Parts Industries Corp. v. A.V.A. Services, Inc.

104 S.W.3d 671, 2003 Tex. App. LEXIS 2244, 2003 WL 1121023
CourtCourt of Appeals of Texas
DecidedMarch 13, 2003
Docket13-99-509-CV
StatusPublished
Cited by24 cases

This text of 104 S.W.3d 671 (Parts Industries Corp. v. A.V.A. Services, 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.

Bluebook
Parts Industries Corp. v. A.V.A. Services, Inc., 104 S.W.3d 671, 2003 Tex. App. LEXIS 2244, 2003 WL 1121023 (Tex. Ct. App. 2003).

Opinion

OPINION

Opinion by

Justice AMIDEI.

A.V.A. Services, Inc., appellee (AVA) sued GPK Parts Industries, Inc., appellant (GPK) for breach of a commercial real estate lease and to enforce an option to purchase thereunder. GPK appeals from an adverse jury verdict and judgment in the amount of $43,336.19, plus 10% interest *675 and attorney’s fees, alleging nineteen issues for our review. GPK’s primary contention is that as a matter of law AVA waived its cause of action for breach of implied warranty of suitability for commercial purposes, and the jury should have awarded it delinquent rent, holdover rent, penalties and late fees which it sought in its counterclaim. We affirm.

Factual Background

GPK leased a warehouse in Beaumont to AVA. AVA’s president, Mr. Dorset and one of its employees, Mr. Light, inspected the premises several times prior to signing the lease on May 31, 1990. During the first inspection, they noticed the roof leaked even though the electricity was off. GPK assured AVA the warehouse was in good condition but there were many latent defects, including massive roof leaks and electrical problems caused by leaking water which could not be discovered until the electricity was turned on. GPK’s agent refused to turn on the electricity until the lease was signed. AVA certified that it inspected the warehouse, accepted it in its “as is condition,” as suitable “for the purposes for which same are leased.” 2 In order to accommodate AVA, GPK made numerous modifications and repairs for which it was not responsible under the lease.

The lease provided that GPK shall keep the roof in good repair, 3 and in the event GPK breached any obligation under the lease AVA would have, in addition to any other remedies provided by law, statute or ordinance, 4 the cumulative right to (1) either terminate the lease, or (2) make the necessary repairs (to be reimbursed by GPK) 5 . The use of any one right or remedy by either party shall not preclude or waive its right to use any or all other remedies. 6 The lease obligated AVA to pay $4,000.00 monthly rental payments from December 1, 1990, to June 30, 1992 and $5,500.00 per month for the last twenty-four months of the lease or until June 30, 1994, plus late charges and penalties in *676 the event of late payments as therein provided. In the event of “holding over” the lease would become a tenancy from month to month and the lease rental obligation of AVA would increase to $6,000.00 per month. Although the 48-½ month lease term began on June 15, 1990, rent payments were abated for five months by GPK. Complaints 7 of a leaky roof were made to the real estate agent 8 and although some repairs were made or attempted by a company hired by the agent and some repairs were made by AVA, AVA claimed the repairs were not successful and that it could not afford to make all the necessary roof repairs or vacate the warehouse and leave $40,000.00 it invested in the lease. Also, AVA claimed its intent was to purchase the warehouse property under the option provided in the lease, and therefore did not wish to terminate the lease. GPK, through its agent, the real estate agent, undertook to make roof repairs pursuant to the lease, even if inadequate. AVA chose to not make the necessary roof repairs because of financial limitations, its desire to protect its option to purchase rights and to reserve its right to reimbursement (or a new roof upon purchase of the property). When he received repair requests, Mr. Carey had Perkins Roofing Company repair the roof. AVA never complained about the roof repairs by Perkins. AVA solicited a bid from Perkins to replace the roof after AVA became a holdover tenant. The roof did not require replacement until November 1993. The real estate agent informed AVA it could replace the roof. AVA did not replace the roof or request that it be replaced until it attempted to exercise the option to purchase. When GPK became aware of AVA’s complaints about the roof, GPK lowered the option purchase price to accommodate the replacement of the roof. On June 10, 1994, AVA exercised its option to purchase the warehouse for $325,000.00, expressly subject to financing. The original purchase price of $400,000.00 was lowered by $75,000.00, the amount of the estimated roof replacement. AVA did not close the option purchase during the time provided because it did not obtain the required financing. AVA refused to pay rent as a holdover tenant, and GPK filed eviction proceedings on April 11, 1995. The amount of back rent and penalties totaled $451,000.00, and the amount of attorney’s fees sought by GPK was $15,000.00. A lis pendens notice filed by AVA on September 11, 1995 allegedly prevented GPK from selling the warehouse for over three years. AVA alleged the leaky roof caused damage to its products stored in the warehouse, its vending machines and equipment, and its trucks due to rusty water from the roof dripping on the trucks. AVA presented GPK with a demand for damages caused by the leaking roof.

Jury Findings

The answer to jury question number one finds that GPK failed to comply with the lease, but despite the accompanying instruction and definition as to implied warranty of suitability the jury did not find nor was it required to find the non compliance was a breach of the express obligation to repair the roof or a breach of implied warranty of suitability.

In answer to jury question number two the jury found that GPK’s failure to com *677 ply with the lease was not excused. This question was accompanied by instructions that GPK is excused by AVA’s previous failure to comply with a material obligation of the same agreement or if compliance is waived by AVA. Waiver was defined as an intentional surrender of a known right or intentional conduct inconsistent with claiming the right.

The jury found in answer to jury question number three that AVA failed to comply with the lease, and in answer to question number four that AVA’s failure to comply was excused. Question number four was accompanied by the instruction that failure to comply by AVA is excused by GPK’s previous failure to comply with a material obligation of the same agreement, if so found, or by GPK’s breach of its implied warranty of suitability for commercial purposes, if so found.

Jury question number five inquired as to AVA’s damages, and the jury found AVA was damaged $10,000.00 due to water damaged inventory or product, $12,500.00 costs to repair damaged equipment, $10,000.00 costs to repair damaged vehicles, and nothing for increased operational expense due to personnel turnover.

The jury denied GPK any recovery for rentals by not answering jury question number six.

Jury questions seven, eight, nine and ten inquiring as to the parties’ conduct and obligations concerning the option to purchase agreement were answered in favor of GPK.

The jury found in question number 11 that the lis pendens notice filed by AVA should be removed.

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Bluebook (online)
104 S.W.3d 671, 2003 Tex. App. LEXIS 2244, 2003 WL 1121023, Counsel Stack Legal Research, https://law.counselstack.com/opinion/parts-industries-corp-v-ava-services-inc-texapp-2003.