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recognizing that Elfeldt and Bruni each dealt with continuations of preexisting child support obligations
Summary of this case from Seabourne v. SeabourneOpinion
NO. 14–14–00058–CV
04-30-2015
William Wade Bartlett, Appellant v. Lori Lee Bartlett, Appellee
Jason Larman, Conroe, TX, Claude C. “Sonny” Phillips, Humble, TX, Anna Frase, Houston, TX, for Appellant. Janice L. Berg, John F. Nichols Sr., Houston, TX, for Appellee.
Jason Larman, Conroe, TX, Claude C. “Sonny” Phillips, Humble, TX, Anna Frase, Houston, TX, for Appellant.
Janice L. Berg, John F. Nichols Sr., Houston, TX, for Appellee.
Panel consists of Chief Justice Frost and Justices Boyce and McCally.
OPINION
Sharon McCally, Justice
Appellee Lori Lee Bartlett sued appellant William Wade Bartlett for breach of contract after the couple divorced pursuant to an agreed decree and William refused to reimburse Lori for their son's college expenses. After a bench trial, the court awarded Lori damages for the amounts she spent on their son's college expenses during the son's first semester, as well as attorney's fees. William challenges the trial court's judgment in five issues, contending that the trial court abused its discretion by awarding Lori the college expenses because (1) the college-expense provision of the decree is void; (2) the college-expense provision is not enforceable as a contract; (3) enforceability of the provision is precluded by statute; (4) William's performance is excused because his son committed the first material breach by failing to maintain a cumulative “C” grade point average; and (5) the trial court's award of health insurance and uninsured healthcare expenses is precluded by statute.
We overrule William's first, second, third, and fifth issues because the trial court correctly concluded that the college-expense provision is not child support under the Family Code. We overrule William's fourth issue because William waived this defense, and regardless, the record supports a deemed finding that any breach was not material.
I. Background
Lori and William signed an agreed final decree of divorce. They had two children of the marriage, an elder son and younger daughter. In Part 7 of the decree, “Conservatorship and Support,” under a sub-part labeled “Child Support,” William was ordered to pay Lori $1,800 per month until one of several conditions was met and then $1,500 per month until another condition was met. Part 8 of the decree, “Division of Marital Estate,” addressed the properties and debts of Lori and William, the use and sale of the familial residence, contractual alimony, life insurance, federal income taxes, and “Education Beyond High School.” Under the “Education Beyond High School” provision, the parties agreed as follows:
Those conditions are as follows:
1. any child reaches the age of eighteen years, provided that, if the child is fully enrolled in an accredited secondary school in a program leading toward a high school diploma or enrolled in courses for joint high school and junior college credit pursuant to Section 130.008, Education Code, the periodic child-support payments shall continue to be due and paid until the end of the month in which the child graduates;
2. any child marries;
3. any child dies
4. any child's disabilities are otherwise removed for general purposes; or
5. further order modifying this child support.
It is ordered and decreed that William Wade Bartlett shall pay 100% of all reasonable education expenses incurred to send each child either to college or to technical, vocational, or business school of his approval, provided the child is a full-time student and maintains at least a “C” or equivalent grade point average toward the completion of either a college bachelor's degree or a technical, vocational, or business school diploma. This obligation includes tuition, activities fees, laboratory fees, books, room and board, health insurance and related uninsured healthcare expenses, college dues and expenses, and other charges normally related to such education. This obligation may be enforced by the parties or the child.
The son began college in August 2012. Lori sued William in September 2012 for breach of contract because William refused to pay for the son's college expenses for the Fall 2012 semester. Initially, Lori paid for the college expenses. Then, William paid the tuition for the Spring and Summer 2013 semesters. The trial court admitted Plaintiff's Exhibit 7, titled “Amounts Paid by Parties for 2012–2013 School Semester,” which itemized the expenses as follows:
| Amounts Paid by Lori Bartlett, 2012–2013Amounts Paid by Wade Bartlett, 2012–2013 | |||
|---|---|---|---|
| Application Fees for Trinity | $2,688.40 | Tuition Paid 12/7/2012 | $10,130.99 |
| Tuition Fall, Paid 8/3/2012 | $2,904.53 | ||
| Tuition Fall, Paid 9/3/2012 | $2,904.53 | ||
| Tuition Fall, Paid 10/4/2012 | $2,904.53 | ||
| Tuition Fall, Paid 11/5/2012 | $650.00 | ||
| Textbooks for Fall | $350.00 | ||
| Parking Pass for Fall | $73.00 | ||
| Move–In Expenses | $1,470.52 | ||
| Dorm Furnishings | $821.99 | ||
| Textbooks for Spring | $350.00 | ||
| Parking Pass for Spring | $73.00 | ||
| Total | $15,190.50 | Total | $10,130.99 |
The son testified that after the Spring 2013 semester, his cumulative grade point average (GPA) dropped below a “C” average to 1.929. But after finishing the Summer 2013 semester, his cumulative GPA was at least a “C” average.The trial court signed a final judgment in Lori's favor, finding that William breached the college-expense provision of the agreed decree and that the son's “grade point average for his freshman year was at least a ‘C’ average.” The court ordered William to reimburse Lori for the amounts she paid “per Exhibit P–7, attached hereto as Appendix 2, and incorporated herein by reference as though fully set forth herein.” Upon William's request, the court signed findings of fact and conclusions of law, awarding Lori $15,190.50. The court concluded that the college-expense provision was “not a provision for child support under Chapter 154 of the Texas Family Code.” The court also concluded that “the parties intended the provision to be enforceable as a contract, as evidenced by their signatures and agreement.” William appealed.
