SHARON McCALLY, Justice.
Zachry Construction Corporation (Zachry) sued the Port of Houston Authority of Harris County, Texas (the Port) for breach of contract arising from the Bayport Terminal Complex Phase 1A Wharf and Dredging Contract. Following a three-month jury trial, the trial court entered a final judgment, awarding Zachry damages in the amount $19,992,697, plus pre- and post-judgment interest. The Port appeals the final judgment in eleven issues. Zachry also brings three issue on cross-appeal. We reverse and render.
In 2003, the Port solicited bids to construct a wharf at the Bayport Ship Channel. The wharf consisted of five sections, each approximately 330 feet in length. Zachry's bid proposed building the wharf "in the dry" by using a U-shaped, frozen earthen wall to seal out water from Galveston Bay from the construction site. Zachry proposed to freeze the wall by sinking 100-foot pipes into the wall and circulating chilled brine through the pipes. Then, Zachry would install drilled shafts into the ground, pour a concrete deck on top of the drilled shafts and dirt using the ground as the bottom of the concrete form, excavate the dirt under the deck, and place revetment to stabilize the slope. After completing the wharf, Zachry would breach the freeze wall, flooding the area, and remove the remainder of the freeze wall so that ships would be able to dock at the wharf and unload their cargo.
An advantage of working "in the dry" instead of "in the wet" is that fewer "NOx" emission credits would be consumed. The Port accepted Zachry's bid because of the environmental benefits of using the freeze wall. On June 1, 2004, Zachry entered into the Bayport Phase 1A Wharf and Dredging Contract with the Port for the construction of a 1,660-foot wharf. The Port had concerns about the possible impact of the frozen soil on adjacent structures but provided in the contract that Zachry would control the means and methods. Zachry hired RKK-SoilFreeze Technologies, which, in turn, hired Dan Mageau of GeoEngineers, a geotechnical engineer, to design the freeze wall.
The contract also provided a strict timeline. Specifically, Zachry was to complete construction of the wharf by June 1, 2006. Zachry was also to meet an interim deadline of February 1, 2006 — Milestone A — by which a portion of the wharf would be sufficiently complete to allow delivery of large ship-to-shore cranes that were to be shipped from China. The contract also provided that Zachry's sole remedy for any delay on the project was an extension of time.
In March 2005, the Port decided to extend the original wharf Zachry was constructing by 332 feet. Zachry submitted price quotes for the wharf extension on April 13, May 18, and July 11. The Port and Zachry executed Change Order 4 for the wharf extension on September 27, 2005. Change Order 4 extended the dates for Milestone A to February 15, 2006, and final completion to July 15, 2006.
From Zachry's perspective, Change Order 4 incorporated the April 13 proposal as further modified by the May 18 and July 11 proposals. So, Zachry had Mageau design a frozen cutoff wall (frozen COW), a perpendicular wall to the main freeze wall, to split the project into two phases: a west side including Area A, and an east side. Zachry sent that September 9, 2005 frozen COW design to the Port for "review," not "approval." Zachry believed it had the right to use the frozen cutoff wall and to do so with "uninterrupted work process."
Ultimately, in late November 2005, Zachry abandoned the frozen COW and switched to an "in the wet" scenario. The Port urges the course was Zachry's voluntary change in recognition that the freeze wall was "killing the schedule." Zachry urges that it was due to the Port's rejection of the frozen COW (Zachry's means and methods) and unwillingness to depart from the contract deadlines.
In May 2006, the Port notified Zachry that, due to Zachry's delay, the Port would begin withholding liquidated damages from payments on Zachry's monthly invoices. After withholding $2.36 million in liquidated damages, the Port voluntarily stopped withholding liquidated damages.
In late 2006, Zachry sued the Port for breach of contract, i.e., the R & R response, by failing to comply with Change Order 4 and section 5.10 of the contract, for the difference between the cost that Zachry would have incurred had it been allowed to complete the wharf "in the dry," i.e., using the frozen cutoff wall, and the actual cost Zachry incurred in completing the wharf "in the wet," i.e., without the frozen cutoff wall. Zachry also sued the Port for withholding liquidated damages for delays in the amount of $2.36 million, and for the Port's withholding of $600,000 as a purported offset for alleged defective dredging under Change Order 1. The Port filed a counterclaim for attorney's fees under section 3.10 of the contract, which provides that Zachry is liable for the Port's attorney's fees if Zachry brings a "claim" against the Port and "does not prevail with respect to such claim." Over two years after suing the Port, Zachry declared the wharf complete on January 26, 2009.
After a three-month trial, the case was submitted to the jury. The jury found that the Port had breached the contract by failing to comply with Change Order 4 and section 5.10, and found compensatory damages in the amount of $18,602,697 for the Port's breach of the contract. These damages represented Zachry's increased costs for switching to working in the "wet." The jury found that 58.13% of those damages were for delay or hindrance.
The jury did not find that the Port failed to comply with the contract by withholding $600,000 from the Port's payment on the amounts invoiced by Zachry for defective dredging.
The trial court instructed the jury that the Port had failed to comply with the contract by failing to pay Zachry $2.36 million withheld as liquidated damages. Thus, the jury needed only to determine whether the Port was entitled to offset; the jury found for the Port on the offset defense in the amount of $970,000 for Zachry's defective work on the Wharf fenders.
The jury found reasonable attorney's fees for the Port with respect to Zachry's claim relating to Change Order 4 and/or section 5.10: (1) $10,500,000 for trial; (2)
In its final judgment, the trial court awarded Zachry damages in the amount of $19,992,697 — $18,602,697 plus $2.36 million in liquidated damages, less the $970,000 offset for the defective fenders, pre-judgment interest in the amount of $3,451,022.40, post-judgment interest on the total sum award of $23,443,719, and taxable costs. The trial court did not award the $600,000 withheld for defective dredging that the jury refused to award to Zachry. The trial court did not award attorney's fees to the Port.
In this appeal, the Port claims that the evidence is legally and factually insufficient to support the jury's findings on breach, causation, and damages; governmental immunity bars Zachry's claim for R & R damages; the no-damages-for-delay clause bars Zachry's delay damages; Zachry's failure to obtain a change order bars its recovery of R & R damages; Zachry's failure to provide written notice of a breach bars its R & R damages; governmental immunity bars Zachry's "pass-through" claim damages incurred by its subcontractor; the trial court abused its discretion by excluding evidence of the Port's harms and losses; the Port's failure to comply with the contract by withholding liquidated damages was excused by release, as a matter of law; the trial court erred by instructing the jury on apparent authority; and the Port is entitled to attorney's fees.
In its cross-appeal, Zachry claims it is entitled to judgment, as a matter of law, for the $600,000 the Port withheld for defective dredging; the evidence is legally and factually insufficient to support to support the jury's findings that the Port did not fail to comply with the contract with respect to the fenders; and the evidence is factually insufficient to support the jury's findings on the amount of the Port's attorney's fees.
