Opinion issued May 9, 2013




                                     In The

                              Court of Appeals
                                    For The

                         First District of Texas
                           ————————————
                             NO. 01-11-00882-CV
                           ———————————
              CONCIERGE NURSING CENTERS, INC. AND
             HOUSTON CONCIERGE CARE, L.P., Appellants
                                       V.
          ANTEX ROOFING, INC., NEVCO WATERPROOFING,
             INC., CONEX CONSTRUCTORS, INC., AND
           MITCHELL CHUOKE PLUMBING, INC., Appellees



                   On Appeal from the 80th District Court
                           Harris County, Texas
                     Trial Court Case No. 2008-64390



                                 OPINION

      In this contract action, property owners Concierge Nursing Centers, Inc. and

Houston Concierge Care, L.P. (collectively, “Concierge”) appeal from the trial
court’s summary judgment in favor of four construction subcontractors. In a single

issue, Concierge contends that the subcontractors were not entitled to summary

judgment on its contractual indemnity claims against them. We reverse the

judgment and remand for further proceedings.

                                    Background

      After discovering water damage and resulting mold in its newly constructed

facility, Concierge sued the construction project’s general contractor, Brae Burn

Construction Company, Ltd., and its subcontractors Antex Roofing, Inc.; Nevco

Waterproofing, Inc.; Conex Constructors, Inc.; and Mitchell Chuoke Plumbing,

Inc. In that lawsuit, Concierge ultimately settled its claims against Brae Burn and

nonsuited its claims against the subcontractors. In Concierge’s settlement

agreement with Brae Burn, Brae Burn assigned to Concierge all of Brae Burn’s

contractual rights against the subcontractors.

      Brae Burn’s subcontracts with the subcontractors contain two indemnity

provisions. The parties disagree about the meaning of the word “property” in the

first paragraph:

      6.1 Subcontractor hereby agrees with Contractor to defend,
      indemnify and hold harmless Contractor, Owner, Architect, and all
      parties claiming by, through or under Contractor, Owner, or Architect
      (hereafter referred to as the “Indemnified Parties”) from all claims,
      suits, actions and proceedings (WHETHER ARISING UNDER
      NEGLIGENCE, WARRANTY, CONTRACT, STRICT LIABILITY,
      PRODUCTS LIABILITY, COMPARATIVE NEGLIGENCE OR
      FAULT, OR OTHER THEORY OF ACTION, the foregoing being
                                          2
      collectively referred to as “Claims”) whatsoever which may be
      instituted on account of injuries to or death of persons or damage to
      property caused or alleged to have been caused in connection with the
      performance by Subcontractor of the work or any extra work or in any
      way related to the acts, conduct, or condition created by or on behalf
      of the Subcontractor with respect to the premises or project upon
      which the Work is being performed, and all losses, costs, damages and
      expenses resulting therefrom, including but not limited to attorney’s
      fees and other costs of defending against the Claims, regardless of
      whether the claim was caused in part by any of the Indemnified
      Parties. . . . SUBCONTRACTOR’S DUTY TO INDEMNIFY
      EXTENDS TO CLAIMS CAUSED BY NEGLIGENCE OR FAULT
      OR LIABILITY UNDER ANY THEORY OF ACTION OF AN
      INDEMNIFIED PARTY, BUT NOT FROM THE SOLE
      NEGLIGENCE OR SOLE FAULT OR SOLE LIABILITY OF AN
      INDEMNIFIED PARTY. SUBCONTRACTOR’S DUTY TO
      INDEMNIFY EXTENDS TO ACTIONS FOR DAMAGES ON
      ACCOUNT OF INJURY TO OR DEATH OF AN EMPLOYEE OF
      SUBCONTRACT.

(Italics added for emphasis).1 A definition for the word “property” appears

in the following paragraph:


1
      The text we have redacted—the second and third sentences in the
      paragraph—addresses the subcontractors’ other indemnity-related duties.
      While those sentences are not directly relevant here, we quote them below
      because they do provide some guidance on the structure of the contract and
      the proper interpretation of the word “property” as used in paragraph 6.1:

            Subcontractor shall assume on behalf of the Indemnified Parties
            and conduct with due diligence and in good faith the defense of
            all claims, regardless of whether the claim is meritorious or
            whether any Indemnified Party is joined therein, and shall bear
            the cost of all judgments and settlements in connection
            therewith; provided however, without relieving the
            Subcontractor of its obligation hereunder, any of the
            Indemnified Parties, at its election, may defend or participate in
            the defense of any or all of the Claims. Neither the maintenance
                                         3
      6.2 “Property” means any tangible personal property including
      equipment, tools, material, and scaffolding and ladders, in which a
      subcontractor has an ownership or possessory interest. Use by a
      subcontractor includes use by an employee of Subcontractor or by [a]
      person or organization under contract with Subcontractor. In the event
      that a subcontractor (“using subcontractor”) uses the property of
      another subcontractor (“owning subcontractor”), then the using
      subcontractor SHALL INDEMNIFY AND HOLD HARMLESS the
      owning subcontractor from any claim or cause of action arising out of
      the use of the property by the using subcontractor. THIS
      INDEMNITY SHALL INCLUDE ANY CLAIM WHICH ALLEGES
      NEGLIGENCE OR STRICT LIABILITY ON THE PART OF THE
      OWNING SUBCONTRACTOR AS TO THE DESIGN, USE, OR
      CONDITION OF THE PROPERTY. THIS INDEMNITY SHALL
      COVER CLAIMS AND CAUSES OF ACTION OF THE
      EMPLOYEES OF THE USING SUBCONTRACTOR.

