in the Matter of the Marriage of Kandy Hill Hallman and Charles David Hallman ( 2010 )

In The
Court of Appeals
Sixth Appellate District of Texas at Texarkana
______________________________
No. 06-09-00089-CV
______________________________
IN THE MATTER OF THE MARRIAGE OF
KANDY HILL HALLMAN AND
CHARLES DAVID HALLMAN
On Appeal from the 402nd Judicial District Court
Wood County, Texas
Trial Court No. 2008-428
Before Morriss, C.J., Carter and Moseley, JJ.
Memorandum Opinion by Justice Carter
MEMORANDUM OPINION
I. Introduction
Kandy Hill Hallman and Charles David Hallman entered into a Rule 11 agreement on
August 26, 2008, after Kandy filed a petition for divorce the preceding month. Because certain
contested matters remained unresolved, a divorce hearing took place on August 14, 2009, and a
final decree of divorce was signed and entered on September 16, 2009.
David appeals the final decree of divorce and contends the trial court erred by (1) failing to
enforce the Rule 11 agreement only on the specific terms stated therein; and (2) including terms
and conditions in its final judgment not present in the Rule 11 agreement, after Kandy revoked
consent and refused to enter an agreed final decree of divorce.
We affirm the judgment of the trial court because (1) the Rule 11 agreement was not
modified and was a valid and binding contract; and (2) the trial court had sufficient evidence upon
which to exercise its discretion in entering judgment on arrearages in temporary support, in
allocating the parties’ debt, and in awarding spousal maintenance. The court did not err in its
application of that discretion.
II. Factual and Procedural Background
On July 15, 2008, Kandy filed for divorce from David. After having discussed matters
between themselves, Kandy and David reached an agreement on property division and temporary
2
support. 1 Kandy’s attorney drafted a Rule 11 agreement which embodied the parties’ oral
agreement. The agreement was signed and filed among the papers of record. 2 Later, after
additional negotiations, Kandy and David signed an agreed final decree of divorce to be submitted
for approval upon obtaining the divorce.3 At the time he signed the proposed final decree, David
was working as an oil field consultant and was earning in excess of $100,000.00 per year. When
David lost his job, he notified Kandy of that fact and that as a result, he would not be able to fulfill
the obligations set forth in the proposed final decree of divorce. Consequently, the agreed final
decree was never submitted to the court. Instead, a final contested hearing was scheduled.
At the hearing, Kandy testified that she wanted the terms of the Rule 11 agreement
enforced. The agreement divided the parties’ real and personal property and provided for
temporary support for Kandy in the amount of $4,000.00 per month from August 1, 2008, and the
first day of each month thereafter until entry of the final decree. At the time of the hearing, Kandy
had received only $15,100.00 in temporary support payments.
There is no indication in the record that either party revoked the Rule 11 agreement.
David testified that he could not fulfill the terms as set out in the proposed final decree and that he
was currently working in Louisiana making approximately one-seventh the amount of money he
1
Kandy and David have no children.
2
David was not represented by counsel, but met with Kandy and her attorney and signed the agreement.
3
The Rule 11 agreement provided that David was entitled to the exclusive use of the marital residence pending
eventual agreed sale of the residence with proceeds to be divided equally between David and Kandy. After signing
the agreement, Kandy and David signed the proposed decree that David could buy Kandy’s interest in the marital
residence for a $15,000.00 down payment on a home for Kandy with additional payments of $2,500.00 each month
until the residence was paid in full.
3
made at the time he signed that document. Kandy testified that she did not pursue the proposed
agreed decree because David represented that he could not fulfill its terms.
During the course of the marriage, David did not file any income tax returns and as a result,
the community owed a debt of back taxes to the IRS of $123,000.00.4 Kandy was unaware of the
amount of the debt, and presumably was not aware of it at the time she entered into the Rule 11
agreement. Provision for the payment of this debt was not included in the Rule 11 agreement.
The issue of spousal maintenance was likewise not addressed in the agreement.
After a contested hearing,5 the trial court enforced the Rule 11 agreement as a contract and
incorporated the agreement into the final decree of divorce.6 The final decree also (1) awarded
judgment against David for an arrearage of temporary spousal support in the amount of
$36,900.00; (2) awarded judgment against David for spousal maintenance in the amount of
$36,000.00, to be paid at a rate of $1,000.00 per month; and (3) ordered Kandy to pay twenty
percent and David to pay eighty percent of the IRS debt.
