Court Opinion

ID: 4054143
Source: CourtListenerOpinion
Date Created: 2016-09-29 04:57:24.62142+00
Date Added: 2024-06-11T13:59:03.769714
License: Public Domain

ACCEPTED
                                                                          01-14-00764-CV
                                                                FIRST COURT OF APPEALS
                                                                        HOUSTON, TEXAS
                                                                    4/16/2015 12:50:27 PM
                                                                      CHRISTOPHER PRINE
                                                                                   CLERK

                       No. 01-14-00764-CV

                                                 FILED IN
                                          1st COURT OF APPEALS
                IN THE COURT OF APPEALS       HOUSTON, TEXAS
             FOR THE FIRST DISTRICT OF TEXAS
                                          4/16/2015 12:50:27 PM
                                          CHRISTOPHER A. PRINE
                                                   Clerk

           MAGNOLIA FINLAY AND ANDREW FINLAY,
                                    Appellants,
                           v.

                     ELIZABETH BLANTON,
                                      Appellee.

                      APPELLEE’S BRIEF

       From the County Civil Court of Harris County, Texas,
      County Court at Law No. 1, Trial Court Case No. 1047130

FRANK O. CARROLL III
TBA No. 24082785
MIA B. LORICK
TBA No. 24091415
Roberts Markel Weinberg Butler Hailey PC
2800 Post Oak Blvd., 57th Floor
Houston, Texas 77056
Tel: (713) 840-1666
Fax: (713) 840-9404
fcarroll@rmwbhlaw.com
mlorick@rmwbhlaw.com
ATTORNEYS FOR APPELLEE
ELIZABETH BLANTON

                ORAL ARGUMENT REQUESTED
            IDENTITIES OF PARTIES AND COUNSEL

APPELLANTS:

MAGNOLIA FINLAY AND ANDREW FINLAY

Pro Se:

7542 Oakwood Canyon Drive
Cypress, Texas 77433

APPELLEE:

ELIZABETH BLANTON

Appellate Counsel:

Frank O. Carroll III
Mia B. Lorick
Roberts Markel Weinberg Butler Hailey PC
2800 Post Oak Blvd., 57th Floor
Houston, Texas 77056

Trial Counsel:

Dustin C. Fessler
Roberts Markel Weinberg Butler Hailey PC
2800 Post Oak Blvd., 57th Floor
Houston, Texas 77056

                                ii
                REQUEST FOR ORAL ARGUMENT

     Pursuant to Appellate Procedure Rule 52.8(b)(4), Appellee

respectfully requests oral argument on belief it will materially aid the

Court in determination of the legal issues presented for review.

                                   iii
                                  TABLE OF CONTENTS

IDENTITIES OF PARTIES ...................................................................... ii

REQUEST FOR ORAL ARGUMENT ......................................................iii

TABLE OF CONTENTS .......................................................................... iv

TABLE OF AUTHORITIES ..................................................................... vi

RECORD REFERENCES ...................................................................... viii

STATEMENT OF THE CASE ................................................................. ix

RESPONSE TO ISSUES PRESENTED ................................................... x

SUMMARY OF THE ARGUMENT .......................................................... 1

STATEMENT OF FACTS ......................................................................... 2

PROCEDURAL BACKGROUND.............................................................. 5

ARGUMENT AND AUTHORITIES ......................................................... 6

        I.      STANDARD OF REVIEW ...................................................... 6

        II.     THE TRIAL COURT DID NOT ERR IN ENTERING A
                TAKE NOTHING JUDGMENT ............................................. 7

        III.    THE TRIAL COURT DID NOT ERR IN EXCLUDING
                INADMISSIBLE EVIDENCE AND TESTIMONY .............. 10

        IV.     APPELLANTS DID NOT RAISE THE ISSUES OF
                UNTIMELY REPAIRS, FORGERY, OR ERRORS IN THE
                LEASE IN THE TRIAL COURT; THEREFORE, THESE
                ISSUES ARE IMPROPER ON APPEAL .............................. 12

