Opinion
NO. 01-16-00281-CV
06-29-2017
NORTECH, INC., Appellant v. SHAWCOR CANADA HOLDINGS LTD., Appellee
On Appeal from the 190th District Court Harris County, Texas
Trial Court Case No. 2013-51923
MEMORANDUM OPINION
Appellant, Nortech, Inc. (Nortech), challenges the trial court's rendition of summary judgment in favor of appellee, ShawCor Canada Holdings Ltd. (Holdings), in Nortech's suit against Holdings for breach of contract. In two issues, Nortech argues that the trial court erred by granting summary judgment in Holdings' favor because the agreement was subject to only one reasonable interpretation—Nortech's interpretation—and, alternatively, that the trial court erred in granting summary judgment because the agreement's disputed provision is ambiguous. We affirm.
Background
Nortech helps overseas companies obtain goods and services in the U.S. oil and gas industry. In 1997, Nortech and Thermotite, AS, a pipe insulation and coating company, signed a contract in which Thermotite agreed to pay Nortech a commission for certain types of pipe coating work that Thermotite performed on heated pipe.
In 2001, "Bredero-Shaw Company" (Bredero) acquired Thermotite, and, on January 22, 2002, Bredero and Nortech entered into a new commission agreement (the 2002 Agreement) that covered projects that utilized Thermotite technology or products and replaced all prior agreements between Thermotite and Nortech.
On September 20, 2002, Bredero changed its name to Bredero Shaw Company Limited and, at the same time, changed its status to that of a limited liability company.
Bredero was not involved in any projects utilizing the technology or products covered by the 2002 Agreement until 2009.
Section 4 of the 2002 Agreement provided, in relevant part:
Nortech shall receive commissions in accordance with the attached Exhibit B for all projects listed on Exhibit B in the event Bredero is successful winning in such projects . . . .
In addition, Nortech shall receive commissions for any other project where the RFQ or similar is issued to Bredero or an affiliate . . . .
Nortech shall also receive 1/2% commission on any BP projects in the Gulf of Mexico where the RFQ or similar is issued to Bredero or an affiliate . . . .
A Bredero affiliate was awarded the Crazy Horse/Thunder Horse contract, a BP project in the Gulf of Mexico, which is listed in Exhibit B of the Settlement Agreement. Invoices from Nortech to "Bredero Shaw" from 2004 to 2006 demonstrate that, as of January 2006, "Bredero Shaw" had paid Nortech a commission of approximately $19,000 for the Crazy Horse/Thunder Horse project.
Bredero was a wholly owned subsidiary of ShawCor, Ltd. (ShawCor). In 2009, all of ShawCor's U.S. and Canadian pipe coating operations were combined into ShawCor's "Bredero Shaw" Division, which is also referred to as the Bredero Shaw Group.
For ease of reference, we will refer to this group of entities as the Bredero Shaw Group.
In January 2011, three of ShawCor's wholly owned holding companies—ShawCor Canada Holdings Ltd., Bredero, and Shaw Worldwide Services Inc.—merged by means of an "amalgamation" to become Holdings. As part of the amalgamation, all assets and liabilities of the three entities were transferred to Holdings. Although Holdings was not part of the Bredero Shaw Group, some of its assets were, including ShawCor Pipe Protection, LLC (SPP), Bredero Shaw Norway AS, and Bredero Shaw Mexico SA de CV. Among its other interests, Holdings also acquired a 40% interest in Socotherm USA, LLC's (Socotherm) parent company, Fineglade, Ltd. (Fineglade), in November 2010. At the time, Fineglade owned a 95% interest in Socotherm S.p.A., a publicly traded, and independently managed, Italian company. Socotherm S.p.A. owned over 90% of Socotherm Americas, a publicly traded, and independently managed, Argentinian company that owned all of Socotherm USA, LLC. Holdings acquired the other 60% interest in Fineglade in October 2012. Fineglade was not part of the Bredero Shaw Group.
