Venable's Construction, Inc v. Aspen Midstream, LLC

Opinion issued December 31, 2025

In The

Court of Appeals
For The

First District of Texas
————————————
NO. 01-24-00702-CV
———————————
VENABLE’S CONSTRUCTION, INC., Appellant/Cross-Appellee
V.
ASPEN MIDSTREAM, LLC, Appellee/Cross-Appellant

On Appeal from the 113th District Court
Harris County, Texas
Trial Court Case No. 2022-28820

OPINION

This construction contract case presents a classic disagreement about pricing.

A pipeline company (Aspen) hired a contractor (Venable’s) to build some 56 miles

of 30-inch pipeline from a site in Washington County to a site in Waller County. The
contract set the lump sum price at about $39 million. The contract plainly has some

fixed price provisions, with phrases like “Lump Sum,” “absolute cap,” and “not in

addition to the Lump Sum price.” But the contract just as plainly contains provisions

for extra work, change orders, and unit prices for such additional work.

How much was Aspen required to pay Venable’s? Venable’s took the position

that the project ended up requiring additional footages and efforts beyond what the

$39 million lump sum contemplated, so Aspen owed it another $1.77 million. Aspen

disagreed about owing the additional amount. This lawsuit followed.

On cross-motions for summary judgment, the trial court sided with Aspen.

First, the court rejected the claim for additional compensation. Second, the court

agreed with Aspen that Venable’s owes a duty to defend an Aspen affiliate in a suit

by some Waller County landowners who say the project left the topsoil in disarray

and hurt their rice farming. We agree with Aspen about the price issue, but we

disagree about the duty to defend Aspen’s own affiliate. We therefore do not reach

Aspen’s conditional cross-appeal concerning objections it made to some of the

summary judgment evidence filed by Venable’s.

We affirm in part, reverse in part, and remand the issue of attorney’s fees

under the Declaratory Judgments Act for further proceedings.

2
Background

A. Contractual Relationship Between Aspen and Venable’s

In 2018, Aspen decided to install a new pipeline approximately 56 miles in

length from Washington County to Waller County. It sought bids from contractors

and ultimately accepted the bid from Venable’s. In 2019, they signed a written

“Master Construction Agreement.”

This contract calls for Venable’s to do what it calls the “Work” in exchange

for a “Lump Sum,” but it does considerably more than that. The contract consists of

several parts, dozens of sections, and a variety of exhibits.

Part I (“General Terms, Understandings and Obligations of the Parties”) runs

3 pages in length and says that Venable’s shall perform the Work for a Lump Sum

of $39,335,430.35. Part II (“Specific Terms and Conditions”) runs 24 pages in length

and has 45 sections. Part III (“Instructions and Information to Bidder”) deals with

the bid process and items such as insurance. Part IV (“Contractor Firm Offer”) has

two subparts:

• Subpart A, entitled “Lump Sum Price,” and

• Subpart B, entitled “Special Unit Prices.”

First, the Lump Sum Price in Subpart A reiterates the $39 million figure stated earlier

in the contract. Second, the Special Unit Prices in Subpart B provide prices “For

Extra Work Only.” That is, in the event of “Extra Work,” the Special Unit Prices

3
“shall be used in the event Contractor is required to supply and install Special Unit

Items during the execution of Extra Work, pursuant to a change order authorized

under Section 11 of Part II of the Agreement.” Having briefly described the four

parts of the contract, we will examine those parts in greater detail before beginning

the legal analysis.

1. Contract: Part I

Part I of the contract calls for Venable’s to perform the agreed-upon Work

and for Aspen to pay Venable’s the agreed-upon price. Part 1, section 1 speaks in

terms of the “Work described in Exhibit ‘A’” but does not define the Work in any

further detail. Exhibit A (“Scope of Work”) appears later in the agreement.

Part I also contains a price term in section 5:

Price. As total consideration for the Work to be performed hereunder,
Company shall pay Contractor a total sum of 39,335,430.35 Dollars
($39,335,430.35) (“Lump Sum”)[.] Under no circumstances shall
Company be obligated to compensate Contractor beyond the Lump
Sum amount set forth in this Part I, Section 5 and the Work Offer
attached hereto as Exhibit F.

Section 5 continues by stating that it takes precedence over any conflicting language

elsewhere in the contract: “In the event of conflict in the terms of this Part I, Section

5 and any other Part(s) or Exhibits to this Agreement, this Part I Section 5 shall

control and be decisive of the issue.”

4
2. Contract: Part II

Part II, section 1 lists definitions. It defines “Work” as follows: “‘Work’ as

used herein shall mean the doing of all things described in the Scope of Work defined

in Part I all in accordance with the terms, conditions, and standards of the Agreement

as well as any other additional things as may be necessary to achieve the intent of

this Agreement in a timely manner.”

Section 6 (“Representations and Warranties”) contains a representation by

Venable’s about the price:

Contractor’s Lump Sum price, as set forth in Section 5 of Part I, is an
absolute cap irrespective of any occurrence, error or omissions in
drawings or specifications, post agreement increases in materials, delay
for right of entry or delivery of materials, any deviations between the
issued for bid and/or issued for construction drawings and
specifications, hindrance or other cause known or unknown . . . in the
amount it will be compensated for completion of the Work hereunder.

Venable’s further represents that “under this Lump Sum Agreement, it is assuming

all risk associated with the Work and that Contractor’s costs to assume such risk are

included and reflected in its Lump Sum Price.”

