Benny M.B. Daneshjou, Sally Daneshjou and Daneshjou Company, Inc. v. Kasling, Hemphill, Dolezal and Atwell, L.L.P.

ACCEPTED 03-16-00664-CV 13926094 THIRD COURT OF APPEALS AUSTIN, TEXAS 11/22/2016 11:24:28 AM JEFFREY D. KYLE CLERK CAUSE NO. 03-16-00664-CV

FILED IN 3rd COURT OF APPEALS THE COURT OF APPEALS AUSTIN, TEXAS THIRD DISTRICT OF TEXAS 11/22/2016 11:24:28 AM AUSTIN JEFFREY D. KYLE Clerk

BENNY M.B. DANESHJOU SALLY DANESHJOU DANESHJOU COMPANY, INC. APPELLANTS v. KASLING, HEMPHILL, DOLEZAL AND ATWELL, L.L.P. APPELLEE

Appealed from the 53 rd District Court of Travis County Texas Trial Court Cause No. D-1-GN-13-003405 Honorable KARIN CRUMP Judge Presiding

APPELLANTS' BRIEF

Respectfully submitted, THE FERRARO LAW FIRM

/s/ Peter E. Ferraro Peter E. Ferraro, Esq. 1011 West 10th Street Austin, Texas 78703 State Bar No. 06934600 Tel: (512) 474-7742 Fax: (512) 474-8106 Email: ferrarolaw@mac.com ATTORNEY FOR APPELLANTS

ORALARGUMENTRF.QUESTED

CAUSE NO. 03-16-00664-CV

THE COURT OF APPEALS THIRD DISTRICT OF TEXAS AUSTIN

BENNY M.B. DANESHJOU SALLY DANESHJOU DANESHJOU COMPANY, INC. APPELLANTS V. KASLING, HEMPHILL, DOLEZAL AND ATWELL, L.L.P. APPELLEE

Appealed from the 53 rd District Court of Travis County Texas Trial Court Cause No. D-1-GN-13-003405 Honorable KARIN CRUMP Judge Presiding

APPELLANTS'BRIEF

TO THE HONORABLE THIRD COURT OF APPEALS: Appellants, M.B. "Benny" Daneshjou, Sally Daneshjou and Daneshjou

Company, Inc., submit this, their Brief on the merits. Throughout this Brief, the Clerk' s Record shall be referred to as "C.R. [page#]."

IDENTITY OF PARTIES AND COUNSEL

Peter E. Ferraro THE FERRARO AW FIRM 1011 West 10th Street Austin, Texas 78703 Tel : (512) 474-7742 Fax: (512) 474-8106 Email: ferrarolaw@mac.com

ATTORNEY FOR APPELLANTS .BENNY MB DANESHJOU SALLY DANESHJOU DANESHJOU COMPANY, INC.

Trey Dolezal KASLING, HEMPHILL, DOLEZAL and ATWELL, L.L.P. 301 Congress Ave. Suite 300 Austin, Texas 78701 Tel: (512) 472-6800 Fax: (512) 472-6823 Email : dolezal@khdalaw.com

ATTORNEY FOR APPELLEE KASLING, HEMPHILL, DOLEZAL and ATWELL, L.L.P.

TRIAL COURT: 53 rd Judicial District Court, Travis County Texas Honorable KARIN CRUMP, Judge Presiding

TABLE OF CONTENTS

IND ENTITY OF PARTIES AND COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 TABLE OF CONTENTS ... . ........ . ... .. .. .............. ....... . ... . .... . ... . ...... 4 INDEX OF AUTHORITIES ........... . . .... ... .. ......... ....... . .. . .... ... . . ..... .. 5 STATEMENT OF CASE .................. . ... ... . ....... .. .. .... . .... . .. ...... . . .... 6 a. Nature of case . .. . .. ... . . . ... .. . . .. ... ... ... . . . . .. ... .. . . .. .. . . ... 6

b. Trial Court ........... ...... .... ... .. . ........ .... . .... . .............. . 7

c. Trial Court Disposition .. ....... .. ................ ...... . . . .......... 7 ISSUE PRESENTED ............. . . ... ......... . ..... . ..... ... ......... ..... ....... . .. . 7 STATEMENT OF FACTS .. . ... .... .. ... . .. .. . .. . ..... .... .. . .. ............. . .. ..... . 7

