MYRIAM HERSZAGE v. JORGE HERSZAGE, M. D.--Appeal from 139th District Court of Hidalgo County

NUMBER 13-06-257-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG

MYRIAM HERSZAGE, Appellant,

 
v.

JORGE HERSZAGE, M.D., Appellee.

On appeal from the 139th District Court of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Justices Ya ez, Benavides, and Vela
Memorandum Opinion by Justice Benavides

Appellant Myriam Herszage ("Myriam") appeals a judgment rendered on a mediated settlement agreement incident to her divorce from appellee, Jorge Herszage, M.D. ("Jorge"). By multiple issues, Myriam argues that the trial court erred in rendering judgment on a mediated settlement agreement that (1) was revocable and properly revoked before judgment, and (2) was fraudulently induced. For the reasons stated herein, we affirm.

I. BACKGROUND

In 2004, Jorge filed for divorce from Myriam, his wife of many years. Myriam answered the suit and filed a counterclaim for divorce, alleging, among other things, that she was entitled to a disproportionate share of the community assets as a result of gifts of community property by Jorge to others.

After discovery had been served but before Jorge's answers were due, the trial court ordered the parties to mediation. The parties mediated the division of property for seven hours on Friday, February 3, 2006, after which they appeared to reach an agreement. The parties' mediated settlement agreement ("MSA") consisted of five pages. The first two pages contained boilerplate language. These pages provided, for example, that the parties entered the agreement "freely and without duress after consulting with professionals of his or her choice," that the agreement is "signed voluntarily and with the advice and consent of counsel on the dates set out below and subject to the court's approval," and that "the parties agree to appear in court at the first available date to present evidence and secure rendition of judgment in accordance with this Mediated Settlement Agreement." Most importantly, the second page stated the following in capital letters, underlined type: "THIS AGREEMENT IS NOT SUBJECT TO REVOCATION." The first two pages of the agreement were not signed or initialed by any party.

The last three pages, entitled "Exhibit A," contained the division of property. The parties' real property, personal property, and bank accounts with their respective values were listed in a grid, which allocated each item to one of the parties. The remainder of the document provided for certain conditions and obligations of the parties regarding, among other things, residency in the real property, attorneys' fees, and inventories. Exhibit A's final provision required Myriam to dismiss with prejudice her counterclaim against Jorge, insofar as it related to the Merrill Lynch account in Jorge's sister's name, stating: "Myriam dismisses with prejudice any and all claims against Jorge and/or his family members relating to the Merrill Lynch accounts in Jorge's sister's name, and all other gifts previously made by Jorge to others." The value of this Merrill Lynch account is not listed on the document. Each page of Exhibit A was either signed or initialed by Jorge and Myriam. The last page was also signed by the attorneys.

On February 6, 2006, the Monday following mediation, Jorge's counsel appeared before the trial court to obtain judgment on the MSA. Myriam's counsel appeared, and Myriam attempted to revoke her consent to the MSA. At the hearing, Myriam admitted that she signed the MSA, but she alleged that when she signed it, the first two pages (containing the non-revocation language) were not attached to Exhibit A (containing the division of property). Myriam insisted that the revocation language was not there when she signed the agreement.

Additionally, Myriam stated that Jorge had not disclosed to her that there was a million dollars in a Merrill Lynch account that he had put in his sister's name. When asked by the court her reason for revoking the agreement, she admitted that the million dollar account was discussed at the mediation.

 

Jorge's counsel then told the trial court that the account was discussed extensively prior to the mediation. Jorge's counsel stated Myriam agreed to release her claim to the Merrill Lynch account in exchange for allocating several buildings to Myriam as her separate property. Apparently Myriam had claimed these buildings as her separate property, but Jorge's counsel believed she did not have enough evidence to trace the purchase of these buildings to Myriam's separate funds. Jorge then testified under oath that the Merrill Lynch account was discussed "ad infinitum" and "ad nauseam," and he confirmed that the claims to the account were released at the mediation in exchange for the allocation of a building to Myriam's separate property.

