Jury Demand in LANDRY'S RESTAURANTS, INC., ET AL VS. FLAGSHIP HOTEL, LTD., THE, ET AL| Trellis.Law

On December 30, 2008 a Motion-Secondary was filed involving a dispute between Landry'S Restaurants, Inc.,, Willie G'S Post Oak, Inc.,, and Evergreen General Agency, Inc., Flagship Hospitality, Inc.,, Flagship Hotel, Ltd., The,, for Other Civil - Cases in the District Court of Galveston County.

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1/10/2014 4:57:51 PM
JOHN D. KINARD
District Clerk
Galveston County, Texas

NO. 08CV1286

LANDRY’S RESTAURANTS, INC. § IN THE DISTRICT COURT OF
AND WILLIE G’S POST OAK, INC. §
§
VS. § GALVESTON COUNTY, TEXAS
§
THE FLAGSHIP HOTEL, LTD. §
AND FLAGSHIP HOSPITALITY, INC. § 405TH JUDICIAL DISTRICT

MEMORANDUM OF LAW OF PLAINTIFFS LANDRY’S
RESTAURANTS, INC. ET AL. ON THE SUBMISSION OF AND
RESPONSE OF THE JURY TO QUESTION 4 IN THE COURT’S CHARGE

To the Honorable Michelle Slaughter, District Judge:

Plaintiffs Landry’s Restaurants, Inc. and Willie G’s Post Oak, Inc. (“Plaintiffs”) file this

memorandum of law on the submission of and response of the jury to Question 4 in the Court’s

charge pursuant to the Court’s request at the hearing on November 18, 2013.1

Statement of the Case

1. As the Court is aware, this case involves a dispute over a commercial lease

agreement between Plaintiffs and Defendant The Flagship Hotel, Ltd. (“Flagship”). Flagship

leased from Plaintiffs the premises commonly referred to as The Flagship Hotel, located at 2501

Seawall Boulevard, Galveston Island, Texas. As part of this commercial lease, Flagship agreed

to maintain a certain level of windstorm insurance coverage for property damage on the leased

premises.

2. Hurricane Ike made landfall on September 12 and 13, 2008 and caused significant

damage to The Flagship Hotel. The Court found, based on the undisputed evidence in the record,

that Flagship did not have the premises properly or adequately insured under the lease, having

purchased only a $3.0 million Texas Windstorm Insurance Agency (TWIA) policy. Plaintiffs

1
Plaintiffs understand that all parties will file initial briefs by January 10, 2014, and will have the chance to file
responsive briefs by January 17, 2014.
suffered a significant uninsured loss on the premises, so they sued Defendants for breach of the

lease agreement.

3. Defendants denied liability, and asserted counterclaims for breach of contract,

conversion and forgery, and constructive eviction. (Defendants’ Second Amended Answer and

Counterclaim). The Court only submitted issues related to Plaintiffs’ contract claims to the jury.

4. Shortly before all parties rested, the Court conducted a charge conference. At that

time, the Court agreed that the question on damages should be submitted in the form proposed by

Plaintiffs. That question asked the jury to consider the amount of money, if any, that would have

been reasonable and necessary to put the Flagship Hotel back to its condition immediately before

the hurricane. The question also included an instruction on mitigation of damages. (Exhibit 1)(e-

mail from counsel for Plaintiffs to Court attaching final jury charge with changes after informal

charge conference).

5. However, the next day, before the parties made closing arguments to the jury, at

Flagship’s request, the Court again discussed the charge with the parties. At that time, the Court

agreed with Flagship that the question on damages should be changed to ask what sum of money,

if any, would fairly and reasonably compensation Plaintiffs for Flagship’s failure to comply with

the lease agreement. The Court then instructed the jury to consider either replacement cost value

(“RCV”) or actual cash value (“ACV”) as the elements of damages, and none other. (Exhibit 2).

Plaintiffs objected to the submission.

