COURT OF APPEALS

SECOND DISTRICT OF TEXAS

FORT WORTH

NO. 02-15-00339-CV 

K. HOVNANIAN HOMES–DFW, LLC APPELLANT

V.

THE POWDERMAKER FIRST 

FAMILY LIMITED PARTNERSHIP

APPELLEE 

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FROM THE 211TH DISTRICT COURT OF DENTON COUNTY

TRIAL COURT NO. 14-00737-211

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MEMORANDUM OPINION1

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Appellant K. Hovnanian Homes–DFW, LLC (Hovnanian) appeals from the 

trial court’s judgment, entered after a bench trial, in favor of appellee The 

Powdermaker First Family Limited Partnership (Powdermaker) on 

Powdermaker’s breach-of-contract claim. Because we conclude that the trial 

 

1See Tex. R. App. P. 47.4.
2

court improperly interpreted the contract, we reverse the trial court’s judgment 

and remand for further proceedings.

I. BACKGROUND

A. CONTRACT OF SALE AND AMENDMENT

On July 15, 2013, Powdermaker and Hovnanian signed a contract of sale

(the contract) under which Powdermaker agreed to sell 100 acres of real property 

to Hovnanian. Hovnanian placed $100,000 in escrow with the title company as 

an earnest-money deposit, which would be applied as a credit against the 

eventual purchase price of $7 million. Hovnanian was contractually obligated to 

deposit $400,000 in additional earnest money once Hovnanian received “zoning 

and development approvals.” In section 5.4 of the contract, which was entitled 

“Approval of Inspections,” Hovnanian could unilaterally terminate the contract by 

a certain date if it had not previously given Powdermaker written notice of its 

intent to continue the contract:

If [Hovnanian] determines at any time prior to the expiration of the 

Inspection Period[

2

] that the Property is not satisfactory to 

[Hovnanian] for any reason or no reason, in [Hovnanian’s] sole 

discretion, or [Hovnanian] has not obtained the Zoning and 

Development Approvals then [Hovnanian] may terminate this 

Contract by delivering written notice of termination to [Powdermaker] 

prior to the end of the Inspection Period. Additionally, if [Hovnanian] 

shall fail to give [Powdermaker] written notice on or prior to the end 

 

2The inspection period was contractually defined as “a period of time 

commencing on the Effective Date and ending at 6:00 p.m. Dallas, Texas, time 

on the ninetieth (90th) day after the Effective Date.” The effective date was the 

date the title company received “a fully executed counterpart” of the contract. 

The record shows that the title company received the contract on July 15, 2013. 
3

of the Inspection Period that [Hovnanian] wishes to continue this 

Contract then this Contract shall automatically terminate at the end 

of the Inspection Period. If [Hovnanian] properly terminates this 

Contract or if this Contract automatically terminates pursuant to this 

Section 5.4, then this Contract shall be terminated, the Title 

Company shall return the Earnest Money Deposit to [Hovnanian], 

and neither party shall have any further rights, duties or 

obligations. . . . If [Hovnanian] timely delivers to [Powdermaker] 

written notice of [Hovnanian’s] intention to continue this Contract, the 

conditions of this Section 5.4 shall be deemed satisfied, and 

[Hovnanian] may not thereafter terminate this Contract pursuant to 

this section 5.4. 

Hovnanian could extend the contractual inspection period upon notice to 

Powdermaker:

[I]n the event [Hovnanian] has not obtained the Zoning and 

Development Approvals prior to the then current expiration date of 

the Inspection Period, [Hovnanian] shall have the right to extend the 

Inspection Period for up to three (3) periods of thirty (30) days each 

by . . . sending written notice to [Powdermaker] of such election to 

extend the Inspection Period before the then scheduled expiration 

date of the Inspection Period, and . . . sending written notice to the 

Title Company to release [$25,000] of the Earnest Money Deposit 

then on deposit with the Title Company to [Powdermaker] in 

connection with the first thirty (30) day extension, [$10,000] with 

respect to the second thirty (30) day extension and [$20,000] with 

respect to the third thirty (30) day extension. 

