law-contract construction | interpretation of leases | ambiguous and unambiguous provisions | parol
evidence rule
CONTRACT CONSTRUCTION / INTERPRETATION
When construing a written contract, we ascertain the true intentions of the parties as expressed
in the instrument. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). We must examine and
consider the entire writing in an effort to harmonize and give effect to all provisions so that none
are rendered meaningless. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003);
Coker, 650 S.W.2d at 393. If the written instrument is so worded that it can be given a definite
or certain legal meaning, then the contract may be construed as a matter of law. Coker, 650 S.
W.2d at 393.
The law in regard to contract interpretation is clear and well-settled. The interpretation of an
unambiguous contract is a question of law, which is reviewed de novo. MCI Telecomms. Corp. v. Tex.
Utils. Elec. Co., 995 S.W.2d 647, 650–51 (Tex. 1999). Whether a contract is ambiguous is also a
question of law. Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex.
1996).
If a contract is worded in such a way that it can be given a definite or certain legal meaning, then the
contract is not ambiguous. Chrysler Ins. Co. v. Greenspoint Dodge of Houston, Inc., 297 S.W.3d 248,
252 (Tex. 2009). Whether a contract is ambiguous is a legal question for the court. Dynegy Midstream
Servs., Ltd. P’ship v. Apache Corp., 294 S.W.3d 164, 168 (Tex. 2009). A contract is not ambiguous
when its meaning is certain or definite and not susceptible to more than one reasonable interpretation.
See id. We give contract terms their plain and ordinary meaning unless the contract indicates that the
parties intended a different meaning. Id. A contract is not ambiguous just because the parties disagree
over its meaning. Id. We construe an unambiguous contract as a matter of law. Id.
Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006) (stating court's
primary concern when interpreting contract is to ascertain and give effect to intent of parties as
expressed in the contract); Royal Indem. Co. v. Marshall, 388 S.W.2d 176, 181 (Tex. 1965) (recognizing
court must enforce unambiguous contract according to its terms); see also Nat'l Union Fire Ins. Co. v.
CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1994) (stating interpretation of insurance policy is governed
by same rules of construction applicable to other contracts).
Parties to a contract intend that each clause should have an effect. See Heritage Res. v. NationsBank,
939 S.W.2d 118, 121 (Tex. 1996). Contract terms should be given their plain, ordinary, and generally
accepted meaning unless the agreement shows that they are intended in a different or technical sense.
See id.; Western Reserve Life Ins. Co. v. Meadows, 152 Tex. 559, 261 S.W.2d 554, 557 (1953). Courts
construe marital property agreements narrowly in favor of the community estate. See, e.g., Byrnes v.
Byrnes, 19 S.W.3d 556, 558 (Tex. App.--Fort Worth 2000, no pet.). A trial court lacks authority to divest
a party of separate property in a divorce decree. See Cameron v. Cameron, 641 S.W.2d 210, 220 (Tex.
1982).
Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005) (stating that “[c]ontract terms are
given their plain, ordinary, and generally accepted meanings") Stoker v. Stoker (Tex.App.- Houston [1st
Dist.] Nov. 6, 2008)(Keyes)(divorce, property division, economic contribution claim)
To determine whether a contract is enforceable as written, we construe it as a matter of law and focus
on ascertaining the intent of the parties as expressed in the instrument. Chapman v. Abbot, 251 S.W.3d
612, 616 (Tex. App.—Houston [1st Dist.] 2007, no pet.); see also Gilbert v. Pettiette, 838 S.W.2d 890,
893 (Tex. App.—Houston [1st Dist.] 1992, no writ) (observing that whether offer and acceptance have
occurred is usually question of law). Farragut Financial, et al. v. Capital One Auto (Tex.App.- Houston
[1st Dist.] Sep. 25, 2008)(Bland)
(auto financing, no contract formation, no meeting of the minds on terms, missing essential terms)
In construing a written contract, the primary concern is to ascertain and give effect to the parties’
intentions as expressed in the document. Frost Nat’l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310, 311–
12 (Tex. 2005). We consider the entire writing and attempt to harmonize and give effect to all the
provisions of the contract by analyzing the provisions with reference to the whole agreement. Id. at 312.
We presume that the parties intended for every clause to have some effect. Heritage Res., Inc. v.
NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). No single provision is given controlling effect. J.M.
Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). We give terms their plain, ordinary and
generally accepted meaning unless the instrument shows that the parties used them in a technical or
different sense. NationsBank, 939 S.W.2d at 121. “In harmonizing these provisions, terms stated earlier
in an agreement must be favored over subsequent terms.” Coker v. Coker, 650 S.W.2d 391, 394 (Tex.
1983). We construe contracts “from a utilitarian standpoint bearing in mind the particular business
activity sought to be served,” and “will avoid when possible and proper a construction which is
unreasonable, inequitable, and oppressive.” Frost Nat’l Bank, 165 S.W.3d at 312 (quoting Reilly v.
Rangers Mgmt., Inc., 727 S.W.2d 527, 530 (Tex. 1987)).
