In The
Court of Appeals
Ninth District of Texas at Beaumont
NO. 09-24-00301-CV
BRAVERMAN MANAGEMENT, INC., Appellant
V.
MTILL HOLDINGS, LLC, Appellee
On Appeal from the 284th District Court
Montgomery County, Texas
Trial Cause No. 22-10-14560-CV
MEMORANDUM OPINION
Braverman Management, Inc. appeals the trial court’s final judgment
awarding MTill Holdings, LLC $153,418.11 in damages for breach of contract and
$37,498.52 in attorney fees. Braverman complains that the trial court erred because
(1) the damages were not offset by the amount required under the lease, (2) the
damages were not calculated based upon the agreed lease rate, (3) the trial court
relied upon inadmissible, unsubstantiated evidence of brokerage fees, (4) the trial
court incorrectly calculated late fees, and (5) the trial court awarded attorney’s fees
1
in an amount contrary to Texas law. For the reasons discussed below, we affirm the
trial court’s judgment.
Background
On November 18, 2019, MTill and Evergreen Office 2012, LLC, executed a
Lease Agreement (“Prime Lease”) whereby MTill leased office space in the
Evergreen Circle Office Building for a term of five years beginning January 1, 2020.
On February 1, 2021, with Evergreen Office’s consent, MTill and Braverman
executed a Sublease wherein Braverman subleased 4,265 square feet of office space
and 1,285 square feet of balcony space on the third floor of the building for a term
of 47 months, ending on December 31, 2024. In a Consent to Sublease
contemporaneously executed by Braverman, MTill and Evergreen Office, the parties
agreed the Sublease would be subject to and subordinate to all of the terms and
conditions of the Prime Lease. Moreover, the Sublease states:
This Sublease is subject and subordinate to the Prime Lease. Except as
may be inconsistent with the terms hereof, in which event the Prime
Lease shall control, all the terms, covenants and conditions in the Prime
Lease shall be applicable to this Sublease with the same force and effect
as if the Sublessor were Landlord under the Prime Lease and Sublessee
were Tenant thereunder. In case of any breach hereof by Sublessee,
Sublessor shall have all the rights against Sublessee as would be
available to Landlord against Tenant under the Prime Lease if such
breach was made by Tenant thereunder.
2
Under the terms of the Sublease, Braverman agreed to pay MTill a monthly
rental rate comprised of a base rental rate plus 28.43% (calculated as a pro-rata share
of the total interior square footage of the office building) of the Common Area
Maintenance Costs (“CAM”) “as determined by [Evergreen Circle]” and as “more
specifically described in the Prime Lease.” According to the terms of the Prime
Lease, Evergreen Office conducts an annual reconciliation of operating expenses by
April 1 of each year and adjusts the CAM rate accordingly. The Prime Lease
provides:
Tenant’s Proportionate Share: Estimated Monthly Payments. Tenant’s
obligation with respect to payment of Operating Expenses shall begin
as of the Rent Commencement Date, and shall be equal to Tenant’s
Proportionate Share of Operating Expenses. For the purposes hereof,
“Tenant’s Proportionate Share” shall be deemed to be 28.43% on the
Lease Commencement Date. Landlord shall make a good faith estimate
of the Operating Expenses to be due and payable by Tenant for any
calendar year or part thereof during the Term, and Tenant shall pay to
Landlord as Additional Rent, on the first day of each calendar month
thereafter, together with the payment of Base Rent, an amount equal to
Tenant’s Proportionate Share of the estimated Operating Expenses for
such calendar year (or part thereof) divided by the number of months
therein (“Estimated Operating Expenses”). Any amounts paid based on
any such estimate shall be subject to adjustment as herein provided
when the actual amounts constituting Tenant’s Proportionate Share of
Operating Expenses are available for each calendar year. Tenant shall
be bound and obligated (and hereby agrees) to pay Tenant’s Estimated
Operating Expenses contemporaneously with each required payment of
Base Rent hereunder, on the first day of each calendar month, monthly
in advance, for each and every month in the Term beginning on the
Rent Commencement Date, in lawful money of the United States of
America.