Section 5.4 further provided for liquidated damages for Powdermaker if 

Hovnanian terminated the contract after notifying Powdermaker of its intent to 

continue the contract:

However, should [Hovnanian] cause this Contract to terminate . . ., 

[Hovnanian] shall pay [Powdermaker] the sum of $250,000.00 within 

five (5) days of termination . . . . [Hovnanian’s] obligation to pay 

$250,000.00 . . . shall in no way limit, replace, or reduce 

[Powdermaker’s] right to additional funds from the Earnest Money 

Deposit. 
4

The general requirements for any provided notices were governed by section 

14.5 of the contract:

Any notice provided or permitted to be given under this Contract 

must be in writing and may be served by depositing the same in the 

United States Mail, postage prepaid, certified or registered mail with 

return receipt requested, or by delivering the same in person to the 

party to be notified via a delivery service, Federal Express or any 

other nationally recognized overnight courier service that provides a 

return receipt . . ., or by facsimile copy transmission with proof of 

receipt. 

Finally and particularly relevant to the appeal before us, section 14.16 provided 

that the contract could be amended and that any amendment or modification 

“must be made in writing and signed or acknowledged in writing by both parties.” 

On October 10, 2013, Hovnanian and Powdermaker signed an

amendment to the contract, entitled “SECOND AMENDMENT TO CONTRACT 

OF SALE” (the amendment).3 The amendment “modified and amended” the 

contract to provide that any reference to “Inspection Period” in the contract would 

mean “a period of time commencing on the Effective Date and ending at 6:00 

p.m. Dallas, Texas, time on November 13, 2013.” The amendment further 

provided that “each and every of the terms and provisions of the Contract [not 

modified by the amendment] are unchanged and continue[] in full force and 

effect.” In November 2013, Hovnanian and Powdermaker by email discussed

 

3This amendment was a “second” amendment, and Powdermaker alleged 

that the first amendment was a similar amendment to the inspection period. The 

first amendment is not a part of the record on appeal and, indeed, is not at issue.
5

amending the contract to again extend the inspection period, but this amendment 

was never agreed to or signed. 

No further action was taken on the contract as amended and Hovnanian 

believed that the contract had automatically terminated without penalty under 

section 5.4 at the end of the amended inspection period on November 13, 2013. 

As a result, Hovnanian did not pay Powdermaker the $250,000 in liquidated 

damages or the remaining $98,500 in earnest money as provided in section 5.4. 

B. UNDERLYING LITIGATION

Powdermaker filed suit against Hovnanian, raising a claim for breach of 

contract. Powdermaker alleged that by amending the contract to extend the 

inspection period, Hovnanian necessarily notified Powdermaker under section 

5.4 of its intent to continue the contract, which triggered Hovnanian’s contractual 

obligation to pay Powdermaker under section 5.4 because the contract was 

terminated after the notice of intent to continue. In short, Powdermaker believed 

that the amendment was Hovnanian’s written notice under section 5.4 that it 

intended to continue the contract. Hovnanian answered and raised several 

affirmative defenses, including payment, release, failure to mitigate, and waiver. 

Hovnanian also raised a counterclaim for its attorney’s fees, which it alleged 

were provided for in the contract: “Should either party be required to retain an 

attorney to enforce its obligations hereunder, the prevailing party shall be entitled 

to recover from the non-prevailing party its reasonable attorneys’ fees incurred in 

such enforcement.” Based on a jury-trial waiver in the contract, the trial court
6

conducted a bench trial on February 17 and April 13, 2015. After Powdermaker 

rested its case, Hovnanian moved for judgment in its favor, which was denied. 

See Tex. R. Civ. P. 268. After both Powdermaker and Hovnanian closed, 

Hovnanian again moved for judgment, which the trial court denied. 

C. POST-TRIAL

On July 31, 2015, the trial court signed a final judgment in favor of 

Powdermaker, awarding it $348,500 in damages and $67,765.50 in attorney’s 

fees, and rendered a take-nothing judgment on Hovnanian’s counterclaim. 

Hovnanian filed a request for findings of fact and conclusions of law. See Tex. R. 

Civ. P. 296. The trial court entered findings and conclusions, concluding that the 

contract was unambiguous, finding that Hovnanian “gave written notice of its 

intention to continue the Contract in full force and effect,” and finding that it 

thereafter “terminated the Contract pursuant to Section 5.4.” The trial court 

concluded that this notice and subsequent termination triggered Hovnanian’s

duty to pay Powdermaker the liquidated damages provided in section 5.4. 

Hovnanian appeals and argues that (1) the trial court’s interpretation of the 

amendment as a notice to continue “is unsupported by the plain language [of the 

contract], fails to give meaning to each provision, fails to harmonize the 

provisions, and leads to absurd results” and (2) the evidence was legally, or 

alternatively factually, insufficient to support the trial court’s implicit finding that 

the amendment was a written notice to continue. Powdermaker responds that 

the amendment was a notice of intent to continue that complied with the 
7

contractual notice requirements in section 14.5, rendering the trial court’s 

interpretation of the contract legally correct, and that the evidence showed 

Hovnanian breached the contract by failing to pay the section 5.4 damages upon 

termination. 

