Garcia v. Banda

935 S.W.2d 790, 1996 Tex. App. LEXIS 4150, 1996 WL 525475

• Court: Court of Appeals of Texas
• Decided: September 18, 1996
• Docket: No. 04-95-00382-CV
• Status: Published

Opinions

CHAPA, Chief Justice.

This is an appeal from an order granting appellees’ Motion to Enforce Settlement and Set Friendly Suit. On five points of error, appellants contend that the trial court erred in granting the motion. We reverse and remand.

BACKGROUND

On December 7, 1991, Javier Garcia was involved in an automobile accident which rendered him brain damaged and incapacitated. On February 25, 1993, prior to any lawsuit being filed, appellants’ attorney, B. Mills La-tham, offered to settle the Garcias’ claims against appellees for $60,000. In making this offer of settlement, Latham indicated that if the checks and releases were not received by March 12, 1993, the offer would be withdrawn. According to appellees’ attorney, Shirley Hale Mathis, she contacted appellants’ attorney and accepted the offer, but indicated her concerns regarding the necessity of a friendly suit. She believed a friendly suit was appropriate in order to appoint attorneys ad litem to represent the interests of Javier’s infant daughter, Jessica, and the incapacitated Javier in the settlement. According to Mathis, she and Latham agreed to postpone the issuance of settlement checks until a friendly suit could be filed and heard.

On March 24, 1993, Latham notified Mathis that he planned to file suit on behalf of appellants as the March 12, 1993, settlement deadline had passed. Shortly thereafter, appellants filed an adverse suit. Appellees filed a Motion to Enforce Settlement and Set Friendly Suit (“motion to enforce”), alleging that appellants had reneged on their agreement to extend the settlement deadline. Appellants denied that any such agreement existed. Following a hearing in which both parties were represented by counsel and Javier and Jessica were represented by court-appointed attorneys ad litem, the court granted the motion to enforce. Appellees then agreed to dismiss their third party action against Javier’s parents and proceed with a friendly suit.

ARGUMENTS ON APPEAL

In their first point of error, appellants urge that the trial court erred in granting appellees’ motion to enforce because the evidence was legally insufficient to support a finding that a settlement agreement existed. It is undisputed that a settlement offer of $60,000 was made in this case. The controlling issue is whether the attorneys for appellants and appellees entered into an oral agreement that operated to extend the settlement deadline pending the filing of a friendly suit.

We review whether the trial court erred in determining that there was evidence to support the existence of an enforceable settlement agreement under a “no evidence” standard. Accordingly, we must review only evidence and reasonable inferences that tend to support the trial court’s finding and disregard all evidence and inferences to the contrary. Stafford v. Stafford, 726 S.W.2d 14, 16 (Tex.1987). If there is any evidence of probative force that tends to support the finding, the finding must be upheld. Southern States Transp., Inc. v. State, 774 S.W.2d 639, 640 (Tex.1989). In other words, if there is more than a scintilla of evidence to support the finding, the no evidence challenge fails. Stafford, 726 S.W.2d at 16.

At the hearing on appellees’ motion to enforce, appellants’ attorney denied that La-tham entered into an oral agreement whereby the settlement deadline was extended. Appellees’ attorney, Mathis, argued that the agreement at issue did in fact exist and that appellants’ counsel had reneged on it. The only evidence Mathis introduced in support of her position was a letter she had written in response to Latham’s notification of his intention to file suit. The letter references the alleged agreement and indicates that it was Mathis’ understanding that the case had been settled pending the filing of a friendly suit.

Appellants contend, first, that Mathis’ assertions regarding the alleged agreement were unsworn and, therefore, not proper evidence before the court. Appellants also contend that Mathis’ letter, as the only remaining evidence before the trial court, is insufficient to support the court’s finding of an enforceable settlement agreement. We agree.

Mathis argued her motion before the court as appellees’ attorney and was never placed under oath. If her statements were to be considered evidence, they were required to be made under oath, absent a waiver of the oath by appellants. See Fullenwider v. American Guarantee & Liability Ins. Co., 821 S.W.2d 658, 662 (Tex.App.—San Antonio 1991, writ denied); Bloom v. Bloom, 767 S.W.2d 463, 471 (Tex.App.—San Antonio 1989, writ denied). However, such waiver is required and could have taken place only when appellants’ attorney knew or should have known that an objection was necessary. See Beck v. State, 719 S.W.2d 205, 213 (Tex.Crim.App.1986); Bloom, 767 S.W.2d at 471.

