474 S.W.3d 368
Tex. App.2015Background
- Robert and Debbie Marx (sellers) and FDP, LP (buyer) entered a January 2012 Farm and Ranch Contract for roughly 500 acres with a Seller Financing Addendum (purchase price $1,875,000; $300,000 cash; $1,575,000 seller note).
- The Marxes refused to close; FDP sued for specific performance. Parties mediated and executed a mediated settlement agreement (MSA) on August 27, 2013, altering the sale to ~421 acres at $5,000/acre and providing FDP an exclusive option to buy a Homestead tract (≤100 acres) while the Marxes would retain the homestead up to eight years.
- The MSA was filed as a Rule 11 agreement; disputes arose over whether the MSA altered financing terms from the original Seller Financing Addendum and whether essential terms were indefinite or ambiguous.
- The trial court ordered arbitration to fix the identities/surveys of the 421-acre and 100-acre tracts; arbitration produced metes-and-bounds and the trial court confirmed the award and assessed fees against the Marxes.
- FDP moved for traditional summary judgment seeking specific performance based on the Farm and Ranch Contract, the MSA, and the arbitration confirmation; the trial court granted final judgment requiring FDP to pay $300,000 cash and a promissory note for the balance and awarded attorney’s fees.
- On appeal the Marxes argued (1) they rescinded consent to the MSA, (2) the MSA lacked a meeting of the minds/was indefinite as to financing, (3) FDP’s summary-judgment motion failed to negate their affirmative defenses, and (4) the Homestead option lacked independent consideration.
Issues
| Issue | Plaintiff's Argument (Marx) | Defendant's Argument (FDP) | Held |
|---|---|---|---|
| Was the MSA unenforceable because appellants withdrew consent? | Marxes: they rescinded consent to the MSA, so judgment based on it is improper. | FDP: MSA was valid, filed as Rule 11; Marxes failed to preserve argument about judgment after withdrawal. | Court declined to address withdrawn-consent complaint because Marxes did not brief it properly; issue not preserved. |
| Was the MSA indefinite (no meeting of the minds) because financing terms were not fixed? | Marxes: MSA changed price but did not amend Seller Financing Addendum, leaving financing method and essential terms indefinite. | FDP: Marxes waived indefiniteness by arguing ambiguity at trial; contract is enforceable. | Court held Marxes waived indefiniteness issue on appeal (they raised ambiguity below); summary judgment proper as to meeting-of-minds argument. |
| Did FDP have to negate Marxes’ affirmative defenses in its traditional summary-judgment motion? | Marxes: trial court erred because FDP did not move against affirmative defenses and they remained undetermined. | FDP: plaintiff need only conclusively prove its claim; defendant must produce evidence raising fact issues on affirmative defenses. | Court held plaintiff not required to negate affirmative defenses; Marxes offered no summary-evidence on defenses, so judgment was proper. |
| Was the Homestead purchase option unenforceable for lack of independent consideration? | Marxes: the option required separate consideration and none was provided. | FDP: single consideration (the parties’ mutual release/settlement and deposit of earnest money) supports multiple promises; separate consideration unnecessary. | Court held the parties’ mutual release (and earnest-money deposit under contract) constituted sufficient consideration for the option; option enforceable. |
Key Cases Cited
- Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546 (Tex. 1985) (summary-judgment standard)
- Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844 (Tex. 2009) (appellate review of summary-judgment evidence favors nonmovant)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (standards for reviewing factual sufficiency and evidence)
- DiGiuseppe v. Lawler, 269 S.W.3d 588 (Tex. 2008) (specific performance requires continuous readiness, willingness, and ability to perform)
- Brownlee v. Brownlee, 665 S.W.2d 111 (Tex. 1984) (plaintiff is not required in summary judgment to negate defendant’s affirmative defenses)
- J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) (ambiguity resolved by factfinder; contract not ambiguous simply because parties disagree)
- Padilla v. LaFrance, 907 S.W.2d 454 (Tex. 1995) (material terms missing renders contract indefinite and unenforceable)
- Clear Creek Basin Auth. v. City of Houston, 589 S.W.2d 671 (Tex. 1979) (appellate waiver and preservation rules for summary-judgment grounds)
- Garza v. Villarreal, 345 S.W.3d 473 (Tex. App.—San Antonio 2011) (release/compromise of claims is valid consideration)