Opinion
No. 14-05-00115-CV
Memorandum Opinion filed May 4, 2006.
On Appeal from the 61st District Court, Harris County, Texas, Trial Court Cause No. 2003-16018.
Affirmed as Modified.
Panel consists of Chief Justice HEDGES and Justices YATES and ANDERSON.
MEMORANDUM OPINION
Appellant P S Corporation ("P S") appeals the granting of a summary judgment in favor of Hal Il Park individually and d/b/a Dong-A Video and d/b/a Middle South of America Video Association ("appellees"). In thirteen points of error, P S argues, inter alia, that (1) the alleged settlement agreement between the parties is unenforceable; (2) the trial court's judgment is defective; (3) the trial court erred in refusing to conduct a trial on the terms of the alleged settlement agreement; (4) the alleged settlement agreement is ambiguous, was a counteroffer, and only partially addresses P S's claims; and (5) the trial court erred in awarding attorney's fees to Park. We modify the judgment to delete the language dismissing P S's claims and affirm the judgment as modified.
Background
P S distributes videos of South Korean television programs to various rental stores in Texas. Han Il Park is the owner of Dong-A Video, a store that rents videos distributed by P S. Park also controls Middle South of America Video Association, one of P S's competitors. According to P S, Park published notices in several Korean-American newspapers, accusing P S of unfair and fraudulent business practices. P S also claims that Park met with the corporate officers of Korean Television Entertainment (KTE) to obtain distribution rights, even though P S already had an exclusive contract with KTE.
P S sued Park in his individual and professional capacities, alleging price fixing, tortious interference with contract, and defamation. In August of 2004, Park entered into a purported settlement agreement with P S, allegedly negotiated by Kwang Bok Chae, who is the father-in-law P S's owner. According to Park, the agreement required Park to issue a public apology, and in exchange, P S would dismiss the pending lawsuit. Park drafted an apology statement, and P S published it in Korean newspapers shortly thereafter.
Procedural History
After Park's apology was published, P S demanded a partial reimbursement of attorney's fees in the amount of $20,000. According to P S, Park responded that if P S did not dismiss its lawsuit pursuant to the settlement agreement, he would hold Chae responsible for breach of contract.
In a fax dated September 8, 2004, P S asserted that Park's apology constituted an admission of fault and urged Park to withdraw a prior motion for no-evidence summary judgment. On September 10, P S filed its own motion for partial summary judgment, alleging that Park's apology constituted an admission of fault that conclusively proved all of P S's claims. On September 13, Park filed the following documents: (1) Defendant's Third Amended Answer and Counterclaims, alleging breach of the settlement agreement and requesting attorney's fees; (2) Defendants/Plaintiffs' Motion for Summary Judgment and Motion to Dismiss Plaintiff's Cause of Action; and (3) Defendants/Plaintiffs' Motion for Sanctions.
On September 24, P S filed Plaintiff's Response to Motion for Final Summary Judgment and Motion for Sanctions. On October 1, Park filed (1) Defendants/Counter-Plaintiffs' Motion for Leave to File Response to Plaintiff's Motion for Partial Summary Judgment and (2) Defendants/Counter-Plaintiffs' Response to Plaintiff's Motion for Partial Summary Judgment.
The trial court denied P S's motion for partial summary judgment on October 15, 2004. The same day, the trial court granted Park's motion for summary judgment and motion to dismiss. The trial court awarded $17,500 in attorney's fees as damages, apparently based on the affidavit of Park's attorney. On October 19, P S filed a Motion for Reconsideration of Defendant's Motion for Summary Judgment and Motion to Dismiss on Attorney's Fees. Park then filed an objection and response, alleging a revised sum of attorney's fees in the amount of $6,125, calculated from the date of the purported settlement agreement.
The trial court signed the final judgment on November 10, denying P S's motion for reconsideration and awarding Park $6,125 in attorney's fees. P S filed a motion for new trial on November 16 and a supplemental motion for new trial on December 10. The trial court denied P S's motion for new trial on January 14, 2005, and P S filed notice of appeal on January 28.
