Cooper v. Cooper presented an issue about the entry of a consent judgment after one of the parties withdrew its approval. The Fifth Court found that by the time judgment was rendered, the trial court was on notice about the issue with that party’s consent, making it an abuse of discretion to proceed to entry of judgment based on the earlier agreement. No. 05-20-00507-CV (May 4, 2021) (mem. op.) This topic can be surprisingly challenging in Texas state practice given the wide range of agreements covered by Tex. R. Civ. P. 11 — this is a 2019 article that I co-authored about some of those procedural issues.
Category Archives: Rule 11
Gharavi owned a business that won an arbitration against Khademazad. Gharavi sued to enforce the award, and along the way, made a comment about Khademazad and the award on Yelp. The parties resolved their differences and entered a settlement agreement of the lawsuit about the award, in which Khademazad released all claims “directly or indirectly attributable to the transaction or occurences made the basis of this lawsuit.” Several weeks later, Khademazad sued for libel and similar claims based on the Yelp post. The Fifth Court found that this suit was barred by the release: “Without question, the Yelp review was, if not directly, then indirectly attributable to Khademazad’s failure to pay for Aidris’s services and the lawsuit that followed. Khademazad’s claims here are clearly within the subject matter of the release.” Gharavi v. Khademazad, No. 05-20-00083-CV (Feb. 2, 2021) (mem. op.).
“[Tex. R. Civ. P.] 11 provides that ‘no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record.’ The purpose of the rule is to relieve the courts of the necessity of resolving disputes over the terms of oral agreements relating to pending suits. As explained in [Anderson v. Cocheu], however, in enforcing rule 11 [agreements] ‘the Texas Supreme Court has been mindful of the fact that the rule may be said to abridge the substantive right of persons to enter into oral contracts.’ Consequently, courts have balanced the purpose of the rule with the ability to make oral agreements, resulting in recognition of certain equitable exceptions to rule 11’s writing requirement. One exception to the writing requirement arises when the oral agreement is undisputed. ‘In cases where the existence of the agreement and its terms are not disputed, the agreement may be enforced despite its literal noncompliance with the rule.’” In re Estate of Powell, No. 05-19-00689-CV (Aug. 4, 2020) (mem. op.).
The recent Texas Supreme Court case of Pathfinder Oil & Gas v. Great Western Drilling reminds: “Parties can . . . waive their right to proof of a fact or an element of a claim through a written stipulation or one made in open court.” No. 18-0186 (Tex. May 24, 2019). Such agreements, commonly called “Rule 11 Agreements” in Texas practice for the relevant state rule of civil procedure, are “contracts relating to litigation” and are “construe[d] . . . under the same rules as a contract.” The more challenging question about a challenge to formation of such an agreement, rather than its interpretation, is the subject of a recent article that I co-authored in a State Bar Litigation Section publication.
Rasul v. Rasul involved an unusually exotic forum non conveniens dispute, comparing the courts of McKinney, Texas to those in Afghanistan and Pakistan. The Fifth Court affirmed dismissal of the dispute. The threshold issue – whether the courts of those two countries are “available forums” – was resolved by a decidedly un-exotic point about the role of stipulations, of broad 
general interest outside of this context:
A defendant may demonstrate the availability of a forum by stipulating that it would submit to personal jurisdiction there. Appellees offered their consent to jurisdiction in writing in their motion to dismiss and in their reply brief in support of that motion; they repeated the offer at the hearing on the motion to dismiss. “A ‘stipulation’ is an agreement, admission, or concession made in a judicial proceeding by the parties or their attorneys respecting some matter incident thereto.” Appellees’ concession that they would submit to jurisdiction was made by their attorneys during the judicial proceeding surrounding the motion to dismiss. It was an effective stipulation, and therefore was sufficient to establish Afghanistan and Pakistan as available forums.
When styled as a “Rule 11 Agreement,” the case law about this kind of stipulation can be surprisingly confusing; this straightforward treatment of the point helps clarify those cases. No. 05-17-00612-CV (Dec. 17, 2018) (mem. op.)
The parties in a workplace injury lawsuit entered into a Rule 11 agreement to abate the suit while they conducted limited discovery and mediation. A second Rule 11 agreement continued the abatement until one of the parties would file a motion to re-open the case. Notwithstanding those Rule 11 agreements, the parties were also subject to a binding arbitration clause contained in the employer’s injury benefit plan. The parties disputed whether they had each complied with their discovery obligations under the Rule 11 agreements, which led the employer to move to re-open and to compel arbitration. The trial court denied the motion and ordered that the case remain abated until the Rule 11 discovery was completed.
