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Serengeti Resort, LLC v. Esperanza Properties, LP

Court of Appeals of Texas, Fourth District, San Antonio

January 22, 2014

SERENGETI RESORT, LLC and Lori Hagee, Appellants
v.
ESPERANZA PROPERTIES, LP, Esperanza Properties GP, Inc., and Louis Scott Felder, Appellees

From the 216th Judicial District Court, Kendall County, Texas Trial Court No. 10-094 Honorable N. Keith Williams, Judge Presiding.

Sitting: Catherine Stone, Chief Justice, Karen Angelini, Justice Sandee Bryan Marion, Justice

MEMORANDUM OPINION

Catherine Stone, Chief Justice

This appeal arises from the sale of land owned by Esperanza Properties, LP, a Texas limited partnership. The trial court entered two summary judgments before a jury trial was held to resolve the remaining claims. On appeal, Lori Hagee, one of Esperanza's limited partners, and Serengeti Resort, LLC, an entity owned by Hagee, contend the trial court erred in its summary judgment rulings and in its award of attorneys' fees. Hagee and Serengeti also contend the jury charge contained numerous errors, and the evidence is insufficient to support certain jury findings.[1]

Background

The sale of the land by Esperanza occurred after its partners entered into a Compromise Settlement Agreement ("CSA") relating to the disposition of that land. Louis Scott Felder and Hagee were Esperanza's limited partners, and each owned a 49.5% interest in the partnership. A corporate entity, Esperanza Properties GP, Inc., was Esperanza's general partner, and it owned the remaining 1% interest in the partnership. Felder and Hagee each owned a 50% interest in Esperanza GP. Felder was the sole director and officer of Esperanza GP.

When Esperanza was formed, Felder and Hagee were married. When they divorced, they entered into an Agreement Incident to Divorce and a Plan of Exchange governing the disposition of four properties owned by Esperanza at that time. By the time a dispute arose precipitating the negotiation and execution of the CSA, the only tract of land Esperanza owned was a 395 acre tract of land. The underlying cause arises from the disposition of 287 acres of that tract and Hagee's obligation to purchase the remaining 108 acres.

Summary Judgment Rulings

Prior to the jury trial, the trial court entered two orders on competing motions for summary judgment. Pertinent to this appeal, in the first summary judgment order, the trial court concluded that the CSA "released the requirement under the Agreement Incident to Divorce to obtain Lori Hagee's written consent before selling the 287 acre tract as a matter of law." The trial court also concluded that the "Bank of America and Louis Scott Felder debt were legitimate partnership obligations as of the date of the execution of the Agreement Incident to Divorce and Plan of Exchange and such debts were not released by the Compromise Settlement Agreement." In the second summary judgment order, the trial court concluded that Felder had the authority to sell the 287 acres. Hagee challenges each of these conclusions.

A. Standard of Review

We review a summary judgment de novo. Provident Life & Acc. Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003). In reviewing the granting of a traditional summary judgment, we consider all the evidence in the light most favorable to the respondent, indulging all reasonable inferences in favor of the respondent, and determine whether the movant proved that there were no genuine issues of material fact and that it was entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex. 1985). "When both sides move for summary judgment and the trial court grants one motion and denies the other, we review the summary judgment evidence presented by both sides and determine all questions presented." Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). In such a case, "we render the judgment that the trial court should have rendered." Id.

B. Compromise Settlement Agreement Released Hagee's Consent Requirement

In her first issue, Hagee contends the trial court erred in concluding that the provision in the Agreement Incident to Divorce requiring her consent to the sale of Esperanza's 395 acre tract was released by the CSA. This issue is based on the trial court's interpretation of the CSA.

An unambiguous contract is construed as a matter of law. Dynergy Midstream Servs., Ltd. P'ship v. Apache Corp., 294 S.W.3d 164, 168 (Tex. 2009). A contract is unambiguous if it can be given a certain or definite meaning as a matter of law. El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 806 (Tex. 2012). A contract is not ambiguous simply because the parties advance conflicting interpretations. Columbia Gas Transmission Corp. v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996). A contract is ambiguous only if the contract is subject to more than one reasonable interpretation after applying the pertinent rules of contract construction. El Paso Field Servs., 389 S.W.3d at 806.

With regard to the sale of Esperanza's property, the Agreement Incident to Divorce, which was executed on August 31, 2006, stated as follows:

No property will be sold or conveyed from the holdings of Esperanza Properties, LP, without the individual written consent of [Felder] and [Hagee].

The CSA was subsequently executed to be effective June 1, 2008. In the CSA, Esperanza, Felder, and Hagee acknowledged that they had "settled, fully and finally, all of the claims which have been or which could have been asserted by Esperanza, Felder, and/or Hagee in the above-referenced AID [Agreement Incident to Divorce] and Plan [of Exchange] and agree to release each of the Parties from the obligations contained therein." Under the terms of the CSA, Hagee agreed to purchase 108 acres out of the 395 acre tract simultaneously with the sale of the remaining 287 acres. Hagee agreed to pay the same purchase price per acre as paid by the purchaser of the 287 acre tract. Any proceeds due to Hagee from the sale of the 287 acre tract were to be applied to the amounts owed by Hagee to Esperanza in connection with her purchase of the 108 acres. If the proceeds exceeded the purchase price, the excess would be released to Hagee; however, if the proceeds were less than the purchase price, Hagee agreed to pay the difference.

The CSA contained a broad mutual release. In pertinent part, each party released the other from all promises, obligations, and rights arising from, asserted, or assertable in connection with the Agreement Incident to Divorce and the Plan of Exchange. The parties extensively discuss the term "obligation" in their briefs; however, whether the consent required under the Agreement Incident to Divorce is considered to be a promise by the parties to obtain each other's consent, an obligation by Esperanza to obtain her consent, or Hagee's right to preclude a sale without her consent, all such promises, obligations, and rights were released by Hagee when she executed the CSA. See Hong Kong Dev., Inc. v. Nguyen, 229 S.W.3d 415, 459 (Tex. App.—Houston [1st Dist.] 2007, no pet.) (holding indemnity provision ...


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