Steven Kelley Richardson, Michelle Richardson and Richard Day v. SV Almeda I Limited Partnership ( 2013 )

Opinion issued August 29, 2013
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-11-01004-CV
———————————
STEVEN KELLEY RICHARDSON, MICHELLE RICHARDSON,
AND RICHARD DAY, Appellants
V.
SV ALMEDA I LIMITED PARTNERSHIP, Appellee
On Appeal from the 270th District Court
Harris County, Texas
Trial Court Case No. 2010-55843
MEMORANDUM OPINION
Appellants Steven Kelly Richardson, Michelle Richardson, and Richard Day
sued appellee SV Almeda I Limited Partnership, asserting various causes of action
related to their alleged constructive eviction from an apartment. Almeda
counterclaimed for accelerated rent, repayment of rental concessions, and
attorney’s fees. The trial court granted summary judgment in Almeda’s favor,
ruling that the appellants take nothing by their claims and awarding Almeda
damages and attorney’s fees. On appeal, the appellants bring eight issues
contesting the trial court’s take-nothing summary judgment on each of their causes
of action and the trial court’s summary judgment for Almeda on its counterclaim.
We reverse the trial court’s judgment in part as to the award of attorney’s fees. We
affirm the judgment of the trial court in all other respects.
Background
Steven and Michelle Richardson visited the Equinox Apartments to inquire
about renting an apartment. The apartment complex is owned by Almeda, and it is
located near the medical center in Houston, Texas. The Richardsons met the
apartment manager, Susan Franz. During this conversation, they told her that their
occupations—emergency helicopter pilot and emergency room nurse—required
that they work irregular hours. They therefore required an apartment that would be
quiet enough to allow them to sleep night or day, and they asked if the apartments
were noisy. Michelle said that Franz “reassured me countless times that it was a
quiet place.” Michelle never put her concerns about noise in writing; Franz never
put her representations that the apartment was quiet in writing, either. According
2
to the Richardsons, Franz recommended apartment 175, a ground-floor apartment
near a meditation fountain, which she told them would be a quiet area.
Michelle also had concerns about the security of the apartment complex, and
she conceded that she knew it was not a crime-free area before she signed the
lease. However, she said that Franz assured her about the safety of the apartment
complex saying that “there wasn’t crime,” that “it was a secure property,” and
because “it was a gated community . . . the only people that could come in and out
were with the remote gates . . . .”
The Richardsons also told Franz that Michelle’s father, Richard Day, would
be living with them, and that he was a disabled Vietnam veteran. They requested a
ground-floor apartment, telling Franz that Day’s back and knee problems required
such access as well as an accessible parking spot. Although Day testified that he
had no input into the choice of the apartment, he testified that the apartment
manager represented that the apartment was “very quiet, very peaceful” and
suitable for his needs. Day also told Franz that he would need an accessible
parking spot, and he testified that he had no complaints about the availability of
suitable parking. Nobody informed Franz or any other representative of Almeda
that Day suffered from post-traumatic stress disorder. None of the appellants ever
made a written request for accommodations for Day’s disabilities.
3
The Richardsons and Day all signed the lease agreement. The term of the
lease was from February 9, 2009 to March 29, 2010, and thereafter it would
automatically continue month-to-month unless either party gave written notice 60
days before termination. The lease included several provisions that would entitle a
tenant to terminate without penalty, including (1) delay of occupancy caused by
construction, repairs, cleaning or a prior resident’s holding over, (2) provisions
applicable to military personnel, (3) breach of certain responsibilities owed by
Almeda and in accordance with Section 92.056 of the Texas Property Code, and
(4) moving out after giving proper notice at the expiration of a lease term.
However, the lease also provided that if those termination provisions did not apply,
“you won’t be released from this Lease Contract for any reason . . . . You will still
be liable for the entire Lease Contract term if you move out early.”
Under the lease, failure to pay rent, violation of the lease or any apartment
rules, and abandonment of the apartment are among the actions that would
constitute default by the resident. The lease provided that “[a]ll monthly rent for
the rest of the Lease Contract term” would be “accelerated automatically” and
immediately due if the tenant moved out without consent and without paying all
rent for the entire lease term. The lease specifically stated that Almeda “may
report unpaid amounts to credit agencies,” and it reserved the right to exercise “all
other legal remedies” in the event of a tenant’s default.
4
The lease included several other provisions that are relevant to the parties’
eventual dispute. With respect to the tenants’ conduct while living in the
apartment, it provided:
18. COMMUNITY POLICIES OR RULES. You and all guests
and occupants must comply with any written apartment rules and
community policies, including instructions for care of our property.
Our rules are considered part of this Lease Contract. . . .
19. LIMITATIONS ON CONDUCT. . . . We may exclude from the
apartment community guests or others who, in our judgment, have
been violating the law, violating this Lease Contract or any apartment
rules, or disturbing other residents, neighbors, visitors, or owner
representatives. . . .
20. PROHIBITED CONDUCT. You and your occupants or guests
may not engage in the following activities: criminal conduct;
behaving in a loud or obnoxious manner; disturbing or threatening the
rights, comfort, health, safety, or convenience of others (including our
agents and employees) in or near the apartment community . . . .
Two separate sections of the lease included provisions addressing safety and
security. The following provisions appeared in the section of the lease entitled
“While You’re Living in the Apartment”:
24. RESIDENT SAFETY AND LOSS. You and all occupants and
guests must exercise due care for your own and others’ safety and
security, especially in the use of smoke alarms and other detection
devices, door and window locks, and other safety or security
devices. . . .
....
Loss. We’re not liable to any resident, guest, or occupant for personal
injury or damage, loss of personal property, or business or personal
income from any cause, including, but not limited to . . . theft,
5
negligent or intentional acts of residents, occupants or guests, or
vandalism unless otherwise required by law. . . .
....
Crime or Emergency. Dial 911 or immediately call local medical
emergency, fire, or police personnel in case of accident, fire, smoke,
suspected criminal activity, or other emergency involving imminent
harm. You should then contact our representative. You won’t treat
any of our security measures as an express or implied warranty of
security, or as a guarantee against crime or of reduced risk of crime.
Unless otherwise provided by law, we’re not liable to you or any
guests or occupants for injury, damage, or loss to person or property
caused by criminal conduct of other persons, including theft, burglary,
assault, vandalism, or other crimes. . . .
The section of the lease entitled “Security Guidelines for Residents” included the
following provision:
36. SECURITY GUIDELINES. We care about your safety and that
of other occupants and guests. No security system is failsafe. Even
the best system can’t prevent crime. Always act as if security systems
don’t exist since they are subject to malfunction, tampering, and
human error. We disclaim any express or implied warranties of
security. The best safety measures are the ones you perform as a
matter of common sense and habit.
(Emphasis in original.) Paragraph 36 also urged adherence to 20 specific crime-
prevention tips listed in the lease agreement.