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On March 26, 2021, MTill and Braverman executed a First Amendment to
Agreement of Sublease, effective April 1, 2021. The terms of the Sublease were
modified so that in addition to the 4,265 square feet of interior office space on the
third floor, Braverman would also sublease 5,680 square feet on the second floor for
a total of 9,945 square feet. As a result, CAM increased to 66.30%, representing the
revised pro-rata share of the total office space. Relevant to this appeal, the Amended
Sublease provided that for the term of April 1, 2022 to March 31, 2023, the base
rental rate was $23.06 and the estimated CAM was $12.32, for a total of $35.38 per
square foot. From April 1, 2023 to March 31, 2024, the base rental was $23.64 and
the estimated CAM was $12.32, for a total of $35.96 per square foot. Lastly, from
April 1, 2024 to December 31, 2024, the base rental was $24.23 and the estimated
CAM was $12.32, for a total of $36.55 per square foot. Like the original Sublease,
the Amended Sublease is subject to and subordinate to the Prime Lease.
The Prime Lease provides alternative remedies upon default, but only one is
relevant to this appeal:
25. Remedies. Upon any Event of Default, Landlord may, in addition
to all other rights and remedies afforded Landlord hereunder or by law
or equity, take one or more of the following actions:
…
(b) Termination of Right of Possession. Terminate Tenant’s right to
possession of the Leased Premises without terminating this Lease by
giving written notice thereof to Tenant, in which event Tenant shall pay
to Landlord (i) all rent accrued hereunder through the date of
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termination of possession, (ii) all amounts due from time under Section
26(a), and (iii) all rent and other sums required hereunder to be paid by
Tenant during the remainder of the Term, diminished by any net sums
thereafter received by Landlord through re-letting the Leased Premises
during such period. Landlord shall use reasonable efforts to re-let the
Leased Premises on such terms and conditions as Landlord, in its sole
discretion, may determine (including a term different from the Term,
rental concessions, and alterations to, and improvements of, the Leased
Premises). Landlord will not be liable for, nor shall Tenant’s
obligations hereunder be diminished because of, Landlord’s failure to
re-let the Leased Premises or to collect rent due for such re-letting,
Tenant will not be entitled to the excess of any consideration obtained
by re-letting over the rent due hereunder. Reentry by Landlord in the
Leased Premises will not affect Tenant’s obligations hereunder for the
unexpired Term, rather, Landlord may, from time to time, bring action
against Tenant to collect amounts due by Tenant.
Under Section 26(a) of the Prime Lease, Tenant is responsible for the
following costs upon termination of right of possession by Landlord:
Landlord Costs. Tenant shall pay to Landlord all costs incurred by
Landlord (including court costs and reasonable attorney’s fees and
expenses) in (i) obtaining possession of the Leased Premises, (ii)
removing and storing Tenant’s or other occupant’s property, (iii)
repairing, restoring, altering, remodeling, or otherwise putting the
Leased Premises into condition acceptable to a new tenant, (iv) if
Tenant is dispossessed of the of the Leased Premises and this Lease is
not terminated, re-letting all or any part of the Leased Premises
(including brokerage commissions, cost of tenant finish work, and other
cost incidental of such re-letting), (v) performing Tenant’s obligations
that Tenant failed to perform, and (vi) enforcing the provisions of this
Lease, or advising Landlord of its rights, remedies, and recourse in
connection therewith.
Under the Prime Lease, failure to pay rent by the fifth day of the month would
subject Braverman to a late payment charge equal to five percent of the delinquent
amount plus interest at the rate of ten percent per annum.
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Braverman abandoned the property in October 2022 and does not dispute that
it breached the Sublease and Amended Sublease. On October 13, 2022, MTill sent
“Notice of Termination of Right and Possession and Demand for Payment” to
Braverman. MTill secured a new tenant, American State Bank, for the third floor
effective December 1, 2022. MTill began re-occupying the second floor effective
May 1, 2023.
