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No. 11-0699

FILED IN THE SUPREME COURT OF TEXAS 11 October 18 A9:47 BLAKE. A. HAWTHORNE CLERK

__________________________________________________________________ IN THE SUPREME COURT OF TEXAS __________________________________________________________________ HUSAIN ABDULWAHAB, Petitioner, v. SAM'S REAL ESTATE BUSINESS TRUST, Respondent. __________________________________________________________________ On Appeal from Cause No. 02-10-00282-CV Second District Court of Appeals Fort Worth, Texas __________________________________________________________________ PETITION FOR REVIEW __________________________________________________________________

David R. Gibson Texas Bar No. 07861220 1801 N. Hampton Rd., Ste. 370 DeSoto, TX 75115 Tel. (972) 291-9300 Fax (972) 291-0636 ATTORNEY FOR PETITIONER

ORAL ARGUMENT REQUESTED

IDENTITY OF PARTIES AND COUNSEL 1. Petitioner: Husain Abdulwahab a. Petitioner's Counsel at Trial and on Appeal:

David R. Gibson Texas Bar No. 07861220 1801 N. Hampton Rd., Ste. 370 DeSoto, TX 75115 Tel. (972) 291-9300 Fax (972) 291-0636 b. Petitioner's Counsel on Appeal:

Rhonda Bartlett Texas Bar No. 24042775 3100 Main St. #43 Dallas, TX 75226 Tel. (214) 469-9713 Fax (214) 782-9654 2. Respondent: Sam's Real Estate Business Trust Respondent's Counsel at Trial and on Appeal: James D. Payne Texas Bar No. 15656200 Guida, Slavich & Flores 750 N. St. Paul St., Ste. 200 Dallas, TX 75201 Tel. (214) 692-0009 Fax (214) 692-6610

ii

TABLE OF CONTENTS IDENTITY OF PARTIES AND COUNSEL ................................. TABLE OF CONTENTS ....................................................... INDEX OFAUTHORITIES..................................................... I. STATEMENT OF THE CASE............................................. II. STATEMENT OF JURISDICTION....................................... III. ISSUES PRESENTED ...................................................... IV. STATEMENT OF THE FACTS........................................... V. SUMMARY OF THE ARGUMENT..................................... VI. ARGUMENTS ............................................................... VII. CONCLUSION AND PRAYER ......................................... APPENDIX ii iii iv 2 3 3 4 7 8 12

iii

INDEX OF AUTHORITIES Angus Chem. Co. v. IMC Fertilizer, Inc., 838 S.W.2d 138 (Tex. 1997) ..... Browning v. Holloway, 620 S.W.2d 611 (Tex. Civ. App.­Dallas), writ ref'd, n.r.e. per curiam, 626 S.W.2d 485 (Tex.1981) ........................... Burnaman v. Heaton, 240 S.W.2d 288 (Tex. 1951) ............................ Ford Motor Co. v. Castillo, 279 S.W.3d 656 (Tex. 2009) ..................... 9 10

8, 10 3, 10, 11 12

Jimenez v. Transwestern Prop. Co., 999 S.W.2d 125 (Tex. App.­Houston [14th Dist.] 1999, no pet.) .......................................................... Knutson v. Morton Foods, Inc., 603 S.W.2d 805 (Tex. 1980) ................ Lloyd v. Ray, 606 S.W.2d Tex. App.­San Antonio 1980, writ ref'd n.r.e.) .. Mantas v. Fifth Ct. of Appeals, 925 S.W.2d 656 (Tex. 1996) ................. McMillen v. Klingensmith, 467 S.W.2d 193 (Tex. 1971) ...................... Mosser v. Plano Three Venture, 893 S.W.2d 8 (Tex. App.­Dallas 1994, no writ) ................................................................................... Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995).......................

9 8 11 9 12

3, 8, 10, 11 3, 8, 10 12 10 10 10

Quintero v. Jim Walter Homes, Inc., 654 S.W.2d 442 (Tex. 1983) .......... Rorie v. Goodwin, 171 S.W.2d 579 (Tex. App.-Tyler 2005, no pet.) ......... Schlumberger Tech. v. Swanson, 959 S.W.2d 171 (Tex. 1997) ............... Stevens v. Snyder, 874 S.W.2d 241 (Tex. App.­Dallas 1994, writ denied) .. Williams v. Glash, 789 S.W.2d 261 (Tex. 1990) ...............................

iv

TEX. GOV. CODE § 22.001(A)(2) ................................................... TEX. GOV. CODE § 22.001(A)(6) ................................................... TEX. R. CIV. P. 11 ................................................................... TEX. R. CIV. P. 162.................................................................. TEX. R. CIV. P. 166a................................................................. TEX. R. CIV. P. 215.................................................................. TEX. R. CIV. P. 239.................................................................. TEX. R. CIV. P. 245...................................................................

3 3 7 7 7 7 7 7

v

No. 11-0699 __________________________________________________________________ IN THE SUPREME COURT OF TEXAS __________________________________________________________________ HUSAIN ABDULWAHAB, Petitioner, v. SAM'S REAL ESTATE BUSINESS TRUST, Respondent. __________________________________________________________________ On Appeal from Cause No. 02-10-00282-CV Second District Court of Appeals Fort Worth, Texas __________________________________________________________________ PETITION FOR REVIEW __________________________________________________________________

TO THE HONORABLE SUPREME COURT OF TEXAS: Petitioner, Husain Abdulwahab, pursuant to Texas Rule of Appellate Procedure 53, respectfully submits this Petition for Review seeking review of the Second District Court of Appeals' opinion in this matter. As set forth below, this Honorable Court should grant this Petition.

