ACCEPTED
14-15-00463-CV
FOURTEENTH COURT OF APPEALS HOUSTON, TEXAS
11/18/2015 7:33:39 PM
CHRISTOPHER PRINE
CLERK
14-15-00463-CV
FILED IN
14th COURT OF APPEALS
COURT OF APPEALS FOR THE HOUSTON, TEXAS FOURTEENTH DISTRICT OF TEXAS 11/18/2015 7:33:39 PM Houston, Texas CHRISTOPHER A. PRINE Clerk
CROSSLAND ACQUISITION, INC., Plaintiff - Appellant,
V.
HNTB CORPORATION,
Defendant - Appellee.
____________________________________________
APPELLANT’S BRIEF
____________________________________________
Bryant S. Banes Neel, Hooper & Banes, P.C. State Bar No. 24035950 1800 West Loop South, Suite 1750 Sean D. Forbes Houston, Texas 77027 State Bar No. 24040916 713-629-1800 Stormy N. Mayfield 713-629-1812 (Fax) State Bar No. 24067656 Email: bbanes@nhblaw.com Email: sforbes@nhblaw.com Email: smayfield@nhblaw.com
Attorneys for Crossland Acquisition, Inc.
ORAL ARGUMENT REQUESTED
IDENTITY OF COUNSEL
The following parties and counsel listed are involved in this matter. See TEX. R.
APP. P. 38.1(a).
Plaintiff/Appellant:
Crossland Acquisition, Inc.
Defendant/Appellee:
HNTB Corporation Counsel for Plaintiff/Appellant:
Bryant S. Banes Sean D. Forbes Stormy N. Mayfield Neel, Hooper & Banes, P.C.
1800 West Loop South, Suite 1750 Houston, Texas 77027
Counsel for Defendant/Appellee:
P. Randall Crump Shook Hardy & Bacon, L.L.P.
600 Travis, Suite 3400 Houston, Texas 77002-2926
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TABLE OF CONTENTS
PAGE NO.
IDENTITY OF COUNSEL ...................................................................................... ii TABLE OF CONTENTS ......................................................................................... iii TABLE OF AUTHORITIES ..................................................................................... v STATEMENT OF THE CASE ............................................................................... vii STATEMENT REGARDING ORAL ARGUMENT ............................................ viii ISSUES PRESENTED ..............................................................................................ix STATEMENT OF THE FACTS................................................................................ 2 SUMMARY OF THE ARGUMENT......................................................................... 7 STANDARD OF REVIEW ....................................................................................... 8 ARGUMENT ........................................................................................................... 12
I. The trial court erred in ruling that the parties’ contract required Crossland’s completion of all services for all land parcels for a firm, fixed price, despite plain contract language to the contrary .................. 12
PRAYER .................................................................................................................. 17 CERTIFICATE OF SERVICE ................................................................................ 18 CERTIFICATE OF COMPLIANCE ....................................................................... 18 APPENDIX
Order on Defendant HNTB Corporation’s Traditional Motion for Summary Judgment Signed on January 20, 2015 ...................................................................................... A
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Amended Order on Summary Judgment Signed on February 16, 2015.................... B Final Judgment Signed on May 1, 2015 .................................................................... C Master Agreement between HNTB Corporation and Consultation ......................... D Task Order 3 .............................................................................................................. E Supplemental Agreement 1 to Task Order 3 ............................................................. F Supplemental Agreement 2 to Task Order 3 ............................................................. G Supplemental Agreement 3 to Task Order 3 ............................................................. H Task Order 4 ............................................................................................................... I Supplemental Agreement 1 to Task Order 4 .............................................................. J
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TABLE OF AUTHORITIES
CASES: PAGE NO:
Beverick v. Koch Power, Inc., 186 S.W.3d 145 (Tex. App.—Houston [1st Dist.] 2005, pet. denied) .....................................................................................................12
