Valley Ranch Development Co., Ltd. v. F.D.I.C.
| Decision Date | 14 May 1992 |
| Docket Number | Nos. 91-1361,91-1683,s. 91-1361 |
| Citation | 960 F.2d 550 |
| Parties | VALLEY RANCH DEVELOPMENT CO., LTD., et al., Plaintiffs, v. FEDERAL DEPOSIT INSURANCE CORPORATION, et al., Defendants. FEDERAL DEPOSIT INSURANCE CORPORATION, as Manager of the FSLIC Resolution Fund, in Its Capacity as Statutory Successor to FSLIC as Receiver for Sunbelt Savings Association of Texas, Defendant-Appellee, v. Richard JACKSON, Movant-Appellant. VALLEY RANCH DEVELOPMENT CO., LTD., et al., Plaintiffs-Appellants, v. FEDERAL DEPOSIT INSURANCE CORPORATION, as Manager of the FSLIC Resolution Fund, in Its Capacity as Statutory Successor to FSLIC as Receiver for Sunbelt Savings Association of Texas, et al., Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Richard Jackson, pro se.
Paul C. Wolf, Christine Anderson, Angela J. Blair, Atty., FDIC, Dallas, Tex., for FDIC.
Richard Jackson, Tresi Moore Freemyer, Richard Jackson & Associates, Dallas, Tex., for Valley Ranch Development, et al.
John M. Skrhak, Godwin, Carlton & Maxwell, Dallas, Tex., for Jeff. Sav. & Loan.
Thomas W. Craddock, Gibson, Dunn & Crutcher, Dallas, Tex., for Coastal Banc Sav. Ass'n, Cuero Federal Sav. & Loan.
Britton D. Monts, A. Harper Estes, L. Shane Stokes, Lynch, Chappell & Alsup, Dallas, Tex., for Sunbelt Service Corp., T. Wageman, R. Michaels, et al.
D. Ronald Reneker, Bird & Reneker, Dallas, Tex., for Metropolitan Federal Bank, FSB.
Appeals from the United States District Court for the Northern District of Texas.
Before SMITH and EMILIO M. GARZA, Circuit Judges, and KENT, * District Judge.
I.
Valley Ranch Development Co., Ltd. (VRDC), obtained financing for real estate development from a number of banks. The written documents are in the form of loans; VRDC claims that it had oral agreements with the banks that the banks would act as partners rather than lenders. The various lenders eventually went into receivership and fell under the control of the Federal Deposit Insurance Corporation (FDIC). When VRDC did not make its loan payments, its property was foreclosed upon and its debts accelerated. VRDC sued for securities fraud, breach of oral partnership agreements, Racketeer Influenced and Corrupt Organizations Act (RICO) violations common law fraud, and deceptive trade practices (collectively, "the underlying claims").
In 1988, VRDC and the FDIC sent their dispute to mediation. Although they agreed to the settlement suggested by the mediators, the settlement foundered when they could not agree on the settlement documents. The case inched along in district court. In March 1990, the parties once again tried to negotiate their differences. After negotiations, they agreed to accept the settlement proposed in 1988, subject to final approval by the FDIC. The FDIC Board of Directors refused to approve it.
VRDC then asked the district court to enforce the settlement agreement; the district court refused. VRDC asked for jury trial on the settlement agreement; the district court refused. Since settlement had failed, the case was to proceed to trial.
The court ordered the parties to submit a pretrial order. VRDC omitted all of its underlying lender liability claims from the pretrial order and materials. Instead, it asserted claims related to the failed settlement agreement ("the settlement claims"). The defendants moved to dismiss the underlying claims, and the plaintiffs did not oppose the motion, which the district court granted. The defendants then moved to cancel several notices of lis pendens that were encumbering the property. The plaintiffs moved for reconsideration of the dismissal of the underlying claims. The court granted the motion to cancel lis pendens and denied VRDC's motion for reconsideration.
The district court entered a partial final judgment on all these rulings and certified the issues for appeal under Fed.R.Civ.P. 54(b). VRDC appeals the partial final judgment in No. 91-1683.
Richard Jackson, VRDC's attorney, moved to intervene pursuant to Fed.R.Civ.P. 24(a)(2); the district court denied the motion. Jackson moved for reconsideration, and again the district court denied the motion. The court then entered a rule 54(b) partial final judgment denying intervention. Jackson appeals the denial of intervention in No. 91-1361, which has been consolidated with No. 91-1683 for purposes of this appeal.
II.
VRDC contends that the district court erred as a matter of law in refusing to enforce the settlement agreement. We disagree; the court's careful opinion correctly explains why VRDC has not met the requirements for enforcement of a settlement agreement.