John Tikkanen, Holdings' Executive Vice-President, testified that SPP, Bredero Shaw Norway AS, and Bredero Shaw Mexico SA de CV are all affiliates of Holdings.
After a dispute arose regarding commissions Nortech claimed that it was owed under the 2002 Agreement, Nortech and "Bredero Shaw Company" entered into a May 2012 settlement agreement (the Settlement Agreement). John Tikkanen, Holdings' Executive Vice-President, signed the Settlement Agreement as "president" of "Bredero Shaw Company." When the Settlement Agreement was signed, SPP and another ShawCor company, Bredero Shaw, LLC, were the only two companies that operated under the name "Bredero Shaw," and they were commonly referred to as "Bredero Shaw Company." While SPP "entered into most pipe coating contracts in the United States," Bredero Shaw, LLC did not enter into contracts in 2011 and 2012.
The Settlement Agreement contains two different payment obligations. The first payment obligation is set forth in Section 1, and it requires "Bredero" to "pay Nortech the sum of $1,100,00.00" within "15 days after receipt by Bredero of this Agreement, fully executed by Nortech." "Bredero" is defined as "Bredero Shaw Company."
The $1,100,000 payment due under the Settlement Agreement was made to Nortech by a member of the Bredero Shaw division—ShawCor Pipe Protection, LLC.
The second payment obligation which is set forth in Section 2 of the Settlement Agreement states:
Should Bredero be successful in winning the Lianzi Project, it will pay a commission to Nortech equal to 1.5% of any amount received by Bredero or its affiliates or partners from the execution of the project. Such commissions shall be payable 15 days after Bredero has received payment from the customer. In case payment is made in progress installments, the commission will be paid pro-rata as Bredero receives each installment payment.The Lianzi Project was an oil and gas project off the coast of Africa that was owned by Chevron.
Two competing bids were submitted for pipe coating work on the project. The first was by "Bredero Shaw." According to Jeff Beard, who managed contracts for multiple entities under ShawCor's Bredero Shaw Group in 2012 and negotiated the Settlement Agreement for "Bredero Shaw," the Bredero Shaw Group was preparing to bid on the project when the Settlement Agreement was being negotiated and executed. Beard testified that, although Chevron's formal request for bids on the Lianzi Project and Bredero Shaw Group's submission of the formal bid occurred after the Settlement Agreement was signed, there had been initial communications from "Bredero Shaw" to Chevron prior to that time "providing guidance on the systems, the types of systems, how they would react, and the potential coating locations that [Bredero Shaw] would provide a bid from." According to Beard, "Bredero Shaw" knew that they would be submitting a bid on the project for "three different locations; Norway, Beaumont, Mexico," and "three different entities within the Bredero Shaw organization or ShawCor that are all within the Bredero Shaw coating arm," and he conveyed that information to Nortech's president when they were negotiating the Settlement Agreement.
The final "Bredero Shaw" bid which was submitted on August 20, 2012 generally refers to "Bredero Shaw," prominently references ShawCor, and mentions multiple other entities, such as SPP, all of which are affiliates of Holdings. Tikkanen testified that the "Bredero Shaw" bid was submitted by SPP and that if "Bredero Shaw" had been awarded the Lianzi Project, SPP would have entered into the contract.
The only other bid that was submitted for the pipe coating work at issue was from Socotherm on behalf of itself and its joint venture, Socotherm-Labarge, LLC. Socotherm was, at the time of the bidding, a subsidiary of a publicly traded Italian corporation called Socotherm S.p.A., and it had competed against SPP in the pipe coating business for many years. According to Beard, the Bredero Shaw Group was advised "that [Socotherm was] not an affiliate. They were a separate company or a separate division, and they were competitors," when the Bredero Shaw Group submitted its bid in August 2012, and again in October 2012.
