Opinion issued April 21, 2020

In The

Court of Appeals 

For The 

First District of Texas 

————————————

NO. 01-18-00992-CV

———————————

ARC DESIGNS, INC., Appellant

V.

NABORS INDUSTRIES, INC., Appellee

On Appeal from the 269th District Court

Harris County, Texas

Trial Court Case No. 2015-16752

MEMORANDUM OPINION

Appellee, Nabors Industries, Inc. (“Nabors”), contracted with appellant, Arc 

Designs, Inc. (“ADI”), for the fabrication and construction of certain drilling rig 

equipment. After ADI failed to deliver the equipment as agreed under the terms of 

the parties’ Fabrication and Construction Contract (“Contract”), Nabors terminated 
2

the Contract and sued ADI for breach of contract. ADI brought a counterclaim, 

asserting that Nabors breached the Contract by failing to pay as agreed. The trial 

court rendered summary judgment in favor of Nabors on its claim and awarded it 

damages. The trial court denied ADI’s motion for summary judgment on its 

counterclaim. After a trial to the court on the limited issue of attorney’s fees, the 

trial court awarded Nabors its fees. 

On appeal, ADI presents four issues. In its first issue, ADI contends that the 

trial court erred in granting summary judgment for Nabors because ADI presented 

evidence raising a fact issue regarding the applicable termination and damages

provisions in the Contract. In its second and third issues, ADI contends that the trial 

court erred in granting Nabors’s summary-judgment motion, and denying that of 

ADI, because the trial court misconstrued the Contract terms as providing a right of 

reimbursement and failed to award ADI certain sums due. In its fourth issue, ADI 

contends that the trial court erred in awarding attorney’s fees.

We affirm.

Background

Nabors owns and operates land-based drilling rigs and provides oilfield 

services. ADI is a drilling-structure manufacturing facility and metal fabricator. On 

February 12, 2014, Nabors retained ADI to fabricate and construct five sets (“Sets”) 

of drilling rig components. Each Set was comprised of a mast and a substructure. 
3

The Contract Price was $651,248.00 for each mast and $1,276,667.00 for each 

substructure, or a total of $1,927,915.00 for each Set. The parties agreed, as 

provided in Article 2.2 of the Contract, that Nabors was to pay the Contract Price for 

each Set in installments, based on the completion of certain “milestones” in the 

fabrication and construction process, as follows:

20% of Contract Price within 10 days of execution of [the] Contract by 

both parties.

25% of Contract Price upon [ADI’s] receipt of all structural steel in 

[ADI’s] fabrication facility complete with MTR’s that meet contract 

requirements.

45% of Contract Price upon completing of all Work, including 

electronic delivery of the Equipment’s data book and all API

nameplates affixed to the Equipment.

10% of Contract Price for final payment pursuant to the delivery dates 

set forth on [the Schedule of Delivery].

Pursuant to the terms of Contract, ADI was to deliver one Set per month for 

five consecutive months, beginning in October 2014 and ending in February 2015. 

According to the Schedule of Delivery, Set 1 was to be delivered on October 31, 

2014; Set 2 on November 30, 2014; Set 3 on December 31, 2014; Set 4 on January 

31, 2015; and, Set 5 on February 28, 2015. The Schedule of Delivery included a

“penalty date” occurring 30 days after each due date. And, Article III of the 

Contract, governing delivery, provided:

3.1 [ADI] shall complete the Work as set forth in [Schedule of 

Delivery]. . . . [I]f any of the Equipment is delivered after the 

Penalty Date . . . , then [ADI] shall be liable to [Nabors] for 

liquidated damages in an amount equal to one (1%) of the 
4

Contract Price for each day that delivery is delayed, provided that 

in no event shall [ADI] be liable to [Nabors] for more than ten 

percent (10%) of the Contract Price.

3.2 Time is of the essence with respect to the performance of the 

Work and there shall be no extension or postponement of the 

Delivery Date. The Parties agree that this Article is a material 

term of this Contract for all purposes.

3.3 . . . . Any change to [the Schedule of Delivery] will only be made 

in writing by agreement of the Parties. . . .