Section 11 (“Extra Work – Changes”) provides for additional work “which

arises outside and is independent or not otherwise included in this Agreement or its

scope (hereinafter referred to as ‘Extra Work’).” Extra Work “may be occasioned by

major changes in design or specification regarding Work of both a materially

different nature and cost from that contemplated at the time of execution of this

5
Agreement, or the performance of other or additional Work incident to the

completion of the project or facilities here involved, but not in contemplation of the

parties at the time of execution of this Agreement.”

Section 11 spells out what will not qualify as Extra Work:

Notwithstanding anything contained herein to the contrary, Contractor
agrees that any change in the amount of materials or Work of any kind
or character as described in Part IV Subparts A and B of this Agreement
shall not constitute Extra Work and are included within and not in
addition to the Lump Sum price as set forth in Part I, Section 5 of this
Agreement.

Section 19 deals with indemnity. As a result, many of its provisions come in

bolded capital letters to make them conspicuous, even if not especially easy to read.

Among other things, this section provides that Venable’s will indemnify, defend,

release, and hold harmless Aspen (plus its parent, affiliates, partners, agents, and

employees) from any claims alleged to arise out of any breach of the contract by

Venable’s, or any act or omission as a result of negligence or willful misconduct of

Venable’s related to the agreement or the performance of the Work. It contains a

promise to defend against certain lawsuits by third parties: “This indemnity includes

contractor’s agreement to pay all costs and expenses of defense, including without

limitation reasonable attorneys’ fees, incurred by any company indemnitee.”

(Emphasis omitted.)

Section 43 (“General”) states that the agreement “contains the entire

agreement between the parties and shall not be modified or supplemented except by
6
written instrument duly executed by both parties.” It also includes a no-waiver

clause: “No waiver of any of the provisions of this Agreement shall be deemed or

shall constitute a waiver of any other provisions hereof (regardless of whether

similar), nor shall any such waiver constitute a continuing waiver unless otherwise

expressly provided.”

3. Contract: Parts III and IV

Part III deals with bid proposals, various dates, exhibits, insurance, and other

administrative items.

Part IV (“Contractor Firm Offer”) begins a 20-page span of text by explaining

that it contains two subparts, with Subpart A stating the Lump Sum Price for the

Work and Subpart B stating the Special Unit Prices for any Extra Work. “The Lump

Sum Price (Subpart A) shall be Bidder’s [Venable’s] complete bid for all costs to

fully complete the unit of Work described. The Special Unit Prices (Subpart B) shall

apply to ‘Extra Work’ not shown on the Drawings nor otherwise required by the

Contract Documents in addition to Work contained in the Original Scope of Work

to be compensated based upon unit prices.”

“Any and all Special Unit items necessary for the completion of Contractor’s

original scope of work, or implied as necessary for Contractor’s successful

completion of its original scope of Work under the Agreement are included in

Contractor’s Lump Sum Price regardless of quantity, known or unknown as of the

7
Effective Date of the Agreement and shall be set forth and included in its Lump Sum

Price as referenced in Subpart A.”

To the extent that other provisions of the contract bear on the appeal, we will

discuss them in the course of examining the legal arguments.

B. Payment Dispute

Construction of the pipeline began in January 2019. By September 2019,

Venable’s had completed the physical installation of the pipe. Venable’s and Aspen

then began the “true up” process of determining the actual footage of pipe installed

compared to the estimated footage that the parties had included in the contract.

The parties had contemplated in the contract that Venable’s would install a

total of 298,509 lateral feet of pipeline, with 9,263 lateral feet of pipe installed using

bores, a more complicated and expensive method of laying pipe.1 However, the

pipeline had to be re-routed during the construction process, and Venable’s ended

up installing a total of 299,399 lateral feet of pipeline, with 14,001.2 lateral feet using

bores.

1
A Venable’s employee explained that it typically used an “open cut” method of
laying pipe, in which workers would excavate a trench, lay and weld the pieces of
pipe, and then backfill the trench. In some instances, such as when the pipeline had
to cross a road or a stream, Venable’s had to drill or bore through the area to lay the
pipe. This method “is generally far more difficult and expensive than installing pipe
using an open cut method.”
8
It is undisputed that Aspen paid Venable’s the Lump Sum Price, plus some

additional amounts made through the change order process. However, Venable’s

was not satisfied with the compensation that it received from Aspen. Venable’s

believed that because it installed more pipe than anticipated—and, especially, more

pipe using bores—it had completed “Extra Work,” and it was entitled to

compensation for the additional footage at the special unit prices for linear feet of

pipe generally and linear feet of pipe installed through bores as specified in Part IV

of the contract. Venable’s requested that in addition to the Lump Sum, Aspen pay

over $1.7 million for the additional footage as Extra Work.

The parties negotiated over this issue. Although Aspen did not dispute that

Venable’s installed more lateral feet of pipe and used more bores than what the

parties had originally estimated, Aspen ultimately determined that Venable’s was

not entitled to any further compensation under the contract. It therefore refused the

demand for additional compensation by Venable’s.

C. Procedural History

When the parties were unable to resolve the payment dispute, Venable’s filed

suit. Venable’s asserted a claim for breach of contract, alleging that Aspen failed to

compensate it for the Extra Work performed in installing the pipeline. It asserted

alternative claims for unjust enrichment/quantum meruit and promissory estoppel.

Venable’s further alleged that Aspen had violated the Prompt Payment Act by failing

9
to pay Venable’s within 35 days of receiving its payment request, and therefore

Venable’s was entitled to interest on the unpaid amount and attorney’s fees. See TEX.

