Tuesday, December 4, 2007

Harris County Sovereign Immunity Case Heard by Supreme Court Today

December 4, 2007. Texas Supreme Court hears oral argument in an imporant sovereign immunity case involving local hospital district. Harris County Hospital District v. Tomball Regional Hospital, No. 05-0986) (Tex. 200_) (e-briefs)

Opinion below: Tomball Hospital Authority v. Harris County Hospital District, 178 S.W.3d 244 (Tex. App. - Houston [14th Dist.] July 28, 2005, pet. filed)(Opinion by Justice Harvey Hudson)
Subsequent History: The Fourteenth Court of Appeals' construction of sue-and-be-sued clause as a clear waiver of sovereign immunity was rejected by the Texas Supreme Court in Tooke v. City of Mexia, No. 03-0878 (Tex. June 30, 2006), which established new controlling precedent on the statutory waiver issue.

View --> Oral Argument in Harris County Hospital District v. Tomball Hospital District on St. Mary's University's web site
For Petitioner: Ms. Sandra Hachem (Harris County Attorney), from Houston.
For Respondent: Mr. Randal L. Payne (Sullins, Johnston, Rohrbach & Magers), from Houston.

Case summary provided by Supreme Court staff attorney:

The Supreme Court will hear arguments on the issue of whether the immunity issue for hospital district sued for reimbursement by hospital authority. The issue is whether the Harris County Hospital District is immune from the Tomball hospital’s suit seeking compensation because it allegedly treated indigent patients that Harris County should have under state law. Tomball sued to be reimbursed for care given to Harris County patients that Tomball alleges were turned away from Harris County hospitals or referred by those hospitals to Tomball’s. Harris County claims in part that it is exempt from paying other hospitals for treating patients eligible for free care under the Indigent Health Care and Treatment Act. The trial court dismissed Tomball’s suit on Harris County’s jurisdictional plea. The court of appeals reversed, holding that the statute’s language that a hospital district could “sue and be sued” was an unambiguous immunity waiver.
Link to Appellate briefs in Harris County Hospital District v. Tomball Regional Hospital
Link to Court of appeals opinion on 14th Court of Appeals web site

Lease Law: Landlord Properly Mitigated Damages, Court Rules

In this commercial lease dispute, the First Court of Appeals, in a memo op. authored by Justice Hanks, affirms judgment for landlord on breach of lease damages and attorney's fees.

Narsi v. Weingarten Realty Investors, No. 01-06-00690-CV (Tex.App.- Houston [1st Dist.] Nov. 29, 2007)(Hanks) (lease law, landlord-tenant disputes, breach of commerical lease, interpretation of lease, renewal, lockout, mitigation defense, attorney's fees)
Opinion by Justice Hanks Before Justices Taft, Hanks and Higley
Full case style: Amirali M. Narsi v. Weingarten Realty Investors
Appeal from 189th District Court of Harris County (Hon. William R. Burke, Jr.)
Disposition: Trial court's judgment for landlord affirmed


Weingarten Realty Investors sued Amirali M. Narsi for breach of a lease. After a bench trial, the trial court found that the lease was ambiguous and issued a final judgment in favor of Weingarten. Rajab A. Rahim and Ahmed Bhai Mamji were also parties to the suit with Narsi. Rahim and Mamji did not appeal the final judgment.

On appeal, Narsi argues that the final judgment was improper because (1) the trial court misconstrued the plain language of the Original Lease, Renewal Agreement, and Lease Assignment; (2) the trial court failed to have Weingarten mitigate its damages; and (3) the trial court granted attorney’s fees without evidence showing that they were reasonable and necessary. We affirm.


Jenny Hyun, associate counsel for Weingarten, testified that, in 1995, Weingarten entered into a commercial lease (“the Original Lease”) with Narsi, who was going to open a Dollar Store. The Original Lease was to remain in effect until November 30, 1998. In 1998, the parties extended the lease (“the Renewal Agreement”) until November 30, 2001. Hyun testified that, before the Renewal Agreement expired, Narsi assigned the lease to Ahmed Mamji, who was going to take over the Dollar Store. Their “Lease Assignment, Assumption & First Amendment to Lease” (“the Lease Assignment”) prolonged the Renewal Agreement until November 30, 2006. After the Renewal Agreement term expired, Mamji defaulted on the Lease Assignment. Weingarten locked Mamji out of the premises, relet the premises, and sued Narsi, alleging that he was liable for the time remaining on the Lease Assignment.

