Opinion
No. 01-04-00760-CV
Opinion issued December 23, 2004.
On Appeal from County Civil Court at Law No. 4, Harris County, Texas, Trial Court Cause No. 800206.
Panel consists of Justices NUCHIA, HANKS, and HIGLEY.
MEMORANDUM OPINION
In this breach of contract case, appellant, Apex Engineers and Consultants, Inc., ("Apex") challenges the summary judgment signed by the trial court in favor of appellee, Williams Brothers Construction Company, Inc. ("Williams Brothers"). In a single issue, with three supporting sub-issues, Apex contends that the trial court erred in granting the summary judgment.
We affirm.
Factual and Procedural History
Williams Brothers acted as general contractor on a highway project in Hidalgo County under a contract with the Texas Department of Transportation ("TxDOT"). Williams Brothers subcontracted with Apex to supply and install polyethylene liner for a portion of the project at a unit price of a $1.88 per square foot. The subcontract provided that Apex would provide an estimated 15,570 square feet of liner at an estimated cost of $29,271.60 ($1.88 × 15,570). A few days after the subcontract was signed, the parties signed a "subcontract modification," which served only to increase the estimated quantity and approximate cost of the liner. The estimated amount of liner that Apex was to supply under the modification was increased to 21,100 square feet, which in turn changed the approximate total cost to $39,668 (21,100 × $1.88). Apex ultimately supplied and installed 18,600 square feet of liner for the highway project. Contending that it owed Apex only the amount of the liner actually installed, Williams Brothers's position was that the amount due Apex was $34,969 (18,600 × $1.88). Williams Brothers paid Apex $33,219.60 but initially withheld a five percent retainage fee of $1,748.40. The withholding was based on a provision in TxDOT's standard specifications document, which provides for the withholding of five percent of the amount owed to a contractor until the highway project's satisfactory completion. Both Williams Brothers's general contract with TxDOT and the Apex subcontract were subject to the TxDOT standard specifications.
Apex sued Williams Brothers for breach of the subcontract, alleging that it was owed $6,448.80. This amount represents the difference between the $33,219.60 paid by William Brothers and the estimated total of $39,668 found in the subcontract modification that was, in turn, based on the estimated liner quantity of 21,100 square feet. Apex also prayed for attorney's fees and costs.
Williams Brothers moved for summary judgment, asserting that, under the subcontract, it owed Apex only for the amount of liner actually installed multiplied by the fixed per unit (i.e., square foot) price of $1.88. In support of its summary judgment, Williams Brothers offered the subcontract and the subcontract modification. Williams Brothers also submitted summary judgment evidence supporting its contention that it was allowed to withhold the five percent retainage fee, (i.e., $1,748.40), until completion of the project. Williams Brothers also submitted the affidavit of its vice president, evidencing that Williams Brothers had offered to pay Apex the retainage fee when Apex filed suit in exchange for the suit's dismissal, but that Apex declined to accept the offer. It is undisputed that TxDOT paid Williams Brothers $1,748.40 in December 1993 and that Williams Brothers paid Apex the retainage at the motion for summary judgment hearing in April 1994. Thus, Williams Brothers contends that it has paid Apex all that is owed under the subcontract.
Apex filed a response to Williams Brothers's motion for summary judgment and a cross-motion for summary judgment. Apex contends that Williams Brothers owes it, not for the amount of liner actually installed, but for the amount that Williams Brothers "purchased"; that is, the estimated amount of 21,100 square feet listed in the subcontract modification. Apex asserts that such interpretation is required under the plain language of the subcontract. Apex did not contest that the subcontract was subject to the TxDOT general specifications, which allowed Williams Brothers to withhold the retainage.
In support of its response and cross-motion, Apex offered the affidavit of its president, Charles Schibi. Williams Brothers filed an objection to Schibi's affidavit, which was sustained by the trial court.
The trial court granted Williams Brothers's motion for summary judgment and denied Apex's cross-motion. The court signed a final summary judgment, providing that Apex take nothing against Williams Brothers and dismissing Apex's claims with prejudice. Apex appeals the judgment, challenging the trial court's ruling on the respective motions for summary judgment.
Standard and Scope of Review
A party moving for traditional summary judgment carries the burden of establishing that no material fact issue exists and that it is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); M.D. Anderson Hosp. Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000). When cross-motions for summary judgment are filed, a reviewing court examines all of the summary judgment evidence presented by both sides, determines all questions presented, and if reversing, renders such judgment as the trial court should have rendered. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000); Bradley v. State ex rel. White, 990 S.W.2d 245, 247 (Tex. 1999). Each summary-judgment movant must carry its own burden and neither can prevail due to the other's failure to meet its burden. Guynes v. Galveston County, 861 S.W.2d 861, 862 (Tex. 1993); W.H.V., Inc. v. Assocs. Hous. Fin., LLC, 43 S.W.3d 83, 87 (Tex.App. 2001, pet. denied).
