                         COURT OF APPEALS
                          SECOND DISTRICT OF TEXAS
                               FORT WORTH

                              NO. 02-15-00390-CV


COMPASS BANK                                                          APPELLANT

                                         V.

JERRY DURANT                                                            APPELLEE


                                      ----------

          FROM THE 43RD DISTRICT COURT OF PARKER COUNTY
                     TRIAL COURT NO. CV13-0933

                                      ----------

                                    OPINION

                                      ----------

                                 I. Introduction

      In four issues, Appellant Compass Bank appeals the trial court’s summary

judgment for Appellee Jerry Durant in a dispute over (1) the interpretation of early

termination fee provisions contained in certain documents, including an interest

rate swap agreement, that were executed by the parties in conjunction with a
commercial loan agreement and (2) the award of attorney’s fees to Durant. We

reverse and remand.

                    II. Factual and Procedural Background

      In 2008, Durant and Jeff Williams, a loan officer for Compass, entered into

negotiations for a loan related to an automobile dealership that Durant was

opening in Granbury. In the course of those negotiations, Durant signed both a

“swap agreement” and a note.

A. Swap Agreements

      To assist in understanding the facts of this case and the issues presented

on appeal, we provide a brief background on “swaps”—interest rate swaps, in

particular, including their purpose and structure.

      A financial swap is exactly what the name implies. It is a tool borrowed

from age-old bartering practices that has been adapted for use in modern-day

commercial transactions. At its fundamental core, it allows two parties, both of

whom possess something that they do not want, but each wanting something

that the other has, to trade their commodities.      The swap allows a party to

receive exactly what it wants, but otherwise would not have.

      Although bartering, or swapping, has been around for centuries, swaps did

not surface into financial markets until the late 1970s.1 They attracted national


      1
        Frederic Lau, Derivatives in Plain Words 25 (1st ed. 1997); U.S. Securities
and        Exchange        Commission,         Derivatives,      available       at
https://www.sec.gov/spotlight/dodd-frank/derivatives.shtml (last visited Jan. 3,
2017).

                                         2
attention in the wake of the home mortgage crisis of 2008, and served as part of

the impetus for the Dodd–Frank Act of 2010 which, for regulatory purposes,

expanded the definition of a security to include security-based swap agreements,

15 U.S.C.A § 78c (West Supp. 2016), and identified other types of swaps as

commodities. 7 U.S.C.A. § 1a (West Supp. 2016). Today, swaps are defined as

a type of “alternative trading system” and are highly regulated, with the

Commodity Futures Trading Commission (CFTC) serving as the primary

oversight agency providing for non-security-based swap transactions.          Id.   In

discharge of its duty to periodically report trading activity in the swaps market, the

CFTC publishes an online Weekly Swaps Report, which reports trillions of dollars

in swap activity in the U.S. in any given week. See id. § 2(a)(14).2

      A financial swap is used in the marketplace as a type of derivative3

designed to reduce risk. Generally speaking, it manifests itself in a contract

between two parties whereby both parties promise to make payments to each

other. Lau, supra note 1, at 40. In a basic interest rate swap,4 two parties trade


      2
        See      also     Weekly     Swaps       Report,     available      at
http://www.cftc.gov/MarketReports/SwapsReports/index.htm (last visited Jan. 3,
2017).
      3
        A derivative is a financial instrument that derives its value from a more
basic financial instrument. Henry N. Butler, Economic Analysis for Lawyers 918
(2d ed. 1998). For example, an option on a stock (a basic form of derivative)
derives its value from the underlying stock. Id. Derivatives can be used to either
increase or decrease risk. Id.
      4
      Although interest rate swaps—the type of swap at issue here—are the
most common, many other types of swaps appear in the marketplace. See 7
                                          3
a fixed-rate and variable-interest rate, agreeing to exchange interest rate

payments with one another. By entering into a swap agreement, the parties

“hedge” the risk associated with the interest rate provided for in another

transaction in which they are involved. As the court in Thrifty Oil Company v.

Bank of America National Trust & Saving Association explained,

      [O]ne [party agrees] to make payments equal to the interest which
      would accrue on an agreed hypothetical principal amount (“notional
      amount”), during a given period, at a specified fixed interest rate.
      The other [party] must pay an amount equal to the interest which
      would accrue on the same notional amount, during the same period,
      but at a floating interest rate. If the fixed rate paid by the first [party]
      exceeds the floating rate paid by the second [party], then the first
      [party] must pay an amount equal to the difference between the two
      rates multiplied by the notional amount, for the specified interval.
      Conversely, if the floating rate paid by the second [party] exceeds
      the fixed rate paid by the first [party], the fixed-rate payor receives
      payment. The agreed hypothetical or “notional” amount provides the
      basis for calculating payment obligations, but does not change
      hands.

322 F.3d 1039, 1042–43 (9th Cir. 2003).

      Interest rate swapping is beneficial when one borrower can obtain only a

fixed-rate interest payment loan but wants a loan with a variable interest rate,

while another borrower can obtain only a variable interest rate loan but wants a

fixed-rate interest payment instead. The swap agreement allows the parties to

U.S.C.A. § 1a(47) (defining the term “swap” to include interest rate swaps, cross-
currency rate swaps, basis swaps, currency swaps, foreign exchange swaps,
total return swaps, equity index swaps, equity swaps, debt index swaps, debt
swaps, credit default swaps, credit swaps, weather swaps, energy swaps, metal
swaps, agricultural swaps, emission swaps, and commodity swaps). But swaps
can also be tailor-made to “almost anything according to the customers’ needs.”
Lau, supra note 1, at 40.

                                           4
swap interest payments with one another, so that each one receives the

advantage—or the disadvantage—of the rate it actually wanted, rather than the

one it received from its lender.

      For example, assume ABC Company wants to borrow $100,000 on a two-

year note, but—not wanting to risk that interest rates would rise during the two-

year period, yet willing to forego the benefit of interest rates falling during that

same time period—seeks a 10% fixed interest note. The bank, however, will not

agree to a fixed interest note, but instead offers ABC a floating interest rate equal

to the London Interbank Offered Rate (LIBOR).5 XYZ Company also seeks a

$100,000 loan for a two-year term, except that XYZ—who is willing to risk that

interest rates will rise for the opportunity to reap the potential benefits of an

interest rate decline during the two-year period—seeks a floating interest note.

