                                                                                         ACCEPTED
                                                                                     04-15-00273-CV
                                                                         FOURTH COURT OF APPEALS
                                                                              SAN ANTONIO, TEXAS
                                                                               9/22/2015 12:03:52 AM
                                                                                      KEITH HOTTLE
                                                                                              CLERK

                               NO. 04-15-00273-CV

                                                                     FILED IN
                               IN THE                         4th COURT OF APPEALS
                       FOURTH COURT OF APPEALS                 SAN ANTONIO, TEXAS
                         SAN ANTONIO, TEXAS                  09/22/2015 12:03:52 AM
                                                                KEITH E. HOTTLE
                                                                      Clerk

                BUDDY CASTEEL AND JARET B. CASTEEL,
                                                                      Appellants
                                       v.

                               AMELIA STAYTON
                                                                        Appellee


                      BRIEF OF APPELLANTS
               BUDDY CASTEEL AND JARET B. CASTEEL



CHRISTOPHER J. DEEVES                       KENNETH E. GRUBBS
State Bar No. 00790575                      State Bar No. 00798225

THE LAW OFFICE OF                           THE LAW OFFICE OF
CHRISTOPHER DEEVES, P.C.                    KENNETH GRUBBS
1370 Pantheon Way, Suite 110                4241 Woodcock Drive, Suite C-120
San Antonio, Texas 78232                    San Antonio, Texas 78228

(210) 445-8807 (Telephone)                  (210) 490-1292 (Telephone)
(210) 501-0915 (Facsimile)                  (210) 499-4587 (Facsimile)
chrisdeeves@att.net (e-mail)                kengrubbs@sbcglobal.net (e-mail)

                        ATTORNEYS FOR
                          APPELLANTS
               BUDDY CASTEEL AND JARET B. CASTEEL
                    IDENTITY OF PARTIES AND COUNSEL
      The following is a list of all parties, and the names and addresses of those
parties’ counsel.
Parties
Buddy Casteel                                Appellant/Defendant
Jaret B. Casteel                             Appellant/Defendant
Amelia Stayton                               Appellee/Plaintiff

                                    Counsel

Christopher Deeves                                 Trial and Appellate Counsel for
The Law Office of Christopher Deeves, P.C.         Appellants/Defendants
1370 Pantheon Way, Suite 110                       Buddy Casteel and
San Antonio, Texas 78232                           Jaret B. Casteel
Kenneth Grubbs                                     Trial and Appellate Counsel for
Law Office of Kenneth Grubbs                       Appellants/Defendants
4241 Woodcock Drive, Suite C-120                   Buddy Casteel and
San Antonio, Texas 78228                           Jaret B. Casteel
Bobby Jack Rushing                                 Trial and Appellate Counsel
The Rushing Law Firm, PLLC                         Appellee/Plaintiff
808 London Street                                  Amelia Stayton
Castroville, Texas 78009




                                        ii
                                     TABLE OF CONTENTS
                                                                                                       Page
IDENTITIES OF PARTIES AND COUNSEL ........................................................ ii
TABLE OF CONTENTS ......................................................................................... iii
INDEX OF AUTHORITIES.....................................................................................iv
STATEMENT OF THE CASE .................................................................................. v
ISSUES PRESENTED..............................................................................................vi

STATEMENT REGARDING ORAL ARGUMENT ..............................................vi
STATEMENT OF FACTS ........................................................................................ 2
A.      BACKGROUND FACTS................................................................................ 2
B.      PROCEDURAL HISTORY ............................................................................ 4
SUMMARY OF THE ARGUMENT ........................................................................ 4
ARGUMENT AND AUTHORITIES ........................................................................ 6

 I.      STANDARDS OF REVIEW ......................................................................... 6
            A.       “NO EVIDENCE” REVIEW ........................................................... 6
            B.       “FACTUAL SUFFICIENCY” REVIEW ........................................ 6
 II.     THE TERMINATION OF AN AGENT’S ACTUAL AUTHORITY .......... 7