In Conclusions of Law Nos. 5, 6, and 7, the trial court rejected William's defenses of unclean hands, unenforceable order, and failure of condition precedent, respectively. The trial court did not address William's argument, raised for the first time in his motion for new trial, that “any alleged contract was breached” due to the son's failure to maintain a “C” average.
II. Child Support
William's first, second, third, and fifth issues on appeal are premised on the notion that the college-expense provision is one for “child support.” However, following binding precedent from this court, we hold that the trial court did not abuse its discretion by concluding that the son's college expenses are not child support. First we explain that the college expenses are not child support. Then we address each of William's issues in turn.
A. College Expenses Are Not Child Support
In the context of determining venue, this court has held that a “payment which is not to be made until after the child reaches the age of 18 is not child support.” Busbey v. Busbey, 619 S.W.2d 472, 475 (Tex.Civ.App.–Houston [14th Dist.] 1981, no writ) (holding that the adult son's claim for an $800 money judgment was not a claim for child support when it was based on the father's failure to release the amount of a savings account to the son when he turned 18, pursuant to the marriage settlement agreement). Last year, the Dallas Court of Appeals reaffirmed this understanding of the Family Code: “Child support, by definition, applies only to a child under the age of 18 years who has not yet graduated from high school or a high-school equivalent program.” In re W.R.B., No. 05–12–00776–CV, 2014 WL 1008222, at *4 (Tex.App.–Dallas Feb. 20, 2014, pet. denied). The court distinguished child support from “post-majority support,” which “applies only to a non-disabled child who is 18 years of age or older and is no longer enrolled in high school or a high-school equivalent program.” Id. (citing Tex. Fam.Code Ann. §§ 154.001(a), 154.002(a), 154.006(a) ). The court held unequivocally that “post-majority support is not child support.” Id. Consequently, the current version of Section 154.124(c), which prohibits enforcement of child support by a breach of contract action, did not apply to the mother's claim for post-majority expenses (such as college expenses). See id. at *1, *4.
Section 154.124 provides that parties may enter into a written agreement for child support, and if the agreement is in the child's best interest, the court shall render an order in accordance with the agreement. See Tex. Fam. Code Ann. § 154.124(a) –(b). Paragraph (c) currently provides, “Terms of the agreement pertaining to child support in the order may be enforced by all remedies available for enforcement of a judgment, including contempt, but are not enforceable as a contract.” Id. § 154.124(c). The version of the statute applicable to the Bartletts' agreed decree, however, read as follows: “Terms of the agreement in the order may be enforced by all remedies available for enforcement of a judgment, including contempt, but are not enforceable as contract terms unless provided by the agreement .” Act of May 20, 2003, 78th Leg., R.S., ch. 480, § 1, 2003 Tex. Gen. Laws 1747, 1747 (emphasis added).
William relies heavily on the Texas Supreme Court's decisions in Elfeldt and Bruni. However, the court in those cases applied Section 154.124(c)'s predecessor statute to post-majority payments that were continuations of preexisting child support obligations. See Bruni v. Bruni, 924 S.W.2d 366, 367 (Tex.1996) (applying predecessor statute when the parties entered into an agreement for child support to continue until each child reached the age of twenty-one; agreement itself was enforceable as a contract); Elfeldt v. Elfeldt, 730 S.W.2d 657, 658 (Tex.1987) (applying predecessor statute to an “agreed child support modification order,” which continued the father's periodic child support payments until the children completed four years of college; agreed order was not enforceable as a contract). Those types of orders for continued support are different from the college-expense provision here, which was not included in the “child support” part of the decree. William's periodic child support payments terminate under separate and distinct terms, whereas the college-expense provision was an independent contractual promise included as part of the “Division of Marital Estate.”
