Opinion
03-22-00483-CV
05-09-2024
Phyllis McRae, Appellant v. Parkside at Round Rock, Appellee
FROM THE COUNTY COURT AT LAW NO. 4 OF WILLIAMSON COUNTY NO. 22-0728-CC4, THE HONORABLE JOHN B. MCMASTER, JUDGE PRESIDING
Before Justices Baker, Kelly, and Smith
MEMORANDUM OPINION
Thomas J. Baker, Justice
This lawsuit involves a dispute between parties to a residential lease. The trial court rendered a take-nothing judgment on the tenant's claim that the landlord did not return the tenant's security deposit or provide an accounting of deductions from the deposit within 30 days of the tenant's vacating the premises. The trial court awarded the landlord damages on its counterclaim against the tenant for unpaid rent, utilities, and late fees and attorneys' fees. We will affirm in part and reverse and remand in part.
BACKGROUND
Phyllis McRae entered into a one-year residential lease to rent an apartment from Parkside at Round Rock. The lease period was from September 30, 2021 through September 29, 2022. McRae decided to move out of the apartment before the end of the lease term and served notice that she was doing so on January 2, 2022. Parkside mitigated its damages by obtaining a replacement lessor beginning March 26, 2022, at which time it generated a final statement of charges it contended McRae owed.
On February 24, 2022, McRae, appearing pro se, filed suit against Parkside in justice court alleging that:
[Parkside] have withheld my security deposit. They have not notified me within the time frame under the law as to what happened to my file after move out. As of the 13th of February, they still continue to list me as a current tenant and keep charging me, even though I served them notice of my move-out on January 2, 2022.
McRae requested that the justice court "reverse all adverse charges" and "return deposit x3 + 100 + fees."
Parkside filed an answer and counterclaim asserting that McRae breached the lease by moving out of the apartment early and failing to pay rent, utilities, and late fees due under the terms of the lease. Parkside also asserted that McRae used her security deposit to pay her last month's rent in violation of Texas Property Code section 92.108. See id. (prohibiting tenant from withholding payment of last month's rent on ground that security deposit is security for unpaid rent).
On May 19, 2022, after conducting a trial, the justice court rendered judgment in Parkside's favor, awarding it $2,550 in damages and $2,250 in attorneys' fees. McRae appealed to the county court.
The county court held a trial de novo and heard testimony from McRae and from Abel Ruiz, Parkside's property manager during McRae's tenancy. Admitted into evidence as Parkside's exhibits were: (1) the lease; (2) a copy of McRae's petition in justice court; (3) a "Valet Trash Service Addendum" to the lease stating that valet trash service would be provided to each resident five nights per week for $25 per month; (5) an itemized list of charges generated by Parkside, including unpaid rent and utilities; and (6) itemized billing statements from Parkside's attorney. Admitted into evidence as McRae's exhibits were photographs of the hallway in front of her apartment showing household garbage cans containing plastic garbage bags placed by the door of each apartment.
McRae testified that the photographs depicted garbage set out in the hallways by tenants well in advance of the designated pickup time and that the smell of the garbage was "noxious" and "making [her] sick to the point of sick to [her] stomach when [she] would have to travel down" the halls. McRae also testified that the photographs depicted animal urine in the main entrance and that "the odor was very strong." McRae stated that "health issues" caused her to terminate her lease. McRae also testified that she moved out of the apartment because there was a lack of wheelchair access to her apartment.
Ruiz testified that McRae's monthly rent was $1,122.00 and, if not paid by the fifth of each month, was increased by a ten percent late fee. Ruiz testified that the building had several access ramps and two elevators providing service to the floor of McRae's unit. Ruiz stated that the building was relatively new in 2021 and that there were never any reports of roaches in the building. During Ruiz's testimony, the court admitted into evidence a document that Ruiz testified showed that McRae had agreed to the valet trash service provided by the apartment complex. The valet trash service picked up trash left in hallways by the residents. Ruiz testified that at times residents would place their trash in the hallway earlier than they were directed to and that at times there was a slight smell of trash in the hallways. Ruiz stated that they were proactive in addressing instances in which trash was placed in the hallway prematurely.
Ruiz testified that after McRae vacated her unit in January 2022, the property mitigated its damages by obtaining a replacement tenant on March 26, 2022. Ruiz stated that Parkside prepared an accounting of charges McRae accrued for the time period of December 1, 2021, through March 26, 2022. The accounting tallied all of McRae's late fees, unpaid rent, and utility charges, offset the total balance by McRae's $750 security deposit, and determined that McRae owed Parkside $2,972.98. Ruiz stated that that balance was what Parkside was seeking in its counterclaim for breach of contract.