The Dallas Court of Appeals reversed. The Court first held that the case was subject to interlocutory appeal because the trial court’s order “affirmatively denies Baylor’s motion to compel arbitration over at least a portion of the proceeding . . . .” (The opinion noted that this holding conflicts with a pair of decisions out of the El Paso Court of Appeals, possibly setting up the case for further review by the Texas Supreme Court.) As to the discovery, the Court agreed with the defendant that the Rule 11 had expired by its own terms when the employer moved to re-open the lawsuit, mooting the completion of the agreed-upon discovery as an ongoing issue. But because the trial court had not actually ruled on the employer’s motion to compel arbitration, the Court of Appeals remanded for formal consideration of the case’s arbitrability.
Baylor Univ. Med. Ctr. v. Greeson, No. 05-14-01342-CV
The owners of a company that owned and operated three ASI Gymnastics centers attempted to effectuate a business divorce via a Rule 11 agreement calling for the appointment of a panel of appraisers. A dispute ensued over how the appraisers were to do their work, and that led the parties back to the courthouse to sort out the terms and enforceability of the Rule 11. The trial court ruled that the agreement was valid, and the Court of Appeals affirmed. While the plaintiffs argued that the agreement lacked essential terms as to the interest rate and payment period for the buyout, the Court of Appeals held that the agreement itself (represented in a series of email exchanges between the attorneys) stated that those terms were not the “heart of the proposal,” and the rest of the terms were indeed agreed upon. (Notably, the buyout funds were actually tendered as a lump sum, rendering the interest rate and payment terms moot.) The Court also rejected the plaintiffs’ contention that the Rule 11 was unenforceable because it was not manually signed, ruling that they had not timely objected that the electronic signature blocks on the emails were invalid as signatures for a Rule 11 agreement. However, the Court reversed and rendered an award of attorney fees in favor of the defendants, concluding that the dispute was already before the trial court when the defendants filed a declaratory judgment counterclaim that they had validly complied with the Rule 11 agreement.
Crews v. DKASI Corp., No. 05-14-00544-CV
In this divorce proceeding, the parties negotiated and signed (but did not file with the Court) a Final Divorce Decree. Over the next year, the parties continued to negotiate the Final Decree even though they had already finalized and signed a prior version. These additional negotiations broke down and the parties could not arrive at a new agreement, so one party filed the previously signed version with the court, which the judge accepted.
When the trial court refused to set aside the Final Decree, this appeal followed, with the party challenging the Final Decree arguing that the agreement did not meet Rule 11’s requirements because it was not filed before it was signed by the trial judge. The Court of Appeals disagreed, holding that “[a]lthough rule 11 requires the writing to be filed as part of the record, the rules does not state when the writing must be filed.” According to the Court, Rule 11 only requires the agreement to be filed before it is sought to be enforced.
In 2005, Parkwood Creek Owner’s Association sued Aharon Chen for Chen’s failure to complete the repair work Parkwood had hired him to complete, as well as for Chen’s failure to repair the defective work that he did complete. This suit settled in March 2008, with the parties entering into a Rule 11 Agreement whereby Chen agreed to make specified monthly payments to Parkwood and to remedy some of his previous shoddy work. Several months later, Parkwood moved to enforced the Rule 11 Agreement, claiming that Chen had failed both to deliver the stipulated materials and to deliver them at the specified time. After an bench trial, the court found for Parkwood and entered judgment against Chen for $30,000 (the agreed-to liquidated damages amount) and for $7,500 in attorney’s fees.
On appeal, Chen argued, among other things, that he substantially performed the contract and that Parkwood itself committed a prior material breach by not giving Chen a list of materials. The Court of Appeals rejected Chen’s arguments, holding that the evidence was sufficient to establish a breach of the Rule 11 Agreement. The Court found that Chen did not, in fact, provide the right materials, and that he refused to show up to inspections. It further found that Chen had met with Parkwood representatives and determined the precise materials needed for repair. The Court thus sustained the trial court’s decision and upheld the liquidated damages provision.
Aharon Chen v. Parkwood Creek Owner’s Association, Inc., No. 05-10-015511