William also relies on an Amarillo Court of Appeals decision that involved a materially different decree. See Huffines v. McMahill, No. 07–10–00029–CV, 2010 WL 2836980 (Tex.App.–Amarillo July 20, 2010, no pet.) (mem.op.). Under the agreed decree's “Support” provision, the trial court ordered that “neither party is to pay child support,” but the decree directed the father to provide health insurance and sums for clothing, sports activity fees, school fees, future vehicle needs, and half of the child's unreimbursed medical expenses and college tuition. See id. at *1. The father later refused to pay for half of the child's college tuition, and the mother sued for breach of contract. Id. Of key importance to the Amarillo Court's conclusion that the college-expense provision was child support, the provision was found in the “support” section of the decree and various expenses were listed in lieu of periodic payments of support. See id. at *2. Unlike Huffines, the Bartletts' decree included a separate section for child support that required William to make periodic payments, and the college-expense provision was part of the decree's section regarding division of the marital estate.
Finally, William argues for the first time in his reply brief on appeal that Lori's filing of a post-judgment petition for enforcement was a judicial admission that she sought collection of a child support obligation. William waived this argument by his failure to object to the introduction of contrary evidence at trial. See, e.g., Houston First Am. Sav. v. Musick, 650 S.W.2d 764, 769 (Tex.1983) (“The party relying on his opponent's pleadings as judicial admissions of fact, however, must protect his record by objecting to the introduction of evidence contrary to that admission of fact and by objecting to the submission of any issue bearing on the fact admitted.”); Lentz Eng'g, L.C. v. Brown, No. 14–10–00610–CV, 2011 WL 4449655, at *2 (Tex.App.–Houston [14th Dist.] Sept. 27, 2011, no pet.) (mem.op.) (party waived judicial admission argument by failing to object to the admission of evidence contrary to the alleged judicial admission).He also waived the issue by failing raise it in his opening brief on appeal. See Priddy v. Rawson, 282 S.W.3d 588, 597 (Tex.App.–Houston [14th Dist.] 2009, pet. denied) (arguments raised for first time in reply brief are waived); see also Cameron Cnty. v. Velasquez, 668 S.W.2d 776, 784 (Tex.App.–Corpus Christi 1984, writ ref'd n.r.e.) (argument about judicial admission raised for first time in motion for rehearing was waived).
Of course, Lori's post-judgment petition for enforcement was not a live pleading at the time of trial in this breach of contract action. William has not cited any authority, and this court has found none, to support the notion that a party can judicially admit facts in a post-judgment pleading (seeking enforcement of a prior final judgment) that would operate to undermine the trial court's prior judgment.
In sum, the trial court correctly concluded that the college-expense provision in this case is not for child support, and therefore, the provision is enforceable by contract regardless of Section 154.124(c) of the Family Code.
B. Not a Void Order
In his first issue, William contends the trial court abused its discretion by enforcing a “void order” for support of a non-disabled child who was over eighteen years old and had graduated from high school. William contends that the order or agreement in this case violates the current version of Section 154.124(c), which prohibits the enforcement of child support by contract. See Tex. Fam.Code Ann. § 154.124(c). As such, William argues the contract is void. See, e.g., In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 129–30 (Tex.2004) (“As a rule, parties have the right to contract as they see fit as long as their agreement does not violate the law or public policy.”).
We held above that the college-expense provision is not an agreement for child support. Accordingly, Section 154.124(c) is inapplicable.
Further, even if the college-expense provision was one for child support, the 2003 amendment included a savings clause that made the amendment prospective only. See Act of May 20, 2003, 78th Leg., R.S., ch. 480, § 2, 2003 Tex. Gen. Laws 1747, 1747. The prior version of the statute, applicable to the Bartletts' agreed decree, allowed child support agreements to be enforceable by contract. See id. § 1; Bruni, 924 S.W.2d at 367–68.
William's first issue is overruled.
C. Elfeldt/Bruni Test Not Applicable
In his second issue, William contends the trial court abused its discretion by enforcing the agreed decree as a contractual agreement because it “fails the Elfeldt/Bruni test.” When there is an agreed order or judgment providing for child support and no separate written agreement between the parties, as here, then the version of Section 154.124(c) applicable to the Bartletts required “that the trial court's order provide for enforceability.” Bruni, 924 S.W.2d at 367. Elfeldt held that the statute required the order or decree to “expressly provide ... that its terms are enforceable as contract terms.” Elfeldt, 730 S.W.2d at 657.
