Court Opinion

ID: 9961964
Source: CourtListenerOpinion
Date Created: 2024-04-22 08:11:00.639161+00
Date Added: 2024-06-11T08:19:30.003512
License: Public Domain

In the
        Court of Appeals
Second Appellate District of Texas
         at Fort Worth
      ___________________________
           No. 02-23-00111-CV
      ___________________________

      PRO HEALTH, LLC, Appellant

                     V.

  ELITE JET SOLUTIONS, LLC, Appellee

    On Appeal from the 48th District Court
           Tarrant County, Texas
       Trial Court No. 048-316499-20

 Before Sudderth, C.J.; Bassel and Womack, JJ.
Memorandum Opinion by Chief Justice Sudderth
                           MEMORANDUM OPINION

      The parties dispute whether their brokerage agreement (Agreement) requires

Appellant Pro Health, LLC to pay a commission to Appellee Elite Jet Solutions, LLC.

Elite claims that it does, so it sued Pro Health for breach of contract, and the parties

filed competing motions for summary judgment that turned on the Agreement’s

interpretation. The trial court concluded that a specific provision of the Agreement—

a provision requiring payment of a commission for sales to certain buyers that occur

within 90 days after the Agreement’s termination—unambiguously requires Pro

Health to pay a commission, and in the court’s letter ruling, it detailed its

interpretation of the 90-day provision.

      Pro Health challenges that interpretation in its sole issue on appeal, highlighting

the ways in which it is inconsistent with the remainder of the Agreement and pointing

out that the trial court’s written explanation conspicuously adds commas that

materially affect the 90-day provision’s meaning.

      The trial court’s addition of dispositive commas was indeed erroneous. The

temptation to commit such an error is understandable, though, given the incoherence

of the 90-day provision. Because the provision lacks a clear and definite meaning, its

ambiguity precluded summary judgment. We will reverse and remand.

                                   I. Background
      The parties’ Agreement gives Elite the exclusive right to sell an aircraft owned

by Pro Health, while Pro Health agrees to pay Elite a specified commission if one of

                                           2
several triggering events occurs. Most of the triggering events are limited to the

duration of the Agreement, with one exception for sales to certain buyers that occur

within 90 days after the Agreement’s termination.

      Specifically, the 90-day provision requires “Owner [to] pay Broker

the . . . commission in the event of . . . any sale of the Aircraft within ninety (90) days

after termination of this Agreement to anyone with whom Broker or his agent or

representative of the undersigned have negotiated with during the period of this

Agreement.” “Owner” is defined as Pro Health and “Broker” as Elite.

      These defined labels are used to reference the parties not only in the 90-day

provision but also throughout the remainder of the Agreement.              Even when a

provision references both entities, the Agreement generally lists them separately by

their defined labels—“Owner and Broker” or “Owner or Broker”—with only a

handful of references to “[e]ither party” or “the parties.” Meanwhile, the term

“undersigned”—though used in the 90-day provision—is not defined or used

anywhere else in the Agreement. Nor does anything else in the Agreement refer to an

“agent” or “representative” of one of the parties.1

      After signing this Agreement, several months passed without a sale, until Pro

Health terminated the Agreement. Then, just days after termination, Pro Health sold

      1
        The only reference to an “agent” is in the Agreement’s statement that Pro
Health is appointing Elite “as its sole agent to sell the aircraft.” Nothing in the
Agreement references Pro Health’s agents or representatives acting on its behalf or
Elite’s agents or representatives acting on its behalf.

                                            3
the aircraft to a third party with whom Pro Health had begun talking while the

Agreement was still in effect. Elite had not been involved in those discussions.

       Elite claimed that it was entitled to a commission for the sale, so it sued Pro

Health for breach of contract, among other claims.2           Both parties moved for

traditional summary judgment on Elite’s contract claim, each arguing that the

Agreement unambiguously required judgment in its favor. The trial court granted

summary judgment for Elite, and in its letter ruling explained:

       [S]ubsection (c) [i.e., the 90-day provision] . . . mandates payment if the
       “Broker[,]        or    his   agent[,]   or     representative   of     the
       undersigned . . . negotiated” with the purchaser during the period of the
       Agreement (emphasis and punctuation added). The above sentence
       identifies the Broker, follows that up with the term “his,” obviously
       referring to the Broker, and then uses the term “undersigned.” The use
       of the term “undersigned” in the same sentence that twice identifies the
       Broker suggests that the term either refers to the Owner or both parties
       that have signed the Agreement.3

       Elite also sued Pro Health’s owner, but it later nonsuited its claims against
       2

him.
       3
        Elite did not argue the interpretation or theory of liability adopted by the trial
court. Rather, it moved for traditional summary judgment based on its allegations
that (1) Pro Health had anticipatorily breached by intentionally delaying the
finalization of its sale until the Agreement was no longer in effect; and (2) Pro Health
sold the aircraft within 90 days after termination to a party represented by a broker
that Elite had engaged in discussions with during the term of the Agreement.

