COURT OF A PPEAL S EI GHTH D I STRI CT OF TEX AS ELPASO, TEXAS
FAU L KNERUSA, L P, FAUL KNERUSA GP, I NC., AND SAF ECO I

NSURANCE COMPANY OF A MERI CA, Appellants,

v. AL ARON SUPPL Y COMPANY, I NC., Appellee

. § § § § § § No. 08-09-00119- CV

Appea l from the 166th District Court of B exar County , Texas (TC#2008-CI -12096)

O P I N I O N
Fa ulknerUSA, L .P., Fa

ulknerUSA GP, I nc. (Faulkne r), and Safec o I nsuranc e C ompany of Americ a (Safe co), appea l the trial court’s summary judgme nt in favor of Alaron Supply Company , I nc. (A laron). We r ever se. BACK GR OUND
Fa ulkner, a s g ener al contra ctor, e ntere d into three contracts with Alaron, a s subcontrac tor,
to provide food service equipment, laundry service and equipm en t , and parking control sy stem service and equipment at the San Antonio Convention Center Hotel. The food contra ct was for $2,306,000, the laundry

contra ct was for $1,837,420, and the pa rking contra ct was f

or $349,037.
Eac h contra ct require d a 100 perc ent surety bond, which Safec o provided, and that 10 perc ent would be withheld as r etainag e. F urther, e ach c ontrac t contained the f ollowing pr ovision: Conditi on Prec ed en t to Pay ment by Owner to Fa

ulknerUSA for the Subcontrac t W o rk i s a condition prec edent to Subcontrac tor’s pay ment by Fa

ulknerUSA. Subcontrac tor is entitled to pay ment only for that portion of t he S ubcontr act W ork for which Fa

ulknerUSA has been paid by Owner

. Subcontrac tor expressly assumes the risk of nonpay

ment by Owner

. The Subcontrac t Amount includes compensa tion to Subcontrac tor for the assum p t ion of this risk. This provision establishes acondition prec edent, and it shall n ot be construed mere ly as a Time of Pay ment Clause.
L ater , Alaron sued Fa

ulkner and Safec o for suit on sworn a ccount, breac h of contract, and suit o n pay

ment bond. Acc ording to Alaron’ s first amende d petition, it fully or substantially perf ormed under the three contra cts and Fa ulkner and Safec o owed $790,577.7 4 fo r t h e s ervic es rende red. After v erified denials wer e filed, Alaron moved for summary judgme nt. Although
Fa ulkner and Safec o responde d that Alaron’ s summary judgme nt motion should be denied, they did
not also move for summary judgme nt. The trial court g rante d summary judgme nt in favor of Alaron.
DISCUSSIO N
Fa ulkner raises nine issues on appea l. The first contends that the trial court err ed by failing
to sustain its objections to an aff idavit attache d to Alaron’ s motion for summary judgme nt, the second a lleg es that the trial c ourt failed to r ule that an a ffidavit attac hed to Fa ulkner’s response to Alaron’ s motion for summary judgm en t wa s s u fficie nt to raise a fac t issue, the third asser ts that
pay ment by th e o wner was a condition prec edent to any pay ment to Alaron, the fourth contests whether there was a question of fac t as to whether pay ment of reta inag e was due, the fifth challeng es Alaron’ s sworn account pleadings, the six th contends that Fa ulkner filed a

proper sworn denial to Alaron’ s s u i t o n sworn acc ount, the seventh alleg es that timely notice of bond was not g iven, the eig hth asser

ts that Safec o was not subject to summary judgme nt, and the ninth contests whether judgme nt w as proper ag ainst Fa ulkner “GP.” Finding merit in F aulkner ’s third issue, we need not addre ss the remaining claims. See T E X
. R. A P P
. P. 47.1 (“The court of appea ls must hand down a written opinion that is a s brief as prac ticable but that addre sses ever y issue raised and nece ssary to final disposition of the appea l.”). Standard of ReviewAlaron moved for summary judgme nt on “tra ditional” g rounds. There fore , Alaron bore the

burden to show that there was no g enuine issue of materia l fac t and that it was entitled to judgme nt

as a matter of law. T E X
. R. C I V
. P. 166a(c ). On appea l, we revie w Alaron’ s motion and the evidenc e de novo , taking as t rue all evidenc e favorable to the nonm ovant – Fa ulkner – and in d u l gi ng ever y

rea sonable infere nce and resolvi n g any doubts in Fa ulkner’s favor

. Valence Operating Co. v. Dorsett , 164 S.W .3d 656, 661 (Tex. 2005); Nixon v. Mr. Prop. Mgmt. C o., Inc. , 690 S.W .2d 546, 548-49 (Te x . 1985).
We further revie w de novo the construction of an unambig uous contra ct. MCI Tel. Corp. v. Tex. Utils. Elec. Co. , 995 S.W .2d 647, 650-51 (Tex. 1999). I n so doing, our primary conce rn is the
true intentions of the parties as expressed in the instrument. Coker v. Coker , 650 S.W .2d 391, 393 (Tex. 1983). I n deter

mining the parties’ intent, we examine the entire ag ree ment and g ive eff ect to all provisions such that none are rende red meaning less. Id

