Court Opinion

ID: 2853271
Source: CourtListenerOpinion
Date Created: 2015-09-04 16:56:24.531937+00
Date Added: 2024-06-11T11:33:56.755258
License: Public Domain

COURT OF APPEALS
                           SECOND DISTRICT OF TEXAS
                                FORT WORTH

                                 NO. 2-07-278-CV

CENTERPOINT APARTMENTS                                                 APPELLANT

                                             V.

JEFFREY L. WEBB                                                          APPELLEE

                                         ------------

         FROM COUNTY COURT AT LAW NO. 2 OF DENTON COUNTY

                                         ------------

                         MEMORANDUM OPINION 1

                                         ------------

                                   I. Introduction

     To paraphrase the Bard, “To be [a lease renewal], or not to be [a lease

renewal].     That is the question.” 2          In one issue, Appellant Centerpoint

Apartments (Centerpoint) appeals the trial court’s take nothing judgment in

     1
         … See T EX. R. A PP. P. 47.4.
     2
         … W ILLIAM S HAKESPEARE, H AMLET act 3, sc. 1.
favor of Appellee Jeffrey L. Webb. At risk are damages of $1,186.67, plus

attorney’s fees of several times that amount. We affirm.

                      II. Factual and Procedural History

      On April 29, 2004, Dale Arms executed a Texas Apartment Association

(TAA) Member form agreement with Centerpoint entitled “Apartment Lease

Contract” (Lease 1). Lease 1’s term began on May 1, 2004, ended November

30, 2004, required thirty days’ written notice of termination or intent to move

out to prevent automatic month-to-month renewal, and provided for $545

monthly rent and prorated rent of $425 for the first month, among other

provisions. On May 1, 2004, Dale Arms’s older brother, Webb, entered a lease

guaranty contract (Guaranty Contract) with Centerpoint, the terms of which are

at issue here.

      On September 29, 2004, Centerpoint entered into a second TAA form

agreement with Arms, also entitled “Apartment Lease Contract” (Lease 2),

which was set to begin on December 1, 2004, the day after the expiration of

Lease 1, and to end on June 30, 2005. Paragraph 3 of Lease 2 provided that

it would automatically renew month-to-month unless either party gave at least

sixty days’ written notice. It also provided that there was no prorated rent

                                      2
amount, but it included an “Addendum for Rental Concessions,” (Addendum)

dated September 29, 2004.3

         Arms fulfilled his contractual obligations under Lease 1; however, he

breached Lease 2. Centerpoint filed suit in the justice court against Webb for

breach of the Guaranty Contract and prevailed. Webb appealed to the county

court.

         During the bench trial, the county court heard testimony and argument

and reviewed evidence regarding whether Lease 2 was a new lease contract or

a renewal of Lease 1. The trial court admitted Centerpoint’s exhibits, including

the Guaranty Contract, Lease 2, and the Addendum. It also admitted Webb’s

exhibits, including the TAA form Lease Contract Guaranty and Lease 1.

         Kendra Heintzelman, Centerpoint’s assistant property supervisor, testified

that the Guaranty Contract “will guarantee renewals, original contract renewals,

         3
             … The Addendum provided as follows:

         Addendum to lease contract dated 9-24-04 between Dale Arms
         and Centerpoint Apartments[.] Rent from 12/1/04 to 6-30-05 will
         be $399.00 per month until 6-30-05. The total concession that
         you will be receiving is $1,022.00. . . . When this lease term ends,
         rent will automatically go to the current street rate. At that time,
         please contact the office to find out what the street rate is or if we
         are offering any discounts at that time.

The underlined portions here and throughout this opinion represent the lines
that were completed by hand.

                                           3
roommate additions, deletions, modifications, apartment number changes.” She

also testified that Centerpoint had modified TAA’s Lease Contract Guaranty

form, which was admitted into evidence to compare to the Guaranty Contract,

particularly the “[v]erbiage regarding renewals, amendments, modifications, unit

number changes.” She testified that Centerpoint did not use a TAA renewal

lease form, that the guarantor’s obligation terminates when the apartment is

vacated, and that the guarantor’s rights were in the lease contract.        She

testified that she believed that Lease 2 was a renewal. Webb testified that he

understood the Guaranty Contract to be only for a six month period.

