Court Opinion

ID: 2855568
Source: CourtListenerOpinion
Date Created: 2015-09-04 18:45:36.367213+00
Date Added: 2024-06-11T09:19:15.117058
License: Public Domain

COURT OF APPEALS
                         SECOND DISTRICT OF TEXAS
                              FORT WORTH

                               NO. 2-08-267-CV

IN THE INTEREST OF J.P., A CHILD

                                    ------------

        FROM THE 233RD DISTRICT COURT OF TARRANT COUNTY

                                    ------------

                                   OPINION

                                    ------------

                                 I. Introduction

      In two issues, Appellant, Office of the Attorney General of Texas (the

“AG”), appeals the trial court’s judgment discharging Appellee Joseph Poplett

from his child support arrearages based on a mistake in a release of lien filed by

the AG. We reverse and remand.

                       II. Factual and Procedural History

      Joseph and Jamie Poplett had one child, two-and-a-half-year-old J.P., at

the time of their divorce in 1988. At the conclusion of the divorce proceedings,

the trial court signed an agreed decree of divorce containing the following
orders: (1) Jamie is appointed sole managing conservator of J.P.; (2) Joseph

is appointed possessory conservator of J.P.; (3) Joseph is to pay $33 per week

in child support; (4) Joseph’s employer is to withhold from Joseph’s disposable

earnings the amount owed for J.P.’s support; and (5) all child support payments

are to be made through the Tarrant County Child Support Office, where they

will then be remitted to Jamie for J.P.’s support.1

      In May 2007, Joseph filed a “Motion to Confirm Child Support Arrearage,

Motion to Clarify Release of Lien and Motion for Offset.” He attached to the

motion a “Release of Child Support Lien” (the “Release”) dated November 23,

2005, that had been signed by Stephen McKenna, a child support officer with

the AG. The Release stated, in pertinent part, that:

      In accordance with Texas Family Code § 157.322,2 this matter has
      been satisfied pursuant to the child support lien described below.
      This release constitutes a complete release of any claim the Office
      of the Attorney General of the State of Texas has under this
      specific child support lien, including but not limited to account
      number [].3

      1
      … The State later filed a notice redirecting payments to the Texas Child
Support Disbursement Unit.
      2
       … Section 157.322 of the Texas Family Code states, in pertinent part,
that “[o]n payment in full of the amount of child support due, together with any
costs and reasonable attorney’s fees, the child support lien claimant shall
execute and deliver to the obligor or the obligor’s attorney a release of the child
support lien.” Tex. Fam. Code Ann. § 157.322(a) (Vernon 2008).
      3
          … The account number has been omitted for confidentiality purposes.

                                        2
      In response, the AG filed a motion to confirm support arrearages,

asserting that, as of August 22, 2007, Joseph owed more than $47,000 in

support arrearages and asking the trial court to enter a judgment reflecting the

arrearages. The AG attached a copy of the divorce decree and a schedule of

Joseph’s missed child support payments to its motion.

      During a hearing on the parties’ motions, the trial court found that “the

[Release] is not ambiguous. . . . [I]t purports to release not only a lien but the

entire obligation by its wording.” After expressing its preliminary opinion, the

trial court ordered the parties to submit further written arguments, and it

vacated a previously filed administrative writ of withholding.

      The AG filed its brief, asserting that the Release was ineffective to

discharge Joseph’s child support obligation because (1) the Release only applied

to the specific bank account described in the Release; (2) there was a lack of

consideration; and (3) Jamie alone had the authority to discharge Joseph’s

obligation. Joseph responded, arguing that the Release was unambiguous and

therefore constituted a complete release and that the AG did, in fact, have the

authority to enter the Release. After considering the parties’ arguments, the

trial court signed a judgment discharging Joseph’s alleged arrearages. In its

judgment, the trial court described the Release as a “contract” and an

“agreement,” labeled the AG’s arguments as “preposterous” and without good

                                        3
faith, and took notice of the AG’s “astounding action of issuing an

administrative writ of withholding to collect monies that were in dispute and

pending.”

      The AG timely filed a motion for new trial, denying that it had entered

into an agreement with Joseph, contending that it had filed the Release only

because Joseph’s bank account had been closed, and asserting that, even if the

Release unambiguously discharged Joseph’s arrearages, a mistake of fact

precluded the document from having a discharging effect. The AG attached to

its motion for new trial an affidavit by McKenna, in which McKenna explained

that (1) Joseph had not made any child support payments between September

1997 and December 2005 and therefore there was no consideration for the

Release in November 2005; (2) the Release “was done because the account at

the bank was closed”; and (3) the Release “incorrectly stated the lien was being

released under Texas Family Code Section 157.322, when it should have

referred to Texas Family Code Section 157.321.” 4 After a hearing on the AG’s

      4
          … Section 157.321 of the Texas Family Code states that

              [a] child support lien claimant may at any time release
              a lien on all or part of the property of the obligor or
              return seized property, without liability, if assurance of
              payment is considered adequate by the claimant or if
              the release or return will facilitate the collection of the
              arrearages. The release or return may not operate to