In response to questions from the court, Mark Montalvo, Myriam's counsel, stated that he had advised Myriam of "everything" and explained "everything" to her. Montalvo also stated that the Merrill Lynch account was discussed at the mediation and that Myriam was dropping the claims regarding the Merrill Lynch account. The trial judge stated that he was approving the settlement, but he did not render judgment at that time.

The next day, February 7, 2006, Myriam filed a Motion to Set Aside Mediated Settlement and Alternative Motion for New Trial. The motion stated that Myriam validly exercised her right to revoke the agreement prior to the court's rendition of judgment. Alternatively, if the court rendered judgment, she requested a new trial on the same grounds. The trial court signed a final decree of divorce on February 14, 2006, rendering judgment on the settlement agreement.

The trial court held a hearing on March 1, 2006 on the Motion to Set Aside Mediated Settlement and Alternative Motion for New Trial. At the hearing, Myriam again testified that she did not know the agreement was irrevocable, that she did not sign the first two pages of the agreement, and that she did not see those pages until after she arrived home from the mediation. In opposition, Jorge testified that Myriam and Montalvo signed the agreement first. He stated that after Myriam signed, the agreement was presented to him with all five pages stapled together.

Additionally, after being instructed by the court to testify, Montalvo testified that he was present when Myriam signed the agreement. Montalvo stated that the documents were presented to Myriam in two separate stacks which were not stapled; however, she had all five pages when she signed. He further stated that he reviewed the entire contract before he signed it himself.

After hearing the evidence, the trial court denied the Motion to Set Aside Mediated Settlement and Alternative Motion for New Trial. Myriam requested findings of fact and conclusions of law without any recommendations as to what the court should find. The trial court then entered the following findings of fact relevant to the present appeal:

3. The Mediated Settlement Agreement Incident to Divorce, which was signed by each party and each party's attorney, provided in boldfaced type, capital letters, and underlined as follows:

THIS AGREEMENT IS NOT SUBJECT TO REVOCATION

4. The Mediated Settlement Agreement Incident to Divorce, which was signed by each party and each party's attorney settled all pending issues in this cause.

8. There was no fraud perpetrated against the Respondent prior to or at the time of her signing the Mediated Settlement Agreement Incident to Divorce.

10. The Mediated Settlement Agreement Incident to Divorce was not subject to revocation after it was signed by both parties and their attorney's [sic] of record.

12. No good cause exists for the Court to set aside the mediated settlement agreement signed by the parties and their attorneys.

13. No good cause exists for the Court to grant a new trial.

14. Respondent presented no evidence warranting the setting aside of the mediated settlement agreement or the granting of a new trial.

 

Based on these fact findings, the trial court issued conclusions of law, stating that the MSA was a binding, valid, and enforceable agreement that was irrevocable. Myriam did not object or request additional findings. This appeal ensued.

II. Revocation of the MSA

In issues one through four, Myriam argues that the trial court erred in rendering judgment on the MSA after she revoked her consent to the agreement in open court. Issues one and two challenge the judgment itself; issue three challenges the factual sufficiency of findings of fact numbers 3, 4, 10, 12, 13, and 14 supporting non-revocability of the MSA, and issue four challenges the trial court's conclusions of law.

A. Standard of Review

Myriam attacks the judgment itself as well as the findings of fact and conclusions of law relating to her ability to revoke the MSA before judgment. When appealing a trial court's judgment after a non-jury trial, attacks on the sufficiency of the evidence should be directed at specific findings of fact rather than at the entire judgment. Carter v. Carter, 736 S.W.2d 775, 777 (Tex. App.-Houston [14th Dist.] 1987, no writ). Because Myriam contests the factual sufficiency of the evidence to support the findings of fact, essentially raising the same argument that she does generally against the judgment, we will review her first four issues as a challenge to the sufficiency of the fact findings. Id. (noting that general attack on judgment was insufficient, but nevertheless reviewing sufficiency of evidence to support findings of fact even though they had not been challenged).

