Court Opinion

ID: 3127076
Source: CourtListenerOpinion
Date Created: 2015-10-16 15:31:46.771159+00
Date Added: 2024-06-11T12:47:07.973593
License: Public Domain

COURT OF APPEALS
                         SECOND DISTRICT OF TEXAS
                              FORT WORTH

                               NO. 2-09-400-CV

KEVIN CLARK                                                        APPELLANT

                                       V.

COTTEN SCHMIDT, L.L.P. F/K/A                                         APPELLEE
KIRKLEY SCHMIDT & COTTEN, L.L.P.

                                   ------------

         FROM THE 48TH DISTRICT COURT OF TARRANT COUNTY

                                   ------------

                                  OPINION
                                   ------------

      In two issues, appellant Kevin Clark appeals the trial court‘s decision to

deny his motion for summary judgment and grant the motion for summary

judgment of appellee Cotten Schmidt, L.L.P. f/k/a Kirkley Schmidt & Cotten,

L.L.P. (Cotten Schmidt). We affirm in part and reverse and remand in part.

                              Background Facts

      This appeal concerns the amount of money that Clark was entitled to

receive as a repayment of his capital investment under Cotten Schmidt‘s
partnership agreement upon his leaving the law firm. Clark joined the firm in the

fall of 2001 as a non-equity partner. In 2003, Clark became an equity partner,

and he contributed $25,000 to the firm as capital.

      The partnership agreement contains the following relevant provisions:

            1.04. Classes of Partners. There shall be four (4) classes of
      partners.

                   a.    ―Equity Partners‖ are those partners who
            (i) have contributed to the capital of the partnership,
            (ii) own an interest in the capital and in the profits and
            losses of the partnership, (iii) have a vote in partnership
            matters, and (iv) participate in the distribution of
            partnership profits as defined in Article VIII.

            ....

            3.02. Assets. The assets of the partnership are:

                  a.     Cash balances in partnership accounts
            other than any trust accounts maintained by the
            partnership;

                   b.     The physical assets and personal property
            as reflected on the partnership‘s books, records, and
            financial statements;

                  c.     The notes and accounts receivable of the
            partnership; and

                   d.    Work    in   process    and   contingent-fee
            interests.

            ....

            5.01. Books. The partnership shall maintain books and
      records to reflect all business and financial transactions using the
      cash basis of accounting unless otherwise agreed.

            ....

                                        2
      6.01. Equity Partners. All Equity Partners . . . shall have an
equal ownership interest in the assets of the partnership . . . .

      ....

      6.04. Capital Contributions By New Equity Partners. All
Equity Partners to be admitted to the partnership shall be required to
make a capital contribution to the partnership as determined by the
partnership. The amount of capital contribution credited to the
capital account of the new Equity Partner shall be designated by the
partnership with the prior concurrence of the new Equity Partner.

      ....

      6.07. Capital Accounts on Termination. . . . [A]n Equity
Partner‘s interest in the partnership on termination of the partnership
shall not be determined by his or her capital account. All Equity
Partners shall have an equal interest in the value of partnership
assets . . . .

      ....

       12.03. Withdrawal of Equity (including Senior) Partner.
An Equity Partner who withdraws from the partnership, and who is
not then in substantial breach of his or her duties to the partnership,
shall be entitled to the following:

             a.    To payment . . . of his or her percentage of
      fees collected for noncontingent work performed by the
      partnership prior to the effective date of withdrawal and
      collected by the partnership within twenty-four (24)
      months after the effective date of withdrawal;

             b.    To payment . . . of his or her percentage of
      fees collected for work performed by the partnership
      prior to the effective date of withdrawal on contingent-
      fee or bonus-fee cases, regardless of how long after the

                                  3
             date of withdrawal those fees are collected by the
             partnership. . . .;[1] and

                    c.     To repayment of his or her capital
             investment in the partnership calculated as an equal
             interest in the depreciated book value of all partnership
             assets less an equal proportion of the partnership long
             term and capital debt. If negative, this liability will offset
             amounts under subsections (a) or (b).[2] [Emphasis
             added.]

