Opinion
No. 14-06-00652-CV
Opinion filed August 21, 2007.
On Appeal from the 129th District Court Harris County, Texas, Trial Court Cause No. 2004-02484.
Panel consists of Chief Justice HEDGES and Justices FOWLER and EDELMAN.
MEMORANDUM OPINION
In this appeal, El Sabor de Mi Tierra, Inc. d/b/a El Sabor de Mexico ("El Sabor") contends that the trial court erred in granting summary judgment favoring Atascocita/Boone JV ("Atascocita"), Houston Real Estate Group, Inc. ("HREG"), and Sherry Harber (collectively "appellees"), in El Sabor's lawsuit arising out of a landlord-tenant relationship between El Sabor and Atascocita. Appellees additionally raise cross-points challenging the admissibility of affidavits filed by El Sabor. We affirm in part and reverse and remand in part.
I. Background
In June 2003, El Sabor executed a commercial lease agreement with Atascocita for rental space in a shopping center. El Sabor subsequently made modifications to the leased premises, including plumbing and air conditioning work, and opened a Mexican restaurant. The restaurant opened in August 2003 and closed in August 2004. About two months into the lease term, representatives of El Sabor began to complain to appellees of a sewer gas odor. In its pleadings, El Sabor alleged that the odor was so severe on numerous occasions that it had to close the restaurant. El Sabor further contends that appellees knew of the problem and failed to disclose it prior to execution of the lease agreement.
Although it is not entirely clear from the record, El Sabor contends that HREG was the property manager for the shopping center, and Harber was the president of HREG.
This statement regarding complaints is made in the pleadings of both El Sabor and appellees.
Appellees filed three motions for summary judgment, containing both traditional and no evidence grounds. El Sabor filed multiple responses and filed amended petitions alleging new causes of action. Ultimately, the trial court granted summary judgment on all of El Sabor's claims. On appeal, El Sabor challenges only the grant of summary judgment on certain of its causes of action, specifically: negligence, nuisance, violations of the Deceptive Trade Practices Act, breach of contract, and breach of the implied warranty of suitability.
TEX. BUS. COM. CODE ANN. §§ 17.41-.63 (Vernon 2002 Supp. 2006).
Among the claims abandoned by El Sabor are slander, fraud, and business disparagement.
The lease agreement at issue contained three "as is" provisions, which appellees stressed in support of their motions for summary judgment. The first such clause appears on the "Lease Summary" page and states: "Lessee accepts premises `AS IS'. Lessee will be responsible for any build out and repairs to the Demised Premises." The second appears in the "Covenants and Warranties" section and states as follows:
The specific arguments made by appellees in support of its motions and made by El Sabor in response are detailed below in the analysis portion of the opinion.
Lessee has inspected the Demised Premises and accepts them in their existing condition, on an AS IS basis. Lessee hereby waives and relinquishes any right to assert, either as a claim or a defense that Lessor is bound to perform or is liable for the non-performance of any implied covenant or implied duty of Lessor not express[l]y set forth herein. Lessee waives any implied warranty of Lessor that the Demised Premises are suitable for their intended commercial purposes. Lessee agrees to perform all of its Lease obligations (including, without limitation, the obligation to pay rent), irrespective of any breach or an alleged breach by Lessor of any such implied warranty.
The third clause appears on "Exhibit C," which was attached to the lease. This clause is identical to the one listed in the Lease Summary and, indeed, appears to be what is summarized there. The lease further obligates El Sabor to keep "the Demised Premises, and all property and improvements situated therein in good repair, included without limitations all plumbing, heating and electrical installations, air conditioning equipment, hardware, doors and windows, interior painting and decorating." The lease further provides that Atascocita:
shall make structural repairs to any part of the exterior of the building of which the Demised Premises are a part including the roof and building walls, and shall repair any interior portion thereof resulting from a structural defect and shall repair or replace any appurtenance thereby rendered unfit for use; provided, that the Lessor's obligations shall not extend to any of said conditions which may have created [sic] by the negligence of Lessee. . . .
Although the lease agreement is not explicit in defining the phrase "Demised Premises," it appears clear from the agreement as a whole that the phrase refers to the 2,500 square feet portion of the shopping center leased by El Sabor.
The summary judgment evidence also includes a number of affidavits. In her affidavit, Liza De Anda stated that she managed the El Sabor restaurant during its operational year. She said that on numerous occasions during that year she noticed "noxious, foul, and ill smelling sewer gas," and the restaurant had to close several times because of it. She further averred that she made several complaints to "Sherri Harbor [sic]," but the problem was never corrected. She said that the restaurant lost considerable business because of the smell.
