Hussain Abdulwahab, Individually and D/B/A Furniture Galaxy and Bazaar v. Sam's Real Estate Business Trust, a Delaware Statutory Trust ( 2011 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-10-00282-CV
HUSSAIN ABDULWAHAB, APPELLANT
INDIVIDUALLY AND D/B/A
FURNITURE GALAXY AND
BAZAAR
V.
SAM‘S REAL ESTATE BUSINESS APPELLEE
TRUST, A DELAWARE STATUTORY
TRUST
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FROM THE 153RD DISTRICT COURT OF TARRANT COUNTY
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MEMORANDUM OPINION1
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This appeal arises from a judgment that the trial court rendered after the
parties entered into a Mediation Settlement Agreement (MSA). The trial court
1
See Tex. R. App. P. 47.4.
1
granted appellee Sam‘s Real Estate Business Trust, a Delaware Statutory Trust‘s
motion to dismiss, which sought enforcement of the MSA. We affirm the trial
court‘s judgment.
Background Facts
In February 2007, appellee sued appellant for breach of a commercial
sublease that was related to a building in Grand Prairie.2 Appellee claimed that
appellant had breached the agreement by not paying rent and other costs.
Appellant admitted to entering into the sublease but asserted that although
appellee had represented that it would repair various aspects of the building, it
had not done so. Thus, appellant counterclaimed for breach of warranty of
suitability, breach of covenant of quiet enjoyment, and deceptive trade practices. 3
Appellee answered the counterclaims, and appellee filed a motion to strike them
based on appellant‘s alleged failure to properly answer discovery, a hybrid motion
for summary judgment on the counterclaims, and a no-evidence motion for
summary judgment on appellant‘s affirmative defenses. The trial court granted
2
In January 2008, appellee obtained a no-answer default judgment against
appellant for $970,097.98 plus postjudgment interest. Appellant then filed an
answer, which contained affirmative defenses, and a motion for new trial.
Although appellee opposed the motion for new trial, the trial court granted it and
vacated the default judgment.
3
See Tex. Bus. & Com. Code Ann. §§ 17.41–.63 (West 2011).
2
appellee‘s hybrid motion for summary judgment, ruling that appellee was entitled
to judgment as a matter of law on appellant‘s counterclaims.
The parties then mediated appellee‘s breach of contract claim.
On October 23, 2009, the parties reached an agreement to settle the case.
The terms of the MSA, in its entirety, are as follows:
On this the 23th [sic] day of October 2009, the parties
identified below resolved the referenced matter on the dependent
terms outlined below:
1. Without stipulation as to liability, all parties agree to
completely release and discharge any and all claims of any kind,
asserted or unasserted, known or unknown, that were or that could
have been joined in the referenced litigation between these parties.
. . . .[4]
3. Counsel for Plaintiff will prepare formal settlement and
dismissal documents.
By signing below we acknowledge our understanding of and
agreement to the terms outlined above.
The agreement displays appellant‘s signature as well as the signatures of
counsel for both parties.
The MSA was filed three days later. In May 2010, seven months after the
MSA had been executed, appellee filed a motion to dismiss all claims, alleging
that appellant had refused to sign a formal settlement document because he was
4
It appears that the parties used a pre-formatted agreement, and the text
following the second term is crossed out and contains blanks that were never
completed.
3
considering filing a lawsuit against the real estate broker who helped market the
property that appellant subleased from appellee.5 The motion to dismiss stated
that appellant had failed to appear for two dismissal hearings scheduled by the
trial court and that the court had ―directed‖ that the motion be filed. The motion
recited that the formal settlement document that appellant had refused to sign
contained ―customary release language‖ that precluded claims against agents of
either party.6 Finally, the motion informed the trial court that appellant disagreed
that claims against the parties‘ agents should be dismissed.
On May 28, 2010, appellee gave appellant written notice that the motion to
dismiss would be submitted for the trial court‘s consideration on June 7, 2010,
without an oral hearing. Appellant did not file a response by June 7, and on that
date the trial court signed an order granting the motion and stating that
any and all claims of any kind, asserted or unasserted, known or
unknown, that were or that could have been joined in this lawsuit,
which includes claims against potential agents of either [appellee] or
5
Appellant states in his brief, ―[Appellee] drafted, but [appellant] did not
sign, the proposed formal settlement document.‖ In the motion to dismiss,
appellee alleged that it settled its breach of contract claim with appellant because
appellant had threatened to leave the country or file for bankruptcy, ―leaving a
minimal chance of being able to collect any money from [appellant] after a money
judgment had been obtained.‖
6
In the motion to dismiss, appellee argued, ―In essence, [appellant] wants
to pursue a claim against a potential agent of [appellee‘s] . . . while, at the same
time, foreclosing [appellee‘s] opportunity to collect unpaid rent from him. Such is
an absurd position to take . . . .‖
4
[appellant] (including real estate brokers), are released by both
[appellee] and [appellant] and discharged with prejudice.
