Aspenwood Apartment Corp.. v. Coinmach Inc.

Citation349 S.W.3d 621
Decision Date10 February 2011
Docket NumberNo. 01–08–00636–CV.,01–08–00636–CV.
PartiesASPENWOOD APARTMENT CORP., Appellant,v.COINMACH, INC., f/k/a Solon Automated Services, Inc., Appellee.
CourtCourt of Appeals of Texas

OPINION TEXT STARTS HERE

Alan Brandt Daughtry, Jackson Walker L.L.P., Jack Z. Yetiv, Houston, TX, for Appellant.Daniel W. Davis, Robert M. Roach Jr., Roach & Newton, L.L.P., Daryl W. Bailey, Looper, Reed & McGraw, P.C., Houston, TX, for Appellee.Panel consists of Justices KEYES, SHARP, and MASSENGALE.

OPINION ON REHEARING

EVELYN V. KEYES, Justice.

Appellee, Coinmach, Inc. f/k/a Solon Automated Services, Inc. (Coinmach), filed a motion for rehearing of our August 19, 2010 opinion. We grant rehearing and withdraw our August 19, 2010 opinion and judgment and issue this opinion and judgment in their place. The disposition of the case remains unchanged.

Appellant, Aspenwood Apartment Corporation (Aspenwood), appeals the trial court's rendition of a take nothing judgment against it based on Coinmach's motions for summary judgment. In eight issues, Aspenwood argues that the trial court erred (1) in dismissing Aspenwood's claims for breach of contract; (2) in dismissing Aspenwood's trespass and trespass to try title claims; (3) in dismissing Aspenwood's tortious interference claim based on Coinmach's status as a tenant at sufferance; (4) in holding Aspenwood's trespass to try title claims moot after Coinmach vacated the premises; (5) in dismissing Aspenwood's tortious interference claims based on the statute of limitations; (6) in dismissing Aspenwood's DTPA claims on the ground that Aspenwood was not a consumer; (7) in finding that Aspenwood was not a prevailing party on Coinmach's counterclaims; and (8) in dismissing Aspenwood's Declaratory Judgment Act claim as invalid.

We affirm in part and reverse and remand in part.

BACKGROUND

Coinmach leases laundry rooms in apartment complexes in which it installs coin-operated laundry equipment, services the equipment, and collects revenues generated from the laundry machines. In 1980, Coinmach, then doing business under the name Solon Automated Services, Inc., contracted with Garden View Apartments to provide laundry services to an apartment complex on Pech Road in Harris County, Texas.

The lease provided that the apartment complex leased to Coinmach “the laundry room(s) on the premises described above commencing on date of lease and ending ten (10) years after laundry equipment installation is completed.” Coinmach was entitled to “the right of exclusive installation and operation of the Equipment on the above described premises,” for which it agreed to pay a certain percentage of the gross receipts to the apartment complex owner “as the total rental due hereunder, within thirty (30) days of the date of collection.” The lease also provided that Coinmach “shall own and maintain the Equipment that it installs, without expense to” the apartment complex. The lease also contained the following provisions:

7. This Lease shall be binding on the parties hereto, their heirs, executors, successors, assigns and personal representatives.

8. In the event [Coinmach's] equipment maintenance becomes unsatisfactory and is not corrected within fifteen (15) days after [the apartment complex] notifies [Coinmach] in writing, by certified or registered mail, this Lease become null and void.

9. This Lease shall be subordinate to any mortgage or deed of trust on the premises.

....

11. [The owner] shall inform all subsequent owners of the property of the rights of [Coinmach] under this lease.

12. In the event any action is instituted to enforce any provision of this Lease, the prevailing party shall be entitled to reasonable attorney fees, court costs and expenses.

In 1989, Coinmach and the apartment complex executed an addendum to the lease that extended the expiration date of the lease to July 12, 1999, and modified the percentage of the monies collected that would be paid to the apartment complex as rent.

In January 1994, the apartment complex was sold at a foreclosure sale to Curtis Mosely, the original financer of the property, who immediately deeded the property to Properties on Pech Road (“PPR”), a corporation owned by Mosely and run by Mosely's business associate, David Cragg. In April 1994, Aspenwood bought the apartment complex from PPR. At the time Aspenwood purchased the property, Coinmach was operating in only one of the two laundry rooms at the complex. On April 6, 1994, Aspenwood gave Coinmach written notice to vacate the laundry room, stating that Aspenwood believed that the foreclosure had terminated the lease and that it was unhappy with condition of the laundry rooms operated by Coinmach. Coinmach, however, believed that its lease was still valid and insisted on remaining on the property and continuing to operate its machines. In May 1994, Aspenwood removed Coinmach's equipment from the laundry rooms and began to remodel one of the laundry rooms. In response, Coinmach sought and obtained a writ of re-entry from the justice court in June 1994.

