Court Opinion

ID: 4298290
Source: CourtListenerOpinion
Date Created: 2018-07-26 23:53:59.82628+00
Date Added: 2024-06-11T14:41:08.275803
License: Public Domain

Affirmed and Memorandum Opinion filed July 26, 2018.

                                      In The

                     Fourteenth Court of Appeals

                               NO. 14-16-00162-CV

                         IRMA G. GALVAN, Appellant
                                         V.
 ROSE B. GARCIA, INDEPENDENT ADMINISTRATRIX OF THE ESTATE
           OF RICHARD S. BARBOZA, DECEASED, Appellee

                     On Appeal from the 55th District Court
                             Harris County, Texas
                       Trial Court Cause No. 2009-58820

                   MEMORANDUM OPINION
      In three issues, appellant Irma G. Galvan challenges the trial court’s final
judgment signed after the jury returned a verdict for the appellee on its wrongful
eviction claim. For the reasons below, we affirm.
                                      BACKGROUND
         This dispute involves real property Galvan leased to Richard Barboza. The main
 issue on appeal addresses the effect of Barboza’s 2005 bankruptcy on the underlying
 suit.

I.       Facts

         Barboza sold a tract of land in downtown Houston to Galvan for $18,500 in
 1991. Galvan then leased a portion of the tract to Barboza for 99 years with an option
 to renew for 99 years. The lease did not require Barboza to make any payments to
 Galvan. Barboza operated a metal fabrication business on the leased premises.

         Disputes arose between Galvan and Barboza regarding payment of property
 taxes and maintenance of the leased premises, and Galvan brought a forcible detainer
 action in justice court. The justice court signed a judgment in favor of Barboza and
 Galvan appealed the judgment de novo to the county court at law. Meanwhile, Galvan
 also sued Barboza in district court; the county court action was abated pending
 resolution of the district court proceedings.

         The district court action proceeded to trial in August 2007 and the jury returned
 a verdict in favor of Galvan. The district court signed a final judgment on November
 2, 2007, ordering Barboza to (1) pay Galvan for taxes levied against the leased
 premises, and (2) maintain the leased premises. The district court’s final judgment
 awarded Galvan $2,380.01 in actual damages and $65,000 in attorney’s fees.

         The county court action was reinstated in October 2007. After a bench trial, the
 county court concluded that Galvan was entitled to immediate possession of the leased
 premises and issued a writ of possession. The county court’s final judgment awarded
 Galvan $9,500 in attorney’s fees.

         Barboza died on October 6, 2007. The writ of possession was executed on

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  November 5, 2007. Barboza’s son, Ramsey, was present at the leased premises when
  the writ was executed.1 Ramsey removed equipment, inventory, and other supplies
  from the leased premises in compliance with the writ.

         In August 2009, letters of administration were issued to Rose B. Garcia
  appointing her executrix of Barboza’s estate.

II.      Legal Proceedings

         The first entry in the appellate record is a third amended petition filed by Garcia
  as administratrix of Barboza’s estate; the petition was filed October 28, 2013. The
  petition asserts a claim against Galvan for wrongful eviction alleging that neither the
  lease agreement nor applicable law permitted Galvan to evict Barboza from the leased
  premises.

         The parties proceeded to a jury trial in December 2014. The jury returned a
  verdict for Barboza’s estate on the wrongful eviction claim and awarded it $99,770.02
  in damages.

         Galvan filed a motion for judgment notwithstanding the verdict and asserted that
  the estate’s wrongful eviction claim was barred because Barboza rejected his lease with
  Galvan in his 2005 bankruptcy proceedings. Galvan attached three exhibits to support
  her argument:

         1.     Barboza’s voluntary petition for Chapter 13 bankruptcy filed on April 22,
                2005. Barboza listed his lease with Galvan on Schedule G to the
                bankruptcy petition entitled “Schedule G — Executory Contracts and
                Unexpired Leases.”
         2.     Barboza’s “Uniform Plan and Motion for Valuation of Collateral” dated
                May 5, 2007, and filed May 11, 2007. The Uniform Plan required
                Barboza to assume or reject all outstanding executory contracts.

