Aaron Bigbee and Ahu Sipahioglu v. Samadian Family Limited Partnership

• Court: Court of Appeals of Texas
• Decided: September 19, 2022
• Docket: 05-20-00656-CV
• Status: Published

Opinion

Reversed and Modified in Part, Affirmed as Modified, and Opinion Filed September 19, 2022

S In The Court of Appeals Fifth District of Texas at Dallas No. 05-20-00656-CV

AARON BIGBEE AND AHU SIPAHIOGLU, Appellants V. SAMADIAN FAMILY LIMITED PARTNERSHIP, Appellee

On Appeal from the 471st Judicial District Court Collin County, Texas Trial Court Cause No. 471-00299-2018

MEMORANDUM OPINION Before Justices Partida-Kipness, Reichek, and Goldstein Opinion by Justice Partida-Kipness This appeal arises from a landlord-tenant dispute brought by appellants Aaron

Bigbee and Ahu Sipahioglu (Tenants) against appellee Samadian Family Limited

Partnership (Landlord). Tenants sued Landlord to recover damages from Landlord’s

refusal to refund their security deposit and unlawful exclusion of Tenants from the

property during the term of the lease. After a jury trial, the trial court rendered

judgment on the verdict in favor of Tenants, but also awarded Landlord its attorney’s

fees as a prevailing party. Tenants appeal the portion of the judgment awarding

Landlord its fees. After reviewing the briefs and the record, we conclude the trial court erroneously awarded Landlord its fees. We reverse the portion of the judgment

awarding Landlord attorney’s fees and conditional appellate fees, modify the

judgment to remove such awards to Landlord, and affirm the judgment in all other

respects.

BACKGROUND

On April 1, 2015, Tenants signed a residential lease (the Lease) with Landlord

for a residential property in Dallas, Texas. They paid a security deposit of $5,000,

and monthly rent of $2,500. The Lease had a primary term of one year and

automatically renewed on a month-to-month basis unless Tenants or Landlord

provided the other with written notice of termination as specified in the Lease. In

2016, the parties extended the Lease to April 30, 2017, and increased the monthly

rent to $2,600. When Tenants did not terminate the Lease in April 2017, the Lease

automatically renewed on a month-to-month basis. On May 30, 2017, Bigbee

provided Landlord written notice of termination and notified Landlord “he and his

family planned to be moved out of the Property by June 18, 2017, with the utilities

being transferred to [Landlord] shortly thereafter.” On June 16, 2017, Bigbee and

Malek Samadian met at the Property. Samadian informed Bigbee he uses a third-

party service to inspect the house for maintenance and repair items. Tenants moved

out on June 18, 2017. They asked Landlord to allow them to walk-through the

Property with Landlord or the third-party inspector so Tenants could make any

repairs deemed necessary by the inspection “in a cost-effective manner.” Tenants

–2– also asked to be given access to the Property until June 30, 2017, the end of the Lease

term. In response, Landlord told Tenants they would be given seventy-two hours

after completion of the inspection “to get all issues resolved.” On June 20, 2017,

Bigbee discovered the locks to the Property had been changed. After completion of

the inspection, the parties walked through the Property to inspect items that needed

to be repaired or replaced. Tenants received a list at that time of repairs identified by

the inspector. Four days later, Bigbee and Samadian conducted a final walk through

of the Property, and Bigbee turned over the final set of keys and remotes.

On July 10, 2017, Samadian informed Tenants they had not completed certain

repairs, and Landlord was withholding $1,055 from the security deposit to pay for

the repairs. This letter stated Landlord would forward a check for $3,945 to Bigbee,

which was the $5,000 security deposit minus the $1,055 for remaining repairs.

Landlord conditioned the offer of partial payment on Tenants agreeing not to dispute

the amount withheld from the security deposit. In his email response, Bigbee

declined the offer and countered with an offer to pay Samadian $500 rather than

$1,055. Thereafter, Bigbee received a check from Landlord for $3,945. Bigbee

emailed Samadian clarifying he would not deposit the check because he did not agree

to Samadian’s conditions. The parties did not resolve the issue concerning the partial

refund of the security deposit, and Tenants filed the underlying lawsuit.