Black Lake Pipe Line Co. v. Union Constr. Co., 538 S.W.2d 80 (Tex.1976), overruled on other grounds by Sterner v. Marathon Oil Co., 767 S.W.2d 686 (Tex.1989) ................................................................................................................11
Bluelinx Corp. v. Texas Const. Sys., Inc., 363 S.W.3d 623 (Tex. App.—Houston [14th Dist.] 2011, no pet.) ..................................................................................11, 12
City of Keller v. Wilson, 168 S.W.3d 802 (Tex.2005) ...............................................9 Forbes, Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167 (Tex. 2003) ............8, 9 Frost Nat’l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310 (Tex. 2005) .................11
Great Am. Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41 (Tex.1965) ..................................................................................................................9
Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929 (Tex.1952) ..............................9 Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118 (Tex. 1996)...........................10
In Re Polybutelene Plumbing Litig. v. Hoechst Celanese Corp., 23 S.W.3d 428 (Tex.App.-Houston [1st Dist.] 2000, no pet.) ..........................................................12
Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex.2009) ..................................................................................................................9
MMP, Ltd. v. Jones, 710 S.W.2d 59 (Tex.1986)........................................................9 Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517 (Tex. 1994)............11 Randall's Food Markets, Inc. v. Johnson, 891 S.W.2d 640 (Tex.1995) ....................9
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S. Cnty. Mut. Ins. v. Sur. Bank, N.A., 270 S.W.3d 684 (Tex. App.—Fort Worth 2008, no pet.).....................................................................................................passim
Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342 (Tex. 2006)....10
Taylor–Made Hose, Inc. v. Wilkerson, 21 S.W.3d 484 (Tex.App.-San Antonio 2000, pet. denied) .......................................................................................................9
Valence Operating Co. v. Dorsett, 164 S.W.3d 656 (Tex.2005) ...............................9 STATUTES AND RULES: PAGE NO: TEX. R. APP. P. 38.1 .................................................................................................. ii TEX. R. APP. P. 39 .................................................................................................. viii TEX. R. CIV. P. 166a ...................................................................................................9
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STATEMENT OF THE CASE
Nature of the Case: Breach of contract and quantum meruit arising from HNTB Corporation’s (“HNTB”)
requiring Crossland Acquisition, Inc.
(“Crossland”) to continue providing right-ofway acquisition and relocation services in connection a State government contract without payment. (CR 36-63) 1.
Style of the Case: Cause No. 2013-63341; Crossland Acquisition, Inc. vs. HNTB Corporation.
Trial Court: The 190th District Court of Harris County, Texas, the Honorable Patricia J. Kerrigan.
Trial Court’s Disposition: Both parties moved for summary judgment on Crossland’s breach of contract claims. (CR 66-1095). Subsequently, HNTB also filed a motion for summary judgment on Crossland’s quantum meruit claims. (CR 1801-2048).
Ultimately, the trial court granted summary judgment in HNTB’s favor as to Crossland’s breach of contract and quantum meruit claims.
(CR 1790; CR 2737).
1 “CR __” refers to a page number from the Clerk’s Record in this case.
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STATEMENT REGARDING ORAL ARGUMENT Appellant/Plaintiff does believe oral argument would be helpful to the Court.
The judgment appealed from is based on omissions of facts and legal matters in connection with a complex commercial contract and, given such, the matters presented herein require amplification for the court to understand the precise nature of the dispute. See TEX. R. APP. P. 39.
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ISSUES PRESENTED
I. Whether the trial court erred in ruling that the parties’ contract required Crossland Acquisition, Inc.’s completion of all services for all land parcels for a firm fixed price, despite plain contract language to the contrary.
ix
14-15-00463-CV
COURT OF APPEALS FOR THE
FOURTEENTH DISTRICT OF TEXAS Houston, Texas
CROSSLAND ACQUISITION, INC., Plaintiff - Appellant,
V.
HNTB CORPORATION,
Defendant - Appellee.