(Italics added for emphasis). One of the subcontracts, Antex’s subcontract, also

includes a handwritten delineation adding the word “tangible” to paragraph 6.1, so

that it reads: “damage to [tangible] property.”

      After settling with Brae Burn, Concierge initiated against the subcontractors

a second suit, which is the basis of this appeal. Concierge sued the subcontractors

as Brae Burn’s assignee, asserting contract claims based on the subcontractors’

failure to indemnify and defend Brae Burn against Concierge’s claims in the earlier




             of the insurance referred to in Section V hereinabove nor the
             limits referred to therein shall diminish Subcontractor’s
             obligations hereunder or Subcontractor’s duties of
             indemnification to contractor elsewhere in this Subcontract.

                                          4
suit.2 Each of the subcontractors moved for summary judgment, and the trial court

granted the motions and ordered that Concierge take nothing. This appeal

followed.

                               Standard of Review

      We review summary judgments de novo. Mann Frankfort Stein & Lipp

Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009); Valence Operating

Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). We consider the summary

judgment evidence in the light most favorable to the nonmovant. Mann Frankfort

Stein, 289 S.W.3d at 848. The subcontractors were entitled to traditional summary

judgment on Concierge’s claims against them if they conclusively negated at least

one essential element of the claims or conclusively established each element of an

affirmative defense to the claims. See TEX. R. CIV. P. 166a(c); Frost Nat’l Bank v.

Fernandez, 315 S.W.3d 494, 508–09 (Tex. 2010). They were entitled to no-

evidence summary judgment on Concierge’s claims against them if, after adequate

time for discovery, the subcontractors challenged Concierge’s evidence to support

one or more elements of Concierge’s claims and Concierge failed to produce

summary judgment evidence raising a genuine issue of material fact on the



2
      The subcontracts also contained provisions requiring the subcontractors to
      name Brae Burn as an additional insured. Concierge asserted breach of
      contract claims based on this provision, but it does not appeal from the trial
      court’s judgment with respect to those claims.
                                         5
challenged elements. See TEX. R. CIV. P. 166a(i); LMB, Ltd. v. Moreno, 201

S.W.3d 686, 688 (Tex. 2006) (per curiam).

      Because the trial court’s judgment and orders do not specify the grounds on

which it granted summary judgment on Concierge’s indemnity claims, Concierge

must demonstrate that none of the proposed grounds are sufficient to support the

judgment. See Rogers v. Ricane Enters., 772 S.W.2d 76, 79 (Tex. 1989); West v.

SMG, 318 S.W.3d 430, 437 (Tex. App.—Houston [1st Dist.] 2010, no pet.).

Conversely, we will affirm the judgment if any of the theories advanced in the

summary judgment motions is meritorious. Joe v. Two Thirty Nine Joint Venture,

145 S.W.3d 150, 157 (Tex. 2004); West, 318 S.W.3d at 437.

                Assignment of Brae Burn’s Indemnity Claims

A.    The parties contentions and pertinent background

      Three of the four subcontractors contended in their summary judgment

motions that Concierge—who purportedly acquired Brae Burn’s indemnity claims

against the subcontractors by an assignment in the settlement agreement among

Concierge, Brae Burn, and an insurer, Hartford Fire Insurance Company—actually

acquired no cause of action because Brae Burn no longer had a cause of action to




                                       6
assign at the time. 3 Before the events giving rise to this litigation, Brae Burn had

two commercial general liability insurance policies; AIG issued one and St. Paul

issued the other. The AIG policy contains a provision explaining the company’s

subrogation rights: “If any Insured has rights to recover all or part of any payment

we have made under this policy, those rights are transferred to us.” The St. Paul

policy also contains a subrogation provision: “Any person protected under this

policy may be able to recover all or part of a loss from someone other than us. . . .

If we make a payment under this policy that right of recovery will belong to us.”

      Under the settlement agreement between Concierge and Brae Burn, National

Union Fire Insurance Company of Pittsburgh, PA was to pay to Concierge

$3 million on behalf of Hartford. Although the record does not reflect the precise

relationships among AIG, St. Paul, Hartford, and National Union, Concierge

admitted in a response to interrogatories that “[a] total of $3,000,000 was paid in

settlement by both insurers, AIG and St. Paul.” Thus, the parties do not dispute that


3
      Nevco, Conex, and Mitchell Chuoke argued about unassignability in their
      respective summary judgment motions; Antex did not.

