F-Star Socorro, L.P. and Five Star International Holdings Incorporated v. Thomson, Inc., Formerly Known as Thomson Consumer Electronics, Inc.

CourtCourt of Appeals of Texas
DecidedMarch 31, 2010
Docket08-07-00143-CV
StatusPublished

This text of F-Star Socorro, L.P. and Five Star International Holdings Incorporated v. Thomson, Inc., Formerly Known as Thomson Consumer Electronics, Inc. (F-Star Socorro, L.P. and Five Star International Holdings Incorporated v. Thomson, Inc., Formerly Known as Thomson Consumer Electronics, 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.

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F-Star Socorro, L.P. and Five Star International Holdings Incorporated v. Thomson, Inc., Formerly Known as Thomson Consumer Electronics, Inc., (Tex. Ct. App. 2010).

Opinion

COURT OF APPEALS EIGHTH DISTRICT OF TEXAS EL PASO, TEXAS

FIVE STAR INTERNATIONAL § HOLDINGS INCORPORATED AND No. 08-07-00143-CV F-STAR SOCORRO, L.P., § Appeal from the Appellants, § 41st Judicial District Court v. § of El Paso County, Texas § THOMSON, INCORPORATED, (TC# 2001-3644) § Appellee.

OPINION

Five Star International Holdings, Inc. (“Five Star”) and F-Star Socorro, L.P. (“F-Star”)

appeal from a judgment awarding over $1.6 million to Thomson Incorporated (“Thomson”) for

breach of a commercial lease agreement. Five Star raises sixteen issues on appeal challenging

the legal and factual sufficiency of the evidence, the admissibility of expert testimony, the jury

charge, and the attorney’s fees award.

On December 11, 1997, Five Star and Thomson entered into a twelve-year lease

agreement where Thomson agreed to lease sixty-seven acres containing 950,000 square feet of

commercial and industrial space from Five Star. The leased property was located within a larger

tract of land owned by Five Star, consisting of the commercial facility and agricultural land. As

part of the agreement, Five Star committed to build the facility to meet Thomson’s warehousing

and distribution needs.

The lease required rental payments in two categories: “base rent” and “additional rent.”

“Base rent” was the monthly rental amount for the facility. Thomson paid $113,333.33 for the first month’s base rent at the time the parties executed the lease. In months 2-120 Thomson was

obligated to pay $269,166.67, with a rental increase in month 121 to $336,458.34 for the balance

of the lease term. “Additional rent” included the cost of: (1) operating and maintaining the

“common area;” (2) real estate taxes; and (3) insurance premiums as required by the lease. These

additional charges were to be determined and paid as follows:

Landlord shall furnish Tenant a written statement estimating: (i) Common Area expenses; (ii) the total taxes dues for said calendar year; and (iii) total insurance premiums due for the year (herein collectively the ‘Estimate’). Beginning with the first month following receipt of such statement, Tenant shall pay Landlord monthly, as additional rent one-twelfth (1/12) of the Estimate. In addition, Tenant shall pay with the rental payment for the first month following receipt of the Estimate an amount equal to the difference between prior year and the current year for the number of months elapsed in the calendar year prior to receipt of the Estimate, so as to bring said monthly payments current for the year. As soon as practical after the end of each calendar year, but not more than one hundred twenty (120) days after the applicable year end, Landlord shall furnish Tenant a written statement showing the total Common Area expenses, taxes and insurance premiums actually due for the calendar year ended (the ‘Actual Expenses’). If the Actual Expenses exceed the Estimate, then Tenant agrees to pay within ten (10) days of receipt of said statement, the difference between the Actual Expenses and the Estimate. If the Estimate exceeds the Actual Expenses, then Landlord agrees to refund the difference at the time that such statement is furnished, provided Tenant is not then in default in the performance of any of its obligations under this Lease. The Landlord shall make the Estimate only once per year. All Actual Expenses are limited to expense items actual and necessary for the operations and maintenance of the Facility and Premises. All services provided by Landlord are limited to competitive costs. . . . The first payment of such additional rent shall be due on the Rent Commencement date.

Tenant may review Landlord’s records annually with respect to such charges at Landlord’s office upon thirty (30) days prior notice to Landlord.

Thomson took possession of the premises on June 15, 1998. Prior to Thomson moving

into the facility, Five Star transferred its interest in the leased premises as the landlord to F-Star.

F-Star, in turn, hired F-Star Property Management to manage the property. From June 15, 1998,

-2- forward, Thomson dealt exclusively with F-Star Property Management and F-Star regarding the

lease. Five Star, F-Star, and F-Star Property Management are owned and controlled to varying

degrees, by Mr. Gerald Ayoub of El Paso. Between 1998 and 2005, Thomson paid

approximately 24 million dollars for rent, approximately 2.3 million dollars for common area

expenses, over 3 million dollars in taxes, and approximately $226,000 for insurance.

On September 27, 2001, Thomson filed suit against Five Star alleging Thomson had been

overcharged for common area expenses. In its third amended petition, Thomson also alleged that

both Five Star and F-Star had breached the lease agreement by consistently overcharging

Thomson for property taxes and common area expenses and by refusing to refund the

overpayments. Thomson claimed that it was overcharged for property taxes because F-Star did

not pass on the benefit of tax abatements and exemptions which the landlord received from local

taxing authorities. At trial, Thomson also claimed that F-Star failed to segregate the property

taxes due on the leased property from the taxes due on the larger tract, and was therefore billing

Thomson for taxes owed on property beyond the acreage covered by the lease.

On January 30, 2006, the trial court granted partial summary judgment in Thomson’s

favor. The court determined that as a matter of law the lease required Five Star and F-Star to

pass on the benefit of any tax abatements and exemptions to Thomson in its calculation of the

taxes owed on the leased property. The case was tried to a jury in December of 2006. The jury

returned a verdict in Thomson’s favor, finding that Thomson had not waived its right to recover

the overpayment, that Thomson had been overcharged for real estate taxes in the years 1998-

2005 in the amount of $979,029, and that Thomson had been overcharged for common area

expenses. The trial court entered its final judgment on March 16, 2007. Thomson was awarded

-3- $1,652,963 for breach of contract, plus attorneys fees and costs.

Five Star has combined its sixteen issues into five groups. The first group consists of

Issues One, Two, and Three, all of which challenge the jury’s finding that Thomson did not

waive its right to recover. The waiver issue was presented to the jury in Question One of the

charge. Neither party has challenged the form or contents of the question on appeal. The

question appeared in the charge as follows:

Do you find from the preponderance of the evidence that [Thomson] waived the right to demand that the excess taxes and the excess common area expenses, if any, be paid back to it

a. By signing or not returning Estoppel Certificates . . .; or

b. By paying invoices for taxes and for common area expenses as they were submitted; or

c. By not objecting at the time of the audit (Exhibit D1)?

“Waiver” was defined for the jury as “the intentional surrender of a known right or

intentional conduct inconsistent with claiming that right.” The jury answered “no.”

In Issue One, Five Star argues that Thomson waived its right to recover because Thomson

failed to timely respond to the landlord’s requests for estoppel certificates as required under the

lease. As Five Star has not challenged the submission of the issue to the jury, we construe this

argument as a challenge to the legal sufficiency of the evidence supporting the jury’s adverse

finding in part “a” of Question One. In Issues Two and Three, Five Star challenges the factual

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F-Star Socorro, L.P. and Five Star International Holdings Incorporated v. Thomson, Inc., Formerly Known as Thomson Consumer Electronics, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/f-star-socorro-lp-and-five-star-international-hold-texapp-2010.