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Court of Appeals of Texas, Houston (1st Dist.).


NO. 01-16-00266-CV

Decided: October 05, 2017

Panel consists of Chief Justice Radack and Justices Keyes and Higley.


Appellant Danny Barforough sued appellees Nationstar Mortgage, LLC and U.S. Bank National Association, alleging breach of a previous settlement agreement after appellees notified Barforough that his mortgage was being accelerated and posted the subject property for foreclosure. Barforough claimed that a previous settlement released him from all obligations related to the note encumbering the property. The trial court granted appellees summary judgment on Barforough's claims. We affirm.


In March 2007, Barforough purchased real property located at 9830 Cynthia Ann Court, Houston, Texas. That same day, Barforough obtained an adjustable rate note (the “Note”) secured by a deed of trust for the property from LaSalle Bank, trustee for the Merrill Lynch First Franklin Mortgage Loan Trust. The deed of trust was subsequently assigned to U.S. Bank.

In October 2012, Barforough received an acceleration letter stating that he had defaulted under the terms of the Note and deed of trust by failing to remit mortgage payments. Barforough subsequently received notice that a foreclosure sale of the property would be held in December 2012. Barforough sued U.S. Bank, Mortgage Electronic Registration Systems (MERS)1 , and Bank of America 2 alleging breach of contract, wrongful foreclosure, slander of title, fraud, misrepresentation, and negligent misrepresentation, seeking monetary damages and injunctive relief, including a temporary restraining order.

The parties entered into a Confidential Settlement and Release Agreement (the “Agreement”), resolving the claims alleged in that lawsuit, in which the defendants agreed to pay Barforough $6,000 as consideration for his release of all claims asserted in the litigation. Barforough agreed to release the defendants from and against “any and all past and present claims, counterclaims, actions, defenses, affirmative defenses, suits, rights, causes of action, lawsuits, set-offs, costs, losses, controversies, agreements, promises and demands, or liabilities” and to pay any property taxes and insurance that came due after the Agreement's execution. The Agreement also included release language related to the defendants' release of certain claims against Barforough:

Defendants for themselves and each of their predecessors, affiliates, subsidiaries, divisions, departments, subdivisions, owners, partners, principals, trustees, creditors, shareholders, joint ventures, co-venturers, officers and directors (whether acting in such capacity or individually), servicing companies, attorneys, accountants, insurers, agents (alleged apparent or actual), representatives, successors, assigns and all those who claim through them or could claim through them (collectively “Defendant Releasors”) unconditionally and irrevocably remises, waive, satisfy, release, acquit, and forever discharge [Barforough] his heirs, agents and assigns [collectively the “Plaintiff Releasees”], and each of them respectively, from and against any and all past and present claims, counterclaims, actions, defenses, affirmative defenses, suits, rights, causes of action, lawsuits, set-offs, costs, losses, controversies, agreements, promises and demands, or liabilities, of whatever kind or character, direct or indirect, including, without limitation, the claims made or which could have been made by Defendants arising from the origination or servicing of the Loan (in any manner) as well as in any way related to the underlying property, Notes, Mortgages, and/or Deeds of Trust, any servicing act or omission thereon as well as any claim or issue which was or could have been brought in the litigation (collectively “Released Matters”).

The Agreement expressly limited its coverage, noting that “[a]side from any current claims relating to the Loan and/or Property, this Agreement does not apply to any separate continuing contractual and/or equitable obligations as may currently exist between or among the Parties.” It specifically noted that, to the extent the loan and underlying Note, deed of trust, and mortgage remained in force (as modified or otherwise in the Agreement), the Agreement “shall not alter the rights, duties and obligations of said Loan by the Parties, including but not ․ limited to such actions as acceleration and foreclosure as may be appropriate in the event of a future default.” The lawsuit was dismissed in March 2014.

