KWSO Television Co., Inc. v. KFDA Operating Company, LLC
2014 Tex. App. LEXIS 8563
| Tex. App. | 2014Background
- Appellants are multiple Sellers; Appellees are Buyers under an asset purchase agreement (APA).
- Escrow of $5,750,000 was to be released to Buyers or Sellers depending on closing and termination grounds.
- Closing deadline was December 31, 2008; Buyers sought price reduction but Sellers refused.
- Buyers terminated the APA for Sellers’ breaches and filed suit to obtain escrow funds; Sellers terminated for Buyers’ breach and counterclaimed for escrow.
- Trial court granted partial summary judgment for Buyers; later proceedings led to a final judgment favoring Buyers, which was reversed and remanded by this Court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court could consider all grounds for summary judgment | Buyers limited motion to reconsider abandoned other grounds | Sellers contended grounds were abandoned or superseded | Trial court could consider all grounds based on substance, not title |
| Whether Buyers proved material breach as a matter of law | Buyers argued Sellers’ representations breached the APA in material respects | Sellers argued breaches were nonmaterial or not MAE under the contract terms | Ambiguity in materiality provisions precluded summary judgment for material breach |
| Whether no-pending action condition was independently met | Pending suit violated the no-pending-action condition | Contract ambiguity prevents automatic conclusion that condition failed | Ambiguity in section 6.1(a) rendered the no-pending-action condition inconclusive for summary judgment |
| Whether contract ambiguity bars summary judgment | Ambiguity means issues of material fact exist | Contract clear enough to grant judgment | APA ambiguities created genuine issues of material fact; no judgment as a matter of law |
Key Cases Cited
- Padilla v. LaFrance, 907 S.W.2d 454 (Tex. 1995) (cited regarding substitution of motions and related issues)
- Coker v. Coker, 650 S.W.2d 391 (Tex. 1983) (ambiguity may be decided on appeal; contract interpretation fact issue)
- Nixon v. Mr. Property Mgmt. Co., 690 S.W.2d 546 (Tex. 1985) (traditional summary judgment standards)
- Progressive County Mut. Ins. Co. v. Kelley, 284 S.W.3d 805 (Tex. 2009) (whether contract is ambiguous; summary judgment improper if ambiguous)
- J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (contract ambiguity determined as a matter of law)
- Lection v. Dyll, 65 S.W.3d 696 (Tex. App.—Dallas 2001) (motion to reconsider and evidentiary documents properly before court)
- Donahue v. Bowles, Troy, Donahue, Johnson, Inc., 949 S.W.2d 746 (Tex. App.—Dallas 1997) (contract interpretation; ambiguity requires fact-finder)
- VLIW Tech., LLC v. Hewlett-Packard Co., 840 A.2d 606 (Del. 2003) (material breach and MAE considerations)
- BioLife Solutions, Inc. v. Endocare, Inc., 838 A.2d 268 (Del. Ch. 2003) (material breach standards and MAE)
- Arredondo v. City of Dallas, 79 S.W.3d 657 (Tex. App.—Dallas 2002) (ambiguity and contract interpretation)