 III.    BASED UPON HER PRIOR ACTUAL AUTHORITY MELISSA HAD
         APPARENT AUTHORITY TO BIND AMELIA WHEN SHE ENTERED
         THE SEPTEMBER 14, 2014 LEASE ........................................................... 9
CONCLUSION AND PRAYER ............................................................................. 11
CERTIFICATE OF COMPLIANCE ....................................................................... 13

CERTIFICATE OF SERVICE ................................................................................ 13




                                                      iii
                                      INDEX OF AUTHORITIES
                                                                                                                  Page

                                                       CASES


Cain v. Bain,
       709 S.W.2d 175 (Tex.1986)................................................................................. 6

City of Keller v. Wilson,
       168 S.W.3d 802 (Tex.2005). ........................................................................... 6

Neiman-Marcus Co. v. Viser,
     140 So.2d 762 (La.App.1962) ................................................................... 7. 10

Sorenson v. v. Shupe Bros. Co., 517 S.W.2d 861
      (Tex.Civ.App.—Amarillo 1974, no writ)..............................................5, 7, 10

                                                      RULES
TEX. R. APP. P. 39 .....................................................................................................vi
                                        SECONDARY SOURCES
Floyd R. Mechem, A Treatise on the Law of Agency § 628 (2d ed. 1914) .............. 7
RESTATEMENT AGENCY (THIRD) § 3.11 .................................................................. 7-8




                                                           iv
                      STATEMENT OF THE CASE
Nature of the Case:   Appeal from trial de novo of forcible entry and detainer
                      proceeding.
                      Appellants Buddy Casteel and Jaret B. Casteel (the
                      “Casteels”) leased the property commonly known as 373
                      South U.S. Highway 83, Leakey, Texas (the “Property”)
                      to operate a bar-b-que restaurant named the Hog Pen.
                      Amelia Stayton (“Amelia”) is the record owner of the
                      Property. RR Ex. P-1. For almost a decade, Amelia gave
                      her sister, Melissa Baugh (“Melissa”) actual authority to
                      enter leases and handle matters related to the Casteels’
                      lease of the Property such as collecting rent. RR 18, 52-
                      53.
                      On August 11, 2014, Melissa sent the Casteel’s notice to
                      vacate on Amelia’s behalf. RR 18; RR Ex. P-2.
                      Thereafter, there were Facebook messages between Jaret
                      Casteel and Amelia concerning Amelia’s desire for her
                      family to sell the property. RR Ex. P-4; D-2
                      On September 14, 2014, Melissa signed a ten year lease
                      extension with the Casteels so that they could continue to
                      operate the Hog Pen on the Property. RR 34; RR Ex. D-
                      4.
                      Believing she was not bound by that lease, Amelia gave
                      notice to the Casteels to vacate the property. CR 16-17.
                      When the Casteels did not vacate the property, this suit
                      followed. CR 5-18.
Trial Court:          The Honorable Garry Merritt, Real County Judge

Trial Court Action:   The trial court granted a judgment of eviction and
                      awarded Amelia her attorney’s fees. CR 82-83.




                                     v
                              ISSUE PRESENTED

      Was there legally or factually sufficient evidence presented showing that the
Casteels could no longer reasonably believe that Melissa had actual authority to act
as Amelia’s agent when Melissa signed the September 14, 2014 lease?


              STATEMENT REGARDING ORAL ARGUMENT

      This case presents an opportunity for the Court to address the most recent
Restatement of the Law related to agency such that oral argument would benefit
the Court. TEX. R. APP. P. 39.




                                         vi
                               NO. 04-15-00273-CV

                                 IN THE
                         FOURTH COURT OF APPEALS
                           SAN ANTONIO, TEXAS


                 BUDDY CASTEEL AND JARET B. CASTEEL,
                                                                        Appellants
                                         v.

                               AMELIA STAYTON,
                                                                         Appellee


                       BRIEF OF APPELLANTS
                BUDDY CASTEEL AND JARET B. CASTEEL



TO THE HONORABLE COURT OF APPEALS:

      Appellants Buddy Casteel and Jaret B. Casteel respectfully present their

opening brief. For the sake of clarity, Appellants Buddy Casteel and Jaret B.

