GTE Mobilnet of South Texas Ltd. Partnership v. Telecell Cellular, Inc.

• Decision Date: 10 April 1997
• Docket Number: No. 01-94-00760-CV,01-94-00760-CV
• Citation: 955 S.W.2d 286
• Parties: GTE MOBILNET OF SOUTH TEXAS LIMITED PARTNERSHIP, Appellant, v. TELECELL CELLULAR, INC., Larry Feingersh d/b/a Discount Communications, Inc., and Feingersh Young Interests, Inc., Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 286

955 S.W.2d 286

GTE MOBILNET OF SOUTH TEXAS LIMITED PARTNERSHIP, Appellant, v. TELECELL CELLULAR, INC., Larry Feingersh d/b/a Discount Communications, Inc., and Feingersh Young Interests, Inc., Appellees.

No. 01-94-00760-CV.

Court of Appeals of Texas,

Houston (1st Dist.).

April 10, 1997.

Rehearing Overruled June 11, 1997 and

Dec. 11, 1997.

Steven Zager, Gregory S. Coleman, Houston, for Appellant.

Franci N. Crane, James T. McCart, Houston, for Appellees.

Before ANDELL, COHEN and WILSON, JJ.

OPINION ON REHEARING

ANDELL, Justice.

The appellees have filed a motion for rehearing and a motion for rehearing en banc. We deny both motions, but withdraw our previous opinion and issue this one in its stead in order to address some of the appellees' rehearing arguments. The disposition of the case remains the same.

The appellees obtained a jury verdict against the appellant in a multi-cause of action lawsuit. We reverse and remand in part, reverse and render in part, and affirm in part.

Fact Summary

The appellees are authorized agents of GTE Mobilnet (Mobilnet), a limited partnership which consists of several local telecommunications companies. Mobilnet provides cellular telephone service to its customers, who are solicited for Mobilnet by its agents. In return for this solicitation, Mobilnet pays its agents a commission.

The appellees have been authorized agents of Mobilnet since 1987. The appellees' initial agency agreement expired in the fall of 1989, and they began negotiations with both Mobilnet and Houston Cellular, Mobilnet's competitor, for a new agency agreement. During the negotiations with Mobilnet, the appellees and Mobilnet agreed on an addendum to the appellees' agency agreement. Paragraph seven of the addendum states as follows:

Schedule 2, Agent Commission Plan: In the event any other GTE Mobilnet agent signs an Agency Agreement containing a Schedule 2, Agent Commission Plan, with substantially and materially better terms, Agent shall be presented with an opportunity to have said Schedule 2 substituted for the Schedule 2 contained herein.

The appellees signed with Mobilnet, rejecting Houston Cellular.

In the summer of 1992, the appellees complained to Mobilnet that Mobilnet was engaging in promotions with another of its agents while not offering the same promotions to the appellees. Mobilnet told the appellees that (1) these promotions did not fall under paragraph seven, and (2) the appellees had substantially the same schedule two as the other agent. The appellees asserted to Mobilnet that paragraph seven entitled them to every benefit, regardless of its nature, that Mobilnet offered any other agent. Mobilnet, on the other hand, maintained that the appellees were entitled to the best schedule two enjoyed by any other agent, but not to any other benefits such as promotions that Mobilnet might provide to another agent.

This lawsuit followed shortly thereafter. The appellees brought claims for breach of contract, DTPA violations, fraud, breach of the duty of good faith and fair dealing, and tortious interference with business relations. The jury found for the appellees on their breach of contract, DTPA, fraud, and breach of the duty of good faith and fair dealing claims.

Is Paragraph Seven Ambiguous?

In its first point of error, Mobilnet asserts that the trial judge erred by finding paragraph seven ambiguous, and because it is not ambiguous, Mobilnet is entitled to judgment on all the appellees' claims. The trial judge found paragraph seven ambiguous, and submitted the issue of its interpretation to the jury. See Radx Corp. v. Demy, 658 S.W.2d 298, 301 (Tex.App.--Houston [1st Dist.] 1983, no writ) (holding that when a contract is ambiguous, the question of its true meaning is one for the trier of fact).

Whether a contract is ambiguous is a question of law. Polland & Cook v. Lehmann, 832 S.W.2d 729, 739 (Tex.App.--Houston [1st Dist.] 1992, writ denied); Radx Corp., 658 S.W.2d at 301. In determining ambiguity, our "primary concern is to ascertain and give effect to the intentions of the parties as expressed in the instrument ." Radx Corp., 658 S.W.2d at 301 (emphasis added); accord Stephanz v. Laird, 846 S.W.2d 895, 899 (Tex.App.--Houston [1st Dist.] 1993, writ denied). If a contract is worded so that it can be given a certain or definite legal meaning or interpretation, then it is not ambiguous, and the court will construe the contract as a matter of law. Stephanz, 846 S.W.2d at 899; Radx Corp., 658 S.W.2d at 301.