      Nevco, Conex, and Mitchell Chuoke argued in the traditional part of their
      summary judgment motions that the insurance policies demonstrated the
      ineffectiveness of the purported assignment. Thus, it was their burden as
      summary judgment movants to prove that the subrogation clauses operated
      to nullify the assignment. See TEX. R. CIV. P. 166a(c). They also argued in
      the no-evidence part that Concierge had no proof of a valid assignment.
      Thus, it was Concierge’s burden as the nonmovant to produce evidence that
      it received a valid assignment. See TEX. R. CIV. P. 166a(i).
                                         7
the $3 million payment specified in the settlement agreement was made under the

AIG and St. Paul insurance policies.

      The subcontractors argue that “pursuant to Brae Burn’s insurance contracts,

once AIG and/or St. Paul paid settlement funds on behalf of Brae Burn in the

underlying lawsuit, any rights Brae Burn may have had to recover those payments

from third-parties (i.e. its subcontractors) automatically transferred to AIG and St.

Paul.” Therefore, they argue, “AIG and St. Paul, not Brae Burn, owned the

contractual claims against Brae Burn’s subcontractors at the time Brae Burn

attempted to assign them to” Concierge. Consequently, “Brae Burn’s alleged

assignment to [Concierge] of Brae Burn’s contractual claims against its

subcontractors was ineffective.”

      Concierge advances three grounds to support the validity of Brae Burn’s

assignment.4 First, it contends that either a subrogee or a subrogor may maintain


4
      Besides the three grounds we identify, Concierge also relies on evidence that
      the insurers assigned to it all causes of action that the insurers had acquired
      from Brae Burn via subrogation. The evidence, a one-page document
      entitled “INSURER’S ACKNOWLEDGMENT AND WAIVER OF
      SUBROGATION RIGHTS” and signed only by National Union, was
      attached to Concierge’s motion to reconsider the order granting partial
      summary judgment. The subcontractors argue that this evidence “was never
      made part of the summary judgment record and cannot be considered on
      appeal.” We do not reach the issue of whether we may consider this
      document, as the issue is unnecessary to the disposition of this appeal. See
      TEX. R. APP. P. 47.1. For the purposes of this appeal only, we will assume,
      without deciding, that this evidence was not part of the summary judgment
      record.
                                         8
the cause of action that is subject to the subrogation. By this argument, Concierge

apparently contends that Brae Burn as the subrogee legally has the right to assign

its causes of action to Concierge despite the language in the subrogation clauses.

Second, Concierge contends that the contractual rights and remedies between the

insurers (as subrogees) and their insured (as subrogor) are private in nature, and the

subcontractors as third parties “are not entitled to the benefit of any arrangements

made between Brae Burn and its subrogated insurer(s).” Third, Concierge contends

that when “the insurers” executed the settlement agreement, they assented to Brae

Burn’s assignment of its claims to Concierge.

      We agree that the subrogation respecting Brae Burn’s contract claims does

not prevent assignment of those claims to Concierge. When AIG and St. Paul (as

subrogees) acquired their respective rights to recover payments made under the

insurance policies, Brae Burn (as subrogor) retained the original claim. In other

words, the subrogation provisions in this case do not contemplate a complete

transfer of Brae Burn’s claims to the insurers. Rather, each policy contemplates the

transfer of rights to recover from a liable third-party up to the amount the insurer

paid under the policy. Thus, Brae Burn retains the original contract claims

burdened by the insurers’ subrogation rights; the subcontractors have not brought

to our attention a valid prohibition against the assignment of these claims.




                                          9
B.    Language and structure of the insurance policies

      The insurance policies at issue contain written subrogation provisions.

Therefore, as between Brae Burn and its insurers, the subrogation rights arising

from the policies are governed by these provisions. See Fortis Benefits v. Cantu,

234 S.W.3d 642, 650–51 (Tex. 2007). We interpret insurance policies according to

the rules of contract construction. Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d

154, 157 (Tex. 2003). Thus, they are construed from a utilitarian standpoint,

bearing in mind the particular business activity sought to be served. See Frost Nat’l

Bank v. L & F Distribs., Ltd., 165 S.W.3d 310, 312 (Tex. 2005) (per curiam)

(citing Reilly v. Rangers Mgmt., Inc., 727 S.W.2d 527, 530 (Tex. 1987)).

