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Rohrmoos Venture v. UTSW DVA Healthcare, LLP

Supreme Court of Texas

October 31, 2018, Argued; April 26, 2019, Opinion Delivered

NO. 16-0006

Opinion

 [*475]  Justice Green delivered the opinion of the Court.

In this case, we must decide whether a tenant can terminate a commercial lease contract for the landlord's prior material breach. We hold that ] under Davidow v. Inwood North Professional Group—Phase I, 747 S.W.2d 373 (Tex. 1988), termination is a justified remedy when the landlord breaches the commercial lease. We also must consider whether the evidence offered to prove attorney's fees is sufficient under our precedent for fee-shifting awards. We hold that it is not. ] When a fee claimant seeks to recover attorney's fees from an opposing party, it must put on evidence of reasonable hours worked multiplied by a reasonable hourly rate, yielding a base figure that can be adjusted by considerations [**2]  not already accounted for in either the hours worked or the rate. Because the record does not contain this evidence, we affirm the court of appeals' judgment in part, reverse as to the award of attorney's fees, and remand the case to the trial court for further proceedings.

I. Background

Landlord Rohrmoos Venture executed a commercial lease with tenant UT Southwestern DVA Healthcare, LLP (UTSW), for a commercial building in Dallas, Texas.1 UTSW used the commercial building for a dialysis clinic. At some point UTSW began experiencing water penetration in the building's concrete foundation and installed ceramic floor tiles because of the moisture problems.

Around September 2007, state health inspectors evaluated UTSW's dialysis clinic and criticized the facility because some ceramic floor tiles had come loose from the concrete slab and moisture could be seen under the tiles. UTSW notified Rohrmoos of the inspection results and over the following months, the two exchanged extensive communication in an attempt to diagnose and fix the issue. Neither party accepted responsibility. Multiple engineers and contractors were called in, but the issue persisted into 2009 and then began  [*476]  to worsen as [**3]  the building apparently suffered significant water penetration.

Because UTSW viewed the commercial building as unsuitable for its intended commercial purpose, UTSW terminated its lease early, vacated the premises, and relocated to Irving, Texas, while still allegedly owing approximately $250,000 in unpaid rent. UTSW then sued Rohrmoos and the joint-venturers behind it for breach of contract and breach of the implied warranty of suitability. UTSW also sought declaratory judgment that: (1) a casualty occurred in accordance with the lease, (2) Rohrmoos failed to remedy the casualty, and (3) UTSW had the right to terminate the lease. Rohrmoos answered with several affirmative defenses, including waiver and prior material breach. Rohrmoos also counterclaimed for negligence and breach of contract. UTSW asserted its own affirmative defenses to Rohrmoos's counterclaims.

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578 S.W.3d 469 *; 2019 Tex. LEXIS 389 **; 62 Tex. Sup. J. 808; 2019 WL 1873428

ROHRMOOS VENTURE, ERIC LANGFORD, DAN BASSO, AND TOBIN GROVE, PETITIONERS, v. UTSW DVA HEALTHCARE, LLP, RESPONDENT

Prior History:  [**1] ON PETITION FOR REVIEW FROM THE COURT OF APPEALS FOR THE FIFTH DISTRICT OF TEXAS.

Venture v. UTSW DVA Healthcare, LLP, 559 S.W.3d 155, 2015 Tex. App. LEXIS 10297 (Tex. App. Dallas, Oct. 5, 2015)

CORE TERMS

attorney's fees, lease, lodestar, prevailing party, factors, court of appeals, calculation, terminate, lodestar method, trial court, suitability, landlord, commercial lease, implied warranty, fee-shifting, breached, tenant, fee award, prevailing, material breach, spent, reasonable attorney's fees, courts, damages, billing, reasonable hourly rate, awards, fact finder, repair, lodestar figure

Real Property Law, Landlord & Tenant, Lease Agreements, Commercial Leases, Breach, Material Breach, Civil Procedure, Costs & Attorney Fees, Attorney Fees & Expenses, Reasonable Fees, Appeals, Reviewability of Lower Court Decisions, Preservation for Review, Tenant's Remedies & Rights, Warranty of Habitability, Remedies, Rent Withholding, Basis of Recovery, American Rule, Basis of Recovery, Business & Corporate Compliance, Contracts Law, Breach of Contract Actions, Statutory Awards, Contract Conditions & Provisions, Contract Conditions & Provisions