         1
          Because he shares the same last name as his father, we refer to Ramsey by his first name to
  avoid confusion.

                                                  3
              Paragraph 11 of the Plan provides as follows.

                    11. Executory Contracts. Except as set forth elsewhere in
                    this Plan or in the following sentence, all executory contracts
                    are rejected. The following contracts are assumed.

              Barboza’s lease with Galvan was not listed in the sentence after paragraph
              11, nor was it listed anywhere else in Barboza’s May 2007 Uniform Plan.

       3.     The bankruptcy court’s March 14, 2006 order confirming Barboza’s
              bankruptcy plan. The court’s order states that it is “based on the plan filed
              11/03/2005” listed as “DKT # 17.”

Galvan’s motion also asserted that her 2007 district court and county court judgments
should be offset against the amount awarded to the estate in the present action. The
trial court signed an order denying Galvan’s motion for judgment notwithstanding the
verdict. A handwritten sentence on the order states: “Since Barboza’s bankruptcy was
dismissed under 11 U.S.C. § 349 the lease in question re-vested in Barboza and was
not rejected.”

       The estate filed a motion to disregard and a motion for new trial challenging the
jury’s damages finding. The trial court denied both motions. The trial court signed a
final judgment on November 20, 2015, awarding $99,770.02 in damages in favor of
the estate.

       Both Galvan and the estate timely appealed. In May 2017, Galvan filed with
this court a motion to show authority asserting that Garcia had died and no longer
served as administratrix for the estate. On June 20, 2017, we abated the appeal to
permit the estate’s attorney to “respond[] to the motion to show authority with evidence
of his authority to proceed on behalf of the Estate in this appeal.” The estate’s attorney
filed letters of administration granted to Robert Barboza appointing him administrator
of the estate. We reinstated the appeal on November 15, 2017.

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                                            ANALYSIS

        Galvan asserts in her first issue that Barboza rejected the parties’ lease in his
 Chapter 13 bankruptcy proceedings “causing its termination as a matter of law.”
 Galvan argues that this termination bars the estate’s wrongful eviction claim. In her
 second issue, Galvan asserts that the trial court erred by failing to offset against the
 estate’s $99,770.02 damages award the 2007 district court and county court judgments.

        The estate argues in its cross-appeal that the trial court erred in failing to
 disregard the jury’s damages finding because the finding “is contrary to the great
 weight of the evidence and manifestly unjust.” The estate argues that its evidence
 “established its damages [as] a matter of law to be $330,000.”

        We overrule Galvan’s two issues and overrule the estate’s cross-appeal. We
 affirm the trial court’s final judgment.

I.      Barboza’s Bankruptcy

        Galvan asserts that the trial court erred by signing a judgment in favor of the
 estate on its wrongful eviction claim. Pointing to Barboza’s bankruptcy proceedings,
 Galvan contends that the jury’s liability finding is immaterial because Barboza rejected
 the lease.2

        A jury answer is immaterial when the question “‘should not have been submitted,
 or when it was properly submitted but has been rendered immaterial by other
 findings.’” USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, 506 (Tex. 2018)
 (quoting Spencer v. Eagle Star Ins. Co. of Am., 876 S.W.2d 154, 157 (Tex. 1994)). We

        2
           Galvan preserved this issue for our review by raising it in her post-verdict motion for
 judgment notwithstanding the verdict. See BP Am. Prod. Co. v. Red Deer Res., LLC, 526 S.W.3d
389, 402 (Tex. 2017) (“BP preserved error on the immateriality issue by raising these concerns post-
 verdict in a motion for judgment in disregard, in a motion for judgment notwithstanding the verdict,
 and in a motion for new trial.”).

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review de novo whether a question was rendered immaterial. Hall v. Hubco, Inc., 292
S.W.3d 22, 27-28 (Tex. App.—Houston [14th Dist.] 2006, pet. denied).