In his original affidavit, Howard Novick, the principle of El Sabor, stated that during lease negotiations, "Sherri Harbor [sic] stated that the plumbing for the lease space worked fine and that the space was suitable for a restaurant." He said that he relied upon these representations in signing the lease, but after occupying the space, the restaurant experienced numerous unresolved plumbing problems, causing the restaurant to close on several occasions. In a subsequent affidavit, Novick stated that he never had the leased space inspected by "anyone such as an engineer, electrician or plumber." He said that he relied on the representations of the property management "to determine if there were problems with the shopping center in general, or with the leased space." More specifically, he said that he asked Sherry Harber if there were any problems that needed attention, and she responded: "Everything is working perfectly." He further said that he "was not aware of any problem that existed with the plumbing system before [he] signed the lease and the landlord never indicated to [him] that there was any problem with the plumbing system." He said that appellees never disclosed to him that plumbers had been called to the property on numerous occasions or that prior tenants had complained about plumbing or sewer odors.
Appellees presented affidavits from tenants of the shopping center: Carl Selbe, who formerly operated a floral shop at the center, and Shiang Jui, who continued to operate (as of the time he signed the affidavit) a Chinese restaurant at the center. Both stated that they had never experienced any plumbing related problems or foul odors at the center.
Additionally, there are two affidavits in the record from Richard Vacante. In the first, filed by El Sabor, Vacante states that he operated a bakery in the shopping center and encountered numerous plumbing problems, including sewer odors resulting in customer complaints and at least two floods caused by sewer backups. He further said that he complained to "Sherri Harbor [sic]" on several occasions, but the problem was never fixed. In his second affidavit, filed by appellees, Vacante indicates a desire to "recant and . . . withdraw" his entire original affidavit. He says that in actuality a drain in the office overflowed twice causing an associated odor, but he did not suffer store-wide floods or "numerous" plumbing problems as his prior affidavit suggested. He said that he reported problems to Sherry Harber only on those two occasions.
The trial court sustained appellees objection to paragraph 6 of Vacante's original affidavit, and El Sabor does not challenge this ruling on appeal. Consequently, we do not discuss or consider the statements in paragraph 6 in our analysis.
Appellees also provided excerpts from Novick's deposition. In the excerpt, Novick states that he could recall meeting Harber on only one occasion prior to signing the lease but that no substantive discussion occurred during the brief encounter. He then says that once he asked her whether everything was "in good working condition," and Harber said that it was. He could not recall, however, whether this conversation occurred before or after he signed the lease.
Lastly, appellees provided detailed plumbing records for the shopping center, covering approximately from December 1999 to August 2003. As appellees point out, the records contain only one express mention of a sewer odor, in September 2003, when the smell was traced to an air conditioning unit and not to a sewer line. The records, however, detail at least sixteen occasions on which plumbing lines at the shopping center had to be cleaned out due to blockage, with ten of these occurring in the three years prior to the signing of the lease agreement. Additionally, on October 28, 2000, a plumber was called out to investigate possible leaks from a water meter box and a sewer connection after the local Municipal Utility District reported a possible sewer leak. Another service note mentions a leak at a bakery in the shopping center. A service visit on April 5, 2002, generated the following note:
Televised building sewer lines from clean-out at SW corner of building. Line runs east through entire shopping center. Found minor sags/build-up first 100ft. Moderate to heavy sags and build up [sic] at 145ft — 185ft — 225ft and bad low spot at 230-245ft. Severe grease buildup at 250ft. 6" line at this location but a 2" opening may cause backup. No breaks or cracks found.
A different note from the same month suggests that there may have been a broken line under the driveway. On August 11, 2003, the drain lines were so clogged that the plumber had to return to his office to refill his water jet machine before continuing to clear the line.
II. Standards of Review
We review a grant of summary judgment under a de novo standard. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). When, as here, the trial court grants summary judgment without specifying the grounds on which it bases its decision, we must affirm the judgment if any of the grounds presented by the movant are meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872-73 (Tex. 2000). When reviewing a grant of summary judgment, we take as true all evidence favorable to the nonmovant and indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150, 157 (Tex. 2004).
In a traditional motion for summary judgment under Texas Rule of Civil Procedure 166a(c), the movant has the burden of demonstrating that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Am. Tobacco Co. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). A traditional summary judgment for a defendant is proper only when the defendant negates at least one element of each of the plaintiff's theories of recovery, or pleads and conclusively establishes each element of an affirmative defense. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997).
In a no-evidence motion summary judgment under Rule 166a(i), the movant represents that there is no evidence of one or more essential elements of the claims for which the non-movant bears the burden of proof at trial. TEX. R. CIV. P. 166a(i); Green v. Lowe's Home Ctrs., Inc., 199 S.W.3d 514, 518 (Tex.App.-Houston [1st Dist.] 2006, pet. denied). We must sustain a no-evidence summary judgment when (1) there is a complete absence of evidence of a vital fact, (2) the court is barred by rules of law or of evidence from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a mere scintilla, or (4) the evidence conclusively establishes the opposite of the vital fact. Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). 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. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003).
III. Objections to Affidavits
In two cross-points, appellees challenge the admissibility of certain affidavits filed by El Sabor. We will discuss the cross-points first because they may impact our substantive discussion of the summary judgment evidence. We review a trial court's decision to admit or exclude summary judgment evidence for an abuse of discretion. Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998).
