Alternative Dispute Resolution and Informal Settlement
I. Alternative Dispute Resolution
§ 18.1Alternative Dispute Resolution Generally
Five different alternative dispute resolution (ADR) methods are described in subchapter B of chapter 154 of the Texas Civil Practice and Remedies Code: mediation, arbitration, summary jury trial, mini-trial, and moderated settlement conference.
Mediation: Mediation is a process in which a neutral third party acts as a facilitator to assist in resolving a dispute between two or more parties. It is an approach to conflict resolution in which the parties generally communicate directly. The role of the mediator is to facilitate communication between the parties, help them focus on the real issues of the dispute, and generate options for settlement. A mediator may not impose the mediator’s judgment on the issues for that of the parties. The goal of mediation is for the parties themselves to arrive at a mutually acceptable resolution of the dispute. As with all ADR procedures, the mediation process is flexible; variables affecting the process include the style of the mediator and the communication mode of the parties. See Tex. Civ. Prac. & Rem. Code § 154.023 for a definition of mediation.
Arbitration: In the arbitration process, the arbitrator listens to a typically adversarial presentation of all sides of the case and then renders a decision (usually called an “award”). Arbitration awards may be binding on the parties if they have so agreed in advance. Arbitrations are usually conducted by either a sole arbitrator or a panel of three arbitrators. See Tex. Civ. Prac. & Rem. Code § 154.027 for a definition of arbitration.
Summary Jury Trial: During the summary jury trial, the attorneys present an abbreviated version of their evidence to an advisory jury selected from the regular jury pool. The jury, after deliberation, returns a nonbinding, advisory verdict. The parties and their attorneys then poll and question the jurors. The information gained from this process is to be used as a basis for further settlement negotiations. The summary jury trial is used if the parties believe that a preview of what a jury may do will help them evaluate the case. See Tex. Civ. Prac. & Rem. Code § 154.026 for a definition of a summary jury trial.
Mini-Trial: The mini-trial is an ADR process in which the attorneys and parties meet with a neutral third party and each side presents its best case. Negotiation by the parties, usually without the attorneys present, follows; if this negotiation is unsuccessful, the neutral party provides an advisory opinion about the merits of the case. This opinion is nonbinding unless the parties agree that it is binding and enter into a written settlement agreement. A primary basis for settlement is often the parties’ desire to resolve the dispute without protracted litigation. See Tex. Civ. Prac. & Rem. Code § 154.024 for a definition of a mini-trial.
Moderated Settlement Conference: The moderated settlement conference uses a panel of neutral, experienced attorneys who listen to a presentation of factual and legal arguments by attorneys for each party. The panel then questions the attorneys and the clients, who are present throughout the entire process. After deliberation, the panel renders a confidential advisory evaluation of the strengths and weaknesses of the case and often provides a dollar range or percentage for settlement. The evaluation is not binding on the parties and is used as a basis for further settlement negotiations. See Tex. Civ. Prac. & Rem. Code § 154.025 for a definition of a moderated settlement conference.
All five ADR methods are available for use in all civil cases, including family law cases under the Civil Practice and Remedies Code. However, only mediation and arbitration are mentioned in the Family Code. Accordingly, this manual includes forms only for mediation and arbitration.
Collaborative law is another method of ADR; it is discussed in chapter 15 of this manual.
§ 18.2Notification and Objection
The court may, on its own motion or that of a party, refer a pending dispute for resolution by one of various alternative dispute resolution procedures. The court shall confer with the parties in determining the most appropriate ADR procedure. Tex. Civ. Prac. & Rem. Code § 154.021.
If the court determines that a pending dispute is appropriate for referral, the court shall notify the parties of its determination. Any party may file a written objection to the referral within ten days of receiving the notice. If the court finds that there is a reasonable basis for the objection, the court may not refer the dispute. Tex. Civ. Prac. & Rem. Code § 154.022.
At any time before the final mediation order a party may file a written objection to the referral of a suit to mediation on the basis that family violence has been committed against the objecting party by the other party (in a suit for dissolution of marriage) or by another party against the objecting party or a child who is the subject of the suit (in a suit affecting the parent-child relationship). After an objection is filed, the suit may not be referred to mediation unless, on the request of the other party (dissolution suit) or of a party (suit affecting the parent-child relationship), a hearing is held, and the court finds that a preponderance of the evidence does not support the objection. If the suit is referred to mediation, the court shall order that appropriate measures be taken to ensure the physical and emotional safety of the party who filed the objection. The order shall provide that the parties not be required to have face-to-face contact and that the parties be placed in separate rooms during mediation. Tex. Fam. Code §§ 6.602(d), 153.0071(f). These provisions do not apply to suits filed under Family Code chapter 262. Tex. Fam. Code § 153.0071(f).
§ 18.3Arbitration and Mediation Agreements
Family Code sections 6.601, 6.602, and 153.0071 set out certain procedures concerning alternative dispute resolution that apply to all cases under title 1 and title 5.
Arbitration: On written agreement of the parties, the court may refer a case to arbitration. The agreement must state whether the arbitration is binding or nonbinding. Tex. Fam. Code §§ 6.601(a), 153.0071(a).
If the parties to a suit for dissolution of a marriage agree to binding arbitration, the court shall render an order reflecting the arbitrator’s award. Tex. Fam. Code § 6.601(b); Cayan v. Cayan, 38 S.W.3d 161, 165 (Tex. App.—Houston [14th Dist.] 2000, pet. denied). As in any contractual provision, an agreement to arbitrate can be waived, either expressly or impliedly. In re Marriage of Brown & Chavez, No. 07-13-00025-CV, 2013 WL 6044454, at *3–4 (Tex. App.—Amarillo Nov. 7, 2013, no pet.) (mem. op.). However, unless both parties have waived a contractual arbitration agreement, the trial court must enforce the arbitration agreement. For example, in a divorce involving a business owned by the parties with a company agreement that included buyout provisions and further provided for arbitration in the event of a dispute, it was error for the trial court to deny the husband’s motion to compel arbitration for resolution of the issues pertaining to disposition of the business. In re Marriage of Bowers, 635 S.W.3d 756 (Tex. App.—Amarillo 2021, no pet.).