      A Chapter 13 bankruptcy plan may provide for the “assumption, rejection, or
assignment of any . . . unexpired lease of the debtor . . . [.]” 11 U.S.C.A. § 1322(b)(7)
(West 2016). But a bankruptcy plan is effective only when confirmed; an unconfirmed
plan does not have any legal effect. See Bullard v. Blue Hills Bank, 135 S. Ct. 1686,
1692 (2015) (plan confirmation “alters the status quo and fixes the rights and
obligations of the parties;” “[w]hen the bankruptcy court confirms a plan, its terms
become binding on debtor and creditor alike”); see also 8 Collier on Bankruptcy ¶
1327.02 (Richard Levin & Henry J. Sommer eds., 16th ed.) (“The provisions of a
confirmed chapter 13 plan bind the debtor and all creditors.” (emphasis added)).

      Here, Galvan contends that Barboza rejected the parties’ lease by failing to list
it in his May 5, 2005 “Uniform Plan and Motion for Valuation of Collateral,” the terms
of which required him to assume or reject all outstanding executory contracts.
Although Galvan supported her argument with reference to Barboza’s Uniform Plan,
she did not submit any evidence showing that this Plan was confirmed by the
bankruptcy court as necessary to give it legal effect. See Bullard, 135 S. Ct. at 1692.

      Galvan submitted as evidence the bankruptcy court’s March 14, 2006 order
confirming one of Barboza’s bankruptcy plans, but the order expressly states that it is
“based on the plan filed 11/03/2005” listed as “DKT #17.” This order does not confirm
the Plan forming the basis of Galvan’s rejection argument, which was filed May 11,
2007, and is listed as “Document 32.” Barboza’s unconfirmed Uniform Plan does not
suffice to show that Barboza rejected the 1991 lease.

      Galvan also points to Barboza’s April 2005 bankruptcy petition to support her
rejection argument and notes that the petition (1) listed Barboza’s “estimated assets”
to be worth “$0 to $50,000;” and (2) did not list the 1991 lease as an asset on the
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  “Summary of Schedules.” According to Galvan, Barboza’s petition shows that he “did
  not believe the lease and/or the leased premises to be of any value” in contrast with the
  damages sought by the estate in the underlying dispute.3

         These excerpts from Barboza’s bankruptcy petition do not establish that he
  rejected the lease in his bankruptcy proceedings. Although the 1991 lease was not
  listed as an asset, the lease was included on Schedule G, entitled “Executory Contracts
  and Unexpired Leases.” Barboza’s failure to list the 1991 lease as an asset does not
  show that he intended to reject it altogether, particularly since the lease was listed in
  the “Unexpired Leases” schedule. Considered as a whole, Barboza’s bankruptcy
  petition does not indicate that he intended to reject the 1991 lease in his bankruptcy
  proceedings.

         We overrule Galvan’s first issue.

II.      Offset

         Galvan asserts in her second issue that the trial court erred by failing to offset
  against the estate’s $99,770.02 damages award the judgments she obtained in the 2007
  district court and county court proceedings. The final judgment signed in the district
  court action awarded Galvan $2,380.01 in actual damages and $65,000 in attorney’s
  fees; the county court’s final judgment awarded Galvan $9,500 in attorney’s fees.

         Mutual judgments generally are subject to offset. Bonham State Bank v. Beadle,
  907 S.W.2d 465, 470 (Tex. 1995). “[S]etoff is an appropriate judicial response to the
  serious practical difficulties encountered when parties have mutual judgments,
  particularly when one of them is impecunious.” Id. at 468; see also Am. Network
  Leasing Corp. v. Corp. Funding-Houston, Inc., No. 01-00-00789-CV, 2002 WL
3
            In its third amended petition, the estate asserts that the lease “has a fair rental or leasehold
  estate value of at least $330,000.00.”

                                                      7
   31266230, at *14 (Tex. App.—Houston [1st Dist.] Oct. 10, 2002, pet. dism’d) (not
   designated for publication) (applying Beadle to offset mutual awards within single
   judgment).

         Here, permitting Galvan to offset her 2007 judgments against the estate’s
   $99,770.02 damages award impermissibly would bypass the statutory scheme in place
   to distribute an estate’s assets. See Tex. Estates Code Ann. § 355.102 (Vernon Supp.
   2017), § 355.105 (Vernon 2014).

