Court Opinion

ID: 2885529
Source: CourtListenerOpinion
Date Created: 2015-09-07 18:35:17.946698+00
Date Added: 2024-06-11T11:36:21.201293
License: Public Domain

NO. 07-00-0319-CV

                            IN THE COURT OF APPEALS

                     FOR THE SEVENTH DISTRICT OF TEXAS

                                    AT AMARILLO

                                       PANEL B

                                OCTOBER 17, 2001
                         ______________________________

            KING’S COURT RACQUETBALL, LOWELL BLANKFORT and
                           ROWLAND REBELE,

                                                      Appellants
                                           v.

                                   T.E. DAWKINS,

                                                Appellee
                         ______________________________

            FROM THE 251ST DISTRICT COURT OF RANDALL COUNTY;

               NO. 43,538-C; HON. PATRICK A. PIRTLE, PRESIDING
                       ______________________________

Before Boyd, C.J., Quinn, and Johnson, JJ.

      King’s Court Racquetball, Lowell Blankfort, and Rowland Rebele (collectively

referred to as K.C.) appeal from a final judgment awarding T.E. Dawkins recovery against

them. Four issues are presented for review. They concern the trial court’s finding that

K.C. committed waste and the manner by which damages arising therefrom were

calculated. We affirm.

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                                        Background

       According to the record, Dawkins and K.C. were competitors in the racquetball

business. Both owned and operated a court. However, the two eventually executed a

lease agreement whereby K.C. agreed to rent Dawkins’ facility for approximately three

years. Through the lease, K.C. obligated itself to 1) “use [the facility] as a physical fitness

related club” and 2) keep the premises “free from waste or nuisance and in a clean

condition, and . . . [to] deliver up the premises [at the end of the lease] in a clean and

sanitary condition, reasonable wear and tear . . . excepted.” Moreover, Dawkins permitted

K.C. to “make improvements” subject to the prior consent of Dawkins if they involved

“creat[ing] any openings in the roof or exterior walls.”

       Before the lease expired, the parties executed a five year extension. Therein, K.C.

was granted permission to use the facility “for any lawful purpose” because the restrictions

as to use contained in the original agreement were “removed in their entirety.” So too did

the parties agree that “[a]ll restrictions upon [K.C.’s] alteration and improvement of the

building [were] removed . . . and [that K.C.] shall be permitted to alter, reconstruct, rebuild

and modify the premises without restriction.” Dawkins also extended K.C. the authority to

“sublease or assign the Lease or the premises, or any portion thereof, or any interest

therein, for the term of [the] Extension, without consent of Lessor.” These rights were

extended to K.C. because the latter told Dawkins it intended to modify the building and

sublease it to others.

       Upon executing the extension, K.C. obtained an “interior demolition” permit from the

City of Amarillo and proceeded to gut the facility. According to K.C.’s representative,

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Dawkins was never told of its intent to demolish the interior. Nevertheless, the racquetball

courts were removed, as were walls, a hot tub, 17 panels of lockers, doors and door

frames, wooden floor covering, a staircase to the second floor, numerous ceiling tiles,

Formica wall covering, bathroom counters, and glass doors.               Left was what K.C.

considered a “shell,” that is, a hollow edifice with 1) hot electrical wires tangling from the

ceiling and electrical boxes, 2) ceiling tile hangers dangling from the ceiling, 3) perimeter

walls shorn of covering and exposing their framework, 4) water stains appearing on the

brick walls, 5) a bare concrete floor, and 6) a second floor with office space which could

no longer be accessed without a ladder. Moreover, a portion of the materials removed,

such as the walls and the lockers, were installed in K.C.’s own facility without the consent

of Dawkins. Finally, the premises were returned to Dawkins in their gutted condition upon

expiration of the lease.

