Anglo-Dutch Petroleum Int., Inc. (Tex.App.- Houston [14th Dist.] Jul. 23, 2009)
(breach of contract claim, counterclaims for breach of fiduciary duty, conversion, estoppel, unjust
enrichment, breach of the duty of good faith and fair dealing, fraud, negligent misrepresentation, constructive
fraud, money had and received, assumpsit, quantum meruit, and constructive trust.
AFFIRMED: Opinion by Justice Brock Yates
Before Justices Brock Yates, Guzman and Sullivan
14-07-00959-CV Gerald M. Walston, Ben C. Morris and William L. Childress v. Anglo-Dutch Petroleum
(Tenge L.L.C., Anglo-Dutch Petroleum International, Inc. and Scott V. Van Dyke
Appeal from 157th District Court of Harris County
Trial Court Judge: Randy Wilson
Affirmed and Memorandum Opinion filed July 23, 2009.
In The
Fourteenth Court of Appeals
____________
NO. 14-07-00959-CV
____________
GERALD M. WALSTON, BEN C. MORRIS, AND WILLIAM L. CHILDRESS, Appellants
V.
ANGLO-DUTCH PETROLEUM (TENGE) L.L.C., ANGLO-DUTCH PETROLEUM INTERNATIONAL, INC., AND
SCOTT V. VAN DYKE, Appellees
On Appeal from the 157th District Court
Harris County, Texas
Trial Court Cause No. 2005-07377
M E M O R A N D U M O P I N I O N
This is a breach of contract case. The trial court granted summary judgment against appellants Gerald
Walston, Ben Morris, and William Childress and ordered that they take nothing on all of their claims against
appellees Anglo-Dutch Petroleum (Tenge) L.L.C. (“ADT"), Anglo-Dutch Petroleum International (“ADPI"), and
Scott V. Van Dyke. In five issues, appellants claim the trial court erred in granting summary judgment and in
admitting portions of Van Dyke's affidavit testimony. We affirm.
I. Background
Appellants prepared a feasibility study of a Kazakhstani oil and gas field (“the Tenge field") based upon a
data package purchased by their employer, ADPI. The study revealed promise in the Tenge field, and ADT
formed Tenge Development L.L.C. (“TDL"), a group of investors. TDL acquired an interest in Anglo-Dutch
(Kazakhtenge) L.L.C. (“ADK"), another group of investors. To develop the Tenge field, ADK formed a joint
enterprise (“the TJE") with a Kazakhstani oil association. Thus, ADPI acquired an interest in the TJE through
ADT because ADT holds an interest in TDL, TDL holds an interest in ADK, and ADK is a member of the TJE.
Appellants were paid a salary by ADPI and also entered into Net Profits Agreements (“the Agreements") with
ADT as additional compensation. The Agreements required appellants to meet cash calls from ADT for
general and administrative costs of the companies in the distribution structure described above in return for
a percentage of the net profits ADT received “substantially" from TJE “operations." The parties do not
dispute that appellants met their obligations under the Agreements, but argue over the scope of appellants'
net profits interest.[1]
Sometime after entering into the Agreements, appellees attempted to acquire a majority interest in the TJE.
Seeking new investment, appellees gave Halliburton and other companies (“Halliburton") access to
confidential information on many aspects of the
Tenge field and the TJE. Halliburton leaked the confidential information to third-party companies who then
bought the TJE majority interest sought by appellees. ADT and ADPI sued Halliburton and the third party
companies for lost profits stemming from their breach of confidentiality. ADT and ADPI prevailed at trial and
ultimately settled with Halliburton. Van Dyke, as President of ADPI (the administrative member of ADT),
allocated all of the settlement proceeds to ADPI.
