Court Opinion

ID: 9960779
Source: CourtListenerOpinion
Date Created: 2024-04-17 06:12:17.686985+00
Date Added: 2024-06-11T08:19:52.278290
License: Public Domain

CONDITIONALLY GRANTING WRIT and Opinion Filed April 11, 2024

                                   S  In The
                            Court of Appeals
                     Fifth District of Texas at Dallas
                               No. 05-23-00593-CV

                   IN RE CHRISTOPHER TORRES, Relator

          Original Proceeding from the 302nd Judicial District Court
                            Dallas County, Texas
                     Trial Court Cause No. DF-22-12902

                                    OPINION
                   Before Justices Reichek, Smith, and Kennedy
                             Opinion by Justice Smith

      On November 27, 2023, this Court denied Husband Christopher Torres’s

petition for writ of mandamus for failing to file a complete record, specifically the

exhibits offered and admitted into evidence at the relevant hearing. Husband filed a

motion for rehearing and supplemented the mandamus record with the missing

exhibits, which he had requested from the court reporter twice before filing his

petition in June 2023, and once before filing his motion to extend time to file his

motion for rehearing in December 2023; he did not receive those exhibits until

January 2024. We grant Husband’s motion for rehearing, withdraw our November
27, 2023 memorandum opinion, vacate our order of that same date, and consider the

merits of Husband’s petition. This is now the opinion of the Court.

                               Petition and Response

      In his petition for writ of mandamus, Husband asserts that the trial court

clearly abused its discretion by refusing to enter a final judgment based on the

parties’ Mediated Settlement Agreement (MSA), which met the statutory formalities

set forth in the family code, and by ordering the parties to reform the property

division in the MSA. Specifically, Husband argues that Wife did not establish her

defense of mutual or unilateral mistake if indeed mistake can be raised as a defense

to an MSA. Husband also asserts that he does not have an adequate remedy by

appeal because the trial court refused to render judgment.

      Wife Erin Torres, real party in interest, responds that a trial court may order

the parties to mediation as long as it retains jurisdiction over the case and, thus, the

trial court did not abuse its discretion here by ordering the parties to mediate whether

there was an asset that remained undivided. Wife claims that the trial court itself did

not determine whether there was an undivided asset or a mistake in the MSA, and

her response is silent as to whether an MSA can be set aside due to a mutual or

unilateral mistake and, if so, whether she proved mistake in the trial court. Further,

Wife contends that Husband does have an adequate remedy by appeal because the

trial court did not rule on Husband’s motion to enter judgment on the MSA and,

thus, Husband’s complaint is premature.

                                          –2–
       Because we agree that the trial court abused its discretion in failing to enter

judgment on the binding MSA and further agree that Husband lacks an adequate

remedy by appeal, we conditionally grant Husband’s petition for writ of mandamus.

                       Factual and Procedural Background

       Husband filed for divorce from Wife in August 2022, and Wife filed a

counterpetition for divorce. No children resulted from the marriage. The parties

exchanged sworn inventories and appraisements in which they identified all their

claimed community and separate property. They attended mediation in December

2022, resolved their disputes with regard to the property division, and signed an

MSA.

       Wife subsequently remembered that she had inherited approximately $40,000

from her aunt in 2020 and deposited it into one of their Prosperity Bank accounts.

The MSA reflects that the parties agreed such account would be divided as follows:

$146,356 to Husband, with “all remaining” to Wife. Wife asked if Husband would

agree “to change the decree to reflect that amount as her separate property.” He

declined and filed a motion to enter an agreed final decree of divorce based on the

MSA.

       In response, Wife sought to vacate the MSA on the grounds of mutual mistake.

She contended that she discovered additional separate property inheritance funds

that were not accounted for in the MSA and that the parties were mutually mistaken

as to the full scope of her separate property. Alternatively, she requested the court

                                         –3–
vacate the MSA on the ground of unilateral mistake because she did not intend to

alienate her separate property.

      At the hearing on Wife’s motion to vacate, Wife testified that “there [was]

some separate property I mistakenly forgot to mention during the mediation.” She

thought the account held community funds. Bank records showed that she deposited

a check from her aunt’s estate dated April 19, 2021, for $25,000 on April 23, 2021,

and deposited a check dated November 17, 2021, for $14,148.48 on November 23,

2021. Wife agreed on cross-examination that she placed the funds in her bank

account, not Husband’s. She also agreed that she was the only one in control of the

account when she had received and deposited the funds and when she had identified

the account as community property on her sworn inventory and appraisement. As

such, she agreed that Husband did not know what was in the account. Wife

explained, “I was mostly focused on proving the funds that I . . . inherited from my

mother’s death. Those were much more significant.” “I was so distracted with that

that this mutual mistake caused me to forget about the other funds I inherited from

my aunt.” The court asked Wife, “What was the mistake that you did not know?”

