Opinion
01-21-00352-CV
08-30-2022
AZHAR M. CHAUDHARY, Appellant v. VICTORIA A. MORA AND KRISTIE R. SALTER, Appellees
On Appeal from the 434th District Court Fort Bend County, Texas Trial Court Case No. 18-DCV-254442
Panel consists of Justices Kelly, Goodman, and Guerra
MEMORANDUM OPINION
Peter Kelly Justice
Appellees Victoria A. Mora and Kristie Salter sued appellant Azhar Chaudhary for breach of a residential real estate contract. The trial court granted summary judgment in favor of Mora and Salter, awarding them: (1) damages of $11,950.00; (2) attorney's fees of $21,044.00; and (3) costs of $651.43. In addition, the court incorporated into its final judgment an award of $750.00 in sanctions that had previously been assessed against Chaudhary, but which had not been paid.
On appeal, Chaudhary raises five issues. The first two issues challenge the trial court's grant of summary judgment for the appellees on their breach of contract claim. The third issue challenges rendition of summary judgment in favor of the appellees on Chaudhary's counterclaims. The fourth issue challenges the inclusion of sanctions in the final judgment. And the fifth issue challenges the legal and factual sufficiency to support the award of attorney's fees.
We affirm.
Background
In May 2018, Chaudhary entered into a residential real estate contract to buy a house in Sugar Land, Texas from Mora and Salter. The contracted sales price of the house was $525,000, and in accordance with the contract, Chaudhary deposited $4,500 in earnest money with Capital Title, as escrow agent. The contract specified that the sale would close "on or before July 9, 2018, or within 7 days after objections made under Paragraph 6D [relating to property condition] have been cured or waived, whichever date is later (Closing Date)." The contract also provided: "If either party fails to close the sale by the Closing Date, the non-defaulting party may exercise the remedies contained in Paragraph 15 [Default]."
The parties later amended the contract to change the "on or before" closing date from July 9, 2018 to July 31, 2018. The parties agreed that Chaudhary would deposit an additional "$5,250 of earnest money that is nonrefundable if [Chaudhary] does not close on the home." Chaudhary also agreed to pay Mora and Salter "a per diem holding cost rate of $100 per day for each day of extension beyond July 9th, 2018." The parties agreed that the total per diem would be paid at closing based on the closing date, and, if Chaudhary did not close on the house before July 31, 2018, he would pay Mora and Salter $2,200 within five calendar days of July 31, 2018.
The seller's and buyer's agents also agreed to pay the sellers a per diem of $35 per day, paid at closing, and based on the closing date.
The contract's default provision-Paragraph 15-stated:
If buyer fails to comply with this contract, Buyer will be in default, and Seller may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or (b) terminate this contract and receive the earnest money as liquidated damages thereby releasing both parties from this contract.
The contract's escrow provision-Paragraph18-stated:
C. DEMAND: Upon termination of this contract, either party or the escrow agent may send a release of earnest money to each party and the parties shall execute counterparts of the release and deliver same to the escrow agent. If either party fails to execute the release, either party may make a written demand to the escrow agent for the earnest money. If only one party makes written demand for the earnest money, escrow agent shall promptly provide a copy of the demand to the other party. If escrow agent does not receive objection to the demand from the other party within 15 days, escrow agent may
disburse the earnest money to the party making demand reduced by the amount of unpaid expenses incurred on behalf of the party receiving the earnest money and escrow agent may pay the same to the creditors. If escrow agent complies with the provisions of this paragraph, each party hereby releases escrow agent from all adverse claims related to the disbursal of the earnest money.
D. DAMAGES: Any party who wrongfully fails or refuses to sign a release acceptable to the escrow agent within 7 days of receipt of the request will be liable to the other party for (i) damages; (ii) the earnest money; (iii) reasonable attorney's fees; and (iv) all costs of suit.
The contract also included a mediation provision-Paragraph 16-which stated:
It is the policy of the State of Texas to encourage resolution of disputes through alternative dispute resolution procedures such as mediation. Any dispute between Seller and Buyer related to this contract which is not resolved through informal discussion will be submitted to a mutually acceptable mediation service or provider. The parties to the mediation shall bear the mediation costs equally. This paragraph does not preclude a party from seeking equitable relief from a court of competent jurisdiction.
Chaudhary did not close on the sale of the house by July 31, 2018. On August 1, 2018, the appellees' real estate agent made a demand by email for Chaudhary to sign a release allowing them to collect the $9,750.00 held in escrow and for him to pay the $2,200.00 holding fee. Chaudhary failed to respond, and on August 7, 2018, the appellees' agent again emailed Chaudhary's agent requesting a release of the funds held in escrow and payment of the holding fee. Chaudhary again failed to respond. On August 13, 2018, the appellees' attorney sent, by certified mail, a demand letter to Chaudhary informing him that he was in breach of contract and demanding payment of $13,850.00, which represented the total of the amount held in escrow, the holding fee, and attorney's fees then incurred by the appellees. For a third time, Chaudhary failed to respond.
The agreement stated that the holding fee due if Chaudhary failed to close on the house by July 31, 2018, would be $2,200, but the demand letter asked Chaudhary to pay "the $2,100 holding fee."