In addition, the lease included a merger clause, disclaiming any oral
promises or representations by the apartment’s representatives:
33. MISCELLANEOUS. Neither we nor any of our representatives
have made any oral promises, representations, or agreements. This
Lease Contract is the entire agreement between you and us. Our
representatives (including management personnel, employees, and
6
agents) have no authority to waive, amend, or terminate this Lease
Contract or any part of it, unless in writing, and no authority to make
promises, representations, or agreements that impose security duties
or other obligations on us or our representatives unless in writing. . . .
Written notice to or from our managers constitutes notice to or from
us. Any person giving a notice under this Lease Contract should
retain a copy of the memo, letter, or fax that was given, as well as any
fax transmittal verification. Fax or electronic signatures are binding.
All notices must be signed. Notices may not be given by email or
other electronic transmission.
(Emphasis in original.)
Initially, Michelle loved the apartment. She said:
When we moved in, when we first went—I’m not gonna lie, I fell in
love with the apartments. They are beautiful. I was very happy to
move there, very happy with everything about the apartments. . . .
[W]hen we first moved in, it was quiet, before the neighbors moved
in. It was nice, wonderful.
But then, noisy neighbors moved into apartment 174, which was next door to the
appellants’ apartment. According to the Richardsons, the residents of apartment
174 played loud music and hosted parties until the early morning hours. Michelle
also complained about the noise of sexual activity occurring in the neighboring
apartment, which she described as “constant.”
Neither of the Richardsons ever spoke to the neighbors about the noise or
left any notes. They did not know if other residents complained of the noise in
their vicinity. Day said he spoke to the neighbor about the noise once in passing,
and his neighbor agreed to keep the volume of music lower. But, according to
Day, the neighbor failed to do so.
7
The Richardsons contacted apartment management numerous times
regarding their noisy neighbors. They made telephone calls and twice sent letters
with their rent checks reiterating that they needed a quiet place to sleep because
their jobs required them to be alert. They requested help in resolving the issue.
Franz initially asked them not to call the police and to allow management to
address the noise problem. However, they nevertheless called the police several
times about the noisy neighbors. Steven testified in his deposition that he got high
blood pressure as a result of noise in the apartment.
In addition to the noise, the appellants were also troubled by security issues.
Steven’s motorcycle was stolen from the apartment complex, and the appellants
sometimes noticed people they described as vagrants sleeping in the hallway.
To address the appellants’ complaints about the noise, Almeda offered them
a different apartment, which was on a higher floor and farther from the elevators.
None of the appellants informed any Almeda representative that Day’s disability
made this offer unacceptable, nor did they request any other accommodation.
Rather, the Richardsons were concerned about the expense of moving to another
apartment, which Almeda did not offer to reimburse. Day testified that he felt that
Almeda was discriminating against him by suggesting that the appellants move to
another apartment instead of requiring that the neighbors move. Day said, “[H]e
was the problem, why not ask him to move . . . .”
8
In September 2009, the appellants vacated their apartment. They did not
provide written notice in accordance with the lease provisions, but they paid rent in
a prorated amount to cover the days they occupied the apartment during that
month.
Almeda secured a new tenant for apartment 175 and sought to collect
accelerated rent and reimbursement for rental concessions that it believed the
appellants owed under the terms of the lease, less the amount it received from the
new tenant in mitigation of its damages. Almeda engaged National Credit Audit
Corporation (NCAC) to collect the debt. Michelle testified that she sent NCAC a
letter disputing the debt. In the letter, Michelle stated, “I am a disabled person,”
and she argued that Almeda had violated the Fair Housing Act by “tell[ing] us we
had to move to the third floor.” Approximately a month later, NCAC sent
Michelle a second letter stating that because she had not responded, “we are now
legally entitled to assume that you acknowledge the debt but are refusing to pay
voluntarily.”
Approximately seven months later, the Richardsons and Day sued NCAC
and Almeda. They alleged the following causes of action against Almeda:
(1) violation of the Deceptive Trade Practices Act by (i) engaging in an
unconscionable action or course of action, (ii) making misrepresentations or failing
to disclose information in violation of Section 17.46(b) of the Texas Business &
9
Commerce Code, and (iii) violating the Texas Debt Collection Act; (2) breach of
contract; (3) constructive eviction; (4) violation of the Texas Fair Housing Act; and
(5) violation of the Federal Fair Housing Act.
They also alleged that NCAC violated the Texas Debt Collection Practices
Act and the National Fair Debt Collection Practices Act while acting on behalf of
Almeda. While the appellants later settled with NCAC, they alleged that Almeda
was liable for NCAC’s actions under an agency theory. They sought actual
damages (including out-of-pocket expenses, loss of use, loss of benefit of the
bargain, and costs of medical and psychiatric care), mental anguish damages,
exemplary damages, and attorney’s fees. Almeda counterclaimed to recover the
unpaid accelerated rent, reimbursement for rental concessions, and attorney’s fees.
Almeda moved for summary judgment on its counterclaim and on each of
the appellants’ causes of action, challenging one or more elements of each cause of
action on traditional or no-evidence grounds. The trial court granted Almeda’s
traditional and no-evidence motion for summary judgment without specifying the
grounds upon which it based its ruling. The court awarded Almeda damages as
well as $8,000 in attorney’s fees incurred in defending the appellants’ claims and
$4,000 in attorney’s fees for prosecuting its breach-of-contract counterclaim. It
also awarded contingent appellate attorney’s fees in a maximum aggregate amount
of $40,000. Finally, the court dismissed with prejudice each of the appellants’
10
causes of action against Almeda including the causes of action for violation of the
Texas Debt Collection Act and the Federal Fair Debt Collection Practices Act.
The Richardsons and Day appealed.
Analysis
We review de novo the trial court’s ruling on a motion for summary
judgment. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d
844, 848 (Tex. 2009). The party moving for traditional summary judgment bears
the burden of showing that no genuine issue of material fact exists and that it is
entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); see also Provident
Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215–16 (Tex. 2003). A
defendant moving for summary judgment must conclusively negate at least one
essential element of each of the plaintiff’s causes of action or conclusively
establish each element of an affirmative defense. Sci. Spectrum, Inc. v. Martinez,
941 S.W.2d 910, 911 (Tex. 1997).
A no-evidence summary judgment is essentially a directed verdict granted
before trial, to which we apply a legal-sufficiency standard of review. Mack
Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581–82 (Tex. 2006). Under the no-
evidence summary-judgment rule, the movant may move for summary judgment if,
after adequate time for discovery, there is no evidence of one or more essential
elements of a claim or defense on which the nonmovant would have the burden of
11
proof at trial. TEX. R. CIV. P. 166a(i). The motion must state the elements as to
which there is no evidence. Id. The reviewing court must grant the motion unless
the nonmovant produces summary-judgment evidence raising a genuine issue of
material fact. Id.; Mack Trucks, 206 S.W.3d at 582. A genuine issue of material
fact exists if the nonmovant produces evidence that would enable reasonable and
fair-minded jurors to differ in their conclusions. Hamilton v. Wilson, 249 S.W.3d
425, 426 (Tex. 2008) (citing City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex.