MTill sued Braverman for breach of contract. Braverman filed a general
denial. A bench trial was conducted on May 30, 2024. MTill presented evidence that
its total damages (excluding attorney’s fees) were $153,418.11, broken down as
follows: $121,220.67 in unpaid rent (base rent and CAM) for the second floor for
seven months (from October 2022 when Braverman abandoned the lease to May
2023 when MTill re-occupied the space); $25,149.28 in unpaid rent (base rent and
CAM) for the third floor for two months (from October 2022 when Braverman
abandoned the lease to December 2022 when the space was leased to the bank);
$1,812.39 in five-percent late fees for rent unpaid less than one year; $14,351.52 in
ten-percent late fees for rent unpaid in excess of one year; less a credit of $17,300.33
for the second-floor security deposit; less a credit of $12,990.48 for the third-floor
security deposit; plus a 2% commission of $7,055.02 to Tarantino Properties and a
4% commission of $14,110.04 to J. Beard Real Estate to re-let the third floor. MTill
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also presented evidence that it incurred $37,498.53 in reasonable and necessary
attorney fees.
The trial court signed a final judgment awarding MTill $153,418.11 as
damages and $37,498.53 as reasonable and necessary attorney’s fees. In its Findings
of Fact and Conclusions of Law, the trial court detailed its calculations of damages.
It further found that Braverman waived the affirmative defense of offset because
Braverman failed to plead it.
Braverman appealed the trial court’s final judgment. In five issues on appeal,
Braverman complains that (1) the trial court miscalculated the total third-floor
damages because it (i) failed to consider offset amounts and (ii) relied upon
inadmissible, unsubstantiated amounts for brokerage fees; (2) the trial court
miscalculated the second-floor damages because it failed to calculate damages based
on the terms of the lease; (3) the trial court erred in its award of late fees because it
used incorrect calculations for the second and third-floor damages; and (4) the trial
court awarded excessive attorney’s fees.
Standard of Review
In a bench trial, the trial court, as factfinder, is the exclusive judge of the
credibility of witnesses, determines the weight of the testimony, and is tasked with
resolving any inconsistencies in the evidence and drawing inferences from basic
facts to ultimate facts. See City of Keller v. Wilson, 168 S.W.3d 802, 819-21 (Tex.
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2005); Macpherson v. Aglony, No. 09-21-00004-CV, 2022 Tex. App. LEXIS 7105,
at *35 (Tex. App.—Beaumont Sept. 22, 2022, no pet.) (mem. op.). “When a trial
court makes specific findings of fact and conclusions of law following a bench trial
and a reporter’s record is before the appellate court, the findings will be sustained if
there is evidence to support them, and the appellate court will review the legal
conclusions drawn from the facts to determine their correctness.” Macpherson, 2022
Tex. App. LEXIS 7105, at *36 (citing Trelltex, Inc. v. Intecx, L.L.C., 494 S.W.3d
781, 789 (Tex. App.—Houston [14th Dist.] 2016, no pet.)). Findings of fact entered
in a bench trial have the same force and dignity as a jury’s answers to jury questions.
See Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991). In an appeal
from a bench trial in which the trial court made findings of fact and conclusions of
law, appellants should challenge the sufficiency of the evidence supporting specific
findings of fact rather than directing such a challenge generally at the judgment as a
whole. See Thompson & Knight LLP v. Patriot Expl., LLC, 444 S.W.3d 157, 162
(Tex. App.—Dallas 2014, no pet.); Carrasco v. Stewart, 224 S.W.3d 363, 367 (Tex.
App.—El Paso 2006, no pet.). “‘If the appellant does not challenge the trial court’s
findings of fact, when filed, these facts are binding upon both the party and the
appellate court.’” Cahill v. Cahill, No. 09-20-00206-CV, 2022 Tex. App. LEXIS
792, at *18 (Tex. App.—Beaumont Feb. 3, 2022, pet. denied) (mem. op.) (quoting
IKB Indus. v. Pro-Line Corp., 938 S.W.2d 440, 445 (Tex. 1997); see also Ranches
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at Hamilton Pool Homeowners Ass’n, Inc. v. Red Eagle RH, LP, No. 08-24-00359-CV, 2025 Tex. App. LEXIS 7394, at *6 (Tex. App.—El Paso Sept. 18, 2025, no
pet.) (mem. op.) (quoting Carrasco, 224 S.W.3d at 366-67). In evaluating the legal
sufficiency of the evidence to support a finding, we view the evidence in the light
most favorable to the finding, indulging every reasonable inference supporting it.
See City of Keller, 168 S.W.3d at 822. The ultimate test is whether the evidence
allows reasonable and fair-minded people to reach the finding under review. See id.
