Principal Commercial Acceptance, LLC v. Buchanan Fund V, LLC ( 2012 )

Opinion issued December 6, 2012.
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-11-00782-CV
———————————
PRINCIPAL COMMERCIAL ACCEPTANCE, L.L.C., Appellant
V.
BUCHANAN FUND V, L.L.C., Appellee
On Appeal from the 165th District Court
Harris County, Texas
Trial Court Case No. 2009-59436
MEMORANDUM OPINION
Principal Commercial Acceptance, L.L.C. (“PCA”) appeals a take-nothing
judgment rendered in favor of Buchanan Fund V, L.L.C. PCA sued to recover
$8,359,245 for Buchanan’s alleged breach of a guaranty agreement relating to a
real estate development project. After a bench trial, the trial court found the
Guaranty ambiguous, found the evidence supported Buchanan’s interpretation of
the Guaranty, and determined PCA had not proved that Buchanan breached. On
appeal, PCA contends the trial court erred in finding the Guaranty ambiguous and
in finding that the Guaranty was not breached. We affirm.
Background
PCA is a lender specializing in originating and underwriting commercial real
estate loans. Buchanan and MAC Cypress Creek GP, LLC (“Macfarlan”) formed a
partnership, Cypress Creek Centre LP, to purchase and renovate an office complex
in northwest Houston. PCA agreed to be the lender for the project.
PCA and Cypress Creek entered into a Loan Agreement for the project.
The Loan Agreement provided that the purchase and redevelopment of the
property, estimated to cost $100 million, would be funded at a 75% debt-to-25%
equity ratio. PCA agreed to finance $75 million over time and Cypress Creek
agreed to contribute $25 million in equity for the project. Before closing, Cypress
Creek proposed that it contribute about half of the equity, approximately $12.2
million, at closing, and that it contribute the balance of the equity—$12,814,031—
in stages throughout the life of the project, as costs were incurred. PCA agreed to
this proposal. In the Loan Agreement, the parties defined that portion of the $25
million equity contribution as “Deferred Equity”:
The portion of the Borrower’s cash equity investment in the Project to
be funded by Borrower after Closing as provided in Section 4.7
2
herein, in an aggregate amount of not less than Twelve Million, Eight
Hundred Fourteen Thousand, Thirty One and 00/Dollars
($12,814,031.00).
The parties further agreed that Cypress Creek would fund the Deferred Equity as
Disbursement Requests were made by PCA, as set forth in Section 4.7 of the Loan
Agreement. Section 4.7 provides:
4.7 Deferred Equity. Notwithstanding any provision of this
Agreement or the Loan Documents to the contrary, [PCA] shall have
no obligation to disburse [project costs] except in accordance with the
Project Budget and not to exceed seventy-five percent (75%) of each
Disbursement Request approved by [PCA]. [Cypress Creek] shall
fund twenty-five [percent] (25%) of each such Disbursement Request
out of pocket as Deferred Equity when and as such amounts are due
and shall provide [PCA] on a monthly basis with evidence of payment
during the preceding month of such Deferred Equity. . . . [Cypress
Creek] further acknowledges and agrees that [PCA] has agreed to
fund the Loan in reliance upon [Cypress Creek’s] agreement to pay
and contribute the Deferred Equity when and as due.
(Emphasis added). In other words, PCA would issue Disbursement Requests
periodically, and each Disbursement Request would be funded proportionally, with
PCA loaning 75% and Cypress Creek contributing equity to fund the remaining
25%.
On the same day the parties entered into the Loan Agreement, Buchanan
entered into a “Limited Guaranty of Payment” with PCA. In it, Buchanan
guaranteed to PCA:
(a) If for any reason whatsoever, [Cypress Creek] fails to timely fund
the Deferred Equity when and as required pursuant to the Loan
Agreement, [Buchanan] shall fund such amounts within ten (10)
3
business days after notice from [PCA] of such failure by [Cypress
Creek], provided, however, [Buchanan] will not be obligated to
fund Deferred Equity in excess of Twelve Million, Eight Hundred
Fourteen Thousand Thirty-One and No/00 Dollars
($12,814,031.00) in the aggregate (the “Buchanan Funding
Obligation”).
