### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03-0 8 -00 219 -CV

Senna H ills, L td. and HBH Developm ent Com pany, L LC , Appellan ts
v. Sonterra Energy C orporation , Appellee

F ROM THE DISTRICT CO URT OF TRAVIS COUNTY , 53RD JUDICIAL DISTRICT

NOS. D-1-G N-05 -0016 25 & D-1 -GN -05-00 1526 , HO NORAB LE STEP HEN Y ELENOSK Y , JUDGE PRESIDI NG

M E M O R

A N D U M O P I N I O N A p p e l l an t s S e n n a

H i l l s , Lt d
. ( “ S e n n a ” ) an d H B H D e v e l o p m e n tC o mp an y , LLC (“H BH ”) ( collectively , the “De veloper s” ) b r o u g ht suit aga inst appellee Sonterr a Ene rg y Corporation (“Sonterr a”) for br eac h of c o n t ra ct
. Sonterra c urre ntly owns and ope rate s a propa ne distribution sy stem located on the Developers’ proper ties. Pursuant to an ag ree ment betwee n the Deve lopers and Son te rr a ’s pr e de c e sso r in inte re st, the De ve lop e rs a g re e d to e nc umb e r t he pr op e rt ie s w itha

pu bli c utilit y ease ment for the installation and operation of the propane distribution s y stem in return for the ri g ht t o r e c e ive “ e a se me nt- us e fees.” By the ir su its , th e De ve lop e rs a sse rt e d a c on tin uin g ri g ht t o
rec eive the f

ees f rom Sonte rr a and c halleng ed the va lidity of the a ssignment of

the propa

ne distribution s y s t em t o Sonterra in lig ht of its refusa l to continue making the ea sement-use fee pay ments. The trial c ourt g rante d summary judgme nt for Sonterra
.2 The De veloper s raise f

ive issues on appea l. I n issues one and two, the y complain that the trial cour

t erre d in g ranting Sonterra’ s no-evidenc e motion for summary judgme nt with respec t to t he De ve lop e rs ’ c la im fo r re fo rm a tio n of the wr itt e n ag re e me nt ba se d on mutu a l mi sta ke . B y the ir third and four

th is s u es , t h ey

argue that the tria l court er red in g rantingSonterra’ s traditional
summa ry -j ud g m e nt

m o t i o n a s to t he ir fa ilure -o f- a ssi g nme nt c la ims ow ingto t he ir a lle g e d th ir d- pa

rt y be ne fi c iary

status . In th e ir

fi ft h is su e , th e De ve lop e rs c on ten d th a t th e tr ia l c ourt e rr e d in deter mining that ther e wa s no ambig uity in the ag ree ment and in g ranting s u mmary judgme nt for Son te rr a re g ard ingthe ir cla im s for br e a c h o f c on tr a c t. We wi ll a ff ir m th e summa

ry jud g me nts in pa rt and re ve rs e and

re mand in p art
.
F ACTUAL AND P ROCEDURAL BACK GR OUND I n J anuar y 1997, Senna and the South e r n Un io n Co mp a ny e xecute d a letter

ag ree ment g rantingSouthern Union “the rig ht to install, own, and operate a propane distribution s y stem” in the Senna Hills subdivisi on. As co n s ideration for Southern Union’s installation and oper ation of the pr op ane sy ste m, Senna a g re e d to file a re str ic tiv e c ov e na

nt i n th e de e d r e c or ds fo r t he a ff e c te d lo ts requiringbuy ers to pay

Southern Union a g as ser vice f ee f or eve ry l o t p u rc h as ed
. Senna fur ther ag ree d to provide Southern Union with a n ease ment “suff

iciently restric ting the use of the lot such that the installation and opera tion of the propane storag e t an kwill not be inconsistent with or impaired by any permitted use of the proper ty .” I n return, the parties ag ree d that Sou t h er n Un ion
wo uld pa y Se nn a an e a se me nt -us e fee base d o n a fi xed pe rc e nta g e of

Southe rn Un ion ’s g ro ss
reve nues fr om propane g as sales. The ag re em ent furthe r stated: “E x cept a s provided below,For convenie nce, we will ref er to the Senna

–Southern Union and HB H–Southern Union 1 letter a g ree ments collectively as the “ Propane Ser

vice Ag ree ments.” 3 Deve loper’s r ight to re ceive an Easeme nt U se Fe e shall continue for so long as the Propane Sy stem is a propane sy stem and the Propane Sy stem is owned by Southern Union.” Wit h respe ct to a possible sale of the sy stem b y S o u thern Union, the a g ree ment provided that Southern Union ha d the rig ht “to transfe r and assign, in whole or in part, a ll and ever y feature of its rights and obli g ations under this L etter A g ree ment and in the Propane Sy stem.” In the event of such transf

er,
Sou t h er n Un i on shall be re lease d from any further obligation under this L etter Agr ee m en t and Deve loper a g ree s to look solely to Southern Union’s succe ssor for the performanc e of such obl igations. Southern Union ag ree s to require any assig nee to assume full responsibi lity for a ll Sout hern U nion’s rig hts and obligations here under. The followingy ear , HB H and Southern U nion executed a su b s t an t i ally simil ar ag ree ment reg arding Southern Union’s construc tion and operation of a propa ne distribution sy stem in HBH ’s subdivision, Austi n’s Colony Phase I I
. T h i s l etter a g ree ment contained ide ntical provi s i o n s t o those quoted above in the Senna–Southern Union a g ree ment reg ardingthe pay ment of ea sement-use fee s to HBH a s Deve loper a nd the assig nment of Southe rn Un ion’s rig hts and ob lig a tio ns un de r t

he a g re e me nt. 1 On or a bout J anuar

y 1, 2003, Southern Union transfe rre d its int ere sts in the propane distribution s y stem to ONEOK Propa ne Distribution Company (“O NEOK” ). After ONEOK had begun operating the sy s t em , t h e Developers filed suit ag ainst ONEOK a nd Southern Union for4

brea ch of c ontrac t, assertingthat ONEOK had fa iled to pay

the ea sement-use fee s due under the Propane Service Ag ree ments and that Southern Union had failed to re quire ON EOK to assume the obligation to pay

the fe es. Alternatively , the Deve lopers plea ded that ONEOK ’s fa ilure to pay the
e a se me nt- us e fe e s te rm inate d it s r ig ht to oc c up y the pr e mis e s o wn e d b y the De ve lop e rs and

a ll r ig hts
and int e re sts in t

he pr op ane dis tr ibutio n sy ste m, and that O NE OK ha d b e e n unju stl y

e nr ic he d b y

its operation of the propane distribution s y stem without compensation to the Deve lopers. The parties filed cross-motions for summary judgme nt, which wer e pendingbefor e the tria l court whe n ONEOK transfe rre d the propa

ne distribution sy stem to Sont err a on Oc tober 1, 2004. There afte r, the De veloper s, South er n Un ion, and ONEO K executed a Settlement Ag ree ment and Relea se, pursua nt to which the par

ties non-suited their cla ims in t he under ly ing lawsuit. Under the Settlement Ag ree ment, Southern Union ag ree d to pay $4,096.06 eac h to Senna and HB H, and ON EOK a g ree d to pay $52,642 to Se n n a and $57,847 to HB H. The Settlement Ag re e me nt r e c ite d th a t th e fo re g oin g pa y me nts

re pr e se nt p ay

me nt i n f

ull of (i ) e a se me nt u se fe e s . . . and satis fa c tio n o f a ll obligations through Oc tober 1, 2004, due under that cer tain Propane Service L etter Ag ree ment dated January 28, 1997, betwee n Senna and SU, a nd that cer

tain Propane Service L etter A g ree ment dated September 10, 1998, betwe en HB H and SU, (collec tively , the “Propa

