THANG BB v. DEFY INTERNATIONAL LLC (2025)

OPINION

In this commercial real estate dispute, the tenant, Defy International, LLC, sued the alleged landlords, James Thang, Jennifer Nguyen, Susie Thang, and BB Ventures, LTD, individually and d/b/a Shepherd Commons (collectively, Shepherd), for breach of a lease, fraud, and other claims. After years of litigation, Shepherd filed a petition to enforce a Rule 11 agreement settling the underlying claims. Both sides filed motions for summary judgment, and the trial court denied Shepherd's motion while granting Defy's, effectively ruling that Shepherd take nothing on its claims. The trial court severed the Rule 11 claims and defenses from the underlying action, and both sides appeal.

Shepherd contends that the trial court erred by granting Defy's motion for summary judgment and denying Shepherd's motion because (1) the emails establishing the Rule 11 agreement were signed as required by the rule; (2) the agreement contained all material terms and was breached because Defy failed to sign formal documents, among other reasons; (3) there was no novation; and (4) Shepherd did not repudiate the agreement. Defy contends in its appeal that the trial court erred by severing the Rule 11 claims to permit an appeal. Defy also filed a motion to dismiss, contending that the controversy is moot.

We deny Defy's motion to dismiss, overrule Defy's issues, and sustain Shepherd's issues. Accordingly, we affirm the trial court's severance, reverse the trial court's summary judgment, and render a judgment enforcing the Rule 11 agreement.

I. Background

Shepherd alleges in its petition that in November 2021, Shepherd and Defy exchanged a series of emails and entered into a Rule 11 agreement to settle Defy's claims in the underlying action. The agreement involved the sale of the leased property from Shepherd to Defy and a release of all claims, among other terms. Shepherd seeks to enforce the release.

Shepherd filed a motion for summary judgment based on the Rule 11 agreement, contending among other things that the evidence conclusively established an enforceable agreement that Defy breached. Defy filed its own motion for summary judgment, contending that the parties’ emails did not amount to an enforceable agreement as a matter of law, any such agreement was not signed as required by Rule 11, Shepherd agreed to a novation, and Shepherd repudiated before Defy could perform.

Along with its motion, Shepherd filed a declaration from its attorney Paul Simon, who had negotiated the agreement on behalf of Shepherd. Shepherd attached evidence, including emails amongst Simon, Defy's attorney Paul Pilibosian, and the attorney for codefendants in the underlying case Jason Williams.¹

In the declaration, Simon testified that he and Pilibosian spoke on the phone with a mediator on November 19, 2021, to discuss possible settlement terms. On November 21, Simon sent an offer to Pilibosian and others as follows:

Paul & Andrew –

Jason has authorized me to make the following offer on behalf of his clients, and I am authorized to make this offer on behalf of mine. Jason's and my clients (the “Co-Owners”) offer to sell to Defy International, LLC the Shepherd Commons real property and all improvements thereon (the “Property”) to Defy for $4,375,000, to include the “parking lot” on Huldy on the following additional terms:

1. Terms specific to sale

a. Closing to occur within 45 days;

b. “As is, where is”;

c. The Co-Owners will make no representations or warranties, other than the warranty of title;

d. Defy will agree in a to-be-drafted settlement agreement that Co-Owners have made no representations or warranties have been made and Defy is not relying on any representations or warranties made by Co-Owners; and

e. Sale not conditioned upon obtaining financing or any financing terms.

2. Standard settlement-type representations and warranties (e.g., parties are authorized to settle claims, no party has assigned its claims, etc.);

3. Mutual/reciprocal releases;

4. Dismissal with prejudice of all parties’ claims, counterclaims, etc., within 10 days of closing;

5. Confidentiality, with limited exceptions for parties’ tax preparers, attorneys, spouses, and similar persons;

6. Other standard and customary terms, including terms to enforce any breach of the settlement agreement; and

7. My office will draft more definitive settlement documents to be executed before Thanksgiving Day.

If your client agrees to these terms, please reply to all on this email.

Thank you.

Best,

Paul Simon

Underneath Simon's name was the name and address of his law firm, his phone number, and a fax number.

Simon and Pilibosian exchanged text messages regarding a thirty-day “feasibility period,” which Pilibosian explained was “a 30-day period to inspect and terminate if we find something.” Simon told Pilibosian to “add that and we'll ok.” Pilibosian responded to the email later that day:

The email's “from” line states that it is from “Paul A. Pilibosian .” The changes included the feasibility period:

b. 30-day feasibility period to conduct inspections with right to terminate without penalty;

The e-mail also appears to have modified the final point regarding execution of the settlement documents “assuming terms are acceptable to all parties”:

8. My office will draft more definitive settlement documents to be executed before Thanksgiving Day assuming terms are acceptable to all parties.

Williams responded, accepting the new terms on behalf of all defendants in the underlying litigation:

Paul P.,

Paul Simon has authorize me to speak on behalf of his clients. We are agreed.

Regards,

Jason

The “from” line of the email states that it is from “Jason Williams .” Simon testified in his declaration that he authorized Williams to accept Defy's counteroffer on behalf of Shepherd.

On November 21, Simon emailed the court's clerk stating that the parties had agreed to pass all hearings, including those scheduled for the following day, “because the parties have reached a tentative settlement agreement.”

On November 23, Simon emailed Pilibosian a draft of the formal settlement document. On the following day, Pilibosian responded that the parties should execute a Texas Association of Realtors (TAR) form contract along with the settlement agreement, and he attached the form contract.