XYZ’s lender, however, offers only a 10% fixed interest rate loan. So, ABC and

XYZ enter into an interest rate swap agreement as follows: (1) ABC agrees to

pay a 10% fixed interest rate payment on a $100,000 “notional amount” 6 to XYZ




      5
        LIBOR is the interest rate that international banks with high-quality credit
ratings charge each other for loans. Butler, supra note 3, at 822. It is also the
rate that was used in the swap agreement at issue here.
      6
       The notional amount used in a swap agreement is not traded. Thrifty Oil
Co., 322 F.3d at 1043.

                                         5
each year for two years; (2) XYZ agrees to pay the LIBOR rate on the $100,000

notional amount each year for two years to ABC.7

      In this example, at the end of the first year, LIBOR is at 9%. The net

result—after offsetting the amounts owed by each to the other—is that ABC owes

XYZ a payment of $1,000,8 an amount representing the fluctuation in the interest

rate that occurred during the payment period (1% of $100,000). At the end of the

second year, LIBOR is at 12%. This time, after offsetting the amounts due by

both parties under the terms of the swap agreement, XYZ owes a net amount of

$2,000 to ABC,9 again, an amount representing the fluctuation in the interest rate

that occurred during the payment period (2% of $100,000). See generally Thrifty

Oil Co., 322 F.3d at 1043; Butler, supra note 3, at 822.

      This transaction is illustrated below:




      7
       Finding counterparties with identical offsetting needs complicates matters.
The use of derivatives dealers, however, solves the problem. Derivatives dealers
hedge their risks by entering into different types of swaps with numerous
counterparties and with diversity of risk, as well as through the use of futures and
options. Butler, supra note 3, at 823–24.
      8
       Pursuant to the terms of the swap agreement, ABC owes $10,000 to XYZ.
XYZ, in turn, owes $9,000 to ABC. Thus, the net amount due is $1,000, owed by
ABC to XYZ.
      9
     ABC owes $10,000 to XYZ. XYZ owes $12,000 to ABC. Thus, the net
amount due is $2,000, payable by XYZ to ABC.

                                          6
7
As the illustration shows, by its very design, a swap is a “hedge,”10 or a zero-sum

game. What a party loses in the transaction with the lender, it gains in the swap

transaction, and vice-versa. The same is true vis-à-vis the parties in the swap

deal—one party’s loss will always be equal to the other party’s gain.11

      As it turns out, in the example above, XYZ ended up paying $1,000 more

than it would have if it had simply accepted the terms as offered by its lender. 12

But XYZ lost only that which it would have lost anyway, had it received what it

wanted in the first place.

      A swap transaction could also be characterized as a win-win game. If the

measure of success is whether a party gets exactly what it wants, then the swap

yielded a 100% success rate for both ABC and XYZ. The bottom line is that a

swap agreement guarantees that each party will receive the benefit of the

bargain it wanted, but was unable to make, with its lender.13


      10
         “Hedging” is the making of simultaneous contracts to purchase and to
sell a particular commodity at a future date with the intention that the loss on one
transaction will be offset by the gain on the other. Butler, supra note 3, at 921.
      11
        Only if the floating interest rate remained at the fixed rate throughout the
duration of an interest rate swap would the result end in a draw. Under that
scenario, neither party would owe the other any money in the deal.
      12
         Here, Durant found himself in a similar position because interest rates fell
during the duration of the note. He admitted that had he not hedged against the
LIBOR rate offered by Compass and swapped his floating interest rate for a fixed
interest rate, he would have paid less interest overall.
      13
       XYZ—who wanted a floating interest rate but received a fixed interest
rate—received the benefit of a floating interest rate loan by virtue of the $1,000
payment from ABC when interest rates fell 1% in the first year. But in the second
                                         8
B. The Compass-Durant Swap Agreement and Note

      During the financial negotiations, Durant expressed to Compass his desire

to borrow $6 million at a fixed-interest rate for a term of 15 years. In addition,

Durant told Williams that he wanted to be able to prepay the loan without any

termination fee or penalty. To secure the benefits of the fixed-interest rate that

Durant wanted under the floating interest note he ultimately received, Compass

and Durant entered into a 15-year interest rate swap agreement.14 To hedge its

own risk under the swap agreement with Durant, Compass entered into a counter

hedge agreement with Wells Fargo with identical terms.

      Among other provisions, the swap agreement between Compass and

Durant provided for “Payments on Early Termination”—along with measures to

calculate the payment amounts that would become due if triggered—in the event

Durant defaulted on the swap agreement by paying off the note prior to the



year, when interest rates increased by 2%, the swap agreement worked to take
$2,000 out of XYZ’s pocket, which is exactly the amount XYZ would have owed
in interest if XYZ had received the floating interest rate note it sought instead of
the fixed-rate note it received.

      On the other hand, in the first year ABC—who wanted a fixed interest rate
but instead received a floating interest rate—had to forego the benefits it
received under the LIBOR note it did not want. However, in the second year,
when LIBOR rose to 12%, ABC was able to recoup the money it was required to
pay to its lender but would not have otherwise owed if it had received the fixed-
rate note it sought in the first place.
      14
        The parties signed an “ISDA Master Agreement,” a “Schedule” to that
Master Agreement, and a “Confirmation Letter,” hereafter collectively referred to
as “the swap agreement” or “the hedge agreement.”

                                         9
expiration of the swap agreement. Although Durant testified that he never read

the document, the summary judgment evidence shows that a “Risk Disclosure”

warning that “should you liquidate the swap contract prior to maturity, you may

realize a significant financial gain or a loss” was included as Exhibit B to the

ISDA Master Agreement.

      After the swap agreement had been executed, the attorney for Compass

sent the remaining loan documents to Durant’s attorney, who noticed that the

note did not include a right to prepay without penalty.            After additional

negotiations, the parties agreed to the following three-year prepayment penalty

provision in the note that was ultimately signed by Durant on May 2, 2008:

             1. Prepayments. [Durant] shall be entitled to prepay the
      unpaid principal balance hereof, from time to time and at any time, in
      whole or in part; however, in the event that [Durant] prepays the
      original principal balance hereof, then [Durant] shall also at that time
      pay to [Compass] a prepayment penalty (the “Penalty Amount”).
      The Penalty Amount shall be equal to (a) three percent (3%) of the
      then outstanding balance hereunder if the prepayment occurs on or
      before June 1, 2009; (b) two percent (2%) of the then outstanding
      balance hereunder if the prepayment occurs after June 1, 2009 but
      on or before June 1, 2010; and (c) one percent (1%) of the then
      outstanding balance hereunder if the prepayment occurs after June
      1, 2010 but on or before June 1, 2011.

