Opinion issued July 23, 2019




                                     In The

                               Court of Appeals
                                    For The

                        First District of Texas
                          ————————————
                               NO. 01-18-00015-CV
                         ———————————
 TITLE RESOURCES GUARANTY COMPANY AS SUBROGEE OF SLS
                  PROPERTIES, Appellant
                                       V.
         THE LIGHTHOUSE CHURCH & MINISTRIES, Appellee


                  On Appeal from the 11th District Court
                          Harris County, Texas
                    Trial Court Case No. 2015-25934


                                  OPINION
      Appellant Title Resources Guaranty Company (“TRG”), as subrogee1 of

SLS Properties (“SLS”), appeals the trial court’s summary judgment in favor of

Appellee / Cross-Appellant The Lighthouse Church & Ministries (the “Church”).

In its summary judgment order, the trial court ruled that TRG take nothing by its

contract cause of action. TRG asks that we reverse and render judgment in its favor

on this claim. It contends that SLS and the Church’s contract for the sale of land

unambiguously obligated the Church to pay taxes that were imposed on the land

post-sale under Tax Code Section 11.201(a). It also asks that we either render

judgment in its favor on its claim for attorneys’ fees or, if we affirm the summary

judgment, affirm the ruling that neither party is entitled to attorneys’ fees.

      The trial court also granted summary judgment in TRG’s favor, ruling that

the Church take nothing by its counterclaims. The Church has now abandoned its

counterclaims. It also cross-appeals for a rendition of judgment in its favor on its

claim for attorneys’ fees.

      The contract gives rise to an ambiguity, even after interpreting the plain

language of the competing contract provisions and applying the interpretive canons

advanced by the parties. We therefore reverse the summary judgment in part and

remand the case for further proceedings.

1
      The Church disputed in the trial court whether SLS was properly subrogated
      to TRG for purposes of this suit. The Church has conceded that issue in its
      appellate brief, so we need not analyze it.

                                           2
                                    Background

      The Church acquired a tract of land in late 2011 and received an exemption

from ad valorem taxes on the land under Tax Code Section 11.20(a)(6). That

statute applies to certain land upon which a religious organization plans to expand

or build a place of regular religious worship. TEX. TAX CODE § 11.20(a)(6)(A)–(B).

If, however, the religious organization sells or transfers the land in a year in which

the land is receiving the exemption, “an additional tax is imposed on the land equal

to the tax that would have been imposed on the land had the land been taxed for

each of the five years preceding the year in which the sale or transfer occurs in

which the land received an exemption . . . .” Id. § 11.201(a).

      Later, the Church agreed to sell the land to SLS. The parties entered into an

Unimproved Property Contract in April 2014 to govern the sale. The Unimproved

Property Contract stemmed from a form “promulgated by the Texas Real Estate

Commission.” Paragraphs 13(A) and 13(B) of the Unimproved Property Contract

address “Prorations” and “Rollback Taxes,” respectively. Because the land

received the exemption under Section 11.20(a)(6) for tax years 2012, 2013, and

2014, the Church had not been required to pay taxes on the land for those years.

      The Church and SLS closed the sale on May 30, 2014. Also on that day,

they and the escrow agent for the sale executed an “Escrow With[h]old

Agreement” (the “EWA”). Under the EWA, the escrow agent held an amount of


                                          3
money deposited by the Church “for possible Tax Rollbacks until” the agent

“receive[d] proof of . . . no additional taxes due from [the] Harris County Tax

Assessor.” If there were “additional amounts due beyond the amount withheld,”

the EWA required that “the seller will pay the additional monies to satisfy the

amount due to the Tax assessor/collector.”

      SLS’s title insurer for the sale was TRG, under an Owner’s Policy of Title

Insurance.

      In October 2014, the Harris County Appraisal District (“HCAD”) sent a

letter to the Church and a copy of it to SLS. The letter advised that HCAD “has

canceled the exemption on the” land sold by the Church to SLS, and it identified

the exemption as the one provided by Section 11.20(a)(6). The letter went on to

cite and paraphrase most of the language of Section 11.201(a).

      Three taxing entities then demanded payment from SLS for ad valorem taxes

relating to the land for tax years 2012, 2013, and 2014. TRG, on SLS’s behalf due

to the subrogation provisions of the title-insurance policy, demanded that the

Church pay those taxes, as allegedly required by the provisions of SLS and the

Church’s contract of sale. The Church refused. TRG then paid the 2012 and 2013

taxes on SLS’s behalf—ultimately $111,813.95 after certain refunds—in part to

avoid accrual of penalties and interest and to allow SLS to protest the appraised

value of the land that the taxing authorities used to calculate the taxes they


                                        4
imposed under Section 11.201(a). For the 2014 taxes, SLS paid the amounts that

accrued after the May 30, 2014 closing, and the funds that the Church deposited in

escrow under the EWA paid off the amounts that had accrued for January through

May 2014.

      After SLS’s appraisal protest was denied, SLS petitioned for judicial review

of the protest in court. The protest suit was ultimately settled.

      TRG, as subrogee of SLS, filed this suit against the Church. TRG pleaded

causes of action for breach of contract and quantum meruit. It sought as damages

the $111,813.95 that it had paid for 2012 and 2013 taxes, recovery of $44,776.50

for costs it allegedly incurred to mitigate its damages, and attorneys’ fees. The

Church answered and counterclaimed, but the Church represents on appeal that it

has “clearly abandoned its counterclaims.” However, it has not abandoned its

claims for attorneys’ fees under the Unimproved Property Contract’s “prevailing

party” provision.

      TRG and the Church’s dispute arises largely out of their competing

interpretations of the documents that constitute SLS and the Church’s contract of

sale. In short, the Church contends that Paragraph 13(B) of the Unimproved

Property Contract unambiguously required SLS to pay the 2012 and 2013 taxes

imposed by the taxing authorities under Section 11.201(a). TRG contends that the

EWA unambiguously required the Church to pay those taxes.


