Court Opinion

ID: 3120023
Source: CourtListenerOpinion
Date Created: 2015-10-16 08:34:23.350195+00
Date Added: 2024-06-11T11:53:03.526199
License: Public Domain

Opinion issued December 6, 2012.

                                    In The

                             Court of Appeals
                                   For The

                         First District of Texas
                         ————————————
                            NO. 01-11-00782-CV
                          ———————————
      PRINCIPAL COMMERCIAL ACCEPTANCE, L.L.C., Appellant
                                      V.
                   BUCHANAN FUND V, L.L.C., Appellee

                  On Appeal from the 165th District Court
                           Harris County, Texas
                     Trial Court Case No. 2009-59436

                        MEMORANDUM OPINION

      Principal Commercial Acceptance, L.L.C. (“PCA”) appeals a take-nothing

judgment rendered in favor of Buchanan Fund V, L.L.C. PCA sued to recover

$8,359,245 for Buchanan’s alleged breach of a guaranty agreement relating to a

real estate development project. After a bench trial, the trial court found the
Guaranty ambiguous, found the evidence supported Buchanan’s interpretation of

the Guaranty, and determined PCA had not proved that Buchanan breached. On

appeal, PCA contends the trial court erred in finding the Guaranty ambiguous and

in finding that the Guaranty was not breached. We affirm.

                                  Background

      PCA is a lender specializing in originating and underwriting commercial real

estate loans. Buchanan and MAC Cypress Creek GP, LLC (“Macfarlan”) formed a

partnership, Cypress Creek Centre LP, to purchase and renovate an office complex

in northwest Houston. PCA agreed to be the lender for the project.

      PCA and Cypress Creek entered into a Loan Agreement for the project.

The Loan Agreement provided that the purchase and redevelopment of the

property, estimated to cost $100 million, would be funded at a 75% debt-to-25%

equity ratio. PCA agreed to finance $75 million over time and Cypress Creek

agreed to contribute $25 million in equity for the project. Before closing, Cypress

Creek proposed that it contribute about half of the equity, approximately $12.2

million, at closing, and that it contribute the balance of the equity—$12,814,031—

in stages throughout the life of the project, as costs were incurred. PCA agreed to

this proposal. In the Loan Agreement, the parties defined that portion of the $25

million equity contribution as “Deferred Equity”:

      The portion of the Borrower’s cash equity investment in the Project to
      be funded by Borrower after Closing as provided in Section 4.7
                                        2
       herein, in an aggregate amount of not less than Twelve Million, Eight
       Hundred Fourteen Thousand, Thirty One and 00/Dollars
       ($12,814,031.00).

The parties further agreed that Cypress Creek would fund the Deferred Equity as

Disbursement Requests were made by PCA, as set forth in Section 4.7 of the Loan

Agreement. Section 4.7 provides:

       4.7 Deferred Equity. Notwithstanding any provision of this
       Agreement or the Loan Documents to the contrary, [PCA] shall have
       no obligation to disburse [project costs] except in accordance with the
       Project Budget and not to exceed seventy-five percent (75%) of each
       Disbursement Request approved by [PCA]. [Cypress Creek] shall
       fund twenty-five [percent] (25%) of each such Disbursement Request
       out of pocket as Deferred Equity when and as such amounts are due
       and shall provide [PCA] on a monthly basis with evidence of payment
       during the preceding month of such Deferred Equity. . . . [Cypress
       Creek] further acknowledges and agrees that [PCA] has agreed to
       fund the Loan in reliance upon [Cypress Creek’s] agreement to pay
       and contribute the Deferred Equity when and as due.

(Emphasis added). In other words, PCA would issue Disbursement Requests

periodically, and each Disbursement Request would be funded proportionally, with

PCA loaning 75% and Cypress Creek contributing equity to fund the remaining

25%.

