Johnson v. Waters At Elm Creek L.L.C.

• Decision Date: 16 October 2013
• Docket Number: No. 04–12–00779–CV.,04–12–00779–CV.
• Citation: 416 S.W.3d 42
• Parties: Shannon L. JOHNSON and Javier G. Gonzalez, Appellants v. WATERS AT ELM CREEK L.L.C., Appellee.
• Court: Texas Court of Appeals

416 S.W.3d 42

Shannon L. JOHNSON and Javier G. Gonzalez, Appellants

v.WATERS AT ELM CREEK L.L.C., Appellee.

No. 04–12–00779–CV.

Court of Appeals of Texas,

San Antonio.

Oct. 16, 2013.

Matthew Obermeier, San Antonio, TX, for Appellants.

Robert David Fritsche, San Antonio, TX, for Appellees.

Sitting: CATHERINE STONE, Chief Justice, SANDEE BRYAN MARION, Justice, PATRICIA O. ALVAREZ, Justice.

OPINION

Opinion by: CATHERINE STONE, Chief Justice.

This appeal arises from a dispute over the return of a security deposit. After a bench trial, the trial court signed a take-nothing judgment in favor of Waters at Elm Creek, L.L.C., awarding it $18,623.16 in attorneys' fees. On appeal, Shannon Johnson and Javier G. Gonzalez contend the trial court erred in denying their first hybrid motion for summary judgment and that the evidence is legally and factually insufficient to support the trial court's judgment. In an amicus brief, an issue was raised regarding the trial court's order granting Waters at Elm Creek's second motion for sanctions. Before oral argument, this court notified the parties that the court was interested in hearing arguments on the sanctions issue. For the reasons stated in this opinion, the trial court's order granting the second motion for sanctions is reversed. The remainder of the trial court's judgment is affirmed.

Background

Johnson and Gonzalez signed a lease for an apartment in an apartment complex owned by Waters at Elm Creek. In accordance with the lease, Johnson and Gonzalez paid a $663.00 security deposit. The lease required Waters at Elm Creek to mail the “security deposit refund (less lawful deductions) and an itemized accounting of any deductions no later than 30 days” after Johnson and Gonzalez surrendered possession of the apartment. Johnson and Gonzalez surrendered possession of the apartment on October 5, 2009.

Johnson subsequently received a check in the amount of $136.11 in the mail with an itemized accounting of the deductions made by Waters at Elm Creek. The accounting was dated October 23, 2009; however, the check was dated November 10, 2009. The postmark on the envelope in which the check and accounting were mailed was dated November 11, 2009.

On November 20, 2009, Johnson and Gonzalez filed a pro se original petition against Waters at Elm Creek, alleging Waters at Elm Creek had failed to timely and properly “render an accounting” as a result of its bad faith and had forfeited any right to withhold any portion of the deposit. Johnson and Gonzalez subsequently filed three motions for summary judgment, all of which were denied by the trial court. In its response to the third motion for summary judgment, Waters at Elm Creek requested sanctions, asserting the third motion for summary judgment was groundless and brought in bad faith. The trial court granted the motion for sanctions and ordered Johnson to pay Waters at Elm Creek $500 for the attorney's fees it incurred in responding to the third motion for summary judgment. The deadline for paying the sanctions was April 13, 2012.

On April 16, 2012, Johnson filed a petition for writ of mandamus and motion for temporary relief with this court challenging the sanctions order. Having determined that Johnson had an adequate remedy by appeal, this court issued an order denying the petition on April 17, 2012. Johnson received notice that her petition was denied on April 20, 2012. Upon receiving the notice, Johnson attempted to tender a check in payment of the sanctions to the attorney for Waters at Elm Creek. After the attorney rejected the check as untimely, Johnson deposited the check into the registry of the trial court.

On April 30, 2012, Waters at Elm Creek filed a second motion for sanctions, asserting, “The filing of the Mandamus Proceedings is the type of vexatious litigation that is frivolous, groundless and brought for the purposes of harassment.” On May 1, 2012, an attorney filed an appearance of counsel on behalf of Johnson and a motion to set the cause on the non-jury docket. An order was signed on May 1, 2012, setting the cause for trial on June 28, 2012.

On May 8, 2012, a hearing was held on Waters at Elm Creek's second motion for sanctions. At the conclusion of the hearing, the trial court signed an order granting the motion and ordering Johnson to pay $1,500, which the trial court determined were the attorneys' fees “reasonable and necessary for Defendant filing Defendant's Second Motion for Sanctions against [Johnson], preparing to respond to the Mandamus Proceedings, preparing an order thereon and appearing here today.” ¹ In the order, the trial court expressly finds, “The filing of the Mandamus Proceedings is the type of vexatious litigation that is frivolous, groundless and brought for the purposes of harassment.”