“A legal sufficiency challenge fails if more than a scintilla of evidence supports the
finding.” Tex. Outfitters, Ltd., LLC v. Nicholson, 572 S.W.3d 647, 653 (Tex. 2019).
In a factual sufficiency review, we view all the evidence in a neutral light and set
aside the finding only if the finding is so contrary to the overwhelming weight of the
evidence such that the finding is clearly wrong and unjust. Betancourt v. Ohmer, No.
09-18-00121-CV, 2019 Tex. App. LEXIS 323, at *9 (Tex. App.—Beaumont Jan.
17, 2019, no pet.) (mem. op.) (citing Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986);
Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986)). We review conclusions
of law de novo. See Macpherson, 2022 Tex. App. LEXIS 7105, at *36.
Analysis
Offset
In its first issue, Braverman complains that the trial court erred in calculating
the third-floor damages by failing to apply an offset amount of $10,753.71.
9
According to Braverman’s brief and Proposed Findings of Fact and Conclusions of
Law, MTill relet the third floor, entitling it to receive $352,751.04 from American
State Bank during the remainder of the lease term, whereas over the same period,
the total amount MTill would have received from Braverman under the Amended
Sublease was only $341,997.33. According to section 25(b) of the Prime Lease, the
amount owed by Braverman upon termination of its right of possession is to be
“diminished by any net sums thereafter received by Landlord through re-letting the
Leased Premises during such period.” Braverman argues that because MTill would
be receiving, under the lease to the bank, $10,753.71 in excess of what it would have
received under the lease to Braverman, Braverman is entitled to offset MTill’s
damages by $10,753.71. Braverman acknowledges that it did not plead the
affirmative defense of offset but argues that the issue was tried by consent.
We need not decide whether the offset issue was tried by consent, because as
pointed out in MTill’s brief, section 25(b) of the Prime Lease states, “Tenant will
not be entitled to the excess of any consideration obtained by re-letting over the rent
due hereunder.” (emphasis added). 1 Therefore, we conclude that regardless of
whether the issue was tried by consent, Braverman is not entitled to offset damages
1
As indicated above, the Sublease states the Prime Lease applies “as if the Sublessor [MTill] were Landlord under the Prime Lease and Sublessee [Braverman] were Tenant thereunder.” It also provides that the “Sublessor [MTill] shall have all the rights against Sublessee [Braverman] as would be available to Landlord against Tenant under the Prime Lease if such breach was made by Tenant thereunder.”
10
by the excess consideration MTill is entitled to receive by re-letting the third floor
to the bank. We overrule Braverman’s first issue.
Increased CAM Rate
In Braverman’s second issue, it complains that based on the terms of the lease,
the trial court erred in its calculation of second-floor damages resulting in an award
that is $3,720.42 higher than justified. MTill provided evidence that the damages for
the second floor totaled $121,220.67, an amount which Braverman argues
improperly includes an increase in CAM that occurred after the lease was
terminated.
“The ultimate goal in measuring damages for a breach-of-contract claim is to
provide just compensation for any loss or damage actually sustained as a result of
the breach.” Mays v. Pierce, 203 S.W.3d 564, 577 (Tex. App.—Houston [14th Dist.]
2006, pet. denied). “The normal measure of damages in a breach-of-contract case is
the benefit-of-the-bargain measure, the purpose of which is to restore the injured
party to the economic position it would have been in had the contract been
performed.” Id.
The evidence at trial showed that the CAM rates included in Braverman’s
monthly rental payments were estimates which were subject to adjustment pursuant
to the Prime Lease Landlord’s determination of annual operating costs; the Prime
Lease Landlord increased the CAM in February 2023; and the Sublease and
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Amended Sublease are subject to and subordinate to the Prime Lease. Had
Braverman performed under the contract, it would have been subject to the increased
CAM rates. Therefore, MTill’s benefit-of-the-bargain damages properly included all
rents that would have been paid by Braverman during the term of the lease which
would have included the actual CAM rates, rather than merely the estimated CAM
rates. The trial court found that effective February 2023, the CAM as determined by
the Prime Landlord increased from $12.32 to $14.94 per square foot. We conclude
the trial court properly included the increased CAM rate in its calculation of
damages. We overrule Braverman’s second issue.