Simon testified that the attorneys continued to communicate about all aspects of the signature documents and TAR form. On December 14, Pilibosian sent his changes to the draft document that Simon had sent on November 23. Pilibosian concluded the email, “As soon as you guys approve, we can sign off and get it submitted to a title company.”²

Between December 14 and January 3, Simon and Williams reviewed the draft documents. On January 3, Pilibosian emailed to ask, “Where are we on the settlement documents? Can we get this wrapped up?” He asked, “Can we get the redlines back and get a signed document this week?” On January 7, one of Shepherd's attorneys sent Pilibosian revisions, and the parties had a meeting on January 12 to discuss final details of the documents. Simon testified, “Pilibosian agreed to take the laboring oar on finalizing these documents.”

Pilibosian emailed the “final versions of everything” on January 14. Also on January 14, he said, “My client is ready to sign. As soon as we can get a final agreement, I can get this wrapped up on our end.” Williams responded later that day that the documents looked good with a few minor changes.

On January 18, Pilibosian again sent final versions of several documents. By January 18, Simon had identified a few more “nits” or minor errors and communicated these to Pilibosian, but Shepherd signed the documents nonetheless, and Simon informed Pilibosian that they had signed. He asked Pilibosian, “[W]hen are your folks signing the documents?”

On January 24, Williams emailed Pilibosian to ask, “[A]re you ready to exchange signatures?” Pilibosian asked if Simon's clients would sign and, “If so, we'll sign it.” Williams and Simon responded that Shepherd had already signed. On January 25, Williams and Simon confirmed that their clients had signed everything, and Williams asked, “Is everyone ready to move forward?” Pilibosian responded, “We are. Just waiting on sigs from my client. Should have them soon.”

On January 31, Williams emailed to ask Pilibosian, “Can you give me an update on the signatures?” Days later, Williams told Simon that Williams had a phone call with Pilibosian, and Pilibosian told Williams that Pilibosian “did not know why Defy had not signed the documents.”

On February 9, Simon and Williams separately notified Pilibosian that they considered Defy to be in breach of the Rule 11 agreement for failing to sign the final documents or to close on the property, and they had filed a petition to enforce the Rule 11 agreement. Simon concluded his email:

The Co-Owners have signed the paperwork you asked us to sign, and the Co-Owners have been ready, willing and able to perform all their obligations under it, and continue to be ready, willing and able to perform the November 21, 2021 Rule 11 settlement agreement.

Based on your client's breach of the Rule 11, I have been instructed by my clients to file an amended pleading to enforce our agreement as contained in the November 21, 2021 email exchange, which my office has done today. If your client is willing and able to close on the transaction, my clients (and I believe Jason's) would be willing to do so, provided that closing occurs within 10 days from today's date.

On February 18, Defy filed a motion to dismiss pursuant to the Texas Citizens Participation Act, arguing in the motion that the November email exchange was an unenforceable agreement to agree and that “no definitie agreement was ever reached.” Defy made similar statements in another court filing in March.

On March 16, an attorney for Defy sent Shepherd a letter stating that Defy had “never received the proposed final settlement,” and Defy requested access to the building to conduct inspections. On March 18, Simon responded that he believed Shepherd did not want to reopen the feasibility period but would be willing to close on the sale of the property and dismiss the lawsuit.

On March 21, the trial court denied Defy's TCPA motion. On March 28, Pilibosian sent Simon a copy of his client's signature on the signature documents, showing that Defy had signed them that day.

At the beginning of May, the court held a hearing and signed orders authorizing Defy to inspect the property and to revisit settlement of the matter. On May 5, Defy inspected the property. On May 27, Defy sent a letter declining to purchase the property at the previously discussed price.

Shepherd and Defy each filed motions for summary judgment. In its motion, Shepherd argued among other things that as a matter of law (1) the November emails amounted to an enforceable Rule 11 agreement; (2) Defy breached and repudiated the agreement; and (3) the release should be enforced in the underlying suit.

In its motion for summary judgment, Defy argued that as a matter of law (1) the email exchange was not an enforceable Rule 11 agreement because the parties did not intend to be bound by it; (2) the agreement was not “signed” as required by Rule 11; (3) Shepherd repudiated or anticipatorily breached the formal settlement documents by declaring in the February 9 notice of breach that Defy would have to close within ten days; and (4) Shepherd agreed to a novation of the November agreement in the formal settlement documents in January.

The trial court signed an order denying Shepherd's motion and granting Defy's motion without specifying the grounds. Over Defy's objection, the trial court signed an order severing the claims and defenses related to the Rule 11 agreement and abated the underlying action. Both parties appealed.

II. Motion to Dismiss

Defy contends in a motion to dismiss and in its first issue on appeal that both parties’ appeals should be dismissed as moot because Shepherd ultimately sold the property that was the subject of the parties’ Rule 11 agreement.

If a case becomes moot, a court of appeals must vacate any order or judgment previously issued and dismiss the case for want of jurisdiction. Heckman v. Williamson Cnty., 369 S.W.3d 137, 162 (Tex. 2012). “A case becomes moot if, since the time of filing, there has ceased to exist a justiciable controversy between the parties—that is, if the issues presented are no longer ‘live,’ or if the parties lack a legally cognizable interest in the outcome.” Id. “Put simply, a case is moot when the court's action on the merits cannot affect the parties’ rights or interests.” Id.

Defy relies on the case of Estate Land Co. v. Wiese, 546 S.W.3d 322 (Tex. App.—Houston [14th Dist.] 2017, pet. denied), in which this court held that the sale of the property underlying the dispute mooted the issues in the case. See id. at 326–27. The judgment in Wiese, however, had ordered partition by sale of several properties under Rule 770 of the Texas Rules of Civil Procedure. See id. at 323 (citing Tex. R. Civ. P. 770). The court-appointed receiver sold the properties. Id. at 324. This court held, “Because appellants did not seek an emergency stay, supersedeas bond, or otherwise suspend the enforcement of the trial court's post-judgment orders, the sale of the property at issue was completed and, as such, the issues in the case must be dismissed as moot.” Id. at 326.