                                          4
motion for new trial, the trial court did not rule on it, and the motion was

overruled by operation of law.5 This appeal followed.6

                              III. Legal Sufficiency

      In its first issue, the AG challenges the legal sufficiency of the evidence

to support the Release. Specifically, the AG asserts that the evidence is legally

insufficient to show that (1) the Release satisfied the elements of a contract

and (2) the AG had the authority to discharge Joseph’s child support obligation.

            prevent future action to collect from the same or other
            property owned by obligor.

Tex. Fam. Code Ann. § 157.321 (Vernon 2008).
      5
        … During the hearing, McKenna testified as to his employment with the
AG, his interaction with financial institutions generally and Joseph’s bank
specifically, and his signing of the Release based on the closing of Joseph’s
account. The trial court concluded that “the [AG had] made a mistake. . .[a]nd
. . . that the [AG] will fight until hell freezes over to prove that they’re not
wrong even when they know that they are. . . . [I]f the [AG] wants to continue
this course of bad faith, I will allow the [AG] to do so, and I will react
appropriately.”
      6
       … Before the AG filed its notice of appeal, the trial court filed findings of
fact and conclusions of law. The trial court found, among other things, that (1)
Jamie had requested the AG’s services to collect child support from Joseph and
that she had assigned the right to receive child support to the AG; (2) Jamie’s
request for the AG’s services authorized the AG to file the Release, and (3) the
Release was unambiguous. The trial court concluded that Jamie “entered into
a full and final release of [Joseph’s] child support obligation through her
authorized agent, the Attorney General of the State of Texas.”

                                         5
A. Standard of Review

      We may sustain a legal sufficiency challenge only when (1) the record

discloses a complete absence of evidence of a vital fact; (2) the court is barred

by rules of law or of evidence from giving weight to the only evidence offered

to prove a vital fact; (3) the evidence offered to prove a vital fact is no more

than a mere scintilla; or (4) the evidence establishes conclusively the opposite

of a vital fact. Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W.2d 328, 334

(Tex. 1998), cert. denied, 526 U.S. 1040 (1999); Robert W. Calvert, "No

Evidence" and "Insufficient Evidence" Points of Error, 38 Tex. L. Rev. 361,

362–63 (1960). In determining whether there is legally sufficient evidence to

support the finding under review, we must consider evidence favorable to the

finding if a reasonable factfinder could and disregard evidence contrary to the

finding unless a reasonable factfinder could not. Cent. Ready Mix Concrete Co.

v. Islas, 228 S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson, 168
S.W.3d 802, 807, 827 (Tex. 2005).

      Anything more than a scintilla of evidence is legally sufficient to support

the finding. Cont’l Coffee Prods. Co. v. Cazarez, 937 S.W.2d 444, 450 (Tex.

1996); Leitch v. Hornsby, 935 S.W.2d 114, 118 (Tex. 1996).            When the

evidence offered to prove a vital fact is so weak as to do no more than create

a mere surmise or suspicion of its existence, the evidence is no more than a

                                       6
scintilla and, in legal effect, is no evidence. Kindred v. Con/Chem, Inc., 650
S.W.2d 61, 63 (Tex. 1983). More than a scintilla of evidence exists if the

evidence furnishes some reasonable basis for differing conclusions by

reasonable minds about the existence of a vital fact. Rocor Int’l, Inc. v. Nat’l

Union Fire Ins. Co., 77 S.W.3d 253, 262 (Tex. 2002). Any ultimate fact may

be proved by circumstantial evidence. Russell v. Russell, 865 S.W.2d 929,

933 (Tex. 1993). A fact is established by circumstantial evidence when the

fact may be fairly and reasonably inferred from other facts proved in the case.

Id. However, to withstand a legal sufficiency challenge, circumstantial evidence

still must consist of more than a scintilla. Blount v. Bordens, Inc., 910 S.W.2d
931, 933 (Tex. 1995).

B. Validity of the Release

      The AG argues that, because Joseph asserted the affirmative defense of

release, it was Joseph’s burden to show that the Release was valid by proving

up the elements of a contract.7

      7
        … The AG first raised this issue in its motion for new trial. However,
because this is an appeal from a bench trial, a complaint regarding legal
insufficiency may be raised for the first time on appeal. See Tex. R. App. P.
33.1(d); Tex. R. Civ. P. 324(a)–(b).

                                       7
      1. Applicable Law

      A release is a contract subject to the rules of contract construction.

