Court Opinion

ID: 2916426
Source: CourtListenerOpinion
Date Created: 2015-09-10 20:33:35.833412+00
Date Added: 2024-06-11T14:55:27.630650
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Chief Justice                                                                                                           Clerk
James T. Worthen                                                                                                        CathyS.Lusk

                                       Twelfth Court of Appeals
Justices                                                                                                                Chief Staff Attorney
Sam Griffith                                                                                                            Margaret Hussey
Diane DeVasto

           Wednesday, November 16, 2005

           Mr. E. Lee Parsley                                               Mr. Jose E. De La Fuente
           100 Congress Avenue                                              Lloyd, Gosselink, Blevins, Rochelle,
           Suite 210                                                        Baldwin & Townsend, P.C.
           Austin, TX 78701                                                 Ill Congress Avenue, Suite 1800
                                                                            Austin, TX 78701

           RE:       Case Number:                        12-04-00142-CV
                     Trial Court Case Number:            2001-2303-A

           Style: Healthcare Cable Systems, Inc.
                     v.

                     The Good Shepherd Hospital, Inc., d/b/a Good Shepherd Medical Center

           Enclosed is a copy of the Opinion issued this date in the above styled and numbered cause.
           Also enclosed is a copy of the Court's judgment.

           Very truly yours,

           CATHY S. LUSK, CLERK

           By:     KdjUJWu Ml
                 Katrina McClenny, Chief Depuft Clerk

           CC:            Hon. David Scott Brabham
                          Hon. John Ovard
                          Ms. Barbara Duncan

                 1517West Front Street • Suite 354 • Tyler, TX 75702 • Tel: 903-593-8471 • Fax: 903-593-2193
   Serving Anderson, Angelina, Cherokee, Gregg, Henderson, Houston, Nacogdoches, Rains, Rusk, Sabine, San Augustine, Shelby, Smith, Trinity,
                                                    Upshur, Van Zandt and Wood Counties
                                                         www.12thcoa.courts.state.tx.us
                                         NO. 12-04-00142-CV

                             IN THE COURT OF APPEALS

             TWELFTH COURT OF APPEALS DISTRICT

                                            TYLER, TEXAS

HEALTHCARE CABLE SYSTEMS, INC.,                              §              APPEAL FROM THE 188TH
APPELLANT

V.                                                           §              JUDICIAL DISTRICT COURT OF

THE GOOD SHEPHERD HOSPITAL, INC.
d/b/a GOOD SHEPHERD MEDICAL CENTER,
APPELLEE                         §                                          GREGG COUNTY, TEXAS

                                                       OPINION

         Healthcare Cable Systems, Inc. appeals the trial court's order granting The Good Shepherd
Hospital, Inc. d/b/a Good Shepherd Medical Center's motion for summary judgment. HCS raises
three issues on appeal. We reverse and remand in part and affirm in part.

                                                    Background

         On August 3,1994, HCS and Good Shepherd entered into a Television Services Agreement
whereby HCS would provide cable television services to Good Shepherd. The contract stated that
the agreement term was to be for "a period of five (5) years commencing on the Operational Date
and ending five years from and after such date."1 "Operational Date" is defined by paragraph 2.4
of the contract as follows:

           Further, if neither party notified the other of its intent to discontinue the agreement at least ninety days
prior to the expiration of the agreement, the agreement would automatically renew for a one year term.
         The equipment and related parts, accessories, and supplies shall be installed at HCS's sole cost and
         expense, on or before ninety (90) days from the date HCS receives an executed counterpart of the
         Agreement from Hospital ("Operational Date") ....

The parties signed the agreement on or before October 31, 1994. HCS installed the necessary
equipment and commenced service within weeks thereafter.
         In December 1998, the parties executed an agreement containing identical language, but for
the addition of an investor as a party to receive notice pursuant to the agreement. Thereafter, the
business relationship between Good Shepherd and HCS deteriorated.
         Good Shepherd filed suit on November 1, 2001 seeking a declaratory judgment that the
operational date ofthe contract executed in December 1998 was the same date as it was for the 1994
contract—the datewhenthe equipment wasinstalled.2 BeforeGoodShepherd's petitionwas served
on HCS, HCS filed suit for breach of contract and served Good Shepherd with citation. In its
petition, HCS alleged that the 1998 document had a five year term commencing on December 16,
1998, the date it was signed by Good Shepherd. The two cases were consolidated with Good
Shepherd as plaintiff.
         Good Shepherd filed a motion for partial summary declaratory judgment on August 12,2003
and later sought to file additional evidence in support thereof. HCS responded to Good Shepherd's
motion and objected to its supporting evidence and its motion for leave to file additional evidence.
HCS also filed a motion for summary judgment as to its breach of contract counterclaim, to which
Good Shepherd responded. In its motion, HCS argued that the operational date of the agreement
occurred within ninety days from the date HCS received an executed counterpart of the contract.
Ultimately, the trial court granted Good Shepherd's motion for summary declaratory judgment and

denied HCS's motion for summary judgment on its breach of contract claim.                     In its order, the trial
court stated that the operational date of the agreement between the parties was no later than
October 31, 1994 and that the agreement expired no later than October 31, 2000. This appeal
followed.