____________________________________________
APPELLANT’S BRIEF
____________________________________________
To The Honorable Fourteenth Court of Appeals:
Crossland requests that this Court reverse the trial court’s grant of summary judgment on its breach of contract and quantum meruit claims and render judgment on the contract interpretation issue presented herein. Alternatively, Crossland requests reverse and remand for further proceedings. In support thereof, Crossland would show the following:
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STATEMENT OF THE FACTS
On June 12, 2006, HNTB entered into a contract with the Texas Department of Transportation (“TxDOT”) in connection with the construction of transportation improvements along the US 290/Hempstead corridor, which extends from IH 610 to FM 2920. (CR 389-523). According to TxDOT, the construction of transportation improvements along the US 290/Hempstead corridor was a high-profile project. (CR 646; CR 799 at 233:9-233:18; see also CR 1007 at 78:20-79:21 and 80:9-80:20). This was also an extremely complex and unique project for TxDOT. (CR 653; CR 664 at 35:18-35:21; CR 710 at 218:19-220:24). Right-of-way acquisition and relocation services were a key component of HNTB’s contract with TxDOT. (CR 390). However, HNTB did not have the expertise in the State of Texas to handle those types of services. (CR 799 at 233:9-233:18; CR 1007 at 78:20-79:21 and 80:9-80:20). Consequently, and because Crossland had expertise in right-of-way acquisition and relocation within the State of Texas, HNTB contracted with Crossland to provide those services. (Id.).
HNTB’s contract with Crossland actually consisted of a master contract and multiple supplemental agreements thereto. (See CR 381-616). The master contract is the July 5, 2006 agreement between HNTB and Crossland (the “Master Agreement”), which incorporated all portions of HNTB’s contract with TxDOT that were “pertinent to [Crossland’s] responsibilities, compensation, and timing of Services and not in
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conflict with any provision” of the Master Agreement. (CR 381-548). The supplemental agreements referred to by the parties as “Task Orders” provided authority for Crossland to perform right-of-way acquisition and relocation services along the US 290/Hempstead corridor. (CR 381 (“Task orders shall be used to describe the parties’ mutual agreement on the scope of the Services, schedule, compensation and other particulars as stated therein.”); see also CR 550 and CR 595). While there were several Task Orders, those at issue in this appeal are the ones referred to by the parties as “Task Order 3” and “Task Order 4.” (See CR 550-616).
Task Orders 3 and 4 contained specific time limitations, i.e., they had termination dates. (CR 553-54; CR 556-57; CR 559; CR 561-62; CR 564-65; CR 569; CR 597; CR 600; CR 602; CR 605-06; CR 610; CR 613). The first line of Exhibit B to Task Order 3 states: “This task order is for the initial period from execution through September 30, 2011.” (CR 553). Exhibit B then repeats 11 times that the scope of services applied during “the initial period of this Task Order.” (CR 553-54; CR 556- 57; CR 559; CR 561-62; CR 564-65; CR 569). Likewise, Task Order 4 was from execution through June 30, 2012 (CR 613; see also CR 618), and Exhibit B thereto repeats 7 times that the scope of services applied during the “initial period of this Task Order.” (CR 597; CR 600; CR 602; CR 605-06; CR 610). Moreover, there was a supplemental agreement executed solely for the purpose of extending Task Order 3’s termination date. (CR 577).
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During the time limitations of Task Orders 3 and 4, Crossland was contractually obligated to provide “deliverables.” (CR 381 at “Article 4 – Scope of Services;” CR 550; CR 570; CR 595; CR 611; CR 851-52 at 48:6-48:21, 49:3-49:7 and 49:20-50:8). A “deliverable” is “a unit or increment of work required by the contract, including such items as goods, services, reports or documents.” (CR 1474). Crossland’s “deliverables” were monthly status reports and “budget projections and anticipated funding requirements every thirty (30) days and more frequently as requested by the State during this Task Order.” (CR 570; CR 611) (emphasis added). 2 These “deliverables” were the “foregoing obligations” Crossland had to perform in order to get paid under the contract. (CR 550; CR 595; CR 851 at 49:3-49:7 (“Yeah. I’m not sure. I know that the total – all the deliverables would have to be completed within that total dollar amount, the total scope – the total fee. But I’m not sure if it was --”)).
