Prieto, C. M. v. Prieto, Jose C. ( 2002 )

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COURT OF APPEALS

EIGHTH DISTRICT OF TEXAS

EL PASO, TEXAS

C.M. PRIETO,

Appellant,

JOSE C. PRIETO,

Appellee.

No. 08-01-00477-CV

Appeal from the

65th District Court

of El Paso County, Texas

(TC# 98CM4310)

O P I N I O N

C.M. Prieto appeals an agreed decree of divorce and the trial court=s denial of her motion for rehearing. We affirm.

Facts

After eleven and a half years of marriage, Jose C. Prieto filed a petition to divorce his wife C.M. Prieto. After three years and three motions for continuance from C.M. Prieto, the court held its final hearing. On August 21, 2001, both parties appeared through their attorneys, Mr. Garay for the petitioner/appellee and Mr. Williams for the respondent/appellant, and announced ready. Neither party to the divorce was present. Mr. Prieto, due to illness and inability to attend proceedings, had been deposed by his attorney, who was prepared to present that evidence to the court.

Counsel for both parties proceeded and announced an agreement had been reached between the parties as to property division. (The couple had no children.) The agreement was presented to the court by appellee=s attorney Mr. Garay with full disclosure of its binding nature. Mr. Garay began, AWe have reached an agreement with regard to the divorce proceeding. We had a final set for today at 2:00 o=clock. If I may, I=d like to announce the agreement into the record and consider it a Rule 11 agreement.@ The parties stipulated that both parties had been domiciled in Texas for the preceding six months and residents of El Paso County for the preceding ninety-day period. Although the details were not complete, the parties agreed that Ms. Prieto would have the right of first refusal on purchase of the couple=s house, followed by Mr. Prieto, then, if both parties fail to exercise their option, the house was to be placed on the open market. A letter from Mr. Williams to Mr. Garay shows that Ms. Prieto intended to buy Mr. Prieto=s interest in the house. Each party was to be responsible for his or her debts. The judge granted the divorce on that day, and the attorneys for both parties left the courtroom intending to reach an agreement and prepare a decree rather than have another hearing on entry of judgment.

Mr. Prieto died on September 10, 2001.

Mr. Williams filed a motion for rehearing on September 20, 2001, claiming that he communicated with Ms. Prieto through her daughter and that Ms. Prieto did not understand the agreement she was making. The motion also stated that she had a meritorious defense and that granting the rehearing would not injure Mr. Prieto. The trial court entered judgment on October 23, 2001. At that hearing, appellant=s attorney Mr. Williams made a motion to withdraw, which was granted. Appellant=s new counsel Ms. Everhart then made a motion for rehearing. She argued that the new trial was necessary for three reasons. First, she complained that residency and domicile were not properly proved at the first hearing, and that these requirements cannot be waived. Second, she claimed that the original attorney was fired because Ms. Prieto Adid not agree to the things that were presented to the Court in that case. She did not understand what was being presented and she did not agree to it.@ Third, there was no understood agreement in writing between the parties to be presented to the trial court. The trial court then declared that the final decree created by Mr. Garay was in accord with the Rule 11 agreement that was recited into the record on August 21, 2001, and granted the final decree of divorce.

Standard of Review

Appellant=s points of error require this Court to review matters under two separate standards. The decision by the trial court to exercise subject matter jurisdiction over the divorce is a matter of law, so that determination will be reviewed de novo. Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998). The trial court=s acceptance of a Rule 11 agreement from the parties is reviewed under an abuse of discretion standard. See McCaskill v. McCaskill, 761 S.W.2d 470, 473 (Tex. App.--Corpus Christi 1988, writ denied). The test for an abuse of discretion is not whether, in our view, the facts present an appropriate case for the trial court=s action. Instead, the court of appeals determines whether the court acted without reference to any guiding rules and principles. Coots v. Leonard, 959 S.W.2d 299, 301 (Tex. App.--El Paso 1997, no pet.) (citing Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 133 S.W.2d 124, 126 (1939)). In other words, the court of appeals looks to whether the trial court=s act was arbitrary or unreasonable. Id. (citing Smithson v. Cessna Aircraft Co., 665 S.W.2d 439, 443 (Tex. 1984); Landry v. Travelers Insurance Co., 458 S.W.2d 649, 651 (Tex. 1970)). Specifically, in this analysis, this Court will look to see if there was any indication or notice before the trial court that the requisite consent to agreement was lacking on the part of either party. See McCaskill, 761 S.W.2d at 473.

