Ruben Dario Ortega/FSA, LLC v. FSA, LLC/Ruben Dario Ortega

• Court: Court of Appeals of Texas
• Decided: May 29, 2024
• Docket: 08-23-00068-CV
• Status: Published

Opinion

COURT OF APPEALS EIGHTH DISTRICT OF TEXAS EL PASO, TEXAS

RUBEN DARIO ORTEGA, § No. 08-23-00068-CV

Appellant/Cross-Appellee, § Appeal from the

§ 41st Judicial District Court v. § of El Paso County, Texas FSA, LLC, Appellee/Cross-Appellant. § (TC#2020DCV2745)

MEMORANDUM OPINION

Appellant Ruben Dario Ortega appeals the trial court’s final judgment granting declaratory

relief and attorney’s fees in favor of Appellee FSA, LLC. The underlying dispute involves a breach

of contract claim for missed rental payments under a commercial lease followed by a counterclaim

for improper lockout. On appeal, Ortega asserts the trial court erred in its award of attorney’s fees

because FSA failed to timely produce supporting fee records. Additionally, Ortega contends the

jury’s award of no damages for his improper lockout claim was against the great weight and

preponderance of the evidence. On cross-appeal, FSA requests a remand to the trial court for

additional attorney’s fees. We affirm. BACKGROUND

FSA sued Ortega for breach of a commercial lease that FSA’s predecessor in interest had

entered into with Ortega (2013 Lease). On May 22, 2013, Ortega leased the real property located

at 3516 Confederate in El Paso (the Property) for a ten-year term, set to expire on June 7, 2023.

The 2013 Lease called for Ortega to pay rent in the amount of $3,000 each month, payable by the

8th day of the month, increasing $200 per month for each year starting after the first year, and for

every consecutive year thereafter to a maximum of $4,000 per month, at which point the rent

freezes for the last five years of the contract. An additional term provided that the landlord “has

the right to find [Ortega] in default of this Agreement after 15 days of lateness and may retain any

deposit in full.”

FSA’s original petition included distinct allegations in support of its breach of lease claim.

First, it alleged Ortega breached the 2013 Lease by failing to make timely payments. As a result,

FSA alleged it had provided Ortega with a three-day notice to vacate and initiated a forcible entry

and detainer suit against him. Second, FSA alleged that, shortly after it had declared Ortega in

default of the lease, he produced what he purported to be a second lease between him and Flores

(2014 Lease), which included terms more favorable to him. Specifically, the 2014 Lease stated it

superseded the 2013 Lease and would expire September 30, 2024. 1 The 2014 Lease called for the

same $3,000 in monthly rent but stated: “Payments more than 10 days late will be subject to a

$50[] late fee.” By the suit, FSA contended the 2014 Lease was not genuine and had no legal effect.

FSA sought a declaratory judgment declaring the 2013 Lease controlling of the parties’

1 The Lease stated “September 31, 2024.” We note the month of September only contains 30 days.

2 relationship with respect to the Property, and that the 2014 Lease was void and had no legal effect.

Additionally, FSA requested reasonable and necessary attorney’s fees.

Responding, Ortega asserted, pursuant to the Texas Property Code, a counterclaim for an

unlawful lockout, alleging FSA improperly cut and removed a lock from the door of the Property.

See Tex. Prop. Code Ann. § 93.002(b) (providing a landlord cannot remove a lock from the leased

premises unless the removal is for a bona fide repair or replacement). Ortega further sought a

declaratory judgment that the 2014 Lease did not contain a forgery. Additionally, Ortega requested

attorney’s fees.

The case proceeded to a jury trial. Prior to trial, the parties entered into a Rule 11 agreement

acknowledging both FSA and Ortega had pending claims for attorney’s fees. The parties agreed

not to present evidence on attorney’s fees to the jury; instead, the evidence would be presented to

the trial court for review and consideration. Moreover, the agreement stated that neither party

would raise an objection to the attorney’s fee evidence based on:

(i) the failure to present attorney’s fee evidence at trial to the jury, and (ii) any alleged waiver of the right to seek recovery of reasonable and necessary attorney’s fees based on the lack of evidence presented at trial to the jury on attorney’s fees.

The agreement allowed for other objections to attorney’s fee evidence. Also prior to trial, the

parties agreed to admit exhibits which included Ortega’s own attorney’s fees exhibit.

