Court Opinion

ID: 4531334
Source: CourtListenerOpinion
Date Created: 2020-05-04 07:17:40.206349+00
Date Added: 2024-06-11T09:27:05.714378
License: Public Domain

COURT OF APPEALS
                                EIGHTH DISTRICT OF TEXAS
                                     EL PASO, TEXAS

 JAKE ROBERT MCGEHEE, A/K/A J.                §
 ROBERT MCGEHEE; AND JAMES
 THOMAS STEWART, A/K/A TOMMY                  §
 STEWART, A/K/A JAMES THOMAS
 STEWART III, INDIVIDUALLY AND                §              No. 08-18-00166-CV
 AS PERSONAL REPRESENTATIVE OF
 THE ESTATE OF LYNN MCGEHEE                   §                Appeal from the
 STEWART AND AS TRUSTEE OF
 THOSE CERTAIN TRUSTS                         §              143rd District Court
 ESTABLISHED UNDER THE STEWART
 REVOCABLE LIVING TRUST, U/T/D                §            of Reeves County, Texas
 AUGUST 22, 2003,
                                              §            (TC# 16-09-21663-CVR)
                    Appellants,
                                              §
 v.
                                              §
 ENDEAVOR ACQUISITIONS, LLC,
                                              §
                    Appellee.

                                      O P I N I O N

       Appellants Jake Robert McGehee, a/k/a J. Robert McGehee (McGehee); and James

Thomas Stewart, a/k/a Tommy Stewart, a/k/a James Thomas Stewart III (Stewart), Individually

and as Personal Representative of the Estate of Lynn McGehee Stewart and as Trustee of Those

Certain Trusts Established Under the Stewart Revocable Living Trust, u/t/d August 22, 2003

(collectively, “Appellants”) appeal from a take-nothing judgment in favor of Appellee Endeavor
Acquisitions, LLC (Endeavor). Appellants contend that the trial court erred by granting

Endeavor’s motion for summary judgment declaring enforceable a Purchase and Sale Agreement

(PSA) between the parties, denying Appellants’ contrary motion for summary judgment, and

awarding Endeavor attorney’s fees. We affirm.

                                       I. BACKGROUND

       In November 2015, Endeavor sent a solicitation letter to Appellants offering to purchase

certain property they owned in Reeves County, Texas. Appellants each owned an undivided 40

acres of surface estate out of a 160 acre portion of described property. Appellants also collectively

owned one-half of the bonus and royalty interest under an oil and gas lease then existing on the

property’s mineral interest. With its mailing, Endeavor included a transmittal letter, two original

PSAs, six original General Warranty Deeds (three for each Seller), and two IRS W-9 forms. The

letter signed by Endeavor’s president instructed that, if the terms of the offer were acceptable to

Appellants, they should sign and date the enclosed PSA and General Warranty Deeds in front of a

notary public, retain a copy of the originals for their own records, and return the remaining

executed originals in the prepaid envelope supplied with the mailing. Also, Endeavor advised

Appellants that, upon receipt of the executed documents, it would commence its title review of the

identified property.

       By its opening lines, the enclosed PSA stated that the agreement was entered into between

Endeavor, defined as “Buyer,” and McGehee and Stewart, jointly defined as “Seller.” As Buyer,

Endeavor offered to purchase the entirety of Appellants’ surface and mineral interest for a total

purchase price of $185,000. The terms further provided that upon Endeavor’s receipt of executed

originals of the PSA and the Warranty Deeds it would be permitted thirty days to review title to

                                                 2
the property. A closing would take place five days after expiration of the title review period,

unless Endeavor, in its sole discretion, extended the review period and delayed the closing as

reasonably necessary to properly conduct the required title review. The PSA also contained

representations stating that it “has been duly executed and delivered on behalf of each of the parties

and constitutes their legal and binding obligations enforceable in accordance with its terms” and

that, “[a]t Closing, all documents and instruments required to be executed and delivered shall

constitute legal, valid, enforceable, and binding obligations of the parties.”

       On receipt of the PSA, McGehee and Stewart each crossed out the purchase price amount

of $185,000, inserted $200,000 instead, and initialed their changes. They then executed and

returned the originals to Endeavor without any further changes. Most significantly, Appellants

did not alter the term “Seller,” as used throughout the PSA, to include both McGehee and Stewart

jointly. Appellants additionally executed and returned the original Warranty Deeds that Endeavor

had supplied. Those deeds stated by their recitals that the grantor “do[es] hereby grant, bargain,

sell, convey, transfer, assign and deliver” to Endeavor all of the grantor’s right, title, and interest

in the described property.

