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Texas Appeals Court Upholds Mediated Settlement Agreement

Parties to a Texas divorce or a suit affecting the parent-child relationship may enter a mediated settlement agreement.  To be a binding mediated settlement agreement, the agreement must meet certain statutory requirements.  If it meets the requirements, the agreement is binding and the parties may obtain a judgment on it.

In a recent case, a father challenged a mediated settlement agreement.  After the divorce, the mother petitioned for modification of the parent-child relationship and the parties reached a settlement agreement in 2012.  They reached additional agreements in 2014 and sought to have the trial courts render those agreements into a judgment.  Each party moved to enter an agreed final order, but the proposed orders did not match.  The court signed the father’s proposed judgment, and the mother moved for a new trial.  Before the motion was decided, the parties signed a new mediated settlement agreement (MSA) following another mediation in 2015.  The mother filed a notice of settlement agreement.  A proposed order granting the mother’s motion for new trial and vacating the previous judgment was filed, but the trial court did not sign it.

A few months later, the mother petitioned to enforce the 2015 MSA.  The court granted the mother’s motion to compel arbitration and ultimately rendered the arbitrator’s award into a judgment.

The father challenged the MSA’s validity.  He argued it had expired and he had repudiated it.  Additionally, he argued the arbitration award judgment is void for lack of plenary jurisdiction.  He further argued the trial court could not order arbitration because the MSA had expired and was no longer enforceable.

The agreement met the statutory requirements of a MSA when it was signed.  The appeals court found that it was binding on the parties and they were entitled to a judgment on it.  The father argued that the trial court never signed the agreement or the agreed proposed order to vacate the previous judgment to allow a new judgment to be entered.  He argued the mother lost her right to have the agreement rendered into a judgment when she failed to appeal the trial court’s failure to issue a ruling on the motion.  The appeals court found that the expiration of the court’s plenary power and the mother’s failure to appeal did not preclude her from having the MSA rendered into a judgment.

The father also argued that the MSA had to be rendered as a judgment before the trial court’s plenary power expired.  He cited a previous case where the court held an agreement in a divorce case was not an irrevocable MSA because it had not been reached while the divorce proceeding was pending.  The appeals court noted that other courts have held otherwise, but it did not need to address the conflict because it could distinguish the present case from the case cited by the father.  The appeals court found there was a pending suit affecting the parent-child relationship at the time of the mediation.  The trial court still had plenary power of the first petition to modify, and either party could have appealed the judgment.  The appeals court also found that the case cited by the father was based on a plain-language interpretation of the statute, and the applicable statute here does not mention any effect of the suit ending during or after mediation.  Pursuant to the statute, the agreement is binding if it meets the statutory requirements, which this agreement did.  There are not any additional restrictions in the plain language of the statute.

The father also argued the agreement expired because it had a term requiring the lawyers to sign an agreed order granting the mother’s motion for new trial for purposes of entry of an order pursuant to the agreement.  He argued the parties intended the agreement to expire if the trial court did not sign the agreed order while the first modification suit was pending.  The appeals court found nothing in the agreement prevented the parties from seeking other ways of obtaining judgment when the court failed to sign the agreed order.  By its terms, the agreement was effective on the day it was signed.  The mother’s efforts to seek judgment in a new proceeding were not inconsistent with the stated intent of the parties.

The father additionally argued the award exceeded the scope of the order compelling arbitration.  He argued that the order compelling arbitration required arbitration of “any and all issues between the parties in the future . . .” and because the 2015 agreement predated the order, it could not be part of the arbitration award.  The appeals court found, however, that the trial court had also ordered arbitration of any disputes arising from the execution of the 2015 MSA, so the award was within the scope.

The appeals court therefore affirmed the trial court’s judgment.

If you are facing divorce, an experienced Texas divorce attorney can help protect your rights, even if you believe you may reach an agreement with your spouse.  Call McClure Law Group at 214.692.8200 to set up a consultation.

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