Kevin Clark v. Cotten Schmidt, L.L.P. F/K/A Kirkley Schmidt & Cotten, L.L.P. ( 2010 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-09-400-CV
KEVIN CLARK APPELLANT
V.
COTTEN SCHMIDT, L.L.P. F/K/A APPELLEE
KIRKLEY SCHMIDT & COTTEN, L.L.P.
------------
FROM THE 48TH DISTRICT COURT OF TARRANT COUNTY
------------
OPINION
------------
In two issues, appellant Kevin Clark appeals the trial court‘s decision to
deny his motion for summary judgment and grant the motion for summary
judgment of appellee Cotten Schmidt, L.L.P. f/k/a Kirkley Schmidt & Cotten,
L.L.P. (Cotten Schmidt). We affirm in part and reverse and remand in part.
Background Facts
This appeal concerns the amount of money that Clark was entitled to
receive as a repayment of his capital investment under Cotten Schmidt‘s
partnership agreement upon his leaving the law firm. Clark joined the firm in the
fall of 2001 as a non-equity partner. In 2003, Clark became an equity partner,
and he contributed $25,000 to the firm as capital.
The partnership agreement contains the following relevant provisions:
1.04. Classes of Partners. There shall be four (4) classes of
partners.
a. ―Equity Partners‖ are those partners who
(i) have contributed to the capital of the partnership,
(ii) own an interest in the capital and in the profits and
losses of the partnership, (iii) have a vote in partnership
matters, and (iv) participate in the distribution of
partnership profits as defined in Article VIII.
....
3.02. Assets. The assets of the partnership are:
a. Cash balances in partnership accounts
other than any trust accounts maintained by the
partnership;
b. The physical assets and personal property
as reflected on the partnership‘s books, records, and
financial statements;
c. The notes and accounts receivable of the
partnership; and
d. Work in process and contingent-fee
interests.
....
5.01. Books. The partnership shall maintain books and
records to reflect all business and financial transactions using the
cash basis of accounting unless otherwise agreed.
....
2
6.01. Equity Partners. All Equity Partners . . . shall have an
equal ownership interest in the assets of the partnership . . . .
....
6.04. Capital Contributions By New Equity Partners. All
Equity Partners to be admitted to the partnership shall be required to
make a capital contribution to the partnership as determined by the
partnership. The amount of capital contribution credited to the
capital account of the new Equity Partner shall be designated by the
partnership with the prior concurrence of the new Equity Partner.
....
6.07. Capital Accounts on Termination. . . . [A]n Equity
Partner‘s interest in the partnership on termination of the partnership
shall not be determined by his or her capital account. All Equity
Partners shall have an equal interest in the value of partnership
assets . . . .
....
12.03. Withdrawal of Equity (including Senior) Partner.
An Equity Partner who withdraws from the partnership, and who is
not then in substantial breach of his or her duties to the partnership,
shall be entitled to the following:
a. To payment . . . of his or her percentage of
fees collected for noncontingent work performed by the
partnership prior to the effective date of withdrawal and
collected by the partnership within twenty-four (24)
months after the effective date of withdrawal;
b. To payment . . . of his or her percentage of
fees collected for work performed by the partnership
prior to the effective date of withdrawal on contingent-
fee or bonus-fee cases, regardless of how long after the
3
date of withdrawal those fees are collected by the
partnership. . . .;[1] and
c. To repayment of his or her capital
investment in the partnership calculated as an equal
interest in the depreciated book value of all partnership
assets less an equal proportion of the partnership long
term and capital debt. If negative, this liability will offset
amounts under subsections (a) or (b).[2] [Emphasis
added.]