ne Ag ree ments”), and (ii) a ttorney s’ fe es incurr ed by Senna and HB H. The Settlement Ag ree ment further provided that it did n o t constitute “a re lease , discharg e and c ovenant not to sue by any party to this Agre ement of Sonterra” or its affiliates, a nd that “ Se nn a

and HB H w arr ant a

nd re pr e se nt t

hat any futur e laws uit

a g a ins t So nte rr a

wi ll b e fo r a c ts5

and ev en t s t h at occ urre d afte r the a ssignment by ONEOK Propane to Sonterr a.” Sonter ra w as
ne ith e r a pa rt y to t hat la ws uit no r a sig nator y to t he Se ttl e me nt A g re e me nt. Following the assig nment of the sy stem from ONEO K to Sonterra a nd the settlement of the De ve lop e rs ’ s uit s a g a ins t So uther n Uni on and ON EO K, the De ve lop e rs fi le d s uit a g a ins t Son te rr a fo r b re a c h o f the Pr op ane Se rv ic e Ag re e me nts ba se d o n it s r e fu sa l to pa y e a se me nt- us e fe e s. Th e De ve lop e rs a lso a sse rt e d th a t, a s a re su lt o f S on te rr a ’s a lle g e d b re a c h, th ey were ent itl e d to jud g me nt t e rm inatin g and re sc ind ingany ri g hts of Son te rr a un de r the Pr op ane Se rv ic e Ag re e me nts to possession or use of the propane distribution s y stem, as well as a writ of possession and e viction of Sonterra from their proper ties. I n addition, the y broug ht a cause of ac tion for re formation of the Pr op ane Se rv ic e Ag re e me nts , a rguin g that the pa

rt ie s e xec uti ngthe a g re e me nts ha d in te nd e d th a t, “in the eve nt Southern Union assig ned the Propa ne Servic e Ag ree ments, its assig nee w ould be
re sp on sible for pa

y me nt” of the e a se me nt- us e fe e s. Th e re fo re , th e De ve lop e rs argue d, “ [if ] thi s intent did not get r educe d to writing in the Pro p an e S er vice Ag ree ments, it was as a r esult of
acc ident, including sc ribner [sic] error, or mutual mist ake.” The De veloper s also challeng ed t h e assig nment of the propa ne distribution sy stem to S on te rr a , a

rguin g that th e re qu ir e me nt in the Pr op ane Se rv ic e s A g re e me nt “ that a ssi g ne e s a ssume obligations thereunder ” wa s a re strict ion on transfe r or a condition to the effe ctiveness of the
a ssi g nme nt that ha d n ot b e e n s a tis fi e d. As a lte rn a tiv e g ro un ds fo r r e lie f, the De ve lop e rs so ug ht a rig ht to recove r a “ develope r bonus” unde r the Propane Service Ag ree ments and additional dama g es under pr inciples of equity and implied contra ct. Fina lly , the Deve lopers ar g ued that they wer e intended third-pa

rty benef iciarie s of the Asset Purc hase A g ree ment betwee n ONEOK and Sonterra6

and, as a result, they could sue to e nforc e Sonterra’ s obligations unde r that instrument, which, they maintained, included the obligat i o n t o conti nue to pay ease ment-use f

ees pur suant to the terms of the Settlement Ag ree ment betwee n the Deve lopers, Southern Union, a nd ONEOK
. Sonterra moved for summar y judgme nt reg ardingSonterra’ s brea ch-of -contra ct and fa ilure -o f- a ssi g nme nt c la ims and fo r p a r t i a l s u mm a r y jud g me nt s e e kin g dis mis sa l of the De ve lop e rs ’ claim for ref

ormation. The Deve lopers also moved for summary judgme nt on all claims. The trial court denied the Deve lopers’ motions and Sonterra ’s par tial summary -judg ment motion, but gra nted Son te rr a ’s mot ion

fo r s umm ary

jud g me nt “ in p art

wi th r e sp e c t to Pla int if

f’ s b re a c h o f c on tr a c t c la im and failure of assig nment claim based upon Def endant’ s failure to pay

ease ment use fe es,” f

inding that the “disputed c ontrac t lang uag e is unambig uous.”

Af te r fur th er p ro c e e din g s, Son te rr a a g a in m ov e d f

or summa ry jud g me nt o n b oth traditional and no-e vidence g rounds. In its no-evidence motion, Sonterra soug ht summary judgme nt as to the Deve lopers’ claims for ref ormation, arguing that there w as no evide nce of mutual mist ake and that the De veloper s had not met their burden of showing either that Sonterra ha d notice of the mutual mist ake or

that Sonterra w as not a bona fi d e p u rc h as er . I n response to the motion, the Deve lopers pre sented the a ffidavit of Rip Mil l er , p re sident of the g ener al par tner of Senna

and
ma n a g e r o f H B H
. M il le r a v e r r e d th a t h e in te n d e d , in th e e v e n t th a t So u th e r n U n io n a s s ig n e d the Propane Ser

vice Ag ree ments, for Southern Union’s assig nees to be responsible for pa y ment of the
ease ment-use f

ees; that he understood thi s to be the intent of Don Scovil, who neg otiated the Propane Service Agr ee m ents on beha lf of Southern Union; and that he did not intend any lang uag e in the
a g re e me nts to n e g a te the re qu ir e me nt f or Southe rn Un ion ’s a ssi g ne e s to a ssume fu ll r e sp on sib ili tySc ov il t e sti fi e d a s f oll ow s: 2 Q
. Ca ny o ute ll u s w h e th e r o r n o t yo ua g r e e d

w it h M r . M il le r

o nbehalf

—y ou actingon behalf of S outhern Union, he acting on behalf of HBH and Senna Hills, that if Sout hern U nion were to sell the s y s tems, that whoeve r boug ht them would continue to be r esponsible for a nd would continue to pay the Easeme nt Use F ee? A. Yes. The ag ree ment—what also then r elieves Southern U nion o f i t’s [si c] obligation to pay

Easeme nt Use F ees be cause the prope rty was then a ssigne d and sold to someone else
. Q. And to y our understanding was your ag ree ment that the new buyer w ould be responsible for

those fee s; can you state wh et h er or not that was y our u n d er s t an d i n g? A. Ye s, that w a s my

int e nt. Scovil further te stified that he instructed t h e S o u t h ern U nion attorney who dra fted the Propa

ne Service Ag ree ments, “I want a provision in there that, y ou know, if the sy stem was ever sold, [ then] the [easement] use fe es would continue.” 7 for Southern Union’s obligations, including pay ment of the e aseme nt-use fe e. Miller fur ther stated that if the wr itt e n d oc ume nt d id n ot a c c ur a te ly refl e c t th is i nte nt, su c h e rr or wa s a mis take in reduc ing to wr iting the parties’ ag ree ment. The De veloper s also prese nted Scovil’s Dec ember 2005 depos it io nte s ti mo n y , w h e r e in h e s tate d th a t i t w a s h is in te n t, in

n e g o ti a ti n g th e Pr o p an e Se r vice Ag re e me nts , th a t in

the e ve nt of a tr ans fe r, the ne w b uy e r o f t he pr op ane dis tr ibutio n s y ste m w ou ld be re sp on sib le fo r p a

yinge a se me nt- us e fe e s. 2 I n it s r ule 16 6a (c ) m oti on , So nte rr a ra i s e d t h e fo llo wi ngsumma

ry -j ud g me nt g ro un ds : (1) the c ourt’s prior r

uling that the Propa

ne Service Ag ree ments wer e unambig uous as a matter of law pre cluded the D evelope rs from establishing a mutual-mistake claim; (2) e ven if the D evelope rs could establish a mutual-mistake c laim, they could not seek r efor

mation of the Propane Servi ce8

Ag ree ments ag ainst Sonterra be cause Sonterra w as a bona fide purc haser

without notice of mutual mis take ; (3 ) t

he Se ttl e me nt A g re e me nt b e tw e e n th e De ve lop e rs , So uth e rn Un ion , a nd ON EO K d id not cre ate an obligation for Sont err a to pay the Developers easeme nt-use fees; (4) Sonter ra w as not require d to pay

the Deve lopers a de veloper ’s bonus; and (5) ONEOK ’s assig nment of the Propane Service Ag ree ments to Sont err a wa s valid.

