Bion Construction, Inc. v. Grande Valley Homes, LLC ( 2009 )

MEMORANDUM OPINION
No. 04-09-00060-CV
BION CONSTRUCTION, INC.,
Appellant
v.
GRANDE VALLEY HOMES, LLC,
Appellee
From the 57th Judicial District Court, Bexar County, Texas
Trial Court No. 2007-CI-06065
Honorable Martha Tanner, Judge Presiding
Opinion by: Rebecca Simmons, Justice
Sitting: Sandee Bryan Marion, Justice
Rebecca Simmons, Justice
Marialyn Barnard, Justice
Delivered and Filed: December 9, 2009
AFFIRMED
Appellant Bion Construction, Inc. sued Appellee Grande Valley Homes, LLC for breach
of contract as well as breach of an alleged mediated settlement agreement. This appeal arises
from a final judgment wherein the trial court found no liability on behalf of Grande Valley and
awarded Bion $100.00 in damages resulting from the failed real estate transaction. Because the
evidence supports the trial court’s findings, we affirm the judgment of the trial court.
04-09-00060-CV
BACKGROUND
In the “Purchase and Sale Agreement” (PSA) at issue, the seller, Bion, is a successor-in-
interest land developer, and Grande Valley is the purchaser. Under the PSA, Bion was to
develop approximately fifty-acres of unimproved real property into 245 residential lots to be sold
to Grande Valley. 1 Once Bion substantially completed the development, Bion would convey
thirty lots every ninety-one days to the purchaser in official closings. Thus, after the first
closing, the next closing would automatically be ninety-one days later.
The first closing took place on December 13, 2006. Thereafter the parties entered into
another amendment to the PSA scheduling the second closing for no later than February 10,
2007. The second closing is the transaction at issue in this suit. The parties ran into further
problems arranging for the second closing. Bion sent Grande Valley a number of default notices
that included rights to cure. Grande Valley tendered its purchase money on March 21, 2007
claiming it was in accordance with Bion’s request. Bion claimed it had previously terminated
the PSA prior to March 21. Bion filed suit, but before serving Grande Valley, the parties
participated in a mediation. However, there is a dispute regarding whether a settlement
agreement was reached. After a bench trial, in its findings of fact and conclusions of law, the
trial court found Grande Valley did not breach the agreement and timely asserted its right to
cure.
STANDARD OF REVIEW
In a bench trial, the trial court, as fact-finder, is the sole judge of the credibility of the
witnesses. Sw. Bell Media, Inc. v. Lyles, 825 S.W.2d 488, 493 (Tex. App.—Houston [1st Dist.]
1992, writ denied). The trial court’s findings of fact have the same force and dignity as a jury’s
1
The contract was initially between Texas PMR, Inc. and Grande Valley Homes. Approximately six
months after signing the agreement, PMR assigned the contract to Bion Construction.
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verdict upon jury questions. See Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994).
However, the findings of fact are not conclusive when a complete reporter’s record appears in
the record. Tucker v. Tucker, 908 S.W.2d 530, 532 (Tex. App.—San Antonio 1995, writ
denied).
When the trial court’s findings involve questions of law and fact, the appellate court
reviews them for an abuse of discretion. Pony Express Courier Corp. v. Morris, 921 S.W.2d
817, 820 (Tex. App.—San Antonio 1996, no writ). In applying the standard, the reviewing court
defers to the trial court’s factual determinations if they are supported by the evidence and
reviews its legal determinations de novo. Id. Unless they are erroneous as a matter of law,
conclusions of law will not be reversed, but rather, will be upheld on appeal if the judgment can
be sustained on any legal theory supported by the evidence. Tex. Dep’t of Pub. Safety v.
Stockton, 53 S.W.3d 421, 423 Tex. App.—San Antonio 2001, pet. denied).
In analyzing a legal sufficiency challenge, an appellate court reviews the evidence in the
light most favorable to the verdict in determining whether the evidence at trial would enable
reasonable and fair-minded people to reach the verdict under review. City of Keller v. Wilson,
168 S.W.3d 802, 821-22, 827 (Tex. 2005). In evaluating a factual sufficiency challenge, we
consider and weigh all of the evidence and determine whether the evidence in support of a
finding is so weak as to be clearly wrong and unjust or whether the finding is so against the great
weight and preponderance of the evidence as to be clearly wrong and manifestly unjust. Dow
Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001); Pool v. Ford Motor Co., 715 S.W.2d
629 (Tex. 1986).
