Heblen Kanan, Pharr Plantation Inc. and Pharr Plantation Management Co., Ltd. v. Plantation Homeowner's Association, Inc. , 2013 Tex. App. LEXIS 5083 ( 2013 )

NUMBER 13-11-00282-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
HEBLEN KANAN, PHARR PLANTATION,
INC., AND PHARR PLANTATION
MANAGEMENT CO., LTD., Appellants,
v.
PLANTATION HOMEOWNER’S
ASSOCIATION INC., ET AL., Appellees.
On appeal from the County Court at Law No. 1
of Hidalgo County, Texas.
OPINION
Before Chief Justice Valdez and Justices Rodriguez and Garza
Opinion by Chief Justice Valdez
Appellants, Heblen Kanan, Pharr Plantation, Inc., and Pharr Plantation
Management Co., Ltd., have appealed a judgment rendered on March 29, 2011, in trial
court cause number CL-07-0468-A in the County Court at Law Number One of Hidalgo
County, Texas. By one issue with multiple sub-issues, appellants contend that the trial
court erred in entering judgment on an unenforceable settlement agreement. We
affirm.1
I. BACKGROUND
The underlying lawsuit involves a dispute over ownership and management of
the Plantation South Subdivision in Hidalgo County, Texas. Pharr Plantation, Inc.
(“Plantation”), as owner of the subdivision, and Pharr Plantation Management Co.
(“Management”), as manager of the subdivision, brought a suit for declaratory relief
against Pharr Plantation Homeowners Association, Inc. and individual property owners 2
(collectively “Homeowners”) in the subdivision. Plantation alleged that it had sole
authority and power to manage the subdivision through Management as opposed to the
Homeowners. In their pleadings, Plantation and Management sought declaratory and
injunctive relief, damages and exemplary damages, and to remove the cloud on title and
to quiet title.
1
The Court has previously affirmed in part and reversed in part an order regarding supersedeas
in this case, see Kanan v. Plantation Homeowner’s Ass’n, No. 13-11-00282-CV, 2012 Tex. App. LEXIS
1458, at *1 (Tex. App.—Corpus Christi Feb. 21, 2012, no pet.) (mem. op. on order), and denied a petition
for writ of mandamus filed by appellants on these issues on grounds that these matters were subject to
review in the related appeal. See In re Pharr Plantation Mgmt. Co., No. 13-11-00548-CV, 2012 Tex. App.
LEXIS 300, at **5–6 (Tex. App.—Corpus Christi Jan. 12, 2012, orig. proceeding) (per curiam mem. op.).
On November, 7, 2012, the Court also abated this appeal for the purposes of mediation and directed the
parties to notify the Court regarding the results of mediation. By letter dated December 17, 2012, this
Court requested that the parties advise of the results of mediation by December 27, 2012. The parties
did not respond. By letter dated January 15, 2013, the Court again requested that the parties advise the
Court regarding the results of mediation by no later than January 25, 2013 and informed the parties that if
we heard nothing from the parties regarding the results of mediation by that date, the appeal would be
reinstated on the Court’s docket. The parties have not notified the Court regarding the mediation results
and accordingly, the appeal is reinstated.
2
The individuals involved in this lawsuit are: D’Wayne De Ziel, Elaine De Ziel, Owen Bohnsack,
Lee Albert, Maddy Mann, Fred Wiegand, Eva Maria Ellrich, George Rolando, Nathalie Watteau Vera,
Rosie Reyna, Christine Cabrera, Paul Smith, Lila Reiser, George Johnston, Jim Woltz, Marjorie Nichols,
Sandy Gonzalez, Peggy Boos, Norma Holiday, and David Coers.
2
In response, Homeowners filed a counterclaim against Plantation and
Management and a third party petition against Heblen Kanan, whom Homeowners
alleged was the “alter ego” of Plantation and Management. The Homeowners alleged
that Plantation, Management, and Kanan breached their duty to manage the subdivision
and collect assessments and brought suit against them for negligence, breach of
fiduciary duty, breach of the duty of good faith and fair dealing, fraud, mismanagement,
conversion, and for failing to enforce restrictive covenants and the subdivision’s rules
and regulations. They sought declaratory and injunctive relief and damages. The
specific issues between the parties generally concerned who had the right to manage
the subdivision, collect assessments from homeowners, and exercise control over
common areas such as the subdivision’s recreation room and ballroom.
On February 1, 2011, the trial on the merits began. Appellants presented their
case for approximately five days. On February 8, 2011, the parties recessed the trial,
excused the jury, and orally stated a settlement agreement on the record before the trial
court. The reporter’s record shows the following:
THE COURT: All right. I understand that you have pretty much resolved
all issues with the exception of one issue that is still outstanding.
Now, do you want to just tell the Court —
COUNSEL FOR APPELLANTS: That is correct.
THE COURT: —which that issue is so that I can make a determination on
that issue?
COUNSEL FOR APPELLEES: Yes, [y]our Honor. Mr. Kanan, as he
testified, and Michelle Huebe [3]—they testified there are seven lots where
either they or their family members live that are not paying assessments,
and we have agreed that we, as the homeowners association, will waive
3
According to the record, Huebe worked for Management and supervised employees of the
subdivision’s recreation center..