      The note provided for interest at the LIBOR rate for the 15-year term, but it

also contained a provision acknowledging the existence—and obligations—of the

swap agreement that had been previously executed by the parties:

             18. Hedge Agreement. [Durant] acknowledges and agrees
      that this note evidences [Durant’s] obligation to pay to the order of
      [Compass] any and all amounts advanced from time to time under
      the Loan Agreement, together with interest on the unpaid principal

                                        10
      balance from time to time outstanding hereunder.             [Durant’s]
      obligations hereunder and under the Loan Agreement shall also be
      deemed to include all other obligations incurred by [Durant] under
      any agreement between [Durant] and [Compass] or any affiliate of
      [Compass], including but not limited to an ISDA Master Agreement,
      whether now existing or hereafter executed, which provides for an
      interest rate, currency, equity, credit or commodity swap, cap, floor
      or collar, spot or foreign currency exchange transaction, cross
      currency rate swap, currency option, any combination of, or option
      with respect to, any of the foregoing or similar transactions, for the
      purpose of hedging [Durant’s] exposure to fluctuations in interest
      rates, exchange rates, currency, stock, portfolio or loan valuations or
      commodity prices (each a “Hedge Agreement”). [Emphasis added.]

      Three years later, Durant decided to prepay his loan and terminate the

entire transaction.    At that point, Compass informed Durant that while no

prepayment penalty amount was due under paragraph 1 of the note, by paying

off the note prior to maturity, Durant would still be obligated—under the terms of

the swap agreement—to pay a termination fee of approximately $1 million to

obtain a release of the lien on the loan collateral.15

      Durant disputed that he owed any termination fee, and in June 2013, he

filed suit for breach of contract and for a declaratory judgment of non-liability, i.e.,

that he was not obligated to make an early termination payment if he paid off his

loan after three years. However, in order to receive the release of the lien on the

loan collateral during the pendency of the lawsuit, on August 28, 2013, Durant




      15
        Compass argued at the summary judgment hearing and on appeal that
the termination fee that Compass demanded was equivalent to the liability that
Compass incurred on its counter hedge agreement with Wells Fargo.

                                          11
paid—“under protest”—the $790,350 termination fee assessed by Compass,

along with the $5,108,343.81 balance due on the note.

      The parties filed competing motions for summary judgment in a piecemeal

fashion, and the trial court ruled on the various motions during the course of

litigation.16 On June 6, 2014, the trial court signed an order granting Durant’s

motion for partial summary judgment for declaratory judgment that “Jerry Durant

had the right to prepay the amount owed under the Promissory Note without

payment of any penalty, including any fee allegedly owed under the Master

Agreement, Schedule, and Confirmation.” On October 23, 2014, the trial court

denied Compass’s traditional motion for summary judgment in its entirety. By

order dated August 25, 2015, the trial court granted “in all respects” Durant’s

second motion for partial summary judgment seeking damages, but the order did

not specify the amount of damages awarded.

      In November, the trial court signed a final judgment, which incorporated

the June 6, 2014 and August 25, 2015 orders and recited

           Accordingly, it is hereby ORDERED, ADJUDGED, DECREED
      and DECLARED that after June 1, 2011 Jerry Durant had the right to
      prepay the amount owed under the Promissory Note without
      payment of any penalty or fee, including any fee claimed by
      Compass under the Master Agreement, Schedule, and Confirmation.

            ....



      16
         In its motion, Compass set forth eleven grounds for summary judgment.
As will be discussed later, only the first four grounds are at issue in this appeal.

                                        12
             It is therefore ORDERED, ADJUDGED and DECREED that
      Jerry Durant have and recover from Compass Bank actual damages
      in the amount of $790,350.00 and prejudgment interest thereon . . . .

            ....

            It is therefore ORDERED, ADJUDGED and DECREED that
      Jerry Durant have and recover from Compass Bank reasonable and
      necessary attorneys’ fees in the amount of $157,000.00 for
      prosecution of his breach of contract claim, or, in the alternative, his
      declaratory judgment claims . . . .

                             III. Standard of Review

      In a summary judgment case, the issue on appeal is whether the movant

met the summary judgment burden by establishing that no genuine issue of

material fact exists and that the movant is entitled to judgment as a matter of law.

Tex. R. Civ. P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,

289 S.W.3d 844, 848 (Tex. 2009). We review a summary judgment de novo.

Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010).

      We take as true all evidence favorable to the nonmovant, and we indulge

every reasonable inference and resolve any doubts in the nonmovant’s favor.

20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008); Provident Life &

Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). The summary

judgment will be affirmed only if the record establishes that the movant has

conclusively proved all essential elements of the movant’s cause of action or

defense as a matter of law. City of Houston v. Clear Creek Basin Auth., 589

S.W.2d 671, 678 (Tex. 1979).



                                        13
       A plaintiff is entitled to summary judgment on a cause of action if it

conclusively proves all essential elements of its claim.     See Tex. R. Civ. P.

166a(a), (c); MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986).

       A defendant who conclusively negates at least one essential element of

the plaintiff’s cause of action is entitled to summary judgment on that claim.

Frost Nat’l Bank v. Fernandez, 315 S.W.3d 494, 508 (Tex. 2010), cert. denied,

562 U.S. 1180 (2011).     Once the defendant produces sufficient evidence to

establish the right to summary judgment, the burden shifts to the plaintiff to come

forward with competent controverting evidence that raises a fact issue. Van v.

Pena, 990 S.W.2d 751, 753 (Tex. 1999).

       When both parties move for summary judgment and the trial court grants

one motion and denies the other, the reviewing court should review both parties’

summary judgment evidence and determine all questions presented.             Mann

Frankfort, 289 S.W.3d at 848. The reviewing court should render the judgment

that the trial court should have rendered. See Myrad Props., Inc. v. LaSalle Bank

Nat’l Ass’n, 300 S.W.3d 746, 753 (Tex. 2009); Mann Frankfort, 289 S.W.3d at

848.

