Diane Lynne Hall v. Jack Wilton Hall--Appeal from 115th District Court of Upshur County

NO. 12-03-00417-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

DIANE LYNNE HALL, APPEAL FROM THE 115TH

APPELLANT

V. JUDICIAL DISTRICT COURT OF

JACK WILTON HALL,

APPELLEE UPSHUR COUNTY, TEXAS

MEMORANDUM OPINION

Diane Lynne Hall appeals the trial court s entry of a final divorce decree and judgment awarding sanctions to Robert R. Foster. // Diane Hall raises two issues on appeal. We reverse and render in part and affirm in part.

Background

Jack Hall filed divorce proceedings against Diane Hall on April 25, 2003. The couple had no children together. Diane Hall filed a general denial. On September 8, 2003, the parties participated in a mediation of the case. As a result, Jack Hall and Diane Hall entered into a mediated settlement agreement dividing their respective interests in their community property. Both Jack Hall, Diane Hall, and their respective attorneys signed the agreement, which stated, in pertinent part, as follows:

THIS MEDIATED SETTLEMENT AGREEMENT IS BINDING ON THE PARTIES HERETO AND NOT SUBJECT TO REVOCATION, REPUDIATION OR WITHDRAWAL OF CONSENT. THIS AGREEMENT IS BINDING WHETHER OR NOT FILED WITH OTHER PLEADINGS IN THIS CAUSE. THIS MEDIATED SETTLEMENT AGREEMENT IS BINDING ON THE PARTIES HERETO PURSUANT TO SECTION 153.0071 OF THE TEXAS FAMILY CODE. THIS MEDIATED SETTLEMENT AGREEMENT IS BINDING ON THE PARTIES HERETO PURSUANT TO SECTION 154.071 OF THE TEXAS CIVIL PRACTICES AND REMEDIES CODE AND PURSUANT TO RULE 11 OF THE TEXAS RULES OF CIVIL PROCEDURE.

Following mediation, Diane Hall, by and through her trial counsel, filed a motion to repudiate the mediated settlement agreement. Jack Hall sought to enforce the settlement agreement by filing a motion for entry of a final decree of divorce and, further, moved for sanctions against Diane Hall related to her attempt to repudiate the agreement. Thereafter, the trial court signed and entered a final divorce decree, in which it approved the terms of the mediated settlement agreement between the parties and divided the community property in accord with the terms of the parties agreement.

Diane Hall filed a motion for new trial. Subsequently, the trial court granted Jack Hall s motion for sanctions and signed a judgment ordering Diane Hall to pay one thousand dollars in attorney s fees incurred by Jack Hall to Robert R. Foster. Diane Hall filed a request for findings of fact and conclusions of law. The trial court did not file written findings of fact and conclusions of law. // Diane Hall did not file notice of past due findings of fact and conclusions of law. Diane Hall s motion for new trial was overruled by operation of law. This appeal followed.

Repudiation of a Mediated Settlement Agreement

In her first issue, Diane Hall argues that the trial court misconstrued the settlement agreement as irrevocable pursuant to Texas Family Code, section 6.602, and that it was, in fact, a revocable agreement in accordance with Texas Civil Practices and Remedies Code, section 154.071.

