Opinion ID: 1859381
Heading Depth: 1
Heading Rank: 3

Heading: doornbos

Text: As to Doornbos, the trial court did not make a bad faith determination, but only held that the release was unconscionable and therefore unenforceable. Unique to Doornbos, the trial court found the termination letter to be ambiguous, but assumed that it was not, in order to reach the unconscionability issue. The only issue before us is whether the court of appeals properly determined that El Paso waived the release issue by failing to object to the trial court's finding of ambiguity. Initially, the court of appeals reversed that part of the trial court's judgment holding the release unconscionable and awarding Doornbos damages and attorney's fees, and rendered judgment for El Paso. [24] In doing so, the court of appeals concluded that the trial court improperly found that the Doornbos release was ambiguous, and that the terms of the release unambiguously encompassed any take-or-pay liabilities. [25] But on rehearing, the court of appeals concluded that it had wrongly raised and resolved the factual question of whether the [Doornbos termination letter] was a release. [26] The court reasoned that because the trial court refused to rule on whether the termination letter was a release, it was El Paso's burden to come forward with a challenge on appeal establishing that the document was a release as a matter of law. In short the court of appeals held that El Paso waived the issue. We disagree. Whether or not a contract is ambiguous is a question of law for the court. [27] Accordingly, when the court of appeals held in its original opinion that the termination letter was an unambiguous release, it resolved a legal issue. And the court of appeals erred in concluding on rehearing that El Paso had to affirmatively challenge on appeal the trial court's finding of ambiguity. Furthermore, the legal issue of ambiguity was subsumed under El Paso's principal complaint that the release was not unconscionable, but rather should be enforced as written to bar Doornbos's claims. In this case, the trial court made a factual finding of ambiguity. The finding arose out of a summary judgment proceeding. After hearing arguments, the trial court issued an Order Finding Unconscionability as a Matter of Law, in which it held unenforceable the various amendments, modifications and releases, including the Doornbos termination letter. Although ostensibly rendered as a partial summary judgment, the court filed findings of fact and conclusions of law in support of its order and there mentioned that the Doornbos final termination letter was ambiguous. The trial judge stated: the Court finds an ambiguity in the Agreements to Terminate Contracts regarding the phrase, All past liabilities that might exist between the parties are waived. The Court makes no ruling herein as to whether such language is sufficient to operate as a release of past take-or-pay damages. However, since El Paso takes the position that the language was intended to release past take-or-pay liabilities, the Court finds that the effect of such a release of past take-or-pay damages without any corresponding benefit to Plaintiffs would be so one-sided as to constitute the substantive abuse described in Wade v. Austin at the time of its execution. (emphasis added). Thus the court did not resolve the ambiguity because it also determined that the agreement's operation as a release was unconscionable. Regardless, such a finding cannot form an alternative basis for its judgment. In fact, the finding is immaterial to the court's final judgment. First, to decide as the trial court did, that the Doornbos termination letter was unconscionable and therefore void, it necessarily decided that the release did exactly what it purported to dorelease El Paso. That is to say, by concluding that the termination letter was unconscionable, the court necessarily assumed that the agreement operated to release El Paso's take-or-pay obligations and thereby impliedly resolved the supposed ambiguity in El Paso's favor. A release that may not actually be a release because it is ambiguous cannot be said to be unconscionable as a matter of law. Thus the trial court's controlling conclusion of unconscionability rendered the ambiguity finding unnecessary to its judgment. As such, El Paso's failure to specifically challenge it did not constitute a waiver. [28] Further, we liberally construe issues presented to obtain a just, fair, and equitable adjudication of the rights of the litigants. [29] In the court of appeals, El Paso argued that the evidence does not support a finding of unconscionability. Had the trial court properly enforced the amendments and releases, [Doornbos's] claims would be barred. Liberally construing this argument to avoid waiver, we conclude that El Paso preserved its complaint that the trial court erred in failing to enforce the releases. [30]