HAYNES, Circuit Judge:
The Dallas/Fort Worth International Airport Board ("DFW") appeals the final judgments of the district court against DFW in favor of INET Airport Systems, Inc. ("INET"),
The district court granted summary judgment against DFW on INET's affirmative defenses of excuse and prior material breach of the contract by DFW and also dismissed claims against Colaco. The court dismissed DFW's claims against Hartford based on Hartford's statute of limitations defense. Finally, the district court denied in part DFW's motion for summary judgment, which claimed that INET breached the contract, and granted DFW's motion in part as to INET's counterclaims of unjust enrichment and money had and received. DFW timely appealed these final judgments, and those appeals were consolidated before us.
Because we find that material factual disputes remain unresolved, we REVERSE the district court's grant of summary judgment in favor of INET on INET's claims of excuse and prior material breach of the contract by DFW, and REMAND for trial. We also REVERSE and REMAND the district court's grant of summary judgment for Hartford, as disputes of material fact remain over whether DFW filed suit against Hartford within the statute of limitations. Finally, we VACATE the district court's subsequent final judgment awarding damages to INET because it was based on the district court's summary-judgment determination that DFW should be liable to INET.
We have jurisdiction over DFW's appeals of the final orders of the district court under 28 U.S.C. § 1291. We review a district court's interpretation of a contract de novo. See Interstate Contracting Corp. v. City of Dallas, 407 F.3d 708, 712 (5th Cir.2005) (ICC). The contract in this case is governed by Texas law, under which contract interpretation and whether a contract is ambiguous are questions of law. Id. In interpreting a contract, courts must "ascertain and give effect to the parties' intentions as expressed in the writing itself," considering the entire writing and seeking to "harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless." El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 805 (Tex.2012) (citations omitted). We review de novo the district court's decision on summary judgment. Cooley v. Hous. Auth. of City of Slidell, 747 F.3d 295, 297 (5th Cir.2014).
DFW and INET entered into Contract No. 9500377 (the "Contract") in August 2009 for a project in Terminal E of DFW Airport, in which pre-conditioned air and rooftop air handling units ("Rooftop Units") were to provide conditioned air (cooling and heating) to passenger boarding bridges and aircrafts parked at terminal gates. INET won the Contract through a competitive bidding process and agreed to follow the Contract's terms, plans, and specifications for the construction work. In submitting its bid proposal, INET certified that its proposal constituted prima facie evidence that it had examined "the site of the proposed work, the proposal, plans, specifications, and contract forms," and satisfied itself as to the materials furnished, requirements of the Contract, plans, specifications, and site conditions.
Campos Engineering ("Campos") prepared the design for the project for DFW, including the plans and specifications. INET was not allowed to substitute products or designs for those agreed upon in the Contract documents without authorization from DFW. The Contract also contained provisions requiring INET to alert DFW immediately to any "apparent error or omission in the plans or specifications" so that DFW could make a final decision about how to proceed. If the completion of the Contract required extra work for which payment had not been delineated, the Contract provided that this extra work should be covered by "a written change order" issued by DFW with "agreed prices for performing the change order work." DFW was to reject any claim for payment not covered by written change order or supplemental agreement.
Trouble arose when INET expressed concern to DFW that the Rooftop Units specified in the plans and selected by INET in the Contract might not function correctly with the EG Water mixture. INET informed DFW of this potential problem during the construction kick-off meeting on October 14, 2009 — specifically, that the EG Water supplied by DFW's pipes would be at sub-freezing temperatures, causing ice to build up on the outer surface of the Rooftop Unit coils and keeping the coils from performing as required. After receiving no immediate response to this concern, INET submitted a "Request for Information," or "RFI," asking how it should proceed (hereinafter, "RFI-2").