Th e tr ial co ur

t g ra nte d So nte rr a ’s no -e vid e nc e mot ion “ wi th r e sp e c t to Pla int if fs ’ claims of mutual mi s t ak e, ” an d its traditional moti on as to Plaintiffs’ claims (1) “ based upon the Ass et P u rc h ase A g ree ment and Settlement Ag ree ment,” (2) “base d upon Fa ilure of Assig nment,” and (3) “see king a develope r bonus arising from ONEOK ’s sale of the propane sy stem to Sont err a.” After the trial cour

t gr anted the pa

rties’ a g ree d motion to di smiss all r em aining claims and
c ounte rc la ims , th e De ve lop e rs pe rf e c te d th is a

pp e a l.
STA ND AR

DS O F RE VI EW A movant see king tr aditional summary judgme nt on its own cause of action or aff irmative def

ense ha s the initial burden of e stablishing its entitlement to judgment a s a matter of law by conclusively establishing eac h element of its c ause of action or aff irmative d efe nse. M.D. Ande rson Hosp. & Tumor Inst. v. W illri ch , 2 8 S.W. 3d

22 , 2 3 ( Te x. 20 00 ). I f t

he mov ant m e e ts this burden, the burden shifts to the non-movant to raise a g enuine issue of materia l fac t prec luding summary judgme nt. See id. I n our de novo r eview of a trial court’s summary judgme nt, w e conside r all the evidenc e in the lig ht m o s t favor able to the nonmovant, c rediting evidenc e fa vorable to the nonmovant if rea sonable juror s could, and disre g ardingcontra ry evidenc e unless rea sonable juror s could not. Ma ck

Trucks, Inc . v. Tamez , 2 06 S.W. 3d 57 2, 58 2 ( Te x. 20 06 ). Th e e vid e nc e ra ise s a9

g enuine issue of

fac t if rea sonable and fair- minded jurors could differ in their conc lusions in l ight of all of the summar

y -judg ment evidenc e. Goodye ar Tire & Rubber Co. v. May es , 236 S.W .3d 754, 755 (Tex. 2007).

A no-evidence summary judgme nt is essentially a pretrial direc ted ver dict, which we revie w under a lega l-sufficie ncy standard. King Ranch, Inc. v . Chapman , 1 1 8 S. W. 3 d 7 4 2 , 7 5 0 ( T e x. 2003). When a party moves for a no-evide nce summary judgme nt unde r rule 166a (i), he must asse rt that, afte r ade quate time for discovery , there is no evidence of one or more e ssential elements of a claim or de fense on which the a dverse party would have the burden of proof at trial. Tex. R. Civ. P. 1 66 a (i ); se e Fo rt W

or th Os te op ath ic Ho sp., Inc. v. R eese , 148 S.W .3d 94, 99 (Tex. 2004). A no-evide nce summar

y judgme nt is im proper

if the nonmovant bring s forth more tha n a scintilla of probative e vidence to r aise a g enuine issue of materia l fac t. Tex. R . Civ. P . 166a(i). Mor e than a
sc int ill a of e vid e nc e e xists wh e n the e vid e nc e pr e se nte d r ise s to a le ve l th a t w ou ld e na

ble re a so na

ble and fair-minded people to differ in their conc lusions. Ford Motor Co. v. Ridgway , 135 S.W .3d 598, 601 (Tex. 2004). We review the evidence in the lig ht most favorable to the nonmovant and disreg ard all contra ry evidenc e and inf

ere nces unle ss a re asonable fac t finder c ould not. Ci ty o f K e ll er v. W ilson , 168 S.W .3d 802, 807 (Tex. 2005).
DI SCU SSIO N Ambigu ity in P

ro pa ne Se rv ic eAgre e ments B e c a u s e our construc tion of the Propane Ser vice Ag ree ments nece ssary to resolve the De ve lop e r’ s f

if th i ssu e a ff

e c ts o ur ana ly sis of

the ir oth e r i ssu e s, we wi ll a dd

re ss the fi ft

h is su e fi rs t. By their fifth issue, the D evelope rs ar g ue that the tria l court e rre d in gr anting Sonterra’ s first motion10

f o r s u m m ar y j u d g m e n to nt h e b a s i s t h a t t h e P r o p an e S e r v i c e A g r e e m e n t s w e r e n o ta mb i g u o u s . In its mot ion , So nte rr a

a sse rt e d th a t it

wa s e nti tle d to jud g me nt a s a matte r o f l aw a s to the De ve lop e rs ’
c la ims fo r b re a c h o f c on tr a c t and fa il ure of assi g nme nt b e c a us e the Pr op ane Se rv ic e Ag re e me nts
un a mbi g uo us ly pr ov ide d th at t he D evel op ers ’ ri ght t o rec eiv e eas eme nt -us e fees wou ldcon ti nu e on ly for so longas the propa

ne distribution sy stem was owne d by Sout h er n Union, i.e. , if and whe n Southern Union sold the sy stem, the Deve loper s woul d have no f urther r ight to re ceive any
ease ment-use f

ees. In so arguing, Sonter ra r elied on the plain lang uag e of the “Ease ment Use F ee” provision common to both letter ag ree ments, which states: “Except as pr ovided below, De veloper ’s rig ht to rece ive an Ea sement Use F ee sha ll continue for so longas the Propane Sy stem is a propane sy stem and the Propane Sy stem is owned by Southern Union.” Sonterra a sserted that this clause def eate d t h e De veloper s’ claims bec ause, onc e Southern Union assig ned the sy stem to ONEOK, “ there was no long er a n obligation to pay

ease ment
us e fe e s wi thi n the Ag re e me nt that wa s a ssi g na ble ,” and the re fo re ON EO K “ c ou ld no t, and did no t,
a ssi g n a ny ob lig a tio n to pa

y e a se me nt u se fe e s d

ue un der the A g re e me nt whe n it a ssi g ne d it

to Sonterra.” The De veloper s, on the other ha nd, urg e that the Easeme nt U se F ee pr ovision must be
rea d in c onjunction w ith the later provision e ntitled “ Assignme nts,” which provide s that, in the event of transf er:
Southern Union shall be re l ea s ed from any further obligation under this L etter Ag ree ment and Deve loper ag ree s to look solely to Souther n Union’s su cc es s o r for the per formanc e of such obligations. S outhern Union a g ree s to require any assig nee to assume full responsibility for a ll Sout hern U nion’s rig hts and obl i gations here under.11

Th e re fo re , th e De ve lop e rs argue , th e re qu ir e me nt t o p ay e a sem e nt- us e fe e s a s se t f or th i n th e fi rs t provision is an “oblig ation” that Southern Union’s a ssigne e must assume in ac corda n ce wi t h the second pr ovision. I n light of this construc tion, the D ev el o p ers maintain that the Propa ne Servic e Ag ree ments are ambiguous beca use t hey are susceptible to more tha n one re asonable interpre tation:
e ith e r t he sy ste m owne r’ s o bli g a tio n to pa y the De ve lop e rs e a semen t- us e fe e s c on tin ue d p os tassig nment and wa s assumed by the assig nee, a s they

argue, or a

ny and all rig ht to rece ive the fe e
cea sed whe n Southern Union assig ned the s y s t em, as S onterra asser ted. See F

rost Nat ’l Bank v. L & F Distribs., L td. , 1 65 S.W. 3d 31 0, 31 2 ( Te x. 20 05 ) ( “ [A] c on tr a c t is a mbi g uo us if it is
s u s c e p ti b le to more than one rea sonable interpr etation.”) . Acc ording ly , the Deve lopers maintain that the trial cour

t erre d in finding that the Propane Ser vice Ag ree ments were not ambiguous a nd that the order g rantingSonterra’ s motion for summary judgme nt must be rever sed. De c idi ngwh e ther

a c on tr a c t is a mbi g uo us is a qu e sti on of law f or the c ourt
. Co ke r v. Co ker , 6 5 0 S
. W
. 2 d