In a final decree of divorce, a trial court is generally required to order a division of the community and quasi-community property that the court deems just and right. See Tex. Fam. Code Ann. 7.001, 7.002 (Vernon 1998 & Supp. 2004 05); Cayan v. Cayan, 38 S.W.3d 161, 164 (Tex. App. Houston [14th Dist.] 2001, pet. denied). Where parties enter into an agreement concerning the division of their property, the agreement may be revised or repudiated before rendition of the divorce unless the agreement is binding under another rule of law. See Tex. Fam. Code Ann. 7.006(a) (Vernon 1998); Cayan, 38 S.W.3d at 164. If the court finds that the terms of a property division agreement are just and right, those terms are binding on the court; if not, the court may request the parties to submit a revised agreement or may set the case for a contested hearing. See Tex. Fam. Code Ann. 7.006(b), (c) (Vernon 1998); Cayan, 38 S.W.3d at 164 65. Once a court renders judgment on a settlement agreement, consent to the agreement cannot be revoked. See Tex. Fam. Code Ann. 7.006(a); Cayan, 38 S.W.3d at 165. Texas Family Code, section 6.602 serves as an exception to the aforementioned provisions. See Cayan, 38 S.W.3d at 166. Section 6.602 provides that a mediated settlement agreement is binding on the parties thereto if it (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. See Tex. Fam. Code Ann. 6.602(b) (Vernon Supp. 2004 05). If the mediated settlement agreement meets such requirements, a party is entitled to judgment on the agreement notwithstanding other rules of law. See Tex. Fam. Code Ann. 6.602(c) (Vernon Supp. 2004 05). When the Legislature enacted Section 6.602, it definitely and deliberately created a procedural shortcut for enforcement of mediated settlement agreements in divorce cases. Cayan, 38 S.W.3d at 166.

In the case at hand, the agreement was signed by Jack Hall, Diane Hall, and their respective attorneys. Furthermore, the agreement provides that it is binding and not subject to revocation, repudiation[,] or withdrawal of consent. The statement that the agreement was not subject to revocation was prominently displayed beginning at the middle of the fourth page of the document, just above where the parties and their respective attorneys were to sign. Moreover, the statement was displayed in capital letters, boldfaced type, and underlined. We conclude that the document meets the requirements of Section 6.602.

Diane Hall first argues that in order for a mediation to be categorized as a Section 6.602 Agreement, it must explicitly state that it is signed pursuant to Section 6.602. Diane Hall cites no authority in support of such a contention, nor are we aware of the existence of any such rule of law. Notably, there is no reference to such a requirement anywhere in Section 6.602. Id.

Diane Hall next argues that the explicit reference to Texas Civil Practice and Remedies Code, section 154.071 causes that section to govern instead of 6.602. // Yet, Section 6.602 states that where an agreement meets the aforementioned requirements, a party is entitled to judgment on the agreement notwithstanding Rule 11, Texas Rules of Civil Procedure, or another rule of law. See Tex. Fam. Code Ann. 6.602(c) (emphasis added). Such language has been held to preclude applicability of other statutes when interpreted in light of Texas Family Code, section 153.0071, which contains identical language to Section 6.602, but applies in disputes concerning the parent-child relationship. See Alvarez v. Reisner, 958 S.W.2d 232, 234 (Tex. App. Texarkana 1997, pet. denied); compare Tex. Fam. Code Ann. 153.0071(d) (Vernon 2002) with Tex. Fam. Code Ann. 6.602. Thus, we conclude that the matter is not governed by Section 154.071.

Diane Hall further argues that in Cayan, the court stated that a section 6.602 agreement cannot be imposed on parties against their wishes and that parties remain free to enter mediated settlement agreements that do not fall within section 6.602 and, in fact, must take affirmative steps to qualify for section 6.602 treatment. Id. at 166. We do not disagree. Both parties to the instant agreement were free to enter into mediated settlement agreements not governed by 6.602. Yet, when both parties and their respective attorneys signed the agreement, in which was prominently displayed with thrice the requisite emphasis, the words THIS MEDIATED SETTLEMENT AGREEMENT IS ... NOT SUBJECT TO REVOCATION[,] they undertook the appropriate, affirmative steps to ensure that their agreement qualified for Section 6.602 treatment, notwithstanding another rule of law. See Tex. Fam. Code Ann. 6.602(b), (c).