Parties validly stipulated as to residency requirement

Appellant=s first point of error claims that the trial court erred in granting judgment with insufficient evidence to establish that either party had met the residency requirement for instituting a divorce. Her fourth point of error claims that this is a legal conclusion and the trial court could not accept a stipulation on this issue as part of a Rule 11 agreement. Both claims are inconsistent with current Texas law.

Texas Family Code section 6.301 sets forth the general residency rule for divorce suits in Texas:

A suit for divorce may not be maintained in this state unless at the time the suit is filed either the petitioner or the respondent has been:

(1) a domiciliary of this state for the preceding six-month period; and

(2) a resident of the county in which the suit is filed for the preceding 90-day period.

Tex. Fam. Code Ann. ' 6.301 (Vernon 1998). Statutory residency requirements are not jurisdictional, but do prescribe qualifications that must be met before the court is authorized to grant a divorce. McCaskill, 761 S.W.2d at 472. Appellant rightly argues that this requirement must be pleaded and proven and cannot be waived. See id. at 473. However, the current case does not deal with a waiver of the requirement; rather, the matter presented is a stipulation that the underlying facts are true. Stipulating to residency and domicile is a common practice in divorce cases. See Svensen v. Svensen, 629 S.W.2d 97, 97 (Tex. App.--Dallas 1981, no writ) (divorce case stipulating when and where husband established Texas residency); see also Creavin v. Moloney, 773 S.W.2d 698, 700 (Tex. App.--Corpus Christi 1989, writ denied) (child custody case accepting stipulation of residency and citizenship of mother and child in Ireland and father in Texas). Attorney Garay stated in open court A[b]oth parties have been domicile of this state for the preceding six-month period and residents of this county for the preceding 90 day period.@ If this was not within the agreement of the parties, an objection should have been made at that time. No such action was taken by Ms. Prieto=s attorney. Further, the record indicates that the house owned by the parties was owned free and clear in El Paso county, and that Ms. Prieto considers El Paso to be her home. Thus, the stipulation appears to be both reasonable and corroborated. We see no error in the trial court=s finding of October 23, 2001:

Somebody [at the final hearing] said testimony is not going to be necessary because we have a Rule 11 agreement. They recited the Rule 11 agreement, which talks about jurisdiction, where we had a proposed testimony [by deposition of Mr. Prieto] which was, the Court was informed it was not necessary because of the agreement.

I=m going to find that we had jurisdictional testimony on that day based on the Rule 11 agreement. I=m going to enter the decree as of today=s date, but the divorce was granted on the 17th [sic] of August.

Appellant=s first and fourth points of error are overruled.

The agreement in open court is valid and binding under Rule 11

Appellant=s second point of error claims the trial court should not have adopted the parties= agreement without their personal consent to a binding Rule 11 agreement. Similarly, her third point of error urges that her attorney exceeded the scope of his authority in entering the agreement. We do not agree.

Rule 11 sets out the minimum requirements for enforcing agreements concerning pending suits.

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 (emphasis added). See also Kennedy v. Hyde, 682 S.W.2d 525, 528-29 (Tex. 1984). This rule has been consistent in its requirements since 1892 when the phrase Aor unless it be made in open court and entered of record@ was added. Kennedy, 682 S.W.2d at 526. The rule has been used in divorce agreements by the courts. E.g., Samara v. Samara, 52 S.W.3d 455, 456 (Tex. App.--Houston [1st Dist.] 2001, pet. denied); Chandler v. Chandler, 991 S.W.2d 367, 389 (Tex. App.--El Paso 1999, pet. denied), cert. denied, 529 U.S. 1054, 120 S.Ct. 1557 (2000); Becker v. Becker, 997 S.W.2d 394, 395 (Tex. App.--Beaumont 1999, no pet.). The original purpose of the rule was to avoid the uncertainty and misunderstandings which characterize oral agreements between counsel regarding the disposition of a case. Kennedy, 682 S.W.2d at 526-27 (citing Birdwell v. Cox, 18 Tex. 535, 537 (1857)). The procedure requires either a writing or an open declaration in court so that a memorialization of the agreement upon which the matter before the court are disposed are not left to the Afallibility of human recollection.@ Id. at 530 (citing Wyss v. Bookman, 235 S.W. 567, 569 (Tex. Comm=n App. 1921, holding approved)). The rule also provides judicial efficiency by sorting through undisputed matters and encouraging amicable settlement agreements. Id.