On August 27, 2018, the appellees filed suit against Chaudhary for breach of contract. They alleged that Chaudhary had breached the contract in two ways: first, by failing to close the sale of the house by July 31, 2018, and second, by failing to execute the earnest money release and failing to pay the $2,200 holding fee. The appellees sought damages in the amount of $11,950.00, which represented the earnest money and the holding fee, plus additional costs to relist and sell the house, and attorney's fees. In the alternative, the appellees pleaded for specific performance and payment of the $2,200.00 holding fee.
Chaudhary, an attorney, has represented himself in this case and, at times, he has also engaged counsel to represent him. During the litigation, a dispute arose about Chaudhary's discovery responses. On April 2, 2019, the trial court granted the appellees' motion to compel discovery and ordered Chaudhary to respond to the appellees' discovery requests. The court denied the appellees' motion for sanctions at that time. Chaudhary did not comply, and in October 2019, the appellees filed a second motion for sanctions and for contempt of court, which the court set for hearing on December 2, 2019. In this motion, the appellees sought death-penalty sanctions and argued that instead of completely responding to discovery requests as ordered by the court, Chaudhary reurged the same objections that the trial court had previously overruled. On October 15, 2019, the trial court signed an order setting the motion for hearing on December 2, 2019. Seven days before the hearing, Chaudhary filed a motion for continuance, which the appellees opposed. Chaudhary attached to his motion emails showing that on October 10, 2019, he informed appellees' counsel that he was out of the country in November and December 2019 but would be available on specific dates in January 2020. Appellees' counsel replied, informing Chaudhary of a conflicting trial setting in January 2019 and stating: "I do not see a vacation letter filed in this case. Please advise whether we have missed it. If not, then we will set for one [of] the dates we have provided and you are welcome to file a continuance, appear telephonically, or send other counsel in your place, as you have done at prior hearings." The appellees opposed the motion for continuance, calling it "part of a pattern of bad faith and delay," and asserting that Chaudhary did not notify them of upcoming vacations until they attempted to set the motion for hearing and that Chaudhary's "alleged vacation exceeds the length allowed by the Local Rules." Chaudhary did not secure a ruling before the hearing on December 2, 2019. He did not appear at the hearing.
On January 9, 2020, the trial court signed an order finding that Chaudhary had failed to comply with the April 2, 2019 order compelling discovery and found him in contempt of court. The court did not rule on the motion for death penalty sanctions at that time, and it ordered Chaudhary to serve "full and complete responses" to the appellees' discovery requests by January 16, 2020, which was 45 days from the date of the December 2, 2019 hearing. The court's order stated that if Chaudhary failed to comply, the appellees would be entitled to default judgment "pursuant to Tex.R.Civ.P. 215.2(b)." Finally, the trial court found Chaudhary, "in his capacities both as party and counsel," in contempt of court "for his failure to comply with the orders of this Court and for abuse of the discovery process." Also, on January 9, 2020, the trial court signed a separate order granting Chaudhary's motion to continue the December 2, 2019 hearing for 45 days, until January 16, 2020, the date Chaudhary's discovery responses were due.
In June 2020, the appellees filed a motion for default judgment or, in the alternative, a motion for summary judgment. Chaudhary filed a response, arguing that default judgment was inappropriate because he had objected to the challenged discovery requests, and the court had not ruled on his objections. He also noted that the trial court had signed an order continuing the hearing on the appellees' motion for sanctions and contempt until January 16, 2020. He asserted that the hearing was still pending. In addition, he raised several arguments in opposition to the summary-judgment motion. He argued that the appellees had not answered his discovery requests and he needed to depose them to prepare for trial. He argued that the appellees failed to comply with the alleged conditions precedent of mediation and sending demand for the earnest money directly to the escrow agent. He also argued that the appellees breached the contract first by continuing to market the house during his contract period and that they suffered no actual damages. He attached an unsworn declaration as summary judgment evidence, along with discovery requests and responses.
They argued for default judgment based on Chaudhary's incomplete discovery responses. They also sought a traditional summary judgment on their claim for breach of contract, arguing that no genuine issue of material fact existed. They attached the following summary judgment evidence:
1. The original residential real estate contract;
2. The amendment to the original contract;
3. Correspondence between sellers' and buyer's agents in August 2018;
4. Their written demand of August 13, 2018;
5. The court's January 9, 2020 order granting sanctions and holding Chaudhary in contempt of court;
6. Chaudhary's discovery responses dated January 16, 2020;
7. A letter to Chaudhary dated January 17, 2020;
8. Chaudhary's amended responses to requests for admission dated April 23, 2019;
9. Chaudhary's response to their request for disclosure dated November 8, 2018;
10. Victoria Mora's affidavit;
11. The seller's real estate agent's affidavit; and
12. Affidavits from their attorneys.
In his unsworn declaration, Chaudhary stated:
1. My name is Azhar M. Chaudhary. I am over 21 years of age and competent to make this Declaration. My address is . . . 77479 and my date of birth is . . . . I am making this declaration under the penalty of perjury and the facts herein are true and correct based on my personal knowledge.
2. I am making this affidavit in opposition to Plaintiff's motion for summary judgment.
3. I have not received responses to my request for production from Plaintiff.
4. Resultantly, the Defendant [Chaudhary] has not been able to schedule depositions of the Plaintiffs, Victoria A. Mora and her wife Kristie R. Salter.