Tikkanen also testified that during a meeting to get approval for the "Bredero Shaw" bid, ShawCor's CEO, Bill Buckley, told him that the Socotherm LaBarge joint venture would be submitting a bid on the Lianzi Project and that they "would be competitors." According to Tikkanen, "[t]here was no cooperation. There was no sharing of prices, no sharing of anything. We were kept absolutely apart." Although Tikkanen testified that Buckley "decided whether or not they were going to submit from Channelview and Socotherm or the Socotherm joint venture," he also explained that ShawCor did not have control over Socotherm's bid because Socotherm's parent company, Fineglade, "operated as an independent company," and SPP and ShawCor did not have any representation on Fineglade's board. He further explained that "ShawCor did not have a controlling interest in the LaBarge Socotherm joint venture. It was a 50/50 joint venture and was very independent."
Although the Socotherm LaBarge joint venture is located in Channelview, Texas, Socotherm has its registered place of business in Houston, Texas.
The Lianzi Project was awarded to Socotherm on November 28, 2012. By that time, Holdings owned 100% of Socotherm's parent, Fineglade.
Nortech demanded payment of a commission under the Settlement Agreement from SPP after it learned that Socotherm was awarded the Lianzi project and that Socotherm's parent company had been acquired by ShawCor.
After Nortech's demands for payment were rejected, Nortech filed a lawsuit against numerous entities, including SPP and Holdings, and asserted claims that included fraud and breach of contract. In October 2015, Nortech filed its Sixth Amended Petition which effectively non-suited all of its claims against all of the defendants, except for its breach of contract claim against Holdings. In its Sixth Amended Petition, Nortech alleged that Holdings was the "Bredero" referred to in the Settlement Agreement, and that Holdings owed it a commission payment under Section 2 of the Settlement Agreement because Socotherm was an affiliate of Holdings and had won the bid to provide pipe coating work on the Lianzi Project.
ShawCor Ltd., ShawCor Canada Holdings Ltd., ShawCor Inc., Bredero Shaw, LLC, and John Douglas Tikkanen, Holdings' Executive Vice-President, were all named as defendants in Nortech's original petition. ShawCor Pipe Protection, LLC was added as a defendant in Nortech's second amended petition.
After Nortech non-suited the other defendants, Holdings filed an amended motion for summary judgment based upon its interpretation of the Settlement Agreement. Holdings stated in its motion:
Although it is not clear that the parties truly intended for "Bredero" to mean [Holdings], as opposed to SPP, [Nortech] is correct in alleging that [Holdings] is legally the successor-in-interest to Bredero by virtue of the 2011 amalgamation. And, [Nortech] is certainly entitled to plead its breach of contract claim however it sees fit. Thus, for purposes of this [summary judgment] Motion, it is assumed, and stipulated, that Bredero as used in the Settlement Agreement means [Holdings].Holdings argued that the plain language of Section 2's payment obligation expressly conditioned payment of a commission to Nortech upon Bredero, i.e., Holdings, winning the Lianzi Project. Holdings further argued that because the undisputed evidence demonstrated that Socotherm was awarded the Lianzi Project, not Holdings, the condition precedent to payment was never satisfied.
In December 2015, Nortech filed its cross-motion for partial summary judgment and response to Holdings' motion. In its motion, Nortech argued that Holdings' interpretation of the contract, i.e., that "Bredero" only means Bredero, and not its affiliates, is "irrational and unreasonable" and inconsistent with the facts surrounding the negotiation and execution of the agreement.
After a hearing, the trial court denied Nortech's motion for partial summary judgment and granted Holdings' amended motion. This appeal followed.
Summary Judgment
Nortech and Holdings each argue that its interpretation of the Settlement Agreement is the only reasonable interpretation, and therefore, it is entitled to summary judgment on Nortech's breach of contract claim.
A. Standard of Review and Applicable Law
When both parties move for summary judgment and the trial court grants one motion and denies the other, we review both sides' summary judgment evidence and render the judgment the trial court should have rendered. S. Crushed Concrete, LLC v. City of Hous., 398 S.W.3d 676, 678 (Tex. 2013); see also Dall. Nat. Ins. Co. v. Sabic Americas, Inc., 355 S.W.3d 111, 117 (Tex. App.—Houston [1st Dist.] 2011, pet. denied).