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04-09-00060-CV
BREACH OF PURCHASE AND SALE AGREEMENT
Bion asserts the trial court erred in finding: (1) Grande Valley did not breach the PSA; (2)
Grande Valley timely asserted its right to cure; and (3) Bion refused to follow through with the
sale of the property. In construing a written contract, we ascertain and give effect to the parties’
intentions as expressed in the document. Frost Nat’l Bank v. L & F Distribs., Ltd., 165 S.W.3d
310, 311-12 (Tex. 2005); J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003).
We, therefore, look to the entire writing and attempt to harmonize and give effect to all the
provisions of the contract by analyzing these provisions with reference to the whole agreement.
J.M. Davidson, 128 S.W.3d at 229.
The evidence supports a number of amendments to the PSA extending the due diligence
period delayed the second closing. Each one of the eight amendments to the PSA was due to
Bion’s failure to complete the infrastructure of the property. Because of these problems, the
evidence supports Bion’s extension of the February closing date. Mark Dizdar, President of
Grande Valley, testified that Bion did not have the lots ready, and he knew of no scheduled
closing in February. On February 28, 2007, Bion’s attorney sent a twenty-day right to cure letter
to Grande Valley stating that Grande Valley “has 20 days from today’s date to cure the defaults.”
The original PSA permits a cure period and provides that the day the notice is sent is not counted
in the cure period. The evidence supports that Grande Valley provided the funds required to
close to the title company and was ready to close on March 21, 2007. As such, Grande Valley
was timely in its performance on March 21, 2007.
Bion’s arguments regarding Grande Valley’s right to cure period expiring on “February
10 vs. March 2”, as a matter of law, are without merit. Grande Valley received a twenty-day
right to cure letter from Bion signed on February 28, 2007. Bion argues the same February 28,
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2007 letter offering the right to cure effectively terminated the PSA. However, Grande Valley
asserted defenses of estoppel and waiver before the trial court and the evidence in the record
supports that Grande Valley was ready to close on March 21, 2007, and Bion refused to go
through with the sale of the property. Accordingly, we defer to the trial court’s findings that
Grande Valley did not breach the PSA, and that Bion refused to perform under the contract. See
Catalina, 881 S.W.2d at 297.
MEDIATED SETTLEMENT AGREEMENT
Bion asserts the evidence does not support the trial court’s finding that there is no
mediated settlement agreement (MSA). Grande Valley argues there was never an intent to be
bound by the negotiations and no mediated settlement agreement ensued. We agree.
A. Intent to Be Bound
A mediated settlement agreement is enforceable in the same manner as any other
contract. TEX. CIV. PRAC. & REM. CODE ANN. § 154.071 (a) (Vernon 2005). Its construction is
governed by legal principles applicable to contracts generally. Donzis v. McLaughlin, 981
S.W.2d 58, 61 (Tex. App.—San Antonio 1998, no pet.). The intent of the parties to be bound by
a mediated settlement agreement is an essential element of an enforceable contract and is
generally a question of fact; however, where that intent is clear and unambiguous on the face of
the agreement, it may be determined as a matter of law. Anderton v. Schindler, 154 S.W.3d 928,
932 (Tex. App.—Dallas 2005, no pet.); see also Foreca, S.A. v. GRD Dev. Co., Inc., 758 S.W.2d
744, 746 (Tex. 1988) (“[I]ntention is usually an inference to be drawn by the fact finder.”).
The parties agreed to mediate on April 25, 2007. Present at the mediation were attorneys
for each side, Howard Kahn and Jesse Murphy, as well as John Ripley, President of Bion, and
Larry Contreras, Grande Valley San Antonio Division President. The parties negotiated the
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MSA during the mediation. The initial pages of the MSA show disagreement as to the terms,
and the final pages show a new hand written agreement with initials from the attorneys on each
page. The final page of the MSA contains signatures from both attorneys under the heading
“Approved as to Form.” Ripley also signed in the space for Bion; however, the space for Grande
Valley is clearly blank. At trial, Murphy testified that Contreras did not have authority to bind
the company at the mediation, but rather “Mr. Dizdar [as President of Grande Valley] needed to
sign the agreement.” The evidence confirms that the attorneys and representatives left the
meeting believing the parties had not reached an agreement. Based on our deference to the trial
court’s findings of fact, we affirm the trial court’s determination that there was no mediated
settlement agreement. See Foreca, 758 S.W.2d at 746.
B. Apparent or Actual Authority
Bion also argues, that even if Grande Valley did not intend to be bound, that Grande
Valley was bound under the theory of apparent or actual authority because its counsel signed the
MSA. Grande Valley asserts that while a party may clothe his attorney with actual or apparent
authority, this was a fact issue that the trial court determined in its favor.
