                                    NO. 07-03-0104-CV

                               IN THE COURT OF APPEALS

                       FOR THE SEVENTH DISTRICT OF TEXAS

                                       AT AMARILLO

                                          PANEL D

                                    MAY 31, 2005
                           ______________________________

                BEVERLY ENTERPRISES-TEXAS, INC. and BEVERLY
                  HEALTH and REHABILITATION SERVICES, INC.,
                       f/k/a BEVERLY ENTERPRISES, INC.

                                                                         Appellants

                                               v.

        CLIFFORD E. MORTON, successor-in-interest to M.S. INVESTMENTS,

                                                                         Appellee
                         _________________________________

             FROM THE 251ST DISTRICT COURT OF RANDALL COUNTY;

                 NO. 43,907-C; HON. PATRICK A. PIRTLE, PRESIDING
                         _______________________________

                                Memorandum Opinion
                          _______________________________

Before QUINN, C.J., and REAVIS and CAMPBELL, JJ.

       Beverly Enterprises-Texas, Inc. and Beverly Health and Rehabilitation Services, Inc.,

f/k/a Beverly Enterprises, Inc. (Beverly) appealed from a judgment granted in favor of

Clifford E. Morton, successor-in-interest to M.S. Investments (Morton). Five issues, some

with multiple sub-issues, were raised by Beverly. They involved the sufficiency of the

evidence supporting the jury’s verdict, the exclusion of evidence, the trial court’s jury charge

and the purported irreconcilable answers of the jury to various questions posed in the
charge, and the manner in which prejudgment interest was calculated. In turn, Morton

cross-appealed, and his issue also concerns the manner in which prejudgment interest was

calculated. We reverse the judgment and remand the cause.

                                       Background

       The dispute between the parties concerned Beverly’s obligations under a lease

agreement. It leased a facility from Morton to operate a nursing home. Morton sued

Beverly to recover damages due to Beverly’s failure to maintain the leased premises as

promised in the lease. Trial was to a jury, which body ultimately found in favor of Morton.

After judgment was entered, both sides appealed.

                       Issue One – Sufficiency of the Evidence

       Through its first issue, Beverly attacks the sufficiency of the evidence underlying

aspects of the jury’s verdict. This particular issue consists of multiple sub-issues which we

consider in the order raised.

       Waiver

       Beverly initially contends that Morton waived any right he had to sue upon the

obligations imposed in article 13 of the lease or, alternatively, Beverly was entitled to an

instruction on waiver given the presence of some evidence creating an issue of fact on the

matter. This is purportedly so because Morton’s partner (Stan Studer and co-lessor)

informed Beverly, via a letter dated February 13, 1996, that it was his and Morton’s

intention “to have Beverly return to us the facility in the original condition delivered to

Beverly in 1981, reasonable wear and tear excepted.” The quoted provision, according to

Beverly, evinced the intent of both Morton and Studer to impress upon the tenant those



                                             2
obligations imposed by article 19 of the lease and forego those imposed by article 13. We

sustain the issue.

       Article 13 obligated the lessee (Beverly) to:

       . . . maintain in good condition the roof, exterior walls (including painting) and
       the foundation so that the premises will be tenantable . . . [and] . . . at its sole
       expense . . . keep in good repair the interior portions of the building including
       interior painting, painting of exterior trim and walls and to make necessary
       repairs, including but not limited to, the repair of the driveways and parking
       lot, landscaping, electrical services and plumbing in the building, floor drains,
       floor covering, light fixtures and maintenances [sic] of the air conditioning and
       heating equipment, fire alarm and sprinkler systems, and the glass, including
       the replacement of glass if necessary. All repairs made by Lessee shall be
       at least equal in quality to the original. The Lessee shall receive all benefits
       which the Lessors may be entitled to receive from any warranties and
       guaranties on account of work in or on the premises, including any
       equipment therein, the maintenance of which is the responsibility of the
       Lessee . . . .

Additionally, the repairs contemplated were to “be at least equal in quality to the original.”

So too did Beverly bind itself to return the premises “in as good condition as the same is

at the date of commencement of the term thereof, reasonable wear and tear only

excepted.” The latter duty appeared in article 19 of the agreement. And, as can be seen,

the duties imposed by each provision differed somewhat.

       Simply put, article 13 addressed the repairs to be undertaken by the lessee during

the term of the lease while article 19 involved the condition in which the lessee was to

return the property upon expiration of the leasehold. Furthermore, both envisioned that the

property would be maintained in “good condition.” See Fisher v. Temco Aircraft Corp., 324

S.W.2d 571, 575 (Tex. Civ. App.–Texarkana 1959, no writ) (stating that “the covenant ‘to

repair’ or ‘to keep in repair’ is essentially the same as the covenant to deliver up the

premises in good order and condition”). Yet, each contained additional language that the


                                                3
other omitted and that further described the duty contemplated by the respective article.

