MEDIATION CASE LAW UPDATES
September 12, 2019:
THE FOLLOWING CASES MAY OR MAY NOT BE THE LAW IN YOUR JURISDICTION, BUT THEY ARE
CERTAINLY CASES YOU SHOULD BE AWARE OF IF YOU HAVE AN ISSUE DEALING WITH ONE OF THEM
Once you have a binding MSA on parent-child issues, can the parties agree to set it aside?
Apparently not, at least in Houston. In In Re Gladys N. MINX, a 2018 case out of the 14th Court of Appeals, the parties agreed to set aside an otherwise binding MSA regarding parent-child issues. The Court accepted the stipulation setting aside the MSA and entered Temporary Orders. The 14th Court granted Mandamus, ordering the Judge (whom we all know and love) to enter Judgement based on the MSA, citing the Lee case, 411 SW3rd 445, 450, finding that if the MSA satisfies the requirements of 153.0071, the parties may not agree to set it aside. There was a lengthy dissent and concurring opinion. Since 153.0071 contains similar language, it makes you wonder if the Court would apply the same logic to MSAs regarding property?
Is there any risk in proceeding to mediation with no Order to Mediate or agreement of the parties to mediate?
Perhaps. It’s interesting that the court in MINX sited the Lee case. In Lee (above) a term was left out of the signed and filed MSA requiring W to pay H $87,500 within 30 days of entry. W filed a Motion to Enter based on the terms of the MSA. The Waco Court denied the entry, saying the MSA must comply with all of the terms of 6.602 TFC and since there was no agreement to mediate or court order to mediate, the trial court was not required to enter a Decree based on the MSA (which otherwise complied with 6.602).
Which Document Controls?
If your Decree of Divorce contains the usual language saying the Decree controls any differences between the terms of the Decree and MSA, does it? Maybe. Maybe not. In a case issued this month out of the 14th Court of Appeals (Woodward v. Woodward, No. 14-18-0039-CV) the MSA awarded H $100,000 from W’s 401k. The Decree of Divorce, however, only awarded $50,000 to H from W’s 401k. The Court’s plenary power had expired making the only avenues for relief either by bill of review for sufficient cause, or a nunc pro tunc if it were a clerical error. In going through a detailed analysis of the facts of this particular case, the 14th Court affirmed the trial courts entry of a Judgment Nunc Pro Tunc reforming the Decree to comply with the MSA saying the error was clerical.
Are you limited to statutory grounds in setting aside an arbitration?
Apparently not. In a somewhat unsettling opinion (unsettling to mediators and arbitrators) the 14th Court of Appeals set aside an arbitration ruling based on the arbitrator’s failure to disclose their personal and professional connections with one of the attorneys. The family law bar is a fairly tight knit group and we all know and trust those we select to arbitrate for us. I’m told that’s not necessarily the way it is on the civil side of the docket. The case raises a lot of interesting questions about how much you have to disclose and when. For those of you looking to set aside an arbitration without meeting the restrictive statutory grounds, Piske is a must read. No. 14-17-00869-CV, Houston Fourteenth Court of Appeals.
March 29, 2019:
Timing is everything.
Is a pre-petition MSA enforceable? Not according to the Amarillo Court of Appeals. Prior to filing a petition for divorce, the parties entered into what purported to be a binding MSA containing language THIS AGREEMENT IS NOT SUBJECT TO REVOCATION. A petition was subsequently filed, and a divorce entered upon the terms contained in the MSA. Wife was able to set the divorce aside and the Court found pre-petition MSAs do not have the protection of TFC 6.602 and are enforceable only in the same manner as any other written contract. Heighsmith v. Heighsmith, No. 07-15-00407-CV. Moral of the story, make sure you have an active case on the day you sign your MSA.
Is the “Magic Language” necessary?
Contrast Heighsmith with Reyes, No. 04-18-00012-CV out of San Antonio. There, the parties entered into a settlement agreement, filed it with the court, and the court rendered Judgment on the agreement. W filed a motion to enter a final decree and H opposed entry as the agreement failed to contain the “magic language” (The Agreement is Not Subject to Revocation). The Court found that once the divorce had been rendered entry of the Decree was purely a ministerial act and H could not revoke his consent. Moral of the story, always include the magic language, but if you don’t, get the court to render Judgment before revocation of consent.
Does an agreement to arbitrate mean the arbitration is binding?
Maybe. In Amsberry v. Salazar, No. 04-17-00704, out of San Antonio, the parties agreed to mediate, and if mediation was unsuccessful, to arbitrate. Mediation was unsuccessful and the case proceeded to arbitration. The unsuccessful party filed a motion to vacate the arbitration award since the agreement to arbitrate didn’t explicitly provide for “binding” arbitration, but only for arbitration. The San Antonio Court of Appeals refused to set aside the award, saying the parties agreed to arbitrate pursuant to the Texas AA. Since the Texas AA includes no provisions for non-binding arbitration, it was binding. Moral of the story – if you want arbitration to be binding, specify binding arbitration.
What proof is required to set aside an MSA based on fraud?
Short answer. Some evidence of fraud. In Gerhardt v. Gerhardt, No 05-17-01433, a 2019 Dallas Court of Appeals case, H attempted to set aside the MSA on fraud grounds for W not disclosing she was his fourth W (not his second), that she had been previously imprisoned for fraud, and that she had failed to file the parties’ tax returns for three years. At the entry hearing, in denying H’s motion to set aside the MSA, the court noted H failed to verify or support by affidavit either his objection to the MSA or his W’s motion for entry of Judgment and the Court entered the decree based on the MSA, noting argument of counsel is not evidence. While we are used to not presenting evidence at an entry hearing, the moral of this story is argument of counsel is not considered evidence and you need to present evidence of fraud by verifying your motion, filing affidavits, or otherwise.