A party may also waive an arbitration agreement by substantially invoking the judicial process without moving for enforcement of the arbitration agreement. Roman v. Herrera, No. 13-20-00111-CV, 2021 WL 1306407 (Tex. App.—Corpus Christi–Edinburg Apr. 8, 2021, no pet.) (mem. op.); Menger v. Menger, No. 01-19-00921-CV, 2021 WL 2654137, at *4 (Tex. App.—Houston [1st Dist.] June 29, 2021, no pet.) (mem. op.).
If the parties to a suit affecting the parent-child relationship agree to binding arbitration, the court shall render an order reflecting the arbitrator’s award unless the court determines at a nonjury hearing that the agreement is not in the child’s best interest. The burden of proof is on the party seeking to avoid rendition of the order based on the arbitrator’s award. Tex. Fam. Code § 153.0071(b). If the court determines that the arbitrator’s award is not in the child’s best interest, it must vacate the award and refer the matter back to binding arbitration pursuant to the parties’ agreement. Stieren v. Mc-Broom, 103 S.W.3d 602, 605–07 (Tex. App.—San Antonio 2003, pet. denied). By failing to file a motion to vacate the arbitrator’s award and failing to present evidence concerning the child’s best interest before rendition, a party waives the right to a best-interest hearing. In re T.B.H.-H., 188 S.W.3d 312 (Tex. App.—Waco 2006, no pet.). Absent fraud, misconduct, or gross mistake, the express waiver by parties to an arbitration agreement of a right to judicial review is permissible and effective. In re C.A.K., 155 S.W.3d 554, 560 (Tex. App.—San Antonio 2004, pet. denied). Arbitration of a suit affecting the parent-child relationship is governed by both Tex. Fam. Code § 153.0071 and the Texas General Arbitration Act (Tex. Civ. Prac. & Rem. Code ch. 171). When the two statutes conflict, the provisions of the Family Code control. Kilroy v. Kilroy, 137 S.W.3d 780, 786 (Tex. App.—Houston [1st Dist.] 2004, no pet.). However, the court cannot compel arbitration over child-related claims since the court has continuing and exclusive jurisdiction over matters provided for under title 5 of the Texas Family Code. In re Ron, 582 S.W.3d 486 (Tex. App.—Houston [14th Dist.] 2018, orig. proceeding [mand. denied]).
The Texas Arbitration Act does not preclude an agreement for judicial review of an arbitration award for reversible error, and the Federal Arbitration Act does not preempt enforcement of such an agreement. Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84 (Tex. 2011).
The failure to identify an arbitrator, or even specify a method for choosing one, does not render an arbitration agreement unenforceably incomplete. Goetz v. Goetz, 130 S.W.3d 359, 362 (Tex. App.—Houston [14th Dist.] 2004, pet. denied). If an agreement to arbitrate does not specify a method of appointment, or if the agreed method fails or cannot be followed, the court, on application of a party stating the nature of the issues to be arbitrated and the qualifications of the proposed arbitrators, shall appoint one or more qualified arbitrators. Tex. Civ. Prac. & Rem. Code § 171.041(b)(1), (b)(2). If the parties agree to arbitration, there is no necessity to petition the trial court and seek a referral before proceeding directly to arbitration. Kilroy, 137 S.W.3d at 788–89.
If an arbitrator exceeds his authority, the excessive portion of the award should be severed and canceled and the correct portion should be retained. See In re S.M.H., 523 S.W.3d 783 (Tex. App.—Houston [14th Dist.] 2017, no pet.).
However, an arbitrator exceeds his authority only if the arbitration agreement does not give the arbitrator authority to decide the issues adjudicated in the arbitration award. The court will not overturn an arbitrator’s award on grounds that the arbitrator exceeded his authority by misinterpreting the arbitration agreement if the agreement gives the arbitrator authority to decide the issues adjudicated and the arbitrator’s interpretation of the terms of the agreement is plausibly supported by the arbitration agreement. Cahill v. Jones-Cahill, No. 04-20-00008-CV, 2021 WL 111729, at *5–6 (Tex. App.—San Antonio Jan. 13, 2021, no pet.) (mem. op.); see also Kamke v. Kamke, No. 12-20-00186-CV, 2021 WL 5365576, at *3 (Tex. App.—Tyler Nov. 17, 2021, no pet.) (mem. op.) (because partition and exchange agreement authorized arbitrator to interpret agreement, disputes about proper interpretation of certain provisions of agreement that formed bases of claims asserted by wife were within arbitrator’s authority).
Under the Texas Arbitration Act, a trial court shall vacate an award if the rights of a party were prejudiced by the evident partiality of an appointed arbitrator. Tex. Civ. Prac. & Rem. Code § 171.088(a)(2)(A); see, e.g., In re Marriage of Piske, 578 S.W.3d 624 (Tex. App.—Houston [14th Dist.] 2019, no pet. h.). However, a motion to vacate the arbitration award on that basis must be filed before the court approves the arbitration award and not later than the ninetieth day after the date of delivery of a copy of the arbitration award to the movant. Tex. Civ. Prac. & Rem. Code § 171.088(b); Heilmann v. Heilmann, No. 04-18-00849-CV, 2020 WL 6293446 (Tex. App.—San Antonio Oct. 28, 2020, no pet.) (mem. op.).
However, a motion to vacate an arbitration award on the basis that it was obtained by corruption, fraud, or other undue means must be filed not later than the ninetieth day after the date the grounds for the motion to vacate are known or should have been known. Tex. Civ. Prac. & Rem. Code § 171.088(b).
