* 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.

1 United States Court of Appeals

Fifth Circuit



## FILED

May 12, 2004

Charles R. Fulbruge III

Clerk IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

__________________________

No. 03-51188

Summary Calendar

__________________________

In The Matter Of: DONALD E. GHIDONI

Debtor

__________________________

DONALD E. GHIDONI,

Appellant,

versus

JOHNNY W. THOMAS, Trustee,

Appellee.

___________________________________________________

Appeal from the United States District Court

For the Western District of Texas

(No. SA-03-CV-647)

___________________________________________________

Before JONES, BENAVIDES, and CLEMENT, Circuit Judges.

PER CURIAM: *1 In a footnote to this provision of the Agreed Order the parties further agreed that

[t]o the extent that the capital gains tax liabilit y of the Estate is reduced by the

Int ernal Revenue Service to an amount that results in funds available for

distribution by the Estate, the funds shall be used first to pay the Secured Claim

of Hill Country S.A., Ltd. Up to t he amount of $513,000.00. Any funds

thereafter available shall be used to pay any allo wed but unpaid expenses of

administration and thereafter shall be payable to the Debtor, Donald E. Ghidoni.

Although this footnote was in contention at the district court, the parties have not appealed the

court’s ruling on this matter. The footnote is not relevant to this portion of the appeal.

2 Appellant Donald E. Ghidoni (“Ghidoni”) appea ls t he district court’s affirmance of the

bankruptcy court’s ruling that the Agreed Order between the parties released Hill County S.A., Ltd.

(“HCSA”), Bexar Metropolitan Water District (“Bexar”) , and Trustee Johnny W. Thomas

(“Thomas”) from all liabilit y, including prospective liabilit y, arising out of the bankruptcy

proceedings, in exchange for $10,000.00. We affirm in part, and reverse and remand in part.

I. FACTS AND PROCEEDINGS

During the course of a bankruptcy proceeding, Ghidoni, the debtor, entered into an Agreed

Order with Thomas, the trustee, and the sole creditor Bexar. Bexar was t he assignee of HCSA’s

claim. The October 24, 2002 Agreed Order first provided that HCSA and Bexar “have agreed to

accept, in full and final satisfaction of both the Secured Claim and the Administrative Expense Claim,

the total sum of $493,500.00.” 1 Apparently in return for this satisfaction, “Donald E. Ghidoni has

agreed to release all parties hereto from such claims as he may have arising out of the acti ons or

conduct of those parties and/or their counsel arising in this proceeding .” (emphases added).

Pursua nt to this Agreed Order the bankruptcy court entered an “Order Granting Trustee’s

Moti on to Approve Final Settlement with Internal Revenue Service and Payment of Other Expenses

of the Estate” that stipulated:2 The district court struck the release with respect to Thomas in his individual capacity,

and neither party has appealed that ruling.

3 Donald E. Ghidoni, for the consideration of $10,000.00, to be distributed by the

Trustee, is deemed, upon payment by the Trustee of $10,0 00.00, t o have fully and

finally released Johnny W. Thomas, individually 2 and in his capacity as Trust ee for

the Estate of Donald E. Ghidoni, Morgan & Luttrell, L.L.P., Hill County S.A., Ltd.

and Bexar Metropolitan Water District of and from any and all claims, or causes of

action of whatever kind or nature which Mr. Ghidoni may have, whether known or

unknown, which have arisen or which may arise hereafter from or as a result of the

pendency of the instant bankruptcy proceeding

.

(emphases added). This April 2, 2003 order ostensibly enforced the October 24, 2002 Agreed Order.

II. STANDARD OF REVIEW

“We review the decision of the district court by applying the same standards of review to the

bankruptcy court’s findings of fact and conclusion s o f law as applied by the district court.” I n re

Crowell

, 138 F.3d 1031, 1033 (5th Cir. 1998). Findings of fact by the bankruptcy court are reviewed

for clear error, while conclusions of law are reviewed de novo

. I n re Howe

, 913 F.2d 1138, 1142 n.1

(5th Cir. 1990 ).

III. DISCUSSION

Ghidoni a rgues t hat he could not have released Thomas, HCSA and Bexar from future

liabilit y. In point of fact, however, “[p]arties may co nt ract t o release future liability unless the

agreement is unconstitutional, violates stat ut o ry law, or is against public policy.” A llright, Inc. v.