As the project unfolded, Cypress Creek made all periodic Deferred Equity
contributions as required by the Loan Agreement, but failed to meet a separate
funding obligation under the Loan Agreement, one that required Cypress Creek to
fund approximately $2.1 million for net operating expenses through an escrow
account. After Cypress Creek failed to fund the escrow, PCA informed Cypress
Creek of its default and gave it time to cure. The parties negotiated to try to
resolve this issue, but the negotiations ultimately failed, and PCA foreclosed on the
property.
PCA then sued Buchanan under the Guaranty to recover Deferred Equity
that Cypress Creek did not contribute in the amount of $8,359,245.1 Buchanan
denied liability, responding that the Guaranty did not obligate Buchanan to
contribute any remaining unfunded Deferred Equity because Cypress Creek was
current on its payments of Deferred Equity “when and as required by [Section 4.7
of] the Loan Agreement” (i.e., in response to Disbursement Requests and in an
amount equal to 25% of each Disbursement Request). Buchancan further
1
PCA calculated this number by subtracting the total of various amounts Cypress
Creek had contributed as its 25% proportionate share in compliance with earlier
Disbursement Requests from $12,814,03, the total Deferred Equity.
4
responded that the Loan Agreement did not accelerate the payment of Deferred
Equity upon default, nor did Cypress Creek promise to pay the Deferred Equity
except in connection with disbursement requests. In addition, Buchanan asserted
the affirmative defense of ambiguity.
After a bench trial, the trial court concluded the Guaranty was ambiguous
and imposed no further obligation on Buchanan. Based on these conclusions, the
trial court rendered a take-nothing judgment. PCA appeals.
Discussion
In its first and second issues, PCA contends the Guaranty is unambiguous
and requires Buchanan to pay the remaining amount of Deferred Equity that
Cypress Creek did not pay. Thus, PCA argues, the trial court erred by failing to
enforce the Guaranty. Buchanan responds that the Guaranty imposes no such
obligation, and that the trial court correctly concluded the Guaranty is ambiguous.
A. Law Pertaining to Construction of Contracts
The interpretation of a guaranty is a question of law that this court reviews
de novo. Wasserberg v. Flooring Servs. of Tex., LLC, 376 S.W.3d 202, 206 (Tex.
App.—Houston [14th Dist.] 2012, no pet.) (citing Gulf Ins. Co. v. Burns Motors,
Inc., 22 S.W.3d 417, 423 (Tex. 2000)). In construing a guaranty, as with other
contracts, the primary concern of the reviewing court is to ascertain the intent of
the parties. 84 Lumber Co. v. Powers, No. 01-09-00986-CV, 2012 WL 243524, at
5
*7 (Tex. App.—Houston [1st Dist.] Jan. 26, 2012, no pet.) (citing Coker v. Coker,
650 S.W.2d 391, 393 (Tex. 1983)). We begin our inquiry into the parties’ intent
with the contract’s express language. Progressive Cnty. Mut. Ins. Co. v. Kelley,
284 S.W.3d 805, 807 (Tex. 2009). A guarantor’s liability is measured by the
principal’s liability, unless the guaranty expressly provides for greater or lesser
liability. Pham v. Mongiello, 58 S.W.3d 284, 288 (Tex. App.—Austin 2001, pet.
denied). Any uncertainty in a guaranty must be resolved in favor of the guarantor.
See Coker, 650 S.W.2d at 394 n.1; 84 Lumber Co., 2012 WL 243524, at *7.
