His One Stop Business, Inc. Chris Barger & Monica Barger v. Mark Holle as Trustee of the Holle Trust

• Court: Court of Appeals of Texas
• Decided: February 6, 2015
• Docket: 14-14-00592-CV
• Status: Published

Opinion

ACCEPTED 14-14-00592-CV FOURTEENTH COURT OF APPEALS HOUSTON, TEXAS 2/6/2015 4:01:46 PM CHRISTOPHER PRINE CLERK

FILED IN 14th COURT OF APPEALS HOUSTON, TEXAS 2/6/2015 4:01:46 PM No. 14-14-00592-CV CHRISTOPHER A. PRINE In the Clerk

Court of Appeals for the 14th District of the

State of Texas 

HIS ONE STOP BUSINESS, INC. ET AL. Appellants

V.

MARK HOLLE AS TRUSTEE OF THE HOLLE TRUST Appellees

 APPELLANTS’ BRIEF

 ERNIE GARCIA 616 CYPRESS CREEK PKWY SUITE 105 HOUSTON, TEXAS 77090

ORAL ARGUMENT IS REQUESTED IDENTITY OF THE PARTIES

Appellants: His One Stop Business, Inc. Monica Barger Chris Barger

Appellants’ Counsel in The Appeals Court: Ernie Garcia 616 Cypress Creek Parkway Suite 105 Houston, Texas 77090

Appellee’s Counsel in the Appeals Court: Jason D. Kraus 13910 Champion Forest Drive Suite 110 Houston, Texas 77069

Appellee: Mark Holle as Trustee of The Holle Trust

i TABLE OF CONTENTS

IDENTITY OF THE PARTIES ........................................................................................... i

TABLE OF CONTENTS .................................................................................................... ii

INDEX OF AUTHORITIES .............................................................................................. iii

STATEMENT OF THE CASE ........................................................................................... 1

STATEMENT REGARDING ORAL ARGUMENT ......................................................... 3

STATEMENT OF FACTS .................................................................................................. 4

SUMMARY OF THE ARGUMENT .................................................................................. 6

ISSUE ONE ......................................................................................................................... 7

ISSUE TWO ...................................................................................................................... 13

ISSUE THREE .................................................................................................................. 17

ISSUE FOUR .................................................................................................................... 21

ISSUE FIVE ...................................................................................................................... 24

PRAYER ........................................................................................................................... 27

CERTIFICATE OF SERVICE .......................................................................................... 29

APPENDICES ................................................................................................................... 29

ii INDEX OF AUTHORITIES

CASES

Raw Hide Oil & Gas, Inc. v. Maxus Exploration Co., 766 S.W.2d 264, 275 (Tex. App.– Amarillo 1988, writ denied). ............................................................. 7, 17, 18, 21, 22, 25 Vista Chevrolet, Inc. v. Lewis, 709 S.W.2d 176 (Tex. 1986) (per curiam) ....... 7, 17, 21, 25 Wal-Mart Stores, Inc.v. Canchola, 121 S.W.3d 735, 739 (Tex. 2003) (per curiam). .. 7, 18, 21, 25 Bocquet v.Herring, 972 S.W.2d 19, 20-21 (Tex. 1998) .............................. 8, 13, 18, 22, 25 Gen. Tire, Inc.v. Kepple, 970 S.W.2d 520, 526 (Tex. 1998)............................. 8, 13, 18, 22 Holley v. Holley, 864 S.W.2d 703, 706 (Tex. App.–Houston [1st Dist.] 1993, writ denied). .................................................................................................... 8, 13, 18, 22, 26 Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). ..... 8, 9, 14, 19, 22, 23, 26, 27 McDaniel v. Yarbrough, 898 S.W.2d 251, 253 (Tex. 1995) ....................... 8, 18, 23, 27, 30 Walker v. Guiterrez, 111 S.W.3d 56, 62 (Tex. 2003). ................................ 9, 14, 19, 23, 30 Cire v. Cummings, 134 S.W.3d 835, 839 (Tex. 2004) ................................ 9, 14, 19, 23, 27 Villarreal v. San Antonio Truck & Equip., 994 S.W.2d 628, 630 (Tex. 1999) ................... 9 Smith v. Babcock & Wilcox Constr. Co., 913 S.W.2d 467, 468 (Tex. 1995) (per curiam). ............................................................................................................................ 9, 10, 15, Jimenez v. Transwestern Prop. Co., 999 S.W.2d at 130 (Tex. App.—Houston [14th Dist.] 1999, no pet.) ................................................................................................................. 10 Beames v. Hooks (Tex. App., 2015) ............................................................................ 10, 12 Tex. Mut. Ins. Co. v. Olivas, 323 S.W.3d 266, 274 (Tex. App.—El Paso 2010, no pet.) . 10 Franklin v. Sherman Indep. Sch. Dist., 53 S.W.3d 398, 401 (Tex. App.—Dallas 2001, pet. denied) (per curiam). .............................................................................................. 10 Dueitt v. Arrowhead Lakes Prop. Owners, Inc., 180 S.W.3d at 737 (Tex. App.—Waco 2005, pet. denied) .................................................................................................... 11, 12 Smith v. CDI Rental Equip. Ltd., 310 S.W.3d 559, 567 (Tex.App.—Tyler 2010) ........... 15 Armes v. Thompson, 222 S.W.3d 79, 83-84 (Tex.App.—Eastland 2006, no pet.). ......... 15, Nootsie, Ltd. v. Williamson County Appraisal Dist., 925 S.W.2d 659, 661-62 (Tex. 1996) ....................................................................................................................................... 16 Bybee v. Fireman’s Fund Ins. Co., 331 S.W.2d 910, 917 (Tex. 1960) ............................. 16

