law-contract-construction | statutory construction | insurance contracts policies | ambiguous
contracts | parol evidence rule | extraneous evidence to prove contracting parties' intent | merger
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CONSTRUING, INTERPRETING CONTRACTS
The interpretation or construction of an unambiguous contract is a question of
law for the court, which is reviewed on appeal de novo. Willis v. Donnelly, 199
S.W.3d 262, 275 (Tex. 2006); Alamo Cmty. College Dist. v. Browning Const.
Co., 131 S.W.3d 146, 155 (Tex. App.—San Antonio 2004, pet. denied). “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.” Coker v.
Coker, 650 S.W.2d 391, 393 (Tex. 1983). When discerning the contracting
parties’ intent, courts must examine the entire agreement in an effort to
harmonize and give effect to each provision so that none is rendered
meaningless. Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d
342, 345 (Tex. 2006). “No single provision taken alone will be given
controlling effect;rather, all the provisions must be considered with reference
to the whole instrument.” Coker, 650 S.W.2d at 393.04-10-00620-CV
CONTRACT CONSTRUCTION PRINCIPLES
When construing a contract, our primary goal is to determine the parties' intent as expressed in
the terms of the contract. Chrysler Ins. Co. v. Greenspoint Dodge of Houston, Inc., 297 S.W.3d
248, 252 (Tex. 2009); Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). Contract language that
can be given a certain or definite meaning is not ambiguous and is construed as a matter of law.
Chrysler Ins. Co., 297 S.W.3d at 252; Coker, 650 S.W.2d at 393. A contract is ambiguous when its
meaning is uncertain and doubtful or it is reasonably susceptible to more than one meaning.
Coker, 650 S.W.2d at 393; United Protective Servs., Inc. v. W. Vill. Ltd. P'ship, 180 S.W.3d 430,
432 (Tex. App.-Dallas 2005, no pet.). We review an unambiguous contract de novo. Chrysler Ins.
Co., 297 S.W.3d at 252. When a contract contains an ambiguity, the granting of a motion for
summary judgment is improper because the interpretation of the instrument becomes a fact issue.
Coker, 650 S.W.2d at 394; Hackberry Creek Country Club, Inc. v. Hackberry Creek Home Owners
Ass'n, 205 S.W.3d 46, 56 (Tex. App.-Dallas 2006, pet. denied). The court of appeals may
determine ambiguity as a matter of law for the first time on appeal. Simba Ventures Shreveport, L.
L.C. v. Rainier Capital Acquisitions, L.P., 292 S.W.3d 173, 178 (Tex. App.-Dallas 2009, no pet.);
Royal Maccabees Life Ins. Co. v. James, 146 S.W.3d 340, 347 (Tex. App.-Dallas 2004, pet.
denied) (citing Sage Street Assocs. v. Northdale Constr. Co., 863 S.W.2d 438, 444-46 (Tex.
TEXAS SUPREME COURT DECISIONS INVOLVING CONTRACT
Interpretation of an unambiguous contract is an issue of law. E.g., SAS Institute, Inc. v. Breitenfeld,
167 S.W.3d 840, 841 (Tex. 2005). However, when a contract is ambiguous, extrinsic evidence may
be used to determine the intent of the parties. E.g., Progressive County Mut. Ins. Co. v. Kelley,
284 S.W.3d 805, 807–08 (Tex. 2009) (considering extrinsic evidence in interpreting an insurance
agreement due to a latent ambiguity as to the intent of the parties). Here, a latent ambiguity
appears to exist, as it is unclear whether the case at issue here is covered by the Agreement and
release, even construing the release language narrowly. See Victoria Bank & Trust Co. v. Brady,
811 S.W.2d 931, 938 (Tex. 1991) (recognizing that a claim must be “mention[ed]” in a settlement
release to be effective, and that general, categorical releases are narrowly construed).
Gallagher Headquarters Ranch Development, Ltd., No. 08-0773 (Tex. Feb. 12, 2010)(per curiam)
(petition for review in the Supreme Court put on hold pending submission of findings of fact
requested from the trial court)(scope and reach of release in settlement at issue)(petition abated,
findings of fact requested from trial court, scope of release pursuant to settlement at issue)
Progressive County Mutual Ins. Co. v. Kelley, No. 08-0073 (Tex. Mar. 27, 2009)(per curiam)
(insurance policy documents were ambiguous, thus raising issues of fact precluding summary
judgment) (contract construction, insurance coverage dispute, contract construction, contract
consisting of multiple documents, definiteness, ambiguity)
PROGRESSIVE COUNTY MUTUAL INSURANCE COMPANY v. REGAN KELLEY; from Brazos
County; 10th district (10-06-00263-CV, ___ SW3d ___, 12-12-07)
Pursuant to Texas Rule of Appellate Procedure 59.1, after granting the petition for review and
hearing oral argument, the Court reverses the court of appeals' judgment and remands the case
Per Curiam Opinion
CASES IN WHICH TEXAS SUPREME COURT DENIED REVIEW
In construing a written contract, we must 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) (per curiam); J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003).
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. Frost Nat'l Bank, 165
S.W.3d at 312; Webster, 128 S.W.3d at 229. “No single provision taken alone will be given
controlling effect; rather, all the provisions must be considered with reference to the whole
instrument.” Webster, 128 S.W.3d at 229.
Additionally, courts 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 311; 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 the contract as a matter of law. Frost
Nat'l Bank, 165 S.W.3d at 312.
AMERICAN SOUTHWEST INSURANCE MANAGERS, INC. v. EMPLOYERS REINSURANCE
CORPORATION; from Collin County; 5th district (05‑06‑01284‑CV, 261 SW3d 432, 08‑14‑08, pet
denied Nov. 2008)(insurance, contract construction)
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