Court Opinion

ID: 3129061
Source: CourtListenerOpinion
Date Created: 2015-10-16 16:14:11.966002+00
Date Added: 2024-06-11T11:46:01.368613
License: Public Domain

OPINION
                                            No. 04-09-00750-CV

                              Anastacio G. GARZA and Barbara T. Garza,
                                             Appellants

                                                       v.

    Alejandro E. VILLARREAL Jr., Alfonso J. Garza, Pedro A. Gonzalez, Olga V. Guinee,
                   Cristobal Villarreal, and Huisache Cattle Company, Ltd.,
                                           Appellees

                      From the 111th Judicial District Court, Webb County, Texas
                                Trial Court No. 2007-CVF-001899-D2
                              Honorable Raul Vasquez, Judge Presiding

Opinion by:       Karen Angelini, Justice

Sitting:          Karen Angelini, Justice
                  Phylis J. Speedlin, Justice
                  Rebecca Simmons, Justice

Delivered and Filed: February 2, 2011

AFFIRMED IN PART, REVERSED AND RENDERED IN PART

           The parties in this case are owners of tracts of land in the Zeferino Villarreal Pasture of

the El Huisache Ranch located in Webb County, Texas. Appellant Anastacio G. Garza 1 brought

claims against Alejandro E. Villarreal Jr., Alfonso J. Garza, Pedro A. Gonzalez, Olga V. Guinee,

and Cristobal Villarreal, (hereinafter referred to collectively as “the Villarreals”), and against

1
Garza’s wife, Barbara T. Garza, was also a plaintiff below and is an appellant in this case. Anastacio and Barbara
will be referred to collectively as “Garza” in this opinion.
                                                                                      04-09-00750-CV

Huisache Cattle Company, Ltd. to enforce a right of first refusal or “preference right” as to the

sale of land in the El Huisache Ranch. The Villarreals responded to the suit, asserting Garza had

already assigned his preference right to Huisache. The parties went to mediation, agreed to settle

their claims, and executed a settlement agreement that met the requisites of Rule 11 of the Texas

Rules of Civil Procedure. Thereafter, a dispute arose concerning the meaning of paragraph 3 of

the agreement, which, among other things, suspends the preference right requirement for some

transactions. The Villarreals and Huisache filed a motion to enforce the settlement agreement.

Garza filed a motion to enforce or to clarify the settlement agreement. The trial court held a

hearing, granted the Villarreals’s and Huisache’s motion to enforce, and ordered Garza to pay

attorney’s fees incurred in prosecuting the motion to enforce the settlement agreement. The trial

court later signed a final judgment implementing the settlement agreement and Garza appealed.

       On appeal, Garza argues the trial court’s judgment must be reversed because the parties

did not intend Huisache to be included in paragraph 3 of the agreement. He also argues (1) the

settlement agreement is unenforceable because it lacks consideration, (2) the settlement

agreement is unenforceable because of mutual mistake, (3) the trial court should have granted his

motion to clarify the settlement agreement, and (4) the trial court erred in awarding attorney’s

fees. We reverse the judgment as to attorney’s fees, but affirm the judgment in all other respects.

                                          BACKGROUND

       A detailed explanation of the background facts is necessary to understand and analyze the

issues presented in this case.

   1. The Creation and Assignment of Preference Rights

       In 1987, the owners of the Zeferino Villarreal Pasture of the El Huisache Ranch executed

a partition deed, which partitioned the ranch’s surface acreage into five shares. At the time, all of

                                                -2-
                                                                                         04-09-00750-CV

the owners were members of the Villarreal family. The deed contained a right of first refusal

clause entitled “Preference Right.” This preference right clause granted each interest owner the

right to purchase any other interest owner’s share in the El Huisache Ranch upon the same terms

as offered another potential buyer. The deed required interest owners contemplating a sale of any

share of the El Huisache Ranch to notify the other interest owners of the terms of any potential

sale, and give them the opportunity to purchase the share under the same terms.

        In 1988, Huisache, which was not a party to the 1987 partition deed, purchased share five

of the El Huisache Ranch.