3 9 1 , 3 9 4 ( T e x. 1 9 8 3 )
. I nc o n s t r u i n g a w r i t t e na g r e e m e n t , w e f i r st d et er m i n e wh et her it is possible to enforc e the c ontrac t as it is written. J.M. D avidson, Inc. v. W ebster , 128 S.W .3d 223, 229 (Tex. 2003). I n so doing, we m ust asce rtain and g ive effec t to the parties’ intentions as expressed in the docume nt. Id. ; Lopez v. Munoz, Hoc kem a & Ree d, L.L.P. , 22 S.W .3d 857, 861 (Tex. 2000)
. We c onsider the entire writing and attempt to har moniz e and g ive
e ff e c t to a ll the pr ov isi on s o f t he c on tr a c t by

ana ly zing the p ro vis ion s w ithre fe re nc e to t he wh ole ag ree ment. W

ebster , 1 2 8 S
. W
. 3 d at 229. We construe c ontrac ts “from a utilit aria n standpoint be ari ngin m ind

the pa rt ic ula r bu sin e ss a c tiv ity so ug ht t o b e se rv e d” and “ wi ll avo id whe n p os sib le and prope r a c onstruction which is unrea sonable, inequitable, and oppre ssive.” Re ill yv . R an ge rs12

M g m t., I nc. , 727 S.W .2d 527, 530 (Tex. 1987). I f, af ter the pe rtinent rules of c onstruction are applied, the c ontrac t can be g iven a de finite or c er tain leg al meaning , it is unambiguous and we construe it as a

matter of la

w. W ebster , 128 S.W .3d at 2 2 9
. On l y af t er a contract is found to be ambig uous may

parol e vidence be admitted for the purpose of asce rtaining the true intentions of the parties a s expressed in the contra ct. Friendswood Dev . Co. v. McD ade + Co. , 926 S.W .2d 280, 283 (T ex . 1 9 9 6 ) ( ci t i n g National Union Fire Ins. v. CBI Indus., I nc. , 907 S.W .2d 517, 521 (Tex. 1995)). B e c a us e we c on c lud e tha

t th e c on tr a c t la

ngua g e he re c an b e g ive n a de fi nit e legal me anin g and is
no t su sc e pti ble to m or e tha n o ne re a so na

ble me anin g , w e ho ld t

hat it is unambi g uo us . Read tog ethe r , th e “ E a s e me nt Use F ee” and “A ssignments” provisions of the Propane Service Ag ree ments ref

lect an intent to ac complish two related but distinct g oals reg ardingthe pa y me nt o f e a se me nt- us e fe e s. F ir st, by de c lari ng that the De ve lop e rs ’ r ig ht t o r e c e ive e a se me nt- us e fee s “shall continue f

or so long as the P ropane Sy stem is a propa ne sy stem and the Propane Sy stem is owned by

Southern Union,” the Ea sement Use Fe e provision r elea sed Southern Union fr om any furthe r o b l i g ation to pay ease ment-use f

ees in the e vent that it no longe r owne d the propa ne distribution sy stem. This intent i s al s o ec h o ed i n t h e Assig nments provision, which states that “S o u t h er n Uni on shall be re lease d from any further obligation under this L etter A g ree ment and De veloper

ag ree s to look s o l ely

to Southern Union’s succe ssor for the perf ormanc e of such oblig ations.”

Se c on d, the Pr op ane Se rv ic e Ag re e me nts re ve a l an int e nt to a llo w the De ve lop e rs to continu e receiving ease ment-use f ees in the e vent of a

n assig nment of the propa ne distribution sy stem. To that end, the Assig nments provision sets f o rth that “Southern Union a g ree s to requireThe Deve lopers appar ently rec og nized that the Propane Service Ag ree ments so require d, 3 as t h ey i n i t i all y

asser ted a br eac h-of- contra ct claim ag ainst Southern Union for f ailing to r equire ON EO K t o a ssume the ob lig a tio n to pa y the fe e s. 13 any as s i gn ee to assume full responsibility for a ll Sout hern U nion’s rig hts and obligations h e r e u n d e r ”

— in c lu d in g , a s th e D e v e lo p e r s p o in t out, th e o b li g a ti o n to p ay e a s e me n t- u s e f

e e s . We there fore reje ct Sonterra ’s position that the Propane Service Ag ree ments unambig uously terminated the Deve lopers’ r ight to re ceive any and all future ease ment-use f ee pay ments when Southern U nion transfe rre d the sy stem. But, contr ary to the Deve lopers’ inter p re t at i o n , the Propane Service Ag re e me nts the mse lve s d o n ot directly bind Southern Union’s a ssi g ne e to m a ke the e a se me nt- us e pay ments; r at h er , t h e ag ree ments obligate Southern Union to require its assigne e to ag ree to an assumption of Southern Union’s obligations under the Propane Ser vice Ag ree ments, including the responsibility

for pa y ment of the e aseme nt-use fe es. Put differe ntly , wh i l e t h e Propane Service Ag re e me nts e vid e nc e an inte nt fo r t he De ve lop e rs to c on tin

uin g re c e ivi nge a se me nt- us e fe e s, tho se
a g re e me nts do no t, the mse lve s, dir e c tly imp os e an obli g a tio n on an y futur e a ssi g ne e to p ay

the fe e s. I nstead, the ag ree ments made it Southern Union’s re sponsibili ty to require its assigne e to take on the ob l i gat i o n to pay

ease ment-use f

ees, w hich in this case mea ns that Southern Union was oblig ated to require ONEOK to a ssume all of Southern Union’s obligations under the agree ments, including the ob lig a tio n to pa

y e a se me nt- us e fe e s. 3 Thus, by their plain languag e, the Propa ne Servic e Ag ree ments imposed two disti nct ob lig a tio ns on

Southe rn Un ion re g ard ingpa

y me nt o f eas ement -u se fe e s: ( 1) to p ay e a se me nt- us e fe e s to the De ve lop e rs fo r a s lon g a s it ow ne d the pr op ane dis tr ibutio n sy ste m, a nd (2 ) t o r e qu ir e its
a ssi g ne e to a ssume a ll o f i ts c on tr a c tua l ob lig a tio ns , in c lud ing the ob lig a tio n to pa y the e a se me nt- us e14

fee s to the Deve lopers. The provisions setti n g fo rt h these oblig ations are not in conflict with one another and do not impose inconsistent oblig ations. They neither ma

ndate pe rmane nt termination of the De veloper s’ rig ht to rece ive ea sement-use fee s in t h e event Sout hern U nion transfe rre d
owner ship of the sy stem, nor do they cre ate a direc t obligation for the assig nee of the sy stem to pay the fe es due. Th e De ve lop e rs ’ a sse rt ion that th e Pr op ane Se rv ic e Agreem ents are a mbi g uo us is premised on their

err oneous conf

lation of the duties that the ag ree ments imposed on Southern Union and the oblig at i o n

t h at t h e a gre em en t s co n t em p l at e— b u td o n o tt h em s el v es re qu i re

— fo r a nassi gnee. To the extent that an assig nee w ould have a n obligation to pay

ease ment-use f

ees, suc h obligation
mus t ari se un de r s ome oth e r i ns tr ume nt ( e.g. , the ag ree ment betwee n Southern Union and ON EOK, wh ic h w e no te is n ot a

pa rt of the a pp e llate re c or d) . T he Pr op ane Se rv ic e Ag re e me nts the mse lve s, howeve r, do not support the De veloper s’ claims for brea ch of c on t ra ct aga i n s t the assig nee of the pr op ane dis tr ibutio n s y ste m.