Clark voluntarily left the firm in May 2005, at which time it had eleven
equity partners. After consulting with accountants, the firm paid $4,640.36 to
Clark as his capital investment repayment under section 12.03(c) of the
partnership agreement; the firm said that this amount reflected ―one-eleventh of
the Total Partners‘ Equity reflected on the May 31, 2005 balance sheet.‖
Clark contended that the firm incorrectly valued his capital investment
repayment. He relied on an opinion from an accountant who reviewed the
partnership agreement and concluded that the firm wrongly excluded the
1
Clark does not claim that he has not received proper payments under
sections 12.03(a) and (b) of the agreement. Randall Schmidt, a partner at Cotten
Schmidt, stated in an affidavit,
As the firm collected fees after the date of Mr. Clark‘s withdrawal on
accounts receivable and work-in-process for work performed by the
firm before the date of his withdrawal, the firm‘s administrator
applied the applicable compensation formula to those fee collections
. . . and issued checks to Mr. Clark . . . .
2
The partnership agreement also references a Partner Compensation
Addendum. The addendum specifies how hourly, contingent, and bonus fees are
distributed to individuals within the firm; it states, among other provisions, that ―a
portion of all fees earned be shared among the partners in recognition of the
partnership effort required to maintain the firm.‖
4
following items from the definition of ―partnership assets‖ under section 12.03(c):
notes, accounts receivable, work in process, and contingent fee interests.
Clark filed a lawsuit against Cotten Schmidt, asserting that it breached
section 12.03(c) of the partnership agreement by incorrectly calculating and
paying him the $4,640.36 and also breached a fiduciary duty to him. Cotten
Schmidt answered Clark‘s allegations and filed a motion for summary judgment
in which it argued that quasi-estoppel precludes Clark‘s breach of contract claim
and that, as a matter of law, the firm did not owe a fiduciary duty to him.3
Clark filed a motion for summary judgment on his breach of contract claim;
he asserted that notes, accounts receivable, work in process, and contingent fee
interests are unambiguously included under section 12.03(c)‘s capital-
investment-repayment calculation, which uses the phrase ―all partnership
assets,‖ because those items are included in section 3.02‘s definition of ―assets.‖
Cotten Schmidt contended, ―When the language of section 12.03(c), and Mr.
Clark‘s current interpretation, are considered in context . . ., it becomes apparent
that the firm‘s interpretation . . . is correct, and that Mr. Clark‘s current
interpretation is wrong.‖
3
Clark described his contractual claims in his petition as ―Breach of
Contract,‖ ―Neglecting to perform contractual duty,‖ and ―Refusing to perform
contractual obligations.‖ Our reference to Clark‘s breach of contract cause of
action includes each of these claims. We will detail the facts relevant to Cotten
Schmidt‘s quasi-estoppel defense in our discussion of Clark‘s second issue.
5
The trial court denied Clark‘s summary judgment motion and granted
Cotten Schmidt‘s motion against Clark‘s contractual claim based on its quasi-
estoppel defense, concluding that Cotten Schmidt established all elements of the
defense as a matter of law.4 Clark filed notice of this appeal.
Summary Judgment Standards
In a summary judgment case, the issue on appeal is whether the movant
met the summary judgment burden by establishing that no genuine issue of
material fact exists and that the movant is entitled to judgment as a matter of law.
Tex. R. Civ. P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,
289 S.W.3d 844, 848 (Tex. 2009). We review a summary judgment de novo.
Mann Frankfort, 289 S.W.3d at 848. We consider the evidence presented in the
light most favorable to the nonmovant, crediting evidence favorable to the
nonmovant if reasonable jurors could and disregarding evidence contrary to the
nonmovant unless reasonable jurors could not. Id. We indulge every reasonable
inference and resolve any doubts in the nonmovant‘s favor. 20801, Inc. v.
Parker, 249 S.W.3d 392, 399 (Tex. 2008).
A plaintiff is entitled to summary judgment on a cause of action if it
conclusively proves all essential elements of the claim. See Tex. R. Civ. P.
4
The court also concluded that the firm did not have a fiduciary duty to
Clark. Clark does not challenge the trial court‘s decision to grant summary
judgment against his breach of fiduciary duty claim; therefore, we affirm the trial
court‘s judgment to the extent that it resolves that claim against Clark.