SUMMARY OF ARGUMENT .... .... .. .... ... .... .. . .. ........................ . . .. . 8

ARGUMENT AND AUTHORITIES ....... . . . .. .. . . . . . .. ......... . ................. 8

CONCLUSION AND PRAYER ... ................. ...... . ..... ...... .. .... .. . ...... 11

CERTIFICATE OF COMPLIANCE .. .. ....... .. ... . .... ...... .................. ... 12

CERTIFICATE OF SERVICE ....... ... .... . .. . .. .. .. .. . ...... ...... .. .... ..... . . ... 12

INDEX OF AUTHORITIES CASES

Beard Family P'ship v. Commercial Indem. Ins. Co., 116 S.W.3d 839, 844 (Tex. App.-Austin 2003, no pet.) .. . .. .. .. . . . . .. . . . . . . . . . .. . .. .. . .. .. .. . . .. . . . .. . . . 9

Centex Corp. v . Dalton, 840 S.W.2d 952, 956 (Tex. 1992) 9 Citv of San Antonio v. Guido Bros. Construction Co., 460 S.W.2d 155, 163 (Tex. Civ. App. 1970) 10 Kinnison Bros. v. Steger, 11 S.W.2d 527, 529 (Tex.Civ.App. -Texarkana, 1928, error dism.) ..... .... ............ .. . . ......... ...... . .. .... ..... . .. . .... . ... .. .. . 10 McDonald v. Grey, 29 Tex. 80, 82 (1867).. .. .. . . . . . . ... . . . . . . . . . . . . . . .. . . . . . . .. . . .. 11 Mensa-Wilmont v. Smith Int'l, Inc. , 312 S.W.3d 771, 781 (Tex. App.-Houston [ 1st Dist.] 2009, no pet.) . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . ... 9 Smallwood v. Melton, 97 S.W.2d 781, 785 (Tex.Civ.App. Fort Worth, 1963, error dis1n .). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 York v. Hughes, 286 S.W. '165, 167 (Tex.Com.App., '1926) ...... .. .. ... .... ... .. 11

s

STATEMENT OF THE CASE Nature of the case:

This case concerns the interpretation of a Mediated Settlement Agreement between the law firm Kasling, Hemphill, Dolezal and Atwell, L.L.P. ("Appellee") and their clients M.B. "Benny" Daneshjou, Sally Daneshjou and Daneshjou Company, Inc. ("Appellants"). A dispute arose over the fees to be paid to Appellee concerning prior legal representation and the Appellee filed suit to collect its legal fees. The parties then mediated the issue and reached a mediated settlement agreement on March 25, 2015 with a Record of Mediation Agreement signed by all parties on June 18, 2015 (C.R. 14-15). Under the signed agreement, the payment for the agreed legal fees was deferred until the following year to allow time for Appellants to raise the necessary funds for payment. As part of the Mediated Settlement Agreement, Appellee agreed to dismiss the pending lawsuit with the right to reinstitute it if Appellants failed to make all the payments under the Mediated Settlement Agreement.

Appellee failed to dismiss the pending lawsuit and Appellants were unable to raise the necessary funds to make the deferred payments to Appellee. Appellee then filed a Motion to Enforce Mediated Settlement Agreement (C.R. 10-15). Appellants likewise filed a Motion to Enforce Mediated Settlement Agreement (C.R. 16-19), requesting that Appellee dismiss the pending lawsuit. *7 Trial Court:

The Honorable Karin Crump of the 53 rd District Court. Trial Court Disposition:

The trial court signed a Final Judgment dated July 8, 2016 (C.R. 36-37) granting Appellee's Motion to Enforce Mediated Settlement Agreement and denying Appellant's Motion to Enforce Mediated Settlement Agreement. This judgment forms the basis of this appeal.

ISSUE PRESENTED

1. Did the trial court err in granting Appellee's Motion to Enforce Mediated

Settlement Agreement where Appellee breached the agreement by failing to

satisfy a condition precedent to dismiss the pending lawsuit?

