Court Opinion

ID: 2831301
Source: CourtListenerOpinion
Date Created: 2015-08-27 03:01:48.915222+00
Date Added: 2024-06-11T13:40:22.207964
License: Public Domain

IN THE SUPREME COURT OF TEXAS
                                         444444444444
                                            NO . 12-0907
                                         444444444444

         ANTHONY L. MCCALLA AND CHERYL A. MCCALLA, PETITIONERS,
                                                  v.

      BAKER’S CAMPGROUND, INC., KELLI GRAVES, AND KOURTNIE GRAVES,
                             RESPONDENTS

           4444444444444444444444444444444444444444444444444444
                             ON PETITION FOR REVIEW FROM THE
                     COURT OF APPEALS FOR THE TENTH DISTRICT OF TEXAS
           4444444444444444444444444444444444444444444444444444

                                          PER CURIAM

       The sole question in this case is whether a settlement agreement that includes all the terms

necessary for the contract’s enforcement is an enforceable contract as a matter of law, even if some

of its terms seem to imply that the parties contemplate forming an additional contract in the future.

We hold that such a contract is enforceable.

       Respondents Baker’s Campground, Inc. and Kelli and Kourtnie Graves (collectively Baker’s

Campground) are successors-in-interest to 380 acres of land once owned by Baker (now deceased).

Petitioners the McCallas entered into a lease agreement with Baker. The lease contained an option

that allowed the McCallas to buy the land if Baker decided to sell it. Even as this lease was ongoing,

Baker leased the land to the Davises (who are not involved in the present litigation). The McCallas

brought suit against Baker and the Davises to void the Davises’ lease and to exercise the McCallas’
option to buy the land. The McCallas obtained a favorable jury verdict that would have allowed the

McCallas to exercise the option to buy the land.

        After the jury verdict but before judgment was rendered, the McCallas and Baker entered into

settlement negotiations. They ultimately produced the settlement agreement that is the basis of the

present lawsuit. The agreement provided that the McCallas and Baker released each other from any

claims related to the lawsuit. The McCallas also agreed to purchase land identified as “the 380 acres

more or less of land which was the subject of the litigation” for $470,000. The McCallas only

became obligated to buy the land if the Davises’ lease was finally “declared null and void as a matter

of law” in the course of the litigation. If the Davises’ lease was found to be void, the McCallas

would then have 60 days to close on the purchase. The parties agreed “to execute any documents

that [were] reasonable and necessary to carry out the terms and provisions of this Agreement.” The

contract stated that it “shall be binding upon . . . the parties . . . .”

        The McCallas signed on a line under these terms. Additional handwritten terms underneath

these signature lines are initialed by the McCallas, and Baker signed underneath these handwritten

additions. The handwritten additions include provisions that “I will agree to $470,000 purchase

price above” and that “I agree to enter an agreement as discussed above.”

        After entering into this settlement agreement, the McCallas and Baker told the trial court that

they had reached an agreement but that they did not want to disclose the terms of the agreement. The

McCallas’ attorney stated that they “have settled all matters as between them,” and Baker’s attorney

“confirm[ed] with everything he just said.” Accordingly, the trial court entered a take-nothing

verdict in Baker’s favor.

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       The trial court entered judgment against the Davises based on the jury verdict. The court of

appeals ultimately found that the Davises’ lease was “unconscionable and unenforceable, not void.”

Ski River Dev., Inc. v. McCalla, 167 S.W.3d 121, 128 (Tex. App.—Waco 2005, pet. denied).

       The McCallas promptly attempted to exercise their right to buy the property under the

settlement agreement, but Baker’s Campground declined to sell the property. Instead, Baker’s

Campground brought a declaratory judgment action to void the settlement agreement. The trial court

rendered a partial summary judgment for the McCallas, finding that the settlement agreement was

an enforceable contract. The trial court then rendered a final judgment for the McCallas based upon

stipulated facts. The final judgment incorporated the partial summary judgment and found that the

McCallas owned the property and were due the profits Baker’s Campground had made on the

property after the settlement agreement was breached.

       The court of appeals reversed and remanded to the trial court. ___ S.W.3d ___. The court

found that, because the settlement agreement’s handwritten terms said that “I will agree” and “I agree

to enter an agreement” (emphases added), the agreement was ambiguous as to whether it was a

presently binding contract or merely an agreement to agree. Id. at ___. Because the settlement

agreement was ambiguous, the court held that determining its enforceability was a fact issue that

should not have been determined by summary judgment. Id.

       Assuming arguendo that the settlement agreement was an agreement to enter into a future

contract, the court of appeals erred in finding that the settlement agreement’s enforceablity was a

question of fact rather than a question of law. Agreements to enter into future contracts are

enforceable if they contain all material terms. Fort Worth Ind. Sch. Dist. v. City of Fort Worth, 22

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S.W.3d 831, 846 (Tex. 2000); Radford v. McNeny, 104 S.W.2d 472, 474–75 (Tex. 1937). After all,

the reason agreements to enter into future contracts are often unenforceable is that courts have no

way to determine what terms would have been agreed to after negotiation. Id. at 474. This concern

is not present when the agreement to enter into a future contract already contains all the material

terms of the future contract.

        Here, the settlement agreement did contain all the material terms of the future contract. The

material terms of a contract are determined on a case-by-case basis. T.O. Stanley Boot Co. v. Bank

of El Paso, 847 S.W.2d 218, 221 (Tex. 1992). Here, the settlement agreement involves the

settlement of a lawsuit and the sale of real property. The settlement agreement contained a general

release, a description of the real property to be sold, the timeline for closing the real property sale,

the identities of the transferor and transferee of the real property, and the price of the real property.

The agreement did not indicate that these or any other terms remained open for negotiation. If a

court was trying to enforce the settlement agreement, it could find all the terms necessary for its

enforcement. See Fort Worth Ind. Sch. Dist, 22 S.W.3d at 846. Therefore, the agreement contains

all material terms and is an enforceable contract.

        Accordingly, the settlement agreement was an enforceable contract as a matter of law, and

we reverse the court of appeals’ judgment. However, Baker’s Campground also argues that the trial

court granted more relief to the McCallas than the McCallas requested in their summary judgment

motion by finding breach of the settlement agreement and failing to consider Baker’s Campground’s

affirmative defenses. Baker’s Campground presented these issues to the court of appeals, but the

court of appeals did not reach them. ___ S.W.3d at ___ (“Because of our disposition of the second

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issue, we need not address the remaining issues.”). The McCallas concede in their Reply Brief to

this Court that “the question of breach of that agreement and [Baker’s Campground’s] affirmative

defenses . . . have not yet been properly adjudicated by the trial court.” Because the McCallas

concede these issues were not “properly adjudicated,” we see no reason to remand the case to the

court of appeals to consider these issues. Instead, we remand the case to the trial court for further

proceedings consistent with this opinion.

OPINION DELIVERED: August 23, 2013

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