Zieben v. Platt

• Decision Date: 08 March 1990
• Docket Number: No. C14-88-879-CV,C14-88-879-CV
• Citation: 786 S.W.2d 797
• Parties: Herbert J. ZIEBEN, Appellant, v. Arthur E. PLATT, Jr., Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 797

786 S.W.2d 797

Herbert J. ZIEBEN, Appellant, v. Arthur E. PLATT, Jr., Appellee.

No. C14-88-879-CV.

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

March 8, 1990.

Paul S. Francis, Houston, for appellant.

Thomas G. Bousquet, Houston, for appellee.

Before PAUL PRESSLER, CANNON and ELLIS, JJ.

OPINION

PAUL PRESSLER, Justice.

Appellee sued appellant on a promissory note. We affirm.

In 1977 Zieben entered into an earnest money contract ("Agreement") to buy 12.6121 acres in Harris County from Shadow Corporation, which was owned by James B. DeGeorge. The parties closed the sale on November 15, 1979. Zieben purchased 5.61787 acres free and clear and secured the remaining 6.99423 acres with a promissory note for $178,800. That note was later conveyed to three trusts of which Arthur Platt is trustee. Zieben built 168 apartment units on the five-acre tract and planned to build an additional 210 units on the seven-acre tract upon expansion of the sewage treatment plant for the area.

The promissory note came due in November 1982 but was extended for an additional two years. By November 1984 the expansion of the treatment plant had not been accomplished. It was completed by the time of trial. A restrictive covenant on the property had not yet been released by the time of trial. When the note came due in 1984, Zieben proposed another extension, but DeGeorge refused and demanded payment. Zieben then gave notice that he was rescinding the note in accordance with Paragraph 7 of the Agreement because the property did not have the necessary utility capacity. DeGeorge refused rescission, and Platt, as trustee, filed suit.

The case was tried to the court. The judge filed findings of fact and conclusions of law, which are attacked by seven points of error. The findings of fact are reviewable for legal and factual sufficiency of the evidence by the same standards that are applied in reviewing the evidence supporting a jury's answer. Okon v. Levy, 612 S.W.2d 938, 941 (Tex.Civ.App.--Dallas 1981, writ ref'd n.r.e.). In a no evidence point of error, only the evidence and inferences that support the challenged finding will be considered, and all contrary evidence and inferences will be disregarded. Davis v. City of San Antonio, 752 S.W.2d 518, 522 (Tex.1988). In a factual sufficiency point of error, all of the evidence will be considered and the finding will be set aside only if the evidence is so weak or the finding so against the great weight and preponderance of the evidence that it is clearly wrong and unjust. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965). Conclusions of law drawn from findings of fact are reviewed to determine their correctness. Mercer v. Bludworth, 715 S.W.2d 693, 697 (Tex.App.--Houston [1st Dist.] 1986, writ ref'd n.r.e.).

Points of error one through four concern Zieben's alleged right to cancel the promissory note. In support of his argument, he cites the following paragraphs in the earnest money contract:

7. It is expressly agreed and understood that Purchaser is buying the herein described property based on the representations of Seller that all utilities are available to the site and will be provided according to a letter, a copy of which is herewith attached. In the event such connection for apartments is not available Purchaser shall have the option of cancelling this contract and all monies previously advanced are to be refunded. Purchaser is aware of the requirement of a lift station to be built by the developer for the service of this tract and agrees to bear the expense of same.

8. Any provision in this contract which shall by its nature impose any obligation or duty upon any party hereto continuing beyond the date of closing will not be cancelled and considered merged into the final papers at closing, but will instead survive the closing of the sale of the property and will continue in full force and effect until all such obligations and duties are fully performed.

The letter referred to in Paragraph 7 is a commitment letter to DeGeorge from the City Department of Public Works dated June 23, 1977, approving the 168 apartment units but placing restrictions on the remainder of the property pending enlargement of the treatment plant. That project was expected to be completed by January 1979. The letter stated that if the apartment units were not under construction within twelve months, a new commitment would have to be secured. Zieben requested a new letter in April 1978. It was sent on April 24th with an expiration date of June 23rd. That latter date was extended by letter of May 11th to "within twelve months." The May 11th letter expired in 1979, and no new commitment letter was requested until March 17, 1981. Therefore, on November 15, 1979, the date of closing, no utility commitment letter was in effect.

In points of error one through four, Zieben claims that the trial court erred in finding that he had no continuing right to cancel the note under Paragraphs 7 and 8 of the Agreement. Zieben further claims that the court erred in finding that he did not exercise his right to cancel the note. Finally, he argues that there was no evidence or, alternatively, insufficient evidence to support the trial court's finding that all utilities were available to the subject property.

Zieben maintains that Paragraphs 7 and 8 were inserted into the Agreement to insure that he would not be obligated to purchase the property if he were unable to develop it because the sewer capacity was not enlarged. Appellee Platt argues, however, that Paragraph 7 gave Zieben the right to rescind only the earnest money contract and not the subsequent note. In the interpretation of contracts, the primary concern is to ascertain and to give effect to the intentions of the parties as expressed in the instrument. To achieve this, the court will examine and consider the entire instrument so that none of the provisions will be rendered meaningless. R & P Enterprises v. LaGuarta, Gavrel & Kirk, 596 S.W.2d 517, 518-19 (Tex.1980).

The language of the Agreement lends itself more readily to Platt's interpretation. The contract begins "This Earnest Money contract is made and entered into by and between Shadow Corporation and Herbert J. Zieben, Trustee." References to "this contract" occur throughout the document, including Paragraphs 7 and 8 ("the option of cancelling this contract" and "any provision in this contract"). "This contract" could mean only the earnest money contract. Furthermore, a right to cancel logically would arise if, at the time of closing, all utilities were not available to the site rather than at some unspecified time in the future. Also, the utilities were available for the five-acre section of the tract at closing. There is no differentiation between the two tracts in Paragraph 7 in language that would have allowed rescission for the one but not for the other.

The larger question, however, is what obligation or duty continued beyond the date of closing. Zieben claims the obligation was the seller's representation that all utilities for development of the site would be provided according to the June 23, 1977, letter from the Department of Public Works. The letter promised only that the additional 210 units would be permitted upon completion and acceptance of the treatment plant expansion. That expansion simply took longer than anyone anticipated. Obviously, DeGeorge had no control over the timing of the project. At trial Zieben acknowledged that DeGeorge could not guarantee the acts of the city.

The...