HOUSTON – An appellate court has upheld a trial court’s decision in a landlord/tenant dispute between two couples who have been in a dispute over arbitration.
The 1st District Court of Appeals of Texas affirmed the judgment of the 189th District Court in Harris County on Sept. 28 concluding: “Because the Howells conclusively proved their res judicata defense and appellants did not raise a fact issue about the applicability of res judicata, we hold that the trial court did not err in granting summary judgment on appellants' counterclaims.”
According to the opinion, Reginald and Carol Barham, owners of Premium Plastics Supply Inc., signed a two-year lease for commercial space owned by Thomas and Laura Howell in 2012. An arbitration clause in the agreement mandated that all disputes had to be arbitrated.
After the lease was up in May 2014, the Barhams allegedly did not vacate the space.
“In October of 2014, the Howells sent a notice of default to appellants seeking payment under the holdover clause of the lease, which governed payment after the lease term lapsed,” the opinion states.
The Barhams allegedly didn’t pay. The Howells initiated arbitration with the American Arbitration Association and changed the locks, the opinion states.
The Barhams initiated counterclaims against the Howells, alleging improper lockout and a breach of oral agreements.
“The appellants dismissed the counterclaims before the final evidentiary proceeding in the arbitration; in their appellants’ brief, they state that they dismissed the claims so that they could pursue them in a trial court. In the final arbitration award, the arbitrator awarded the Howells $33,500 in unpaid rent for the period from November 2014 to May 2015,” the opinion states.
The Howells filed suit in Harris County, pursuing a declaratory judgment to confirm the arbitration award and filed a motion for summary judgment. That motion was granted.
“The Howells then moved for summary judgment on appellants’ counterclaims, arguing that they were barred by res judicata because they should have been raised in the arbitration. The trial court granted the second summary-judgment motion and rendered a final judgment,” the opinion states.
The Barhams appeal states the trial court erred and filed an appeal saying the arbitrator’s judgment was in error due to res judicata. According to Wex Legal Dictionary, res judicata is "the principle that a cause of action may not be litigated again once it has been judged on the merits."
The appellate court affirmed the judgment of the trial court.
On the panel of the court were Chief Justice Sherry Radack and Justices Evelyn Keyes and Jane Bland.