Seeking a portion of the Halliburton settlement proceeds, appellants filed a motion to compel arbitration
pursuant to the terms of their various contracts. Appellees then brought a declaratory judgment action,
asking the trial court to declare that (1) ADPI and Van Dyke had not entered into the contracts with
appellants and were therefore not liable to them, and (2) that unsatisfied conditions precedent precluded
ADT's duty to perform under the contracts. Appellants counterclaimed, asking the trial court to declare that
(1) ADPI and Van Dyke were proper parties to the suit, and (2) that the contracts entitled appellants to an
accounting and profits from the settlement proceeds. Appellants also counterclaimed for breach of contract,
breach of fiduciary duty, and various extra-contractual claims. Appellees moved for summary judgment on
traditional and no evidence grounds. Appellants responded and also challenged the admissibility of portions
of Van Dyke's affidavit. The trial court overruled appellants' evidentiary objection, granted appellees'
summary judgment motion, and entered final judgment dismissing appellants' counterclaims and declaring
that appellees have no liability to appellants. This appeal followed.
II. Summary Judgment
In their second issue and subissue one of their fifth issue, appellants challenge the trial court's grant of
appellees' summary judgment as to their declaratory judgment and breach of contract claims. In reviewing a
traditional summary judgment, we take as true all evidence favorable to the non-movant, and we make all
reasonable inferences in the non-movant's favor. Ortiz v. Collins, 203 S.W.3d 414, 419-20 (Tex. App.-
Houston [14th Dist.] 2006, no pet.). If the movant's motion and summary-judgment evidence facially establish
its right to judgment as a matter of law, the burden shifts to the non-movant to raise a genuine issue of
material fact sufficient to defeat summary judgment. Hirschfeld Steel Co. v. Kellogg Brown & Root, Inc., 201
S.W.3d 272, 277 (Tex. App.- Houston [14th Dist.] 2006, no pet.). In a Rule 166a(i) no-evidence summary
judgment, the movant represents that no evidence exists as to one or more essential elements of the non-
movant's claims, upon which the non-movant has the burden of proof at trial. See Tex. R. Civ. P. 166a(i).
The non-movant must then present evidence raising a genuine issue of material fact on the challenged
elements. See id. A fact issue exists if the evidence “rises to a level that would enable reasonable and fair-
minded people to differ in their conclusions." King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex.
2003) (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997)). If the evidence does
no more than create a mere surmise or suspicion of fact, less than a scintilla of evidence exists, and
summary judgment is proper. See Transp. Ins. Co. v. Faircloth, 898 S.W.2d 269, 282 (Tex. 1995); Macias v.
Fiesta Mart, Inc., 988 S.W.2d 316, 317 (Tex. App.- Houston [1st Dist.] 1999, no pet.). A respondent is not
required to marshal its proof to defeat a no-evidence motion for summary judgment; it need only point out
evidence raising a fact issue on the challenged elements. Tex. R. Civ. P. 166a(i) cmt. (1997). When, as
here, a trial court's order granting summary judgment does not specify the grounds upon which it relied, we
must affirm the summary judgment if any of the summary judgment grounds are meritorious. FM Props. Op.
Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000).
A. Construction of the Agreements
In their second issue, appellants claim the trial court erred to the extent it granted summary judgment based
on appellees' claim that unsatisfied conditions precedent contained in the Agreements precluded appellants'
rights to a portion of the settlement proceeds. Specifically, appellants contend that the Agreements do not
impose conditions precedent to their recovery of a portion of the settlement proceeds, but that even if they
impose conditions precedent, performance of those conditions should be excused under various theories.
In construing a contract, our primary concern is to ascertain and give effect to the intentions of the parties as
expressed therein. Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998). To
ascertain the parties' true intentions, we examine the entire contract in an effort to harmonize and give effect
to all of its provisions so none will be rendered meaningless. MCI Telecomms. Corp. v. Tex. Utils. Elec. Co.,
995 S.W.2d 647, 652 (Tex. 1999). Whether a contract is ambiguous is a question of law for the court.
Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). A contract is ambiguous when its
meaning is uncertain and doubtful or is reasonably susceptible to more than one interpretation. Id.
