Kendren Leedy v. Brad Leedy , 2013 Tex. App. LEXIS 3190 ( 2013 )

Dismissed and Opinion filed March 26, 2013.
In The
Fourteenth Court of Appeals
NO. 14-11-00911-CV
KEDREN LEEDY, Appellant
V.
BRAD LEEDY, Appellee
On Appeal from the 309th District Court
Harris County, Texas
Trial Court Cause No. 2010-35091
OPINION
Kedren Leedy appeals from a final decree of divorce terminating her
marriage to Brad Leedy. In a single issue, Kedren challenges the trial court‟s
determination that she could not revoke her consent to a Rule 11 agreement on
which the final decree was based. In a motion to dismiss the appeal, Brad contends
that Kedren is estopped from challenging the trial court‟s judgment because she
accepted benefits under that judgment. We dismiss the appeal.
Background
Kedren and Brad were married in February 1996. Kedren filed for divorce
on June 7, 2010, and Brad filed a counter-petition shortly thereafter. The parties
agreed on numerous issues prior to trial, including conservatorship and rights of
possession concerning their three children. They tried the remainder of the issues,
including domicile restriction and property division, to the associate judge of the
309th District Court, beginning on April 25, 2011. After trial, the associate judge
signed a letter to the parties in which he purported to give his “rendition
concerning the issues reserved for the Court.”1 In this document, dated May 4,
2011, the associate judge specified a geographical restriction for the children‟s
residence and provided a division of the marital assets. Of particular note to the
present appeal, the associate judge specifically stated that each party was awarded
“50% of Texcalibur Armor, LLC.” Kedren‟s attorney was instructed by the
associate judge to “draft the order,” and an entry date was set for May 18, 2011.
On May 11, 2011, Brad filed a Motion for Reconsideration, alleging that an
amicable working relationship between the parties as partners in Texcalibur was
unlikely. Brad specifically requested the associate judge reconsider the award of
50% interest in the company to each party, and he suggested the “maximum book
value” of the company was in the range of $25,000 to $40,000 based on Brad‟s
trial testimony. On May 13, Kedren filed a response urging the associate judge to
deny the Motion to Reconsider; then, on May 31, she filed a motion for appraisal
of Texcalibur.
Thereafter, on June 3, 2011, the parties entered into a “Rule 11 Agreement”
in which Brad agreed to pay Kedren $125,000 for her half of Texcalibur. The
handwritten agreement reads in full:
1
The clerk‟s record lists this document as a “Master‟s Report.”
2
Rule 11 Agreement
The parties and counsel hereby agree & stipulate that the Decree of
Divorce in this matter shall reflect the rendition of the Court, except
as follows:
Brad Leedy is to be awarded 100% interest in
TexCalibur, L.P. and all related entities and assumes any
and all liabilities associated therewith.
In exchange[,] Brad Leedy shall pay to Kedren Leedy the
sum of $125,000.00 on or before 5:00 p.m. on June 10,
2011.
The above agreement is made pursuant to TRCP 11 and shall be
binding on all parties and counsel.2
The parties and their attorneys each signed the agreement, and the associate judge
signed it as “[a]ccepted and approved.” The signed document was filed with the
court on the same day.
On June 10, 2011, Kedren filed a motion seeking to withdraw her consent
from the Rule 11 Agreement. In the motion, she states that the Rule 11 Agreement
had “yet to be rendered” and that she had hired an expert who was prepared “to
testify that the valuation of the business is significantly higher than what was
originally thought.” Both sides filed memoranda of law regarding the question of
withdrawal of consent. On July 7, 2011, the presiding judge of the 309th District
Court denied Kedren‟s motion and set entry of the final order for July 19. On July
21, the presiding judge signed a final decree of divorce incorporating the associate
judge‟s prior rulings and the Rule 11 Agreement.
After Kedren filed her brief in this appeal, Brad filed a motion to dismiss,
asserting that Kedren was estopped from pursuing the appeal because she had
2
Although the precise name “Texcalibur Armor, LLC” does not appear in the Rule 11
Agreement, the parties do not dispute that the entity named therein is the same entity as
mentioned in the associate judge‟s letter.