In this case, both parties moved for summary judgment based on their differing interpretations of the Settlement Agreement. We attempt to ascertain the parties' true intentions as expressed in the language they chose when construing contracts, and we avoid unreasonable constructions when possible. Plains Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296, 305 (Tex. 2015). We consider the entire contract, giving effect to all provisions so that none are rendered meaningless. Id. We give words their plain, common, or generally accepted meaning unless the contract shows that the parties used words in a technical or different sense. Id.
Moreover, "[w]e construe contracts from a utilitarian standpoint bearing in mind the particular business activity sought to be served and will avoid when possible and proper a construction which is unreasonable, inequitable, and oppressive." Frost Nat'l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310, 312 (Tex. 2005) (internal quotations omitted). In doing so, we ascertain and give effect to the contracting parties' "intent expressed in the text as understood in light of the facts and circumstances surrounding the contract's execution, subject to the limitations of the parol-evidence rule." Americo Life, Inc. v. Myer, 440 S.W.3d 18, 22 (Tex. 2014) (citing Hous. Expl. Co. v. Wellington Underwriting Agencies, Ltd., 352 S.W.3d 462, 469 (Tex. 2011)). "Facts and circumstances that may be considered include the commercial or other setting in which the contract was negotiated and other objectively determinable factors that give context to the parties' transaction." Americo Life, 440 S.W.3d at 22.
Whether a contract is ambiguous is a question of law that must be decided by examining the contract as a whole in light of the circumstances present when the contract was entered. Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996). A contract is not ambiguous if its language can be given a certain or definite meaning. Plains Expl. & Prod. Co., 473 S.W.3d at 305. "Absent ambiguity, contracts are construed as a matter of law." Id. If, however, a contract is ambiguous—meaning it is subject to two or more reasonable interpretations—then summary judgment is not proper. See id. Extrinsic evidence of the parties' intent is not admissible to create an ambiguity, but the contract may be read in light of the circumstances surrounding its execution to determine whether an ambiguity exists. Id. "Mere disagreement over the interpretation of an agreement does not necessarily render the contract ambiguous." Id.
A party moving for summary judgment pursuant to Rule 166a(c) must show that no genuine issues of material fact exist and that it is entitled to judgment as a matter of law. TEX. R. CIV. P. 166a(c); Nixon v. Mr. Prop. Mgmt. Co., Inc., 690 S.W.2d 546, 548 (Tex. 1985). In deciding whether there is a disputed material fact issue precluding summary judgment, evidence favorable to the nonmovant will be taken as true, and every reasonable inference must be indulged in favor of the nonmovant and any doubts resolved in its favor. Nixon, 690 S.W.2d at 548-49.
As an appellate court, reviewing a summary judgment on contract interpretation, we are not bound by the interpretation assigned by the parties; instead, we independently determine the intent of the parties as shown by the written instruments. See City of Bunker Hill Vill. v. Mem'l Vills. Water Auth., 809 S.W.2d 309, 310-11 (Tex. App—Houston [14th Dist.] 1991, no writ) (holding that court was not bound by parties' agreement that contracts were unambiguous and holding that contracts were ambiguous); see also Tamimi Glob. Co., Ltd v. Kellogg Brown & Root, L.L.C., 483 S.W.3d 678, 710 (Tex. App.—Houston [14th Dist.] 2015, no pet.).
B. Analysis
Section 2 of the Settlement Agreement states, in pertinent part, that "[s]hould Bredero be successful in winning the Lianzi Project, it will pay a commission to Nortech equal to 1.5% of any amount received by Bredero or its affiliates or partners from the execution of the project." Holdings stipulated for purposes of summary judgment that it is the "Bredero Shaw Company" who entered into the Settlement Agreement with Nortech.