iii Fountain Parkway, Ltd. v. Tarrant Appr. Dist., 920 S.W.2d 799, 802 (Tex. App.—Fort Worth 1996, writ denied)............................................................................................... 16 State Bar v. Gomez, 891 S.W.2d 243, 245-46 (Tex. 1994) ............................................... 16 Alfonso v. Skadden, 251 S.W.3d 52, 55 (Tex. 2008) ................................................... 10, 12 Hull v. S. Coast Catamarans, L.P., 365 S.W.3d 35, 45 (Tex. App.—Houston [1st Dist.] 2011, pet. denied) .......................................................................................................... 19 Holloway v. Skinner, 898 S.W.2d 793 (Tex., 1995).......................................................... 20 Maxey v. Citizen’s Nat’l Bank, 507 S.W.2d 722, 726 (Tex.1974) .................................... 20 Russell v. Edgewood Indep. Sch. Dist., 406 S.W.2d 249, 252 (Tex. Civ. App.—San Antonio 1966, writ ref’d n.r.e.) ..................................................................................... 20 Austin Hill Country Realty, Inc. v. Palisades Plaza, Inc., 948 S.W.2d 293, 299 (Tex. 1997). ............................................................................................................................. 27

STATUTES

TEX. R. CIV. P. 165a ....................................................................................................... 9 TEX. PROP. CODE ANN. § 91.006(a) ............................................................................ 27

OTHER SOURCES

Restatement (Third) of Agency § 6.01 (2006) ............................................................. 19

iv TO THE HONORABLE COURT OF APPEALS:

STATEMENT OF THE CASE

The Appellee sued for breach of the Lease on March 22, 2013. Appellants

answered the lawsuit on May 16, 2013. On September 11, 2013 the Appellants and

the Appellee (Hereinafter, Parties) entered into an agreed motion for continuance.

The continuance was granted, and the case was reset to trial on December 16, 2013.

The Appellants filed an amended answer and a counterclaim on October 30,

2013. Again the Parties entered into an agreed motion for continuance. The

continuance was granted, and the case was reset to trial on March 24, 2014.

On September 12, 2013 the Court ordered the Parties to attend Mediation. The

Appellee deposed the Appellants on October 15, 2013. The Parties attended

Mediation on February 19, 2014 but were unable to reach terms of settlement.

On November 26, 2013 the Appellee filed a Motion for Summary Judgment.

The Appellants filed their response to Appellee’s motion on January 9, 2014. That

motion was set for a hearing on January 16, 2014. The Appellee failed to appear on

the date of his own hearing, and the matter was passed by the Judge.

The Appellee’s Motion for Summary Judgment was re-set for a hearing on

February 26, 2014. The Appellee filed a Reply to Appellants’ Response to

Appellee’s Motion for Summary Judgment on February 24, 2014. The Appellee again failed to appear on the date of his own hearing, and the motion was denied by

the Judge on that date.

On March 3, 2014 the Appellee filed a Second Motion for Summary

Judgment. That motion was set for a hearing on March 20, 2014. The Parties agreed

on a Joint Motion for Continuance on March 14, 2014. The Court denied this setting,

and the Court refused to sign the Joint Motion.

The case had previously been set for Trial on March 24, 2014, and the Parties

were noticed to appear for trial on that date. The Appellee again failed to appear on

the date of trial, and the matter was Dismissed for Want of Prosecution on March

26, 2014.

On April 7, 2014, the Appellee filed a Motion to Reinstate and set the matter

for a hearing on April 22, 2014. Appellants filed their Response to Appellee’s

Motion on April 22, 2014. On April 22, 2014, the Court Ordered that the matter be

reinstated. The matter was then re-set to Trial on June 9, 2014.

On May 29, 2014 a Petition in Intervention was filed by the Appellee eleven

days prior to trial. The Appellants filed their response on June 8, 2014 with Motions

in Limine. The Case Proceeded to Trial on June 9, 2014.

The County Court at Law No 1 of Harris County, Texas awarded a judgment

to the Appellee on June 17, 2014 against all three Appellants. This appeal followed.



2 STATEMENT REGARDING ORAL ARGUMENT

Appellant respectfully requests oral argument, believing that oral argument

would be helpful to the Court in addressing issues that may arise after reading both

Appellant’s and Appellee’s briefs.

ISSUES PRESENTED

ISSUE ONE – THE TRIAL COURT ERRONEOUSLY REINSTATED THE

APPELLEE’S CASE INSPITE OF AN OBJECTION HAVING BEEN RAISED

BY THE APPELLANTS;

ISSUE TWO – THE TRIAL COURT ERRONEOUSLY ALLOWED THE

APPELLEE TO PROCEED TO TRIAL ALTHOUGH THE APPELLEE WAS AN

UNREGISTERED ENTITY WITHOUT THE CAPACITY TO MAINTAIN AN

ACTION OR PROCEEDING IN TEXAS COURTS;

ISSUE THREE – THE TRIAL COURT ERRONEOUSLY ISSUED A

JUDGMENT AGAINST MONICA BARGER AND CHRIS BARGER IN THEIR

INDIVIDUAL CAPACITIES;

ISSUE FOUR – THE TRIAL COURT ERRONEOUSLY AWARDED

DAMAGES TO THE APPELLEE AFTER THE APPELLANT TERMINATED

THE LEASE BETWEEN THE PARTIES;

3 ISSUE FIVE – THE TRIAL COURT ERRONEOUSLY AWARDED

DAMAGES TO THE APPELLEE AFTER THE APPELLANT SHOWED THAT

THE APPELLEE FAILED TO PROPERLY MITIGATE ITS OWN DAMAGES.