If a contract is “so worded that it can be given ‘a certain or definite legal
meaning or interpretation,’ it is not ambiguous and the reviewing court will
construe it as a matter of law.” 84 Lumber Co., 2012 WL 243524, at *2 (quoting
Coker, 650 S.W.2d at 393). An unambiguous contract will be considered the
objective statement of the parties’ intent and enforced as written. Id. Extrinsic
evidence may be admitted to determine the true meaning of the contract only after
the contract had been determined to be ambiguous. Nat’l Union fire Ins. Co. of
Pittsburgh, PA v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995).
“A contract is ambiguous only when its ‘meaning is uncertain and doubtful
or it is reasonably susceptible to more than one meaning.’” 84 Lumber Co., 2012
WL 243524, at *2 (quoting Coker, 650 S.W.2d at 393). An ambiguity in a contract
may be patent or latent. Tyco Valves & Controls, L.P. v. Colorado, 365 S.W.3d
6
750, 767 (Tex. App.—Houston [1st Dist.] 2012, pet. filed). A patent ambiguity is
“apparent on the face of the contract.” Id.; see Nat’l Union Fire Ins. Co. v. CBI
Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). A latent ambiguity is one that
becomes apparent when a contract is applied under particular circumstances. Tyco
Valves & Controls, L.P., 365 S.W.3d at 767; see Nat’l Union Fire Ins. Co., 907
S.W.2d at 520.
Generally, when a contract is ambiguous, interpretation of the agreement
becomes a fact issue for the fact-finder to resolve through extrinsic evidence.
Coker, 650 S.W.2d at 394; Tyco Valves & Controls, L.P., 365 S.W.3d at 766–67;
see Lenape Res. Corp. v. Tennessee Gas Pipeline Co., 925 S.W.2d 565, 574 (Tex.
1996)). However, if the meaning of a guaranty is uncertain or it is subject to more
than one reasonable interpretation, a reviewing court will apply the construction
“most favorable to the guarantor.” Coker, 650 S.W.2d at 394 n.1, quoted in 84
Lumber Co., L.P., 2012 WL 243524, at *7 & n.2. Where, as here, there are
multiple instruments pertaining to the same transaction, they may be read together
in construing the parties’ agreement. Silver Lion, Inc. v. Dolphin St., Inc., No. 01-
07-00370-CV, 2010 WL 2025749, at *16 (Tex. App.—Houston [1st Dist.] May 20,
2010, pet. denied) (mem. op.) (citing Fort Worth Indep. Sch. Dist. v. City of Fort
Worth, 22 S.W.3d 831, 840 (Tex. 2000)).
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B. Key Provisions of the Guaranty
Section 1 of the Guaranty states Buchanan’s obligations. First, section 1(a)
requires Buchanan to fund, within ten days after notice, such amounts of Deferred
Equity that Cypress Creek failed to timely fund “as required by the Loan
Agreement.” Section 1(a) of the Guaranty states:
(a) If for any reason whatsoever, [Cypress Creek] fails to timely fund
the Deferred Equity when and as required pursuant to the Loan
Agreement, [Buchanan] shall fund such amounts within ten (10)
business days after notice from Lender of such failure by [Cypress
Creek], provided, however, [Buchanan] will not be obligated to fund
Deferred Equity in excess of Twelve Million, Eight Hundred Fourteen
Thousand Thirty-One and No/00 Dollars ($12,814,031.00) in the
aggregate (the “Buchanan Funding Obligation”).
Section 1(b) provides that the Buchanan Funding Obligation will be reduced upon
each funding by Cypress Creek of the Deferred Equity equal to 25% of each
Disbursement Request.2 Section 1(c) provides that Buchanan also guarantees “in
addition to the maximum Buchanan Funding Obligation, the payment of all
Enforcement Costs.” Finally, section 1 defines the “Guaranteed Obligations” or
“Indebtedness” as the Buchanan Funding Obligation plus Enforcement Costs.
Thus, this case turns on the contract’s definition of the “Buchanan Funding
Obligation.”
