S & D GROUP, INC. v. Talamas

710 S.W.2d 680, 1986 Tex. App. LEXIS 12777
Court of Appeals of Texas·Decided April 17, 1986·No. 13-85-304-CV·Published·Cited by 10 cases

Opinions

OPINION

DORSEY, Justice.

This is an appeal from a judgment and award of damages in a suit arising from an alleged breach of a lease of commercial property. Appellants’ first two points of error allege that the jury findings are immaterial and have no support in the evidence. The third point of error complains of the trial court’s failure to refund appellants’ rental deposit. We sustain appellants’ points of error and reverse and render.

S & D Group, Inc., a California corporation, and appellee, J. Anthony Talamas, entered into a written Sublease agreement on July 15, 1982, for retail space in downtown Laredo, Texas. At the time this Sublease was executed, the building in question was under construction and was owned by Mr. and Mrs. J.J. Haynes, who had leased the entire building to appellee, Talamas, in what will be referred to as the “Main Lease.” Appellee, in turn, agreed to Sublease one-fourth of the building to appellant, S & D Group, Inc. Appellant Kim guaranteed the performance of S & D, and was the sole stockholder of S & D. The issue is whether the Sublease began so as to entitle appellee/Talamas to rents.

The Sublease provided that its term was to begin “September 1, 1982, or upon the effective date of the Main Lease hereinafter specified, whichever is later, and ending August 31, 1992....” The Main Lease was specifically incorporated into the Sublease. The Main Lease provided:

Term of Lease
The term of this lease shall be ten (10) years, commencing on September 1, 1982, and ending on August 31, 1992, unless sooner terminated as herein provided, or started later as herein provided.
In regards to starting date September 1, 1982, Lessor and Lessee agree that if said building is not completed by September 1, 1982, Lessor shall have an additional sixty (60) days until November 1, 1982 to complete said building and have certificate of occupancy issued....

Both the Main Lease and Sublease had provisions making time of the essence in their performance. The Sublease also contained the following sentence with a blank date which was to be “filled in when said [682]*682date has been established as aforesaid so that same shall read as follows: ‘The rental period shall commence on the 1st day of Sept, 1982, and shall end on the last day of August, 1992, subject to the terms and provisions herein contained.’ ”

Appellants filled in the blanks, as shown, before signing the contract. Appellee later signed the contract as completed. Construction on the building was delayed. Ap-pellee notified appellants of the delays in August of 1982 and every two weeks thereafter, each time representing that the building would be completed in just two more weeks. On December 16,1982, appel-lee notified appellants by letter that the building was ready for occupancy. Appellants refused to take possession of the premises and to pay rent.

Appellee, Talamas, sued for breach of the lease, seeking to recover all rents due under it. He contends that the Sublease provided for the possibility of some delay in the commencement date of the lease, as illustrated by the flexible language:

Sublessor hereby Subleases the demised premises unto the sublessee for a period beginning September 1, 1982 or upon the effective date of the main lease, whichever is later_ [Emphasis added.]

Appellee's position is that because the leases contemplated that a delay in the construction of the building was a possibility, the December 16,1982, occupancy date was a timely notice that the building was ready for occupancy and was sufficient to begin appellants’ liability for rents. It is appel-lee’s position, therefore, that because the “main lease” did not commence until December 16,1982, then the Sublease likewise did not commence until that date, pursuant to its specific terms.

S & D Group, Inc. counterclaimed, alleging that because appellee failed to tender possession by September 1,1982, as provided in the Sublease, appellee breached the lease; and because the Sublease made “time of the essence,” appellants’ duties under the lease were extinguished by ap-pellee’s breach. Appellants also pled entitlement to a refund of their $12,000.00 deposit, plus interest.

The case was submitted to the jury that made the following findings: the parties contracted that the Sublease would commence on September 1, 1982, or upon the commencement of the main lease, whichever was later; the Sublease actually commenced on December 16, 1982; and, S & D Group, Inc. breached the Sublease by failing to pay any rentals to Talamas after the commencement date of the lease. Based on the testimony of both Talamas and a real estate appraiser, the jury also found: past due rentals from December 16,1982 to December 16, 1983 totalled $60,000; past due rentals from December 16, 1983 to March 16, 1984 came to $15,990; and, future rentals through December of 1992 to-talled $46,500. The jury also found that appellants had invested no money for the business operation in the leased premises and had suffered no pecuniary loss due to any breach by appellee. Judgment was entered for appellee in accordance with the verdict for $122,490.00 damages, $12,000.00 attorneys fees, $3,000 for appeal to the Court of Appeals and $2,000 for appeal to the Supreme Court.

Appellants’ first two points of error contend that the trial court erred in rendering judgment for Talamas because the sublease provided it would commence on September 1, 1982 or contemporaneously with the start of the Main Lease, which would be no later than November 1, 1982, and expressly made time of the essence; therefore, the jury findings are immaterial and have no support in the evidence. As a basis for this argument, appellants assert that the Sublease was clear and unambiguous as to the period in which the Sublease had to begin as a matter of law and, therefore, there was nothing for the jury to decide.

If a written instrument is so worded that it can be given a certain or definite legal meaning or interpretation, it is not ambiguous. Coker v. Coker, 650 S.W.2d 391 (Tex.1983); Corriveau v. 3005 Investment Corp., 697 S.W.2d 766, 767 (Tex.App—Cor[683]*683pus Christi 1985, writ ref d n.r.e.). If there is no ambiguity, the construction of the instrument is a question of law for the court and a jury may not be called upon to construe the legal effect of the instrument. City of Pinehurst v. Spooner Addition Water Co., 432 S.W.2d 515, 518 (Tex.1968); Trinity Universal Insurance Co. v. Ponsford Brothers, 423 S.W.2d 571, 575 (Tex.1968).

The evidence clearly establishes that the parties did contract for the Sublease to begin on “September 1, 1982, or upon the effective date of the Main Lease hereinafter specified, whichever is later....” The Sublease expressly provided that “Except as as (sic) herein otherwise expressly provided, all of the terms, agreements and conditions in the Main Lease referred to hereinabove ...

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S & D GROUP, INC. v. Talamas, 710 S.W.2d 680, 1986 Tex. App. LEXIS 12777 (Tex. Ct. App. 1986).

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S & D GROUP, INC. v. Talamas
710 S.W.2d 680 (Court of Appeals of Texas, 1986)