Reytec Construction Resources, Inc. v. Baptist Hospitals of Southeast Texas ( 2016 )

In The
Court of Appeals
Ninth District of Texas at Beaumont
_________________
NO. 09-15-00085-CV
_________________
REYTEC CONSTRUCTION RESOURCES, INC., Appellant
V.
BAPTIST HOSPITALS OF SOUTHEAST TEXAS, Appellee
________________________________________________________________________
On Appeal from the 60th District Court
Jefferson County, Texas
Trial Cause No. B-193,365
________________________________________________________________________
MEMORANDUM OPINION
Reytec Construction Resources, Inc. (“Reytec”) appeals the trial court’s
amended final judgment granting summary judgment in favor of Baptist Hospitals
of Southeast Texas (the “Hospital”). Reytec presents four issues on appeal.
Because we conclude that Reytec raised a genuine issue of material fact precluding
summary judgment on the Hospital’s breach of contract claim, we reverse the trial
court’s judgment and remand this cause for further proceedings.
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I. Background
Reytec is in the underground utility and road-construction business. The City
of Beaumont hired Reytec to perform a road-construction project, which entailed
excavation, removal, and replacement of an old roadway and everything beneath
the roadway, including the storm drainage system and waterlines. In connection
with this project, Reytec entered into a Lease Agreement (the “Lease”) with the
Hospital, whereby Reytec leased property (the “Property”) from the Hospital that
was located near Reytec’s construction site to serve as a location for it to store its
construction equipment. The Lease provided that Reytec could use the Property
“solely for the purpose of a construction equipment storage and material laydown
yard.” Relevant to the issues on appeal, Paragraph 12 of the Lease provides:
“SURRENDER OF PREMISES. Upon the expiration of the term hereof, Tenant
shall surrender the Premises in as good a state and condition as they were at the
commencement of this Lease Agreement, reasonable use and wear and tear thereof
and damages by the elements excepted.” The Lease was executed by David
Parmer, the CEO of the Hospital and by Greg Reyes, Reytec’s owner and
President.
In connection with the road-construction project, Reytec also required a
place to deposit the materials it excavated, including concrete, dirt, and other
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materials. During a preconstruction meeting with the Hospital, Reytec’s project
manager and general superintendent, Thomas Gill, asked the Hospital if it wanted
the dirt from the excavation of the road. At first the Hospital declined Gill’s offer,
but later, Jessie Deville, the Administrative Director of Facilities for the Hospital,
informed Gill that the Hospital did want the dirt to use in a future Hospital project.
On March 22, 2010, Reytec and the Hospital entered into a “Dump Contract[.]”The
relevant portion of the Dump Contract provides:
I acknowledge by my signature below that I accept delivery,
possession, and responsibility for excavated material as is delivered to
[the Property] by [Reytec] for the sum of $00.00 per load for a total of
$00.00. I further acknowledge that [Reytec] is only obligated to stock-
pile material to allow for it to be mowed. Any surveying of property
or land permits are the responsibility of the owner or representative of
property where excavated material is to be delivered.
Deville signed the Dump Contract in his official capacity as the Hospital’s
Administrative Director of Facilities.
There is evidence in the record to support that the Hospital gave Reytec
access to the Property to start delivering excavated materials shortly after the
Hospital entered into the Dump Contract with Reytec. But, approximately ten
months later, on January 20, 2011, Deville asked Gill to remove the excavated
materials from the Property. At that time, Gill reminded Deville that under the
Dump Contract the excavated materials were the Hospital’s responsibility but gave
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Deville an estimate on what Reytec would charge the Hospital to remove the
materials.
The Lease term was scheduled to end February 28, 2011. The Hospital
decided not to renew the Lease but agreed to a short lease extension to allow
Reytec time to procure a new property. After securing a new property to serve as
its laydown yard, Reytec began removing its construction equipment from the
Property. On March 7, 2011, the Hospital’s attorney sent Reytec a letter
threatening to “take immediate steps to have [Reytec] evicted” unless Reytec
removed its equipment and the excavated materials from the Property. Reytec
eventually removed all of its equipment but did not remove the excavated
materials. After Reytec left the Property, Deville obtained quotes from two other
companies to have the excavated materials removed. The Hospital secured the
services of AAA Floodmasters and paid $100,000 to remove the excavated
materials from the Property.