If a party seeks to avoid arbitration and asserts that the contract containing the agreement to arbitrate is not valid or enforceable, the court must try the issue promptly and may order arbitration only if the court determines that the contract is valid and enforceable against the party seeking to avoid arbitration. Even if the contract is found valid and enforceable, the court may stay arbitration or refuse to compel arbitration on any other ground. These provisions do not apply to a court order, a mediated settlement agreement (MSA), a collaborative law settlement agreement, a written settlement agreement reached at an informal settlement conference, an agreed parenting plan, or any other agreement between the parties that is approved by a court. Tex. Fam. Code §§ 6.6015, 153.00715.
Mediation: On written agreement of the parties or on the court’s own motion, the court may refer a case to mediation. Tex. Fam. Code §§ 6.602(a), 153.0071(c). However, a court referral to mediation is not required before an MSA is binding on the parties. Cojocar v. Cojocar, No. 03-14-00422-CV, 2016 WL 3390893, at *3–4 (Tex. App.—Austin June 16, 2016, no pet.) (mem. op.). Likewise, a suit for divorce need not be pending at the time the parties sign an MSA. Highsmith v. Highsmith, 587 S.W.3d 771, 776–77 (Tex. 2019).
An MSA is binding on the parties if the agreement provides, in a prominently displayed statement that is in bold-faced type or in capital letters or underlined, that the agreement is not subject to revocation; if it is signed by each party to the agreement; and if it is signed by the party’s attorney, if any, who is present when the agreement is signed. Tex. Fam. Code §§ 6.602(b), 153.0071(d). Including “subject to the court’s approval” language in an MSA does not make the agreement any less binding if the MSA satisfies all the requirements of the statute. In re C.C.E., 530 S.W.3d 314 (Tex. App.—Houston [14th Dist.] 2017, no pet.).
If an MSA meets these requirements, a party is entitled to judgment on the agreement notwithstanding rule 11 of the Texas Rules of Civil Procedure or another rule of law. Tex. Fam. Code §§ 6.602(c), 153.0071(e). A trial court may not deny a motion to enter judgment on a properly executed MSA solely on the grounds that it is not in a child’s best interests. Stated another way, the trial court is not authorized to conduct a best- interest inquiry. In re Lee, 411 S.W.3d 445 (Tex. 2013) (orig. proceeding).
There are exceptions to these statutes. A court may decline to enter a judgment on an MSA in a suit affecting the parent-child relationship if the court finds that the agreement is not in the child’s best interest and (1) that a party to the agreement was a victim of family violence and that circumstance impaired the party’s ability to make decisions or (2) that the agreement would permit a person who is subject to registration under chapter 62 of the Texas Code of Criminal Procedure, on the basis of an offense committed by the person when the person was seventeen years of age or older, or who otherwise has a history or pattern of past or present physical or sexual abuse directed against any person to reside in the same household as the child or otherwise have unsupervised access to the child. Tex. Fam. Code § 153.0071(e–1). Furthermore, although an MSA may appear on its face to comply with sections 6.602 and 153.007, portions of an MSA that purport to impose obligations on third parties who are not parties to the suit or participants in the mediation are subject to being stricken. See In re A.C.P.C., No. 12-22-00080-CV, 2022 WL 3452267 (Tex. App.—Tyler Aug. 17, 2022, no pet. h.) (mem. op.) (court abused discretion in signing order based on MSA that appointed nonparty healthcare provider as “tiebreaker” as to decisions regarding possession and access of children).
The parties may not agree to set aside a statutorily compliant MSA. In re Minix, 543 S.W.3d 446, 452 (Tex. App.—Houston [14th Dist.] 2018, orig. proceeding [mand. denied]). Note, however, that nothing in section 153.0071 of the Texas Family Code requires the court to render judgment; merely, it provides that the parties are entitled to one. Williams v. Finn, No. 01-17-00476-CV, 2018 WL 5071196, at *4 (Tex. App.—Houston [1st Dist.] Oct. 18, 2018, pet. denied) (mem. op.); see also Jardon v. Pfister, 593 S.W.3d 810, 822 (Tex. App.—El Paso 2019, no pet. h.) (party cannot complain of court’s failure to render judgment on MSA for first time on appeal when party never requested such relief).
See section 18.6 below for a discussion of issues regarding enforcement of MSAs.
Family Code section 153.0071(e) does not apply to suits for termination of the parent-child relationship under chapter 161 of the Code. The court can decline to render judgment on an MSA unless there is a clear and convincing showing that termination is in the child’s best interests. In re Morris, 498 S.W.3d 624, 634 (Tex. App.—Houston [14th Dist.] 2016, orig. proceeding [mand. denied]).
If the MSA does not satisfy Family Code criteria for entry of a judgment and is revoked by a party, it may still be enforceable as a contract. Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995).
Sometimes parties enter into an MSA containing a provision that any dispute regarding, for example, the drafting of the decree will be decided by binding arbitration. In the absence of a defense to the arbitration agreement, the trial court must compel arbitration of claims falling within the scope of the agreement to arbitrate. In re Provine, 312 S.W.3d 824 (Tex. App.—Houston [1st Dist.] 2009, no pet.); see also In re L.T.H., 502 S.W.3d 338, 347 (Tex. App.—Houston [14th Dist.] 2016, no pet.).
Note: Tex. Comm. on Prof’l Ethics, Op. 583 (2008) states, “Under the Texas Disciplinary Rules of Professional Conduct, a lawyer may not agree to serve both as a mediator between parties in a divorce and as a lawyer to prepare the divorce decree and other necessary documents to effect an agreement resulting from the mediation. Because a divorce is a litigation proceeding, a lawyer is not permitted to represent both parties in preparing documents to effect the terms of an agreed divorce.”
The mediator can decide issues regarding the intent of the parties and the mediation documents if the MSA contains a provision that the mediator can decide these issues. In re Marriage of Allen, 343 S.W.3d 513 (Tex. App.—Texarkana 2011, no pet.).
