## Facts

- Louis P. and Paula Quintero contracted with Jim Walter Homes, Inc. to build a residence in a good and workmanlike manner.
- Alleging misrepresentations and construction defects, the Quinteros sued under the Texas Deceptive Trade Practices–Consumer Protection Act and the Texas Consumer Credit Code.
- A jury found for the Quinteros, and on May 27, 1981 the trial court signed judgment awarding $78,385.65 and releasing the Quinteros from an installment note principal balance of $38,424.40.
- The Quinteros’ primary lawyer, who represented hundreds of similarly situated clients, negotiated a lump-sum, multi-client settlement with Jim Walter Homes to be distributed under counsel’s formula.
- On June 11, 1981, the Quinteros signed a release to participate in the aggregate settlement without knowing that a favorable judgment had already been entered; the lawyer and defense counsel also did not know of the judgment at that time.
- Under the formula, the Quinteros’ settlement value was far less than the existing judgment and debt cancellation.
- After learning of the judgment, the Quinteros repudiated the settlement and attempted to withdraw consent to any dismissal.
- Despite the attempted withdrawal, the trial court set aside the prior judgment and dismissed the case; the Texas Supreme Court later held a settlement-based judgment could not be rendered after consent was withdrawn before rendition and remanded.
- On remand, the trial court set aside the May 27, 1981 judgment and rendered a take-nothing judgment against the Quinteros, prompting this appeal.

## Issues

1. Whether the trial court, on remand, had a valid basis to set aside the May 27, 1981 judgment and render a take-nothing judgment.
2. Whether the aggregate settlement release and related dismissal procedure could extinguish the Quinteros’ rights under an already-entered judgment when the clients lacked full knowledge of material facts.
3. What effect insufficient disclosure in an aggregate settlement (including conflicts and fee and allocation information) has on the enforceability of the settlement and any dismissal predicated on it.

## Decision

- The court of appeals reversed the post-remand take-nothing judgment.
- The court held the trial court erred by setting aside the May 27, 1981 judgment.
- The court ordered reinstatement of the May 27, 1981 judgment in favor of the Quinteros.

## Legal Principles

- A settlement-based dismissal or agreed judgment is ineffective if a party withdraws consent before the court renders judgment on the agreement.
- An attorney generally lacks authority to compromise, settle, or dismiss a client’s claims without the client’s full knowledge and informed consent.
- Aggregate settlements require heightened disclosure so each client can evaluate the settlement, including material terms of the group resolution and how the client’s share is determined.
- A trial court on remand must act consistently with the appellate mandate and may not nullify a valid prior judgment absent a legally supported ground.

## Conclusion

The court held that the trial court’s post-remand take-nothing judgment improperly displaced a valid, previously entered judgment; because the dismissal depended on an aggregate settlement to which the Quinteros did not provide informed consent, the proper remedy was to reinstate the original judgment.


Quintero v. Jim Walter Homes, Inc., 709 S.W.2d 225 (Tex. App.—Corpus Christi 1986, writ ref’d n.r.e.)