A. Richard Vacante's Two Affidavits
In the first cross-point, appellees contend that the trial court erred in overruling their objections to Richard Vacante's original affidavit. Specifically, appellees assert both that the original affidavit should have been disregarded in its entirety and that certain paragraphs of the affidavit were inadmissible.
As mentioned above, two affidavits were submitted from Vacante, who previously ran a bakery at the shopping center. In the first affidavit, Vacante stated that he encountered numerous plumbing problems, including sewer odors causing customer complaints and at least two floods caused by sewer backups. He further said that he complained to "Sherri Harbor [sic]" on several occasions, but the problem was never fixed. In the second affidavit, Vacante indicated a desire to "recant and . . . withdraw" his original affidavit because it was "worded in an overly general and imprecise manner that could be easily misconstrued." He said that he had asked the person who presented him with the first affidavit to make changes to it before he signed it, but the changes were not made. He further said that in actuality a drain in the office overflowed twice causing an associated odor, but he did not suffer store-wide floods or "numerous" plumbing problems. He also said that he reported problems to Sherry Harber on only two occasions.
Appellees initially argue that because of the "highly questionable circumstances under which [the first affidavit] was obtained," it should be disregarded in its entirety. Appellees have provided little additional argument on this contention and offered no citation to authority either in the trial court or on appeal. See TEX. R. APP. P. 38.1(h) (requiring that briefs contain argument for the contentions made and appropriate citations to authority), 38.2(a)(1) (providing that appellee briefs must generally follow the requirements of Rule 38.1). Nonetheless, it is clear that Vacante duly swore that both affidavits were "true and correct." The second affidavit, in fact, is mostly an attempt to clarify (and not directly contradict) statements made in the original affidavit. Appellees provide no reason why the statements in the first affidavit could not still be considered in light of the clarifications in the second affidavit. Accordingly, we do not find that the trial court abused its discretion in declining to disregard Vacante's first affidavit in its entirety.
Appellees additionally contend that the trial court erred in denying their objections to paragraphs 4 and 5 of Vacante's original affidavit. Paragraph 4 states in its entirety: "While I was operating the bakery, I had numerous plumbing problems there. Periodically, throughout my tenancy, I smelled sewer odors, and customers complained to me about the odor. On at least 2 occasions, the sewer backed up and flooded my bakery." In their brief, appellees complain that this paragraph "contains no substance . . . is vague and nonspecific and provides nothing in the way of relevant substantive information." Again, appellees have cited no authority in making their arguments. See TEX. R. APP. P. 38.1(h), 38.2(a)(1). Although the paragraph is not specific regarding time, a prior paragraph provides the time frame for Vacante's 18-month tenancy. Furthermore, although the phrase "I had numerous plumbing problems" is rather vague, the following sentence explains that throughout his tenancy, Vacante smelled sewer odors and that the sewer backed-up on at least two occasions. Accordingly, we find that it was within the trial court's discretion to disagree with appellees' characterization of paragraph 4.
It should be noted that appellees did not object on relevancy grounds in the trial court. See Wohlfahrt v. Holloway, 172 S.W.3d 630, 639-40 (Tex.App.-Houston [14th Dist.] 2005, pet. denied) (holding that to have preserved error, a party's argument on appeal must comport with its argument in the trial court).
Paragraph 5 states in full: "On several occasions I made complaints to Sherri Harbor [sic] about the sewer odor and plumbing problems, but they were never cured." As to this paragraph, appellees argue that it "contains general, nonspecific and nonsubstantive information" and that Vacante has no "knowledge, ability, or foundation to make the assertions in paragraph five." Again, appellees offer little supporting argument and no citation to authority. Regarding the first assertion in the paragraph that he had made "several" complaints to Harber, he clarifies this in his second affidavit by saying it was only two complaints. The second assertionCthat the problems were never correctedCappears to be based on his statement in paragraph 4 that the problems occurred "throughout [his] tenancy" and not on any particular knowledge of plumbing as appellees suggest. Accordingly, we find that it was within the trial court's discretion to disagree with appellees' characterization of paragraph 5. We overrule appellees' first cross-point.
