D on Reavi s, Just i ce ( R et

. ) , Sev ent h Cour t of Appeal s, si t t i ng by assi gnm ent

. T ex. G ov ’ t C ode Ann. 1 § 7 5 .0 0 2 (a )( 1 ) (V e rn o n S u p p . 2 0 0 6 ). NO. 07-05 -015 6-CV IN THE CO URT OF APPEA LS FO R THE S EVEN TH D ISTRI CT O F TEXAS

AT AM AR ILLO PAN EL C MA Y24, 2006

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___ PRAX AIRIN C. , Appel lan t
v. STERLI NG C HE MI CA LS, IN C. , Appel lee

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______ FRO M T HE 40 5 DIS T RI CT COU RT OF G AL VE ST ON COU NT Y; TH NO. CV-006 0; HON. W AYNE J. M ALL IA, PRES IDING

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____ Memorandum Opinion

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____ Before QUINN, C.J., and REAVIS and HANCOCK, JJ. 1 This appeal ar is es from a p u rp o rt ed breach by Prax air , I nc. of a g uarantee agreem entit ex ecut ed wi th Ste rling Chem icals, Inc. Upon trial by ju ry, t h e t rial court entered j udg ment awardin g Ste rl ing dama g es ag ain st Prax air

. The la tter appeal ed and pre s e n t e d u s with sev en issue s to rev iew . W e ne ed o nly add ress the sixth fo r it is dis posi ti v e. Throug h i t, the c or porati on as ser ts that itdi d notg uarantee per formance or2

pay ment of the obl ig ati on upon w hic h the jud g ment was founded. W e ag re e, s ust ain the is sue, and re v erse the j udg ment. T h e co n t ro ve rs y a t b a r ar is e s f ro m t h e a ll e ge d fa il u re o f P ra xa ir Hyd ro ge n S u p p ly, Inc . ( PH S) to cons tr uctpi pin g thatcompli ed w it h a desi g nated sta ndard. Acc ordin g to the
re cord, P HS and Ster li ng st ru ck a de al under

w hic h the former

ag re ed to bui ld a par

ti cul ar facil ity to sel l it ems produ ced thereat to Ster li ng . Doc uments w ere s ig ned memor ial iz ing the a cc ord. Fur

the rm o re, Prax air

ex ecut ed a g uarantee ass ur ing the per formance and payme nt of

v arious du ties of

PHS. One of ma ny issues below for the jury and trial court to address involv ed w hether the cont ra ctu al duty upon w hic h St er li ng su ed fell w it hin the
s c op e of th e g ua ran te e. Bo th th e tr i al c ou rt an d j ur y s ai d i t di d. N ow w e an s w er th e s am e q uest ion , and do s o by co ncl udi ng thati t di d not

. Per §1.1 of the g uarantee in q uest ion , Prax air obl ig ated it sel f to:
uncon dit ion all y

and ir re v ocabl y

g uarantee

. . . to S ter li ng the full , fait hful and ti mely per formance of all of the obliga tions of PHS, includ ing the ful l and ti mely pay ment of any

moni es re q uired t o b e p aid by PH S unde r the Ag re ements (suc h performanc e and pay ment obl ig ati ons bei ng herein after col lecti v ely

referred to herei n as the “O bli gati ons ”), as and w hen same shall become per

formabl e or due and pay abl e ac cordin g to the t er ms t hereof, as suc h Agr eem ents may be mo dif ied f rom tim e to tim e by the parties. (E mphasi s a dded)

. The “ Ag re ements ” m e n tioned are defined i n the g uarantee. They
cons is t of a “ Ground Le ase Ag re ement, a ProductSuppl y Ag re ement for

the suppl y

of
car bon monox ide , bl end g as, hy drog en, a nd su p er heated ste am, and a U ti li ti es Ag re ement.” Y et, Ster li ng tel ls us that the a g re ements that w ere found to hav e been breache d by PH S .

. . w ere not found in the G ro und Lea se, the ProductSuppl y Ag re ement, or

the Ut il it ies Agreement, but w ere i nst ead consis tent pr ior or co ntemporaneous ag re ements per

tai nin g to the stand ards, qual ity , desi g n and cons tr uct ion of the p ipi ng and eq uip ment t hat was to be i nst all ed i n [t he] g as pla nt.3

Th u s, t h e co ntrov ersy before us conc er ns w hether thes e “ cons is tent pr ior and cont emporaneous ag re ements ” fell w it hin the borders o f the g uarantee. And, in re sol v ing the matter

w e tak e care to re ad the guarantee ag re ement as a w hol e, see J. M. D avi dson, Inc . v . Webster

, 128 S. W .3d 2 23, 229 (Tex

. 2003) (s tati ng that cont ra cts must be re ad as
a w hol e) , and stri ctl y

constr ue it in favo r of the g uarantor , i. e. Prax air

. See Reece v. First State Bank

of Den ton, 566 S. W .2d 2 96, 2 97 ( Tex . 197 8)

. A s p re v i o u s l y me n t i o n e d , t h e c o n t ra ct b e fo re u s re l a t e s t o P ra x a i r ’ s p ro mi se to g uarantee the p er

formance and pay ment of ce rt ain i tems by PH S. Mo re ov er , these duti es are ide ntif ie d as the “

Obl ig ati ons” w hic h Prax air ag re ed to per

form or pay “ as and w hen
same s hal l become per formabl e or

due and payabl e ac cordin g to the t er ms t hereof, as
suc h Ag re ements may be modi fied . .