       Additional activity took place for several months afterward. In January 2016, Endeavor

informed Appellants that it was extending the title review period and resetting the closing date to

a date on or before March 9, 2016. In February 2016, Endeavor filed the executed Warranty

Deeds in the property records of Reeves County, Texas. In March 2016, Endeavor sent each

Appellant a check in the amount of $100,000. Appellants, however, informed Endeavor that it

had refused to negotiate the checks that were tendered, contending that the PSA required payment

of $200,000 for each individually. Endeavor disagreed on the ground that the PSA expressly

                                                  3
defined the term “Seller” as encompassing both McGehee and Stewart, and specifically provided

that the “total Purchase Price shall be $200,000[.]”

         After the original checks expired, Endeavor sent Appellants each a second check, dated

April 21, 2016, in the amount of $100,000. These checks, like the original checks, stated that

they were “VOID AFTER 45 DAYS.” Forty-five days following April 21, 2016 fell on June 5,

2016.1 McGehee deposited his check with his bank on May 31. On June 6, that bank notified

him that the check was returned for insufficient funds, but that it was redepositing the check for

his benefit. On June 15, McGehee’s bank informed him that the redeposited check was returned

because of a stop payment order. Stewart deposited his check with his bank on June 3. But on

June 8 he learned that it was returned because of a stop payment order.

         Endeavor acknowledges that it stopped payment on June 6 on Stewart’s check and on June

9 or 10 on McGehee’s check, because the 45-day period had ended, and the checks had expired.

Endeavor states that it was not aware that Appellants had deposited the checks when it stopped

payment.

         Endeavor tendered payment to Appellants a third time by initiating two wire transfers of

$100,000 each, one to McGehee on July 22, 2016, and one to Stewart on August 1, 2016.

Appellants reversed and refused to accept the funds. By affidavit, the president of Endeavor

asserted that he communicated to Appellants that the company remained ready, willing, and able

to pay the agreed purchase price of $200,000.

1
  The actual 45th day following April 21, 2016, was June 5, 2016. Because that day was a Sunday, the 45th day was
effectively the last banking day, which was June 4, 2016. The parties both use June 4, 2016, as the relevant expiration
date.

                                                          4
       Appellants filed suit against Endeavor in September 2016, seeking a judgment that declared

the PSA and Warranty Deeds invalid because Endeavor breached the PSA by failing to tender the

stated consideration. They requested that the court remove a cloud on their title created by the

PSA and Warranty Deeds. Appellants later amended their petition to request rescission of the

Warranty Deeds.      Appellants requested an award of attorney’s fees under the Declaratory

Judgments Act.

       In answer to Appellants’ claims, Endeavor raised affirmative defenses including waiver

and estoppel. Endeavor also asserted a counterclaim requesting a declaration that the PSA is a

valid and enforceable contract providing for a total purchase price of $200,000. Like Appellants,

Endeavor also requested an award of attorney’s fees under the Declaratory Judgments Act.

       Endeavor then moved for partial summary judgment, asserting as grounds that (1) the PSA

is an enforceable contract, (2) the total purchase price under the PSA is $200,000, (3) the stop

payment orders do not constitute a breach of the PSA, (4) Appellants are not entitled to rescission,

and (5) Endeavor is entitled to recover attorney’s fees, in an amount to be determined. Appellants

countered with their own summary judgment motion, asserting as their sole ground that the PSA

is void and unenforceable because Endeavor did not deliver to them an executed copy of the PSA

at or prior to a closing (which never occurred) or prior to stopping payment on the second set of

tendered checks. Endeavor did deliver an executed PSA to Appellants, but not until after this

lawsuit was filed.

       Appellants amended their pleadings twice more before the summary judgment hearing.

At the time of the hearing, they sought a variety of declarations concerning the validity and

enforceability of the PSA. Appellants also asserted claims for breach of contract, rescission,

                                                 5
removal of a cloud on title, and attorney’s fees. In addition, they asserted that Endeavor is

estopped from claiming that the PSA is a valid and enforceable contract.

       After the trial court heard and considered both sides’ summary judgment motions,

responses, replies, and evidence, the court signed an order denying Appellants’ motion and

granting Endeavor’s motion on all claims and issues except the amount of Endeavor’s attorney’s

fees. After considering the attorney’s fee issue by submission, the court signed its final judgment

on August 16, 2018. In that judgment, the court ordered that Appellants take nothing on their

claims against Endeavor, declared that the PSA is a valid and enforceable contract providing for a

total purchase price of $200,000, and awarded Endeavor attorney’s fees in the sum of $51,046,

plus contingent fees on appeal. This appeal followed.

                                        II. DISCUSSION

       Appellants raise three issues on appeal. They assert that the trial court erred as a matter

of law by granting Endeavor’s motion for summary judgment and awarding attorney’s fees, and

by denying their own cross-motion for summary judgment. As a foundation of their arguments,

Appellants argue that the PSA is not a valid and enforceable contract.