PROP. CODE §§ 28.002, 28.004, 28.005. Venable’s also sought recovery of its

attorney’s fees under Civil Practice and Remedies Code Chapter 38.

Aspen asserted counterclaims against Venable’s, including its own claim for

breach of contract arising out of Venable’s alleged failure to install the pipeline

according to contractual plans and specifications.2 Aspen also alleged that

landowners in Waller County had sued AMP Intrastate Pipeline, LLC, an affiliate of

Aspen, for breach of easement agreements and damage to their property allegedly

arising out of construction of the pipeline (“the Woods lawsuit”). Aspen sought a

declaration that Venable’s had a contractual duty to defend and indemnify Aspen

and its affiliates for any claims related to the contract.3 Aspen also requested

attorney’s fees under both Chapter 38 and the Declaratory Judgments Act.

Following discovery, the parties filed multiple traditional summary judgment

motions on the asserted claims:

2
Aspen later non-suited its claim for breach of contract after the trial court made the
summary judgment rulings that form the basis for this appeal. Aspen’s breach of
contract claim is therefore not before us.
3
Aspen later amended its declaratory judgment counterclaim to request only a
declaration concerning the defense obligation of Venable’s, not the indemnification
obligation. Aspen reserved its right to seek indemnification from Venable’s
following the conclusion of the Woods lawsuit.
10
• Aspen moved for partial summary judgment on its declaratory
judgment counterclaim, arguing that the petition filed in the
Woods lawsuit established that that case fell within the scope of
Venable’s contractual duty to defend Aspen and its affiliates,
including AMP. Aspen later filed an amended summary
judgment motion on this claim, but the legal arguments remained
the same.
• Aspen also moved for summary judgment on Venable’s
affirmative claims, arguing that the contract’s Lump Sum Price
was an “absolute cap” on the amount of compensation Venable’s
could receive for its “Work” and the additional footage of pipe
that Venable’s installed did not constitute “Extra Work” that
would entitle Venable’s to compensation above the Lump Sum
Price. It also argued that Venable’s could not recover on its
alternative claims because an express contract covered all
Venable’s work on the pipeline project. Aspen further argued
that because Venable’s had no right to the extra compensation
that it sought, the Prompt Payment Act did not apply, and even
if it did, the parties’ contract fell within that Act’s exception for
“any well or mine services.”
• Venable’s moved for partial summary judgment on its breach of
contract claim, arguing that the additional footage of pipe and the
additional bores constituted “Extra Work,” and therefore Aspen
should have compensated it for this Extra Work by using the
Special Unit Prices contained in the contract to increase the
compensation owed to Venable’s over the Lump Sum Price that
Aspen paid.
• Venable’s also moved for partial summary judgment on Aspen’s
declaratory relief claim, arguing that the Woods lawsuit did not
fall within the duty to defend clause because that suit alleged no
contractual breaches or noncompliance arising out of any action
by Venable’s, and even if it had, the duty to defend provision was
void and unenforceable under an Insurance Code provision that
prohibits construction contractors from requiring an indemnitor
to indemnify an indemnitee for a claim caused by the
indemnitee’s actions.

11
The parties’ summary judgment evidence included their contract, emails relating to

the payment dispute, discovery responses, deposition testimony from various

employees of Aspen and Venable’s, declarations from various employees, the

petition in the Woods lawsuit, and letters between the parties’ attorneys relating to

the Woods lawsuit.

The parties filed responses and replies to the various summary judgment

motions. Aspen also objected to some of the evidence that Venable’s used to support

its motion on its own breach of contract claim. Aspen generally objected to extrinsic

evidence relied upon by Venable’s, and it raised objections to over thirty statements

in the declaration of a Venable’s employee and to eleven excerpts from the

depositions of two Aspen employees.

The trial court signed three orders relating to the parties’ summary judgment

motions. The court denied the summary judgment motion that Venable’s filed on its

own breach of contract claim. In this order, the court struck through a sentence

sustaining Aspen’s objections to the summary judgment evidence filed by

Venable’s. In the second order, the court granted Aspen’s summary judgment

motion on its own declaratory relief counterclaim and declared that Venable’s has a

duty to defend AMP Intrastate Pipeline in the Woods lawsuit. In the third order, the

court granted Aspen’s summary judgment motion on the affirmative claims filed by

Venable’s.

12
Following these summary judgment rulings, Aspen moved for an award of

attorney’s fees on its declaratory relief counterclaim. Several months later, after it

had non-suited the breach of contract claim against Venable’s, Aspen moved for

entry of final judgment.

The trial court’s final judgment incorporated its three earlier summary

judgment rulings. The court rendered judgment for Aspen on “the causes of action

and claims for relief asserted by Venable’s against Aspen” and ordered that

Venable’s take nothing on these claims. The court further rendered judgment for

Aspen on its declaratory relief claim and ordered that Venable’s has a duty to defend

AMP in the Woods lawsuit. In a separate order, the court granted Aspen’s motion

for attorney’s fees and awarded Aspen $82,182.50 “for services rendered in

association with the prosecution of Aspen’s declaratory judgment counterclaim.”

The court also awarded Aspen conditional appellate attorney’s fees.

This appeal and cross-appeal followed.

Standard of Review

On cross-motions for summary judgment, each party must establish that it is

entitled to judgment as a matter of law. Hotze v. Turner, 672 S.W.3d 380, 385 (Tex.

