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Daniels v. Cortez

Court of Appeals of Texas, First District

July 11, 2019


          On Appeal from the 190th District Court Harris County, Texas Trial Court Case No. 2017-39154

          Panel consists of Justices Lloyd, Kelly, and Hightower.



         This is a suit for declaratory relief associated with an outstanding note secured by real property. Enrique and Venessa Cortez sued the holders of the note, Bruce and Scholanda[1] Daniels, seeking a determination of the amount of principal and interest owed. The trial court granted summary judgment in favor of the Cortezes and issued the declaratory judgment they requested. On appeal, Bruce Daniels challenges the trial court's grant of summary judgment. We affirm.


         In August 2010, Bruce and Scholanda Daniels sold a home to Enrique and Venessa Cortez. The purchase price was paid by "wraparound" financing, where the Cortezes executed a promissory note payable to the Danielses in the exact amount of the existing first lien mortgage on the property that they owed to a lender. The Cortezes paid the balance of the purchase price in cash at the time of closing. At closing, the Danielses executed and delivered a warranty deed with vendor's lien to the Cortezes, and the Cortezes executed and delivered a promissory note with the principal payment in the amount of the mortgage, along with a deed of trust securing its payment.

         In 2017, the Cortezes contracted to sell the property to a third party. They requested a payoff statement from the Danielses, but the Danielses failed to provide one. After the Cortezes were unable to close on the sale of the property, they sued the Danielses seeking a declaratory judgment determining the amount of principal and interest owed on their second lien promissory note. Scholanda Daniels was served but did not appear or answer, and the court issued a default judgment against her. After hearing, the trial court granted summary judgment in favor of the Cortezes. Bruce Daniels appeals.

         Summary Judgment

         Daniels presents one issue on appeal, that he "created genuine issues of material fact on [his] affirmative defenses for excuse and failure to satisfy conditions precedent." His principal argument is that the contract for sale required the Cortezes to seek his consent before selling the home. The Cortezes respond that the trial court properly granted summary judgment because whether they were required to seek consent before selling the property has no bearing on a determination of the payoff amount.

         A. Standard of Review

         Declaratory judgments rendered by summary judgment are reviewed under the same standards that govern summary judgments generally. Hourani v. Katzen, 305 S.W.3d 239, 248 (Tex. App.-Houston [1st Dist.] 2009, pet. denied). We review the trial court's grant of a summary judgment de novo. Ferguson v. Bldg. Materials Corp. of Am., 295 S.W.3d 642, 644 (Tex. 2009) (per curiam) (citing Tex. Mun. Power Agency v. Pub. Util. Comm'n of Tex., 253 S.W.3d 184, 192 (Tex. 2007)).

         The summary judgment motion before us turns on questions of contract interpretation. When a court is called upon to interpret a contract, the court will give plain meaning to the words used in the writing. See City of Pinehurst v. Spooner Addition Water Co., 432 S.W.2d 515, 518-19 (Tex. 1968). When reviewing a contract, our goal is to determine the parties' true intentions as expressed in the instrument. See Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). We do not read any provision in isolation but consider each provision with reference to the whole. See id. In interpreting a contract, we give undefined words their plain, ordinary, and generally accepted meanings absent some indication of a different intent. U.S. Metals, Inc. v. Liberty Mut. Grp., Inc., 490 S.W.3d 20, 23 (Tex. 2016). 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) (citing Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011)). A contract is ambiguous if, after applying the principles of contract construction, it is subject to more than one reasonable interpretation. See Plains Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296, 305 (Tex. 2015).

         When the controversy can be resolved by proper construction of an unambiguous document, rendition of summary judgment is appropriate. See Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 862 (Tex. 2000). "On the other hand, if the contract is subject to two or more reasonable interpretations after applying the pertinent rules of construction, the contract is ambiguous, creating a fact issue on the parties' intent." J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003) (citing Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996)).

         B.Analy ...

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