Corey Rogers, Parkside's attorney, then testified as to Parkside's request for attorneys' fees. Rogers stated that he was an attorney licensed to practice law in Texas since 2008, specializing in trial work representing multi-family housing. Rogers testified that he charged Parkside an hourly rate of $300 and that a paralegal performed some work on the case at an hourly rate of $95. Rogers attested to the work he performed including reviewing and analyzing the relevant statutes and documents, and preparing for the trials in justice court and in county court. Rogers stated that he adhered to the Texas Supreme Court's guidelines regarding charging attorneys' fees. Rogers testified that reasonable and necessary attorneys' fees for the two trials in this case was $4,636. Rogers stated that $7,500 was a reasonable and necessary fee for an appeal to an intermediate court of appeals, $7,500 was a reasonable and necessary fee for responding to a petition for review filed in the Texas Supreme Court, and $7,500 was a reasonable and necessary fee in the event a petition for review was granted. The court admitted an exhibit that constituted a summary of Rogers's time records detailing the time and tasks he performed in connection with the case.
At the conclusion of the trial, the court rendered judgment that McRae take nothing and that Parkside recover damages of $2,972.68, attorneys' fees for trial in the amount of $4,650, and contingent appellate attorneys' fees of $5,000 if McRae took an unsuccessful appeal to the intermediate court and $7,500 if she took an unsuccessful appeal to the Texas Supreme Court. McRae then perfected this appeal.
DISCUSSION
We discern from McRae's pro se brief on appeal that her first complaint is a challenge to the trial court's award of attorneys' fees to Parkside. McRae contends that the trial court "departed from the longstanding practice of the 'American Rule' procedure that requires litigants to pay their own court costs." She argues that the trial court had no inherent authority to make an attorney's fee award "outside of a clear contract, statute, or court rule." We understand McRae to assert that the trial court had no authority to award Parkside attorneys' fees in this case.
Legal authorization begins with the American rule, which provides that a prevailing party has no inherent right to recover attorneys' fees from the non-prevailing party unless there is specific statutory or contractual authority allowing it. See, e.g., Tony Gullo Motors 1, LP v. Chapa, 212 S.W.3d 299, 310-11 (Tex. 2006) (observing that Texas law has followed American Rule for more than one century). Section 32.5 of the lease, entitled "Other Remedies," provides that "[a] prevailing party may recover reasonable attorney's fees and all other litigation costs from the nonprevailing parties," and further provides that Parkside "may recover attorney's fees in connection with enforcing our rights under this Lease." The trial court determined that McRae breached the lease agreement and awarded Parkside damages of $2,972.68. The lease authorized recovery of attorneys' fees to a party that prevailed in a suit seeking to enforce rights under the lease. Here, Parkside obtained a judgment in its favor on its claim to recover unpaid rent and other charges from McRae. Having prevailed on its cause of action for breach of the lease, Parkside was entitled to recover attorneys' fees pursuant to the contract between the parties. Thus, the court had authority to award Parkside its reasonable attorneys' fees. See id.
In her brief McRae also asserts that the fees awarded were not "proved using the Anderson / Lodestar combined method." In support of this assertion, McRae cites Rohrmoos Venture. See Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 501-02 (Tex. 2019) (delineating minimum legally sufficient evidence to support award of attorneys' fees). We understand McRae to challenge the legal sufficiency of the evidence supporting the award of trial-level attorneys' fees and conditional appellate attorneys' fees. As for the trial-level fees, Parkside's evidence in the form of its attorney's testimony and the exhibits consisting of the attorney's billing statements tracked the requirements outlined in Rohrmoos. See id. The testimony and exhibit contained the same type and level of information that this Court has previously held constitutes legally sufficient evidence to support an award of trial-level attorneys' fees. See, e.g., Watts v. Watts, No. 03-21 -00693-CV, 2023 WL 8852152, at *8 (Tex. App - Austin Dec. 22, 2023, no pet.) (mem. op.); Cobb Dev. v. McCabe, No 03-21-00524-CV, 2023 WL 4003513, at *12 (Tex. App-Austin June 15, 2023, pet. filed) (mem. op.); King v. King, No. 03-22-00329-CV, 2023 WL 3873496, at *14 (Tex. App-Austin June 8, 2023, no pet.) (mem. op.).