See supra note 3.
However, as explained above, the Bartletts' college-expense provision is not an agreement for child support. Thus, we do not apply the Elfeldt/Bruni test or Section 154.124(c).
William's second issue is overruled.
D. Section 154.124(c) Not Applicable
In his third issue, William contends the trial court abused its discretion by enforcing the decree as a contract because enforcement is precluded by the current version of Section 154.124(c), which states that child support is not enforceable by contract. However, as explained above, the Bartletts' college-expense provision is not an agreement for child support. Thus, we do not apply Section 154.124(c).
See also supra note 5.
William's third issue is overruled.
E. Health Insurance and Uninsured Health Care Expenses Not Child Support
In his fifth issue, William contends the trial court lacked statutory authority to order him to pay for health insurance coverage and uninsured health care expenses in connection with the “Education Beyond High School” provision because, in general, “medical support” is considered “child support” under the Family Code. See Tex. Fam.Code Ann. § 154.183(a)(2). However, as explained above, the Bartletts' college-expense provision is not an agreement for child support.
Further, even if health insurance and uninsured health care expenses were child support as a matter of law, we note that Lori did not recover any damages for William's failure to pay health insurance or uninsured health care expenses. Thus, the trial court's conclusion that these expenses were not child support did not probably cause the rendition of an improper judgment. See Tex.R.App. P. 44.1(a) (no judgment may be reversed on appeal on the ground that the trial court made an error of law unless the court of appeals concludes that the error probably caused the rendition of an improper judgment).
William's fifth issue is overruled.
III. First Material Breach
In his fourth issue, William contends the trial court abused its discretion by failing to find that a material breach of the contract occurred when the adult son failed to maintain a cumulative “C” GPA. Accordingly, William contends that he is “excused and discharged from further performance” under the contract: “when the adult son's GPA dropped below a ‘C’ average, the remaining terms of the contract were not subject to enforcement because it constituted a material breach.”
Lori contends appellant waived this issue by not obtaining or requesting a finding on the issue. We agree. “[A] party asserting affirmative defenses in trial before the court must request findings in support of such a defense in order to avoid waiver on appeal.” See Pinnacle Homes Inc. v. R.C.L. Offshore Eng'g Co., 640 S.W.2d 629, 630 (Tex.App.–Houston [14th Dist.] 1982, writ ref'd n.r.e.). “Where the trial court files findings which do not establish any element of the grounds of defense, the party relying upon that defense must file a request for additional findings such as to avoid waiver of that defense on appeal.” (citation omitted)). Here, the trial court specifically rejected three of William's affirmative defenses asserted in his written answer. The trial court did not address “material breach,” as William did not plead this affirmative defense. Although the trial court found in its order (signed before its findings of fact and conclusions of law) that the son's GPA “for his freshman year was at least a ‘C’ average,” the trial court never found that the son did or did not breach the contract. William made no request for such a finding but rather alluded to the son's alleged breach in a motion for new trial.
See Mustang Pipeline Co. v. Driver Pipeline Co., Inc., 134 S.W.3d 195, 197 (Tex.2004) (material breach is an affirmative defense). Unless tried by consent, “the contention that a party to a contract is excused from performance because of a prior material breach by the other contracting party is an affirmative defense that must be affirmatively pleaded or it is waived.” City of The Colony v. N. Tex. Mun. Water Dist., 272 S.W.3d 699, 746 (Tex.App.–Fort Worth 2008, pet. dism'd) ; see also Johnston v. McKinney Am., Inc., 9 S.W.3d 271, 280–81 (Tex.App.–Houston [14th Dist.] 1999, pet. denied) (“Where an affirmative defense is not pleaded or tried by consent, it is waived”; holding that a disclaimer defense was not tried by consent even though the trial court expressly found in its conclusions that the disclaimer was conspicuous and evidence of the disclaimer was introduced without objection).
See Monk v. Westgate Homeowners' Ass'n, Inc., No. 14–07–00886–CV, 2009 WL 2998985, at *3–4 (Tex.App.–Houston [14th Dist.] Aug. 11, 2009, no pet.) (mem.op.) (holding that an affirmative defense cannot be raised for the first time in a motion for new trial and is waived when no findings are obtained).