3
any past due assessments that may be owed on those seven lots. But the
disagreement is we want them to start paying assessments beginning
March 1st, and Mr. Mancias’ clients want to not pay assessments until
three years from now.
COUNSEL FOR APPELLANTS: That is the disagreement, Judge.
THE COURT: That is the disagreement, and that is more of a legal issue
that the Court would have to address —
COUNSEL FOR APPELLANTS: It is.
THE COURT: — as to the payment of those — of these seven lots?
COUNSEL FOR APPELLANTS: Yes.
THE COURT: All right. And that is what is basically keeping it from
getting resolved?
COUNSEL FOR APPELLEES: I think so, Your Honor.
THE COURT: All right. I will make a decision on that, and then just all
other matters being resolved I will make a decision on this and the case
will be over and done with.
....
THE COURT: All right. Ladies and gentlemen, it is my understanding that
there is an agreement with the exception of one issue that I am going to
make a decision on right now. I will allow your attorney . . . to read it into
the record as far as the agreement so that we can have it on the record,
and then this case should be over and done with.
....
THE COURT: All right. The issue with respect to the seven lots — the
plaintiff is offering to pay until three years from now and the defendants
want it to be paid immediately. The decision of the Court will be that he
start[s] paying in one year and a half. All right. So he does not get what
he wants. You know, it is halfway. In one year and a half, he needs to —
he will have to start paying as opposed to three years.
All right. I am going to allow you to read the agreement into the
record. . . .
....
4
COUNSEL FOR APPELLEES: . . . The homeowners association will take
over control of the common areas and collecting the assessments and the
expenditures on March 1, 2011. An election of all officers and directors for
the homeowners association will take place in December of 2011. At the
election, Heblen Kanan or any of his entities will not have a vote at the
election.
The title to the rec hall or those ballrooms will be transferred by
warranty deed transferring clear title to the rec room and ballrooms to the
Plantation Homeowners Association. The warranty deed will have a
reservation that Mr. Kanan or Pharr Plantation, Inc. will have the right to
use the rec hall on Friday nights and Saturday nights for three years. The
homeowners association will . . . have the right to use the rec hall the way
they had been doing it in the past, either on Friday morning or Saturday
morning, for their pancake meetings or some meetings that they have, and
the meetings generally end around 9:00 or 9:30. And by 11:00, they
should be available for Mr. Kanan to use when they clean everything up.
Mr. Kanan or his entities will not take any funds from the
assessments to pay any debts that he claims is owed to him. Mr. Kanan
or his entities use the ballroom on Friday night or Saturday night for those
three years, the — any expenses or — and/or utilities will be prorated
between the homeowners association and Mr. Kanan or his entity.
And as the Court has mentioned, those seven lots that do not pay
assessments right now, as Mr. Kanan and Michelle Huebe testified, will
not owe any past due amounts and will not start incurring assessments
until one year and a half from now.
All employees of the management company will be paid up until
March 1, 2011 and will be terminated as of February 28, 2011.
There is an office on the right side as you go into the ballroom, and
that is the office that Mr. Kanan will be able to use during those three
years to manage the ballrooms.
This will be a complete settlement for all parties. Each party will
pay their own attorney’s fees. Any equipment, computers, telephone
systems and security system that are on the property/common areas shall
remain on the property and will be owned by the homeowners association.
At this point in the proceedings, the individual homeowners raised various
questions regarding the scope of the settlement. One question that was raised
5
concerned Kanan’s right to use the recreation room and ballroom on nights other than
Friday or Saturday, the right to profits from such use, and scheduling usage of the
recreation room and ballroom between the parties on those nights. After some colloquy
between the parties, counsel, and court, it was determined that Kanan could use the
recreation room and ball room on other nights of the week when nothing was otherwise
scheduled and retain the profits, and that the parties bore equal responsibility for
communicating an effective calendar for use of the property. It was also determined
that the homeowners association could similarly use the recreation room and ball room
on Friday and Saturday nights that Kanan did not schedule events. At the conclusion of
the hearing, the homeowners and Kanan agreed to the settlement, and the court “noted
on the record that it is an agreed settlement by all parties involved and their attorneys
are present.” The court directed the parties to “work on the basic . . . description of
what you agreed and put it in writing, and I will approve it and sign it.”
On March 1, 2011, the day that the parties had agreed that the homeowners
association was going to take control over the common areas and collecting
assessments, appellants filed an emergency motion to abate enforcement of the
agreement. According to the motion to abate, appellees had “unilaterally interpreted the
vague and overbroad language read into the record . . . as a basis for their one sided
actions to interfere with access to the subdivision.” Appellants further complained that
appellees had improperly begun to set up committees and procedures for an upcoming
election and that the homeowners association was not “legally created.” In response,
on March 3, 2011, appellants filed a motion to enforce settlement agreement and for
6
temporary injunction. On March 15, 2011, appellants filed “Plaintiffs’ Revocation of
Purported Agreement.”
