Court Opinion

ID: 4647014
Source: CourtListenerOpinion
Date Created: 2020-12-28 08:16:13.19218+00
Date Added: 2024-06-11T08:01:02.883455
License: Public Domain

Reversed and Remanded and Memorandum Opinion filed December 22, 2020.

                                     In The

                    Fourteenth Court of Appeals

                             NO. 14-19-00539-CV

         HAND & WRIST CENTER OF HOUSTON, P.A., Appellant

                                       V.
                    LOWERY MASONRY, LLC, Appellee

                   On Appeal from the 189th District Court
                           Harris County, Texas
                     Trial Court Cause No. 2017-13251

                 MEMORANDUM OPINION

      Appellant Hand & Wrist Center of Houston, P.A. (“HWC”) appeals a
summary judgment denying it recovery from Lowery Masonry, LLC on a guaranty
agreement. For the reasons explained below, we conclude that Lowery failed to
establish conclusively its entitlement to summary judgment. We reverse the trial
court’s judgment and remand the cause for further proceedings.
                                    Background

      Sandro Tovar allegedly sustained an injury while in the course and scope of
his employment for Lowery. Tovar sought medical treatment from HWC. Before
HWC provided treatment, Lowery’s president signed a “Letter of Guarantee,”
which provides in pertinent part:

      We believe that our mutual goal should be to provide your employee
      with the best possible care in an expedited fashion. We participate in
      the TDI-DWC program as well as many insurance company’s
      managed care and commercial contracts.                 However, during
      emergency, emergent, or urgent circumstances it can be difficult to
      obtain verification of insurance benefits, current subscriber status,
      and/or employment in a favorable time frame; this delay can translate
      to reduced medical outcomes in many situations. By executing this
      Letter of Guarantee, below, and accepting the financial responsibility
      for your injured worker, you are helping to enable rapid and efficient
      medical care rendered by a team of experienced hand trauma
      specialists, while retaining the flexibility of deciding later whether or
      not to submit an insurance claim.
      Of course, if you utilize a Third Party Administrator (TPA) to
      administer your medical claims, then we will be happy to forward all
      claims to the TPA, after care is rendered, and we will honor any
      contractual discounts we may have agreed to, as stated below. As a
      reminder, a TPA administers claims for medical expenses, which
      naturally occur after care is rendered. Because a TPA is not
      empowered by Texas Law to approve or deny the medical care of an
      injured worker, we cannot accept the signature of a TPA staffer on the
      Letter of Guarantee below. Thank you.
      Lowery Masonry, LLC (hereafter called “the Company”) desires that
      Sandro Tovar (hereafter called “the Patient”) receive medical care for
      injuries sustained on or about 12/17/2015. In that regard, the
      Company hereby agrees to the following. The Company guarantees
      that it will pay Hand & Wrist Center of Houston, P.A., SCA
      Houston Hospital for Specialized Surgery, L.P., and Gulf Anesthesia
      Associates, PA (hereafter called “the medical care providers”) their
      usual and customary fees for medical care rendered to the
      Patient. Payment will be made within 30 days after receiving notice.
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      This Letter of Guarantee may be canceled only with 30 days written
      notice by either party.
      The Medical Providers will not seek additional payment from the
      Company under this Letter of Guarantee if 1) payment is made by
      an insurance carrier in accordance with the relevant state or federal
      worker’s compensation acts statutory fee schedule and time table, or
      2) payment is made under terms of a Certified Health Care Network’s
      contracted fee schedule and time table, 3) payment is made by a Third
      Party Administrator’s Provider Agreement, if any are in effect, or
      (4) the Company has workers’ compensation insurance with
      Texas Mutual Insurance Company.
      Payment will be made even if the injury is determined to have
      occurred while the Patient was not at work, or if the injury is not
      reported to the insurance carrier (if any), or if a claim is not filed with
      the insurance carrier, by the Employer, in a timely fashion. Payment
      will be made even if the patient tests positive for drugs or alcohol at
      the time of the injury.
      . . . Because the Company agrees to pay these fees if and when there is
      no insurance coverage, then lack of insurance is not a defense to
      payment of the fees. . . . This agreement is an enforceable contract.

(Bolding emphases added, underlining and italics emphasis original).

      HWC treated Tovar and sent Lowery a bill for $6,699.86. The record
contains no evidence whether any insurance company or other party paid some or
all of HWC’s fee. After Lowery allegedly did not pay the bill, HWC filed suit,
asserting a single claim for breach of the guaranty.

      Lowery filed a traditional motion for summary judgment, contending that
the guaranty “specifically excludes recovery in the event that [Lowery] has
workers’ compensation insurance with Texas Mutual Insurance Company.”
Lowery attached an affidavit from its president, who averred that the company had
workers’ compensation insurance at all relevant times with Texas Mutual
Insurance Company.

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      The trial court granted the motion for summary judgment and ordered that
HWC take nothing from Lowery. HWC timely appealed.