On October 17, 2012, the Hospital filed suit against Reytec, asserting claims
for breach of contract based on the Lease. The Hospital amended its petition and
asserted additional claims for breach of the Lease and also asserted an alternative
claim for breach of contract based on the Dump Contract. The Hospital sought to
recover the cost of removing the excavated materials from the Property, restoring
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the Property to its pre-Lease condition, and claimed damages for diminished
market value of the Property and the “loss of potential sale(s) of the [Property.]”
The Hospital further sought attorney’s fees and its alleged costs associated with
evicting Reytec from the Property.
Reytec filed a general denial of the Hospital’s allegations and asserted
various affirmative defenses. Relevant to the issues on appeal, Reytec alleged that
(1) the Hospital waived its right to assert its claims regarding the excavated
materials through execution of the Dump Contract, (2) the Hospital released
Reytec from all obligations or responsibilities concerning the excavated materials,
and (3) the Dump Contract served as a modification of the Lease thereby relieving
Reytec of any obligations and duties under the Lease regarding the excavated
materials.
On November 14, 2014, the Hospital filed a second amended traditional and
no-evidence motion for summary judgment. Therein, the Hospital sought summary
judgment on its claims for breach of the Lease, breach of the Dump Contract, and
Reytec’s affirmative defenses. On December 15, 2014, the trial court granted the
Hospital’s motions for summary judgment in their entirety, and awarded the
Hospital $100,000 in actual damages. The trial court also generally awarded the
Hospital reasonable and necessary costs and attorney’s fees and pre-and post-
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judgment interest. On February 19, 2015, the trial court amended its final judgment
to include an award of $94,582.85 in attorney’s fees, $3,590.64 in taxable costs,
and $10,833.33 in pre-judgment interest. The trial court also awarded the Hospital
conditional appellate attorney’s fees, costs, and interest. Reytec appealed the trial
court’s judgment.
II. Standard of Review
We review a trial court’s grant of a motion for summary judgment de novo.
Buck v. Palmer, 381 S.W.3d 525, 527 (Tex. 2012); Travelers Ins. Co. v. Joachim,
315 S.W.3d 860, 862 (Tex. 2010). A no-evidence motion for summary judgment
under Rule 166a(i) must challenge at least one specific element of the opponent’s
claim or defense on which the opponent will have the burden of proof at trial. Tex.
R. Civ. P. 166a(i). The opponent must then present summary judgment evidence
raising a genuine issue of material fact to support the challenged elements. Id. “The
court must grant the motion unless the respondent produces summary judgment
evidence raising a genuine issue of material fact” on the challenged elements. Id. A
genuine issue of material fact is raised when the nonmovant produces more than a
scintilla of evidence establishing the existence of the challenged element. Fort
Worth Osteopathic Hosp., Inc. v. Reese, 148 S.W.3d 94, 99 (Tex. 2004).
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To prevail on a traditional motion for summary judgment, a movant must
prove that there is no genuine issue regarding any material fact and that it is
entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); Little v. Tex. Dep’t
of Criminal Justice, 148 S.W.3d 374, 381 (Tex. 2004). A matter is conclusively
established if reasonable people could not differ as to the conclusion to be drawn
from the evidence. See City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005).
When a party moves for summary judgment on a claim for which it bears the
burden of proof, the party must show it is entitled to prevail on each element of its
cause of action. See Parker v. Dodge, 98 S.W.3d 297, 299 (Tex. App.—Houston
[1st Dist.] 2003, no pet.). The party meets this burden if it produces evidence that
would be sufficient to support an instructed verdict at trial. Id.
If the movant satisfies this burden, then the burden shifts to the nonmovant
to raise a genuine issue of material fact precluding summary judgment. Centeq
Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995). To defeat a motion for
summary judgment by raising an affirmative defense, the nonmovant must do more
than just plead the affirmative defense. Lunsford Consulting Grp., Inc. v. Crescent
Real Estate Funding VIII, L.P., 77 S.W.3d 473, 475 (Tex. App.—Houston [1st
Dist.] 2002, no pet.). The nonmovant must come forward with evidence sufficient
to raise a fact issue on each element of its affirmative defense. Brownlee v.
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Brownlee, 665 S.W.2d 111, 112 (Tex. 1984); Anglo-Dutch Petrol. Int’l, Inc. v.