        In 1993, the appellant in this case, Garza, inherited part of share one of the El Huisache

Ranch. A year later, in 1994, Garza and Huisache entered into a transaction, whereby Garza and

Huisache sold and exchanged several tracts of land. As part of this transaction, Garza executed a

document entitled, “Irrevocable Assignment of Preference Right.” In the document, Garza

purported to transfer all of his preference rights to Huisache. The assignment stated it was

irrevocable.

        In 2007, Garza inherited part of share three of the El Huisache Ranch. Alejandro E.

Villarreal Jr., Alfonso J. Garza, Pedro A. Gonzalez, and Olga V. Guinee, who also inherited part

of share three of the El Huisache Ranch, agreed to sell their interests in share three to Cristobal

Villarreal. However, Garza desired to buy these interests. When Garza notified Alejandro E.

Villarreal Jr., Alfonso J. Garza, Pedro A. Gonzalez, and Olga V. Guinee that he was exercising

his preference right to their interests in share three, they refused to sell their interests to Garza.

        In 2008, Garza signed a document purporting to revoke his “Irrevocable Assignment of

Preference Right.” Garza took the position that the preference right was not assignable under the

                                                  -3-
                                                                                  04-09-00750-CV

terms of the deed, and therefore, the “Irrevocable Assignment of Preference Right” previously

executed by him was void.

   2. The Underlying Lawsuit and the Mediated Settlement Agreement

       On October 26, 2007, Garza filed the underlying suit seeking to enforce the preference

right contained in the 1987 partition deed. The suit included claims for specific performance and

breach of contract against Alejandro E. Villarreal Jr., Alfonso J. Garza, Pedro A. Gonzalez, and

Olga V. Guinee. In response, Alejandro E. Villarreal Jr., Alfonso J. Garza, Pedro A. Gonzalez,

and Olga V. Guinee, maintained that the preference right claimed by Garza was owned by

Huisache by virtue of the “Irrevocable Assignment of Preference Right” signed in 1994.

       Garza then amended his pleadings to (1) include Huisache as a party, (2) add a claim for

declaratory judgment, and (3) add claims for conspiracy and fraud in the inducement and

execution of the “Irrevocable Assignment of Preference Right” against Huisache. The

declaratory judgment claim requested interpretation of the preference right clause in the 1987

partition deed as it related to the assignment of such rights. The Villarreals and Huisache

countered by amending their pleadings to add a counterclaim for declaratory judgment as to the

parties’ rights, status, and legal relations with regard to the “Irrevocable Assignment of

Preference Right.”

       Eventually, the parties went to mediation, agreed to settle their claims, and executed a

Rule 11 settlement agreement.

   3. The Enforcement Proceedings

       When a dispute arose concerning the meaning of the second sentence in paragraph 3 of

the agreement, the parties filed competing motions to enforce the settlement agreement. The

disputed sentence states: “Further, the Parties agree tha[t] an exchange or swap of lands between

                                              -4-
                                                                                     04-09-00750-CV

owners of the lands covered by the 1987 Partition Deed shall not trigger the applicability of the

preference rights provision set forth in the 1987 Partition Deed with regard to said swapped or

exchanged lands.”

       In their motion to enforce the settlement agreement, the Villarreals and Huisache alleged

the parties’ settlement agreement was a binding and enforceable contract. The Villarreals and

Huisache alleged Garza breached the settlement agreement by failing to execute the “Waiver of

Preference Right” document in accordance with the terms of the agreement. The Villarreals and

Huisache asked the trial court to order Garza to (1) execute the “Waiver of Preference Right”

document, (2) execute all documents necessary to effectuate the terms of the settlement

agreement, and (3) pay attorney’s fees related to the enforcement motion. The motion also asked

the trial court for further relief to which the Villarreals and Huisache showed themselves entitled

to receive.

       Garza also filed a motion to enforce or clarify the settlement agreement. Garza asserted

the parties to the mediated settlement agreement “did not intend for Paragraph 3 to be interpreted

to mean that Huisache [] is a preference right holder and entitled to be a party to that specific

agreement.” Garza further asked the trial court to interpret the 1987 partition deed and to “clarify

and/or interpret the meaning of Paragraph 3.”

       At the enforcement hearing, Huisache asked the court to enforce the terms of the

settlement agreement and to order Garza to sign the “Waiver of Preference Right” document.

