Court Opinion

ID: 3114266
Source: CourtListenerOpinion
Date Created: 2015-10-16 07:22:55.624912+00
Date Added: 2024-06-11T10:32:35.289873
License: Public Domain

Fourth Court of Appeals
                                       San Antonio, Texas
                                               OPINION
                                          No. 04-12-00779-CV

                            Shannon L. JOHNSON and Javier G. Gonzalez,
                                           Appellants

                                             v.
                                    WATERS AT ELM CREEK
                                  WATERS AT ELM CREEK LLC,
                                          Appellee

                      From the County Court at Law No. 2, Bexar County, Texas
                                      Trial Court No. 354267
                               Honorable Irene Rios, Judge Presiding

Opinion by:       Catherine Stone, Chief Justice

Sitting:          Catherine Stone, Chief Justice
                  Sandee Bryan Marion, Justice
                  Patricia O. Alvarez, Justice

Delivered and Filed: October 16, 2013

AFFIRMED IN PART; REVERSED AND RENDERED IN PART

           This appeal arises from a dispute over the return of a security deposit. After a bench trial,

the trial court signed a take-nothing judgment in favor of Waters at Elm Creek, L.L.C., awarding

it $18,623.16 in attorneys’ fees. On appeal, Shannon Johnson and Javier G. Gonzalez contend the

trial court erred in denying their first hybrid motion for summary judgment and that the evidence

is legally and factually insufficient to support the trial court’s judgment. In an amicus brief, an

issue was raised regarding the trial court’s order granting Waters at Elm Creek’s second motion

for sanctions. Before oral argument, this court notified the parties that the court was interested in
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hearing arguments on the sanctions issue. For the reasons stated in this opinion, the trial court’s

order granting the second motion for sanctions is reversed. The remainder of the trial court’s

judgment is affirmed.

                                         BACKGROUND

       Johnson and Gonzalez signed a lease for an apartment in an apartment complex owned by

Waters at Elm Creek. In accordance with the lease, Johnson and Gonzalez paid a $663.00 security

deposit. The lease required Waters at Elm Creek to mail the “security deposit refund (less lawful

deductions) and an itemized accounting of any deductions no later than 30 days” after Johnson and

Gonzalez surrendered possession of the apartment. Johnson and Gonzalez surrendered possession

of the apartment on October 5, 2009.

       Johnson subsequently received a check in the amount of $136.11 in the mail with an

itemized accounting of the deductions made by Waters at Elm Creek. The accounting was dated

October 23, 2009; however, the check was dated November 10, 2009. The postmark on the

envelope in which the check and accounting were mailed was dated November 11, 2009.

       On November 20, 2009, Johnson and Gonzalez filed a pro se original petition against

Waters at Elm Creek, alleging Waters at Elm Creek had failed to timely and properly “render an

accounting” as a result of its bad faith and had forfeited any right to withhold any portion of the

deposit. Johnson and Gonzalez subsequently filed three motions for summary judgment, all of

which were denied by the trial court. In its response to the third motion for summary judgment,

Waters at Elm Creek requested sanctions, asserting the third motion for summary judgment was

groundless and brought in bad faith. The trial court granted the motion for sanctions and ordered

Johnson to pay Waters at Elm Creek $500 for the attorney’s fees it incurred in responding to the

third motion for summary judgment. The deadline for paying the sanctions was April 13, 2012.

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        On April 16, 2012, Johnson filed a petition for writ of mandamus and motion for temporary

relief with this court challenging the sanctions order. Having determined that Johnson had an

adequate remedy by appeal, this court issued an order denying the petition on April 17, 2012.

Johnson received notice that her petition was denied on April 20, 2012. Upon receiving the notice,

Johnson attempted to tender a check in payment of the sanctions to the attorney for Waters at Elm

Creek. After the attorney rejected the check as untimely, Johnson deposited the check into the

registry of the trial court.

        On April 30, 2012, Waters at Elm Creek filed a second motion for sanctions, asserting,

“The filing of the Mandamus Proceedings is the type of vexatious litigation that is frivolous,

groundless and brought for the purposes of harassment.” On May 1, 2012, an attorney filed an

appearance of counsel on behalf of Johnson and a motion to set the cause on the non-jury docket.

An order was signed on May 1, 2012, setting the cause for trial on June 28, 2012.

        On May 8, 2012, a hearing was held on Waters at Elm Creek’s second motion for sanctions.