       On the same day the parties entered into the Loan Agreement, Buchanan

entered into a “Limited Guaranty of Payment” with PCA.             In it, Buchanan

guaranteed to PCA:

       (a) If for any reason whatsoever, [Cypress Creek] fails to timely fund
           the Deferred Equity when and as required pursuant to the Loan
           Agreement, [Buchanan] shall fund such amounts within ten (10)
                                         3
            business days after notice from [PCA] of such failure by [Cypress
            Creek], provided, however, [Buchanan] will not be obligated to
            fund Deferred Equity in excess of Twelve Million, Eight Hundred
            Fourteen    Thousand       Thirty-One   and     No/00     Dollars
            ($12,814,031.00) in the aggregate (the “Buchanan Funding
            Obligation”).

      As the project unfolded, Cypress Creek made all periodic Deferred Equity

contributions as required by the Loan Agreement, but failed to meet a separate

funding obligation under the Loan Agreement, one that required Cypress Creek to

fund approximately $2.1 million for net operating expenses through an escrow

account. After Cypress Creek failed to fund the escrow, PCA informed Cypress

Creek of its default and gave it time to cure. The parties negotiated to try to

resolve this issue, but the negotiations ultimately failed, and PCA foreclosed on the

property.

      PCA then sued Buchanan under the Guaranty to recover Deferred Equity

that Cypress Creek did not contribute in the amount of $8,359,245.1 Buchanan

denied liability, responding that the Guaranty did not obligate Buchanan to

contribute any remaining unfunded Deferred Equity because Cypress Creek was

current on its payments of Deferred Equity “when and as required by [Section 4.7

of] the Loan Agreement” (i.e., in response to Disbursement Requests and in an

amount equal to 25% of each Disbursement Request).               Buchancan further

1
      PCA calculated this number by subtracting the total of various amounts Cypress
      Creek had contributed as its 25% proportionate share in compliance with earlier
      Disbursement Requests from $12,814,03, the total Deferred Equity.
                                          4
responded that the Loan Agreement did not accelerate the payment of Deferred

Equity upon default, nor did Cypress Creek promise to pay the Deferred Equity

except in connection with disbursement requests. In addition, Buchanan asserted

the affirmative defense of ambiguity.

      After a bench trial, the trial court concluded the Guaranty was ambiguous

and imposed no further obligation on Buchanan. Based on these conclusions, the

trial court rendered a take-nothing judgment. PCA appeals.

                                    Discussion

      In its first and second issues, PCA contends the Guaranty is unambiguous

and requires Buchanan to pay the remaining amount of Deferred Equity that

Cypress Creek did not pay. Thus, PCA argues, the trial court erred by failing to

enforce the Guaranty. Buchanan responds that the Guaranty imposes no such

obligation, and that the trial court correctly concluded the Guaranty is ambiguous.

A.    Law Pertaining to Construction of Contracts

      The interpretation of a guaranty is a question of law that this court reviews

de novo. Wasserberg v. Flooring Servs. of Tex., LLC, 376 S.W.3d 202, 206 (Tex.

App.—Houston [14th Dist.] 2012, no pet.) (citing Gulf Ins. Co. v. Burns Motors,

Inc., 22 S.W.3d 417, 423 (Tex. 2000)). In construing a guaranty, as with other

contracts, the primary concern of the reviewing court is to ascertain the intent of

the parties. 84 Lumber Co. v. Powers, No. 01-09-00986-CV, 2012 WL 243524, at

                                         5
*7 (Tex. App.—Houston [1st Dist.] Jan. 26, 2012, no pet.) (citing Coker v. Coker,

650 S.W.2d 391, 393 (Tex. 1983)). We begin our inquiry into the parties’ intent

with the contract’s express language. Progressive Cnty. Mut. Ins. Co. v. Kelley,

284 S.W.3d 805, 807 (Tex. 2009). A guarantor’s liability is measured by the

principal’s liability, unless the guaranty expressly provides for greater or lesser

liability. Pham v. Mongiello, 58 S.W.3d 284, 288 (Tex. App.—Austin 2001, pet.

denied). Any uncertainty in a guaranty must be resolved in favor of the guarantor.

See Coker, 650 S.W.2d at 394 n.1; 84 Lumber Co., 2012 WL 243524, at *7.

