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Click here for the full text of this decision FACTS:During the second year of a two-year lease, Brendan F. Gowing became delinquent in his rental payments. Each month’s rent included a basic monthly payment of $3,908.58 plus an additional rent equal to a pro rata share of rental escalations. After several telephone calls produced no results, Cole Chemical Distributing Inc. sent a representative to the property to personally deliver an invoice to Gowing and learned for the first time that Gowing had moved out of the space and into a larger space across the hall. Cole delivered the invoice to the new space and then had the locks changed on the old space. The payment dispute continued, and Cole sued Gowing for breach of the rental agreement. Four and a half months after the lockout, Cole and Gowing reached an agreement to mitigate damages that allowed Gowing to reoccupy the leased space for the remainder of the contract term. Cole maintained its suit to recover unpaid rent and late fees in addition to attorneys’ fees in the amount of $27,100. After a bench trial, the trial court found that Gowing breached the rental agreement but awarded only $976.52 in damages after deducting $19,220.88 based on its finding that Cole had failed to make reasonable efforts to re-let the space during the lockout period and therefore failed to mitigate its damages. The trial court also awarded Cole $2,500 in attorneys’ fees. HOLDING:Reversed and remanded in part; affirmed in part. The court holds that there was no evidence to support a finding regarding the amount by which Cole could have reduced its damages had it properly mitigated. The parties do not dispute the general principle that a landlord can waive the right to contractual remedies for late payments by its conduct. Cole correctly notes that “a landlord’s past indulgence in accepting rent a few days late” does not, itself, establish waiver. However, Cole did more than accept a few late payments; it sent an invoice to Gowing purporting to show the total amount due and did not include any late fees. In fact, trial testimony established that Gowing was unaware that Cole was seeking late fees until trial. The trial court’s conclusion that Cole had waived its right to collect late fees was not erroneous, the court concludes. The court rejects Cole’s argument that the trial court was bound by the scope of the expert testimony and holds that the trial court did not abuse its discretion in awarding $2,500 in attorneys’ fees to Cole. Even though the trial court did not abuse its discretion in awarding $2,500 in attorneys’ fees, the court thinks it is appropriate to give the trial court an opportunity to reconsider its calculation of attorneys’ fees in this case. The amount a party recovers is one factor to consider in assessing reasonable attorneys’ fees. The record does not indicate how the total amount of damages recovered factored into the trial court’s attorneys’ fee calculation, but it could have been significant. Because the disposition of Cole’s issue regarding mitigation of damages substantially alters the amount of Cole’s recovery, the court reverses the trial court’s award of attorneys’ fees and remands for reconsideration of attorneys’ fees. Texas Property Code 93.002(h) provides that “[a] lease supersedes this section to the extent of any conflict.” Cole admits that it did not post this notice. It contends that the need for such notice was negated by the relevant lease provision, which states that the landlord of a defaulting tenant “may immediately terminate Tenant’s right of possession of the Premises, . . . and without notice or demand . . . , change the locks.” The trial court agreed with Cole. In its issue on cross-appeal, Gowing argues that this was error because the lease provision addresses only notice before a lockout whereas the Property Code provision mandates a notice after a lockout. Cole reads the lease provision more broadly, asserting that “without notice or demand” covers any pre- or post-lockout notice. The court does not resolve this issue because the court finds that Gowing’s actual notice negates the need for any statutory notice. OPINION:Yates, J.; Yates, Edelman and Guzman, JJ.

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