Be cause the Propane Service Ag ree ments are not am biguous, a nd beca use they do not, themselves, obligate Sonterra to pay ease ment-use f

ees to the Deve lopers, the trial court did not
e rr in g ra nti ng Son te rr a ’s fi rs t mot ion fo r summa ry jud g me nt wi th re sp e c t to the De ve lop e rs ’ c la ims for br eac h of contra ct. We overr ule the De veloper s’ fifth issue.
Mutu al Mistake

I n their first issue, the De veloper s argue that the trial co urt err ed in g ranting Son te rr a ’s no -e vid e nc e mot ion fo r sum mary jud g me nt be c a us e the e vid e nc e ra ise d a

fa c t is su e a s to15

the ir c la im o f m

utu a l mi sta

ke
. As a pr e lim ina

ry matte r, we fi rs t a dd

re ss the De ve lop e rs ’ c omp la int s reg ardingthe suffic iency

of Sonterra ’s motion. On appe al, the De veloper s argue that Sonterra’s m o t i o n was incur ably defe ctive beca use it failed to spec ify

the elements as t o which there wa s no evidenc e. We first note that the Deve lopers did not contest the a dequac y of t he mot ion to the trial court. See M cConnell v. Southside In de p. Sc h. Di

st. , 8 58 S.W. 2d

33 7, 34 2- 43 (T e x. 19 93 ) ( ho ldi ngthat in or de r f or no n- movant to complain on appea l that g rounds raised in motion for summary judgme nt were unclea

r, non-movant
mus t f ile e xce pti on

to m oti on ); Lochabay v. Southwestern Bell Media, Inc

. , 828 S.W .2d 167, 170 n.2 (Tex. App.—Austin 1992, no wr i t ) (s am e). A ssuming without decidingthat the Deve lopers prese rved the ir complaint as to the suff iciency of the motion in such circ umstances, we conc lude that the motion was sufficie ntly specific as to the ele ments that Son t er ra challeng ed on noe vid e nc e g ro un ds
.

By their third amende d petition, a fter the trial court ha d partially g rante d Sonterra’ s mot ion fo r summa

ry jud g me nt a s to the ir br e a c h- of -c on tr a c t c la ims , th e De ve lop e rs a sse rt e d a c a us e of a c ti o n f

o r r e f o r mati o n o f th e Pr o p an e Se r v ic e A g r e e me n ts
. Sp e c if ic a ll y , th e y p le a d e d th a t the pa rt ie s to the Pr op ane Se rv ic e Ag re e me nts int e nd e d f or Southe rn Un ion ’s a ssi g ne e to b e re sp on sib le for pay ment of the ease ment-use fee s, and if this intent did not g et re duced to wr iting in the Propane Service Ag ree ments, “it was a result of accident, including scribner [ sic] error, or mutual mist ake, made a fter the orig inal ag ree ment.” The Deve loper s th u s s o u gh t “re formation of the Propane Ser vice Ag ree ment to conform to the parties’ intent.” Reformation r equire s two elements: (1) an orig inal ag ree ment and (2) a mutual mistake , made afte r the orig inal ag ree ment, in r educing th e o ri ginal16

ag ree ment to writing. CherokeeW ater Co. v. Forderhause, 741 S.W .2d 377, 379 (T ex . 1987); Bollner v. Plastics Solutions of T ex., I nc. , 270 S.W .3d 157, 169 (Tex. App.—El Paso 2008, no pet.). Sonterra’ s motion asse rts that the Deve lopers prese nted no evidenc e o f m u t u al mistake. Mutual mistake is an essential e lement of ref o rm at ion, see Cherok

ee W ater , 741 S.W .2d at 3 7 9 , a claim on which the Develope rs would have the burde n of proof at trial, see Tex. R. C iv. P. 166a(i) (no-e vidence motion mus t s t at e ele ments of claim or de fense on which adver se par

ty would have bur den of pr oof at trial a nd as t o which there i s no evidenc e). The ref ore, Sonterra’ s motion satis fied rule 166a(i) a nd was prope rly

befor e the tria l court for

its consideration. I n arguing that its sum mary -judg ment evidenc e ra ised a fa ct issue as to mutual mistake, the De veloper s point to Mi ller and Scovil’s testimony to the eff ect that both parties intended for the e aseme nt-use fe es to continue if the sy stem was eve r assig ned. As we have explained above, howeve r, that intent was in fa ct expressed in the Propane Service Ag ree ments as written. The langua g e of

the a g re e me nts is c on sis te nt w iththe e viden ce on wh ic h th e De ve lop e rs re ly in t he ir attempt to e stablish mutual mistake. I n his deposition, S covil stated, “[T]here wa s a provision in the contra ct that if Southern Union sold [the sy stem], then the assig nee w ould be re sponsible for pay ing the Ease ment Use F ees.” He further testified that he intended “on the assig nments [provisi on] .
. . to provide a way wher e Southern Union could sell it’s [ sic] sy stem, or the deve loper c ould sell it’s [si c] sy stem” and “ac cording ly , Southern Union would have the ability to sign a ll of its rights and
o b li g a ti o n s to w h o e v e r p u r c h a s e d th e s y s te m, ” in c lu d in g th e p ay me n t o f e a s e me n t- u s e f

e e s to the Deve lop er s ; t h at he did not intend to relieve any person who a cquire d the sy stem from Southern Un ion of the ob lig a tio n to pa

y the e a se me nt- us e fe e s; a nd that th e purp os e of

the “ Easem e nt U se17

Fe e” p ar agra

ph was “ to establish no rec ourse” ag ainst Southern Union “in the eve nt that a per son wh o p ur c ha se [d] th e sy ste m de fa ult e d. ” Mil le r’ s a ff

ida vit e xpre sse d a

sim ila r i nte nt. Acc ording to the evidenc e, the pa rties made no mistake in pre paringand dra fting the Propane Ser

vice Agr ee m en t s. The ag ree ments, by their plain languag e, ac complish what the contra cting parties testified that they intended the a g ree ments to do: (1) cre ate a n obl i g ation for Southern Union to pa

y ease ment-use fee s to the Deve lopers as long as Southern Union owned the sy ste m, a nd (2 ) cr e a te a

me c ha nis m by wh ic h th e De ve lop e rs wo uld c on tin ue to r e c e ive e a se me ntus e fe e s a ft e r a

ny sa le of the sy ste m by

Southe rn Un ion . Wh at th e De ve lop e rs no w urg e is that the agreem ents themselv es direc tly obliga te—or we re intende d to obligate —an assig nee of the sy stem to pay the Deve lo pers e aseme nt-use fe es. That position, howeve r, is simply not supported by

the unambig uous terms of the Propane Service Ag ree ments. Be cause the “Assig nments” provision as it i s w ri tte n s a tis fi e s th e pa rt ie s’ state d in te nti on s re g ard ing the “ c on tin uin g ” natur e of

e a se me nt- us e fee pay me n ts , w e d e c li n e to e n la r g e th a t p r o v is io nto im

p o s e ana f

f ir mati v e o b li g a ti o no nthe assig nee. See Clemmens v. Kennedy , 68 S.W. 2d 32 1, 32 4 (T e x. Civ
. Ap p. —T e xar ka na 19 34 , w ri t
re f’ d) (h old ingthat c ourt ha d n o p ow e r t o c ha

ng e con tr act act

ua lly ma de and

tr uly e mbo die d in
wr itt e n ins tr

ume nt on ba sis of re fo rm a tio n wh e n e vid e nc e sh ow e d that pa rt ie s ma de no mis take in pr e pa ri ngor dr a ft ingde e d) . A c c ord in gly , w e ho ld t hat th e De ve lop e rs we re no t e nti tle d to ref ormation of the Propa

ne Servic e Ag ree ments and over rule the D evelope rs’ fir st issue.
Bona F ide Purchaser I n their sec ond issue, the Developers arg ue that, “if the tria l court’s Mar ch 18, 2008 order is construed to include Sonterr a’s no-evidenc e ground ‘(2)’ as to the bona f ide purc haser

