Cecil Adams and Maxine Adams v. Rebecca Ross

Opinion

Opinion issued August 2, 2016

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-15-00315-CV ——————————— CECIL ADAMS AND MAXINE ADAMS, Appellants V. REBECCA ROSS, Appellee

On Appeal from the County Civil Court at Law No. 3 Harris County, Texas Trial Court Case No. 1044023

MEMORANDUM OPINION

This is an appeal from a summary judgment enforcing a settlement agreement.

Appellants Cecil and Maxine Adams contend that the settlement agreement was not

a valid contract. Alternatively, they contend that specific performance was not

justified and that the trial court impermissibly altered the settlement terms. We hold that the agreement is valid and enforceable by specific performance,

but that the trial court erred by altering its terms. We therefore affirm in part, reverse

in part, and remand this suit for enforcement of the agreement in accordance with its

terms.

Background

In March 2010, appellee Rebecca Ross secured a default judgment against her

former tenants, Cecil and Maxine Adams, in a forcible-detainer suit in justice court.

Since then the parties have litigated multiple related suits in multiple courts. The

Adamses filed the suit underlying this appeal, in which they collaterally attacked the

March 2010 default judgment on the grounds that it was obtained by fraud and

without service of process.1 Ross denied their allegations.

In September 2014, the parties mediated their disputes and executed an

agreement “to settle all matters arising out of” their prior landlord-tenant

relationship, with the caveat that the Adamses retained the right to file an unopposed

motion for summary judgment regarding their collateral attack on the prior default

judgment, as well as the right to appeal any adverse decision on that motion.

1 A judgment that is void “can be collaterally attacked at any time.” PNS Stores, Inc. v. Rivera, 379 S.W.3d 267, 272 (Tex. 2012). Judgments obtained with “a complete failure or lack of service” are void. Id. at 273–75. Judgments obtained by a “fraud that denies a losing party the opportunity to fully litigate at trial all the rights or defenses that could have been asserted” also can be collaterally attacked. Browning v. Prostok, 165 S.W.3d 336, 347–48 (Tex. 2005).

2 Otherwise, the agreement required the parties to execute various documents relating

to their lawsuits within 21 days. They concluded the agreement with the following

capitalized language: “THE PARTIES AGREE THAT THIS AGREEMENT IS

BINDING AND IRREVOCABLE. THE PARTIES INTEND TO FULLY SETTLE

ALL DISPUTES BETWEEN THEM.” Immediately below this language, the

Adamses signed the agreement. Ross’s counsel represented that he had the authority

to sign the agreement on his client’s behalf, and he did so.

When the Adamses refused to execute the required documents, Ross amended

her answer to assert a counterclaim for breach of contract, and she sought specific

performance of the settlement agreement. She subsequently moved for summary

judgment on her counterclaim. The motion explicitly stated that Ross sought to

enforce the parties’ agreement by specific performance and that she was not

attempting to prove the invalidity of the Adamses’ underlying claims. The Adamses

opposed the motion. The trial court granted Ross’s summary-judgment motion

requesting specific performance, and it rendered a final judgment in her favor. The

judgment ordered the Adamses to sign the documents required by the settlement

agreement, and it dismissed their collateral attack on the prior default judgment. The

Adamses filed a motion requesting that the trial court reconsider its summary

judgment, which was denied by operation of law. The Adamses appealed.

3 Analysis

I. Appellate jurisdiction

Ross moved to dismiss the appeal for want of jurisdiction as untimely. A party

who wishes to appeal to this court generally must file a notice of appeal within 30

days after the trial court signs its judgment, or within 90 days after the trial court

signs its judgment if any party files a timely motion for new trial. TEX. R. APP. P.

26.1. We treat a motion for reconsideration that seeks modification or reversal of a

judgment as a motion for new trial. TEX. R. CIV. P. 329b(g); Fox v. Wardy, 318

S.W.3d 449, 451 n.1 (Tex. App.—El Paso 2010, pet. denied). Motions for new trial

or reconsideration must be filed within 30 days after the trial court signs its

judgment. TEX. R. CIV. P. 329b(a), (g).

The trial court signed its judgment on January 5, 2015. The Adamses moved

to reconsider the judgment on January 30. Their motion therefore was timely and

extended the deadline to appeal from the January 5 judgment to 90 days. See TEX.

R. APP. P. 26.1(a)(1)–(2). On April 2, the Adamses filed their notice of appeal—87

days after the trial court signed its judgment. Thus, the notice of appeal was timely

filed, and we deny Ross’s motion to dismiss. See id.

