WEST HOUSTON AIRPORT CORPORATION v. SWEET WATER WELL SERVICE LLC (2025)

OPINION

In this cross appeal, appellant/cross-appellee West Houston Airport Corporation (the Airport) appeals the trial court's judgment in favor of appellee/cross-appellant Sweet Water Well Service, LLC (Sweet Water). The Airport primarily argues that because there was no liability finding against it, the trial court erred by ordering that the Airport pay damages and attorney's fees to Sweet Water (the Airport's first and third issues). We conclude the trial court erred in awarding damages and attorney's fees to Sweet Water when the jury returned a negative finding on its sole cause of action submitted to the jury. In its second issue, the Airport argues the jury's finding that the Airport was not damaged by Sweet Water's breach of contract (found by the jury) was against the great weight and preponderance of the evidence. Because the trial court should not have submitted this counterclaim to the jury, we overrule this issue.

Sweet Water also appeals the judgment of the trial court and argues the trial court erred by: (1) denying Sweet Water's motion for directed verdict for the excess proceeds of the sale of the aircraft (first issue); and (2) refusing to grant Sweet Water's motion to dismiss the Airport's counterclaim (second issue). In its third issue, Sweet Water maintains that the jury's finding that the Airport's lien was not fraudulent is against the great weight and preponderance of the evidence. We agree that the trial court erred in denying Sweet Water's motion for directed verdict based on the absence of evidence supporting the Airport's breach of contract claim. Therefore, we sustain Sweet Water's second issue and render a take-nothing judgment on that claim. We overrule Sweet Water's first and third issues as discussed below.

I. Background

The Airport and Matthew Krause executed a contract for storage of Krause's 1975 Piper Cherokee aircraft at the Airport's facility. In 2014, Krause stopped making payments to the Airport. The Airport filed an aircraft repair and maintenance lien with a supporting affidavit to secure payment of the unpaid amounts owed under the storage contract. The lien, filed with the Federal Aviation Administration (FAA) in 2016, states that “[t]he storage provided by [the Airport] commenced on January 1, 2014 and had been continuous through October 31, 2016. The amount due for the storage is ($7,177.47)․ The amount of the Lien is for ․ ($7,177.47).”

In December 2016, after seeing an advertisement for the aircraft, Sweet Water contacted the Airport to inquire about purchasing the aircraft. The Airport sent Sweet Water a copy of the lien that had been filed with the FAA. Sweet Water then located Krause and negotiated a purchase agreement for the aircraft. Sweet Water received title to the aircraft in January 2017 without paying Krause any money but agreed to satisfy the aircraft repair and maintenance lien.¹ Sweet Water then contacted the Airport to negotiate payment of the lien. The Airport produced charges of more than $14,000, which it advised Sweet Water had to be paid before the aircraft could be released.

In February 2017, Sweet Water filed suit against the Airport asserting a cause of action under Civil Practice and Remedies Code Chapter 12 and Texas Property Code Chapter 70, Subchapter D (“Subchapter D claim”).² See Tex. Civ. Prac. & Rem. Code Ann. § 12.002(a); Tex. Prop. Code Ann. § 70.301. The Airport asserted its own affirmative claims for relief, including one on the basis that Sweet Water had expressly assumed the storage contract and then breached the contract. After years of litigating these claims in various stages, the parties tried the case to a jury in 2023.

In 2018, the Airport foreclosed on its aircraft repair and maintenance lien and sold the aircraft to a third party for $35,000. The amount of the aircraft repair and maintenance lien described in the sale documents was $33,000. However, at trial, the Airport presented expenses incurred for storing, repairing, maintaining, and marketing the airplane, as well as legal expenses incurred to secure its rights under the contract, in excess of the sales price.

II. Sweet Water's claims against the Airport

Both the Airport and Sweet Water raise appellate issues relating to their own claims, as well as the claims asserted against them. Therefore, we consider first the appellate issues of each party pertaining to Sweet Water's claims against the Airport. Then, we consider the appellate issues pertaining to the Airport's counterclaim.

