Court Opinion

ID: 4256135
Source: CourtListenerOpinion
Date Created: 2018-03-20 11:25:41.976485+00
Date Added: 2024-06-11T14:45:10.006821
License: Public Domain

Opinion issued March 15, 2018

                                     In The

                             C ourt of Appeals
                                     For The

                         First District of Texas
                            ————————————
                              NO. 01-17-00543-CV
                            ———————————
                 GINGER B. STAGG, D.D.S., P.A., Appellant
                                        V.
                 LISA RICHARDSON, D.D.S., P.A., Appellee

                   On Appeal from the 149th District Court
                           Brazoria County, Texas
                       Trial Court Case No. 83644-CV

                         MEMORANDUM OPINION

      This suit arises out of a dispute between two partners over the terms of an

agreement dissolving their former dental practice. The trial court granted summary

judgment, determining that one partner properly retained $25,000 in operating

capital upon dissolution of the partnership. Because we conclude that the agreement
required the partner to pay that capital to the outgoing partner, we reverse the trial

court’s judgment, render judgment that Ginger Stagg, D.D.S., P.A. recover $25,000

from Lisa Richardson, D.D.S., P.A., and remand this cause to the trial court for the

award of fees, costs, interest, and the entry of a final judgment consistent with this

opinion.

                                 BACKGROUND

        Lisa Richardson and Ginger Stagg are dentists who individually formed

professional associations, which in turn formed a pediatric dental partnership in July

2009.    At that time, Stagg purchased a 50% interest in the partnership from

Richardson for $735,000. By February 2016, the partnership was no longer

harmonious and litigation ensued. Richardson and Stagg entered into a mediated

settlement agreement providing for the dissolution of their dental practice. Under

its terms, Richardson agreed to buy Stagg’s interest in the practice for $1,000,000.

Once this sum was paid, Stagg was required to leave the practice within 10 days.

Stagg also was to receive “an additional amount for any production outstanding at

the time she leaves, which shall be computed based on the normal percentage for

any amounts collected on the outstanding production.”

        Richardson and Stagg subsequently learned, however, that their practice did

not maintain the records needed to calculate the outstanding amount due to Stagg

under the agreement. So they executed an addendum specifying a new method of

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computation. The addendum provided that the partnership’s accountant would

“perform the customary partner-splits analysis that incorporates Stagg’s production”

and that Richardson would “pay Stagg the ‘Net Amount Due to [Stagg].’”

      The partnership’s accountant made the required partner-splits analysis. In

relevant part, the accountant calculated as follows:

                                        Total      Dr. Richardson     Dr. Stagg

        Net Amount Due to Each
                                      64,043.64        29,270.00      34,773.64
        Doctor

        Operating capital to be
                                     (50,000.00)       (25,000.00)   (25,000.00)
        retained in partnership

        Available Cash to Each
                                      14,043.64         4,270.00       9,773.64
        Doctor

      Richardson contended that she owed Stagg only the “available cash” amount,

or $9,773.64, which she paid. Stagg contended that she was entitled to the “Net

Amount Due,” or $34,773.64, under the partner-splits analysis. Both sides moved

for summary judgment.       The trial court denied Stagg’s motion and granted

Richardson’s.

                                   DISCUSSION

      Both sides agree that the terms of the addendum are unambiguous. Stagg

contends that the addendum’s phrase “Net Amount Due to [Stagg]” refers to Stagg’s

portion of the “Net Amount Due to Each Doctor” required by the addendum.

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Richardson responds that her purchase of Stagg’s partnership interest included the

partnership’s operating capital and that she therefore only owes the “Available Cash

Due to [Stagg]” under the addendum.

A.    Standard of review

      We review summary judgments de novo. Travelers Ins. Co. v. Joachim, 315
S.W.3d 860, 862 (Tex. 2010). When the parties file cross-motions for summary

judgment and the material facts are not in dispute, we consider their motions and the

summary-judgment record and render the judgment that the trial court should have

rendered. See Myrad Props. v. LaSalle Bank Nat’l Ass’n, 300 S.W.3d 746, 753 (Tex.

2009); City of Garland v. Dallas Morning News, 22 S.W.3d 351, 356 (Tex. 2000).

      We likewise review unambiguous agreements de novo. Kachina Pipeline Co.

v. Lillis, 471 S.W.3d 445, 449 (Tex. 2015). The parties’ intent, as expressed in the

language of their agreement, is controlling. Plains Expl. & Prod. Co. v. Torch

Energy Advisors Inc., 473 S.W.3d 296, 305 (Tex. 2015).             We consider the

agreement’s language as a whole, attempting to give effect to all of its provisions so

that none are rendered meaningless. See Apache Deepwater v. McDaniel Partners,

485 S.W.3d 900, 906 (Tex. 2016). Thus, we read the agreement’s words and phrases

together and in context, not in isolation from one another. Hysaw v. Dawkins, 483
S.W.3d 1, 13 (Tex. 2016). Unless the agreement shows that the parties used a term

in a technical or different sense, we give its provisions their plain, ordinary, and

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generally accepted meaning. Loya v. Loya, 526 S.W.3d 448, 451 (Tex. 2017). The

parties may not rely on extrinsic evidence to prove some meaning other than what

their agreement states. See First Bank v. Brumitt, 519 S.W.3d 95, 109–10 (Tex.

