Parkway Dental Assocs., P.A. v. Ho & Huang Props., L.P.

• Decision Date: 30 January 2013
• Docket Number: No. 14–10–01239–CV.,14–10–01239–CV.
• Citation: 391 S.W.3d 596
• Court: Texas Court of Appeals
• Parties: PARKWAY DENTAL ASSOCIATES, P.A., Poorang Pahlavan, H. Tram Nguyen and Shannon Presley, Appellants v. HO & HUANG PROPERTIES, L.P. and SW Parkway Management, Inc., Appellees.

391 S.W.3d 596

PARKWAY DENTAL ASSOCIATES, P.A., Poorang Pahlavan, H. Tram Nguyen and Shannon Presley, Appellants

v.HO & HUANG PROPERTIES, L.P. and SW Parkway Management, Inc., Appellees.

No. 14–10–01239–CV.

Court of Appeals of Texas, Houston (14th Dist.).

Dec. 20, 2012.

Rehearing Overruled Jan. 30, 2013.

David A. Carp, Houston, TX, for Appellants.

Stephen Ray Smith, Houston, TX, for Appellees.

Panel consists of Justices FROST, BROWN, and CHRISTOPHER.

OPINION

KEM THOMPSON FROST, Justice.

In this case, a former tenant under a commercial lease sued the former landlord and its management company asserting breach of the lease and fraud, as well as other claims. The trial court granted the defendants' no-evidence and traditional summary-judgment motions, dismissing all of the former tenant's claims. The lease contained a provision under which the prevailing party in any legal proceeding relating to the transaction is entitled to recover its reasonable attorney's fees and litigation costs. After a jury trial on the amount of the defendants' reasonable attorney's fees and litigation costs, the trial court rendered judgment in the defendants' favor based upon the jury's verdict. We conclude that the trial court erred in granting a no-evidence summary judgment as to the claims for breach of contract and anticipatory repudiation, but that the trial court did not err in granting summary judgment as to the remaining claims. Accordingly, we sever, reverse, and remand the tenant's breach-of-contract and anticipatory-repudiation claims as well as the parties' requests for attorney's fees, and we affirm the remainder of the trial court's judgment.

I. Factual and Procedural Background

In January 2004, appellant Parkway Dental Associates, P.A. (“Parkway”) as tenant, and SW Parkway Management, Inc., as agent for Ho & Huang Properties, L.P., as landlord, executed a commercial lease (the “Parkway Lease”). Appellants Poorang Pahlavan, H. Tram Nguyen, and Shannon Presley, officers of Parkway, guarantied the performance of Parkway's obligations under the Parkway Lease. The term of the Parkway Lease began on April 1, 2004 and lasted five years; Parkway had the option to extend the term for an additional five years. Parkway used the Parkway Lease premises for the practice of general dentistry.

The Parkway Lease included an “Addendum Regarding Restrictions on Use of Project by Other Tenants.” Under this addendum, the landlord promised that, unless there was an uncured default under the Parkway Lease by Parkway, the landlord would “not permit any portion of the Project to be used for a Competitive Business.” Under this provision (the “Covenant”), “Competitive Business” was defined as “Businesses practic[ing] ... [g]eneral dentistry.” As used in this provision, “Project” included the building or complex in which the leased premises were located, any of the common areas, as well as the parking areas in the shopping center in question.

Parkway occupied the leased premises and paid rent under the Parkway Lease to the landlord throughout the initial five-year term. In June 2006, Ho & Huang Properties, L.P. (“Ho & Huang”) conveyed a 2.837 acre tract (“Tract”) to Ho and Huang Parkway Holding, L.P. The Tract was part of the parking lot for the shopping center in question. In conveying the Tract, Ho & Huang did not require that the grantee agree to a restriction that was the same as or similar to the Covenant. In that same month, Ho and Huang Parkway Holding, L.P. sold and conveyed the Tract to TCHL Investment II, L.L.C. (the “Purchaser”).

In conveying the Tract, Ho and Huang Parkway Holding, L.P. did not require that the Purchaser agree to a restriction that was the same as or similar to the Covenant. In 2007, the Purchaser leased office space on the Tract to Aquarium Dental, L.L.C. Under the lease between the Purchaser and Aquarium Dental (the “Aquarium Dental Lease”), the leased premises are to “be used and occupied by [Aquarium Dental] solely as dental care and related business [sic] and for no other purpose without [the Purchaser's] prior written consent.” Parkway asserts that Dr. Tuan Thanh Pham, the principal of Aquarium Dental, has used the leased premises for the practice of general dentistry since early 2009, before April 1, 2009.