See Jacobs v. Satterwhite, 65 S.W.3d 653, 655–56 (Tex. 2001); Smith v. Tilton,
3 S.W.3d 77, 84 (Tex. App.—Dallas 1999, no pet.).
6
166a(a), (c); MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986). A defendant is
entitled to summary judgment on an affirmative defense if the defendant
conclusively proves all the elements of the affirmative defense. Chau v. Riddle,
254 S.W.3d 453, 455 (Tex. 2008); see Tex. R. Civ. P. 166a(b), (c). When both
parties move for summary judgment and the trial court grants one motion and
denies the other, the reviewing court should review both parties‘ summary
judgment evidence and determine all questions presented. Mann Frankfort, 289
S.W.3d at 848.
Quasi-Estoppel
In his second issue, Clark argues that the trial court erred by granting
Cotten Schmidt‘s motion for summary judgment. Cotten Schmidt‘s sole
argument in its motion was that Clark‘s breach of contract claim is barred by
quasi-estoppel; Cotten Schmidt did not seek summary judgment on the
correctness of its interpretation of the partnership agreement.
The law on quasi-estoppel
Quasi-estoppel is an affirmative defense that ―precludes a party from
asserting, to another‘s disadvantage, a right inconsistent with a position
previously taken. The doctrine applies when it would be unconscionable to allow
a person to maintain a position inconsistent with one to which he acquiesced, or
from which he accepted a benefit.‖ Lopez v. Munoz, Hockema & Reed, L.L.P.,
22 S.W.3d 857, 864 (Tex. 2000) (citation omitted); see Brooks v. Brooks, 257
S.W.3d 418, 423 (Tex. App.—Fort Worth 2008, pet. denied) (explaining that
7
―unlike equitable estoppel, quasi-estoppel requires no showing of
misrepresentation or detrimental reliance‖). ―Thus, quasi estoppel forbids a party
from accepting the benefits of a transaction . . . and then subsequently taking an
inconsistent position to avoid corresponding obligations or effects.‖ Atkinson Gas
Co. v. Albrecht, 878 S.W.2d 236, 240 (Tex. App.—Corpus Christi 1994, writ
denied).
For example, in Cimarron County Property Owners Association v. Keen,
the Beaumont Court of Appeals held that quasi-estoppel precluded the owners
association from contending in a lawsuit that a deed restriction prohibited a
daycare when the association previously opined that the daycare could operate.
117 S.W.3d 509, 512–14 (Tex. App.—Beaumont 2003, no pet.). Similarly, in
Eckland Consultants, Inc. v. Ryder, Stilwell Inc., the Houston (First District) Court
of Appeals held that quasi-estoppel prevented a property inspection company
from claiming that a plaintiff did not have standing to sue for a breach of the
inspection contract when the inspection company accepted the benefits of the
contract and stated in a report that noncontracting entities could rely on the
report. 176 S.W.3d 80, 81–83, 87–88 (Tex. App.—Houston [1st Dist.] 2004, no
pet.). However, there ―can be no ratification or estoppel from acceptance of the
benefits by a person who did not have knowledge of all material facts.‖ Frazier v.
Wynn, 472 S.W.2d 750, 753 (Tex. 1971); Sun Operating Ltd. P’ship v. Holt, 984
S.W.2d 277, 292 (Tex. App.—Amarillo 1998, pet. denied) (op. on reh‘g).
