Ferguson v. DRG/Colony North, Ltd.

• Decision Date: 25 January 1989
• Docket Number: No. 3-88-025-CV,3-88-025-CV
• Citation: 764 S.W.2d 874
• Parties: Geoffrey R. FERGUSON, Trustee, et al., Appellants, v. DRG/COLONY NORTH, LTD., Appellee.
• Court: Texas Court of Appeals

Page 874

764 S.W.2d 874

Geoffrey R. FERGUSON, Trustee, et al., Appellants, v. DRG/COLONY NORTH, LTD., Appellee.

No. 3-88-025-CV.

Court of Appeals of Texas,

Austin.

Jan. 25, 1989.

Rehearing Denied Feb. 22, 1989.

Timothy B. Poteet, Lea & Chamberlain, Austin, for appellants.

Wallace Smith, Shapiro, Edens & Cook, Austin, for appellee.

SHANNON, C.J., and CARROLL and JONES, JJ.

JONES, Justice.

This appeal arose out of the 1984 sale of the 100-unit Colony North Apartments, located in Austin, from appellant John E. Grooms to appellee, DRG/Colony North, Ltd. An addendum to the contract of sale obligated Grooms to make certain roof repairs to the complex either before or after the closing. When Grooms failed to make the repairs to appellee's satisfaction, appellee began its own efforts at repairs, which Grooms initially paid for. When those efforts also failed to cure the problem, appellee had all the roofs of the apartment complex replaced and, pursuant to a provision in the contract of sale, proceeded to offset that expense against its note payments to the trust Grooms had established to receive such payments. Contending that he was not obligated to pay for a complete re-roofing of the complex, Grooms declared the note in default and posted the property for foreclosure. Appellee then instituted this suit to recover damages for breach of contract or alternatively to rescind the purchase. In addition to Grooms, the suit named as defendants Geoffrey R. Ferguson, Trustee; the Grooms Exchange Trust; and Russell G. Ferguson, Trustee. The trial court enjoined the scheduled foreclosure, and the case was later tried on the merits to a jury. After a verdict favorable to appellee on all issues, the trial court ordered the contract rescinded, together with an alternative award of damages, which was to take effect only if the rescission award was later reversed on appeal. This appeal followed.

JURISDICTION

In the last of their thirty-seven points of error, appellants assert that the trial court erroneously entered a conditional judgment that was not final and did not require an election of remedies. Although appellants ask for a reversal rather than dismissal of the appeal, the point does bring to our attention a jurisdictional issue: with certain exceptions not applicable here, appellate courts can review only final and definite judgments. Hinde v. Hinde, 701 S.W.2d 637 (Tex.1985). Accordingly, we will review point of error thirty-seven first.

In its trial petition, appellee alternatively sought rescission of the purchase agreement or damages for its breach. In the judgment, the trial court ordered rescission, allowing as part of that relief a recovery of all sums expended by appellee in connection with the transaction, together with exemplary damages and attorney's fees. Following this award, the judgment contains the following:

It is further ordered, adjudged and decreed that in the event an appellate court of final review reverses the judgment of rescission set forth above, then plaintiff DRG/Colony North, Ltd. shall have the following judgment of damages: ....

The judgment then proceeded to order a complete damages award for breach of the contract of sale, including exemplary damages and attorney's fees, to take effect only in the event the award of rescission was later reversed by an appellate court.

A final judgment is one that disposes of all parties and issues in the case. Koepke v. Koepke, 732 S.W.2d 299 (Tex.1987). A judgment cannot condition recovery on uncertain events or base its validity on "what the parties might or might not do post-judgment." Hinde, 701 S.W.2d at 639. A judgment must be definite and certain. International Security Life Insurance Co. v. Spray, 468 S.W.2d 347 (Tex.1971). A judgment generally should not be conditional, alternative, or contingent. Hill v. Hill, 404 S.W.2d 641 (Tex.Civ.App.1966, no writ).