In the event that ADI failed to “conduct its operations” under the Contract 

with diligence or “otherwise breached its obligations,” Article IX, “Unsatisfactory 

Performance,” authorized Nabors to elect whether to cover or to pursue other 

remedies under the law or in equity:

9.1 If [ADI] has failed to conduct its operations under this Contract 

in a diligent, skillful or workmanlike manner . . . , or if the [ADI] 

has otherwise breached its obligations hereunder, [Nabors] may 

give [ADI] written notice in which the cause of the 

dissatisfaction shall be specified. Should [ADI] fail to remedy 

the dissatisfaction within five (5) days after the receipt of the 

written notice, [Nabors] may, at its discretion take one of the 

following courses of action:

9.1.1 [Nabors] may retain another Contractor (’’Substitute

Contractor”) to complete the remaining Work. In such 

event [Nabors] shall have no obligation to pay [ADI] any 

additional sums whatsoever and [ADI] shall be 

responsible to pay to [Nabors] the difference between the 

outstanding relevant Purchase Order and the actual cost of 

completing the Work with the Substitute Contractor.

9.1.2 [Nabors] may take over and complete the Work using 

[ADI’s] facilities, equipment and personnel. If [Nabors] 

takes over the Work, [Nabor’s] cost in completing the 

Work with no allowance for use of [ADI’s] facilities, 
5

equipment and personnel shall be deducted from the 

Contract Price . . . .

9.1.3 Upon [Nabors’s] request and pursuant to [Article XI], 

[ADI] shall allow [Nabors] to remove any and all 

Equipment in whatever stages of completion as well as 

other manufactured products related to the Equipment.

9.2 The remedies set forth in this Article are in addition to, and not 

in lieu of any and all other remedies available to [Nabors] in law 

or equity.

And, Article 24.4 provided that the “prevailing party in any lawsuit shall be entitled 

to recover reasonable and necessary attorneys’ fees.”

Article XI, “Termination of the Contract,” provided that Nabors could also 

terminate the Contract, either at will or for unsatisfactory performance under Article 

IX above, as follows: 

11.1 This Contract may be terminated

11.1.1 By [Nabors] upon 10 days’ notice.

. . . .

11.1.3 By [Nabors] for unsatisfactory performance as set 

forth in Article IX above.

 

In the event that Nabors terminated the Contract pursuant to Article 11.1.1, 

i.e., at will, Article 11.2 governed the amounts owed to ADI as follows: 

[Nabors] shall pay to [ADI] all amounts due and owing at the date of 

termination together with reasonable additional costs incurred by [ADI] 

in terminating the Work including if applicable, costs of shipping and 

the costs of cancellation of subcontracts or purchase orders for 

materials, equipment and supplies. In no event shall [Nabors] be 

entitled to payment for any loss of any profit as a result of such 

termination.
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In the event that Nabors terminated the Contract pursuant to Article 11.1.3, 

i.e., for cause based on ADI’s “unsatisfactory performance as set forth in Article IX 

above,” Article 11.4 provided that ADI “shall not be entitled to any compensation 

whatever [sic].” 

It is undisputed that ADI did not deliver Set 1 by the date specified in the 

Schedule of Delivery, that of October 31, 2014. Rather, ADI delivered a portion of 

Set 1, the substructure, on December 15, 2014. Nabors asserts that, not only was the 

substructure almost two months late, but it was defective, causing Nabors to incur 

$175,000.00 to remedy defects. ADI did not complete the mast component of Set 1 

until January 2015. On February 3, 2014, after Sets 2, 3, and 4, which the Schedule 

of Delivery stated were due by November 30, 2014, December 31, 2014, and January 

31, 2015, respectively, were not delivered, Nabors issued a change order to reduce 

the scope of the Contract to Set 1 and the mast component of Set 2. Nabors 

demanded reimbursement of its milestone payments but stated that it was willing to 

reduce this sum by a mutually agreed upon amount for ADI’s expenses on the three 

masts and four substructures being reduced. 

On February 6, 2015, after the parties were unable to reach a resolution, 

Nabors sent ADI a Notice of Termination, stating that it was terminating the 

Contract, pursuant to Article 11.1.3, with respect to Sets 1 through 4, based on ADI’s 

“unsatisfactory performance” under Article IX, i.e., inability to comply with the 
7

agreed delivery deadlines. Nabors demanded, pursuant to Article 11.4, repayment 

of $2,804,681.10 that it had paid toward the equipment that ADI had failed to 

deliver. Noting that the terms of the Contract provided, however, that ADI’s 

obligation to deliver was unconditional and effective notwithstanding any dispute 

regarding payment of some or all of the Contract Price, Nabors demanded that ADI 

deliver Set 5 by February 28, 2015, the remaining pending deadline under the 

Contract. Subsequently, however, after ADI failed to timely deliver Set 5, Nabors 

sent ADI notice that that it was terminating the Contract, pursuant to Article 11.1.3, 

with respect to Set 5, based on ADI’s unsatisfactory performance. 

ADI refused to return any of the sums paid toward the equipment that it had 

failed to deliver and refused to release the mast component of Set 1 unless Nabors 

paid an additional $358,186.40.