8
Analysis
In 2003, when Clark was an equity partner with Cotten Schmidt, J. Lyndell
Kirkley left the firm. Like Clark‘s later dispute, Kirkley contested the amount of
his capital investment repayment under section 12.03(c) of the partnership
agreement, claiming that work in process, accounts receivable, and contingent
fee interests were payable assets of the partnership under that section.5
According to Cotten Schmidt, Clark and Dennis M. Conrad served on a
committee formed to communicate with Kirkley about his claim. Conrad stated in
an affidavit, ―Mr. Clark agreed with the firm‘s position that the method of
calculation of Mr. Kirkley‘s payment was correct under the firm‘s partnership
agreement, and Mr. Clark signed letters on behalf of the firm to Mr. Kirkley
communicating the firm‘s position.‖
Specifically, on September 19, 2003, Clark signed a letter to Kirkley
stating, ―We believe that the . . . check tendered to you is the correct amount
owed to you under the . . . partnership agreement.‖ On November 4, 2003, Clark
signed another letter to Kirkley that detailed the firm‘s reasons that it disagreed
with Kirkley‘s position. The November 4, 2003 letter described Kirkley‘s claim as
―simply wrong.‖ In its last paragraph, the letter stated,
5
In a letter that Kirkley wrote to Randall Schmidt in September 2003,
Kirkley said, ―I am amazed that your attempted repayment to me under
paragraph 12.03(c) disregards the plain language of the Agreement adopted by
all partners.‖
9
We have differing views of what the Partnership Agreement provides
a withdrawing partner is entitled to . . . . In any event, we are willing
to sit down with you in a spirit of compromise and engage in a
professional discussion of the outstanding differences between us in
an attempt to resolve them amicably. . . . Please call me if you are
interested in having such a discussion.
Days later, Clark signed another letter that was addressed to Kirkley and
that expressed disagreement with Kirkley‘s position.6 After the firm sent Clark‘s
last letter to Kirkley, Kirkley did not pursue any claim against the firm related to
the repayment of his capital investment.
In his response to Cotten Schmidt‘s summary judgment motion, Clark said
that during the Kirkley dispute, he was ―simply acting as a point person‖ and was
not a real participant. His affidavit contained the following facts supporting that
position:
three other attorneys in the firm ―took the lead in attempting to resolve the
dispute‖ with Kirkley, but those attorneys eventually stopped
communicating with Kirkley, and Clark agreed to relay Cotten Schmidt‘s
position to him;
the letters that Clark signed were prepared by other partners in the firm;7
Clark ―did not participate in formulating Cotten Schmidt‘s position against
Mr. Kirkley,‖ nor did he ―conduct any inquiry as to whether the position was
correct‖ or even ―provide any input as to Cotten Schmidt‘s position or the
correctness thereof‖; instead, his role ―was simply to communicate Cotten
Schmidt‘s position to Mr. Kirkley and receive his responses‖; and
6
In its motion for summary judgment, Cotten Schmidt said that appellant‘s
letters to Kirkley were sent ―on behalf of the firm.‖
7
Cotten Schmidt does not dispute that a committee drafted the letters and
that Clark signed them.
10
in his communication with Kirkley, Clark was not ―representing [his] own
interest[,] and [he] took no position as to [his] view individually as to the
interpretation of the Partnership Agreement.‖
Clark contends that his affidavit creates fact issues that preclude summary
judgment for Cotten Schmidt. We agree. While Cotten Schmidt provided
evidence (through Conrad‘s affidavit) that Clark served on a committee during
the Kirkley dispute and ―agreed with the firm‘s position that the method of
calculation of Mr. Kirkley‘s payment was correct,‖ Clark countered that evidence
by averring that he did not participate in forming the firm‘s position and took no
position as to the interpretation of the agreement. Clark‘s affidavit, viewed in the
light most favorable to him (as the nonmovant), indicates that he served as a
conduit of Cotten Schmidt‘s position to Kirkley rather than as a creator or
endorser of that position and that he therefore did not have knowledge of all
material facts about the position. See Frazier, 472 S.W.2d at 753.