STATEMENT OF FACTS

M.B. "Benny" Daneshjou, Sally Daneshjou and Daneshjou Company, Inc., Defendants in the trial court action and Appellants in this matter, were sued by Kasling, Hemphill, Dolezal and Atwell, L.L.P., Plaintiff in the trial court action and Appellee in this matter, concerning a fee agreement over prior legal representation. The parties then mediated the issue and reached a mediated settlement agreement on March 25, 2015 with a Record of Mediation Agreement *8 signed by all parties on June 18, 2015 (C.R. 14-15). Under the signed agreement, the payment for the agreed legal fees was deferred until the following year to allow time for Appellants to raise the necessary funds for payment. As part of the Mediated Settlement Agreement, Appellee agreed to dismiss the pending lawsuit with the right to refile a lawsuit if Appellants failed to make all the payments under the Mediated Settlement Agreement. Appellee failed to dismiss the pending lawsuit and Appellants were unable to raise the funds to make the necessary payments under the Mediated Settlement Agreement.

SUMMARY OF ARGUMENT

The trial court erred in granting Appellee's Motion to Enforce Mediated Settlement Agreement because Appellee breached the agreement by failing to satisfy a condition precedent to dismiss the pending lawsuit. The doctrine of "condition precedent" for breach of contract law prevents Appellee from enforcing the payment obligation against Appellants under the Mediated Settlement Agreement.

ARGUMENT AND AUTHORITIES

Appellants asse11 that the trial court erred in granting Appellee's Motion to Enforce Mediated Settlement Agreement because Appellee breached the agreement by failing to satisfy a condition precedent to dismiss the pending lawsuit. The *9 condition requiring that Appellee dismiss the pending lawsuit was a condition precedent under Texas law which prevented Appellee from enforcing the terms of the Mediated Settlement Agreement.

A party seeking to enforce a contract bears the burden of proving that all conditions precedent have been satisfied. See Mensa-Wilmont v. Smith Int'l, Inc., 312 S.W.3d 771, 781 (Tex. App.-Houston [1st Dist.] 2009, no pet.). When a party 's obligation under the contract is conditioned upon the happening of a future event, the condition must be performed or fulfilled exactly as set forth in the contract before the promise can be enforced. See Centex Corp. v. Dalton, 840 S.W .2d 952,956 (Tex. 1992); Beard Family P'ship v. Commercial Indem. Ins. Co., 116 S.W.3d 839, 844 (Tex. App.- Austin 2003, no pet.).

A key element of the Mediated Settlement Agreement was that Appellee dismiss the pending lawsuit in order that Appellants would be in a much better position to obtain funding to make the necessary payments due to Appellee under the Mediated Settlement Agreement. The condition was material as it affected the ability of the Appellants to obtain credit which would have assisted Appellants in fulfilling their payment obligations under the Mediated Settlement Agreement. (This was not a covenant under the agreement, but a condition precedent to its enforcement.) As such, it was incumbent on Appellee to dismiss the pending *10 lawsuit (which Appellee never did). Section 1 under the Mediated Settlement Agreement reads as follows:

1. Trey L. Dolezal and KHDA ("Plaintiffs") and DCI and Sally and Benny Daneshjo u ("Defendants") agree to mutually release each other from any and all claims asserted or that could be asserted in the above captioned case and agree to dismiss the above captioned case with prejudice. By this language, the parties clearly contemplated that this very lawsuit

wo uld be dismissed with prejudice. However, if Appellants failed to make all the payments required under the Mediated Settlement Agreement, then Appellee would have the right to reinstitute a lawsuit against Appellants. Section 6 under the Mediated Settlement Agreement reads as follows :

6. If Defendants fail to make the payments as set forth above on or before June 1, 2016, Defendants agree that Plaintiffs can refile their claims, notwithstanding the prior dismissal and the applicable statute of limitations, for all claims and/or counterclaims will be tolled by this agreement from the date of the original filing of the above captioned case to 60 days after such failure to pay under this agreement and collect reasonable attorney' s fees and interest of 10% from the date of the breach to the date of payment.

