Phillip and Benita Young v. Emilio and Mary Sanchez

MEMORANDUM OPINION
No. 04-10-00845-CV

Phillip and Benita YOUNG,
Appellants

v.

Emilio and Mary SANCHEZ,
Appellees

From the 45th Judicial District Court, Bexar County, Texas
Trial Court No. 2003-CI-16473
Honorable Michael Peden, Judge Presiding

Opinion by: Phylis J. Speedlin, Justice

Sitting: Catherine Stone, Chief Justice
Phylis J. Speedlin, Justice
Marialyn Barnard, Justice

Delivered and Filed: October 12, 2011

AFFIRMED

Phillip and Benita Young appeal the trial court’s summary judgment rendered in favor of

Emilio and Mary Sanchez, claiming in part that the court had no jurisdiction to grant summary

judgment. We affirm the trial court’s judgment.

FACTUAL AND PROCEDURAL BACKGROUND

This case began in 2003 as a dispute between neighbors Phillip and Benita Young and

Emilio and Mary Sanchez over a concrete patio extension built by the Sanchezes in a five-foot
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easement between the parties’ zero lot line residences in Woodlake Country Club Estates. The

Youngs claimed the patio extension interfered with their use of the easement and damaged their

property. The Youngs filed a declaratory judgment suit seeking confirmation of the easement

and requesting that the court order the Sanchezes to remove all fences, concrete slabs, and other

materials located within the easement. The Sanchezes answered by asserting a general denial

and several affirmative defenses; they claimed the Youngs were informed of the proposed patio

extension and had raised no objection. The Sanchezes also counterclaimed for nuisance and

invasion of privacy based on the Youngs’ construction of a balcony that overlooks the

Sanchezes’ fenced patio and yard.

In August 2005, the parties mediated the dispute with the Honorable Henry Schuble and

reached a settlement which was memorialized in a “Mediated Settlement Agreement” dated

August 10, 2005 and signed by all parties (the “Settlement Agreement”). Paragraph 2 of the

Settlement Agreement provides, “If any dispute arises with regard to the interpretation or

performance of this agreement or any of its provisions . . . the parties agree to try to resolve the

dispute by phone conference with the mediator who facilitated this settlement.” As part of the

Settlement Agreement, the judge selected an independent engineer to assess whether the

Sanchezes’ concrete patio extension was negatively affecting drainage of the Youngs’ property

and whether their home’s foundation had been damaged, and, if so, the estimated cost of any

necessary repairs; in addition, the parties both agreed to install gutters on their property

bordering the easement and to provide a key to any gate on the easement. Paragraph 3 of the

Settlement Agreement requires the parties to comply with the engineer’s recommendations

within 45 days of the engineer’s report. The engineer’s September 26, 2005 report found that

drainage improvements on the Sanchezes’ concrete patio were needed, and included an estimate

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of $3,393 for the proposed drainage improvements by Lovell Construction Co. When the

Sanchezes commenced work on the drainage project, the Youngs objected that the report did not

address all the issues stated in the Settlement Agreement. In August 2006, the engineer

conducted a second evaluation at the Youngs’ request and prepared a second report in which he

found that the minor foundation movement on the Youngs’ property was caused by shifting of

the clay soil, and could not be attributed to the neighboring patio slab.

Two years passed with no resolution of the dispute. On September 15, 2008, the

Sanchezes filed a “Third Amended Answer and Counterclaims” in which they asserted a new

counterclaim for breach of contract alleging the Youngs had breached the Settlement Agreement

by failing to install gutters on their property as required by Paragraph 5, and by interfering with

the Sanchezes’ ability to comply with the agreement by completing the drainage improvements.

The Sanchezes asserted that they installed gutters on their home in November 2005, within 45

days of the engineer’s report in accordance with the Settlement Agreement, but that the Youngs

had not installed gutters on their property as required by the agreement. The Sanchezes sought

actual damages for the increased cost of completing the drainage project plus attorney’s fees.

The Youngs did not file any pleading in response to the counterclaim.

In 2009, the Sanchezes proceeded with completion of the drainage work on their

property. Lovell Construction’s cost to complete the project had increased by $907 from the

original estimate. The drainage improvements on the Sanchez property were inspected by the

engineer and found to be satisfactory on April 7, 2009.

