Dallas/Fort Worth Intl v. Inet Airport Systems, In

Case: 15-10390 Document: 00513461159 Page: 1 Date Filed: 04/12/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
Nos. 15-10390
April 12, 2016
Lyle W. Cayce
Clerk
DALLAS/FORT WORTH INTERNATIONAL AIRPORT BOARD,
Plaintiff - Appellant
v.
INET AIRPORT SYSTEMS, INCORPORATED; MICHAEL F. COLACO;
HARTFORD FIRE INSURANCE COMPANY, INET AIRPORT SYSTEMS,
L.L.C., As Successor in Interest to Inet Airport Systems, Incorporated,
Defendants - Appellees
----------------------------
CONSOLIDATED WITH 15-10600
THE DALLAS/FORT WORTH INTERNATIONAL AIRPORT BOARD,
Plaintiff - Appellant
v.
INET AIRPORT SYSTEMS, INCORPORATED; INET AIRPORT SYSTEMS,
L.L.C., As Successor in Interest to Inet Airport Systems, Incorporated,
Defendants - Appellees
Appeals from the United States District Court
for the Northern District of Texas
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Nos. 15-10390, 15-10600
Before CLEMENT and HAYNES, Circuit Judges, and GARCIA
MARMOLEJO, District Judge.*
HAYNES, Circuit Judge:
The Dallas/Fort Worth International Airport Board (“DFW”) appeals the
final judgments of the district court against DFW in favor of INET Airport
Systems, Inc. (“INET”), 1 Michael F. Colaco, and Hartford Fire Insurance
Company (“Hartford”). The cross-motions for summary judgment and this
appeal relate to a contract between DFW and INET for construction at DFW
Airport. The parties accuse each other of breaching the contract following a
dispute regarding the proper configuration and installation of rooftop air
handling units for passenger boarding bridges in Terminal E of the DFW
Airport. In addition to INET, DFW sued Colaco individually as an officer and
director of INET, and Hartford as the bonding agency for INET on the contract
at issue. INET counterclaimed for breach of contract against DFW, claiming
entitlement to money DFW did not pay INET that INET alleged it was owed
under their agreement, as well as attorneys’ fees and legal expenses. INET
also counterclaimed for unjust enrichment and money had and received
against DFW.
The district court granted summary judgment against DFW on INET’s
affirmative defenses of excuse and prior material breach of the contract by
DFW and also dismissed claims against Colaco. The court dismissed DFW’s
claims against Hartford based on Hartford’s statute of limitations defense.
Finally, the district court denied in part DFW’s motion for summary judgment,
* District Judge of the Southern District of Texas, sitting by designation.
1 In its summary judgment opinion and after a bench trial to determine the damages
owed to INET, the district court found that INET Airport Systems, Inc., was succeeded by
INET Airport Systems, L.L.C., the successor in interest to INET. Michael Colaco dissolved
INET Inc. as its sole shareholder and director, selling its assets, including amounts receivable
under INET Inc.’s contract with DFW, to INET L.L.C. We refer to both entities as “INET.”
2
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Nos. 15-10390, 15-10600
which claimed that INET breached the contract, and granted DFW’s motion in
part as to INET’s counterclaims of unjust enrichment and money had and
received. DFW timely appealed these final judgments, and those appeals were
consolidated before us. 2
Because we find that material factual disputes remain unresolved, we
REVERSE the district court’s grant of summary judgment in favor of INET on
INET’s claims of excuse and prior material breach of the contract by DFW, and
REMAND for trial. We also REVERSE and REMAND the district court’s grant
of summary judgment for Hartford, as disputes of material fact remain over
whether DFW filed suit against Hartford within the statute of limitations.
Finally, we VACATE the district court’s subsequent final judgment awarding
damages to INET because it was based on the district court’s summary-
judgment determination that DFW should be liable to INET.