Parkway asserts that it first learned of the presence of Aquarium Dental in the fall of 2007, when Aquarium Dental posted a sign stating that it would be opening soon. When Parkway complained to Ho & Huang and the Management Company (collectively, the “Landlord”), the Landlord advised that there was nothing the Landlord could do because the Tract had been sold to a third party and the Landlord no longer had any control over that part of the Project. Based upon Parkway's investigation, it appeared that Dr. Pham and Aquarium Dental were establishing a competing general dentistry practice. In November 2007, before Dr. Pham began practicing at the Aquarium Dental office, Parkway filed suit in the court below seeking injunctive and monetary relief against Ho & Huang Properties, L.P. (“Ho & Huang”), SW Parkway Management, Inc. (the “Management Company”), and Dr. Pham d/b/a Aquarium Dental. The trial court did not grant injunctive relief in Parkway's favor, and Parkway later nonsuited its claims against Dr. Pham.

Parkway attempted to negotiate a right to terminate the Parkway Lease early and without penalty, if its business was harmed by Aquarium Dental. Ho & Huang refused to agree to such a modification of the Parkway Lease. Because of the presence of Aquarium Dental's office on the Project, Parkway decided not to exercise its option to extend the term of the Parkway Lease for an additional five years. The Parkway Lease terminated by its own terms on March 31, 2009, with Parkway having paid all rent due under the Parkway Lease. The dental practice that had been operated on the premises leased by Parkway was closed after the Parkway Lease expired.

In the lawsuit, Parkway asserted claims against the Landlord for breach of the Parkway Lease, fraud, including fraudulent inducement, statutory fraud under Chapter 27 of the Texas Business and Commerce Code, negligent misrepresentation, “unjust enrichment,” money had and received, and “restitution.” The Landlord filed various summary-judgment motions. As to Parkway's breach-of-contract claim, the trial court granted a no-evidence motion in part on the following grounds:

• Parkway failed to produce any competent summary-judgment evidence demonstrating the existence of a competing business engaged in the practice of general dentistry on the Project during the primary term of the Parkway Lease.

• Parkway failed to produce any competent summary-judgment evidence that the Landlord breached the Parkway Lease.

• Parkway failed to produce any competent summary-judgment evidence as to the existence of an agreement with the Landlord that prohibited it from selling a portion of the Project without requiring the purchaser to abide by the terms of the Covenant.

• Parkway failed to produce any competent summary-judgment evidence that Parkway was excused from complying with the Parkway Lease requirement to exercise the option for a second five-year term and, as a result, the Landlord's obligations under the Parkway Lease terminated no later than March 31, 2009.

• Parkway failed to produce any competent summary-judgment evidence that it suffered any harm or damages resulting from a breach by the Landlord of any of its obligations under the Parkway Lease.

In a no-evidence motion for summary judgment as to Parkway's claims other than for breach of contract and anticipatory repudiation, the Landlord asserted no-evidence grounds as to almost all of the essential elements of Parkway's claims for common-law fraud, fraudulent inducement, statutory fraud, negligent misrepresentation, and money had and received. The Landlord asserted that restitution and unjust enrichment are not independent claims but also challenged essential elements regarding these theories. The Landlord filed a separate motion asserting various traditional summary-judgment grounds against these claims. The trial court granted these two motions without specifying the grounds and dismissed all of these alleged claims.

Based upon the dismissal of all of Parkway's claims, the trial court concluded that the Landlord was a prevailing party under a Parkway Lease provision allowing a prevailing party to recover its reasonable attorney's fees and litigation costs. The parties tried to a jury the issue of reasonable fees for the services of the Landlord's attorneys in this case, as well the amount of the Landlord's out-of-pocket litigation costs. The trial court rendered a final judgment in favor of the Landlord and against Parkway for the amounts found by the jury at trial.

II. Issues Presented

On appeal, Parkway asserts three issues:

(1) The trial court erred in granting the Landlord's no-evidence summary-judgment motion as to Parkway's claims for breach of contract and anticipatory repudiation.

(2) The trial court erred in granting the Landlord's no-evidence and traditional motions for summary judgment as to Parkway's remaining claims.

(3) The trial court erred in allowing recovery of $385,000 in attorney's fees plus conditional post-judgment and appellate attorney's fees when (a) the Landlord was not the prevailing party; (b) the Landlord did not properly segregate fees as required; and (c) the fees awarded were not reasonable and necessary.

III. Standards of Review

In a traditional motion for summary judgment, if the movant's motion and summary-judgment evidence facially establish its right to judgment as a matter of law, the burden shifts to the nonmovant to raise a genuine, material fact issue sufficient to defeat summary judgment. M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex.2000). In reviewing a no-evidence summary judgment, we ascertain whether the nonmovant pointed out summary-judgment...