Parkway Dental Associates, P.A., Poorang Pahlavan, H. Tram Nguyen and Shannon Presley v. Ho & Huang Properties, L.P. and SW Parkway Management, Inc.
391 S.W.3d 596
Tex. App.
2012

Background

  • Parkway, as tenant, and landlord Ho & Huang Properties, L.P., entered a five-year commercial lease with a five-year option in 2004; Covenant barred use of the Project for a Competitive Business (general dentistry) during the term, with Project defined broadly including parking areas.
  • In 2006, the Tract containing the parking area was sold to a third party by the landlord, without requiring a covenant to bind the purchaser.
  • Aquarium Dental, L.L.C. leased space on the Tract in 2007 and began operating as a general dentistry practice around 2009; Parkway asserted the presence of Aquarium Dental violated the Covenant.
  • Parkway sued in 2007 asserting breach of lease, fraud theories, negligent misrepresentation, unjust enrichment, and related theories; the trial court granted no-evidence and traditional summary-judgment motions against many claims and later entered a final judgment awarding the Landlord attorneys’ fees.
  • The court bifurcated the case: it severed and reversed the breach-of-contract and anticipatory repudiation claims, and affirmed other claims; it also reversed the award of attorney’s fees tied to the Landlord’s prevailing-party status under the Parkway Lease.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether the trial court erred in granting no-evidence MSJ on breach and anticipatory repudiation Parkway contends a competing general dentistry operation existed on the Project during the primary term. Landlord argues no competent evidence shows a competing general-dentistry business existed. Yes; genuine fact issues remained, so MSJ on breach/anticipatory repudiation was improper.
Whether the trial court erred in granting MSJ on remaining claims Parkway asserts remaining tort/recovery claims survive under economic-loss and other theories. Landlord argues these claims are barred by contract or lack independent basis. No error for most remaining claims; some tort claims limited but overall denied in part, sustained in part.
Whether the trial court erred in awarding attorney’s fees to the Landlord Fees awarded based on Landlord being prevailing party should be reversed if breach claims reversed. Prevailing-party status supported by dismissal of breach claims. Reversed; because breach/repudiation claims were reversed, fee award under the lease provision must be reversed.

Key Cases Cited

  • M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22 (Tex. 2000) (standard for traditional vs no-evidence summary judgments)
  • Johnson v. Brewer & Pritchard, P.C., 73 S.W.3d 193 (Tex. 2002) (no-evidence review framework; de novo standard)
  • Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572 (Tex. 2006) (genuine issue of material fact requires resolution by jury)
  • Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754 (Tex. 2007) (no-evidence standard; if any independent ground supports, affirm)
  • FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868 (Tex. 2000) (summary-judgment grounds; grounds need not be stated if one supports)
  • PAS, Inc. v. Engel, 350 S.W.3d 602 (Tex. App.—Houston [14th Dist.] 2011) (evidence creating genuine issue of fact as to essential elements)
  • Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462 (Tex. 1998) (contract interpretation; ambiguity standard)
  • Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118 (Tex. 1996) (contract interpretation; ambiguity clarified by express terms)
  • American Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154 (Tex. 2003) (contract interpretation; unambiguous terms govern)
  • MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647 (Tex. 1999) (contextual contract interpretation; harmony of provisions)
  • Friendswood Development Co. v. City of Friendswood, 344 S.W.3d 514 (Tex. 2011) (damages; expectancy vs reliance measures in contract)
  • Szczepanik v. First South Trust Co., 883 S.W.2d 648 (Tex. 1994) (lost profits—require reasonably certain proof)
  • Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80 (Tex. 1992) (basis for damages and recovery principles)
  • Chevron Phillips Chemical Co., L.P. v. Kingwood Crossroads, L.P., 346 S.W.3d 37 (Tex. 2011) (definition of prevailing party in contract)
  • Emery Air Freight Corp. v. Gen. Transp. Sys., Inc., 933 S.W.2d 312 (Tex. App.—Hou. [14th Dist.] 1996) (prevailing-party and fee-shifting principles)
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