Felisa Jessie v. Jerusalem Apartments--Appeal from County Court at Law No 2 of Gregg County

NO. 12-06-00113-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

FELISA JESSIE, APPEAL FROM THE

APPELLANT

V. COUNTY COURT AT LAW NO. 2 OF

JERUSALEM APARTMENTS,

APPELLEE GREGG COUNTY, TEXAS

MEMORANDUM OPINION

Felisa Jessie appeals from an order evicting her from an apartment and ordering the payment of back rent. In two issues, she contends that she was denied due process because her landlord, Jerusalem Apartments, did not comply with the terms of their lease. We reverse and render.

Background

Felisa Jessie is the beneficiary of a federal program that pays her rent. She signed a lease with the Jerusalem Apartments ( Jerusalem ) on September 8, 2004 to lease an apartment from that date until August 31, 2005. The lease stipulated that Jessie would pay no rent, so long as she received the rent subsidy, and that she would abide by certain rules of the establishment.1

On June 13, 2005, Jerusalem delivered notice of intent to terminate the lease effective August 31, 2005. In the notice, Jerusalem alleged that Jessie or her guests had violated the rules of the establishment on several occasions. Jessie did not vacate the premises, but her rent subsidy was ended because Jerusalem considered the lease to have been terminated. On September 2, 2005, a representative of Jerusalem wrote to Jessie informing her that she owed $469.00 pursuant to the lease agreement. Although it is not clear from the letter or the testimony at trial, this appears to be the fair market value of the apartment rental for the month of September.

In October 2005, Jerusalem filed a forcible entry and detainer action in the appropriate justice court alleging the nonpayment of rent. Jerusalem secured a judgment in that court, and the matter was appealed to the county court at law. A trial de novo was held and Jerusalem prevailed. This appeal followed.

Lease Terms

The relevant facts are not in dispute. Jessie agrees that she has paid no rent. The question is whether Jerusalem violated the terms of the lease when it sought to evict Jessie for the nonpayment of rent. Jerusalem s theory is that it properly terminated Jessie s lease, her subsidy ended when the lease did, and she was responsible for the fair market value of the rental. Jessie responds with a two part argument. First, she argues that Jerusalem was contractually bound not to end her rent subsidy except in certain instances. Second, she argues that Jerusalem was obligated to give her notice, alleging specific violations of the lease agreement, before it sought to terminate the lease and to give her the opportunity to defend against the termination of the lease on those grounds in court.

Standard of Review

The only issue in a forcible detainer action is the right to actual possession of the premises. Tex. R. Civ. P. 746; see also Tex. Prop. Code Ann. 24.001 (Vernon Supp. 2006). In reviewing a trial court s findings of fact for legal and factual sufficiency of the evidence, we apply the same standards we apply in reviewing the evidence supporting a jury verdict. See Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). When the appellate record contains a reporter s record, as it does in this case, findings of fact are not conclusive on appeal if a contrary fact is established as a matter of law or if there is no evidence to support the finding. See Material P'ships, Inc. v. Ventura, 102 S.W.3d 252, 257 (Tex. App. Houston [14th Dist.] 2003, pet. denied).

We review the trial court s conclusions of law de novo. See Am. Airlines Employees Fed. Credit Union v. Martin, 29 S.W.3d 86, 91 (Tex. 2000). When performing a de novo review, the reviewing court exercises its own judgment and redetermines each legal issue. Quick v. City of Austin, 7 S.W.3d 109, 116 (Tex. 1998). We will uphold conclusions of law on appeal if the judgment can be sustained on any legal theory supported by the evidence. Waggoner v. Morrow, 932 S.W.2d 627, 631 (Tex. App. Houston [14th Dist.] 1996, no writ). Incorrect conclusions of law do not require reversal if the controlling findings of fact support the judgment under any legal theory. Id.

When construing a lease, we seek to give effect to the intent of the parties as expressed in the lease document. Sun Oil Co. v. Madeley, 626 S.W.2d 726, 727 28 (Tex. 1981). Generally, examination of the written lease will be sufficient to determine the intent of the parties. Id. at 728. Neither party contends that the lease agreement is ambiguous. Therefore, the interpretation of the lease is a question of law. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983).

Analysis

The lease between these parties is a lengthy document designed to comply with standards set by the federal government for housing that is subsidized at taxpayer expense. See generallyNealy v. Southlawn Palms Apts., 196 S.W.3d 386, 389 90 (Tex. App. Houston [1st Dist] 2006, no pet.). The lease required Jerusalem to follow certain steps if it wished to end Jessie s rental subsidy or to terminate the lease.

Jerusalem violated the terms of the lease in two ways. First, Jerusalem had agreed it would provide notice to Jessie if it wished to terminate the lease and further agreed that it would seek to evict her only on the grounds contained in a termination notice. Instead of following the agreement, Jerusalem treated the lease as if it had been terminated on August 31 and then took steps to end Jessie s subsidy.2 Subsequently, it sought to evict her on grounds not contained in the termination notice. Jerusalem did not offer any evidence the Jessie had violated the terms of the lease as described in the termination notice.

Ending Jessie s subsidy was a second violation of the lease. Jerusalem agreed that it would adjust the amount of rent Jessie was required to pay or end the subsidy only if certain eventualities occurred. Specifically, the rent could be adjusted or the subsidy ended if Jessie began to earn income or failed to provide relevant information, or if the amount she was required to pay towards rent and utilities rose to a certain level. Under each scenario, Jerusalem was required to give notice and afford Jessie the right to respond. None of the eventualities detailed in the lease that allowed either the ending of the subsidy or the adjusting of the rent occurred, and Jerusalem never gave Jessie notice of an intent to end her subsidy.3 The grounds for termination for which Jerusalem gave notice would not support a decision to end the subsidy under the terms of the lease.