4
Kandy testified that she filed separate income tax returns accounting for the small amount of income she earned
during the marriage. David’s alleged failure to file an income tax return during the marriage was a point of
contention, as David became angry when Kandy tried to speak with him about it. Kandy was not aware of the amount
of the IRS debt, and did not have sufficient information to file an income tax return for David’s income.
5
While David was not represented by counsel when he signed the Rule 11 agreement or the agreed final decree of
divorce, David was represented by counsel at the divorce hearing.
6
The final decree divided the parties’ real and personal property in accordance with the Rule 11 agreement.
4
III. Enforcement of the Rule 11 Agreement
In his first appellate point, David contends the trial court erred as a matter of law in failing
to enforce the Rule 11 agreement only on the specific terms stated in the agreement. The law of
contracts applies to Rule 11 agreements. Padilla v. LaFrance, 907 S.W.2d 454, 460 (Tex. 1995);
Batjet, Inc. v. Jackson, 161 S.W.3d 242, 246 (Tex. App.––Texarkana 2005, no pet.). The
decision of the trial court to enforce a Rule 11 agreement as a contract is subject to the abuse of
discretion standard of review. See Staley v. Herblin, 188 S.W.3d 334, 336 (Tex. App.––Dallas
2006, pet. denied). A trial judge has no discretion in determining what the law is or in applying
the law to the facts. Walker v. Packer, 827 S.W.2d 833, 840 (Tex. 1992); Brown v. Vann, 167
S.W.3d 627, 630 (Tex. App.––Dallas 2005, no pet.). A failure to analyze or apply the law
correctly will constitute an abuse of discretion. Brown, 167 S.W.3d at 630.
David initially takes the position that the Rule 11 agreement is valid as the facts show the
parties intended to enter into a binding contract. He claims, however, that the trial court exceeded
the terms of the Rule 11 agreement by finding an enforceable final settlement agreement while
making additional awards to Kandy. David contends that in so doing, the trial court entered a
judgment which was manifestly wrong and unjust.
We first determine whether the trial court abused its discretion in determining the existence
of a valid Rule 11 agreement, enforceable as a contract.
5
Rule 11 of the Texas Rules of Civil Procedure provides as follows:
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.
TEX. R. CIV. P. 11.
A settlement agreement must comply with Rule 11 to be enforceable. Knapp Med. Ctr. v.
De La Garza, 238 S.W.3d 767, 769 (Tex. 2007). A settlement agreement satisfies the
requirements of Rule 11 if it is (1) in writing, (2) signed, and (3) filed with the court or entered in
open court prior to a party seeking enforcement. Padilla, 907 S.W.2d at 461.
In the present case, the record contains a written agreement styled “Rule 11 Agreement,”
signed by Kandy and David, which was filed with the court on August 29, 2008. The existence of
the Rule 11 agreement is not contested, and there is no indication in the record that the agreement
was modified or revoked. 7 We find no abuse of discretion on the part of the trial court in
concluding Kandy and David entered into a valid and binding Rule 11 agreement, enforceable as a
contract.
Next, we determine whether the trial court abused its discretion by including provisions in
the final decree of divorce which were not included in the Rule 11 agreement.
7
Kandy testified that she wanted the agreement enforced.
6
IV. Variance in Agreement and Decree
David couches his argument on this issue in terms of sufficiency of the evidence. This is a
nonjury trial in which there was no request for findings of fact and conclusions of law, and none
were filed. A complete reporter’s record has been provided.
In considering the appropriate standard of review, we must presume the trial court found all
fact questions in support of its judgment and must affirm that judgment on any legal theory
supported by the pleadings and the evidence. IKB Indus. (Nigeria) Ltd. v. Pro-Line Corp., 938
S.W.2d 440, 445 (Tex. 1997). When a reporter’s record has been provided, the implied findings
may be challenged for legal and factual insufficiency “the same as jury findings or a trial court’s
findings of fact.” Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex. 1989); Johnson v. Oliver,
250 S.W.3d 182, 186 (Tex. App.––Dallas 2008, no pet.). When making a legal sufficiency
determination, we consider only the evidence most favorable to the implied findings of fact and
disregard all contradictory evidence. Burnett v. Motyka, 610 S.W.2d 735, 736 (Tex. 1980) (per
curiam); Advanced Messaging Wireless, Inc. v. Campus Design, Inc., 190 S.W.3d 66, 69 (Tex.
App.––Amarillo 2005, no pet.). In considering the factual sufficiency of the evidence to support
the implied findings, we consider all the evidence, including any evidence contrary to the court’s
judgment. Advanced Messaging Wireless, 190 S.W.3d at 69.