                                           5
      The parties cross-moved for summary judgment on their competing theories.

On TRG’s causes of action for breach of contract and quantum meruit, the trial

court granted summary judgment in the Church’s favor that TRG take nothing. On

the Church’s counterclaims, the trial court granted summary judgment in TRG’s

favor that the Church take nothing. The trial court also ruled that neither party was

entitled to attorneys’ fees.

      The trial court’s judgment, in effect, returned the parties to the status quo

ante—TRG had paid the 2012 and 2013 taxes imposed under Section 11.201(a),

and both parties took nothing by this suit. TRG appealed, and the Church

cross-appealed.

Contractual Obligation for Taxes Imposed Under Tax Code Section 11.201(a)

      In its first issue, TRG contends that the contract unambiguously obligated

the Church to pay the taxes imposed under Section 11.201(a). The Church’s first

issue is the mirror image of TRG’s—that the contract unambiguously obligated

TRG to pay those taxes.

I.    Standard of Review

      We review orders granting or denying summary judgment, either traditional

or no-evidence, de novo. See Laverie v. Wetherbe, 517 S.W.3d 748, 752 (Tex.

2017); Contractors Source, Inc. v. Amegy Bank Nat’l Ass’n, 462 S.W.3d 128, 132

(Tex. App.—Houston [1st Dist.] 2015, no pet.); Reiland v. Patrick Thomas Props.,


                                         6
Inc., 213 S.W.3d 431, 435 (Tex. App.—Houston [1st Dist.] 2006, pet. denied).

Traditional summary judgment is proper when a movant establishes that there is no

genuine issue of material fact and that he or she is entitled to judgment as a matter

of law. TEX. R. CIV. P. 166a(c); Reiland, 213 S.W.3d at 435. No-evidence

summary judgment is proper for a defendant on a plaintiff’s cause of action when,

after an adequate time for discovery, the defendant–movant shows that “there is no

evidence of one or more essential elements of a claim or defense on which [the

plaintiff] would have the burden of proof at trial.” TEX. R. CIV. P. 166a(i). Once the

movant makes this showing, the burden then shifts to the nonmovant to present

evidence raising a genuine issue of material fact as to each of the elements

specified in the defendant’s motion. Johnson v. Phillips, 526 S.W.3d 529, 534

(Tex. App.—Houston [1st Dist.] 2017, pet. denied).

      In reviewing a grant of summary judgment, we consider as true all evidence

that favors the nonmovant, and we indulge every reasonable inference, and resolve

all reasonable doubts, in the nonmovant’s favor. Reiland, 213 S.W.3d at 435. We

must consider whether reasonable and fair-minded jurors could differ in their

conclusions in light of all of the evidence presented. See Goodyear Tire & Rubber

Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007). A genuine issue of material fact

exists when there is more than a scintilla of probative evidence on a particular

issue. See Buck v. Palmer, 381 S.W.3d 525, 527 & n.2 (Tex. 2012) (per curiam).


                                          7
“Evidence that is so weak as to do no more than create a mere surmise or suspicion

that the fact exists is less than a scintilla.” Regal Fin. Co. v. Tex Star Motors, Inc.,

355 S.W.3d 595, 603 (Tex. 2010) (internal quotations omitted). A summary

judgment should not be granted unless the movant conclusively shows that there is

no dispute about, among other things, “the inferences that may properly be drawn

from the evidence.” Jones v. Mem’l Hosp. Sys., 746 S.W.2d 891, 896 (Tex. App.—

Houston [1st Dist.] 1988, no writ).

      Both TRG and the Church moved for summary judgment: (a) TRG, on only

traditional grounds, both on its causes of action and on the Church’s counterclaims

and (b) the Church on both traditional and no-evidence grounds on TRG’s causes

of action and on only traditional grounds on its counterclaims. See TEX. R. CIV.

P. 166a(a)–(c), (i).

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

one motion and denies the other, the unsuccessful party may appeal both the

successful party’s motion and the denial of his or her own motion. Holmes v.

Morales, 924 S.W.2d 920, 922 (Tex. 1996); Reiland, 213 S.W.3d at 436. In such

an appeal, we must review both sides’ summary judgment evidence, determine all

questions presented, and render the judgment that the trial court should have

rendered. Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd’s London, 327

S.W.3d 118, 124 (Tex. 2010); Reiland, 213 S.W.3d at 436. We may affirm the


                                           8
summary judgment or reverse and render judgment on the unsuccessful party’s

motion. Holmes, 924 S.W.2d at 922. “When, as here, a summary judgment order

does not specify the grounds on which it was granted, we will affirm the judgment

if any one of the theories advanced before the trial court is meritorious.” Bowers v.

Taylor, 263 S.W.3d 260, 263 (Tex. App.—Houston [1st Dist.] 2007, no pet.).

      Both TRG and the Church are in the position of being both successful and

unsuccessful on their respective cross-motions. The trial court granted the

Church’s motion as to TRG’s causes of action, ruling that TRG take nothing by

them, but it denied the rest of the Church’s motion. It also ruled that TRG was

entitled to summary judgment on the Church’s counterclaims, but it otherwise

denied TRG’s motion.

II.   Applicable Tax Code Provisions

      The parties’ competing contract interpretations play out against the backdrop

of Tax Code Sections 11.20 and 11.201. A qualified religious organization “is

entitled to an exemption from taxation of:”

      the land that the religious organization owns for the purpose of
      expansion of the religious organization’s place of regular religious
      worship or construction of a new place of regular religious worship if:

                    (A) the religious organization qualifies other property,
             including a portion of the same tract or parcel of land, owned
             by the organization for an exemption under Subdivision (1) or
             (5); and



                                         9
                   (B) the land produces no revenue for the religious
             organization.
TEX. TAX CODE § 11.20(a)(6); see also TEX. CONST. art. VIII, § 2 (authorizing such

an exemption). This exemption expires after either one of two periods, depending

on whether the land is contiguous with the religious organization’s present place of

regular religious worship:

      A tract of land that is contiguous to the tract of land on which the
      religious organization’s place of regular religious worship is located
      may not be exempted under Subsection (a)(6) for more than six years.
      A tract of land that is not contiguous to the tract of land on which the
      religious organization’s place of regular religious worship is located
      may not be exempted under Subsection (a)(6) for more than three
      years.

