Court Opinion

ID: 9350026
Source: CourtListenerOpinion
Date Created: 2022-12-23 08:10:47.958707+00
Date Added: 2024-06-11T16:48:52.268768
License: Public Domain

In The

                               Court of Appeals

                   Ninth District of Texas at Beaumont

                             ________________

                              NO. 09-22-00061-CV
                             ________________

                     ARMANDO VELARDEZ, Appellant

                                       V.

                      CARLOS E. PARRA JR., Appellee

________________________________________________________________________

                   On Appeal from the 284th District Court
                        Montgomery County, Texas
                      Trial Cause No. 21-03-04078-CV
________________________________________________________________________

                         MEMORANDUM OPINION

      Armando Velardez appeals the trial court’s Order Dismissing Case for want

of jurisdiction. Velardez sued Parra for breach of and to enforce a mediated

settlement agreement from a prior lawsuit between the parties, together with an

associated maintenance agreement. Parra answered and filed a Motion to Dismiss

Based Upon Res Judicata. After a hearing, the trial court found that all issues

regarding a 2018 breach of contract lawsuit between the same parties were resolved

                                        1
by final judgment after a bench trial in the prior lawsuit and the court dismissed the

second lawsuit for want of jurisdiction. On appeal, Velardez argues the trial court

erred by dismissing the subsequent underlying lawsuit because Parra breached the

terms of a Mediated Settlement Agreement (MSA) and an associated Two Year

Initial Maintenance Contract entered between the parties during the pendency of the

first lawsuit and his claims for breach of the terms of the MSA, including the separate

warranty agreement, were not litigated in the first lawsuit. The trial court entered an

Order Dismissing Case for want of jurisdiction. After review of the record, we hold

the trial court has subject matter jurisdiction over the underlying lawsuit and

therefore, we reverse the trial court’s order and reinstate the second lawsuit.

                                    Background

      In August 2017, Velardez hired Parra by written contract to install a septic

system at his property in Montgomery County. According to Velardez, a permit was

issued by the Montgomery County Health Department, but Parra did not properly

install the septic system and sewage leaked under Velardez’s home. Velardez sent

Parra notice via certified mail, but Parra did not correct the problems. Subsequently,

Velardez was issued a citation by the Montgomery County Health Department for

the faulty septic system.

                                          2
                                   First Lawsuit

      In November 2018, Velardez sued Parra under cause number 18-11-15230,

which case was assigned to the 284th District Court. In that suit, Velardez alleged a

claim for breach of contract, requested economic and actual damages, multiple

damages under the Texas Business and Commerce Code, exemplary damages, and

sought declaratory relief, and attorney’s fees. In response, Parra filed a general

denial, asserted affirmative defenses, and counterclaimed for the remaining balance

he alleged was owed to him under the initial contract Velardez signed to install the

septic system.

      While the first lawsuit was pending, the parties entered into a mediated

settlement agreement, termed a “Binding Settlement Agreement.” The MSA

provided in part that Parra would remove and replace the septic system in Velardez’s

property within 120 days. The MSA also stated that “[t]his is the proposal [and] is

preliminary agreement with the reservation of the right to come back to the mediator

to resolve any remaining issues.” As part of the MSA, Parra signed a written

agreement to provide maintenance of the septic system for two years. The parties

agreed to continue the first case for 120 days for Parra to comply with the terms of

the MSA. This agreement was signed by all parties.

      In August 2020, Parra filed a Motion to Dismiss Plaintiff’s Claims with

Prejudice Based Upon Mediated Settlement Agreement. In his motion, Parra argued

                                         3
that he had complied with the terms of the MSA, and Velardez failed to pay him the

remaining balance due under the MSA. He asked the court to dismiss Velardez’s suit

and grant him judgment in the amount of the remaining balance. The trial court did

not rule on Parra’s motion but instead, on August 18, 2020, the trial court entered a

final judgment after a bench trial ordering that Velardez take nothing on his claims

and Para recover $3750 from Velardez for actual damages, including attorney’s fees

and court costs. The judgment further provided “All other relief not expressly

granted herein is denied.” Neither party appealed from the Final Judgment. In this

appeal, Velardez did not include a reporter’s record from the trial that ended with a

final judgment favoring Para in cause number 18-11-15230.