2023); TEX. R. CIV. P. 166a(c). We review the trial court’s rulings on the motions de

novo, considering both parties’ summary judgment evidence. Mitchell v. MAP Res.,

Inc., 649 S.W.3d 180, 188 (Tex. 2022). When the trial court grants one motion and

13
denies another, we determine all questions presented and render the judgment the

trial court should have rendered. Jordan v. Parker, 659 S.W.3d 680, 684 (Tex.

2022).

Pricing Under the Contract

The first issue on appeal relates to the price Venable’s was contractually

entitled to be paid. Venable’s contends that Aspen breached the contract by

underpaying in the amount of $1.77 million. Failing that, Venable’s seeks in the

alternative to recover in quantum meruit or promissory estoppel. Finally, as an

amplifier of its damages, Venable’s says that any recovery should be enhanced under

the Prompt Payment Act, which applies to this case because this litigation does not

fall within the Act’s mineral development or oilfield services exemption.4

A. Breach of Contract

According to Venable’s, it is not claiming compensation over and above the

Lump Sum Price for the “Work.” Instead, it claims compensation for “installing

4
See TEX. PROP. CODE § 28.002(a) (“If an owner or a person authorized to act on
behalf of the owner receives a written payment request from a contractor for an
amount that is allowed to the contractor under the contract for properly performed
work . . . , the owner shall pay the amount to the contractor, less any amount
withheld as authorized by statute, not later than the 35th day after the date the owner
receives the request.”); id. § 28.004(a)–(b) (providing that unpaid amount “required
under this chapter” accrues interest beginning on day after date payment is due and
bears interest at rate of 1 ½ percent each month); id. § 28.010(a)(3) (exempting
agreements “to purchase, sell, gather, store, or transport oil, natural gas, natural gas
liquids, synthetic gas, or other hydrocarbon substances by pipeline or by a fixed,
associated facility”).
14
additional footages, over and above the footages included in the Lump Sum.”

Venable’s says that these additional footages came about only because Aspen called

for them: “Aspen directed changes to the route and bores post-Contract.” It argues

that “Aspen itself directed the performance of the work under a Contract that

contains Unit Prices for that work.”

Venable’s says that digging through dirt costs less than boring through rock:

“bores are more expensive to install than baselay installation.” Whereas Venable’s

expected to drill 39 bores, it ended up drilling 47 bores. Further, Venable’s expected

to install only 298,509.29 feet of baselay but ended up installing 299,399 feet of

baselay instead. As damages, Venable’s seeks $1,667,846.40 for the additional bores

and $104,327.39 for the additional baselay.

Aspen counters that Venable’s did Work, but not Extra Work. Aspen further

contends that even if Extra Work was done, Venable’s still loses because of its

failure to follow the contractual protocols for the requisite change orders. To show

that Venable’s performed only Work and not any Extra Work, Aspen emphasizes

Part I, Section 5 and Part II, Section 6(j) of the contract. Those provisions describe

the $39 million lump sum figure as a “total sum” and an “absolute cap” on

compensation.

Aspen also cites the clause in the Extra Work section of Part II, which says

what Extra Work is not: “Notwithstanding anything contained herein to the contrary,

15
Contractor agrees that any change in the amount of materials or Work of any kind

or character as described in Part IV Subparts A and B of this Agreement shall not

constitute Extra Work and are included within and not in addition to the Lump Sum

price.”

1. Venable’s did Work, but not Extra Work

In light of this “Notwithstanding” clause, as well as the contractual terms

concerning Work and Extra Work, we agree with Aspen that the additional footages

at issue do not qualify as Extra Work. In Part IV, Subpart A, section 1.0, the contract

states that the “work to be performed consists of all activities necessary to complete

the installation of approximately 298,509.29 linear feet (56.54 miles)” of 30-inch

pipe.

Then the text quickly goes on to identify the starting and ending points. First,

it identifies the starting point as Aspen’s Battle Horse Facility Launcher Site located

in Washington County (and it gives a survey station location). Second, it identifies

the ending point as Aspen’s Enstore Receiver Site located in Waller County (and it

gives a different survey station location). The contract thereby specified what

Venable’s had to do, just as a passenger does when ordering an Uber to drive him or

her from A to B.

Given the “Notwithstanding” clause in Part II—which specifies plainly that

Venable’s “agrees that any change in the amount of materials or Work of any kind

16
or character as described in Part IV, Subparts A and B of this Agreement shall not

constitute Extra Work and are included within and not in addition to the Lump Sum

price”—the installation of pipe to connect point A and point B cannot have

constituted Extra Work.

To be Extra Work, that installation of pipe would have to arise outside and be

independent of the agreement or its scope. That did not happen. The work here was

exactly what the agreement contemplated: Venable’s installed pipe to run from point

A to point B, from the Washington County site to the Waller County site. Thus, we

agree with Aspen that there were no major changes in design or specification

requiring work of a materially different nature from that contemplated, and there

was no performance of work not contemplated by the parties when they executed

the agreement.

Venable’s cites considerable extrinsic evidence about who said or did what,

but none of that has any bearing on the meaning of this unambiguous contract. See

URI, Inc. v. Kleberg Cnty., 543 S.W.3d 755, 764–65 (Tex. 2018) (“Only where a

contract is ambiguous may a court consider the parties’ interpretation and admit

extraneous evidence to determine the true meaning of the instrument.”) (quotation

omitted); Cmty. Health Sys. Pro. Servs. Corp. v. Hansen, 525 S.W.3d 671, 681 (Tex.