       Needless to say, Dawkins sued K.C. for damages. The causes of action alleged

sounded in “breach of contract,” waste, conversion, and violation of the Free Enterprise

Act. Upon trial by the court, the latter found that 1) K.C. “removed the existing racquetball

courts to make way for new tenant improvements,” 2) K.C. failed to make those

improvements, and 3) the failure to make those improvements constituted waste.

Consequently, Dawkins was awarded damages representing the “reasonable cost of

repairs to place the leased premises in the condition that the premises would have been

in had the lessee not breached its duty to keep the premises free from waste . . . .” In

conjunction with its issuance of those factual findings, the court also concluded, as a

matter of law, that 1) the “[f]ailure to ‘alter, reconstruct, rebuild or modify’ the premises so

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as to restore the property to a commercially reasonable state of improvement at least

equal to the state of improvement when leased, reasonable wear and tear excepted, was

waste,” 2) K.C. breached its duty to “‘maintain the leased premises’ and to keep [same]

‘free from waste or nuisance and in clean condition,’” 3) K.C. breached its duty to “deliver

the premises to the Lessor, at the termination of the lease, in ‘good repair and condition,

reasonable wear and tear . . . excepted,” 4) K.C. converted personalty of Dawkins, 5) K.C.

was “liable to [Dawkins] for damages occasioned by the failure to deliver the premises to

lessor . . . in ‘good repair and condition, reasonable wear and tear . . . excepted,’” and 6)

the “appropriate measure of damages for waste [was] the reasonable cost of repairs to

[ ] place the premises in the condition that [they] would have been in had the lessee not

breached its duty to keep the premises free from waste.”

                                   Issue One — Waste

       K.C. initially contends that the trial court erred in finding that it committed waste

because its acts were not wrongful. Furthermore, they were not wrongful because the

lease extension agreement permitted it to “alter, reconstruct, rebuild and modify the

premises without restriction.” We overrule the contention for several reasons.

       Wrongful Nature of the Conduct

       First, it is clear that to constitute waste, the act allegedly causing it must be

wrongful. R.C. Bowen Est. v. Continental Trailways, 256 S.W.2d 71, 72 (Tex. 1953)

(defining waste as an injury to the reversionary interest in land caused by the wrongful act

of a tenant or other party rightfully in possession). In demolishing the interior of the

building, K.C. converted property owned by Dawkins that was once attached to the

                                             4
building. That property consisted of lockers and the materials comprising various of the

walls within the building. No one disputes that. Nor can it be disputed that conversion

involves an act deemed unacceptable under the law. Thus, some evidence appears of

record upon which the trial court could have found that K.C. committed a wrongful act

(conversion) resulting in waste.

       Second, the doctrine of waste serves to protect the landowner’s reversionary

interest in the property. R.C. Bowen Est. v. Continental Trailways, 256 S.W.2d at 72;

Abraxas Petroleum Corp. v. Hornburg, 20 S.W.3d 741, 753 (Tex. App.--El Paso 2000, no

pet.). It reflects the implicit duty of a tenant to exercise reasonable care to protect the

leased premises from injury other than by ordinary wear and tear. Because the tenant has

such a duty, its breach constitutes waste. Id. Yet, like many others, the obligation to

prevent waste may be affected by contract. See DeWitt County Elec. Coop. v. Parks, 1
S.W.3d 96, 105 (Tex. 1999) (noting that when a contract spells out the parties’ respective

rights about whether trees may be cut, the contract and not common-law negligence

theories governs any dispute about whether trees could be cut). So, the terms of the

contract and their meaning become of utmost importance. Next, in construing words, we

must accord them their plain grammatical meaning unless to do so would defeat the

parties’ intent. Id. at 101. So too must we read the agreement in a manner furthering the

underlying intent of the parties. Borders v. KRLB, Inc., 727 S.W.2d 357, 359 (Tex. App.--

Amarillo 1987, writ ref’d n.r.e.). Finally, the words at issue may not be plucked from their

context and then construed. Rather, they are to be interpreted, to the extent possible, in

a way that gives effect to the entire agreement and harmonizes potential conflict between

                                             5
differing provisions. MCI Telecomms. Corp. v. Texas Utils. Elec. Co., 995 S.W.2d 647,

652 (Tex. 1999).