      Clark voluntarily left the firm in May 2005, at which time it had eleven

equity partners. After consulting with accountants, the firm paid $4,640.36 to

Clark as his capital investment repayment under section 12.03(c) of the

partnership agreement; the firm said that this amount reflected ―one-eleventh of

the Total Partners‘ Equity reflected on the May 31, 2005 balance sheet.‖

Clark contended that the firm incorrectly valued his capital investment

repayment.    He relied on an opinion from an accountant who reviewed the

partnership agreement and concluded that the firm wrongly excluded the

      1
       Clark does not claim that he has not received proper payments under
sections 12.03(a) and (b) of the agreement. Randall Schmidt, a partner at Cotten
Schmidt, stated in an affidavit,

      As the firm collected fees after the date of Mr. Clark‘s withdrawal on
      accounts receivable and work-in-process for work performed by the
      firm before the date of his withdrawal, the firm‘s administrator
      applied the applicable compensation formula to those fee collections
      . . . and issued checks to Mr. Clark . . . .
      2
        The partnership agreement also references a Partner Compensation
Addendum. The addendum specifies how hourly, contingent, and bonus fees are
distributed to individuals within the firm; it states, among other provisions, that ―a
portion of all fees earned be shared among the partners in recognition of the
partnership effort required to maintain the firm.‖

                                           4
following items from the definition of ―partnership assets‖ under section 12.03(c):

notes, accounts receivable, work in process, and contingent fee interests.

      Clark filed a lawsuit against Cotten Schmidt, asserting that it breached

section 12.03(c) of the partnership agreement by incorrectly calculating and

paying him the $4,640.36 and also breached a fiduciary duty to him. Cotten

Schmidt answered Clark‘s allegations and filed a motion for summary judgment

in which it argued that quasi-estoppel precludes Clark‘s breach of contract claim

and that, as a matter of law, the firm did not owe a fiduciary duty to him.3

      Clark filed a motion for summary judgment on his breach of contract claim;

he asserted that notes, accounts receivable, work in process, and contingent fee

interests   are unambiguously included under           section   12.03(c)‘s    capital-

investment-repayment calculation, which uses the phrase ―all partnership

assets,‖ because those items are included in section 3.02‘s definition of ―assets.‖

Cotten Schmidt contended, ―When the language of section 12.03(c), and Mr.

Clark‘s current interpretation, are considered in context . . ., it becomes apparent

that the firm‘s interpretation . . . is correct, and that Mr. Clark‘s current

interpretation is wrong.‖

      3
        Clark described his contractual claims in his petition as ―Breach of
Contract,‖ ―Neglecting to perform contractual duty,‖ and ―Refusing to perform
contractual obligations.‖ Our reference to Clark‘s breach of contract cause of
action includes each of these claims. We will detail the facts relevant to Cotten
Schmidt‘s quasi-estoppel defense in our discussion of Clark‘s second issue.

                                          5
      The trial court denied Clark‘s summary judgment motion and granted

Cotten Schmidt‘s motion against Clark‘s contractual claim based on its quasi-

estoppel defense, concluding that Cotten Schmidt established all elements of the

defense as a matter of law.4 Clark filed notice of this appeal.

                        Summary Judgment Standards

      In a summary judgment case, the issue on appeal is whether the movant

met the summary judgment burden by establishing that no genuine issue of

material fact exists and that the movant is entitled to judgment as a matter of law.

Tex. R. Civ. P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,

289 S.W.3d 844, 848 (Tex. 2009). We review a summary judgment de novo.

Mann Frankfort, 289 S.W.3d at 848. We consider the evidence presented in the

light most favorable to the nonmovant, crediting evidence favorable to the

nonmovant if reasonable jurors could and disregarding evidence contrary to the

nonmovant unless reasonable jurors could not. Id. We indulge every reasonable

inference and resolve any doubts in the nonmovant‘s favor.          20801, Inc. v.

Parker, 249 S.W.3d 392, 399 (Tex. 2008).

