Gail Pate v. Larry Eversole ( 2004 )

Reversed and Rendered and Memorandum Opinion filed March 25, 2004

Reversed and Rendered and Memorandum Opinion filed March 25, 2004.

In The

Fourteenth Court of Appeals

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NO. 14-03-00250-CV

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GAIL PATE, Appellant

V.

LARRY EVERSOLE, Appellee

On Appeal from the 12th District Court

Walker County, Texas

Trial Court Cause No. 20,544

M E M O R A N D U M   O P I N I O N

Appellant Gail Pate appeals from the trial court=s award of $19,131.87, plus post-judgment interest, to appellee Larry Eversole.  This case arises from a dispute concerning the validity of a settlement agreement stipulating as to the amount of indebtedness remaining on a previously executed promissory note.  Because all dispositive issues are clearly settled in law, we issue this memorandum opinion. See Tex. R. App. P. 47.4.  We reverse and render judgment in favor of appellant.

Appellant presents three issues for review: (1) whether the trial court erred by failing to find that appellee was equitably estopped from obtaining partial rescission of the settlement agreement between the parties, (2) whether the trial court erred by failing to find that appellee waived the right to assert the partial invalidity of the settlement agreement, and (3) whether the evidence is legally and factually sufficient to support the trial court=s finding that the settlement agreement was signed due to duress. Because we find appellant=s second issue dispositive of this appeal, we do not address her remaining issues below.

In her second issue, appellant argues that the trial court erred by failing to find that appellee waived the right to assert the partial invalidity of the settlement agreement.  The trial court found that the settlement agreement was invalid because appellee signed it under duress.  Even if the trial court=s finding of duress is correct, however, that fact alone does not render the settlement agreement invalid.^[1]

Any act based upon the recognition of the contract as subsisting or any conduct inconsistent with an intention of avoiding it has the effect of waiving the right of rescission. Rosenbaum v. Texas Building & Mortgage Co., 167 S.W.2d 506, 508 (Tex. 1943).  Waiver is the intentional relinquishment of a known right or intentional conduct inconsistent with claiming that right. Jernigan v. Langley, 111 S.W.3d 153, 156 (Tex. 2003).  For implied waiver to be found through a party=s actions, intent must be clearly demonstrated by the surrounding facts and circumstances.  Id. Waiver is ordinarily a question of fact, but when the surrounding facts and circumstances are undisputed, as in this case, the question becomes one of law.  Id. at 156-57.

In the present case, the evidence is undisputed and clearly establishes that appellee waived his right to rescind the settlement agreement.  Appellee testified that he executed the settlement agreement with full knowledge that he was Agetting ripped off,@ because the actual amount due on the note at that time was approximately 111,000 dollars, rather than the 125,000-dollar amount specified in the settlement agreement.  He understood, however, that by signing the contract he would postpone the foreclosure date and be able to realize a profit of over 61,000 dollars. Following the title company=s disbursement of funds from appellee=s sale of the property to the third party, the note was paid off and appellee received (and did not return) a check in the amount of his expected profit.  Appellee thus received and accepted the benefits under the contract. See Daniel v. Goesl, 341 S.W.2d 892, 895 (Tex. 1960). Therefore, we find that appellee waived his right to rescind the settlement agreement as a matter of law.

We reverse the judgment of the trial court and render judgment in favor of appellant.

/s/      Adele Hedges

Chief Justice

Judgment rendered and Memorandum Opinion filed March 25, 2004.

Panel consists of Chief Justice Hedges and Justices Fowler and Guzman.

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^[1]  On appeal, appellee argues that the settlement agreement did not constitute a binding legal contract because consideration did not pass between the parties and the note had already been paid by the title company.  We disagree. In exchange for his waiver of the credit and promise to pay a sum greater than the amount of his original obligation, appellee received a promise from appellant to postpone the foreclosure sale.  Because this agreement constitutes a bargained-for exchange of promises, the settlement agreement does not fail for lack of consideration. See Roark v. Stallworth Oil and Gas, Inc., 813 S.W.2d 492, 496 (Tex. 1991).  Further, the undisputed testimony at trial was that appellant did not receive payment on the note prior to execution of the settlement agreement despite the fact that the title company, acting as escrow agent for appellee, had the funds on hand.