Reytec Construction Resources, Inc. v. Baptist Hospitals of Southeast Texas
09-15-00085-CV
| Tex. App. | Nov 23, 2016Background
- Reytec leased Hospital property as a laydown/storage yard for a one‑year term (commencement date in Lease: Feb. 28, 2010; termination: Feb. 28, 2011). Lease Paragraph 12 required surrender of premises in as good condition as at commencement.
- Reytec and the Hospital executed a separate, dated March 22, 2010 “Dump Contract” signed by a Hospital facilities director: Hospital agreed to accept delivery, possession, and responsibility for excavated material free of charge and stated Reytec was only obligated to stockpile material to allow mowing.
- Reytec stored excavated dirt on the Property under the Dump Contract; later the Hospital asked Reytec to remove the dirt, Reytec said the Dump Contract made the Hospital responsible and provided removal cost estimates.
- Lease was not formally executed by Hospital CEO until later (evidence shows some approvals in April–May 2010), but parties acted as if Lease commenced Feb. 28, 2010; Reytec began performance and occupied the Property earlier.
- At lease end Reytec removed equipment but left the excavated materials; Hospital later paid $100,000 to remove the dirt and sued Reytec for breach of the Lease (and asserted other claims), obtaining summary judgment and damages; Reytec appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Reytec breached Lease ¶12 by leaving excavated materials | Hospital: Reytec admitted failure to surrender premises in condition at commencement; summary judgment proper | Reytec: Dump Contract altered/released Lease obligations; not required to remove materials | Court: Issue of breach not resolved because genuine fact issues exist on modification/release/waiver defenses; summary judgment improper |
| Whether the Dump Contract merged into and was abrogated by the Lease (merger clause) | Hospital: Lease ¶24 (entire agreement; only written amendments) means Dump Contract merged/abrogated because Dump Contract preceded formal Lease execution | Reytec: Parties intended Lease effective Feb. 28, 2010; Dump Contract was contemporaneous and modified obligations | Court: Material fact dispute whether Lease was effective Feb. 28, 2010; Hospital failed to prove Dump Contract was abrogated as a matter of law |
| Whether the Dump Contract validly modified the Lease (affirmative defense: modification) | Hospital: No valid modification of Lease—Dump Contract had no effect once Lease executed | Reytec: Dump Contract shows meeting of minds and new consideration (free dump service); therefore modified Lease obligations | Court: Reytec produced more than a scintilla on modification elements (meeting of minds and consideration); fact issues preclude summary judgment |
| Whether Dump Contract effected waiver or release of Hospital’s rights under the Lease (affirmative defenses) | Hospital: Waiver/release not established because Dump Contract abrogated by Lease | Reytec: Dump Contract shows Hospital knowingly accepted responsibility (waiver/release) and conduct thereafter was inconsistent with asserting Lease rights | Court: Genuine fact issues exist on waiver and release; summary judgment precluded |
Key Cases Cited
- Buck v. Palmer, 381 S.W.3d 525 (Tex. 2012) (standard of review for summary judgment)
- Travelers Ins. Co. v. Joachim, 315 S.W.3d 860 (Tex. 2010) (summary judgment de novo review)
- Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323 (Tex. 2011) (contract interpretation—ascertaining parties' intent)
- J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (harmonize all contract provisions; consider entire writing)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (when evidence conclusively establishes a matter)
- Fort Worth Osteopathic Hosp., Inc. v. Reese, 148 S.W.3d 94 (Tex. 2004) (no‑evidence summary judgment—more than scintilla standard)
- Murphy v. Seabarge, Ltd., 868 S.W.2d 929 (Tex. App.—Houston [14th Dist.] 1994) (actions can manifest intent to be bound before formal execution)