Hmc Hotel Properties II Limited Partnership and Host Hotels & Resorts, L.P., F/K/A Host Marriott, L.P. v. Keystone-Texas Property Holding Corporation
439 S.W.3d 910
Tex.2014Background
- Keystone owned Rivercenter Mall and the land under the San Antonio Marriott Riverwalk; Host leased and operated the hotel. Keystone sought to sell both parcels as a package; Ashkenazy agreed to buy for $166 million.
- Keystone sent Host notice under lease §14.02 (first right of negotiation) and asked Host to waive that right in writing so title insurers would issue “clean” policies. Host expressed interest but never made an offer and ultimately refused to waive.
- Host sent an April 18, 2005 letter asserting Keystone had already negotiated with a buyer and demanding a new negotiation period; Keystone claims that letter was passed to title insurers and killed the sale.
- Two title insurers (Fidelity and Land America) consistently required a written waiver of §14.02 to remove exceptions from their commitments; they testified they would not issue clean policies without a waiver. Ashkenazy’s purchase agreement also listed a waiver as a buyer condition.
- A jury found for Keystone on slander of title and tortious interference and awarded $39 million; the trial court set aside punitive damages. The court of appeals affirmed actual damages; the Texas Supreme Court reversed, holding Keystone produced no evidence the April 18 letter proximately (but‑for) caused the deal’s failure.
Issues
| Issue | Plaintiff's Argument (Keystone) | Defendant's Argument (Host) | Held |
|---|---|---|---|
| Whether Host's April 18 letter proximately caused the sale to fail | Letter was a substantial, outcome‑determinative factor that led title insurers to refuse to insure around §14.02 | Title insurers required a written waiver regardless; letter only communicated Host’s existing refusal and could not be the but‑for cause | Reversed: no evidence the letter was the but‑for cause; insurers would have insisted on a waiver absent the letter |
| Whether title insurers would have ‘‘insured around’’ §14.02 without the letter | Insurers explored options after the letter, so they might have insured around if letter hadn’t been sent | Insurers consistently demanded a waiver from the outset and testified they would not issue a clean policy without it | Held: insurer testimony was speculative and insufficient to show a different outcome absent the letter |
| Sufficiency of evidence to support jury verdicts for slander of title and tortious interference | Witness testimony and internal reactions established the letter caused the collapse | No direct evidence that absence of the letter would have produced a different result; causation cannot rest on conjecture | Held: legal sufficiency lacking for proximate‑cause element; judgment should be rendered for Host |
| Standard for admissible causation testimony | Keystone relied on insurer and lawyer testimony that the letter increased risk and was a substantial factor | Host argued those opinions were conclusory and lacked a factual basis demonstrating but‑for causation | Held: bare or speculative opinions do not satisfy causation; expert/party testimony must show a reasonable basis for the causal conclusion |
Key Cases Cited
- Kroger Tex. Ltd. P’ship v. Suberu, 216 S.W.3d 788 (Tex. 2006) (standard for legal‑sufficiency review of jury verdicts)
- Merrell Dow Pharm. v. Havner, 953 S.W.2d 706 (Tex. 1997) (criteria for legal insufficiency and standards of proof)
- Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. Nat’l Dev. and Research Corp., 299 S.W.3d 106 (Tex. 2009) (proximate‑cause elements: cause‑in‑fact and foreseeability)
- Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472 (Tex. 1995) (cause‑in‑fact cannot be established by speculation)
- City of San Antonio v. Pollock, 284 S.W.3d 809 (Tex. 2009) (conclusory opinions are not probative evidence)
- Jelinek v. Casas, 328 S.W.3d 526 (Tex. 2010) (expert opinions unsupported by basis are conclusory)
- Burrow v. Arce, 997 S.W.2d 229 (Tex. 1999) (opinion testimony must have a factual basis to be probative)
- Schaefer v. Tex. Empr’s Ins. Ass’n, 612 S.W.2d 199 (Tex. 1980) (no ‘‘magic language’’ substitutes for evidentiary support of causation)
- Haynes & Boone v. Bowser Bouldin, Ltd., 896 S.W.2d 179 (Tex. 1995) (speculative testimony insufficient to establish causation)
- Ford Motor Co. v. Ledesma, 242 S.W.3d 32 (Tex. 2007) (abrogation context cited regarding precedential scope)