

Opinion issued May 3, 2012

In The
Court of
Appeals
                                                        For
The     
First District
of Texas
————————————
NO. 01-11-00840-CV
NO. 01-11-00915-CV
———————————
IN
RE MARK H. HENRY, M.D., Relator
 
Mark
H. Henry, M.D., Appellant
V.
Marcos V. Masson, M.D., Appellee

 

 
On Appeal from the 295th District Court
Harris County, Texas

Trial Court Case No. 2003-40678
 

 
O P I N I O N
          This
case concerns breaches of a settlement agreement that attempted to resolve the
differences between appellant, Mark Henry, and appellee, Marcos Masson.  A jury found that both parties materially
breached the Settlement Agreement, but it awarded damages only to Masson.  In a previous opinion in this case, we
affirmed the verdict in favor of Masson and reversed the trial court’s ruling
that Henry take nothing on his claim of breach. 
We remanded in part for further proceedings in accordance with our
opinion.  See Henry v. Masson, 333 S.W.3d 825, 850 (Tex. App.—Houston [1st Dist.]
2010, no pet.).
          On
remand, Henry moved to amend the trial court’s judgment to reflect a $150,000
credit, to which we had determined he was entitled.  In response, Masson moved to sever Henry’s
claim for the credit from Masson’s own $100,000 jury award.  The trial court granted Masson’s motion to
sever, which finalized the part of the judgment in favor of Masson, and it
assigned a new cause number to Henry’s claim. 
Henry filed both a petition for writ of mandamus and an appeal,
contending that the trial court abused its discretion in granting the motion to
sever.
          We
deny Henry’s petition for writ of mandamus. 
Regarding the direct appeal, we vacate the trial court’s severance order
and remand the case to the trial court with instructions that the court enter a
final judgment that reflects the credit of $150,000 in favor of Henry, offset
by the $100,000 award in favor of Masson.
Background
          We
addressed the merits of the breach of the Settlement Agreement dispute between
Henry and Masson in our prior opinion in this case.  We provide a brief summary of the underlying
facts and of our prior opinion to place this subsequent procedural dispute in
context.
          Henry
and Masson used to be partners in an orthopedic surgery practice.  In 2003, Masson sued Henry for breach of
contract, breach of fiduciary duty, business disparagement, defamation, and
declaratory and injunctive relief.  Henry
counterclaimed for breach of contract, breach of fiduciary duty, conversion,
and fraud.  Several months later, in a
separate lawsuit, Henry sued Masson and two entities they had previously formed
to conduct transactions concerning a piece of property known as the Hepburn
Estates.  The trial court eventually
consolidated these two lawsuits.
          On
March 19, 2004, Henry and Masson entered into a Settlement Agreement, which
contained various provisions and requirements intended to aid the parties in
winding up their partnership.  The
Settlement Agreement also contained a provision requiring Henry to transfer his
ownership interest in the Hepburn Estates to Masson in exchange for $150,000 in
cash.  The parties agreed to release all
claims that they had against each other, except for agreements made in the
Settlement Agreement itself.
          After
Henry failed to meet a crucial deadline set forth in the Settlement Agreement
for providing windup documents to Masson, Masson separated his practice from
Henry’s.  Henry subsequently transferred
his interest in the Hepburn Estates to Masson as required by the Settlement
Agreement, but Masson did not pay the required $150,000 to Henry in
exchange.  Both parties then amended
their petitions to add causes of action for breach of the Settlement Agreement.
          On
November 15, 2004, a jury found that both Henry and Masson had materially
breached the Settlement Agreement, but that Henry had materially breached
first.  See id. at 831.  The jury awarded $75,000 in damages and
$25,000 in attorney’s fees to Masson for the breach.  Id. at 832.  The trial
court did not immediately enter final judgment, however.  Instead, it retained jurisdiction over the
dispute pending the winding up of the partnership.  Id. at 831.
          On
March 6, 2006, a year and a half after the jury trial on breach of the
Settlement Agreement, Masson moved for summary judgment on, among other claims,