II. Enforceability of settlement agreement

The Adamses contend that the settlement agreement is invalid because Ross’s

counsel signed it on her behalf. They argue that the Texas Family Code and contract

4 law required her to personally sign the agreement for it to be binding. In the

alternative, the Adamses contend that Ross was not entitled to specific performance

because she failed to prove her willingness to perform her part of the agreement.

They further contend that the trial court did not enforce the agreement as written and

instead impermissibly made a new contract for the parties by ignoring one of its

terms.

The trial court granted Ross’s traditional motion for summary judgment,

which required a demonstration that no genuine issue of material fact existed and

that she was entitled to judgment as a matter of law. See TEX. R. CIV. P. 166a(c). We

review a summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d

656, 661 (Tex. 2005). In determining whether a genuine issue of material fact exists,

“we take as true all evidence favorable to the nonmovant, and we indulge every

reasonable inference and resolve any doubts in the nonmovant’s favor.” Kachina

Pipeline Co., Inc. v. Lillis, 471 S.W.3d 445, 449 (Tex. 2015) (quoting Provident Life

& Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003)). We must confine

our review to the grounds for judgment expressly presented in the motion.

McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 339–41 (Tex. 1993).

A. Inapplicability of Family Code

The Adamses contend that the trial court erred by failing to apply a signature

requirement imposed by Section 153.0071 of the Texas Family Code. They argue

5 that this statute requires that each party to a mediated settlement agreement sign it

in order for the agreement to be valid and binding. Because the applicability of a

statute presents a question of law, we review this issue de novo. Phillips v. Dow

Chem. Co., 186 S.W.3d 121, 130 (Tex. App.—Houston [1st Dist.] 2005, no pet.).

Section 153.0071 is part of Title 5 of the Texas Family Code, which concerns

the parent-child relationship and suits affecting that relationship. Its party-signature

requirement for mediated settlement agreements applies solely to “a suit affecting

the parent-child relationship.” TEX. FAM. CODE § 153.0071(c), (d)(2). None of the

claims in this suit affect a parent-child relationship. Section 153.0071 therefore does

not apply to the parties’ settlement agreement.

B. Validity of signature

The Adamses further contend that the settlement agreement is not valid as a

matter of contract law because Ross did not personally sign it. See TEX. CIV. PRAC.

& REM. CODE § 154.071(a) (a settlement agreement “is enforceable in the same

manner as any other written contract”); Bayway Servs., Inc. v. Ameri-Build Constr.,

L.C., 106 S.W.3d 156, 160 (Tex. App.—Houston [1st Dist.] 2003, no pet.) (party

seeking to enforce a settlement agreement must prove that a “a contract existed

between the parties”). They argue that the lawyer’s signature on the document is

legally ineffective to create a binding contract between them and Ross.

6 The attorney-client relationship is one of agency, and the default rule is that

the attorney’s acts are attributable to and binding on the client. Dow Chem. Co. v.

Benton, 357 S.W.2d 565, 567–68 (Tex. 1962); Associated Press v. Cook, 17 S.W.3d

447, 455–56 (Tex. App.—Houston [1st Dist.] 2000, no pet.). When “an attorney has

been expressly authorized to bind his client by a compromise or settlement of the

claim, such a grant of power is valid in the absence of fraud of the attorney.” Mandell

& Wright v. Thomas, 441 S.W.2d 841, 847 (Tex. 1969). In addition, there is a

presumption that an attorney is “acting within the authority given by the client.”

Kelly v. Murphy, 630 S.W.2d 759, 761 (Tex. App.—Houston [1st Dist.] 1982, writ

ref’d n.r.e.).

The Adamses do not allege fraud on the part of the Ross’s counsel. Nor is

there evidence that rebuts the presumption that Ross’s counsel had the authority to

sign the settlement on her behalf. To the contrary, the agreement contains a

representation that the attorney had “full authority” from Ross “to sign” it and bind

her to its terms. This representation is corroborated by Ross’s continued request for

specific performance of the settlement agreement. Thus, the agreement is a valid,

binding contract.

C. Specific performance

The Adamses argue that Ross is not entitled to the remedy of specific

performance because there is no evidence that she performed or was willing to

7 perform her obligations under the settlement agreement. See DiGiuseppe v. Lawler,

269 S.W.3d 588, 593–94 (Tex. 2008). Because Ross sought specific performance by

summary judgment she was required to prove conclusively her entitlement to this

remedy. See TEX. R. CIV. P. 166a(c); see, e.g., Ardmore, Inc. v. Rex Group, Inc., 377

S.W.3d 45, 61 (Tex. App.—Houston [1st Dist.] 2012, pet. denied).