                                 Second Lawsuit

      In March 2021, Velardez filed an Original Petition to Enforce Settlement

Agreement, which the district clerk assigned cause number 21-03-04078. In his

petition, Velardez stated

      Carlos E. Parra Jr., was to begin the two (2) year maintenance of the
      septic system beginning on the day the system passes inspection by
      Montgomery County Health Department. The project was not
      completed within one hundred and twenty days but was approved by
      the Montgomery County Health Department on September 23, 2020,
      starting the two-year maintenance agreement. (See Exhibit “B”)
      Defendant, however, has refused to abide by the terms of the contract
      by failing to perform the inspections, testing, and responding to the
      owners complaints and requests within 2-days as stated in the
      Agreement. The new system has totally failed and Defendant has totally
      refused to perform warranty work.

                                         4
Velardez alleged breach of contract against Parra and requested specific

performance, contending the MSA signed by the parties was a “binding and

enforceable contract between [Velardez] and [Parra]…[d]espite [Velardez’s]

repeated requests for performance, [Parra] has refused and continues to refuse to

perform. [Parra’s] conduct constitutes a material breach of the agreement. [Velardez]

has contacted [Parra] on at least seven different occasions and [Parra] has failed to

acknowledge the request made by [Velardez].” Parra answered and asserted various

affirmative defenses, including res judicata. Parra filed a Motion to Dismiss Based

Upon Res Judicata, attaching several pleadings and trial exhibits from the previous

lawsuit and trial, arguing the case was barred by res judicata and should be

dismissed.

      On December 10, 2021, the trial court signed an order dismissing the case

finding

      Although the cause of action for breach of the MSA was not alleged in
      the Closed Case, at trial the evidence related to a claim that Mr. Parra
      breached his contract to install a septic system because the septic
      systems did not work. The evidence in the trial of the Closed Case made
      no distinction between the Johnson System or the Hubert System. In
      fact, the evidence at trial included much post-MSA activity. With the
      Court having found that Mr. Parra’s contractual obligation was limited
      to installing the septic system per someone else’s design, and having
      found that Mr. Parra properly installed [what] he was hired to install,
      the issues in the pending case have already been resolved and are,
      therefore, moot. Consequently, this Court lacks jurisdiction over this
      moot case[.]

                                         5
           It is ORDERED that this case is DISMISSED FOR WANT OF
      JURISDICTION.

      The trial court subsequently denied Velardez’s motion for new trial but, upon

Velardez’s request, entered Findings of Facts and Conclusions of Law. The trial

court did not make additional Findings of Facts or Conclusions of Law as requested

by Velardez. Velardez then filed this appeal.

                                Standard of Review

      The question of whether a court has subject-matter jurisdiction is a question

of law, and a trial court’s order dismissing a cause for want of jurisdiction is

reviewed de novo. See Graber v. Fuqua, 279 S.W.3d 608, 631 (Tex. 2009)

(Wainwright, J., dissenting); Tex. Dep’t of Parks & Wildlife v. Miranda, 133 S.W.3d

217, 226 (Tex. 2004). A plaintiff’s petition must state facts which affirmatively show

the jurisdiction of the court in which the action is brought. Richardson v. First Nat’l

Life Ins. Co., 419 S.W.2d 836, 839 (Tex. 1967); see also Tex. Ass’n of Bus. v. Tex.

Air Control Bd., 852 S.W.2d 440, 446 (Tex. 1993). When reviewing a trial court’s

order dismissing a case for want of jurisdiction, we construe the pleadings in favor

of the plaintiff and look at the pleader’s intent. Tex. Ass’n of Bus., 852 S.W.2d at

446 (citations omitted); see also Athans v. Athans, No. 09-20-00047-CV, 2022 WL

120009, at *2 (Tex. App.—Beaumont Jan. 13, 2022), opinion withdrawn and

superseded on overruling of reh’g, No. 09-20-00047-CV, 2022 WL 1295429 (Tex.

