Court Opinion

ID: 8483747
Source: CourtListenerOpinion
Date Created: 2022-11-15 11:08:32.007388+00
Date Added: 2024-06-11T16:49:48.148773
License: Public Domain

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

                                   NO. 03-21-00374-CV

                           City of Pflugerville, Texas, Appellant

                                             v.

                                735 Henna, LLC, Appellee

              FROM THE 345TH DISTRICT COURT OF TRAVIS COUNTY
   NO. D-1-GN-18-001908, THE HONORABLE CATHERINE MAUZY, JUDGE PRESIDING

                          MEMORANDUM OPINION

              The City of Pflugerville, Texas (the City) sued 735 Henna, LLC (Henna) for

damages to compensate it for the cost of condemning property owned by Henna. The City

alleged that it was forced to condemn the property because Henna had illegally subdivided a

larger tract of land (the Henna Tract) that contained the condemned property. See Tex. Local

Gov’t Code § 212.018 (providing that municipality may file action to recover damages from

owner of tract of land in amount adequate for municipality to undertake activity necessary to

bring about compliance with requirement regarding tract established or adopted by

municipality’s governing body). The City filed a motion for summary judgment asserting that,

as a matter of law, it was entitled to its claimed damages and attorney’s fees. Henna filed a

competing motion for summary judgment asserting that the City had released its claims against

Henna when the parties executed a settlement agreement to resolve the separate condemnation

proceeding the City had filed against Henna. The trial court denied the City’s motion for
summary judgment and granted Henna’s. In this appeal, the City challenges the trial court’s

summary-judgment rulings as well as its rulings on the City’s objections to Henna’s summary-

judgment evidence. We will affirm.

                                          BACKGROUND

                In November 2017, the City petitioned a Travis County court at law to condemn a

portion of the Henna Tract for roadway improvements, specifically to widen a road adjacent to

the Henna Tract.1 See Tex. Prop. Code § 21.012 (entity with eminent domain authority may

begin condemnation proceeding to acquire real property for public use if unable to agree with

owner on amount of damages). The court appointed three special commissioners to determine

the value of the land that the City sought to condemn. Id. § 21.014. Following a hearing, the

commissioners awarded Henna $365,000. The City objected to the award as excessive, and

the court set the case for trial. See id. § 21.018 (if party files objection to findings of special

commissioners, court shall cite adverse party and try case in same manner as other civil causes).

                In April 2018, while the First Lawsuit was still pending, the City sued Henna,

alleging that Henna had illegally subdivided the Henna Tract.2 The City asserted that, had

Henna subdivided the Henna Tract legally, Henna would have been required to dedicate to the

City the property the City sought to condemn in the First Lawsuit. The City alleged that Henna

“engaged in a conspiracy to illegally subdivide the property in order to maximize the price that

the City would have to pay to obtain the right of way.” The City brought a cause of action

pursuant to Texas Local Government Code section 212.018, which provides:

       1
           We will refer to this litigation as “the First Lawsuit.”
       2
           We will refer to this litigation as “the Second Lawsuit.”

                                                   2
        (a) At the request of the governing body of the municipality, the municipal
        attorney or any other attorney representing the municipality may file an action in
        a court of competent jurisdiction to:

        ....

                (2) recover damages from the owner of a tract of land in an amount
        adequate for the municipality to undertake any construction or other activity
        necessary to bring about compliance with a requirement regarding the tract and
        established by, or adopted by the governing body under, this subchapter.

The City sought as damages the cost of condemning the portion of the Henna Tract it needed to

make the intended road improvements.

                In April 2019, while both the First Lawsuit and the Second Lawsuit were pending,

Henna and the City participated in a full-day mediation. Following the mediation, Henna and the

City entered into a Rule 11 Agreement, which stated that the City and Henna “agree that all

claims and controversies between them regarding the condemnation matter are hereby settled on

this the 3rd day of April 2019 in accordance with [certain listed] terms and conditions.” One of

the Rule 11 Agreement’s terms recited that the “agreed amount of settlement for the property

at issue is Three Hundred Sixty Thousand Dollars ($360,000).” Thereafter, the court in the

First Lawsuit signed an Agreed Judgment awarding Henna $360,000 in exchange for the City’s

receiving a fee simple title to the property it had sought to condemn. The Agreed Judgment

stated that the settlement amount—an amount $5,000 less than the valuation assigned by the

appointed commissioners—constituted “full compensation for the condemnation of the [portion

of the Henna Tract] and any and all claims which have been made or which could have been

made in this litigation or as a result of the events giving rise to this litigation.”

                After the Agreed Judgment was signed in the First Lawsuit, the City filed a

motion for summary judgment in the Second Lawsuit asserting that, as a matter of law, it was

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entitled to recover from Henna the full settlement amount of $360,000, along with attorneys’ fees

and costs, as compensation for its having to institute condemnation proceedings instead of

receiving a dedication of a right of way it alleged it would have been entitled to had Henna

not illegally subdivided the Henna Tract. Henna filed a cross-motion for summary judgment

asserting that the City’s claim for damages in the Second Lawsuit had been released by the

Rule 11 Agreement and, additionally, was barred by the trial court’s Agreed Judgment in the

First Lawsuit based on the doctrine of res judicata. The trial court denied the City’s motion for

summary judgment and granted Henna’s. The City then perfected this appeal.

                                         DISCUSSION

               Under the general standard applicable to both summary-judgment motions, a

party moving for traditional summary judgment must establish there is no genuine issue of

material fact and he is entitled to judgment as a matter of law. See Tex. R. Civ. P. 166a(c);

Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215-16 (Tex. 2003). If the movant

establishes its right to summary judgment, the burden shifts to the nonmovant to raise a genuine

issue of material fact. See Centeq Realty, Inc. v. Siegler, 899 S.W.2d 196, 197 (Tex. 1995).

