Transcontinental Realty Investors, Inc v. Sidney Wicks
442 S.W.3d 676
| Tex. App. | 2014Background
- Sidney Wicks leased commercial property to Transcontinental Realty under a lease dated September 3, 2004.
- On May 17, 2006 Wicks formed the Sidney Wicks Revocable Trust and executed an Assignment and Declaration transferring all his property rights to himself as trustee; rent thereafter was paid to the Trust.
- Wicks (individually) filed suit for breach of the lease in December 2010; the suit was amended to substitute Wicks as trustee of the Trust as plaintiff in March 2011.
- On September 6, 2011 Wicks executed and recorded a general warranty deed and an Assignment and Assumption of Lease transferring the property and lease to the Trust, both stating an “effective date” of May 17, 2006 (i.e., retroactive to the earlier transfer).
- The trial court granted summary judgment on liability for appellee; a jury in October 2012 awarded damages of $1,066,277.14 plus interest and attorneys’ fees; Transcontinental appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing / privity to sue as landlord | Wicks (as trustee) can enforce the lease; assignment to Trust effective May 17, 2006 | Transcontinental: Trust lacked standing/capacity because Wicks originally sued in his individual capacity and transfer wasn’t effective in May 2006 | Court: Challenge is capacity/privity, not standing; Trust may sue in trustee capacity — claim goes to merits, not jurisdiction (affirmed) |
| Validity/effect of retroactive assignment (May 17, 2006 effective date) | Assignment and recorded deed/assignment show transfer to Trust effective May 17, 2006 | Transcontinental: Assignment not properly conveyed in May 2006; retroactive date improper | Court: Lease and lease terms permit assignment; retroactive effective date allowed; tenant paid rent to Trust and not prejudiced (affirmed) |
| Jury instruction that lease was assigned in May 2006 | Jury instruction consistent with assignment documents and lease provisions allowing transfers | Transcontinental: Jury shouldn’t be instructed Trust held lease as of May 2006 | Court: Instruction proper given lease language and assignment evidence (affirmed) |
| Admissibility of expert testimony on future damages | Appellee’s expert used accepted appraisal methodology; Transcontinental cross-examined methodology | Transcontinental: Expert’s methodology unreliable and testimony should have been excluded | Court: Abuse-of-discretion review; Transcontinental failed to timely/sufficiently object to methodology at trial — error waived (affirmed) |
Key Cases Cited
- Nat’l Health Res. Corp. v. TBF Fin., LLC, 429 S.W.3d 125 (Tex. App.—Dallas 2014) (distinguishing standing from capacity/privity issues)
- John C. Flood of DC, Inc. v. Supermedia, LLC, 408 S.W.3d 645 (Tex. App.—Dallas 2013) (privity challenge is a capacity issue requiring rule 93 compliance)
- Crim Truck & Tractor Co. v. Navistar Int’l Transp. Co., 823 S.W.2d 591 (Tex. 1992) (general rule that contracts are assignable)
- Crowell v. Bexar Cnty., 351 S.W.3d 114 (Tex. App.—San Antonio 2011) (recognizing parties may make assignments effective retroactively under certain circumstances)
- Bay Area Healthcare Group, Ltd. v. McShane, 239 S.W.3d 231 (Tex. 2007) (preservation rule: must timely and specifically object and obtain ruling to preserve evidentiary complaints)
- Coastal Transp. Co. v. Crown Cent. Petroleum Corp., 136 S.W.3d 227 (Tex. 2004) (trial court’s gatekeeper role in expert methodology and that Robinson-type review should occur at trial)