App.—Beaumont Apr. 29, 2022, no pet.).
                                          6
                                      Analysis

      Our trial courts are courts of general jurisdiction and presumably have subject

matter jurisdiction unless a contrary showing is made. Dubai Petroleum Co. v. Kazi,

12 S.W.3d 71, 75 (Tex. 2000). In his first three issues, Velardez argues that (1) the

trial court has jurisdiction to enforce the MSA, (2) abused its discretion by

determining the issue of the enforceability of Parra’s warranty under the MSA had

already been tried, and (3) in dismissing Velardez’s claims without hearing any

evidence.

      Velardez filed the suit at issue in this appeal (“the second suit”) on March 24,

2021. Velardez entitled his petition as Original Petition to Enforce Settlement

Agreement. Parra filed his initial answer on June 14, 2021. While the Docket Control

Order was not made a part of the record before us, the trial court appears to have set

the case for trial on November 15, 2021. Parra filed a Motion for Continuance, and

the trial court scheduled a hearing via Zoom on November 8, 2021. At the hearing,

the trial court questioned its jurisdiction to hear the case, questioning whether res

judicata or collateral estoppel barred the second suit. The court reset the hearing to

December 3, 2021 and requested briefing from the parties on the subject of

jurisdiction. On December 2, 2021, Velardez filed what he entitled Plaintiff’s

Memorandum of Law of Jurisdiction. On December 3, 2021, Parra filed what he

denominated “Motion to Dismiss Based Upon Res Judicata,” attaching several

                                          7
pleadings and trial exhibits from the previous lawsuit and trial as evidence to support

his motion and requesting the trial court dismiss the lawsuit on the grounds of res

judicata. Without further hearing, the trial court entered the Order Dismissing Case

on December 10, 2021.

      In his first three issues, Velardez asserts the trial court has jurisdiction of the

second suit to enforce the MSA and maintenance agreement and the trial court erred

when it ruled it did not have jurisdiction and by summarily dismissing the lawsuit

on Parra’s motion to dismiss. This court abated the appeal and remanded the lawsuit

to the trial court to determine whether the trial court took judicial notice of any of

the record from the first lawsuit. While the trial court answered us in the negative,

the trial court clarified that it considered the pleadings and exhibits from the first

lawsuit attached to the motion to dismiss, as well as the trial court’s Findings of Fact

and Conclusions of Law the trial court entered in the first suit.1 Except for the

documents the trial court mentions in its findings, we note the trial court did not

conduct an evidentiary hearing in the second suit before ordering the case dismissed

for want of jurisdiction.

      1
          While the trial court prepared and filed separate Findings of Fact and
Conclusions of Law in the underlying lawsuit (second suit), it summarily dismissed
the suit for want of jurisdiction. Pursuant to Tex. R. Civ. P. 296, findings of fact and
conclusions of law are only proper in a case after it has been tried without a jury.
Therefore, any findings of fact or conclusions of law entered before a trial are
improper and cannot be considered by this court.
                                            8
      In the trial court’s Findings of Facts and Conclusions of Law from the first

lawsuit, the trial court found, in part, the following:

      Findings of Fact:

             7. After the above captioned cause was filed, the parties went to
      mediation and settled the case via a mediated settlement agreement (the
      “MSA”). The gist of the MSA was that Mr. Parra would obtain plans for
      an engineered septic system for Mr. Velardez’s property and would
      install that system.

             ...

            12. While it appears that the septic system on the property does
      not work, Mr. Parra never guaranteed that it would.

             Conclusions of Law:

            5. No one pleaded anything with regard to seeking relief on the
      MSA. Consequently, whether the MSA was complied with or breached
      was not before the Court for a ruling.