2017) (“An unambiguous contract will be enforced as written, and parol evidence

17
will not be received for the purpose of creating an ambiguity or to give the contract

a meaning different from that which its language imports.”) (quotation omitted).

Venable’s also contends that if one does the algebra, one can easily show that

the lump sum figure comes from multiplying certain unit prices by the linear footage

of pipe the parties estimated. Venable’s thus reasons that one may readily calculate

the right price using the linear footage of pipe actually installed. That may well be

so. But the parties agreed to a fixed price scheme for the work. They did not set up

an a la carte scheme. In fact, they agreed not to resort to special unit prices unless

there was Extra Work, which we have just held was not the case. For these reasons,

the contract claim fails.

2. The contract as a whole allows no other conclusion

Perhaps the most recent Texas Supreme Court case involving a pricing dispute

over a pipeline construction contract is El Paso Field Services, L.P. v. MasTec North

America, Inc., 389 S.W.3d 802 (Tex. 2012). There the court enforced a lump sum

contract that allocated the risk of underground surprises to the contractor. Id. at 812.

The court adhered to the venerable rule that where one agrees to do, for a fixed sum,

a thing possible to be performed, he will not be excused or become entitled to

additional compensation when unforeseen difficulties are encountered. Id. at 811

(quoting City of Dallas v. Shortall, 114 S.W.2d 536, 540 (Tex. 1938)); see also

Lonergan v. San Antonio Loan & Tr. Co., 104 S.W. 1061, 1066 (Tex. 1907)

18
(concluding that absent language in contract, property owner was not “guarantor of

the sufficiency of the specifications” for designing and building of structure, and

therefore builder bore responsibility for collapse of structure arising out of defects

in design specifications by architect).

“Someone has to bear the loss of the additional costs of constructing the

pipeline around the undiscovered foreign crossings.” El Paso Field Servs., 389

S.W.3d at 811. “Were we to hold in MasTec’s favor, and conclude that El Paso must

bear the risk of unknown underground obstacles under this contract, we would

render meaningless the parties’ risk-allocation agreement and ultimately prohibit

sophisticated parties from agreeing to allocate risk in construction contracts.” Id. at

812.

This case bears too close a resemblance to El Paso Field Services to allow for

any recovery above the Lump Sum Price. Venable’s acknowledges that decision but

undertakes to distinguish it: “Totally distinct from the Contract here, El Paso

contains no discussion of Unit Prices.” “Unlike the contract in El Paso, the Contract

here is structured like typical pipeline construction contracts,” Venable’s contends,

“and includes a Lump Sum component in addition to Unit Prices.”

This attempted distinction will not survive scrutiny. The contract in El Paso

Field Services is included among the records of this Court because that case came

through this Court on its way to the supreme court. See MasTec N. Am., Inc. v. El

19
Paso Field Servs., L.P., 317 S.W.3d 431 (Tex. App.—Houston [1st Dist.] 2010),

rev’d, 389 S.W.3d 802 (Tex. 2012). Hence, we take judicial notice of that record’s

contents. See Tex. Real Est. Comm’n v. Nagle, 767 S.W.2d 691, 694 (Tex. 1989) (“A

court may take judicial notice of its own records and judgments . . . .”) (op. on

reh’g); Tschirhart v. Tschirhart, 876 S.W.2d 507, 508 (Tex. App.—Austin 1994, no

writ) (“[A] court may take judicial notice of its own records.”). The contract there

did contain unit prices.

Just as the contract in El Paso Services put the risk on the contractor to do an

adequate inspection before agreeing to a fixed price, the contract here allocates the

risk in the same way. Specifically, Part IV contains a representation about site

investigation: “The undersigned Contractor represents that it has satisfied itself as to

the nature and location of the Work, having in mind in respect of the location of the

lines, the risk incident to the possibility or probability of previously undiscovered

underground obstacles, the general and local conditions and other factors incidental

to the performance of the Work.” These factors include “conditions of the terrain”

and “all other matters which in any way may affect the Work or the cost thereof.” A

similar representation about “conditions of the ground” appears in Part I, section 1.

The supreme court’s decision in El Paso Field Services thus controls. Further, and

in any event, the contract here resorts to special unit prices only for Extra Work, not

for Work.

20
B. Promissory Estoppel and Quantum Meruit

As a fallback, Venable’s alleges promissory estoppel and quantum meruit. But

a party cannot retread an express contractual bargain through quantum meruit: “A

party generally cannot recover under quantum meruit when there is a valid contract

covering the services or materials furnished.” Young v. Dimension Homes, Inc., No.

01-14-00331-CV, 2016 WL 4536407, at *3 (Tex. App.—Houston [1st Dist.] Aug.

30, 2016, no pet.) (mem. op.); see Christus Health v. Quality Infusion Care, Inc.,

359 S.W.3d 719, 724 (Tex. App.—Houston [1st Dist.] 2011, no pet.) (op. on reh’g);

Gulf Liquids New River Project, LLC v. Gulsby Eng’g, Inc., 356 S.W.3d 54, 70–71

(Tex. App.—Houston [1st Dist.] 2011, no pet.).

The same concept forecloses the promissory estoppel claim. See Tex. A&M

Concrete, LLC v. Brae Burn Constr. Co., 651 S.W.3d 607, 621 (Tex. App.—

Houston [1st Dist.] 2022, no pet.); see also Koehler v. Amoco Fed. Credit Union,

No. 01-13-00498-CV, 2014 WL 6602446, at *2 (Tex. App.—Houston [1st Dist.]