With respect to payment, Crossland was to be paid an hourly rate for each hour
2 The exception to this lies in Supplement 1 to Task Order 4. (CR 618-26; see also CR 1444-46). Supplement 1 to Task Order 4, which was the subject of the duress portion of Crossland’s claims (CR 46 at ¶ 26; CR 57-58 at ¶ 57), contains different “deliverables” and a different method of payment. (Compare CR 550, 570 and 575 with CR 618, 621, and 625; see also CR 1444-46). Due to these different “deliverables’ and different method of payment, for work under Supplement 1 to Task Order 4 (and only that supplement to that task order), Crossland was contractually required to complete all listed services for all parcels listed therein for the maximum amount set forth therein. (CR 509 at “Unit Cost;” CR 1510 at “Firm Fixed Price;” CR 618-26; see also CR 1444-46). While HNTB may try to suggest otherwise, this supplement: does not apply to Task Order 3 (CR 618); only applies to Task Order 4 after the date of its execution (id.); and its only relevance to this appeal is to help illustrate that, for the relevant portions of Task Orders 3 and 4, the parties’ contract did not require Crossland to complete all services for all parcels for the maximum amount set forth in the task orders. (Compare CR 550, 570 and 575 with CR 618, 621, and 625; see also CR 1444-46).
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worked. 3 (CR 511; CR 540; CR 550; CR 575; CR 587-88; CR 592-93; CR 595; CR 615-16). Task Order 3 stated:
In return for the performance of the foregoing obligations, HNTB shall pay to [Crossland] the maximum amount of $1,988,636.46, payable in accordance with Attachment E and E-1 of the Master Agreement and the attachment Exhibit D – Fee Schedule.
(CR 550). Task Order 4 was identical except for the amount of compensation. (CR 595). Exhibit D to the Task Orders and Attachment E to the Master Agreement each identified “specified rate” as the method of payment. (CR 511; CR 540; CR 550; CR 575; CR 587-88; CR 592-93; CR 595; CR 615-16). “Specified Rate” was defined as follows:
Payment shall be based on the actual hours worked multiplied by the specified rate for each type of labor plus other agreed to special direct cost items. The specified rate includes direct labor and indirect cost and fixed fee.
(CR 509).
While the task orders set forth a “maximum amount” to be received by Crossland in return for the “deliverables,” nothing contractually required Crossland to complete all services for all land parcels for that “maximum amount.” (See CR 381-
3 As indicated in note 1, the exception to this is Supplement 1 to Task Order 4. (CR 618-26; see also CR 1444-46). For work performed in connection with Supplement 1 to Task Order 4, Crossland was to be paid a firm fixed price for each indicated milestone it reached (“unit cost”). (Id.; CR 509).
6
616). 4 Nowhere does the parties’ agreement state that Crossland had to complete all services for all land parcels for the task orders’ “maximum amount.” (Id.). Rather, the contract explicitly states and contemplates that Crossland need not complete all services for all land parcels for the task orders’ “maximum amount.” (See CR 550; CR 554-55; CR 570; CR 595; CR 611; CR 851 at 49:3-49:7; see also CR 2453 at ¶¶ 6-7; CR 2456-64).
As set forth above, completion of all services for all land parcels was not a “deliverable.” (CR 550; CR 570; CR 595; CR 611; CR 851 at 49:3-49:7). In fact, there were no specific parcels identified in the “deliverables” or the fee schedules for the Task Orders. 5 (Id.; CR 575; CR 615-16; see also CR 2453 at ¶¶ 6-7; CR 2456-64). Further, the contract’s express language stated that Crossland need not complete all services for a task order within the specified time limits. (CR 554-55). For example, Task Order 3 stated:
The Services on this Task Order are generally for major elements during Preliminary and Final Design Development and many of these services have started in the previous Task Orders (Crossland Acquisition Task Order #1 and
4 Again, this is where Supplement 1 to Task Order 4 differs. Due to the changed language in Supplement 1 to Task Order 4 regarding deliverables and payment method, Supplement 1 to Task Order 4 set forth that, for the work performed under that supplement (and only that work), the “maximum amount” was the total amount due Crossland for all services for all land parcels listed therein. (CR 509 at “Unit Cost;” CR 618-26; CR 1510 at “Firm Fixed Price;” see also CR 1444-46). 5 By way of comparison, Supplement 1 to Task Order 4 did list specific land parcels in the “deliverables” and fee schedule. (CR 621; CR 625).