  A.   Standard of Review

       1. Motions for Summary Judgment

       Summary judgments are reviewed de novo. Mann Frankfort Stein & Lipp Advisors, Inc.

v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009); Provident Life & Accident Ins. Co. v. Knott, 128
S.W.3d 211, 215 (Tex. 2003). A party moving for traditional summary judgment has the burden

to establish that there is no genuine issue of material fact and that it is entitled to judgment as a

matter of law.    Mann, 289 S.W.3d at 848; TEX. R. CIV. P. 166a(c).            “[A] defendant who

                                                 6
conclusively negates at least one essential element of a cause of action or conclusively establishes

all the elements of an affirmative defense is entitled to summary judgment.” KCM Fin. LLC v.

Bradshaw, 457 S.W.3d 70, 79 (Tex. 2015).

       “When both sides move for summary judgment and the trial court grants one motion and

denies the other, we review the summary judgment evidence presented by both sides and determine

all questions presented.” Mann, 289 S.W.3d at 848. And where, as in this case, “the trial court’s

order does not specify the grounds for its summary judgment, we must affirm the summary

judgment if any of the theories presented to the trial court and preserved for appellate review are

meritorious.” Knott, 128 S.W.3d at 216.

   2. Entitlement to Attorney’s Fees

       “It is an abuse of discretion to award attorney’s fees under the Declaratory Judgment Act

when the statute is relied upon solely as a vehicle to recover such fees.” Crews v. Dkasi Corp.,

469 S.W.3d 194, 203 (Tex. App.—Dallas 2015, pet. denied). “A trial court abuses its discretion

if it acts without reference to any guiding rules and principles such that the ruling is arbitrary or

unreasonable. But a trial court has no discretion in determining what the law is or applying law

to facts.” Pressley v. Casar, 567 S.W.3d 327, 333 (Tex. 2019) (citations and internal quotation

marks omitted).

  B.   Issues One and Three: Whether the trial court erred in granting Endeavor’s motion
       for summary judgment while denying Appellants’ cross-motion for summary
       judgment

       Appellants contend in their first issue that the trial court erred by granting Endeavor’s

motion for summary judgment. They contend in their third issue that the trial court erred by

denying their motion for summary judgment. Because the motions, in large part, sought opposing

                                                 7
declarations concerning the validity of the PSA, we will address the first and third issues together.

   1. Contract Formation

          a.   Signature and Delivery

       With their primary argument, Appellants contend that Endeavor’s failure to deliver an

executed PSA to them at or prior to a formal closing renders the PSA void and unenforceable. In

opposition, Endeavor contends that longstanding contract law supports its position that the PSA is

valid and enforceable, regardless of when, or even whether, it delivered an executed copy to

Appellants. We begin with the applicable, fundamental principles of contract law.

       A contract is established when proven by a preponderance of evidence that an offer is

accepted, accompanied by consideration. Excess Underwriters at Lloyd’s, London v. Frank’s

Casing Crew & Rental Tools, Inc., 246 S.W.3d 42, 71 (Tex. 2008). Parties form a binding

contract when the following elements are present: (1) an offer, (2) an acceptance in strict

compliance with the terms of the offer, (3) meeting of the minds, (4) each party’s consent to the

terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding.

Prime Products, Inc. v. S.S.I. Plastics, Inc., 97 S.W.3d 631, 636 (Tex. App.—Houston [1st Dist.]

2002, pet. denied). Relevant to the subject matter at issue, the statute of frauds requires a contract

for the sale of real estate to be in writing and signed by the party to be charged with the promise

or agreement. See TEX. BUS. & COM. CODE ANN. § 26.01(b)(4); Copano Energy, LLC v Bujnoch,

593 S.W.3d 721, 729-30 (Tex. 2020) (“To satisfy the statute of frauds, it is not enough that the

writings state potential contract terms, . . . [t]he writings must evidence the agreement . . . so that

the contract can be ascertained from the writing.”).

       As for the elements of a contract, “[w]here an offer prescribes the time and manner of

                                                  8
acceptance, those terms must ordinarily be complied with to create a contract.” Padilla v.

LaFrance, 907 S.W.2d 454, 460 (Tex. 1995). Of note, a purported acceptance that changes a

material term of an offer results in a counteroffer rather than acceptance. Amedisys, Inc. v.

Kingwood Home Health Care, LLC, 437 S.W.3d 507, 513–14 (Tex. 2014). Indeed, contracts

require mutual assent, which, in the case of a written contract, is generally evidenced by the

signatures of the parties and delivery with the intent to bind. Baylor Univ. v. Sonnichsen, 221
S.W.3d 632, 635 (Tex. 2007). “But while signature and delivery are often evidence of the mutual

assent required for a contract, they are not essential.” Phillips v. Carlton Energy Grp., LLC, 475
S.W.3d 265, 277 (Tex. 2015).

        In Wright v. Hernandez, we set out relevant contract principles on which Appellants in part

rely:

        •   “[T]he absence of a party’s signature does not necessarily destroy an otherwise valid
            contract and is not dispositive of the question of whether the parties intended to be
            bound by the terms of a contract.”

        •   “[W]hen the terms of the contract make it clear that a signature is required, a party’s
            failure to sign the agreement will render the agreement unenforceable.”