STATEMENT OF THE CASE This is a commercial landlord/tenant dispute in which the landlord ("Sam's") sued the tenant ("Abdulwahab") for rent and the tenant counter-claimed for damages arising out of various misrepresentations. After the Honorable Ken Curry of the 153rd District Court of Tarrant County, Texas, entered summary judgment for the landlord on the tenant's counterclaims, the parties settled their dispute at mediation and signed a one-page mediated settlement agreement, which provided only for settlement of all claims between "the parties." Thereafter, a second dispute arose concerning the scope of the mediated settlement agreement. Sam's filed a Motion to Dismiss All Claims, Asserted and Unasserted, including Potential Agents, with Prejudice. The trial court granted Sam's motion without conducting either a trial or a summary-judgment hearing. Judge Curry signed the final order on June 7, 2010. Abdulwahab appealed the dismissal order to the Second District Court of Appeals. On July 21, 2011, the Court of Appeals delivered its memorandum opinion and judgment in favor of Sam's. The opinion was authored by Justice Terrie Livingston and joined by Justices McCoy and Gabriel. It is not designated for publication. An extension to file this petition was granted on September 13, 2011. A second extension was requested on October 17, 2011.

PETITION FOR REVIEW

PAGE 2

STATEMENT OF JURISDICTION This Honorable Court has jurisdiction over this appeal under section 22.001(a)(2) of the Texas Government Code because the Court of Appeals' decision conflicts with the decisions of this Honorable Court in Ford Motor Co. v. Castillo, 279 S.W.3d 656, 663 (Tex. 2009), Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995), and Quintero v. Jim Walter Homes, Inc., 654 S.W.2d 442, 444 (Tex. 1983), in dispensing with the requirement that disputed settlement agreements be enforced via a contract claim after proper notice and hearing. Additionally, this Honorable Court enjoys jurisdiction over this appeal under Section 22.001(a)(6) of the Texas Government Code because the Court of Appeals committed an error of substantive law that is important to the jurisprudence of Texas. ISSUE PRESENTED FOR REVIEW 1) Whether claims against persons not before the Court can be summarily adjudicated on a procedure unknown in Texas jurisprudence without the benefit of a trial or a summary-judgment hearing. 2) Whether the trial court can refuse to make findings of fact and conclusions of law despite having summarily adjudicated disputed issues of fact.

PETITION FOR REVIEW

PAGE 3

STATEMENT OF THE FACTS In January of 2006, Abdulwahab entered a sublease with Sam's for the commercial property located at 2625 West Highway 303, Grand Prairie, Texas. (CR 0003) Abdulwahab's purpose, which was known to Sam's at the time the lease was executed, was to operate a bazaar on the premises. (CR 0097) Sam's represented to Abdulwahab that it would repair the facility's HVAC systems, electrical system, lighting in the parking lot, that it would ensure that the facility was water-tight and leak free and that all asbestos would be removed. Id. On or about February 15, 2006, Abdulwahab took possession of the building and discovered that no repairs had been made and that in general, the facility was in terrible condition. Id. Nevertheless, Abdulwahab continued with his plan to convert the facility into a suitable space for a bazaar by obtaining a construction permit from the city of Grand Prairie, which cost $25,000, and spending over $400,000 on improvements. Id. Between February and June of 2006, Abdulwahab entered a number of agreements with customers who wished to rent space in the bazaar. Id.

Abdulwahab represented to these customers that the bazaar would open in late June. Id. However, due to Sam's failure to fulfill its promise to repair the building, Abdulwahab was not able to obtain the necessary permits from the city. Id. In particular, Sam's refused to fix the leaking roof or repair the electrical

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PETITION FOR REVIEW

system. Id. As a result of these refusals and delays, Abdulwahab was unable to open until September 22, 2006. Id. After permits were obtained and the bazaar opened, Abdulwahab attempted to install a kitchen on the premises for use with a food court. Id. Sam's, however, told Abdulwahab that he did not have permission to operate a "restaurant" on the premises, despite the fact that it is customary and expected for a bazaar to contain some area where customers can obtain refreshments. (CR 0097-98) Additionally, nothing in the sublease agreement suggested that Abdulwahab would not be permitted to use part of the facility for a food court. (CR 0098) Because Abdulwahab was unable to open a food court within the bazaar, customers who were renting space from him began to complain. Id. By November of 2006, the majority of customers had terminated their agreements, leaving Abdulwahab with no source of revenue and no option other than to give up control of the facility. Id. Sam's sued Abdulwahab for rent (CR 0002) and Abdulwahab

counterclaimed alleging breach of various warranties and deceptive trade practices. (CR 0096) The trial court ultimately granted summary judgment for Sam's on Abdulwahab's counterclaims (CR 0646) and the parties later submitted the remaining claims to mediation. At mediation, the parties reached agreement to mutually release each other and walk away. (CR 0723) As is customary following

PETITION FOR REVIEW PAGE 5

successful mediations, the parties signed a mediated settlement agreement that provided that all claims, asserted or unasserted, known or unknown would be released as between "the parties." Id. The release did not extend to claims either party might have against any person or entity not before the court. See id.

