Jallan v. PNA Invs.
| Docket Number | 14-21-00460-CV |
| Decision Date | 18 August 2023 |
| Parties | GULSHAN R. JALLAN, Appellant v. PNA INVESTMENTS, LLC, Appellee |
| Court | Texas Court of Appeals |
1
GULSHAN R. JALLAN, Appellant
v.
PNA INVESTMENTS, LLC, Appellee
No. 14-21-00460-CV
Court of Appeals of Texas, Fourteenth District
August 18, 2023
On Appeal from the County Court No. 1 Galveston County, Texas Trial Court Cause No. CV-0083953
Panel consists of Justices Spain, Poissant, and Wilson.
MEMORANDUM OPINION
MARGARET “MEG” POISSANT, JUSTICE
Appellant Gulshan R. Jallan ("Jallan") appeals a judgment in favor of appellee PNA Investments, LLC ("PNA") following a bench trial.[1] In five issues, Jallan argues: (1) there is legally insufficient evidence that Jallan is personally liable based on the personal guaranty in the record; (2) there is legally and factually insufficient evidence that Parkway owes PNA $500,000.00; (3) there is
insufficient evidence that Parkway's breach of the contract caused PNA $500,000.00 in damages; (4) there is legally and factually insufficient evidence supporting the $126,000.00 damage award for rent and "NNN" expenses; and (5) the trial court erred in finding that PNA satisfied its duty to mitigate damages. We affirm.
I. Background
On May 9, 2019, PNA filed suit for breach of contract and conversion against Jallan, Anil Rameshchandra Vyas, Vikas Jain, Gurbax Singh (collectively the "individual defendants"), and Parkway Express, LLC ("Parkway"). PNA alleged it leased premises to Parkway for 180 months for the operation of a convenience store. During months 121 to 180 of the lease, Parkway agreed to pay $11,000.00 per month in rent, plus taxes, insurance, utilities, maintenance, and all other operating costs, referred to by the parties as NNN expenses.
PNA alleged that Parkway failed to pay rent and NNN expenses for March 2019, leading PNA to issue a default letter and demand payment to Parkway. Parkway failed to respond and to make payments due under the lease, and PNA terminated the lease on March 19, 2019.
PNA sought $22,000.00 owed in past due rent, reasonable attorney's fees, expenses incurred to enforce and collect the amounts owed, all amounts owed under § 11.3 of the lease, and direct and consequential damages. PNA also alleged that the individual defendants guaranteed Parkway's obligations under the lease. Finally, PNA alleged that Parkway damaged the premises, necessitating approximately $300,000.00 in repairs, and that Parkway removed property it was not entitled to remove, causing additional damages of approximately $275,000.00.
On May 11, 2021, PNA's lawsuit was tried to the bench. PNA presented
testimony from Samuel Virani ("Virani"), the president and managing member of PNA.[2] Virani testified that PNA has owned the property at issue since 2002; that Parkway signed the lease with PNA in 2006; and that on June 23, 2006, the four individual defendants executed a personal guaranty on the lease between Parkway and PNA. Virani testified that the personal guaranty was signed by the four individual defendants at the same time as the lease. Virani also testified regarding the damage caused to the premises by Parkway and the equipment removed by Parkway when it vacated the premises.
Virani further explained that in order to lease the premises to PNA's new tenant, 7-Eleven, PNA had to pay 7-Eleven $500,000.00 for 7-Eleven to remodel and repair the store and replace all of the necessary equipment for its operation.[3]Virani also testified that the cost of replacing all of the equipment damaged or stolen by Parkway was approximately $521,000.00 and the trial court admitted into evidence an exhibit where Virani specified the cost to repair or replace certain items.[4]
On May 11, 2021, the trial court signed a final judgment, ordering that PNA recover $657,368.48 from the defendants, jointly and severally, plus attorney's fees and pre-judgment and post-judgment interest.
On June 7, 2021, the trial court issued findings of fact and conclusions of
law. The trial court found that: Parkway failed to pay rent for March 2019; Parkway breached the terms of the lease; PNA terminated the lease on March 19, 2019; the NNN expenses at the time of default were $3,000.00 per month; Parkway owes PNA $126,000.00 under the lease for rent and NNN expenses; and Parkway owes PNA $500,000.00 "for repairing, altering, renovating, partitioning, enlarging, remodeling, or otherwise putting the Premises into a condition acceptable to and reasonably necessary to obtain new tenants and/or for the cost of reletting the premises." The trial court also found that Jallan entered into a valid and enforceable guaranty guaranteeing each and every obligation under the lease and that the personal guarantee was attached and affixed to a lease agreement dated July 1, 2006. The trial court determined that PNA was to recover $680,168.48 from the defendants, jointly and severally.
