Sutton Levetz, Brenda Gail v. Sutton, Thomas Michael

Reverse and Rendered and Opinion Filed June 3, 2013

S In The
Court of Appeals
Fifth District of Texas at Dallas

No. 05-11-00737-CV

BRENDA GAIL SUTTON LEVETZ, Appellant
v.
THOMAS MICHAEL SUTTON, Appellee

On Appeal from the 401st Judicial District Court
Collin County, Texas
Trial Court Cause No. 401-03472-2009

OPINION
Before Justices O’Neill, FitzGerald, and Lang-Miers
Opinion by Justice FitzGerald
This dispute between siblings Thomas Sutton and Brenda Levetz arises out of a mediated

settlement agreement (“MSA”) in this action and a corollary will contest pending in another

county. Following a determination that Levetz had capacity to enter the MSA, the trial court

signed a final judgment severing Sutton’s breach of contract claim and transferring it to the

county in which the will contest is pending. The court also adopted the MSA as the judgment of

the court and ordered the disbursement of funds as provided in the agreement. In five issues on

appeal, Levetz contends the trial court erred (1) in granting Sutton’s motion to enforce the MSA,

(2) in granting Sutton declaratory relief, (3) in allowing unqualified and unreliable expert

testimony on the issue of capacity, (4) in excluding Levetz’s testimony and the testimony of her

expert, and (5) in severing and transferring the breach of contract claim. We conclude the trial

court erred in granting the motion to enforce the MSA because the only element of the breach of
contract claim tried and considered by the court concerned Levetz’s capacity to enter into the

MSA. Because the issue of capacity is inextricably intertwined with the breach of contract claim,

the trial court erred in severing the claim and transferring it to another county. Accordingly, we

reverse the trial court’s judgment and remand for further proceedings consistent with this

opinion.

BACKGROUND

The death of Sutton and Levetz’s father was the genesis of this contentious dispute

between brother and sister. After his father’s death, Sutton initiated this action complaining that

his father’s December 18, 2008 will left a disproportionate share of the estate to his sister, and

asserted claims of tortious interference, fraud, and breach of fiduciary duty. Levetz answered and

moved to transfer venue of the suit to Bowie County “for convenience and in the interest of

justice,” because the application to probate the will and Sutton’s will contest are pending in

Bowie County.1

The trial court ordered the parties to mediation. The parties engaged in mediation on

February 26, 2010, and ultimately reached a settlement. The settlement was memorialized in the

MSA, which was signed by the parties, approved by their attorneys as to form, and filed with the

court in accordance with Rule 11 of the rules of civil procedure.

Almost four months after the mediation, Levetz filed a motion to set aside the MSA,

alleging her fibromyalgia triggered cognitive problems on the day of the mediation, which,

coupled with sleep deprivation and her medications, resulted in a lack of capacity to enter into a

binding agreement. Sutton moved to compel a mental examination of Levetz. Levetz argued that

the examination should be conducted by a rheumatologist with expertise in fibromyalgia, but the

trial court overruled her objection and ordered Levetz to submit to a psychiatric exam by

1
Sutton’s will contest challenges the will on the grounds of lack of capacity and undue influence.

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Mitchell Dunn, M.D., a forensic psychiatrist. After evaluating Levetz, Dr. Dunn prepared a

report concluding Levetz had the mental capacity to enter into binding contractual relationships

on the day the MSA was signed.

Sutton amended his petition to include a claim for breach of contract and promissory

estoppel, and prayed for damages, or alternatively, “such orders as necessary to compel Levetz to

comply with the terms of [the MSA]”. Sutton also filed a motion to enforce the MSA. The

motion requested the court enter judgment that the MSA “is valid, in force and of full effect.”

Sutton’s motion to enforce the MSA and Levetz’s motion to set aside the MSA were tried

to the bench. During the hearing, both parties focused exclusively on the issue of Levetz’s

capacity to agree to the MSA. Dr. Dunn testified as to his conclusion that Levetz had the

capacity to enter into the MSA. The trial judge refused to allow the mediator to testify about

Levitz’s demeanor and state of mind on the day the MSA was signed, and also excluded the

testimony of Levitz’s expert as not timely disclosed. When the hearing concluded, the court

found Levetz had the mental capacity to agree to the MSA, denied her motion to set it aside, and

granted Sutton’s motion for enforcement.

Sutton then filed a motion to sever, transfer, and enter judgment, and asked the court to

sever his breach of contract claim and transfer it to Bowie County. Sutton’s proposed final

judgment was signed by the trial court.