Because we find the Port's Issue 4A dispositive of the award of R & R damages, we address it first. In Issue 4A, the Port contends that section 5.07's no-damages-for-delay clause bars Zachry's R & R damages. Specifically, the Port complains that the trial court erred by applying a common-law, tort-like "exception" to the contract's no-damages-for-delay clause. Section 5.07 — the contract's no-damages-for-delay clause — provides:
Question No. 4 asked the jury: "What percentage of the damages that you found in your answer to Question No. 3 was for delay or hindrance damages?" The jury found 58.13% of Zachry's R & R damages resulted from delay or hindrance. However, in an agreed motion, the Port and Zachry asked the trial court to disregard the jury's finding that 58.13% of such damages were the result of delay or hindrance because such finding was not supported by legally and factually evidence and, instead, asked the trial court to find that the evidence conclusively established, as a matter of law, that the answer to Question No. 4 is 100%. The trial court entered an agreed order disregarding the jury's answer of 58.13% to Question No. 4 and found that it was conclusively established, as a matter of law, that the answer to Question No. 4 is 100%.
Our primary concern when we construe a written contract is to ascertain the parties' true intent as expressed in the contract. In re Serv. Corp. Int'l, 355 S.W.3d 655, 661 (Tex.2011) (per curiam) (orig. proceeding); Epps v. Fowler, 351 S.W.3d 862, 865 (Tex.2011). "We must examine and consider the entire writing `in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless.'" Grohman v. Kahlig, 318 S.W.3d 882, 887 (Tex.2010) (per curiam) (quoting Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex.2005)). "We begin this analysis with the contract's express language." Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex.2011). The construction of an unambiguous contract is a question of law for the court, which we consider under a de novo standard of review. Tawes v. Barnes, 340 S.W.3d 419, 425 (Tex.2011); see also Exxon Corp. v. Emerald Oil & Gas Co., L.C., 348 S.W.3d 194, 214 (Tex. 2011) (op. on reh'g) ("Where an ambiguity has not been raised by the parties, the interpretation of a contract is a question of law.").
Zachry alleged that it suffered delay or hindrance damages on the project attributable to conduct by the Port, and the jury agreed. We have long recognized that "[i]n the absence of provision to the contrary, a contractor ... is entitled to recover damages from a contractee ... for losses due to delay and hindrance of work if it proves (1) that its work was delayed or hindered, (2) that it suffered damages because of the delay or hindrance, and (3) that the contractee was responsible for the act or omission which caused the delay or hindrance." City of Houston v. R.F. Ball Constr. Co., 570 S.W.2d 75, 77 (Tex.Civ. App.-Houston [14th Dist.] 1978, writ ref'd
The Port of Houston alleged that section 5.07 is a "provision to the contrary." The trial court rejected the Port's construction of section 5.07 as a blanket prohibition of delay damages. Instead, through its instruction in Question No. 3, the trial court determined, as a matter of law, that the Port could not enforce section 5.07 to preclude delay or hindrance damages resulting from any action by the Port that constituted arbitrary and capricious conduct, active interference, bad faith, or fraud.
Inasmuch as the delay damages constitute 100% of the damages awarded, a threshold question this court must resolve on appeal is whether the damage award is tainted because the trial court misinterpreted the contract and engrafted common-law exceptions onto the contractual no-damages-for-delay provision.
Generally, courts of many other jurisdictions give only a "restrained approval" of no-damages-for-delay provisions because of their harshness. See Maurice T. Brunner, Annotation, Validity and Constructions of "No Damage Clause" with Respect to Delay in Building or Construction Contract, 74 A.L.R.3d 187, 201 (1976). Those courts, again generally, construe the provisions strictly against the owner/drafter. Id. It is this strict construction that formed the genesis for common-law exceptions to the no-damages-for-delay clause.
It is undisputed that the Texas Supreme Court has not resolved whether Texas recognizes these exceptions. See Green Int'l, Inc. v. Solis, 951 S.W.2d 384, 387-88 (Tex. 1997) ("Assuming that these ... exceptions preclude the enforcement of no-damages-for-delay clauses, these exceptions have not been established in this case."). However, this court is not facing the application of common-law exceptions to a no-damages-for-delay clause for the first time. See R.F. Ball Constr. Co., 570 S.W.2d at 77-78. Because the parties dispute the application of our precedent,
In R.F. Ball, the City of Houston appealed a judgment in favor of its contractor arising from the construction of portions of the Houston Intercontinental Airport. Id. at 76. Ball was scheduled to complete the project on April 30, 1967, but did not do so until June 9, 1969. During the project, Ball faced "several hundred `Change Items' and between eight hundred and nine hundred `Clarifications.'" Id. The City paid direct costs associated with these changes, but did not pay indirect or impact costs associated with the changes. Id. The types of indirect costs included disruption to the project and "general hindrance of efficient work which inevitably resulted from the changes." Id.
After a two-month trial, the jury awarded substantial damages to Ball and specifically found inter alia that (1) the number of changes was greater than foreseen by the parties; (2) the unforeseen changes caused Ball's delay; and (3) such delay was not foreseen when the parties entered into the contract. Id.
Thus, on appeal, this court faced these jury findings and a no-damages-for-delay clause that provided, in pertinent part:
Id. at 77.
As a starting point, and citing to other jurisdictions, this court acknowledged that "one of the exceptions to the application of a [no-damages-for-delay] provision is that a delay which was not intended or contemplated by the parties to be within the purview of the provision is not governed by it." Id. (citing Ace Stone, Inc. v. Twp. of Wayne, 47 N.J. 431, 435, 221 A.2d 515 (1966); W. Eng'rs, Inc. v. State Rd. Comm'n, 20 Utah.2d 294, 296, 437 P.2d 216 (1968)). Referring again to other jurisdictions, we also noted three additional generally recognized exceptions to enforcement of no-damages-for-delay clauses.
With this background, we examined the intent of the parties arising from the specific language of the contract. Significantly, we specifically rejected Ball's line of cases that held that "if the delays or their cause were beyond the contemplation of the parties, then the [no-damages-for-delay] clause does not apply." Id. at 78 n. 2 ("We disagree with such cases since they preclude operation of the clause in situations where the character of the delay was unforeseen[,] the precise sort of delays the clause is designed to cover."). Ball obtained specific jury findings that the delay it occasioned fell directly within the common-law exception upon which it relied. Id. at 77-78. Nonetheless, we determined that, because the no-damages-for-delay clause was unambiguous and did not limit its application to foreseen delays, Ball could not establish a right to compensation for the indirect costs of the delay. Id. at 78.
Finally, we specifically addressed the policy underlying some courts' rejection or restriction of no-damages-for-delay clauses: such provisions are very harsh. Id. Nevertheless, relying explicitly on the "instructive" language of the United States Supreme Court, we explained:
Id. (quoting Wells Bros. Co. v. United States, 254 U.S. 83, 87, 41 S.Ct. 34, 65 L.Ed. 148 (1920)).
