MOOSAVIDEEN v. Garrett

300 S.W.3d 791, 2008 WL 4965165
CourtCourt of Appeals of Texas
DecidedApril 7, 2009
Docket01-06-00002-CV
StatusPublished
Cited by9 cases

This text of 300 S.W.3d 791 (MOOSAVIDEEN v. Garrett) 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
MOOSAVIDEEN v. Garrett, 300 S.W.3d 791, 2008 WL 4965165 (Tex. Ct. App. 2009).

Opinion

OPINION

SAM NUCHIA, Justice.

We deny appellees’ motion for rehearing. However, we withdraw our opinion and judgment of July 26, 2007 and issue this opinion in their stead.

The issue presented by this appeal is whether a lessee validly exercised a purchase option before being notified by the lessor that the lessee was in default on the lease. We also consider whether a lessee can validly exercise a purchase option despite being in default of the lease. We hold that (1) the lessee validly exercised the purchase option before being notified that he was in default on the lease, and (2) the lessee could exercise the purchase option anytime before the contract terminated because the lease did not contain language in the option clause conditioning its exercise on the lessee’s performance of the terms of the lease. Accordingly, we reverse and render in part and reverse and remand in part.

BACKGROUND

The 1928 lease

In 1928, Lucy G. Travis, as lessor, and Edwin H. Wilder, as lessee, entered into a 99-year lease of a tract of property located in Harris County, Texas. The lease was freely assignable by either party, and its terms are binding upon the heirs, legal representatives, and assigns of the original parties. Two terms of the lease are relevant to the case before the Court.

*794 Article XV of the lease, hereinafter referred to as the “purchase option,” provides as follows:

In consideration of the amount of the rental payments hereunder, paid and to be paid, and of the other valuable considerations inuring to the benefit of the LESSOR hereunder, the LESSOR hereby gives and grants to the LESSEE, and LESSEE shall have an optional right at any time within a period of the term of this lease, to purchase the interest of Lessor in and to the demised premises described in ARTICLE 3 hereof, as follows
At and for an agreed purchase price of FIFTY THOUSAND DOLLARS ($50,000.00) to be paid either in cash, or one-half cash, and balance in five (5) equal annual payments, with interest at seven percent (7%) per annum, payable as it accrues, with Vendor’s Lien reserved to secure payment.
If, and when LESSEE notifies the LESSOR, of his election to exercise said option to purchase and demonstrates his readiness to pay the amount specified above, LESSOR binds and obligates herself to forthwith execute and deliver to LESSEE a conveyance of her interest in the demised premises and all rights incident thereto, with covenants of general warranty, conveying her said interest and title to said premises free and clear of all encumbrances, judgments, or other liens, subject only to this present lease and anyone claiming hereunder. After receipt of notice of such election to purchase, the LESSOR agrees to promptly furnish LESSEE a complete Abstract of Title to the demised premises so that he may have the title examined before the deed is executed. If and when said option is exercised and the purchase price paid, all future rentals which otherwise would become due under this lease shall cease and the LESSEE shall be under no obligation to the LESSOR for anything accruing hereunder from and after the date of the consummation of said sale.

The 1927 lease also contained the following language in Article X:

At no time during the life of this contract shall LESSEE permit to be carried on in the demised premises, or any part thereof, any kind or character of business whatsoever which is not permitted by law; and LESSEE agrees at all times to perform any and all lawful requirements in regard to the use and occupancy of the demised premises and improvements, as well as to the use and occupancy of the streets and sidewalks adjacent thereto, and agrees that he shall at all times conform to such requirements and perform the same in such manner as to relieve the LESSOR and the demised premises from any liability therefor. The LESSEE shall have the right to use the demised property during the lease term for any lawful purposes.

Finally, the lease contained the following provision, whereby the parties were obliged to notify one another of any change of address:

All notice and delivery of papers herein mentioned and required to be given shall be given in writing by registered mail properly addressed to the address of the party for whom it is intended, and a registered receipt from the postal authorities of the United States showing the mailing to such party by registered mail at the proper address, together with a copy of the notice sent in the hands of the sending party, shall conclusively establish the giving of such notice ....
The present address of Miss Luch G. Travis, is 4103 Rossmoyne, Houston, *795 Texas, and the present address of the lessee, Edwin H. Wilder, is 1204 Milam St., Houston, Texas, to which addresses, until changed as hereinafter provided, all notices required shall be mailed.
In the event the address of any party hereto is changed or desired to be changed from those stated in the preceding paragraph ... it shall be the duty of the party making or desiring to make such change to notify the other party hereto ... giving such notice his new address, which notice shall likewise be given by registered mail.

The Subsequent History of the Lease

Wilder, the original lessee, assigned the lease to Scott Shambaugh in 1929. In 1930, Shambaugh assigned the lease to The Texas Company (“Texaco”). Texaco operated a service station on the property for almost 50 years. The undisputed evidence shows that during the time the service station was in operation there were no environmental regulations to report or remediate contamination of the soil. The lease remained with Texaco 1 until 1989, when it was assigned to Hamid Liaghat and Hassan Naghavi.

Moosavideen Obtains the Lease and Attempts to Exercise Purchase Option

On November 9, 2000, shortly before he acquired the lease, Moosavideen sent a letter to three of the original lessor’s heirs — Lucy Foote McKinstry, John Travis Garrett, and John G. Meador, Jr.— expressing his interest in acquiring the lease for the purpose of exercising the purchase option. He received no response. Three months later, on January 22, 2001, Moosavideen acquired the lease from Liaghat and Naghavi.

Moosavideen was informed by his predecessors that Lucy G. Travis, the original lessor, had four heirs to whom they had forwarded rent payments: (1) Lucy Foote McKinstry, (2) John Travis Garrett, (3) Bank One Texas, N.A., as guardian of the estate of Mildred Webster Garrett, and (4) John G. Meador. On May 18, 2001, Moo-savideen sent notice to these four heirs that he intended to exercise the option to purchase.

Having received no response, on August 6, 2001, Moosavideen again notified these four heirs that he intended to exercise the option contract in the lease. Moosavideen also included a warranty deed he had obtained and requested that the heirs correct any error in the listing of the owners and their percentage of ownership. The deed listed 15 owners and included signature blocks for each.

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300 S.W.3d 791, 2008 WL 4965165, Counsel Stack Legal Research, https://law.counselstack.com/opinion/moosavideen-v-garrett-texapp-2009.