Dennis Draper, Greg Hadley, and Charles Huston v. Austin Manufacturing Services I, Inc., 03-15-00429-CV

Background

AMS manufactured Golf Guru units for parties involved: TQI Systems, Ltd. (TQI) and a start‑up, Assistant‑Pro, Inc. (A‑Pro). Cornish controlled both entities; appellants were A‑Pro shareholders who signed personal guaranties.
Appellants signed guaranties promising to pay 25% of “all amounts due . . . under Purchase Order 1682 for the purchase of 5000 Golf Guru units,” and the guaranties expressly reference A‑Pro as the “Purchaser.”
The operative P.O. 1682 accepted by AMS, however, identifies TQI — not A‑Pro — as the purchaser (two versions exist: one for 5,000 units at $128.95 and one for 1,000 units at $133.08).
AMS delivered ≈5,300 units across multiple subsequent orders and claimed unpaid balances (~$241,978 receivables and additional inventory/‑WIP items) that were not reflected as unpaid under P.O. 1682 in AMS’s records.
The district court found A‑Pro a party to P.O. 1682, held appellants breached their guaranties, and awarded AMS judgment against appellants; appellants appealed challenging legal sufficiency.

Issues

Issue	Plaintiff's Argument (AMS)	Defendant's Argument (Appellants)	Held
Whether guaranties cover obligations when P.O. 1682 names TQI (not A‑Pro) as purchaser	Guaranties were intended to secure the A‑Pro project and AMS extended credit and performed under PO 1682 as part of the same transaction; course of dealing shows PO 1682 was a master/blanket PO covering subsequent takedowns	Guaranties are unambiguous and only apply to a PO 1682 in which A‑Pro is purchaser; the actual PO names TQI so condition precedent never occurred	Court: Guaranties unambiguously require A‑Pro as purchaser; PO 1682 names TQI; evidence legally insufficient to find A‑Pro was party to PO 1682 — judgment for AMS reversed as to appellants
Whether unpaid amounts from other POs or inventory/WIP are within guaranties limited to PO 1682	Subsequent takedown orders and parties’ conduct show those deliveries were part of the PO 1682 obligation	Guaranties expressly limit liability to amounts “under Purchase Order 1682”; unpaid balances are tied to different PO numbers or unlinked inventory and thus outside guaranties	Court: Guaranties limited to PO 1682; AMS’s unpaid balances were not shown to be due under PO 1682 — evidence insufficient to hold guarantors liable
Whether extrinsic evidence (draft POs, emails, industry practice) can alter unambiguous PO terms to make A‑Pro purchaser or to treat PO 1682 as blanket order	Surrounding negotiations, draft PO listing A‑Pro, emails requesting PO be in A‑Pro’s name, and testimony of blanket PO practice show parties intended A‑Pro to be covered	Parol‑evidence rule bars using extrinsic evidence to vary clear written terms; both guaranty and the accepted PO are unambiguous and control	Court: Extrinsic evidence cannot rewrite an unambiguous PO or expand guaranties; cannot treat PO 1682 as including subsequent, differently numbered orders
Whether district court’s liability findings are legally sufficient	AMS points to trial evidence and findings about deliveries, shared management, and invoices to support treating obligations as under PO 1682	Appellants contend evidence was no more than a scintilla or established opposite; records showed PO 1682 had no unpaid balance	Court: Legal‑sufficiency standard favors appellants; evidence failed to support findings that A‑Pro was party to PO 1682 or that guaranties covered the unpaid balances — findings reversed for appellants

Key Cases Cited

Anglo‑Dutch Petroleum Int’l, Inc. v. Greenberg Peden, 352 S.W.3d 445 (Tex. 2011) (contract interpretation depends on text considered with surrounding circumstances; extrinsic evidence cannot vary unambiguous terms)
Houston Expl. Co. v. Wellington Underwriting Agencies, Ltd., 352 S.W.3d 462 (Tex. 2011) (parol‑evidence rule and significance of deletions in printed form)
City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal‑sufficiency standard for reviewing fact findings)
Coker v. Coker, 650 S.W.2d 391 (Tex. 1983) (contracts construed to effect parties’ intent; ambiguous guaranties construed for guarantor)
McKnight v. Virginia Mirror Co., 463 S.W.2d 428 (Tex. 1971) (guaranties construed strictly and not extended beyond precise terms)
Vastine v. Bank of Dallas, 808 S.W.2d 463 (Tex. 1991) (guarantor liability limited to the contract’s precise terms)
Sun Oil Co. v. Madeley, 626 S.W.2d 726 (Tex. 1981) (surrounding circumstances may inform but not contradict contract text)
SSP Partners v. Gladstrong Invs. (USA) Corp., 275 S.W.3d 444 (Tex. 2008) (single‑business‑enterprise theory cannot impose one corporation’s obligations on another absent fraud)
Lucas v. Texas Indus., Inc., 696 S.W.2d 372 (Tex. 1984) (veil‑piercing requires exceptional circumstances such as fraud)