If a contract contains a condition precedent, Texas law provides that the burden of proof is upon the party seeking to impose liability thereon to establish the happening of the events upon which the condition was based. See City of San Antonio 1•. Guido Bros. Construction Co., 460 S.W.2d 155, 163 (Tex. Civ. App. 1970), Kinnison Bros. v. Steger, 11 S.W.2d 527,529 (Tex.Civ.App. -*11 Texarkana, 1928, error dism.). Indeed, it is said that when such condition precedent appears in a contract, the fulfillment of the named condition becomes a prerequisite to the debtor's promise. York v. Hughes, 286 S.W. 165, 167 (Tex.Com.App., 1926); l\1cDonald v. Grey, 29 Tex . 80, 82 (1867); Smallwood v . Melton, 97 S.W. 2d 781 , 785 (Tex.Civ.App. Fort Worth, 1963, error dism.). In the case at hand, th e condition precedent of the dismissal of the pending lawsui t was not accomplished by Appellee. Therefore, Appellee is prohibited from enforcing the Mediated Settlement Agreement and collecting the money from Appellants.

CONCLUSION AND PRAYER Based upon the foregoing, the pleadings, summary judgment evidence, and

the records on file, the trial court erred in granting Appellee's Motion to Enforce Mediated Settlement Agreement because Appellee breached the agreement by failing to satisfy a condition precedent to dismiss the pending lawsuit. Therefore, Appellants respectfully request that this Court reverse the decision of the trial court.

Respectfully submitted,

Isl Peter E. Ferraro Peter E. Ferraro The Ferraro Law Firm SBN: 06934600 1011 W. 10th St. Austin, Texas 78703 Tel: (512) 474-7742 Fax: (512) 474-8106 E-mail: ferrarolaw@mac.com

CERTIFICATE OF COMPLIANCE I certify that the Appellants ' Brief contains 1,779 words.

Isl Peter E. Ferraro Peter E. Ferraro

CERTIFICATE OF SERVICE

This is to certify that a true and correct copy of the above and foregoing has been forwarded to the following counsel of record in compliance with the Texas Rules of Civil Procedure on this 22nd day of November, 2016: Trey Dolezal, Kasling, Hemphill, Dolezal and Atwell, L.L.P., 301 Congress Avenue, Suite 300, Austin, Texas 78701 at 512-472-6823.

Isl Peter E. Ferraro Peter E. Ferraro

INDEX TO APPENDIX Tab A Final Judgment (July 8, 2016) Tab B Mediated Settlement Agreement

Tab A

Filed in The District Court of Travis County, Texas

Cause No. D-l-GN-13-003405 JUL O& 2016- f\) I\)'\._ At_ ) I'· I "' C\. M, KASLING, HEMPHILL, DOLEZAL § IN THE DIS~11'10Jmifrlct Cieri< &ATWELL, LLP § Plaintiff, § § V. § 53RD JUDICIAL DISTRICT § M.B. "BENNY" DANESHJOU, SALLY § DANESHJOU, AND DANESHJOU § COMPANY, INC. § Defendants. § OF TRAVIS COUNTY, TEXAS

:FINAL JUDGMENT

On July 6, 2016, the Court considered Plaintiffs' Motion to Enforce Mediated Settlement Agreement and Defendants' Motion to Enforce Mediated Settlement Agreement. Plaintiff appeared tlu-ough its attorney of record, Trey L. Dolezal. Defendants appeared through their attorney of record, Peter E. Ferraro. The record of testimony was duly reported by Jamie Foley, the substitute court reporter for the 250th Judicia1 District Court.

After reviewing the parties' motions, the pleadings, evidence presented, arguments of the parties, and applicable law, the Court is of the opinion that Plaintiffs Motion to Enforce Mediated Settlement Agreement should be and is hereby GRANTED and Defendant's Motion to Enforce Mediated Settlement Agreement should be and is hereby DENIED.

IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that Plaintiffs' Motion to Enforce is hereby GRANTED.

IT IS FURTHER ORDERED that Defendant's Motion to Enforce Mediated Settlement Agreement should be and is hereby DENIED.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Plaintiff shall have and recover of and from Defendants the total sum of $37,500.00 with interest accruing on said

FINAL JUDGMENT \11111111111 IIIII IIIII IIIII IIIII IIIII IIIII IIIII IIII IIII 004672795

sum at the rate of 10% per annum from June 1, 2016, thereafter until paid in full , and $2,500.00 for attorney fees, for all of which let execution issue.

All relief not expressly granted herein is denied.

This Order disposes of all parties and claims and is a final and appealable judgment.

....-,-p- Signed this 1 day of July 2016.