      If a contract is “so worded that it can be given ‘a certain or definite legal

meaning or interpretation,’ it is not ambiguous and the reviewing court will

construe it as a matter of law.” 84 Lumber Co., 2012 WL 243524, at *2 (quoting

Coker, 650 S.W.2d at 393). An unambiguous contract will be considered the

objective statement of the parties’ intent and enforced as written. Id. Extrinsic

evidence may be admitted to determine the true meaning of the contract only after

the contract had been determined to be ambiguous. Nat’l Union fire Ins. Co. of

Pittsburgh, PA v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995).

      “A contract is ambiguous only when its ‘meaning is uncertain and doubtful

or it is reasonably susceptible to more than one meaning.’” 84 Lumber Co., 2012
WL 243524, at *2 (quoting Coker, 650 S.W.2d at 393). An ambiguity in a contract

may be patent or latent. Tyco Valves & Controls, L.P. v. Colorado, 365 S.W.3d
6
750, 767 (Tex. App.—Houston [1st Dist.] 2012, pet. filed). A patent ambiguity is

“apparent on the face of the contract.” Id.; see Nat’l Union Fire Ins. Co. v. CBI

Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). A latent ambiguity is one that

becomes apparent when a contract is applied under particular circumstances. Tyco

Valves & Controls, L.P., 365 S.W.3d at 767; see Nat’l Union Fire Ins. Co., 907
S.W.2d at 520.

      Generally, when a contract is ambiguous, interpretation of the agreement

becomes a fact issue for the fact-finder to resolve through extrinsic evidence.

Coker, 650 S.W.2d at 394; Tyco Valves & Controls, L.P., 365 S.W.3d at 766–67;

see Lenape Res. Corp. v. Tennessee Gas Pipeline Co., 925 S.W.2d 565, 574 (Tex.

1996)). However, if the meaning of a guaranty is uncertain or it is subject to more

than one reasonable interpretation, a reviewing court will apply the construction

“most favorable to the guarantor.” Coker, 650 S.W.2d at 394 n.1, quoted in 84

Lumber Co., L.P., 2012 WL 243524, at *7 & n.2. Where, as here, there are

multiple instruments pertaining to the same transaction, they may be read together

in construing the parties’ agreement. Silver Lion, Inc. v. Dolphin St., Inc., No. 01-

07-00370-CV, 2010 WL 2025749, at *16 (Tex. App.—Houston [1st Dist.] May 20,

2010, pet. denied) (mem. op.) (citing Fort Worth Indep. Sch. Dist. v. City of Fort

Worth, 22 S.W.3d 831, 840 (Tex. 2000)).

                                         7
B.    Key Provisions of the Guaranty

      Section 1 of the Guaranty states Buchanan’s obligations. First, section 1(a)

requires Buchanan to fund, within ten days after notice, such amounts of Deferred

Equity that Cypress Creek failed to timely fund “as required by the Loan

Agreement.” Section 1(a) of the Guaranty states:

      (a) If for any reason whatsoever, [Cypress Creek] fails to timely fund
      the Deferred Equity when and as required pursuant to the Loan
      Agreement, [Buchanan] shall fund such amounts within ten (10)
      business days after notice from Lender of such failure by [Cypress
      Creek], provided, however, [Buchanan] will not be obligated to fund
      Deferred Equity in excess of Twelve Million, Eight Hundred Fourteen
      Thousand Thirty-One and No/00 Dollars ($12,814,031.00) in the
      aggregate (the “Buchanan Funding Obligation”).

Section 1(b) provides that the Buchanan Funding Obligation will be reduced upon

each funding by Cypress Creek of the Deferred Equity equal to 25% of each

Disbursement Request.2 Section 1(c) provides that Buchanan also guarantees “in

addition to the maximum Buchanan Funding Obligation, the payment of all

Enforcement Costs.” Finally, section 1 defines the “Guaranteed Obligations” or

“Indebtedness” as the Buchanan Funding Obligation plus Enforcement Costs.