                   Standard of Review and Burdens of Proof

      We review a grant of summary judgment under a de novo standard of
review. See Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d
844, 848 (Tex. 2009). We take as true all evidence favorable to the nonmovant
and indulge every reasonable inference and resolve any doubts in the nonmovant’s
favor. Dias v. Goodman Mfg. Co., L.P., 214 S.W.3d 672, 675-76 (Tex. App.—
Houston [14th Dist.] 2007, pet. denied).

      If the defendant disproves at least one element of the plaintiff’s claim as a
matter of law, summary judgment is appropriate.        Friendswood Dev. Co. v.
McDade & Co., 926 S.W.2d 280, 282 (Tex. 1996); see also Buck v. Blum, 130
S.W.3d 285, 288 (Tex. App.—Houston [14th Dist.] 2004, no pet.). Here, the
plaintiff’s claim is on a guaranty agreement, which creates a secondary obligation
whereby the guarantor promises to be responsible for the debt of another and may
be called upon to perform if the primary obligor fails to perform. Wasserberg v.
Flooring Servs. of Tex., LLC, 376 S.W.3d 202, 205-06 (Tex. App.—Houston [14th
Dist.] 2012, no pet.). To recover under a guaranty contract, a party must prove:
(1) the existence and ownership of the guaranty contract; (2) the terms of the
underlying contract by the holder; (3) the occurrence of the conditions upon which
liability is based; and (4) the failure or refusal to perform the promise by the
guarantor. Id. In its motion for summary judgment, Lowery challenged the third
element. Lowery argued that the stated condition of liability had not occurred
because Lowery had workers’ compensation insurance with Texas Mutual
Insurance Company.

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      When, as here, a defendant argues that the terms of a contract preclude the
plaintiff from recovering, the defendant must prove that its interpretation of the
contract is the only reasonable one. See, e.g., Clark v. Cotten Schmidt, L.L.P., 327
S.W.3d 765, 774-75 & n.11 (Tex. App.—Fort Worth 2010, no pet.); see also El
Paso Field Servs., L.P. v. MasTec N.A., Inc., 389 S.W.3d 802, 806 (Tex. 2012).
The interpretation of a guaranty agreement, like any contract, is a legal question we
review de novo. Wasserberg, 376 S.W.3d at 206 (citing Gulf Ins. Co. v. Burns
Motors, Inc., 22 S.W.3d 417, 423 (Tex. 2000)). If a traditional summary judgment
movant fails to meet its burden, then reversal is warranted regardless of the non-
movant’s opposing arguments or whether it responded at all. See City of Houston
v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979); Williams Consol. I,
Ltd./BSI Holdings, Inc. v. TIG Ins. Co., 230 S.W.3d 895, 900 (Tex. App.—
Houston [14th Dist.] 2007, no pet.).

                       Contract Interpretation Principles

      In determining whether Lowery conclusively proved that HWC may not
recover, we must interpret the guaranty’s relevant provisions. We construe a
written guaranty as we would any other contract, and our primary concern is to
ascertain and give effect to the written expression of the parties’ intent. Plains
Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296, 305 (Tex.
2015); Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d
323, 333 (Tex. 2011). We afford terms their plain and ordinary meaning unless the
contract indicates that the parties intended a different meaning. Dynegy Midstream
Servs., Ltd. P’ship. v. Apache Corp., 294 S.W.3d 164, 168 (Tex. 2009). We
consider the entire contract, respecting all provisions so that none are rendered
meaningless. Plains Expl. & Prod., 473 S.W.3d at 305. We also bear in mind the
particular business activity to be served, and when possible and proper to do so, we

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avoid a construction that is unreasonable, inequitable, and oppressive. Nat’l City
Bank v. Ortiz, 401 S.W.3d 867, 878 (Tex. App.—Houston [14th Dist.] 2013, pet.
denied) (op. on reh’g) (citing Frost Nat’l Bank v. L&F Distribs., Ltd., 165 S.W.3d
310, 312 (Tex. 2005) (per curiam)). If a contract is unambiguous, we enforce it as
written without considering parol evidence for the purpose of creating an
ambiguity or giving the contract “a meaning different from that which its language
imports.” David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex. 2008) (per
curiam).

                                   Application

      HWC argues that the summary judgment is error because the Letter of
Guarantee imposes a duty on Lowery to pay HWC’s “usual and customary fees”
for the service rendered to Tovar if no one else paid, and that Lowery’s
interpretation of the exception is contrary to the agreement’s language. Lowery
acknowledges the general guaranty obligation but contends the contract establishes
several exceptions, the fourth of which applies and bars recovery.

      We begin by noting the agreement’s stated purpose and the general guaranty
duty. As clarified in the initial two paragraphs of the agreement, Lowery accepted
“financial responsibility” for its injured worker to ensure prompt medical treatment
without the potential delay accompanying verification of insurance benefits. As
stated in the Letter of Guarantee’s third paragraph, Lowery agreed to “pay Hand &
Wrist Center . . . their usual and customary fees for medical care rendered to the
Patient . . . within 30 days after receiving notice.” By promising to pay HWC’s
usual and customary fees, Lowery guaranteed that it would pay the fees HWC
incurred in treating Tovar’s injury, even if Tovar did not pay.       See Material
P’ships, Inc. v. Ventura, 102 S.W.3d 252, 258 (Tex. App.—Houston [14th Dist.]
2003, pet. denied).