2005)).
I. Fair Housing Act claims
In their fourth issue, the appellants allege that the trial court erred by
granting summary judgment on Day’s claims for violation of the Federal and
Texas Fair Housing Acts. In the first amended petition, Day alleged that Almeda
violated both fair housing acts by failing to make reasonable accommodations
regarding rules, policies, practices, or services when such accommodation was
necessary to afford him an equal opportunity to enjoy the premises.
Under the Federal Fair Housing Act, it is unlawful to discriminate against a
person “in the terms, conditions, or privileges of . . . rental of a dwelling . . .
because of a handicap of . . . that person or . . . a person residing . . . in the
dwelling after it is . . . rented . . . .” 42 U.S.C. § 3604(f)(2). “[D]iscrimination
includes . . . a refusal to make reasonable accommodations in rules, policies,
12
practices, or services, when such accommodations may be necessary to afford such
person equal opportunity to use and enjoy a dwelling.” Id. § 3604(f)(3)(B). One
purpose of the Texas Fair Housing Act is to “provide rights and remedies
substantially equivalent to those granted under federal law.” TEX. PROP. CODE
ANN. § 301.002 (West 2013). Under the Texas Fair Housing Act, it is unlawful for
a person to discriminate against another “in the terms, conditions, or privileges of .
. . rental of a dwelling . . . because of a disability of . . . the other person [or] a
person residing in or intending to reside in that dwelling after it is . . . rented . . . .”
TEX. PROP. CODE ANN. § 301.025(b) (West 2007). “[D]iscrimination includes . . .
a refusal to make a reasonable accommodation in rules, policies, practices, or
services if the accommodation may be necessary to afford the person equal
opportunity to use and enjoy a dwelling . . . .” Id. § 301.025(c)(2). Implicit in the
concept of “refusal” is the notion that the plaintiff must make a request for an
accommodation. Cf. Groome Res. Ltd., L.L.C. v. Parish of Jefferson, 234 F.3d
192, 198 (5th Cir. 2000); see also 42 U.S.C. § 12112(b)(5)(A) (defining
discrimination under the Americans with Disabilities Act to include “not making
reasonable accommodations”); Taylor v. Principal Fin. Grp., Inc., 93 F.3d 155,
165 (5th Cir. 1996) (holding that absent a request from an employee for a
reasonable accommodation, the employer cannot be held liable for failing to
provide one).
13
Thus, under both statutes, to prevail on a cause of action for violation of the
“reasonable accommodation” provision, the plaintiff must show that he requested a
reasonable accommodation and the defendant refused to make it. Cf. Groome Res.,
234 F.3d at 198; Taylor, 93 F.3d at 165.
Almeda moved for summary judgment on the ground that there is no
evidence that it failed to make a reasonable accommodation that was necessary to
afford Day an equal opportunity to enjoy the premises. In response, Day argued
that the apartment complex knew that he was disabled due to his arthritic knees,
that he requested an accommodation in the form of an accessible parking spot, and
that he was deprived of the use of his apartment and the serenity pool area because
of noise. On appeal Day argues that there is a material issue of fact as to whether
Almeda’s failure to make and enforce rules for use of the serenity pool area and its
“moving [Day] to a much further walk on his arthritic knees” constituted a failure
to make a reasonable accommodation in violation of the state and federal fair
housing acts.
As summary-judgment proof, Day provided his affidavit and those of the
Richardsons, which stated that prior to signing the lease, they informed Franz that:
(1) Day is a disabled veteran, (2) he has arthritic knees, (3) he could not walk far
from his car to the door, (4) he would require an accessible parking space, (5) he
needed a ground-floor apartment, and (6) due to his disability, he required quiet.
14
Steven’s deposition testimony also showed that he had informed Franz and another
representative of the apartment complex that Day had a bad back. Steven said they
chose a ground-floor apartment because it would be easier for Day to get around.
However, in Michelle’s deposition, she specifically testified that she did not
inform the apartment representatives that her father suffered from PTSD. Neither
Day’s deposition excerpt nor Almeda’s interrogatory answers provide any
additional information about Day’s disability or his fair housing claims. There is
no evidence pertaining to making or enforcing rules for use of the serenity pool,
nor is there evidence that Almeda moved Day to a “much further walk on his
arthritic knees.”
The evidence shows that in response to the appellants’ initial request for a
ground-floor apartment, they were given a ground-floor apartment. It also shows
that Day had an opportunity to use the accessible parking spots and that neither
Day nor the Richardsons ever made any other request for an accommodation for
Day. Rather, in response to Almeda’s offer to allow the appellants to move to
another apartment, the appellants abandoned the lease without requesting an
accommodation.
Almeda’s no-evidence motion for summary judgment attacked the element
of failure to make a reasonable accommodation. In light of the conclusive proof
that there was no request for an accommodation and the complete absence of
15
evidence that the apartment complex refused to make a requested reasonable
accommodation, we hold that the trial court did not err in granting summary
judgment on Day’s state and federal fair housing causes of action. Cf. Groome
Res., 234 F.3d at 198; see also 42 U.S.C. § 12112(b)(5)(A); Taylor, 93 F.3d at 165.
II. Constructive eviction
In their fifth issue, the appellants allege that the trial court erred by granting
summary judgment on their constructive eviction claim. In their first amended
petition, the appellants alleged that their lease included an implied covenant of
quiet enjoyment, which Almeda breached. The petition does not allege any facts
showing how Almeda constructively evicted the appellants. “A constructive
eviction occurs when the tenant leaves the leased premises due to conduct by the
landlord which materially interferes with the tenant’s beneficial use of the
premises.” Fidelity Mut. Life Ins. Co. v. Robert P. Kaminsky, M.D., P.A., 768
S.W.2d 818, 819 (Tex. App.—Houston [14th Dist.] 1989, no writ). “Texas law
relieves the tenant of contractual liability for any remaining rentals due under the
lease if he can establish a constructive eviction by the landlord.” Id. “Constructive
eviction essentially terminates mutuality of obligation as to the lease terms,
because the fundamental reason for the lease’s existence has been destroyed by the
landlord’s conduct.” Downtown Realty, Inc. v. 509 Tremont Bldg., Inc., 748
S.W.2d 309, 313 (Tex. App.—Houston [14th Dist.] 1988, no writ). The elements
16
of a cause of action for constructive eviction are (1) an intention on the part of the
landlord that the tenant shall no longer enjoy the premises, (2) a material act by the
landlord that substantially interferes with the tenant’s intended use and enjoyment
of the premises, (3) an act that permanently deprives the tenant of the use and
enjoyment of the premises, and (4) abandonment of the premises by the tenant
within a reasonable time after the commission of the act. Lazell v. Stone, 123
S.W.3d 6, 11–12 (Tex. App.—Houston [1st Dist.] 2003, pet. denied).
The landlord’s intent may be inferred from the circumstances. Id. at 12. For
example, in Lazell, this court held that changing the locks and informing a
commercial tenant that she is not welcome on the property when rent was only a
few days late and no notice of default had been given was evidence of the
landlord’s intent to constructively evict the tenant. See id. at 8, 12.
