Fawcett, Ltd. v. Idaho Northern & Pacific Railroad Co.

293 S.W.3d 240, 2009 Tex. App. LEXIS 5721, 2009 WL 1349988
CourtCourt of Appeals of Texas
DecidedJuly 23, 2009
Docket11-07-00154-CV
StatusPublished
Cited by13 cases

This text of 293 S.W.3d 240 (Fawcett, Ltd. v. Idaho Northern & Pacific Railroad Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fawcett, Ltd. v. Idaho Northern & Pacific Railroad Co., 293 S.W.3d 240, 2009 Tex. App. LEXIS 5721, 2009 WL 1349988 (Tex. Ct. App. 2009).

Opinions

OPINION

TERRY McCALL, Justice.

This case involves the construction of a real estate sales contract. Fawcett, Ltd. (Fawcett) agreed to sell its ranch to Idaho Northern & Pacific Railroad Company (Railroad). Because the parties were not certain as to the exact size of the ranch, they provided in the sales contract that either party could terminate the contract without penalty if the actual acreage contained in the survey turned out to vary by more than 10% (more or less) from 5,000 acres. The sales contract had an Exhibit A that included legal descriptions for the ranch’s fourteen tracts that were to be surveyed; the new survey would replace Exhibit A and be titled Exhibit A-l. Unfortunately, the surveyor who gave Faw-cett and the Railroad the estimate of 5,000 acres made a mistake in calculating the 5,000 acres.1 His subsequent survey determined the acreage to be 5,531.6 acres. Fawcett terminated the contract.

The Railroad sued Fawcett under various theories with the goal of obtaining specific performance or partial specific performance. Although Fawcett contended that its termination was proper under the strict terms of the contract, Fawcett also counterclaimed for rescission in the alternative. Fawcett’s counterclaim was based on the theory of a mutual mistake about the factual assumption of the ranch’s size of 5,000 acres. Following a bench trial, the trial court reformed the terms of the contract and entered judgment directing Fawcett to convey to the Railroad 5.401.6 acres at $950 per acre for $5,131,520. To avoid the 10% termination provision, the trial court reduced the 5.531.6 acres by subtracting the Buzbee Tract (73 acres) and the Goundie Tract (57 acres) because it found that Fawcett did not have good and marketable title to those tracts. But the sales contract did not require the survey to include only land to which Fawcett held good and marketable title.2 Fawcett appealed. We reverse and render judgment for Fawcett.

[244]*244 Interpretation of Contracts

When construing a contract, the court’s primary concern is to give effect to the written expression of the parties’ intent. Frost Nat’l Bank v.L & F Distribs., Ltd., 165 S.W.3d 310, 311-12 (Tex.2005); Ideal Lease Serv., Inc. v. Amoco Prod. Co., 662 S.W.2d 951, 953 (Tex.1983); In re Great Western Drilling, Ltd., 211 S.W.3d 828, 834 (Tex.App.-Eastland 2006, orig. proceeding). All parts of the contract are read together to ascertain the agreement of the parties. Frost Nat’l Bank, 165 S.W.3d at 312; Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex.1994); Royal Indem. Co. v. Marshall, 388 S.W.2d 176, 180 (Tex.1965). We examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that no provision will be rendered meaningless. In re Great Western, 211 S.W.3d at 834. The sales contract in this case is unambiguous and will be construed as a matter of law. See J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex.2003); Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983).

The Sales Contract

The first portion of the sales contract between Fawcett and the Railroad was a standard Texas Real Estate Commission Farm and Ranch Contract. The parties attached a negotiated five-page addendum as Exhibit C. Exhibit C included twelve paragraphs and provided that the terms of the addendum would control if there were any conflicting terms contained in the standard portion of their contract. They signed the sales contract on March 18, 2002.

Fawcett bought the ranch without a survey in 1997 from the Waddell family. The Waddell family believed that the ranch contained approximately 5,500 acres. Fawcett then carved out a 140-acre tract and conveyed it to Roger Fawcett, individually. That tract was not to be included in the sale to the Railroad; however, Paragraph 8 of Exhibit C gave the Railroad a right of first refusal if Roger Fawcett decided to sell it later. Roger Fawcett testified that, when he listed the Fawcett Ranch with Jane Morgan, he told her that the acreage was between 5,300 and 5,400 acres. The Railroad’s initial offer to purchase the ranch contained the figure of 5,370 acres, which was the number of acres Fawcett used to market the ranch. Rejecting that initial offer, Fawcett notified the Railroad that preliminary discussions with the surveyor indicated “a total of 5,000 acres +/-, instead of the 5,300 previously thought.” Actually, the surveyor had calculated 4,950 acres.

Jesse G. Lawson, a registered land surveyor, had begun a survey for Fawcett in 2001, but stopped when an unrelated deal to sell the ranch fell through. Fawcett and the Railroad ultimately agreed that Lawson should finish his survey and that they would use his survey as the conclusive expression of the acreage to be conveyed.

Paragraph 3D of the sales contract provided that the estimated sales price of $4,750,000 (5,000 acres times $950 per acre) set forth in Paragraph 3A would be adjusted based on the survey. Paragraph 3D also provided a right of termination to either party if the adjustment exceeded ten percent:

The Sales Price will be adjusted based on the survey required by Paragraph 6B, and the number of acres over or under 5000 acres will be multiplied by $950.00 per acre. The result thereof will be added to or subtracted from the [245]*245Sales Price, and the cash amount set out in 3A will be adjusted accordingly; however, if the amount set out in 3A is to be adjusted by more than 10%, either party may terminate this contract and the earnest money will be refunded to Buyer.

In Exhibit C, the parties agreed on how the survey would be done and that the survey would be conclusive as to the area to be conveyed. The addendum provided:

2. The Survey to be provided pursuant to the terms of the Contract shall be staked on the ground and show all acreage contained in the property. Such survey shall be a perimeter survey.... The acreage determined by the Survey shall be conclusive as to the area to be conveyed for all purposes....
3. The Parties agree that the metes and bounds description of the Survey shall be substituted for the description of the Property contained in the TREC Farm and Ranch Contract and shall become the legal description of the Property being conveyed pursuant to the terms of the Contract.

Attached as Exhibit C-l to the sales contract is a letter dated June 22, 2001, from Lawson to Roger Fawcett setting forth the project:

The land survey that you requested would include the following:
1. A plat showing the boundary lines of your property as described in your deed and as found on the ground. The plat will show any major differences in the location of the existing fence lines relative to the true boundary lines and it will show existing building and major cross fences.

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Bluebook (online)
293 S.W.3d 240, 2009 Tex. App. LEXIS 5721, 2009 WL 1349988, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fawcett-ltd-v-idaho-northern-pacific-railroad-co-texapp-2009.