Court Opinion

ID: 6347817
Source: CourtListenerOpinion
Date Created: 2022-06-08 06:11:28.265424+00
Date Added: 2024-06-11T14:57:01.805228
License: Public Domain

REVERSE and RENDER and Opinion Filed June 1, 2022

                                   S  In The
                            Court of Appeals
                     Fifth District of Texas at Dallas
                               No. 05-19-01055-CV

         VIRTUOLOTRY, LLC AND RICHARD BOYD, Appellants
                             V.
              WESTWOOD MOTORCARS, LLC, Appellee

               On Appeal from the 134th Judicial District Court
                            Dallas County, Texas
                    Trial Court Cause No. DC-15-14833

                        MEMORANDUM OPINION
                   Before Justices Schenck, Molberg, and Smith
                           Opinion by Justice Schenck
      This appeal involves a commercial lease dispute. Following a jury trial, the

district court entered judgment in favor of appellee Westwood Motorcars, LLC

(Westwood) on its constructive eviction claim against Richard Boyd (“Boyd”) and

its breach of contract claim against Virtuolotry, LLC (“Virtuolotry”). In ten issues,

Boyd and Virtuolotry urge the trial court erred (1) (2) in awarding compensatory and

exemplary damages against Boyd, (3) (4) in entering a judgment against both when

the lease agreement’s extension provision was an unenforceable agreement to agree,

and Westwood Motorcars abandoned the lease premises, (5) in awarding Westwood

damages that were incurred by Westwood Motors, LLC, an entity distinct from
Westwood, (6) in entering a judgment against them when Westwood failed to

provide a timely written notice of default, (7) in granting Westwood summary

judgment on the issue of whether Virtuolotry provided Westwood written notice of

default, (8) (9) in awarding Westwood a double recovery of lost profits and

additional rent and without testimony from a qualified expert, and (10) in awarding

Westwood attorney’s fees. Because we conclude no evidence supports at least one

element of Westwood’s constructive eviction and breach of contract claims, we

resolve appellants’ fourth issue in their favor, and reverse and render judgment that

Westwood take nothing.      Because all issues are settled in law, we issue this

memorandum opinion. TEX. R. APP. P. 47.4.

                                  BACKGROUND

      In June 2015, Virtuolotry purchased certain commercial property (the

“Premises”) in which Westwood was a tenant. After one extension of the lease term,

Westwood’s tenancy was set to expire on December 31, 2015. An addendum to the

lease allowed the parties to extend the lease term for two additional years, at a

monthly rental rate to be agreed upon by the parties at least 90 days prior to the

expiration of the lease, with a maximum increase of 15% from the prior term. A

renewal of the lease term was to be effective upon notice of renewal unless the lease

had been previously terminated or the tenant was in breach of the lease.

                                        –2–
      On August 25, 2015, Westwood gave notice to Virtuolotry that it wished to

extend the lease. Virtuolotry rejected Westwood’s renewal of the lease claiming it

was in breach of same.

      On December 9, 2015, Westwood filed suit against Virtuolotry in the district

court seeking a declaratory judgment that it had not breached the lease and had

properly extended same for an additional two years.

      On December 31, 2015, Virtuolotry filed a petition for eviction with the

Justice of the Peace and prevailed. Westwood appealed that decision to the county

court. On February 29, 2016, Westwood provided notice to Virtuolotry that it would

leave the Premises at the end of March 2016 and withdrew its appeal, stating it was

doing so “[i]n an effort to avoid wasting the resources of both the parties and the

Court.” On March 22, Virtuolotry locked Westwood out of the Premises. On March

23, Westwood obtained an ex parte writ of reentry. On March 24, the county court

signed an “Agreed Judgment” in which “the Parties stipulate[d] and agree[d] . . . that

possession of the Premises is awarded to [Virtuolotry]” and that “the Clerk of the

Court issue a writ of possession to [Virtuolotry].” On March 25, Westwood removed

its vehicles from the Premises.

      On October 17, 2016, Westwood amended its petition in the district court

adding Boyd as a defendant and asserting Virtuolotry breached the lease by

terminating same, not acknowledging the renewal of the lease, entering the Premises

without permission, and failing to return the security deposit and Virtuolotry and

                                         –3–
Boyd constructively evicted Westwood from the Premises. Further amendments to

Westwood’s pleadings did not materially change the allegations against appellants.

       The district court case proceeded to a several day jury trial in February 2019.

The jury found Virtuolotry breached the lease and caused Westwood damages of

$463,356 for lost profits, $308,875 for the lost benefit of the bargain under the lease,

and $11,500 for its security deposit. The jury also found Virtuolotry and Boyd

constructively evicted Westwood, resulting in damages of $23,331.37 for relocation

expenses and warranting the imposition of exemplary damages against Boyd in the

amount of $538,036.19. On May 20, 2019, the trial court signed a judgment in favor

of Westwood and against Virtuolotry in the amount of $783,731 for breach of

contract, and against Boyd for $23,331.37 in actual damages and $200,000 in

exemplary damages.1 The trial court awarded Westwood attorney’s fees in the

amount of $352,444 as well as interest and costs. Appellants appeal the district

court’s judgment.

