Casselsco, Inc. v. Fouzia Ikram Alvi, Individually and D/B/A Super Kool Kidz Preschool

Court of Appeals of Texas·Decided August 3, 2021·No. 01-20-00324-CV·Published

Opinion

Opinion issued August 3, 2021

In The

Court of Appeals

For The

First District of Texas

and in failing to give her a written accounting to show why the security deposit was retained, and (3) violating provisions of the Texas Business and Commerce Code by filing assumed-name designations that belonged to Alvi.

The trial court granted summary judgment in Alvi’s favor, implicitly determining that Alvi had, as summary-judgment movant, conclusively proven all elements of her causes of action. The summary judgment (1) rescinded the commercial lease agreement between the parties based on Alvi’s claim that Casselsco had breached its implied warranty of suitability, (2) awarded Alvi statutory damages and attorney’s fees based on her Property Code claims, and (3) ordered Casselsco to withdraw the assumed-name filings for violating the Business and Commerce Code. In one issue with two sub-points, Casselsco contends that the trial court erred by granting summary judgment in Alvi’s favor on her claim of breach of implied warranty of suitability and on her Property Code claims. Casselsco does not challenge the portion of the summary judgment related to Alvi’s Business and Commerce Code claim.

We affirm in part, reverse in part, and remand for further proceedings.

Background

On April 15, 2019, Alvi, acting individually and doing business as Super Cool Kidz Preschool, signed a commercial lease agreement (the Lease) with Casselsco to rent a building to use as a daycare. When she signed the Lease, Alvi paid Casselsco

a $9,000 security deposit. The Lease’s term was from April 22, 2019, until April 12, 2024. The monthly rent was $3,000.

On May 1, 2019, Alvi took possession of the building and began to prepare it for opening her daycare. Alvi detected the odor of mold and retained Dolphin Environmental Consultants to conduct a mold assessment, which Dolphin conducted on May 22, 2019. Dolphin did a visual inspection of the premises, collected surface samples, and tested the moisture levels in the building.

Dolphin produced a written report containing its findings of the mold assessment and its recommendations. In the report, Dolphin stated that “the affected area” was in the building’s five classrooms, which had “visible potential mold on the carpet and walls.” Dolphin stated in the report that it had been “informed [that] there was a previous roof leak that was allegedly repaired.” It had also been informed that “the HVAC system had been turned off for several days.” Dolphin noted that the temperature and relative humidity levels [in the build] were elevated.” It determined that “[t]he interior average Temperature readings in the SW Room and NE Room was 82° Fahrenheit and [was] not acceptable.” Dolphin also found that “the average Relative Humidity readings was 75% and [was] not acceptable.” It concluded that “both readings are not within good Indoor Air Quality ranges.”

Testing of the carpet in two of the classrooms indicated high levels of mold growth. Testing of one of the walls in a classroom indicated medium to high mold

levels. Dolphin made recommendations for abating the mold, which included replacing the carpeting and wainscoting in the classrooms and cleaning the building’s surfaces. Dolphin indicated that the work could be done by a general contractor.

On July 1, 2019, Alvi informed Casselsco that she was rescinding the Lease, and later testified in an affidavit that she surrendered the building back to Casselsco on that date. According to Alvi, Casselsco told her that it would release her from the Lease if she paid six-months rent or if she forfeited her security deposit. Alvi refused both options.

On July 26, 2019, Alvi had Dolphin perform a second mold assessment. The assessment included sampling the air inside the building. Dolphin’s report for the second assessment stated that probable mold was visible on the HVAC vents and filters. The report noted “highly elevated raw mold spore counts” of certain mold types in one of the classrooms. Testing detected two other mold types that should not be present in an interior air space. The report recommended that the building not be occupied by the daycare until the “airborne mold spores could be reduced to an acceptable level.”

On August 16, 2019, Alvi’s attorney, C. Cammack, sent a demand letter to Casselsco’s registered agent by certified and regular mail. In the letter, he stated that Alvi “had no choice but to surrender the leased premises back to Casselsco, Inc. on

July 1, 2019 based on the significant presence of mold in the premises.” Cammack also notified Casselsco that, “[b]y her surrendering the premises back to you on July 1, 2019, my client [Alvi] deems the lease as rescinded.” Cammack demanded that Casselsco return Alvi’s security deposit to her by August 30, 2019. On August 24, 2019, Cammack sent another letter to the registered agent, stating that the August 16 letter had been returned to his office. Cammack enclosed the August 16 letter and sent the letter to Casselsco’s registered agent at three alternate addresses.

Casselsco did not return Alvi’s security deposit. In October 2019, Alvi sued Casselsco. Her amended petition (the live pleading here) asserted claims against Casselsco for violating Property Code sections 93.005 and 93.011, alleging that Casselsco had acted in bad faith when it failed either to return her security deposit or to provide a written, itemized accounting of the security-deposit deductions within 60 days after she surrendered possession of the premises. See TEX. PROP. CODE §§ 93.005(a), 93.011. As statutorily permitted damages, Alvi sought to recover three times her $9,000 security deposit, plus $100, and her attorney’s fees. See id. § 93.011(a) (“A landlord who in bad faith retains a security deposit in violation of this chapter is liable for an amount equal to the sum of $100, three times the portion of the deposit wrongfully withheld, and the tenant’s reasonable attorney’s fees . . . .”).

Alvi also asserted a claim for breach of implied warranty of suitability. Based on that claim, she sought recission of the Lease.

Alvi further claimed that Casselsco had violated Business and Commerce Code sections 71.153 and 71.201 by filing an assumed-name certificate for the names “Super Kool Kidz” and “Super Kool Kidz Preschool” with the Texas Secretary of State’s Office. See TEX. BUS. & COM. CODE §§ 71.153, 71.201. Alvi alleged that Casselsco had filed the names “in a bad faith, fraudulent effort to prevent [her] from using same [assumed business names] in Harris County, Texas.” Alvi asserted that the Business and Commerce Code required Casselsco to withdraw the assumed-name filing.

Casselsco answered the suit and filed a counterclaim against Alvi. Casselsco asserted a breach-of-contract claim, alleging that Alvi had breached the terms of the Lease. It also requested a declaratory judgment, seeking a determination that Alvi had a duty to fulfill her obligations under the Lease, failed to do so, and had breached the Lease. Casselsco sought to recover “the rental amount for the entirety of the [L]ease agreement, damages and costs,” plus its attorney’s fees.

Alvi moved for summary judgment. She asserted that she was entitled to summary judgment as a matter of law on her claims against Casselsco for violating Property Code sections 93.005 and 93.011, for breaching its implied warranty of suitability, and for violating Business and Commerce Code sections 71.153 and

71.201. In support of her motion, Alvi offered (1) her own affidavit, (2) the Lease, (3) Dolphin’s mold assessment reports, (4) Cammack’s demand letters to Casselsco, (5) Alvi’s assumed-name certificate, and (6) records from the Secretary of State. To support her requested attorney’s fees, Alvi offered Cammack’s affidavit testimony along with an itemized time sheet showing the specific tasks Cammack had performed, the amount of time he had spent on each task, and his hourly rate.

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Casselsco, Inc. v. Fouzia Ikram Alvi, Individually and D/B/A Super Kool Kidz Preschool, (Tex. Ct. App. 2021).

Casselsco, Inc. v. Fouzia Ikram Alvi, Individually and D/B/A Super Kool Kidz Preschool (Casselsco, Inc. v. Fouzia Ikram Alvi, Individually and D/B/A Super Kool Kidz Preschool) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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