We hold that paragraph seven in not ambiguous. We agree with Mobilnet that its meaning is plain: should any other Mobilnet agent sign in the future an agency agreement that contains a more favorable agent commission plan than the agent commission plan agreed to by the appellees, Mobilnet will present the appellees an opportunity to substitute the more favorable agent commission plan for their own agent commission plan. This is the message clearly expressed in paragraph seven. Because paragraph seven is worded so that it can be given a certain or definite legal meaning or interpretation, it is not ambiguous. See Stephanz, 846 S.W.2d at 899; Radx Corp., 658 S.W.2d at 301. We conclude that the promotions the appellees complain about do not fall within paragraph seven.

The appellees present three arguments in response to Mobilnet's contention that paragraph seven is not ambiguous. First, they point out that some of Mobilnet's own employees did not agree about the meaning of paragraph seven, and that some of those employees thought the language was unclear. However, as we held in Affiliated Capital Corp. v. Southwest, Inc., 862 S.W.2d 30 (Tex.App.--Houston [1st Dist.] 1993, writ denied), the parties' interpretations of the contract are irrelevant if the meaning of the contract is plain from its face. Id. at 33; accord Sun Oil Co. v. Madeley, 626 S.W.2d 726, 732 (Tex.1981). A court errs if it looks to how the parties interpreted the contract when the meaning of the contract is clear from its language. Sun Oil, 626 S.W.2d at 732. ¹

Second, the appellees contend that, because another section of the agency agreement already provided the same content Mobilnet claims was provided in paragraph seven, Mobilnet's construction contradicts the presumption that the parties to a contract intended every clause in their contract to have some effect. The appellees rely on Westwind Exploration, Inc. v. Homestate Sav. Ass'n, 696 S.W.2d 378, 382 (Tex.1985). We recognize the presumption of Westwind and the cases in its line, but the purpose of the presumption is to ensure that courts will not construe a contract in a way that makes a provision meaningless. See id .; County of Maverick, 852 S.W.2d at 705. Our construction does not render any provision meaningless. Furthermore, even if our construction of paragraph seven means that it has the same meaning as the other section of the agency agreement, there is no rule prohibiting a construction under which two provisions have the same or similar meanings. If one provision is construed to mean the same thing as another, there is an overlap; however, the mere existence of an overlap does not mean that one of the provisions is necessarily meaningless.

Third, the appellees urge that we should construe paragraph seven against its drafter, Mobilnet. The rule of construing a contract against its drafter, however, does not apply if the contract is unambiguous. Kincaid v. Gulf Oil Corp., 675 S.W.2d 250, 256 (Tex.App.--San Antonio 1984, writ ref'd n.r.e.); see Forest Oil Corp. v. Strata Energy, Inc., 929 F.2d 1039, 1043 (5th Cir.1991) (observing that "a contract generally is construed against its drafter only as a last resort--i.e., after the application of ordinary rules of construction leave a reasonable doubt as to its interpretation"). Paragraph seven, as we held above, is unambiguous.

In light of the judge's error in not construing paragraph seven as a matter of law, but instead submitting the issue to a fact finder, we reverse and remand the breach of contract claim. We cannot say the judge's error was harmless, because the jury predicated its finding that Mobilnet breached the contract on its finding that the interpretation urged by the appellees was correct. TEX.R.APP.P. 81(b)(1).

On rehearing, the appellees argue that latent ambiguity was "[t]he primary issue at trial." As Mobilnet correctly points out in its response, until the appellees raised the issue of latent ambiguity in their motion for rehearing en banc, the issue had never been presented to us.

Furthermore, latent ambiguity appears

when a contract which is unambiguous on its face is applied to the subject matter with which it deals and an ambiguity appears by reason of some collateral matter. For example, if a contract called for goods to be delivered to "the green house on Pecan Street," and there were in fact two green houses on the street, it would be latently ambiguous.

National Union Fire Ins. Co. v. CBI Indus., 907 S.W.2d 517, 520, 520 n. 4 (Tex.1995). When a latent ambiguity arises, the focus shifts to "the facts and circumstances under which the agreement was made[.]" Bache Halsey Stuart Shields, Inc. v. Alamo Sav. Ass'n, 611 S.W.2d 706, 708 (Tex.Civ.App.--San Antonio 1980, no writ) (cited with approval in National Union, 907 S.W.2d at 520). Yet, as Mobilnet points out in its response, the "[a]ppellees, in their search for a latent ambiguity, point not to circumstances surrounding the drafting of the contract in 1989, but to a string of alleged circumstances from 1990 to 1993, after the contract was already in effect." There is no latent ambiguity here.

In its brief, Mobilnet asked that we render judgment for it on the appellees' breach of contract claim, but we decline to do so. Our agreeing with Mobilnet's construction of the contract does not dispose of the appellees' breach of contract claim; it just means that the appellees' claim is for the breach of paragraph...