Nabors sued ADI, alleging that it had materially breached the Contract by 

failing to deliver the equipment as agreed. Nabors sought reimbursement of

$2,388,228.00 in previous payments, as well as delivery and possession of the mast 

component of Set 1.

ADI filed a counterclaim for breach of contract and quantum meruit, alleging 

that Nabors had taken delivery of the mast component of Set 1, along with some of 

the materials for Sets 2 through 5, and had failed to pay $358,186.40 for work and 

materials supplied under the Contract.
8

Nabors moved for a summary judgment on its breach-of-contract claim, 

asserting that it was entitled to judgment as a matter of law because the Contract 

expressly provided for specific delivery deadlines and expressly stated that time was 

of the essence and that these terms were material. Noting that it was undisputed that 

ADI had failed to timely deliver Set 1, Nabors asserted that such failure to meet the

deadlines in a contract in which time is of the essence, as here, constituted a material 

breach.

Based on ADI’s breach, Nabors asserted that Article 11.1.3 authorized it to 

terminate the Contract for “unsatisfactory performance” as set forth in Article IX. 

Article IX authorized termination for failure to perform in a diligent manner or if 

ADI otherwise breached its obligations, as here. Nabors sent notice to ADI, 

expressly terminating the Contract pursuant to Article 11.1.3. And, Nabors noted 

that Article 11.4 provided that if the Contract were terminated pursuant to Article

11.1.3, “Contractor [ADI] shall not be entitled to any compensation whatever [sic].”

With respect to its damages, Nabors asserted that it had received only one of 

the five Sets for which it had contracted. The Contract Price per Set was 

$1,927,915.00. Nabors asserted that, after subtracting the maximum ten-percent 

penalty under Article 3.1 for late delivery, or $192,791.50, it owed ADI a total of 

$1,735,123.50 for Set 1. At the time of Nabors’s termination of the Contract, it had 

paid ADI a total of $3,948,351.40, including its milestone payments on all five Sets 
9

of equipment. Subtracting the total owed on Set 1 from the total it had paid, Nabors 

sought damages of $2,213,227.90. Nabors presented, as its summary-judgment 

evidence, the Contract; February 3, 2015 change order; February 6, 2015 Notice of 

Termination with respect to Sets 1–4; March 20, 2015 termination letter with respect 

to Set 5; a table of costs; affidavit of Nabors’s Senior QA/QC Manager of the 

Engineering Department, Kevin Pennington; various emails between Nabors and 

ADI; deposition excerpts of ADI corporate representative, Joshua W. Norris; and 

ADI’s responses to discovery.

In its summary-judgment response, ADI argued that Nabors had simply 

terminated the Contract at will, pursuant to Article 11.1.1, and not for cause, and 

thus it was not entitled to any reimbursement of its previous payments. ADI asserted 

that Nabors had previously stated that it was re-evaluating the Contract due to the 

downturn in the oil market. And, ADI had delivered equipment as much as two 

months late under a previous contract between the parties without issue. Further, 

Article 3.1 provided for a late delivery penalty. And, because the parties had thereby 

agreed to liquidated damages, late delivery could not serve as cause for termination 

under Article XI of the Contract. ADI argued that Article 2.2 of the Contract 

provided that milestone payments are due once the milestone is completed and, 

because ADI had completed the initial 20 percent milestones at the time of 

termination, such sums were not subject to refund. 
10

ADI also filed a cross-motion for summary judgment, arguing that it was 

entitled to judgment as a matter of law on its breach-of-contract counterclaim. It 

asserted that neither Article 2.2 nor Article 11 provided for refunds. Further, ADI 

argued, the evidence established that it was entitled to $358,186.40 in unpaid 

milestone payments for the mast component of Set 1 because ADI had completed 

the work, and Nabors had approved and taken delivery of it.

The trial court granted summary judgment in favor of Nabors on its breachof-contract claim and awarded it damages in the amount of $2,213,227.90. The trial 

court denied ADI’s competing motion for summary judgment and dismissed ADI’s 

counterclaim for breach of contract. After a trial to the court on the limited issue of 

attorney’s fees, the trial court found that Nabors was entitled to reasonable and 

necessary attorneys’ fees based on the terms of the Contract and pursuant to Texas 

Civil Practice & Remedies Code section 38.001. The trial court awarded Nabors 

attorney’s fees in the amount of $161,023.51 and fees for appeal.