6. The jury returned a verdict in this case on August 9, 2013. In that verdict, the jury

found that:

● Flagship’s failure to obtain the required business interruption insurance was not
excused;

● Flagship’s failure to pay rent required by the lease agreement was excused
because Flagship was constructively evicted from the leased premises;

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● the amount of insurance coverage for property damage to the leased premises that
was reasonably obtainable under the lease was $4.0 million; and

● Plaintiffs suffered about $250,000 in damages for Flagship’s failure to comply
with the lease agreement.

7. The parties appeared before the Court on November 18, 2013 on Plaintiffs’

objections to Flagship’s motion for entry of judgment and motion for judgment notwithstanding

the verdict and Flagship’s motion for entry of judgment. At that time, the Court discussed at

length the issue of Question 4 with the parties. The Court asked the parties to submit additional

briefs on the submission by the Court and the jury’s answer to the question. This memorandum

of law is submitted to the Court in response to that request.2

Evidence at Trial on Damages

8. Several witnesses testified at trial about the damages to the hotel as a result of the

storm. Plaintiffs called Larry Brown to testify about the costs to rebuild the hotel to the condition

that it was before the storm damaged the property. (Exhibit 6 at 15). Brown developed an

estimate of what it was going to cost to get the hotel back in the shape it was before the storm,

assess what damage had been done, and then came up with a budget number so Plaintiffs could

make decisions about repairs to the property. (Id. at 16-17). He began that work about thirty (30)

days after the storm. (Id. at 17); see also (Id. at 56, 57). He concluded that the reasonable and

necessary cost of repair to put the hotel in the condition that it was prior to the storm was about

$10 million. (Id. at 68). That number did not include any upgrades to the building. (Id. at 69, 71).

Brown testified that the hotel was completely repairable because the structure was in good shape.

(Id. at 100).
2
Plaintiffs filed a motion for judgment notwithstanding the verdict as to Questions 2, 3 and 4. One basis for the
motion on Question 4 is that the only competent and admissible evidence in the record supported an answer of about
$10 million for the reasons discussed in the motion and in paragraphs 22-26 below. If the Court believes there is
conflicting admissible and competent evidence on RCV and ACV, Plaintiffs recognize that the Court should not
choose a number based on that conflicting evidence. Even though Plaintiffs may not agree with such a conclusion,
the Court should not grant a motion for judgment notwithstanding the verdict on Question 4 on conflicting evidence.
Plaintiffs would then reserve the right to file a different post trial motion.

3
9. Gene Stilwell was an independent public adjuster hired by Flagship immediately

after the storm to assess the damage to the property. He agreed that anyone could drive past the

hotel and see that the property was significantly damaged. (Exhibit 4 at 25). As he prepared the

loss estimate, itappeared that the loss was going to exceed the insurance policy limits of $3.0

million. (Id. at 34). Stilwell estimated that the damages were about $5.2 million, but that number

did not represent the total damages to the hotel. (Id. at 38). Stilwell simply reached a point at

which the number clearly exceeded the policy limits, so there was no need to go further. (Id.).

Stilwell would not be able to give an estimate on total damages except that the number would be

in excess of $5.2 million. (Id. at 40-41).

10. Richard Booker works for Cunningham Lindsey as an insurance claims adjuster.

He was retained by TWIA to adjust the claim for the damage to the Flagship property. (Exhibit 5

at 12). He adjusted the claim based on the limits of the insurance policy. There was enough

damage so he knew that the policy limits would have to be paid. (Id. at 21). It was very obvious

to him that the damage to the building exceeded the limit of insurance at $3.0 million. (Id. at 30,

41). As a result, he stopped his evaluation at about $4.2 million. (Id. at 22).

11. This policy provided insurance for replacement costs. (Id. at 22, 30). According to

Booker, even on an ACV basis, Plaintiffs would be entitled to the policy limits, and any

additional losses would not make a difference as far as his job was concerned. (Id. at 87, 104).