Levetz filed a motion for reconsideration, or alternatively, for new trial. Levetz argued

that the court’s judgment provided “inconsistent, irreconcilable” relief in that the court purported

to transfer the breach of contract claim it had already ruled upon. Levetz further argued the

evidence was legally insufficient to support Sutton’s breach of contract claim because Sutton

presented no evidence of the essential elements of a breach of contract claim. Finally, Levetz

complained that Dr. Dunn’s testimony had been erroneously admitted into evidence and her

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testimony and that of her expert had been erroneously excluded. In response, Sutton argued that

Levetz mischaracterized the court’s ruling because “the Court was only deciding the

enforceability of the [MSA]. The Court did not take up, and was not asked to take up, Sutton’s

claim for breach of contract and the resulting damages and attorney’s fees.”

Sutton then filed a motion to modify the final judgment. The motion recited that it was

for the purpose of addressing issues raised by Levetz in her motion for reconsideration, and to

“clarify the procedural aspects of [the] court’s resolution of this matter.” Sutton described the

requested modifications to the court’s judgment as follows:

 A specific statement by the Court that it was considering the
parties’ competing requests for declaratory judgment with regard
to the enforceability of the [MSA];

 A specific statement by the court that it was considering only the
parties’ competing request[s] for declaratory judgment;

 Orders by the Court denying [Levitz’s] request for declaratory
judgment; and

 [An] order by the court that all claims that were the subject of the
[MSA] are dismissed in accordance with the [MSA].2

The trial court denied Levetz’s request for reconsideration and a new trial, granted

Sutton’s motion to modify the judgment, and signed a new final judgment. The final judgment

grants Sutton’s “request for declaratory judgment,” adopts the MSA as part of the judgment,

severs Sutton’s breach of contract claim, and transfers the breach of contract claim to Bowie

County. The judgment also orders that interpleaded funds in the registry of the court be disbursed

to Sutton. Upon receipt of both parties’ requests and proposed findings, the trial court made

findings of fact and conclusions of law. This appeal followed.

ANALYSIS

2
Neither party requested declaratory relief in either their pleadings or in their motions. The first mention of declaratory relief appears in
Sutton’s motion to modify the judgment where Sutton urges the court to treat the parties’ respective motions as requests for declaratory relief.

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Severance and Venue

In her fifth issue, Levetz asserts the trial court erred in severing the breach of contract

claim and transferring it to Bowie County. Sutton responds that severance was proper because

the MSA recites that it is performable in Bowie County and Levetz initially agreed to adjudicate

the matter in Bowie County when she filed a motion to transfer venue.3 We begin with the fifth

issue because in the absence of severance there would be no final appealable order subject to our

review. See, e.g., Schieffer v. Patterson, 433 S.W.2d 418, 419 (Tex. 1968).

Rule 41 of the Texas Rules of Civil Procedure states that “[a]ny claim against a party

may be severed and proceeded with separately.” TEX. R. CIV. P. 41. The effect of a severance is

to divide a lawsuit into two or more independent suits that will be adjudicated by distinct and

separate judgments. See Van Dyke v. Boswell, O'Toole, Davis & Pickering, 697 S.W.2d 381, 383

(Tex.1985); see also Beckham Grp., P.C. v. Snyder, 315 S.W.3d 244, 245 (Tex. App. —Dallas

2010, no pet.). The controlling reasons for a severance are to effect justice, avoid prejudice, and

for convenience. See F.F.P. Oper. Partners v. Duenez, 237 S.W.3d 680, 693 (Tex. 2007);

Guaranty Fed. Savs. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 658 (Tex. 1990).

In their administration of Rule 41, trial courts have broad authority and their decisions to

grant or deny a severance will not be reversed on appeal absent an abuse of discretion. Liberty

Nat’l Fire Ins. Co. v. Akin, 927 S.W.2d 627, 629 (Tex. 1996). The discretion vested in trial

courts is not, however, without limits. Theirs is “a sound and legal discretion within limits

created by the circumstances of the particular case.” Womack v. Berry, 156 Tex. 44, 291 S.W.2d

677, 683 (1956). Such discretion may not be exercised contrary to legal rules and principles

applicable in the particular case. See Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998); Del

Valle Indep. Sch. Dist. v. Lopez, 863 S.W.2d 507, 513 (Tex. App.—Austin 1993, writ denied).