Defy contends this case is moot because the key exchange of consideration under the Rule 11 agreement was the sale of Shepherd's property. However, the sale of a property that forms the basis of litigation will not render moot issues that do not depend on possession of the property. Dominguez v. Dominguez, 583 S.W.3d 365, 371 (Tex. App.—El Paso 2019, pet. denied).

This case does not involve the partitioning of real property, and Shepherd does not seek to enforce the sale of the property. Rather, Shepherd petitioned to enforce a release contained in the Rule 11 agreement. Defy has not shown or explained how Shepherd's claim depends on possession of the property.³

Defy's first issue and motion to dismiss are denied.

III. Severance

In its appeal, Defy contends in three related issues that the trial court abused its discretion by severing the Rule 11 claims and defenses into this separate action because (1) Shepherd's Rule 11 claim is not one that would be the proper subject of an independently asserted lawsuit; (2) a claim to enforce a Rule 11 settlement agreement should generally be asserted in the same cause as the underlying suit; and (3) the judgment effectively allowed a permissive appeal without establishing the requirements for one.

A. Standard of Review and Legal Principles

Under Rule 41 of the Texas Rules of Civil Procedure, “Any claim against a party may be severed and proceeded with separately.” Tex. R. Civ. P. 41. A trial court has broad discretion to sever claims, and we review for an abuse of discretion. Reharting, Inc. v. Heap, No. 14-21-00251-CV, 2022 WL 1575527, at *2 (Tex. App.—Houston [14th Dist.] 2022, no pet.) (mem. op.). “A severance is proper when ‘(1) the controversy involves more than one cause of action, (2) the severed claim is one that would be the proper subject of an independently asserted lawsuit, and (3) the severed claim is not so interwoven with the remaining action that the actions involve the same facts and issues.’ ” Sealy Emergency Room, L.L.C. v. Free Standing Emergency Room Managers of Am., L.L.C., 685 S.W.3d 816, 822 (Tex. 2024) (quoting State v. Morello, 547 S.W.3d 881, 889 (Tex. 2018)). A trial court abuses its discretion if one of these enumerated criteria is not met. Owens v. Owens, 228 S.W.3d 721, 726 (Tex. App.—Houston [14th Dist.] 2006, pet. dism'd). “Within these parameters, a trial court may grant a severance to avoid prejudice, do justice, and increase convenience.” Sealy Emergency Room, 685 S.W.3d at 822.

B. Analysis

Defy contends that the trial court abused its discretion because, as a matter of law, Shepherd could not meet the second element for severance: the severed Rule 11 claim is not one that would be the proper subject of an independently asserted lawsuit. Defy relies primarily on Mantas v. Fifth Court of Appeals, 925 S.W.2d 656 (Tex. 1996) (orig. proceeding), and In re General Metal Fabricating Corp., No. 01-06-00879-CV, 2006 WL 3316877 (Tex. App.—Houston [1st Dist.] Nov. 16, 2006, orig. proceeding) (mem. op.).

In Mantas, the parties settled while on appeal, but a dispute arose over the settlement. See 925 S.W.2d at 657–58. One party, Mantas, filed a separate suit to enforce the settlement. Id. at 658. In a mandamus action, the Supreme Court of Texas explained the proper procedures to follow:

Where the settlement dispute arises while the trial court has jurisdiction over the underlying action, a claim to enforce the settlement agreement should, if possible, be asserted in that court under the original cause number. However, where the dispute arises while the underlying action is on appeal, as in this case, the party seeking enforcement must file a separate breach of contract action.

Id. at 658–59. The supreme court held that the court of appeals “correctly determined that Mantas was required to seek enforcement in a separate suit.” Id. at 659.

The supreme court also held that the court of appeals abused its discretion by not abating the appeal (i.e., the underlying litigation) pending resolution of the enforcement suit. Id. The court reasoned:

It makes no sense for the court of appeals to expend its resources, and require the parties to expend theirs, on an appeal which may be moot. Certainly, a ruling on the merits of the appeal before judgment is rendered in the enforcement suit would inject needless uncertainty and confusion into the issues surrounding the settlement.

Id. Moreover, the court held that Mantas lacked an adequate remedy by appeal because, “If the agreement is ultimately upheld, Mantas will have lost much of the settlement's benefit if he has been required to expend time and resources in prosecuting the appeal.” Id.

In In re General Metal, the parties reached a Rule 11 settlement while the jury was deliberating; the jury's answer to one of the questions was a condition to certain terms in the settlement. See 2006 WL 3316877, at *1. After the jury returned its verdict, one party filed a post-trial amendment to his petition to allege a breach of the settlement agreement. Id. The trial court severed the Rule 11 claims but denied a motion to abate the enforcement of the judgment in the underlying case. Id. at 2. The First Court held that the trial court abused its discretion by severing the Rule 11 claim and refusing to abate the underlying case. Id. at *3. The court reasoned that there was no evidence in the mandamus record “that it was not ‘possible’ for the breach-of-settlement-agreement claim to be brought under the same cause number as the underlying case,” and that it “would be pointless for the appellate court and the parties to expend resources on appeal until the trial court first determines the enforcement issue.” Id. at *2.

Mantas provides guidance that a claim for breach of a Rule 11 settlement agreement “should, if possible, be asserted in that court under the original cause number.” 925 S.W.2d at 658. But Mantas does not address whether it would have been an abuse of discretion to sever the Rule 11 settlement claim following a summary judgment on that claim. The reasoning for the abatement in Mantas supports the severance in this case because it “makes no sense” for the trial court and parties to expend their resources on a trial “which may be moot” if the settlement is enforceable. See id. at 659.

The settlement in In re General Metal occurred during the jury's deliberations and was dependent on their answer to a question. See 2006 WL 3316877, at *1. The severance in In re General Metal was coupled with no abatement, thus leading to parallel litigation that would cause the parties to expend resources on an appeal that may have been “pointless” depending on the resolution of the Rule 11 enforcement issue. See id. at *2.

