Solar Soccer Club v. Prince of Peace Lutheran Church of Carrollton

Click here for the full text of this decision FACTS:In 1999, Solar Soccer Club and Prince of Peace Lutheran Church of Carrollton entered into a lease agreement. Solar agreed to build soccer fields on Prince of Peace’s undeveloped property. The parties agreed Solar would use the fields primarily on evenings and weekends, while Prince of Peace would use the fields during the school day for the students in its school. Because the construction of the fields was at Solar’s expense, and the completed fields would belong to Prince of Peace, there were no periodic rental payments in the lease. The initial term of the lease was for 10 years, after which Solar had the option to extend the lease for three five-year periods. Before the fields were completed, neighbors of the church expressed concern about the lights to be installed for the fields. These concerns culminated in a suit, the Hodgson case, brought against Prince of Peace and Solar. The Hodgson suit was settled out of court, and the final judgment dismissing it provided “all claims, counterclaims, cross-claims and third-party claims which have been or could have been asserted in the above-entitled and numbered . . . litigation by the parties against one another are dismissed with prejudice to refiling.” Prince of Peace then filed suit seeking to terminate the lease. Solar moved for summary judgment, alleging the agreed order of dismissal precluded all of Prince of Peace’s claims. The trial judge granted this motion in part, holding the Hodgson order of dismissal was “not ambiguous and that all claims and any matters dismissed with prejudice by such Order of Dismissal with Prejudice dated May 20, 2003[,] are barred from this suit as a matter of law.” In its suit, Prince of Peace alleged breaches of four contractual provisions: the insurance provision, the field-maintenance provision, the utilities clause and the use clause. The trial judge granted partial summary judgment in favor of Prince of Peace, ruling Solar breached the insurance provision and the field-maintenance provision of the lease as a matter of law. The jury found Solar breached the utilities clause and the use clause. The jury also found, however, that Prince of Peace suffered no damages as a result of Solar’s breaches of the insurance and the use clauses. The jury awarded Prince of Peace $25,000 for the breach of the field maintenance provision and $31,000 for the breach of the utilities clause. The jury also awarded attorneys’ fees to Prince of Peace in the amount of $130,000 for trial, $20,000 for appeal to the court of appeals and $15,000 for appeal to the Texas Supreme Court. Over objection by Prince of Peace, the jury charge included questions relating to Solar’s claim for recovery of damages in quantum meruit for its construction of the fields. The jury found that Solar performed compensable work with a value of $342,568.33. The trial judge offset the damages awarded to each party by the jury and entered judgment that Solar recover $154,934.33 from Prince of Peace. The judgment also terminated the lease. After post-judgment hearings, the trial judge set the amount of supersedeas bonds to be posted by each party in prosecuting their appeals of the judgment. As a result of these post-judgment hearings and orders, Solar continued to use the lighted fields. Each party appealed. Solar asserted seven multipart issues. It complained that res judicata barred Prince of Peace’s claims. Solar also contended that the trial judge erred in granting summary judgment for Prince of Peace on its breach of contract claims and on Solar’s affirmative defenses, granting judgment terminating the ground lease and awarding Prince of Peace damages and attorneys’ fees. Solar further complained that insufficient evidence supported some of the jury’s findings. In six issues, Prince of Peace complained of Solar’s recovery of damages in quantum meruit and of the trial judge’s rulings regarding enforcement of the judgment pending appeal. HOLDING:Affirmed in part, reversed and remanded in part, reversed and rendered in part. The essence of Solar’s first point of error, the court stated, was that res judicata applied to bar all of Prince of Peace’s claims. Solar argued that the language of the Hodgson order of dismissal, “that all claims, counterclaims, cross-claims, and third-party claims which have been or could have been asserted in the above-entitled and numbered and [sic] litigation by the parties against one another are dismissed with prejudice to refiling,” barred Prince of Peace’s claims nonetheless. Solar argued that all of Prince of Peace’s claims could have been asserted in the Hodgson suit. Texas Rules of Civil Procedure Rule 97(e) provides that “[a] pleading may state as a cross-claim any claim by one party against a co-party arising out of the transaction or occurrence that is the subject matter either of the original action or of a counterclaim therein.” Solar contended that even though the cross-claim rule is permissive, the language of the dismissal order required Prince of Peace to assert all cross-claims arising out of the transaction or occurrence that was the subject matter of the Hodgson litigation. The court did not agree that all of Prince of Peace’s claims could have been asserted in the Hodgson suit. The Hodgson plaintiffs’ claims did not arise out of the lease between Prince of Peace and Solar and apparently did not contain allegations relating to insurance, utilities or maintenance of the fields. Second, Solar argued that the trial judge erred in terminating the lease and awarding Prince of Peace immediate possession of the premises. The court found that the lease’s termination clause was unambiguous: the parties agreed termination of the lease was a remedy available to Prince of Peace for a breach by Solar. Therefore, if the evidence supported findings of uncured defaults by Solar, the trial judge correctly granted Prince of Peace’s request to terminate the lease. The court found sufficient evidence from which the jury could have concluded Solar breached the use clause of the contract. The court also found that the trial court did not err in granting summary judgment in favor of Prince of Peace on the issue of whether limitations barred the church’s claim for breach of the use clause. The court also found no error in the trial court’s grant of summary judgment in favor of Prince of Peace on its claim that Solar breached the lease’s insurance provisions. Third, Solar contended that the trial judge erred in granting Prince of Peace summary judgment on Solar’s affirmative defense of the statute of limitations regarding the field maintenance claim, because the work leading to the drainage problems was complete by Dec. 1, 1999. The court disagreed. While Solar alleged all improvements affecting grade and drainage were completed by Dec. 1, 1999, the court stated that Solar offered no further summary judgment evidence of facts relevant to when this claim arose. Fourth, Solar contended that the trial judge erred in granting Prince of Peace summary judgment on its claim that Solar breached the field maintenance provision. The court found the testimony did not establish that Solar violated the field maintenance provision as a matter of law. Thus, the court concluded that summary judgment should not have been granted on the issue. The court remanded that issue and the issue of resulting damages to the trial court for further proceedings. The court considered Solar’s complaint that the lease should not have been terminated. Noting that it upheld the trial court in finding that Solar breached three provisions of the lease, the court stated that in light of those defaults, the lease allowed Prince of Peace to “declare this Lease in its sole and absolute discretion, and all rights, titles, and interests created by it, to be terminated.” Thus, in accordance with the parties’ express agreement, the trial judge did not err in entering a judgment declaring that the lease was terminated and granting Prince of Peace immediate and exclusive possession of the leased premises. Mindful of the Texas Supreme Court’s recent pronouncements on the necessity of remand to determine attorneys’ fees when the jury considered an erroneous amount of damages in making its attorneys’ fees finding, the court reversed the portion of the judgment awarding Prince of Peace its attorneys’ fees and remanded the issue to the trial court for further proceedings. OPINION:Whittington, J.; Whittington, Francis and Lang, JJ.