Maria Reyna Olvera v. Jose Pablo Olvera

Opinion issued March 6, 2008 In The Court of Appeals For The First District of Texas NO. 01-07-00231-CV MARIA REYNA OLVERA, Appellant V. JOSE PABLO OLVERA, Appellee On Appeal from the 247th District Court Harris County, Texas Trial Court Cause No. 2006-01334 MEMORANDUM OPINION Appellant, Maria Reyna Olvera, appeals the trial court’s granting of a final decree of divorce based on a mediated settlement agreement (“MSA”). In two issues, Maria contends (1) that her consent to the MSA was procured by fraud and (2) that appellee, Jose Pablo Olvera, was permitted to “prove up” the divorce “ex parte,” which was improper. We affirm. Facts and Procedural History In January 2006, Jose filed for divorce from his wife, Maria, who responded with an answer and a counter-petition. On July 6, 2006, the parties and their attorneys attended mediation, where the parties entered into a mediated settlement agreement (“MSA”). The MSA, signed by Jose and Maria and their respective attorneys, divided the marital assets, provided for conservatorship of the children and child support, and provided that the agreement was final and irrevocable. Pursuant to the MSA, Maria was awarded four properties on Brady Lane in Tomball, Texas (“the Brady properties”), that the Olveras had purchased during their marriage from Elidio Flores, under a contract for deed. On the Brady properties were mobile home trailers that the Olveras owned free of any liens and that they rented out. During the divorce, the Olveras fell behind on their payments to Flores on the land. In the MSA, the parties agreed that Maria would receive all rents earned on these properties, but that she was responsible for the payment of all associated debt. At some point prior to the mediation, Maria and Flores had entered into a written agreement providing that if Maria was awarded the Brady properties in the MSA and if she paid Flores the outstanding sums in full by July 31, 2006, Flores would allow Maria to redeem the properties. Although Maria was awarded the Brady properties in the MSA, she was unable to pay the outstanding debt by July 31, 2006 and was unable to redeem the properties under her agreement with Flores. Maria contends that she made multiple attempts to tender the money to Flores, but that he refused to honor their agreement. On December 12, 2006, Maria moved to set aside the MSA on the ground that her consent to the MSA had been fraudulently procured. Specifically, Maria contended that Jose knew at the time of the mediation and the execution of the MSA that the Brady properties no longer belonged to the community or that he colluded with Flores to transfer the Brady properties out of the community. Jose moved to enforce the MSA and for a final decree on the MSA. On January 19, 2007, the trial court conducted a hearing on Maria’s motion to set aside the MSA and on Jose’s motion to sign the decree. Maria, through her counsel, asserted that there had been “a secret agreement” between Jose and Flores, pursuant to which Flores would rescind his agreement with Maria and Jose “would reap the profits on” the Brady properties. Jose, through his counsel, contended that the properties were listed on the parties’ inventories and that Maria was fully aware of the status of default on the properties at the time the MSA was executed, as evidenced by her pre-mediation agreement with Flores to redeem the properties. At the close of the hearing, Jose urged that, even if Maria might have a breach of contract claim against Flores, Jose was nevertheless entitled to enforcement of the MSA and a final decree on the MSA. The trial court agreed and asked for the prepared order. When the trial court asked for the required parenting class certificates, however, Jose had left his at home. The trial court instructed Jose to go and retrieve it by 3:00 p.m. or the case would be dismissed. Jose and his attorney returned that afternoon, but Maria and her attorney did not. The trial court denied Maria’s motion to set aside the MSA and granted a final decree of divorce. The trial court’s findings of fact were that the parties and their attorneys attended mediation and entered into an MSA. In addition, the court found that there was prominently displayed language in the MSA specifying that it was not subject to revocation. Further, the court found that, after the January 17, 2007 hearing, the