Advanced Personal Care, LLC v. Jacquelyn Churchill, Everett Churchill and JED, Inc.
437 S.W.3d 41
Tex. App.2014Background
- This is a 2014 decision reversing and remanding a Houston-area case arising from a buyer's purchase of leased property and a breach of a settlement agreement.
- The settlement provided that, in exchange for releasing claims, the Sellers would sell the Property to the Buyer for $170,000 and the Buyer would receive funds deposited in court from prior litigation.
- Two documents—Full and Final Mutual Compromise and Release (Release) and Real Estate Sales Contract—were executed with the same effective date, and were intended to be read together as part of a single settlement.
- The Sales Contract limited remedies for Buyer default before closing to termination, recovery of out-of-pocket expenses, reopening discovery, and proceeding on the original claims; the Buyer could seek specific performance if the Seller defaulted.
- After the Buyer allegedly breached, the trial court found the Buyer breached and enforced the Release while declining to enforce the Property sale, and the final judgment awarded the Sellers attorney’s fees but nothing to the Buyer.
- On appeal, the Buyer contends the Settlement Agreement is indivisible and that the Sellers elected to treat the agreement as continuing or terminated; the court reverses and remands to resolve the Sellers' election.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the Release and Sales Contract a single Settlement Agreement? | Buyer argues they form one instrument. | Sellers contend they are separate agreements. | They are a single Settlement Agreement. |
| Did the Sellers elect to keep the Settlement Agreement alive or terminate it after Buyer’s breach? | Buyer asserts Sellers elected to continue the Settlement Agreement. | Sellers elected termination or continuation based on contract terms. | Election of remedies requires proving Sellers’ election; record is not conclusive on election. |
| Did the trial court err by failing to address the Sellers' election of remedies? | Because the contract is indivisible, breach should trigger the relevant election and potential specific performance. | The trial court did not resolve the election question. | Remand to determine the Sellers’ election is required. |
Key Cases Cited
- Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171 (Tex. 1997) (contracts and releases in settlement agreements construed together when part of a single transaction)
- Giles v. Corbett, 293 S.W.2d 180 (Tex. Civ. App.—Galveston 1927) (check and letter in exchange for a release read as one instrument)
- Mustang Pipeline Co. v. Driver Pipeline Co., 134 S.W.3d 195 (Tex. 2004) (breach and waiver of performance; continued performance can waive breach as to non-defaulting party)
- Long Trusts v. Griffin, 222 S.W.3d 412 (Tex. 2006) (per curiam election of remedies—continuation can waive breach)
- Hanks v. GAB Bus. Servs., Inc., 644 S.W.2d 707 (Tex. 1982) (election of remedies and effect of continuing performance after breach)
- Jones v. Smith, 291 S.W.3d 549 (Tex. App.—Houston [14th Dist.] 2009) (omitted findings and reversal/remand when trial court erred in law and factual questions)
- Henry v. Masson, 333 S.W.3d 825 (Tex. App.—Houston [1st Dist.] 2010) (continued insistence on performance can keep contract in force; breach not excused)