Coleman v. Rotana, Inc.
| Decision Date | 08 August 1989 |
| Docket Number | No. 05-88-01307-CV,05-88-01307-CV |
| Citation | 778 S.W.2d 867 |
| Parties | J. Hamilton COLEMAN, Dean A. Flowers, John D. Ward and Curtis Whitehead, Appellants, v. ROTANA, INC. (N.V.) and Rotana Ltd. |
| Court | Texas Court of Appeals |
Mark S. Werbner, Karen L. Hirschman, Lyndon F. Bittle, Dallas, for appellants.
David C. Kent, Bobby M. Rubarts, Dallas, for appellees.
Before STEWART, THOMAS and WHITTINGTON, JJ.
J. Hamilton Coleman, Dean A. Flowers, John D. Ward, and Curtis A. Whitehead appeal from a judgment entered in favor of Rotana, Inc., (N.V.) and Rotana Ltd. (Rotana) in Rotana's suit for rent and attorney's fees. Rotana sued the four appellants individually on their personal guaranties of the payment and performance of the obligations and liabilities of the tenant under a commercial lease. Appellants defended Rotana's suit for rent, claiming fraudulent inducement, breach of the implied warranty of suitability and breach of the covenant of quiet enjoyment, and they also asserted counterclaims based upon these same theories, all arising from the landlord's failure to provide adequate parking to the tenant for its restaurant. The trial court refused to submit appellants' requested issues on all but the fraud claim, which the jury answered in favor of the landlord. In six points of error, appellants contend that the court erred in refusing to submit four of their requested issues and in overruling their objections to the submission of an issue regarding Rotana's attorney's fees. We affirm.
A commercial lease was executed on or about July 26, 1985, between appellants (tenant) and Rotana (landlord), covering 2275 square feet in a 3500 square foot strip center located on Greenville Avenue in Dallas. The lease required appellants to operate as a "first class restaurant and bar." They operated under the trade name of Catalina Cafe. The other occupants of the strip center (also tenants of Rotana) were "Wok-n-Roll" and "Windsor's Pizzeria." At the time the lease was signed, the parking lot in the strip center had twenty-nine parking spaces. The lease provided that the costs of operating and maintaining the common areas (including the parking lot) were to be shared by all tenants of the strip center.
The City of Dallas parking laws require a certain number of parking spaces be available for a particular business space, based on the use of that space (i.e., office, retail, restaurant) and its square footage. For example, a sit-down restaurant requires one parking space for each one hundred square feet, a take-out restaurant requires one parking space for each 200 square feet, and a drive-in restaurant requires one parking space for each fifty square feet. Appellants were aware that they needed access to twenty-three parking spaces to meet the code and that citations would be issued by the city if the restaurants did not meet the code.
Coleman testified that, before the lease was signed, Rotana's agent had represented to appellants that Catalina Cafe would be the only sit-down restaurant in the center. The evidence showed that Rotana's leases with both Wok-n-Roll and Windsor's Pizzeria only permitted those establishments to operate as take-out restaurants. However, Wok-n-Roll had previously represented to the city that it planned to operate a drive-in restaurant, requiring twice as many parking spaces per square 100 feet as a sit-down restaurant. Coleman also testified that, before the lease was signed, Rotana's agent represented to him that Catalina Cafe was to have twenty-three of the twenty-nine parking spaces available for its exclusive use. Coleman inspected the shopping center and parking lot before executing the lease. At that time, Wok-n-Roll had opened, but Windsor's Pizzeria had not.
The same day that the lease was signed, appellants assigned all of their right, title, and interest as tenant in and to the lease to Catalina Cafe, Inc. The assignment also provided that appellants would continue to be liable to Rotana, the landlord, for payment and performance of all obligations of tenant under the lease and they unconditionally guaranteed such payment and performance. After the lease was signed and appellants had started renovating the space in preparation for the opening, it was discovered that Wok-n-Roll was operating in violation of its lease as a combination drive-in/sit-down restaurant. There was insufficient parking at the center to permit Wok-n-Roll to operate as a "drive-in restaurant" under the Development Code.