5. Accordingly, without the benefit of the discovery responses from the Plaintiffs and their depositions, the Defendant has been prejudiced with regard to adequate trial preparation.
6. It is my understanding that the Plaintiffs breached the contract for the sale of the property, subject of the instant suit, by marketing, advertising and actively engaged in offering and selling the property while under contract with Defendant [Chaudhary] to several other buyers and in fact sold the property on 9/27/2018.
7. The Defendant is still waiting to schedule depositions of the Plaintiffs to further develop the reasons for the breach of contract on part of the Plaintiffs and believes that Plaintiffs breached to seek a higher price than contracted for.
8. The Defendant did not breach the real estate contract, subject of the instant suit.
9. The Defendant requested mediation as per the terms of the contract, and Plaintiffs have never agreed to mediate yet.
The appellees replied with summary-judgment evidence showing that they had responded to Chaudhary's discovery requests. They maintained that the January 9, 2020 continuance was effective only as to the sole remaining issue from their motion: their request for death penalty sanctions. They asserted that Chaudhary's argument about alleged conditions precedent was waived because he did not specifically plead this affirmative defense. They noted that Chaudhary had never attempted to schedule their depositions, their actions in marketing the house did not violate any contract provision, and that they suffered contract damages in an amount of $2,200 due to Chaudhary's failure to pay the holding fee and that the contract specified liquidated damages.
The day before the scheduled hearing on the appellees motion for default or summary judgment, Chaudhary amended his answer to include the affirmative defense of failure to satisfy conditions precedent and to plead that the appellees suffered no actual damages. He also added counterclaims for breach of contract and fraud. The hearing was scheduled to be held remotely. The court reset the hearing from November 30, 2020 to January 25, 2021 due to technical difficulties.
The appellees then filed an amended motion for default and summary judgment in order to address the defenses and counterclaims raised by Chaudhary's amended answer. The appellees again argued that summary judgment should be rendered in their favor because their summary judgment evidence proved all elements of their breach of contract claim as a matter of law. As to Chaudhary's failure of condition precedent defense, the appellees argued that the contractual language did not establish mediation as a condition precedent. As to Chaudhary's defense that the appellees had not suffered an actual injury, the appellees noted that this is not an affirmative defense and that the contract specified liquidated damages for default.
The appellees also moved for traditional and no-evidence summary judgment on Chaudhary's counterclaims. The appellees argued that it was undisputed that they did not sell the property until two months after Chaudhary's material breach of failing to close the sale. They also argued that there was no evidence that they breached the contracts. Finally, they argued that Chaudhary had no evidence that appellees made materially false statements to induce him into entering a real estate contract.
Chaudhary filed a supplemental response to the amended motion for summary judgment and a no-evidence and traditional summary judgment. In it, Chaudhary stated that the existence of the contract is not in dispute. He asserted that there was no evidence that the appellees performed or tendered performance, no evidence that he breached the contract, and no evidence that the appellees sustained damages. In his traditional summary judgment motion, Chaudhary alleged that specific performance was impossible because the house had been sold to other people and that the appellees sold the house for more than the contract price. He therefore argued that they had no damages as a matter of law.
In February 2021, before the trial court ruled on the motion for summary judgment, the appellees amended their petition, nonsuiting their claim for specific performance. The appellees responded to Chaudhary's summary-judgment motion with evidence they previously produced with their summary judgment motion.
The associate judge granted the appellees motions for summary judgment as to their claim for breach of contract and Chaudhary's counterclaims. Chaudhary sought de novo review from the trial court, and the trial court again granted summary judgment in favor of the appellees. Chaudhary filed a motion for new trial, which was overruled by operation of law.
Chaudhary appealed.
Analysis
On appeal, Chaudhary raises five issues. In the first two issues, he asserts that the trial court erred by granting summary judgment in favor of the appellees on their breach of contract claim. In his third issue, he contends that the trial court erred by granting no-evidence summary judgment in favor of the appellees on his counterclaims. In his fourth issue, Chaudhary argues that the trial court abused its discretion by assessing discovery sanctions without proper notice and a hearing. And in the fifth issue, Chaudhary asserts that the trial court erred by awarding attorney's fees in the absence of legally and factually sufficient evidence.
I. Standards of review
We review a trial court's summary judgment de novo. Lujan v. Navistar, Inc., 555 S.W.3d 79, 84 (Tex. 2018). In doing so, "we take as true all evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any doubts in the nonmovant's favor." Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). If the trial court does not state the grounds upon which it grants summary judgment, an appellate court will affirm the judgment if any of the grounds set forth by the movant is meritorious. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001).
A. No-evidence motion for summary judgment
A no-evidence motion for summary judgment under Rule 166a(i) is essentially a pretrial motion for directed verdict. Tex.R.Civ.P. 166a(i); Timpte Indus., Inc. v. Gish, 286 S.W.3d 306, 310 (Tex. 2009). After an adequate time for discovery, a party without the burden of proof may, without presenting evidence, seek summary judgment on the ground that there is no evidence to support one or more essential elements of the nonmovant's claim or defense. Tex.R.Civ.P. 166a(i). The motion must specifically state the elements for which there is no evidence. Id.; Timpte Indus., 286 S.W.3d at 310. The trial court is required to grant the motion unless the nonmovant produces summary judgment evidence that raises a genuine issue of material fact. Tex.R.Civ.P. 166a(i).
