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Loya v. Loya

Supreme Court of Texas

May 12, 2017

Miguel Angel Loya, Petitioner,
Leticia B. Loya, Respondent

          Argued March 21, 2017

         On Petition for Review from the Court of Appeals for the Fourteenth District of Texas

          Debra H. Lehrmann Justice.

         Mediated 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.

         I. Background

         Miguel 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 each year.

         Leticia 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.

         The MSA 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 follows:

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.

         The MSA 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.

         On June 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."

         The day 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, ...

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