        •   “Conversely, when there is no evidence in the record to suggest that the parties intended
            for a signature to be a condition precedent to the signing of an agreement, then a party’s
            failure to sign the agreement does not render the agreement unenforceable, as long as
            it appears that the parties otherwise gave their consent to the terms of the agreement.”

        •   “[A] parties’ [sic] intent to be bound by a contract may be evidenced by its conduct at
            the time a contract is drafted and by its subsequent conduct reflecting that it was acting
            in accordance with the terms of the contract.”

469 S.W.3d 744, 757-58, 760 (Tex. App.—El Paso 2015, no pet.).

        As explained by the Texas Supreme Court, “Texas law recognizes that a contract need not

be signed to be ‘executed’ unless the parties explicitly require signatures as a condition of mutual

                                                  9
assent. If a written draft of an agreement is prepared, submitted to both parties, and each of them

expresses his unconditional assent thereto, there is a written contract.” Phillips, 475 S.W.3d at

277; see Mid-Continent Cas. Co. v. Glob. Enercom Mgmt., Inc., 323 S.W.3d 151, 157 (Tex. 2010)

(contract need not be signed to be executed); W. Techs., Inc. v. Omnivations II, L.L.C., 583 S.W.3d
786, 793 (Tex. App.—El Paso 2019, no pet.) (contract may be accepted other than by signature;

unsigned contract may be binding if parties mutually assent to terms). As this Court recognized

in Omnivations, “[w]e must read the terms of the purported contract itself to decide whether an

offer was conditioned on certain criteria or not.” Id.

       Here, the record establishes that Endeavor made a written offer to Appellants to purchase

their interest in the subject property for a total purchase price of $185,000. The terms of the offer

were contained in the PSAs included with Endeavor’s transmittal letter. By means of its letter,

Endeavor indicated that Appellants should sign the PSAs and Warranty Deeds before a notary

public and return the executed originals if the offer was acceptable. We concluded in Lujan v.

Alorica, 445 S.W.3d 443, 449 (Tex. App.—El Paso 2014, no pet.), that instructions of this nature

manifested a requirement that a party accept an offer only by signing it. Specifically, the offeror

in Lujan instructed, “[i]f the above is agreeable to you, please sign and date below and return to

Human Resources.” Id. The offeror twice more required acceptance by signature, once by

characterizing the offeree’s signature as “a condition of accepting this offer of employment,” and

again by stating that the offer letter, “when signed by you, sets forth the terms of your

employment[.]” Id.

       On review, we conclude that the solicitation letter of Endeavor prescribed the method by

which Appellants could accept the enclosed offer to purchase their property. Although Appellants

                                                 10
generally followed Endeavor’s instructions, they did not accept the initial offer but instead made

a counteroffer by striking out the original purchase price of $185,000 and changing it to $200,000.

See Amedisys, 437 S.W.3d at 513–14 (“Under the common law, an acceptance may not change or

qualify the material terms of the offer, and an attempt to do so results in a counteroffer rather than

acceptance.”). The question that arises next, then, is whether Appellants in turn prescribed the

method by which Endeavor could accept their counteroffer. In contrast to Endeavor’s separate

letter of instruction, Appellants do not contend on appeal that they prescribed the method of

acceptance by any means other than the terms of the PSA itself. Consequently, the question at

hand is narrowed to whether there is any language in the PSA requiring that Endeavor accept

Appellants’ counteroffer only by signing the PSA and delivering an executed copy to Appellants.

In other words, we next consider whether there is any language in the PSA requiring Endeavor to

sign it as a condition precedent to its validity. See Mid-Continent Cas., 323 S.W.3d at 157–58.

       Appellants point to the following language in the PSA as requiring Endeavor to execute

and deliver the PSA before it has any binding effect:

       This Agreement has been duly executed and delivered on behalf of each of the
       parties and constitutes their legal and binding obligations enforceable in accordance
       with its terms. At Closing, all documents and instruments required to be executed
       and delivered shall constitute legal, valid, enforceable, and binding obligations of
       the parties.

       Following our review of the highlighted text, however, we disagree. Nothing in the

language prescribes a particular method required for Endeavor’s acceptance of Appellants’

counteroffer or requires Endeavor’s signature and delivery of the PSA as a condition precedent to

its validity. See Centex Corp. v. Dalton, 840 S.W.2d 952, 956 (Tex. 1992) (“A condition

precedent is an event that must happen or be performed before a right can accrue to enforce an

                                                 11
obligation.”). The first sentence of the quoted provision is a representation that the PSA has been

duly executed and delivered by each of the parties and constitutes their binding obligations. It

does not state that the PSA must be executed and delivered by each of the parties in order to

constitute their binding obligations. Stated conversely, it does not direct that the PSA is not

binding unless it is executed and delivered by each of the parties. Similarly, the second sentence

quoted above is a representation that documents required to be executed and delivered shall

constitute valid and enforceable obligations at closing. It does not state that the PSA is valid and

enforceable only if it is executed and delivered at closing.

