Court Opinion

ID: 2987747
Source: CourtListenerOpinion
Date Created: 2015-09-23 00:55:34.763187+00
Date Added: 2024-06-11T12:42:51.632531
License: Public Domain

Affirmed and Memorandum Opinion filed February 7, 2013.

                                     In The

                    Fourteenth Court of Appeals

                              NO. 14-11-00743-CV

                  FAR EAST ENTERPRISES, INC., Appellant

                                       V.

NUMBER ONE SOUTHERN FOOD MART INC. D/B/A PHO NUI BISTRO AND
               MYLINH THI HOANG, Appellees

                     On Appeal from the 157th District Court
                             Harris County, Texas
                       Trial Court Cause No. 2009-49098

                 MEMORANDUM OPINION

      In this commercial lease dispute, Far East Enterprises, Inc. (“Far East”)
appeals a judgment in favor of Number One Southern Food Market Inc. d/b/a Pho
Nui Bistro (“Bistro”) and MyLinh Thi Hoang. Far East contends that the trial
court erred by awarding Bistro (1) damages because there is insufficient evidence
that Far East “failed to comply with the lease agreement prior to appellees’
breach;” and (2) attorney’s fees because Bistro “failed to properly segregate
recoverable from unrecoverable fees.” We affirm the trial court’s judgment.
                                   Background

       Bistro entered into a commercial lease with Far East in March 2007. MyLinh
Thi Hoang signed the lease on behalf of Bistro and personally guaranteed the lease.
Hoang and Joseph Pham are co-owners of Bistro.               The leased space is
approximately 2,800 square feet and is located on the second floor of a building
owned by Far East on Bellaire Boulevard in Houston, Texas. After remodeling the
leased space, Hoang and Pham began operating an upscale restaurant and banquet
hall in the space under the name Paloma Cafe.

       Water leaked through the roof into the restaurant after rainfall in October
2008. Water leaked again into the restaurant in November 2008, requiring the
restaurant to be closed for two weeks for repairs. The roof leaked again after
rainfall in December 2008, and in January, February, and March 2009, causing
damage to the restaurant. Hoang and Pham orally reported each leak either in
person or by telephone to Far East’s property manager, Patrick Dang. According
to Hoang and Pham, Dang said he would “take care of it.” Water nonetheless
continued to leak through the roof every time it rained. April 17, 2009 was the last
day the restaurant operated; on that date, there was ankle-high water in the
restaurant after rainfall.

       Hoang sent Dang a letter on April 20, 2009, informing Dang that she and
Pham were closing the restaurant temporarily because of the water leaks. This was
the first written notice of the problem. On April 27, 2009, Hoang sent a letter
asking Dang to inspect the premises and look at damage to the restaurant.

       On May 9, 2009, Dang addressed a letter to Paloma Cafe asserting that the
leaks were caused by the restaurant’s vent hoods; Dang advised Paloma Cafe to
secure contractors to “assess the situation in question.” On May 22, 2009, Dang
sent a letter to Paloma Cafe stating, “Because of your non-compliance to several of
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our past requests to remedy the water leaks coming from your ceiling, we have
hired a contractor to fix the leaks and prevent any future damages.” Dang attached
the contractor’s invoice and asked Paloma Cafe to “make repairs to such damages
resulting from water penetration from [] vents.” On May 27, 2009, Dang sent
Paloma Cafe “a final invoice for the repairs made.”

      Hoang and Pham moved out of the premises in May 2009 and never
reopened the restaurant. Hoang and Pham did not pay for the repairs made by Far
East and did not pay rent for May or any following month.

      Far East sued Bistro and Hoang on July 31, 2009, alleging claims for breach
of the lease agreement and breach of the guaranty agreement. Bistro and Hoang
counter-sued Far East on February 22, 2010, alleging claims for breach of contract,
breach of implied warranty of suitability, and constructive eviction.

      A jury trial was held on May 16, 2011. The jury found that neither Bistro
nor Far East complied with the lease and that Far East failed to comply with the
lease first. The jury awarded Bistro $2,750 in damages for “repair to the premises
and equipment.”     On May 31, 2011, Bistro filed a motion to sign judgment
“against Far East for the sum of $2,750” and award “$25,000 in attorney fees
pursuant to a stipulation previously filed with the court.”