7
Crossland Acquisition Task Order #2) and/or will be completed or continued in subsequent Task Orders as deemed necessary by the State.
(Id.) (emphasis added). This is consistent with Crossland’s method of payment under the Task Orders. (CR 1511 at description of “Time and Material”). It is also consistent with the parties’ course of dealing whereby supplements were executed adding to the “maximum amount.” (CR 581; CR 590).
SUMMARY OF THE ARGUMENT
Did the parties’ contract require Crossland to complete all services for all land parcels for a firm fixed price? That was the central question before the trial court on HNTB’s motions for summary judgment, and it is the central question in this appeal. (See CR 66-77; CR 1790; CR 1801-1811; CR 2737). If the answer to this question is no, reversal and/or remand is required.
In its motion for summary judgment regarding Crossland’s breach of contract claims, HNTB alleged that the language of the parties’ agreement required Crossland to complete all services for all land parcels (i.e.¸ the alleged “foregoing obligations”) for a fixed sum (i.e., the “maximum amount”) that could not be increased (i.e., the changes clauses incorporated into the Master Agreement were not applicable to Crossland). (CR 66-77). 6 In its motion for summary judgment regarding Crossland’s
6 Crossland also filed for summary judgment on its breach of contract claims. (CR 335-1095). In that motion and its response to HNTB’s initial motion for summary judgment, Crossland argued that (CONT.)
8
quantum meruit claims, HNTB alleged that quantum meruit was unavailable because the services were covered by the parties’ contract (i.e., Crossland had to complete all services for all land parcels for the “maximum amount”). (CR 1801-11). Thus, in order to grant summary judgment as it did, the trial court’s answer to this central question was in the affirmative. 7 However, as set forth in more detail below, this is wholly based on an incomplete reading of the parties’ contract and renders multiple provisions in same meaningless. It also constitutes a redrafting of the terms of the parties’ agreement. This was improper.
STANDARD OF REVIEW
The appellate court must review the trial court's grant of summary judgment de novo. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848
the sums claimed were within the scope of the contract because of the contract’s changes clauses. (Id.; CR 1440-1709). In response, HNTB alleged that the changes clauses were not applicable to Crossland’s contract despite same being incorporated therein and previously utilized by the parties. (CR 66-323; CR 1162-1437). In order to grant summary judgment in HNTB’s favor on the contract claims, the trial court had to incorrectly find the changes clauses inapplicable to Crossland’s contract. (Id.; CR1790). Therefore, under the trial court’s ruling, once Crossland was outside of the contract’s time limits or maximum amount, it was outside the scope of the contract. Hence, Crossland’s quantum meruit claims. (See CR 2051-2661). 7 HNTB also brought a no evidence motion for summary judgment in response to Crossland’s quantum meruit claims. However, despite Crossland’s production of significantly more than a scintilla of evidence (see CR 2051-2661), HNTB did not provide a response that could overcome all of that evidence in a way that would justify the grant of a no evidence summary judgment motion. (See CR 2663-2729); accord Forbes, Inc. v. Granada Biosciences, Inc., 124 S.W.3d 167, 172 (Tex. 2003). Consequently, the trial court’s quantum meruit judgment was clearly based on HNTB’s claim that the services were within the scope of the contract. To the extent it was not, as can be seen from this brief and Crossland’s brief below, any grant of a no evidence summary judgment would have been improper. See Taylor–Made Hose, Inc. v. Wilkerson, 21 S.W.3d 484, 488 (Tex.App.-San (CONT.)
9
(Tex.2009); Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005). To prevail on a motion for summary judgment, a party 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. 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 Food Markets, 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 material fact are resolved against the movant, a court 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); see also Fielding, 289 S.W.3d at 848; see also City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.2005). The court is 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).