Tenants sued Landlord for breach of contract, bad faith retention of the

security deposit under section 92.109 of the property code, and unlawful exclusion

–3– from the Property under section 92.0081 of the property code. Tenants sought

reimbursement of the $5,000 security deposit and statutory damages under the

property code. Landlord answered and filed counterclaims for breach of contract and

attorney’s fees pursuant to the Lease. Landlord contended Tenants breached the

Lease by tendering the property in materially worse condition than it was received

and failing to satisfy Tenants’ responsibilities for property maintenance.

After a two-day trial, the jury found Landlord failed to comply with the lease,

intentionally excluded Tenants from the property, and retained the security deposit

in bad faith. The jury found $0 damages for the Landlord’s breach of contract, $0

damages for the unlawful exclusion, and $3,945 in damages for wrongfully

withholding the security deposit. As for Landlord’s counterclaim, the jury found

Tenants breached the lease but awarded $0 to Landlord for that breach. The jury

awarded no attorney’s fees to either side.

Tenants and Landlord each sought post-trial relief. In their motion to disregard

jury answers, Tenants asked the trial court to award them attorney’s fees for their

wrongful exclusion and unlawful retention claims and disregard the jury’s award of

zero fees on those claims. Landlord objected to Tenants’ motion to disregard jury

answers. Landlord also moved for judgment notwithstanding the verdict. Landlord

asked the court to disregard the jury’s $0 fees award regarding Tenants’ breach of

contract and to award Landlord $30,264.50 in attorney’s fees as a prevailing party

on Tenants’ breach of contract claim.

–4– In the final judgment, the trial court granted Tenants’ and Landlord’s post-

trial motions and awarded the following damages and fee awards:

 $11,935 in actual and statutory damages to Tenants for Landlord’s violation of property code section 92.109;

 $3,500 in statutory damages to Tenants for Landlord’s violation of property code section 92.0081;

 $19,765 in attorney’s fees to Tenants “as the prevailing party on Plaintiffs’ statutory claims and on Defendant’s breach of contract counterclaim”;

 $30,264.50 in attorney’s fees to Landlord “as the prevailing party on Plaintiffs’ breach of contract claim”; and

 Conditional appellate fees for “the successful side in any appeal.”

Tenants filed a post-judgment motion that included a motion to modify the

judgment, plea to the jurisdiction, motion to disregard jury answers, and motion for

new trial (the post-judgment motion). Tenants asserted they should not be required

to pay Landlord’s attorney’s fees because Tenants, not Landlord, were the prevailing

parties in the dispute. Alternatively, Tenants requested a modified judgment

awarding them $3,945 in damages for their breach of contract claim and a new trial

to recover their attorney’s fees on that claim. Tenants also requested the trial court

dismiss Landlord’s counterclaim because Landlord lacked standing to sue. The trial

court denied Tenants’ post-judgment motion, and this appeal followed.

ANALYSIS

Tenants bring two issues on appeal. First, they contend the trial court erred by

concluding Landlord was a prevailing party and awarding Landlord its attorney’s

–5– fees. Second, Tenants argue Landlord lacked standing to assert its counterclaim.

Because it is dispositive of this appeal, we begin with Tenants’ first issue.

I. Standard of review

Whether a party is entitled to recover attorney’s fees under a contract is a

question of law we review de novo. Goldman v. Olmstead, 414 S.W.3d 346, 365–66

(Tex. App.—Dallas 2013, pet. denied) (applying de novo standard of review to order

awarding fees based on prevailing party provision of contract) (citing Holland v.

Wal-Mart Stores, Inc., 1 S.W.3d 91, 94 (Tex. 1999)); VSDH Vaquero Venture, Ltd.

v. Gross, No. 05-16-01041-CV, 2017 WL 3405312, at *2 (Tex. App.—Dallas Aug.

9, 2017, no pet.) (mem. op.).

