Wadsworth Properties v. ITT Employment and Training Systems, Inc.

816 S.W.2d 819, 1991 Tex. App. LEXIS 2344, 1991 WL 185059
CourtCourt of Appeals of Texas
DecidedSeptember 19, 1991
Docket01-91-0048-CV
StatusPublished
Cited by7 cases

This text of 816 S.W.2d 819 (Wadsworth Properties v. ITT Employment and Training Systems, 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
Wadsworth Properties v. ITT Employment and Training Systems, Inc., 816 S.W.2d 819, 1991 Tex. App. LEXIS 2344, 1991 WL 185059 (Tex. Ct. App. 1991).

Opinion

OPINION

DUNN, Justice.

The appellant, Wadsworth Properties, appeals the take-nothing judgment entered, after trial to the court, in favor of the appellee, ITT Employment and Training Systems, Inc. (“ITT”).

Wadsworth Properties sued ITT for breach of a commercial lease. Wadsworth Properties claimed ITT breached the lease by failing to make full monthly rental payments in July, August, and September 1988, and by failing to make any rental payments beginning in October 1988. ITT claimed it was authorized to and did terminate the lease, thereby excusing ITT from making any monthly rental payments beginning in October 1988.

On October 15, 1985, Wadsworth Properties and ITT executed a lease agreement. Under the lease, ITT leased a floor in a building from Wadsworth Properties for 60 months beginning November 15,1985. The agreed monthly rental was $12,610.67. One event of default under the lease was defined as ITT’s failure to pay any rent when due if the failure continued for 15 days after written notice from Wadsworth Properties.

An addendum to the lease reduced the monthly rental rate to $7,881.67. The addendum also added a clause giving ITT a right to terminate the lease. Under the termination clause, ITT had the right to terminate the lease

if, for any reason, funding to Tenant named herein [ITT] currently being received by it from Houston Job Partnership Council is terminated by said Council ... provided there exists no uncured default on the part of Tenant [ITT] under this Lease at the effective date of termination.

*821 According to Robert Wadsworth, president and general partner of Wadsworth Properties, ITT requested the clause because it was concerned that its current funding from the Houston Job Partnership Council (“Council”) would be terminated. Wadsworth testified that he understood the “current funding” in the termination clause to refer to the funding ITT was receiving for the 1985-86 program year. Therefore, Wadsworth felt if the lease was not terminated during the 1985-86 program year, the termination clause was no longer in effect. Wadsworth believed any future funding ITT received from the Council had no bearing on ITT’s right to terminate under the lease.

Paul Stumbaugh, director of real estate for ITT, testified that the termination clause was added to protect ITT in the event its funding was reduced or terminated. ITT was primarily concerned with the renewal of its funding; it was not particularly concerned that funding would be terminated in the middle of a program year. ITT intended the termination clause to be applicable at any time during the term of the lease. The clause was to be used in the event funding was terminated or was reduced to a level making it uneconomical for ITT to operate. Stumbaugh claimed ITT’s intention was communicated to Wadsworth Properties before the lease was executed, and Wadsworth Properties had no objection.

On April 10, 1987, Wadsworth Properties and ITT amended the lease by a letter agreement. The amendment provided that the monthly rental would be negotiated every 12 months on July 1, unless the Council awarded ITT funding in excess of $1,000,000 for the 12 month period. If funding exceeded $1,000,000, the existing monthly rental of $7,881.67 would remain in effect. The monthly rental was reduced to $4,166.67 for the period beginning July 1, 1987, and ending June 30, 1988. The amendment specifically reaffirmed all other terms of the lease, including the termination clause.

On February 9,1987, Stumbaugh wrote a letter to Wadsworth Properties expressing ITT’s intention to exercise its right of termination; the Council was reducing ITT’s funding. Instead of terminating the lease, ITT and Wadsworth Properties renegotiated the monthly rental and signed the amendment. The reduced monthly rental allowed ITT to continue to operate at its reduced level of funding. Wadsworth testified that Wadsworth Properties signed the amendment as a compromise. ITT had originally requested reduced space. Wads-worth claimed that he anticipated negotiations, under the amendment, to occur each year based on the level of ITT’s funding.

On August 22, 1988, ITT informed Wads-worth Properties that it would exercise its option to terminate under the lease effective September 80, 1988. ITT stated that its funding expired on August 22,1988, and the Council had not accepted any of ITT’s proposals to renew funding.

Thomas Huter, former divisional controller of ITT, testified that at the time the lease was executed, ITT had approximately $1,600,000 funding from the Council. For the 1986-87 program year, the Council reduced funding to ITT to approximately $338,000; in 1987-88, the Council reduced funding to ITT to approximately $340,000. Huter felt that because of the reduced funding, ITT had the right to terminate the lease. In the spring and early summer of 1988, on behalf of ITT, Huter negotiated with the Council for the 1988-89 program year. On September 8, 1988, the Council sent ITT a letter outlining a proposal and indicating that if the proposal was unacceptable to ITT, no further negotiations would be necessary. Huter recommended the proposal not be accepted because it would result in losses to ITT. ITT did not accept the proposal.

Before trial, ITT and Wadsworth Properties stipulated that ITT made monthly rental payments in the amount of $4,166.67 for the months of July, August, and September 1988. They also stipulated that ITT failed to make any monthly rental payment for October 1988, or any subsequent month.

The trial court entered judgment that Wadsworth Properties take nothing from ITT. The trial court filed no findings *822 of fact or conclusions of law. In the absence of findings of fact or conclusions of law, an appellate court should presume the trial court made all necessary findings to support its judgment. Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex.1989); In re Estate of Johnson, 781 S.W.2d 390, 391 (Tex.App.—Houston [1st Dist.] 1989, writ denied).

The trial court’s implied findings may be challenged by “factual sufficiency” points just as jury findings may be. Roberson, 768 S.W.2d at 281. In determining whether the evidence is sufficient to support an implied finding, an appellate court should consider and weigh all evidence before the trier of fact. Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986); Glockzin v. Rhea, 760 S.W.2d 665, 666 (Tex.App.—Houston [1st Dist.] 1988, writ denied). Only if the finding is so against the great weight and preponderance of the evidence as to be manifestly unjust should an appellate court set the finding aside. Cain, 709 S.W.2d at 176; Glockzin, 760 S.W.2d at 666. An appellate court cannot substitute its opinion for that of the trier of fact and determine that it would reach a different conclusion. Glockzin, 760 S.W.2d at 666.

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Bluebook (online)
816 S.W.2d 819, 1991 Tex. App. LEXIS 2344, 1991 WL 185059, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wadsworth-properties-v-itt-employment-and-training-systems-inc-texapp-1991.