The trial court held a hearing on the foregoing matters on March 15, 2011 and
took these issues under advisement. Both appellants and appellees submitted
supplemental briefing. On March 24, 2011, the trial court entered judgment on the
settlement agreement. The judgment provides, in pertinent part:
After considering the pleadings on file and the argument of counsel,
it appears to the Court that the parties entered into a binding Rule 11
Settlement Agreement on February 8, 2011. Plaintiffs/Counter-
Defendants/Third Party Defendant[s] PHARR PLANTATION
MANAGEMENT CO., LTD, PHARR PLANTATION, INC., AND HEBLEN
KANAN, having withdrawn their consent to an agreed judgment, the Court
is prohibited from entering an agreed judgment; however, the Court can
enter judgment enforcing the Rule 11 Settlement Agreement and rule that
the Rule 11 Settlement Agreement is a complete bar to all causes of
action pending in this cause, except for the enforcement of the Rule 11
Settlement Agreement.
The Court hereby takes judicial notice of the Settlement Agreement
dictated into the record on February 8, 2011, and of the transcript of said
hearing attached to the Motion to Enforce Settlement Agreement and to
the Brief in Support of Judgment Enforcing Settlement Agreement filed by
PLANTATION HOMEOWNERS ASSOCIATION, INC., et al. The Court
finds that the Settlement Agreement is not ambiguous and contains all of
the material terms agreed to by the parties. The Court considers the
arguments of counsel and the pleadings of Plaintiffs/Counter-
Defendants/Third Party Defendant[s] PHARR PLANTATION
MANAGEMENT CO., LTD, PHARR PLANTATION, INC., AND HEBLEN
KANAN wherein they admit that they have breached the Settlement
Agreement by their revocation of the Settlement Agreement.
The judgment recites that the settlement agreement was a binding Rule 11 Agreement
and includes specific recitals incorporating the detailed terms of the agreement.
Appellants raise one issue with multiple sub-issues. By their main issue,
appellants contend the trial court abused its discretion by granting appellees’ motion to
enforce settlement, denying appellants’ motion for new trial, and rendering judgment on
7
the parties’ agreement because the agreement fails to comply with Rule 11 of the Texas
Rules of Civil Procedure. By six sub-issues, appellants contend that the Rule 11
Agreement is not enforceable because: (1) appellants revoked their consent to it before
the trial court rendered judgment; (2) it does not comply with basic contract law
principles; (3) it was made orally but purports to pass title to property; (4) it was made
orally but is not to be performed within one year; (5) the trial court, rather than the
parties, supplied the terms and details of the agreement; and (6) appellees failed to
provide proper pleading and proof.
II. APPLICABLE LAW
Rule 11 of the Texas Rules of Civil Procedure states, “[u]nless otherwise
provided in these rules, no agreement between attorneys or parties touching any suit
pending will be enforced unless it be in writing, signed and filed with the papers as part
of the record, or unless it be made in open court and entered of record.” TEX. R. CIV. P.
11; see Cunningham v. Zurich Am. Ins. Co., 352 S.W.3d 519, 525 (Tex. App.—Fort
Worth 2011, pet. denied). Rule 11 agreements “are contracts relating to litigation.”
Trudy’s Tex. Star, Inc. v. City of Austin, 307 S.W.3d 894, 914 (Tex. App.—Austin 2010,
no pet.). A settlement agreement must comply with Rule 11 to be enforceable. Padilla
v. LaFrance, 907 S.W.2d 454, 460 (Tex. 1995); Kennedy v. Hyde, 682 S.W.2d 525, 528
(Tex. 1984); Broderick v. Kaye Bassman Int’l Corp., 333 S.W.3d 895, 904–05 (Tex.
App.—Dallas 2011, no pet.).
The rule is an effective tool for finalizing settlements by objective manifestation
so that the agreements themselves do not become sources of controversy. Knapp
Med. Ctr. v. De La Garza, 238 S.W.3d 767, 768 (Tex. 2007). The purpose of Rule 11 is
8
to ensure that agreements of counsel affecting the interests of their clients are not left to
the fallibility of human recollection and that the agreements themselves do not become
sources of controversy. Padilla, 907 S.W.2d at 464 (Enoch, J., dissenting); ExxonMobil
Corp. v. Valence Operating Co., 174 S.W.3d 303, 309 (Tex. App.—Houston [1st Dist.]
2005, pet. denied). The filing requirement creates the imprimatur of a court record.
Kennedy, 682 S.W.2d at 528; ExxonMobil Corp., 174 S.W.3d at 309. A trial court has a
ministerial duty to enforce a valid Rule 11 agreement. In re Guardianship of White, 329
S.W.3d 591, 592 (Tex. App.—El Paso 2010, no pet.); Scott-Richter v. Taffarello, 186
S.W.3d 182, 189 (Tex. App.—Fort Worth 2006, pet. denied); ExxonMobil Corp., 174
S.W.3d at 309.