Nov. 20, 2014, no pet.) (mem. op.) (“[A] promissory-estoppel claim cannot be based

upon enforcement of a contract.”); Subaru of Am., Inc. v. David McDavid Nissan,

Inc., 84 S.W.3d 212, 226 (Tex. 2002) (op. on reh’g) (“[T]he promissory estoppel

doctrine presumes no contract exists . . . .”).

We therefore conclude that the trial court did not err by granting Aspen’s

summary judgment motion on Venable’s claims for affirmative relief and denying

21
the summary judgment motion filed by Venable’s on its own breach of contract

claim.5

We overrule the first issue raised by Venable’s.

Duty to Defend

The next issue on appeal asks whether Venable’s owes Aspen a contractual

duty to defend an Aspen affiliate in a suit by some local landowners who allege that

the pipeline construction project hurt their rice farming. Aspen sought a declaration

that Venable’s owes such a duty, and the trial court issued one: “Venable’s has a

duty to defend AMP, Aspen’s affiliate, in the Woods Litigation.”

5
Because we conclude that the trial court properly granted summary judgment
dismissing the breach of contract claim filed by Venable’s, we need not address the
portion of its first appellate issue concerning its entitlement to recovery under the
Prompt Payment Act. That Act presupposes existence of an “unpaid amount.” See
id. § 28.004(a) (providing that “unpaid amount required under this chapter” accrues
interest beginning day after date payment is due); see also id. § 28.002(a) (“If an
owner or a person authorized to act on behalf of the owner receives a written
payment request from a contractor for an amount that is allowed to the contractor
under the contract for properly performed work . . . , the owner shall pay the amount
to the contractor, less any amount withheld as authorized by statute, not later than
the 35th day after the date the owner receives the request.”) (emphasis added). For
the reasons discussed above, Venable’s is not entitled to any “unpaid amount” under
its contract with Aspen.
Similarly, because we conclude that the trial court correctly denied the summary
judgment motion filed by Venable’s on its breach of contract claim, we need not
address the merits of Aspen’s conditional cross-appeal, which argues that the trial
court should have sustained Aspen’s objections to certain evidence submitted by
Venable’s in support of its summary judgment motion on its breach of contract
claim.
22
Venable’s disagrees with the declaration. First, Venable’s says that Aspen

opted to provide its own defense of the affiliate and never demanded one from

anybody else. Second, Venable’s says that the promise to defend applies only in the

case of alleged wrongdoing by Venable’s. Yet the Woods lawsuit blames an Aspen

affiliate and never even mentions Venable’s. Finally, Venable’s says that the Texas

Anti-Indemnity Act voids any promise by a construction company to provide

indemnity and a defense against wrongdoing by the indemnitee. See Tex. Ins. Code

§ 151.102 (“Except as provided by Section 151.103, a provision in a construction

contract . . . is void and unenforceable as against public policy to the extent that it

requires an indemnitor to indemnify, hold harmless, or defend a party, including a

third party, against a claim caused by the negligence or fault, the breach or violation

of a statute, ordinance, governmental regulation, standard, or rule, or the breach of

contract of the indemnitee . . . .”).

A. Venable’s Promised to Defend and Indemnify in the Event of Certain
Claims Alleging a Tort or Breach of Contract

Analysis begins with the text of the contract. Part II, Section 19 contains

standard indemnity language. Using the customary capital letters and bold print,

subsection 19(A) sets forth promises by the contractor (Venable’s) to the company

(Aspen), such as indemnity and defense:

(A) To the fullest extent permitted by law, Contractor agrees to
indemnify, defend, release, and hold harmless Company, its
parent and affiliate companies . . . from and against any and all

23
claims, demands, losses, damages, causes of action, suits and
liabilities of every kind . . . for injury to or death of any person,
or for loss or damage (excluding punitive and exemplary) to any
property . . . directly or indirectly arising or alleged to arise out
of or in any way incidental to (I) any breach or non-compliance
with any term or provision of this agreement, by the
Contractor . . . ; or (II) any act or omission as a result of
negligence or [willful] misconduct, whether active or passive, of
the Contractor . . . related to this agreement or the performance
or nonperformance of the work hereunder (collectively
“Contractor Liabilities”). This indemnity includes Contractor’s
agreement to pay all costs and expenses of defense . . . .

(Emphasis omitted.) Thus, the contract requires Venable’s to provide indemnity and

a defense for claims alleging a tort or breach of contract by Venable’s, but not for a

claim alleging such wrongdoing by Aspen or Aspen’s affiliates.

A later subsection provides that Aspen shall give Venable’s notice of any such

claim. But it adds that Aspen may also opt to provide its own defense, without

prejudice to its right to pursue indemnification once the claim is resolved:

(e) Company shall notify Contractor of any Claim that has given or
could give rise to a right of indemnification
hereunder . . . . Contractor shall, at its sole cost and
expense . . . provide defense for any Claim for which it gives
indemnity herein . . . . At Company’s sole discretion and option,
exercisable at any time, Company may itself undertake the
defense . . . of any such Claim, reserving its right to seek
indemnification against Contractor until after the Claim is
resolved, or Company may direct Contractor to contest, defend,
litigate, settle or satisfy any Claim made against Company . . . .

As we will discuss, a third-party claim did arise, and Aspen undertook the defense

itself while reserving the right to seek indemnification later.

