Premises Liability: Summary judgment for store affirmed

Lofton v. Marmaxx Operating Corp. (Tex.app.- Houston [1st Dist.] Feb. 28, 2008)(Hanks) (premises liability suit)
Opinion by Justice George C. Hanks
Panel: Justices Nuchia, Hanks and Higley
Style: Debra Lofton v. Marmaxx Operating Corp., Individually and d/b/a T. J. Maxx
Trial court: 113th District Court of Harris County (Judge Patricia Hancock)
Disposition: Summary Judgment for defendant store affirmed

MEMORANDUM OPINION

In this trip and fall case, Debra Lofton appeals the trial court’s grant of Marmaxx Operating Corp. d/b/a T.J. Maxx’s (“T.J. Maxx”) summary judgment. In her sole issue on appeal, Lofton argues that the trial court erred in granting T.J. Maxx’s motion for summary judgment as there is sufficient evidence of a genuine issue of material fact on each element of her cause of action. We affirm.

Background

On May 4, 2004, Lofton shopped in the T.J. Maxx department store, purchased her items, and was walking out of the store when she tripped on the floor mat in front of the exit. Lofton broke her elbow.

Lofton brought a premises liability suit against T.J. Maxx, asserting that T.J. Maxx was negligent for (1) creating the dangerous condition, (2) maintaining the dangerous condition, (3) failing to correct and make safe the dangerous condition, and (4) failing to warn its customers of the dangerous condition, all of which resulted in her injuries. T.J. Maxx filed a no-evidence motion for summary judgment asserting that Lofton had no evidence that (1) T.J. Maxx had any actual knowledge of any defect, (2) T.J. Maxx had any constructive knowledge of any defect, (3) there was a defect, (4) any alleged defect posed an unreasonable risk of harm, (5) T.J. Maxx failed to exercise reasonable care to reduce or eliminate any alleged risk, and (6) T.J. Maxx’s alleged failure was the proximate cause of Lofton’s injuries. Lofton responded to the motion and attached her affidavit, the accident report, a recorded claims statement, T.J. Maxx’s responses to requests for production, and excerpts from the deposition of Leila Marie Baines, T.J. Maxx’s assistant manager. Baines testified that the mats are kept clean and are placed in the area “to make sure they are in the area just in case it rained.” The mats are mostly for people when they are entering the store. Baines also testified that she did not believe Lofton tripped on the mat. Lofton contended that T.J. Maxx created a fact question as to the location of the incident. She further contended that “notice is not an element of [her] claim because [her] claim is based on the actions of [T.J. Maxx] and its employees by creating the hazard.” The placement of the mat created a hazardous or unreasonably dangerous condition. Lofton’s response concluded by arguing that the following arguments prevent the granting of T.J. Maxx’s summary judgment:

(1) the subject mat was placed in an area of the store where invitees would not expect it to be;

(2) because the weather was sunny on the date of the incident, the mat should have been removed since there was no need for the stated purpose of the mat; and

(3) the condition of the mat was more likely to cause someone to trip and fall.
T.J. Maxx objected to Lofton’s summary judgment evidence. T.J. Maxx specifically complained of two statements in Lofton’s affidavit—“It was dangerous for TJ Maxx to have the mat in the exit area.” “The placement of the mat at the exit created an unreasonably dangerous condition.”—because the statements were self-serving, legally conclusory, factually conclusory, and not based on personal knowledge. T.J. Maxx further objected to Lofton’s reference to photographs, which were not attached to the affidavit.

The trial court sustained T.J. Maxx’s objections to Lofton’s summary judgment evidence and granted a take-nothing judgment. Lofton does not contest the ruling on the summary judgment evidence, but appeals the grant of summary judgment.

Standard of Review

Summary judgment is a question of law. Provident Life & Accid. Ins. Co. v. Knott, 128 S.W.3d 211, 220 (Tex. 2003). Thus, we review a trial court’s summary judgment decision de novo. Id. at 215. A party moving for no-evidence summary judgment must assert only that there is no evidence of one or more essential elements of a claim or defense on which the non-movant would have the burden of proof at trial. See Tex. R. Civ. P. 166a(i). The burden then shifts to the non-movant to produce evidence raising a fact issue on the challenged elements. See id. A no-evidence summary judgment is improper if the respondent brings forth more than a scintilla of probative evidence to raise a genuine issue of material fact. Id.; Forbes Inc. v. Granada Bioscis., Inc., 124 S.W.3d 167, 172 (Tex. 2003). Less than a scintilla of evidence exists when the evidence is so weak as to do no more than create a mere surmise or suspicion of a fact. Forbes, 124 S.W.3d at 172. More than a scintilla of evidence exists if it would allow reasonable and fair-minded people to differ in their conclusions. Id. As with a traditional summary judgment, we view the evidence in the light most favorable to the non-movant, disregarding all contrary evidence and inferences. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003).

If the trial court has granted summary judgment without specifying the ground or grounds relied on for the ruling, summary judgment will be affirmed on appeal if any of the theories advanced is meritorious. See State Farm Fire & Cas. Co. v. S.S., 858 S.W.2d 374, 380 (Tex. 1993).

Premises Liability

It is undisputed that Lofton was T.J. Maxx’s invitee. As such, T.J. Maxx owed her a duty to exercise reasonable care to protect her from dangerous conditions in the store, known or discoverable by T.J. Maxx. See Wal-Mart Stores, Inc. v. Gonzalez, 968 S.W.2d 934, 936 (Tex. 1998). However, an owner-operator’s duty toward its invitee does not make the owner-operator an insurer of the invitee’s safety. Id. To recover damages in a slip-and-fall case, a plaintiff must prove:

(1) Actual or constructive knowledge of some condition on the premises by the owner-operator;
(2) That the condition posed an unreasonable risk of harm;
(3) That the owner-operator did not exercise reasonable care to reduce or eliminate the risk; and
(4) That the owner-operator’s failure to use such care proximately caused the plaintiff’s injuries.
Gonzalez, 968 S.W.2d at 264; Corbin v. Safeway Stores, Inc., 648 S.W.2d 292, 296 (Tex. 1983).

The owner-operator is considered to have constructive knowledge of any premises defects or other dangerous conditions that a reasonably careful inspection would reveal. Corbin, 648 S.W.2d at 295.

Because an invitee’s suit against a premises owner-operator is a simple negligence action, the standard of care required of the owner-occupier toward its invitees is the ordinary care that a reasonably prudent person would exercise under the same or similar circumstances. Id. at 295. The owner-operator’s liability to an invitee depends, not on whether a specific set of facts or a specific breach of duty is established, but, on whether the owner-operator acted reasonably in light of what it knew or should have known about the risks associated with the condition on the premises. Id.

The core of the duty depends on actual or constructive knowledge of an unreasonably dangerous condition. CMH Homes, Inc. v. Daenen, 15 S.W.3d 97, 101 (Tex. 2000).

Lofton argues that T.J. Maxx had constructive knowledge of the mat’s placement in front of the exit door because one of its employees had put the mat there. T.J. Maxx responds that “knowledge that it had placed a floor mat in its foyer is not knowledge that the floor mat presented a hazard.”

We agree.

Lofton presented no evidence that T.J. Maxx had received prior complaints or that the floor mat or its location created an unreasonably dangerous condition. Lofton’s affidavit created some evidence that she tripped on the mat in the T.J. Maxx store, but she offered no evidence that anyone had previously tripped on the mat, that the mat had any defects, that the type of mat was unusual, or that its particular construction and placement should have suggested to T.J. Maxx that it presented a prohibitive degree of danger. See Seideneck v. Cal Bayreuther Assocs., 451 S.W.2d 752, 754–55 (Tex. 1970). Accordingly, there was no evidence that the mat presented an unreasonable risk of harm.

We overrule Lofton’s sole issue.Conclusion

We affirm the judgment of the trial court.

George C. Hanks, Jr.
Justice

Panel consists of Justices Nuchia, Hanks, and Higley.

City of Houston's appeal in firefighter suit fails

Houston Court of Appeals upholds fine against City for failure to promptly implement decision favorable to fire fighter in compensation grievance. City's claim of sovereign immunity rejected in opinion written by Justice Hanks.

City of Houston v. Hildebrandt No. 01-06-00936-CV (Tex.App.- Houston [1st Dist.] Feb. 28, 2008)(Hanks) (firefighter law suits, UDJA, declaratory judgment, statutory penalty, construction of statute, authority of hearing examiner)
Opinion by Justice Hanks
Panel composition: Justices Sam Nuchia, George Hanks and Laura C. Higley
Case style: City of Houston vs. Alan Hildebrandt
Appeal from 165th District Court of Harris County (Judge Elizabeth Ray)
Dispostion: Judgment for firefighter affirmed
OPINION BY JUSTICE GEORGE HANKS

The City of Houston (“the City”) appeals the trial court’s judgment denying its request for declaratory judgment and awarding Alan Hildebrandt $24,000 in statutory penalties. On appeal, the City presents three issues, arguing that the trial court improperly: (1) awarded statutory penalties to Hildebrandt because there is no evidence to support the award, (2) denied its request for declaratory judgment, and (3) granted Hildebrandt’s request for declaratory judgment. We affirm.

Background

Following surgery, Alan Hildebrandt, a fire fighter with the Houston Fire Department, began using the sick leave that he had accumulated over his 30 years working in a Fire Department suppression unit. After being on sick leave for 90 consecutive days, Hildebrandt was transferred from his suppression unit to a position with a five-day work schedule.

Pursuant to Fire Department policy, after a member has been on sick or injury leave for 90 days,he is transferred to a position with a five-day work schedule.

The parties agree that this transfer caused Hildebrandt to utilize his sick leave faster than when he was a member of the suppression unit.

Hildebrandt filed a step I grievance, See Tex. Local Gov’t Code Ann. § 143.128 (Vernon 2008) (describing the procedures a firefighter must follow to file a step I grievance and the subsequent obligations of a municipality) requesting that he be allowed to use his sick leave on the same schedule as it was accrued. After his step I grievance was denied, Hildebrandt filed a step II grievance, See Tex. Local Gov’t Code Ann. § 143.129 (Vernon 2008) (describing how a fire fightercontinues the grievance procedure if he finds the proposed solution from his step I grievanceunacceptable and the municipality’s burden once a step II grievance is properly filed) which was also denied. He then submitted a written request to appeal his step II grievance to an independent hearing examiner. See Tex. Local Gov’t Code Ann. § 143.129 (d) (explaining that, if the proposed solutionfollowing a step II grievance is unacceptable, a fire fighter may request an independent hearingexaminer pursuant to section 143.057 or continue to a step III grievance).

After a hearing, the hearing examiner ordered the City to restore Hildebrandt’s sick leave level to the amount it would have been had he remained on a suppression unit.

The hearing examiner’s award noted that “it is left to the parties to work out the exact amount tobe restored to Hildebrandt’s account.”

The City appealed the hearing examiner’s award to a district court, asking for a declaratory judgment that the City is not required to implement the hearing examiner’s award. Hildebrandt brought a counter claim, asserting that he was owed statutory penalties that the City incurred by intentionally failing to implement the hearing examiner’s decision in a timely manner. See Tex. Local Gov’t Code Ann. § 143.134(h) (Vernon 2008) (award must be implementedwithin 10 days).

During opening statements in the trial court, the City clarified that it was claiming that the hearing examiner acted without or exceeded his jurisdiction in entering his award. The trial court denied the City’s declaratory judgment action and awarded Hildebrandt $24,000 on his counter claim. The City now appeals.

Declaratory Judgment

In its second issue, the City argues that the trial court erred in denying its motion for declaratory judgment “because the Fire Chief is statutorily entitled to assign members and to make policy relating to absences from work.”

