law-breach-of-settlement-agreement | Rule 11 Agreement | Mediated Settlement Agreements | Release |
accord and satisfaction as affirmative defense |
Breach of Settlement Agreement
Written settlement agreements may be enforced as contracts even if one party withdraws consent
before judgment is entered on the agreement. Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995).
When consent is withdrawn, however, the agreed judgment that was part of the settlement may not be
entered. Id. at 462. The party seeking enforcement of the settlement agreement must pursue a separate
claim for breach of contract. Id.
Castillo urges that his motion to enforce the settlement agreement was sufficient as a pleading to
support a judgment for breach of contract. See Tex. R. Civ. P. 301 (“The judgment of the court shall
conform to the pleadings, the nature of the case proved and the verdict, if any . . . .”). Ford does not
contend otherwise. Rather, Ford asserts that it was entitled to conduct discovery and develop its
defenses regarding Castillo’s breach of contract claim just as it would have been allowed to do for any
breach of contract claim. We agree.
Ford Motor Co. v. Castillo, No. 06-0875 (Tex. 2009)(Johnson)
(defendant entitled to opportunity to conduct discovery on affirmative defenses to breach of settlement claim
based on improper juror conduct)(Ford given chance to show it was justified in backing out of settlement
agreement because of allegedly misleading message from jury)
FORD MOTOR COMPANY v. EZEQUIEL CASTILLO, ET AL.; from Cameron County; 13th district (13-04-00638-
CV, 200 SW3d 217, 06-08-06)
The Court reverses the court of appeals' judgment and remands the case to the trial court.
Justice Johnson delivered the opinion of the Court.
Justice Wainwright delivered a concurring opinion, in which Justice Medina joined.
Like any other breach of contract claim, a claim for breach of settlement agreement is subject to the
established procedures of pleading and proof. Mantas v. Fifth Court of Appeals, 925 S.W.2d 656, 658
(Tex. 1996) (orig. proceeding) (per curiam). Parties are “entitled to full, fair discovery” and to have their
cases decided on the merits. Able Supply Co. v. Moye, 898 S.W.2d 766, 773 (Tex. 1995) (orig.
proceeding); see State v. Lowry, 802 S.W.2d 669, 671 (Tex. 1991) (“Only in certain narrow
circumstances is it appropriate to obstruct the search for truth by denying discovery.”). A trial court
abuses its discretion when it denies discovery going to the heart of a party’s case or when that denial
severely compromises a party’s ability to present a viable defense. Able, 898 S.W.2d at 772.
The validity of a settlement agreement cannot be determined without “full resolution of the
surrounding facts and circumstances.” Quintero v. Jim Walter Homes, Inc., 654 S.W.2d 442, 444 (Tex.
1983). Because the trial court denied discovery, Ford was unable to develop facts relevant to the
presentation of its defense. Therefore, the trial court abused its discretion by denying Ford the right to
conduct discovery on the breach of settlement agreement claim.
PET. DENIED CASES
07-0753
THE UNIVERSITY OF TEXAS SYSTEM, THE UNIVERSITY OF TEXAS AT DALLAS, AND ROBERT LOVITT v.
GURUMURTHY KALYANARAM; from Dallas County; 5th district (05-05-01493-CV, 230 SW3d 921, 08-07-07, pet.
denied Jan 2008) (public employment, assertion of immunity, dismissal of claim for breach of settlement
agreement reversed)