Harry Hines Millennium Market Place, LLC v. Pawn TX, Inc. F/K/A First Cash, Ltd.

Court of Appeals of Texas·Decided February 28, 2023·No. 05-21-00778-CV·Published

Opinion

Affirmed and Opinion Filed February 28, 2023

S In The

Court of Appeals

Fifth District of Texas at Dallas No. 05-21-00778-CV

HARRY HINES MILLENNIUM MARKET PLACE, LLC, Appellant V.

PAWN TX, INC. F/K/A FIRST CASH, LTD., Appellee

On Appeal from the 44th Judicial District Court Dallas County, Texas

Trial Court Cause No. DC-20-02585

MEMORANDUM OPINION

Before Justices Molberg, Partida-Kipness, and Carlyle Opinion by Justice Partida-Kipness The case involves a commercial lease dispute. Appellant Harry Hines

Millenium Market Place, LLC (Harry Hines) contends appellee Pawn TX, Inc. f/k/a First Cash, Ltd. (Pawn TX) failed to vacate the premises at the end of the lease and became a holdover tenant for two months. Harry Hines appeals the summary judgment dismissing its breach of contract action and the judgment in favor of Pawn TX on its Chapter 93 counterclaim for bad faith retention of Pawn TX’s security deposit. We affirm.

BACKGROUND

This case involves a lease of commercial property located at 11250 Harry Hines Boulevard, Dallas, Texas 75229 (the Property). The original parties to the Lease were Harry Hines as landlord and National Jewelry Exchange, Inc. (National Jewelry) as tenant. In 2009, National Jewelry assigned the Lease to First Cash Ltd. n/k/a Pawn TX, Inc. Following the assignment, Pawn TX operated a pawn shop business at the Property. The Lease term ended on May 31, 2013. The Lease, however, included two separate five-year option periods through which the parties had the option to extend the lease term. On January 23, 2013, Harry Hines and Pawn TX triggered the first option period, amended the Lease, and extended the lease term from June 1, 2013, to May 31, 2018. As the Lease neared the end of its term, Pawn TX attempted to negotiate a lower monthly rent payment. Negotiations were unsuccessful, and Pawn TX decided to relocate its business to a different location (the New Property). Pawn TX made its last monthly lease payment to Harry Hines on May 1, 2018, in the amount of $10,639.18. According to Mike McCollum, Pawn TX’s district manager, Pawn TX “vacated and surrendered” the Property to Harry Hines on May 31, 2018.

Pawn TX transmitted a “Notice of Forwarding Address and Demand for Security Deposit” (the Notice and Demand) to Harry Hines on July 12, 2018. In the Notice and Demand, Pawn TX requested that Harry Hines return Pawn TX’s security deposit of $9,252.00 and provided its forwarding address to which the deposit could

be mailed. Harry Hines did not return the security deposit. Pawn TX sent additional demands for the return of its security deposit on July 22, 2019, August 14, 2019, and April 24, 2020. Harry Hines has not returned the security deposit.

On February 14, 2020, Harry Hines filed the underlying lawsuit for breach of contract against Pawn TX. Harry Hines alleged in its petition that Pawn TX “failed to vacate the premises and remained in possession of the Demised Premises for an additional two (2) months” and owed Harry Hines $31,919.40 in holdover rent pursuant to Section 18.1 of the Lease, which provides:

In the event Tenant remain [sic] in possessions [sic] of the Demised Premises after the expiration of this lease and without the execution of a new lease it shall be deemed to be occupying said premises as a tenant from months to months [sic] at rental (including any percentage rental)

herein provided plus fifty percent of such amount otherwise subject to all the conditions, provisions and obligations of this lease insofar as the same are applicable to months-to month tenancy.

Pawn TX filed a general denial and, on July 21, 2020, filed counterclaims for breach of contract and bad faith failure to return the security deposit in violation of Chapter 93 of the property code. Pawn TX sought actual damages in the amount of its security deposit and statutory damages of $27,856.00.

