Court Opinion

ID: 2721663
Source: CourtListenerOpinion
Date Created: 2014-08-28 15:11:15.344882+00
Date Added: 2024-06-11T15:43:17.856794
License: Public Domain

Reversed and Remanded and Memorandum Opinion filed August 28, 2014.

                                    In The

                   Fourteenth Court of Appeals

                            NO. 14-13-00564-CV

   REGINALD WARREN, REGINALD ROWE, AND FRED BULPITT,
                       Appellants
                                      V.

 BP PRODUCTS NORTH AMERICA, INC. A/K/A BP TEXAS CITY AND
       BP CORPORATION NORTH AMERICA, INC., Appellees

                  On Appeal from the 122nd District Court
                         Galveston County, Texas
                    Trial Court Cause No. 09-CV-1946

                 MEMORANDUM OPINION
      Appellants, Reginald Warren, Reginald Rowe and Fred Bulpitt (collectively
“Warren”), appeal a final judgment enforcing a settlement agreement and
dismissing claims signed in favor of Appellees, BP Products North America Inc.
a/k/a BP Texas City and BP Corporation North America, Inc. (“BP”). We reverse
and remand.
                                  I. BACKGROUND

      Warren filed suit alleging they were exposed to and sustained injuries
resulting from a release of hydrogen sulfide at BP’s Texas City Plant in October
2007. Joining them in the suit were four other plaintiffs, who are not parties to this
appeal. To resolve the dispute, the parties were ordered to mediation. Prior to the
December 2011 mediation, Warren and BP agreed in principle to a settlement. As
part of the negotiations, BP’s counsel forwarded to Warren’s attorney a letter
agreement which set forth terms of the settlement, including that Warren would
sign a full and final release of any and all claims against BP as of the date of the
settlement.

      Immediately upon receiving the proposed agreement, Warren’s counsel
called counsel for BP explaining he could not sign the agreement as worded
because his clients had other claims against BP which they wanted to preserve.
Those claims arose as a result of an April 2010 benzene release and a release of
dimethyl disulfide sometime in the November-December 2011 timeframe.
Warren’s counsel did not represent Warren (and the other plaintiffs) in the
additional claims.

      BP’s counsel responded he would relay this information to BP, and he did.
Later that same day, it was determined that all claims as of November 30, 2011,
would be released by the settlement agreement. The parties dispute who first
proposed the date—there is, however, no dispute that counsel for Warren advised
BP that his clients would agree to that date only if it would not preclude them from
asserting claims against BP for other releases in addition to and separate from
claims asserted in connection with the October 2007 release which was the subject
of the letter agreement.

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      On the day of the mediation of three other plaintiffs’ claims, counsel for BP
delivered a Rule 11 letter agreement to Warren’s counsel, which counsel signed.
The Rule 11 letter agreement contained the November 30 date. During mediation,
Warren’s counsel learned additional information concerning the dimethyl-disulfide
release.   Counsel for Warren learned it had occurred mid-November through
November 26 or 27; therefore, the November 30 date would need to be moved
back to November 1 in order to preserve Warren’s additional claims which were
not to be covered by the settlement agreement of claims resulting from the October
2007 release. Warren advised BP of this information and the request to change the
date to November 1. The plaintiffs whose cases were being mediated entered into
settlements including a release date of November 1. However, as to Warren, BP
forwarded settlement documents containing the November 30 date.                Warren
refused to sign them.

      BP then filed its motion to enforce the settlement agreements. The motion
states, “Plaintiffs have failed and refused to proceed with the settlement
agreement.” On the same day, BP amended its answer asserting “by way of
affirmative defense” that the parties entered into a settlement agreement and “ . . .
all claims have been compromised, settled and resolved. Should any Plaintiff not
agree, Defendants seek specific performance.”

      BP also filed its notice of submission on its motion to enforce scheduling the
matter for oral hearing on April 30, 2012. Subsequently, the court sent the parties
a notice changing the hearing on BP’s motion to enforce settlement agreements to
May 31, 2012. Warren filed a verified response to the motion, urging the release
exceeds the scope of the Rule 11 letter agreement, the letter is ambiguous, the
release exceeds the scope of counsel’s authority, mutual mistake, and fraud.

