Bion Construction, Inc. v. Grande Valley Homes, LLC

• Court: Court of Appeals of Texas
• Decided: December 9, 2009
• Docket: 04-09-00060-CV
• Status: Published

Opinion

MEMORANDUM OPINION No. 04-09-00060-CV

BION CONSTRUCTION, INC., Appellant

v.

GRANDE VALLEY HOMES, LLC, Appellee

From the 57th Judicial District Court, Bexar County, Texas Trial Court No. 2007-CI-06065 Honorable Martha Tanner, Judge Presiding

Opinion by: Rebecca Simmons, Justice

Sitting: Sandee Bryan Marion, Justice Rebecca Simmons, Justice Marialyn Barnard, Justice

Delivered and Filed: December 9, 2009

AFFIRMED

Appellant Bion Construction, Inc. sued Appellee Grande Valley Homes, LLC for breach

of contract as well as breach of an alleged mediated settlement agreement. This appeal arises

from a final judgment wherein the trial court found no liability on behalf of Grande Valley and

awarded Bion $100.00 in damages resulting from the failed real estate transaction. Because the

evidence supports the trial court’s findings, we affirm the judgment of the trial court. 04-09-00060-CV

BACKGROUND

In the “Purchase and Sale Agreement” (PSA) at issue, the seller, Bion, is a successor-in-

interest land developer, and Grande Valley is the purchaser. Under the PSA, Bion was to

develop approximately fifty-acres of unimproved real property into 245 residential lots to be sold

to Grande Valley. 1 Once Bion substantially completed the development, Bion would convey

thirty lots every ninety-one days to the purchaser in official closings. Thus, after the first

closing, the next closing would automatically be ninety-one days later.

The first closing took place on December 13, 2006. Thereafter the parties entered into

another amendment to the PSA scheduling the second closing for no later than February 10,

2007. The second closing is the transaction at issue in this suit. The parties ran into further

problems arranging for the second closing. Bion sent Grande Valley a number of default notices

that included rights to cure. Grande Valley tendered its purchase money on March 21, 2007

claiming it was in accordance with Bion’s request. Bion claimed it had previously terminated

the PSA prior to March 21. Bion filed suit, but before serving Grande Valley, the parties

participated in a mediation. However, there is a dispute regarding whether a settlement

agreement was reached. After a bench trial, in its findings of fact and conclusions of law, the

trial court found Grande Valley did not breach the agreement and timely asserted its right to

cure.

STANDARD OF REVIEW

In a bench trial, the trial court, as fact-finder, is the sole judge of the credibility of the

witnesses. Sw. Bell Media, Inc. v. Lyles, 825 S.W.2d 488, 493 (Tex. App.—Houston [1st Dist.]

1992, writ denied). The trial court’s findings of fact have the same force and dignity as a jury’s

1 The contract was initially between Texas PMR, Inc. and Grande Valley Homes. Approximately six months after signing the agreement, PMR assigned the contract to Bion Construction.

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verdict upon jury questions. See Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994).

However, the findings of fact are not conclusive when a complete reporter’s record appears in

the record. Tucker v. Tucker, 908 S.W.2d 530, 532 (Tex. App.—San Antonio 1995, writ

denied).

When the trial court’s findings involve questions of law and fact, the appellate court

reviews them for an abuse of discretion. Pony Express Courier Corp. v. Morris, 921 S.W.2d

817, 820 (Tex. App.—San Antonio 1996, no writ). In applying the standard, the reviewing court

defers to the trial court’s factual determinations if they are supported by the evidence and

reviews its legal determinations de novo. Id. Unless they are erroneous as a matter of law,

conclusions of law will not be reversed, but rather, will be upheld on appeal if the judgment can

be sustained on any legal theory supported by the evidence. Tex. Dep’t of Pub. Safety v.

Stockton, 53 S.W.3d 421, 423 Tex. App.—San Antonio 2001, pet. denied).

In analyzing a legal sufficiency challenge, an appellate court reviews the evidence in the

light most favorable to the verdict in determining whether the evidence at trial would enable

reasonable and fair-minded people to reach the verdict under review. City of Keller v. Wilson,

168 S.W.3d 802, 821-22, 827 (Tex. 2005). In evaluating a factual sufficiency challenge, we

consider and weigh all of the evidence and determine whether the evidence in support of a

finding is so weak as to be clearly wrong and unjust or whether the finding is so against the great

weight and preponderance of the evidence as to be clearly wrong and manifestly unjust. Dow

Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001); Pool v. Ford Motor Co., 715 S.W.2d

629 (Tex. 1986).

