Janet Rae Loehr v. Roland Loehr

• Court: Court of Appeals of Texas
• Decided: August 28, 2009
• Docket: 13-08-00380-CV
• Status: Published

Opinion

NUMBER 13-08-00380-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

JANET RAE LOEHR, Appellant,

v.

ROLAND LOEHR, Appellee.

On appeal from the County Court at Law of Aransas County, Texas.

MEMORANDUM OPINION

Before Justices Yañez, Rodriguez, and Benavides Memorandum Opinion by Justice Rodriguez

Appellant Janet Rae Loehr challenges the final decree of divorce entered by the trial

court enforcing a mediated settlement agreement (MSA or agreement) between Janet and

appellee Roland Loehr. See TEX . FAM . CODE ANN . § 6.602 (Vernon 2006). By six issues,

Janet argues that: (1) the trial court erred in denying her motion for new trial because the

MSA was procured by fraud or, alternatively, was the product of mutual or unilateral mistake; and (2) the trial court lacked jurisdiction to divide the couple's corporate assets

and out-of-state real property. We affirm.

I. BACKGROUND

Janet filed for divorce from Roland in the spring of 2007. On January 28, 2008,

Janet and Roland spent the day negotiating a settlement agreement for their pending

divorce. Each party was represented by an attorney and an accountant during the

mediation process. At the end of the day, Janet and Roland and their attorneys signed the

MSA, which divided the couple's community and separate properties. The agreement

included, directly above the signature lines, an admonition reading and appearing as

follows: "THIS AGREEMENT IS NOT SUBJECT TO REVOCATION." By signing the MSA,

Janet and Roland agreed that "all related claims and controversies between them are

hereby settled in accordance" with the agreement and acknowledged that "the parties and

their counsel have throughly reviewed" the agreement and, "where necessary, modified

it to conform to the requirements of their agreement." The agreement was filed with the

trial court.

On March 7, 2008, Janet filed a motion for continuance and request for the court to

order the parties back to mediation or to submit a revised agreement. In her motion, Janet

asserted that she had been fraudulently induced into signing the MSA; Janet contended

that her accountant had been unprepared to assist her at the time of the mediation and

that certain properties were incorrectly categorized in the agreement as Roland's separate

property. Roland then filed a motion for entry of judgment on March 10, 2008, asking the

court to enforce the MSA.

The trial court held a hearing on the parties' motions on March 13, 2008. Roland

testified that the parties came to an agreement after a day-long mediation. He stated that

2 both parties were represented by attorneys and accountants. Roland generally agreed that

the negotiation had involved a process of "give and take" and that, although not completely

satisfied with the result, he signed the agreement at the end of the day. Janet testified that

she experienced some confusion during the negotiation regarding the identity of certain

land. However, Janet confirmed in her testimony that "[she] could tell which pieces of

property" were which. Janet further testified that she was dissatisfied with the performance

of her accountant and blamed him for her inability to recognize certain properties.

At the conclusion of that hearing, the trial court ordered the parties to submit briefing

regarding why the MSA should or should not be entered as the final judgment. Evidence

attached to Janet's briefing included her affidavit, in which Janet explained her rationale

for claiming that Roland had committed fraud. Janet explained that she and Roland had

two pieces of property in Woodbury County, Iowa. One of those properties was the

separate property of Roland; the couple referred to this property as the "Woodbury" tract.

The other was the separate property of Janet; the couple referred to this property as the

"Peterson" tract. In her affidavit, Janet contended that Roland misled her by labeling the

"Peterson" tract as "Rock Township, Woodbury" in the MSA. Janet also averred that, in

the MSA, Roland had listed certain community corporate assets as his separate property,

and because of this misplacement, she was not alerted as to this erroneous categorization.

On March 24, 2008, the court entered a final decree of divorce mirroring the terms

of the MSA.1 Janet filed a motion for new trial on April 23, 2008, which included another

affidavit that made essentially the same allegations as Janet's prior affidavit. She asked

1 The court entered findings of fact and conclusions of law. Janet does not challenge the trial court's findings and conclusions on appeal. However, because we have a com plete record before us, the trial court's findings are not conclusive. See J & J Marine, Inc. v. Le, 982 S.W .2d 918, 924 (Tex. App.–C orpus Christi 1998, no pet.).

3 the court for a new trial on her claim for recision or reformation of the MSA based on fraud,

mistake, or improper conversion of separate property. A hearing was held, and the court

denied her motion on June 3, 2008. This appeal ensued.

II. DISCUSSION

A. Mediated Settlement Agreement

By three issues, Janet argues that the trial court erred in refusing to rescind the

MSA and denying her motion for new trial.2 In her second issue, Janet contends that the

agreement should have been rescinded because her signature was procured by Roland's

fraud. In her third and fourth issues, Janet challenges the enforceability of the agreement

on the basis of mutual or unilateral mistake, respectively. She asks this Court to reverse

the judgment of the trial court and remand for a new trial.