Huisache called one of its lawyers, Raul Leal, who testified about why the parties included

paragraph 3 in the settlement agreement. For his part, Garza called an expert witness who

testified about the meaning of the 1987 partition deed, and provided his legal opinion that

Huisache could not have acquired any preference rights through its purchase of tracts covered by

                                                -5-
                                                                                    04-09-00750-CV

the 1987 partition deed. Garza also explained that he refused to sign the “Waiver of Preference

Right” because it was unnecessary and because it attempted to confer a preference right on

Huisache which it did not have under the 1987 partition deed. Both parties also called witnesses

who testified about attorney’s fees.

       The trial court granted Huisache’s motion for enforcement and denied Garza’s motion to

enforce or clarify. The trial court found that Garza breached the terms of the settlement

agreement by his failure to recognize and acknowledge that (1) Huisache is one of the parties as

that term is defined and used in the settlement agreement, (2) Huisache is one of the owners of

the lands covered by the 1987 partition deed, and (3) an exchange or swap of lands between

owners of the lands covered by the 1987 Partition Deed, including Huisache, shall not trigger the

applicability of the preference right provision in the 1987 Partition Deed with regard to said

swapped or exchanged lands. The trial court also awarded the Villarreals and Huisache

$3,500.00 in attorney’s fees for prosecuting their motion to enforce. The trial court, however, did

not order Garza to execute the “Waiver of Preference Right” document.

                       ENFORCEMENT OF THE SETTLEMENT AGREEMENT

       In his first issue, Garza argues the trial court erred in granting the Villarreals’s and

Huisache’s motion to enforce the settlement agreement because the parties did not intend to

include Huisache in the second sentence of paragraph 3 of the agreement, and thereby suspend

the preference right requirement as to Huisache. In evaluating this issue, Garza urges us to look

not only to the plain language of the settlement agreement, but also to the circumstances

surrounding the signing of the settlement agreement. Garza does not contend that the settlement

agreement is ambiguous. Rather, Garza argues that his interpretation of the settlement agreement

is the only objectively reasonable interpretation of the settlement agreement.

                                               -6-
                                                                                      04-09-00750-CV

       “If parties reach a settlement agreement and execute a written agreement disposing of the

dispute, the agreement is enforceable in the same manner as any other written contract.” TEX.

CIV. PRAC. & REM. CODE ANN. § 154.071(a) (West 2005). “A settlement agreement is a contract,

and its construction is governed by legal principles applicable to contracts generally.” Donzis v.

McLaughlin, 981 S.W.2d 58, 61 (Tex. App.—San Antonio 1998, no pet.).

       A court’s primary concern in interpreting a contract is to ascertain the true intent of the

parties as expressed in the contract. Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207
S.W.3d 342, 345 (Tex. 2006). Courts interpret Rule 11 settlement agreements based on the

intention of the parties from the language of the entire agreement in light of the surrounding

circumstances, including the state of the pleadings, the allegations therein, and the attitude of the

parties with respect to the issues. Lesikar v. EOG Resources, Inc., 236 S.W.3d 457, 458-59 (Tex.

App.—Amarillo 2007, no pet.); In re Acevedo, 956 S.W.2d 770, 775 (Tex. App.—San Antonio

1997, orig. proceeding). Although courts may consider the facts and circumstances surrounding

the execution of the settlement agreement, such consideration “is simply an aid in the

construction of the contract’s language.” Sun Oil Co. v. Medeley, 626 S.W.2d 726, 731 (Tex.

1981). “If, in the light of surrounding circumstances, the language of the contract appears to be

capable of only one meaning, the court can then confine itself to the writing.” Id.

       In construing a contract, courts examine the instrument as a whole in an effort to

harmonize and give effect to all the provisions of the contract so that none will be rendered

meaningless. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). Courts give

terms their plain, ordinary, and generally accepted meaning unless the contract shows the parties

used them in a technical or different sense. Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154,

                                                -7-
                                                                                     04-09-00750-CV

158-59 (Tex. 2003). In construing a settlement agreement, a court may not rewrite the contract or

add to its language. Id. at 162.

