Clear Lake Center, L.P. v. Garden Ridge, L.P.
416 S.W.3d 527
| Tex. App. | 2013Background
- Garden Ridge leased space in a shopping center; lease (1995) required tenant to pay a pro rata share of Common Area Costs (CAM) and a 7.5% supervisory allowance; landlord obligated to keep books and allow tenant audits.
- Clear Lake acquired the center in 2003 and, beginning that year, billed Garden Ridge an additional “management fee” (and charged supervisory fee on that fee). Garden Ridge paid management fees from 2003–2009 (total disputed amount $470,087.53).
- United Equities (broker/manager) had a 2003 property management agreement with Clear Lake; same individual signed for both entities and negotiated terms. United Equities was paid a 5% management fee on gross collections.
- Garden Ridge’s 2009 audit (covering 2004–2008) concluded the management fees were predominantly for non‑CAM services; Garden Ridge sued Clear Lake in 2009 for breach of contract and declaratory relief.
- Trial court granted Garden Ridge summary judgment on breach, limited future charges to CAM‑related management only, and awarded damages and attorney’s fees; appeal followed challenging liability, damages, limitations, and interest rate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether lease permits a separate management fee chargeable to tenant | Garden Ridge: lease does not permit a separate management fee (it would duplicate 7.5% supervisory allowance) | Clear Lake: lease authorizes separate management fees for managing common areas under §6.3–6.4 | Court: Lease authorizes a separate management fee but only for expenditures related to management/maintenance of the Common Areas (rejects plaintiff’s duplication argument) |
| Whether charging management fees for non‑CAM services breached the lease | Garden Ridge: Clear Lake charged non‑CAM management fees (breach) | Clear Lake: many management activities related to CAM; sole‑discretion clause precludes challenge unless fees not comparable to similar centers | Court: garden ridge raised fact issues showing some fees were non‑CAM; liability not conclusively erroneous but trial court’s summary judgment on liability must be reversed because damages were not conclusively proved |
| Whether Garden Ridge conclusively proved damages (entitlement to full management fees) | Garden Ridge: entire management fee is recoverable; Clear Lake kept no records to apportion CAM vs non‑CAM so burden should shift | Clear Lake: some portion was CAM‑related; plaintiff must prove measure of damages | Court: plaintiff failed to conclusively prove damages; evidence shows some management activities were CAM‑related and Garden Ridge did not establish apportionment; summary judgment on damages improperly granted |
| Whether earlier bankruptcy/res judicata, waiver, or limitations bar claims | Garden Ridge: (implicit) claims for post‑confirmation breaches not barred; timely for post‑2005 charges | Clear Lake: bankruptcy confirmation/res judicata, waiver, and limitations (claims before Sept. 10, 2005) bar recovery | Court: res judicata & waiver defenses rejected; statute of limitations bars claims accruing before Sept. 10, 2005 (including 2004 fee). Also reversed awards of interest and attorney’s fees tied to damages |
Key Cases Cited
- Ferguson v. Building Materials Corp. of Am., 295 S.W.3d 642 (Tex. 2009) (standard of review for summary judgment)
- Coastal Liquids Transp., L.P. v. Harris County Appraisal Dist., 46 S.W.3d 880 (Tex. 2001) (court should consider cross‑motions and render correct judgment)
- Mid‑Continent Cas. Co. v. Global Enercom Mgmt., Inc., 323 S.W.3d 151 (Tex. 2010) (cross‑motion principles)
- Via Net v. TIG Ins. Co., 211 S.W.3d 310 (Tex. 2006) (discovery rule for accrual of contract claims; rare application)
- Aquaplex, Inc. v. Rancho La Valencia, Inc., 297 S.W.3d 768 (Tex. 2009) (remand/remittitur principles when damages unsupported)
- T.F.W. Management, Inc. v. Westwood Shores Property Owners Ass’n, 79 S.W.3d 712 (Tex. App.—Houston [14th Dist.] 2002) (discussed by parties re: "sole discretion" language)
- HECI Exploration Co. v. Neel, 982 S.W.2d 881 (Tex. 1998) (limitations and failure to inquire preclude discovery‑rule tolling)
- In re Howe, 913 F.2d 1138 (5th Cir.) (res judicata in bankruptcy context; nucleus of operative facts analysis)