West Beach Marina, Ltd. v. Erdeljac

• Decision Date: 05 December 2002
• Docket Number: No. 03-01-00475-CV.,03-01-00475-CV.
• Citation: 94 S.W.3d 248
• Parties: WEST BEACH MARINA, LTD., a Texas Limited Partnership, n/k/a West Beach Limited Partnership, Appellant, v. James M. ERDELJAC; Darci Erdeljac; Dr. James R. Yates; Dr. Alba A. Ortiz; Thomas Rosenthal; and Susan Hemmingway Rosenthal, Appellees.
• Court: Texas Court of Appeals

94 S.W.3d 248

WEST BEACH MARINA, LTD., a Texas Limited Partnership, n/k/a West Beach Limited Partnership, Appellant, v. James M. ERDELJAC; Darci Erdeljac; Dr. James R. Yates; Dr. Alba A. Ortiz; Thomas Rosenthal; and Susan Hemmingway Rosenthal, Appellees.

No. 03-01-00475-CV.

Court of Appeals of Texas, Austin.

December 5, 2002.

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Elizabeth G. Bloch, Rachel L. Noffke, Hilgers & Watkins P.C., Molly J. Mitchell, Austin, for appellant.

Timothy J. Herman, Herman, Howry & Breen, L.L.P., David C. Duggins, Duffy Doyle Keever, Clark Thomas & Winters, Austin, for appellees.

Before Chief Justice ABOUSSIE, Justices YEAKEL and PURYEAR.

LEE YEAKEL, Justice.

This is an appeal from a final judgment enforcing a mediated settlement agreement and determining the scope of an easement over land under and abutting Lake Travis. Appellees James M. Erdeljac, Darci Erdeljac, Dr. James R. Yates, Dr. Alba A. Ortiz, Thomas Rosenthal, and Susan Hemmingway Rosenthal¹ filed suit against appellant West Beach Marina, Ltd., now known as West Beach Limited Partnership ("West Beach"), seeking a declaration regarding the scope of an express easement across West Beach's adjacent property, upon which West Beach planned to build a marina. After a lengthy mediation, the parties' attorneys signed an agreement.

When West Beach repudiated the agreement, the Erdeljacs amended their pleadings to allege West Beach's breach. At trial, a jury determined that (1) the parties intended to be bound by the agreement and (2) West Beach had failed to comply with the agreement. The district court then held a bench trial to determine the extent of the Erdeljacs' easement and attorney's fees. The district court enforced the parties' mediated agreement and defined the easement, finding that the easement did not permit the Erdeljacs to park and engage in recreation on West Beach's land above the Lake Travis waterline, and awarded the Erdeljacs attorney's fees, interest, and costs. West Beach appeals the district-court judgment by ten issues, claiming that: the agreement and easement were unenforceable as a matter of law; the evidence was legally and factually insufficient to support the jury's verdict; and the awards of attorney's fees, interest, and costs were erroneous. We will affirm the district-court judgment.

FACTUAL AND PROCEDURAL BACKGROUND

West Beach owns property that is partially on the shore of and partially inundated by Lake Travis. The property adjoins the Erdeljacs' property. West Beach applied for and was granted a permit by the Lower Colorado River Authority ("LCRA") to build a marina on the water covering its property. The Erdeljacs protested the application on the basis that it would interfere with their express easement across the West Beach property, which, they asserted, granted them ingress and egress to the lake and permission to install waterlines and docks. After the LCRA denied the protest, the Erdeljacs filed suit in district court seeking a declaration that the proposed marina would unreasonably interfere with their easement.

The parties entered a long and embattled pretrial process, which included several settlement conferences and two mediations. The mediation relevant to this appeal occurred on June 29, 2000. The parties negotiated from about 9:30 a.m. until sometime in the early evening. The West Beach party representatives left the mediation just before 7:00 p.m., although at least one of them was available by telephone and fax machine. The parties' attorneys remained and drafted a written agreement (the "Agreement"), which the mediator and attorneys signed. West Beach later repudiated the Agreement. The Erdeljacs then amended their petition, seeking a declaration that the Agreement was an enforceable contract or Rule 11 agreement, see TEX.R. CIV. P. 11, which West Beach had breached. The Erdeljacs sought specific performance of the Agreement and damages resulting from West Beach's breach. West Beach counterclaimed, seeking a declaration that the Erdeljacs' easement did not permit parking or recreation on West Beach's dry land. Both parties sought attorney's fees.

The district court, on West Beach's motion, ordered separate trials, dividing the issues surrounding the Agreement from the others. A jury found that West Beach intended to be bound by the Agreement and had breached it. The parties tried the remaining issues to the bench. The district court's final judgment enforced the easement and the Agreement, but found that the easement did not permit the Erdeljacs to linger or park on West Beach's property, and awarded prejudgment interest, attorney's fees, and court costs to the Erdeljacs.