Summary Judgment

In its first issue, ADI argues that the trial court erred in granting summary 

judgment in favor of Nabors on its claim because ADI presented evidence raising a 

fact issue regarding the applicable termination and damages provisions in the 

Contract. In its second and third issues, ADI argues that the trial court erred in 

granting Nabors’s summary-judgment motion, and denying that of ADI, because the
11

trial court misconstrued the Contract as providing a right of reimbursement of funds 

that Nabors had paid prior to its termination of the Contract and the trial court failed 

to award ADI certain sums outstanding on Set 1.

A. Standard of Review and Overarching Legal Principles

We review a trial court’s summary judgment de novo. Valence Operating Co. 

v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). In conducting our review, we take as 

true all evidence favorable to the non-movant, and we indulge every reasonable 

inference and resolve any doubts in the non-movant’s favor. Id. If a trial court 

grants summary judgment without specifying the grounds for granting the motion, 

we must uphold the trial court’s judgment if any of the asserted grounds are

meritorious. Beverick v. Koch Power, Inc., 186 S.W.3d 145, 148 (Tex. App.—

Houston [1st Dist.] 2005, pet. denied).

In a traditional motion for summary judgment, the movant has the burden to 

establish that there exists no genuine issue of material fact and that it is entitled to 

judgment as a matter of law. See TEX. R. CIV. P. 166a(c); KPMG Peat Marwick v. 

Harrison Cty. Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). When a plaintiff 

moves for summary judgment on its own claim, the plaintiff must conclusively prove 

all essential elements of its cause of action. MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 

(Tex. 1986). When a defendant moves for a traditional summary judgment, it must 

either: (1) disprove at least one essential element of the plaintiff’s cause of action or 
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(2) plead and conclusively establish each essential element of an affirmative defense, 

thereby defeating the plaintiff’s cause of action. See Rhône–Poulenc, Inc. v. Steel, 

997 S.W.2d 217, 222–23 (Tex. 1999); Cathey v. Booth, 900 S.W.2d 339, 341 (Tex. 

1995). Once the movant meets its burden, the burden shifts to the non-movant to 

raise a genuine issue of material fact precluding summary judgment. Centeq Realty, 

Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995). The evidence raises a genuine

issue of fact if reasonable and fair-minded jurors could differ in their conclusions in 

light of all of the summary-judgment evidence. Goodyear Tire & Rubber Co. v. 

Mayes, 236 S.W.3d 754, 755 (Tex. 2007).

When both parties move for summary judgment on the same issue and the 

trial court grants one motion and denies the other, as here, the reviewing court 

considers the summary judgment evidence presented by both sides, determines all 

questions presented, and if the reviewing court determines that the trial court erred, 

renders the judgment that the trial court should have rendered. Valence Operating 

Co., 164 S.W.3d at 661.

B. Breach of Contract

To prevail on its respective breach-of-contract claim, each party was required 

to establish (1) a valid contract between the parties; (2) that the movant tendered 

performance or was excused from doing so; (3) that the non-movant breached the 

terms of the contract; and (4) that the movant sustained damages as a result of the
13

breach. AMS Const. Co. v. K.H.K. Scaffolding Hous., Inc., 357 S.W.3d 30, 41 (Tex. 

App.—Houston [1st Dist.] 2011, pet. dism’d); B&W Supply, Inc. v. Beckman, 305 

S.W.3d 10, 16 (Tex. App.—Houston [1st Dist.] 2009, pet. denied).

Here, it is undisputed that the Contract constitutes a valid, enforceable 

agreement. It is also undisputed that ADI did not deliver Set 1 by the agreed upon 

date in the Schedule of Delivery and did not deliver Sets 2–5. It is further undisputed 

that Nabors terminated the Contract. The parties disagree as to the applicable 

termination provision in the Contract, i.e., Article 11.1.1 (authorizing termination at 

will) or Article 11.1.3 (authorizing termination for cause), which in turn governs the 

corresponding measure of damages. 

1. Applicable Termination and Damages Provisions

In construing a written contract, a court must ascertain and give effect to the 

true intentions of the parties as expressed in the writing itself. Italian Cowboy 

Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011). 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. Id. We 

begin our analysis with the contract’s express language. Id. And we analyze the 

provisions of a contract “with reference to the whole agreement.” Frost Nat’l Bank 

v. L & F Dists., Ltd., 165 S.W.3d 310, 312 (Tex. 2005); see also Seagull Energy 

E&P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006) (“No single 
14

provision taken alone will be given controlling effect; rather, all the provisions must 

be considered with reference to the whole instrument.”). Contract terms will be 

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., 164 S.W.3d at 662. “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 applying the pertinent contract construction rules, the contract can be 

given a certain or definite legal meaning or interpretation, then it is not ambiguous, 

and we will construe the contract as a matter of law. Id. If a contract “is subject to 

two or more reasonable interpretations after applying the pertinent rules of 

construction, the contract is ambiguous, creating a fact issue on the parties’ intent.” 