Haskell, 193 S.W.3d 87, 95 (Tex. App.—Houston [1st Dist.] 2006, pet. denied).
In reviewing both a traditional and no-evidence summary judgment, we
consider the evidence in the light most favorable to the nonmovant. See Mann
Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.
2009); Smith v. O’Donnell, 288 S.W.3d 417, 424 (Tex. 2009). We credit evidence
favorable to the nonmovant if a reasonable fact finder could, and we disregard
contrary evidence unless a reasonable fact finder could not. See Mann Frankfort,
289 S.W.3d at 848.
Generally, when the trial court does not specify the grounds for its ruling, as
is the case here, we will affirm the summary judgment if any of the theories
advanced by the motion are meritorious. See State v. Ninety Thousand Two
Hundred Thirty-Five Dollars & No Cents in U.S. Currency, 390 S.W.3d 289, 292
(Tex. 2013); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 216
(Tex. 2003). The Hospital advanced numerous grounds in its motions for summary
judgment; however, the Hospital abandoned all but one of those grounds on
appeal. In its brief, the Hospital argues: “[S]ummary judgment was proper, strictly
based upon its claim of Reytec’s breach of section 12 of the Lease. In this appeal[,]
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the Hospital does not claim that the summary judgment was based upon any other
ground set forth in its Motions.” The Hospital further argues:
Reytec devotes about one-half of its Brief to its defense of the
Hospital’s claims in its motions for summary judgment for: (1)
breaches of the Lease Agreement other than Reytec’s failure to return
the premises to their pre-lease condition . . . and (2) breaches of the
Dump [C]ontract . . . . The Hospital will not respond to those points
because of its contention that the summary judgment was absolutely
correct in sustaining the Hospital’s claim of breach of the Lease by
reason of Reytec’s failure to return the premises to its pre-lease
condition.
Because the Hospital has abandoned these grounds on appeal, we do not address
them or Reytec’s responses thereto in this appeal. See State Farm Fire & Cas. Co.
v. S.S., 858 S.W.2d 374, 384 n.2 (Tex. 1993) (Gonzalez, J., dissenting) (stating that
“if a [ground] was abandoned or otherwise withdrawn, it would be improper for
the appellate court to render judgment upon it”); Wojcik v. Wesolick, 97 S.W.3d
335, 336–37 (Tex. App.—Houston [14th Dist.] 2003, no pet.) (holding that the
court of appeals would not address summary judgment ground abandoned on
appeal); Martin v. Martin, Martin & Richards, Inc., 991 S.W.2d 1, 4 n.1 (Tex.
App.—Fort Worth 1997) (noting that appellees abandoned summary judgment
ground of collateral estoppel by stating in their appellate brief that “they do not
rely upon that doctrine”), rev’d on other grounds, 989 S.W.2d 357 (Tex. 1998).
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III. Breach of Contract
To prevail on a breach of contract claim, a plaintiff must prove (1) the
existence of a valid contract; (2) the plaintiff’s performance or tender of
performance; (3) the defendant’s breach; and (4) the plaintiff’s damages resulting
from the breach. See Bank of Tex. v. VR Elec., Inc., 276 S.W.3d 671, 677 (Tex.
App.—Houston [1st Dist.] 2008, pet. denied); Sullivan v. Smith, 110 S.W.3d 545,
546 (Tex. App.—Beaumont 2003, no pet.). “A breach of contract occurs when a
party fails to perform an act that it has expressly or impliedly promised to
perform.” Case Corp. v. Hi-Class Bus. Sys. of Am., Inc., 184 S.W.3d 760, 769–70
(Tex. App.—Dallas 2005, pet. denied).
The Hospital contends that it conclusively established its claim that Reytec
breached Paragraph 12 of the Lease when Reytec “admitted failure to ‘surrender
the Premises in as good a state and condition as they were at the commencement of
this Lease Agreement, reasonable wear and tear thereof and damages by the
elements except.” Reytec does not dispute that it left the excavated materials on the
Property at the end of the Lease. Rather, Reytec contends that it was no longer
obligated under the Lease or was otherwise excused from removing the excavated
materials because the parties had entered into the Dump Contract, which altered
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Reytec’s obligations under the Lease. Thus, the real point of contention between
the parties is how, if at all, the Dump Contract affects the terms of the Lease.