Thus, in R.F. Ball, we noted that the common-law exceptions to no-damages-for-delay provisions are "generally recognized" and, further, we analyzed one of the exceptions — that the "delay which was not intended or contemplated by the parties to be within the purview of the provision."
Here, the exceptions applied by the trial court addressed: "delay or hindrance that was the result of the Port's actions, if any, that constituted arbitrary and capricious conduct, active interference, bad faith and/or fraud." Under R.F. Ball, then, we must determine whether Zachry established that the no-damages-for-delay clause at issue was not intended to apply to delay or hindrance that was the result of the Port's actions. The plain language of the pertinent portion of the provision is as follows: "arising out of or associated with any delay or hindrance to the Work, regardless of the source of the delay or hindrance including events of Force Majeure, AND EVEN IF SUCH DELAY OR HINDRANCE RESULTS FROM, ARISES OUT OF OR IS DUE, IN WHOLE OR IN PART, TO THE NEGLIGENCE, BREACH OF CONTRACT OR OTHER FAULT OF THE PORT AUTHORITY." Thus, the parties' agreement states there are no damages for delay "regardless of the source."
Further, though the parties had already stated that the source of the delay was immaterial, they gave emphasis to their intent that delay due even in part to conduct by the Port was something they were specifically contemplating. And, as if specific mention might be insufficient, the parties typed the matters regarding conduct by the Port in all capital letters, which set it apart from the remainder of the paragraph. Finally, to give utmost emphasis, the parties described three categories of fault: (1) negligence, (2) breach of contract; or (3) other fault.
We know that the delay or hindrance damages were caused, at least in part, by breach of contract. By its response to Question Nos. 1 and 2, the jury determined that the Port breached the contract — both Change Order 4 and section 5.10 of the contract. The jury answered Question No. 3 by finding damages "that resulted from" the breach in the amount of $18,602,697. By the parties' agreement regarding Question No. 4, the evidence conclusively established that 100% of those damages are delay or hindrance damages. Thus, 100% of the delay or hindrance suffered by Zachry resulted from the conduct of the Port, that is, breach of contract. In accord with R.F. Ball, we conclude that Zachry has failed to establish that the no-damages-for-delay clause was not intended to apply to the Port's breach of contract.
The jury was not asked to make a specific finding on whether the Port's conduct "constituted arbitrary and capricious conduct, active interference, bad faith and/or fraud." However, we conclude that even a specific jury finding would not interfere with the application of the no-damages-for-delay clause in this case. By the parties' emphasis on "other fault" to the specific exclusion of "negligence," the parties have communicated their intent that Port conduct that rises above mere negligence or is a departure from the standard of care does not preclude enforcement of the no-damages-for-delay clause. Again, in keeping with R.F. Ball, we conclude that Zachry has failed to establish that the no-damages-for-delay clause was not intended to apply to Port conduct including, arbitrary and capricious conduct, active interference, bad faith, or fraud.
As harsh as this result seems, Texas law respects the objective intent of the parties where contract provisions show that the parties contemplated delay when entering
"[T]he parties are free to contract as they see fit, as long as their agreement does not contravene public policy." Tex. State Bd. of Med. Examiners v. Birenbaum, 891 S.W.2d 333, 336 (Tex. App.-Austin 1995, writ denied) (citing Scoville v. SpringPark Homeowner's Ass'n, Inc., 784 S.W.2d 498, 502 (Tex.App.-Dallas 1990 writ denied)). Courts do not rewrite contracts to insert provisions parties could have included or imply restraints for which they have not bargained. Tenneco, Inc. v. Enter. Prods. Co., 925 S.W.2d 640, 646 (Tex.1996); see also Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 162 (Tex. 2003) ("But we may neither rewrite the parties' contract nor add to its language."). Instead, "[p]arties to a contract are masters of their own choices and are entitled to select what terms and provisions to include in or omit from a contract." Thedford Crossing, L.P. v. Tyler Rose Nursery, Inc., 306 S.W.3d 860, 867 (Tex.App.-Tyler 2010, pet. denied) (citing Birnbaum v. SWEPI LP, 48 S.W.3d 254, 257 (Tex.App.-San Antonio 2001, pet. denied)). Specifically, "[the parties] are entitled to select what terms and provisions to include in a contract before executing it. And, in so choosing, each is entitled to rely upon the words selected to demarcate their respective obligations and rights. In short, the parties strike the deal they choose to strike and, thus, voluntarily bind themselves in the manner they choose." Natural Gas Clearinghouse v. Midgard Energy Co., 113 S.W.3d 400, 407 (Tex.App.-Amarillo 2003, pet. denied) (citing Cross Timbers Oil Co. v. Exxon Corp., 22 S.W.3d 24, 26 (Tex.App.-Amarillo 2000, no pet.)) (emphasis in original).
Zachry argues that if we do not apply the common-law exceptions to the contract's no-damages-for-delay clause, then the contract would be unbreachable and illusory. Zachry asserts, for example, that the Port could force Zachry to switch its means and methods and thereby cause serious delays in Zachry's performance. Zachry also avers that the Port could create a delay that lasts in perpetuity and then grant Zachry an extension of time that lasts in perpetuity, thereby breaching the contract while leaving Zachry with no remedy. However, the parties are free to negotiate and agree upon the conditions under which (1) the contractor will recover damages for delay, and (2) another remedy is available to the contractor for any such delay. In June 2004, Zachry unambiguously agreed that it would perform the contract without the benefit of delay damages, even if the delay was caused by the Port's breach of contract, negligence, or other fault. Zachry faced significant delays; delays it alleged — and the jury agreed — were caused by the Port's breach of contract. In November 2005, Zachry
Therefore, we conclude that the no-damages-for-delay clause in the parties' contract precludes Zachry's recovery of damages for its R & R claim. We sustain Issue 4A.
By Issue 9A, the Port also seeks reversal of the judgment for liquidated damages. The Port began withholding liquidated damages of $20,000 per day for Zachry's failure to meet Milestone A and the Wharf's final completion pursuant to sections 5.05 and 5.06 of the contract.
The trial court charged the jury that the Port had failed to comply with the contract by withholding $2.36 million in liquidated damages. The trial court also charged the jury in Question No. 12 that the failure to comply would be excused to the extent of any dollar amounts as to which Zachry had released its claim for withholding liquidated damages.
Section 6 of the contract governs the parties' rights and responsibilities regarding payments on the agreement. Section 6.01 provides the Contractor's obligation to create a "Schedule of Costs," which includes the unit-price basis for all of the various items of work that "shall be the basis for the preparation of and submission of monthly estimates."
On May 10, 2006, the Port faxed a letter to Zachry stating that the Port was (1) "process[ing] [Zachry's] March 2006 ... invoice" and (2) deducting, from payment on that invoice, "[l]iquidated damages total[ing] $820,000, based on 41 calendar days from February 16 through March 28, 2006 at $20,000 per calendar day." Zachry's March 2006 invoice corresponded to Zachry's Payment Estimate No. 23. By that Payment Estimate, Zachry sought a total payment of $1,885,807.26. The Port withheld $820,000 in liquidated damages from payment on Zachry's Payment Estimate No. 23.