For instance, the repairs undertaken per article 13 during the leasehold had to be of the ilk

required to “at least” restore the item being repaired to the “quality [of] the original.” The

same cannot be said, however, of repairs within the ambit of article 19; there, the standard

remained one of good condition but allowed for “reasonable wear and tear.” That is, the

tenant had to return the property in as good condition as when first received except for

those items that deteriorated because of reasonable wear and tear.

       So, as can be seen, the lease imposed two different duties upon Beverly. Though

each contemplated the property being in good condition, the scope of the duty viz

maintaining the property in that condition differed depending upon the period in the life of

the lease. During the lease term (i.e. as long as Beverly continued to use the premises),

Beverly had to maintain the property and correct deficiencies via means which returned it

to the “quality of the original.” Yet, when the lease ended and Beverly relinquished the

property to the lessors, good condition no longer meant that the components of the facility

were to be repaired to the “quality of the original” but rather it entitled Beverly to return the

premises or parts thereof in a condition less than original in quality if the diminution was

attributable to reasonable wear and tear. See Nadler v. American Motors Sales Corp., 764

F.2d 409, 414 (5th Cir. 1985) (noting this difference in duties in a similarly worded lease).

       With the foregoing difference in duties in mind, we return to the Studer letter. Prior

to its delivery, Morton found fault in how Beverly complied with its duty to repair the

premises it continued to occupy. A September 1995 letter sent by his attorney indicated

as much; indeed, express reference was made to article 13 and Beverly’s obligations under



                                               4
it.1 Several months later and days before the lease was to end, Studer forwarded to

Beverly a letter simply directing it to return the property “in the original condition delivered

. . . reasonable wear and tear excepted.” Nothing was said in the letter about article 13 or

repairing the facility or its components to the “quality of the original.” Rather, Studer used

words akin to those used in article 19 and permitting Beverly to return the facility without

correcting those conditions caused by reasonable wear and tear. So, comparison of the

two letters illustrated a difference in the demands being made upon Beverly. Earlier, the

lessors sought compliance from Beverly with both articles while later they sent a letter

demanding compliance with those duties mentioned in article 19 alone.

        Waiver is defined as the intentional relinquishment of a known right or intentional

conduct inconsistent with claiming the right. Shaver v. Schuster, 815 S.W.2d 818, 824

(Tex. App.–Amarillo 1991, writ denied). Whether such occurred is normally a fact issue for

the jury to determine based upon the evidence and reasonable inferences therefrom. Id.

Moreover, if some evidence of waiver appears of record and the defense is alleged in the

pleadings, then the trial court must instruct the jury of the matter. Hyundai Motor Co. v.

Rodriguez, 995 S.W.2d 661, 663-64 (Tex. 1999) (stating that the trial court must submit in

its charge all questions, instructions, and definitions raised by the pleadings and evidence);

Cresthaven Nursing Residence v. Freeman, 134 S.W.3d 214, 227 (Tex. App.–Amarillo

2003, no pet.) (requiring the same). Here, Beverly pled waiver in its supplemental answer.

Furthermore, comparison of the September and February letters illustrate that the lessors

1) knew of articles 13 and 19 and the rights and duties encompassed in each and 2) days


        1
          So too did th e letter refer to the con dition in which the property had to be upon its return and as
con tem plated by article 19.

                                                      5
before the lease was to end, demanded compliance with article 19, not article 13. This is

some evidence sufficient to create a fact issue regarding each element of waiver. And,

being sufficient to so create an issue of fact, the trial court was obligated to have the jury

determine if Morton waived compliance with article 13. By not doing so, the trial court

erred. Finally, the error was harmful given that waiver, if found by the jury to have

occurred, would have altered the damages recoverable by Morton.2

        In short, we sustain that portion of issue one involving the trial court’s failure to

instruct the jury on waiver. Moreover, sustaining that issue relieves us from having to

address the remaining issues. Accordingly, we reverse the judgment of the trial court and

remand for further proceedings.



                                                            Brian Quinn
                                                            Chief Justice




        2
         Though the jury generally was asked to determine the amount of damages suffered by Morton due
to Beverly’s purported failure to comply with the lease provisions (which included articles 13 and 19), the trial
court also asked that it decide what amount of damages was attributable sole ly to the breach of article 19.
The former sum was $848,310 while the latter was $100,0 00. Thus , had the jury bee n give n the opp ortun ity
to decide if Morton waived the rights contained in article 13, the amount of damages recoverable from Beverly
ma y have been quite less.

                                                       6
