NUMBER 13-11-00779-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
YVONNE BRACAMONTES, Appellant,
v.
FRANCISCO BRACAMONTES, Appellee.
On appeal from the County Court at Law No. 4
of Hidalgo County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Benavides and Perkes
Memorandum Opinion by Justice Benavides
In this divorce case, appellant Yvonne Bracamontes asserts that the trial court
erred by failing to enter judgment on her and her ex-husband’s, appellee Francisco
Bracamontes’s, mediated settlement agreement. Specifically, Yvonne argues that the
trial court erred in determining that the language in the parties’ mediated settlement
agreement: (1) only required Francisco to pledge his hospital stock up to the amount of
his debt to Yvonne; (2) required the parties to split the cost of health insurance and
unreimbursed medical expenses for their two children; and (3) required Yvonne to pay
her taxes with her own funds and not with the funds from the former couple’s joint tax
account. We reverse and remand.
I. BACKGROUND
Yvonne and Francisco were married on June 25, 1993. On August 5, 2009,
Yvonne filed for divorce from Francisco. At the time the divorce was sought, both parties
were physicians who owned stock in Doctors Hospital at Renaissance (DHR), a
physician-owned hospital facility located in Edinburg, Texas.
Yvonne sought temporary orders concerning the couples’ two children and their
community property. On September 2, 2009, the trial court ordered the following,
among other things, with regard to the children:
(1) Yvonne and Francisco were joint managing conservators of the
children, with Yvonne maintaining the exclusive right to establish the
children’s primary residence in Hidalgo County, Texas;
(2) During the school year, the children would stay with Yvonne for
eight consecutive evenings and then with Francisco for six
consecutive evenings, with vacation time to be divided equally;
(3) Francisco would pay $3,000 monthly in child support to Yvonne; and
(4) Francisco would maintain the children on his health insurance
policy, as well as on the medical savings accounts.
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After the temporary orders were in place, Francisco filed an answer and
counter-petition on September 9, 2009. On April 1, 2011, the parties went to mediation.
After a two-day mediation, at which both parties were represented by counsel, the parties
agreed to certain terms. The pertinent provisions, for the purpose of this opinion, are set
forth below:
(1) [Francisco] shall buy out [Yvonne’s] net interest and [Yvonne] shall
buy out the [Francisco’s] net interest in their respective DHR stock.
After offsets, [Francisco] shall pay [Yvonne] $1.4 million dollars as
follows:
1. $300,000 cash at closing;
2. 1.1 million will be financed by [Yvonne] (“Debt”), payable as
follows:
a. Security. The Debt shall be secured by all community
assets including [Francisco’s] DHR stock.
b. Interest. The Debt shall accrue simple interest at 3% per
annum.
c. Maturity. The Debt shall mature and be payable in full on
the 5th anniversary of closing.
....
(14) Each PA1 shall pay their own 2010 taxes and 2011 taxes prorated
through the date of divorce. Except that the money in the tax
account shall be used to pay the taxes which will be due from the
distributions/dividends generated from the DHR shares.
....
1
Yvonne’s attorney clarified on the record that “PA” refers to a “professional association.” As
physicians, Yvonne and Francisco maintained separate “PA’s” or medical offices.
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(16) The provisions for conservatorship, possession, geographic
restriction and child support as set forth in the Temporary Orders
dated September 2, 2009 shall be included in the final decree.
Importantly, the last clause of the agreement had the following language in all
capital letters and in bold print: “THIS MEDIATED SETTLEMENT AGREEMENT IS
NOT SUBJECT TO REVOCATION. A PARTY TO THIS AGREEMENT IS ENTITLED
TO JUDGMENT ON THIS AGREEMENT.” The agreement was signed by both Yvonne
and Francisco and their respective attorneys.