 

A trial court's findings of fact may be reviewed for factual sufficiency of the evidence. (1) Nelkin v. Panzer, 833 S.W.2d 267, 268 (Tex. App.-Houston [1st Dist.] 1992, writ dism'd w.o.j.). We apply the same standard of review to a trial court's fact findings as we do to a jury's findings. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996) (per curiam).

Jorge had the burden to establish he was entitled to judgment on the MSA by proving that he satisfied the requirements of the family code. Zeifman v. Michels, 212 S.W.3d 582, 596 (Tex. App.-Austin 2006, pet. denied). An appellant challenging the factual sufficiency of a finding on an issue to which the other party had the burden of proof must demonstrate that there is insufficient evidence to support the adverse finding. Hickey v. Couchman, 767 S.W.2d 103, 109 (Tex. App.-Corpus Christi 1990, writ denied); Raw Hide Oil & Gas, Inc. v. Maxus Exploration Co., 766 S.W.2d 264, 275-76 (Tex. App.-Amarillo 1988, writ denied). Under these circumstances, we first consider all of the evidence, both in favor of and against the finding. Plas-Tex Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989); Lofton v. Tex. Brine Corp., 720 S.W.2d 804, 805 (Tex. 1986) (per curiam). We will set aside the finding "only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust." Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per curiam).

The fact finder is the judge of the credibility of witnesses and weight to be accorded their testimony. Krishnan v. Ramirez, 42 S.W.3d 205, 211 (Tex. App.-Corpus Christi 2001, pet. denied) (citing Cain, 709 S.W.2d at 176). Because this Court is not the fact finder, we may not substitute our own judgment for that of the trier of fact, even if a different answer could be reached on the evidence. Id. at 212.

Conclusions of law will be upheld on appeal if the judgment can be sustained on any legal theory supported by the evidence. Dep't of Pub. Safety v. Stockton, 53 S.W.3d 421, 423 (Tex. App.-San Antonio 2001, no pet.). Conclusions of law will not be reversed unless they are erroneous as a matter of law. Id. A trial court's conclusions of law are reviewed de novo as legal questions. State v. Heal, 917 S.W.2d 6, 9 (Tex. 1996). The reviewing court affords no deference to the lower court's decision. Subaru of Am., Inc. v. David McDavid Nissan, Inc., 84 S.W.3d 212, 227 (Tex. 2002). Under de novo review, the reviewing court exercises its own judgment and redetermines each legal issue. In re C.H., 89 S.W.3d 17, 29 (Tex. 2002) (Hecht, J., concurring); Subaru of Am., Inc., 84 S.W.3d at 222. Incorrect conclusions of law will not require a reversal if the controlling findings of fact support a correct legal theory. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002); Aguero v. Ramirez, 70 S.W.3d 372, 373 (Tex. App.-Corpus Christi 2002, pet. denied).

B. Applicable Law

Texas Family Code section 6.602 governs mediated settlement agreements incident to divorce, providing that if the statute's requirements are met, the mediated settlement agreement is binding on the parties at the time it is executed:

(b) 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.

(c) If a mediated settlement agreement meets the requirements of this section, a party is entitled to judgment on the mediated settlement agreement notwithstanding Rule 11, Texas Rules of Civil Procedure, or another rule of law.

 

TEX. FAM. CODE Ann. 6.602 (Vernon 2006). A party to a mediated settlement agreement meeting the requirements of section 6.602 is entitled to judgment on the agreement. Boyd v. Boyd, 67 S.W.3d 398, 402 (Tex. App.-Fort Worth 2002, no pet.).