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      On May 31, 2012, the trial court held a “hearing” on BP’s motion to enforce
the settlement agreements. In support of its motion, BP offered the December Rule
11 letter agreement and it offered for in camera inspection only the unsigned
settlement agreements. At the conclusion of the hearing, the trial court granted
BP’s motion to enforce the settlement agreements.

      In June 2012, Warren moved for non-suit, which the trial court granted. In
response, BP filed a motion to set aside the order of non-suit, urging the order
granting its motion to enforce was affirmative relief which precluded the non-suit.
The trial court granted BP’s motion to set aside the non-suit. Warren filed a
motion to reconsider the orders granting the motion to enforce and denying the
motion for non-suit. The trial court denied the motion to reconsider both motions.

      In September 2012, BP filed a counterclaim alleging breach of contract. In
March 2013, BP filed a “notice of submission for entry of final judgment.”
Warren objected to the proposed judgment, incorporating their responses to BP’s
motion to enforce and Warren’s motion to reconsider, and lodging other
objections.

      In April 2013, the trial court rendered judgment for BP, enforcing the
settlement agreements as drafted with the November 30 date, disposing of all
claims, and dismissing all remaining issues. The judgment does not refer to BP’s
pleading of specific performance or breach of contract. Instead, the final judgment
states, “The terms and conditions of the Rule 11 settlement agreement between
Plaintiffs Reginald Warren, Reginald Rowe and Fred Bulpitt and the BP
Defendants is incorporated by reference herein as if set out verbatim,” although it
was not an exhibit at the hearing.

      Warren filed a motion for new trial, again asserting, among other
contentions, that there was no agreement to the November 30 date; therefore, no
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consent to the settlement agreements as written. Additionally, Warren challenged
the procedure by which the trial court granted BP’s motion to enforce the
settlement agreements, specifically objecting there was no proper pleading and
proof allowing enforcement of the settlement agreements.            The motion was
overruled by operation of law.

      Adopting BP’s proposed findings and conclusions, the trial court signed
findings of fact and conclusions of law. The findings of fact state, inter alia, “[t]he
BP Defendants’ Motion to Enforce Settlement Agreements included claims for
affirmative relief and requested specific performance of the settlement agreements
between the BP Defendants and these Plaintiffs.” Further, the findings of fact
state, “The BP Defendants’ Motion to Enforce Settlement Agreements constituted
notice to these Plaintiffs of the BP Defendants’ claims for affirmative relief and for
specific performance of the settlement agreements.” However, as noted above,
specific performance was not mentioned in BP’s motion to enforce, was not set for
hearing, and was not mentioned at the “hearing.”

                             II. STANDARD OF REVIEW

      On appeal, Warren asserts: (1) the trial court abused its discretion in
enforcing the settlement agreement after being made aware Warren had withdrawn
consent, where fact issues were raised and in the absence of pleadings and proof;
and (2) the trial court erred in rendering judgment.

      A trial court’s “decision whether a settlement agreement should be enforced
as an agreed judgment or must be the subject of a contract action requiring
additional pleadings and proof is subject to the abuse of discretion standard of
review.” Staley v. Herblin, 188 S.W.3d 334, 336 (Tex. App.—Dallas 2006, pet.
denied) (citing Mantas v. Fifth Court of Appeals, 925 S.W.2d 656, 659 (Tex.
1996).
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      When the trial court files findings of fact and conclusions of law, we give
them the same weight as a jury’s verdict, and review the factual and legal
sufficiency of the evidence supporting them in the same manner we would review
a jury’s findings. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994); Daniel v.
Falcon Interest Realty Corp., 190 S.W.3d 177, 184 (Tex. App.—Houston [1st
Dist.] 2005, no pet.) We review a trial court’s conclusions of law de novo and
uphold them if the judgment can be sustained on any legal theory supported by the
evidence. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex.
2002). In a legal-sufficiency review, we must consider all of the evidence in the
light most favorable to the findings and indulge every reasonable inference which
would support them. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005).
We credit favorable evidence if a reasonable fact finder could and disregard
contrary evidence unless a reasonable fact finder could not. Id. at 827. The
evidence is legally sufficient if it would enable a reasonable and fair-minded
person to reach the verdict under review.