         2
             At the time of its motion for summary judgment, Good Shepherd's third amended petition sought a
declaration that the operational date was no later than October 31, 1994.
                                           Summary Judgment

       In its first issue, HCS argues that the trial court erred in overruling its motion for summary
judgment concerning its allegations of breach of contract. In a portion of its second issue, HCS
argues that the trial court erred in granting Good Shepherd's motion for summary declaratory
judgment. In reviewing a traditional motion for summary judgment, this court must apply the
standards established in Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex.
1985), which are as follows:

        1.     The movant for summary judgment has the burden of showing that there is no
               genuine issue of material fact and that it is entitled to judgment as a matter of law.

       2.      In deciding whether there is a disputed material fact issue precluding summary
               judgment, evidence favorable to the nonmovant will be taken as true.

       3.      Every reasonable inference must be indulged in favor of the nonmovant and any
               doubts resolved in its favor.

See id.; May v. Nacogdoches Mem 'IHosp., 61 S.W.3d 623, 628 (Tex. App.-Tyler 2001, no pet.).
For a party to prevail on a motion for summaryjudgment, he must conclusively establish the absence
of any genuine question of material fact and that he is entitled to judgment as a matter of law. Tex.
R. Civ. P. 166a(c). A movant must either negate at least one essential element of the nonmovant's
cause of action or prove all essential elements of an affirmative defense. See Randall's FoodMkt.,
Inc. v. Johnson, 891 S.W.2d 640, 644 (Tex. 1995); see also MMP, Ltd. v. Jones, 710 S.W.2d 59,
60 (Tex. 1986). Since the burden of proof is on the movant, and all doubts about the existence of
a genuine issue of a material fact are resolved against the movant, we must view the evidence and
its reasonable inferences in the light most favorable to the nonmovant. See Great Am. Reserve Ins.
Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex. 1965). We are not required to
ascertain the credibility of affiants or to determine the weight of evidence in the affidavits,
depositions, exhibits, and other summary judgment proof. See Gulbenkian v. Penn, 151 Tex. 412,
252 S.W.2d 929, 932 (Tex. 1952). The only question is whether or not an issue of material fact is
presented. See Tex. R. Civ. P. 166a(c).
       Once the movant has established a right to summaryjudgment, the nonmovant has the burden
to respond to the motion for summary judgment and present to the trial court any issues that would
preclude summaryjudgment. See, e.g., City ofHouston v. Clear Creek Basin Auth., 589 S.W.2d
671, 678-79 (Tex. 1979). All theories in support of or in opposition to a motion for summary
judgment must be presented in writing to the trial court. See Tex. R. Civ. P. 166a(c).

                                       Contractual Construction

         In construing a written contract, the primary concern of the court is to ascertain the true
intentions ofthe parties as expressed in the instrument. Coker v. Coker, 650 S.W.2d 391, 393 (Tex.
1983); see alsoNat'l Union Fire Ins. Co. ofPittsburgh, PA v. CBI Indus., Inc., 907 S.W.2d 517,
520 (Tex. 1995). To achieve this objective, courts should examine and consider the entire writing
in an effort to harmonize and give effect to all the provisions of the contract so that none will be
rendered meaningless. Id. No single provision taken alone will be given controlling effect; rather,
all the provisions must be considered with reference to the whole instrument. Id.; Myers v. Gulf
Coast Minerals Mgmt. Corp., 361 S.W.2d 193, 196 (Tex. 1962).
         Ifthe written instrument is so worded that it can be given a certain or definite legal meaning
or interpretation, then it is not ambiguous, and the court will construe the contract as a matter of law.
Coker, 361 S.W.2d at 393. An ambiguity may be either "patent" or "latent." See CBI, 907 S.W.2d
at 520. A patent ambiguity is evident on the face ofthe contract. Id. A latent ambiguity arises when
a contract that is unambiguous on its face is applied to the subject matter, and an ambiguity appears
by reason of some collateral matter. See id.3
         The interpretation of an unambiguous contract is a question of law, which we review de
novo. See MCI Telecomm. Corp. v. Tex. Util. Elec. Co., 995 S.W.2d 647, 650 (Tex. 1999).
Ambiguity does not arise simply because the parties advance conflicting interpretations of the
contract; rather, for an ambiguity to exist, both interpretations must be reasonable. Lopez v. Munoz,
Hockema & Reed, L.L.P., 22 S.W.3d 857, 861 (Tex. 2000). Yet when a contract contains an
ambiguity, the granting of a motion for summaryjudgment is improper because the interpretation
of the contract becomes a fact issue. See A.W. Wright & Assoc, P.C. v. Glover, Anderson,
Chandler & Uzick, L.L.P., 993 S.W.2d 466,470 (Tex. App.-Houston [14th Dist] 1999, pet. denied)

