University General Hospital, LP University Hospital Systems, LLP Charo Barnette, in Her Capacity as Independent of the Estate of Guy Barnette, And John E. Udeh v. Siemens Medical Solutions USA, Inc.

• Court: Court of Appeals of Texas
• Decided: February 28, 2013
• Docket: 01-12-00174-CV
• Status: Published

Opinion

Opinion issued February 28, 2013

In The

Court of Appeals For The

First District of Texas ———————————— NO. 01-12-00174-CV ——————————— UNIVERSITY GENERAL HOSPITAL, LP; UNIVERSITY HOSPITAL SYSTEMS, LLP; CHARO BARNETTE, IN HER CAPACITY AS INDEPENDENT EXECUTOR OF THE ESTATE OF GUY BARNETTE, DECEASED; AND JOHN E. UDEH, Appellants V. SIEMENS MEDICAL SOLUTIONS USA, INC., Appellee

On Appeal from the 215th District Court Harris County, Texas Trial Court Case No. 2010-40305

MEMORANDUM OPINION

The issue in this case is whether the district court signed a void judgment.

Applying well established precedent, we hold that the trial court’s February 3, 2012 judgment was signed outside of the court’s plenary power, and we vacate that

void judgment.

Background

The parties to this commercial dispute initially sued each other for (1) claims

of breach of contract and breach of guaranty agreements and (2) counterclaims of

breach of contract, negligent misrepresentation, and breach of warranty. After

agreeing to a written confidential settlement and mutual release, the parties filed an

agreed motion to dismiss the case with prejudice. The trial court granted this

agreed motion and rendered a final judgment dismissing the case with prejudice on

November 4, 2011. No postjudgment motion was filed extending the trial court’s

plenary power beyond thirty days after the judgment was signed, see TEX. R. CIV.

P. 329b(d), (e), and the court’s plenary power lapsed on Monday, December 6,

2011. 1

Appellee Siemens Medical Solutions USA, Inc.’s motion seeking the trial

court to sign what Siemens described as “the parties’ Agreed Judgment, as

provided by the parties’ Confidential Settlement Agreement and Mutual Release

(the ‘Settlement Agreement’) under which the Court retains jurisdiction” was not

signed until January 18, 2012. In its motion, Siemens contended that because

1 Appellants argue that plenary power lapsed on December 4, 2011, but because that day was a Sunday, Texas Rule of Civil Procedure 4 extended the period of time to the next day, December 5. 2 appellant University General Hospital, LP had defaulted on its payments under the

settlement agreement, Siemens was entitled to request rendition of an “agreed

judgment” against University General Hospital, LP and the remaining appellants,

University Hospital Systems, LLP; Charo Barnette, in her capacity as independent

executor of the estate of Guy Barnette, deceased; John E. Udeh; and Moien R.

Butt.

At a February 3, 2012 hearing, Siemens argued that the trial court had

inherent power to sign the “agreed judgment” because the settlement was governed

by Texas Rule of Civil Procedure 11. The appellants countered that because the

November 4, 2011 final judgment dismissed the case with prejudice and without

any reference to the settlement agreement, there was no judgment in favor of

Siemens for the court to enforce. Regardless of the merits of Siemens’s claims for

a breach of the settlement agreement, appellants argued that the remedy was for

Siemens to file a new lawsuit to enforce the settlement.

The trial court signed the “agreed judgment” on February 3, 2012, providing

that Siemens recover a total of $5,500,000 (1) jointly and severally from

University General Hospital, LP and University Hospital Systems, LLP, less any

prior payments, and (2) severally in the amount of $866,667 each from (a) Charo

Barnette, in her capacity as independent executor of the estate of Guy Barnette,

deceased, (b) John E. Udeh, and (c) Moien R. Butt, less any prior individual

3 payments from each of the three. The February 3, 2012 judgment purported to be a

“Final Judgment as to [the appellants],” but otherwise did not contain a Mother

Hubbard clause.

Appellants filed their notice of appeal on February 16, 2012. In May 2012,

Moien R. Butt filed a motion to dismiss, which we granted in a July 10, 2012

interlocutory order.

