Tony's Barbeque & Steakhouse, Inc. v. Three Points Investments, Ltd.
527 S.W.3d 686
Tex. App.2017Background
- Three Points (landowner) sued Tony’s Barbeque (Restaurant) in 2013 for trespass and unjust enrichment; the trial court set a November 9, 2015 amendment deadline.
- Parties executed a Rule 11 settlement after the deadline: insurer to pay $45,000 and Restaurant to purchase the lot with deed held in trust until full payment.
- Restaurant amended to assert claims enforcing the Rule 11 agreement after learning the deed-in-trust prevented title insurance; Three Points moved to strike as untimely and the court struck post-deadline pleadings.
- Trial proceeded on underlying claims; jury ruled for Three Points. Restaurant appealed.
- Restaurant then filed a separate suit to enforce the Rule 11 agreement; trial court dismissed that suit under Tex. R. Civ. P. 91a as barred by res judicata and awarded Three Points fees. Appeals were consolidated.
Issues
| Issue | Plaintiff's Argument (Restaurant) | Defendant's Argument (Three Points) | Held |
|---|---|---|---|
| Whether the trial court abused its discretion by striking Restaurant’s post-deadline amended pleading asserting Rule 11 claims | Amendment was timely to raise enforcement/defense to Three Points’ claims; Rule 11 dispute arose while trial court had jurisdiction so it should be litigated in that cause | Amendment was late and should be struck under the pleading-amendment deadline | Reversed: court abused discretion; amendment not prejudicial on its face and Mantas contemplates litigating settlement disputes in the original cause when possible |
| Whether the Rule 11 agreement was adjudicated or rejected by the trial court (mutual mistake/impossibility) | Trial court did not rule on enforceability; struck pleadings instead and thus did not decide merits | Argues bench statements reflect rejection for mutual mistake and final adjudication | Court: No ruling on merits in record; bench comments not findings; enforceability not adjudicated; presents nothing for review |
| Whether Restaurant’s separate suit to enforce Rule 11 was barred by res judicata | Filed separate suit because trial court refused to allow enforcement claims in original cause; Mantas permits separate action when original court will not entertain enforcement | Argues prior final judgment and trial court’s comments show Rule 11 invalid, so new suit is precluded | Reversed: Restaurant pleaded that underlying court ignored, not adjudicated, so res judicata dismissal under Rule 91a was erroneous |
| Whether Three Points was entitled to attorney’s fees in the separate suit under Rule 91a | Fees award improper because dismissal was in error | Fees appropriate because dismissal was with prejudice | Reversed: dismissal and fee award vacated; on remand Restaurant is prevailing party on motion and entitled to costs and reasonable fees per Rule 91a |
Key Cases Cited
- Mantas v. Fifth Court of Appeals, 925 S.W.2d 656 (Tex. 1996) (settlement-enforcement dispute should be raised in original cause if dispute arises while trial court has jurisdiction; if on appeal, bring separate action and abate appeal)
- Padilla v. LaFrance, 907 S.W.2d 454 (Tex. 1995) (action to enforce a settlement agreement must be based on proper pleading and proof)
- Mustang Pipeline Co., Inc. v. Driver Pipeline Co., 134 S.W.3d 195 (Tex. 2004) (material breach of contract excuses other party’s performance)
- City of Dallas v. Sanchez, 494 S.W.3d 722 (Tex. 2016) (Rule 91a dismissal depends solely on pleadings; review de novo)
- Amstadt v. U.S. Brass Corp., 919 S.W.2d 644 (Tex. 1996) (elements of res judicata)
- Centex Corp. v. Dalton, 840 S.W.2d 952 (Tex. 1992) (impossibility of condition precedent can prevent accrual of enforcement rights)
- Williams v. Glash, 789 S.W.2d 261 (Tex. 1990) (mutual mistake doctrine permits avoidance of agreement)