Hildebrandt asserts that the City actually challenges whether the hearing examiner ignored the FireChief’s right to transfer members of the Fire Department. Hildebrandt contends that such anargument is foreclosed, because the City can only appeal a hearing examiner’s award on “groundsthat the arbitration panel was without jurisdiction or exceeded its jurisdiction or that the order wasprocured by fraud, collusion, or other unlawful means.” Tex. Local Gov’t Code Ann. §143.057(j) (Vernon 2008); see City of Houston v. Clark, 197 S.W.3d 314, 324 (Tex. 2006); City ofPasadena v. Smith, __ S.W.3d __, 2006 WL 2640410, at *3–4 (Tex. App.—Houston [1st Dist.] Sept.4, 2006, pet. denied, rehearing on pet. filed, Jan. 23, 2008). Hildebrandt contends that the City’sappeal fails because it does not concern the hearing examiner’s jurisdiction.
In Smith, we held that, because it was not arguing that the hearing examiner exceeded hisstatutorily conferred jurisdiction, but rather that he misapplied the law, the City was not affordedthe protection of section 143.057(j). 2006 WL 2640410 at *3–4. Here, however, the crux of theCity’s challenge is that, because “the Fire Chief has the unchallengeable right to assign members,the hearing examiner did not have jurisdiction to enter his award.” Therefore, we address whetherthe trial court erred in denying the City’s motion seeking a declaration that the hearing examiner hadno jurisdiction to enter his award.
Standard of Review

We review declaratory judgments under the same standards as other judgments and decrees. Tex. Civ. Prac. & Rem. Code Ann. § 37.010 (Vernon 1997). We look to the procedure used to resolve the issue at trial to determine the standard of review on appeal. City of Galveston v. Giles, 902 S.W.2d 167, 170 (Tex. App.—Houston [1st Dist.] 1995, no writ). The City’s motion for declaratory judgment required the trial court to interpret the City’s rights and those of the hearing examiner under the Local Government Code. Interpreting statutes is a legal matter, subject to de novo review. Bragg v. Edwards Aquifer Auth., 71 S.W.3d 729, 734 (Tex. 2002). A trial court has no discretion when evaluating a question of law. See Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992). The overriding goal of statutory interpretation is to determine the Legislature’s intent. Cont’l Cas. Co. v. Downs, 81 S.W.3d 803, 805 (Tex. 2002). In order to ascertain legislative intent, we first look to the plain and common meaning of the words used by the Legislature. Tex. Gov’t Code Ann. § 311.011 (Vernon 2005); Argonaut Ins. Co. v. Baker, 87 S.W.3d 526, 529 (Tex. 2002). It is a well-settled rule of statutory construction that every word of a statute must be presumed to have been used for a purpose. In re Bell, 91 S.W.3d 784, 790 (Tex. 2002). In ascertaining legislative intent, we do not confine our review to isolated statutory words, phrases, or clauses, but we instead examine the entire act. Meritor Auto., Inc. v. Ruan Leasing Co., 44 S.W.3d 86, 90 (Tex. 2001).

Analysis

The City directs us to section 143.1095, which states that the head of a fire department may transfer a fire fighter for numerous reasons, including for “any other specified reason the department head considers necessary.” Tex. Local Gov’t Code Ann. § 143.1095(a)(6) (Vernon 2008). Thus, the City argues that the trial court erred in denying its motion for declaratory judgment, because the hearing examiner lacked jurisdiction to enter an award which usurped the Fire Chief’s statutorily prescribed authority to manage the Fire Department.

After his step II grievance was denied, Hildebrandt decided to appeal to an independent hearing examiner pursuant to the provisions of section 143.057. See Tex. Local Gov’t Code Ann. § 143.129. Under subsection 143.057(f), the hearing examiner has the same duties and powers as the Fire Fighters’ Civil Service Commission. Tex. Local Gov’t Code Ann. § 143.057(f); see also City of Houston v. Jackson, 192 S.W.3d 764, 768 (Tex. 2006). This includes the authority to determine whether Chapter 143 and its rules are being obeyed. Tex. Local Gov’t Code Ann. § 143.009 (Vernon 2008). Therefore, hearing examiners are given the power to apply, interpret, and enforce the rules that are contained in the chapter that permits the Fire Chief to transfer fire fighters. See Lindsey v. Fireman’s and Policeman’s Civil Serv. Comm’n, 980 S.W.2d 233, 236 (Tex. App.—Houston [14th Dist.] 1998, pet. denied).

Here, the hearing examiner interpreted section 143.045 and ordered an award based upon his interpretation; therefore, he acted within the jurisdiction afforded him by the Local Government Code. We hold that the trial court did not err in denying the City’s request for declaratory judgment.

We overrule the City’s second issue.

Sovereign Immunity

In its third issue, the City argues that the trial court improperly granted Hildebrandt’s suit for statutory penalties because the claim was barred by sovereign immunity.

Additionally, the City contends that the trial court erred by allowing Hildebrandt to avoid sovereignimmunity by using a declaratory action to claim monetary damages against it. However, the finaljudgment shows that the trial court did not grant Hildebrandt declaratory relief, but, rather, found thathe was entitled to judgment on his counter claim for statutory penalties. Therefore, a declaratoryaction was not used to circumvent the City’s sovereign immunity.

Specifically, the City asserts that Chapter 143 includes no enabling clause allowing for judicial review of Hildebrandt’s claim for statutory penalties.

Standard of Review

As with the City’s second issue, we review interpretation of the Local Government Code de novo. See Bragg, 71 S.W.3d at 734. Additionally, the Texas Supreme Court has consistently held that penal statutes should be strictly construed. See, e.g., Brown v. De La Cruz, 156 S.W.3d 560, 565 (Tex. 2004). Statutes waiving sovereign immunity and statutes waiving governmental immunity are similarly construed. See, e.g., Wichita Falls State Hosp. v. Taylor, 106 S.W.3d 692, 696 (Tex. 2003). “[A] statute shall not be construed as a waiver of sovereign immunity unless the waiver is effected by clear and unambiguous language.” Tex. Gov’t Code Ann. § 311.034 (Vernon Supp. 2007).

Analysis

Hildebrandt responds to the City’s argument by asserting that subsection 143.134(h) clearly and unambiguously allows for a penalty to be pursued against the City. Subsection 143.134(h) provides for a statutory penalty as follows:

If the decision of the commission under Section 143.131 or the decision of a hearing examiner under Section 143.129 that has become final is favorable to a fire fighter, the department head shall implement the relief granted to the fire fighter not later than the 10th day after the date on which the decision was issued. If the department head intentionally fails to implement the relief within the 10-day period, the municipality shall pay the fire fighter $1,000 for each day after the 10-day period that the decision is not yet implemented.
Tex. Local Gov’t Code Ann. § 143.134(h).

In determining whether a statute affords a clear and unambiguous waiver of immunity absent express language to that effect, one interpreting guideline is that a statute must waive immunity “beyond a doubt,” such as “when the provision in question would be meaningless unless immunity were waived.” See Wichita Falls State Hosp, 106 S.W.3d at 697.

Here, the mandatory penalty in subsection 143.134(h) would be meaningless unless the municipality’s immunity were waived. Therefore, because subsection 143.134(h) mandates that a municipality pay a penalty for noncompliance with a hearing examiner’s decision after 10 days, there is a clear and unambiguous waiver of the municipality’s immunity. We also note that the Texas Supreme Court has recently recognized that subsection 143.134(h)applies where a municipality fails to comply with an independent hearing examiner’s decision. Jackson, 192 S.W.3d at 772.

We hold that sovereign immunity did not bar the trial court from determining whether Hildebrandt was owed statutory penalties under subsection 143.134(h).

We overrule the City’s third issue.

Legal Sufficiency

In its first issue, the City argues that the trial court erred in awarding statutory penalties to Hildebrandt because the evidence is legally insufficient to support the trial court’s finding that the Fire Chief intentionally failed to implement the hearing examiner’s award.

Standard of Review

In an appeal of a judgment rendered after a bench trial, the trial court’s findings of fact have the same weight as a jury’s verdict, and we review the legal sufficiency of the evidence used to support them just as we would review a jury’s findings. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994); In re K.R.P., 80 S.W.3d 669, 673 (Tex. App.—Houston [1st Dist.] 2002, pet. denied). When challenged, a trial court’s findings of fact are not conclusive if, as in the present case, there is a complete reporter’s record. In re K.R.P., 80 S.W.3d at 673. When a party who does not have the burden of proof at trial challenges the legal sufficiency of the evidence, we consider all of the evidence in the light most favorable to the prevailing party, indulging every reasonable inference in that party’s favor. Assoc. Indem. Corp. v. CAT Contracting, Inc., 964 S.W.2d 276, 285–86 (Tex. 1998). If there is any evidence of probative force to support the finding, i.e., more than a mere scintilla, we will overrule the issue. Haggar Clothing Co. v. Hernandez, 164 S.W.3d 386, 388 (Tex. 2005).

Analysis

Under subsection 143.134(h), “[i]f the department head intentionally fails to implement the relief” awarded to the fire fighter, the municipality must pay the fire fighter statutory penalties. Tex. Local Gov’t Code Ann. § 143.134(h). The City notes that “department head” is defined in the Local Government Code as “the chief or head of a fire or police department or that person’s equivalent, regardless of the name or title used.” Tex. Local Gov’t Code Ann. § 143.003 (Vernon 2008). Therefore, the City argues that, because there is no evidence that the Fire Chief knew of the award, let alone intentionally failed to implement it, the trial court’s finding is legally insufficient.

We rejected the identical argument in City of Houston v. Jackson. 135 S.W.3d 891, 898 (Tex. App.—Houston [1st Dist.] 2004), overruled on other grounds, 192 S.W.3d 764 (Tex. 2006). “Intent is generally a question of fact,” which “may be proven by circumstantial evidence.” Id. Therefore, in conducting our sufficiency review, we look to see whether there is more than a scintilla of evidence, actual or circumstantial, that the Fire Chief intentionally failed to implement the award within 10 days.

Here, Hildebrandt sent a letter to the City on February 12, informing it that implementation of the award was five days past due, and that subsection 143.134(h) provides for a statutory penalty for noncompliance after 10 days. In the letter, Hildebrandt directed that the Fire Chief be provided a copy of the letter to ensure timely implementation of the award. Nevertheless, the evidence shows that the City did not implement the award until March 3, 34 days after the decision was issued. Therefore, we hold that there was legally sufficient evidence that the Fire Chief intentionally failed to implement the hearing examiner’s award within 10 days. See Haggar Clothing, 164 S.W.3d at 388.

We overrule the City’s first issue.

Conclusion

We affirm the judgment of the trial court.

George C. Hanks, Jr.
Justice

Panel consists of Justices Nuchia, Hanks, and Higley.

Drafting error excused in indemnity contract

Court of Appeals remands case to district court with instruction to grant reformation remedy to correct "scrivener's" error.

Holding: Reformation is a proper remedy when the parties have reached a definite and explicit agreement, understood in the same sense by both, but, by their mutual or common mistake, the written contract fails to express this agreement. Champlin Oil & Ref. Co. v. Chastain, 403 S.W.2d 376, 377 (Tex. 1965). Because the agreement embodies the parties’ intent to apply the express negligence doctrine, but, due to a scrivener’s error, leaves out a few words in the indemnity trigger, the matter must be remanded to the trial court to reform the written contract to conform to the terms of the agreement.

We reverse the trial court’s judgment and remand the cause for the trial court to reform the indemnity trigger in the agreement.

Reece-Albert v. Contractor's Service Co. (Tex.App.- Houston [1st Dist.] Dec. 13, 2007)(Hanks)

In this contractual indemnity case, Reece Albert, Inc. (“Reece”) and Contractor’s Service Company (“CSC”) filed cross-motions for summary judgment. In two issues, Reece appeals the trial court’s grant of CSC’s motion and contends that (1) the trial court erred in ruling that the parties’ indemnity agreement is ambiguous, and, thus, unenforceable, and (2) the words omitted from the “trigger” portion of the indemnity agreement were the result of a scrivener’s error, which can be corrected through the doctrine of reformation. We reverse.