Lori also contends that even if the son failed to maintain a “C” GPA and “this constitutes a breach of the contract, it was not a material breach.” Assuming for argument's sake that the trial court's finding about the son's GPA related to an affirmative defense of first material breach, that the son's failure to maintain a “C” GPA constituted a breach of contract, and that William did not waive this defense, we hold that the trial court could have reasonably found that any breach was not material as to the expenses that the court awarded to Lori. When a trial court makes a finding on at least one element of a defense, “any omitted findings will be deemed to support the judgment if evidence exists to support such findings.” Lindner v. Hill, 691 S.W.2d 590, 592 (Tex.1985) (citing Tex.R. Civ. P. 299 ). “Whether a party's breach of contract is so material as to render the contract unenforceable is a question of fact to be determined by the trier of fact.” Levine v. Steve S c harn Custom Homes, Inc., 448 S.W.3d 637, 654 (Tex.App.–Houston [1st Dist.] 2014, pet. filed) (citing Henry v. Masson, 333 S.W.3d 825, 835 (Tex.App.–Houston [1st Dist.] 2010, no pet.) ). In determining whether the son's breach was material and whether William's obligations should be discharged, we look to the following circumstances:
(1) the likelihood that the son will cure his failure to perform, taking into account all of the circumstances;
(2) the extent to which the behavior of the son comports with standards of good faith and fair dealing;
(3) the extent to which the son will suffer forfeiture;
(4) the extent to which William will be deprived of the benefit which he reasonably expected;
(5) the extent to which William can be adequately compensated for the part of that benefit of which he will be deprived;
(6) the extent to which it reasonably appears to William that delay may prevent or hinder him in making reasonable substitute arrangements; and
(7) the extent to which the agreement provides for performance without delay, but a material failure to perform or offer to perform on a stated day does not of itself discharge William's remaining duties unless the circumstances, including the language of the agreement, indicate that performance or an offer to perform by that day is important.
See Mustang Pipeline Co. v. Driver Pipeline Co., Inc., 134 S.W.3d 195, 197 (Tex.2004) (citing Restatement (Second) of Contracts §§ 241, 242 (1981) ).In view of these factors, the record supports the trial court's deemed finding that any breach by the son was not material and did not excuse William's obligation to pay for expenses incurred before the breach. First, as the trial court expressly found, the son brought his GPA above a “C” average after the Summer 2013 semester. Thus, the son actually cured any failure to perform that occurred by his having a GPA below a “C” after the Spring 2013 semester. The trial court could have concluded that the son's behavior comported with standards of good faith and fair dealing, as he testified his grades dipped below a “C” average because his attendance suffered after surgery on his knee; he also was a football player for the university. Excusing William's performance as to all semesters (including the Fall 2012 semester for which the son's GPA was above a “C”) would cause the son significant forfeiture. William was not deprived of the benefit he expected because his son remained a full time student toward a bachelor's degree at a university and maintained a GPA above a “C” by the time of trial. And there was evidence that William's refusal to fulfill his obligations under the agreement had nothing to do with the son's failure to maintain a “C” GPA for the Spring 2013 semester. There is no evidence that the son's one-semester lapse prevented William from making “substitute arrangements.” Finally, the agreement itself does not require performance on a semester-by-semester basis, nor does it call for the forfeiture of obligations previously owed to the son (i.e., Fall 2012 expenses) for a breach occurring in a later semester. The agreement itself does not explicitly require the son to reimburse William for expenses incurred for a prior semester if the son ultimately does not obtain a “C” average in a later semester.
The son testified that William did not want to pay for all four years. William testified, as well, about his intentions: “The conversation I've had with my kids is that I would help as much as I can and we want to try to pay for two years and we want your mother to pay for a year and it's my philosophy that they should have a one-year expense.” William did not testify that he was deprived of any benefit by his son's breach.
William also acknowledged during his direct testimony that the clause regarding a “C” GPA does not provide guidance about “whether or not the contract is, at this point, and void” due to the son's breach.
Accordingly, even if William had not waived this affirmative defense, the record supports the trial court's judgment awarding Lori damages in the amount of her expenses incurred before the son's alleged breach. William's fourth issue is overruled.
IV. Conclusion
Having overruled all of William's issues, we affirm the trial court's judgment.
(Frost, C.J., concurring).
Kem Thompson Frost, Chief Justice, concurring.
This is a case of mistaken identity. A condition precedent is mistaken for a covenant. Due to the mischaracterization, the parties and the court apply the wrong analysis to the interpretation and enforcement of the contractual provision at the center of this appeal. Even so, the proper disposition is to affirm. Though I respectfully disagree with the majority's analysis, I concur in the court's judgment.