On May 16, 2012, the trial was reset to July 20, 2012. After hearing the evidence, the trial court signed a take-nothing judgment in favor of Waters at Elm Creek and awarded it $18,623.16 in attorney's fees. The trial court entered findings of fact and conclusions of law, expressly finding that Waters at Elm Creek “had no intention to deprive [Johnson and Gonzalez] of a lawfully due security deposit refund” and “did not retain [the] security deposit in dishonest disregard of their rights.” The trial court further found that all amounts retained by Waters at Elm Creek from the security deposit were reasonable. Finally, the trial court found that Waters at Elm Creek did not retain the security deposit in bad faith or fail to provide a written description and itemized list of damages and charges in bad faith.

Denial of Summary Judgment

In their first issue, Johnson and Gonzalez assert the trial court erred in denying their first hybrid motion for summary judgment. Where a motion for summary judgment is denied by the trial court and the case is subsequently tried on its merits, the order denying the motion for summary judgment cannot be reviewed on appeal. Ackermann v. Vordenbaum, 403 S.W.2d 362, 365 (Tex.1966); Williams v. Colthurst, 253 S.W.3d 353, 359–60 (Tex.App.-Eastland 2008, no pet.). At oral argument, Johnson and Gonzalez withdrew this issue in view of the applicable law.

Sufficiency of the Evidence

In their second issue, Johnson and Gonzalez challenge the sufficiency of the evidence to support the trial court's ruling. Specifically, Johnson and Gonzalez contend Waters at Elm Creek did not present sufficient evidence to overcome the presumption that it acted in bad faith or to establish the reasonableness of the deductions it made from the security deposit.

A. Section 92.109

Section 92.109 of the Texas Property Code imposes liability on a landlord who in bad faith either: (1) wrongfully retains a security deposit; or (2) “does not provide a written description and itemized list of damages and charges.” Tex. Prop.Code Ann. § 92.109(a),(b) (West 2007). In a suit brought by a tenant seeking to impose liability on the landlord based on either of the foregoing grounds, “the landlord has the burden of proving that the retention of any portion of the security deposit was reasonable.” Id. at § 92.109(c). “A landlord who fails either to return a security deposit or provide a written description and itemization of deductions on or before the 30th day after the date the tenant surrenders possession is presumed to have acted in bad faith.” Id. at § 92.109(d).

B. Standard of Review

In this case, Johnson and Gonzalez brought suit seeking to impose liability on Waters at Elm Creek under section 92.109; accordingly, Waters at Elm Creek had the burden to prove its retention of a portion of the security deposit was reasonable. Id. at § 92.109(c). When a party challenges the legal sufficiency of the evidencesupporting an adverse finding on an issue for which it did not have the burden of proof, the party must show that no evidence supports the adverse finding. Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348 S.W.3d 194, 215 (Tex.2011). “Evidence is legally sufficient if it ‘would enable reasonable and fair-minded people to reach the verdict under review.’ ” Id. (quoting City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.2005)). “We ‘credit favorable evidence if reasonable jurors could, and disregard contrary evidence unless reasonable jurors could not.’ ” Id. “A factual sufficiency attack on an issue on which the appellant did not have the burden of proof requires the complaining party to demonstrate there is insufficient evidence to support the adverse finding.” Flying J Inc. v. Meda, Inc., 373 S.W.3d 680, 690–91 (Tex.App.-San Antonio 2012, no pet.). “A reviewing court will reverse the trial court only if the evidence which supports the jury's finding is so weak as to be clearly wrong and manifestly unjust.” Id. (internal citations omitted). “We may not substitute our judgment for that of the trier of fact or pass on the credibility of the witnesses.” Sunl Group, Inc. v. Zhejiang Yongkang Top Imp. & Exp. Co., Ltd., 394 S.W.3d 812, 817 (Tex.App.-Dallas 2013, no pet.).

C. Analysis

The undisputed evidence at trial established that Waters at Elm Creek failed to return the security deposit to Johnson and Gonzalez and failed to provide a written description and itemization of deductions on or before the 30th day after the date Johnson and Gonzalez surrendered possession. Johnson and Gonzalez surrendered possession on October 5, 2009, and the envelope containing the itemization of charges and the balance of the security deposit was postmarked November 11, 2009. Accordingly, Waters at Elm Creek is presumed to have acted in bad faith. Tex. Prop.Code Ann. § 92.109(d) (West 2007). The landlord bears the burden to rebut the presumption by presenting evidence that the landlord acted in good faith. Pulley v. Milberger, 198 S.W.3d 418, 428 (Tex.App.-Dallas 2006, pet. denied).

A landlord acts in bad faith if the landlord acts in dishonest disregard of the tenant's rights or intends to deprive the tenant of a lawfully due refund. Id...