In December 2014, Barforough received another notice of acceleration, stating that Barforough had defaulted on the deed of trust, and notifying him that all sums secured by the deed of trust, totaling $240,538.88, were immediately due and payable. The notice also stated that the substitute trustee would sell the subject property to the highest bidder for cash on Tuesday, January 6, 2015. Barforough sued appellees U.S. Bank and Nationstar, alleging that the

Agreement reached in the previous lawsuit released him from any indebtedness related to the Note. Barforough and appellees filed cross-motions for summary judgment, relying on the plain language of the Agreement. Appellees argued that the Agreement did not release Barforough from his obligations on the underlying mortgage and that such language should not be read into the Agreement. Barforough argued that the plain language of the Agreement released him from any outstanding indebtedness related to the Note. The trial court granted appellees' summary-judgment motion and Barforough appealed.


In his sole issue on appeal, Barforough contends that the trial court abused its discretion in granting appellees' summary-judgment motion.

A. Standard of Review and Applicable Law

We review de novo the trial court's ruling on a motion for summary judgment. Travelers Ins. Co. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). If a trial court grants summary judgment without specifying the grounds for granting the motion, we uphold the trial court's judgment if any of the grounds are meritorious. Beverick v. Koch Power, Inc., 186 S.W.3d 145, 148 (Tex. App.—Houston [1st Dist.] 2005, pet. denied).

We construe settlement agreements under normal rules of contract construction. McWhinney v. Ameriquest Mortg. Sec., Inc., No. 01-13-00761-CV, 2014 WL 6853602, at *3 (Tex. App.—Houston [1st Dist.] Dec. 4, 2014, no pet.) (mem. op.). “In construing a written contract, the primary concern of the court is to ascertain the true intentions of the parties as expressed in the instrument.” J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). To determine the intent of the parties, we examine the entire writing and strive to harmonize and give effect to all provisions in the contract, so that no provision is rendered meaningless. In re Serv. Corp. Int'l, 355 S.W.3d 655, 661 (Tex. 2011). In doing so, we give contract terms “their plain and ordinary meaning unless the instrument indicates the parties intended a different meaning.” Reeder v. Wood Cty. Energy, LLC, 395 S.W.3d 789, 794–95 (Tex. 2012) (quoting Dynegy Midstream Servs., Ltd. P'ship v. Apache Corp., 294 S.W.3d 164, 168 (Tex. 2009)). “No single provision taken alone will be given controlling effect; rather, all the provisions must be considered with reference to the whole instrument.” Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983). “We must enforce the contract as written: we may not rewrite or enlarge a party's obligations as stated in the contract.” Taylor v. Henry, No. 01-14-00650-CV, 2016 WL 1389151, at *5 (Tex. App.—Houston [1st Dist.] Apr. 7, 2016, no pet.) (mem. op).

The interpretation of an unambiguous contract is a matter of law to be determined by the trial court. See Gulf Ins. Co. v. Burns Motors, Inc., 22 S.W.3d 417, 423 (Tex. 2000). We review the trial court's interpretation and enforcement of a settlement agreement de novo. McWhinney, 2014 WL 6853602, at *4.

B. Analysis

In his sole issue, Barforough asserts that the trial court erred in granting appellees' summary-judgment motion because the parties entered into a previous settlement and release agreement that discharged him from his obligations under the Note and deed of trust. Specifically, Barforough argues that the Agreement mutually released the parties of all claims, causes of action, or liabilities in any way related to the underlying property, Notes, mortgage, and Deeds of Trust that were or could have been raised and litigated in the underlying lawsuit. He contends that such release specifically identified the Note, mortgage, and deed of trust, thereby releasing him of the underlying debt. Appellees respond that the broad language of the release does not specify that Barforough's obligations under the Note were released, and should be narrowly construed. Appellees further contend that Barforough defaulted under the terms of the Agreement by failing to maintain insurance or pay ad valorem taxes, vitiating his breach of contract claim.3

“In order to effectively release a claim in Texas, the releasing instrument must ‘mention’ the claim to be released.” Victoria Bank & Trust Co. v. Brady, 811 S.W.2d 931, 938 (Tex. 1991). “The court will ascertain and give effect to the intention of the parties as of the time of execution of the release.” Sanus/New York Life Health Plan, Inc. v. Dube-Seybold-Sutherland Mgmt., Inc., 837 S.W.2d 191, 196 (Tex. App.—Houston [1st Dist.] 1992, no pet.). Any claims not clearly within the subject matter of the release are not discharged. Brady, 811 S.W.2d at 938; Sanus, 837 S.W.2d at 197. And general, categorical release clauses are narrowly construed. Brady, 811 S.W.2d at 938; Sanus, 837 S.W.2d at 197.

