Coinmach Corp. F/K/A Solon Automated Services, Inc. v. Aspenwood Apartment Corp.

Summary

The Supreme Court of Texas considered the legal consequences of a commercial tenant’s continued possession after foreclosure terminated its subordinate lease. The Court held that the tenant became a tenant at sufferance, could not be liable for breach of the terminated lease, but could be liable in tort, including for tortious interference with prospective business relations. The Court also held that the property owner was not a consumer under the DTPA and could not recover attorney’s fees under the UDJA.

Holdings

1. A valid foreclosure of an interest in property generally terminates a lease subordinate to the mortgage or deed of trust being foreclosed. The 1994 foreclosure terminated Coinmach's lease.
2. A holdover tenant becomes a tenant at sufferance when the tenant remains after expiration or termination of the lease without the landlord's consent. Aspenwood's notices, eviction actions, and refusal to accept rent demonstrated lack of consent, so Coinmach was a tenant at sufferance.
3. A tenant at sufferance cannot be liable for breach of the previously terminated lease when the lease contains no applicable holdover provision and the parties formed no new express or implied agreement.
4. A tenant at sufferance has no legal title or right to possession and remains a trespasser, notwithstanding the procedural protections and notice periods governing forcible-entry-and-detainer proceedings. The tenant may therefore be liable for trespass, trespass to try title, and other torts, with the extent of damages depending on the nature of the trespass and resulting harm.
5. A tenant's continued trespass may constitute the independently tortious or unlawful act required for a claim of tortious interference with prospective business relations. The plaintiff must also prove interference with a reasonably probable contract, and the court remanded for consideration of the evidentiary and limitations issues under that standard.
6. A landlord is not a consumer under the DTPA when it merely leases premises to a tenant that provides goods or services to the landlord's customers or tenants and the landlord receives only indirect benefits from those services.
7. When a dispute concerns possessory interests in real property and is governed substantively by the trespass-to-try-title statute, the plaintiff may not proceed alternatively under the UDJA to obtain attorney's fees. Aspenwood could not recover under the UDJA, and judgment was rendered for Coinmach on that claim.

Questions Presented

1. Whether foreclosure terminated Coinmach's subordinate lease.
2. Whether a holdover tenant whose lease has terminated and whose continued possession lacks the owner's consent is a tenant at sufferance.
3. Whether a tenant at sufferance can be liable for breach of the terminated lease.
4. Whether a tenant at sufferance is a trespasser and may be liable for trespass, trespass to try title, and other torts.
5. Whether Coinmach's continued possession could constitute an independently tortious act supporting tortious interference with prospective business relations, and whether limitations barred that claim.
6. Whether Aspenwood was a consumer under the Texas Deceptive Trade Practices-Consumer Protection Act.
7. Whether Aspenwood could use the Texas Uniform Declaratory Judgments Act to determine possessory interests in real property and recover attorney's fees.

Disposition

other