§ 18.4Confidentiality of Communications in ADR Proceedings
In general, any communication relating to the subject matter of the referred dispute made by a participant in the alternative dispute resolution procedure, whether before or after formal judicial proceedings are instituted, is confidential, is not subject to disclosure, and may not be used as evidence against the participant in any judicial or administrative proceeding. Any record made at the ADR procedure is confidential; neither the participants nor the third-party facilitator may be required to testify in any proceedings relating to or arising out of the matter in dispute or be subject to process requiring disclosure of confidential information or data relating to or arising out of the matter in dispute. Tex. Civ. Prac. & Rem. Code § 154.073(a), (b).
Unless expressly authorized by the disclosing party, the third-party facilitator may not disclose to either party information given in confidence by the other and must at all times maintain confidentiality with respect to communications relating to the subject matter of the dispute. All matters, including the conduct and demeanor of the parties and their attorneys during the settlement process, are confidential and may never be disclosed to anyone, including the court, unless the parties agree otherwise. Tex. Civ. Prac. & Rem. Code § 154.053(b), (c).
An oral communication or written material used in or made a part of an ADR procedure is admissible or discoverable if it is admissible or discoverable independent of the procedure. Tex. Civ. Prac. & Rem. Code § 154.073(c).
These provisions for confidentiality apply equally to the work of a parenting coordinator and to the parties and any other person who participates in the parenting coordination. Tex. Fam. Code § 153.0071(g).
Exceptions to Confidentiality: Despite the requirements for confidentiality discussed above, in certain instances applicable law may require disclosure of information revealed in the mediation process. For example, a mediator may be required to disclose child abuse or neglect to the proper authorities. A person having reasonable cause to believe that a child’s physical or mental health or welfare has been adversely affected by abuse or neglect by any person shall immediately make a report. Tex. Fam. Code § 261.101(a). Professionals are subject to more specific requirements for reporting child abuse or neglect. See Tex. Fam. Code § 261.101(b). Reporting may also be required regarding an adult who was a victim of abuse or neglect as a child. See Tex. Fam. Code § 261.101(b–1). The requirement to report child abuse or neglect applies without exception to an individual, including an attorney, whose personal communications may otherwise be privileged. Tex. Fam. Code § 261.101(c). Knowing failure to make a report as required by section 261.101(a) or (b) constitutes a class A misdemeanor or state jail felony. Tex. Fam. Code § 261.109. The confidentiality provisions for parenting coordination do not affect a person’s duty to report abuse or neglect under Code section 261.101. Tex. Fam. Code § 153.0071(g).
Disclosure of mediation communications was permitted when one of the parties alleged that a new and independent tort arose during the course of a mediation, and the tort encompassed a duty to disclose (fiduciary relationship). Avary v. Bank of America, N.A., 72 S.W.3d 779, 800 (Tex. App.—Dallas 2002, pet. denied). A party may bring suit for fraudulent inducement to enter into a mediated settlement agreement, but section 154.073 of the Civil Practice and Remedies Code prohibits the use of any statements made during the mediation. Vick v. Waits, No. 05-00-01122-CV, 2002 WL 1163842 (Tex. App.—Dallas June 4, 2002, pet. denied) (not designated for publication). Whether a party attended a mediation and whether he had the mediator’s permission to leave do not concern the subject matter of the underlying suit, and the conduct is not confidential. In re Daley, 29 S.W.3d 915 (Tex. App.—Beaumont 2000, orig. proceeding). A party can waive mediation confidentiality under sections 154.053 and 154.073 of the Civil Practice and Remedies Code through offensive use of the statutory confidentiality provisions. See Alford v. Bryant, 137 S.W.3d 916 (Tex. App.—Dallas 2004, pet. denied), in which a client sued her lawyer for malpractice committed during mediation. The lawyer sought to depose the mediator; the client objected, citing sections 154.053 and 154.073. The court held that the client had waived the protection of the two statutes when she brought suit.
The confidentiality provisions of section 154.073 of the Civil Practice and Remedies Code do not affect the duty to report abuse or neglect under subchapter B of Family Code chapter 261 or abuse, exploitation, or neglect under subchapter C of Human Resources Code chapter 48. See Tex. Civ. Prac. & Rem. Code § 154.073(f). Each participant, including the impartial third party, to an ADR procedure is subject to the requirements of subchapter B of Family Code chapter 261 and to subchapter C of Human Resources Code chapter 48. Tex. Civ. Prac. & Rem. Code § 154.053(d).
COMMENT: If confidential information is disclosed during a mediation that is required to be reported, the mediator should advise the parties that disclosure is required and will be made.
Disclosures regarding the valuation, characterization, or existence of assets made during the mediation process remain confidential and cannot be used to set aside the MSA. See Triesch v. Triesch, No. 03-15-00102-CV, 2016 WL 1039035, at *6 (Tex. App.—Austin Mar. 8, 2016, no pet.) (mem. op.).
COMMENT: Because a disclosure regarding the value, character, or existence of an asset made during mediation remains confidential, it is good practice to place those disclosures in the actual MSA.
§ 18.5Selection and Qualifications of Impartial Third Party
When a dispute is referred, the court may appoint one or more properly qualified impartial third parties to facilitate the procedure. Tex. Civ. Prac. & Rem. Code § 154.051. To be qualified for appointment as an impartial third party, a person must have completed at least forty hours of prescribed training in dispute resolution techniques. Appointment to a parent-child case requires the basic forty hours of training plus an additional twenty-four hours of training in family dynamics, child development, and family law, including a minimum of four hours of family violence dynamics training developed in consultation with a statewide family violence advocacy organization. The court may appoint a person who does not have the prescribed training if the appointment is based on legal or other professional training or experience in particular dispute resolution processes. Tex. Civ. Prac. & Rem. Code § 154.052. An amicus attorney is not a neutral person and cannot act as a mediator. In re E.B., No. 12-17-00214-CV, 2017 WL 4675109, at *4 (Tex. App.—Tyler Oct. 18, 2017, orig. proceeding [mand. denied]) (mem. op.).