The engineer hired by TWIA agreed with his estimate, although the engineer thought there was

more damage than Booker did. (Id. at 117-118). However, the engineer’s view also did not make

a difference because the damages exceeded the policy limits anyway. (Id. at 118).

12. Hal Arnold was an adjuster with Adjusters International. Flagship hired him to

testify in the case (Exhibit 3 at 44). He did not do an independent evaluation of the damages, but

simply reviewed the estimates from several other adjusters. (Id. at 8). He did not go out and

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inspect the hotel to form his opinion3, but he was retained to look at information from other

witnesses to determine the damages when the hurricane hit the property. (Id. at 9). He testified

that RCV is the cost to do the repair work without a deduction for depreciation. (Id. at 12). ACV

is the RCV less the depreciation. (Id.).

13. Arnold reviewed a report from Larry Couvillon that had the cost of repair at about

$9.24 million and an ACV of about $8.6 million. (Id. at 19, 21); see also (PX 79, Exhibit 8

hereto; Exhibit 3 at 68-69). Arnold agreed that Flagship’s first choice of expert was Gene

Stilwell, and that Stilwell reached an incomplete figure of $5.2 million in damages. (Id. at 54-

55). Arnold concluded that the RCV was $3.68 million, although he did not state this figure was

a reasonable and necessary cost to do the repairs. (Id. at 41, 86). He stated that the ACV was $2.8

million, although he again did not state that the figure was based on a reasonable and necessary

cost to repair. (Id. at 43, 86). He did not come up with any numbers on his own. He simply used

what everybody else saw that was on the property. (Id. at 59). See also (Id. at 60)(“All I did was

review what everybody else that went out there did.”).4

14. Richard Clark was retained by Flagship to act as an expert witness in this case.

(Exhibit 7 at 4). Although Clark was not asked to testify about the damage to the property, he

admitted that wind storm insurance is usually based on replacement costs for the property. (Id. at

19). The policy had a replacement cost coverage endorsement. (Id. at 44). The replacement cost

endorsement in the policy allowed the property to be replaced with a new structure, as opposed

to having the claim depreciated. (Id. at 46). A new structure was ultimately built on the premises

– The Galveston Island Historic Pleasure Pier.

3
In fact, the hotel had been torn down before he was even retained as an expert.
4
Plaintiffs filed a motion to strike the testimony of Hal Arnold that was denied by the trial court before Judge
Slaughter took the bench. Plaintiffs reserve their right to challenge the order denying the motion to strike in a motion
for new trial or on appeal.

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Exhibits

15. Attached are the following exhibits for the Court’s convenience:

(1) Email dated August 6, 2013 after the first charge conference with a copy
of the charge as initially approved by the Court;

(2) Question 4 to the jury as submitted by the Court;

(3) Excerpts from the trial testimony of Hal Arnold;

(4) Excerpts from the trial testimony of Gene Stilwell;

(5) Excerpts from the trial testimony of Richard Booker;

(6) Excerpts from the trial testimony of Larry Brown;

(7) Excerpts from the trial testimony of Richard Clark; and

(8) Larry Couvillon estimate regarding RCV and ACV (PX 79).

Argument and Authorities

16. The evidence from the expert witnesses who testified about the damages compels

the following conclusions:

• The insurance policy provided for replacement costs.

• The two public adjuster witnesses that inspected the property immediately after

the storm said the cost of repair exceeded $4.2 million. They stopped their review when it

became clear that the loss exceeded the policy limits. Brown, who inspected the property at the

same time as the public adjusters, testified that the reasonable and necessary RCV was about $10

million. Arnold, who never inspected the property, said that the RCV was $3.68 million,

although he did not say that the figure was based on the reasonable and necessary cost to do the

repair which makes that testimony fatally defective. Mustang Pipeline Co. v. Driver Pipeline

Co., 134 S.W.3d 195 (Tex. 2004). Of course, Arnold simply “looked at what other people saw,

and used their opinion and their figures.”)(Exhibit 3 at 59-60). His use of a computer program

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“Exactimate” does not cure his failure to testify about reasonable and necessary costs. McGinty

v. Hennen, 372 S.W.3d 625 (Tex. 2012)(estimate based on Exactimate does not establish cost of

repair was reasonable); contra (Exhibit 6 at 68)(Brown testified about reasonable and necessary

cost of repair).

