfully retained” the security deposit, section 93.011 damages are also
predicated on a determination that the landlord retained the deposit “in bad faith.”
TEX. PROP. CODE ANN. § 93.011(a). The statute applies a presumption of bad faith
for this purpose if the landlord either fails “to return a security deposit or to
provide a written description and itemized list of deductions on or before the 60th
day after the date the tenant surrenders possession.” Id. § 93.011(d). The landlord
may present evidence to rebut the presumption of bad faith, such as by providing a
written and itemized schedule of damages. See Lone Starr Multi-Theatres, Ltd. v.
Max Interests, Ltd., 365 S.W.3d 688, 701 (Tex. App.—Houston [1st Dist.] 2011,
no pet.).
This bad-faith issue was not tried by the parties. An issue is “not tried
merely by the hearing of testimony thereon.” Ingram, 288 S.W.3d at 893 (quoting
20
Sage St. Assocs. v. Northdale Constr. Co., 863 S.W.2d 438, 445–46 (Tex. 1993)).
Instead, the evidence on the issue must be developed under circumstances
indicating both parties understood that the issue was in the case. Prize Energy, 345
S.W.3d at 567; see also Ingram, 288 S.W.3d at 892–93 (issue tried by consent
when both parties presented evidence at trial on it and it was submitted in the jury
charge). Here, there is a dearth of evidence that the parties tried the issue of
whether the landlord retained the security deposit in bad faith. No testimony was
elicited on whether his actions were in bad faith, as opposed to a good-faith
disagreement about the interpretation of the parties’ agreements. The landlord also
did not present evidence to attempt to rebut the presumption of bad faith.
Accordingly, we sustain the landlord’s point of error on the recovery of
treble statutory damages for the unpleaded and untried statutory cause of action.
Instead of recovering $10,500 for this claim, the judgment should be reduced by
$7,000 in actual damages, such that the tenant recovers the $3,500 value of the
security deposit with no trebling of such damages.
III. Wrongful eviction
The jury found that the landlord wrongfully evicted the tenant by locking
him out. The landlord challenges this finding because there was “undisputed
evidence that the tenant Lee was delinquent in paying the rent.” The jury charge
instructed that the landlord may prevent a tenant from entering the leased premises
21
if the exclusion results from “changing the door locks of a tenant who is delinquent
in paying at least part of the rent.” The landlord also argues that there is
insufficient evidence to support the amount of wrongful eviction damages found by
the jury—$5,000 in actual damages and $2,375 in rent—and that the award of both
actual damages and rent damages is an impermissible double recovery.
Contrary to the landlord’s contention, the evidence was not undisputed that
the last month’s rent was delinquent when the landlord locked out the tenant. The
tenant’s son, who operated the gas station for his father, testified that the last
month’s rent would have been due on June 15, and that it was unclear whether the
tenant was required to pay that rent because the store had been occupied by the
landlord since May 31. No evidence was presented showing that the tenant was
delinquent before May 31. Instead, both the landlord and the tenant’s son testified
that the parties had agreed to attempt to an orderly transfer of ownership of the
business during May. During this time an inventory was taken, and the tenant’s
son testified that he spent some of the time training the landlord’s son to operate
the business. The parties agreed that they would meet on May 31 for the landlord
to pay the tenant for the value of the inventory, but when the dispute arose the
landlord changed the locks without paying the tenant. When the landlord changed
the locks, he did not place written notice on the door “stating the name and the
address or telephone number of the individual or company from which the new key
22
may be obtained,” as required by the section 93.002(f) of the Texas Property Code,
which governs a landlord’s lockout of a commercial tenant. TEX. PROP. CODE
ANN. § 93.002 (West 2007). Viewing this evidence in the light most favorable to
the jury’s finding, see City of Keller, 168 S.W.3d at 822, we conclude there was
sufficient evidence to support the finding that the landlord wrongfully evicted the
tenant.
Regarding damages, the tenant’s son testified that the “take-home” profit for
a month of business at the time of the lockout was $10,000. The landlord’s
attorney did not cross-examine the tenant’s son on this issue or offer evidence
controverting this estimate of the store’s profits. This testimony was evidence
from which reasonable jurors could determine that the wrongful exclusion from the
store deprived the tenant and his family of $5,000, or half of a month’s profits. See
French v. Moore, 169 S.W.3d 1, 13 (Tex. App.—Houston [1st Dist.] 2004, no pet.)
