Neel v. Tenet Healthsystem Hospitals Dallas, Inc.
378 S.W.3d 597
| Tex. App. | 2012Background
- Live Oak OB/GYN, PA leased medical office space from Tenet for five years; Neel and Welborne signed the lease on behalf of Live Oak, as officers/members; Live Oak relocated to Frisco and stopped paying Dallas lease in 2004; Tenet terminated the Dallas lease as abandonment in 2005 and later claimed damages and liability under Article 14.12; Tenet sued Live Oak, Welborne, and Neel for past due rent and fees; Neel and Welborne sought summary judgment asserting no individual liability; trial court granted Tenet’s motion and denied theirs; on appeal, Neel/Welborne challenge personal liability and mitigation/estoppel defenses; majority affirms, holding Neel/Welborne liable individually under Article 14.12 and rejecting mitigation/estoppel defenses; dissent argues Article 14.12 is ambiguous and that summary judgment on individual liability was improper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Article 14.12 create individual liability for Neel and Welborne as 'comprising Tenant'? | Neel/Welborne signed as Live Oak officers; no privity; no personal liability. | Signature alone bound them personally under 14.12; they signed to bind Live Oak and themselves. | Yes; we interpret 14.12 to make those comprising Live Oak jointly and severally liable. |
| Are Neel and Welborne personally liable despite signing as agents of Live Oak and without explicit capacity designation? | Signing as officers does not show personal obligation; privity exists only with Live Oak. | Signing under Tenant with 14.12 shows personal obligation; capacity not expressly limited. | Yes; the four-corners reading of the lease shows personal liability under 14.12. |
| Did Live Oak/Welborne present a genuine dispute regarding mitigation of damages? | Tenet failed to mitigate; Welborne affidavit shows ready subtenant and recruitment promises. | Affidavits lack proper foundation and damages evidence; conclusory. | No genuine issue; denial of mitigation evidence proper, damages not proven. |
| Did Welborne's and Live Oak's estoppel defense present a genuine issue of material fact? | Tenet made promises to assist sublet and recruitment; estoppel by reliance. | Affidavits lack facts showing misrepresentation or detrimental reliance. | No; no facts showing quintessential estoppel elements. |
| Is Article 14.12 ambiguous, such that summary judgment was improper? | Language could bind only signatories; others comprising Tenant not parties. | Language unambiguous; binds those comprising Tenant. | Not ambiguous; majority view holds 14.12 binding. |
Key Cases Cited
- Ward v. Prop. Tax Valuation, Inc., 847 S.W.2d 298 (Tex.App.-Dallas 1992) (officer signing contract not personally liable absent express agreement)
- Willis v. Donnelly, 199 S.W.3d 262 (Tex.2006) (business corporations statute shielding officers; exception for express personal liability)
- Coker v. Coker, 650 S.W.2d 391 (Tex.1983) (contract ambiguities resolved as law; objective intent governs)
- Nagle v. Duncan, 570 S.W.2d 116 (Tex.App.-Houston [1st Dist.] 1978) (agency principles; agent bound if pledges personal responsibility)
- McClellan v. Scardello Ford, Inc., 619 S.W.2d 593 (Tex.Civ.App.-Amarillo 1981) (privity and contract enforcement between contracting parties)