Paragraph 4 of the Lease Assignment states as follows:

[Mamji] does hereby accept this Assignment, assume and agree to perform the covenants, duties and obligations of “Tenant” under said Lease Contract (including the payment of rent), and agrees to be bound by all of such covenants, duties and obligations of Tenant as fully to the same extend as if [Mamji] had been the original party designated as “Tenant” thereunder; and [Mamji] shall be fully, directly and primarily liable for the performance thereof, and it is agreed that the liability of [Narsi] and [Mamji] is joint and several and may be enforced against either without any nature of notice to, demand upon, proceeding against or judgment against the other.
(Emphasis added.) Paragraph 5 provides as follows:

[Weingarten] hereby consents to this Assignment with the express understanding that this Assignment shall in no way relieve [Narsi] of liability for the performance of the covenants, duties and obligations of [Mamji] under said Lease Contract, including liability for the full amount of rental and any additional charges, provided to be paid by [Mamji] to [Weingarten] pursuant to said Lease Contract; and [Narsi] shall continue to be directly and primarily liable to [Weingarten] for the performance of all covenants, duties and obligations of [Mamji] under such Lease Contract, including payment of rental, and such liability shall remain and continue in full force and effect as to any further assignment or transfer of the Lease Contract, whether or not [Narsi] shall have received any notice or consented to such assignment or transfer, and whether or not [Weingarten] may subordinate any of its liens and/or security interests, contractual or statutory; provided, however, that any sum paid by [Mamji] to [Weingarten] shall be credited on the aforesaid obligation of [Narsi]. [Weingarten] shall not be obligated to give any notice to [Mamji] which is not presently provided for as a duty of [Weingarten] under said Lease Contract. (Emphasis added.)

The parties disagree with respect to the definition of the term “lease contract.” The trial court found the Lease Assignment to be ambiguous and stated that the court believed that Weingarten intended Narsi to be the guarantor, but it was not sure if the leases were enough to “get them there.” The trial court also considered the fact that Weingarten drafted the Lease Assignment. After deliberation, the trial court awarded Weingarten $347,274.35. The principal sum was $214,217.89, and prejudgment interest accrued at 18%.

Lease Interpretation

In his first and second issues, Narsi contends that the trial court erred in granting final judgment
in favor of Weingarten because ambiguity exists regarding whether, under the terms of the Lease Assignment, Narsi’s liability extended beyond November 30, 2001—the end of the Renewal Agreement. Weingarten asserts that there is no ambiguity and all parties agreed to the intent of the Lease Assignment. The Lease Assignment at issue provides that:

WHEREAS, by Lease Contract (the “Original Lease”) dated September 8, 1995, WEINGARTEN REALTY INVESTORS, therein and herein referred to as “Landlord,” leased to AMARALI [sic] M. NARSI and RAJAB A. RAHIM, therein called “Tenant” and hereinafter called “Assignor,” a storeroom . . . for a term commencing November 21, 1995, and terminated November 30, 2001, reference being here made to such Lease Contract for all relevant purposes; and

WHEREAS, the Original Lease was amended by a Renewal Letter Agreement dated September 30, 1998 (said Original Lease, together with the Renewal Letter Agreement shall hereinafter be referred to as the “Lease Contract”);[ The Original lease was to terminate on November 30, 1998, and the RenewalAgreement renewed the lease until November 30, 2001.] and
. . .
[Narsi] does hereby sell, assign and transfer unto Assignee [Mamji], effective April 1, 2001 (hereafter called “Effective Date”), all of [Narsi’s] leasehold interest under the aforesaid Lease Contract herein above referred to for the entire remainder of the lease term (such period being sometimes herein referred to as the “assignment period”).