(tenant’s uncontroverted testimony that he was required to find another storage
facility to store his “household contents” and request of $5,000 in damages
sufficient to support the jury’s award of $5,000 under TEX. PROP. CODE ANN.
§ 93.002). Again crediting evidence in the light most favorable to the jury’s
finding, we conclude that there was sufficient evidence to support the jury’s
finding of actual damages in the amount of $5,000.
23
The tenant’s recovery for both rent and actual damages is not a double
recovery, but instead it is expressly authorized by statute. A tenant who was
improperly excluded from the premises may “recover from the landlord an amount
equal to the sum of the tenant’s actual damages, one month’s rent or $500,
whichever is greater, reasonable attorney’s fees, and court costs, less any
delinquent rents or other sums for which the tenant is liable to the landlord.” TEX.
PROP. CODE ANN. § 93.002(g)(2). By this provision, the tenant was authorized to
recover the sum of both the amount of actual damages and one month’s rent. We
overrule the landlord’s complaints on the issue of wrongful eviction.
IV. Damages for equipment and inventory
The jury found that the landlord converted the property of the tenant and
determined the amount of damages based on the value of the inventory and
equipment, including the gasoline storage tanks, vapor recovery system, and walk-
in cooler. The jury also found that the landlord had committed theft, and it
assessed damages based on the value of the same items. The landlord challenges
the sufficiency of the evidence supporting these findings, specifically contending
that the lease agreement returned ownership of the property to him after the
tenant’s abandonment of the gas station. The landlord also contends that there was
conclusive evidence that the items for which the jury awarded conversion and theft
damages were not personal property. Additionally, the landlord argues that
24
damages could not be awarded for several of the converted items because the
award for the value of several of the fixtures, such as the gasoline tanks and walk-
in cooler, must be reduced by the cost of removing the items from the property.
Both the conversion and theft causes of action require that the plaintiff
establish that the property at issue is personal property, rather than real property
attached to the land. Conversion is the wrongful assumption and exercise of
dominion and control over the personal property of another to the exclusion of, or
inconsistent with, the owner’s rights. Burns v. Rochon, 190 S.W.3d 263, 267–68
(Tex. App.—Houston [1st Dist.] 2006, no pet.) (citing Waisath v. Lack’s Stores,
Inc., 474 S.W.2d 444, 447 (Tex. 1971)). To establish a claim for conversion, a
plaintiff must prove that (1) the plaintiff owned or had possession of the property
or entitlement to possession; (2) the defendant unlawfully and without
authorization assumed and exercised control over the property to the exclusion of,
or inconsistent with, the plaintiff’s rights as an owner; (3) the plaintiff demanded
return of the property; and (4) the defendant refused to return the property. Id. at
268. A person “who commits theft is liable for the damages resulting from the
theft.” TEX. CIV. PRAC. & REM. CODE ANN. § 134.003 (West 2011). A person
commits theft if he unlawfully appropriates property with intent to deprive the
owner of it. TEX. PENAL CODE ANN. § 31.03(a) (West Supp. 2012); see TEX. CIV.
PRAC. & REM. CODE ANN. § 134.002(2) (theft is defined by the Penal Code). To
25
appropriate property means “to acquire or otherwise exercise control over property
other than real property,” or to transfer title to property to one other than the
property’s owner. TEX. PENAL CODE ANN. § 31.01(4).
A. Abandoned property
The landlord argues that insufficient evidence supported the jury’s
conversion and theft findings because there was undisputed evidence that the
tenant abandoned the property. A landlord may remove and store any property of a
tenant that remains on premises that are abandoned, and if he provides notice to the
tenant, the landlord may dispose of the stored property if the tenant does not claim
it within 60 days after the date the property is stored. TEX. PROP. CODE ANN.
§ 93.002(e). The lease agreement similarly provides:
If Tenant abandons the premises or otherwise defaults in the
performance of any obligations or covenants herein, Landlord may
enforce the performance of this lease in any manner provided by law.