In Columbia/HCA v. Tea Cake French Bakery & Tea Room, 8 S.W.3d 18
(Tex. App.—Houston [14th Dist.] 1999, pet. denied), HCA purchased land and a
shopping center in a location where it intended to build a hospital. 8 S.W.3d at 19.
HCA negotiated early termination of all the shopping center tenants’ leases, except
for that of Tea Cake. Id. HCA began construction of the hospital before the
expiration of Tea Cake’s lease but without demolishing the shopping center. Id.
On appeal from a directed verdict on Tea Cake’s constructive eviction claim, the
court of appeals held that there was a question of fact because (1) the landlord paid
17
tenants to leave the premises, (2) the shopping center was nearly vacant, and
(3) the near vacancy of the shopping center destroyed a significant portion of Tea
Cake’s walk-in business. Id. at 22.
However, in Quitta v. Fossati, 808 S.W.2d 636 (Tex. App.—Corpus Christi
1991, writ denied), the court of appeals held that the landlord’s threat to “get the
sheriff” to evict the tenants was not evidence of constructive eviction. 808 S.W.2d
at 643. The court explained that there must be evidence of “some additional
feature, such as harassing incidents disturbing to the tenant’s peaceful possession
and occurring on the property.” Id.
Among other grounds, Almeda moved for summary judgment on this cause
of action because there was no evidence of intent. In response, the appellants
submitted their own affidavits and Steven’s deposition testimony. The affidavits
show that all three appellants were troubled by the noise and that complaints to the
apartment complex sometimes resulted in a temporary cessation of noise but
sometimes brought no relief. In addition, the affidavits and deposition testimony
showed that rather than requiring the neighbors to be quiet, the apartment complex
offered the appellants an opportunity to move to another apartment at their own
expense. The evidence does not show that the apartment complex in any way
required the appellants to move or otherwise disturbed their possession of the
apartment. That Almeda offered the appellants an alternative apartment is not
18
evidence that they were being deprived of their leased apartment or that Almeda
intended to evict them. We overrule this issue.
III. Texas Debt Collection Practices Act
In their sixth issue, the appellants argue that the trial court erred by granting
summary judgment on their claims for violation of the Texas Debt Collection
Practices Act. See TEX. FIN. CODE ANN. §§ 392.001–.404 (West 2006). In their
first amended petition, they alleged that NCAC, acting as an agent for Almeda,
violated the TDCPA by: (1) misrepresenting or threatening to misrepresent to
another person that they willfully refused to pay a nondisputed consumer debt
when the debt was in dispute and the NCAC had been notified in writing of the
dispute, see id. § 392.301(a)(3); (2) threatening to take actions prohibited by law,
see id. § 392.301(a)(8); and (3) misrepresenting the character, extent, or amount of
a consumer debt, see id. § 392.304(a)(8). They also alleged that they suffered
actual damages and mental anguish, but the pleading did not provide any specific
facts pertaining to these elements of damages.
Almeda moved for summary judgment asserting, among other grounds, that
there was no evidence that the appellants suffered any injury as a result of the
alleged violations of the TDCPA. In response to Almeda’s traditional motion for
summary judgment, the appellants attached an unsworn amended response to a
19
request for disclosure which included the following factual statements pertaining to
damages:
Plaintiffs Steven and Michelle Richardson incurred moving
expenses of $10,000.00. From September 7, 2009 through March 1,
2010 (the latter date being the day the lease ended) Plaintiff Steven
Richardson incurred commute expenses of $2,000.00. Plaintiff
Michelle Richardson incurred additional commute expenses of
$1,500.00. Plaintiff Steven Richardson’s motorcycle at the time of its
theft had a fair market value of $8,500.00. Plaintiff Steven
Richardson has incurred medical expenses in excess of $1,000.00.
The apartment we paid for cost $1777.00 per month and was
worthless. We paid rent, including the prorated portion of the month
we moved out, in the amount of $10,789.00. Plaintiff Michelle
Richardson and Plaintiff Steven Richardson suffered overlapping
economic damages in the amount [of] $33,786.00.
Plaintiff Richard Day suffered $2,000.00 in damages for
increased commuter costs.
In response to Almeda’s no-evidence motion for summary judgment as to
their TDCPA claim, the appellants did not respond to the contention that there was
no evidence of damages. Even considering the appellants’ response to the
traditional motion for summary judgment on the element of TDCPA damages, we
conclude that there is no evidence of damages from a violation of the TDCPA
because the appellants’ unsworn discovery disclosure includes no factual allegation
of any harm resulting from the alleged TDCPA violation, and in any case it is not
competent summary-judgment evidence. See Schulz v. State Farm Mut. Auto. Ins.
Co., 930 S.W.2d 872, 876 (Tex. App.—Houston [1st Dist.] 1996, no writ)
(“Answers to interrogatories and discovery responses may only be used against the
20
party who answered them.”). We hold that the trial court did not err in granting
summary judgment as to the appellants’ TDCPA claim. We overrule this issue.
IV. Federal Fair Debt Collection Practices Act
In their seventh issue, the appellants argue that the trial court erred in
granting summary judgment on their claims for violation of the Federal Fair Debt
Collection Practices Act. See 15 U.S.C. §§ 1692–1692p. In their first amended
petition, the appellants alleged that NCAC, while acting on behalf of Almeda:
(1) violated 15 U.S.C. § 1692e(a)(2) by “misrepresenting the character or amount
of a consumer debt” because they owed nothing or were excused from performing
under the lease by Almeda’s prior breach; (2) violated 15 U.S.C. § 1692(e)(a)(5)
by “threatening to take action that cannot be legally taken or that was not intended
to be taken” by threatening to report the debt as undisputed when they previously
informed NCAC in writing that they disputed the debt; and (3) violated 15 U.S.C.
§ 1692e(a)(8) by “threatening to communicate false credit information, including
that the failure to communicate that a disputed debt is disputed,” specifically by
stating in the February 17, 2010 collection letter that it intended to report the debt
as undisputed to credit agencies. The appellants further alleged that they suffered
actual damages including mental anguish as a result of the violations of the Federal
Fair Debt Collection Practices Act.
21
The February 17, 2010 letter that forms the basis of the appellants’ debt
collection claims was addressed only to Michelle. In the subject line it identified
“Equinox Apt 175,” showed a file number, and stated a balance of $3,257.30. The
letter stated:
We have corresponded with you previously, concerning the
above referenced account.
Unfortunately, you have failed to respond in a timely manner.
As a consequence, we are now legally entitled to assume that you
acknowledge the debt but are refusing to pay voluntarily.
My client expects me to pursue all available legal remedies to
effect collection of your account. I urge you to make additional
collection efforts unnecessary by remitting the balance or contacting
me immediately to discuss payment options. . . . For your
convenience, we can accept at no additional cost, checks by phone,
Western Union Quick Collect, credit and debit cards.
