      TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN


                                       NO. 03-11-00655-CV



                             A-TX Property Management, Appellant

                                                  v.

                       Jesus Rodriguez and Sandra Rodriguez, Appellees


            FROM THE COUNTY COURT AT LAW NO. 1 OF TRAVIS COUNTY,
       NO. C-1-CV-11-005496, HONORABLE J. DAVID PHILLIPS, JUDGE PRESIDING



                             MEMORANDUM OPINION


                A-TX Property Management appeals the county court’s judgment in favor of

Jesus Rodriguez and Sandra Rodriguez,1 acting pro se, that A-TX withheld a security deposit in bad

faith in violation of section 92.109 of the Texas Property Code. See Tex. Prop. Code § 92.109(a)

(landlord who in bad faith retains security deposit liable for amount equal to sum of $100, three

times amount wrongfully withheld, and tenant’s attorney’s fees). A-TX challenges the legal and

factual sufficiency of the evidence and the amount of damages awarded. For the reasons that follow,

we affirm the county court’s judgment conditioned on remittitur.




       1
           We refer to the Rodriguezes individually by their first names for clarity.
                     FACTUAL AND PROCEDURAL BACKGROUND

               In January 2009, the Rodriguezes leased a home from Shamrock Property

Management and paid a security deposit in the amount of $1,200. The written lease agreement

contained a provision titled “Move-In Condition” requiring the tenant to complete an “Inventory and

Condition Form” (Move-In Report) within five days after the commencement date of the lease. The

lease further provided that if the tenant failed to timely deliver a Move-In Report assessing the

condition of the premises, the property would be deemed to be free of damages. The lease had an

original expiration date of January 31, 2010. On February 1, 2010, the Rodriguezes and Shamrock

entered into a lease extension, changing the expiration date to June 30, 2010. At some point,

Shamrock transferred management responsibility to another company, which subsequently

transferred management to A-TX. In August 2010, the Rodriguezes moved out, and a dispute arose

regarding the refund of the security deposit. A-TX provided an itemized list of charges made against

the security deposit and refunded the balance of $54.92. The Rodriguezes contended that A-TX

wrongfully withheld the security deposit.

               The Rodriguezes filed a claim in small claims court, and a default judgment was

rendered in their favor in the amount of $2,770. After the small claims court denied A-TX’s motion

for new trial, A-TX appealed to the county court. In a do novo bench trial, the county court heard

the testimony of the Rodriguezes, A-TX’s office manager, and two A-TX employees who conducted

property inspections of the Rodriguezes’ home. The parties also offered exhibits including

photographs, inspection reports, A-TX’s itemized list of charges, invoices for repairs, a letter from

Shamrock regarding the condition of the house, and the lease. The itemized list included charges



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for replaced blinds, paint, drywall, doorstops, outlet covers, replaced sheetrock, painting of the whole

house, trimming of bushes, ant care, replaced smoke detectors and light bulbs, pest control for

roaches, and two $100 charges for holdover rent.

                Sandra testified generally regarding the condition of the home when she and Jesus

moved in and when they moved out. She offered into evidence a letter from Shamrock dated

May 2011 stating that when a Shamrock representative took the Rodriguezes to see the house, they

discovered that it had been vandalized and “the window had been broken[, . . .] there were holes

punched in the walls and other damage.” Sandra further testified that there were roaches in the home

when they moved in and they battled them the entire time they lived there. She offered two

photographs of a shrub near the front door—one taken when they moved out and the second one

taken one month later—and stated that the shrub looked the same one month later as when they

moved out and did not appear to have been trimmed. She stated that there was damaged sheetrock

caused by a leak behind the washer in a pipe for which Shamrock was responsible and Shamrock had

pulled the sheetrock out and provided a metal vent to cover the hole. Sandra also stated she had

removed a smoke detector and did not contest that charge. She testified that there were broken

blinds, so they purchased new blinds and left them in the house but did not hang them. She further

testified that she had the carpet professionally cleaned when they moved out but that some red stains

from her daughter’s spilled Kool-Aid remained and she did not dispute that additional cleaning was

needed. She also testified that she received a refund check from A-TX in the amount of $54 but did

not cash it and received a subsequent accounting indicating that the Rodriguezes owed A-TX money.