The attorney-client relationship is one of agent and principal; the acts of the former ordinarily binds the latter. Oliver v. Kroger, 872 F.Supp. 1545, 1549 (N.D. Tex. 1994); Texas Emp. Ins. Ass=n v. Wermske, 349 S.W.2d 90, 93 (Tex. 1961); American Home Assur. Co. v. Rodriguez, 749 S.W.2d 897, 899 (Tex. App.--San Antonio 1988, no pet.). Within these roles, every reasonable presumption is to be indulged in favor of the attorney duly employed. Oliver, 872 F.Supp. at 1549 (citing Webb v. Webb, 602 S.W.2d 127, 129 (Tex. App.--Austin 1980, no writ)); Ebner v. First State Bank of Smithville, 27 S.W.3d 287, 300 (Tex. App.--Austin 2000, pet. denied). The most important presumption of agency is that the agent acts in accordance with the wishes of the principal. However, when the evidence reveals that the attorney did not have the client=s authority to agree, the agreement will not be enforced. Ebner, 27 S.W.3d at 300. Thus, the presumption of authority of the attorney is a rebuttable one.

Although appellant=s third point of error raises the question of whether Mr. Williams exceeded the scope of his authority, it does not rebut the presumption that his actions were under the direction of Ms. Prieto. The third point of error claims that Ms. Prieto did not understand the agreement that had been presented to the trial court, and that she repudiated the agreement in her motion for rehearing filed September 20, 2001.^{^[1]} This withdrawal of consent was untimely. Withdrawal of consent must be made prior to the rendition of judgment, and when it is withdrawn in a timely manner such withdrawal must be respected. Burnaman v. Heaton, 150 Tex. 333, 338-39, 240 S.W.2d 288, 291 (1951); Becker, 997 S.W.2d at 395; Baccus v. Baccus, 808 S.W.2d 694, 699 (Tex. App.--Beaumont 1991, no writ). Judgment was rendered in open court on August 21, 2001. Entry of judgment was made on October 23, 2001. Rendition of judgment is distinguishable from the entry of judgment, a purely ministerial act by which judgment is made of record and preserved. Becker, 997 S.W.2d at 395. A letter from August 17, 2001 provides evidence that Ms. Prieto was intent on keeping the house and buying out Mr. Prieto=s interest, but is not evidence that she disclaimed the agreement presented in open court on August 21, 2001. Rather, it is merely evidence that she wished to exercise the option that had been reserved for her under the agreement. This is consistent with what was announced on that day and the right of first refusal. Therefore, we cannot see any evidence of absence of or withdrawal of consent prior to rendition of judgment that would suggest that Mr. Williams=s presentation of the agreement was beyond the scope of his authority.

Further, Ms. Prieto=s claim that she misunderstood the implications of what she had agreed to does not excuse her from the agreement. Here, the record simply shows that Ms. Prieto, through her attorney, came to an agreement with Mr. Prieto in the divorce arrangement. That agreement was entered on record in accordance with Rule 11. In essence, Ms. Prieto was entering a contract for the dissolution of the marriage. The general rule in Texas is that a unilateral mistake is insufficient to set aside a contract unless the mistake is induced by the acts of the other party. Oliver, 872 F.Supp. at 1550 (citing Interfirst Bank of Abilene v. Lull Manufacturing, 778 F.2d 228, 232 (5th Cir. 1985); Torchia v. Aetna Casualty and Surety Co., 804 S.W.2d 219, 224 (Tex. App.--El Paso 1991, writ denied)). An exception to this general rule is provided when: (1) the mistake is of so great a consequence to make enforcement of the contract unconscionable; (2) the mistake relates to a material element of the contract; (3) and the mistake is made regardless of the exercise of ordinary care. Id. These principles also apply to settlement agreements. There is no indication that Mr. Prieto in any way misled Ms. Prieto into the agreement. Ordinary care dictates that Ms. Prieto and her attorney discuss all the implications of her decision. Without any indication that Mr. Williams acted outside of the scope of his authority as her attorney, that she was tricked into making the agreement, that enforcement of the agreement would be unconscionable, or that the mistake was made despite an exercise of ordinary care, the Court cannot say that the trial court improperly accepted what was presented in open court as an agreement when it rendered judgment in this case. Points of Error Two and Three are overruled.

Conclusion

The trial court=s judgment is affirmed.

SUSAN LARSEN, Justice

December 27, 2002

Before Panel No. 5

Larsen, Chew, JJ., and Preslar, C.J. (Ret.)

Preslar, C.J. (Ret.), sitting by assignment

(Do Not Publish)

^{^[1]}Appellant=s brief claims that this first motion for rehearing was filed on September 9, 2001, the day prior to Mr. Prieto=s death. The clerk=s stamp on the document reveals the filing date of this document as September 20, 2001. The Certificate of Service statement certifies that the document was served on Appellee on September 21, 2001.