Because the final settlement agreement prepared by Sam's counsel purported to release such claims, including in particular any claims Abdulwahab might have against Sam's agents, Abdulwahab refused to sign the more formal agreement. At the trial court's direction, on approximately May 28, 2010, Sam's filed a Motion to Dismiss All Claims, Asserted and Unasserted, including Potential Agents, with Prejudice. (CR -725) This motion was granted 11 days later on June 7, 2010 without a hearing. (CR 0736) Abdulwahab timely filed a request for findings of fact and conclusions of law. (CR 0738) Despite having made the factual determination that the parties' mediated settlement agreement covered claims against parties not before the court, the trial court refused to make findings of fact and conclusions of law. (CR 0742) Abdulwahab appealed the final order of the trial court and a three-judge panel issued its opinion on July 21, 2011. The opinion, written by Justice

Livingston, held that (1) the trial court properly enforced the mediated settlement agreement and (2) no findings of fact or conclusions of law were required because the trial court did not resolve any issues of fact.

PETITION FOR REVIEW PAGE 6

The Court of Appeals generally stated the nature of the case correctly. SUMMARY OF THE ARGUMENTS The Texas Rules of Civil Procedure provide numerous means for resolving lawsuits: nonsuit (Rule 162), dismissal for want of prosecution (Rule 165), summary judgment (Rule 166a), sanction (Rule 215), default (Rule 239), trial (Rule 245), or by agreement (Rule 11). The Rules of Civil Procedure do not, however, authorize summary disposition via motion to dismiss or a motion to enforce. Even where an agreement enforceable under Rule 11 is in dispute, this Court has always required proper pleadings followed by a summary-judgment hearing or trial. This Court has never countenanced, nor should it permit the Second District to allow, summary disposition except in accordance with the foregoing rules and well-established precedents. Because that is precisely what happened in this cause, this Petition for Review should be granted and the final order entered below should be vacated. The fundamental error in the Court of Appeal's opinion is that it treats Sam's motion to dismiss as a motion to enforce a settlement agreement not as a claim for breach of contract. Thus even if Sam's claim for breach of contract or specific performance were properly raised by its motion to dismiss, neither the trial court nor the Court of Appeals was free to disregard the Rules of Procedure governing resolution of a disputed contract claim. The trial court should have

PETITION FOR REVIEW PAGE 7

either required a summary-judgment motion and hearing with all of the procedural safeguards associated therewith or it should have set the matter for trial with all of the procedural safeguards associated with that procedure. What it could not do was dispense with all applicable procedures and enforce a settlement agreement against the consent of one of the parties. And to be clear, the consent that was lacking was Abdulwahab's consent to dismiss with prejudice claims he may have had against parties not before the court. ARGUMENTS When the parties reach a settlement agreement, the court may render a judgment based on the agreement as long as no party has withdrawn consent. Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995). When a trial court has knowledge that one of the parties to a suit does not consent to a judgment, however, the trial court should refuse to sanction the agreement by making it the judgment of the court. Quintero, 654 S.W.2d at 444; Burnaman v. Heaton, 240 S.W.2d 288, 291 (Tex. 1951). Here, the issue is not whether Abdulwahab consented to the mediated settlement agreement, but whether the MSA released claims against unnamed parties not before the court. A release is a contractual surrender by one party of its cause of action against the other party. Lloyd v. Ray, 606 S.W.2d Tex. App.­San Antonio 1980,

PETITION FOR REVIEW PAGE 8

writ ref'd n.r.e.).

A release discharges only the person or entity specifically

identified or named in the release. E.g., Angus Chem. Co. v. IMC Fertilizer, Inc., 838 S.W.2d 138, 139 (Tex. 1997) (release of tortfeasor did not release tortfeasor's insurer); McMillen v. Klingensmith, 467 S.W.2d 193, 196 (Tex. 1971) (release of one doctor did not release other doctors); Knutson v. Morton Foods, Inc., 603 S.W.2d 805, 806 (Tex. 1980) (release of employee did not release principal under doctrine of respondeat superior). In this case, the release agreed to by Abdulwahab clearly and expressly released only the named parties to this lawsuit: Without stipulation as to liability, all parties agree to completely release and discharge any and all claims of any kind, asserted or unasserted, known or unknown, that were or that could have been joined in the referenced litigation between these parties.

(CR 723, emphasis added). "These parties" are Sam's and Abdulwahab. The trial court was fully advised that Abdulwahab did not consent to Sam's motion to dismiss claims against parties not before the court. This lack of consent is evident in the Court of Appeal's opinion: [Sam's motion to dismiss] recited that the formal settlement document that [Abdulwahab] had refused to sign contained "customary settlement language" that precluded claims against agents of either party. Finally, the motion informed the trial court that appellant disagreed that claims against the parties' agents should be dismissed." COA Op. at 4. Even Sam's admitted that Abdulwabab did not consent to the requested relief arguing that his consent was not even relevant to the proceeding precisely because the order at issue was not agreed. COA Op. at 6.

PETITION FOR REVIEW PAGE 9

Settlement agreements are and always have been governed by the law of contracts. Schlumberger Tech. v. Swanson, 959 S.W.2d 171, 178 (Tex. 1997); Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990). Thus, if a court cannot render judgment on a settlement agreement because a party withdrew consent, the settlement agreement may be enforced as a contract if the agreement complies with Rule 11. Ford Motor Co. v. Castillo, 279 S.W.3d 656, 663 (Tex. 2009).