. . ” The l astphrase is tel li ng . By al lud ing to per formance and pay ment i n ac cordance “ to the t er ms t hereof, as suc h Ag re ements may be m odif ied”, o n e s e e s t hatthe te rms of performa nce a nd p aymen t cont em plate d are thos e defined by

the or ig ina l “Ag re ements ” or thei r modific ati o n s. Si mply put, the obligation s impo sed u pon PHS und er the “Ag re e m e n ts” dictate the extentof Prax air’s li abi li ty

. That thi s i s t ru e i s b uttress ed by othe r prov is ion s o f the c ontract

. For i nst ance, §1.3 of the acc ord desc ri bes Prax air’s li abi li ty as “p ri mary” and s tates that if PH S was to “ fail or refuse to per

form o r p a y a ll o r any

of the O bli g ati ons . . . [the] Guarantor

ag re es (i ) to c omplet e su ch per formance as re q uired unde r the Agr eem ents

. . . .” (E mphasi s added)

. Addi ti onal ly , under ar ti cl e tw o w herein the par ti es dis cus s t he “term” or dura tion o f

the guaran tee , it is state d tha t the “Guaran ty shall rem ain in f ull force and effectunti l all Obl ig ati ons of PHS under al l of the Agr

eem ents gua rante ed

. . . are f ully and fait hfull y

perfo rm e d

. . . .” ( Emphasi s a dded)

. Both prov is ion s s ay noth ing aboutW e a re m i n d fu l o f S te rli n g ’ s c o n te n ti o n th a t t h e g u a ra n te e s h o u l d b e re a d a s m a n d a ti n g th a t P ra x a i r 2 agr eed t o gu ar ant ee “ al l oft he obl i gat i ons ofP H S” and onl ya por t i on oft hem const i t ut ed t he t i m el ypay m ent ofcer t ai n m oni es. I n ot herwor ds, St er l i ng p osi t ed t ha t i n us i ng the wor d “ al l ” bef or e “ obl i gat i ons” t hen f ol l owed byt he wor d “ i ncl udi ng” when al l udi ng t o t he p ay m ent of m oni es, t her e m us t h ave b een ot her o b l i g a ti o n s g u a ra n te e d , a n d th o s e o b l i g a ti o n s a l l e g e d l yw e re n o l e s s e x p a n s i v e th a n a n ya n d e v e ry l i a b i l i ty ofPH S, i r r espect i v e of i t s sour ce. T hi s pr oposi t i on, howev er , i gnor es t he r ef er ences t o ot herpr ov i si ons o f th e d o c u m e n t. A g a i n , t h o s e p ro v i s i o n s a re § 1 .3 a n d a rti c l e 2

. T h e y , w h e n c o m b i n e d w i th th e c o m p l e te w ord i ng of §1

. 1, evi nc e t ha t eve ryob l i ga t i on t o b e g ua ran t ee d is b rou gh t un de r t he um bre l l a o f t he w ord
“ Agr ee m en t s” a s ex pr es sl yd ef i ne d by t he pa r t i es . H av i ng t o st r i ct l y co ns t r ue t he ag r ee m en t as a wh ol e, we a g a i n a r e le d to th e c o n c lu s io n th a t t h e d u tie s im p o s e d b y th e “ A g r e e m e n ts ” a r e th e o n ly d u tie s P r a x a ir g u a ra n te e d

. 4 promis es, co ntract s, duti es, or the li ke of PHS other than thos e ar is ing under the “Agreem ent s.” So, w e f ind bu t one reason able interpret ation of the guaran tee , a n d it eq uates the extent of Praxair’s o b liga ti o n s as a g uarantor to the d uti es of PHS as esta blished in the “Agreem ent s.” Our ha v i ng s o i nt er pret ed th e g ua ran te e l ea ds us to bu t on e ou tc om e. T his out com e is man dat ed b y both the con tractu al def inition a scribed by the pa rties to the word “Agreem ent s” and t h e u n d is p ute d fact th at th e con tracts pu rported ly breach ed b y

PHS “w er e notfo u n d i n t h e G ro u n d L e a s e , t h e P ro d u ctS u p p l y A g re e me n t , o r

t h e U t i l i t i es Ag re ement” , i. e. the document s c ompri si ng the “Ag re ements .” Simp ly p ut, the d uti es all eg edl y breache d by PH S fell outs ide the sc ope of Prax air’s g uarantee. Thus , and as 2 a matt er of law , it w as not li abl e for their performanc e or pay ment. In conc lud ing othe rw is e, both the j ur

y and tr ial co urt har mf ull y er re d. W e rev erse the j udg ment of t h e t ri al cour t and render

j udg ment den y ing Ste rl ing recovery against Praxair.

Br ian Qui nn Chief Justice Re a vis, S. J. , n o t p a rt ici p a ti n g.