Henry’s claim that he was entitled to $150,000 for transferring his interest in
the Hepburn Estates to Masson, arguing that this claim was released by the
Settlement Agreement.  Id. at 832.  The trial court agreed and rendered summary
judgment against Henry “due to the settlement and release agreement dated March
19, 2004 signed by Masson and Henry.”  Id.
          On
November 17, 2006, two years after the trial, the trial court issued an order
concluding, as a matter of law, that because the jury had found that Henry had
materially breached the Settlement Agreement first, Masson was excused from
further performance under the Agreement. 
Id.  The court noted that it was undisputed that
Henry had transferred his interest in the Hepburn Estates to Masson and that
Masson had not paid the $150,000 that he had promised in the Settlement
Agreement in exchange for Henry’s interest. 
Id.  On December 21, 2006, the trial court issued
another order “hold[ing] that the settlement
agreement is indivisible and that therefore Henry is not entitled to a credit
of $150,000 for the transfer of the Hepburn Estate[s]” to Masson.  Id.
          The
trial court rendered final judgment on May 21, 2007.  This judgment incorporated, among other
things, the jury verdict, the summary judgment ruling that Henry was not
entitled to a $150,000 credit for the Hepburn Estates, and the trial court’s
November 17, 2006 and December 21, 2006 orders. 
Id.  Both parties appealed various portions of the
trial court’s judgment.
          On
appeal, Henry challenged the sufficiency of the evidence supporting the
$100,000 jury award in favor of Masson on his breach of the Settlement
Agreement claim.  We affirmed this
portion of the trial court’s judgment.  See id. at
838–39.  Henry also argued that the trial
court erred in (1) not awarding him a $150,000 credit because he transferred
his interest in the Hepburn Estates to Masson pursuant to the Settlement
Agreement and Masson never paid him as required by the Agreement and (2)
rendering summary judgment in favor of Masson on this claim on the basis that
the release provision in the Agreement precluded the claim.  We sustained both of these issues.  See id.
at 839–46.
          We
noted that, generally, if a party materially breaches a contract, the
non-breaching party is excused from further performance, but, if the
non-breaching party insists on further performance after the breach, the contract
continues in effect, both parties remain bound by the terms of the contract,
and the non-breaching party is not excused from further performance.  See id.
at 840–41.  We
concluded that, after Henry’s material breach of the Settlement Agreement, Masson
retained the benefits of the Agreement, including title to the Hepburn Estates,
without paying for Henry’s interest, while treating the Agreement as continuing
for the purpose of winding up the partnership. 
Id. at 841.  We held, as a matter of law, that because he
continued to benefit from the Settlement Agreement, Masson was not excused from
performing his duties under the Agreement and, therefore, “Masson was obligated
to pay Henry $150,000 for the Hepburn Estates under the plain terms of the Settlement
Agreement.”  Id. at 841–42.
          Regarding
the trial court’s summary judgment ruling that the release provision of the
Settlement Agreement precluded Henry from recovering $150,000 for his interest
in the Hepburn Estates, we concluded that the parties released all claims
against each other “except for those set forth in the agreements made in the
Settlement Agreement itself.”  Id. at 845.  Henry’s claim for payment “arose out of the
express agreement in the Settlement Agreement itself that Henry transfer title
to the Hepburn Estates to Masson and that Masson pay him $150,000 for the
property,” and, therefore, Henry’s claim was not released by the
Agreement.  Id.  Because Masson accepted
title to the Hepburn Estates, he became obligated to pay $150,000 for that
interest pursuant to the Settlement Agreement, and the release provision did
not discharge this duty.  Id. 
We held that the trial court’s summary judgment rulings and subsequent
related orders, which precluded Henry from recovering $150,000 due to the
release provision, were erroneous.  Id. at 846.  We “remand[ed] the
case to the trial court for further proceedings in accordance with this