Absent ambiguity, we interpret a contract as a matter of law. DeWitt County Elec. Co-op., Inc. v. Parks, 1 S.W.3d 96, 100 (Tex. 1999). “Whether a contract is ambiguous is a question of law that must be decided by examining the contract as a whole in light of the circumstances present when the contract was entered.” Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996). “If the written instrument is so worded that it can be given a certain or definite legal meaning or interpretation, then it is not ambiguous and the court will construe the contract as a matter of law.” Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). “An ambiguity exists only if the contract language is susceptible to two or more reasonable interpretations.” Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex. 2003). The language in a contract is to be given its plain grammatical meaning unless doing so would defeat the parties’ intent. DeWitt County Elec. Coop., 1 S.W.3d at 101. We presume that the parties intended every clause to have an effect. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996).

In our analysis, we must determine whether the parties have contracted to extend Narsi’s obligation in the lease contract through the assignment period of the Lease Assignment. Narsi contends that the “Lease Contract” expired by its terms on November 30, 2001—at the end of the Renewal Agreement—and that the Lease Assignment does not keep Narsi liable for any extension of the lease contract. Weingarten, on the other hand, contends that Narsi remains liable for the entire remainder of the assignment period—November 30, 2006.

If a contract is worded so that a court may properly give it a definite or certain legal meaning or interpretation, then it is not ambiguous. Friendswood Dev. Co. v. McDade + Co., 926 S.W.2d 280, 282 (Tex. 1996). A contract is ambiguous only when there exists a genuine uncertainty as to which of two meanings is proper. Columbia Gas, 940 S.W.2d at 589. However, an ambiguity does not arise simply because the parties advance conflicting interpretations of the contract. Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 134 (Tex. 1994). In order for an ambiguity to exist, both interpretations must be reasonable. Nat’l Union Fire Ins. Co. v. CBI Industries, Inc., 907 S.W.2d 517, 520 (Tex. 1995).

Narsi argues that the Lease Assignment extends the lease to November 30, 2006, but does not extend the “lease contract,” which is a defined term. We disagree. The term “lease,” which is used throughout the Lease Assignment, is defined in the Renewal Agreement as follows:
Reference is made to the captioned Lease Contract dated September 8, 1995, together with all subsequent amendments and extensions thereto, collectively herein referred to as “Lease,” for a term which commenced November 21, 1995, and shall terminate November 30, 1998.
Almost three years later, on May 22, 2001, the Lease Assignment references the term “lease” as follows:

The term of the Lease is hereby extended through November 30, 2006, unless sooner terminated in accordance with the terms and conditions set forth in the Lease.
Paragraph 2 of the Lease Assignment also uses the term “lease”:
Commencing December 1, 2001, Tenant shall pay to Landlord, as Minimum Rent, in accordance with the terms and conditions of Article IV of the Lease, the following . . . .

Only the Original Lease contains “articles.” Furthermore, paragraph 12 of the Lease Assignment states “all defined terms used herein shall have the same meaning as when used in the Lease unless another meaning is clearly indicated.” The term “lease” in the Lease Assignment refers to the Original Lease and the Renewal Agreement. Consequently, the phrase “entire remainder of the lease term” in the Lease Assignment refers to the lease’s extension through November 30, 2006. When the lease contract phrase is read in the context of the assignment period contained in the Lease Assignment, its meaning becomes clear—Narsi remains liable through the Lease Assignment’s extension of the lease contract.

We overrule Narsi’s first and second issues.

Mitigation of Damages

In his third issue, Narsi complains that Weingarten failed to mitigate its damages. Weingarten asserts it properly mitigated its damages.

A landlord has a duty to make reasonable efforts to mitigate damages when the tenant breaches the lease and abandons the property. Tex. Prop. Code Ann. § 91.006 (Vernon 2007); Austin Hill Country Realty, Inc. v. Palisades Plaza, Inc., 948 S.W.2d 293, 299 (Tex. 1997). However, the landlord is not required to fill the premises with any willing tenant; the replacement tenant must be suitable under the circumstances. Austin Hill, 948 S.W.2d at 299. The landlord’s failure to use reasonable efforts to mitigate damages bars the landlord’s recovery against the breaching tenant only to the extent that damages reasonably could have been avoided. Id. The tenant bears the burden to prove that the landlord has mitigated or failed to mitigate damages and the amount by which the landlord reduced or could have reduced its damages. Id.

