United Interests, Inc. v. Brewington, Inc.

• Decision Date: 19 March 1987
• Docket Number: No. C14-86-033-CV,C14-86-033-CV
• Citation: 729 S.W.2d 897
• Parties: UNITED INTERESTS, INC., Appellant, v. BREWINGTON, INC., Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 897

729 S.W.2d 897

UNITED INTERESTS, INC., Appellant, v. BREWINGTON, INC., Appellee.

No. C14-86-033-CV.

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

March 19, 1987.

Rehearing Denied April 30, 1987.

Anthony J. Sadberry, Phillip R. Livingston, Houston, for appellant.

Daniel Kistler, Houston, for appellee.

Before JUNELL, DRAUGHN and ELLIS, JJ.

OPINION

JUNELL, Justice.

United Interests, Inc. (appellant) appeals from a judgment rendered in a non-jury trial granting permanent injunctive relief to Brewington, Inc. (appellee). At issue is the construction of certain written leases. In nineteen points of error, appellant challenges the trial court's findings of ambiguity and mutual mistake, its issuance of the injunction, its refusal to declare the rights of appellant under a sublease and its award of attorney's fees. Appellee also challenges the award of attorney's fees in a cross-point. The trial court's judgment is affirmed in part and reversed and rendered in part.

On May 12, 1967, Jack G. Jones, Trustee, and SCM Corporation executed a "build to suit" lease covering the land located at 5702 Hillcroft in Houston. Jones agreed to construct an office-warehouse building and lease it and the property to SCM for twenty years. Three land areas remained after construction of the building--one on the front and one each on the north and south sides of the building.

On July 21, 1983, SCM subleased approximately 6,168 square feet of the building to Sabel's T.V. Service, Inc. (Sabel). This lease was made subject to the Jones--SCM or master lease, with paragraph 20 stating the following:

20. Parking of Automobiles. General parking shall be in the front and on the north side of the general parking area and there shall be no assigned parking spaces provided for any Tenant in these areas.

On January 12, 1984, SCM subleased another 7,224 square feet of the building to Brewington, Inc. under the following arrangement. SCM (more commonly known as Smith-Corona) was engaged in the business of selling and repairing business machines; however, that company decided to close its factory service station in Houston and turn the servicing over to an authorized representative, who would make repairs on SCM's behalf and then bill SCM. SCM selected Brewington, a local typewriter company, as its representative and stipulated that Brewington move into its premises. SCM wanted the repair station to stay at that location because customers were familiar with it and because certain literature and the machines themselves contained that service address and phone number.

SCM appears to have copied the Brewington sublease from the Sabel sublease. Indeed, paragraph 8 of the Brewington sublease is identical to paragraph 9 of the Sabel sublease, which states that "Tenant shall be entitled to use the Demised Premises for the service and repair and sales of televisions and other related electronic equipment." Brewington sells and repairs typewriters and computer printers, but not televisions and other related electronic equipment. The Brewington sublease also was made subject to the master lease, and parking (paragraph 19) was provided for in language identical to that in the Sabel sublease.

On August 1, 1984, with SCM's consent, Brewington subleased 2,700 square feet of its lease space to Amstar Satellite Systems, Inc. Once again, the Sabel sublease appears to have been used as the model for this new sublease, though the "use" paragraph (paragraph 8) was changed to reflect Amstar's actual business. The parking paragraph (paragraph 19) once again remained unchanged.

On December 25, 1984, Jack G. Jones, Trustee, conveyed all of the property and the Hillcroft building to United Interests, Inc., Trustee, which purchased the property as trustee for a partnership consisting of United Interests, Inc. and others. One month later, SCM assigned all of its rights as lessee under the master lease to United Interests.

United Interests notified Brewington of the SCM assignment by letter of February 7, 1985, and also advised that a physical inspection of the premises was in progress. On February 20th, United Interests wrote Brewington that the inspection was complete, enclosed a copy of the repair bid and requested from Brewington a proportionate share (50% or $27,560.00) of the repair expenses. Thereafter, on March 18th, United Interests informed Brewington that, due to the latter's failure to contribute its share of the repair expenses or to make arrangements for the repairs, United Interests was giving formal notice of default under the Brewington sublease and reserved the right to terminate the sublease unless Brewington contributed to or arranged for repairs within thirty days.