I. Jurisdiction and Standard of Review
We have jurisdiction over DFW’s appeals of the final orders of the district
court under 28 U.S.C. § 1291. We review a district court’s interpretation of a
contract de novo. See Interstate Contracting Corp. v. City of Dallas, 407 F.3d
708, 712 (5th Cir. 2005) (ICC). The contract in this case is governed by Texas
law, under which contract interpretation and whether a contract is ambiguous
are questions of law. Id. In interpreting a contract, courts must “ascertain
and give effect to the parties’ intentions as expressed in the writing itself,”
considering the entire writing and seeking to “harmonize and give effect to all
the provisions of the contract so that none will be rendered meaningless.” El
Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 805 (Tex. 2012)
2 The parties do not mention or challenge the district court’s dismissal of claims
against Colaco, nor its grant of DFW’s motion for summary judgment as to INET’s
counterclaims of unjust enrichment and money had and received. We do not address those
claims in this appeal. See Hughes v. Johnson, 191 F.3d 607, 613 (5th Cir. 1999).
3
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(citations omitted). We review de novo the district court’s decision on summary
judgment. Cooley v. Hous. Auth. of City of Slidell, 747 F.3d 295, 297 (5th Cir.
2014).
II. Background
A. Factual Background
DFW and INET entered into Contract No. 9500377 (the “Contract”) in
August 2009 for a project in Terminal E of DFW Airport, in which pre-
conditioned air and rooftop air handling units (“Rooftop Units”) were to provide
conditioned air (cooling and heating) to passenger boarding bridges and
aircrafts parked at terminal gates. INET won the Contract through a
competitive bidding process and agreed to follow the Contract’s terms, plans,
and specifications for the construction work. In submitting its bid proposal,
INET certified that its proposal constituted prima facie evidence that it had
examined “the site of the proposed work, the proposal, plans, specifications,
and contract forms,” and satisfied itself as to the materials furnished,
requirements of the Contract, plans, specifications, and site conditions.
The plans and specifications for the Contract included detailed drawings,
the precise Rooftop Units and parts to be used, approved manufacturers, and
performance requirements. Under the Contract and these plans, INET was
obligated to install operational Rooftop Units that were required to use “30%
ethylene glycol/water” supplied by DFW Airport’s piping system. INET also
agreed to provide schematic drawings of control sequence operations and the
required components for a fully operational control sequence that would
“provide auto defrost of the coils” within the Rooftop Units, through which the
ethylene glycol/water (“EG Water”) would cycle.
Campos Engineering (“Campos”) prepared the design for the project for
DFW, including the plans and specifications. INET was not allowed to
substitute products or designs for those agreed upon in the Contract documents
4
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without authorization from DFW. The Contract also contained provisions
requiring INET to alert DFW immediately to any “apparent error or omission
in the plans or specifications” so that DFW could make a final decision about
how to proceed. If the completion of the Contract required extra work for which
payment had not been delineated, the Contract provided that this extra work
should be covered by “a written change order” issued by DFW with “agreed
prices for performing the change order work.” DFW was to reject any claim for
payment not covered by written change order or supplemental agreement.
Trouble arose when INET expressed concern to DFW that the Rooftop
Units specified in the plans and selected by INET in the Contract might not
function correctly with the EG Water mixture. INET informed DFW of this
potential problem during the construction kick-off meeting on October 14,
2009—specifically, that the EG Water supplied by DFW’s pipes would be at
sub-freezing temperatures, causing ice to build up on the outer surface of the
Rooftop Unit coils and keeping the coils from performing as required. After
receiving no immediate response to this concern, INET submitted a “Request
for Information,” or “RFI,” asking how it should proceed (hereinafter, “RFI-2”).
DFW, Campos, and INET corresponded about this issue through
extensive discussions that resulted in two proposals for how to add control
sequences (“Control Sequence Proposal”) or revised piping (“Revised Piping
Proposal”) to the Rooftop Units to prevent potential defects. The record does
not indicate that the parties ever reached any agreement on whether to adopt
these proposals or how to proceed. Eventually, DFW notified INET that INET
had failed to meet the substantial completion deadline and that DFW would
begin assessing liquidated damages. DFW declined to pay at least one invoice
submitted by INET after this date, and in April 2012, DFW made a claim
against Hartford on the performance bond. DFW, INET, and Hartford
corresponded throughout 2012. DFW had the remaining work on the Rooftop
5
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Nos. 15-10390, 15-10600
Units completed by a substitute contractor by contract dated July 9, 2013.
