IN THE
TENTH COURT OF APPEALS
No. 10-08-00008-CV
COVE TERRACE ASSOCIATES, I, LTD.,
AS SUCCESSOR IN INTEREST TO
CTE SHOPPING CENTERS I, LTD.,
Appellant
v.
MICHELE MCGUIRE,
Appellee
From the 52nd District Court
Coryell County, Texas
Trial Court No. CAC-03-34918
MEMORANDUM OPINION
This case is a commercial landlord-tenant dispute. Michele McGuire d/b/a
Michele’s Floral & Gifts sued her landlord, Cove Terrace Associates I, Ltd. (Cove
Terrace) for breach of contract and constructive eviction after her floral shop suffered
water damage. Assurance Company of America intervened and asserted a subrogation
claim. Cove Terrace asserted several affirmative defenses and counterclaimed against
McGuire for breach of the lease. A jury found in favor of McGuire, and the trial court
denied Cove Terrace’s motion for judgment notwithstanding the verdict and entered
judgment on the verdict. Raising three issues, Cove Terrace appeals the trial court’s
judgment.
Factual Background
In 1989, McGuire purchased the flower shop located at 248 Cove Terrace in the
Cove Terrace Shopping Center in Copperas Cove, Texas. Over the years, she entered
into three lease agreements. In 1995, she entered into a lease agreement with CTE
Shopping Centers, Ltd. for a term of three years. Cove Terrace subsequently bought the
shopping center from CTE Shopping Centers, Ltd., and in 1998, McGuire agreed with
Cove Terrace to extend the 1995 lease. The lease extension agreement stated that,
except for several modifications, the 1995 lease would “remain in full force and effect”
until February 28, 2003.
On November 29, 2001, McGuire began to have a problem with water entering
her shop. She immediately called and reported the problem to Quine & Associates, Inc.,
Cove Terrace’s agent and manager of the shopping center. Over the next few weeks,
the parties attempted to discover the reason for the water intrusion, and McGuire
discovered water in her shop on several more occasions. On each occasion, Quine &
Associates had Diversified Services perform water extraction and drying services.
It was eventually discovered that a concrete ramp that had recently been
constructed for another tenant in the alleyway behind the shop was the reason for the
flooding. The ramp had been constructed so that it blocked the back door to the vacant
unit adjacent to McGuire’s shop, and when it rained, the water would flow over the
Cove Terrace Assocs. I, Ltd. v. McGuire Page 2
ramp’s edge like a waterfall and under the door of the adjacent unit. The water was
then migrating into McGuire’s shop from the adjacent unit. Upon discovering this, a
piece of metal was put in to divert the water, and a new door was built, stopping the
water intrusion. No more water migrated into McGuire’s shop after December 16, 2001.
In January 2002, McGuire began complaining about mildew and mold in her
shop. At the end of January, Quine & Associates had Diversified Services treat and seal
the floors and install new carpet in McGuire’s office. In late February, McGuire
discovered additional mold growing under a cooler. Diversified Services returned to
the shop and wanted to put down a treatment to kill the mold underneath the cooler
floor, but McGuire would not allow it. On February 28, McGuire permanently closed
the shop at the Cove Terrace Shopping Center, and sometime between March 1 and
March 3, she found another location that was just around the corner from the Cove
Terrace Shopping Center.
On March 5, McGuire sent a letter notifying Cove Terrace that she was
immediately vacating her unit at the shopping center because it had become
uninhabitable due to the flooding and resultant mold infestation. On March 13, Cove
Terrace sent a letter to McGuire, stating that she was in default under the terms of the
lease agreement for failure to pay certain annual billbacks for 2001. The letter
demanded that McGuire pay the amount by 12:00 p.m. on March 19 and continue
thereafter making monthly payments of rent and other charges as stated in the lease, or
Cove Terrace would notify its attorneys to sue her. When McGuire did not pay the 2001
billback charges by March 19, Brad Quine, the president of Quine & Associates, had the
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locks to her unit changed and had a notice posted on the door to her unit that the locks
were changed because she breached the lease agreement and that she could get new
keys from Quine & Associates when the terms of her lease had been met.
By March 20, 2002, the date when the lockout notice was posted on the door,
McGuire had already vacated the premises. She eventually paid the 2001 billback
charges on April 20, but she testified that she did not pay rent from April 2002 through
February 2003.
Procedural Background
McGuire sued Cove Terrace for breach of contract and constructive eviction.
Assurance Company of America, McGuire’s commercial property-casualty insurer,
intervened, asserting its subrogation claim. Assurance had paid $16,355.50 for the
replacement cost of the personal property that was damaged by the water; $6,650 for
the nine days that McGuire’s shop had to be closed; $19,759 for the anticipated
environmental remediation expense; $7,581.45 for the balance due on two of the coolers
that had to be left in the unit; and $38,708.75 for lost business and the balance due to
rebuild her business. Cove Terrace counterclaimed against McGuire for breach of the
lease.