TEX. TAX CODE § 11.20(j). TRG and the Church agree that the land at issue was

not contiguous to the Church’s then-existing place of regular religious worship.

The three-year period therefore controls.

      Selling the land during the three-year period results in an additional tax:

      If land is sold or otherwise transferred to another person in a year in
      which the land receives an exemption under Section 11.20(a)(6), an
      additional tax is imposed on the land equal to the tax that would have
      been imposed on the land had the land been taxed for each of the five
      years preceding the year in which the sale or transfer occurs in which
      the land received an exemption under that subsection, plus interest at
      an annual rate of seven percent calculated from the dates on which the
      taxes would have become due.
Id. § 11.201(a). No appellate court has interpreted Section 11.201(a).

      Our primary objective in interpreting statutes is to give effect to the

Legislature’s intent. Molinet v. Kimbrell, 356 S.W.3d 407, 411 (Tex. 2011). The
                                            10
plain meaning of the statute’s text is the best expression of legislative intent unless

a different meaning is apparent from the context or the plain meaning leads to

absurd or nonsensical results. Id.

III.   The Contract

       A key issue is the parties’ competing interpretations of who the contract

obligates to pay the taxes imposed under Section 11.201(a). Contract language that

can be given a certain or definite meaning is unambiguous, and, in that situation,

we interpret the contractual language as a matter of law. DeWitt Cty. Elec. Coop.,

Inc. v. Parks, 1 S.W.3d 96, 100 (Tex. 1999); Castillo Info. Tech. Servs., LLC v.

Dyonyx, L.P., 554 S.W.3d 41, 45 (Tex. App.—Houston [1st Dist.] 2017, no pet.).

Contract language is not ambiguous simply because it is unclear or because the

parties “assert forceful and diametrically opposing interpretations.” See In re D.

Wilson Constr. Co., 196 S.W.3d 774, 781 (Tex. 2006) (orig. proceeding); DeWitt

Cty. Elec. Coop., 1 S.W.3d at 100. An ambiguity arises only after the application

of established rules of interpretation leaves the language susceptible to more than

one reasonable meaning. DeWitt Cty. Elec. Coop., 1 S.W.3d at 100. If the contract

remains ambiguous, a summary judgment is improper because the interpretation of

the contract is then a question of fact for the factfinder. Reilly v. Rangers Mgmt.,

Inc., 727 S.W.2d 527, 529 (Tex. 1987) (citing Coker v. Coker, 650 S.W.2d 391,

394 (Tex. 1983)).


                                          11
      Our primary concern when interpreting contract language is to ascertain the

true intent of the parties as expressed in the contract language. Castillo Info. Tech.

Servs., 554 S.W.3d at 45. We interpret contract language according to its plain

grammatical reading unless to do so would defeat the parties’ intent. DeWitt Cty.

Elec. Coop., 1 S.W.3d at 101. We avoid unreasonable interpretations when

possible and proper to do so. Castillo Info. Tech. Servs., 554 S.W.3d at 45. We

consider the entire contract, harmonizing and giving effect to all of the contract’s

provisions so that none will be rendered meaningless. Id. at 45–46; IP Petrol. Co.

v. Wevanco Energy, L.L.C., 116 S.W.3d 888, 899 (Tex. App.—Houston [1st Dist.]

2003, pet. denied). No single provision taken alone is given controlling effect; each

must be considered in the context of the contract as a whole. Castillo Info. Tech.

Servs., 554 S.W.3d at 46. We must not “make new contracts between the parties

and must enforce the contract as written.” In re Davenport, 522 S.W.3d 452, 457

(Tex. 2017) (orig. proceeding).

      Only if interpretation of the plain meaning of the contract’s provisions

results in an ambiguity do we then turn to interpretive canons to resolve the

dispute. See G.T. Leach Builders, LLC v. Sapphire V.P., LP, 458 S.W.3d 502, 531–

32 (Tex. 2015). And only if there is an ambiguity do we turn to extra-contractual

expressions of intent, like the parties’ conduct. See J.M. Davidson, Inc. v. Webster,

128 S.W.3d 223, 229 (Tex. 2003); Consol. Eng’g Co. v. S. Steel Co., 699 S.W.2d


                                         12
188, 192–93 (Tex. 1985); Connelly v. Paul, 731 S.W.2d 657, 660–61 (Tex. App.—

Houston [1st Dist.] 1987, writ ref’d n.r.e.).

      TRG and the Church entered into the Unimproved Property Contract to

govern the sale, and they later entered into other agreements just before, and at,

closing. Those other agreements include the EWA. Both TRG and the Church ask

us to read the Unimproved Property Contract and the EWA as part of one unified

contract. Well-established law provides that instruments pertaining to the same

transaction may be read together to ascertain the parties’ intent, even if the parties

executed the instruments at different times and the instruments do not expressly

refer to each other. Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22 S.W.3d

831, 840 & nn.14–17 (Tex. 2000); Castillo Info. Tech. Servs., 554 S.W.3d at 46.

      The Supreme Court of Texas has cast this approach in mandatory terms: “It

is the settled rule in this State, as well as the rule generally, that written contracts

executed in different instruments whereby a single transaction or purpose is

consummated are to be taken and construed together as one contract.” Veal v.

Thomason, 159 S.W.2d 472, 475 (Tex. 1942). The Court has also said that,

“[u]nder generally accepted principles of contract interpretation, all writings that

pertain to the same transaction will be considered together, even if they were

executed at different times and do not expressly refer to one another.” DeWitt Cty.

Elec. Coop., 1 S.W.3d at 102 & n.15.


                                          13
      In the same vein, our Court has held that we “must construe . . . together”

instruments that “were executed near the same time, . . . involve[d] the same

purpose, and . . . clearly pertain[ed] to the same transaction.” Castillo Info. Tech.

