Clear Lake City Water Auth. v. Kirby Lake Dev. Ltd

In Clear Lake City Water Auth. v. Kirby Lake Dev. Ltd., 123 S.W.3d 735 (Tex. App.-Houston 14th Dist. 2003, pet. denied), a group of developers brought suit against the district for, among other things, breach of a contract in which the district agreed to pay for a portion of the developers' costs incurred in constructing water and sewage facilities on properties within the district. The district contended that the payment provision of the contract unambiguously provided that the developers were to be paid only out of legally available and allocated voter-approved bond funds. Id. at 742. The developers, on the other hand, argued that the district had agreed to pay, as soon as possible from any available source, including revenue bonds, which do not require voter approval. Id. The court, after reviewing the contract in its entirety, concluded that while the district obligated itself to purchase the completed facilities as soon as possible, that requirement did not arise until after the district received the proceeds of voter-approved bond funds. Id. at 744. In reaching that conclusion, the court of appeals rejected the developers' contention that receipt of voter-approved bond funds was not a condition precedent. Rather, "the payment provision of the contracts unambiguously provides that the district's obligation to pay is expressly conditioned upon the receipt of voter-approved bond funds." Id. at 745.