      The language and structure of the policies indicate that AIG and St. Paul

acquired rights to recover payments made under the insurance policies as opposed

to Brae Burn’s entire claims. In section O of the AIG policy, subsection 1 states

that “[i]f any Insured has rights to recover all or part of any payment we have made

under this policy, those rights are transferred to us.” The term “those rights”

apparently references the preceding term “rights to recover all or part of any

payment we have made.” Thus, this provision contemplates the transfer of the right

to recover up to the amount AIG paid under the policy, not the transfer of an entire

claim. Subsection 2, concerning the order in which recoveries are to be applied,

confirms this interpretation:


                                         10
       Any recoveries shall be applied as follows:

       a. any person or organization, including the Insured, that has paid an
          amount in excess of the applicable Limits of Insurance of this
          policy will be reimbursed first;

       b. we then will be reimbursed up to the amount we have paid; and

       c. lastly, any person or organization, including the Insured that has
          paid an amount over which this policy is excess is entitled to claim
          the remainder.

This provision contemplates that if AIG obtains a recovery, other parties—

including the insured—may have rights to part or all of the recovery proceeds. If

subclause a applies, AIG’s right to recover proceeds under subclause b is

subordinate to the rights of the parties identified in subclause a. The AIG

subrogation provision thus provides that AIG has certain rights to recover

payments made under the policy, but it does not transfer all of Brae Burn’s rights

in its claims.

       The St. Paul subrogation provision likewise does not contemplate a complete

transfer of Brae Burn’s claims. It states in pertinent part:

       Any person protected under this policy may be able to recover all or
       part of a loss from someone other than us. Because of this, each
       protected person must do all that’s possible after a loss to preserve any
       right of recovery available. If we make a payment under this policy
       that right of recovery will belong to us. If we recover more than we’ve
       paid, the excess will belong to the person who had the loss.

The term “that right of recovery” apparently references the right “to recover all or

part of a loss from someone other than us.” Read in isolation, the sentence—“If we

                                           11
make a payment under this policy that right of recovery will belong to us”—could

be understood to mean that the entire claim is transferred. The following sentence

belies this interpretation, however, because it provides that if St. Paul recovers

more than it paid under the policy, it must pay the excess to the person who had the

loss. Thus, like the AIG policy, the St. Paul policy contemplates a transfer of a

right of recovery up to the amount the insurer paid under the policy rather than a

complete transfer of a claim.

C.    Business activity served by the insurance policies

      The “particular business activity sought to be served” by the policies, Frost

Nat’l Bank, 165 S.W.3d at 312, bolsters our interpretation of the subrogation

provisions. “The principal purpose of an insurance contract is to protect the insured

from loss, thereby placing the risk of loss on the insurer.” Esparza v. Scott and

White Health Plan, 909 S.W.2d 548, 551 (Tex. App.—Austin 1995, writ denied)

(citing Ortiz v. Great S. Fire and Cas. Ins. Co., 597 S.W.2d 342, 344 (Tex. 1980)).

In an insurance arrangement, the insurer assumes the risk that a loss may occur in

exchange for a premium payment. In re Tex. Ass’n of Sch. Bds., Inc., 169 S.W.3d

653, 658–59 (Tex. 2005) (orig. proceeding) (citing MURRAY           ON   CONTRACTS

§ 105(C), at 663 (4th ed. 2001)). In this way, insurance companies are in the

business of spreading losses across the premiums they receive. See id.




                                         12
      Insurers may have either “contractual” subrogation rights, which arise from

contract language, or “equitable” subrogation rights, which exist in equity to

prevent the insured from receiving a double recovery to the insurer’s detriment.

See Fortis Benefits, 234 S.W.3d at 645, 647. Either way, “the principle of

subrogation provides that once an insured is made whole from his damages, the

insurer that has paid for the insured’s covered losses is entitled to the insured’s

rights and remedies against a third party for the covered losses.” Osborne v.

Jauregui, Inc., 252 S.W.3d 70, 78 (Tex. App.—Austin 2008, no pet.). Thus,

subrogation operates to reduce the insurer’s risk and boost its solvency. See Fortis

Benefits, 234 S.W.3d at 650 n.53. Subrogation is not intended to place the insurer

in a position to profit from the loss. See In re Tex. Ass’n of Sch. Bds., 169 S.W.3d

at 659 (observing that “both parties hope that the condition [triggering coverage]

will never occur”) (quoting MURRAY ON CONTRACTS § 105(C), at 663).

      “Generally, rights conferred by subrogation are entirely derivative of the

subrogor’s interests, to which the subrogee merely succeeds.” Guillot v. Hix, 838

S.W.2d 230, 232 (Tex. 1992). When an insurer pays out on its insured’s loss, it

becomes a “pro tanto owner” of the cause of action. Thoreson v. Thompson, 431

S.W.2d 341, 347 (Tex. 1968); Warwick Towers Council of Co-Owners v. Park

Warwick, L.P., 298 S.W.3d 436, 439 (Tex. App.—Houston [14th Dist.] 2009, no

pet.). This means that the insurer receives “the rights of its insured to the extent of

