ANNE GARDNER, Justice.
This is a breach of contract case. Appellant CenterPlace Properties, Ltd. (CenterPlace) appeals an adverse judgment following a bench trial in a suit for breach of a lease agreement that CenterPlace filed against Appellee Columbia Medical Center of Lewisville Subsidiary, L.P. d/b/a Medical Center of Lewisville (MCL) and Raymond Dunning.
Ganesh Harpavat, general partner of CenterPlace, formed CenterPlace in 1998 to develop a commercial property complex on three tracts of land that he owned in Flower Mound, Texas. Harpavat's development plan was to construct three medical office buildings referred to as CenterPlace I, CenterPlace II, and CenterPlace III. CenterPlace I was completed in 1998, and CenterPlace II was completed in 2004.
In 2004, CenterPlace and MCL began negotiations for MCL to lease space in CenterPlace II for an ambulatory surgery center or medical and administrative offices. On November 22, 2004, CenterPlace and MCL entered into a ten-year lease (the lease) covering approximately 17,300 square feet, the entire first floor of CenterPlace II (the premises). At that time, MCL planned to build out the premises for use as an ambulatory surgery facility.
Section 10 of the lease provided that "[t]he parties acknowledge and agree that [MCL] may make alterations and improvements to the interior of the Leased Space in order to prepare the Leased Space for use by [MCL] as medical offices and/or an outpatient surgery facility." Another part of Section 10 required that CenterPlace provide MCL an allowance of $536,200 for tenant improvements (the TI funds) to finish out the premises. CenterPlace was required to provide the TI funds to MCL "on or before the Commencement Date, or if Landlord and Tenant shall agree, in installments as the [w]ork progresse[d]."
Section 10(c) of the lease required that MCL, within thirty days of the lease date, submit to CenterPlace for approval "a space plan which in outline form shows the layout and configuration of the Leased Space." If CenterPlace did not make any written comments or objections to the space plan within ten days, the lease provided that CenterPlace was "deemed to have approved" the plan. MCL submitted a space plan for an ambulatory surgical center to CenterPlace on December 21, 2004. The parties disagreed at trial as to whether the space plan provided by MCL complied with the lease's terms, but it is undisputed that CenterPlace did not comment about or object to the space plan within ten days.
Although it had provided a space plan to CenterPlace, MCL did not start finishing out the interior of the premises. MCL presented evidence that it did not find adequate physician interest to support its plans for an ambulatory surgery center and that it proposed to move forward immediately with alternate plans for a diagnostic imaging center and a pediatric urgent-care clinic. CenterPlace expressed its disapproval with MCL's alternate plans, particularly regarding the proposed imaging center as possibly competing with an existing tenant, but Harpavat testified that it was very important to him that MCL had represented to him that it was going to proceed immediately. The parties then disputed whether MCL had breached the lease or fraudulently induced CenterPlace into the lease. The parties' dispute evolved into discussions about amending the lease.
In November 2006, MCL provided a plan to CenterPlace for the imaging center and for a partial finish-out and requested the remaining TI funds. But, according to Harpavat, MCL did not commit to a completion date. In December, Beck Construction Company and MCL met with Harpavat regarding the plans for both the partial and complete finish-out. Harpavat approved moving forward by MCL to obtain the building permit from the city, which MCL expected to take four to six weeks, until sometime in January, and Harpavat verbally approved the partial finish-out. However, MCL did not complete (or even start) construction of either the complete or partial finish-out of the premises by March 15, 2007. From January to May 2007, MCL sought an extension of the March 15, 2007 date, and the parties attempted to negotiate another amendment to the lease.
On May 10, 2007, CenterPlace wrote to MCL, stating its position that MCL had defaulted on the lease by failing to timely provide a new space plan and by failing to obtain all necessary government permits, authorizations, and approvals. CenterPlace gave MCL thirty days to cure the alleged defaults. By letter dated June 13, 2007, CenterPlace declared MCL in default of the lease and the amended lease but stated its intention to keep the leases in effect, and CenterPlace demanded payment of accelerated rent of $3,221,397.50 within seven days. CenterPlace warned MCL that it would remove MCL's signs from the premises at MCL's expense if MCL did not do so within fourteen days. In subsequent letters to MCL, CenterPlace continued to require removal of MCL's signs and stated that "[n]o resolution will include [MCL's] future occupation of the premises."