issue,The trial c ourt’s orde r g rantingSonter r a ’ s mo ti o n

s ta te s , “De fenda

nt’s No Evidenc e Motion 4 fo r S umm ary

Judg me nt w ithre sp e c t to Pla int if fs ’ c la ims of

mut ua l mi sta ke in bo th [ca

us e numbe rs ] is hereby GRANTED.” 18 then t h e t ri al co urt err ed in g rantingSonterra’ s no-evidenc e motion on such g round.” Having 4 deter mine d t h at S o nterra ’s no-e vidence motion seeking judgme nt as a matter of law on the Deve lopers’ r efor

mation action was properly g rante d on the basis that the De veloper s had pre sented no evidenc e of mutual mistake, we need not address the other g rounds ra ised in Sonterra’ s motion. Se e Pr ov ide nt L ifean d A c c ide nt I ns . Co . v . Kn ott , 1 28 S.W. 3d 21 1, 22 3 ( Te x. 20 03 ); se e al so Tex. R. App. P . 47.1. We overrule the Deve lopers’ se cond issue.
T h ir d - P a r t y B e n e f i c ia r y C l a i ms By their third issue, the De veloper s argue that the t ri al co u rt err ed in g ranting Sonterra’ s motion for summary judgme nt a s to the ir third-par ty benef iciary claims arising under the Asset Purcha se Ag ree ment betwee n ONEOK and S onterra and the Settl ement Ag ree ment betwee n the Dev e lop e rs , So uth e rn Un ion , a

nd ON EO K. Th e De ve lop e rs ple a de d th a t, a s th ir d- pa rt y be ne fi c iari e s, the y

c ou ld s ue Son te rr a

un de r t ho se a g re e me nts , whi c h the y argue d e nti tle d th e m to the c on tin ue d p ay me nt o f e a se me nt- us e fe e s. As dis c us se d p re vio us ly , O NE OK tr ans fe rr e d th e pr op ane dis tr ibutio n s y ste m to Sonterra while the Deve lopers’ suits ag ainst ONEOK and Southern Union wer e still pending. The As se t Purc ha se Ag re e me nt c on ta ine d p ro vis ion s th a t sp ok e to t he on g oin g lit ig a tio n b e tw e e n th e se pa rt ie s. Spe c if

ic a lly , th e As se t Purc ha se Ag re e me nt p ro vid e d in se c tio n 6 .4 (c ):19

I n the eve nt final adjudication or settlement of either or both of the Austin’s Colony Matter a nd the Senna Hills Matter r esul t s i n t he ea sement use f ee oblig ation c on tin uin g un de r e ith e r o r b oth of the de ve lop e r a g re e me nts a t is su e in t he se matte rs , [S onterra ] agr ees to e nter into any amendment to the develope r ag ree ments or new develope r ag ree ments as nec essar y that require s [S onterra ] to pay ease ment use fe es subsequent to the Effe ctive Date on the same terms and conditions as t h e ex isting de ve lop e r a g re e me nts
. The Develo p e r s ar g u e o na p p e a l t h a t t h e Se tt le me n t A g r e e me n t e xe c u te d b y the De v el o p er s , S o u th ernUn i o n , an d ON E OK “r es u l t s i n t h e eas em en tu s e f ee o b l i gat i o nco n t i nu i n g” beca use, pursua

nt to the settlement , S o u t h er n Union and ONE OK paid a ll easeme nt-use fe es due from them to the date of ONEO K’s tra nsfer of the sy stem to Sont err a. The Settlement Ag ree ment stated that Southern Union and ONEOK ag ree d to pa y cer tain sums to the Deve lopers as “pa y ment i nfu l l o f ( i ) e a s e m e n t u s e fe es ” an d (i i ) a t t o rn ey ’s fe es i n“s at i s fa ct i o no f a l l o b l i gat i o n s t h ro u gh Oc tob e r 1 , 2 00 4. ” Thus , the De ve lop e rs ma int a in, Son te rr a wa s r e qu ir e d und e r t

he As se t Purc ha se Ag ree ment either to a

mend the Propane Service Ag ree ments or to e nter i n t o n ew d eveloper ag ree ments so that it would be require d to pay ease ment-use fees “subsequent to the Effective D ate” of the tr ans fe r o f o wn e rs hip of the pr op ane dis tr ibutio n s y ste m. Th e De ve lop e rs fu rt he r a rgue that, beca use the only

exis ting “ develope r agr eeme nts at i ssue i n this matter” we re w ith them—Senna and HB H—this provision of the Asset Purcha se Agree m ent must be interpre ted to mean that they are third-par ty benef iciarie s of t hat agr eeme nt and can s ue to enfor ce Sonterra’ s obliga tions thereunder
. Sonterr a r e s p o n d s th a

t t h e D e v e lo p e r s cannot a ssert third-pa rty claims ag ainst it under the Se ttl e me nt A g re e me nt b e c a us e Son te rr a

wa s no t a pa

rt y to the se ttl e me nt a

nd did no t e xpre ssl y ag ree to a ny of the obligations that the Settlement A g ree ment alleg edly cre ated. In addition, Sonterra argues that the De veloper s cannot asser t c laims unde r the Asset Purchase Ag ree ment beca use they20

wer e neither

parties to that a g ree ment nor wer e they intended third-par ty benef iciarie s. Wit h respe ct to the Deve lopers’ c laims arising under the Asset Purcha se Ag ree men t , S o n t erra ar g ues that eve n if the De veloper s could be c onsidered third- party b en efic iaries unde r that ag ree ment, the
e a se me nt- us e fee ob li gati on did no t “ c on tin

ue ” a s a re su lt o f t

he De ve lop e rs ’ s e ttl e me nt w ith Southern Union and ON EOK, so sec tion 6.4(c) of t he Asset Purc hase A g ree ment was not trig g ere d.

Our a na ly sis of the thi rd -p art

y be ne fi c iary

iss ue tur ns on our a nal y si s of

the se ag ree ments, which is g overne d by well-e stablishe d principles of c ontrac t interpretation. Se e MC I Tel ecom ms. Corp. v. Texas Utils. Elec. Co. , 9 95 S.W. 2d 64 7, 65 0 ( Te x. 19 99 ). We m us t f ir st deter mine whether

the Asset Purcha se Ag ree ment evidenc es a n intent on the part of O NEOK a nd Sonterra to se cure some direc t benef i t fo r t he De veloper s, thus allowing them to enf orce that ag ree ment even thoug h they wer e not pa

rties to it. See id. at 651. I f we deter mine that ONEOK

and Son te rr a di d so in tend, w e the n c on sid e r whe the r t he se ttl e me nt o f t

he De ve lop e rs ’ s uit s a g a ins t S o u t hern U nion and ONEO K re sulted in the ease ment-use f ee oblig ation “continuing ” under the Propane Ser

vice Ag ree ments, thereby trig g eringan o b l iga

tion on the part of Sonterr a that the Deve lopers could se ek to enf orce . “To qua lify

as one f or whose benef

it the contra ct was made, the third party must show that he is e ither a donee or cre ditor benef iciary of, and not one who is bene fited only incidentally

by the per formanc e of, the contra ct.” Id. On e is a don e e be ne fi c ia ry if the pe rf

or manc e pr omi se d w ill , when r ender ed, come to h i m as a p u re donation, while a c reditor be nefic iary is one to whom perf ormanc e will come in satisfa ction of a l ega l duty owed to him by

the promisee. Id. The De v e lo p e r s h e r e ar g u e th a t th e y ar e c r e d it o r b e n e f ic ia r ie s b e c a u s e th e A s s e t Pur c h a s e Ag ree ment21

specific ally

identifies them, re cog nizes an obligation that would inure to their be nefit, and binds Sonterra to pe rfor

m that obligation. We ag ree . Th e As se t Purc ha se Ag re e m e nt s t a t e s t h a t S o nt e r r a w i l l a gr e e t o c o nt

