Hall v. Harris County Water Control & Imp. Dist. No. 50, A14-84-237-CV

• Decision Date: 20 December 1984
• Docket Number: No. A14-84-237-CV,A14-84-237-CV
• Citation: 683 S.W.2d 863
• Parties: W.G. HALL Jr., et al., Appellants and Cross-Appellees, v. HARRIS COUNTY WATER CONTROL & IMPROVEMENT DISTRICT NO. 50, et al., Appellees and Cross-Appellants. (14th Dist.)
• Court: Texas Court of Appeals

Page 863

683 S.W.2d 863

W.G. HALL Jr., et al., Appellants and Cross-Appellees, v. HARRIS COUNTY WATER CONTROL & IMPROVEMENT DISTRICT NO. 50 et al., Appellees and Cross-Appellants.

No. A14-84-237-CV.

Court of Appeals of Texas Houston (14th Dist.).

Dec. 20, 1984.

Charles M. Jordan, Dibrell & Green, Galveston, for appellants and cross-appellees.

Larry R. Veselka, Vinson & Elkins, Houston, for appellees and cross-appellants.

Before J. CURTISS BROWN, C.J., and CANNON and DRAUGHN, JJ.

OPINION

CANNON, Justice.

This is an appeal from a summary judgment rendered in favor of Appellees and Cross-Appellants Harris County Water Control & Improvement District No. 50, Hugh H. Jenkins, H. Underwood, E.M. Crum, G.W. Hanks, E.D. Allen, and B.F. Adams. Appellants and Cross-Appellees, W.G. Hall Jr. and CRK, Inc. (CRK), argue that genuine issues of material fact exist which preclude the granting of summary judgment. Cross-Appellants argue that the trial court erred in denying their motion to dismiss on the basis of the statute of limitations.

In January 1977, Hall and Charter Financial Group Inc. (Charter) entered into a joint venture for the purpose of real estate development. Charter had purchased in December of 1974 an 82 acre tract of land in El Lago, Harris County, Texas. After formation of the joint venture, the property was conveyed to CRK. That tract was to be developed under the joint venture into a residential subdivision named "Taylorcrest." It was contemplated that 240-275 homes would be built in three development phases. Negotiations were commenced with Appellee Harris County Water Control and Improvement District No. 50 (the District) to procure water and sewer rights for the subdivision.

R. Eugene Read, an executive vice-president of Charter, and Hugh H. Jenkins, President of the District Board, had preliminary discussions concerning the District's ability and willingness to provide water and sewer service to the proposed subdivision. On January 26, 1977, Read sent a letter to Jenkins. In that letter, Read sought formal answers from the District of several questions concerning the water and sewage service. On February 14, 1977, Jenkins, as President of the Board of Directors of the District, sent his response to Read. In his letter, Jenkins stated that "[t]he District is willing and able to provide water and sewer service for the initial 100 residences of your proposed development on the 82 acre tract in El Lago...." The February 14th letter also stated "[w]e would plan to expand water and sewage services to meet the increased requirements imposed by the additional 175 houses by the time they are constructed. This expansion of facilities within the existing District boundaries would be at District expense." The letter continued with the following paragraph:

As stated previously, a written agreement would be required under the terms of which you would install storm sewer, water distribution and sanitary sewage collection facilities within your development to specifications acceptable to the District. You would then grant utility easements and transfer ownership of the facilities to the District after which the tract under development would be annexed into the district.

As indicated in the letter, the parties on April 19, 1978 executed a written agreement entitled "Contract for Water and Sewer Service." In the written agreement, the District agreed "to provide such services subject to the terms and conditions as herein provided."

In July of 1978, with Section I of Taylorcrest completed, Appellants sought approval of its facilities planned for Section II and services therefore. In order to obtain the needed approval for Section II, the developers' plans and specifications were submitted to the Board's engineers. Appellant Hall arranged to appear before the July 20, 1978 meeting of the Board in order to obtain preliminary approval. Prior to the July meeting, Read had represented the joint venture in all negotiations or transactions with the District. However, Read was not present at the July 20, 1978 meeting.