Nevertheless, on May 17, 2006, Zachry signed an Affidavit and Partial Release of Lien for Zachry Construction Corporation as follows:
For the period February/March, 2006 through November, 2006, the Port withheld a total of $2.205 million in liquidated damages. In connection with each of these Payment Estimate-Contract Performance forms, Zachry executed an "Affidavit and Partial Release of Lien for Zachry Construction Corporation." The chart that follows depicts the Payment Estimate number, the period covered, the total liquidated damages withheld, and the date of the Affidavit and Partial Release of Lien:
Payment Liquidated Estimate Period Damages Affidavit No. ___7 Covered Withheld Date 21 1/06 No 3/27/06 22 2/06 No 4/14/06 23 3/06 $820,000 5/17/06 24 4/06 $520,000 6/7/06 25 5/06 $220,000 7/24/06 26 6/06 No 8/21/06 27 7/06 $ 35,000 9/22/06 28 8/06 $155,000 10/23/06 29 9/06 $150,000 11/20/06 30 10/06 $155,000 12/15/06 31 11/06 $150,000 1/31/07
The Port argues that, by signing the May 17, 2006 release, as well as releases covering invoices through November 2006 (Payment Estimate Nos. 23-31), Zachry,
A release is a writing that provides that a duty or obligation owed to one party to the release is discharged immediately or upon the occurrence of a condition. See Nat'l Union Fire Ins. Co. of Pittsburg, Pa. v. Ins. Co. of N. Am., 955 S.W.2d 120, 127 (Tex.App.-Houston [14th Dist.] 1997), aff'd sub nom., Keck, Mahin & Cate v. Nat'l Union Fire Ins. Co. of Pittsburg, Pa., 20 S.W.3d 692 (Tex.2000). Releases are subject to the usual rules of contract construction. Id. As in other instances of contract construction, our primary concern is to ascertain the intent of the parties at the time of the execution of the alleged release as expressed in the release. See generally In re Serv. Corp. Int'l, 355 S.W.3d at 661; Epps, 351 S.W.3d at 865.
To construe the release, we may examine evidence of the circumstances surrounding the negotiation and execution of the release. See Baty v. ProTech Ins. Agency, 63 S.W.3d 841, 848 (Tex. App.-Houston [14th Dist.] 2001, pet. denied); see also Sun Oil Co. (Delaware) v. Madeley, 626 S.W.2d 726, 731 (Tex.1981) (holding the proper rule is that "evidence of surrounding circumstances may be consulted" and, "[i]f in light of the surrounding circumstances, the language of the contract appears to be capable of only a single meaning, the court can then confine itself to the writing"). We may also consider "the deletions made by the parties" in the course of drafting the instrument at issue. See Houston Pipe Line Co. v. Dwyer, 374 S.W.2d 662, 664 (Tex.1964). Finally, we may consider the title of the document, but such is not dispositive. Enter. Leasing Co. of Houston v. Barrios, 156 S.W.3d 547, 549 (Tex.2004) (per curiam) ("Although we recognize that in certain cases, courts may consider the title of a contract provision or section to interpret a contract, `the greater weight must be given to the operative contractual clauses of the agreement.'" (quoting Neece v. A.A.A. Realty Co., 159 Tex. 403, 322 S.W.2d 597, 600 (1959))).
For a release to be effective, it must "mention" the claim to be released. Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931, 938 (Tex.1991). However, the release need not specifically describe a particular cause of action. See Mem'l Med. Ctr. of E. Tex. v. Keszler, 943 S.W.2d 433, 434-35 (Tex.1997) (per curiam).
We begin with the plain language of the release at issue. Its title is "Affidavit and Partial Release of Lien for Zachry Construction Corporation." It states that Zachry "has no further claims against PHA for the portion of the Work completed and listed on the Schedule of Costs" in the respective Payment Estimate. The body of the document contains neither the word "release" nor the word "lien."
The parties also rely on surrounding circumstances to construe the release. Specifically, they compare the language of the release at issue to both the prior and subsequent release forms. Even if we accept the invitation to look beyond the four corners of the affidavit at issue, these surrounding circumstances do not support Zachry's proposed interpretation of the language at issue.
Both the prior and subsequent versions are also entitled "Affidavit and Partial Release of Lien for Zachry Construction Corporation." However, the text of the original or first version of the release states:
The third version of the release, used by the parties after the release at issue, states:
Thus, the first form included, in addition to the release language at issue here, broad, general release language that purported to cover "all causes of action" including legal or equitable, common-law or statutory claims arising in contract, tort, or property rights. The parties deleted this general release language from the second version of the release at issue here. And, when litigation ensued, the parties revised the form again to reinsert general release language, but to specifically except the claims in this suit. Still, the third version contained the release language at issue here. Thus, the "deletion" gives no support to Zachry's argument that the release was transformed into a mere release of lien.
Further, the parties point to section 6.07 of the contract to guide the interpretation of the release. Section 6.07 required Zachry to release any further "claim[s] for payment" as to Zachry's prior invoice/Payment Estimate.
Zachry's construction of version two of the release is inconsistent with the surrounding circumstances. First, as mentioned, the only reference to "lien" is the heading of the affidavit. It cannot be limiting language, however, because it is the same heading for each of the three versions, including the first version that Zachry admits operated as a broad release of claims.
We conclude the provision is subject to one reasonable interpretation, that is: the provision at issue (version two) releases any further claim for payment for work accomplished and billed by the relevant payment estimate, which also operates to release any lien for that same work because payment is made in full. Because the general release language is omitted, the provision does not release:
But, even without the general release language, the specific release language of version two releases claims for breach of contract predicated upon a failure to make payment for work accomplished, billed, and paid — in whole or in part — on a particular payment estimate.
Our dissenting colleague concludes that the Port has failed to establish release as a matter of law because the documents at issue are, at a minimum, ambiguous. Meticulously comparing the release documents to the Payment Estimates at issue, the dissent urges that the release leaves open the question of what document is referenced in each release. Such asserted ambiguity is not one argued by Zachry, however. Zachry does not urge that the releases do not match the payment estimates. Zachry does not urge that the term Payment Estimate is ambiguous in its reference to Zachry's payment estimates rather than the Port's. Zachry does not urge that the absence of evidence identifying a payment release seeking payment in the same quantity released defeats the release. To the contrary, Zachry urges that the release is a release to the full extent of the payment estimates; it simply urges that the release is a full release of lien, rather than a full release of payment.