Enforcement is by suit on the contract, either for breach or for specific performance. writ denied). Most importantly, the party seeking enforcement must support it by pleadings and proof. Quintero v. Jim Walter Homes, Inc., 654 S.W.2d 442, 444 (Tex. 1983) ("The validity of the settlement agreement . . . may not be determined without proper pleadings and full resolution of the surrounding facts and circumstances."); Burnaman v. Heaton, 240 S.W.2d 288, 292 (Tex. 1951).; Browning v. Holloway, 620 S.W.2d 611, 615 (Tex. Civ. App.­Dallas), writ ref'd, n.r.e. per curiam, 626 S.W.2d 485 (Tex.1981). This Court has never waivered in these requirements: 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. The judgment in the latter case is not an

PETITION FOR REVIEW PAGE 10

Stevens v. Snyder, 874 S.W.2d 241, 243 (Tex. App.­Dallas 1994,

agreed judgment, but rather is a judgment enforcing a binding contract. Padilla, 907 S.W.2d at 461. The Court of Appeal's acknowledged that a "settlement agreement can be enforced as a contract by the trial court only after proper pleading, notice, hearing and proof." COA Op. at 7 (citing Ford and Padilla). Despite having stated the correct rule of law, the Court of Appeals simply did not require its application in this case. To the extent that Sam's contended that Abdulwahab was in breach of the mediated settlement agreement or sought specific performance of that agreement, Sam's not only had to plead that contention, but proper notice and hearing were required. Padilla, 907 S.W.2d at 461. Abdulwahab acknowledges that a motion to enforce may suffice to plead the contract issue. Mantas v. Fifth Ct. of Appeals, 925 S.W.2d 656, 658 (Tex. 1996). Proper notice and hearing are still required though. And, Abdulwahab was entitled to conduct discovery, if desired, to prepare his defense. See Ford Motor, 279 S.W.3d at 663. All of these procedures were disregarded in this case. Sam's motion to enforce was granted 11 days after it was filed. It was not set for trial and thus no notice was provided as required by Rule 245. Nor was a motion for summary judgment filed. Failure to give adequate notice of a summary judgment hearing is not only procedural but violates the demands of due process as

PETITION FOR REVIEW PAGE 11

well. See Mosser v. Plano Three Venture, 893 S.W.2d 8, 12 (Tex. App.­Dallas 1994, no writ); Rorie v. Goodwin, 171 S.W.2d 579, 583 (Tex. App.-Tyler 2005, no pet.); Jimenez v. Transwestern Prop. Co., 999 S.W.2d 125, 128 (Tex. App.­ Houston [14th Dist.] 1999, no pet.). Abdulwahab relied on these procedural and constitutional safeguards that were denied to him by both the trial court and the Court of Appeals. Such a fundamental disregard of due process simply cannot be tolerated. CONCLUSION AND PRAYER As this Petition for Review demonstrates, this cause poses critically important issues on the viability of the Texas Rules of Civil Procedure as they concern summary-judgment proceedings and trials, as well as the ability of courts to circumvent the procedural safeguards surrounding those proceedings. For the reasons stated in this Petition for Review, Abdulwahab respectfully requests that the Court grant this Petition for Review, reverse the Court of Appeal's Judgment, vacate the final order of dismissal rendered by the trial court, or otherwise render judgment for Abdulwahab. Adbulwahab prays for all other and further relief to which he may be justly entitled.

PETITION FOR REVIEW

PAGE 12

Respectfully submitted, s/ David R. Gibson ________________________ David R. Gibson Texas Bar No. 07861220 1801 N. Hampton Rd., Ste. 370 DeSoto, TX 75115 Tel. (972) 291-9300 Fax (972) 291-0636 ATTORNEY FOR PETITIONER

CERTIFICATE OF SERVICE On this 17th day of October 2011, a copy of the foregoing instrument was served on counsel for Appellee/Respondent as follows: Via Facsimile (214) 692-6610 James D. Payne Guida, Slavich & Flores 750 N. St. Paul St., Ste. 200 Dallas, TX 75201 COUNSEL FOR RESPONDENT s/ David R. Gibson ________________________ David R. Gibson

PETITION FOR REVIEW

PAGE 13

Appendix A Trial Court Order Appealed From

CAUSE NO. 153-22254107

SAM'S REAL ESTATE BUSINESS TRUST, A DELAWARE STATUTORY TRUST vs. HUSAIN ABDUL W ARAB, Individually and d/b/a FURNlTURE GALAXY AND BAZAAR

§ § § §

IN THE DISTRICT COURT

§

§ § § §

TARRANT COUNTY, TEXAS

153 RD JUDICIAL DISTRICT

ORDER GRANTING MOTION TO DISMISS ALL CLAIMS, ASSERTED

AND UNASSERTED, INCLUDING POTENTIAL AGENTS, WITH PREJUDICE

On this day came on to be heard Sam's Real Estate Business Trust, a Delaware Statutory

Trust ("Sam's") Motion to Dismiss All Claims, Asserted and Unasserted, Including Potential

Agents, With Prejudice, and after due consideration of same, the Court is of the opinion that said

Motion is well taken and in all things should be granted.

IT IS HEREBY ORDERED, ADJUDGED and DECREED that Sam's Motion to Dismiss All Claims, Asserted and Unasserted, Including Potential Agents, with Prejudice, is granted in its entirety.

IT IS FURTHER ORDERED, ADJUDGED and DECREED that Plaintiff, Sam's Real

Estate Business Trust, a Delaware Statutory Trust, have and recover nothing from Defendant,

Husain Abdulwahab, Individually and d/b/a Furniture Galaxy and Bazaar ("Abdulwahab"), and

all claims asserted by Plaintiff in this cause are hereby dismissed with prejudice to the refiling of

same.

