Joanne Barnwell v. Gregory D. Eversole ( 2007 )

In The

Court of Appeals

Ninth District of Texas at Beaumont

______________________ NO. 09-07-206 CV ______________________ JOANNE BARNWELL, Appellant

V.

GREGORY D. EVERSOLE, Appellee

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On Appeal from the 359th District Court Montgomery County, Texas Trial Cause No. 07-03-03181 CV

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  MEMORANDUM OPINION

This appeal is from a temporary injunction against enforcement of a default judgment pending a trial on the merits of a bill of review. Finding no abuse of discretion by the trial court, we affirm the order.

Joanne Barnwell and husband Robert (Barney) Barnwell sued Gregory D. Eversole for causes of action ⁽¹⁾ relating to Eversole's construction of the Barnwell home. The district court entered a default judgment in the Barnwells' favor. It is uncontroverted that Eversole did not receive notice of the judgment. Appellate deadlines having passed, Eversole filed a bill of review petition and a request for temporary injunction to prevent execution on the default judgment. The trial court granted the temporary injunction. Only Joanne Barnwell filed an interlocutory appeal. See Tex. Civ. Prac. & Rem. Code Ann. 51.014(a)(4) (Vernon Supp. 2006).

Raising four issues ⁽²⁾ on appeal, Joanne asserts the trial court erred in granting the temporary injunction. She argues the following: Eversole failed to offer any evidence at the temporary injunction hearing of a meritorious defense in the Barnwells' original suit; Eversole's own fault and negligence caused the rendition of the final judgment; and Eversole failed to show Joanne committed any fraud, accident, or wrongful act. Joanne also argues the trial court erred in denying her motion for directed verdict at the temporary injunction hearing. We address the issues together.

A temporary injunction's purpose is to preserve the status quo until a final hearing on the merits. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 204 (Tex. 2002). The applicant must plead and prove three elements: (1) a cause of action against the defendant; (2) a probable right to the relief sought; and (3) a probable, imminent, and irreparable injury in the interim. Id. Whether to grant or deny a temporary injunction is within the trial court's sound discretion. Id. A trial court may balance the equities of the parties and the resulting hardships from issuance or denial of a temporary injunction. See NMTC Corp. v. Conarroe, 99 S.W.3d 865, 869 (Tex. App.--Beaumont 2003, no pet.). An abuse of discretion occurs when the trial court misapplies the law to established facts, or when the evidence does not reasonably support the conclusion that the applicant has a probable right of recovery. Wu v. City of San Antonio, 216 S.W.3d 1, 4 (Tex. App.--San Antonio 2006, no pet.).

The issues here focus on the second element of the temporary injunction test: whether Eversole pleaded and proved a probable right to recovery in his bill of review. An applicant need not establish that he will finally prevail in the litigation, but he must present "some evidence which, under the applicable rules of law, establishes a probable right of recovery." In re Tex. Natural Res. Conserv. Comm'n, 85 S.W.3d 201, 204 (Tex. 2002) (quoting Camp v. Shannon, 162 Tex. 515, 348 S.W.2d 517, 519 (1961)). When the trial court bases its decision on conflicting evidence, generally there is no abuse of discretion. Davis v. Huey, 571 S.W.2d 859, 862 (Tex. 1978). The reviewing court draws all legitimate inferences from the evidence in the light most favorable to the trial court's order granting a temporary injunction. City of McAllen v. McAllen Police Officers Union, 221 S.W.3d 885, 893 (Tex. App.--Corpus Christi 2007, pet. denied).

In his bill of review, ⁽³⁾ Eversole asserted he had meritorious defenses -- accord and satisfaction, estoppel, and payment -- in the Barnwells' suit but he was unable to present them to the trial court "because of fraud." The crux of Joanne's argument is that there was no payment to her, she did not agree to any settlement, and the defenses have no application to her. She argues that estoppel does not apply, because Eversole produced no evidence of any conduct by her that was inconsistent with her intention to prosecute her claims in the underlying lawsuit against Eversole; and she asserts that his failure to comply with Rule 11 of the Texas Rules of Civil Procedure -- no writing signed by her and no agreement set out in open court -- precludes him from enforcing any alleged settlement agreement with her.

At the temporary injunction hearing, Eversole testified he and Barney Barnwell had been negotiating over the lawsuit for several months. The culmination of that negotiation was Eversole's presentation to Mr. Barnwell of a $17,000 cashier's check (dated July 25, 2006) to settle the suit. On July 26, 2006, the day after Eversole submitted the $17,000 check to Barney Barnwell, the trial court held a hearing on Eversole's attorney's motion to withdraw. Present at that hearing were the visiting trial judge, Eversole, his attorney, and the Barnwells' attorney. The following exchange occurred:

[Eversole]: I was kind of wondering why we are even here today?

