IN THE COURT OF APPEALS
FOR THE SEVENTH DISTRICT OF TEXAS
AT AMARILLO
PANEL C
MAY 24, 2006
______________________________PRAXAIR INC.,
Appellant
v.
STERLING CHEMICALS, INC.,
Appellee
_________________________________FROM THE 405TH DISTRICT COURT OF GALVESTON COUNTY;
NO. CV-0060; HON. WAYNE J. MALLIA, PRESIDING _______________________________
Memorandum Opinion _______________________________
Before QUINN, C.J., and REAVIS and HANCOCK, JJ. (1)
This appeal arises from a purported breach by Praxair, Inc. of a guarantee agreement it executed with Sterling Chemicals, Inc. Upon trial by jury, the trial court entered judgment awarding Sterling damages against Praxair. The latter appealed and presented us with seven issues to review. We need only address the sixth for it is dispositive. Through it, the corporation asserts that it did not guarantee performance or payment of the obligation upon which the judgment was founded. We agree, sustain the issue, and reverse the judgment.
The controversy at bar arises from the alleged failure of Praxair Hydrogen Supply, Inc. (PHS) to construct piping that complied with a designated standard. According to the record, PHS and Sterling struck a deal under which the former agreed to build a particular facility to sell items produced thereat to Sterling. Documents were signed memorializing the accord. Furthermore, Praxair executed a guarantee assuring the performance and payment of various duties of PHS. One of many issues below for the jury and trial court to address involved whether the contractual duty upon which Sterling sued fell within the scope of the guarantee. Both the trial court and jury said it did. Now we answer the same question, and do so by concluding that it did not.
Per §1.1 of the guarantee in question, Praxair obligated itself to:
unconditionally and irrevocably guarantee . . . to Sterling the full, faithful and timely performance of all of the obligations of PHS, including the full and timely payment of any monies required to be paid by PHS under the Agreements (such performance and payment obligations being hereinafter
collectively referred to herein as the "Obligations"), as and when same shall become performable or due and payable according to the terms thereof, as such Agreements may be modified from time to time by the parties.
(Emphasis added). The "Agreements" mentioned are defined in the guarantee. They consist of a "Ground Lease Agreement, a Product Supply Agreement for the supply of carbon monoxide, blend gas, hydrogen, and superheated steam, and a Utilities Agreement." Yet, Sterling tells us that
the agreements that were found to have been breached by PHS . . . were not found in the Ground Lease, the Product Supply Agreement, or the Utilities Agreement, but were instead consistent prior or contemporaneous agreements pertaining to the standards, quality, design and construction of the piping and equipment that was to be installed in [the] gas plant.
Thus, the controversy before us concerns whether these "consistent prior and contemporaneous agreements" fell within the borders of the guarantee. And, in resolving the matter we take care to read the guarantee agreement as a whole, see J. M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003) (stating that contracts must be read as a whole), and strictly construe it in favor of the guarantor, i.e. Praxair. See Reece v. First State Bank of Denton, 566 S.W.2d 296, 297 (Tex. 1978).
As previously mentioned, the contract before us relates to Praxair's promise to guarantee the performance and payment of certain items by PHS. Moreover, these duties are identified as the "Obligations" which Praxair agreed to perform or pay "as and when same shall become performable or due and payable according to the terms thereof, as such Agreements may be modified . . . ." The last phrase is telling. By alluding to performance and payment in accordance "to the terms thereof, as such Agreements may be modified", one sees that the terms of performance and payment contemplated are those defined by the original "Agreements" or their modifications. Simply put, the obligations imposed upon PHS under the "Agreements" dictate the extent of Praxair's liability. That this is true is buttressed by other provisions of the contract.
For instance, §1.3 of the accord describes Praxair's liability as "primary" and states that if PHS was to "fail or refuse to perform or pay all or any of the Obligations . . . [the] Guarantor agrees (i) to complete such performance as required under the Agreements . . . ." (Emphasis added). Additionally, under article two wherein the parties discuss the "term" or duration of the guarantee, it is stated that the "Guaranty shall remain in full force and effect until all Obligations of PHS under all of the Agreements guaranteed . . . are fully and faithfully performed . . . ." (Emphasis added). Both provisions say nothing about promises, contracts, duties, or the like of PHS other than those arising under the "Agreements." So, we find but one reasonable interpretation of the guarantee, and it equates the extent of Praxair's obligations as a guarantor to the duties of PHS as established in the "Agreements."
Our having so interpreted the guarantee leads us to but one outcome. This outcome is mandated by both the contractual definition ascribed by the parties to the word "Agreements" and the undisputed fact that the contracts purportedly breached by PHS "were not found in the Ground Lease, the Product Supply Agreement, or the Utilities Agreement", i.e. the documents comprising the "Agreements." Simply put, the duties allegedly breached by PHS fell outside the scope of Praxair's guarantee. (2) Thus, and as a matter of law, it was not liable for their performance or payment. In concluding otherwise, both the jury and trial court harmfully erred.
We reverse the judgment of the trial court and render judgment denying Sterling recovery against Praxair.
Brian Quinn
Chief Justice
Reavis, S.J., not participating.