The procedural posture of this case is more similar to Zars v. Esquivel, No. 04-04-00892-CV, 2005 WL 3115763 (Tex. App.—San Antonio Nov. 23, 2005, no pet.) (mem. op.), in which the trial court granted a summary judgment on the Rule 11 claim before a trial on the underlying claims had occurred. See id. at *1–2. The court of appeals found no abuse of discretion in granting the severance even though the settlement claim was not, at the time asserted, the proper subject of an independent lawsuit. Id. at *2.

Like in Zars, and consistent with Mantas, Shepherd filed its Rule 11 claim in the original cause number. The trial court's severance, coupled with an abatement in the underlying action, has the effect of allowing the Rule 11 claim to be fully and finally litigated before the claims in the underlying action. By severing, the trial court allowed Shepherd to have a final decision on the Rule 11 claim in this appeal, thus potentially preserving much of the settlement's benefits by not having Shepherd expend time and resources on an underlying trial that could be pointless. See Mantas, 925 S.W.2d at 658–59; In re General Metal, 2006 WL 3316877, at *2. The trial court did not abuse its discretion under Rule 41. See Zars, 2005 WL 3115763 at *2.

Defy contends that, to the extent Rule 41 authorizes severance and an appeal, it conflicts with the statute governing permissive appeals, Section 51.014(d) of the Civil Practice and Remedies Code. We disagree with Defy that the rule and statute conflict. Section 51.014(d) is “another possible avenue of appellate review” in addition to severance and may be used “[i]n cases where severance would be procedurally improper.” Sealy Emergency Room, 685 S.W.3d at 824. The statute and rule can be applied harmoniously.

Defy's issues are overruled.

IV. Rule 11 Agreement

In four issues, Shepherd contends that the trial court erred by granting Defy's motion for summary judgment and denying Shepherd's motion for summary judgment because (1) the Rule 11 agreement complied with the signed writing requirement of the rule; (2) the Rule 11 agreement was enforceable, and Defy breached it as a matter of law; (3) Defy did not prove its novation defense; and (4) Defy did not prove its repudiation defense. We agree with Shepherd and therefore reverse the trial court's judgment and render a judgment enforcing the Rule 11 settlement agreement.

A. Standard of Review

We review a summary judgment de novo. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We review the evidence presented in the motion and response in the light most favorable to the party against whom the summary judgment was rendered, crediting evidence favorable to that party if reasonable jurors could, and disregarding contrary evidence unless reasonable jurors could not. Id. The party moving for traditional summary judgment bears the burden of showing no genuine issue of material fact exists and it is entitled to judgment as a matter of law. Id. When both sides move for summary judgment and the trial court grants one motion and denies the other, we review the summary judgment evidence presented by both sides and determine all questions presented. Id. We render the judgment that the trial court should have rendered. Id.

B. No Briefing Waiver

In its response brief, Defy contends that the “final summary judgment must be affirmed because the Appellants failed to address an independent ground upon which the trial court could have granted summary judgment.” See, e.g., Dealer Computer Servs., Inc. v. DCT Hollister Rd, LLC, 574 S.W.3d 610, 621 (Tex. App.—Houston [14th Dist.] 2019, no pet.). Specifically, Defy points to Shepherd's failure to challenge the summary judgment on Shepherd's requests for declarations that Shepherd was excused from signing the formal settlement documents and performing the agreement.

In its motion for summary judgment, Defy included a section titled, “Shepherd Commons’ request for declaratory relief fails for the same reasons identified in Section I, above.” After quoting Shepherd's requested declarations, the entirety of Defy's argument appears as follows:

All Shepherd Commons’ requested declarations are dependent upon the Court finding that the November 21, 2021 email exchange was a binding, final agreement, or, if it was, that the Parties did not enter into a new agreement that superseded the November 21, 2021 email exchange. For the reasons stated in Section I, above, such is not the case. As a result, Shepherd Commons is not entitled to any of its requested declarations as a matter of law.

On appeal, Shepherd does not assert error specific to the trial court's summary judgment denying Shepherd's requested declarations. The summary judgment on these declarations, however, was dependent upon the other grounds in Defy's motion, i.e., “for the same reasons.” Under these circumstances, Shepherd did not need to independently challenge the judgment on its requested declarations to avoid affirmation of the summary judgment as a whole. See Boggus obo Casey v. Tex. Racquet & Spa, Inc., No. 14-17-00308-CV, 2018 WL 3911090, at *2 (Tex. App.—Houston [14th Dist.] 2018, pet. denied) (holding that summary judgment could not be upheld on an unchallenged ground when the unchallenged ground was dependent upon a challenged ground).

C. Rule 11 Agreement Is Signed

In its second issue, Shepherd contends that the trial court erred to the extent it granted summary judgment on the ground that the Rule 11 agreement was not signed.

To be enforceable, a Rule 11 agreement must be signed. See Tex. R. App. P. 11. Courts have routinely enforced Rule 11 agreements that were made by email. See Shamrock Psychiatric Clinic, P.A. v. Tex. Dep't of Health & Human Servs., 540 S.W.3d 553, 561 (Tex. 2018). But several courts of appeals have disagreed about how emails can be sufficiently “signed” for purposes of Rule 11.

In Cunningham v. Zurich American Insurance Co., 352 S.W.3d 519 (Tex. App.—Fort Worth 2011, pet. denied), the Second Court of Appeals applied the Uniform Electronic Transactions Act (UETA) to resolve whether a Rule 11 agreement was “signed” when the parties exchanged emails with a “signature block” containing the sender's name and contact information. See id. at 530; see also Tex. Bus. & Comm. Code §§ 322.002(8), 322.007(d). The Cunningham court held that the signature block itself was insufficient to constitute a signature for purposes of Rule 11, absent any additional evidence that the attorney “personally typed the signature block” and “did so with the intention that the block be her signature.” Cunningham, 352 S.W.3d at 530.