       Unlike the offer in Lujan, or even Endeavor’s original offer, the PSA does not state that

Endeavor’s signature is a condition of accepting the offer or that the PSA sets forth the terms of

the parties’ agreement only when signed by Endeavor.            See Lujan, 445 S.W.3d at 449.

Therefore, the PSA does not supplant general contract law governing acceptance of an offer by

means other than signature and delivery. See Phillips, 475 S.W.3d at 277; Mid-Continent Cas.,
323 S.W.3d at 157; Omnivations, 583 S.W.3d at 793; Wright, 469 S.W.3d at 760.

       In sum, there is no language in the PSA requiring that Endeavor accept Appellants’

counteroffer only by signing and delivering the PSA, and no evidence that Endeavor’s signature

and delivery are conditions precedent to the PSA’s validity. See Mid-Continent Cas., 323 S.W.3d

at 157–58. The trial court correctly concluded that Endeavor’s failure to sign and deliver the PSA

did not render it invalid and unenforceable. This does not end our analysis, however, because

Endeavor still bore the affirmative duty of establishing that the PSA is valid and enforceable.

          b.   Manifestation of Assent

       Although Endeavor was not required to sign and deliver the PSA in order to accept

                                                 12
Appellants’ counteroffer, it was still required to accept the counteroffer by manifesting assent to

its terms. See Phillips, 475 S.W.3d at 277; Mid-Continent Cas., 323 S.W.3d at 157-58; Lujan,
445 S.W.3d at 448-49. Endeavor contends that it did so by tendering payment of the $200,000

purchase price.2 We agree.

        Endeavor’s original offer was to pay a total purchase price of $185,000 for the property of

both McGehee and Stewart. Appellants’ counteroffer, as reflected by their alteration of the

amount of the purchase price, required a total purchase price of $200,000. As Appellants did not

change the definition of “Seller,” which encompassed both McGehee and Stewart jointly, the

counteroffer required a sum of $200,000 in total, not $200,000 each. Further, Appellants did not

change any of the other terms originally offered by Endeavor. Endeavor’s tender of the $200,000

purchase price thus constituted acceptance of Appellants’ counteroffer and completed the

formation of the PSA as a valid and enforceable contract. See Phillips, 475 S.W.3d at 277

(contract formed where written draft is prepared, submitted to both parties, and each expressed

unconditional assent); Frank’s Casing, 246 S.W.3d at 71 (“contract is established when . . . offer

is accepted, accompanied by consideration”).

        Nevertheless, however, Appellants argue that there was no mutual assent to the PSA

because Endeavor requested a stop payment order on the second set of tendered checks before the

date on which those checks expired. But, as just discussed, Appellants assented by executing and

delivering the PSA and Warranty Deeds, and Endeavor assented by tendering the first set of

checks. The contract was fully formed at that time. See Phillips, 475 S.W.3d at 277; Mid-

2
  Endeavor also manifested assent to the terms of the PSA by letter to Appellants dated January 25, 2016. In that
letter, Endeavor describes the PSA as an agreement Appellants entered into with Endeavor, and further specifically
invokes the PSA provision permitting it to extend the review period and reschedule the closing.

                                                       13
Continent Cas., 323 S.W.3d at 157-58; Lujan, 445 S.W.3d at 448-49. Moreover, in satisfaction

of the requirements of the statute of frauds, the PSA included all essential elements of the

agreement to include the signatures of Appellants (as parties to be charged with the promise or

agreement) so that the contract could be ascertained from the writing without resort to oral

testimony. See TEX. BUS. & COM. CODE ANN. § 26.01(b)(4); Copano, 593 S.W.3d at 721.

       In sum, Endeavor conclusively established its acceptance of Appellants’ counteroffer and

mutual assent to the terms of the PSA. The trial court did not err by concluding that the PSA is

valid and enforceable notwithstanding Endeavor’s failure to sign and deliver it.

          c.   Necessity of a Formal Closing

       In addition to their “lack of signature and delivery” argument, Appellants argue that the

PSA was not valid and enforceable unless and until the parties conducted a formal closing, at

which time payment and title would be exchanged. See Bryant v. Cady, 445 S.W.3d 815, 819

(Tex. App.—Texarkana 2014, no pet.) (describing usual procedure concerning conventional

contract for sale of realty). Appellants do not cite any authority to support their assertion that

failure to hold a formal closing on a contract for the sale of real property prevents the formation of

the contract for sale. Indeed, such an argument defies logic by requiring that the contract be fully

performed before it can be said to exist.