Moreover, there is no ambiguity in "what exactly has been released" as the dissent suggests. The language of the release goes beyond saying Zachry has no further claims against PHA. The release says "[Zachry] has no further claims against PHA
In summary, we conclude that, when Zachry signed the "Affidavit and Partial Release of Lien," stating that the Port "has made partial payment to ZCC on all sums owing on Payment Estimate Number Thirty (30) and that it has no further claims against PHA for the portion of the Work completed and listed on the Schedule of Costs in Payment Estimate Number 30," Zachry unambiguously discharged or released the Port from any further duty or obligation to pay sums billed through Payment Estimate No. 29. See Nat'l Union Fire Ins. Co. of Pittsburg, Pa., 955 S.W.2d at 127. The "Affidavit and Partial Release of Lien" mentions the claims being released: "claims against PHA for the portion of the Work completed and listed on the Schedule of Costs in Payment Estimate Number 30." See Victoria Bank & Trust Co., 811 S.W.2d at 938. As Payment Estimate No. 30 included offsets for liquidated damages in the sum of $2.205 million, Zachry has no further claims for payment arising from the work completed and listed on that Payment Estimate.
We conclude that if the Port failed to comply with the contract by withholding liquidated damages, such failure was excused, in part, as a matter of law by Zachry's release.
The Port claimed a right under section 6.05 of the contract to withhold or offset certain liquidated damage amounts because of alleged damages related to Wharf fenders. Question No. 12A asked the jury whether the Port's failure to comply with the contract by withholding $2.36 million in liquidated damages was excused, in whole or part, "by offset and/or withholding" for Zachry's failure to comply with the contract with respect to fender corrosion.
By its Cross-Appeal Issue 2, Zachry contends that it is entitled to judgment rendered in its favor on the $970,000 because the evidence is legally and factually insufficient to support the jury's findings (1) that Zachry breached the contract in constructing the fenders, (2) that any breach caused the fenders' corrosion and the Port's damage, or (3) as to any amount of damages the Port suffered as a result. Although we agree that (a) the presentation of evidence on the fenders was brief and not emphasized with the jury; and (b) there is competing evidence on the subject, we disagree that that evidence is legally or factually insufficient.
In reviewing the legal sufficiency of the evidence, we view the evidence in the light most favorable to the fact finding, crediting favorable evidence if reasonable persons could, and disregarding contrary evidence unless reasonable persons could not. City of Keller v. Wilson, 168 S.W.3d 802, 822, 827 (Tex.2005). We may not sustain a legal sufficiency, or "no evidence" point unless the record demonstrates that: (1) there is a complete absence of a vital fact; (2) the court is barred by the rules of law or evidence from giving weight to the only evidence offered to prove a vital fact; (3) the evidence to prove a vital fact is no more than a scintilla; or (4) the evidence conclusively established the opposite of the vital fact. Id. at 810. To evaluate the factual sufficiency of the evidence, we consider all the evidence and will set aside the finding only if the evidence supporting the finding is so weak or so against the overwhelming weight of the evidence that the finding is clearly wrong and unjust. Maritime Overseas Corp. v. Ellis, 971 S.W.2d 402, 406-07 (Tex.1998); Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986) (per curiam).
The Port's Bayport engineer Mark Vincent testified about the Wharf fenders,
The coating at issue is governed by Technical Specification Section 09950. The jury received evidence that (a) this specification requires Zachry to "apply 2-3 mils of the specified epoxy" coating; and (b) "[t]hickness tests conducted on the upper portion of the fenders ranged from 18 to 26 mils including the seal coat." From this evidence, the jury was entitled to infer that Zachry applied coating well above the 2-3 mils level specified by the contract. Thus, the evidence is legally sufficient to support the jury's finding that Zachry failed to comply with the contract and, specifically, Technical Specification Section 09950.
The jury also heard evidence that the purpose of the above technical specification on coating is "to obtain full continuity of the epoxy and total sealing of porosity." The fenders were to be sealed because a portion of each fender is installed under water. By his report,
This evidence is both legally and factually sufficient to support the jury's finding that Zachry's failure to comply with the contract specification regarding coating compromised the sealing of porosity and directly caused the fenders' corrosion.
Vincent also testified that the approximate cost to repair the fenders that corroded "as soon as they were put in the water" was $978,000. Zachry urges that this testimony is legally insufficient
We overrule Zachry's Cross-Appeal Issue 2 regarding the Wharf fender offset award.
In Issue 11, the Port argues that it is entitled to the attorney's fees found by the jury for the R & R and withholding claims because the Port is entitled to judgment on those claims.
Zachry brought multiple claims or theories of the Port's breach of the contract: the R & R claim, i.e., failure to comply with Change Order 4 and section 5.10 of the contract, and claims for withholding $2.36 million in liquidated damages and $600,000 for dredging. The jury determined that a "reasonable fee for necessary services of the Port's attorneys" on "Zachry's Claim Relating to Change Order 4 and/or § 5.10 of the Contract" is $10,500,000 for trial; $90,000 for an appeal to the court of appeals; and $22,500 for an appeal to the Texas Supreme Court. The jury determined that a reasonable fee for "Zachry's Claim for Withholding the $2.36 million as liquidated damages and the $600,000 for dredging" is $80,250 for trial; $3,750 for an appeal to the court of appeals; and $1,250.00 for an appeal to the Texas Supreme Court.
Section 3.10 of the contract makes Zachry liable for the Port's attorney's fees if Zachry brings "a claim" and "does not prevail with respect to such claim."
By Cross-Appeal Issue 3, Zachry contends that in the event that Zachry does not prevail on any theory underlying its breach-of-contract claim, Zachry would still be entitled to a new trial on attorney's fees. In support of its claim for attorney's fees, the Port offered the testimony of its billing attorney, Karen White, and its designated attorney's fees expert, Dan Downey. Zachry claims that (1) the trial court erred by admitting the testimony of White because she was not designated as an attorney's fees expert; and (2) Downey's testimony is factually insufficient to support the jury's finding on the amount of the Port's attorney's fees.
We first address whether the trial court erred in admitting White's testimony. Prior to White's testifying, the trial court ruled that she could testify as a fact witness, but not as an expert because she had not been designated as an expert.
During White's testimony, Zachry objected twice that White's testimony was drifting into expert opinions. The first occurred when White, after describing the document production process, stated "[w]e didn't feel that they had produced every document to us that they should have...." Zachry "object[ed] at this point" because White was to be "a very limited fact witness, not an expert," and was being tendered as a witness for the "limited purpose of segregation. That is, to tell us exactly how the segregation of the fees was identified and determined." The trial court overruled the objection, stating that it would "let White testify about these subjects." White provided further testimony on the document-production process, including the huge volume of documents produced by each side and the process for reviewing those documents. We find the trial court did not abuse its discretion in ruling that document-production testimony was not expert testimony.
The second objection occurred during White's response the question: "[W]hat was your role as a billing attorney?" White explained the process of inputting time and then stated that, "as billing attorney, then I review the bills to make sure that everything's properly chargeable to the client, that it's properly...." Zachry's counsel objected, again complaining about the testimony in light of the trial court's expert-opinion ruling. The trial court agreed that when White "talks about whether a particular item was properly billable to the client," she is offering an
We now address Zachry's complaint that the testimony of the Port's expert, Dan Downy, was not factually sufficient to support the jury's findings on attorney's fees.