In June 2012, DFW took official action related to the Contract with
INET. The parties dispute whether this action terminated the Contract and if
not, when the Contract was terminated or abandoned. Timing is relevant
because DFW filed suit on August 5, 2013, and the district court dismissed
DFW’s claims against Hartford as barred by Texas’s one-year statute of
limitations for suits on performance bonds. See TEX. GOV’T CODE § 2253.078.
B. Procedural History
In response to the parties’ various motions, the district court granted
DFW’s motion for summary judgment in part, holding INET could not prevail
on its counterclaims for unjust enrichment and money had and received. The
district court determined the case turned on which party first breached the
Contract and concluded the Contract placed the risk of defects in the designs
and specifications on DFW under Texas law, that DFW had admitted the
designs and specifications were defective, and that DFW therefore breached
the Contract by failing to acknowledge the defects and issue appropriate
change orders. The district court granted in part INET’s motion for summary
judgment, on its affirmative defenses of excuse and prior material breach of
the Contract by DFW, 3 dismissed DFW’s claims against Hartford, Colaco, and
INET from the case, and after a bench trial on damages and attorneys’ fees,
issued a final judgment awarding INET $1,293,728.74 in damages and fees,
plus interest.
III. Discussion
The dispute between the parties turns on where the Contract allocated
3 Although the district court noted that INET did not seek judgment on its
counterclaim for breach of contract, the district court observed that “DFW does not dispute
that it is withholding monies on work that was completed by INET” and urged the parties to
“agree on the amounts withheld.” After a bench trial, the district court apparently awarded
INET that agreed amount, plus attorneys’ fees and costs.
6
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Nos. 15-10390, 15-10600
the risk of defective plans and specifications, whether the plans and
specifications were in fact defective, and what was required of each party once
INET claimed it found a defect that would prevent its performance. We
conclude it was error to grant summary judgment for INET on the basis that
DFW first breached the Contract. The record contains disputes of material fact
regarding which party prevented performance by failing to fully cooperate in
arriving at a solution once the parties discovered defects.
A. Defective Plans and Specifications and the Contract’s Allocation of Risk
The district court correctly concluded there was no dispute of material
fact regarding whether the plans and specifications were defective and had to
be changed for the Rooftop Units to function properly. We therefore must
determine how the Contract allocated the risk of defective plans and
specifications. The district court concluded that the Contract allocated this
risk to DFW and that DFW breached the Contract by insufficiently cooperating
with INET to resolve problems created by the defective plans and
specifications. We conclude that while DFW partly bore the risk of defective
plans and specifications under this Contract, the language of the Contract
requires both parties to participate in resolving such defects.
Texas law allows contracting parties to allocate the risk of defective
designs, plans, and specifications to an owner (in this case, DFW), rather than
the contractor (INET), but this “require[s] contractual language indicating an
intent to shift the burden of risk to the owner.” ICC, 407 F.3d at 720; see also
Millgard Corp. v. McKee/Mays, 49 F.3d 1070, 1071–73 (5th Cir. 1995). The
language of this Contract allocates the risk of defects at least partially to DFW,
in that it requires DFW to cooperate through a change order or other actions
in the event that INET brings a discrepancy to DFW’s attention. For example,
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Special Provision 4 6.0(D), under the title “Warranty of Construction,” provides:
Unless a defect is caused by the negligence of the Contractor
or subcontractor or supplier at any tier, the Contractor shall not
be liable for the repair of any defects of Owner furnished material
or design furnished by the OWNER or for the repair of any damage
that results from any defect in material or designs furnished by
the OWNER.
Special Provision 31.0 states:
In case of conflict, discrepancies, errors or omissions among
the various Contract documents, the matter shall be submitted
immediately by Contractor to the Construction Manager for
decision, and such decision shall be final. Any Work affected by
such conflicts, discrepancies, errors or omissions which is
performed prior to the Construction Manager[’s] determination
shall be performed at the Contractor’s risk.
These provisions seem to allocate the risk of defects to DFW. Yet, the
Contract allocated some duties to INET as well, duties that required INET to
cooperate or take other actions in this case to help resolve the discrepancy
between the Contract’s requirements and the designs and specifications.