From the inception of the lease, MCL had paid all rent as due, and it continued to pay rent beyond the agreed completion date of March 15, 2007, through October 2007, while the parties tried to negotiate an extended completion date.
Trial was to the court over thirteen days, after which the trial court signed a judgment that CenterPlace take nothing on its claims
Findings of fact entered in a case tried to the court have the same force and dignity as a jury's answers to jury questions. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex.1991). The trial court's findings of fact are reviewable for legal and factual sufficiency of the evidence to support them by the same standards that are applied in reviewing evidence supporting a jury's answer. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex.1996); Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.1994).
We may sustain a legal sufficiency challenge only when (1) the record discloses a complete absence of evidence of a vital fact; (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) the evidence establishes conclusively the opposite of a vital fact. Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334 (Tex.1998), cert. denied, 526 U.S. 1040, 119 S.Ct. 1336, 143 L.Ed.2d 500 (1999); Robert W. Calvert, "No Evidence" and "Insufficient Evidence" Points of Error, 38 Tex. L.Rev. 361, 362-63 (1960). In determining whether there is legally sufficient evidence to support the finding under review, we must consider evidence favorable to the finding if a reasonable factfinder could and disregard evidence contrary to the finding unless a reasonable factfinder could not. Cent. Ready Mix Concrete Co. v. Islas, 228 S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson, 168 S.W.3d 802, 807, 827 (Tex.2005).
When reviewing an assertion that the evidence is factually insufficient to support a finding, we set aside the finding only if, after considering and weighing all of the evidence in the record pertinent to that finding, we determine that the credible evidence supporting the finding is so weak, or so contrary to the overwhelming weight of all the evidence, that the answer should be set aside and a new trial ordered. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex.1986) (op. on reh'g); Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965).
The trial court found that MCL breached the lease and amended lease by failing to pay rent after November 1, 2007. The trial court also found, however, that
CenterPlace argues in the first part of its first issue that there is legally and factually insufficient evidence to support the trial court's findings that CenterPlace breached the lease by intentionally preventing MCL from entering the premises, thereby also violating property code section 93.002(c). Property code section 93.002(c) states that a commercial landlord "may not intentionally prevent a tenant from entering the leased premises except by judicial process" unless one of three exceptions applies.
On May 10, 2007, CenterPlace gave notice to MCL of alleged default by failing to provide a space plan within thirty days of signing the lease and by failing to obtain all necessary government permits and approvals. CenterPlace advised MCL that it had thirty days to cure the alleged defaults. On June 13, 2007, CenterPlace declared MCL to be in default and made demand that MCL pay $3,213,987.50 in accelerated rent, $7,500 in attorneys' fees, and any additional costs incurred by CenterPlace in reletting the property. The June 13 letter also stated:
On June 14, 2007, CenterPlace's counsel responded by letter to a telephone call and e-mail from MCL's counsel. The June 14, 2007 letter included the following:
Finally, a July 24, 2007 letter from CenterPlace to MCL stated in part that "[c]ontinued discussion related to [MCL]'s future occupancy" was conditioned on specific terms. The conditional terms were not contained in the lease or the amended lease and, if accepted by MCL, would have among other changes prevented MCL from operating a stand-alone imaging center on the premises and required the removal of MCL's signage at MCL's expense until MCL occupied the premises and leased 60% of the total square footage of CenterPlace II.
CenterPlace argues that even though it at all times maintained the key to the property and sent the June 21 letter advising MCL that it no longer had a right to possession of the property, it did not violate section 93.002(c) because it did not intentionally prevent MCL or any of MCL's representatives from access to the property. CenterPlace points to undisputed evidence that CenterPlace had always possessed the key to the property with MCL's consent, that MCL had never objected or requested a key, that CenterPlace had always allowed MCL access to the property when MCL requested it, that MCL did not request access to the property after it received the June 21 letter, and that CenterPlace never denied MCL access to the property.