The court may set a reasonable fee for the services of an impartial third party. Unless the parties agree to a method of payment, the court shall tax the fee as other costs of suit. Tex. Civ. Prac. & Rem. Code § 154.054.
§ 18.6Enforcement of Mediated Settlement Agreement
A final judgment founded on a settlement agreement must be in strict compliance with the agreement. In re Marriage of Ames, 860 S.W.2d 590, 593 (Tex. App.—Amarillo 1993, no writ); see also Maraio-Wilhoit v. Wilhoit, No. 11-18-00312-CV, 2021 WL 389243, at *4–5 (Tex. App.—Eastland Feb. 4, 2021, no pet.) (mem. op.) (court erred in awarding attorney’s fees where MSA provided that each party would pay his or her own).
Because a mediated settlement agreement (MSA) is a contract, courts look to general contract-interpretation principles to determine its meaning. Loya v. Loya, 526 S.W.3d 448, 451 (Tex. 2017). Specifically, courts give terms their plain, ordinary, and generally accepted meanings unless the instrument shows that the parties used them in a technical or different sense. Heritage Resources, Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex. 1996). In Loya, the MSA stated that “[a]ll future income of a party and/or from any property herein awarded to a party is partitioned to the person to whom the property is awarded.” The wife contended that part of a $4.5 million bonus the husband received nine months after the MSA was signed was undivided community property. The supreme court held that the character of the funds was not relevant, since it was undisputed that the bonus was paid after the MSA was signed; it therefore belonged to the husband. The plain wording of the MSA trumped all other arguments. Loya, 526 S.W.3d at 452.
Additionally, under the rules of contract interpretation, the trial court is required to construe an MSA so that no provisions of the MSA will be rendered meaningless. In In re D.N.P., the parties’ MSA provided that the father would pay additional child support equal to 25 percent of his net annual bonus. The terms of the MSA were incorporated in the divorce decree. Years later, when the mother filed a suit for enforcement, the father claimed that he never received a “bonus,” but he had received a distribution from his employer’s profit-sharing plan each year, including the years prior to the parties’ execution of the MSA. The trial court’s interpretation of the term “bonus” to include the father’s annual distribution from his employer’s profit-sharing plan was not error, because a contrary interpretation would have rendered that provision of the MSA meaningless. In re D.N.P., No. 05-19-01083-CV, 2021 WL 790896 (Tex. App.—Dallas Mar. 2, 2021, no pet.) (mem. op.).
If the trial court finds that an MSA has been procured by fraud, the proper remedy is to set aside the MSA and proceed as though there were no MSA. In Penafiel, after finding that the MSA had been procured by fraudulent inducement, the trial court committed error by enforcing the MSA and also awarding the wife a monetary judgment for the value that she would have received from a just and right division of the community estate, resulting in a double recovery. In re Marriage of Penafiel, 633 S.W.3d 36, 50 (Tex. App.—Houston [14th Dist.] 2021, pet. denied). But see In re Marriage of Moncur, 640 S.W.3d 309, 319–20 (Tex. App.—Houston [14th Dist.] 2022, no pet.) (although husband conceded that he had not disclosed all financial accounts in discovery prior to mediation, both parties testified that wife had received other disclosures prior to any divorce proceedings and in the course of a Dubai divorce proceeding; therefore, wife could not show that husband created a false impression that husband had produced all accounts, and the trial court did not err in declining to set aside MSA).
The court may not provide terms, provisions, or essential details not previously agreed to by the parties. Matthews v. Looney, 123 S.W.2d 871, 872 (Tex. 1939); see also Maraio-Wilhoit, 2021 WL 389243, at *4. However, terms necessary to effectuate and implement the parties’ agreement do not affect the agreed substantive division of property and may be left to future articulation between the parties or to future consideration by the trial court. Haynes v. Haynes, 180 S.W.3d 927, 930 (Tex. App.—Dallas 2006, no pet.); McLendon v. McLendon, 847 S.W.2d 601, 606 (Tex. App.—Dallas 1992, writ denied); see also In re Lee, 411 S.W.3d 445, 458 n.17 (Tex. 2013) (to extent there is no dispute about parties’ intent, trial court has discretion to provide clarification of any other provision of settlement agreement).
COMMENT: The foregoing doctrine has not yet been applied to agreements in suits affecting the parent-child relationship.
If an agreed divorce decree does not comply with the terms of the MSA, the court may reform the divorce decree to comply with the MSA while the court retains plenary power. Upton v. Upton, No. 11-19-00025-CV, 2021 WL 219662, at *3 (Tex. App.—Eastland Jan. 22, 2021, no pet.) (mem. op.). In Upton, the court also found that the merger clause contained in the agreed divorce decree did not preclude the trial court from reforming the divorce decree to comply with the MSA because the trial court was without authority to enter a divorce decree that contained a property division that conflicted with the terms of the MSA. Upton, 2021 WL 219662, at *3. However, if the parties sign a final decree of divorce that states that they are signing in approval and consent as to both form and substance and the decree is signed by the court, the final decree constitutes a valid consent judgment, and each party has waived any claim that the decree does not comply with the terms of the MSA or that the MSA does not satisfy the statutory requirements of an MSA. In re Marriage of Campero, No. 13-20-00415-CV, 2022 WL 869807, at *6 (Tex. App.—Corpus Christi–Edinburg Mar. 24, 2022, no pet.) (mem. op.); see also Guidry v. Guidry, No. 04-20-00311-CV, 2022 WL 2821086 (Tex. App.—San Antonio July 20, 2022, pet. filed) (mem. op.).