       Even after the trial court expressly stated the legal theory on which it was
granting summary judgment, Elite did not deviate. When Pro Health moved for
reconsideration of the summary judgment (and argued, among other things, that Elite
had not moved for summary judgment on the theory sustained by the trial court),
Elite responded by “incorporat[ing] its Motion for Partial Summary Judgment.”

                                            4
      Because Pro Health was included in this interpretation of the term

“undersigned,” and because it had begun talking with the buyer while the Agreement

was still in effect, the trial court concluded that the 90-day provision required Pro

Health to pay Elite a commission for the sale.        It subsequently entered a final

judgment that incorporated its summary judgment, and it awarded Elite attorney’s

fees and costs.

      Pro Health appeals, challenging the trial court’s interpretation of the 90-day

provision and the summary judgment premised upon that interpretation.

                    II. Standard of Review and Governing Law
      We review a summary judgment de novo. Rosetta Res. Operating, LP v. Martin,

645 S.W.3d 212, 218 (Tex. 2022); Parker Cnty. Appraisal Dist. v. Bosque Disposal Sys.,

LLC, 506 S.W.3d 665, 667 (Tex. App.—Fort Worth 2016), aff’d, 555 S.W.3d 92 (Tex.

2018). Because the trial court granted summary judgment on specific grounds, we

focus our review on those grounds.4 See Cincinnati Life Ins. Co., 927 S.W.2d at 626;

Parker Cnty. Appraisal Dist., 506 S.W.3d at 668.

       On appeal, Elite continues to advance its summary judgment arguments—the
arguments not ruled upon by the trial court—as the primary bases allegedly entitling it
to the commission.

      Regardless, Pro Health does not raise this issue on appeal.

      While we must review the specific grounds that the trial court ruled upon, we
      4

may also, in the interest of judicial economy, consider other summary judgment

                                            5
       Here, the grounds ruled upon turn on the language of the Agreement, which

the parties agree is unambiguous.           Even when parties consider a contract

unambiguous, though, the presence of ambiguity and the interpretation of a contract

are questions of law, which we review de novo. Devon Energy Prod. Co., L.P. v.

Sheppard, 668 S.W.3d 332, 343 (Tex. 2023); URI, Inc. v. Kleberg Cnty., 543 S.W.3d 755,

763 (Tex. 2018) (noting that “[a] contract . . . may be ambiguous even though the

parties agree it is not”); Nat’l Union Fire Ins. Co. of Pittsburgh v. CBI Indus., Inc., 907

S.W.2d 517, 520 (Tex. 1995) (“Whether a contract is ambiguous is a question of law

for the court to decide.”).

       When interpreting a contract, our “primary objective . . . is to ascertain and give

effect to the parties’ intent as expressed in the instrument.” U.S. Polyco, Inc. v. Tex.

grounds preserved for review. See Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 625–
26 (Tex. 1996).

       To preserve for appellate review summary judgment grounds that the trial
court did not rule upon, “the party must raise them in the summary judgment
proceeding and present them in an issue or cross-point on appeal.” Parker Cnty.
Appraisal Dist., 506 S.W.3d at 668. Pro Health’s brief does not analyze the grounds on
which it unsuccessfully moved for summary judgment. And although Elite’s brief
addresses alternate summary judgment grounds that the trial court did not rule upon,
it does not present these grounds as cross points.

        Regardless, even if Elite had presented its alternate grounds as cross points, we
would exercise our discretion not to address them because we lack the benefit of the
trial court’s decision or of full briefing on the issues. See Cincinnati Life Ins. Co., 927
S.W.2d at 626 (holding that appellate court “may” consider alternate grounds but
declining to do so without “the benefit of the court of appeals’ decision on the merits
of the . . . alternate grounds or full briefing from the parties”).

                                            6
Cent. Bus. Lines Corp., 681 S.W.3d 383, 387 (Tex. 2023) (internal quotation marks

omitted) (quoting URI, 543 S.W.3d at 763). We “‘presume parties intend what the

words of their contract say’ and interpret contract language according to its ‘plain,

ordinary, and generally accepted meaning.’” URI, 543 S.W.3d at 764 (first quoting

Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd’s London, 327 S.W.3d 118, 126 (Tex.

2010); and then quoting Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex.