• Arnold said that the ACV was $2.8 million, which is the RCV less depreciation.

Once again, he did not state that the predicate RCV was reasonable and necessary which makes

this testimony legally insufficient. (Id.).

• The hotel property was repairable.

17. There are two separate and independent reasons why the Court should not enter

judgment on the jury answer to Question 4. First, Flagship convinced the Court that the Court

should submit the question to ask for a measure of damages that was not correct. Second, there is

no evidence to support the jury answer, regardless of the measure of damages.

18. The Court’s submission: The Court should have submitted the question pursuant

to the discussion at the first charge conference. (Exhibit 1). That question was submitted in

proper form, and asked the jury to decide what amount of damages, if any, were reasonable and

necessary to put the hotel in the condition it would have been immediately prior to the storm.

(Id.).

19. The proper measure of damages when a claim involves injury to improvements to

real property is the reasonable cost of repairs necessary to restore property to its prior condition.

Moren v. Pruske, 570 S.W.2d 442 (Tex. Civ. App. – San Antonio 1978, writ ref’d n.r.e). See

Celanese Ltd. v. Chemical Waste Management, 75 S.W.3d 593, 598 (Tex. App. – Texarkana

2002, pet. denied)(“The case law clearly provides that, where property has sustained damage

which diminishes its fair market value, the cost of repairing or restoring the property to its full

market value is an appropriate measure of damages.”); Samuel v. KTVU Partnership, 2003 WL

7
22405384 *1 (Tex. App. – El Paso 2003, no pet.)(“Texas courts have recognized that the proper

measure of damages when the injury to realty is repairable is the reasonable cost of repairs

necessary to restore the property to its prior condition.”); Ashford Partners v. ECO Resources,

401 S.W.3d 35, 40 (Tex. 2012)(the cost of repair is the appropriate measure of damages to

remedy an omitted item on a substantially completed building). Uvalde County v. Barrier, 710

S.W.2d 740 (Tex. App. – San Antonio 1986, no writ)(when property is repairable, the proper

measure of damages is the reasonable cost of repairs necessary to restore the property to its prior

condition); Mesquite Elks Lodge v. Shaikh, 334 S.W.3d 319 (Tex. App. – Dallas 2010, no

pet.)(Court reverses judgment because Plaintiff did not present factually sufficient evidence of

cost to restore property to prior condition). The Flagship Hotel here was repairable. (Exhibit 6 at

100)(hotel itself was completely repairable because structure was in good shape).

20. By submitting the question with the incorrect measure of damages, the Court

essentially asked the jury to decide what that measure should be, ACV or RCV. However, it was

the Court’s duty to instruct the jury on the correct measure of damages, and not leave that

decision to the jury. Bowen v. Robinson, 227 S.W.3d 86 (Tex. App. – Houston [1st Dist.] 2006,

pet. denied)(if plaintiff pleads and proves the facts necessary to establish the cause of action, the

court must properly instruct the jury on the measure of damages); Abraxas Petroleum Corp. v.

Hornburg, 20 S.W.3d 741 (Tex. App. – El Paso 2000, no pet.)(proper measure of damages is

question of law for the Court); Jim Howe Homes v. Rogers, 818 S.W.2d 901 (Tex. App. – Austin

1991, no writ)(Court’s charge should limit the jury’s consideration by an instruction on the

proper legal measure of damages).

21. Flagship lead the Court into reversible error by asking the Court to instruct the

jury on an improper measure of damages and then letting the jury decide what measure was

appropriate.