On August 29, 2011, the parties appeared before the trial court for a final hearing
on the divorce and entry of a decree. At that time, Francisco represented that the parties
would need help clarifying certain issues “that either didn’t come up during the
mediation . . . or perhaps they were, and we have different interpretations of what’s in
black and white.” The three issues that are the subject of this appeal are: (1) the
amount of collateral for Francisco’s $1.4 million note to Yvonne, (2) who would pay for the
children’s health insurance, and (3) access to the tax account.
Regarding the collateral, the mediated settlement agreement set forth that
“[Francisco’s] [d]ebt [to Yvonne] shall be secured by all community assets including
[Francisco’s] DHR stock.” Francisco argued that this provision should be interpreted as
meaning that only stock up to the amount of his debt to Yvonne should be held as
collateral, not all of the stock. Francisco’s attorney explained as follows:
The interpretation that they’re trying to make of the mediated settlement
agreement is completely unreasonable. What is normal and customary is
that when you go and get a loan, you secure it adequately. It doesn’t
mean you secure it with everything you have . . . [Francisco] needs the
ability to make moves and respond. Maybe he needs to borrow money to
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pay taxes, maybe he needs to borrow money to put his children through
school . . . and we’re kind of going, ‘Um man, I really wish we hadn’t agreed
to that, because the first time one of [Francisco and Yvonne’s] properties
sell, then [Francisco is] going to have a tax liability, a capital gain on that
that we didn’t reserve for, and—because we got to use all the money to
apply it against the note. And so that’s another example of why we may
need some of this DHR stock.
Yvonne’s attorney responded that the nature of stock market shares, particularly
in the health care industry, is volatile. For that reason, Yvonne intentionally bargained
for all of Francisco’s stock to be used as collateral because the value of that stock was
unpredictable.
With respect to the children’s health insurance, under the temporary orders,
Francisco was required to pay the children’s health care insurance premiums. At the
final hearing, Francisco stated that he would only continue to do so if he was allowed to
count the children as tax deductions in his annual income taxes. Otherwise, Francisco
wanted to split the health insurance and any additional medical costs not covered by
insurance with Yvonne. Yvonne countered that, as the possessory parent, federal
income tax law allowed her to claim the children for deductions.2 She also noted that
Francisco willingly signed the mediated settlement agreement stating that the temporary
orders, which covered the children’s health insurance, would be adopted into the divorce
decree.
On the topic of the tax account, Francisco argued that the “tax account” was
actually a bank account under his name. He contended that he was prudent enough to
2
See 26 U.S.C.A. § 152(c)(4)(B) (2008).
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save for the taxes on the income from his DHR shares, so he should be able to recoup
the benefits from that planning. Yvonne’s attorney responded as follows:
It very clearly says that [‘]except that the money in the tax account shall be
used to pay taxes that will be due from the distribution dividends generated
from the DHR shares[’]. . . We contracted in the mediation agreement that
those tax accounts would be divided prorated depending on the DHR
shares, the total DHR shares. We didn’t specify his DHR shares. We
would have specified his DHR shares if he was going to get it, but we said
DHR shares. So we’re asking that the Court prorate it between his shares
and her shares, because the money that was in those accounts were as of
the date of the mediation. It was all community assets.
The trial court ultimately granted the Bracamontes divorce that day, but took these
matters under advisement.3
On September 20, 2011, the trial court issued a written order on the disputed
issues. With respect to the DHR stock, the trial court ordered that Francisco “be allowed
to post enough security (not all security) to cover the promissory note.” Regarding the
children’s health insurance, Yvonne was ordered “to pay half of the children’s health
insurance and half of all current child expenses which exceed the child support
payments.” Finally, the court ruled that Yvonne was “not entitled to any money from
[Francisco’s] bank account known as the tax account.” Yvonne appealed.
II. APPLICABLE LAW
“Texas has a public policy of encouraging the peaceful resolution of disputes,
particularly those involving the parent-child relationship, and the early settlement of
3
The trial court took other matters under advisement, as well, such as the payment of vacation
expenses and which parent would have access to the children’s passports. Those matters, however, were
not appealed and are not before this Court.