We review no-evidence summary judgments under the same legal sufficiency standard as directed verdicts. Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248 (Tex. 2013); King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750 (Tex. 2003). Under that standard, evidence is considered in the light most favorable to the nonmovant, crediting evidence a reasonable jury could credit and disregarding contrary evidence and inferences unless a reasonable jury could not. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 756 (Tex. 2007) (per curiam); City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005). A no-evidence challenge will be sustained when
(a) there is a complete absence of evidence of a vital fact, (b) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (c) the evidence offered to prove a vital fact is no more than a mere scintilla, or (d) the evidence conclusively establishes the opposite of the vital fact.King Ranch, 118 S.W.3d at 751 (quoting Merrell Dow Pharms. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)).
To defeat summary judgment, the nonmovant is required to produce more than a scintilla of probative evidence to raise a genuine issue of material fact on the challenged elements. Forbes, Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 172 (Tex. 2003). That burden is not met when the evidence is "so weak as to do no more than create a mere surmise or suspicion" of a fact. King Ranch, 118 S.W.3d at 751 (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)). In determining whether the nonmovant has produced more than a scintilla of evidence, we review the evidence in the light most favorable to the nonmovant, crediting such evidence if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. City of Keller, 168 S.W.3d at 822, 827.
B. Traditional motion for summary judgment
To prevail on a traditional motion for summary judgment, the movant must show that no genuine issue of material fact exists and that it is entitled to judgment as a matter of law. Tex.R.Civ.P. 166a(c); Lujan, 555 S.W.3d at 84. When a plaintiff moves for summary judgment on its own claim, it must prove conclusively all essential elements of its cause of action. See Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); City of Hous. v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979). "If the movant carries this burden, the burden shifts to the nonmovant to raise a genuine issue of material fact precluding summary judgment." Lujan, 555 S.W.3d at 84; see Maldonado v. Maldonado, 556 S.W.3d 407, 414 (Tex. App.-Houston [1st Dist.] 2018, no pet.). The evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions in light of all of the summary-judgment evidence. Goodyear Tire & Rubber Co, 236 S.W.3d at 755.
C. Breach of contract
The elements of a breach of contract claim are: (1) a valid contract, (2) the party suing to enforce the contract performed or tendered performance, (3) the other party breached the contract, and (4) the suing party was damaged as a result of the breach. USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, 501 n.21 (Tex. 2018); Thornton v. Dobbs, 355 S.W.3d 312, 316 (Tex. App.-Dallas 2011, no pet.). "A breach occurs when a party fails or refuses to do something he has promised to do." Mays v. Pierce, 203 S.W.3d 564, 575 (Tex. App.-Houston [14th Dist.] 2006, pet. denied). "It is a fundamental principle of contract law that when one party to a contract commits a material breach of that contract, the other party is discharged or excused from further performance." Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004) (per curiam). "In determining the materiality of a breach, courts will consider, among other things, the extent to which the nonbreaching party will be deprived of the benefit that it could have reasonably anticipated from full performance." Hernandez v. Gulf Grp. Lloyds, 875 S.W.2d 691, 693 (Tex. 1994).
"In construing a contract, a court must ascertain the true intentions of the parties as expressed in the writing itself." Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011) (citing J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003)). In doing so, "we must examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless." Italian Cowboy Partners, 341 S.W.3d 333. We begin this analysis with the contract's express language. Id.; see Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983) ("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.").
II. The trial court properly granted summary judgment in favor of Mora and Salter on their breach of contract claim.
The first two issues challenge the trial court's grant of summary judgment in favor of the appellees on their breach of contract issue. The appellees had the burden to prove conclusively the elements of breach of contract. Specifically, to prevail on summary judgment, they had to prove that: (1) the sales contract and amendment were valid, (2) they tendered performance, (3) Chaudhary failed or refused to do something he promised to do, and (4) they suffered some damages due to Chaudhary's breach of the contract. See USAA Tex. Lloyds Co., 545 S.W.3d at 501 n.21 (elements of breach of contract); Mays, 203 S.W.3d at 575 (defining breach).
A. The first element: existence of a valid contract
The first element is existence of a valid contract. See USAA Tex. Lloyds Co., 545 S.W.3d at 501 n.21. This element is not in dispute. Moreover, the appellees produced the signed contract and amendment as summary judgment evidence. We conclude that the appellees conclusively proved the first breach of contract element.
B. The second element: performance by the appellees
The second element is that the appellees performed in accordance with the contract. See USAA Tex. Lloyds Co., 545 S.W.3d at 501 n.21. Victoria Mora averred in her affidavit that she and Salter performed everything required by the original contract and the amendment and they were ready to tender performance at closing on July 31, 2018. The appellees' real estate agent's affidavit also demonstrated that the appellees performed under the contract. He averred that the appellees performed all their obligations under the contract including obtaining a title commitment. He averred that as July 31, 2018 approached, Chaudhary disappeared and failed to respond to numerous attempts to reach him through his real estate agent, but the appellees stood ready to close the sale on July 31, 2018.