B. Sham Affidavits
In their second cross-point, appellees contend that the affidavits of Howard Novick and Liza De Anda are "conjured shams created solely in a failed attempt to create a fact issue to preclude summary judgment," citing Farroux v. Denny's Restaurants, Inc., 962 S.W.2d 108, 111 (Tex.App.-Houston [1st Dist.] 1997, no pet.). In Farroux, the plaintiff filed an affidavit in response to the defendant's motion for summary judgment making four specific factual assertions that contradicted testimony he had previously given in his deposition. Id. The First Court of Appeals held that the affidavit was a "sham," unworthy of consideration, stating: "A party cannot file an affidavit to contradict his own deposition testimony without any explanation for the change in the testimony, for the purpose of creating a fact issue to avoid summary judgment." Id. (citing Bank of Ill. v. Allied Signal Safety Restraint Sys., 75 F.3d 1162, 1168-69 (7th Cir. 1996)). Several other courts of appeals have adopted and applied the Farroux sham affidavit rule, while others have expressly rejected it. Compare Trostle v. Trostle, 77 S.W.3d 908, 915 (Tex.App.-Amarillo 2002, no pet.) (adopting sham affidavit rule); Burkett v. Welborn, 42 S.W.3d 282, 286 (Tex.App.-Texarkana 2001, no pet.) (same); and Eslon Thermoplastics v. Dynamic Sys., Inc., 49 S.W.3d 891, 901 (Tex.App.-Austin 2001, no pet.) (same), with Pierce v. Washington Mut. Bank, 226 S.W.3d 711, 717-18 (Tex.App.-Tyler 2007, pet. filed) (rejecting rule); Davis v. City of Grapevine, 188 S.W.3d 748, 755-56 (Tex.App.-Fort Worth 2006, pet. denied) (same); Larson v. Family Violence Sexual Assault Prevention Ctr. of S. Tex., 64 S.W.3d 506, 513 (Tex.App.-Corpus Christi 2001, pet. denied) (same); and Thompson v. City of Corsicana Housing Auth., 57 S.W.3d 547, 557 (Tex.App.-Waco 2001, no pet.) (same).
Except once in dicta, the Fourteenth Court of Appeals has apparently not taken a side on the issue in a published opinion. See Blan v. Ali, 7 S.W.3d 741, 747 n. 3 (Tex.App.-Houston [14th Dist.] 1999, no pet.) ("While we agree that [ Farroux] precludes the trial court from considering an affidavit that contradicts deposition testimony without an explanation for the change in testimony, the supplemental affidavit does not contradict Dr. Reisbord's deposition testimony.") (emphasis in original).
The Texas Supreme Court has yet to specifically address the sham affidavit rule but has previously held that "a deposition does not have controlling effect over an affidavit in determining whether a motion for summary judgment should be granted. Thus, if conflicting inferences may be drawn from a deposition and from an affidavit filed by the same party in opposition to a motion for summary judgment, a fact issue is presented." Randall v. Dallas Power Light Co., 752 S.W.2d 4, 5 (Tex. 1988) (citing Gaines v. Hamman, 163 Tex. 618, 358 S.W.2d 557, 562 (1962)). In Cantu v. Peacher, the San Antonio Court of Appeals attempted to explain the Farroux and Randall cases as falling along a continuum based on the level of contradiction between the affidavit and deposition statements rather than being in direct conflict with one another. 53 S.W.3d 5, 9-11 (Tex.App.-San Antonio 2001, pet. denied) ("Most differences between a witness's affidavit and deposition are more a matter of degree and details than direct contradiction."). We hold that regardless of which reasoning is applied — Farroux, Randall, or Cantu — any conflict between Novick's and De Anda's affidavit statements and deposition testimony does not rise to the level that renders the affidavits mere shams.
1. Novick's Affidavit
Appellees compare Novick's deposition testimony that he had only one nonsubstantive meeting with Sherry Harber before the lease was signed with his affidavit statements that Harber told him before he signed the lease that the plumbing worked fine and the space was suitable for a restaurant. Appellees quote Novick's deposition selectively with misleading interpretation. Immediately after stating that no pre-lease substantive conversations occurred, Novick made this caveat or clarification in an exchange with opposing counsel:
A. But I have to say thisCand I'm not sure if the lease was signed or not . . . but I asked Ms. Harber, "Is everything in good working condition," because I was concerned about the "As Is"; and she said it was.
Q. Your testimony is that you had this conversation, but you cannot recall if it was before or after you signed the lease?
A. That's correct, because it was in the premises. . . .
Unfortunately, because at this point the deposition excerpt in the record skips several pages, it is unclear what else, if anything, Novick might have had to say about this exchange with Harber.
It therefore appears that in his deposition testimony, Novick in fact allowed for the possibility of a substantive pre-lease discussion with Harber regarding the property. Thus, his affidavits can be seen more as clarifications of his deposition testimony (taken as a whole) rather than direct refutations of it as occurred in Farroux.
2. De Anda's Affidavit
Appellees argue that De Anda's affidavit statement that the odor problem at the property was never corrected directly conflicts with her deposition testimony that the last time she noticed a particularly bad sewer odor at the property was some five months before the restaurant closed. However, the mere fact that De Anda no longer smelled particularly bad odors after a particular point does not directly contradict her statement regarding lack of repairs. Saying that repairs were indeed made or that she saw repairs being made would be a direct contradiction to her affidavit statement, but simply not noticing the smell for a time is not. Because appellees fail to identify any direct conflicts between the affidavit statements and deposition testimony of Novick and De Anda, we overrule appellees' second cross-point.
In her deposition, De Anda in fact indicates that she did notice the smell a couple more times, only not as strong as it had been before.