As with any other contract, our primary objective in construing a Rule 11
agreement is to ascertain and give effect to the intentions the parties have objectively
manifested in the written instrument. Trudy’s Tex. Star, Inc., 307 S.W.3d at 914; see
also State Farm Lloyds v. Gulley, No. 04-12-00057-CV, 2012 Tex. App. LEXIS 7515, at
**10–11 (Tex. App.—San Antonio Sept. 5, 2012, no pet.). We interpret Rule 11
agreements based on the intention of the parties from the language of the entire
agreement in light of the surrounding circumstances, including the state of the
pleadings, the allegations therein, and the attitude of the parties with respect to the
issues. Garza v. Villarreal, 345 S.W.3d 473, 479 (Tex. App.—San Antonio 2011, pet.
denied).
III. COMPLIANCE WITH RULE 11
By their main issue, appellants contend the trial court abused its discretion by
granting appellees’ motion to enforce settlement, denying appellants’ motion for new
9
trial, and rendering judgment on the parties’ agreement because the agreement fails to
comply with Rule 11 of the Texas Rules of Civil Procedure. In connection with this
issue, appellants contend that the settlement agreement was not “entered of record”
before it was sought to be enforced. In short, appellants contend that the phrase
“entered of record” means that a Rule 11 Agreement must be described in a judgment
or court order prior to attempts to enforce it. Appellants assert that City of Houston v.
Clear Creek Basin Authority supports their assertion. 589 S.W.2d 671 (Tex. 1979). In
that case, the Texas Supreme Court held that “Rule 11 is satisfied if the oral waiver or
agreement made in open court is described in the judgment or an order of the court.
Rule 11 expressly approves this procedure.” Id. at 677.
We disagree with appellants’ interpretation of Rule 11 and that City of Houston
supports their argument. Rule 11 provides that agreements “between attorneys or
parties touching any suit pending” will be enforced where “made in open court and
entered of record.” TEX. R. CIV. P. 11. To be “entered of record” includes the dictation
of the agreement into the trial court record. See, e.g., Sitaram v. Aetna U.S.
Healthcare, 152 S.W.3d 817, 824 (Tex. App.—Texarkana 2004, no pet.). Specifically,
the requirements for a Rule 11 agreement are satisfied “when the terms of the
agreement [are] dictated before a certified shorthand reporter, and the record reflect[s]
who [is] present, the terms of the settlement, and the parties’ acknowledgement of the
settlement.” Cantu v. Moore, 90 S.W.3d 821, 824 (Tex. App.—San Antonio 2002, pet.
denied); see also Juarez v. Laredo Inv. Props., No. 04-10-00821-CV, 2011 Tex. App.
LEXIS 7616, at **8–9 (Tex. App.—San Antonio Sept. 21, 2011, no pet.) (mem. op.);
Columbia Rio Grande Healthcare, L.P. v. De Leon, No. 13-09-00496-CV, 2011 Tex.
10
App. LEXIS 431, at *10 (Tex. App.—Corpus Christi Jan. 20, 2011, no pet.) (mem. op.).
The settlement agreement orally dictated to the trial court in this case meets these
requirements. Accordingly, we overrule appellants’ main issue.
IV. REVOCATION
By their first sub-issue, appellants contend that the Rule 11 Agreement is not
enforceable because the trial court rendered judgment on the Rule 11 Agreement after
appellants revoked consent to the agreement. According to appellants, the terms of the
Rule 11 Agreement were read into the record on February 8, 2011, they revoked
consent on March 15, 2011, and the trial court did not render judgment until March 29,
2011. Appellants cite Moseley v. Emco Machine Works Co., 890 S.W.2d 529 (Tex.
App.—El Paso 1994, no writ), in support of their contention that a judgment cannot be
rendered on an agreement, even one entered in compliance with Texas Rule of Civil
Procedure 11, when a party withdraws consent to the agreement before the judgment is
rendered. See id. at 531; see also State v. Macias, 791 S.W.2d 325, 329 (Tex. App.—
San Antonio 1990, pet. ref’d).
Even where parties enter into a valid Rule 11 agreement to settle a case, the
parties must consent to the agreement at the time the trial court renders judgment.
Kennedy, 682 S.W.2d at 528; see Burnaman v. Heaton, 150 Tex. 333, 240 S.W.2d 288,
291 (1951). The trial court cannot render an agreed judgment after a party has
withdrawn its consent to a settlement agreement. Padilla, 907 S.W.2d at 461–62;
Quintero v. Jim Walter Homes, Inc., 654 S.W.2d 442, 444 (Tex. 1983). “When a trial
court has knowledge that one of the parties to a suit does not consent to a judgment,
the trial court should refuse to sanction the agreement by making it the judgment of the
11
court.” Quintero, 654 S.W.2d at 444; Burnaman, 240 S.W.2d at 291; see Gamboa v.
Gamboa, 383 S.W.3d 263, 269 (Tex. App.—San Antonio 2012, no pet.).
Nevertheless, a written settlement agreement may be enforced as a contract
even though one party withdraws consent before judgment is rendered on the
agreement. Mantas v. Fifth Ct. of Appeals, 925 S.W.2d 656, 658 (Tex. 1996); Padilla,
907 S.W.2d at 462; Gamboa, 383 S.W.3d at 269; Staley v. Herblin, 188 S.W.3d 334,
336 (Tex. App.—Dallas 2006, pet. denied); see Gunter v. Empire Pipeline Corp., 310
S.W.3d 19, 22 (Tex. App.—Dallas 2009, pet. denied); ExxonMobil Corp., 174 S.W.3d at
309. The trial court’s “decision whether a settlement agreement should be enforced as
an agreed judgment or must be the subject of a contract action requiring additional
pleadings and proof is subject to the abuse of discretion standard of review.” Baylor
Coll. of Med. v. Camberg, 247 S.W.3d 342, 345–46 (Tex. App.—Houston [14th Dist.]