PRAYER .................................................................................................. 15

                                                    iv
CERTIFICATE OF COMPLIANCE ........................................................ 16

CERTIFICATE OF SERVICE................................................................. 16

                                            v
                             TABLE OF AUTHORITIES

Case Law:
Bank of Garvin v. Freeman,
  107 Tex. 523 (1915) .......................................................................... 13

Cain v. Bain,
   709 S.W.2d 175, 176 (Tex. 1986) ........................................................ 6

Croucher v. Croucher,
   660 S.W.2d 55 (Tex. 1983) ................................................................. 6

Haden v. Sacks,
  332 S.W.3d 503 (Tex. App.—Houston [1st Dist.] 2009) .................. 14

Phelps v. Connellee,
   285 S.W. 1047 (Tex. 1926) ......................................................... 13, 14

Ortiz v. Jones,
   917 S.W.2d 770, 772 (Tex. 1996) ........................................................ 6

Pulley v. Milberger,
   198 S.W.3d 418 (Tex. App.—Dallas 2006).................................. 6, 7, 8
Wilson v. O’Connor,
   555 S.W.2d 776, 780-81 (Tex. Civ. App.—Dallas 1977, writ dism’d).. 7

Statutes:
   Tex. Prop. Code § 92.103 ................................................................... 15
   Tex. Prop. Code § 92.109 ............................................................. 7, 8, 9
   Tex. Prop. Code § 92.109(c).................................................................. 8

Rules:
   Tex. R. Evid. 801 ............................................................................... 10
   Tex. R. Evid. 611(a) ........................................................................... 11
   Tex. R. Civ. P. 47 ......................................................................... 12, 13

                                                 vi
Tex. R. Civ. P. 94 ......................................................................... 12, 13
Tex. R. Civ. P. 166a(c) ....................................................................... 14

                                             vii
                      RECORD REFERENCES

Citations in this Appellee’s Brief to the parties are as follows:

Appellants Magnolia Finlay and Andrew Finlay will be referred to as
“the Finlays” or “Appellants.”

Appellee Elizabeth Blanton will be referred to as “Blanton” or
“Appellee.”

Citations in this Appellee’s Brief to the record are as follows:

CR – Clerk’s Record (i.e. CR [page]; e.g. CR 1)

RR – Reporter’s Record (i.e. RR [page]; e.g. RR 1)

Supp. RR – Supplemental Reporter’s Record (i.e. Supp. RR [page]; e.g.
Supp. RR 1)

Appellants’ Brief – Magnolia Finlay and Andrew Finlay Appellants’
Brief (i.e. Appellants’ Brief [page]; e.g. Appellants’ Brief 1)

                                   viii
                      STATEMENT OF THE CASE

Nature of the case:        This appeal arises from an action brought
                           by the Finlays against Blanton, in which
                           the Finlays claimed Blanton violated
                           Section 92.109 of the Texas Property Code
                           because she did not return the Finlays’
                           security deposit at the end of the lease term.

Trial Court Disposition:   The Finlays filed suit against Blanton
                           alleging a violation of Section 92.109 of the
                           Texas Property Code. (CR 4–5). On March
                           24, 2014, the Justice Court, Precinct 5,
                           Place 2, entered judgment against Blanton.
                           (CR 38). Blanton appealed to Harris County
                           Court at Law No. 1, and the case was set for
                           trial de novo on August 11, 2014. (Supp. RR
                           1). The county court entered a take nothing
                           judgment on August 12, 2014. (CR 115).

Trial Court:               County Civil Court of Harris County, Texas,
                           County Court at Law No. 1, Trial Court
                           Case No. 1047130.

                                  ix
     RESPONSE TO APPELLANTS’ ISSUES PRESENTED

1.   The trial court did not err in entering a take nothing judgment.

2.   The trial court did not err in excluding inadmissible evidence and
     testimony.

3.   Appellants did not raise the issues of untimely repairs, forgery, or
     errors in the lease in the trial court; therefore, these issues are
     improper on appeal.

