Alan W. Nalle, Sr. v. Kathryn Hale ( 2023 )

Affirmed and Memorandum Opinion filed March 23, 2023.
In The
Fourteenth Court of Appeals
NO. 14-22-00303-CV
ALAN W. NALLE, SR., Appellant
V.
KATHRYN HALE, Appellee
On Appeal from the 459th District Court
Travis County, Texas
Trial Court Cause No. D-1-GN-20-005928
MEMORANDUM OPINION
This is a summary judgment case. Appellant Alan W. Nalle, Sr. sued
appellee Kathryn Hale alleging various causes of action related to a dispute with
his community’s homeowner’s association. Hale eventually filed a motion for
summary judgment on Nalle’s causes of action, which the trial court granted.
Because we conclude that the trial court committed no reversible error when it
granted Hale’s motion for summary judgment, we affirm.
BACKGROUND
This litigation originally arose out of a dispute between Nalle and his
homeowner’s association, the Westlake Oaks Property Owners Association, Inc.
(Westlake). Nalle believed that Westlake, its Architectural Control Committee
(the Committee), and Board of Directors violated Westlake’s protective covenants
by approving plans and then granting a construction variance for a new house
being constructed on the lot next to Nalle’s house. At the time the variance was
approved, Hale was serving as a voluntary member of the Committee. Hale signed
the variance in her capacity as a representative of the Committee.
Appellant filed suit against Westlake alleging claims for breach of contract
for failing to enforce protective covenants, negligence, and “intentional conduct”
that violated Nalle’s “right to privacy and right to quiet enjoyment of his home.”
Among other allegations, Nalle alleged that the Committee “did not act reasonably
in granting approval” of the new construction “and instead acted arbitrarily without
fair, solid and substantial cause or reason and took action without consideration
and in disregard of the facts and circumstances of the matter.” Nalle further
alleged that he had provided “a list of errors in the approval process made by the
architect and by the [Committee] that demonstrated that the [Committee] had failed
to properly conform to the requirements of the [protective covenants] in granting
its approvals and that such approvals were in violation of the [protective
covenants].” In addition to other allegations against the Committee, Nalle alleged
that the Board and then the Committee “did not act reasonably in granting the
variance, and instead acted arbitrarily without fair, solid and substantial cause or
reason and took action without consideration and in disregard of the facts and
circumstances of the matter.” Finally, Nalle sought recovery of the following
damages:
2
(a) Actual or economic damages for at least $1,000,000.00, and
(b) Special or consequential damages to be determined by a jury, in an
amount of at least $1,000,000.00, including for the violation of
plaintiff’s right to privacy and right to quiet enjoyment of his home,
and
(c) Additional damages, past and future, for loss of use and enjoyment
of his property until elimination of the nuisance described above, and
(d) Pleading further, and alternatively, if necessary, Defendant is
guilty of misconduct which was committed in reckless and callous
disregard of the legitimate rights of the Plaintiff so far as to justify the
imposition of exemplary damages. Plaintiff seeks recovery of such
exemplary damages from Defendant.
Westlake made an offer to settle Nalle’s lawsuit pursuant to Rule 167.2 of
the Texas Rules of Civil Procedure and Chapter 42 of the Texas Civil Practices and
Remedies Code. See Tex. Civ. Prac. & Rem. Code § 42.001 et seq; Tex. R. App.
P. 167.2. Among other provisions, the settlement offer provided that Westlake was
offering “to settle all claims that have been asserted or that could have been
asserted by Plaintiff against any Defendant who have been named as parties to this
cause of action in any way related to, based upon, or arising out of any of the facts,
events, occurrences, circumstances, acts, omissions, transactions, or relationships
described in Plaintiff’s Second Amended Petition.” The settlement offer further
provided that Westlake would pay Nalle $300,000 in full and final settlement of all
claims “including all monetary damages, statutory or exemplary damages,
attorney’s fees, court costs, and interest that could be recoverable against any
Defendant who have been named as parties to this lawsuit as of the date of this
offer.” Finally, the settlement offer provided that it was “subject to the execution
of a written settlement agreement, and the dismissal with prejudice of all claims
against Defendant Westlake and its current and former officers, board members,
agents, attorneys, representatives, heirs, and assigns.”