       IV. Summary Judgment Granted on Durant’s Breach of Contract
                    and Declaratory Judgment Actions

       In its first three issues, Compass contends that the trial court erred by

granting Durant’s summary judgment on his breach of contract action against

Compass and by declaring that Durant had the right to prepay the amount under


                                        14
the note without the payment of any fee under the swap agreement, arguing that

the plain language of the swap agreement and related loan documents obligated

Durant to pay the early termination fee. We agree.

      Durant argues that the note’s three-year prepayment penalty provision and

swap agreement’s early termination provision are inconsistent with one another

and that the note’s three-year prepayment penalty provision governs. In his first

motion for partial summary judgment, Durant argued,

      [T]he Hedge Agreement, Promissory Note, and Loan Agreement are
      a part of one transaction and must be interpreted together. . . .
      [B]ecause the Promissory Note and Loan Agreement were executed
      after execution of the Hedge Agreement, the provisions of the
      Promissory Note and Loan Agreement control the inconsistency
      between them and the Hedge Agreement.

Compass, on the other hand, argued that the swap agreement is a stand-alone

agreement, completely independent from the Promissory Note.

      We need not decide whether the swap agreement and subsequent loan

documents are part of one transaction or whether they constitute two separate,

stand-alone transactions.   As will be discussed below, the note specifically

references and incorporates the relevant swap agreement provisions into it, such

that the terms in dispute here are provided for by reference in the note itself.

Also, even assuming that all documents executed between the parties between

March and May 2008 were part of a single transaction, Durant’s argument hinges

upon the assumption that these documents are inconsistent with one another,

and we disagree with that premise.


                                       15
      So the question is not whether the agreements Durant signed constitute

one transaction or two separate, stand-alone transactions, but rather whether the

terms of the note that relate to the consequences of Durant’s early pay-off of the

loan are ambiguous. For the reasons explained below, we hold that they are not.

A. The Note

      Both parties agree that paragraph 1 of the note provides that Durant was

entitled to prepay the unpaid principal balance of the note, in whole or in part, at

any time.   However, the note stops short of stating that Durant could do so

without penalty. In fact, both sides agree that the note provides that Durant was

obligated to pay a “prepayment penalty” or “penalty amount” if the original

principal balance was prepaid prior to June 1, 2011.

      In other words, while paragraph 1 of the note declared that Durant was

“entitled” to prepay unpaid principal balance in whole or in part, it also provided

that, depending upon timing—when Durant decided to exercise his entitlement—

he would be required to pay a penalty amount calculated by using a defined

percentage of the principal balance of the note. Neither side argues that these

two provisions create ambiguity or are in conflict with one another. Both seem to

agree that these two clauses combine to mean that while Durant could prepay

the note, such prepayment might subject him to penalty, depending upon the

timing of the prepayment.

      Likewise, immediately below paragraph 1, paragraph 2 provides that an

event of default under the note would include “[a]n ‘[e]vent of [d]efault’ as such

                                        16
term is defined in . . . any [h]edge [a]greement (defined below) involving this

note.” [Emphasis added.] By signing the note, Durant agreed to the terms of

paragraph 2 that further provided that if he defaulted under the swap agreement,

Compass had the right to “exercise any and all remedies set forth in . . . any

[h]edge [a]greement involving this note.”     Durant reaffirmed his obligation to

abide by the terms of the swap agreement in paragraph 18 of the note, which

defined the “hedge agreement” and incorporated all of the obligations under it. 17

See Bob Montgomery Chevrolet, Inc. v. Dent Zone Co., 409 S.W.3d 181, 189

(Tex. App.—Dallas 2013, no pet.) (holding that once a document is incorporated

into another by reference it becomes a part of that contract and “both instruments

must be read and construed together”).

      Thus, by executing the note, Durant agreed to two provisions regarding

prepayment of the note:     Paragraph 1, which required that if he prepaid the

unpaid principal balance of the note, he would, depending upon timing, be

subject to a prepayment penalty under that paragraph, and Paragraph 2, which

required that prepayment would also trigger a default under the swap agreement,

further subjecting him to a “Payment[] on Early Termination” provided for in the

swap agreement.      The provision for two types of penalties that would be


      17
          Paragraph 18 states that Durant’s obligations under the note included “all
other obligations incurred by [Durant] under any agreement between [Durant]
and [Compass] . . . including but not limited to an ISDA Master Agreement,
whether now existing or hereafter executed, which provides for an interest
rate . . . swap.” [Emphasis added.]

                                         17
triggered in the event of prepayment of the note’s unpaid principal balance—one

under the note, the other under the swap agreement—does not constitute an

inconsistency.    And the additional proviso that one, but not both, of the

prepayment penalty obligations would cease if the prepayment occurred after

June 1, 2011, does not change the equation. Coker v. Coker, 650 S.W.2d 391,

393 (Tex. 1983) (“[We] should examine and consider the entire writing in an effort

to harmonize and give effect to all the provisions of the contract so that none will

be rendered meaningless.”).

      Durant argues on appeal, as he argued at trial,

             [T]he subsequently negotiated Note specified the only
      prepayment penalty Durant would be required to make if he prepaid.
      After June 1, 2011, no prepayment penalty of any kind or amount is
      specified because there was to be none.[18] Compass knew Durant
      insisted upon the right to terminate the transaction early without any
      penalty or fee. Hence, if Compass intended that prepayment of the
      Note would generate a penalty or termination fee, including one
      under the Swap, it could easily have expressed that in the
      “Prepayments” paragraph in the Note.

We acknowledge that the summary judgment record includes evidence that

Durant had voiced his desire for the right to terminate the transaction early

without any penalty or fee, and that Compass knew that Durant wanted that right.

But to glean the meaning of a contract, we must look first to the instrument itself

as the written embodiment of the parties’ intent, not to the intent of the parties as


      18
        As mentioned above, the note contained no statement to the effect that
the prepayment penalty in paragraph 1 was the “only prepayment penalty Durant
would be required to make.”

                                         18
subsequently asserted. Id. (stating that when contracts are so worded that they

can be given a certain or definite legal meaning or interpretation, then they are

not ambiguous, and the court will construe them as a matter of law); see Lopez v.

Muñoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 861 (Tex. 2000) (stating that

the court will enforce an unambiguous contract “as written.”).

      And Durant’s argument that “[a]fter June 1, 2011, no prepayment penalty

of any kind or amount is specified,” is not accurate because it overlooks two

paragraphs in the note itself. The terms of the swap agreement, which obligated

Durant to make certain payments upon early termination of the swap agreement,

were incorporated into the note in paragraphs 2(c) and 18.

