With its November 22, 2013 orders list, the Texas Supreme Court issued opinions in three cases and chose seven more for oral argument in January.

This post describes the opinions; the grants are summarized in a separate post.

Opinions

For what torts can a tenant who overstays a lease be sued by the landlord?

In an important case for landlord-tenant law, the Court clarified when a tenant who overstays a lease can be sued by the landlord in tort.

The lease here was a commercial one, with a laundry-services company leasing space in a commercial development. But as noted by Justice Guzman in her concurring opinion, the broader holding is also applicable to residential tenants.

Although the status was disputed through years of litigation, it was ultimately conceded that the contractual lease had been terminated when the landlord’s interest in the property was sold through foreclosure. The new owner demanded the tenant leave the premises, after which the tenant became a “tenant at sufferance.”

The majority opinion, written by Justice Boyd, held:

  • “[A] tenant at sufferance cannot be liable for breach of the previously-terminated lease agreement.” Once the lease is over, tort duties apply.

  • “[A] tenant at sufferance is a trespasser and can be liable in tort (although the extent of liability depends on the nature of the trespass), including, in this case, tortious interference with prospective business relations,” most commonly meaning the lost rental income from the property.

Justice Guzman wrote separately (joined by Justice Devine and Justice Brown) to discuss how this “‘tortification’ of landlord-tenant law” will affect residential tenants, rather than more sophisticated commercial tenants:

tenants will now potentially be required to defend against actions for trespass and tortious interference. Importantly, in facing a tortious interference claim, tenants are exposed not only to damages traditionally recognized under landlord-tenant law — that is, rent or lost profits and property damage — but also to heightened emotional distress or exemplary damages.

Relying on an observation made in an amicus brief by the Texas Housing Justice League, the concurrence noted that most residential tenants, unlike commercial tenants, will not have access to counsel for advice.

I write separately to emphasize that in a claim for tortious interference, which may seek more than actual damages, the landlord must satisfy a greater burden of proof: it must prove the tenant at sufferance specifically intended to interfere with the landlord’s relationship or contract with the prospective lessee. If a valid court order obtained in good faith grants a tenant at sufferance the right to possess property, the order will generally demonstrate the tenant’s lack of the heightened intent necessary to support a claim for more than actual damages.

This concurrence garnered three votes. Although the six Justices in the majority “do no not necessarily disagree with [the concurrence’s] thoughts,” they did not reach that issue because it was not raised by the parties here. So, although the concurrence makes a strong prediction about the future direction of Texas law, it is not (just yet) controlling law.

In holdings that might matter to those litigating other issues:

  • The Court held that the landlord here was not a “consumer” under the DTPA because it benefitted only indirectly from the laundry services here (which went to the landlord’s other tenants, not to the landlord itself).

  • The Court held that the UDJA was not available to support an award of attorneys fees for what was essentially a dispute about possession of property, akin to a suit over title.

Sovereign immunity arguments can expand during the appeal

The court of appeals had refused to consider certain sovereign immunity arguments, reasoning that they had not been presented to the trial court. Applying its 2012 decision in RUSK STATE HOSPITAL v. DENNIS BLACK AND PAM BLACK, INDIVIDUALLY AND AS REPRESENTATIVES OF THE ESTATE OF TRAVIS BONHAM BLACK, DECEASED, No. 10-0548 , the Texas Supreme Court reversed and remanded for the court of appeals to address those arguments.

Within that discussion, the Court held that a whiteboard that fell on a patient did not fit into the “use” exception within the Tort Claims Act. On remand, the court of appeals can determine whether the injury here resulted from a “condition” of property or a premises liability theory.

Exhaustion of remedies required to enforce (old) settlement agreement

The Court was asked to determine whether the version of Texas’s workers compensation law in effect in 1988 required this firefighter to exhaust administrative remedies before he could sue to enforce a previous settlement (about which the City had changed its mind and stopped paying).

The Court held that the former statute required exhaustion of administrative remedies and, thus, that the courts did not (yet) have power to hear the claim.