Section 6.602 creates a procedural shortcut for the enforcement of a mediated settlement agreement in divorce cases. TEX. FAM. CODE Ann. 6.602; Cayan v. Cayan; 38 S.W.3d 161, 166 (Tex. App.-Houston [14th Dist.] 2000, pet. denied). An agreement pursuant to section 6.602 of the Texas Family Code is wholly different than a typical agreement incident to divorce; an agreement under 6.602 cannot be revoked before judgment, while any other agreement may be revoked prior to judgment: "[T]he mediated agreement is binding and irrevocable at the time of its execution rather than at the time divorce is rendered, the parties are entitled to judgment on it, and the trial court does not have to determine that it is 'just and right.'" In the Matter of the Marriage of Joyner, 196 S.W.3d 883, 891 (Tex. App.-Texarkana 2006, pet. denied). "While Section 6.602 cannot be imposed on the parties, once affirmative steps are taken to comply with that section, neither party can repudiate the agreement." Id. at 889; see also Mullins v. Mullins, 202 S.W.3d 869, 876 (Tex. App.-Dallas 2006, pet. denied). If, however, the revocation language was not part of the agreement, then the agreement was revocable before judgment was rendered, and the trial court improperly rendered judgment on the MSA. See TEX. FAM. CODE Ann. 6.602(c).

C. Analysis

The trial court found the MSA fulfilled the three requirements of section 6.602, and therefore, the MSA could not be revoked. The MSA, on its face, contained all the requirements outlined by the Texas Family Code. TEX. FAM. CODE Ann. 6.602. Nevertheless, Myriam contends that the she never saw the non-revocation language and that no one explained it to her.

Myriam points to certain undisputed facts on appeal to support her argument that the agreement she signed did not contain the non-revocation language: (1) the boilerplate provisions containing the statement, "THIS AGREEMENT IS NOT SUBJECT TO REVOCATION" were not signed or initialed by either party, whereas every page in Exhibit A containing the property settlement was signed or initialed; and (2) the document was presented to Myriam in two separate stacks, which were not stapled together. Myriam further argues that she never agreed to the non-revocation language.

To the contrary, Jorge argues that the trial court's finding that the agreement was irrevocable was supported by his testimony, Montalvo's testimony, and Myriam's testimony. First, Montalvo testified that he explained "everything" to Myriam. He testified that he heard the mediator direct statements to Myriam regarding the nature of revocation in regards to mediated settlement agreements. Montalvo also testified that, prior to signing the MSA, he reviewed the entire MSA that was filed with the trial court, which included the two pages at issue. Second, Myriam admitted that prior to leaving the mediation, she was given the two pages at issue. Third, Jorge testified that when the MSA was handed to him all of the pages were stapled together. The trial judge, as sole arbiter of the facts, was entitled to disbelieve Myriam's testimony and believe the testimony of others that the necessary language was in the document when it was signed. See Ward v. Nava, 488 S.W.2d 736, 740 (Tex. 1972); see also Wal-Mart Stores, Inc. v. Amos, 79 S.W.3d 178, 192 (Tex. App.-Texarkana 2002, no pet.). We hold that the trial court's findings of fact that the nonrevocation language was contained in the agreement Myriam signed and that the agreement was, therefore, not subject to revocation were not so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust.

Furthermore, we note that Myriam does not dispute that the entire agreement was on the table when she signed the last three pages; rather, she merely argues that she never saw the first two pages. Parties are obligated to protect themselves by reading a contract prior to signing it. G-W-L, Inc. v. Robichaux, 643 S.W.2d 392, 393 (Tex. 1982), overruled on other grounds sub. nom. by Melody Homes Mfg. Co. v. Barnes, 741 S.W.3d 349 (Tex. 1987). In the absence of fraud, a person who signs a contract without reading it does so at his or her own peril, and the failure of the other party to explain the terms is no excuse. Id.; see also In re FirstMerit Bank, 52 S.W.3d 749, 758 (Tex. 2001) (holding plaintiff could not escape arbitration agreement by claiming that other party failed to explain the agreement).

 

Because we find that the evidence was factually sufficient to support the trial court's finding that Myriam signed an irrevocable mediated settlement agreement, we overrule Myriam's first three issues. The trial court's conclusions of law, concluding that the MSA was binding on the parties and is irrevocable, were correct because the evidence demonstrated that the MSA complied with Texas Family Code section 6.602. Accordingly, we also overrule Myriam's fourth issue.

