### IN THE UNI TED STAT ES COURT OFAPPEALS FOR THE FIF TH CIRCU IT

No. 10-51166

BRIAN LARREMORE; JEAN LARREMORE, Plaintiffs–Appellants
v. LYKES BROTHERS INC, Defendant–Appellee

Appeal from the United States District Court for the Western District of Texas USDC No. 4:08-CV-21

Before BENAVIDES, PRADO, and GRAVES, Circuit Judges. EDWARD C. PRADO, Circuit Judge: * In this dive r s ity j uri s dic tion case, Brian and Jean Larremore challenge the district court’ s judgment enforcing a mediation agreement that settled a property boundary dispute between the Larremores and Lykes Brothers, Inc. (“Lykes”). After oral argument, we sua sponte questioned our jurisdiction and remanded to the district court for the limited purpose of determining whether the amount in controversy exceeded $75,000. Larremore v. Lykes Bros. Inc. , No. 10-5 1 1 6 6 , 2 0 1 1 WL 6221500, at *2 (5th Cir. Dec. 14, 2011) (per curiam) U n i te d S ta te s C o u rt o f A p p ea l s

F i ft h C i rc u i t 

### F I L E D March 14 , 20 12 Lyle W . Cayce Clerk

Pursua nt to 5 T H C IR

. R. 47.5 , the cour t has d ete rm inedt hat this op inion s houldnot * be publ ish ed andis not pr ece dentexceptunderthe lim ite d cir cum st ance s se t for th in F IFT H C IR

. R. 47.5 .4. Case: 10-51166 Document: 00511788063 Page: 1 Date Filed: 03/14/2012No. 10-51166

(unpublished). The district court held a hear i ng on the jurisdictional issue on January 6, 2012, and on February 6, 2012, issued a memorandum and opinion concluding that the amount in contr o versy exceeded $75,000. Larremore v. Lykes Bros. Inc. , No. 08-CV-21, slip op. at 10 (W.D. Tex. Feb. 6, 2012). Confident

now in our jurisdiction over the case, we turn to the merits of the appeal, and affirm. I. BACKGROUND In April 2008, the Larremores sued Lykes in Texas state court, seeking to enjoin Lykes from blocking t h e L a r remores’ access to a tract of their land in Brewster County, Texas, via an old road that runs across Lykes’s property, and seeking a declaration that the old road is an easement. Lykes invoked diversity jurisdiction and removed the case to the United States District Court f o r t h e Western District of Texas. After several months of pretrial discovery, the partie s mediated the case a n d e n t e red into a mediation agreement that set forth the terms of a proposed settlement. Three of the mediation agreement’s provisions

are at issue in thi s appeal. Paragraph 3(a) of the mediation agreement stated that the Larremores would convey to Lykes a piece of land “below the rim of the Kokernot M e s a , substantially as s[h]own in the Exhibit to Steve Walker’s R e port.” Paragraph 3(b) stated that “[t]he parties will cooperate to de t e r m i n e the boundary line where the rim opens at the head of the canyon.” Paragraph 3(d) stated that “[t]he parties a gr e e to use Steve Walker to fix the boundaries . . . , such survey to be subject to the parties’ approval.” I n F ebruary 2009, the Larremores moved to set aside the media t i o n agreement, or in the alternative, to name a disinterested surveyor to re-survey. The district court held a hearing in April 2009 to di s c u s s t he Larremores’ motion. During that hearing, the district court stated that paragraph 3(d) of the mediation agreement (the provision calling upon Steve Walker to fix boundaries “subject to the parties’ approval”) was unenforceable because it gave either party

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the option of rejecting the surveyor’s suggest ed boundaries. The district court then asked the parties: “If the Court names a special surveyor, are you going to abide by that surve yor, yes or no?” Each party responded affirmatively. The attorney for Lykes then stated:
As I understand the [Larremores’] position

. . . [ , ] w e a r e in effect saying we are amending this agreement to change paragraph 3(d) to read that the independent surveyor will be appointed b y the Court if we can agree t o h i m . . . . And the parties are now telling the Court we will agree to be bound by that finding of that surveyor as to 3(d).
The Larremores’ attorney responded that even if the mediation agreement were modified so the parties were bound by the court-appointed surveyor’s findings, paragraph 3(a) was still ambiguous b e c a u s e it did not define what “below the rim” means. After the hearing, the parties agreed to appoint Maxey Sheppard

as the surveyor. Moreover, the Larremores submitted a proposed order listing duties for Sheppard to carry out, including: “Determine the northern boundary of the lands to be conveyed