Two weeks later, appellant requested findings of fact and conclusions of
law. Appellee objected, arguing that the trial court‘s findings and conclusions
would not be proper under the rules of civil procedure because the court did not
hear conflicting evidence on the dismissal motion. The trial court agreed with
appellee and denied appellant‘s request.
Appellant filed a motion to modify, reform, or correct the judgment, stating
that the MSA settled claims among only the named parties. In the motion,
appellant represented that he had not withdrawn his consent to the settlement
agreement, but he stated that he never gave consent to ―any settlement
extending beyond the named parties.‖ The trial court denied appellant‘s motion
to reform the judgment, and appellant brought this appeal.
The Propriety of the Trial Court’s Judgment
In three issues, appellant contends that the trial court erred by granting
appellee‘s motion to dismiss with prejudice, denying appellant‘s request for
findings of fact and conclusions of law, and denying appellant‘s motion to modify,
reform, or correct the judgment.
The judgment complied with the MSA
In his first issue, appellant contends that the trial court erred by signing its
June 7, 2010 ―Order Granting Motion to Dismiss All Claims, Asserted and
5
Unasserted, Including Potential Agents, with Prejudice‖ because the order does
not strictly and literally comply with the MSA and because the trial court was on
notice that he did not consent to a release of claims against potential agents,
including real estate brokers, at the time of the judgment. Appellant argues that
the trial court altered the express release language in the MSA and therefore
rendered an improper consent judgment, an improper ruling that appellant had
breached the settlement agreement when no pleading for breach of contract had
been filed, or an improper judgment enforcing a settlement agreement when no
motion for enforcement had been filed.
Texas has a public policy of encouraging the peaceful resolution of
disputes and the early settlement of pending litigation through voluntary
settlement procedures. Tex. Civ. Prac. & Rem. Code Ann. § 154.002 (West 2011);
Brooks v. Brooks, 257 S.W.3d 418, 421 (Tex. App.—Fort Worth 2008, pet.
denied). Trial and appellate courts are charged with the responsibility of carrying
out this public policy. Tex. Civ. Prac. & Rem. Code Ann. § 154.003 (West 2011);
Brooks, 257 S.W.3d at 421.
Appellee argues that the trial court‘s dismissal order was not an agreed
order and that it is therefore irrelevant whether appellant withdrew his consent to
the MSA before the entry of the order. Written settlement agreements and rule
11 agreements may be enforced as contracts even if one party withdraws
6
consent before judgment is entered on the agreement. Ford Motor Co. v. Castillo,
279 S.W.3d 656, 663 (Tex. 2009); Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex.
1995); see Tex. Civ. Prac. & Rem. Code Ann. § 154.071(a) (West 2011) (―If the
parties reach a settlement and execute a written agreement disposing of the
dispute, the agreement is enforceable in the same manner as any other written
contract.‖); Tex. R. Civ. P. 11; City of Roanoke v. Town of Westlake, 111 S.W.3d
617, 626 (Tex. App.—Fort Worth 2003, pet. denied). When consent is withdrawn,
an agreed judgment based on the settlement agreement is inappropriate; instead,
the party seeking enforcement of the settlement agreement must pursue a claim
for breach of contract. Ford Motor Co., 279 S.W.3d at 663; Padilla, 907 S.W.2d
at 461 (―Although a court cannot render a valid agreed judgment absent consent
at the time it is rendered, this does not preclude the court, after proper notice and
hearing, from enforcing a settlement agreement . . . even though one side no
longer consents to the settlement.‖); Alcantar v. Okla. Nat’l Bank, 47 S.W.3d 815,
819 (Tex. App.—Fort Worth 2001, no pet.). A settlement agreement can be
enforced as a contract by the trial court only after proper pleading, notice,
hearing, and proof. Ford, 279 S.W.3d at 663; Padilla, 907 S.W.2d at 462;
Neasbitt v. Warren, 105 S.W.3d 113, 117 (Tex. App.—Fort Worth 2003, no pet.);
see also Mantas v. Fifth Court of Appeals, 925 S.W.2d 656, 658 (Tex. 1996) (orig.
proceeding) (―Where the settlement dispute arises while the trial court has
7
jurisdiction over the underlying action, a claim to enforce the settlement
agreement should, if possible, be asserted in that court under the original cause
number.‖).
