Failure to perform under settlement agreement actionable as breach of contract

NATURE OF SETTLEMENT AGREEMENT & REMEDY IN CASE OF BREACH THEREOF

A settlement agreement is a contract between parties, a breach of which gives rise to a cause of action for breach of contract. Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995).

To be entitled to summary judgment on this claim, the employees were required to prove, as a matter of law, the following essential elements: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained as a result of the breach. See B & W Supply, Inc. v. Beckman, 305 S.W.3d 10, 16 (Tex. App.—Houston [1st Dist.] 2009, pet. denied).

Parties form a valid and enforceable contract when the following elements are present: (1) an offer, (2) an acceptance in strict compliance with the terms of the offer, (3) a meeting of the minds, (4) each party’s consent to the terms, and (5) the execution and delivery of the contract with the intent that it be mutual and binding. See Winchek v. Am. Express Travel Related Servs. Co., 232 S.W.3d 197, 202 (Tex. App.—Houston [1st Dist.] 2007, no pet.); Hubbard v. Shankle, 138 S.W.3d 474, 481 (Tex. App.—Fort Worth 2004, pet. denied). "Meeting of the minds" describes the mutual understanding and assent to the agreement regarding the subject matter and the essential terms of the contract. Potcinske v. McDonald Prop. Invs., Ltd., 245 S.W.3d 526, 530 (Tex. App.—Houston [1st Dist.] 2007, no pet.).

Whether a contract is ambiguous is a question of law for the court. J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). A contract is not ambiguous if its wording permits a definite or certain legal meaning. DeWitt Cnty. Elec. Coop., Inc. v. Parks, 1 S.W.3d 96, 100 (Tex. 1999). "[A]n ambiguity does not arise simply because parties advance conflicting interpretations of the contract." Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 728 (Tex. 2001); see also DeWitt Cnty. Elec. Coop., 1 S.W.3d at 100. We construe the parties’ intentions as expressed in the document, considering the entire writing and attempting to harmonize and give effect to all of the contract’s provisions with reference to the whole agreement. Frost Nat’l Bank v. L & F Distribs., 165 S.W.3d 310, 311–12 (Tex. 2005).

SOURCE: HOUSTON COURT OF APPEALS - 01-10-00764-CV - 12/1/11

Settlement agreement moots the underlying controversy

In his first issue, Yellowe contends that he preserved for appeal his complaint that the trial court did not rule on his motion for summary judgment concerning his affirmative defense of limitations to the lawsuit originally brought by the employees. In his second issue, he contends that the trial court erred by failing to grant his motion.

We need not decide Yellowe’s first issue. Even if Yellowe preserved this complaint for appeal, the trial court properly determined that a valid and enforceable settlement agreement existed and that the underlying case was settled. Thus, there is no live controversy regarding the employees’ claims under the employment contracts. See Bd. of Adjustment v. Wende, 92 S.W.3d 424, 427 (Tex. 2002) (holding that when parties have settled dispute, there is no longer a live controversy between them, and case is moot); Williams v. Lara, 52 S.W.3d 171, 184 (Tex. 2001) (stating if controversy ceases to exist, case becomes moot and "[i]f a case becomes moot, the parties lose standing to maintain their claims."). A court is prohibited from deciding a moot case. See Valley Baptist Med. Ctr. v. Gonzalez, 33 S.W.3d 821, 822 (Tex. 2000). Because it found that the employees’ claims under the employment contracts were rendered moot by the settlement agreement, the trial court did not commit error by declining to reach the merits of the employees’ claims or Yellowe’s affirmative defenses to those claims. See id.; see also Williams, 52 S.W.3d at 184.
SOURCE: HOUSTON COURT OF APPEALS - 01-10-00764-CV - 12/1/11