                                          13
payments made under the insurance contract.” Rushing v. Int’l Aviation

Underwriters, Inc., 604 S.W.2d 239, 243 (Tex. Civ. App.—Dallas 1980, writ ref’d

n.r.e.); see also 16 COUCH ON INSURANCE § 223:85 (3d ed. 1995) (“[B]ecause an

insurer’s right of subrogation is merely derivative from that of the insured, the

recovery by an insurer cannot exceed the amount to which the insured would be

entitled.”). Although the insurer, as subrogee, has a right to recover, there is still

but one cause of action, that of the insured, whose ownership rights are burdened

by the insurer’s right to recoup payment made. Guillot, 838 S.W.2d at 232

(discussing principle in context of Workers’ Compensation Act). Thus, the insurer

as subrogee does not own the entire claim as if the claim were wholly transferred

by an assignment; it has only the right to recover an amount equal to its payment

under the insurance policy. See Rushing, 604 S.W.2d at 244 (“Any money

recovered by the insurer in excess of that which the insurer has expended must be

remitted to the insured.”); 16 COUCH          ON   INSURANCE § 222:53 (contrasting

subrogation, which “is a designation of proceeds recovered from a wrongdoer,”

with assignment, which “transfers the entire cause of action to the insurer”).

      When the AIG and St. Paul subrogation provisions are considered in light of

these general insurance and subrogation principles, it is even more apparent that

the provisions are not intended to transfer entire claims, but rather they transfer

certain rights to recover payments made under the policies. Thus, the insured, Brae

                                         14
Burn, retains the original claim which is burdened by the insurers’ rights to recover

payment.

D.    After subrogation, Brae Burn’s claims are assignable

      The settlement agreement among Concierge, Brae Burn, and Hartford

contains this provision, entitled “Additional Consideration”:

      For further consideration, Brae Burn hereby agrees to assign to
      [Concierge] all contractual claims it possesses against any third
      parties. Brae Burn hereby represents and warrants that such claims
      have not previously been assigned to any third parties.

The word “assign” or “assignment” in its most general sense means the transfer of

property or some right or interest from one person to another. Twelve Oaks Tower

I, Ltd. v. Premier Allergy, Inc., 938 S.W.2d 102, 113 (Tex. App.—Houston [14th

Dist.] 1996, no writ). “It is the act by which one person transfers to another or

causes to vest in another, his right or property or an interest therein, and unless it is

qualified in some way, it is a transfer of one’s whole interest.” Id. (emphasis in

original). Thus, the “Additional Consideration” clause, which is unqualified,

operates to transfer from Brae Burn to Concierge “all contractual claims it

possesses against any third parties,” such as the subcontractors.

      The subcontractors argue that by operation of the contractual subrogation

provisions, Brae Burn did not own the contract claims it purportedly assigned to

Concierge. However, as we discussed above, after subrogation Brae Burn retains a

claim that is burdened by the insurers’ rights to recover payment. As a general rule,
                                           15
causes of action are freely assignable. State Farm Fire and Cas. Co. v. Gandy, 925

S.W.2d 696, 707 (Tex. 1996); Delaney v. Davis, 81 S.W.3d 445, 448 n.4 (Tex.

App.—Houston [14th Dist.] 2002, no pet.). While Brae Burn could not assign

greater rights than it had, the subcontractors have not brought to our attention a

valid prohibition against this assignment. See John H. Carney & Assocs. v. Tex.

Prop. & Cas. Ins. Guar. Ass’n, 354 S.W.3d 843, 849–50 (Tex. App.—Austin 2011,

pet. denied) (observing that “general rule” of assignability applies “unless

assignment is prohibited by statute or is contrary to public policy”).

      To be clear, we do not adjudicate here what subrogation rights, if any, the

insurers have against Concierge, Brae Burn, or the subcontractors. The only

question examined is whether Brae Burn’s claims were unassignable solely

because they were subject to the insurers’ purported subrogation rights. To that

extent only, we hold that the subcontractors did not meet their traditional summary

judgment burden to prove that the assignment of Brae Burn’s claims to Concierge

was ineffective. Moreover, we hold that by presenting the settlement agreement in

response to the summary judgment motions, Concierge met its burden to defeat the

no-evidence part of the motions concerning the assignment of claims.

                       The Parties’ Indemnity Agreement

      Each of the subcontractors sought traditional summary judgment on

Concierge’s indemnity claims against them on the ground that, under the

                                          16
subcontracts, they did not owe a duty to indemnify Brae Burn from Concierge’s

earlier lawsuit.

A.    The parties’ contentions

      Concierge contends that the subcontractors breached the subcontracts by not

providing a defense and indemnity in the original lawsuit. The subcontractors

assert that they did not breach the subcontracts. According to the subcontractors,

their indemnity obligations under the subcontracts extended only to claims for

“injuries or death of persons or damage to property,” with property being defined

as “tangible personal property . . . in which a subcontractor has an ownership or

possessory interest.” Because the property damage at issue relates to damage to

real property—not “tangible personal property”—in which the subcontractors have

no ownership interest, the subcontractors contend that the claims fall outside the

scope of the subcontracts’ indemnity provisions and therefore there was no breach

of contract.