II. Prevailing party status

Landlord sought its attorney’s fees under Paragraph 29 of the Lease, which

provides:

29. ATTORNEY’S FEES: Any person who is a prevailing party in any legal proceeding brought under or related to the transaction described in this lease is entitled to recover prejudgment interest, attorney’s fees, costs of service, and all other costs of the legal proceeding from the non-prevailing party.

Tenants maintain the trial court erred by awarding attorney’s fees to Landlord

because Landlord is not a “prevailing party” under the Lease. When interpreting a

contractual attorney’s fee provision in which the “prevailing party” term is left

undefined, as is the case here, we are to “presume the parties intended the term’s

ordinary meaning.” WWW.URBAN.INC. v. Drummond, 508 S.W.3d 657, 666 (Tex.

–6– App.—Houston [1st Dist.] 2016, no pet.) (quoting Intercont’l Grp. P’ship v. KB

Home Lone Star L.P., 295 S.W.3d 650, 653 (Tex. 2009)).

A. Applicable law

To be a prevailing party, the party must “obtain actual and meaningful relief,

something that materially alters the parties’ legal relationship.” Rohrmoos Venture

v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 485–86 (Tex. 2019) (quoting KB

Home, 295 S.W.3d at 659). “A defendant can obtain actual and meaningful relief,

materially altering the parties’ legal relationship, by successfully defending against

a claim and securing a take-nothing judgment on the main issue or issues in the

case.” Sunchase IV Homeowners Ass’n, Inc. v. Atkinson, 643 S.W.3d 420, 424 (Tex.

2022) (quoting Rohrmoos, 578 S.W.3d at 486); Blockbuster, Inc. v. C–Span Ent.,

276 S.W.3d 482, 491 (Tex. App.—Dallas 2008, pet. granted, judgm’t vacated

w.r.m.) (a prevailing party is “the party who successfully prosecutes the action or

defends against it on the main issue.”). Here, the trial court awarded Landlord its

attorney’s fees “as the prevailing party on [Tenants’] breach of contract claim.”

Landlord, thus, obtained that award as a defendant in the litigation. The specific

question before us, then, is whether Landlord successfully defended against Tenants’

claim Landlord breached the Lease.

Successfully defending on the main action typically means “obtaining a take-

nothing judgment on the main issue or issues in the case.” Bhatia v. Woodlands N.

Houston Heart Ctr., PLLC, 396 S.W.3d 658, 670 (Tex. App.—Houston [14th Dist.]

–7– 2013, pet. denied). “A prevailing party is one who is vindicated by the trial court's

judgment.” Robbins v. Capozzi, 100 S.W.3d 18, 27 (Tex. App.—Tyler 2002, no

pet.). For example, a defendant successfully defends against a claim that it breached

a contract when the jury finds the defendant did not breach the contract or was

excused for its breach. E.g., Rohrmoos, 578 S.W.3d at 486 (counter defendant was

prevailing party because jury found counter plaintiff breached first, and trial court

rendered take nothing judgment on counter plaintiff’s counterclaim); Bankcard

Processing Int’l, L.L.C. v. United Bus. Servs., L.P., No. 01-10-01079-CV, 2012 WL

3776024, at *9 (Tex. App.—Houston [1st Dist.] Aug. 30, 2012, pet. denied) (“UBS

was the prevailing party because it successfully defended this claim and the jury

found that it did not breach the contract.”).

In Rohrmoos, UTSW sued Rohrmoos for breach of a commercial lease. 578

S.W.3d at 476. Rohrmoos asserted a counterclaim for breach of contract against

UTSW. Id. The jury found Rohrmoos and UTSW each breached the lease, but

Rohrmoos breached first. Id. The trial court entered a take nothing judgment against

Rohrmoos on its counterclaim. Id. at 476–77. In the supreme court, UTSW

contended it was the prevailing party as a defendant because it successfully defended

against Rohrmoos’s counterclaim for breach of contract. Id. at 485. More

specifically, UTSW “successfully defended” against the counterclaim by obtaining

a jury finding that Rohrmoos breached first. Id. The Texas Supreme Court agreed

and held UTSW was a prevailing party entitled to attorney’s fees under the lease

–8– because UTSW “successfully defended against Rohrmoos’s breach of contract

counterclaim, and the trial court rendered a take-nothing judgment in UTSW’s favor

as a counter-defendant.” Id. at 486; see also Atkinson, 643 S.W.3d at 422, 424

(defendant was the prevailing party and entitled to recover attorney’s fees because

defendant obtained a take-nothing judgment on Atlkinson’s substantive claims).

