Opinion
NO. 01-17-00915-CV
06-12-2018
JORY ODOM, Appellant v. SOUTHCROSS SECURITY, INC., Appellee
On Appeal from the 125th District Court Harris County, Texas
Trial Court Case No. 2015-14026
MEMORANDUM OPINION
This dispute arose when a corporation failed to pay the amount it owed under a mediated settlement agreement. Jory Odom, the general manager of the corporation, appeals from a judgment enforcing the settlement agreement against him individually. We hold that Odom did not breach the agreement because the agreement required the corporation to pay the funds, not Odom. We therefore reverse the trial court's judgment against Odom individually, render judgment that Southcross Security, Inc. take nothing as to Odom, and affirm the judgment against the corporation.
BACKGROUND
Southcross sued Securatech Solutions, Inc. and its general manager, Odom, alleging several business torts. Securatech and Odom generally denied Southcross's allegations, and Odom counterclaimed.
The parties settled these claims. In their mediated settlement agreement, Securatech agreed to pay Southcross $25,000. The parties released one another from all claims, known and unknown, except for the performance of the terms of the settlement agreement. Odom signed the agreement twice—once on his own behalf and again as general manager for Securatech. The president of Southcross signed the agreement on its behalf.
Securatech failed to pay Southcross the $25,000. Southcross moved to enforce the settlement agreement against Securatech and Odom, contending that both were liable for the $25,000. Odom responded that he was not personally obligated to make the payment under the express terms of the agreement, which provide that Securatech was to make the payment.
The trial court granted Southcross's motion and entered a final judgment against Securatech and Odom for $25,000, jointly and severally, attorney's fees, costs, and interest.
DISCUSSION
Odom contends that the payment provision of the settlement agreement unambiguously obligates Securatech alone to pay the $25,000 owed to Southcross. Thus, he contends that the trial court erred in assessing this obligation against him, individually. Southcross does not dispute that the settlement agreement is unambiguous. But it contends that the agreement unambiguously makes Odom jointly and severally liable for the $25,000 settlement amount because he signed it in both his individual and his managerial capacity.
A. Standard of review and applicable law
We review a summary judgment granting enforcement of a settlement agreement de novo. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). Summary judgment is proper if "there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law on the issues expressly set out in the motion or in an answer or any other response." TEX. R. CIV. P. 166a(c).
Mediated settlement agreements are enforceable as contracts. TEX. CIV. PRAC. & REM. CODE § 154.071(a). We interpret settlement agreements under ordinary contract interpretation principles. Sandt v. Energy Maint. Servs. Grp. I, 534 S.W.3d 626, 642 (Tex. App.—Houston [1st Dist.] 2017, pet. denied).
The interpretation of an unambiguous agreement presents a question of law, which we review de novo. Kachina Pipeline Co. v. Lillis, 471 S.W.3d 445, 449 (Tex. 2015). The parties' intent, as expressed in the language of their agreement, is controlling. Plains Expl. & Prod. Co. v. Torch Energy Advisors Inc., 473 S.W.3d 296, 305 (Tex. 2015). We consider the agreement's language as a whole, attempting to give effect to all of its provisions so that none are rendered meaningless. See Apache Deepwater v. McDaniel Partners, 485 S.W.3d 900, 906 (Tex. 2016). Thus, we read the agreement's words and phrases together and in context, not in isolation from one another. Hysaw v. Dawkins, 483 S.W.3d 1, 13 (Tex. 2016). Unless the agreement shows that the parties used a term in a technical or different sense, we give its provisions their plain, ordinary, and generally accepted meaning. Loya v. Loya, 526 S.W.3d 448, 451 (Tex. 2017). The parties may not rely on extrinsic evidence to prove some meaning other than what their agreement states. See First Bank v. Brumitt, 519 S.W.3d 95, 109-10 (Tex. 2017).
We may consider the circumstances surrounding the agreement's formation in ascertaining the common, ordinary meaning of its unambiguous language, but we cannot look to surrounding circumstances to add to, alter, or contradict the agreement's terms. Id. at 110. We cannot rewrite the parties' bargain in the guise of interpreting their agreement. Fischer v. CTMI, L.L.C., 479 S.W.3d 231, 239 (Tex. 2016); Gilbert Tex. Constr. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 126-27 (Tex. 2010).