1996)); see Rosetta Res. Operating, 645 S.W.3d at 219 (similar). We seek to harmonize

the entire contract, avoiding constructions that would render any words or provisions

meaningless. See Rosetta Res. Operating, 645 S.W.3d at 219; Gilbert Tex. Constr., 327

S.W.3d at 126.

      If a contract “can be given a definite or certain legal meaning,” then it is

unambiguous and must be enforced as written. URI, 543 S.W.3d at 765; see Gilbert

Tex. Constr., 327 S.W.3d at 133; Heritage Res., Inc., 939 S.W.2d at 121. But if a contract

“is susceptible to more than one reasonable interpretation . . . , an ambiguity exists,”

and “the granting of a motion for summary judgment is improper because the

interpretation of the instrument becomes a fact issue.” Rosetta Res. Operating, 645

S.W.3d at 219 (quoting Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983)); URI, 543

S.W.3d at 765.

                                III. 90-Day Provision
      The 90-day provision is a grammatical headache. It states:

                                            7
      Owner will pay Broker the aforementioned commission in the event
      of . . . any sale of the Aircraft within ninety (90) days after termination of
      this Agreement to anyone with whom Broker or his agent or
      representative of the undersigned have negotiated with during the period
      of this Agreement.

      There is no dispute that there was a “sale of the Aircraft within ninety (90) days

after termination of th[e] Agreement.” That much is simple. The difficulty comes in

deciphering who qualifies as a commission-triggering buyer: “anyone with whom

Broker or his agent or representative of the undersigned have negotiated with during

the period of this Agreement.”

      We must give effect to all words in this provision so that no word is rendered

meaningless. RSUI Indem. Co. v. The Lynd Co., 466 S.W.3d 113, 118 (Tex. 2015) (“We

strive to give effect to all of the words and provisions so that none is rendered

meaningless.”). And to do so, we presume that the different terms used in the

provision—“Owner,” “Broker,” “agent,” “representative,” and “undersigned”—were

intended to have different meanings.5 See Utica Nat’l Ins. Co. of Tex. v. Am. Indem. Co.,

141 S.W.3d 198, 203 (Tex. 2004) (construing insurance policy, commenting that “the

different wording in the[ relevant] exclusions [wa]s significant,” and concluding that

because “policy used different wording—‘arising out of’ versus ‘due to’ in parallel

exclusions— . . . the phrases should have different meanings”); Mr. W Fireworks, Inc. v.

      5
        This is not to say that two words can never have the same meaning. Cf. 1701
Com. Acquisition, LLC v. Macquarie US Trading, LLC, No. 02-21-00333-CV, 2022 WL
3904976, at *20 (Tex. App.—Fort Worth Aug. 31, 2022, no pet.) (mem. op.) (noting
that “different words can carry the same meaning”).

                                            8
Ozuna, No. 04-08-00820-CV, 2009 WL 3464856, at *7 (Tex. App.—San Antonio Oct.

28, 2009, pet. denied) (mem. op. on reh’g) (construing leases and “assum[ing] that

because the parties used the word ‘terminate’ three other times in the leases, but

instead chose to use the word ‘void’ when discussing the illegalization of the sale of

fireworks, the parties meant ‘void’ to mean something different from ‘terminate’”).

The meanings of “Owner” and “Broker” are, of course, defined (and used plentifully)

in the Agreement. The meaning of “his agent or representative of the undersigned,”

though, is fuzzy.

      For starters, what is to be made of the word “his”? Although its placement

implies that it refers to “Broker,” “Broker” is defined as Elite, which is an entity—an

“it.” There are no human males mentioned earlier in the 90-day provision to which

“his” could refer back.

      Even if we assume that “his” attempts to refer to “Broker,” the scope of what

it modifies is unclear. Does the word modify both “agent” and “representative,” or

just “agent”? And for that matter, does the phrase “of the undersigned” modify both

“agent” and “representative” or just “representative”? Cf. Sullivan v. Abraham, 488

S.W.3d 294, 296–98 (Tex. 2016) (interpreting statute authorizing award of “court

costs, reasonable attorney’s fees, and other expenses . . . as justice and equity may

require,” and noting that series-qualifier canon of construction6 would apply justice-

      6
        The series-qualifier canon provides that “[w]hen there is a straightforward,
parallel construction that involves all nouns or verbs in a series, a prepositive or

                                          9
and-equity modifier to court costs and attorney’s fees but last-antecedent canon7

would not).