A. Relevant statutory authority

1. Fraudulent lien

Civil Practice and Remedies Code section 12.002(a) provides:

(a) A person may not make, present, or use a document or other record with:

(1) knowledge that the document or other record is a fraudulent court record or a fraudulent lien or claim against real or personal property or an interest in real or personal property;

(2) intent that the document or other record be given the same legal effect as a court record or document of a court created by or established under the constitution or laws of this state or the United States or another entity listed in Section 37.01, Penal Code, evidencing a valid lien or claim against real or personal property or an interest in real or personal property; and

(3) intent to cause another person to suffer: (A) physical injury; (B) financial injury; or (C) mental anguish or emotional distress.

Tex. Civ. Prac. & Rem. Code Ann. § 12.002(a).

Therefore, in order to prevail on this claim, Sweet Water had the burden to show: (1) the Airport made, presented, or used a document with knowledge that it was a fraudulent lien, (2) the Airport intended that the document be given legal effect, and (3) the Airport intended to cause Sweet Water physical injury, financial injury, or mental anguish.

2. Subchapter D claim

The Legislature enacted Chapter 70, Subchapter D of the Texas Property code in 1989, and amended the subchapter in 1995 and 2001, to expand the scope of a lien available to a person who stores, fuels, repairs, or performs maintenance work on an aircraft and to provide a lien enforcement mechanism. The Legislature sought to provide aircraft mechanics and storage facilities, among others, a mechanism to ensure payment for their services.

Section 70.301 indicates that “a person who stores, fuels, repairs, or performs maintenance work on an aircraft has a lien on the aircraft for (1) the amount due under a contract for the storage, fuel, repairs, or maintenance work; or (2) if no amount is specified by contract, the reasonable and usual compensation for the storage, fuel, repairs, or maintenance work.”³ Tex. Prop. Code Ann. § 70.301(a). A holder of a lien under this subchapter may retain possession of the aircraft subject to the lien only until the amount due is paid. Tex. Prop. Code Ann. § 70.302.

In order to perfect such a lien, not later than the 60th day after the date of completion of the contractual storage period, notice of the lien must be given to the owner. Tex. Prop. Code Ann. § 70.304. Not later than the 180th day after the date of the completion of the contractual storage period, the lienholder may also record the lien with the FAA. Tex. Prop. Code Ann. § 70.303. If, after the 90th day after the date of the completion of the contractual storage period or the performance of the last applicable, the amount due remains unpaid after the owner received notice, the lienholder may sell the property at public auction. Tex. Prop. Code Ann. § 70.305.

A claim filed under Subchapter D is essentially a claim regarding the validity or enforceability of the lien. See TWC Aviation, Inc. v. World Tech Aviation, LLC, 714 S.W.3d 688, 703 (Tex. App.—Houston [1st Dist.] 2024, no pet.); In re Curry, 407 S.W.3d 376, 379 (Tex. App.—Dallas 2013, orig. proceeding).

B. The jury's negative finding on Sweet Water's fraudulent lien claim

We begin with Sweet Water's third issue, as it challenges an express finding of the jury. Sweet Water argues the jury's finding that the Airport's lien was not fraudulent was against the great weight and preponderance of the evidence.⁴ Therefore, we consider whether the jury's negative finding on Sweet Water's fraudulent lien claim was supported by factually sufficient evidence.

To prevail on its fraudulent lien claim, Sweet Water had the burden to show, as provided in the jury charge, that the Airport had engaged in

the act of presenting a document or record with knowledge that the document or record is fraudulent and with the intent that the document or record be given the same legal effect as a court record evidencing a valid lien or claim and with the overall intent to cause a person to suffer physical injury, financial injury, or mental anguish or emotional distress.

Cf. Tex. Civ. Prac. & Rem. Code Ann. § 12.002(a). We further note that fraud is the “knowing misrepresentation or knowing concealment of a material fact made to induce another to act to his or her detriment.” Fraud, Black's Law Dictionary (12th ed. 2024).

Sweet Water fundamentally agreed that the Airport was entitled to an aircraft repair and maintenance lien against the aircraft, but that it was limited to $7,177.47. That Sweet Water disagreed about the amount or type of expenses the Airport was allowed to recover is not evidence of fraud. There is no evidence in the record, and Sweet Water cites to none, that the Airport knew it was not entitled to hold an aircraft repair and maintenance lien on the aircraft, but did so anyway. We conclude the jury's negative finding on Sweet Water's fraudulent lien claim was supported by factually sufficient evidence. We overrule Sweet Water's third issue.

