Contract Ambiguity Survives Summary Judgment Where Competing Interpretations Both Find Textual Support
Read the Court's Opinion (PDF)
Judge Andrea K. Bouressa
In Fiberwave v. AT&T Enterprises, Division 1 denied cross-motions for summary judgment on contract interpretation, holding that a residual compensation provision was ambiguous where both parties' readings found support in the text but neither fully reconciled all language. The court granted summary judgment dismissing all fraud claims—plaintiff's fraudulent inducement claim for lack of justifiable reliance, and defendant's counterclaims on no-evidence grounds and under the economic loss rule.
Court Staff Summary
A contract is ambiguous regarding the start date for calculating the making of certain vested payments following a termination of an agreement for “cause.” Its meaning thus presents a fact issue for the jury and extraneous evidence may be admitted to help determine the language’s meaning. The Court grants summary judgment against the plaintiff's fraudulent inducement claims because the plaintiff provided no evidence of justifiable reliance. The Court grants summary judgment against the defendant's fraud claims on no-evidence grounds because the defendant failed allege misrepresentation of compliance with a law or intent to induce reliance. The Court also grants summary judgment on traditional grounds because of the economic-loss-rule affirmative defense and because the defendant sought equitable remedies of disgorgement which were neither available nor pled.
Background and Procedural Posture
This dispute arose from the 2022 Alliance Program Agreement between Fiberwave, Inc. (formerly Spearhead Consulting) and AT&T Enterprises, LLC, governing Fiberwave's role as a solution provider. Following AT&T's termination of the agreement for alleged "cause"—based on purported kickbacks prohibited by the incorporated Solution Providers Guidebook—the parties disputed whether Fiberwave retained vested rights to 36 months of residual compensation payments. Both parties moved for summary judgment on contract interpretation under Rule 166(g), and multiple fraud claims proceeded on traditional and no-evidence summary judgment motions. Judge Bouressa's July 24, 2026 memorandum opinion addressed an omnibus order granting partial relief to both sides.
The Contract Ambiguity: Calculating "Remaining" Payments
The central interpretive dispute concerned Guidebook Section VI.B.4., which provides that upon termination for cause, a solution provider retains a "vested interest in earned Residual Compensation for Orders or Renewals earning Residual Compensation for no more than 36 monthly payments remaining on an Order." AT&T argued the 36 payments should be counted from the Order's start date; Fiberwave contended they should run from the termination date. The court found both readings plausible but incomplete.
Judge Bouressa noted that neighboring provisions in the Guidebook expressly stated when time periods ran "from the date of Termination," which
"[w]here the parties intended a time period to run from Termination, they expressly stated as much. Taking the difference in plain language at face value disfavors Fiberwave's interpretation."Yet AT&T's reading also failed, because
"[t]he use of 'no more than' and 'remaining' implies a calculation of what is left or as-yet unpaid."An Order lacks an inherent end date, making "remaining" payments unknowable without reference to some triggering event. The court observed that AT&T's construction could theoretically expose solution providers to chargebacks on payments made years before termination, an absurd result.
Fraud Claims Dismissed on Multiple Grounds
The court granted AT&T's motion for summary judgment on Fiberwave's fraudulent inducement claim on both traditional and no-evidence grounds, finding Fiberwave failed to establish justifiable reliance or that AT&T intended not to perform when entering the 2022 agreement. Fiberwave's evidence—AT&T's withholding of post-termination compensation and AT&T's knowledge of kickback allegations in 2016 and 2018—was insufficient. The court emphasized that circumstantial evidence of intent to defraud
"must transcend mere suspicion,"and evidence creating only "a mere surmise or suspicion" does not rise above a scintilla under Lozano v. Lozano.
Conversely, the court granted counter-defendants' motions dismissing AT&T's fraud counterclaims against Fiberwave, Percy, and Chaudhry. The court found AT&T failed to produce evidence of misrepresentation or intent to induce reliance on no-evidence grounds. On traditional grounds, the economic loss rule barred AT&T's fraud claims, and AT&T's request for equitable disgorgement remedies failed because such remedies were neither properly pled nor available under the circumstances.
Significance for Texas Commercial Practice
This opinion underscores the Business Court's rigorous approach to contract ambiguity analysis. Even where one party's interpretation finds stronger support in isolated textual clues, ambiguity exists when competing readings each find reasonable grounding in different aspects of the agreement's language and structure. The decision reinforces that parties seeking to avoid ambiguity must draft with precision—particularly when neighboring provisions use express temporal markers that could have been replicated elsewhere.
The fraud rulings demonstrate the Business Court's adherence to established Texas summary judgment standards while applying them in complex commercial contexts. The "mere surmise or suspicion" standard for circumstantial evidence of fraudulent intent, the justifiable reliance requirement, and the economic loss rule's continued vitality all feature prominently. Practitioners should note the court's willingness to grant no-evidence summary judgment on fraud claims where movants identify specific missing elements, and its application of the economic loss rule as an affirmative defense even where other grounds for dismissal exist.