      A plaintiff is entitled to summary judgment on a cause of action if it

conclusively proves all essential elements of the claim.      See Tex. R. Civ. P.

      4
       The court also concluded that the firm did not have a fiduciary duty to
Clark. Clark does not challenge the trial court‘s decision to grant summary
judgment against his breach of fiduciary duty claim; therefore, we affirm the trial
court‘s judgment to the extent that it resolves that claim against Clark.
See Jacobs v. Satterwhite, 65 S.W.3d 653, 655–56 (Tex. 2001); Smith v. Tilton,
3 S.W.3d 77, 84 (Tex. App.—Dallas 1999, no pet.).

                                         6
166a(a), (c); MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986). A defendant is

entitled to summary judgment on an affirmative defense if the defendant

conclusively proves all the elements of the affirmative defense. Chau v. Riddle,

254 S.W.3d 453, 455 (Tex. 2008); see Tex. R. Civ. P. 166a(b), (c).   When both

parties move for summary judgment and the trial court grants one motion and

denies the other, the reviewing court should review both parties‘ summary

judgment evidence and determine all questions presented. Mann Frankfort, 289
S.W.3d at 848.

                                 Quasi-Estoppel

      In his second issue, Clark argues that the trial court erred by granting

Cotten Schmidt‘s motion for summary judgment.              Cotten Schmidt‘s sole

argument in its motion was that Clark‘s breach of contract claim is barred by

quasi-estoppel; Cotten Schmidt did not seek summary judgment on the

correctness of its interpretation of the partnership agreement.

The law on quasi-estoppel

      Quasi-estoppel is an affirmative defense that ―precludes a party from

asserting, to another‘s disadvantage, a right inconsistent with a position

previously taken. The doctrine applies when it would be unconscionable to allow

a person to maintain a position inconsistent with one to which he acquiesced, or

from which he accepted a benefit.‖ Lopez v. Munoz, Hockema & Reed, L.L.P.,

22 S.W.3d 857, 864 (Tex. 2000) (citation omitted); see Brooks v. Brooks, 257
S.W.3d 418, 423 (Tex. App.—Fort Worth 2008, pet. denied) (explaining that

                                         7
―unlike    equitable   estoppel,   quasi-estoppel    requires    no    showing     of

misrepresentation or detrimental reliance‖). ―Thus, quasi estoppel forbids a party

from accepting the benefits of a transaction . . . and then subsequently taking an

inconsistent position to avoid corresponding obligations or effects.‖ Atkinson Gas

Co. v. Albrecht, 878 S.W.2d 236, 240 (Tex. App.—Corpus Christi 1994, writ

denied).

      For example, in Cimarron County Property Owners Association v. Keen,

the Beaumont Court of Appeals held that quasi-estoppel precluded the owners

association from contending in a lawsuit that a deed restriction prohibited a

daycare when the association previously opined that the daycare could operate.

117 S.W.3d 509, 512–14 (Tex. App.—Beaumont 2003, no pet.). Similarly, in

Eckland Consultants, Inc. v. Ryder, Stilwell Inc., the Houston (First District) Court

of Appeals held that quasi-estoppel prevented a property inspection company

from claiming that a plaintiff did not have standing to sue for a breach of the

inspection contract when the inspection company accepted the benefits of the

contract and stated in a report that noncontracting entities could rely on the

report. 176 S.W.3d 80, 81–83, 87–88 (Tex. App.—Houston [1st Dist.] 2004, no

pet.). However, there ―can be no ratification or estoppel from acceptance of the

benefits by a person who did not have knowledge of all material facts.‖ Frazier v.

Wynn, 472 S.W.2d 750, 753 (Tex. 1971); Sun Operating Ltd. P’ship v. Holt, 984
S.W.2d 277, 292 (Tex. App.—Amarillo 1998, pet. denied) (op. on reh‘g).