Reece-Albert v. Contractor's Service Co. (Tex.App.- Houston [1st Dist.] Dec. 13, 2007)(Hanks) (indemnity, reformation of contract, mutual mistake)
REVERSE TC JUDGMENT AND REMAND CASE TO TC FOR FURTHER PROCEEDINGS:
Opinion by Justice George C. Hanks, Jr.
Before Justices Taft, Hanks and Higley01-06-00700-CV
Reece-Albert, Inc. v. Contractor's Service Company, Contractor's Service, Ltd., and Contractor's Service, Ltd. f/k/a Contractor's Service Company
Appeal from 133rd District Court of Harris County (Hon. Lamar McCorkle)

Mailbox Rule applied to summary judgment response, but evidence of date of mailing attached to brief on appeal was too late

In the absence of a timely response, no-evidence summary judgment was properly granted by default. Court of Appeals also affirms denial of motion for continuance because diligence in conducting discovery prior to summary judgment hearing was not shown.

Landers v. State Farm Lloyd, No. 06-00181-CV (Tex.App. - Houston [1st Dist.] Dec. 13, 2007)(Hanks) (insurance coverage, home owner's insurance, plumbing leak, water damage to home, expert exclusion, MSJ, MFC)
Before Justices Taft, Hanks and Higley01-06-00181-CV E. Dean Landers and Margaret F. Landers v. State Farm Lloyds and Reuben Quintero
Appeal from 280th District Court of Harris County (Hon. Tony Lindsay)
Disposition: Affirm trial court's no-evidence summary judgment for insurer

O P I N I O N

In this insurance coverage case, the trial court granted State Farm Lloyds’s (“State Farm”) motion to exclude E. Dean and Margaret F. Landers’ (“the Landerses”) experts and then granted State Farm’s no-evidence motions for summary judgment. On appeal, the Landerses contend that the trial court erred (1) in granting the motions for summary judgment because there are genuine issues of material fact, (2) in allowing State Farm’s expert to give new opinions and calculations at the Daubert/Robinson See Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579, 113 S. Ct. 2786 (1993); E.I.du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549 (Tex. 1995) (requiring trialjudges to scrutinize evidence for reliability). hearings that had not been timely supplemented and disclosed before the hearings, (3) in striking the Landerses’ experts from testifying at trial, and (4) in not granting the Landerses’ request for a continuance of the hearing on the motions for summary judgment. We affirm.

Procedural and Factual Background

The Landerses are named insureds under a homeowner’s insurance policy issued by State Farm. In August 2001, the Landerses notified State Farm that their home had suffered structural and cosmetic damage as a result of plumbing leaks. State Farm assigned Reuben Quintero as the adjuster for the claim. State Farm also hired a pipe inspection company and an engineering company to inspect the Landerses’ property and to provide a report to State Farm regarding the cause of the damage to the Landerses’ home. Following the completion of its investigation, State Farm determined that the damage claimed by the Landerses was not caused by a plumbing leak and that State Farm did not have a duty under the Landerses’ homeowner’s policy to pay the claim. The Landerses sued State Farm and Quintero for breach of State Farm’s obligations under the homeowner’s policy, breach of the duty of good faith and fair dealing, fraud, and for violations of the Texas Insurance Code and the Texas Deceptive Trade Practice Act (“DTPA”).

State Farm filed a motion to exclude the opinion testimony of Jim Linehan and Jeffery Lineberger, the Landerses’ two expert witnesses on the issue of causation. After two Daubert/Robinson hearings, the motion was granted, and both Linehan and Lineberger were prevented from testifying regarding the cause of the damage to the Landerses’ home.

Two months later, on November 1, 2005, State Farm filed its “Motion for No Evidence Summary Judgment on All of the Plaintiffs’ Claims and Supplement To the Motion for Summary Judgment on Plaintiffs’ Extra-Contractual Claims.” [State Farm had previously filed a traditional motion for partial summary judgment regarding the Landerses’ extra-contractual claims, which also sought the dismissal of Quintero.] This motion was set to be submitted to the trial court at 8:00 a.m. on November 28, 2005. At 9:20 a.m. on the morning of the submission, the district court clerk received the Landerses’ response to the motion. In addition to complaining of the trial court’s striking of their experts, the response also contains a motion seeking continuance of the submission of State Farm’s motion for summary judgment. The response does not contain a motion for leave to file tardy response.

The next day, the trial court, noting that it had found no response to the motions for summary judgment or motions to be considered by the court, granted State Farm’s motions for summary judgment and dismissed the Landerses’ claims against Quintero. A copy of this order was faxed to the Landerses’ counsel.

Eight days later, on December 7, 2005, the Landerses sent a letter to the trail court advising it that it was in error when it stated in the order that they did not file a response to the motions for summary judgment. They stated that a response was timely filed by certified mail, return receipt requested on November 21, 2005. They also stated that a motion for continuance of the hearing on State Farm’s motion for summary judgment was contained in the response.

Loree also states in the letter that, on November 23, 2005, he sent a draft order to thetrial court regarding his motion for a continuance. A copy of the alleged transmittalletter for this order was attached to the letter. Although the attached letter is datedNovember 23, 2005, it is file stamped as having been received by the clerk’s officeon December 13, 2005— almost three weeks after Loree claims to have mailed it tothe trial court.

The letter to the trial court did not include a certified mail receipt demonstrating a timely post mark or an affidavit verifying the facts alleged in his letter regarding the timeliness of the filing of the response.

The Landerses filed a motion for new trial. Although the motion asserts that the Landerses’ response and motion for continuance were timely filed on November 23, 2005, again, there was no copy of a certified mail receipt demonstrating a timely post mark of the United States Postal Service or an affidavit verifying the facts alleged in the motion regarding the timeliness of the filing of the response. The motion was overruled by operation of law, and this appeal followed.
Although Quintero is named in the style of this appeal, the Landerses do not contestthe trial court’s dismissal of Quintero from this suit.

Summary Judgment

In their first and second issues, the Landerses argue that the trial court erred in granting State Farms’s motions for summary judgment because there was summary judgment evidence creating fact issues with respect to all of the Landerses’ causes of action. We disagree.

Standard of Review

We review summary judgments de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). A no-evidence motion for summary judgment must be granted if, after adequate time for discovery, the moving party asserts that there is no evidence of one or more specified elements of a claim or defense on which the adverse party would have the burden of proof at trial and the respondent produces no summary judgment evidence raising a genuine issue of material fact on those elements. Tex. R. Civ. P. 166(a)(i); LMB, Ltd. v Moreno, 201 S.W.3d 686, 688 (Tex. 2006).

A party who files a no-evidence summary judgment motion pursuant to rule 166a(i) has essentially requested a pretrial directed verdict. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581 (Tex. 2006). When the movant files its motion in proper form, the burden shifts to the nonmovant to defeat the motion by presenting evidence that raises an issue of material fact regarding the elements challenged by the motion. Id. at 582; Weaver v. Highlands Ins. Co., 4 S.W.3d 826, 829 (Tex. App.—Houston [1st Dist.] 1999, no pet.).

Timeliness of the Landerses’ Response

In one pleading, State Farm filed two no-evidence motions for summary judgment. In the motions, State Farm asserts that it is entitled to summary judgment on the Landerses’ breach of contract claim because:

(1) The Landerses have no evidence that any peril or event covered under their policy with State Farm Lloyds was a producing cause of a loss.

(2)The Landerses have no evidence that any peril or event covered under their policy with State Farm Lloyds was a proximate cause of a loss.

(3)The Landerses have no evidence that State Farm Lloyds failed to comply with any of its duties under the homeowner’s policy.

(4)The Landerses have no evidence that any failure by State Farm Lloyds to comply with any of its duties under its contract with the Plaintiffs was a producing cause of damages.

(5)The Landerses have no evidence that any failure by State Farm Lloyds to comply with any of its duties under the homeowner’s policy was a proximate cause of the Landerses’ damages.
State Farm also asserts that, because there was no evidence of causation and no evidence of breach of contract, it had no liability under the Texas Insurance Code.

State Farm also supplemented a previously-filed traditional motion for summary judgment regarding the Landerses’ extra-contractual claims with a no evidence motion on these claims. In the supplement, State Farm asserts that it is entitled to summary judgment on the extra-contractual claims because there cannot be liability under extra-contractual causes of action if, as here, there is no evidence of a breach of the homeowner’s policy by State Farm. In addition, State Farm argues that there is no evidence that the conduct that State Farm allegedly engaged in was extreme or that it produced damages unrelated to or independent of the policy claim.

Pursuant to Texas Rule of Civil Procedure 166a(c), the Landerses had until November 21, 2005, seven days before the hearing on the motions for summary judgment to file either (1) a response to these motions or (2) a motion for leave to file the response out of time. Tex. R. Civ. P. 166a(c). Rule 166a(c) provides, in pertinent part, that, “except on leave of court, the adverse party, not later than seven days prior to the date of the hearing may file and serve opposing affidavits or other written responses.” Tex. R. Civ. P. 166a(c).

The “ mail box” rule of Texas Rule of Civil Procedure 5, applies to responses to motions for summary judgment. Pursuant to this rule, a response, sent to the clerk by first class United States mail on the seventh day prior to the hearing, is deemed timely filed if received by the clerk not more than 10 days after its due date. Tex. R. Civ. P. 5. This rule further states that “a legible post mark affixed by the United States Postal Service shall be prima facie evidence of the date of mailing.” Id. In addition, Texas courts have held that, “in the absence of a proper postmark or certificate of mailing, an attorney’s un-controverted affidavit may be evidence of the date of mailing.” Lofton v. Allstate Ins., 895 S.W.2d 693, 694 (Tex. 1998).

Here, the Landerses’ response to the no-evidence motions for summary judgment was untimely filed. The Landerses did not present the trial court with proof of “a legible postmark affixed by the United States Postal Service” or an affidavit from any competent person establishing that the Landerses’ response to State Farms’s motion for summary judgment was timely mailed. Furthermore, the Landerses did not file a motion for leave to file their untimely response. Under these circumstances, we conclude that the Landerses’ response was filed on the date of the court clerk’s file stamp, November 28, 2005, and the Landerses’ allegations that their response was timely filed are unsupported in the record.

On appeal, the Landerses attach to their reply brief what purports to be a receipt for the delivery of their response to the motions for summary judgment. Attachments of documents as exhibits or appendices to briefs is not a formal inclusion in the recordon appeal. Till v. Thomas, 10 S.W.3d 730, 734 (Tex. App.—Houston [1st Dist.] 1999,no pet.). Therefore, we cannot consider it. Id.

Accordingly, the trial court did not err in granting the pending motions for summary judgment without considering the untimely response. See Atchely v. NCNB Texas Nat’l Bank, 795, S.W.2d, 336, 337 (Tex. App.—Beaumont, 1990, pet. denied) (“Untimely responses to motions for summary judgments are not properly before a trial court at a hearing on such motions.”)

Effect of Untimely Response

The Landerses argue that, even without their response, State Farms’s motions for summary judgment still should have been denied. The Landerses contend that State Farms attached the report of one of their experts, Taylor Sealy, to its earlier-filed traditional motion for partial summary judgment, and Sealy’s report creates a fact issue sufficient to defeat both subsequently-filed no-evidence motions for summary judgment. [The Landerses did not designate Sealy to testify at trial.] We disagree.