Various General Provisions support INET’s duties to: (1) inspect the plans and
specifications and bring up discrepancies during the bidding process; 5 (2)
otherwise assume full responsibility for the compatibility of equipment and
parts; 6 and (3) fill in details necessary to complete the work as specified,
4 The Contract provides that its provisions are intended to be complimentary, but in
case of a discrepancy, Special Provisions govern over General Provisions. We thus begin with
the Special Provisions of the Contract.
5 General Provision 20-6 of the Contract clearly places a duty on INET to make a pre-
bid inspection and to satisfy itself about the requirements of the plans and specifications
relative to the Contract’s requirements.
6 INET was to provide air handling units “complete with ethylene glycol/water
cooling/heating coils” and “related controls,” including providing “detailed schematic
drawings showing all components and their arrangement and their relation to the control
system,” and a “sequence of operation description of each control system.”
8
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Nos. 15-10390, 15-10600
including “[n]ecessary controls to provide auto defrost of the coils.” 7 INET
assumed “sole responsibility” for compliance with the Contract documents, and
“full responsibility for satisfactory operation of all component parts of the
mechanical systems to assure compatibility of all equipment and performance
of the integrated systems in accordance with the requirements of the
specifications.” Furthermore, INET had to strictly conform its performance to
the designs, plans, and specifications of the Contract. 8 Yet, the Contract
allowed INET to submit potential errors or discrepancies to DFW and obtain
approval for a change in the design. 9
Crucially, if the engineer or DFW determine changes are necessary after
INET points out a potential error, the Contract provides for the parties to agree
upon how to adjust for the change. DFW can make alterations to the work
under General Provision 40-2, but such alterations “shall be covered by
‘Change Orders’ issued by [DFW],” and must be in writing where the orders
would change the Contract’s price. The Contract defines a change order as “[a]
written order to [INET] covering changes in the plans, specifications or
proposal quantities and establishing the basis of payment and contract time
adjustment, if any, for the work affected by such changes.” The Contract
7 INET was to provide “all other required components to accomplish the specific
control sequence specified” in the Contract and “all other required components for a complete
operating system.”
8 These duties were specified in General Provision 60-7, requiring strict conformance
with “the contract, plans, or specifications” for all materials, or else they “shall be rejected,”
and in General Provision 90-7, entitled “PAYMENT WITHHELD,” stating that “[DFW] may
withhold all or part of any payment otherwise due [to INET]” for “failure to execute the work
in strict accordance with the Contract Documents.”
9 The Contract also provides that the engineer has authority to “decide any and all
questions which may arise as to the quality and acceptability of materials furnished, work
performed, and as to the manner of performance,” and “shall decide all questions which may
arise as to the interpretation of the specifications or plans relating to the work, [and] the
fulfillment of the contract on the part of [INET].” The “engineer” referred to by the Contract
is apparently Campos, DFW’s engineering firm; Bill Kumpf was the “engineer of record.”
9
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Nos. 15-10390, 15-10600
elsewhere notes that if changes affect the contract price, they may be made
“only by written Contract Change Order, approved and executed by both
[DFW] and [INET].” Therefore, any change order to adjust for the defects
discovered by INET required the assent of both parties. 10
In sum, the Contract in this case contains a mixture of provisions that
place the risk of defects on both DFW and INET. INET agreed that it would
provide a control sequence and other mechanisms to ensure defrosting of the
coils within the Rooftop Units; that it had inspected the plans and
specifications and would point out potential problems before bidding; that all
equipment would be compatible with DFW’s system; and that it would fill in
details as necessary. INET discovered a defect in the plans and specifications,
which contained very detailed requirements that INET was not free to
disregard or redesign without DFW’s approval. Therefore, DFW also agreed to
provide change orders if INET pointed out defects in the plans, and the
Contract allows DFW and INET to resolve any such defects discovered after
the Contract’s execution by mutual agreement. The district court correctly
concluded DFW had a duty to cooperate with INET and issue a change order if
necessary to correct defects. However, INET’s agreement was also required for
such a process under the Contract, and INET had duties that required it to
cooperate in finding a solution to any defects. We therefore address whether
there are disputes of material fact in the record regarding which party
breached the Contract by failing to cooperate and find a solution to the defect.