1. Standard of Review and Applicable Law

We review the trial court's denial of a motion for new trial for abuse of discretion.

In re R.R., 209 S.W.3d 112, 114 (Tex. 2006); Ricks v. Ricks, 169 S.W.3d 523, 526 (Tex.

App.–Dallas 2005, no pet.). A court abuses its discretion if it acts arbitrarily or

unreasonably or without reference to guiding rules and principles. Ricks, 169 S.W.3d at

526; see also Olvera v. Olvera, No. 01-07-00231-CV, 2008 WL 598305, at *4 (Tex.

App.–Houston [1st Dist.] Mar. 6, 2008, no pet.) (mem. op.).

Under section 6.602 of the family code, an MSA is immediately binding on the

parties if: (1) a prominently displayed (e.g. boldfaced, capital letters, or underlined)

statement provides that the agreement "is not subject to revocation"; (2) the agreement is

signed by the parties; and (3) the agreement is signed by the parties' attorneys who are

2 W e address Janet's second, third, and fourth issues before her first issue because our decision on those issues will guide our decision on the first. See T EX . R. A PP . P. 47.1.

4 present at the time of signing. TEX . FAM . CODE. ANN . § 6.602(b); see Cayan v. Cayan, 38

S.W.3d 161, 165 (Tex. App.–Houston [14th Dist.] 2000, pet. denied) (holding that section

6.602 creates an option for divorcing parties whereby their agreement is binding at the time

of execution rather than at the time final judgment is rendered). "If a mediated settlement

agreement meets [those] requirements[,] . . . a party is entitled to judgment on the

mediated settlement agreement notwithstanding Rule 11 . . . or another rule of law." TEX .

FAM . CODE. ANN . § 6.602(c); see also Herszage v. Herszage, No. 13-06-00257-CV, 2007

WL 2323979, at *4-5 (Tex. App.–Corpus Christi Aug. 16, 2007, no pet.) (mem. op.). An

agreement that meets the requirements of section 6.602 is "more binding than a basic

written contract." In re Joyner, 196 S.W.3d 883, 889 (Tex. App.–Texarkana 2006, pet.

denied). However, a trial court need not enforce an MSA "if it is illegal in nature or was

procured by fraud, duress, coercion, or other dishonest means." Id. at 890.

2. Fraud

Janet claims that Roland fraudulently induced her into signing their MSA by

misrepresenting the nature of certain pieces of property listed on the inventory attached

to their agreement. A fraudulent inducement claim requires evidence that: (1) Roland

made a material misrepresentation that was false; (2) Roland knew the misrepresentation

was false or asserted it without knowledge of its truth; (3) Roland knew Janet intended to

act upon the misrepresentation; (4) the misrepresentation was, in fact, relied upon; and (5)

such reliance caused Janet injury. See In re FirstMerit Bank, 52 S.W.3d 749, 758 (Tex.

2001); see also Olvera, 2008 WL 598305, at *4 (addressing fraudulent inducement in the

context of a section 6.602 MSA).

Janet asserted in her affidavits that Roland intentionally misled her by

mischaracterizing certain property in the MSA. However, Janet's speculations in her

5 affidavits as to Roland's intentions do not prove he made a material misrepresentation that

he knew was false. See Ricks, S.W.3d at 527 (concluding that wife's bare assertions that

the market value of certain marital property was incorrectly recorded in the MSA did not

prove that husband misrepresented the true value of the property). In fact, Janet testified

at the March 13, 2008 hearing that she was able to identify the properties and that she

blamed her accountant for any confusion she experienced regarding the identity of the

properties. We conclude that Janet presented no evidence that Roland misrepresented

the nature of the properties in the MSA with the intention that Janet act on it to her

detriment.

Regardless, by pursuing a section 6.602 agreement, Janet and Roland were

removing their divorce from traditional settlement procedures. See In re Joyner, 196

S.W.3d at 889 ("[T]he purpose of mediation [under section 6.602] is to let parties settle

their property as they see fit, keeping those matters out of the courtroom."); Cayan, 38

S.W.3d at 166 (reasoning that the Legislature created a "procedural shortcut" by enacting

section 6.602). The trial court was entitled to enforce Janet and Roland's MSA without

regard to whether "the terms of the agreement [were] just and right." Cayan, 38 S.W.3d

at 166. When presented with a valid, binding MSA, a court cannot substitute its own

judgment for that of the parties and modify the agreement. See In re Joyner, 196 S.W.3d

at 890-91. Here, the court had before it an agreement signed by both parties and their

attorneys that contained clear and conspicuous language stating the agreement was

irrevocable. By signing the agreement, Janet and Roland affirmed that they and their

counsel had thoroughly reviewed the contents and agreed that all of their claims were

settled by the agreement. We will not reward Janet with "a reprieve from the agreement"

merely because she failed to exercise due diligence in reviewing the terms and conditions

6 before signing her name to the MSA. Cayan, 38 S.W.3d at 167; see also Herszage, 2007