      In the second suit, Velardez alleged, in part:

             [] On November 20, 2019, in order to avoid the expense and
      uncertainties of further litigation, [Velardez] and [Parra] mediated, the
      parties agreed to recess the mediation. The parties later agreed to reset
      the mediation for July 03, 2020. The parties settled and compromised
      all claims which had been or could have been brought between them.
      To memorialize the settlement, [Velardez[ and [Parra] entered into a
      binding contract, the Binding Settlement Agreement (hereinafter
      “Agreement”).

             ...

             Carlos E. Parra Jr., was to begin the two (2) year maintenance of
      the septic system beginning on the day the system passes inspection by
      Montgomery County Health Department. The project was not
      completed within one hundred and twenty days but was approved by
                                           9
      the Montgomery County Health Department on September 23, 2020,
      starting the two-year maintenance agreement. (See Exhibit “B”)
      [Parra], however, has refused to abide by the terms of the contract by
      failing to perform the inspections, testing, and responding to the owners
      complaints and requests within 2-days as stated in the Agreement. The
      new system has totally failed and [Parra] has totally refused to perform
      warranty work.

Velardez seeks specific performance of the terms of the MSA and maintenance

agreement and, in the alternative, damages and attorney’s fees.

      A mediated settlement agreement is enforceable under contract law, and the

same procedures used to enforce and enter judgment on other contracts should apply

to mediated settlement agreements. See Schriver v. Tex. Dep’t of Transp., 293

S.W.3d 846, 851 (Tex. App.—Fort Worth 2009, no pet.). When the legislature

enacted the alternative dispute resolution statute, it did not order the courts to follow

a special procedure applicable only to mediated settlement agreements. It said only

that a mediated settlement agreement is enforceable as any other contract. Martin v.

Black, 909 S.W.2d 192, 195 (Tex. App.—Houston [14th Dist.] 1995, writ denied).

Texas courts have held generally that the essential terms for a settlement agreement

are the amount of compensation and the liability to be released. See Padilla v.

LaFrance, 907 S.W.2d 454, 455 (Tex. 1995) (concluding that complete and

enforceable agreement existed where terms included agreement to pay amount in

exchange “for full and final settlement of this case”); Disney v. Gollan, 233 S.W.3d

591, 595 (Tex. App.—Dallas 2007, no pet.) (concluding that settlement agreement’s

                                           10
essential terms are amount of compensation and liability to be released); CherCo

Props., Inc. v. Law, Snakard & Gambill, P.C., 985 S.W.2d 262, 266 (Tex. App.—

Fort Worth 1999, no pet.) (holding that settlement agreement that included payment

terms and statement that parties would execute mutual releases contained all material

terms). While the MSA in the first suit may not meet the terms of a settlement

agreement under alternate dispute resolution provisions in that it did not provide for

payment of an amount in exchange for a full and final settlement of the lawsuit, the

agreement must be analyzed for the elements of an enforceable contract.

      A plaintiff asserting a breach-of-contract claim must prove (1) the existence

of a valid contract; (2) the plaintiff performed or tendered performance as the

contract required; (3) the defendant breached the contract by failing to perform or

tender performance as the contract required; and (4) the plaintiff sustained damages

as a result of the breach. See USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479,

501 (Tex. 2018). The only methods existing under the rules of civil procedure to

enforce a contract and obtain a judgment are: (1) summary judgment proceedings, if

no fact issue exists; and (2) trial, jury or non-jury, if a fact issue exists. See Tex. R.

Civ. P. 166a, 262-270, 295. A trial court may enter a judgment on a mediated

settlement agreement where one of the parties contests his intent to be bound only

by following one of these vehicles set out in the rules of civil procedure. Martin, 909

S.W.2d at 196. See also In re BBX Operating, LLC, No. 09-17-00079-CV, 2017

                                           11
WL 1437135, at *1 (Tex. App.—Beaumont Apr. 20, 2017, orig. proceeding) (mem.

op.) (trial court abused its discretion by enforcing a settlement agreement

involuntarily without a bench trial or jury trial or by summary judgment); Lewoczko

v. Crews, No. 09-18-00432-CV, 2020 WL 6494207, at *4 (Tex. App.—Beaumont

Nov. 5, 2020, no pet.) (mem. op.). Like any other breach of contract claim, a claim

for breach of a settlement agreement is subject to the established procedures of

pleading and proof. A party against whom a claim for breach of contract has been

asserted is entitled to be confronted by appropriate pleadings, assert defenses,

conduct discovery, and submit factual disputes to a fact finder. Levetz v. Sutton, 404

SW.3d 798, 805-06 (Tex. App.—Dallas 2013, pet. denied).