J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). However, a 

contract is not ambiguous merely because the parties disagree on its meaning. 

Seagull Energy E & P, Inc., 207 S.W.3d at 345. Only if a contract is ambiguous 

may we consider the parties’ interpretation and consider extraneous evidence to 

determine the true meaning of the contract. Italian Cowboy Partners, Ltd., 341 

S.W.3d at 333–34.
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Here, Article III of the Contract, governing delivery, provides:

3.1 [ADI] shall complete the Work as set forth in [the Schedule of 

Delivery]. . . . [I]f any of the Equipment is delivered after the 

Penalty Date . . . , then [ADI] shall be liable to [Nabors] for 

liquidated damages in an amount equal to one (1%) of the 

Contract Price for each day that delivery is delayed, provided that 

in no event shall [ADI] be liable to [Nabors] for more than ten 

percent (10%) of the Contract Price.

3.2 Time is of the essence with respect to the performance of the 

Work and there shall be no extension or postponement of the 

Delivery Date. The Parties agree that this Article is a material 

term of this Contract for all purposes.

(Emphasis added.) Thus, Article III provides that ADI was to complete the work 

by the deadlines set forth in the Schedule of Delivery. The parties agreed that time 

was of the essence, that there would be no extensions, and that this term is material. 

It is undisputed that ADI did not timely deliver Set 1 and did not deliver the 

remaining Sets. Thus, ADI’s failure to timely deliver the equipment at issue 

constitutes a material breach of the Contract. See Mustang Pipeline Co. v. Driver 

Pipeline Co., 134 S.W.3d 195, 196 (Tex. 2004); Henry v. Masson, 333 S.W.3d 825, 

835 (Tex. App.—Houston [1st Dist.] 2010, no pet.); see also Kennedy Ship & 

Repair, L.P. v. Pham, 210 S.W.3d 11, 21 (Tex. App.—Houston [14th Dist.] 2006, 

no pet.) (holding that failure to timely deliver goods constituted breach).

The summary-judgment evidence shows that, based on ADI’s breach of the 

Contract, Nabors, on February 6, 2015, sent ADI a Notice of Termination, stating 
16

that, pursuant to Article 11.1.3, it was terminating the Contract with respect to Sets 

1–4:

Based on our numerous written attempts to get [ADI] to comply with 

the delivery deadlines for the first four [Sets] specified in the [Contract] 

and [ADI’s] inability to comply given ample opportunity, pursuant to 

Articles IX and XI of the Agreement, Nabors is hereby providing you 

with notice that the [Contract] is being terminated under Article 11.1.3 

for unsatisfactory performance. In accordance with the terms of Section 

11.4 of the Agreement, Nabors demands return of all sums paid to date 

from Nabors, exclusive of the first substructure already delivered, 

totaling $2,804,681,10. In addition, Nabors requests, pursuant to 

Section 9.1.3 that Nabors be allowed to remove any and all Equipment 

in whatever stages of completion as well as other manufactured 

products related to the Equipment.

(Emphasis added.) 

Further, Nabors’s evidence shows that, on March 5, 2015, it sent ADI notice 

that, pursuant to Article 11.1.3, it was terminating the Contract with respect to Set 

5:

You were notified on February 6, 2015 that the [Contract] was 

terminated with respect to the first four [Sets] specified therein under 

Article 11.1.3 for unsatisfactory performance. 

You have already demonstrated [ADI’s] inability to comply with the 

[Contract] with respect to the first four [Sets]. Given, your recent 

correspondence, you are clearly unwilling to comply with the 

Agreement with respect to the fifth [Set]. You are hereby notified that 

the Agreement is being terminated under Article 11.1.3 for 

unsatisfactory performance with regard to [Set 5], which was due on 

February 28, 2015. Pursuant to Section 11.4 of the [Contract], Nabors 

demands return of all sums paid for the fifth set, totaling $255,333.40.

(Emphasis added.) 
17

Article XI, “Termination of the Contract,” authorizes Nabors to terminate the 

Contract, either at will or for unsatisfactory performance, as follows: 

11.1 This Contract may be terminated

11.1.1 By [Nabors] upon 10 days’ notice.

. . . .

11.1.3 By [Nabors] for unsatisfactory performance as set 

forth in Article IX above.