3
accepted benefits under the judgment she challenges in the appeal. Attached to the
motion was an affidavit by Brad in which he averred that on June 7, 2011, pursuant
to the Rule 11 Agreement, he wrote a check for $125,000, payable to Kedren, and
she subsequently endorsed it and received the funds. Attached to the affidavit was
a copy of the check demonstrating that it had been endorsed by Kedren and the
funds withdrawn from the account on September 13, 2011.
In response, Kedren acknowledged receipt of the funds but contended that
she was entitled to the funds as they constituted the value of Texcalibur as
stipulated in the Rule 11 Agreement. She further suggested that in the event of a
remand in the case, Brad could simply be credited with having paid the stipulated
value of the asset to Kedren. Lastly, she asserted that the trial court‟s judgment
was void.
On February 28, 2012, this court issued a per curiam opinion dismissing the
appeal. Leedy v. Leedy, No. 14-11-00911-CV, 2012 WL 629185 (Tex. App.—
Houston [14th Dist.] Feb. 28, 2012) (mem. op.) (withdrawn by order of April 26,
2012). After Kedren filed a motion for rehearing, adding additional argument and
support for her contention that the acceptance of benefits doctrine did not prevent
an appeal from a void judgment, we withdrew our opinion on April 26, 2012 and
reinstated the appeal for further consideration.
Motion to Dismiss
Generally, a party that accepts benefits under a judgment is estopped from
challenging the judgment on appeal. Tex. State Bank v. Amaro, 87 S.W.3d 538,
544 (Tex. 2002); Carle v. Carle, 149 Tex. 469, 234 S.W.2d 1002, 1004 (1950). “A
litigant cannot treat a judgment as both right and wrong, and if he has voluntarily
accepted the benefits of a judgment, he cannot afterward prosecute an appeal
therefrom.” Carle, 234 S.W.2d at 1004. The rule is based on the principle of
4
estoppel, but is subject to certain exceptions. Id. The burden is on the
movant/appellee to demonstrate the application of the acceptance of benefits
doctrine. Waite v. Waite, 150 S.W.3d 797, 803 (Tex. App.—Houston [14th Dist.]
2004, pet. denied). The appellee may rely on an affidavit attached to the motion to
dismiss. See Richards v. Richards, 371 S.W.3d 412, 414 (Tex. App.—Houston
[1st Dist.] 2012, no pet.); Argovitz v. Argovitz, No. 14-04-00885-CV, 2005 WL
2739152, at *2 (Tex. App.—Houston [14th Dist.] Oct. 25, 2005, no pet.) (mem.
op.).3 Once an appellee establishes an acceptance of benefits, as Brad did here, the
burden shifts to the appellant to demonstrate either that the doctrine does not apply
or that an exception to the doctrine applies. Gathe v. Gathe, 376 S.W.3d 308, 313
(Tex. App.—Houston [14th Dist.] 2012, no pet.).
Kedren argues the acceptance of benefits doctrine does not apply in this case
because (1) she is appealing from a void judgment, (2) she is entitled to the funds
and reversal of the judgment would not affect her right to the funds (“Entitlement
Exception”), and (3) she only received cash benefits which could be taken into
account by the trial court in the event of a redistribution of the marital estate upon
remand (“Cash Benefits Exception”). We will discuss each argument in turn.
Estoppel May Apply to a Void Judgment
Kedren first contends that the acceptance of benefits doctrine does not apply
because she is appealing a void judgment. Kedren is correct that a judgment
rendered on a settlement agreement after one of the parties revokes consent is void.
See S & A Rest. Corp. v. Leal, 892 S.W.2d 855, 857 (Tex. 1995); Samples
Exterminators v. Samples, 640 S.W.2d 873, 875 (Tex. 1982); In re M.A.H., 365
3
As discussed above, Brad stated in his affidavit that he wrote a check for $125,000,
payable to Kedren, and she endorsed it and received the funds. Kedren does not deny her receipt
of the funds in her response. See Argovitz, 2005 WL 2739152, at *2 (finding similar evidence
sufficient to support dismissal of appeal).