      As Pro Health highlights, the trial court attempted to make sense of these

modifiers by adding commas, converting the relevant phrase to “Broker[,] or his

agent[,] or representative of the undersigned.”            [Emphasis removed.]         But

“[p]unctuation is a[n] . . . indicator of meaning.” Id. (quoting Scalia & Garner, supra, at

161); see Criswell v. Eur. Crossroads Shopping Ctr., Ltd., 792 S.W.2d 945, 948 (Tex. 1990)

(op. on reh’g) (“Punctuation aids in construing the words used in the instrument.”).

Although punctuation does not always alter a sentence’s construction,8 a comma’s

placement can, in certain circumstances, determine the reach of a modifying term or

phrase.   Sullivan, 488 S.W.3d at 297–98 (noting that a comma’s placement can

postpositive modifier normally applies to the entire series.” Sullivan, 488 S.W.3d at
297 (quoting Antonin Scalia & Bryan A. Garner, Reading Law: the Interpretation of
Legal Texts 147 (2012)).
      7
         The last-antecedent canon provides that a qualifying phrase “must be confined
to the words and phrases immediately preceding it to which it may, without impairing
the meaning of the sentence, be applied.” Id. (quoting Spradlin v. Jim Walter Homes,
Inc., 34 S.W.3d 578, 580 (Tex. 2000)).
      8
        Compare Anderson & Kerr Drilling Co. v. Bruhlmeyer, 136 S.W.2d 800, 803–04
(Tex. [Comm’n Op.] 1940) (stating rule that “[t]he words, not the punctuation, are the
controlling guide in construing a contract” and that a court “may insert [a] comma, in
order to ascertain from the words used the intention of the parties”), with Criswell, 792
S.W.2d at 948 (noting that, while “it is well settled that the words contained in the
instrument, and not the punctuation, should be the controlling guide in construing the
instrument, there is no rule which requires courts to disregard all punctuation and
look solely to the language of the instrument” and discussing significance of
semicolon in contract).

                                            10
“determine whether a modifying phrase or clause applies to all that preceded it or only

to a part” (quoting Scalia & Garner, supra, at 161)); see U.S. Polyco, 681 S.W.3d at 388

(noting that “comma’s absence” was “instructive” in contract interpretation). And the

90-day provision is a prime example of this, as the trial court’s placement of commas

was the determinative factor that elected between competing reasonable

interpretations.

       Adding Oxford commas in the trial court’s chosen locations—“Broker[,] or his

agent[,] or representative of the undersigned”—limited the modifier “his” to “agent,”

and in doing so, implicitly disconnected the “representative of the undersigned” from

the “Broker.”      With this in mind, the trial court concluded that the term

“undersigned” refers to either “the Owner or both parties that ha[d] signed the

Agreement,” so Pro Health owed a commission for selling to a buyer that it had

negotiated with during the term of the Agreement.

       Placing the commas elsewhere would have changed this result entirely, though.

For example, had the trial court placed commas after “Broker” and

“representative”—such that the 90-day provision applied to buyers “with whom

Broker[,] or his agent or representative[,] of the undersigned have negotiated”—then

“his” would have modified both “agent” and “representative,” and “the undersigned”

would have clearly referred to Pro Health, for which Elite served as “Broker.” With

this comma placement, the universe of commission-triggering buyers would have

been unambiguously limited to those with whom Broker (or his agent or

                                          11
representative) had negotiated, meaning that Pro Health’s negotiations with the

eventual buyer did not trigger a commission.9

       The material effect of the trial court’s comma placement is precisely why it

could not add such punctuation to the contract. See Sundown Energy LP v. HJSA No. 3,

Ltd. P’ship, 622 S.W.3d 884, 889 (Tex. 2021) (“As we have said time and again, courts

may not rewrite a contract under the guise of interpretation.”). The absence of

commas in the 90-day provision leaves both of these reasonable interpretations (and

more) open as possibilities.    The trial court could not select among reasonable

interpretations by adding commas in its preferred locations.

       Yet, even adding commas would not—and did not—entirely solve the

problem. Because “undersigned” is undefined, we presume that the parties intended

its ordinary meaning:    “one whose name is signed at the end of a document.”

Undersigned,                Merriam-Webster,                   https://www.merriam-

webster.com/dictionary/undersigned (last visited April 15, 2024); see Undersigned,

Webster’s Third New International Dictionary 2490 (reprt. 2021) (1961) (defining

undersigned as “one who signs his name at the end of a document”); cf. RSUI Indem.

Co., 466 S.W.3d at 118 (noting that, unless the contract dictates otherwise, “we give

       Further reshuffling the commas could change the meaning again. Had the 90-
       9

day provision been modified to apply to a buyer “with whom Broker[,] or his agent or
representative of the undersigned[,] have negotiated,” then “representative of the
undersigned” would have been implicitly connected to “Broker.” Whatever the
meaning of “representative of the undersigned” in this context, its linkage to “Broker”
would exclude Pro Health from its scope.