Even if an error exists in a mediated settlement agreement, a clarification order is not appropriate if the change would be substantive rather than clerical. See Weido v. Weido, No. 01-15-00755-CV, 2016 WL 1355764, at *4 (Tex. App.—Houston [1st Dist.] Apr. 5, 2016, no pet.) (mem. op.).
Ambiguity in an MSA is not cause to set aside the agreement. See Milner v. Milner, 361 S.W.3d 615, 623 (Tex. 2011); In re Lauriette, No. 05-15-00518, 2015 WL 4967233, at *3–4 (Tex. App.—Dallas Aug. 20, 2015, orig. proceeding [mand. denied]) (mem. op.). If the trial court finds that the MSA contains a latent ambiguity, the trial court may consider parol evidence to resolve the ambiguity. In re Marriage of Jobe, No. 12-20-00105-CV, 2021 WL 4616387, at *3–4 (Tex. App.—Tyler Oct. 6, 2021, no pet.) (mem. op.). In Jobe, the parties entered into an MSA that provided that each party would pay their own attorney’s fees. However, the MSA did not resolve all of the issues in the case, and the parties proceeded to trial on the unresolved issues. At final trial, the court awarded the wife attorney’s fees incurred since the date of the execution of the MSA. The court of appeals held that, because the MSA did not resolve all the issues and the attorney’s fees language in the MSA was broad and ambiguous, the trial court could have reasonably found that recovery of attorney’s fees related to issues not resolved by the MSA was not governed by the MSA. If the MSA is clear and unambiguous, the court may not rewrite or add to that agreement. Jonjak v. Griffith, No. 03-18-00118-CV, 2019 WL 1576157 (Tex. App.—Austin Apr. 12, 2019, no pet.) (mem. op.); see also Payne v. Payne, No. 06-20-00051-CV, 2021 WL 1216885, at *5–6 (Tex. App.—Texarkana Apr. 1, 2021, no pet.) (mem. op.) (mutual release in MSA was clear and unambiguous, precluding husband’s subsequent suit involving tort claims against wife based on incident that occurred before execution of MSA).
A motion for new trial filed after entry of an agreed divorce decree based on an MSA must be supported by the introduction of evidence. In re Willeford, No. 04-20-00495-CV, 2021 WL 356242 (Tex. App.—San Antonio Feb. 3, 2021, orig. proceeding) (mem. op.).
If the MSA provides that the parties are to return to the mediator for arbitration of a dispute regarding drafting, interpretation, or intent, only the mediator, not the trial court or the court of appeals, has the authority to resolve the fact dispute. See Milner, 361 S.W.3d at 622 (divorce); see also In re L.T.H., 502 S.W.3d 338, 347 (Tex. App.—Houston [14th Dist.] 2016, no pet.) (suit affecting parent-child relationship).
One party cannot unilaterally repudiate the agreement. In re Marriage of Banks, 887 S.W.2d 160, 163 (Tex. App.—Texarkana 1994, no writ).
A party who has filed an answer and general denial is entitled to forty-five days’ notice of a hearing on the other party’s motion to enter a divorce decree based on an MSA. Such a hearing to prove up an MSA is still considered a final hearing. M.B. v. R.B., No. 02-19-00342-CV, 2021 WL 2252792 (Tex. App.—Fort Worth June 3, 2021, no pet.) (mem. op.).
Where an MSA provides that each party will pay his own attorney’s fees and a party files a postjudgment suit seeking to enforce or set aside the MSA, the other party is not precluded from seeking a judgment for attorney’s fees in the subsequent enforcement suit. Nabers v. Nabers, No. 14-18-00968-CV, 2020 WL 830025, at *4 (Tex. App.—Houston [14th Dist.] Feb. 20, 2020, no pet.) (mem. op.).
If a mediated settlement agreement contains a provision that is impossible to perform, unless there is a contingency provision, the agreement will be unenforceable. The agreement in a 2016 case contained a provision requiring that certain real property would be refinanced so that the community interest of a spouse would be bought out. The agreement unambiguously provided that the inability to refinance would render the agreement of “no further force and effect.” The court was without authority to partially enforce or modify the agreement. Vasquez v. Vasquez, No. 13-15-00306-CV, 2016 WL 6804462 (Tex. App.—Corpus Christi–Edinburg 2016, no pet.) (mem. op.).
The Supreme Court of Texas has held that a series of letters constituted an agreement under rule 11 of the Texas Rules of Civil Procedure. Although a rule 11 agreement must be filed, there is no requirement about when the filing must take place. After proper notice and hearing, the court can enforce an order complying with rule 11 even though one side no longer consents to the settlement. Padilla v. LaFrance, 907 S.W.2d 454, 461 (Tex. 1995). On the other hand, in a suit affecting the parent-child relationship, the court is not obligated to render a final order on the basis of a rule 11 agreement if the court finds that the terms of the agreement are not in the best interest of the child. Tid-well v. Tidwell, No. 08-17-00120-CV, 2019 WL 4743685, at *3 (Tex. App.—El Paso Sept. 30, 2019, no pet.) (mem. op.).