WL 2323979, at *6 (holding that parties to an MSA must protect themselves by reviewing

the agreement before signing and refusing to revoke an MSA merely because the wife

failed to adequately inspect the terms). Because Janet and Roland's agreement met all

the requirements for a binding MSA and because Janet did not prove that Roland

fraudulently induced her assent to the agreement, the trial court did not abuse discretion

in enforcing the MSA. See TEX . FAM . CODE ANN . § 6.602(b); In re Joyner, 196 S.W.3d at

889. Accordingly, Janet's second issue is overruled.3

3. Mistake

In her third and fourth issues, Janet argues that the trial court erred in enforcing the

MSA because it was the result of mutual or unilateral mistake. However, Janet provides

us with no authority, and we find none binding on this Court, applying the contract doctrine

of mistake to section 6.602 agreements. Janet and Roland's agreement under section

6.602 was "more binding than a basic written contract." In re Joyner, 196 S.W.3d at 889.

Absent fraud, see Cayan, 38 S.W.3d at 167, "nothing either party could have done would

have modified or voided the [MSA] once everyone had signed it." In re Joyner, 196

S.W.3d at 889. Therefore, we conclude that the trial court did not abuse its discretion in

denying Janet's motion for new trial on the basis of mistake in the MSA. Janet's third and

fourth issues are overruled.

3 In her first issue, Janet claim s that the agreem ent violated fam ily code section 7.002 by awarding Janet's separate property to Roland. See T EX . F AM . C OD E A N N . § 7.002(b)(1) (Vernon 2006). However, because we have determ ined that the MSA was not invalidated by fraud, the trial court here did not err in enforcing the term s of Janet and Roland's irrevocable MSA. A court cannot m odify the term s of a valid, binding MSA and is not required to assure that the division of property in the MSA is just and right. See In re Joyner, 196 S.W .3d 883, 889, 890-91 (Tex. App.–Texarkana 2006, pet. denied). Therefore, we also overrule Janet's first issue because the court appropriately divided the property according to the term s of the MSA.

7 B. Jurisdiction

By her fifth issue, Janet argues that the trial court lacked subject-matter jurisdiction

to divide the couple's out-of-state real property. In her sixth issue, Janet contends that the

court lacked jurisdiction to divide the couple's corporate assets—that the court was only

permitted to divide shares of stock.

1. Standard of Review

Whether a court has subject-matter jurisdiction is a question of law and is subject

to de novo review. Tex. Dep't of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 226 (Tex.

2004).

2. Out-of-State Property; Corporate Assets

Citing Miller v. Miller, Janet argues that Texas trial courts are not vested with

jurisdiction to adjudicate title to land in another state. 715 S.W.2d 786, 788 (Tex.

App.–Austin 1986, writ ref'd n.r.e). However, the court here engaged in no such

adjudication. The trial court merely enforced an agreement between the parties that was

immediately binding when executed. See Cayan, 38 S.W.3d at 165; In re Joyner, 196

S.W.3d at 890-91 (holding that a trial court is without discretion to modify a valid, binding

MSA). Moreover, even in the absence of a section 6.602 MSA, Texas courts have

jurisdiction under the family code to award property in a divorce wherever that property is

situated. See TEX . FAM . CODE ANN . § 7.002(b) (Vernon 2006) (emphasis added). As such,

the trial court did not err in enforcing Janet and Roland's MSA that divided certain out-of-

state property.

With regard to her sixth issue, Janet claims that, because a corporation is an entity

in itself separate from its shareholders, the assets of a corporation do not belong to the

spouses who own the corporation as community property. Generally citing McKnight v.

8 McKnight, Janet argues that this separate legal identity prevents a trial court from dividing

corporate assets and that, rather, a court is only permitted to divide the spouses' shares

of stock. 543 S.W.2d 863 (Tex. 1976). Nevertheless, Janet points us to no law creating

an exception to the immediately binding nature of a valid section 6.602 MSA for corporate

assets. See Cayan, 38 S.W.3d at 165. The family code provides that a party to a properly

executed MSA is entitled to judgment on the agreement notwithstanding any other rule of

law. See TEX . FAM . CODE ANN . § 6.602(c). Here, Janet and Roland entered into a binding

MSA; Roland was entitled to enforce that agreement, and the trial court did not err in doing

so. See id.; see also Herszage, 2007 WL 2323979, at *5-6 (enforcing an MSA where the

evidence showed that the parties knowingly entered into an irrevocable agreement).

It is important to note that Janet provided this Court with no authority, and, again,

we find none, addressing these jurisdictional issues in the context of a section 6.602 MSA.

Without more, we are not persuaded that the trial court was without jurisdiction to enforce

the binding, irrevocable agreement between Janet and Roland. We overrule Janet's fifth

and sixth issues.

III. CONCLUSION

The judgment of the trial court is affirmed.

NELDA V. RODRIGUEZ Justice

Memorandum Opinion delivered and filed this 28th day of August, 2009.