2
It is undisputed that Cypress Creek made payments of Deferred Equity, but the
parties disagree about whether certain payments made by Cypress Creek are
properly considered Deferred Equity.
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Section 2 of the Guaranty defines the remedies available to PCA in the event
of Cypress Creek’s failure to comply with the Loan Agreement. Section 2(a) sets
forth the remedy available for Cypress Creek’s failure to pay Deferred Equity
when and as required under the Loan Agreement, while section 2(c) defines the
remedy available upon the occurrence of any “Event of Default” under the Loan
Agreement. Section 2 states:
(a) In the event of any failure by [Cypress Creek] to pay the Deferred
Equity when and as required under the Loan Agreement, [Buchanan]
agrees, on demand by [PCA] as aforesaid, to pay the Buchanan
Funding Obligation regardless of any defense, right of set-off or
claims which [Cypress Creek] or [Buchanan] may have against
[Cypress Creek]. This is an absolute, irrevocable, present and
continuing guaranty of payment and not of collection.
(b) Notwithstanding anything to the contrary herein contained, in any
action to enforce any of the Guaranteed Obligations of [Buchanan]
under this Guaranty, [PCA], at its election, may proceed against
[Buchanan], with or without: (i) joining [Cypress Creek] in any such
action; (ii) commencing any action against or obtaining any judgment
against [Cypress Creek]; or (iii) commencing any proceeding to
enforce the Loan Agreement, realize upon any Loan Document,
foreclose the Mortgage or obtain any judgment, decree or foreclosure
sale therein.
(c) Further, upon the occurrence of an Event of Default under the
Loan Documents, [PCA] shall have the option, at its sole discretion, to
require that [Buchanan] pay the entire remaining Buchanan Funding
Obligation to [PCA] to apply toward the Indebtedness in accordance
with the Loan Documents. [Buchanan] agrees to pay the Buchanan
Funding Obligation no later than ten (10) days after demand from
[PCA] after such an Event of Default. [PCA] may apply the funds
received as the Buchanan Funding Obligation in any manner
permitted under the Loan Documents in Lender’s sole discretion.
Without limitation, Lender may apply such funds to reduce the
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principal or other Loan indebtedness, or Lender may use such funds to
pay Project Costs.
The Loan Agreement defines “Event of Default” as “[o]ne or more of the
events or occurrences referred to in Article 9” of the Loan Agreement.3 It is
undisputed that Cypress Creek’s failure to fund the escrow account constituted a
failure on the part of Cypress Creek “to comply with any of its other obligations”
under the Loan Agreement, and thus, constituted an Event of Default under the
Guaranty. It is also undisputed that Cypress Creek timely funded its proportionate
25% share of any Disbursement Request.
C. Does the Guaranty unambiguously obligate Buchanan to pay unfunded
Deferred Equity?
To support its position, PCA points to the following: first, it notes that the
Loan Agreement defines “Deferred Equity” as “[t]he portion of [Cypress Creek’s]
cash equity investment in the Project to be funded by [Cypress Creek] as provided
in Section 4.7 herein, in an aggregate amount of not less than Twelve Million,
Eight Hundred Fourteen Thousand, Thirty-One and 00/Dollars ($12,814,031.00)”
(emphasis added). Second, PCA points to the recitals in the Guaranty. It argues
that Recital A, which notes that defined terms used in the Loan Agreement have
the same meaning as in the Guaranty, incorporates the Loan Agreement’s
3
This reference to Article 9 in the Loan Agreement’s definition of Event of Default
is a typographical error. Article 9 does not identify events of default but, instead,
lists PCA’s remedies upon an event of default. It is actually Article 8 of the Loan
Agreement that sets forth the events that constitute an Event of Default.