2008, no pet.); see Mantas, 925 S.W.2d at 659; Staley, 188 S.W.3d at 336.
In the instant case, the trial court did not enter an agreed judgment. In fact, the
judgment specifically recognizes that the trial court is “prohibited from entering an
agreed judgment” given that appellants had withdrawn their consent. Accordingly, we
overrule appellants’ first sub-issue.
V. CONTRACT
By their second sub-issue, appellants contend that the Rule 11 Agreement is not
enforceable because it does not comply with basic contract law principles. Appellants
specifically contend that the Rule 11 Agreement “fails for uncertainty, does not contain
all essential terms, and is not complete in every material detail.” In connection with this
issue, appellants contend that the Rule 11 Agreement does not include an “accurate
12
description, legal description, or metes and bounds description” of the real property that
encompasses the recreation hall, the ballroom, or the “seven lots” where appellants
must pay assessments. Appellants further assert that the Rule 11 Agreement lacks a
description or itemized list of the “ballroom furniture” or the “equipment, telephone
systems, and security system.” Appellants also argue that the phrase “take over
control” as it pertains to the common areas and collecting assessments and
expenditures is undefined and overbroad.
The essential or material terms of a contract, whether oral or written, must be
definite, certain, and clear and, if they are not, the contract is unenforceable. T. O.
Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 221 (Tex. 1992); Southern v.
Goetting, 353 S.W.3d 295, 299–01 (Tex. App.—El Paso 2011, pet. denied); Meru v.
Huerta, 136 S.W.3d 383, 390 (Tex. App.—Corpus Christi 2004, no pet.); see, e.g.,
Loeffler v. Lytle ISD, 211 S.W.3d 331, 346 (Tex. App.—San Antonio 2006, pet. denied)
(holding that a contract to sell real property was unenforceable because it did not
contain a sufficient description of land subject to contract). The issue of whether a Rule
11 settlement agreement fails for lack of an essential term is generally a question of law
to be determined by the court. See Southern, 353 S.W.3d at 300; Broderick, 333
S.W.3d at 904–05; Martin v. Martin, 326 S.W.3d 741, 746 (Tex. App.—Texarkana 2010,
pet. denied); Ronin v. Lerner, 7 S.W.3d 883, 888 (Tex. App.—Houston [1st Dist.] 1999,
no pet.); Cantu, 90 S.W.3d at 825; Montanaro v. Montanaro, 946 S.W.2d 428 (Tex.
App.—Corpus Christi 1997, no writ).
Essential or material terms are those terms that the parties “would reasonably
regard as vitally important elements of their bargain.” Potcinske v. McDonald Prop.
13
Invs., Ltd., 245 S.W.3d 526, 531 (Tex. App.—Houston [1st Dist.] 2007, no pet.); see
Southern, 353 S.W.3d at 300; see also Gen. Metal Fabricating Corp. v. Stergiou, No.
01-11-00460-CV, 2013 Tex. App. LEXIS 1453, at **10–15 (Tex. App.—Houston [1st
Dist.] Feb. 14, 2013, no pet. h.) (op. on reh’g). “Whether a term forms an essential
element of a contract depends primarily upon the intent of the parties.” Domingo v.
Mitchell, 257 S.W.3d 34, 40–41 (Tex. App.—Amarillo 2008, pet. denied). As long as the
parties agree as to the essential or material terms of a contract, the agreement may
leave other non-essential provisions open for future adjustment and agreement. See
Scott v. Ingle Bros. Pac., Inc., 489 S.W.2d 554, 555 (Tex. 1972); Fiduciary Fin. Servs. of
the Sw., Inc. v. Corilant Fin., L.P., 376 S.W.3d 253, 256 (Tex. App.—Dallas 2012, pet.
denied); E.P. Towne Ctr. Partners, L.P. v. Chopsticks, Inc., 242 S.W.3d 117, 122 (Tex.
App.—El Paso 2007, no pet.); Ski River Dev., Inc. v. McCalla, 167 S.W.3d 121, 133
(Tex. App.—Waco 2005, pet denied); Mabon Ltd. v. Afri-Carib Enters., Inc., 29 S.W.3d
291, 300 (Tex. App.— Houston [14th Dist.] 2000, no pet.). In some circumstances, an
agreement may be upheld by supplying missing terms, such as implying a reasonable
price. See Bendalin v. Delgado, 406 S.W.2d 897, 900 (Tex. 1966); see also Gen. Metal
Fabricating Corp., 2013 Tex. App. LEXIS 1453, at **10–15.
We first address appellants’ arguments regarding the recreation room, the
ballroom, and the seven lots where appellants must pay assessments. The pleadings in
this lawsuit expressly identify the realty at issue as the Plantation South Subdivision,
Hidalgo County, Texas. The subdivision is more particularly described in the
Declaration of Covenants, Conditions, and Restrictions, which is filed of record in
Hidalgo County.
