Baylor College of Medicine v. Camberg

• Decision Date: 29 January 2008
• Docket Number: No. 14-06-00500-CV.,14-06-00500-CV.
• Citation: 247 S.W.3d 342
• Parties: BAYLOR COLLEGE OF MEDICINE, Appellant, v. Roy A. CAMBERG, Administrator of the Estate of Ana Julia Ortiz, Deceased, and Texas Department of Family & Protective Services as Next Friend of Ana Delia Mejia Ortiz, Enid Valentina Mejia Ortiz, and Rigoberto Mejia Ortiz, Minors, Appellees.
• Court: Texas Court of Appeals

247 S.W.3d 342

BAYLOR COLLEGE OF MEDICINE, Appellant, v. Roy A. CAMBERG, Administrator of the Estate of Ana Julia Ortiz, Deceased, and Texas Department of Family & Protective Services as Next Friend of Ana Delia Mejia Ortiz, Enid Valentina Mejia Ortiz, and Rigoberto Mejia Ortiz, Minors, Appellees.

No. 14-06-00500-CV.

Court of Appeals of Texas, Houston (14th Dist.).

January 29, 2008.

Charles Kelvin Adams, Thomas P. Sartwelle, and Jeff T. Nobles, Houston, TX, for appellants.

Arthur Samuel Feldman, Houston, TX, for appellees.

Panel consists of Justices YATES, FOWLER, and GUZMAN.

OPINION

EVA M. GUZMAN, Justice.

This appeal from the trial court's entry of judgment in a wrongful death case comes to us in an unusual procedural posture. Appellant asks us to construe a Rule 11 settlement agreement entered into by the parties during jury deliberations. Appellees, on the other hand, contend that after the parties disputed the terms of the Rule 11 agreement, the trial court disregarded the agreement and entered judgment on the jury's verdict. The record supports the conclusion that the trial court entered judgment on the jury's verdict rather than the Rule 11 agreement. We therefore affirm the trial court's judgment without the necessity of construing the Rule 11 agreement.

I. FACTUAL AND PROCEDURAL BACKGROUND

Roy A. Camberg, Administrator of the Estate of Ana Julia Ortiz, Deceased, and Texas Department of Family & Protective Services as next friend of Ana Delia Mejia Ortiz, Enid Valentina Mejia Ortiz, and Rigoberto Mejia Ortiz, minors (collectively, "appellees") sued Baylor College of Medicine ("Baylor") for the wrongful death of the minor children's mother, Ana Julia Ortiz. At trial, while the jury was deliberating, Baylor and appellees entered into a Rule 11 "high-low agreement."¹ The record reflects that this agreement was initially proposed by Baylor as follows:

[If there is a damage award, a]nd it's less than $500,000, the Defendants agree to [pay] the named Plaintiffs $500,000.

If the damages awarded by the Jury are between $500,000 and $1.1 million, the Defendant will pay the verdict award by the jury.

If the verdict is in excess of $1.1 million, the Defendants will pay to the named Plaintiffs $1.1 million.

But appellees rejected this offer because they did not want the minimum amount conditioned on a finding of liability. Baylor then modified the agreement, which was memorialized in the record as follows:

Court: Okay, high/low, low is $500,000, high is $1.1 million, period.

Baylor: And if it's in-between, we pay the in-between.

Appellees: And the court costs are $15,000, not to exceed, and the ad litem fees are $10,000, not to exceed.

Court: Okay.

Baylor: Now, can the Court make a docket entry on that?

Court: Well, is that your agreement?

Baylor: Yes, sir.

Court: Is that your agreement?

Appellees: Yes, Your Honor.

Court: You have the agreement.

The jury returned its verdict on March 8, 2006. As relevant to this appeal, the jury found $898,000 in damages. On March 14, appellees filed a motion for entry of judgment that included a proposed judgment, which comported with the jury's verdict but made no reference to the Rule 11 agreement. The motion itself provided:

Plaintiffs hereby move the court to enter judgment in this matter, as set forth in the attached proposed judgment. The judgment is supported by the jury's verdict, and is for an amount within the parties' agreement to settle this case under the high-low agreement announced to the court on March 6, 2006.

In addition to $898,000 in damages, appellees' proposed judgment included prejudgment interest on the jury's damage award.² Appellees set this motion for hearing on March 23, 2006.

The next day, Baylor responded by filing a motion to enforce the Rule 11 agreement and for entry of final judgment. Baylor attached its own proposed judgment, which explicitly referenced the Rule 11 agreement and omitted any interest on the damages found by the jury. This motion was also set for hearing on March 23. At the beginning of the hearing, the trial court noted, "I have had an opportunity to go through everything. What I'm going to do is enter [appellees'] judgment, only I'm changing [the amount of certified court costs]...." The trial court signed the final judgment at the hearing, and Baylor timely filed this appeal.