      We review the conclusions of law to determine whether they are correct.
BMC Software, 83 S.W.3d at 794. If a conclusion of law is erroneous, but we
believe the trial court rendered a proper judgment, we are not required to reverse it.
Id.

                                   III. ANALYSIS

      This appeal arises from the trial court’s judgment on a Rule 11 letter
agreement. It is undisputed that counsel for both parties executed a Rule 11 letter
agreement. However, before a judgment is rendered on a settlement agreement, a
party may revoke its consent at any time. Quintero v. Jim Walter Homes, Inc., 654
S.W.2d 442, 444 (Tex. 1983) (holding where one party did not consent to joint
motion to dismiss, final judgment rendered on the motion was improper).

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Withdrawal of consent must be clearly communicated to the trial court. Miller v.
Miller, 721 S.W.2d 842, 843 (Tex. 1986); Baylor College of Med. v. Camberg, 247
S.W.3d 342, 346 (Tex. App.—Houston [14th Dist.] 2008, pet. denied) (citing First
Heights Bank, FSB v. Marom, 934 S.W.2d 843, 845 (Tex. App.—Houston [14th
Dist.] 1996, no writ). “[A] pleading filed prior to rendition of judgment which
alleges a party’s revocation of consent or a motion opposing the entry of judgment
on said grounds is sufficient to effectively withdraw consent to the agreed
judgment.” Sohocki v. Sohocki, 897 S.W.2d 422, 424 (Tex. App.—Corpus Christi,
1995, no writ).

      Thus, we must first address whether Warren withdrew consent. There is no
magic formula to be used in communicating to the trial court a party’s withdrawal
of consent. When a trial court is “in possession of information which is reasonably
calculated to prompt the court to make further inquiry into the party’s consent
thereto, which inquiry, if reasonably pursued, would disclose the want of consent,”
judgment rendered on the agreement must be set aside. Burnaham v. Heaton, 240
S.W.2d 288, 291–92 (Tex. 1951).

      In Burnaham, the parties signed a settlement agreement. The next day the
trial court was informed that plaintiff was “trying to back out on the settlement.”
Id. at 290. Nevertheless, the trial court rendered judgment in accordance with the
terms of the settlement agreement, even though it had knowledge of plaintiff’s
misgivings about it. The Texas Supreme Court held the rendition of judgment was
improper because the “court was in possession of information that plaintiff, if ever
having agreed thereto, did not consider the compromise agreement acceptable at
the time judgment was rendered. . . .” Id. at 292.

      Following this reasoning, a trial court must not enforce an agreement when it
acquires information which brings into question whether one of the parties no

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longer consents to the judgment. Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex.
1995) (announcing that counterclaim and summary judgment on the counterclaim
was proper method to obtain relief); Quintero, 654 S.W.2d at 444; Baylor College
of Medicine, 247 S.W.3d at 346–47, 349 (concluding where parties filed
conflicting motions for entry of judgment, the trial court is on notice there is no
consent; therefore, judgment was proper only because it was entered on the verdict
and not to enforce terms of Rule 11 agreement); Pingel v. Stephens, No. 07-96-
0269-CV, 1997 WL 133520, at *3 (Tex. App.—Amarillo March 25, 1997, no pet.)
(not designated for publication) (holding trial court was notified by party’s attorney
that opposing party refused to execute settlement agreement, information was
sufficient to require trial judge to inquire, which inquiry would have resulted in
trial court’s discovery of withdrawal of consent and, thus, judgment must be
reversed).

