Over the past 20 years, nothing appears to have changed the face of family law in Texas as much as the use of alternative dispute resolution procedures. In most of the larger counties across the state, courts will not hear a contested final trial unless the parties first have attempted mediation. Some courts require mediation before allowing a contested temporary orders hearing. ADR procedures — including mediation, arbitration and collaborative law — seem to have significantly reduced the congested family court dockets.
But the Texas Supreme Court is considering a case that could undermine the effectiveness of these ADR procedures. In Re Stephanie Lee is a case in which the trial court declined to enter judgment on a validly executed mediated settlement agreement (MSA), notes Houston’s 14th Court of Appeals in its opinion in the case.
Understanding the impact of the high court’s pending decision in Lee requires some familiarity with the development of MSAs in family law litigation in Texas. As mediation became a more regularly mandated procedure, family law attorneys faced some unique issues regarding the enforceability of settlement agreements.
Lawyers considered early MSAs to be Rule 11 agreements and assumed they could enforce the MSA as a contract if a party attempted to get out of it. However, Texas law is clear that people cannot contract for custody or child support arrangements.
In light of decisions questioning how such MSAs could be enforceable, the Texas Legislature passed two important statutes: one concerning property settlements and one concerning custody agreements. Those statutes, Texas Family Code §§6.602 and 153.0071 (d)(e), mandate that courts approve MSAs containing certain language if they are signed by each party and his or her attorney, if any.
Section 6.602 mandates that a party is entitled to judgment on a validly executed MSA notwithstanding Rule 11 or “another rule of law.” Section 153.0071 similarly provides that a party is entitled to judgment based on the terms of the executed MSA, and it specifically limits the court’s ability to set aside the MSA: Doing so is only permissible if a signing party was a victim of family violence, his or her decision-making ability was therefore impaired, and the agreement reflected in the settlement is not in the best interest of the child. Accordingly, a best-interest review is only warranted under the statute if there are allegations of domestic violence.
The passage of these statutes provided a sense of finality in family law mediation sessions. Parties could be sure each would be bound by the agreements reached and that they could secure a judgment on the settlement terms, even if someone woke up the next day with buyer’s remorse.
And then along came Lee. In this recent mandamus proceeding, the finality of agreements reached in mediation is once again in question, potentially negating the benefit that the mediation statutes set out to give to parties involved in contentious family law litigation.
In Lee, the trial court declined to enter judgment on a valid MSA. The court found that the agreement was not in the best interest of the child. But the court ignored the additional statutory requirements that a party to the MSA must be a victim of family violence and that this circumstance impaired the party’s ability to make decisions. The 14th Court upheld the lower court’s decision earlier this year and denied mandamus.
If the Texas Supreme Court agrees with the 14th Court and upholds the trial court’s refusal to enter judgment on the MSA, allowing the court to review for best interests even when there is no statutorily required allegation of domestic violence, the decision will eviscerate the mediation statutes and the mandatory-mediation requirement that exists in a vast number of jurisdictions in Texas.
Such a decision by the high court also would open collaborative law agreements to judicial review. Parties often enter into such agreements after months of extensive negotiations. Collaborative law agreements get similar enforcement protections under Title 1A of the Family Code, Texas’ enactment of the Uniform Collaborative Family Law Act.
Such a decision also could open the door for judicial review of all agreed-upon settlements. That runs contrary to the U.S. Supreme Court’s holding in Troxel v. Granville (2000)that fit parents have a fundamental right to determine with whom and when their children spend time.
The effect on family law litigation in Texas will be significant. Parties to family law disputes will no longer have incentives to negotiate in good faith to work on an amicable resolution of their disputes if a court can undo the agreement.
There are other options for courts than declining to follow the MSA statutes, such as entering judgment pursuant to the MSA and then immediately granting a new trial if warranted by the facts.
The statutes are clear and unambiguous: Parties entering into validly executed MSAs after mediation should know that the court will approve the deal they struck and enter judgment. Hopefully, for the sake of amicable settlements in all family law cases, the Supreme Court will agree.