                                          DISCUSSION

       In its fourth issue, appellants urge that, by agreeing to the judgment in the

appeal of the order entered by the Justice of the Peace, Westwood voluntarily

   1
     The trial court applied the statutory cap on exemplary damages. See TEX. CIV. PRAC. & REM. CODE
ANN. § 41.008(b) (capping exemplary damages at the greater of (1) noneconomic damages plus two times
economic damages, or (2) $200,000).
                                               –4–
abandoned the premises extinguishing any claim for damages.2                               In doing so,

appellants rely on this Court’s decision in Kemp v. Brenham. No. 05-18-01377-CV,

2020 WL 205313 (Tex. App.—Dallas Jan. 14, 2020, pet. denied) (mem. op.). The

tenant in Kemp vacated the leased premises only after being lawfully evicted, which

this Court concluded conclusively established that Brenham had not abandoned the

property as a direct consequence of the landlord’s acts.3 Id. at *3.

        In abandoning its appeal of the Justice of the Peace’s judgment, Westwood

agreed to the issuance of writ of possession to Virtuolotry and did not identify any

act of Virtuolotry or Boyd as being the cause for its decision to abandon its appeal

and agreement to vacate the Premises and award Virtuolotry possession of same.

Thus, like the tenant in Kemp, Westwood was subject to a lawful eviction, and it

could no longer establish it suffered any damages as a result of Virtuolotry or Boyd’s

actions.

        Moreover, at the time Westwood voluntarily agreed to the judgment in the

county court case, affirmatively representing Virtuolotry had the lawful right to

    2
      Westwood points out that the trial court denied appellants’ request for leave to amend their answer to
assert the affirmative defense of res judicata and that appellants do not challenge that ruling on appeal.
Appellants respond that they are not relying on the defense of res judicata and are instead asserting
Westwood cannot establish the essential element of damages to support its constructive eviction and breach
of contract claims. Accordingly, we need not determine whether Westwood’s claims merged into the
agreed judgment and thus are barred by res judicata. We instead confine our analysis to the abandonment
issue.
    3
     To establish a claim for constructive eviction, a tenant must prove (1) the landlord intended the tenant
no longer enjoy the premises, (2) the landlord’s acts substantially interfered with the tenant’s use and
enjoyment of the premises, (3) the tenant was permanently deprived of use and enjoyment of the premises,
and (4) the tenant abandoned the premises within a reasonable time. Metroplex Glass Ctr., Inc. v. Vantage
Props., Inc., 646 S.W.2d 263, 265 (Tex. App.—Dallas 1983, writ ref’d n.r.e.).
                                                    –5–
possession, it was actively litigating its asserted right of continued possession in the

district court case. By admitting Virtuolotry had the right to possession, without

qualification, Westwood effectively abandoned its constructive eviction claim. See

Houston v. DTN Oper. Co. LLC, No. 4:17-CV-00035, 2017 WL 4653246 at *9 (E.D.

Tex. Sept. 17, 2017) (when tenant moves out without protest, there is no eviction).;

Quitta v. Fossati, 808 S.W.2d 636, 643 (Tex. App.—Corpus Christi–Edinburg 1991,

writ denied) (same).

      With respect to Westwood’s assertion that Virtuolotry breached the lease, the

jury charge included the question, “Did Virtuolotry, LLC fail to comply with the

COMMERCIAL LEASE” and with the trial court having instructed the jury that

Virtuolotry “failed to comply with the COMMERCIAL LEASE if Virtuolotry, LLC

materially interfered with Westwood Motorcars, LLC possession and use of the

leased premises.” By admitting Virtuolotry had the right of possession, and agreeing

to a writ of possession, Westwood is precluded from recovering damages as a result

of an alleged breach premised on the issue of possession. See e.g., Cortez v. Liberty

Mut. Fire Ins. Co., 885 S.W.2d 466, 470 (Tex. App.—El Paso 1994, writ denied).

      We sustain Virtuolotry and Boyd’s fourth issue and pretermit consideration

of their remaining issues. TEX. R. APP. P. 47.1.

                                    CONCLUSION

                                          –6–
      We reverse the trial court’s judgment awarding Westwood damages and

render judgment that Westwood take nothing on its constructive eviction and breach

of contract claims.

                                         /David J. Schenck/
                                         DAVID J. SCHENCK
                                         JUSTICE

191055F.P05

                                       –7–
                                    S
                            Court of Appeals
                     Fifth District of Texas at Dallas
                                   JUDGMENT

VIRTUOLOTRY, LLC AND                           On Appeal from the 134th Judicial
RICHARD BOYD, Appellants                       District Court, Dallas County, Texas
                                               Trial Court Cause No. DC-15-14833.
No. 05-19-01055-CV           V.                Opinion delivered by Justice
                                               Schenck. Justices Molberg and Smith
WESTWOOD MOTORCARS, LLC,                       participating.
Appellee

       In accordance with this Court’s opinion of this date, the judgment of the trial
court is REVERSED and judgment is RENDERED that:

      Westwood Motorcars, LLC take nothing on its claims against
      Virtuolotry LLC and Richard Boyd.

    It is ORDERED that appellant VIRTUOLOTRY, LLC AND RICHARD
BOYD recover their costs of this appeal from appellee WESTWOOD
MOTORCARS, LLC.

Judgment entered this 1st day of June 2022.

                                         –8–