. . . as set out in p a r a gr a p h 3 of the Mediation Agreement

. . . below the rim of the Kokernot Mesa, substantially as shown in the exhibit to Steve Walker’s report in this case”; and “Determine the boundary line where the rim of the Kokernot Mesa opens at the head of the canyon, as set out in paragraph 3(b) in the Mediation Agreement.” In September 2009, the district cour t i ssued a memorandum and order f ormally granting the Larremores’ request for a court-appointed surve y o r b u t denying their request to set aside the media t i o n a greement. In its order, the district court determined that paragraph 3(d) in the mediation agreement was unenforceable, but that the parties “agreed through a binding stipulation [at the hearing] to the appointment of Maxey Sheppard to survey the property subject to the Mediation Agreement.” It further determined that the phrase “below the

r i m ” in paragraph 3(a) was not ambiguous because the mediation agreeme n t

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incorporated by reference a map that established the top of Kokernot Mesa. Finally, the district court adopted the Larremores’ proposed order setting forth Sheppard’s duties. Sheppard carried out his duties and delivered a report some time before May 2010. In July 2010, Lykes moved to finalize Sheppard’s report and enforce the mediation agreement. After a hearing, the district court granted the motion. Final j udgment was entered on August 12, 2010, and the Larremores’ timely appealed.

II. STANDARD OF REVIEW AND APPLICABLE LAW “We review the district court’s contract interpretation de novo.” Interstate Contracting Corp. v. City of Dall., Tex. , 407 F.3d 708, 712 (5th Cir. 2005). Under Texas law, which governs this dispute, “[c]ompromise and s e ttlement 1 agreements are subject to the general principles of the law of contracts, and thus require a meeting of the minds.” Xtria L.L.C. v. Int ’ l I n s . Alliance Inc. , 286 S.W.3d 583, 596 (Tex. App.—Texarkana 2009, pet. denied). A “mee t i n g of the

m i n d s ” means that the parties mutually assent “to the agreement’s subjec t

ma t t e r and essential terms.” Parker Drilling Co. v. Romfor Supply Co. , 316 S.W.3d 6 8 , 75 (Tex. App.—Houston [14th Dist.] 2010, pet. denied). “The determination of a meeting of the minds i s b ased on the objective standard of what the parties said and did, not on their subjective states of mind.” Id. “The

See R.R

. Mgm t. Co. v. CFS La. Mi dstre am Co. , 428 F.3d 214, 2 22 (5t h Cir. 2005) 1 (“When a fed eral cour t sit s in diver sit y juris dic tio n, it mus t app ly the choi ce of law rule s of the for um st ate

. . . .” (c itin g Klaxon Co. v. Stentor Ele c. Mf g. Co. , 313 U. S. 487, 49 6 (194 1)) ); McFadi n v. Ge rbe r , 587 F.3d 753, 760 n.19 (5t h Cir. 2009) (“ In det erm ining wh ich law to app ly to mul tis tat e cont rac ts , Texas choi ce of law rule s look to t h e fac tor s lis ted in Rest atem ent se cti on 188 in ord er to det e r m i n e w h i c h st ate has the mo st signi fic ant rela tio nshi p to the tra nsa cti on. ” (int erna l quot atio n mar ks om itt ed) (c itin g Sonat E x plora tion Co. v. Cudd Pres sure Control, Inc. , 271 S. W.3 d 228, 233 (Tex. 2008) )) ; Rest atem ent (S eco nd) of Confl ict of Law s § 188( 2) (li st ing f act ors t o u seind ete rm ining st ate w ith m os t signi fic ant rel atio nshi p, suc h as “p lace of cont rac ting, ” “p lace of n e gotiat ion of the cont rac t, ” “p lace of per for man ce, ” “lo cat ion of the subjectm att er of the cont rac t”)

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Texas Supreme Court has stated that a settlement agreement is to be judged by [Texas Rule of Civil Procedure] 11 stand a r ds.” Ortega-Carter v. Am. Int’l Adjustment Co. , 834 S.W.2d 439, 442 (Tex. App.—Dallas 1992, w r i t d enied) (citing Kennedy v. Hyde , 682 S.W.2d 525, 528 (Tex. 1984)). Under Rule 11, “an agreement between opposing counsel is enforceable if it is