Moreover, a plaintiff may be excused from tendering performance when a defendant refuses to perform under a contract and when such tender of performance would be a useless act. DiGiuseppe v. Lawler, 269 S.W.3d 588, 594 (Tex. 2008). Once Chaudhary failed to appear at closing, no further tender of performance on the part of the appellees was required. Cf. Glass v. Anderson, 596 S.W.2d 507, 513 (Tex. 1980) (holding that buyer's repudiation of contracts to buy real property from seller excused seller from his obligation to tender performance); Chapman v. Olbrich, 217 S.W.3d 482, 492 (Tex. App.-Houston [14th Dist.] 2006, no pet.) (same).
Chaudhary has, however, argued that the appellees failed to comply with contractual conditions precedent of mediation and sending written demand to the escrow agent. In this case, however, neither mediation nor sending a written demand to the escrow agent were conditions precedent to suit on the contract.
"A condition precedent is an event that must happen or be performed before a right can accrue to enforce an obligation." Solar Applications Eng'g, Inc. v. T.A. Operating Corp., 327 S.W.3d 104, 108 (Tex. 2010) (quoting Centex Corp. v. Dalton, 840 S.W.2d 952, 956 (Tex. 1992)); see Hohenberg Bros. Co. v. George E. Gibbons & Co., 537 S.W.2d 1, 3 (Tex. 1976) ("Conditions precedent to an obligation to perform are those acts or events, which occur subsequently to the making of a contract, that must occur before there is a right to immediate performance and before there is a breach of contractual duty."). "[I]f an express condition is not satisfied, then the party whose performance is conditioned is excused from any obligation to perform." Solar Applications, 327 S.W.3d at 108. "In order to determine whether a condition precedent exists, the intention of the parties must be ascertained; and that can be done only by looking at the entire contract." Id. at 109 (quoting Criswell v. European Crossroads Shopping Ctr., Ltd., 792 S.W.2d 945, 948 (Tex. 1990)). "In order to make performance specifically conditional, a term such as 'if', 'provided that', 'on condition that', or some similar phrase of conditional language must normally be included." Criswell, 792 S.W.2d at 948. "While there is no requirement that such phrases be utilized, their absence is probative of the parties intention that a promise be made, rather than a condition imposed." Id. (citing Hohenberg Bros., 537 S.W.2d at 3). "When no conditional language is used and another reasonable interpretation of the contract is possible, 'the terms will be construed as a covenant in order to prevent a forfeiture.'" Solar Applications, 327 S.W.3d at 109 (quoting Criswell, 792 S.W.2d at 948).
Neither the mediation provision nor the escrow demand provision include any conditional language or expressly make Chaudhary's performance or the filing of a lawsuit conditional on the appellees' compliance with those provisions. The mediation provision expressly provides that a party may seek equitable relief from a court of competent jurisdiction. The escrow demand provision uses the words "may make a written demand." This is some evidence that the parties did not intend this provision to be mandatory. As to both the mediation and the escrow demand provisions, it is possible to construe these contractual terms as promises not conditions, and we do so here. See Solar Applications, 327 S.W.3d at 109.
MEDIATION: It is the policy of the State of Texas to encourage resolution of disputes through alternative dispute resolution procedures such as mediation. Any dispute between Seller and Buyer related to this contract which is not resolved through informal discussion will be submitted to a mutually acceptable mediation service or provider. The parties to the mediation shall bear the mediation costs equally. This paragraph does not preclude a party from seeking equitable relief from a court of competent jurisdiction.
C. DEMAND: Upon termination of this contract, either party or the escrow agent may send a release of earnest money to each party and the parties shall execute counterparts of the release and deliver same to the escrow agent. If either party fails to execute the release, either party may make a written demand to the escrow agent for the earnest money. If only one party makes written demand for the earnest money, escrow agent shall promptly provide a copy of the demand to the other party. If escrow agent does not receive objection to the demand from the other party within 15 days, escrow agent may disburse the earnest money to the party making demand reduced by the amount of unpaid expenses incurred on behalf of the party receiving the earnest money and escrow agent may pay the same to the creditors. If escrow agent complies with the provisions of this paragraph, each party hereby releases escrow agent from all adverse claims related to the disbursal of the earnest money. (Emphasis added.)
Chaudhary also argues that the appellees did not timely inform him that they considered the contract terminated under the default provision. Chaudhary did not raise this argument in opposition to the appellees' motion for summary judgment or amended motion for summary judgment. Instead, he raised it for the first time in his motion for new trial. This was not sufficient to preserve this issue for appellate review. See Murray v. Pinnacle Health Facilities XV, No. 01-13-00527-CV, 2014 WL 3512773, at *3 (Tex. App.-Houston [1st Dist.] July 15, 2014, pet. denied) (mem. op.) (holding that summary judgment nonmovant, who raised issue only in motion for new trial, had waived issue for appellate review by not presenting it to trial court in response to summary judgment motion and before trial court's judgment); see Tex. R. Civ. P. 166a(c) ("Issues not expressly presented to the trial court by written motion, answer or other response shall not be considered on appeal as grounds for reversal."); see also Tex. R. App. P. 33.1(a) (as prerequisite for presenting complaint for appellate review, record must show complaint was made to trial court by timely request, objection, or motion). The failure to present an issue to defeat summary judgment in the trial court waives the issue on appeal. D.R. Horton-Tex., Ltd. v. Market Int'l Ins. Co., 300 S.W.3d 740, 743 (Tex. 2009); Murray, 2014 WL 3512773, at *2. Chaudhary has waived this argument for appellate review.