        Ambiguity is a question of law, which a court may determine regardless of whether the

parties have raised the issue. See Coker v. Coker, 650 S.W.2d 391, 392-95 (Tex. 1983) (holding

settlement agreement was ambiguous despite the parties’ assertion to the contrary). Lack of

clarity does not create an ambiguity; nor does an ambiguity arise merely because the parties to

the agreement offer different interpretations of the agreement. DeWitt County Elec. Coop., Inc. v.

Parks, 1 S.W.3d 96, 100 (Tex. 1999). An ambiguity arises when an agreement is susceptible to

more than one reasonable meaning after the application of established rules of construction.

Univ. Health Servs., Inc. v. Renaissance Women’s Group, P.A., 121 S.W.3d 742, 746 (Tex.

2003). If the contract language can be given a certain or definite meaning, then the contract is not

ambiguous and the court should interpret it as a matter of law. Id.

        Here, the key provisions of the settlement agreement, which was signed by the all of the

parties and their attorneys, are:

        Huisache shall waive its right-of-first refusal for the purchase of Villarreal Lands
        set forth in items 2 and 4 below and shall endorse and ratify the Revocation of the
        Irrevocable Assignment of Preference Rights dated April 24, 2008, and recorded
        in Volume 2569, Page 359 of the Webb County Deed Records, executed by
        Garza.
        ….

        The Parties (other than Garza) shall waive their preference rights granted in the
        1987 Partition Deed (as defined below) with respect to Tract 2 depicted in the
        attached plat. Further, the Parties agree than (sic) an exchange or swap of lands
        between owners of the lands covered by the 1987 Partition Deed shall not trigger
        the applicability of the preference rights provision set forth in the 1987 Partition
        Deed with regard to said swapped or exchanged land.
        ….

        Cristobal, Garza and Villarreal shall grant to Huisache the preferential right to
        purchase any and all lands within the Zeferino Villarreal Pasture in substantially
        the same form as the preference rights set forth in the 1987 Partition Deed. Such

                                                -8-
                                                                                   04-09-00750-CV

       preferential rights shall only be triggered by any proposed sales to any party that
       is not a Villarreal Heir. For purposes of this Rule 11 Agreement, a Villarreal Heir
       shall mean Anastacio Garza, Cristobal Villarreal, Anna Worland, Irma Torres,
       Alfonso Villarreal and their respective heirs.
       ….

       Garza, Villarreal, Cristobal and Huisache shall release each other from any and all
       claims which have been made or which could have been made by the Parties in
       this Cause.
       ….

       The Parties shall execute all necessary documents to effectuate the foregoing
       terms….

(emphasis added).

       Consistent with contract construction principles, we examine the language of the

settlement agreement. The introductory paragraph of the settlement agreement expressly defines

the word “Parties” to include Huisache. The first sentence of paragraph 3 provides that, “The

Parties (other than Garza) shall waive their preference rights granted in the 1987 Partition Deed

(as defined below) with respect to Tract 2 depicted in the attached plat.” Nevertheless, Garza

argues, and we agree, that this sentence—in and of itself—confers no additional rights on

Huisache. Obviously, Huisache could not waive preference rights it did not have. Thus, even

though Huisache is included in the definition of “Parties,” if Huisache did not have any

preference rights under the 1987 partition deed, it could not waive any preference rights under

the deed.

       The second sentence of paragraph 3, which is at the heart of the parties’ dispute,

provides, “Further, the Parties agree than (sic) an exchange or swap of lands between owners of

the lands covered by the 1987 Partition Deed shall not trigger the applicability of the preference

rights provision set forth in the 1987 Partition Deed with regard to said swapped or exchanged

lands.” Here, the plain language of the agreement shows Huisache was intended to be included in

                                               -9-
                                                                                             04-09-00750-CV

this provision. At the time of the agreement, Huisache was an owner of the lands covered by the

1987 partition deed. Thus, this provision suspends the preference right requirement as to any

exchange or swap of lands with Huisache.