According to the Hospital, the Dump Contract did not modify the Lease, but
rather the Dump Contract was abrogated by Paragraph 24 of the Lease. Paragraph
24 provides that the Lease “contains the entire agreement between the parties” and
that it can only be modified “through a written amendment signed by all of the
parties hereto.” The Hospital contends that the Dump Contract could not have
modified the Lease because it was entered into before the Lease was formally
executed by the parties. The Hospital argues that instead, the Dump Contract
“merged into the [Lease] and was of no further force and effect when the [Lease]
was signed.”
According to Reytec, the Dump Contract relieved Reytec of the obligation to
remove the excavated materials from the Property by modifying the terms of the
Lease, and that by entering into the Dump Contract, the Hospital waived its right to
complain about the excavated materials and released Reytec of any obligations
regarding the materials left on the Property. Reytec argues that the trial court erred
in granting summary judgment because there remain material fact issues regarding
its affirmative defenses of modification, release, and waiver. Reytec contends that
the Dump Contract modified the Lease by expressly allowing Reytec to stockpile
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excavated materials on the Property during the Lease term and in relieving Reytec
of any obligation to remove the materials at the end of the Lease. To properly
analyze this dispute, we must first examine the terms of the Lease and the Dump
Contract. Then, we must consider all of the summary judgment evidence in a light
most favorable to the nonmovant Reytec to determine whether there is a genuine
issue of material fact regarding the parties’ intent to modify or otherwise alter their
respective obligations under the Lease.
A. Contract Interpretation
Our primary concern in construing a lease contract is to ascertain the true
intent of the parties. See Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of
Am., 341 S.W.3d 323, 333 (Tex. 2011). In so doing, “‘we must 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. (quoting
J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003)). To understand
the parties’ intent, we must examine the agreement as a whole in light of the
circumstances present at the time when the parties entered into the agreement.
Anglo-Dutch Petroleum Int’l, Inc. v. Greenberg Peden, P.C., 352 S.W.3d 445,
449–51 (Tex. 2011). “Facts and circumstances that may be considered include the
commercial or other setting in which the contract was negotiated and other
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objectively determinable factors that give context to the parties’ transaction.”
Americo Life, Inc. v. Myer, 440 S.W.3d 18, 22 (Tex. 2014). The parol-evidence
rule does not prohibit considering surrounding “facts and circumstances that
inform the contract text and render it capable of only one meaning.” Id. No single
provision taken alone should control—instead, we must consider all provisions
with reference to the entire agreement. J.M. Davidson, 128 S.W.3d at 229. We also
consider the particular business activity to be served, and when possible and
proper, we avoid a construction that is unreasonable, inequitable, and oppressive.
Frost Nat’l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310, 312 (Tex. 2005)
(quoting Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 530 (Tex. 1987)). We
begin our analysis with the Lease’s express language. See Italian Cowboy, 341
S.W.3d at 333.
The opening statement of the Lease provides, “THIS LEASE
AGREEMENT . . . made and entered into this ______________ day of
_______________, 2010, by and between . . . .” The parties never filled in the
blanks to reflect the date in which the Lease was “entered into[.]” The plain
language of the Lease reflects that it is for a term of one year—to begin February
28, 2010 and terminate February 28, 2011. The Lease specifies that it “shall
commence on February 28, 2010” and then defines the term “Commencement
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Date” as used in the Lease to mean “February 28, 2010.” The Lease provides that
rather than making rent payments to the Hospital, Reytec would “furnish all labor,
materials, supplies, tools, equipment, supervision, utilities and all else necessary”
to construct a sidewalk for the Hospital. According to the terms of the Lease,
Reytec would complete this work by May 3, 2010. The Lease was executed by
both parties; however, the execution paragraphs of the Lease are not dated.
Our review of the Lease reflects that it does not provide that the
commencement date is determined or otherwise affected by the date the Lease was
actually executed by the parties. The Lease uses the commencement date as the
relevant date for the parties’ obligation in Paragraph 12, which specifies that
Reytec is to return “the Premises in as good a state and condition as they were at
the commencement of this Lease[.]”
The summary judgment record includes the deposition transcripts of Thomas
Gill and Thomas “Rusty” Pena. As explained above, Gill was Reytec’s project
manager and general superintendent for the road-construction project. Pena is
Reytec’s Vice President. Neither Pena nor Gill could testify as to when the Lease
was formally executed by the parties. In response to requests for admission, Reytec
responded that it could not admit or deny the date the lease was signed because it
did not have sufficient information or knowledge to do so truthfully.