II. STANDARDS OF REVIEW

A. CONTRACT INTERPRETATION 

In attacking the trial court’s judgment, Hovnanian recites the standards of 

review applicable to findings and conclusions along with the standards used to 

determine whether sufficient evidence supported the challenged findings and 

conclusions. But this is a case involving the interpretation of a contract. The trial 

court concluded, and no party disputes on appeal, that the contract was 

unambiguous. See Friendswood Dev. Co. v. McDade & Co., 926 S.W.2d 280, 

283 (Tex. 1996) (holding whether a contract is unambiguous is a question of 

law). Accordingly, extrinsic evidence of the parties’ intent or the meaning of the 

contract’s terms may not be considered. See Kachina Pipeline Co. v. Lillis, 

471 S.W.3d 445, 450 (Tex. 2015) (op. on reh’g) (holding extrinsic evidence 

admissible only to interpret ambiguous contract). Thus, the traditional 

sufficiency-of-the-evidence standards are a poor fit for Hovnanian’s initial,

straightforward question of contract interpretation, which is an issue of law that 

we determine de novo. See, e.g., Unit Petroleum Co. v. David Pond Well Serv., 

Inc., 439 S.W.3d 389, 395–96 (Tex. App.—Amarillo 2014, pet. denied) 

(reviewing, after bench trial involving interpretation of oil-and-gas lease, trial 
8

court’s interpretation of lease under standards of contract construction as a 

matter of law). Hovnanian recognizes this by arguing in its reply that this court 

may not address the evidence regarding any breach by Hovnanian without first 

determining the appropriate interpretation of the contract as a matter of law. 

Because Hovnanian’s first issue attacks the legal correctness of the trial court’s 

interpretation of the contract, we will apply the traditional rules of contract 

interpretation to determine, as a matter of law, whether the trial court erred in its 

construction of the contract. See Kachina, 471 S.W.3d at 449 (“At issue here is 

the trial court’s construction of the Agreement’s . . . provision[s]. The 

construction of an unambiguous contract is a question of law, also reviewed de 

novo.”). 

In construing an unambiguous contract, we consider the entire writing and 

attempt to harmonize and give effect to all of the contract’s provisions such that 

none are rendered meaningless. See id. at 450; Frost Nat’l Bank v. L & F 

Distribs., Ltd., 165 S.W.3d 310, 312 (Tex. 2005). “No single provision taken 

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

with reference to the whole instrument.” Coker v. Coker, 650 S.W.2d 391, 393 

(Tex. 1983). We are to give contractual terms their “plain and ordinary meaning” 

unless the contract itself shows that a different meaning was intended. 

See Dynegy Midstream Servs., Ltd. P’ship v. Apache Corp., 294 S.W.3d 164, 

168 (Tex. 2009). We presume that the parties intended for every clause to have 

some effect. See Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 
9

1996). The intent of the parties must be taken from the agreement and the 

unambiguous contract must be enforced as written. See id. All writings that 

relate to the same transaction must be interpreted together even if not executed 

at the same time. DeWitt Cty. Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 102 (Tex. 

1999); Fort Worth Transp. Auth. v. Thomas, 303 S.W.3d 850, 858 (Tex. App.—

Fort Worth 2009, pet. denied).

B. FINDINGS AND CONCLUSIONS

Hovnanian also challenges the sufficiency of the evidence to support the 

trial court’s conclusion that Hovnanian breached the contract by failing to pay the 

damages provided in section 5.4 based on the trial court’s finding that Hovnanian 

gave written notice of its intent to continue under that same section. We review 

conclusions of law de novo, affording them no deference. See Quick v. City of 

Austin, 7 S.W.3d 109, 116 (Tex. 1998); State v. Heal, 917 S.W.2d 6, 9 (Tex. 

1996) (op. on reh’g). A trial court’s findings of fact have the same force and 

dignity as a jury’s answers to jury questions and are reviewable for legal and 

factual sufficiency of the evidence to support them by the same standards. 

Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). 

III. APPLICATION

Hovnanian specifically attacks the trial court’s conclusions that Hovnanian 

gave written notice of its intent to continue the contract before the inspection 

period expired, thereby triggering its duty to pay Powdermaker liquidated 

damages and a larger portion of its earnest-money deposit after the contract 
10

subsequently terminated. In short, Hovnanian argues that the amendment may 

not be interpreted to equate to a notice of intent to continue the contract under 

section 5.4. If the amendment was a notice of intent to continue, Hovnanian was 

required to pay the damages under section 5.4 when the contract terminated; if it 

was not, Hovnanian could terminate the contract with no penalty under section 

5.4.