      Concierge responds that the subcontractors rely on a definition of “property”

found in paragraph 6.2 of the subcontract, but that definition is limited to that

paragraph and does not apply to the term “property” as used in paragraph 6.1, the

paragraph on which Concierge relies for the subcontractors’ alleged indemnity

obligations. According to Concierge, paragraphs 6.1 and 6.2 “create two separate

indemnity obligations with two separate purposes” and “the definition of

                                        17
‘property’ found in paragraph 6.2 has no reasonable application to the indemnity

obligation in paragraph 6.1.” Concierge asserts that applying the definition of

“property” provided in paragraph 6.2 to the use of the term “property” in paragraph

6.1 “would lead to absurd results.”

B.    The contractual definition of “property” in paragraph 6.1

      Both parties contend that paragraph 6.1’s indemnity provision is

unambiguous, but they interpret the provision differently. We determine, as a

matter of law, whether a contract is ambiguous. See Dynegy Midstream Servs., Ltd.

P’ship v. Apache Corp., 294 S.W.3d 164, 168 (Tex. 2009). If we can give the

contract’s language a certain and definite meaning, the contract is not ambiguous,

and we construe the contract as a matter of law. Milner v. Milner, 361 S.W.3d 615,

619 (Tex. 2012); Dynegy Midstream Servs., 294 S.W.3d at 168. Our primary

concern in construing a contract is to ascertain the intent of the parties as expressed

in the instrument. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662 (Tex.

2005). We give the contract’s terms their “plain and ordinary meaning” unless the

contract indicates that the parties intended a different meaning. Dynegy Midstream

Servs., 294 S.W.3d at 168; Valence Operating, 164 S.W.3d at 662. We construe a

contract “according to what it says, not what [the contracting parties] thought it

said.” See Fiess v. State Farm Lloyds, 202 S.W.3d 744, 745 (Tex. 2006)

(construing insurance agreement); see also Anglo-Dutch Petroleum Int’l, Inc. v.

                                          18
Greenberg Peden, P.C., 352 S.W.3d 445, 451 (Tex. 2011) (“Extrinsic evidence

cannot be used to show that the parties probably meant, or could have meant,

something other than what their agreement stated.”); Union Pac. R.R. Co. v. Novus

Int’l, Inc., 113 S.W.3d 418, 421 (Tex. App.—Houston [1st Dist.] 2003, pet.

denied) (“We glean intent from what the parties said in their contract, not what

they allegedly meant.”). We look at the entire contract, rather than any single

provision, in determining whether a particular term is ambiguous. Henry v. Mason,

333 S.W.3d 825, 844 (Tex. App.—Houston [1st Dist.] 2010, no pet.). A contract

term is not ambiguous merely because the parties disagree as to its meaning. Sun

Oil Co. v. Madeley, 626 S.W.2d 726, 727 (Tex. 1981); Houston Lighting & Power

Co. v. City of Wharton, 101 S.W.3d 633, 641 (Tex. App.—Houston [1st Dist.]

2003, pet. denied); see also GTE Mobilnet of S. Tex. Ltd. P’ship v. Telecell

Cellular, Inc., 955 S.W.2d 286, 289 (Tex. App.—Houston [1st Dist.] 1997, writ

denied) (“[T]he parties’ interpretations of the contract are irrelevant if the meaning

of the contract is plain from its face.”). An agreement is ambiguous only if the two

conflicting interpretations are both reasonable. Columbia Gas Transmission Corp.

v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996).

      Applying these principles, we hold that the word “property” as used in

paragraph 6.1 has its ordinary meaning rather than the particular meaning used in

paragraph 6.2. We reach this conclusion because the language, structure, and

                                         19
apparent intent of the subcontracts unambiguously impose an indemnity obligation

on the subcontractors for all property damage that occurs on the project or to the

finished structure as a result of the subcontractors’ performance. Paragraphs 6.1

and 6.2 of the subcontracts constitute all of section 6, and no other provision in the

subcontract concerns indemnity obligations. While the definition of “property” in

paragraph 6.2 does not expressly limit the definition to that paragraph, the structure

of the contract does.

      Unless otherwise limited, the indemnity obligation in section 6.1 plainly

covers the alleged water damage to the Concierge. The word “property” ordinarily

means “[t]hat which one owns; a thing or things belonging to or owned by some

person or persons; a possession (usually material), or possessions collectively[.]”

12 OXFORD ENGLISH DICTIONARY 639 (2d ed. 1991). Structurally speaking, the

narrow definition of “property” advocated by the subcontractors—that “property”

only encompasses tangible property owned by other subcontractors—must be

exported from paragraph 6.2 as it is not found in paragraph 6.1. The subcontract in

its other uses of capitalizations to define terms always includes the definition

immediately after the first use of the word or phrase in question and the defined

term is thereafter used throughout the contract.5 Other than the term “property,”


5
      For example, the subcontracts use capitalizations to define the words
      Contractor, Contract Documents, Subcontractor, and Work.

