Padilla v. LaFrance
| Decision Date | 05 October 1995 |
| Docket Number | No. 94-0579,94-0579 |
| Citation | 907 S.W.2d 454 |
| Parties | 38 Tex. Sup. Ct. J. 663 Enrique PADILLA, Petitioner, v. Ernest J. LaFRANCE, et al., Respondents. |
| Court | Texas Supreme Court |
James B. Lewis, Ronald P. Schramm, Glover Anderson Chandler & Uzick, Houston, for petitioner.
John Stevenson, Jr., Stevenson Albright & Ammons, Dennis R. Mundy, D. Craig Olivier, Jeffrey W. Hitt, Olivier & Steidley, Houston, for respondents.
PHILLIPS, Chief Justice, delivered the opinion of the Court, joined by GONZALEZ, HIGHTOWER, HECHT, CORNYN, SPECTOR, and OWEN, Justices.
The primary issue presented is whether a series of letters between the parties' representatives constituted a written settlement agreement enforceable under Texas Rule of Civil Procedure 11, even though plaintiffs withdrew their consent to the settlement before the letters were filed with the court and before judgment was rendered on the agreement. The court of appeals held that any agreement was unenforceable under Rule 11 because plaintiffs revoked consent before the letters were filed with the court. 875 S.W.2d 730. Because we hold that the letters constituted an enforceable Rule 11 agreement, we reverse the judgment of the court of appeals and remand to the trial court with instructions to enforce the parties' settlement agreement.
One member of the LaFrance family was killed and two others were seriously injured when their vehicle collided with that driven by Enrique Padilla. After the LaFrances sued Padilla, his insurer, State Farm Mutual Automobile Insurance Company, assumed defense of the claims. The parties subsequently engaged in settlement negotiations and, as discussed below, vigorously dispute whether an enforceable settlement agreement was consummated.
On April 10, 1991, Jeffrey Steidley, the LaFrances' attorney, mailed a settlement demand to Brian Chandler, Padilla's attorney, providing in pertinent part as follows:
Dear Mr. Chandler:
You are quite familiar with the facts and circumstances surrounding the above referenced matter. At this time we make demand for policy limits of $40,000.00 for full and final settlement of this case against the insured that you represent. Payment of this sum should be made on or before Tuesday, April 23, 1991 at 5:00 p.m., by delivery of checks in the appropriate amount to the offices of the undersigned made payable in the following amounts and to the following payees:
One check in the amount of $20,000.00 to Madeleine LaFrance As Next Friend of Michelle LaFrance and Olivier & Steidley.
One check in the amount of $20,000.00 made payable to Ernest J. LaFrance, Marlene Luther, Marilyn Koenig, Madeleine LaFrance and Olivier & Steidley, their attorneys of record.
* * * * * *
Please be advised that although I will be more than happy to discuss this case with you or any of your representatives, no oral discussion that we may have will serve to alter the time limits expressed in the correspondence. I look forward to receipt of the checks on or before date specified, failing which this offer to settle will be withdrawn and my clients will proceed to perfect their rights under Texas law, the substance of which I know you are well aware.
Chandler forwarded this letter to Phil Bradshaw, the State Farm adjuster handling the claim, who telephoned Steidley's office on April 15 and spoke with Sherea Carry. 1 Bradshaw informed Carry of an outstanding $1,600 medical lien for treatment to Michelle LaFrance that needed to be cleared up in connection with the settlement. Carry responded that she would have Steidley call Bradshaw to discuss the lien. When Bradshaw did not hear back from Steidley, he called Steidley's office on April 18 and again on the morning of April 23 to discuss the lien. Each time he was able to speak only with Carry, who informed Bradshaw that the lien had not yet been resolved.
When Bradshaw still had not heard from Steidley by the afternoon of April 23, the settlement deadline, he faxed this handwritten letter to Steidley:
Dear Mr. Steidley,
This will confirm our settlement agreement of 4/18/91, whereby State Farm agreed to meet the policy limit demands set out in your letter of 4/10/91. The only thing holding up resolution of this is the hospital lien re: Michelle. I await word from you regarding the lien so I know to whom to make drafts payable.
