March 21, 2017
Petition for Review from the Court of Appeals for the
Fourteenth District of Texas
H. Lehrmann Justice.
settlement agreements are valuable tools in the effort to
amicably resolve contentious family-law disputes. These
agreements further the express legislative policy- especially
critical in family law-of "encourag[ing] the peaceable
resolution of disputes, " including "the early
settlement of pending litigation through voluntary settlement
procedures." Tex. Civ. Prac. & Rem. Code §
154.002. In the underlying divorce proceedings, the parties
entered into a mediated settlement agreement (MSA) after
nearly two years of litigation. The central issue is whether
the MSA partitioned a discretionary employee bonus the
husband received nine months after the decree was entered.
The husband contends that the bonus constitutes future income
and earnings that the MSA partitioned to him, while the wife
contends that part of the bonus was earned during the
marriage and constitutes undivided community property. The
trial court granted summary judgment for the husband, but the
court of appeals reversed. Because we agree with the husband
that the MSA partitioned the bonus, we hold that the trial
court properly granted summary judgment and therefore reverse
the judgment of the court of appeals.
Angel Loya and Leticia B. Loya married in 1980. Miguel began
working at Vitol Inc.-an energy and commodity trading
company-in 1992. As a term of his at-will employment, Miguel
was eligible for, but not entitled to, an annual
discretionary bonus. The relevant provision reads: "You
will continue to be considered for an annual bonus based on
various performance parameters considered by the company.
Bonuses are completely at the discretion of the Company and,
if paid, are typically paid in March/April each year."
During the couple's marriage, Miguel received a bonus
petitioned for divorce in 2008. The parties agreed on the
division of $10 million of community assets ($5 million to
each spouse), but were unable to resolve their remaining
differences. The trial court ordered mediation, resulting in
a mediated settlement agreement signed by Leticia, Miguel,
and their respective attorneys on June 13, 2010.
stated that it "shall serve as a partition of all
property set forth herein to the person to whom such property
is awarded." The MSA explicitly partitioned numerous
bank accounts, retirement plans, motor vehicles, furnishings,
jewelry, antiques, household items, and liabilities. Miguel
attested, and Leticia does not dispute, that the bonus he
received from Vitol in 2010 (before the MSA was finalized)
was deposited into an account awarded to Leticia. In
addition, the MSA partitioned future income and earnings as
All future income of a party and/or from any property herein
awarded to a party is partitioned to the person to whom the
property is awarded. . . . All future earnings from each
party are partitioned to the person providing the services
giving rise to the earnings.
also contained detailed provisions regarding the parties'
respective income-tax liabilities. With respect to their 2010
taxes, the agreement provided in part:
For 2010, each party shall file an individual income tax
return . . . as if they were divorced [at] 12:01 a.m. on
January 1, 2010. This Mediated Settlement Agreement shall
serve as a partition of community income, setting aside to
each spouse all income earned by each such spouse and/or
attributable to property awarded to each such spouse or
confirmed as each such spouse's separate property herein.
Finally, the MSA required the parties to submit to binding
arbitration with respect to drafting disputes, interpretation
issues, and "issues regarding the intent of the parties
as reflected in" the MSA.
14, 2010, the day after the parties executed the MSA, Leticia
presented the agreement to the trial court, and the court
orally rendered judgment on the MSA at that time. Tex. Fam.
Code § 6.602(c) ("If a mediated settlement
agreement meets the requirements of this section, a party is
entitled to judgment on [the MSA] . . . ."). While the
parties were in the process of drafting the divorce decree
and the agreement incident to divorce (AID), disagreements
arose over the meaning of several MSA provisions.
Consequently, a week after the trial court rendered judgment
on the MSA, the parties went to arbitration on these points
of contention. One of the disagreements related to the
partition of future income and earnings. Leticia's
proposed AID awarded to Miguel "future earnings of
Miguel Loya arising from services from June 13th, 2010,
forward." Miguel responded that this provision did not
comport with the MSA and proposed language awarding him
"'all future income and earnings of Miguel Loya,
' period." The arbitrator orally ruled that
"the MSA language is going to be placed into the
AID." In a subsequent email, the arbitrator directed the
parties to include the following language in the AID:
"All future income and earnings are partitioned as of
June 13, 2010[;] however for tax purposes the partition of
income for 2010, is as of Jan. 1, 2010." The arbitrator
confirmed: "I want it to read that way."
after the arbitration hearing, Leticia moved to set aside the
MSA, arguing in pertinent part that there was no mutual
assent to it because "the parties did not reach
agreement as to the division of . . . the community's
interest in Miguel['s] bonus to be paid in 2011, nearly
half of which pertains to [Miguel's] services through
June 13, ...