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      The above terms are not disputed. The present controversy concerns the
exceptions to liability emphasized in the agreement’s fourth paragraph:

      The Medical Providers will not seek additional payment from the
      Company under this Letter of Guarantee if 1) payment is made by
      an insurance carrier in accordance with the relevant state or federal
      worker’s compensation acts statutory fee schedule and time table, or
      2) payment is made under terms of a Certified Health Care Network’s
      contracted fee schedule and time table, 3) payment is made by a Third
      Party Administrator’s Provider Agreement, if any are in effect, or
      (4) the Company has workers’ compensation insurance with
      Texas Mutual Insurance Company.
      The first sentence states that HWC will not seek “additional payment” from
Lowery if one of four conditions occur. The first three conditions state that they
apply if “payment is made” under the stated circumstances. The fourth condition,
however, does not include the same “payment is made” language. It applies when
Lowery has “workers’ compensation insurance with Texas Mutual Insurance
Company.” Lowery presented summary judgment evidence that it had workers’
compensation insurance with Texas Mutual Insurance Company during all relevant
times. According to Lowery, then, the only reasonable interpretation of the fourth
condition is that HWC may not seek any payment from Lowery even if Texas
Mutual Insurance Company did not pay for the services.

      Lowery is correct that the fourth condition omits any requirement that
payment be received from Texas Mutual Insurance Company before Lowery’s
duty to make an “additional payment” is excepted. However, Lowery’s argument
that HWC will not seek any payment from Lowery so long as it has workers’
compensation insurance with Texas Mutual Insurance Company would render
meaningless the phrase “additional payment” in the first sentence and creates
tension with the agreement’s purpose as set forth in the first paragraph, as well as
with the fifth paragraph. HWC is entitled to be paid for its services, and its
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expectation in that regard is apparent from the agreement as a whole. According to
Merriam-Webster, “additional” means more than is usual or expected.1              The
inclusion of the phrase “additional payment” in the exception paragraph
contemplates that HWC would have received a usual or expected payment from
another identified source. Under Lowery’s argument, that paragraph’s meaning
would be the same with or without the word “additional.” But we cannot construe
the contract to render express terms meaningless surplusage. See J.M. Davidson,
128 S.W.3d at 229; Coker, 650 S.W.2d at 393. Because Lowery’s interpretation of
the exception paragraph would require us to excise express terms, its interpretation
is unreasonable. See Ace Ins. Co. v. Zurich Am. Ins. Co., 59 S.W.3d 424, 428-29
(Tex. App.—Houston [1st Dist.] 2001, pet. denied) (citing Westwind Expl., Inc. v.
Homestate Sav. Ass’n, 696 S.W.2d 378, 382 (Tex. 1985)).

      Lowery invokes the rule of strictissimi juris, which entitles a guarantor to
have his agreement construed strictly and not extended by construction or
implication beyond the precise terms of the contract. Wasserberg, 376 S.W.3d at
206; Material P’ships, Inc., 102 S.W.3d at 258. But this rule applies only after the
terms of the guaranty have been ascertained. See Wasserberg, 376 S.W.3d at 206
(citing McKnight v. Va. Mirror Co., 463 S.W.2d 428, 430 (Tex. 1971)). In a
similar vein, Lowery asks us to resolve any “residual uncertainty” in its favor,
because guarantors are to receive a favorable interpretation when uncertainty exists
as to a guaranty’s meaning. See Coker, 650 S.W.2d at 394 n.1. Lowery does not
benefit from this principle, however, because resolving the conflict in its favor as a
matter of law would require us to eliminate words from the agreement, which is
not reasonable. See Principal Commercial Acceptance, L.L.C. v. Buchanan Fund
V, L.L.C., No. 01-11-00782-CV, 2012 WL 6095236, at *8 (Tex. App.—Houston
      1
           See “Additional,” Merriam-Webster,     available   at   https://www.merriam-
webster.com/dictionary/additional.

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[1st Dist.] Dec. 6, 2012, pet. denied) (mem. op.) (construing guaranty in
guarantor’s favor when its proffered interpretation of contract was reasonable).

      Accordingly, we hold that Lowery did not conclusively establish an
unambiguous certain or definite legal meaning in its favor. See N. Nat. Gas Co. v.
Oneok Bushton Processing, Inc., No. 14-11-00539-CV, 2012 WL 4364652, at *7
(Tex. App.—Houston [14th Dist.] Sept. 25, 2012, no pet.) (mem. op.);
Kaye/Bassman Int’l Corp. v. Help Desk Now, Inc., 321 S.W.3d 806, 813 (Tex.
App.—Dallas 2010, pet. denied).         Therefore, we must reverse the summary
judgment.

                                     Conclusion

      We sustain HWC’s sole issue on appeal, and we reverse and remand the
cause to the trial court for further proceedings.

                                        /s/       Kevin Jewell
                                                  Justice

Panel consists of Justices Christopher, Jewell, and Zimmerer.

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