Interpretation of the Subcontract's Payment Terms
Article 1.1 of the subcontract between Apex and Williams Brothers requires Apex to pay for all labor, equipment, supervision, materials, supplies, insurance, and any other incidental items necessary to complete the work on a turnkey basis. Originally, article 1.1 also provided that the "estimated quantity" of polyethylene liner that Apex would supply and install for the project was 15,570 square feet at a unit price of $1.88 per square foot, resulting in an "estimated total" price of $29,271.60.
Article 1.2 of the contract provides as follows:
All of the quantities shown above are approximate and [Apex] agrees to accept the unit prices as described in Article 1.1. It is understood that the unit price, and not the estimated total price contained herein, shall control and be binding as the total payment due to [Apex] under the SUBCONTRACT.
(Emphasis added.)
Four days after signing the subcontract, the parties signed the subcontract modification, which served only to modify the "estimated amount" of polyethylene liner to be supplied and installed by Apex. Specifically, the modification provided that the following "item of work" is deleted from the original subcontract: the "estimated quantity" of 15,570 square feet of polyethylene liner. In the modification, the following "item of work" is added: the "estimated quantity" of 21,100 square feet of polyethylene liner for the same unit price of $1.88 per square foot. The subcontract modification also stated, "The new approximate total of your [subcontract] is now $39,668." Lastly, the parties agreed that the modification changed no other terms or conditions of the original subcontract; that is, the parties agreed that "[t]he SUBCONTRACT shall remain in full force and effect as originally signed" except as provided in the modification. Thus, the terms and conditions of article 1.2 remained "in full force and effect" between the parties.
In its first of three sub-issues, Apex contends that, as a matter of law, the subcontract requires Williams Brothers to pay for the estimated amount of liner (i.e., 21,100 square feet) listed in the subcontract modification. Apex summarizes its argument as follows: "[Apex] contends that the contract controls, and it is unambiguous that no matter the amount of material installed [Williams Brothers] owes the agreed amount unit price, $1.88 per square foot[,] for the amount it purchased, 21,100 square feet." Apex asserts that it is of "significant note" that the subcontract modification increased the amount of liner "purchased" from 15,570 square feet to 21,100. Apex also points out that the subcontract does not state that Williams Brothers had to pay only for liner actually installed.
Conversely, Williams Brothers contends that the subcontract unambiguously provides for payment based on the unit price multiplied by the liner actually installed. Williams Brothers points out that Apex agreed that the stated quantities and corresponding total costs were estimates, not fixed. Williams Brothers also points out that the only term that was expressly fixed in the subcontract was the unit price and that article 1.2 expressly provides that "unit price, and not the estimated total price contained herein, shall control and be binding as the total payment due."
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 (Tex. 1999); Standard Constructors, Inc. v. Chevron Chem. Co., 101 S.W.3d 619, 622 (Tex.App. 2003, pet. denied). Whether a contract is ambiguous is also a question of law. See Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996). To determine whether a contract is ambiguous, we look at the agreement as a whole in light of the circumstances present when the parties entered into the contract. Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995); Standard Constructors, 101 S.W.3d at 622. We examine and consider the entire writing in an effort to harmonize and to give effect to all the provisions of the contract so that none will be rendered meaningless. CBI Indus., Inc., 907 S.W.2d 520; Standard Constructors, 101 S.W.3d at 622.
Our primary concern in construing a written contract is to ascertain the true intent of the parties as expressed in the instrument. Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex. 1994); Standard Constructors, 101 S.W.3d at 622. A contract is unambiguous if, after appropriate rules of construction have been applied, the contract can be given a definite or certain legal meaning. See Columbia Gas, 940 S.W.2d at 589. In contrast, if, after appropriate rules of construction have been applied, a contract is susceptible of more than one reasonable interpretation, the contract is ambiguous. Universal C.I.T. Credit Corp. v. Daniel, 243 S.W.2d 154, 157 (Tex. 1951). Mere disagreement over a contract's interpretation does not necessarily render the contract ambiguous. Columbia Gas, 940 S.W.2d at 589.