10 Other courts have described change orders as agreements requiring mutual assent.
See, e.g., Roberts, Taylor & Sensabaugh, Inc. v. Lexington Ins. Co., No. H-06-2197, 2007 WL
2592748, at *8 (S.D. Tex. Sept. 5, 2007); cf. Hathaway v. General Mills, Inc., 711 S.W.2d 227,
228–29 (Tex. 1986) (“Parties have the power to modify their contracts. A modification must
satisfy the elements of a contract: a meeting of the minds supported by consideration.”). The
language of this Contract and underlying legal principles make clear that INET’s assent was
required before the plans and specifications could be revised in this case. We reject INET’s
argument that DFW had the power and obligation to order such revisions unilaterally.
10
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B. Breach of the Contract
Texas law excuses a party’s performance under a contract when the other
party’s breach prevents its performance. See, e.g., Transverse, L.L.C. v. Iowa
Wireless Servs., L.L.C., 617 F. App’x 272, 277 (5th Cir. 2015); 11 L. H. Land
Painting Co. v. S & P Constr., Inc., 516 S.W.2d 14, 16 (Tex. Civ. App.—Fort
Worth 1974, writ dism’d). 12 Texas courts have held that an owner may not
ignore defects recognized by a contractor, but must cooperate to modify the
contract when necessary. Cf. N. Harris Cty. Junior Coll. Dist. v. Fleetwood
Constr. Co., 604 S.W.2d 247, 254 (Tex. Civ. App.—Houston [14th Dist.] 1980,
writ ref’d n.r.e.) (finding an owner breached the contract by refusing to alter
specifications related to a concealed condition the contractor pointed out);
Emerald Forest Util. Dist. v. Simonsen Constr. Co., 679 S.W.2d 51, 54 (Tex.
App.—Houston [14th Dist.] 1984, writ ref’d n.r.e.) (“If appellee had notified
both the engineer and the owner in writing of the wet sand conditions, it would
have been relieved of liability.” (emphasis omitted)). From this authority, the
district court concluded there were no disputes of material fact regarding
whether DFW first breached the Contract by failing to agree to a solution to
the defective plans and specifications. We disagree.
The parties discussed two possible modifications of the plans and
specifications that might have addressed the defects INET discovered, known
11 Although Transverse is not “controlling precedent,” it “may be [cited as] persuasive
authority.” Ballard v. Burton, 444 F.3d 391, 401 n.7 (5th Cir. 2006) (citing 5TH CIR. R. 47.5.4).
12 See also Nitram, Inc. v. Cretan Life, 599 F.2d 1359, 1371 (5th Cir. 1979) (“It is a
general principle of contract law that if one party to a contract prevents or makes impossible
performance by the other party, the latter’s failure to perform will be excused and the
offending party will not be permitted to recover damages for nonperformance. But this
principle has no application when the party whose performance was prevented entered into
the contract fully aware of the obstacles which would prevent his performance.” (citations
omitted)); Owens v. William H. Banks Warehouses, Inc., 202 F.2d 689, 692 (5th Cir. 1953)
(same).
11
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as the Control Sequence Proposal and the Revised Piping Proposal. The record
is clear that INET did not agree to the Control Sequence Proposal, as INET
admits in its brief. 13 In March 2010, Campos sent DFW another possibility,
the Revised Piping Proposal, which DFW forwarded to INET that same month.
A dispute of material fact remains regarding whether INET rejected the
Revised Piping Proposal outright or hindered the process of agreeing to this or
another solution. INET sent DFW requests for information related to the
Revised Piping Proposal in April 2010, requesting details and formal
documentation from DFW so that INET could “price this change.” DFW
responded with information about some of the technical details of the Revised
Piping Proposal, but the record does not show that DFW or INET ever formally
priced this change or modified their Contract to incorporate the Revised Piping
Proposal. Based on its requests for information, INET argues DFW breached
the Contract by failing to cooperate in issuing a change order and incorporating
the Revised Piping Proposal into the Contract.