Applying the UETA in the context of the statute of frauds, the First Court of Appeals disagreed with Cunningham, holding that a person's “name or email address in a ‘from’ field functions as a signature in an email.” Khoury v. Tomlinson, 518 S.W.3d 568, 577 (Tex. App.—Houston [1st Dist.] 2017, no pet.). Noting that Cunningham was in conflict with its decision, id. at 577, the Khoury court held, “A signature block in an email performs the same authenticating function as a ‘from’ field.” Id. at 578.

The Eleventh Court of Appeals has similarly rejected Cunningham in the context of determining whether there was a signature under Section 16.065 of the Civil Practice and Remedies Code: “[E]ither a typed name or a signature block at the end of an email is sufficient to constitute a signature.” Perdido Props. LLC ex rel Bremer v. Devon Energy Prod. Co., L.P., 669 S.W.3d 535, 561 (Tex. App.—Eastland 2023, pet. denied).

The United States District Court for the Northern District of Texas also disagreed with Cunningham as it applied to a Rule 11 agreement, holding that “the Texas Supreme Court would consider both a typed name and a signature block in an email to be electronic signatures under [ ]UETA.” Williamson v. Bank of New York Mellon, 947 F. Supp. 2d 704, 711 (N.D. Tex. 2013).

Although Defy relied on Cunningham in its motion for summary judgment, and Shepherd relies on Khoury and Williamson, both parties on appeal now agree that the UETA does not apply to Rule 11 agreements because of a 2019 amendment. See Act of May 26, 2019, 86th Leg., R.S., ch. 606, § 7.01, 2019 Tex. Gen. Laws 1775, 1795 (codified at Tex. Bus. & Com. Code § 322.003(e)) (“This chapter does not apply to the ․ enforceability ․ of a document in any form that is ․ governed by rules adopted by the supreme court ․”). The parties cite to no relevant case predating the UETA ⁴ or addressing the requirement of a “signed” writing under Rule 11 in light of the 2019 amendment.

To determine whether an email, lacking a handwritten signature, can satisfy the “signed” requirement of Rule 11, we consider the purpose for which Rule 11 was adopted: “to avoid disputes over the terms of oral settlement agreements.” Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995). Even before the ubiquitous use of email, the Supreme Court of Texas eschewed a “ ‘slavish adherence’ to the literal language of the rule in all cases.” Kennedy v. Hyde, 682 S.W.2d 525, 530 (Tex. 1984). The court noted that agreements and stipulations are “welcomed by the courts,” and Rule 11’s requirements are “not onerous.” Id.

The signature requirement safeguards against disputes over whether the parties mutually consented to the written agreement. See Baylor Univ. v. Sonnichsen, 221 S.W.3d 632, 635 (Tex. 2007) (“Evidence of mutual assent in written contracts generally consists of signatures of the parties and delivery with the intent to bind.”). Although a signature is traditionally “the name of the signer, handwritten in ink,” a signature may also be “written in pencil, typed, printed, made with a rubber stamp, or impressed into the paper.” Restatement (Second) of Contracts § 134 cmt. a. Consistent with the Restatement, “Texas recognizes typed or stamped signatures—and presumably also scanned signatures—so long as they are rendered by or at the direction of the signer.” Reinagel v. Deutsche Bank Nat'l Trust Co., 735 F.3d 220, 227 (5th Cir. 2013); see also Mondragon v. Mondragon, 113 Tex. 404, 408, 257 S.W. 215 (1923) (“A signature made by a rubber stamp, typewriter, or printing, or by another without authority and in the absence of the grantor, or even when forged, may be adopted, and the instrument to which it is signed become binding.”).

Here, the agreement is in writing so as to avoid disputes over its terms. Defy does not dispute that its attorney, Pilibosian, sent the November 21 email. Defy attached the email to its motion for summary judgment along with an affidavit from Pilibosian authenticating the document. Simon testified that Williams had authority to accept Defy's counteroffer on Shepherd's behalf. Moreover, Simon adopted the signature as the parties continued to labor under the terms of the November 21 email by subsequently drafting, exchanging, and modifying the formal settlement documents. Under these undisputed facts, counsel for both Defy and Shepherd “signed” the Rule 11 agreement. See Mondragon, 113 Tex. at 408, 257 S.W. 215 (typed or printed signature, whether or not made with authority, makes an instrument binding when adopted).

Cunningham is inapplicable to this case because the UETA does not apply to Rule 11 agreements. See Tex. Bus. & Com. Code § 322.003(e). Even if it were applicable, however, we disagree with Cunningham to the extent the court applied a narrow interpretation contrary to the UETA's stated purpose,⁵ and the court did not resort to the long-standing principle that a printed or typed signature is valid. Regardless of whether parties to a Rule 11 agreement type their names with a typewriter, a computer keyboard, or a touchscreen, and regardless of whether they type their names in an email or create a “signature block” to be included with their email, the effect is the same. They have signed it. See Reinagel, 735 F.3d at 227; Mondragon, 113 Tex. at 408, 257 S.W. 215; Restatement (Second) of Contracts § 134 cmt. a.

Defy's other cases are unpersuasive because they show a lack of any agreement to mutual terms in addition to the lack of any signature, typed or otherwise. See Araiza v. Bumb, No. 14-18-00633-CV, 2019 WL 3725554, at *2 (Tex. App.—Houston [14th Dist.] Aug. 8, 2019, no pet.) (mem. op.) (omitting from the recitation of the facts any email from one of the parties agreeing to the offered settlement; “There is nothing in the record establishing that Caudillo, or an agent acting on her behalf, signed the proposed settlement agreement or otherwise assented to the proposed agreement's essential terms in writing.” (emphasis added)); Mitchell v. Mitchell, No. 03-17-00318-CV, 2018 WL 911866, at *7 (Tex. App.—Austin Feb. 16, 2018, pet. denied) (mem. op.) (declining to apply the UETA and noting that “the record here includes no email from Brian or Clark that purports to agree to the terms of any agreement”).

