Irma Barragan v. Nederland Independent School District

In The
Court of Appeals
Ninth District of Texas at Beaumont
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NO. 09-13-00350-CV
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IRMA BARRAGAN, Appellant
V.
NEDERLAND INDEPENDENT SCHOOL DISTRICT,
Appellee
________________________________________________________________________
On Appeal from the 172nd District Court
Jefferson County, Texas
Trial Cause No. E-191,975
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MEMORANDUM OPINION
Appellant Irma Barragan appeals the trial court’s enforcement of a purported
Rule 11 agreement to settle the lawsuit and dismissal with prejudice of her
personal injury lawsuit against appellee Nederland Independent School District
(“NISD”). Barragan raises seven issues for our consideration. We reverse the trial
court’s orders and remand the cause for further proceedings consistent with this
opinion.
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BACKGROUND
Barragan sued NISD and Janis L. Pokraka for injuries allegedly sustained
when Barragan’s vehicle, which was sitting at a stop sign, was struck by a NISD
bus driven by Pokraka when Pokraka made an improper left turn. Barragan
asserted a cause of action for negligence, and she alleged that Pokraka was acting
in the course and scope of her employment with NISD when the accident occurred.
Barragan also alleged that she suffered significant bodily injuries as a result of the
accident, and she asserted claims for both past and future medical expenses, as well
as pain and suffering, mental anguish, loss of enjoyment of life, and physical
impairment. Barragan pleaded that her damages “greatly exceed the sum of
$100,000.00[.]” Barragan eventually filed a motion to non-suit her claims against
Pokraka, and the trial court granted the motion. See Tex. Civ. Prac. & Rem. Code
Ann. § 101.106(e) (West 2011) (“If a suit is filed under this chapter against both a
governmental unit and any of its employees, the employees shall immediately be
dismissed on the filing of a motion by the governmental unit.”).
NISD asserted a general denial, specifically denied that it is liable in the
capacity in which Barragan sued it, and specifically denied liability for money
damages in excess of $100,000. NISD also alleged that Barragan was negligent in
operating her vehicle and contended any recovery by Barragan should be reduced
by her percentage of responsibility. The next document to appear in the clerk’s
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record after Barragan’s first amended petition is a letter, dated July 19, 2012, from
NISD’s counsel, Monica Wilkins, to Barragan’s counsel, Cynthia Frederick, in
which NISD offered to “settle this case” for $20,000 “inclusive of any and all
subrogation claims, healthcare liens, Medicaid liens, Medicare liens, workers’
compensation liens, hospital liens and/or child support liens.” The letter requested,
“[i]f your client agrees to settle for $20,000.00, please sign below and fax this
agreement back to me.” The letter, which was e-filed with the district clerk on
September 25, 2012, contains the signature of Frederick, but does not contain
Barragan’s signature. On September 27, 2012, Barragan filed a motion to
substitute Paul “Chip” Ferguson as her attorney, citing as grounds Frederick’s
alleged failure to communicate, failure to adequately represent Barragan, and
failure “to have or keep the client’s best interests[.]”
The next day, NISD filed a “Motion to Enforce Settlement Agreement[,]” in
which it contended that the letter signed by Frederick constituted “an enforceable
settlement agreement in accordance with Rule 11 of the Texas Rules of Civil
Procedure” and “[s]aid agreement constitutes in all things a contract of settlement
entered into . . . by the Plaintiff and Defendant.” NISD further asserted in its
motion that it had emailed a Compromise and Settlement Agreement, Release of
Claims, and Covenant Not to Sue, as well as a proposed Final Judgment, to
Frederick. Barragan filed a motion for continuance, in which she asserted that she
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never agreed to the Rule 11 agreement, Frederick lacked Barragan’s consent or
permission to enter into such an agreement, Frederick lacked authority to enter into
the agreement, and the Rule 11 agreement was not filed “until after [Barragan] had
discharged Ms. Frederick.” Barragan also contended that despite requests from
Barragan and Ferguson, Frederick had not provided Barragan with “any of her file
materials.”