                                   x
                 SUMMARY OF THE ARGUMENT

     The Finlays contend that the trial court erred in entering a take

nothing judgment. However, the Finlays are wrong. First, Blanton

successfully rebutted the presumption of bad faith under Section 92.109

of the Texas Property Code by establishing that she had a reasonable

belief that she could use the Finlays’ security deposit to offset some of

the money due and owing to her by the Finlays. Blanton also provided

testimony that she is an amateur lessor who did not know about the

requirement to provide a list of itemized deductions. Second, the trial

court properly excluded inadmissible evidence and testimony under

Texas Rules of Evidence 801 and 611(a). Accordingly, the trial court did

not err.

     The Finlays attempt to assert issues of untimely repairs, perjury,

and errors in the lease agreement for the first time on appeal. These

issues were not properly preserved in the trial court and are therefore

waived on appeal.

                                    1
                       STATEMENT OF FACTS

      This appeal arises from an action brought by the Finlays against

Blanton, in which the Finlays claimed Blanton violated Section 92.109

of the Texas Property Code because she did not return their security

deposit at the end of the lease.

      Appellee, Blanton, is the owner and landlord of the property

located at 21343 Hadrian Drive, Katy, Texas 77449 (the “Property”).1

The Property is Blanton’s only rental property.2 On March 23, 2012,

Blanton and Appellants—the Finlays—entered into a residential lease

agreement for the Property.3 The lease agreement was a Texas

Association of Realtors form lease and therefore provided for the

duration of the lease, the amount of rent to be paid, and instructions on

how to send rent to Blanton.4 Because Blanton lives primarily in

California, the lease agreement instructed the Finlays to deposit their

rent payments into a USAA Federal Savings Bank account.5

        The Finlays timely paid their rent into the USAA account at the

beginning of the lease; however, in June of 2012, the Finlays failed to

1 CR 59.
2 CR 59.
3 CR 59.
4 CR 43–58.
5 CR 59.

                                    2
comply with the lease agreement and mailed their rent to Blanton’s

home address.6 Blanton emailed the Finlays and cited to the provisions

in the lease agreement that require payment to be made into the USAA

account.7 Blanton explained that she would allow the payment this time

but, going forward she would apply the penalties stipulated in the lease

to any payments not made in accordance with the lease terms.8 Despite

the email, the Finlays continued to violate the lease by making late rent

payments.9 Blanton assessed late fees and charges for the late rent

payments. The total amount owed to Blanton by the end of the lease

term was $9,416.66.10

      Based on the lease agreement, Blanton did not return the security

deposit of $1500.00 to the Finlays, but rather, used the $1500.00 as an

offset to the amount owed to her under the lease agreement.11 The

Finlays subsequently filed suit against Blanton asserting a violation of

6 CR 17.
7 CR 17.
8 CR 17.
9 CR 60.
10 Supp. RR 57.
11 CR 60.

                                    3
Section 92.109 of the Texas Property Code—bad faith retention of a

security deposit.12

12   CR 4–5.
                                4
                     PROCEDURAL BACKGROUND

      The Finlays filed suit against Blanton alleging a violation of

Section 92.109 of the Texas Property Code.13 On March 24, 2014, the

Justice Court, Precinct 5, Place 2, entered a judgment against

Blanton.14 Blanton appealed to Harris County Court at Law No. 1, and

the case was set for trial on August 11, 2014.15 The county court entered

a take nothing judgment on August 12, 2014.16

13 CR 4–5.
14 CR 38.
15 Supp. RR 1.
16 CR 115.

                                    5
                  ARGUMENTS AND AUTHORITIES

I.    STANDARD OF REVIEW

      When an appellant challenges the factual sufficiency of the

evidence to support an adverse finding on which it did not have the

burden of proof, the appellant must demonstrate there is insufficient

evidence to support the adverse finding.17 In reviewing a factual

sufficiency challenge, an appellate court considers and weighs all of the