      At the trial’s conclusion, the trial court held that Webb was not subject

to liability under the Guaranty Contract, stating,

      The document that the apartment commission has chosen to use
      is a document entitled Apartment Lease Contract. It does not, in
      any way, indicate that it is a renewal. That the apartment complex
      chooses to use that as its vehicle for continuation of occupancy by
      tenants in this action does not change it into a renewal contract.
      It is not labeled as such. . . . And the Court is going to strictly
      construe the language of the documents that these parties have
      signed. Therefore, I do not find that the Lease Contract Guaranty,
      . . . extends to the subsequent document, . . . says date of Lease
      Contract, 9/24/04, with the starting date being December 1, 2004.
      So the judgment is for the Defendant in this action.

This appeal followed.

                                       4
                                  III. Analysis

      In its sole issue, Centerpoint argues that the trial court erred by rendering

judgment in favor of Webb, claiming that it established as a matter of law that

Webb breached the Guaranty Contract. Specifically, Centerpoint claims that

the Guaranty Contract’s express terms extended Webb’s liability to include a

breach of a lease renewal or any leases signed by Webb’s brother, that the

lease contract title was not dispositive of an intent to renew or to discontinue

Webb’s guarantor liability, and that Centerpoint established at trial all of the

elements of a breach of guaranty claim.

A. Standard of Review

      We review de novo a trial court’s conclusions of law with regard to

contract interpretation. See MCI Telecomm. Corp. v. Tex. Utils. Elec. Co., 995
S.W.2d 647, 650–51(Tex. 1999); Huntley v. Enon Ltd. P’ship, 197 S.W.3d
844, 849 (Tex. App.—Fort Worth 2006, no pet.). We accord no deference to

the lower court’s decision. Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex.

1998).

B. Contract Interpretation

      When interpreting a contract, no single provision taken alone will be given

controlling effect; rather, all the provisions must be considered with reference

to the whole instrument. Citizens Nat’l Bank in Abilene v. Tex. & Pac. Ry. Co.,

                                        5
136 Tex. 333, 150 S.W.2d 1003, 1006, cert. denied, 314 U.S. 656 (1941).

If an instrument is written so that it can be given a definite legal meaning or

interpretation, the court should construe it as a matter of law. Coker v. Coker,

650 S.W.2d 391, 393 (Tex. 1983); Pham v. Mongiello, 58 S.W.3d 284, 288

(Tex. App.—Austin 2001, pet. denied). To achieve this objective, the court

should examine and consider the entire writing in an effort to harmonize and

give effect to all the provisions of the contract so that none will be rendered

meaningless.      Universal C.I.T. Credit Corp. v. Daniel, 150 Tex. 513, 243
S.W.2d 154, 158 (1951).

         The fact that the parties to a contract disagree over the interpretation of

the contract does not necessarily render it ambiguous. Pham, 58 S.W.3d at

288. Likewise, uncertainty or a lack of clarity in the language used in the

contract does not automatically render it ambiguous. Id. And an ambiguity

does not arise simply because the parties advance conflicting interpretations;

rather, for an ambiguity to exist, both interpretations must be reasonable.

Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 861 (Tex. 2000);

Sefzik v. Mady Dev., L.P., 231 S.W.3d 456, 460 (Tex. App.—Dallas 2007, no

pet.).

         1. Guaranty Contract Terms

         The Guaranty Contract provides in pertinent part as follows:

                                          6
      Lease Contract Information . . .
      ABOUT LEASE: Date of Lease Contract . . . 4/29/04 . . .
      Monthly rent for dwelling unit $545 . . .
      Beginning date of Lease Contract: 5/1/04 . . .
      Ending date of Lease Contract: 11/30/04[.]

      ...

      You, as guarantor signing this Lease Contract Guaranty, guarantee
      all obligations of resident(s) under the above Lease Contract,
      including but not limited to rent, late fees, property damage, repair
      costs, animal violation charges, reletting charges, utility payments
      and all other sums which may become due under the Lease
      Contract. You agree that your obligations as guarantor will
      continue and will not be affected by amendments, modifications,
      roommate changes or deletions, unit # changes, renewals or any
      lease agreements which may be agreed to from time to time
      between any of the residents and us (including month to month
      renewal in P.#3 of lease.) Guarantor is responsible for any
      holdovers, (paragraph #32 of lease.) If guarantor gives notice to
      move out, (P.#3 and #37 of lease) and resident renews lease or
      signs a new lease, guarantor’s notice will be considered void.