1. Don Reavis, Justice (Ret.), Seventh Court of Appeals, sitting by assignment. Tex. Gov't Code Ann. §75.002(a)(1) (Vernon Supp. 2006).
2. We are mindful of Sterling's contention that the guarantee should be read as mandating that Praxair agreed to guarantee "all of the obligations of PHS" and only a portion of them constituted the timely payment of certain monies. In other words, Sterling posited that in using the word "all" before "obligations" then followed by the word "including" when alluding to the payment of monies, there must have been other obligations guaranteed, and those obligations allegedly were no less expansive than any and every liability of PHS, irrespective of its source. This proposition, however, ignores the references to other provisions of the document. Again, those provisions are §1.3 and article 2. They, when combined with the complete wording of §1.1, evince that every obligation to be guaranteed is brought under the umbrella of the word "Agreements" as expressly defined by the parties. Having to strictly construe the agreement as a whole, we again are led to the conclusion that the duties imposed by the "Agreements" are the only duties Praxair guaranteed.
colloquy following the trial court's ruling in which the State, without objection, queried Sanchez as to whether it was common to follow up on an investigation when an individual had been found in possession of a narcotic and that was why he returned to appellant's house. He also refers to the portions of the State's closing argument in which the prosecutor argued that this was a simple case because the dope was in appellant's pocket and the only witnesses testifying to the contrary had the motive to say something that did not make sense to obtain a different outcome. He then reasons that the argument, when taken in conjunction with Sanchez' reference to his suspicions, was a calculated attempt to arouse prejudice in the minds of the jurors in order to convict appellant on evidence not directed solely to the crime charged.
We disagree. Viewed in its context, the passing reference to the officer's prior suspicions was not so prejudicial that the prompt jury instruction to disregard was not sufficient to remove any reversible taint. This is particularly true in view of the fact that no other reference to the prior suspicions of the officer was made. Moreover, we do not think the portions of the State's argument to which appellant referred were more than permissible references to the State's view of the evidence. Appellant's first issue is overruled.
As we have noted, in his second issue, appellant questions whether the evidence is legally and factually sufficient to support the conviction because there was no in-court identification of him as the one in possession of the controlled substance. In presenting that argument, he says that the only evidence of identity was presented through jailer Aven, "who testified solely that Appellant was in the courtroom and was the person brought to jail the night of January 30, 2003." He then argues appellant was "not located in the courtroom by Jailer Aven or anyone else, and from the record there is no way to ascertain who Aven was referring to at the time he answered," and there is no testimony identifying appellant as the one accused of possessing the contraband on the night in question. Thus, because this identification was a fundamental element of the State's case, he contends the evidence is not sufficient to sustain his conviction. Because of this underlying argument, we consider it sufficient to question both the legal as well as the factual sufficiency of the evidence to support the conviction.
The standards governing our consideration of these contentions are axiomatic. In reviewing the legal sufficiency of evidence the question is whether, viewing the evidence in the light most favorable to the jury's verdict, any rational trier of fact could have found all the essential elements of the offense charged beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 2789, 61 L. Ed. 2d 849 660 (1979). In considering a factual insufficiency claim, the reviewing court asks whether a neutral review of the evidence, both for and against the jury verdict, demonstrates that the proof of guilt is so obviously weak as to undermine confidence in the jury's determination, or the proof of guilt, although adequate if taken alone, is greatly outweighed by contrary proof. See Johnson v. State, 23 S.W.3d 1, 11 (Tex. Crim. App. 2000). Identity can be proven either by direct or circumstantial evidence. Oliver v. State, 613 S.W.2d 270, 274 (Tex. Crim. App. 1979).
In supporting his argument, appellant cites United States v. Hawkins, 658 F.2d 279 (5th Cir. 1981) for the proposition that an uncertain in-court identification is insufficient if it is the only evidence. In considering the applicability of that proposition to this case, we note that in Hawkins, the court commented that although the witness in question was "somewhat less than unequivocal," the witness' description of the defendant and his testimony about the defendant's involvement "were more than sufficient to support the jury's verdict." Id. at 289. We also note that in cases such as Bickems v. State, 708 S.W.2d 541 (Tex. App.--Dallas 1986, no pet.), the court determined that other evidence, including the witness' positive identification of that appellant as the culprit, taken together with the circumstantial evidence that placed him in the area wearing similar clothing to those the victim had described his assailant as wearing at the time, was sufficient to support the conviction. Id. at 543.
In this case, jailer Aven was not only asked if he saw appellant in the courtroom, he was asked if he was the person brought into jail that night. He also testified that during the booking-in process at the jail, he and the other jailer took appellant's name, his social security number, and his date of birth. Additionally, there was the testimony we recited above about the arrest of appellant, his transportation to the jail, and the reference to the contraband falling out of his pocket. Under the record, the evidence was amply sufficient, both legally and factually, to support the verdict of the jury. Appellant's second issue is overruled.
In sum, both of appellant's issues are overruled and the judgment of the trial court is affirmed.
John T. Boyd
Senior Justice
Do not publish.
1. John T. Boyd, Chief Justice (Ret.), Seventh Court of Appeals, sitting by assignment.
Tex. Gov't Code Ann. §75.002(a)(1) (Vernon Supp. 2004-2005).