law-contract construction | interpretation of leases | ambiguous and unambiguous provisions | parol evidence rule
CONTRACT CONSTRUCTION / INTERPRETATION
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).
Consequently, we will address Methodist's alternative arguments that involve construction of
the parties' contract.
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