LEE ANN DAUPHINOT, Justice.
This appeal arises from a breach of contract claim against the insurance carriers
In a suit brought by Cunningham against Dr. Noble Ezukanma, Dr. Ladi Haroona, their employer HealthFirst Medical Group, P.A., and others for medical malpractice, the trial court rendered judgment against Ezukanma and HealthFirst, jointly and severally, in the amount of $1,041,944.80. The trial court rendered a take-nothing judgment on Cunningham's claim against Haroona. Ezukanma and HealthFirst appealed the judgment against them, and Cunningham appealed the take-nothing judgment for Haroona. JUA, the malpractice insurance carrier for Ezukanma, deposited policy proceeds in the amount of $236,115.66 into the registry of the court on Ezukanma's behalf in lieu of a supersedeas bond.
The trial court ordered the parties to attend post-judgment mediation, and before, during, and after mediation and while the case was pending on appeal, Cunningham, Ezukanma, and HealthFirst engaged in negotiations for a possible settlement. JUA and Zurich, the insurance carrier for HealthFirst, were also involved in the settlement negotiations. Zurich was represented by Laura Grabouski. Stephen Johnson represented Haroona, Mike Sheehan represented HealthFirst, Kevin Carey represented Ezukanma, and John Wilson represented JUA. The parties would later dispute whether Carey also represented JUA.
Cunningham's attorney, Katherine Youngblood, made a "take-it-or-leave-it" demand to Ezukanma and HealthFirst. The demand, which Youngblood said would expire at noon on May 23, 2008, was for $650,000 from Zurich plus the funds that JUA had deposited into the trial court's registry. In exchange, Cunningham would sign a release of at least some of his claims; the parties later disagreed about whether they had intended for Haroona to be included in the release.
On the date of the deadline, Grabouski sent Youngblood an email at 10:29 a.m. that stated:
Cunningham filed suit against Zurich and JUA for breach of contract in Dallas County. In October 2008, on Zurich and JUA's motion, the Dallas trial court transferred that suit to Tarrant County under civil practice and remedies code section 15.002(b).
While the breach of contract action was pending, Cunningham, Ezukanma, and HealthFirst entered into a confidential settlement agreement regarding the judgment in the malpractice suit. Accordingly, in December 2008, Ezukanma, Health-First, and Cunningham filed an agreed motion for partial nonsuit in the breach of contract suit, seeking dismissal of all claims "seeking enforcement and collection of the [j]udgment which have been or which could have been asserted by [Cunningham] against any other party to this suit," including a claim seeking the full amount of the judgment from the malpractice action. The motion expressly states that the parties did not address Cunningham's breach of contract claim based on the alleged settlement agreement. The trial court signed an order of partial nonsuit in accordance with the motion. Cunningham, Ezukanma, and HealthFirst also filed in this court an agreed motion to dismiss Ezukanma's and HealthFirst's appeals in the malpractice suit, which this court granted.
In the breach of contract action, Zurich, JUA, and Cunningham all filed motions for summary judgment. Zurich's motion for summary judgment asserted, among other grounds, that Grabouski's May 23, 2008 email was a mere offer that was withdrawn prior to acceptance; that the email did not meet the requirements of Rule 11 of the rules of civil procedure and was therefore not an enforceable settlement agreement; and that the email was not signed, prohibiting enforcement under Rule 11.
JUA's motion for summary judgment adopted by reference Zurich's motion and also asserted that JUA never entered into a valid contract with Cunningham because the email from Grabouski did not bind JUA; that there was no offer, acceptance, or meeting of the minds between Cunningham and JUA; and that the email did not satisfy Rule 11.
Cunningham argued in his motion that the email constituted an acceptance of the material terms necessary to constitute a valid contract. The trial court denied Cunningham's motion and granted Zurich's and JUA's motions. Cunningham now appeals.
We review a summary judgment de novo.
When both parties move for summary judgment and the trial court grants one motion and denies the other, the reviewing court should review both parties' summary judgment evidence and determine all questions presented.
In his first issue, Cunningham argues that the trial court erred by granting summary judgment for Zurich. When, as here, the trial court grants a summary judgment but does not specify the ground relied on for its ruling, we must affirm the judgment if any of the theories advanced by the movant have merit.
