H.S.M. Acquisitions, Inc. v. West

• Decision Date: 18 January 1996
• Docket Number: No. 13-93-427-CV,13-93-427-CV
• Citation: 917 S.W.2d 872
• Parties: H.S.M. ACQUISITIONS, INC., Appellant, v. Marcella B. WEST, et al., Appellees.
• Court: Texas Court of Appeals

Page 872

917 S.W.2d 872

H.S.M. ACQUISITIONS, INC., Appellant, v. Marcella B. WEST, et al., Appellees.

No. 13-93-427-CV.

Court of Appeals of Texas Corpus Christi.

Jan. 18, 1996.

Rehearing Overruled March 14, 1996.

S. Loyd Neal, III, Pohl, Bennett & Mathews, Houston, for appellant.

Leo O. Bacher, Jr., Baker & McKenzie, Dallas, Jerald M. Rasansky, Baker & McKenzie, Dallas, B.D. Griffin, The Woodlands, William T. Powell, Houston, for appellees.

OPINION

Before FEDERICO G. HINOJOSA, Jr., CHAVEZ and BASS. ¹

FEDERICO G. HINOJOSA, Jr., Justice.

H.S.M. Acquisitions, Inc. appeals from the granting of summary judgment after reconsideration by the trial court. By three points of error, H.S.M. contends that improper notice of appellees' motion to reconsider was given, that numerous fact issues are raised by H.S.M.'s pleadings, and that the trial court erred in denying its motion for new trial. We affirm in part and reverse and remand in part.

This litigation arises out of a series of lease transactions involving property owned by Marcella B. West at 3911 Fondren in Houston. On or about January 1, 1979, West leased the property to Jim West & Company for a 10-year term expiring on December 31, 1988. The lease contained a five-year renewal option. On or about September 11, 1981, ² Jim West subleased the first floor of the building to Spectrix Corporation. Keystone Environmental Resources, Inc., a Delaware corporation (Keystone-DE) and subsidiary of Koppers Company (Koppers), succeeded Spectrix in 1986. Effectively, Keystone-DE became the sublessee.

On December 10, 1982, H.S.M. bought Jim West & Co. and expressly assumed its rights and obligations under the lease. H.S.M. closed its corporate offices on the second floor of the building and vacated the property by April 1983. On September 9, 1987, H.S.M. subleased the second floor to Keystone-DE for a period of three months from September 1987 to December 1987. H.S.M. and Keystone-DE executed an amendment to the sublease agreement, and Koppers guaranteed Keystone-DE's performance.

On June 29, 1988, Keystone-DE sent a letter to West, which West claims constituted an exercise of the renewal option to extend the term of the lease for a five-year period beginning January 1, 1989. On September 16 1988, Keystone Environmental Resources, Inc., a Pennsylvania corporation (Keystone-PA) and wholly-owned subsidiary of Chester Environmental Group, Inc. (Chester) ³, purchased certain assets of Keystone-DE, including the sublease. Keystone-DE underwent a name change and became known as Koppers Subsidiary XXII Company, Inc. (Koppers-Sub).

On September 19, 1988, Keystone-DE sent West a letter informing her that Chester had acquired Keystone-DE and that it was "placing a hold" on the "lease renewal notice." Three months later, on December 31, 1988, the term of the lease expired, and H.S.M. discontinued paying rent. From January 1, 1989 to October 31, 1990, Chester/Keystone remained in the building either pursuant to renewal or as a holdover tenant. During this twenty-two month period, Keystone-PA paid West $13,372.86 per month for the occupancy of the property, without prejudice to any party's rights with regard to the pending controversy. The twenty-two monthly payments totalled approximately $294,000.

Disputes evolved between West and appellees about whether the lease had been extended under an option clause of the lease and other issues. On May 4, 1989, Marcella West brought suit against H.S.M. and appellees, Koppers, Koppers-Sub, Keystone, and Chester for breach of the lease and various sublease agreements. West also sued Chester for tortious interference.

On October 16, 1990, West nonsuited all of the appellees. On November 30, 1990, West and appellees entered into a Compromise and Settlement Agreement. Appellees agreed, in part, as follows:

1. At the closing, as defined herein, Settling Defendants will assign, convey, and deliver to West, without recourse, all of their right, title and interest to the $45,000 restoration payment from HSM Acquisitions, Inc. ("HSM") under the terms of the lease, sublease and/or amended sublease for 3911 Fondren.... West agrees to obtain from HSM as part of any settlement of the surviving claim, a full release of Keystone, Koppers, Spectrix and Chester. It is understood that in the event of trial, this requirement does not apply.