                                         8
Analysis

      In 2003, when Clark was an equity partner with Cotten Schmidt, J. Lyndell

Kirkley left the firm. Like Clark‘s later dispute, Kirkley contested the amount of

his capital investment repayment under section 12.03(c) of the partnership

agreement, claiming that work in process, accounts receivable, and contingent

fee interests were payable assets of the partnership under that section.5

According to Cotten Schmidt, Clark and Dennis M. Conrad served on a

committee formed to communicate with Kirkley about his claim. Conrad stated in

an affidavit, ―Mr. Clark agreed with the firm‘s position that the method of

calculation of Mr. Kirkley‘s payment was correct under the firm‘s partnership

agreement, and Mr. Clark signed letters on behalf of the firm to Mr. Kirkley

communicating the firm‘s position.‖

      Specifically, on September 19, 2003, Clark signed a letter to Kirkley

stating, ―We believe that the . . . check tendered to you is the correct amount

owed to you under the . . . partnership agreement.‖ On November 4, 2003, Clark

signed another letter to Kirkley that detailed the firm‘s reasons that it disagreed

with Kirkley‘s position. The November 4, 2003 letter described Kirkley‘s claim as

―simply wrong.‖ In its last paragraph, the letter stated,

      5
        In a letter that Kirkley wrote to Randall Schmidt in September 2003,
Kirkley said, ―I am amazed that your attempted repayment to me under
paragraph 12.03(c) disregards the plain language of the Agreement adopted by
all partners.‖

                                          9
      We have differing views of what the Partnership Agreement provides
      a withdrawing partner is entitled to . . . . In any event, we are willing
      to sit down with you in a spirit of compromise and engage in a
      professional discussion of the outstanding differences between us in
      an attempt to resolve them amicably. . . . Please call me if you are
      interested in having such a discussion.

      Days later, Clark signed another letter that was addressed to Kirkley and

that expressed disagreement with Kirkley‘s position.6 After the firm sent Clark‘s

last letter to Kirkley, Kirkley did not pursue any claim against the firm related to

the repayment of his capital investment.

      In his response to Cotten Schmidt‘s summary judgment motion, Clark said

that during the Kirkley dispute, he was ―simply acting as a point person‖ and was

not a real participant. His affidavit contained the following facts supporting that

position:

      three other attorneys in the firm ―took the lead in attempting to resolve the
      dispute‖ with Kirkley, but those attorneys eventually stopped
      communicating with Kirkley, and Clark agreed to relay Cotten Schmidt‘s
      position to him;

      the letters that Clark signed were prepared by other partners in the firm;7

      Clark ―did not participate in formulating Cotten Schmidt‘s position against
      Mr. Kirkley,‖ nor did he ―conduct any inquiry as to whether the position was
      correct‖ or even ―provide any input as to Cotten Schmidt‘s position or the
      correctness thereof‖; instead, his role ―was simply to communicate Cotten
      Schmidt‘s position to Mr. Kirkley and receive his responses‖; and

      6
        In its motion for summary judgment, Cotten Schmidt said that appellant‘s
letters to Kirkley were sent ―on behalf of the firm.‖
      7
       Cotten Schmidt does not dispute that a committee drafted the letters and
that Clark signed them.

                                         10
      in his communication with Kirkley, Clark was not ―representing [his] own
      interest[,] and [he] took no position as to [his] view individually as to the
      interpretation of the Partnership Agreement.‖

      Clark contends that his affidavit creates fact issues that preclude summary

judgment for Cotten Schmidt.       We agree.     While Cotten Schmidt provided

evidence (through Conrad‘s affidavit) that Clark served on a committee during

the Kirkley dispute and ―agreed with the firm‘s position that the method of

calculation of Mr. Kirkley‘s payment was correct,‖ Clark countered that evidence

by averring that he did not participate in forming the firm‘s position and took no

position as to the interpretation of the agreement. Clark‘s affidavit, viewed in the

light most favorable to him (as the nonmovant), indicates that he served as a

conduit of Cotten Schmidt‘s position to Kirkley rather than as a creator or

endorser of that position and that he therefore did not have knowledge of all

material facts about the position. See Frazier, 472 S.W.2d at 753.