      Parra’s motion to dismiss based on res judicata in the underlying lawsuit made

the basis of this appeal asserts an affirmative defense, i.e., a matter constituting an

avoidance or bar to the plaintiff’s petition. Tex. R. Civ. Proc. 94. Affirmative

defenses are “pleas in bar,” and do not provide a justification for summary dismissal

on the pleadings. Kelley v. Bluff Creek Oil Co., 309 S.W.2d 208, 214-15 (Tex. 1958);

Union Pac. Fuels, Inc. v. Johnson, 909 S.W.2d 130, 134 (Tex. App.—Houston [14th

Dist.] 1995, no writ); Montgomery Cty. v. Fuqua, 22 S.W.3d 662, 668-69 (Tex.

App.—Beaumont 2000, pet. denied). As defenses “in bar” they are not the proper

subject matter of disposition on a preliminary hearing before the court, such as pleas

                                          12
in abatement, for example. See Haesly v. Whitten, 580 S.W.2d 104, 106 (Tex. Civ.

App.—Waco 1979, no writ).

                                       Mootness

      In its order dismissing the case, the trial court found that it did not have

jurisdiction to hear Velardez’s motion because “[w]ith the Court having found that

Mr. Parra’s contractual obligation was limited to installing the septic system per

someone else’s design and having found that Mr. Parra properly installed what he

was hired to install, the issues in the pending case have already been resolved and

are, therefore, moot. Consequently, this Court lacks jurisdiction over this moot

case[.]” But, according to the trial court’s Findings of Facts and Conclusions of Law

filed in the first suit, under Conclusions of Law, the trial court stated:

            5. No one pleaded anything with regard to seeking relief on the
      MSA. Consequently, whether the MSA was complied with or breached
      was not before the Court for a ruling.

      Since the pleadings in the first suit did not involve a claim under the MSA,

the Final Judgment in the first lawsuit is not a final judgment that adjudicated the

claims Velardez raised in his second suit regarding Parra’s alleged breach of the

MSA. For that reason, the second suit Velardez filed to enforce the terms of the MSA

properly invoked the trial court’s jurisdiction.

      Here, Velardez sought to enforce the MSA, arguing that Parra breached the

contract and sought specific performance. The trial court did not conduct a trial

                                           13
regarding the allegations, but summarily dismissed Velardez’s petition as moot.

And, while Parra may seek to prove this claim could be moot, as we express no

opinion on the merits of that issue, the trial court erred by disposing of Velardez’s

allegation that Parra failed to service the septic system for two years as he promised

in the MSA in a summary fashion by dismissing the claim without following

“established procedures of pleading and proof[]” that include discovery and a

hearing required to resolve disputed issues of fact. See Levetz, 404 S.W.3d at 805-

06. Because the trial court improperly dismissed the underlying lawsuit without due

process, we sustain Velardez’s first, second, and third issues on appeal.2

                                     Conclusion

      Having found that the trial court dismissed the underlying lawsuit for want of

jurisdiction in error, we sustain Velardez’s first, second, and third issues on appeal

and we reverse and remand the trial court’s judgment and remand the cause to the

trial court for further proceedings consistent with the opinion.

      2
        As we have reversed the judgment in this case, we need not address
Velardez’s final issue as it would give him no greater relief on appeal. See Tex. R.
App. P. 47.1.
                                         14
      REVERSED AND REMANDED.

                                          ________________________________
                                                   CHARLES KREGER
                                                         Justice

Submitted on November 22, 2022
Opinion Delivered December 22, 2022

Before Kreger, Horton and Johnson, JJ.

                                         15