       In addition, we agree with Endeavor that, in the circumstances of this case, conducting a

formal closing would have been superfluous. “The law does not require the doing of a vain and

useless thing[.]” Mackey v. Lucey Prod. Corp., 150 Tex. 188, 239 S.W.2d 607, 608 (1951); see

Ware v. Miller, 82 S.W.3d 795, 804 (Tex. App.—Amarillo 2002, pet. denied). Appellants’

obligation under the PSA was to deliver executed Warranty Deeds, which they did. In fact,

                                                 14
Appellants urged in their motion for summary judgment that “[e]ach [Appellant] fully performed

his obligation under the tendered PSAs . . . . Nothing remained to be done by [Appellants].”

Endeavor likewise performed its obligation by tendering payment of the purchase price. Nothing

further remained to be accomplished at a formal closing. Accordingly, Appellants’ contention

that the parties’ failure to conduct a formal closing rendered the PSA invalid is overruled.

            d.   Conditional Delivery of the PSA and Warranty Deeds

        “When an instrument bearing the signature of one party is delivered with the intent that it

not be binding until signed by the other party, the existence of the instrument is destroyed by the

other party’s failure to sign the instrument.” Lujan, 445 S.W.3d at 448-49. Appellants now urge

that they delivered the executed PSA with the intent that it not be binding until signed by Endeavor.

They further urge that the existence of the PSA was accordingly destroyed by Endeavor’s failure

to sign it. See id. Appellants do not, however, identify any summary judgment evidence to

establish the conditional intent that they now assert. In addition, that intent cannot be fairly

inferred from the circumstances.

        Appellants do not identify anywhere in the record where they gave any indication, prior to

filing this lawsuit, that they did not intend their delivery of the executed PSAs to be binding unless

and until Endeavor also signed each document.                  On the contrary, the only area of dispute

identified by Appellants prior to filing suit concerned the amount of the purchase price. Nothing

in the record supports Appellants’ belated position that, at the time they delivered the executed

PSAs, Appellants did not intend for them to be binding.3

3
  Because Appellants’ execution and delivery of the revised PSA was a counteroffer, their contention that it was not
binding unless Endeavor signed it is actually just a reiteration of the contract formation argument that Endeavor’s
signature was the required means of acceptance.

                                                        15
        Appellants similarly argue that the effect of their delivery of the Warranty Deeds was

limited by their subjective intent. “It is settled that title to transferred property will vest upon

execution and delivery of the deed.” Stephens Cty. Museum, Inc. v. Swenson, 517 S.W.2d 257,

261 (Tex. 1974). But a party may overcome the presumption that a deed was delivered with the

intent that it operates as a conveyance by showing that it was delivered for a different purpose.
Id. at 262. Appellants assert that they delivered the executed Warranty Deeds with the intent only

to trigger Endeavor’s title review period, not with the intent that the deeds operate as conveyances.

The only evidence Appellants cite in support of this assertion is a provision in the PSA itself stating

that the title review period begins upon Endeavor’s receipt of the executed Warranty Deeds. But

that provision merely identifies one effect of delivery of the deeds. It does not constitute any

evidence of Appellants’ actual intent in delivering the executed deeds and therefore does not

overcome the presumption that the deeds were delivered with the intent that they operate as

conveyances. See id.

        The record demonstrates that Appellants delivered the executed PSA and Warranty Deeds

to Endeavor unconditionally. Upon delivery, the PSAs were binding on Appellants—as the

parties to be charged—and the deeds effectively operated as conveyances of Appellants’ property

interests regardless of whether Endeavor4 signed and delivered the PSA to Appellants. The trial

court correctly concluded that there are no genuine issues of material fact regarding Appellants’

intent that preclude the court from granting Endeavor’s motion for summary judgment on the

validity and enforceability of the PSA.

4
  The PSA was also binding on Endeavor once it accepted Appellants’ counteroffer. Appellants’ argument to the
contrary notwithstanding, Endeavor has not taken the position that it is not bound by the PSA.

                                                     16
       In addition, because Appellants effectively conveyed their interests in the property by

executing and delivering the Warranty Deeds, the trial court did not err by granting summary

judgment that Appellants take nothing on their claim to remove a cloud from their title. See

Swenson, 517 S.W.2d at 261 (title vests on execution and delivery of deed); Vernon v. Perrien,

390 S.W.3d 47, 61 (Tex. App.—El Paso 2012, pet. denied) (plaintiff seeking removal of a cloud

on title must prove an interest in the property).

       In conclusion, the summary judgment evidence conclusively establishes that the PSA “is a

valid and enforceable contract providing for a total purchase price of $200,000 covering all

interests conveyed by Plaintiffs to Endeavor[.]” The trial court did not err by so declaring.

       Accordingly, Appellants’ challenges to that declaration are overruled.

   2. Breach of Contract

       Endeavor also sought summary judgment on the ground that stopping payment on the

second checks issued to Appellants was not a breach of the PSA. Appellants contend that

stopping payment was a breach of contract and that such breach excused them from any further

performance under the PSA. See Hernandez v. Gulf Grp. Lloyds, 875 S.W.2d 691, 692 (Tex.