However, DFW argues INET rejected the Revised Piping Proposal,
pointing to correspondence between INET and DFW. 14 For example, in April
13 INET states that it “informed DFW that the changes to the control sequence,
without more, would not be sufficient to ensure that the units would perform as required
without freezing.”
14 INET objects to much or all of this evidence as self-serving and not
contemporaneous. Cf. Anco Insulations, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, Pa.,
787 F.3d 276, 281–82 (5th Cir. 2015). We find these objections meritless. Evidence proffered
by one side to support or defeat a motion for summary judgment will inevitably appear “self-
serving.” Nevertheless, we have accepted testimony like what is in the record in this case as
giving rise to inferences that create disputes of material fact when properly construed for the
nonmoving party. See, e.g., In re Yarn Processing Patent Validity Litig., 498 F.2d 271, 287
(5th Cir. 1974); see also C.R. Pittman Constr. Co. v. Nat’l Fire Ins. Co. of Hartford, 453 F.
App’x 439, 443–44 (5th Cir. 2011) (holding summary judgment was improper because,
although “self-serving,” affidavits were not wholly conclusory and were based on personal
knowledge). We do so here. We also reject INET’s argument that Campos instructed INET
to proceed with the two different proposals at issue, placing INET in a difficult situation
without a formal change order. The record evidence does not suggest beyond dispute that
Campos or DFW gave INET a unilateral and binding instruction to incorporate either of the
12
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Nos. 15-10390, 15-10600
2010, INET sent a letter to DFW requesting approval to spend over $60,000 to
fix the defect by installing alternate units. In June 2010, INET sent another
letter to DFW indicating that “[a]s a result of the ongoing discussions”
regarding the units, INET proposed alternative side-mounted units at an
additional cost of just over $20,000. DFW also highlights deposition testimony
by a DFW employee that INET “never agreed” to the Revised Piping Proposal.
This non-conclusory evidence creates a dispute of material fact on this issue.
Significant evidence in the record suggests that the parties attempted to
agree about how to address INET’s concerns, and that INET and DFW both
took strong positions about the necessary solution. In these circumstances the
Contract required both parties to participate in resolving defects. Any
contractual modification or change order required the mutual assent of the
parties, and questions of mutual assent are fact based. Sifting through the
evidence to determine whether the parties reached agreement on a contractual
modification is a task ill-suited for summary judgment on this record. For
these reasons, and because disputes of material fact remain regarding whether
DFW or INET breached the Contract by preventing an agreement about how
to address defects in the Contract’s plans and specifications, we reverse the
district court’s grant of summary judgment for INET.
C. Hartford’s Statute of Limitations Defense
The district court dismissed DFW’s claim against Hartford based on
Hartford’s affirmative defense that the claim was barred by the statute of
limitations. DFW filed suit against Hartford and INET on August 5, 2013. In
Texas, “[a] suit on a performance bond may not be brought after the first
anniversary of the date of final completion, abandonment, or termination of
the public work contract.” TEX. GOV’T CODE § 2253.078. The statute of
proposals.
13
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limitations would bar DFW’s suit if the Contract was terminated or abandoned
before August 5, 2012. The district court construed a resolution by the DFW
Board as a trigger date for limitations and alternatively found the Contract
abandoned “years” before DFW filed suit. We disagree and reverse the district
court’s grant of summary judgment for Hartford on this claim.
1. Termination of the Contract
It is undisputed that on June 7, 2012, the Board passed the following
resolution (“Resolution”):
BE IT RESOLVED BY THE [DFW] BOARD
That the Chief Executive or designee be authorized to
terminate Contract No. 950377 . . . and to pursue any other relief
to which the Board may be entitled.
On the same document containing the resolution, the “Description” section
stated: “This action will terminate Contract No. 9500377 [with INET].” The
Action section of the document repeated the language of the Resolution itself
just above the bullet-point “Description.” Under “Justification,” the document
says “Board staff recommends the termination of this contract and seeks
authorization to pursue any relief to which the Board may be entitled by reason
of the contractor’s default.”