However, when a written contract is worded so that it can be given a certain or definite legal meaning or
interpretation, it is unambiguous, and the court construes it as a matter of law. See Am. Mfrs. Mut. Ins. Co. v.
Schaefer, 124 S.W.3d 154, 157 (Tex. 2003).
Because of their harshness in operation, conditions precedent are not favored in the law. Hirschfeld Steel
Co., 201 S.W.3d at 281. To make performance specifically conditional, a term such as “if," “provided that,"
“on condition that," or some similar phrase of conditional language normally must be included. Id. If no such
language is used, the terms typically will be construed as a covenant in order to prevent a forfeiture. Id.
Though there is no requirement that such phrases be utilized, their absence is probative of the parties'
intention that a promise be made, rather than a condition imposed. Id. In construing a contract, forfeiture by
finding a condition precedent is to be avoided when another reasonable reading of the contract is possible,
when the intent of the parties is doubtful, or when a condition would impose an impossible or absurd result.
Criswell v. Eur. Crossroads Shopping Ctr., Ltd., 792 S.W.2d 945, 948 (Tex. 1990); Hirschfeld Steel Co., 201
S.W.3d at 281; see also Hohenberg Bros. Co. v. George E. Gibbons & Co., 537 S.W.2d 1, 3 (Tex. 1976).
However, Texas courts have recognized that:
[a] contract or promise to pay may be restricted to a particular fund, so as to make the raising . . . of the fund
a condition precedent to the liability, and in such case the promise cannot be enforced until the fund is
realized . . . [s]o [that] where the contract . . . [states] that the creditor shall look to a particular fund, he
cannot, on the failure of such fund not attributable to the fault of the debtor, hold the debtor personally
responsible.
City of Seymour v. Mun. Accept. Corp., 96 S.W.2d 814, 816 (Tex. App.- Dallas 1936, writ dism'd by
agreement) (quoting 13 C.J. 631, § 701) (holding that contract with city limiting source of payment to net
revenues of light plant created a condition precedent to city's liability where the contract stated the debt was
“payable only from the revenues of the Light Plant"); see also Clear Lake City Water Auth. v. Kirby Lake
Dev., 123 S.W.3d 735, 745 (Tex. App.- Houston [14th Dist.] 2003, pet. denied) (citing City of Seymour and
holding that where contract only obligated city to repay contractor with bond funds approved by voters for
that particular purpose, contractor could not look to other funds discussed in contract for payment);
McWilliams v. Gilbert, 715 S.W.2d 761, 763B64 (Tex. App.- Houston [1st Dist.] 1986, no writ) (holding that
indemnity agreement unambiguously restricted general partners' reimbursement from partner to designated
specific source).
Though we construe the contract as a whole, the following excerpts from the Agreements are particularly
pertinent to our analysis:
2. Obligations
[ADT] hereby grants, conveys and assigns to [appellants] an interest in the net profits of [ADT] earned
substantially from operations conducted by the [TJE] (a “Net Profits Interest"), which shall be equivalent to
the following membership interests in ADK from time to time:
(i) Before: Payout/TDL, Payout/Delcon, Payout/NIR, Payout/OPIC: 0[]%
(ii) After: Payout/TDL; and Before: Payout/Delcon, Payout/NIR, Payout/OPIC: 0.095635040%
. . .
The above terms for "Payout" are defined in the Limited Liability Company Agreement of TDL. Exhibits 1-5
show the Net Profits Interest of Walston from time to time.
The Limited Liability Company Agreement of TDL defines “Payout/TDL" as follows:
“Payout/TDL" shall occur at such time as each Member shall receive, solely from its Interest in the net
distributable proceeds of reimbursements pursuant to the Distribution Agreement (defined as “Final Amount"
in the Disbursement Agreement) and/or proceeds ultimately resulting from the [TJE] operations, an amount
equal to the moneys expended or incurred by such members and their respective predecessor-in-interest
pursuant to the Study Group Agreement, as noted in Section 4.03 (a), (d), (e), and (f), as adjusted pursuant
to Sections [sic] 4.03(g). Such amounts shall constitute the return to the Members of preformation
expenditures under Treas. Reg. § 1.707-4(b). (Italics omitted).