Servs., 554 S.W.3d at 49. And, elsewhere, when a 1919 oil-and-gas lease and a

1927 deed “involve[d] the same parties and relate[d] to the same transaction, we

construe[d] them together.” Bowers, 263 S.W.3d at 266.

      These principles apply here, so we will read the Unimproved Property

Contract and the EWA as part of one unified contract, as both parties ask us to do.2

Both parties cite IP Petroleum for this proposition. That case provides further

guidance for what to do with two agreements that would otherwise be read together

as part of one unified contract but that “cannot subsist together”: “Only when the

terms of one contract are so inconsistent with those of the other that the two cannot

subsist together is there a presumption that the second super[s]eded the first.” IP

Petrol., 116 S.W.3d at 899 (citing Willeke v. Bailey, 189 S.W.2d 477, 479 (Tex.

1945)).3 When that case presented our Court with “two agreements contain[ing]


2
      Because we must read the Unimproved Property Contract and the EWA
      together as part of one unified contract, we may not reach TRG’s alternative
      argument that the EWA is a contract separate from the Unimproved Property
      Contract and that the EWA therefore modified the Unimproved Property
      Contract.
3
      In the relevant passage from Willeke, the Court stated:
             With a jury finding that both contracts were made, it is quite
             evident that the terms of the one agreement are so inconsistent
                                         14
mutually inconsistent terms,” we held that the latter agreement superseded the

prior one. Id. However, our Supreme Court has also instructed, and we have

recently recognized the instruction, that “[i]n harmonizing [contract] provisions,

terms stated earlier in an agreement must be favored over subsequent terms.” See

Coker, 650 S.W.2d at 393; accord Gallis v. Papadogiannis, No. 01-15-00794-CV,

2017 WL 711737, at *16 (Tex. App.—Houston [1st Dist.] Feb. 23, 2017, no pet.)

(mem. op.); Kilgore Expl., Inc. v. Apache Corp., No. 01-13-00347-CV, 2015 WL

505275, at *7 (Tex. App.—Houston [1st Dist.] Feb. 5, 2015, no pet.) (mem. op.).

IV.   The contract contains an ambiguity, even after interpreting the plain
      language of the competing provisions and applying the interpretive
      canons advanced by the parties.

      A.    Paragraph 13(B)

      We begin with the language in the Unimproved Property Contract

referenced by both parties—Paragraph 13(B):




            with those of the other that the two cannot subsist together. In
            that situation the rule is that the one made first is conclusively
            presumed to have been superseded by the other.
      189 S.W.2d at 479 (citing 17 C.J.S. Contracts § 395; 32 AM. JUR. Landlord
      and Tenant § 147).

                                        15
      ROLLBACK TAXES: If this sale or Buyer’s use of the Property after
      closing results in the assessment of additional taxes, penalties or
      interest (Assessments) for periods prior to closing, the Assessments
      will be the obligation of Buyer. If Seller’s change in use of the
      Property prior to closing or denial of a special use valuation on the
      Property claimed by Seller results in Assessments for periods prior to
      closing, the Assessments will be the obligation of Seller. Obligations
      imposed by this paragraph will survive closing.

The Church argues that this paragraph unambiguously required TRG to pay the

taxes imposed under Section 11.201(a). According to the Church, the taxes

imposed under Section 11.201(a) were “for periods prior to closing” and were

triggered by “this sale.”

      The plain language of Section 11.201(a) strongly supports the Church’s

position. Section 11.201(a) provides that its “additional tax” is imposed when

“land is sold or otherwise transferred to another person in a year in which the land

receives an exemption under Section 11.20(a)(6).”4

      TRG offers several reasons for why Paragraph 13(B) alone does not control

the parties’ dispute, but, for the moment, we analyze the competing arguments over

only Paragraph 13(B). As to this paragraph’s language alone, TRG argues that a

“denial of a special use valuation,” and not the sale of the land, triggered the taxes’

imposition. This would mean that Paragraph 13(B)’s second sentence, rather than

its first, should control. TRG also argues that the Church “changed its use” of the


4
      Neither party contends that the taxing authorities misapplied
      Section 11.201(a) when they imposed the taxes under that statute.

                                          16
land “when it decided to sell” the land to TRG, which would also trigger

application of Paragraph 13(B)’s second sentence.

      “Special use valuation” is not defined in either the Tax Code or any of the

contract documents. We must therefore interpret the term according to its plain

grammatical meaning. See TEX. GOV’T CODE § 312.002(a)–(b) (unless a statute’s

use of a “word is connected with and used with reference to a particular trade or

subject matter or is used as a word of art,” the word is given its “ordinary

meaning”); Reeder v. Wood Cty. Energy, LLC, 395 S.W.3d 789, 794–95 (Tex.

2012) (“[C]ontract terms are given their plain and ordinary meaning unless the

instrument indicates the parties intended a different meaning.” (internal quotation

omitted)).

      The plain grammatical meaning of “valuation” necessarily involves an

assigning of a value, often numerical, to a thing. A prominent legal dictionary

supports this reading. Its entry for “special-use valuation” is simply “See

VALUATION.”   Special-use valuation, BLACK’S LAW DICTIONARY (10th ed. 2014).

And its definition of “valuation” is

      1. The process of determining the value of a thing or entity. 2. The
      estimated worth of a thing or entity. — value, valuate, vb.

      - assessed valuation (1825) The value that a taxing authority gives to
      property and to which the tax rate is applied.




                                        17
      - special-use valuation (1976) An executor’s option of valuating real
      property in an estate, esp. farmland, based on its current use rather
      than for its highest potential value.

Valuation, BLACK’S LAW DICTIONARY (10th ed. 2014).

      The Comptroller of Public Accounts also uses “special use valuation,” in his

office’s regulation about taxpayer applications for the benefits provided by Tax

Code chapter 23: “In applying for special use valuation under Tax Code,

Chapter 23, the applicant shall use a form provided by the appraisal office.” 34

TEX. ADMIN. CODE § 9.402(a) (2018) (Tex. Comptroller of Pub. Accounts, Special

Use Application Forms). Chapter 23 of the Tax Code concerns appraisals of

taxable property’s market value and includes several special-appraisal provisions.