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BREACH OF PURCHASE AND SALE AGREEMENT

Bion asserts the trial court erred in finding: (1) Grande Valley did not breach the PSA; (2)

Grande Valley timely asserted its right to cure; and (3) Bion refused to follow through with the

sale of the property. In construing a written contract, we ascertain and give effect to the parties’

intentions as expressed in the document. Frost Nat’l Bank v. L & F Distribs., Ltd., 165 S.W.3d

310, 311-12 (Tex. 2005); J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003).

We, therefore, look to the entire writing and attempt to harmonize and give effect to all the

provisions of the contract by analyzing these provisions with reference to the whole agreement.

J.M. Davidson, 128 S.W.3d at 229.

The evidence supports a number of amendments to the PSA extending the due diligence

period delayed the second closing. Each one of the eight amendments to the PSA was due to

Bion’s failure to complete the infrastructure of the property. Because of these problems, the

evidence supports Bion’s extension of the February closing date. Mark Dizdar, President of

Grande Valley, testified that Bion did not have the lots ready, and he knew of no scheduled

closing in February. On February 28, 2007, Bion’s attorney sent a twenty-day right to cure letter

to Grande Valley stating that Grande Valley “has 20 days from today’s date to cure the defaults.”

The original PSA permits a cure period and provides that the day the notice is sent is not counted

in the cure period. The evidence supports that Grande Valley provided the funds required to

close to the title company and was ready to close on March 21, 2007. As such, Grande Valley

was timely in its performance on March 21, 2007.

Bion’s arguments regarding Grande Valley’s right to cure period expiring on “February

10 vs. March 2”, as a matter of law, are without merit. Grande Valley received a twenty-day

right to cure letter from Bion signed on February 28, 2007. Bion argues the same February 28,

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2007 letter offering the right to cure effectively terminated the PSA. However, Grande Valley

asserted defenses of estoppel and waiver before the trial court and the evidence in the record

supports that Grande Valley was ready to close on March 21, 2007, and Bion refused to go

through with the sale of the property. Accordingly, we defer to the trial court’s findings that

Grande Valley did not breach the PSA, and that Bion refused to perform under the contract. See

Catalina, 881 S.W.2d at 297.

MEDIATED SETTLEMENT AGREEMENT

Bion asserts the evidence does not support the trial court’s finding that there is no

mediated settlement agreement (MSA). Grande Valley argues there was never an intent to be

bound by the negotiations and no mediated settlement agreement ensued. We agree.

A. Intent to Be Bound

A mediated settlement agreement is enforceable in the same manner as any other

contract. TEX. CIV. PRAC. & REM. CODE ANN. § 154.071 (a) (Vernon 2005). Its construction is

governed by legal principles applicable to contracts generally. Donzis v. McLaughlin, 981

S.W.2d 58, 61 (Tex. App.—San Antonio 1998, no pet.). The intent of the parties to be bound by

a mediated settlement agreement is an essential element of an enforceable contract and is

generally a question of fact; however, where that intent is clear and unambiguous on the face of

the agreement, it may be determined as a matter of law. Anderton v. Schindler, 154 S.W.3d 928,

932 (Tex. App.—Dallas 2005, no pet.); see also Foreca, S.A. v. GRD Dev. Co., Inc., 758 S.W.2d

744, 746 (Tex. 1988) (“[I]ntention is usually an inference to be drawn by the fact finder.”).

The parties agreed to mediate on April 25, 2007. Present at the mediation were attorneys

for each side, Howard Kahn and Jesse Murphy, as well as John Ripley, President of Bion, and

Larry Contreras, Grande Valley San Antonio Division President. The parties negotiated the

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MSA during the mediation. The initial pages of the MSA show disagreement as to the terms,

and the final pages show a new hand written agreement with initials from the attorneys on each

page. The final page of the MSA contains signatures from both attorneys under the heading

“Approved as to Form.” Ripley also signed in the space for Bion; however, the space for Grande

Valley is clearly blank. At trial, Murphy testified that Contreras did not have authority to bind

the company at the mediation, but rather “Mr. Dizdar [as President of Grande Valley] needed to

sign the agreement.” The evidence confirms that the attorneys and representatives left the

meeting believing the parties had not reached an agreement. Based on our deference to the trial

court’s findings of fact, we affirm the trial court’s determination that there was no mediated

settlement agreement. See Foreca, 758 S.W.2d at 746.

B. Apparent or Actual Authority

Bion also argues, that even if Grande Valley did not intend to be bound, that Grande

Valley was bound under the theory of apparent or actual authority because its counsel signed the

MSA. Grande Valley asserts that while a party may clothe his attorney with actual or apparent

authority, this was a fact issue that the trial court determined in its favor.