      Far East filed a response to Bistro’s motion on June 11, 2011, asking the
trial court not to award Bistro attorney’s fees because Bistro failed to segregate its
fees for the three claims it brought. Far East argued that “[s]ince there was no
stipulation by the parties and no finding of fact by the jury of the reasonable and
necessary attorney’s fees for Bistro’s breach of contract claim against Far East, the
Court should not grant any attorney’s fees to Bistro.”

      The trial court signed a judgment on June 17, 2011, awarding Bistro $2,750

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in damages and $25,000 in attorney’s fees “pursuant to a written stipulation
previously filed with the court and incorporated by reference.” Far East filed a
motion for new trial on July 15, 2011, arguing that (1) the evidence is factually
insufficient to support the jury’s finding that Far East first failed to comply with
the lease; and (2) the trial court erred by awarding Bistro “full attorney’s fees
because [Bistro] failed to segregate [its] attorney’s fees from recoverable and
unrecoverable attorney’s fees.”

      The trial court signed an order denying Far East’s motion for new trial on
August 10, 2011. Far East filed a timely appeal.

                                     Analysis

      I.     Legal and Factual Sufficiency

      In its first issue, Far East contends that the evidence is legally and factually
insufficient to support the jury’s finding that Far East “failed to comply with the
lease agreement prior to the appellees’ breach.”

      Legal insufficiency challenges may be sustained only when the record
discloses one of the following situations: (a) a complete absence of evidence of a
vital fact; (b) the court is barred by rules of law or of evidence from giving weight
to the only evidence offered to prove a vital fact; (c) the evidence offered to prove
a vital fact is no more than a mere scintilla; or (d) the evidence establishes
conclusively the opposite of the vital fact. City of Keller v. Wilson, 168 S.W.3d
802, 810 (Tex. 2005) (citing Robert W. Calvert, “No Evidence” and “Insufficient
Evidence” Points of Error, 38 Tex. L. Rev. 361, 362-63 (1960)).

      We must consider evidence in the light most favorable to the verdict and
indulge every reasonable inference that would support it.        Id. at 822. If the
evidence allows only one inference, neither jurors nor the reviewing court may

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disregard that evidence. Id. “[T]he traditional scope of review does not disregard
contrary evidence if there is no favorable evidence (situation (a) above), or if
contrary evidence renders supporting evidence incompetent (situation (b) above) or
conclusively establishes the opposite (situation (d) above).” Id. at 810-11. If the
evidence at trial would enable reasonable and fair-minded people to differ in their
conclusions, then jurors must be allowed to do so. Id. at 822. Accordingly, the
ultimate test for legal sufficiency always must focus on whether the evidence
would enable reasonable and fair-minded jurors to reach the verdict under review.
Id. at 827. Legal sufficiency review in the proper light must credit favorable
evidence if reasonable jurors could do so, and must disregard contrary evidence
unless reasonable jurors could not do so.         Id.   The reviewing court cannot
substitute its judgment for that of the trier of fact if the evidence falls within this
zone of reasonable disagreement. Id. at 822.

      In reviewing factual sufficiency, we must consider and weigh all the
evidence. Golden Eagle Archery, Inc. v. Jackson, 116 S.W.3d 757, 761 (Tex.
2003). We can set aside a verdict only if the evidence is so weak or if the finding
is so against the great weight and preponderance of the evidence that it is clearly
wrong and manifestly unjust. Id.

      The jury is the sole judge of witnesses’ credibility, and it may choose to
believe one witness over another; a reviewing court may not impose its own
opinion to the contrary. See City of Keller, 168 S.W.3d at 819. Because it is the
jury’s province to resolve conflicting evidence, we must assume that jurors
resolved all conflicts in accordance with their verdict. See id. at 820.

      Far East argues that the “entire issue of breach of contract hinges on the [sic]
whether Far East properly conducted repairs to the roof in accordance with the
Lease Agreement.” Far East argues that the lease is “clear and unequivocal,” and

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that Far East’s duty to conduct repairs is triggered by “Bistro’s written notice of
the need for repairs.”