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22. The jury’s answer: There is no evidence to support the jury verdict even if the

Court instructed the jury correctly. The jury found that Plaintiffs’ damages for Flagship’s failure

to comply with the lease agreement was about $250,000. (Exhibit 2). The Court specifically told

the jury to consider RCV or ACV as the elements of damages, and none other. (Id.). No witness

testified that either the reasonable and necessary cost to repair, ACV or RCV was anywhere near

that figure. The lowest number for ACV was $2.8 million, and the lowest number for RCV was

$3.68 million, although both those numbers are legally insufficient evidence because the expert

did not say the numbers reflected reasonable and necessary repair costs. Otherwise, the only

complete and competent evidence was an RCV of about $10 million because the two public

adjusters stopped counting at $4.2 million and $5.2 million. Regardless, the number awarded by

the jury was less than 10% of any proper or improper ACV or RCV number.

23. The jury may not arbitrarily assess an amount neither authorized nor supported by

the evidence presented at trial. First State Bank v. Keilman, 851 S.W.2d 914 (Tex. App. - Austin

1993, writ denied); Dunnagan v. Watson, 204 S.W.3d 30 (Tex. App. – Fort Worth 2006, pet.

denied). The jury has some discretion if the jury award is within a range of values as opposed to

two separate options, but the jury may not fix an amount of damages that is neither fair nor just.

Citizens National Bank of Texas v. NXS Construction, 387 S.W.3d 74 (Tex. App. – Houston [14th

Dist.] 2012, no pet.); Waterways on Intercoastal v. State, 283 S.W.3d 36 (Tex. App. – Houston

[14th Dist.] 2009, no pet.).

24. The number awarded by the jury here was nowhere near the range of numbers in

the evidence submitted by the parties even if the jury was allowed to consider Arnold’s

testimony. The jury was given two options, although in error, but the number awarded did not

fall within a range of values supported by the evidence presented for either option.

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25. The parties and the Court may not speculate on how the jury arrived at its award.

Drury Southwest v. Louie Ledeaux, 350 S.W.3d 287 (Tex. App. – San Antonio 2011, pet.

denied). See Spring Creek Village v. General Star Indemnity, 261 S.W.3d 206 (Tex. App. –

Houston [14th Dist.] 2008, no pet.)(however plausible a party’s theory of the jury’s analysis may

be, the jury’s reasons for reaching a particular award are irrelevant in the absence of jury

misconduct); Missouri Pacific Railroad Co. v. Roberson, 25 S.W.3d 251 (Tex. App. – Beaumont

2000, no pet.)(Court refuses to consider jury’s reasoning in arriving at an allegedly excessive

award); Vela v. Wagner & Brown, 203 S.W.3d 37 (Tex. App. – San Antonio 2006, no pet.)(Court

should not consider jury’s mental processes in determining amount of damages).

26. Here, neither the Court nor the parties know or should know why the jury made

the particular award in Question 4. All we know is that the number finds no support in the

evidence in a range of values for reasonable cost to repair, ACV or RCV, although the only

competent and complete testimony was on RCV alone, and that number was about $10 million.

The Court should not enter judgment on the jury’s answer to Question 4 because both the form

of the submission and the answer were legally defective. Either defect is sufficient to prevent

entry of a judgment on this verdict.5

5
To the extent that Flagship tries to explain the jury’s answer to Question 4 by using Booker’s ACV number and the
amounts paid by insurance, that explanation fails for several reasons: (1) the Court should not try to interpret why
the jury reached the decision it did; (2) the Court specifically directed the jury to consider ACV and RCV as the
elements of damages and none other; (3) the numbers may be relatively close but not close enough; (4) the evidence
is undisputed that Booker did not give a complete number for repair costs; he stopped after he realized his estimate
would exceed the available limits of the TWIA insurance policy under any scenario. As a result, his testimony about
admittedly incomplete repair costs as a part of the jury’s calculation would not be relevant or reliable; and (5) no
one, except the jury, knows why the jury did what it did. The Court and the parties should not speculate otherwise.

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Respectfully submitted,

SHEEHY, WARE & PAPPAS, P.C.

