TLC Hospitality, LLC v. Pillar Income Asset Mgmt., Inc.

• Decision Date: 15 March 2018
• Docket Number: NO. 12-16-00211-CV,12-16-00211-CV
• Citation: 570 S.W.3d 749
• Parties: TLC HOSPITALITY, LLC, Appellant v. PILLAR INCOME ASSET MANAGEMENT, INC., Appellee
• Court: Texas Court of Appeals

570 S.W.3d 749

TLC HOSPITALITY, LLC, Appellant

v.PILLAR INCOME ASSET MANAGEMENT, INC., Appellee

NO. 12-16-00211-CV

Court of Appeals of Texas, Tyler.

Opinion delivered March 15, 2018

Review Denied August 24, 2018

David F. Johnson, for Appellant.

Mitchell Madden, Dallas, for Appellee.

Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.

OPINION

Brian Hoyle, Justice

TLC Hospitality, LLC appeals the trial court’s judgment for specific performance and a monetary award rendered in favor of Pillar Income Asset Management, Inc. TLC raises eleven issues on appeal. We affirm.

BACKGROUND

Pillar is a real estate advisory/management company based in Dallas, Texas. On May 7, 2012, Pillar entered into a written contract with TLC to purchase an apartment complex owned by TLC. The contract described the property as street address 3101 Mustang Drive, Grapevine, TX 76051 and made reference to a legal description in an exhibit. But neither that exhibit nor any other exhibit to the contract contained such a description. The contract further set forth that the price for the property was $8,000,000.00 with Pillar’s being required to assume $5,700,000.00 of TLC’s existing note¹ and pay the difference in cash. The contract also set forth, in pertinent part, as follows:

Within ten (10) business days after the Effective Date, Seller shall request the approval of Existing Lender to the assumption of the Existing Indebtedness by Purchaser, under terms acceptable to Purchaser in its sole and absolute discretion, provided that Purchaser shall pay any fee or other charges required by the Existing Lender. If Existing Lender does not grant its approval as to the foregoing, (the "Loan Assumption") pursuant to documentation acceptable to Existing Lender and purchaser, each in its respective sole and absolute discretion (the "Loan assumption Documents"), Purchaser or Seller may, at any time thereafter, terminate this Agreement and the Title Company shall return the Deposit to Purchaser, whereupon neither party hereto shall have any further rights or obligations hereunder, except for those which survive the termination of this Agreement.

Purchaser may, without the prior written consent of Seller, but upon providing written notice of such assignment to Seller, assign its rights and interest in this Agreement and the Deposit and Additional Payments to an entity formed by Purchaser or any entity advised by Purchaser to acquire the Project. Any other assignment may not be made without the consent of Seller.

Subsequently, the parties twice amended the contract. The first amendment to the contract extended Pillar’s inspection period until June 15, 2012. The second amendment, which was executed that same day, set forth that Pillar would apply for the assumption and refinance of the loan within fifteen days from the date of the amendment.

Pillar initiated a transfer of physical assets (TPA) and corresponded with Oak Grove Capital² and Centennial Mortgage, Inc., both of which responded with engagement letters outlining the terms of the proposed loans. However, neither lender was able to apply to HUD for financing on Pillar’s behalf. Pillar made numerous requests to TLC to provide it with financial information so that it could, in turn, provide that information to the lenders in order to receive approval from HUD. However, TLC did not timely provide Pillar with its current financial statements.³

On July 15, 2013, TLC sent Pillar a letter terminating the agreement. In September 2013, TLC’s counsel sent correspondence to Pillar claiming Pillar defaulted on its obligations under the agreement.

Pillar filed the instant lawsuit alleging breach of contract and promissory estoppel. It further sought a declaratory judgment that (1) the agreement remains in effect and is valid and enforceable, (2) TLC waived any provision that "time is of the essence," (3) TLC is required to convey the property to Pillar upon the completion of HUD financing, and/or (4) Pillar is not in default under the agreement. By its suit, TLC sought specific performance of the contract, delay damages, attorney’s fees, and court costs. The matter proceeded to a bench trial.⁴ Ultimately, the trial court found in Pillar’s favor and awarded specific performance under the amended agreement. It further granted Pillar a monetary award for the net cash flow TLC enjoyed due to delay in executing the contract, as well as an award for the difference in interest rates between July 1, 2013, and the time performance takes place. The trial court also awarded Pillar attorney’s fees. This appeal followed.

EVIDENTIARY SUFFICIENCY—CONSIDERATION

In its second issue, TLC argues that the agreement was not supported by adequate consideration because it lacked mutuality of obligation and amounted to nothing more than an agreement to agree. Thus, it contends that the trial court’s findings and conclusions to the contrary are not supported by legally and factually sufficient evidence.

