Oliver v. The Kroger Co.

• Decision Date: 09 December 1994
• Docket Number: Civ. A. No. 3-93-CV-2209-D.
• Citation: 872 F. Supp. 1545
• Parties: Harriett Wilma OLIVER v. THE KROGER CO.
• Court: U.S. District Court — Northern District of Texas

872 F. Supp. 1545

Harriett Wilma OLIVER v. THE KROGER CO.

Civ. A. No. 3-93-CV-2209-D.

United States District Court, N.D. Texas, Dallas Division.

December 9, 1994.

Mark Frederick Huffman, Menaker & Huffman, Dallas, TX, for plaintiff.

Steven Randolph McCown, Michael Scott McDonald, Littler, Mendelson, Fastiff, Tichy & Mathiason, Dallas, TX, for defendant.

FINDINGS, CONCLUSIONS AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE^*

BOYLE, United States Magistrate Judge.

Pursuant to the District Court's Order of Reference filed October 4, 1994, came on to be heard October 26, 1994, Defendant The Kroger Co.'s Motion to Stay and Motion for Enforcement of Settlement Agreement, ("Kroger's Motion to Enforce"), filed October 3, 1994. For the reasons that follow, the undersigned recommends that the motion be GRANTED.

In its motion, Kroger seeks to enforce a settlement agreement entered into by the parties in this case in July, 1994. The issue before the Court is whether the parties' settlement agreement should be enforced in the face of plaintiff's claims that there was no meeting of the minds as to certain material terms of the agreement, and that a change in her physical condition entitles her to relief from the settlement agreement. As discussed below, Rule 11 of the Texas Rules of Civil Procedure governs this agreement and supports its enforcement.

This is a personal injury action. Plaintiff brings this suit alleging that after 29 years employment for Kroger she has developed severe bronchial and respiratory symptoms due to continuous exposure to chemical fumes produced by defendant's meat wrapping equipment. (Pl's. First Am.Comp.) The case was removed to federal district court on November 10, 1993. (Am. Notice of Removal filed Nov. 10, 1993.)

The events underlying Kroger's Motion to Enforce Settlement began in July, 1994. It is undisputed that in mid-July, 1994, the parties entered into a settlement agreement whereby the defendant agreed to pay plaintiff $25,000 plus court costs, in exchange for a release of all claims and a dismissal of the pending litigation with prejudice. Following their agreement defendant's counsel left a message on the District Court's court-coordinator's answering machine relating to the court that settlement had been reached. The agreement was confirmed in writing by a letter sent to plaintiff's counsel on July 14, 1994. (Def's. Ex. 1).¹ The July 14, 1994, letter was signed by counsel for both sides.

On July 18, 1994, plaintiff's counsel sent defendant's counsel a letter reflecting the taxable court costs expected to be paid as part of the settlement. (Def's. Ex. 2). Defendant's counsel then drafted the settlement check. (Def's. Ex. 3). The remaining settlement documentation was exchanged between counsel and approved by plaintiff's counsel. When the remaining documentation was sent to plaintiff Oliver for signature, problems with the settlement began to arise.

On or about September 2, 1994, defendant was informed by plaintiff's counsel that plaintiff no longer agreed to the settlement. Defendant sent a demand letter to plaintiff on September 7, 1994. In a letter dated September 8, 1994, the District Court was advised of the dispute regarding the settlement and a copy of the July 14, 1994, letter was tendered to the Court with a request that it be filed with the Court as a matter of record. (Kroger's Motion to Enforce, Ex. E). Between September 8, 1994, and September 26, 1994, plaintiff twice changed her mind about the settlement agreement, first deciding to accept the settlement, and later again rejecting the settlement offer. The foregoing facts are undisputed and it is upon these facts that the defendant argues that the settlement should be enforced.

Plaintiff contends, on the other hand, that she did not realize until she saw the final settlement papers that her heirs would be foreclosed from any claims against Kroger. She also contends that her condition has worsened since the time of the settlement and because of this she is entitled to a larger settlement than previously agreed upon.

Whether plaintiff or defendant should prevail in this settlement dispute is governed by Texas law. Questions regarding the enforceability of settlement agreements in diversity cases are governed by state law. Borden v. Banacom Mfg. and Marketing, Inc., 698 F.Supp. 121, 123 (N.D.Tex.1988). And because the settlement at issue was negotiated and to be performed in Texas it is Texas law, specifically Rule 11 of the Texas Rules of Civil Procedure, which governs this analysis. Id. citing Anderegg v. High Standard, Inc., 825 F.2d 77, 80-81 (5th Cir.1987); Condit Chem. & Grain Co. v. Helena Chem. Corp., 789 F.2d 1101, 1102-03 (5th Cir.1986).