 

In the event that Nabors terminated the Contract pursuant to Article 11.1.1, 

i.e., at will, Article 11.2 provides the following damages model: 

[Nabors] shall pay to [ADI] all amounts due and owing at the date of 

termination together with reasonable additional costs incurred by [ADI] 

in terminating the Work including if applicable, costs of shipping and 

the costs of cancellation of subcontracts or purchase orders for 

materials, equipment and supplies. In no event shall [ADI] be entitled 

to payment for any loss of any profit as a result of such termination.

However, in the event that Nabors terminated the Contract pursuant to Article 

11.1.3, i.e., for cause based on ADI’s “unsatisfactory performance as set forth in 

Article IX,” as here, Article 11.4 provides that ADI “shall not be entitled to any 

compensation whatever [sic].” 

Article IX defines “unsatisfactory performance” as including any failure by 

ADI to conduct its operations diligently or any breach of the Contract by ADI and 

authorizes Nabors to elect to cover or to pursue “any and all other remedies 

available to [Nabors] in law or equity”:

9.1 If [ADI] has failed to conduct its operations under this Contract 

in a diligent, skillful or workmanlike manner . . . , or if the [ADI] 
18

has otherwise breached its obligations hereunder, [Nabors] may 

give [ADI] written notice in which the cause of the 

dissatisfaction shall be specified. Should [ADI] fail to remedy 

the dissatisfaction within five (5) days after the receipt of the 

written notice, [Nabors] may, at its discretion take one of the 

following courses of action:

9.1.1 [Nabors] may retain another Contractor (“Substitute 

Contractor”) to complete the remaining Work. In such 

event [Nabors] shall have no obligation to pay [ADI] any 

additional sums whatsoever and [ADI] shall be 

responsible to pay to [Nabors] the difference between the 

outstanding relevant Purchase Order and the actual cost of 

completing the Work with the Substitute Contractor.

9.1.2 [Nabors] may take over and complete the Work using 

[ADI’s] facilities, equipment and personnel . . . .

9.1.3 Upon [Nabors’s] request and pursuant to [Article XI], 

[ADI] shall allow [Nabors] to remove any and all 

Equipment in whatever stages of completion as well as 

other manufactured products related to the Equipment.

9.2 The remedies set forth in this Article are in addition to, and not 

in lieu of any and all other remedies available to [Nabors] in law 

or equity.

(Emphasis added.) Thus, the summary-judgment evidence shows that Nabors 

expressly terminated the Contract under Article 11.1.3, based on ADI’s 

“unsatisfactory performance,” and that the Contract authorized such termination. 

ADI, in its summary-judgment response and in its brief, argues that it

presented evidence creating a fact issue regarding whether Nabors actually 

terminated the Contract at will, pursuant to Article 11.1.1, and not for cause, 

pursuant to Article 11.1.3. Specifically, ADI points to an email from Nabors, dated 

January 15, 2015, in which Nabors, noting that the “global drilling industry had 
19

recently begun showing signs of a dramatic slowdown,” asked ADI for an 

“immediate update on cost to date for the remaining mast and sub orders.” And, 

Nabors stated that the purpose of its request was to “determine whether [to] proceed 

or cancel some or all of the remaining orders.” ADI argues that this evidence 

establishes that Nabors’s representation that its termination of the Contract was

based on ADI’s failure to timely deliver equipment was simply pretext for its at-will 

termination based on market conditions.

Taking as true, as we must, the evidence that Nabors considered whether to 

proceed on its outstanding orders based on market conditions does not, however, 

negate or contradict the evidence that, ultimately, Nabors expressly terminated the 

Contract pursuant to Article 11.1.3, “for unsatisfactory performance as set forth in 

Article IX,” based on ADI’s undisputed failure to deliver the Sets as agreed. 

Next, ADI argues that the “parties’ ongoing course of conduct” demonstrates 

that Nabors did not actually terminate the Contract for cause. ADI points to its 

summary-judgment evidence that Nabors previously accepted late delivery of three 

rigs in “a prior contract between the Parties in 2013-2014.”

A “‘course of dealing’ is a sequence of conduct concerning previous 

transactions between the parties to a particular transaction that is fairly to be regarded 

as establishing a common basis of understanding for interpreting their expressions 

and other conduct.” TEX.BUS. & COM.CODE § 1.303. Because a sequence of events
20

is required, a single transaction cannot constitute a course of dealing. See Shell 

Trading (US) Co. v. Lion Oil Trading & Transp., Inc., No. 14-11-00289-CV, 2012 

WL 3958029, at *6, 8 (Tex. App.—Houston [14th Dist.] Sep. 11, 2012, pet. denied) 

(mem. op.). 