Pagel of2 FIN AL JUDGMENT

TabB

.. ,. . RECORD OF MEDIATION AGREEMENT : :· ..·: ·.': : •, / ,::. .

On tbe i 8h da) of June.2015 with Be11 Pluymen serving as mediator. the following case w~s mediated: 1 1

Re: Cause No. D-l-GN- lJ-003405; K.Hl)A et al. v. Danesl?fou, et al.; In the 53 rd Judicial Distl'ict Court of Travis County, Texas

THE PARTIES HAVE VOLUNTARILY AGREED TO THE FOLLOWING:

This case wns mediated in person with the mediator on March 25, 2015 and fully and finally ·resolved in person between the parties on June l 8, 2015 outside the presence of the mediator at .the scheduled deposition of the parties on June 18, 2015 . That Mediated Settlement Agreement is attached hereto as Exhibit A.

Although the mediator has assisted in di·afting a basic outline of this Settlement Agreeme11t with the parties' counsel as a courtesy to facilitate the final resolution of this dispute, the parties and their counsel bave thoroughly reviewed such outline and have, where necessary, modified it to conform to the requirements of their agreement. All the parties and/or signatories to this Settlement Agreement hereby release the Mediator from any and all responsibility arising from the drafti ng of this Settlement Agreement, ·and by signing this Settlement Agreement acknowledge that they, or their attorneys, have been advised by the mediator that this Settlement Agreement should be independently reviewed by counsel before executing the Agreement.

The partie_s acknowledge that they ha".e npt _been coer~~d py anyone into entering th~s agreem~nt bllt do so of their own free v,iill and independent judgment. They also acknowledge that this is an in·evocable settlement agreement, that they have read it. tmd°erstand it; agree to the tei·ms ~tated, and believe that it is • • f I i :.; I

in their . best interest. . If necessary, this agreement may be enforce.d as a Rule 11 Agreement and as a contractual settlement agreement. Each party acknowledges that thij mediator bas not given them any legal or settlemeI?t . advice and that they have conferred with their own independent legal counsel regarding the advisability of entering into this binding agreement before signing it. th Signed and. agreed to this the 18 day oflune, 2 0 1 5 ~ ~ - - - -

- ~ -,-----~~~ ~

EXHIBIT

J

Exhibit A

MEDIATED SETTLEMENT AGREEMENT

-RE: CAUSE #D-1-GN-13-003405 KHDA V. DANESHJOU et al.

The Parties by their signatures have agreed to the following mediated ·s ettlement agreement:

1. Trey L. Dolezal and KHDA ("Plaintiffs") and DCI and Sally arid Benny Daneshjou ("Defendants") agree to mutually release each other from any and all claims asserted or that could be asserted in the above captioned case and agree to dismiss the above captione.d ~ase with prejudice.

2. The parties agree to keep tltis resolution confidential.

3 . The parties agree to a mutual non-disparagement clause in the settlement agreement.

4. In exchange, Defendants agree to pay to Plaintiffs $2500.00 on the day of execution of this agreement and to pay Plaintiffs an additional $32,500.00 on or before March 1, 2016. If Defendants fail to pay the $32,500.QO on or before March 1, 2016 then they will pay that amount plus an additional $5,000 on or -before June _1 , 2016.

5. Defendants agree that if the property l_pcated at 43 01 Bee Caves Road, Austin, Texas is sold to a third party and funded, Plaintiffs will be paid any and all amounts still owing under this agreement from the proceeds of that sale. Such payment will be made at the time of closing and Defendants agree to instruct the title company to pay such amounts due at the time of closing. Plaintiffs agree that they have no interest c:\irectly or indirectly in the subject property.

6. If Defendants fail to make the payments as set fortl1 above on or befqre June 1, 2016, Defendants agree that Plaintiffs can refile their claims, notwithstanding the prior dismissal and the applicable statutes of limitations, for all claims and/or counterclaims will be tolled by this agreement from the date of the original filing of the above captioned case to 60 days after such failure to pay under this agreement, or alternatively Plaintiffs may elect to enforce this agreement and collect reasonable attorney's fees and interest of to% from the date of the breach to the date of payment.

7. The parties agree to coo·perate in completing all documents necessary to finalize this agreement.

8. Each party will pay their own mediation and litigation costs, including but not limited to attorneys' fees .