In Loya v. Loya, the Texas Supreme Court faced the question of whether a mediated settlement agreement partitioned an employee bonus that was received nine months after the divorce decree was entered.
According to the court's opinion, the divorce litigation lasted over two years. The trial court ordered mediation, resulting in an MSA signed by the parties and their attorneys.The MSA stated that it served as a partition of all property and any disputes relating to drafting or interpretation would be arbitrated.
The trial court rendered an oral judgment on the MSA the day after it was signed. The parties then drafted a decree and agreement incident to divorce, where disagreements arose. Those disputes were arbitrated, with the arbitrator ruling that the MSA language on "all future income and earnings" of the husband would be placed in the AID. After arbitration, the wife moved to set aside the MSA, arguing that there was no mutual assent because the parties did not reach agreement on the division of the community interest in the husband's bonus that might be paid later. The trial court denied that motion.
Once the bonus was received by the husband, the wife filed a petition for post-divorce division of property. The trial court granted the husband's motion for summary judgment. The court of appeals reversed.
The Texas Supreme Court reversed the decision of the court of appeals and rendered judgmet for the husband.
In its opinion, the Texas Supreme Court confirmed that a MSA that meets statutory formalities is binding on the parties and should be construed according to general contract interpretation principles. The court should "ascertain the true intentions of the parties as expressed in the writing itself." Here, the court held that the MSA partitioned all future earnings. The MSA was signed in 2010 and the bonus was received in 2011. At the time of the MSA, there was no bonus to partition. Because the MSA specified that all future income is partitioned to the "person to whom the property is awarded" and all future earnings "are partitioned to the person providing the services giving rise to the earnings," the Texas Supreme Court held that the MSA partitioned the bonus to the husband who received it nine months after the decree.
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