[The Court]: Because it's the court proceedings.

[Eversole]: I know, but we had -- Barnwell, he took a cashier's check and said we was done. I give it to him, and I'm back in court.

. . . .

[Eversole's Attorney]: Talk to [Barnwells' attorney] about that.

[The Court]: All I see is what's right in front of me right this second. I don't know what else is in the file.

[Eversole]: That just happened and his client -- I thought we was done. I mean, the lawsuit was supposed to have been dropped and Barney --

[The Court]: I can't answer that question. I don't know anything about that.

[Eversole's Attorney]: She's a visiting judge.

[The Court]: I don't know what procedurally has gone on. All I have is a motion to allow your attorney to withdraw. If you want to talk to [Barnwells' attorney] for a second outside and find out what's going on, I would suggest you do that."

Although the order is not in the record, apparently the trial court granted Eversole's attorney's withdrawal motion.

Eversole presented additional evidence at the April 20, 2007, temporary injunction hearing in his bill of review suit. He testified he spoke to the Barnwells' attorney after the motion-to-withdraw hearing and told the attorney the suit had been settled. Eversole stated the attorney acted as if he knew nothing about it and indicated he had not spoken to his client for a week. Eversole explained that on July 27, 2006, the day after the motion-to-withdraw hearing, he took a written agreement to Barnwell, who signed it in front of Eversole. Once the checked cleared, Barney Barnwell gave Eversole a copy of the signed agreement.

Eversole described the events surrounding the letter agreement as follows:

Q. [Eversole's Attorney]: Did Mr. Barnwell represent to you that he was acting on behalf of Mrs. Barnwell?

A. [Eversole]: Yes.

Q. Pertaining to the settlement agreement?

A. Yes. He didn't tell me no difference. And I didn't know the legal aspect of Mrs. Barnwell or Mr. Barnwell. In all my dealings, it was always with Barney.

Q. Okay. And did Mr. Barnwell ever contact you between the time that -- after the settlement and after he gave you a copy of the settlement agreement, did he ever contact you about the trial, say anything to you about the trial after that, after that point?

A. Nothing.

Q. And did Mr. Barnwell tell you that he would take care of the lawsuit?

A. Yes, he did.

. . . .

Q. Did [Barnwell's attorney] communicate with you after the hearing . . . on the motion to withdraw as counsel[?]

A. No, sir.

Eversole acknowledged he never talked to Joanne Barnwell about the settlement, and he never obtained a written agreement from her.

The letter agreement, addressed to Robert Barnwell, states in part, "As you know, on July 25, 2006, I provided and you accepted a Texas Community Bank cashiers check . . . in the amount of $17,000. It is my understanding, based on this payment, we reached a settlement." The letter further states, "This letter will confirm settlement of the above lawsuit. . . . Because we reached a settlement, in exchange, you agreed to dismiss the lawsuit, and to release and hold me harmless from any and all past, present, or future claims concerning the above lawsuit or your residence . . ." Barnwell's signature appears by the phrase "Agreed To" at the letter's conclusion. ⁽⁴⁾

Two months after the motion-to-withdraw hearing, and after the cashing of the $17,000 check, the Barnwells took a default judgment against Eversole. He did not appear at the default judgment hearing.

Eversole testified he first knew of the Barnwells' default judgment against him on March 13, 2007, when an attempt was made to execute on the judgment. Eversole stated he was "totally shocked," "[b]ecause I had settled, you know, with Mr. Barnwell last year and thought everything was done. . . ." "I thought it was over with." Even after his own attorney withdrew, Eversole stated the Barnwells' attorney never contacted him. There was no mention of a settlement at the default judgment hearing.

The record contains some evidence of the existence of an agreement that the lawsuit was settled, as well as evidence supporting claims of estoppel, accord and satisfaction, and payment. There is also evidence of a course of conduct preventing Eversole from asserting his defenses. ⁽⁵⁾ Both the Barnwells sued Eversole on a contract to which Joanne and Barney were both parties. Their causes of action were the same; their names both appeared in the style on the default judgment; and the damages award was not set out separately for each of them. Barney Barnwell testified that he was aware that his attorney had offered a settlement of $17,000. Eversole testified that Mr. Barnwell took the $17,000 check and told Eversole "we was done[,]" and the suit would be taken care of. The $17,000 check was cashed. The Barnwells' attorney knew from Eversole's statements during the motion-to-withdraw hearing that Eversole had given a check to Barney, and that Eversole stated Barney indicated the case would be dropped. Eversole testified he had dealt only with Barney, not with Joanne. Eversole believed that when Barney accepted and cashed the $17,000 check, signed the letter agreement indicating settlement and release, and represented the case would be dropped, Barney was settling the entire case. The nature of Eversole's dealings with Barney is some evidence of Barney's apparent authority or agency to act for his wife.