       Here, K.C. asserts that its right to “alter, reconstruct, rebuild and modify the

premises without restriction” entitled it to not only demolish the interior but also leave it in

that demolished state. But, to construe the pertinent words to accord K.C. that right would

violate the foregoing rules of contract interpretation. For instance, the terms “reconstruct”

and “rebuild” are synonymous and mean to build or construct again. W EBSTER’S NEW

W ORLD DICTIONARY, COLLEGE EDITION 1187 (2d ed. 1980). They connote the act of

erecting an edifice, not demolishing it. So, to accord them a meaning synonymous with

destruction, as K.C. persuades us to do, would be to ignore their plain grammatical

meaning.

       Similarly, the words “alter” and “modify” are synonymous. Each means to change

or make different. W EBSTER’S NEW W ORLD DICTIONARY, COLLEGE EDITION 40 (2d ed. 1980).

And, though to demolish an object is to change it or make it different, courts have

appended restrictions to the definition when the terms are used in lease agreements. For

instance, in Mayer v. Texas Tire & Rubber Co., 223 S.W. 874 (Tex. Civ. App.--Fort Worth

1920, no writ), the court held that the authority to alter a building did not encompass the

power to implement substantial changes to the edifice which could not be removed at

lease end without injury to the building. Id. at 875. In other words, Mayer recognizes that

the power to alter permits the tenant to make changes, but those changes cannot be

substantial and non-removable. Next, over thirty years prior to Mayer, the court in

Davenport v. Magoon, 4 P. 299 (Or. 1884) concluded that the right to alter a structure did

                                               6
not include the right to tear it down or destroy it. Id. at 301-302. This was so because “the

idea [was] that the identity of the subject [be] preserved, although the form or nature may

[be] modified or changed.” Id. From these two cases we deduce that though a tenant may

be granted the right to alter the premises, that right is not plenary. It is, at the very least,

limited to doing that which does not destroy, in whole or part, the building without

accompanying repair and reconstruction.1 Simply put, permission to alter or modify “will

not be valid to the extent that it purports to permit the tenant to commit acts of willful and

wanton destruction of the leased property because no sensible end is achieved by

allowing those acts.” RESTATE MENT (SECOND ) OF PROPE RTY , §12.2, cmt. (j) (1977).

        That the words, alter, modify, reconstruct, and rebuild were followed by the phrase

“without restriction” does not change our conclusion. This is so because the intent of the

parties viz-a-viz the agreement remains paramount and controlling. That is, and as

mentioned in the body of the opinion, while words generally will be given their plain

grammatical meaning, that is not true when doing so contradicts the intent of the parties.

Here, the intent was to convert the building from racquetball courts to retail space available

for sublet, as evinced by 1) granting K.C. the authority to modify and sublet the premises

and 2) relieving K.C. of the prior use restrictions. In other words, the parties clearly

intended to change the potential uses of the building, to convert it from one viable use to

another. To construe the phrase “without restriction” as authorizing K.C. to obtain

possession of the building, demolish its interior, and return a scarred, empty shell which

        1
         Of course, one cannot deny that a land owner may give his tenant the right to destroy or
substantially change the character of the leased premises. We simply hold that such a right is not implicit
in the mere use of the terms “alter” or “modify” or some derivative thereof.

                                                    7
has little use while in that state would be to construe the phrase in a way contradicting the

clear intent of the parties. That, we cannot do.