It is unclear from the record what Bradshaw was referring to by the "agreement of 4/18/91." Steidley responded before 5:00 p.m. the same day, by fax and regular mail, with this letter:
Dear Mr. Bradshaw:
This letter will confirm that the above referenced matter has been settled for all applicable policy limits, which have been represented to us to be $40,000.00. Please forward settlement checks in the above referenced matter. This office will agreed [sic] to take care of the lien filed by Medical Center Hospital out of the settlement funds forwarded by your office.
Your attention to this matter is greatly appreciated.
Bradshaw did not see Steidley's response until he arrived at his office the next morning, April 24. Approximately one week later, Chandler tendered two settlement checks for $20,000 each to Steidley, along with a formal settlement agreement. Steidley, however, refused to accept the checks or sign the agreement, contending that Padilla had not timely accepted the April 10 settlement offer. 2
Padilla subsequently filed Steidley's April 23 letter with the court, describing it as "an acceptance of a settlement." Padilla then filed a counterclaim in the pending suit, seeking enforcement of the alleged settlement agreement, and both sides moved for summary judgment on the counterclaim. Padilla argued that the letters between the parties' representatives constituted a written settlement agreement. Although acknowledging that the court could not render a consent judgment incorporating the terms of the settlement, as the LaFrances had revoked consent, he nonetheless contended that the court could enforce the settlement by summary judgment. The LaFrances countered that the parties did not have an enforceable agreement under Texas Rule of Civil Procedure 11, which requires agreements regarding pending suits to "be in writing, signed and filed with the papers as part of the record...." The LaFrances further argued that, even if an otherwise valid Rule 11 agreement existed, it could not be enforced since the LaFrances had revoked consent prior to any judgment being rendered on the agreement. The LaFrances also moved to sever the counterclaim.
After a hearing on May 1, 1992, the court orally ruled that an enforceable settlement agreement did not exist, granting the LaFrances' motion for summary judgment and denying Padilla's. The court also granted the motion for severance, noting on the docket that a final judgment would be granted to the LaFrances on the counterclaim. The court, however, did not sign a written judgment or order of severance at that time.
On June 11, 1992, Padilla filed a "Motion for Reconsideration on his Motion for Summary Judgment," raising the same arguments contained in his original motion for summary judgment and adding one additional argument. 3 Although this motion was apparently set for oral hearing on June 22, 4 there is no indication in the record or the briefs that any hearing occurred. On June 19, Padilla filed another motion, styled simply as a "Motion for Summary Judgment," setting forth essentially the same arguments contained in the motion for reconsideration. No oral hearing was held on this subsequent motion for summary judgment, and neither it nor the motion for reconsideration was submitted for a ruling on Harris County's submission docket. See Local Rule 3.3.2 of the Harris County District Courts. On October 19, 1992, the court signed an order granting the LaFrances' motion for summary judgment and denying Padilla's. This order referred only to the cross motions for summary judgment argued on May 1, mentioning neither Padilla's motion for reconsideration nor his later successive motion for summary judgment. 5 On November 20, 1992, the court signed an order severing Padilla's counterclaim and assigning it a new cause number, thus finalizing the earlier summary judgment.
Padilla appealed from this severed cause. The LaFrances moved the court of appeals to dismiss the appeal, contending that the transcript, which Padilla filed 82 days after the judgment became final on November 20, 1992, was untimely. Under Texas Rule of Appellate Procedure 54(a), the transcript must be filed within sixty days after judgment, or within 120 days if a timely motion for new trial or motion to modify the judgment has been filed. The court of appeals originally dismissed the appeal, but reinstated it on rehearing. The court concluded that Padilla's motion for rehearing of the trial court's oral summary judgment ruling was the equivalent of a motion for new trial, extending the appellate deadlines under Rule 54(a). 875 S.W.2d at 732.
As to the merits, the court of appeals concluded that the parties did not have an enforceable settlement agreement under Texas Rule of Civil Procedure 11. The court held that, under Rule 11, consent to the settlement agreement must exist at the time it is filed with the court. 875 S.W.2d at 734. Although not expressly deciding whether Steidley's April 23 letter constituted a signed writing sufficient under Rule 11, the court noted that the LaFrances had revoked any consent prior to that letter being filed with the court. Id. The court accordingly affirmed the trial court's summary judgment in favor of the LaFrances.
We initially address the LaFrances' jurisdictional argument. They contend by cross-point that the court of appeals should have dismissed the appeal because Padilla failed to timely file the transcript. 6 We disagree.
An appellant must file the transcript in the court of appeals "within sixty days after the judgment is...
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