III. Fraudulent Inducement

In issues five and six, Myriam contends that the court erred in rendering judgment on the MSA because she established fraud in the inducement. Issue five attacks the judgment itself, while issue six challenges the factual sufficiency of the evidence supporting the trial court's finding of fact number 8 that Jorge did not commit fraud.

A. Standard of Review

Given our holding above that the MSA is valid on its face, it is binding and irrevocable. TEX. FAM. CODE Ann. 6.602. The only exception is when a party establishes illegality, fraud, duress, or coercion. Joyner, 196 S.W.3d at 892. Here, Myriam asserts fraud by nondisclosure. (2) The elements of fraud by nondisclosure are: (1) a duty to disclose material information, (2) the failure to disclose such information with the intent that the other party should act, (3) reliance on the nondisclosure, and (4) injury. In re FirstMerit, 52 S.W.3d at 758; Schlumberger Tech. Corp. v. Swanson, 959 S.W.2d 171, 181 (Tex. 1997).

When a trial court makes a general finding on a claim or defense, but does not expressly make a factual finding as to each element of that claim or defense, we presume all findings necessary to support the judgment and which are supported by some evidence. Tex. R. Civ. P. 299; Burnside Air Conditioning & Heating, Inc. v. Young Corp., 113 S.W.3d 889, 893 (Tex. App.-Dallas 2003, no pet.) (holding that factual findings on elements of contract formation would be presumed where court made general finding that contract existed). Rule 299 provides:

When findings of fact are filed by the trial court they shall form the basis of the judgment upon all grounds of recovery and of defense embraced therein. The judgment may not be supported upon appeal by a presumed finding upon any ground of recovery or defense, no element of which has been included in the findings of fact; but when one or more elements thereof have been found by the trial court, omitted unrequested elements, when supported by evidence, will be supplied by presumption in support of the judgment. Refusal of the court to make a finding requested shall be reviewable on appeal.

 

Id.

When a trial court finds against a party on a claim or defense for which that party held the burden of proof at trial, on appeal, the party must challenge the trial court's adverse finding on every element of that claim or defense. Wisenbarger v. Gonzales Warm Springs Rehabilitation Hosp., Inc., 789 S.W.2d 688, 694 (Tex. App.-Corpus Christi 1990, writ denied) (plaintiff's challenge to adverse liability findings, where plaintiff failed to also challenge adverse damages finding, required court of appeals to affirm take-nothing judgment). A challenge to a trial court's adverse finding on only one element of the claim or defense does not provide a court of appeals with reversible error. Id.

 

As stated above, we will consider Myriam's challenge to the judgment itself as a part of her challenge to the trial court's fact findings. Carter v. Carter, 736 S.W.2d 775, 777 (Tex. App.-Houston [14th Dist.] 1987, no writ). Myriam had the burden at trial of proving the alleged fraudulent inducement. Jistel v. Tiffany Trail Owners Ass'n, 215 S.W.3d 474, 480 (Tex. App.-Eastland 2006, no pet.) (citing Brown v. Zimmerman, 160 S.W.3d 695, 702 (Tex. App.-Dallas 2005, no pet.)). Under these circumstances, an appellant challenging a finding on an issue upon which that party had the burden of proof must demonstrate that "the adverse finding is against the great weight and preponderance of the evidence." Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001) (per curiam) (citing Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983)).

In reviewing a challenge that the finding is against the great weight and preponderance of the evidence, we first examine the record to determine if there is some evidence to support the finding. Id. If evidence exists to support the finding, then we must determine, in light of the entire record, whether the finding is so contrary to the overwhelming weight and preponderance of the evidence as to be clearly wrong and manifestly unjust or whether the great preponderance of the evidence supports a contrary finding. Id. at 241 (citing Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986), overruled on other grounds by Crown Life Ins. Co. v. Casteel, 22 S.W.3d 378 (Tex. 2000)).

B. Analysis

Myriam argues that Jorge had a duty to disclose all the parties' community assets, but Jorge did not disclose a million-dollar Merrill Lynch account that he put in his sister's name. She attacks the factual sufficiency of the trial court's finding of fact number 8, which found that "[t]here was no fraud perpetrated against the Respondent prior to or at the time of her signing the Mediated Settlement Agreement Incident to Divorce."