The Net Profits Agreements continue in relevant part as follows:
4. Terms of Net Profits Interest
[T]he Net Profits Interest is exclusively an interest in net profits, as herein defined, and [appellants] shall look
exclusively to revenues earned by the [TJE] and distributed ultimately to [ADT] through ADK and TDL for the
satisfaction and realization of the Net Profits Interest. As a result of the assignment of a Net Profits Interest,
[appellants] shall have an economic interest in the profits derived from the [TJE] and paid to ADK in
proportion to OPIC, TDL, and NIR.
. . .
(1) Into the net profits account shall be credited an amount equal to the percentage of Walston's then
current equivalent membership interest in ADK pursuant to Paragraph 2 above from [ADT]'s share of the
proceeds received by [ADT] as a result of the [TJE] conducting the following operations:
a. The sale of all oil, gas, or other hydrocarbons by the [TJE] or its designee which proceeds thereof are
received by ADK and ultimately distributed to [ADT].
b. The sale and/or rental of any personal property or equipment sold by the [TJE] where the proceeds
thereof have been distributed ultimately to [ADT];
c. Insurance proceeds collected by the [TJE] and distributed ultimately to [ADT];
d. All judgments and claims collected by the [TJE] where such funds so collected are distributed ultimately
to [ADT]; and
e. Any benefit enuring to [ADT] by virtue of its ownership interest in the [TJE] ultimately through ADK and
TDL, excluding always, however, the proceeds of the sale of all or any part of or interest in [ADT] in whole or
in part, where such sale is subject to this Net Profits Interest. (Emphasis added).
The parties dispute whether paragraphs two and four impose conditions precedent and, if they do, whether
performance of them should be excused under various theories. Having carefully reviewed the Agreements
in their entirety, we conclude that the paragraphs grant appellants the right to a limited interest in a particular
fund: post-”Payout/TDL" net profits. See McWilliams, 715 S.W.2d at 763B64 (holding that indemnity
agreement unambiguously restricted general partners' reimbursement from partner to designated specific
source); see also City of Seymour, 96 S.W.2d at 816B17 (holding that contract with city limiting source of
payment to net revenues of light plant created a condition precedent to city's liability where the contract
stated the debt was “payable only from the revenues of the Light Plant"). In other words, paragraph two of
the Agreements imposes an unsatisfied condition precedent to appellants' recovery, as discussed below.
Because the trial court's grant of summary judgment as to appellants' declaratory judgment and breach of
contract actions was meritorious based on the condition precedent contained in paragraph two, we do not
address whether paragraph four also imposes an inexcusable condition precedent.
Assuming for purposes of this analysis that appellants raised a fact issue as to whether the settlement
proceeds fall under the language of paragraph four, section one, subsection (e) as a “benefit enuring to ADT
by virtue of its ownership interest in the [TJE]," the Agreements only entitle appellants to an interest in post-
"Payout/TDL" net profits under paragraph two. Indeed, that section is the touchstone for what appellants are
entitled to under the express terms of paragraph four, section one. Appellants presented no evidence that
the proceeds sought were post-”Payout/TDL" net profits, i.e., that they have any interest in the settlement
proceeds. Rather, they assert that we should avoid construing the "Payout/TDL" requirement as a condition
precedent because (1) it is not a condition precedent on its face; (2) it would impose an absurd result; (3) it
would impose an impossible result; and (4) it would result in an extreme forfeiture. We will address each of
these arguments in turn.