See generally TEX. TAX CODE §§ 23.01–.9807. When a special-appraisal provision

applies, the taxpayer enjoys a lower overall ad valorem tax burden on a particular

property when that property is committed to a particular use. The particular use

entitles the property to a below-market-value appraisal calculation.

      Notably, Sections 23.55(a) and 23.76(a) provide for “an additional tax” like

Section 11.201(a) provides, but for different triggering reasons. In both

Sections 23.55(a) and 23.76(a), a change in land use triggers the tax: “If the use of

land that has been appraised as provided by this subchapter changes, an additional

tax is imposed on the land . . . .” Id. §§ 23.55(a), 23.76(a). But in

Section 11.201(a), the land’s being “sold or otherwise transferred to another person


                                         18
in a year in which the land receives an exemption under Section 11.20(a)(6)” is

what triggers the tax.

      The differences between Section 11.201(a)’s triggering event and those in

Sections 23.55(a) and 23.76(a), and the Comptroller’s use of “special use

valuation” to refer to what Chapter 23 concerns, buttress our plain-language

reading of “special-use valuation” as necessarily involving an assigning of a value

to a thing. Under Chapter 23, lowered appraisal calculations for the particular

property lead to a lower ad valorem tax burden for the property’s owner, when

compared to what the tax burden would have been under the standard market-value

appraisal. The lowered appraisal and the market-value appraisal are competing

methods for assigning dollar values to things—they are valuations.

      But in Sections 11.20(a)(6) and 11.201(a), the mechanism that lowers the tax

burden is not an altered calculation for the assigning of a dollar value to the

property but is instead an “exemption from taxation” altogether. See TEX. TAX

CODE § 11.20(a). For over 80 years, our Supreme Court has distinguished

tax-exemption statutes from tax-valuation statutes for many purposes. See, e.g.,

Enron Corp. v. Spring Indep. Sch. Dist., 922 S.W.2d 931, 941 (Tex. 1996); Hardin

v. Cent. Am. Life Ins. Co., 374 S.W.2d 881, 883–84 (Tex. 1964); Republic Ins. Co.

v. Highland Park Indep. Sch. Dist., 102 S.W.2d 184, 193 (Tex. [Comm’n Op.]

1937). That distinction is relevant here. Section 11.20(a)(6) involves a tax


                                        19
exemption rather than a special-use valuation. Therefore, we conclude that a

“special use valuation” under Paragraph 13(B)’s second sentence is not at issue

here.

        As for TRG’s argument that the Church’s decision to sell the land, instead of

the sale itself, triggered the taxes’ imposition, TRG relies on the taxing authorities’

notice letter about the taxes. And TRG argues that the Church “changed its use of

the Property when it decided to sell the Property for profit rather than building a

new worship facility.” Therefore, TRG concludes, the Church was “responsible for

the loss of the special use valuation. The fact [that] HCAD notified [the Church] of

the rollback illustrates [the Church]’s responsibility for triggering the rollback

taxes.”

        The Church responds that (1) SLS was copied on the same letter; (2) the

letter’s quoting from Section 11.201(a) means that it was the sale itself that

triggered the taxes; (3) TRG itself pleaded in this suit that the “sale of the

Property . . . caused HCAD to revoke the exemption”; (4) in SLS’s suit against

HCAD to protest the land’s appraised value, SLS expressly pleaded that the sale of

the property triggered the taxes; and (5) SLS’s affiant in that suit averred similarly.

In the suit against HCAD, SLS said in its dispositive motion that “[i]t is undisputed

that [the Church]’s sale of the property to SLS triggered the loss of the complete

exemption . . . under . . . Section 11.20.”


                                              20
      Given all this, TRG’s desired inference from the notice letter’s being

addressed to the Church is no more than a mere surmise or suspicion about

whether the taxing authorities imposed the taxes for any reason other than what

Section 11.201(a) requires—the sale itself. TRG’s argument from the letter’s being

addressed to the Church is therefore unavailing. See Buck, 381 S.W.3d at 527 &

n.2; Regal Fin., 355 S.W.3d at 603.

      This disposes of TRG’s arguments solely from Paragraph 13(B)’s language.

Accordingly, we conclude that, if Paragraph 13(B) were the only contract

provision that purported to assign responsibility for the taxes imposed under

Section 11.201(a), then TRG would be the party responsible to pay them because

“this sale,” and no other event contemplated by Paragraph 13(B)’s second

sentence, triggered the new taxes “for periods prior to closing.” But we now must

address TRG’s reliance on another portion of the parties’ contract—the EWA.

      B.     The Escrow With[h]old Agreement (the “EWA”)

      In the EWA, the parties (and the escrow agent for the sale) agreed to the

following:




                                       21
         Texas American Title Company is holding in escrow the amount of
         $23,149.38 for possible Tax Rollbacks until Texas American Title
         Co[.] receives proof of the removal of the TLX Exemptions for the
         seller & no additional taxes due from Harris County Tax Assessor; if
         there are amounts due they will be paid immediately by the escrow
         agent to the taxing entity & any balance returned to the seller;
         likewise if there are additional amounts due beyond the amount
         withheld, the seller will pay the additional monies to satisfy the
         amount due to the Tax assessor/collector. This withhold is not to
         exceed a period of 6 months. Once confirmation is received Texas
         American Title will release funds.

Nothing else in the contract documents defines “Tax Rollbacks” (or “TLX

Exemptions”). The parties executed the EWA at closing, and only later did the

taxing authorities impose the taxes. There was therefore no outstanding tax liability

at the time of closing.

