Boyd v. Boyd, 2-00-218-CV.

• Citation: 67 S.W.3d 398
• Decision Date: 03 January 2002
• Docket Number: No. 2-00-218-CV.,2-00-218-CV.
• Parties: Randall Cary BOYD, Appellant, v. Ginger BOYD, Appellee.
• Court: Court of Appeals of Texas

67 S.W.3d 398

Randall Cary BOYD, Appellant, v. Ginger BOYD, Appellee.

No. 2-00-218-CV.

Court of Appeals of Texas, Fort Worth.

January 3, 2002.

Richard R. Orsinger, San Antonio, Gary L. Nickelson, Fort Worth, for Appellant.

Paddock & Associates, Michael B. Paddock, Fort Worth, Frank J. Douthitt, Henrietta, Baker Botts LLP and Amy Douthitt Maddux, Houston, for Appellees.

Panel B: LIVINGSTON, DAUPHINOT, and WALKER, JJ.

OPINION

TERRIE LIVINGSTON, Justice.

I. Introduction

In this marital property case, we must decide whether a mediated settlement agreement that complies with section 6.602(b) of the Texas Family Code is enforceable if one party to the agreement intentionally failed to disclose to the other party the existence of significant marital property. We must also decide whether the trial court abused its discretion in making the property division in the parties' divorce decree, particularly with regard to deferred compensation benefits and stock options. Because we hold that the mediated settlement agreement is not enforceable under the circumstances of this case and that the trial court did not abuse its discretion in making the property division, we affirm the trial court's judgment.

II. Background Facts and Procedural History

Randall Boyd and Ginger M. Boyd were married in 1981. They had one child, a daughter named Ashley. They separated in February 1996, and Ginger filed for divorce that same month. Randall was awarded temporary custody of Ashley, and the parties entered into a mediated settlement agreement (MSA) in May 1997. In August 1997, Ginger rejected the MSA, contending it was void or voidable because Randall had not made a fair and reasonable disclosure of the parties' marital property and financial obligations, even though he had intentionally misrepresented that he had.

Ginger also hired an attorney, Brian Webb, to represent Ashley's interests. On August 20, 1997, Webb filed a petition in intervention on Ashley's behalf. Webb contended that the M.S.A. was void because it designated the parties as joint managing conservators, but did not designate either party as the primary parent or designate a county of residence as required by the family code. Randall objected to Webb's representation of Ashley, but the trial court held that either or both parents could hire counsel to represent Ashley because the temporary orders authorized both parents to represent her in legal actions.

Randall moved to enforce the M.S.A. based on sections 6.602 and 153.0071 of the family code. The trial court held a hearing on Randall's motion in September 1998. In April 1999, the trial court entered an order denying the motion. The court concluded that the M.S.A. was unenforceable and had to be set aside so the court could make a fair and just division of the marital property and enter enforceable orders for the protection and best interest of Ashley. The court found that the M.S.A. did not include substantial community assets, including bonus money earned and not disclosed by Randall, and did not properly address visitation and access to Ashley.

Thereafter, the case proceeded to trial in October 1999. Before the property issues were tried, the parties reached an agreement on the issues relating to Ashley. After a trial on the property issues, the trial court signed a divorce decree. The decree states that Randall and Ginger "are divorced as of December 13, 1999." The decree incorporates the parties' settlement provisions regarding Ashley and divides the marital estate. This appeal followed.

In fourteen issues on appeal, Randall complains that the trial court erred in ruling that the M.S.A. was unenforceable and abused its discretion in making the property division in the divorce decree.

III. Mediated Settlement Agreement

A. Statutory Construction of Section 6.602(c)

Texas has a public policy of encouraging the peaceful resolution of disputes, particularly those involving the parent-child relationship, and the early settlement of pending litigation through voluntary settlement procedures. Tex. Civ. Prac. & Rem.Code Ann. § 154.002 (Vernon 1997). Trial and appellate courts are charged with the responsibility of carrying out this public policy. Id. § 152.003 (Vernon Supp.2002); Adams v. Petrade Int'l, Inc., 754 S.W.2d 696, 715 (Tex.App.-Houston [1st Dist.] 1988, writ denied) (op. on reh'g). The Texas Family Code also furthers this policy by providing that a mediated settlement agreement is binding on the parties if the agreement:

(1) provides, in a prominently displayed statement that is in boldfaced type or capital letters or underlined, that the agreement is not subject to revocation;

(2) is signed by each party to the agreement; and

(3) is signed by the party's attorney, if any, who is present at the time the agreement is signed.