Cunningham argues that the trial court erred if it granted summary judgment based on Rule 11. He contends that Rule
Rule 11 of the Texas Rules of Civil Procedure states, "Unless otherwise provided in these rules, no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record."
In Kennedy v. Hyde, the Supreme Court of Texas held that Rule 11 is applicable to settlement agreements.
The Kennedy court noted "the wisdom of the rule," remarking that "[a]greements of counsel in the course of a judicial proceeding which affect the interests of their clients should not be left to the fallibility of human recollection."
Rule 11 does not specify that it applies only to suits pending only in the trial court.
At least one other court of appeals has reached a similar conclusion. In Coale v. Scott, the parties' dispute over an easement resulted in a judgment for the Scotts.
Although our sister court's holding determined whether any settlement touching an enforcement proceeding would fall within the phrase "suit pending" as used in Rule 11, a different scenario from this case, it disagrees with Cunningham's assertion that the applicability of Rule 11 depends on whether the trial court has plenary power over the judgment giving rise to the settlement agreement. In the case before us, the underlying medical malpractice case was on appeal, which means that it had not been finally disposed of. And unless that judgment was reversed on appeal, the trial court continued to have authority to enforce it;
Cunningham points to Guidry
As Cunningham points out, an exception to the writing requirement may arise when the parties to an oral agreement do not dispute the existence or the terms of the agreement.
Cunningham also points out that an agreement that does not conform with Rule 11 may nevertheless be enforced on equitable grounds such as fraud or mistake.
Cunningham argues in his reply brief that requiring compliance with Rule 11 would give Zurich an unfair advantage because he would be denied payment after releases had been given. But that is not what happened here. Grabouski sent the email on which Cunningham relies on May 23, 2008, and within a week, it was apparent that Youngblood and Grabouski disagreed about whether they had a final settlement agreement. Based on his belief that Cunningham, Zurich, and JUA had reached an agreement that Zurich and JUA were refusing to honor, Cunningham filed this action against them for breach of contract; although the record does not reveal when the suit was originally filed, Zurich filed a motion to transfer venue and motion to dismiss on June 30, 2008, indicating that Cunningham filed suit shortly after the dispute over the email arose. Cunningham did not release Ezukanma and HealthFirst until those three parties reached a later settlement agreement that all three parties agree exists, and the terms of which none of the three disputes, which was entered into after Cunningham had already filed the breach of contract suit against JUA and Zurich. Zurich thus did not make false promises or representations about payment in order to gain releases for Ezukanma and HealthFirst, and then, once those releases were obtained, refuse to pay on the ground that the parties did not have a signed agreement. Cunningham does not point out any other unfair advantage that Zurich gained by the application of Rule 11. We therefore cannot say that requiring compliance with Rule 11 resulted in an unfair advantage to Zurich.
Citing Masi v. Scheel,
In its second amended answer, which was verified, Zurich denied that the email was a binding agreement and asserted a counterclaim for a declaratory judgment that the email did not form a valid and enforceable contract and that Rule 11 prohibited its enforcement as a settlement agreement. And in its response to Cunningham's motion for summary judgment, Zurich argued that the email was not an enforceable Rule 11 agreement.
Next, Cunningham contends that Rule 11 does not apply to undisputed agreements and that although Zurich disputed the legal effect of the email, it did not dispute the fact or terms of the agreement.
We next determine whether Zurich produced sufficient evidence to establish that no Rule 11 agreement with Cunningham existed, and if it did do so, whether Cunningham produced evidence in the trial court sufficient to raise a fact issue about whether he had an agreement with Zurich that satisfied Rule 11.
Zurich pointed out in its summary judgment motion that Cunningham's breach of contract claim as pled was based on oral communications and on Grabouski's email. Zurich then asserted that the email was not a binding and enforceable Rule 11 agreement because it left "material matters open for future adjustment." Zurich also argued that Cunningham had attempted to change the terms of the agreement because when Youngblood signed the proposed Rule 11 agreement sent by Grabouski
In her email, however, Grabouski restated the offer made by Cunningham to HealthFirst and Ezukanma and their respective insurance carriers and acknowledged that the offer contained a promise of release by Cunningham in return for the payment of $650,000 from Zurich and money in the court registry from JUA. Grabouski then indicated Zurich's agreement to those terms on behalf of HealthFirst and Ezukanma. She did not mention Haroona at all, either when she confirmed her understanding of the terms of Cunningham's offer or when she accepted those terms for Zurich "on behalf of HealthFirst and [Ezukanma]." Because the email contained an agreement to pay in exchange for release of liability, it contained the essential terms of a settlement agreement, and Haroona was plainly not included.