Discussion

In their sole issue, the remaining appellants contend the trial court no longer

had plenary power over the November 4, 2011 final judgment when it signed the

February 3, 2012 judgment, and as a result, the February 3, 2012 judgment is void.

It is unquestionably the law that a judgment rendered outside a court’s period of

plenary power is not merely voidable, but void. See Mapco, Inc. v. Forrest, 795

S.W.2d 700, 702–03 (Tex. 1990). Siemens does not dispute that the February 3,

2012 judgment was not signed during the trial court’s plenary power over its

November 4, 2011 final judgment. Instead, Siemens claims the trial court has

inherent jurisdiction to enforce the November judgment and the Rule 11 settlement

agreement that led to the order of dismissal with prejudice.

The Texas Supreme Court has recently reaffirmed that appellate courts have

no jurisdiction to address the merits of appeals from void orders or judgments;

rather, they have jurisdiction only to determine that the order or judgment

4 underlying the appeal is void and make appropriate orders based on that

determination. Freedom Commc’ns, Inc. v. Coronado, 372 S.W.3d 621, 623–24

(Tex. 2012). Accordingly, we make no comment as to the equities of this case or

otherwise discuss whether the settlement agreement was breached, a matter

discussed at length in the appellate briefing.

Siemens first argues that courts have jurisdiction to enforce their judgments.

This is true, and Texas Rule of Civil Procedure 308 requires a court to “cause its

judgments and decrees to be carried into execution.” But in this case, the trial

court dismissed the case with prejudice and taxed costs against the party that

incurred them. Siemens does not cite to any specific authority to explain how an

award of $5,500,000 is a valid postjudgment enforcement of a judgment in which it

recovered nothing.

Siemens next argues that the settlement agreement is enforceable as a Rule

11 agreement. We acknowledge there is case authority for the proposition that a

trial court can enforce a Rule 11 agreement “touching upon the suit” even if the

agreement was executed after the case was tried and resolved by a judgment. See

Coale v. Scott, 331 S.W.3d 829, 831 (Tex. App.—Amarillo 2011, no pet.). But

Siemens cites no authority—and we know of none—for the proposition that a Rule

11 agreement can be enforced postjudgment when the trial court dismissed the

case. Nor are we aware of any authority permitting a court to enforce a Rule 11

5 agreement that is in direct conflict with the trial court’s final judgment. See Harris

Cnty. Appraisal Dist. v. West, 708 S.W.2d 893, 896 (Tex. App.—Houston [14th

Dist.] 1986, orig. proceeding) (holding that order to enforce judgment must not be

inconsistent with original judgment and must not constitute material change in

substantial adjudicated portions of judgment).

That the parties’ settlement agreement appears to have contemplated an

acceptance of appellants’ liability and the rendition of an agreed judgment if

appellants failed to comply with material terms of the settlement agreement we do

not dispute. But Texas Rule of Civil Procedure 329b(f) does not allow the trial

court to set aside its final judgment dismissing the case and render a new judgment

that Siemens recover $5,500,000 once plenary power has expired. Ultimately,

Siemens is arguing that the Rule 11 agreement altered the plenary-power

provisions of Rule 329b, extending the trial court’s jurisdiction, but well settled

law holds that subject-matter jurisdiction cannot be conferred by agreement. See,

e.g., Morrow v. Corbin, 62 S.W.2d 641, 649 (Tex. 1933).

Siemens is not left without a remedy—it can file suit to enforce the

settlement agreement. The doctrine of claim preclusion does not prevent a suit on

the settlement agreement because that agreement could not have been breached at

the time of the trial court’s November 4, 2011 final judgment. See Compania

Financiara Libano, S.A. v. Simmons, 53 S.W.3d 365, 367 (Tex. 2001). What

6 Siemens cannot do, however, is reinvest the trial court that dismissed the case with

jurisdiction to enforce the settlement agreement after plenary power expired.

Conclusion

Accordingly, we hold that the February 3, 2012 judgment was void, and we

vacate it.

Jim Sharp Justice

Panel consists of Justices Jennings, Higley, and Sharp.