Brokerage Fees
In its third issue, Braverman argues that brokerage fees of $21,165.06 were
improperly awarded. Specifically, Braverman asserts its objections to Exhibit 8, the
$7,055.02 commission invoice from Tarantino Properties to MTill, and Exhibit 9,
the $14,110.04 commission invoice from J. Beard Real Estate to MTill, were
improperly overruled by the trial court. Braverman objected that the invoices were
hearsay, unauthenticated, and lacked foundation. Braverman argued Michael Till did
not have personal knowledge of the broker’s recordkeeping practices. The trial court
overruled the objections and admitted the invoices as business records.
Evidentiary rulings are committed to the trial court’s sound discretion. Bay
Area Healthcare Grp., Ltd. v. McShane, 239 S.W.3d 231, 234 (Tex. 2007) (per
12
curiam). A trial court abuses its discretion only when it rules without regard for any
guiding rules or principles, and we must uphold a trial court’s evidentiary ruling if
there is any legitimate basis to support it. Owens-Corning Fiberglas Corp. v.
Malone, 972 S.W.2d 35, 43 (Tex. 1998).
Hearsay is an out-of-court statement offered in evidence to prove the truth of
the matter asserted and is inadmissible unless a statute or rule of exception applies.
Tex. R. Evid. 801(d), 802. The proponent of hearsay has the burden of showing that
the testimony fits within an exception to the general rule prohibiting the admission
of hearsay evidence. Volkswagen of Am., Inc. v. Ramirez, 159 S.W.3d 897, 908 n.5
(Tex. 2004). Under the business-records exception, evidence that is otherwise
inadmissible as hearsay may be admissible if the proponent of the evidence
demonstrates that (1) the records were made and kept in the course of a regularly
conducted business activity; (2) it was the regular practice of the business activity to
create such records; (3) the records were created at or near the time of the event
recorded; and (4) the records were created by, or from information transmitted by, a
person with knowledge who was acting in the regular course of business. Tex. R.
Evid. 803(6); see In re E.A.K., 192 S.W.3d 133, 141 (Tex. App.—Houston [14th
Dist.] 2006, pet. denied). The predicate witness need not be the creator of the record
nor have personal knowledge of the content of the record but rather need only have
13
personal knowledge of the manner in which the records were prepared. In re E.A.K.,
192 S.W.3d at 142.
A business record created by one entity that later becomes another entity’s
primary record is still admissible as a record of regularly conducted activity under
Rule 803(6). Martinez v. Midland Credit Mgmt., Inc., 250 S.W.3d 481, 485 (Tex.
App.—El Paso 2008, no pet.). Third-party documents can become the business
records of an organization and consequently be admissible under Rule 803(6) if the
records are (1) incorporated and kept in the course of the testifying witness’s
business, (2) the business typically relies upon the accuracy of the contents of the
documents, and (3) the circumstances otherwise indicate the trustworthiness of the
documents. Simien v. Unifund CCR Partners, 321 S.W.3d 235, 240-41 (Tex. App.—
Houston [1st Dist.] 2010, no pet.) (citing Bell v. State, 176 S.W.3d 90, 92 (Tex.
App.—Houston [1st Dist.] 2004, pet. ref’d)); Dodeka, L.L.C. v. Campos, 377 S.W.3d
726, 732 (Tex. App.—San Antonio 2012, no pet.) (op. on reh’g); Ortega v. Cach,
LLC, 396 S.W.3d 622, 629 (Tex. App.—Houston [14th Dist.] 2013, no pet.). “The
theory underlying the business-records exception is that there is a certain probability
of trustworthiness of records regularly kept by an organization while engaged in its
activities and upon which it relies in the ordinary course of its activities.” Ortega,
396 S.W.3d at 629. That said, “if ‘the source of information or the method or
circumstances of preparation indicate lack of trustworthiness,’ even a properly
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authenticated record may be inadmissible.” Id. at 630 (quoting Tex. R. Evid. 803(6)).
“Lack of trustworthiness is most frequently found when the record was prepared in
anticipation of litigation.” Id.
