Court Opinion

ID: 4667491
Source: CourtListenerOpinion
Date Created: 2021-03-15 07:15:44.938161+00
Date Added: 2024-06-11T08:02:57.362084
License: Public Domain

Opinion issued March 11, 2021

                                       In The

                                Court of Appeals
                                      For The

                           First District of Texas
                              ————————————
                               NO. 01-20-00090-CV
                             ———————————
                PRINCE UCHENCHI NWAKANMA, Appellant
                                          V.
                   UMAWA IMO AND IKEO IMO, Appellees

                    On Appeal from the 240th District Court
                           Fort Bend County, Texas
                     Trial Court Case No. 17-DCV-246591

                           MEMORANDUM OPINION

      This is an appeal from a judgment for money damages entered after a bench

trial in a suit for breach of contract. The contract at issue is a settlement agreement

between attorney Prince Uchenchi Nwakanma and his former client, Umawa Imo.
      Imo is the former owner of a physical therapy clinic. In 2009, Imo was

indicted in federal district court for multiple counts of healthcare fraud arising from

his clinic’s fraudulent billing practices. Imo retained Nwakanma as counsel and

provided him over $2 million for his defense. The case proceeded to trial, and Imo

was convicted on all counts, sentenced to 327 months’ confinement, and ordered to

pay over $30 million in restitution.

      Imo then filed a civil suit against Nwakanma in Texas state court, alleging

that Nwakanma had misappropriated the funds provided for Imo’s defense and

committed various other breaches of his fiduciary duty. Imo also filed an attorney

grievance complaint in Kansas, where Nwakanma was licensed to practice law.

      During the pendency of the two proceedings, Imo and Nwakanma entered into

a settlement agreement. Nwakanma agreed to pay Imo $425,000 in scheduled

installments, and Imo agreed to dismiss his civil suit and to notify the Kansas State

Bar that his dispute with Nwakanma had been resolved and that he would no longer

participate in any proceeding relating to his grievance complaint.

      After the parties signed the settlement agreement, Nwakanma made the initial

installment payments, and Imo dismissed his civil suit and sent the required notice

to the Kansas State Bar. But the Bar did not dismiss the disciplinary proceeding;

instead, it continued to investigate the misconduct alleged by Imo as well as the

circumstances surrounding Imo’s decision to dismiss his grievance complaint. As a

                                          2
result, Nwakanma refused to make any further installment payments, arguing that

the dismissal of the disciplinary proceeding was a condition precedent to his duty to

continue to perform under the settlement agreement.

      Imo then filed the instant suit, asserting a single claim for breach of contract.

After a bench trial, the trial court found Nwakanma liable for breach of the settlement

agreement and entered judgment awarding Imo actual damages, liquidated damages,

attorney’s fees, costs, and pre- and post-judgment interest.

      In four issues, Nwakanma argues that we should reverse the trial court’s

judgment in whole or in part because (1) the settlement agreement violates public

policy and is therefore unenforceable, (2) the evidence is legally insufficient to show

he breached the agreement, (3) the evidence is legally insufficient to show an

additional party awarded damages by the judgment, specifically, Imo’s wife, was a

party to or beneficiary of the agreement, and (4) the liquidated damages provision is

an unenforceable penalty.

      We hold that (1) Nwakanma has failed to preserve his public policy complaint

for review, (2) the evidence is legally sufficient to show Nwakanma breached the

settlement agreement, (3) whether the evidence is sufficient to show Imo’s wife is a

party to or beneficiary of the agreement is irrelevant because the judgment, contrary

to Nwakanma’s understanding, does not award her damages, and (4) Nwakanma

failed to preserve his liquidated-damages complaint for review.

                                          3
      Therefore, we affirm.

                                    Background

      This appeal arises from a settlement agreement between a lawyer, Nwakanma,

and his former client, Imo. The underlying dispute centered around Nwakanma’s

alleged misappropriation of funds provided for Imo’s legal defense in a criminal

prosecution in federal district court. The material facts are largely undisputed.