B. Analysis
The mediated settlement agreement states that the settlement amount is $25,000, followed by a line entitled "Paid by who" and a blank in which "Securatech Solutions, Inc." is handwritten. Odom is not listed as a party obligated to pay the $25,000. In a separate paragraph, the parties release one another from any claims other than the performance of the terms of the agreement. Based on these unambiguous terms, we hold that the parties' agreement obligates Securatech to pay the settlement amount, not Odom. To hold Odom jointly and severally liable, as Southcross advocates, we would have to rewrite the agreement's payment provision to include Odom, when he is not included. See Fischer, 479 S.W.3d at 239; Gilbert Tex. Constr., 327 S.W.3d at 126-27.
Southcross does not cite any authority for the proposition that a party's signature on an agreement makes the party jointly and severally liable for performance of obligations expressly assumed by another signatory to the agreement. In this case, the payment provision expressly identifies one of two settling defendants as the payor of the $25,000.
We conclude that our sister court's analysis in Investin.com Corp. v. Europa Int'l, 293 S.W.3d 819 (Tex. App.—Dallas 2009, pet. denied), is persuasive here. In Europa, the plaintiff sued a company and its president. Id. at 821-23. The parties settled, and the president signed the settlement agreement on his own behalf and on behalf of the corporation, both of which were settling parties. Id. at 823. The plaintiff later filed a second suit alleging breach of the settlement agreement and obtained a judgment in its favor against both the company and its president. Id. at 822-24. On appeal, the president contended that he was not personally liable under the agreement because its payment terms provided that the settlement amount would be paid by the company. Id. at 825-26. The court of appeals agreed, rejecting the contention that the president's signature as a party to the agreement made him jointly and severally liable for payment when the terms expressly obligated only the company to pay the settlement amount. Id. at 826-29. As the court noted, the president ordinarily would not be liable for the company's debts, and the payment terms of the agreement referred to the company alone. Id. As in Europa, the terms in the settlement agreement here identify Securatech as the party obligated to pay the settlement.
Southcross maintains that we should disregard the agreement's "Paid by who: Securatech" line as immaterial. Payment terms, however, are essential or material terms of a settlement agreement. MKM Eng'rs v. Guzder, 476 S.W.3d 770, 778 (Tex. App.—Houston [14th Dist.] 2015, no pet.); Gen. Metal Fabricating Corp. v. Stergiou, 438 S.W.3d 737, 745 (Tex. App.—Houston [1st Dist.] 2014, no pet.).
Southcross further maintains Odom should be held personally liable because he was the wrongdoer who committed the torts giving rise to Southcross's suit. But the allegations underlying a settlement agreement cannot replace the express terms of the agreement. Cf. Europa, 293 S.W.3d at 828. Rather, the agreement's meaning is determined by its unambiguous language. See Plains Expl., 473 S.W.3d at 305. Southcross cannot leverage its disputed allegations into a basis for holding Odom personally liable for the settlement amount contrary to the agreement's payment provision when the settlement agreement provides that the parties "understood and agreed" that they were settling "a disputed claim," and that all liability is "expressly denied."
Southcross suggests that, unless Odom is jointly and severally liable for the settlement payment, the agreement would be illusory for lack of consideration. The agreement, however, included Odom's counterclaims against Southcross. Even if Odom was required to supply some independent consideration in exchange for release of Southcross's claims against him, he did so by releasing his own claims. See Markman v. Gaitz, 499 S.W.2d 692, 695 (Tex. Civ. App.—Houston [1st Dist.] 1973, writ ref'd n.r.e.) (mutual release of claims is itself sufficient consideration); see also Marx v. FDP, LP, 474 S.W.3d 368, 379 (Tex. App.—San Antonio 2015, pet. denied) (relinquishment of right to pursue disputed claims sufficed as consideration for mediated settlement agreement).
Finally, Southcross contends that Odom did not plead lack of capacity as a defense and therefore may not assert it on appeal. See TEX. R. CIV. P. 93(2) (pleading that "defendant is not liable in the capacity in which he is sued" must be verified by affidavit). Odom, however, does not claim that Southcross should have sued him in some other capacity; his defense is that he did not breach the settlement agreement because it does not obligate him to pay the $25,000. See Bartush-Schnitzius Foods Co. v. Cimco Refrigeration, 518 S.W.3d 432, 436 (Tex. 2017) (per curiam) (breach occurs when party does not do something it has promised by contract to do).
CONCLUSION
We reverse the trial court's judgment against Odom individually, render judgment that Southcross Security take nothing as to Odom, and affirm the remainder of the judgment of the trial court.
Jane Bland
Justice Panel consists of Justices Keyes, Bland, and Massengale.