The foregoing cases, however, must be read in conjunction with sections 6.602 and 153.0071 of the Family Code, which are discussed in section 18.3 above. An MSA that meets the statutory requirements of section 6.602(b) or section 153.0071(d) is binding on the parties, and a party is entitled to judgment on the agreement notwithstanding rule 11 of the Texas Rules of Civil Procedure or another rule of law unless, in a title 5 case, the court makes certain findings. Tex. Fam. Code §§ 6.602(c), 153.0071(e), (e–1). If the statutory requirements of section 6.602 of the Family Code are met, an agreement is binding and can be enforced even in the absence of a judgment incorporating it. Spiegel v. KLRU Endowment Fund, 228 S.W.3d 237, 242 (Tex. App.—Austin 2007, pet. denied) (wife died after MSA but before entry of decree). An MSA can be set aside only if the opposing party establishes that the agreement was illegal or was procured by fraud, duress, coercion, or other dishonest means. Spiegel, 228 S.W.3d at 242; see also Mueller v. Mueller, No. 01-11-00247-CV, 2012 WL 682285, at *3 (Tex. App.—Houston [1st Dist.] Mar. 1, 2012, pet. denied) (mem. op.). When the Texas legislature enacted section 6.602 of the Family Code, it deliberately created a procedural shortcut for enforcement of MSAs in divorce cases. Cayan v. Cayan, 38 S.W.3d 161, 166 (Tex. App.—Houston [14th Dist.] 2000, pet. denied). An agreement in which the stipulation of irrevocability did not meet the specific formal requirements of section 153.0071(d) could be revoked before the rendition of judgment. Spinks v. Spinks, 939 S.W.2d 229, 230 (Tex. App.—Houston [1st Dist.] 1997, no writ) (stipulation of irrevocability contained in separate paragraph but not underlined).
Not all MSAs can be enforced even though they comply with sections 6.602 or 153.0071 of the Family Code. A court cannot enforce a section 153.0071 agreement if it contains an illegal provision. See In re Kasschau, 11 S.W.3d 305, 311–13 (Tex. App.—Houston [14th Dist.] 1999, orig. proceeding). If the parties to an MSA have represented to one another that they have disclosed the marital property known to them, there is a duty to disclose all information about substantial assets. Without a full disclosure, the agreement will not be enforced. Boyd v. Boyd, 67 S.W.3d 398, 404 (Tex. App.—Fort Worth 2002, no pet.). When one voluntarily discloses information, there is a duty to disclose the whole truth rather than make a partial disclosure that conveys a false impression. World Help v. Leisure Lifestyles, Inc., 977 S.W.2d 662, 670 (Tex. App.—Fort Worth 1998, pet. denied). The Boyd court held that construing section 6.602 of the Texas Family Code “to mean that a settlement agreement that complies with section 6.602(b) must be enforced no matter what the circumstances could require enforcement of an agreement that was illegal or that was procured by fraud, duress, coercion or other dishonest means. We do not believe that the legislature intended such an absurd result in enacting section 6.602.” See Boyd, 67 S.W.3d at 403; see also Cantillo v. Cantillo, 627 S.W.3d 367 (Tex. App.—El Paso 2021, no pet.) (party who moves trial court to set aside MSA on basis that other party committed fraud by nondisclosure must show that other party had legal duty to make such disclosure and failed to do so).
However, a trial court may not set aside an MSA on the basis of “newly discovered evidence” or “in the interest of justice and fairness” unless the trial court finds that the MSA does not meet the statutory requirements of an MSA or that the MSA was procured by fraud, duress, coercion, or other dishonest means. In re Bouajram, No. 02-21-00072-CV, 2021 WL 3673856, at *3–4 (Tex. App.—Fort Worth Aug. 17, 2021, orig. proceeding) (mem. op.). A party seeking to set aside an otherwise binding MSA on the grounds of duress must present evidence that the duress claim is based on the unlawful conduct or the threat of unlawful conduct by a party to the suit. Emami v. Emami, No. 02-21-00319-CV, 2022 WL 3273603, at *6–7 (Tex. App.—Fort Worth Aug. 11, 2022, no pet. h.) (mem. op.) (concluding there was no duress where lawyer and mediator allegedly pressured party to sign MSA).
In re Calderon, 96 S.W.3d 711 (Tex. App.—Tyler 2003, orig. proceeding [mand. denied]), involved a situation in which an MSA contained a provision requiring that venue remain in Smith County for three years from the date of the entry of the order. The court held that the provisions of an MSA that restricts the right to mandatory transfer in the event of a future controversy could not be enforced. In re Calderon, 96 S.W.3d at 718–19. See also In re Lovell-Osburn, 448 S.W.3d 616, 621 (Tex. App.—Houston [14th Dist.] 2014, orig. proceeding). The trial court has the authority not to enforce an MSA that is illegal or violates public policy. See Garcia-Udall v. Udall, 141 S.W.3d 323 (Tex. App.—Dallas 2004, no pet.). However, provisions of an MSA that are void as against public policy may be severed and do not render the entire MSA void as long as those provisions do not constitute the central and essential purpose of the MSA. In re M.E.H., 631 S.W.3d 244, 254 (Tex. App.—Houston [14th Dist.] 2020, no pet.). Moreover, in a parent-child relationship suit, the trial court may decline to enter a judgment on an MSA if it finds that the agreement is not in the child’s best interest and (1) that a party to the agreement was a victim of family violence and that circumstance impaired the party’s ability to make decisions or (2) that the agreement would permit a person who is subject to registration under chapter 62 of the Texas Code of Criminal Procedure, on the basis of an offense committed by the person when the person was seventeen years of age or older, or who otherwise has a history or pattern of past or present physical or sexual abuse directed against any person to reside in the same household as the child or otherwise have unsupervised access to the child. Tex. Fam. Code § 153.0071(e–1). See In re C.N.H., No. 04-119-00417-CV, 2020 WL 557541, at *3 (Tex. App.—San Antonio Feb. 5, 2020, no pet.) (mem. op.) (when declining to enter judgment on MSA, trial court’s failure to make required statutory findings is error).
COMMENT: Sanctions may be imposed on a party who repudiates an MSA without grounds or justification. See Hall v. Hall, No. 12-03-00417-CV, 2005 WL 1000619 (Tex. App.—Tyler Apr. 29, 2005, no pet.) (mem. op.). In Clements v. Clements, the court of appeals upheld the trial court, which awarded attorney’s fees as sanctions against a party for delaying the signing of a decree even though the MSA provided that each party pay his or her attorney’s fees. The court distinguished the provision regarding attorney’s fees in the property division and the later effort to frustrate the signing of the decree. Clements v. Clements, No. 13-13-00560-CV, 2015 WL 3523028 (Tex. App.—Corpus Christi–Edinburg June 4, 2015, no pet.) (mem. op.).