MCL responds that section 93.002(c) prohibits a landlord from wrongfully excluding a tenant from the property, that the statute does not require a physical act of exclusion before there can be a violation, and that the statute applies to both actual and constructive denials of entry. MCL argues that it had not breached the lease or amended lease as of the June or July 2007 letters and points to the letters from CenterPlace that demanded removal of MCL's signs and unequivocally expressed an intent that MCL no longer occupy the
This part of CenterPlace's first issue presents a question of statutory construction.
Chesser v. LifeCare Mgmt. Servs., L.L.C., 356 S.W.3d 613, 619-20 (Tex.App.-Fort Worth 2011, pet. denied). In addition, we consider "the objective the law seeks to obtain and the consequences of a particular construction." Id. at 620 (citing Tex. Gov't Code Ann. § 311.023(1), (5) (West 2005)). "In enacting a statute, it is presumed that a just and reasonable result is intended." Id. (citing Tex. Gov't Code Ann. § 311.021(3) (West 2005)).
Property code section 93.002(c) prohibits a commercial landlord from "intentionally prevent[ing] a tenant from entering the leased premises." Tex. Prop.Code Ann. § 93.002(c). The trial court could have unquestionably concluded that CenterPlace, through the series of letters to MCL in June and July 2007, expressed its intent that MCL no longer occupy the premises. But CenterPlace's stated intent is not dispositive of whether it violated section 93.002(c) because the statute requires that the landlord intentionally "prevent a tenant from entering the leased premises." Id. MCL never requested access to the premises at any time after CenterPlace expressed its intent that MCL no longer occupy the premises. The question, then, is whether section 93.002(c) requires that the landlord take some action beyond making written demands — such as changing the locks or refusing access upon request by the tenant — before it can be found to have intentionally prevented the tenant from entering the premises, or whether a landlord may violate the statute by wrongfully accusing the tenant of breaching the lease and demanding that the tenant vacate the premises.
Only three Texas cases guide our analysis.
The second case is Abney Group, Inc. v. Robson, No. 03-96-00441-CV, 1996 WL 727386 (Tex.App.-Austin Dec. 19, 1996, no writ) (not designated for publication). There, Abney Group was a month-to-month tenant in a warehouse. Id. at *1. Abney Group and the landlord negotiated for a higher monthly rent and payment of utilities, but the negotiations were unsuccessful. Id. The landlord then advised Abney Group to vacate the premises by August 1, 1995, and Abney Group complied. Id. Before that date, however, the landlord changed the locks on the fence surrounding the warehouse and locked the gate on July 25 and 26. Id. The landlord did not, however, change the locks to the warehouse office through which Abney could access the warehouse space. Id. at *2. Also, one of Abney's employees had a key to the warehouse office at all times. Id. The landlord testified that "he slept in the office building on the premises during the two nights in question," that "no one came to the office to request that he open the gate," and that "he would have done so had such a request been made by an Abney representative." Id. On that evidence, the court held that an "`actual physical denial of a tenant's right of entry' as contemplated by section 93.002(c)(3) of the Property Code" was not conclusively established. Id. (quoting Michaux v. Koebig, 555 S.W.2d 171, 176 (Tex.Civ.App.-Austin 1977, no writ)).
In Michaux, the landlords gave the tenants written notice to vacate for disorderly conduct because the tenants had allegedly failed to follow the landlords' parking policy and had argued with the apartment manager. See 555 S.W.2d at 174. The written notice stated, "Because of disorderly conduct in and on a public place, according to Penal Code 4201 ... you are asked to vacate the premises within three (3) days." Id. The tenants peacefully vacated the apartment "in accord with [the] notice from the apartment manager." Id. In their suit against the landlords, the tenants alleged that they were "wrongfully excluded from their apartment by an implied threat of criminal complaint." Id. at 173.
After quoting the predecessor statute to property code section 92.0081,
Id.