Pursuant to section 16.02 of the Original Lease, Weingarten does not have the duty to relet the leased premises, but it does have a duty to “diminish[] by any net sums thereafter received by Landlord through reletting the Lease Premises during said period.”

According to section 91.006 of the Texas Property Code, a landlord has a duty to mitigate damages, “a provision of a lease that purports to waive a right or to exempt a landlord from liability or duty under this section is void.” Tex. Prop. Code Ann. § 91.006 (Vernon 2007).

The Original Lease was signed before section 91.006 of the Texas Property Code was enacted, but the Renewal Agreement was signed afterwards. Assuming without deciding that section 91.006 applies here, Weingarten gave Narsi offsets and credits once its new tenant moved in. Mamji tried to bring in a third party by the name of Fatehali Chatoor to take over the lease. Weingarten did not have a duty to accept the tenant presented by Mamji. Narsi failed to present credible evidence to the trial court to demonstrate that Weingarten failed to mitigate its damages.

Because Weingarten did not have a duty to accept the third party tenant Mamji presented, and because Weingarten gave Narsi offsets and credits once a new tenant moved in, we hold that Weingarten properly mitigated its damages.

We overrule Narsi’s third issue.

Attorney’s Fees

In his fourth issue, Narsi argues that Weingarten is not entitled to recover attorney’s fees because there was no evidence or expert testimony verifying that the fees were reasonable and necessary. We use an abuse of discretion standard of reviewing attorney’s fees awards in non-declaratory judgment actions. See Ridge Oil Co. v. Guinn Invs. Inc., 148 S.W.3d 143, 163 (Tex. 2004).

Weingarten asserts that it is entitled to attorney’s fees because it won its breach of contract claim against Narsi. See Tex. Civ. Prac. & Rem. Code Ann. § 38.001(8) (Vernon 1997) (attorney’s fees recoverable for breach of contract claim).

When a prevailing party in a breach of contract suit seeks attorney’s fees, section 38.001 mandates an award of reasonable fees if there is proof that the fees are reasonable. See Atlantic Richfield Co. v. Long Trusts, 860 S.W.2d 439, 449 (Tex. App.—Texarkana 1993, writ denied); Budd v. Gay, 846 S.W.2d 521, 524 (Tex. App.—Houston [14th Dist.] 1993, no writ). A trial court has the discretion to fix the amount of attorney’s fees, but it does not have the discretion to completely deny attorney’s fees if they are proper under section 38.001. See Budd, 846 S.W.2d at 524. The party seeking to recover attorney’s fees carries the burden of proof. See Stewart Title Guaranty Co. v. Sterling, 822 S.W.2d 1, 8, 10 (Tex. 1992).

Weingarten’s attorney, Richard Howell, testified that he had expended approximately $13,000 at the rate of $225 per hour. Howell also testified that the services provided and the hourly rates were reasonable based on the issues involved in the case. Finally, Howell testified that $2,500 was a reasonable legal fee to charge if the case was appealed to this court; and $5,000 would be a reasonable fee if a petition for review is filed with the Texas Supreme Court. Howell’s testimony was uncontroverted.

What amount of attorney’s fees is reasonable is a question of fact. See Int’l Sec. Life Ins. Co. v. Spray, 468 S.W.2d 347, 349 (Tex. 1971). But where, as here, trial counsel’s testimony concerning attorney’s fees for the trial of a case is clear, positive and direct, and uncontroverted, the court takes it as true as a matter of law. See Ragsdale v. Progressive Voters League, 801 S.W.2d 880, 882 (Tex. 1990). This is especially the case where the opposing party had the means and opportunity to challenge the testimony and failed to do so. See id.; see also Tex. Civ. Prac. & Rem. Code Ann. § 38.003 (Vernon 1997) (stating rebuttable presumption that usual and customary attorney’s fees are reasonable).

Because Narsi failed to take the available opportunity to question or controvert Howell’s testimony, we hold that the testimony established Weingarten’s reasonable and necessary legal fees through trial of the case as a matter of law.

We overrule Narsi’s fourth issue.


We affirm the judgment of the trial court.

George C. Hanks, Jr.

