Arbor Windsor Court, Ltd. v. Weekley Homes, LP
463 S.W.3d 131
Tex. App.2015Background
- Arbor (seller/developer) and Weekley (purchaser) entered a 2006 Agreement for Sale and Purchase of Lots: Arbor would develop lots and Weekley would buy them on a rolling schedule; Arbor financed development with a $3.85M loan.
- Amendments were negotiated as performance lagged; by Dec. 1, 2008 Weekley had purchased 18 of 32–35 lots and a Fourth Amendment reset purchase timing.
- Arbor defaulted to its lender; Arbor did not send Weekley a 15-day written notice of default that the Agreement required; Arbor contends Weekley asked it not to send notice and that Arbor was excused.
- FETC foreclosed in 2009; Weekley bought the property at the foreclosure sale. Arbor sued Weekley for breach, fraud, and wrongful foreclosure; Weekley counterclaimed for breach.
- Jury answered that Arbor did not give the 15‑day notice (Q1: No), that Weekley failed to comply (Q3: Yes), and that Arbor did not fail to comply (Q4: No); Question 2 (whether Arbor was excused from giving notice) was not answered because of a predicate instruction.
- Trial court entered a take‑nothing judgment for Weekley; the majority affirms on the ground that the notice clause is a condition precedent and Arbor failed to obtain a jury finding that the condition was excused.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the contract's 15‑day written notice is a condition precedent to pursuing remedies | Arbor: clause is a covenant (or at least not a condition precedent) — construing it as a condition would produce forfeiture or absurd results | Weekley: clause conditions the right to exercise remedies; “prior to” is conditional language creating a condition precedent | Held: clause is a condition precedent as a matter of law; "prior to" ties notice/cure to right to remedies |
| Whether the jury’s negative answer that Arbor did not fail to comply (Q4: No) implicitly excused Arbor from the condition so Q1 is immaterial | Arbor: Q4’s “no” means Arbor was excused, so Q1’s negative finding about notice cannot defeat Arbor’s recovery | Weekley: Arbor had burden to prove excuse; absence of an express jury finding on excuse is fatal | Held: Q4 cannot be read as an affirmative finding Arbor was excused; Arbor failed to obtain or submit the excuse ground and thus waived it; Q1 remains material |
| Whether the trial court erred by entering judgment for Weekley on the verdict (or JNOV) | Arbor: trial court should not have entered a take‑nothing judgment because jury found Weekley breached and awarded damages to Arbor | Weekley: judgment supported by unanswered condition‑precedent finding and alternative motions | Held: trial court’s judgment affirmed on the basis that Arbor failed to perform an unexcused condition precedent; alternative Weekley grounds not reached by majority |
| Proper allocation of burden and effect of Rule 279/DiGiuseppe on broad‑form verdicts | Arbor: verdict on Q4 should be referable to excuse or at least not permit forfeiture absent explicit jury finding | Weekley: excuse is an independent defense that Arbor had to prove and submit; not conclusively established or submitted — waived | Held: Under Rule 279 and DiGiuseppe, Arbor bore the burden to obtain a jury finding on excuse; it did not, so the defense was waived and judgment stands |
Key Cases Cited
- Criswell v. European Crossroads Shopping Ctr., Ltd., 792 S.W.2d 945 (Tex. 1990) (contract interpretation: determine whether parties intended a covenant or condition precedent; avoid forfeiture when reasonable reading exists)
- Hohenberg Bros. Co. v. George E. Gibbons & Co., 537 S.W.2d 1 (Tex. 1976) (distinguishes conditions precedent to formation vs. to obligations; defines condition precedent)
- Solar Applications Eng’g, Inc. v. T.A. Operating Corp., 327 S.W.3d 104 (Tex. 2010) (conditional language must connect the condition to the conditioned obligation; avoid construing provisions as conditions when doing so causes forfeiture)
- DiGiuseppe v. Lawler, 269 S.W.3d 588 (Tex. 2008) (broad‑form verdicts and Rule 279: a jury finding that a party "complied" may not be referable to an essential element of a different claim or defense absent proper submission)
- Chambers v. Hunt Petroleum Corp., 320 S.W.3d 578 (Tex.App.-Tyler 2010) (contract construed as condition precedent only when language cannot reasonably be read otherwise)
- Cajun Constructors, Inc. v. Velasco Drainage Dist., 380 S.W.3d 819 (Tex.App.-Houston [14th Dist.] 2012) (examining notice/cure provisions and condition‑precedent analysis)