AGREEMENT SETTLING TWO LAWSUITS DID NOT SETTLE THIRD, AND PARTY COULD NOT RELY ON CONTRARY ASSERTIONS

Mikob Properties, Inc. v. Joachim
Dallas Court of Appeals, No. 05-13-01613-CV (May 19, 2015)
Justices Francis, Lang-Miers, and Whitehill (Opinion)
Emphasizing that a settlement agreement had been negotiated by experienced business people represented by counsel, the Dallas Court of Appeals affirmed a take-nothing judgment against parties seeking to expand the scope of that agreement. The written settlement agreement explicitly released all claims related to two pending lawsuits between the “IRC Group” and the “K&K Group.” Although the agreement was executed two weeks after service of a third lawsuit between the same parties, it did not mention the third lawsuit. After litigating the third lawsuit for two years, the K&K Group claimed the settlement agreement released all claims between the parties, so they filed a fourth lawsuit seeking a declaratory judgment and damages for breach of contract or fraudulent inducement. The trial court entered a directed verdict for the IRC Group and awarded them attorneys’ fees as prevailing parties in the declaratory judgment action. On appeal, the Court held the settlement agreement unambiguously excluded the third lawsuit and the K&K Group could not justifiably have relied on contrary statements by the IRC Group or their lawyer concerning the scope and effect of the agreement. The Court also affirmed the fee award.
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