. We further apply the pertinent rules of construction, look to the plain meaning of the contra ct lang uag e, and enfor ce the contra ct as written.
Vincent v . Bank of Am., N.A. , 109 S.W .3d 856, 867 (Tex. App. – Dallas 2003, pe t. denied). Conditi on Prece dent Conditi on prec edents a

re e vents that must be perf ormed befor e a rig ht a ccr

ues to e nforc e a
contra ct. Hohenbe rg Bros. Co. v. George E. Gibbons & Co. , 537 S.W

. 2 d 1, 3 (Tex. 1976). No particula r words ar e nece ssary for the exis tence of a condition, but such terms as “if,” “provide d that,” “on condition that,” or some other phrase that conditions perf ormanc e, usually connote an intent for a condition rathe r than a promise. Id .; Gulf Const. Co., Inc. v. Self , 676 S.W .2d 624, 627 (Tex. App. – Corpus Christi 1984, writ ref ’d n.r.e.)

. As forf

ei t u re s ar e not favor ed, finding a condition prec edent should be avoided if ano t h er reasonable rea ding of the contra ct is possible.
Crisw ell v. European Crossroads Shopping Ctr., Ltd. , 792 S.W .2d 945, 948 (Tex. 1990); Schwarz-Jordan, Inc . of Houston v. Delisle Const. Co. , 569 S.W .2d 878, 881 (Tex. 1978).

The pa rties cite Gulf

as controlling authority . I n that case , the contra ct provided tha t: When the owner or his repr esenta tive advanc es or pay s the g ener al contractor, the g ener al contra ctor shall be liable for and obliga ted to pay the sub-contra ctor up to the amount or perc entag e rec og nized an d ap proved for pay ment by the owner ’s repr esenta tive less the reta inag e require d u n d er t h e terms of the prime contra ct. Under no cir cums tance s shall the g ener al contra ctor be obliga ted or require d to advanc e or make pay

ments to the sub-contra ctor until the funds have been advanc ed or paid by the owner

or his repr esenta tive to the g ener al contra ctor. Gulf , 676 S.W .2d at 627. The provision was not labeled “condition prec edent,” nor did it contain
terms s u ch as “if,” “provide that,” “on condition that,” or some other phrase that would condition perf ormanc e. Id

. Aft er d i s cu s s i n g the credit risk borne by the gene ral contractor , that is, that the

owner may become in solvent, the court noted that “in order to transfe r this normal cre dit risk

. . . from the g ener al contra ctor to the subcontrac tor, the contra ct betwee n the g ener al contra ctor and the subcontrac t o r s h o uld contain an express condition clea rly showing that to be the intention of the
p arties.” Id

. at 628-29. Finding the provisi on did not, the court held t hat t he provi s i o n wa s n o t a condition prec edent but rathe r a covena nt that modified the time and manner of pay ment. Id

. at 630 (“We hold that the [clause] mere ly provides a covena nt dealing with ‘terms of pay ment’ or ‘manne r

o f p aym en t ’ rathe r than a condition prec edent.” ); see also Sheldon L. Pollack Corp. v. Falcon Industries, Inc. , 794 S.W .2d 380, 384 (Tex. App. – Corpus Christi 1990, writ denied) (construing the following provision as a covenant that modified time and manner of pay ment: “Pay

ment Schedule: C ontrac tor will pay subcontrac tor the s um of $2,352,000.00 in i n s t all ments as follows: lump sum of TWO M I L L I ON THREE HUNDRED FI FTY -TWO THOUSAND AND NO/100
DOL L ARS ($2,352,000.00) ninety perc ent on or about the 30th day of eac h month for work incorpora ted or materia ls suitably stored as acc eptable to owner and contra ctor and for which
pay ment has been made by owner or lender to contra ctor; ten perc en t t o b e paid followingcompletion of the sub co n t ra ctor’s work and acc eptanc e by owner and rele ase to contra ctor of

reta inag e.”)

. Although we agr ee with Gulf that we should be hesitant to find a condition p re ce d en t i n a construction contra ct, we cannot turn a blind ey e when, as here , the provision is an express condition
prec edent. Unlike the contra ct in Gulf , the provision here expressly states that pay ment to Fa

ulkner by the owner was a “condition prec edent” to pay ment to Alaron by Fa

ulkner. The provision further
states that Alaron is only entitled to pay ment for that portion of subcontrac t work that Fa ulkner has been paid for by the owner , and that Alaron “expressly assumes the risk of nonpay ment by Owner .” Finally , the provision conclude s that “[t] his provision establishes a condition prec edent, and it shall
not be construed mere ly as a Time of Pay ment Clause.” Such express lang uag e cannot be interpre ted

as a covena

nt that simply modifies the time and manner of pay ment, espec ially when the provision uses the ter

m “condition prec edent” and contemplates compensa tion for the assumption of risk of
nonpay ment until the owner pay s Fa u l k n er
. We there fore conclude that the provision is an enfor cea ble, express condition prec edent. See MidAmeric a Const. Managem ent, Inc. v. MasT ec North America, Inc

