HEWITT V. BISCARO
353 S.W.3d 304 (Tex. App. 2011)
NATURE OF THE CASE: Hewitt (D) appealed a summary judgment in favor of Biscaro (Ps),
investors, on their claim of breach of a settlement agreement.
FACTS: Ps allege Ds prepared private placement memoranda with knowledge of illegal
activity and enabled the fraud that was committed upon them. Ps also allege Ds committed
theft and misapplied fiduciary property. Ps sued D. Ps and Ds executed a 'Settlement
Agreement and Release' where Ds agreed to pay Ps a total of $1,300,000 through a series of
periodic payments. The settlement agreement also specified that its terms were to be kept
confidential. Ds paid $400,000 and then ceased payments. Ps amended their pleadings to
include a claim that Ds breached the settlement agreement. Ps sought the remaining amount of
$900,000 as damages and their attorney's fees. Ds filed an amended answer asserting the
affirmative defense of impracticability or impossibility of performance, contending they
'have been prohibited from tendering any funds by the Securities and Exchange Commission
(SEC). Ds also claim the cause of action for breach of the settlement agreement was barred
because 'compliance with the agreement would violate federal law.' D had been ordered by the
SEC to cease any payments to Ps and to cease any payments to any other individuals who
invested funds in oil and gas projects, pending the completion of a formal SEC investigation
involving Ds. The trial court granted Ps' motion for summary judgment. Ds appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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