Elledge

, 515 S.W.2d 266, 267 (Tex. 1974). The release in question is not violative of the

Constitution, statutory law, or public policy. The issue is therefore whether the parties intended the

release to apply prospectively.3 Because both parties concur that the Agreed Order is a contract, we assume without

deciding that it should be treated as such.

4 Nothing in the language of the release

— an agreement “to release all parties . . . from such

claims

. . . arising in this proceeding”

— indicates an intent to limit the release’s application to events

which occurred prior to the signing of the release. We therefore hold that the Agreed Order does

release Thomas, HCSA and Bexar from future liabilit y arising out of the bankruptcy proceeding, and

affirm the judgment of the district court.

Ghidoni next asserts that he did no t release the other parties from liability in exchange for

$10,000.00. The Agreed Order mentions no such sum, he argues, and the bankruptcy court erred

in mo difying the release in its April 2, 2003 order. Thomas, HCSA and Bexar, on the other hand,

maintain that the parties only signed the Agreed Order based upon representations at the hearing that

all claims against them would be released in exchange for payment of $10,000.00.

Thomas, HCSA, and Bexar are literally correct, in that the transcript of the hearing held prior

to entry of the Agreed Order does report discussions between the parties with respect to the release

and the payment of $10,000.00. However, nothing in the Agreed Order incorporates this hearing,

by reference or otherwise. Under the basic rules of contract 3 interpretation, the four corners of the

contract control, J.M. Krupar Construction Co. v. Rosenberg

, 95 S.W.3d 332, 334 (Tex. App. 2002),

unless th e co nt ract is deemed ambiguous, C lear Lake City Water Authority v. Kirby Lake

Development, Ltd.

, 123 S.W.3d 735, 744 (Tex. App. 2003). “Only when a co nt ract is first

determined to be ambiguous may the courts consider the parties’ interpretation and admit extraneous

evidence to determine the true meaning of the instrument.” Clear Lake City Water Authority , 123

S.W.3d at 744. Because the Agreed Order unambiguously states that Ghidoni releases the parties4 There was, however, consideration for the release. Ghidoni retained the right to sue a

third party for malpractice, a right relinquished by Thomas, HCSA, and Bexar.

5 from claims arising out of the bankruptcy proceeding in exchange for no specified amount, 4 this is the

interpretation that must control. The bankruptcy court erred in entering its April 2, 2003 order to

the extent that it held the release was contingent upon the payment of $10,000.00. We reverse the

ruling of the district court on this point.

Ghidoni requests, as relief, that this Court reform the Agreed Order by striking the April 2,

2003 order’s release language in its entirety and replacing the language referring to “the sum of

$10,000.00" with “all remaining cash and assets of the Estate.” Because we have determined that the

April 2, 2003 Order released Thomas, HCSA, and Bexar from any claims arising out o f t he

bankruptcy action as was contemplated by the Agreed Order, we decline to strike that language. And

although we agree with Ghidoni that the Agreed Order did no t contemplate the payment of

$10,000.00 in exchange for this release, we decline to reform the April 2, 2003 order in the manner

he requests. Just as nothing in the four corners of the Agreed Order stipulates the payment of

$10,000.00, nothing in the four corners of the Agreed Order refers to “all remaining cash and assets

of the Estate.” The Agreed Order does not address what happens to any remaining assets of the

Estate after satisfaction of the claims of the creditors. We therefore rem and thi s case for a

determination of the status of any remaining assets of the Estate.

IV. CONCLUSION

Ghidoni did releas e Thomas, HCSA, and Bexar from claims arising out of the bankruptcy

proceeding. To the extent t hat the April 2, 2003 order embodies this release, the judgment of the

district court is AFFIRMED.6

The release was not, however, in exchange for $10,000.00. To the extent that the April 2,

2003 order contemplates this exchange, the judgment of the district court is REVERSED.

The Agreed Order did not address the disposition of any assets of the Estate that remained

after the creditors were satisfied. This case is REMANDED with instructions to REMAND to the

bankruptcy court for resolution of this issue and further proce edings no t inconsistent with this

opinion.