TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-01-00715-CV
Scott Roeglin/Sandra Daves and Alfred Daves, Appellants
v.
Sandra Daves and Alfred Daves/Scott Roeglin, Appellees
FROM THE DISTRICT COURT OF BASTROP COUNTY, 335TH JUDICIAL DISTRICT
NO. 23,317-A, HONORABLE H. R. TOWSLEE, JUDGE PRESIDING
The district court found that there was a valid and enforceable Rule 11 agreement by which
appellants Alfred and Sandra Daves (together Athe Daveses@) agreed to settle their claims against appellee
Scott Roeglin (ARoeglin@) for injuries suffered by Alfred Daves in an automobile collision, in exchange for
payment by Roeglin=s liability insurance carrier of its policy limits. See Tex. R. Civ. P. 11. After a hearing,
the court rendered an interlocutory order granting Roeglin=s motion to enforce the agreement, dismissing the
claims of the Daveses and Universal Underwriters Insurance Company (AUniversal@), Alfred Daves=s
employer=s worker=s compensation insurance carrier, against Roeglin, and denying Roeglin=s request for
attorney=s fees. The district court then severed the matters determined by the interlocutory order and
rendered a final appealable judgment.1 The Daveses appeal, asserting that there is no agreement.2 Roeglin
appeals the denial of attorney=s fees. We will reverse in part and affirm in part the district-court
judgment.
THE DISPUTE
Factual Background
On March 19, 1999, Alfred Daves sustained serious injuries when a vehicle in which he
was a passenger was involved in a collision with Roeglin. Because Daves was injured in the course and
scope of his employment, Universal began paying Daves=s medical expenses. At the time of this dispute,
Universal had made payments to or on behalf of Alfred Daves in excess of $55,000.
Sandra Daves initiated this action against Roeglin, alleging damages for loss of consortium
as a result of the injuries to her husband. Initially, Alfred Daves was not a plaintiff. When Universal learned
of Sandra Daves=s suit, it intervened, asserting a subrogation claim. In an amended petition, Alfred Daves
1
The interlocutory order was signed by Judge Tom McDonald. The severance order was signed
by Judge H.R. Towslee
2
Universal does not appeal. In a March 26, 2002 AAmended Rule 11 Agreement@ with the
Daveses, Universal acknowledges that A[t]he insurance carrier of . . . Roeglin has paid Universal . . . the
sum of $18,020.70 in settlement of Universal[=s] . . . subrogation claim for injuries caused by . . . Roeglin to
Alfred Daves.@
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joined Sandra Daves as a plaintiff and named State Farm Mutual Automobile Insurance Company (AState
Farm@), the Daveses= uninsured/underinsured motorist (AUIM@) insurance carrier, as an additional
defendant. The Daveses and Universal soon discovered that Roeglin=s liability insurance was limited to
$20,023, substantially less than Universal=s subrogation claim. The attorneys for the Daveses and Universal
then commenced discussions concerning the apportionment of Roeglin=s liability insurance.
A series of letters resulted, the first between the Daveses and Universal, followed by
correspondence from Universal to Roeglin and Roeglin to Universal and the Daveses. Roeglin asserts, and
the district court agreed, that these letters, collectively, constitute a valid and enforceable Rule 11 agreement
among the Daveses, Roeglin, and Universal, providing, inter alia, for the dismissal of the Daveses= damage
claims against Roeglin. The Daveses contend that they never had an agreement with Roeglin, and any
agreement reflected by the letters was only between themselves and Universal.
As is germane to this dispute, Texas Rule of Civil Procedure 11 provides that Ano
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.@ Tex. R. Civ. P. 11. A series of letters among
attorneys or parties to litigation may constitute an agreement in writing satisfying Rule 11. Padilla v.
LaFrance, 907 S.W.2d 454, 460 (Tex. 1995).
The Letters
The alleged agreement consists of nine letters. The letters are all among the attorneys for
the Daveses, Universal, and Roeglin. For ease in understanding, however, we will, with the exception of the
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final letter, refer to them as if written by the parties. As a threshold matter, we note that no one letter is
signed by all parties, the attorneys for all parties, or any combination of all parties and their attorneys.
The first letter, from the Daveses to Universal dated October 26, 2000, is apparently in
response to a letter the previous day from Universal to the Daveses that is not before us. Signed by the
Daveses, their attorney, and the attorney for Universal, it provides, in pertinent part:
This letter, when agreed to by all parties by signing below, will confirm settlement of
disputes between Universal . . . and [the] Daves[es], in regards to claims by both
Universal . . . and/or [the] Daves[es] against . . . Roeglin and State Farm . . . and any other
insurance company issuing UIM coverage, in effect at the time of the automobile accident
made the basis of the above styled suit, as follows:
1. All proceeds received from the insurance carrier of . . . Roeglin, in payment of any
claims asserted by either Universal. . . and/or [the] Daves[es] against . . . Roeglin shall
be split ninety percent (90%) to Universal . . . and ten percent (10%) to [the]
Daves[es].