      Likewise, the contention that “if Compass intended that prepayment of the

Note would generate a penalty or termination fee . . . under the Swap, it could

easily have expressed that in the ‘Prepayments’ paragraph in the [n]ote,” is

certainly true. But it ignores the fact that note did express, by reference—not in

the “prepayments” paragraph, but in the paragraph that immediately followed

entitled “Events of Default and Remedies,” and in a later paragraph entitled

“Hedge Agreement”—that Durant would be obligated to pay a termination fee

under the swap agreement in the event of early termination.19           See Bob

Montgomery Chevrolet, Inc., 409 S.W.3d at 189.


      19
        Perhaps more significant is what the note does not state. The note does
not state that upon prepayment, Durant would owe only the penalty provided for
under paragraph 1 and no other. Had such a statement appeared in the note,
our analysis regarding ambiguity would have been quite different.
                                        19
B. The Swap Agreement

      The Schedule to the ISDA Master Agreement provided, in part 1,

paragraphs (i) and (j), that prepayment of the note constituted an “Additional

Termination Event” and an “Additional Event[] of Default,” both of which triggered

an obligation for “Payments on Early Termination.”20      Unlike the prepayment

penalty calculation in the note, which was based upon a percentage of the

principal balance of the note, the “Payments on Early Termination” calculation in

the swap agreement is based upon market quotations and the amount of

Compass’s loss with respect to the swap agreement.

C. The Note and the Swap Agreement

      Reading paragraphs 1, 2, and 18 of the note together, with regard to

prepayment of the note, Durant agreed to these essential terms: (1) If Durant

prepaid the note within the first three years, he would owe a “prepayment

penalty” under the note and a “Payment[] on Early Termination” pursuant to the

swap agreement; and (2) If Durant prepaid the note after three years, he would

owe no “prepayment penalty,” but only a “Payment[] on Early Termination”

pursuant to the swap agreement. To construe the note otherwise, as Durant

proposes, would require the striking of two full paragraphs—paragraphs 2 and

18—from the note. See Rutherford v. Randal, 593 S.W.2d 949, 952–53 (Tex.

      20
        Compass refers to the payment obligation under this provision in the
swap agreement as a “termination fee”; Durant refers to it as a “prepayment
penalty.” In the ISDA Master Agreement and Schedule, it is referred to as
“Payments on Early Termination.”

                                       20
1980) (holding that in the absence of ambiguity, courts must not consider

extrinsic evidence of intent, but rather limit consideration to the provisions in the

written document itself); Rubinstein v. Lucchese, Inc., 497 S.W.3d 615, 625 (Tex.

App.—Fort Worth 2016, no pet.) (“We are not permitted to rewrite an agreement

to mean something it did not.”).

      This transaction was negotiated between sophisticated parties who were

represented by counsel, who, in turn, actively negotiated changes to the note on

the very issue in dispute here. Parties to a contract are masters of their choices

and are entitled to select what terms and provisions to include in or omit from a

contract.   See Lucchese, 497 S.W.3d at 625; Healthcare Cable Sys., Inc. v.

Good Shepherd Hosp., Inc., 180 S.W.3d 787, 791 (Tex. App.—Tyler 2005, no

pet.); Birnbaum v. Swepi LP, 48 S.W.3d 254, 257 (Tex. App.—San Antonio 2001,

pet. denied). Thus, we presume that the parties to a contract intend every clause

to have some effect. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121

(Tex. 1996). With those principles in mind, when interpreting a contract, we must

examine the entire document and consider each part with every other part, so

that the effect and meaning of one part on any other part may be determined. Id.

      So, while the record may support Durant’s contention that during the

period of negotiation both parties understood that Durant wanted to include in the

agreement the ability—after three years’ time—to pay off his note without any

penalty, fee, or additional payment of any kind, the plain language of the note—

as well as other documents he signed—provided otherwise. And, as explained

                                         21
above, because the note and the swap agreement are not in irreconcilable

conflict, but can be read together in harmony, we must deem the unambiguous

contract to express the intention of the parties. The law has been thus for more

than half a century. See Woods v. Sims, 273 S.W.2d 617, 620–21 (Tex. 1954).

In Woods, the court stated,

      Generally the parties to an instrument intend every clause to have
      some effect and in some measure to evidence their agreement, and
      this purpose should not be thwarted except in the plainest case of
      necessary repugnance. Even where different parts of the instrument
      appear to be contradictory and inconsistent with each other, the
      court will, [if] possible, harmonize the parts and construe the
      instrument in such way that all parts may stand and will not strike
      down any portion unless there is an irreconcilable conflict wherein
      one part of the instrument destroys in effect another part.

Id.; see Magee v. Hambleton, No. 02-08-00441-CV, 2009 WL 2619425, at *3

(Tex. App.—Fort Worth Aug. 25, 2009, pet. denied) (mem. op.) (citing Woods to

recite that the court attempts harmonization because “the parties to an

instrument intend every clause to have some effect”); see also Sun Oil Co.

(Delaware) v. Madeley, 626 S.W.2d 726, 727–28 (Tex. 1981) (stating that in

construing an instrument, the court’s task is to seek the parties’ intention “as that

intention is expressed” in the document).

      Moreover, reading the note to embrace the terms and obligations of the

swap agreement is a construction consistent with the economic realities of the

transaction itself. The supreme court has instructed us that we should construe

contracts “from a utilitarian standpoint bearing in mind the particular business

activity sought to be served.” Frost Nat’l Bank v. L & F Dist., Ltd., 165 S.W.3d

                                         22
310, 312 (Tex. 2005); see also Cook Composites, Inc. v. Westlake Styrene

Corp., 15 S.W.3d 124, 132 (Tex. App.—Houston [14th Dist.] 2000, pet. dism’d)

(explaining that we should consider “the purposes which the parties intended to

accomplish by entering into the contract”).

      Here, Durant signed a note with a LIBOR interest rate, but because he

wanted a fixed rate loan, he entered into a swap agreement for 15 years, the life

of his loan. As it turned out, interest rates declined during the life of the loan, and

in his deposition, Durant admitted that, in hindsight, he should have entered into

the LIBOR interest rate note that Compass offered without a swap agreement to

receive fixed interest protection.    Nevertheless, from 2008 until 2011, Durant

enjoyed the potential benefit of the agreement, i.e., protection against rising

interest rates that he would have been contractually obligated to pay by

swapping for a fixed interest rate payment instead.