In 1996, Aspenwood filed a forcible entry and detainer action against Coinmach and sent Coinmach another notice to vacate by certified mail. Aspenwood eventually succeeded in its forcible entry and detainer action in the justice court, but Coinmach appealed the ruling to the county court at law and got it overturned by order issued on June 26, 1998. This cause was further appealed to this Court, which determined that it did not have jurisdiction to consider the action because it did not relate to property used for residential purposes only. See Aspenwood Apt. Corp. v. Solon Automated Servs., Inc., No. 01–98–00516–CV, 1999 WL 1063435 (Tex.App.-Houston [1st Dist.] Nov. 24, 1999, no pet.) (not designated for publication); see also Tex. Prop.Code Ann. § 24.007 (Vernon 2000) (providing that final judgment of county court in eviction suit may not be appealed on issue of possession unless premises are used for residential purposes only).

Coinmach remained on the property for several more years. During this time, Aspenwood sent further notices to vacate and complained to Coinmach on several occasions regarding the condition of the laundry rooms, failure to pay rent, and failure to provide an accounting for its receipts from the laundry room. Aspenwood maintains that it never cashed any checks it received from Coinmach.

On March 30, 1998, Aspenwood initiated the instant suit. It filed a petition in the trial court seeking a declaratory judgment that Coinmach “has no rights to possession” and that it “does not have a leasehold interest in the property,” and alleging causes of action for trespass to try title, breach of contract and attorney's fees, various violations of the Texas Deceptive Trades Practices Act (DTPA),1 statutory fraud in a real estate transaction,2 common law fraud, and tortious interference with prospective contractual relationships. Coinmach counterclaimed, asking the trial court to declare that it was entitled to possession as lessee of the property and arguing that Aspenwood's lawsuit was brought in bad faith and for purposes of harassment in violation of chapters 9 and 10 of the Civil Practice and Remedies Code and that it was entitled to recover attorney's fees, and alleging counterclaims for breach of contract, breach of warranty of possession and quiet enjoyment, breach of warranty of fitness for a particular purpose, breach of warranty of suitability, tortious interference, specific performance, and defamation.

While the suit was still pending in the trial court, the 1999 termination date designated in the lease agreement passed, and Coinmach refused to vacate the laundry rooms, arguing that the lease had been renewed. Aspenwood had a different laundry service take over operation of a second laundry room that had been previously abandoned by Coinmach. Coinmach obtained a second writ of reentry, forcing the competing laundry room operator to cease operations and leave the facility.

Subsequently, the trial court made a ruling that Coinmach's lease had terminated when the property was foreclosed in 1994.3 The case went to trial in May 2000, and a jury found approximately $1.5 million in damages in favor of Aspenwood. The trial court subsequently rendered judgment on the jury's verdict, and Coinmach vacated the property.

Coinmach filed a motion for new trial, which the trial court granted. 4 In the second trial, Aspenwood again asserted claims for common law trespass, trespass to try title, DTPA violations, tortious interference with a prospective contract, declaratory judgment, and breach of contract.

On May 4, 2007, Aspenwood filed a motion for partial summary judgment seeking to establish Coinmach's tenancy status. Specifically, Aspenwood asked the trial court to determine whether, “On April 6, 1994, when Aspenwood took over the property, was there a holdover month-to-month tenancy with [Coinmach] under which Aspenwood could declare a breach and sue for damages and legal fees?” Aspenwood argued that the original lease was terminated by foreclosure and that, because there was no communication between Coinmach and PPR, the post-foreclosure owner, negating a continued relationship, a month-to-month tenancy arose between the parties that was governed by the same material terms as the original lease. Aspenwood's motion was supported by evidence, including the testimony of Coinmach employee David Siegel that Coinmach was not advised of the foreclosure in January 1994 and that it was not advised that its lease had been terminated by the foreclosure. Siegel also testified that Coinmach continued to operate the laundry rooms and send checks to the apartment complex office, which were cashed. Siegel was not able to testify as to who cashed the checks. Aspenwood also attached copies of the original lease and of the cancelled checks, which were endorsed by “Pech Road Investments, DBA Gardenview Apartments.” 5

On May 7, 2007, Coinmach...

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