Court Opinion

ID: 9730185
Source: CourtListenerOpinion
Date Created: 2023-08-26 15:04:21.579391+00
Date Added: 2024-06-11T18:26:04.735262
License: Public Domain

DON BURGESS, Justice,
dissenting.
I vigorously dissent. Unfortunately, the majority, in a misguided slavish adherence to the “arbitrate at every opportunity” mentality, deprives the taxpayers of the Kirbyville Consolidated Independent School District of a right they bargained and contracted for: to have their contract dispute decided by a court in Jasper County-
As noted in the majority opinion, two provisions are at issue. Article I of the contract is entitled “THE CONSTRUCTION DOCUMENTS” and incorporates a form document prepared by the American Institute of Architects, General Conditions of the Contract for Construction, as a Contract Document. Subsection 4.9 of the General Conditions provides “[a]ny controversy or Claim arising out of or related to the Contract, or the breach thereof, shall be settled by arbitration ..." Article IX of the contract proper is entitled “DISPUTES.” It provides:
All matters relating to the validity, performance, interpretation [or] the construction of the contract documents or breach thereof shall be governed by and construed in accordance with the laws of the state of Texas. The Contractor shall not institute any action [or] proceeding in any way relating to this agreement against the Owner except in a court of competent jurisdiction in the County in which the work was performed.
The majority attempts to harmonize the two provisions by holding that Article IX is only a forum selection provision that establishes venue in the county where the work was performed if the court’s assistance becomes necessary during the arbitration process or if arbitration is waived *472by New Concept. This would be trae- if Article IX only contained the first sentence. The majority states “the ‘Disputes’ section does not specifically exclude arbitration.” They are correct, but that does not end the analysis. What Article IX does is prohibit New Concept from instituting any action other than a court action. Thus, if New Concept can only institute any action in a court in Jasper County, then they are excluded from instituting an arbitration process. KCISD suggests the arbitration provision can be harmonized with Article IX inasmuch as KCISD could consent to arbitration. The reasonableness of this interpretation is readily apparent. From the language of the contract alone, it is just as likely the parties intended not to arbitrate their disputes unless KCISD consented to arbitration as it is the parties intended to arbitrate their disputes unless New Concept waived arbitration.
If the language of a contract is subject to two or more reasonable interpretations, it is ambiguous. See National Union Fire Insurance Co. of Pittsburgh, PA v. CBI Industries, Inc., 907 S.W.2d 517, 520 (Tex.1995). “Whether a contract is ambiguous is a question of law for the court to decide by looking at the contract as a whole in light of the circumstances present when the contract was entered.” Id. “Evidence of surrounding circumstances may be consulted” and only if, “in the light of surrounding circumstances, the language of the contract appears to be capable of only a single meaning” is the court to confine itself to the writing. Sun Oil Co. v. Madeley, 626 S.W.2d 726, 731 (Tex.1981). As the court explained in Sun Oil:
... [Tjhere must always be an association between words and external objects, and no matter how definite a contract may appear on its face, “words must be translated into things and facts.” Thus ... the contract in any event had to be appraised in view of the surrounding circumstances known to the parties at the time of its execution and these reasonably could be looked to without violating the parol evidence rale even though the contract were not deemed ambiguous....
... In interpreting contracts or clauses set forth in “clear and unambiguous” language, the courts do not confine themselves to a mere inspection of the document. Before committing themselves, the courts carefully examine the surrounding circumstances, prior negotiations, and all other relevant incidents bearing on the intent of the parties....
... Only after a careful and painstaking search of all the factors shedding light on the intent of the parties, only after “turning signs and symbols into equivalent realities” will the court conclude that the language in any given case is “clear and unambiguous.”
Id. at 731 n. 5 (quoting 4 Williston on ContRacts § 600A, 609 (Third Ed.1961)).
The trial court considered two contracts from the same construction project between KCISD and its Construction Manager and between KCISD and its Architect. In both contracts, the arbitration provision was deleted. The trial court further considered a letter from KCISD’s legal counsel to its Architect stating that all of the language relating to arbitration had been removed and the reasons thereto. Also admitted into evidence were two affidavits. Ed Gant, project architect, averred that it was his experience as KCISD’s architect that KCISD “has routinely stricken contract provisions that require the arbitration of disputes.” Robert Lane, Assistant Superintendent of KCISD, stated the Board of Trustees did not review the AIA Document A201/CMa at the time of signing the Agreement and was not aware it contained an arbitration clause. *473The record establishes that only the Agreement, containing Article IX, was signed by KCISD. Further, Lane avowed that it was his experience that KCISD routinely struck arbitration provisions.
New Concept contends it was improper for the trial court to consider this evidence, arguing the court was limited to the “four corners” of the contract. But as noted above, Article IX is reasonably susceptible to more than one interpretation. Therefore, it was not only permissible, but in this case necessary, for the trial court to consider extrinsic evidence in order to determine the parties’ intentions as regards Article IX, i.e., did the parties intend it to be only a forum selection clause or did they intend it to prevent New Concept from instituting any proceeding other than a court action? As the Supreme Court of Texas wrote in National Union Fire Insurance Co., “[e]xtrinsic evidence may, indeed, be admissible to give the words of a contract a meaning consistent with that to which they are reasonably susceptible, ie., to ‘interpret’ contractual terms. If the contract language is not fairly susceptible of more than one legal meaning or construction, however, extrinsic evidence is inadmissible.... ” Nat’l Union Fire Ins. 907 S.W.2d at 521. Moreover, the Texas Supreme Court in Jack B. Anglin Co., Inc. v. Tipps, 842 S.W.2d 266 (Tex.1992) expressly held “the trial court may summarily decide whether to compel arbitration on the basis of affidavits, pleadings, discovery, and stipulations.” Id. at 269 (emphasis added).
Article IX is susceptible to more than one legal meaning or construction. Therefore, the trial court did not err in considering extrinsic evidence to determine the true intentions of the parties. In light of that evidence, it is abundantly clear Article IX was intended to be more than a forum selection clause; as expressly stated in Article IX, to prohibit New Concept from instituting any action or proceeding other than a court action. This does not render the arbitration provision meaningless, as it is within KCISD’s power to waive its rights under Article IX and agree to arbitrate. Accordingly, the trial court did not abuse its discretion in staying the arbitration proceedings. Therefore, I would affirm the trial court.