3
Nalle timely accepted Westlake’s offer. Efforts to draft the required written
settlement agreement stalled over whether the individual Board members, officers,
agents, and other representatives of Westlake should be included. Nalle filed a
motion to enforce the settlement and the trial court held a non-evidentiary hearing
and eventually issued its decision in a letter. The parties then executed a written
settlement agreement based on the trial court’s letter. The executed Settlement
Agreement recited that:
WHEREAS . . . Defendant Westlake offered to settle all claims that
have been asserted or that could be asserted by Plaintiff against any
Defendant who have been named as parties to this cause of action in
any way related to, based upon, or arising out of any of the facts,
events, occurrences, circumstances, acts, omissions, transactions or
relationships described in Plaintiff’s Second Amended Original
Petition.
WHEREAS, Defendant offered to pay [$300,000.00] to Plaintiff Nalle
in full and final settlement of all claims described in the paragraph
above, including all monetary damages, statutory or exemplary
damages, attorney’s fees, court costs, and interest that could be
recoverable against any Defendant who have been named as parties to
this lawsuit as of the date of this offer.
WHEREAS Defendant made its Offer of Settlement, and Plaintiff
accepted the Defendant’s Offer of Settlement, subject to the execution
of a written settlement agreement, and the dismissal with prejudice of
all claims against Defendant Westlake and its current and former
officers, board members, agents, attorneys, representatives, heirs and
assigns.
The Settlement Agreement further provided:
In consideration of the total sum of [$300,000.00] (“the Settlement
Amount”) from Defendant, the receipt and sufficiency of which is
hereby acknowledged by Plaintiff, and in consideration of the mutual
agreements, conditions, representations, warranties, recitals,
covenants and statements of intention contained herein, Plaintiff, Alan
W. Nalle, Sr. hereby accepts the above-referenced payment in full
settlement, compromise and release of all claims as [sic] arising out of
4
or in connection with the Lawsuit, pursuant to this Settlement
Agreement, against Defendant Westlake Oaks Property Owners
Association, Inc.
The trial court then signed an Agreed Order Dismissing with Prejudice,
which provided that:
All claims against Defendant Westlake Oaks Property Owners
Association, Inc. and its current and former officers, board members,
agents, attorneys, representatives, heirs, and assigns are DISMISSED,
With Prejudice.
(emphasis in original).
Nearly eighteen months after the agreed dismissal order, Nalle filed this
lawsuit against Hale. Nalle alleged claims of fraud and breach of contract against
Hale in her individual capacity. Nalle alleged that Hale “could not have signed the
variance acting within her authority, if any.” Nalle sought recovery of the
following damages:
39. As a direct and proximate result of the Defendants’ [sic] fraud
Defendant caused injury to [Nalle]. [Nalle] is therefore entitled to
recover for any diminishment of his property’s fair market value, and
for the loss of intrinsic value of [Nalle’s] damaged property, physical
damage to the [Nalle’s] property, along with loss of use and
enjoyment of his property, personal injuries, past and future, harm to
[Nalle’s] health, and harm to [Nalle’s] peace of mind in the use and
enjoyment of his property.
40. [Nalle] has sustained damages in excess of this Court’s
jurisdictional minimum, as a result of the actions and/or omissions of
Defendant described hereinabove, including but not limited to:
41. Actual or economic damages for at least $1,000,000.00, and
42 Special or consequential damages to be determined by a jury;
and
43. Additional damages for loss of use and enjoyment of his
property; and
5
44. Pleading further, and alternatively, if necessary, Defendant is
guilty of misconduct which was committed in reckless and callous
disregard of the legitimate rights of [Nalle] so far as to justify the
imposition of exemplary damages. [Nalle] seeks recovery of such
exemplary damages from Defendant.
