Eastern Castle International, LLC, Chun Bun Chan, and Fan Wu v. RPI Ridgmar Town Square, Ltd.

• Court: Court of Appeals of Texas
• Decided: January 11, 2024
• Docket: 02-23-00186-CV
• Status: Published

Opinion

In the Court of Appeals Second Appellate District of Texas at Fort Worth ___________________________ No. 02-23-00186-CV ___________________________

EASTERN CASTLE INTERNATIONAL, LLC, CHUN BUN CHAN, AND FAN WU, Appellants

V.

RPI RIDGMAR TOWN SQUARE, LTD., Appellee

On Appeal from the 348th District Court Tarrant County, Texas Trial Court No. 348-332986-22

Before Sudderth, C.J.; Kerr and Birdwell, JJ. Memorandum Opinion by Justice Kerr MEMORANDUM OPINION

Appellant Eastern Castle International, LLC leased retail space from RPI

Ridgmar Town Square, Ltd., and Appellants Chun Bun Chan and Fan Wu signed the

lease as Eastern Castle’s guarantors. Under the lease, failure to pay rent within ten

days of a written past-due notice was an event of default allowing RPI to recover

damages for unpaid rent and attorney’s fees.

After giving notice of default, RPI sued Eastern Castle for breach of the lease,

sued Chan and Wu for breach of their guaranty, and sought attorney’s fees under the

lease “and/or Section 38.001” of the Civil Practice and Remedies Code. RPI moved

for summary judgment and attached to its motion the affidavit of its president, Jeffrey

L. Olyan; the lease; the lease renewal agreement; its ledger showing amounts due and

owing by Eastern Castle; its counsel’s unsworn declaration in support of attorney’s

fees; and its demand letter.

Appellants objected to RPI’s summary-judgment evidence, complaining that

most of it was “inadmissible hearsay” presented by interested witnesses who had

failed to show personal knowledge and that the documents were insufficiently

authenticated. They complained that Olyan made a conclusory legal statement in

Paragraph 7 of his affidavit and objected to RPI’s counsel’s unsworn declaration on

2 attorney’s fees based on reasonableness and what they characterized as an internal

contradiction.1

The trial court granted RPI’s summary-judgment motion and then entered a

final judgment awarding RPI $210,710.90 in actual damages and $24,367.50 in

attorney’s fees.

In their first of two issues, Appellants complain that the attorney’s-fee award

was erroneous because “prevailing case law . . . holds limited liability companies

[(LLCs)] . . . cannot be held liable for attorney[’s] fees” under Section 38.001. They

further complain that Chan and Wu cannot be individually liable for attorney’s fees

under the guaranty if Eastern Castle, as an LLC, cannot be liable for attorney’s fees.

Appellants ignore that Section 38.001 was amended to include LLCs and that

the amendment applies to an attorney’s-fee award in an action commenced on or after

September 1, 2021. See Act of May 28, 2021, 87th Leg., R.S., ch. 665, §§ 1–3,

2021 Tex. Gen. Laws 1391, 1391 (codified at Tex. Civ. Prac. & Rem. Code Ann.

§ 38.001) (defining an “organization” against whom reasonable attorney’s fees may be

recovered as having “the meaning assigned by Section 1.002, Business Organizations

Code”); Tex. Bus. Orgs. Code Ann. § 1.002(62) (defining “organization” to include an

1 Appellants do not challenge the fees’ reasonableness on appeal. We address their internal-contradiction challenge below.

3 LLC). RPI sued Appellants on April 11, 2022, allowing it to recover attorney’s fees

from Eastern Castle under Section 38.001. We overrule Appellants’ first issue. 2

In their second issue, Appellants argue that the trial court erred by not

sustaining their form objections to RPI’s summary-judgment evidence or their

substantive objection to Paragraph 7 of Olyan’s affidavit3 and complain that RPI’s

attorney’s-fees evidence raises a fact issue.

The record does not reflect that Appellants secured an express ruling from the

trial court on any of the objections at, before, or very near the time that the trial court

entered its summary-judgment ruling. Cf. Tex. R. App. P. 33.1; FieldTurf USA, Inc. v.

