Complete Care Services, L.P. v. Ethel Holt, Independent of the Person and the Estate of Joseph Thomas Holt, and on Behalf of and for the Benefit of All Parties Entitled to Bring an Action for the Damages Caused to Joseph Thomas Holt

• Court: Court of Appeals of Texas
• Decided: June 9, 2005
• Docket: 01-04-00044-CV
• Status: Published

Opinion

Opinion issued June 9, 2005

In The

Court of Appeals

For The

First District of Texas

---

NO. 01-04-00044-CV

---

COMPLETE CARE SERVICES, L.P., Appellant

V.

ETHEL HOLT, INDEPENDENT EXECUTRIX OF THE PERSON AND THE ESTATE OF JOSEPH THOMAS HOLT, AND ON BEHALF OF AND FOR THE BENEFIT OF ALL PARTIES ENTITLED TO BRING AN ACTION FOR THE DAMAGES CAUSED TO JOSEPH THOMAS HOLT, Appellee

---

On Appeal from the 344th District Court

Chambers County, Texas

Trial Court Cause No. 18084

---

MEMORANDUM OPINION

          This is an appeal from a summary judgment rendered in favor of appellee, Ethel Holt. The case began as an action to recover wrongful death and survival damages on appellees’ behalf for the injuries and death of Joseph Holt against Senior Living Properties, L.L.C. (“SLP”) and its third-party manager, appellant, Complete Care Services, L.P. (“CCS”). On appeal, the issues are whether the trial court erred in (1) granting summary judgment for appellee on a claim not alleged in her pleading; (2) granting a second summary judgment against CCS for breach of the same contract; (3) holding CCS jointly and severally liable for SLP’s share of the uninsured portion of the settlement; and (4) ignoring summary judgment evidence. We reverse and remand.

BACKGROUND

          After her husband, Joseph Holt, died while a resident of Anahuac Healthcare Center nursing home, Ethel Holt, as executrix of her husband’s estate, sued SLP, the owner of the nursing home, and CCS, the company that managed the nursing home. SLP was an additional insured under CCS’s liability insurance policy, which consisted of a self-insured retention (“SIR”) of $500,000 per occurrence. Admiral Insurance Company (“Admiral”) provided the first layer of liability coverage above the SIR for both CCS and SLP in the amount of $1,000,000 per occurrence. Admiral was not obligated to contribute to the settlement of a case until the insureds satisfied the SIR.

          On February 25, 2002, the parties signed a settlement agreement (“the Agreement”) after mediation. CCS and SLP settled their part of the controversy for $1,000,000. Admiral agreed to pay $750,000 of the total sum of the settlement. However, CCS and SLP could not immediately agree on what percentage of the remaining $250,000 balance for which each would be responsible. CCS and SLP agreed to submit to binding arbitration the question of what percentage of the balance of the Agreement each company would be required to pay. They agreed that the arbitration must take place within 14 days of signing the Agreement in order for the amounts owed by each to be determined by the time the funds were due to be paid to appellee. According to the Agreement, if the arbitration did not occur within 14 days, CCS and SLP would each pay 50 % of the $250,000 balance to appellee. The Agreement states

Of the above sums from Senior Living Properties and Complete Care Services, $750,000 shall be paid by Admiral Insurance Company with the remainder to be paid between said parties through binding arbitration before Alan F. Levin within 14 days. For the purposes of this settlement agreement, SLP & CCS are deemed to owe the $250,000 SIR money 50/50.

          Admiral timely paid its $750,000 portion. But when appellee filed a First Supplemental Petition against CCS and SLP on April 2, 2002, CCS had only paid $75,000, while SLP had not made any payment to appellee. In her First Supplemental Petition, appellee alleged in count one that both CCS and SLP had breached the Agreement and sought a declaratory judgment to that effect. In count two, appellee alleged CCS and SLP had fraudulently induced appellee to enter into the Agreement. Appellee moved for summary judgment against CCS and SLP on count one, and she sought to have the first count against CCS and SLP severed into separate actions.

          On October 4, 2002, the trial court granted appellee’s summary judgment on count one and severed her claims. In this final judgment, the court (1) entered judgment against CCS for $125,000, but also declared that $75,000 of that amount had already been satisfied by CCS’s partial payment; (2) severed the breach of contract judgment against CCS from the remaining claims and assigned this severed breach of contract action against CCS the cause number 18084-B; (3) severed the breach of contract claim against SLP and assigned this severed breach of contract action against SLP the cause number 18084-C; and (4) did not render judgment on appellee’s fraudulent inducement claim against CCS and SLP.

          On December 16, 2002, pursuant to the final judgment, CCS paid the remaining $50,000 principal that it owed appellee according to the terms of the Agreement, thereby combining for a total of $125,000 that CCS had paid to appellee. At that time, SLP had not yet paid any money to appellee. On February 25, 2003, appellee filed a Second Supplemental Petition in which she “requested the Settlement Agreement, dated February 25, 2002, be declared ambiguous.” Appellee filed a second motion for summary judgment against CCS, claiming CCS owed appellee the remaining $125,000 because CCS had undertaken a joint and several obligation in the Agreement. At a hearing on March 4, 2003, the trial court found CCS and SLP jointly and severally liable, but did not conclude that the Agreement was ambiguous. CCS objected that appellee never pleaded for joint and several liability, and without pleading it, appellee could not assert it as a ground for summary judgment. On December 12, 2003, the trial court overruled CCS’s objection regarding appellee’s failure to plead joint and several liability and found the Agreement unambiguous that CCS and SLP are jointly and severally liable for the remaining $125,000 portion of the settlement. The court entered a final summary judgment for appellee and ordered CCS to pay, “in addition to all sums previously paid to this date, the further aggregate sum of ONE HUNDRED TWENTY FIVE THOUSAND DOLLARS ($125,000.00).” (emphasis in original). This appeal followed.