      Three years after the agreement was executed between the parties and

twelve years’ shy of the swap agreement’s termination date, Durant attempted to

unilaterally walk away from the deal. At that point, Compass was entitled to

receive the benefit of the bargain it made by entering into the swap agreement

with Durant,21 the risk of which was hedged through a counter-swap with Wells


      21
        As the court in Thrifty Oil explained,

            A fundamental characteristic of an interest rate swap is that
      the counterparties never actually loan or advance the notional
      amount. The swap involves an exchange of periodic payments
      calculated by reference to interest rates and a hypothetical notional
                                          23
Fargo.22   The early termination payment, calculated on market quotations to

determine the amount of loss, if any, incurred by Compass as a result of the

default, was the contractual mechanism23 that provided compensation for such

an occurrence.24



      amount . . . The amount of net periodic payments exchanged under
      the swap, and the counterparty entitled to receive them, depend on
      movements in short term interest rates that have no connection with
      any underlying loan. The damages due upon termination of the
      swap merely provide the replacement cost of the lost swap
      payments . . .

322 F.3d at 1048 (emphasis added).
      22
         According to the summary judgment evidence in this record, Compass
counter-hedged with Wells Fargo so that it would receive the benefit of a LIBOR-
rate note after it hedged with Durant for a fixed-rate note. Except for Compass’s
demand for—and acceptance of—$790,350 from Durant as an early termination
payment, the record is silent as to what costs were actually incurred by Compass
in undoing its counter-hedge with Wells Fargo. Durant challenged not only the
validity of the obligation but also Compass’s calculation of the amount of the
obligation.
      23
        Some swap agreements do not permit the defaulting party to collect
termination damages. Thrifty Oil Co., 322 F.3d at 1043.
      24
         Whether a party is “in the money” or “out of the money” usually
determines whether damages are recoverable in the event of a default or early
termination of the agreement because “[m]ost [swap] agreements provide that, in
the event of an early termination or default, the party in the money is entitled to
collect ‘termination damages.’” Thrifty Oil Co., 322 F.3d at 1043. A party to a
swap agreement whose position is yielding a positive value under the swap is
considered “in the money” while a party with negative value is considered “out of
the money.” Id. The swap agreement between Compass and Durant embraced
this method for determining whether Durant would be required to pay Compass
an early termination payment.

      Ordinarily, termination or default damages represent “the replacement cost
of the terminated swap contract.” Id. Thus, termination damages are typically
                                        24
      Exhibit B to the ISDA Master Agreement Schedule, entitled “Risk

Disclosure for Interest Rate Swaps,” provided edification to Durant on this point,

in basic terms, along with conspicuous warnings as to the potential complexity of

a swap agreement:

             An interest rate swap is a legal contract between two parties
      to exchange a set of cash flows over a specific period of time. In a
      typical interest rate swap, a party’s floating rate payments on a loan
      are exchanged, or “swapped,” for another party’s fixed rate
      payments on a similar loan. Interest rate swaps, if properly selected
      and structured, may be a useful tool to alter the characteristics of a
      party’s interest payments or receipts. For example, swapping
      floating rate payments for fixed rate payments in a time of rising
      interest rates may allow a party to avoid increased interest
      expense . . . .

             One of the benefits of an interest rate swap is the ability to
      liquidate the swap contract at any point in time. It is important to
      realize, however, that should you liquidate the swap contract
      prior to maturity, you may realize a significant financial gain or
      a loss.

             Swaps Are for Financially Sophisticated Parties. Interest
      rate swap transactions are designed primarily for sophisticated
      financial parties . . . . If, for any reason, you do not believe that you
      have a sufficient understanding or appreciation of the risks
      associated with a particular interest rate swap transaction, you
      should not enter into it . . . .

           You Should Consult With Your Accounting, Tax and Legal
      Advisers before Entering into A Swap.




calculated “by obtaining market quotations for the cost of replacing the swap at
the time of termination.” Id. The swap agreement between Compass and Durant
also provided for this method to calculate payments on early termination.
                                         25
Durant, however, testified that he did not review these risk disclosures prior to

executing the swap agreement.25 And although the summary judgment evidence

shows that Durant’s attorney was involved in negotiating the terms of the note,

the evidence also suggests that the attorney’s involvement began sometime after

the swap agreement had already been signed by Durant but prior to the time that

Compass signed the swap agreement.26

      The economic reality of this sophisticated financial transaction must be

taken into account when construing the written documents that provide its

      25
       The summary judgment evidence shows that Durant signed both the
Master Agreement and the Schedule to the Master Agreement on March 24,
2008. The Risk Disclosure was Exhibit B to the Schedule to the Master
Agreement.

       In Durant’s motion for partial summary judgment, he stated,
      26



            The three documents constituting the Hedge Agreement were
      signed by Durant in March but not by Compass until on various
      dates in mid-April. Before Compass signed the Hedge Agreement, it
      advised Durant’s attorney, John Westhoff, that Compass was
      preparing the rest of the loan documentation. When Mr. Westhoff
      later received drafts of those transaction documents, he told
      Compass they did not include a right to prepay the loan without
      penalty.

Durant cites to Exhibit C in the summary judgment evidence, a document
identified as an “Affidavit of John Westhoff,” but no such affidavit or Exhibit C
appears in the record on appeal.

      Compass attached Durant’s interrogatory responses to its summary
judgment motion, in which Durant was asked to identify “each person who was in
any way involved in the due diligence conducted by you in connection with
deciding to enter into the ISDA Master Agreement and/or Loan Documents.” As
part of his response, Durant stated, “[Durant] consulted with his attorney, John
Westhoff, before he executed the Loan Documents,” but he did not state that he
consulted John Westhoff before he executed the ISDA Master Agreement.
                                       26
foundation.    After having received written warnings about the potential for

significant financial loss upon early termination of the swap contract and having

employed an attorney to assist him in negotiating and crafting the very note that

not only acknowledged the existence of the hedge agreement and Durant’s

obligations thereunder but incorporated the swap agreement’s events of default

and the consequences thereof into the note itself, Durant cannot now ignore it.