On October 5, 2012, the trial court signed an order granting the motion to
substitute, naming Ferguson counsel of record for Barragan, and ordering
Frederick to send Barragan’s file to Ferguson within ten days. On October 10,
2012, NISD’s counsel sent a letter to Ferguson, in which NISD contended that
“there was an agreement to settle this case[]” and that “[t]he agreement constitutes
a contract which is subject to enforcement.” The letter demanded that Barragan
tender a signed release and take nothing judgment, and stated that if Barragan
refused to comply, NISD would “file a counterclaim for breach of contract” and
“seek attorney’s fees[.]” Two days later, NISD’s counsel sent another letter
demanding that Barragan either comply or be sued for breach of contract.
However, NISD did not file a counterclaim for breach of contract.
Barragan subsequently filed a response and memorandum of authorities
regarding the validity of the Rule 11 agreement. In that pleading, Barragan alleged
that she suffered significant injuries as a result of the accident, she had incurred
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$22,000 in past medical expenses, and she anticipated that her future medical care
would cost $118,000. Barragan pleaded that she had discharged Frederick and
retained Ferguson, and that “[i]t was only after learning of the termination of
Frederick that Wilkins filed the Rule 11 agreement. Stated another way, Wilkins
did not file the Rule 11 agreement until after any authority of Frederick had been
revoked[.]”
Attached to the response was Barragan’s affidavit, in which she swore that
in July 2012, she discussed the $20,000 settlement offer with Frederick, but
Barragan never agreed to settle her case. Barragan swore that:
I was told by [Frederick] that she had already settled my case and that
I had no choice. At that point, I was very frustrated and did not
understand how or why Ms. Frederick could or would settle my case
without my permission. I fired her as my attorney and eventually hired
Mr. Ferguson. From the point in time that I fired Ms. Frederick, she
was not authorized to act or work on my behalf. Before that time, she
had no authority or consent to settle my case for $20,000. . . .
. . . I would have never considered much less accepted a settlement
that was less than my medical bills.
Barragan also attached to her response the transcript of Frederick’s deposition.
Frederick testified in her deposition that in early to mid-September, Barragan
called and expressed concern over the amount of her medical bills, and Frederick
told Barragan “we’ve already made a deal[,]” and Barragan responded that “she
hadn’t signed anything yet.” The record reflects that Barragan terminated
Frederick’s representation of her by a letter dated September 19, 2012. In that
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letter, Barragan stated that she disagreed with Frederick’s evaluation of the value
of her case, and that she had told Frederick the settlement offer was “not good[.]”
On October 4, 2012, the trial court conducted a hearing on NISD’s motion to
enforce the Rule 11 agreement. Frederick was present at the hearing, and she
represented to the trial court that she spoke to Barragan by telephone on July 25
“and got clearance to settle. I explained to her the pros and cons. And she said that
that would be okay. She agreed at that time.” Wilkins argued at the hearing that
Barragan, as the principal, is bound by the conduct of her agent, Frederick.
Ferguson argued that because the Rule 11 agreement was not filed until after
Barragan terminated Frederick, the agreement is no longer valid. On November 27,
2012, the trial court signed an order granting NISD’s motion to enforce the Rule 11
agreement. The trial court’s order simply stated that NISD’s motion to enforce the
Rule 11 agreement was granted, but did not make any factual findings or order
Barragan to take any particular action.
NISD subsequently filed a motion to dismiss the cause with prejudice,
motion to adjudge costs, and request for attorney’s fees pursuant to Chapter 38 of
the Texas Civil Practice and Remedies Code. In the motion, NISD pleaded that it
filed the Rule 11 agreement after learning that Barragan had terminated Frederick.