r a c t ua lly ob lig a te itself to pay

ease ment-use f

ees “ on the same terms and conditions” as the exis ting Propane Ser vice Ag ree ments in the event that settlement r esults in the ease ment-use f ee oblig ation “co n t i n uing.” Although conditioned on the outcome of ONEOK and Southern Union’s settlem en t , Sonterra’ s obligation i t s el f i s unambig uous: Sont err a must enter into an a g ree ment (or amend the existi ng ag ree ments assig ned to it) t h at re q u i res it to pay ease ment-use f

ees. Sonterr a does not a

rg ue, nor does the rele vant case law sug g est, that the mere inclusion of such a condition will obviate the cle ar int e nt o f t he c on tr a c tin g pa

rt ie s to c re a te an o bli g a tio n f or the be ne fi t of

thi rd pa rt ie s. An d w hil e thi s provision of the ag ree ment does not identify Senna and H BH by n am e, it does plainly ref er to the develope rs who we re a sserting the rig ht to rece ive ea sement-use fee s in “the Austin’s Colony Matter
and the Se nn a Hi lls Matte r” and wh o wou ld the n be e nti tle d to re c e ive su c h f e e s “ on the same te rm s and conditions as the e x isting develope r ag ree ments.” The only rea sonable c onclusion to be draw n fr om the e xiste nc e of thi s pro vis ion is that if and wh e n Sont e rr a be c a me ob lig a te d to pa y e a se me ntus e fe e s, it h a d to pa

y the m to someone. B y

their ver y nature , the fe es ar e paid to the de veloper s, and the deve lopers implicated by the explicit refer ence to the Aust in’s Colony and S enna H ills m atters
are HB H and Senna
.

Sonterra a rg ues, howe ver, that rec og nizi ng the Deve lopers’ third-par ty rig hts under the Asset Purchase Ag ree ment would be inconsistent w ith se ction 11.14 of the a g ree ment, entitled

“ N o - T h i r d

P art y B e n e f i c i ar i e s . ” T h a tp r o v i s i o ns t a t e s : “ Ex c e pt a s o the rwi

se pr ov ide d in thi

s22

Agreem ent , nothing contained in this Ag ree ment shall entitle any one other than Seller [ONEOK] or Buy er [S onterra ] or their authorized succe ssors and assig ns to any claim, ca use of a ction, reme dy

or ri g h t o f an y k i n d w h a t s o e v e r . ” ( E mp h a s i s a d d e d
. ) I n o r d e r t o “ h ar m o n i z e an d g i v e e f

f e c t t o a ll provisions of the contra ct so that none will be mea ningle ss,” see id. at 652, we must interpre t section 6. 4 ( c ) a s an e xc e p t i o n “ p r o v i d e d i n t h i s A g r e e m e n t
. ” T h e r e f o r e , s e c t i o n 1 1
. 1 4 c an n o t be re a d to neg ate the r ights c onfer

red by section 6.4(c ) on th e De v elopers as third-par ty benef iciarie s of the
ease ment-use f

ee oblig ation. Havingdeter

mined that the Deve lopers ar e intended third-par ty benef iciarie s of the As se t Purc ha se Ag re e me nt, we no w tur n to the qu e sti on of wh e the r the “ se ttl e me nt of e ith e r o r b oth of the Austin’s Colo n y

Matter a nd the Senna Hills Matter r esult[ed] in the ease ment use fe e obligation continuing under either or both of the deve loper a g ree ments at issue i n t h ese matters,” i.e. , the Propane Service Ag ree ments. I f i t did not, as Sonterra ma intains, then Sonterra w as under no obligation “t o en t er i nto any amendment to the de veloper ag ree ments or new de veloper ag ree ments as nec essar

y [requiring it] to pay

ease ment use fees subs equent to [October 1, 2004,] the Effe ctive Date” of

the transf er of the s y stem to Sonterra. I f, however, the settlement did result in the
eas e me n t- u s e f

e e o b li g a ti o n “ c o n ti nu in g , ” th e n So n te r r a h a s b r e a c h e d th is p r o v is io n o f the Asset Pur c ha se Ag re e me nt b y

fa ili ngto e nte r i nto the ne c e ssa ry a g re e me nts
. We c on c lud e that th e langua g e of the As se t Purc ha se Ag re e me nt i s ambi g uo us a s to the meaningof “c ontinuing.” See W ebster , 128 S.W .3d at 231 (holding that court may conclude that
c on tr a c t is a mbi g uo us e ve n in a bs e nc e of su c h ple a din g by e ith e r p art

y ); Coker , 650 S.W .2d at 393 (conc luding that a g ree ment was ambiguous e ven thoug h both parties asse rted it was unambiguous23

and moved f

or summary

judgme nt). A contra ct is a mbiguous when its mea

ning is unc er t ai n and d o u b tf u l o r it is r e a s o n a

b ly s u s c e p ti b le to mo r e th an o n e me an in g . Coker , 650 S.W .2d at 393-94 (c i t i n g Skelly O il Co. v. Archer , 356 S.W .2d 774, 778 (1962))
. I n this case, the la ng uag e conc erning whether the ea sement-use fee obligati o n i s “c o n t inuing” as a r esult of the settlement of the De ve lop e rs ’ c la ims is a

mbi g uo us be c a

us e it is sus c e pti ble to at le a st t wo dif fe re nt r e a so na

ble meanings
. I n these c ircumstance s, “continuing ” could r efe r to an oblig ation established fr om the tim e the Pr op ane Se rv ic e Ag re e me nts we re e xec ute d and a s pa rt of tho se agreement s— i.e. , an ob lig a tio n th a t “ c on tin

ue d” int o the futur e , pa st any sy ste m tr ans fe r, wi tho ut re g ard or re fe re nc e to any other a g ree ment. This is the construction that Sonterra urg es, as evidenc ed by its assertion that “the Settlement Ag ree ment does not in any way claim that the ea sement use f ees ‘ continue.’” I nd e e d, fo r t

he Se ttl e me nt Ag re e me nt to cr e a te a “ c on tin uin g ” ob lig a tio n b e y on d th e e ff e c tiv e date of the sy ste m trans fe r, it wou ld have to cr e a te an o bli g a tio n o n th e pa rt of Son te rr a , w hic h it

c ou ld
no t do , a s So nte rr a

wa s n ot a

pa rt y to t he se ttl e me nt. But “ continuing” could also re asonably be construed t o mean that if, as a result of the
se ttl e me nt, the De ve lop e rs we re e nti tle d to r e c e ive any fu rt he r e a se me nt- us e fe e s a ft e r t he po int in time when Souther

n Un io n a n d O N E O K had asse rted that such e ntitlement cease d—namely , J anuar y 1, 2003, when Southern U nion t ra n s fe rred the sy stem to ONEOK—then the obligation to make
ease ment-use f

ee pa y ments could be re g arde d as “c ontinuing” f rom the per spective of

the De ve lop e rs . Put di ff

e re ntl y , s inc e ON EO K h a d ta ke n the same p os iti on

that So nte rr a

a do pte d in this case— i.e. , t h at the Deve lopers’ r ight to re ceive ease ment-use f ees c ease d fore ver w hen Southern Union transfe rre d the s y stem—then an a cknowledg ment by ONEOK that it did in fact owe24

e a se me nt- us e fe e s to the De ve lop e rs a ft e r t he tr ans fe r f

ro m So uth e rn

Un ion too k p lac e co uld
re a so na bly be un de rs too d a s a “ c on tin uatio n” of the ob lig a tio n to pa y the fe e s. Thus , th e state me nts in th e S ett lem ent Agreem ent th at O NEO K’s pay men ts of $ 52 ,6 42 to S enn a and$5 7, 84 7 t o HBH
re p re s en t i n g “p ay

m en ti nfu l l ” o f e as em en t -u s e f ee s an d s at i s fa c t i o no f a l l o b l i gat i o n s t h ro u gh October 1, 2004, due under the Propane Service Ag ree ments could arguably support a claim that the obligation “continued,” the reby trig g eringSonterra’ s obligations under sec tion 6.4(c) of the Asset Pur c ha se Ag re e me nt.