Absent a timely response, a trial court must grant a no-evidence motion for summary judgment that meets the requirements of Rule 166a(i). Tex. R. Civ. P. 166a(i). If a nonmovant wishes to assert that, based on the evidence in the record , a fact issue exists to defeat a no-evidence motion for summary judgment, he must timely file a response to the motion raising this issue before the trial court. Id. Before the advent of rule 166a(i), it was well settled that summary judgment could not be rendered based on the default of the opposing party. McConnell v. Southside Sch. Dist., 858 S.W.2d 337, 343 (Tex. 1993); Rizkallah v. Conner, 952 S.W.2d 580, 582–83 (Tex. App.—Houston [1st Dist.] 1997, no pet.). The nonmovant was not required to file a response to defeat the motion for summary judgment because deficiencies in the movant’s own proof or legal theories might defeat the movant’s right to judgment as a matter of law. See City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678 ( Tex. 1979). However, as Texas courts have repeatedly held, the traditional prohibition against summary judgment by default is inapplicable to motions filed under Rule 166a(i). Roventini v. Ocular Scis., Inc., 111 S.W.3d 719, 723 (Tex. App.—Houston [1st Dist.] 2003, no pet.). As the court held in Jackson v. Fiesta Mart Inc.,

On appeal, [nonmovant] argues that the trial court may not grant a summary judgment by default for lack of an answer or response when the movant’s summary judgment proof is legally insufficient. [Nonmovant’s] argument is technically correct when applied to a motion for summary judgment filed under Rule 166a(c). [Movant’s] motion, however, was clearly a no-evidence motion for summary judgment filed under Rule 166a(i), which shifts the burden of raising a genuine issue of material fact to the nonmovant. 979 S.W.2d 68, 71 (Tex. App.—Austin, 1998, no pet.). Accordingly, where as here, the movant has filed a no-evidence motion, identifying the elements as to which there is no evidence, in a form which is neither conclusory nor a general no-evidence challenge, summary judgment must be rendered absent a legally adequate response by the nonmovant. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001); Roventini, 111 S.W.3d at 722. In this case, because the Landerses did not file a timely response, the trial court did not err in granting the no-evidence motions for summary judgment.

We overrule issues one and two.

Motion for Continuance

In issue five, the Landerses assert that the trial court erred in denying their motion for continuance of the hearing on motions for summary judgment. We disagree.

Standard of Review

We review the grant or denial of a motion for continuance for an abuse of discretion. Villegas v. Carter, 711 S.W.2d 624, 626 (Tex. 1986). We will not overrule the trial court’s decision unless the trial court acted unreasonably or in an arbitrary manner “without reference to any guiding rules and principles.” Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991) (quoting Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985)).

The trial court may grant a continuance to a party opposing a motion for summary judgment to permit further discovery if the nonmovant can show the need for such discovery to oppose the motion. Tex. R. Civ. P. 166a(g). A motion for continuance seeking time for discovery must be supported by an affidavit that describes the evidence sought, explains its materiality, and shows that the party requesting the continuance has used due diligence to timely obtain the evidence. Tex. R. Civ. P. 251, 252; see Hatteberg v. Hatteberg, 933 S.W.2d 522, 527 (Tex. App.—Houston [1st Dist.] 1994, no writ). The affidavit of diligence must state with particularity what diligence was used; conclusory allegations of diligence are not sufficient. Gregg v. Cecil, 844 S.W.2d 851, 853 (Tex. App.—Beaumont 1992, no writ). A party who fails to diligently use the rules of discovery is not entitled to a continuance. State v. Wood Oil Distrib., Inc., 751 S.W.2d 863, 865 (Tex. 1988).

As discussed above, the Landerses did not file their motion for continuance until after the deadline had passed for their response. Furthermore, neither the motion nor the affidavit verifying the contents of the motion set forth any facts regarding the Landerses’ diligence in attempting to secure additional expert testimony prior to the deadline to respond to the motion for summary judgment.

The entirety of the Landerses’ motion for continuance states as follows:

Alternatively, Plaintiffs move for continuance so that they can designate another engineer and present evidence that the subject leaks caused damage to Plaintiffs’ home since the court has excluded such evidence from Mr. Linehan and Mr. Lineberger. This continuance would give Plaintiffs the opportunityto present evidence to controvert State Farm’s [sic] no-evidence motion for summary judgment. This continuance is not requested for purposes of delay,but so that justice may be done.

Under these circumstances, we hold that the trial court did not abuse its discretion in denying the motion for continuance. We overrule issue five.

Because we affirm the trial court’s granting of the two motions for summary judgment, we need not reach the remaining issues.

Conclusion

We affirm the trial court’s judgment.

George C. Hanks, Jr.
Justice

Panel consists of Justices Taft, Hanks, and Higley

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


MEMORANDUM OPINION BY JUSTICE GEORGE C. HANKS, JR.

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.

Background

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.

Conclusion

We affirm the judgment of the trial court.

George C. Hanks, Jr.
Justice

Panel consists of Justices Taft, Hanks, and Higley.

Judge Dorfman ascends to the First Court of Appeals

The Honorable Samuel Grant Dorfman, presiding judge of the 129th District Court and occasional professor of law, helps Justices George C. Hanks, Jr. and Jane Bland decide that former fellow civil trial court judge Gary Block (since disgraced) erred in bench trial of commercial contract dispute. Justice Hanks writes opinion reversing Block and rendering take-nothing judgment.

HP/Management Services, Inc. v. Guaranteed Nursing Staff, L.L.C, No. (Tex.App.- Houston [1st Dist.] Nov. 15, 2007) (Opinion by Justice Hanks) (no authority, no agency, no contract, no breach, no recovery - judgment reversed)
Appeal from County Civil Court at Law No 2 of Harris County
Trial court judge: Hon. Gary Michael Block
Appellant's attorney: Maurice E. Klein
Appellee's attorneys: Sean A. Roberts, Wendell Maurice Champion

MEMORANDUM OPINION

After a bench trial, Guaranteed Nursing Staff, L.L.C. (“GNS”), appellee, prevailed on its breach of contract claim against HP/Management Services, Inc. (“HP”), appellant. In eight issues, HP contends that the trial court erred in rendering judgment for GNS because GNS did not file any pleadings against HP and the evidence is legally and factually insufficient to establish that (1) a contract existed between GNS and HP, (2) HP was responsible for any contractual obligation incurred by Hermann Park Manor relating to GNS, and (3) Michael Mileski was acting for or on behalf of HP when he signed the agreement. HP also appeals the award of attorney’s fees. We reverse and render judgment in favor of HP.

Background

Hermann Park Manor, a healthcare facility, entered into a contract with GNS for GNS to provide temporary personnel staffing for the facility. The contract, entitled “Supplemental Staffing Agreement,” was signed by Michael Mileski, as the administrator of Hermann Park Manor, and Helen Royston, as the marketing director of GNS. GNS was not fully compensated for the services it provided under the contract, and it sued the following parties for, among other things, breach of contract: HCCI-Houston, Inc. d/b/a Hermann Park Manor, the owner of Hermann Park Manor; HP, the management company for Hermann Park Manor; and Mileski, the administrator of Hermann Park Manor. GNS proceeded to trial against Mileski and HP.
[The record does not reflect how the claims against defendant, HCCI-Houston, Inc. d/b/a Hermann Park Manor, were resolved.]

At trial, Cynthia Champion, the owner of GNS, gave undisputed testimony that, while she believed that Mileski had signed the Supplemental Staffing Agreement on behalf of Hermann Park Manor, she learned, after this suit had been filed, that Mileski, in addition to being Hermann Park Manor’s administrator, was also HP’s employee at the time that he signed this contract. During Champion’s testimony, the parties stipulated that GNS was owed $16,853.98 in compensation for services that it provided under the contract.

The court also heard testimony from H.P.’s president Douglas Mittleider. Mittleider testified that HCCI owns Hermann Park Manor. He also testified that, pursuant to the Long Term Care Facility Management Agreement between HP and HCCI, HP is responsible for running the day-to-day operations of Hermann Park Manor on behalf of HCCI and for appointing an administrator to serve as the onsite manager of Hermann Park Manor. This agreement nevertheless specifies that HCCI retains ownership and control over the management duties and obligations of Hermann Park Manor.

HP appointed Mileski as the administrator of Hermann Park Manor. Mittleider testified that, although Mileski was an employee of HP, Mileski did not sign the Supplemental Staffing Agreement with GNS on behalf of HP. Mittleider testified that Mileski signed the Agreement on behalf of the facility and its sole owner: Hermann Park Manor and HCCI, respectively. Mittleider further testified that HP (1) did not enter into the Supplemental Staffing Agreement with GNS, (2) did not make any payments to GNS under this Agreement, and (3) did not enter into any vendor contracts while it managed Hermann Park Manor. Mittleider testified that Mileski, as the administrator of Hermann Park Manor, decided which invoices under the Agreement with GNS were to be paid, and that HCCI, not HP would make these payments. No evidence controverted Mittleider’s testimony that Hermann Park Manor was owned by and doing business as HCCI or that the Long Term Care Facility Management Agreement defined the relationship between Mileski, HP, HCCI, and Hermann Park Manor.

The Long Term Care Facility Management Agreement between HCCI and HP was entered into evidence. Under the terms of this Agreement, HP was required to get permission, in writing, from HCCI to contract with any third party on behalf of HCCI involving a value in excess of $10,000. The Agreement also provided that HP would indemnify HCCI if HP breached the Agreement. The Agreement provides in pertinent part that:

1.03 Management of Facility. During the term of this Agreement, [HP] shall on behalf of [HCCI] manage all aspects of the operation of [Hermann Park Manor], including, but not limited to, staffing, accounting, billing, collections, setting of rates and charges and general administration. In connection therewith, [HP] (either directly or through supervision of employees of [Hermann Park Manor]) shall:
. . .

(j) Negotiate and enter into in the name of and on behalf of [HCCI] such agreements, contracts and orders as it may deem necessary or advisable, for the furnishing of services, concessions and supplies for the operation and maintenance of [Hermann Park Manor]; provided, however, that [HCCI] must approve, in writing, any agreement, contract or order, which has a term greater than one (1) year or which requires annual payments of more than $10,000.
. . .
5.09 Costs and Expenses: Indemnity
. . .

(b) [HP] agrees to indemnify and hold [HCCI] and its officers, directors, agents and employees harmless from and against all losses, claims, damages or other liabilities, including without limit, reasonable attorneys fees and the costs and expenses incurred in connection therewith, arising out of or relating to the willful misconduct, breach of contract or gross negligence of [HP], in performing its duties under this Agreement.
Mittleider testified that he did not believe HP had received written approval from HCCI to bind HCCI to the agreement with GNS, which was valued in excess of $10,000.

After the close of evidence, the trial court made the following findings of fact and conclusions of law:

Findings of Fact

1. On December 26, 2001, Defendant, Michael Mileski, an employee of HP Management Services and Administrator of Hermann Park Manor, executed a written contract with Plaintiff Guaranteed Nursing Staff to provide temporary personnel staffing for their local facility. Prior to executing the agreement, Defendants failed to properly disclose that the company could not or would not willingly pay for the services rendered under the contract, within the terms of the agreement. Specifically, prior to entering into the agreement, Defendants concealed the material fact that their business was operating under budget constraints and that they would not make timely payments pursuant to their contractual obligations.

2. From December 26, 2001 until on or about April 22, 2002, Plaintiff provided supplemental staffing services to the Defendant under the executed agreement which provided for payment within 30 days after receipt of the invoice. Clause 5(c), Compensation and Payment, provides “All amounts due to the Agency are due within (30) days from receipt of invoice. Facility will send all payments to the address printed on the Agency invoice.” Defendants requested and accepted the temporary personnel services of the Plaintiff for their healthcare facility and became bound to pay Plaintiff its designated charges, which were reasonable and customary for such services.

3. The account accurately sets forth the services, the dates of services, the hours and prices for the services that the Plaintiff provided Defendant. The account represents the record of the transactions that Plaintiff systematically keeps in the ordinary course of business. Defendants have refused to make full payment for services rendered and the principal balance due Plaintiff on the account is $16,853.98 after allowing for all just and lawful offsets, payments and credits.

4. Subsequent to the execution of the contract, Defendants have failed to perform the terms of the contract without legitimate legal excuse. Defendants have failed to pay Plaintiff for services rendered.

