Prevost v. Insurance Advisors of Texas, Inc.

46 S.W.3d 289, 2001 WL 83394
CourtCourt of Appeals of Texas
DecidedMarch 8, 2001
Docket2-00-188-CV
StatusPublished
Cited by12 cases

This text of 46 S.W.3d 289 (Prevost v. Insurance Advisors of Texas, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Prevost v. Insurance Advisors of Texas, Inc., 46 S.W.3d 289, 2001 WL 83394 (Tex. Ct. App. 2001).

Opinion

OPINION

DAY, Justice.

In this appeal, Appellants challenge the trial court’s orders sanctioning Appellant David Martin and dismissing the case based on an oral settlement agreement. We reverse and render in part and reverse and remand in part.

I. BACKGROUND

On November 10,1995, Insurance Advis-ors of Texas (“Insurance Advisors”) filed suit against James Prevost, a former insurance agent, to collect insurance commissions. Veronica Ball intervened. Pre-vost’s original counsel withdrew from the case, at which time Martin was substituted. On November 13, 1998, the trial court ordered the case to mediation. During the week of March 15, 1999, after mediation, Martin contacted Brent Brown, the mediator, to see if Insurance Advisors would be willing to jointly dismiss the case with prejudice. Brown contacted William Kirk-man, counsel for Insurance Advisors, who accepted the “settlement offer.” No settlement agreement was ever signed by both parties.

On March 23,1999, Brown wrote a letter to the trial court stating that the parties had settled. However, the fax date at the top of the page indicated that the letter had been sent on April 12, 1999. On March 24, 1999, Kirkman sent Martin a letter confirming the settlement and requested Martin’s signature. Martin never signed the letter nor returned Kirkman’s phone calls. Martin then sent a letter to the trial court on April 16, 1999, and said that the case had not settled and checked to see if the trial was still set for June 1, 1999. The trial court held a hearing to investigate the settlement confusion. During this hearing, the trial court found that there was a settlement and sanctioned Martin $10,000 for perpetrating a fraud on the court pursuant to rules 13 and 215 of the Texas Rules of Civil Procedure. See Tex.R.Civ.P. 13, 215. The trial court also dismissed the case with prejudice.

*292 II. STANDARD OF REVIEW

We review Rule 13 and Rule 215 sanctions under an abuse of discretion standard. Bodnow Corp. v. City of Hondo, 721 S.W.2d 839, 840 (Tex.1986); Tarrant County v. Chancey, 942 S.W.2d 151, 154 (Tex.App.—Fort Worth 1997, no writ); see also GTE Communications Sys. Corp. v. Tanner, 856 S.W.2d 725, 730-32 (Tex.1993) (orig. proceeding) (applying abuse of discretion test to review of sanctions imposed under Rule 13). To determine whether a trial court abused its discretion, we must decide whether the trial court acted without reference to any guiding rules or principles; in other words, whether the act was arbitrary or unreasonable. See Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex.1997); Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985), cert. denied, 476 U.S. 1159, 106 S.Ct. 2279, 90 L.Ed.2d 721 (1986). Under an abuse of discretion standard, legal and factual sufficiency are relevant factors in assessing whether the trial court abused its discretion. Beaumont Bank v. Buller, 806 S.W.2d 223, 226 (Tex.1991); Tex. Dep’t of Health v. Buckner, 950 S.W.2d 216, 218 (Tex.App.—Fort Worth 1997, no pet.).

An abuse of discretion does not occur where the trial court bases its decisions on conflicting evidence. Davis v. Huey, 571 S.W.2d 859, 862 (Tex.1978); see also Goode, 943 S.W.2d at 446. Furthermore, an abuse of discretion does not occur as long as some evidence of substantive and probative character exists to support the trial court’s decision. Holley v. Holley, 864 S.W.2d 703, 706 (Tex.App.—Houston [1st Dist.] 1993, writ denied). Merely because a trial court may decide a matter within its discretion in a different manner than an appellate court would in a similar circumstance does not demonstrate that an abuse of discretion has occurred. Downer, 701 S.W.2d at 241-42.

III. DISCUSSION

In his first point, Martin alleges that there was no evidence to support the trial court’s imposition of sanctions against him. In support of its sanctions against Martin, the trial court reasoned that Martin perpetrated a fraud on the court. The trial court found that (1) Martin made an offer to settle, which Kirkman accepted; (2) Brown communicated the settlement to the court and the parties; (3) Martin refused to respond to Brown’s or Kirkman’s repeated calls concerning the settlement; and (4) Martin sent a letter to the trial court disavowing the existence of a settlement, without sending a copy to either Brown or Kirkman, and by doing so, Martin made a material misrepresentation to the trial court. However, the trial court did not expressly state in its findings of fact how Martin perpetrated a fraud on the court, nor can we find any evidence that suggests Martin perpetrated a fraud on the court.

Martin told the trial court in his letter that the case had not settled and asked whether the trial date was still correct. Martin asserted that no settlement took place because neither he nor his clients ever signed a settlement agreement in accordance with Rule 11. See Tex.R.Civ.P. 11. We cannot find any evidence that would suggest Martin misrepresented the existence of the settlement agreement to the trial court, when the basis of Martin’s argument is that a written settlement agreement did not exist. Therefore, we find no evidence to support the trial court’s findings that Martin perpetrated a fraud on the court. We hold the trial court abused its discretion in assessing sanctions against Martin. Therefore, we sustain Martin’s first point.

In his second point, Martin argues the trial court erred in dismissing the *293 suit with prejudice on the court’s finding that a settlement agreement existed. A settlement agreement must comply with Rule 11 to be enforceable. Padilla v. LaFrance, 907 S.W.2d 454, 460 (Tex.1995). To satisfy the “in writing” provision of Rule 11, the same contract principles apply that are used to determine when a “writing” satisfies the statute of frauds. Id. Thus, a Rule 11 settlement agreement is not enforceable unless it is complete within itself as to every material detail and contains all the essential elements of the agreement so the contract can be ascertained from the writing, without resort to oral testimony. Id.

The supreme court has said that Rule 11 exists because verbal agreements of counsel respecting the disposition of cases are very likely to be misconstrued and forgotten and to lead to misunderstandings and controversies.

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46 S.W.3d 289, 2001 WL 83394, Counsel Stack Legal Research, https://law.counselstack.com/opinion/prevost-v-insurance-advisors-of-texas-inc-texapp-2001.