         Texas Estates Code section 355.102 classifies and provides priority of payments
   for claims against an estate. See id. § 355.102. A claimant whose claim against the
   estate has not been paid may “petition the court for determination of the claim at any
   time before the claim is barred by an applicable statute of limitations[.]” Id. § 355.105.
   Allowing Galvan to offset the 2007 judgments against the estate’s recovery in this suit
   would circumvent these statutory procedures and priority levels.

         We overrule Galvan’s second issue.

III.     The Jury’s Damages Finding

         The estate challenges in its cross-appeal the sufficiency of the evidence
   supporting the jury’s $99,770.02 damages award and asserts that the finding “is
   contrary to the great weight of the evidence and manifestly unjust.” Citing the
   testimony and report of its expert witness, the estate asserts that its evidence
   “established its damages [as] a matter of law to be $330,000.”

         We construe the estate’s cross-appeal as challenging both the legal and factual
   sufficiency of the evidence supporting the judgment. See, e.g., 2900 Smith, Ltd. v.
   Constellation NewEnergy, Inc., 301 S.W.3d 741, 745 (Tex. App.—Houston [14th
   Dist.] 2009, no pet.). When both the legal and factual sufficiency of the evidence are
   challenged, “we first review the legal sufficiency of the evidence to determine whether

                                               8
there is any evidence of probative value to support the factfinders’ decision.” Wiese v.
Pro Am Servs., Inc., 317 S.W.3d 857, 860 (Tex. App.—Houston [14th Dist.] 2010, no
pet.).

         For a legal sufficiency or “no evidence” challenge, we determine whether the
evidence would permit reasonable and fair-minded people to reach the finding under
review. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). We credit
favorable evidence if reasonable factfinders could and disregard contrary evidence
unless reasonable factfinders could not. Id. We consider the evidence in the light most
favorable to the challenged finding and indulge every reasonable inference that would
support it. Id. at 822. “A party attacking the legal sufficiency of an adverse finding on
an issue on which he has the burden of proof must demonstrate that the evidence
conclusively establishes all vital facts in support of the issue.” Breof BNK Tex., L.P.
v. D.H. Hill Advisors, Inc., 370 S.W.3d 58, 63 (Tex. App.—Houston [14th Dist.] 2012,
no pet.).

         To successfully challenge the factual sufficiency of the evidence supporting an
adverse finding on an issue on which the appellant had the burden of proof, “the
appellant must demonstrate that the adverse finding is against the great weight and
preponderance of the evidence.” Spring Creek Vill. Apartments Phase V, Inc. v. Gen.
Star Indem. Co., 261 S.W.3d 206, 216 (Tex. App.—Houston [14th Dist.] 2008, no pet.).
We set aside the verdict only if it is so contrary to the overwhelming weight of the
evidence that it is clearly wrong and unjust. Dow Chem. Co. v. Francis, 46 S.W.3d
237, 242 (Tex. 2001) (per curiam).

         When faced with conflicting evidence, the factfinder may choose which
witnesses to believe and may resolve inconsistencies in any witness’s favor. Gen. Star
Indem. Co., 261 S.W.3d at 216-17. “[T]he trier of fact is afforded considerable
discretion in evaluating opinion testimony on the issue of damages.” McGalliard v.

                                            9
Kuhlmann, 722 S.W.2d 694, 697 (Tex. 1986); see also PNS Stores, Inc. v. Munguia,
484 S.W.3d 503, 511 (Tex. App.—Houston [14th Dist.] 2016, no pet.).

      “There is no requirement that the evidence show precisely how the jury arrived
at the specific amount awarded,” and a jury’s damages calculation need not rely solely
on an expert’s opinion. Vast Contsr., LLC v. CTC Contractors, LLC, 526 S.W.3d 709,
723 (Tex. App.—Houston [14th Dist.] 2017, no pet.). “We will not disregard a jury’s
damage award merely because the jury’s reasoning in reaching its figures is unclear.”
Enright v. Goodman Distrib., Inc., 330 S.W.3d 392, 403 (Tex. App.—Houston [14th
Dist.] 2010, no pet.).