H.S.M. filed a third-party action against all appellees on January 11, 1991. H.S.M. filed its First Amended Third Party Petition on April 19, 1991. On May 1, 1991, the trial court ordered a separate trial on the third-party claims. On May 20, 1991, West filed her Sixth Amended Original Petition against H.S.M. only.

In its third-party action against appellees, H.S.M. alleged that, as subtenants of the property, appellees were responsible for the damages suffered by West. H.S.M. eventually settled with West and reduced the settlement to a final judgment. As third-party plaintiff against appellees, H.S.M. sought to recover the sum of the judgment and the attorneys' fees and expenses incurred in defending the West suit. H.S.M. also sought exemplary damages.

By its first point of error, H.S.M. complains that the trial court's rehearing of a summary judgment motion without appropriate notice to H.S.M. was improper. Under this point of error, H.S.M. first contends that TEX.R.CIV.P. 166a requires that "reasonable notice" be given for a hearing on a motion for summary judgment, even reconsideration of a denied motion. H.S.M. argues that it received notice of the motion to reconsider only three business days prior to the hearing. Secondly, H.S.M. contends that the motion to reconsider informed H.S.M.'s counsel that appellees were asking the trial court to reconsider the motion for summary judgment relating to appellees' counterclaims against H.S.M. H.S.M. argues that at the hearing on the motion to reconsider, appellees asked the trial court to reconsider the motion for summary judgment addressing H.S.M.'s affirmative claims against appellees. H.S.M. argues that the lack of notice that appellees were going to ask the trial court to reconsider the motion for summary judgment addressing H.S.M.'s affirmative claims against appellees and the raising of new issues during oral argument, which were not made the subject of any prior motion, significantly prejudiced H.S.M. at the summary judgment hearing. H.S.M. does not challenge the trial court's authority to reconsider its original ruling denying the motions for summary judgment.

Appellees filed three different motions for summary judgment. On August 31, 1993, appellees filed "Cross-Plaintiffs' Motion for Partial Summary Judgment" relating to appellees' counterclaims against H.S.M. On September 4, 1993, they filed "Third-Party Defendants' Motion for Summary Judgment" relating to H.S.M.'s third-party action against appellees. On September 28, 1993, Koppers and Koppers-Sub filed a Supplemental Motion for Summary Judgment. The trial court denied the first two motions by order dated October 13, 1992. The trial court did not rule on the supplemental motion.

On February 16, 1993, appellees filed "Counter-Plaintiffs' Motion to Reconsider the Court's Order Denying Counter-Plaintiffs' Motion for Summary Judgment." In this motion, appellees were denominated "Third-Party Defendants, Counter-Plaintiffs, and Cross-Plaintiffs." The motion to reconsider asked the trial court "to reconsider only one of the motions: Third Party Defendants' Motion for Summary Judgment on its Counterclaim against H.S.M. and to allow brief oral argument on that motion alone." The motion further advised the court that

[i]f, upon rehearing, this Court were to grant the defensive Motion for Summary Judgment, this case would be completely disposed of: (1) HSM's third-party claim for indemnity would be resolved; (2) Third-Party Defendants' counterclaim would be resolved; and (3) Chester and Keystone's cross-claim against West would be rendered largely moot.

According to H.S.M., the motion to reconsider gave notice that appellees prayed for reconsideration only of appellees' first motion, "Cross-Plaintiffs' Motion for Partial Summary Judgment" relating to their counterclaims against H.S.M. H.S.M. asserts that, at the hearing held on February 22, 1993, appellees instead urged reconsideration of its second motion addressing H.S.M.'s affirmative claims against appellees, styled "Third-Party Defendants' Motion for Summary Judgment." According to H.S.M., appellees presented no argument relating to their counterclaims against H.S.M., as H.S.M. had expected. The trial court granted appellees' motion to reconsider and entered an Order Granting Third-Party Defendants' Motion for Summary Judgment.

Appellees Keystone and Chester, by separate brief, contend that it is within the inherent authority of a trial court to reconsider an interlocutory summary judgment order and that no motion or notice to H.S.M. was necessary. Notwithstanding, appellees argue that H.S.M. was given fair and adequate notice of the reconsideration requested and that H.S.M. waived any objection to notice by failing to so object and by proceeding with argument at the hearing.

The record reflects that the motion to reconsider was served on all counsel by fax transmission on February 15, 1993, seven days before the hearing. H.S.M. filed no response, raised no objection alleging a deficiency in the motion's substance or timing, and made no request for a continuance. Counsel for H.S.M. appeared at the hearing on the motion to reconsider and extensively argued the merits of the motion. H.S.M. does not contend that it received inadequate notice of any of the three original motions for summary judgment filed by appellees.

A trial court has the inherent authority to change or modify any interlocutory order or judgment until the judgment becomes final. A trial court may, in the exercise of discretion, properly grant summary judgment after having previously...