A party seeking specific performance of a contract need not tender

performance or perform her own obligations under the contract if the other party’s

breach renders tender or performance useless or ineffective. DiGiuseppe, 269

S.W.3d at 594; see also Luccia v. Ross, 274 S.W.3d 140, 147 (Tex. App.—Houston

[1st Dist.] 2008, pet. denied) (naked refusal to perform contract by breaching party

excuses plaintiff from making presuit tender). To the extent the Adamses breached

first by refusing execute settlement documents, Ross was required to prove only that

she remained ready, willing, and able to perform her part of the settlement

agreement. See DiGiuseppe, 269 S.W.3d at 599–603. The agreement required Ross’s

attorney to prepare certain documents to effectuate settlement. These documents

were attached to the motion for summary judgment. The agreement also required

Ross or her insurer to pay $19,000 to the Adamses. In an affidavit accompanying the

motion for summary judgment, Ross’s counsel averred that his client “had the

consideration ready to go by a State Farm Check.” A voided copy of this check was

attached to the summary-judgment motion. In his affidavit, counsel further attested

8 to his efforts to finalize the settlement, stating that the breach-of-contract

counterclaim was filed only after the Adamses “ceased to cooperate on the closing

of the final settlement with all of its associated documents.” Taken together, these

circumstances established Ross’s readiness, willingness, and ability to fulfill her

contractual obligations.

The record is devoid of contrary evidence that would establish a genuine issue

of material fact with respect to Ross’s readiness, willingness, and ability to perform

her part of the settlement agreement. The Adamses argue that Ross’s failure to

actually sign the papers required by the agreement and have them notarized is proof

of her unwillingness to fulfill her contractual obligations. Similarly, they contend

that Ross’s inclusion of a voided copy of a settlement check with her summary-

judgment motion, as opposed to the actual check, is proof of her unwillingness to

perform her obligations under the agreement. However, these circumstances—

failure to provide notarized signatures or include the actual settlement check—are at

best evidence of nonperformance, not unreadiness, unwillingness, or inability to

perform. Ross was not required to perform her part of the settlement agreement,

given the Adamses’ repudiation of the agreement and refusal to settle. See

DiGiuseppe, 269 S.W.3d at 599–603; Luccia, 274 S.W.3d at 147. The evidence

noted by the Adamses does not raise a genuine issue of material fact with respect to

Ross’s readiness, willingness, and ability to perform her obligations under the

9 settlement agreement. Consequently, Ross proved her entitlement to specific

performance as a matter of law. We therefore hold that the trial court did not err by

determining that Ross was entitled to specific performance of the agreement.

D. Implementation of contractual terms

The Adamses contend that the summary judgment impermissibly altered the

terms of the parties’ settlement agreement, rather than ordering specific performance

of its unambiguous written terms. See Fiess v. State Farm Lloyds, 202 S.W.3d 744,

753 (Tex. 2006) (when contractual language “‘is plain and unambiguous, courts

must enforce the contract as made by the parties, and cannot make a new contract

for them, nor change that which they have made under the guise of construction’”

(quoting E. Tex. Fire Ins. Co. v. Kempner, 27 S.W. 122, 122 (Tex. 1894))). The

construction of an unambiguous contract presents a question of law, which we

review de novo. Tawes v. Barnes, 340 S.W.3d 419, 425 (Tex. 2011).

The parties’ settlement agreement provided that the Adamses would file a

motion for summary judgment regarding their collateral attack on the default

judgment. Ross agreed not to oppose this motion. The Adamses retained the right to

appeal in the event that the trial court denied their unopposed motion.

The summary judgment enforcing the settlement agreement, however,

dismissed the Adamses’ claims. Thus, while the trial court purported to order

specific performance, the judgment disregarded the provisions of the parties’

10 agreement that carved out the collateral attack for further court proceedings. Under

the judgment, the Adamses were denied the contractually agreed opportunity to

present an unopposed summary-judgment motion for consideration. The judgment

therefore transgressed the well-settled rule that when a court orders specific

performance it generally must require “it of both sides, so far as anything is left to

be performed.” Lone Star Salt Co. v. Tex. Short Line Ry. Co., 90 S.W. 863, 867 (Tex.

1906); see also Capps v. Joiner, 69 S.W.2d 853, 855 (Tex. Civ. App.—Texarkana

1934, writ dism’d) (“Mutuality in enforcement as to both parties is essential to

support the remedy of specific performance in favor of either party.”). The trial court

thus erred by ordering specific performance of less than all of the settlement

agreement’s terms. See Okon v. Levy, 612 S.W.2d 938, 943 (Tex. Civ. App.—Dallas

1981, writ ref’d n.r.e.) (“The basis for a decree of specific performance must be the

agreement of the parties.”).