       Moreover, in construing the words alter, modify, and without restriction as we do,

we also harmonize the various provisions within the lease at bar. Indeed, one cannot

rationally say that K.C. fulfilled its contractual duty to “keep [the premises] . . . in clean

condition, and . . . deliver up [same] in a clean and sanitary condition . . . [and] in good

repair and condition” at the end of the lease term if its supposed right to alter allowed it to

gut the edifice and leave a scarred shell. So, in reading the power to alter and modify

“without restriction” to exclude acts which result in substantial change or destruction to the

identity of the premises, we are effectively harmonizing the right to alter with K.C.’s duty

to maintain and return same in a clean condition and good repair.

       Next, to take possession of a building containing racquetball courts, a stairway,

lockers, whirl pool tub, glass doors, and wooden walls (to name a few amenities once

found in the building) and return a gutted shell replete with water stains, missing ceiling

tile, holes in the walls, and no access to its upper levels while stealing portions of the

property removed is to commit acts of willful destruction without accompanying repair or

reconstruction. That K.C. may have been allowed to alter “without restriction” is not

permission to destroy. And, because the destruction brought upon the facility at bar was

not permitted, it was wrongful for purposes of waste.

       No Harm

       Lastly, and assuming arguendo that the trial court erred in holding that K.C.

committed waste, the finding did not harm K.C. This is so because the tenant was also

                                              8
found to have breached its duty to “deliver the premises to the Lessor, at the termination

of the lease, in ‘good repair and condition . . . .’” So too did the trial court conclude that

K.C. was “liable to the lessor for damages occasioned by the failure to [so] deliver the

premises . . . .” Moreover, the court ultimately measured the damages recoverable by

Dawkins as the “reasonable cost of repairs to [ ] place the premises in the condition that

[they] would have been” but for the breached duty relating to “waste.”

       Given that K.C. attacked on appeal neither the finding of breached duty to return

the structure in good repair and condition nor the conclusion that K.C. was liable to

Dawkins for damages occasioned by the failure to so return the property, both bind this

court and the litigants. And, to the extent that the formula utilized when measuring

damages attributable to a breached duty to return property in good repair is the reasonable

costs of repair or of returning the premises to the obligated condition, see Dunlap v. Mars

Plumbing Supply Co., 504 S.W.2d 917, 918 (Tex. Civ. App.--San Antonio 1973, no writ)

(stating that the damages arising from breaching the duty to return property in good

condition and repair is the cost of repairs to place the edifice in the obligated condition),

Bariod Div., Nat’l Lead Co. v. Early, 390 S.W.2d 866, 868 (Tex. Civ. App.--Eastland 1965,

no writ) (stating the same); Whitworth Estate v. Mangels of Texas, Inc., 363 S.W.2d 851,

858 (Tex. Civ. App.--Waco 1962, no writ) (holding the same), and that was the formula

ultimately utilized by the court, we find no harm. 2

                                 Issues Two, Three, and Four

       2
         K.C. acknowledged in its brief that the reasonable costs of repairs was the measure of damages
used to calculate an award to redress a breached duty to return leased premises in good repair.

                                                  9
       Through its remaining issues, K.C. attacks the measure of damages utilized by the

trial court. It initially posits that the correct measure was not the cost of repair but the

difference between the value of the property before and after the injury. Then, it urges that

the ultimate award of $333,000 as the cost of repair lacked legally and factually sufficient

evidentiary basis. Finally, resolution of both of these issues purportedly merits reversal,

says K.C. We again disagree and overrule the contentions.

       Appropriate Measure of Damages

       Assuming arguendo that the measure of damages applicable to waste is the

difference in value before and after the injury, it is not viz-a-viz breached duty to repair, as

illustrated above. Again, when attempting to recompense a breached duty to return in

good repair, the measure is the costs of repairing the building or returning it to the

obligated condition. Dunlap v. Mars Plumbing Supply Co., supra; Bariod Div., Nat’l Lead

Co. v. Early, supra; Whitworth Estate v. Mangels of Texas, Inc., supra. And, as was also

discussed above, the trial court found that K.C. breached its duty to return the property in

good repair (a finding K.C. does not dispute on appeal). So, because the measure of

damages is the cost of repair when attempting to recompense a breached duty to repair

and because the trial court ultimately utilized that measure in calculating damages, we

again find that K.C. suffered no harm.