                                          12
words and phrases their ordinary and generally accepted meaning, reading them in

context and in light of the rules of grammar and common usage”). Pro Health and

Elite are the entities who “signed at the end of [the] document.”               Undersigned,

Merriam-Webster, https://www.merriam-webster.com/dictionary/undersigned (last

visited April 15, 2024). But those entities have defined labels—labels employed

throughout the remainder of the Agreement—and the defined labels are not used in

the portion of the 90-day provision that we must construe here. Generally, we

presume that “using different language in different parts of a contract means the

parties intended different things.” Sundown Energy, 622 S.W.3d at 888; see PopCap

Games, Inc. v. MumboJumbo, LLC, 350 S.W.3d 699, 708 (Tex. App.—Dallas 2011, pet.

denied) (similar); Mr. W Fireworks, 2009 WL 3464856, at *7 (applying rule).

       The references to an “agent” and a “representative” are also puzzling. Elite

and Pro Health are both entities and can only act through agents or representatives.

See Ex parte Chambers, 898 S.W.2d 257, 260 (Tex. 1995) (orig. proceeding) (“Although

a corporation is a legally distinct and cognizable entity, it is only able to act through its

agents.”); see also 19 C.J.S. Corporations § 547 (2024) (“A corporation is an entity which

can only act through it[s] agents.”). The Agreement generally takes this as a given;

outside of the 90-day provision, it consistently refers to the “Owner” (Pro Health) or

the “Broker” (Elite) acting, without mentioning that such actions are necessarily taken

by the entities’ agents or representatives. It is unclear why the 90-day provision

distinguishes between entities and their “agent[s]” or “representative[s],”or why it

                                             13
distinguishes between “agents” and “representatives” when nothing else in the

Agreement does so.10

      The 90-day provision’s wording thus presents a quandary. The trial court’s

temptation to materially alter the provision’s language is certainly understandable, but

it was beyond its authority—and it is beyond ours—to take such action. The 90-day

provision simply does not make sense in the context of the Agreement as a whole; it

lacks a clear or definite meaning.11 See Gilbert Tex. Constr., 327 S.W.3d at 133 (“If a

contract as written can be given a clear and definite legal meaning, then it is not

ambiguous as a matter of law.”). And because the provision is patently ambiguous on

its face,12 summary judgment was precluded. See Rosetta Res. Operating, 645 S.W.3d at

225 (holding that mineral lease was ambiguous, so summary judgment on contract

      10
         Furthermore, if “undersigned” were construed to encompass Pro Health,
then the 90-day provision would require payment of a commission if a “representative
of [Pro Health]” had negotiated with the buyer, but not if Pro Health itself had
negotiated with the buyer. This is not only an absurd result but also an absurd
distinction, given that Pro Health can only act through its representatives or agents.
See Rosetta Res. Operating, 645 S.W.3d at 219 (“We also avoid constructions of contract
language that would lead to absurd results.”).
      11
        Although the parties’ filings indicate that, at least at one time, they had a
shared understanding of the 90-day provision’s meaning, “[o]bjective manifestations
of intent control[—]not ‘what one side or the other alleges they intended to say but
did not.’” URI, 543 S.W.3d at 763–64 (quoting Gilbert Tex. Constr., 327 S.W.3d at
127).
      12
         “A patent ambiguity is evident on the face of the contract” and is contrasted
with a latent ambiguity, which “arises when a contract which is unambiguous on its
face is applied to the subject matter with which it deals and an ambiguity appears by
reason of some collateral matter.” Nat’l Union Fire Ins. Co., 907 S.W.2d at 520.

                                          14
claim was improper); Hoyt v. Harbor Lakes Homeowners Ass’n, No. 02-20-00061-CV,

2021 WL 2966133, at *7 (Tex. App.—Fort Worth July 15, 2021, no pet.) (mem. op.)

(“For a court to be able to construe a contract as a matter of law, the contract must be

unambiguous.”).

      We sustain Pro Health’s sole appellate issue.

                                   IV. Conclusion
      The 90-day provision is ambiguous. The trial court erred by adding dispositive

commas to it and by granting Elite’s motion for traditional summary judgment based

upon it.   We reverse the summary judgment and remand the case for further

proceedings consistent with this opinion. Tex. R. App. P. 43.2(d).

                                                      /s/ Bonnie Sudderth

                                                      Bonnie Sudderth
                                                      Chief Justice

Delivered: April 18, 2024

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