Panel consists of Justices Taft, Hanks, and Higley.

Memo opinion illustrates common errors after dismissal of case

Motion to reinstate dismissed case must be filed within 30 days of dismissal. Deadline for appeal starts running on day dismissal order is signed, not date a motion to reinstate is denied. Trial court's plenary jurisdiction had expired. Notice of Appeal untimely.

Cantu-Garcia v. Epernay Community No. 14-07-00862-CV (Tex.App.- Houston [14th Dist.] Nov. 29, 2007)(per curiam)(untimely notice of appeal, DWOJ)
DISMISSED: Per Curiam (Before )
14-07-00862-CV Otoniel De Jesus Cantu-Garcia a/k/a Tony Cantu v. Epernay Community, Et al
Appeal from Co Civil Ct at Law No 2 of Harris County (Hon. Jacqueline Lucci-Smith)


The clerk's record in this appeal reflects that the trial court dismissed this case on March 26, 2007. Both appellant and appellee Epernay Community Association, Inc., assert, however, that this appeal is from an agreed order of dismissal signed June 27, 2007. The notice of appeal was not filed until September 27, 2007. Appellant asserts that he filed a motion to reinstate on August 9, 2007, and an amended motion to reinstate on August 23, 2007. Our record does not contain a motion to reinstate. A motion to reinstate must be filed within 30 days of the order of dismissal. See Tex. R. Civ. P. 165a(3), 329b; see also McAllen v. Ramirez, 875 S.W.2d 702, 704‑05 (Tex. App.- Corpus Christi 1994, orig. proceeding) (noting the practical similarities between a motion to reinstate and a motion for new trial). A motion to reinstate filed more than 30 days after dismissal is untimely. In re Simon Prop. Group (Delaware), Inc., 985 S.W.2d 212, 214‑215 (Tex. App.- Corpus Christi 1999, orig. proceeding). Therefore, even if we accept appellant's statement that he filed a motion to reinstate on August 9, 2007, it was untimely.

The trial court's plenary power over the dismissal order expired 30 days after it was signed. Once a trial court loses plenary power, it may only take limited actions with respect to the judgment, such as correction of a clerical error or enforcement of the judgment. Custom Corporates, Inc. v. Security Storage, Inc., 207 S.W.3d 835, 839 (Tex. App. - Houston [14 Dist.] 2006, no pet.).

The notice of appeal must be filed within thirty days after the judgment is signed when appellant has not filed a timely motion for new trial, motion to modify the judgment, motion to reinstate, or request for findings of fact and conclusion of law. See Tex. R. App. P. 26.1. An appeal from order dismissing a case is taken from order of dismissal, not from the court's ruling on a motion to reinstate. Weik v. Second Baptist Church, 988 S.W.2d 437, 438 (Tex. App.-Houston [1st Dist.] 1999, pet. denied). Therefore, to appeal the dismissal of this case, appellant was required to file a notice of appeal on or before July 27, 2007, 30 days after the dismissal order.

Appellant's notice of appeal filed September 27, 2007, was not timely. A motion for extension of time is necessarily implied when an appellant, acting in good faith, files a notice of appeal beyond the time allowed by rule 26.1, but within the fifteen-day grace period provided by Rule 26.3 for filing a motion for extension of time. See Verburgt v. Dorner, 959 S.W.2d 615, 617-18 (1997) (construing the predecessor to Rule 26). Appellant's notice of appeal was not filed within the fifteen-day period provided by rule 26.3, however.

On November 1, 2007, appellee Epernay Community Association, Inc. filed a motion to dismiss the appeal for want of jurisdiction. See Tex. R. App. P. 42.3(a). Appellant filed a response, but his response fails to demonstrate that this court has jurisdiction to entertain the appeal.
Epernay also filed a motion for sanctions seeking damages for appellant's filing of a frivolous appeal. See Tex. R. App. P.45. We deny the motion. We also deny appellant's request for sanctions and attorney's fees contained in his response to the motions to dismiss and for sanctions.

Accordingly, the appeal is ordered dismissed.


Judgment rendered and Memorandum Opinion filed November 29, 2007.
Panel consists of Chief Justice Hedges and Justices Anderson and Seymore.

