MIKOB PROPERTIES, INC., Allan Klein, and Mitchell Kobernick, Appellants v. David JOACHIM and International Realty Concepts, Inc., Appellees
468 S.W.3d 587
| Tex. App. | 2015Background
- Parties: K&K (Mikob Properties, Allan Klein, Mitchell Kobernick) and IRC Group (David Joachim, International Realty Concepts). Disputes arose from multiple related lawsuits: Brokerage Litigation, Libel Litigation, and the separate Hilcom Suit.
- In August 2009 the parties, represented by counsel, executed a settlement agreement and mutual releases that expressly referenced terminating the Brokerage and Libel Litigations; the Hilcom Suit was not mentioned although K&K had already been served in it.
- Release language in the settlement unambiguously confined the release to claims “in the Brokerage Litigation and the Libel Litigation” and claims “arising from” or “related in any way to” those two cases.
- K&K later sued IRC, alleging breach of the settlement (for continuing the Hilcom Suit), fraud, and related claims; IRC counterclaimed and sought declaratory relief and fees.
- The trial court held the release did not cover the Hilcom Suit, granted IRC a directed verdict on K&K’s claims (finding no justifiable reliance for fraud), and awarded IRC $15,000 in attorney’s fees under the Declaratory Judgments Act. The court of appeals affirmed.
Issues
| Issue | Plaintiff's Argument (K&K) | Defendant's Argument (IRC) | Held |
|---|---|---|---|
| Scope of release — whether settlement released Hilcom Suit | Release language is broad and includes “suits” and “claims,” so Hilcom Suit was released | Release expressly and repeatedly limited to Brokerage and Libel Litigations; Hilcom not mentioned | Court: Release unambiguous — does not cover Hilcom Suit; judgment affirmed |
| Breach of contract based on other settlement paragraphs (3–7) | Those paragraphs resolved Hilcom issues and thus IRC breached by continuing Hilcom Suit | K&K did not plead or preserve this theory at trial; agreement doesn’t require dismissal of Hilcom | Court: Argument forfeited (not raised below); no breach shown |
| Fraud (justifiable reliance) | Joachim orally represented that settlement covered Hilcom and would cause Hilcom to be dismissed; K&K relied | Parties negotiated at arm’s length, were represented by counsel, and the written agreement controls; reliance unreasonable | Court: No legally sufficient evidence of justifiable reliance; directed verdict proper |
| Attorney’s fees under Declaratory Judgment Act | MBM Financial bars obtaining declaratory fees to circumvent fee limits on contract claims | Declaratory statute authorizes fees to either party where equitable and just; IRC prevailed on UDJA claim; trial court did not abuse discretion in awarding limited fees | Court: Fee award of $15,000 was equitable and supported; affirmed |
Key Cases Cited
- Italian Cowboy Partners, Ltd. v. Prudential Ins. Co., 341 S.W.3d 323 (Tex. 2011) (contract interpretation governed by parties’ intent as expressed in writing)
- Frost Nat’l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310 (Tex. 2005) (if contract gives definite legal meaning, court construes it as a matter of law)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (legal-sufficiency standard for directed verdict/JNOV review)
- Grant Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913 (Tex. 2010) (fraud requires actual and justifiable reliance; red flags can defeat reliance)
- MBM Financial Corp. v. Woodlands Op. Co., 292 S.W.3d 600 (Tex. 2009) (limits on recovering declaratory-judgment fees when declaratory claim merely duplicates other claims)
- Bocquet v. Herring, 972 S.W.2d 19 (Tex. 1998) (standards for awarding reasonable and necessary attorney’s fees under equitable doctrines)