Rule 11 of the Texas Rules of Civil Procedure provides in pertinent part:

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.

Rule 11 has been called a minimum requirement for enforcement of all agreements concerning pending suits. Kennedy v. Hyde, 682 S.W.2d 525, 528 (Tex.1984). Texas courts have applied the rule to settlement agreements. Id. at 528 citing Williams v. Hollingsworth, 568 S.W.2d 130, 131 (Tex. 1978); Vickrey v. American Youth Camps, Inc., 532 S.W.2d 292 (Tex.1976). Although contract principles are generally applicable to settlement agreements, Texas courts have held that contract law cannot be applied to enforce an agreement that does not comply with Rule 11. Padilla v. LaFrance, 875 S.W.2d 730, 734 (Tex.App. — Houston 14th Dist. 1994, no writ).

Having determined that Rule 11 applies to this dispute, it must next be decided whether the settlement agreement in question complies with Rule 11. In starting that analysis, it is important to note that although Rule 11 compliance is necessary to enforce a settlement agreement, "slavish adherence to the literal language of the Rule is not required in all cases." Kennedy v. Hyde, 682 S.W.2d 525, 529 (Tex.1984).

Rule 11 offers two alternatives for creating an enforceable agreement, the agreement must either be 1) in writing, signed and filed with the papers as part of the record or; 2) made in open court and entered of record. The agreement in this case, if enforceable at all under Rule 11, falls under the first alternative. There is little question that the second alternative, "made in open court and entered of record", was not complied with by the parties. To the extent defendant is contending that its message on the court-coordinator's answering machine regarding the settlement agreement complies with the "made in open court" alternative, it has offered no support for this position. Moreover, the statutory terms of Rule 11 suggest otherwise, requiring that the agreement be "made in open court and entered of record." See Jones v. American Motorists, Ins. Co., 769 S.W.2d 617 (Tex.App. — Houston 14th Dist. (1989). (Parties announcement of settlement to court in pretrial conference with no corresponding court entry insufficient to meet "open court" requirement of Rule 11)." Having determined that the parties' agreement in this case does not comply with Rule 11's "open court" provision, the Court turns to Rule 11's alternative provision regarding written agreements.

Rule 11's first provision allows enforcement of an agreement, in writing, signed and filed with the papers as part of the record. The July 14, 1994, letter which embodies the general terms of the settlement agreement is a writing signed by both attorneys. This letter is not a finalized settlement agreement and release. However, the letter did set forth the material portions of the parties' agreement which required the defendants to pay plaintiff $25,000 in return for her release of all claims with prejudice. (Def's. Ex. 1). These material provisions were "not subject to further negotiation."²Borden, 698 F.Supp. at 123. Although the July 14, 1994, letter does not constitute the final settlement agreement between the parties, courts interpreting Rule 11's written agreement provision have not imposed such a requirement. Rather, relying upon the purpose behind Rule 11, these courts have found the "substantial equivalent to a written settlement agreement to be sufficient." Borden, 698 F.Supp. at 123, citing Anderegg, 825 F.2d at 81. Because the written agreement in this case contains the material provisions of the settlement agreement between the parties, it constitutes the "substantial equivalent" of a signed written settlement agreement, and for that reason, complies with Rule 11. That finding, however, does not end the inquiry. Rule 11's written agreement provision requires that the writing be filed with the papers as part of the record.

Defendant contends that in a letter dated September 8, 1994, the July 14, 1994, the settlement letter was sent to the court with the request that it be made part of the record in the case. (Kroger's Motion to Enforce, at 2 Ex. E). Defendant's Exhibit E to its Motion to Enforce supports this position, however, there is no indication that the settlement letter was made a part of the record. In its Motion to Enforce, filed October 3, 1994, Kroger did supply a copy of the July 14, 1994, letter agreement. This agreement is now a part of the record. Relying upon Texas courts' holdings that Rule 11 should not be interpreted to require "slavish adherence" to the literal language of the Rule in all cases, the undersigned finds that the October 3, 1994, filing of the July 14, 1994, letter as part of the exhibits for the Motion to Enforce sufficiently complies with Rule 11's "part of the record" requirement. See Jones, 769 S.W.2d at 618, 619 (where the court indicated that a settlement agreement attached as an exhibit to a Motion for Summary Judgment sufficiently complied with "filed with the papers...