5
S.W.3d 814, 818 (Tex. App.—Dallas 2012, no pet.).4
However, a party, by conduct, may be estopped from challenging a
judgment as void. Mueller v. Banks, 332 S.W.2d 783, 786 (Tex. Civ. App.—San
Antonio 1960, no writ) (holding party that accepted benefits under judgment was
estopped from asserting judgment was void because it was entered without his
consent, stating “[i]t is well settled in this State, based upon sound principles of
equity, that one who accepts and retains the benefits and fruits of a judgment is
thereafter estopped to assert its invalidity, and that a party may lose his right to
attack a void judgment by such conduct as to work an equitable estoppel”);
Marshall v. Lockhead, 245 S.W.2d 307, 308 (Tex. Civ. App.—Waco 1952, writ
ref‟d n.r.e.) (holding party accepting benefits under judgment was estopped from
asserting judgment was void because court lacked personal jurisdiction over party);
Eldridge v. Eldridge, 259 S.W. 209, 215 (Tex. Civ. App.—San Antonio 1924, no
writ) (holding party was estopped from attacking void judgment where his fraud
aided in obtaining judgment).
The application of estoppel in a particular case does not necessarily mean
the judgment in question is thereby rendered valid; it simply means that the
estopped party will not be heard to assert the judgment‟s invalidity in order to
avoid its provisions. See Restatement (Second) of Judgments § 66 cmt. a (1982)
(discussing rationale and historical development); 50 C.J.S. Judgments § 758 (“A
void judgment cannot be made valid by ratification, waiver, consent, or estoppel.
However, one may be estopped or barred from attacking a void judgment by
reason of his or her conduct, and one who accepts or shares in the benefits of a
void judgment may be estopped from attacking it.”); see also In re E.R., 385
4
We assume, without deciding, that the instant judgment was rendered after Kendra
revoked her consent.
6
S.W.3d 552, 568-69 & n.30 (Tex. 2012) (citing Restatement section 66, comment
a, and holding a party could not challenge a void judgment under certain
circumstances if the party unreasonably delayed in seeking relief); Restatement
(Second) of Judgments § 74 cmt. c (“[T]here is solid authority for the proposition
that relief should be denied from a judgment that is „void‟ if the equities are
compelling enough.”).
A judgment is void only when the issuing court had no jurisdiction over the
parties or property, no jurisdiction over the subject matter, no jurisdiction to enter
the particular judgment, or no capacity to act as a court. Browning v. Placke, 698
S.W.2d 362, 363 (Tex. 1985). As Kedren points out, there is authority indicating
that estoppel cannot prevent a party from challenging subject matter jurisdiction.
See Shirley v. Maxicare, Tex., Inc., 921 F.2d 565, 568-69 (5th Cir. 1991) (holding
accepting benefits under judgment did not bar party from challenging subject
matter jurisdiction); Rhodes v. State, 240 S.W.3d 882, 891 (Tex. Crim. App. 2007)
(“„One who accepts the benefits of a judgment, decree, or judicial order is estopped
to deny the validity or propriety thereof, or of any part thereof, on any grounds; nor
can he reject its burdensome consequences.‟ The only exception to this principle is
for challenges to the subject-matter jurisdiction of the court rendering the
judgment.”) (quoting Corpus Juris Secundum); Ex parte Williams, 65 S.W.3d 656,
658-59 (Tex. Crim. App. 2001) (Keller, P.J., concurring) (examining civil
authority and concluding that void judgments are not immune from estoppel
considerations unless the invalidity of the judgment is due to a lack of subject
matter jurisdiction); 31 C.J.S. Estoppel and Waiver § 172 (explaining that a party
that accepts benefits under a judgment is estopped from challenging the validity of
that judgment except on subject matter jurisdiction grounds).5
5
We recognize, of course, that none of these authorities would control our analysis in the
7
Kedren, however, does not challenge subject matter jurisdiction in the
present case; she, in fact, does not dispute that the trial court had jurisdiction over
the subject matter and the parties involved in this litigation. Instead, she contends
the trial court had no power to issue an agreed judgment after she had withdrawn
her consent to the Rule 11 Agreement. As discussed above, Brad has established
that Kedren accepted benefits under the judgment; in fact, she accepted the very
benefit she now challenges on appeal.6 Consequently, unless an exception to the
acceptance of benefits doctrine applies, Kedren is estopped from denying the
validity of the judgment.