Nevertheless, Jerusalem argues that because it gave notice to Jessie that it intended to terminate her lease, and because she chose to do nothing [, ] the lease was terminated for material noncompliance [ ] as of August 31, 2005. 4 There are two specific problems with this argument. First, Jerusalem continued to treat Jessie as if she were a lessee after August 31, 2005. In a letter dated September 2, 2005, Jerusalem wrote Jessie that [a]s stated in your lease contract, rent and related charges are due on of before the First day of the month and are considered late on the Sixth day of the month.

But second, and more important, the lease did not require Jessie to do anything when she was given notice of a proposed termination of her lease. The lease gave her the right to meet with Jerusalem. If she wished such a meeting, Jerusalem was required to meet with her and explain to her that she could defend her actions in court. As stated above, Jerusalem agreed that it would only seek eviction on the grounds given in the notice to terminate the lease. Jerusalem treated the lease as terminated because Jessie elected to do nothing, but the lease simply did not permit Jerusalem to do this.

The lease couches the notice to terminate in terms of a proposal. It reads as follows: If Jerusalem proposes to terminate this agreement, Jerusalem agrees to give the Tenant written notice and the grounds for the proposed termination. Of course, a tenant may accept the proposal to terminate the lease or may simply move out. But Jessie did not agree to move out. Under the terms of the lease she was entitled do nothing and to contest the termination of the lease in court on the grounds for which she had been given notice.

Other courts have considered the due process requirements of these kinds of leases. In Moon v. Spring Creek Apts., 11 S.W.3d 427, 436 (Tex. App. Texarkana 2000, no pet.), the Sixth Court of Appeals held that insufficient notice had been given before an eviction from federally subsidized housing. The court held that the failure to follow the notice requirements meant that the landlord had no right to possession. Id. at 436. Similarly, in Newhouse v. Settgast, 717 S.W.2d 131, 134 (Tex. App. Houston [14th Dist] 1986, no writ), the court held that a landlord could not terminate a public housing lease except on the grounds outlined in the lease. See also 911 Glen Oak Apartments v. Wallace, 88 S.W.3d 281, 285 (Tex. App. Corpus Christi 2002, no pet.) (Upholding trial court judgment for tenant where evidence failed to show violation of lease terms.).

In summary, Jerusalem agreed to allow Jessie to reside in an apartment for $0 per month in rent contingent on a subsidy it agreed not to end except under circumstances not present. Furthermore, Jerusalem agreed to seek eviction only on the grounds contained in a formal termination notice. Jerusalem violated this agreement when it sought to evict Jessie on grounds not contained in a formal termination notice.5 Jerusalem could have sought to end the subsidy on the grounds specified in the lease or to evict Jessie on the grounds outlined in the notice of lease termination.6 Jerusalem elected to do neither, and so Jessie retains the right to possess the property. We sustain Jessie s first issue.

Disposition

We reverse the decision of the trial court and render judgment for Jessie.

JAMES T. WORTHEN

Chief Justice

Opinion delivered October 25, 2006.

Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.

(PUBLISH)

1 There are different types of federal housing assistance programs. Under this program, Jerusalem was not only the landlord, but also the local administrator of the subsidy. Jerusalem had the responsibility to collect eligibility information from Jessie and submit that information to the federal government annually. The subsidy was linked to Jessie and to the Jerusalem Apartments in that Jessie could not take the subsidy to another apartment, and Jerusalem could not give it to another tenant.

2 The fact that the lease was scheduled to end on the same day that Jerusalem sought termination is of no moment. The federal rules governing these agreements require that the lease be automatically renewed. See 24 CFR 880.607(b)(iv) (2001). At trial, Jerusalem s representative testified that the lease simply ended of its own accord. That argument is not advanced on appeal.

3 In its brief, Jerusalem states that it did not end Jessie s subsidy, but that she was ineligible to receive a subsidy because her tenancy had been terminated. At trial, Jerusalem s representative testified that the lease expired and that caused the subsidy to end. Whichever is the case, Jerusalem did something to cause the subsidy to end, and there is no evidence that it followed the requirements of the lease before doing so.

4 In another part of the brief, Jerusalem argues that Appellant did not respond to the Notice, and her lease was terminated due to material noncompliance, as allowed by the lease, and in full accordance with HUD regulations.

5 Jerusalem cannot, and does not, argue that the notice of unpaid rent is notice of termination of the lease because 1) it is not notice of termination of the lease, and 2) because Jerusalem argues that there was no lease at all in effect at that time. The lease does allow for termination in the event of nonpayment of rent, but that is in the case where a tenant is obligated to pay some portion of the rent. By the terms of this lease, Jessie was obligated to pay no rent.

6 In a second issue, Jessie contends that the notice of termination provided insufficient information to apprise her of the complaint against her. We do not reach this issue because we have held that Jerusalem violated the agreement by not seeking eviction on the grounds for which Jessie had been given notice. We do note that the notice in this case does not contain the dates of the alleged misconduct, and at least one court of appeals has held that

Footnote Continued.

a termination notice that does not provide the date of alleged events and a specific allegation as to the violation of

the lease is not effective notice. See Moon, 11 S.W.3d at 434.