But Rule 11 also required a signed writing,
With the statutory requirements in mind, we consider whether Grabouski's
There is nothing to show that the signature block was typed by Grabouski and not generated automatically by her email client.
Cunningham argues that the trial court erred by overruling his special exceptions to Zurich's motion for summary judgment. Cunningham excepted to Zurich's motion as failing to state specific grounds for summary judgment. But Zurich clearly asserted that it was entitled to judgment as a matter of law because any settlement agreement had to comply with Rule 11 and that the email did not comply with the rule because, among other reasons, it was unsigned. Because we may affirm the summary judgment on this single ground that Zurich clearly asserted, any error by the trial court in overruling Cunningham's special exceptions was harmless.
In Cunningham's second issue, he argues that the trial court erred by denying his motion for summary judgment against Zurich. Because we have held that the trial court did not err by granting summary judgment for Zurich, we overrule this issue.
In his third issue, Cunningham argues that the trial court erred by granting summary judgment for JUA.
Cunningham first argues under this issue that the trial court should have granted his motion for continuance. He asserts that he did not receive the minimum twenty-one days' notice of JUA's second motion for summary judgment and hearing. He claims that he received notice on March 2, 2009, when Youngblood's postal worker notified her that she had a package on the front porch of her home, where she also has her office. The package contained JUA's motion and notice of the hearing set for eighteen days later on March 20, 2009. Cunningham filed a motion for continuance based on inadequate notice, which the trial court denied.
In response JUA argues that the package was delivered to Youngblood's house on February 27, 2009. JUA also argues that leaving the documents on her doorstep was a proper method of service, citing O'Connor's Texas Rules in support of this assertion. As JUA's counsel is aware, O'Connor's does not carry the force of law.
However, even if JUA's method of service was insufficient, a holding we do not need to make here, before this court may reverse the summary judgment on such grounds, Cunningham must show on appeal that he was harmed.
As one of its asserted grounds for summary judgment, JUA argued that it had never entered into a valid contract with Cunningham. Like Zurich, JUA did not specify in its motion whether it sought traditional or no-evidence summary judgment and did not reference which subsection of the summary judgment rule it relied on. But because JUA attached evidence to its motion and did not point out specifically which elements of his claim for which Cunningham had no evidence, JUA appeared to move for traditional summary judgment, not no-evidence summary judgment. JUA therefore took upon itself the burden of proving the non-existence of a contract.
In support of its motion, JUA argued that in Cunningham's petition, the only writing on which he based his contract claim was Grabouski's email and that this email did not satisfy the requirements of Rule 11.
JUA directed the trial court to Youngblood's deposition, in which she stated that the only signed writing that she had with respect to an agreement with JUA was the email. JUA also pointed out the portion of Youngblood's deposition testimony in which she stated that she had not accepted any offer from JUA for Cunningham prior to the email on the ground that she would not accept it without also having an agreement with Zurich, because she "wasn't going to settle for $200,000 a million-dollar judgment." In his response, Cunningham argued that he had entered into a valid oral agreement with JUA through Carey, its negotiating agent, and that this agreement was confirmed via Grabouski's email, which itself was orally confirmed and ratified by Carey.
On appeal, Cunningham argues that JUA did not meet its burden to prove that no contract existed and that the trial court erred if it granted summary judgment on this ground. Cunningham argues that he had an oral agreement with JUA through Carey, that Rule 11 does not apply to prevent its enforcement, and that if Rule 11 does apply, the email satisfies its requirements.