In support of his interpretation of the Agreement, Barforough relies on Keck, Mahin, & Cate v. National Union Fire Insurance Company of Pittsburgh, 20 S.W.3d 692 (Tex. 2000). In Keck, a law firm and its client entered into a release agreement that unequivocally stated their intention “to resolve the issue of Unpaid Fees to their mutual satisfaction.” Id. at 697. The Texas Supreme Court concluded that the parties' release agreement expressly forgave the client's existing debt for legal services rendered during a certain time period in exchange for the client's release of all present and future claims attributable to the law firm's legal work during the same period. Id. at 698. In interpreting the release, the Texas Supreme Court clarified its previous holding in Brady, noting that broad-form releases were not forbidden but such releases must “mention” the claims to be released. Id. at 698. The Keck court held that parties need not anticipate and identify each potential cause of action relating to the subject's released matter and that a valid release may encompass unknown claims and damages that develop in the future. Id. at 698. Accordingly, the Keck court held that, pursuant to the parties' release, the asserted claims arising from the released time period were barred even though the specific cases were not listed in the release. Id. at 698.

Here, the parties' Agreement includes a general, categorical release clause. Similar to the agreement in Keck, the parties' Agreement releases “claims made or which could have been made” by those defendants “related to the underlying property, Notes, Mortgages, and/or Deeds of Trust.” However, releasing the then existing “claims” is distinct from releasing the underlying mortgage obligation and any future claims arising from it. See Biggs v. ABCO Props., Inc., No. 13-03-00398-CV, 2006 WL 414919, at *3 (Tex. App.—Corpus Christi Feb. 23, 2006, pet. denied) (holding that release did not mention guaranties or security interests so they were not discharged, noting that phrase “claims” in release refers to potential causes of action between parties, not all previous obligations between or among parties). Unlike the release in Keck, here, the Agreement does not “mention” or expressly release Barforough from his mortgage obligations under the Note and deed of trust; nor does it unequivocally state the parties' intention to resolve Barforough's obligations under the Note. To the contrary, the Agreement expressly limits its coverage, noting that it “does not apply to any separate continuing contractual and/or equitable obligations as may currently exist between or among the parties.” Notably, the Agreement refers to the $6,000 that the defendants paid Barforough in exchange for his dismissal of all the claims alleged in that lawsuit as the bargained-for consideration. The Agreement does not state that it releases Barforough from his obligations under the $180,800 Note and deed of trust as consideration for the Agreement.

Because we must narrowly construe the release clause and harmonize and give effect to all of the provisions of the entire agreement, we conclude that the parties' Agreement did not expressly release Barforough from his obligations under the Note and deed of trust.4 See Brady, 811 S.W.2d at 938 (concluding claims not mentioned or clearly within subject matter of settlement agreement were not released); Sanus, 837 S.W.2d at 197 (same). Thus, Barforough's underlying mortgage obligation continued and appellees were entitled to subsequently pursue payment of the underlying debt. Accordingly, the trial court did not err in granting appellees' summary-judgment motion.

We overrule Barforough's sole issue.


We affirm the judgment of the trial court.


1.   MERS was the nominee for the lender, Merrill Lynch First Franklin Financial Corporation and its successors and assigns.

2.   At the time, Bank of America was the mortgage servicer. It later transferred the loan servicing function to Nationstar.

3.   For the first time on appeal appellees also assert that Barforough failed to establish the existence of a valid contract, noting that the record does not include a copy of the Agreement signed by Barforough. However, appellees relied on the Agreement in their summary-judgment motion and failed to challenge the Agreement in the trial court. Thus, they failed to preserve this issue for appeal. See TEX. R. APP. P. 33.1.

4.   Barforough also argues that a lien on the property could not exist without a mortgage or debt, which was extinguished by the previous settlement. Because we conclude that the debt was not released by the previous settlement, we need not address this argument.

Laura Higley Justice