      Cotten Schmidt alleges that Clark‘s assertion that he acted as a conduit for

the other equity partners is false because Clark had the privilege and legal

responsibility to vote on the Kirkley matter.        But the evidence does not

conclusively establish that Clark actually voted on the matter or was asked for his

opinion about it. While Conrad‘s affidavit indicates that the dispute was handled

by a committee with input and approval from ―other‖ (although not explicitly ―all‖)

partners, Clark‘s affidavit states only that three partners ―took the lead‖ in

attempting to resolve the dispute with Kirkley and explains that he was never

―asked to provide input‖ on the matter.

                                          11
      For these reasons, resolving all doubts in Clark‘s favor on the quasi-

estoppel issue, we hold that Cotten Schmidt did not conclusively establish that it

is unconscionable to allow him to maintain a position inconsistent with one to

which he previously acquiesced on behalf of Cotten Schmidt even if Clark, as an

equity partner, received a benefit in 2003 by Cotten Schmidt‘s retaining money

that it might have otherwise paid to Kirkley. See Lopez, 22 S.W.3d at 864.

Therefore, we sustain Clark‘s second issue, and we reverse the portion of the

trial court‘s order that grants summary judgment for Cotten Schmidt against

Clark‘s breach of contract claim based on Cotten Schmidt‘s quasi-estoppel

defense. See Haire v. Nathan Watson Co., 221 S.W.3d 293, 301 (Tex. App.—

Fort Worth 2007, no pet.) (explaining that when ―reviewing a summary judgment

granted on specific grounds, the summary judgment can only be affirmed if the

ground on which the trial court granted relief is meritorious); GuideOne Ins. Co. v.

Cupps, 207 S.W.3d 900, 903 (Tex. App.—Fort Worth 2006, pet. denied) (same).

                 Interpretation of the Partnership Agreement

      In his first issue, Clark contends that the trial court erred by denying his

motion for summary judgment on his breach of contract claim because, as a

matter of law, Cotten Schmidt misinterpreted section 12.03(c) of the partnership

agreement and therefore undervalued his capital investment repayment.

Cotten Schmidt asserts that its interpretation of section 12.03(c) is correct ―when

all of the words . . . are properly construed in conjunction with the remainder of

. . . the Partnership Agreement.‖

                                        12
The principles of interpreting contracts

      ―The law applicable to construction of contracts has been applied to

partnership agreements.‖ In re Waggoner Estate, 163 S.W.3d 161, 165 (Tex.

App.—Amarillo 2005, no pet.).       ―We construe contracts ‗from a utilitarian

standpoint bearing in mind the particular business activity sought to be served‘

and ‗will avoid when possible and proper a construction which is unreasonable,

inequitable, and oppressive.‘‖ Frost Nat’l Bank v. L & F Dist., Ltd., 165 S.W.3d
310, 312 (Tex. 2005) (quoting Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527,

530 (Tex. 1987)).

      When construing contracts, our primary concern is to ascertain the true

intent of the parties as expressed in the contract. NP Anderson Cotton Exch.,

L.P. v. Potter, 230 S.W.3d 457, 463 (Tex. App.—Fort Worth 2007, no pet.).

We must examine and consider the entire contract in an effort to harmonize and

give effect to all provisions so that none are rendered meaningless. Id.; see J.M.

Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). ―We presume that

the parties to the contract intend every clause to have some effect. We give

terms their plain, ordinary, and generally accepted meaning unless the contract

shows that the parties used them in a technical or different sense.‖ FWT, Inc. v.

Haskin Wallace Mason Prop. Mgmt., L.L.P., 301 S.W.3d 787, 794 (Tex. App.—

Fort Worth 2009, pet. denied) (op. on reh‘g) (citations omitted).      A specific

contractual provision controls over a general provision. City of The Colony v. N.

                                       13
Tex. Mun. Water Dist., 272 S.W.3d 699, 722 (Tex. App.—Fort Worth 2008, pet.

dism‘d).