Williams v. Glash, 789 S.W.2d 261, 264 (Tex. 1990). Accordingly, in order

to establish the affirmative defense of release, the party asserting the defense

of release is required to prove the elements of a contract. Vera v. N. Star

Dodge Sales, Inc., 989 S.W.2d 13, 17 (Tex. App.—San Antonio 1998, no

pet.). A release that is valid on its face, however, constitutes prima facie proof

of payment; the burden of proving otherwise is on the party who denies its

validity. Martin v. Farmers’ Nat’l Bank of Hillsboro, 294 S.W. 240, 241 (Tex.

Civ. App.—Waco 1927, no writ); see also Deer Creek Ltd. v. N. Am. Mortgage

Co., 792 S.W.2d 198, 201 (Tex. App.—Dallas 1990, no writ) (“Once the

release was properly pleaded, the burden then shifted to appellants to produce

evidence that raised a fact issue as to a legal justification for setting aside the

release.”).

      2. Analysis

      Here, McKenna, an agent of the AG, signed and acknowledged the

Release, and the AG itself asserted in its motion for new trial that it does not

dispute the trial court’s finding that the Release states that the child support

obligation was paid in full. Further, the Release provides that under section

157.322 of the family code the lien has been satisfied. Section 157.322 states

                                        8
that a release will be executed when the underlying child support obligation has

been paid in full.   See Tex. Fam. Code Ann. §157.322(a).           The Release,

therefore, on its face, purports to discharge Joseph of the full amount of his

arrearages and is a prima facie rebuttal to the AG’s claim that Joseph owed

more than $47,000 in arrearages. See Deer Creek Ltd., 792 S.W.2d at 201;

Martin, 294 S.W. at 241. Thus, because the Release is valid on its face, the

burden shifted to the AG to produce evidence that would result in the Release

being set aside. See, e.g., Williams, 789 S.W.2d at 264 (recognizing that a

release is subject to avoidance on grounds such as fraud or mistake); see also

Tamez v. Sw. Motor Transp., Inc., 155 S.W.3d 564, 570–71 (Tex. App.—San

Antonio 2004, no pet.) (recognizing lack of consideration as an affirmative

defense to a release that is valid on its face). 8 Because the Release is valid on

its face, and because the burden was on the AG to produce evidence

challenging the validity of the Release, we overrule this portion of the AG’s first

issue.

         8
       … Although the AG asserted lack of consideration in its original
pleadings, it did not raise this on appeal. The AG does raise on appeal the
defense of mistake as grounds for setting aside the Release; however, for the
reasons explained below, the defense of mistake is not properly before the
court.

                                        9
C. Lack of Authority

      The AG also argues that Jamie alone had the authority to release

Joseph’s full child support obligation and that there is insufficient evidence to

show that Jamie assigned her rights to the AG. In support of its argument, the

AG directs our attention to section 231.002(i) of the family code, which states

that the AG only has the authority to release all or a portion of arrearages if

they are (1) confirmed in a judgment and (2) assigned to the AG under section

231.104(a) of the family code. The AG contends that, because the arrearages

at issue in this appeal were neither confirmed in a judgment nor assigned to the

AG, the AG lacked the authority to release the entire obligation.

      The trial court, on the other hand, found that Jamie had “requested

services of the [AG] in collecting child support . . . . This request included an

assignment of her right to receive and give receipt for child support . . . [and]

. . . expressly or impliedly authorized the [AG] to enter into the Release . . . .”

      1. Applicable Law

      An agent’s authority to act on behalf of a principal depends on some

communication by the principal either to the agent (actual or express authority)

or to the third party (apparent or implied authority).     Gaines v. Kelly, 235
S.W.3d 179, 182 (Tex. 2007). Apparent authority is based on estoppel arising

                                        10
      either from a principal knowingly permitting an agent to hold
      [himself] out as having authority or by a principal’s actions which
      lack such ordinary care as to clothe an agent with the indicia of
      authority, thus leading a reasonably prudent person to believe that
      the agent has the authority [he] purports to exercise.

Baptist Mem. Hosp. Sys. v. Sampson, 969 S.W.2d 945, 948 (Tex. 1998).

      The rule that an agent can bind his principal by acts within his apparent

authority, however, does not apply to public officers. Thermo Prod. Co. v.

Chilton ISD, 647 S.W.2d 726, 733 (Tex. App.—Waco 1983, writ ref’d n.r.e.);

see also Fort Worth Cavalry Club v. Sheppard, 125 Tex. 339, 83 S.W.2d 660,

663 (1935). All public offices and officers are creatures of law. Fort Worth

Cavalry Club, 83 S.W.2d at 663. The powers and duties of public officers are

defined and limited by law. Id. Therefore, the act of a public officer must be

expressly authorized by law or implied from the law. Id. Public officers may

make only such contracts for the government they represent as they are

authorized by law to make. Id.