3
Levetz subsequently withdrew her motion to transfer venue.

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 Here, the trial court’s severance necessarily implies a conclusion that Levetz’s capacity to

agree to the MSA and Sutton’s claim that Levetz breached the MSA can properly be determined

in independent lawsuits culminating in distinct and separate judgments. We disagree.

The capacity to agree to the MSA and the alleged breach of the MSA are so interwoven

that they involve the same facts and issues. To recover on his breach of contract claim against

Levetz, Sutton had to establish that (1) a valid contract existed; (2) he performed or tendered

performance; (3) Levetz breached the contract; and (4) Sutton was damaged as a result of

Levetz’s breach. See Winchek v. Am. Express Travel Related Servs. Co., 232 S.W.3d 197, 202

(Tex. App.—Houston [1st Dist.] 2007, no pet.). The elements required for the formation of a

valid contract are: (1) an offer, (2) acceptance in strict compliance with the terms of the offer, (3)

a meeting of the minds, (4) each party’s consent to the terms, and (5) execution and delivery of

the contract with the intent that it be mutual and binding. Cessna Aircraft Co. v. Aircraft

Network, L.L.C., 213 S.W.3d 455, 465 (Tex. App.—Dallas 2006, pet. denied). Levetz’s claim

that she lacked the mental capacity to assent is a defense to the formation of the contract. See In

re Morgan Stanley & Co., Inc., 293 S.W.3d 182, 186 (Tex. 2009).

The trial court’s severance did not avoid prejudice or further convenience. Instead, it

separated interwoven issues that share facts and issues that should be tried together. See Fuentes

v. McFadden, 825 S.W.2d 772, 779–80 (Tex. App.—El Paso 1992, no writ) (reversing severance

and concluding severed claim interwoven with remaining action where same grounds asserted in

severed claim were asserted as legal excuse to contract claim in remaining action); Bentley Vill.,

Ltd. v. Nasits Bldg. Co., 736 S.W.2d 919, 922–23 (Tex. App.—Tyler 1987, no writ) (concluding

trial court abused discretion in severing clam arising out of same contract that was subject of

unsevered claims); McWilliams v. Gilbert, 715 S.W.2d 761, 764 (Tex. App.—Houston [14th

Dist.] 1986, no writ) (reversing severance where unsevered claim sought equitable reformation

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of part’s obligation which would affect party’s liability under the severed contract claim).

Therefore, we conclude the trial court abused its discretion in severing the breach of contract

claim.

Based on our review of the record, the transfer of the contract claim to Bowie County

appears to be predicated solely on its severance from the instant case. Because we have

concluded the severance was in error, the transfer of the claim as a result of the severance was

also in error. Levetz’s fifth issue is sustained.

Our determination that the severance order was erroneous does not deprive us with

jurisdiction over the appeal. “‘[A] judgment which possesses all of the attributes of finality can

[not] be regarded as interlocutory merely because the court may have erred in ordering a

severance which it had the power to grant.”’ Bird v. Lubricants, USA, No. 2-06-061-CV, 2007

WL 2460352, at *3, (Tex. App.—Fort Worth Aug. 31, 2007, pet. denied) (mem. op.) (quoting

Pierce v. Reynolds, 329 S.W.2d 76, 79, n.1 ( Tex. 1959)); see also Rucker v. Bank One Tex.,

N.A., 36 S.W.3d 649, 652 (Tex. App.—Waco 2000, pet. denied) (holding determination of error

in severance does not preclude consideration of remaining issues on appeal). Therefore, having

concluded the severance and transfer constituted an abuse of discretion, we now turn to the

remaining issues.

Enforcement of the MSA

In her first two issues, with multiple subparts, Levetz argues the trial court erred in

granting relief on Sutton’s motion to enforce the MSA. Levitz first argues there is insufficient

evidence to support a breach of contract or the award of specific performance. Levetz also

complains that the judgment does not conform to the pleadings and there is no evidence to

support declaratory relief. Finally, Levetz asserts Sutton waived breach of contract as a ground to

support the trial court’s order because the trial court made no findings on the breach of contract

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claim. We begin our inquiry by examining the sufficiency of the evidence to support breach of

contract and specific performance.

In an appeal of a judgment rendered after a nonjury trial, a trial court’s findings of fact

have the same weight as a jury’s verdict, and we review the legal and factual sufficiency of the

evidence used to support them just as we would review a jury’s findings. Catalina v. Blasdel,

881 S.W.2d 295, 297 (Tex. 1994). In conducting a legal sufficiency review of the evidence, we

must consider all of the evidence in the light most favorable to the verdict and indulge every

reasonable inference that would support it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex.