Tex. Fam.Code Ann. §§ 6.602(b), 153.0071(d) (Vernon Supp.2002). Mediated settlement agreements are binding in suits affecting the parent-child relationship, as well as suits involving only marital property. Tex. Fam.Code Ann. §§ 6.602(b)-(c), 153 .0071(d)-(e); Spinks v. Spinks, 939 S.W.2d 229, 230 (Tex.App.-Houston [1st Dist.] 1997, no writ). Because we are not required to construe section 153.0071 to dispose of this appeal, we limit our discussion to section 6.602. However, we note that the wording of sections 6.602(b)-(c) and 153.0071(d)-(e) is identical. Tex. Fam.Code Ann. §§ 6.602(b)-(c), 153.0071(d)-(e).

Ordinarily, settlement agreements arising from mediation are not binding where one party withdraws consent to the agreement, unless the other party successfully sues to enforce the settlement agreement as a contract that complies with rule 11 of the Texas Rules of Civil Procedure. See Tex. Civ. Prac. & Rem.Code Ann. § 154.071(a) (Vernon 1997) (providing that settlement agreements arising from mediation are enforceable in the same manner as any other written contract); Padilla v. LaFrance, 907 S.W.2d 454, 461-62 (Tex.1995) (holding that, once consent to settlement agreement is withdrawn, agreement can only be enforced as a binding contract that complies with rule 11, as established by proper pleading and proof); Alcantar v. Okl. Nat'l Bank, 47 S.W.3d 815, 819 (Tex.App.-Fort Worth 2001, no pet.) (same).

Unilateral withdrawal of consent does not, however, negate the enforceability of a mediated settlement agreement in a divorce proceeding, and a separate suit for enforcement of a contract is not necessary. Alvarez v. Reiser, 958 S.W.2d 232, 234 (Tex.App.-Eastland 1997, writ denied). Rather, section 6.602 creates a procedural short cut for the enforcement of mediated settlement agreements in divorce cases. Cayan v. Cayan, 38 S.W.3d 161, 166 (Tex.App.-Houston [14th Dist.] 2000, pet. denied). Thus, a mediated settlement agreement that meets the requirements of section 6.602(b) is binding, and a party is entitled to judgment on the agreement notwithstanding rule 11 or another rule of law. Tex. Fam.Code Ann. § 6.602(c); see also id. § 153.0071(e); Alvarez, 958 S.W.2d at 234.

In his first issue, Randall contends that the "notwithstanding rule 11 or another rule of law" language in the statute means that a mediated settlement agreement that complies with section 6.602(b) is not subject to [trial court] review and that a trial court's failure to enforce the agreement is reversible error. We decline to construe section 6.602(c) in such a restrictive manner.

In construing a statute, our objective is to determine and give effect to the legislature's intent. Nat'l Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527 (Tex.2000). When terms are not defined in a statute, we apply their ordinary meaning. Tex. Gov't Code Ann. §§ 311.011, 312.002(a) (Vernon 1998); Nat'l Liab. & Fire Ins. Co., 15 S.W.3d at 527. We also presume that the legislature intended a just and reasonable result in enacting a statute. Tex. Gov't Code Ann. § 311.021(3). A court will not construe a statute in a manner that will lead to a foolish or absurd result when another alternative is available. Del Indus., Inc. v. Tex. Workers' Comp. Ins. Fund, 973 S.W.2d 743, 747-48 (Tex.App.-Austin 1998), aff'd, 35 S.W.3d 591 (Tex.2000).

Construing the phrase "notwithstanding rule 11 or another rule of law" to mean that a mediated 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. Rather, we construe this phrase to mean that the requirements of rule 11 and the common law that ordinarily apply to the enforcement of settlement agreements do not apply to mediated settlement agreements in divorce proceedings, if the agreements meet the three requirements listed in section 6.602(b). See Cayan, 38 S.W.3d at 166 (stating that section 6.602 was enacted to create a procedural short cut for the enforcement of mediated settlement agreements in divorce cases).

We hold that the phrase "notwithstanding rule 11 or another rule of law" does not require a trial court to enforce a mediated settlement agreement simply because it complies with section 6.602(b), irrespective of what the agreement provides for or how it was procured. See In re Kasschau, 11 S.W.3d 305, 311 (Tex.App.-Houston [14th Dist.] 1999, orig. proceeding) (op. on reh'g) (holding that trial court did not err by refusing to enforce mediated settlement agreement that contained an illegal provision); see also Cayan, 38 S.W.3d at 166 n. 8. We overrule the portion of Randall's point first in which he contends that a mediated settlement agreement that complies with section 6.602(b) is not subject to review.

B. Enforceability of the MSA

In this case, Ginger contended that the M.S.A. was void or voidable because Randall committed fraud when he did not make a fair and reasonable disclosure of all of...