Casteel will be referred to as the “Casteels.”    Appellee Amelia Stayton will be

referred to as “Amelia.” The one-volume clerk’s record will be cited as CR __.

The one-volume reporter’s record will be cited by page number as RR p. #. The

exhibits to the reporter’s record will be referred to as “RR Ex. __.”
                           STATEMENT OF FACTS

      A. BACKGROUND FACTS

      For approximately fifteen years, the Casteels have operated a bar-b-que

restaurant known as the “Hog Pen” in Leakey, Texas. RR 15. It is located at the

old Exxon station, 373 S. US Highway 83 (the “Property”). Amelia is the record

owner of this property. RR Ex. P-1. Amelia gave her sister, Melissa Baugh

(“Melissa”) actual authority to enter leases, collect rent, and otherwise manage the

Property. RR 18.

      During the time the “Hog Pen” has operated, there have been a multitude of

leases on the property—numerous month to month leases; a couple of one-year

term leases; a two-year term lease; and a five-year term lease. RR 42; 54. After the

property vested in Amelia in 2006, the leases were all signed by Melissa. RR 53.

Amelia never signed a lease. RR 38; 53.

      During these leases, the Casteels always paid rent to Melissa. RR 36; 52.

The Casteels never paid rent to Amelia. RR 53. Melissa always served as the

point of contact for the Property. RR 52-53. Amelia was never involved with

management of the property. RR 56.

      The last written lease was from July 2011 to July 2012. RR 16; RR Ex. D-1.

Amelia states that she prepared this lease, but the lease was signed by Melissa. RR




                                          2
25; RR Ex. D-1. While Amelia was present at the lease signing, Melissa signed

the lease. RR 61. Beginning in July 2012, the Casteels were month to month

tenants.

      On August 11, 2014, Melissa sent a notice to vacate to the Casteels. RR Ex.

P-2. Amelia drafted the notice to vacate. RR 18. However, Amelia testified that

because Melissa had signed the lease, Amelia had Melissa sign the notice to

vacate. RR 18.

      Based upon all these dealings, Jaret Casteel believed that Amelia had given

Melissa authority to act as Amelia’s agent to transact business with regard to the

Property including entering leases on the Property. RR 38.

      In early September 2014, Jaret and Amelia communicated via Facebook

Messenger regarding trying to agree on new terms for a lease of the Property. RR

Ex. D-2; P-4. Amelia indicated she wished to sell the property. RR Ex. D-2. In

these messages, Amelia never indicated that Melissa’s authority to lease the

property had been terminated.

      On September 14, 2014, Melissa then signed a new ten-year lease with the

Casteels for the Property covering the term from September 2014 to September

2024. RR 34; RR Ex. D-4. The Casteels were to pay $1500/month in rent during

the ten-year term.   RR 34; RR Ex. D-4.        The lease was then notarized on

September 18, 2014. RR 35; RR Ex. D-4. Jaret Casteel believed Melissa had the




                                        3
authority to sign this lease on Amelia’s behalf. RR 39.

      B. PROCEDURAL HISTORY

      Denying the validity of the September 14, 2014 lease, Amelia filed a

forcible entry and detainer suit against the Casteels seeking to have them vacate the

property.    CR 5-18. Following a trial, the Justice of the Peace granted the

eviction. CR 32-33. The Casteels appealed to Real County Court. CR 34-35.

Following a trial de novo, County Court Judge Garry A. Merritt granted the

eviction. CR 82-83. The Casteels appealed to this Court. CR 84-85.

                      SUMMARY OF THE ARGUMENT

      For almost a decade, Amelia gave Melissa actual authority to lease and

manage the property at issue. Melissa signed the leases that Amelia prepared,

collected the rent and otherwise addressed issues with regard to the property. RR

38, 52-53. On August 11, 2014, Amelia prepared a notice to vacate which Melissa

signed. RR 18; RR Ex. P-2. Amelia believed that Melissa should sign the notice

to vacate because she had signed the applicable lease. RR 18.