By:
James L. Ware
State Bar No. 20861800
R. Edward Perkins
State Bar No. 15790410
909 Fannin Street Suite 2500
Houston, Texas 77010-1003
Telephone: (713) 951-1000
Facsimile: (713) 951-1199

Attorneys for Plaintiffs

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the above and foregoing instrument has
been forwarded to counsel of record in accordance with the Texas Rules of Civil Procedure on
the 10th day of January 2014.

R. Edward Perkins

2126386

11
From: Richard Sheehy
Sent: Tuesday, August 06,20135:07 PM
To: 'Michelle.Slaughter@co.galveston.tx.us'
Cc: Christopher L. Johnson; 'mjohnson@jdkglaw.com'; Ed Perkins; James L. Ware
Subject: Cause No. 06·CV·1286; Landry's Restaurants v. The Flagship Holel
Attachments: FLAGSHIP_Jury charge 8_6_13.DOC

Your Honor: attached is a copy of the Jury Charge as amended after the informal charge conference this afternoon. I am
sending a copy to all counsel.

If you have any questions, please let me know. Regards.

$I:¥EEI-IY, WARE & PAPPAS, P.e.
RICHARD A. SHEEHY
SIIAR( HOLDER

Tel 713.951-1111 909 Fannin S(rcel
Fox 713·951-1199 Suil.25M
rshnohy@shoehywi!re.com Houslon. TOX3S 11010

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EXHIBIT 1
NO.08CV1286

LANDRY'S RESTAURANTS, INC. § IN THE DISTRICT COURT OF
AND WILLIE G'S POST OAK, INC., §
§
VS. § GALVESTON COUNTY, TEXAS
§
THE FLAGSHIP HOTEL, LTD. §
AND FLAGSHIP HOSPITALITY, INC. § 405,h JUDICIAL DISTRICT

CHARGE OF THE COURT

MEMBERS OF THE JURY:

After the closing arguments, you will go to the jury room to decide the case, answer the
qllestions that are attached, and reach a verdict. You may discuss the case with other jurors only
when you are all together in the j\ll')' room.

Remember my previous instmctions: Do not discuss the case with anyone else, either in
person or by any other means. Do not do any independent investigation about the case or conduct
any research. Do not look up any words in dictionaries or on the Internet. Do not post
information about the case on the Internet. Do not share any special knowledge or experiences
with the other jurors. Do not use your phone or any other electronic device during your
deliberations for any reason. I will give you a number where others may contact you in case of
an emergency.

Any notes you have taken are for your own personal use. You may take your notes back
into the jUl')' room and consult them during deliberations, but do not show or read your notes to
your fellow jurors during your deliberations. Your notes are not evidence. Each of you should
rely on your independent recollection of the evidence and not be influenced by the fact that
another juror has or has not taken notes.

You must leave your notes with the bailiff when you are not deliberating. The bailiff will
give your notes to me promptly after collecting them from you. I will make sure your notes are
kept in a safe, secure location and not disclosed to anyone. After you complete your
deliberations, the bailiff will collect your notes. When you are released from jury duty, the bailiff
will promptly destroy your notes so that nobody can read what you wrote.

Here are the instmctions for answering the questions.

I. Do not let bias, prejudice, or sympathy play any part in your decision.

2. Base your answers only on the evidence admitted in comt and on the law that is in
these instmctions and questions. Do not consider or discuss any evidence that was not admitted
in the comtroom.
3. You are to make up your own minds about the facts. You are the sole judges of
the credibility of the witnesses and the weight to give their testimony. But on matters of law, you
must follow all of my instructions.

4. If my instmctions use a word in a way that is different from its ordinary meaning,
use the meaning I give you, which will be a proper legal definition.

5. All the questions and answers are impOitant. No one should say that any question
or answer is not important.

6. Answer "yes" or "no" to all questions unless you are told otherwise. A "yes"
answer must be based on a preponderance of the evidence. Whenever a question requires an
answer other than "yes" or "no," your answer must be based on a preponderance of the evidence.

