Superbash 2017, LLC v. Fun Fest Entm't

634 S.W.3d 471

SUPERBASH 2017, LLC, Edward Corral and Thaddeus Berry, Appellants

v.FUN FEST ENTERTAINMENT, John Hardy, Corey Williams and Lorenzo Ware, Appellees

NO. 14-19-00190-CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinion filed October 5, 2021

Brent Clark Perry, Joseph Michael Gourrier, Houston, for Appellants.

Joseph L. Lanza, San Antonio, Steven Costello, Houston, for Appellees.

Panel consists of Justices Zimmerer, Poissant, and Wilson.

Randy Wilson, Justice

Three parties to a settlement agreement appeal the trial court's judgment after a bench trial in which the trial court rendered a money judgment against them based on the plaintiffs’ claims for breach of a written settlement agreement. The appellants assert that the settlement agreement is unenforceable because two parties to the agreement failed to sign it. However, at trial, appellants took the opposite position—that the settlement agreement was a valid and enforceable contract but that the other side materially breached the agreement first. Concluding that appellants’ arguments lack merit, we affirm.

I. FACTUAL AND PROCEDURAL BACKGROUND

In 2017, Houston hosted the National Football League's Super Bowl LI. Music World Properties, LLC ("Music World") owned an entertainment complex (the "House of Dereon Center") that included "The House of Dereon Event Center." This complex was close to many of the planned Super Bowl festivities and provided a potential venue for hosting a Super Bowl party headlined by musicians. Appellees/plaintiffs John Hardy, Corey Williams, and Lorenzo Ware were the principals of appellee/plaintiff Fun Fest Entertainment ("Fun Fest").¹

Hardy, Williams, and Ware decided that Fun Fest should hold a Super Bowl LI event at Music World's House of Dereon Center the day before Super Bowl LI. Trial evidence showed that Hardy and Williams entered into a contract with Music World to rent its facility from 5 a.m. on Saturday, February 4, 2017 to 5 a.m. on Sunday, February 5, 2017 (the "First Rental Contract").

Defendant/appellant Superbash 2017, LLC ("Superbash") is a Texas limited liability company. Trial evidence showed that defendant/appellant Edward Corral is a "director" of Superbash and that defendant/appellant Thaddeus Berry helped Superbash with artist support and ticket sales. After Music World rented the House of Dereon Center to Fun Fest, Superbash decided that it wanted to hold a Super Bowl party at the same venue on the same date, i.e. , Saturday, February 4, 2017. In September 2016, Corral and Superbash signed a contract with Music World to rent the House of Dereon Center from 5 a.m. on Saturday, February 4, 2017 to 5 a.m. on Sunday, February 5, 2017, the same time period covered by the First Rental Contract. Superbash agreed to pay Music World twice the rent that Fun Fest had agreed to pay. Superbash and Corral were aware of the First Rental Contract. According to Corral, Matthew Knowles² of Music World told Corral that the First Rental Contract had a clause that allowed Music World to buy out the First Rental Contract by returning the deposit and paying Fun Fest ten percent of rental price in the First Rental Contract. Corral testified that Knowles showed him the First Rental Contract and the clause in question. According to Corral, Music World's purported ability to buy out the First Rental Contract made Corral feel good about renting the House of Dereon Center, and Corral signed a rental contract with Music World ("Second Rental Contract").

Fun Fest disagreed that Music World had the ability under the First Rental Contract to buy out Fun Fest. In October 2016, Fun Fest, Hardy, Williams, and Ware (collectively, the "Fun Fest Parties") filed suit in the trial court below against Music World and Knowles (the "Music World Parties"), alleging breach of the First Rental Contract and tortious interference and seeking injunctive relief (the "First Suit"). In this lawsuit, the Fun Fest Parties did not sue Superbash, Corral, or Berry. Trial evidence showed that Fun Fest then obtained a temporary injunction against Music World and Knowles.

