Brenda Corbin Stirl and Ralph E. Stirl v. Terry McGhee

Order filed January 19, 2012 In The Eleventh Court of Appeals __________ No. 11-10-00042-CV __________ BRENDA CORBIN STIRL AND RALPH E. STIRL, Appellants V. TERRY MCGHEE, Appellee On Appeal from the 104th District Court Taylor County, Texas Trial Court Cause No. 24619-B O R D E R This is a case regarding the settlement of claims arising from an automobile collision. Appellants, Brenda Corbin Stirl and Ralph E. Stirl, sought to enforce the letter correspondence between appellee, Terry McGhee, and appellants’ insurance adjuster as a binding Rule 11 settlement agreement. See Tex. R. Civ. P. 11. The parties filed concurrent motions for summary judgment regarding the enforceability of appellee’s pro se letter to the insurance adjuster. Appellants also filed a counterclaim for enforcement of the settlement agreement as a valid contract. The trial court denied the motions for summary judgment and severed appellants’ counterclaim from the underlying personal injury lawsuit. Following a bench trial in the severed cause, the trial court denied the relief sought by appellants in their counterclaim and entered a take-nothing judgment, finding that no binding settlement agreement existed between the parties. Appellants timely requested findings of fact and conclusions of law and, when none were entered, filed notice of past-due findings of fact and conclusions of law in accordance with the Texas Rules of Civil Procedure. See Tex. R. Civ. P. 296, 297. The trial court never responded to the request. Appellants urge that the trial court’s failure to respond to their request for findings of fact and conclusions of law prevents them from properly presenting their appeal. We abate the appeal and remand to the trial court for it to enter findings of fact and conclusions of law. Appellee contends that the trial court’s prejudgment letter to the parties served as the court’s findings of fact and conclusions of law and that appellants were thus required to ask for additional or amended findings and to submit specific proposed findings to the trial court per Tex. R. Civ. P. 298. Alvarez v. Espinoza, 844 S.W.2d 238, 241–42 (Tex. App.—San Antonio 1992, writ dism’d w.o.j.). Findings of fact and conclusions of law need not be in any particular form so long as they are in writing and are “filed with the Clerk and shall be part of the record.” Villa Nova Resort, Inc. v. State, 711 S.W.2d 120, 124 (Tex. App.—Corpus Christi 1986, no writ); see Rule 297. Thus, it is possible for findings of fact and conclusions of law to be contained in a trial court’s letter to counsel if such a letter is filed of record. Kendrick v. Garcia, 171 S.W.3d 698, 701 (Tex. App.—Eastland 2005, pet. denied); Moore v. Jet Stream Invs., Ltd., 315 S.W.3d 195 (Tex. App.—Texarkana 2010, pet. denied). Here, the trial court’s letter was not filed of record and does not express intent for appellate courts to rely on the letter. The phrase “findings of fact and conclusions of law” does not appear anywhere in the letter. The primary purpose of the very brief letter appears to be merely to inform the parties of the court’s decision and to notify them that a proposed order will be drafted. In light of these circumstances, the letter cannot logically form the basis of the court’s decision on this issue. The trial court failed to prepare and file findings of fact and conclusions of law. By virtue of Rule 297, the trial court’s duty to make such findings and conclusions is mandatory when a party makes a timely request. See Rule 297; see also Cherne Indus., Inc. v. Magallanes, 763 S.W.2d 768, 772 (Tex. 1989). The failure of the trial court to file sufficient findings of fact and conclusions of law when properly requested is presumed to be harmful unless the face of the record reflects that the appellant was not harmed. Panchal v. Panchal, 132 S.W.3d 465, 466–67 (Tex. App.—Eastland 2003, no pet.). The failure to make sufficient findings of fact becomes harmful error when the appellant is prevented from properly presenting a case to the appellate court. Id. at 467. The controlling issue is whether the circumstances of the particular case require the appellant to guess at the reasons for the trial court’s decision. Larry F. Smith, Inc. v. The Weber Co., Inc., 110 S.W.3d 611, 614 (Tex. App.—Dallas 2003, pet. denied). “When there are two or more possible grounds of recovery or defense, as in this case, an appellant is forced to guess what the trial court found unless the trial court’s findings are provided to him.” Id. Here, the face of the record does not reflect that appellants were unharmed. The trial court began the bench trial by reminding the parties that it had denied motions for summary judgment on both sides and that the purpose of the trial was to decide genuine issues of material fact on both sides. The court agreed that this was a trial before the court “[o]nly on fact issues.” The trial court considered the affidavits of appellee and his girlfriend, Gwen Boyd, in which they asserted defenses of duress, mistaken belief, and economic stress. Five letters were laid out before the court, and arguments were made about which, if any, of the correspondence could be considered in combination to have formed the basis of a Rule 11 settlement agreement. The court heard testimony from Russell Manion, the insurance adjuster for appellants’ insurance carrier, about the offer made in Manion’s letter. Manion testified that, when appellee filed suit, over seven months prior to his pro se letter, Farm Bureau considered its offer officially rejected. Manion also testified that he considered there to be three essential terms of his offer letter and that only one of the terms, the amount of the payment to appellee, seems to have been contemplated by appellee in his pro se letter. The judgment does not specify the basis for the ruling that there was “no binding settlement agreement whatsoever.” Based on the evidence before it, the trial court could have reached its conclusion based on the formalities required by the plain language of Rule 11, or any number of contract law theories, or a combination of both. The trial court asserted at the outset that genuine issues of material fact stood in the way of its ability to decide the issue as a matter of law. Appellants have been harmed because they are left to guess at the court’s determination of these material facts. The remedy for the erroneous failure to file findings of fact and conclusions of law is to abate the appeal for entry of proper findings and conclusions. Panchal, 132 S.W.3d at 467 (citing Lubbock County Cent. Appraisal Dist. v. Contrarez, 102 S.W.3d 424, 426 (Tex. App.—Amarillo 2003, no pet.)). We abate this appeal. The trial court is directed to enter findings of fact and conclusions of law. The clerk of the trial court is directed to prepare and forward to this court a supplemental clerk’s record containing the trial court’s findings of fact and conclusions of law. The supplemental clerk’s record is due to be filed in this court on or before February 17, 2012. Upon the filing of the supplemental clerk’s record, the appeal will be reinstated, and the parties will be given an opportunity to supplement their briefs. Appellants’ motion to abate appeal for entry of findings of fact and conclusions of law is granted. The appeal is abated. PER CURIAM January 19, 2012 Panel consists of: Wright, C.J., McCall, J., and Kalenak, J.