On May 7, 2021, Pawn TX moved for summary judgment on its counterclaims and on Harry Hines’s breach of contract claim. Pawn TX’s motion as to Harry Hines’s breach of contract claim was a hybrid motion alleging both no evidence and traditional grounds. Pawn TX argued (1) there was no evidence Pawn TX breached the lease, and (2) Pawn TX owed no holdover rent as a matter of law because the

evidence conclusively established Pawn TX vacated the premises before the lease expiration date. Pawn TX’s motion on its Chapter 93 counterclaim was a traditional motion for summary judgment in which Pawn TX argued Harry Hines acted in bad faith by failing to return the security deposit. Pawn TX included the following evidence in support of its motions: the Lease, the 2009 assignment, the Notice and Demand, the three additional letters and emails to Harry Hines demanding return of the security deposit, Harry Hines’s responses to interrogatories and requests for production, the Declaration of Mike McCollum, Pawn TX’s District Manager, the Declaration of Robert Epley, Pawn TX’s Construction Coordinator, a general ledger report, documentation concerning the New Property, and an attorney’s fees affidavit.

In response to an interrogatory asking Harry Hines to identify the date on which it contends Pawn TX surrendered the Property, Harry Hines stated that Pawn TX surrendered the Property “on or about August or September 2018.” In response to an interrogatory asking Harry Hines to identify all facts to support its contention that Pawn TX failed to vacate the premises at the end of the Lease and became a holdover tenant for two months, Harry Hines stated “Pursuant to the terms of the Lease, Pawn TX, Inc. was to surrender possession to the Premises by June 1, 2018. Pawn TX, Inc. did not surrender the Premises until August or September 2018.” In its responses to requests for production, Harry Hines stated it found no responsive documents of (1) demands Harry Hines made on Pawn TX for holdover rent, (2) correspondence between Harry Hines and Pawn TX regarding Pawn TX’s surrender

of the Property, and (3) documents Harry Hines contends establish the date Pawn TX vacated the Property.

Harry Hines responded to the motions for summary judgment. The only evidence filed in support of its response was the two-page affidavit of Shazeb Daredia, the sole manager and director of Harry Hines. In the affidavit, Daredia made the following statements concerning the alleged holdover of Pawn TX after the Lease expired:

 “On expiration of the lease term, Pawn TX., Inc. failed to vacate the premises and remained in possession of the Property for an additional two (2) months.”

 “At the time of holdover by Defendant, the monthly rent was $10,639.80 per month.”

 “In accordance with the terms of the Lease, Pawn TX., Inc. owed Harry Hines Millennium Market Place, LLC rent in the amount of $15,959.70 per holdover month.”

 “The total past due balance owed by Pawn TX., Inc. to Harry Hines Millennium Market Place, LLC pursuant to the Lease, as amended, is $31,919.40.”

 “Harry Hines Millennium Market Place, LLC made demand on Pawn TX., Inc. for payment of holdover rent prior to the filing of this suit without success.”

On June 10, 2021, the trial court granted summary judgment for Pawn TX, dismissed Harry Hines’s breach of contract claim with prejudice, and rendered judgment for Pawn TX on its Chapter 93 counterclaim for bad faith retention of Pawn TX’s security deposit. The trial court awarded Pawn TX actual damages of $9,252.00, Chapter 93 statutory damages of $27,856.00, attorney’s fees of

$6,840.00, and conditional appellate fees. Harry Hines filed a “Motion for New Trial and, Alternatively Motion for Reconsideration of Final Summary Judgment.” The trial court denied the motion for new trial, granted the motion for consideration in part, and amended its June 10, 2021 summary judgment order to reduce the award of actual damages to $100.00. Harry Hines appealed.

STANDARD OF REVIEW

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Harry Hines Millennium Market Place, LLC v. Pawn TX, Inc. F/K/A First Cash, Ltd., (Tex. Ct. App. 2023).

Harry Hines Millennium Market Place, LLC v. Pawn TX, Inc. F/K/A First Cash, Ltd. (Harry Hines Millennium Market Place, LLC v. Pawn TX, Inc. F/K/A First Cash, Ltd.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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