      ...

      Guarantor unconditionally understands that the guarantor form
      allows the resident the right to renew his or her lease at any time
      he or she desires without approval from guarantor or notification by
      apartment management to guarantor of such renewal. Guarantor
      is responsible for any renewals signed by resident.

      2. Lease Title and Terms

      Centerpoint argues that, contrary to the trial court’s interpretation, Lease

2’s title, “Apartment Lease Contract,” was not dispositive of the parties’ intent

to renew Lease 1 or to continue Webb’s liability. However, while title alone

                                        7
may not be dispositive, we may consider it in interpreting the parties’

intentions. Cf. Sefzik, 231 S.W.3d at 462 (“Texas courts attach greater weight

to the operative clauses of a contract than the captions or titles.”); see also

Enter. Leasing Co. v. Barrios, 156 S.W.3d 547, 549 (Tex. 2004) (recognizing

that in certain cases, courts may consider the title of a contract provision or

section to interpret a contract, although greater weight should be given to the

contract’s operative clauses).

      On its face, Lease 2 does not appear to be a renewal or extension of

Lease 1. Lease 2 is not titled a “renewal” or “extension”; rather, it is titled,

“Apartment Lease Contract,” and purports to set out a new agreement by

stating, “[T]he initial term of the Lease Contract begins on the 1 day of

December, 2004 . . . .”     If Centerpoint had intended for Lease 2 to be a

renewal of Lease 1, it could have easily labeled it as such or otherwise

indicated it somewhere on the contract itself. Heintzelman testified that the

majority of Centerpoint’s forms were TAA and that Centerpoint had modified

the TAA Lease Guaranty Contract “to make the Guaranty what they wanted it

to be.” She provided no testimony with regard to why Centerpoint could not

have labeled any subsequent apartment lease contract a “renewal contract” to

fit the language that she testified Centerpoint had added to TAA’s Lease

Guaranty Contract to create the Guaranty Contract.

                                       8
      Furthermore, the Guaranty Contract specifically references Paragraph 3,

which provides for automatic renewal, in its list of continuing obligations,

stating:

      You agree that your obligations as guarantor will continue and will
      not be affected by amendments, modifications, roommate changes
      or deletions, unit # changes, renewals or any lease agreements
      which may be agreed to from time to time between any of the
      residents and us (including month to month renewal in P. #3 of
      lease.) [Emphasis added.]

      Paragraph 3 in Lease 1 sets out the initial term of the lease and provides,

“This Lease Contract will automatically renew month-to-month unless either

party gives at least 30 days written notice of termination or intent to move-out

as required by paragraph 37.”     [Emphasis added.] Paragraph 3 in Lease 2

requires sixty days’ written notice to prevent automatic renewal.           Both

contracts state under Paragraph 10(5), “Month to month renewal in paragraph

#3 continues indefinitely for cosigners, residents and guarantors until written

notice of intent to vacate is given as required by paragraph #37.” [Emphasis

added.]

      Nothing in either lease provides for any sort of renewal other than the

month-to-month renewal referred to in Paragraph 3. Under the plain terms of

either lease, renewal is automatic; therefore, if Arms had not signed Lease 2,

Lease 1 would have automatically renewed and Webb’s liability would have

                                       9
continued. Instead, Centerpoint and Arms signed Lease 2, which included a

different termination term to prevent automatic renewal and different monthly

rent in the Addendum. To treat Lease 2 as a renewal would require us to

ignore Paragraph 3, which we may not do. See Forbau v. Aetna Life Ins. Co.,

876 S.W.2d 132, 133 (Tex. 1994) (“[E]ach part of the contract should be

given effect.”). Therefore, we conclude that Lease 2 was a new lease, and not

a renewal.