The court's primary concern when interpreting a contract is to ascertain and give effect to the intent of the parties as expressed in the contract. Seagull Energy E & P,
Antonio 2000, pet. denied); accord Forbes, Inc., 124 S.W.3d at 172.
10
Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006). When construing a written contract, the court ascertains the true intentions of the parties as expressed in the instrument. Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). The court presumes that the parties intended for every clause to have some effect. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). Put another way, “[t]o 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.” Coker, 650 S.W.2d at 393 (emphasis in original). “No single provision taken alone will be given controlling effect; rather, all the provisions must be considered with reference to the whole instrument.” Id. And courts will not construe contracts to produce an absurd result when a reasonable alternative construction exists. S. Cnty. Mut. Ins. v. Sur. Bank, N.A., 270 S.W.3d 684, 689 (Tex. App.—Fort Worth 2008, no pet.).
Whether a contract is ambiguous is a question of law to be determined “by looking at the contract as a whole in light of the circumstances present when the contract was entered.” Coker, 650 S.W.2d at 394. If the written instrument is so worded that it can be given a definite or certain legal meaning, then the contract may be construed as a matter of law. Seagull Energy, 207 S.W.3d at 345.
A contract is ambiguous when its meaning is susceptible to more than one reasonable interpretation. Frost Nat’l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310,
11
312 (Tex. 2005). Only when a contract is first determined to be ambiguous may the courts consider the parties’ interpretation and admit extraneous evidence to determine the true meaning of the instrument. Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1994). A patent ambiguity is evident on the face of the contract, while a latent ambiguity arises when a contract, unambiguous on its face, is applied to the subject matter with which it deals, and an ambiguity appears by reason of some collateral matter. Id. When a contract is found to be ambiguous, the parties’ intent is a determination for the fact finder. Coker, 650 S.W.2d at 395. “When a contract contains an ambiguity, the granting of a motion for summary judgment is improper because the interpretation of the instrument becomes a fact issue.” Id. at 394.
The right to recover in quantum meruit is based upon a promise implied by law to pay for beneficial services rendered and knowingly accepted. Black Lake Pipe Line Co. v. Union Constr. Co., 538 S.W.2d 80, 86 (Tex.1976), overruled on other grounds by Sterner v. Marathon Oil Co., 767 S.W.2d 686 (Tex.1989). A party may recover in quantum meruit when there is no express contract covering the services furnished. Id.; Bluelinx Corp. v. Texas Const. Sys., Inc., 363 S.W.3d 623, 627 (Tex. App.—Houston [14th Dist.] 2011, no pet.). However, the existence of an express contract does not preclude recovery in quantum meruit for the reasonable value of services rendered and accepted which are not covered by the contract. Black Lake, 538 S.W.2d at 86; Beverick v. Koch Power, Inc., 186 S.W.3d 145, 154 (Tex. App.—Houston [1st Dist.]
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2005, pet. denied); Bluelinx, 363 S.W.3d at 627.
ARGUMENT
I. The trial court erred in ruling that the parties’ contract required Crossland’s completion of all services for all land parcels for a firm, fixed price, despite plain contract language to the contrary.
As a reading of the entirety of Crossland’s contract with HNTB makes clear, Crossland was not required to complete all services under Task Orders 3 and 4 for all parcels for the “maximum amount.” (See CR 381-616). To find otherwise impermissibly ignores multiple provisions in the parties’ agreement and renders them meaningless. Coker, 650 S.W.2d at 393; S. Cnty. Mut. Ins., 270 S.W.3d at 689. Moreover, finding otherwise constitutes an impermissible redrafting and/or variance of the contract’s explicit terms. In Re Polybutelene Plumbing Litig. v. Hoechst Celanese Corp., 23 S.W.3d 428, 437 (Tex.App.-Houston [1st Dist.] 2000, no pet.); American Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 162 (Tex. 2003).