IT IS FURTHER ORDERED, ADJUDGED and DECREED that Counter-Plaintiff,

AbdulwahabJ have and recover nothing from Counter-Defendant, Sam's Real Estate Business

Trust, a Delaware Statutory Trust, and that all claims asserted by Counter-Plaintiff in this cause

are hereby dismissed with prejudice to the refi ling of same.

ORDER GRA ING AND UNASSER

0

ION TO DISMISS ALL CLAIMS, ASSERTED

DING Po

AGENTS, WITH PREJUDICE

Cop~_To

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Transaction #j[ J

IT IS FURTHER ORDERED, ADJUDGED and DECREED that any and all claims of

any kind, asserted or unassertcd, known or unknown, that were or that could have been joined in

this lawsuit, which includes claims against potential agents of either PlaintitT or

Def~dant

(including real estate brokers), are released by both Sam's and Abdulwahab and discharged with prejudice. IT IS FURTHER ORDERED, ADJUDGED and DECREED that all costs of court are hereby ta."'::ed against the party incurring same; and IT IS FINALLY ORDERED, ADJUGED and DECREED that all relief not specifically granted herein is hereby denied, Signed this _1-'---_ _ day oOune, 2010,

'"fYr-

/~----

ORDER GRANTING MOTION TO DISMISS ALL CLAIMS, AsSERTED

AND UNASSERTED. INCLUDING POTENTIAL AGENTS, WITn PREJUDICE PAGE 2

Appendix B Court of Appeals Opinion

COURT OF ApPEALS

SECOND

DISTRICT OF TEXAS

CHIEF JUSTICE TERRIE LIVINGSTON JUSTICES LEE ANN DAUPHlNOT ANNE GARDNER SUE WALKER BOB McCOY BILL MEIER LEE GABRIEL

TIM CURRY CRIMINAL JUSTICE CENTER 401 W. BELKNAP, SUITE 9000 FORT WORTH, TEXAS 76196

TEL. (817) 884-1900

FAX (8\7) 884-1932

CLERK DEBRA SPISAK CHIEF DEPUTY CLERK MEAGAN POLK CHIEF STAFF ATIORNEY LISA M. WEST

",'WW.2ndcoa counS.sl;l1e tx us

July 21,2011 David R. Gibson The Gibson Law Group 1801 N. Hampton Rd., Ste. 210 DeSoto, TX 75115 James D. Payne Guida, Siavich & Flores, P.C. 750 N. St. Paul St., Ste, 200 Dallas, TX 75201 RE: Court of Appeals Number: Trial Court Case Number: 02-10-00282-CV 153-222541-07 Rhonda Bartlett 3100 Main St. #43 Dallas, TX 75226

Style:

Hussain Abdulwahab, Individually and d/b/a Furniture Galaxy and Bazaar

v.

Sam's Real Estate Business Trust, a Delaware Statutory Trust Dear Counsel: The judgment of the trial court in the above cause was affirmed today_ Copies of the opinion and judgment of this court are hereto attached. Respectfully yours, DEBRA SPISAK, CLERK

COURT OF APPEALS

SECOND DISTRICT OF TEXAS

FORT WORTH

NO. 02-10-00282-CV

Hussain Abdulwahab, Individually and d/b/a Furniture Galaxy and Bazaar

v.

§

§

From the 153rd District Court of Tarrant County (153-222541-07) July 21, 2011 Opinion by Chief Justice Livingston

§

§

Sam's Real Estate Business Trust, a Delaware Statutory Trust

JUDGMENT

This court has considered the .record on appeal in this case and holds that there was no error in the trial court's jUdgment. It is ordered that the jUdgment of the trial court is affirmed. It is further ordered that appellant Hussain Abdulwahab shall pay all of the costs of this appeal, for which let execution issue.

SECOND DISTRICT COURT OF APPEALS

By_':sd:..~~~~~~~~

_

Chief Justice Te

COURT OF APPEALS

SECOND DISTRICT OF TEXAS

FORT WORTH

NO. 02-10-00282-CV

HUSSAIN ABDULWAHAB, INDIVIDUALLY AND D/B/A FURNITURE GALAXY AND BAZAAR

APPELLANT

v.

SAM'S REAL ESTATE BUSINESS TRUST, A DELAWARE STATUTORY TRUST APPELLEE

FROM THE 153RD DISTRICT COURT OF TARRANT COUNTY

MEMORANDUM OPINION 1

This appeal arises from a jUdgment that the trial court rendered after the parties entered into a Mediation Settlement Agreement (MSA).

1 See

The trial court

Tex. R. App. P.47.4.

1

granted appellee Sam's Real Estate Business Trust, a Delaware Statutory Trust's motion to dismiss, which sought enforcement of the MSA. court's judgment.

Background Facts

We affirm the trial

In February 2007, appellee sued appellant for breach of a commercial sublease that was related to a building in Grand Prairie. 2 Appellee claimed that appellant had breached the agreement by not paying rent and other costs. Appellant admitted to entering into the sublease but asserted that although appellee had represented that it would repair various aspects of the building, it had not done so. Thus, appellant counterclaimed for breach of warranty of

suitability, breach of covenant of quiet enjoyment, and deceptive trade practices. 3 Appellee answered the counterclaims, and appellee filed a motion to strike them based on appellant's alleged failure to properly answer discovery, a hybrid motion for summary judgment on the counterclaims, and a no-evidence motion for summary jUdgment on appellant's affirmative defenses. The trial court granted

21n January 2008, appellee obtained a no-answer default judgment against appellant for $970,097.98 plus postjudgment interest. Appellant then filed an answer, which contained affirmative defenses, and a motion for new trial. Although appellee opposed the motion for new trial, the trial court granted it and vacated the default judgment.

