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Click here for the full text of this decision FACTS:Appellant Clear Lake City Water Authority (“the Authority”) appeals a judgment awarding actual damages for breach of four contracts totaling $1,696,171, attorney’s fees, pre-and post-judgment interest, and costs in favor of appellees. The judgment also declared that the Authority was obligated, under its contracts with appellees, to purchase appellees’ sewer, water, and drainage facilities. Additionally, the Authority board of directors was ordered to levy, assess, and collect taxes or assessments to pay the judgment. HOLDING:The court holds that the Kirby Lake, Miter and Taylor Lake contracts unambiguously require the receipt of voter-approved bond funds as a condition precedent to payment by the Authority; the court reverses and renders judgment in favor of the Authority against Kirby Lake, Miter and Taylor Lake. The court further holds that University Development Inc.’s breach of contract claims are reversed and remanded for a new trial. The court holds that the trial court did not err in granting the Authority’s motion for directed verdict on the appellees’ takings claim. These contracts unambiguously require the Authority to reimburse appellees only with voter-approved bond funds that are legally available and allocated for that purpose. While the Authority obligated itself to purchase the completed facilities “as soon as possible,” that requirement did not arise until after the Authority received the proceeds of voter-approved bond funds. That the bond funds were to be voter-approved bond funds, as opposed to other types of bonds or funds, is also evident in the payment provision: “It is expressly acknowledged and agreed by the parties hereto, that the Authority has no existing voter authorization to issue any bonds to pay for the cost of the Facilities, and does not anticipate that funds will be available for such costs without a voter approved bond sale for such purchase.” This statement, in the context of the entire provision, and in conjunction with other sections of the contracts, unequivocally indicates that the only funds the Authority was required to use to purchase the facilities was voter-approved bond funds. This conclusion is confirmed by the explicit language that the Authority could, but was not obligated to, use other sources of payment: “The Authority shall have the right to purchase the Facilities with funds available from a source other than a bond sale for such purpose, but shall have no obligation to do so.” Additionally, there is no obligation on the Authority to ensure that a bond election occurs, or that the voters give their approval: “The Authority cannot predict when, if ever, such an election and bond sale will occur, or when, if ever, the Authority will have other funds available and allocated for the purchase of the Facilities.” The court rejects appellees’ contention that the receipt of voter-approved bond funds is not a condition precedent, because the payment provision of the contracts unambiguously provides that the Authority’s obligation to pay is expressly conditioned upon the receipt of voter-approved bond funds. The failure of the condition precedent at a given time does not result in a forfeiture, only a delay in payment. Nowhere in the contracts does it provide that the failure to obtain voter approval forfeits appellees’ right to receive payment for their facilities. According to appellees, the Authority breached its “due diligence” obligation by drawing the public’s attention to a misleading distinction between system needs and developer “subsidies,” opposing the bond propositions, and separating the propositions for developer reimbursements from the proposition for system needs, which caused the bond elections to fail. Appellees also contend these actions constituted a violation of the Authority’s ethical duties. The court disagrees. The contract with University Development Inc. appears to contemplate that University was to be paid with voter-approved bond funds. The court holds that the University contract is ambiguous, and the court rejects the Authority’s arguments that the court’s construction of the contract violates constitutional principles or impermissibly impinges on its governmental or legislative functions. However, the court finds that the trial court erred in submitting a single liability question incorporating an invalid theory of recovery (the “prevention doctrine” and the “split format” theory). OPINION:Yates, J.

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