evidence in support of and contrary to the trial court’s finding and will

set aside the verdict only if it is so contrary to the overwhelming weight

of the evidence as to be clearly wrong and unjust.18

      When conducting a factual sufficiency review of a trial court’s

finding, an appellate court will not pass on the credibility of the

witnesses or substitute its own judgment for the trier of fact. 19 The

amount of evidence necessary to affirm a judgment is far less than that

necessary to reverse a judgment.20

17 Pulley v. Milberger, 198 S.W.3d 418, 426 (Tex. App.—Dallas 2006, pet. denied)
(citing Croucher v. Croucher, 660 S.W.2d 55 (Tex. 1983)).
18 Id. (citing Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996); Cain v. Bain, 709
S.W.2d 175, 176 (Tex. 1986)).
19 Id. at 427.
20 Id.

                                       6
II.   THE TRIAL COURT DID NOT ERR IN ENTERING A TAKE
      NOTHING JUDGMENT

      Appellants claim that the trial court “abused its discretion by

misapplying Texas Property Code § 92.109.”21 Specifically, Appellants

claim that Blanton did not rebut the presumption of bad faith under

Section 92.109.22

      Although there is a presumption of bad faith when a landlord does

not return a security deposit, Texas appellate courts have held that a

landlord can defeat the presumption of bad faith, by proving her good

faith, i.e., honesty in fact in the conduct or transaction concerned.23

And, “evidence that a landlord had reason to believe she was entitled to

retain a security deposit to recover reasonable damages is sufficient to

rebut the presumption of bad faith created under the Texas Property

Code.”24 Other evidence may include that the landlord is an amateur

lessor—because the residence is her only rental property—and, the

landlord has no knowledge of the requirement to submit an itemized list

21 Appellants’ Brief at 11.
22 Id.
23 Pulley v. Milberger, 198 S.W.3d 418, 426 (Tex. App.—Dallas 2006, pet. denied)

(Wilson v. O’Connor, 555 S.W.2d 776, 780-81 (Tex. Civ. App.—Dallas 1977, writ
dism’d)).
24 Id.

                                         7
of all deductions from the security deposit.25 Pursuant to Section 92.109,

if the landlord proves the reasonableness of retention of the security

deposit, the presumption of bad faith is successfully rebutted.26 Blanton

successfully rebutted the bad faith presumption under Section 92.109.

      During trial the following testimony was elicited:

 Question      Now, Ms. Blanton, again, how many rental properties do
               you own?

 Answer        One.

 Question      Your testimony was that you had no knowledge of the
               requirement that you needed to submit an itemized list of
               all deductions?

 Answer        Correct.

 Question      Do you think you gave fair notice to the Finlays during
               the course of the lease that they were incurring late
               charges?

 Answer        Yes.

 Question      Is it your sole assertion that the security deposit of $1500
               was exceeded by the past due rent?

 Answer        Correct.27

25 Id.
26 Tex. Prop. Code § 92.109(c).
27 Supp. RR 58-59.

                                      8
        The Finlays owed over nine thousand dollars in back rent and late

fees.28 Because the Finlays’ security deposit was $1500.00, Blanton

believed it was reasonable to retain the Finlays deposit as an offset to

amounts due and owing to her. Blanton testified that she gave fair

notice to the Finlays during the course of the lease that they were

incurring late charges and therefore, Blanton acted in good faith in

assessing such fees. The above testimony further establishes that the

Property is Blanton’s only rental property—making her an amateur

lessor—and, she was not aware of the requirement to provide an

itemized list of deductions from the security deposit.

        Blanton’s testimony is sufficient to rebut the presumption of bad

faith under Section 92.109 of the Texas Property Code as well as

existing common law. Therefore, Appellants cannot show that the

evidence is insufficient. Because the facts are sufficient to support the

trial court’s finding that the presumption of bad faith was successfully

rebutted, this Court should affirm the trial court’s take nothing

judgment.