      We evaluate the sufficiency of the evidence in light of the instructions submitted
to the jury. Houston Mercantile Exch. Corp. v. Dailey Petroleum Corp., 930 S.W.2d
242, 246 (Tex. App.—Houston [14th Dist.] 1996, no writ). Here, the jury was
instructed on damages as follows.

      Question No. 3
      What is the difference, if any, between the fair rental value of the Lease
      premises for the remainder of the Lease term and the amount of rent
      remaining to be paid[?]
      Answer in dollars and cents, if any.

This instruction comports with case law discussing the measure of damages
recoverable for a wrongful eviction claim. See Briargrove Shopping Ctr. Joint Venture
v. Vilar, Inc., 647 S.W.2d 329, 336 (Tex. App.—Houston [1st Dist.] 1982, no writ). In
response to the question, the jury answered “$99,770.02.”

      Evidence at trial showed that the leased premises originally were part of a larger
tract that Barboza sold to Galvan for $18,500 in 1991. Galvan then leased a portion of
the tract to Barboza for 99 years with an option to renew for 99 years; the lease did not
require Barboza to make any payments to Galvan.

                                             10
      The jury heard testimony from the estate’s damages expert Joseph Stanfield, an
independent real estate appraiser. For his valuation of the leased premises, Stanfield
primarily relied on the sales comparison approach, which analyzed prior sales of
similar properties in downtown Houston. Although the valuation was performed in
2010, Stanfield testified that his analysis was retroactive to 2007 when Galvan’s writ
of possession was served at the leased premises. Stanfield concluded that, when the
writ of possession was served in 2007, the fair market value for the remainder of the
1991 lease equaled $330,000.

      Galvan’s counsel vigorously cross-examined Stanfield and elicited testimony
regarding the following factors:

           Stanfield did not see the leased premises in 2007 and performed his
            retrospective valuation in 2010. Stanfield “made an assumption in the
            appraisal that [the leased premises were] substantially in the same
            condition in 2010 . . . .”
           Stanfield did not make a detailed inspection of the metal building on the
            leased premises.
           Stanfield did not value the leased premises with a metal building on it.
           Stanfield valued the leased premises according to its “highest and best
            use” as a “commercial development” combined with other properties.
           Stanfield valued the leased premises as though Barboza owned it, stating
            that “a 99-year lease with a — with another option for 99 . . . is analogous
            to having free ownership of the property.”
           The leased premises had no parking.

The jury has broad discretion to award damages within the range of evidence presented
at trial. McGalliard, 722 S.W.2d at 697; PNS Stores, Inc., 484 S.W.3d at 511. Here,
the evidence showed that the 1991 lease did not require Barboza to make any payments
for the leased premises. See Wood v. Kennedy, 473 S.W.3d 329, 340 (Tex. App.—

                                          11
Houston [14th Dist.] 2014, no pet.) (“price offered by the lessee and accepted by the
lessor” evidence of property’s fair rental value). In contrast, Stanfield testified that the
estate was entitled to recover $330,000 as compensation for the fair market value for
the remainder of the 1991 lease. Stanfield’s conclusion was challenged on cross-
examination and testimony was elicited regarding various factors that could affect the
valuation.

      The jury, charged with evaluating and weighing conflicting evidence, answered
“$99,770.02” in response to Question No. 3. This determination falls within the range
of evidence presented at trial and, as such, is not “so contrary to the overwhelming
weight of the evidence that it is clearly wrong and unjust.” See Dow. Chem. Co., 46
S.W.3d at 242. This record does not support the estate’s claim that its evidence
“established its damages [as] a matter of law to be $330,000.” See Breof BNK Tex.,
L.P., 370 S.W.3d at 63.

      We overrule the estate’s cross-appeal challenging the sufficiency of the evidence
underlying the jury’s damages determination.

                                      CONCLUSION

      We overrule Galvan’s two issues on appeal and overrule the estate’s cross-
appeal. We affirm the trial court’s November 20, 2015 final judgment.

                                         /s/        William J. Boyce
                                                    Justice

Panel consists of Justices Boyce, Donovan, and Jewell.

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