Hale filed an answer and asserted a counterclaim against Nalle. Hale moved
for summary judgment arguing that Nalle’s claims were barred by the doctrines of
res judicata, the one satisfaction rule, and the election of remedies. Hale also
included a request for sanctions in her motion. The trial court granted Hale’s
motion for summary judgment on Nalle’s claims against her without specifying the
grounds. Hale then non-suited her counterclaim. The trial court denied Hale’s
request for sanctions in a separate order. The trial court subsequently signed an
order of nonsuit making the summary judgment final. This appeal followed.
ANALYSIS1
Nalle challenges the trial court’s summary judgment in a single issue with
multiple sub-parts. Because we conclude Nalle’s claims against Hale are barred by
application of the one satisfaction rule affirmative defense, we need not address the
remainder of Nalle’s arguments raised in this appeal. See Carr v. Brasher, 776
S.W.2d 567, 569 (Tex. 1989) (“When a trial court’s order granting summary
judgment does not specify the ground or grounds relied on for its ruling, summary
judgment will be affirmed on appeal if any of the theories advanced are
meritorious.”).
1
The Texas Supreme Court ordered the Third Court of Appeals to transfer this case to
our court. Under the Texas Rules of Appellate Procedure, “the court of appeals to which the case
is transferred must decide the case in accordance with the precedent of the transferor court under
principles of stare decisis if the transferee court’s decision otherwise would have been
inconsistent with the precedent of the transferor court.” Tex. R. App. P. 41.3.
6
I. Standard of Review
We review de novo the trial court’s ruling on a motion for summary
judgment. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d
844, 848 (Tex. 2009). In a traditional motion for summary judgment, the movant
must establish that no genuine issue of material fact exists, and the movant is
entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c). When reviewing
a summary judgment, we take as true all evidence favorable to the nonmovant and
indulge every reasonable inference and resolve any doubts in the nonmovant’s
favor. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005);
Provident Life & Accid. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). A
genuine issue of material fact exists if the nonmovant produces more than a
scintilla of probative evidence regarding the challenged element. See Ford Motor
Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). A defendant moving for
traditional summary judgment on an affirmative defense must conclusively
establish each element of that affirmative defense. Sci. Spectrum, Inc. v. Martinez,
941 S.W.2d 910, 911 (Tex. 1997).
II. The one satisfaction rule bar’s Nalle’s lawsuit against Hale.
“The one satisfaction rule applies to prevent a plaintiff from obtaining more
than one recovery for the same injury.” Stewart Title Guar. Co. v. Sterling, 822
S.W.2d 1, 7 (Tex. 1991); see also Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378,
390 (Tex. 2000). Under this rule, a plaintiff is entitled to one recovery for
damages suffered when multiple defendants commit the same act as well as when
multiple defendants commit technically different acts resulting in a single injury.
Casteel, 22 S.W.3d at 390; see El Paso Natural Gas Co. v. Berryman, 858 S.W.2d
362, 364 (Tex. 1993) (per curiam) (“The one satisfaction rule provides that a party
which suffers but one injury can recover only one satisfaction for damages arising
7
from that injury.”). Because the rule focuses on whether the plaintiff has suffered
a single, indivisible injury and not the alleged causes of action, the rule can apply
to both tort and contract claims. Sky View at Las Palmas, LLC v. Mendez, 555
S.W.3d 101, 113–15 (Tex. 2018). A trial court can grant summary judgment based
on application of the one satisfaction rule. See El Paso Natural Gas Co., 858
S.W.2d at 363 (“Because we find Berryman’s claims barred by the one satisfaction
rule and collateral estoppel, we reverse the judgment of the court of appeals and
affirm the [summary] judgment of the trial court.”).
