Marx v. FDP, LP

• Decision Date: 19 August 2015
• Docket Number: No. 04–14–00641–CV,04–14–00641–CV
• Citation: 474 S.W.3d 368
• Parties: Robert Marx and Debbie Marx, Appellants v. FDP, LP, Appellee
• Court: Texas Court of Appeals

474 S.W.3d 368

Robert Marx and Debbie Marx, Appellants

v.FDP, LP, Appellee

No. 04–14–00641–CV

Court of Appeals of Texas, San Antonio.

Delivered and Filed: August 19, 2015

Kirk Dockery, Scott R. Donaho, Floresville, TX, for Appellant.

Vincent Lee Marable III, Wharton, TX, Gilbert Timbrell Adams III, Beaumont, TX, for Appellee.

Sitting: Marialyn Barnard, Justice, Patricia O. Alvarez, Justice, Jason Pulliam, Justice

OPINION

Opinion by: Patricia O. Alvarez, Justice

This case arises from a contractual dispute stemming from a Farm and Ranch Contract between Appellants Robert Marx and Debbie Marx, as sellers, and Appellee FDP, LP, as buyer. The Farm and Ranch Contract was modified by an August 27, 2013 Mediated Settlement Agreement and clarified on May 12, 2014, by an arbitration award. In their appeal, the Marxes allege the trial court erred in (1) granting FDP's motion for summary judgment on specific performance based on an unenforceable MSA previously rescinded by the Marxes, (2) entering a judgment that awarded FDP a future option to purchase the remainder of the Marxes' Homestead Property when no independent consideration was given for that option, and (3) granting FDP's motion for summary judgment when that motion did not address the Marxes' affirmative defenses. We affirm the trial court's judgment.

FACTUAL AND PROCEDURAL BACKGROUND

A. Farm and Ranch Contract

On January 27, 2012, the Marxes and FDP entered into a Farm and Ranch Contract, pertaining to real property in Wilson County, Texas, described as "approximately 500 acres to be surveyed out of a tract of land containing 521.79 acres further described in exhibit ‘A.’ " Exhibit A contained field notes for a 326.047–acre tract and a 186.152–acre tract. The Marxes agreed to supply FDP with a new survey.

The sale price of $1,875,000.00 ($3,750.00 per acre) was to be paid pursuant to a Seller Financing Addendum to the Farm and Ranch Contract. The Addendum provided for payment in the form of $300,000.00 in cash and a seller-financed note in the amount of $1,575,000.00, with an annual interest rate of 4.5% payable in 180 monthly installments of $12,048.64. The closing on the contract was to occur on or before March 15, 2012. The Farm and Ranch Contract also included the following "Special Provisions":

Buyer and Seller agree to the following details to be worked out before closing: 1. Seller will survey out approximately 21 acres which will not [be] convey[ed] with this sale. 2. Seller will sign a first right of refusal and option agreement for the 21 acres which will allow buyer to purchase the property in the future. 3. Seller will retain an easement for access to the 21 acres. 4. Seller agrees to fence the 21 acres within 120 days after closing.

The Marxes subsequently refused to close on the contract and sell the property to FDP.

B. Mediated Settlement Agreement

On March 12, 2012, FDP sued the Marxes¹ for specific performance and damages. With both sides represented by counsel, the parties mediated on May 22, 2013, and August 27, 2013, and entered into an MSA² which contained the following terms:

• FDP agreed to purchase approximately 421 acres from the Marxes for $5,000.00 per acre—"Closing per existing EMK—October 1, 2013";³

• the Marxes agreed to retain the Homestead Property for no longer than eight years after closing;

• the parties were to mutually agree on the Homestead Property, not to exceed one hundred acres;

• if the parties could not agree on what constituted the Homestead, the issue would be submitted to arbitration;

• FDP maintained exclusive option to purchase the Homestead Property; and

• all claims and causes of action between the parties, except for the undertakings in the MSA, were mutually released.

The parties further represented and warranted that:

(v) this Settlement Agreement constitutes the entire agreement and understanding between the parties; (vi) [the parties] have entered into this Settlement Agreement of their own free will; and (vii) all prior and contemporaneous agreements, understandings, representations and statements, whether written or oral, are merged herein.

The MSA was filed with the district court on September 3, 2013, as a Rule 11 agreement.

C. Motion to Enforce and Subsequent Pleadings

On September 16, 2013, FDP filed a motion to enforce the MSA, and the Marxes filed objections to the MSA. Two weeks later, FDP filed its Second Amended Original Petition specifically pleading that the MSA had been executed and seeking its enforcement under a breach of contract claim. FDP alleged it was "ready, able and willing to close the Contracts," and it "secured a commitment for financing, but the interest rate would be guaranteed for so many days, and then could be adjusted higher." FDP prayed, among other things, for specific performance.