Wife responded, “The mistake was failing to mention the funds that I inherited from

my aunt. I thought I had accounted for everything, and it was just something that

was failed to be provided.”

      After the parties rested and closed, the trial court stated:

                                         –4–
             So with regard to the matter before the Court, on the Mediated
      Settlement Agreement, the Court is allowed to have the Mediated
      Settlement Agreement reformed. The Court will not divide property
      that is clearly separate property. That’s contrary to the Texas Family
      Code and/or the just and right division of the estate. Based upon the
      content of the document and the testimony before the Court, the Court
      is going to instruct that the Mediated Settlement Agreement can be
      reformed to make any corrections with regard to the assets, which
      ostensibly were undisclosed at the time arguably as it relates to the
      inheritance from the aunt.

            So that portion is granted. All I’m doing is allowing you to
      reform the Mediated Settlement Agreement. It is not set aside, but it is
      reformed with regard to just this particular area. . . .

              I don’t have you for closure on this. I need to get this to either a
      final trial and/or a prove-up date.

The trial court further stated that it was not entering a judgment but was simply

allowing the parties to correct the agreement. On Wife’s proposed order granting

her motion to vacate the MSA, the trial court struck the word “vacate” and replaced

it with “correct and reform,” thereby entering an order granting Wife’s motion to

“correct and reform” the MSA. The trial court noted on its docket sheet that the

“parties can return to mediator to reform/correct MSA” and that the case was reset

to August 15, 2023.

      Husband filed his petition for writ of mandamus on June 13, 2023, and sought

an emergency stay, which this Court granted as to the order to correct and reform

the MSA.

                                         –5–
                                 Mandamus Relief

      To be entitled to mandamus relief, a relator must show that the trial court

clearly abused its discretion and that relator has no adequate remedy by appeal. In

re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135–36 (Tex. 2004) (orig.

proceeding); Walker v. Packer, 827 S.W.2d 833, 839–40 (Tex. 1992) (orig.

proceeding). A trial court abuses its discretion when it acts in an unreasonable and

arbitrary manner or without reference to guiding rules and principles. In re Colonial

Pipeline Co., 968 S.W.2d 938, 941 (Tex. 1998) (orig. proceeding) (per curiam).

                       Entitlement to Judgment on an MSA

      Under the Texas Family Code, a party to a suit for dissolution of marriage is

entitled to judgment on an MSA if it satisfies section 6.602’s enumerated

requirements. TEX. FAM. CODE ANN. § 6.602(c); see also Highsmith v. Highsmith,

587 S.W.3d 771, 773 (Tex. 2019) (per curiam). The parties do not dispute that the

MSA at issue here satisfied such requirements. See TEX. FAM. CODE § 6.602(b).

      “It is well-settled that an MSA that meets section 6.602’s statutory formalities

‘is binding on the parties and requires the rendition of a divorce decree that adopts

the parties’ agreement.’” Highsmith, 587 S.W.3d at 775 (quoting Milner v. Milner,

361 S.W.3d 615, 618 (Tex. 2012)). “Unlike with other settlement agreements in the

family law context, the trial court is not required to determine if the agreed property

division is ‘just and right’ before approving an MSA that satisfies the statutory

                                         –6–
requirements.” Id. “In other words, a statutorily compliant MSA is binding on both

the parties and the trial court, subject to a few narrow exceptions.” Id.

      Wife asserts in her mandamus response that the trial court did not determine

whether there was a mistake in the MSA or whether an undivided asset remained

but, instead, ordered the parties to mediation to determine whether there was an asset

that remained undivided. We disagree with Wife’s assertion.

      At the close of the hearing, the trial court stated, “The Court will not divide

property that is clearly separate property. That’s contrary to the Texas Family Code

and/or the just and right division of the estate.” As explained by the supreme court,

the trial court was not permitted to determine if the agreed property division was

“just and right” or generally complied with the laws regarding the division of marital

property. See id. Therefore, the trial court clearly abused its discretion by evaluating

the merits of the property division agreed upon by the parties.

      Although Wife’s contention now is that the trial court did not determine

whether there was a mutual or unilateral mistake, Wife’s basis for setting aside the

MSA in the trial court was that she or she and Husband mistakenly categorized her

separate property as community property. Thus, we next turn to whether the trial

court could have declined to enter judgment on the MSA on such basis.