STATEMENT OF FACTS

Appellant, His One Stop Business, Inc. (Hereinafter, HOSB) is a corporate

entity formed in the State of Texas in 2011. On July 20, 2012 HOSB entered as a

tenant into a commercial lease (Hereinafter, Lease) with David Holle, Truste of the

Holle Trust (Hereinafter, Holle), Appellee. Monica Barger, Appellant, served as the

President of HOSB, and her son Chris Barger, Appellant, served as a manager of

HOSB. Both Monica Barger and Chris Barger signed the commercial lease on behalf

of HOSB and paid a deposit in the amount of $1,250. Although a personal guarantee

of the Lease was presented to both Monica Barger and Chris Barger, neither signed

the personal guarantee.

Under the terms of the Lease, Holle undertook certain essential preparations

to complete prior to the tenant taking possession of the premises. These items were

specified in Section 35 of the Lease. At trial, none of the Appellee’s witnesses

testified that these preparations had ever been completed. Particularly, the flooring

for the premises was never installed.

4 Section 3, subsection B of the Lease, titled “Delay of Occupancy,” states “If

Tenant is unable to occupy the leased premises after the 90th day after the

Commencement Date because of construction on the leased premises to be

completed by Landlord that is not substantially complete,…Tenant may terminate

this lease by giving notice to the Landlord before the lease premises become

available to be occupied by Tenant and Landlord will refund to Tenant any amounts

paid to Landlord by Tenant.” The agreeed “Commencement Date” under the terms

of the Lease was August 1, 2012. The 90th day thereafter was October 31, 2012.

The Appellants sent notice of termination of the Lease and demand for the

return of the initial deposit paid based on the Appellee’s failure to complete these

preparations. All parties recognize that the Appellants never assumed possession of

the premises. The Appellee subsequently filed his lawsuit against the Appellants for

damages.

5 SUMMARY OF THE ARGUMENT

The Trial Court abused its discretion, first, by allowing the Appellee to

reinstate its case after the Trial Court dismissed the case for want of prosecution.

The Trial Court also allowed the Appellee to amend its petition, changing the named

Plaintiff, The Holle Trust, to David Holle, as Trustee of The Holle Trust on the date

of trial. At no time was The Holle Trust a registered entity able to maintain in a court

of this state an action or proceeding arising out of a contract or act in which an

assumed name was used.

The Trial Court failed to recognize that Appellants Monica Barger & Chris

Barger had no personal liability in this matter and awarded a judgment against them

in favor of the Appellee. Both Appellants signed the Lease as agents of HOSB. The

Trial Court further erred in that it continued to recognize that the contract itself

continued to exist after notice of its termination had been sent in writing by the

Appellants. Under the stated terms of the Lease, the Appellants were allowed to

terminate the Lease for the Appellee’s failure to make the unit ready to occupy.

Finally, the Trial Court erred in that it awarded damages to the Appellee

inspite of the Appellee’s failure to properly mitigate its own damages. The evidence

presented at trial was insufficient and contradictory.

6 ISSUE ONE

THE TRIAL COURT ERRONEOUSLY REINSTATED THE APPELLEE’S

CASE INSPITE OF AN OBJECTION HAVING BEEN RAISED BY THE

APPELLANTS.

Standards of Review –

Legal Sufficiency

A legal sufficiency challenge asserts that there is a complete lack of

evidence to support a finding. Raw Hide Oil & Gas, Inc. v. Maxus Exploration Co.,

766 S.W.2d 264, 275 (Tex. App.–Amarillo 1988, writ denied). If successful, the

proper remedy for legal insufficiency of evidence generally is rendition of

judgment in favor of the complaining party. Vista Chevrolet, Inc. v. Lewis, 709

S.W.2d 176 (Tex. 1986)(per curiam). In deciding a legal sufficiency challenge, the

court “view[s] the evidence in a light that tends to support the disputed finding and

disregard[s] evidence and inferences to the contrary.” Wal-Mart Stores, Inc.v.

Canchola, 121 S.W.3d 735, 739 (Tex. 2003) (per curiam). The legal sufficiency

standard is classified as either “no evidence” or “matter of law,” depending on

whether the complaining party had the burden of proof. Raw Hide, 766 S.W.2d at

275.

Abuse of Discretion

7 The abuse of discretion standard applies when a trial court has discretion to

either grant or deny relief based on its factual determinations. See Bocquet

v.Herring, 972 S.W.2d 19, 20-21 (Tex. 1998). Applying the abuse of discretion

standard is especially appropriate when the trial court must weigh competing

policy considerations and balance interests in determining whether to grant relief.

See Gen. Tire, Inc.v. Kepple , 970 S.W.2d 520, 526 (Tex. 1998).

In determining whether the trial court has abused its discretion, an appellate

court reviews the record in the light most favorable to the trial court’s action and

indulges every legal presumption in favor of its decision. Holley v. Holley, 864

S.W.2d 703, 706 (Tex. App.–Houston [1st Dist.] 1993, writ denied). As the Texas

Supreme Court has explained:

The test for abuse of discretion is not whether, in the opinion of the reviewing court, the facts present an appropriate case for the trial court’s action. Rather, it is a question of whether the court acted without reference to any guiding rules and principles. Another way of stating the test is whether the act was arbitrary or unreasonable.

Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.

1985) (internal citations omitted). As interpreted by later courts, the Downer test

for abuse of discretion is whether the discretionary rulings were (1) arbitrary or

unreasonable or (2) without reference to any guiding rules and principles.

McDaniel v. Yarbrough, 898 S.W.2d 251, 253 (Tex. 1995). Thus, even if the trial

court refers to the proper guiding rules and principles, an unreasonable or arbitrary

8 discretionary ruling is an abuse of discretion. Id. At least one court has incorrectly

summarized the Downer test by combining the two separate formulations to form a

single test. Walker v. Guiterrez, 111 S.W.3d 56, 62 (Tex. 2003) (the “trial court

abuses its discretion if it acts in an arbitrary or unreasonable manner without

reference to any guiding rules or principles.”). In a more recent case, however, the

Texas Supreme Court correctly stated the Downer test. See Cire v. Cummings, 134

S.W.3d 835, 839 (Tex. 2004).

