Travelers Home and Marine Ins. Co v. Larry Price

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
Travelers Home and Marine
Insurance Company,
Plaintiff,
v.
Larry Price,
Defendant.
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Civil Action H-23-3318
MEMORANDUM AND ORDER
ON PLAINTIFF’S MOTION TO COMPEL SETTLEMENT
Pending before the court is Plaintiff Travelers Home and
Marine 	Insurance 	Company’s 	Motion 	to 	Compel 	Settlement.
ECF No. 60. 	The 	parties 	consented 	to 	the 	jurisdiction 	of 	the
undersigned magistrate judge for all purposes, including entry of
final 	judgment. 	ECF No. 10. 	Plaintiff’s 	Motion 	to 	Compel
Settlement is DENIED.
1. Procedural Posture
Travelers Home and Marine Insurance Company (Travelers)
sued 	Larry 	Price 	on 	September 	6, 	2023, 	seeking 	declaratory
judgment and recission of an insurance contract. Travelers had
issued an insurance policy to Price to cover a marine vessel. Price
later stated that the vessel had been stolen, and he submitted a
claim to Travelers to cover the theft. Travelers denied the claim
because of an alleged misrepresentation that Price made when he
applied for the policy. Price stated that he had not previously
suffered a “boating loss,” which Travelers discovered was not true.
Travelers 	initiated 	this 	lawsuit, 	seeking 	recission 	of 	Price’s
insurance policy, as well as a declaration that Price had made
material 	misrepresentations 	in 	his 	application 	that 	precluded
coverage for the theft.
United States District Court
Southern District of Texas
ENTERED
June 03, 2026
Nathan Ochsner, Clerk
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In the year after the case was filed, the court entered various
ministerial, procedural, and discovery orders. On October 16, 2024,
the parties filed a “Joint Notice of Settlement,” stating that they
had “reached a settlement in principle” and were “negotiating the
terms of a release.” ECF No. 39. Based on the Notice of Settlement,
the court entered an order that accomplished three things: it
dismissed the case with prejudice, it allowed the parties to move
for reinstatement by January 6, 2025 (about two months after the
order was entered), and it ordered that the court would retain
jurisdiction to enforce the settlement. ECF No. 40.
There was no activity on the docket until March 4, 2025—
nearly 	two 	months 	after 	the 	reinstatement 	deadline—when
Travelers filed its first Motion to Reinstate Action and Compel
Settlement. ECF No. 41. In that motion, Travelers explained that
the parties had reached a settlement agreement, but Price refused
to sign it. Id. at 1. Travelers argued that Price should be compelled
to comply with the settlement agreement that they reached. Id.
Without the assistance of counsel, Price filed his own Motion
to Reopen the Original Case, ECF No. 42, and a Response to
Travelers’ motion, ECF No. 43. In his Motion to Reopen, Price
stated that the settlement agreement that Travelers was seeking
to enforce was “never discussed with Defendant Larry Price and
his attorney.” Id. at 1. Price likely meant that he and his attorney
had not discussed the agreement between themselves, because in
the next sentence, Price states that the “Final settlement was only
discussed 	between 	the 	plaintiff’s 	attorney 	and 	defendant’s
attorney.” Id. Among other things, Price explained that he did not
sign the settlement agreement because he had rejected its terms.
Id. Price’s Response to Travelers’ motion is similar to his Motion
to Reopen, except that he adds that he was threatened with
criminal prosecution for refusing to settle the case. ECF No. 43.
Thereafter, Price’s counsel withdrew from the case. ECF No. 51.
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On August 27, 2025, the court held a hearing on the pending
motions. At the hearing, the court explained that the preliminary
question before the court was whether any agreement had been
reached. ECF No. 56 at 4. The court further explained that the
pending motions were not supported by evidence sufficient for the
court to resolve that preliminary issue. Id. The court denied both
motions but allowed Travelers to file a single motion to enforce the
settlement 	agreement 	supported 	by 	“evidence 	showing 	the
existence, terms, and enforceability of the settlement agreement.”
ECF No. 54.
Travelers filed its second Motion to Compel Settlement on
October 13, 2025. ECF No. 60. The following month, the court
held a hearing on the motion. At the hearing, the court discussed
the many documents that had been attached as evidence and
expressed concern that Price’s counsel appeared to have entered
into a settlement agreement without Price’s authority. ECF No. 66
at 10. The court ordered further briefing on the issue of “whether
there is a settlement agreement that can be enforced against
Defendant, in light of the assumption that Defendant’s former
attorney acted without Defendant’s authority. ECF No. 64.