The Marxes filed a supplemental answer raising several affirmative defenses to the MSA including (1) ambiguity, (2) failure of conditions precedent, (3) fraud, (4) the Marxes' impossibility of performance, (5) lack of mutuality, (6) mutual mistake, and (7) lack of consideration. The Marxes' pleading contended the MSA left "essential elements of the contract for future negotiation and agreement." These "uncertain" terms included:

the size, location and boundaries of the land to be sold; the identity of the buyer, the manner in which the sale price is to be paid; the portion of the sale price which is to be paid in cash; and the portion of the sales price which is to be owner financed.

Without defining these elements, the Marxes argued their performance under the MSA was impossible and the MSA was not susceptible to specific performance. The Marxes therefore "rescinded their consent to the mediates [sic] settlement agreement and hereby inform the Court that the agreement fails to meet the requirements of a binding and enforceable agreement."

D. Second Mediation and Arbitration

On October 23, 2013, during a hearing on FDP's motion to enforce, the trial court ordered the parties back to mediation.

Three weeks later, during the mediation on November 14, 2013, the mediator advised the trial court that mediation was unsuccessful, and only one party wished to pursue arbitration pursuant to the MSA. That same day, the trial court ordered the parties to arbitrate the issue of designation of the 100–acre Homestead Property. Neither party lodged a written objection.

Pursuant to the MSA, the arbitrator ordered both parties to submit a survey of the 421–acre tract and the 100–acre Homestead Property tract. The arbitrator's April 14, 2014 ruling included a map and metes and bounds descriptions of the 100–acre and 417.335–acre tracts. The arbitrator further ordered costs of the arbitration charged against the Marxes.

E. Entry of Final Judgment

On May 12, 2014, the trial court confirmed the arbitration award and awarded arbitrator's fees, surveyor's fees, attorney's fees, and expenses to FDP.

On July 9, 2014, FDP moved for final summary judgment for specific performance based on the Farm and Ranch Contract, the MSA, and the order confirming the arbitration award. On August 4, 2014, the Marxes filed their response, asserting the following arguments in opposition to FDP's request for specific performance:

• the MSA contained a patent ambiguity in that its sale price did not conform to the financing figures shown in the Seller Financing Addendum to the Farm and Ranch Contract,

• the Homestead Property option agreement was invalid because of lack of consideration,

• FDP lacked standing to prosecute the suit, and

• FDP failed to act through its general partner.

On August 11, 2014, the trial court signed a Final Judgment in favor of FDP, awarding specific performance obligating FDP to pay the Marxes a purchase price of $2,086,675.00, consisting of $300,000.00 in cash and a promissory note at 4.5% interest for $1,786,675.00 payable in 180 monthly installments of $13,667.94, and FDP was awarded attorney's fees.

On appeal, the Marxes contend the trial court erred in granting judgment for FDP because the Marxes withdrew their consent to the MSA, facts precluded enforcement of the MSA, and FDP's motion for summary judgment failed to address the Marxes' affirmative defenses. The Marxes also argue the future option to purchase the Homestead Property was unenforceable because it was unsupported by consideration.

We first address the issues pertaining to the motion for summary judgment.

MOTION FOR SUMMARY JUDGMENT

The Marxes complain the trial court erred in granting FDP's traditional motion for summary judgment on specific performance because (1) the motion was based on an unenforceable agreement that was previously rescinded, and (2) FDP failed to address the Marxes' affirmative defenses in the motion.

A. Standard of Review

To prevail on a traditional motion for summary judgment, the movant must show "there is no genuine issue as to any material fact and the [movant] is entitled to judgment as a matter of law." TEX. R. CIV. P. 166a(c) ; accord Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548 (Tex.1985). In our review of the trial court's judgment, we examine "the evidence presented in the motion and response in the light most favorable to the party against whom the summary judgment was rendered, crediting evidence favorable to that party if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not." Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex.2009) ; see City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex.2005). "We indulge every reasonable inference and resolve any doubts in the nonmovant's favor." Rhône–Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex.1999) ; accord Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 756 (Tex.2007) (per curiam). A defendant moving for traditional summary judgment must conclusively disprove at least one essential element of each of the plaintiff's claims. Elliott–Williams Co. v. Diaz, 9 S.W.3d 801, 803 (Tex.1999) ; Doe v. Boys Clubs of Greater Dall . , ...