10
definition of Deferred Equity, and creates an obligation on the part of Buchanan to
fund the equity in the project in an amount not less than $12.8 million. PCA then
turns to section 2(c) of the Guaranty, which it contends gives PCA “the option, in
its sole discretion, to require that [Buchanan] pay the entire remaining Buchanan
Funding Obligation to apply toward the Indebtedness in accordance with the Loan
Documents.” In short, PCA argues that the “entire remaining Buchanan Funding
Obligation” is all unpaid Deferred Equity, subject to the $12.8 million cap, or
approximately $8.4 million. Under its interpretation, Buchanan’s obligation under
the Guaranty is absolute and required it to pay PCA any part of the $12.8 million
of Deferred Equity that Cypress Creek did not previously pay.
Buchanan responds, and the trial court found, that the Guaranty does not
require it to guarantee a sum certain, but only those equity contributions due and
owing under the Loan Agreement. Thus, Buchanan contends, the Guaranty has a
second interpretation and is therefore, at best, ambiguous as to the amount it
promised to guarantee. Buchanan points to section 1(a) of the Guaranty and notes
that the “Buchanan Funding Obligation” is defined in terms of—and, therefore, is
triggered only by—Cypress Creek’s failure to timely fund Deferred Equity when
and as required pursuant to the Loan Agreement. Section 1(a) provides:
If . . . [Cypress Creek] fails to timely fund the Deferred Equity when
and as required pursuant to the Loan Agreement, [Buchanan] shall
fund such amounts within ten (10) business days . . ., provided,
however, [Buchanan] will not be obligated to fund Deferred Equity in
11
excess of Twelve Million, Eight Hundred Fourteen Thousand Thirty-
One and No/00 Dollars ($12,814,031.00) in the aggregate (the
“Buchanan Funding Obligation”).
Thus, Buchanan contends that Buchanan’s obligation to fund any amount of
Deferred Equity (subject to a cap of $12.8 million) is triggered only if Cypress
Creek fails to timely fund Deferred Equity when and as required, i.e., after PCA
approved and paid its 75% share of a Disbursement Request. Under Buchanan’s
interpretation, Buchanan’s obligation under the Guaranty was never triggered, and,
accordingly, never breached, because Cypress Creek never failed to fund its 25%
proportionate share of any Disbursement Request, which was the only obligation it
had with respect to its contribution of Deferred Equity.
PCA advances two reasons Buchanan’s interpretation of the Guaranty is not
reasonable: (1) it renders Buchanan’s promise illusory and void for lack of
consideration and (2) it renders other provisions of the Guaranty meaningless. We
address each argument in turn.
“A promise is illusory if it does not bind the promisor, such as when the
promisor retains the option to discontinue performance.” In re 24R, Inc., 324
S.W.3d 564, 567 (Tex. 2010) (orig. proceeding) (per curiam), quoted in Cleveland
Constr., Inc. v. Levco Constr., Inc., 359 S.W.3d 843, 853 (Tex. App.—Houston
[1st Dist.] 2012, pet. dism’d). According to PCA, Buchanan’s interpretation gives
Buchanan “the power, acting unilaterally, to eliminate its obligation to pay the
12
Deferred Equity” by causing Cypress Creek to default. This argument ignores the
separate corporate identities of Buchanan and Cypress Creek: Cypress Creek was
the borrower under the Loan Agreement, not Buchanan. While PCA suggests that
Buchanan wielded total control over Cypress Creek and could have caused Cypress
Creek to default by withholding funds from it, PCA fails to demonstrate that the
decision whether Cypress Creek would default under the Loan Agreement was
subject to the whim or caprice of Buchanan. PCA did not provide any evidence to
support the conclusion that the corporate forms of Buchanan and Cypress Creek
should be disregarded. We therefore reject PCA’s contention that Buchanan’s
promise was illusory. See In re 24R, Inc., 324 S.W.3d at 567; Cleveland Constr.,
Inc., 359 S.W.3d at 853; see also Hackberry Creek Country Club, Inc. v.
