Eun Bok Lee v. Ho Chang Lee

411 S.W.3d 95, 2013 WL 4430882, 2013 Tex. App. LEXIS 10444
CourtCourt of Appeals of Texas
DecidedAugust 20, 2013
Docket01-12-00117-CV
StatusPublished
Cited by52 cases

This text of 411 S.W.3d 95 (Eun Bok Lee v. Ho Chang Lee) 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
Eun Bok Lee v. Ho Chang Lee, 411 S.W.3d 95, 2013 WL 4430882, 2013 Tex. App. LEXIS 10444 (Tex. Ct. App. 2013).

Opinion

OPINION

MICHAEL MASSENGALE, Justice.

Appellee Ho Chang Lee sued his former landlord, appellant Eun Bok Lee, for breach of contract, wrongful eviction, conversion, theft, and unjust enrichment after the conclusion of a 12-year leasing relationship. After a jury trial, the trial court entered judgment in favor of the tenant, but it did not award exemplary damages that the tenant requested and the jury found. The landlord appeals, primarily arguing that insufficient evidence supported the jury’s findings regarding several of the tenant’s theories of liability. The tenant also appeals, challenging the trial court’s failure to award exemplary damages in the judgment. We reverse the portion of the trial court’s judgment which awarded the tenant treble statutory damages for the amount of the security deposit, remand to the trial court for recalculation of the award of prejudgment interest, and affirm the judgment in all other respects.

Background

This appeal involves a dispute over whether, in the sale of a convenience-store business and the lease of its premises, several pieces of equipment connected to the store, including several large underground gasoline storage tanks, were sold or merely leased. In 1993, pursuant to a Korean-language sales agreement, Eun Bok Lee sold his business, “Lee’s Chevron,” to Ho Chang Lee. The parties also entered into a separate English-language lease agreement for the premises. The lease also had an addendum written in Korean.

The sales agreement was titled “Sales Contract.” At trial the parties introduced different English translations of the contract, which differed as to whether the contract transferred “ownership” or “possession” of items listed in the contract. Both translations identified Eun Bok Lee and his wife, “owners and operators of a gas station and convenience store known as Lee’s Chevron,” as “sellers,” with Ho Chang Lee and his wife identified as “buyers.” According to the buyer-tenant’s translation, the contract provides the following terms:

1. Name of Business: Lee’s Chevron’s assumed name shall be changed to the Buyers.
2. Sales Price: $120,000, plus inventory. The inventory shall be calculated as 30% less than retail price.
3. Items to Transfer of Ownership:
a. Inventory (as in the above, number 2)
b. Items:
Cashier Machine (one)
Air Compressor (one)
Ice Creame refrigerator (one)
Ice Cube refrigerator (one)
Dolly (one)
Fire Extinguisher (two)
Ladder (one)
Coffee Maker (one)
Filing Cabinet (one)
Walk in Cooler (one)
Ground Gasoline Tank (three)
4. Leased Items:
Ice Machine (one)
Soft Drink Dispenser (one)
Ice Cube Dispenser (one)
Credit Card Machine (one)
Alarm System (one)
Trash Dump (one)
*100 5. The installation cost of Gasoline Nozzle Vacuum System that is required by Texas or federal governments is expected to be about $20,000.00. It is planned that the construction is planned in November 1993. This cost will be paid by the Buyer; however, if the cost exceeds $20,000.00, Sellers agreed to pay Buyer the difference.
6. Payment: At the execution of the agreement, Buyer shall pay $15,000.00, and the remaining balance of the sales price shall be paid as soon as possible before the transfer of possession. The cost of inventory shall constitute a loan at interest of 8% per annum, and total amount due shall be paid in one or two years. In the event that total balance is not paid, the business shall not transfer.
7. Transfer: June 27, 1993, after business inventory shall be taken before transfer.

The seller-landlord’s translation differs in that paragraph 3 of the contract states: “Items identified for the transfer of the possession.” Also in the seller-landlord’s version, paragraph 7 references “Transfer of the Possession,” rather than simply “transfer.”

In accordance with this sales agreement, the buyer-tenant paid the seller-landlord $120,000 plus an additional $20,000 to $30,000 more for the value of the inventory. The buyer-tenant testified that he believed this purchase price included purchase of the items listed under “Items,” specifically including the underground storage tanks, because the landlord was worried about the risk of being responsible for a leakage of the tanks. The seller-landlord testified that he believed the $120,000 purchase price was paid to obtain the right to operate the business, but that the listed items of equipment, such as the storage tanks and walk-in cooler, were only temporarily being transferred to the possession of the buyer-tenant for the duration of the lease.

The agreement for the lease of the premises provided for a six-year term and monthly rent of $3,500. It provided that: “All alterations, additions, and improvements, except trade fixtures, installed at expense of Tenant, shall become the property of Landlord, and shall remain upon and be surrendered with the leased premises as a part thereof on the termination of this lease.” The lease also provided: “Adjustment to the rent, if any, for rent escalations, for percentage of net rent, or for increases in building operation costs (including, but not limited to insurance, custodial services, maintenance, and utilities) shall be set forth in an attached addendum.”

The lease addendum, titled “Additional Agreement,” stated with respect to the rent:

The rent shall be frozen for three years from the effective date of the lease. Thereafter, the rent shall be adjusted once every year, taking into account of increase in price index, property tax, insurance premium, etc. and in commensurate with such increase.

The addendum set the amount of the security deposit at $3,500, to be paid within one year of signing. The “owner” would purchase insurance for the building, while the lessee was obligated to purchase the insurance for the “gas tanks, fixtures and furniture, inventory, workmen’s compensation, liabilities and all others.”

Three years later, at the end of the period during which rent was set at $3,500, the landlord sent the tenant a “Gas Station Rent” contract. The contract provided that the monthly rent would increase from $3,500 to $4,300 a month, “and other terms shall remain unchanged.” Although the *101 tenant disagreed that the rent increase reflected a change based on the consumer price index as agreed in the lease addendum, he signed the new rent contract and paid the increased monthly rent.

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Cite This Page — Counsel Stack

Bluebook (online)
411 S.W.3d 95, 2013 WL 4430882, 2013 Tex. App. LEXIS 10444, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eun-bok-lee-v-ho-chang-lee-texapp-2013.