Pleasant Grove ISD, 642 S.W.3d 829, 837 (Tex. 2022) (stating that preservation rules

apply to summary-judgment evidence); Seim v. Allstate Tex. Lloyds, 551 S.W.3d 161,

166 (Tex. 2018) (requiring express ruling on form objections to summary-judgment

evidence); Exxon Mobil Corp. v. Rincones, 520 S.W.3d 572, 583 (Tex. 2017) (stating that

objected-to evidence remains valid summary-judgment proof unless an order

2 Based on our resolution of Appellants’ first issue, we need not consider the lease as an alternative basis for the award. See Tex. R. App. P. 47.1. 3 “A defect is substantive if the summary[-]judgment proof is incompetent; it is formal if the summary[-]judgment proof is competent, but inadmissible.” Tri-Steel Structures, Inc. v. Baptist Found. of Tex., 166 S.W.3d 443, 448 (Tex. App.—Fort Worth 2005, pet. denied). Form defects include lack of personal knowledge or hearsay, Hobson v. Francis, No. 02-18-00180-CV, 2019 WL 2635562, at *5 (Tex. App.—Fort Worth June 27, 2019, no pet.) (mem. op.) (citing Tex. R. App. P. 166a(f)), and lack of proper authentication, Aerobic Maint. & Serv., Inc. v. First United Bank & Tr. Co., No. 2- 08-232-CV, 2009 WL 1425179, at *5 n.7 (Tex. App.—Fort Worth May 21, 2009, no pet.) (mem. op.).

4 sustaining the objection is reduced to writing, signed, and entered of record).4 Because

a form defect must be objected to and ruled on by the trial court for error to be

preserved, Seim, 551 S.W.3d at 166, Appellants have failed to preserve their form-

based evidentiary objections, and we overrule this portion of their second issue.

Further, in the trial court, Appellants complained that in Paragraph 7, Olyan

stated, “Landlord has fully performed of all obligations and conditions of the Lease.”

But the record reflects that Appellants’ objection ignored Olyan’s full statement,

which is, “Landlord fully performed its obligations under the Lease and Guaranty by

timely delivering possession of the Premises to Defendants at the start of the Lease and by complying

with all of its other obligations under the Lease and Guaranty.” [Emphasis added.] That is, the

statement, as set out in full, explains how RPI performed its obligations and

referenced the lease and guaranty that were also attached as summary-judgment

evidence, thus stating more than a mere legal conclusion. See Truitt v. Hatfield, No. 02-

21-00004-CV, 2021 WL 5742083, at *6 (Tex. App.—Fort Worth Dec. 2, 2021, no

pet.) (mem. op.) (“A conclusory statement is one that does not provide the underlying

4 The exception to the written requirement is for the trial court to make an on- the-record, unequivocal, oral ruling on a summary-judgment objection, FieldTurf USA, Inc., 642 S.W.3d at 838–39, which did not occur here. And although Appellants raised the same evidentiary objections in a new-trial motion filed 27 days after the trial court granted RPI’s summary-judgment motion and entered a final judgment, at this point in the proceedings, it was too late. See Seim, 551 S.W.3d at 165 (quoting with approval Dolcefino v. Randolph, 19 S.W.3d 906, 926 (Tex. App.—Houston [14th Dist.] 2000, pet. denied) (op. on reh’g), in which the court stated, “[I]t is incumbent upon the party asserting objections to obtain a written ruling at, before, or very near the time the trial court rules on the motion for summary judgment or risk waiver.”).

5 facts to support the conclusion and is not readily controvertible.”). 5 We overrule this

portion of Appellants’ second issue.

Finally, Appellants complained in the trial court and now on appeal in their

second issue’s discussion section that the last sentence of RPI’s counsel’s declaration

recites the wrong tenant and guarantor. Although Appellants claim that this raises a

fact issue, they do not explain how it does so, beyond noting that the tenant and

guarantor named in the last sentence “are not defendants in the instant case.” See Tex.

R. App. P. 38.1(i) (requiring an appellant’s brief to contain a clear and concise

argument for the contentions made, with appropriate citations to authorities and to

the record).

The declaration itself sets out Appellants’ names in the caption, along with this

case’s trial-court cause number, and RPI states in its appellee’s brief that the last

sentence represents an “obvious scrivener’s error.” The error did not appear to

confuse the trial court, which awarded the full amount of requested fees in its final

judgment. Compare Hernandez v. Lukefahr, 879 S.W.2d 137, 143 (Tex. App.—Houston

[14th Dist.] 1994, no writ) (stating that “[a] mere typographical error, when viewed in

the context of the entire affidavit, is not an inconsistency if it causes no confusion,”

and holding, in a medical-malpractice case, that the single mention of another

5 Chan and Wu asserted in their unsworn declarations that the COVID- 19 pandemic had made it impossible to pay rent but did not controvert Olyan’s assertions of RPI’s performance under the lease.

6 patient’s name did not create a fact issue when there remained no question that the

affiant otherwise referred to the correct patient), with FFP Mktg. Co. v. Long Lane

Master Tr. IV, 169 S.W.3d 402, 410 (Tex. App.—Fort Worth 2005, no pet.)

(illustrating the type of inconsistency sufficient to raise a fact issue: an affidavit

asserted beneficial ownership while the attached summary-judgment evidence showed

legal ownership). We overrule the remainder of Appellants’ second issue.

Having overruled both of Appellants’ issues, we affirm the trial court’s

judgment.

/s/ Elizabeth Kerr Elizabeth Kerr Justice

Delivered: January 11, 2024