We conclude that the appellees conclusively proved the second breach of contract element.
C. The third element: breach by Chaudhary
The third element is Chaudhary's breach of the contract and amendment. See USAA Tex. Lloyds Co., 545 S.W.3d at 501 n.21. This element has been conclusively proven by the appellees' summary judgment evidence. Under the contract and the amendment, Chaudhary was required to close on the sale of the house by July 31, 2018 and to pay, in addition to the earnest money, a holding fee of $2,200 to the appellees. Mora's affidavit and the affidavit of the appellees' real estate agent demonstrate that Chaudhary failed to close on the sale by July 31, 2018 and failed to pay the appellees the $2,200 holding fee.
Chaudhary nevertheless argues that his unsworn declaration created a genuine question of material fact about whether he breached the contract. In his unsworn declaration, Chaudhary stated: "The Defendant did not breach the real estate contract, subject of the instant suit." This is a conclusory statement because it does not provide the underlying facts to support the conclusion. See Contractors Source, Inc. v. Amegy Bank Nat'l Ass'n, 462 S.W.3d 128, 133 (Tex. App.- Houston [1st Dist.] 2015, no pet.). "Conclusory affidavits are not enough to raise fact issues." Ryland Grp., Inc. v. Hood, 924 S.W.2d 120, 122 (Tex. 1996). "They are not credible, nor susceptible to being readily controverted." Id. (citing Tex.R.Civ.P. 166a(c)). We conclude that Chaudhary's unsworn declaration did not create a genuine issue of material fact about whether he breached the contract.
Chaudhary also argues that the appellees breached the contract before he did by continuing to market the house for sale during the period in which it was contracted to him. Nothing in the sales contract or amendment forbids this; and therefore, his unsworn declaration does not create a genuine question of material fact on this matter.
We conclude that the appellees conclusively proved the third breach of contract element.
D. The fourth element: damages
The fourth element is damages. Ordinarily, when a plaintiff sues for breach of a real estate contract, "the measure of damages is the difference between the contract price and the property's market value at the time of the breach." Barry v. Jackson, 309 S.W.3d 135, 140 (Tex. App.-Austin 2010, no pet.) (citing Kempner v. Heidenheimer, 65 Tex. 587, 592 (1885)). However, the parties' original contract and the amendment provided for liquidated damages.
The original sales contract provided that the earnest money would be liquidated damages if the buyer defaulted on the contract. In addition, a party who failed to execute a release of the escrowed funds would be held liable for damages, the earnest money, reasonable attorney's fees, and costs of suit. The amendment to the original contract stated:
1. Buyer to deposit additional $5250 of earnest money that is nonrefundable if the Buyer does not close on the home.
2. Buyer to pay Seller a per diem holding cost rate of $100 per day for each day of extension beyond July 9th, 2018. The total per diem will be paid at closing and will be based on the closing date. If Buyer does not close on home [sic] or before July 31st, 2018, then the Buyer shall pay the Seller the accumulated cost of the per diem of $2200 (22 days X $100) within 5 calendar days of July 31st, 2018.
"The term 'liquidated damages' ordinarily refers to an acceptable measure of damages that parties stipulate in advance will be assessed in the event of a contract breach." Flores v. Millennium Ints., Ltd., 185 S.W.3d 427, 431 (2005). While Texas favors freedom of contract, the law tempers that policy with the universal rule that breach-of-contract damages are limited to "just compensation for the loss or damage actually sustained." Atrium Med. Ctr., LP v. Hous. Red C LLC, 595 S.W.3d 188, 192 (Tex. 2020) (quoting Stewart v. Basey, 150 Tex. 666, 245 S.W.2d 484, 486 (1952)). "Liquidated damages must not be punitive, neither in design nor operation." Atrium Med. Ctr., 595 S.W.3d at 192. When a liquidated-damages provision is a penalty for failure to comply with a contract, it is unenforceable. Phillips v. Phillips, 820 S.W.2d 785, 788 (Tex. 1991). Whether the liquidated damages provision is enforceable is a question of law. Id.
A party seeking to enforce a liquidated damages provision must demonstrate that (1) damages for prospective breach of the contract are incapable or difficult of estimation and (2) the amount of liquidated damages specified is a reasonable estimate of projected actual damages. Atrium Med. Ctr., 595 S.W.3d at 192; Phillips, 820 S.W.2d at 788; see Chan v. Montebello Dev. Co., No. 14-06-00936-CV, 2008 WL 2986379, at *3 (Tex. App.-Houston [14th Dist] July 31, 2008, pet. denied) (mem. op.). We evaluate both prongs of this test from the perspective of the parties at the time the contract was made. Phillips, 820 S.W.2d at 788; Chan, 2008 WL 2986379, at *3. "The burden is on the party asserting the defense of penalty to demonstrate that the contractual provision is an unenforceable penalty rather than an enforceable liquidated damages provision." Chan, 2008 WL 2986379, at *3.