Downey identified the bases for his opinions as to the reasonableness and necessity of the Port's legal fees. In addition to the spreadsheet, Downey reviewed the pleading and discovery index and requested to see particular pleadings and motions "so [he] could get a handle on what was involved." Downey then conducted separate interviews with individual attorneys involved in the case concerning "what their role was and how they set about performing that task." Downey "was trying to get a handle on how much work is involved in those tasks, to see if it makes sense and matches up with the time that they have logged for those tasks." Downey interviewed the attorneys more than once. Downey also interviewed the legal assistants. The jury saw several exhibits containing Downey's notes as well as compilations of fees by month and attorney.
Zachry's attorney's fees expert, William Junell, agreed that the lawsuit between Zachry and the Port amounted to an "all-out-war between the parties for ... three years."
Both Junell and Downey testified about the factors applicable to an attorney's fee award.
The jury also heard Junell's criticism that Downey did not review any of the underlying bills for the 44,000 hours of attorney time for which the Port sought recovery.
Ultimately, through a thorough cross-examination of Downey, Zachry made the jury aware of the weaknesses in the Port's attorney's fee claim: the Port was seeking $15 million in attorney's fees to defend Zachry's $30 million claims; the Port had four separate law firms defending it; Downey had not documented what tasks were performed by each attorney; and Downey had not used actual bills to form his opinion even though that is the standard practice for attorney's fee witnesses, and though they would have provided some verification of the attorneys' representation of their time spent.
We conclude that the evidence is factually sufficient to support the fee award in this case, though the evidence would also have supported far less. The most significant concern about this award is the relationship between the fee awarded and the amount in controversy, particularly when compared to the fees incurred by Zachry. However, this court has previously determined, albeit on much smaller sums, that a fee award that was two times the amount in controversy was supported by legally and factually sufficient evidence. See Bencon Mgmt. & Gen. Contracting, Inc. v. Boyer, Inc., 178 S.W.3d 198, 209-10 (Tex.App.-Houston [14th Dist.] 2005, no pet.) The relationship between the fee and the amount in controversy is merely a factor that we examine. See USAA Cnty. Mut. Ins. Co. v. Cook, 241 S.W.3d 93, 103 (Tex.App.-Houston [1st Dist.] 2007, no pet.). Moreover, the testimony provides sufficient evidence to support this discrepancy. Downey's and White's testimony illustrated that the majority of the differential occurred in the area of discovery and, specifically, the pursuit and review of document production. White testified that rather than provide copies of responsive documents to the Port, Zachry asked the Port's attorneys "to come out to the site facility and review documents there." Thus, two Port attorneys went to an un-air conditioned, metal container facility "crammed full of boxes not organized in any manner." They pulled boxes outside of the container, one at a time, "and sat under a tree in May out at the wharf site
We overrule Zachry's Cross-Appeal Issue 3.
To summarize, we hold that the application of the no-damages-for-delay clause precludes Zachry's claim for delay or hindrance damages on its claim for damages on its R & R claim.
We further hold that Zachry released, as a matter of law, $2.205 million of its $2.36 million claim for the Port's withholding liquidated damages. We further hold that the evidence is legally and factually sufficient to support the jury's finding of the Port's offset of $970,000 for defective fenders. Because the amount of liquidated damages that Zachry released and the amount of offset the jury found for defective fenders is greater than the $2.36 million that Zachry sought for the Port's withholding of liquidated damages, we hold that Zachry may not recover on its $2.36 million claim for withholding liquidated damages.
We further hold that the trial court did not err in failing to rule, as a matter of law, that the Port breached the contract by withholding $600,000 for dredging.
We further hold that the Port is entitled to recover attorney's fees as found by the jury with respect to Zachry's R & R claim as follows: (1) $10,500,000 for trial, (2) $90,000 for appeal to the court of appeals, and (3) $22,500 for appeal to the Texas Supreme Court; and with respect to Zachry's withholding claims as follows: (1) $80,250 for trial, (2) $3,750 for appeal to the court of appeals, and (3) $1,250 for appeal to the Texas Supreme Court.
Thus, we reverse the judgment awarding Zachry $18,602,677 in damages on its R & R claim and $2.36 million in liquidated damages and render judgment that Zachry take nothing on those claims. We render judgment that the Port have and recover attorney's fees from Zachry with respect to the R & R claim as follows: (1) $10,500,000 for trial, (2) $90,000 for appeal to the court of appeals, and (3) $22,500 for appeal to the Texas Supreme Court; and with respect to the withholding claims: (1) $80,250 for trial, (2) $3,750 for appeal to the court of appeals, and (3) $1,250 for appeal to the Texas Supreme Court.
Accordingly, we render judgment that the Port recover attorney's fees and reverse and render judgment that Zachry take nothing on its claims.
Justice CHRISTOPHER, J., dissenting
I respectfully dissent from Part B of the majority's opinion, in which liquidated damages are addressed. In my opinion, the documents titled "Partial Release of Lien" do not release Zachry's claim for the wrongfully withheld liquidated damages. I would uphold the trial court's decision that the documents are ambiguous and the jury's decision that Zachry did not release those damages.
The majority concludes that the documents at issue are unambiguous. I disagree. Applying the following rules of construction, I would hold that, at most, the documents are ambiguous and that the issue was properly submitted to the jury. I would consider what a release is, how to construe it, and the special provisions related to releases.
A release is a writing providing that a duty or obligation owed to one party to the release is discharged immediately or on the occurrence of a condition. See Nat'l Union Fire Ins. Co. of Pittsburg, Pa. v. Ins. Co. of N. Am., 955 S.W.2d 120, 127 (Tex.App.-Houston [14th Dist.] 1997), aff'd sub nom. Keck, Mahin & Cate v. Nat'l Union Fire Ins. Co., 20 S.W.3d 692 (Tex. 2000); Restatement (Second) of Contracts § 284 (1981). A release of a claim or cause of action extinguishes the claim or cause of action. Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505, 508 (Tex.1993).
Under Texas law, a release is a contract and is subject to the rules governing contract construction. See Williams v. Glash, 789 S.W.2d 261, 264 (Tex.1990) (holding that a release is a contract subject to avoidance on same grounds as any other contract); Loy v. Kuykendall, 347 S.W.2d 726, 728 (Tex.Civ.App.-San Antonio 1961, writ ref'd n.r.e.) (treating a release as a contract subject to rules governing construction thereof); RESTATEMENT (SECOND) OF CONTRACTS § 284 cmt. c.
In construing a written contract, the primary concern of the court is to ascertain the true intentions of the parties as expressed in the instrument. Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983); Nat'l Union, 955 S.W.2d at 127. The intention of the parties is discovered primarily by reference to the words used in the contract. Nat'l Union, 955 S.W.2d at 127. To determine the parties' intentions, courts should examine and consider the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless. Coker, 650 S.W.2d at 393; Nat'l Union, 955 S.W.2d at 127. No single provision taken alone will be given controlling effect; rather, all of the provisions must be considered with reference to the entire contract. Id.
