Centerpoint Apartments v. Jeffrey L. Webb ( 2008 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-07-278-CV
CENTERPOINT APARTMENTS APPELLANT
V.
JEFFREY L. WEBB APPELLEE
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FROM COUNTY COURT AT LAW NO. 2 OF DENTON COUNTY
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MEMORANDUM OPINION 1
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I. Introduction
To paraphrase the Bard, “To be [a lease renewal], or not to be [a lease
renewal]. That is the question.” 2 In one issue, Appellant Centerpoint
Apartments (Centerpoint) appeals the trial court’s take nothing judgment in
1
… See T EX. R. A PP. P. 47.4.
2
… W ILLIAM S HAKESPEARE, H AMLET act 3, sc. 1.
favor of Appellee Jeffrey L. Webb. At risk are damages of $1,186.67, plus
attorney’s fees of several times that amount. We affirm.
II. Factual and Procedural History
On April 29, 2004, Dale Arms executed a Texas Apartment Association
(TAA) Member form agreement with Centerpoint entitled “Apartment Lease
Contract” (Lease 1). Lease 1’s term began on May 1, 2004, ended November
30, 2004, required thirty days’ written notice of termination or intent to move
out to prevent automatic month-to-month renewal, and provided for $545
monthly rent and prorated rent of $425 for the first month, among other
provisions. On May 1, 2004, Dale Arms’s older brother, Webb, entered a lease
guaranty contract (Guaranty Contract) with Centerpoint, the terms of which are
at issue here.
On September 29, 2004, Centerpoint entered into a second TAA form
agreement with Arms, also entitled “Apartment Lease Contract” (Lease 2),
which was set to begin on December 1, 2004, the day after the expiration of
Lease 1, and to end on June 30, 2005. Paragraph 3 of Lease 2 provided that
it would automatically renew month-to-month unless either party gave at least
sixty days’ written notice. It also provided that there was no prorated rent
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amount, but it included an “Addendum for Rental Concessions,” (Addendum)
dated September 29, 2004.3
Arms fulfilled his contractual obligations under Lease 1; however, he
breached Lease 2. Centerpoint filed suit in the justice court against Webb for
breach of the Guaranty Contract and prevailed. Webb appealed to the county
court.
During the bench trial, the county court heard testimony and argument
and reviewed evidence regarding whether Lease 2 was a new lease contract or
a renewal of Lease 1. The trial court admitted Centerpoint’s exhibits, including
the Guaranty Contract, Lease 2, and the Addendum. It also admitted Webb’s
exhibits, including the TAA form Lease Contract Guaranty and Lease 1.
Kendra Heintzelman, Centerpoint’s assistant property supervisor, testified
that the Guaranty Contract “will guarantee renewals, original contract renewals,
3
… The Addendum provided as follows:
Addendum to lease contract dated 9-24-04 between Dale Arms
and Centerpoint Apartments[.] Rent from 12/1/04 to 6-30-05 will
be $399.00 per month until 6-30-05. The total concession that
you will be receiving is $1,022.00. . . . When this lease term ends,
rent will automatically go to the current street rate. At that time,
please contact the office to find out what the street rate is or if we
are offering any discounts at that time.
The underlined portions here and throughout this opinion represent the lines
that were completed by hand.
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roommate additions, deletions, modifications, apartment number changes.” She
also testified that Centerpoint had modified TAA’s Lease Contract Guaranty
form, which was admitted into evidence to compare to the Guaranty Contract,
particularly the “[v]erbiage regarding renewals, amendments, modifications, unit
number changes.” She testified that Centerpoint did not use a TAA renewal
lease form, that the guarantor’s obligation terminates when the apartment is
vacated, and that the guarantor’s rights were in the lease contract. She
testified that she believed that Lease 2 was a renewal. Webb testified that he
understood the Guaranty Contract to be only for a six month period.