C. The jury's award of damages to Sweet Water

In the Airport's first issue, it argues the jury's award of $9,177.47 to Sweet Water was in error. The Airport asserts that the trial court erred in awarding damages in the final judgment absent a finding of liability. Sweet Water responds that the jury's liability finding was contained in Question No. 5, in which the jury found that “the lien amount presented to Sweet Water” was $7,177.47. We agree with the Airport.

1. No liability finding on the Subchapter D claim

Sweet Water stated on the record that, at the time of trial, it had four causes of action against the Airport: (1) a fraudulent lien cause of action; (2) a common law fraud cause of action; (3) a declaratory action; (4) and a cause of action pursuant to Subchapter D. On the record at trial, Sweet Water stated that it intended to go forward only on its fraudulent lien claim and its Subchapter D claim. However, the only theory of liability included in the jury charge was on the fraudulent lien claim:

If the jury makes a negative finding in answer to a question, it means the party with the burden of proof has failed to carry its burden. Grenwelge v. Shamrock Reconstructors, Inc., 705 S.W.2d 693, 694 (Tex. 1986) (per curiam); Burns v. Resolution Tr. Corp., 880 S.W.2d 149, 154 (Tex. App.—Houston [14th Dist.] 1994, no writ). A trial court may not properly disregard a jury's negative finding and substitute its own affirmative finding unless the evidence conclusively establishes the issue. Cullins v. Foster, 171 S.W.3d 521, 537 (Tex. App.—Houston [14th Dist.] 2005, pet. denied).

Sweet Water, in this appeal, acknowledges the jury's negative finding on the fraudulent lien claim but relies on the jury's response to Question No. 5 as an affirmative finding by the jury on Sweet Water's Subchapter D claim. Question No. 5 in the jury charge asked what was the lien amount “presented” to Sweet Water by the Airport:

Although presentment of a fraudulent lien is one way to satisfy an element of a fraudulent lien claim, presentment of an aircraft repair and maintenance lien is not an element of a Subchapter D claim or material to such a claim. Compare Tex. Civ. Prac. & Rem. Code Ann. § 12.002(a), with Tex. Prop. Code Ann. § 70.301. The jury charge does not include any question that required the jury to make a finding on the validity of the Airport's aircraft repair and maintenance lien.

Although Sweet Water sought findings that the Airport's lien was fraudulent, argument at trial focused on the amount of the lien or the expenses reasonably associated with the lien for storage, fuel, repairs, and maintenance work. Sweet Water never disputed the fact that the Airport stored the aircraft for many months and provided fuel, maintenance, and repairs. To the extent that challenging the amount of an aircraft repair and maintenance lien is a cause of action provided by statute in Subchapter D, the jury charge did not include any finding that would allow Sweet Water to prevail on that theory. The question Sweet Water needed answered was: (1) what amount was the Airport entitled to recover under a contract for the storage, fuel, repairs, or maintenance work or (2) what was “the reasonable and usual compensation for the storage, fuel, repairs, or maintenance work.” Tex. Prop. Code Ann. § 70.301(a). Question No. 5—which asks the jury the amount of the lien “presented” to Sweet Water—does not provide a finding on any element of a Subchapter D claim. In summary, Sweet Water received no affirmative finding of liability on its claims against the Airport. Texarkana Mem'l Hosp., Inc. v. Murdock, 946 S.W.2d 836, 838 (Tex. 1997) (“To recover damages, the burden is on the plaintiff to produce evidence from which the jury may reasonably infer that the damages claimed resulted from the defendant's conduct.”). And, because Sweet Water submitted jury questions related only to its fraudulent lien claim, it waived the right to recover on any of its other theories of liability. Tex. R. Civ. P. 279.

