Sudan v. Sudan

• Decision Date: 17 June 2004
• Docket Number: No. 14-01-00854-CV.,14-01-00854-CV.
• Parties: Margaret Dye SUDAN, now known as Maggie Mackenzie, Appellant v. Philip P. SUDAN, Jr., Appellee.
• Court: Texas Court of Appeals

145 S.W.3d 280

Margaret Dye SUDAN, now known as Maggie Mackenzie, Appellant v. Philip P. SUDAN, Jr., Appellee.

No. 14-01-00854-CV.

Court of Appeals of Texas, Houston (14th Dist.).

June 17, 2004.

Rehearing Overruled September 30, 2004.

Appeal from the 309th District Court, Harris County, Eva Martinez-Guzman, J Katherine J. Walters, Austin, Ellen Elkins Grimes, Houston, for appellant.

J.D. Bucky Allshouse, Mark S. Hellinger, Houston, for appellee.

Panel consists of Justices HUDSON, EDELMAN, and SEYMORE.

OPINION ON THIRD MOTION FOR REHEARING

RICHARD H. EDELMAN, Justice.

Appellant's and Appellee's motions for rehearing are overruled, our opinions issued in this case on January 15, 2004 are withdrawn, and the following majority and dissenting opinions are issued in their place.

In this case to enforce an agreement incident to divorce, Margaret Dye Sudan, now known as Maggie Mackenzie ("Mackenzie"), appeals a summary judgment granted in favor of Philip P. Sudan, Jr. ("Sudan") and the denial of her own motion for summary judgment. We affirm in part and reverse and remand in part.

Background

In 1993, the parties entered into an agreement incident to their divorce (the "agreement") that was incorporated into their divorce decree (the "decree").¹ In 1998, the parties entered into an amendment to the agreement (the "amendment"). Sudan thereafter made no further payments to Mackenzie under the agreement.² In 1999, Mackenzie sued Sudan for rescission of the amendment, breach of the agreement, intentional infliction of emotional distress, and tortious interference. After the parties filed cross motions for summary judgment, the trial court granted Sudan a partial summary judgment, denied Mackenzie's motion, and severed the remaining claims.³

Standard of Review

A traditional summary judgment may be granted if the motion and summary judgment evidence show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law on the issues expressly set out in the motion or response. TEX.R. CIV. P. 166a(c). In reviewing a traditional motion for summary judgment, we take all evidence favorable to the nonmovant as true and resolve every doubt, and indulge every reasonable inference, in the nonmovant's favor. Tex. Commerce Bank, N.A. v. Grizzle, 96 S.W.3d 240, 252 (Tex.2002).

A no-evidence motion for summary judgment must be granted if: (1) the moving party asserts that there is no evidence of one or more specified elements of a claim or defense on which the adverse party would have the burden of proof at trial; and (2) the respondent produces no summary judgment evidence raising a genuine issue of material fact on those elements. See TEX.R. CIV. P. 166a(i). In reviewing a no-evidence summary judgment, we review the evidence in the light most favorable to the nonmovant, disregarding all contrary evidence and inferences, to determine whether more than a scintilla of probative evidence was presented on the challenged elements of the nonmovant's claim. See King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (2003). Where summary judgment has been requested by both sides, granted to one, and denied to the other, we determine all questions presented and, if the judgment is in error, render that which the trial court should have rendered. Dow Chem. Co. v. Bright, 89 S.W.3d 602, 605 (Tex.2002).

Validity of Amendment

In seeking summary judgment against Mackenzie's claims for breach of his obligations under the agreement and decree, Sudan relied principally on the amendment to support his defenses of modification, ratification, release, accord and satisfaction, payment, waiver, estoppel, and novation. Mackenzie challenged the validity of the amendment on the three grounds discussed below.

Lack of Court Approval

Mackenzie's first and fourth issues challenge the granting of Sudan's motion for summary judgment to the extent it was based on the amendment. Among other things, she contends that, because the amendment concerned child support and/or implicated a child's best interest, it could not be effective to modify the agreement and decree without court approval.⁴

In Texas, the Legislature has explicitly required that parental agreements concerning child support be expressly approved by the court based on whether the agreement is in the child's best interest.⁵ Accordingly, agreements by parents to reduce or modify court-ordered child support obligations without such approval violate public policy and are unenforceable.⁶ However, Mackenzie's claims for child support are not before us in this appeal,⁷ and her brief cites no authority providing that the amendment could not validly modify obligations under the agreement and decree other than for child support without court approval. Accordingly, her challenges to the amendment based on lack of court approval afford no basis for relief with regard to the claims at issue in this appeal⁸ and are overruled.