Holdings argues that the first clause—"[s]hould Bredero be successful in winning the Lianzi Project"—creates a condition precedent that must be satisfied to trigger any obligation on its part to pay Nortech a commission, and that based on the plain language of the contract, that condition precedent can only be satisfied if Holdings, itself, wins the Lianzi Project. According to Holdings, there is undisputed evidence that Socotherm was awarded the project, not Holdings, and therefore, the condition precedent was never satisfied. Thus, no commission is owed to Nortech under the Settlement Agreement.
Holdings explained during oral argument that it stipulated that it was the party to the Settlement Agreement because even if SPP was the actual party who executed the agreement with Nortech, neither SPP nor Holdings was awarded the Lianzi Project, and therefore, the result would be the same.
Nortech argues that Holdings' interpretation is not reasonable because it creates an illusory promise. "Promises are illusory and unenforceable if they lack bargained-for consideration because they fail to bind the promisor." Royston, Rayzor, Vickery, & Williams, LLP v. Lopez, 467 S.W.3d 494, 505 (Tex. 2015) (citing In re 24R, Inc., 324 S.W.3d 564, 566-67 (Tex. 2010)). Stated otherwise, a promise is illusory when the performance of a promise is "potentially subject to the whim or caprice" of one contracting party. Hackberry Creek Country Club, Inc. v. Hackberry Creek Home Owners Ass'n, 205 S.W.3d 46, 61 (Tex. App.—Dallas 2006, pet. denied). We can consider parol evidence in order to show a failure of consideration. See Audubon Indem. Co. v. Custom Site-Prep, Inc., 358 S.W.3d 309, 316 (Tex. App.—Houston [1st Dist.] 2011, pet. denied) (holding parol evidence may be considered "to show want or failure of consideration, and to establish the real consideration given for an instrument") (quoting DeLuca v. Munzel, 673 S.W.2d 373, 376 (Tex. App.—Houston [1st Dist.] 1984, writ ref'd n.r.e.)). A contract interpretation that renders a promise illusory is unreasonable. See generally Innovate Tech. Solutions, L.P. v. Youngsoft, Inc., 418 S.W.3d 148, 152-53 (Tex. App.—Dallas 2013, no pet.) (holding that party's interpretation was unreasonable because party "effectively retain[ed] the option of discontinuing performance at any time" rendering promise "illusory"); see generally Air Am. Jet Charter, Inc. v. Lawhon, 93 S.W.3d 441, 444 (Tex. App.—Houston [14th Dist.] 2002, pet. denied) (stating that contracts are to be construed in favor of mutuality of obligation).
Nortech also argues that Holdings' interpretation renders the "win" condition meaningless because it is undisputed that Holdings conducts no operations, submits no bids, and performs no pipe coating work.
Because the Settlement Agreement did not require Holdings to submit a bid on the Lianzi Project, the decision to bid was left solely in Holdings' hands. Thus, under Holdings' interpretation, Holdings could decide to foreclose Nortech from any chance of receiving a commission by unilaterally choosing not to bid on the project. The undisputed evidence demonstrates that Holdings, who conducts no operations, and does not bid on any projects or perform any work, did not bid on the project. Thus, Nortech argues, Holdings' promise to pay Nortech a commission if Holdings won the bid was illusory. See Hackberry Creek Country Club, 205 S.W.3d at 61 (stating promise is illusory when performance of promise "potentially subject to the whim or caprice" of one party to contract). Therefore, Holdings' interpretation is unreasonable because it renders Holdings' promise illusory. See generally Innovate Tech. Solutions, 418 S.W.3d at 152-53.
Holdings also argues that the circumstances surrounding the negotiation and drafting of the Settlement Agreement also support its interpretation. We need not address this argument, however, because even if Holdings is correct on this point, its interpretation is still unreasonable because it creates an illusory promise.
