HOUSTON - The Supreme Court of Texas ruled in favor of AZA’s client in a dispute over appraisals and the eventual rent for space at the Bank of America Center in downtown Houston. The high court reversed and remanded the case to the trial court.
At issue was whether a third-party appraiser hired as a neutral had a duty to disclose that one of the parties had contacted him about being that party’s appraiser before he was called upon to be the neutral appraiser. The high court overturned a First Court of Appeals opinion that this failure to disclose was immaterial.
AZA’s Daryl Moore and Kelsi Stayart White represented the landlord that now can go back to the Harris County trial court where the case had been dismissed on summary judgment. They worked with Tom Phillips at Baker Botts.
The third-party appraiser was named because landlord and tenant could not agree on the fair market value for a rent increase. The estimates by the parties’ individual appraisers were $6 million apart, largely because the landlord’s appraiser added value because of a connection to the downtown tunnel system, and the tenant’s appraiser did not. Their rental agreement called for them to agree on a neutral appraiser to decide.
The case went to court when the landlord sued for a declaratory judgment and the tenant countersued to enforce its appraiser’s lower estimate.
The Supreme Court found that the undisclosed relationship “may present the appearance of bias to an objective observer.” It found that the undisclosed fact was substantive because more than just the appraiser’s availability and timing had been discussed.
The case is Kevin Burke et al. V. Houston PTBAC Office Limited Partnership (Bank of America) case number 24-0135 in the Supreme Court of Texas.
AZA, or Ahmad, Zavitsanos & Mensing, is a Houston-based law firm that is home to true courtroom lawyers with a formidable track record in complex commercial litigation, including energy, healthcare, intellectual property and business dispute cases. AZA was recognized again by Chambers USA 2025 as among the best in Texas in commercial law and intellectual property; the firm has been listed by Best Lawyers’ Best Law Firms as one of the country’s best commercial litigation firms for 14 years; has been named Litigation Department of the Year by Texas Lawyer three times; and was dubbed a Texas Powerhouse law firm by Law360.