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Click here for the full text of this decision FACTS:This case involves the interpretation of a term equipment-lease agreement with a purchase option provision. The lessee, Williams Distributors Inc. (Williams assigned the lease, with Frost’s consent, to L&F Distributors Inc.), attempted to exercise the purchase option and buy the equipment a little over a year into the five-year lease term, but the lessor, Frost National Bank, refused, contending that the contract only allowed the lessee to purchase the equipment when the lease term ended. The trial court and the court of appeals agreed with the lessee’s interpretation. HOLDING:The court reverses the court of appeals’ judgment, renders judgment for Frost on its declaratory judgment claim and remands the case to the trial court. The court of appeals held that the purchase option provision ( 3(A) of the Optional Provisions) is unambiguous. Specifically, the court of appeals noted that the first sentence allows L&F to buy the vehicles either on or before the expiration of the lease, the only qualifications being that L&F cannot be in default, must buy all the vehicles, and must give Frost at least 90 days’ notice of the purchase. The court of appeals then held that the second sentence, which requires payment to be made “on the last day of such Expiration,” does not create an ambiguity or call for payment only at the end of the 60-month lease term. When both sentences of the provision are properly considered in conjunction with each other and the rest of the agreement, particularly the contractual definition of the term “Expiration,” the agreement unambiguously allows L&F to purchase the vehicles only at the end of the 60-month lease term. The court of appeals ignored pertinent language in the lease schedule when it held that, should L&F choose to exercise the purchase option before the end of 60 months, the lease would simply expire and payment would be due at the time of purchase. The agreement specifically states that the lease ends on the “Expiration” or “Expiration Date,” which occurs at 60 months. A different contractual term, “Termination,” describes the agreement’s being terminated on an earlier or later date. By calling for payment “on the last day of such Expiration [of] an amount in cash equal to the then Fair Market Value,” the agreement provides that, should L&F give the requisite notice of its intent to exercise the purchase option, it will pay Frost at the end of the 60-month lease term the then-fair market value of the vehicles, which will effectively come out to 20 percent of the invoice price. To reach the court of appeals’ conclusion requires either substituting the word “Termination” for “Expiration” in the purchase option provision or amending the contractual definition of “Expiration,” neither of which is appropriate in construing an agreement. In addition, L&F’s and the court of appeals’ construction is “unreasonable, inequitable, and oppressive.” Such a construction allows the lessee to terminate the lease and purchase the vehicles for the same price (20 percent of the original invoice price) at any point during the five-year lease term with the requisite notice. At the lessee’s discretion, then, the lessor would essentially have to forgo almost the entire rental value of the equipment and sell it almost new for 20 percent of its value, the same price it would receive for selling the equipment at the end of the lease term after collecting rent on it for 60 months. Because the primary goal is to ascertain the intent of the parties when they entered into the agreement, the court finds such a construction unreasonable. Because there is only one reasonable interpretation of the lease, the court construes it as a matter of law. The court holds that the lease is unambiguous and provides that, while the lessee may give notice at any time during the lease term that it intends to exercise the purchase option, the lessee can actually purchase the vehicles only at the lease’s expiration, which occurs 60 months after the lease term begins. OPINION:Per curiam.

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