Standard of Review
In a traditional motion for summary judgment, the movant has the burden to show that no genuine issue of material fact exists and that the movant is entitled to judgment as a matter of law. Tex. R. Civ. P. 166a(c); KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex. 1999). In reviewing a grant of summary judgment, we take as true all evidence favorable to the nonmovant and make all reasonable inferences in the nonmovant's favor. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 549 (Tex. 1985). A defendant, as movant, is entitled to summary judgment if it (1) disproves at least one element of the plaintiff's theory of recovery; or (2) pleads and conclusively establishes each essential element of an affirmative defense, thereby rebutting the plaintiff's cause of action. Am. Tobacco Co. Inc., v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). An element is conclusively proved if ordinary minds could not differ as to the conclusion to be drawn from the evidence. Triton Oil Gas Corp. v. Marine Contractors Supply Inc., 644 S.W.2d 443, 446 (Tex. 1982).
The nonmovant does not have a burden to respond to a motion for summary judgment unless a movant establishes its right to judgment as a matter of law. Casso v. Brand, 776 S.W.2d 551, 556 (Tex. 1989). If the movant meets its burden, it is incumbent upon the nonmovant to respond to the movant's evidence and to present contrary evidence sufficient to create a fact issue, or else risk an adverse ruling. Westland Oil Dev. Corp. v. Gulf Oil Corp., 637 S.W.2d 903, 907 (Tex. 1982). When, as here, a trial court's order granting summary judgment does not specify the grounds relied upon, we must affirm summary judgment if any of the summary judgment grounds is meritorious. Oliphint v. Richards, 167 S.W.3d 513, 515-16 (Tex.App.-Houston [14th] 2005, pet. denied).
Enforceability of the Purported Settlement Agreement
In its first and ninth points of error, P S disputes the enforceability of the alleged settlement agreement. We find the settlement agreement to be enforceable.
In its first point of error, P S argues that the agreement is unenforceable because it was not filed in compliance with Rule 11 of the Texas Rules of Civil Procedure. Rule 11 provides that "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 as of record." TEX. R. CIV. P. 11. Rule 11 does not require the writing to be filed before consent is withdrawn by one of the parties, but it does require the agreement to be filed before anyone seeks to enforce it. Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995). A settlement agreement attached as an exhibit to a motion for summary judgment satisfies this filing requirement. Jones v. Am. Motorists Ins. Co., 769 S.W.2d 617, 618-19 (Tex.App.-Houston [14th] 1989, no writ). In the instant case, P S alleges that appellees did not file the settlement agreement; however, appellees attached a copy of the settlement agreement as an exhibit to their motion for summary judgment. Accordingly, we hold that the settlement agreement satisfied the requirements of Rule 11.
In its brief, P S argues that "nothing in the appellate records show that the alleged settlement agreement is on file." It is true that the record initially received by this court did not contain the settlement agreement; in fact, the record did not contain the motion for summary judgment that forms the basis of this appeal, nor did it include several other highly relevant documents. However, the appellant is responsible for ordering the appellate record; therefore, P S cannot attempt to benefit from its own failure to procure such documents. See Tex.R.App.P. 37.3(b) (stating that an appellate court may dismiss the appeal if the appellant fails to pay or make arrangements to pay the clerk's fee for preparing the clerk's record). Upon ordering the remainder of the record, this court discovered that appellees had indeed attached the settlement agreement to their motion for summary judgment. See TEX. R. APP. P. 34.5(c)(1), (c)(3) (providing that an appellate court may request relevant items that have been omitted from the clerk's record, and those items will be part of the appellate record).