Adequacy of Consideration

Mackenzie contends that the amendment was unenforceable for lack of, or inadequate, consideration because Mackenzie received only $30,000 that Sudan already owed her under the agreement while relinquishing over $500,000 in future payments and the value of their home, approximately $900,000.

A contract that lacks consideration is unenforceable. Fed. Sign v. Tex. S. Univ., 951 S.W.2d 401, 409 (Tex.1997). What constitutes consideration for a contract is a question of law. Brownwood Ross Co. v. Maverick County, 936 S.W.2d 42, 45 (Tex.App.-San Antonio 1996, writ denied). Consideration can be either a benefit to the promisor or a loss or detriment to the promisee, including surrendering a legal right. N. Natural Gas Co. v. Conoco, Inc., 986 S.W.2d 603, 607 (Tex.1998). Payment by a debtor before payment is due of an amount less than would ultimately have been required is sufficient consideration to support the creditor's agreement to accept the payment in full satisfaction of the total amount due. Neeley v. Southwestern Inv. Co., 430 S.W.2d 465, 468 (Tex.1968). In that the $30,000 Mackenzie received for entering into the amendment was paid and accepted before that amount was due, we have no basis to conclude that the amendment was without consideration.

With regard to the adequacy of that consideration, the requirement of consideration is not a safeguard against improvident contracts. RESTATEMENT (SECOND) OF CONTRACTS § 79 cmt. c (1981). Therefore, if consideration is found, there is no additional requirement of equivalence of values exchanged, and courts will not ordinarily inquire into the adequacy of consideration. Id. § 79(b) and cmt. c. However, gross inadequacy of consideration may be relevant to other issues, such as duress. Id. § 79 cmts. c, e; see City of Lubbock v. Phillips Petroleum Co., 41 S.W.3d 149, 161 (Tex.App.-Amarillo 2000, no pet.). Therefore, we overrule Mackenzie's challenge to the existence of consideration, and we review her challenge to the adequacy of the consideration in the context of her duress contention, discussed in the following section.

Economic Duress

Mackenzie contends that the amendment is also unenforceable because she signed it under economic duress caused by Sudan. Duress exists where: (1) there is a threat to do an act that the threatening party has no legal right to do; (2) the threat is of such a character as to destroy the free agency of the person to whom it is directed, causing him to do what he was not legally bound to do and would not otherwise do; (3) the restraint caused by the threat is imminent; and (4) the party against whom it is directed has no present means of protection.⁹ Where an alternative may take the form of a legal remedy, a threat to breach a contract does not constitute duress unless there is evidence of some probable consequences therefrom for which the legal remedy afforded by the courts is inadequate. Hartsville Oil Mill v. United States, 271 U.S. 43, 49, 46 S.Ct. 389, 70 L.Ed. 822 (1926); RESTATEMENT (SECOND) OF CONTRACTS § 175 cmt. b (1981). The test for causation, i.e., whether the duress contributes substantially to the claimant's decision to assent, is subjective, considering all surrounding circumstances, such as the background and relationship of the parties and the emotional condition of the party claiming duress. See RESTATEMENT (SECOND) OF CONTRACTS § 175 cmt. c.

In this case, Sudan's motion for summary judgment asserted both that there was no evidence of each element of Mackenzie's duress claim and that the claim was defeated as a matter of law by evidence that, at the time the alleged duress took place: (1) Sudan had paid Mackenzie more than $1 million dollars and was current on all prior alimony payments; (2) Mackenzie's CPA was the one who suggested the $30,000 lump sum payment; (3) Mackenzie was working at a law firm and received assistance from that firm in finalizing the amendment; (4) Mackenzie had legal remedies to prevent Sudan from acting wrongfully; and (5) Mackenzie had access to competent legal counsel in Texas whom she subsequently hired to represent her in this case on a contingency basis.

Mackenzie's affidavit contained the following statements relevant to the duress issue:

[During the divorce, Sudan] also told me that if I insisted on an investigation of [his law] firm's assets he would quit his job and go to work at the 7-11 and that I wouldn't get any money at all.

During the negotiations to divide the community estate, Phil refused to provide information to me related to our community estate. Thus, instead of receiving my equitable division of [it], I took a payout over more than 15 years. To benefit Phil's tax situation, the money was characterized as contractual alimony,.... I paid significant taxes on [it].

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[Daughter] Carly attended a therapeutic school ... in Colorado. Phil and [subsequent wife] Tracy found a school in Connecticut and decided they wanted Carly to go to school there. Carly and I went to...