The Texas Court of Appeals has upheld a default judgment against Jose A. Castilla, who was found liable for breaching a lease guaranty agreement with W&C Investments, LLC. The court's decision, issued on June 26, 2026, confirms that Castilla is responsible for damages and attorney's fees totaling over $151,000. This ruling affects Castilla and W&C Investments, as it clarifies the responsibilities of guarantors in lease agreements.
The case, docket number 03-25-00845-CV, originated in the 98th District Court of Travis County. W&C Investments leased office space to a company called Dizfruta Atx, LLC, in which Castilla co-signed a lease and guaranteed the company's obligations. The court's ruling emphasizes the importance of adhering to lease agreements and the consequences of failing to fulfill such obligations.
Background
W&C Investments, LLC, is a property management company that leased office space to Dizfruta Atx, LLC, in 2019. Jose A. Castilla co-signed the lease and signed a Personal Guarantee, which made him responsible for ensuring that Dizfruta fulfilled its lease obligations. In 2020, the parties amended the lease to include additional office space. The amendment specified that the original guaranty would still apply to the new lease terms.
In November 2024, W&C Investments sent demand letters to both Dizfruta and Castilla, seeking over $145,000 in unpaid rents and additional costs due to unauthorized modifications made by Dizfruta to the leased premises. After receiving no response, W&C filed a lawsuit against Castilla in December 2024, asserting that he breached the Guaranty Agreement. Castilla did not respond to the lawsuit, leading W&C to request a default judgment.
The Ruling
The Texas Court of Appeals ruled in favor of W&C Investments, affirming the trial court's decision to grant a no-answer default judgment against Castilla. The court found that W&C had provided sufficient evidence to support the judgment, including affidavits detailing the damages incurred due to the breach of the lease agreement. Justice Rosa Lopez Theofanis, along with Chief Justice Byrne and Justice Crump, presided over the ruling.
The court stated, "The Guaranty applies to the Amendment... sufficient evidence supported the default judgment."
The court determined that Castilla had met the jurisdictional requirements for a restricted appeal but failed to demonstrate that any error was apparent on the face of the record. The court concluded that the Guaranty Agreement extended to the amended lease, making Castilla liable for the amounts owed under that agreement.
Impact
This ruling reinforces the legal principle that guarantors are responsible for the obligations outlined in lease agreements, including amendments. The court's decision clarifies that even if a lease is modified, the original guaranty can still apply, which could have significant implications for future lease agreements and guarantors in Texas.
The case also highlights the importance of responding to legal actions. Castilla's failure to answer the lawsuit resulted in a default judgment, which is a reminder for individuals and businesses to take legal notices seriously. This ruling may encourage other landlords and property management companies to pursue legal action more aggressively against guarantors who fail to fulfill their obligations.
What's Next
Details were not available in the court filing regarding whether Castilla plans to appeal the decision further. There are no related cases pending at this time.