      Title IV-D of the Social Security Act requires states to “provide services

relating to the establishment of paternity or the establishment, modification, or

enforcement of child support obligations . . . .” 42 U.S.C.A. § 654(4) (West

Supp. 2009). The family code designates the AG as Texas’s Title IV-D agency

and sets forth its rights and responsibilities to collect child support. Tex. Fam.

Code Ann. §§ 231.001, .0011, .101 (Vernon 2008). The AG may, among

                                       11
other things, enter into agreements or contracts with federal, state, or other

public or private agencies or individuals for the purpose of carrying out the

agency’s responsibilities under federal or state law. Id. § 231.002(c) (Vernon

2008). The AG may provide a release or satisfaction of a judgment for all or

part of the amount of the arrearages assigned to it under section 231.104(a)

of the family code. Id. § 231.002(i). Section 231.104(a) states that

      [t]o the extent authorized by federal law, the approval of an
      application for or receipt of financial assistance as provided by
      Chapter 31, Human Resources Code, constitutes an assignment to
      the Title IV-D agency of any rights to support from any other
      person that the applicant or recipient may have personally or for a
      child for whom the applicant or recipient is claiming assistance.

Id. § 231.104(a) (Vernon 2008). Chapter 31 of the human resources code

authorizes the legislature to provide assistance grants to certain needy persons,

including needy dependent children and their caretakers, subject to specified

limitations. Tex. Hum. Res. Code Ann. §§ 31.001–.044 (Vernon 2001 & Supp.

2008).

      2. Analysis

      Here, there is no evidence that the arrearages were assigned to the AG

under section 231.104(a) of the family code.       In other words, there is no

evidence that Jamie herself, or on behalf of J.P., received any public financial

assistance. Therefore, because there is no evidence that Jamie assigned her

                                       12
child support rights to the AG in return for public financial assistance, and

because the AG only has the authority to release an entire obligation for child

support if the support has been assigned to the AG as a result of the custodial

parent receiving public financial assistance, the law did not authorize the AG to

release Joseph’s entire obligation for arrearages.9 Thus, because the law did

not authorize the AG to release Joseph’s entire child support obligation, the AG

was not acting as an agent for Jamie when it entered the Release. See Fort

Worth Cavalry Club, 83 S.W.2d at 663. We hold, therefore, that the Release

is invalid as to the arrearages owed to Jamie. We sustain this portion of the

AG’s first issue.

      9
        … Support rights can also be assigned under section 231.104(b), which
states that “[a]n application for child support services is an assignment of
support rights to enable the Title IV-D agency to establish and enforce child
support and medical support obligations, but an assignment is not a condition
of eligibility for services.” Tex. Fam. Code Ann. § 231.104(b). However, the
family code does not provide the AG with the authority to release the entire
obligation of arrearages assigned to it under this section. On the contrary,
federal law requires the State to distribute collected support, less certain fees,
to custodial parents who never receive public assistance. 42 U.S.C.A.
§ 657(a)(3) (West Supp. 2009). Therefore, even if Jamie had assigned her
rights under section 231.104(b) of the family code, the AG did not have any
ownership in the support rights and therefore did not have the authority to
release Joseph’s entire obligation for arrearages.

                                       13
                                  IV. Mistake

      In its second issue, the AG claims that the language in the Release that

can be read as a release of the entire child support obligation is not binding

because it was included in the Release by mistake. The AG, however, first

raised the issue of mistake in its motion for new trial. Mistake is an affirmative

defense that is waived if not pleaded.      See Kendziorski v. Saunders, 191
S.W.3d 395, 406–07 (Tex. App.—Austin 2006, no pet.) (unilateral mistake is

an affirmative defense); Marsh v. Marsh, 949 S.W.2d 734, 745 (Tex.

App.—Houston [14th Dist.] 1997, no writ) (mutual mistake is an affirmative

defense); see also Tex. R. Civ. P. 94 (stating that affirmative defenses must be

affirmatively pleaded or they are waived). Therefore, because the AG did not

plead mistake as an affirmative defense, and because the issue was not tried

by consent, the AG has waived its mistake defense on appeal.                  See

Hollingsworth v. Hollingsworth, 274 S.W.3d 811, 815 (Tex. App.—Dallas

2008, no pet.) (concluding that an affirmative defense raised for the first time

in a motion for new trial is untimely).     Accordingly, we overrule the AG’s

second issue.

                                 V. Conclusion

      Because we have concluded that the Release is invalid, we reverse the

trial court’s judgment confirming arrears at $0 and denying the AG’s motion to

                                       14
confirm support arrearage, and we remand the case to the trial court for further

consideration of the AG’s motion to confirm child support arrearage.

                                           ANNE GARDNER
                                           JUSTICE

PANEL: LIVINGSTON, DAUPHINOT, and GARDNER, JJ.

DELIVERED: August 31, 2009

                                      15