Diane Hall finally argues that even if the agreement is determined to be governed by Section 6.602, the trial court nonetheless abused its discretion by enforcing the agreement because it excluded substantial community assets, which Jack Hall did not disclose, and was obtained by fraud. In support of her argument, she cites Boyd v. Boyd, 67 S.W.3d 398 (Tex. App. Fort Worth 2002, no pet.). In Boyd, the trial court held that a mediated settlement agreement under Section 6.602 can be held unenforceable where one spouse, who has a duty to disclose, intentionally withholds information about substantial marital assets. Id. at 405.

In Boyd, although Mrs. Boyd had propounded discovery requests upon Mr. Boyd, such requests were not due at the time the parties entered the mediated settlement agreement. Id. at 404. In the case at hand, Diane Hall did not serve Jack Hall with any discovery requests. In Boyd, the trial court determined that Mr. Boyd s duty to disclose arose from a statement in the mediated settlement agreement stating that [e]ach party represents that they have made a fair and reasonable disclosure to the other of the property and financial obligations known to them. Id. No such promise to disclose is contained in the agreement in the instant case or is otherwise contained in the record. Thus, we conclude that the instant case is distinguishable from Boyd as Jack Hall had no duty to disclose.

Diane Hall further contends that Jack Hall procured her acquiescence to the agreement by fraud in that he deliberately concealed the true value of their home and surreptitiously withdrew money from his 401(k) account prior to the mediation. However, Diane Hall has not specifically directed us to any portion of the record where we may find evidence that Jack Hall either surreptitiously withdrew money from his 401(k) prior to the mediation or that he intentionally or knowingly misrepresented the appraised value of their house at or before the time the agreement was executed. // Therefore, Diane Hall has waived the issue on appeal. See Tex. R. App. P. 38.1(h); Sisters of Charity of the Incarnate Word v. Gobert, 992 S.W.2d 25, 31 (Tex. App. Houston [1st Dist.] 1997, no pet.). Diane Hall s first issue is overruled.

Motion for Sanctions

In her second issue, Diane Hall argues that the trial court erred in granting Jack Hall s motion for sanctions. Imposing sanctions is a matter left to the sound discretion of the trial court. See Koslow s v. Mackie, 796 S.W.2d 700, 704 (Tex. 1990). We will set aside a trial court s order imposing sanctions only on a showing of a clear abuse of discretion. Id. The test for abuse of discretion is whether the trial court acted without reference to any guiding rules and principles, or equivalently, whether under all the circumstances of the particular case, the trial court s action was arbitrary or unreasonable. Id.

Texas Rule of Civil Procedure 13 provides, in pertinent part, as follows:

Attorneys or parties who shall bring a fictitious suit as an experiment to get an opinion of the court, or who shall file any fictitious pleading in a cause for such a purpose, or shall make statements in pleading which they know to be groundless and false, for the purpose of securing a delay of the trial of the cause, shall be held guilty of a contempt. If a pleading, motion or other paper is signed in violation of this rule, the court, upon motion or upon its own initiative, after notice and hearing, shall impose an appropriate [sanction] available under Rule 215-2b, upon the person who signed it, a represented party, or both.

Courts shall presume that pleadings, motions, and other papers are filed in good faith. No sanctions under this rule may be imposed except for good cause, the particulars of which must be stated in the sanction order. Groundless for purposes of this rule means no basis in law or fact and not warranted by good faith argument for the extension, modification, or reversal of existing law.

Tex. R. Civ. P. 13. Texas Rule of Civil Procedure 215.2(b) provides for monetary sanctions for reasonable expenses, including attorney fees, unless other circumstances make an award of expenses unjust. See Tex. R. Civ. P. 215.2(b)(8); Glass v. Glass, 826 S.W.2d 683, 688 (Tex. App. Texarkana 1992, no writ). A court must presume that pleadings, motions, and other papers are filed in good faith, and the burden to overcome this presumption rests upon the movant. See GTE Comm. Sys. Corp. v. Tanner, 856 S.W.2d 725, 731 (Tex. 1993). Where, as here, a party is sanctioned, the party must be implicated for his unique conduct separate from the attorney s representation, while the attorney may be generally liable for each groundless pleading. See Bradt v. Sebek, 14 S.W.3d 756, 769 (Tex. App. Houston [1st Dist.] 2000, pet. denied); Glass v. Glass, 826 S.W.2d 683, 687 (Tex. App. Texarkana 1992, writ denied).