Prior to Hall's presentation at the meeting, an application for water and sewage service for 92 condominiums was made by American Condominium Group. That request was approved by the Board. Hall then made his request for approval of Section II of Taylorcrest. The exact response of the Board is in dispute. The minutes of the Board meeting reflect that the plans and specifications for Section II were conditionally approved. Hall characterized the conduct of the Board as an "out and out denial." Hall also said that one of the gentlemen at the meeting "was pointing his finger and shaking it and was very strong and determined and said that they weren't committed to do anything at any time and that certainly is not what the contract and the agreement called for." Shortly after the meeting, Hall wrote a letter to Jenkins expressing concern over the Board's change in position and requesting that the Board reconsider its decision on serving Section II.

On September 29, 1978, Hall and Charter filed suit against the District. Jenkins responded to Hall's earlier letter and sought to resolve the "misunderstanding" between the parties. In either February or March of 1979, the Board approved the plans and specifications for Section II of Taylorcrest.

Plaintiffs' Third Amended Original Petition was filed on January 11, 1984. In part, Hall and CRK, Inc. alleged that the January 1977 and February 1977 letters exchanged between the parties constituted a contract which had been breached; the contract executed on April 19, 1978 had been breached; the defendants were estopped from denying the existence of a binding contractual relationship; and the conduct of the individual directors of the Board and that of Adams, as the Superintendent of the District, constituted tortious interference with Plaintiffs' existing contractual rights and prospective business relations.

The District and individual defendants filed a motion to dismiss on the basis of the statute of limitations and filed a motion for summary judgment. The trial court denied the motion to dismiss but granted the motion for summary judgment. Hall and CRK appeal the granting of the summary judgment. By a cross-point of error, the District and individual defendants appeal the denial of the motion to dismiss.

Hall and CRK raise four points of error. The first point of error is that the trial court erred in granting the motion for summary judgment because genuine issues of material fact exist as to Appellants' breach of contract cause of action.

The summary judgment was granted in part because the trial court found there were no genuine issues of fact on the breach of contract cause of action. Appellees argued before the trial court that the exchange of letters in February and March 1977 did not constitute the formation of a contract and that the written contract executed in April 1978 was not breached by the District. Appellants argue that this segmentation of the facts was incorrect and produced an erroneous summary judgment. Appellants believe that the "facts of this case must rather be read as a continuum, or an integrated chain of events which as a whole established a contractual relationship."

The summary judgment proof established that the exchange of letters in early 1977 did not establish a contractual relationship between the parties. The February 1977 letter from Read to Jenkins sought only that Jenkins, as representative of the District, formally answer several questions as to the District's willingness and ability to provide water and sewage service to Taylorcrest. Jenkins' reply letter, in March 1977, merely gave the District's reply to those questions. In addition to those responses, the letter expressly provided that "[a]s stated previously, a written agreement would be required...." A written contract was executed in April of 1978. From these undisputed facts, the trial court was justified in determining that the exchange of letters did not constitute a contract between the parties.

Appellants argue that the District's Board of Directors breached the April 1978 contract by failing to approve, at the July 20, 1978 meeting, the plans and specifications for Section II of Taylorcrest. The District responds by arguing that the Appellants did not comply with the conditions precedent to District's obligation under the contract to provide service and that, even if the conditions were met, there is no proof that the contract has been breached.

The contract does list several conditions with which the developers had to comply. Two of those conditions were: 1) the developers had to acquire approval of the plans and specifications; and 2) the developers had to submit to the District a comprehensive development plan. The only condition precedent specifically raised in Appellees' motion for summary judgment was the failure of the developers to supply the district with a comprehensive development plan. A letter from Jenkins to the developers, dated November 1, 1978, provides some evidence that the district had not yet been provided...