First, appellants contend that “Payout/TDL" was not a condition precedent on its face. We disagree. The
language and structure of paragraph two is clearly conditional. It states that, “[b]efore [] Payout/TDL,"
appellants have no interest in net profits (A0[]%") but that appellants have some interest in net profits “after []
Payout/TDL." See Hirschfeld Steel Co., 201 S.W.3d at 281 (stating that the inclusion of conditional language
denotes a condition precedent). This language, and the flow charts in “Exhibits 1-5" (referenced in
paragraph two and attached to the Agreements), show that the parties clearly limited appellants' rights under
the contract to an interest in post-"Payout/TDL" net profits. See Clear Lake City Water Auth., 123 S.W.3d at
745; City of Seymour, 96 S.W.2d at 816. Under The Limited Liability Company Agreement of TDL referenced
in the Agreements, "Payout/TDL" occurs when TDL members receive a full return of preformation
expenditures from distributable proceeds or proceeds from TJE operations, as defined therein. The non-
satisfaction of the "Payout/TDL" condition precedent means appellants are not entitled to an interest in the
settlement proceeds because they are pre-"Payout/TDL" funds, and therefore outside the class of funds to
which appellants have a right. See Clear Lake City Water Auth., 123 S.W.3d at 745; McWilliams, 715 S.W.2d
at 763B64; City of Seymour, 96 S.W.2d at 816.
Second, appellants argue that reading the "Payout/TDL" requirement as a condition precedent would impose
an absurd result. We decline to enforce a condition precedent when the risk the condition was intended to
protect against is obviated under the circumstances presented at the time enforcement of the condition is
sought. See Vector Indus., Inc. v. Dupre, 793 S.W.2d 97, 101 (Tex. App.- Dallas 1990, no pet.). Here, there
is no showing that the risk which the condition was presumably intended to protect againstCappellants having
a claim to net profits received by appellees before recoupment of preformation expenditures through receipt
of the type of funds contemplated under the L.L.C. Agreement of TDLCwas obviated. On the contrary,
appellants agreed to be bound by the Agreements' terms, including the clear limitation of their rights to post-
Payout/TDL funds. We fail to see how it would impose an absurd result to enforce the terms of the contract
when the very risk appellants agreed to take on comes to fruition. We therefore decline to hold that
enforcement of the condition precedent would impose an absurd result.
Third, appellants rely on appellees' admission that the acts of Halliburton in the underlying lawsuit made it
impossible for appellees to develop the field in accordance with their business plan to contend that (1) the
"Payout/TDL" condition is impossible to satisfy, (2) the Agreements are not performable in the future, and (3)
as a result we should excuse the non-performance of "Payout/TDL." We disagree.
We will excuse the nonperformance of a condition precedent that is objectively[2] impossible to satisfy if (1)
occurrence of the condition is not a material part of the exchange for the promisor's performance, and (2) the
discharge of the promisor would operate as an extreme forfeiture of the promisee's rights under the
contract. See Sammons Enters., Inc. v. Manley, 540 S.W.2d 751, 755B56 (Tex. App.- Texarkana 1976, writ
ref'd n.r.e.); 49 David R. Dow & Craig Smyser, Texas Practice: Contract Law § 7.12 (2005) (noting that
condition precedent that is objectively impossible to satisfy may be excused). The fact that development in
accordance with appellees' business plan was rendered impossible does not raise a genuine issue of
material fact as to whether "Payout/TDL" is objectively impossible. Non-satisfaction of the condition
precedent here does not mean that if post-"Payout/TDL" funds are available at some future time through
development of the field under some alternative business plan, or through another means under paragraph
one, section four, subsections (a)B(d), appellants will not receive some interest in net profits from those
funds. See Clear Lake City Water Auth., 123 S.W.3d at 745. Therefore, appellants' evidence does not raise
a genuine issue of material fact,[3] but at most a mere suspicion as to whether "Payout/TDL" is objectively
impossible. See Transp. Ins. Co., 898 S.W.2d at 282 (Tex. 1995). Because the condition precedent is not
objectively impossible to satisfy, we need not address whether either prong required to excuse impossible
conditions precedent exists here.