2005). In determining whether legally sufficient evidence supports the finding under review, we

must consider evidence favorable to the finding, if a reasonable fact finder could consider it, and

disregard evidence contrary to the finding, unless a reasonable fact finder could not disregard it.

Id. at 827. When a party attacks the legal sufficiency of an adverse finding on which it did not

have the burden of proof, it must demonstrate that there is no evidence to support the adverse

finding. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983); Bellino v. Comm’n for Lawyer

Discipline, 124 S.W.3d 380, 385 (Tex. App.—Dallas 2003, pet. denied). We will sustain a legal

sufficiency or “no evidence” challenge if the record shows one of the following: (1) a complete

absence of evidence of a vital fact, (2) rules of law or evidence bar the court from giving weight

to the only evidence offered to prove a vital fact, (3) the evidence offered to prove a vital fact is

no more than a scintilla, or (4) the evidence establishes conclusively the opposite of the vital fact.

City of Keller, 168 S.W.3d at 810.

We review a trial court’s conclusions of law de novo, and we will uphold the conclusions

if the judgment can be sustained on any legal theory supported by the evidence. BMC Software

Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002). Although a trial court’s

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conclusions of law may not be challenged for factual sufficiency, we may review the legal

conclusions drawn from the facts to determine whether the conclusions are correct. Id.

The MSA provides for both parties’ removal of personal property from the family home,

the appointment of a mutually agreeable executor, dismissal of this case and the will contest, and

the sale and division of real and personal property. The MSA further provides for the

disbursement of certain insurance funds interpleaded into the registry of the court. The trial

court’s judgment adopts the MSA in its entirety, dismisses all claims other than the breach of

contract claim and “request for declaratory judgment,” and specifically orders that the $19,500 in

the registry of the court be disbursed to Sutton. In essence, the trial court’s judgment orders

specific performance. See, e.g., Gunter v. Empire Pipeline Corp., 310 S.W.3d 19, 22 (Tex.

App.—Dallas, 2009 pet. denied) (concluding judgment essentially ordered specific performance

of settlement agreement without proper proceedings, pleadings, and proof).

Specific performance is the remedy of requiring exact performance of a contract in the

specific form in which it was made. BLACK’S LAW DICTIONARY 1138 (6th ed. 1990). The

equitable remedy of specific performance may be awarded upon a showing of breach of contract.

Stafford v. S. Vanity Magazine, Inc., 231 S.W.3d 530, 535 (Tex. App.—Dallas 2007, pet.

denied). Specific performance is an alternative remedy to damages. See Paciwest, Inc. v. Warner

Alan Props., L.L.C., 266 S.W.3d 559, 575 (Tex. App. — Fort Worth 2008, pet. denied). A party

seeking specific performance must plead and prove (1) compliance with the contract including

tender of performance unless excused by the defendant’s breach or repudiation and (2) the

readiness, willingness, and ability to perform at relevant times. DiGiuseppe v. Lawler, 269

S.W.3d 588, 593–94, 601 (Tex. 2008); see also 17090 Parkway, Ltd. v. McDavid, 80 S.W.3d

252, 258 (Tex. App.—Dallas 2002, pet. denied). Therefore, our analysis turns on whether the

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evidence establishes a breach of contract or other conditions upon which an award for specific

performance might be properly predicated.

The difficulties in this case stem from the trial judge’s use of a summary proceeding to

enforce the MSA. It is well established that when consent to a written settlement agreement has

been withdrawn, a court may not render an agreed judgment on the settlement agreement, but

rather may enforce it only as a written contract. Mantas v. Fifth Court of Appeals, 925 S.W.2d

656, 658 (Tex. 1996). Significantly, “the law does not recognize the existence of any special

summary proceeding for the enforcement of a written agreement, even one negotiated in the

context of a mediation.” Gunter, 310 S.W.3d at 22 (citing Cadle Co. v. Castle, 913 S.W.l2d 627,

631 (Tex. App.—Dallas 1995, writ denied)); see also Martin v. Black, 909 S.W.2d 192, 195

(Tex. App.—Houston [14th Dist.] 1995, writ denied) (“When the legislature enacted the ADR

statute, it did not order the courts to follow a special procedure applicable only to mediated

settlement agreements”). Thus, the party seeking enforcement of an agreement for which consent

has been withdrawn must bring an action for breach of contract. See Cadle, 913 S.W.2d at 630.