(Emphasis added.) The letter goes on to address the division of UIM and future worker=s compensation
insurance proceeds that might be recovered by virtue of claims by the Daveses as well as other damages
that might be recovered by the Daveses against State Farm. Neither Roeglin nor his insurer is an addressee
or signatory of the letter. The letter contains no signature line for Roeglin or his attorney and does not reflect
that either was forwarded a copy.
On November 15 Universal wrote Roeglin, advising that AUniversal . . . has reached a
settlement agreement with Sandra Daves . . . . Universal . . . will receive 90% of the tendered policy limits
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of $20,023.00 which equates to $18,020.70.@3 Universal requested a Asettlement draft@ and stated it would
Aexecute the appropriate settlement release upon receipt.@ This letter was not signed by the Daveses or
their attorney and does not indicate that Universal sent them a copy.
Two months later, on January 16, 2001, Roeglin sent letters to the Daveses and Universal,
each enclosing a proposed ARelease and Settlement Agreement,@ AAgreed Order of Dismissal,@ and a
check drawn on the account of State and County Mutual Fire Insurance Company, Roeglin=s liability
insurance carrier, dated December 12, 2000. The checks were payable $2002.30 to the Daveses and
$18,020.70 to Universal. Universal signed a slightly revised settlement agreement on March 20. The
agreement provided signature lines for Sandra Daves, Alfred Daves, and Universal, as well as signature lines
for their attorneys to approve and agree to the document. The proposed order provided, inter alia, for the
dismissal of all claims by the Daveses and Universal against Roeglin, and signature lines for the attorneys for
all three parties to approve the order.
On April 2 Roeglin wrote the Daveses, inquiring if there was a problem with the agreement
and when he might expect it to be executed.
On April 3 at the Daveses= request, Roeglin sent them a copy of the agreement as signed by
Universal and requested that they likewise sign it.
3
Although Alfred Daves had signed the October 26 letter, he was not yet a party to the litigation.
At this time, the only parties to the district-court suit were Sandra Daves, Roeglin, and Universal. APlaintiff=s
First Amended Original Petition,@ adding Alfred Daves as a plaintiff and State Farm as a defendant, was not
filed until January 4, 2001. This does not affect our determination of the issues before us.
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An April 16 letter from Universal to Roeglin forwards the original agreement and proposed
order of dismissal, signed by Universal.
The final letter, dated April 25, 2001, from Roeglin=s attorney to the Daveses= attorney,
reads as follows:
I am enclosing a copy of the Release and Settlement Agreement executed by the
authorized representative of Universal . . . .
You indicated that once [Universal] approved and executed the Release and
Settlement Agreement, that you would have [the Daveses] do likewise. Would you please
have [the Daveses] approve and execute the Release Agreement.
I am also enclosing a copy of the Agreed Partial Order of Dismissal With
Prejudice. The Order has been approved and signed by [Universal]=s counsel. Would you
please do likewise.
After doing so, please return to me the signature pages, along with the verification
pages. I will then combine the signature and verification pages into one document, returning
to you a copy. I will then file the Order with the court and provide to you a conformed
copy.
Should you have any questions, please do not hesitate to call me.
Neither the Daveses nor their attorney signed any of the documents provided by Roeglin.
The October 26, 2000 letter was originally filed with the district-court clerk on November
20, 2000 as a Rule 11 agreement between the Daveses and Universal. The other eight letters were filed
with the clerk on September 13, 2001 as exhibits to Roeglin=s motion to enforce the alleged settlement
agreement with the Daveses.
Relying on Padilla, 907 S.W.2d at 460, and all the letters taken together, Roeglin asserts
that the district court Aproperly ruled that there was a valid and enforceable Rule 11 agreement whereby the
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Daveses agreed to settle their claims with . . . Roeglin in exchange for payment of Roeglin=s insurance
carrier=s policy limits of $20,023.@
DISCUSSION AND ANALYSIS
The Daveses= Appeal
If there is to be a Rule 11 agreement between the Daveses and Roeglin, its substance must
be determined by the October 26 letter between the Daveses and Universal, as the remaining eight letters
are no more than cover letters or attempts by Roeglin to confirm an alleged settlement between him and the
Daveses as described in the initial letter. That letter is as significant for its exclusions as its inclusions. It is
neither addressed to nor contains the signature of Roeglin, his attorney, or his insurer, makes no reference to
the amount of Roeglin=s insurance, does not state that the Daveses will release Roeglin from liability to them,
and does not state that the Daveses and Roeglin are settling their dispute. The letter does not reference a
tender of policy limits by Roeglin=s insurer or whether Roeglin has other assets from which either the
Daveses or Universal might satisfy their claims. It does not state that the district-court suit will be dismissed.