Travelers’ Motion to Compel Settlement is now fully briefed.
The court has before it sufficient evidence to decide the issue.
While the parties dispute the conclusions that should be drawn
from the evidence, there do not appear to be any factual disputes.
2. Events Leading to Dismissal of this Case
The parties have attached to their briefing declarations by
the lawyers that were responsible for attempting to settle this case
as well as numerous emails that were sent between the lawyers
and between Price and his counsel. The court will next walk
through 	those 	emails 	in 	roughly 	chronological 	order. 	In 	this
discussion “Elmasri” refers to Ramy Elmasri, Travelers’ counsel
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and 	“Contreras” 	refers 	to 	Lindsay 	Contreras, 	Price’s 	counsel.
Communications between Contreras and Price are italicized.
June 6, 2024 	Price informed Contreras that he wanted
to 	settle 	the 	case. 	He 	proposed 	that
Travelers pay the attorney’s fees he had
thus far incurred and, in exchange, he
would not pursue any further litigation.
ECF No. 60-3 at 7.
June 10, 2024 	Contreras 	presented 	a 	settlement
demand to Elmasri seeking $15,000 and
mutual 	releases 	of 	liability, 	with 	a
promise of dismissal with prejudice, and
that 	Price 	would 	accept 	denial 	of 	his
insurance claim. ECF No. 60-2 at 9.
June 23, 2024 	Elmasri stated that Travelers accepted
all 	terms 	except 	payment 	of 	$15,000.
ECF No. 60-2 at 8.
June 27, 2024 	Contreras 	communicated 	Travelers’
settlement 	proposal 	to 	Price. 	ECF
No. 60-3 at 18.
Price 	responded 	to 	Contreras, 	stating,
“Tell them we will move forward with the
case.” ECF No. 60-3 at 20.
July 15, 2024 	Contreras emailed Price to confirm that
he “would like to accept the walk-away
deal proposed by Travelers so long as you
can 	still 	go 	after 	Goosehead.” 	ECF
No. 60-3 at 22.
Price stated “Yes I confirm this email.”
ECF No. 60-3 at 28.
July 16, 2024 	After an exchange of emails discussing
the settlement proposal and other details,
Price emailed Contreras to say that he
would “go ahead with the walk away,”
and 	stated, 	“I 	think 	I 	should 	get 	my
payment of over 1600 back as well.” ECF
No. 60-3 at 31.
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Contreras 	stated 	that 	she 	would
“proceed.” ECF No. 60-3 at 31.
Contreras 	communicated 	to 	Elmasri
that Price accepts the proposed terms of
the 	walk-away 	deal. 	She 	added 	this
sentence, which is central to the current
dispute: “One minor additional note,
I believe we also in the past talked
about refund of Mr. Price’s premium
under
the 	policy 	(roughly 	$1,600) 	which
you 	[Elmasri] 	indicated 	may 	be
required by law – if we could please
address this as part of settlement
too.”1 ECF No. 60-2 	at 8 	(emphasis
added).
July 22, 2024 	Contreras asked Elmasri whether they
needed 	to 	discuss 	the 	settlement 	any
further. ECF No. 60-2 at 7.
July 23, 2024 	Elmasri 	stated, 	“Just 	waiting 	on 	my
client to approve the terms of the release.
Once I have approval I will send over for
your review.” He did not mention the
$1,600. ECF No. 60-2 at 7.
July 24, 2024 	Contreras stated to Price that Travelers
was aware he wanted to settle and that
they were “in the process of preparing a
written release . . . for us to review.” ECF
No. 60-3 at 38.
Aug. 14, 2024 	Contreras wrote to Elmasri to inquire
about the status of the settlement, again
with 	no 	mention 	of 	the 	$1,600. 	ECF
No. 60-2 at 6–7.
1 As will be discussed, Travelers takes the position that “Price’s counsel never
indicated that return of Price’s insurance premiums was a material condition to Price
accepting the settlement. Rather it was expressly understood that no money would be
exchanged in this settlement.” ECF No. 60-2 at 2 (¶ 12).
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Elmasri sent Contreras an email with an
attached copy of a proposed settlement
agreement. ECF No. 60-2 at 6. It is not
clear to the court exactly which version
of the proposed settlement 	agreement
Elmasri sent, but an unsigned copy of a
settlement 	agreement 	follows 	the
August 14 email string, and it does not
contain any mention of the $1,600. ECF
No. 60-3 at 46–55.