      Lack of clarity or a disagreement among the parties does not necessarily

create an ambiguity.    Universal Health Servs., Inc. v. Renaissance Women’s

Group, P.A., 121 S.W.3d 742, 746 (Tex. 2003). Rather, whether ―a contract is

ambiguous is a question of law that must be decided by examining the contract

as a whole in light of the circumstances present when the contract was entered.‖

Id. ―If, after the pertinent rules of construction are applied, the contract can be

given a definite or certain legal meaning, it is unambiguous and we construe it as

a matter of law.‖ Frost Nat’l Bank, 165 S.W.3d at 312. But if a contract is

ambiguous, then interpretation of the contract presents a fact issue for the jury.

Transcon. Gas Pipeline Corp. v. Texaco, Inc., 35 S.W.3d 658, 665 (Tex. App.—

Houston [1st Dist.] 2000, pet. denied). ―When the [contract] is not ambiguous on

its face, extrinsic evidence may not be used to create an ambiguity.‖ Balandran

v. Safeco Ins. Co. of Am., 972 S.W.2d 738, 745 (Tex. 1998); see CenterPoint

Energy Houston Elec., L.L.P. v. Old TJC Co., 177 S.W.3d 425, 431 (Tex. App.—

Houston [1st Dist.] 2005, pet. denied).

Analysis

      The parties dispute the meaning of section 12.03(c) of the partnership

agreement, which states that a withdrawing equity partner is entitled to

―repayment of his or her capital investment in the partnership calculated as an

equal interest in the depreciated book value of all partnership assets less an

                                          14
equal proportion of the partnership long term and capital debt.‖       Specifically,

Clark contends that ―all partnership assets‖ in section 12.03(c) unambiguously

includes notes, accounts receivable, work in process, and contingent fee

interests because those items are included in section 3.02‘s definition of assets.

Cotten Schmidt argues that section 12.03(c)‘s ―all partnership assets‖ phrase

does not include those items for the following reasons:

      section 12.03(c) should not be interpreted to allow a withdrawing partner to
      obtain a share of accounts receivable and work in process for work
      performed by the partnership because sections 12.03(a) and (b) already
      give the partner a percentage of those items that are collected after the
      partner leaves (thus, 12.03(c), if interpreted in the way that Clark asserts,
      would allow for double recovery);

      section 5.01 of the partnership agreement says that the partnership uses
      the cash basis of accounting, which does not recognize accounts
      receivable, work in process, and contingent fee interests;8

      because section 12.03(c) uses the words ―capital‖ and ―depreciated book
      value‖, it refers only to capital assets that are ―funded with capital
      investment or long term/capitalized debt‖; it does not therefore refer to
      accounts receivable, work in process, and contingent fee interests, and the
      specific limiting language in section 12.03(c) controls over the general
      language in section 3.02;

      if ―the capital investment repayment calculation were to include accounts
      receivable, but Cotten Schmidt never collected certain accounts, then the
      interest of the withdrawn Equity Partner would be elevated over the

      8
        Cotten Schmidt submitted the affidavit of David J. Quick, a certified public
accountant, which affirmed that the cash basis of accounting ―does not recognize
accounts receivable, work-in-process, and contingent fee interests‖ and opined
that the cash basis of accounting is a ―foundational reference point that should be
used for all other . . . terms in the partnership agreement.‖ Clark‘s accountant
believed that the ―cash basis of accounting has nothing to do with valuing a
partnership interest‖ because the ―valuation method [was] described in the
partnership agreement.‖

                                        15
      interests of the firm and the remaining Equity Partners, in violation of the
      . . . principles underlying the Partnership Agreement‖; and

      under Clark‘s argument, shortly after making his $25,000 capital
      contribution in 2003, he would have been able to resign and be paid a
      substantially greater sum; thus, Clark‘s construction of the agreement
      creates an incentive for equity partners to leave the firm.