In its first point of error, P S also argues that the settlement agreement is unenforceable because it lacks all the essential terms. In its entirety, the purported settlement agreement attached to appellees' motion for summary judgment provides:
Middle South of America Video Association and PS Mr. Kwang Bok Chae's settlement agreement is as follows:
1. P S (Mr. Kwang Bok Chae) officially acknowledge Middle South of America Video Association.
2. When informing new regulations to existing retail stores and distributing original video tapes to new retail stores, prior notification of it to the President of Middle South of America Video Association is the fundamental and general rule.
3. Deleted. No video tapes shall be supplied to new retail stores within 3 miles radius.
4. UPS shipping charge shall be reduced in its normality.
5. The original video tapes shall be delivered on the date the retail stores desire.
6. All litigation against Mr. Han Il Park shall be dismissed and [sic] will not sue Mr. Park again in the future. (Cause No. 2003-160-18; 61-Trial Court)
7. The President of Middle South of America Video Association, Han Il Park promises to publish an apology statement in light of his appreciation of the reconciliation.
P S Representative, Kwang Bok Chae, SIGNED
The President of Middle South of America Video Association, Han Il Park
P S fails to identify which essential terms are missing from the agreement and cites authority only for the general principle that agreements must contain essential terms. Because P S fails to explain its reasoning, this argument is waived. See TEX. R. APP. P. 38.1(h) (stating that appellant's brief must contain a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record); Bartosh v. Gulf Health Care Ctr.-Galveston, 178 S.W.3d 434, 445 (Tex.App.-Houston [14th] 2005, no pet.)
In its ninth point of error, P S argues that the settlement agreement is not enforceable because Chae, who signed the agreement, had no authority to bind the corporation. However, because P S did not raise this issue in the court below, it is waived. See TEX. R. APP. P. 33.1(a)(1)(A) (stating that the record must show that the complaint was made to the trial court by a timely request, objection, or motion that states grounds for the sought-after ruling with sufficient specificity to make the trial court aware of the complaint); Atl. Lloyds Ins. Co. v. Butler, 137 S.W.3d 199, 209 (Tex.App.-Houston [1st] 2004, pet denied.) We overrule P S's first and ninth points of error.
Language of Final Judgment
In its second point of error, P S alleges that the judgment's statement that P S's causes of action are "dismissed" is erroneous because a summary judgment must resolve all issues on the merits. The relevant portion of the judgment provides:
On this date, the Court considered [Appellees'] Motion for Summary Judgment and Motion to Dismiss [P S's] Causes of Action, and after reviewing the evidence and hearing the arguments, the Court finds that both motions should be GRANTED.
IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED THAT [P S's] all causes of action against [Appellees] . . . is [sic] hereby dismissed and P S Corporation take nothing from Han Il Park individually and dba Dong-A Video dba Middle South of America Video Association
(emphasis added).
The Fourth Court of Appeals addressed a similar situation in Martinez v. S. Pac. Transp. Co., 951 S.W.2d 824, 830 (Tex.App.-San Antonio 1997, no pet.), in which the plaintiff complained that the trial court erred by dismissing his cause of action. In that case, the judgment provided:
On this 27 [sic] day of June, 1996, the court heard Defendant [Southern Pacific's] Motion for Summary Judgment, and having considered the motion has determined it should be granted.
It is therefore ORDERED that the above-styled and numbered cause be dismissed with prejudice as to [Southern Pacific] and that the Plaintiff take nothing from the Defendant. . . . Id.
(emphasis added). Noting that the trial court had disposed of the case by granting summary judgment, the court of appeals asserted that "the proper judgment is that plaintiff take nothing" and stated that the trial court should not have ordered the dismissal. Id. The court of appeals held that the judgment should be "modified to delete the order of dismissal with prejudice" and affirmed the judgment of the trial court as modified. Id.
The judgment in the instant case is similar to that in Martinez. We agree with the reasoning in Martinez and hold that the judgment in this case should be modified to delete the dismissal language. Accordingly, we overrule P S's second point of error subject to the specified modification.