        On appeal, the crux of Garza’s argument is that paragraph 3 contemplates only family

members swapping or exchanging properties within the Zeferino Villarreal Pasture among

themselves. Garza argues, “Reading the two paragraphs together reveals the treatment of

Huisache as a third party and an intent to exclude Huisache from the free exchange of swap of

Pasture lands as among the family.” Garza further contends the trial court’s findings and

judgment are erroneous because the parties could not have intended Huisache to be included in

paragraph 3 because to do so would have invested Huisache with greater rights than it claimed as

part of the underlying litigation. As part of this argument, Garza points out that Huisache never

took the position in the underlying litigation that it derived any preference rights from the 1987

partition deed; instead, it merely argued that it derived its preference rights from the assignment. 2

        Garza’s argument is premised in part on a misinterpretation of the trial court’s finding

and its judgment. The parties did not reach a settlement agreement that determined the parties’

rights under the 1987 partition deed. And, the trial court’s judgment, like the settlement

agreement, did not determine the parties’ rights under the 1987 partition deed. Nothing in

paragraph 3 confers a preference right on Huisache, and the trial court did not find that it did.

Rather, the trial court found the second sentence of paragraph 3 suspends the preference right

requirement in the 1987 partition deed as to owners of lands covered by the 1987 partition deed.

Huisache, as an owner of share three in the 1987 partition deed, clearly is an owner of the lands

covered by the 1987 partition deed. Thus, any swap or exchange of lands between Huisache and

2
 At the enforcement hearing, Huisache’s counsel indicated Huisache acquired preference rights by virtue of the
assignment and the 1987 partition deed. At oral argument, however, Huisache’s counsel indicated the only way
Huisache acquired preference rights was by virtue of the assignment.

                                                    - 10 -
                                                                                  04-09-00750-CV

another owner of the lands covered by the 1987 partition deed suspends the preference right

provision set forth in the 1987 partition deed.

       We conclude the language of the settlement agreement can be given a certain or definite

meaning. We further conclude that the settlement agreement is unambiguous. Generally, when

the terms of a written contract are plain and unambiguous, parol evidence is inadmissible to vary

the terms of the agreement or to show the construction placed upon them by the parties at the

time of its making. Murphy v. Dilworth, 151 S.W.2d 1004, 1005 (1941); Pitman v. Lightfoot, 937
S.W.2d 496, 516 (Tex. App.—San Antonio 1996, writ denied). Although Garza invites us to

examine and construe the terms of the 1987 partition deed in conjunction with construing the

settlement agreement, we decline to do so. Because the settlement agreement is unambiguous,

the terms of the 1987 partition deed are parol evidence. For the same reason, we decline to

consider Leal’s testimony about the parties’ intent in including paragraph 3 in the settlement

agreement.

       We also disagree with Garza’s contention that we are required to construe the terms of

the 1987 partition deed because the settlement agreement incorporates it by reference. The

settlement agreement does not incorporate the terms of the 1987 partition deed by reference.

       Moreover, contrary to Garza’s assertions, paragraph 3 and paragraph 10 are not in

conflict. The purpose of sentence one in paragraph 10 is to have the owners of the tracts covered

by the 1987 partition deed grant Huisache limited preference rights “in substantially the same

form as the preference rights set forth in the 1987 Partition Deed.” The purpose of sentences two

and three of paragraph 10 is to preclude the use of these preference rights as to sales involving

Villarreal heirs, including Garza. As previously discussed, the purpose of sentence one in

paragraph 3 is to have the parties who possessed preference rights under the 1987 partition deed

                                                  - 11 -
                                                                                    04-09-00750-CV

waive those preference rights with respect to tract two. The purpose of sentence two in paragraph

3 is to suspend the preference right requirement between owners of the tracts of land covered by

the 1987 partition deed.

       Garza argues his interpretation of the second sentence of paragraph 3—that the parties

did not intend to suspend the preference right requirement as to exchanges or swaps with

Huisache—is the only reasonable interpretation that can be given this sentence. The implication

of Garza’s argument is that the trial court’s contrary interpretation was unreasonable and,

therefore, must be avoided. We disagree. “We construe contracts ‘from a utilitarian standpoint

bearing in mind the particular business activity sought to be served’ and ‘will avoid when

possible and proper a construction which is unreasonable, inequitable, and oppressive.’” Frost

Nat’l Bank v. L & F Dist., Ltd., 165 S.W.3d 310, 312 (Tex. 2005) (quoting Reilly v. Rangers

Mgmt., Inc., 727 S.W.2d 527, 530 (Tex. 1987)). Based on the express language of the agreement,

we conclude the parties intended Huisache to be included in the second sentence of paragraph 3.