         TRG    argues    that,   under   the    EWA,   the   taxes   imposed   under

Section 11.201(a) were “amount[s] . . . for possible Tax Rollbacks . . . due beyond

the amount withheld.” Therefore, TRG concludes that the Church was responsible

to “pay the additional monies to satisfy the amount due to the Tax

assessor/collector.” TRG’s reading is correct on the face of the EWA. The EWA,

like Paragraph 13(B), is addressed to “rollback” taxes. And the plain meaning of

the EWA’s “amount[s] . . . for possible Tax Rollbacks . . . due beyond the amount

withheld” and “additional monies to satisfy the amount due” encompasses the

taxes.




                                            22
      The Church recognizes that this interpretation of the EWA conflicts with

Paragraph 13(B). Therefore, it asks us to harmonize the EWA with

Paragraph 13(B) by restricting the EWA’s reach to only taxes potentially due for

tax year 2014, the year in which the sale was agreed to and closed.

      To make this argument, the Church begins by noting that the EWA “does

not purport to amend” the Unimproved Property Contract, failing even to mention

the document. The Church then marshals other contract provisions that it believes

limit the EWA to taxes in tax year 2014. First, it notes Paragraph 13(A), which

provides:

      PRORATIONS: Taxes for the current year, interest, maintenance fees,
      assessments, dues and rents will be prorated through the Closing Date.
      The tax proration may be calculated taking into consideration any
      change in exemptions that will affect the current year’s taxes. If taxes
      for the current year vary from the amount prorated at closing, the
      parties shall adjust the prorations when tax statements for the current
      year are available. If taxes are not paid at or prior to closing, Buyer
      shall pay taxes for the current year.

Specifically, the Church highlights the provisions for prorating the “[t]axes for the

current year” through the closing date and calculating the proration subject to any

exemptions “that will affect the current year’s taxes.”

      Next, the Church notes a line item in a closing statement executed by the

parties. The line item says that $23,149.38 was being reduced from what would be

paid to the Church at closing due to “Property Taxes from 1/1/2014 thru 5/30/2014

to be held in Escrow until 2014 Tax Bill is assessed per Escrow Agreement to

                                         23
Texas American Title.” This amount is identical to the escrow amount provided for

in the EWA. The Church links Paragraph 13(A)’s procedures with this line item

and both of those, in turn, with the EWA to limit the EWA’s application to 2014

taxes only. The Church’s position, in effect, is that the EWA is limited to

effectuating Paragraph 13(A) alone. In fact, it argued in the trial court that: “The

EWA merely addresses the escrow agent’s required function of holding [the

Church]’s prorated share of the current year’s taxes and fees in escrow as set forth

in Paragraph 13A.” (Emphasis added.)

      In sum, the Church concludes that the EWA “is easily harmonized with”

Paragraph 13(B) because the EWA’s reach is limited “to property taxes assessed

for the year the sale of the Property occurred, 2014.” According to the Church’s

briefing, the EWA obligated the Church “to pay its prorated share of any rollback

taxes assessed for 2014” and, “in the event that the amount that the Church

escrowed was insufficient to pay its five-month prorated share of the 2014 rollback

taxes . . . , then the Church was obligated to pay the difference.” (Emphasis in

original.) Indeed, the Church’s obligation to pay any amount in 2014 taxes

imposed under Section 11.201(a) over the $23,149.38 escrowed is a necessary

by-product of the Church’s proposed harmonizing because the EWA, as noted

above, says that “if there are additional amounts due” for 2014, which is the

Church’s proposed gloss, then “the seller will pay the additional monies.”


                                        24
      We conclude that the Church’s proposed harmonizing fails because it does

not resolve fully the tension between Paragraph 13(B) and the EWA. It fails to do

so because it would require a distinction between the taxes imposed under

Section 11.201(a) for 2012 and 2013 on the one hand and those for 2014 on the

other that the applicable statutory and contract language will not bear. For each of

2012, 2013, and 2014, the taxing authorities imposed the taxes because the “land

[wa]s sold or otherwise transferred to another person in a year in which the land

receive[d] an exemption under Section 11.20(a)(6) . . . .” TEX. TAX CODE

§ 11.201(a). There is no difference between what triggered the 2012 and 2013

taxes under Section 11.201(a) and what triggered the 2014 taxes—the same

statutory language operated to trigger all three years’ new taxes. We say “new”

taxes because Section 11.201(a) describes its tax as “an additional tax imposed on

the land.” Id.

      Because all three years’ new taxes were triggered in the same way, and

because none of them were pending at the time of closing but were only imposed

by the taxing authorities afterwards, the 2012 taxes, the 2013 taxes, and the

pre-June 2014 taxes were all “additional taxes . . . for periods prior to closing”

resulting from “this sale.” Therefore, they are all equally encompassed by

Paragraph 13(B)’s terms.




                                        25
      Further,    taxes   imposed     under Section      11.201(a)   and subject to

Paragraph 13(B) must be mutually exclusive of taxes subject to Paragraph 13(A)

because the two paragraphs conflict in how they assign responsibility among the

parties. If a Paragraph 13(A) tax remains unpaid, the Buyer must pay the

remainder, but if a Paragraph 13(B) tax remains unpaid, either the Buyer or the

Seller will be responsible for the remainder, depending on certain predicate events.

Therefore, a tax imposed under Section 11.201(a), even if it is one for the “current

year” in which the land sale takes place, cannot be governed by both

Paragraph 13(A) and Paragraph 13(B). The result is that the EWA cannot be

harmonized       by   linking   it   with   the   current-year-tax   provisions   from

Paragraph 13(A). Both the EWA and Paragraph 13(B) govern “rollback” taxes

resulting from “this sale.” The taxes imposed under Section 11.201(a) for tax years

2012, 2013, and 2014 are all encompassed by those provisions’ terms. And any tax

imposed under Section 11.201(a) and governed by Paragraph 13(B) cannot also be

governed by Paragraph 13(A).

      Even if only the 2014 tax could be removed from Paragraph 13(B)’s ambit

and put into Paragraph 13(A)’s, the Church’s proposed harmonizing creates a new

ambiguity. Paragraph 13(A) requires the Buyer to pay any unpaid current-year

taxes, but the EWA—even if it is effectuating Paragraph 13(A)—still requires the




                                            26
Seller to pay those amounts. Because the Church’s proposed harmonizing leads to

an ambiguity of its own, it cannot resolve this dispute.