If, after the pertinent rules of construction are applied, the contract can be given a definite or certain
legal meaning, it is unambiguous, and we construe it as a matter of law. Id.; Transcon. Gas Pipeline
Corp. v. Texaco, Inc., 35 S.W.3d 658, 665 (Tex. App.—Houston [1st Dist.] 2000, pet. denied) (holding
that “[i]f the contract is unambiguous, the court must enforce the contract as written.”). However, if the
meaning of the contract remains uncertain or is susceptible to more than one reasonable interpretation,
it is ambiguous. Nat’l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995); Coker,
650 S.W.2d at 393–94.
Whether a contract is ambiguous is a question of law to be determined “by looking at the contract as a
whole in light of the circumstances present when the contract was entered.” Coker, 650 S.W.2d at 394.
Only when a contract is first determined to be ambiguous may the courts consider the parties’
interpretation and admit extraneous evidence to determine the true meaning of the instrument. Nat’l
Union Fire Ins. Co., 907 S.W.2d at 520. An ambiguity does not arise simply because the parties advance
conflicting interpretations of the contract. Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 134 (Tex.
1994).
A court may conclude that a contract is ambiguous even in the absence of such a pleading by either
party. Sage St. Assocs. v. Northdale Constr. Co., 863 S.W.2d 438, 445 (Tex. 1993).
MasTec North America, Inc. v. El Paso Field Services, LP (Tex.App.- Houston [1st Dist.] Jul. 23, 2009)
(Higley)
(breach of contract, JNOV reversed, entry of judgment on jury verdict ordered)
REVERSE TC JUDGMENT AND REMAND CASE TO TC FOR FURTHER PROCEEDINGS:
Opinion by Justice Higley
Before Justices Jennings, Keyes and Higley
01-07-00319-CV MasTec North America, Inc. and Mastec, Inc. v. El Paso Field Services, L.P. and
Gulfterra South Texas, L.P. f/n/a El Paso South Texas, L.P. Appeal from 334th District Court of Harris
County
OPINION DISSENTING TO THE COURT'S JUDGMENT: Dissenting Opinion by Justice Jennings
AMBIGUOUS / UNAMBIGUOUS CONTRACT
Whether a contract is ambiguous is a question of law for the court. J.M. Davidson, Inc. v. Webster, 128
S.W.3d 223, 229 (Tex. 2003). We determine whether the contract is ambiguous by looking at the
contract as a whole, in light of the circumstances present when the parties entered into the contract.
Universal Health Servs., Inc. v. Renaissance Women's Group, P.A., 121 S.W.3d 742, 746 (Tex. 2003).
That the parties disagree about a contract's meaning does not render it ambiguous. Hewlett-Packard
Co. v. Benchmark Elecs., Inc., 142 S.W.3d 554, 561 (Tex. App.- Houston [14th Dist.] 2004, pet. denied).
Rather, a contract is ambiguous when it is susceptible to more than one reasonable interpretation.
Frost Nat'l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310, 312 (Tex. 2005). An ambiguity in a contract
may be either "patent" or "latent." Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520
(Tex. 1994). A patent ambiguity is evident on the face of the contract, while a latent ambiguity arises
when a contract unambiguous on its face is applied to the subject matter with which it deals, and an
ambiguity appears by reason of some collateral matter. Id. When a contract is found to be ambiguous,
the parties' intent is a determination for the fact finder. Coker v. Coker, 650 S.W.2d 391, 395 (Tex.
1983). The court may conclude that a contract is ambiguous in the absence of such pleading by any
party.[4] Sage St. Assocs. v. Northdale Constr. Co., 863 S.W.2d 438, 445 (Tex. 1993).
Source: In re Sterling Chemicals, Inc. (Tex.App.- Houston [14th Dist.] Aug. 7, 2008)(Hedges)
(forum selection clause ambiguous, not enforced, mandamus denial)
HOW IS A CONTRACT CONSTRUED, INTERPRETED?
In construing a contract, our primary concern is to ascertain the parties' intent as expressed in the
instrument. Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006) To
ascertain those intentions, we examine the entire contract in an effort to harmonize and give effect to all
of its provisions so that none will be rendered meaningless. Id. No single provision should be given
controlling effect, but all provisions must be construed in reference to the whole. Id. When a written
contract is so worded that it can be given a certain or definite legal meaning or interpretation, it is not
ambiguous, and the court construes it as a matter of law. Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.
3d 154, 157 (Tex. 2003). A contract is ambiguous when its meaning is uncertain and doubtful or is
reasonably susceptible to more than one interpretation. Heritage Res., Inc. v. NationsBank, 939 S.W.2d
118, 121 (Tex. 1996).
Source: Clear Lake City Water Authority v. Kirby Lake Development (Tex.App.- Houston [14th Dist.] Aug.
7, 2008) (Hedges) (local governmental entity, no breach of contract)
XTO Energy Inc. v. Smith Production, Inc. (Tex.App. - Houston [14th Dist.] Feb. 24, 2009)(Frost)
(contract interpretation, expert witness affidavit struck)
Dissenting Opinion by Justice Guzman (Tex.App. - Houston [14th Dist.] Feb. 24, 2009)(contract
construction)
Cameron International Corp. v. Vetco Cray, Inc. (Tex.App.- Houston [14th Dist.] Mar. 31, 2009)
(Anderson)(contract interpretation, confirmation of an arbitrator’s award, unambiguous contract)
AFFIRMED: Opinion by Justice Anderson
Before Justices Anderson, Hudson and Seymore
14-07-00656-CV Cameron International Corporation f/k/a Cooper Cameron Corporation v. Vetco Gray
Inc.
Appeal from 129th District Court of Harris County
Trial Court Judge: Samuel Grant Dorfman
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