However, we determine that McRae's challenge to the trial court's award of conditional appellate attorneys' fees has merit. To recover conditional appellate attorneys' fees, a claimant needs to provide opinion testimony about the services it reasonably believes will be necessary to defend the appeal and a reasonable hourly rate for those services. Yowell v. Granite Operating Co., 620 S.W.3d 335, 355 (Tex. 2020). The testimony of Parkside's attorney did not opine on a reasonable hourly rate for appellate work or outline the anticipated tasks reasonably necessary to defend an appeal before this Court or for any proceedings before the supreme court. Cf. id. When discretionary appellate attorneys' fees are authorized but the evidence is legally insufficient to support an award, the proper remedy is to reverse and remand for a redetermination of attorneys' fees. See Faith P. & Charles L. Bybee Foundation v. Knutzen, 681 S.W.3d 818, 840-41 (Tex. App-Austin 2023, no pet.) (reversing and remanding for redetermination of appellate attorneys' fees under UDJA where evidence provided "no evidence about any such tasks [required by Yowell] for an appeal"); Jimmie Luecke Children P'ship, Ltd. v. Droemer, No. 03-20-00096-CV, 2022 WL 243162, at *8 (Tex. App-Austin Jan. 27, 2022, pet. denied) (mem. op.). We sustain McRae's challenge to the award of conditional appellate attorneys' fees and will reverse and remand the portion of the judgment awarding appellate attorneys' fees to the trial court for redetermination of appellate attorneys' fees.
In her second issue, McRae complains that the trial court erred by concluding that the living conditions at the apartment complex would not "materially affect the physical health or safety of an ordinary tenant." See Tex. Prop. Code § 92.056(b)(1), (2) (landlord is liable to tenant if tenant has given landlord notice to repair or remedy condition that materially affects physical health or safety of ordinary tenant), (e) (tenant to whom landlord is liable under subsection (b) may terminate lease). Because the trial court did not sign findings of fact or conclusions of law, we understand McRae to challenge the legal sufficiency of the evidence supporting the trial court's implied finding that the conditions of the apartment complex did not materially affect the health or safety of an ordinary tenant such that termination of her lease was warranted. When a party challenges the legal sufficiency of the evidence to support an adverse finding on an issue for which it had the burden of proof, that party must demonstrate on appeal that the evidence establishes, as a matter of law, all vital facts in support of the issue. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001) (per curiam). In reviewing such a matter-of-law challenge, we employ a two-part test. We first examine the record for evidence that supports the finding, while ignoring all evidence to the contrary. Id. If there is no evidence to support the finding, we then examine the record to determine if the contrary proposition is established as a matter of law. Id. The issue should be sustained only if the contrary proposition is conclusively established. Id. We consider the evidence in the light most favorable to the challenged finding. City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005). If the evidence at trial "would enable reasonable and fair-minded people to differ in their conclusions," we will not substitute our judgment for that of the factfinder. See id. at 827.
McRae's health and safety complaint is premised on the presence of trash in the hallways of the apartment complex. Evidence supporting the trial court's implied finding that the presence of trash in the hallway was not a condition that would materially affect the health and safety of an ordinary tenant was Ruiz's testimony that, at times, there was "a slight smell" in the hallway if trash was left out but that the management team was proactive in correcting the issue by removing the trash. Because this evidence supports the trial court's finding that the existence of a "slight smell" of trash in the hallways would not materially affect an ordinary tenant's health and safety, we need go no further. See Dow Chem Co., 46 S.W.3d at 241. Moreover, even considering McRae's testimony that the smell of trash was "noxious" and made her "sick to her stomach," that testimony does not establish that the trash materially affected an ordinary tenant's health and safety as a matter of law. At most, McRae's testimony conflicts with Ruiz's, in which case we will not substitute our judgment for that of the factfinder who is "the only judge of witness credibility and the weight afforded to testimony." See City of Keller, 168 S.W.3d at 827. We overrule McRae's second issue.
McRae references the trial court's exclusion of "computer-generated timestamps" on photographs of the hallway showing trash cans outside of apartment unit doors. McRae does not explain how evidence of the time or date at which the trash was in the hallway adds anything to her claim that the presence of the trash in the hallway materially affected an ordinary tenant's health and safety.
CONCLUSION
We affirm the trial court's judgment, except the portion awarding Parkside contingent appellate attorneys' fees, which we reverse. We remand the case for redetermination of the issue of the reasonable and necessary appellate attorneys' fees to which Parkside is entitled.
Affirmed in Part, Reversed and Remanded in Part.