HOUSTON – A fishing company has lost an appeal on the enforcement of a settlement and the payment of attorney fees.
Texas 1st Court of Appeals Judge Evelyn Keyes issued a 37-page ruling on Aug. 7 reaffirming the previous decision by the 157th District Court in Harris County that found American Fisheries Inc. should pay for the attorney's fees on a settlement made with merchant National Honey Inc.
In the ruling, Keyes affirmed the lower court judgment and denied a request to impose sanctions to American Fisheries, stating that "the trial court did not abuse its discretion in denying National Honey’s request for sanctions."
American Fisheries sued National Honey for breach of contract and fraud on a contract for the sale of frozen shrimp in 2013.
As stated in the ruling, "National Honey counter-claimed, asserting causes of action for violation of the Texas Deceptive Trade Practices Act, breach of express and implied warranties, fraud and breach of contract."
After four years of litigating in court, both parties decided to settle the issue.
The ruling mentioned that both parties "appeared before a special master on Jan. 17 and 18, 2017, to pre-admit exhibits according to the schedule set by the trial court; but, instead, the parties reached a settlement and read their Rule 11 agreement into the record on Jan. 18, 2017."
The agreement, as written in the ruling, contained 10 paragraphs and stated that National Honey "would pay a lump sum settlement via wire transfer to American Fisheries, and, in exchange, American Fisheries would 'dismiss with prejudice all claims asserted or which could have been asserted in this cause of action against' National Honey and its agents."
Some of the terms of the agreement required that National Honey release all of its claims against the appellant, as well as the settlement determined that "no other sums of money shall be paid" than the amount agreed.
On Feb. 20, 2017, the appellee sent the agreement to American Fisheries, which responded with its own settlement, "seeking additional fees that it owed to a financial manager appointed by the trial court pursuant to a 2013 agreed temporary injunction and seeking to address the dismissal of certain third parties, many of whom had not yet appeared before the trial court," the ruling states.
Four days later, as the ruling said, National Honey's attorney contacted the appellate company demanding the company to comply with the agreement, to which American Fisheries responded that the appellee's proposal was "not consistent" with the settlement, pointing that "the agreement stated the amount of total compensation to be paid to American Fisheries and that it would not now agree to pay any additional funds."
Also reported in the ruling, on March 23, 2017, representatives from both parties executed the agreement before the U.S. consulate in Shanghai, China but American Fisheries' attorney "did not convey the signed settlement agreement to the trial court or to National Honey," making "multiple inconsistent representations" instead.
Seven days later, per the ruling, National Honey moved to enforce the agreement through a motion. Later, the company moved to seek $31,000 in attorney's fees "incurred in connection with its motion to enforce the settlement agreement," the ruling said.
The district court granted the motion on April 25, 2017, ordering American Fisheries to comply with the agreement, and ordered the company to pay a total amount of $31,860.50 plus conditional appellate attorney’s fees, the ruling said.
Three days later, a hearing was held to resolve the fees issue. During the procedure, American Fisheries accepted the final agreement, as well as it also agreed to pay the fees. The district court accepted the payment.
On May 27, 2017, National Honey moved to modify the final judgment and sought sanctions to the appellant's attorney's conduct prior to and following the entry of the final judgment, the ruling stated.
The first hearing was held on July 21, 2017, and continued Aug. 3 of that same year.
On Aug. 10, 2017, as the ruling said, the lower court "signed its order denying National Honey’s motion to modify and motion for sanctions."
In her ruling, Keyes stated that "the motion to enforce properly placed the issue of enforceability of the parties’ agreement before the trial court," and that "an agreement to settle a case is enforceable by the trial court if it complies with Texas Rule of Civil Procedure 11," confirming the validity and enforcement of the settlement.
In regards to the sanctions, Keyes' ruling decided that the record of the hearing "provides some evidence to support the trial court’s determination that sanctions were not appropriate," and that "we cannot conclude that the trial court abused its discretion."
When analyzing the fees, Keyes' ruling also mentioned that the lower court "determined that the attorney’s fees awarded in connection with the motion to enforce adequately compensated National Honey for the additional expenses and inconvenience it incurred as a result of American Fisheries’ and (its attorney Xenos) Yuen’s conduct following the parties’ Rule 11 Agreement, and we cannot say that this was an abuse of the trial court’s discretionary powers to sanction parties or their attorneys for purported misconduct."
Texas First Court of Appeals case number 01-17-00340-CV