      On September 14, 2014, Melissa signed another lease on the property with

the Casteels. RR 34; Ex. D-4. Unbeknown to the Casteels, Amelia apparently

terminated Melissa’s actual authority to enter leases before then and Amelia

refused to be bound by the terms of the new lease.

      Regardless of whether Amelia did terminate Melissa’s actual authority to




                                         4
lease the property at issue, Amelia is bound by the lease entered into by Melissa on

September 14, 2014 because the act of an agent done within the apparent scope of

her authority even after the revocation of that authority binds the principal as to

one who had formerly dealt with the principal through the agent and who had no

notice of the revocation of the authority. Sorenson v. Shupe Bros. Co., 517 S.W.2d

861, 866 (Tex.Civ.App.—Amarillo 1974, no writ).

      In this case, the evidence showed that Jaret Casteel believed he had authority

to negotiate a new lease with Amelia through Melissa on September 14, 2014 as he

and his father had done for years. RR 39. Amelia presented no evidence showing

notice to the Casteels that Melissa’s authority to enter leases was terminated nor

was there any evidence showing that the Casteels could reasonably conclude that

Melissa’s authority to enter into leases on the property had ended. The Facebook

messages between Jaret Casteel and Melissa do not demonstrate that Melissa’s

authority had been terminated. RR Ex. D-2; P-4.

      Based upon the evidentiary record presented in the trial de novo, the trial

court could only conclude that Melissa acted with apparent authority to bind

Amelia when she entered the September 14, 2014 lease. The Casteels had no

notice that her decade of authority to enter leases had been terminated. The

judgment at issue should be reversed and rendered in the Casteels’ favor.




                                         5
                      ARGUMENT AND AUTHORITIES

I.    STANDARDS OF REVIEW

      A.      “NO EVIDENCE” REVIEW

      The parameters for conducting a “no evidence” review are spelled out in

great detail in the Texas Supreme Court decision in City of Keller v. Wilson, 168

S.W.3d 802 (Tex. 2005). In City of Keller, the Texas Supreme Court adopted the

long-established reasoning of Justice Calvert that

      "No evidence" points must, and may only, be sustained when the
      record discloses one of the following situations: (a) a complete
      absence of evidence of a vital fact; (b) the court is barred by rules of
      law or of evidence from giving weight to the only evidence offered to
      prove a vital fact; (c) the evidence offered to prove a vital fact is no
      more than a mere scintilla; (d) the evidence establishes conclusively
      the opposite of the vital fact.

Id. at 810.

       B.     “FACTUAL SUFFICIENCY” REVIEW

      In reviewing for factual sufficiency, this Court considers and weighs all of

the evidence and may conclude that the finding is not supported by factually

sufficient evidence only if the finding is so contrary to the overwhelming weight of

the evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176

(Tex.1986) (per curiam).




                                         6
II.    THE TERMINATION OF AN AGENT’S ACTUAL AUHTORITY

      The acts of an agent within the apparent scope of his authority done after the

revocation of his actual authority are binding on the principal as against one who

had formerly dealt with the principal through the agent and who had no notice of

the revocation. Sorenson v. Shupe Bros. Co., 517 S.W.2d 861, 866 (Tex. App.—

Amarillo 1974, no writ). Thus, where a third person has been dealing with an

agent, a revocation of the agent’s authority does not become effective between the

principal and the third person until such third person has received actual or

constructive notice of such revocation and therefore the third person may assume

that the authority of the agent continues until he has information to the contrary.

Neiman-Marcus Co. v. Viser, 140 So.2d 762, 765-66 (La.App. 1962).

      The classic statement of this rationale is:

      Where a general authority is once shown to have existed, it may be
      presumed to continue until it is shown to have been revoked, and
      persons who have dealt with the agent as such, or who have had
      knowledge of his authority and are therefore likely to deal with him,
      may very properly expect that if the authority be withdrawn,
      reasonable and timely notice of that fact will be given and they may
      lawfully presume, in the absence of such notice, that the authority still
      continues.