After the jury heard multiple witnesses and received over 200 exhibits in evidence, the trial

court read the jury the charge of the court which included multiple questions to answer. While the

jury was deliberating, Ortega moved to withdraw their previously admitted attorney’s fees

exhibits.

The jury returned its verdict finding the following: the lessor’s signature on the 2014 Lease

was a forgery; FSA improperly removed the lock connected to the Property; Ortega failed to

3 comply with the 2013 Lease by failing to pay the rental payment for the month of July 2020 and

October 2020; and Ortega’s failure to comply with the 2013 Lease was not excused. The jury

awarded zero dollars to Ortega for FSA improperly removing a lock connected to the door of the

Property.

A few days after trial, FSA filed a motion for judgment on the verdict. Attached to its

motion were the declarations in support of requested attorney’s fees by attorneys Robert L.

Blumenfeld and Michael T. Milligan. Additionally, FSA attached its billing statements. Ortega

objected to the evidence arguing it was not previously supplemented.

On November 10, the trial court held a hearing on the motion where it heard arguments

from counsel on the request for attorney’s fees. There, Ortega objected to FSA’s evidence because

FSA failed to disclose the attorney’s fee amount that it was seeking in discovery. Ortega presented

that FSA’s discovery responses included evidence of attorney’s fees that amounted to $39,955

through August 24, 2022. Ortega asserted that FSA attempted to produce, after trial and for the

first time, additional exhibits claiming attorney’s fees in the amount of $113,000. Specifically, the

exhibits included billing invoices showing fees incurred through September 30, 2022. Ortega

asserted that FSA should have disclosed a range of expected attorney’s fees.

The trial court then entered a final judgment on December 1, 2022. The court ordered and

declared the signature on the 2014 Lease a forgery and awarded FSA attorney’s fees in the amount

of $84,897. 2 The trial court further ordered Ortega take nothing by his counterclaim. Last, after

considering Ortega’s objections to attorney’s fees awarded to FSA, the trial court ordered that no

contingent appellate attorney’s fees were awarded to FSA.

2 In its award of attorney’s fees, the trial court removed the requested fees which were incurred by a previous law firm and expert fees. This is not an issue on appeal.

4 Ortega filed a motion for new trial, which was overruled by operation of law. Ortega timely

appealed and FSA cross-appealed.

ISSUES ON APPEAL

Ortega asserts four issues on appeal. First, he asserts FSA did not disclose the amount of

attorney’s fees that it would seek in discovery responses. Second, Ortega contends there was no

evidence offered to the trial court to justify the failure to properly supplement discovery before

trial. Third, Ortega argues the jury’s award of zero damages for Ortega’s claims of an improper

lockout is not supported by factually sufficient evidence because § 93.002(g) of the Texas Property

Code provides for statutory damages in the event of an improper lockout. Fourth and last, Ortega

contends the case should be reversed and remanded to the trial court for consideration of his claim

for reasonable and necessary attorney’s fees.

Although FSA filed a notice of cross-appeal, its brief lacked a separate heading identifying

the issue presented on cross-appeal. Instead, in responding to Ortega’s fourth issue, FSA argued

that the circumstances of the case strongly supported a remand to the trial court “to revisit the issue

of attorney fees.”

We address each issue, and the cross-issue, in turn.

ATTORNEY’S FEES

In his first and second issues, Ortega challenges the attorney’s fees award. He asserts the

trial court erred in considering evidence not timely disclosed; and, as well, that no good cause or

lack of unfair surprise or prejudice was established to excuse FSA’s failure to properly supplement

discovery before trial. In bringing these issues, Ortega does not dispute that FSA timely produced

evidence of attorney’s fees totalling $48,488.04. And Ortega neither complains that FSA failed to

timely designate its attorneys as experts. Rather, Ortega’s complaint is that FSA sought to present

5 evidence of additional attorney’s fees when it moved to enter judgment and the evidence

supporting the motion was not previously disclosed.

A. Standard of review and applicable law

We review a trial court’s decision to admit or exclude evidence for an abuse of discretion.

Bay Area Healthcare Grp., Ltd. v. McShane, 239 S.W.3d 231, 234 (Tex. 2007) (per curiam). The

trial court abuses its discretion when it acts in an unreasonable and arbitrary manner, or without

reference to any guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d

238, 241–42 (Tex. 1985).

