Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:Dollar Rent A Car operates a car rental agency and a three-story parking garage near Hobby Airport on premises formerly leased from Parking Company of America (PCA). The 15-year lease provides that the lessor keep the foundation, walls and roof in good repair and make repairs in a reasonable amount of time following written notice from the lessee. The lease also provides that the lessee would make other types of repairs and keep the premises clean. PCA paid for temporary repairs to the expansion joints in the building in 1998 and 2000. The 1998 repairs were considered temporary because not all design information was properly documented at that time. In December 2000, Dollar negotiated with PCA to buy the garage for $5.55 million. Dollar retained an engineering firm to survey the garage and state its opinion on the garage’s current overall structural condition. On Dec. 26, 2000, the firm produced a report stating that the expansion joints needed repair within a year. Dollar sent the report to PCA and to Scott Word, PCA’s real estate broker. For reasons unrelated to the garage’s structural condition, Dollar later notified PCA on Jan. 25, 2001, that it would not proceed with the sale. 7979 Airport Garage LLC (7979) subsequently negotiated with PCA to purchase the garage. The negotiations were conducted through Scott Word, who acted as the real estate agent for both PCA and 7979. Word sent 7979 the report and an estimate commissioned by Dollar. Word had added hand-written notations to the estimate. Armand Laskey, 7979′s principal, testified that he construed Word’s notes to mean that the work on the expansion joints had already been performed. Additionally, he testified that Word assured him the work had been done. On Aug. 15, 2001, 7979 purchased the garage for $5.35 million. On Feb. 28, 2002, Dollar wrote to 7979, stating: “The prior owner of this property . . . was put on notice in December 2000 that there was a structural problem at this property. We provided a proposal to repair the [expansion] joints at the property to the prior owner in January 2001 . . . [W]e are putting you on notice that we expect the landlord/owner to pay for the repair.” Dollar hired a firm to sue 7979 for breach of contract and breach of warranty, and to obtain a declaratory judgment. Six months after Dollar filed suit, contractors hired by 7979 began work on the expansion joints. The final project as ultimately bid and performed at 7979′s expense included barricades, signs, traffic barriers, temporary support of work, and the protection of existing construction during cutting and patching to prevent damage. The work was finished in March of 2003 at a cost of $165,863.41. 7979 paid for the repairs, but refused to reimburse Dollar for monies Dollar expended on a May 2002 inspection and the installation of barricades and safety netting. In October 2004, the case was tried to a jury, and judgment was rendered in favor of Dollar for actual damages of $16,037.20 plus prejudgment and postjudgment interest. In addition, Dollar was awarded attorneys’ fees of $340,000, and conditional attorneys’ fees of up to $90,000, depending on the number of appeals. The trial court denied 7979′s motion for judgment notwithstanding the verdict and its motion for new trial. 7979 appealed. 7979 contended the evidence was legally and factually insufficient to support the jury’s verdict in Dollar’s favor on the issues of breach of contract, breach of the implied warranty of suitability and damages. 7979 argued alternatively that Dollar or the prior owner of the parking garage was responsible for the costs of repairs and that Dollar was estopped from asserting its claims against 7979. Finally, 7979 contended the trial court erred in awarding unsegregated attorneys’ fees to Dollar, and that the fees were excessive. HOLDING:Affirmed. The court disagreed that a reasonable person would interpret the language of the lease in the manner urged by 7979. The only reasonable interpretation of the relevant language is that the landlord must make structural repairs to the garage, and must repair the foundation, exterior walls and roof, even if the damage to these areas is not physical or structural (for example, if the damage is merely cosmetic). “Because the interpretation urged by 7979 is unreasonable and inconsistent with the overall allocation of risks and responsibilities demonstrated throughout the remainder of the Lease,” the court concluded the lease unambiguously allocates the costs of the repairs at issue to the landlord. The court also concluded that Dollar was not required to segregate attorneys’ fees incurred in prosecuting its breach of contract claim from the related claims and counterclaims. The court also concluded that the attorneys’ fees awarded to Dollar were not excessive. OPINION:Guzman, J.; Hedges, C.J., and Yates and Guzman, J.J.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.