DISCUSSIONIn reviewing a summary judgment, an appellate court must consider whether the successful movant at the trial level carried its burden of showing that there was no genuine issue of material fact and that judgment should be rendered as a matter of law. Tex. R. Civ. P. 166a(c); KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). We assume all the non-movant’s evidence is true and indulge every reasonable inference in favor of the non-movant. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997). If the movant can show it is entitled to judgment as a matter of law, the burden shifts to the non-movant to present evidence raising a fact issue to defeat the motion for summary judgment. Haight v. Savoy Apartments, 814 S.W.2d 849, 851 (Tex. App.—Houston [1st Dist.] 1991, writ denied). When the trial court’s order does not specify the grounds on which a motion for summary judgment was granted, we will affirm the summary judgment if any of the theories advanced in the motion are meritorious. See Cincinnati Life Ins. Co. v. Cates, 927 S.W.2d 623, 625 (Tex. 1996).

          Appellant contends that the Agreement signed February 25, 2002, unambiguously provided that CCS and SLP were each responsible for only 50 % of the $250,000 portion of the settlement with appellee. By contrast, appellee contends that the Agreement makes CCS jointly and severally liable with SLP for all $250,000 because the first sentence of the Agreement states, “Plaintiffs to receive from Defendants in full settlement hereof the sum of $1,215,000.00 payable: Senior Living Properties and Complete Care Services: $1,000,000.00.” (C.R. 224). Appellee argues that this phrase is unambiguous in creating a joint and several obligation on the part of CCS to pay all $1,000,000, if need be. Appellee argues that the sentence found later in the Agreement that provides that “[f]or the purposes of this settlement agreement, SLP & CCS are deemed to owe the $250,000 SIR money 50/50,” is merely an agreement between CCS and SLP as to how they would fund the settlement.

          A settlement agreement is a contract. ASI Techs., Inc. v. Johnson Equip. Co., 75 S.W.3d 545, 547 (Tex. App.—San Antonio 2002, pet. denied). Therefore, construction of a contract is governed by legal principles applicable to contracts generally. Id. An unambiguous contract is to be construed by a court as a matter of law. Heritage Res., Inc. v. Nationsbank, 939 S.W.2d 118, 121 (Tex. 1996). A contract is ambiguous when its meaning is uncertain and doubtful or is reasonably susceptible to more than one interpretation. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). The mere fact that the parties disagree about the meaning of a contract does not make an otherwise straightforward contract ambiguous. Transcon. Gas Pipeline Corp. v. Texaco, Inc., 35 S.W.3d 658, 665 ( Tex. App.—Houston [1st Dist.] 2000, pet. denied). An ambiguity does not arise just because the parties’ respective interpretations are sharply conflicting. Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996); Transcon. Gas Pipeline Corp., 35 S.W.3d at 665. On appeal, the trial court’s legal conclusions are always reviewable, and we are not obligated to give any particular deference to those conclusions. Sifuentes v. Carrillo, 982 S.W.2d 500, 503 (Tex. App.—San Antonio 1998, pet. denied). Rather, we are required to undertake an independent evaluation of the trial court’s legal determinations. Id. We will not reverse a trial court’s legal conclusions on appeal unless they are erroneous as a matter of law. Id.

          In construing an unambiguous contract, our task is to ascertain the parties’ intentions as expressed in the contract. Heritage Res. Inc., 939 S.W.2d at 121. To achieve this goal, we examine the entire document and consider each part with every other part so that the effect and meaning of one part on any other part may be determined. Steeger v. Beard Drilling, Inc., 371 S.W.2d 684, 688 (Tex. 1963); Radx Corp. v. Demy, 658 S.W.2d 298, 301 (Tex. App.—Houston [1st Dist.] 1983, no writ). We presume that the parties to a contract intend every clause to have some effect. Ogden v. Dickinson State Bank, 662 S.W.2d 330, 332 (Tex. 1983).

          We hold that the Agreement of February 25, 2002, is unambiguous. The Agreement first set out the total amount of the settlement that appellee will receive: $1,215,000. It then broke this number down into the $215,000 that appellee was to receive from Pro-Touch Nurses and the $1,000,000 that appellee was to receive from SLP and CCS. However, the Agreement did not end there, but discussed the $1,000,000 portion in greater detail by providing (1) that $750,000 of that remaining $1,000,000 was to come from Admiral and (2) a default arrangement for would pay for the left over $250,000. In the absence of an agreement to the contrary, achieved through binding arbitration within 14 days of when the Agreement was signed, the default arrangement stated that CCS and SLP would each pay 50 % of that remaining $250,000, or in other words, each would pay $125,000.

          The contract never expressly stated that CCS undertook a joint and several obligation to pay the entire $1,000,000 or even $250,000 itself. Nor did the contract implicitly create joint and several liability as it clearly stated that SLP and CCS “are deemed to owe the $250,000 SIR money 50/50.” It is assumed that every clause is intended to have some effect. Heritage Res. Inc., 939 S.W.2d at 121; Dickinson State Bank, 662 S.W.2d at 332. In order to give effect to all terms of the contract, we cannot construe this last sentence to do anything other than allocate CCS’s share of the total settlement amount at $125,000, not more than 50% of the $250,000 remaining portion after payment by Admiral and Pro-Touch Nursing.

CONCLUSION

          Because the trial court erred in granting summary judgment for appellee, we reverse the trial court’s judgment and remand the cause for further proceedings. Because we have held that summary judgment was improperly granted, we need not address CCS’s remaining issues and decline to do so.

                                                             Sherry Radack

                                                             Chief Justice

Panel consists of Chief Justice Radack and Justices Jennings and Hanks.