Fourth, appellants assert that we cannot enforce the conditions precedent in the Agreements because it
would impose an extreme forfeiture of their rights. Again, we disagree. The discharge of appellees in this
instance would not operate as a forfeiture of appellants' rights under the contract, because, as discussed
above, appellants have no interest in pre-"Payout/TDL" net profits, and therefore no rights to the settlement
proceeds. See City of Seymour, 96 S.W.2d at 816 (promisee had no right to demand payment from funds
other than the particular, limited fund agreed to). The fact that the settlement proceeds are outside the
funds to which appellants are entitled does not mean that appellants have lost their right to receive payment
when the condition precedent is satisfied and post-"Payout/TDL" funds become available. See Clear lake
City Water Auth., 123 S.W.3d at 745. As a result, enforcement of the condition precedent in this instance
does not result in a forfeiture of appellants' rights.
Construing the Agreements as a matter of law, we hold that they unambiguously impose an unsatisfied,
inexcusable condition precedent. Therefore, the trial court did not err to the extent it granted appellees'
motion for summary judgment as to appellants' declaratory judgment and breach of contract[4] claims under
the Agreements.[5] We overrule appellants' second issue, and subissue one of appellants' fifth issue
regarding appellants' breach of contract claims.[6]
B. Breach of Fiduciary Duty and Other Counterclaims
In the remaining subissues of their fifth issue, appellants assert that the trial court erred in granting summary
judgment on their counterclaims for breach of fiduciary duty, conversion, estoppel, unjust enrichment, breach
of the duty of good faith and fair dealing, fraud, negligent misrepresentation, constructive fraud, money had
and received, assumpsit, quantum meruit, and constructive trust.
Appellants assert, without citation to the record, that there are genuine issues of material fact as to whether
(1) appellees owed them a fiduciary duty as co-investors in the TJE, and (2) appellees breached that duty by
failing to comply with the Agreements and Participation Agreements. In support of their breach of fiduciary
duty claims, appellants cite Rankin v. Naftalis, 557 S.W.2d 940 (Tex. 1977). However, Rankin would
establish fiduciary duties only upon a finding of joint venture. Hamilton v. Texas Oil & Gas Corp., 648 S.W.2d
316, 321 (Tex. App.- El Paso 1982, writ ref'd n.r.e.); Cont'l Res., Inc. v. PXP Gulf Coast, Inc., No. CIV-04-
1681-F, 2006 WL 2865509, at *12-13 (W.D. Okla. Oct. 5, 2006) (citing Hamilton). As a threshold matter,
appellants present no argument that they were joint venturers with appellees. Instead, they assert, as they
did in their response to appellees' summary judgment motion, that a fiduciary relationship arose out of their
status as co-investors with appellees. However, they fail to explain how that status creates a fiduciary
relationship under Rankin. Moreover, one of the elements required to establish a joint venture is a showing
that the parties have a mutual right of control or management of the enterprise. Ayco Dev. Corp. v. G.E.T.
Serv. Co., 616 S.W.2d 184, 186 (Tex. 1981) (per curiam); Texas Dep't of Family & Protective Servs. v.
Atwood, 176 S.W.3d 522, 535 (Tex. App.- Houston [1st Dist.] 2004, pet. denied). The Agreements
specifically state that appellants will not have control rights and that AADK shall have exclusive management
and control of the exploration, development and operation of the JE." Also, the Participation Agreements
specifically state (1) that appellants are not granted any right not granted in paragraphs three and four,
which do not include rights of management or control, and (2) that the administrative member of ADT shall
have exclusive management and control of the operations of ADT. Thus, the language of the contracts show
that the element of mutual control or management is not present here. See Hamilton, 648 S.W.2d at 321;
Cont'l Res., Inc., 2006 WL 2865509, at *14. But even if appellants had shown that their co-investor
relationship with appellees established a fiduciary relationship, or that they were joint venturers with
appellees, their argument still fails as a matter of law because, as discussed above, appellants are not
entitled to a portion of the settlement proceeds. We therefore hold that the trial court did not err in granting
summary judgment as to appellants' breach of fiduciary duty counterclaim. We overrule the remaining
subissues of appellants' fifth issue.[7]
III. Evidentiary Challenge to Van Dyke's Affidavit
In their first issue, appellants contend that the trial court erred in overruling their objections to various
portions of Van Dyke's affidavit, which was attached in support of appellees' motion for summary judgment.