P S also argues that using the term "dismissed" renders the document an order rather than a judgment. However, P S cites no authority for this argument, and therefore, it has waived this issue. See TEX. R. APP. P. 38.1(h). P S further alleges that the final judgment is defective because it "fails to find that the order is issued because of [P S's] breach of the alleged `settlement agreement.'" However, P S fails to explain how this renders the judgment defective and again cites no authority for its position; accordingly, it has waived this issue as well. See id.
Failure to Grant Trial on the Merits
In its eighth, tenth, eleventh, twelfth, and thirteenth points of error, P S alleges that the case should have proceeded to trial. We will address these points in a different order to facilitate a more logical discussion.
In its tenth point of error, P S alleges that granting summary judgment was erroneous because the settlement agreement contains several ambiguities, and therefore a fact issue exists. P S first raised the issue of ambiguity in its Motion for Reconsideration of [Appellees'] Motion for Summary Judgment and Motion to Dismiss on Attorneys Fees. In that motion, P S alleged that "the agreement fails because the terms are ambiguous and any ambiguity or uncertainty in an agreement is construed against the party who drafted the same, which is [Park]." However, P S did not identify which terms were ambiguous or how they were so. Although P S elaborates on this argument in its brief, identifying the terms and their alleged ambiguities, it did not state its grounds with sufficient specificity in its motion for reconsideration. See Tex.R.App.P. 33.1(a)(1)(A) (as a prerequisite to presenting a complaint for appellate review, the record must show that the complaint was made to the trial court by a timely request, objection, or motion that stated the grounds for the ruling sought by the complaining party with sufficient specificity to make the trial court aware of the complaint). We overrule P S's tenth point of error.
In its eleventh point of error, P S argues that because the settlement agreement was a counteroffer, the trial court erroneously granted summary judgment based on an incomplete contract. To the contrary, the summary judgment evidence establishes that Park accepted P S's offer by writing the apology letter, which P S subsequently published.
It is well-settled that performance in compliance with the terms of an offer may constitute valid acceptance. United Concrete Pipe Corp. v. Spin-Line Co., 430 S.W.2d 360, 364 (Tex. 1968). This acceptance is valid as long as it does not change or qualify the terms of the offer. Id. Here, a condition of P S's settlement offer was that Park "[promise] to publish an apology statement in light of his appreciation of the reconciliation." In response, Park wrote a letter in which he identified himself as "the one who is responsible for Texas Middle South of America Video Association" and admitted that "due to my short-comings, I have caused so much pain to the President of PS Corporation, Kwang-Bok Chae and his family members." Park further confessed:
Since the year 2000 to present, as the president of Middle South of America Video Association, my only thought was for profit and progress of the video store owners, and that caused friction with KBS, MBC, and SBS chief distributors and much suffering and unproductive pain for Mr. Kwang-Bok Chae, President of PS Corporation. . . . I am responsible for depriving local Korean-Americans of their right to view the video tapes; and I again extend my apologies.
P S contends that the apology letter did not conform with the terms of the offer and thus did not constitute a valid acceptance. In support of this argument, P S argues that "it is not entirely clear what sort of apology was contemplated in the agreement," but that "the most reasonable interpretation . . . is that [Park's] apology was for the conduct which led to the claims [P S] filed against him. According to P S, Park's apology altered the terms of the agreement and "amounted to a new counteroffer which [P S] did not accept." However, P S does not explain how Park's apology failed to address the conduct that led to its initial claims, nor does it cite any authority besides general contract principles; therefore, P S's arguments are unconvincing. Park accepted the settlement offer by writing the apology letter, and the settlement agreement thus became a completed contract. We overrule P S's eleventh point of error.