Sunday, December 2, 2007

Local Judge David J. Bernal reversed by Amarillo Court of Appeals

Appeal in construction case tried to jury in the 281st District Court, in Harris County, was transferred to Seventh Court of Appeals in Amarillo. That court reverses judgment for Plaintiffs on negligent representation theory of recovery and attorney's fee, finding that negligent misrepresentation claim was merely a contract claim in disguise, and no basis for attorneys' fee recovery existed on any alternative theory.

Robert Scherer and SCS Construction Management Inc. v. Dean Angell and Sally Angellm, No. 7-05-00147-CV (Tex. App.- Amarillo, Nov. 30, 2007)(Opinion by Justice Hancock)(construction law dispute, attorneys fee's deleted) (Before Chief Justice Quinn, Justices Campbell and Hancock)
Appeal from 281st District Court of Harris County (Hon. David Jorge Bernal)
Appellant's counsel: J. Hans Barcus
Appellees' attorney: R. Tate Young



Appellants, Robert Scherer and SCS Construction Management, Inc. (SCS), appeal from a judgment granting appellees, Dean Angell and Sally Angell (collectively, “the Angells”), damages against appellants for negligent misrepresentation and slander of title as well as awarding the Angells attorney fees. We reverse and render a take nothing judgment as to the Angells’ claims for negligent misrepresentation and the award of attorney fees.

Factual and Procedural Background

This case arises out of a construction contract between SCS and the Angells. The contract in question was executed on July 28, 2002 and called for SCS to build a metal building on land owned by the Angells. SCS had previously built another building for the Angells. The construction of the building called for in the July 28 contract was significantly delayed and did not proceed in a manner that suited the Angells. On February 24, 2004, the Angells met with SCS through Scherer, SCS’s president, and another representative of SCS. Exactly what transpired at the meeting was the subject of a significant amount of testimony at trial. However, at the conclusion of the meeting, Scherer informed the Angells that the meeting was over and the contract was cancelled. He initially informed the other corporate representative to return to the Angells their down payment of $9,000 but, subsequently, directed the representative to determine how much SCS had in the job and to refund any portion of the down payment that remained to the Angells. After the review, SCS informed the Angells that a review of the project revealed that the entire $9,000 had been expended and, in fact, the Angells owed SCS an additional $8,247.78. The Angells disputed the claim that they owed any money to SCS and made a claim for a refund of $5,500 of the original down payment. Later, Scherer caused a mechanic’s lien to be filed on the property upon which the building was to be built to secure payment of the $8,247.78 that Scherer alleged the Angells owed SCS.

The Angells subsequently filed suit against SCS and Scherer for breach of contract, fraud, slander of title, conversion, and wrongful retention of money. SCS and Scherer answered and filed a counterclaim alleging quantum merit, breach of contract, and seeking to foreclose the mechanic’s lien on the property.

The Angells filed an answer to the counterclaim that, inter alia, alleged an affirmative defense that the lien was void and was a cloud on the Angells’ title. Before trial, the Angells filed an amended pleading adding claims of trust fund violations, negligent misrepresentation, and promissory estoppel. A jury trial was held and the jury found that SCS had not breached the contract; the Angells had detrimentally relied on promises made by Scherer, but did not suffer damages from their reliance; SCS and Scherer had not converted any of the Angells’ property; SCS had made negligent misrepresentations to the Angells and, as a result, the Angells had suffered damages in the amount of $21,000; Scherer had slandered the Angells’ title to the property and the Angells had suffered $1,000 in damages as a result; SCS had not committed fraud; the Angells incurred $15,000 in attorney fees in the preparation for and trial of the lawsuit; and SCS provided compensable work in the value of $13,000 to the Angells. The trial court, after motions for judgment and judgment notwithstanding the verdict, entered judgment that confirmed the jury’s answers to the fact issues and conditionally granted the Angells additional attorney fees for appeal to the court of appeals and Supreme Court of Texas. It is from this judgment that SCS and Scherer appeal.

SCS and Scherer’s first issue deals with the award of attorney fees to the Angells. However, we will first address SCS and Scherer’s issues challenging the legal and factual sufficiency of the evidence to support the finding of negligent misrepresentation and resulting damages before addressing the issue of attorney fees.