The parties essentially agree on the facts. At the beginning of the settlement conference, Gordon Pratt, the FDIC's representative, stated that any settlement was subject to approval by the FDIC. The court correctly found that FDIC approval thus became a condition precedent to a settlement agreement. VRDC claims that Pratt later said he was authorized to make the same settlement offer that the parties had agreed to in 1988. Agency or the scope of authority cannot be proved by statements of the purported agent alone, however. Claus v. Gyorkey, 674 F.2d 427, 434 n. 7 (5th Cir.1982); 3 Tex.Jur.3d, Agency §§ 173, 240.
We apply Texas law to the enforcement of settlement agreements in Texas diversity cases. Anderegg v. High Standard, Inc., 825 F.2d 77, 80 (5th Cir.1987) (per curiam), cert. denied, 484 U.S. 1073, 108 S.Ct. 1046, 98 L.Ed.2d 1009 (1988). Under Texas law, a settlement agreement will not be enforced unless it is written and filed as part of the record. Tex.R.Civ.P. 11 (Vernon Supp.1991) 1; see also Anderegg, 825 F.2d at 80-81. Indeed "the moment the existence of an oral contract between parties ... is contested, rule 11 precludes further examination of the agreement." Coke v. Coke, 802 S.W.2d 270, 277 (Tex.App.--Dallas 1990, writ denied). This settlement never met the Texas standards for an enforceable agreement.
III.
VRDC contends that the district court abused its discretion by refusing a jury trial on settlement issues. A jury trial or evidentiary hearing on settlement issues is appropriate when there are disputed issues of material fact. See, e.g., Massachusetts Cas. Ins. Co. v. Forman, 469 F.2d 259, 260 (5th Cir.1972). Conversely, since there were no disputed issues of material fact and no legal claim under the accepted facts, a jury trial would have been wholly inappropriate.
In order to establish a settlement claim that could go to the jury, VRDC would have to establish that the FDIC representative had the authority to make a settlement offer to VRDC. See Walker v. Carpenter (In re Westec Corp.), 434 F.2d 195, 200 (5th Cir.1970). In order to claim that Pratt had the apparent authority to make a settlement offer, VRDC would have to establish that a reasonable person, using diligence and discretion, would have believed Pratt was so authorized. Id. Although VRDC argues that Pratt's authority is a disputed material fact, Pratt could not have had the authority as a matter of law, even accepting all of VRDC's allegations. See part II, supra.
Moreover, VRDC never amended its complaint to add the settlement claims. The court could not abuse its discretion in denying a jury trial on issues not contained in the complaint. Rule 38, Fed.R.Civ.P., provides that a party shall have a right to a jury trial on issues in the pleadings. VRDC has presented no authority granting a right to a jury trial on an issue not included in the pleadings.
IV.
The district court held that VRDC abandoned its underlying claims by failing to include them in the pretrial order. VRDC argues that the underlying claims were "held in abeyance" until the settlement claims were resolved or "merged with" the settlement claims. Such a status does not exist under the Federal Rules of Civil Procedure.
Flannery v. Carroll, 676 F.2d 126, 129 (5th Cir.1982) (citing cases). The claim is waived even if it appeared in the complaint. See, e.g., Flannery, 676 F.2d at 130; Pacific Indem. Co. v. Broward County, 465 F.2d 99, 103 (5th Cir.1972). The law is plain. Plaintiffs omitted their underlying claims from the pretrial order, and they are waived.
Plaintiffs argue that the court should have permitted amendment of the pretrial order to include the underlying claims. A pretrial order will be modified only to prevent a miscarriage of justice. Fed.R.Civ.P. 16(e). VRDC has not shown injustice; in fact, the following chronology of events demonstrates that plaintiffs omitted the underlying claims either intentionally or with extreme recklessness:
March 30, Settlement conference
1990
June 12, Settlement fails
1990
June 28, Plaintiffs file motion to enforce settlement agreement
1990
July 12, Court order requiring filing of Joint Pretrial Order by October 1
1990 1990. Order states "[t]he Joint Pretrial Order will control all
subsequent proceedings in this case." It also states that if
Plaintiffs fail to "timely file the pretrial material, the case
will be dismissed."
Sept. 18, Court denies motion to enforce
1990
Sept. 24, Plaintiffs send letter to defendants and court 2
1990
Oct. 1, Parties submit Joint Pretrial Order. Summary of plaintiffs' claims
1990 lists only settlement claims and includes no mention of
underlying claims. None of plaintiffs' materials relate to
underlying claims
Dec. 12, Court denies plaintiffs' motion for reconsideration of the refusal
1990 to enforce the settlement and also denies the plaintiffs' motion
for a jury trial on settlement issues.
Feb. 1, Jefferson Savings files motion to dismiss underlying claims under
1991 rule
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