Sept. 10, 2024 	Contreras 	informed 	Elmasri 	that 	she
was 	working 	on 	the 	settlement
agreement 	and 	would 	“circulate 	[her]
revisions this week.” ECF No. 60-2 at 6.
Elmasri wrote to Contreras asking, “You
ok with a Joint Notice of Settlement so
that we can get off the docket?” ECF
No. 60-2 at 12.
Sept. 17, 2024 	Jacquie 	Goldman 	of 	the 	Goldman
Maritime 	Group 	sent 	a 	draft 	of 	the
Notice 	of 	Settlement 	to 	Contreras,
copying Elmasri. ECF No. 60-2 at 11.
Sept. 18, 2024 	Contreras emailed Elmasri a markup of
a 	settlement 	agreement, 	which
included a provision for Price to be
refunded his entire premium in the
amount of $1,646. ECF No. 60-3 at 56,
61.
Elmasri responded to Contreras, stating,
“I will discuss with Travelers and get
back to you.” ECF No. 60-3 at 68.
The court notes here that the parties had not yet reached an
agreement and that Contreras had explicitly requested refund of
the premium. Elmasri then presented the settlement demand,
including refund of the premium, to his client.
The timeline continues.
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Oct. 15, 2025 	Contreras 	sent 	back 	the 	Notice 	of
Settlement with minor modifications for
Goldman to file.
Oct. 16, 2024 	Elmasri wrote to Contreras, stating, “I’m
following up re: our discussion yesterday
and will get back to you shortly.” ECF
No. 60-2 at 10.
Oct. 25, 2024 	Elmasri informed Contreras that he had
“run into an issue regarding the return
of 	the 	premium.” 	He 	explained 	that
Travelers had already canceled Price’s
insurance 	policy, 	and 	Travelers 	could
not 	return 	the 	premium 	without
reinstating the policy, which it did not
want to do. He added, “[Travelers is] fine
with the deletion of the indemnification
language.”
The court notes a few things at this point. Contreras had
requested return of Price’s premium, and it appears that Elmasri
followed up with Travelers about that request. Travelers refused
the request. At the same time, Travelers offered to remove the
indemnification language from the settlement agreement. It is
very difficult to understand how either of the lawyers could have
believed 	the 	case 	was 	settled 	at 	this 	point. 	There 	was 	an
outstanding demand for money, which Travelers had refused, and
the parties were still discussing the terms of the agreement.
The 	court 	continues 	with 	the 	discussion 	of 	the 	parties’
emails.
Nov. 4, 2024 	The 	court 	dismissed 	the 	case 	with
prejudice based on the parties’ Notice
of 	Settlement. 	ECF No. 40. 	It 	gave 	a
deadline of January 6, 2025, to move for
reinstatement. Id.
Dec. 16, 2024 	After 	several 	emails 	indicating 	that
Contreras 	and 	Elmasri 	had 	discussed
the case, Contreras sent a lengthy email
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to 	Elmasri 	with 	the 	subject 	line
“Travelers 	Return 	of 	Premium.” 	She
referred 	to 	and 	attached 	a 	November
2023 	email 	from 	a 	different 	lawyer
representing 	Travelers 	who 	had
proposed 	return 	of 	the 	premium.
Contreras explained that she had agreed
to 	dismissal 	of 	the 	case 	because 	she
believed 	Price 	would 	receive 	his
premium 	back. 	She 	also 	cited 	Texas
law 	and 	the 	insurance 	policy 	for
the 	proposition 	that 	cancelation 	of
an 	insurance 	policy 	requires 	return
of 	the 	premium. 	She 	concluded, 	“For
these 	reasons, 	I 	urge 	Travelers 	to
consider 	returning 	my 	client’s 	small
insurance premium so that settlement
can 	conclude.” 	ECF No. 60-2 at 17
(emphasis added).
Dec. 20, 2024 	Contreras followed up with Elmasri to
see whether he had heard anything from
Travelers. ECF No. 60-2 at 17
Elmasri stated, “Nothing yet. I’ll follow
up on Monday.” ECF No. 60-2 at 16.
Dec. 30, 2024 	Contreras again asked Elmasri for an
update and said, “I was hoping we could
get this one signed/finished up before the
Court’s deadline to reinstate the case.”
ECF No. 60-2 at 16.
Jan. 6, 2025 	The deadline for reinstatement of the
case passed. ECF No. 40.