On August 4, 2010, the Sanchezes moved for a no-evidence summary judgment on the

Youngs’ suit and for a traditional summary judgment on their counterclaim for the Youngs’

breach of the Settlement Agreement and their request for attorney’s fees. The Youngs did not

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respond. On August 27, 2010, the trial court granted summary judgment in favor of the

Sanchezes, ordering that the Youngs take nothing by their suit and awarding the Sanchezes $907

in breach of contract damages and $9,201.57 in attorney’s fees, plus court costs. The court

further ordered the Youngs to install gutters on their home along the zero lot line wall by

October 31, 2010. 1 The Youngs now appeal.

ANALYSIS

On appeal, the Youngs assert the trial court’s summary judgment must be reversed

because: (1) there was a prior court ruling referring the matter back to mediation; (2) jurisdiction

over the matter was vested in the mediator, not the trial court; (3) the Sanchezes’ summary

judgment motion was barred by laches; (4) the Sanchezes failed to prove compliance with a

condition precedent of the Settlement Agreement which required additional mediation; and (5)

alternatively, the award of attorney’s fees is excessive as a matter of law.

Jurisdiction and Mediation

In their first and second issues, the Youngs assert the trial court had no jurisdiction to

grant summary judgment because any dispute was required to go back to mediation under

Paragraph 2 of the Settlement Agreement, and the case had in fact been referred back to

mediation by the trial court on April 13, 2006. The Youngs contend the Settlement Agreement

and an April 13, 2006 court ruling “vested jurisdiction with the mediator not the trial court.”

Although they assert that “the primary basis for this appeal is the lack of jurisdiction,” and “this

case presents a clear cut issue of law,” the Youngs cite no legal authority in support of their

argument. See TEX. R. APP. P. 38.1(i). Because subject matter jurisdiction cannot be waived,

however, we will briefly address the issue of jurisdiction raised by the Youngs. See Tex. Ass’n of

Bus. v. Tex. Air Control Bd., 852 S.W.2d 440, 443-44 (Tex. 1993) (subject matter jurisdiction is
1
The Sanchezes’ brief notes the Youngs installed the gutters in November 2010.

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never presumed and cannot be waived); see also Tex. Natural Res. Conservation Comm’n v. IT-

Davy, 74 S.W.3d 849, 855 (Tex. 2002) (whether a trial court has jurisdiction is a question of law

subject to de novo review).

As noted, supra, Paragraph 2 of the Settlement Agreement recited the parties’ agreement

to “try to resolve” any dispute arising out of the agreement by phone conference with the

mediator. On April 6, 2006, the Sanchezes filed a “Motion to Enforce” the Settlement

Agreement, asserting the Youngs had blocked their completion of the drainage repairs within the

45-day time frame of the agreement. In their briefs, the parties agree that a hearing was held on

the motion to enforce on April 13, 2006, and that the trial court ruled that the issue should be

referred back to the mediator. 2 The Youngs argue that because the Sanchezes did not challenge

the April 13, 2006 ruling referring the dispute back to mediation, and the parties never returned

to mediation, the referral precluded the subsequent granting of summary judgment in favor of the

Sanchezes in 2010; as noted, supra, the Youngs cite no legal authority in support of this

argument.

Even if there were an order referring the case back to mediation in the record before us, it

would not affect the trial court’s jurisdiction over this case. “Subject matter jurisdiction exists

when the nature of the case falls within a general category of cases the court is empowered,

under applicable statutory and constitutional provisions, to adjudicate.” In re Barnes, 127

S.W.3d 843, 846 (Tex. App.—San Antonio 2003, orig. proceeding) (quoting McGuire v.

McGuire, 18 S.W.3d 801, 804 (Tex. App.—El Paso 2000, no pet.)). Texas district courts are

courts of general jurisdiction and are presumed to have subject matter jurisdiction over all

2
The appellate record does not contain a transcript of the hearing or oral ruling on April 13, 2006, and no written
order referring the case back to mediation appears in the record. The only thing in the record to reflect the trial
court’s ruling is a handwritten notation with the judge’s initials on the cover of the case file stating, “4-13-06 …
referring back to mediator.” The docket sheet, however, contains no entry for an order referring the matter back to
mediation or for any other ruling on the motion to enforce.