Thus, this case turns on the contract’s definition of the “Buchanan Funding

Obligation.”

2
      It is undisputed that Cypress Creek made payments of Deferred Equity, but the
      parties disagree about whether certain payments made by Cypress Creek are
      properly considered Deferred Equity.
                                        8
      Section 2 of the Guaranty defines the remedies available to PCA in the event

of Cypress Creek’s failure to comply with the Loan Agreement. Section 2(a) sets

forth the remedy available for Cypress Creek’s failure to pay Deferred Equity

when and as required under the Loan Agreement, while section 2(c) defines the

remedy available upon the occurrence of any “Event of Default” under the Loan

Agreement. Section 2 states:

      (a) In the event of any failure by [Cypress Creek] to pay the Deferred
      Equity when and as required under the Loan Agreement, [Buchanan]
      agrees, on demand by [PCA] as aforesaid, to pay the Buchanan
      Funding Obligation regardless of any defense, right of set-off or
      claims which [Cypress Creek] or [Buchanan] may have against
      [Cypress Creek]. This is an absolute, irrevocable, present and
      continuing guaranty of payment and not of collection.

      (b) Notwithstanding anything to the contrary herein contained, in any
      action to enforce any of the Guaranteed Obligations of [Buchanan]
      under this Guaranty, [PCA], at its election, may proceed against
      [Buchanan], with or without: (i) joining [Cypress Creek] in any such
      action; (ii) commencing any action against or obtaining any judgment
      against [Cypress Creek]; or (iii) commencing any proceeding to
      enforce the Loan Agreement, realize upon any Loan Document,
      foreclose the Mortgage or obtain any judgment, decree or foreclosure
      sale therein.

      (c) Further, upon the occurrence of an Event of Default under the
      Loan Documents, [PCA] shall have the option, at its sole discretion, to
      require that [Buchanan] pay the entire remaining Buchanan Funding
      Obligation to [PCA] to apply toward the Indebtedness in accordance
      with the Loan Documents. [Buchanan] agrees to pay the Buchanan
      Funding Obligation no later than ten (10) days after demand from
      [PCA] after such an Event of Default. [PCA] may apply the funds
      received as the Buchanan Funding Obligation in any manner
      permitted under the Loan Documents in Lender’s sole discretion.
      Without limitation, Lender may apply such funds to reduce the
                                        9
      principal or other Loan indebtedness, or Lender may use such funds to
      pay Project Costs.

      The Loan Agreement defines “Event of Default” as “[o]ne or more of the

events or occurrences referred to in Article 9” of the Loan Agreement.3 It is

undisputed that Cypress Creek’s failure to fund the escrow account constituted a

failure on the part of Cypress Creek “to comply with any of its other obligations”

under the Loan Agreement, and thus, constituted an Event of Default under the

Guaranty. It is also undisputed that Cypress Creek timely funded its proportionate

25% share of any Disbursement Request.

C.    Does the Guaranty unambiguously obligate Buchanan to pay unfunded
      Deferred Equity?

      To support its position, PCA points to the following: first, it notes that the

Loan Agreement defines “Deferred Equity” as “[t]he portion of [Cypress Creek’s]

cash equity investment in the Project to be funded by [Cypress Creek] as provided

in Section 4.7 herein, in an aggregate amount of not less than Twelve Million,

Eight Hundred Fourteen Thousand, Thirty-One and 00/Dollars ($12,814,031.00)”

(emphasis added). Second, PCA points to the recitals in the Guaranty. It argues

that Recital A, which notes that defined terms used in the Loan Agreement have

the same meaning as in the Guaranty, incorporates the Loan Agreement’s

3
      This reference to Article 9 in the Loan Agreement’s definition of Event of Default
      is a typographical error. Article 9 does not identify events of default but, instead,
      lists PCA’s remedies upon an event of default. It is actually Article 8 of the Loan
      Agreement that sets forth the events that constitute an Event of Default.
                                           10
definition of Deferred Equity, and creates an obligation on the part of Buchanan to

fund the equity in the project in an amount not less than $12.8 million. PCA then

turns to section 2(c) of the Guaranty, which it contends gives PCA “the option, in

its sole discretion, to require that [Buchanan] pay the entire remaining Buchanan