The enforcement of an otherwise irrevocable MSA may be defeated by quasi-estoppel. In Brooks v. Brooks, 257 S.W.3d 418 (Tex. App.—Fort Worth 2008, pet. denied), the divorcing parties entered into an MSA in accordance with section 6.602 of the Texas Family Code. The MSA was filed with the court. Later the parties agreed to remediate the issues and to proceed to trial if the second mediation failed. The second mediation did, indeed, fail. At trial, no mention was made of the original MSA by either party, and both parties submitted to the trial court proposed property divisions that differed from that of the MSA. The court divided the property but did not follow the original MSA. The husband filed a motion for new trial, insisting that the trial court should have divided the community estate according to the provisions of the original MSA because it was irrevocable under section 6.602 of the Family Code. The court of appeals upheld the trial court, holding that the doctrine of quasi-estoppel can be invoked to preclude “a party from asserting, to another’s disadvantage, a right inconsistent with a position previously taken.” Brooks, 257 S.W.3d at 423. Compare Brooks with In re Minix, 543 S.W.3d 446, 452 (Tex. App.—Houston [14th Dist.] 2018, orig. proceeding [mand. denied]) (parties may not agree to set aside statutorily compliant MSA).
§ 18.7Court Appointment of Mediator
Certain rules concerning the appointment of mediators apply to courts in counties with a population of 25,000 or more. See Tex. Gov’t Code § 37.001.
The court must establish and maintain a list of all persons who are registered with the court to serve as a mediator. Multiple lists categorized by the type of case and the person’s qualifications are permitted. Tex. Gov’t Code § 37.003(a), (b).
In each case in which the appointment of a mediator is necessary because the parties are unable to agree on a mediator, the court must use a rotation system and appoint the person whose name appears first on the list. Tex. Gov’t Code § 37.004(b). A person on the list whose name does not appear first, or a person who meets the requirements to serve but is not on the list, may be appointed on a finding of good cause if the person’s appointment is required on a complex matter because he has relevant specialized education, training, certification, skill, language proficiency, or knowledge of the subject matter of the case; has relevant prior involvement with the parties or the case; or is in a relevant geographic location. Tex. Gov’t Code § 37.004(d). If an initial declaration of a state of disaster for the area is made within thirty days before the appointment, the court may appoint a person on the list whose name does not appear first or a person who meets requirements to serve but is not on the list. Tex. Gov’t Code § 37.004(d–1), (g). A person who is not appointed in the order in which his name appears on the applicable list stays next in line, and a person who has been appointed goes to the end of the list. Tex. Gov’t Code § 37.004(e), (f).
These provisions do not apply to a mediation conducted by an alternative dispute resolution system established under Civil Practice and Remedies Code chapter 152 or to a mediator appointed under a domestic relations office established under Family Code chapter 203, providing services without expecting or receiving compensation, or providing services as a volunteer of a nonprofit organization that provides pro bono legal services to the indigent. Tex. Gov’t Code § 37.002.
The lists must be posted annually at the courthouse and on the court’s website. Tex. Gov’t Code § 37.005.
[Sections 18.8 through 18.10 are reserved for expansion.]
§ 18.11Informal Settlement Conference
The parties to a suit for divorce, for annulment, or to declare a marriage void may agree to one or more informal settlement conferences. They may agree that the conferences may be conducted without or without the presence of their attorneys, if any. Tex. Fam. Code § 6.604(a).
§ 18.12Informal Settlement Agreement
A written settlement agreement reached at an informal settlement conference is binding on the parties if the agreement provides, in a prominently displayed statement that is in bold-faced type, in capital letters, or underlined, that the agreement is not subject to revocation; if it is signed by each party to the agreement; and if it is signed by the party’s attorney, if any, who is present when the agreement is signed. Tex. Fam. Code § 6.604(b).
If a written settlement agreement meets these requirements, a party is entitled to judgment on the agreement notwithstanding rule 11 of the Texas Rules of Civil Procedure or another rule of law. Tex. Fam. Code § 6.604(c).
If the court finds that the terms of the agreement are just and right, those terms are binding on the court. If the court approves the agreement, the court may set the agreement forth in full in the final decree or incorporate it by reference. When a trial court renders judgment and signs a decree based on the terms of a written informal settlement agreement and does not issue any findings of fact or conclusions of law, it is implied that the trial court found that the agreement was just and right, which satisfies the statute. Comerio v. Comerio, No. 04-13-00493-CV, 2014 WL 2547607, at *2 (Tex. App.—San Antonio June 4, 2014, no pet.) (mem. op.). If the court finds that the terms of the agreement are not just and right, the court may request the parties to submit a revised agreement or set the case for a contested hearing. Tex. Fam. Code § 6.604(d), (e).
If an informal settlement agreement or a rule 11 agreement does not meet the requirements of Family Code section 6.604(c), either party may revoke consent to the agreement at any time before the court renders judgment. See Cooper v. Cooper, No. 05-20-00507-CV, 2021 WL 1747856 (Tex. App.—Dallas May 4, 2021, no pet.) (mem. op.); In re Z.U.L., No. 06-20-00079-CV, 2021 WL 96864 (Tex. App.—Texarkana Jan. 12, 2021, no pet.) (mem. op.).
§ 18.13Not for Suits Affecting Parent-Child Relationship
No provision analogous to section 6.604 of the Family Code, discussed above, has been enacted to apply to proceedings under title 5 of the Code. However, when parties enter written agreements in a SAPCR pursuant to rule 11 and a court renders judgment on that agreement, the judgment must comply with the terms of the agreement. In re L.J.K., No. 04-20-00596-CV, 2022 WL 3907188 (Tex. App.—San Antonio Aug. 31, 2022, no pet. h.) (mem. op.).