Maroy International, Inc. v. Ruben and Vicky Cantu, Individually, and D/B/A Twin City Motors ( 2013 )

Fourth Court of Appeals
San Antonio, Texas
MEMORANDUM OPINION
No. 04-12-00193-CV
MAROY INTERNATIONAL, INC.,
Appellant
v.
Ruben and Vicky CANTU, Individually and d/b/a Twin City Motors,
Appellees
From the 111th Judicial District Court, Webb County, Texas
Trial Court No. 2009-CVF-001013-D2
Honorable Raul Vasquez, Judge Presiding 1
Opinion by: Patricia O. Alvarez, Justice
Sitting: Catherine Stone, Chief Justice
Sandee Bryan Marion, Justice
Patricia O. Alvarez, Justice
Delivered and Filed: March 20, 2013
AFFIRMED
Maroy International, Inc. appeals the trial court’s order dismissing the underlying cause
with prejudice. The trial court’s dismissal was based on its enforcement of the parties’ mediated
settlement agreement. Maroy International contends the trial court erred in interpreting the
agreement. We affirm the trial court’s order.
1
The Honorable Elma Teresa Salinas Ender presided over the hearing on the motion to enforce, verbally denied the
motion, and granted a non-suit with prejudice. The Honorable Raul Vasquez presided over the hearing on the
motion to reconsider and signed the written order denying both the motion to enforce and the motion to reconsider.
04-12-00193-CV
BACKGROUND
On August 24, 2010, Maroy International entered into a mediated settlement agreement
with Ruben and Vicky Cantu, individually and d/b/a Twin City Motors. The terms of the
agreement required the Cantus to pay Maroy International $40,000 as follows:
A. $20,000 on or before 20 days from date hereof (Sept 13, 2010), and
B. $20,000 on or before 40 days hereof (Oct 4, 2010).
The agreement further provided, “If such payments are not made, Defendant Ruben Cantu and
Twin City Motors confesses [sic] judgment in the amount of $203,000.00.” Finally, the
agreement provided, “Upon full payment, Plaintiff will file a Non Suit with Prejudice against all
Defendants.”
The facts regarding the subsequent payments by the Cantus are undisputed. On
September 14, 2010, the Cantus tendered a $20,000 cashier’s check, which was negotiated. On
October 12, 2010, the Cantus tendered an additional $5,500 cashier’s check, which also was
negotiated. On October 25, 2010, the Cantus tendered a third $3,500 cashier’s check, which was
not negotiated or returned. Finally, on November 8, 2010, the Cantus tendered an $11,000
cashier’s check, which also was not negotiated or returned. Over six months after the Cantus
tendered the final payment, on May 17, 2011, Maroy International filed a motion to enforce the
mediated settlement agreement, asserting the Cantus did not comply with the agreement.
On June 9, 2011, the trial court held a hearing on the motion. Maroy International argued
that the dates in the settlement agreement “were crucial and are important.” The Cantus argued
that the agreement required a non-suit with prejudice upon full payment, not upon full, “timely”
payment, and full payment had been made. The trial court found that two payments were
accepted late, and one of those payments varied from the amount stated in the agreement. The
trial court further found that the final two payments were made by the Cantus but held by Maroy
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International. The trial court concluded that the entire $40,000 had been paid, and a non-suit
should be entered in compliance with the agreement.
On July 11, 2011, Maroy International filed a motion to reconsider. Maroy International
again argued in its motion that the payment deadlines contained in the agreement were
important. On October 11, 2011, a hearing was held on the motion to reconsider, and the same
arguments were presented by the attorneys. On November 28, 2011, the trial court signed an
order denying the motion to enforce and the motion to reconsider and ordering the cause to be
dismissed with prejudice pursuant to the parties’ mediated settlement agreement.
STANDARD OF REVIEW
“‘A settlement agreement is a contract, and its construction is governed by legal
principles applicable to contracts generally.’” Garza v. Villarreal, 345 S.W.3d 473, 479 (Tex.
App.—San Antonio 2011, pet. denied) (quoting Donzis v. McLaughlin, 981 S.W.2d 58, 61 (Tex.
App.—San Antonio 1998, no pet.)). “Whether a party has breached a contract is a question of
law for the court, not a question of fact for the jury, when the facts of the parties’ conduct are
undisputed or conclusively established.” Grohman v. Kahlig, 318 S.W.3d 882, 887 (Tex. 2010).
Similarly, “[w]aiver is ordinarily a question of fact, but when the surrounding facts and
circumstances are undisputed, as in this case, the question becomes one of law.” Jernigan v.
Langley, 111 S.W.3d 153, 156–57 (Tex. 2003); Spinks v. Brown, 211 S.W.3d 374, 377 (Tex.