Shepherd's second issue is sustained.

D. Rule 11 Agreement Is Enforceable

In its first issue, Shepherd contends that the trial court erred to the extent it granted summary judgment on the ground that the Rule 11 agreement was unenforceable. Shepherd contends that the agreement included all material terms sufficient to create a binding Rule 11 agreement and was not merely an “agreement to agree.” Defy counters that the parties did not intend for the email exchange to be a presently binding agreement, and they intended for the formal settlement documents to be signed to establish acceptance of the settlement.

Rule 11 agreements are contracts governed by the same rules applied to contracts. Shamrock Psychiatric Clinic, P.A. v. Tex. Dep't of Health & Human Servs., 540 S.W.3d 553, 560 (Tex. 2018). “To be effective, a Rule 11 agreement must consist of ‘a written memorandum which is complete within itself in every material detail, and which contains all essential elements of the agreement.’ ” Id. at 561 (quoting Padilla v. LaFrance, 907 S.W.2d 454, 460 (Tex. 1995)). A Rule 11 agreement may be formed with a series of writings such as emails. See id.

A Rule 11 agreement may be valid and enforceable, even if it contemplates the parties will agree to a future contract such as formal settlement documents, if the agreement and surrounding circumstances conclusively show that the parties intended to enter into a binding agreement. See MKM Eng'rs, Inc. v. Guzder, 476 S.W.3d 770, 781 (Tex. App.—Houston [14th Dist.] 2015, no pet.). “Agreements to enter into future contracts are enforceable if they contain all material terms.” McCalla v. Baker's Campground, Inc., 416 S.W.3d 416, 418 (Tex. 2013). Material terms are “those that the parties would reasonably regard as vitally important ingredient[s] of their bargain.” Fischer v. CTMI, L.L.C., 479 S.W.3d 231, 237 (Tex. 2016) (alteration in original, quotation omitted). The material terms of a contract are determined on a case-by-case basis. Id.

In McCalla, the Rule 11 agreement included a release of claims along with the sale of a property from one of the parties to another. 416 S.W.3d at 417. The agreement indicated that one of the parties “will agree” to the purchase price and that they “agree to enter an agreement as discussed above.” Id. The trial court rendered a summary judgment, ruling that the settlement agreement was an enforceable contract, id. at 417, and the Supreme Court of Texas upheld the ruling. Id. at 418. The supreme court reasoned that the agreement contained all the material terms involved in a settlement and sale of property:

• a general release,

• a description of the real property to be sold,

• the timeline for closing the real property sale,

• the identities of the transferor and transferee, and

• the price of the real property.

Id.

All of these terms are included in the November agreement between Shepherd and Defy. As a matter of law, the agreement contains all material terms. See id.

Defy contends that the language in the November emails and other circumstances conclusively establish the parties’ intent not to be bound until the formal settlement documents were signed. Defy points to the email's language in Section 8 that Simon would “draft more definitive settlement documents to be executed before Thanksgiving Day assuming terms are acceptable to all parties.” Defy also points to Simon's email to a court coordinator, informing the court that the parties had reached a “tentative” settlement. Finally, Defy points to Simon's declaration and the emails subsequent to the initial agreement indicating that the attorneys anticipated their clients would sign the final and formal settlement documents.

Defy analogizes to Foreca, in which the supreme court held there was a fact question for the jury about whether language in the agreement—“subject to legal documentation contract to be drafted by Mr. Dunlap”—contemplated that the formal documentation was “a condition precedent to the formation of a contract or merely a memorial of an already enforceable contract.” Foreca, S.A. v. GRD Dev. Co., 758 S.W.2d 744, 745 (Tex. 1988). The court held that the “subject to” language created a fact issue about whether the writings “were intended to be the final expressions of the contract or were only preliminary negotiations which the parties did not intend to have legal significance until execution of the contemplated legal documentation.” Id. at 746.

Here, the emails do not include any conditional language regarding the enforceability of the Rule 11 agreement itself. The “assuming terms are acceptable to all parties” language addressed whether the formal documents would “be executed before Thanksgiving Day.” In other words, even if the “executed before Thanksgiving day” clause of the agreement was conditioned on the terms being “acceptable to all parties,” the condition did not make the entire November agreement conditional on the parties’ additional consent to the formal documents. In Foreca, the “subject to” clause was separately enumerated and applied to the entire agreement. See id. at 745.

Simon's email to a court coordinator referring to a “tentative” settlement does not raise a fact issue because the key question is not whether the ultimate settlement and release of claims was “tentative.” Rather, the issue before this court is whether the Rule 11 agreement itself was “tentative.” Although the ultimate settlement and release of claims may have been tentative, as it depended upon closing after a feasibility period, the Rule 11 agreement was not tentative. The parties expressed their intent to be presently bound with clarity in the emails: (1) Simon made an offer; (2) Pilibosian made a counteroffer, “Assuming Jason and you agree we have a deal”; and (3) Williams responded on Simon's behalf, “We have a deal.”

The agreement itself and the other summary judgment evidence conclusively show that the parties intended to enter into a binding Rule 11 agreement although the parties intended for the formal documents to be signed by the parties. See McCalla, 416 S.W.3d at 418; MKM Eng'rs, 476 S.W.3d at 781. As a matter of law, the Rule 11 agreement is enforceable.

E. Rule 11 Agreement Was Breached

Also in its first issue, Shepherd contends that as a matter of law Defy repudiated the Rule 11 agreement in its court filings and breached the agreement by failing to sign the formal settlement documents within a reasonable time.