Cotten Schmidt alleges that Clark‘s assertion that he acted as a conduit for
the other equity partners is false because Clark had the privilege and legal
responsibility to vote on the Kirkley matter. But the evidence does not
conclusively establish that Clark actually voted on the matter or was asked for his
opinion about it. While Conrad‘s affidavit indicates that the dispute was handled
by a committee with input and approval from ―other‖ (although not explicitly ―all‖)
partners, Clark‘s affidavit states only that three partners ―took the lead‖ in
attempting to resolve the dispute with Kirkley and explains that he was never
―asked to provide input‖ on the matter.
11
For these reasons, resolving all doubts in Clark‘s favor on the quasi-
estoppel issue, we hold that Cotten Schmidt did not conclusively establish that it
is unconscionable to allow him to maintain a position inconsistent with one to
which he previously acquiesced on behalf of Cotten Schmidt even if Clark, as an
equity partner, received a benefit in 2003 by Cotten Schmidt‘s retaining money
that it might have otherwise paid to Kirkley. See Lopez, 22 S.W.3d at 864.
Therefore, we sustain Clark‘s second issue, and we reverse the portion of the
trial court‘s order that grants summary judgment for Cotten Schmidt against
Clark‘s breach of contract claim based on Cotten Schmidt‘s quasi-estoppel
defense. See Haire v. Nathan Watson Co., 221 S.W.3d 293, 301 (Tex. App.—
Fort Worth 2007, no pet.) (explaining that when ―reviewing a summary judgment
granted on specific grounds, the summary judgment can only be affirmed if the
ground on which the trial court granted relief is meritorious); GuideOne Ins. Co. v.
Cupps, 207 S.W.3d 900, 903 (Tex. App.—Fort Worth 2006, pet. denied) (same).
Interpretation of the Partnership Agreement
In his first issue, Clark contends that the trial court erred by denying his
motion for summary judgment on his breach of contract claim because, as a
matter of law, Cotten Schmidt misinterpreted section 12.03(c) of the partnership
agreement and therefore undervalued his capital investment repayment.
Cotten Schmidt asserts that its interpretation of section 12.03(c) is correct ―when
all of the words . . . are properly construed in conjunction with the remainder of
. . . the Partnership Agreement.‖
12
The principles of interpreting contracts
―The law applicable to construction of contracts has been applied to
partnership agreements.‖ In re Waggoner Estate, 163 S.W.3d 161, 165 (Tex.
App.—Amarillo 2005, no pet.). ―We construe contracts ‗from a utilitarian
standpoint bearing in mind the particular business activity sought to be served‘
and ‗will avoid when possible and proper a construction which is unreasonable,
inequitable, and oppressive.‘‖ Frost Nat’l Bank v. L & F Dist., Ltd., 165 S.W.3d
310, 312 (Tex. 2005) (quoting Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527,
530 (Tex. 1987)).
When construing contracts, our primary concern is to ascertain the true
intent of the parties as expressed in the contract. NP Anderson Cotton Exch.,
L.P. v. Potter, 230 S.W.3d 457, 463 (Tex. App.—Fort Worth 2007, no pet.).
We must examine and consider the entire contract in an effort to harmonize and
give effect to all provisions so that none are rendered meaningless. Id.; see J.M.
Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). ―We presume that
the parties to the contract intend every clause to have some effect. We give
terms their plain, ordinary, and generally accepted meaning unless the contract
shows that the parties used them in a technical or different sense.‖ FWT, Inc. v.
Haskin Wallace Mason Prop. Mgmt., L.L.P., 301 S.W.3d 787, 794 (Tex. App.—
Fort Worth 2009, pet. denied) (op. on reh‘g) (citations omitted). A specific
contractual provision controls over a general provision. City of The Colony v. N.
13
Tex. Mun. Water Dist., 272 S.W.3d 699, 722 (Tex. App.—Fort Worth 2008, pet.
dism‘d).