Further procrastination on your part will only result in greater
expense as well as other undesirable consequences. Act now to
protect your credit. I will allow 7 days for your response.
The bottom of the letter read, “This is an attempt to collect a debt. Any
information obtained will be used for that purpose.”
Almeda moved for traditional summary judgment on the grounds that it is
not a debt collector and the appellants were not injured. Almeda also argued that
even if it were a debt collector, there still was no evidence that it used a false,
deceptive, or misleading representation or means in connection with the collection
22
of a debt against the appellants, or that the appellants were injured as a result of the
alleged conduct.
The Federal Fair Debt Collection Practices Act prohibits a debt collector
from using “any false, deceptive, or misleading representation or means in
connection with the collection of any debt.” 15 U.S.C. § 1692e. A prevailing
plaintiff may recover actual damages, additional damages up to $1,000, costs, and
reasonable attorney’s fees for prosecuting the civil action. Id. § 1692k. “Actual
damages can include damages for emotional distress, out-of-pocket expenses,
personal humiliation, embarrassment, or mental anguish.” Agueros v. Hudson &
Keyse, LLC, No. 04-09-00449-CV, 2010 WL 3418286, at *6 (Tex. App.—San
Antonio Aug. 31, 2010, no pet.) (citing Harrington v. Nat’l Enter. Sys., Inc., No.
4:08cv422, 2010 WL 890176, at *4 (E.D. Tex. Mar. 9, 2010)). However, the
debtor must prove he suffered some specific loss to recover actual damages. Id.
“Generally, an award of mental anguish damages must be supported by direct
evidence that the nature, duration, and severity of mental anguish was sufficient to
cause, and caused, either a substantial disruption in the plaintiff’s daily routine or a
high degree of mental pain and distress.” Serv. Corp. Int’l v. Guerra, 348 S.W.3d
221, 231 (Tex. 2011). Thus “evidence of the nature, duration, and severity of the
mental anguish is required.” Id. To overcome Almeda’s no-evidence motion for
summary judgment, the appellants must have produced some evidence that, as a
23
result of the allegedly improper debt collection activities, they each suffered “a
high degree of mental pain and distress” that is “more than mere worry, anxiety,
vexation, embarrassment, or anger,” or that substantially disrupted their routines.
See Parkway Co. v. Woodruff, 901 S.W.2d 434, 444 (Tex. 1995).
First, the record shows that the allegedly improper debt collection letter was
addressed and sent only to Michelle, not to Steven or her father. However, the
appellants all produced affidavits to support their allegations that they were injured
as a result of the alleged violations of the Federal Fair Debt Collection Practices
Act.
Steven’s affidavit in relevant part primarily addressed injuries resulting from
the noise he encountered at the apartment complex and his subsequent move. That
portion of the affidavit did not show that any of his claimed economic damages
resulted from the debt collection actions, about which he said:
13. As a result of National Credit Audit Corporation trying to
collect an invalid debt from me, threatening to take legal action they
could not take, and threatening to report the debt as undisputed,
caused me to suffer even more indignation and embarrassment
causing further disruption of my daily routine. I was caused to feel
constantly indignant, tense, disgusted, physically ill, and upset.
However, these statements are conclusory because they lack factual support as to
the nature, duration, or extent of the stated emotional distress or how his daily
routine was disrupted. Therefore, these statements are insufficient to overcome a
24
no-evidence challenge to the element of injury as to Steven. See Serv. Corp. Int’l,
348 S.W.3d at 231; Parkway Co., 901 S.W.2d at 444.
Likewise, Michelle’s affidavit described the bothersome noise and its
impacts on her family, as well as the costs associated with vacating the apartment.
She specifically addressed the debt collection activities, saying:
As a result of [NCAC] trying to collect an invalid debt from us,
threatening to take legal action they could not take, and threatening to
report the debt as undisputed, caused me to suffer even more
indignation and embarrassment causing further disruption of my daily
routine. I was caused to feel constantly indignant, tense, disgusted,
physically ill, and upset. The debt was invalid because they breached
the contract first and also forced us to move out. They threatened to
represent that the debt was undisputed because . . . the letter states that
we failed to ‘timely respond’ and they could ‘assume’ our
acknowledgement of the debt but are refusing to pay voluntarily.
They therefore, also threatened to take action they legally could not
take. They also threatened to report it to a credit bureau. This letter,
just like their previous letter, misrepresented the extent or nature of a
debt, because of [Almeda’s] conduct, we did not owe them anything.
The exact same paragraph appears in Day’s affidavit, and it, too, is his only
evidence of injury sustained as a result of the debt collection practices. As with
Steven’s affidavit, these statements are conclusory because they lack factual
support as to the nature, duration, or extent of the alleged emotional distress or
how their daily routines were disrupted. Therefore, these statements are
insufficient to overcome a no-evidence challenge to the element of injury as to
Michelle and Day. See Serv. Corp. Int’l, 348 S.W.3d at 231; Parkway Co., 901
S.W.2d at 444.
25
Because there is no evidence upon which a reasonable fact finder could find
that any of the appellants suffered damages as a result of the allegedly improper
debt collection practices, we hold that the trial court did not err in granting
summary judgment as to the FDCPA claim. We overrule this issue.
V. Breach of contract
In their second and third issues, the appellants challenge the trial court’s
summary-judgment rulings on their cause of action for breach of contract and on
Almeda’s counterclaim for breach of contract.
A. The appellants’ contract claim
In their first amended petition, the appellants alleged that Almeda breached
the lease agreement based upon the following events: (1) Almeda represented that
the apartment would be suitable for the appellants and that there had been no
reports of theft; (2) the appellants were disturbed by noise from the neighboring
apartment during late hours of the night and early hours of the morning; (3)
Almeda proposed that the appellants move to a different apartment on a higher
floor of the apartment building; (4) Steven’s motorcycle was stolen from the
apartment complex; and (5) the noise, theft of personal property, and
“discrimination on the basis of disability” constituted constructive eviction.
Almeda inquired about the breach-of-contract allegations during each
appellant’s deposition. Michelle testified that Almeda breached the part of the
26
contract that required them to “provide a quiet environment, safe environment.”
Steven testified that he believed Almeda breached its contract by failing to resolve
their noise complaints. He said he did not know which provision of the contract
was breached in this way, but he said, “There’s a clause in there that talks about
the right to peace and quiet and things like that. . . . [T]here’s something in there
that references the fact that if there’s a problem, this is the way you should notify
the management company and do it in writing, and we did that. And, also, we
made the verbal requests and things of such, and there was no resolve ever
offered.” Day testified that he believed Almeda breached the lease by suggesting
that the appellants move instead of suggesting that the noisy neighbors move and
by failing to give them a quiet place.