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pending litigation through voluntary settlement procedures.” Boyd v. Boyd, 67 S.W.3d
398, 402 (Tex. App.—Fort Worth 2002, no pet.). Texas Family Code section 6.602
governs mediated settlement agreements incident to divorce:
(a) A mediated settlement agreement is binding on the parties if the
agreement:
(1) provides, in a prominently displayed statement that is in
boldfaced type or capital letters or underlined, that the
agreement is not subject to revocation;
(2) is signed by each party to the agreement; and
(3) is signed by the party's attorney, if any, who is present at the
time the agreement is signed.
(b) If a mediated settlement agreement meets the requirements of this
section, a party is entitled to judgment on the mediated settlement
agreement notwithstanding Rule 11, Texas Rules of Civil Procedure,
or another rule of law.
TEX. FAM. CODE ANN. § 6.602 (West 2006).
A party to a mediated settlement agreement meeting the requirements of section
6.602 is entitled to judgment on the agreement. Boyd, 67 S.W.3d at 402; see Herszage
v. Herszage, 13-06-257-CV, 2007 Tex. App. LEXIS 6548, at *13 (Tex. App.—Corpus
Christi Aug. 16, 2007, no pet.) (mem. op.) (“An agreement pursuant to section 6.602 of
the Texas Family Code is wholly different than a typical agreement incident to divorce;
an agreement under 6.602 cannot be revoked before judgment. . . .”). In construing the
language of section 6.602, “we presume the Legislature intended the plain meaning of its
words.” Cayan v. Cayan, 38 S.W.3d 161, 165 (Tex. App.—Houston [14th Dist.] 2000,
7
no pet.) (citing National Liab. & Fire Ins. Co. v. Allen, 15 S.W.3d 525, 527 (Tex. 2000)).
“The plain meaning of section 6.602 could hardly be more clear: a section 6.602
agreement is binding, i.e., irrevocable, and a party to one is entitled to judgment based
on the agreement.” Id.
“An agreement that meets the requirements of section 6.602 is ‘more binding than
a basic written contract.’” In re Joyner, 196 S.W.3d 883, 889 (Tex. App.—Texarkana
2006, pet. denied). However, a trial court need not enforce a mediated settlement
agreement "if it is illegal in nature or was procured by fraud, duress, coercion, or other
dishonest means." Id. at 890.
“Whether a contract is ambiguous is a question of law for the court to decide.”
Lopez v. Munoz, Hockema & Reed, 22 S.W.3d 857, 861 (Tex. 2000) (citing R & P
Enters. v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 518 (Tex. 1980). “In
construing contracts, we must ascertain and give effect to the parties' intentions as
expressed in the document.” Id. “A contract is not ambiguous if it can be given a certain
or definite legal meaning or interpretation.” Id. (citing Columbia Gas Transmission Corp.
v. New Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996)).
III. ANALYSIS
A. The DHR Stock Pledge
By her first issue, Yvonne argues that the trial court erred when it only required
Francisco to pledge his hospital stock up to the amount of his debt to Yvonne. The
language from the mediated settlement agreement states as follows: “the Debt shall be
secured by all community assets including Respondent’s DHR stock.”