NISD also pleaded that “pursuant to CPRC 38.001 proper notice was given to
[Barragan] regarding [NISD]’s intent to recover attorney[’s] fees[.]” On June 13,
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2013, the trial court conducted a hearing on NISD’s motion to dismiss, and on June
26, 2013, the trial court signed an order granting NISD’s motion to dismiss and
awarding court costs of $299.64 and attorney’s fees of $4839 to NISD, as well as
attorney’s fees of $4500 for appeal to the Court of Appeals, $3000 in the event
Barragan sought review at the Supreme Court, and $3000 if the Supreme Court
were to grant review. The trial court’s order did not order Barragan to sign a
settlement agreement, release, judgment, or otherwise specifically perform any
other obligations under the Rule 11 agreement, and it did not award damages to
NISD. Barragan then filed this appeal.
ISSUES THREE AND FOUR
In issue three, Barragan argues that the district court erred in entering a
judgment in favor of NISD on a breach of contract (or affirmative defense of
compromise and settlement) when no trial was held and no summary judgment was
filed. In issue four, Barragan contends the district court erred in awarding
attorney’s fees under Chapter 38 of the Civil Practice and Remedies Code when no
actual damages were awarded. We address these issues together.
When parties reach a settlement agreement in pending litigation, the court
may render an agreed judgment as long as no party has withdrawn consent. See
Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995). If a party has withdrawn
its consent, the settlement may be enforced as a contract if the agreement complies
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with the requirements of Rule 11 of the Texas Rules of Civil Procedure. Id. The
agreement may be filed with the trial court even after one of the parties withdraws
its consent, but it must be filed before one of the parties attempts to enforce it. Id.
Rule 11 of the Texas Rules of Civil Procedure provides, in pertinent part, that “no
agreement between attorneys or parties touching any suit pending will be enforced
unless it be in writing, signed and filed with the papers as part of the record, or
unless it be made in open court and entered of record.” Tex. R. Civ. P. 11.
Although the agreement need not be contained in one document, the writings must
be complete in every material detail and must contain all of the essential elements
of the agreement so that the agreement can be ascertained from the writing without
resorting to oral testimony. Padilla, 907 S.W.2d at 460.
When a party has withdrawn consent, a court may enforce the settlement
only as a written contract. Id. at 461; see Schriver v. Tex. Dep’t of Transp., 293
S.W.3d 846, 851 (Tex. App.—Fort Worth 2009, no pet.) (“Settlement agreements
are governed by the law of contracts.”) Thus, the party seeking enforcement must
pursue a separate claim for breach of contract, which is subject to the normal rules
of pleading and proof. Mantas v. Fifth Court of Appeals, 925 S.W.2d 656, 658
(Tex. 1996); see Ford Motor Co. v. Castillo, 279 S.W.3d 656, 663 (Tex. 2009)
(“Like any other breach of contract claim, a claim for breach of settlement
agreement is subject to the established procedures of pleading and proof.”). In
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actions to enforce settlement agreements, parties have “‘the right to be confronted
by appropriate pleadings, assert defenses, conduct discovery, and submit contested
fact issues to a judge or jury.’” Avary v. Bank of Am., N.A., 72 S.W.3d 779, 799
(Tex. App.—Dallas 2002, pet. denied) (quoting Cadle Co. v. Castle, 913 S.W.2d
627, 632 (Tex. App.—Dallas 1995, writ denied)).
Neither the Civil Practice and Remedies Code nor the Rules of Civil
Procedure creates a separate standard for enforcing disputed settlement agreements
that bypasses the common law pleading and proof requirements. See Mantas, 925
S.W.2d at 659 n.2; Cadle Co., 913 S.W.2d at 632; see also Ford Motor Co. v.