Hackberry Creek Home Owners Ass’n, 205 S.W.3d 46, 61 (Tex. App.—Dallas
2006, pet. denied) (promise is illusory when performance of promise “potentially
subject to the whim or caprice” of one party to contract). PCA’s position also
ignores the practical distinction between a loan and equity funding of a project: a
loan is a promise to pay a sum of money. A promise to provide deferred equity is
in the nature of a promise for future capital contributions, which would not
necessarily arise for a project upon default of the loan obligation. In their Loan
Agreement, PCA and Cypress agreed to several provisions, including acceleration
of sums due under the loan, in the event of a default. But Cypress never promised
13
to pay PCA unfunded Deferred Equity in that event. As Cypress Creek’s
guarantor, Buchanan did not promise to assume a greater obligation than Cypress
Creek did.
PCA also argues that Buchanan’s interpretation of the Guaranty is
unreasonable because it renders other provisions of the Guaranty meaningless.
Specifically, PCA contends sections 3, 4, 13, and 18 of the Guaranty are
meaningless under Buchanan’s interpretation.
We are mindful that a court “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.” J.M. Davidson, Inc. v. Webster, 128 S.W.3d
223, 229 (Tex. 2003). But none of the provisions PCA cites are rendered
meaningless under Buchanan’s interpretation of the Guaranty. PCA’s argument
regarding section 4 of the Guaranty illustrates this point. Entitled “No Discharge,”
section 4 provides:
[Buchanan] agrees that the Guaranteed Obligations, covenants and
agreements of [Buchanan] under this Guaranty shall not be affected or
impaired by any act of [PCA], or any event or condition except full
payment of the Guaranteed Obligations. . . . [Buchanan] shall remain
liable as a principal until all Guaranteed Obligations shall have
been paid in full, notwithstanding any fact, act, event or
occurrence which might otherwise operate as a legal or equitable
discharge of a surety or guarantor.
(Emphasis supplied by PCA). PCA contends section 4 expresses the parties’ intent
that Buchanan’s obligations under the Guarantee remain in existence, even in the
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face of PCA’s foreclosure, until the entire $12.8 million of Deferred Equity is paid
in full. The parties may well have intended this. But Buchanan’s proposed
interpretation, which the trial court adopted, does not suggest that Buchanan’s
obligations are discharged or terminated; rather, as applied to these
circumstances—where PCA has foreclosed and will make no further Disbursement
Requests to Cypress Creek—it means that Cypress Creek will not fail to pay such
Requests, and Buchanan’s obligation under the Guaranty will never arise.4
We hold that the Guaranty does not unambiguously obligate Buchanan to
pay the unfunded Deferred Equity. The Guaranty defines the Buchanan Funding
Obligation in terms of—and presupposes—Cypress Creek’s failure to timely fund
its 25% share of Deferred Equity after receiving a Disbursement Request for which
PCA funded its 75% share. Section 1(a) of the Guaranty, which sets forth
Buchanan’s obligation as guarantor, is conditional—it arises only “If . . . [Cypress
Creek] fails to timely fund the Deferred Equity when and as required pursuant to
the Loan Agreement.” The Loan Agreement nowhere requires Cypress Creek to
4
The other provisions PCA contends are rendered meaningless by PCA’s
interpretation, like section 4, describe ways in which Buchanan could obtain a
release or discharge of its obligations under the Guaranty. Section 18, for
example, gives Buchanan the option to obtain a release of the Guaranty by
depositing with PCA with then-remaining Buchanan Funding Obligation. Like
section 4 and the other provisions PCA points to, section 18 is not rendered
meaningless by Buchanan’s interpretation. The fact that the Guaranty provides
Buchanan a means to obtain an early release in no way suggests that it would
obligate Buchanan to pay the Deferred Equity in the absence of Cypress Creek’s
failure to timely fund Disbursement Requests.