divorce had been “proven up”; that there was no evidence that Jose made a material misrepresentation that was false, that was known to be false when made or was asserted without knowledge of its truth, that was intended to be acted upon, was relied on, and that caused injury to Maria; and there was no evidence that Jose engaged in a conspiracy to fraudulently induce Maria into signing the MSA. The trial court’s conclusions of law were that the MSA met all the requirements of section 6.602(b) of the Family Code; that the “Agreed Final Decree of Divorce” conformed with the MSA and met all the prerequisites required by law, including the division of the marital estate and conservatorship of the children; that Jose was entitled to judgment on the MSA under section 6.602(c) of the Family Code; and that the divorce was granted. Maria moved for a new trial, contending, in part, that the trial court erred by granting the final decree because the trial court “took no evidence and no party ‘proved up’ the divorce” at the January 17, 2007 hearing. Maria contended that the MSA “does not provide evidence to satisfy the Family Code’s requirements for proof to support a divorce.” In addition, Maria re-urged that Jose conspired with Flores to fraudulently induce her to sign the MSA. After a hearing, the trial court denied Maria’s motion for new trial. Evidence to Support the Decree In her second issue, Maria contends that appellee, Jose Olvera, was permitted to “prove up” the divorce “ex parte,” which was improper. Maria contends that the MSA was not sufficient, on its own, to entitle Jose to the granting of the divorce decree. An MSA is binding on the parties 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. Tex. Fam. Code Ann. § 6.602(b) (Vernon 2006). The record shows that Maria and Jose entered into an MSA, that was signed by Jose and Maria and their respective attorneys, and that provided, in a separate paragraph, in English and in Spanish, and was emphasized as follows: “WARNING THIS AGREEMENT IS FINAL AND IS NOT SUBJECT TO REVOCATION.” Hence, the MSA at issue herein meets the requirements of section 6.602(b). See id. When, as here, an MSA meets the requirements of section 6.602, “a party is entitled to judgment” on the MSA, “notwithstanding Rule 11, Texas Rules of Civil Procedure, or another rule of law.” Id. § 6.602(c). Agreements under section 6.602 are immediately binding, even in the absence of a divorce decree incorporating it. Tex. Fam. Code Ann. § 6.602; Spiegel v. KLRU Endowment Fund, 228 S.W.3d 237, 241 (Tex. App.—Austin 2007, pet. denied); In re Joyner, 196 S.W.3d 883, 889 (Tex. App.—Texarkana 2006, pet. denied). Compliance with section 6.602 makes the agreement an exception to section 7.006, which allows revision and repudiation of settlement agreements. See Tex. Fam. Code Ann. § 7.006 (Vernon 2006) (providing that settlement agreements “may be revised or repudiated before rendition of the divorce” and must be approved by trial court); Joyner, 196 S.W.3d at 889. An agreement under section 6.602 may be ruled on without a determination that its terms are just and right. Joyner, 196 S.W.3d at 889. Maria does not dispute that the MSA herein complies in all respects with section 6.602(b). Hence, the MSA is “binding on the parties,” and Jose was entitled to judgment on the MSA. See Tex. Fam. Code Ann. § 6.602(c). “The statute requires the trial court to render judgment on a Section 6.602 agreement, even if one party attempts to withdraw consent.” Joyner, 196 S.W.3d at 890. As the court recognized of the appellant in Spiegel, Maria could have made an agreement under section 7.006 of the Family Code if she desired to enter into a settlement agreement that could be rescinded and would not be enforceable until approved by the court. Spiegel, 228 S.W.3d at 243. Instead, she chose to make an agreement under section 6.602 that became binding immediately after it was signed. See id. We hold that the MSA meets the requirements of section 6.602, and thus the trial court did not err by entering the order enforcing the parties’ agreement. See Tex. Fam. Code Ann. § 6.602(c); Beyers v. Roberts, 199 S.W.3d 354, 359 (Tex. App.