3S ee Tex. Bus. & Com. Code Ann. §§ 17.41-.63 (West 2011).

2

appellee's hybrid motion for summary judgment, ruling that appellee was entitled to judgment as a matter of law on appellant's counterclaims. The parties then mediated appellee's breach of contract claim.

On October 23, 2009, the parties reached an agreement to settle the case. The terms of the MSA, in its entirety, are as follows: On this the 23th; [sic] day of October 2009, the parties identified below resolved the referenced matter on the dependent terms outlined below:

1. Without stipulation as to liability, all parties agree to completely release and discharge any and all claims of any kind, asserted or unasserted, known or unknown, that were or that could have been joined in the referenced litigation between these parties.

3. Counsel for Plaintiff will prepare formal settlement and dismissal documents. By signing below we acknowledge our understanding of and agreement to the terms outlined above. The agreement displays appellant's signature as well as the signatures of counsel for both parties. The MSA was filed three days later. In May 2010, seven months after the MSA had been executed, appellee filed a motion to dismiss all claims, alleging that appellant had refused to sign a formal settlement document because he was 41t appears that the parties used a pre-formatted agreement, and the text following the second term is crossed out and contains blanks that were never completed.

3

considering filing a lawsuit against the real estate broker who helped market the property that appellant subleased from appellee. 5 The motion to dismiss stated that appellant had failed to appear for two dismissal hearings scheduled by the trial court and that the court had "directed" that the motion be filed. The motion recited that the formal settlement document that appellant had refused to sign contained "customary release language" that precluded ~Iaims against agents of either party.6 Finally, the motion informed the trial court that appellant disagreed that claims against the parties' agents should be dismissed. On May 28, 2010, appellee gave appellant written notice that the motion to dismiss would be submitted for the trial court's consideration on June 7, 2010, without an oral hearing. Appellant did not file a response by June 7, and on that date the trial court signed an order granting the motion and stating that any and all claims of any kind, asserted or unasserted, known or unknown, that were or that could have been joined in this lawsuit, which includes claims against potential agents of either [appellee] or 5Appellant states in his brief, "[Appellee] drafted, but [appellant] did not sign, the proposed formal settlement document." In the motion to dismiss, appellee alleged that it settled its breach of contract claim with appellant because appellant had threatened to leave the country or file for bankruptcy, "leaving a minimal chance of being able to collect any money from [appellant] after a money judgment had been obtained," 61n the motion to dismiss, appellee argued, "In essence, [appellant] wants to pursue a claim against a potential agent of [appellee's] ... while, at the same time, foreclosing [appellee's] opportunity to collect unpaid rent from him. Such is an absurd position to take ...." 4

[appellant] (including real estate brokers), are released by both [appellee] and [appellant] and discharged with prejudice. Two weeks later, appellant requested findings of fact and conclusions of law. Appellee objected, arguing that the trial court's findings and conclusions would not be proper under the rules of civil procedure because the court did not hear conflicting evidence on the dismissal motion. appellee and denied appellant's request. Appellant filed a motion to modify, reform, or correct the jUdgment, stating that the MSA settled claims among only the named parties. In the motion, The trial court agreed with

appellant represented that he had not withdrawn his consent to the settlement agreement, but he stated that he never gave consent to "any settlement extending beyond the named parties." The trial court denied appellant's motion to reform the jUdgment, and appellant brought this appeal. The Propriety of the Trial Court's Judgment In three issues, appellant contends that the trial court erred by granting appellee's motion to dismiss with prejUdice, denying appellant's request for findings of fact and conclusions of law, and denying appellanfs motion to modify, reform, or correct the judgment. The judgment complied with the MSA In his 'first issue, appellant contends that the trial court erred by signing its June 7, 2010 "Order Granting Motion to Dismiss All Claims, Asserted and

5

Unasserted, Including Potential Agents, with Prejudice" because the order does not strictly and literally comply with the MSA and because the trial court was on notice that he did not consent to a release of claims against potential agents, including real estate brokers, at the time of the judgment. Appellant argues that the trial court altered the express release language in the MSA and therefore rendered an improper consent judgment, an improper ruling that appellant had breached the settlement agreement when no pleading for breach of contract had been filed, or an improper judgment enforcing a settlement agreement when no motion for enforcement had been filed. Texas has a public policy of encouraging the peaceful resolution of disputes and the early settlement of pending litigation through voluntary settlement procedures. Tex. Civ. Prac. & Rem. Code Ann. § 154.002 (West

2011); Brooks v. Brooks, 257 S.W.3d 418, 421 (Tex. App.-Fort Worth 2008, pet.

denied). Trial and appellate courts are charged with the responsibility of carrying out this public policy. Tex. Civ. Prac. & Rem. Code Ann. § 154.003 (West 2011);

Brooks, 257 S.W.3d at 421.

Appellee argues that the trial court's dismissal order was not an agreed order and that it is therefore irrelevant whether appellant withdrew his consent to the MSA before the entry of the order. Written settlement agreements and rule

11 agreements may be enforced as contracts even if one party withdraws 6

consent before judgment is entered on the agreement.

Ford Motor Co. v.

