513 S.W.3d 684
Tex. App.2016Background
- FP Stores was sole sublessor of Tramontina under a sublease that required return of a $50,000 security deposit within 60 days after surrender and forwarding address.
- ProLogis, as landlord, held the premises and conducted move-out inspections; FP Stores claimed the inspection and related charges were caused by ProLogis restricting access.
- Tramontina contended FP Stores failed to refund or provide an itemized accounting within 60 days, triggering a presumption of bad faith under Texas Property Code §93.011(d).
- FP Stores later inspected the premises for the first time and identified $31,381.44 in damages attributable to Tramontina, proposing an $18,618.56 refund.
- The trial court granted summary judgment to Tramontina on breach of contract and §93.011 claims; on appeal, the court reversed and remanded, finding material factual issues as to good faith and impossibility defenses.
- FP Stores sought new trial alleging genuine issues of material fact, including good faith and impossibility due to ProLogis blocking inspections; the court also recognized impossibility as a defense.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether FP Stores raised a genuine issue of material fact to rebut the §93.011 bad-faith presumption. | Tramontina | FP Stores | Yes, FP Stores provided more than a scintilla of evidence of good faith. |
| Whether impossibility/impracticability precludes FP Stores' liability. | Tramontina | FP Stores | Yes, evidence shows performance was impracticable due to ProLogis blocking inspection. |
| Whether the trial court erred in granting summary judgment based on the bad-faith presumption. | Tramontina | FP Stores | Yes, reversed; fact issues remained. |
Key Cases Cited
- Eun Bok Lee v. Ho Chang Lee, 411 S.W.3d 95 (Tex. App.-Houston [1st Dist.] 2013) (presumption applies when no timely refund or itemization)
- Buck v. Palmer, 381 S.W.3d 525 (Tex. 2012) (more than a scintilla required to rebut presumption)
- Wilson v. O’Connor, 555 S.W.2d 776 (Tex. App.-Dallas 1977) (good-faith burden to show honest conduct)
- Pulley v. Milberger, 198 S.W.3d 418 (Tex. App.-Dallas 2006) (evidence of reasonable damages and good faith rebut presumption)
- Johnson v. Waters at Elm Creek, L.L.C., 416 S.W.3d 42 (Tex. App.-San Antonio 2013) (good faith shown by honesty in fact)
- Hardy v. 11702 Memorial, Ltd., 176 S.W.3d 266 (Tex. App.-Houston [1st Dist.] 2004) (bad-faith requires honesty in fact in conduct)
- Intercontinental Realty, Inc. v. 2005 RP W., Ltd., 449 S.W.3d 512 (Tex. App.-Houston [1st Dist.] 2014) (impossibility/impracticability as defense)