28   Supp. RR 57.
                                     9
III. THE TRIAL COURT DID NOT ERR IN EXCLUDING
     INADMISSIBLE EVIDENCE AND TESTIMONY

         The Finlays claim that the trial court abused its discretion by

excluding exhibits as hearsay and not allowing Mr. Finlay to testify

while Ms. Finlay was on the stand. However, Judge Mayfield did not err

because her rulings were in accordance with the Texas Rules of

Evidence.

         Pursuant to Texas Rule of Evidence 801, “hearsay is an out of

court statement, made by someone not now testifying, that is being

offered for the truth of the matter asserted.”29 The Finlays offered into

evidence bank statements, bank letters, deposit receipts, an invoice,

and internet printouts.30 Counsel for Blanton objected to the offered

exhibits as hearsay due to the exhibits containing out of court

statements that were being offered for the truth of the matter asserted.

The Finlays failed to provide an exemption or exception to Rule 801,

thus making the offered evidence inadmissible hearsay. As a result, the

trial court did not err when it excluded the hearsay evidence, as the

trial court followed the Texas Rules of Evidence.

29   Tex. R. Evid. 801.
30   See Appellants’ Brief at 17.
                                     10
      The Finlays further claim that the trial court abused its discretion

by not allowing Mr. Finlay to testify while Ms. Finlay was on the stand.

However, the trial court was again following the Texas Rules of

Evidence. Texas Rule of Evidence 611(a) states “[t]he court should

exercise reasonable control over the mode and order of examining

witnesses and presenting evidence so as to make those procedures

effective for determining the truth and to avoid wasting time.”31

      At the relevant time, Ms. Finlay was on the stand testifying about

when her and her husband first incurred late fees for late rent

payments.32 Ms. Finlay said she thought it was May of 2012 but she

was not sure.33 Mr. Finlay—from the gallery of the courtroom—stated,

“I believe it was before August.”34 Judge Mayfield responded by stating:

      Okay. Okay. Hang on. We do have a procedure we abide by,
      so I can’t have you speaking out there from the table and the
      record gets muddled when that happens. So, she’s on the
      stand right now so I need to hear from her only. Okay.35

The Finlays use the above statement by Judge Mayfield to assert that

the trial court abused its discretion because it did not allow Mr. Finlay

31 Tex. R. Evid. 611(a).
32 Supp. RR 42.
33 Supp. RR 42.
34 Supp. RR 43.
35 Supp. RR 43.

                                    11
to testify at that time. But Judge Mayfield was merely exercising

reasonable control over the mode of testimony. Because Mr. Finlay was

not sworn in as a witness, the court exercised reasonable control by

preventing his unsworn testimony on the record. The court also

exercised reasonable control by preventing an unclear and confusing

trial record.

         As a result, the trial court did not err in not allowing Mr. Finlay to

testify because the trial court followed the Texas Rules of Evidence.

IV.      APPELLANTS DID NOT RAISE THE ISSUES OF
         UNTIMELY REPAIRS, FORGERY, OR ERRORS IN THE
         LEASE IN THE TRIAL COURT; THEREFORE, THESE
         ISSUES ARE IMPROPER ON APPEAL

         The Finlays’ second, third, and fifth issues on appeal request this

Court to litigate alleged defenses or causes of action not presented to

the trial court. Specifically, the Finlays raise the issue of untimely

repairs, forgery, and errors in the lease agreement for the first time on

appeal.

           The Texas Rules of Civil Procedure govern the guidelines for

properly pleading a cause of action or defense.36 A party wishing to

assert a claim for relief must do so in either an original petition,

36   Tex. R. Civ. P. 47; Tex. R. Civ. P. 94.
                                               12
counterclaim, cross-claim, or third party claim which shall contain: (1) a

short statement of the cause of action sufficient to give fair notice; (2) a

statement that the damages sought are within the jurisdiction of the

court; and, (3) a statement that the party seeks monetary relief within a

specific monetary recovery category.37 Likewise, a party wishing to

assert an affirmative defense must do so in accordance with Rule 94—

by affirmatively pleading “a matter that warrants avoidance or

affirmative defense.”38

      The Texas Supreme Court has long established that in order for

the trial court to render a judgment, the basis of the judgment must

have been pled in the trial court pursuant to the Texas Rules of Civil

Procedure.39 Specifically, in Bank of Garvin v. Freeman, the Texas

Supreme Court stated:

      Should we allow a defeat of plaintiff’s recovery because of the
      existence of a defense, however sound in law, not pleaded by
      the defendant, the judgment of the court would then not
      conform to the pleadings. This would be wrong in principle,
      and in open conflict with the statute.40

37 Tex. R. Civ. P. 47.
38 Tex. R. Civ. P. 94.
39 Phelps v. Connellee, 285 S.W. 1047, 1048 (Tex. 1926); Bank of Garvin v. Freeman,

107 Tex. 523, 530 (Tex. 1915).
40 Bank of Garvin, at 529.

                                        13
      In Phelps v. Connellee, the Texas Supreme Court followed this

reasoning when analyzing the appellate court’s decision to reserve on

defensive matters not specifically pled in the trial court.41 The court

held “it is elementary that an appellate court will not reverse a case,

which should otherwise be affirmed, on an issue not pleaded in the trial

court.”42

      In Haden v. David J. Sacks, this Court agreed and declined to

reverse a motion for summary judgment, relying on the same reasoning

as the Texas Supreme Court.43 This Court held that issues not expressly

presented to the trial court by written motion, answer or other response

shall not be considered on appeal as grounds for reversal of a summary

judgment motion.44

      Here, the Finlays never asserted a cause of action, defense, or

requested relief of any kind as to alleged untimely repairs, forgery, and

errors in the lease agreement. Because the Finlays failed to properly

plead these issues in the trial court, the issues are not preserved on

appeal and cannot form the basis of a reversal of the trial court’s take

41 Phelps v. Connellee, 285 S.W. 1047, 1048 (Tex. 1926)
42 Phelps, at 1048.
43 Haden v. David J. Sacks, P.C., 332 S.W.3d 503, 512 (Tex. App.—Houston [1st

Dist.] 2009, pet. denied).
44 Tex. R. Civ. P. 166a(c); Haden, at 512.

                                       14
nothing judgment. Appellants also assert a misapplication of Texas

Property Code § 92.103; however, this provision was not at issue in the

trial court, and therefore, is not properly before this Court for review.

                                PRAYER

     For the reasons stated above, Appellee Elizabeth Blanton

respectfully requests this Court affirm the take nothing judgment of the

trial court and grant any such other and further relief to which she may

be entitled.

                        Respectfully submitted,

                        ROBERTS MARKEL WEINBERG BUTLER HAILEY PC

                        ____________________________________
                        FRANK O. CARROLL III
                        TBA No. 24082785
                        MIA B. LORICK
                        TBA No. 24091415
                        2800 Post Oak Blvd, 57th Floor
                        Houston, TX 77056
                        Tel: (713) 840-1666
                        Fax: (713) 840-9404
                        fcarroll@rmwbhlaw.com
                        mlorick@rmwbhlaw.com
                        ATTORNEYS FOR APPELLEE
                        ELIZABETH BLANTON

                                     15
                 CERTIFICATE OF COMPLIANCE

     Pursuant to Rule 9.4 i(3) of the Texas Rules of Appellate

Procedure, I certify that the word count in this Appellee’s Brief is 3,114

words.

                                  _________________________________
                                  FRANK O. CARROLL III

                    CERTIFICATE OF SERVICE

      I hereby certify that a true and correct copy of the      foregoing
instrument was served upon the parties listed below by         facsimile,
messenger, regular U.S. Mail, certified mail, return receipt   requested
and/or electronic service in accordance with the Texas          Rules of
Appellate Procedure on this the 16th day of April, 2015.

     Magnolia Finlay and Andrew Finlay
     7542 Oakwood Canyon Drive
     Cypress, Texas 77433

                            _____________________________________
                            FRANK O. CARROLL III

                                    16