DFW, Campos, and INET corresponded about this issue through extensive discussions that resulted in two proposals for how to add control sequences ("Control Sequence Proposal") or revised piping ("Revised Piping Proposal") to the Rooftop Units to prevent potential defects. The record does not indicate that the parties ever reached any agreement on whether to adopt these proposals or how to proceed. Eventually, DFW notified INET that INET had failed to meet the substantial completion deadline and that DFW would begin assessing liquidated damages. DFW declined to pay at least one invoice submitted by INET after this date, and in April 2012, DFW made a claim against Hartford on the performance bond. DFW, INET, and Hartford corresponded throughout 2012. DFW had the remaining work on the Rooftop Units completed by a substitute contractor by contract dated July 9, 2013.
In June 2012, DFW took official action related to the Contract with INET. The parties dispute whether this action terminated the Contract and if not, when the Contract was terminated or abandoned. Timing is relevant because DFW filed suit on August 5, 2013, and the district court dismissed DFW's claims against Hartford as barred by Texas's one-year statute of limitations for suits on performance bonds. See TEX. GOV'T. CODE § 2253.078.
In response to the parties' various motions, the district court granted DFW's
The dispute between the parties turns on where the Contract allocated the risk of defective plans and specifications, whether the plans and specifications were in fact defective, and what was required of each party once INET claimed it found a defect that would prevent its performance. We conclude it was error to grant summary judgment for INET on the basis that DFW first breached the Contract. The record contains disputes of material fact regarding which party prevented performance by failing to fully cooperate in arriving at a solution once the parties discovered defects.
The district court correctly concluded there was no dispute of material fact regarding whether the plans and specifications were defective and had to be changed for the Rooftop Units to function properly. We therefore must determine how the Contract allocated the risk of defective plans and specifications. The district court concluded that the Contract allocated this risk to DFW and that DFW breached the Contract by insufficiently cooperating with INET to resolve problems created by the defective plans and specifications. We conclude that while DFW partly bore the risk of defective plans and specifications under this Contract, the language of the Contract requires both parties to participate in resolving such defects.
Texas law allows contracting parties to allocate the risk of defective designs, plans, and specifications to an owner (in this case, DFW), rather than the contractor (INET), but this "require[s] contractual language indicating an intent to shift the burden of risk to the owner." ICC, 407 F.3d at 720; see also Millgard Corp. v. McKee/Mays, 49 F.3d 1070, 1071-73 (5th Cir.1995). The language of this Contract allocates the risk of defects at least partially to DFW, in that it requires DFW to cooperate through a change order or other actions in the event that INET brings a discrepancy to DFW's attention. For example, Special Provision
Special Provision 31.0 states:
These provisions seem to allocate the risk of defects to DFW. Yet, the Contract allocated some duties to INET as well, duties that required INET to cooperate or take other actions in this case to help resolve the discrepancy between the Contract's requirements and the designs and specifications. Various General Provisions support INET's duties to: (1) inspect the plans and specifications and bring up discrepancies during the bidding process;
In sum, the Contract in this case contains a mixture of provisions that place the risk of defects on both DFW and INET. INET agreed that it would provide a control sequence and other mechanisms to ensure defrosting of the coils within the Rooftop Units; that it had inspected the plans and specifications and would point out potential problems before bidding; that all equipment would be compatible with DFW's system; and that it would fill in details as necessary. INET discovered a defect in the plans and specifications, which contained very detailed requirements that INET was not free to disregard or redesign without DFW's approval. Therefore, DFW also agreed to provide change orders if INET pointed out defects in the plans, and the Contract allows DFW and INET to resolve any such defects discovered after the Contract's execution by mutual agreement. The district court correctly concluded DFW had a duty to cooperate with INET and issue a change order if necessary to correct defects. However, INET's agreement was also required for such a process under the Contract, and INET had duties that required it to cooperate in finding a solution to any defects. We therefore address whether there are disputes of material fact in the record regarding which party breached the Contract by failing to cooperate and find a solution to the defect.