Appellants' brief challenges the trial court's ruling on their objections to Van Dyke's affidavit in five subissues.
In subissue one, appellants challenge Van Dyke's affidavit statement that “neither ADPI nor [Van Dyke] were
parties to any of these agreements" as legally conclusory, impermissibly factually determinative, or both. We
review the trial court's decision to consider that evidence for an abuse of discretion. See Owens-Corning
Fiberglass Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998). An affidavit that merely states a legal
conclusion is incompetent to support or refute a motion for summary judgment. See Mercer v. Daoran Corp.,
676 S.W.2d 580, 583 (Tex. 1984). However, even if the trial court errs by considering such evidence at
summary judgment, we will not reverse a trial court's erroneous evidentiary ruling unless the party requesting
reversal can demonstrate that the error probably caused the rendition of an improper judgment. See Tex. R.
App. P. 44.1; Bader v. Dallas Cent. Appraisal Dist., 139 S.W.3d 778, 783-84, (Tex. App.- Dallas 2004, pet.
denied).
Assuming, without deciding, that the trial court erred in considering the affidavit statement challenged above,
appellants do not show, and we decline to hold, that the trial court's consideration of the affidavit probably
caused the trial court to render an improper judgment. First, the challenged evidence would only go to
whether ADPI and Van Dyke were proper parties to the suit, but we have already determined the trial court
properly granted summary judgment in appellees' favor as to appellants' declaratory judgment and
contractual claims, obviating the need to address that issue. Moreover, attached to the affidavit was a copy
of one of the Agreements, which only names appellee ADT as a party (as do they all). Other copies of the
Agreements, containing identical language, are included throughout the summary judgment record.
Therefore, even if the trial court erred in considering the challenged evidence, we find it unlikely that such
error caused the trial court to render an improper judgment. Because we conclude that any error in the trial
court's judgment was harmless, we overrule subissue one. Appellants' first issue is overruled.[8]
Having overruled all of appellants' issues, we affirm the trial court's judgment.
/s/ Leslie B. Yates
Justice
Panel consists of Justices Yates, Guzman, and Sullivan.
[1] Appellants Gerald Walston and Ben Morris also entered into two other sets of contracts - the “Smith
Participation Agreements" and the “Participation Agreements" - and asserted claims under those agreements
in the trial court. Appellants present no argument here regarding the Smith Participation Agreements,
thereby waiving their claims under those contracts. See Tex. R. App. P. 38.1(e), (h); Tex. Nat'l Bank v.
Karnes, 717 S.W.2d 901, 903 (Tex. 1986) (holding that “the court of appeals may not reverse a trial court's
judgment in the absence of properly assigned error"); Graybar Elec. Co., Inc. v. LEM & Assocs., L.L.C., 252
S.W.3d 536, 549 n.16 (Tex. App.- Houston [14th Dist.] 2008, no pet.). Appellants' claims under the
Participation Agreements are discussed in footnote six below.
[2] In arguing that supervening impossibility may excuse performance of a condition precedent, appellants
wrongly assume this is a situation of objective, rather than subjective, impossibility. Subjective impossibility
does not excuse performance under Texas law. See Janak v. FDIC, 586 S.W.2d 902, 906 (Tex. App.-
Houston [1st Dist.] 1979, no writ); see also 49 David R. Dow & Craig Smyser, Texas Practice: Contract Law §
7.12 (2005) (noting that subjective impossibility does not excuse performance).