279 S.W.3d 656, 663 (Tex. 2009); Padilla v. LaFrance, 907 S.W.2d 454, 461 1995); see Tex. Civ. Prac. & Rem. Code Ann. § 154.071 (a) (West 2011) ("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. R. Civ. P..11; City of Roanoke v Town of Westlake, 111 S.W.3d 617, 626 (Tex. App.-Fort Worth 2003, pet. denied). When consent is withdrawn, an agreed judgment based on the settlement agreement is inappropriate; the party seeking enforcement of the settlement agreement must pursue a claim for breach of contract. Ford Motor Co., 279 S.W.3d at 663; 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 ... even though one side no longer consents to the settlement."); Alcantar v Okla. Nat'l Bank, 47 S.W.3d 815, 819 (Tex. App.-Fort Worth 2001, no pet.). A settlement agreement can be

enforced as a contract by the trial court only after proper pleading, notice, hearing, and proof. Ford, 279 S.W.3d at 663; Padilla, 907 S.W.2d at 462;

Neasbitt v. Warren, 105 S.W.3d 113, 117 (Tex. App.-Fort Worth 2003, no pet.); see also Mantas v. Fifth Court of Appeals, 925 S.W.2d 656, 658 (Tex. 1996) (orig. proceeding) ("Where the settlement dispute arises while the trial court has 7

jurisdiction over the underlying action, a claim to enforce the settlement agreement should, if possible, be asserted in that court under the original cause number."). Although an amended pleading is one method of raising a claim that a settlement agreement should be enforced as a contract, we have held that a motion

seekingenforcement~of

the settlement agreement is a sufficient pleading

to allow a trial court to render judgment enforcing the settlement because such a motion gives the alleged breaching party an opportunity to defend itself. Neasbitt, 105 S.W.3d at 117; see Twist v. McAllen Nat'l Bank, 248 S.W.3d 351, 361 (Tex. App.-Corpus Christi 2007, orig. proceeding [mand. denied]) (holding that an oral motion to enforce a settlement agreement was sufficient because "[a]s long as the motion recites the terms of the agreement, states that the other party has revoked its previously stated consent to the agreement, and requests the trial court to grant relief, the motion is sufficient"); Bayway Servs., Inc.

v.

Ameri-Build Constr, L.C., 106 S.W.3d 156, 160 (Tex. App.-Houston [1st Dist.] 2003, no pet.). If the motion satisfies the general purposes of pleadings, which ;s to give the other party fair notice of the claim and the relief sought, it is sufficient to allow the trial court to render judgment enforcing the settlement. S.W.3d at 361; Neasbitt, 105 S.W.3d at 117. 7 Twist, 248

71n Neasbitt, we explained,

8

Appellant argues that the trial court erred by rendering judgment releasing claims against potential agents when the only pleading pending was a motion to dismiss. 8 Although appellee's motion was labeled as a motion to dismiss, it was essentially a motion to enforce the MSA because appellee alleged that appellant "refuse[d] to sign a formal settlement document 'releas[ing] ... any and all claims of any kind ... that could have been joined in [this] litigation' as he. agreed to do in [the MSA]." The motion specifically recited and attached the terms of the MSA and stated that appellee's counsel had prepared the formal settlement and dismissal documents required by the agreement. The motion further alleged that the formal settlement documents were forwarded to and approved by appellant's

"A pleading is an original or amended petition or answer, which may also include or constitute a response, plea, or motion." "When a party has mistakenly designated any plea or pleading, the court, if justice so requires, shall treat the plea or pleading as if it had been properly designated." When determining the nature of a filing with the court, the contents of the filing govern over the title of the document. "[T]he purpose of pleadings is to give the adversary par ties notice of each [party's] claims and defenses, as well as notice of the relief sought." 105 S.W.3d at 117 (citations and footnotes omitted). 8Appellant seems to argue that he was deprived of the right to assert defenses and conduct discovery. But appellant did not respond to appellee's motion to dismiss in any respect and therefore did not make the trial court aware of his desire to assert defenses or conduct discovery. He therefore waived any argument pertaining to his lack of an opportunity to prepare a defense. See Tex. R. App. P. 33.1 (a); Neasbitt, 105 S.W.3d at 118.

9

counsel but that appellant refused to sign them.

Appellee requested that the

motion to dismiss be set for a hearing with notice to appellant and asked the trial court to enforce the settlement agreement. 9 Thus, the motion contained all of the necessary elements to request enforcement of the MSA. See Twist, 248 S.W.3d at 361-62; Neasbitt, 105 S.W.3d at 117. Furthermore, the trial court correctly enforced the settlement agreement to preclude claims against third parties that could have been brought in the litigation between appellee and appellant. The MSA is a contract and is therefore

governed by the same rules of construction applicable to all contracts. See Doe

\I.

Tex. Ass'n of Sch. Bds., Inc., 283 S.W.3d 451, 458 (Tex. App.-Fort Worth Thus, in construing the MSA, our primary concern is Id.

2009, pet. denied).

ascertaining the true intent of the parties as expressed in the agreement.

(citing NP Anderson Cotton Exch., L.P v Potter, 230 S.W.3d 457, 463 (Tex. App.-Fort Worth 2007, no pet.)); see Republic Nat'! Bank of Dallas

\I.

Nat'l

Bankers Life Ins. Co., 427 S.W.2d 76, 79-80 (Tex. Civ. App.-Dallas 1968, writ ref'd n.r.e.) (noting that courts should not consider the "intention which the parties may have had, but failed to express in the instrument"). "Words in a contract

must carry their ordinary, generally accepted meanings unless the contract itself 9Appellee stated in the motion, "As agreed in the [MSA], it is now time to put to rest all claims, either asserted or unasserted, that could have been joined in this lawsuit ... '." 10

shows that the terms have been used in a technical or different sense.

