Motion for Enforcement of Settlement Agreement in Texas

What Is a Motion for Enforcement of Settlement Agreement?

Background

When parties dictate the terms of their agreement into the record in open court, they enter into a rule 11 agreement. (Juarez v. Lar. Inv. Prop. (2011) No. 04-10-00821-CV, at *5-6 citing TEX. R. CIV. P. 11.) A settlement agreement satisfies the requirements of rule 11 if it is made in open court and entered of record before the trial court renders judgment. (Padilla v. LaFrance (1995) 907 S.W.2d 454, 461; see also, Tex. R. Civ. P. 11.)

Valid Settlement Agreement

Once the parties enter into a valid settlement agreement under rule 11, the trial court may enter an agreed judgment based on the settlement agreement. (Mantas v. Fifth Court of Appeals (1996) 925 S.W.2d 656, 658 (Tex. 1996); Padilla, 907 S.W.2d at 462.) However, if a party withdraws its consent to the agreement before judgment is rendered, the trial court may not render an agreed judgment on the settlement agreement. (Id.) Rather, the court may only enforce it as a written contract, but only after the party seeking enforcement pursues a breach of contract claim, following the normal rules of pleading and proof. (Id.)

How to Structure the Motion

When a dispute arises while the trial court still has jurisdiction over the underlying action, the breach of contract claim may be asserted under the original cause number. (Mantas, supra, 925 S.W.2d at 658.)

If, however, the trial court has lost jurisdiction over the underlying claim, the party seeking enforcement must file a separate breach of contract action. (Id. at 658-59.) A separate action must be filed because the settlement agreement is no longer capable of being entered as an agreed judgment because for an agreed judgment to be valid, consent must exist at the time the judgment is entered. (Juarez v. Lar. Inv. Prop. (2011) No. 04-10-00821-CV, at *5-6 citing Padilla, 907 S.W.2d at 461 (citing Kennedy v. Hyde (1984) 682 S.W.2d 525, 528.)

Legal Arguments and Reasoning Concerning Enforcment

It is well settled that under Texas Rule of Civil Procedure 11, no agreement between the attorneys or parties to a suit is enforceable unless it is in writing, signed, and filed with the papers as part of the record, or unless it is made in open court and entered of record. (Green v. Midland Mortg. Co. (2011) 342 S.W.3d 686, 690-91 citing Tex. R. Civ. P. 11.)

It is well established that “[a] settlement agreement must comply with Rule 11 to be enforceable.” (See Padilla v. LaFrance, 907 S.W.2d 454, 460 (Tex. 1995). Further, “[t]o satisfy the ‘in writing’ component of Rule 11, the contract principles that are used in determining whether a ‘writing’ satisfies the statute of frauds apply equally to Rule 11 agreements. (See id.) Thus, “there must be a written memorandum which is complete within itself in every material detail, and which contains all of the essential elements of the agreement, so that the contract can be ascertained from the writings without resorting to oral testimony.” (Id., quoting Cohen v. McCutchin (1978) 565 S.W.2d 230, 232.)

It is well accepted that “[t]he written memorandum ... need not be contained in one document.” (Id.) Padilla v. LaFrance is dispositive in this case. (Green v. Midland Mortg. Co. (2011) 342 S.W.3d 686, 691 citing Padilla, supra.) In Padilla, the parties had exchanged a series of letters regarding terms of a settlement while a lawsuit was pending against Enrique Padilla. (See 907 S.W.2d at 455.) Padilla claimed that the letters represented a written settlement between the parties and asked the trial court to enforce the agreement. (Id. at 457.) The plaintiffs, however, contended that there was no written agreement between the parties. (Id.) The Texas Supreme Court concluded that the series of letters between the parties were sufficient to constitute an agreement in writing satisfying Rule 11. (Id. at 460.) In doing so, the Court noted that the letters specifically confirmed a settlement agreement between the parties and contained all the material terms of the agreement: an agreement to pay a specified sum of money in exchange for the settlement of all claims. (Id. at 460-61.)

Mediated Settlement Agreements and the Family Code

“If a mediated settlement agreement (“MSA”) meets [certain requirements], a party is entitled to judgment on the mediated settlement agreement notwithstanding ... another rule of law.” (In re Lee (2013) 411 S.W.3d 445, 447 quoting Tex. Fam.Code § 153.0071(e).)

However, “[s]ubsection (e–1) provides a narrow exception, allowing a trial court to decline to enter judgment on an MSA when three requirements are all met:

a party to the agreement was a victim of family violence, and
the court finds the family violence impaired the party's ability to make decisions, and
the agreement is not in the child's best interest.

(Id., quoting § 153.0071(e–1).)

By its plain language, section 153.0071 authorizes a court to refuse to enter judgment on a statutorily compliant MSA on best interest grounds only when the court also finds the family violence elements are met. Stated another way, “[t]he statute does not authorize the trial court to substitute its judgment for the mediated settlement agreement entered by the parties unless the requirements of sub section 153.0071(e–1) are met.” (In re Lee (2013) 411 S.W.3d 445, 453 citing Barina v. Barina (2008) No. 03–08–00341–CV, 2008 WL 4951224, at *4.)

The Court’s Decision

It is well settled law that when an agreement leaves material matters open for future adjustment and agreement that never occur, it is not binding upon the parties and merely constitutes an agreement to agree. (Fischer v. CTMI, L.L.C. (2006) 479 S.W.3d 231, 237.)

Concerning the enforcement of a mediated settlement agreement in a suit affecting the parent-child relationship ("SAPCR"), it is well settled, if the agreement meets the requirements of section 153.0071(d), then rule 11, Texas Civil Practice and Remedies Code section 154.071, and general contract law principles do not apply to the enforcement of the agreement. (In re Calderon (2003) 96 S.W.3d 711, 718.)