A trial court’s division of the marital estate is reviewed under an abuse of discretion
standard. Boyd v. Boyd, 131 S.W.3d 605, 610 (Tex. App.––Fort Worth 2004, no pet.). A trial
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court is charged with dividing the community estate in a “just and right” manner, considering the
rights of both parties. See TEX. FAM. CODE ANN. § 7.001 (Vernon 2006). A trial court’s division
of property may therefore not be disturbed on appeal unless the complaining party demonstrates
from evidence in the record that the division was so unjust and unfair as to constitute an abuse of
discretion. Boyd, 131 S.W.3d at 610. Under this abuse of discretion standard, the legal and
factual sufficiency of the evidence are not independent grounds of error, but are merely relevant
factors in assessing whether the trial court abused its discretion. In re Marriage of Driver, 895
S.W.2d 875, 877 (Tex. App.––Texarkana 1995, no writ). To determine whether there has been an
abuse of discretion because the evidence is legally or factually insufficient to support the trial
court’s decision, we first determine whether the trial court had sufficient evidence upon which to
exercise its discretion, and then determine whether the trial court erred in the application of that
discretion. Boyd, 131 S.W.3d at 611. The applicable sufficiency review comes into play with
regard to the first question. Id.
In this case, the trial court ordered that the Rule 11 agreement was enforceable as a contract
and incorporated the terms of that agreement into the decree of divorce, and was permitted to so
order. Clanin v. Clanin, 918 S.W.2d 673, 677 (Tex. App.––Fort Worth 1996, no pet.) (court may
divide community estate by incorporating parties’ property settlement agreement in decree).
At issue here is the addition of the following orders in the final decree: (1) the payment by
David of an arrearage of temporary spousal support in the amount of $36,900.00; (2) the payment
8
by David of eighty percent of the estimated community IRS tax debt in the amount of $123,000.00,
and the payment by Kandy of twenty percent of said debt;8 and (3) the payment by David of
spousal support in the amount of $36,000.00 at the rate of $1,000.00 per month.
A. Judgment for Arrearage
Pursuant to the terms of the Rule 11 agreement, David was to pay Kandy $4,000.00 per
month as temporary support, until a final decree of divorce was entered. The Rule 11 agreement
was signed and filed in August 2008, and the final decree of divorce was entered in August 2009.
Kandy’s uncontested testimony established that temporary support payments of $52,000.00 should
have been paid through August 2009. Kandy’s uncontested testimony further established that
only $15,100.00 in temporary support payments were made through that date, leaving an arrearage
of $36,900.00. The trial court had sufficient evidence upon which to render judgment for the
arrearage of temporary support, and did not abuse its discretion in doing so.
B. The IRS Debt
The Rule 11 agreement made neither mention of, nor provision for, the payment of the
$123,000.00 community debt to the IRS. The court set forth the Rule 11 agreement, to the extent
as made, in the decree. Because the agreement did not address the issue of the IRS debt, the court
was free to address that issue in the decree. See id. at 677–78.
8
David fails to delineate the portions of the final decree of divorce he finds to be objectionable; rather, he contends that
the decree should have included only the specific terms stated in the Rule 11 agreement. Accordingly, we review those
portions of the decree not included in the Rule 11 agreement to determine whether there was an abuse of discretion in
the inclusion of these additional provisions.
9
David relies on Ames v. Ames, 860 S.W.2d 590 (Tex. App.––Amarillo 1993, no writ), in
support of his contention that the final decree should contain only those specific provisions set
forth in the Rule 11 agreement. Certain provisions of the Ames’ divorce decree expanded upon
provisions of the settlement agreement, while some provisions of the agreement were missing
from the decree. The court determined that in a judgment by consent, “the court has no power to
supply terms, provisions, or essential details not previously agreed to by the parties.” Id. at 593
(citing Matthews v. Looney, 132 Tex. 313, 317, 123 S.W.2d 871, 872 (1939)).
Ames is distinguished from the present case because it involved a mediated settlement
agreement reached pursuant to alternative dispute resolution procedures described in Chapter 154
of the Texas Civil Practice and Remedies Code.9 Further, the judgment rendered in Ames was a
consent judgment. “In order for a consent judgment to be valid, the parties must have definitely
agreed to all the terms of the agreement. Nothing should be left for the court to provide.” Id.
