Anthony L. McCalla and Cheryl A. McCalla v. Baker's Campground, Inc. Kelli Graves and Kourtnie Graves
56 Tex. Sup. Ct. J. 965
Tex.2013Background
- Supreme Court of Texas decides if a settlement containing all terms necessary for enforcement is enforceable as a contract despite terms suggesting a future contract.
- Parties: McCallas (petitioners) and Baker’s Campground, Inc. and Kelli and Kourtnie Graves (respondents) as successors to land.
- Baker leased land to Davises during litigation; McCallas sought to exercise option to buy the 380 acres.
- Settlement released claims and set purchase of the 380 acres for $470,000 conditioned on the Davises’ lease being void as a matter of law with a 60-day closing window.
- Handwritten terms added to the signed settlement—“I will agree to $470,000 purchase price above” and “I agree to enter an agreement as discussed above.”
- Court of Appeals held the agreement ambiguous (present binding contract vs. agreement to enter future contract) and reversed on enforceability; Texas Supreme Court reverses.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the settlement contains all material terms to be enforceable now. | McCallas: contains all material terms. | Baker's Campground: terms incomplete or future-oriented. | Yes; enforceable contract. |
| Do handwritten terms create ambiguity about present enforceability? | Handwritten additions show binding terms. | Ambiguity remains about immediate binding status. | Not ambiguous; contract enforceable. |
| Whether any breach/defenses require remand for proper adjudication. | Breach/defenses must be determined with full record. | Issues not properly adjudicated; remand warranted. | Remanded to trial court for consistent proceedings. |
Key Cases Cited
- Fort Worth Ind. Sch. Dist. v. City of Fort Worth, 22 S.W.3d 831 (Tex. 2000) (agreement to enter future contract may be enforceable if all material terms exist)
- Radford v. McNeny, 104 S.W.2d 472 (Tex. 1937) (enforceability of agreements to enter into future contracts with all material terms)
- T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218 (Tex. 1992) (material terms determine enforceability on a case-by-case basis)
- Ski River Dev., Inc. v. McCalla, 167 S.W.3d 121 (Tex. App.—Waco 2005) (court of appeals glancing at ambiguity; related to settlement context)