Argument –

Two sources grant a trial court the authority to dismiss a suit for want of

prosecution: (1) Texas Rule of Civil Procedure 165a and (2) the trial court's inherent

authority. See TEX. R. CIV. P. 165a; Villarreal v. San Antonio Truck & Equip., 994

S.W.2d 628, 630 (Tex. 1999). The trial court may dismiss a case pursuant to Rule

165a based on “the failure of any party seeking affirmative relief to appear for any

hearing or trial of which the party had notice.” See Villarreal, 994 S.W.2d at 630

(citing TEX. R. CIV. P. 165a(1), (2)).

When the trial court dismisses a case for want of prosecution, the court “shall

reinstate the case upon finding after a hearing that the failure of the party or his

attorney was not intentional or the result of conscious indifference but was due to an

accident or mistake or that the failure has been otherwise reasonably explained.”

TEX. R. CIV. P. 165a(3); Smith v. Babcock & Wilcox Constr. Co., 913 S.W.2d 467,

9 468 (Tex. 1995) (per curiam). A failure of the party or his attorney is not intentional

or due to conscious indifference “within the meaning of the rule merely because it

is deliberate; it must also be without adequate justification.” Smith, 913 S.W.2d at

468. “Proof of such justification—accident, mistake or other reasonable

explanation—negates the intent or conscious indifference for which reinstatement

can be denied.” Id. Conscious indifference “means more than mere negligence.” Id.

The plaintiff bears the burden of demonstrating that he has diligently

prosecuted his case. See Jimenez v. Transwestern Prop. Co., 999 S.W.2d at 130

(Tex. App.—Houston [14th Dist.] 1999, no pet.); See Beames v. Hooks (Tex. App.,

2015) (Citing Tex. Mut. Ins. Co. v. Olivas, 323 S.W.3d 266, 274 (Tex. App.—El

Paso 2010, no pet.) (“The complaining party has the burden to bring forth a record

to support its contention.”). On appeal, this Court can review the trial court’s

decision “to determine whether the litigant demonstrated good cause for not

prosecuting with greater diligence.” Olivas, 323 S.W.3d at 274.

This Appellate Court can review a trial court’s ruling dismissing a case for

want of prosecution and a court’s ruling on a motion to reinstate for an abuse of

discretion. See Smith, 913 S.W.2d at 468; Franklin v. Sherman Indep. Sch. Dist., 53

S.W.3d 398, 401 (Tex. App.—Dallas 2001, pet. denied) (per curiam). A trial court

abuses its discretion when it acts “without reference to any guiding rules or

principles,” that is, when it acts in an arbitrary and unreasonable manner. Dueitt v.

10 Arrowhead Lakes Prop. Owners, Inc., 180 S.W.3d at 737 (Tex. App.—Waco 2005,

pet. denied).

The court abused its discretion in reinstating the Appellee’s case because the

weight of the evidence proves that the basis for the Appellee’s “good cause” to

reinstate was false. No valid basis to reinstate existed, so the case should have

remained dismissed. The Appellee failed to supply sufficient proof which would

negate the Appellee’s conscious indifference in this matter. Without proof of “good

cause” to reinstate, the Trial Court’s decision was arbitrary and unreasonable.

The Appellee’s Verified Motion to Reinstate simply states facts of the case.

(CR, Vol. 1 of 1, pages 30-33). Section 4 of Appellee’s Motion states “[Appellee’s]

counsel inadvertently misread the office calendar and assumed the matter was set

for hearing by submission.” However, the matter in question was not a hearing date.

Appellee’s Counsel refers to the Motion for Continuance, which he filed on March

14, 2014. The setting, where Appellee’s Counsel failed to appear was a trial setting

on March 26, 2014, which he acknowledges in this own Motion. (CR, Vol. 1 of 1,

page 31).

Appellants’ Response to Appellee’s Motion was filed on April 21, 2014 and

featured an exhibit from the office of Appellee’s Counsel. (CR, Vol. 1 of 1, pages

39-44). Exhibit A of the Appellants’ Response to Appellee’s Motion to Reinstate

shows an Email message from the office of Appellee’s Counsel, which states “The

11 Court just called and our hearing for continuance will need to be heard on Monday,

March 24.” (CR, Vol. 1 of 1, page 42). While it is true that there may have been an

issue with regard to a hearing, it is also true that Counsel for the Appellee was fully

aware that the Trial Court had not granted the Motion for Continuance. Nothing in

Counsel’s Verified Motion to Reinstate mentions why he failed to appear on the date

of trial. (CR, Vol. 1 of 1, pages 39-44). It only mentions his reason for not attending

the hearing on his Motion for Continuance believing it to be set “by submission.”

Insufficient evidence exists for the Trial Court to have granted the Motion to

Reinstate. There is no indication that the Court used “guiding rules or principles” to

reinstate the case in this matter, as required under Dueitt. 180 S.W.3d at 737 (Tex.

App.—Waco 2005, pet. denied). The accident or mistake proposed by the Appellee’s

Counsel referred to his understanding of the hearing which he believed to be by

submission. The Motion made no mention of the Trial setting.

Additionally there is no proof in the record that Counsel for the Appellee met

his burden of demonstrating that he has diligently prosecuted his case as required

under the ruling this year of the First Court of Appeals in Beames v. Hooks. (Tex.

App., 2015). Without such proof, the Trial Court was in error to grant the Appellee’s

Motion to Reinstate. As such, this Court should reverse the Trial Court’s ruling

granting the Appellee’s Motion to Reinstate, and this case should again be dismissed

for want of prosecution.

12 

ISSUE TWO

THE TRIAL COURT ERRONEOUSLY ALLOWED THE APPELLEE TO

PROCEED TO TRIAL ALTHOUGH THE APPELLEE WAS AN

ACTION OR PROCEEDING IN TEXAS COURTS.