      Mutual or unilateral mistake has not been recognized by the supreme court as

a ground on which to void an MSA, but this Court has expressly rejected unilateral

mistake as a basis for setting aside an MSA. See In re B.H., No. 05-19-00324-CV,

                                          –7–
2019 WL 4254063, at *4 (Tex. App.—Dallas Sept. 9, 2019, no pet.) (mem. op.)

(“Father’s unilateral misunderstanding or mistake about the MSA’s terms or

enforceability is not grounds for setting aside the MSA.”); see also In re C.H.C., 396

S.W.3d 33, 46 (Tex. App.—Dallas 2013, no pet.) (“A unilateral mistake does not

provide grounds for relief even though it results in inequity to one of the parties.”).

Therefore, to the extent the trial court ordered the MSA to be reformed on the basis

of Wife’s alleged unilateral mistake, it was an abuse of discretion.

      As to the defense of mutual mistake, the Corpus Christi–Edinburg Court has

explained that, because it found no binding authority applying the contract doctrine

of mistake to section 6.602 agreements, the trial court did not abuse its discretion in

rejecting wife’s defense of mistake argument. See Loehr v. Loehr, No. 13-08-00380-

CV, 2009 WL 2645025, at *4 (Tex. App.—Corpus Christi–Edinburg Aug. 28, 2009,

no pet.) (mem. op.). Although this Court has addressed whether the party asserting

mutual mistake met his or her burden to establish such defense to an MSA, this Court

has not expressly decided that the defense of mutual mistake applies to a section

6.602 MSA. See, e.g., Butler v. Butler, No. 05-02-01631-CV, 2003 WL 21983218,

at *1–2 (Tex. App.—Dallas Aug. 21, 2003, no pet.) (mem. op.) (concluding trial

court did not err in refusing to reform the MSA to reflect a lower payment from

husband to wife or in rendering the divorce decree based on the binding MSA, which

met the procedural requisites of section 6.602, because even if the parties

overestimated the value of their property during mediation, nothing in the MSA

                                         –8–
indicated that the agreed payment to wife was based on a sixty–forty division of their

community property, as alleged by husband on appeal); see also In re C.H.C., 396

S.W.3d at 44–47 (concluding mother did not show MSA under section 153.0071,

which similarly governs MSAs in suits affecting the parent–child relationship, was

the product of mutual mistake).

      In Milner v. Milner, the supreme court explained that “once signed, an MSA

cannot be revoked like other settlement agreements.” 361 S.W.3d at 618; see also

Butler, 2003 WL 21983218, at *1 (“Section 6.602 provides a procedural shortcut for

the enforcement of MSAs in divorce cases, eliminating the need for a separate suit

to enforce the agreement even when one party withdraws his consent from the

MSA.”). Although the supreme court determined that a provision of the MSA was

ambiguous and that the ambiguity had to be resolved before an agreed judgment

could be rendered, the court did not “agree that the MSA should be set aside merely

because the parties interpret their agreement differently.” Milner, 361 S.W.3d at

622–23; see also In re Lauriette, No. 05-15-00518-CV, 2015 WL 4967233, at *3–5

(Tex. App.—Dallas Aug. 20, 2015, orig. proceeding) (mem. op.) (concluding trial

court abused its discretion in setting aside MSA because of alleged ambiguity and

explaining “mandamus relief will enable the parties to proceed immediately to

determining whether the agreement is ambiguous and permit the trial court to resolve

any ambiguity and enter judgment in accordance with the agreement”).

                                         –9–
      Whether a contract is ambiguous is a question of law that involves interpreting

and construing the agreement as written. See Milner, 361 S.W.3d at 619. But the

defense of mutual mistake applies “when the parties to an agreement have a common

intention, but the written contract does not reflect the intention of the parties due to

a mutual mistake.” Smith-Gilbard v. Perry, 332 S.W.3d 709, 713 (Tex. App.—

Dallas 2011, no pet.). Thus, it is an argument that the agreement reduced to writing

is not the actual agreement and should be modified. Such defense cannot apply to

an MSA if we are to give full effect to the language in section 6.602(c), which

provides that “a party is entitled to judgment on the mediated settlement agreement

notwithstanding Rule 11, Texas Rules of Civil Procedure, or another rule of law” if

the MSA meets the statutory requirements, including an agreement that the MSA

cannot be revoked. See TEX. FAM. CODE § 6.602(b)–(c) (emphasis added). The trial

court does not have authority to modify the MSA, order the parties to modify the

MSA, or enter a decree that varies from the terms of the MSA. See In re Marriage

of Joyner, 196 S.W.3d 883, 890–91 (Tex. App.—Texarkana 2006, pet. denied).