1 Floyd R. Mechem, A Treatise on the Law of Agency § 628 (2d ed. 1914).

      The modern view on this issue is set forth in the Restatement (Third)

Agency §3.11:


                                          7
             (1) The termination of actual authority does not by itself end
                 any apparent authority held by an agent.

             (2) Apparent authority ends when it is no longer reasonable for
                 the third party with whom an agent deals to believe that the
                 agent continues to act with actual authority.

Comment c from this Restatement provision on “lingering apparent authority

is particularly helpful to analysis of this case.

      Comment c. Lingering apparent authority. An agent’s apparent
      authority may survive or linger after the termination of actual
      authority because apparent authority is present when a third party
      reasonably believes that the agent is authorized to take action and the
      belief is traceable to a manifestation made by the principal. Once such
      a manifestation has been made, it remains operative independent of
      manifestations as between principal and agent that terminate actual
      authority, or the occurrence of circumstances that otherwise operate to
      terminate actual authority, including the terms of any agreement
      between principal and agent, the death of the principal, and the
      principal’s loss of capacity. Apparent authority protects third parties
      who interact with an agent on the basis of the principal’s prior
      manifestation and who lack notice that the agent’s actual authority has
      terminated.

             Often termed “lingering authority,” the doctrine stated in this
      section recognizes that it is reasonable for third parties to assume that
      an agent’s actual authority is a continuing or ongoing condition,
      unless and until a third party has notice of circumstances that make it
      unreasonable so to assume. These circumstances include notice that
      the principal has revoked the agent’s actual authority, that the agent
      has renounced it, that the agent’s authority was limited in duration or
      to a specific undertaking, or that circumstances otherwise have
      changed such that it is no longer reasonable to believe that the
      principal consents to the agent’s act on the principal’s behalf.
      (internal references omitted)


      Likewise, illustration 1 of the Restatement presents a similar factual


                                            8
situation to the one here for purposes of analysis.


       Illustration 1. P Corporation, in the recycling business, retains A as a
       purchasing agent to buy recyclable material on its behalf. A is authorized by
       P Corporation to buy on terms that commit P Corporation to pay for the
       material when it arrives at P Corporation’s recycling facility. A has
       purchased recyclables many times from T, who is in the business of
       building demolition. P Corporation terminates A’s actual authority. T has
       no notice of the termination. As to T, A continues for a reasonable period of
       time to possess apparent authority to purchase from T on terms comparable
       to those on which A has made prior purchases on P Corporation’s behalf.

      This is what happened here.

III. BASED UPON HER PRIOR ACTUAL AUTHORITY, MELISSA HAD
     APPARENT AUTHORITY TO BIND AMELIA WHEN SHE
     ENTERED THE SEPTEMBER 14, 2014 LEASE

      There can be no dispute that Amelia vested Melissa with actual authority to

enter leases, collect rent and manage the property in question for years. RR 52-53.

In fact, one month before the lease in question, Melissa (not Amelia) sent notice to

vacate. RR Ex. 2. Amelia had Melissa send the notice to vacate because she had

signed the lease pertaining to the notice to vacate. RR 18.

      On September 14, 2014, Melissa entered another lease on Amelia’s behalf

but Amelia claims that Melissa lacked authority to do so and that Amelia is not

bound by it. Apparently between August 11, 2014 and September 14, 2014,

Amelia stripped Melissa of her actual authority to enter leases on the property in

question. However, this did not end Melissa’s apparent authority to bind Amelia

as to parties like the Casteels who had prior dealings with Melissa acting on behalf



                                          9
of Amelia. Based upon their historical dealings, the Casteels were entitled to

sufficient notice of the termination of Melissa’s agency or Melissa’s act in signing

the lease would bind Amelia. Sorenson, 517 S.W.3d at 866. Without such notice,

the Casteels could assume that Melissa’s authority to enter leases on Amelia’s

behalf continued. Neiman-Marcus Co., 140 So.2d at 765-66. For there to be no

“lingering apparent authority” for Melissa to bind Amelia, there had to be evidence

either that

    the Casteels had notice that Amelia as principal had revoked Melissa’s

       actual authority to enter leases,

    Melissa had renounced her authority,

    Melissa’s authority was limited in duration or to a specific undertaking, or

    that circumstances otherwise have changed such that it was no longer
     reasonable to believe that Amelia consented to the Melissa’s acting on
     Amelia’s behalf.