See also Domizio v. Progressive Cnty. Mut. Ins. Co., 54 S.W.3d 867, 875 (Tex. App.-Austin 2001, pet. denied) ("The burden of proving whether a liquidated damage is a penalty is upon the party seeking to invalidate the clause."); accord Jacobson v. Prodel, No. 06-19-00011-CV, 2019 WL 3720637, at *2 (Tex. App.- Texarkana Aug. 8, 2019, no pet.) (mem. op.); High Rev Power, L.L.C. v. Freeport Logistics, Inc., No. 05-13-01360-CV, 2016 WL 6462392, at *5 (Tex. App.- Dallas Oct. 31, 2016, no pet.) (mem. op.); S. Union Co. v. CSG Sys., Inc., No. 03-04-00172-CV, 2005 WL 171349, at *4 (Tex. App.-Austin Jan. 27, 2005, no pet.) (mem. op.).
Chaudhary did not assert the defense of penalty in the trial court. He did not specifically plead it as an affirmative defense. See Phillips, 820 S.W.2d at 789 (explaining that penalty is a matter in avoidance that must be specifically pleaded under Tex.R.Civ.P. 94). Chaudhary did not raise the affirmative defense of penalty in any summary-judgment response. Though he argues on appeal that the liquidated damages acted as a penalty, this argument has been waived. See Tex. R. Civ. P. 166a(c) ("Issues not expressly presented to the trial court by written motion, answer, or other response shall not be considered on appeal as grounds for reversal."); see also Tex. R. App. P. 33.1 (preservation of error).
Accordingly, we must uphold the summary-judgment award of liquidated damages-the earnest money and the holding fee-if we conclude that the appellees demonstrated that (1) damages for prospective breach of the original contract were incapable or difficult of estimation in May 2018 when the parties entered into the original contract and on July 5, 2018 when they signed the amendment, and (2) the amount of liquidated damages specified was, at the time, a reasonable estimate of projected actual damages. See Atrium Med. Ctr., 595 S.W.3d at 192; Phillips, 820 S.W.2d at 788; see Chan, 2008 WL 2986379, at *3.
"Damages for breach of a contract to buy or sell real estate are 'uncertain and not easily estimated with accuracy.'" Goldman v. Olmstead, 414 S.W.3d 346, 363 (Tex. App.-Dallas 2013, pet. denied) (quoting Chan, 2008 WL 2986379, at *3); Naylor v. Siegler, 613 S.W.2d 546, 547 (Tex. App.-Fort Worth 1981, no writ) ("It is impossible to forecast the damages which might flow to the seller of real property in the event of breach of the contract by the purchasers."); Zucht v. Stewart Title Guar. Co., 207 S.W.2d 414, 419 (Tex. App.-San Antonio 1947, writ dism'd) ("It has been held, time and again, that a provision for liquidated damages in a contract for the sale and purchase of real estate is proper as being a transaction in which the damages for the breach thereof are uncertain and not easily estimated with accuracy."); see also Belfiore Devs., LLP v. Sampieri, No. 01-17-00847-CV, 2018 WL 1161558, at *6 (Tex. App.-Houston [1st Dist.] Mar. 6, 2018, no pet.) (mem. op.) (evidence of uncertainty of real estate market met "difficulty of estimation" prong of the liquidated-damages test). Because the contract at issue was for the purchase and sale of real estate, we conclude that, as a matter of law, the first prong of the liquidated damages test is satisfied.
The second prong is the reasonableness of the liquidated damages. Because we consider the reasonableness of the liquidated damages from the perspective of the time of contract formation, "evidence that a property sold at a later date for the same price, or even at a profit, is no evidence that a provision is an unreasonable stipulation as to contemplated damages." Chan, 2008 WL 2986379, at *4. Here, the appellees' summary judgment evidence demonstrated that the contracted sales price of the house was $525,000 and the total of the earnest money ($4,500 and $5,250) plus the holding fee ($2,200) was $11,950. This is approximately 2% of the contracted purchase price. Courts have held that earnest money was a reasonable estimate of damages when the earnest money was 10% of the purchase price, see Chan, 2008 WL 2986379, at *5, and 16% of the purchase price. See Ashton v. Bennett, 503 S.W.2d 392, 394-95 (Tex. Civ. App.-Waco 1974, writ ref d n.r.e.). We conclude that the earnest money-$11,950-was a reasonable estimate of damages and that the appellees conclusively proved the fourth breach of contract element.
We conclude that the trial court properly granted summary judgment in favor of the appellees. We overrule Chaudhary's first two issues.
III. The trial court properly granted summary judgment in favor of Mora and Salter on Chaudhary's counterclaims.
In his third issue, Chaudhary argues that the trial court erred by granting the appellees' no-evidence motion for summary judgment because he had not had an adequate time for discovery and because the appellees allegedly failed to identify which element they contended had no evidence. His assertion about an inadequate time for discovery is not supported by citation to the record or to legal authorities, and it is waived as inadequately briefed. See Tex. R. App. P. 38.1.
We have already addressed and disposed of Chaudhary's arguments about his counterclaim for breach of contract in our analysis of the trial court's grant of summary judgment on the appellees' breach of contract claim.
Chaudhary also filed a counterclaim for fraud. The elements of statutory fraud are: (1) a transaction involving real estate or stock; (2) during the transaction the other party made a false representation of fact, made a false promise, or benefitted by not disclosing that a third party's representation was false; (3) the false representation or promise was made for the purpose of inducing the party to enter into a contract; (4) the party relied on the false representation or promise by entering into the contract; and (5) the reliance caused the party injury. Tex. Bus. & Com. Code § 27.01; Robinson v. Cason, No. 01-11-00916-CV, 2013 WL 3354651, at *8 (Tex. App.-Houston [1st Dist] July 2, 2013, no pet.) (mem. op.). The appellees asserted that there was no evidence that they made materially false statements to induce him into entering a real estate contract. Chaudhary's summary-judgment evidence did not identify any alleged materially false statement made by the appellees to him in connection with the contract. The trial court properly granted summary judgment in favor of the appellees. See Tex. R. Civ. P. 166a(i). We overrule Chaudhary's third issue.
