Is your Rule 11 Agreement Enforceable? Things to know about Rule 11 agreements in Texas.

David Stockel, Kasi Chadwick

May 3, 2017

Attorneys who practice law in State Courts in Texas are undoubtedly familiar with Texas Rule of Civil Procedure 11, more commonly referred to as the “Rule 11 agreement.”  The Rule 11 agreement can apply to many aspects of a lawsuit, from extending the deadline for objections and responses to written discovery to more complex settlement terms.  Because parties can enter into a Rule 11 agreement as to virtually any aspect of the litigation process, a complete and accurate understanding of the proper steps for entering into a Rule 11 agreement—and enforcing one after a breach—is critical.

The first step is forming a proper Rule 11 agreement. Texas Rule of Civil Procedure 11 provides that no agreement between attorneys or parties touching any suit pending will be enforced unless it is in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record.  Courts hold that, at their most basic level, Rule 11 agreements are enforceable contracts relating to litigation.  The purpose of Rule 11 is to ensure that agreements of counsel affecting the interests of their clients are not left to the fallibility of human recollection and that the agreements themselves do not become sources of controversy. Trial courts have a ministerial duty to enforce valid Rule 11 Agreements.

Most of the time, the parties or lawyers in a lawsuit broker their own Rule 11 agreements. Other times, Rule 11 agreements will be reached at the behest of the court. Regardless, after the agreement has been negotiated, papered, and filed with the court, the parties are bound.

Many times, a dispute will arise as to the meaning or interpretation of a Rule 11 agreement. In such a controversy, a court will examine a Rule 11 agreement just like any other written contract. The court’s primary objective in construing a written contract is to ascertain and give effect to the intentions the parties have objectively manifested in the written instrument.  Contract terms are given their plain, ordinary, and generally accepted meanings, and contracts are to be construed as a whole in an effort to harmonize and give effect to all provisions of the contract.

How does one enforce a Rule 11 agreement if disputed issues arise or one party contends that it has withdrawn consent? The only method available for enforcing a Rule 11 agreement is through summary judgment or trial. To allow enforcement of a disputed Rule 11 agreement simply on motion and hearing would deprive a party of the right to be confronted by appropriate pleadings, assert defenses, conduct discovery, and submit contested fact issues to a judge or jury. Lawyers and parties should appreciate that, in failing to adhere to a Rule 11 agreement, the parties are signing up for a round of motion practice that, most likely, is completely unrelated to the fundamental, disputed issues in the case.

Can a party revoke its consent to a Rule 11 agreement? Maybe. As ruled in ExxonMobil Corp. v. Valence Operating Co., a party may revoke their consent to a Rule 11 agreement at any time before rendition of judgment. However, even then, a court is not precluded from enforcing a Rule 11 agreement once the agreement has been repudiated by one of the parties.

Because Rule 11 agreements are controlled by contract law, an action to enforce a Rule 11 agreement to which consent has been withdrawn must be based on proper pleading and proof.  A party seeking enforcement must pursue a separate breach of contract claim and, as with most breach of contract claims in Texas, attorney’s fees can be recovered if the movant prevails. Again, this process will likely be an expensive corollary unrelated to the underlying issues in dispute. As a result, parties should aim to comply with their Rule 11 agreements so that the underlying issues in dispute may be efficiently adjudicated.

Finally, it is important not to overlook the requirement under Rule 11 that the agreement be “in writing” and “signed.” As noted in the Rule, a valid and enforceable Rule 11 agreement may be signed by attorneys for the parties or by the parties themselves. Because Texas has adopted the Uniform Electronic Transactions Act (an act stating that “[i]f the law requires a signature, an electronic signatures satisfies the law”), Texas courts hold that your electronic signature constitutes a signed writing in the Rule 11 context.

Interestingly, however, the mere sending of an email containing a signature block does not necessarily satisfy the Rule 11 signature requirement. When there is no evidence suggesting that the signature was typed purposefully rather than generated automatically, there is no signed Rule 11 agreement. See Cunningham v. Zurich Am. Ins. Co. As a result, in setting up your email preferences to automatically affix an electronic signature for outgoing messages, you most likely have not “signed’ any outgoing Rule 11 agreement absent an express agreement to be bound contained in the body of the message. At least as to Rule 11 agreements, automation does not always equate to efficiency.