Opinion
No. 05-03-00097-CV.
Opinion Filed February 19, 2004.
On Appeal from the County Court at Law No. 2 Grayson County, Texas, Trial Court Cause No. 2002-2-410-Cv.
Affirm.
Before Justices WHITTINGTON, JAMES, and O'NEILL.
MEMORANDUM OPINION
In this landlord/tenant dispute, appellants International Innovations, Inc. and Al Rinehart appeal a judgment granted in favor of appellees Grayson County and the Grayson County Airport Board. Appellants present three issues in which they contend (1) appellant Rinehart is not personally liable because he did not sign the lease in question, (2) the trial court erred in finding that an apartment located on the leased premises was a fixture, and (3) the trial court erroneously calculated the rent due on the premises. For the following reasons, we affirm the trial court's judgment.
In 1982, the Grayson County Airport entered into a lease agreement with appellee International Innovations, Inc. to lease 11, 900 square feet of ground space at the Grayson County Airport. The leased premises included "all improvements now or hereafter located" on the premises. The lease specifically stated that any additions or improvements to the leased premises shall be deemed fixtures and become part of the leased premises.
The initial term of the lease was twenty years, expiring on April 30, 2002. The lease also granted International Innovations four five year options to extend the lease. The lease provided that "[a]nnual rental for each year of any option term shall be set by the Grayson County Airport Board no later than March 1 of each year of the option term of this Lease." The lease specifically allowed the Airport Board to set the rent "in its discretion based upon a survey of comparable facilities at comparable airports, including the buildings at the Grayson County Airport."
Before expiration of the initial term, International Innovations notified the airport that it was exercising its option to renew the lease for five years. After conducting a study, the Grayson County Airport Board set the rental for the leased premises at $1,410.90 per month. In setting the rent, the Board considered as part of the leased premises a 5,000 square foot hangar that International Innovations had constructed on the leased premises, as well as an apartment and office space it had installed within the hangar. International Innovations thereafter refused to pay the increased rent.
Grayson County and the Grayson County Airport Board subsequently sued International Innovations and Al Rinehart, its president and sole owner, seeking possession of the leased premises and past due rent. Following a bench trial, the trial court entered a judgment in favor of Grayson County and the Airport Board against International Innovations and Rinehart, jointly and severally. This appeal followed.
In their first point of error, appellants contend the trial court erred in entering a judgment against Rinehart in his individual capacity because he did not sign the lease. However, the trial court did not enter judgment against Rinehart because he signed the lease. Rather, the trial court's findings of fact and conclusions of law show that the trial court entered judgment against Rinehart because Rinehart was personally liable as the purported president and 100% owner of International Innovations, whose corporate charter was forfeited for failing to pay taxes. Thus, liability was imposed upon Rinehart under section 171.255 of the Texas Tax Code. See Tex. Tax Code Ann. § 171.255 (Vernon 2002). Appellants, however, have made no effort to show the trial court erred in entering judgment against Rinehart under this theory. It is appellants' burden to show this Court the trial court erred. See Wilkinson v. Dallas/Fort Worth Intern. Airport Bd., 54 S.W.3d 1, 18 (Tex. App.-Dallas 2001, pet. denied), cert. denied, 534 U.S. 1128 (2002); see also Tex.R.App.P. 38.1(h). Appellants have failed to meet this burden. We resolve the first issue against appellants.
In their second issue, appellants contend the evidence is legally insufficient to support the trial court's finding that the apartment structure located within the hangar was a fixture. The trial court's findings of fact have the same force and dignity as a jury's verdict. Rapp Collins Woldwide, Inc. v. Mohr, 982 S.W.2d 478, 481 (Tex. App.-Dallas 1998, no pet.). In reviewing a legal sufficiency complaint, we consider only the evidence and inferences that support the finding and disregard all evidence and inferences to the contrary. Id. We uphold the finding if more than a scintilla of evidence exists to support it. Id.
We begin by noting that the lease in this case specifically states that all improvements to the leased premises would be deemed fixtures. Appellants have not attempted to show the apartment inside the hangar did not constitute an "improvement" as contemplated by the lease. If a written lease agreement contains provisions regarding the parties' property rights in fixtures, the lease controls. See Alexander v. Cooper, 843 S.W.2d 644, 646 (Tex. App.-Corpus Christi 1992, no writ); Fenlon v. Jaffee, 553 S.W.2d 422, 429 (Tex.Civ.App.-Tyler 1977, writ ref'd n.r.e.). Because appellants have not attempted to show the apartment was not an improvement, they have not established reversible error.
In any event, an improvement, like a fixture, requires annexation to realty, and until something in annexed to realty, it cannot be considered an improvement. Sonnier v. Chisholm-Ryder Co., 909 S.W.2d 475, 479 (Tex. 1995); Reames v. Hawthorne-Seving, Inc., 949 S.W.2d 758, 761 (Tex. App.-Dallas 1997, pet. denied). There are three factors relevant to determining whether personal property has become so annexed: (1) the mode and sufficiency of annexation, (2) the adaptation of the article to the use or purpose of the realty, and (3) the intention of the party who annexed the personal property. Logan v. Mullis, 686 S.W.2d 605, 607 (Tex. 1985). Of the three factors, intent is the preeminent factor while the others constitute evidence of intent. Id. Intent can be inferred from surrounding circumstances and other objective manifestations of intent. See id.
Considering only the evidence and inferences supporting the trial court's findings, we conclude there is more than a scintilla of evidence that the apartment was annexed to realty. The apartment is a residential structure located within the hangar. The plumbing system in the apartment is attached to the plumbing of the hangar. There is also evidence the apartment could not be moved without dismantling it. We conclude there is more than a scintilla of evidence to support the trial court's finding that the apartment was annexed to the real property. We resolve the second issue against appellants.
Appellants direct this Court to evidence contrary to the trial court's finding to support their legal sufficiency complaint. We, of course, must disregard this evidence in a legal sufficiency review. See Rapp Collins Worldwide, 982 S.W.2d at 481.
In the third issue, appellants contend the trial court erroneously calculated the rent due. However, contrary to appellants' suggestion, the trial court did not itself determine the fair rental value of the leased premises. Rather, the trial court found only that the Board properly exercised its discretion in setting the fair rental value as allowed by the lease. We conclude the evidence supports this finding. The lease agreement provided "[f]or the first year of the first option term the [Airport Board] shall set such rental in its discretion based upon a survey of comparable facilities at comparable airports, including the buildings at the Grayson County Airport." To show the Board properly exercised its discretion, appellees presented evidence that the Board first determined the square footage of the hangar and the apartment/office space within. Because Rinehart did not give the Board access to the apartment and office space, the Board estimated the square footage based on its discussions with Rinehart. The Board then determined a rental rate per square foot by comparing rents charged at other facilities. Because the Board was unable to find any facility comparable to the leased premises at the Grayson County Airport, it used comparables from other nearby airports. The rent charged for the hangar was in the middle range of rents charged by surrounding airports. The Board discounted the rent for the apartment/office space by 40 percent compared to other types of space because it was located within the hangar. We conclude there is more than a scintilla of evidence to show the Board operated within its discretion in setting the new rental rate for the leased premises. We resolve the third issue against appellant.
We affirm the trial court's judgment.