Standard of Review –

The abuse of discretion standard applies when a trial court has discretion to

either grant or deny relief based on its factual determinations. See Bocquet

v.Herring, 972 S.W.2d 19, 20-21 (Tex. 1998). Applying the abuse of discretion

standard is especially appropriate when the trial court must weigh competing

policy considerations and balance interests in determining whether to grant relief.

See Gen. Tire, Inc.v. Kepple , 970 S.W.2d 520, 526 (Tex. 1998).

In determining whether the trial court has abused its discretion, an appellate

court reviews the record in the light most favorable to the trial court’s action and

indulges every legal presumption in favor of its decision. Holley v. Holley, 864

S.W.2d 703, 706 (Tex. App.–Houston [1st Dist.] 1993, writ denied). As the Texas

13 The test for abuse of discretion is not whether, in the opinion of the reviewing court, the facts present an appropriate case for the trial court’s action. Rather, it is a question of whether the court acted without reference to any guiding rules and principles. Another way of stating the test is whether the act was arbitrary or unreasonable.

Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.

1985) (internal citations omitted). As interpreted by later courts, the Downer test

for abuse of discretion is whether the discretionary rulings were (1) arbitrary or

unreasonable or (2) without reference to any guiding rules and principles.

McDaniel v. Yarbrough, 898 S.W.2d 251, 253 (Tex. 1995). Thus, even if the trial

court refers to the proper guiding rules and principles, an unreasonable or arbitrary

discretionary ruling is an abuse of discretion. Id. At least one court has incorrectly

summarized the Downer test by combining the two separate formulations to form a

single test. Walker v. Guiterrez, 111 S.W.3d 56, 62 (Tex. 2003) (the “trial court

abuses its discretion if it acts in an arbitrary or unreasonable manner without

reference to any guiding rules or principles.”). In a more recent case, however, the

Texas Supreme Court correctly stated the Downer test. See Cire v. Cummings, 134

The record shows that the Lease in question was entered into by the assumed

named “The Holle Trust.” (RR Vol. 4 of 4, page 6). Counsel for the Appellee stated

correctly on the first day of Trial on June 9, 2014, “I’m here to represent David Holle

14 as Trustee of the Holle Trust and he is essentially being substituted in for the Holle

Trust, which is not an entity.” (RR Vol. 2 of 4, page 5, lines 20-22). In fact there is

no record on file that proves anything other than the fact that The Holle Trust is an

unregistered entity.

“A person who fails to comply with Chapter 71 of the Texas Business and

Commerce Code may not maintain in a court of this state an action or proceeding

arising out of a contract or act in which an assumed name was used.” Tex. Bus. Com.

Code §71.201. If an entity does not exist at the time suit was filed, then it does not

have standing to assert a claim. Smith v. CDI Rental Equip. Ltd., 310 S.W.3d 559,

567 (Tex.App.—Tyler 2010) (Citing Armes v. Thompson, 222 S.W.3d 79, 83-84

(Tex.App. —Eastland 2006, no pet.) (Decedent did not have actual or legal

existence, did not represent a legal entity for purposes of filing suit, had no standing,

and her petition did not invoke the trial court’s jurisdiction.)).The Holle Trust is not

now, nor ever has been registered to do business in the State of Texas and so lacks

standing to bring a lawsuit in Texas Courts. The Appellee’s petition as drawn must

then be dismissed as a matter of law. (CR, Vol. 1 of 1, pages 4-23).

A party has standing when it is personally aggrieved and has capacity when it

has the legal authority to act. See Nootsie, Ltd. v. Williamson County Appraisal Dist.,

925 S.W.2d 659, 661-62 (Tex. 1996). In this case, David Holle was not personally

aggrieved. Therefore David Holle would not have standing to bring the lawsuit in

15 question. A plea to the jurisdiction is proper when pleadings show on their face that

the court does not have subject matter jurisdiction. See, e.g., Bybee v. Fireman’s

Fund Ins. Co., 331 S.W.2d 910, 917 (Tex. 1960); Fountain Parkway, Ltd. v. Tarrant

Appr. Dist., 920 S.W.2d 799, 802 (Tex. App.—Fort Worth 1996, writ denied). (CR,

Vol. 1 of 1, pages 4-23). It is clear from Appellee’s petition the court does not have

jurisdiction because there is no justiciable issue in this case that this court can

resolve. The Appellee’s petition does not allege a real controversy between the

parties that could be resolved by the judicial relief Appellee seeks. See, e.g., State

Bar v. Gomez, 891 S.W.2d 243, 245-46 (Tex. 1994) (district court did not have

authority to compel the State Bar or the Supreme Court to implement mandatory pro

bono). Subject-matter jurisdiction is essential for a court to have authority to decide

a case; it is never presumed, cannot be waived, and can be raised any time. See

Alfonso v. Skadden, 251 S.W.3d 52, 55 (Tex. 2008).

The Holle Trust was not properly registered with the State of Texas. David

Holle as Trustee of the Holle Trust could not maintain in a court of this state an

action or proceeding arising out of a contract or act in which the assumed name “The

Holle Trust” was used. Because the Appellee could not raise its petition in a Texas

Court, no judgment could flow from such a petition. As such, any judgment from

such a case would be void.

16 As the Trial Court lacked jurisdiction in this matter, the case should be

dismissed as a matter of law.

ISSUE THREE

THE TRIAL COURT ERRONEOUSLY ISSUED A JUDGMENT

AGAINST MONICA BARGER AND CHRIS BARGER IN THEIR INDIVIDUAL

CAPACITIES.