West Beach appeals, asserting that: (1) the Agreement is not enforceable as a matter of law; (2) there was no or insufficient evidence to support the jury finding of a binding agreement; (3) the district court could not enforce an easement over navigable waters; (4) the easement and Agreement violate the Statute of Frauds² and the Statute of Conveyances;³ and (5) the Erdeljacs are not entitled to prejudgment interest, attorney's fees, and costs.

DISCUSSION

I. Enforceability of the Agreement

By its first three issues, West Beach argues that the Agreement was not enforceable as a matter of law. West Beach argues that the district court erred in declaring that the Agreement was an enforceable Rule 11 agreement. Alternatively, West Beach argues that Rule 11 is not applicable because it is superseded by section 154.017 of the alternative-dispute-resolution-procedures act. See TEX. CIV. PRAC. & Rem.Code Ann. § 154.071(a) (West 1997). We review questions of law de novo. In re Humphreys, 880 S.W.2d 402, 404 (Tex.1994); Republic Western Ins. Co. v. State, 985 S.W.2d 698, 701 (Tex.App.-Austin 1999, pet. dism'd w.o.j.).

A. Rule 11

Rule 11 provides in its entirety 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.

TEX.R. CIV. P. 11 (emphasis added). The rule provides threshold requirements that apply to all settlement agreements. Padilla v. LaFrance, 907 S.W.2d 454, 460 (Tex.1995) (citing Kennedy v. Hyde, 682 S.W.2d 525, 528 (Tex.1984) ("Rule 11 is a minimum requirement for enforcement of all agreements concerning pending suits, including, but not limited to, agreed judgments.")); Roeglin v. Daves, 83 S.W.3d 326, 330 (Tex.App.-Austin 2002, pet. denied). Thus, "compliance with Rule 11 is a general prerequisite for any judgment enforcing an agreement touching a pending suit." Kennedy, 682 S.W.2d at 529. It is undisputed that the Agreement here was written and signed by counsel. See Ebner v. First State Bank, 27 S.W.3d 287, 297 (Tex.App.-Austin 2000, pet. denied) (indicating Rule 11 agreement may be signed by party or party's attorney). It was filed with the court as an attachment to an amended pleading, satisfying Rule 11's filing requirement. See Padilla, 907 S.W.2d at 461 (holding that Rule 11 filing requirement is satisfied so long as agreement is filed before party seeks to enforce it); Southwestern Bell Tel. Co. v. Perez, 904 S.W.2d 817, 822 (Tex.App.-San Antonio 1995, no writ) (holding that attaching agreement to pleadings meets Rule 11's filing requirement). The Agreement thus satisfies all elements of Rule 11.

West Beach argues, however, that the Agreement could not be an enforceable Rule 11 agreement because "West Beach withdrew consent to the agreement prior to entry of judgment." West Beach confuses the requirements of an agreed judgment with a Rule 11 agreement. See Padilla, 907 S.W.2d at 461 ("Although a court cannot render a valid agreed judgment absent consent at the time it is rendered, this does not preclude the court, after proper notice and hearing, from enforcing a settlement agreement complying with Rule 11 even though one side no longer consents to the settlement."); CherCo Prop., Inc. v. Law, Snakard & Gambill, P.C., 985 S.W.2d 262, 265 (Tex.App.-Fort Worth 1999, no pet.). West Beach's argument is thus without merit.

B. Alternative Dispute Resolution Procedures Act

West Beach next argues that the alternative-dispute-resolution-procedures act, not Rule 11, controls the Agreement. See TEX. CIV. PRAC. & Rem.Code Ann. §§ 154.001-.073 (West 1997 & Supp.2003). West Beach asserts that the act requires the party's signature as the exclusive means for creating an enforceable mediation agreement, whereas Rule 11 permits the attorney's signature to create an enforceable agreement. Compare id. § 154.071(a) ("If the parties ... execute a written agreement ....") (emphasis added), with TEX.R. CIV. P. 11 (agreement to be "in writing, signed, and filed") (emphasis added); see also Ebner, 27 S.W.3d at 297. West Beach urges that, because the Agreement was signed by its attorney, but not by a West Beach general partner, the Agreement is not enforceable under the act.

Rule 11, although applicable to all settlement agreements, is not exclusive, and other law may provide additional requirements before an agreement is enforceable. See Kennedy, 682 S.W.2d at 529; CherCo Prop., 985 S.W.2d at 265-66. The act provides: "If the parties reach a settlement and execute a written agreement disposing of the dispute, the agreement is enforceable in the same manner as any other written contract." TEX. CIV. PRAC. & Rem.Code Ann. § 154.071(a) (West 1997) (emphasis added); In re Marriage of Ames, 860 S.W.2d 590, 592 (Tex. App.-Amarillo 1993, no writ) ("In order to effect the purposes of mediation and other alternative dispute resolution mechanisms, settlement agreements must be treated with the same dignity and respect accorded other contracts reached after arm's length negotiations."). Courts employ the same procedures used to enforce...