IV. The trial court did not err by including sanctions in the final judgment.
In his fourth issue, Chaudhary argues that the trial court abused its discretion by assessing discovery sanctions without proper notice and a hearing as required by Rule 215 of the Texas Rules of Civil Procedure. He argues only that he did not receive proper notice or have an opportunity to be heard.
We review a sanctions order for abuse of discretion. Unifund CCR Partners v. Villa, 299 S.W.3d 92, 97 (Tex. 2009). We will reverse an order granting sanctions only if the trial court acted without reference to any guiding rules and principles, such that its ruling was arbitrary or unreasonable. See id.
The record includes the order setting hearing on the appellees' motion for sanctions and Chaudhary's motion for continuance, which is probative evidence that he had notice of when he would have an opportunity to be heard. Although Chaudhary filed a motion for continuance, he did not obtain a ruling before the date of the hearing. Although Chaudhary argued that he knew as early as October 2019, when the court set the motion for hearing, that he was unavailable, he waited until a week before the hearing to file his motion for continuance. Nothing in the appellate record indicates that Chaudhary set his motion for continuance for hearing or asked the court to rule on it before the December hearing date. He had the opportunity to present evidence or arguments-he could have appeared, hired counsel to appear on his behalf, or secured ruling on his motion for continuance. He chose to do none of these things. We overrule this issue.
V. The award of attorney's fees was proper.
In his fifth and final issue, Chaudhary argues that the trial court's award of attorney's fees was not supported by legally and factually sufficient evidence. Specifically, he contends that the appellees' attorney's fees affidavit did not provide evidence of the particular services performed, the approximate time when the services were rendered, and the reasonable amount of time required to perform the services. Chaudhary argues the evidence is also factually insufficient because the appellees did not attach a bill to the attorney's fees affidavit, and that the entire lawsuit was unnecessary because the appellees failed to mediate the case.
We review a trial court's award of attorney's fees for abuse of discretion. Hsu v. Conterra Servs., LLC, No. 01-20-00182-CV, 2021 WL 921672, at *5 (Tex. App.-Houston [1st Dist.] Mar. 11, 2021, no pet.) (mem. op.); Kubbernus v. ECAL Partners, 574 S.W.3d 444, 486 (Tex. App.-Houston [1st Dist.] 2018, pet. denied). Under this standard, evidentiary sufficiency issues are not independent grounds and instead are factors relevant in assessing whether the trial court abused its discretion. Hsu, 2021 WL 921672, at *5. We thus consider whether the trial court had sufficient evidence on which to exercise its discretion and, if so, whether it erred in applying that discretion. Id.
A party who prevails on a claim based on an oral or written contract may recover attorney's fees. Tex. Civ. Prac. & Rem. Code § 38.001(8). To obtain attorney's fees, a party generally must present evidence of the reasonable hours spent by its counsel and its counsel's reasonable hourly billing rate. Rohrmoos Venture v. UTSW DVA Healthcare, 578 S.W.3d 469, 498 (Tex. 2019). To be sufficient, this evidence must at a minimum include proof of:
•the particular services performed;
•the identity of the person who performed these services;
•an approximation as to when these services were performed;
•the reasonable amount of time required to perform these services; and
•the reasonable hourly rate of the person performing them.Id. Once a party has introduced this evidence, the resulting fee calculation-often referred to as the base lodestar figure-is presumptively reasonable and necessary. Id. at 499; Hsu, 2021 WL 921672, at *5.
In this case, the only evidence of attorney's fees was the affidavit of appellees' counsel. The affidavit identified the particular people who performed services for the appellees, their qualifications and experience, and the nature of the services provided. It provided an approximation of when the services were performed, the hourly rate charged per person, an explanation of how those rates compared to similarly qualified professionals, and why the rate charged was reasonable. In addition, the affidavit described how and why Chaudhary's actions in litigating the case increased the amount of time and difficulty in the representation and made the amount of time spent reasonable under the circumstances. Finally, the appellees' counsel averred that the attorney and paralegal fees charged were necessary and reasonable and that the fees charged were "customarily charged in this area for the same or similar services for attorneys with [their] experience, reputation, and ability, considering the type of controversy, the time limitations imposed, the results obtained, and the nature and length of [his] relationship with the [appellees]."
We conclude that the uncontroverted affidavit is "clear, positive, direct, otherwise credible, free from contradictions and inconsistencies, and readily could have been controverted." See, e.g., Highland Cap. Mgmt., L.P. v. Ryder Scott Co., 402 S.W.3d 719, 734 n.9, 736 (Tex. App.-Houston [1st Dist.] 2012, no pet.) (quoting Trico Techs. Corp. v. Montiel, 949 S.W.2d 308, 310 (Tex. 1997)). We hold that the trial court did not abuse its discretion by rendering judgment for attorney's fees, and we overrule this issue.
Conclusion
We affirm the judgment of the trial court.