Imo is indicted for fraud and retains Nwakanma as counsel

      Umawa Imo is the former owner of City Nursing Services of Texas, a now-

defunct physical therapy clinic that once operated in Houston, Texas. In 2009, Imo

was indicted in federal district court for multiple counts of healthcare fraud arising

from his involvement in a scheme by which CNS fraudulently billed Medicare and

Medicaid for millions of dollars.

      After his indictment, Imo was approached by Nwakanma, an attorney who

was licensed to practice law in Kansas but resided and maintained a law office in

Houston. Nwakanma and Imo are both members of Houston’s Igbo Nigerian

community, which is how Nwakanma learned of Imo’s situation. Nwakanma offered

to provide a variety of services related to Imo’s legal defense, including assistance

and consultation in retaining defense counsel and management of Imo’s legal

defense funds. Imo accepted Nwakanma’s offer, retained attorney Dick DeGuerin

                                          4
on Nwakanma’s recommendation, and provided Nwakanma over $2 million to hold

in trust on his behalf for his legal defense.

Imo is tried and convicted

      The case proceeded to trial. The jury found Imo guilty on multiple counts of

healthcare fraud, conspiracy to commit healthcare fraud, mail fraud, money

laundering, and structuring to avoid reporting requirements. The trial court adopted

the jury’s findings and sentenced Imo to 327 months’ imprisonment and ordered him

to pay $30,216,592.15 for restitution and a $4,800 special assessment. See United

States v. Imo, 739 F.3d 226 (5th Cir. 2014).

Imo files a grievance complaint and civil suit against Nwakanma

      After trial, Imo requested an accounting of the funds provided for his defense,

which Nwakanma refused to provide. Eventually, Imo filed a Grievance Complaint

against Nwakanma with the Kansas State Bar, accusing Nwakanma of

misappropriating his legal defense funds and engaging in a variety of related

misconduct. Imo also filed a civil suit against Nwakanma in Harris County trial

court, asserting claims for breach of contract, conversion, fraud, fraudulent

inducement, and violations of the DTPA.

Imo and Nwakanma enter into the settlement agreement

      During the pendency of the Harris County Suit and the Kansas Disciplinary

Proceeding, Nwakanma contacted Imo’s new lawyer, Tola Oresusi, and adult son,

                                            5
Ikeogu Imo, in an attempt to amicably settle the dispute. After a series of

negotiations, the parties signed a Settlement and Release Agreement.

      The Settlement Agreement begins with three unnumbered paragraphs of

recitals. The first paragraph identifies the parties to the settlement as Imo and

Nwakanma:

      This Settlement and Release Agreement is made by and between Mr.
      Imo Umawa Imo {Imo} and Attorney Prince Uchenchi Nwakanma
      {Attorney}, whom collectively are referred to as Parties.

      The second paragraph describes the agreement’s scope:

      This Agreement covers all claims and disputes, whether or no such
      claims are now pending or have not been asserted between the Parties
      arising from or related to Attorney’s representation of Imo in Case No:
      H-09-426, United States of America v. Umawa O. Imo, which was
      pending in the United States District Court for the Southern District of
      Texas and was resolved by a judgment entered on October 21, 2013.

      The third paragraph specially defines “Imo” and “Attorney.” Specifically, the

paragraph defines “Imo” to include not only Imo himself but also “his heirs,

representatives, agents, and all individuals or entities who had or have standing to

assert a claim on his behalf.” And it expressly states that “Imo” includes Imo’s “son,

Mr. Ikeogu Imo, to whom Imo ha[d] granted a General Power of Attorney” and

Imo’s “present attorney of record, Attorney Tola Oresusi.” The paragraph defines

“Attorney” to include not only Nwakanma but also “his heirs, his law firm, [and]

any other entity owned by Attorney or in which Attorney ha[d] or m[ight] acquire

                                          6
an interest, and which m[ight] potentially be exposed to liability arising from or

related to the subject matter of th[e] Agreement.”