This Court reached a similar result in Desio v. Bosque, No. 05-19-00224-CV,

2019 WL 6974762 (Tex. App.—Dallas Dec. 20, 2019, no pet.) (mem. op.). Mike

Del Bosque (Bosque) leased commercial property owned by Christine Flores Desio

and managed by her son, Frank (the Desios). Id. at *1. One lease was for property

on the first floor (the First-Floor Lease), and three leases were for second-floor suites

(the Second-Floor Leases). Id. After the Desios locked Bosque out of the property,

Bosque sued the Desios and asserted various claims, including breach of contract.

Id. The Desios filed a counterclaim for breach of contract. Id. In their counterclaim,

the Desios alleged Bosque defaulted on the leases by (1) abandoning the second-

floor premises and failing to pay rent and (2) damaging and failing to maintain the

first-floor premises. Id.

Following a bench trial, the trial court found in favor of Bosque on his claims

against the Desios and on the Desios’ counterclaim. Id. at *2. The trial court

specifically concluded Bosque was not in default under the leases, but the Desios

had breached the leases. Id. at *3. Bosque elected to recover on his breach of contract

claim. Id. at *2. The trial court rendered judgment in favor of Bosque on (1) his

–9– claims against the Desios; (2) the Desios’ claim for breach of contract; (3) the

Desios’ affirmative defense of failure to mitigate damages; and (4) Bosque’s

affirmative defense of prior material breach. Id. The judgment awarded Bosque zero

damages but awarded him attorney’s fees. Id. In conclusions of law, the trial court

concluded Bosque was entitled to recover reasonable and necessary attorneys’ fees

on his breach of contract claim against the Desios and on the Desios’ breach of

contract counterclaim against him. Id. at *3.

On appeal, this Court concluded Bosque was entitled to recover his fees as a

prevailing party on the Desios’ counterclaim (i.e., as a counter defendant), but not

on his contract claim against the Desios (i.e., as a plaintiff). Id. at **6, 7. We first

considered whether Bosque, as a counter defendant, “successfully defended against

[the Desios’] breach of contract counterclaim” Id. at *6. We noted the trial court

found in Bosque’s favor as to the Desios’ counterclaim and, “in doing so, the

findings and judgment altered the legal relationship between the parties . . .” Id.

Applying Rohrmoos, we concluded Bosque as a counter defendant was “a

‘prevailing party’ entitled under these leases to reasonable and necessary attorney’s

fees.” Id. More specifically, Bosque prevailed on the counterclaim by obtaining

favorable findings on the counterclaim (i.e., he was not in default under the lease,

the Desios breached the leases, and the Desios were not entitled to judgment on the

counterclaim). See id. at *6 (“In the findings of fact and in the judgment, the trial

–10– court found in appellee's favor as a counter-defendant.”). This analysis applies

equally to the facts presented in this case.

B. Application of law to facts

Here, Landlord argued below that it was entitled to recover attorney’s fees

because Landlord prevailed on Tenants’ breach of contract claim. In other words,

Landlord contended it was a prevailing defendant. On appeal, Landlord maintains it

was a prevailing party under the Lease because “it successfully defended the main

issue in the case,” which Landlord defines as “breach of the Lease” (i.e., the breach

of contract claim). According to Landlord, it prevailed on that claim because “the

jury found no damages and vindicated Landlord’s withholding of $1,055 from the

security deposit as reasonable.” Tenants contend Landlord did not prevail on

Tenants’ breach of contract claim because the jury found Landlord breached the

Lease. As a result, Landlord did not successfully defend against Tenants’ breach of

contract claim. We agree with Tenants.

