Churchill Forge Inc. v. Brown
| Decision Date | 10 January 2002 |
| Docket Number | No. 00-0270,00-0270 |
| Citation | 61 S.W.3d 368 |
| Parties | (Tex. 2001) Churchill Forge, Inc., Petitioner v. JoAnn Hamilton Brown, Respondent |
| Court | Texas Supreme Court |
On Petition for Review from the Court of Appeals for the Third District of Texas
Mark Thomas Zuniga, R. David Fritsche, Law Office of R. David Fritsche, San Antonio, Douglas Bernard Lang, Cozen and O'Connor, Dallas, for Petitioner.
Archie Carl Pierce, Mike Thompson, Jr., Wright & Greenhill, Austin, for Respondent.
The question in this case is whether by statute or the common law, a commercial landlord is prohibited from contractually obligating its tenant to be responsible for damages caused by the tenant, the tenant's occupant, or guest. In this case, JoAnn Brown co-signed a lease with her adult son, Carl Jeffrey ("Jeff"), for an apartment owned by Churchill Forge, Inc. Jeff allegedly caused a fire that extensively damaged the apartment complex. Churchill Forge sued JoAnn, asserting that the lease required her, as a cotenant, to pay for any damages resulting from Jeff's negligence. JoAnn defended, claiming that either the Texas Property Code or this Court's fair notice doctrine prohibit Churchill Forge, as a commercial landlord, from contractually requiring her to pay for the alleged damage. The trial court granted summary judgment for JoAnn, and the court of appeals affirmed.1 We reverse the court of appeals' judgment and remand the case to the trial court for further proceedings.
Summary judgment is appropriate when there are no material fact issues and the movant is entitled to judgment as a matter of law.2 Here, the lease JoAnn and Jeff signed provided:
REIMBURSEMENT. You must promptly reimburse us for loss, damage, or cost of repairs or service caused anywhere in the apartment community by your or any guest's or occupant's improper use or negligence. Unless the damage or stoppage is due to our negligence, we're not liable for - and you must pay for - repairs, replacement costs and damage to the following if occurring during the Lease Contract term or renewal period: (1) damage to doors, windows, or screens; (2) damage from windows or doors left open; and (3) damages from wastewater stoppages caused by improper objects in lines exclusively serving your apartment. We may require payment at any time, including advance payment of repairs for which you're liable. Any delay in our demanding sums you owe is not a waiver.
The question is whether enforcing this provision is prohibited by either Texas Property Code section 92.006(e) or the fair notice doctrine. We note in this appeal that we are not deciding whether Jeff was negligent, or whether he actually caused the fire. Those issues are not before us.
To begin, we observe that competent parties in Texas "shall have the utmost liberty of contracting."3 JoAnn asserts that this principle has been altered by the Legislature and points to Chapter 92 of the Texas Property Code. We agree. Statutory limitations on the freedom of landlord and tenant to contract are contained in Subchapter A, section 92.006, entitled "Waiver or Expansion of Duties and Remedies." JoAnn argues that Churchill Forge cannot enforce the lease provision against her because it cannot meet the conditions of subsection (e). As to this interpretation, we disagree.
Subchapter A, section 92.006(e) reads:
(e) A landlord and a tenant may agree for the tenant to repair or remedy, at the tenant's expense, any condition covered by Subchapter B if all of the following conditions are met:
(1) at the beginning of the lease term the landlord owns only one rental dwelling;
(2) at the beginning of the lease term the dwelling is free from any condition which would materially affect the physical health or safety of an ordinary tenant;
(3) at the beginning of the lease term the landlord has no reason to believe that any condition described in Subdivision (2) of this subsection is likely to occur or recur during the tenant's lease term or during a renewal or extension; and
(4) (A) the lease is in writing (B) the agreement for repairs by the tenant is either underlined or printed in boldface in the lease or in a separate written addendum;
(C) the agreement is specific and clear; and
(D) the agreement is made knowingly, voluntarily, and for consideration.4
Nothing in subsection (e) prohibits a landlord from contracting with its tenant for the tenant to be responsible for damages the tenant, the tenant's occupant, or guest causes. Subsection (e) only says that a landlord, meeting that section's requirements, may contract for the tenant to pay for certain repairs. Legislative permission to contract under certain circumstances does not necessarily imply that contracting under other circumstances is prohibited. Certainly, given this State's strong commitment to the principle of contractual freedom, we should hesitate to infer a general prohibition from a statutory clause granting specific permission to contract. Fortunately, we have no need to guess what the Legislature meant. The Legislature explicitly identified, in a clause preceding subsection (e), the prohibition it intended to enforce. That prohibition is found in section 92.006(c):
A landlord's duties and the tenant's remedies under Subchapter B, which covers conditions materially affecting the physical health or safety of the ordinary tenant, may not be waived except as provided in Subsections (d), (e), and (f) of this section.5
Thus a tenant's contractual agreement to bear the cost of repair must meet the requirements of subsection (e) when it would otherwise be prohibited as an impermissible waiver of the landlord's duties or the tenant's remedies under Subchapter B.