      After the recitals, the Settlement Agreement sets forth twelve numbered

paragraphs. The first five numbered paragraphs consist of four joint stipulations

describing the background of the dispute and a denial of liability by Nwakanma. The

next seven numbered paragraphs set forth the material terms of the settlement.

      Paragraph 6 sets forth the consideration owed by each party and the terms by

which the parties will perform. It consists of seven Subparts.

      Subparts (a) and (b) set forth the consideration. Under Subpart (a), Nwakanma

agrees to pay Imo $425,000 dollars “for the final, full, and complete settlement of

all claims within the scope of this Agreement.” And under Subpart (b), Imo agrees

to (1) “dismiss with prejudice his pending appeal in Texas” and (2) “send a letter to

the Kansas State Bar notifying the Bar that he has resolved all claims with Attorney”

and will “no longer participate in any related proceeding.”

      Subparts (c), (d), and (e) then set forth the terms under which the parties must

provide the consideration:

      c. The sequence of events related to the implementation of this
      Settlement Agreement shall be as follows: Attorney shall purchase two
      bank drafts of $100K each made out in the name of Attorney Tola
      Oresusi and Mr. Ikeogu Imo as Agent in Fact of Imo; and shall also
      issue checks payable to the same persons in amounts of not less than
      $10K for the balance of the $225K. The first check and subsequent
      checks shall be due and payable on the last day of the month following
      the date on which the Kansas Disciplinary Action is terminated, or the
                                          7
      last day of the month after the State Bar of Kansas acknowledges Imo’s
      intent to dismiss the Kansas Proceedings, whichever occurs first in
      time.

      d. Imo and his agents shall prepare for filing a Motion to Abate in the
      Court of Appeals and a signed copy of the Kansas Dismissal Letter.

      e. All of the bank drafts, payment checks, Motion to Abate and
      Dismissal Letter shall be delivered to Mr. James Okorafor. Upon
      confirmation of the filing of the Motion to Abate in the Court of
      Appeals and mailing of the Dismissal Letter to Kansas, the first $100K
      draft shall be delivered to Attorney Tola Oresusi. Upon confirmation or
      receipt of a letter of Termination of the Kansas Proceedings or of Imo’s
      Dismissal Letter of the Kansas Proceedings by the State Bar of Kansas,
      the second $100K draft and all the payment checks shall be delivered
      to Attorney Tola Oresusi, who shall then file a Motion to Dismiss with
      Prejudice in the Court of Appeals, Houston, Texas.

      Subpart (f) then imposes an additional duty on Imo to provide a sworn

statement to Nwakanma, which only arises if the Kansas Bar declines to dismiss the

Grievance Complaint and proceeds with the disciplinary proceeding:

      In the event, the State Bar of Kansas proceeds with the Disciplinary
      Complaint after its receipt and acknowledgment of IMO’s Dismissal
      Letter, IMO and/or his representatives shall give attorney a sworn
      statement attesting to the fact that Attorney does NOT owe IMO any
      money in relating to the complaint and that IMO does NOT expect any
      restitution to be paid to him.

      Finally, Subpart (g) imposes an additional duty on Nwakanma “to help Imo

and his family recover an over payment of $75K in attorney’s fees to Attorney Dick

DeGuerin of Houston, Texas, by providing a sworn statement to Imo confirming the

amount Attorney Dick DeGuerin promised to charge Imo if he himself tried the case

[or] if an associates of his tried the case.”
                                            8
      The remaining six numbered paragraphs consist of standard settlement

provisions. Paragraph 7 is a liquidated damages clause that determines the measure

of damages for untimely payments. Paragraph 8 is an indemnification clause under

which Imo agrees to indemnify Nwakanma from third-party claims. Paragraph 9 is

a standard release. Paragraph 10 consists of a confidentiality clause and a clause

entitling the parties to recover any attorney’s fees and costs incurred to enforce the

agreement. Paragraph 11 is an integration clause. And Paragraph 12 is a choice-of-

law and venue clause.

