Court of Appeals of Texas, Seventh District, Amarillo
Appeal from the 106th District Court Lynn County, Texas Trial
Court No. 15-12-07252, Honorable Carter T. Schildknecht,
QUINN, C.J., and CAMPBELL and PIRTLE, JJ.
crux of this case, it seems to me, is found in the difference
between two paragraphs of the parties' Allocation
Agreement. The agreement's paragraphs 3 and 4 read as
3. The total limitation on Appraised Value for all Qualified
Property under the Limitation Agreement of Ten Million
Dollars ($10, 000, 000) shall be prorated each tax year for
each of CWl, SRWE and SRWE II, with each such entity to be
allocated an amount of such total limitation that is the
product of (i) $10, 000, 000 multiplied (ii) by a fraction in
which the (a) numerator is the total nameplate capacity of
all wind turbines for the [sic] placed in service as of the
end of such period for such entity and (b) denominator is the
total nameplate capacity of all wind turbines placed in
service as of the end of such period for all such entities.
4. Each of CWI, SRWE and SRWE II shall be responsible for its
portion of the payments required under each of Articles III
and IV of the Limitation Agreement with such portion for each
such entity being the product of (i) the total payment
required multiplied (ii) by a fraction in which the (a)
numerator is the total nameplate capacity of all wind
turbines placed in service for such entity and (b)
denominator is the total nameplate capacity of all wind
turbines placed in service for all such entities (such
entity's fractional share being such entity's
respective "Allocation Percentage").
3 allocates the limitation on appraised value among the three
companies by a formula in which the $10 million limitation is
multiplied by a fraction. The numerator is the total
nameplate capacity of wind turbines placed in service for the
particular company; the denominator is the total nameplate
capacity of all the wind turbines placed in service by all
three companies. And the fraction states the "as
of" date for the calculation. The nameplate capacity of
turbines placed in service, for both the numerator and the
denominator, is determined "as of the end" of the
tax year for which the calculation is being performed.
4, the paragraph directly in dispute in this case, allocates
responsibility for payments required under Articles III and
IV of the Limitation Agreement. Payment responsibility is
allocated among the companies by a formula, under which the
total payment is multiplied by the very same fraction
described in paragraph 3: nameplate capacity of turbines
placed in service for the company over total nameplate
capacity of all turbines placed in service by all three
companies. But paragraph 4 omits the expressly-stated
"as of" date.
the parties did not expressly state an "as of" date
in paragraph 4, a date must be inferred to resolve their
dispute. If the inference, considering the agreement as a
whole, is that the parties intended, but simply neglected, to
state the same date as in paragraph 3, end-of-tax-year
figures will constitute the fraction. But the inference could
be that the parties intended some other "as of"
trial court agreed with the position of appellees, and the
independent third party, that the parties intended January 1,
the first day of the tax year, as the "as of" date.
Appellees argue that property is valued for ad valorem tax
purposes as of January 1, and many other taxation matters
also are keyed to the first of the year, so the parties
should be deemed to have intended to use that date in
colleagues disagree with the trial court, and essentially
adopt the position of appellant. Their analysis of the
agreements leads them to conclude that the parties intended
the "as of" date for paragraph 4's fraction to
be the date the calculation is being performed.
of the parties' positions regarding the "as of"
date to be applied in paragraph 4 is unreasonable to me. It
also seems to me there could be other reasonable readings not
adopted by either side. The majority finds it significant
that, under section 3.6 of the Limitation Agreement, the
independent third party is to provide the companies and the
school district with its calculations by November 1 of each
year. But under section 3.7 of the same agreement, payments
of amounts owed to the school district are to be made no
later than January 31. Since paragraph 4 addresses the
allocation of responsibility for payments due from the
companies, a reasonable reading of paragraph 4 might conclude
the calculation should be made when the payments are due.
short, this record does not convince me that the reading
given the Allocation Agreement by the trial court, or that
given it by the majority of this Court, is the
agreement's only reasonable reading. I would conclude the
Allocation Agreement is ambiguous regarding the "as
of" date to be applied in paragraph 4. See J.M.
Davidson, Inc. v. Webster, 128 S.W.3d 223, 231-32 (Tex.
reasons stated in the majority's opinion, the Court will
not render a declaratory judgment but will remand the cause.
I agree with that resolution of the appeal, but for the
different reasons I have outlined. I therefore do not join