Court of Appeals of Texas, Dallas.

James RUSSELL, Jr., Appellant,

v.

The CITY OF DALLAS, Appellee.

No. 05-94-01230-CV

|

June 20, 1995.

Before Justices CHAPMAN, WHITTINGTON, and DEVANY.

CHAPMAN, Justice.

OPINION

*1 Appellant James Russell appeals the trial court’s judgment enforcing a settlement agreement. In four points of error, Russell contends generally, the trial court erred: (1) in enforcing the settlement agreement, (2) in ordering the parties to submit an agreed judgment in another cause, and (3) in awarding attorneys’ fees. We reverse.

FACTUAL AND PROCEDURAL BACKGROUND

The City of Dallas sued Russell to enforce a settlement agreement he executed in a previously filed workers’ compensation case. In the workers’ compensation case, the trial court ordered a mediation. The parties executed a settlement agreement purporting to settle Russell’s workers’ compensation claim. However, Russell withdrew his consent to the agreement before the trial court approved it and before an agreed judgment was entered.

The City filed this suit seeking to enforce the settlement agreement as a contract. The trial court found the settlement agreement executed in the prior action was a valid and enforceable contract. The trial court further ordered Russell to enter an agreed judgment in the workers’ compensation case.

ENFORCEABILITY OF THE SETTLEMENT AGREEMENT

Parties’ Contentions

In his first point of error, Russell contends the trial court erred in finding the settlement agreement was enforceable. He asserts that a settlement agreement in a workers’ compensation case is not binding and enforceable unless and until approved by the trial court.

The City contends the settlement agreement is a binding and enforceable contract. It asserts that, in workers’ compensation cases, only the Industrial Accident Board need approve a compromise settlement agreement. See Act of March 28, 1917, 35th Leg., R.S., ch. 103, § 1, 1917 Tex. Gen. Laws 269, 280 (Tex. Rev. Civ. Stat. Ann. art. 8307, § 12), repealed by Act of December 12, 1989, 71st Leg., 2nd C.S., ch. 1, § 16.01(10), 1989 Tex. Gen. Laws 114. The City maintains that if a settlement agreement is executed after a case is appealed to the trial court, the trial court is not required to approve the agreement.

Applicable Law

Contract law applies to settlement agreements. Stevens v. Snyder, 874 S.W.2d 241, 243 (Tex. App.-Dallas 1994, writ denied). Generally, once a party accepts a settlement offer, he cannot withdraw from the agreement arbitrarily. Ortega-Carter v. Am. Int’l Adjustment Co, 834 S.W.2d 439, 442 (Tex. App.-Dallas 1992, writ denied). However, a special rule of law applies to workers’ compensation cases. Esco v. Argonaut Ins. Co., 405 S.W.2d 860, 863 (Tex. Civ. App.-Beaumont 1966, writ ref’d n.r.e.). A workers’ compensation claimant cannot settle his claim by signing a common-law release. Starnes v. Texas Emp. Ins. Ass’n, 549 S.W.2d 46, 46 (Tex. Civ. App.-Dallas 1977, writ ref’d n.r.e.). Article 8307, section 12a of the Texas Revised Civil Statutes¹ provides:

On the application of either party to a suit to set aside the award of the board, the court may approve a settlement agreement presented at any time before the jury has returned in the trial of the suit. In approving the settlement agreement, the court may either conduct a hearing on the agreement or approve it without a hearing if the claimant submits a sworn affidavit acknowledging his agreement to settle the cause of action and evidencing his full understanding of all the provisions of the settlement agreement.

*2 Act of May 18, 1977, 65th Leg., R.S., ch. 667, § 1, 1977 Tex. Gen. Laws 1686 (Tex. Rev. Civ. Stat. Ann. art. 8307 § 12a), repealed by Act of December 12, 1989, 71st Leg., 2nd C.S., ch. 1, § 16.01(10), 1989 Tex. Gen. Laws 114. The legislative intent of the workers’ compensation laws as a whole is to declare a public policy that settlements in workers compensation cases are not binding until approved. Texas Employers Ass’n v. Miller, 137 Tex. 449, 453, 154 S.W.2d 450, 452 (1941). If the claim is pending before the board, the board must approve the agreement, and if pending before the trial court, the court must approve it. Id.

Thus, contrary to the City’s assertion, settlement agreements in workers’ compensation cases must be approved by the trial court. Miller, 137 Tex. at 453, 154 S.W.2d at 452; Starnes, 549 S.W.2d at 46. A settlement agreement entered into without approval is void and wholly ineffective. Sanchez v. Liberty Mutual Ins. Co., 570 S.W.2d 44, 46 (Tex. Civ. App.-Houston [14th Dist.] 1978, writ ref’d n.r.e.); Cf. Brannam v. Texas Employers Ass’n, 151 Tex. 210, 213, 248 S.W.2d 118, 119 (1952). Further, a claimant has the right, at any time before the trial court’s approval, to withdraw from the agreement for any reason. Cf. Brannam, 151 Tex. at 213, 248 S.W.2d at 119.

Application of Law to Facts

The City sued Russell to enforce a settlement agreement executed in a workers’ compensation case. The trial court never approved the settlement agreement. Accordingly, the settlement agreement was void and of no effect. See Miller, 137 Tex. at 453, 154 S.W.2d at 452. We sustain Russell’s first point of error.

ATTORNEYS’ FEES

In his fourth point of error, Russell contends the trial court erred in awarding attorneys’ fees. Under section 38.001 of the Civil Practice and Remedies Code, attorneys’ fees are recoverable in a suit on a contract. However, to be entitled to attorneys’ fees, the attorneys’ fees claimant must present a valid claim. See Angelo Broadcasting, Inc. v. Satellite Music Network, 836 S.W.2d 726, 736 (Tex. App.-Dallas 1992, writ denied). We have determined the City’s contract claim was not valid. Accordingly, we sustain Russell’s fourth point of error. Because of our disposition of this case, we do not reach Russell’s second and third points of error. We reverse the trial court’s judgment and render judgment that the City take nothing.

	Footnotes
1		The citations in this opinion will be to the version of the statute in effect in 1989, the time of Russell’s injury. See Harris v. Varo, Inc., 814 S.W.2d 520, 523 (Tex. App.-Dallas 1991, no writ) (provisions of the workers’ compensation law in effect at the time of injury determine the rights and duties of the parties).