As the contract makes clear, Crossland’s “deliverables” under Task Orders 3 and 4 consisted of monthly status reports and “budget projections and anticipated funding requirements every thirty (30) days and more frequently as requested by the State during this Task Order.” (CR 570; CR 611) (emphasis added). These “deliverables” were Crossland’s “foregoing obligations” under the contract. (CR 381 at “Article 4 – Scope of Services;” CR 550; CR 570; CR 595; CR 611; CR 851-52 at 48:6-48:21, 49:3-49:7 and 49:20-50:8; see also CR 1474). HNTB’s own officers agree
13
with this fact. (CR 851-52 at 48:6-48:21, 49:3-49:7 and 49:20-50:8). Nothing herein suggests that the completion of all services for all parcels within the “maximum amount” was a requirement. (CR 570; CR 611). To the contrary, the primary “deliverable” of delivering “budget projections and anticipated funding requirements” counsels squarely against such a reading. Accord Coker, 650 S.W.2d at 393; S. Cnty. Mut. Ins., 270 S.W.3d at 689.
If HNTB wanted to require the completion of all services for all parcels as the “foregoing obligations,” it would have done so because that is what it did in instances where such was required. (Compare CR 550, 570 and 575 with CR 618, 621, and 625; see also CR 1444-46). More specifically, HNTB would have removed the references to budget projections and anticipated funding requirements as a “deliverable.” (Id.). HNTB would have also made specific reference to the land parcels at issue as part of the “deliverables.” (Id.). As set forth below, other language in the contract similarly (and explicitly) demonstrates this fact even further.
The task orders make clear that specific services and parcels would be assigned at a later date and were subject to change. (See CR 550; CR 554-55; CR 570; CR 595; CR 611; CR 851 at 49:3-49:7; see also CR 2453 at ¶¶ 6-7; CR 2456-64). For example, they say that “[t]he State, at its option, may elect to expand, reduce or delete the extent of each work element . . . .” (CR 554; CR 597) (emphasis added). Exhibit B to Task Order 3 repeats 10 times that the services only apply to “select limited parcels as
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assigned along US 290.” (CR 562-65; CR 567; CR 569) (emphasis added). It also says that “[t]here is no guarantee that any or all of the services described in this Task Order will be assigned by the State and/or HNTB during the term of this Task Order.” (CR 555) (emphasis added). Moreover, Task Order 3 specifically states that “many of these services have started in previous Task Orders” and/or they “will be completed or continued in subsequent Task Orders.” (CR 554-55) (emphasis added). To hold that Crossland has to complete all services for all land parcels in return for a fixed sum that cannot be increased, as the trial court did here, utterly ignores these provisions and impermissibly renders them meaningless. Accord Coker, 650 S.W.2d at 393. It also leads to an absurd result. Accord S. Cnty. Mut. Ins., 270 S.W.3d at 689.
Again, the task orders did not specify the number or type (commercial, residential, land-only, multi-family dwelling, etc.) of parcels on which Crossland was required to perform right-of-way and relocation services. (CR 550; CR 570; CR 575; CR 595; CR 611; CR 615-16; CR 851 at 49:3-49:7; see also CR 2453 at ¶¶ 6-7; CR 2456-64). Rather, they only say that parcels may be assigned by the State or HNTB at their discretion, and the work may be expanded. (Id.). Indeed, HNTB did just this, i.e., assigned parcels separate from, and after execution, of the task orders. (CR 2453 at ¶¶ 6-7; CR 2456-58). The task orders had set time limits, i.e., termination dates. (CR 553-54; CR 556-57; CR 559; CR 561-62; CR 564-65; CR 569; CR 597; CR 600;
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CR 602; CR 605-06; CR 610; CR 613). Further, HNTB alleged (and the trial court presumably accepted) that, despite being incorporated into Crossland’s Master Agreement and same having been utilized in other supplements, the changes clauses were not applicable to Crossland’s contract. (See supra at n.6) Therefore, under the trial court’s interpretation, HNTB could assign an indefinite number of parcels to Crossland, and Crossland would have to complete the services for all of the parcels at its own cost, and perhaps beyond the termination date. This is an absurd result. See S. Cnty. Mut. Ins., 270 S.W.3d at 689.