The record supports implied findings against Myriam on the reliance element of her fraud claim. First, although Myriam requested findings of fact and conclusions of law, the record does not reflect that she provided the trial court with proposed findings of fact that included every element of her fraud claim. Second, the record does not reflect that Myriam objected to the trial court's failure to make fact findings on every element of her fraud claim. Because under these circumstances we may imply findings that support the judgment if they are supported by evidence, we now turn to the record. Tex. R. Civ. P. 299; Burnside Air Conditioning & Heating, Inc. v. Young Corp., 113 S.W.3d at 893.

The record shows that, at the February 6, 2006 hearing, Myriam appeared before the trial court attempting to revoke the MSA, stating as her reason that

[t]here is a lot of money there that was not put on the table. And I was told that that money would not be put on the table because my husband had given a million dollars as a gift to his sister, and since it was a gift, it was not put on the table. It was explained to me.

 

Jorge's counsel then told the trial court that the account was discussed extensively in discovery prior to the mediation. Jorge's counsel stated that at the mediation, Myriam agreed to release her claim to the Merrill Lynch account in exchange for allocating several buildings to Myriam as her separate property, which Jorge confirmed. Jorge then testified under oath that the account was discussed "ad infinitum" and "ad nauseam." Because this constitutes some evidence that Myriam did not rely on Jorge's alleged failure to disclose the Merrill Lynch account, we may presume that the trial court found that Myriam did not rely on the purported nondisclosure, which is an element of her fraud claim.

Myriam's brief argues against only the implied findings of a duty to disclose and a breach of that duty. Myriam's brief, however, does not challenge the trial court's implied finding that Myriam did not rely on the alleged nondisclosure in settling the claim. Accordingly, we are required to affirm the trial court's judgment. Wisenbarger, 789 S.W.2d at 694.

Moreover, Myriam appears to argue that there is factually insufficient evidence to support a finding that Jorge disclosed the Merrill Lynch account. This contention is without merit. Myriam conceded in open court that the Merrill Lynch account was discussed at the mediation and that it was used as a bargaining chip. Additionally, Myriam filed a counter-claim against Jorge, prior to the mediation, raising allegations of fraud related to the very same Merrill Lynch account. The trial court's implied finding that Jorge disclosed the account is not so contrary to the overwhelming weight and preponderance of the evidence as to be clearly wrong or unjust, nor does the great preponderance of the evidence show that the account was not disclosed. We overrule Myriam's fifth and sixth issues.

IV. Conclusion

 

For all the foregoing reasons, we affirm the trial court's judgment enforcing the mediated settlement agreement.

 

__________________________

GINA M. BENAVIDES,

Justice

 

Memorandum Opinion delivered and filed

this the16th day of August, 2007.

1. We note that Myriam asserts on appeal that the appropriate standard of review for findings of fact is set forth in Zagorski v. Zagorski:

In a factual sufficiency review, we consider all of the evidence and must determine not whether the trier of fact could reasonably conclude that existence of the fact is more probable than not, as in ordinary civil cases, but whether the trier of fact could reasonably conclude that the existence of the fact is highly probable.

 

116 S.W.3d 309, 314 (Tex. App.-Houston [14th Dist.] 2003, pet. denied). Myriam misplaces her reliance on Zagorski. The burden of proof at trial in Zagorski was by "clear and convincing evidence," which is a higher standard than the instant case. Id. Thus, the standard of review at the appellate level was higher. Id. The clear and convincing standard is only applicable to limited situations, which do not include the instant case. See W. Wendell Hall, Standard of Review in Texas, 38 ST. MARY'S L.J. 47, 288 (2006) (enumerating the cases in which the "clear and convincing" standard applies).

2. We note that, on appeal, Jorge asserts that Myriam did not preserve the fraud complaint for review. We disagree. Myriam made it clear to the trial court at the first hearing that she thought she had been fraudulently induced into agreeing to the settlement. Tex. R. App. P. 33.1(a)(1)(A).