A party who fails to amend or supplement a discovery response in a timely manner may

not introduce in evidence the material or information that was not timely disclosed or offer the

testimony of a witness who was not timely identified, unless the court finds either (1) good cause

for the failure to timely amend or supplement the discovery response, or (2) the failure to timely

amend or supplement the discovery response will not unfairly surprise or unfairly prejudice the

other party. Tex. R. Civ. P. 193.6(a). “The burden of establishing good cause or lack of unfair

surprise is on the party seeking to introduce the evidence or call the witness.” Tex. R. Civ. P.

193.6(b). The trial court has discretion to determine whether the offering party has met its burden

of showing good cause. Aluminum Co. of Am. v. Bullock, 870 S.W.2d 2, 3 (Tex. 1994). The record

must support a finding of good cause or lack of unfair surprise. Tex. R. Civ. P. 193.6(b).

B. Timeliness of the disclosure

As a preliminary matter, we address the parties’ dispute over the timeliness of FSA’s

disclosures. Ortega complains that, at the time of trial, FSA had not supplemented its discovery

responses to disclose additional invoices for attorney’s fees. Responding, FSA contends its

6 evidence of requested fees was not untimely disclosed. Given this dispute over the timeliness of

disclosures, we begin with a timeline of relevant events.

On August 26, 2022, FSA responded to Ortega’s discovery requests with billing invoices

showing attorney’s fees in the amount of $48,488. On September 26, 2022, the parties entered into

the Rule 11 agreement which agreed to have the issue of attorney’s fees determined by the trial

court after the jury’s verdict. On October 7, 2022, after the jury returned its verdict, FSA filed a

motion to enter judgment. FSA requested attorney’s fees in the amount of $113,944.21 and

requested the trial court set the matter for a hearing. To its motion, FSA attached evidence that it

argued would “substantiate the award.” On November 8, Ortega filed an objection to FSA’s motion

for judgment, asserting the trial court should deny the request for attorney’s fees because FSA did

not supplement its discovery responses “before the conclusion of the trial.” The trial court held a

hearing on November 10 and later entered judgment granting attorney’s fees to FSA.

FSA contends it completed production of all its billing records on October 7, 2022, eight

days after the jury returned its verdict. The billing invoices attached to FSA’s motion included the

work on the case through the end of September. Then, the trial court conducted a bench trial on

the issue of attorney’s fees on November 10. FSA interprets Ortega’s argument as asserting that

the bifurcated trial should have been treated as one and all attorney’s fee evidence should have

been provided 30 days before the jury trial commenced. Responding, Ortega asserts the Rule 11

agreement only contained an agreement to have the trial court decide the recovery of reasonable

and necessary attorney’s fees at a post-verdict hearing.

Here, the Rule 11 agreement specifically stated that the parties would not object to the

attorney’s fee evidence presented post-trial based on an argument that the evidence was not

presented at trial to the jury. From this agreement, we conclude FSA’s supplementation was timely

7 provided. Rule 193.5 provides that a supplemental response to discovery “must be made

reasonably promptly,” and a response made less than 30 days before trial is not made reasonably

promptly. Tex. R. Civ. P. 193.5(b). Although the jury trial began on September 27, 2022, the trial

court did not hear the issue of attorney’s fees until November 10, 2022, a bifurcation to which the

parties agreed. Because FSA provided Ortega with the additional billing invoices at least 30 days

before the November 10 hearing, the supplementation was reasonably prompt per our procedural

rules. See id.

For this reason, we reject Ortega’s contention that FSA failed to timely disclose its billing

invoices supporting the award of attorney’s fees.

C. Good cause

Even if FSA’s disclosure should have occurred before the September 27 jury trial, we still

conclude the record supports the trial court’s finding of good cause, and that Ortega was not

unfairly surprised or prejudiced by the additional evidence.

In its motion, FSA represented to the trial court that “[t]he only fees and costs that were

not specifically enumerated in the final pre-trial supplementation were fees and costs that had not

yet been billed or incurred.” FSA described that fees for August through September 2022 did not

exist at the pretrial discovery deadline. Ortega contests FSA’s argument that the invoices were not

available and asserts FSA should have produced an estimate of a range of attorney’s fees FSA

anticipated requesting for services rendered through trial. We disagree with Ortega’s contention.