Nothing from the settlement agreement as written or from the surrounding circumstances

supports a different interpretation.

       We conclude, as the trial court did, that the settlement agreement provides that an

exchange or swap of lands between the owners of the lands covered by the 1987 partition deed,

including Huisache, shall not trigger the applicability of the preference right provision set forth

in the 1987 partition deed with regard to said swapped or exchanged lands. This interpretation is

consistent with the plain language of the settlement agreement and the circumstances under

which the settlement agreement was written. In addition, this interpretation is consistent with

other parts of the settlement agreement. We hold the trial court did not err in granting the

Villarreals’s and Huisache’s motion to enforce the settlement agreement.

                                               - 12 -
                                                                                   04-09-00750-CV

                                    LACK OF CONSIDERATION

       The Garzas argue the settlement agreement was unenforceable because it was not

supported by valid consideration.

       “Consideration consists of either a benefit to the promisor or a detriment to the

promisee.” Robinson v. Nat’l Autotech, Inc., 117 S.W.3d 37, 41 (Tex. App.—Dallas 2003, pet.

denied). A contract lacking in consideration is unenforceable. Id. The surrender of a legal right

constitutes valid consideration to support a contract. In re Alamo Lumber Co., 23 S.W.3d 577,

579 (Tex. App.—San Antonio 2000, orig. proceeding [mand. denied]). Giving up the right to

have a court decide a disputed issue is sufficient consideration to support a contract. Lampkin v.

Lampkin, 480 S.W.2d 35, 37 (Tex. Civ. App.—El Paso 1972, no writ). The compromise of

doubtful and conflicting claims is good and sufficient consideration to uphold a settlement

agreement. Citgo Refining and Mktg., Inc. v. Garza, 187 S.W.3d 54, 61 (Tex. App—Corpus

Christi 2005, pet. dism’d by agreement) (quoting McDonough v. First Nat’l Bank, 34 Tex. 309,

320 (1871)).

       Here, the record shows there was valid consideration to support the settlement agreement.

The settlement agreement provisions show Huisache waived its preference right as to two sales,

ratified Garza’s revocation of the assignment, and released Garza and the other defendants from

all claims that were made in or could have been made in the cause. Based on the foregoing, we

conclude there was valid consideration to support the settlement agreement.

                                       MUTUAL MISTAKE

       The Garzas also argue the settlement agreement was unenforceable based on mutual

mistake.

                                              - 13 -
                                                                                                   04-09-00750-CV

        Mutual mistake is an affirmative defense that must be pleaded and proved. Tobbon v.

State Farm Mut. Auto. Ins. Co., 616 S.W.2d 243, 245 (Tex. Civ. App.—San Antonio 1981, writ

ref’d n.r.e.). A mutual mistake is one common to all parties, wherein each labors under the same

misconception respecting a material fact, the terms of the agreement, or the provision of a

written instrument designed to embody such an agreement. Allen v. Berrey, 645 S.W.2d 550, 553

(Tex. App.—San Antonio 1982, writ ref’d n.r.e.) (citing Capitol Rod & Gun Club v. Lower

Colorado River Auth., 622 S.W.2d 887, 892 (Tex. Civ. App.—Austin 1981, writ ref’d n.r.e.)). In

order for the defense of mutual mistake to be sustained, there must be fact issues raised to show

that all parties to a contract were acting under the same understanding of the same material fact.

Id. at 553-54 (citing Newsom v. Starkey, 541 S.W.2d 468 (Tex. Civ. App.—Dallas 1976, writ

ref’d n.r.e.)). Here, the record shows Garza presented no evidence to establish the defense of

mutual mistake. Thus, the settlement agreement was not unenforceable based on mutual mistake.