. . . made in open court and entered of record.” Id. “Whether or not the invalidity of a particular [contract] provision affects the rest of the contract depends upon whether the remaining provisions are independent or mutually depende nt p ro m i s e s , which c o urt s de t e r m in e b y l o o kin g to the language of the contract itself.” In re Poly-America, L.P. , 262 S.W.3d 337, 3 6 0 (Tex. 2008). “The relevant inquiry is whether or not parties would have entered into the agreement absent the unenforceable provisions.” Id. Contract provisions are generally severab l e where they are “only a part of the many reciprocal promi s e s in the agreement and did not constitute the main or essential purpose of the agreement.” Id. (internal quotation marks omitted). III. DISCUSSION The Larrem o r e s argue that the mediation agreement is unenforceable because three of its pro vi s i o n s w ere ambiguous and therefore did not reflect a mutual agreement. The allegedly unenforceable provisions are paragraphs 3(a), 3(b), and 3(d). The Larremores argue that paragraph 3(a) is ambiguous because the term “substantially” is undefined, and because it does not quantify the 2
amount of land conveyed. They argue that paragraph 3(b) is ambiguous because it “provides that the parties will cooperate to determine the boundary line where the rim opens at the head of the canyon,” but “there is no[] agreement indicating

a ‘meeting of the minds’ o[n] the boundary line and the rim.” Paragraph 3(d) is

As quo tedabo ve, par agrap h 3( a) st atedt hat theLarrem ore s w ouldconvey t o Lyk es 2 land “bel ow the rim of the Ko ke rnot Me sa, subs tantia ll y as sho wn in the Exhibit t o Ste ve Walk er’ s Repo rt in this c ase .” 5 Case: 10-51166 Document: 00511788063 Page: 5 Date Filed: 03/14/2012No. 10-51166

ambiguous, they argue, because it w a s “b a s e d on a survey, to be conducted by Steve Walker, [that] was subject to the approval of the parties.” In support, the Larremores cite only Bolle Inc. v. Am. Greetings Corp. , which held that the trial court correctly applied the doctrine of mutual mistake in rescinding a settlement agreement where the parties’ use of broad language in that agreement released other pending cases between them without eith e r p a rty’s intent. 109 S.W.3d 827, 832–34 (Tex. App.—Dallas 200 3, pet. denied). In response, Lykes argues that the Larremores are attempting to set aside the original mediation agreement and ignoring their stipulation s and conduct amending that agreement without any evidence or allegation of mistake or fraud. Lykes further argues that each of the provisions the Larremores claim is ambiguous was subsequently amended by stipulation in open court as a result

o f the Larremores’ own request for a new independent surveyor to replace the Steve Walker survey and their requested instructions for a new surveyor. The Larremores requested that the district court appoint a disinterested
surveyor to replace Steve Walker’s survey; they agreed to be bound by the disinterested surveyor’s survey; they propo s e d a n order setting forth the d i s i n terested surveyor’s duties, which stated that the surveyor would set t h e boundaries of the land to be conveyed pursuant to paragraph 3(a) and determine where the rim of the Kokernot Mesa opens at the head of the canyon pursuant to paragraph 3(b); and they agreed to S h e ppard’s appointment as the disinterested surveyor. That sequence of events reflects the L arremores’ agreement, and thus a meeting of t h e m i n d s , with respect to the content of paragr aphs 3(a) and (b) of the mediation agreement: Sheppard would set the b o u ndaries of the land to be conveyed to Lykes, Sheppard would dete r m i n e where the rim o f t h e Ko k e r n o t Mesa opens at the head of the canyon, and the parties would be bound by Sheppard’s findings. See P a rk e r D rilling Co. , 316 S.W.3d at 75; MTrust Corp. N.A. v. LJH Cor p . , 8 37 S.W.2d 250, 253–54 (Tex.

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App.—Fort Worth 1992, writ denied) (stating that it is “uniformly held” that an unsigned document may be incorporated b y r eference into a signed writing). Accordingly, paragraphs 3(a) and (b) were correctly enforced by the district court. 3 IV. CONCLUSION For the foregoing reasons, the district court’s order is affirmed. AFFIRMED

The Larr em ore s’ als o clai m that par agrap h 3(d) is unenf orc eable beca use it allow s 3 eit her par ty to rejec t the survey’s res ults , and is not severab le fr om the res t of the me diat ion agree me nt. Their st ipul atio n in ope n c o u r t to be bound by Shep par d’s survey, how ever, ref lect s thei r on- the- rec ord agree me nt to alte r par agrap h 3(d), eff ect ively rem oving the phr ase “s uch survey to be subject to the par tie s’ app roval, ” and rep laci ng it wi th an agree me nt to be bound by the cour t- app oint ed surveyor’ s f i n d i n gs. See Or tega- Carte r , 834 S. W.2 d at 442 (“ [A] greem ent[ s] betw een opp os ing couns el [ a r e ] e n f o r c eable if

. . . mad e in ope n cour t and ente redof

r eco rd .” ). 7 Case: 10-51166 Document: 00511788063 Page: 7 Date Filed: 03/14/2012