5. As a result of the Defendants’ conduct, Plaintiff found it necessary to employ attorneys. Plaintiff also properly presented its breach of contract claim such that attorneys’ fees are recoverable. Thus, in addition to the damages suffered by Plaintiff, Guaranteed Nursing Staff, L.L.C. has a right to be reimbursed reasonable attorneys’ fees as permitted by law. Although the Court heard no evidence of the reasonableness or amount of attorneys’ fees incurred by Plaintiff, the Court takes judicial notice that Plaintiff’s attorneys have expended time and effort prosecuting this case and that a reasonable fee for the services is $5,000.00.
Conclusions of Law

1. The Court finds Plaintiff has non-suited all claims asserted against HP/Hermann Park., Inc. and are hereby dismissed with prejudice to re-riling. [sic]
2. The Court finds that Plaintiff take nothing by its suit against Defendant Michael Mileski and that Michael Mileski recover his court costs from Plaintiff.
3. The Court finds that Plaintiff recover judgment from Defendant HP Management Service, Inc., on its cause of action for breach of contract only and shall recover the sum of $16,853.98, together with post-judgment interest at the annual rate of 6% until paid.
4. Plaintiff recover prejudgment interest on the judgment at thed [sic] annual rate of 6% from May 2, 2002 to the date of judgment in the sum of $3,167.57.
5. The Court finds Plaintiff recover its attorney fees from HP Management Service, Inc., in the amount of $5,000.
6. The Court finds that all of Plaintiffs court costs be taxed against Defendant HP Management Service, Inc.
7. The Court finds its judgment is final and disposes of all claims and all parties and that relief not expressly given is denied and that the parties are allowed such writs and processes as may be necessary in the collection or enforcement of this judgment.

The trial court awarded GNS $16,853.98 in addition to interest and attorney’s fees.
HP as a Named Defendant

In issue one, HP contends that the trial court erred in rendering judgment for GNS because GNS did not file any pleadings against HP. Specifically, HP alleges that “there were no pleadings on file with the trial court wherein GNS named [HP] as a Defendant or asserted any claim against [HP].” HP further argues that “there were no pleadings in the trial court wherein GNS asserted a breach of contract claim against [HP].” We disagree.

The appellate record includes a copy of GNS’s third amended petition in which it names HP as a defendant. Within the petition, GNS alleges that it suffered damages when the defendants breached the contract by failing to perform the terms of the contract and failing to pay GNS for services rendered. HP did not specially except to the third amended petition. In addition, the record contains a Rule 11 Agreement from HP’s attorney wherein he agreed to accept service on behalf of HP. We overrule issue one.

Breach of Contract

In issues two through six, HP asserts that the evidence is legally and factually insufficient to establish that (1) a contract existed between GNS and HP, (2) HP was responsible for any contractual obligation incurred by Hermann Park Manor relating to GNS, and (3) Mileski was acting for or on behalf of HP when he signed the agreement. In issues seven and eight, HP asserts that there is no evidence to support an award of damages in this case for breach of contract. The crux of HP’s argument is that the evidence is legally and factually insufficient to show that Mileski was acting as an agent of HP and had the authority to bind HP to vendor contracts when he signed the Supplemental Staffing Agreement. Accordingly, HP argues that the trial court erred in finding HP liable for breaching the agreement and for the payment of damages under the court’s conclusions of law three and four. We agree.

Standard of Review

We review de novo a trial court’s conclusions of law and uphold them on appeal if the judgment can be sustained on any legal theory supported by the evidence. BMC Software Belgium v. Marchand N.V., 83 S.W.3d 789, 794 (Tex. 2002); In re Moers, 104 S.W.3d 609, 611 (Tex. App.—Houston [1st Dist.] 2003, no pet.). An appellant may not challenge a trial court’s conclusions of law for lack of factual sufficiency, but we review the legal conclusions drawn from the facts to determine their correctness. BMC, 83 S.W.3d at 794. If the reviewing court finds that a conclusion of law is erroneous but that the trial court rendered the proper judgment, the erroneous conclusion of law does not require reversal. Id. When performing a de novo review, we exercise our own judgment and redetermine each legal issue. Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1998).

In this case, the undisputed facts establish that Mileski did not have actual authority to bind HP to the Supplemental Staffing Agreement as HP’s agent, nor did HP ratify such conduct on its behalf by Mileski. As reflected on the signature blocks provided on the Agreement, Mileski signed the Agreement as the “administrator of Herman Park Manor,” not on behalf of HP. Accordingly, the trial court erred in its legal conclusions that HP was liable for breach of the contract and for the payment of damages to GNS.

Agency Relationship

It is undisputed that GNS did not learn that Mileski was an HP employee until shortly after this suit was filed.

An undisclosed principal is liable for the contracts of its agent only if the agent acted with the principal’s actual authority in making the contract for the principal or the principal ratified the contract. See Latch v. Gratty, Inc. 107 S.W.3d 543, 546 (Tex. 2003)

[In its briefing, GNS does not argue that HP ratified the Supplemental Staffing Agreement onits behalf nor have we found any evidence in the record to support this conclusion. There isno evidence that HP ever acknowledged the Supplemental Staffing Agreement as anagreement between HP and GNS nor was there any evidence that HP has ever asserted anyrights against GNS based on this Agreement. ]

Assuming, without deciding, that Mileski was HP’s agent by virtue of his status as an HP employee, the evidence is legally insufficient to conclude that Mileski had actual authority from HP to bind it to the Supplemental Staffing Agreement.

“Actual authority” is based on manifestations of consent by the alleged principal to the alleged agent, and such authority can be conferred either expressly or by implication. See Intermedics, Inc. v. Grady, 683 S.W.2d 842, 847 (Tex. App.—Houston [1st Dist.] 1984, writ ref’d n.r.e.).

Express authority exists where the principal has made it clear to the agent that he wants the act under scrutiny to be done. City of San Antonio v. Aguilar, 670 S.W.2d 681, 683 (Tex. App.—San Antonio 1984, writ dism’d).

Implied authority exists when appearances justify a finding that the principal authorized the agent’s act; in other words, there is circumstantial evidence of actual authority. Id. at 683–84. Implied actual authority exists only as an adjunct to express actual authority, because implied authority is that which is proper, usual, and necessary to the exercise of the authority that the principal expressly delegates. Behring Int’l, Inc. v. Greater Houston Bank, 662 S.W.2d 642, 649 (Tex. App.—Houston [1st Dist.] 1983, writ dism’d by agr.); Employers Cas. Co. v. Winslow, 356 S.W.2d 160, 168 (Tex. Civ. App.—El Paso 1962, writ ref’d n.r.e.).

In this case, there is no evidence of express or implied actual authority for Mileski to sign the Supplemental Staffing Agreement on behalf of HP and bind HP to the terms of this contract. Mittleider, the president of HP, testified that Mileski executed the Supplemental Staffing Agreement on behalf of HCCI, the owner of the facility, not HP. Furthermore, it is undisputed that HCCI is doing business as Herman Park Manor and the Agreement expressly bears Mileski’s signature in his capacity as the administrator of Hermann Park Manor, not as an employee of HP. There is also no evidence of what authority Mileski had to bind HP to any contracts with vendors who did business with Hermann Park Manor, which was owned by HCCI. It is undisputed that Mileski never entered into any vendor contracts on behalf of HP while HP managed Hermann Park Manor, and HP never paid any of the invoices from GNS under the Supplemental Staffing Agreement: only Hermann Park Manor’s owner, HCCI, paid them.

Nevertheless, GNS argues that because (1) Mileski was an HP employee at the time he signed the Supplemental Staffing Agreement; (2) GNS was directed to make its billing inquiries through HP, as administrator of the facility; (3) Mileski made the decision as to which bills to submit to HCCI, as owner, for payment, and HP forwarded payments for GNS’s invoices from HCCI to GNS; and (4) HP and HCCI are located in the same city in Georgia, there is sufficient evidence of actual authority to bind HP to the Supplemental Staffing Agreement.

We disagree.

These facts establish Mileski’s and HP’s status as agents for HCCI under the Long Term Care Facility Management Agreement. They do not, however, establish that Mileski signed the Agreement on behalf of HP or that he had authority to bind HP to the terms of the Agreement, particularly where the Agreement expressly states that he did so on behalf of Hermann Park Manor, a facility owned by HCCI.

Next, GNS argues that Mileski’s apparent breach of the Long Term Care Facility Agreement by entering into the Supplemental Staffing Agreement, without HCCI’s permission, for an amount in excess of $10,000 is sufficient evidence to show implied actual authority to enter into the agreement on behalf of HP. We disagree. Absent evidence of Mileski’s authority to contract on behalf of HP, or of whether Mileski ever had express authority or exercised any authority to bind HP, this evidence cannot establish implied actual authority. See Behring Int’l, Inc., 662 S.W.2d at 649; Employers Cas., 356 S.W.2d at 168 (holding that, for implied authority to exist, there must be some evidence concerning what authority had been given to agent).

Finally, HP argues that, because Mileski never disclosed to GNS that he was an employee of HP or that Hermann Park Manor was owned by HCCI, under “an undisclosed principal theory,” HP is liable for payment due under the Supplemental Staffing Agreement. GNS’s reliance on the holdings in Posey v. Broughton Farm Co., 997 S.W.2d 829, 832 (Tex. App.—Eastland 1999, pet. denied) and Hideca Petroleum Corp. v. Tampimex Oil International, Ltd., 740 S.W.2d 838, 841 (Tex. App.—Houston [1st Dist.] 2003, no pet.), for this argument is misplaced.

These cases stand for the proposition that, if an agent fails to disclose its principal, the agent is liable for the contract it enters into with third parties. As noted above, an undisclosed principal is only liable for the contracts entered into by its agents with the actual authority of the undisclosed principal or if the undisclosed principal subsequently ratifies the contract. See Latch, 107 S.W.3d at 546.

Here, this was not the case.Assuming, without deciding, that Mileski was an agent of HP by virtue of his employment with HP, the evidence is legally insufficient to establish that he had actual authority to sign the Agreement on behalf of HP or bind HP to the terms of the Agreement, where he did so expressly on behalf of Hermann Park Manor, owned by HCCI, but not HP.

Accordingly, the evidence is legally insufficient to establish that (1) a contract existed between GNS and HP, (2) HP was responsible for any contractual obligation incurred by Hermann Park Manor relating to GNS, and (3) Mileski acted for or on behalf of HP when he signed the agreement of the facility.

The trial court thus erred in concluding that HP was liable for breach of the contract to GNS, and we sustain issues two through six. Because we hold that there is insufficient evidence of liability for breach of contract, we do not need to reach points of error seven and eight regarding the trial court’s damage award.

Conclusion

We reverse and render judgment that GNS take nothing from HP.

R. C. Jones v. Rustin Transportation Co. (Tex.App.- Houston, Aug. 2, 2007)

R. C. Jones, Superior Waste Management Services, Inc., and JTI Contractors, Inc. v. Rustin Transportation Company, L.P, No. (Tex.App.- Houston [1st Dist.] Aug. 2, 2007)(Opinion by Justice Hanks)(jury argument)(Before Justices Jennings, Hanks and Higley)
Appeal from 295th District Court of Harris County
Trial court judge: Hon. Tracy Christopher

O P I N I O N

This is an appeal from a final judgment rendered on a jury verdict in favor of appellees, Republic Waste Services of Texas, Ltd. ("Republic") (1) and Rustin Transportation Company, L.P. ("Rustin"), in a breach of contract and fraud action brought by appellants, R.C. Jones, Superior Waste Management Services, Inc. ("Superior"), and JTI Contractors, Inc. ("JTI"). In two issues, appellants contend that (1) as a matter of law, the evidence is insufficient to support the jury's verdict that Rustin, Republic's subcontractor, did not breach its subcontracts with them by failing to pay them certain rate increases for hauling trash and (2) the trial court erred in denying their motion for new trial on the ground that Rustin's trial counsel engaged in improper and incurable jury argument. We affirm.