In its twelfth point of error, P S argues that the settlement agreement only partially addressed its claims against appellees, and therefore the trial court erred by granting summary judgment on all of P S's claims. In its Motion for Reconsideration of Defendant's Motion for Summary Judgment and Motion to Dismiss on Attorney's Fees, P S alleged that neither the settlement agreement nor the apology letter addressed its price fixing claim. On appeal, however, P S merely rehashes its argument that the settlement is ambiguous and asserts that the apology letter is "at best, only partial consideration" and "should only be considered a release for claims based on conduct addressed in the letter of apology." However, in making these assertions, P S makes no reference to the price fixing claim and fails to assert any authority in support of its argument. Accordingly, it waives this argument. TEX. R. APP. P. 33.1(a); TEX. R. APP. P. 38.1(h). We overrule P S's twelfth point of error.
In its eighth point of error, P S argues that the court erred in granting appellees' motion for summary judgment because the trial court must construe the evidence in the light most favorable to the non-movant, and P S, the non-movant, disputed the enforceability of the settlement agreement. P S asserts that the motion for summary judgment "on its face is insufficient to support the Final Judgment." Similarly, in its thirteenth point of error, P S alleges that the trial court erred in refusing to grant an evidentiary hearing or a trial on the merits on the terms of the alleged settlement agreement. As explained above, regarding points of error one and nine, we find the settlement agreement to be enforceable. In points of error eight and thirteen, P S makes no new substantive arguments regarding enforceability. Accordingly, we overrule these points of error.
P S also asserts that the trial court's failure to grant an evidentiary hearing or a trial on the merits violated its rights to Due Process and Equal Protection. Once again, however, P S fails to cites any authority or explain its reasoning; therefore, it waives this argument. TEX. R. APP. P. 38.1(h).
Attorney's Fees
In its third, fourth, fifth, sixth, and seventh points of error, P S challenges the trial court's award of attorney's fees to appellees. We review a trial court's decision to award attorney's fees de novo. G.R.A.V.I.T.Y. Enter., Inc. v. Reece Supply Co., 177 S.W.3d 537, 546 (Tex.App.-Dallas 2005, pet. denied). We will consider P S's points of error in a different order to facilitate a more logical discussion.
In its fifth point of error, P S argues that the trial court erred in awarding attorney's fees to Park when Park did not prove actual damages. We disagree. A party generally may not recover attorney's fees incurred in the defense or prosecution of a lawsuit. G.R.A.V.I.T.Y. Enter., Inc., 177 S.W.3d at 546; Qwest Commc'ns Int'l, Inc. v. ATT Corp., 114 S.W.3d 15, 32-33 (Tex.App.-Austin 2003, pet. granted), rev'd in part on other grounds, 167 S.W.3d 324 (Tex. 2005); Lesikar v. Rappeport, 33 S.W.3d 282, 306 (Tex.App.-Texarkana 2000, pet. denied). However, recovery of reasonable attorney's fees as damages is available based on equitable grounds if (1) the natural and proximate consequence of a wrongful act has been to involve a plaintiff in litigation with others or (2) the defendant has acted in bad faith, vexatiously, wantonly, or for oppressive reasons. G.R.A.V.I.T.Y. Enter., Inc., 177 S.W.3d at 546.
In his amended counterclaim, Park pled, among other claims, causes of action for fraud and intentional misrepresentation, negligent misrepresentation, promissory estoppel, quantum meruit, and breach of contract. In his motion for summary judgment, Park argued causes of action for breach of contract, false representation, and promissory estoppel. Although the pleadings and motion do not explicitly state that P S acted vexatiously or wantonly, we can infer this meaning from their substance. Furthermore, P S appears to have acted in bad faith by attempting to use Park's apology statement, which was the product of a negotiated settlement, as evidence against him. Therefore, we uphold the award of attorney's fees to Park. See Nationwide Mut. Ins. Co. v. Holmes, 842 S.W.2d 335, 342 (Tex.App.-San Antonio 1992, writ denied) (noting that "there is nothing sacrosanct about attorney's fees per se that forbids their award as damages"); Guffey v. Clark, No. 05-93-00849-CV, 1997 WL 142750, at *3 (Tex.App.-Dallas March 31, 1997, writ denied) (not designated for publication) (noting that a plaintiff is entitled to recover attorney's fees as damages if they are proximately caused by an alleged tort). We overrule appellant's fifth point of error.