. , 436 F.3d 1257, 1262, 1265 (10th Cir. 2006) (finding provision “[u]pon final

acc eptanc e of the Work by Contractor and Owner , Contractor will pay Subcontrac tor for the Work
at the price s and schedule and in th e m an n er descr ibed on the Work Orde r(s); provided that, all
pay ments to Subcontrac tor by Contractor are expre ssly contingent upon and subject t o re ce ipt of
pay ment for the Work by Contractor from Owner , even if (a) Contractor has posted a pay ment bond with Owner

or (b) the P rimary Contract is on a ‘cost plus’ or other r eimbursement ba sis requiring the Contractor to pay subcontrac tors prior to being reimburse d by Owner ” wa s a c o n d it io n prec edent) (empha sis added) ; Lakin Enterprises v. Sebastian , No. 05-08-002 13-CV, 2009 WL 428491, at *4 (Tex. App. – Dallas Fe b. 23 , 2009, no pet.) (mem. op., not desig nated for publication) (findingprovision “[p] ay ments are subject to the Contractor rec eiving pay ment from the Owner an d i s a condition prece dent to the Contractor’ s obliga tion or its Surety ’s obl iga tion to pay Subcontrac tor, its suppli ers, labor , etc.” was a condition prec edent) (empha sis added). Alaron asser

ts that a rea ding of the entire contra ct does not support our finding that the above provision is a condition prec edent. Specifica lly , Alaron points to another provision in the contra ct, which provides that final pay ment will be made “no later than thirty (30) day s afte r inspection and verific ation by Fa

ulknerUSA and Owner , pay ment by Owner to Fa

ulknerUSA, and the satisfac tion of all other conditions require d for pay ment.” Had the contra ct not included the condition-prec edent clause and compensa tion for the assumption of the risk, we would find merit in Alaron’ s arg ument

as the “no later than th i rt y day s” clause rese mbles more of a covena nt that modifies the time and

manner of pay

ment simil ar to that found in Gulf

. Howeve r, the contra ct at issue in Gulf did not also specific ally

include a c ondition prece dent clause for pa y ment. The one befor e us does.
Be cause the provision is a condition prec edent, whether the owner paid Fa ulkner such that
Fa ulkner was obliga ted to pa y Alaron was a materia l f act issue nece ssary to resolution of Alaron’ s suit on sworn acc ount, brea ch of contra ct, and suit on pay ment bond. L og ically , if the owner has not
p ai d Fa u l k n er, Alaron cannot succe ed on its theories of liability

. Her e, Alaron prese nted n o evidenc e, m u ch l es s m ade any alleg ation, that the owner paid Fa ulkner, and Fa

ulkner alleg ed, throug h the affidavit of Do n n a J enkins, that the owner had not paid Faulkner. Consequently , we 1
conclude that the trial cour t erre d by g ranting summary

judgme nt in favor of

Alaron.

A l a r o n s e e m i n g l y c o n t e n d s t h a t w e m u s t i n f e r t h a t t h e t r i a l c o u r t , b y g r a n t i n g s u m m a r y j u d g m e n t i n i t s 1 f a v o r , d i d n o t c o n s i d e r J e n k i n s ’ a f f i d a v i t

. A l a r o n d i d n o t o b j e c t t o J e n k i n s ’ a f f i d a v i t , a n d t h e r e i s n o t h i n g i n t h e r e c o r d t o i n d i c a t e t h a t t h e t r i a l c o u r t d i d n o t c o n s i d e r i t

. A l a r o n c o n t e n d s t h a t J e n k i n s ’ a f f i d a v i t i s s u b s t a n t i v e l y d e f e c t i v e
. W e n e e d n o t a d d r e s s t h i s c o n t e n t i o n a s F a u l k n e r d i d n o t m o v e f o r s u m m a r y j u d g m e n t a n d w e m u s t t a k e a s t r u e a l l e v i d e n c e f

a v o r a b l e t o F a u l k n e r , t h e n o n m o v a n t , i n d u l g i n g e v e r y r e a s o n a b l e i n f e r e n c e a n d r e s o l v i n g a n y d o u b t s i n F a u l k n e r ’ s f

a v o r
. V a l e n c e , 1 6 4 S

. W

. 3 d a t 6 6 1 ; N i x o n , 6 9 0 S

. W

. 2 d a t 5 4 8

- 4 9

. T h e r e f o r e , e v e n i f w e d o n o t c o n s i d e r J e n k i n s ’ a f f i d a v i t , n o t h i n g e l s e i n t h e r e c o r d i n d i c a t e s t h a t t h e o w n e r p a i d F a u l k n e r
.CONCLUSION

Having sustained Faulkner’ s third issue, we rever se t he trial court’s judgment and rema nd for f urther pr ocee dings.

GUADA L UPE RI VERA, J ustice
J uly 28, 2010
Be fore Chew, C.J ., Rivera, J., and L arse n, J

. L arse n, J ., sitti ng by

assig nment