IV. Summary Judgment Analysis
We will begin by addressing El Sabor's claims against Sherry Harber. Next we address appellees' traditional and no-evidence summary judgment arguments in regards to El Sabor's negligence, nuisance, DTPA, and breach of contract theories of recovery. We separately consider appellees' contention that the "as is" clauses in the lease agreement defeat, as a matter of law, the causation element of each of El Sabor's causes of action as well as El Sabor's implied warranty of suitability cause of action.
A. Sherry Harber
In their Second Motion for Summary Judgment, which the trial court granted in full, appellees asserted as grounds for judgment on behalf of Sherry Harber that there was no evidence that any of her actions fell outside the course and scope of her employment. Therefore, appellees insisted, each of El Sabor's theories of recovery against Harber (in her individual capacity) failed. In its appellate brief, El Sabor does not address this ground for summary judgment favoring Harber in regards to its negligence, nuisance, breach of contract, and breach of implied warranty claims. Consequently, it has abandoned these claims against her. See Cuyler v. Minns, 60 S.W.3d 209, 216 (Tex.App.-Houston [14th Dist.] 2001, pet. denied). We therefore overrule points of error one and two as well as four through eight to the extent that El Sabor asserts that the trial court erred in granting summary judgment favoring Harber on these claims.
It is not entirely clear from El Sabor's live petition whether it intended to raise breach of contract and breach of implied warranty claims against Harber.
Under point of error four, concerning its DTPA allegations against Harber, El Sabor argues that an individual can be found liable under the act for making false misrepresentations regardless of whether the statements were made in the course and scope of employment. This position is supported by the Texas Supreme Court's opinion in Miller v. Keyser, 90 S.W.3d 712, 715-18 (Tex. 2002). Consequently, the trial court erred to the extent it granted summary judgment favoring Harber on El Sabor's DTPA claim based on lack of any evidence that Harber's actions fell outside the course and scope of her employment. We sustain point of error four to this extent.
In Miller, a defendant, sued in his individual capacity under the DTPA, argued that a corporate agent cannot be held personally liable for company misrepresentations. 90 S.W.2d at 715. After a jury trial, the trial court entered judgment against the defendant. Id. The First Court of Appeals reversed, holding that an agent acting within the scope of his employment could not be held liable under the DTPA. Id. The supreme court, in turn, reversed the court of appeals, explaining that (1) the DTPA permits suit against "any person" in violation of the act, (2) the DTPA is to be construed liberally to protect consumers, and (3) based on the plain language of the statute, the defendant was liable for his own conduct. Id. at 715-16.
B. Negligence
In its pleadings, El Sabor alleged that appellees were negligent in a variety of ways, including failing to maintain the property in a safe condition, failing to warn of defects, failing to make repairs, failing to properly operate the property, and failing to disclose material facts. In their motion for summary judgment, appellees addressed the failure to disclose and the possibility of negligent misrepresentations (the latter of which was not raised in El Sabor's pleadings), but did not address any of the other claims of negligence. In their appellate brief, appellees state that in support of their motion, they "established the absence of any duty to disclose/warn or repair/maintain, as well as the lack of any breach of any supposed duties." In its appellate brief, El Sabor speaks generally about the existence of a duty and the breach of that duty, but it also specifically asserts a failure to disclose. Clearly, a trial court cannot grant summary judgment against claims that are not attacked in the motion for summary judgment. See Stiles v. Resolution Trust Corp., 867 S.W.2d 24, 26 (Tex. 1993) (stating that Rule 166a "unequivocally restrict[s] the trial court's ruling to issues raised in the motion, response, and any subsequent replies"). On appeal, we will limit our discussion to the summary judgment issues actually preserved in the trial court and raised in this appeal.
In its first point of error, El Sabor contends that the trial court erred in granting summary judgment against its negligence cause of action. In their motion for summary judgment, in regard to El Sabor's negligent failure to disclose claim, appellees argued that they conclusively established the absence of any duty to disclose or any breach thereof. More specifically, appellees asserted that the summary judgment evidence conclusively established the absence of any sewer gas odor pre-existing the execution of the lease. Therefore, because the presence of sewer gas odor was not foreseeable, appellees owed El Sabor no duty to disclose. Appellees cite to three pieces of evidence in support of this contention: the plumbing records, Selbe's affidavit, and Chang's affidavit. Although the plumbing records do not specifically mention any sewer odor prior to the start of the lease, they are replete with pre-lease notations regarding plumbing problems at the property, including sewer-related problems. These problems could have generated a sewer odor that was not noted in the job descriptions. Thus, the plumbing records do not conclusively prove the absence of such an odor. Selbe's statements that during his eight to nine month tenancy at the property he did not notice any type of sewer odor does not conclusively demonstrate that there was no sewer odor prior to El Sabor's tenancy eight months later. Lastly, Chang's testimony that he had never experienced any sewer odor as a tenant in another space at the shopping center does not establish that there was no prior odor at the space leased by El Sabor. Accordingly, we find that appellees did not conclusively prove a lack of duty or breach thereof.