Evidence of circumstances surrounding the execution of the contract may be considered in the construction of an unambiguous instrument, even though oral statements of the parties' intentions are inadmissible to vary or contradict the terms of the agreement. Med. Towers, Ltd. v. St. Luke's Episcopal Hosp., 750 S.W.2d 820, 823 (Tex.App.-Houston [14th Dist.] 1988, writ denied) (citing Sun Oil Co. (Delaware) v. Madeley, 626 S.W.2d 726,
Instruments pertaining to the same transaction should be read together to ascertain the parties' intent as to the meaning of the release, even if the parties executed them at different times and the instruments do not expressly refer to each other. See Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831, 840 (Tex.2000); In re Sterling Chems., Inc., 261 S.W.3d 805, 810 (Tex. App.-Houston [14th Dist.] 2008, no pet.); Dorsett v. Cross, 106 S.W.3d 213, 217 (Tex.App.-Houston [1st Dist.] 2003, pet. denied).
We may also consider "the deletions made by the parties" in the course of drafting the instrument at issue. See Hous. Exploration Co. v. Wellington Underwriting Agencies, Ltd., 352 S.W.3d 462, 470-71 (Tex.2011); Hous. Pipe Line Co. v. Dwyer, 374 S.W.2d 662, 664 (Tex.1964).
We may consider the title of the document. Enter. Leasing Co. of Hous. v. Barrios, 156 S.W.3d 547, 549 (Tex.2004) (per curiam) ("Although we recognize that in certain cases, courts may consider the title of a contract provision or section to interpret a contract, `the greater weight must be given to the operative contractual clauses of the agreement.'" (quoting Neece v. A.A.A. Realty Co., 159 Tex. 403, 322 S.W.2d 597, 600 (1959))). The title also can create ambiguity when it differs from the body. See Lone Star Cement Corp. v. Fair, 467 S.W.2d 402, 404-05 (Tex.1971) (when caption of a judicial order dismisses only one party while the body purports to dismiss an entire cause, the order is ambiguous); Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 138 n. 3 (Tex.1994) (title of insurance contract that is repugnant or misleading as to coverage creates an ambiguity).
A court should not rewrite a contract or add to its language. Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 162 (Tex. 2003); White Oak Operating Co. v. BLR Constr. Cos., 362 S.W.3d 725, 733 (Tex. App.-Houston [14th Dist.] 2011, no pet.).
In addition to these basic contract construction rules, however, we must take into account the rules that specifically apply to releases.
To effectively release a claim in Texas, the releasing instrument must mention the claim to be released. See Victoria Bank &
General, categorical releases are to be narrowly construed. Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 422 (Tex. 1984). See also Victoria Bank, 811 S.W.2d at 938 (applying this principle in limiting the scope of release so that "any claims not clearly within the subject matter of the release are not discharged") (emphasis added); Baty v. ProTech Ins. Agency, 63 S.W.3d 841, 850 n. 7 (Tex.App.-Houston [14th Dist.] 2001, pet. denied) (collecting cases in which the scope of a general release was narrowly construed).
Typical release language is "release, discharge, relinquish." Derr Constr. Co. v. City of Hous., 846 S.W.2d 854, 859 (Tex. App.-Houston [14th Dist.] 1992, no writ). See also Green Int'l, Inc. v. Solis, 951 S.W.2d 384, 387 (Tex.1997) (contract language that "Contractor shall not be liable to the Subcontractor for delay to Subcontractor's work by the act, neglect or default of Owner" is not a release because it does not extinguish a claim or establish an absolute bar to any right of action on the released matter).
There was very little testimony at trial about the Partial Release of Liens. As to the intent of the parties and the surrounding circumstances, we know only the following: Zachry initially signed a document ("Release Form No. 1") containing broad release language in the body of the document. See majority opinion, ante at 855-56. Beginning in September of 2004, Zachry revised the release agreement, leaving only two paragraphs in the body of the document and deleting the broad release language ("Release Form No. 2").
The jury was asked to decide whether certain numbered documents released the liquidated-damages claim. Each release refers to another document, and to understand what was being released, it was necessary to know the contents of the referenced document. But, the record contains no testimony matching a release and the document to which it refers. The jury received no charge instructions about how to match a release with the document to which it refers, and the referenced documents are not attached to the exhibits in
I begin by examining the release cited by the majority as an example. Release No. 23 provides as follows:
This release was signed May 17, 2006.
The majority contends that the language "it has no further claims against PHA" is a release. See majority opinion, ante at 855. But what exactly has been released? The agreement identifies such claims only as the claims "for the portion of the Work completed and listed on the Schedule of Costs in Payment Estimate Number Twenty-Three (23)." In order to know what was released you must refer to the Schedule of Costs in Payment Estimate Number Twenty-Three.
In the charge, the trial court instructed the jury, "you must decide the meaning of DX1114.012 and PX884.0159 (re Payment estimate 23)...." As the majority notes, the Payment estimate and schedule of costs were to be prepared by Zachry under the contract. The referenced numbers in the jury charge refer to different copies of the same document. The documents that follow these exhibit numbers differ from one another. DX1114 is a 14-page document starting with DX1114.001 and ending at DX1114.014. It does not include "Payment Estimate Number Twenty-[T]hree (23)." PX884 is a 307-page document, starting with PX884.0001 and ending with PX884.0307. It also does not include "Payment Estimate Number Twenty-[T]hree (23)." It instead includes three copies of Payment Estimate Number Twenty-Two, and then jumps to Payment Estimate Number Twenty-Four.
There is one document, PX884.0145, that might be Payment Estimate Number Twenty-Three. Although the first page states "Estimate 22," the second page states "Estimate 23." Without knowing exactly what document is referenced in the release, how could that release be unambiguous?
That Estimate contains both typed and handwritten notations. There was no testimony as to who prepared the handwritten notations, or when those notations were made, or whether those notations were communicated to Zachry. The typed document has a stated date of March 25, 2006. At the bottom of the page there is a typed reference to "LIQ. DAMAGES (C + M)" and the number $0.00 is typed in. "C" is listed above as "Previous Liquidated Damages" with a "$0.00" notation. "M" is listed as "Liquidated Damages this period" and the typed "$0.00" is crossed out and the number "820,000" has been written by hand. The document appears to contain the signature of Andy Thiess for the Port and the handwritten date of April 17, 2006. At the bottom of the last page of that estimate there is a handwritten notation "-(820,000) Feb. + March LD's."