We conclude the Resolution was not self-executing and that it is not
beyond dispute that the Contract was terminated or abandoned before August
2012, as Hartford was required to prove to succeed in a motion for summary
judgment on its affirmative defense. See generally Int’l Shortstop, Inc. v.
Rally’s, Inc., 939 F.2d 1257, 1264–65 (5th Cir. 1991) (noting that where the
moving party would bear the burden of proof at trial for an affirmative defense,
the party must produce evidence that “would entitle it to a directed verdict if
the evidence went uncontroverted at trial” (citation omitted)). We construe the
DFW Board’s Resolution like any other statute, as it is the equivalent of a
municipal ordinance. See generally Bd. of Adjustment of City of San Antonio
14
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Nos. 15-10390, 15-10600
v. Wende, 92 S.W.3d 424, 430 (Tex. 2002) (“Courts use the same rules that are
used to construe statutes to construe municipal ordinances.”); TEX. TRANSP.
CODE § 22.074(b)–(c) (providing that a joint airport board operates with “all the
powers” of each constituent agency, including respective cities). The language
of the Resolution is unambiguous and provides only that the Board gave the
CEO authority to terminate the Contract. See Alex Sheshunoff Mgmt. Servs.,
L.P. v. Johnson, 209 S.W.3d 644, 651–52 (Tex. 2006) (noting that the enacted
language is what constitutes the law and that the inquiry asks whether that
language is unambiguous). We therefore reverse the district court’s conclusion
that the Resolution and extraneous evidence showed DFW terminated the
Contract through the June 7, 2012, Board Resolution or before August 2012. 15
2. Abandonment of the Contract
The district court concluded in the alternative that INET abandoned the
contract long before August 2012, noting in summary fashion that DFW
alleged that after October 2010, INET would do no further work on the
Contract. As with termination, Hartford has the burden to show the parties
abandoned the Contract before August 2012. See Int’l Shortstop, 939 F.2d at
1264–65. “‘Abandonment’ is principally a matter of intention which must be
established by clear and satisfactory evidence,” and if relying on conduct, “the
acts relied upon must be positive, unequivocal and inconsistent with the
existence of the contract.” Capitol Steel & Iron Co. v. Standard Accident Ins.
15 Even apart from the Resolution, we conclude that disputes of material fact remain
regarding whether the Contract was terminated before August 2012. Contrary to the
requirements for assessing a summary judgment motion, the district court construed
inferences in Hartford’s favor in relying on vague, contemporaneous statements by DFW
employees to conclude that the DFW Board intended to terminate the Contract before August
2012. These statements are insubstantial evidence, if any, of that proposition, and there is
evidence to the opposite effect in the record. See generally Int’l Shortstop, 939 F.2d at 1265
(noting that when intent is at issue, summary judgment is disfavored because the issue of
intent often involves credibility determinations).
15
Case: 15-10390 Document: 00513461159 Page: 16 Date Filed: 04/12/2016
Nos. 15-10390, 15-10600
Co., 299 S.W.2d 738, 740–41 (Tex. App.—Amarillo 1952, no writ) (citations
omitted). We discern no such positive, unequivocal conduct that is inconsistent
with the existence of a continuing Contract between INET and DFW. Rather,
record evidence creates a fact issue about whether either party intended to
terminate or abandon the Contract before August 2012. Accordingly, we
reverse the district court’s grant of summary judgment for Hartford and
remand for further proceedings.
IV. Conclusion
Because disputes of material fact remain, we REVERSE the grants of
summary judgment for INET and Hartford and REMAND this case for the
claims to proceed to a fact finder. 16 Since the district court granted INET
damages and fees based on its summary judgment rulings, we also VACATE
the district court’s June 16, 2015, judgment making those awards.
16We do not reach several other claims the parties mention on appeal that the district
court found moot or did not address, including how to resolve INET’s affirmative defenses
and whether INET violated the Contract through its dissolution and the assignment of the
Contract to its successor. The district court may reach these issues as necessary on remand.
We also decline to grant summary judgment for DFW, as it requests, for the same reason
that we reverse the grant of summary judgment for INET: namely, disputes of material fact
remain regarding the timing and details of which party breached the Contract in this case.
16