      As a result of rejecting the Church’s proposed harmonizing, we conclude

that the EWA obligates the Church to pay the taxes, while Paragraph 13(B)

obligates TRG to pay them—an intractable conflict between the plain language of

both provisions.5

      C.     Interpretive canons advanced by the parties

      Neither interpreting the contract’s plain language nor attempting to

harmonize it as the Church argues for has resolved the dispute. We must therefore

turn to the interpretive canons offered by the parties. See G.T. Leach Builders, 458

S.W.3d at 531–32.

      The contract is potentially subject to both of two conflicting rules: (i) the

rule that a later contract (here, potentially, the EWA) that “cannot subsist together”

with a prior one (the Unimproved Property Contract) is presumed to supersede the

prior one and (ii) the rule that, “[i]n harmonizing [contract] provisions, terms stated

earlier in an agreement must be favored over subsequent terms.” Compare IP


5
      The Church also relies on a separate agreement executed by the parties,
      which provides that “additional or ‘rollback’ taxes owed” shall be paid
      “according to the agreement between Seller and Purchaser.” Relying on this
      language begs the question. The “agreement” between the parties includes
      both Paragraph 13(B) and the EWA, not least because both parties ask us to
      interpret their contract as including both of those. This argument therefore
      does not advance the Church’s position.

                                          27
Petrol., 116 S.W.3d at 899 (citing Willeke, 189 S.W.2d at 479) (former rule), with

Coker, 650 S.W.2d at 393 (latter one); Gallis, 2017 WL 711737, at *16 (same);

and Kilgore Expl., 2015 WL 505275, at *7 (same). Because the parties do not

advance either of these rules, we do not apply them here.

      Next, TRG argues that the EWA is more specific to the topic of taxes

imposed under Section 11.201(a) than Paragraph 13(B) is and that the EWA should

therefore prevail. See, e.g., Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d

194, 215 (Tex. 2011) (citing Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133–

34 (Tex. 1994)). TRG asserts that the “EWA contained more specific terms

regarding liability for rollback taxes than” Paragraph 13(B) does. But TRG does

not offer any further analysis for why it contends that the EWA is more specific.

      Under a plain-language reading of both provisions, both are equally as

specific to the topic of taxes imposed under Section 11.201(a). Both provisions use

similar   names   for   the   taxes—“Rollback     Taxes”    or   “Tax   Rollbacks.”

Paragraph 13(B)’s phrase “assessment of additional taxes . . . for periods prior to

closing” is equally as encompassing of the taxes as are the EWA’s phrases

“amount[s] . . . for possible Tax Rollbacks” and “additional amounts due beyond

the amount withheld.” And both provisions are equally as excluding of other

topics: “assessment of additional taxes for periods prior to closing” under

Paragraph 13(B) is not materially more inclusive of topics beyond additional tax


                                        28
liabilities than is “additional amount[] due beyond the amount withheld . . . to

satisfy the amount due to the Tax assessor/collector” under the EWA. The

specific-versus-general canon therefore does not resolve the dispute.

      In its reply brief, TRG asks us to (i) apply the rule from Houston

Exploration Co. v. Wellington Underwriting Agencies, Ltd. that “changes in a

printed form must be accorded special weight in construing the instrument”;

(ii) construe the EWA as a change to the printed-form Unimproved Property

Contract; and (iii) accordingly hold that the EWA supersedes Paragraph 13(B). See

352 S.W.3d 462, 472 & n.50 (Tex. 2011). However, the “changes in a printed

form” that the Supreme Court interpreted in Houston Exploration were contract

paragraphs physically lined through, which reflected the contracting parties’ intent

in self-evident ways that are absent here.

      The Supreme Court was faced with interpreting a contract that was

negotiated and entered into at Lloyd’s of London, whose “age-old customs” are

“unusual in American business law.” Id. at 464 (quoting E.R. Squibb & Sons, Inc.

v. Accident & Cas. Ins. Co., 160 F.3d 925, 929 (2d Cir. 1998) (citing GODFREY

HODGSON, LLOYD’S       OF   LONDON 49–75 (1984))). The Court reviewed those

customs because “surrounding circumstances that inform, rather than vary from or

contradict, the contract text” can be inquired into when interpreting a contract as a

matter of law. See id. at 469.


                                         29
       The parties had begun from a form WELCAR 2001 Offshore Construction

Project Policy contract. They then “lin[ed] through” or “struck through” several

provisions in the form, including one concerning “Stand-By Charges” that would

have been relevant to the parties’ later insurance-coverage dispute. See id. at 465–

67. “As altered, the form became the policy to which” the parties “agreed.” Id. at

467.

       The negotiation setting, process, and strikethroughs were “crucial to

understanding” the contract’s terms:

       The parties did not create the policy text; rather, they began with a
       form policy that covered “all risks” of property damage, subject to a
       laundry list of terms that provided for reimbursement of different
       kinds of costs that might be incurred in connection with a covered
       loss. They did not edit the policy language, but they did strike through
       several provisions requiring payment of particular costs, including . . .
       weather stand-by charges. . . . The parties followed the customary
       process for negotiating an insurance policy in the London market.
Id. at 470. Therefore, though the insureds asked the Court to ignore the

strikethroughs in the form, the Court could not do so. Ignoring the strikethroughs

would “distort[] the negotiation process. The parties did not try to write a policy

from scratch. They took an existing form, deleted some payment requirements and

kept others. . . . To see the deletions as irrelevant blinks reality.” Id.

       The Houston Exploration strikethroughs therefore revealed the contracting

parties’ mutual intent in ways that TRG and the Church’s adding the EWA to the

Unimproved Property Contract does not. When the Houston Exploration parties

                                            30
physically lined through text on their form, they were self-evidently embedding

their joint intent in the text that remained unstruck. They were, for example,

expressing the intent that the text that remained unstruck should not be interpreted

as containing the content of the provisions that they lined through. See id. at 470

(rejecting insureds’ contrary argument “that by deleting requirements that specific

kinds of costs be reimbursed, the parties did not intend that the costs not be

reimbursed” (emphasis in original)).