Funding Obligation to apply toward the Indebtedness in accordance with the Loan

Documents.” In short, PCA argues that the “entire remaining Buchanan Funding

Obligation” is all unpaid Deferred Equity, subject to the $12.8 million cap, or

approximately $8.4 million. Under its interpretation, Buchanan’s obligation under

the Guaranty is absolute and required it to pay PCA any part of the $12.8 million

of Deferred Equity that Cypress Creek did not previously pay.

      Buchanan responds, and the trial court found, that the Guaranty does not

require it to guarantee a sum certain, but only those equity contributions due and

owing under the Loan Agreement. Thus, Buchanan contends, the Guaranty has a

second interpretation and is therefore, at best, ambiguous as to the amount it

promised to guarantee. Buchanan points to section 1(a) of the Guaranty and notes

that the “Buchanan Funding Obligation” is defined in terms of—and, therefore, is

triggered only by—Cypress Creek’s failure to timely fund Deferred Equity when

and as required pursuant to the Loan Agreement. Section 1(a) provides:

      If . . . [Cypress Creek] fails to timely fund the Deferred Equity when
      and as required pursuant to the Loan Agreement, [Buchanan] shall
      fund such amounts within ten (10) business days . . ., provided,
      however, [Buchanan] will not be obligated to fund Deferred Equity in
                                        11
      excess of Twelve Million, Eight Hundred Fourteen Thousand Thirty-
      One and No/00 Dollars ($12,814,031.00) in the aggregate (the
      “Buchanan Funding Obligation”).

Thus, Buchanan contends that Buchanan’s obligation to fund any amount of

Deferred Equity (subject to a cap of $12.8 million) is triggered only if Cypress

Creek fails to timely fund Deferred Equity when and as required, i.e., after PCA

approved and paid its 75% share of a Disbursement Request. Under Buchanan’s

interpretation, Buchanan’s obligation under the Guaranty was never triggered, and,

accordingly, never breached, because Cypress Creek never failed to fund its 25%

proportionate share of any Disbursement Request, which was the only obligation it

had with respect to its contribution of Deferred Equity.

      PCA advances two reasons Buchanan’s interpretation of the Guaranty is not

reasonable: (1) it renders Buchanan’s promise illusory and void for lack of

consideration and (2) it renders other provisions of the Guaranty meaningless. We

address each argument in turn.

      “A promise is illusory if it does not bind the promisor, such as when the

promisor retains the option to discontinue performance.” In re 24R, Inc., 324
S.W.3d 564, 567 (Tex. 2010) (orig. proceeding) (per curiam), quoted in Cleveland

Constr., Inc. v. Levco Constr., Inc., 359 S.W.3d 843, 853 (Tex. App.—Houston

[1st Dist.] 2012, pet. dism’d). According to PCA, Buchanan’s interpretation gives

Buchanan “the power, acting unilaterally, to eliminate its obligation to pay the

                                         12
Deferred Equity” by causing Cypress Creek to default. This argument ignores the

separate corporate identities of Buchanan and Cypress Creek: Cypress Creek was

the borrower under the Loan Agreement, not Buchanan. While PCA suggests that

Buchanan wielded total control over Cypress Creek and could have caused Cypress

Creek to default by withholding funds from it, PCA fails to demonstrate that the

decision whether Cypress Creek would default under the Loan Agreement was

subject to the whim or caprice of Buchanan. PCA did not provide any evidence to

support the conclusion that the corporate forms of Buchanan and Cypress Creek

should be disregarded. We therefore reject PCA’s contention that Buchanan’s

promise was illusory. See In re 24R, Inc., 324 S.W.3d at 567; Cleveland Constr.,

Inc., 359 S.W.3d at 853; see also Hackberry Creek Country Club, Inc. v.