In

construing a contract, we may not rewrite it nor add to its language." Doe, 283 S.W.3d at 458 (citation omitted). The interpretation of an unambiguous contract is a matter of law to be determined by the trial court.

Gulf Ins. Co. v. Bums

Motors, Inc., 22 S.W.3d 417,423 (Tex. 2000).

The trial court literally ant::! strictly complied with ttole MSA by oFderingthat it precluded all claims "that were or that could have been joined in this lawsuit, which includes claims against potential agents."10 This is precisely what the MSA required when the parties agreed to "completely release and discharge any and all claims of any kind, asserted or unasserted, known or unknown, that were or that could have been joined in the referenced litigation between these parties." Appellant's interpretation of the MSA, that it releases only claims that could have been brought between appellant and appellee, is unreasonable because it would have required the trial court to rewrite the agreement to state, in effect, that the parties agreed to "completely release and discharge any and all claims of any

10Appeliant does not dispute that he could have sued appellee's real estate broker in the same suit in which he brought claims against appellee. Texas Rule of Civil Procedure 40(a) provides, "All persons may be joined in one action as defendants if there is asserted against them jointly, severally, or in the alternative any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences ...." Tex. R. Civ. P.40(a). 11

kind between these parties, asserted or unasserted, known or unknown, that were or that could have been joined in the referenced litigation." Because we hold that the trial court did not err by granting appellee's motion to dismiss (of which appellant had notice and an opportunity to respond) and by strictly enforcing the terms of the MSA, we overrule appellant's first issue. See Neasbitt, 105 S.W.3d at 117-19.

The request for findings of fact and conclusions of law was inappropriate

In his second issue, appellant argues th·at the trial court erred by refusing to file findings of fact and conclusions of law. "In any case tried in the district or county court without a jury, any party may request the court to state in writing its findings of fact and conclusions of law." Tex. R. Civ. P. 296. "Findings and

conclusions are appropriate if there is an evidentiary hearing and the trial court is called upon to determine questions of fact based on conflicting evidence." Int'I Union, United Auto., Aerospace & Agric. Implement Workers of Am.-UAW v. Gen. Motors Corp., 104 S.W.3d 126, 129 (Tex. App.-Fort Worth 2003, no pet.) (citing Po;1 Arthur ISD v. Port Arthur Teachers Ass'n, 990 S.W.2d 955, 958 (Tex. App. Beaumont 1999, pet. denied)). When the trial court rules without determining

questions of fact, a request for findings of fact and conclusions of law is inappropriate. Id.; see O'Donnell v. McDaniel, 914 S.W.2d 209, 210 (Tex. App. Fort Worth 1995, writ denied) (stating that a dismissal of a case without an 12

evidentiary hearing does not constitute a case that has been "tried" within the meaning of rule 296); see also Puri v. Mansukhani, 973 S.W.2d 701, 708 (Tex. App.-Houston [14th Dist.] 1998, no pet.) ("The purpose of Rule 296 is to give a party a right to findings of fact and conclusions of law finally adjudicated after a conventional trial .. " In other cases, findings and conclusions may be proper,

but a party is not entitled to them."). The trial court did not hold an evidentiary hearing, and its decision to grant appellee's motion to dismiss and enforce the MSA was not based on the determination of any fact issue about which there was conflicting evidence. Instead, at most, it was based on the parties' competing interpretations of the principal evidence presented, the MSA, and on appellant's undisputed refusal to sign a document that complied with the MSA's language. Appellant contends that the trial court decided a disputed fact issue of the parties' intent in signing the MSA. But intent in entering a contract is only a fact issue where the contract is ambiguous, and based on our reasoning above, we hold that the MSA was not ambiguous. See Columbia Gas Transmission Corp. v.

New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996); Doe, 283 S.W.3d at 459.

For these reasons, we hold that the trial court did not err by declining to file findings of fact and conclusions of law. appellant's second issue. 13

See Tex. R. Civ. P. 296. We overrule

The trial court correctly denied appellant's motion to modify, reform, or correct the judgment

In his third issue, appellant argues that the trial court erred by denying his motion to modify, reform, or correct the judgment. That motion and the argument contained in the body of appellant's third issue recast the contentions that appellant made in his first issue. Therefore, for the same reasons that we

overruled appellant's first issue, we overrule his third issue. See Neasbitt, 105 S.W.3d at 118-19.

Conclusion

Having overruled each of appellant's issues, we affirm the trial court's judgment.

TERRIE L1VINGST N CHIEF JUSTICE

PANEL: LIVINGSTON, C.J.; MCCOY and GABRIEL, JJ. DELIVERED: july 21,2011

14

Appendix C Mediated Settlement Agreement

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Mediation Settlement Agreemen. No. 153-2254107; Sam's Real Estate Business Trust, A Delaware Statutory

Trust v. HJ::a:n Abdulwahab d/b/a Furniture Galaxy and Bazaar

0:1 ~r.lS the 2]'h day or October 2009, the parties identified below resolved the referenced matter on 11'e deper.dent terms outlined below:

t. "\j :.)L:; slipt::atior. as to liability, all pnrties agree to completely release and discharge any and z.: ~ ,~;: ''.'.S 0': an;.' kind, asserted or unasscrted, known or unknown, that were or that could have been .;>ned in the refen:nced litigation between these parties.

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will prepare fonnal settlement and dismissal

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below we acknowledge our understanding of and agreement to the tenns

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PLAINTIFF'S COUNSEL

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