Castillo, 200 S.W.3d 217, 224 (Tex. App.—Corpus Christi 2006), rev’d on other
grounds by Castillo, 279 S.W.3d at 656. A motion to enforce a settlement
agreement is a sufficient pleading by which to raise a cause of action for breach of
contract. Neasbitt v. Warren, 105 S.W.3d 113, 117-18 (Tex. App.—Fort Worth
2003, no pet.); Browning v. Holloway, 620 S.W.2d 611, 615 (Tex. Civ. App.—
Dallas 1981, writ ref’d n.r.e.). However, “[t]he validity of a settlement agreement
cannot be determined without ‘full resolution of the surrounding facts and
circumstances.’” Castillo, 279 S.W.3d at 663 (quoting Quintero v. Jim Walter
Homes, Inc., 654 S.W.2d 442, 444 (Tex. 1983)). Due process requires notice and a
fair opportunity to be heard. In re Park Mem’l Condo. Ass’n, Inc., 322 S.W.3d 447,
450 (Tex. App.—Houston [14th Dist.] 2010, orig. proceeding). “Due process
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requires a full hearing before a court having jurisdiction, the opportunity to
introduce evidence at a meaningful time and in a meaningful manner, and the right
to judicial findings based on the evidence.” Id.
NISD effectively pleaded a breach of contract claim by filing its motion to
enforce. See Neasbitt, 105 S.W.3d at 117-18; Browning, 620 S.W.2d at 615.
However, the trial court did not order Barragan to sign a settlement agreement,
release, judgment, or otherwise specifically perform under the Rule 11 agreement,
and it did not award monetary damages to NISD. The trial court had before it
conflicting evidence from Barragan and Frederick regarding whether Frederick had
actual or apparent authority to settle Barragan’s case, and with the exception of the
monetary amount of the settlement and the liens to which it was intended to apply,
no evidence was before the trial court as to the specific terms of the purported
settlement agreement. See Padilla, 907 S.W.2d at 460. NISD did not present either
its motion to enforce the agreement or its motion to dismiss as a summary
judgment motion, a request for declaratory judgment, or a motion to dismiss under
Rule 91a of the Texas Rules of Civil Procedure, nor did it observe the procedures
applicable to seeking such final pretrial dispositions, and the trial court did not
conduct a bench trial. See generally Tex. Civ. Prac. & Rem. Code Ann. § 37.004
(West 2008); Tex. R. Civ. P. 91a, 166a. The trial court did not resolve any factual
issues, nor did it determine that no genuine issues of material fact exist. We
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conclude that the trial court erred by adjudicating the validity of the Rule 11
agreement and dismissing Barragan’s case with prejudice without either following
proper procedures for a final pretrial disposition or conducting a bench trial. See
Park Mem’l Condo., 322 S.W.3d at 450; Castillo, 279 S.W.3d at 663. Accordingly,
we sustain issue three.
Section 38.001 of the Civil Practice and Remedies Code provides that a
person may recover reasonable attorney’s fees, “in addition to the amount of a
valid claim and costs, if the claim is for. . . an oral or written contract.” Tex. Civ.
Prac. & Rem. Code Ann. § 38.001(8) (West 2008). To recover attorney’s fees
under section 38.001, a party must both prevail on a breach of contract claim and
recover damages. Berg v. Wilson, 353 S.W.3d 166, 182 (Tex. App.—Texarkana
2011, pet. denied); Rodgers v. RAB Invs., Ltd., 816 S.W.2d 543, 551 (Tex. App.—
Dallas 1991, no writ). In this case, the trial court did not award damages to NISD
in either its order granting NISD’s motion to enforce the Rule 11 agreement or its
order dismissing Barragan’s case with prejudice. Therefore, NISD is not entitled to
recover attorney’s fees pursuant to section 38.001. See Tex. Civ. Prac. & Rem.
Code Ann. § 38.001; Berg, 353 S.W.3d at 182; Rodgers, 816 S.W.2d at 551. We
sustain issue four. We need not address Barragan’s remaining issues, since they
would not result in greater relief. See Tex. R. App. P. 47.1. We reverse the trial
court’s orders granting NISD’s motion to enforce the Rule 11 agreement,
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dismissing Barragan’s case with prejudice and awarding attorney’s fees to NISD,
and we remand the cause for further proceedings consistent with this opinion.
REVERSED AND REMANDED.
_____________________________
CHARLES KREGER
Justice
Submitted on April 24, 2014
Opinion Delivered February 5, 2015
Before McKeithen, C.J., Kreger and Horton, JJ.
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