       The Settlement Agreement is signed by Oresusi, in his capacity as Attorney

for Umawa Imo; Ike Imo, in his capacity as Custodian of General Power of Attorney

for Umawa Imo; and Nwakanma.

The parties partially perform the Settlement Agreement

      After the parties signed the Settlement Agreement, Nwakanma made the

initial scheduled payments, and Imo dismissed the Harris County Suit. See Imo v.

Nwakanma, No. 01-13-00699-CV, 2014 WL 1338325, at *1 (Tex. App.—Houston

[1st Dist.] Apr. 3, 2014, no pet.) (mem. op.) (per curiam). Imo also provided the

required notice to the Kansas State Bar. In a letter dated February 19, 2014, Imo’s

attorney, Oresusi, notified Stanton A. Hazlett, the Disciplinary Administrator

assigned to Imo’s Grievance Complaint, that Imo and Nwakanma had resolved their

dispute and that Imo would not participate in any further proceedings related thereto:

                                          9
      Please kindly be hereby informed that I have satisfactorily resolved all
      matters to or arising from the above referenced complaint against
      Attorney Uchenchi O. Nwakanma and Prince & Associates. At this
      time, there no longer exits any dispute or controversy between us which
      requires your time, attention and resources. The above referenced
      complaint was brought as a result of miscommunication and
      misunderstanding which as earlier stated herein has been completely
      and satisfactorily resolved.

      Therefore, please kindly accept this formal notice that is effective as
      the date of this letter, I have irrevocably withdrawn and terminated the
      above referenced complaint and also requesting that all proceedings
      related to or arising from the said complaint as instituted by the Kansas
      Disciplinary Administration which is now pending, be terminated. I
      shall no longer participate in any proceeding of any type related to this
      moot complaint.

      I would very much appreciate a response to acknowledge the
      withdrawal and termination of my above referenced complaint.

      In a letter dated February 28, 2014, Hazlett responded to Oresusi’s notice,

informing Oresusi that he did not intend to dismiss the Grievance Complaint and

would move forward with the disciplinary proceeding:

      I acknowledge receiving your letter dated February 19, 2014, in which
      you informed me that Mr. Imo no longer wishes to proceed with his
      complaint against Mr. Nwakanma. I also received the letter signed by
      you and Mr. Imo dated February 9, 2014, in which Mr. Imo informed
      me that he wants to withdraw and terminate his complaint against Mr.
      Nwakanma and that he will no longer participate in the prosecution of
      that complaint.

      I refer you to [Kansas] Supreme Court Rule 213 Refusal Of
      Complainant To Proceed. The rule states as follows:

            The unwillingness or neglect of the complainant to sign a
            complaint or prosecute a charge, settlement or
            compromise between the complainant and the attorney, or
                                         10
             restitution by the attorney, shall not necessarily justify
             abatement of any complaint.

      Please advise Mr. Imo that I do not intend to dismiss his complaint. I
      will continue to prosecute this matter, including an investigation
      regarding the circumstances surrounding Mr. Imo’s decision to dismiss
      his complaint against Mr. Nwakanma.

      In a letter dated March 4, 2014, Oresusi reiterated to Hazlett that Imo and

Nwakanma had settled their dispute, that the terms of the settlement were

confidential, and that Imo had withdrawn his Grievance Complaint. In a letter dated

March 12, 2014, Hazlett responded to Oresusi that his position remained unchanged.

      After it became clear that the Kansas State Bar would not dismiss Imo’s

Grievance Complaint, Nwakanma stopped making payments under the Settlement

Agreement. Nwakanma then requested that Imo provide him a sworn statement

under Paragraph 6(f) attesting that Nwakanma did “not owe Imo any money . . .

relating to the complaint” and that Imo did “not expect any restitution to be paid to

him.” Imo refused to provide the statement.