                                                   3
               On cross-examination, Sandra testified that she and Jesus had completed a Move-In

Report and provided it to Shamrock in compliance with the lease but did not retain a copy. She also

testified that one plank in the fence had been blown down by the wind. She stated that despite a

letter from A-TX indicating that the two charges for holding over two months after the expiration

of the lease were refunded, she did not receive a refund of those amounts.

               Jesus testified that during the inspection A-TX performed before he and Sandra

moved out, he informed Sean Smith, one of the inspectors, that they had asked Shamrock to repair

the fence because the wind repeatedly blew a board down, but Shamrock did not repair it. He also

testified that Shamrock had provided a letter stating that the house had not been painted since 2006,

but he did not offer the letter into evidence. Although Jesus did not testify regarding the vandalism,

A-TX offered a letter he wrote to them stating that there was writing on the walls and eggs had been

thrown on the walls.

               Sean Smith testified concerning the inspection he conducted prior to the Rodriguezes’

moving out. He stated that the carpet was in “bad shape” and had red, yellow, and black stains and

the walls were “very bad” and had spots “like when you rub the walls with your hands.” He testified

that Jesus informed him “it was from eggs, but, I mean, from what proof.” He stated that he had not

been in the house prior to conducting the inspection. Smith also testified that there was bird feces

on the carpet and wall next to the bird cage. A-TX offered Smith’s inspection report that indicated,

and Smith testified, that he had rated the carpet as “fair” and the walls as “fair” and “poor.” The

report also reflected Smith’s comment that the carpet had “minor spots” and the fence needed to

be repaired.



                                                  4
               Harold Croson testified regarding the final inspection that he conducted after the

Rodriguezes moved out. He stated that the carpet and walls were in poor condition, there was “a

little dirt around,” and live insects. He also stated that the condition of the walls was “more than

normal wear and tear” but observed that the upstairs was “not as bad.” Croson also testified that

there were “about three blinds [that] needed to be replaced” and there were new blinds in packages

but not hung and he was not sure they were the right size. He testified that Jesus “had the

neighborhood child come over while [he] was there and cut the yard” even though he had given up

possession of the property at that time. A-TX offered Croson’s inspection report, which generally

reflected the comments in his testimony, including that the carpet needed stains removed.

               Jessica Bullock testified that she was office manager and vice-president of A-TX.

She stated that she had unsuccessfully attempted to locate the Move-In Report from Shamrock. She

explained that Shamrock informed her that it had transferred all of its records to the subsequent

property manager, who then informed her that it had transferred all of the records to A-TX. Bullock

testified that the lease required her to go by the Move-In Report and that without it the Rodriguezes

had offered no proof of the condition at the time they moved in. She further testified that the cost

to “paint the entire house and fix everything” was $1,200 and she divided that between the owner

and the tenants. The county court questioned Bullock concerning an invoice A-TX offered into

evidence that stated: “Repainted rooms due to extensive marks, damages. Replaced sheetrock,

replaced door stops, repainted baseboards from extensive nicks and damages” for a total charge of

$600. Bullock stated it was not her understanding that the cost was only $600 and added that some




                                                 5
follow-up work had to be done but did not refer to another invoice. Bullock also testified that A-TX

did a lot of work that was not charged to the Rodriguezes because it was normal wear and tear.

               Following testimony, the county court found that A-TX was entitled to deduct for the

labor of installing the blinds and for replacing the smoke detector, doorstops, and outlet covers for

a total of $80.96 and that the remaining $1,119.04 should have been refunded. The county court

further found that A-TX had failed to prove that the Rodriguezes caused the remainder of the

damages charged against them and concluded that A-TX’s withholding of the security deposit

without any evidence that the Rodriguezes caused the damages was bad faith. The county court

awarded $100 and three times the amount wrongfully withheld, for a total of $3,457.12. See id. This

appeal followed.