There was no further communication until July 11, 1985, when United Interests' attorney wrote Brewington that property immediately to the south of the building had been leased to CSI Collision Specialist, Inc. (d/b/a CSI Used Cars). The letter advised Brewington that this property included a portion of the parking area south of the building and that parking on the south side by Brewington's employees and customers would not be permitted. Almost immediately, Brewington filed suit for an injunction and a declaration of its rights under its sublease. United Interests counterclaimed for a declaration of its rights under the leases in question. CSI filed a related action for injunctive relief and damages against Brewington, and the causes of action were consolidated for trial. Following the trial, the court entered judgment for Brewington and filed Findings of Fact and Conclusions of Law. CSI is not a party to this appeal.

In points of error one through four, United Interests asserts that the trial court erred as a matter of law in finding ambiguity in the Brewington sublease; in allowing the admission of parol evidence to vary its terms; in allowing the admission of hearsay evidence to explain its terms; and in reforming the terms of the sublease.

In Conclusion of Law No. II, the trial court concluded that paragraphs 8 (use) and 19 (parking) of the sublease between SCM and Brewington were ambiguous. We agree. The question of whether a contract is ambiguous is one of law for the court. R & P Enterprises v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 518 (Tex.1980). When interpreting a contract, a court's primary concern is to ascertain and to give effect to the parties' intentions as expressed in the instrument. To do so, the court must examine and consider the entire instrument so that none of its provisions will be rendered meaningless. A contract is ambiguous only when the application of the pertinent rules of interpretation leaves it genuinely uncertain which one of two or more meanings is the proper one. If a contract is determined to be ambiguous, then extrinsic evidence is admissible to discover its true meaning. Id. at 518-19. With these precepts in mind, we examine the sublease in question.

Paragraph 19 concerning parking is ambiguous in and of itself. Neither "general parking" nor "general parking area" is defined. The term "general parking" implies that there is also some other kind of parking. "General parking area" equates with the entire parking lot, and the paragraph could be interpreted as requiring that employees and customers park in the front of or on the north side of both the north and south parking areas. Finally, the paragraph does not read "in the front and on the north side of the building ", which would more readily comport with United Interests' desired interpretation.

The ambiguity is compounded when paragraph 19 is considered with the rest of the sublease, particularly paragraph 15, which concerns remodeling of the premises. Brewington agreed to accept the premises "as is" "excepting repairs of parking lot and facade made at SCM's expense" (a phrase interlineated by Brewington's president). The paragraph did not address whether repairs were to be restricted to a certain part of the parking lot. Indeed, trial testimony confirmed that repairs were made to both the north and south parking areas and paid for by SCM. Brewington's concern about repairs to the parking lot suggests that a well-maintained one was essential to its occupancy of the building. This renders even more ambiguous a lease term that would then restrict the use of that lot.

The trial court found that the interlineation of paragraph 15 and the general ambiguity of paragraph 19 allowed parol evidence of Brewington's need for, as well as prior use of, the south parking lot. Again, we agree. Preston Whitfill was a service manager for SCM at the Hillcroft location. When Brewington contracted to do SCM's warranty work in the Houston area and moved into SCM's leased space, Whitfill went to work for Brewington. He, therefore, was in a position to know what transpired during the tenures of both companies. Whitfill testified that SCM employees had parked on the south side of the building and that Brewington's employees continued to do so after the move. He further testified that deliveries to both companies were made to the back door on the south side of the building because the service department was located there and because delivery through the front of the building was difficult due to a narrow hallway and several sharp turns.

Johnny Johnson, Brewington's president, testified that the company utilizes the south lot in its day-to-day business. It is where employees and customers park, deliveries are received and sent and the trash dumpster is located. Were the south lot not available for Brewington's use, business would be adversely affected.

Both Lee Sabel, owner of Sabel's T.V. Service, Inc., which subleased from SCM, and Charles Harvey, owner of Amstar Satellite Systems, Inc., which subleased from Brewington, testified that Brewington's employees generally park in the south lot. Furthermore, the men stated that their employees also had used the south lot when the north...