Standard of Review

In an appeal from a judgment after a bench trial, we accord the trial court’s findings of fact the same weight as a jury’s verdict. Milton M. Cooke Co. v. First Bank & Trust , 290 S.W.3d 297, 302 (Tex. App.—Houston [1st Dist.] 2009, no. pet.) ; see Brown v. Brown , 236 S.W.3d 343, 347 (Tex. App.—Houston [1st Dist.] 2007, no pet.). Unchallenged findings of fact are binding on an appellate court, unless the contrary is established as a matter of law or there is no evidence to support the finding. Walker v. Anderson , 232 S.W.3d 899, 907 (Tex. App.—Dallas 2007, no pet.) ; see McGalliard v. Kuhlmann , 722 S.W.2d 694, 696 (Tex. 1986) ; Mullins v. Mullins , 202 S.W.3d 869, 874, 876-77 (Tex. App.—Dallas 2006, pet. denied). However, when an appellant challenges a trial court’s findings of fact, an appellate court reviews those fact findings by the same standards it uses to review the sufficiency of the evidence to support a jury’s findings. See Pulley v. Milberger , 198 S.W.3d 418, 426 (Tex. App.—Dallas 2006, pet. denied).

Thus, to determine whether legally sufficient evidence supports a challenged finding, we must consider evidence that favors the finding if a reasonable factfinder could consider it, and we must disregard evidence contrary to the challenged finding unless a reasonable factfinder could not disregard it. See City of Keller v. Wilson , 168 S.W.3d 802, 827 (Tex. 2005). This Court may not sustain a legal insufficiency, or "no evidence," point unless the record demonstrates (1) a complete absence of evidence of a vital fact; (2) that the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact; (3) that the evidence offered to prove a vital fact is no more than a mere scintilla; or (4) that the evidence conclusively establishes the opposite of the vital fact. Id. at 810. More than a scintilla of evidence exists when the evidence supporting the finding, as a whole, rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. Merrell Dow Pharms., Inc. v. Havner , 953 S.W.2d 706, 711 (Tex. 1997). Less than a scintilla of evidence exists when the evidence is so weak as to do no more than create a mere surmise or suspicion of a fact. Driskill v. Ford Motor Co. , 269 S.W.3d 199, 203 (Tex. App.—Texarkana 2008, no pet.) (citing King Ranch, Inc. v. Chapman , 118 S.W.3d 742, 751 (Tex. 2003) ).

When a party attacks the legal sufficiency of an adverse finding on an issue on which it has the burden of proof, it must demonstrate on appeal that the evidence establishes, as a matter of law, all vital facts in support of the issue. Stanley Works v. Wichita Falls Indep. Sch. Dist. , 366 S.W.3d 816, 825 (Tex. App.—El Paso 2012, pet. denied). The reviewing court first examines the record for evidence that supports the finding, while ignoring all evidence to the contrary. Id. If there is no evidence to support the finding, the reviewing court will then examine the entire record to determine if the contrary proposition is established as a matter of law. Id.

When considering a factual sufficiency challenge, we consider and weigh all of the evidence, not just that which supports the verdict. Pool v. Ford Motor Co. , 715 S.W.2d 629, 635 (Tex. 1986) ; $132,265.00 in U.S. Currency v. State , 409 S.W.3d 17, 24 (Tex. App.—Houston [1st Dist.] 2013, no pet.). We will set aside a finding only if the evidence is so weak or the finding is so against the great weight and preponderance of the evidence that it is clearly wrong and unjust. Pool , 715 S.W.2d at 635 ; $132,265.00 in U.S. Currency , 409 S.W.3d at 24.

We review conclusions of law by the trial court de novo and will uphold them if the judgment can be sustained on any legal theory supported by the evidence. Brown , 236 S.W.3d at 348. The trial court’s conclusions of law are not subject to challenge for lack of factual sufficiency, but we may review the legal conclusions drawn from the facts to determine their correctness. Id.

What constitutes consideration for a contract is a question of law. Burges v. Mosley , 304 S.W.3d 623, 629 (Tex. App.—Tyler 2010, no pet.). But the recital of consideration in a written instrument is not conclusive, and the nature of the real consideration may be shown by parol evidence. See id.

Governing Law

In construing a written contract, the primary concern of the court is to ascertain the true intentions of the parties as expressed in the instrument. Coker v. Coker , 650 S.W.2d 391, 393 (Tex. 1983) ; see also Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. CBI Indus., Inc. , 907 S.W.2d 517, 520 (Tex. 1995). To achieve this objective, we must examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless. See Coker , 650 S.W.2d at 393 ; CBI Indus. , 907 S.W.2d at 520. No single provision taken alone will be given controlling effect; rather, all the provisions must be...