2. The jury's answer to Question No. 5 is immaterial

The jury's finding regarding the amount of the lien presented to Sweet Water was immaterial and should not have been submitted. A trial court may disregard a jury finding if it is unsupported by the evidence or it is immaterial. Green Int'l, Inc. v. Solis, 951 S.W.2d 384, 389–90 (Tex. 1997). A question is immaterial when it should not have been submitted, it calls for a finding beyond the province of the jury, such as a question of law, or when it was properly submitted but has been rendered immaterial by other findings. See Se. Pipe Line Co. v. Tichacek, 997 S.W.2d 166, 172 (Tex. 1999). A jury question can also be considered immaterial when its answer cannot alter the effect of the verdict. City of Brownsville v. Alvarado, 897 S.W.2d 750, 752 (Tex. 1995); Hernandez v. Atieh, No. 14-06-00582-CV, 2008 WL 2133193, at *3 (Tex. App.—Houston [14th Dist.] May 20, 2008, no pet.) (mem. op.).

Question No. 5 does not relate to any element of Sweet Water's Subchapter D claim. To the extent that Question No. 5 relates to Sweet Water's fraudulent lien claim, as the question uses presentment language consistent with Civil Practice and Remedies Code section 12.002, it was rendered moot by the jury's negative finding on that claim. Therefore, Question No. 5 could not alter the effect of the verdict.

Although the jury answered the question on damages,⁵ it was rendered immaterial by the jury's negative finding on liability. See Spencer v. Eagle Star Ins. Co. of Am., 876 S.W.2d 154, 157 (Tex. 1994) (“A question is immaterial when it should not have been submitted or, though properly submitted, it is rendered immaterial by other findings.”); Fire Ins. Exch. v. Sullivan, 192 S.W.3d 99, 105 (Tex. App.—Houston [14th Dist.] 2006, pet. denied) (same). We therefore conclude the trial court erred when it determined that “the verdict was for the Plaintiff and against the Defendant” and awarded damages against the Airport and in favor of Sweet Water.

We sustain the Airport's first issue.

D. Attorney's fees

In the Airport's third issue, it challenges the award of attorney's fees to Sweet Water in the final judgment. The Airport maintains that because Sweet Water did not prevail at trial it was not entitled to its attorney's fees.

It is well-established that, in Texas, generally each party must pay their own attorney's fees. Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469, 483 (Tex. 2019). There are, however, certain circumstances in which the prevailing party can recover attorney's fees from the opposing party, including when such recovery is authorized by statute. Id. at 484; In re Nat'l Lloyds Ins. Co., 532 S.W.3d 794, 809 (Tex. 2017) (“Texas follows the American rule on attorney's fees, which provides that, generally, ‘a party may not recover attorney's fees unless authorized by statute or contract.’ ”).

As discussed above, the only theory of liability submitted to the jury was on Sweet Water's fraudulent lien claim, and the jury returned a negative finding on that claim. Therefore, Sweet Water could not legally recover any attorney's fees under Civil Practice and Remedies Code Chapter 12. Tex. Civ. Prac. & Rem. Code Ann. § 12.002(b) (allowing recovery of attorney's fees against a party found to have violated the statute). We therefore conclude the trial court erred when it determined that “the verdict was for the Plaintiff and against the Defendant,” and awarded attorney's fees against the Airport and in favor of Sweet Water.

We sustain the Airport's third issue.

E. Sweet Water's motion for directed verdict on excess sale proceeds

In Sweet Water's first issue on appeal, it argues the trial court erred by denying its motion for directed verdict in which it argued that it was entitled to the excess proceeds from the sale of the aircraft after the lien was satisfied. Sweet Water argues that once the correct lien amount is determined, the statute allows for a lien holder under certain conditions to sell the aircraft at public auction to recoup the amount under the lien; however, any money received above the lien amount must be paid to the current owner of the aircraft. See Tex. Prop. Code Ann. § 70.305.

Sweet Water bases this argument on its characterization of Question No. 5 in the jury charge as an affirmative finding on its Subchapter D claim. However, Question No. 5 did not ascertain the appropriate amount of the lien. Instead, it merely asked the amount of the lien “presented” to Sweet Water. Having already concluded there was no question submitted which determined the amount of the aircraft repair and maintenance lien and that Question No. 5 did not establish the correct amount of the lien, we further conclude the trial court did not err in denying its motion for directed verdict as to its entitlement to the excess proceeds from the sale of the aircraft.

We overrule Sweet Water's first issue on appeal.