From these cases, it is evident that Texas law requires a landlord to do something more than post a notice to vacate or send a letter advising the tenant that it no longer has a right to possession before the landlord can be said to have violated property code section 93.002(c). In Gluck, the landlord removed the tenant's personal property and relet the premises before the tenant's lease term had expired, thus excluding the tenant from the premises. See 2011 WL 944439, at *2-3. In Abney Group, the evidence did not conclusively prove a violation of section 93.002 because, even though the landlord had changed the locks to the perimeter fence, Abney Group could have accessed the property through the office but did not request access. See 1996 WL 727386, at *2. And in Michaux, the court reversed and rendered judgment against the tenants, holding that the landlord's notice to vacate was not an actual physical denial of the tenants' right of entry into the apartment. See 555 S.W.2d at 176. The Michaux court suggested that physical exclusion through an act such as changing the locks or interrupting utilities is required before a landlord may be found to have violated the statute. Id.
As interpreted by those cases, the statute requires that a landlord intentionally take some action to prevent entry, beyond giving a tenant a notice to vacate, before the landlord incurs liability under section 93.002(c). If a notice of default or to vacate were all that the statute required, section 93.002(c) would arguably create landlord liability in each instance in which a landlord even mistakenly believes a tenant has violated the lease and intentionally gives notice to vacate. See Tex. Gov't Code Ann. § 311.023(1), (5) (providing that courts may consider the "object sought to be attained" and the "consequences of a particular construction" when construing a statute).
Consistent with the above cases, we hold that some level of landlord self-help beyond a notice of default or to vacate is required to create liability under section 93.002(c). Although CenterPlace had possession of the key at all times, it is undisputed that CenterPlace had always permitted MCL access to the premises when MCL requested it and that MCL did not request access to the premises at any time after CenterPlace sent the June 21 letter. In other words, nothing changed with regard to MCL's ability to enter the premises other than issuance of the demand letters. CenterPlace did not take any action — such as changing the locks, cutting off the utilities, reletting the
Section 93.002(c) prohibits a landlord from "intentionally prevent[ing] a tenant from entering the leased premises." See Tex. Prop.Code Ann. § 93.002(c) (emphasis added). Considering the statutory language and the judicial interpretations of the statute, the evidence in this case is legally insufficient to support a determination that CenterPlace intentionally prevented MCL from entering the premises. We therefore sustain the first part of CenterPlace's first issue.
CenterPlace contends in the fourth sub-part of its first issue that the evidence is legally and factually insufficient to support the trial court's findings that MCL made a timely request for the TI funds available under the lease and amended lease and that despite repeated requests, CenterPlace refused to release the full amount of the TI funds upon MCL's timely requests as well as the implied finding that CenterPlace's refusal constituted a prior material breach that excused MCL's failure to pay rent after November 1, 2007.
Section 10(e) of the lease states in relevant part,
CenterPlace argues that it was not required to release the TI funds to MCL in one lump sum because "the evidence conclusively shows that MCL requested the funds be paid as work progresses" and because "there is no evidence that CenterPlace `refused' to release any funds." CenterPlace points to evidence that MCL requested $95,000 in TI funds by letter in February 2005 within 90 days of the lease date and that CenterPlace released those funds as requested. CenterPlace also points to the remainder of the February 2005 letter from MCL, which states, "As to the balance of the funds, we will remain in contact with you as to when and how we would prefer to draw those funds." CenterPlace says that MCL's next request for TI funds was by letter dated December 18, 2006, but that MCL wrote again to CenterPlace within three days on December 21, 2006, stating, "If we do not hear from you on this issue by January 19th, we will accept this as permission to have all invoices sent directly to your attention for payment."
MCL counters that MCL made requests throughout November and December 2006 for the release of all remaining TI funds
CenterPlace notes that the December 29 letter ended by stating, "I will await your call or other correspondence," and CenterPlace argues that because MCL never called or otherwise responded to the December 29 letter, the letter is no evidence or factually insufficient evidence that CenterPlace refused to pay the balance of the TI funds in either a lump sum payment or as the work progressed. However, a January 11, 2007 letter from CenterPlace's counsel states that any extension of the March 15, 2007 build-out date must include additional terms not contained in the lease or amended lease, including "[a] stated completion date for construction," "[a] commitment to commence business by a stated date," and "[a]n agreement as to the payment of tenant improvement funds" with the TI funds "payable only upon the commencement of business by the tenant."