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There is evidence in the record that the Lease was not formally executed by
the Hospital until May 4, 2010. Jessie Deville, whose deposition transcript is also
included in the summary judgment record, testified that the Hospital’s CEO,
Parmer, is in charge of executing contracts on behalf of the Hospital. It is
undisputed that Parmer executed the Lease on behalf of the Hospital. The Lease
was initialed by Bryan Chandler, another employee with the Hospital that helped
negotiate the Lease. Deville testified that he did not know the specific date that the
Lease was signed by Parmer or Chandler. However, Deville explained that the
Hospital has a formal contract procedure in place, which culminates with the
CEO’s signature. He testified that a contract is required to have approval from a
senior manager, the CFO, and the CEO. The Hospital produced its “Contract
Approval Form” for the lease agreement between the Hospital and Reytec. The
form is blank where it requests the “Initial Review Date[.]” The form states that the
“Effective Date” is “2-28-10” and is for a term of twelve months to end “2-28-
11[.]” The form has a place for various people in management to sign and date
acknowledging their review and approval of the contract at issue. The form was
signed by the Senior Manager of Department Review on April 9, 2010, and by the
CEO on May 4, 2010. The form was also signed by the CFO, but there is no date
for his signature. The Hospital also produced a form from its Risk Management
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Department wherein the Vice President of Business Development signed on April
9, 2010 indicating he had reviewed the Lease. The Hospital’s general counsel also
signed a form on April 15, 2010, indicating he had reviewed the Lease. The form
signed by the Hospital’s general counsel reflects that the effective date of the lease
is “2-28-10[.]” Therefore, even though there is some evidence that suggests the
Lease was not formally executed by the Hospital until May 4, 2010, the Hospital’s
own internal documents at the time reflect that the Hospital intended the Lease to
take effect February 28, 2010, as evidenced in the language of the Lease.
While the Hospital produced some evidence that the Lease was formally
executed after its express commencement date, Deville testified that it was
“feasible and doable” for the Hospital to have started performance under a contract
before the contract approval procedures were complete. In fact, he testified that
this was a practice that the Hospital engaged in. He explained, “We work out an
agreement and the paperwork follows.” Deville admitted that Reytec occupied the
Property around February 28, 2010, before the Hospital formally executed the
Lease. Additionally, there is evidence that Reytec had begun constructing the
sidewalk contemplated under the Lease during the months of March, April, and
May of 2010. Under the terms of the Lease, Reytec was required to complete the
sidewalk by May 3, 2010. In Pena’s affidavit, also included in the record, he stated
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that it was always the intention of the parties that the Lease would start on
February 28, 2010 and terminate one year later. He stated that the Hospital never
informed Reytec that it intended the Lease to become effective on any other day.
We note that while the Hospital seeks an interpretation of the Lease that
would have us ignore the express commencement date in the Lease’s language, the
Hospital has consistently sought to enforce the express termination date of the
Lease, which was February 28, 2011. The Hospital also sought to hold Reytec to
the May 3, 2010 deadline for completion of the sidewalk, which under the
Hospital’s interpretation of the Lease’s effective date, would have required Reytec
to complete the sidewalk before the Lease had commenced.
The plain language of the Lease is consistent with an interpretation that the
parties’ mutual intention regarding the Lease was that the effective start date was
to be February 28, 2010, rather than the date the Lease was formally executed by
the parties. The Hospital’s merger argument is based on its contention that the
Dump Contract was entered into before the Lease. In viewing the evidence in the
light most favorable to the nonmovant Reytec, we conclude that Reytec has raised
a genuine issue of material fact concerning the parties’ intention to be bound by the
Lease on its defined commencement date even though they anticipated the Lease
would be formally executed in the future. See Murphy v. Seabarge, Ltd., 868
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S.W.2d 929, 933 (Tex. App.—Houston [14th Dist.] 1994, writ denied) (“Actions
may manifest an intent to be bound to an agreement, even though the parties may
expressly provide a formal contract will be executed in the future.”); see also
Foreca, S.A. v. GRD Dev. Co., 758 S.W.2d 744, 745 (Tex. 1988) (quoting A.