The issue before us is whether Landlord successfully defended against

Tenants’ breach of contract claim and, as a result, was a prevailing defendant on that

claim. The jury found Landlord breached the Lease. Unlike the prevailing party in

Rohrmoos, Landlord did not obtain a jury finding as to whether Landlord or Tenants

breached first. Landlord obtained no finding to excuse its breach and was not

vindicated by the jury findings or judgment. Indeed, the finding that Landlord

breached the Lease contradicts Landlord’s contention it successfully defended

–11– against the contract claim. See Rohrmoos, 578 S.W.3d at 485 (UTSW “successfully

defended” against the counterclaim by obtaining a jury finding that Rohrmoos

breached first); see also Desio, 2019 WL 6974762 at *6 (Bosque was a prevailing

defendant after obtaining favorable finding he did not breach the leases); Bankcard

Processing Int’l, 2012 WL 3776024, at *9 (“UBS was the prevailing party because

it successfully defended this claim and the jury found that it did not breach the

contract.”).

We conclude the findings and judgment did not materially alter the legal

relationship between the parties, and Landlord obtained no meaningful relief from

them. See KB Homes, 295 S.W.3d at 655–66; see also Desio, 2019 WL 6974762 at

*7. Accordingly, Landlord did not “successfully defend” against Tenants’ claims

and was not a prevailing party under the Lease. Under this record, we hold as a

matter of law that Landlord was not a prevailing party as to Tenants’ breach of

contract claim and was not entitled to an award of attorney’s fees. We sustain

Tenants’ first issue.

III. Standing to assert counterclaims

In their second issue, Tenants assert Landlord lacked standing to assert a

counterclaim for breach of contract against Tenants. They ask this Court to consider

this issue if the counterclaim is relevant to the prevailing party analysis. As discussed

above, the trial court’s award of attorney’s fees to Landlord was not based on

Landlord’s counterclaim. The counterclaim is, therefore, not relevant to the

–12– prevailing party analysis at issue on appeal. Moreover, our determination of Tenants’

first issue is dispositive of the issues raised on appeal. Accordingly, we do not

address the merits of Tenants’ second issue.

CONCLUSION

Landlord was not a prevailing party on Tenants’ breach of contract claim.

Landlord, therefore, was not entitled to an award of attorney’s fees under the Lease.

Accordingly, we sustain Tenants’ first issue, reverse the trial court’s awards of

$30,264.50 in attorney’s fees to Landlord and conditional appellate fees to Landlord,

modify the judgment to remove the award of attorney’s fees and conditional

appellate fees to Landlord, and affirm the judgment as modified.

/Robbie Partida-Kipness/ ROBBIE PARTIDA-KIPNESS JUSTICE

200656F.P05

–13– S Court of Appeals Fifth District of Texas at Dallas JUDGMENT

AARON BIGBEE AND AHU On Appeal from the 471st Judicial SIPAHIOGLU, Appellants District Court, Collin County, Texas Trial Court Cause No. 471-00299- No. 05-20-00656-CV V. 2018. Opinion delivered by Justice Partida- SAMADIAN FAMILY LIMITED Kipness. Justices Reichek and PARTNERSHIP, Appellee Goldstein participating.

In accordance with this Court’s opinion of this date, we REVERSE the trial court’s awards of $30,264.50 in attorney’s fees and conditional appellate fees to appellee Samadian Family Limited Partnership, and MODIFY the judgment to remove the awards of attorney’s fees and conditional appellate fees to appellee Samadian Family Limited Partnership

It is ORDERED that, as modified, the judgment of the trial court is AFFIRMED.

It is ORDERED that appellants AARON BIGBEE AND AHU SIPAHIOGLU recover their costs of this appeal from appellee SAMADIAN FAMILY LIMITED PARTNERSHIP.

Judgment entered this 19th day of September 2022.

–14–