Sufficiency of the Evidence

By three issues, SCS and Scherer contend that the evidence was either legally or factually insufficient to support the jury’s finding that SCS had misrepresented an existing fact or that the Angells suffered any damages as a result of any misrepresentations. When both legal and factual sufficiency are raised, we must first address the issue of legal sufficiency. Glover v. Tex. Gen. Indem. Co., 619 S.W.2d 400, 401 (Tex. 1981). Because we conclude that the evidence was legally insufficient to support the jury’s negligent misrepresentation finding, we need not address the additional sufficiency issues raised by SCS and Scherer. See Tex. R. App. P. 47.1.

When conducting a legal sufficiency review, the cogent inquiry is whether the evidence at trial would enable reasonable and fair minded people to differ in their conclusions. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). As a reviewing court, we are not free to substitute our judgment for that of the trier of fact, so long as the evidence falls within the zone of reasonable disagreement. Id. In making this determination, the scope of review requires that we view the evidence in the light most favorable to the verdict, crediting favorable evidence if reasonable jurors could do so and disregarding contrary evidence unless reasonable jurors could not. Id. at 807.

To recover in an action for negligent misrepresentation, the Angells had to prove the following elements: 1) a representation was made by SCS or Scherer in the course of its business or in a transaction in which SCS or Scherer had a pecuniary interest; 2) SCS or Scherer supplied “false information” for the guidance of others in their business; 3) SCS or Scherer did not exercise reasonable care or competence in obtaining or communicating the information; and 4) the Angells suffered pecuniary loss by justifiably relying on the representation. Fed. Land Bank Ass’n of Tyler v. Sloane, 825 S.W.2d 439, 442 (Tex. 1991). Additionally, the “false information” contemplated in a negligent misrepresentation case must be a misstatement of an existing fact rather than a promise of future conduct. Miller v. Raytheon Aircraft Co., 229 S.W.3d 358, 379 (Tex.App.–Houston [1st Dist.] 2007, no pet.). Finally, there must be an independent injury, other than a breach of contract, to support a negligent misrepresentation finding. D.S.A., Inc. v. Hillsboro Indep. Sch. Dist., 973 S.W.2d 662, 663 (Tex. 1998).

The Angells’ third amended original petition, the live pleading for the Angells at the time of trial, included an allegation of negligent misrepresentation. The Angells allege that SCS and Scherer “. . . misrepresented that they would perform some of the work on the property. . . and not charge Plaintiffs for such.” There are no other claims of negligent misrepresentation made in the Angells’ petition. Dean Angell testified that an employee of SCS, John Gonzalez, offered to “spread the dirt” for the Angells on both lots for free in order to get the Angells to hire SCS to build both the first building and the building in the contract of July 28, 2002. This evidence shows conclusively that the alleged misrepresentation was that SCS and Scherer agreed to perform certain work at some undisclosed time in the future. Accordingly, this evidence does not and cannot prove negligent misrepresentation, as it is clearly related to an act to be performed in the future. Miller, 229 S.W.3d at 379.

The Angells, in their brief, argue that other misrepresentations were made. However, none of these allegations are supported by the Angells’ pleadings. Even so, a review of these allegations reveals that all of them are either part and parcel of the breach of contract action or a promise of future action. First, the Angells claim that SCS told them they would get a discount for contracting to have SCS build both buildings. This representation is alleged to have been made during negotiations and prior to any contract work being done. Therefore, it is clearly a promise of future action and does not support a claim of negligent misrepresentation. Id. Second, the Angells contend that there were negligent misrepresentations in the ancillary Construction Loan Agreement. However, there is no evidence to support this contention. Also, the Construction Loan Agreement is in and of itself a completed contract between the Angells, SCS, and the lending institution. Therefore, any failure to live up to representations would be a breach of that contract and not a negligent misrepresentation. D.S.A., Inc., 973 S.W.2d at 663. The alleged misrepresentations concerning the amount of concrete work are simply allegations of breach of contract. Id. The Angells also allege that SCS’s failure to repay the $9,000 down payment was a negligent misrepresentation. However, such an agreement is nothing more than a breach of contract allegation or an unfilled promise of future action recast as a negligent misrepresentation claim. Id. Finally, the issue of the Angells obtaining and paying for building permits is nothing but damages for a breach of contract action. Id.