Corbin, Corbin on Contracts § 30 at 97 (1963)) (explaining that the question of the
parties’ intent to be bound with or without the execution of a final written contract
is a question of fact for the jury). For all these reasons, we conclude the Hospital
did not conclusively establish that the Dump Contract was entered into before the
Lease, and therefore, has not shown as a matter of law that the Dump Contract was
abrogated by the Lease under its merger provision. See Pitman v. Lightfoot, 937
S.W.2d 496, 529 (Tex. App.—San Antonio 1996, writ denied) (explaining that the
merger doctrine “refers to the extinguishment of one contract by its absorption into
another subsequent contract and is largely a matter of [the] intention of the
parties”).
B. Contract Modification
Reytec contends that it is not liable for breach of contract because the Dump
Contract modified its obligations under the Lease. Contract modification is an
affirmative defense that Reytec had the burden to prove. See Intec Sys., Inc. v.
Lowrey, 230 S.W.3d 913, 918 (Tex. App.—Dallas 2007, no pet.). The
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determination of whether a contract has been modified depends on the parties’
intentions and is a question of fact. Arthur J. Gallagher & Co. v. Dieterich, 270
S.W.3d 695, 702 (Tex. App.—Dallas 2008, no pet.). A valid contract modification
must include a meeting of the minds supported by consideration. Id.; see Dupree v.
Boniuk Interests, Ltd., 472 S.W.3d 355, 367–68 (Tex. App.—Houston [1st Dist.]
2015, no pet.) (explaining that a modification to a lease agreement must be
supported by consideration independent of the consideration provided in the
original lease). “In determining whether the parties had a meeting of the minds
concerning a modification of a contract, the focus is on what the parties did and
said, not their subjective states of mind.” Dieterich, 270 S.W.3d at 702.
Consideration may consist of a benefit that accrues to one party or a detriment that
is incurred by the other party. Dupree, 472 S.W.3d at 368. However, a promise to
fulfill an obligation in which the party was already bound cannot serve as new
consideration for the modification. Id.
The Dump Contract is essentially a letter agreement written on Reytec
letterhead and is dated, March 22, 2010. In the Dump Contract, the Hospital agreed
to "accept delivery, possession, and responsibility for excavated material as is
delivered to [the Property] by [Reytec] for the sum of $00.00 per load for a total of
$00.00.” The Hospital further agreed Reytec was “only obligated to stock-pile
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material to allow for it to be mowed.” Deville signed the Dump Contract on behalf
of the Hospital. Deville testified that he signed the Dump Contract and has no
reason to believe that he did not sign it on March 22, 2010. Guy Giesecke, the
former chief operating officer for the Hospital, initialed the Dump Contract.
The plain language of the Dump Contract supports that the parties had a
meeting of the minds that Reytec, at the very least, was permitted to stockpile
excavated materials on the Property. The plain language also supports that the
parties had a meeting of the minds that the Hospital would not only take delivery
and possession of the excavated materials, but that the Hospital would also become
responsible for the materials delivered to the Property by Reytec.
Contrary to the Hospital’s contention, there is nothing in the plain language
of the Dump Contract itself to suggest that the Hospital was only agreeing to
temporarily take possession of and responsibility for the materials. Moreover, there
is evidence in the record that conflicts with this contention. Deville testified that
when he executed the Dump Contract, he was considering the Hospital’s ability to
use the excavated dirt “to fill a hole that would be created from destruction of
another building.” He testified that early during the term of the Lease, he realized
that the Hospital could not use the dirt as he had anticipated, so he informed
Reytec that the Hospital no longer wanted to accept delivery, possession, and
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responsibility for the excavated materials. It is undisputed that, at least at some
point during the Lease term, the Hospital intended to use the excavated materials
for its own benefit. This evidence is inconsistent with the Hospital’s argument that
Reytec owned the dirt and was only allowed to store it on the Property temporarily.
Reytec also argues that the Lease modification was supported by new
consideration. Reytec agreed to deliver and stockpile the excavated materials on
the Property free of charge to the Hospital. And, in return, the Hospital gave up its
right to enforce Paragraphs 10 and 12 of the Lease. The Hospital does not
challenge Reytec’s contention that the modification was supported by new
consideration.
We conclude that Reytec has presented more than a scintilla of evidence that
a fact issue remains as to whether the parties’ intended to modify the Lease with
the Dump Contract. Further, we conclude that Reytec produced summary judgment
evidence sufficient to raise a fact issue on each element of its defense of
modification.