Texas law excuses a party's performance under a contract when the other party's breach prevents its performance. See, e.g., Transverse, L.L.C. v. Iowa Wireless Servs., L.L.C., 617 Fed.Appx. 272, 277 (5th Cir.2015);
The parties discussed two possible modifications of the plans and specifications that might have addressed the defects INET discovered, known as the Control Sequence Proposal and the Revised Piping Proposal. The record is clear that INET did not agree to the Control Sequence Proposal, as INET admits in its brief.
A dispute of material fact remains regarding whether INET rejected the Revised Piping Proposal outright or hindered the process of agreeing to this or another solution. INET sent DFW requests for information related to the Revised Piping Proposal in April 2010, requesting details and formal documentation from DFW so that INET could "price this change." DFW responded with information about some of the technical details of the Revised Piping Proposal, but the record does not show that DFW or INET ever formally priced this change or modified their Contract to incorporate the Revised Piping Proposal. Based on its requests for information, INET argues DFW breached the Contract by failing to cooperate in issuing a change order and incorporating the Revised Piping Proposal into the Contract.
However, DFW argues INET rejected the Revised Piping Proposal, pointing to correspondence between INET and DFW.
Significant evidence in the record suggests that the parties attempted to agree about how to address INET's concerns, and that INET and DFW both took strong positions about the necessary solution. In these circumstances the Contract required both parties to participate in resolving defects. Any contractual modification or change order required the mutual assent of the parties, and questions of mutual assent are fact based. Sifting through the evidence to determine whether the parties reached agreement on a contractual modification is a task ill-suited for summary judgment on this record. For these reasons, and because disputes of material fact remain regarding whether DFW or INET breached the Contract by preventing an agreement about how to address defects in the Contract's plans and specifications, we reverse the district court's grant of summary judgment for INET.
The district court dismissed DFW's claim against Hartford based on Hartford's affirmative defense that the claim was barred by the statute of limitations. DFW filed suit against Hartford and INET on August 5, 2013. In Texas, "[a] suit on a performance bond may not be brought after the first anniversary of the date of final completion, abandonment, or termination of the public work contract." TEX. GOV'T. CODE § 2253.078. The statute of limitations would bar DFW's suit if the Contract was terminated or abandoned before August 5, 2012. The district court construed a resolution by the DFW Board as a trigger date for limitations and alternatively found the Contract abandoned "years" before DFW filed suit. We disagree and reverse the district court's grant of summary judgment for Hartford on this claim.
It is undisputed that on June 7, 2012, the Board passed the following resolution ("Resolution"):
On the same document containing the resolution, the "Description" section stated: "This action will terminate Contract No. 9500377 [with INET]." The Action section of the document repeated the language of the Resolution itself just above the bullet-point "Description." Under "Justification," the document says "Board staff recommends the termination of this contract and seeks authorization to pursue any relief to which the Board may be entitled by reason of the contractor's default."
The district court concluded in the alternative that INET abandoned the contract long before August 2012, noting in summary fashion that DFW alleged that after October 2010, INET would do no further work on the Contract. As with termination, Hartford has the burden to show the parties abandoned the Contract before August 2012. See Int'l Shortstop, 939 F.2d at 1264-65. "`Abandonment' is principally a matter of intention which must be established by clear and satisfactory evidence," and if relying on conduct, "the acts relied upon must be positive, unequivocal and inconsistent with the existence of the contract." Capital Steel & Iron Co. v. Standard Accident Ins. Co., 299 S.W.2d 738, 740-41 (Tex.App.-Amarillo 1952, no writ) (citations omitted). We discern no such positive, unequivocal conduct that is inconsistent with the existence of a continuing Contract between INET and DFW. Rather, record evidence creates a fact issue about whether either party intended to terminate or abandon the Contract before August 2012. Accordingly, we reverse the district court's grant of summary judgment for Hartford and remand for further proceedings.
Because disputes of material fact remain, we REVERSE the grants of summary judgment for INET and Hartford