What we are left with is not evidence of negligent misrepresentation. Accordingly, the evidence at trial does not enable reasonable and fair minded people to differ in their conclusions, therefore, the evidence is legally insufficient to support a finding that SCS and Scherer were negligent in their representations to the Angells. City of Keller, 168 S.W.3d at 822. Likewise, the judgment awarding damages for that cause of action cannot stand. We, therefore, reverse the trial court’s judgment awarding damages to the Angells for the negligent misrepresentation cause of action.

Attorney Fees

Next, we consider the award of attorney fees to the Angells. We review the trial court’s decision granting attorney fees under a de novo standard. Gereb v. Smith-Jaye, 70 S.W.3d 272, 273 (Tex.App.–San Antonio 2002, no pet.). SCS’s and Scherer’s contention is that the Angells failed to obtain a jury finding on any cause of action that would allow the trial court to enter a judgment awarding attorney fees. The Angells counter saying that the attorney fees they incurred were a consequential damage suffered as a result of SCS’s and Scherer’s negligent misrepresentation. Also, the Angells contend that the award of attorney fees was proper because the jury found for the Angells on their action for promissory estoppel. Further, the Angells allege that the award of attorney fees was valid because of the provisions of Texas Property Code section 53.156. See Tex. Prop. Code Ann. § 53.156 (Vernon 1984).

The Angells obtained an affirmative finding as to their theory of promissory estoppel. However, the jury found no damages for the Angells under that same theory. A finding of no damages negates the right of the Angells to recover attorney fees in connection with promissory estoppel. Promissory estoppel, according to the Angells, is a form of contract action and recovery is, therefore, of a contractual nature. As such, section 38.001 of the Civil Practice and Remedies Code governs the right to recover attorney fees. See Tex. Civ. Prac. & Rem. Code Ann. § 38.001 (Vernon 1985). To recover attorney fees under this section the Angells were required to recover damages. G.R.A.V.I.T.Y. Enters., Inc. v. Reece Supply Co., 177 S.W.3d 537, 546 (Tex.App.–Dallas 2005, no pet.)(citing Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997)). The Angells were awarded zero damages on their claim for promissory estoppel and, therefore, they are not entitled to recover attorney fees under that theory of recovery.

Next, the Angells claim that the attorney fees are recoverable based upon their pleading that the mechanic’s lien was invalid. See Tex. Prop. Code Ann. § 53.156 (Vernon 1984). The jury was asked whether either SCS or Scherer, or both of them, slandered the Angells’ title to the property in question. The instructions given the jury in connection with the question do not refer or allude to an action under the section of the Property Code that the Angells now cite as authority to recover attorney fees. The only fact found is the jury’s affirmative answer to the slander of title inquiry. Slander of title does not support the award of attorney fees. Williams v. Jennings, 755 S.W.2d 874, 886 (Tex.App.–Houston [14th Dist.] 1988, writ denied).

The only other cause of action found in favor of the Angells was negligent misrepresentation. However, we have determined that the jury finding in favor of the Angells was not based on legally sufficient evidence. Accordingly, the award of attorney fees for negligent misrepresentation cannot survive. Even if the jury finding of negligent misrepresentation survived appeal, we note that a jury finding in favor of the Angells on the theory of negligent misrepresentation will not support the award of attorney fees. Metro. Life Ins. Co. v. Haney, 987 S.W.2d 236, 243-44 (Tex.App.–Houston [14th Dist] 1999, pet. denied).

Simply stated, the award of attorney fees may not be sustained under the facts of the case at bar. Accordingly, the judgment awarding attorney fees to the Angells is reversed.

Slander of Title

Scherer has not appealed the jury finding that his actions were a slander of title as to the real property owned by the Angells. Accordingly, that portion of the trial court’s judgment will not be disturbed.


That portion of the judgment of the trial court that awards the Angells damages for negligent misrepresentation and attorney fees is reversed and we render judgment that the Angells take nothing by these claims.

Mackey K. Hancock