opinion.”  Id. at 850.  Neither party sought further review before
the Texas Supreme Court.
          Our
mandate for the prior opinion issued on March 10, 2011.  In the mandate, we reversed the portions of
the trial court’s judgment that ordered that Henry take noting on his claims
against Masson and that “incorporate[d] the trial court’s summary judgment
orders and render[ed] summary judgment in favor of
[Masson], dismissing [Henry’s] claim for payment for the transfer of his
interest in the Hepburn Estates property.” 
We affirmed the remainder of the judgment and “remand[ed] the case to the trial court for further proceedings.”
          Shortly
thereafter, Henry moved the trial court to amend its final judgment to reflect
his entitlement to a $150,000 credit for the transfer of his interest in the
Hepburn Estates.  In response, Masson
moved to sever Henry’s claim from his own claim for breach of the Settlement
Agreement that we had affirmed on appeal. 
Masson argued that, if severed, his jury award against Henry would
become final, and Henry’s pending claim could proceed to a new trial.  The trial court denied Henry’s motion to
amend the judgment, granted Masson’s motion to sever, and severed Henry’s claim
for payment into a separate cause number.
          After
the trial court granted Masson’s motion, Henry filed a petition for writ of
mandamus in this Court, which was assigned appellate cause number
01-11-00840-CV, seeking to compel the trial court to vacate its severance
order.  Henry subsequently filed a direct
appeal, which resulted in appellate cause number 01-11-00915-CV.  Henry’s argument in the direct appeal is
substantively identical to the contention presented in his mandamus petition.
Severance Order
          In
his petition for writ of mandamus and in his sole issue on direct appeal, Henry
contends that the trial court erroneously severed his claim for a $150,000
credit for his interest in the Hepburn Estates from Masson’s jury award for
breach of the Settlement Agreement, and he requests that we vacate the court’s
severance order.  We first address the
appropriate procedural vehicle—mandamus relief or direct appeal—for raising
this contention.
          A.      Propriety
of Mandamus Relief
          Mandamus
relief is available only to correct a clear abuse of discretion when there is
no adequate remedy by appeal.  In re Odyssey Healthcare,
Inc., 310 S.W.3d 419, 421 (Tex. 2010) (per curiam).  A trial court commits a clear abuse of
discretion when its action is “so arbitrary and
unreasonable as to amount to a clear and prejudicial error of law.”  In re
CSX Corp., 124 S.W.3d 149, 151 (Tex. 2003) (per curiam)
(quoting CSR, Ltd. v. Link, 925
S.W.2d 591, 596 (Tex. 1996)).  A trial
court has no discretion in determining what the law is or in applying the law
to the particular facts.  In re Prudential Ins. Co. of
Am., 148 S.W.3d 124, 135 (Tex. 2004).
          When a
trial court severs a lawsuit, two or more independent suits result, and each
suit leads to its own final appealable judgment.  Beckham
Grp.,
P.C. v. Snyder, 315 S.W.3d 244, 245 (Tex. App.—Dallas 2010, no pet.); Marin Real Estate Partners, L.P. v. Vogt,
No. 04-10-00602-CV, 2011 WL 5869520, at *30 (Tex. App.—San Antonio Nov. 23,
2011, no pet. h.) (“When a severance is granted, the separated causes proceed
to individual judgments—judgments that are separately final and
appealable.  In other words, after a
severance, there are two separate causes resulting in two separate judgments.”).  Depending on when in the course of the
lawsuit the severance occurs, a severance order may be interlocutory, in which
case, “mandamus is the appropriate avenue by which to seek review” of the
order.  Snyder, 315 S.W.3d at 245–46 (holding court lacked jurisdiction
over appeal of interlocutory order severing intervenor’s
attorney’s fees claim from divorce proceeding when no final judgment rendered
on attorney’s fees); In re Liu, 290
S.W.3d 515, 518 (Tex. App.—Texarkana 2009, orig. proceeding) (holding, “Mandamus
is the appropriate avenue by which a party may seek review of a trial court’s
order regarding severance” when relator sought pre-trial severance of claims
against him from plaintiff’s claims against other defendants on basis that
claims were separate and distinct).  In
some situations, however, “the granting of a severance makes the judgment in
