## Facts

- Investors sued an attorney, his law firm, and others over alleged misconduct connected to oil-and-gas drilling investments, including securities-law violations and fraud-related claims.
- During the litigation, the parties executed a written settlement agreement requiring defendants to pay $1,300,000 in periodic installments and to keep settlement terms confidential.
- Defendants paid $400,000, failed to make a later installment by its due date, and then stopped paying.
- Plaintiffs amended their pleadings to assert breach of the settlement agreement and sought the unpaid $900,000 plus attorney’s fees.
- Defendants asserted affirmative defenses of impossibility/impracticability based on claimed SEC instructions to stop paying during an investigation and excuse based on plaintiffs’ alleged breach of the confidentiality provision.
- Plaintiffs moved for traditional summary judgment on the breach-of-settlement claim and supported the motion with the settlement agreement and a demand notice.
- The trial court granted summary judgment for plaintiffs, awarding the unpaid balance and attorney’s fees.

## Issues

1. Whether defendants raised a genuine fact issue that performance was excused by impossibility/impracticability based on alleged SEC directives to cease payments.
2. Whether plaintiffs’ alleged breach of the settlement’s confidentiality clause excused defendants’ further performance.
3. Whether plaintiffs preserved hearsay objections to the affidavit offered by defendants in response to summary judgment.

## Decision

- The court of appeals affirmed the summary judgment for plaintiffs on breach of the settlement agreement.
- The impossibility/impracticability defense failed because defendants produced no competent evidence of an actual governmental order or legal restraint (e.g., written directive, cease-and-desist order, or court injunction) preventing payment.
- The confidentiality-breach defense failed because any alleged disclosure occurred only after defendants had already materially breached by missing the required payment.
- Plaintiffs’ hearsay objections to defendants’ affidavit were not preserved for appellate review because they were objections to form and no trial-court ruling was obtained.

## Legal Principles

- A governmental order or regulation may excuse contractual performance on an impossibility/impracticability theory only when supported by competent evidence of an actual order or legally effective restraint on performance.
- Informal communications with agency personnel, without a written directive, formal order, or court injunction, are insufficient to create a fact issue excusing performance.
- A party in prior material breach generally cannot rely on the other party’s later alleged breach to excuse its own nonperformance.
- Hearsay objections to a summary-judgment affidavit are objections to form and are waived on appeal unless the objecting party obtains a ruling in the trial court.

## Conclusion

The court enforced the settlement through summary judgment because defendants’ nonpayment was not legally excused: they showed no formal governmental action barring performance, and a claimed confidentiality breach occurred only after defendants’ own material breach.


Hewitt v. Biscaro, 353 S.W.3d 304 (Tex. App.—Dallas 2011)