Although an amended pleading is one method of raising a claim that a
settlement agreement should be enforced as a contract, we have held that a
motion seeking enforcement of the settlement agreement is a sufficient pleading
to allow a trial court to render judgment enforcing the settlement because such a
motion gives the alleged breaching party an opportunity to defend itself. Neasbitt,
105 S.W.3d at 117; see Twist v. McAllen Nat’l Bank, 248 S.W.3d 351, 361 (Tex.
App.—Corpus Christi 2007, orig. proceeding [mand. denied]) (holding that an oral
motion to enforce a settlement agreement was sufficient because ―[a]s long as
the motion recites the terms of the agreement, states that the other party has
revoked its previously stated consent to the agreement, and requests the trial
court to grant relief, the motion is sufficient‖); Bayway Servs., Inc. v. Ameri-Build
Constr., L.C., 106 S.W.3d 156, 160 (Tex. App.—Houston [1st Dist.] 2003, no pet.).
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;
Neasbitt, 105 S.W.3d at 117.7
7
In Neasbitt, we explained,
8
Appellant argues that the trial court erred by rendering judgment releasing
claims against potential agents when the only pleading pending was a motion to
dismiss.8 Although appellee‘s motion was labeled as a motion to dismiss, it was
essentially a motion to enforce the MSA because appellee alleged that appellant
―refuse[d] to sign a formal settlement document ‗releas[ing] . . . any and all claims
of any kind . . . that could have been joined in [this] litigation‘ as he agreed to do
in [the MSA].‖ The motion specifically recited and attached the terms of the MSA
and stated that appellee‘s counsel had prepared the formal settlement and
dismissal documents required by the agreement. The motion further alleged that
the formal settlement documents were forwarded to and approved by appellant‘s
―A pleading is an original or amended petition or answer,
which may also include or constitute a response, plea, or motion.‖
―When a party has mistakenly designated any plea or pleading, the
court, if justice so requires, shall treat the plea or pleading as if it had
been properly designated.‖ When determining the nature of a filing
with the court, the contents of the filing govern over the title of the
document. ―[T]he purpose of pleadings is to give the adversary par-
ties notice of each [party‘s] claims and defenses, as well as notice of
the relief sought.‖
105 S.W.3d at 117 (citations and footnotes omitted).
8
Appellant seems to argue that he was deprived of the right to assert
defenses and conduct discovery. But appellant did not respond to appellee‘s
motion to dismiss in any respect and therefore did not make the trial court aware
of his desire to assert defenses or conduct discovery. He therefore waived any
argument pertaining to his lack of an opportunity to prepare a defense. See Tex.
R. App. P. 33.1(a); Neasbitt, 105 S.W.3d at 118.
9
counsel but that appellant refused to sign them. Appellee requested that the
motion to dismiss be set for a hearing with notice to appellant and asked the trial
court to enforce the settlement agreement.9 Thus, the motion contained all of the
necessary elements to request enforcement of the MSA. See Twist, 248 S.W.3d
at 361–62; Neasbitt, 105 S.W.3d at 117.
Furthermore, the trial court correctly enforced the settlement agreement to
preclude claims against third parties that could have been brought in the litigation
between appellee and appellant. The MSA is a contract and is therefore
governed by the same rules of construction applicable to all contracts. See Doe
v. Tex. Ass’n of Sch. Bds., Inc., 283 S.W.3d 451, 458 (Tex. App.—Fort Worth
2009, pet. denied). Thus, in construing the MSA, our primary concern is
ascertaining the true intent of the parties as expressed in the agreement. Id.
(citing NP Anderson Cotton Exch., L.P. v. Potter, 230 S.W.3d 457, 463 (Tex.
App.—Fort Worth 2007, no pet.)); see Republic Nat’l Bank of Dallas v. Nat’l
Bankers Life Ins. Co., 427 S.W.2d 76, 79–80 (Tex. Civ. App.—Dallas 1968, writ
ref‘d n.r.e.) (noting that courts should not consider the ―intention which the parties
may have had, but failed to express in the instrument‖). ―Words in a contract
must carry their ordinary, generally accepted meanings unless the contract itself
9
Appellee stated in the motion, ―As agreed in the [MSA], it is now time to
put to rest all claims, either asserted or unasserted, that could have been joined
in this lawsuit . . . .‖
10
shows that the terms have been used in a technical or different sense. In
construing a contract, we may not rewrite it nor add to its language.‖ Doe, 283
S.W.3d at 458 (citation omitted). The interpretation of an unambiguous contract
is a matter of law to be determined by the trial court. Gulf Ins. Co. v. Burns
Motors, Inc., 22 S.W.3d 417, 423 (Tex. 2000).