The term "preponderance of the evidence" means the greater weight of credible evidence
presented in tltiscase. If you do not find that a preponderance of the evidence SUPpOltS a "yes"
auswer, then answer "no." A preponderance of the evidence is not measured by the number of
witnesses or by the number of documents admitted in evidence. For a fact to be proved by a
preponderance of the evidence, you must find that the fact is more likely tme than not truc.

7. Do not decide who you think should win before you answer the questions and
then just answer the questions to match yoUI' decision. Answer each question carefully without
considering who will win. Do not discuss or consider the effect your answers will have.

8. Do not answer questions by drawing straws or by any method of chance.

9. Some qnestions might ask you for a dollar amount. Do not agree in advance to
decide on a dollar amount by adding up each juror's amount and then figuring the average.

10. Do not trade your answers. For example, do not say, "I will answer this question
your way if you answer another question my way."

11. The answers to the questions must be based on the decision of at least 10 of the 12
jmors. The same 10 jurors must agree on every answer. Do not agree to be bound by a vote of
anything less than 10 jurors, even ifit would be a majority.

As I have said before, if you do not follow these instmctions, you will be guilty of juror
misconduct, and I might have to order a new trial and start this process over again. This would
waste your time and the parties' money, and would require the taxpayers of this county to pay for
another triaL If a juror breaks any of these mles, tell that person to stop and report it to me
immediately.

In answering questions about damages, answer each question separately. Do not increase
or reduce the amount in one answer because of your answer to any other question about
damages. Do not speculate about what any party's ultimate recovery mayor may not be. Any

2
recovery will be determined by thc court whcn it applics the law to your answers at the time of
judgment.

A fact may be established by direct evidence or circumstantial cvidence or both. A £1ct is
cstablished by direct evidence when proved by documentary evidencc or by witnesses who saw
thc act done or heard the words spoken. A fact is established by circumstantial evidence when it
may be fairly and reasonably infelTed from othcr facts provcd.

"Landry's" shall meall Landry's Restaurants, Inc. and Willie G's Post Oak, Inc.

"The Flagship Hotel" shall mean The Flagship Hotel, Ltd. and Flagship Hospitality, Inc.

The term "Lease Agreement" means the May 20, 1963 lease between the City of
Galveston and Nide Corp. and all subsequent amendments, including the Second Amcndment to
the Lease and the December 14, 2004 settlement agreement between Landly's and Flagship.

3
Question 1

Did The Flagship Hotel fail to comply with section 12.02 of the Lease Agreement that
required The Flagship Hotel to obtain insmance coverage for property damage to the leased
premises caused by a hmricane, rising water, or general water and storm casualties for an amount
of not less than $10 million or to the maximum extent that such insurance coverage was
reasonably obtainablc?

Answer '~Yes" or "No. n

Answer: ~~~~~

4
Question 2

Was The Flagship Hotel's failure to pay rent required by the Lease Agreement excused?

The Flagship Hotel's failure to pay the rent required under the Lease Agreement was
excused if Landry's constructively evicted The Flagship Hotel from the leased premises.

Landry's constructively evicted The Flagship Hotel from the leased premises if:

(I) Landry's intended that The Flagship Hotel no longer use or enjoy the leased
premises; and

(2) Landry's made a material act or omission that substantially interfered with the
Flagship Hotel's use and enjoyment of the leased premises; and

(3) The Flagship Hotel was permanently deprived of the use and enjoyment of the
leased premises; and

(4) The Flagship Hotel abandoned the leased premises within a reasonable time after
Landry's' interference.

Acts or omissions permitted by the Lease Agreement cannot be constructive eviction.

In answering this question, you should consider only Landry's acts or omissions with
respect to the repair and maintenance of the pier.

Ans\ver "Yes" or "No.})

Answer: _

5
If you have answered "Yes" to Question I, please answer Question 3; otherwise, do not
answer Question 3.

Question 3

What amount of insurance coverage for property damage to the leased premises caused
by a hurricane, rising water, or general water and storm casualties should The Flagship Hotel
have obtained uncleI' the Lease Agreement?