ADI further argues that Nabors could not have terminated the Contract for 

cause under Article 11.1.3 because Article 3.1 of the Contract provides that the 

remedy for a failure to timely deliver is “not termination but merely a late delivery 

penalty of no more than 10% of the Contract price.” Without citation to authority, 

ADI asserts that, because the parties “agreed to liquidated damages in the event of 

late delivery, late delivery cannot be a cause for termination.” Again, Article 3.1 

states:

3.1 [ADI] shall complete the Work as set forth in [Schedule of 

Delivery]. . . . [I]f any of the Equipment is delivered after the 

Penalty Date . . . , then [ADI] shall be liable to [Nabors] for 

liquidated damages in an amount equal to one (1%) of the 

Contract Price for each day that delivery is delayed, provided that 

in no event shall [ADI] be liable to [Nabors] for more than ten 

percent (10%) of the Contract Price.

Setting aside that ADI seems to posit that it could simply accept a ten percent 

penalty and perpetually delay delivery of any equipment, ADI’s argument overlooks 

that we must analyze Article 3.1 with reference to the whole agreement and give 

effect to all the provisions so that none will be rendered meaningless. See Italian 

Cowboy Partners, Ltd., 341 S.W.3d at 333 (noting that we examine and consider 
21

entire writing in effort to harmonize); Frost Nat’l Bank, 165 S.W.3d at 312; see also 

Seagull Energy E&P, Inc., 207 S.W.3d at 345 (“No single provision taken alone will 

be given controlling effect; rather, all the provisions must be considered with 

reference to the whole instrument.”). 

The language used in Article 3.1 caps the amount of damages for which ADI 

will be liable in the event that Nabors sought recovery on a claim for delay damages, 

i.e., in a claim for consequential damages based on ADI failing to deliver the 

equipment on time. See Valence Operating Co., 164 S.W.3d at 662 (noting we give 

contract terms their plain, ordinary, and generally accepted meanings). Article 3.1 

does not state that it constitutes the sole remedy in the event of a termination of the 

Contract. 

Rather, as discussed above, Article XI, which governs “Termination of the 

Contract,” has its own damages provisions, i.e., Articles 11.2 and 11.4. And, Article 

XI expressly authorizes Nabors to “terminate” the Contract for “unsatisfactory 

performance” under Article IX, which includes circumstances in which ADI has 

“failed to conduct its operations under this Contract in a diligent, skillful or 

workmanlike manner . . . , or if [ADI] has otherwise breached its obligations 

hereunder.” (Emphasis added.)

Taking as true all evidence favorable to ADI and indulging every reasonable 

inference in its favor, we conclude that Nabors has conclusively established that it 
22

terminated the Contract pursuant to Article 11.1.3, “for unsatisfactory performance 

as set forth in Article IX,” based on ADI’s undisputed failure to deliver the Sets as 

agreed. 

We overrule ADI’s first issue.

2. Nabors’s Damages

In its second issue, ADI argues that the trial court erred in granting Nabors’s

motion for summary judgment as to its damages because ADI established that the 

trial court misconstrued the Contract as authorizing a “reimbursement” or a “refund” 

of the first milestone payment pertaining to each Set.

We concluded above that Nabors terminated the Contract pursuant to Article 

11.1.3. Article 11.4 expressly provides that if Nabors terminates the Contract 

pursuant to Article 11.1.3, ADI “shall not be entitled to any compensation whatever 

[sic].” 

Nabors’s summary-judgment evidence shows that Pennington, in his 

affidavit, testified that, at the time of Nabors’s termination of the Contract, it had 

paid ADI a total of $3,948,351.40 but had received only 1 of the 5 Sets for which it 

had contracted. Thus, testified Pennington, ADI was entitled to payment for Set 1, 

or $1,927,915.00, less the ten percent penalty under Article 3.1 for its late delivery 

of the equipment, or $197,791.50, for a total of $1,735,123.50. And, subtracting this 

amount from the amount that Nabors paid had ADI, $3,948,351.40, established
23

Nabors’s damages in the amount of $2,213,227.90. The trial court’s judgment

reflects that it awarded Nabors damages in the amount of $2,213,227.90. 

ADI, in its summary-judgment response, asserted that it was entitled to retain 

Nabors’s initial “20% Milestone payments” under Article 2.2 for each of the

“remaining rigs,” i.e., Sets 2 through 5. Article 2.2 provides for payment of “20% 

of [the] Contract Price within 10 days of execution of [the] Contract by both parties.” 

ADI asserts that this initial 20 percent functioned as a “down payment” or “booking 

fee” on Sets 2 through 5 and that, notwithstanding that they were not delivered,

neither Article 2.2 nor Article XI provides for any “refund” of milestone payments. 