A legal sufficiency challenge asserts that there is a complete lack of

evidence to support a finding. Raw Hide Oil & Gas, Inc. v. Maxus Exploration Co.,

766 S.W.2d 264, 275 (Tex. App.–Amarillo 1988, writ denied). If successful, the

proper remedy for legal insufficiency of evidence generally is rendition of

judgment in favor of the complaining party. Vista Chevrolet, Inc. v. Lewis, 709

S.W.2d 176 (Tex. 1986) (per curiam). In deciding a legal sufficiency challenge,

the court “view[s] the evidence in a light that tends to support the disputed finding

and disregard[s] evidence and inferences to the contrary.” Wal-Mart Stores, Inc.v.

Canchola, 121 S.W.3d 735, 739 (Tex. 2003) (per curiam). The legal sufficiency

standard is classified as either “no evidence” or “matter of law,” depending on

17 whether the complaining party had the burden of proof. Raw Hide, 766 S.W.2d at

The abuse of discretion standard applies when a trial court has discretion to

either grant or deny relief based on its factual determinations. See Bocquet

v.Herring, 972 S.W.2d 19, 20-21 (Tex. 1998). Applying the abuse of discretion

standard is especially appropriate when the trial court must weigh competing

policy considerations and balance interests in determining whether to grant relief.

See Gen. Tire, Inc.v. Kepple , 970 S.W.2d 520, 526 (Tex. 1998).

In determining whether the trial court has abused its discretion, an appellate

court reviews the record in the light most favorable to the trial court’s action and

indulges every legal presumption in favor of its decision. Holley v. Holley, 864

S.W.2d 703, 706 (Tex. App.–Houston [1st Dist.] 1993, writ denied). As the Texas

The test for abuse of discretion is not whether, in the opinion of the reviewing court, the facts present an appropriate case for the trial court’s action. Rather, it is a question of whether the court acted without reference to any guiding rules and principles. Another way of stating the test is whether the act was arbitrary or unreasonable.

Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.

1985) (internal citations omitted). As interpreted by later courts, the Downer test

for abuse of discretion is whether the discretionary rulings were (1) arbitrary or

18 unreasonable or (2) without reference to any guiding rules and principles.

McDaniel v. Yarbrough, 898 S.W.2d 251, 253 (Tex. 1995). Thus, even if the trial

court refers to the proper guiding rules and principles, an unreasonable or arbitrary

discretionary ruling is an abuse of discretion. Id. At least one court has incorrectly

summarized the Downer test by combining the two separate formulations to form a

single test. Walker v. Guiterrez, 111 S.W.3d 56, 62 (Tex. 2003) (the “trial court

abuses its discretion if it acts in an arbitrary or unreasonable manner without

reference to any guiding rules or principles.”). In a more recent case, however, the

Texas Supreme Court correctly stated the Downer test. See Cire v. Cummings, 134

Generally, an agent for a disclosed principal is not personally liable on

contracts that he signs for the principal. See Hull v. S. Coast Catamarans, L.P., 365

S.W.3d 35, 45 (Tex. App.—Houston [1st Dist.] 2011, pet. denied); see also

Restatement (Third) of Agency § 6.01 (2006). “An officer or director [of a

corporation] may not be held liable in damages for inducing the corporation to

violate a contractual obligation, provided that the officer or director acts in good

faith and believes that what he does is for the best interest of the corporation.”

Holloway v. Skinner, 898 S.W.2d 793 (Tex., 1995) (quoting Maxey v. Citizen’s Nat’l

Bank, 507 S.W.2d 722, 726 (Tex.1974)). “Even the officers and directors of an

19 ordinary corporation, while acting as such, are not personally liable even though they

recommend a breach of a valid contract.” Id. at 795 (quoting Russell v. Edgewood

Indep. Sch. Dist., 406 S.W.2d 249, 252 (Tex. Civ. App.—San Antonio 1966, writ

ref’d n.r.e.)).

The evidence in the Trial record shows that the Lease in question was signed

by Chris Barger in his capacity as a “Manager.” (RR, Vol. 4 of 4, page 19). The

evidence in the Trial record shows that the Lease in question was signed by Monica

Barger in her capacity as a “President.” (RR, Vol. 4 of 4, page 21). The Guaranty of

Lease was presented to both Chris Barger and Monica Barger, but the form was

never filled in, and it was never signed.

It is clear from the fact that the parties were presented a separate document

regarding a personal guaranty of the Lease, that the intent of the Parties was that

HOSB was the only person obligated under the lease. This was the basis for

Appellants Chris Barger and Monica Barger signing the document with their titles.

The Court erroneously overruled Appellants objection to the relevance of a

document that did not relate to the Lease. (RR, Vol 2 of 4, page 29, lines 6-7). As

such, the Trial Court erroneously awarded a judgment to the Appellee and against

Chris Barger and Monica Barger in their individual capacities. The Appellants now

ask that this Court reverse the Trial Court judgment in as much as any personal

liability would fall on Chris Barger or Monica Barger.

20 ISSUE FOUR

THE TRIAL COURT ERRONEOUSLY AWARDED DAMAGES TO THE

APPELLEE AFTER THE APPELLANT TERMINATED THE LEASE BETWEEN

THE PARTIES.

A legal sufficiency challenge asserts that there is a complete lack of

evidence to support a finding. Raw Hide Oil & Gas, Inc. v. Maxus Exploration Co.,

766 S.W.2d 264, 275 (Tex. App.–Amarillo 1988, writ denied). If successful, the

proper remedy for legal insufficiency of evidence generally is rendition of

judgment in favor of the complaining party. Vista Chevrolet, Inc. v. Lewis, 709

S.W.2d 176 (Tex. 1986) (per curiam). In deciding a legal sufficiency challenge,

the court “view[s] the evidence in a light that tends to support the disputed finding

and disregard[s] evidence and inferences to the contrary.” Wal-Mart Stores, Inc.v.