Nortech's interpretation is also unreasonable. Nortech argues that when considering the surrounding circumstances, the Settlement Agreement can only be understood to mean that if any of Holdings' affiliates wins the Lianzi Project, including Socotherm, then Holdings has also won the project. The surrounding circumstances that Nortech argues inform the contract's text and provide necessary context consist primarily of facts associated with the parties' past performance of a prior related contract—the 2002 Agreement. Specifically, Nortech argues that the following "objective facts" are admissible evidence of the circumstances surrounding the negotiation and execution of the Settlement Agreement:
Nortech also argues that Holdings has mischaracterized its position and that contrary to Holdings' assertions, Nortech does not interpret "Bredero" to mean "Bredero and its affiliates." Rather, Nortech's position is that a win on the Lianzi Project by any of Holdings' affiliates can only be understood as a win for Holdings, and that any other interpretation would render the condition illusory.
(a) the [2002 Agreement] contains language almost identical to the Settlement Agreement and was executed by the same parties; (b) the term in the commission agreement stated that Nortech would receive commissions on the Crazy Horse/Thunder Horse project if "Bredero" (without mention of affiliates) was "successful winning" that project; (c) an indirectly-owned, third-tier affiliate of Bredero was awarded the project; and (d) Nortech was actually paid commissions for the project [sometime between 2004 and 2006].
Assuming, without deciding, that we can consider this evidence for purposes of our analysis, these facts do not support Nortech's position, particularly in light of the differences between the language utilized in the 2002 Agreement and Settlement Agreement. Unlike the Settlement Agreement, the 2002 Agreement contained three conditional payment clauses; one of which was triggered when Bredero was successful in winning a bid, and two of which were triggered when "Bredero or an affiliate" was successful in winning a bid. Thus, unlike the Settlement Agreement, Nortech was expressly entitled to receive a commission when "Bredero or an affiliate" was successful in winning a bid pursuant to the 2002 Agreement. In light of this distinction, the fact that Nortech was paid a commission pursuant to the 2002 Agreement after a Bredero affiliate was awarded the Crazy Horse/Thunder Horse project does not support Nortech's broader reading of the Settlement Agreement, that a win by any Bredero affiliate is necessarily a win for Bredero. We further note that any commission payments made to Nortech as a result of the Crazy Horse/Thunder Horse contract most likely fell under the third conditional payment clause which was triggered when "Bredero or an affiliate" was successful in winning a bid on "any BP project in the Gulf of Mexico" because the record reflects that a Bredero affiliate was awarded the Crazy Horse/Thunder Horse contract, which is a BP project in the Gulf of Mexico.
Moreover, Nortech's interpretation is unreasonable because it renders the Settlement Agreement's phrase "or its affiliates" meaningless. In construing a contract, we attempt to ascertain the parties' true intentions as expressed in the language they chose, and we avoid unreasonable constructions when possible. Plains Expl. & Prod. Co., 473 S.W.3d at 305. We consider the entire contract, giving effect to all provisions so that none are rendered meaningless. Id.; see also Frost Nat'l Bank, 165 S.W.3d at 312 (requiring courts to avoid, whenever possible and proper, construction which is unreasonable, inequitable, and oppressive).
Section 2 of the Settlement Agreement states that "[s]hould Bredero be successful in winning the Lianzi Project, it will pay a commission to Nortech equal to 1.5% of any amount received by Bredero or its affiliates or partners from the execution of the project." (emphasis added). If the reference to "Bredero" in the first clause means Bredero Shaw Company, or its successor-in-interest, Holdings, and all of that company's affiliates, as Nortech argues, then the use of "or its affiliates" in the second clause of Section 2 is superfluous and meaningless. Nortech, however, argues that its interpretation does not render the phrase "its affiliates and partners" meaningless or superfluous because this phrase was only added to clarify Nortech's rights, regardless of which entity received payments, and does not change the parties' intended meaning of Section 2's first clause. We disagree. If the parties' use of the term Bredero in the first clause is broad enough to encompass all of Bredero's affiliates, then the parties had no need to include the term "Bredero or its affiliates" in the second clause.