C. Waiver
Reytec also alleged that through the Dump Contract, the Hospital waived its
right to assert its claims regarding the excavated materials. The Hospital’s only
argument on appeal regarding Reytec’s waiver defense is that the Dump Contract
21
was abrogated by the Lease’s merger clause. However, as discussed above, Reytec
has raised a genuine issue of material fact regarding the merger argument.
Waiver is the intentional relinquishment of a known right and is either made
expressly or indicated by conduct that is inconsistent with an intent to claim the
right. See Jernigan v. Langley, 111 S.W.3d 153, 156 (Tex. 2003). “The elements of
waiver include (1) an existing right, benefit, or advantage held by a party; (2) the
party’s actual knowledge of its existence; and (3) the party’s actual intent to
relinquish the right, or intentional conduct inconsistent with the right.” Ulico Cas.
Co. v. Allied Pilots Ass’n, 262 S.W.3d 773, 778 (Tex. 2008). “Waiver is largely a
matter of intent, and for implied waiver to be found through a party’s actions,
intent must be clearly demonstrated by the surrounding facts and circumstances.”
Jernigan, 111 S.W.3d at 156. Ordinarily, waiver is a question of fact, but if the
surrounding circumstances and facts are undisputed, the question becomes one of
law. Id. at 156–57.
The Hospital does not dispute the first two elements of Reytec’s waiver
defense. The summary judgment record supports that the Hospital held rights
under the Lease and that it had knowledge of those rights. As explained above,
Reytec has presented more than a scintilla of evidence to support that the Dump
Contract was not abrogated by the Lease, but rather was intended by the parties to
22
alter their various obligations under the Lease. There is evidence in the record that
the Hospital allowed Reytec to continue to stockpile excavated materials on the
Property several months after the time the Hospital claims that the Dump Contract
was abrogated. There is also evidence in the record that even though the Hospital
had a representative observe the Property on a weekly basis, the Hospital did not
complain about the continued stockpiling of excavated materials until months after
the Dump Contract was allegedly abrogated. In viewing the evidence in the light
most favorable to Reytec, we conclude that Reytec has raised a genuine issue of
material fact concerning each element of its affirmative defense of waiver
sufficient to preclude summary judgment.
D. Release
Reytec also alleged that through the Dump Contract, the Hospital released
Reytec from all obligations or responsibilities concerning the excavated materials.
“A release is an agreement or contract in which one party agrees that a legal right
or obligation owed by the other party is surrendered.” D.R. Horton–Tex., Ltd. v.
Savannah Props. Assocs., L.P., 416 S.W.3d 217, 226 (Tex. App.—Fort Worth
2013, no pet.). Because a release is essentially a contract, a defendant must prove
the elements of a contract to establish the affirmative defense of release of liability.
Vera v. North Star Dodge Sales, Inc., 989 S.W.2d 13, 17 (Tex. App.—San Antonio
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1998, no pet.). We construe a release primarily “to ascertain and give effect to the
intention of the parties to the release, considering the instrument as a whole.” D.R.
Horton, 416 S.W.3d at 226. Here, again, the Hospital’s only challenge to this
defense is to the continued enforceability of the Dump Contract. As we have
explained above, Reytec has presented evidence to raise a genuine issue of material
fact as to the parties’ intentions regarding the Lease and the Dump Contract. For
the same reasons as identified above, viewing the evidence most favorably to the
nonmovant Reytec, we conclude that Reytec has presented sufficient summary
judgment evidence to raise a genuine issue of material fact concerning each
element of its release defense to preclude summary judgment.
The only summary judgment ground asserted by the Hospital on appeal is
that Reytec is liable for breach of contract for not fulfilling its obligations under
Paragraph 12 of the Lease. We have concluded that Reytec has raised genuine
issues of material fact regarding its affirmative defenses of modification, waiver,
and release sufficient to preclude summary judgment on the breach of contract
issue. Because the Hospital has abandoned its other summary judgment grounds,
we need not address those issues. Therefore, the trial court erred in granting
summary judgment, and we reverse the trial court’s judgment and remand this
cause for further proceedings.
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REVERSED AND REMANDED.
______________________________
CHARLES KREGER
Justice
Submitted on November 30, 2015
Opinion Delivered November 23, 2016
Before McKeithen, C.J., Kreger and Johnson, JJ.
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