14
“A writing need not contain a metes and bounds property description to be
enforceable.” Tex. Builders v. Keller, 928 S.W.2d 479, 481 (Tex. 1996). A property
description is sufficient if the writing furnishes within itself, or by reference to some other
existing writing, the means or data by which the particular land to be conveyed may be
identified with reasonable certainty. See AIC Mgmt. v. Crews, 246 S.W.3d 640, 645
(Tex. 2008); see also Broaddus v. Grout, 152 Tex. 398, 402, 258 S.W.2d 308, 309
(1953). The description of the land may be obtained from documents that are prepared
in the course of the transaction, even if those documents are prepared after the contract
for sale is entered into. See Fort Worth Indep. Sch. Dist. v. City of Fort Worth, 22
S.W.3d 831, 840 (Tex. 2000); see also Dittman v. Cerone, No. 13-11-00196-CV, 2013
Tex. App. LEXIS 2343, at **10–11 (Tex. App.—Corpus Christi Mar. 7, 2013, no pet. h.)
(mem. op.). Extrinsic evidence may be used “only for the purpose of identifying the
[property] with reasonable certainty from the data” contained in the contract, “not for the
purpose of supplying the location or description of the [property].” Pick v. Bartel, 659
S.W.2d 636, 637 (Tex. 1983); see Lowell v. Miguel R., 293 S.W.3d 764, 767 (Tex.
App.—San Antonio 2009, pet. denied). “[I]f there appears in the instrument enough to
enable one by pursuing an inquiry based upon the information contained in the deed to
identify the particular property to the exclusion of others, the description will be held
sufficient.” Templeton v. Dreiss, 961 S.W.2d 645, 658 (Tex. App.—San Antonio 1998,
pet. denied); see Lowell, 293 S.W.3d at 767. “Even when ‘the record leaves little doubt
that the parties knew and understood what property was intended to be conveyed, . . .
the knowledge and intent of the parties will not give validity to the contract and neither
will a plat made from extrinsic evidence.’” Reiland v. Patrick Thomas Props., 213
15
S.W.3d 431, 437 (Tex. App.—Houston [1st Dist.] 2006, pet. denied) (quoting Morrow v.
Shotwell, 477 S.W.2d 538, 540 (Tex. 1972)).
We conclude that the settlement agreement here describes the property to be
conveyed with reasonable certainty, particularly given the recorded and platted nature
of the subdivision, the numerous pleadings that describe the disputed property, and the
discovery exchanged between the parties. One can identify the ballroom and recreation
room to the exclusion of other property based on the information contained in the
agreement and subdivision plat. See Templeton, 961 S.W.2d at 658. Further, to the
extent that appellants appear to contend that the agreement pertaining to the seven lots
at issue should be subject to the requirements for land descriptions sufficient to support
a contract, we note that the agreement does not encompass the conveyance of title to
those properties, but only reaches the payment of assessments on those properties for
a finite period of time. Moreover, we note that the matter of assessments for those
properties was the subject of trial testimony from Kanan and Huebe as referenced
during the settlement hearing. The specific properties subject to the agreement
regarding assessments are ascertainable by reference to the subdivision platting and
the trial record.
Appellants also contend that the settlement agreement is unenforceable because
the agreement does not list the specific items included as ballroom furniture or
“equipment, telephone systems, and security system.” Appellants do not point to any
dispute, or potential dispute, regarding any items subject to the agreement. We
conclude that the specific chairs or telephones at issue are not essential or material
16
terms which are vitally important to the agreement. See Potcinske, 245 S.W.3d at 531;
Southern, 353 S.W.3d at 300.
Finally, appellants argue that the phrase “take over control” as it pertains to the
common areas and collecting assessments and expenditures is undefined and
overbroad. As stated previously, our primary objective in construing a Rule 11
agreement is to ascertain and give effect to the intentions the parties have objectively
manifested in the written instrument, see Trudy’s Tex. Star, Inc., 307 S.W.3d at 914,
and we interpret the intention of the parties based on the language of the entire
agreement in light of the surrounding circumstances, including the state of the
pleadings, the allegations therein, and the attitude of the parties with respect to the
issues. See Garza, 345 S.W.3d at 479. Contract terms are given their plain, ordinary,
and generally accepted meanings unless the contract itself shows them to be used in a
technical or different sense. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 662
(Tex. 2005); Heritage Res., Inc.v. NationsBank, 939 S.W.2d 118, 121, 39 Tex. Sup. Ct.
J. 537 (Tex. 1996). Control is generally defined as “to exercise [restraining] or directing
influence over; to have power over.” See In re Lehman Bros. Merch. Banking Ptnrs. IV
L.P., 293 S.W.3d 349, 352–53 (Tex. App.—Dallas 2009, orig. proceeding) (citing
WEBSTER’S THIRD NEW INT’L DICTIONARY 496 (1993)). Appellants have not shown that
the settlement agreement uses this term in a “technical or different sense.” See
Valance Operating Co., 164 S.W.3d at 662. We conclude that the terminology used in
the agreement is used in its ordinary and generally accepted meanings. We overrule
appellants’ second sub-issue.