The trial court literally and strictly complied with the MSA by ordering that it
precluded all claims ―that were or that could have been joined in this lawsuit,
which includes claims against potential agents.‖ 10 This is precisely what the MSA
required when the parties agreed to ―completely release and discharge any and
all claims of any kind, asserted or unasserted, known or unknown, that were or
that could have been joined in the referenced litigation between these parties.‖
Appellant‘s interpretation of the MSA, that it releases only claims that could have
been brought between appellant and appellee, is unreasonable because it would
have required the trial court to rewrite the agreement to state, in effect, that the
parties agreed to ―completely release and discharge any and all claims of any
10
Appellant does not dispute that he could have sued appellee‘s real estate
broker in the same suit in which he brought claims against appellee. Texas Rule
of Civil Procedure 40(a) provides, ―All persons may be joined in one action as
defendants if there is asserted against them jointly, severally, or in the alternative
any right to relief in respect of or arising out of the same transaction, occurrence,
or series of transactions or occurrences . . . .‖ Tex. R. Civ. P. 40(a).
11
kind between these parties, asserted or unasserted, known or unknown, that
were or that could have been joined in the referenced litigation.‖
Because we hold that the trial court did not err by granting appellee‘s
motion to dismiss (of which appellant had notice and an opportunity to respond)
and by strictly enforcing the terms of the MSA, we overrule appellant‘s first issue.
See Neasbitt, 105 S.W.3d at 117–19.
The request for findings of fact and conclusions of law was inappropriate
In his second issue, appellant argues that the trial court erred by refusing
to file findings of fact and conclusions of law. ―In any case tried in the district or
county court without a jury, any party may request the court to state in writing its
findings of fact and conclusions of law.‖ Tex. R. Civ. P. 296. ―Findings and
conclusions are appropriate if there is an evidentiary hearing and the trial court is
called upon to determine questions of fact based on conflicting evidence.‖ Int’l
Union, United Auto., Aerospace & Agric. Implement Workers of Am.-UAW v. Gen.
Motors Corp., 104 S.W.3d 126, 129 (Tex. App.—Fort Worth 2003, no pet.) (citing
Port Arthur ISD v. Port Arthur Teachers Ass’n, 990 S.W.2d 955, 958 (Tex. App.—
Beaumont 1999, pet. denied)). When the trial court rules without determining
questions of fact, a request for findings of fact and conclusions of law is
inappropriate. Id.; see O’Donnell v. McDaniel, 914 S.W.2d 209, 210 (Tex. App.—
Fort Worth 1995, writ denied) (stating that a dismissal of a case without an
12
evidentiary hearing does not constitute a case that has been ―tried‖ within the
meaning of rule 296); see also Puri v. Mansukhani, 973 S.W.2d 701, 708 (Tex.
App.—Houston [14th Dist.] 1998, no pet.) (―The purpose of Rule 296 is to give a
party a right to findings of fact and conclusions of law finally adjudicated after a
conventional trial . . . . In other cases, findings and conclusions may be proper,
but a party is not entitled to them.‖).
The trial court did not hold an evidentiary hearing, and its decision to grant
appellee‘s motion to dismiss and enforce the MSA was not based on the
determination of any fact issue about which there was conflicting evidence.
Instead, at most, it was based on the parties‘ competing interpretations of the
principal evidence presented, the MSA, and on appellant‘s undisputed refusal to
sign a document that complied with the MSA‘s language.
Appellant contends that the trial court decided a disputed fact issue of the
parties‘ intent in signing the MSA. But intent in entering a contract is only a fact
issue where the contract is ambiguous, and based on our reasoning above, we
hold that the MSA was not ambiguous. See Columbia Gas Transmission Corp. v.
New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996); Doe, 283 S.W.3d at 459.
For these reasons, we hold that the trial court did not err by declining to file
findings of fact and conclusions of law. See Tex. R. Civ. P. 296. We overrule
appellant‘s second issue.
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The trial court correctly denied appellant’s motion to modify, reform, or
correct the judgment
In his third issue, appellant argues that the trial court erred by denying his
motion to modify, reform, or correct the judgment. That motion and the argument
contained in the body of appellant‘s third issue recast the contentions that
appellant made in his first issue. Therefore, for the same reasons that we
overruled appellant‘s first issue, we overrule his third issue. See Neasbitt, 105
S.W.3d at 118–19.
Conclusion
Having overruled each of appellant‘s issues, we affirm the trial court‘s
judgment.
TERRIE LIVINGSTON
CHIEF JUSTICE
PANEL: LIVINGSTON, C.J.; MCCOY and GABRIEL, JJ.
DELIVERED: July 21, 2011
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