Undoubtedly, a party may clothe his attorney with actual or apparent authority to reach

and sign a settlement agreement that binds the client. See Williams v. Nolan, 58 Tex. 708, 713-

14 (1883); accord W. Beach Marine, Ltd. v. Erdeljac, 94 S.W.3d 248, 256 (Tex. App.—Austin

2002, no pet.). The presumption of actual authority, however, may be rebutted by affirmative

proof that the client did not authorize his attorney to enter into the settlement. Johnson v.

Rancho Guadalupe, Inc., 789 S.W.2d 596, 598 (Tex. App.—Texarkana 1990, writ denied) (op.

on reh’g) (noting that there is no implied authority for an attorney to release the very right or

interest he is employed to protect); Fail v. Lee, 535 S.W.2d 203, 207-08 (Tex. Civ. App.—Fort

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Worth 1976, no writ) (affirming summary judgment enforcing settlement agreement absent proof

that defendant did not authorize his attorney to settle).

Additionally, to establish apparent authority, the principal must make some manifestation

to a third party that it is conferring authority or, by its actions, shows such a lack of ordinary care

as to clothe the agent with indicia of authority. NationsBank, N.A. v. Dilling, 922 S.W.2d 950,

952-53 (Tex. 1996); see also Ames v. Great S. Bank, 672 S.W.2d 447, 450 (Tex. 1984). A fact

issue may arise as to whether an attorney has authority to bind the client to a mediation

agreement. See Martin v. Black, 909 S.W.2d 192, 195 (Tex. App.—Houston [14th Dist.] 1995,

writ denied) (holding that fact disputes over existence of MSA should be settled by fact finder).

Bion asserts that because Grande Valley previously allowed its attorneys to sign binding

contracts, that Grande Valley created apparent authority in its counsel, Murphy. Bion suggests

the signature of Grande Valley’s counsel, Murphy, under the heading “Approved as to Form”

binds Grande Valley to the substance of the MSA.

It is well settled that when the notation “Approved as to Form” appears with an attorney’s

signature, it does not create the same consent to substance as the notation “Approved as to Form

and Substance” or “Approved as to Content”. 2 In fact, this court previously held “when an

attorney’s signature indicates ‘Approved’ he has simply approved the judgment as to form only,

unless other language in the judgment indicates that the substance of the judgment was also

agreed.” Bexar County Criminal Dist. Attorney’s Office v. Mayo, 773 S.W.2d 642, 644 (Tex.

App.—San Antonio 1989, no writ). Even further, this court later held that “Approved and

Agreed” standing alone does not establish a consent decree. Oryx Energy Co. v. Union Nat’l

2 See e.g., Hill v. Bellville Gen. Hosp., 735 S.W.2d 675, 678 (Tex. App.—Houston [1st Dist.] 1987, no writ) (holding notation “Approved,” standing alone, insufficient to establish a consent judgment); Morse v. Delgado, 975 S.W.2d 378, 381 (Tex. App.—Waco 1998, no pet.) (holding that counsel’s signature indicating that he did not oppose the form of the judgment did not make it an agreed judgment).

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Bank of Tex., 895 S.W.2d 409, 417 (Tex. App.—San Antonio 1995, writ denied). Bion

presented no evidence at trial, and submits no authority on appeal, to suggest the attorneys meant

anything more than the plain meaning of “Approved as to Form.” Accordingly, the trial court

did not err in its determination that the parties did not enter into a binding MSA. 3

DAMAGES

Finally, in its last two issues, Bion argues that it was entitled to substantial damages and

attorneys’ fees. However, having determined there is sufficient evidence to support the trial

court’s findings that Grande Valley did not breach the PSA or enter into the MSA, such

arguments are without merit.

CONCLUSION

Based on the record before us, the evidence supports the trial court’s findings that Grande

Valley did not breach the contract and that no mediated settlement agreement existed between

the parties. Accordingly, the judgment of the trial court is affirmed.

Rebecca Simmons, Justice

3 On appeal, Bion argues that the MSA “is also a Rule 11 Agreement.” However, Bion did not refer to the MSA as a Rule 11 agreement in the pleadings, trial, or motion for new trial. Pursuant to Rule 33.1, Bion has waived this issue on appeal. TEX. R. APP. PROC. 33.1 (a prerequisite to presenting a complaint for appellate review is a record showing the complaint was made before the trial court and either a ruling or objection to a refusal to rule appears on the record).

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