Neither Nortech's interpretation of the Settlement Agreement's conditional payment provision that a win by any of Holdings' affiliates is a "win" for Holdings, nor Holdings' interpretation that only a win by Holdings itself satisfies the provision is a reasonable interpretation for the reasons discussed above. Rather, the only reasonable interpretation of the Settlement Agreement's conditional payment provision, when considered in light of the surrounding circumstances, is somewhere in the middle.
The circumstances surrounding the execution of the Settlement Agreement indicate, among other things, that: (1) Holdings was a holding company that did not bid on projects or carry out independent operations, (2) Nortech was informed by Beard that "Bredero Shaw" was in the process of bidding on the Lianzi project for "three different locations; Norway, Beaumont, Mexico," and "three different entities within the Bredero Shaw organization or ShawCor that are all within the Bredero Shaw coating arm," (3) Holdings was not part of ShawCor's coating arm which was referred to as the Bredero Shaw Group, (4) Socotherm was a competitor of the Bredero Shaw Group and was not part of that division when the final bids were submitted in August 2012 or when Socotherm was awarded the Lianzi Project in October 2012, and (5) Nortech knew that Socotherm was submitting a bid on the pipe coating component of the Lianzi Project when it executed the Settlement Agreement and Nortech subsequently lobbied against awarding the contract to Socotherm. See, e.g., Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587 (Tex. 1996) (interpreting contract's pricing provision in light of the parties' knowledge of impending deregulation and their uncertainty about the impact this would have on gas prices).
Holdings' predecessor, Bredero, was also a holding company who did not conduct independent operations.
In light of these circumstances, the only reasonable interpretation of Section 2 is that a win by ShawCor's business unit known as the Bredero Shaw Group, i.e., the group of entities that actually bid on the Lianzi Project, is a win for Holdings for purposes of the Settlement Agreement. See Clayton Williams Energy, Inc. v. BMT O & G TX, L.P., 473 S.W.3d 341, 348 (Tex. App.—El Paso 2015, pet. denied) (stating that when there is only one reasonable reading of contract, parties' intent is pure question of law and court must interpret contract terms as written and not how parties would like them to have been written). It does not mean, as Nortech argues, all of Holdings' various affiliates, some of which are not part of the Bredero Shaw Group and are not even involved in pipe coating operations.
Unlike Holdings' interpretation, this broader interpretation does not create an illusory promise because if the Bredero Shaw Group, i.e., the companies that actually bid on the Lianzi Project, had won the bid, then Nortech would have been entitled to receive a commission. It also does not render any portion of the remaining Settlement Agreement meaningless or superfluous because the phrase "Bredero or its affiliates and partners" can be understood to mean that the amount of Nortech's commission is based on payments made to any of Holdings' affiliates or partners, not just the ones who bid on the project.
Thus, when considered in light of the surrounding circumstances, the Settlement Agreement is subject to only one reasonable interpretation, and it is therefore, unambiguous. Accordingly, we must construe it as a matter of law. Plains Expl. & Prod. Co., 473 S.W.3d at 305 ("Absent ambiguity, contracts are construed as a matter of law."). The Settlement Agreement only entitled Nortech to collect a commission if the Bredero Shaw Group, i.e., the group of entities that actually bid on the Lianzi Project, won the contract, and the undisputed evidence is that the contract was awarded to the Bredero Shaw Group's competitor, Socotherm. Accordingly, Nortech is not entitled to a commission under the Settlement Agreement.
Nortech also argues that if this Court determines that Holdings' construction is reasonable, Nortech's equally reasonable interpretation creates an ambiguity that must be resolved by a jury. See Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 529 (Tex. 1987) (stating that when contract on which suit is brought is ambiguous, "summary judgment is improper because the interpretation of the instrument is a question of fact for the jury"); Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983) (stating that contract is ambiguous if it is subject to more than one reasonable interpretation). Because we hold that the Settlement Agreement is unambiguous in light of the surrounding circumstances, we need not consider Nortech's alternative argument. We overrule Nortech's two issues.
Conclusion
We affirm the trial court's judgment.
Russell Lloyd
Justice Panel consists of Justices Keyes, Higley, and Lloyd.