The parties to the letter are the Daveses and Universal. The letter confirms the settlement of
disputes between Universal and the Daveses. The letter, although three pages long, contains but two
references to Roeglin. The first confines the settlement between the Daveses and Universal to their
disputes arising from claims they may have against Roeglin. The second describes the proportion in which
the Daveses and Universal will divide insurance proceeds received from Roeglin=s insurance carrier.
The supreme court has held that Rule 11 Ais a general prerequisite for any judgment
enforcing an agreement touching a pending suit,@ and means Aprecisely what it says.@ Kennedy v. Hyde,
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682 S.W.2d 525, 529 (Tex. 1984); Ebner v. First State Bank, 27 S.W.3d 287, 293 (Tex. App.CAustin
2000, pet. denied). AA settlement agreement must comply with Rule 11 to be enforceable.@ Padilla, 907
S.W.2d at 460 (citing Kennedy, 682 S.W.2d at 528). The court has analogized the Ain writing@
requirement of Rule 11 to the statute of frauds. Id. at 460 (citing Tex. Bus. & Com. Code Ann. ' 26.01
(West 1987)). The writing must contain Athe essential elements of the agreement.@ Id. (quoting Cohen v.
McCutchin, 565 S.W.2d 230, 232 (Tex. 1978)). Although the written memorandum must be Acomplete
within itself in every material detail,@ id., it may be in multiple documents. Id. (citing Adams v. Abbott, 254
S.W.2d 78, 80 (Tex. 1952)).
The October 26 letter, standing alone, cannot satisfy Rule 11 because it does not contain
the signature of Roeglin or his attorney. See Tex. R. Civ. P. 11. Likewise, the letter=s failure to address
whether the Daveses would release Roeglin from liability and the dismissal of the Daveses= suit against
Roeglin renders it lacking the completeness required by Rule 11. See Padilla, 907 S.W.2d at 460. For
there to be a valid and enforceable Rule 11 agreement that will support the district-court judgment, these
elements must be provided by the later letters.
Initially, we observe that the multiple-writings scenario presented here is much different from
that examined by the supreme court in Padilla. In Padilla, the LaFrances sued Padilla for damages arising
from an automobile collision. Id. at 455. Padilla=s insurer assumed defense of the claims. Id. at 455-56.
On April 10 Steidley, the LaFrances= attorney, made written demand on Chandler, Padilla=s attorney, Afor
policy limits . . . for full and final settlement of this case,@ specifically instructing that the sum should be paid
on or before 5:00 p.m. on April 23. Id. at 456. Steidley=s demand went on to say, AI look forward to
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receipt of the checks on or before [the] date specified, failing which this offer to settle will be withdrawn.@
Id. Chandler forwarded the letter to Bradshaw, the insurance adjuster handling the claim, who telephoned
Steidley=s office and advised of a medical lien Athat needed to be cleared up in connection with the
settlement.@ Id. Bradshaw did not speak with Steidley himself, and called back two more times, each time
being told by a person other than Steidley that Athe lien had not yet been resolved.@ Id. Bradshaw=s last
call was the morning of April 23. Id. When he had heard nothing by that afternoon, Bradshaw faxed a
letter to Steidley confirming the settlement agreement whereby the insurer Aagreed to meet the policy limit
demands set out in your letter of [April 10].@ Id. Bradshaw went on, AI await word from you regarding the
lien so I know to whom to make [the] drafts payable.@ Id. Before 5:00 p.m., Steidley faxed Bradshaw,
confirming settlement Afor all applicable policy limits,@ requesting that Asettlement checks@ be forward to him,
and advising that Steidley=s Aoffice will . . . take care of the lien . . . out of the settlement funds forwarded by
[Bradshaw=s] office.@ Id. Bradshaw did not see Steidley=s fax until the next morning, April 24. Id.
Approximately one week later, Chandler tendered settlement checks for the policy limits to Steidley, who
refused them, Acontending that Padilla had not timely accepted the April 10 settlement offer.@ Id. at 456-
57.
