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Mediated Settlement Agreements in Texas Divorces

In Araujo v. Araujo, an ex-wife appealed from an order denying her motion to revoke and set aside a mediated settlement agreement for her divorce. The ex-wife argued on appeal that the agreement lacked consideration and therefore wasn’t enforceable, her own attorney coerced her to sign it, and there was an invalid provision that made it unenforceable.

The case arose when a husband and wife entered into a mediated settlement agreement in August 2014. It awarded the wife certain property in two Texas cities and required her to pay $27,000 to the husband by a certain date. The agreement stated that each party had made a fair, reasonable disclosure of finances and property to the other. The wife was represented by an attorney, who withdrew from representation in October 2014.

Her second attorney filed a motion to revoke and set aside the agreement. She argued that the agreement resulted in an unjust estate division, due to the husband’s fraud. She claimed that the only property she got under the agreement was separate property, that she was entitled to half of the community property awarded to her ex-husband, that the agreement didn’t address the retirement in the amount of about $22,000, and that it didn’t address or divide the couple’s two vehicles. A trial court denied her motion.

The ex-husband moved for compliance on the ground that she didn’t pay him $27,000, as required by the settlement agreement. The wife testified that she had only gone up to sixth grade in Mexico and that nobody translated the agreement into Spanish for her, even though she didn’t speak English. She also argued that her first attorney had forced her to sign and that there were retirement funds not divided by the settlement agreement that should have been. At the end of the hearing (and in the final divorce decree), the judge found she had the ability to make a payment, yet none was made, and ordered her to pay her ex $27,000. She filed for a new trial, but no hearing took place on the motion.

The appellate court explained that when a settlement agreement complies with the requirements of Texas Family Code § 6.602(b), it should be enforced unless it’s illegal or is procured through dishonest means. The ex-wife in this case argued that the agreement was void because of lack of consideration, coercion, and an unenforceable provision that she stay married until she paid the husband $27,000.

Specifically, she argued there was no consideration because she didn’t get anything from the agreement, since the property she was awarded was her own separate property, and she wasn’t reimbursed for the community share of the property awarded to her husband. The appellate court found she had no evidence to support the claim that the property awarded to her was her separate property.

With regard to the ex-wife’s coercion claim, the appellate court reasoned that nothing in her testimony constituted a threat that would make her unable to exercise her free agency, and it overruled this issue. With regard to her claim that she was unable to make a payment, the court noted that she’d testified that one of her properties was valued by the county at $105,000, which showed she could make the payment. The trial court judgment was affirmed.

If you are considering divorce, contact the Texas attorneys at the McClure Law Group at 214.692.8200.

More Blog Posts:

Johnny Depp, Amber Heard, and a Discussion on Family Violence Protective Orders and Temporary Restraining Orders in Texas, June 9, 2016

Divorce and Taxes – What to do if your ex-spouse botched your joint tax return, May 31, 2016