A Conditional Obligation to Pay College Expenses
Former spouses Lori and William are parties to a contract that requires William to pay for expenses incurred to send their son to college if William approves the college, provided that the son is a full-time student, and the son maintains a grade-point average of at least a “C” toward the completion of his bachelor's degree. This provision contains three conditions precedent that must be satisfied to trigger William's obligation to pay:
The contract provision at issue reads:
... WILLIAM WADE BARTLETT shall pay 100% of the reasonable education expenses incurred to send each child either to college or to technical, vocational, or business school of his approval, provided the child is a full-time student and maintains at least a “C” or the equivalent grade-point average toward the completion of either a college bachelor's degree or a technical, vocational, or business school diploma. The obligation includes tuition, activities fees, laboratory fees, books, room and board, health insurance and related uninsured health-care expenses, college dues and expenses, and other charges normally related to such education.
(1) William must approve the college;
(2) The son must be a full-time student; and
(3) The son must maintain a “C” average;
The only condition at issue in this appeal is the requirement that the son maintain a “C” average. It is undisputed that the son's grade-point average fell below a “C” during the spring semester of his freshman year.
William specifically denied that he approved the college. Although William argued in the trial court that he did not approve the son's college selection, he does not raise this issue on appeal. See Pat Baker Co. v. Wilson, 971 S.W.2d 447, 450 (Tex.1998) (per curiam); Izaguirre v. Rivera, No. 14–12–00081–CV, 2012 WL 2814131, at *2 (Tex.App.–Houston [14th Dist.] Jul. 10, 2012, no. pet.) (holding that appellate courts cannot reverse civil cases on unassigned error) (mem.op.). Nor does William challenge the son's status as a full-time student.
The parties characterize the son's failure to maintain a “C” average as a breach of contract, and the majority considers the son's failure to meet this requirement under a breach-of-contract analysis. Neither the characterization nor the approach is correct. We are not faced with a breach of contract but with a failure of a condition precedent. The difference is significant because it determines which legal analysis applies.
An Unsatisfied Condition Precedent, Not a Breach of Contract
Contractual obligations may be absolute or conditional. When a party is accused of failing to perform under a contract, he may respond that he has not breached the contract because any performance he was to render was conditional, i.e., any duty he may have to perform has not yet arisen because some event has not yet occurred. The son's achieving a “C” average was an event not certain to occur that affected William's duty to perform. The parties intended this event to occur before Lori or the son had a right to William's performance. The parties' use of the term “provided” in their contract is unmistakable language of condition showing that satisfaction of the “C”-average requirement is a condition precedent to William's performance. Under this contractual language of condition, if the event does not occur, William's performance is not owed.
See Solar Applications Engineering, Inc. v. T.A. Operating Corp., 327 S.W.3d 104, 108 (Tex.2010).
See id.
See id. at 109 (noting that the terms “if,” “provided that,” “on condition that,” or similar language is used to make performance conditional); Hirschfeld Steel Co., Inc. v. Kellogg Brown & Root, Inc., 201 S.W.3d 272, 281 (Tex.App.–Houston [14th Dist.] 2006, no pet.) (same).
See id., M7 Capital LLC v. Miller, 312 S.W.3d 214, 220 (Tex.App.–Houston [14th Dist.] 2010, pet. denied) (holding that a successful breach-of-contract claim requires proof of a(1) valid contract, (2) performance or tendered performance by the plaintiff, (3) breach of contract by the defendant, and (4) damages sustained by the plaintiff).
Under the law governing conditions precedent, the condition that the son maintain a “C” average is a strict requirement that precedes William's obligation. The ordinary meaning of the word “maintain” is “to prevent a decline, lapse or cessation from [an] existing state or condition.” In the context of William's conditional obligation to pay the son's college expenses, the use of the term means that the son must continue to have a “C” average throughout his time in college, without any decline, interruption, or lapse in the requisite grade-point average.
See PAJ, Inc. v. Hanover Ins. Co., 243 S.W.3d 630, 639 (Tex.2008).
Black's Law Dictionary 953 (6th ed.1990). See also Owasso Indep. School Dist. No. I–011 v. Falvo, 534 U.S. 426, 433, 122 S.Ct. 934, 939, 151 L.Ed.2d 896 (2002) (defining “maintain” as “to keep in existence or continuance; preserve; retain”).
The contract does not specifically state when William is obligated to perform. Instead, it requires William to pay expenses “incurred.” The condition precedent to William's obligation to pay an expense incurred is the son's maintenance of (at least) “C-average” status. Thus, if an expense is incurred and the son has continually maintained at least a “C” average, then William is obligated to pay. Conversely, if an expense is incurred, and the son has not continually maintained at least a “C” average, then William is not obligated to pay.