At trial, Alan Powdermaker, the “general partner” of Powdermaker, testified 

through designated deposition excerpts that he considered the amendment to be 

Hovnanian’s written notice that it intended to continue the contract. Daniel 

Stasky, the land acquisition manager for Hovnanian, testified that Hovnanian 

never provided written notice to continue the contract under sections 5.4 and

14.5, mainly because he believed Hovnanian had not complied with the 

contractual requirements to give such notice; therefore, the contract 

automatically terminated with no penalty. But as we previously stated, this 

extrinsic evidence regarding the contract’s meaning or the parties’ intent is not 

admissible to inform the contract’s interpretation. Therefore, we turn to the

language of the unambiguous contract.

Considering the unambiguous language of the contract, together with the 

amendment, there were separate and distinct provisions that furnished 

Hovnanian with options to (1) unilaterally continue the contract, (2) unilaterally 

extend the inspection period, or (3) amend the contract by agreement. In section 

5.4, the contract provided for “written notice of [Hovnanian’s] intention to 
11

continue” the contract. This provision does not require any approval, 

acknowledgment, or signature by Powdermaker. Such written notice, if delivered 

before the inspection period ended, would entitle Powdermaker to liquidated 

damages upon subsequent termination of the contract. But if no written notice 

was given, the contract would automatically terminate at the end of the inspection 

period. Section 5.4 also provided that Hovnanian could extend the inspection 

period by sending written notice to Powdermaker and the title company. Once 

again, this action by Hovnanian required no approval by or signature of 

Powdermaker but did provide that to avail itself of this option, Hovnanian would 

have to pay for each extension by the release of a specified amount of the 

earnest money on deposit.4 Finally, section 14.16 of the contract clearly allowed 

for an amendment to the contract with the explicit requirement that an 

amendment or modification be “signed or acknowledged in writing by both 

parties.” 

We cannot agree with the trial court’s interpretation of the provisions at 

issue. At the time the contract was executed, amendment of the contract was 

specifically contemplated in section 14.16, which clearly stated how an 

amendment was to be properly performed. The amendment strictly adhered to 

the requirements of only one of the options set out above—an amendment or 

 

4The record does not reflect that the amendment was sent to the title 

company to initiate the required release of funds on deposit nor does either party 

contend that this occurred. 
12

modification of the contract. The amendment was so entitled, specifically stated 

it was an “amendment and modification,” and was executed by both 

Powdermaker and Hovnanian. The amendment’s language could not be clearer 

that it does nothing more than amend the contract to modify the definition of the 

term “Inspection Period.” We conclude as a matter of law that the unambiguous 

contract’s plain language contradicts the trial court’s interpretation, equating the 

amendment to a notice of intent to continue the contract under section 5.4. 

Therefore, we sustain Hovnanian’s first issue.

Hovnanian’s second issue, which is dependent on the contract’s correct 

interpretation, now is easily decided. Because the amendment was not a notice 

of intent to continue the contract under the unambiguous contract’s plain 

language, there was no notice of intent to continue such that Hovnanian 

breached the contract by failing to pay Powdermaker the section 5.4 damages 

once the contract terminated at the end of the amended inspection period. We 

sustain issue two.

IV. CONCLUSION

Because the trial court erred by interpreting the contract contrary to its 

unambiguous language, its conclusion that Hovnanian breached the contract is 

unsupported by any evidence in the record. We sustain Hovnanian’s issues, 

reverse the trial court’s judgment, and remand to that court for further 

proceedings on Hovnanian’s counterclaim for attorney’s fees. See Tex. R. App. 

P. 43.2(d), 43.3(a). Further, our judgment and mandate shall reflect that 
13

Hovnanian’s surety is discharged from its liability on the supersedeas bond filed 

in the trial court on September 1, 2015. See Amwest Sur. Ins. Co. v. Graham, 

949 S.W.2d 724, 729 (Tex. App.—San Antonio 1997, writ denied); Edlund v. 

Bounds, 842 S.W.2d 719, 732 (Tex. App.—Dallas 1992, writ denied). 

/s/ Lee Gabriel

LEE GABRIEL

JUSTICE

PANEL: GARDNER, GABRIEL, and SUDDERTH, JJ.

DELIVERED: June 9, 2016