Jan. 7, 2025 	Elmasri attached a proposed settlement
agreement 	to 	an 	email 	to 	Contreras,
asking, “How’s this?” He also stated that
“Travelers still doesn’t want to do the
premium return. Maybe he can get it
from 	Goosehead.” 	ECF No. 60-2 at 15.
The version of the settlement agreement
following 	the 	email 	string 	does 	not
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include 	return 	of 	the 	premium. 	ECF
No. 60-3 at 91–101.
Jan. 23, 2025 	Still under the subject line “Travelers
Return of Premium,” Contreras emailed
back several requested modifications to
the settlement agreement but made no
mention 	of 	the 	premium. 	She 	stated,
“If you make these changes and circulate
a final, I will have my client sign it.” ECF
No. 60-2 at 15. 	The 	version 	of 	the
agreement that Contreras attached with
her edits does not contain any mention of
the premium. ECF No. 60-3 at 106–16.
Feb. 5, 2025 	After Elmasri and Contreras exchanged
several 	emails 	discussing 	changes
and 	modifications 	to 	the 	agreement,
Contreras 	sent 	an 	email 	stating, 	“I
intended to say this is a final copy that
everyone can sign.” ECF No. 60-2 at 14.
Contreras emailed Price explaining the
terms of the settlement agreement. About
return of the premium, she stated that
she could not convince Travelers to do
that, despite its earlier offer to do so.
She explained that she and others at her
firm “decided amongst ourselves that we
would 	credit 	your 	invoice 	for 	$1,600
despite 	Traveler’s 	unwillingness 	to
provide payment. This puts you in the
place 	you 	hoped 	to 	be 	when 	we 	last
discussed 	settlement 	in 	this 	case 	(i.e.
using the refunded premium as a credit
against 	our 	invoices).” 	ECF No. 60-3
at 150.
Price responded to Contreras stating that
he would not sign the agreement without
Travelers 	“returning 	the 	1600.” 	He
stated, “Your firm does not need to lose
any money on my account.” He said that
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he “absolutely refuse[d] to sign without
the 1600 returned to your firm [and] I
didn’t [do anything] wrong and they have
cost me enough money and the 1600 is the
line drawn in the sand.” ECF No. 60-3
at 166.
Feb. 10, 2025 	Elmasri sent an email stating “Please
see the SA executed by Travelers. Once
we have Mr. Price’s signature, we can
finally close this one out.” ECF No. 60-2
at 13. Attached to Travelers’ brief is a
copy 	of 	a 	Settlement 	and 	Release
Agreement 	signed 	by 	Travelers 	on
February 	10, 	2025, 	which 	makes 	no
mention 	of 	the 	return 	of 	Price’s
premium. ECF No. 60-2 at 19–29.
Feb. 17, 2026 	Elmasri wrote to Contreras stating that
he had been contacted by other counsel
for Price who were seeking to pursue
Price’s claims. He asked Contreras about
the status of the settlement agreement
and 	explained 	that 	he 	did 	not 	want
to 	move 	to 	enforce 	the 	settlement
agreement. ECF No. 60-2 at 15.
3. Legal Standards
Travelers 	brought 	this 	lawsuit 	under 	general 	federal
maritime law and argues that federal law governs whether the
court should enforce the settlement agreement in this case. ECF
No. 	60 	at 	5. 	Federal 	law 	determines 	whether 	a 	settlement
agreement is valid in cases where the substantive rights and
liabilities of the parties derive from federal law. Mid-South Towing
Co. v. Har-Win, Inc., 733 F.2d 386, 389 (5th Cir. 1984). On the
other hand, state law may control when there is no substantial
federal interest or policy that would require application of federal
law. Diaz v. Rio Grande Res. Corp., No. SA-05-CA-209-XR, 2006
WL 3337520, at *2 (W.D. Tex. Nov. 15, 2006). While this case
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involves a federal maritime insurance contract, it is not at all clear
that federal law would control the substantive issues. Cf. Albany
Ins. Co. v. Anh Thi Kieu, 927 F.2d 882, 888–90 (5th Cir. 1991)
(engaging 	in 	a 	lengthy 	and 	complex 	analysis 	and 	ultimately
applying 	Texas 	law 	in 	the 	context 	of 	a 	maritime 	insurance
contract).
The parties have given little attention to the question of
whether state or federal law applies here. Fortunately, there do
not appear to be any material differences between the two sources
of law as they apply to the critical issues in this case. There is
certainly a difference between the writing requirements for an
enforceable settlement agreement. Federal law does not require
settlement agreements to be reduced to writing, EEOC v. Philip
Services Corporation, 635 F.3d 164, 167 (5th Cir. 2011), while
Texas Rule of Civil Procedure 11 does. This case does not turn on
whether the settlement agreement was reduced to writing. The
critical questions in this case relate to Price’s counsel’s authority
to settle the case.