Again, Article 11.4 expressly provides that if the Contract is terminated 

pursuant to Article 11.1.3, as here, then ADI “shall not be entitled to any 

compensation whatever [sic].” 

We conclude that ADI did not present evidence raising a genuine issue of 

material fact concerning the calculation of Nabors’s damages and that Nabors 

conclusively established its damages. We hold that the trial court did not err in 

granting summary judgment for Nabors on its breach-of-contract claim.

We overrule ADI’s second issue.

3. ADI’s Damages

In its third issue, ADI argues that the trial court erred in denying its motion 

for summary judgment on its counterclaim because its evidence shows that Nabors
24

breached the contract by failing to pay an outstanding balance of $358,186.40 for 

“the unpaid Milestone payments related to Mast 1,” i.e. the mast component of Set 

1. In support, ADI presented the affidavit of its representative, Norris, who testified, 

in pertinent part:

4. Under Section 2.2 of the Contract, Nabors was required to pay 

20% of the Contract price of each mast or substructure to ADI 

within 10 days of the execution of the Contract, 25% of the 

Contract price of each mast or substructure to ADI upon receipt 

of all structural steel for each mast or substructure, 45% of the 

Contract price for each mast or substructure to ADI upon 

completion of all work for each mast or substructure, and 10% 

of the Contract price for each mast or substructure to ADI upon 

delivery of each mast or substructure. . . . Nabors has made all 

payments required of it by Section 2.2 of the Contract, except for 

the 45% and 10% payments regarding Mast 1. . . . Nabors owes 

ADI a balance of $358,186.40 for those unpaid Milestones.

5. ADI has made not less than two (2) written demands to Nabors 

requesting payment of the $358,186.40 balance due for the 

unpaid Mast 1 Milestones but, as of this date, Nabors has refused 

to pay. . . .

(Emphasis added.)

As discussed above, the trial court’s judgment reflects that the trial court 

credited ADI with the full Contract price of Set 1, including both the mast and 

substructure, against the damages that the trial court awarded to Nabors. Thus, the 

record does not support ADI’s issue on appeal. Accordingly, we hold that the trial 

court did not err in denying ADI’s motion for summary judgment.

We overrule ADI’s third issue.
25

Attorney’s Fees

In its fourth issue, ADI argues that the trial court erred in awarding attorney’s 

fees to Nabors that “(1) exceed what was reasonable and necessary to achieve the 

results obtained; and/or (2) were not reduced sufficiently to segregate Nabors’

warranty claims.” ADI asserts that, during trial on the limited issue of attorney’s 

fees, its expert, Stephen A. Mendel, testified that the “fee invoices produced by 

Nabors included hours worked that were not necessary to achieve the results that 

Nabors’s counsel obtained” and included discovery that was “irrelevant to the 

outcome of the case.” ADI asserts that a “reasonable fee for the results Nabors’ 

counsel achieved would be approximately $45,000.00.” ADI further asserts that, 

although Nabors segregated its fees pertaining to previous warranty claims and 

reduced its fees by “5-10%” for related tasks, “the reduction should have been 

19.4%.”

In its brief, ADI presents its assertions globally and does not present argument 

or analysis with respect to any specific fees or discovery matters. Further, ADI does 

not present a single citation to legal authority to support its argument under this 

point. As such, we conclude that this issue is inadequately briefed and presents 

nothing for our review. See TEX. R. APP. P. 38.1(i) (“The brief must contain a clear 

and concise argument for the contentions made, with appropriate citations to 

authorities . . . .”); Tesoro Petroleum Corp. v. Nabors Drilling USA, Inc., 106 
26

S.W.3d 118, 128 (Tex. App.—Houston [1st Dist.] 2002, pet. denied) (concluding

that “Rule 38 requires [the appellant] to provide us with such discussion of the facts 

and the authorities relied upon as may be requisite to maintain the point at issue” and 

that “[t]his is not done by merely uttering brief conclusory statements, unsupported 

by legal citations,” and holding that appellant waived its complaints “[b]y presenting 

such attenuated, unsupported argument”); see also Strange v. Cont’l Cas. Co., 126 

S.W.3d 676, 678 (Tex. App.—Dallas 2004, pet. denied) (“An issue on appeal 

unsupported by argument or citation to any legal authority presents nothing for the 

court to review.”).

We hold that ADI has waived its fourth issue.

Conclusion

We affirm the trial court’s judgment.

Sherry Radack

Chief Justice 

Panel consists of Chief Justice Radack and Justices Kelly and Goodman.