This appeal followed.
II. Discussion
In his first four issues, Jallan argues: (1) the evidence is legally insufficient that he is personally liable on the lease agreement based on the guaranty in the record; (2) the evidence is legally and factually insufficient that Parkway owes PNA $500,000.00; (3) there is insufficient evidence of causation concerning the $500,000.00 damages award; and (4) there is legally and factually insufficient evidence of the $126,000.00 damage award to PNA for rent and NNN expenses.
A. Standard of Review
When specific findings of fact and conclusions of law are filed and a reporter's record is before the appellate court, the findings will be sustained if there is evidence to support them, and the appellate court will review the legal conclusions drawn from the facts found to determine their correctness.
Trelltex, Inc. v. Intecx, L.L.C., 494 S.W.3d 781, 789 (Tex. App.-Houston [14th Dist.] 2016, no pet.); see Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991). Findings of fact have the same force and dignity as a jury's verdict and are reviewable under the same standards of legal and factual sufficiency. Anderson, 806 S.W.2d at 795; Foley v. Capital One Bank, N.A., 383 S.W.3d 644, 646 (Tex. App.-Houston [14th Dist.] 2012, no pet.).
When reviewing the legal sufficiency of the evidence, we review the evidence in the light most favorable to the challenged finding and indulge every reasonable inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We credit favorable evidence if a reasonable factfinder could and disregard contrary evidence unless a reasonable factfinder could not. Id.
When a legal sufficiency challenge concerns an issue on which the appellant does not bear the burden of proof, we review it under a "no evidence" standard. See id. at 810. A no-evidence challenge will be sustained when (a) there is a complete absence of evidence of a vital fact, (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes the opposite of the vital fact. Serv. Corp. Intern. v. Guerra, 348 S.W.3d 221, 228 (Tex. 2011). Evidence is more than a scintilla if it "rises to a level that would enable reasonable and fair-minded people to differ in their conclusions." Ford Mtr. Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004). If, however, the evidence does no more than create a mere surmise or suspicion and is so slight as to necessarily make any inference a guess, then it is no evidence. Id.
In reviewing the factual sufficiency of the evidence, we must examine the entire record, considering both the evidence in favor of, and contrary to, the
challenged findings. See Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 40607 (Tex. 1998); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986). We may set aside the verdict only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust. See Ellis, 971 S.W.2d at 407; Barnhart v. Morales, 459 S.W.3d 733, 745 (Tex. App.-Houston [14th Dist.] 2015, no pet.). The amount of evidence necessary to affirm is far less than the amount necessary to reverse a judgment. Barnhart, 459 S.W.3d at 745. The trial judge is the sole judge of the credibility of the witnesses and the weight to be given their testimony. Id.
We review a trial court's conclusions of law de novo. State v. Heal, 917 S.W.2d 6, 9 (Tex. 1996); Potcinske v. McDonald Prop. Inv., Ltd., 245 S.W.3d 526, 529 (Tex. App.-Houston [1st Dist.] 2007, no pet.). When performing a de novo review, we exercise our own judgment and redetermine each legal issue. Trelltex, Inc., 494 S.W.3d at 790. To make this determination, we consider whether the conclusions are correct based on the facts from which they are drawn. Potcinske, 245 S.W.3d at 529.
B. Guaranty &Personal Liability
Jallan first argues that there is legally insufficient evidence that he is personally liable to PNA pursuant to a personal guaranty because there was no meeting of the minds between the parties.
A guaranty agreement creates a secondary obligation whereby the guarantor promises to be responsible for the debt of another and may be called upon to perform if the primary obligor fails to perform. Abel v. Alexander Oil Co., 474 S.W.3d 795, 800-01 (Tex. App.-Houston [14th Dist.] 2014, no pet.); Wasserberg v. Flooring Servs. of Tex., LLC, 376 S.W.3d 202, 205-06 (Tex. App.-Houston [14th Dist.] 2012, no pet.). To recover under a guaranty contract, a party must show proof of (1) the existence and ownership of the guaranty contract; (2) the
terms of the underlying contract by the holder; (3) the occurrence of the conditions upon which liability is based; and (4) the failure or refusal to perform the promise by the guarantor. Abel, 474 S.W.3d at 800.
According to the rule of strictissimi juris, a guarantor may require that the terms of his guaranty be strictly followed, and that the agreement not be...
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