TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03-07-00505-CV

Jo Dee Kaspar-Wells, Individually and as Trustee of the Jody Aiello Trust, Appellant

v.

Jodie Mowdy, Appellee

FROM THE COUNTY COURT AT LAW NO. 2 OF WILLIAMSON COUNTY

NO. 05-0564-CC2, HONORABLE DONALD HIGGINBOTHAM, JUDGE PRESIDING

M E M O R A N D U M O P I N I O N

This appeal concerns whether the trial court erred in finding that the breach of a lease

provision relating to who will be “occupants” of the leased premises was not material. We affirm.

The details of this case are set out in greater detail in our previous opinion in

this case. See Kaspar-Wells v. Mowdy, No. 03-06-00026-CV, 2007 Tex. App. LEXIS 2073

(Tex. App.—Austin Mar. 16, 2007, no pet.) (mem. op.). Mowdy lived in the house with her

long-time companion, Jo Dee Kaspar-Wells’s grandfather. After his death in 2000, Mowdy leased

the house from Kaspar-Wells and Kaspar-Wells’s now-deceased mother, Jody Aiello. During the

term of the lease, Mowdy married and her husband moved into the house. In our previous opinion,

we determined that the lease unambiguously allowed only Mowdy to reside in the house under the

provision of the lease that states “Occupants (other than Tenant): None.” We reversed the trial

court’s judgment that she did not breach the lease by allowing her husband to occupy the house. We
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held that, by having an occupant other than herself, Mowdy breached the lease. We remanded the

cause for further proceedings, including a determination of whether Mowdy’s breach constituted a

material breach. On remand, the parties submitted briefs to the trial court, which decided the issues

based on the record from the previous hearing. The court found that the breach was not material.

In this appeal, Kaspar-Wells contends that the trial court erred by finding the breach

not material. She also contends that the trial court erred in failing to find that, if Mowdy’s breach

was material, then the appropriate remedy would be to terminate the lease. Material breach by one

party to a contract can excuse the other party from any obligation to perform and is generally

a question of fact. See Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196

(Tex. 2004). Kaspar-Wells’s first challenge is to the sufficiency of the evidence underlying the

court’s finding. She does not specify whether she challenges the legal or factual sufficiency of the

evidence. We will set out the standards for both challenges.

We sustain a legal sufficiency complaint if the record reveals: (a) the complete

absence of a vital fact; (b) the court is barred by rules of law or of evidence from giving weight to

the only evidence offered to prove a vital fact; (c) the evidence offered to prove a vital fact is no

more than a mere scintilla; or (d) the evidence establishes conclusively the opposite of the vital fact.

City of Keller v. Wilson, 168 S.W.3d 802, 810 (Tex. 2005). The ultimate test for legal sufficiency

is whether the evidence at trial would enable reasonable and fair-minded people to make the finding

under review. See id. at 827. When the evidence offered to prove a vital fact is so weak as to do no

more than create a mere surmise or suspicion ofits existence, the evidence is less than a scintilla and,

in legal effect, is no evidence. See Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004).
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However, more than a scintilla of evidence exists if the evidence rises to a level that would enable

reasonable and fair-minded people to differ in their conclusions. Id. We review the evidence in

the light favorable to the finding, crediting favorable evidence if a reasonable fact-finder could

and disregarding contrary evidence unless a reasonable fact-finder could not. See City of Keller,

168 S.W.3d at 807.

When reviewing a challenge to the factual sufficiency of the evidence supporting

a vital fact, we must consider, weigh, and examine all of the evidence in the record, both

supporting and against the finding, to decide whether the finding should be set aside. Plas-Tex, Inc.

v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989); Pool v. Ford Motor Co., 715 S.W.2d

629, 635 (Tex. 1986). We should set aside the finding only if the evidence that supports the

finding is so weak as to be clearly wrong and manifestly unjust. See Cain v. Bain, 709 S.W.2d

175, 176 (Tex. 1986).

The central issue in this appeal is whether the trial court committed reversible error

by finding the specific breach at issue not material. The Texas Supreme Court has cited the

Restatement of Contracts when examining the materiality of a breach of contract. PAJ, Inc.

v. Hanover Ins. Co., 243 S.W.3d 630, 633 (Tex. 2008); Hernandez v. Gulf Group Lloyds,

875 S.W.2d 691, 693 (Tex. 1994). The Restatement lists five circumstances as “significant” when

determining whether a failure to render or to offer performance is material:

(a) the extent to which the injured party will be deprived of the benefit which he

reasonably expected;

(b) the extent to which the injured party can be adequately compensated for the part

of that benefit of which he will be deprived;
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(c) the extent to which the party failing to perform or to offer to perform will suffer

forfeiture;

(d) the likelihood that the party failing to perform or to offer to perform will cure his

failure, taking account of all the circumstances including any reasonable assurances;

and

(e) the extent to which the behavior of the party failing to perform or to offer to

perform comports with standards of good faith and fair dealing.

Restatement (Second) of Contracts § 241 (1981).

Kaspar-Wells contends that the breach was material. Mowdy lived in the home with

Kaspar-Wells’s grandfather until his death, and the lease was allegedly created to fulfill his desire

that Mowdy be allowed to remain in the house. Under the lease, Mowdy is allowed to live in the

house rent-free provided she pays property taxes, insurance, maintenance, and utilities. The lease

allows only one occupant—Mowdy—and expressly prohibits assignment or subleasing of the house

without Kaspar-Wells’s consent.

There is also evidence, however, that the breach was not material. Although the lease

expressly lists actions that the “Tenant agrees to” and others than the “Tenant agrees not to” take,

moving in another occupant is not expressly listed in either category. The termination date of the

lease is the “[d]ate Jodie Mowdy moves out or vacates residence or does not pay property taxes or

maintain insurance.” In addition to not being expressly prohibited, moving in another occupant is

not listed as a basis for termination. Kaspar-Wells agreed that the parties to the lease “did not put

anywhere in the lease about any other persons ever living there . . . .” She testified that “[i]t actually

never crossed our mind” that anyone else might live in the house.
 For example, there is no evidence regarding what compensation—e.g. rent—might 1

compensate Kaspar-Wells for the breach of her asserted expectation that Mowdy would remain alone

in the house. There is no evidence regarding whether Mowdy will cure her breach—e.g. move

herself and/or her husband out of the house—although the sense is that she intends to remain in the

house with her new husband indefinitely without paying rent.

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We conclude that factually and legally sufficient evidence supports the trial court’s

finding that the breach was not material. The lease was created so that Mowdy could continue to live

in the home of her long-time companion, now deceased, in exchange for Mowdy paying taxes,

insurance, and other bills. Those responsibilities are being met. The parties did not consider the

issue of Mowdy moving in an additional occupant in the form of a husband as important enough to

list among the express prohibitions or bases for termination of the lease. Mowdy moving in her

new husband did not deprive Kaspar-Wells of a benefit she reasonably expected from the lease.

There is no compelling evidence regarding the remaining Restatement factors. We conclude 1

that the evidence is legally and factually sufficient to support the trial court’s finding that the

breach was not material.

Because we conclude that there is sufficient evidence to support the trial court’s

finding that the breach was not material, we need not address Kaspar-Wells’s second issue

concerning the appropriate remedy under the lease for a material breach.

Affirmed.

 

G. Alan Waldrop, Justice

Before Chief Justice Law, Justices Pemberton and Waldrop

Affirmed

Filed: August 28, 2008