We hold that legally and factually sufficient evidence supports the trial court's findings that CenterPlace breached the lease by failing to release the remaining TI funds to MCL. The November 13, December 18, and December 21 letters to CenterPlace, combined with the testimony by Welch, Davis, and Harpavat, establish that MCL had repeatedly requested the release of the remaining TI funds and that Harpavat would not agree to release them. The December 29 letter from CenterPlace's counsel corroborates Harpavat's statements to Davis that the partial build-out, for which MCL desired to use the TI funds, did not meet the "spirit" of the amended lease, and the January 11 letter from CenterPlace's counsel supports a determination that CenterPlace refused to release the remaining TI funds until MCL made further concessions that were not
Applying the appropriate standards of review to the two entirely different versions of the facts as testified to and revealed by the written correspondence, we hold that legally and factually sufficient evidence supports the trial court's determination that CenterPlace breached the lease by refusing to release the remaining TI funds to MCL upon request by MCL. See Cent. Ready Mix Concrete Co., 228 S.W.3d at 651; City of Keller, 168 S.W.3d at 807, 827; Pool, 715 S.W.2d at 635. We thus overrule the fourth part of CenterPlace's first issue.
CenterPlace argues in its fourth issue that the trial court erred by awarding MCL its attorneys' fees and costs and by concluding that CenterPlace was not entitled to recover its attorneys' fees and costs pursuant to Section 27 of the lease agreement.
Section 27 of the lease states:
CenterPlace first argues that MCL will no longer be the "prevailing party" as defined by the lease if CenterPlace succeeds on its first three issues because, in that event, MCL would not have obtained substantially the relief sought by it in the judgment. We held above, however, that legally and factually sufficient evidence supports the trial court's determination that CenterPlace breached the lease by refusing to release the remaining TI funds to MCL. That breach excused MCL's further payment of rent, a conclusion of law by the trial court of which CenterPlace does not complain. Thus, MCL was and remains the "prevailing party" under Section 27 of the lease because it obtained through the judgment substantially the relief it sought in the lawsuit. See Johnson v. Smith, No. 07-10-00017-CV, 2012 WL 140654, at *3 (Tex.App.-Amarillo Jan. 18, 2012, no pet.) (mem. op.); Silver Lion, Inc. v. Dolphin St., Inc., No. 01-07-00370-CV, 2010 WL 2025749, at *18 (Tex.App.-Houston [1st Dist.] May 20, 2010, pet. denied) (mem. op.) (op. on reh'g) (concluding defendant who successfully defended against
MCL's recovery of attorneys' fees under property code section 93.002 is a different matter. The trial court awarded MCL $37,700 in attorneys' fees for CenterPlace's alleged violation of section 93.002(c), but we held above that legally insufficient evidence supports the trial court's determination that CenterPlace violated property code section 93.002(c). Thus, MCL's attorneys' fees can only be awarded pursuant to the contract and cannot be awarded pursuant to section 93.002(g). See Tex. Prop.Code Ann. § 93.002(g)(2) (providing that tenant may recover reasonable attorneys' fees and court costs less any delinquent rents or other sums for which tenant is liable to landlord if landlord or landlord's agent violates that section). MCL did not prevail on its claim under section 93.002(g), nor is it the "prevailing party" under the contract language on its counterclaim for damages based on violation of property code section 93.002. We therefore sustain the part of CenterPlace's fourth issue that challenges the trial court's award of attorneys' fees to MCL based on CenterPlace's alleged violation of section 93.002(c).
CenterPlace argues in the final part of its fourth issue that the trial court erred by failing to award it recovery of its attorneys' fees because the last sentence of Section 27 mandates an award of reasonable attorneys' fees to CenterPlace, even if it is not the prevailing party. In other words, CenterPlace contends that MCL's obligation to pay attorneys' fees to CenterPlace under Section 27 is not contingent upon CenterPlace's litigation success. We are not, however, persuaded that CenterPlace's proposed interpretation of Section 27 is correct.
