Texas Mediated Settlement Agreement May Be Binding Even If Signed Before Divorce Is Filed

Texas family law allows the parties to a divorce to enter into a binding mediated settlement agreement (MSA).  If the agreement meets certain requirements, a party is entitled to judgment on the agreement.  In some cases, however, one party may wish to challenge a mediated settlement agreement.  In a recent case, a wife challenged the enforceability of a mediated settlement agreement.

The couple was married for about 10 years when the wife decided to end the marriage.  She sought a mediator, and the parties attended mediation without attorneys and executed a written MSA.

The MSA made the parents joint managing conservators, with the husband having the right to designate the kids’ primary residence.  The parties agreed the husband would keep the marital home and the wife would not pay child support.  The MSA required the wife to file the divorce petition within 10 days.  The MSA further provided the case would be finalized any time after May 1, 2015.

The husband filed a divorce petition nine days after the MSA was executed.  He asked the court to approve and render judgment consistent with the MSA.  The wife filed an answer with a general denial.  The husband and his attorney appeared in court, but the wife did not receive notice of the hearing and did not appear.  The trial court rendered oral judgment on the MSA at the hearing.

The wife moved to set aside the verdict, and alternatively, for a new trial.  She also moved to revoke the MSA, arguing it did not comply with the Family Code because it was signed before the divorce petition was filed.  She also argued the hearing had violated her due process rights because she had not received the required notice.  Finally, she argued the husband breached the MSA when he filed the divorce petition because the MSA provided she would do so.  The trial court denied the wife’s motions and incorporated the terms of the MSA into its final decree.

The wife appealed, and the appeals court reversed.  The appeals court held there must be a pending suit for divorce for an MSA to be statutorily binding.  The parties had executed the agreement before the divorce petition was filed, so it was just an ordinary contract.  The appeals court also found the wife had been denied due process when she did not receive notice of the hearing.  The appeals court held she was entitled to 45 days’ notice because she had made an appearance by filing the answer.

The husband petitioned for review by the Texas Supreme Court.  Pursuant to Texas Family Code Section 6.602, a mediated settlement agreement is binding if it includes a prominent irrevocability provision, is signed by both parties, and signed by any party’s attorney present.  If the agreement meets these requirements, it is binding on the parties and the court generally must adopt it in the divorce decree.

The wife argued the MSA was not enforceable because there was no divorce suit pending when it was signed.  The appeals court based its decision on language in the statute that a trial court “may refer a suit for dissolution of marriage to mediation.”  The Texas Supreme Court rejected this reasoning, noting that the statute allows a court to refer a divorce suit to mediation, but does not require it.  The Texas Supreme Court also noted that a trial court only has authority to order mediation once suit has been filed.  The statute does not restrict the parties’ right to voluntarily participate in binding mediation.

The Supreme Court of Texas held there was no requirement under the statute that the divorce suit be pending when the MSA was signed.  This MSA met the enumerated requirements of the statute and was therefore binding on the parties.

The Texas Supreme Court then considered whether the wife’s due process rights were violated.  Tex. R. Civ. P. 245 requires at least 45 days’ notice for contested cases, but provides that “[n]oncontested cases may be tried or disposed of at any time whether set or not…” The husband argued the parties had resolved their disputes through the MSA and the case was therefore not contested at the time of the hearing.  The Texas Supreme Court rejected this argument.

The Texas Supreme Court noted the wife had filed a general denial in answer to the petition.  She had made an appearance and put the matters raised in the petition at issue.  The case was therefore contested and the wife was entitled to notice.  The Texas Supreme Court also noted that MSA’s are often challenged and therefore the existence of an MSA does not make a case uncontested. The trial court erred in rendering judgment without the wife having notice of the hearing.

The Texas Supreme Court remanded the case to the trial court, but pointed out the court and parties would be bound by its holding that a pending suit is not required for the MSA to be binding under the statute.

The Texas Supreme Court has now resolved the question of whether a mediated settlement agreement is binding if it is signed before the divorce petition is signed.  If you are facing a divorce, an experienced Texas divorce attorney can guide you through the entire process, including mediation and trial if necessary.  Call McClure Law Group at 214.692.8200 to schedule a consultation.

Posted in:
Published on:

Comments are closed.

Contact Information