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Francisco argues that this language is ambiguous and that, therefore, it was in the
trial court’s discretion to apply a “more reasonable and customary” interpretation of this
contractual term. We disagree. This language is clear and unequivocal—Yvonne’s
note was secured by “all community assets including [Francisco’s] DHR stock.” The
parties contracted for all of the DHR stock to be held as collateral. This contractual
provision “can be given a certain or definite legal meaning or interpretation” and is not
ambiguous. See Lopez, 22 S.W.3d at 861. When the court ruled that Francisco “be
allowed to post enough security (not all security) to cover the promissory note,” it
changed the meaning of what the parties negotiated after a two-day mediation.4
“[T]he purpose of mediation [under section 6.602] is to let parties settle their
property as they see fit, keeping those matters out of the courtroom.” See In re Joyner,
196 S.W.3d at 889; Cayan, 38 S.W.3d at 166 (reasoning that the Legislature created a
"procedural shortcut" by enacting section 6.602 so that parties could enforce this
settlement agreement as soon as it was signed). Here, the trial court unnecessarily
interfered in an agreement which the parties had knowledgably negotiated and agreed to
with the advice of counsel. Because Francisco does not argue that the mediated
settlement agreement was “procured by fraud, duress, coercion, or other dishonest
means,” Yvonne is entitled to have it entered. In re Joyner, 196 S.W.3d at 890.
4
We further note that there is evidence that Francisco drafted the agreement. Texas common
law recognizes that agreement should always be construed against the writer. “It is a well-established
principle of contract construction . . . that contract language is generally construed strictly against the party
who drafted the instrument, since the drafter is responsible for the language.” Gonzalez v. Mission Am.
Ins. Co., 795 S.W.2d 734, 737 (Tex. 1990). If Francisco only meant to pledge his DHR stock up to the
amount of his note to Yvonne, he should have drafted the mediation settlement agreement accordingly.
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We sustain Yvonne’s first issue.
B. The Health Insurance and Unreimbursed Medical Expenses
Yvonne’s second issue contends that Francisco should be required to pay the
health insurance as he was ordered to in the temporary orders and as he agreed to do as
part of the mediated settlement. The temporary orders provided that: “The provisions
for conservatorship, possession, geographic restriction and child support as set forth in
the Temporary Orders dated September 2, 2009 shall be included in the final decree.”
Contrary to Francisco’s assertions, this provision is clear and unambiguous.
“When a contract is unambiguous we will enforce it as written.” See Lopez, 22 S.W.3d
at 862. The trial court erred when it ordered Yvonne “to pay half of the children’s health
insurance and half of all current child expenses which exceed the child support
payments” because the parties did not negotiate to split the health insurance and related
medical expenses. In the absence of any claims of fraud, duress, or coercion, see In re
Joyner, 196 S.W.3d at 890, Yvonne is entitled to have the mediation settlement as
negotiated entered into the record. See Cayan, 38 S.W.3d at 165.
We sustain Yvonne’s second issue.
C. The Tax Fund
By her third issue, Yvonne argues that the trial court erred when it ruled that
Yvonne was “not entitled to any money from [Francisco’s] bank account known as the
tax account.” The mediated settlement agreement specifically stated the following:
“Each PA shall pay their own 2010 taxes and 2011 taxes prorated through the date of
divorce. Except that the money in the tax account shall be used to pay the taxes which
10
will be due from the distributions/dividends generated from the DHR shares.” The trial
court, however, held that Yvonne was “not entitled to any money from [Francisco’s] bank
account known as the tax account.”
Whether a contract is ambiguous is a question of law for a court to determine by
examining the contract as a whole in light of the circumstances present when the
contract was made. Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983). Again, we
hold that the language from the mediated settlement agreement was clear and
unambiguous. There is no mention in the mediated settlement agreement that the bank
account was under Francisco’s name alone. There was no delineation as to whether
Francisco or Yvonne’s DHR shares would be covered by the monies. These tax
accounts were community property at the time of the divorce and were split accordingly.
The parties and their attorneys voluntarily agreed to this division, and the trial court had
no authority to disturb their agreement. See Cayan, 38 S.W.3d at 165 (holding that
agreements under section 6.602 are binding and that a party to one is entitled to
judgment based on the agreement.). We sustain Yvonne’s third issue.
IV. CONCLUSION
Having sustained all of Yvonne’s issues, we reverse the judgment and remand
this case to the trial court for proceedings consistent with this opinion.
__________________________
GINA M. BENAVIDES,
Justice
Delivered and filed the
25th day of July, 2013.
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