See Heritage Res., Inc., 939 S.W.2d at 121 (“We presume that the parties to a

contract intend every clause to have some effect.”). But in declaring that “Jerry

Durant had the right to prepay the amount owed under the Promissory Note

without payment of any penalty or fee, including any fee claimed by Compass

under the Master Agreement, Schedule, and Confirmation,” the trial court

essentially allowed Durant to do just that. In effect, the trial court rewrote the

note and deleted paragraphs 2 and 18, which explicitly acknowledge and

incorporate Durant’s obligations under the Master Agreement, Schedule, and

Confirmation that provided for additional fees or payments upon early

termination.

      Whether the swap agreement and the loan agreement are part of one

transaction or whether they constitute two separate, stand-alone transactions,

the note unambiguously embraces the swap agreement such that any act of

default under the swap agreement constitutes an act of default under the note as

well, entitling Compass to all remedies provided for in the swap agreement. See

Bob Montgomery Chevrolet, Inc., 409 S.W.3d at 189. For these reasons, we

                                       27
hold that the trial court erred in granting Durant’s motion for summary judgment

on his breach of contract and declaratory judgment actions.

              V. Compass’s Cross Motion for Summary Judgment
     on Durant’s Breach of Contract and Declaratory Judgment Actions

      Because both parties moved for summary judgment and the trial court

granted one motion and denied the other,27 we must review both parties’

summary judgment evidence, determine all questions presented and render, if

possible, the judgment that the trial court should have rendered. See Myrad

Props., Inc., 300 S.W.3d at 753; Mann Frankfort, 289 S.W.3d at 848. Having

held that the trial court should have denied Durant’s motion for summary

judgment on breach of contract and for a declaratory judgment, we now turn to

Compass’s cross-motion for summary judgment to determine whether it should

have been granted.

      In its first two traditional summary judgment grounds, Compass challenged

Durant’s breach of contract action, and in its third and fourth traditional summary

judgment grounds, Compass challenged Durant’s declaratory judgment action.28


      27
         On October 23, 2014, the trial court signed an order denying Compass’s
traditional motion for summary judgment “in its entirety.” Although the November
19, 2015 final judgment did not explicitly incorporate the denial of Compass’s
traditional motion for summary judgment into its rulings, it did so implicitly,
stating, “All relief requested in this case and not expressly granted in partial
summary judgments incorporated herein or in this Final Judgment be and hereby
is denied. This Final Judgment finally disposes of all parties and claims in this
action and is final and appealable.”
      28
         In seven other grounds, Compass challenged other causes of action
originally brought by Durant, but those grounds are not at issue in this appeal.

                                        28
A. Breach of Contract Action

      In the trial court, Compass argued that it was entitled to judgment as a

matter of law on Durant’s breach of contract action because: (1) “The plain terms

of the Loan Documents establish that [Durant] was obligated to pay the Closeout

Fee to Compass if he paid off the Promissory Note prior to the expiration of its

term”; and (2) “The interpretation of the Loan Documents made the basis of

Durant’s claim for breach of contract is contrary to the plain terms of the Loan

Documents.”

      In response, Durant argued that even if Compass was correct in its theory

of liability under the note and other loan documents, a fact issue existed as to

whether a breach occurred as to the actual amount that Compass could withhold

as an early termination fee under the swap agreement, and that such fact issue

precluded summary judgment.         Durant included—as Exhibit “A” to his

response—his affidavit in which he stated,

            Through my attorneys, I entered into an agreement with
      Compass that my payment of the demanded penalty would result in
      Compass’s releasing its lien on my property, but that the payment
      would not waive or prejudice my right to challenge Compass’s right
      to demand the penalty.

             At some point on August 29th, someone who claimed to be
      from Compass Bank called me to confirm that I wanted to terminate
      the [swap] Agreement. On that call I confirmed that I wanted to
      terminate the [swap] Agreement and acknowledged, as had been
      arranged through my lawyers, that I would pay the amount of the
      claimed penalty effective as of the time Compass received my
      payments, though without waiving my rights in this suit. During the
      call, I did not agree that, if a termination penalty was owed, the
      amount would be $790,350.00 exclusive of any other amount. In

                                       29
     fact, at the time of the call from Compass on August 29th, I did not
     have any actual knowledge of how Compass calculated the
     termination penalty it quoted me, nor had Compass provided me
     with the detailed termination statement required by the [swap]
     Agreement . . . .

            ....

           I did not agree that the amount quoted on the phone was an
     accurate calculation of the penalty, or that I was waiving the right to
     challenge the penalty in court.

           To this day, Compass has never provided me with a statement
     or other explanation describing in any detail Compass’s calculations
     of the claimed termination penalty, nor has it provided any
     quotations or other information supporting its August 29, 2013
     calculation of the termination penalty amount.

            ....

            . . . I lost at least $10,605.00 due to what Compass claims was
     an intra-day rate change that occurred between 9:12 a.m. and the
     time Compass got around to terminating the [swap] Agreement and
     calculating the claimed penalty.

We agree that Durant’s summary judgment evidence as recited above raised a

fact issue that precluded the granting of Compass’s traditional motion for

summary judgment on Durant’s breach of contract action. Thus, the trial court

did not err in denying Compass’s first and second grounds for summary

judgment.

B. Declaratory Judgment Action

     Regarding Durant’s declaratory judgment action, Compass argued in its

third and fourth summary judgment grounds that “there is no justiciable

controversy as to the rights and status of the parties,” and that “Durant’s


                                       30
declaratory judgment claim is duplicative of his other claims.” To support these

grounds in its summary judgment motion, Compass exclusively relied upon

opinions from federal courts and cited only to federal district court cases involving

declaratory judgments in the context of dismissal, not summary judgment,

proceedings.

      First, when federal courts are called upon to consider a declaratory

judgment action, they do not apply the Texas Declaratory Judgments Act (TDJA).

Instead, the declaratory judgment action sought is “in effect converted into one

brought under the federal Declaratory Judgment Act” when the case is removed

to federal court. See, e.g., Redwood Resort Props., LLC v. Holmes Co., No.

3:06-CV-1022-D, 2007 WL 1266060, at *4 (N.D. Tex. Apr. 30, 2007). Thus, the

grounds and law upon which Compass relied to seek summary judgment relief

regarding Durant’s declaratory judgment action do not govern actions brought

under the TDJA in Texas courts.

