Derrick Scott and Tiffany Scott v. American Home Mortgage Servicing, Inc.
03-14-00322-CV
| Tex. App. | Dec 8, 2015Background
- Derrick and Tiffany Scott sued American Home Mortgage Servicing, Inc. over servicing of their home loan; trial was approaching.
- Parties reached a written Rule 11 settlement and filed a letter indicating the Scotts would non-suit with prejudice.
- The Scotts subsequently filed a non-suit without prejudice.
- American Home Mortgage moved to enforce the Rule 11 settlement and to have the dismissal changed to with prejudice.
- The trial court granted the Motion to Enforce and dismissed the Scotts’ claims with prejudice; Scotts appealed.
Issues
| Issue | Plaintiff's Argument (Scotts) | Defendant's Argument (AHMSI) | Held |
|---|---|---|---|
| Whether court lost jurisdiction to hear motion to enforce after plaintiff filed non-suit | Non-suit extinguished the case and divested the court of jurisdiction | Trial court retained plenary power to modify judgments within 30 days despite non-suit | Court had jurisdiction under its plenary power and could enforce settlement |
| Whether the Rule 11 agreement was unenforceable for omitting material terms (e.g., undefined "relevant parties" and later ancillary documents) | Agreement incomplete because it left "relevant parties" undefined and referenced later formal agreements with additional terms | Rule 11 recited essential terms (payment, loan modification, dismissal with prejudice, release) and undefined terms use plain meaning; ancillary documents were not essential to the Rule 11 agreement | Rule 11 contained essential terms and was enforceable; undefined term not fatal |
| Whether appellee had to file a separate breach-of-contract suit rather than a motion to enforce | Enforcement required a separate cause of action and standard pleading/proof | A motion to enforce filed while the trial court retained plenary power suffices as proper pleading and notice | Motion to Enforce satisfied pleading/proof requirements; separate suit not required while court had plenary jurisdiction |
| Remedy: Whether dismissal should be converted to with prejudice | Scotts argued dismissal without prejudice valid; sought to avoid enforcement | AHMSI sought conversion to with prejudice per settlement terms | Trial court properly converted dismissal to with prejudice and was affirmed |
Key Cases Cited
- University of Tex. Med. Branch at Galveston v. Estate of Blackmon ex rel. Schultz, 195 S.W.3d 98 (Tex. 2006) (non-suit generally extinguishes case from moment filed)
- Padilla v. LaFrance, 907 S.W.2d 454 (Tex. 1995) (Rule 11 settlement must be a written memorandum containing essential terms)
- Fortis Benefits v. Cantu, 234 S.W.3d 642 (Tex. 2007) (trial court has ministerial duty to enforce valid Rule 11 agreements)
- Ford Motor Co. v. Castillo, 279 S.W.3d 656 (Tex. 2009) (motion to enforce can suffice as pleading to support judgment for breach of contract)