      Centerpoint also contends that the Guaranty Contract language, “any

lease agreements which may be agreed to from time to time,” makes a specific

reference to future transactions and should necessarily extend Webb’s liability

to Lease 2. Webb counters that the “any lease agreements” language in the

Guaranty Contract only refers to Lease 1 because the preceding terms in the

sentence only reference changes to Lease 1, not new leases. The controversial

provision reads as follows:

      You agree that your obligations as guarantor will continue and will
      not be affected by amendments, modifications, roommate changes
      or deletions, unit # changes, renewals or any lease agreements
      which may be agreed to from time to time between any of the
      residents and us (including month to month renewal in P. #3 of
      lease.) Guarantor is responsible for any holdovers, (paragraph #32
      of lease.) If guarantor gives notice to move out, (P.#3 and #37 of
      lease) and resident renews lease or signs a new lease, guarantor’s
      notice will be considered void. [Emphasis added.]

                                      10
      The Guaranty Contract’s language contemplates that Centerpoint and

Arms might renew, modify, or make changes to Lease 1 during Lease 1’s term

without voiding the Guaranty Contract, demonstrated by the section entitled

“Lease Contract Information,” with its specific beginning and ending dates, as

well as the language stating that the guarantor guarantees all obligations “under

the above Lease Contract,” and the language providing for renewals and other

changes under Lease 1.

      However, we have been unable to find language in the Guaranty Contract

that, as a matter of law, would extend Webb’s liability as a guarantor beyond

Lease 1 to new leases between Arms and Centerpoint without Webb giving

“notice to move out.”      Under that one circumstance, if the resident then

“renews lease or signs a new lease, guarantor’s notice will be considered void.”

[Emphasis added.]4 Had Centerpoint wanted to expressly include new leases

in the Guaranty Contract under any other circumstance, it could have added the

word “new” to the clause listing every other type of change to Lease 1:

      4
          … Nothing was produced at trial to show that this exception would
apply.

                                       11
amendments, modifications, roommate changes, unit number changes,

renewals, or holdovers.5

      Therefore, we disagree with Centerpoint’s contention that the “any lease

agreements” language included or contemplated any future contracts between

Arms and Centerpoint. If we were to follow this reasoning, then Lease 1‘s

ending date, which was included in the Guaranty Contract, would be a term

rendered meaningless. See Forbau, 876 S.W.2d at 133. The words “new

lease” are not used anywhere in the “any lease agreements” sentence and the

preceding items in that sentence all refer to changes to Lease 1. Additionally,

the Guaranty Contract makes multiple references to the “Lease Contract” that

is being guaranteed, with a capital L and a capital C; Lease 1 is titled

“Apartment Lease Contract,” as is Lease 2.      However, the sections in the

Guaranty Contract that clarify obligations under Lease 1, including the “any

lease agreements” section, refer to the lease with a lower case “l”—a clear

distinction between the specific “Lease Contract” and any general agreements

that might take place under that Lease Contract. See id. at 133–34 (reciting

the general contract construction rule that the more specific provision will

govern the general).

      5
       … Lease 1 and Lease 2 both provide for extension of the lease contract
term for holdovers, under Paragraph 32.

                                      12
      We interpret the “any lease agreements” language to simply extend

Webb’s liability to any lease changes along the lines of amendments or

modifications that might occur “from time to time” under Lease 1. Cf. Blount

v. Westinghouse Credit Corp., 432 S.W.2d 549, 552–53 (Tex. Civ.

App.—Dallas 1968, no writ) (stating that language regarding “agreements

. . . in force or hereafter made” clearly comprehended guarantor’s intent to

guarantee obligor’s present and future indebtedness in obligor’s usual course

of business (emphasis added)). Accordingly, we hold that Webb was not liable,

as a matter of law, as guarantor under Lease 2. We overrule Centerpoint’s sole

issue.6

                                IV. Conclusion

      Having overruled Centerpoint’s sole issue, we affirm the trial court’s

judgment.

                                                 PER CURIAM

PANEL: MCCOY, HOLMAN, and GARDNER, JJ.

DELIVERED: August 28, 2008

      6
       … Because this is dispositive of Centerpoint’s breach of guaranty claim,
we need not address that portion of Centerpoint’s sole issue. See T EX. R. A PP.
P. 47.1.

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