Maria E. Perales and Edward L. Perales v. Spohn Health System Corporation

NUMBER 13-03-178-CV COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI - EDINBURG MARIA E. PERALES AND EDWARD L. PERALES, Appellants, v. SPOHN HEALTH SYSTEM CORPORATION, Appellee. On appeal from the 94th District Court of Nueces County, Texas. MEMORANDUM OPINION Before Chief Justice Valdez and Justices Rodriguez and Garza Memorandum Opinion by Justice Garza Appellants, Maria E. Perales and Edward L. Perales, appeal the decision of the trial court granting summary judgment in favor of appellee, Christus Spohn Health System Corporation d/b/a Christus Spohn Hospital South (“Spohn”). We conclude an enforceable rule 11 agreement was not created because the settlement agreement was not made in open court and entered of record. We affirm the decision of the trial court. I. Background In the original underlying case, Perales v. Spohn Health System Corporation, Todd R. Howell, M.P., Luz Perez, L.V.N., & Valerie C. Briault, R.N., cause number 97-5259-C, the Peraleses alleged that Spohn, as well as other parties, committed medical malpractice. Before and during trial, the Peraleses and Spohn entered into negotiations in an attempt to settle the case. Ultimately Spohn made an offer to the Peraleses for $150,000 which was to remain open and available for acceptance by the Peraleses until the jury returned a verdict. During the jury’s deliberations, the jury foreman sent out four notes requesting additional instructions. The third of these notes read, “On question #1, we resolved that neither (Dr. Howell/Spohn Hosp.) were negligent[. Does] this represent completion of our charges?” When the judge read this note aloud in court, counsel for the Peraleses immediately stated, “I’ll accept the offer,” and repeated shortly thereafter, “John, I’ll accept the one-fifty offer.” Counsel for Spohn responded, “I understand that the jury has sent out a note that we view to be demonstrative of their verdict. . . . I view this as a substantive verdict and therefore my offer earlier to Mr. Showalter [counsel for the Peraleses] was that the $150,000 offer was good until the time of the verdict, and I view this to be the jury’s verdict,” indicating that he considered the offer to have expired. After further deliberation, the jury returned a verdict in favor of defendants Spohn and Dr. Howell, and against the Peraleses. The Peraleses, claiming that they had a valid and enforceable rule 11 agreement with Spohn despite the jury verdict, presented a claim for $150,000 and demanded payment, which Spohn refused to tender. See Tex. R. Civ. P. 11. The Peraleses then sued Spohn for breach of contract. Spohn filed a motion for summary judgment alleging: (1) the Peraleses failed to provide evidence of an enforceable rule 11 agreement; and (2) Spohn’s offer expired when the jury sent out the third note, before the Peraleses attempted to accept the offer. The trial court granted summary judgment in favor of Spohn, and the Peraleses subsequently appealed to this Court. II. Summary Judgment When the trial court’s order granting summary judgment is silent as to its reasoning, this Court should affirm the summary judgment if any ground advanced in the motion is meritorious. Harwell v. State Farm Mut. Auto Ins. Co., 896 S.W.2d 170, 173 (Tex. 1995); Larson v. Family Violence & Sexual Assault Prevention Ctr., 64 S.W.3d 506, 515 n.8 (Tex. App.–Corpus Christi 2001, pet. denied). In reviewing an award of traditional summary judgment, we must determine whether the summary judgment proof establishes as a matter of law that there is no genuine issue of material fact as to one or more of the essential elements of the plaintiff’s cause of action or whether the defendant has conclusively established all elements of his affirmative defense. See Pech v. Estate of Tavarez, 112 S.W.3d 282, 285 (Tex. App.–Corpus Christi 2003, no pet.); see also Crain v. Smith, 22 S.W.3d 58, 59 (Tex. App.–Corpus Christi 2000, no pet.). We take as true all evidence favorable to the non-movant and indulge every reasonable inference in the non-movant’s favor. Trigo v. Munoz, 993 S.W.2d 419, 421 (Tex. App.–Corpus Christi 1999, pet. denied). Our review of summary judgments is de novo. Texas Commerce Bank-Rio Grande, N.A. v. Correa, 28 S.W.3d 723, 726 (Tex. App.–Corpus Christi 2000, pet. denied). III. Rule 11 Agreement An agreement to settle a case is enforceable by the trial court if it complies with rule 11. See Padilla v. La France, 907 S.W.2d 454, 460 (Tex. 1995). To comply with rule 11, the agreement must be either (1) in writing, signed and filed with the papers as part of the record, or (2) made in open court and entered of record. Tex. R. Civ. P. 11; Padilla, 907 S.W.2d at 459. A valid rule 11 agreement, whether written or oral, must contain all essential terms of the agreement and must be complete in every material detail. See Padilla, 907 S.W.2d at 460; Neasbitt v. Warren, 105 S.W.3d 113, 116 (Tex. App.