Background

In 1999, the City of Houston began soliciting bids for a long-term contract for disposal of its trash. The proposed 20-year project called for: (1) the construction and operation of two City-owned transfer stations, one in southwest Houston (the Westpark transfer station) and another in southeast Houston (the Lawndale transfer station) and (2) the hauling of trash from these transfer stations to a landfill for disposal. Republic was the low bidder on the City of Houston waste disposal contract. The City estimated Republic's bid amount for the 20-year contract to be $295 million.

All city contracts up for bid must comply with the City's Minority and Women Business Enterprises ("MWBE") Program. Before being awarded a contract, a city contractor must submit an MWBE participation plan, along with either executed subcontracts or letters of intent for each MWBE subcontractor. For the proposed City contract at issue, the City set the MWBE participation requirement as follows: "at least 30% of the total value of all construction subcontracts or supply agreements" and "contracts or supply agreements in at least 20% of the remaining value of this Agreement."

Republic subcontracted all transfer station waste loading and hauling to Rustin, which operates every transfer station in the City of Houston. Ted Meyer, Republic's area president, and Donald Poarch, Rustin's owner, agreed that Rustin, which is not an MWBE, would subcontract with MWBEs to meet the MWBE requirement. Superior, which is owned by R.C. Jones, an African-American, and JTI, which is owned by Jesse Valeriano, an Hispanic, agreed with Rustin to haul waste to Republic's landfill. Both Jones and Valeriano signed blank letters of intent. They understood that the letters of intent were not themselves the agreements, but merely precursors for more extensive and complete agreements.

Once City Council approved the contract with Republic (the "City Contract"), Republic entered into a subcontract with Rustin. The Republic subcontract provided for yearly rate adjustments pursuant to a formula set forth in the City Contract.

JTI and Superior each signed a set of three subcontracts (the "Rustin subcontracts") to perform hauling work at the two City of Houston transfer stations, Westpark and Lawndale. The Rustin subcontracts also provided for yearly rate adjustments "for the applicable year" but did not define that term.

Westpark and Lawndale were scheduled to open in July 2000. However, Westpark did not open until March 9, 2001, and Lawndale did not open until October of that year. Until the Westpark and Lawndale transfer stations opened, JTI and Superior agreed with Rustin to perform hauling work out of other privately-owned transfer stations operated by Rustin including the Sommermeyer/290, Sam Houston, and Friendswood transfer stations.

When the Westpark transfer station opened, Superior took both of its trailers there, and JTI also began hauling from Westpark, although it hauled mostly from the Sommermeyer transfer station. The Rustin subcontracts paid Superior and JTI an initial rate of $5.25 per ton to work out of Westpark and Lawndale. However, at Westpark, Superior's costs were $6.06 per ton and JTI's costs were $6.78 per ton. At the contracted rate of $5.25 per ton, Superior and JTI were losing money working at Westpark and Lawndale.

Jones recognized that Superior was losing money at Westpark, and he requested a contract directly from Republic's president, Bill Linthicum. Linthicum testified that Jones complained that "his drivers weren't being treated fairly to be allowed to get the same number of loads that the . . . Rustin drivers were." Rustin allowed Superior to send one of its trailers back to the more profitable Friendswood transfer station. Both Linthicum and Jones exchanged proposed contracts that proved unacceptable to the other. Jones took his concerns to the Mayor's Office of Affirmative Action and Contract Compliance. Jones was told by the City that, once the Lawndale transfer station opened, he needed to have both of his trucks running from the Lawndale and Westpark transfer stations.

Faced with this dissatisfaction from Superior, Republic and Rustin reviewed their records and discovered that JTI had been overpaid $1.81 per ton for the first four months that Westpark was open, from March 2001 through June 2001. After the overpayment was discovered, Poarch, Rustin's owner, asked Valeriano, JTI's owner, to meet Republic's new area president, Linthicum, to discuss JTI's profitability. Valeriano told them that he was making money. On July 1, 2001, Rustin adjusted the rate that JTI was paid to conform with the figures in the Rustin subcontracts.

When the Lawndale transfer station opened in October 2001, Superior realized that it could not make money hauling from there, either. By the end of the next month, Superior ceased operations and sued Republic asserting a number of legal theories, all based on a purported contractual and/or partnership relationship arising out of the letters of intent.
While the litigation was ongoing between Superior and Republic, Republic and Rustin asked Valeriano to prepare a profit and loss statement for the individual transfer stations. Valeriano responded that he could not separate it by transfer station. Instead, he spent 10 minutes preparing a profit and loss statement and determined that he was making money on the Rustin work. (2)

One month later, Superior's counsel deposed Valeriano in conjunction with the Superior case against Republic and questioned him at length about the financial statement that he had prepared. Based on the questions he answered during his deposition, Valeriano "felt like [his] price increases hadn't been paid; and in going through that financial statement that [he] had produced, [he] realized that maybe [he] wasn't making money at Westpark like [he] had originally thought [he] was." Valeriano's CPA discovered that JTI was losing money at Westpark and had been underpaid approximately $160,000 in Consumer Price Index ("CPI") rate increases. Valeriano also discovered that he was not getting a 10% participation in the MWBE contract. After an investigation by Rustin in response to JTI's claims, Rustin issued two checks totaling more than $65,000 to one of Valeriano's trucking entities. Because Valeriano cashed the checks and stopped hauling from the City transfer stations, Rustin believed that the matter was settled. Valeriano notified Rustin that he was terminating his performance under the Rustin subcontracts, but would continue to haul from Sommermeyer.

JTI, who was represented by the same attorney who represented Superior, subsequently intervened in Superior's suit against Republic, and Rustin was brought in as a co-defendant. The parties appeared for trial. During closing argument, Rustin's trial counsel alluded to how appellants' theory of the case was merely a "lawyer's construct" and how Valeriano changed his testimony after meeting with Superior's attorney. After a nearly three-week long trial, the jury rendered a verdict for Republic and Rustin finding that there was no agreement for Superior or JTI to have a 10% participation in the City Contract; that there was no fraud by Republic in signing the letters of intent; and that Rustin had not breached its subcontracts. Superior and JTI filed a motion for new trial and for judgment notwithstanding the verdict that was denied by the trial court.

CPI Adjustments

In their first issue, appellants contend that they are "entitled to judgment against Rustin on the CPI claims because the unambiguous contracts should be interpreted by the court, and the damages are liquidated and undisputed." (3) We disagree.

Standard of Review

A judgment notwithstanding the verdict ("JNOV") is proper when a directed verdict would have been proper. Tex. R. Civ. P. 301; Fort Bend County Drainage Dist. v. Sbrusch, 818 S.W.2d 392, 394 (Tex. 1991). A motion for JNOV should be granted when (1) the evidence is conclusive and one party is entitled to recover as a matter of law or (2) a legal principle precludes recovery. Mancorp, Inc. v. Culpepper, 802 S.W.2d 226, 227 (Tex. 1990); John Masek Corp. v. Davis, 848 S.W.2d 170, 173 (Tex. App.--Houston [1st Dist.] 1992, writ denied). We review the denial of the appellants' motion under the legal sufficiency standard. See Brown v. Bank of Galveston, 963 S.W.2d 511, 513 (Tex. 1998); CDB Software, Inc. v. Kroll, 992 S.W.2d 31, 35 (Tex. App.--Houston [1st Dist.] 1998, pet. denied).

In a legal-sufficiency review, a court should look at all the evidence in the light most favorable to the finding to determine whether a reasonable trier of fact could have formed a firm belief or conviction that its finding was true. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). To give appropriate deference to the factfinder's conclusions and the role of a court conducting a legal sufficiency review, looking at the evidence in the light most favorable to the finding means that a reviewing court must assume that the factfinder resolved disputed facts in favor of its finding if a reasonable factfinder could do so. Id. A corollary to this requirement is that a court should disregard all evidence that a reasonable factfinder could have disbelieved or found to have been incredible. Id. This does not mean that a court must disregard all evidence that does not support the finding. Id.

Analysis

The jury answered the following questions pertaining to Rustin:
Question 9
Did Rustin fail to comply with the contracts between Superior and Rustin in payment of CPI increases?
It is your duty to interpret the following language of the signed agreements between Rustin and Superior:
"The transportation rate for the applicable Contract Year shall be adjusted . . . ."
You must decide its meaning by determining the intent of the parties at the time of the agreement. Consider all the facts and circumstances surrounding the making of the agreement, the interpretation placed on the agreement by the parties, and the conduct of the parties.
Answer "Yes" or "No":
Answer: [No]

Jury Question 19 simply replaced "Superior" with "JTI," but was otherwise verbatim. The jury answered Jury Question 19 "No" as well.
Superior and JTI each signed a set of three hauling subcontracts with Rustin. Exhibit "A" to each subcontract called for a rate adjustment for "the applicable Contract Year," but did not define that term. Although appellants suggest that we should construe the various contracts at issue as a matter of law, the trial court evidently found language in these contracts ambiguous. In the jury charge, the trial court submitted an instruction that the jury "must decide [the contract's] meaning by determining the intent of the parties at the time of the agreement." See J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003) (ambiguous contract creates a fact issue on the parties' intent). Although appellants find it significant that Rustin did not plead ambiguity, a court may conclude that a contract is ambiguous even in the absence of a proper pleading by either party. Id. at 231.

Section 6.03 of the City Contract provides for the adjustment of rates "[b]eginning July 1, 2001 and each subsequent July 1, thereafter," in accordance with the CPI formula set forth in Exhibit "H" to the contract. Appellants contend that the Rustin subcontracts should be read together with the City Contracts to ascertain the parties' intent. All six of the Rustin subcontracts were executed at the same time and all say the same thing: Superior's and JTI's rates for the "applicable Contract Year" shall be adjusted using the formula set forth in Exhibit "A." Appellants argue that the language in Exhibit "A" of the Rustin subcontracts "exactly mirrors" the language in Exhibit "H" of the City Contract. Appellants suggest that the Rustin subcontracts should be read in conjunction with the City Contract, which, under its operative provisions, includes a July 1, 2001 effective date for CPI adjustments.
Exhibit "A" to the Rustin subcontracts provides, in part, as follows:

Cost Adjustment for Transportation Rate:

The transportation rate for the applicable Contract Year shall be adjusted by the cumulative percent determined as follows:
0.30 times the Labor Index for the applicable Contract Year divided by the Labor Index for March, 1998; plus
0.30 times the Machinery and Equipment Index for the applicable Contract Year divided by the Machinery and Equipment Index for March 1998; plus
0.40 times the Fuel Index for the applicable Contract Year divided by the Fuel Index for March 1998.

Exhibit "H" to the City Contract provides, in part, as follows:

CPI COST ADJUSTMENT

The disposal rate for the applicable Contract Year shall be adjusted by the cumulative percent determined as follows:
0.20 times the Construction Index for the applicable Contract Year divided by the Construction Index for March 1998;
plus 0.30 times the Labor Index for the applicable Contract Year divided by the Labor Index for March 1998;
plus 0.35 times the Machinery and Equipment Index for the applicable Contract Year divided by the Machinery and Equipment Index for March 1998;
plus 0.15 times the Fuel Index for the applicable Contract Year divided by the Fuel Index for March 1998.
(Emphasis added to note the differences in the two provisions.) Appellants find it significant that both exhibits capitalize "Contract Year." They argue that, if the subcontracts and the City Contract are read together and the rate is adjusted on July 1 of each year, Superior is due $77,204 and, after crediting Rustin for its overpayment on the Sommermeyer/Highway 290 route, JTI is due $160,002. (4)

In contrast, both Rustin's president, Sid Sherwood, and owner, Donald Poarch, testified that its intent was for Superior and JTI to get increases when Rustin received
its increases under Rustin's various contracts. (5) The appellants argue that, if there is an ambiguity, "a possible interpretation of 'applicable Contract Year' is that Superior and JTI were to receive rate adjustments on each route when Rustin received its adjustments from its customers." Using these dates for adjustments, the appellants assert that Superior is due $72,618 and JTI is due $154,987.96.

