Today the Fourth Court of Appeals issued a Memorandum Opinion in an ongoing lease termination dispute and related eviction proceedings that have bred numerous suits, appeals and litigations. In its opinion, the San Antonio Court summarized the litigation saga as follows: "Over the past three years, the landlord/tenant dispute between these parties has given rise to two forcible detainer proceedings, one declaratory judgment action, and one still-pending appeal to this court."
The issue decided today related to an appeal by Official Inspection Station, Inc. of a forcible entry & detainer (eviction) suit filed and won by AAA Free Move Ministorage, LLC following earlier forcible entry & detainer and declaratory judgment suits won by OIS, and for which OIS was awarded a money judgment.
The broader dispute relates to OIS' right of possession (and AAA's right of termination) under a written lease entered by and between OIS and the previous owners of the premises bought by AAA in August 2009. When AAA tried to terminate under that lease, OIS filed a declaratory judgment action against AAA in Bexar County District Court, asking the court to construe the rental agreement and declare that AAA did not have the right to terminate the lease on six months’ notice and that OIS was properly in possession of the property.
In March 2010, while the declaratory judgment action was still pending, AAA filed a “Complaint for Eviction” against OIS in the Bexar County justice of the peace court because OIS refused to vacate the property. The court later entered a take-nothing judgment against AAA (essentially denying AAA's demand for possession). AAA appealed to county court at law, and following a trial de novo, the county court rendered a take-nothing judgment against AAA, awarding OIS attorney’s fees and costs in the amount of $13,362.12.
With its favorable county court judgment in hand, OIS stopped making payments, and instead, “credited” AAA on OIS’s books with the judgment AAA owed to OIS against the amount of the rent OIS owed AAA. Thereafter, AAA filed a second eviction suit, which it won at the JP court and on de novo appeal to the Bexar County Court at law. OIS appealed to the 4th Court, arguing that its non-payment of rent was excused by the Judgment owed to it by AAA. The Court of Appeals disagreed, and ruled, inter alia, that the lower court's finding that OIS was in default under the lease because it did not continue paying rent, and instead, unilaterally applied its offset.
Notably, the Opinion issued today is not the final word. An appeal of the declaratory judgment action is apparently also pending with the Fourth Court of Appeals.