      According to Far East, its duty to repair the roof was not triggered until
April 20, 2009, when Bistro first received written notice from Bistro that the roof
needed repair.     In that regard, Far East claims that Bistro’s prior verbal
notifications of the water leaks and roof problems did not trigger its contractual
duty to conduct roof repairs because (1) the lease provision allowing a tenant to
verbally notify Far East of an emergency is a more general provision that does not
control over the specific written notification provision; and (2) “terms stated earlier
in an agreement must be favored over subsequent terms” and “the written notice is
on page three” while the “provision with the emergency term is contained on
exhibit ‘D’ of the Lease Agreement on page fifteen.” Therefore, Far East contends
that “the earliest Far East could have breached the Lease Agreement was a
reasonable time after April 20, 2009.”

      In construing a contract, the primary concern is to ascertain the parties’
intent as expressed in the instrument. Seagull Energy E & P, Inc. v. Eland Energy,
Inc., 207 S.W.3d 342, 345 (Tex. 2006). To ascertain those intentions, the entire
contract is examined in an effort to harmonize and give effect to all of its
provisions so that none will be rendered meaningless. Id. No single provision
should be given controlling effect, but all provisions must be construed in
reference to the whole. Id.

      The lease provided as follows:

      LESSOR’S REPAIRS
      A. Lessor at its own cost and expense, shall maintain only the roof,
      foundation and the structural soundness of the exterior walls of the
      building of which the Premises are a part in good repair, reasonable
      wear and tear excluded. . . . Lessee shall immediately give Lessor

                                          6
      written notice of defect or need for repairs, after which Lessor shall
      have reasonable opportunity to repair it or cure such defect. Lessor’s
      obligation to maintain the aforementioned items shall be limited
      solely to the cost of such repairs or maintenance or the curing of any
      defect in the same.
      RULES AND REGULATIONS
      1. SERVICE REQUEST: All service requests are to be reported
      promptly and directly to Landlord’s designated agent during normal
      office hours, except emergencies which shall be reported immediately
      at any time. (An answering service will take a message if personnel
      are unavailable).
At trial, Far East’s property manager Dang acknowledged that the lease required
tenants to give written notice of roof repair needs to Far East unless there was an
emergency.    Dang also agreed that the lease allowed tenants to report an
emergency service request verbally. Far East does not dispute on appeal that the
water leaks constituted an emergency and that Pham and Hoang verbally notified
Far East of the water leaks when they occurred in October, November, and
December 2008, as well as in January, February, and March 2009. The evidence
showed that the water leaks were severe enough to cause the restaurant to close
and cause damage to the restaurant floor, walls, ceiling, and equipment.

      The evidence supports a conclusion that the leaks were severe enough to
constitute an emergency authorizing oral notification. The jury heard that Pham
and Hoang orally reported the numerous water leaks to Dang as allowed by the
lease agreement; that Dang was aware of the water leaks starting October 2008;
and that Dang did not undertake roof repairs after he was told about the water leaks
until May 2009. Therefore, there was legally and factually sufficient evidence to
support a finding that Far East’s duty to make roof repairs was triggered by Pham
and Hoang’s verbal notification and that Far East failed to properly conduct repairs
to the roof in accordance with the lease and thus breached the lease.

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      Far East further contends that “there is sufficient evidence to support
Appellees’ breach of the Lease Agreement reaching as far back as September
2008” or “at the latest three days before sending written notice of needed repairs.”
Far East contends that Bistro and Hoang were responsible for 21.72 percent of the
taxes that were assessed on Far East’s building from March 12, 2007 to March 12,
2012. Far East asserts that Hoang testified that “she was provided notice of the
demand to make the tax payments ‘right after the hurricane’ on September 13,
2008,” and that Hoang admitted receiving a demand letter for unpaid taxes by
April 17, 2009.     According to Far East, this evidence establishes that Bistro
breached the lease first.

      Hoang’s trial counsel’s question asked: “[w]hen is the first time the landlord
made a demand that you pay taxes on the lease?” Hoang answered: “It’s far right
after the hurricane, about that time.” Hoang later clarified that the first time she
“had ever been given a demand for tax payments” was on April 17, 2009, when she
received a letter from Dang. Hoang testified that she never received a demand for
tax payments for the year 2007, and that she was given the first demand for 2008
taxes “sometime on or after March 2 of ’09.” Hoang also testified that, based on
an explanation she received from Dang’s brother at the time she entered the lease,
she believed that the taxes were included in her monthly common area
maintenance payments.