Hackberry Creek Home Owners Ass’n, 205 S.W.3d 46, 61 (Tex. App.—Dallas

2006, pet. denied) (promise is illusory when performance of promise “potentially

subject to the whim or caprice” of one party to contract). PCA’s position also

ignores the practical distinction between a loan and equity funding of a project: a

loan is a promise to pay a sum of money. A promise to provide deferred equity is

in the nature of a promise for future capital contributions, which would not

necessarily arise for a project upon default of the loan obligation. In their Loan

Agreement, PCA and Cypress agreed to several provisions, including acceleration

of sums due under the loan, in the event of a default. But Cypress never promised

                                        13
to pay PCA unfunded Deferred Equity in that event.            As Cypress Creek’s

guarantor, Buchanan did not promise to assume a greater obligation than Cypress

Creek did.

      PCA also argues that Buchanan’s interpretation of the Guaranty is

unreasonable because it renders other provisions of the Guaranty meaningless.

Specifically, PCA contends sections 3, 4, 13, and 18 of the Guaranty are

meaningless under Buchanan’s interpretation.

      We are mindful that a court “must examine and consider the entire writing in

an effort to harmonize and give effect to all the provisions of the contract so that

none will be rendered meaningless.” J.M. Davidson, Inc. v. Webster, 128 S.W.3d
223, 229 (Tex. 2003).      But none of the provisions PCA cites are rendered

meaningless under Buchanan’s interpretation of the Guaranty. PCA’s argument

regarding section 4 of the Guaranty illustrates this point. Entitled “No Discharge,”

section 4 provides:

      [Buchanan] agrees that the Guaranteed Obligations, covenants and
      agreements of [Buchanan] under this Guaranty shall not be affected or
      impaired by any act of [PCA], or any event or condition except full
      payment of the Guaranteed Obligations. . . . [Buchanan] shall remain
      liable as a principal until all Guaranteed Obligations shall have
      been paid in full, notwithstanding any fact, act, event or
      occurrence which might otherwise operate as a legal or equitable
      discharge of a surety or guarantor.

(Emphasis supplied by PCA). PCA contends section 4 expresses the parties’ intent

that Buchanan’s obligations under the Guarantee remain in existence, even in the
                                        14
face of PCA’s foreclosure, until the entire $12.8 million of Deferred Equity is paid

in full. The parties may well have intended this. But Buchanan’s proposed

interpretation, which the trial court adopted, does not suggest that Buchanan’s

obligations are discharged or terminated; rather, as applied to these

circumstances—where PCA has foreclosed and will make no further Disbursement

Requests to Cypress Creek—it means that Cypress Creek will not fail to pay such

Requests, and Buchanan’s obligation under the Guaranty will never arise.4

      We hold that the Guaranty does not unambiguously obligate Buchanan to

pay the unfunded Deferred Equity. The Guaranty defines the Buchanan Funding

Obligation in terms of—and presupposes—Cypress Creek’s failure to timely fund

its 25% share of Deferred Equity after receiving a Disbursement Request for which

PCA funded its 75% share.       Section 1(a) of the Guaranty, which sets forth

Buchanan’s obligation as guarantor, is conditional—it arises only “If . . . [Cypress

Creek] fails to timely fund the Deferred Equity when and as required pursuant to

the Loan Agreement.” The Loan Agreement nowhere requires Cypress Creek to

4
      The other provisions PCA contends are rendered meaningless by PCA’s
      interpretation, like section 4, describe ways in which Buchanan could obtain a
      release or discharge of its obligations under the Guaranty. Section 18, for
      example, gives Buchanan the option to obtain a release of the Guaranty by
      depositing with PCA with then-remaining Buchanan Funding Obligation. Like
      section 4 and the other provisions PCA points to, section 18 is not rendered
      meaningless by Buchanan’s interpretation. The fact that the Guaranty provides
      Buchanan a means to obtain an early release in no way suggests that it would
      obligate Buchanan to pay the Deferred Equity in the absence of Cypress Creek’s
      failure to timely fund Disbursement Requests.
                                        15
pay Deferred Equity without meeting section 4.7’s requirements that it present a