—Houston [1st Dist.] 2006, pet. denied). Accordingly, Maria’s second issue is overruled. Fraudulent Inducement In her first issue, Maria contends that, even if the MSA meets the requirements of section 6.602, the trial court erred by enforcing the MSA because her consent was fraudulently procured. Maria points to her testimony presented at the hearing on the motion for new trial and asks this court to reverse and remand for a new trial. We review a trial court’s denial of a motion for new trial for an abuse of discretion. In re R.R., 209 S.W.3d 112, 114 (Tex. 2006); Cont’l Cas. Co. v. Hartford Ins., 74 S.W.3d 432, 434–35 (Tex. App.—Houston [1st Dist.] 2002, no pet.). The trial court abuses its discretion if it acts unreasonably or in an arbitrary manner, without reference to guiding rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985). An MSA that meets the statute’s requirements must be enforced unless there is an allegation that it was “procured by fraud, duress, coercion, or other dishonest means.” Joyner, 196 S.W.3d at 890; Boyd v. Boyd, 67 S.W.3d 398, 403 (Tex. App.—Fort Worth 2002, no pet.). Here, Maria alleged that the MSA was procured by fraud. A fraudulent inducement claim requires evidence (1) that Jose made a material misrepresentation that was false, (2) that was either known to be false when made or was asserted without knowledge of its truth, (3) that it was intended to be acted upon, (4) that it was relied on, and (5) that such reliance caused Maria injury. See Formosa Plastics Corp. USA v. Presidio Engineers and Contractors, Inc., 960 S.W.2d 41, 47 (Tex. 1998). The record shows that, at the January 19, 2007 hearing on Maria’s motion to set aside the MSA, Maria’s counsel presented Maria’s theory of fraudulent inducement to the trial court, but Maria did not testify and did not present any evidence. In her affidavit in her motion for new trial, Maria attested that Jose called her after the mediation, asked if she would come back to him, and that she refused. Maria attested that Jose told her that he would tell Flores not to let her redeem the properties. In addition, Maria attested that when she tried to pay Flores, he would not meet with her. However, Maria could only speculate as to the existence of an agreement between Jose and Flores, as follows, in pertinent part: While I do not know the exact terms of the agreement, it is apparent that the essential terms of the agreement were that [Flores] would sign a document stating that if I was awarded the [Brady properties] then [Flores] would allow me to redeem those properties despite the fact the [Jose] and I were currently in default on payment of those properties. Then [Jose] anticipated that I would ask for and receive [the Brady properties] at the Mediated Settlement Conference. Finally, [Flores] and [Jose] agreed that once I had the properties, [Jose] had the power to tell [Flores] whether to perform under the contract based on whether I agreed to take [Jose] back as my husband. At the hearing on the motion for new trial, Maria explained that she had subpoenaed Flores to appear at the hearing on the entry of the decree, but that Flores did not appear. Maria contends that, nevertheless, Jose failed to controvert her assertions. As Jose contends and the trial court found, Maria did not offer evidence that Jose made any specific material misrepresentation that was false, that was known to be false when made or was asserted without knowledge of its truth, that was intended to be acted upon, was relied on, and that caused injury to Maria. In addition, Maria did not present any evidence, beyond her speculation, that Jose engaged in a conspiracy to fraudulently induce Maria into signing the MSA. It is undisputed that Maria was fully aware of the status of default on the properties at the time the MSA was executed, as evidenced by her pre-mediation agreement with Flores to redeem the properties. “The trial court serves as fact finder at a hearing on a motion for a new trial and, accordingly, is the sole judge of the witnesses’ credibility.” Shull v. United Parcel Serv., 4 S.W.3d 46, 51 (Tex. App.—San Antonio 1999, pet. denied). Here, the trial court did not, nor was it compelled to, accept Maria’s testimony that she was fraudulently induced to sign the MSA. We conclude that the record supports the trial court’s ruling. We hold that the trial court did not abuse its discretion by denying Maria’s motion for new trial. Accordingly, Maria’s second issue is overruled. CONCLUSION We affirm the judgment of the trial court. Laura Carter Higley Justice Panel consists of Justices Nuchia, Hanks, and Higley.