At the trial’s conclusion, the trial court held that Webb was not subject
to liability under the Guaranty Contract, stating,
The document that the apartment commission has chosen to use
is a document entitled Apartment Lease Contract. It does not, in
any way, indicate that it is a renewal. That the apartment complex
chooses to use that as its vehicle for continuation of occupancy by
tenants in this action does not change it into a renewal contract.
It is not labeled as such. . . . And the Court is going to strictly
construe the language of the documents that these parties have
signed. Therefore, I do not find that the Lease Contract Guaranty,
. . . extends to the subsequent document, . . . says date of Lease
Contract, 9/24/04, with the starting date being December 1, 2004.
So the judgment is for the Defendant in this action.
This appeal followed.
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III. Analysis
In its sole issue, Centerpoint argues that the trial court erred by rendering
judgment in favor of Webb, claiming that it established as a matter of law that
Webb breached the Guaranty Contract. Specifically, Centerpoint claims that
the Guaranty Contract’s express terms extended Webb’s liability to include a
breach of a lease renewal or any leases signed by Webb’s brother, that the
lease contract title was not dispositive of an intent to renew or to discontinue
Webb’s guarantor liability, and that Centerpoint established at trial all of the
elements of a breach of guaranty claim.
A. Standard of Review
We review de novo a trial court’s conclusions of law with regard to
contract interpretation. See MCI Telecomm. Corp. v. Tex. Utils. Elec. Co., 995
S.W.2d 647, 650–51(Tex. 1999); Huntley v. Enon Ltd. P’ship, 197 S.W.3d
844, 849 (Tex. App.—Fort Worth 2006, no pet.). We accord no deference to
the lower court’s decision. Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex.
1998).
B. Contract Interpretation
When interpreting a contract, no single provision taken alone will be given
controlling effect; rather, all the provisions must be considered with reference
to the whole instrument. Citizens Nat’l Bank in Abilene v. Tex. & Pac. Ry. Co.,
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136 Tex. 333, 150 S.W.2d 1003, 1006, cert. denied, 314 U.S. 656 (1941).
If an instrument is written so that it can be given a definite legal meaning or
interpretation, the court should construe it as a matter of law. Coker v. Coker,
650 S.W.2d 391, 393 (Tex. 1983); Pham v. Mongiello, 58 S.W.3d 284, 288
(Tex. App.—Austin 2001, pet. denied). To achieve this objective, the court
should 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. Universal C.I.T. Credit Corp. v. Daniel, 150 Tex. 513, 243
S.W.2d 154, 158 (1951).
The fact that the parties to a contract disagree over the interpretation of
the contract does not necessarily render it ambiguous. Pham, 58 S.W.3d at
288. Likewise, uncertainty or a lack of clarity in the language used in the
contract does not automatically render it ambiguous. Id. And an ambiguity
does not arise simply because the parties advance conflicting interpretations;
rather, for an ambiguity to exist, both interpretations must be reasonable.
Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 861 (Tex. 2000);
Sefzik v. Mady Dev., L.P., 231 S.W.3d 456, 460 (Tex. App.—Dallas 2007, no
pet.).
1. Guaranty Contract Terms
The Guaranty Contract provides in pertinent part as follows:
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Lease Contract Information . . .
ABOUT LEASE: Date of Lease Contract . . . 4/29/04 . . .
Monthly rent for dwelling unit $545 . . .
Beginning date of Lease Contract: 5/1/04 . . .
Ending date of Lease Contract: 11/30/04[.]
...
You, as guarantor signing this Lease Contract Guaranty, guarantee
all obligations of resident(s) under the above Lease Contract,
including but not limited to rent, late fees, property damage, repair
costs, animal violation charges, reletting charges, utility payments
and all other sums which may become due under the Lease
Contract. You agree that your obligations as guarantor will
continue and will not be affected by amendments, modifications,
roommate changes or deletions, unit # changes, renewals or any
lease agreements which may be agreed to from time to time
between any of the residents and us (including month to month
renewal in P.#3 of lease.) Guarantor is responsible for any
holdovers, (paragraph #32 of lease.) If guarantor gives notice to
move out, (P.#3 and #37 of lease) and resident renews lease or
signs a new lease, guarantor’s notice will be considered void.