Canchola, 121 S.W.3d 735, 739 (Tex. 2003) (per curiam). The legal sufficiency

standard is classified as either “no evidence” or “matter of law,” depending on

whether the complaining party had the burden of proof. Raw Hide, 766 S.W.2d at

21 The abuse of discretion standard applies when a trial court has discretion to

either grant or deny relief based on its factual determinations. See Bocquet

v.Herring, 972 S.W.2d 19, 20-21 (Tex. 1998). Applying the abuse of discretion

standard is especially appropriate when the trial court must weigh competing

policy considerations and balance interests in determining whether to grant relief.

See Gen. Tire, Inc.v. Kepple , 970 S.W.2d 520, 526 (Tex. 1998).

In determining whether the trial court has abused its discretion, an appellate

court reviews the record in the light most favorable to the trial court’s action and

indulges every legal presumption in favor of its decision. Holley v. Holley, 864

S.W.2d 703, 706 (Tex. App.–Houston [1st Dist.] 1993, writ denied). As the Texas

The test for abuse of discretion is not whether, in the opinion of the reviewing court, the facts present an appropriate case for the trial court’s action. Rather, it is a question of whether the court acted without reference to any guiding rules and principles. Another way of stating the test is whether the act was arbitrary or unreasonable.

Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.

1985) (internal citations omitted). As interpreted by later courts, the Downer test

for abuse of discretion is whether the discretionary rulings were (1) arbitrary or

unreasonable or (2) without reference to any guiding rules and principles.

McDaniel v. Yarbrough, 898 S.W.2d 251, 253 (Tex. 1995). Thus, even if the trial

court refers to the proper guiding rules and principles, an unreasonable or arbitrary

22 discretionary ruling is an abuse of discretion. Id. At least one court has incorrectly

summarized the Downer test by combining the two separate formulations to form a

single test. Walker v. Guiterrez, 111 S.W.3d 56, 62 (Tex. 2003) (the “trial court

abuses its discretion if it acts in an arbitrary or unreasonable manner without

reference to any guiding rules or principles.”). In a more recent case, however, the

Texas Supreme Court correctly stated the Downer test. See Cire v. Cummings, 134

The Appellee agreed to make some necessary changes on the premises in

Section 35 of the Lease to accommodate the business of the Appellant HOSB. (RR,

Vol. 4 of 4, page 18). The Record shows that the Appellee failed to complete the

necessary work prior to the Appellants taking possession when the Appellee

presented Robert Whitaker, the manager of the premises at trial. (RR, Vol. 2 of 4,

pages 40-51. The Record shows that the Appellee failed to complete the necessary

work prior to the Appellants taking possession when the Appellee presented Doug

Zorens, the contractor hired by Robert Whitaker, at trial. (RR, Vol. 2 of 4, pages 73-

83).

The Contractor clearly states that no additional work was performed after July

27, 2012. He testifies, “No, I wasn’t taking no instructions after that point. I was

done.” (RR, Vol. 2 of 4, page 76,lines 21-22). The Appellant Chris Barger testified

23 that the instructions for the flooring were given in August of 2012. (RR, Vol. 3 of 4,

page 42,lines 6-10). The Appellee never denied having received the Appellants’

notice of their intent to terminate the Lease for failure to complete the flooring. (RR,

Vol. 4 of 4, page 30). In fact, the Notice of Termination by Tenant was of the

Appellee’s own trial Exhibits.

Proper notice under the terms of the Lease was delivered. The testimony at

trial was that the Appellee failed to complete the work in question. The Appellee

never responded to the Appellants’ Notice of Termination by Tenant. As such, the

record does not support a ruling in favor of the Appellee for damages. The Trial

Court was in error to make any award for damages based on a Lease which was

terminated.

ISSUE FIVE

APPELLEE AFTER THE APPELLANT SHOWED THAT THE APPELLEE

FAILED TO PROPERLY MITIGATE ITS OWN DAMAGES.

A legal sufficiency challenge asserts that there is a complete lack of

evidence to support a finding. Raw Hide Oil & Gas, Inc. v. Maxus Exploration Co.,

766 S.W.2d 264, 275 (Tex. App.–Amarillo 1988, writ denied). If successful, the

24 proper remedy for legal insufficiency of evidence generally is rendition of

judgment in favor of the complaining party. Vista Chevrolet, Inc. v. Lewis, 709

S.W.2d 176 (Tex. 1986) (per curiam). In deciding a legal sufficiency challenge,

the court “view[s] the evidence in a light that tends to support the disputed finding

and disregard[s] evidence and inferences to the contrary.” Wal-Mart Stores, Inc.v.

Canchola, 121 S.W.3d 735, 739 (Tex. 2003) (per curiam). The legal sufficiency

standard is classified as either “no evidence” or “matter of law,” depending on

whether the complaining party had the burden of proof. Raw Hide, 766 S.W.2d at

The abuse of discretion standard applies when a trial court has discretion to

either grant or deny relief based on its factual determinations. See Bocquet

v.Herring, 972 S.W.2d 19, 20-21 (Tex. 1998). Applying the abuse of discretion

standard is especially appropriate when the trial court must weigh competing

policy considerations and balance interests in determining whether to grant relief.

See Gen. Tire, Inc.v. Kepple , 970 S.W.2d 520, 526 (Tex. 1998).

In determining whether the trial court has abused its discretion, an appellate

court reviews the record in the light most favorable to the trial court’s action and

indulges every legal presumption in favor of its decision. Holley v. Holley, 864

25 S.W.2d 703, 706 (Tex. App.–Houston [1st Dist.] 1993, writ denied). As the Texas

The test for abuse of discretion is not whether, in the opinion of the reviewing court, the facts present an appropriate case for the trial court’s action. Rather, it is a question of whether the court acted without reference to any guiding rules and principles. Another way of stating the test is whether the act was arbitrary or unreasonable.

Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.

1985) (internal citations omitted). As interpreted by later courts, the Downer test

for abuse of discretion is whether the discretionary rulings were (1) arbitrary or

unreasonable or (2) without reference to any guiding rules and principles.