the severed portion of the case final for purposes of appellate jurisdiction
regardless of whether the severance was proper.”  Rutherford v. Whataburger, Inc., 601 S.W.2d 441, 443 (Tex. Civ.
App.—Dallas 1980, writ ref’d n.r.e.)
(holding severance after trial court rendered partial summary judgment in favor
of defendants on two issues created final and appealable order); see also Lehmann v. Har-Con
Corp., 39 S.W.3d 191, 195 (Tex. 2001) (holding that judgment is final for
purposes of appeal if it disposes of all pending parties and claims).
          In
the prior appeal, we affirmed the trial court’s judgment on the jury verdict
awarding $100,000 to Masson on his claim for breach of the Settlement Agreement.  Henry,
333 S.W.3d at 839. 
We also reversed the trial court’s legal ruling in its post-trial orders
that Henry was not entitled to receive $150,000 for the transfer of his
interest in the Hepburn Estates to Masson, held that Masson was obligated, as a
matter of law, to pay $150,000 to Henry pursuant to the Settlement Agreement,
and remanded Henry’s claim to the trial court “for further proceedings in
accordance with this opinion.”  Id. at 841–42, 845–46,
850.  On remand, Masson sought,
and the trial court granted, severance of Henry’s claim for payment from
Masson’s jury award.  This severance
order, whether proper or improper, finalized Masson’s claim against Henry,
allowing Masson to seek execution on that judgment.  Thus, the trial court’s severance order
created a final judgment, from which Henry could, and did, appeal immediately
to challenge the propriety of the severance order.
          Because,
under the facts of this case, Henry had an adequate remedy by appeal after the
trial court granted Masson’s motion to sever, we conclude that mandamus relief
is not appropriate and that direct appeal is the proper procedural mechanism
for challenging this severance order.  We
therefore deny Henry’s petition for writ of mandamus, appellate cause number
01-11-00840-CV.
          B.      Propriety of Severance Order
          We
review a trial court’s ruling on a severance order for an abuse of
discretion.  Guar. Fed. Sav. Bank v. Horseshoe Operating Co., 793 S.W.2d 652, 658 (Tex. 1990) (“The trial court’s
decision to grant a severance will not be reversed unless it has abused its
discretion.”); Dalisa, Inc. v. Bradford, 81 S.W.3d 876, 879 (Tex. App.—Austin 2002, no pet.)
(“[T]rial courts have broad authority and their
decisions to grant or deny a severance will not be reversed on appeal absent an
abuse of discretion.”).  Generally, a
trial court properly exercises its discretion in severing claims when (1) the
controversy involves more than one cause of action; (2) the severed claim is
one that could be asserted independently in a separate lawsuit; and (3) the
severed actions are not so interwoven with the other claims that they involve
the same facts and issues.  Liu, 290 S.W.3d at 520.
          When
addressing the propriety of the trial court’s severance order in this particular
case, however, we must also consider the effect of our opinion in the previous
appeal.  On remand, the district court
has a mandatory, ministerial duty under our mandate to give effect to our
judgment and to “conduct any further proceedings necessary to dispose of the
cause in a manner ‘consistent with [the appellate court’s] opinion.’”  See
Tex. Health & Human Servs. Comm’n v. El Paso Cnty. Hosp. Dist., 351 S.W.3d 460, 472 (Tex.
App.—Austin 2011, pet. filed); Tex. Parks
& Wildlife Dep’t v. Dearing, 240 S.W.3d 330, 347 (Tex. App.—Austin
2007, pet. denied) (“Upon receiving the appellate court’s mandate, the lower
court has a mandatory, ministerial duty to enforce the appellate court’s
judgment.  It has no discretion to
review, interpret, or enforce the mandate, but, instead, [it] must carry out
the mandate.”).
When we remand a case and limit the
subsequent proceedings to a particular issue, the trial court is restricted to
a determination of that particular issue. 
Hudson v.
Wakefield, 711 S.W.2d 628, 630 (Tex. 1986).  “Thus, in a subsequent appeal, instructions
given to a trial court in the former appeal will be adhered to and
enforced.”  Id.  When interpreting our
mandate, the trial court “should look not only to the mandate itself, but also
to the opinion of the [appellate] court.” 