...
Guarantor unconditionally understands that the guarantor form
allows the resident the right to renew his or her lease at any time
he or she desires without approval from guarantor or notification by
apartment management to guarantor of such renewal. Guarantor
is responsible for any renewals signed by resident.
2. Lease Title and Terms
Centerpoint argues that, contrary to the trial court’s interpretation, Lease
2’s title, “Apartment Lease Contract,” was not dispositive of the parties’ intent
to renew Lease 1 or to continue Webb’s liability. However, while title alone
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may not be dispositive, we may consider it in interpreting the parties’
intentions. Cf. Sefzik, 231 S.W.3d at 462 (“Texas courts attach greater weight
to the operative clauses of a contract than the captions or titles.”); see also
Enter. Leasing Co. v. Barrios, 156 S.W.3d 547, 549 (Tex. 2004) (recognizing
that in certain cases, courts may consider the title of a contract provision or
section to interpret a contract, although greater weight should be given to the
contract’s operative clauses).
On its face, Lease 2 does not appear to be a renewal or extension of
Lease 1. Lease 2 is not titled a “renewal” or “extension”; rather, it is titled,
“Apartment Lease Contract,” and purports to set out a new agreement by
stating, “[T]he initial term of the Lease Contract begins on the 1 day of
December, 2004 . . . .” If Centerpoint had intended for Lease 2 to be a
renewal of Lease 1, it could have easily labeled it as such or otherwise
indicated it somewhere on the contract itself. Heintzelman testified that the
majority of Centerpoint’s forms were TAA and that Centerpoint had modified
the TAA Lease Guaranty Contract “to make the Guaranty what they wanted it
to be.” She provided no testimony with regard to why Centerpoint could not
have labeled any subsequent apartment lease contract a “renewal contract” to
fit the language that she testified Centerpoint had added to TAA’s Lease
Guaranty Contract to create the Guaranty Contract.
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Furthermore, the Guaranty Contract specifically references Paragraph 3,
which provides for automatic renewal, in its list of continuing obligations,
stating:
You agree that your obligations as guarantor will continue and will
not be affected by amendments, modifications, roommate changes
or deletions, unit # changes, renewals or any lease agreements
which may be agreed to from time to time between any of the
residents and us (including month to month renewal in P. #3 of
lease.) [Emphasis added.]
Paragraph 3 in Lease 1 sets out the initial term of the lease and provides,
“This Lease Contract will automatically renew month-to-month unless either
party gives at least 30 days written notice of termination or intent to move-out
as required by paragraph 37.” [Emphasis added.] Paragraph 3 in Lease 2
requires sixty days’ written notice to prevent automatic renewal. Both
contracts state under Paragraph 10(5), “Month to month renewal in paragraph
#3 continues indefinitely for cosigners, residents and guarantors until written
notice of intent to vacate is given as required by paragraph #37.” [Emphasis
added.]
Nothing in either lease provides for any sort of renewal other than the
month-to-month renewal referred to in Paragraph 3. Under the plain terms of
either lease, renewal is automatic; therefore, if Arms had not signed Lease 2,
Lease 1 would have automatically renewed and Webb’s liability would have
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continued. Instead, Centerpoint and Arms signed Lease 2, which included a
different termination term to prevent automatic renewal and different monthly
rent in the Addendum. To treat Lease 2 as a renewal would require us to
ignore Paragraph 3, which we may not do. See Forbau v. Aetna Life Ins. Co.,
876 S.W.2d 132, 133 (Tex. 1994) (“[E]ach part of the contract should be
given effect.”). Therefore, we conclude that Lease 2 was a new lease, and not
a renewal.