McDaniel v. Yarbrough, 898 S.W.2d 251, 253 (Tex. 1995). Thus, even if the trial

court refers to the proper guiding rules and principles, an unreasonable or arbitrary

discretionary ruling is an abuse of discretion. Id. At least one court has incorrectly

summarized the Downer test by combining the two separate formulations to form a

single test. Walker v. Guiterrez, 111 S.W.3d 56, 62 (Tex. 2003) (the “trial court

abuses its discretion if it acts in an arbitrary or unreasonable manner without

reference to any guiding rules or principles.”). In a more recent case, however, the

Texas Supreme Court correctly stated the Downer test. See Cire v. Cummings, 134

26 The only evidence of the Appellee’s attempts to mitigate their own damages

was a commercial lease signed by Houston Home Remodeling and More. (RR, Vol.

4 of 4, pages 38-55). However, the lease in question does not reflect the same space

contracted for in the Lease before this Court. (RR, Vol. 4 of 4, pages 6-21). The

addresses do not match.

The Property Code imposes a duty on a landlord to mitigate damages if a

tenant abandons the leased premises in violation of the lease. See TEX. PROP.

CODE ANN. § 91.006(a) (West 2007). This duty requires the landlord to use

objectively reasonable efforts to re-lease the premises when the tenant vacates in

breach of the lease. See Austin Hill Country Realty, Inc. v. Palisades Plaza, Inc., 948

S.W.2d 293, 299 (Tex. 1997). However in this case, there is no evidence that the

amount of money that the Appellee received from the Houston Home Remodeling

and More commercial lease was a leasehold of similar value. No evidence was

presented as to the value of any attempt by the Appellee to re-lease the premises for

the Lease before this Court.

As such, the Trial Court erroneously found that the Appellee had, in fact,

fulfilled his duty to mitigate his damages in this matter.

PRAYER

27 I respectfully submit that all things are regular and that the final judgment of

trial court should be reversed.

Respectfully submitted,

By:________________________ Ernie Garcia Texas Bar No. 24072106 616 FM 1960, Suite 105 Houston, Texas 77090 Tel. (832) 305-7694 Fax (832) 553-2984 ATTORNEY FOR APPELLANTS

28 CERTIFICATE OF SERVICE

I certify that a copy of the foregoing instrument has been mailed to the

opposing counsel at the following address on February 6, 2014:

Jason D. Kraus 13910 Champion Forest Drive Suite 110 Houston, Texas 77069 Fax: (281) 840-5611

________________________ Ernie Garcia

APPENDICES

TEX. R. CIV. P. 165a ....................................................................................................... 9 TEX. PROP. CODE § 91.006(a) ....................................................................................... 27

29 TEXAS RULES OF CIVIL PROCEDURE

RULE 165a. DISMISSAL FOR WANT OF PROSECUTION

1. Failure to Appear. A case may be dismissed for want of prosecution on failure of any party seeking affirmative relief to appear for any hearing or trial of which the party had notice. Notice of the court's intention to dismiss and the date and place of the dismissal hearing shall be sent by the clerk to each attorney of record, and to each party not represented by an attorney and whose address is shown on the docket or in the papers on file, by posting same in the United States Postal Service. At the dismissal hearing, the court shall dismiss for want of prosecution unless there is good cause for the case to be maintained on the docket. If the court determines to maintain the case on the docket, it shall render a pretrial order assigning a trial date for the case and setting deadlines for the joining of new parties, all discovery, filing of all pleadings, the making of a response or supplemental responses to discovery and other pretrial matters. The case may be continued thereafter only for valid and compelling reasons specifically determined by court order. Notice of the signing of the order of dismissal shall be given as provided in Rule 306a. Failure to mail notices as required by this rule shall not affect any of the periods mentioned in Rule 306a except as provided in that rule.

2. Non-Compliance With Time Standards. Any case not disposed of within time standards promulgated by the Supreme Court under its Administrative Rules may be placed on a dismissal docket.

3. Reinstatement. A motion to reinstate shall set forth the grounds therefor and be verified by the movant or his attorney. It shall be filed with the clerk within 30 days after the order of dismissal is signed or within the period provided by Rule 306a. A copy of the motion to reinstate shall be served on each attorney of record and each party not represented by an attorney whose address is shown on the docket or in the papers on file. The clerk shall deliver a copy of the motion to the judge, who shall set a hearing on the motion as soon as practicable. The court shall notify all parties or their attorneys of record of the date, time and place of the hearing. The court shall reinstate the case upon finding after a hearing that the failure of the party or his attorney was not intentional or the result of conscious indifference but was due to an accident or mistake or that the failure has been otherwise reasonably explained. In the event for any reason a motion for reinstatement is not decided by signed written order within seventy-five days after the judgment is signed, or, within such other time as may be allowed by Rule 306a, the motion shall be deemed overruled by operation of law. If a motion to reinstate is timely filed by any party, the trial court, regardless of whether an appeal has been perfected, has plenary power to reinstate the case until 30 days after all such timely filed motions are overruled, either by a written and signed order or by operation of law, whichever occurs first.

4. Cumulative Remedies. This dismissal and reinstatement procedure shall be cumulative of the rules and laws governing any other procedures available to the parties in such cases. The same reinstatement procedures and timetable are applicable to all dismissals for want of

30 prosecution including cases which are dismissed pursuant to the court's inherent power, whether or not a motion to dismiss has been filed.

TEXAS PROPERTY CODE

TITLE 8. LANDLORD AND TENANT

CHAPTER 91. PROVISIONS GENERALLY APPLICABLE TO LANDLORDS AND TENANTS

Sec. 91.006. LANDLORD'S DUTY TO MITIGATE DAMAGES.

(a) A landlord has a duty to mitigate damages if a tenant abandons the leased premises in violation of the lease.

(b) A provision of a lease that purports to waive a right or to exempt a landlord from a liability or duty under this section is void.