The Fun Fest Parties, the Music World Parties, and the Superbash Parties engaged in mediation. Hardy testified that all the parties agreed to a settlement agreement. A written agreement, entitled "Settlement Agreement and Mutual Release of Claims" ("Agreement") was created. Under the terms of the Agreement, Hardy, Williams, Ware, Fun Fest, Knowles, Music World, Corral, Berry, and Superbash were parties to the Agreement. The parties agreed that the "Effective Date" of the Agreement would be "the date the Agreement is executed by all Parties." The Agreement also provided as follows:

(1) As of the Effective Date, the First Rental Contract shall be cancelled, revoked, and rescinded, and neither the Fun Fest Parties nor the Music World Parties shall claim any rights or remedies under the First Rental Contract;

(2) The Music World Parties shall pay to Fun Fest a total of $65,000, as follows: (a) $16,500 within three business days of the Effective Date; (b) $23,500 within fourteen days of the Effective Date; and (c) $25,000 on or before February 10, 2017;

(3) On or before March 10, 2017, the Superbash Parties shall pay to the Fun Fest Parties, by cashier's check made payable to Fun Fest Entertainment, Inc., the amount of $135,000;

(4) No later than 5 p.m. on the calendar day following the Effective Date, the Music World Parties and the Fun Fest Parties each shall file in the First Suit a notice of nonsuit with prejudice of all claims and defenses alleged by the party in the First Suit;

(5) The Agreement provided for the mutual release of certain claims; and

(6) The Fun Fest Parties agreed that they would not, at any time on or after the Effective Date, and until such time as the Music World Parties no longer have any interest in the House of Dereon Center, enter or attempt to enter or be present or attempt to be present on or at the House of Dereon Center.

Section 21 of the Agreement provided that "No Party shall be bound by the terms of this Agreement unless and until each Party has properly executed an original of this Agreement." The last page of the Agreement contained the following language at the top: "IN WITNESS WHEREOF , and intending to be legally bound, each Party hereto has caused this Agreement to be executed as of the date(s) set forth below." Below this language were places for the following parties to sign the Agreement: Music World, Knowles, Fun Fest, Hardy, Williams, Ware, Superbash, Corral, and Berry. The undisputed evidence at trial showed that on January 13, 2017, Knowles on behalf of Music World, Knowles on his own behalf, Hardy, Williams, Ware, Corral, and Berry signed in the place designated for their signature on a counterpart of the last page of the Agreement. No evidence at trial showed that Fun Fest or Superbash ever signed any counterpart of the Agreement in the place designated for the signature of the respective party. On January 13, 2017, the Fun Fest Parties filed a nonsuit with prejudice of all their claims in the First Suit.

After none of the Music World Parties or the Superbash Parties made any payment to any of the Fun Fest Parties under the Agreement, the Fun Fest Parties filed this lawsuit in March 2017.³ The Fun Fest Parties asserted claims against the Music World Parties and the Superbash Parties for breach of the Agreement. The Fun Fest Parties alleged that on or about January 13, 2017, the Fun Fest Parties, the Music World Parties and the Superbash Parties executed a valid and enforceable written contract. The Fun Fest Parties asserted that the Music World Parties and the Superbash Parties had breached the Agreement by failing to make the payments required by the Agreement. The Fun Fest Parties asserted breach-of-contract claims based on alleged breaches of the Agreement. They did not seek relief based on any alleged oral agreement.

In the Superbash Parties’ live answer, they asserted a general denial and the following affirmative defenses: (1) the Fun Fest Parties allegedly lacked the capacity to sue or recover in the capacity in which they had sued; (2) the defense of discharge by material breach; and (3) the defense of offset. Although the Fun Fest Parties alleged that Superbash had executed a valid and enforceable written contract on or about January 13, 2017, Superbash did not set up in its live pleading a denial of the execution of the Agreement by itself or by its authority.

Shortly before this case was set for trial, the Fun Fest Parties and the Music World Parties entered into a settlement agreement, and the trial court severed the Fun Fest Parties’ claims against the Music World Parties into a different case. The claims by the Fun Fest Parties against the Superbash Parties proceeded to a bench trial. Hardy testified that it was his understanding that Corral and Berry signed the Agreement for themselves and also on behalf of Superbash. Corral testified that the Superbash Parties did not have a lawyer representing them in relation to the First Lawsuit. Corral said it was his understanding that the Agreement canceled the First Rental Contract and that pursuant to the Agreement and the Second Rental Contract, Fun Fest was not supposed to be using the name "House of Dereon." When asked what Superbash was supposed to be getting out of the Agreement "that you agreed and obligated yourself to pay $135,000 for," Berry answered, "[w]e were expecting to get the [House of Dereon Center] and everything that was connected to the compound, you know, all their rights to use it for us; not have any interference, be able to put on the event and have a great event." Berry stated that "the whole reason for entering into [the Agreement] was to just — everybody have a clear understanding, you know, what was going to happen." Berry testified as follows:

[Counsel for the Superbash Parties]: And, so, if the [Superbash Parties] did not get what they were hoping for from the [Agreem

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