Imo sues Nwakanma for breach of the settlement agreement

      In November 2017, Umawa Imo and Ike Imo filed their original petition

against Nwakanma, asserting a claim for breach of contract and seeking to recover

the unpaid balance under the Settlement Agreement as well as penalties, fees, and

costs. Nwakanma answered, asserting a general denial and failure of conditions

precedent.

                                         11
      The case was tried to the bench. The trial court rejected Nwakanma’s

affirmative defense, found him liable for breach of the Settlement Agreement, and

signed a final judgment awarding Imo $160,000 in actual damages, $738,025 in

liquidated damages, $45,000 in attorney’s fees, $110,995.89 in prejudgment interest,

and post-judgment interest at 10 percent.

      Nwakanma filed a motion for new trial, which the trial court denied. The trial

court then entered written findings of fact and conclusions of law in support of its

judgment.

      Nwakanma appeals.

                             Violation of Public Policy

      In his first issue, Nwakanma argues that the trial court’s judgment should be

reversed because the Settlement Agreement violates public policy and is therefore

unenforceable. See In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 129 (Tex.

2004) (“As a rule, parties have the right to contract as they see fit as long as their

agreement does not violate the law or public policy.” (emphasis added)).

Specifically, Nwakanma contends that the Settlement Agreement violates public

policy by requiring Imo to dismiss his Grievance Complaint and notify the Kansas

State Bar that he will no longer participate in any related proceeding. These

requirements, Nwakanma argues, conflict with the Texas and Kansas Disciplinary

Rules of Professional Conduct, which prohibit a lawyer from “engag[ing] in conduct

                                         12
constituting obstruction of justice[,]” TEX. DISCIPLINARY RULES PROF’L CONDUCT

R. 8.04(a), or “conduct that is prejudicial to the administration of justice[,]” KAN.

DISCIPLINARY RULES PROF’L CONDUCT R. 8.04(d). Imo responds that Nwakanma

has failed to preserve the issue for our review. We agree.

      To preserve an issue for appellate review, “the record must show that . . . the

complaint was made to the trial court by a timely request, objection, or motion that

. . . stated the grounds for the ruling that the complaining party sought from the trial

court with sufficient specificity to make the trial court aware of the complaint, unless

the specific grounds were apparent from the context.” TEX. R. APP. P. 33.1(a)(1)(A).

The complaint must be specific enough to “allow[] the trial judge to make an

informed ruling.” Campbell v. State, 85 S.W.3d 176, 185 (Tex. 2002) (quoting

McDaniel v. Yarbrough, 898 S.W.2d 251, 252 (Tex. 1995)).

      Nwakanma did not assert that the Settlement Agreement violates public policy

in his answer or any other pretrial pleading. At trial, Nwakanma did briefly argue,

in his opening statement, that the evidence would show the Settlement Agreement

“was against public policy.” But he didn’t explain why the Settlement Agreement

violated public policy or how the evidence would make such a showing. The

evidence Nwakanma presented at trial bore no obvious relationship to the issue, and

Nwakanma didn’t bother bringing it up again in his closing argument. In his motion

for new trial, Nwakanma argued that the “subject matter and terms of the agreement

                                          13
violate public policy.” But he again failed to specify why. At no point in the

proceedings below did he ever mention the Texas or Kansas Disciplinary Rules of

Professional Conduct, much less assert that the dismissal and notice requirements of

the Settlement Agreement conflict with these rules’ intended purpose.

      We hold that Nwakanma’s general statements that the Settlement Agreement

violates public policy were insufficiently specific to allow the trial court to make an

informed ruling on whether the Settlement Agreement violates public policy by

conflicting with the Texas and Kansas Disciplinary Rules of Professional Conduct.

See Fenlon v. Harris Cty., 569 S.W.3d 783, 795 (Tex. App.—Houston [1st Dist.]

2018, no pet.) (“Fenlon’s general statements at the hearing before the tax master that

Propel’s evidence did not support its claim and that Propel made errors in calculating

the balance on the Note were not sufficiently specific to preserve any complaint

concerning Propel’s evidence.”). Thus, Nwakanma failed to preserve his complaint

for our review.