App.—San Antonio 2006, no pet.) (quoting Jernigan). We review questions of law de novo.
Tawes v. Barnes, 340 S.W.3d 419, 425 (Tex. 2011).
TIME NOT OF THE ESSENCE
“For timely performance to be a material term of [a] contract, the contract must expressly
make time of the essence or there must be something in the nature or purpose of the contract and
the circumstances surrounding it making it apparent that the parties intended that time be of the
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essence.” Deep Mines, Inc. v. McAfee, Inc., 246 S.W.3d 842, 846 (Tex. App.—Dallas 2008, no
pet.); see also Breof BNK Tex., L.P. v. D.H. Hill Advisors, Inc., 370 S.W.3d 58, 64 (Tex. App.—
Houston [14th Dist.] 2012, no pet.). “Ordinarily, time is not of the essence, and a date stated for
performance does not mean time is of the essence.” Breof BNK Tex., L.P., 370 S.W.3d at 64; see
also Municipal-Admin. Servs., Inc. v. City of Beaumont, 969 S.W.2d 31, 36 (Tex. App.—
Texarkana 1998, no pet.); Shaw v. Kennedy, Ltd., 879 S.W.2d 240, 246 (Tex. App.—Amarillo
1994, no writ). “Unless the contract expressly makes time of the essence, the issue is a fact
question.” Breof BNK Tex., L.P., 370 S.W.3d at 64. In this case, the trial court was the trier of
fact. Moreover, because the facts are undisputed, whether time is of the essence becomes a
question of law. See Herber v. Sanders, 336 S.W.2d 783, 784–85 (Tex. Civ. App.—Amarillo
1960, no writ); Dayvault & Newsome v. Townsend, 244 S.W. 1108, 1110 (Tex. Civ. App.—
Dallas 1922, no writ).
In the instant case, the parties’ agreement did not expressly make time of the essence.
Moreover, the mere fact that the agreement related to a settlement does not make time of the
essence. See Consumer Portfolio Servs., Inc. v. Obregon, No. 13-09-00548-CV, 2010 WL
4361765, at *6–7 (Tex. App.—Corpus Christi Nov. 4, 2010, no pet.) (analyzing whether time
was of the essence in a settlement agreement) (mem. op.); Deep Mines, Inc., 246 S.W.3d at 846
(same). Furthermore, no evidence was presented that the parties intended for time to be of the
essence given the nature or purpose of the contract and the circumstances surrounding it. See
Kennedy Ship & Repair, L.P. v. Pham, 210 S.W.3d 11, 20 (Tex. App.—Houston [14th Dist.]
2006, no pet.) (“acceptance of late performance may indicate that it was not intended that time be
of the essence”). Finally, the agreement expressly provided that a non-suit with prejudice would
be entered “[u]pon full payment” without any requirement that such payments be made timely or
by the specified dates. Accordingly, the agreement did not make payment by the stated dates a
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material term of the contract. Since the Cantus made full payment under the terms of the
agreement, the trial court did not err in dismissing the underlying cause with prejudice.
WAIVER
Even if this court had determined that time was of the essence in the parties’ agreement,
the Cantus correctly assert that Maroy International’s actions would have waived that
requirement. “Even where the terms of a contract express that time is of the essence, the
stipulated time may be extended either by agreement or by waiver.” Stevenson v. Adams, 640
S.W.2d 681, 684 (Tex. App.—Houston [14th Dist.] 1982, writ ref’d n.r.e.); see also Laredo
Hides Co. v. H & H Meat Prods. Co., 513 S.W.2d 210, 217–18 (Tex. Civ. App.—Corpus Christi
1974, writ ref’d n.r.e.). In other words, a time of the essence provision may be waived. Kennedy
Ship & Repair, L.P., 210 S.W.3d at 20; 17090 Parkway, Ltd. v. McDavid, 80 S.W.3d 252, 255
(Tex. App.—Dallas 2002, pet. denied). “A waiver of time of performance of a contract will
result from any act that induces the opposite party to believe that exact performance within the
time designated in the contract will not be insisted upon.” Kennedy Ship & Repair, L.P., 210
S.W.3d at 20 (quoting Laredo Hides Co., 513 S.W.2d at 218).
In this case, Maroy International accepted two late payments, one of which also varied
from the amount of the payment to be made. Moreover, Maroy International retained two
additional cashier’s checks, which the Cantus tendered for the remaining balance owed, for over
six months before taking any action thereon. Therefore, the trial court could have determined
that Maroy International waived the provisions in the agreement setting forth the date and
amount of each payment to be made based on its actions. This determination would also have
supported the trial court’s dismissal of the underlying cause.
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CONCLUSION
The trial court’s order is affirmed.
Patricia O. Alvarez, Justice
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