On appeal, Ross contends that, given the Adamses’ breach of the settlement

agreement, the trial court was entitled to order partial specific performance of its

terms. In support, she primarily relies on English v. Jones, 274 S.W.2d 666 (Tex.

1955), in which the court approved partial specific performance of a real-estate

contract and rejected the contention that ordering partial performance made a new

11 contract for the parties. English, 274 S.W.2d at 668. English and the other real-estate

contract cases on which Ross relies,2 however, are readily distinguishable.

In English, the plaintiff contracted to purchase land from the defendant, but

the defendant owned only a partial interest in the parcel. Id. at 667. When the parties

executed the contract, the plaintiff justifiably believed that the defendant would be

able to convey full title. Id. at 669. On these facts, the Supreme Court of Texas

affirmed a judgment ordering the defendant to convey the partial interest she held,

with a discount to the same purchase price corresponding to the fraction of

ownership she did not possess and therefore could not convey. Id. at 667–69. English

and other real-estate cases ordering partial specific performance, however, differ

from this case in two significant ways. First, in real-estate cases like English, when

the ownership rights of third parties preclude complete performance, the only

specific performance that can be ordered is partial performance. See id. at 669

(discussing interests of third parties that the defendant could not convey). In contrast,

no third-party interests bear on the settlement agreement in this case and nothing

prevents full performance of its terms as written. Second, when a purchaser seeks

partial specific performance of a real-estate contract, the performance ordered by the

2 In addition to English, Ross relies upon Walzem Dev. Co. v. Gerfers, 487 S.W.2d 219 (Tex. Civ. App.—San Antonio 1972, writ ref’d n.r.e.), and Villareal v. De Montalvo, 231 S.W.2d 964 (Tex. Civ. App—San Antonio 1950, no writ).

12 courts is incomplete with respect to both sides of the transaction—the seller conveys

ownership to the extent of its interest and the buyer pays a reduced purchase price

reflecting the incomplete conveyance. See id. at 667, 669. Thus, mutuality in

enforcement as to both parties exists despite the partial nature of their performance.

In contrast, the specific performance ordered in this case lacks mutuality in

enforcement. The Adamses lost one of the benefits guaranteed by the settlement

agreement (preservation of the collateral attack) while being ordered to fully perform

their obligations.

Ross also suggests that we may uphold the trial court’s judgment on the

ground that the Adamses forfeited their contractual right to present an unopposed

summary-judgment motion by failing to file one before the rendition of judgment

and by refusing to honor the other provisions of the settlement agreement. However,

a “defendant’s breach or repudiation should not alter the contract and give the non-

breaching party a contract different from what he had.” DiGiuseppe, 269 S.W.3d at

600. Ross sought specific performance of the agreement, which requires

enforcement according to its terms. See Mun. Gas Co. v. Lone Star Gas Co., 259

S.W. 684, 689 (Tex. Civ. App.—Dallas 1924) (specific performance “is the actual

accomplishment of a contract”), aff’d, 3 S.W.2d 790 (Tex. 1928). To ignore one of

its provisions “would be to rewrite the contract.” MCZ, Inc. v. Triolo, 708 S.W.2d

49, 54 (Tex. App.—Houston [1st Dist.] 1986, writ ref’d n.r.e.).

13 We therefore conclude that the trial court erred by dismissing the Adamses’

collateral attack on the justice court’s default judgment. The basis for an order of

specific performance must be the contract. Okon, 612 S.W.2d at 943. Dismissal of

the Adamses’ collateral attack was inconsistent with the settlement agreement,

which gave them a right to present an unopposed motion for summary judgment and

appeal any adverse ruling. By ordering specific performance of all of the

agreement’s terms except this one, the judgment impermissibly made a new contract

for the parties in the guise of construing it. See Fiess, 202 S.W.3d at 753. We

therefore sustain the Adamses’ objection to the dismissal of their collateral attack.

III. Motion to vacate

The Adamses filed a motion requesting that this court vacate the justice

court’s March 2010 default judgment based on the appellate record. Because the

parties’ settlement agreement provides for presentation of this matter to the trial

court in the first instance, we deny the motion.

14 Conclusion

We reverse the dismissal of the Adamses’ collateral-attack claims. In all other

respects we affirm the judgment. The cause is remanded for enforcement of the

parties’ valid and binding settlement agreement in accordance with its terms.

Michael Massengale Justice

Panel consists of Justices Higley, Bland, and Massengale.