      We overrule Nwakanma’s first issue.

                        Sufficiency of Evidence of Breach

      In his second issue, Nwakanma contends there is legally insufficient evidence

that he breached the Settlement Agreement. The trial court found that Nwakanma

initially performed under the Settlement Agreement by making the first $265,000 of

scheduled payments but then breached the Settlement Agreement by failing to pay

                                          14
the remaining $160,000 when it became due and owing. Nwakanma concedes that

he paid the initial $265,000 but failed to pay the remaining $160,000. Nwakanma

argues that his failure to pay the remaining $160,000 does not constitute a breach of

the parties’ agreement because he never had a duty to pay this amount. Nwakanma

argues that the dismissal of Imo’s Grievance Complaint was a condition precedent

to his duty to pay the remaining $160,000. It is undisputed the Grievance Complaint

was never dismissed. Thus, Nwakanma argues, he never had a duty to pay the

remaining amount. To resolve the issue presented, we must construe the Settlement

Agreement to determine whether the dismissal of Imo’s Grievance Complaint is a

condition precedent to Nwakanma’s duty to perform.

A.    Standard of review

      The interpretation of an unambiguous contract is a question of law, which we

review de novo using well-settled contract-construction principles. URI, Inc. v.

Kleberg Cty., 543 S.W.3d 755, 763 (Tex. 2018). In construing a contract, we

ascertain the true intentions of the parties as expressed in the writing itself. Italian

Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex.

2011). In identifying such intent, we examine and consider the entire writing to

harmonize and give effect to all the provisions of the contract so that none are

rendered meaningless. Id.

                                          15
B.    Analysis

      Considering the entire Settlement Agreement to harmonize and give effect to

each of its provisions, we hold that the dismissal of Imo’s Grievance Complaint is

not a condition precedent to Nwakanma’s duty to perform.

      First, the Settlement Agreement never says the dismissal of the Grievance

Complaint is a condition precedent to Nwakanma’s duty to perform.1 The clauses

establishing the terms of performance do not condition Nwakanma’s duty to pay on

the dismissal of the Grievance Complaint. In fact, they require Nwakanma to pay

regardless of the Complaint’s posture, so long as certain other conditions are met.

      Paragraph 6(c) and 6(e) establish when Nwakanma has a duty to perform.

Paragraph 6(c) provides, in relevant part, that “[t]he first check and subsequent

checks shall be due and payable on the last day of the month following the date on

which the Kansas Disciplinary Action is terminated, or the last day of the month

after the State Bar of Kansas acknowledges IMO’s intent to dismiss the Kansas

Proceedings, whichever occurs first in time.” The disjunctive text establishes that

1
      Nwakanma contends that Paragraph 6(f) establishes a condition precedent, which is
      true, as far as it goes, but irrelevant, since it doesn’t establish a condition precedent
      to Nwakanma’s duty to pay; instead, it establishes a condition precedent to Imo’s
      duty to provide Nwakanma a sworn statement: “In the event, the State Bar of Kansas
      proceeds with the Disciplinary Complaint after its receipt and acknowledgment of
      IMO’s Dismissal Letter, IMO and/or his representatives shall give attorney a sworn
      statement attesting to the fact that Attorney does NOT owe IMO any money in
      relating to the complaint and that IMO does NOT expect any restitution to be paid
      to him.”

                                             16
Nwakanma’s duty to perform arises if either of two events occurs. His duty to

perform arises if Imo’s Grievance Complaint is dismissed. And it arises if the Kansas

State Bar acknowledges Imo’s intent to dismiss his complaint. Thus, if the Kansas

State Bar acknowledges Imo’s intent to dismiss his complaint, Nwakanma’s duty to

perform arises, regardless whether Imo’s complaint is actually dismissed.