Id.; Simulis, L.L.C. v. Gen. Elec. Capital Corp., No. 14-09-01055-CV, 2011 WL
505334, at *4 (Tex. App.—Houston [14th Dist.] Feb. 15, 2011,
pet. denied); Freightliner Corp.
v. Motor Vehicle Bd. of Tex. Dep’t of Transp., 255 S.W.3d 356, 363 (Tex.
App.—Austin 2008, pet. denied) (“The opinion of the appellate court is
instructive in interpreting any limitations placed on the scope of the
remand.”).
Generally, if we reverse and remand
a case for further proceedings and our mandate is not limited by special
instructions, “the effect is to remand the case to the lower court on all
issues of fact, and the case is
reopened in its entirety.”  Simulis, 2011 WL
505334, at *4 (emphasis added).  However,
issues of law are governed by the
“law of the case” doctrine.  See Brown & Brown of Tex., Inc. v. Omni
Metals, Inc., 317 S.W.3d 361, 373 (Tex. App.—Houston [1st Dist.] 2010, pet.
denied).  The law of the case doctrine “is
defined as ‘that principle under which questions of law decided on appeal to a
court of last resort will govern the case throughout its subsequent stages.’”  Id. (quoting Loram Maint.
of Way, Inc. v. Ianni, 210 S.W.3d 593, 596
(Tex. 2006)).  Under this doctrine, a court of
appeals is ordinarily bound by its initial decision if there is a subsequent
appeal in the case.  Briscoe
v. Goodmark Corp., 102 S.W.3d 714, 716 (Tex.
2003); Brown & Brown, 317
S.W.3d at 373.  “By
narrowing the issues in the successive stages of the litigation, the law of the
case doctrine is intended to achieve uniformity of decision, judicial economy,
and efficiency.”  Brown
& Brown, 317 S.W.3d at 373
(quoting Briscoe, 102 S.W.3d at 716).  The doctrine is aimed at bringing finality to
litigation.  Briscoe, 102 S.W.3d at 716; Brown & Brown, 317 S.W.3d at 373.  It is an exception to the law of the case
doctrine, however, that the original decision was clearly erroneous.  Brown & Brown, 317 S.W.3d at 373.
          Here,
in our previous opinion, we affirmed the trial court’s judgment concerning
Masson’s claim for breach of the Settlement Agreement, and we upheld the
$100,000 jury award in Masson’s favor.  See Henry, 333 S.W.3d
at 834–39.  We also concluded
that, as a matter of law, the trial court erred in not awarding Henry a
$150,000 credit in the final judgment for his tender of the Hepburn Estates to
Masson pursuant to the Settlement Agreement and that the trial court erroneously
rendered summary judgment precluding Henry’s claim for payment based on the
“settlement and release agreement.”  See id. at
839–46.  With respect to Henry’s claim
for payment, we ultimately “remand[ed] the case to
the trial court for further proceedings in accordance with this opinion.”  Id. at 850.  Because
neither party filed a motion for rehearing or a petition for review with the
Texas Supreme Court challenging these holdings, our ruling became the law of
the case and controlling on remand.  See Loram Maint., 210 S.W.3d at 596; Brown & Brown, 317 S.W.3d at 373.
          Nevertheless,
after we remanded Henry’s claim for the $150,000 credit for further proceedings
in accordance with our opinion, Masson moved the trial court to sever Henry’s
claim to finalize his $100,000 jury award against Henry and to schedule Henry’s
claim for a new jury trial.  The trial
court agreed and granted Masson’s motion to sever, assigning a new cause number
to Henry’s claim.
          In
this appeal, Masson argues that a retrial of Henry’s claim is mandatory because
(1) our mandate “remands the case to the trial court for further proceedings,”
which requires a retrial under Texas Rule of Appellate Procedure 44.1(b),[1] and (2) Henry’s claim for
breach of the Settlement Agreement was submitted to a jury and, because the
jury found that Henry committed the first material breach, it did not answer
the jury question concerning Henry’s damages.
          We
conclude that Masson misconstrues both our prior opinion and Rule 44.1(b) and
that the trial court erred in granting Masson’s motion to sever and in
assigning a new cause number to Henry’s claim so that it could be retried.  Prior to the initial appeal in this case, the
jury found that Masson breached the Settlement Agreement, but the trial court later
ruled as a matter of law that Henry was not entitled to a $150,000 credit for
transferring his interest in the Hepburn Estates to Masson because the Settlement
Agreement released that claim.
          In