A jury found that Cove Terrace breached the lease and constructively evicted
McGuire and that McGuire was not liable to Cove Terrace for breach of the lease. The
jury awarded McGuire $12,000 for economic damages and $20,000 for mental anguish
damages. Accordingly, the trial court entered judgment in favor of McGuire for the
principal sum of $32,000, plus pre-judgment and post-judgment interest. The judgment
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further ordered that McGuire recover from Cove Terrace $40,000 in attorney’s fees for
services rendered through the trial of the case and conditional appellate attorney’s fees
in the court of appeals and the supreme court. Cove Terrace then filed a motion for
judgment notwithstanding the verdict, a motion to disregard jury findings, and a
motion for new trial, all of which the trial court denied.
Issue No. 1
In its first issue, Cove Terrace contends in part that the trial court erred in
denying its motion for judgment notwithstanding the verdict. Specifically, Cove
Terrace argues that the jury’s answers to Question No. 1A and B1 were immaterial in
light of the language of the lease.
A trial court may disregard a jury’s findings and grant a motion for
judgment notwithstanding the verdict only when a directed verdict would
have been proper. See TEX. R. CIV. P. 301; Fort Bend County Drainage Dist. v.
Sbrusch, 818 S.W.2d 392, 394 (Tex. 1991); see also Prudential Ins. Co. v. Fin.
Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000) (directed verdict proper
only when evidence conclusively establishes right of movant to judgment
or negates right of opponent or evidence is insufficient to raise material
fact issue); Cain v. Pruett, 938 S.W.2d 152, 160 (Tex. App.—Dallas 1996, no
writ) (directed verdict proper when evidence reflects that no other verdict
can be rendered and moving party is entitled to judgment as a matter of
law). A motion for j.n.o.v. should be granted when the evidence is
conclusive and one party is entitled to recover as a matter of law or when
a legal principle precludes recovery. Morrell v. Finke, 184 S.W.3d 257, 290
(Tex. App.—Fort Worth 2005, pet. denied); see also United Parcel Serv., Inc.
v. Tasdemiroglu, 25 S.W.3d 914, 916 n.4 (Tex. App.—Houston [14th Dist.]
2000, pet. denied) (“A court should grant a motion for judgment
notwithstanding the verdict if a legal principle prevents a party from
prevailing on its claim.”).
Mangum v. Turner, 255 S.W.3d 223, 226 (Tex. App.—Waco 2008, pet. denied).
1 Question No. 1A and B of the jury charge ask whether CTE Shopping Centers, Ltd., as landlord,
failed to comply with its agreement with McGuire by failing to provide peaceful and quiet possession
and failed to operate, manage, and maintain the common area adjacent to McGuire’s unit.
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We apply well-established rules of contract interpretation in construing the lease
between Cove Terrace and McGuire. Our primary concern in interpreting the contract
is to ascertain the true intentions of the parties as expressed in the instrument. Seagull
Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006). If the written
instrument is so worded that it can be given a definite or certain legal meaning, then it
is not ambiguous, and we will construe the contract as a matter of law. Coker v. Coker,
650 S.W.2d 391, 393 (Tex. 1983). Terms are given their plain, ordinary, and generally
accepted meaning, unless the instrument shows the parties used them in a technical or
different sense. Heritage Res., Inc. v. Nations Bank, 939 S.W.2d 118, 121 (Tex. 1996). We
must examine and consider the entire writing in an effort to harmonize and give effect
to all provisions so that none are rendered meaningless. J.M. Davidson, Inc. v. Webster,
128 S.W.3d 223, 229 (Tex. 2003). To the extent of any conflict, specific provisions control
over more general ones. Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133-34 (Tex. 1994).
Article XIV of the lease agreement between Cove Terrace and McGuire is entitled
“NON-LIABILITY FOR CERTAIN DAMAGES,” and Section 14.1 of the article states:
Landlord and Landlord’s agents and employees shall not be liable to
Tenant for any injury to person or damage to property caused by the
Demised Premises or other portions of the Shopping Center becoming out
of repair or by defect or failure of any structural element of the Demised
Premises or of any equipment, pipes or wiring, or broken glass, or by the
backing up of drains, or by gas, water, steam, electricity or oil leaking,
escaping or flowing into the Demised Premises (except where due to
Landlord’s willful failure to make repairs required to be made by
Landlord hereunder, after the expiration of a reasonable time after written
notice to Landlord of the need for such repairs), nor shall Landlord be
liable to Tenant for any loss or damage that may be occasioned by or
through the acts or omissions of other Tenants of the Shopping Center or
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any other persons whomsoever, excepting only duly authorized
employees and agents of Landlord.