      For the following reasons, Cotten Schmidt has shown that section 12.03(c)

could reasonably be interpreted to exclude notes, accounts receivable, work in

process, and contingent fee interests; thus, Clark‘s interpretation of the

agreement is not conclusively correct. First, the phrase ―depreciated book value‖

precedes ―all partnership assets‖ in section 12.03(c), and the items described in

section 3.02(c) and (d) of the agreement are not depreciable.9       Second, the

phrase ―equal interest in the depreciated book value of all partnership assets‖ in

section 12.03(c) is followed by ―less an equal proportion of the partnership long

term and capital debt,‖ which may indicate that all of section 12.03(c) refers to

capital assets and excludes noncapital assets.10 Third, sections 12.03(a) and (b)

limit a withdrawing equity partner to receiving a portion of noncontingent and

contingent fees when the firm actually collects those fees after the partner

withdraws, while Clark‘s interpretation of section 12.03(c) may entitle him to a

portion of those fees regardless of whether they are ever collected or earned and

      9
       Clark has not disputed Cotten Schmidt‘s claim that notes, contingent fee
interests, accounts receivable, and work in process are not depreciable.
      10
       Words in a contract may ―not be plucked from their context and then
construed.‖ King’s Court Racquetball v. Dawkins, 62 S.W.3d 229, 233 (Tex.
App.—Amarillo 2001, no pet.).

                                       16
may therefore render meaningless the limitations of sections 12.03(a) and (b).

See Potter, 230 S.W.3d at 463. Finally, Clark‘s interpretation of section 12.03(c)

might allow him to be paid for his share of an account receivable upon withdrawal

under section 12.03(c) and then be paid again when a fee from the account is

collected under sections 12.03(a) or (b); this double recovery could be

considered unreasonable or inequitable. See Frost Nat’l Bank, 165 S.W.3d at

312.

       Therefore, resolving all doubts in Cotten Schmidt‘s (the nonmovant‘s)

favor, we hold that Clark‘s interpretation of section 12.03(c) is not conclusively

correct and that the trial court did not err by denying his motion for summary

judgment.    See Parker, 249 S.W.3d at 399; MMP, Ltd., 710 S.W.2d at 60.

We overrule Clark‘s first issue.11

       11
        Because we hold that Cotten Schmidt‘s interpretation of the agreement is
reasonable, which precludes summary judgment in Clark‘s favor, causes us to
overrule his first issue, and requires us to remand this case to the trial court, we
will not address whether Clark‘s interpretation of the agreement is also
reasonable. In other words, we will not address whether Cotten Schmidt‘s
interpretation of the agreement is conclusively correct, or alternatively, whether
the agreement is ambiguous, because Cotten Schmidt did not move for summary
judgment based on its interpretation. See Gibson v. Park Cities Ford, Ltd., 174
S.W.3d 930, 931 (Tex. App.—Dallas 2005, no pet.) (―Because we conclude Park
Cities Ford did not conclusively establish its entitlement to summary judgment,
we reverse the trial court‘s judgment and remand this case to the trial court for
further proceedings.‖); see also S. Austin Mkt. Place, Inc. v. James F. Parker
Interests, Inc., No. 03-99-00144-CV, 2000 WL 374064, at *4 (Tex. App.—Austin
Apr. 13, 2000, no pet.) (not designated for publication) (―Without deciding
whether an ambiguity exists in the contract, we hold that South Austin has not
conclusively proven that its interpretation of the agreement is the only reasonable
interpretation‖).

                                        17
                                   Conclusion

      Having overruled Clark‘s first issue and having sustained his second issue,

we affirm the trial court‘s judgment to the extent that it (1) grants Cotten

Schmidt‘s motion for summary judgment on Clark‘s breach of fiduciary duty claim

(because he did not make a challenge regarding that claim in this court) and

(2) denies Clark‘s motion for summary judgment. But we reverse the judgment to

the extent that it renders a take nothing judgment on Clark‘s breach of contract

claim, and we remand this case to the trial court for further proceedings related to

that claim.

                                                   TERRIE LIVINGSTON
                                                   CHIEF JUSTICE

PANEL: LIVINGSTON, C.J.; MCCOY, J.; and DIXON W. HOLMAN (Senior
Justice, Retired, Sitting by Assignment).

DELIVERED: October 7, 2010

                                        18