At the conclusion of the hearing, the trial court signed an order granting the motion and ordering

Johnson to pay $1,500, which the trial court determined were the attorneys’ fees “reasonable and

necessary for Defendant filing Defendant’s Second Motion for Sanctions against [Johnson],

preparing to respond to the Mandamus Proceedings, preparing an order thereon and appearing here

today.” 1 In the order, the trial court expressly finds, “The filing of the Mandamus Proceedings is

the type of vexatious litigation that is frivolous, groundless and brought for the purposes of

harassment.”

        On May 16, 2012, the trial was reset to July 20, 2012. After hearing the evidence, the trial

court signed a take-nothing judgment in favor of Waters at Elm Creek and awarded it $18,623.16

1
  We assume that this language refers to the preparation of an order on the motion for sanctions since this court
prepares its own orders in denying mandamus relief.

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in attorney’s fees. The trial court entered findings of fact and conclusions of law, expressly finding

that Waters at Elm Creek “had no intention to deprive [Johnson and Gonzalez] of a lawfully due

security deposit refund” and “did not retain [the] security deposit in dishonest disregard of their

rights.” The trial court further found that all amounts retained by Waters at Elm Creek from the

security deposit were reasonable. Finally, the trial court found that Waters at Elm Creek did not

retain the security deposit in bad faith or fail to provide a written description and itemized list of

damages and charges in bad faith.

                                DENIAL OF SUMMARY JUDGMENT

       In their first issue, Johnson and Gonzalez assert the trial court erred in denying their first

hybrid motion for summary judgment. Where a motion for summary judgment is denied by the

trial court and the case is subsequently tried on its merits, the order denying the motion for

summary judgment cannot be reviewed on appeal. Ackermann v. Vordenbaum, 403 S.W.2d 362,

365 (Tex. 1966); Williams v. Colthurst, 253 S.W.3d 353, 359-60 (Tex. App.—Eastland 2008, no

pet.). At oral argument, Johnson and Gonzalez withdrew this issue in view of the applicable law.

                                 SUFFICIENCY OF THE EVIDENCE

       In their second issue, Johnson and Gonzalez challenge the sufficiency of the evidence to

support the trial court’s ruling. Specifically, Johnson and Gonzalez contend Waters at Elm Creek

did not present sufficient evidence to overcome the presumption that it acted in bad faith or to

establish the reasonableness of the deductions it made from the security deposit.

       A.      Section 92.109

       Section 92.109 of the Texas Property Code imposes liability on a landlord who in bad faith

either: (1) wrongfully retains a security deposit; or (2) “does not provide a written description and

itemized list of damages and charges.” TEX. PROP. CODE ANN. § 92.109(a),(b) (West 2007). In a

suit brought by a tenant seeking to impose liability on the landlord based on either of the foregoing
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grounds, “the landlord has the burden of proving that the retention of any portion of the security

deposit was reasonable.” Id. at § 92.109(c). “A landlord who fails either to return a security

deposit or 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.” Id. at

§ 92.109(d).

       B.      Standard of Review

       In this case, Johnson and Gonzalez brought suit seeking to impose liability on Waters at

Elm Creek under section 92.109; accordingly, Waters at Elm Creek had the burden to prove its

retention of a portion of the security deposit was reasonable. Id. at § 92.109(c). When a party

challenges the legal sufficiency of the evidence supporting an adverse finding on an issue for which

it did not have the burden of proof, the party must show that no evidence supports the adverse

finding. Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348 S.W.3d 194, 215 (Tex. 2011).

“Evidence is legally sufficient if it ‘would enable reasonable and fair-minded people to reach the

verdict under review.’” Id. (quoting City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005)).

“We ‘credit favorable evidence if reasonable jurors could, and disregard contrary evidence unless

reasonable jurors could not.’” Id. “A factual sufficiency attack on an issue on which the appellant

did not have the burden of proof requires the complaining party to demonstrate there is insufficient

evidence to support the adverse finding.” Flying J Inc. v. Meda, Inc., 373 S.W.3d 680, 690-91

(Tex. App.—San Antonio 2012, no pet.). “A reviewing court will reverse the trial court only if

the evidence which supports the jury’s finding is so weak as to be clearly wrong and manifestly

unjust.” Id. (internal citations omitted). “We may not substitute our judgment for that of the trier

of fact or pass on the credibility of the witnesses.” Sunl Group, Inc. v. Zhejiang Yongkang Top

Imp. & Exp. Co., Ltd., 394 S.W.3d 812, 817 (Tex. App.—Dallas 2013, no pet.).