Answer in dollars and cents if any.

Answer: - - - - - - -

6
If you have answered "Yes" to Question I, please answer Question 4; otherwise, do not
answer Question 4.

Question 4

What sum of money, if any, if paid now itlcash, wO\lld have been reasonable aud
necessary to put The Flagship Hotel back to its condition immediately before the hurricane?

Do not add any amount for interest on such SUIll, if any.

Do not include in your answer any amount that you find Landry's could have avoided by
the exercise of reasonable care.

Answer in dollars and cents, if any.

Answer: _

1
Prcsiding Juror:

1. When you go into the jury room to answer the qllestions, the first thing you will
need to do is choose a presiding juror.

2. The presiding juror has these duties:

a. have the complete charge read aloud if it will be helpful to your
deliberations;

b. preside over your deliberations, meaning manage the discussions, and see
that you follow these instructions;

c. give written questions or comments to the bailiff who will give them to the
judge;

d. write down the answers you agree on;

e. get the signatmes for the verdict certificate; and

f notifY the bailiff that you have reached a verdict.

Do you understand the duties of the presidingjmor? If you do not, please tell me now.

Instructions for Signing thc Verdict CC1·tificate:

1. Unless otherwise instructed, you may answer the questions on a vote of 10 jurors.
The same 10 jurors must agree on every answer in the charge. This means you may not have one
group of 10 jurors agree on one answer and a different group of 10 jurors agree on another
answer.

2. If 10 jurors agree on every answer, those 10 jurors sign the verdict.

If 11 jurors agree on every answer, those 11 jurors sign the verdict.

If all 12 of you agree on every answer, you are unanimous and only the presiding juror
signs the verdict.

3. All jurors should deliberate on every question. YoUlllay end up with all 12 of you
agreeing on some answers, while only 10 of you agree on other answers. But when you sign the
verdict, only those 10 who agree on every answer will sign the verdict.

8
Do you understand these instructions? [f you do not, please tell me now.

Judge Presiding

Verdict Certificate

Check one;

Our verdict is \lllanimous. All 12 of us have agreed to each and every answer. The
presiding juror has signed the certificate for all 12 of us.

Signature of Presiding Juror Printed Name of Presiding Juror

_ _ Our verdict is not unanimous. Ten or eleven of us have agreed to each

Case Info

Judge

Slaughter, Michelle Track Judge’s New Case

Case No.

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Document Filed Date

January 10, 2014

Case Filing Date

December 30, 2008

County

Parties

Anderson, Rick Attorney for the Defendant
Evergreen General Agency, Inc. Defendant
Flagship Hospitality, Inc., Cross Plaintiff/petitioner
Flagship Hospitality, Inc., Defendant
Flagship Hotel, Ltd., The, Cross Plaintiff/petitioner
Flagship Hotel, Ltd., The, Defendant
Johnson, Christopher L. Attorney for the Defendant
Johnson, Millard A. Attorneys for Defendants
Johnson, Millard A. Attorney for the Defendant
Landry'S Restaurants, Inc., Cross Defendant/respondent
Landry'S Restaurants, Inc., Plaintiff
Ware, James L. Attorneys for Plaintiffs
Ware, James L. Attorney for the Plaintiff
Willie G'S Post Oak, Inc., Cross Defendant/respondent
Willie G'S Post Oak, Inc., Plaintiff
Robert Perkins Attorneys for Plaintiffs
Sara Sherman Attorneys for Defendants
Gregg Weinberg Attorneys for Defendants
Frank Carroll Attorneys for Defendants
Charles Waites Attorneys for Defendants
Callie Murphy Attorneys for Plaintiffs

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Motion-Secondary: LANDRY'S RESTAURANTS, INC., ET AL VS. FLAGSHIP HOTEL, LTD., THE, ET AL

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Case Info

Parties