Court of Appeals of Texas, Fifth District, Dallas
Appeal from the 192nd Judicial District Court Dallas County,
Texas Trial Court Cause No. DC-16-08666
Justices Pedersen, III, Reichek, and Carlyle
L. CARLYLE JUSTICE
a dispute over the transfer of an interest in a limited
partnership (the "Partnership"). Both sides
asserted competing claims for breach of contract and
declaratory judgment. Following a bench trial, the trial
court (1) ruled in favor of appellees RRAC Development GP,
LLC and GFD Market Rate Group I, LLC; (2) awarded appellees
damages and appellate attorney's fees; and (3) ordered
appellant MetroMarke Multifamily Development Fund I, L.P. to
convey its Partnership interest to RRAC with an indemnity
containing certain specified terms.
appeal, MetroMarke contends (1) the trial court erred by
concluding MetroMarke "had to release its legal claims
relating to management under the indemnity for conveyance of
its partnership interest" and (2) there is legally
insufficient evidence of MetroMarke "causing damages to
RRAC and GFD." We affirm in this memorandum opinion.
See Tex. R. App. P. 47.4.
2015, the Partnership had three owners: general partner RRAC
owned .1%; limited partner MetroMarke owned 90%; and limited
partner GFD owned 9.9%. During that year, the Partnership
acquired land in Round Rock, Texas, on which it planned to
develop an apartment complex (the "Project").
section 13.1 of the Partnership Agreement, each partner had
the right, under certain circumstances, to issue a
"Buy-Out Notice" to any other partner requiring
that partner to either (1) sell its partnership interest to
the issuing partner, or (2) buy out the issuing partner's
interest. Upon receiving a Buy-Out Notice, the responding
partner had thirty days to elect one of those choices. The
Partnership Agreement (1) required that the closing date for
any buy-out be within sixty days of the responding
partner's election and (2) set the purchase price based
on the selling partner's total capital contributions.
Further, section 13.1 stated, "The interest being
conveyed shall be transferred free and clear [of] any and all
Claims, and shall include an indemnity from the Partner
conveying its interest in a form acceptable to the Partner
acquiring such interest."
2016, MetroMarke filed this lawsuit against RRAC, alleging
Partnership Agreement violations and requesting a declaratory
judgment regarding its rights to remove RRAC as general
partner. While the lawsuit was pending, MetroMarke
issued a Buy-Out Notice to RRAC. RRAC elected on March 30,
2017, to buy out MetroMarke's Partnership interest and
sent MetroMarke a proposed buy-out agreement that contained
an indemnity. MetroMarke responded by sending RRAC its own
proposed buy-out agreement, which contained a
rejected MetroMarke's proposed buy-out agreement, stating
(1) RRAC "has been categorically informed by its lenders
that [MetroMarke's proposed buy-out agreement] renders
them unable and unwilling to proceed to provide the necessary
funds to close the transaction" and (2) by insisting on
the terms in its proposed buy-out agreement, MetroMarke is
"in default of its obligations under the Partnership
Agreement including section 13.1 thereof," and has
caused the buy-out "to be impossible to
and GFD then asserted counterclaims against MetroMarke for
breach of contract- for failing, in essence, to provide an
indemnity "in a form acceptable to" RRAC-and for
declaratory judgment-again, in essence, that section 13.1
required MetroMarke to provide RRAC an indemnity acceptable
to it and allowed RRAC to reject an indemnity that did not
indemnify it against those claims or causes of action
MetroMarke had brought against RRAC in the lawsuit. RRAC and
GFD also requested an order specifically enforcing RRAC's
right to acquire MetroMarke's interest in the Partnership
for the agreed price, $3, 311, 468.01, and requiring an
indemnity in a form acceptable to RRAC.
filed an amended petition, asserting (1) it "timely and
properly" delivered its indemnity "in strict
accordance with the Partnership Agreement" and (2) RRAC
"wrongfully rejected" MetroMarke's indemnity
and "unlawfully demanded that MetroMarke end this
lawsuit and waive all claims of whatever nature that
MetroMarke has against RRAC and the other defendants,"
which "is not required by the Partnership
a four-day bench trial, the trial court signed a judgment in
which it (1) declared that under section 13.1,
"MetroMarke was required to agree to indemnify RRAC
against any and all claims or causes of action MetroMarke had
brought against RRAC in this lawsuit" and "RRAC had
the contractual right to reject as unsatisfactory an
indemnification that did not indemnify it against those
claims or causes of action and to insist on an
indemnification that protected it from those claims or causes
of action"; (2) awarded RRAC and GFD $2, 764, 555.00 in
damages against MetroMarke; (3) ordered that MetroMarke
transfer its Partnership interest to RRAC "for the price
of $3, 311, 468.01 (less offsets for any amounts adjudged
against [MetroMarke] in this Judgment)" and provide RRAC
with "an indemnity in form acceptable to [RRAC]";
and (4) provided for attorney's fees to RRAC in the event
of an unsuccessful appeal by MetroMarke.
The indemnity obligation
reviewing declaratory judgments, we look to the procedure
used to resolve the issue at trial to determine the
appropriate standard of review. See Tex. Civ. Prac.
& Rem. Code § 37.010; Castille v. Serv. Datsun,
Inc., No. 01-16-00082-CV, 2017 WL 3910918, at *13 (Tex.
App.- Houston [1st Dist.] Sept. 7, 2017, no pet.) (mem. op.).
Thus, in this case, we review the trial court's
declarations under the standard applicable to contract
interpretation, which is de novo. See Compass Bank v.
Calleja-Ahedo, 569 S.W.3d 104, 108 (Tex. 2018).
primary objective in construing contracts is to give effect
to the written expression of the parties' intent.
Pathfinder Oil & Gas, Inc. v. Great W. Drilling,
Ltd., 574 S.W.3d 882, 888 (Tex. 2019). "[A]
contract's plain language controls, not what one side or
the other alleges they intended to say but did not."
Id. We therefore look to "[o]bjective
manifestations of intent" and, in doing so, we must
"'presume parties intend what the words of their
contract say' and interpret contract language according
to its 'plain, ordinary, and generally accepted
meaning' unless the instrument directs otherwise."
Id. If the contract's language can be given a
definite legal meaning or interpretation, then it is not
ambiguous, and we will construe the contract as a matter of
law. See El Paso Field Servs., L.P. v. MasTec N. Am.,
Inc., 389 S.W.3d 802, 806 (Tex. 2012); see also E.I.
DuPont Nemours & Co. v. Shell Oil Co., 259 S.W.3d
800, 805 (Tex. App.-Houston [1st ...