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        C.      Analysis

        The undisputed evidence at trial established that Waters at Elm Creek failed to return the

security deposit to Johnson and Gonzalez and failed to provide a written description and

itemization of deductions on or before the 30th day after the date Johnson and Gonzalez

surrendered possession. Johnson and Gonzalez surrendered possession on October 5, 2009, and

the envelope containing the itemization of charges and the balance of the security deposit was

postmarked November 11, 2009. Accordingly, Waters at Elm Creek is presumed to have acted in

bad faith. TEX. PROP. CODE ANN. § 92.109(d) (West 2007). The landlord bears the burden to rebut

the presumption by presenting evidence that the landlord acted in good faith. Pulley v. Milberger,

198 S.W.3d 418, 428 (Tex. App.—Dallas 2006, pet. denied).

        A landlord acts in bad faith if the landlord acts in dishonest disregard of the tenant’s rights

or intends to deprive the tenant of a lawfully due refund. Id. Good faith is established by showing

“honesty in fact in the conduct or transaction concerned.” Id. “Evidence that a landlord had reason

to believe he was entitled to retain a security deposit to recover reasonable damages is sufficient

to rebut the presumption of bad faith created by the Texas Property Code.” Id. “Other evidence

may include: (1) the landlord is an amateur lessor because the residence is his only rental property;

(2) the landlord had no knowledge of the requirement to submit an itemized list of all deductions

from the security deposit; (3) extensive damage was done to the residence; (4) the landlord

attempted to do some of the repairs himself to save money; or (5) the landlord had a reasonable

excuse for the delay, e.g., he was on vacation.” Id. at 428-29.

        If the landlord is able to defeat the presumption of bad faith with regard to the retention of

a security deposit, the landlord also is required to prove that his retention of any portion of the

security deposit was reasonable. Id. at 429. “A landlord’s retention of the security deposit may

be reasonable if: (1) the tenant is legally liable under the lease or as a result of breaching the lease;
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(2) the damages did not exist before the tenant leased the premises; or (3) the damages or charges

are equal to or in excess of the security deposit or the amount deducted from the security deposit.”

Id. If the lease imposes an obligation on the tenant to pay for damage to the premises, the landlord

is entitled to recover the reasonable cost of repairs. Id. The landlord is not required to establish

the amount of damages with “mathematical precision” but “needs only to present sufficient

evidence to justify a finding [by the trier of fact] that the costs were reasonable and the repairs

were necessary.” Id.

        In this case, the trial court as the trier of fact heard conflicting evidence from Johnson and

Lori Delayo, the property manager for Waters at Elm Creek. 2 With regard to Johnson receiving

the balance of the deposit approximately ten days late, Delayo testified that the check initially was

mailed to the address Johnson listed on her notice of intent to move out. The check was then

returned to the corporate office of Waters at Elm Creek. When Johnson called Delayo inquiring

about the check, she provided Delayo with a new address to which the check was then re-sent. We

hold that Delayo’s testimony is sufficient evidence to rebut the presumption of bad faith.

        With regard to the reasonableness of the deductions Waters at Elm Creek made from the

security deposit, Johnson testified that the carpet in the apartment was worn and the paint on the

wall was “splotchy” when she moved into the apartment. Johnson noted these conditions on the

Inventory and Condition Form which she completed and turned in after moving into the apartment.

A copy of the form was introduced into evidence. Although Johnson admitted that she kept a dog

in the apartment for approximately one month of her one-year lease term, she testified that the dog

was kept in a crate when she was not at home. Johnson testified that Delayo commented that the

2
 During oral argument, Johnson’s attorney asserted that the trial court sustained his objection to this testimony as
hearsay. Although the trial court sustained a later objection to a reference Delayo made to what her accounting
department told her, no objection was made to the testimony referenced in this opinion.

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apartment was spotless during the walk-through they conducted when Johnson vacated the

apartment.

       Delayo testified that she smelled a strong odor of dog urine immediately upon opening the

door during the walk-through. She stated that the carpet was saturated in urine, requiring the carpet

and the pad to be replaced and the concrete under the carpet to be sealed to mask the smell. Delayo

also testified that Johnson had attempted to re-paint a wall that had been painted a different color

during her tenancy; however, large spots were visible through the paint. Delayo stated that she

informed Johnson that the wall would need to be repainted.