Federal law and Texas law apply virtually identical and
well-known agency principles that govern an attorney’s authority
to settle a client’s case. An attorney may not settle a client’s case
without express authority. Rio Grande, 2006 WL 3337520, at *2
(citing Mid-South Towing, 733 F.2d at 389, which applied federal
law to the question). However, an attorney of record is presumed
to have authority to settle a client’s case, and a judgment based on
a settlement agreement entered into by the lawyer will be set aside
only upon affirmative proof that the attorney had no right to enter
into the agreement. Id.
A settlement agreement entered into by an attorney who
lacked 	authority 	will 	not 	be 	enforced. 	Rio 	Grande, 	2006 	WL
3337520, at *3. Authority may either be express or implied. Id;
Mid-South Towing, 733 F.3d at 391. Actual authority is that which
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is intentionally conferred by the principal on the agent, or that the
principal 	allowed 	the 	agent 	to 	believe 	was 	conferred, 	while
apparent authority exists when the principal’s conduct toward
third parties allows those third parties to believe that the principal
has the authority to act on behalf of the principal. Rio Grande,
2006 WL 3337520, at *3; Fennell v. TLB Kent Co., 865 F.2d 498,
502 (2d Cir. 1989) (applying federal law). In any event, apparent
authority is not created merely by retaining a lawyer. Fennell, 865
F.2d at 502. And the agent cannot create apparent authority by his
own actions or representations. Id.
Procedurally, 	“when 	opposition 	to 	enforcement 	of 	the
settlement is based not on the merits of the claim but on a
challenge to the validity of the agreement itself, the parties must
be 	allowed 	an 	evidentiary 	hearing 	on 	disputed 	issues 	of 	the
validity and scope of the agreement.” In re Deepwater Horizon, 786
F.3d 344, 354 (5th Cir. 2015).
4. Analysis
The court held a hearing on the pending motion and allowed
the parties to submit evidence. On review of the evidence, it does
not appear that there is any dispute about the facts. The only
dispute is about the inferences and conclusions that may be drawn
from 	those 	facts. 	Accordingly, 	the 	court 	proceeds 	without
conducting a full evidentiary hearing.
The facts set out in exhaustive detail above reveal that Price
never agreed to settle without receiving a refund of his premium.
Contreras knew that it was important to Price that he receive his
premium refund, yet she agreed to accept as final a settlement
agreement that did not include the refund. Her final emails with
Price show that she unilaterally decided to credit Price’s invoice
with her office rather than let the settlement fall apart based on
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such a small amount of money. But that was not her choice. She
lacked authority to settle the case.
Travelers 	argues 	that 	Contreras 	“never” 	indicated 	that
return of the premium was a material term of the settlement. The
court disagrees. Contreras asked that the refund be made part of
the settlement, she sent a version of the settlement agreement
with a redline edit that included return of the premium, and there
was an entire email string devoted to discussing return of the
premium. For those same reasons, Travelers’ argument that it
never understood that Price’s agreement was contingent upon
return of the premium is disingenuous at best. There was a lengthy
back and forth about the premium. Elmasri took the proposal to
his client. Ultimately, Travelers refused to return the premium.
But there is no question that return of the premium was holding
up closing on the settlement for quite some time.
Contreras finally relented on the premium, but never with
her client’s blessing. She sent a final version of the agreement to
Travelers without any mention of the premium, which Travelers
accepted. The issue is whether Contreras had apparent authority
to do that. She did not. Price was somewhat relentless in his
pursuit of the premium refund. He never manifested to any third
party, and certainly not to Contreras or Elmasri, that he would
accept a settlement that allowed Travelers to forego return of the
premium. It was clearly important to Price.
Here, there is affirmative proof that Contreras had no right
to enter into an agreement with Travelers. At no point did Price
agree to the proposed settlement agreement to which Contreras
referred as the “final copy.” Contreras had no actual or apparent
authority to accept a version of the agreement that omitted return
of Price’s premium. Accordingly, there is no settlement agreement
to enforce.
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5. Conclusion
For these reasons, Plaintiff’s Motion to Compel Settlement,
ECF No. 60, is DENIED.
Signed at Houston, Texas, on June 3, 2026.
______________________________________
Peter Bray
United States Magistrate Judge
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