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matters unless the Texas Constitution or another statute confers exclusive jurisdiction elsewhere.

See TEX. CONST., art. V, § 8; TEX. GOV’T CODE ANN. § 24.007 (West 2004); In re Entergy

Corp., 142 S.W.3d 316, 322 (Tex. 2004). Jurisdiction is vested in a court, not in a particular

individual. See Stine v. State, 935 S.W.2d 443, 444 (Tex. App.—Waco 1996, pet. ref’d)

(“Jurisdiction is the authority conferred upon a court by the constitution and laws of the state

which allows a court to adjudicate litigants’ rights and render a judgment.”).

Section 154.021(a) of the Civil Practice and Remedies Code authorizes a trial court to

refer a pending dispute for resolution by an alternative dispute resolution procedure such as

mediation. TEX. CIV. PRAC. & REM. CODE ANN. §§ 154.021(a), 154.023 (West 2011). When a

matter is referred to mediation, the trial court does not lose jurisdiction over the case as a

mediator does not have the power to render judgment; only the trial court has the authority to

render a final judgment. Id. § 154.023(b) (mediator may not impose own judgment on the

issues); id. § 154.071(b) (West 2011) (providing that the trial court may, in its discretion,

incorporate the terms of a settlement agreement into the court’s final decree disposing of the

case). The trial court retains jurisdiction over the case until a final judgment is rendered

disposing of all parties and issues. Lehmann v. Har-Con Corp., 39 S.W.3d 191, 200 (Tex. 2001).

After entry of a final judgment, the trial court does not lose jurisdiction over the case until its

plenary power expires. See TEX. R. CIV. P. 329b.

A mediated settlement agreement is enforceable in the same manner as any other

contract. TEX. CIV. PRAC. & REM. CODE ANN. § 154.071(a) (West 2011); Hardman v. Dault, 2

S.W.3d 378, 380 (Tex. App.—San Antonio 1999, no pet.). Here, the Sanchezes requested

affirmative relief from the trial court based on the Settlement Agreement through their summary

judgment motion seeking enforcement of the Settlement Agreement and damages for its breach.

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Stevens v. Snyder, 874 S.W.2d 241, 243 (Tex. App.—Dallas 1994, writ denied) (once parties

have accepted settlement agreement, enforcement is by suit upon the contract, either for breach

or specific performance). The Youngs, on the other hand, did not file any response to the

Sanchezes’ summary judgment motion, did not answer or plead any defense to the Sanchezes’

counterclaim for breach of the Settlement Agreement, and did not themselves plead for any

affirmative relief based on the Settlement Agreement. See Pickell v. Guaranty Nat’l Life Ins.

Co., 917 S.W.2d 439, 441-42 (Tex. App.—Houston [14th Dist.] 1996, no writ) (court cannot

take action on mediated settlement agreement without an affirmative request to do so through

pleadings); see also Martin v. Black, 909 S.W.2d 192, 195 (Tex. App.—Houston [14th Dist.]

1995, writ denied). The trial court had jurisdiction to rule on the Sanchezes’ summary judgment

motion and to render a final judgment in this case. The Youngs’ jurisdictional challenges are

without merit, and are overruled.

Laches

Next, the Youngs assert the summary judgment on the Sanchezes’ breach of contract

claim was barred by laches because the Sanchezes did not challenge the April 6, 2006 referral

back to mediation and delayed in filing their summary judgment motion. Laches is an

affirmative defense that must be pled and proved by the party asserting the defense. TEX. R. CIV.

P. 94; Jim Rutherford Invs., Inc. v. Terramar Beach Cmty. Ass’n, 25 S.W.3d 845, 852 (Tex.

App.—Houston [14th Dist.] 2000, pet. denied). An affirmative defense that is not specifically

pled is waived. TEX. R. CIV. P. 94; Kinnear v. Tex. Comm’n on Human Rights ex rel. Hale, 14

S.W.3d 299, 300 (Tex. 2000). The Youngs did not assert laches in any pleading in the trial

court—they did not file an answer to the Sanchezes’ counterclaim for breach of contract or a

response to the Sanchezes’ summary judgment motion. There is nothing in the record to show

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the Youngs ever raised the issue of laches in the trial court or presented any evidence to prove

laches; further, there is nothing to indicate it was tried by consent. Therefore, the defense of

laches was waived. See Cont’l Homes of Tex., L.P. v. City of San Antonio, 275 S.W.3d 9, 15-16

(Tex. App.—San Antonio 2008, pet. denied).