      Paragraph 6(e) provides, in relevant part, that “[u]pon confirmation or receipt

of a letter of Termination of the Kansas Proceedings or of IMO’s Dismissal Letter

of the Kansas Proceedings by the State Bar of Kansas, the second $100K draft and

ALL the payment checks shall be delivered to Attorney Tola Oresusi.” As before,

the disjunctive text makes clear that Nwakanma’s duty to perform arises if either of

one of two events occurs. His duty to perform arises upon confirmation or receipt of

a letter of termination of Imo’s complaint. And his duty arises upon confirmation or

receipt of Imo’s dismissal letter. Thus, regardless whether Imo’s complaint is

actually dismissed, if it’s confirmed that the Kansas State Bar received Imo’s

dismissal letter, Nwakanma has a duty to perform.

      It is undisputed that the Kansas State Bar received Imo’s dismissal letter and

acknowledged Imo’s intent to dismiss his complaint. Thus, even though the Kansas

State Bar declined Imo’s request to dismiss his complaint, Nwakanma still had a

duty to perform under the Settlement Agreement.

                                         17
      Because the Settlement Agreement contemplates Nwakanma performing

before the dismissal of the Grievance Complaint, the complaint’s dismissal is not a

condition precedent to Nwakanma’s duty to perform.

      We overrule Nwakanma’s second issue.

                         Sufficiency of Evidence of Privity

      In his third issue, Nwakanma argues that the trial court’s judgment should be

reversed in part because there is insufficient evidence that Imo’s wife was a party to

or third-party beneficiary of the Settlement Agreement.

      In his appellant’s brief, Nwakanma does not correctly identify the parties; he

repeatedly states that Ike Imo was convicted of health care fraud and that Umawa

Imo is Ike Imo’s wife. That is incorrect. To be clear, Umawa Imo is the man who

was convicted of healthcare fraud, and Ike Imo is Umawa Imo’s adult son. Umawa

Imo’s wife was not a party below and is not a party now on appeal. The trial court’s

judgment does not award damages to Umawa Imo’s wife or mention her in any of

its findings of fact or conclusions of law.

      To the extent Nwakanma’s argument may be construed as a complaint

regarding the damages awarded to Ike Imo, the argument fails because Ike Imo is a

party to the Settlement Agreement, which expressly defines “Imo” to include not

only Umawa Imo, but also Umawa Imo’s “son, Mr. Ikeogu Imo.”

      We overrule Nwakanma’s third issue.

                                          18
                Enforceability of Liquidated Damages Provision

      In his fourth issue, Nwakanma argues that the trial court erred in awarding

Imo liquidated damages because the settlement agreement’s liquidated damages

provision is a penalty and thus unenforceable. See Atrium Med. Ctr., LP v. Houston

Red C LLC, 595 S.W.3d 188, 192 (Tex. 2020) (“A damages provision that violates

the rule of just compensation, however, and functions as a penalty, is

unenforceable.”). Imo responds that Nwakanma has failed to preserve his complaint

for our review. We agree.

      Nwakanma did not plead penalty as an affirmative defense to an award of

damages under the liquidated damages provision in the settlement agreement. See

Phillips v. Phillips, 820 S.W.2d 785, 789 (Tex. 1991) (penalty is affirmative defense

that must be pleaded or it is waived); TEC Olmos, LLC v. ConocoPhillips Co., 555

S.W.3d 176, 187 (Tex. App.—Houston [1st Dist.] 2018, pet. denied) (“The party

asserting that a liquidated-damages clause is a penalty provision bears the burden of

pleading and proof.”). Nor did he argue or present evidence showing that the

liquidated damages provision is unenforceable at trial. He likewise failed to raise the

issue in his motion for new trial. Because Nwakanma wholly failed to raise the issue

in the proceedings below, we hold that he has failed to preserve the issue for our

review.

      We overrule Nwakanma’s fourth issue.

                                          19
                                  Conclusion

      We affirm.

                                           Gordon Goodman
                                           Justice

Panel consists of Justices Goodman, Landau, and Guerra.

                                      20