As detailed above, Nalle filed two lawsuits wherein he sought to recover the
same damages allegedly caused his neighbor was granted a variance from two
different defendants: Westlake and Hale. Nalle’s alleged damages all related to the
allegedly negative impact the variance had on Nalle’s property and his use and
quiet enjoyment of that property. Nalle accepted $300,000 in full and final
settlement of his claims against Westlake “in any way related to, based upon, or
arising out of any of the facts, events, occurrences, circumstances, acts, omissions,
transactions, or relationships that he described in his Second Amended Petition.”
In addition, Nalle expressly settled his claims for “all monetary damages, statutory
or exemplary damages, attorney’s fees, court costs, and interest.” (emphasis added)
Hale moved for summary judgment on Nalle’s claims against her. See Tex.
R. Civ. P. 166a(b). Hale attached the Westlake Settlement Agreement as evidence
to her motion for summary judgment. It is undisputed that the settlement amount
was paid to Nalle. We hold that, as a result of the full and final settlement of
Nalle’s claims against Westlake, Hale proved as matter of law that Nalle is barred
by the one satisfaction rule from recovering the same damages against her. See
Brewer & Pritchard, P.C. v. AMKO Resources, Intern., LLC, No. 14-13-00113-
CV, 2014 WL 3512836, at *6 (Tex. App.—Houston [14th Dist.] July 15, 2014, no
8
pet.) (holding that because judgment creditor suffered only one injury, the one
satisfaction rule barred judgment creditor’s claims against second defendant
because judgment creditor accepted settlement payment from first defendant in
“full satisfaction of the judgment”).
In an effort to avoid this result, Nalle, citing Cohen v. Arthur Andersen,
L.L.P., 106 S.W.3d 304, 310 (Tex. App.—Houston [1st Dist.] 2003, no pet.),
argues the one satisfaction rule is inapplicable because it does not apply to claims
for punitive or exemplary damages. While it is true that the one satisfaction rule is
often inapplicable to punitive damage awards, here, Nalle chose to fully settle his
claims for both compensatory damages and exemplary damages arising out of
Westlake granting his neighbor a variance when he executed the Westlake
Settlement Agreement. See Shields Ltd. P’ship v. Bradberry, 526 S.W.3d 471, 482
(Tex. 2017) (“Freedom of contract is a policy of individual self-determination;
individuals can control their destiny and structure their business interactions
through agreements with other competent adults of equal bargaining power, absent
violation of law or public policy.”); In re Prudential Ins. Co. of Am., 148 S.W.3d
124, 129 (Tex. 2004) (“As a rule, parties have the right to contract as they see fit as
long as their agreement does not violate the law or public policy.”).
There is no dispute that Nalle received the full settlement amount. It is these
two facts, settlement of all claims and full payment, that take this case out of the
general rule. See El Paso Natural Gas Co., 858 S.W.2d at 364 (holding that
because the full settlement amount had been paid to the plaintiff by one defendant,
the one satisfaction rule extinguished plaintiff’s claims against second defendant).
As a result of this contractual agreement, the one satisfaction rule bars Nalle’s
claims against Hale. See Mobil Oil Corp. v. Ellender, 968 S.W.2d 917, 928 (Tex.
1998) (recognizing that one satisfaction rule can apply to settlement agreements
9
resolving claims for actual and punitive damages). Having determined that Hale
proved as a matter of law that the one satisfaction rule bars Nalle’s claims against
her, we need not address the remainder of the arguments Nalle raised in his single
issue on appeal. See Tex. R. App. P. 47.1. We overrule Nalle’s issue on appeal.
CONCLUSION
Having overruled Nalle’s single issue on appeal, we affirm the trial court’s
judgment.
/s/ Jerry Zimmerer
Justice
Panel consists of Justices Zimmerer, Spain, and Hassan.
10