Almeda moved for summary judgment on grounds that (1) the appellants did
not perform or tender performance under the lease and were not excused from
performance, (2) none of the allegations against Almeda constitute a breach of the
lease, and (3) there is no evidence that (i) the appellants performed, tendered
performance, or were excused from performing their obligations under the lease,
(ii) Almeda breached the lease, or (iii) the appellants were injured by any alleged
breach of the lease by Almeda. In response to the motion, the appellants argued,
among other things, that they performed under the lease until they were
constructively evicted and that the constructive eviction excused further
27
performance under the lease. They also argued that Almeda breached the contract
by breaching the implied covenant of quiet use and enjoyment and by failing to
comply with fair housing laws.
The essential elements of a breach-of-contract claim are: (1) the existence of
a valid contract; (2) performance or tendered performance by the plaintiff;
(3) breach of the contract by the defendant; and (4) damages sustained by the
plaintiff as a result of the breach. Luccia v. Ross, 274 S.W.3d 140, 146 (Tex.
App.—Houston [1st Dist.] 2008, pet. denied). “A breach of the covenant of quiet
enjoyment requires an eviction, actual or constructive, brought about by the acts of
the landlord, those acting for the landlord, or those acting with the landlord’s
permission.” Holmes v. P.K. Pipe & Tubing, Inc., 856 S.W.2d 530, 539 (Tex.
App.—Houston [1st Dist.] 1993, no writ). We have already held that the trial court
did not err by granting summary judgment on the appellants’ cause of action for
constructive eviction. “In the absence of constructive eviction, there can be no
breach of the covenant of quiet enjoyment.” Id. at 541. Therefore, we hold that
the appellants’ summary-judgment evidence does not create a genuine issue of
material fact as to Almeda’s alleged breach of the implied covenant of quiet use
and enjoyment. See id.
The appellants correctly state that the lease required Almeda to
“substantially comply with all applicable laws regarding . . . fair housing.”
28
However, we have already held that the trial court did not err by granting summary
judgment as to the appellants’ fair housing causes of action because there is no
evidence that Almeda refused to make a requested accommodation. We likewise
conclude that there is no evidence that Almeda breached the lease by failing to
substantially comply with all applicable laws regarding fair housing.
Finally, the evidence is undisputed that the appellants did not provide
written notice of their intention to vacate the apartment 60 days in advance and that
they did not pay the full amount of rent due through the end of the lease term.
Because the appellants did not fully perform under the contract and because their
non-performance was not excused by constructive eviction, we conclude that there
is no genuine issue of material fact as to that element of the appellants’ breach-of-
contract claim.
We hold that the trial court did not err by granting summary judgment on the
appellants’ breach-of-contract cause of action, and we overrule this issue.
B. Almeda’s contract counterclaim
In its first amended counterclaim, Almeda alleged that the appellants
breached the lease by vacating the premises before the expiration of the lease term
without giving 60 days’ notice and without paying the accelerated rent and other
amounts that were due under the lease. Almeda moved for traditional summary
judgment on its counterclaim, attaching as evidence the appellants’ original
29
petition, the lease agreement, an affidavit from Susan Franz, a copy of a resident
ledger showing amounts paid on the appellants’ account, and transcripts from the
appellents’ depositions. In response, the appellants argued that their breach of the
lease was excused by Almeda’s breach of its implied covenant of quiet use and
enjoyment. The appellants proffered evidence to support their contentions that
their neighbors were noisy, that the noise was troublesome to them and caused
them stress, that they complained to apartment management about the noise, and
that management offered them an alternative apartment on a higher floor. They
further argued that there was no evidence that Almeda “attempted to move, evict,
or otherwise remedy the noise violations vis a vis the noisy neighbors in the
adjacent apartment.” The appellants also argued about the rental concessions,
stating that Almeda’s motion for summary judgment failed to “state how paragraph
32 of the parties’ lease agreement justifies the concession charges charged by
[Almeda] and therefore fails to provide adequate notice on what basis summary
judgment is sought.” The appellants did not provide any evidence pertinent to the
issue of concession fees.
We have already held that there is no genuine issue of material fact on the
appellants’ cause of action for breach of contract based on a breach of the implied
covenant of quiet use and enjoyment. See Holmes, 856 S.W.2d at 541. The
appellants brought forth no evidence to create a genuine issue of material fact as to
30
the justification for the rental concession charges. Thus, the trial court’s summary
judgment as to Almeda’s breach-of-contract counterclaim is proper if Almeda’s
summary-judgment evidence shows that it is entitled to judgment as a matter of
law. See TEX. R. CIV. P. 166a(c); see also Provident Life & Accident Ins. Co., 128
S.W.3d at 215–16.
It is undisputed that the appellants signed the lease agreement. It is also
undisputed that the lease expired March 29, 2010, and that the appellants vacated
the apartment in September 2009 without providing 60 days’ written notice and
without Almeda’s consent. There is neither evidence nor argument that any of the
other contractual justifications for termination of the lease apply in this case, other
than those that we have already held to be unavailing. Franz’s affidavit shows that
the appellants owed $3,955.11 for accelerated rent and reimbursement of rental
concessions based on (i) the date of their departure, (ii) their monthly rent, (iii) the
date when a new tenant moved into the vacated apartment, mitigating Almeda’s
damages, and (iv) credits for prorated September 2009 rent paid by the appellants
and other deposits. The trial court rendered summary judgment in Almeda’s favor
for the amount of $3,955.11. We hold that it did not err in doing so, and we
overrule this issue.
31
VI. DTPA claims
In their first issue, the appellants challenge the trial court’s summary-
judgment ruling on their causes of action for violation of the Texas Deceptive
Trade Practices Act. In their first amended petition, the appellants alleged that
Almeda violated the DTPA by (1) engaging in an unconscionable action or course
of action, TEX. BUS. & COM. CODE ANN. §§ 17.45(5) & 17.50(a)(3) (West 2011);
(2) engaging in false, misleading, or decetive acts or practices in the conduct of
trade or commerce by (i) representing that goods or services have sponsorship,
approval, characteristics, ingredients, uses, benefits, or quantities which they do
not have, id. § 17.46(b)(5), (ii) representing that an agreement concerning goods or
services confers or involves rights, remedies, or obligations which it does not have
or involve, id. § 17.46(b)(12), and (iii) failing to disclose information concerning
goods or services which was known at the time of the transaction with the intention
to induce the consumer into a transaction into which the consumer would not have
entered had the information been disclosed id. § 17.46(b)(24); and (3) by engaging
in false, misleading, or deceptive acts prohibited by the Texas Debt Collection Act,
see TEX. FIN. CODE ANN. § 392.404(a). The appellants did not specify which
statements or actions formed the basis for each alleged misrepresentation or
unconscionable act, and Almeda did not specially except to the pleading.
32
Almeda moved for summary judgment on the grounds that (1) as a matter of
law, a merger clause in the lease agreement negated any assertion of
misrepresentation, and (2) the lease agreement expressly disclaimed the existence
of express or implied warranties. Almeda also moved on the grounds that there
was no evidence that it: (3) engaged in a false, misleading, or deceptive act or
practice that is specifically enumerated in section 17.46(b) of the DTPA;
(4) breached an express or implied warranty; (5) engaged in an unconscionable
action or course of action; or (6) engaged in any action that was a producing cause
of any damages suffered by the Richardsons or Day.