This lease may be terminated at Landlord’s discretion if such
abandonment or default continues for a period of 10 days after
Landlord notifies Tenant of such abandonment or default and of
Landlord’s intention to declare this lease terminated. . . . Thereafter,
Landlord or its agents shall have the right, without further notice or
demand, to enter the leased premises and remove all persons and
property without being deemed guilty of trespass and without waiving
any other remedies for arrears of rent or breach of covenant.
The landlord reads this provision to give him a superior right of possession in the
items remaining on the premises because it is undisputed that the tenant received
26
the landlord’s June 15 letter declaring that the lease was terminated and telling the
tenant to recover his property.
The landlord’s interpretation ignores that it was disputed whether the tenant
had abandoned the property or premises in the first place. As discussed above,
there was sufficient evidence to support the jury’s finding that rather than
abandoning the premises, the tenant was wrongfully excluded from it. Although
the landlord is correct that he had the right to dispose of the property 60 days after
storing it, he testified that he “liquidated” the inventory or let it perish “within 60
days.” Furthermore, in his June 15 letter the landlord stated that he would only
open the store and “allow” the tenant to take his inventory and “other assets” after
he received a check from the tenant for $10,151.61. The amount of money the
landlord demanded included charges for equipment, such as an ice cream freezer
and cashier machine, which the tenant argued belonged to him, and also included
disputed charges for rent. Based on this evidence, reasonable jurors could infer
that the tenant had not “abandoned” the property or premises, but instead had been
excluded from the premises and prevented from obtaining the property that was
locked inside. Accordingly, sufficient evidence supported the jury’s findings that
the landlord had converted or stolen the tenant’s personal property.
27
B. Trade fixtures
Even if the property was not abandoned, the landlord argues that several of
the pieces of equipment—the gas tanks, walk-in cooler, and vapor recovery
system—could not be subject to a conversion or theft claim as a matter of law
because those items were not personal property, but were instead fixtures. When
property is attached to realty and cannot be removed without materially damaging
the property, it loses its character as personal property and becomes part of the
realty. Loredo v. State, 130 S.W.3d 275, 282 n.3 (Tex. App.—Houston [14th
Dist.] 2004, pet. ref’d); Houston Bldg. Serv., Inc. v. Am. Gen. Fire & Cas. Co., 799
S.W.2d 308, 311 (Tex. App.—Houston [1st Dist.] 1990, writ denied). Generally,
whether property has become a fixture (which is part of the realty) rather than
personal property is a fact question to be determined based on objective
manifestations of intent in affixing the property to the realty. Logan v. Mullis, 686
S.W.2d 605, 608 (Tex. 1985); Trenolone v. Cook Exploration Co., 166 S.W.3d
495, 499 (Tex. App.—Texarkana 2005, no pet.). But undisputed, objective
evidence of intent to attach the property to realty will establish whether the
property is realty or personalty as a matter of law. Logan, 686 S.W.2d at 608;
Houston Bldg. Serv., 799 S.W.2d at 311; see also C.W. 100 Louis Henna, Ltd. v. El
Chico Rests. of Tex., L.P., 295 S.W.3d 748, 755 (Tex. App.—Austin 2009, no
28
pet.); Harris Cnty. Flood Control Dist. v. Roberts, 252 S.W.3d 667, 670–71 (Tex.
App.—Houston [14th Dist.] 2008, no pet.).
A trade fixture is an item that the tenant annexes to realty to enable the
tenant to carry on its business. El Chico Rests., 295 S.W.3d at 755 (quoting
Reames v. Hawthorne-Seving, Inc., 949 S.W.2d 758, 761 (Tex. App.—Dallas
1997, pet. denied)). A tenant generally may remove and take away trade fixtures at
the end of the lease, unless there is a contractual term to the contrary. Alexander v.
Cooper, 843 S.W.2d 644, 646 (Tex. App.—Corpus Christi 1992, no writ); Neely v.
Jacobs, 673 S.W.2d 705, 707–08 (Tex. App.—Fort Worth 1984, no writ). Here,
the lease agreement provided that trade fixtures would not become the property of
the landlord at the termination of the lease. A trade fixture does not lose its
character as personalty because the intent of its annexation is to further the
purposes of the tenant’s trade, not to improve the realty. See Sonnier v. Chisholm-
Ryder Co., 909 S.W.2d 475, 479 (Tex. 1995); Neely, 673 S.W.2d at 707–08. A
trade fixture must be removable without permanent or material injury to the
premises. Sonnier, 909 S.W.2d at 479; El Chico Rests., 295 S.W.3d at 755.