A negligence cause of action requires proof of duty, breach of duty, causation, and damages. Doe v. Boys Clubs of Greater Dallas, Inc., 907 S.W.2d 472, 477 (Tex. 1995).
In their reply to El Sabor's response to the motion for summary judgment, appellees contended that El Sabor could produce "no evidence of any ongoing sewer gas issue" prior to execution of the lease agreement. To the contrary, Richard Vacante stated in his original affidavit that he smelled sewer odors throughout his tenancy, which was prior to El Sabor's tenancy, and while his second affidavit explained that he really only noticed a sewer odor on two occasions, even this is some evidence of an odor problem at the property. Additionally, as stated, the plumbing records demonstrate a history of on-going plumbing and sewer-related problems at the property that suggests the odor problem may have been ongoing. Lastly, in their affidavits, Novick and De Anda described sewer odors and plumbing problems occurring throughout El Sabor's tenancy. Taken together with the other evidence, these affidavits further suggest that an odor problem may have been ongoing at the property prior to the tenancy. Accordingly, we find that the trial court erred in granting summary judgment against El Sabor's negligence claims based on appellee's alleged failures to disclose and to make plumbing repairs. We sustain point of error one in regards to these claims against Atascocita and HREG.
C. Nuisance
In its second point of error, El Sabor contends that the trial court erred in granting summary judgment against its nuisance cause of action. In its petition, El Sabor alleged that almost immediately upon opening the restaurant "[El Sabor] began experiencing severe plumbing problems and certain noxious, foul, and ill smelling sewer gas odors emanating from the property [and] continuing as of the present date so as to render [El Sabor's] premises unhealthy, dangerous and unfit for the restaurant business." El Sabor further alleged that appellees knew or should have known that these problems would cause health risks, personal discomfort, and substantial annoyance to persons of ordinary sensibilities. Therefore, it concluded appellees intentionally or negligently interfered with El Sabor's use and enjoyment of the premises.
In their motion for summary judgment, appellees argued that the evidence established as a matter of law that El Sabor could not maintain a nuisance cause of action. In support of this argument, they pointed to (1) section 5.1 of the lease agreement, (2) Selbe's affidavit, (3) Chang's affidavit, and (4) the plumbing records. According to appellees, because section 5.1 makes El Sabor responsible for plumbing repairs in the demised premises, appellees cannot be liable for nuisances emanating from the plumbing system. However, while section 5.1 assigned El Sabor responsibility for plumbing repairs in the leased space, El Sabor's nuisance claims do not appear limited to the lease space but appear directed at the shopping center property as a whole. Indeed, the plumbing records suggest the existence of plumbing problems (reoccurring blockages, leaks, line sags, a two-inch opening on a six-inch line, and a possible broken line) in the common lines of the shopping center. Section 5.1 does not obligate El Sabor to repair the common lines in the center, only the plumbing within its leased space. Appellees assert that the affidavits and the plumbing records demonstrate the absence of plumbing and odor problems at the property. For the same reasons as expressed above, these documents do not in fact prove the absence of such problems at the property.
In their appellate brief section on nuisance, appellees again make arguments that do not appear in their trial court motion, including (but not limited to) arguments that there was no evidence of appellees' allowing a particular condition to exist and that there was no evidence of substantial interference with El Sabor's use and enjoyment of the property because no financial information or reports was provided. As explained above, these arguments cannot support the summary judgment, and we do not consider them on appeal. See TEX. R. CIV. P. 166a; Stiles, 867 S.W.2d at 26.
In their motion, appellees also asserted that there is no evidence to support the nuisance claim "because there is no evidence [appellees] caused or created the supposed nuisance." However, El Sabor did not allege that appellees "caused or created" the nuisance; thus, this argument cannot be a valid ground for summary judgment against El Sabor's claims. Accordingly, we find that the trial court erred in rendering summary judgment against El Sabor's nuisance cause of action. We sustain point of error two in regards to the nuisance cause of action against Atascocita and HREG.
D. DTPA
In its third point of error, El Sabor contends that the trial court erred in granting summary judgment against its cause of action for DTPA violations. In regard to El Sabor's DTPA claims, which appellees characterized as alleging a failure "to disclose a material defect in the form of a sewer gas odor," appellees asserted in their motion that "[t]he undisputed facts establish . . . the total absence of actual knowledge on the part of this Defendant of any pre-existing sewer gas odor." In support of this assertion, appellees again point to Selbe's affidavit, Chang's affidavit, and the plumbing records. For the same reasons discussed above that these pieces of evidence do not conclusively prove the absence of an odor problem at the property, they also do not prove the absence of actual knowledge. The plumbing records are replete with pre-lease notations regarding plumbing (including sewer-related) problems at the property, Selbe's statements that he did not notice any sewer odor does not conclusively demonstrate that there was no sewer odor (or that appellees were unaware of such an odor) prior to El Sabor's tenancy eight months later, and Chang's testimony that he had never experienced any sewer odor in a different part of the shopping center does not establish that there was no prior odor at the space leased by El Sabor.