Lack of clarity or a disagreement among the parties does not necessarily
create an ambiguity. Universal Health Servs., Inc. v. Renaissance Women’s
Group, P.A., 121 S.W.3d 742, 746 (Tex. 2003). Rather, whether ―a contract is
ambiguous is a question of law that must be decided by examining the contract
as a whole in light of the circumstances present when the contract was entered.‖
Id. ―If, after the pertinent rules of construction are applied, the contract can be
given a definite or certain legal meaning, it is unambiguous and we construe it as
a matter of law.‖ Frost Nat’l Bank, 165 S.W.3d at 312. But if a contract is
ambiguous, then interpretation of the contract presents a fact issue for the jury.
Transcon. Gas Pipeline Corp. v. Texaco, Inc., 35 S.W.3d 658, 665 (Tex. App.—
Houston [1st Dist.] 2000, pet. denied). ―When the [contract] is not ambiguous on
its face, extrinsic evidence may not be used to create an ambiguity.‖ Balandran
v. Safeco Ins. Co. of Am., 972 S.W.2d 738, 745 (Tex. 1998); see CenterPoint
Energy Houston Elec., L.L.P. v. Old TJC Co., 177 S.W.3d 425, 431 (Tex. App.—
Houston [1st Dist.] 2005, pet. denied).
Analysis
The parties dispute the meaning of section 12.03(c) of the partnership
agreement, which states that a withdrawing equity partner is entitled to
―repayment of his or her capital investment in the partnership calculated as an
equal interest in the depreciated book value of all partnership assets less an
14
equal proportion of the partnership long term and capital debt.‖ Specifically,
Clark contends that ―all partnership assets‖ in section 12.03(c) unambiguously
includes notes, accounts receivable, work in process, and contingent fee
interests because those items are included in section 3.02‘s definition of assets.
Cotten Schmidt argues that section 12.03(c)‘s ―all partnership assets‖ phrase
does not include those items for the following reasons:
section 12.03(c) should not be interpreted to allow a withdrawing partner to
obtain a share of accounts receivable and work in process for work
performed by the partnership because sections 12.03(a) and (b) already
give the partner a percentage of those items that are collected after the
partner leaves (thus, 12.03(c), if interpreted in the way that Clark asserts,
would allow for double recovery);
section 5.01 of the partnership agreement says that the partnership uses
the cash basis of accounting, which does not recognize accounts
receivable, work in process, and contingent fee interests;8
because section 12.03(c) uses the words ―capital‖ and ―depreciated book
value‖, it refers only to capital assets that are ―funded with capital
investment or long term/capitalized debt‖; it does not therefore refer to
accounts receivable, work in process, and contingent fee interests, and the
specific limiting language in section 12.03(c) controls over the general
language in section 3.02;
if ―the capital investment repayment calculation were to include accounts
receivable, but Cotten Schmidt never collected certain accounts, then the
interest of the withdrawn Equity Partner would be elevated over the
8
Cotten Schmidt submitted the affidavit of David J. Quick, a certified public
accountant, which affirmed that the cash basis of accounting ―does not recognize
accounts receivable, work-in-process, and contingent fee interests‖ and opined
that the cash basis of accounting is a ―foundational reference point that should be
used for all other . . . terms in the partnership agreement.‖ Clark‘s accountant
believed that the ―cash basis of accounting has nothing to do with valuing a
partnership interest‖ because the ―valuation method [was] described in the
partnership agreement.‖
15
interests of the firm and the remaining Equity Partners, in violation of the
. . . principles underlying the Partnership Agreement‖; and
under Clark‘s argument, shortly after making his $25,000 capital
contribution in 2003, he would have been able to resign and be paid a
substantially greater sum; thus, Clark‘s construction of the agreement
creates an incentive for equity partners to leave the firm.