Allowing parties to claim mutual mistake as a defense would eviscerate the

immediately binding and enforceable nature of a section 6.602 MSA especially

when, like here, each party has specifically agreed in the MSA that “he or she has

reviewed this written agreement with counsel, if any, before signing it, and is

satisfied that it does contain the agreement made in mediation.”

                                         –10–
        In Cayan v. Cayan, the Fourteenth Court of Appeals concluded that “the

language of section 6.602 reflects that when the Legislature enacted that section, it

definitely and deliberately created a procedural shortcut for enforcement of mediated

settlement agreements in divorce cases.” 38 S.W.3d 161, 166 (Tex. App.—Houston

[14th Dist.] 2000, pet. denied). The court further explained:

        If a party fails to exercise diligence in investigating facts or law or
        otherwise enters into a section 6.602 agreement inadvisedly, he will not
        be rewarded for doing so with a reprieve from the agreement.
        Conversely, if a party is wrongfully induced to enter into a section
        6.602 agreement, he has the same recourse as one who discovered such
        a circumstance after judgment was entered on a non-section 6.602
        agreement.

Id. at 167. We agree with the Fourteenth Court’s rationale. An MSA entered into

under section 6.602 is “more binding than a basic written contract; nothing either

party could have done would have modified or voided the Agreement once everyone

had signed it.” In re Joyner, 196 S.W.3d at 889 (citing Cayan, 38 S.W.3d at 165–

66).1 Parties are of course “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.” Cayan, 38 S.W.3d at 166. Therefore, when a party does

take affirmative steps to enter into a section 6.602 binding and nonrevocable MSA,

    1
      Our opinion should not be read to foreclose arguments that a section 6.602 MSA is unenforceable
because it is illegal or was procured by fraud, duress, coercion, or other dishonest means. See, e.g., Boyd
v. Boyd, 67 S.W.3d 398, 403 (Tex. App.—Fort Worth 2002, no pet.). Today, we reach only the narrow
decision that the defense of mutual mistake cannot be used to set aside a statutorily compliant section 6.602
MSA.
                                                   –11–
we conclude that the defense of mutual mistake is not available to later set aside the

MSA.

       Even if the defense of mutual mistake were a basis on which a trial court could

set aside an otherwise statutorily compliant MSA or order the parties to reform

certain provisions of an MSA, we conclude that Wife failed to meet her burden to

establish the defense of mutual mistake here. Generally, an agreement may be set

aside where the parties contracted under a misconception or ignorance of a material

fact. In re C.H.C., 396 S.W.3d at 46. A mutual mistake “occurs when the parties to

an agreement have a common intention, but the written contract does not reflect the

intention of the parties due to a mutual mistake.” Smith-Gilbard, 332 S.W.3d at 713.

Thus, a party seeking relief from a mutual mistake must prove what the true

agreement was, establish that the terms or provisions in the writing differ from the

true agreement, and show that the different terms were placed in the writing by

mutual mistake. Id. at 714.

       Wife presented no evidence of what the parties’ “true” agreement was and

how it differed from the MSA. Instead, Wife’s argument in the trial court was that

she and Husband mistakenly labeled the account as community property instead of

separate property in their sworn inventories and appraisements and that, had she

remembered the inheritance or had the account been properly characterized, she and

Husband would have reached a different agreement. But the defense of mutual

mistake requires a showing that she and Husband actually did reach a different

                                        –12–
agreement than that shown in the MSA and that the MSA, because of a mutual

mistake, does not represent the actual agreement between the parties. See id. at 713–

14. Wife failed to establish such here as there is no evidence the parties reached a

different agreement as to her account in which she deposited the inheritance she

received from her aunt. See, e.g., Mullins v. Mullins, 202 S.W.3d 869, 875–77 (Tex.

App.—Dallas 2006, pet. denied) (implicitly rejecting wife’s argument that division

of her pre-marriage retirement benefits was a mutual mistake where wife “listed her

retirement benefits as community property in her sworn appraisal and did not claim

a separate property interest in her retirement benefits until after the mediated

settlement agreement was executed”). Additionally, the parties’ sworn inventories

and appraisements were not identical in all respects, and there is no evidence as to

how the parties agreed to split their community and separate property after

exchanging their inventories, apart from the terms of the MSA itself. Furthermore,

parties are free to divide their separate property by agreement. Cayan, 38 S.W.3d at

166.