El Sabor's pleadings actually appear to make additional DTPA claims, but on appeal, El Sabor mentions only the failure to disclose the plumbing problems and associated odors. Appellees' brief makes several arguments not made in their motion (including the assertion that there was no plumbing defect at the property as opposed to the slightly different assertion in the motion that there was no sewer odor problem at the propertyCa somewhat subtle distinction but a distinction nonetheless). See TEX. R. CIV. P. 166a; Stiles, 867 S.W.2d at 26.
It is interesting to note that appellees did not point to any statement by Harber or any other representative of any of the appellees denying knowledge of the odor problem.
Appellees additionally asserted that El Sabor could provide no evidence that there was a pre-existing odor problem or that appelles had knowledge thereof. However, in addition to the plumbing records (of which appellees certainly would have had knowledge), Vacante stated in both of his affidavits that he experienced a sewer odor at the property and complained to appellees. Furthermore, De Anda and Novick described sewer odors and plumbing problems in their affidavits. Taken together with the other evidence, these affidavits further suggest that an odor problem may have been ongoing at the property prior to El Sabor's tenancy and that appellees would have had knowledge of it. Accordingly, we find that the trial court erred in granting summary judgment against El Sabor's DTPA claims related to failure to disclose plumbing repairs and associated odors. We sustain point of error three in regards to these DTPA claims against Atascocita and HREG.
E. Breach of Contract
In point of error four, El Sabor contends that the trial court erred in granting summary judgment against its breach of contract claims. El Sabor made a number of breach of contract allegations in its petition, stating that appellees:
breached the Lease by [their] failure to repair the chronic plumbing problems of the Property, unreasonably withholding permission to alter the premises and use the common areas, failure to allow Plaintiff "Quiet Enjoyment" of the premises, and failure to prepare annual budgets and expense reports for the additional charges.
In their motion for summary judgment, appellees attacked the allegation that they failed to make required repairs by asserting that: (1) section 5.1 of the lease agreement made El Sabor, and not appellees, "responsible for maintaining the plumbing system at the subject premises"; and (2) the plumbing records "conclusively negate any claim of a failure to effect repairs." Regarding the first argument, section 5.1 made El Sabor responsible for plumbing repairs in the space that it leased; however, the plumbing records strongly suggest the existence of plumbing problems (reoccurring blockages, leaks, line sags, a two inch opening on a six inch line, and a possible broken line) in the common lines of the shopping center. Section 5.1 does not obligate El Sabor to repair the common lines in the center, only the plumbing within its leased space. Appellees's second argumentCthat the plumbing records conclusively negate a claim of failure to repairCis also incorrect. The records reflect repetitive clearing of clogged lines, not repairs to the system. There are a couple of notations regarding repairing waterlines in late 1999 and early 2002, but there is also a notation in late 2000 that the customer (presumably appellees) did not want the plumber to repair a leak. The records do not conclusively establish that all necessary repairs were made. Accordingly, the trial court erred in granting summary judgment against El Sabor's breach of contract claim for failure to make plumbing repairs. We sustain point of error four in regards to this breach of contract claim against Atascocita and HREG.
Regarding El Sabor's remaining breach of contract claims, appellees alleged in their motion, among other things, that there was no evidence that any such breaches had caused El Sabor any damages. In its response, El Sabor failed to support these claims with any evidence of damages. Accordingly, the trial court properly granted summary judgment against these claims. See TEX. R. CIV. P. 166a(i). Thus, we overrule point of error four in regards to these claims.
F. The "As Is" Clauses, Causation, and Implied Warranty
In points of error five through eight, El Sabor contends that the trial court erred in granting summary judgment against its cause of action for breach of the implied warranty of suitability. In points of error six and eight, El Sabor contends that the trial court erred if it granted summary judgment on each of its causes of action based on application of the "as is" clauses in the lease agreement.
In two of their motions for summary judgment, appellees argued that the "as is" clauses in the lease agreement defeat the causation elements in El Sabor's DTPA, negligence, nuisance, and breach of contract causes of action. They further contended that because the "as is" clause in section 13.17 of the lease contains an express waiver of the implied warranty of suitability, this clause also defeats El Sabor's breach of implied warranty claims. In Prudential Insurance Co. of America v. Jefferson Associates, Ltd., the Texas Supreme Court held that an "as is" clause in a contract for the sale of land can defeat the causation elements of tort claims based on the physical condition of the property. 896 S.W.2d 156, 161 (Tex. 1995). In Gym-N-I Playgrounds, Inc. v. Snider, the court extended the Prudential holding to cases involving lease agreements. 220 S.W.3d 905, 914 (Tex. 2007). The court further held that the implied warranty of suitability in commercial lease agreements could be waived by an express clause in the lease. Id. at 910-14.
In its response to the motion for summary judgment, El Sabor argued that (1) the "as is" clauses in the lease agreement do not apply to problems existing outside of the "Demised Premises," and (2) El Sabor was fraudulently induced into the agreement. We begin by examining the first argument. Finding that the "as is" clauses do not defeat the causation elements of El Sabor's causes of action, even if the clauses are enforceable under Prudential, we need not address the fraudulent inducement argument.