When, as in this case, both parties move for summary judgment and the trial court grants one

motion and denies the other, we must review both parties’ summary-judgment evidence,

determine all issues presented, and render the judgment that the trial court should have rendered.

FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000). We review a

summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.

2005). We take all evidence favorable to the nonmovant as true and indulge every reasonable

inference and resolve any doubts in its favor. Id.

                                                 4
                In five issues, the City argues that the trial court erred by granting Henna’s

motion for summary judgment and by denying its motion for summary judgment. The City also

challenges the trial court’s rulings on its and Henna’s objections to evidence submitted in support

of each party’s motion for summary judgment. Because it is dispositive, we first consider

whether the trial court properly concluded that, as part of the City’s settlement of the First

Lawsuit, the City released the claims it brought in the Second Lawsuit.

                “In general, a release surrenders legal rights or obligations between the parties to

an agreement.” Dresser Indus., Inc. v. Page Petrol., Inc., 853 S.W.2d 505, 508 (Tex. 1993)

(citing Cox v. Robison, 150 S.W. 1149, 1155 (Tex. 1912). It operates to extinguish claims or

causes of action between the parties and is an absolute bar to any right of action on the released

matter. See id. (citing Hart v. Traders & General Ins. Co., 189 S.W.2d 493, 494 (Tex. 1945). A

release is expressly designated as an affirmative defense. See Tex. R. Civ. P. 94. Like any other

agreement, a release is subject to the rules of construction governing contracts. Baty v. ProTech

Ins. Agency, 63 S.W.3d 841, 848 (Tex. App.—Houston [14th Dist.] 2001, pet. denied). When, as

here, neither party has alleged that the release was induced by fraud, and, as here, the language

of the release is unambiguous, the interpretation of the release is “to be decided by the court as a

question of law.” Memorial Med. Ctr. of E. Tex. v. Keszler, 943 S.W.2d 433, 434 (Tex. 1997)

(per curiam).

                To effectively release a claim, the releasing instrument must “mention” the

claim to be released. Victoria Bank & Tr. v. Brady, 811 S.W.2d 931, 938 (Tex. 1991). Any

claims not within the subject matter of the release are not discharged, even if those claims exist

when the release is executed. Id. It is not necessary, however, for the parties to specifically

enumerate all released claims, and the Texas Supreme Court has expressly recognized the

                                                 5
validity of “broad-form releases.” See Keck, Mahin & Cate v. National Union Fire Ins. Co. of

Pittsburgh, Pa., 20 S.W.3d 692, 698 (Tex. 2000). The parties need not identify every potential

cause of action relating to the subject matter of the release for that claim to be within the scope

of the release. Id.

               The Rule 11 Agreement at issue here states that “all claims and controversies

between [Henna and the City] regarding the condemnation matter are hereby settled.” (Emphasis

added). Thus, the question before us is whether the Second Lawsuit, in which the City sought to

recover the costs of condemning the section of the Henna Tract needed for its road improvement

project, is a controversy between Henna and the City “regarding the condemnation matter.”

We conclude that it is. Moreover, the Agreed Judgment recites that the parties agreed that

the amount awarded Henna pursuant to the terms of the Rule 11 Agreement constituted full

compensation for “any and all claims which have been made . . . as a result of the events giving

rise to” the litigation; i.e., the need for the City to condemn a portion of the Henna Tract.

               The City maintains that the Rule 11 Agreement could not have released the claims

made in the Second Lawsuit because those claims were already the subject of pending litigation

and the Rule 11 Agreement does not specifically mention the Second Lawsuit. The City further

urges that if the Rule 11 Agreement had been intended to address the claims made in the Second

Lawsuit, it would have referenced the Second Lawsuit and included a requirement that that case

be dismissed. But, as previously noted, the Texas Supreme Court has expressly stated that a

claim need not be specifically enumerated to fall within the scope of a broad form release. See

Keck, Mahin & Cate, 20 S.W.3d at 698. The City also asserts that the claims made in the Second

Lawsuit are not within the scope of the release because the First Lawsuit was an “administrative

proceeding” limited to condemnation of private property. This does not, however, serve to limit

                                                  6
the type or nature of claims released in the Rule 11 Agreement. A release is a contract and is

interpreted as such, not by reference to whether a particular claim was or could have been

asserted in the specific litigation the release resolves. In fact, the Texas Supreme Court has

repeatedly recognized that a release may often “encompass unknown claims and damages that

develop in the future.” See id. In the present case, the Rule 11 Agreement releases any and all

claims between the parties “regarding the condemnation matter,” which encompasses the City’s

claim seeking to recover the costs of condemning Henna’s property as damages in a separate

lawsuit. The trial court properly concluded that the City had released the claims asserted in the

Second Lawsuit and did not err by granting summary judgment in Henna’s favor on that ground.

Because the City’s claims in the Second Lawsuit had been released, the trial court also properly

denied the City’s motion for summary judgment.3

                                        CONCLUSION

              For the reasons stated in this opinion, we affirm the trial court’s orders granting

Henna’s motion for summary judgment and denying the City’s.

                                             __________________________________________
                                             Thomas J. Baker, Justice

Before Justices Goodwin, Baker, and Triana

Affirmed

Filed: November 10, 2022

       3
            Because the disposition of this appeal does not depend on any of the summary-
judgment evidence the City objected to, we need not address its appellate issues challenging the
trial court’s rulings on its evidentiary objections.

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