24
B. Local Rice Farmers Brought Claims Against an Aspen Affiliate but Not
Against Venable’s

The third-party claim came from a handful of rice farmers in Waller County

(“the Woods plaintiffs”). In May 2021, they sued an Aspen affiliate known as AMP

Intrastate Pipeline in the 506th District Court of Waller County.

The Woods plaintiffs alleged that they had signed some easement agreements

with AMP for the purpose of facilitating the pipeline construction project. According

to the Woods plaintiffs, the easement agreements contain various promises by AMP

about restoring the roads, returning the topsoil to its original condition, and using a

digging technique called double-ditching.6 The Woods plaintiffs allege that AMP

broke these promises and caused the loss of farmable acreage. For example, they

allege that AMP failed to double-ditch and thus left the ground with too much clay

on top to allow for productive rice farming.

The petition in the Woods lawsuit does not mention Venable’s.

C. Aspen Gave Notice of the Woods Lawsuit, Chose to Provide Its Own
Defense, and Reserved the Right to Seek Indemnification Later

A few weeks after the filing of the Woods lawsuit, Aspen brought the lawsuit

to the attention of Venable’s. An Aspen employee sent a letter that attached the

petition and reserved the right to seek indemnification:

6
“Double-ditching” involves removing topsoil from an area of land, removing the
subsoil, storing the topsoil and subsoil in separate piles, installing the pipeline,
replacing the subsoil first, and then replacing the topsoil.
25
Second, several landowners have recently sued Aspen’s affiliate, AMP
Intrastate Pipeline, LLC, in Waller County. Their petition, which I have
also attached for your reference, includes claims that relate directly to
Venable’s work under the Agreement. Under Section 19(A) of the
Agreement, Venable’s has indemnification obligations covering many
of these claims. Aspen reserves the right to seek indemnification from
Venable’s.

The letter did not ask for a defense.

Aspen followed up a year later in a letter from outside counsel. Aspen

reminded Venable’s of the Woods lawsuit and reiterated the reservation of the right

to seek indemnification after its resolution:

In a letter dated July 8, 2021, Company previously notified Contractor
of litigation commenced in Waller County (the “Woods Litigation”).
See Exs. A, B. Company advised Contractor of indemnification
obligations arising under Part II, Section 19(A) of the MCA and
specifically reserved the right to seek indemnification from Contractor
in the future with respect to the Woods Litigation.

The letter quoted from section 19 of the contract and stated that “[t]he Woods

Plaintiffs allege property damage arising from Contractor’s breach of or non-

compliance with its obligations under the MCA,” specifically mentioning the

obligation imposed on Venable’s to use double-ditching in agricultural fields and

wetlands. The letter also repeated Aspen’s view about its right to pursue indemnity

in the future: “For the avoidance of doubt, Aspen has exercised and is exercising its

sole discretion and option to undertake defense of the Claim at issue and reserves its

right to seek indemnification from [Venable’s], including for the costs of defending

such Claim, until after the Claim is resolved.”
26
Thus, both Aspen letters reserved the right to seek indemnification when the

Woods lawsuit has concluded, but neither letter asked Venable’s to provide a

defense to that lawsuit.

D. The Trial Court’s Declaration and Our Holding

This lawsuit began in May 2022, not long before the second Aspen letter about

reserving the right to seek indemnification. About a year into this litigation, Aspen

filed a counterclaim asking for a declaration about the duty to defend:

Aspen seeks a declaration that: (i) the Contract requires Venable’s to
defend AMP in the Woods Litigation, including payment of all costs
and expenses of defense (including, without limitation, reasonable
attorney’s fees incurred or to be incurred by AMP); and (ii) the Contract
requires Venable’s to indemnify AMP for any and all losses incurred
or to be incurred in the Woods Litigation.

The parties teed up this issue on cross-motions for summary judgment. The trial

court granted the Aspen motion and denied the Venable’s motion, with the final

judgment declaring that Venable’s has a duty to defend AMP.

On appeal, the parties vigorously debate the eight-corners doctrine and the

Texas Anti-Indemnity Act. See Pharr-San Juan-Alamo Indep. Sch. Dist. v. Tex. Pol.

Subdivisions Prop./Cas. Joint Self Ins. Fund, 642 S.W.3d 466, 472 (Tex. 2022)

(“Under this ‘eight-corners’ or ‘complaint-allegation’ rule, the insurer has a duty to

defend if the underlying petition alleges facts that fall within the scope of the

insurance policy’s coverage.”); Monroe Guar. Ins. Co. v. BITCO Gen. Ins. Corp.,

640 S.W.3d 195, 199 (Tex. 2022) (“Under the eight-corners rule, the insurer’s duty

27
to defend is determined by comparing the allegations in the plaintiff’s petition to the

policy provisions, without regard to the truth or falsity of those allegations and

without reference to facts otherwise known or ultimately proven.”); TEX. INS. CODE

§ 151.102. But in the runup to those arguments, they clash over the consequences of

Aspen opting to provide the defense itself and to reserve the indemnity issue for

another day. How does Aspen’s choice bear on the Venable’s duty to defend?

In our view, Aspen’s voluntary choice makes the declaration at issue

unsustainable. Aspen never asked for a defense. It never tendered the claim or

demanded that Venable’s take over the defense. As a result, we see no live dispute

needing a declaration as contemplated by the Declaratory Judgments Act. There is

only the potential for a future fight over whether Venable’s owes any money under

the indemnity promise. A declaration now would not “settle and . . . afford relief

from uncertainty and insecurity with respect to rights, status, and other legal

relations.” TEX. CIV. PRAC. & REM. CODE § 37.002(b).