To reiterate: appellees argue that El Sabor's acceptance of the premises on an as-is basis defeats the causation element of any cause of action based on the condition of the property and expressly waives the implied warranty of suitability. Thus, according to appellees, summary judgment was proper against El Sabor's claims based on plumbing problems and associated odors. El Sabor argues that even if enforceable, the "as-is" provisions do not contemplate problems outside of the "Demised Premises." Thus, according to El Sabor, the clauses would not apply to common plumbing line issues, and summary judgment was therefore not proper.
We begin by looking at the contract language itself. Two of the three "as is" clauses simply state that "Lessee accepts premises `AS IS.' Lessee will be responsible for any build out and repairs to the Demised Premises." "Premises" and "Demised Premises" are used interchangeably in the agreement. The third, and most fully developed clause, provides in part that: "Lessee has inspected the Demised Premises and accepts them in their existing condition, on an AS IS basis. . . . Lessee waives any implied warranty of Lessor that the Demised Premises are suitable for their intended commercial purposes." Although not defined in detail, it is clear from the agreement as a whole that "Demised Premises" (and therefore "Premises") refers to the actual retail space leased by El Sabor and not to the whole shopping center property. For example, the leased premises are described as being 2,500 square feet in area in the lease agreement, whereas the shopping center as a whole is described as encompassing 47,980 square feet. Additionally, section 1.2 of the lease suggests that El Sabor was leasing only the interior walls and the space between the walls and not the physical structure itself. This interpretation is bolstered by section 5.2, which describes the "Demised Premises" as a part of a building. Section 5.1 gives the lessor (Atascocita) the right to demand that the lessee (El Sabor) repair plumbing installations in the Demised Premises. Lastly, the right to use the shopping center's common plumbing lines is clearly implied in the lease, particularly since there are references to use of utilities, common areas and facilities, sanitary control, and "appurtenances." Control and responsibility for all common areas and facilities was retained by Atascocita.
Indeed, the "Description" section of the lease states that: "Lessor hereby leases the premises to Lessee, and Lessee leases and accepts, subject to the terms and conditions of this lease, the premises referred to as the Demised Premises. . . ."
In his affidavit, Novick stated that he understood the term "demised premises" to mean "the actual area of the restaurant, that is, from one wall to the other and from the ceiling to the floor."
Based on this analysis of the language in the agreement, we conclude that the "as is" provisions waive only those claims against appellees that were based on problems occurring in the "Demised Premises." Because, as discussed in detail above, El Sabor's claims relate to alleged plumbing problems and associated odors originating outside the "Demised Premises," they are not defeated by the "as-is" clauses. Accordingly, we find that the trial court erred to the extent it granted summary judgment on any of El Sabor's claims based on the "as is" clauses in the lease agreement.
In Prudential and Gym-N-I, the supreme court emphasized that when a party agrees to accept property on an as-is basis, the party is relying in large part on his or her own ability to inspect the property. See Gym-N-I, 220 S.W.3d at 914; Prudential, 896 S.W.2d at 161. It is difficult to imagine in the present case how El Sabor could have feasibly inspected the common lines of the shopping center to detect a plumbing problem prior to signing the lease. This fact further supports the conclusion that El Sabor did not agree to take the common plumbing lines on an "as-is" basis. It is equally unlikely that in agreeing to effect necessary repairs to the "Demised Premises" and "plumbing installations" that El Sabor agreed to be responsible for repairing the common plumbing lines at the shopping center.
Lastly, regarding the implied warranty theory of recovery, appellees asserted in their motion for summary judgment that (1) the evidence conclusively established that no latent defect existed at the property, and (2) there is no evidence of a latent defect at the property. As we have discussed above, the evidence does not conclusively establish the absence of plumbing and odor problems at the property, and in fact, there is more than a scintilla of evidence that such problems existed. Accordingly, the trial court erred in granting summary judgment against El Sabor's implied warranty claims. We sustain points of error five through eight in regards to the claims against Atascocita and HREG.
IV. Conclusion
The trial court erred in granting summary judgment favoring Atascocita and HREG on El Sabor's (1) negligence claims alleging failure to repair and failure to disclose, (2) nuisance claims, (3) DTPA claims alleging failure to disclose, (4) breach of contract claims for failure to make plumbing repairs, and (5) breach of implied warranty claims. The trial court further erred in granting summary judgment favoring Harber on El Sabor's DTPA claims. Accordingly, we reverse and remand these claims to the trial court for further proceedings. The trial court properly granted summary judgment regarding El Sabor's remaining causes of action raised in its petition, including additional claims against Harber as well as additional claims of negligence, DTPA violations, and breaches of contract. Accordingly, we affirm that portion of the judgment.
We affirm the trial court's judgment in part and reverse and remand the trial court's judgment in part for further proceedings in accordance with this opinion.