In response, the appellants alleged that the following Almeda
misrepresentations are actionable as violations of section 17.46(b)(5): (1) that “the
apartment they were renting provided the safe, quiet environment they specifically
required”; (2) that “the apartment was free from extraneous noise to the extent that
Plaintiffs would obtain sufficient rest to perform their occupations”; and (3) that “a
location near the serenity pool would provide even greater degree of quiet.” The
appellants further argued that the following Almeda misrepresentations are
actionable as violations of section 17.46(b)(12): (1) that Almeda told the appellants
they could do nothing about noise violations and (2) that “if Plaintiffs wanted quiet
enjoyment of their lease they had to move to another floor at their expense for even
higher rent.” But as to alleged violations of section 17.46(b)(24), the appellants
33
did not identify any specific statements or actions as violating this provision. The
appellants argued that Almeda further engaged in the following unconscionable
actions or course of actions: (1) representing at the time of the transaction that the
apartment would be quiet enough for them to obtain rest needed to perform their
occupations; (2) representing that the area near the serenity pool would “enhance
the placidity” and “provide suitable lack of noise”; (3) representing that there was a
lack of criminal activity on the premises; (4) refusing to properly address noise
complaints; (5) failing to conduct an adequate investigation; (6) refusing to enforce
rules or policies contained in the lease; and (7) misrepresenting to the appellants
that their sole remedy was to move to another apartment on another floor at greater
expense and at the appellants’ inconvenience.
“The DTPA grants consumers a cause of action for false, misleading, or
deceptive acts or practices.” Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 649
(Tex. 1996); TEX. BUS. & COM. CODE ANN. § 17.50(a)(1) (West 2011). To prevail
under the DTPA, a plaintiff must show that (1) he was a consumer; (2) the use or
employment of a false, misleading or deceptive act or practice that is either (i) a
specifically enumerated “laundry-list” violation under DTPA section 17.46(b) on
which he detrimentally relied or (ii) any unconscionable action or course of action;
and (3) the wrongful act was a producing cause of his economic or mental-anguish
damages. See TEX. BUS. & COM. CODE ANN. § 17.50.
34
First, to the extent that the appellants’ DTPA claims are based on violation
of the Texas Debt Collection Practices Act, in light of our holdings as to
constructive eviction, breach of contract, and violation of the Texas Debt
Collection Practices Act, we further hold that the trial court did not err in granting
summary judgment as to any DTPA claims based on this tie-in statute.
Second, as to the representations made prior to or contemporaneous with the
signing of the lease, the appellants brought forth no evidence to refute Almeda’s
no-evidence motion for summary judgment. Generally, an act is false, misleading,
or deceptive if it has the capacity to deceive an “ignorant, unthinking, or credulous
person.” Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 479–80 (Tex.
1995) (quoting Spradling v. Williams, 566 S.W.2d 561, 562 (Tex. 1978)). Absent
evidence that the defendant’s statement was false, a DTPA action for
misrepresentation cannot survive summary judgment. Id.; see Pennington v.
Singleton, 606 S.W.2d 682, 687 (Tex. 1980) (finding assertions that an engine
housing was in “excellent” and “perfect” condition were actionable under the
DTPA because they misrepresented its actual characteristics). The DTPA’s
purpose in making misrepresentations actionable is “to ensure that descriptions of
goods or services offered for sale are accurate.” Id.; Pennington, 606 S.W.2d at
687. While the appellants correctly note that there is no requirement that Almeda
or its representative have knowledge of the falsity of the statement to be actionable
35
under the DTPA, the statement still must be shown to have been false. See Doe,
907 S.W.2d at 479–80. The appellants’ summary-judgment evidence shows only
that, more than a month after they moved in, the apartment was not quiet or free
from crime. There was no evidence that the apartment was noisy or that the
apartment complex was unsafe or not secure when Franz allegedly made the
representations about noise and security. Because there was no evidence that
Franz’s alleged statements were false, the trial court did not err in granting
summary judgment on this basis. Id.
Third, as to the appellants’ allegations that Almeda violated the DTPA by
engaging in an unconscionable action or course of action by not investigating their
complaints, not enforcing community rules, and offering them an alternative
apartment, we likewise conclude that the trial court did not err in granting
summary judgment. “‘Unconscionable action or course of action’ means an act or
practice which, to a consumer’s detriment, takes advantage of the lack of
knowledge, ability, experience, or capacity of the consumer to a grossly unfair
degree.” TEX. BUS. & COM. CODE ANN. §17.45(5). Unconscionability under the
DTPA is an objective standard for which scienter is irrelevant. See Chastain v.
Koonce, 700 S.W.2d 579, 583 (Tex. 1985); see also Bradford v. Vento, 48 S.W.3d
749, 760 (Tex. 2001); Ins. Co. of N. Am. v. Morris, 981 S.W.2d 667, 677 (Tex.
1998). To be actionable under the statutory standard, the defendant must have
36
taken advantage of the consumer “to a grossly unfair degree,” meaning that “the
resulting unfairness was glaringly noticeable, flagrant, complete and unmitigated.”
Chastain, 700 S.W.2d at 583–84. This determination is made “by examining the
entire transaction and not by inquiring whether the defendant intended to take
advantage of the consumer or acted with knowledge or conscious indifference.”
Id. at 583.
The appellants’ summary-judgment evidence on this issue included
affidavits from the Richardsons and Day stating that Almeda refused to address
their issue with the noisy neighbors. Michelle testified that Almeda “would require
us to move at our expense and inconvenience.” They also offered Steven’s
deposition testimony describing the noise issues and how that made the apartment
unusable. However, the portions of his deposition testimony proffered in response
to both the traditional and no-evidence motions for summary judgment did not
address any actions taken by Almeda. Similarly, the portions of Day’s deposition
that the appellants relied upon to refute Almeda’s no-evidence motion say nothing
about the actions of the apartment complex. Finally, the appellants also produced
leases for their neighbors’ apartments, which contain the same boilerplate
provisions regarding limitations on conduct, such as a prohibition against behaving
in “a loud or obnoxious manner.” However, the leases all also say that Almeda
“may” exclude guests or others who “in our judgment” violate the lease or
37
apartment rules. Though the appellants’ evidence shows that Almeda declined to
exclude or evict the noisy neighbors, in light of the discretion afforded in the lease
contract, none of the appellants’ evidence shows that Almeda took advantage of
the appellants “to a grossly unfair degree,” See id. at 583–84. Accordingly, we
hold that the trial court did not err in granting summary judgment on this ground,
and we overrule the appellants’ first issue.