VI. STATUTE OF CONVEYANCES AND STATUTE OF FRAUDS
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Appellants third and fourth sub-issues contend that the Rule 11 Agreement is not
enforceable because it violates the statute of conveyances and the statute of frauds.
Specifically, by their third sub-issue, appellants contend that the Rule 11 Agreement is
not enforceable because it was made orally, but purports to pass title to property without
being signed and reduced to writing as required by the statute of conveyances. See
TEX. PROP. CODE ANN. § 5.021 (West 2004). By their fourth sub-issue, appellants
similarly contend that the Rule 11 Agreement is not enforceable because it was made
orally but is not to be performed within one year, or alternatively, because it constitutes
a contract for sale of real estate or a lease agreement concerning real estate longer
than one year, is not in writing, and is not signed by anyone. See TEX. BUS. & COM.
CODE ANN. § 26.01 (West 2009).
Under the statute of conveyances, a “conveyance of an estate of inheritance, a
freehold, or an estate for more than one year, in land and tenements, must be in writing
and must be subscribed and delivered by the conveyor or by the conveyor’s agent
authorized in writing.” See TEX. PROP. CODE ANN. § 5.021. The statute of frauds
provides, in relevant part:
(a) A promise or agreement described in subsection (b) of this section
is not enforceable unless the promise or agreement, or a
memorandum of it, is
(1) in writing; and
(2) signed by the person to be charged with the promise or
agreement or by someone lawfully authorized to sign for
him.
(b) Subsection (a) of this section applies to:
....
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(4) a contract for the sale of real estate;
(5) a lease of real estate for a term longer than one year;
(6) an agreement which is not to be performed within one year
from the date of making the agreement.
TEX. BUS. & COM. CODE ANN. § 26.01.
Texas Rule of Civil Procedure 94 expressly requires the pleading of the statute of
frauds and “any other matter constituting an avoidance or affirmative defense,” such as
the statute of conveyances. TEX. R. CIV. P. 94; see Phillips v. Phillips, 820 S.W.2d 785,
791 (Tex. 1991). Such matters must be pleaded or they are waived. See TEX. R. CIV.
P. 94; Kinnear v. Tex. Comm'n on Human Rights, 14 S.W.3d 299, 300 (Tex. 2000);
Swinehart v. Stubbeman, 48 S.W.3d 865, 875 (Tex. App.—Houston [14th Dist.] 2001,
pet. denied); Engelman Irrigation Dist. v. Shields Bros., Inc., 960 S.W.2d 343, 353 (Tex.
App.—Corpus Christi 1997), pet. denied, 989 S.W.2d 360 (Tex. 1998) (per curiam).
Appellants raised neither the statute of frauds nor the statute of conveyances in their
pleadings below nor did they otherwise argue these issues to the trial court. See
generally TEX. R. APP. P. 33.1. Accordingly, we overrule appellants’ third and fourth
sub-issues.
VIII. INCOMPLETE
By their fifth sub-issue, appellants contend that the Rule 11 Agreement is not
enforceable because the trial court, rather than the parties, supplied the terms and
details of the agreement concerning: (1) the language of the deed regarding a life
estate or reservation, (2) the inception of assessment payments to be made by Kanan’s
family members who occupy seven lots on the premises; and (3) the communication
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regarding and cooperative scheduling and use of the premises by appellants and
appellees.
While Texas courts favor validating transactions rather than voiding them, a court
may not create a contract where none exists and generally may not add, alter, or
eliminate essential terms. Kelly v. Rio Grande Computerland Group, 128 S.W.3d 759,
766 (Tex. App.—El Paso 2004, no pet.); Oakrock Exploration Co. v. Killam, 87 S.W.3d
685, 690 (Tex. App.—San Antonio 2002, pet. denied); see also T.O. Stanley Boot Co.,
Inc., 847 S.W.2d at 222 (observing that courts cannot supply material contract terms);
Argo Data Res. Corp. v. Shagrithaya, 380 S.W.3d 249, 274 (Tex. App.—Dallas 2012,
no pet.) (“Although Texas courts favor validating contracts, we may not create one
where none exists.”); see also Gen. Metal Fabricating Corp., 2013 Tex. App. LEXIS
1453, at **10–15.
A review of the transcript of the settlement hearing as quoted herein shows that
appellants agreed that whether Kanan’s relatives had to start paying assessments
immediately or in three years was a legal issue, which the parties submitted to the trial
court for decision. With regard to the remaining issues, that is, the terminology or
specific language to be used in the deeds and the details regarding the cooperative use
of the common areas, assuming without deciding that each of the matters raised with
regard to this issue constitute material or essential terms of the agreement, the record
shows that each of these matters was discussed in open court in a full colloquy between
counsel for both parties and the trial court prior to the parties agreeing, on record, to the
settlement terms as discussed. In short, this is not a case where the trial court added,
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omitted, or altered terms of a settlement agreement. Accordingly, we overrule
appellants’ fifth sub-issue.