Finally, the trial court’s interpretation renders the payment terms in Crossland’s contract with HNTB meaningless. The task orders specifically provided that the “maximum amount” was “payable in accordance with” Attachment E to the Master Agreement Exhibit D to the task orders. (CR 550; CR 595). Attachment E to the Master Agreement and Exhibit D to the task orders identified “specified rate” as the method of payment. (CR 511; CR 540; CR 550; CR 575; CR 587-88; CR 592-93; CR 595; CR 615-16). “Specified Rate” was defined in Attachment E to the Master Agreement as follows:
Payment shall be based on the actual hours worked multiplied by the specified rate for each type of labor plus other agreed to special direct cost items. The specified rate includes direct labor and indirect cost and fixed fee.
(CR 509). It also provided that “Contract Rates are to be billed” and that the rates are
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not subject to audit. (Id.). Yet, under the trial court’s interpretation, Crossland would only be paid the contract rates up to the “maximum amount,” and, afterwards, Crossland must complete the remaining services for all parcels for free.
Crossland cannot be paid “in accordance with” Attachment E or Exhibit D to the task orders if it is to work for free after reaching the “maximum amount.” Thus, the trial court’s interpretation also renders the “specified rate” provisions in Crossland’s contract meaningless and, again, leads to an absurd result. Accord Coker, 650 S.W.2d at 393; S. Cnty. Mut. Ins., 270 S.W.3d at 689. This is especially true given that, where Crossland was required to complete all services for all parcels within the “maximum amount,” the Master Agreement allowed for alternative payment methods meant to achieve same, and the parties’ actually utilized them. (Compare CR 550, 570 and 575 with CR 618, 621, and 625; see also CR 1444-46).
In sum, all of the foregoing demonstrates that the trial court’s interpretation impermissibly rendered numerous contractual provisions meaningless, rewrites the parties’ agreement and produces absurd results. Alternatively, and at a minimum, the foregoing demonstrates that Crossland’s interpretation of the agreement is reasonable. This is especially true given that same is in line with the general interpretation of other contracts containing similar “deliverables” and methods of payment. (CR 1511 at description of “Time and Material”). Either way, it was improper for the trial court to grant summary judgment. Accord Coker, 650 S.W.2d at 393-94; S. Cnty. Mut. Ins.,
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270 S.W.3d at 689.
PRAYER
For the foregoing reasons, the Appellant respectfully requests that this Court reverse the trial court’s judgment and render all questions of law in its favor and/or remand this matter back to the trial court for further proceedings.
Respectfully submitted,
_____________________________________
Bryant S. Banes
State Bar No. 24035950
Sean D. Forbes
State Bar No. 24040916
Stormy N. Mayfield
State Bar No. 24067656
Neel, Hooper & Banes, P.C.
1800 West Loop South, Suite 1750 Houston, Texas 77027
713-629-1800
713-629-1812 (Fax)
Attorneys for Crossland Acquisition, Inc.
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CERTIFICATE OF SERVICE
The undersigned certifies that a true and correct copy of Appellant’s Brief has been forwarded to counsel of record for HNTB Corporation, Appellee/Defendant, via email, on this 18th day of November, 2015.
P. Randall Crump PCRUMP@shb.com
____________________________________
Bryant S. Banes
CERTIFICATE OF COMPLIANCE This is to certify that Appellant’s Brief contains 4,313 words.
____________________________________
Bryant S. Banes
APPENDIX
Order on Defendant HNTB Corporation’s Traditional Motion for Summary Judgment Signed on January 20, 2015 ..................................................................... A Amended Order on Summary Judgment Signed on February 16, 2015................... B Final Judgment Signed on May 1, 2015 ................................................................... C Master Agreement between HNTB Corporation and Consultation ......................... D Task Order 3.............................................................................................................. E Supplemental Agreement 1 to Task Order 3 ............................................................ F Supplemental Agreement 2 to Task Order 3 ............................................................ G Supplemental Agreement 3 to Task Order 3 ............................................................ H Task Order 4............................................................................................................... I Supplemental Agreement 1 to Task Order 4 ............................................................. J
A
B
C
D
E
F
G
H
I
J