Undoubtedly, a party may clothe his attorney with actual or apparent authority to reach
and sign a settlement agreement that binds the client. See Williams v. Nolan, 58 Tex. 708, 713-
14 (1883); accord W. Beach Marine, Ltd. v. Erdeljac, 94 S.W.3d 248, 256 (Tex. App.—Austin
2002, no pet.). The presumption of actual authority, however, may be rebutted by affirmative
proof that the client did not authorize his attorney to enter into the settlement. Johnson v.
Rancho Guadalupe, Inc., 789 S.W.2d 596, 598 (Tex. App.—Texarkana 1990, writ denied) (op.
on reh’g) (noting that there is no implied authority for an attorney to release the very right or
interest he is employed to protect); Fail v. Lee, 535 S.W.2d 203, 207-08 (Tex. Civ. App.—Fort
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Worth 1976, no writ) (affirming summary judgment enforcing settlement agreement absent proof
that defendant did not authorize his attorney to settle).
Additionally, to establish apparent authority, the principal must make some manifestation
to a third party that it is conferring authority or, by its actions, shows such a lack of ordinary care
as to clothe the agent with indicia of authority. NationsBank, N.A. v. Dilling, 922 S.W.2d 950,
952-53 (Tex. 1996); see also Ames v. Great S. Bank, 672 S.W.2d 447, 450 (Tex. 1984). A fact
issue may arise as to whether an attorney has authority to bind the client to a mediation
agreement. See Martin v. Black, 909 S.W.2d 192, 195 (Tex. App.—Houston [14th Dist.] 1995,
writ denied) (holding that fact disputes over existence of MSA should be settled by fact finder).
Bion asserts that because Grande Valley previously allowed its attorneys to sign binding
contracts, that Grande Valley created apparent authority in its counsel, Murphy. Bion suggests
the signature of Grande Valley’s counsel, Murphy, under the heading “Approved as to Form”
binds Grande Valley to the substance of the MSA.
It is well settled that when the notation “Approved as to Form” appears with an attorney’s
signature, it does not create the same consent to substance as the notation “Approved as to Form
and Substance” or “Approved as to Content”. 2 In fact, this court previously held “when an
attorney’s signature indicates ‘Approved’ he has simply approved the judgment as to form only,
unless other language in the judgment indicates that the substance of the judgment was also
agreed.” Bexar County Criminal Dist. Attorney’s Office v. Mayo, 773 S.W.2d 642, 644 (Tex.
App.—San Antonio 1989, no writ). Even further, this court later held that “Approved and
Agreed” standing alone does not establish a consent decree. Oryx Energy Co. v. Union Nat’l
2
See e.g., Hill v. Bellville Gen. Hosp., 735 S.W.2d 675, 678 (Tex. App.—Houston [1st Dist.] 1987, no
writ) (holding notation “Approved,” standing alone, insufficient to establish a consent judgment); Morse v. Delgado,
975 S.W.2d 378, 381 (Tex. App.—Waco 1998, no pet.) (holding that counsel’s signature indicating that he did not
oppose the form of the judgment did not make it an agreed judgment).
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Bank of Tex., 895 S.W.2d 409, 417 (Tex. App.—San Antonio 1995, writ denied). Bion
presented no evidence at trial, and submits no authority on appeal, to suggest the attorneys meant
anything more than the plain meaning of “Approved as to Form.” Accordingly, the trial court
did not err in its determination that the parties did not enter into a binding MSA. 3
DAMAGES
Finally, in its last two issues, Bion argues that it was entitled to substantial damages and
attorneys’ fees. However, having determined there is sufficient evidence to support the trial
court’s findings that Grande Valley did not breach the PSA or enter into the MSA, such
arguments are without merit.
CONCLUSION
Based on the record before us, the evidence supports the trial court’s findings that Grande
Valley did not breach the contract and that no mediated settlement agreement existed between
the parties. Accordingly, the judgment of the trial court is affirmed.
Rebecca Simmons, Justice
3
On appeal, Bion argues that the MSA “is also a Rule 11 Agreement.” However, Bion did not refer to the
MSA as a Rule 11 agreement in the pleadings, trial, or motion for new trial. Pursuant to Rule 33.1, Bion has waived
this issue on appeal. TEX. R. APP. PROC. 33.1 (a prerequisite to presenting a complaint for appellate review is a
record showing the complaint was made before the trial court and either a ruling or objection to a refusal to rule
appears on the record).
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