Till testified that the broker’s invoices were documents that he kept in the
regular course of business of MTill. Furthermore, Till’s testimony indicates that his
business relied upon the accuracy and the trustworthiness of those broker’s invoices
because he made payment on the invoices. Braverman argues that Till’s testimony
“brought into serious question the legitimacy of the amounts sought in these
invoices[,]” because Till testified that the brokers “threw every dollar they could into
their commission[]” and that the brokers “won’t lease it out unless you pay their
bill.” Till’s testimony that the brokers charged as much as they could is not testimony
that they charged more than they could. The trial court could have reasonably
concluded the brokers’ commissions were not “inaccurate and inflated[]” as
Braverman contends. No witness testified that commissions totaling 6% are
excessive, nor is there testimony that the invoices, themselves, lack trustworthiness.
Therefore, the trial court did not abuse its discretion in overruling the objections,
admitting the invoices and relying on them in calculating the brokers’ commissions
in the damages award. We overrule Braverman’s third issue.
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Late Fees
In its fourth issue, Braverman argues that because the trial court used incorrect
calculations for the second-floor and third-floor damages, the trial court erred in its
award of late fees, arguing that the award is $1,283.66 higher than it should be.
Under the terms of the leases, the amount of late fees is dependent on the amount of
rent due. Because we have concluded that the trial court correctly calculated the
damages for the third floor and second floor, it follows that the calculation of late
fees is correct as well. We overrule Braverman’s fourth issue.
Attorney Fees
In its fifth issue, Braverman complains that the trial court’s award of attorney
fees is excessive and should be reduced by $25,329.29. Braverman argues that
because the trial court awarded MTill only $153,418.11 in damages, representing
only 32.45% of the $472,745.52 sought by MTill, the trial court should have reduced
MTill’s attorney fees accordingly. Braverman cites Smith v. Patrick W.Y. Tam Trust,
296 S.W.3d 545, 546 (Tex. 2009), for the proposition that “where a party has
recovered less than a third of the damages sought, a court’s award of the full amount
of attorney fees sought is unreasonable.”
In Smith, the plaintiff sought around $215,000 in damages, but the jury
awarded only $65,000 in damages and no attorney fees. Notwithstanding the jury’s
finding, the trial court rendered a judgment that included attorney fees of $7,500
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through trial and up to $15,000 on appeal. The court of appeals affirmed the damage
award but vacated the $7,500 in attorney fees and rendered judgment for $47,438.75
in attorney fees, holding that this amount had been established as a matter of law. Id.
at 546-47. The Supreme Court reversed and remanded for a new trial on attorney
fees, holding that “[b]ecause the fee is unreasonable in light of the amount involved
and the results obtained, the evidence did no more than raise a fact issue to be
decided by the jury” and that “the court was not free to set a reasonable fee on its
own.” Id. at 548.
Smith does not support Braverman’s argument that an attorney-fees award
must be proportional to the ratio between the damages awarded and the damages
sought. The Supreme Court did not reverse and render judgment for an amount
proportional to the damages award. Instead, it held the amount of attorney fees was
a fact question to be decided in a new trial, reasoning that even when attorney-fee
evidence is uncontradicted, such fees are not to be regarded as established as a matter
of law if the amount may be considered unreasonable, incredible or of questionable
belief. Id. at 547-48 (citing Ragsdale v. Progressive Voters League, 801 S.W.2d 880,
882 (Tex. 1990)). Therefore, Smith simply reiterates that the amount of attorney fees
must be reasonable given the circumstances and that “the amount involved and the
results obtained” are factors to be considered by the factfinder in determining a
reasonable fee. See id. at 548 (citing Arthur Andersen & Co. v. Perry Equip. Corp.,
17
945 S.W.2d 812, 818 (Tex.1997)). Here, the factfinder was the trial judge, and the
evidence supports her finding that $37,498.53 is a reasonable and necessary attorney
fee given the circumstances and Arthur Anderson factors, including the amount
involved and the results obtained. We overrule Braverman’s fifth issue.
Conclusion
Having overruled all of Braverman’s issues, we affirm the trial court’s
judgment.
AFFIRMED.
KENT CHAMBERS
Justice
Submitted on May 29, 2026
Opinion Delivered June 25, 2026
Before Johnson, Wright and Chambers, JJ.
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