The supreme court reversed the court-of-appeals judgment affirming the trial-court holding
in favor of the LaFrances, stating that the evidence Aestablished an enforceable settlement agreement as a
matter of law.@ Id. at 462. Central to the court=s holding was the April 23 exchange of faxes between
Bradshaw and Steidley. The court observed that Bradshaw specifically confirmed a A>settlement agreement=
between the parties . . . [but] noted uncertainty as to one detail, payment of the hospital lien, and requested
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guidance from Steidley.@ Id. at 460. The court held that when Steidley responded that the LaFrances
would pay the lien out of the settlement funds, Aspecifically stating that >[t]his letter will confirm that the
above referenced matter has been settled for all applicable policy limits . . . ,=@ he Aassented to Padilla=s
alteration of the mode of acceptance set out in Steidley=s original offer. Rather than requiring actual
payment by a particular deadline, Steidley accepted Padilla=s agreement to pay policy limits as acceptance
of his earlier offer.@ Id.
The difference between Padilla=s facts and those now before this Court are readily
apparent. All of the Padilla correspondence was between the plaintiffs= attorney, on the one hand, and
either the defendant=s attorney or his insurer on the other. Here the initial correspondenceCthe October 26
letterCwas between the attorney for the plaintiffs (the Daveses) and the attorney for the worker=s
compensation insurance carrier for one plaintiff=s (Alfred Daves=s) employer. None of the following eight
letters was signed by the Daveses or their attorney and none reflects an agreement between the Daveses
and Roeglin that the Daveses would accept a specified sum of money from Roeglin, release him, and dismiss
their suit against him.
The exchange of correspondence among the parties reflects no more than the following: (1)
an agreement between the Daveses and Universal as to how to divide any insurance proceeds received
from Roeglin=s insurer (the October 26 letter); (2) Universal=s unilateral notification to Roeglin that it would
accept ninety percent of the limits of Roeglin=s liability insurance and settle with Roeglin (the November 15
letter); (3) Roeglin=s presumption that the Daveses would accept the remaining ten percent of Roeglin=s
insurance and release Roeglin (the January 16 letters). The remaining letters constitute, at best, only an
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argument between counsel concerning whether there was a settlement between the Daveses and Roeglin.
The evidence adduced before the district court at the hearing on Roeglin=s motion to enforce the alleged
agreement comprises little more than each attorney=s Aspin@ on the post-January 16 correspondence and
what was said between them regarding it. The elimination of such bickering is the goal of current Rule 11.
See Kennedy, 682 S.W.2d at 526-29 (describing history and purpose of Rule 11). We hold as a matter of
law that there is no agreement between the Daveses and Roeglin that satisfies the requirements of Rule 11.
Roeglin asserts, however, that equity may excuse strict compliance with Rule 11 to prevent
Aan unfair advantage by the violation of such agreement.@ Williams v. Huling, 43 Tex. 113, 120 (1875).
Indeed, this Court has recognized that Williams may provide such an exception. See Ebner, 27 S.W.3d at
298-99. In Kennedy, the supreme court indicated that an agreement that does not conform to the
requirements of Rule 11 might, for equitable reasons, be enforced because of fraud or mistake. Kennedy,
682 S.W.2d at 529 (citing Burnaman v. Heaton, 240 S.W.2d 288 (Tex. 1951); Williams, 43 Tex. at
120). In Ebner, we did not explore the possible boundaries of a Williams-Kennedy equitable exception
because the trial court had decided the case on competing motions for summary judgment. Ebner, 27
S.W.3d at 290. We reversed the trial-court summary judgment and remanded the cause, specifically noting
that the lack of one party=s signature on an alleged Rule 11 agreement could be Aurged@ at trial. Id. at 304
(citing Williams, 43 Tex. at 120).
The reporter=s record in the case now before us is not lengthy and, as we have previously
noted, consists solely of the testimony of attorneys for Roeglin and the Daveses. It contains no evidence of
fraud, mistake, or unfair advantage, which would allow a court to equitably provide either the signature or
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completeness required by Rule 11 and pronounce a settlement agreement between the Daveses and
Roeglin.
We sustain the Daveses= issue.
Roeglin=s Appeal
Roeglin, analogizing his motion to enforce the alleged Rule 11 agreement to a breach-of-
contract suit, also appeals, asserting that the district court erred in failing to award him attorney=s fees. See
Tex. Civ. Prac. & Rem. Code Ann. ' 38.001 (West 1997) (providing for recovery of reasonable
attorney=s fees for claim based on contract). Because we have held that there was no agreement between
Roeglin and the Daveses, we consider Roeglin=s issue no further and overrule it.
CONCLUSION
Because we have held that there is no Rule 11 agreement between the Daveses and
Roeglin, we reverse the district-court judgment insofar as it dismisses the Daveses= action against Roeglin
and remand that portion for further proceedings consistent with this opinion; in all other respects, we affirm
the judgment.
Lee Yeakel, Justice
Before Chief Justice Aboussie, Justices B. A. Smith and Yeakel
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Affirmed in Part; Reversed and Remanded in Part
Filed: July 26, 2002
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