       Moreover, the MSA was detailed and contained the following representations

in which the parties acknowledged they did not have complete information but were

satisfied that the information available was sufficient to make an informed decision

regarding the division of the marital estate and that the MSA was the agreement

reached in mediation:

                                       –13–
          the parties “have had an opportunity to obtain a substantially full
           and accurate disclosure from the other party of all assets and
           liabilities, whether claimed to be community or separate in
           character, including the approximate current balance in all
           financial accounts addressed in this agreement”;

          they have been “advised by their respective attorneys that
           additional discovery would be necessary to obtain a complete
           picture of the estates of the parties,” and that “they are satisfied
           with the disclosure as made at the time of this agreement, and
           each party waives any further disclosure by signing this
           agreement”;

          “he or she has reviewed this written agreement with counsel, if
           any, before signing it, and is satisfied that it does contain the
           agreement made in mediation”;

          “each is signing this agreement only after having read this entire
           document carefully, word-for-word”;

          “each party has been advised NOT to sign this agreement unless
           each has read it fully, understands it completely, and is willing
           to be immediately bound by all of its terms, provisions, and
           conditions” (emphasis in original); and

          “THIS AGREEMENT SHALL BE BINDING ON THE
           PARTIES AND SHALL NOT BE SUBJECT TO
           REVOCATION. THE PARTIES SHALL BE ENTITLED
           TO A JUDGMENT ON THE MEDIATED SETTLEMENT
           AGREEMENT NOTWITHSTANDING RULE 11, TEXAS
           RULES OF CIVIL PROCEDURE, OR ANY OTHER RULE
           OF LAW” (emphasis in original).

The agreement also expressly stated that “[t]he parties agree that the values used to

create the attached spreadsheet were sufficient to make an informed decision

regarding the division of the estate today.”

      Therefore, to the extent the trial court relied on Wife’s argument that there

was a mutual mistake and that the MSA could be reformed, the trial court abused its

                                        –14–
discretion. Here, the trial court was required to enter judgment on the binding MSA,

and it erred when it declined to do so and ordered the parties back to mediation.

                         No Adequate Remedy by Appeal

      We next turn to whether Husband has an adequate remedy by appeal. We

conclude that he does not.

      First, we reject Wife’s argument that Husband’s complaint is premature

because the trial court did not rule on Husband’s motion to enter judgment on the

MSA and did not technically set it aside. By ordering the parties to reform any

portion of the MSA, the trial court necessarily refused to enter judgment on the MSA

as written and set aside the written agreement that was binding at its signing.

      Second, the supreme court has noted that “[m]andamus relief is available to

remedy a trial court’s erroneous refusal to enter judgment on an MSA.” In re Lee,

411 S.W.3d 445, 450 n.7 (Tex. 2013) (orig. proceeding). Citing In re Lee and other

precedents, this Court previously explained:

      The trial court’s error of setting aside the mediated settlement
      agreement could be corrected on appeal, but only after the parties had
      litigated or reached a new settlement concerning the issues in this
      proceeding. Waiting until the appeal to correct this error would deprive
      the parties of one of the benefits of a mediated settlement agreement
      under the family code, an end to litigation through the immediate
      enforceability of the agreement. A failure to enforce a mediated
      settlement agreement deprives the party seeking to enforce the
      agreement of one of the benefits of a mediated settlement agreement
      because it forces the party to expend further time and resources
      litigating a suit that was settled.

      The supreme court has determined that mandamus relief is available to
      remedy a trial court’s erroneous refusal to enter judgment on a mediated
                                        –15–
      settlement agreement because the parties will have lost much of the
      settlement’s benefit if they are required to expend time and resources
      appealing the error. Not correcting the trial court’s error of setting aside
      the agreement would similarly deprive the parties of the benefits of a
      mediated settlement agreement.

In re Lauriette, 2015 WL 4967233, at *4–5 (internal citations and footnote omitted).

Therefore, as explained in In re Lauriette, Husband lacks an adequate appellate

remedy. See id.

                                     Conclusion

      Husband is entitled to mandamus relief. The trial court clearly abused its

discretion by declining to enter judgment on the MSA and ordering the parties back

to mediation. Additionally, Husband has no adequate remedy by appeal. We,

therefore, conditionally grant the writ and direct the trial court to vacate its order

granting Wife’s motion to correct and reform the MSA and further direct the trial

court to enter judgment on the MSA. A writ will issue only if the trial court fails to

comply. The stay imposed in our July 28, 2023 order is lifted.

                                            /Craig Smith/
                                            CRAIG SMITH
                                            JUSTICE
230593F.P05

                                         –16–