[3] We note that we arrive at this conclusion independently of paragraph four of Van Dyke's affidavit, which
appellants challenge as incompetent summary judgment evidence. Because our construction of the contract
as containing inexcusable conditions precedent requires no reliance on that evidence, and because we hold
that appellants failed to present any evidence raising a genuine issue of material fact as to whether the
condition precedent is objectively impossible to perform, we decline to hold that consideration of that
evidence probably caused the trial court to render an improper judgment. See Tex. R. App. P. 44.1; Bader v.
Dallas Cent. Appraisal Dist., 139 S.W.3d 778, 783B84 (Tex. App.- Dallas 2004, pet. denied). Any error by
the trial court in considering that evidence was therefore harmless.
[4] In their third issue, appellants assert that the trial court erred in granting summary judgment on their
claim under a completely different theory: that appellees breached the agreements by suing Halliburton et
al., an action which appellees claim violated the agreements. However, appellants have waived this theory
by presenting it for the first time on appeal. See Tex. R. App. P. 166(a)(c) (AIssues not expressly presented
to the trial court by written motion, answer or other response shall not be considered on appeal as grounds
for reversal."); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 677 (Tex. 1979); Physicians,
Surgeons & Hosps. Prof'l Servs., Inc. v. Tex. Hosp. Ins. Exch., No. 03-01-00373-CV, 2002 WL 1727396, at *2
(Tex. App.- Austin July 26, 2002, no pet.) (not designated for publication).
[5] Because we hold that the trial court did not err in granting summary judgment as to appellants'
declaratory judgment and breach of contract claims, we need not address appellants' fourth issue
concerning whether ADPI and Van Dyke were proper parties to those actions.
[6] As mentioned in footnote one above, appellants Gerald Walston and Ben Morris also asserted claims
below under their “Participation Agreements," which they have mentioned only in passing in their responsive
motion below and in their brief on appeal. Nevertheless, we have reviewed those contracts carefully and find
that they unambiguously grant appellants a “limited participating interest" in any “Distributions" from the TJE
to ADT through ADK and TDL. However, nothing in those contracts, or in the definition of “Distributions"
under the TDL regulations, suggests they grant appellants an interest in the settlement proceeds at issue,
and appellants present no evidence creating a genuine issue of material fact as to whether the settlement
proceeds involved here fall within their AL.P. Interest" under the Participation Agreements. Because the
unambiguous language of the Participation Agreements and the evidence presented by appellants present
nothing suggesting those contracts entitled appellants to a share of the settlement proceeds at issue, the
trial court did not err in granting summary judgment as to the claims asserted thereunder. See Bendigo v.
City of Houston, 178 S.W.3d 112, 113B14 (Tex. App.- Houston [1st Dist.] 2005, no pet.); Clear Lake City
Water Auth., 123 S.W.3d at 745; McWilliams, 715 S.W.2d at 763B64; City of Seymour, 96 S.W.2d at 816.
Appellants' arguments in that regard are overruled.
[7] Appellants have waived their remaining extra-contractual counterclaims by failing to cite any legal
authority or evidence in the record, and failing to present any legal argument supporting their contentions.
See Tex. R. App. P. 38.1(h); Trenholm v. Ratcliff, 646 S.W.2d 927, 934 (Tex. 1983) (stating that issues must
be supported by argument and authorities, and if not so supported, are waived); Rivera v. Countrywide Home
Loans, Inc., 262 S.W.3d 834, 841B42 (Tex. App.- Dallas 2008, no pet.) (applying briefing waiver to challenge
of trial court's grant of summary judgment denying claims in contract dispute).
[8] We need not address subissues two through five because they are inadequately briefed. In each
subissue, appellants either fail to cite any legal authority in support of those arguments, fail to point us to the
specific statements challenged within the affidavit paragraphs complained of, simply state the number of the
challenged affidavit paragraph and then state that the entire paragraph constituted a legal conclusion or
factual determination, or some combination thereof. See Tex. R. App. P. 38.1(h); Stewart v. Sanmina Tex., L.
P., 156 S.W.3d 198, 207 (Tex. App.- Dallas 2005, no pet.).