I n li g ht o f t

his a mbi g uit

y , “ the g ra

nti ngof a mot ion fo r su mm ary judg me nt [w a s] improper be cause the interpre tation of the instrument be comes a fac t issue.” Coker , 650 S.W .2d at 3 9 4 (c i t i n g Ha rri

s v . R owe , 593 S.W .2d 303, 306 (Tex. 1980) ). “The trier of fac t must resolve the ambig uity by deter

mining the true intent of the par ties.” Id. ; Trin ity Un iv e rsa l I ns . Co . v . P on sfo rd Br os . , 423 S.W .2d 571, 575 (Tex. 1968). We theref ore sustain the D evelope rs’ third issue on appe al and hold that the trial c ourt err ed in g rantingSonte rr a’ s m otion for summary judgme nt as to the De ve lop e rs ’ t

hir d- pa rt y c la ims ari sin g un de r t

he As se t Purc ha se Ag re e me nt.
Fai lure of Ass ign ment By their four

th i s s u e, the Developer s argue that the tria l court er red in g ranting Sonterra’ s second moti on for summ ary judgme nt with respe ct t o their cla ims based on fa ilure of the assig nment of the sy stem from ONEO K to Sonterra.

I n addition to seeking damag es for brea ch of c ontrac t, the Deve loper s pleade d that Sonterra’ s ref

usal to pay

ease ment-use f

ees due under the Propane Ser vice Ag ree ments rende red the
as s i gn m ent from ONEOK to Sonterra “inef fec tive.” The Deve lopers pre mised this complaint on25

(1) their rea ding of the “Assig nments” provision of the Propane Service Ag ree ments as a r estriction
on tr ans fe r, and (2 ) the ir a lle g e d th ir d- pa rt y be ne fi c iary

status a s d e ri ve d und e r t

he As se t Purc ha se Ag re e me nt b e tw e e n O NE OK and Son te rr a , w hic h c on ta ine d th e fo llo wi ngpr ov isi on :
S h o u l d an y o f t h e A s s et s b e s u

b j ec tt o a v al i d

co n s en tt o as s i gnor other restriction on tra ns fe r as to which th e assi g nment here under w ould be a br eac h of such ob lig a tio n o r r e su lt i n th e te rm inatio n o f s uc h A sse t( s) , th e n a ny su c h A sse t( s) sh a ll be deem ed not transferred here under unle ss and until such consent or othe r re str ic tio n is ob ta ine d o r w a ive d f ro m or by the thi rd pa rt y havin g su c h r ig ht. (Emphase s added.) Thus, the Deve lopers asse rted that, a s third-party benef iciarie s of the ONEOK –Sonterra A sset Purchase Ag ree ment, they had the r ight to “e nforc e the tra nsfer restric tion (or tra nsfer voidance ) provision” of that ag ree ment. We disag ree . The Assig nments provision of the Propane Servi ce Agr eements is not a restriction on transfe r. I t states only

that Southern Union has an aff irmative obligation “ to r equire any assig nee to as su me f

u l l r e s p o n s i b i l i t y

f o r a l l o f S o u t h e r nU n i o n ’ s r i g h t s an d

o b l i g a t i o n s ” u n d e r

t h o se ag ree ments. By

its own terms, it poses no “ restric tion” and is silent as to what ef fec t noncompliance with the provisio n h as o n the validity of the tra

nsfer
. Cf. OA IC

Com me rc ial

As se ts, L.L. C. v. S t o n egate Vill., L.P. , 234 S.W .3d 726, 733 n.3 (Tex. App.—Dallas 2007, pe t. denied) ( g iving
e ff e c t to re str ic tio n on tr ans fe r statin g that “ no Part ne r sh a ll Tr ans fe r a ll or any po rt ion of its I nte re st or any rig hts therein” unde r ce rtain conditions and that any transfe r or attempted transfe r in violation of stated c onditions “shall be null and void and of no e ffe ct whate ver” ).

Moreove r, the re cord c ontains no evidenc e that the Developer s’ consent was re quired in order to e ffe ct transf

er of any asset subjec t to the As s et Purchase Ag ree ment betwee n ONEOK26

and Sonterra . Thus, to the extent that a “fa ilure of a ssign m en t ” ca u s e o f ac tion even exists under Texas la w, the Asset Purchase Ag ree ment does not support rec overy under suc h a theor

y in this case. As Sonterra

points out, the provisi on on which the Deve lopers rely preve nts the transf er of an asse t (1) in the e vent such tra

nsfer would cause a bre ach or termination of the a sset or (2) if the transf er is conditioned upon the consent of a third par

ty and that conse n t h as n o t b ee n obtained. The Deve lopers’ a

rg ument reg ardingSonterra’ s “fa ilure and r efusa l to pay ease ment-use f

ees” afte r ONEOK transfe rre d the s y stem assets does not fa ll within either of the situations contemplated by this provision. Furt h ermore , as we have pr eviously discussed, the Asse t Purchase A g ree ment contains a c lause that pre cludes a third party

from asse rting claims under the ag ree ment “[e]x cept as otherw ise provided in the Ag ree m en t
. ” The Ag ree ment, howeve r, conta ins no provision that confe rs on any

third party

the rig ht to challeng e the va lidity o f the transf

er of the sy stem from ONEOK to Sonterra. “ The intent to confe r a direct benefit upon a third par ty ‘must be clea

rly and fu l l y spelled out or enf

orce ment by

the third party

must be denied.’” South Tex. W ater Auth. v. Lomas , 2 2 3 S
. W
. 3 d 3 0 4 , 3 0 6 (T ex . 2 0 0 7 ) ( q u o t i n g MCI Telec omms. Corp. , 995 S.W .2d at 651). De sp ite the a

bs e nc e of su c h in te nt, the De ve lop e rs no ne th ele ss argue tha t th e “ No Th ir d- Part

y Be nefic iaries” p rovi sion its e lf de mon str a te s “ that bo th S on te rr a and ON EO K e xpre ssl y
ac knowledg ed t h i rdp ar t y

b en ef i ci ar i es i nt h ei r a s s et p u rc h as e a gre em en t
. ” O nt h e c o n t ra ry , al t h o u gh the ag ree ment acknow ledg es t hat i f a third party possesses a rig ht to restric t the t ransf er of an asse t
s u b j e c tt o t h e a g r e e m e n tb y w i t h h o l d i n g i t s c o n s e n t , i tm ay d o s o , i td o e s n o t , d i r e c t l y o r i n d i r e c t l y,
c o n f e r s u c h a r ig h t on any

party
. S ee id. (“Athird party

may only enfor ce a

contra ct when the27

contra cting parties themse lves intend to secur e some bene fit for the third pa rty and ente red into the contra ct direc tly

for the third pa

rty ’s bene fit.”). We hold that the trial court proper ly g rante d summary judgme nt in favor of

Sonterra on the Deve lopers’ f

ailure- of-a ssignment c laims and overr ule the De veloper s’ fourth issue.
CO NC LU SION We r e ve rs e the tr ia l c ourt ’s summa ry jud g me nt w it h re sp e c t to the De ve lop e rs ’ third-par ty benef iciary claim for br ea ch o f the Asset Purcha se Ag ree ment, and we rema nd that portion of the cause to the trial court for further proce eding s consistent with this opinion. We af firm the re ma ind e r o f t

he tr ia l c ourt ’s jud g me nt.

J . Woodfin J ones, Chief Just ice Be fore Chief J ustice Jones, J ustices Pury ear and He nson Dissenting O pinion by J ustice Pury ear Affir med in Part; Reverse d and Remande d in Part Filed: Jul y

3, 2009