## Facts

- Larry D. Horton owed DaimlerChrysler Financial Services Americas, L.L.C. (through its agent, Commercial Recovery Systems, Inc.) approximately $25,038.85 on a vehicle-related debt.
- Commercial sent Horton a written settlement offer stating it would accept $1,000 as “full and final settlement,” payable as $500 due June 15, 2003, and $500 due June 30, 2003, after which the full balance would be due.
- The offer also stated that “all derogatory credit information regarding this account will reflect the account to be settled,” allowing 90 days for credit information to be updated.
- Commercial received Horton’s first $500 check (dated June 14, 2003) on June 18, 2003.
- Commercial received Horton’s second $500 check (dated June 27, 2003) on July 2, 2003, accompanied by a July 1, 2003 letter describing the payment as Horton’s “final payment” and including additional language about full satisfaction and directions regarding negotiation of the check.
- Commercial accepted and negotiated both checks, and the parties generally treated the debt as settled.
- In 2005, Horton discovered adverse credit reporting about the account when applying to purchase a house and a commercial truck.
- Horton sued Daimler and Commercial for breach of contract, alleging the settlement required defendants to ensure the account’s credit reporting reflected a settled status.

## Issues

1. Whether acceptance and negotiation of the two payments could form an enforceable settlement agreement despite late receipt of the second payment.
2. Whether Horton’s July 1 letter constituted a counteroffer that altered or eliminated the settlement’s credit-reporting term.
3. Whether the settlement language regarding derogatory credit information imposed an enforceable obligation, and whether defendants conclusively negated breach for summary-judgment purposes.

## Decision

- The court of appeals reversed the summary judgment for Daimler and Commercial and remanded.
- The record did not establish as a matter of law that no contract formed due to late payment, given defendants’ acceptance and negotiation of both checks.
- The record did not conclusively establish that Horton’s July 1 letter was a counteroffer that displaced the credit-reporting term.
- The credit-reporting clause could be construed as a contractual promise, and material fact disputes remained as to intent, meaning, and performance.

## Legal Principles

- Summary judgment is improper when material fact issues exist; courts must view evidence and reasonable inferences in the nonmovant’s favor.
- Acceptance of late performance and negotiation of payment may support waiver of strict compliance with time-of-performance terms and may evidence contract formation.
- Whether a communication is a counteroffer, and whether it modifies an offer’s terms, typically turns on intent and reasonable interpretation and may present fact questions.
- Express settlement language may create enforceable duties beyond payment, including duties related to post-settlement reporting, when the language can reasonably be read as a promise.

## Conclusion

Because the summary-judgment record left fact questions about whether defendants waived the payment deadline by accepting the second check, whether Horton’s accompanying letter modified the settlement terms, and whether the credit-reporting language created and was breached as a contractual obligation, the appellate court reversed and remanded for further proceedings.


Horton v. DaimlerChrysler Fin. Servs. Ams., L.L.C., 262 S.W.3d 1 (Tex. App.—Texarkana 2008)