                                         20
there is no term in the contract that is used in one provision but is expressly

defined in a latter provision. 6

       Other parts of the subcontract use the word “property” in accordance with its

ordinary meaning. The word “property” is first used in paragraph 3.2, which

discusses liens filed “against the real property.” In this paragraph, the ordinary

definition of “property” is expressly modified through the insertion of the adjective

“real.” In contrast, the absence of the adjective “tangible” in paragarph 6.1

suggests that the ordinary definition is not modified. The word “property” next

appears in section 5 of the subcontract, which addresses the parties’ obligations

regarding “property insurance” and sets forth the amounts of “Property Damage”

to be covered by a comprehensive general liability policy and “Property Damage”

to be covered by a comprehensive automobile liability policy. There is no

contention that the word “property” in this section is limited to tangible personal

property owned by other subcontractors.

       We also note that the word “property” is not used in any paragraph after

paragraph 6.2. Thus, there is no indication that the narrow definition of 6.2 was

intended to apply outside this paragraph. And if the narrow definition cannot apply




6
       There are a few instances where the defined word is not capitalized in
       subsequent uses but the context makes it clear that the uncapitalized word
       retains the expressly defined meaning.
                                          21
to subsequent contractual provisions, it is less reasonable to apply the narrow

definition to the word’s earlier uses.

      We think it is unreasonable that in a fine-print boilerplate contract the

subcontractor would read a narrow definition of the word “property” in paragraph

6.2 and impute that narrow definition back to the word in the preceding paragraph,

particularly when the word “property” in 6.1 appears only once in a four-sentence,

519-word paragraph and it is separated from the defined word “property” in the

next paragraph by three sentences and 372 words. A reasonable party reading 6.1

in this context is in a different position than it would be if the narrow definition

had immediately followed in the next sentence or if a subsequent definition had

explicitly stated that it applies to all prior uses of the term or to all uses in the

contract. This is particularly true when the two paragraphs concern completely

different indemnity obligations—the first of which is owed to the contractor (Brae

Burn), the owner (Concierge), and the architect, while the second one is owed to

other subcontractors and not to the contractor, owner or architect.

      Moreover, the apparent general purpose of paragraph 6.1—which is to

indemnify the general contractor for defects in the subcontractors’ performance—

supports imputing the ordinary definition of “property” to that term. Section 6.2

addresses only a narrow set of circumstances—in contrast to 6.1, which is broader




                                         22
and more sweeping—so logically it also contains its own narrower definition of

“property” that is unique to those circumstances.

      If the definition of tangible personal property were exported into 6.1, the

indemnity provision would essentially read: Subcontractor agrees to indemnify

Contractor (and others) from all claims whatsoever which may be instituted on

account of injuries to or death of persons or damage to tangible personal property

in which a subcontractor has an ownership or possessory interest. The

subcontractors offer no explanation for why the parties would agree that the

subcontractors’ indemnity obligation would be broad for death claims but narrow

for property damage (i.e., be limited to damage to tools and equipment). The most

significant property damage exposure in a construction contract is for claims to the

constructed building, like the claims here. We construe contracts “from a utilitarian

standpoint bearing in mind the particular business activity sought to be served” and

“will avoid when possible and proper a construction which is unreasonable,

inequitable, and oppressive.” Frost Nat’l Bank, 165 S.W.3d at 312 (quoting Reilly,

727 S.W.2d at 530). The commercial purpose of an indemnity provision in a

construction contract supports the conclusion that the ordinary definition of

property must apply in section 6.1

      The other provisions in the contract that describe the subcontractors’

responsibilities are broad, not narrow, and reflect an intention to make the

                                         23
subcontractors responsible for all aspects of their performance. Paragraph 1.3

provides, in pertinent part:

      Subcontractor agrees to be bound to Contractor by the Contract
      documents insofar as they relate in any way to the Work undertaken
      by the Subcontractor and to assume towards contractor, in connection
      with the Work covered by this Subcontract, all of the obligations and
      responsibilities which Contractor assumed under the Contract
      documents by any party.

Paragraph 2.2 provides:

      Subcontractor shall be liable for damages sustained by Contractor,
      which are caused by delay caused by Subcontractor and Subcontractor
      shall indemnify and save harmless Contractor from any liability for
      damages, liquidated or otherwise, caused by delay caused by
      Subcontractor and for which Contractor is liable to any other party
      under the Contract Documents.

These provisions lend further support that a narrow reading is not the proper

interpretation of the subcontracts.