Like any other breach of contract claim, a claim for breach of settlement agreement is subject to

the established procedures of pleading and proof. Ford Motor Co. v. Castillo, 279 S.W.3d 656,

663 (Tex. 2009). A party against whom a claim for breach of contract has been asserted is

entitled to be confronted by appropriate pleadings, assert defenses, conduct discovery, and

submit factual disputes to a fact finder. See Staley v. Herblin, 188 S.W.3d 334, 336 (Tex. App.—

Dallas 2006, pet. denied).

As previously noted, recovery on a breach of contract claim requires proof of a valid

contract, performance or tendered performance, breach, and damages. See Winchek, 232 S.W.3d

at 202. Although Sutton amended his petition to include a breach of contract claim, the summary

proceeding did not address all elements requisite to recovery for breach of contract. Instead, the

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hearing focused exclusively on whether Levetz had the capacity to agree to the MSA. Sutton did

not argue or offer evidence that he performed the MSA, tendered performance, or was ready,

willing, and able to perform. There was also no evidence that Levetz breached a material term of

the MSA, or that Sutton suffered any damages. In short, there is no evidence in the record that

Levetz breached the MSA or that Sutton was otherwise entitled to specific performance.

Significantly, the trial court’s recitations in the final judgment describe the limited scope

of the proceeding as involving ‘[a]ll matters in controversy concerning [Levetz’s] capacity to

enter into the [MSA].” The court concluded that “after hearing evidence and arguments of

counsel . . . [Levetz] failed to demonstrate that she lacked capacity to enter into the [MSA].” In

its findings of fact and conclusions of law, the court found, inter alia, the MSA is an enforceable

contract under Texas law and as between the parties, the MSA was formed by a meeting of the

minds and supported by consideration, and Levetz failed to establish she lacked the mental

capacity to enter the agreement. These findings, and the evidence in the record, support only the

first element of a breach of contract claim — the existence of a valid contract. See Cessna

Aircraft, 213 S.W.3d at 465.

The fact that the trial court severed and transferred the breach of contract claim is further

indication that there was no adjudication of breach. Yet, despite the recitations concerning the

narrow scope of the hearing, and the severance and transfer of the breach of contract claim, the

relief afforded in the judgment goes beyond the trial court’s limited determination that the MSA

is a valid and enforceable contract. Indeed, after concluding that the MSA is an enforceable

contract, and expressly reserving the question of breach, the judgment then awards a remedy for

breach in the form of specific performance. It is axiomatic, however, that a determination that an

agreement is enforceable — i.e. capable of being enforced — does not equate to a determination

that a party is entitled to specific performance. On this record, in the absence of evidence to

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establish tendered performance, breach, or repudiation, there is insufficient evidence to support

the award of specific performance. See Pena v. Smith, 321 S.W.3d 755, 758 (Tex. App.—Fort

Worth 2010, no pet.) (concluding evidence legally insufficient to support action to enforce

settlement agreement). Therefore, the trial court’s judgment is in error. The challenges to the

sufficiency of the evidence to support breach of contract and specific performance set forth in

Levetz’s first issue are sustained. We remand the case to the trial court to determine whether the

entire case should be transferred to Bowie County or, if the court determines that the case should

not be transferred to Bowie County, for a determination on the merits of the breach of contract

claim. Because we have concluded the trial court erred in awarding specific performance, we

need not consider Levetz’s remaining issues. See TEX. R. APP. P. 47.1.

CONCLUSION

We reverse the trial court’s judgment and remand the case to the trial court for further

proceedings consistent with this opinion.

/Kerry P. FitzGerald/
KERRY P. FITZGERALD
110737F.P05 JUSTICE

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 S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT

On Appeal from the 401st Judicial District
Court, Collin County, Texas
No. 05-11-00737-CV V. Trial Court Cause No. 401-03472-2009.
Opinion delivered by Justice FitzGerald.
SUTTON, THOMAS MICHAEL, Appellee Justices O'Neill and Lang-Miers
participating.

In accordance with this Court’s opinion of this date, the judgment of the trial court is
REVERSED and judgment is RENDERED that:

It is ORDERED that appellant SUTTON LEVETZ, BRENDA GAIL recover their costs
of this appeal from appellee SUTTON, THOMAS MICHAEL.

Judgment entered June 3, 2013

/Kerry P. FitzGerald/
KERRY P. FITZGERALD
JUSTICE

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