Ortega does not point to us to any authority stating disclosure of an estimated range of requested

attorney’s fees is necessary for recovery, and we find none.

The record also shows that Ortega was not unfairly surprised by the additional evidence

supporting the request for attorney’s fees. FSA’s request for attorney’s fees was heavily contested

8 from the start of the trial. The parties’ Rule 11 agreement shows they agreed on its resolution by

the trial court. Additionally, FSA contended that Ortega could not claim he was surprised by the

claim for attorney’s fees, or the amount sought, because Ortega knew the complexity of the trial

and “engaged in extensive depositions, opposed various motions filed by FSA, and took long

depositions.”

Ortega’s cited cases are unavailing in that they involved a lack of testimony or evidence to

support a finding of good cause. See Morales v. Rice, 388 S.W.3d 376, 386 (Tex. App.—El Paso

2012, no pet.) (reversing the award of attorney’s fees because the record did not support a finding

of good cause when, although the attorney testified to his fees, he did not testify as to why the

records were not produced earlier); C.A. Walker Const. Co. v. J.P. Sw. Concrete, Inc., No. 01-07-

00904-CV, 2009 WL 884754, at *7 (Tex. App.—Houston [1st Dist.] Apr. 2, 2009, no pet.)

(mem. op.) (holding post-trial requests for damages and attorney’s fees violated Rule 193.6 and

Rule 194.2(d) because the party seeking the amount failed to amend its responses to requests for

disclosure and failed to disclose the amount and method of calculating economic damages and its

requests were not supported by evidence of good cause); Hasty Inc. v. Inwood Buckhorn Joint

Venture, 908 S.W.2d 494, 503 (Tex. App.—Dallas 1995, writ denied) (finding trial court erred

when it overruled objection to evidence that was not timely supplemented before trial because

there was no evidence in the record to show good cause). Rather, here, FSA provided an

explanation on the lack of surprise to Ortega and the good cause for the request it made.

We conclude the record in this case supports the trial court’s implied finding of good cause

because Ortega was not unfairly surprised or prejudiced by the additional evidence. See Hagan v.

Pennington, No. 05-18-00010-CV, 2019 WL 2521719, at *12 (Tex. App.—Dallas June 19, 2019,

no pet.) (mem. op.) (concluding the trial court did not abuse its discretion by allowing evidence of

9 additional fees incurred because the record supported good cause and no unfair surprise of

prejudice). We therefore conclude that the trial court acted within the bounds of its discretion when

it denied Ortega’s request to strike FSA’s evidence supporting its attorney’s fee request.

We overrule Ortega’s first and second issues.

ORTEGA’S REQUEST FOR DAMAGES AND ATTORNEY’S FEES

In Ortega’s third issue, he complains the jury’s award of zero damages for an improper

lockout was against the great weight and preponderance of the evidence. Because the jury

answered “yes” to the question of whether Ortega was wrongfully locked out, Ortega argues the

jury’s award of no damages violated § 93.002(b) of the Texas Property Code.

In reviewing an issue asserting that the jury’s failure to make a finding is “against the great

weight and preponderance” of the evidence, we must consider and weigh all of the evidence and

set aside the finding only if the evidence is so weak or the finding is so contrary to the great weight

and preponderance of the evidence as to be clearly wrong and unjust. Dow Chem. Co. v. Francis,

46 S.W.3d 237, 242 (Tex. 2001).

Section 93.002 provides:

A landlord may not remove a door, window, or attic hatchway cover or a lock, latch, hinge, hinge pin, doorknob, or other mechanism connected to a door, window, or attic hatchway cover from premises leased to a tenant or remove furniture, fixtures, or appliances furnished by the landlord from premises leased to a tenant unless the landlord removes the item for a bona fide repair or replacement. If a landlord removes any of the items listed in this subsection for a bona fide repair or replacement, the repair or replacement must be promptly performed.

Tex. Prop. Code Ann. § 93.002(b). When a landlord violates this section, a tenant may recover “an

amount equal to the sum of the tenant’s actual damages, one month’s rent or $500, whichever is

10 greater, reasonable attorney’s fees, and court costs, less any delinquent rents or other sums for

which the tenant is liable to the landlord.” Tex. Prop. Code Ann. § 93.002(g)(2).