      But when TRG and the Church added the EWA, they neither necessarily

struck through Paragraph 13(B) nor struck through any of the EWA’s terms. As the

Church points out, the EWA does not mention Paragraph 13(B) or any other

provision of the Unimproved Property Contract. More than this, we are without

evidence in the record to conclude as a matter of law that the EWA is not itself a

form. It includes fields to be filled in near the top of the page, much like other

forms have. And the participation of the escrow agent as a party to the EWA, on

his company’s letterhead, may suggest use of a form as well. Finally, neither

Paragraph 13(B) nor the EWA contain any lined-through text. Houston

Exploration therefore does not resolve this dispute.

      TRG’s last argument relies on the parties’ extracontractual conduct. It argues

that we “must consider the parties’ actions in connection with the transaction,”

including the Church’s “deposit[ing] funds in escrow to pay the” taxes. The deposit


                                         31
allegedly “evidences [the Church]’s understanding that it had the duty to pay any

and all” of the taxes.

      We are now in the realm of fact issues. We cannot affirm a grant of

summary judgment based on inferences to be drawn from this evidence. See Jones,

746 S.W.2d at 896. Reasonable and fair-minded jurors could disagree about the

inferences to be drawn from the Church’s depositing the funds into escrow. See

Goodyear Tire & Rubber, 236 S.W.3d at 755. For example, the Church’s proposed

harmonization of the EWA with Paragraph 13(B) depended upon its understanding

that the EWA applied to only taxes imposed on the land after the sale for tax

year 2014. Though we reject that matter-of-law interpretation of the contract, it

does not necessarily follow that the Church’s subjective belief in that interpretation

was never genuine. It is therefore inappropriate to infer, as a matter of law, in the

Church’s escrow actions an intent to accept responsibility for all taxes imposed

under Section 11.201(a) for all tax years. TRG’s final argument does not support

rendition of judgment in its favor.

                                      *   *      *

      The result of our analysis is that this case must be remanded for further

proceedings. The plain meanings of Paragraph 13(B) and the EWA conflict over

whether the Buyer or the Seller is responsible for the taxes for tax years 2012 and

2013 imposed under Section 11.201(a). The interpretive canons advanced by the


                                          32
parties do not resolve the conflict as a matter of law. This leaves an ambiguity in

the contract that cannot be resolved on the record before us.6 Accordingly, we

sustain TRG’s first issue only in part—we reverse the traditional and no-evidence

summary judgment granted in the Church’s favor on TRG’s breach-of-contract

cause of action, but we do not render judgment that the Church is liable for the

taxes. This disposition requires that we overrule the Church’s first issue, which

sought only that we affirm the summary judgment on TRG’s breach-of-contract

cause of action.

      TRG’s live claims at summary judgment were its fifth amended petition’s

causes of action for breach of contract and quantum meruit. TRG’s opening brief

did not offer any reason, or citations to the record or to authorities, for why the

summary judgment granted in the Church’s favor on the quantum meruit claim

should be reversed. And even after the Church pointed that out in its response

brief, TRG’s reply brief did not address quantum meruit either. We therefore must

affirm the summary judgment as to this cause of action. See TEX. R. APP.

P. 38.1(i); Potter v. Clear Channel Outdoor, Inc., No. 01-07-00578-CV, 2009 WL




6
      An ambiguity creates a fact issue as to the parties’ intent. Columbia Gas
      Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex.
      1996); Reilly, 727 S.W.2d at 529; see generally Comm. on Pattern Jury
      Charges, State Bar of Tex., Texas Pattern Jury Charges: Business
      PJC 101.37 (2018).

                                        33
1886168, at *4 n.6 (Tex. App.—Houston [1st Dist.] July 2, 2009, no pet.) (mem.

op.).

        Also, because the Church is unequivocal that it “clearly abandoned its

counterclaims,” we affirm the summary judgment in TRG’s favor on the Church’s

counterclaims.

        Our disposition also requires that we reverse the summary judgment as to

the parties’ claims for attorneys’ fees. TRG sought summary judgment for

attorneys’ fees under both the contract’s “prevailing party” provision and Civil

Practice and Remedies Code Section 38.001, and the Church sought summary

judgment for fees only under the “prevailing party” provision. See, e.g., Epps v.

Fowler, 351 S.W.3d 862, 866 (Tex. 2011); Intercontinental Grp. P’ship v. KB

Home Lone Star L.P., 295 S.W.3d 650, 655 (Tex. 2009); Green Int’l, Inc. v. Solis,

951 S.W.2d 384, 390 (Tex. 1997).

        Because of our disposition, we cannot determine which party has prevailed.

Neither party presented argument on the issue of which one has prevailed in the

event of a reversal and remand. Also, because our disposition leaves TRG without

a recovery on its contract cause of action, Civil Practice and Remedies Code

Section 38.001 cannot support a rendition of attorneys’ fees in its favor. See Green

Int’l, 951 S.W.2d at 390. Our disposition therefore moots TRG’s second issue—

whether “a trial court may correctly decline to award attorneys’ fees to either party


                                         34
in a breach of contract case”—and the Church’s second issue—“[w]hether the

Church is entitled to attorney’s fees . . . because [it] plainly prevailed on the main

issue in the case.” Both parties’ claims for attorneys’ fees should be decided anew

in the trial court on remand.

                                    Conclusion

      We affirm the summary judgment granted in the Church’s favor on TRG’s

cause of action for quantum meruit. We affirm the summary judgment granted in

TRG’s favor on the Church’s counterclaims. We reverse the remainder of the

summary judgment in all respects. We remand the case for further proceedings

consistent with this opinion.



                                              Richard Hightower
                                              Justice

Panel consists of Justices Lloyd, Kelly, and Hightower.




                                         35