None of these circumstances was present here. There was no notice given to the

Casteels by Amelia that Melissa could no longer lease the property on Amelia’s

behalf. Melissa did not renounce her authority. Melissa’s authority lasted for

years—not a limited duration.

       Finally, there was not a change in circumstances such that the Casteels could

no longer believe that Melissa acted on Amelia’s behalf. While Amelia will

undoubtedly point to the Facebook messages as such evidence, they do not



                                           10
demonstrate that the Casteels could no longer deal with Melissa. RR Ex. P-4; D-2.

In fact, the only evidence presented to the trial court was that Jaret Casteel believed

Melissa had the authority to sign this lease on Amelia’s behalf. RR 39.      Thus, the

trial court could only conclude that Melissa had apparent authority to bind Amelia

when she entered the September 14, 2014 lease. As such, the judgment of eviction

should be reversed and judgment rendered in the Casteels’ favor. The Casteels had

a valid lease of the property and therefore could not be evicted.

                          CONCLUSION AND PRAYER

      WHEREFORE, PREMISES CONSIDERED, Appellants Buddy Casteel and

Jaret B. Casteel ask the Court to reverse and render judgment in their favor.

Alternatively, they ask the Court to reverse and remand this matter for a new trial

and for all such other relief to which Appellant is entitled.


                                               Respectfully submitted,
                                                     /s/ Christopher J. Deeves
                                               CHRISTOPHER J. DEEVES
                                               State Bar No. 00790575
                                               THE LAW OFFICE OF
                                               CHISTOPHER DEEVES, P.C.
                                               1370 Pantheon Way, Suite 110
                                               San Antonio, Texas 78232
                                               (210) 445-8807 (Telephone)
                                               (210) 501-0915 (Facsimile)
                                               chrisdeeves@att.net (e-mail)




                                          11
     KENNETH E. GRUBBS
     State Bar No. 00798225
     THE LAW OFFICE OF
     KENNETH GRUBBS
     4241 Woodcock Drive, Suite C-120
     San Antonio, Texas 78228
     (210) 490-1292 (Telephone)
     (210) 499-4587 (Facsimile)
     kengrubbs@sbcglobal.net (e-mail)

     ATTORNEY FOR APPELLANTS,
     BUDDY CASTEEL AND
     JARET B. CASTEEL




12
                       CERTIFICATE OF COMPLIANCE

       Pursuant to Texas Rule of Appellate Procedure 9.4(i)(3), I hereby certify that
this brief contains 2,783 words (excluding the caption, table of contents, table of
authorities, signature, proof of service, certification, and certificate of compliance).
This is a computer-generated document created in Microsoft Word, using 14-point
typeface for all text, except for footnotes which are in 12-point typeface. In
making this certificate of compliance, I am relying on the word count provided by
the software used to prepare the document.


                                                   /s/ Christopher J. Deeves
                                               CHRISTOPHER J. DEEVES


                          CERTIFICATE OF SERVICE
     I hereby certify that a true and correct copy of the foregoing Brief of
Appellants has been served electronically on the 21st day of September, 2015:
Bobby Jack Rushing
The Rushing Law Firm, PLLC
808 London Street
Castroville, Texas 78009
ATTORNEY FOR APPELLEE
AMELIA STAYTON
VIA ELECTRONIC DELIVERY

                                                   /s/ Christopher J. Deeves
                                               CHRISTOPHER J. DEEVES




                                          13