                                           DISCUSSION

Applicable Law

               The return of security deposits in connection with residential tenancies is governed

by subchapter C of Chapter 92 of the Property Code. See id. §§ 92.101–.109. Under subchapter C,

a landlord is required to refund a security deposit to a tenant within 30 days after the tenant

surrenders the property, id. § 92.103(a), and may deduct only those “damages and charges for which

the tenant is legally liable,” id. §92.104(a). If a landlord violates this provision in bad faith, the

statute provides a remedy of three times the amount wrongfully withheld, $100, and attorney’s fees.

Id. § 92.109(a).2 “A landlord acts in bad faith when he retains the security deposit in dishonest


       2
        The county court did not award attorney’s fees, and the Rodriguezes do not raise that issue
on appeal.

                                                  6
disregard of the tenant’s rights.” Pulley v. Milberger, 198 S.W.3d 418, 428 (Tex. App.—Dallas,

2006, pet. denied) (citing Reed v. Ford, 760 S.W.2d 26, 30 (Tex. App.—Dallas 1988, no writ)). Bad

faith implies an intent to deprive the tenant of a refund that is lawfully due. Shamoun v. Shough,

377 S.W.3d 63, 72 (Tex. App.—Dallas 2012, pet. denied); Pulley, 198 S.W.3d at 428; Hardy

v. 11702 Memorial, Ltd., 176 S.W.3d 266, 271 (Tex. App.—Houston [1st Dist.] 2004, pet. dism’d).

It is the landlord’s burden to prove that the retention of the security deposit was reasonable. Tex.

Prop. Code § 92.109(c).


Standard of Review

                A-TX challenges the legal and factual sufficiency of the evidence to support the

county court’s judgment. In reviewing the legal sufficiency of the evidence, we view the evidence

in the light most favorable to the judgment, crediting favorable evidence if a reasonable fact finder

could and disregarding contrary evidence unless a reasonable fact finder could not. City of Keller

v. Wilson, 168 S.W.3d 802, 807 (Tex. 2005). A legal sufficiency challenge may be sustained when

the record discloses one of the following situations: (i) a complete absence of evidence of a vital

fact; (ii) the court is barred by rules of law or of evidence from giving weight to the only evidence

offered to prove a vital fact; (iii) the evidence offered to prove a vital fact is no more than a mere

scintilla; or (iv) the evidence establishes conclusively the opposite of the vital fact. Id. at 810. The

test is “whether the evidence at trial would enable reasonable and fair-minded people to reach the

[judgment] under review.” Id. at 827. In reviewing factual sufficiency of the evidence, we consider

and weigh all of the evidence in the record, and we may overturn a judgment only if it is so against




                                                   7
the great weight and preponderance of the evidence as to be clearly wrong and manifestly unjust.

Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986).

               In a bench trial, the trial judge passes on the witnesses’ credibility and the weight to

be given their testimony and can accept or reject any witness’s testimony in whole or in part.

Bocquet v. Herring, 972 S.W.2d 19, 22 (Tex. 1998). The trial court may believe one witness,

disbelieve others, and resolve inconsistencies in any witness’s testimony. McGalliard v. Kuhlmann,

722 S.W.2d 694, 697 (Tex. 1986) (Baker, J. dissenting) (citing Texas W. Oil & Gas Corp. v. El Paso

Gas Trans. Co., 631 S.W.2d 521, 524 (Tex. App.—El Paso 1982, writ ref’d n.r.e.); Seasha Pools,

Inc. v. Hardister, 391 S.W.3d 635, 639 (Tex. App.—Austin 2012, no pet.). We may not substitute

our judgment for that of the trier of fact merely because we reach a different conclusion. Herbert

v. Herbert, 754 S.W.2d 141, 144 (Tex. 1988); Westech Eng’g, Inc. v. Clearwater Constructors, Inc.,

835 S.W.2d 190, 196 (Tex. App.—Austin 1992, no writ).


Legal Sufficiency of the Evidence

               In its first issue, A-TX contends that the evidence was legally insufficient to support

the county court’s judgment. A-TX argues that the contractual obligation of the Rodriguezes to

provide a Move-In Report is necessary contextual evidence that we are required to consider under

City of Keller, even though it is not favorable to the county court’s judgment. See 168 S.W.3d at 811

(review of contrary contextual evidence may be necessary to discern lack of supporting evidence).