Release No. 24, signed June 7, 2006, suffers from some of the same problems. The jury was told to decide the meaning of "DX1115.017 and PX884.0168 (re Payment Estimate 24)." DX1115 does not contain Payment Estimate Number 24. PX884 appears to contain Payment Estimate 24, but at page 884.0154. That Estimate contains both typed and handwritten notations. There was no testimony as to who prepared the handwritten notations, when those notations were made, or whether those notations were communicated to Zachry. The top of the typed document has a stated date of April 10, 2006. At the bottom of the page there is a typed reference to "LIQ. DAMAGES (C + M)" and the number "$0.00" is typed in. The typed number has been crossed out and the number 600,000
All of the remaining releases suffer from the same problems. For the releases that contained handwritten notations, there was no testimony as to who prepared the handwritten notations, when those notations were made, or whether those notations were communicated to Zachry. Each release listed below was in the jury charge but did not have the appropriate payment estimate attached, and there was no testimony that the documents that I am referencing below were in fact the appropriate payment estimate.
Release No. 25 refers to Payment Estimate No. 25, which I will assume is PX884.0163. It was prepared June 7, 2006 and apparently approved by Thiess on June 16, 2006. The first page contains the typed notation "LIQ. DAMAGES (C + M) $0.00." Both the "C" line and the "M" line above contain the typed amount "$0.00." These were not crossed out.
Release No. 26 refers to Payment Estimate No. 26, which I will assume is PX884.0172. It was prepared July 24, 2006. It does not show an approval date by Thiess. The first page contains the typed notation "LIQ. DAMAGES (C + M) $0.00." Both the "C" line and the "M" line above contain the typed number "$0.00." These were not crossed out.
Release No. 27 refers to Payment Estimate No. 27, which I will assume is
Release No. 28 refers to Payment Estimate No. 28, which I will assume is PX884.0188. It was prepared September 22, 2006. It apparently was approved by Thiess on October 9, 2006. The first page contains the typed notation "LIQ. DAMAGES (C + M) $0.00." The "$0.00" has been crossed out and the number 2,585,291.80
Release No. 29 refers to Payment Estimate No. 29, which I will assume is PX884.0197. It was prepared October 23, 2006. It shows no approval by Thiess. The first page contains the typed notation "LIQ. DAMAGES (C + M) $0.00." Both the "C" line and the "M" line above contain the typed number "$0.00." These were not crossed out.
Release No. 30 refers to Payment Estimate No. 30, which I will assume is PX884.0207. It was prepared November 20, 2006. It apparently was approved by Thiess on November 30, 2006. The first page contains the typed notation "LIQ. DAMAGES (C + M) $0.00." The "$0.00" has been crossed out and the number 155,000 has been written by hand. The "C" line contains the typed figure "$0.00," which is not crossed out, while the "M" line contains the typed number "$0.00" with a handwritten number of 155,000 inserted.
Release No. 31 refers to Payment Estimate No. 31, which I will assume is PX884.0217. It was prepared December 15, 2006. It apparently was approved by Thiess on January 1, 2007. The first page contains the typed notation "LIQ. DAMAGES (C + M) $0.00." This is not crossed out. The "C" line above contains the typed amount "$0.00," and it has not been crossed out. The "M" line contains the typed amount "$0.00," but that has been crossed out and the handwritten number 150,000 inserted.
It appears that every time Zachry sent its payment estimate, it listed "$0.00" in the blank for liquidated damages. On this record, we do not know whether the referenced payment estimate that was listed in the release was Zachry's estimate — with zero liquidated damages — or the Port's estimates with its handwritten notations. On this record, the Port cannot prevail as a matter of law.
The majority's chart also cannot be supported by the actual releases themselves. Assuming that the handwritten notations indicated a liquidated-damages deduction, those handwritten numbers do not match the amounts that the majority believes were the actual deductions from Zachry's invoices.
Finally, even assuming that the document included a reference to the Port's handwritten notations, the actual release says it has no further claims with respect to the Schedule of Costs in the Payment Estimate — in other words, that Zachry has no further claim that the work done cost any more than was listed in its Schedule of Costs for the work done that month. Zachry cannot later contend that the work cost more than listed on the Schedule. The release does not say that Zachry is to be bound by any summary or deductions made by the Port, or that Zachry agrees that the deductions made by the Port are correct. Thus, the releases violate the fundamental rule that they must mention the claim to be released — it is simply missing from the evidence at trial. Under this evidence, we do not know what amount, if any, was allegedly released. While the majority contends that the release does not have to identify the amount released, how else could the majority conclude that a release of $2.205 million occurred as a matter of law?
Both sides cite to the contract to support their claims. Section 6.07 of the contract states in pertinent part as follows:
I agree with Zachry's interpretation of this section that the two sentences show an intent to release liens and not a release of a claim that payment had been made in full. The second sentence limits the release to the preceding sentence which is clearly limited to liens. Even the majority concedes that this section only required Zachry to release a lien. See majority opinion, ante at 857. But then the majority uses that against Zachry when it discusses
The different forms of the release show an intent by Zachry to provide a very limited release. The deletion of the broad-form release language that was present in Release Form No. 1 shows Zachry's intent to limit its release. The fact that the Port was ultimately unhappy with Release Form No. 2 indicates that the Port knew that this release did not provide them any protection at all. See Hous. Exploration Co., 352 S.W.3d at 470-71 (deletions in a contract can be considered in its construction). While not controlling, a document's title also can create ambiguity. See Lone Star Cement Corp., 467 S.W.2d at 404-05. Here, however, the titles of the documents match up with the contract provision calling only for a release of lien.
Under general rules of contract construction, this release is, at most, ambiguous. But when the specific rules of construction concerning releases are incorporated into the analysis, the release fails. To effectively release a claim in Texas, the releasing instrument must mention the claim to be released. See Victoria Bank, 811 S.W.2d at 938. The releases here do not do this. Releases must be construed narrowly, see id., yet here, the majority expands the releases' meaning. And unlike typical releases, the releases in this case do not use language that the parties "release, discharge, [and] relinquish" their claims. Cf. Derr Constr. Co., 846 S.W.2d at 859 ("Release language is generally `release, discharge, relinquish.'"); MG Bldg. Materials, Ltd. v. Moses Lopez Custom Homes, Inc., 179 S.W.3d 51, 64 (Tex. App.-San Antonio 2005, pet. denied) (same); Wallerstein v. Spirt, 8 S.W.3d 774, 780 (Tex.App.-Austin 1999, no pet.) (same). Despite footnote 9, the majority is unable to cite any majority opinion in which the court construed a document to be a release where the document lacked such typical release language. See also Green Int'l, 951 S.W.2d at 387 (contract language that "Contractor shall not be liable to the Subcontractor for delay to Subcontractor's work by the act, neglect or default of Owner" is not a release because it neither extinguishes a claim nor establishes an absolute bar to any right of action on the released matter).
For all of these reasons I respectfully dissent from the majority's opinion as to the release of the liquidated damages claim.
The court also instructed the jury in Question No. 12 regarding excuse as to offset and/or withholding regarding the fenders. The jury's finding that the Port is excused for the withholding to the extent of $970,000 for the fenders is addressed in Zachry's cross-appeal.