      On this record, we conclude that Warren communicated withdrawal of
consent. First, the trial court’s findings of fact note that Warren has refused to sign
the settlement documents. The trial court’s finding is consistent with BP’s motion
to enforce the settlement agreements which disclosed that Warren had refused to
sign them. Second, Warren’s response to the motion communicated verified facts
about the mistaken dates of the release agreed upon in the Rule 11 letter agreement
and the refusal to consent to release claims in accordance with the Rule 11
agreement.

      Warren’s withdrawal of consent does not necessarily end our inquiry,
however. Even after consent is withdrawn, a settlement agreement may still be
enforced upon proper pleading and proof. See Padilla, 907 S.W.2d at 462 (citing
Quintero, 654 S.W.2d at 444; Browning v. Holloway, 620 S.W.2d 611, 615 (Tex.
App.—Dallas 1981, writ ref’d n.r.e.)). We, therefore, treat Warren’s claim as a

                                          8
challenge to the sufficiency of the pleading and proof to support the judgment. See
Bayway Services, Inc. v. Ameri-Build Const. L.C., 106 S.W.3d 156 (Tex. App.—
Houston [1st Dist. 2003, no pet.) (holding where consent was withdrawn and
enforcement pursued, evidence of breach of contract was insufficient to enforce the
settlement agreement).

       With regard to “proper pleading,” the trial court’s findings of fact reveal the
pleading upon which the judgment rests, stating the motion to enforce provided
“[n]otice to these Plaintiffs of the BP Defendants’ claims for affirmative relief and
for specific performance of the settlement agreements” and “included claims for
affirmative relief and requested specific performance of the settlement
agreements.”1 We note our sister court has determined that a “motion to sign
judgment” may constitute a proper pleading upon which a settlement may be
enforced. Id. The parties have not cited and we have not found any cases in which
our court has determined that a motion to enforce is or may be a proper pleading
upon which a court may enforce a settlement. In this case, however, we need not
determine whether BP’s motion to enforce constitutes a proper pleading because
we conclude there is insufficient proof to support the judgment.

       The “proof” upon which BP relied for the enforcement of the settlement
agreements was the Rule 11 letter agreement. The unsigned settlement agreements
produced in camera were not in evidence or offered as an exhibit at the hearing.
Even if we assume the Rule 11 letter agreement was sufficient to support the
existence of an agreement, BP points to no evidence of breach. The record reveals
that no witnesses testified and no other exhibits were admitted.
       1
          We note that although the trial court’s May 2013 findings of fact and conclusions of
law purport to determine Warren breached the settlement agreements, BP did not plead breach of
contract until September 2012, well after the hearing on the motion to enforce occurred. The
record does not reflect any type of court proceeding to determine the merits of BP’s September
2012 breach of contract claim.

                                              9
      The trial court states, “the BP Defendants presented evidence by virtue of an
Agreed Statement of Fact.” The finding lacks support in this record. At the May
hearing, counsel for BP suggested he was arguing an “agreed set of facts.”
However, the parties did not file an agreed statement of facts, and the trial court
neither signed nor certified an agreed statement of facts in compliance with Texas
Rule of Civil Procedure 263. See Tex. R. Civ. P. 263. Therefore, there are no
agreed facts which would obviate the necessity of proof in this case.

      In sum, we conclude there is insufficient evidence to support the trial court’s
judgment enforcing the settlement agreements. To the extent that the trial court
rendered judgment on the parties’ agreement after becoming aware that Warren no
longer consented to the agreement, such decision is error and “the appellate
remedy for a trial court’s entry of an agreed judgment when the court is or should
be aware that the parties no longer consent is to reverse and remand for a new
trial.” See Baylor College of Medicine, 247 S.W.3d at 346. We must, therefore,
reverse and remand for a new trial.

      Therefore, we sustain appellants’ first issue and we need not address
appellants’ second issue. We reverse the judgment and remand the case to the trial
court for further proceedings consistent with this opinion.

                                       /s/    John Donovan
                                              Justice

Panel consists of Justices McCally, Busby, and Donovan.

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