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pay Deferred Equity without meeting section 4.7’s requirements that it present a
Disbursement Request to fund project costs. In particular, the Loan Agreement
does not obligate Cypress Creek to fund any remaining Deferred Equity upon any
defined Event of Default. Thus, the Guaranty reasonably may be interpreted as
reflecting the parties’ intent that Buchanan’s obligation under the Guaranty arise
only if Cypress Creek failed to timely fund the Deferred Equity in response to a
Disbursement Request. And this interpretation does not render meaningless the
provisions identified by PCA. Because PCA concedes that Cypress Creek funded
its 25% share of any Disbursement Request, Buchanan’s obligation under the
Guaranty was never triggered and, accordingly, never breached. We hold that the
trial court did not err by (1) rejecting PCA’s claim that the Guaranty
unambiguously required Buchanan to pay the unpaid Deferred Equity or
(2) concluding that PCA failed to prove that Buchanan breached the Guaranty.
We overrule PCA’s first, second and third issues.
E. Findings of Fact
In its fourth issue, PCA challenges the trial court’s findings of fact as
(1) irrelevant in light of the trial court’s alleged error in failing to adopt PCA’s
interpretation of the Guaranty and (2) lacking evidentiary support.
16
PCA’s first complaint is premised on our finding error in the trial court’s
failure to adopt PCA’s interpretation of the Guaranty, which we declined to do for
the reasons discussed above. Accordingly, we need not address it here.
We likewise conclude that we need not address the sufficiency of the
evidence to support the trial court’s findings of fact. Ordinarily, if a contract is
ambiguous, then the parties’ intent is a question for the finder of fact. Coker, 650
S.W.2d at 394; Tyco Valves & Controls, L.P., 365 S.W.3d at 766–67; see Lenape
Res. Corp., 925 S.W.2d at 574). A guaranty, however, is subject to the rule of
construction that, in the event of an ambiguity, the reviewing court will apply the
construction “most favorable to the guarantor.” Coker, 650 S.W.2d at 394 n.1; 84
Lumber Co., L.P., 2012 WL 243524, at *7 n.2; see also JMW Partners, L.P. v.
Northstar Bank of Tex., No. 2-09-167-CV, 2010 WL 2331399, at *4 (Fort Worth
June 10, 2010, no pet.); Pham, 58 S.W.3d at 288; Cox v. Lerman, 949 S.W.2d 527,
530 (Tex. App.—Houston [14th Dist.] 1997, no writ); Clark v. Walker-Kurth
Lumber Co., 689 S.W.2d 275, 278 (Tex. App.—Houston [1st Dist.] 1985, writ
ref’d n.r.e.) (citing Coker, 165 S.W.2d at 394 n.1).
Buchanan does not urge us to construe the Guaranty unambiguously in its
favor. Rather, its position is that the meaning of the Guaranty is uncertain and the
Guaranty, being susceptible of two reasonable interpretations, is ambiguous. We
agree that Buchanan’s interpretation of the Guaranty is a reasonable one. But,
17
because we are construing a guaranty, the proper interpretation is not a question of
fact. Rather, we must apply the construction of the Guaranty “most favorable to
the guarantor,” Buchanan. See Coker, 650 S.W.2d at 394 (in construing guaranty,
“any uncertainty must be resolved in favor of [the] guarantor” (emphasis added)).
Accordingly, we need not address the sufficiency of the evidence supporting the
trial court’s findings of fact. See TEX. R. APP. 47.1; SAVA gumarska in kemijska
industria d.d. v. Advanced Polymer Scis., Inc., 128 S.W.3d 304, 315–16 (Tex.
App.—Dallas 2004, no pet.) (citing Rule 47.1 and declining to address sufficiency
of evidence supporting findings of fact because findings rendered immaterial once
conclusions of law determined to be correct on alternate basis).
We overrule PCA’s fourth issue.
Conclusion
We affirm the trial court’s take-nothing judgment in favor of Buchanan.
Rebeca Huddle
Justice
Panel consists of Chief Justice Radack and Justices Bland and Huddle.
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