1994) (material breach by one party excuses other party from any obligation to perform).

Specifically, Appellants argue that Endeavor’s breach relieved them of any obligation to accept

Endeavor’s third tender of payment.        Appellants’ argument is premised on the belief that

Endeavor stopped payment on the checks before they expired. But the record is to the contrary.

       The checks at issue are dated April 21, 2016, and each check states on its face that it is

“VOID AFTER 45 DAYS.” Accordingly, the checks expired by their own terms on June 4, 2016.

Each Appellant deposited his check with his bank before that date, but there is evidence that the

                                                    17
checks were not presented to Endeavor’s bank for payment until after that date. In any event,

Endeavor’s president stated in a summary judgment affidavit that he, on behalf of Endeavor,

stopped payment on Stewart’s check on June 6, 2016, and on McGehee’s check on June 9 or 10,

2016. These dates, which both fall after the date on which the checks became void, are further

reflected on the records of Endeavor’s and Appellants’ banks, respectively.

       A letter dated June 15, 2016, to McGehee from his bank contains a copy of the returned

check with a stop payment notation and the date of June 10, 2016. A letter to Stewart from his

bank, dated June 8, 2016, states that the check was returned on June 7, 2016 due to a stop payment

order. A second letter to Stewart from his bank, dated June 9, 2016, contains a copy of the

returned check with a stop payment notation and the date of June 6, 2016. Finally, a stop payment

report from Endeavor’s bank shows that payment was stopped on McGehee’s check on June 9,

2016, and payment was stopped on Stewart’s check on June 6, 2016.

       Appellants point out that the report from Endeavor’s bank indicates that the origination

date of the stop payment orders on Appellants’ checks was June 2, 2016. They urge that this

evidences a breach of contract by Endeavor because June 2 predates the expiration of the checks

on June 4. But the alleged breach is not the mere filing of a stop payment order—nothing in the

PSA precludes Endeavor from doing so. The alleged breach, as described in Appellants’ brief, is

“fail[ing] to make funds available for the purchase,” i.e., actually stopping payment on the checks.

       The record conclusively establishes that payment was not actually stopped on Appellants’

checks until June 6 for Stewart’s check, and June 9 or 10 for McGehee’s. This demonstrates that

the stop payment requests filed before the June 4 expiration date were not applied to Appellants’

checks until after that date. Those requests therefore did not impact the parties’ rights under the

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contract because the checks were already void by their own terms. In other words, even though

Endeavor’s requests were premature, they did not result in a breach of the PSA by failing to make

funds available for the purchase because the funds were already unavailable.

           The conclusion that Endeavor was not in breach of the PSA leads to the further conclusion

that Appellants were not excused from performing their obligations under that contract. Cf.

Hernandez, 875 S.W.2d at 692 (material breach by one party excuses other party). Consequently,

Appellants’ contention that they were entitled to reject Endeavor’s third tender of the correct

purchase price lacks merit.

           The summary judgment record conclusively establishes that Endeavor did not breach the

PSA by stopping payment on the second set of tendered checks.5 The trial court did not err by

granting summary judgment that Appellants take nothing on their claim for breach of contract.

           Accordingly, for all the reasons discussed above, Appellants’ first and third issues are

overruled.

     C.    Issue Two: Award of attorney’s fees

           The Declaratory Judgments Act (“Act”) authorizes a court to “award costs and reasonable

and necessary attorney’s fees as are equitable and just.” TEX. CIV. PRAC. & REM. CODE ANN. §

37.009. All parties in this case invoked the Act and requested an award of attorney’s fees pursuant

to its provisions. Nevertheless, in their second issue on appeal, Appellants argue that Endeavor

is not entitled to attorney’s fees because the true nature of Appellants’ claim is a claim to remove

a cloud from their purported title.             Regardless of how Appellants characterize their claim,

however, we note that Endeavor clearly asserted its own claim for declaratory judgment after it

5
    Because of these holdings, we need not address the parties’ arguments concerning merger, waiver, and estoppel.

                                                          19
had already been served with Appellants’ petition. That claim supports an award of attorney’s

fees if it is properly cognizable under the Act in light of the claims asserted by Appellants. See
id.

       “A counterclaim that presents no new controversy[ ] but exists solely to pave the way to

an award of attorney’s fees is improper.” Howell v. Mauzy, 899 S.W.2d 690, 706 (Tex. App.—

Austin 1994, writ denied); see Save Our Springs All., Inc. v. Lazy Nine Mun. Util. Dist., 198
S.W.3d 300, 318 (Tex. App.—Texarkana 2006, pet. denied). In other words, a party generally

may not invoke the Declaratory Judgments Act to settle disputes that are already pending before

the court. BHP Petro. Co. v. Millard, 800 S.W.2d 838, 841 (Tex. 1990) (orig. proceeding). This

is sometimes referred to as the “mirror-image” rule. See Washington Square Fin., LLC v. RSL

Funding, LLC, 418 S.W.3d 761, 776 (Tex. App.—Houston [14th Dist.] 2013, pet. denied); Save

Our Springs, 198 S.W.3d at 318.

