*Pursuant to 5TH CIR. R. 47.5, the Court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

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UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 98-50378

Summary Calendar

ARMANDO FUENTES; FUENTES ASESORIES ADUNALES, S.A. de C.V.,

Plaintiffs-Appellants,

VERSUS

CREAMLAND DAIRIES; PRICES CREAMERIES, A Division of Creamland

Dairies, Inc.; DEAN FOODS COMPANY; PRICES CREAMERIES, A Division of

Dean Foods Company,

Defendants-Appellees.

Appeal from the United States District Court

for the Western District of Texas

(EP-96-CV-526)

May 7, 1999

Before DAVIS, DUHÉ and PARKER, Circuit Judges.

PER CURIAM:*

Plaintiffs-Appellants Armando Fuentes and Fuentes Asesories

Adunales, S.A. de C.V. (“Fuentes”) appeal an order dismissing their

action against Creamland Dairies, Prices Creameries and Dean Foods

Company (collectively “Creamland”). We affirm.
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FACTS AND PROCEDURAL BACKGROUND

In 1995, Fuentes contracted to import Creamland products into

Mexico for sale to Wal Mart de Mexico. Creamland set the price at

which the products were to be sold to Wal Mart lower than what was

being invoiced to Fuentes. After Wal Mart’s payments were

forwarded to Creamland, Fuentes’s records continued to reflect an

account payable to Creamland. To remedy this, Creamland “forgave”

the debt, which forgiven debt became taxable income for Fuentes.

Fuentes filed suit in state court asserting claims against

Creamland concerning this tax liability, as well as other disputes

which arose under their contract. The case was removed to federal

court and Creamland counterclaimed seeking to enforce its rights

under the same contract. On November 5, 1997, after settlement

negotiations and an exchange of letters concerning settlement,

Creamland advised the district court that settlement had been

reached. The district court granted several requests from both

parties for extension of time to submit finalized settlement

documents to the court. On March 30, 1998, the district court

dismissed the case with prejudice, although the parties had never

submitted a signed settlement agreement to the court.

DISCUSSION

We review the district court’s dismissal for clear error. See

White Farm Equipment Co. v. Kupcho, 792 F.2d 529 (5th Cir. 1986).

The parties do not dispute that Texas substantive law governs this

diversity matter. See Cavallini v. State Farm Mutual Auto Ins.

Co., 44 F.3d 256, 266 (5th Cir. 1995).
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Fuentes argues that no agreement existed under Texas law.

Alternatively, Fuentes maintains that, if an agreement existed 1)

he revoked the agreement prior to the entry of judgment; and 2) the

agreement was not enforceable. Finally, Fuentes contends that the

district court abused it’s discretion because the role of the court

is to recognize, encourage and enforce settlement agreements. We

find that the district court did not clearly err in finding that

the letters exchanged between the parties and made part of the

record amount to an enforceable settlement agreement under Texas

Rule of Civil Procedure 11. See Padilla v. LaFrance, 907 S.W.2d

454, 460 (Tex. 1995). Further, the district court did not clearly

err in enforcing such agreement in the face of Fuentes’s attempt to

unilaterally revoke it. See id. at 461. Fuentes’s contention that

the district court abused it’s inherent power to enforce contracts

is without merit.

For the foregoing reasons, we affirm the district court’s

order dismissing this suit with prejudice.

AFFIRMED.