In contrast to Eversole's testimony, Barney testified he never signed the letter agreement. Joanne testified she frequently consulted with Eversole both at the office and at the house during the construction phase, although she never talked with him after the suit was filed. There was testimony from handwriting experts: Eversole's expert testified Barney's signature was on the letter agreement; Joanne's expert testified she could not determine the authenticity of the signature. Presented with conflicting testimony, the fact-finder at the temporary injunction hearing was free to believe one witness over another. See Naguib v. Naguib, 137 S.W.3d 367, 377 (Tex. App.--Dallas 2004, pet. denied).

Joanne Barnwell argues Eversole's own fault and negligence caused the rendition of the final judgment in the underlying suit. She points to Eversole's failure to sign or file the alleged settlement agreement; failure to obtain her or her counsel's signatures on the document; and Eversole's failure to appear for the September 8, 2006, pre-trial conference and the September 18, 2006, trial setting, even though he knew of the dates.

As noted above, Eversole proffered evidence he believed the dispute had settled. He indicated he had dealt only with Barney and believed Barney was, in effect, speaking for both Barney and Joanne. Eversole testified Barney cashed the check and represented he would take care of the lawsuit. See Griffith v. Conard, 536 S.W.2d 658, 660-61 (Tex. Civ. App.--Corpus Christi 1976, no writ) (Bill of review petitioner was induced to refrain from pursuing his meritorious defense by false promises of compromise or settlement made by opposite party.). The judge heard evidence from which she could reasonably conclude the Barnwells' attorney knew Eversole believed the lawsuit to be settled. The Barnwells' attorney knew Eversole's attorney was off the case. He also knew a visiting judge had presided over the earlier hearing. When the presiding judge at the default judgment hearing asked the Barnwells' attorney if he had "heard from [Eversole] at all[,]" the attorney responded "No, I have not, your Honor." When the Court asked whether "notice of a date" should be sent, the attorney said no. Joanne and Barney took a default judgment against Eversole, and proved up that $17,000 payment as a credit on their damages, not as a settlement. The court at the default judgment hearing was not informed Eversole paid the money as part of what was represented to him as a settlement. From the evidence, the trial court at the temporary injunction hearing reasonably could conclude the default judgment was not the result of Eversole's fault or negligence.

Eversole asserts the fraud was in the taking of a default judgment against him even though the lawsuit purportedly had settled and payment had been made. Eversole contends the Barnwells' attorney participated by "representing to the court that the payment made by [Eversole] was a credit only, knowing [Eversole] had made the payment believing it to be in full settlement of the lawsuit." We have set out evidence indicating that Eversole may have been prevented from asserting his defenses by the conduct of the opposing party. See generally King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 752 (Tex. 2003). There is some evidence to support the trial court's recognition of a probable right of relief in the bill of review proceeding.

A temporary injunction is issued "to prevent only harm that cannot be prevented after a final determination on the merits." NMTC Corp. v. Conarroe, 99 S.W.3d at 867-68. A trial court balances competing equities in exercising its injunction power. Id. at 868. As part of its weighing of the equities, a court considering a temporary injunction may balance the probable harm to the plaintiff if a temporary injunction is erroneously denied with the probable harm to the defendant if a temporary injunction is erroneously granted. Id. In granting the temporary injunction under the circumstances here, the trial court did not act outside the bounds of reasonable discretion. Issues one, two, four, and five are overruled.

We affirm the trial court's order granting the temporary injunction.

AFFIRMED.

DAVID GAULTNEY

Justice

Submitted on July 12, 2007

Opinion Delivered August 30, 2007

Before Gaultney, Kreger, and Horton, JJ.

1. The Barnwells' causes of action were for DTPA violations, common law fraud, statutory real estate fraud, breach of contract, and negligent misrepresentation.

2. Joanne Barnwell withdrew issue three.

3. Eversole's cause of action is a bill of review which requires proof of three elements: (1) a meritorious defense to the underlying cause of action, (2) which he was prevented from making by the fraud, accident, or wrongful act of the opposing party or official mistake, (3) unmixed with any fault or negligence on his own part. See Caldwell v. Barnes, 154 S.W.3d 93, 96 (Tex. 2004).

4. Eversole's typed name is below the salutation; he did not sign the document.

5. Eversole's defenses do not necessarily depend upon proof of compliance with the Rule 11 filing requirement. See generally Tex. R. Civ. P. 11. The Supreme Court has held that Rule 11 requires only that the writing be filed before an agreement is sought to be enforced. See Padilla v. La France, 907 S.W.2d 454, 461 (Tex. 1995). Eversole essentially asserts he was deprived of the opportunity to enforce the agreement.