The tenant presented some evidence that the underground gasoline tanks
were removable, but the landlord presented undisputed evidence that he had
installed the gasoline tanks with the intent to affix them to the premises, so they
could not be the tenant’s trade fixtures. The tenant’s son testified that it was
29
“possible to dig up the underground tank[s]” and get them “in hand,” although the
removal would be expensive. But he never disputed that the landlord had installed
the gasoline tanks. The landlord undisputedly installed the tanks and testified that
he intended they become part of the realty when he did so. See Sonnier, 909
S.W.2d at 479 (the intention of the owner who causes the property to be annexed to
the realty is “critical” in determining whether the property is a fixture). The
objective manifestation of this intent was that he placed those tanks, which are 25
feet long and 15 feet wide, underground.
As for the other pieces of installed equipment, no evidence was presented
that the walk-in cooler or vapor recovery system could be removed without
damaging the premises or that the parties’ intent was that it would be a removable
trade fixture. In fact, the only evidence offered on the subject of removing the
vapor recovery system suggested the opposite. The tenant’s son testified that he
“was not able to remove that system from that premises” himself. He also testified
that he did not know what the system looks like, because it was buried
underground when it was installed. When asked whether it was his intention to
remove the system at the expiration of the lease, the tenant’s son said “No, sir, I
never thought about that.” As for the walk-in cooler, the landlord testified that he
installed it and the gasoline tanks as permanent parts of the premises that would
return to him at the expiration of the lease. No evidence was offered that the walk-
30
in cooler could be removed without damaging the building; instead, the landlord
testified that separating the walk-in cooler from the building would turn it into
“scrap metal.”
Accordingly, there insufficient evidence to support the jury’s implied
finding that the gasoline tanks, walk-in cooler, and vapor recovery system were
items of personal property that could be subject to a conversion or theft claim.
But, because the jury determined that the value of these items of equipment was
also recoverable under the theory of unjust enrichment, we turn to consider
whether the tenant could recover the value of these items under that theory of
liability.
C. Unjust enrichment
Unjust enrichment occurs when a person has wrongfully secured a benefit or
has passively received one which it would be unconscionable to retain. Tex.
Integrated Conveyor Sys., Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d
348, 367 (Tex. App.—Dallas 2009, pet. denied). A person is unjustly enriched
when he obtains a benefit from another by fraud, duress, or the taking of an undue
advantage. Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41
(Tex. 1992). When a person has been unjustly enriched by the receipt of benefits
in a manner not governed by contract, the law implies a contractual obligation
upon that person to restore the benefits to the plaintiff. Burlington N. R.R. Co. v.
31
Sw. Elec. Power Co., 925 S.W.2d 92, 97 (Tex. App.—Texarkana 1996), aff’d sub
nom., Sw. Elec. Power Co. v. Burlington N. R.R. Co., 966 S.W.2d 467 (Tex. 1998).
A plaintiff may also recover under this equitable doctrine if a contemplated
agreement is unenforceable, impossible, not fully performed, thwarted by mutual
mistake, or void for other legal reasons. French, 169 S.W.3d at 11. This court has
previously held that unjust enrichment is an independent cause of action. See Pepi
Corp. v. Galliford, 254 S.W.3d 457, 460 (Tex. App.—Houston [1st Dist.] 2007,
pet. denied) (citing on HECI Exploration Co. v. Neel, 982 S.W.2d 881, 891 (Tex.
1998)); Cristobal v. Allen, No. 01-09-00126-CV, 2010 WL 2873502, at *6 (Tex.
App.—Houston [1st Dist.] July 22, 2010, no pet.) (mem. op.).