VII. Attorney’s fees
In their eighth issue, the appellants challenge the trial court’s award of
attorney’s fees to Almeda. In its motion for summary judgment, Almeda argued
that it had incurred “approximately $8,000.00 in reasonable and necessary
attorney’s fees defending against Plaintiffs’ claims and $4,000.00 in reasonable
and necessary attorney’s fees prosecuting [its] counterclaims.” Almeda attached
the affidavit of its attorney, James Muska, to support its fees claim. Muska’s
affidavit described the actions taken in the course of his representation. He also
attested that his hourly rate is $175 and that he spent approximately 68 hours
working on the matter, with approximately 46 hours spent “defending against
Plaintiffs’ claims asserted in this action” and approximately 22 hours “for
prosecuting Defendant’s counterclaims.” Finally, he attested to a total of $40,000
in contingent appellate attorney’s fees.
38
In response, the appellants produced no controverting evidence, but they
argued that Almeda was not entitled to attorney’s fees on its counterclaim because
it was not entitled to prevail on that claim. They also argued that Almeda was not
entitled to attorney’s fees for defending against their claims because the evidence
was insufficient to establish that contractual and noncontractual claims were
inextricably intertwined.
First, although the appellants challenge the full $12,000 award of trial
attorney’s fees, they made no challenge to the $4,000 award for the counterclaim
except to say that Almeda was not entitled to such fees unless it prevailed. Under
Texas law, a party may recover reasonable attorney’s fees from an individual or
corporation, in addition to the amount of a valid claim and costs, if the claim is for
breach of an oral or written contract. See TEX. CIV. PRAC. & REM. CODE ANN.
§ 38.001(8) (West 2008). The lease provided certain remedies upon a tenant’s
default, including recovery of costs and attorney’s fees:
Unless a party is seeking exemplary, punitive, sentimental, or
personal-injury damages, the prevailing party may recover from the
non-prevailing party attorney’s fees and all other litigation costs. We
[Almeda] may recover attorney’s fees in connection with enforcing
our rights under this Lease Contract.
Because the summary-judgment evidence does not create a genuine issue of
material fact as to the award of $4,000 in attorney’s fees for prosecution of its
39
breach-of-contract counterclaim, we hold that the trial court did not err in
rendering such judgment.
Second, we consider the award of $8,000 in trial attorney’s fees for
defending against the appellants’ claims. In its first amended answer, Almeda
alleged that the appellants’ DTPA claims, TDCPA claims, and fair housing act
claims were brought in bad faith or for the purpose of harassment. However,
Almeda made no mention in its motion for summary judgment of entitlement to
attorney’s fees as a sanction. Thus, the trial court’s summary judgment for $8,000
is not supportable on the ground that it is a sanction. See TEX. R. CIV. P. 166a(c)
(“Issues not expressly presented to the trial court by written motion, answer or
other response shall not be considered on appeal as grounds for reversal.”).
Thus, we must determine if Almeda’s summary-judgment proof established
its entitlement to the $8,000 attorney’s fee award. Cf. McConnell v. Southside
Indep. Sch. Dist., 858 S.W.2d 337, 343 (Tex. 1993) (“[S]ummary judgments must
stand or fall on their own merits, and the non-movant’s failure to answer or
respond cannot supply by default the summary judgment proof necessary to
establish the movant’s right.”). The general rule is that fee claimants must
“segregate fees between claims for which they are recoverable and claims for
which they are not.” Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311
(Tex. 2006). Relying on Stewart Title Guaranty Co. v. Aiello, 941 S.W.2d 68
40
(Tex. 1997), Almeda argues it is entitled to all of its attorney’s fees because all of
the claims rely on “essentially the same facts.” See 941 S.W.2d at 73. The
Supreme Court of Texas has held that “when the causes of action involved in the
suit are dependent upon the same set of facts or circumstances and thus are
‘interwined to the point of being inseparable,’ the party suing for attorney’s fees
may recover the entire amount covering all claims.” Stewart Title Guar. Co. v.
Sterling, 822 S.W.2d 1, 11 (Tex. 1991); accord Aiello, 941 S.W.3d at 73.
However, the Supreme Court of Texas modified this holding in Tony Gullo Motors
I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006), in which it held, “Intertwined facts
do not make tort fees recoverable; it is only when discrete legal services advance
both a recoverable and unrecoverable claim that they are so intertwined that they
need not be segregated.” 212 S.W.3d at 313–14. The Court noted:
But Sterling was certainly correct that many if not most legal fees in
such cases cannot and need not be precisely allocated to one claim or
the other. Many of the services involved in preparing a contract or
DTPA claim for trial must still be incurred if tort claims are appended
to it; adding the latter claims does not render the former services
unrecoverable. Requests for standard disclosures, proof of background
facts, depositions of the primary actors, discovery motions and
hearings, voir dire of the jury, and a host of other services may be
necessary whether a claim is filed alone or with others. To the extent
such services would have been incurred on a recoverable claim alone,
they are not disallowed simply because they do double service.
Id. at 313.
41
The summary-judgment evidence in this case affirmatively demonstrates
that some discrete legal services were rendered only for claims for which
attorney’s fees are not recoverable. For example, Muska’s affidavit attests that he
reviewed DTPA demand letters and conferred with his client about the allegations
in them. The DTPA provides that “[e]ach consumer who prevails shall be awarded
court costs and reasonable and necessary attorneys’ fees.” TEX. BUS. & COM.
CODE ANN. § 17.50. But the statute makes no other provision for attorney’s fees
for defending a non-frivolous DTPA claim. The same is true for the Fair Housing
Act and Debt Collection Act claims. Because Almeda’s summary-judgment
evidence shows discrete legal services rendered for some claims for which
attorney’s fees are unrecoverable, yet does not show segregation of attorney’s fees
between recoverable and non-recoverable claims, we hold that the trial court erred
in awarding $8,000 in attorney’s fees for defending against all of the appellants’
claims. See Tony Gullo Motors, 212 S.W.3d at 313–14. Because Almeda
prevailed in its motion for summary judgment on the appellants’ breach-of-
contract claim, and the lease specifically provided that “the prevailing party may
recover from the non-prevailing party attorney’s fees,” remand is appropriate. See
Silver Lion, Inc. v. Dolphin St., Inc., No. 01-07-00370-CV, 2010 WL 2025749, at
*18 (Tex. App.—Houston [1st Dist.] May 20, 2010, pet. denied) (mem. op.)
(holding that defendant was prevailing party when court entered take-nothing
42
judgment in his favor); see also Epps v. Fowler, 351 S.W.3d 862, 868–69 (Tex.
2011) (holding that defendant is prevailing party for purposes of award of
attorney’s fees when plaintiff nonsuits case with prejudice). Because the
summary-judgment evidence does not conclusively prove Almeda’s entitlement to
$8,000 in attorney’s fees for defending against appellants’ claims, we sustain the
appellants’ eighth issue in part, and we remand this issue to the trial court for
further proceedings.
Conclusion
We reverse the judgment of the trial court to the extent it awarded Almeda
$8,000 in attorney’s fees for defending against the appellants’ claims, and we
remand this case to the trial court for further proceedings consistent with this
opinion. The judgment of the trial court is otherwise affirmed.
Michael Massengale
Justice
Panel consists of Justices Jennings, Bland, and Massengale.
43