B. Analysis

At trial, the jury heard evidence that FSA sought to exercise its lock-out authority by

locking out Ortega based on his delinquency in timely paying his rent. To avoid locking out a

subtenant, FSA tasked its employee with installing a new lock underneath the existing lock on the

metal gate leading to the door of the Property. FSA claimed its employee misunderstood the

instruction, and instead, sawed off the existing lock on the exterior iron gate leading to the front

door of the Property. FSA then purchased a new lock for the exterior gate and gave it to the

subtenant. Ortega testified he only discovered the lock on the Property had been cut by FSA’s

employee after his sub-tenant informed him. At the conclusion of trial, the jury was asked the

following question based on the instruction given:

Did [FSA] or its agent improperly remove a lock connected to the door of [the Property]?

A landlord may not remove a lock connected to a door from premises leased to a tenant unless the landlord removes the item for a bona fide repair or replacement.

Answer “Yes” or “No.”

The jury answered, “Yes.” The jury was also asked: “What sum of money, if any, if paid now in

cash, would fairly and reasonably compensate [Ortega] because [FSA] or its agent improperly

removed a lock connected to the door of the Property?” It answered “zero.”

Ortega contends the jury’s award of no damages was against the great weight and

preponderance of the evidence because he presented evidence that his monthly rent was $4,000.

FSA did not dispute the contracted amount of Ortega’s monthly rent. Ortega argues that

uncontradicted testimony of asserted damages is sufficient to support an award of damages under

11 this section. See French v. Moore, 169 S.W.3d 1, 13 (Tex. App.—Houston [1st Dist.] 2004, no

pet.). However, the statute does not require the award of damages for a violation of the section.

Subsection (g)(2) provides:

(g) If a landlord or a landlord’s agent violates this section, the tenant may:

(1) either recover possession of the premises or terminate the lease; and

(2) recover from the landlord an amount equal to the sum of the tenant’s actual damages, one month’s rent or $500, whichever is greater, reasonable attorney’s fees, and court costs, less any delinquent rents or other sums for which the tenant is liable to the landlord.

Tex. Prop. Code Ann. § 93.002(g) (emphasis added). Ortega contends the jury’s no damages

verdict was against the great weight and preponderance of the evidence because the statute allows

for the recovery of statutory damages in the amount of the greater of one month’s rent or $500 and

there was uncontroverted evidence that his rent was $4,000. See id. However, reading the statute

as a whole, it does not require, per se, the award of damages for a violation of the statute. Moreover,

without objection, the jury was instructed to “Answer in dollars and cents for damages, if any.”

The jury returned a verdict of “zero” damages.

For this reason, we conclude the jury’s award of damages, or lack thereof, for an improper

removal of a lock was not against the great weight and preponderance of the evidence. Rumzek v.

Lucchesi, 543 S.W.3d 327, 335 (Tex. App.—El Paso 2017, pet. denied). Accordingly, we overrule

Ortega’s third issue.

In Ortega’s fourth issue, he asserts that if we reverse the award of damages, we must also

remand for consideration of attorney’s fees to be awarded. Because we resolve issue three against

Ortega, we also overrule his fourth issue based on the same reasoning. See Tex. R. App. P. 47.1.

12 FSA’S CROSS-APPEAL

As we earlier noted, FSA articulated no cross-issue by separate heading. Its brief, however,

includes a sentence somewhat describing the basis for it seeking affirmative relief from the trial

court’s judgment. Specifically, FSA argues, “the unique circumstances of this case strongly

suggest that the Court of Appeals should remand the case to the District Court to exercise its

discretion based on consideration of this matter as a case of first impression.” Although FSA seeks

a remand of the case for the trial court to revisit attorney’s fees, it does not claim the trial court

erred in rendering its judgment. Rather, FSA requests this Court remand to the trial court so it can

revisit the issue of attorney’s fees in light of Ortega’s conduct, complaining of his production of a

second lease. In its prayer, FSA requests we remand for additional fees, costs, and expenses in

light of the unique circumstances of this dispute. Because FSA does not claim trial court error, nor

provide supporting authority for the relief requested, we conclude the cross-issue has been waived.

TEX. R. APP. P. 38.1(h), (i). For this reason, we overrule FSA’s request for relief on cross-appeal.

CONCLUSION

We affirm.

GINA M. PALAFOX, Justice

May 29, 2024

Before Palafox, J., Soto, J., and Barajas, C.J. (Ret.) Barajas, C.J. (Ret.) (Sitting by Assignment)