Entitlement Exception
We now turn to the alleged exceptions to the acceptance of benefits doctrine.
The Entitlement Exception instructs that “as long as an appellant „accepts only that
which appellee concedes, or is bound to concede, to be due [her] under the
judgment, [she] is not estopped to prosecute an appeal which involves only [her]
right to a further recovery.‟” Amaro, 87 S.W.3d at 544 (quoting Carle, 234
S.W.2d at 1004). This exception is a narrow one. Carle, 234 S.W.2d at 1004;
Waite, 150 S.W.3d at 807. For it to apply, the appellant‟s right to the benefits
accepted must be unquestionable. Waite, 150 S.W.3d at 807.
present case even if Kedren were challenging subject matter jurisdiction. See generally Penrod
Drilling Corp. v. Williams, 868 S.W.2d 294, 296 (Tex. 1993) (explaining that Texas state courts
are not bound by Fifth Circuit pronouncements even on matters of federal law, which this is not);
Carr v. Smith, 22 S.W.3d 128, 133 (Tex. App.—Fort Worth 2000, pet. denied) (explaining that
Court of Criminal Appeals opinions are not binding precedent on courts of appeals sitting in civil
matters because it is not a reviewing court with jurisdiction over such matters). We cite them
merely in recognition that such authority exists.
6
The equities favoring estoppel are strong. Kedren originally consented to settlement of
the last remaining unresolved issue between the parties (the value of Texcalibur). She then
withdrew her consent, contending that she was due more for her interest in Texcalibur than was
allotted in the settlement. She then accepted the amount that she originally had agreed to receive
in exchange for releasing any interest in the company. This action was, in effect, a renewed
consent to the terms of the settlement agreement.
8
Kedren contends that, in the Rule 11 Agreement, the parties stipulated the
value of her interest in Texcalibur was $125,000; thus, Brad was bound to concede
that she would be entitled to at least that amount in exchange for her interest. She
further insists that, in the event she is found to have timely withdrawn her consent,
Brad would be limited on remand to an argument that the Rule 11 Agreement
should be enforced as a contract. Kedren is incorrect on both points.
In the Rule 11 Agreement, the parties agreed to settle their dispute over the
value of Texcalibur, and they stipulated therein that the Decree of Divorce would
otherwise reflect the associate judge‟s prior “rendition.” In other words, the parties
settled their dispute—with Brad agreeing to give Kedren $125,000 for her interest
and to avoid a less than “amicable working relationship”—but they did not
stipulate to the actual value of her interest. Kedren‟s argument is therefore based
upon an inaccurate factual premise. Moreover, if there were a remand in this case,
Brad would not be limited to seeking enforcement of the Rule 11 Agreement or
required to concede that Kedren was entitled to at least $125,000 for her interest in
Texcalibur. In a hypothetical remand, she might recover more; she might recover
less. See id. at 808.7 Consequently, Kedren has not met her burden of establishing
that the entitlement exception to the acceptance of benefits doctrine applies.
7
In a hypothetical remand, Brad might very well attempt to enforce the Rule 11
Agreement as a contract between the parties. See generally Padilla v. LaFrance, 907 S.W.2d
454, 461-62 (Tex. 1995) (holding trial court should have granted judgment based on
counterclaim to enforce Rule 11 settlement agreement on proper pleading and proof); Cook v.
Cook, 243 S.W.3d 800, 802-03 (Tex. App.—Fort Worth 2007, no pet.) (reversing and remanding
void agreed judgment based on Rule 11 agreement where one party had withdrawn consent prior
to rendition and noting other party had not pleaded for enforcement of agreement in court
below). Kedren cites no law, however, that would require Brad to pursue a breach of contract
action or that would set a floor for her possible recovery as the amount Brad was willing to settle
the case for in entering the Rule 11 Agreement.
