Premium Assets, Inc. v. Lydia A. Garcia D/B/A Joe Lynn Dazzles and More and Lydia Ann Garcia
13-13-00549-CV
Tex. App.Aug 27, 2015Background
- In Jan 2012 Lydia A. Garcia negotiated a commercial lease for Suite 115‑A with Jason Alaniz, the listing agent for Premium Assets, Inc. (the property manager for owner SFP 711). Alaniz told Garcia she was approved and she signed a lease and provided checks for first month and security deposit.
- Garcia obtained commercial insurance, purchased inventory and supplies ($2,843.48), opened a business account, received keys and a building access card, and moved property into the unit.
- Premium Assets later informed Garcia the tenancy was rejected for failing a credit check, changed the locks on Feb 1, 2012, returned her checks, and retained some of her property. The lease was never executed by SFP 711 or Premium Assets.
- Garcia sued Premium Assets for promissory estoppel and violations of the Texas Deceptive Trade Practices Act (DTPA). After a bench trial the trial court awarded $18,651.47 in reliance damages, prejudgment and postjudgment interest, attorneys’ fees, and ordered return of her property.
- Premium Assets appealed, arguing (1) the signed lease and its merger clause preclude detrimental reliance; (2) Garcia made judicial admissions negating reliance; and (3) the statute of frauds/statute of conveyances bar recovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a signed lease and merger clause preclude Garcia from showing detrimental reliance for DTPA and promissory estoppel claims | Garcia relied on oral/agent representations that she was approved and detrimentally changed position; the written lease never took effect because landlord never signed | Premium Assets says the lease (and merger clause) shows Garcia could not have relied to her detriment on pre‑lease representations | Court: Lease is irrelevant because it was never executed by landlord and Garcia’s claims concern misrepresentations outside/encompassing the unconsummated lease; detrimental reliance may be shown. |
| Whether Garcia’s pleadings contain a judicial admission that she did not rely to her detriment | Garcia’s petition noted the lease had not been executed, but she nevertheless relied on Premium Assets’ representations | Premium Assets contends that acknowledgment the lease wasn’t signed is a clear admission that she could not have relied | Court: Not a clear, deliberate, unequivocal judicial admission on reliance; statement at most acknowledges the lease wasn’t formally executed and does not negate detrimental reliance. |
| Whether statute of frauds / statute of conveyances bar Garcia’s recovery from Premium Assets (a non‑party to the lease) | Garcia argues her claims for misrepresentation and promissory estoppel are independent of enforcing the lease and thus not barred | Premium Assets contends statutes bar enforcement/recovery related to alleged lease rights against non‑signatories | Court: Statutes would affect suits to enforce the lease against the landlord, but do not bar an action for misrepresentations by a non‑party; recovery for DTPA/promissory estoppel permitted. |
| Vicarious liability / agency and ratification | Garcia asserts Alaniz was Premium Assets’ agent and Premium Assets ratified his acts (keys, gate code, allowing move‑in) | Premium Assets defended on agency scope and liability grounds | Court: Found agency, apparent/actual authority, and ratification by Premium Assets; vicarious liability applies. |
Key Cases Cited
- BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789 (Tex. 2002) (standard for reviewing trial court conclusions of law de novo)
- Cruz v. Andrews Restoration, Inc., 364 S.W.3d 817 (Tex. 2012) (DTPA requires detrimental reliance)
- Weitzel v. Barnes, 691 S.W.2d 598 (Tex. 1985) (DTPA covers oral misrepresentations outside written contracts)
- Bus. Staffing, Inc. v. Jackson Hot Oil Serv., 401 S.W.3d 224 (Tex. App. — El Paso 2012) (presence of written contract does not preclude DTPA liability for misrepresentations)
- Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887 (Tex. 2000) (definition and effect of judicial admissions)
- Bank of Tex., N.A. v. Gaubert, 286 S.W.3d 546 (Tex. App. — Dallas 2009) (discusses promissory estoppel in context of statute of frauds and promises to sign documents)