       In short, the court was entitled to award damages for waste or breach of the duty

to return the property in good repair. The damages eventually awarded comported to

those recoverable for breached duty to return in good repair, irrespective of how the court

characterized them. So, we cannot say that K.C. was harmed.

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       Legal and Factual Sufficiency of the Evidence Supporting the Damage Award

       As to the legal and factual sufficiency of the damage award, we apply the standard

discussed in Raw Hide Oil & Gas, Inc. v. Maxus Exploration Co., 766 S.W.2d 264, 275-76

(Tex. App–Amarillo 1988, no writ), and refer the litigants to that case for an explanation of

same. Furthermore, the court found the cost to repair the premises and place it in the

condition it should have been in was $333,000. That amount approximated the sum

derived by multiplying 11,000 by $30. Moreover, the number 11,000 represented the

number of square feet in the building which were affected by K.C.’s demolition efforts,

while the number $30 represented the approximate cost of repairing the premises to the

condition of mid-range retail space. Given this, we hold that there is some evidence of

record supporting the trial court’s damage calculation.

       As to the contention regarding factual insufficiency, we note that Dawkins’ expert

was unable to say with certainty what the actual cost of repair would be. Much depended

upon the desires of the tenants which would ultimately rent the building. Thus, he

proposed a range of $30 to $40 dollars a square foot. That amount was far less than the

$450,000 plus it would have cost to repair the building to the state of a racquetball club.

Moreover, in adopting the low portion of the $30 to $40 range and awarding damages of

$333,000, the trial court implicitly concluded that K.C. did not have to repair the building

to its status as a racquetball club, i.e. repair it to its original identity. Rather, it implicitly

held that the tenant need only have repaired the building to the state of retail space

available for sublet. And, that state was the one contemplated by the parties when they

executed the lease extension. So, in effect, by awarding damages equal to the amount

                                               11
needed to create retail space available for sublet, the trial court awarded damages equal

to the cost of restoring the edifice to the obligated condition, and, after all, that is the

measure of damages applicable to redressing a breached duty to repair and return the

property in good condition. Dunlap v. Mars Plumbing Supply Co., 504 S.W.2d at 918.

                                            12
       Additionally, it is clear that damages need not be established with mathematical

precision. Gulf Coast Inv. Corp. v. Rothman, 506 S.W.2d 856, 858 (Tex. 1974); Oyster

Creek Fin. Corp. v. Richwood Invs. II, Inc., 957 S.W.2d 640, 649 (Tex. App.–Amarillo 1997,

pet denied). Rather, one need only bring forward the best evidence of the damage of

which the situation admits and from which reasonable inferences may be made. Id. Here,

to repair the building to its condition at the time the lease was executed would be to do that

which was never contemplated under the lease. Again, all intended at that time that the

premises would be converted into retail space available for sublet to third-parties. And,

because it was not previously retail space as contemplated by the parties, Dawkins’ expert

could only approximate the range of the costs involved in placing the building in the

obligated condition. Admittedly, the actual costs could vary given the dictates of potential

lessees. Yet, the opinion rendered by the expert was based upon his experience in

building “mid-range” retail space. Under these circumstances, the opinion is susceptible

to consideration as the best evidence of the damage and provided basis for the fact-finder

to reasonably infer the cost of repair. Thus, the evidence supporting the trial court’s

determination, when tested against the entire record, was not so weak nor was the sum

awarded so contrary to the overwhelming weight of the evidence so as to render the

finding clearly wrong or manifestly unjust.

       Accordingly, for the reasons stated above, we affirm the judgment of the trial court.

                                                                 Brian Quinn
                                                                   Justice

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