Condition Precedent

The Youngs also assert the Sanchezes were not entitled to summary judgment on their

breach of contract claim because they failed to show their compliance with a condition precedent

to enforcement of the Mediated Settlement Agreement, i.e., to return to the mediator to resolve

any disputes. In their Third Amended Answer and Counterclaims, the Sanchezes pled that they

had attempted to resolve the on-going issues by returning to the mediator. Specifically, the

Sanchezes pled that they had “talked with Judge Schuble and these issues cannot be resolved by

phone conference. Therefore, Counter-Plaintiff brings the issue to this Court for determination.”

In addition, the Sanchezes pled that they had “acted in good faith in order to comply with the

Agreement” by paying their half of the engineer’s fee, installing gutters on the zero lot line side

of their home, and engaging the services of Lovell Construction to make the drainage

improvements to the patio area, which project was then postponed by the Youngs’ objection.

Once a party has generally alleged that all conditions precedent have been performed, the

burden shifts to the other party to specifically deny the conditions precedent that have not

occurred. See TEX. R. CIV. P. 54; Greathouse v. Charter Nat’l Bank-Southwest, 851 S.W.2d 173,

174, 177 (Tex. 1992); Trevino v. Allstate Ins. Co., 651 S.W.2d 8, 11 (Tex. App.—Dallas 1983,

writ ref’d n.r.e.) (plaintiff’s allegation under Rule 54 that all conditions precedent have occurred

shifts the burden of pleading, not proof, to defendant to specifically deny those conditions

precedent that have not occurred). The burden then shifts back to the plaintiff to prove

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performance of the particular conditions precedent that were specifically denied. Betty Leavell

Realty Co. v. Raggio, 669 S.W.2d 102, 104 (Tex. 1984); Phifer v. Nacogdoches Cnty. Cent.

Appraisal Dist., 45 S.W.3d 159, 174 (Tex. App.—Tyler 2000, pet. denied). However, if the

defendant does not identify a specific condition that has not been complied with, it admits that all

conditions precedent have occurred. Greathouse, 851 S.W.2d at 177; Cmty. Bank & Trust,

S.S.B. v. Fleck, 107 S.W.3d 541, 542 (Tex. 2002) (absent a specific denial, plaintiff is relieved of

burden of proving that conditions precedent to recovery have been met). Here, the Sanchezes

alleged their compliance with the requirements of the Settlement Agreement, including making

an attempt to use the mediator to resolve issues related to the Settlement Agreement. The

Youngs did not file any responsive pleading specifically denying the occurrence of a condition

precedent; therefore, they are deemed to have admitted compliance with all conditions precedent.

Greathouse, 851 S.W.2d at 177; Fleck, 107 S.W.3d at 542. Accordingly, we overrule this issue.

Attorney’s Fees

Finally, the Youngs challenge the award of $9,201.57 in attorney’s fees, claiming it is

excessive as a matter of law because it bears no relationship to the $907 awarded in damages.

They suggest a remittitur of $7,000 to reduce the fee award to a reasonable amount of $2,201.57.

A party may recover reasonable attorney’s fees under section 38.001 of the Civil Practice

and Remedies Code if the party (1) prevails on a breach of contract claim and (2) recovers

damages. TEX. CIV. PRAC. & REM. CODE ANN. § 38.001(8) (West 2008); MBM Fin. Corp. v.

Woodlands Operating Co. L.P., 292 S.W.3d 660, 666 (Tex. 2009). The party need only recover

some amount in damages on its breach of contract claim. MBM Fin., 292 S.W.3d at 666. The

amount of attorney’s fees awarded is only required to bear some reasonable relationship to the

amount recovered. Chilton Ins. Co. v. Pate & Pate Enterprises, Inc., 930 S.W.2d 877, 896 (Tex.