III. The Airport's counterclaim

Both Sweet Water and the Airport challenge the judgment of the trial court with respect to the Airport's counterclaim for breach of contract. Sweet Water argues that the trial court erred by not granting its directed verdict that the Airport had no evidence to support its claim that Sweet Water assumed Krause's contract. The Airport challenges the jury's finding of no damages, arguing that the jury was not free to disregard its uncontroverted evidence of damages.

A. Sweet Water's motion for directed verdict

In its second issue, Sweet Water argues that the trial court erred by failing to grant its motion to dismiss the Airport's counterclaim under Rule 166(g). Tex. R. Civ. P. 166(g). The rule authorizes trial courts to decide matters that, though ordinarily fact questions, have become questions of law because “reasonable minds cannot differ on the outcome.” JPMorgan Chase Bank, N.A. v. Orca Assets G.P., L.L.C., 546 S.W.3d 648, 653 (Tex. 2018) (internal quotation marks omitted). Sweet Water argued a Rule 166(g) motion before the start of trial, but it was denied as premature.

Although the pretrial ruling may not be reviewable on appeal, Sweet Water raised the issue of lack of evidence throughout trial, including in its motion for directed verdict. See Tex. R. Civ. P. 268. Further, Sweet Water's appellate briefing addresses both the Rule 166(g) motion and its directed verdict in the lens of a challenge to the sufficiency of the evidence on the Airport's counterclaim. See Tex. R. App. P. 38.9. In a jury case, to preserve error on a “matter of law” issue or a “no evidence” issue, a party must raise the issue in one or more of the following procedural devices: (1) a motion for directed verdict, (2) an objection at the charge conference to the submission of the question to the jury, (3) a motion for judgment notwithstanding the verdict, (4) a motion to disregard the jury's answer, or (5) a motion for new trial. See Ginn v. Pierce, 595 S.W.3d 762, 765–66 (Tex. App.—Houston [14th Dist.] 2019, pet. denied). In its motion for directed verdict, Sweet Water argued that the Airport pleaded express assumption of the storage agreement but produced no contract or evidence of any express assumption. The Airport responded that there was evidence that Sweet Water “took over from Krause” and it was either an express assumption or implied assumption. After hearing argument, the trial court concluded it was a fact issue for the jury. Sweet Water preserved this issue by receiving a ruling from the trial court, as well as later objecting to Question No. 7 in the jury charge, which asks whether Sweet Water “assume[d] the obligations of the agreement between [the Airport] and Michael Krause,” and filing a motion for new trial.⁶ Tex. R. App. P. 33.1(a); Tex. R. Civ. P. 324(a), (b).

A directed verdict is proper only under limited circumstances, such as when there is no evidence of an essential element of a claim or defense, or when the evidence conclusively establishes the right of the movant to judgment or negates the right of the opponent. See City of Keller v. Wilson, 168 S.W.3d 802, 823 (Tex. 2005); King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 750–51 (Tex. 2003). We use a legal sufficiency standard to review a trial court's denial of motion for directed verdict. City of Keller, 168 S.W.3d at 823; King Ranch, 118 S.W.3d at 750–51. If “there is any evidence of probative value to raise an issue of material fact on the question presented,” the movant is not entitled to a directed verdict. Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348 S.W.3d 194, 217 (Tex. 2011).

The Airport's pleadings state that “Sweet Water expressly assumed the obligations, including payment obligations, in the contract.”⁷ In order to expressly assume a contractual obligation, there must be actual promissory words, or words of assumption, on the part of the assignee. Jones v. Cooper Indus., Inc., 938 S.W.2d 118, 124 (Tex. App.—Houston [14th Dist.] 1996, writ denied). The Airport argues their manager testified at trial that he understood Sweet Water to be assuming Krause's contract with the airport. However, the Airport manager testified as follows regarding his conversation with Sweet Water's representative: “I know he said he wanted to pay off the lien. I don't recall him saying he assumed the contract to me on the telephone when he called.” The testimony of the Airport's manager is the only evidence cited by the Airport in support of its claim that Sweet Water assumed Krause's contract and breached the contract.

Although the Airport suggests the jury “was free to make of this testimony what it would,” we conclude it does not raise a scintilla of evidence, or a fact question, on its legal theory that Sweet Water assumed the storage contract. While there was some evidence that Sweet Water agreed to satisfy the aircraft repair and maintenance lien, there was no evidence of any probative value that Sweet Water intended to assume any liability for or under the storage contract.