Centerpoint also contends that the Guaranty Contract language, “any
lease agreements which may be agreed to from time to time,” makes a specific
reference to future transactions and should necessarily extend Webb’s liability
to Lease 2. Webb counters that the “any lease agreements” language in the
Guaranty Contract only refers to Lease 1 because the preceding terms in the
sentence only reference changes to Lease 1, not new leases. The controversial
provision reads as follows:
You agree that your obligations as guarantor will continue and will
not be affected by amendments, modifications, roommate changes
or deletions, unit # changes, renewals or any lease agreements
which may be agreed to from time to time between any of the
residents and us (including month to month renewal in P. #3 of
lease.) Guarantor is responsible for any holdovers, (paragraph #32
of lease.) If guarantor gives notice to move out, (P.#3 and #37 of
lease) and resident renews lease or signs a new lease, guarantor’s
notice will be considered void. [Emphasis added.]
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The Guaranty Contract’s language contemplates that Centerpoint and
Arms might renew, modify, or make changes to Lease 1 during Lease 1’s term
without voiding the Guaranty Contract, demonstrated by the section entitled
“Lease Contract Information,” with its specific beginning and ending dates, as
well as the language stating that the guarantor guarantees all obligations “under
the above Lease Contract,” and the language providing for renewals and other
changes under Lease 1.
However, we have been unable to find language in the Guaranty Contract
that, as a matter of law, would extend Webb’s liability as a guarantor beyond
Lease 1 to new leases between Arms and Centerpoint without Webb giving
“notice to move out.” Under that one circumstance, if the resident then
“renews lease or signs a new lease, guarantor’s notice will be considered void.”
[Emphasis added.]4 Had Centerpoint wanted to expressly include new leases
in the Guaranty Contract under any other circumstance, it could have added the
word “new” to the clause listing every other type of change to Lease 1:
4
… Nothing was produced at trial to show that this exception would
apply.
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amendments, modifications, roommate changes, unit number changes,
renewals, or holdovers.5
Therefore, we disagree with Centerpoint’s contention that the “any lease
agreements” language included or contemplated any future contracts between
Arms and Centerpoint. If we were to follow this reasoning, then Lease 1‘s
ending date, which was included in the Guaranty Contract, would be a term
rendered meaningless. See Forbau, 876 S.W.2d at 133. The words “new
lease” are not used anywhere in the “any lease agreements” sentence and the
preceding items in that sentence all refer to changes to Lease 1. Additionally,
the Guaranty Contract makes multiple references to the “Lease Contract” that
is being guaranteed, with a capital L and a capital C; Lease 1 is titled
“Apartment Lease Contract,” as is Lease 2. However, the sections in the
Guaranty Contract that clarify obligations under Lease 1, including the “any
lease agreements” section, refer to the lease with a lower case “l”—a clear
distinction between the specific “Lease Contract” and any general agreements
that might take place under that Lease Contract. See id. at 133–34 (reciting
the general contract construction rule that the more specific provision will
govern the general).
5
… Lease 1 and Lease 2 both provide for extension of the lease contract
term for holdovers, under Paragraph 32.
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We interpret the “any lease agreements” language to simply extend
Webb’s liability to any lease changes along the lines of amendments or
modifications that might occur “from time to time” under Lease 1. Cf. Blount
v. Westinghouse Credit Corp., 432 S.W.2d 549, 552–53 (Tex. Civ.
App.—Dallas 1968, no writ) (stating that language regarding “agreements
. . . in force or hereafter made” clearly comprehended guarantor’s intent to
guarantee obligor’s present and future indebtedness in obligor’s usual course
of business (emphasis added)). Accordingly, we hold that Webb was not liable,
as a matter of law, as guarantor under Lease 2. We overrule Centerpoint’s sole
issue.6
IV. Conclusion
Having overruled Centerpoint’s sole issue, we affirm the trial court’s
judgment.
PER CURIAM
PANEL: MCCOY, HOLMAN, and GARDNER, JJ.
DELIVERED: August 28, 2008
6
… Because this is dispositive of Centerpoint’s breach of guaranty claim,
we need not address that portion of Centerpoint’s sole issue. See T EX. R. A PP.
P. 47.1.
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