In more recent years, these general rules have usually been construed and applied narrowly, with the result that finality has often been found where it might not have been in earlier years. It is now established that so long as the judgment definitely settles the rights controverted by the parties, the judgment is final and appealable even though further proceedings will be required to carry the judgment into effect. In Hargrove v. Insurance Inv. Corp., 142 Tex. 111, 176 S.W.2d 744 (1944), the judgment stated that the plaintiff was awarded $15,800 and that defendant was indebted to plaintiff for an additional $15,800, but that plaintiff was not entitled to receive or collect the additional money until final disposition of a separate pending lawsuit. The supreme court held the judgment to be final, stating that although the amount to be adjudged under the second part of the judgment was presently uncertain, such uncertainty exists any time there is a foreclosure of a lien with direction for the collection of the unpaid balance after application of the proceeds of the sale. In Ferguson v. Ferguson, 161 Tex. 184, 338 S.W.2d 945 (1960), the trial court's judgment stated that defendant must furnish to plaintiff an accounting of the profits of a business and pay plaintiff one-half of the net profits. The supreme court held this to be final, stating that the finality of a judgment that settles the rights of the parties is not affected by the fact that further proceedings may be required to carry it into full effect if they are merely incidental to the proper execution of the judgment. In Hinde, the trial court's judgment awarded plaintiff $25,000 for improper cancellation of a life insurance policy, but provided that if defendant caused the policy to be reinstated at his expense he would be credited with $25,000 on the judgment. The supreme court held that this judgment was final because it clearly established plaintiff's right to receive a certain amount of compensation, and it was only the form of compensation that was left uncertain.

The cases most directly on point with respect to the instant case are those dealing with an award of additional attorney's fees in the event of an appeal. That issue was settled in Spray, in which the trial court's judgment awarded plaintiff attorney's fees of $1,750, provided, that if defendant did not appeal, the judgment should be credited with $1,000, and if defendant appealed to the court of appeals but not the supreme court, the judgment should be credited with $500. In affirming the trial court's award, the supreme court stated that it would not be a problem for the court clerk to look at the papers on file to see if application for writ of error had been made, and that the form of the judgment was not controlling as long as certainty was achieved. Spray, 468 S.W.2d at 349-50.

Cases in which appeals were dismissed on the basis of lack of finality have been more obvious ones, such as those in which the actual effectiveness of the judgment itself, or the very right of plaintiff to recover at all, was conditioned on some future, uncertain event. See, e.g., Dodd v. Daniel, 89 S.W.2d 494 (Tex.Civ.App.1935, no writ) (judgment awarded cancellation of a deed, but further recited that the judgment was conditioned on, and to take effect only upon, the payment by defendant into the registry of the court of $70, with no disposition of plaintiff's case if payment was not made); Wrather v. Wrather, 154 S.W.2d 955 (Tex.Civ.App.1941, writ ref'd w.o.m.) (trial court's order conditioned its custody and visitation rulings on the filing by both husband and wife of $5,000 bonds that they would obey the orders of the court and would not remove their child from the jurisdiction of the court, with no provision for the judgment if one or both bonds were not filed); Abell v. Abell, 246 S.W.2d 248 (Tex.Civ.App.1951, no writ) (divorce decree awarded wife $10,000, but conditioned its payment on the execution by her of such documents as may be necessary to show that certain community property was not owned by her alone but by husband and wife jointly, making no provision for what the judgment would be if the documents were not signed); Santos v. Garcia, 624 S.W.2d 919 (Tex.Civ.App.1981, no writ) (trial court's judgment provided that plaintiff recover property from defendant "upon plaintiff presenting a written proof of ownership"). See also McCormick Operating Co. v. Gibson Drilling, 717 S.W.2d 425 (Tex.App.1986, no writ); Tully v. Tully, 595 S.W.2d 887 (Tex.Civ.App.1980, no writ); Fazekas v. University of Houston, 565 S.W.2d 299 (Tex.Civ.App.1978, writ ref'd n.r.e.); Hill v. Hill, 404 S.W.2d 641 (Tex.Civ.App.1966, no writ); Volkmer v. Chase, 354 S.W.2d 611 (Tex.Civ.App.1962, writ ref'd n.r.e.).

The judgment in the present case, on the other hand, is no more indefinite than any judgment that awards additional attorney's fees in the event of an appeal (and, by implication, on the condition of an affirmance). It is not a truly alternative judgment such as "plaintiff is awarded judgment against defendant for A or alternatively for B," with no indication of which relief has been selected. Nor is it in the vein of the cases in which the judgment does not actually become effective until the occurrence of some future, uncertain event, and which does not provide for any relief in case the event does not happen. Here the relief granted is clear and definite, and there is nothing left for the trial court to decide. Nor has appellee failed to make an election; it has, by its own admission, elected rescission. The judgment in the instant case simply does not fit into the mold of appeals that have been dismissed because the trial court's judgment was indefinite, uncertain, or conditional. We hold that the judgment in the instant case was final and appealable.

Determining that the judgment was final and appealable does not, however, end our jurisdictional inquiry. Appellants' point of error also suggests the question of whether the trial court had judicial authority--i.e.,...