Finally, appellants state that "the only other interpretation for the 'applicable Contract Year' is that the rate increases were to be paid one year after actual work began on each route." Appellants contend, however, that this interpretation is unreasonable when viewed in light of the context of the other contemporaneous contracts and circumstances. In summary, appellants argue that, under any interpretation, Rustin breached its contracts and failed to pay the adjustments.

Rustin asserts that neither Superior nor JTI was entitled to any adjustments because (1) Superior stopped hauling before any CPI increases became due and (2) JTI "was brought up to date on all its CPI increases in February 2003, after it quit hauling from all but the Sommermeyer transfer station, for which it had been previously overpaid." In June 2001, Poarch's CPA, Jim Pouns, proposed to Republic's president, Bill Linthicum, that Rustin receive a rate increase. Pouns asked for a delay on any increases, and Pouns asked Linthicum what constituted the "applicable Contract Year" for purposes of CPI adjustments under Superior's contracts with Rustin. Linthicum responded via e-mail that he thought the "applicable Contract Year" meant the "initial operating date," which, for the City-owned transfer stations, was March 9, 2001, when the Westpark transfer station was opened. Linthicum's e-mail stated that "I have read the contract between Rustin and Superior, and I interpret the contract year as March 9, 2001, though March 8, 2002. There is nothing in the contract defining 'contract year.' Superior Waste Management stated this contract began on March 9th, 2001, not when the agreement was signed." Accordingly, Linthicum instructed Rustin to prepare for a CPI adjustment for Superior in March 2002, and, as is standard in the trucking industry, only if Superior requested one. (6) Neither Superior nor JTI requested a CPI increase either in July 2001 or March 2002.
Jones's first formal request for a rate increase was in a demand letter sent by his attorney in August 2002 after Superior had already stopped hauling for Rustin. Sid Sherwood, Rustin's president, responded and explained that Superior was not due any adjustments using the base year 2000 because decreases in the fuel index--the most heavily-weighted index under the Rustin subcontracts--offset any increases in other indices. However, Superior's inquiry prompted Sherwood to ask Jim Goodyear to review JTI's numbers to determine if JTI was being paid the proper rate. Using March 1, 2002 as the initial due date for CPI adjustments and the CPI formula in the Rustin subcontracts, Goodyear found that JTI was underpaid on some routes and overpaid on others (namely, Sommermeyer), and he prepared a schedule of price increases for JTI, effective on September 1, 2002.

Goodyear testified that he used the date of March 1, 2002 to calculate the CPI adjustments because that date was the one-year anniversary of the opening of Westpark; in other words, it was the first due date for an adjustment based on a March 1, 2001 "Initial Operating Date." (7) Consequently, Rustin issued two checks to JTI totaling more than $65,000. With respect to Superior, Goodyear indicated that it was not entitled to adjustments because it was no longer hauling for Rustin as of March 1, 2002.

Appellants have presented at least three different versions of how the contract could have been interpreted. Rustin presented evidence from, among others, Jim Goodyear and Bill Linthicum who both testified that it was their understanding and impression that the adjustment date should be March 2002, if requested by JTI and Superior. We must assume that the jury resolved disputed facts in favor of its finding. See City of Keller, 168 S.W.3d at 822. After reviewing the record in the light most favorable to the jury's finding and disregarding all evidence that a reasonable factfinder could have disbelieved or found to be incredible, we hold that the evidence is legally sufficient to support the judgment and the trial court did not err in denying the appellants' motion for directed verdict.
We overrule appellants' first issue.

Incurable Jury Argument

In their second issue, appellants argue that the trial court erred in denying their motion for new trial because "the false accusations against counsel for Superior and JTI that he had suborned perjury" made by counsel for appellees in closing argument, "constitute incurable, reversible error." Appellants argue that "House committed incurable reversible error by accusing John Able (Rustin's trial counsel) of suborning perjury." "Attacks upon the integrity of opposing counsel are categorically prohibited." Appellants further argue that "Ms. House planned this argument. She attempted to plant the seed of some improper conduct by Mr. Able during her cross. She then argued it as fact during her closing argument." Appellants contend that, because the evidence "absolutely establishes that Rustin failed to pay the contracted rate for services to Superior or JTI," it is impossible to conclude that the jury was not influenced by the "outrageous accusation" against Superior and JTI's lawyer. We disagree.

Closing Argument and Motion for New Trial

In closing argument, Republic's counsel commented that "[t]his case is a construction of attorneys, trying to turn a letter of intent into something entirely unintended by any of the parties." Next, Rustin's counsel, Jennifer House, stated

[House]: [Republic's lawyer] alluded to the fact that this case is a lawyer's construct, it is created by lawyers. I am proud to be a lawyer. I take no pride in accusing other lawyers of wrongdoing, but I cannot help but have difficulty with the fact that Rustin never made representations to these minority subcontractors that they were going to be entitled to overall 20 percent participation of $295 million.
. . .
And when [Valeriano] testified in October of 2002 that he was operating profitably from Westpark and Lawndale, he was telling the truth.
Why did the story change, then? Why did the story change? Because he met Mr. Able and Mr. Able said, "Jesse, by the way, did you know under our theory you are entitled to $5 million of profit over 20 years?"
[Able]: Objection, Your Honor. There is no evidence that I told him anything.
[Trial Court]: Sustained.
[House]: Suddenly -- and you heard the testimony. Mr. Able questioned him, and the testimony was he met with Mr. Able after his deposition. Do you know who else he met with? The gentleman sitting in this corner right here, Greg Brown, CPA.
. . .
And I will tell you why he is a party to this lawsuit. Because the couple of hundred thousand dollars that he was going to make or was making with Rustin, vis-a-vis the existing work that he was doing, in his mind was peanuts compared to the $5 million that he was going to ask you for under the trumped up claim that he was entitled to 10 percent of $295 million over 20 years. And that's why the story changed, and that's why we are here.

After nearly three weeks of trial, the case was submitted to the jury on issues primarily relating to whether the Letters of Intent gave rise to a contract between Republic and Superior and/or JTI, whether Republic breached that contract, whether Republic committed fraud in connection with the Letters of Intent, and whether Rustin breached its subcontracts with Superior and JTI to pay CPI increases. By an 11-1 verdict, the jury found in favor of Republic and Rustin on all issues.

Appellants filed their motion for new trial, alleging, among other things, that House's closing argument constituted incurable, reversible error. After significant briefing and two hearings, the trial court denied the motion. In its order, the trial court stated that the court considered the entire record and believes that the evidence supports the jury verdict and was not the result of the improper, inflammatory jury argument made by Jennifer House.

The court has reviewed all of the evidence in the case supporting the jury verdict and finds that there is more than sufficient evidence to support the verdict. The court also notes that the inflammatory argument was of short duration, was not repeated, and an objection to the argument was promptly sustained. There was also evidence that Mr. Valeriano's testimony did change. The court finds that the probability that the jury verdict was grounded on proper evidence is greater than the probability that the verdict was based on the improper argument.
But let there be no doubt that the argument was improper. And although Ms. House in oral argument stated that she "was stunned by the seriousness with which the Court regarded the allegations," the denial of the new trial does not mean that the court condones this type of argument. Attacks on opposing counsel are error. (citations omitted)

In Ms. House's argument she completely concocted a conversation between the plaintiff's counsel, Mr. Able, and the plaintiff, Mr. Valeriano, and implied that Mr. Able suborned perjury. Ms. House stated in closing argument "Why did the story change, then? Why did the story change? Because he met Mr. Able and Mr. Able said, 'Jesse, by the way, did you know under our theory you are entitled to $5 million of profit over 20 years?'"

What is most disturbing is Ms. House's attempt to explain away this made-up conversation. In her brief and in her oral argument before the court she attempted to justify her statement, claiming it was based on questions asked by Mr. Able in a deposition. The court has reviewed the entire deposition of Mr. Valeriano and there is no reference to such a question or statement or meeting. And most certainly there was no evidence before the jury of such a question or statement or meeting. Ms. House continues her misstatements in her briefing. At page 5 of her brief, Ms. House says, "each and every questioned statement made by Ms. House is in the record and is based in fact." There is absolutely no evidence in the record of such a meeting or such a statement.

At oral argument, realizing that the court was skeptical that questions were asked in a deposition would be considered a meeting, Ms. House then argues that Mr. Able and Mr. Valeriano must have met to form the attorney client relationship and that such a meeting could be inferred from the fact that Mr. Valeriano became Mr. Able's client. While undoubtedly there were many meetings between Mr. Able and Mr. Valeriano, (although of course there is no evidence in the record of such meetings) what Ms. House fabricated was the content of such a meeting and the implication that Mr. Able suborned perjury and induced Mr. Valeriano to change his story.

Lawyers, in the heat of battle, do make misstatements of fact and law, and unwarranted personal criticisms. But they should not compound their errors in legal briefs filed after careful reflection. And they should not impugn the rest of their law firm by making an irrelevant argument that "all of my partners were 100% behind my representation."

Standard of Review

We review the denial of a motion for new trial to determine if the trial court abused its discretion. Champion Int'l Corp. v. Twelfth Court of Appeals, 762 S.W.2d 898, 899 (Tex. 1988) (orig. proceeding). A trial court abuses its discretion when it acts in an arbitrary or unreasonable manner or if it acts without reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985).

To obtain reversal of a judgment on the basis of improper jury argument, a complainant must prove (1) an error; (2) that was not invited or provoked; (3) that was preserved at trial by a proper objection, motion to instruct, or motion for mistrial; (4) that was not curable by an instruction, a prompt withdrawal of the statement, or a reprimand by the trial court; and that (5) the argument by its nature, extent, and degree constituted reversibly harmful error. Standard Fire Ins. Co. v. Reese, 584 S.W.2d 835, 839 (Tex. 1979). Reversal is proper only upon a showing that "the probability that the improper argument caused harm is greater than the probability that the verdict was grounded on the proper proceedings and evidence." Id. at 840.

An Error

To obtain reversal, appellants must first prove "an error" that was not "invited or provoked." Id. at 839. Counsel must confine argument "strictly to the evidence and to the arguments of opposing counsel." Tex. R. Civ. P. 269(e). Criticism, censure, or abuse of counsel is not permitted. Appeals to passion and prejudice are improper, as are calls to punish a litigant for the acts of counsel. Tex. R. Civ. P. 269; Tex. Disciplinary R. Prof'l Conduct 3.04 (1990), reprinted in Tex. Gov't Code Ann. tit. 2, subtit G. app. A (Vernon 2005) (Tex. State Bar R. art. X, § 9).
In this case, there was no evidence of any post-deposition meeting between Valeriano and his attorney. House's assertion that Valeriano's testimony changed "because he met Mr. Able and Mr. Able said, 'Jesse, by the way, did you know under our theory you are entitled to $5 million of profit over 20 years?'" and her decision to repeat Republic's statement that this "case is a lawyer's construct" constituted improper jury arguments. See id. House's closing arguments were not confined "to the evidence and to the argument of opposing counsel," and thus violated rule 269(e). No one argues that the error was invited or provoked.

Preservation of Error

Appellants must next prove either that the uninvited error (1) was preserved at trial by a
proper objection, motion to instruct, or motion for mistrial or (2) was not curable by an instruction, a prompt withdrawal of the statement or a reprimand by the trial court. Standard Fire Ins. Co., 584 S.W.2d at 839. If a party is to preserve error, an objection must be made when the improper argument occurs, unless the conduct or comment cannot be rendered harmless by proper instruction. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001). The burden to prove that improper argument was incurable rests on the claimant. See Gen. Motors Corp. v. Grizzle, 642 S.W.2d 837, 845 (Tex. App.--Waco 1982, writ dism'd).