A breach of contract occurs when a party fails or refuses to do something he has promised to do. Sasson v. Lipsky, No. 14-22-00695-CV, 2023 WL 5022442, at *5 (Tex. App.—Houston [14th Dist.] Aug. 8, 2023, no pet.) (mem. op.). Even if an exact date for performance is specified in a contract, the parties may expressly or impliedly agree to an extension of time. See Intermedics, Inc. v. Grady, 683 S.W.2d 842, 856 (Tex. App.—Houston [1st Dist.] 1984, writ ref'd n.r.e.). When the exact duration of an extension of time is not expressed, the law will imply a reasonable time. Id. What is a reasonable time for performance of a contract depends on the circumstances surrounding the adoption of the agreement, the situation of the parties, and the subject matter of the contract. In re Gruss, 693 S.W.3d 656, 675 (Tex. App.—Houston [14th Dist.] 2023, no pet.). If the evidence regarding the facts material to the question of what is a reasonable time is undisputed, courts may decide this question as a matter of law. Id.

Here, the parties agreed to execute the formal settlement documents by Thanksgiving 2021. Instead, the parties discussed, reviewed, and revised the formal documents until the middle of January, showing an implied extension of the time for performance. See Intermedics, 683 S.W.2d at 846. Pilibosian sent Simon the “final versions of everything,” proclaiming that Defy was “ready to sign.” After making a few minor changes, Pilibosian sent the documents again on January 18. Shepherd signed the documents the same day despite a few “nits” in the documents. On January 19 and again on January 20, Simon informed Pilibosian that they had signed and asked, “[W]hen are your folks signing the documents?” Williams asked Pilibosian again if they were ready to sign on January 24, and Simon confirmed that Shepherd had signed. Pilibosian responded, “Just waiting on sigs from my client. Should have them soon.” A week later, after being prompted for an “update on the signatures,” Pilibosian said that he “did not know why Defy had not signed the documents.” Shepherd declared a breach on February 9.

The facts are undisputed, and it is “clear from the parties’ agreement and the facts and circumstances in existence at the time the [Rule 11] agreement was signed that the parties contemplated contemporaneous performance,” i.e., that each party would execute the formal settlement documents when the terms were agreed. See Cherco Props, Inc. v. Law, Snakard & Gambill, P.C., 985 S.W.2d 262, 266 (Tex. App.—Fort Worth 1999, no pet.) (agreement showed that parties contemplated contemporaneous performance of settlement agreement involving one party making a payment and the other signing a release). Twenty days passed from the time Simon informed Pilibosian that Shepherd had signed the formal documents on January 20 before Shepherd declared Defy to be in breach on February 9. In between that time, Pilibosian (1) asked for confirmation of Shepherd's signing, stating, “If so, we'll sign it”; (2) said he was waiting on Defy's signatures and would have them “soon”; and (3) said that he did not know why Defy hadn't signed the documents.

As a matter of law, a reasonable time for Defy to sign the formal agreement expired by February 9, and Defy breached the Rule 11 agreement by failing to sign the formal settlement documents. Shepherd's first issue is sustained.

F. Novation Fails as a Matter of Law

In its third issue, Shepherd contends that the trial court erred to the extent it ruled that Defy proved or raised a genuine issue of material fact on its defense of novation because the evidence shows that no new valid agreement was formed as a matter of law.

Novation is an affirmative defense that can occur when parties substitute a new agreement between them. See Farkooshi v. Afisco Interest, LLC, No. 14-13-00201-CV, 2014 WL 4161708, at *4 (Tex. App.—Houston [14th Dist.] Aug. 21, 2014, no pet.) (mem. op.). The elements are: (1) the validity of a prior obligation; (2) an agreement among all parties to accept a new contract; (3) the extinguishment of the prior obligation; and (4) the validity of the new agreement. Id.

To create an enforceable contract, there must be a meeting of the minds, i.e., mutual assent, between the parties. See Angelou v. African Overseas Union, 33 S.W.3d 269, 278 (Tex. App.—Houston [14th Dist.] 2000, no pet.). A novation defense fails as a matter of law if there is no mutual assent for the second purported agreement. See N.Y. Party Shuttle, LLC v. Bilello, 414 S.W.3d 206, 214–15 (Tex. App.—Houston [1st Dist.] 2013, pet. denied) (novation not conclusively proven due to lack of mutual assent to the new contract).

“The term ‘meeting of the minds’ refers to the parties’ mutual understanding and assent to the expression of their agreement.” Angelou, 33 S.W.3d at 279. “The parties must agree to do the same thing, in the same sense, at the same time.” Id.; see also Chubb Lloyds Ins. Co. of Tex. v. Buster & Cogdell Builders, LLC, 668 S.W.3d 145, 152 (Tex. App.—Houston [1st Dist.] 2023, no pet.) (“For mutual assent, or a meeting of the minds, the parties must agree to the same thing, in the same sense, and at the same time.”). “A meeting of the minds is merely a mutuality subpart of the offer and acceptance elements” of contract formation. Yazdani-Beioky v. Sharifan, 550 S.W.3d 808, 823 (Tex. App.—Houston [14th Dist.] 2018, pet. denied) (quotation omitted).

“If an offeree revokes an offer before acceptance, the offeree's power of acceptance terminates.” Angel, Tr. For Gobsmack Gift Tr. v. Tauch, 642 23 481, 488 (Tex. 2022). A revocation may be made expressly or may be implied from the offeror's words or actions. Id. at 489. The relevant inquiry is “whether ‘a reasonable person, in the position of the offeree, would regard the offer as withdrawn.’ ” Id. at 498 (quoting 1 Williston on Contracts § 5:10). An offeree making a subsequent inconsistent offer can impliedly revoke a prior offer. See id. at 494 n.69 (collecting cases).