       The following deductions were made from Johnson’s security deposit: (1) $25 light clean;

(2) $367.56 carpet replacement with pad; (3) $35.00 pet treatment; (4) $85.58 full paint due to

wrong color on walls; (5) $7.00 replaced 1 drip pan; and (6) $7.75 final water bill. The invoice

listing the deductions noted that Waters at Elm Creek was actually invoiced $171.16 for the paint,

but Johnson was only charged one-half that amount, noting that the paint on the walls did not

match the current color used in the apartment requiring the apartment to be painted twice. In

addition to the amounts listed in the invoice, Delayo testified to the actual expenses incurred by

Waters at Elm Creek. Delayo stated that Waters at Elm Creek was invoiced $55 for the cleaning,

but she charged Johnson only $25 because she determined that Johnson had attempted to clean the

apartment. In addition, Delayo testified that the full amount of the carpet replacement was between

$800 and $850; however, she prorated that amount given the condition of the carpet when Johnson

moved into the apartment. Finally, Delayo testified that Waters at Elm Creek paid $125 for the

pet treatment, but she charged Johnson only $35.

       Although the evidence was conflicting, it was within the trial court’s province to assess the

witnesses’ credibility and determine the weight to be given the testimony. After reviewing the

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record, we hold the evidence presented was legally and factually sufficient to support the trial

court’s finding that the itemized repairs were necessary and the associated costs were reasonable.

                                            SANCTIONS

       Although not asserted by Johnson as a separate issue in her brief, the amicus brief filed in

this case raises a challenge to the trial court’s second sanctions order. As previously noted, the

parties were advised before oral argument to be prepared to address this issue. In the second

sanctions order, the trial court imposed sanctions at least in part based on Johnson’s filing of an

original proceeding in this court challenging the first sanctions order. The trial court’s order cites

TEX. R. CIV. P. 13 and section 10.002 of the Texas Civil Practice and Remedies Code as a basis

for the sanctions.

       Rule 13 allows a trial court to impose sanctions if a pleading is groundless and brought in

bad faith or groundless and brought for the purpose of harassment.             TEX. R. CIV. P. 13.

“Groundless” means “no basis in law or fact and not warranted by good faith argument for the

extension, modification, or reversal of existing law.” Id.

       Section 10.002 of the Texas Civil Practice and Remedies Code allows a trial court to

impose sanctions for conduct that violates section 10.001. TEX. CIV. PRAC. & REM. CODE ANN.

§ 10.002 (West 2002). Section 10.001 permits sanctions to be imposed if: (1) a pleading is

presented for any improper purpose, including to harass or to cause unnecessary delay or needless

increase in the cost of litigation; (2) a contention in a pleading is not warranted by existing law or

by nonfrivolous argument for the extension, modification, or reversal of existing law or the

establishment of new law; (3) any allegation in the pleading lacks evidentiary support or is likely

to lack evidentiary support after a reasonable opportunity for further investigation or discovery; or

(4) a denial in a pleading of a factual contention is not warranted on the evidence.

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        Although the trial court’s order relies on Rule 13 and Section 10.002 as the basis for

imposing sanctions, Rule 52.11 of the Texas Rules of Appellate Procedure sets forth the procedure

for imposing sanctions on a party or attorney in relation to the filing of an original proceeding.

TEX. R. APP. P. 52.11. Sanctions are permitted when the party or attorney is not acting in good

faith as indicated by: (1) filing a petition that is clearly groundless; (2) bringing the petition solely

for delay of an underlying proceeding; (3) grossly misstating or omitting an obviously important

and material fact in the petition or response; or (4) filing an appendix or record that is clearly

misleading because of the omission of obviously important and material evidence or documents.

Id.

        Johnson’s mandamus petition was denied by this court because we determined an adequate

remedy by appeal existed. “As a general rule, the denial of mandamus relief due to the existence

of an adequate remedy by appeal does not automatically establish that the mandamus petition is

so clearly groundless as to warrant sanctions.” In re Lerma, 144 S.W.3d 21, 26-27 (Tex. App.—

El Paso 2004, orig. proceeding). In Lerma, the relator had two appeals pending in which the relator

raised the same issues as were raised in the mandamus proceeding. 144 S.W.3d at 25. Although

the petition was denied because the relator had an adequate remedy by appeal (with an appeal that

was actually pending), the El Paso court declined to impose sanctions. Id. at 27.

        In light of Rule 52.11, we hold that the trial court was without jurisdiction to impose

sanctions based on the filing of a mandamus petition in this court. Therefore, we reverse the trial

court’s order granting the second motion for sanctions and render judgment denying the motion.

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                                       CONCLUSION

       The trial court’s order granting Waters at Elm Creek’s second motion for sanctions is

reversed, and judgment is rendered denying the motion. The remainder of the trial court’s

judgment is affirmed.

                                              Catherine Stone, Chief Justice

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