In light of the lease obligation to provide the Move-In Report, A-TX contends, the Rodriguezes’

claim that A-TX withheld their deposit is no evidence of the unreasonableness of the charges or that




                                                  8
such charges were made in bad faith. A-TX also cites Sandra’s admission that she was responsible

for certain damages.

               Initially, we observe that in City of Keller, the supreme court clarified that we are to

disregard contrary evidence only when a reasonable factfinder could do so. See id. In any event, we

do not construe the contractual obligation to report prior damages in a Move-In Report as evidence

contrary to the county court’s judgment. Sandra testified that she and Jesus completed the Move-In

Report and provided it to Shamrock. In addition, Sandra and Jesus offered testimony and evidence

regarding the damages to the home prior to move-in and the charges A-TX made against the deposit.

Smith testified that Jesus informed him that there was damage to the walls from eggs. Shamrock’s

letter describing vandalism at the home when it was shown to the Rodriguezes supports the

Rodriguezes’ testimony.

               Further, in arguing that the Rodriguezes failed to prove that the charges were

unreasonable, A-TX inverts the burden of proof with regard to the reasonableness of charges

assessed by A-TX. Under section 92.109(c), A-TX had the burden to prove that the charges

underlying its retention of the security deposit were reasonable. See Tex. Prop. Code § 92.109(c);

see also Hardy, 176 S.W.3d at 273 (question under section 92.109(a) is whether landlord proved

each charge was made in good faith). The only evidence A-TX cites to support the reasonableness

of the charges against the deposit was the lease provision requiring a Move-In Report. A-TX

contends that in the absence of such a report, A-TX was entitled under the lease to presume there

was no damage to the property when the Rodriguezes moved in. However, A-TX offered no

evidence to establish the condition of the home when the Rodriguezes moved in or that the



                                                  9
Rodriguezes caused the damage, evidence necessary to meet its burden of proving the reasonableness

of charging the Rodriguezes for repair work. See Tex. Prop. Code § 92.109(c); Hardy, 176 S.W.3d

at 273; Shamoun, 377 S.W.3d at 74. Nor did it offer any evidence to contradict Sandra’s testimony

that she and Jesus provided the Move-In Report, the Rodriguezes’ testimony regarding the

pre-move-in vandalism and other causes of damage, or the Shamrock letter supporting their

testimony. The county court, acting as factfinder, was the sole judge of the credibility of the

witnesses and the weight to be given to their testimony and could have reasonably believed the

Rodriguezes’ testimony, especially in light of the Shamrock letter. McGalliard, 722 S.W.2d at 696;

Seasha Pools, 391 S.W.3d at 639.

               Viewing the evidence in the light most favorable to the county court’s judgment, we

conclude that there was legally sufficient evidence to support the county court’s determination that

the charges A-TX assessed against the Rodriguezes3 were unreasonable—with one exception. See

City of Keller, 168 S.W.3d at 807; Miro v. Garner, 52 S.W.3d 407, 411 (Tex. App.—Corpus Christi

2001, pet. denied) (evidence legally sufficient to support finding that landlord wrongfully retained

deposit where there was no evidence extensive damage was fault of tenant); cf. Pulley, 198 S.W.3d

at 422, 432 (evidence of no damage prior to move-in and installation of new carpet several months

prior to move-in sufficient to support finding of reasonableness of charges). Contrary to her

testimony regarding the other charges, Sandra testified that her daughter had caused the




       3
         The Rodriguezes do not complain on appeal of the county court’s determination that the
charges for installing the blinds and replacing the smoke detector, doorstops, and outlet covers were
reasonable, and we reach no conclusion as to the evidence to support that determination. See Tex.
R. App. P. 47.1.

                                                 10
hard-to-remove red stains, and she did not dispute the charge for carpet cleaning. We therefore

conclude that the evidence conclusively establishes that the Rodriguezes caused the stains and was

legally insufficient to support the county court’s determination that the $107.71 charge for carpet

cleaning was unreasonable. See City of Keller, 168 S.W.3d at 807.