           For example, if a contract called for goods to be delivered to "the green house on Pecan Street," and there
were, in fact, two green houses on Pecan Street, a latent ambiguity would arise. See id. n.4.
(citing Coker, 650 S.W.2d at 394).
        In interpreting a contract, we must presume that the parties thereto intended every clause to
have some effect; therefore, we consider each part of the document with every other part of the
document so that the effect and meaning of one part on any other part may be determined. See
Birnbaum v. SwepiLP, 48 S.W.3d254,257 (Tex. App.-San Antonio2001,pet. denied). Moreover,
we give terms their plain, ordinary, and generally accepted meaning unless the instrument shows that
the parties used such terms in a technical or different sense. Id. Finally, we enforce an unambiguous
agreement as written. Id. We are not permitted to rewrite an agreement to mean something it did
not. Id. We cannot change the contract simply because we or one ofthe parties comes to dislike its
provisions or thinks that something else is needed in it. Id. Parties to a contract are masters oftheir
own choices and are entitled to select what terms and provisions to include in or omit from a
contract. Id.

        The epicenter of our inquiry concerns the meaning of the term "Operational Date." When
contracting parties set forth their own definitions of the terms they employ, the courts are not at
liberty to disregard these definitions and substitute other meanings. See Alexander v. Cooper, 843
S.W.2d 644, 646-47 (Tex. App-Corpus Christi 1992, no writ); Fulton v. Tex. Farm Bureau Ins.
Co., 113 S.W.2d 391, 392 (Tex. App.-Dallas 1989, writ denied); Hart v. Traders & Gen. Ins. Co.,
487 S.W.2d 415, 417-18 (Tex. Civ. App.-Fort Worth 1972, writ refd n.r.e.). In the case at hand,
the language employed in paragraph 2.4 of both the 1994 and 1998 agreements demonstrates that
the parties intended to ascribe a particular meaning to the term "Operational Date." Paragraph 2.4
states as follows:

        The equipment and related parts, accessories, and supplies shall be installed at HCS's sole cost and
        expense, on or before ninety (90) days from the date HCS receives an executed counterpart of the
        Agreement from Hospital ("Operational Date")....

HCS argues that Paragraph 2.4 defines "Operational Date" as a date within ninety days from the date
HCS received an executed counterpartofthe contract.4 Good Shepherdcontendsthat Paragraph2.4

         Thus, HCS contends that the 1998 agreement created a new operational date when it was executed by
Good Shepherd and received by HCS.
defines "Operational Date" as the date when the equipment was installed.5
         Both parties argue at length as to how the parenthetical containing the term "Operational
Date" refers to a certain portion of the preceding sentence. Neither party agrees as to which portion
of this multi-clause sentence the parenthetical refers. We are aware of no rule of construction,
grammar, or punctuation6 that will permitus to determine preciselyto whatportionof the preceding
sentence or other portion of a document a parenthetically-defined term refers. As such, from our
reading of the sentence by which the parties intended to define the term "Operational Date," we
conclude that the term is fairly susceptible of more than one construction. Given the language
employed, neither HCS's interpretation of the contract nor that of Good Shepherd is any less
reasonable.7

         Therefore, the term "Operational Agreement," which the parties intended to have a distinct
meaning apart from its plain meaning, see Cooper, 843 S.W.2d at 646-47, cannot be given a certain
or definite legal meaning or interpretation. We conclude that the term "Operational Date" is
ambiguous. Because the contract contains an ambiguity, there is an issue of fact concerning its
interpretation. See A. W. Wright & Assoc, P.C., 993 S.W.2d at 470. Therefore, we hold that the
trial court erred in granting summary declaratory judgment in favor of Good Shepherd. See Tex. R.
Civ. P. 166a(c). We further hold that the trial court did not err in overruling HCS's motion for

           Specifically, Good Shepherd contends that the operational date was the same for both the 1994 and the
1998 agreements.