Disbursement Request to fund project costs. In particular, the Loan Agreement

does not obligate Cypress Creek to fund any remaining Deferred Equity upon any

defined Event of Default. Thus, the Guaranty reasonably may be interpreted as

reflecting the parties’ intent that Buchanan’s obligation under the Guaranty arise

only if Cypress Creek failed to timely fund the Deferred Equity in response to a

Disbursement Request. And this interpretation does not render meaningless the

provisions identified by PCA. Because PCA concedes that Cypress Creek funded

its 25% share of any Disbursement Request, Buchanan’s obligation under the

Guaranty was never triggered and, accordingly, never breached. We hold that the

trial court did not err by (1) rejecting PCA’s claim that the Guaranty

unambiguously required Buchanan to pay the unpaid Deferred Equity or

(2) concluding that PCA failed to prove that Buchanan breached the Guaranty.

      We overrule PCA’s first, second and third issues.

E.    Findings of Fact

      In its fourth issue, PCA challenges the trial court’s findings of fact as

(1) irrelevant in light of the trial court’s alleged error in failing to adopt PCA’s

interpretation of the Guaranty and (2) lacking evidentiary support.

                                         16
      PCA’s first complaint is premised on our finding error in the trial court’s

failure to adopt PCA’s interpretation of the Guaranty, which we declined to do for

the reasons discussed above. Accordingly, we need not address it here.

      We likewise conclude that we need not address the sufficiency of the

evidence to support the trial court’s findings of fact. Ordinarily, if a contract is

ambiguous, then the parties’ intent is a question for the finder of fact. Coker, 650
S.W.2d at 394; Tyco Valves & Controls, L.P., 365 S.W.3d at 766–67; see Lenape

Res. Corp., 925 S.W.2d at 574). A guaranty, however, is subject to the rule of

construction that, in the event of an ambiguity, the reviewing court will apply the

construction “most favorable to the guarantor.” Coker, 650 S.W.2d at 394 n.1; 84

Lumber Co., L.P., 2012 WL 243524, at *7 n.2; see also JMW Partners, L.P. v.

Northstar Bank of Tex., No. 2-09-167-CV, 2010 WL 2331399, at *4 (Fort Worth

June 10, 2010, no pet.); Pham, 58 S.W.3d at 288; Cox v. Lerman, 949 S.W.2d 527,

530 (Tex. App.—Houston [14th Dist.] 1997, no writ); Clark v. Walker-Kurth

Lumber Co., 689 S.W.2d 275, 278 (Tex. App.—Houston [1st Dist.] 1985, writ

ref’d n.r.e.) (citing Coker, 165 S.W.2d at 394 n.1).

      Buchanan does not urge us to construe the Guaranty unambiguously in its

favor. Rather, its position is that the meaning of the Guaranty is uncertain and the

Guaranty, being susceptible of two reasonable interpretations, is ambiguous. We

agree that Buchanan’s interpretation of the Guaranty is a reasonable one. But,

                                         17
because we are construing a guaranty, the proper interpretation is not a question of

fact. Rather, we must apply the construction of the Guaranty “most favorable to

the guarantor,” Buchanan. See Coker, 650 S.W.2d at 394 (in construing guaranty,

“any uncertainty must be resolved in favor of [the] guarantor” (emphasis added)).

Accordingly, we need not address the sufficiency of the evidence supporting the

trial court’s findings of fact. See TEX. R. APP. 47.1; SAVA gumarska in kemijska

industria d.d. v. Advanced Polymer Scis., Inc., 128 S.W.3d 304, 315–16 (Tex.

App.—Dallas 2004, no pet.) (citing Rule 47.1 and declining to address sufficiency

of evidence supporting findings of fact because findings rendered immaterial once

conclusions of law determined to be correct on alternate basis).

      We overrule PCA’s fourth issue.

                                    Conclusion

      We affirm the trial court’s take-nothing judgment in favor of Buchanan.

                                              Rebeca Huddle
                                              Justice

Panel consists of Chief Justice Radack and Justices Bland and Huddle.

                                         18