considering this case on remand, the trial court was bound by the law of the
case. See Briscoe, 102
S.W.3d at 716; Brown & Brown, 317 S.W.3d at 373.  When we remand a case and do not include
special instructions in our mandate, “the effect is to remand the case to the
lower court on all issues of fact . . . .”  Simulis, 2011 WL 505334, at *4 (emphasis added); see also Hudson, 711 S.W.2d at 630 (holding that “law of the case” doctrine
“only applies to questions of law and does not apply to questions of fact”); Dearing, 240 S.W.3d at 348 (observing
that “law of the case” doctrine “does not extend to questions of fact”).  Here, there are no factual questions to
resolve concerning Henry’s entitlement to $150,000 for the Hepburn Estates,
because we previously concluded, as a matter of law, that
Henry is entitled to this amount, and it is undisputed that it was never
paid.  Masson did not challenge this
holding in a motion for rehearing or in a petition for review.  Thus, the trial court on remand is bound by
our previous legal conclusion that Masson is obligated to pay Henry $150,000
for the Hepburn Estates.
          We
conclude that, under the facts of this case, Masson is obligated to pay Henry
$150,000 for the Hepburn Estates and that this amount is offset by the damages
awarded to Masson.  The trial court erred
in granting Masson’s motion to sever and in setting Henry’s claim for an
eventual jury trial separate from the other issues resolved in the first
appeal.
          We
sustain Henry’s sole issue on appeal.
Masson’s Motion to Dismiss
          Masson
moved to dismiss Henry’s appeal, contending that this Court lacks jurisdiction because
(1) we have already affirmed Masson’s claims against Henry, (2) Henry did not
timely file a motion for rehearing or petition for review of our previous
opinion, and (3) Henry seeks to appeal Masson’s claims, which is barred by res
judicata.  We deny this motion.
          Masson
assumes that, in this appeal, Henry seeks to re-litigate our previous decision
affirming the $100,000 jury award in favor of Masson on his claim for breach of
the Settlement Agreement.  We do not so
construe Henry’s motion for entry of judgment in the trial court or his appeal
from the trial court’s severance order. 
Henry challenges the trial court’s decision on remand not to amend its
prior judgment by entering a judgment awarding him $150,000 and its decision,
instead, to sever his claim for payment for the transfer of his interest in the
Hepburn Estates to Masson from Masson’s jury award so that Henry’s claim could
proceed to a new trial.  Henry does not
argue that our prior decision regarding Masson’s jury award is incorrect; rather,
he argues that, by severing the claims, the trial court erroneously disregarded
our holding that Henry is entitled to a $150,000 credit for the Hepburn Estates
that must be offset by the jury’s breach of contract verdict.
          We
agree with Henry, and, therefore, we deny Masson’s motion to dismiss.
 
Conclusion
          We
lift the temporary stays entered on October 7, 2011, and October 17, 2011, in
appellate cause number 01-11-00840-CV and deny Henry’s petition for writ of
mandamus.  We deny Masson’s motion to
dismiss filed in appellate cause number 01-11-00915-CV.  We vacate the trial court’s severance order
in appellate cause number 01-11-00915-CV, render judgment that Henry is
entitled to $150,000 on his breach of contract claim, offset by the $100,000 to
which Masson is entitled on his claim for breach of contract, and remand the
case to the trial court with instructions that the court enter final judgment
for Henry in the amount of $50,000, plus such other further relief to which he
is entitled.  All pending motions are
dismissed as moot.
 
 
                                                                   Evelyn
V. Keyes
                                                                   Justice

                                                                                                     
Panel
consists of Justices Keyes, Bland, and Sharp.




[1]           Texas Rule of Appellate Procedure
44.1(b) provides, “If the error affects part of, but not all, the matter in
controversy and that part is separable without unfairness to the parties, the
judgment must be reversed and a new trial ordered only as to the part affected
by the error.”  Tex. R. App. P.
44.1(b).