IX. PLEADING AND PROOF
By their sixth and final sub-issue, appellants contend that the Rule 11 Agreement
is not enforceable because appellees failed to provide proper pleading and proof to
support enforcement of the agreement. Appellants contend that appellees failed to
allege in their pleadings that appellants had revoked their consent to the agreement or
breached the agreement.
Where consent to a Rule 11 agreement has been withdrawn, a court may
enforce it through a separate breach of contract claim which is subject to the normal
rules of pleading and proof. See Padilla, 907 S.W.2d at 462 (“An action to enforce a
settlement agreement [pursuant to Rule 11], where consent is withdrawn, must be
based on proper pleading and proof.”); see also Mantas, 925 S.W.2d at 658; Staley,
188 S.W.3d at 336; ExxonMobil Corp., 174 S.W.3d at 309. Thus, a claim to enforce a
disputed settlement agreement should be raised through an amended pleading or
counterclaim asserting breach of contract. Padilla, 907 S.W.2d at 462; Staley, 188
S.W.3d at 336; Gamboa, 383 S.W.3d at 269–70. Such a pleading must contain a short
statement of the cause of action sufficient to give fair notice of the claim involved,
including an allegation of a contractual relationship between the parties and the
substance of the contract which supports the pleader’s right to recover. Cadle Co. v.
Castle, 913 S.W.2d 627, 630–01 (Tex. App.—Dallas 1995, writ denied). A motion to
enforce can be considered a sufficient pleading to raise a breach of contract claim in a
settlement agreement case. See Ford Motor Co. v. Castillo, 279 S.W.3d 656, 663 (Tex.
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2009); Twist v. McAllen Nat’l Bank, 248 S.W.3d 351, 361 (Tex. App.—Corpus Christi
2007, orig. proceeding [mand. denied]); Bayway Servs., Inc. v. Ameri-Build Constr.,
L.C., 106 S.W.3d 156, 160 (Tex. App.—Houston [1st Dist.] 2003, no pet.); Neasbitt v.
Warren, 105 S.W.3d 113, 118 (Tex. App.—Fort Worth 2003, no pet.); see also Martinez
v. Farmers Ins. Exch., No. 13-09-00648-CV, 2011 Tex. App. LEXIS 5810, at **7–8 (Tex.
App.—Corpus Christi July 28, 2011, no pet.) (mem. op.). If the motion satisfies the
general purposes of pleadings, which is to give the other party fair notice of the claim
and the relief sought, it is sufficient to allow the trial court to render judgment enforcing
the settlement. Twist, 248 S.W.3d at 361; Bayway Servs., Inc., 106 S.W.3d at 160;
Neasbitt, 105 S.W.3d at 117.
In the instant case, the pleadings relevant to the issue of enforcement were:
appellants’ emergency motion to abate enforcement of the agreement; appellees’
motion to enforce the settlement agreement and for a temporary injunction; appellants’
revocation of the purported agreement; appellants’ brief in support of their notice of
revocation and in opposition to the motion to enforce; and appellees’ response to
appellants’ brief.
Appellees’ pleadings sought enforcement of the settlement agreement and an
injunction restraining appellants from interfering with the enforcement of the settlement
agreement. These pleadings were sufficient to allow the trial court to render judgment
enforcing the settlement agreement as a contract. See Ford Motor Co., 279 S.W.3d at
663; Twist, 248 S.W.3d at 361; Bayway Servs., Inc., 106 S.W.3d at 160; Neasbitt, 105
S.W.3d at 118. Further, the parties submitted the issues of breach and enforcement of
the Rule 11 Agreement to the trial court with full briefing. Appellants did not object or
22
otherwise assert that they were entitled to summary judgment proceedings or trial on
the issue of enforcement. See, e.g., Gamboa, 383 S.W.3d at 269–70; Gunter, 310
S.W.3d at 22; Baylor Coll. of Med., 247 S.W.3d at 348; Staley, 188 S.W.3d at 336; see
also In re Build by Owner, LLC, No. 01-11-00513-CV, 2011 Tex. App. LEXIS 7976, at
**15–18 (Tex. App.—Houston [1st Dist.] Oct. 6, 2011, orig. proceeding) (mem. op).
Instead, at the hearing on the motion to enforce the settlement agreement, counsel for
appellants informed the court that “it really is truly a legal issue” regarding ‘whether or
not we have an enforceable agreement” and told the trial court that appellants would
provide it with a proposed order. A litigant cannot ask something of a court and then
complain that the court committed error in giving it to him. Ne. Tex. Motor Lines, Inc. v.
Hodges, 138 Tex. 280, 158 S.W.2d 487, 488–89 (1942); Naguib v. Naguib, 137 S.W.3d
367, 375 (Tex. App.—Dallas 2004, pet. denied); see also Martinez, 2011 Tex. App.
LEXIS 5810, at **7–8. Based on the specific facts of this case, we conclude that the
pleadings before the trial court gave appellants fair notice of appellees’ claims and the
relief sought. We overrule appellants’ sixth and final sub-issue.
X. CONCLUSION
Having overruled appellants’ issues, we affirm the judgment of the trial court.
___________________
ROGELIO VALDEZ
Chief Justice
Delivered and filed the
25th day of April, 2013.
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