Appellants made one objection to the argument, and the trial court sustained the objection; however, appellants failed to request that the trial court instruct the jury to disregard the argument. Appellants did not request any relief from the trial court regarding these comments until their motion for new trial, after the jury had returned a verdict. Thus, to prevail, appellants must show that the statements constituted incurable jury argument. See Busse v. Pac. Cattle Feeding Fund No. 1, Ltd., 896 S.W.2d 807, 815 (Tex. App.--Texarkana 1995, writ denied) (stating failure to press for instruction at time of erroneous jury argument operates as waiver of any possible complaint about argument).

Improper jury arguments can be either curable or incurable. Otis Elevator Co. v. Wood, 436 S.W.2d 324, 333 (Tex. 1968). A jury argument is "curable" when its harmful effect can be eliminated by instructing the jury to disregard what they have just heard. Id. However, when an argument is so inflammatory that its harmfulness could not be eliminated by an instruction to the jury to disregard it, the prejudicial nature of the argument is so acute that it is "incurable." Id. If an argument is considered to be curable, counsel must make a prompt objection to it and request an instruction, or the error is waived. Id. When an argument is incurable, a failure to object does not result in a waiver, under the reasoning that "counsel making the argument is the offender so the law will not require opposing counsel to take a chance on prejudicing his cause with the jury by making the objection." Id. Whether an argument is incurable depends on "the degree of prejudice flowing from the argument--whether the argument, considered in its proper setting, was reasonably calculated to cause such prejudice to the opposing litigant that a withdrawal by counsel or an instruction by the court, or both, could not eliminate the probability that it resulted in an improper verdict." Id.

Here, to decide whether the jury argument was incurable, we examine the record to determine whether an instruction to disregard House's improper arguments would have sufficiently remedied the harm. See Standard Fire Ins. Co., 584 S.W.2d at 839; Goswami v. Thetford, 829 S.W.2d 317, 321 (Tex. App.--El Paso 1992, writ denied). Only rarely will an improper argument so prejudicially influence the jury that the error cannot be cured. Standard Fire Ins. Co., 584 S.W.2d at 839; see Tex. Employers' Ins. Ass'n v. Guerrero, 800 S.W.2d 859, 862-67 (Tex. App.--San Antonio 1990, writ denied) (holding intentional appeal for verdict based on parties' race or ethnicity is incurable); Howard v. Faberge, Inc., 679 S.W.2d 644, 649-50 (Tex. App.--Houston [1st Dist.] 1984, writ ref'd n.r.e.) (holding demonstration of product's inflammability by counsel's attempt to ignite his arm during closing argument was incurable when experiment was not cumulative of evidence adduced during trial); In re W.G.W., 812 S.W.2d 409, 415-16 (Tex. App.--Houston [1st Dist.] 1991, no writ) (holding in custody dispute that attempt to link mother's cervical cancer to immoral conduct was incurable because there was no evidence to support such connection).

Improper argument regarding the alleged wrongful conduct by a lawyer is not per se incurable. As Texas courts have held, "charges that opposing counsel manufactured evidence, suborned perjury, or was untruthful are highly improper and are generally considered to be incurable." Yoakum, 826 S.W.2d. at 758 (emphasis added). To determine whether a specific instance of accusing opposing counsel of suborning perjury is incurable, we must examine all of the circumstances surrounding the making of the statement to determine if the comment was so inflammatory that its perceived prejudicial effect could not have been cured by an instruction to the jury. Standard Fire Ins. Co., 584 S.W.2d at 840.

Under the facts of this case, House's comments were curable. To preserve error, appellants should have timely objected to the comments and sought an appropriate instruction from the trial court who, after listening to all of the evidence and the offending comments and viewing the jury's reaction to the comments, was in the best position to fashion the appropriate remedy for the transgression and punish counsel for her conduct. Appellants should not have waited until after the jury had returned with its verdict to seek relief for House's clearly improper argument.
While House's comments were reprehensible, the comments were short in duration and occurred at the very end of almost three weeks of trial after the jury had heard all of the evidence, including evidence that clearly contradicted House's accusations of perjury. Although the record indisputably reveals that Valeriano did testify differently when deposed during the suit between Superior and Republic and later when JTI intervened in the suit against Republic and Rustin, Valeriano presented the jury with an arguably legitimate explanation for the change in his position. (8) Thus, the jury could have, with the proper instruction, found House's arguments to be deliberately false and in bad faith. Furthermore, contrary to House's apparent implications, the issue of the changed testimony was not dispositive of the jury's determination of this case. This issue went to appellants' theory of damages, how much appellants were entitled to recover, which the jury never reached per the court's instructions. The changed testimony did not go to the issue of liability that was reached by the jury--whether there was a breach of contract regarding CPI adjustments and the requisite contractual percentage of income that appellants were required to make under their contracts with Rustin. Of particular importance is the fact that at no time did the trial court in any way condone or show approval for the comments in front of the jury and thus its ability to issue a curative instruction was not impaired. See Yoakum, 826 S.W.2d. at 758-59. Appellants' only objection was immediately sustained by the court, and appellants elected not to pursue the matter any further by requesting an instruction to disregard or a reprimand from the court.

Under these facts, House's comments were not so inflammatory that their perceived prejudicial effect would have prevented the jury from following its oath with the proper instructions from the judge. Appellants could have requested the trial court to instruct the jury that "the record does not show any post-deposition meeting or conversations between Mr. Able [appellants' counsel], his retained accounting experts, and Mr. Valeriano and to disregard any reference to such meeting or conversations between any of them." Appellants could have gone further by asking the trial court to instruct the jury that it was improper for House to impute wrongdoing of any kind to appellants' counsel. The trial court, if it had been timely requested to do so, could have also admonished House that any further argument along such lines would result in a mistrial. In this case, the timely request for relief regarding an imaginary post-deposition meeting or conversation would not have prejudiced appellants' case in front of the jury. See General Motors Corp. v. Iracheta, 161 S.W.3d. 462, 472 (Tex. 2005) (held comments before closing arguments made in Spanish by party, not his counsel, directly to a Spanish speaking jury were incurable.)

Appellants' reliance on the holdings in Yoakum and Stephens v. Smith, 208 S.W.2d 689 (Tex. Civ. App.--Waco 1948, writ ref'd n.r.e.) to support the conclusion that House's comments constituted incurable error is misplaced. The facts of those cases are clearly distinguishable from the facts in this case. In both of the cases in which the appellate courts found allegations that counsel manufactured evidence at trial to be incurable, the trial court, by its conduct, erroneously condoned or implied to the jury that the conduct was proper. Accordingly, the trial court's ability to fashion an appropriate instruction was impaired. In Yoakum, not only did the trial court erroneously prevent counsel from arguing that allegations of manufactured evidence by opposing counsel was error, but the offending counsel referred to the trial court's rulings to bolster his allegations in front of the jury. Yoakum, 826 S.W.2d at 758. Likewise in Stephens, the court overruled attempts by opposing counsel to correct the error of counsel's arguments that he "deliberately planted a lie in the mouth of a witness." Stephens, 208 S.W.2d at 691. In other cases cited by appellants, in which allegations that counsel manufactured and/or destroyed evidence were found to be incurable, either additional facts impaired the trial court's ability to give an effective curative instruction, or the length of the improper argument made an effective curative instruction impossible. See Howsley & Jacobs v. Kendall, 376 S.W.2d 562, 566 (Tex. 1964) (held that counsel's comments were incurable when, during closing argument, counsel asked the jury who was more likely to be telling the truth--a man on his deathbed "about to come face to face with his Master" or "a colored boy who had been under the coaching of this battery of lawyers, when he got on there to give words that were not his words."); Montgomery Ward & Co. v. Brewer, 416 S.W.2d 837, 845-48 (Tex. Civ. App.--Waco 1967, writ ref'd n.r.e.) (held as incurable repeated accusations throughout closing argument that opposing counsel had destroyed key evidence as to the issue of liability and the pointing directly to counsel while making these accusations).

Because we hold that the error was curable by an instruction, a prompt withdrawal of the statement, or a reprimand by the trial court, the appellants were required to object, request an instruction to disregard, and request a motion for mistrial. Standard Fire Ins. Co., 584 S.W.2d at 839. By failing to do so, appellants have waived this error. Id. We overrule appellants' second issue.

Harm

Finally, assuming that the error had been preserved, appellants must prove that "the argument by its nature, extent, and degree constituted reversibly harmful error." Id. On appeal, we must evaluate the improper argument in light of the entire case, from voir dire to closing arguments. Luna v. North Star Dodge Sales, Inc., 667 S.W.2d 115, 120 (Tex. 1984). The test is whether a juror of ordinary intelligence would have been persuaded by the improper argument to agree to a verdict contrary to that to which the juror would have otherwise agreed. See Tex. Employers Ins. Ass'n v. Puckett, 822 S.W.2d 133, 136 (Tex. App.--Houston [1st Dist.] 1991, writ denied).
We have reviewed the entire record, and we agree with the trial court's finding that
[t]he court has reviewed all of the evidence in the case supporting the jury verdict and finds that there is more than sufficient evidence to support the verdict. The court also notes that the inflammatory argument was of short duration, was not repeated, and an objection to the argument was promptly sustained. There was also evidence that Mr. Valeriano's testimony did change. The court finds that the probability that the jury verdict was grounded on proper evidence is greater than the probability that the verdict was based on the improper argument.
Accordingly, we hold that the trial court did not err in denying appellants' motion for new trial. See Standard Fire Ins. Co., 584 S.W.2d at 840 (for reversal, must show probability that improper argument caused harm greater than probability verdict grounded on proper proceedings and evidence).
We overrule appellants' second issue.

Conclusion

We affirm the judgment of the trial court.

George C. Hanks, Jr.
Justice
Panel consists of Justices Jennings, Hanks, and Higley.
Justice Jennings, dissenting.

1. During the pendency of this appeal, appellants dismissed Republic from the appeal.
2. Valeriano prepared the financial statement by taking the income that he received from the two transfer stations, calculating that income as a percentage of his total revenue, and then applying that percentage to his costs.
3. While the appellants do not specify the procedural vehicle whereby they preserved their matter-of-law point on appeal, the record reflects that they filed a motion for judgment notwithstanding the verdict ("JNOV") asserting that they were entitled to a JNOV on their contract claim against Rustin for CPI adjustment increases. A legal-sufficiency challenge may be preserved by a motion for directed verdict, a motion for judgment notwithstanding the verdict, an objection to submitting an issue to the jury, a motion to disregard a jury finding on an issue, or a motion for new trial. See Cecil v. Smith, 804 S.W.2d 509, 511 (Tex. 1991); C.M. Asfahl Agency v. Tensor, Inc., 135 S.W.3d 768, 786 (Tex. App.--Houston [1st Dist.] 2004, no pet.).
4. Rustin's CFO, Jim Goodyear, agreed with the calculations from Greg Brown, appellants' accounting expert, based on a July 1, 2001 effective date. However, he took issue with the July 1, 2001 effective date.
5. Sherwood testified that he was under the impression that, when Rustin got a rate increase, JTI and Superior would get an increase, but he changed his understanding when "it was pointed out to me in the contract."
6. Linthicum testified that, "in our business, in the waste hauling business, all CPIs are -- it is the burden of the person contracting the services to request CPIs, whether they are increases or decreases. It is standard in the industry."
7. Westpark actually opened on March 9, 2001, but it was easier to calculate from the first of the month.
8. At trial, Valeriano testified that, when he was deposed, he was under the impression that the Westpark route was profitable. He had not evaluated the various routes separately. Based on the line of questions posed to him during his deposition, he determined that he needed to have an accountant audit the individual routes. He testified at trial that, only after he was able to take the time to do so, he discovered that the Westpark route was not, in fact, profitable.