         6See Gen. Fin. Servs. v. Practice Place, 897 S.W.2d 516, 522 (Tex. App.-Fort Worth 1995, no writ)
(citing Jim Walter Homes, Inc. v. Schuenemann, 668 S.W.2d 324, 330 (Tex. 1984)) ("A cardinal rule of contract
construction is that courts are required to construe contracts in a manner that would give effect to the parties'
intentions as revealed by the language used in the contract."); Mattison, Inc. v. W.F. Larson, Inc., 529 S.W.2d 271,
273 (Tex. Civ. App.-Amarillo 1975, writ ref d n.r.e.) ("The words, not the punctuation, are the controlling guide in
construing a contract. If the meaning of the words is clear the court will interpret a contract. . . without regard to the
punctuation marks or the want of them. While punctuation may be resorted to in order to resolve an ambiguity which
it has not created, punctuation or the absence of punctuation will not of itself create ambiguity.").

          As Good Shepherd argues in response to a portion of HCS's second issue, extrinsic evidence is admissible
to give the words of a contract a meaning consistent with that to which they are reasonably susceptible, i.e., to
interpret contractual terms. See CBI, 907 S.W.2d at 521. However, a court may consider the parties' interpretations
of the contract through extrinsic or parol evidence only after a contract is first determined to be ambiguous. See
FriendswoodDev. Co. v. McDade + Co., 926 S.W.2d 280, 283 (Tex. 1996); Atl. Lloyds Ins. Co. v. Butler, 137
S.W.3d 199, 210 (Tex. App.-Houston [1st Dist] 2004, pet. denied). Thus, we have not considered the extrinsic
evidence offered by Good Shepherd in support of its motion for summaryjudgment in our consideration of whether
the term "Operational Agreement," as defined by the parties, is ambiguous.
summaryjudgment. Id. HCS's first issue is overruled, and its second issue is sustained inpart.8

                                                 Attorney's Fees

         In its third issue, HCS argues that the trial court erred in awarding Good Shepherd
$124,490.32 in attorney's fees. Good Shepherd's claim for attorney's fees was made in conjunction
with its claim under the Declaratory Judgment Act. See Tex. Civ. Prac. & Rem. Code Ann.
§ 37.009 (Vernon 1997). We have held that the trial court erred in granting summary declaratory
judgment in favor of Good Shepherd. Thus, it follows that its award of attorney's fees to Good
Shepherd was likewise erroneous. HCS's third issue is sustained.

                                                     Disposition

         Having sustained a portion of HCS's second issue as well as its third issue, we reverse the
trial court's order granting Good Shepherd's motion for summary declaratory judgment and award
of attorney's fees. Having overruled HCS's first issue, we affirm the trial court's order overruling
HCS's motion for summaryjudgment on its breach of contract claim. We remand the cause to the
trial court for further proceedings consistent with this opinion.

                                                                          DIANE DEVASTO
                                                                                   Justice

Opinion delivered November 16, 2005.
Panel consisted of Worthen, C.J., Griffith, J., and DeVasto, J.

                                                      (PUBLISH)

          Having held that the trial court erred in granting Good Shepherd's motion for summary declaratory
judgment, we need not consider the portion of HCS's second issue concerning whether the trial court erred in
admitting extrinsic evidence offered by Good Shepherd. See n. 6.
                                  COURT OF APPEALS

           TWELFTH COURT OF APPEALS DISTRICT OF TEXAS

                                          JUDGMENT
                                        NOVEMBER 16, 2005

                                       NO. 12-04-00142-CV

                           HEALTHCARE CABLE SYSTEMS, INC.,
                                                 Appellant
                                                     V.

                      THE GOOD SHEPHERD HOSPITAL, INC., d/b/a
                           GOOD SHEPHERD MEDICAL CENTER,
                                                 Appellee

                            Appeal from the 188th Judicial District Court
                         of Gregg County, Texas. (Tr.Ct.No. 2001-2303-A)

                       THIS CAUSE came to be heard on the oral arguments, appellate record and
the briefs filed herein, and the same being inspected, it is the opinion of this court that there was
error in the judgment ofthe court below insofar as it granted Good Shepherd's motion for summary
declaratory judgment and award of attorney's fees.
                       It is therefore ORDERED, ADJUDGED and DECREED that the judgment
ofthe court below wherein the trial court granted Good Shepherd's motion for summary declaratory
judgment and award of attorney's fees be reversed. It is further ORDERED that the trial court's
order overruling Healthcare Cable System's, Inc.'s motion for summaryjudgment on its breach of
contract claim is hereby affirmed and this cause is remanded for further proceedings in accordance
with the opinion of this court.
                       It is further ORDERED that the appellee, THE GOOD SHEPHERD
HOSPITAL, INC., d/b/a GOOD SHEPHERD MEDICAL CENTER, pay all appellate costs in
this cause, for all ofwhich execution may issue; and that this decision be certified to the court below
for observance.

                       Diane DeVasto, Justice.
                       Panel consisted of Worthen, C.J., Griffith, J., and DeVasto, J.