       The mirror-image rule is not, however, without limitations. “Once a plaintiff claims relief

under the Declaratory Judgments Act, the mirror-image rule does not prohibit the trial court from

awarding attorney’s fees even if the defendant’s counterclaim for declaratory relief only duplicates

the claims already raised.” Save Our Springs, 198 S.W.3d at 318. The rationale is that, because

a court may award attorney’s fees to either party under the Act, “a defendant that raises a mirror-

image counterclaim in response to the plaintiff’s declaratory-judgment claim cannot be said to

have raised the counterclaim solely to pave the way for an award of otherwise-impermissible

attorney’s fees.” Washington Square, 418 S.W.3d at 776; see Castille v. Serv. Datsun, Inc., No.

01-16-00082-CV, 2017 WL 3910918, at *11 (Tex. App.—Houston [1st Dist.] Sept. 7, 2017, no

pet.) (mem. op.).

                                                20
        Appellants in the case before us invoked the Act and sought to recover attorney’s fees

under that Act in each of its petitions, including the live petition at the time of the summary

judgment hearing. Appellants also sought declaratory relief and attorney’s fees in their motion

for summary judgment. It appears from the record that Appellants did not take the position that

their claim is not one for declaratory relief, and that attorney’s fees are not available, until after the

trial court issued its adverse summary judgment rulings.

        Endeavor asserted its counterclaim for declaratory relief in response to Appellants’ First

Amended Original Petition for Declaratory Judgment. Because Appellants had already invoked

the Act, it cannot be said that Endeavor asserted its counterclaim “solely to pave the way for an

award of otherwise-impermissible attorney’s fees.” Washington Square, 418 S.W.3d at 776;

Castille, 2017 WL 3910918, at *11. As a result, even if Endeavor’s counterclaim for declaratory

relief simply mirrored the claims already raised, its claim for attorney’s fees would not be barred.

See Save Our Springs, 198 S.W.3d at 318.

        Endeavor’s claim for attorney’s fees is also supported by the principle that “a declaratory

judgment counterclaim [is allowed when it] has greater ramifications than the original suit[.]”

BHP Petro., 800 S.W.2d at 842. Such is the case when a defensive declaratory judgment presents

issues beyond those raised by the plaintiff (i.e., does more than simply mirror the plaintiff’s

claims). Id. at 841. The pleadings here show that Endeavor’s counterclaim presented an issue

beyond those raised by Appellants.

        Regardless of how their claims are characterized, the foundation of Appellants’ lawsuit is

the contention that the PSA is unenforceable because Endeavor did not sign and deliver it to them

at or before a formal closing. In responding, Endeavor counterclaimed for a mirror-image

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declaration that the PSA is valid and enforceable. But it also requested a declaration that the terms

of the agreement provided for a total purchase price of $200,000. As discussed above, Appellants

had previously rejected Endeavor’s tender of $200,000 on the ground that the purchase price was

actually $200,000 each. While Appellants then attempted to accept a second tender of that

amount, they later rejected a third tender of the same amount.

           The Act provides that “[a] person interested under a . . . written contract . . . may have

determined any question of construction or validity arising under the . . . contract . . . and obtain a

declaration of rights, status, or other legal relations thereunder.” TEX. CIV. PRAC. & REM. CODE

ANN. § 37.004. Appellants’ conduct brought into question the purchase price required by the PSA

and so warranted construction of that contractual term by means of a declaratory judgment. See
id. Endeavor’s request to construe this term presented an issue beyond those raised by Appellants,

which related only to the validity and enforceability of the PSA. Had the court simply denied

Appellants’ claims, the issue surrounding the purchase price would have remained unresolved and

subject to further dispute.          6
                                          We conclude, then, that Endeavor’s declaratory judgment

counterclaim was properly allowed and supports a grant of attorney’s fees because it had “greater

ramifications” than Appellants’ original suit. See BHP Petro., 800 S.W.2d at 842; see also First

City Nat. Bank of Midland v. Concord Oil Co., 808 S.W.2d 133, 138 (Tex. App.—El Paso 1991,

no writ) (upholding fee award because defendant sought declaratory relief different than that

sought by plaintiff).

           In sum, we conclude that the trial court did not abuse its discretion by awarding Endeavor

its attorney’s fees. Accordingly, Appellants’ second issue is overruled.

6
    Even on appeal, Appellants refer to the purchase price dispute as being unresolved.

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                                      III.    CONCLUSION

       We conclude that Appellants have not demonstrated error in the trial court’s summary

judgment rulings or by its award of attorney’s fees to Endeavor. The judgment of the trial court

is affirmed.

                                             GINA M. PALAFOX, Justice
April 29, 2020

Before Alley, C.J., Rodriguez, and Palafox, JJ.

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