In Bloom, the court held that the unsworn statements of the plaintiffs attorney could not be considered as evidence where the defaulting defendant “could not and did not waive the ‘swearing in’ of the attorney.” Bloom, 767 S.W.2d at 471 (emphasis added). Appellees attempt to distinguish Bloom, arguing that the holding therein applies only in a default setting where a party is not present to waive the formality of an oath. We, however, conclude that the reasoning in Bloom is applicable to the circumstances of the present case. Where a party is justifiably unaware of the need to object, his failure to object should not be deemed waiver, particularly where the result is a denial of his right to trial.

There is no indication in this record that Mathis’ statements were considered anything other than argument by opposing counsel. Towards the end of Mathis’ argument to the court, she stated “[y]our honor, as an officer of the court I can just state under oath what — what I am telling the court and what my representations were by Latham and the understanding I had.” However, this assertion took place only after she had argued the issue completely and it merely reflects what she perceived to be her agreement. Following this assertion, Mathis concluded her argument with no change in delivery or form.

At no time was Mathis placed under oath, nor did she take the stand or submit to examination from either the court or opposing counsel. Further, the trial court gave no indication that it was accepting Mathis’ argument as testimonial evidence. Neither, does the record distinguish between Mathis’ alleged testimony and her argument to the court. Accordingly, we find nothing in this record to indicate that appellants’ counsel knew or should have known that an objection was necessary during argument to prevent waiver.¹

If we were to accept appellees’ contention and find that appellants’ attorney waived the administration of the oath by failing to object to Mathis’ argument, attorneys would feel compelled to interrupt argument of opposing counsel and demand that counsel be placed under oath in order to ensure preservation of error should one attorney later claim that his argument was considered by the court as testimony. In order for an attorney’s statements to be considered as evidence by the court, there must be something in the record which clearly indicates that all concerned were aware that the statements were meant to be testimony. Otherwise, neither the trial court nor the opposing party is on notice that counsel’s statements are intended to be considered as testimony. This is particularly true in proceedings resulting in the denial of a party’s right to litigate his claims before a trier of fact. In such situations, particular effort should be made to protect the interests of both parties.

It is in this respect that we find this case factually distinguishable from Fullenwider. The dissent contends that our holding is in conflict with our holding in Fullenwider. However, in Fullenwider, the issue before the court was whether the testimony of certain witnesses should have been excluded as the defendant failed to supplement its answers to plaintiffs interrogatories requesting disclosure of those witnesses. The central question, therefore, was whether the defense counsel, having the responsibility to supplement, could show good cause for the failure. The sole showing of good cause for the lack of supplementation was the unsworn statements of the defendant’s attorney.

As the burden for showing good cause was clearly on defendant’s attorney, this was the only evidence that those involved anticipated. Therefore, since the record clearly showed that all concerned were aware that the statements of defense counsel were intended to be testimony, we held that the statements could be considered as evidence because the attorney for the plaintiff allowed the defendant’s attorney to testify without objection. Ful-lenwider, 821 S.W.2d at 662.

There is a clear distinction between the facts of this case, and the facts in Fullenwider. Fullenwider involved an evidentiary question affecting the trial on the merits. The court’s decision did not deprive either party of their day in court. The purpose of the hearing in the present case was not to resolve a pretrial matter with a showing of good cause. Rather, the hearing had the effect of terminally disposing of one party’s right to present its case to a jury. The burden on the proponent was not merely to show good cause, but to clearly establish a meeting of the minds which would justify denying an objecting party its right to present its case to the trier of fact. An opposing attorney is justified in expecting more than mere argument from the proponent in satisfying this burden. Accordingly, we find Ful-lenwider distinguishable.

As previously noted, the facts of this case are more closely analogous to those in Bloom. The proceeding in question resulted in the denial of appellants’ right to a trial, as did the default judgment in Bloom. A judgment dismissing an entire lawsuit is of such a serious nature that it should rest on more compelling evidence than the unsworn arguments of an attorney. See De La Garza v. Salazar, 851 S.W.2d 380, 383 (Tex.App.—San Antonio 1993, no writ) (indicating default judgment resting on unsworn statements of attorney of more serious nature than hearing to determine medical expenses).

Because it is virtually impossible to determine from this record which portions of Mathis’ statements, if any, were intended to be testimony and which portions were intended to be argument, we cannot place responsibility for such knowledge on appellants’ counsel. Therefore, we hold that the unsworn statements made by Mathis do not constitute evidence which supports the finding of a settlement agreement.