      The subcontractors argue that the parties’ intent to export paragraph 6.2’s

definition of “property” to paragraph 6.1 is evidenced in a delineation made by

Antex Roofing in its subcontract; Antex, presumably, added the word “tangible”

before the term “property” in paragraph 6.1. We disagree that this revision by

Antex constitutes proof of the other subcontractors’ intention for their respective

subcontracts. On the contrary, this delineation indicates that Antex concluded the

word “property” in paragraph 6.1 did not clearly utilize the narrow definition found

in paragraph 6.2 without that modification. Furthermore, we may not affirm the


                                        24
summary judgment for Antex on the basis of the delineation because Antex did not

present this argument to the trial court in its summary judgment motion.

      We hold that the trial court could not have granted the subcontractors

summary judgment on Concierge’s indemnity claims on the ground that, under the

subcontracts, they did not owe a duty to indemnify Brae Burn from Concierge’s

earlier lawsuit.

                   Evidence on Breach of the Indemnity Agreement

      Finally, the subcontractors contend that Concierge produced no evidence of

a breach of the indemnity agreement, that is, evidence that their conduct caused

water damage or mold. More specifically, they assert that the original petition in

the underlying lawsuit brought by Concierge against Brae Burn is insufficient to

create a duty to indemnify and that the evidence offered in response to their

summary judgment motions—the affidavit of Concierge’s expert, Mark Stanford—

constituted no evidence because it was conclusory. According to the

subcontractors, Stanford failed “to explain or make any causal link between [the

subcontractors’] work on the project and the alleged mold and water damage.”

They also contend that the trial court “determin[ed] that Mr. Stanford’s affidavit

was conclusory.”

      Contrary to the subcontractors’ contentions, the trial court did not rule that

Stanford’s affidavit was conclusory. None of the subcontractors filed any objection

                                        25
to Stanford’s affidavit, and the record does not reflect an order striking the

affidavit in whole or in part. Furthermore, we disagree with their assessment of the

affidavit as conclusory.

      In the summary judgment context, “affidavits shall be made on personal

knowledge, shall set forth such facts as would be admissible in evidence, and shall

show affirmatively that the affiant is competent to testify to the matters stated

therein.” TEX. R. CIV. P. 166a(f). Conclusory statements in affidavits are

“incompetent to support the rendition of summary judgment as a matter of law[.]”

Anderson v. Snider, 808 S.W.2d 54, 55 (Tex. 1991) (per curiam, op. on rehearing).

“Conclusory” means “[e]xpressing a factual inference without stating the

underlying facts on which the inference is based.” Arkoma Basin Exploration Co.,

Inc. v. FMF Assocs. 1990-A, Ltd., 249 S.W.3d 380, 389 n.32 (Tex. 2008) (quoting

BLACK’S LAW DICTIONARY 308 (8th ed. 2004)). Thus, to be competent summary

judgment evidence, affidavit statements regarding causation must be supported by

underlying facts. See LMB, Ltd. v. Moreno, 201 S.W.3d 686, 688–89 (Tex. 2006)

(per curiam); IHS Cedars Treatment Ctr. of DeSoto, Tex., Inc. v. Mason, 143

S.W.3d 794, 803 (Tex. 2004).

      According to the affidavit produced by Concierge to defeat the no-evidence

summary judgment motions, Stanford is the owner of Stanford Consulting &

Construction, which constructs and remodels buildings and provides consulting

                                        26
services. Stanford averred that he inspected the Concierge and reviewed the

construction documents, “numerous depositions” taken in this case, inspection

reports, reports by the parties’ experts, photographs, and depositions taken in the

underlying lawsuit between Concierge and Brae Burn. Stanford stated that the

construction documents required the building to be constructed in accordance with

the Uniform Building Code, which “requires that a building be constructed so that

water is not able to penetrate into the building envelope.” This obligation was

breached because water “did penetrate into the building envelope.” Moreover,

mold “occurred because of water intrusion at the facility.” The water penetration

occurred in areas where the roof was constructed (Antex Roofing) and where

landscaping was installed (Conex Constructors); the rubber membranes around the

window openings were not properly installed (Nevco Waterproofing); and

plumbing intrusions were left unsealed (Mitchell Chuoke Plumbing). “But for

these subcontractors’ failure to perform their work in accordance with [the]

Uniform Building Code and ensure that water would not penetrate into the building

envelope, there would have been no water intrusion as a result of these

subcontractors’ work.”

      We reject the subcontractors’ contention that Stanford’s affidavit was

conclusory and therefore no evidence. The affidavit explains the facts underlying

the cause of the water damage and the mold. None of the subcontractors have

                                        27
identified any details omitted from the affidavit that are essential to demonstrate

causation. Accordingly, the trial court could not have granted summary judgment

on the ground that the affidavit’s statements were conclusory and thus constituted

no evidence of the subcontractors’ breaches.

                                   Conclusion

      We hold that the trial court erred in granting summary judgment in favor of

Antex, Nevco, Conex, and Mitchell Chuoke. Accordingly, we reverse the trial

court’s judgment and remand for further proceedings.




                                               Harvey Brown
                                               Justice

Panel consists of Chief Justice Radack and Justices Higley and Brown.




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