                                             MOTION TO CLARIFY

        Garza’s initial motion to enforce or clarify included only a general request that the trial

court clarify the settlement agreement. Later, in his written objections to the proposed order

enforcing the settlement agreement, Garza expanded his clarification request. In these objections,

Garza again made a general request for clarification arguing that “many questions remain[ed]”

about the interpretation of the settlement agreement. In addition, Garza asked that another

paragraph be added to the settlement agreement. 3

3
 The paragraph was: “Although the Court finds that Huisache Cattle Company, Ltd., pursuant to the agreements set
forth in paragraph 3 of the Rule 11 Agreement, can swap or exchange lands covered by and described in the 1987
Partition Deed for other lands covered by and described in the 1987 Partition Deed without triggering the
applicability of the preference rights provisions set forth in the 1987 Partition Deed with regard to such swapped or
exchanged lands, the lands acquired by Huisache Cattle Company, Ltd., in compliance with the preference rights
provisions of the 1987 Partition Deed and/or under the provisions of paragraph 3 of the Rule 11 agreement, shall be
free of the preference rights provisions of the 1987 Partition Deed and Huisache Cattle Company, Ltd., shall not, as
a result of such acquisitions, acquire any preference rights as to other property conveyed by and described in the
1987 Partition Deed.”

                                                       - 14 -
                                                                                       04-09-00750-CV

       As we have previously held, the settlement agreement in this case was clear and definite.

Thus, there was no reason for the trial court to clarify its terms. In addition, Garza asked the trial

court to add to the language of the settlement agreement. The trial court, however, had no

authority to add to the language of the settlement agreement. See Schaefer, 124 S.W.3d at 162. In

construing a settlement agreement, courts may not rewrite the agreement or add to its language.

See id. (declining to rewrite the parties’ contract or add to its language). For these reasons, we

conclude the trial court did not err in denying the motion for clarification.

                                        ATTORNEY’S FEES

       In his final issue, Garza argues that the trial court erred in awarding attorney’s fees

because the Villarreals and Huisache recovered no breach of contract damages.

       A party is prohibited from recovering attorney’s fees unless permitted by statute or by

agreement between the parties. Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299, 311 (Tex.

2006); Travelers Indem. Co. of Connecticut v. Mayfield, 923 S.W.2d 590, 593 (Tex. 1996). In the

present case, there was no attorney’s fees agreement between the parties. And, the applicable

statute, section 38.001(8) of the Civil Practice and Remedies Code, permits attorney’s fees only

when damages have been recovered. TEX. CIV. PRAC. & REM. CODE ANN. § 38.001(8) (West

2008); Green Int’l, Inc. v. Solis, 951 S.W.2d 384, 390 (Tex. 1997) (holding plaintiff could not

recover attorney’s fees under section 38.001(8) of the Civil Practice and Remedies Code, when it

failed to recover breach of contract damages); see also Intercont. Group P’ship v. K.B. Home

Star, L.P., 295 S.W.3d 650, 653 (Tex. 2009).

       In response to this issue, the Villarreals and Huisache acknowledge that generally

attorney’s fees cannot be recovered under section 38.001(8) unless the prevailing party also

recovers damages. Nevertheless, the Villarreals and Huisache urge this court to uphold their

                                                - 15 -
                                                                                  04-09-00750-CV

award of attorney’s fees, arguing Green Int’l should be modified to permit recovery of attorney’s

fees when a settlement agreement is enforced by a party but no actual damages are sought.

       As an intermediate appellate court, however, we are not in a position to evaluate the

argument that the Texas Supreme Court’s holding in Green Int’l should be modified. “It is not

the function of a court of appeals to abrogate or modify established precedent.” Lubbock Co. v.

Trammel’s Lubbock Bail Bonds, 89 S.W.3d 580, 585 (Tex. 2002). As an intermediate court of

appeals, we are obligated to follow the precedents of the Texas Supreme Court unless and until

the high court overrules them or the legislature supersedes them by statute. Therefore, because

the Villarreals and Huisache recovered no damages, we hold the trial court erred in awarding

attorney’s fees. See Green Int’l, 951 S.W.2d at 390; Medistar Corp. v. Schmidt, 267 S.W.3d 150,

165 (Tex. App.—San Antonio 2008, pet. denied) (holding the trial court erred in allowing the

prevailing party to recover attorney’s fees under section 38.001 when it failed to recover breach

of contract damages).

                                          CONCLUSION

       We reverse the part of the judgment ordering Garza to pay attorney’s fees in the amount

of $3,500.00, and render judgment that the Villarreals and Huisache take nothing on their claim

for attorney’s fees. We affirm the judgment in all other respects.

                                                  Karen Angelini, Justice

                                               - 16 -