(citing Vineyard v. Wilson, 597 S.W.2d 21, 23 (Tex. App.––Dallas 1980, no writ)). We further
recognize that a trial court has no authority to enter a judgment that varies the terms of a mediated
settlement agreement under the Texas Family Code. In re Marriage of Joyner, 196 S.W.3d 883,
890–91 (Tex. App.––Texarkana 2006, pet. denied) (agreement formed under Sections 6.062 and
153.0071 of Texas Family Code binds parties to agreement and judgment should be entered on
agreement).
9
See TEX. CIV. PRAC. & REM. CODE ANN. §§ 154.001–.073 (Vernon 2005 & Supp. 2009).
10
In the present case, however, the final decree of divorce was neither a consent judgment as
in Ames and Looney, nor was it a mediated settlement agreement under the Texas Civil Practice
and Remedies Code or the Texas Family Code. The authority upon which David relies for the
proposition that the trial court erred as a matter of law in making additional awards to Kandy is not
on point.
This case involves a valid, albeit noncomprehensive, Rule 11 agreement. In a contested
hearing, the court heard testimony regarding items not addressed in the agreement, including the
community IRS liability, the arrearage on temporary support, and the facts underlying the request
for spousal maintenance. While Kandy and David resolved the majority of the property division
issues prior to the hearing, the issues upon which the court heard testimony were in dispute. If a
Rule 11 agreement fails to dispose of all issues, a trial court must nevertheless dispose of all issues
properly before it. See Clanin, 918 S.W.2d at 677–78. Rule 11 agreements are used to resolve
various procedural or substantive matters many times without attempting to dispose of the entire
case. See Exito Elecs. Co. v. Trejo, 142 S.W.3d 302, 304 (Tex. 2004) (extending deadline for
filing of initial responsive pleading).
At trial, the court considered evidence relating to the marital assets and debts. The court
also considered evidence that while Kandy encouraged David to file income tax returns during the
marriage, he refused to do so. The testimony showed that while Kandy filed individual income
tax returns during her brief and sporadic periods of employment, she was not privy to all
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information necessary to file income tax returns for David’s income. This was a point of
contention during the marriage.
The court also considered evidence of both David’s and Kandy’s employment situations
and potential earnings. While David was gainfully employed and possessed solid earning
potential, Kandy was not employed and did not work outside the home during most of the ten-year
marriage. The court’s division of the community IRS debt was based upon sufficient evidence,
and the division is not manifestly unfair and unjust. The trial court did not abuse its discretion in
the division of this debt.
C. Spousal Maintenance
While the Rule 11 agreement contained specific provisions for the payment of temporary
maintenance, it neither mentioned, nor did it address, the issue of spousal maintenance. For the
reasons stated above, the trial court was obliged to address this issue in the final decree of
divorce.10
An award of spousal maintenance is intended to provide temporary and rehabilitative
support for a spouse whose ability to support herself has eroded over time while engaged in
homemaking activities and whose capital assets are insufficient to provide support. Deltuva v.
Deltuva, 113 S.W.3d 882, 888 (Tex. App.––Dallas 2003, no pet.). A trial court may order
maintenance if the duration of the marriage was ten years or longer, the spouse seeking
10
Kandy’s original petition for divorce and first amended original petition for divorce both seek an award of spousal
maintenance in accordance with Chapter 8 of the Texas Family Code. See TEX. FAM. CODE ANN. § 8.051 (Vernon
2006).
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maintenance lacks sufficient property to provide for his or her minimum reasonable needs, and
cannot support himself or herself due to (1) an incapacitating physical or mental disability, (2) a
child in the home with a disability requiring substantial care and supervision, or (3) the lack of
adequate earning ability. TEX. FAM. CODE ANN. § 8.051.
Determining the spouse’s minimum reasonable needs is a fact-specific determination done
on a case-by-case basis. Deltuva, 113 S.W.2d at 888 (citing Amos v. Amos, 79 S.W.3d 747, 749
(Tex. App.––Corpus Christi 2002, no pet.)). A trial court’s award of spousal maintenance is
subject to an abuse of discretion review. Brooks v. Brooks, 257 S.W.3d 418, 425 (Tex.
App.––Fort Worth 2008, pet. denied) (citing Chafino v. Chafino, 228 S.W.3d 467, 474 (Tex.
App.––El Paso 2007, no pet.)). The trial court may exercise its discretion to award spousal
maintenance if the party seeking maintenance meets those eligibility requirements set forth in the
statute. Id.
The evidence is undisputed that Kandy and David were married for the requisite ten years.