After Catalina Cafe opened, Windsor's Pizzeria opened, and it also operated as a sit-down restaurant, in violation of its lease. Wok-n-Roll and Windsor's Pizzeria were entitled to six parking spaces between them pursuant to the uses set out in their leases and their square footage. However, because they were both operating as sit-down restaurants, Coleman testified that the patrons of those establishments occupied more than the six spaces available to them.
From the first Friday night it was open to the public, Catalina Cafe experienced parking problems. The parking lot was full, but many of the occupants of the cars were patrons of establishments outside the strip center. Appellants then painted "Catalina Cafe only" on twenty-three of the parking spaces in the strip center. Rotana required these markings to be removed, but did permit Wok-n-Roll and Windsor's to mark their spaces "15 minutes only," precluding Catalina Cafe's customers from using those spaces.
Appellants hired a valet service, but Coleman testified that this did not solve the parking problem. Coleman testified that Thursday through Sunday nights, Catalina Cafe never had more than fifty percent of the twenty-nine spaces at the center available to its customers. The city inspected Rotana's strip center in March 1986, and both Wok-n-Roll and Windsor's received written warnings from the city to correct parking code violations. Catalina Cafe received an oral warning for a parking code violation at the same time.
Catalina Cafe, Inc. operated Catalina Cafe from September 1985 until August 1986, when it closed its doors. Upon closing, appellants requested that Rotana give Catalina Cafe, Inc. rent relief and that it allow them to remodel the space and reopen as a Mexican food restaurant. Rotana complied with these requests. During the remodeling phase, Coleman, Flowers, Ward, and Whitehead sold all of their stock and ownership in Catalina Cafe, Inc. to Robert Miller and Thomas Fleeger.
In or around November 1986, Catalina Cafe, Inc., now owned by Miller and Fleeger, reopened and operated a Mexican food restaurant until April 1987. After this restaurant closed, appellants requested Rotana's permission to sublease the space to other investors. A sublease was drawn up by Rotana, appellants made a counter-proposal, Rotana rejected it, and this lawsuit was filed on June 9, 1987.
Appellants' points of error one, two, three, and six complain of the trial court's refusal to submit certain requested issues. In order to prevail on a point of error based on a failure of the court to submit an issue, the appellant must show, 1) that the issue was properly tendered to the court in substantially correct wording; 2) that the trial court refused to submit the issue to the jury; 3) that the issue was raised by the written pleadings; and 4) that there was some evidence in the record to support a jury finding on the issue. TEX.R.CIV.P. 276 and 278; Southwestern Bell Tel. Co. v. Thomas, 554 S.W.2d 672, 674 (Tex.1977).
In their first point of error, appellants contend that the trial court erred in refusing to submit their requested issue inquiring as to whether Rotana breached the implied warranty of suitability. They rely on the supreme court's recognition of a commercial landlord's implied warranty of suitability in Davidow v. Inwood North Professional Group, 747 S.W.2d 373 (Tex.1988):
There is an implied warranty of suitability by the landlord in a commercial lease that the premises are suitable for their intended commercial purpose. This warranty means that at the inception of the lease there are no latent defects in the facilities that are vital to the use of the premises for their intended commercial purpose and that these essential facilities will remain in a suitable condition.
Appellants maintain that the question before this Court is whether the warranty of suitability encompasses the availability of sufficient, suitable parking facilities for use by their customers, and that the test to be applied in making this determination is whether parking was among the "facilities that are vital to the use of the premises for their intended commercial purpose." Id. They argue that, because the intended use of the premises, and the use required by the lease, was the operation of a "first class restaurant and bar," adequate parking was essential and, therefore, a vital facility under their lease. They point to their evidence that parking for the Catalina Cafe was insufficient because of their cotenants' uses of their premises as sit-down/drive-in restaurants, in violation of their respective leases, that consequently the parking available to the three tenants violated the city parking requirements, and that the landlord took no action to enforce Wok-n-Roll's and Windsor's lease restrictions. They conclude that because whether there has been a breach of the warranty is generally a fact question, id., and because they presented a proper issue for submission to the jury along with some evidence to support the finding of a breach, the trial court committed reversible error in refusing to submit this issue to the jury.
Rotana replies that the Supreme Court's rationale for extending the implied warranty of suitability to a commercial tenant, as well as the court's explanation of the warranty as quoted above, demonstrates that the warranty is limited to latent defects within the leased...
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