As with his agreement with Zurich, any settlement agreement between Cunningham and JUA had to be in writing and signed, as required by Rule 11. Cunningham argues that JUA waived Rule 11's applicability because it did not plead it and that JUA did not amend its answer to
As to Cunningham's Rule 54 argument,
With its motion, JUA attached the affidavit of Sally Stewart, a JUA claims manager. In the affidavit, Stewart stated that neither Grabouski nor Carey represented JUA or had the authority to negotiate a settlement for JUA. Cunningham objected in the trial court to Stewart's affidavit on the grounds that Stewart was not timely or properly disclosed as a witness and that the affidavit was conclusory
Cunningham now argues that the trial court erred by overruling his objections to Stewart's affidavit because it is conclusory and not based on personal knowledge. We agree with Cunningham that the trial court should have excluded Stewart's affidavit on the ground that it was not based on personal knowledge. In her affidavit, Stewart stated that she is the claim manager for JUA and that she has personal knowledge of the facts stated in her affidavit. She then states that although Cunningham claims to have a contract with JUA based on Grabouski's email, Grabouski is not JUA's attorney, is not an agent of JUA, and was not given authority by JUA to act on its behalf. She then states that JUA did not send Grabouski's email and did not approve or ratify it, that JUA did not enter into a contract with Cunningham prior to October 2008, and that JUA had no verbal settlement agreement with Cunningham prior to October 2008.
Nothing in Stewart's affidavit shows a basis for her to have personal knowledge of whether JUA has hired a particular attorney, whether JUA has given an attorney authority to act on its behalf, whether JUA had approved or ratified Grabouski's email, or whether JUA's attorneys were engaged in settlement negotiations with Cunningham. She asserted that she is a claims manager, but she does not aver what her job entails or give any indication of how the job gives her personal knowledge of the facts she asserts. She did not state, for example, that her job required her to be involved in every stage of the claims process, including all settlement negotiations and all communications by JUA attorneys with other parties. That she works on claims filed with JUA is not enough to show personal knowledge of the kinds of facts she asserted in her affidavit.
JUA presented no other evidence that Carey and Grabouski were not authorized to negotiate a settlement with Cunningham on behalf of JUA. That it presented no testimony from Carey or JUA's attorney Wilson, two individuals with personal knowledge of the representations that they had made to Youngblood, is striking to say the least. And we note that in JUA's answers to Cunningham's interrogatories, when asked if Carey had authority to negotiate on behalf of JUA, it objected and would only answer that the email did not reference any negotiations by Carey regarding the JUA funds in the court's registry. But despite JUA's failure to produce competent evidence on this point, the trial court had before it evidence that was sufficient to negate the existence of an agreement satisfying Rule 11.
In her deposition, Youngblood acknowledged that the only signed writing she had evidencing a contract was the email. But as we have already held, the email was not signed. Furthermore, nothing in the email text indicates JUA's acceptance of Cunningham's offer, only the acceptance of HealthFirst and Ezukanma. Thus, even if Grabouski had the authority to negotiate for JUA and bind it to an agreement reached in negotiations, this email does not indicate that Grabouski was agreeing to any terms on behalf of JUA. Because this email does not meet the requirements of Rule 11 with respect to JUA and because JUA produced summary judgment evidence showing that Cunningham had no other writing evidencing JUA's agreement that satisfied Rule 11,
Cunningham next argues that the trial court erred by overruling his special exceptions. Cunningham did not specially except to the part of JUA's motion in which it asserted as a ground for summary judgment that the email was not an enforceable Rule 11 agreement. Accordingly, if the trial court erred by overruling Cunningham's special exceptions, any such error was harmless.
In his fourth issue, Cunningham argues that the trial court erred by denying his motion for summary judgment on his claim against JUA. Having determined that the trial court did not err by granting summary judgment for JUA on Cunningham's claim, we overrule this issue.
In his fifth issue, Cunningham argues that the Dallas County district court erred by transferring this case to Tarrant County, where venue was lacking, based on "convenience of the parties." He points out that section 15.002(b) of the civil practice and remedies code allows transfer of venue for convenience of the parties when the trial court makes three specified findings.
The statute itself and the Supreme Court of Texas's opinion in Garza v. Garcia
The statute states that an order granting a transfer for convenience of the parties is not reviewable, and it does not condition its application on whether the trial court made the findings required under subsection (b) or whether the order was supported by evidence.
Having overruled all of Cunningham's issues, we affirm the trial court's judgment.