OPINION

Pending before the Court is an agreed motion to dismiss this appeal pursuant to Tex.R.App. P. 42.1(a). Texas Rule of Appellate Procedure 42.1(a) states:

(a) On Motion or By Agreement. The appellate court may dispose of an appeal as follows:

(1) On Motion of Appellant. In accordance with a motion of appellant, the court may dismiss the appeal or affirm the appealed judgment or order unless disposition would prevent a party from seeking relief to which it would otherwise be entitled.

(2) By Agreement. In accordance with an agreement signed by the parties or their attorneys and filed with the clerk, the court may:

*188 (A) render judgment effectuating the parties’ agreements;

(B) set aside the trial court’s judgment without regard to the merits and remand the case to the trial court for rendition of judgment in accordance with the agreements; or

(C) abate the appeal and permit proceedings in the trial court to effectuate the agreement.

Tex.R.App. P. 42.1(a). The parties have complied with the requirements of Rule 42.1(a)(1).

The parties have settled all matters in controversy. By their motion, the parties have agreed that the underlying judgment should be vacated and a judgment of dismissal with prejudice should be rendered. Pursuant to Rule 42.1(a)(1), we grant the joint motion, vacate the trial court’s judgment, and render a judgment of dismissal with prejudice. Pursuant to the agreement of the parties, costs are taxed against the party incurring same. See Tex.R.App. P. 42.1(d).

CHEW, J., not participating.