      Because the record contains conflicting evidence, and the jury is the sole
judge of the credibility of the witnesses and the weight to be given to their
testimony, the jury was free to believe that Hoang did not receive any demand for
the payment of taxes before April 17, 2009. This was several months after Hoang
and Pham verbally notified Far East of the water leaks in October, November, and
December 2008, and in January, February, and March 2009, which triggered Far

                                         8
East’s duty to undertake roof repairs.

      Accordingly, the evidence was legally and factually sufficient to support the
jury’s finding that “Far East failed to comply with the lease agreement prior to
appellees’ breach.” We overrule Far East’s first issue.

      II.    Attorney’s Fees

      In its second issue, Far East contends that the trial court erred by awarding
attorney’s fees because Bistro “failed to properly segregate recoverable from
unrecoverable fees.” Bistro and Hoang argue that Far East waived this issue
because it first raised its segregation complaint in its response to Bistro’s Motion to
Sign Judgment and failed to raise it at trial. Assuming without deciding that Far
East properly preserved its segregation complaint for appeal by raising this
complaint in its response, we conclude that this complaint is without merit.

      In response to Bistro’s Motion to Sign Judgment, Far East argued that
“[s]ince there was no stipulation by the parties and no finding of fact by the jury of
the reasonable and necessary attorney’s fees for Bistro’s breach of contract claim
against Far East, the Court should not grant any attorney’s fees to Bistro.” On
appeal, Far East claims “[i]t is beyond dispute that Appellees reasonable and
necessary attorney’s fees stipulated to related solely to work performed on claims
for which attorney’s fees are not recoverable.” Far East also claims that there was
no agreement “as to the amount of Appellees’ reasonable and necessary attorney’s
fees for their claim of breach of contract, and there was no agreement between the
parties mandating that Appellees receive $25,000 upon a successful breach of
contract claim.”

      The stipulation the parties entered into provides as follows:

      W. Reasonable and necessary attorney’s fees for Plaintiff and
      Counter-Defendant is $35,000.
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      X. Plaintiff and Counter-Defendant’s reasonable and necessary
      attorney’s fee would only be recoverable upon an affirmative finding
      by the jury that the Defendants breach the Lease Agreement.
      Y. Reasonable and necessary attorney’s fees for Defendants and
      Counter-Plaintiffs is $25,000.
      Z. Defendants and Counter-Plaintiffs’ reasonable and necessary
      attorney’s fee would only be recoverable upon an affirmative finding
      by the jury that the Defendants breach the Lease Agreement.
      Contrary to Far East’s contention, the stipulation clearly states that
reasonable and necessary attorney’s fees in the amount of $25,000 will be
recoverable only upon an affirmative finding of a breach of the lease.              The
stipulation makes the recovery of the attorney’s fees dependent upon a finding of
breach of contract; the jury found that Far East first breached the lease. Therefore,
Far East is incorrect in its assertion that “attorney’s fees stipulated to related solely
to work performed on claims for which attorney’s fees are not recoverable;” and
that “there was no agreement between the parties mandating that Appellees receive
$25,000 upon a successful breach of contract claim.”

      Far East also argues that “the stipulation between the parties that Appellees’
‘reasonable and necessary attorney’s fee would only be recoverable upon an
affirmative finding by the jury that the Defendants breach the Lease Agreement’
makes no sense because Appellees were ‘Defendants’ at trial.” Far East further
argues that “[e]ven if the Court construes this as a clerical error, the stipulation
does not extend to the proposition that Appellees would automatically be awarded
all of their attorney’s fees [sic] solely a positive outcome on their claim for breach
of contract.”

      Neither the judgment nor the stipulation quoted above indicate that Bistro
was awarded attorney’s fees for any claims other than the breach of contract claim.
The trial court’s judgment states that Bistro is entitled to reasonable and necessary

                                           10
attorney’s fees in the amount of “25,000 pursuant to a written stipulation
previously filed with the court and incorporated by reference.” Therefore, there is
no support for Far East’s contention that Bistro was awarded “all of their attorney’s
fees” or was awarded attorney’s fees for any claims other than its breach of
contract claim.

      Accordingly, we overrule Far East’s second issue.

                                             Conclusion

      We affirm the trial court’s judgment.

                                                /s/     William J. Boyce
                                                        Justice

Panel consists of Justices Boyce and McCally and Senior Justice Mirabal.1

      1
          Senior Justice Margaret Garner Mirabal sitting by assignment.

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