2017). We may consider the circumstances surrounding the agreement’s formation

in ascertaining the common, ordinary meaning of its unambiguous language but we

cannot look to surrounding circumstances to add to, alter, or contradict the

agreement’s terms. Id. at 110. We must enforce a valid, unambiguous agreement

as the parties wrote it. See El Paso Field Servs. v. MasTec N. Am., 389 S.W.3d 802,

810–11 (Tex. 2012).      We cannot rewrite the parties’ bargain in the guise of

interpreting their agreement. Fischer v. CTMI, L.L.C., 479 S.W.3d 231, 239 (Tex.

2016); Gilbert Tex. Constr. v. Underwriters at Lloyd’s London, 327 S.W.3d 118,

126–27 (Tex. 2010).

B.    Analysis

      The addendum to the settlement agreement required the dissolved

partnership’s accountant to make “the customary partner-splits analysis” and

specified that Richardson would “pay Stagg the ‘Net Amount Due to [Stagg]’”

generated by this partner-splits analysis. The addendum does not define the meaning

of “‘Net Amount Due to [Stagg].’” But the capitalization of the words, the enclosure

of the phrase in quotation marks, and the use of brackets all indicate that the phrase

“‘Net Amount Due to [Stagg]’” is terminology borrowed directly from the partner-

                                          5
splits analysis, which the addendum references as the basis for the calculation of the

additional sum owed to Stagg. The partner-splits analysis, in turn, has a line entitled

“Net Amount Due to Each Doctor” accompanied by a separate entry for Stagg in the

amount of “34,773.64.” The addendum’s phrase “‘Net Amount Due to [Stagg]’”

therefore unambiguously refers to the partner-splits analysis’s amount               of

“34,773.64.” See In re Deepwater Horizon, 470 S.W.3d 452, 460 (Tex. 2015) (when

contract refers to another document, court looks to the incorporated document to

extent necessary to interpret the contract); Ins. Co. of State of Penn. v. Roberts, 506
S.W.3d 498, 504–05 (Tex. App.—Houston [1st Dist.] 2016, pet. denied) (same); cf.

Trico Mar. Servs. v. Stewart & Stevenson Tech. Servs., 73 S.W.3d 545, 548–51 (Tex.

App.—Houston [1st Dist.] 2002, orig. proceeding) (contract did not plainly

reference separate, unsigned paper containing arbitration clause and arbitration

clause therefore was not incorporated by reference into contract).

      Richardson does not dispute that the addendum must be read in conjunction

with the partner-splits analysis.   She contends, however, that the phrase “‘Net

Amount Due to [Stagg]’” unambiguously refers to Stagg’s share of the “Available

Cash to Each Doctor” specified in the partner-splits analysis rather than her share of

the “Net Amount Due to Each Doctor.”             We reject Richardson’s proposed

interpretation because it disregards the addendum’s use of capitalization, quotation

marks, and brackets in the operative phrase and would improperly render these

                                           6
features of the addendum’s identifying language meaningless. Moreover, the phrase

“Available Cash” does not appear in the parties’ addendum.

      Richardson argues that consideration of the settlement agreement and

addendum as a whole demonstrates that the latter’s “‘Net Amount Due to [Stagg]’”

must refer to “Available Cash” because Richardson purchased Stagg’s partnership

interest, which, she contends, encompasses the $25,000 that Richardson withheld

from Stagg. But to adopt this interpretation, we would have to imply additional

contractual terms that contradict the addendum’s express language on this subject

about the division of working capital during the post-termination period. The

addendum does not say that Richardson shall pay Stagg the “‘Net Amount Due to

[Stagg]’” less the operating capital that customarily would have been retained by the

now-dissolved partnership, and we cannot rewrite the addendum to do so. See

Fischer, 479 S.W.3d at 239; Gilbert Tex. Constr., 327 S.W.3d at 126–27; see also

WesternGeco, L.L.C. v. Input/Output, Inc., 246 S.W.3d 776, 783–84 (Tex. App.—

Houston [14th Dist.] 2008, no pet.) (trial court erred in implying term in settlement

agreement that contradicted an express provision).

      We hold that the plain language of the addendum to the parties’ settlement

agreement unambiguously required Richardson to pay Stagg the additional sum of

$34,773.64 rather than the available cash of $9,773.64. Accordingly, the trial court

                                          7
erred in denying Stagg’s motion for summary judgment and granting Richardson’s

motion for summary judgment.

                                   CONCLUSION

      We reverse the judgment of the trial court, render judgment that Stagg recover

$25,000 from Richardson, and remand this cause to the trial court for the award of

fees, costs, interest, and the entry of a final judgment consistent with this opinion.

                                               Jane Bland
                                               Justice

Panel consists of Justices Bland, Lloyd, and Caughey.

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