Unjust enrichment is not a proper remedy, however, merely because it might
appear expedient or generally fair that some recompense be afforded for an
unfortunate loss or because the benefits to the person sought to be charged amount
to a windfall. Heldenfels Bros., 832 S.W.2d at 42. As a remedy based on quasi-
contract principles, unjust enrichment is unavailable when a valid, express contract
governing the subject matter of the dispute exists. Fortune Prod. Co. v. Conoco,
Inc., 52 S.W.3d 671, 683–84 (Tex. 2000); Christus Health v. Quality Infusion
Care, Inc., 359 S.W.3d 719, 723 (Tex. App.—Houston [1st Dist.] 2011, no pet.).
Based on the specific and somewhat unusual facts of this case, we conclude
that unjust enrichment is an appropriate equitable remedy to compensate the tenant
32
for the value of the gasoline tanks, walk-in cooler, and vapor recovery system. The
partes signed both a standard commercial lease agreement and also a separate
contract for the purchase and sale of equipment associated with operating the gas
station. According to these agreements, the landlord sold and the tenant purchased
several pieces of equipment that the tenant would use in operating the gas station
during the tenancy, including a cashier machine, two refrigerators, a coffee
machine, the gasoline tanks, and the walk-in cooler. The jury found that the tenant
paid the landlord $120,000 for that equipment, including the gasoline tanks, walk-
in cooler, and vapor recovery system.
At the expiration of the lease, the landlord kept all of the equipment that he
had sold to the tenant. The jury found that this action constituted conversion and
theft of the tenant’s property, but as explained above, conversion and theft do not
apply to fixtures, which cannot be classified as personal property. The landlord
wrongfully obtained a benefit by making use of the tenant’s equipment when he
resumed operation of the gas station. The tenant’s other causes of action can
provide no remedy for this benefit conferred upon the landlord. Considering that
the parties entered into a sales contract specifically for the purpose of conveying
valuable property from the landlord to the tenant, the jury could have and
apparently did conclude that the parties never contemplated that such property
would simply revert back to the landlord upon the expiration of the lease, and thus
33
it would be unconscionable to the landlord to retain the benefit of such property,
and it must be required to make restitution to the tenant. Under these
circumstances, unjust enrichment is an appropriate equitable remedy to
compensate the tenant for the value of the equipment sold to him at the beginning
of the lease.
The jury found that the landlord was unjustly enriched at the tenant’s
expense, and it determined damages based on the value of all of the equipment the
landlord retained after the termination of the lease. The landlord nevertheless
contends that the evidence is legally insufficient to support the trial court’s award
of damages for unjust enrichment because there was no evidence of the benefits the
landlord received and because express contracts, the sales contract and lease
agreement, cover the “central dispute” between the parties.
1. Benefits received by landlord
There was sufficient evidence of the benefits the landlord received by
keeping the tenant’s property. The landlord testified that he used the gasoline
tanks, walk-in cooler, and vapor recovery system to operate the business. The
tenant’s son testified that the landlord’s refusal to pay for the tanks was
unreasonable because digging up the gasoline tanks and reinstalling them
somewhere else would cost $120,000 to $130,000—more than their value. The
34
landlord does not contest that sufficient evidence supported the values the jury
assessed for these materials.
2. No applicable express contract
Nor is the tenant’s recovery for unjust enrichment barred by the existence of
an express contract governing the parties’ dispute. Generally, an unjust enrichment
claim fails as a matter of law if an express contracts terms address recovery for the
materials or services sought as part of the unjust enrichment claim. See, e.g.,
Fortune Prod., 52 S.W.3d at 684–85 (unjust enrichment claim for sale of part of
gas stream barred by contracts with defendant specifying payments for gas); Ledig
v. Duke Energy Corp., 193 S.W.3d 167, 176 (Tex. App.—Houston [1st Dist.]
2006, no pet.) (unjust enrichment claim for bonus exchanged for stock options
barred by contract agreeing to exchange of bonus for stock options); Burlington N.
R.R., 925 S.W.2d at 98 (unjust enrichment claim for excessively high shipping
rates barred by contract completely governing the issue of shipping rates). If the
evidence does not show that a contract covers the services or materials at issue,
then the factfinder may determine whether a party may recover under the equitable
theory. See Christus Health, 359 S.W.3d at 724.