Consequently, the only evidence that was properly before the court to support appellees’ claims of a settlement agreement was Mathis’ letter to Latham. The letter constitutes a self-serving statement by Mathis which does no more than reference her “understanding” of the alleged agreement. It fails to establish the meeting of minds required to establish an enforceable agreement, it fails to establish Latham’s state of mind as to the alleged agreement, and it fads to contradict Latham’s actions which were completely inconsistent with such an agreement.

There is nothing in the letter to indicate that Latham agreed to the extension of time urged by appellees or that he was even aware of Mathis’ desire to receive an extension of time. In fact, all of Latham’s actions in this case subsequent to his initial settlement offer indicate otherwise. As such, the letter in question can not be considered conclusive evidence that the alleged agreement did in fact exist. “When evidence offered to prove a vital fact is so weak as to do no more than create a mere surmise or suspicion of its existence, the evidence is no more than a scintilla and, in legal effect, is no evidence.” Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex.1983). Accordingly, we conclude that there is no legally sufficient evidence of the agreement at issue.

We further note that even if we were to find that a settlement agreement existed and that appellants repudiated that agreement, as appellees suggest, such an agreement would remain unenforceable in light of the supreme court’s decision in S & A Restaurant Corp. v. Leal, 892 S.W.2d 855 (Tex. 1995).²

In Leal, our supreme court addressed the issue of whether a party has a right to revoke a settlement agreement before judgment is rendered:

A party may revoke its consent to a settlement agreement at any time before judgment is rendered on the agreement ... A judgment rendered after one of the parties revokes his consent is void.

Id. at 857 (citations omitted).

Appellees in this case claim that they had a settlement agreement with appellants to which appellants allegedly revoked their consent and filed a law suit. Conversely, appellants claim that appellees missed their deadline, and therefore, there is no settlement agreement. If appellants are right then there is no agreement to enforce. If appel-lees are right, then appellant revoked their consent before judgment was rendered, which the supreme court says they may do.

The dissent must ignore the facts in Leal in order to concluded that Leal is distinguishable from the case before us. Leal involved a motion to enter judgment based upon an agreed settlement recorded in open court. The agreement was approved by the trial judge and resulted in the dismissal of the jury. The effect of the motion was to enforce a settlement agreement which is identical to the issue in the case before us. Regardless of semantics, a motion to enter judgment based on an agreed settlement and a motion to enforce a settlement are one and the same. Under Leal, any judgment based upon an agreement to which consent has been revoked is void.

Having determined that the evidence is legally insufficient to support the trial court’s finding that a settlement agreement existed in this case, it is not necessary to address appellants’ remaining points of error. The judgment of the trial court is reversed and the ease is remanded to the trial court for further proceedings consistent with this opinion.

1 . Grasping for support, the dissent relies on Union City Body v. Ramirez, 911 S.W.2d 196 (Tex.App.—San Antonio 1995, no writ). In doing so, the dissent ignores the fact that this case is factually distinguishable from Union City. Unlike the present case, Union City involved a mandamus proceeding to set aside a severance order entered by the trial court. Such proceeding involved a completely different standard of review than the one we are bound to follow here.

Further, the facts in Union City were so glaring that this court had no alternative but to find waiver. On appeal, the relator complained for the first time that he had not received proper notice of a motion to sever. The motion to sever was heard prior to trial and the court clearly sustained the motion along with making several other pretrial rulings. The record reflected that counsel for the relator was aware that the motion to sever had been granted, but continued to argue additional pretrial matters without objecting to the ruling regarding severance or notifying the court of his lack of notice.

The following day, after the severed parties had long been excused, counsel for the relator filed a motion for reconsideration of the severance order but did not notify the court of his lack of notice. The trial court denied the motion, which resulted in the mandamus proceeding. Under these circumstances, this court correctly agreed that a waiver had taken place and that the trial court had not abused its discretion. Clearly, there is no similarity at all between the facts in Union City and those before us in the present case.

2 . Although the dissent describes as "hypertechnical” the suggestion by the majority that proper testimony should be under oath, it nevertheless insists that we should ignore Leal because there is no formal point of error which brings the case in issue. However, the issue before us is whether the trial court properly sustained the alleged settlement agreement, which was the same issue presented in Leal.

Certainly, we are not to be limited to the cases cited by the parties in their briefs when determining an issue, particularly when another case out of this court was discussed during oral argument, we ordered additional briefing on the effects of that case on the facts before us, and we are aware that such case is potentially dispositive of the issues presented.