Ardmore, Inc F/K/A GHX Incorporated and Star Properties, LLC v. the Rex Group, Inc. D/B/A T-3 Support Services, Inc.

377 S.W.3d 45, 2012 Tex. App. LEXIS 3032, 2012 WL 1355737
CourtCourt of Appeals of Texas
DecidedApril 19, 2012
Docket01-11-00328-CV
StatusPublished
Cited by10 cases

This text of 377 S.W.3d 45 (Ardmore, Inc F/K/A GHX Incorporated and Star Properties, LLC v. the Rex Group, Inc. D/B/A T-3 Support Services, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ardmore, Inc F/K/A GHX Incorporated and Star Properties, LLC v. the Rex Group, Inc. D/B/A T-3 Support Services, Inc., 377 S.W.3d 45, 2012 Tex. App. LEXIS 3032, 2012 WL 1355737 (Tex. Ct. App. 2012).

Opinion

OPINION

LAURA CARTER HIGLEY, Justice.

This appeal concerns whether purchase options in two leases were properly exercised. Appellants, Ardmore, Inc. and Star Properties, LLC, appeal the trial court’s grants of summary judgment against them and in favor of appellee, The Rex Group, Inc. In one issue, Star Properties argues that the trial court erred by determining that The Rex Group had timely exercised its option to purchase from Star Properties. In two issues, Ardmore argues that the trial court erred by determining the statute of frauds barred the application of its option to purchase from The Rex Group because (1) the property was identified with reasonable certainty; (2) Ardmore fully performed under the contract; (3) Ardmore partially performed under the contract; and (4) The Rex Group is es-topped from asserting the statute of frauds defense. In a cross-appeal, The Rex Group challenges the sufficiency of the evidence to support the trial court’s award of attorneys’ fees in favor of The Rex Group and against Star Properties.

We affirm, in part, and reverse and remand, in part.

Background

This lawsuit concerned a dispute over ownership of certain commercial property located in Houston, Texas. There are three parties involved in the suit: Star Properties, the owner of the property; The Rex Group, the lessee of the property; and Ardmore, a sublessee of the property. Both the lease from Star Properties to The Rex Group and the sublease from The Rex Group to Ardmore contain purchase options, exercisable at the end of the lease from Star Properties to The Rex Group. At the end of the lease, The Rex Group attempted to exercise the purchase option in the lease, and Ardmore attempted to exercise the purchase option in the sublease. In turn, Star Properties asserted that The Rex Group’s attempt was ineffective, and The Rex Group asserted that Ardmore’s attempt was ineffective. The parties brought this litigation seeking to establish their respective claims to ownership of the property.

The commercial property at issue in this case is located along Ardmore Street in Houston, Texas. In 1991, the property in question was owned by Baker Hughes, Inc. and Combustion Engineering, Inc. Combustion Engineering later conveyed its interest in the property to ABB Prospects, Inc. Baker Hughes, Combustion Engineering, and ABB Prospects will be referred to collectively as the “Original Lessors.” The Original Lessors entered into a lease agreement with The Rex Group, Inc. in May 1991. The lease was effective until the end of November 1997. During the term of the lease — provided that proper notice was given — The Rex Group was authorized to purchase the property in question for $2,500,000.

The lease also prevented The Rex Group from assigning or subleasing any portion of the property to non-affiliated parties without obtaining the prior written consent of the landlord. Specifically, the lease provided, in pertinent part,

*50 Except for subleases to affiliates or subsidiaries of Tenant [The Rex Group] for which no consent to sublease shall be required by Landlord [the Original Lessors], Tenant may not sublet all or any portion of the Premises without the pri- or written consent of Landlord. Landlord shall not unreasonably withhold its required consent to a particular subletting provided [certain enumerated conditions exist]. Tenant shall not be relieved of any of its obligations hereunder by reason of any sublease of all or part of the premises.

The lease was amended by agreement of the parties at least seven times. Among other things, the amendments extended the term of the lease to July 2008, and modified the terms of the purchase option. As modified by the sixth amendment, the purchase option section of the lease provided, in pertinent part,

A. In consideration of the mutual covenants herein contained, Landlord grants to Tenant the option to purchase the Premises during the Term for $2,500,000 in accordance with this Section. This option to purchase may not be exercised to be effective at any time or times other than in the month of June, 2008 (the “Effective Month”).
[[Image here]]
D. Except as provided in subsection F. below, to exercise such purchase option, Tenant must ... (ii) give Landlord written notice of its intent to purchase at least 90 days prior to the first day of the applicable Effective Month....

The parties agree that, by the terms of these two subsections alone, The Rex Group’s deadline to exercise the purchase option was March 8, 2008.

As of 2001, both The Rex Group and Ardmore were subsidiaries of Industrial Holdings Incorporated, and both were operating their businesses in the commercial property subject to the lease. In 2001, Industrial Holdings began negotiations over a merger with T3 Energy Services. One condition of the merger was that Industrial Holdings would sell Ardmore prior to the merger.

As a result, Industrial Holdings approached Ben Andrews and Dan Ahuero, the executives then in charge of Ardmore, about purchasing Ardmore. Andrews and Ahuero agreed but insisted as part of the sale that they be allowed to remain on the leased premises and, if The Rex Group elected to exercise the purchase option in the lease, that they be allowed to purchase a lesser portion of the property.

To that end, The Rex Group entered into a sublease with Ardmore. The sublease provided that it was “subject and subordinate to” the lease. It also recognized that Ardmore was already subleasing a portion of the property. That portion of the property was defined as the “Premises” in the sublease “as more particularly described on Exhibit A.” Exhibit A consists of the following image:

*51 [[Image here]]

The sublease gave Ardmore continued use of the Premises along with “the nonexclusive right to use for vehicular and pedestrian access and vehicular parking, any and all driveways, parking areas, pedestrian walkways, and other common or shared areas, including, without limitation, the “Shared Drive” depicted on Exhibit A.”

The purchase option in the sublease provided, in pertinent part:

In the event that Sublessor [The Rex Group] elects to exercise the option to purchase the premises covered by the Base Lease (the “Entire Base Lease Premises”) in accordance with the terms of such purchase option contained in Section 27 of the Base Lease (the “Purchase Option”), Sublessor shall give Lessors the required written notice of Sub-lessor’s intent to exercise the Purchase Option (the “Exercise Notice”) no later than the thirtieth (30th) day (“Sublessor Exercise Deadline”) prior to the last day by which the Purchase Option may be timely exercised pursuant to Section 27.-D(ii) of the Base Lease.... Sublessee [Ardmore] shall thereupon be entitled, contemporaneously with Sublessor’s acquisition of the Entire Base Lease Premises, to acquire from Sublessor that portion of the Entire Base Lease Premises (“Option Property”) as is depicted on the drawing attached hereto as Exhibit D ....

The parties agree that the Ardmore’s exercise deadline, as defined in the sublease, was February 2, 2008.

Exhibit D consists of the following image:

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Bluebook (online)
377 S.W.3d 45, 2012 Tex. App. LEXIS 3032, 2012 WL 1355737, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ardmore-inc-fka-ghx-incorporated-and-star-properties-llc-v-the-rex-texapp-2012.