Agreements Incident to Divorce and Final Decrees of Divorce

This post is a continuation of Jennifer's Hargrave's series on now various methods of settlement are incorporated into divorce decrees. The series began with Rule 11 Agreements and Final Decrees of Divorce.

Before trial, parties to a suit for divorce can resolve issues related to the division and confirmation of marital property and spousal support through an agreement incident to divorce (AID). Tex. Fam. Code § 7.006(a). The AID can divide the spouses' community property and liabilities, confirm their separate property and liabilities, provide for spousal support, set forth the terms of the agreed parenting plan, and incorporate any other terms to which the parties have agreed (e.g., income taxes, college expenses for children, attorney's fees, health insurance and life insurance.

The AID must be submitted to the court for its approval, either in writing or made in open court and entered on the record. If the court finds that the terms of the AID are just and right, and/or in the best interest of the children, the terms are binding on the court. If the court finds that the terms are not just and right, the court can ask the parties to submit a revised agreement or set the case for a contested hearing. The court, however, cannot supply missing terms to the agreement.

Either party can revise or repudiate an AID before the court renders a final judgment of divorce, unless the agreement conforms with requirements of another law that makes the agreement binding (i.e., irrevocable settlement agreement or Rule 11). It is important to note that a court can approve the AID prior to rendering judgment. For example, if the parties have entered into an AID and submitted it to the court for approval prior to the expiration of the 60 day waiting period, either party may withdraw their consent after the court's approval but prior to the rendering of the divorce. Once the court has rendered the final judgment based on the AID, consent can not be withdrawn. Schwarz v. Schwartz, 247 S.W.3d 804 (Tex. App. – Dallas 2008, no pet).

The AID can be an important tool for preserving the parties' privacy, if that is an issue (especially in Dallas County, and other counties where court filings are readily viewable online). The AID can contain all the details of all the accounts, dollar amounts, and other terms (i.e., drug and alcohol testing) that a party might not want visible as part of the court's records. In this case, the AID will be submitted to the court for approval, the court will sign the decree reciting its approval of the AID and incorporating the terms of the AID by reference, but the AID will not be filed with the court as part of its records. Obviously, this can create an enforcement issue at a later date if one of the parties needed to enforce the terms at a later date, and clients opting for this level of privacy should be advised of the potential issues surrounding its enforceability.

Rule 11 Agreements and Final Decrees of Divorce

The Agreed Decree of Divorce is a final decree that contains the terms to which both parties have given their consent. The Decree is both a "judgment" of the court, and a contract between the parties. Some terms can be enforced by contempt, some terms can be enforced as a breach of contract. Parties can give their consent by simply signing the final decree, in which case one party will "prove up" the decree before the judge who may approve the agreements and enter the order. Or the Decree can be based upon some form of a settlement agreement, which has been incorporated into the Decree.

If the decree is based upon a settlement agreement, it is important to understand the different variations of "agreements." Generally, once an agreement is reached regarding the terms of the decree, one party will want to enforce that agreement in the event the other party changes their mind. Understanding the nature of the underlying agreement is important to understand the "finality" of that agreement.

 The Rule 11 Agreement

 The Rule 11 Agreement is an agreement that conforms with the requirements of Texas Rules of Civil Procedure (TRCP) Rule 11, which states:

Unless otherwise provided in these rules, no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record.

Rule 11 Agreements are used to settle all types of issues between the parties, from discovery matters to final property divisions. They are contractual in nature, and can be enforced as a contract – provided they satisfy the requirements of Rule 11. When incorporating the terms of a Rule 11 Agreement into a final decree of divorce, specify that the parties intend for the decree to supersede the terms of the Rule 11 agreement. That way, if there is a conflict between the two documents, it is clear that the provisions of the decree trump the Rule 11 agreement. Otherwise, the settlement agreement remains enforceable as a contract even if its terms are not incorporated into the judgment. Compania Financiara Libano, S.A. v. Simmons, 53 S.W.3d 365 (Tex. 2001). The terms of the Rule 11 Agreement also remain enforceable as a contract, even if a party withdraws his or her consent. Boyd v. Boyd, 67 SW3d 398 (Tex. App. - Fort Worth 2002, no pet).