II. ISSUE PRESENTED

In a single issue, Baylor asserts that, by including prejudgment interest in its judgment, the trial court supplied terms or essential details not included in the parties' Rule 11 settlement agreement and thus violated its "ministerial duty" to record only that which was agreed to by the parties. Appellees respond that the trial court's judgment was not based on the Rule 11 agreement, but instead was rendered on the jury's verdict because the parties disputed the terms of the agreement.³

III. STANDARD OF REVIEW

The 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)). Because the trial court has no discretion in determining what the law is or in applying the law to the facts, the trial court's failure to analyze or apply the law correctly is an abuse of discretion. In re Am. Homestar of Lancaster, Inc., 50 S.W.3d 480, 483 (Tex.2001); Appleton v. Appleton, 76 S.W.3d 78, 86 (Tex.App.-Houston [14th Dist.] 2002, no pet.). Finally, the appellant bears the burden to establish error in the trial court's judgment. Englander Co. v. Kennedy, 428 S.W.2d 806, 807 (Tex.1968) (per curiam); Trevino v. Houston Orthopedic Ctr., 831 S.W.2d 341, 344 (Tex.App.-Houston [14th Dist.] 1992, writ denied).

III. ANALYSIS

A. Preservation of Error

As a preliminary matter, appellees assert that Baylor did not preserve error because it failed to plead or prove any claim for breach of contract or otherwise obtain a ruling supporting its appellate complaint. But Baylor filed a motion to enforce the Rule 11 agreement, which was noticed for hearing on the same date as appellees' motion for entry of judgment. By rendering judgment in accordance with the jury's verdict, the trial court implicitly overruled Baylor's motion. See TEX.R.APP. P. 33.1(a). Thus, Baylor has preserved error on its appellate complaint.

B. The Rule 11 Agreement

Here, the parties do not dispute that they entered into a valid Rule 11 agreement. This Rule provides:

Unless otherwise provided in these rules, no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record.

TEX.R. CIV. P. 11 (emphasis added). As noted above, the parties in this case entered into a "high-low" Rule 11 agreement, which was memorialized in the record in open court.

A judgment rendered on a Rule 11 agreement must be "in strict or literal compliance" with the terms recited into the record and cannot remove or add material terms. See Chisholm v. Chisholm, 209 S.W.3d 96, 98 (Tex.2006) (per curiam) (citing Vickrey v. Am. Youth Camps, Inc., 532 S.W.2d 292, 292 (Tex.1976) (per curiam)). When such a consent judgment is rendered after consent is withdrawn or is not in strict compliance with the terms of the agreement, the judgment must be set aside. Id. (citing Burnaman v. Heaton, 150 Tex. 333, 240 S.W.2d 288, 291-92 (1951)). But notwithstanding an agreement valid under Rule 11, consent to the agreement must also exist at the time an agreed judgment is rendered. See id. at 98; Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995); Quintero v. Jim Walter Homes, Inc., 654 S.W.2d 442, 444 (Tex. 1983).

Generally, 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 Quintero, 654 S.W.2d at 444; Burnaman, 150 Tex. at 338-39, 240 S.W.2d at 291-93; Staley, 188 S.W.3d at 336-37; Sohocki v. Sohocki, 897 S.W.2d 422, 424 (Tex.App.-Corpus Christi 1995, no writ); Farr v. McKinzie, 477 S.W.2d 672, 677-78 (Tex. Civ.App.-Houston [14th Dist.] 1972, writ ref'd n.r.e.). A withdrawal of consent must be effectively communicated to the trial court. See First Heights Bank, FSB v. Marom, 934 S.W.2d 843, 845 (Tex.App.-Houston [14th Dist.] 1996, no writ). "The proper inquiry is whether the information in the trial court's possession is clearly sufficient and of such a nature as to put the court on notice that a party's consent is lacking...." Sohocki, 897 S.W.2d at 424. When parties to a settlement agreement submit conflicting motions for entry of judgment, the trial court is on notice that mutual consent is lacking. Milstead v. Milstead, 633 S.W.2d 347, 348 (Tex.App.-Corpus Christi 1982, no writ). "The only effect of a party's withdrawal of consent to a Rule 11 settlement agreement, practically speaking, is that the judgment sought becomes one enforcing a binding contract rather than the basis of an agreed judgment." Hon. Andrew S. Hanen & Jeffrey M. Benton, The Enforceability of Settlement Agreements, 40 ADVOC. (ST.B.TEX.LITIG. SEC.REP.) 69, 74 (Fall 2007).

C. The Trial Court's Judgment

Baylor contends that consent to the Rule 11 agreement in this case was not withdrawn by either party. Instead, Baylor maintains that the parties asserted competing interpretations of the agreement,⁴ and the trial court erroneously entered judgment in accordance with appellees' asserted interpretation. Appellees argue that the trial court, aware of the parties' disputed interpretations of the settlement agreement, rendered judgment on the jury's verdict because it determined consent to the settlement agreement was...