9
Cash Benefits Exception
Lastly, Kedren contends that the Cash Benefits Exception applies because
the only benefit she accepted from Brad was cash, which the trial court could
simply have taken into account when making any new division of property in the
event of a remand, citing Demler v. Demler, 836 S.W.2d 696, 698 (Tex. App.—
Dallas 1992, no writ), disapproved on other grounds, Dallas Mkt. Ctr. Dev. Co. v.
Liedeker, 958 S.W.2d 382, 386 (Tex. 1997), and Trevino v. Trevino, 555 S.W.2d
792, 795-96 (Tex. App.—Corpus Christi 1977, no writ). Beyond stating her
contention, however, Kedren does not offer any analysis as to how this exception
would be or could be applied under the circumstances of this case. See Gathe, 376
S.W.3d at 313 (explaining that burden is on appellant to demonstrate an exception
applies). A contention not properly briefed is waived on appeal. See Tex. R. App.
P. 38.1(i); Garza v. Tex. Alcoholic Beverage Comm’n, 138 S.W.3d 609, 616 (Tex.
App.—Houston [14th Dist.] 2004, no pet.); see also Brown v. Green, 302 S.W.3d
1, 14-15 (Tex. App.—Houston [14th Dist.] 2009, no pet.) (declining to turn party‟s
conclusory statements into reviewable appellate arguments).
Moreover, in Waite, we distinguished Trevino and another case where the
cash benefits accepted were relatively small in comparison with the total value of
the community property, because the trial court in those cases readily could have
taken the amounts into account on remand. Waite, 150 S.W.3d at 806-07
(distinguishing Trevino, 555 S.W.2d at 795 (noting former wife accepted $5,000),
and Haggard v. Haggard, 550 S.W.2d 374, 376 (Tex. Civ. App.—Dallas 1977, no
writ) (noting former wife accepted $400)).8 In Waite itself, the party accepting
8
In Demler, the former wife accepted $5,383.96 in benefits along with $2,355.79 in
attorney‟s fees. 836 S.W.2d at 697-98. While the Demler court did not provide details regarding
the total value of the marital estate, it concluded that “[i]t appears from the property settlement
that [former wife] will have sufficient assets to cover a possible reimbursement.” Id. at 698.
10
benefits took nearly all of the community property, thus precluding easy
rebalancing on remand. Id.
Here, Kedren accepted benefits in the form of a $125,000 check from Brad.
The marital estate possibly could be large enough so a cash benefit in that amount
would not prejudice Brad‟s rights in the event of a remand; however, Kedren has
not offered any support for such a conclusion. Neither the trial court‟s decree, the
parties‟ Rule 11 Agreement, nor the associate judge‟s original findings offer an
overall value for the marital estate, much less for the portion awarded to Kedren.
The parties‟ proposed property divisions offer very different figures for total value.
Kedren does not cite or discuss any evidence of total value. She also does not offer
any evidence on appeal to assist our analysis.9 Accordingly, she has not met her
burden to demonstrate that the Cash Benefit Exception applies in this case.
Conclusion
In his motion to dismiss, Brad established that Kedren accepted benefits
under the final order that she now challenges on appeal. In response, Kedren has
failed to demonstrate either that the accepted benefits doctrine does not apply
under the circumstances of this case or that an exception to the doctrine applies.
Consequently, we grant the motion and dismiss the appeal. See Gathe, 376 S.W.3d
at 313.
/s/ Martha Hill Jamison
Justice
Panel consists of Justices Boyce, Christopher, and Jamison.
9
We additionally note that Kedren did not post a supersedeas bond in this case, which
may have obviated application of the acceptance of benefits doctrine. See Sprague v. Sprague,
363 S.W.3d 788, 793-94 (Tex. App.—Houston [14th Dist.] 2012, pet. denied); Raymond v.
Raymond, 190 S.W.3d 77, 80 (Tex. App.—Houston [1st Dist.] 2005, no pet.).
11