–Fort Worth 2003, no pet.); see also Travelers Ins. Co. v. Williams, 603 S.W.2d 258, 261 (Tex. App.–Corpus Christi 1980, no writ) (requiring that parties agree upon the provisions of a settlement as the court has no power to supply terms, provisions, or essential details). The purpose of the rule is to avoid disputes over the terms of oral settlement agreements. Padilla, 907 S.W.2d at 461. In this appeal, the Peraleses complain that Spohn failed to provide sufficient evidence demonstrating that there was no enforceable oral rule 11 agreement. They also claim that trial testimony and an affidavit from their attorney demonstrate the existence of such an agreement. However, upon reviewing the summary judgment evidence de novo, we can find no indication that the essential terms of a rule 11 agreement were in fact made in open court and entered of record or reduced to writing, signed, and filed with the papers as part of the record. Under Texas law, an agreement becomes a valid and enforceable contract when, among other things, there is (1) an offer and (2) an acceptance of that offer. See Labor Ready Cent. III, L.P. v. Gonzales, 64 S.W.3d 519, 522 (Tex. App.–Corpus Christi 2001, no pet.). The summary judgment evidence before us does not demonstrate that an offer, an essential term establishing existence of an agreement, was ever made in open court and entered into the record. The affidavit of the Peraleses’ attorney, attached to the Peraleses’ response to the motion for summary judgment, notes that Spohn “made an offer of $150,000 to settle all claims . . . contingent only on its acceptance before the jury returned a verdict.” Counsel did not indicate that this offer was ever made orally in court to be entered in the record, although he does explicitly indicate that acceptance occurred in conformity with the requirements of rule 11: “I accepted the offer in open court. The acceptance was entered in the court record.” Similarly, the excerpts from the trial transcript also fail to show that an offer was made in compliance with rule 11. The only excerpt from the medical malpractice trial, which was submitted by both parties as summary judgment evidence, involved a discussion that occurred in court between the judge and counsel after the jury sent the third note to the judge and the Peraleses’ attorney attempted to accept. Counsel for Spohn did admit to the court that he had previously made a settlement offer of $150,000 to the Peraleses’ attorney. He did not, however, repeat that offer in open court on the record and provided no indication that he had intended the offer to be part of an enforceable rule 11 agreement. No other trial testimony from the attorneys was offered as evidence, leaving this Court with no evidence that an offer was ever made in open court on the record. Deposition testimony of Spohn’s attorney similarly notes that an offer was made by Spohn and conveyed to the Peraleses’ attorney but does not indicate that this offer was made or repeated in open court and entered into the record. The affidavit of Spohn’s attorney, submitted with Spohn’s motion for summary judgment, affirmatively states: “There is no record of agreement between the parties to settle.” The Peraleses provided no evidence that would tend to dispute this statement. A vital element of an enforceable rule 11 agreement, the offer to settle, was never established in compliance with the terms of rule 11. Spohn has therefore demonstrated that there is no genuine issue of material fact as to the existence of a valid rule 11 agreement that should have been recognized and enforced by the trial court. See Prevost v. Ins. Advisors, Inc., 46 S.W.3d 289, 293 (Tex. App.–Fort Worth 2001, pet. denied) (when evidence did not show that terms of settlement had been established on the record, court held that no rule 11 agreement existed). Because this Court should affirm the granting of summary judgment if any ground advanced in the motion is meritorious, see Harwell, 896 S.W.2d at 173, we find it unnecessary to reach the issue of whether the jury note constituted a verdict. Instead we conclude that the trial court properly granted Spohn’s motion for summary judgment on the rule 11 issue alone. Accordingly, we affirm the decision of the trial court. DORI CONTRERAS GARZA, Justice Memorandum Opinion delivered and filed this the 15th day of July, 2004.