Start with the summary judgment motions. Aspen’s motion stresses that

Aspen wanted a declaration only about defense, not indemnity: “[T]his Motion seeks

partial summary judgment only on Venable’s obligation to defend AMP. Under

Texas law, the duty to defend and the duty to indemnify are separate and distinct

duties.” Aspen further argues in its summary judgment reply that a declaration, “if

28
granted, should allow Aspen and AMP to seek reimbursement of defense costs” from

Venable’s. But that argument lacks merit.

“The duty to defend is determined solely by the precise language in the

contract and the factual allegations in the pleadings.” English v. BGP Int’l, Inc., 174

S.W.3d 366, 372 (Tex. App.—Houston [14th Dist.] 2005, no pet.); see also Monroe

Guar. Ins. Co., 640 S.W.3d at 199 (“The [eight-corners] rule directs Texas courts to

determine an insurer’s duty to defend its insured based on (1) the pleadings against

the insured and (2) the terms of the insurance policy.”). The precise language of the

parties’ contract separates defense and indemnity. The contract puts any

reimbursement right under the umbrella of indemnity—“This indemnity includes

Contractor’s agreement to pay all costs and expenses of defense . . . .”—which

Aspen has reserved for later.

Aspen argues that Venable’s must “front the costs of the defense, regardless

of whether AMP decides to conduct its own defense or have Venable’s do so.” But

the contract says no such thing. The contract creates two possible regimes for who

provides the defense, with one calling for fronting of defense costs and the other

containing no such clause. This may be easier to see from a comparison of the two

relevant sentences in subsection 19(e):

29
Sentence 2: Sentence 3:
Venable’s provides a defense at its sole Aspen can provide a defense,
cost and expense or it can direct Venable’s to do so

“Contractor shall, at its sole cost and “At Company’s sole discretion and
expense, investigate, handle, respond to, option, exercisable at any time,
and provide defense for any Claim for Company may itself undertake the
which it gives indemnity herein, defense, litigation, settlement or
provided that Company shall have the satisfaction of any such Claim,
right and opportunity to participate in reserving its right to seek
any such investigation or defense.” indemnification against Contractor until
after the Claim is resolved, or Company
may direct Contractor to contest,
defend, litigate, settle or satisfy any
Claim made against Company, provided
that Contractor shall not settle any
Claim without Company’s prior written
consent, such consent not to be
unreasonably withheld.”

In the first regime, Venable’s provides the defense and pays for it. But Aspen did

not choose that regime. Aspen never asked for a defense. Aspen exercised its right

under the next sentence to provide the defense itself, and nothing there calls for

fronting of defense costs. By opting to provide the defense itself and to reserve

indemnity for later, Aspen deferred the issue of defense costs as an item to be dealt

with later via indemnification.

After exploring the matter with the parties at oral argument, the Court

understands both sides to accept the position advanced by Venable’s: the contract

“does not provide that Venable’s is obligated to assume a defense where Aspen

hasn’t demanded one. And Aspen did not demand a defense for all the years after
30
the Woods Petition was filed, including when it filed its declaratory judgment

counterclaim.”

Hence, the trial court’s declaration on the duty to defend served no purpose

and should not have been rendered. It addressed only a hypothetical set of facts,

namely a world in which Aspen demanded a defense and Venable’s refused. Such a

declaration is improper. See TEX. CIV. PRAC. & REM. CODE §§ 37.002(b) (stating that

purpose of Declaratory Judgments Act is “to settle and to afford relief from

uncertainty and insecurity with respect to rights, status, and other legal relations”),

37.008 (providing that court may refuse to render declaratory judgment “if the

judgment or decree would not terminate the uncertainty or controversy giving rise

to the proceeding”). “A declaratory judgment is appropriate only if a justiciable

controversy exists as to the rights and status of the parties and the controversy will

be resolved by the declaration sought.” Bonham State Bank v. Beadle, 907 S.W.2d

465, 467 (Tex. 1995). For a justiciable controversy to exist, there must be “a real and

substantial controversy involving genuine conflict of tangible interests and not

merely a theoretical dispute.” Id. (quotation omitted).

We sustain the second issue raised by Venable’s.

Attorney’s Fees Under the Declaratory Judgments Act

Reversal of the declaration necessarily requires reversal of the trial court’s

award of attorney’s fees. The Act provides for an award of such fees as are equitable

31
and just. TEX. CIV. PRAC. & REM. CODE § 37.009. But ascertaining whether an award

of attorney’s fees to Aspen remains equitable and just falls to the trial court in the

first instance in light of this opinion. See Kachina Pipeline Co. v. Lillis, 471 S.W.3d

445, 455 (Tex. 2015); see also Morath v. Tex. Taxpayer & Student Fairness Coal.,

490 S.W.3d 826, 885 (Tex. 2016) (“Where the extent to which a party prevailed has

changed on appeal, our practice has been to remand the issue of attorney fees to the

trial court for reconsideration of what is equitable and just.”).

Conclusion

We affirm the trial court’s take-nothing judgment as to breach of contract,

reverse the declaratory judgment as to the duty to defend, and remand the case for

further proceedings consistent with this opinion.

David Gunn
Justice

Panel consists of Justices Rivas-Molloy, Gunn, and Caughey.

32