Order Approving Compromise Settlement of Claim in Texas

What Is an Order Approving Compromise Settlement of Claim?

Background

“[T]he very purpose of a settlement agreement is for parties to a pending dispute to compromise as to the relief it sought by the litigation.” (Carburante Land Mgmt., LLC v. Hopkins (2012) No. 07-10-00398-CV, 1 at *9 citing Kerrville HRH, Inc. v. City of Kerrville (1990) 803 S.W.2d 377, 388.)

“A compromise and settlement is the conclusion of a disputed or unliquidated claim through a contract in which the parties agree to mutual concessions in order to avoid resolving their controversy through litigation.” (See, Kerrville HRH, Inc. v. City of Kerrville (1990) 803 S.W.2d 377, 388.)

How to Structure the Motion

Requirements for an Enforceable Settlement Agreement

A settlement agreement must contain all the essential terms of the settlement. (See Padilla v. LaFrance (1995) 907 S.W.2d 454, 460.)

For a settlement agreement to be enforceable, it must be:

in writing,
signed, and
filed with the papers as part of the record, or
made in open court and entered into the record.

(Id., at 459 quoting Tex. R. Civ. P. 11.)

Further, the settlement agreement must be complete within itself in every material detail so that the contract can be ascertained from the writing, or record, without resort to oral testimony. (Id. at 460.)

How to Structure the Motion to Set Aside Agreement

A motion to set aside a settlement agreement may be premised on at least the following grounds:

That there was no meeting of the minds on all material terms in the settlement agreement;
That counsel lacked authority to enter into the settlement agreement;
That a party repudiated the settlement agreement;
That the settlement agreement is too vague to be subject to judicial interpretation and enforcement;
a breach of the settlement agreement; and/or
a failure of consideration.

(See, Carburante Land Mgmt., LLC v. Hopkins (2012) No. 07-10-00398-CV, 1, *4 [reviewing “summary judgment on the basis of a settlement agreement reached by the parties and entered into the record; affirming the judgment of the trial court” upholding the settlement agreement.)

Attorney as Signatory to Agreement

The attorney-client relationship is one of agent and principal, and the acts of the former ordinarily binds the latter. (Breceda v. Whi (2006) 187 S.W.3d 148, 152 citing Tex. Emp'rs Ins. Ass'n v. Wermske (1961) 162 Tex. 540, 349 S.W.2d 90, 93.)

Generally, every reasonable presumption is to be indulged to support a settlement agreement made by a duly employed attorney. (Ebner v. First State Bank of Smithville (2000) 27 S.W.3d 287, 300; see also, Cleere v. Blaylock (1980) 605 S.W.2d 294, 296.)

The most important presumption of such an agency relationship is that the agent acts in accordance with the wishes of the principal. (Breceda, 187 S.W.3d at 152.) However, when the evidence reveals that the attorney did not have the client's authority to agree, the agreement will not be enforced. (Id.; Ebner, 27 S.W.3d at 300; Cleere, 605 S.W.2d at 296.) >Thus, the presumption of authority of the attorney is a rebuttable one. (Breceda, 187 S.W.3d at 152.)

Repudiation of Settlement Agreement

A party may revoke its consent to a settlement agreement at any time before judgment is rendered on the agreement. (S & A Rest. Corp. v. Leal (1995) 892 S.W.2d 855, 857.)

However, the repudiating party must effectively communicate its withdrawal of consent to the trial court. (Baylor Coll. of Med. v. Camberg (2008) 247 S.W.3d 342, 346.)

Enforcement

The party seeking enforcement must pursue a separate breach of contract claim which is subject to the normal rules of pleading and proof. (Mantas v. Fifth Court of Appeals (1996) 925 S.W.2d 656, 658.)

Where fact issues are raised or consent has been withdrawn, the only method available for enforcing a settlement agreement is through summary judgment or trial. (See Mantas, supra, 925 S.W.2d at 658-59.)

A claim to enforce a disputed settlement agreement should be raised through an amended pleading or counterclaim asserting breach of contract. (Padilla, infra, 907 S.W.2d at 462.)

To allow enforcement of a disputed settlement agreement simply on motion and hearing would deprive a party of the right to be confronted by appropriate pleadings, assert defenses, conduct discovery and submit contested fact issues to a judge or jury. (Staley v. Herblin (2006) 188 S.W.3d 334, 337 citing Cadle Co. v. Castle (1995) 913 S.W.2d 627, 632.)

The Court’s Decision

In striking down a settlement agreement, “[t]he proper inquiry is whether the information in the trial court's possession is clearly sufficient and of such a nature as to put the court on notice that a party's consent is lacking....” (Baylor Coll. of Med., supra, [quoting Sohocki v. Sohocki (1995) 897 S.W.2d 422, 424.)

With respect to whether the settlement agreement is too vague to be enforceable, it has been held that, “a trial court cannot supply terms to the settlement agreement that were not specifically agreed to by the parties.” (See Chisholm v. Chisholm (2006) 209 S.W.3d 96, 98.)

In deciding the issue of enforceability, “a judge's decision whether a settlement agreement should be enforced as an agreed judgment or must be the subject of a contract action requiring additional pleadings and proof is subject to the abuse of discretion standard of review.” (Staley v. Herblin (2006) 188 S.W.3d 334, 336 citing Mantas v. Fifth Court of Appeals (1996) 925 S.W.2d 656, 659. A trial judge has no discretion in determining what the law is or in applying the law to the facts. (Brown v. Vann (2005) 167 S.W.3d 627, 630.) Thus, a failure by the trial judge to analyze or apply the law correctly will constitute an abuse of discretion. (Brown, 167 S.W.3d at 630.)

It is not required that all of the terms of a settlement agreement be contained within a single document to comply with rule 11. (See Padilla, supra, at 461-62.) A written settlement agreement may be enforced even though one party withdraws consent before judgment is rendered on the agreement. (Staley, supra, 188 S.W.3d at 336 citing Mantas, 925 S.W.2d at 658.) But, where consent has been withdrawn, a court may not render judgment on the settlement agreement, but may enforce it only as a written contract. (Id.)

Documents for Order Approving Compromise Settlement of Claim in Texas

Sort By

GREAT PLAINS NATIONAL BANK vs. CLOUD REVOLTE INC, et al document preview

ORIGINAL PETITION

71 pages

FILED 3/11/2024 6:51 PM FELICIA PITRE DISTRICT CLERK …

Case Name GREAT PLAINS NATIONAL BANK vs. CLOUD REVOLTE INC, et al