Shields Ltd. Partnership v. Bradberry

526 S.W.3d 471, 60 Tex. Sup. Ct. J. 919, 2017 WL 2023602, 2017 Tex. LEXIS 448
CourtTexas Supreme Court
DecidedMay 12, 2017
DocketNo. 15-0803
StatusPublished
Cited by267 cases

This text of 526 S.W.3d 471 (Shields Ltd. Partnership v. Bradberry) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shields Ltd. Partnership v. Bradberry, 526 S.W.3d 471, 60 Tex. Sup. Ct. J. 919, 2017 WL 2023602, 2017 Tex. LEXIS 448 (Tex. 2017).

Opinion

Justice Guzman

delivered the opinion of the Court.

In this forcible-detainer action,1 a commercial landlord seeks to oust a long-term tenant claiming a superior right of immediate possession under a lease-extension option. Though the tenant frequently defaulted on the lease’s rental-payment terms, the landlord regularly accepted the tenant’s rental payments when tendered and without protest. The parties had agreed, however, that the landlord’s “acceptance of late installment of Rent shall not be a waiver and shall not estop Landlord from enforcing that provision or any other provision of [the] lease in the future”; “all waivers” must be “in writing and signed by the waiving party”; and any forbearance of enforcement shall not be construed to constitute a waiver.2

Express contract terms notwithstanding, the tenant asserts the landlord waived the contractual nonwaiver provision by accepting late payments without protest and, therefore, cannot deny force and effect to a lease extension the tenant had the option to exercise if he had “fulfilled all of the [474]*474terms, and conditions” of the lease. The tenant contends the landlord’s conduct in accepting late rental payments waived the contractual nonwaiver clause. The decisive issue is whether waiver of a nonwaiver provision can be anchored in the same conduct the parties specifically agreed would not give rise to a waiver of contract rights. We hold it cannot.3 A contrary conclusion could not be squared with Texas’s strong public policy favoring freedom of contract4 or with the notion that waiver requires intentional relinquishment of a known right or intentional conduct inconsistent ■ with claiming that right.5 The lease’s plain terms permit the landlord to rely on the contractual nonwaiver clause and accept due and payable, but late,- rental payments without waiving its right to enforce the lease as written.

Though we do not hold a nonwaiver provision' may never be waived,6 there must, at a minimum, be some act inconsistent with its terms.7 Here, the record bears no evidence the landlord acted inconsistently with the contract’s express terms. Nor has the tenant identified any false or misleading representation supporting an equitable-estoppel bar to eviction, as the tenant asserts. We therefore reverse the [475]*475court of appeals’ judgment rejecting the landlord’s forcible-detainer action, render judgment in the landlord’s favor, and remand to the trial court to award attorney’s fees in accordance with the parties’ contract.8

I. Factual and Procedural Background

Shields Limited Partnership (Shields) owns commercial property housing the San Francisco Rose restaurant in Dallas, Texas. Boo Nathaniel Bradberry and 40/40 Enterprises, Inc. (collectively Bradberry) claim a superior right to immediate possession of the property as tenants under-sublease and sub-sublease agreements executed in 2005. Shields - argues Bradberry is merely a month-to-month holdover tenant while Bradberry counters that he effectively exercised an option to extend the lease through May 31,2017.

The pertinent terms of the base lease, sublease, and sub-sublease provide as follows:

• Monthly rent is due “without ... prior demand” on the first day of the month. Failure to pay rent by the tenth day of the month is “an event of default” under the lease.
• “All waivers must be in writing and signed by the waiving party. Landlord’s failure to enforce any provisions of this Lease or its acceptance of late installments of Rent shall not be a waiver and shall not estop Landlord from enforcing that provision or any other provision of this Lease in the future.”
• “If Tenant has fulfilled all of the terms-and conditions of the'initial lease period [expiring May 31, 2007], he shall have the option to extend the lease for an additional 5-year period* at the rate of $3,000/month [expiring May 31, 2012]. Tenant will notify Landlord’s Agent in writing of his intention to exercise this option no later than ninety (90) days prior to the expiration of the initial lease period.”
• If the tenant does not vacate the premises upon the expiration of the lease, occupancy converts to a month-to-month tenancy, subject to the terms of the lease and a holdover rent of $3,000 per month.
• Bradberry assumed the tenant’s obligations as outlined in the base lease; the sublease, is subordinate to the - base lease; and if the terms of the base lease were fulfilled on June 1, 2007, Bradberry was to sign a new . lease with Shields and thereby become the “tenant” rather than the “subtenant” (which never happened).
• -“If Subtenant [Bradberry] has fulfilled all the terms and conditions of the lease and option set forth [in the base lease], he shall have the option as Tenant to extend the lease for an additional 5 years from June 1, 2012, through May 31, 2017” with a new rental rate tied to the Consumer Price Index (CPI) and payment of a pro-rata share of property taxes “when billed by the Principal Realtor or Landlord.”
[476]*476• Bradberry also had the option to extend the lease for two additional five-year periods—ending May 31, 2027—on the same terms as above, including giving timely notice, fulfilling all the terms of the base lease through each preceding option period, paying CPI-adjusted rent, and paying a pro-rata share of property taxes.
• Rent and all notices were to be delivered to the landlord’s “Principal Broker,” which was J.W. Lindsley & Co. until December 2011 and, thereafter, S.E. Covington & Company (Coving-ton).

As specified in the parties’ agreements, following the May 31, 2012 expiration of the base lease’s initial option period, Brad-berry had the option to extend the lease term for three successive five-year periods, the last of which would expire on May 31, 2027. Bradberry’s option to extend the lease was contingent on Bradberry (1) timely exercising the option in writing and (2) “fulfill[ing] all of the terms and conditions of the [base] lease and [preceding] option[s].” Importantly, had Bradberry exercised the option to extend the lease, the rent, which had been fixed at $3,000 per month, would fluctuate annually based on the CPI-adjusted formula prescribed in the sublease with the modified base amount compounded annually.9 Moreover, Bradberry would be required to pay a pro-rata share of property taxes “when billed by the Principal Realtor or Landlord.”

In September 2011, Bradberry notified the landlord, in writing via J.W. Lindsley & Co., that he intended to exercise his option to extend the lease from June 1, 2012, to May 31, 2017. The notice, ostensibly delivered more than ninety days before the lease was set to expire, was also timely.10

Bradberry was not as timely with his rental payments, regularly violating the lease terms by paying rent past the due date and cure period—with the extent of the deviation varying from relatively slight to significant. Without fail, the landlord, intent on getting paid, accepted the rent when tendered without protest or assessment of late fees.

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Cite This Page — Counsel Stack

Bluebook (online)
526 S.W.3d 471, 60 Tex. Sup. Ct. J. 919, 2017 WL 2023602, 2017 Tex. LEXIS 448, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shields-ltd-partnership-v-bradberry-tex-2017.