Applying these rules of construction, we conclude that the subcontract is not ambiguous in regard to the payment terms. There is only one reasonable interpretation of the subcontract: the contract interpretation offered by Williams Brothers that the amount owed Apex is determined by multiplying the unit price by the quantity of liner actually installed. In contrast, Apex's contract interpretation — that Williams Brothers owes it for the estimated quantity of liner listed in the subcontract modification — does not comport with the rules of contract construction. Particularly, Apex's reading violates the principles that contract provisions must be read neither in isolation nor to render a provision meaningless.
Reading the pertinent contract provisions reveals the following. The parties agreed that the fixed unit price is $1.88 per square foot and that Apex would perform the work on a turnkey basis. Pursuant to the subcontract modification, the parties also expressly agreed that the stated quantities and total costs listed in article 1.1 were "estimated" and "approximate." If article 1.1 were read in isolation, ambiguity might exist regarding the amount owed by Williams Brothers. But such reading is contrary to well-established rules of construction, particularly the rule that the contract must be read as a whole, rather than in isolation.
Article 1.2 expressly references article 1.1 and serves to clarify the payment terms of the subcontract. That article makes clear that the quantity listed in article 1.1 is an "approximate," not a set figure and that the estimated total price, which is derived from the estimated quantity, does not determine the amount ultimately owed to Apex. Article 1.2 serves to emphasize that the only definitive term stated in the subcontract relative to the total payment ultimately due is the unit price. Thus, the only reasonable interpretation of the subcontract is that the total payment due cannot be determined until the liner has been installed.
We overrule Apex's first sub-issue.
Reliance on Schibi's Affidavit
In its second sub-issue, Apex contends that "[i]f the Court accepts [Williams Brothers's] interpretation of the written contract to the exclusion of [Apex's] position, then based upon . . . Mr. Schibi's affidavit testimony . . . there is a fact issue regarding the intent of the parties." As stated, the trial court sustained Williams Brothers's objection to the Schibi affidavit. On appeal, Apex has not attacked the merits of that ruling. Consequently, we cannot consider this affidavit. Inglish v. Prudential Ins. Co., 928 S.W.2d 702, 706 (Tex.App.-Houston [1st Dist.] 1996, writ denied); Ash v. Hack Branch Distributing Co., 54 S.W.3d 401, 409 — 10 (Tex.App. 2001, pet. denied). Apex relies on no other summary judgment evidence in support of this sub-issue.
We overrule Apex's second sub-issue.
Attorney's Fees
In its third sub-issue, Apex complains that the trial court "erred in denying [Apex] its attorney's fees." Under section 38.001 of the Civil Practice and Remedies Code, a party is entitled to recover attorney's fees in addition to the amount of a valid claim based on a written contract. Tex. Civ. Prac. Rem. Code Ann. § 38.001(8) (Vernon 1997). Because Apex did not have a valid breach of contract claim against Williams Brothers, as discussed above, Apex was not entitled to recover attorney's fees on its breach of contract claim. See Mustang Pipeline Co., Inc. v. Driver Pipeline Co., 134 S.W.3d 195, 201 (Tex. 2004) (reversing trial court's order of section 38.001(8) attorney's fees because no valid breach of contract claim existed); see also Bates v. Tex. State Technical Coll., 983 S.W.2d 821, 827 (Tex.App. 1998, pet. denied) (recognizing that party must "prevail" on breach of contract claim to be entitled to section 38.001(8) attorney's fees and holding party not entitled to attorney's fees when he had not "prevailed" on breach of contract claim following granting of summary judgment on that cause of action).
On appeal, Apex contends that it is entitled to attorney's fees because Williams Brothers admittedly did not pay it the five percent retainage fee until four months after Williams Brothers received payment from TxDOT. Apex's argument is without merit. Williams Brothers introduced summary judgment evidence, which is uncontested, that it offered to pay Apex the retainage fee when suit was filed, even though it was not yet due under the subcontract, and that Apex refused the offer. Generally, if a defendant tenders payment for the just amount owed and the plaintiff refuses to accept it and proceeds to trial, the defendant is not liable for the plaintiff's attorney's fees. See Findlay v. Cave, 611 S.W.2d 57, 58 (Tex. 1981). Moreover, Apex presents this issue for the first time on appeal and did not present this argument to the trial court. See City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 675 (Tex. 1979) (holding that issues not expressly presented to trial court may not be considered on appeal as grounds for reversal of summary judgment).
We overrule Apex's third sub-issue.
Conclusion
We hold that the trial court properly granted Williams Brothers's motion for summary judgment and denied Apex's cross-motion. Accordingly, we affirm the judgment of the trial court.