In its findings of fact and conclusions of law related to Jack Hall s motion for sanctions, the trial court stated as follows:

1. The mediation that was conducted in this case was set up by agreement between the attorneys and the parties at the request of Diane Lynne Hall.

2. Respondent, Diane Lynne Hall, knew of the amount of the valuation on the residence of which she now complains prior to the mediation and had in her possession the same appraisal relied upon by petitioner at mediation.

3. Respondent, Dianne Lynne Hall, only sought to create evidence after the mediation, which evidence did not exist prior to the mediation and is not credible to vary the information provided by both parties at the time of mediation.

4. The Motion to Repudiate Mediation Agreement and Motion for Continuance filed on the day of trial were filed without notice to counsel for Petitioner, Jack Wilton Hall, and were filed in bad faith solely at the insistence and instigation of Respondent, Dianne Lynne Hall.

5. Diane Lynne Hall had no reasonable basis at law or in fact for the filing of the documents created at her insistence, and by her conduct necessitated the resulting Motion for Entry of Final Decree of Divorce and Motion for Sanctions filed by Petitioner, Jack Wilton Hall.

6. Petitioner, Jack Wilton Hall, did not commit fraud during the mediation and made no material misrepresentations to Respondent, Diane Lynne Hall.

7. Much of the testimony of Respondent, Dianne Lynne Hall, is not credible.

Our review of the record does not reveal evidence of sanctionable conduct by Diane Hall that can be separated from her attorney s representation. See Bradt, 14 S.W.3d at 769. At the hearing on Jack Hall s motion for sanctions, Diane Hall s attorney testified that, following the mediation, Diane Hall was no longer willing to follow the mediated settlement and that he was going to have to file a motion to repudiate the settlement based on her request. Diane Hall s attorney further testified that he thought there was a basis for filing the motion to repudiate the settlement agreement if there was evidence of a misrepresentation by Jack Hall concerning the value of the house. Diane Hall testified that it was her idea to attempt to repudiate the settlement agreement, but acknowledged her attorney had done the best he can to try to get [the] agreement set aside.

Although the record reflects that Diane Hall asked her attorney to repudiate the settlement agreement, her attorney drafted and filed the motion to repudiate. Moreover, it is apparent from her attorney s testimony that he believed the motion had merit. See also Tex. R. Civ. P. 13 (the signature of an attorney to a motion constitutes a certificate by the attorney that he has read the motion and, to the best of his knowledge, information, and belief, formed after reasonable inquiry, the instrument is not groundless and brought in bad faith or for the purpose of harassment). Diane Hall did not sign and file the motion to repudiate the mediated settlement agreement; her attorney did. See, e.g., Glass, 826 S.W.2d at 687 (where client sanctioned for pleadings filed and signed by her counsel in violation of Rule 13, court held that a party should not be punished for counsel s conduct unless the party is implicated apart from having entrusted its legal representation to counsel). Therefore, since the record does not support that Diane Hall engaged in unique conduct separate from her attorney s representation, we hold that the trial court erred in granting Jack Hall s motion for sanctions against Diane Hall alone. Diane Hall s second issue is sustained.

Conclusion

We have sustained Diane Hall s second issue and overruled her first issue. We reverse the trial court s judgment awarding attorney s fees to Robert R. Foster and render judgment that Robert R. Foster take nothing. We affirm the trial court s entry of the final decree of divorce.

JAMES T. WORTHEN

Chief Justice

Opinion delivered April 29, 2005.

Panel consisted of Worthen, C.J., Griffith, J. and DeVasto, J.

(PUBLISH)