To determine whether mutual assent is present, courts look to the communications between the parties and to the acts and circumstances surrounding the communications. Angelou, 33 S.W.3d at 278. “[T]he power of acceptance terminates when, by whatever means, the offeree receives objectively reliable information that the deal is off.” Angel, 642 S.W.3d at 501. “If parties negotiating a contract intend that the contract shall be reduced to writing and signed by the parties before it is binding, either party may withdraw at any time before a written agreement is executed.” Principal Life Ins. Co. v. Revalen Dev., LLC, 358 S.W.3d 451, 455 (Tex. App.—Dallas 2012, pet. denied).

Defy contends that the new agreement establishing the novation was formed on March 28 when Defy signed the formal settlement documents, subsequent to Shepherd's signing on or before January 20.⁶ Shepherd contends that there was no new valid agreement to replace the November agreement because, before Defy signed the formal documents, Shepherd withdrew its assent to the formal documents. Shepherd points to its February 9 email declaring a breach of the November agreement and making a new offer to sell the property if Defy agreed to close within ten days. Shepherd also points to its March 18 letter indicating a lack of interest in reopening the feasibility period under the formal settlement documents.

Shepherd's February 9 notice of breach in which Shepherd complained of Defy's failure to sign the formal settlement documents, coupled with a new offer inconsistent with the terms of the formal settlement documents, would lead a reasonable person in Defy's position to regard the offer (i.e., Shepherd's signing of the formal settlement documents) as withdrawn. Cf. Angel, 642 S.W.3d at 484–85, 501–02 (offer of settlement by judgment-creditor impliedly withdrawn before offeree could accept it two days after the initial offer because the offeree learned that the offeror had assigned the debt).

Defy points to no evidence that Shepherd manifested an intent to be bound by the formal settlement documents at the same time that Defy also manifested an intent to be bound on March 28 when Defy signed the formal settlement documents. The evidence in the summary judgment record establishes a lack of assent by Shepherd before Defy's attempted acceptance of the formal settlement documents.

Considering the arguments of the parties and the evidence of their communications and surrounding circumstances at the time Defy signed the formal settlement documents, we conclude that Defy failed to raise a genuine issue of material fact or show it is entitled to judgment as a matter of law on its affirmative defense of novation.

Shepherd's third issue is sustained.

G. Repudiation Fails as a Matter of Law

In its fourth issue, Shepherd contends that the trial court erred to the extent it ruled that Defy proved or raised a genuine issue of material fact on its defense of repudiation.

“Repudiation or anticipatory breach is a positive and unconditional refusal to perform the contract in the future, expressed either before performance is due or after partial performance.” Watson v. Purvis, No. 14-18-00132-CV, 2019 WL 2939816, at *6 (Tex. App.—Houston [14th Dist.] July 9, 2019, no pet.) (mem. op.). Repudiation is an affirmative defense to a breach of contract claim. Cook Composites, Inc. v. Westlake Styrene Corp., 15 S.W.3d 124, 139 (Tex. App.—Houston [14th Dist.] 2000, pet. dism'd by agr.). “Under this defensive theory, an injured party is discharged from its remaining duties to perform under a contract where the other party repudiates its contractual duty before the time for performance.” Id.

In Defy's motion for summary judgment and in response to Shepherd's motion, Defy argued that Shepherd repudiated the formal settlement documents that Shepherd had signed in January. We cannot consider Defy's distinct argument on appeal that Shepherd repudiated the November Rule 11 agreement. See, e.g., Stiles v. Resolution Trust Corp., 867 S.W.2d 24, 26 (Tex. 1993) (“[S]ummary judgment cannot be affirmed on grounds not expressly set out in the motion or response.”). This distinction is important because Shepherd's claim is for breach of the November Rule 11 agreement, not the formal settlement documents.

In any event, Shepherd's February 9 email declaring a breach of the November agreement and offering to close on the property within ten days was not a “positive and unconditional refusal to perform” the November agreement. See Watson, 2019 WL 2939816, at *6. Rather, Simon wrote in the February 9 email that Shepherd had been “ready, willing and able to perform all their obligations under it, and continue to be ready, willing and able to perform the November 21, 2021 Rule 11 settlement agreement.”

Defy failed to raise a genuine issue of material fact or show that it is entitled to judgment as a matter of law on its affirmative defense of repudiation.

Shepherd's fourth issue is sustained.

V. Conclusion

Defy's motion to dismiss is denied and its issues are overruled. Each of Shepherd's issues is sustained. We affirm the trial court's severance, reverse the trial court's summary judgment, and render a judgment enforcing the November Rule 11 settlement agreement.

FOOTNOTES

1.   Defy and the codefendants ultimately nonsuited their claims against each other.

2.   In the December 14 document, Defy sought to change the feasibility period from thirty days to sixty days, but Shepherd rejected the change.

3.   Although the release was conditioned on Defy's closing on the property, Shepherd alleges that Defy's failure to sign the formal settlement documents and close on the property was a breach of the Rule 11 agreement. The general rule in Texas is that “a party who ‘prevents or makes impossible’ the occurrence of a condition precedent upon which its liability under a contract depends cannot rely on the nonoccurrence to escape liability.” Clear Lake City Water Auth. v. Friendswood Dev. Co., 344 S.W.3d 514, 519–21 (Tex. App.—Houston [14th Dist.] 2011, pet. denied).

4.   See Act of May 15, 2007, 80th Leg., R.S., ch. 885, ch. 322, 2007 Tex. Gen. Laws 1905, 1998 (effective Apr. 1, 2009) (codified as amended at Tex. Bus. & Com. Code §§ 322.001–.021).

5.   The purpose of the UETA and the public policy of Texas is to facilitate electronic transactions. See Aerotek, Inc. v. Boyd, 624 S.W.3d 199, 209–10 & n.47 (Tex. 2021).

6.   Defy does not argue that it executed the formal settlement documents at an earlier time despite not signing them, or that the parties did not intend for each other to sign the contract before it became binding.

Ken Wise, Justice