law-interpretation-of-contracts | contract construction |
INTERPRETATION OF CONTRACTS
In construing a contract, our primary goal is to ascertain and give effect to the parties' intent as expressed in
the contract. Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006). Contract
terms are given their plain, ordinary, and generally accepted meanings unless the contract itself shows them to
be used in a technical or different sense. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex. 2005).
The more specific provisions of a contract will control over the general. Forbau v. Aetna Life Ins. Co., 876 S.W.
2d 132, 133B34 (Tex. 1994). Unless the contract is ambiguous, a court will construe it as a matter of law. Am.
Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex. 2003); Coker v. Coker, 650 S.W.2d 391, 393 (Tex.
1983).
Montgomery v. Byrd (Tex.App.- Houston [14th Dist.] Aug. 25, 2009)(Seymore)
(breach of contract and counterclaim, offsetting claims after dissolution of business relationship with settlement
and release; employees brought lawsuit that entailed liability for both parties)
(directed verdict should have been granted, only attorney's fees issue for the jury to decide)
REVERSED AND REMANDED: Opinion by Justice Seymore
Before Chief Justice Hedges, Justices Anderson and Seymore
14-07-01015-CV Chester Montgomery v. Richard Byrd
Appeal from County Civil Court at Law No 4 of Harris County
Trial Court Judge: Roberta Anne Lloyd
We must presume that the parties intended each contract provision to have effect. See
Phoenix Holdings, Ltd. v. Circle C Land Corp., 987 S.W.2d 933, 937 (Tex. App.- Austin 1999, pet. denied)
(citing Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983)). Therefore, we may not construe one
clause in a manner that renders other provisions meaningless. See Shell Oil Co. v. Khan, 138
S.W.3d 288, 292 (Tex. 2004). Nor may we rewrite the parties' contract under the guise of
interpretation. See Gen. Am. Indem. Co. v. Pepper, 339 S.W.2d 660, 661 (Tex. 1960); Ramco Oil & Gas
Ltd. v. Anglo-Dutch (Tenge) L.L.C., 207 S.W.3d 801, 815 (Tex. App.- Houston [14th Dist.] 2006, pet. denied).
Thus, we may not construe the “reasonable efforts" clause as requiring Apache to agree to VPEM's demands
to alter the express terms of their contract. See Pepper, 339 S.W.2d at 661; see also Werline v. E. Tex. Salt
Water Disposal Co., 209 S.W.3d 888, 901 (Tex. App.- Texarkana 2006, pet. granted) (declining to interpret
“reasonable policies" provision to vary explicit language in contract).
Virginia Power Energy Marketing, Inc v. Apache Corp. (Tex.App.- Houston [14th Dist.] Aug. 6, 2009) (Sullivan)
(dispute involves the application and effect of force majeure provisions in a natural-gas supply contract,
contract construction, excuse for nonperformance) (fact issue precludes summary judgment)
AFFIRMED IN PART; REVERSED & REMANDED IN PART: Opinion by Justice Sullivan
Before Justices Brock Yates, Guzman and Sullivan
14-07-00787-CV Virginia Power Energy Marketing, Inc and Dominion Resources, Inc v. Apache Corporation
Appeal from 157th District Court of Harris County
In determining the parties' intent, we must assign terms their plain, ordinary, and generally
accepted meaning unless the contract indicates that the parties used them in a technical
or different sense. See Zurich, 157 S.W.3d at 465; see also Jim Walter Homes, Inc. v. Schuenemann, 668
S.W.2d 324, 330 (Tex. 1984) (requiring courts to construe a contract in a manner that gives effect to the
parties' intentions as revealed by the language used in the contract). Even so, however, we may consider
extrinsic evidence, such as expert testimony or reference material, to determine whether a contract term enjoys
a commonly understood meaning in the industry. See XCO Prod. Co. v. Jamison, 194 S.W.3d 622, 627-28
(Tex. App.- Houston [14th Dist.] 2006, pet. denied); Mescalero Energy, Inc. v. Underwriters Indem. Gen.
Agency, Inc., 56 S.W.3d 313, 320 (Tex. App.- Houston [1st Dist.] 2001, pet. denied) (citing Nat'l Union Fire Ins.
Co. v. CBI Indus., Inc., 907 S.W.2d 517, 521 n.6 (Tex. 1995)).
In construing a written contract, the primary concern of the court is to ascertain the true
intentions of the parties as expressed in the instrument. Valence Operating Co., 164 S.W.3d at
662. Ordinarily, the writing alone is sufficient to express the parties' intentions for it is the objective, not
subjective, intent that controls. Matagorda County Hosp. Dist. v. Burwell, 189 S.W.3d 738, 740 (Tex. 2006)
(per curiam). To achieve this, we examine and consider the entire writing in an effort to harmonize
and give effect to all the provisions of the contract so that none will be rendered
meaningless. Valence Operating Co., 164 S.W.3d at 662. Contract terms are given their plain, ordinary,
and generally accepted meanings unless the contract itself shows them to be used in a technical or different
sense. Id. 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 v. L & F Distrbs., Ltd., 165 S.W.3d 310, 312 (Tex. 2005). The
contract must be read as a whole, rather than by isolating a certain phrase, sentence, or section of the
agreement. Fein v. R.P.H., Inc., 68 S.W.3d 260, 266 (Tex. App.- Houston [14th Dist.] 2002, pet. denied). We
presume the parties to the contract intended every clause to have some effect. Id. (citing Heritage Res., Inc. v.
NationsBank, 939 S.W.2d 118, 121 (Tex. 1996)).Financial Freedom Senior Funding Corp. v. Horrocks (Tex.App.
- Houston [1st Dist.] Jul. 21, 2009)(Anderson) (real estate litigation, probate law, suit to quiet title, declaratory
judgment, demand note, life estate, reverse mortgages, statute of limitations for foreclosure of lien in real
property, deed of trust)
AFFIRMED: Opinion by Justice Anderson
Before Chief Justice Hedges, Justices Anderson and Seymore
14-08-00109-CV Financial Freedom Senior Funding Corp v. Michael L. Horrocks, Administrator of Estate of
Mary Edythe Mullane, Deceased
Appeal from Probate Court No 4 of Harris County
Trial Court Judge: WM CAMERON MCCULLOCH