      More to the point, however, Compass’s third and fourth summary judgment

grounds are contrary to Texas law.            See MBM Fin. Corp. v. Woodlands

Operating Co., L.P., 292 S.W.3d 660, 667–70 (Tex. 2009) (holding that under the

TDJA, declarations of non-liability under a contract are permitted, both before

and after a breach, and even when a breach of contract action is available);

Reynolds v. Sw. Bell Tel., L.P., No. 02-05-00356-CV, 2006 WL 1791606, at *5

(Tex. App.—Fort Worth June 29, 2006, pet. denied) (mem. op.) (citing Bonham

State Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. 1995), for the proposition that,

                                         31
for purposes of the TDJA, a “justiciable controversy” is more than merely a

“hypothetical or contingent situation,” a “theoretical dispute,” or a question that is

“not currently essential to the decision of an actual controversy,” but, instead, is a

“real and substantial controversy” that involves “a genuine conflict of tangible

interests”). For these reasons, the trial court did not err by denying Compass’s

third and fourth grounds for summary judgment.

      Therefore, we cannot render judgment on Compass’s cross-motion for

summary judgment.29


      29
         With regard to the third ground, in so holding we focus on the ground as
raised by Compass: “Compass is entitled to summary judgment on Durant’s
claim for declaratory judgment because there is no justiciable controversy as to
the rights and status of the parties as Compass is entitled to collect the Closeout
Fee pursuant to the parties’ agreements.” [Emphasis added.] See Tex. R. Civ.
P. 166a(c); State Farm Lloyds v. Page, 315 S.W.3d 525, 532 (Tex. 2010) (stating
that a “[s]ummary judgment may not be affirmed on appeal on a ground not
presented to the trial court in the motion”). Both in the ground as stated in
Compass’s motion and in its argument in support of that ground, Compass
claims entitlement to summary judgment because “there is no justiciable
controversy as to the rights and status of the parties.” The question of
justiciability implicates subject matter jurisdiction and standing to bring a claim
and does not turn on the merits of a particular cause of action. See Heckman v.
Williamson Cty., 369 S.W.3d 137, 162 (Tex. 2012) (discussing generally that
justiciability is a component of standing and reiterating that the Texas constitution
bars courts from deciding cases where there is no justiciable
controversy); DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 305 (Tex. 2008)
(explaining that failure to prevail on the merits of a claim does not mean that the
party lacks standing); Patterson v. Planned Parenthood of Houston & Se. Tex.,
Inc., 971 S.W.2d 439, 442 (Tex. 1998) (stating that ripeness “implicates subject
matter jurisdiction, and like standing, emphasizes the need for a concrete injury
for a justiciable claim to be presented”) (citations omitted); Lake v. Cravens, 488
S.W.3d 867, 887–88 (Tex. App.—Fort Worth 2016, no pet.) (op. on reh’g)
(discussing the distinction between a claim’s justiciability and its merits). Thus,
notwithstanding the disposition of Durant’s breach of contract and declaratory
judgment actions on appeal, our review of the propriety of trial court’s denial of
                                         32
     VI. The Award of Attorney’s Fees to Durant on Breach of Contract
                   and Declaratory Judgment Actions

      In its fourth issue, Compass challenges the award of attorney’s fees to

Durant under sections 37 and 38 of the Texas Civil Practice and Remedies

Code.30 See Tex. Civ. Prac. & Rem. Code Ann. § 37.009 (West 2015) (providing

that, in any proceeding under the TDJA, the trial court may award reasonable

and necessary attorney’s fees that are equitable and just), § 38.001(8) (West

2015) (providing that a party may recover reasonable attorney’s fees for a “valid”

claim under an oral or written contract).

      In light of our reversal of Durant’s summary judgment related to his cause

of action for breach of contract, the award of attorney’s fees to Durant on this

cause of action must also be reversed. See Green Int’l, Inc. v. Solis, 951 S.W.2d

384, 390 (Tex. 1997) (“To recover attorney’s fees under Section 38.001, a party

must (1) prevail on a cause of action for which attorney’s fees are recoverable,

Compass’s third ground for summary judgment is limited to the question
presented to the trial court: the justiciability of the controversy, i.e., whether
Durant asserted an “actual, real controversy,” as opposed to a “future or
speculative right.” Lane v. Baxter Healthcare Corp., 905 S.W.2d 39, 41 (Tex.
App.—Houston [1st Dist.] 1995, no writ); see also Laborers’ Int’l Union of N. Am.
v. Blackwell, 482 S.W.2d 327, 329 (Tex. Civ. App.—Amarillo 1972, no writ) (“A
controversy is justiciable when there are interested parties asserting adverse
claims upon a state of facts which must have accrued wherein a legal decision is
sought or demanded.” (internal quotation omitted)).
      30
        In its final judgment, the trial court awarded “attorneys’ fees under
Chapter 38 of the Texas Civil Practice & Remedies Code for breach of contract,”
and, in the alternative found that “it would be equitable and just for Durant to
recover . . . reasonable and necessary attorneys’ fees associated with
prosecuting his declaratory judgment claims.”

                                            33
and (2) recover damages.”). Therefore, we sustain this part of Compass’s fourth

issue.

         However, with regard to Durant’s declaratory judgment action, an award of

attorney's fees is within the trial court's discretion and is not limited to the

prevailing party. See Tex. Civ. Prac. & Rem. Code Ann. § 37.009; Barshop v.

Medina Cty. Underground Water Conservation Dist., 925 S.W.2d 618, 637 (Tex.

1996). Therefore, we remand the issue of attorney’s fees under Chapter 37 to

the trial court so that it may have an opportunity to reconsider the award of

attorney’s fees at the appropriate time. See Edwards Aquifer Auth. v. Chem.

Lime, Ltd., 291 S.W.3d 392, 405 (Tex. 2009) (stating the trial court should have

the opportunity to reconsider its award of attorney’s fees when claimant is no

longer the prevailing party).

                                  VII. Conclusion

         Having held that the trial court erred by granting summary judgment in

favor of Durant and awarding attorney’s fees to Durant as the prevailing party

under his breach of contract action, but that the trial court did not err by denying

Compass’s cross-motion for summary judgment, we reverse the trial court’s

judgment and remand this case to the trial court for further proceedings

consistent with this opinion.



                                                    /s/ Bonnie Sudderth
                                                    BONNIE SUDDERTH
                                                    JUSTICE

                                         34
PANEL: MEIER, GABRIEL, and SUDDERTH, JJ.

GABRIEL, J., filed a concurring and dissenting opinion.

DELIVERED: January 5, 2017




                                       35