The contract does not contain an express provision identifying the point in time at which “C-average” status is determined, but the contract impliedly provides that the status is to be determined at the same time grades are issued and fees and other expenses are charged. If the academic institution the son attended were on a quarter system, then it would be reasonable to determine the son's status vis-à -vis eligibility under the contract and the expenses (if any) owed on a quarter-system basis. Because the son attends an institution where grade-point averages are determined and expenses are “incurred” on a semester basis, it is reasonable to interpret the contract as containing an implied provision that the son must have maintained the required “C average” status each semester to trigger William's obligation.
See Black v. American Bankers Ins. Co., 478 S.W.2d 434, 437–38 (Tex.1972) (holding that medical expenses were incurred by party once party became liable for the expenses).
See Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 850 (Tex.2009) (noting that contract terms are implied when they are “necessarily involved in the contractual relationship, such that the parties must have intended them and must have failed to express them”). Alternatively, the only reasonable interpretation is that the son is required to have a “C” average each semester to trigger William's obligation. See Milner v. Milner, 361 S.W.3d 615, 619 (Tex.2012) (holding that agreement is unambiguous if there is only one reasonable interpretation). The trial court found that the son maintained a “C” grade-point average his freshman year, but the trial court did not find that the son fully performed the contract his freshman year. To the extent the trial court and the majority do not analyze the contract on a semester-by-semester basis, their interpretation of the contract is unreasonable.
When expenses were incurred for the son's first semester of college, the son had no grade-point average and therefore had not dropped below a “C.” Thus, at that time, when William's performance was due, the “C”-average condition precedent was satisfied and William was obligated to pay expenses incurred for the son's first semester. When the initial expenses were incurred for the second semester of college (payments for textbooks, parking, and tuition made in advance for the spring semester), the son had maintained a grade-point average of at least a “C” and therefore the condition precedent was satisfied at that time. During the second semester, however, the son's grade-point average dropped below a “C.” Therefore, the “C”-average condition precedent was not satisfied for the following semester or for any semester thereafter. When expenses were incurred for the son's summer school, William was not obligated to pay them because the condition requiring William's performance was not met. The son's failure to meet the “C”-average requirement vitiated William's conditional obligations under the contract.
The contract does not specify whether the son is required to maintain a cumulative grade-point-average of a “C” or a “C” average each semester of college. We need not determine whether the contract requires that the son maintain a cumulative grade-point average of a “C” or achieve a “C” average each semester because in the spring semester of the son's freshman year he did not achieve a “C” average and his cumulative grade-point average fell below a “C.”
See PAJ, Inc., 243 S.W.3d at 639.
No Continuing Obligation to Pay After Failure to Maintain a “C” Average
The majority is incorrect to the extent it suggests that William has any continuing obligation to pay for the son's college expenses under the contract. William agreed to pay the college expenses providing the son met the specified academic standard (“C” average) until the completion of his degree. The contractual language provides that the grade-point average was to be “maintained,” meaning met on an uninterrupted basis. This particular word choice reflects the parties' intent that William's obligation be conditioned on the son's steady, continuing, and unbroken fulfillment of this minimum academic requirement. Because “maintain” connotes a lack of interruption, it is not reasonable to construe this provision to mean that the son could come into and out of compliance with the condition, getting college expenses paid when he had a “C” average and not getting them paid when he had below a “C” average. “Maintain” means no lapses.
The parties chose contractual language that would make William's funding obligation operate much like an academic scholarship; it does not obligate William to finance an on-again, off-again academic experience, paying the son's college expenses on “C”-average-and-above semesters and not paying them otherwise. One who turns in a “C” performance one semester and fails classes the next unnecessarily increases the expense of a college education and the time necessary to complete the degree plan. Thus, by contracting for maintenance of a “C” average, the parties hedged the risk that the son might convert what is supposed to be a four-year experience into a longer and costlier one. It is clear from their choice of contractual language that the parties intended the son to continually keep at least a “C” average or face the loss of funding. By conditioning payment of the son's college expenses on the son maintaining a minimally acceptable level of academic performance, the parties sought to incentivize the son to stay on track for timely completion of his degree. Nothing in the contract suggests the parties intended for William to underwrite the son's college expenses indefinitely. Material Failure of the Condition Precedent and Inapplicability of the Material–Breach Doctrine
In analyzing the son's failure to maintain a “C” average as a breach of contract, the majority incorrectly suggests that the trial court reasonably could have found that any breach of the “C”-average requirement was immaterial. Even presuming for the sake of argument that a breach-of-contract analysis would be appropriate in this context, the failure to meet the grade requirement was material. The “C” average requirement is the sine qua non of the agreement. The son's failure to satisfy this essential term went to the heart of the parties' bargain. It was a material failure. Indeed, because a condition goes to the root of the contract, the failure of a condition is necessarily material.