We recognize that the Guffey court explicitly limited its holding to the facts of that case; however, we find it to be instructive on this issue.
In his third point of error, P S contends that the trial court erred in awarding attorney's fees to Park without clearly identifying the claim that established Park's right to such fees. However, the judgment states that Park was awarded attorney's fees "as damages," and as discussed above, this is permissible. We overrule appellant's third point of error.
In its seventh point of error, P S argues that Park was not entitled to attorney's fees because he did not provide the requisite thirty-day notice under Section 38.002 of the Texas Civil Practice and Remedies Code and because the settlement agreement did not authorize an award of attorney's fees. In light of our holding on appellant's fifth point of error, this argument is irrelevant. We overrule appellant's seventh point of error.
In its fourth point of error, P S argues that the trial court erred in awarding attorney's fees without holding an evidentiary hearing and in relying solely on a conclusory statement contained in Park's response to P S's motion for new trial. P S argues that the award of attorney's fees constituted an unliquidated claim requiring an evidentiary hearing under Rule 243 of the Texas Rules of Civil Procedure. However, P S fails to explain its reasoning and accordingly has waived this argument. TEX. R. APP. P. 38.1(h). Regarding the amount of fees, both parties agree that the trial court reduced the amount from $17,500 to $6,125 based on an affidavit from Park's attorney averring that the $6,125 accrued because P S continued to pursue litigation despite the settlement agreement. Although the affidavit itself does not appear in the record, both parties agree that it was attached to Park's response to P S's motion to reconsider and that the trial court relied on this affidavit in determining the amount of the award. Accordingly, we hold that the trial court did not err in awarding $6,125 in attorney's fees to Park. We overrule appellant's fourth point of error.
In its sixth point of error, P S contends that the trial court erred by entering a final judgment granting attorney's fees without giving P S sufficient opportunity to challenge the validity of the settlement agreement. P S relies on Rule 245 of the Texas Rules of Civil Procedure, which provides that the Court may set contested cases on written request of any party, or on the court's own motion, with reasonable notice of not less than forty-five days to the parties of a first setting for trial, or by agreement of the parties; provided, however, that when a case previously has been set for trial, the Court may reset said contested case to a later date on any reasonable notice to the parties or by agreement of the parties.
P S claims that it was entitled to forty-five days' notice after appellees brought their counterclaim for breach of contract but that the trial court improperly rendered summary judgment only thirty-five days after appellees brought their counterclaim. However, because P S fails to direct this court to a corresponding specific objection in the record, this issue is not preserved. See Tex.R.App.P. 33.1(a) (stating that to be preserved for appellate review, a complaint must be made to the trial court by a timely request, objection, or motion that states the grounds for the ruling sought from the trial court with sufficient specificity to make the trial court aware of the complaint); TEX. R. APP. P. 38.1(h) (stating that appellant's brief must cite appropriately to the record). We note that P S did not request an opportunity to challenge the validity of the agreement before the trial court entered a final judgment. While P S vaguely complains about the agreement's validity in a motion for new trial and discusses its lack of enforceability in more detail in a supplemental motion for new trial, P S did not specifically challenge the validity of the agreement before the trial court rendered judgment. Therefore, this issue is not preserved for appeal. Furthermore, because there is no evidence in the record of the scheduled trial date, P S has failed to demonstrate a violation of Rule 245. We overrule appellant's sixth point of error.
In conclusion, we hold that the trial court did not err by granting appellees' motion for summary judgment because the evidence indicates that no genuine issue of material fact exists and that appellees were entitled to judgment as a matter of law. We further hold that the trial court did not err in awarding attorney's fees to appellees. However, we hold that the judgment improperly includes language dismissing P S's causes of action. Therefore, we modify the judgment to delete the dismissal language and affirm the judgment as modified.