Therefore, we agree the trial court erred. The trial court should have rendered a take-nothing judgment on the Airport's breach of contract claim.⁸ We sustain Sweet Water's second issue.

B. The challenge to the jury's zero-damages finding

In the Airport's second issue, it argues the jury's denial of breach-of-contract damages to the Airport, after it concluded that Sweet Water breached its contract with the Airport, was against the great weight and preponderance of the evidence. The Airport maintained that it had provided uncontroverted evidence of its expenses incurred to maintain and store the aircraft and protect its rights under the contract, which the jury was not free to disregard. And, it argues, the jury should have awarded $9,488.98 in damages to it after all offsets.

However, we have already concluded that the trial court erred in submitting this claim to the jury. Because the trial court should have rendered a take-nothing judgment in Sweet Water's favor on this claim, we overrule the Airport's second issue.

IV. Conclusion

Having sustained Sweet Water's second issue and overruled the Airport's second issue, we render a take-nothing judgment on the Airport's claims against Sweet Water.

Further, because we sustained the Airport's first and third issues and overruled Sweet Water's first and third issues, we reverse the final judgment of the trial court and render a take-nothing judgment on Sweet Water's claims against the Airport.⁹ Tex. R. App. P. 43.2; 43.3.

FOOTNOTES

1.   The agreement between Sweet Water and Krause provided for some payment to Krause contingent on Sweet Water's ability to satisfy the lien at a satisfactory price.

2.   Sweet Water initially asserted a claim under the Deceptive Trade Practices Act but later eliminated that claim.

3.   The statutory storage lien only applies if the contract for storage was written or oral and provided for a storage period of at least thirty days. Tex. Prop. Code Ann. § 70.301(b). The parties agree that Subchapter D applies to the storage contract at issue.

4.   Sweet Water appears to mix and match concepts between the fraudulent lien statute and its Subchapter D claim. However, they are two different claims with different elements. An invalid or unenforceable lien is not necessarily a fraudulent lien. Validity of an aircraft repair and maintenance lien is based on compliance with the statute. However, as discussed in more depth below, Sweet Water did not include any liability finding on its Subchapter D claim in the jury charge.

5.   The damages questions in the jury charge were not conditioned on the affirmative answer to any liability question(s).

6.   The jury charge does not address whether there was express or implicit assumption of the contract.

7.   “The purpose of pleadings is to give an adversary notice of claims, defenses, and the relief sought.” Chevron Phillips Chem. Co. v. Kingwood Crossroads, L.P., 346 S.W.3d 37, 64 (Tex. App.—Houston [14th Dist.] 2011, pet. denied). “The judgment of the court shall conform to the pleadings, the nature of the case proved and the verdict, if any, and shall be so framed as to give the party all the relief to which he may be entitled either in law or equity.” Tex. R. Civ. P. 301. Here, the Airport did not plead or prove a breach of contract by implied assumption. Therefore, to the extent the trial court submitted a question to the jury that encompassed implied assumption, over Sweet Water's objection, the trial court erred. Eun Bok Lee v. Ho Chang Lee, 411 S.W.3d 95, 106 (Tex. App.—Houston [1st Dist.] 2013, no pet.) (“A trial court may not grant relief on a theory of recovery not sufficiently stated in the party's pleadings or tried by consent.”). Given Sweet Water's objections at trial, we cannot conclude the issue was tried by consent.

8.   Although the Airport did assert other causes of action in its pleadings, its breach of contract claim was the only theory of liability included in the jury charge or on which there were any findings. Therefore, the Airport has waived its right to recover on its other pleaded theories. See Tex. R. Civ. P. 279.

9.   Neither party is entitled to an award of attorney's fees. See Tex. Civ. Prac. & Rem. Code Ann. § 12.002(b) (statute provides only for award of attorney's fees when a person is found to have violated the statute); Rohrmoos Venture, 578 S.W.3d at 484 (to recover attorney's fees under Section 38.001, a party must (1) prevail on a cause of action for which attorney's fees are recoverable, and (2) recover damages).

Ken Wise, Justice