Kandy testified that while married to David, she was involved in a severe four-wheeler accident in
which her elbow was shattered. While surgery was performed on Kandy’s elbow, additional
surgery is required. The second surgery has not been scheduled because Kandy does not have the
money to pay for it. Undisputed evidence indicates that not only is the elbow injury painful, it
limits Kandy’s ability to seek gainful employment in an area where she has experience. Also
undisputed is Kandy’s testimony that she worked very little during the marriage. At the time of
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the hearing, David was gainfully employed, earning approximately $4,000.00 per month. Prior to
that, David worked as an oil field consultant making between $100,000.00 and $124,000.00 per
year.
The foregoing undisputed evidence establishes that Kandy had little work experience,
while David provided for the majority of the couple’s support during the marriage, and remained
gainfully employed at the time of the hearing. Further, Kandy was unable to seek gainful
employment due to her physical impairment. This evidence is sufficient to permit the award of
spousal maintenance. The trial court did not abuse its discretion in rendering judgment for
spousal maintenance in the amount of $36,000.00, to be paid at a rate of $1,000.00 per month for a
period of thirty-six months.
V. Revocation of the Rule 11 Agreement
In his second point of error, David contends that the trial court erred in adding new terms
and conditions to the Rule 11 agreement after Kandy revoked that agreement. We find no merit in
this contention. David contends that “either we have a Final Judgment based on the Rule 11
Agreement or we do not. But, clearly it is reversible error to hold the Rule 11 Agreement as a
Final Judgment to the parties AND adjudge additional money judgments against the Appellant.”
He contends the Rule 11 agreement was either revoked by the unfiled proposed agreed divorce
decree in which case the Rule 11 agreement should not be considered or the divorce terms must
have been strictly in accordance with the Rule 11 agreement. The proposed divorce decree signed
14
by the parties was never filed with the court and it cannot be considered a revocation of the Rule 11
agreement. Further, the proposed divorce decree purported to present an agreed or consent
judgment to the court which can be revoked by either party before the judgment is entered.
Quintero v. Jim Walter Homes, Inc., 654 S.W.2d 442, 444 (Tex. 1983). Kandy and David each
testified that when David lost his job and was temporarily unemployed, David indicated his
inability to abide by the terms of the agreed final decree; hence, the divorce was not pursued on
that basis, it was not submitted to the court and Kandy withdrew her consent. While the evidence
suggests there was a discussion of modifying the Rule 11 agreement, such modification was not
accomplished.11
We have previously explained that the trial court was not only authorized to divide the
remaining estate, but in fact was obligated to do so. TEX. FAM. CODE ANN. § 7.001 (court shall
order division of estate of parties in a manner that court deems just and right). We disagree that
the only choice of the trial court was to either enforce the Rule 11 agreement without addressing
the other marital issues or to declare the Rule 11 agreement invalid. Here, the trial court honored
the Rule 11 agreement as to all matters it covered.
11
Rule 11 of the Texas Rules of Civil Procedure requires that in order to enforce an agreement made pursuant to the
rule, the agreement must be in writing, signed and filed with the papers as part of the record, unless made in open court
and entered of record. TEX. R. CIV. P. 11. To be enforced, a modification of a binding Rule 11 agreement must also
meet these criteria. The agreed final decree of divorce was not filed with the papers as part of the record and was not
made in open court and entered of record. The decree was never presented to the trial court and therefore never acted
on or approved by the trial court.
15
David relies on the case of Samples Exterminators v. Samples, 640 S.W.2d 873 (Tex. 1982)
(per curiam), in support of his contention that the trial court erred as a matter of law by enforcing
the Rule 11 agreement. Samples recognizes that when a party revokes his or her consent to settle
a case prior to entry of a consent judgment, a consent judgment entered in the face of such
revocation is void. Id. at 874–75; see also Giles v. Giles, 830 S.W.2d 232, 235 (Tex. App.––Fort
Worth 1992, no writ) (consent judgment cannot be rendered when one party does not consent at
time judgment actually rendered although that party previously may have consented to
agreement). These cases do not support David’s contention.
Here, there was no revocation of the Rule 11 agreement, and a consent judgment was not
entered. The trial court entered judgment after a contested hearing on issues not addressed in the
Rule 11 agreement. The Rule 11 agreement was set forth at length in the final decree.
Additional provisions in the decree were not addressed in the Rule 11 agreement, and were
supported by the evidence.
Accordingly, we affirm the judgment of the trial court.
Jack Carter
Justice
Date Submitted: February 9, 2010
Date Decided: February 23, 2010
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