Property Code, Subchapter B landlord duties are found in section 92.052, which reads:
(a) A landlord shall make a diligent effort to repair or remedy a condition if:.
. . .
(3) the condition materially affects the physical health or safety of an ordinary tenant. [But,]
(b) Unless the condition was caused by normal wear and tear, the landlord does not have a duty . . . to repair or remedy a condition caused by:
(1) the tenant;
(2) a lawful occupant in the tenant's dwelling;
(3) a member of the tenant's family; or
(4) a guest or invitee of the tenant.6
It appears then, that Subchapter B imposes no duty on Churchill Forge to bear the cost of repairing damage allegedly caused by Jeff. As well, a tenant's remedies under Subchapter B are conditioned upon the landlord's liability,7 and the landlord's liability is conditioned upon the existence of a duty under Subchapter B.8 Subchapter B therefore provides no remedy for JoAnn if Jeff damaged Churchill Forge's property. Because Churchill Forge has no duty to pay for repair of tenant-caused damages, and JoAnn has no remedy against Churchill Forge for such damages, sections 92.006(c) and (e) do not restrict the parties' freedom to contract as they wish concerning the matter.
This reading is consistent with section 92.061 of Subchapter B, which provides:
The duties of a landlord and the remedies of a tenant under this subchapter are in lieu of existing common law [landlord duties and tenant remedies]. Otherwise, this subchapter does not affect any other right of a landlord or tenant under contract, statutory law, or common law that is consistent with the purposes of this subchapter . . . .9
Again, because under Subchapter B landlords have no duty to repair or pay to repair tenant-caused damage, and tenants have no remedy for such damage, section 92.061 makes clear that the Legislature did not intend the Subchapter to otherwise affect the parties' presumptive right to contract over who would be responsible for conditions caused by the tenant, the tenant's occupant, or guest.
Even if we were to infer, as JoAnn suggests, a general prohibition from subsection (e)'s permissive language, it would not apply to bar this lease provision. Subsection (e)'s reach is explicitly limited to conditions "covered by Subchapter B." As mentioned, Subchapter B establishes a landlord's duty to repair certain conditions not caused by the tenant, the tenant's lawful occupant, or guest. Because no duty is triggered when a tenant damages the rented dwelling, such damage would not be a condition "covered by Subchapter B" to which subsection (e)'s requirements would apply.
Looking at the remainder of section 92.006 supports our view. While subsection (e) permits, under certain circumstances, a small, one-unit landlord to contract with tenants over the cost of repairing conditions covered by Subchapter B, subsection (f) allows any commercial landlord to shift the cost of repairs to the tenant, with a sufficiently clear agreement, for three specific types of conditions.10 The subsection (f) conditions are notable not because they are cheap to repair, but because they are conditions that would typically result from tenant negligence: "(1) damage from wastewater stoppages caused by foreign or improper objects in lines that exclusively serve the tenant's dwelling; (2) damage to doors, windows, or screens; and (3) damage from windows or doors left open."11 Subsection (f) conditions therefore resemble those tenant-caused conditions which a landlord has no duty to repair, or pay to repair, under Subchapter B.
But importantly, there is no requirement in subsection (f) for a landlord to prove that the tenant caused these damages before seeking reimbursement. Without showing that the damage was caused by the tenant, the landlord would otherwise have a duty to bear the cost of repair under Subchapter B. And under 92.006(c), that duty could not be waived. By adding subsection (f), the Legislature permitted landlords and tenants to bargain over who would bear the cost of repairing these specific...
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