The tenant and the landlord never reached an agreement over the transfer of
the tenant’s property after the termination of the lease of the gas station. While the
1993 sales contract governed the question of who owned the equipment at the
35
beginning of the parties’ relationship, that contract did not govern whether the
landlord had to pay for that equipment or could force the tenant to uninstall it when
the lease terminated and the landlord resumed occupancy of the premises. The
landlord’s retention and “liquidation” of the tenant’s inventory, which the landlord
did not dispute that the tenant owned, shows that the issue of ownership of the
property does not govern their dispute over the method of transfer of that property.
Thus, viewing the evidence in a light that tends to support the judgment, we
conclude that more than a scintilla of evidence supports the findings and damages
awarded as unjust enrichment. As we hold that sufficient evidence supported the
tenant’s claim for unjust enrichment for the value of the installed pieces of
equipment and sufficient evidence supported the damages award for the personal
property retained by the landlord under conversion or theft, we affirm the
judgment’s award of damages based on the value of this property. See Tony Gullo
Motors I, L.P. v. Chapa, 212 S.W.3d 299, 303–04 (Tex. 2006) (holding the
prevailing party is entitled to judgment on the most favorable theory supported by
the pleadings, evidence, and verdict, but may only have one recovery for one
injury even under multiple theories of liability); Madison v. Williamson, 241
S.W.3d 145, 159 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) (holding trial
court properly concluded plaintiff could recover for single injury when submitted
identical damage question after each liability question in jury charge).
36
V. Attorney’s fees
The landlord argues that we must remand for a new trial on attorney’s fees
because the trial court erred in awarded unsegregated attorney’s fees. The issue of
attorney’s fees was submitted to jury in the charge, and the tenant’s attorney
offered his own testimony as evidence of attorney’s fees. He testified that the
tenant had incurred approximately $50,000 to $60,000 in attorney’s fees and that
he had not segregated his fees because the work he performed on the different
causes of action was inextricably intertwined. The jury determined that reasonable
amount of attorney’s fees for the tenant’s attorney was $35,000, plus $10,000 each
in the event of appeals to the court of appeals and the Supreme Court of Texas.
The landlord has failed to preserve the fees challenge either through an
objection to the testimony of the tenant’s attorney or through an objection to the
charge. See TEX. R. APP. P. 33.1; Hong Kong Dev., Inc. v. Nguyen, 229 S.W.3d
415, 455–56 (Tex. App.—Houston [1st Dist.] 2007, no pet.) (noting that a
challenge to the failure to segregate attorney’s fees must be preserved either
through an objection to the charge or the testimony on unsegregated fees).
Accordingly, we overrule the landlord’s issue on the segregation of attorney’s fees.
VI. Exemplary damages
In a cross-appeal, the tenant challenges the trial court’s failure to award him
exemplary damages in the judgment. The tenant requested a jury instruction on
37
exemplary damages and the jury assessed $450,000 in exemplary damages, but the
instruction failed to reference the proper legal standard for the award of exemplary
damages. The trial court’s judgment did not award exemplary damages.
“[E]xemplary damages may be awarded only if the claimant proves by clear
and convincing evidence that the harm with respect to which the claimant seeks
recovery of exemplary damages results from fraud, malice, or gross negligence.”
TEX. CIV. PRAC. & REM. CODE ANN. § 41.003(a) (West Supp. 2012).
Alternatively, the claimant may recover exemplary damages if a statute
establishing a cause of action authorizes exemplary damages, but even in that case
the claimant must prove by clear and convincing evidence that the damages
resulted from the circumstances allowing their recovery as specified in the statute.
Id. § 41.003(c). The party seeking a particular remedy has the burden to prove the
requirements of that form of relief and the obligation to request a question on that
issue. See DiGiuseppe v. Lawler, 269 S.W.3d 588, 598–99 (Tex. 2008) (holding
that party seeking specific performance bore burden to prove necessary element to
be entitled to specific performance).
At the jury charge conference, the following exchange took place regarding
the exemplary damages question:
THE COURT: Mr. Lee? This is the exemplary damages question.
38
COUNSEL FOR THE LANDLORD: That should be included
somewhere suggesting that the clear and convincing evidence is not
dismissed.
THE COURT: . . . [I]t’s a little bit of an interesting question looking
at [Civil Practice and Remedies Code section] 41.003(a) . . . requiring
clear and convincing evidence that the harm resulted from fraud,
malice or gross negligence, but it is not clear that for an intentional
tort—an otherwise intentional tort, like conversion, which is really
what we’re talking about here . . . you have to show that by clear and
convincing evidence.