               We further conclude—with the same exception for the carpet cleaning charge— that

the evidence was legally sufficient to support the county court’s determination that A-TX wrongfully

withheld the security deposit. Moreover, the lack of evidence of the condition of the home at

move-in or proof that the Rodriguezes caused the damages was sufficient to support the county

court’s finding of bad faith. See Tex. Prop. Code § 92.109(d) (presumption of bad faith); City of

Keller, 168 S.W.3d at 807; Miro, 52 S.W.3d at 410–11 (evidence legally sufficient to support finding

of bad faith where no evidence damages caused by tenant); see also Hardy, 176 S.W.3d at 275 (bad

faith found where no more than scintilla of evidence landlord was entitled to deductions from

security deposit). A-TX, a professional management company, relied solely on the absence of

documentation from its own twice-transferred records, attempted to place the burden on the

Rodriguezes to prove that they had not caused the damages, and then disregarded the statements of

the Rodriguezes and Shamrock regarding the Move-In Report and vandalism to the home. A-TX

thus failed to establish that the home was not damaged prior to the Rodriguezes’ moving in, that it

had reason to believe the Rodriguezes caused the damage, and that it was entitled to retain the

deposit. Cf. Pulley, 198 S.W.3d at 431 (no bad faith where evidence showed amateur landlord

believed he was entitled to retain portion of deposit for extensive damages caused by tenant);

Leskinen v. Burford, 892 S.W.2d 135, 138 (Tex. App.—Houston [14th Dist.] 1994, no writ) (no bad



                                                11
faith where evidence showed amateur landlord believed he was entitled to retain portion of deposit

for damages he believed tenant caused and made many repairs himself to save money). We sustain

A-TX’s first issue as to the charge for carpet cleaning and overrule it as to the remainder of

the charges.


Factual Sufficiency of the Evidence

               In its second issue, A-TX argues that the evidence was factually insufficient to

support the county court’s judgment. As evidence of the reasonableness of the charges, A-TX cites

to the testimony of Smith, Croson, and Bullock regarding the damage to the home, repairs that were

done, photographs admitted as exhibits, and the lease. Again, A-TX inverts the burden of proof and

argues that the Rodriguezes produced no evidence that the charges were unreasonable. See Tex.

Prop. Code § 92.109(c). A-TX further contends that “the only relevant piece of evidence” the

Rodriguezes offered was the Shamrock letter, which is “irrelevant” in light of the lease provision

requiring the Move-In Report. Finally, A-TX argues that its failure to establish the condition of the

home prior to move-in is irrelevant because of the Rodriguezes’ obligation to report conditions in

the Move-In Report.

               Having concluded that the evidence was legally insufficient to support the county

court’s finding as to the charge for carpet cleaning, we also conclude that the evidence was factually

insufficient. See Cain, 709 S.W.2d at 176. As to the county court’s determination regarding the

remainder of the damages, we disagree with A-TX’s assertion that the lease provision regarding the

Move-In Report renders irrelevant its statutory burden under section 92.109(c) to prove the

reasonableness of the charges. See Tex. Prop. Code § 92.109(c); Pulley, 198 S.W.3d at 426.

                                                 12
Assuming without deciding that A-TX could have reasonably charged the Rodriguezes for all of the

repairs had the Rodriguezes failed to complete a Move-In Report, A-TX did not establish that they

failed to submit the report. Rather, the uncontroverted testimony was that they did submit the report,

and A-TX offered no evidence to rebut that testimony. Nor did it establish the condition of the home

at move-in or that the Rodriguezes caused the damages. Considering the entire record, we hold that,

except as to the charge for carpet cleaning, the evidence was factually sufficient to support the county

court’s determination that the charges A-TX assessed against the Rodriguezes were unreasonable

and that A-TX wrongfully withheld the security deposit. We further hold that the lack of evidence

of the condition of the home at move-in or proof that the Rodriguezes caused the damages was

factually sufficient to support the county court’s finding of bad faith. See Tex. Prop. Code

§ 92.109(d); Cain, 709 S.W.2d at 176; Hardy, 176 S.W.3d at 275 (bad faith established where

evidence did not support charges deducted from security deposit); Miro, 52 S.W.3d at 410–11

(evidence factually sufficient to support finding of bad faith where no evidence damages caused by

tenant). We sustain A-TX’s second issue as to the charge for carpet cleaning and overrule it as to

the remainder of the charges.