The interpretation of an unambiguous contract is a question of law that we review de novo. MCI Telecomms. Corp. v. Tex. Utils. Electric Co., 995 S.W.2d 647, 650-51 (Tex.1999). "Our primary concern in construing a written contract is to ascertain the objective intent of the parties as expressed in the contract." DaimlerChrysler Motors Co. v. Manuel, 362 S.W.3d 160, 178 (Tex.App.-Fort Worth 2012, no pet.) (citing Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983); City of the Colony v. N. Tex. Mun. Water Dist., 272 S.W.3d 699, 722 (Tex.App.-Fort Worth 2008, pet. dism'd)). "We examine and consider the entire document in an effort to harmonize and give effect to all provisions of the contract so that none will be rendered meaningless." Id. (citing Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex.2006); Coker, 650 S.W.2d at 393; City of the Colony, 272 S.W.3d at 722); see El Paso Field Servs.,
The first two sentences of Section 27 provide for the mandatory award of attorneys' fees to the prevailing party if litigation ensues relating to the lease. MCL, as stated above, is the prevailing party entitled to recover its costs and attorneys' fees under that portion of Section 27. But in arguing that it should also be awarded its attorneys' fees, CenterPlace relies on the last sentence of Section 27, which states, "Further, in the event Landlord retains legal counsel to enforce any of Tenant's obligations hereunder, Tenant shall reimburse Landlord for all reasonable legal fees incurred by Landlord."
CenterPlace, even though it is not a prevailing party, argues that it is entitled to recover its attorneys' fees because the last sentence of Section 27 does not require that CenterPlace prevail, only that CenterPlace retain legal counsel to enforce MCL's lease obligations. But CenterPlace is asking that we ignore the first two sentences of Section 27 and read the last sentence in isolation. This we cannot do because we must consider the entire document in order to give each provision meaning if possible. See DaimlerChrysler Motors Co., 362 S.W.3d at 178. Giving effect to all parts of Section 27, it seems clear that the parties intended that CenterPlace would be entitled to reimbursement of its reasonable legal fees if CenterPlace retained counsel to enforce MCL's obligations under the lease agreements so long as litigation did not ensue. But if litigation ensued, only the prevailing party in the litigation would be entitled to recover its attorneys' fees. That the parties intended the last sentence of Section 27 to apply in the absence of litigation and for the first two sentences to apply in the event of litigation is confirmed by the parties' use of "[f]urther" as an introduction to the last sentence and "[i]n the event any litigation ensues" as an introduction to the first sentence. See generally Gen. Fin. Servs., Inc. v. Practice Place, Inc., 897 S.W.2d 516, 522 (Tex.App.-Fort Worth 1995, no writ) ("The language of a contract should be given its plain, ordinary, and commonly accepted meaning. Courts are required to follow elemental rules of grammar for a reasonable application of the legal rules of construction." (citations omitted)). The use of "[f]urther" as an introduction to the last sentence of Section 27 suggests that the last sentence applies only to a circumstance different than the first two sentences of Section 27. And the introductory "[i]n the event any litigation ensues" language in the first sentence of Section 27, particularly compared to the more general language used in the last sentence of Section 27, suggests that the parties intended for only the first two sentences to apply once the parties' dispute led to litigation, and the first two sentences permit only the prevailing party in the litigation to recover its costs and attorneys' fees. MCL is the prevailing party and is thus the only party entitled to recover its costs and attorneys' fees. Had CenterPlace prevailed in the litigation, then only CenterPlace would have been entitled to recover its costs and attorneys' fees. Contrary to CenterPlace's contention, the only reasonable manner in which
Having sustained the first part of CenterPlace's first issue and part of its fourth issue, and having overruled the remainder of CenterPlace's dispositive issues, we reverse the portions of the trial court's judgment relating to MCL's claim for statutory damages and attorneys' fees under property code section 93.002. We render judgment that MCL take nothing on its property code section 93.002 claim. We affirm the remainder of the trial court's judgment.