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App.—San Antonio 1996, writ denied); Cordova v. Sw. Bell Yellow Pages, Inc., 148 S.W.3d

441, 448 (Tex. App.—El Paso 2004, no pet.). Further, the amount of damages awarded is only

one of several factors used in determining the reasonableness of an attorney fee award. 3

Cordova, 148 S.W.3d at 448; Hicks Oil & Butane Co. v. Garza, No. 04-05-00836-CV, 2006 WL

2263896, at *4 (Tex. App.—San Antonio Aug. 9, 2006, no pet.) (mem. op.).

The fee award here is not excessive in view of the summary judgment record and the

five-year period during which the dispute continued after execution of the Settlement

Agreement. The dollar amount of fees awarded is supported by the uncontroverted affidavits of

attorneys Amy M. McLin and Robert E. Hughes, Jr. detailing the hourly rate each charged and

the legal work each performed on behalf of the Sanchezes in relation to enforcement of the

Settlement Agreement and their breach of contract claim. McLin states she worked 55.1 hours

after execution of the Settlement Agreement through the summary judgment at an hourly rate of

$150 per hour for a total of $7,195.71 in attorney’s fees and incurred $130.86 in expenses; her

affidavit is supported by a detailed billing statement covering the five-year period from August

15, 2005 through August 27, 2010. 4 Hughes, the prior lead counsel for the Sanchezes, states he

worked 12.5 hours at an hourly rate of $150 for a total of $1,875.00 in attorney’s fees; his billing

statement covers the period from February 23, 2005 through June 29, 2006. 5 Both attorneys’

affidavits describe their legal experience and familiarity with customary rates for similar legal

3
The factors frequently considered in determining the reasonableness of an attorney fee award are: (1) the time and
labor required, the novelty and difficulty of the question presented, and the skill required; (2) the likelihood that
acceptance of employment precluded other employment; (3) the fee customarily charged for similar services; (4) the
amount involved and the results obtained; (5) the time limitations imposed by the client or the circumstances; (6) the
nature and length of the professional relationship with the client; (7) the expertise, reputation, and ability of the
lawyer performing the services; and (8) whether the fee is fixed or contingent. Arthur Andersen & Co. v. Perry
Equip. Corp., 945 S.W.2d 812, 818 (Tex. 1997).
4
McLin’s billing statement is Exhibit 33 to the Sanchez summary judgment motion.
5
Hughes’ billing statement is Exhibit 34 to the Sanchez summary judgment motion.

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services, and opine their legal services were reasonable and necessary on behalf of the

Sanchezes. The Youngs did not object to the Sanchezes’ summary judgment proof of attorney’s

fees in the trial court and do not challenge the sufficiency of the evidence on appeal, only the

disproportionality of the attorney’s fees with respect to the damages.

A disproportionate relationship between the amount of damages and attorney’s fees

awarded does not alone render the attorney fee award excessive, and the Youngs cite no other

factor to show the fee award was unreasonable. See, e.g., Northwinds Abatement, Inc. v.

Employers Ins. of Wausau, 258 F.3d 345, 354-55 (5th Cir. 2001) (applying Texas law and

affirming award of $712,000 in attorney’s fees on a recovery of $74,570 in actual damages under

Insurance Code); Herring v. Heron Lakes Estates Owners Ass’n, Inc., No. 14-09-00772-CV,

2011 WL 2739517, at *5 (Tex. App.—Houston [14th Dist.] Jan. 4, 2011, no pet.) (mem. op.)

(upholding attorney’s fees of $71,804 on a breach of contract damages award of $700 in unpaid

homeowner’s maintenance assessments); Padgett’s Used Cars & Leasing, Inc. v. Preston, No.

04-04-00579-CV, 2005 WL 2290249, at *5 (Tex. App.—San Antonio Sept. 21, 2005, no pet.)

(mem. op.) (holding attorney’s fee award that was approximately six times the actual damages

awarded was not excessive in light of entire record). Here, the summary judgment record shows

the case was prolonged for five years after the Settlement Agreement, due in large part to the

Youngs’ objections and conduct that delayed and prevented the Sanchezes’ ability to fully

comply with the Settlement Agreement. We hold the attorney’s fees are not excessive in light of

the prolonged nature of the litigation, and are supported by the record. Accordingly, we overrule

the Youngs’ challenge to the attorney’s fee award.

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Conclusion

Based on the foregoing analysis, all of the Youngs’ issues are overruled, and the trial

court’s judgment is affirmed.

Phylis J. Speedlin, Justice

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