Amount of Damages

               In its third issue, A-TX argues that the damage award was excessive and seeks

remittitur on three grounds. First, A-TX argues that the county court erred in including the $54.92

A-TX refunded in its calculation of treble damages and seeks remittitur in the amount of $164.76.

A-TX also contends that because the evidence was factually insufficient to support the county court’s

determination that the $107.17 charge for carpet cleaning was unreasonable, the county court erred

                                                  13
in including that amount in calculating treble damages and seeks remittitur in the amount of $321.15

based on that charge. Finally, A-TX argues that there was no evidence to support the statutory award

of triple damages as to any of the charges because there was no evidence of bad faith.

               We analyze a complaint of excessive damages using the same standard of

review applicable to other factual sufficiency challenges. Maritime Overseas Corp. v. Ellis,

971 S.W.2d 402, 406 (Tex. 1998); Memon v. Shaikh, 401 S.W.3d 407, 417, (Tex. App.—Houston

[14th Dist.] 2013, no pet.). A court of appeals may exercise its power to suggest a remittitur when

an appellant complains that there is insufficient evidence to support an award and the court

of appeals agrees but finds that there is sufficient evidence to support a lesser award. Tex. R.

App. P. 46.3; Akin, Gump, Strauss, Hauer & Feld, L.L.P. v. National Dev. & Research Corp.,

299 S.W.3d 106, 123–24 (Tex. 2009); Bechtel Corp. v. CITGO Prods. Pipeline Co., 271 S.W.3d

898, 922 (Tex. App.—Austin 2008, no pet.).

               In this case, the evidence is factually sufficient to support an award including the

amount purportedly refunded. Sandra’s uncontroverted testimony was that she received the refund

check but did not cash it and later received an accounting indicating that the Rodriguezes owed

A-TX money. We overrule A-TX’s third issue as to the alleged refund amount. Further, as we have

already determined, the evidence is also factually sufficient to support a finding of bad faith, which

in turn supports an award of treble damages. See Tex. Prop. Code § 92.109(a). However, for the

reasons discussed above, we agree with A-TX that the evidence is factually insufficient to support

the county court’s finding that the charge for carpet cleaning was unreasonable. Consequently, the

evidence is factually insufficient to support the county court’s finding of bad faith as to that charge



                                                  14
or its inclusion of that charge in the calculation of treble damages. See id. (landlord who retains

security deposit in bad faith liable for $100 plus “three times the portion of the deposit wrongfully

withheld”) (emphasis added). We therefore sustain A-TX’s third issue as to the portion of the treble

damages awarded that was based on the $107.17 charge for carpet cleaning and overrule it as to the

remainder of the damage award.


                                         CONCLUSION

               We affirm the county court’s judgment conditioned on the Rodriguezes’ filing a

remittitur in the county court within thirty days of the date of this opinion, reducing the award of

damages by an amount equal to three times the charge for carpet cleaning, or $321.51, and notifying

this Court of the filing. See Tex. R. App. P. 46.3; Swinnea v. ERI Consulting Eng’rs, Inc.,

364 S.W.3d 421, 422 (Tex. App.—Tyler 2012, pet. denied) (suggesting remittitur of award for lost

profits where evidence was factually insufficient to support award); Springs Window Fashions Div.,

Inc. v. Blind Maker, Inc., 184 S.W.3d 840, 889–90 (Tex. App.—Austin 2006, pet. granted, judgm’t

vacated w.r.m.) (suggesting remittitur of difference between jury’s award and highest amount of

damages supported by evidence). If the remittitur is filed within thirty days of the date of this

opinion, we will reform the county court’s judgment and affirm as reformed. Otherwise, we will

reverse the county court’s judgment and remand this cause for redetermination of treble damages.

See Tex. R. App. P. 46.3.




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                                           __________________________________________

                                           Melissa Goodwin, Justice

Before Chief Justice Jones, Justices Rose and Goodwin

Affirmed Conditioned on Remittitur

Filed: October 17, 2013




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