For the following reasons, Cotten Schmidt has shown that section 12.03(c)
could reasonably be interpreted to exclude notes, accounts receivable, work in
process, and contingent fee interests; thus, Clark‘s interpretation of the
agreement is not conclusively correct. First, the phrase ―depreciated book value‖
precedes ―all partnership assets‖ in section 12.03(c), and the items described in
section 3.02(c) and (d) of the agreement are not depreciable.9 Second, the
phrase ―equal interest in the depreciated book value of all partnership assets‖ in
section 12.03(c) is followed by ―less an equal proportion of the partnership long
term and capital debt,‖ which may indicate that all of section 12.03(c) refers to
capital assets and excludes noncapital assets.10 Third, sections 12.03(a) and (b)
limit a withdrawing equity partner to receiving a portion of noncontingent and
contingent fees when the firm actually collects those fees after the partner
withdraws, while Clark‘s interpretation of section 12.03(c) may entitle him to a
portion of those fees regardless of whether they are ever collected or earned and
9
Clark has not disputed Cotten Schmidt‘s claim that notes, contingent fee
interests, accounts receivable, and work in process are not depreciable.
10
Words in a contract may ―not be plucked from their context and then
construed.‖ King’s Court Racquetball v. Dawkins, 62 S.W.3d 229, 233 (Tex.
App.—Amarillo 2001, no pet.).
16
may therefore render meaningless the limitations of sections 12.03(a) and (b).
See Potter, 230 S.W.3d at 463. Finally, Clark‘s interpretation of section 12.03(c)
might allow him to be paid for his share of an account receivable upon withdrawal
under section 12.03(c) and then be paid again when a fee from the account is
collected under sections 12.03(a) or (b); this double recovery could be
considered unreasonable or inequitable. See Frost Nat’l Bank, 165 S.W.3d at
312.
Therefore, resolving all doubts in Cotten Schmidt‘s (the nonmovant‘s)
favor, we hold that Clark‘s interpretation of section 12.03(c) is not conclusively
correct and that the trial court did not err by denying his motion for summary
judgment. See Parker, 249 S.W.3d at 399; MMP, Ltd., 710 S.W.2d at 60.
We overrule Clark‘s first issue.11
11
Because we hold that Cotten Schmidt‘s interpretation of the agreement is
reasonable, which precludes summary judgment in Clark‘s favor, causes us to
overrule his first issue, and requires us to remand this case to the trial court, we
will not address whether Clark‘s interpretation of the agreement is also
reasonable. In other words, we will not address whether Cotten Schmidt‘s
interpretation of the agreement is conclusively correct, or alternatively, whether
the agreement is ambiguous, because Cotten Schmidt did not move for summary
judgment based on its interpretation. See Gibson v. Park Cities Ford, Ltd., 174
S.W.3d 930, 931 (Tex. App.—Dallas 2005, no pet.) (―Because we conclude Park
Cities Ford did not conclusively establish its entitlement to summary judgment,
we reverse the trial court‘s judgment and remand this case to the trial court for
further proceedings.‖); see also S. Austin Mkt. Place, Inc. v. James F. Parker
Interests, Inc., No. 03-99-00144-CV, 2000 WL 374064, at *4 (Tex. App.—Austin
Apr. 13, 2000, no pet.) (not designated for publication) (―Without deciding
whether an ambiguity exists in the contract, we hold that South Austin has not
conclusively proven that its interpretation of the agreement is the only reasonable
interpretation‖).
17
Conclusion
Having overruled Clark‘s first issue and having sustained his second issue,
we affirm the trial court‘s judgment to the extent that it (1) grants Cotten
Schmidt‘s motion for summary judgment on Clark‘s breach of fiduciary duty claim
(because he did not make a challenge regarding that claim in this court) and
(2) denies Clark‘s motion for summary judgment. But we reverse the judgment to
the extent that it renders a take nothing judgment on Clark‘s breach of contract
claim, and we remand this case to the trial court for further proceedings related to
that claim.
TERRIE LIVINGSTON
CHIEF JUSTICE
PANEL: LIVINGSTON, C.J.; MCCOY, J.; and DIXON W. HOLMAN (Senior
Justice, Retired, Sitting by Assignment).
DELIVERED: October 7, 2010
18