Texas spouses may agree in writing to partition or exchange some or all of their community property between themselves such that the property becomes the separate property of one spouse. A former wife recently challenged her divorce decree, arguing the trial court erred in awarding a reimbursement claim against her, reducing the spousal maintenance below the amount stated in the parties’ agreement, and including contingencies on the spousal maintenance that were not in the agreement.
According to the appeals court’s opinion, the parties married in 2006. They signed a Marital Property Partition and Exchange Agreement in 2020 that made two pieces of property the wife’s sole and separate property. She agreed to be responsible for the debt associated with them. The husband, however, made some of those payments from his community property income until the date of divorce.
The couple stopped living together in 2022 and the husband petitioned for divorce. The court enforced the agreement, but divided the other property according to the husband’s proposed division.
The court ordered the wife’s separate estate to reimburse the community estate for the payments made toward her separate property, $161,899.00 for one and $55,478 plus $2,336.00 for two months in arrears for the other property. It also ordered her to reimburse the community estate $5,786.00 for joint checks deposited into her account “by forgery.”
The court ordered this reimbursement “balancing payment” would be paid through a reduction of spousal maintenance. The court also placed four contingencies on the continuation of spousal maintenance. In its additional conclusions of law, the court ruled the husband gave up his right to reimbursement when he signed the agreement.
No Release of Community’s Reimbursement Claims
The wife appealed, arguing the marital property agreement released reimbursement claims as a matter of law pursuant to Tex. Fam. Code § 3.410. She also argued the terms of the agreement effectively released the husband’s claims for reimbursement.
The community estate would generally have a right of reimbursement for the kind of payments the husband made. A marital property agreement that meets the statutory requirements may release reimbursement claims.
Terms of the Agreement
The wife cited two provisions she claimed released reimbursement claims. The appeals court noted neither provision even mentioned reimbursement claims. A claim must be within the subject matter of and mentioned in the release. Victoria Bank & Trust Co. v. Brady. Additionally, martial property agreements are interpreted narrowly in favor of the community estate. Texas appeals courts in previous cases concluded that agreements that did not mention reimbursement had not released reimbursement claims. The appeals court also distinguished the community estate from each party’s separate estate and noted that even if the agreement released reimbursement claims by the husband’s separate estate, it would not necessarily have released the community estate’s claims. The appeals court concluded the agreement did not waive the husband’s or community estate’s reimbursement claims.
- 3.1410
The wife argued that, under § 3.1410, both parties released reimbursement claims just by signing the agreement. The appeals court disagreed, stating the statute just clarifies that marital property agreements can effectively waive or release claims in the same way they could before the statutory scheme was enacted. The appeals court further explained that interpreting the statute to waive all reimbursement claims just because a marital property agreement is signed could lead to unrepresented parties waiving their claims without notice.
Trial Court’s Conclusion
The wife also argued the trial court concluded the husband “gave up any right of reimbursement he might have otherwise had” through the agreement. The conclusion was that the husband gave up his rights to reimbursement, not that the community estate waived or released its rights. The appeals court therefore did not have to determine if the conclusion was valid or what effect it had. Additionally, even if the conclusion was erroneous, the judgment would not have to be reversed if the judgment was proper. The appeals court held the trial court erred when it concluded the husband “gave up” his reimbursement rights, but did not modify the judgment.
Contingencies
The wife also argued the court improperly changed the terms of the agreement. The agreement provided that, if the parties divorced after ten years, the husband would pay $5,000 per month in spousal maintenance for 120 payments. He could prepay either the entire $600,000 or part of it. The trial court found, pursuant to the agreement, the husband was to pay $5,000 per month in spousal maintenance, beginning February 1, 2024, with subsequent monthly payments until the first of three events occurred. Those events were: the death of either party; remarriage of the wife; a total of $455,000 being paid; or further court orders regarding maintenance, including a finding the wife was cohabiting. The court further found the parties agreed in a Rule 11 Agreement that the husband would get a credit of $15,000 against the funds he was to pay. The court also ordered that the balancing payment would be paid by reducing the total spousal maintenance from the $600,000 agreed to in the agreement to a total amount of $455,000.
The wife argued the trial court improperly reduced the spousal maintenance. The appeals court rejected her argument, noting the trial court did not change the terms of the agreement, but offset the amount owed to the husband against his maintenance obligation. The appeals court determined the trial court had the discretion to do this because “reimbursement is an equitable doctrine. . .”
The appeals court determined the condition related to the total amount was appropriate because it just enforced a term in the agreement, with the amount reduced due to the reimbursement claim. The other conditions, however, were not included in the agreement.
The husband argued the trial court properly added them pursuant to Tex. Fam. Code § 8.056, which provides that a spousal maintenance obligation ends upon the death of either party or the remarriage of the spouse receiving maintenance, and that the court shall order termination after a hearing if it finds the spouse receiving maintenance is cohabiting with a dating or romantic partner.
The statute cited by the husband addresses maintenance ordered by the court, not that agreed upon contractually by the parties. Court-approved voluntary spousal support obligations are addressed in Chapter 7 of the Texas Family Code, not Chapter 8. Unless there is express language that Chapter 8 will apply to a contractual provision, courts will apply contract law. Nothing in the agreement indicated the parties intended Chapter 8 to apply. The appeals court concluded the trial court abused its discretion by including the conditions that were not part of the agreement. The appeals court modified the decree to remove the contingencies that would end the husband’s maintenance obligation, other than reaching a total of $455,000. The appeals court then affirmed the modified judgment.
Seek Legal Representation
Pre-marital and post-marital agreements and spousal maintenance can be significant issues in a high net worth divorce. If you are considering entering into a pre-marital or post-marital agreement or if you are ending your marriage and have an agreement that could affect spousal maintenance or property division, you need a knowledgeable Texas divorce attorney on your side. Call 214.692.8200 to set up a consultation with McClure Law Group.