A “D” is not a “C.” Saying the difference between a “D” and a “C” is immaterial is like saying that almost scoring a touchdown is the same as scoring a touchdown or that “second place” is no different than “first place.” Grade-point averages, by nature, are precise measurements that set lines of demarcation between one performance category and the next. The metric reflects an exact and unforgiving standard. Anything that falls short of meeting it is a material failure. As nearly any college student can attest, the difference between a letter grade and the one just beneath it is often the difference in getting a scholarship, qualifying for membership in an honor society, or meeting eligibility requirements for athletics. In academia, the difference between one letter grade and another is material.
The lapse in the son's “C”-average status during the spring semester was not cured, as the majority suggests, by the son's registering for summer school and getting a grade that improved his grade-point average, just as the lapse could not be cured by the son's repeating his freshman-year courses, earning stellar marks the second time around, and adding an additional year of expenses to his college career. Because the son did not maintain a “C” average, the contractual condition that he do so was not satisfied and that is a material failure that cannot be undone or cured by application of the material-breach doctrine.
Just as the rules of football do not apply to a game of basketball, the standards of goodfaith and fair dealing do not apply to the failure of conditions precedent. Likewise, neither a benefit-of-the-bargain analysis nor a “significant forfeiture” analysis are germane to a failed condition precedent. Even if these standards did apply, the son's behavior could hardly be said to satisfy them. The majority reasons that the son's grades dropped when his attendance suffered after his knee surgery because the injury prevented him from going to class. In spite of his injury, the son managed to achieve an “A” in both “Conditioning and Weight Training” and in “Country Western Dance I.” He received an “F” in both “Introduction to Chemistry” and “Principles of Microeconomics.” He received a “C” plus and two “C” minuses in his other courses. The son acknowledged that he was absent from class too often and did not timely discuss the situation with his professors.
In sum, William had an obligation to pay for the son's first semester of college, as the trial court ordered in its judgment, because at the time those expenses were incurred, the son had not established a grade-point average and thus had not dipped below a “C” average. Lori and the son admit, however, that the son's grade-point average then dropped below a “C”. The son's failure to maintain a “C” average relieved William of any further obligations under this provision of the contract.
See PAJ, Inc., 243 S.W.3d at 639.
Of course, it is William's parental prerogative to provide his son more than the law or the contract requires or to give his son second chances the contract does not demand. The record evidence shows William has done both. William's actions, properly viewed, are measures of grace rather than an assumption or fulfillment of obligations the contract does not impose.
A Game–Changer: Operation of Texas Rule of Civil Procedure 54
This entire contractual analysis, however, is overshadowed by the operation of an important procedural rule that governs pleading and proof of conditions precedent. In her live petition in the trial court, Lori pled that all conditions precedent to her claim for relief had been performed or had occurred. Therefore, under Texas Rule of Civil Procedure 54, Lori was required to prove only the conditions precedent that William specifically denied. William did not specifically deny that the son maintained a grade-point average of at least a “C.” Because William did not specifically deny the occurrence of this condition precedent, Lori did not have to prove at trial that the condition precedent was satisfied, had been performed, or had occurred. And, because Lori was not required to prove that the “C” average condition precedent had been met, her failure to do so affords no grounds for relief. The trial court's judgment thus should be affirmed, not because the material-breach analysis is correct but because, by operation of rule 54, Lori did not need to show satisfaction of the “C”-average condition.
See Tex.R. Civ. P. 54 ; Community Bank & Trust v. Fleck, 107 S.W.3d 541, 542 (Tex.2002) (per curiam).
The only condition precedent William specifically denied was the condition that he approve the son's college.
See Tex.R. Civ. P. 54 ; Community Bank & Trust, 107 S.W.3d at 542 ; Bencon Management & General Contracting, Inc. v. Boyer, Inc., 178 S.W.3d 198, 203–05 (Tex.App.–Houston [14th Dist.] 2005, no pet.).
See Tex. R. Civ. P. 54 ; Community Bank & Trust, 107 S.W.3d at 542 ; Bencon Management & General Contracting, Inc. 178 S.W.3d at 203–05.
Conclusion
The outcome of this case should turn on the failure of the condition precedent rather than a breach-of-contract analysis. But, the parties and this court treat the condition as a covenant, so the appeal has a strange and ironic ending. The “C”-average condition precedent, though unmet in the evidence, did not have to be proved due to the operation of a procedural rule. Lori was thus relieved of the burden of proving the occurrence of a condition she otherwise could not prove. Though the trial court's contractual analysis is flawed, there is no basis to overturn the trial court's judgment.