McGuire argues that this section does not preclude her recovery because it only
applies when the injury or damage is caused by the leased premises or other portions of
the shopping center “becoming out of repair,” and her recovery was not based on
something that “became out of repair.” We disagree. After removing the inapplicable
language, Section 14.1 states: “Landlord . . . shall not be liable to Tenant for any injury
to person or damage to property caused . . . by . . . water . . . flowing into the Demised
Premises (except where due to Landlord’s willful failure to make repairs required to be
made by Landlord . . . ) . . . .”2 The plain language of Section 14.1 applies to the
undisputed facts in this case, and, under Section 14.1, Cove Terrace is not liable to
McGuire for “any injury to person or damage to property” caused by the water that
flowed into her shop. Therefore, Cove Terrace is entitled to judgment as a matter of law
because the lease precludes McGuire’s recovery, and the trial court erred in denying its
motion for judgment notwithstanding the verdict. We sustain Cove Terrace’s first
issue.
Issue No. 2
In its second issue, Cove Terrace contends that the trial court erred in awarding
McGuire mental anguish damages on her constructive eviction claim. For the same
reason we sustained Cove Terrace’s first issue, we also sustain its second issue.
2Section 8.1 provides that the landlord has a duty to make repairs only to the unit’s foundation,
exterior walls, and roof.
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Issue No. 3
In its third issue, Cove Terrace argues that McGuire’s breach was established as a
matter of law, contrary to the jury’s answers to Question Nos. 4 and 6 of the jury
charge,3 and that the trial court erred in failing to award it damages on its counterclaim
for breach of the lease. Cove Terrace argues in the alternative that the trial court should
have granted a new trial because the jury’s answers to Question Nos. 4 and 6 are against
the great weight and preponderance of the evidence.
When the party that had the burden of proof at trial complains on appeal of the
legal insufficiency of an adverse finding, that party must demonstrate that the evidence
establishes conclusively, i.e., as a matter of law, all vital facts in support of the finding
sought. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001). Consistent with City of
Keller v. Wilson, we first search the record for evidence favorable to the adverse finding,
disregarding all contrary evidence unless a reasonable factfinder could not. One Ford
Mustang v. State, 231 S.W.3d 445, 449 (Tex. App.—Waco 2007, no pet.) (citing City of
Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005); Dallas County Constable v. Garden City
Boxing Club, Inc., 219 S.W.3d 613, 616 (Tex. App.—Dallas 2007, no pet.); Sellers v. Foster,
199 S.W.3d 385, 392 (Tex. App.—Fort Worth 2006, no pet.)). If we find no evidence
supporting the finding, we then determine whether the contrary was established as a
matter of law. Id.
3 Question No. 4 of the jury charge asks whether McGuire failed to comply with the lease
agreement by failing to pay rent, including additional rent for common area maintenance, property taxes,
and insurance, from April 1, 2002, through February 28, 2003. Question No. 6 of the jury charge asks
what sum of money would fairly and reasonably compensate CTE Shopping Centers, Ltd., for its
damages caused by such a breach by McGuire.
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The lease provides that it was to terminate on February 28, 2003, and, until that
time, McGuire was required to pay monthly rent and other monthly charges for
common area maintenance, taxes escrow, and insurance escrow. At trial, Cove
Terrace’s evidence that McGuire had not paid $13,472 was not disputed. The lease
agreement further states that McGuire shall be deemed to have defaulted under the
lease if she “fail[s] to pay any installment of rent or any other obligations hereunder
involving the payment of money and such failure shall continue for a period of five
days after the date due.”
McGuire admitted at trial that she did not pay rent and other fees from April
2002 through February 2003, but she argues in her brief that her failure to pay rent was
excused because the jury determined that Cove Terrace constructively evicted her.
However, as explained above, under Section 14.1 of the lease agreement, Cove Terrace
is not liable to McGuire for any injury to person or damage to property caused by water
flowing into her unit, and it only had a duty to repair the foundation, exterior walls,
and roof of the unit. Thus, Cove Terrace could not have constructively evicted McGuire
by refusing to remedy the damages of which she complained.
Cove Terrace established McGuire’s breach of the lease and damages as a matter
of law; therefore, we sustain its third issue. The court did not make a finding as to Cove
Terrace’s reasonable and necessary attorney’s fees; therefore, we remand that issue to
the trial court for its determination.
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Conclusion
Having sustained Cove Terrace’s first two issues, we reverse and render
judgment in part that McGuire take nothing from Cove Terrace. On Cove Terrace’s
third issue, we reverse the trial court’s judgment, render judgment that it recover
$13,472 from McGuire, and remand the cause to the trial court for its consideration of
Cove Terrace’s claim for attorney’s fees on its counterclaim.
REX D. DAVIS
Justice
Before Chief Justice Gray,
Justice Reyna, and
Justice Davis
Reversed and rendered in part; reversed and remanded in part
Opinion delivered and filed October 14, 2009
[CV06]
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