It doesn’t seem to indicate that in the pattern jury charge either. So I
am going to overrule that, Mr. Lee. They do have to find—it does
have to be unanimous and there’s intent requirements in the—in both
I think conversion and theft causes of action already. Well, actually,
there’s not in the way we have it worded.
Mr. Ahn, it’s your question . . .
COUNSEL FOR THE TENANT: Yes, sir.
THE COURT: . . . your appeal to defend if it gets to that point. Do
you want to put in language about clear and convincing?
COUNSEL FOR THE TENANT: I feel comfortable without it,
Judge, because the PJC and the authorities we have seen does not
require it[.]
As this colloquy reveals, the tenant did not request that the trial court to instruct the
jury to determine whether damages were the result of fraud, malice, or gross
negligence as proven by clear and convincing evidence.
When a party’s theory of recovery or defense consists of multiple issues
necessary to support that theory and the charge omits one of those necessary
elements without objection, the parties are deemed to have waived jury
39
determination of the omitted elements. Smith v. Maximum Racing, Inc., 136
S.W.3d 337, 340 (Tex. App.—Austin 2004, no pet.). Absent written findings on
the omitted element, the trial court shall be presumed to have decided the omitted
issue to support the judgment rendered. TEX. R. CIV. P. 279 (“If no such written
findings are made, such omitted element or elements shall be deemed found by the
court in such manner as to support the judgment.”). Here, findings were not made
on the omitted elements of whether the harm the tenant suffered was proven by
clear and convincing evidence to be the result of fraud, malice, gross negligence,
or a circumstance specified under a statutory theory of recovery. The trial court’s
judgment did not award exemplary damages, and we presume that the trial court
decided the omitted issue in support of that judgment.
The tenant asserts that the landlord failed to preserve this issue on appeal,
because he did make a proper objection to the tenant’s proposed jury charge
regarding exemplary damages. Alternatively, the tenant suggests that the trial
court could not ignore the jury’s finding on exemplary damages sua sponte. The
tenant is incorrect on both counts. Again, it was the burden of the party seeking
the remedy to request a proper instruction to obtain that remedy. See DiGiuseppe,
269 S.W.3d at 598–99. Furthermore, the landlord was not required to present a
proper jury instruction to preserve error when he does not complain of error as to
that aspect of the judgment. See TEX. R. CIV. P. 278 (requiring the party
40
complaining of the judgment to have submitted a proper question in writing to
reverse the judgment). The trial court was free to ignore the jury’s answer to the
tenant’s exemplary damages question because that answer was immaterial in light
of an applicable statute. See Oliver v. Oliver, 889 S.W.2d 271, 273–74 (Tex. 1994)
(holding that no proper objection to jury question is required when a statute renders
the question immaterial); Yeckel v. Abbott, No. 03-04-00713-CV, 2009 WL
1563587, at *12 (Tex. App.—Austin June 4, 2009, pet. denied) (“in the absence of
the findings chapter 41 requires before any such damages can be awarded,” the
jury’s answer to an exemplary damages question is “simply immaterial”). A trial
court may, on its own motion, disregard an immaterial jury finding. Vann v.
Brown, 244 S.W.3d 612, 615 (Tex. App.—Dallas 2008, no pet.); see also Spencer
v. Eagle Star Ins. Co. of Am., 876 S.W.2d 154, 157 (Tex. 1994).
Accordingly, we overrule the tenant’s points of error on cross-appeal and
affirm the trial court’s judgment on the issue of exemplary damages.
Conclusion
Having determined that the tenant cannot recover statutory damages when
that issue was neither pleaded nor tried by consent, we reverse the judgment that
the tenant recover treble damages for the amount of the security deposit, and we
reduce the award of damages for failure to return the security deposit from $10,500
to $3,500. As reformed, we affirm that portion of the judgment. Based on the
41
reformed damages award, we vacate the award of prejudgment interest and remand
to the trial court for a recalculation of interest.
Michael Massengale
Justice
Panel consists of Chief Justice Radack and Justices Sharp and Massengale.
42