Philadelphia Indemnity Insurance Company, A/S/O Mirsan, L.P., D/B/A Sienna Ridge Apartments v. Carmen A. White
490 S.W.3d 468
| Tex. | 2016Background
- Tenant Carmen White signed a TAA form lease requiring reimbursement for "loss, damage... due to... any other cause not due to [landlord]’s negligence or fault." The lease also separately listed three specific non-fault categories mirroring Tex. Prop. Code § 92.006(f).
- A fire originated in White’s tenant‑owned dryer while she was using it; origin of ignition was not conclusively determined but testing found cotton and trace vegetable oil residue; mechanical/electrical malfunction and arson were excluded by experts.
- Landlord’s insurer (Philadelphia Indemnity) paid the claim, sued White for negligence and breach of the reimbursement clause; jury answered “no” on negligence but “yes” that White breached the lease; awarded damages to insurer.
- White moved for JNOV arguing ambiguity and that the reimbursement clause violated the Property Code/public policy; trial court granted JNOV and rendered take‑nothing judgment; court of appeals affirmed as to public‑policy invalidity but split on ambiguity.
- This Court held the lease clause unambiguous but concluded it is not per se unenforceable; enforcement depends on whether, under Tex. Prop. Code §§ 92.052 and 92.053, the landlord had a nonwaivable repair duty (which requires proof the damage was not tenant‑caused).
- The Court ruled the statutory standard "caused by" in § 92.052(b) is not fault‑based, placed the burden of proving the tenant did not cause the condition on the tenant (per § 92.053), and found the record did not conclusively establish White met that burden; reversed court of appeals on public‑policy ground and remanded for other defenses.
Issues
| Issue | White's Argument | Philadelphia Indemnity's Argument | Held |
|---|---|---|---|
| Whether the reimbursement clause is ambiguous | Clause’s catchall plus specific bolded categories creates ambiguity about scope | Clause is plain: tenant reimburses for all loss not due to landlord fault | Court: Clause is unambiguous and requires reimbursement for all damage not due to landlord fault |
| Whether the clause violates Property Code/public policy (unenforceable per se) | Clause unlawfully shifts nonwaivable repair duties to tenant by covering damage not "caused by" tenant | Churchill Forge permits contracting outside §92.006 exceptions; clause enforceable unless statute plainly prohibits it | Court: Not void per se; enforceability depends on specific facts — only invalid when enforcement would conflict with Chapter 92 in the particular application |
| Who bears burden to prove whether damage was "caused by" the tenant under §92.052/92.053 | Tenant: landlord must prove tenant caused the damage (so failure to find causation precludes enforcement) | Insurer: tenant bears burden to prove statutory defense (i.e., show landlord had a nonwaivable duty) | Court: §92.053 places the burden on the tenant to prove the landlord had a duty (tenant must prove damage was not tenant‑caused); negative negligence finding is not a substitute |
| Whether the jury’s negative negligence finding precludes enforcement of lease | Tenant: jury’s finding that she was not negligent means landlord had nonwaivable duty and clause unenforceable | Insurer: negligence finding is insufficient; tenant must obtain affirmative finding that she did not cause the damage | Court: A negative negligence answer is not an affirmative finding of no causation; record does not conclusively show tenant met her burden, so clause is enforceable on record before the Court |
Key Cases Cited
- Royston, Rayzor, Vickery, & Williams, LLP v. Lopez, 467 S.W.3d 494 (Tex. 2015) (stresses Texas public policy favoring freedom of contract)
- Fairfield Ins. Co. v. Stephens Martin Paving, LP, 246 S.W.3d 653 (Tex. 2008) (courts must respect statutory public‑policy choices when deciding enforceability)
- Churchill Forge, Inc. v. Brown, 61 S.W.3d 368 (Tex. 2001) (interpreting interplay of §92.006 nonwaiver rule and tenant‑caused damages; parties may allocate tenant‑caused damages)
- Zorrilla v. Aypco Constr. II, LLC, 469 S.W.3d 143 (Tex. 2015) (describes burdens for affirmative defenses)
- Lewis v. Davis, 199 S.W.2d 146 (Tex. 1947) (contract is void only if it cannot be performed without violating law)
- C. & R. Transp., Inc. v. Campbell, 406 S.W.2d 191 (Tex. 1966) (a jury’s failure to find an element is not an affirmative finding of the opposite)