What is a Rule 11 Agreement?
A Rule 11 Agreement in the context of a Texas divorce is an agreement reached by the parties and signed by their attorneys. The purpose of a Rule 11 Agreement is to memorialize the agreement of the parties during the course of a pending divorce action or other litigation (typically unresolved issues related to the pending case). However, a Rule 11 Agreement must not violate the statutes or case law of the state of Texas (unlike a motion to transfer, an example of an unenforceable Rule 11 Agreement).
A Rule 11 Agreement is part of the contractual law of the State of Texas (See Phillips v. Beaber, 32 S.W.3d 180, 185 (Tex. App.—Texarkana 2000, no pet.)(citing Hill v. Heritage Resources, Inc., 964 S.W.2d 89, 91 (Tex. 1997)). It allows the parties to contract in relation to the assets, debts, children, visitation rights, etc. as the parties see fit (within the bounds of the law). See Phillips at 185. The agreement can be used by the court to formalize the agreements between the parties using the Rule 11 Agreement as a guide (See Jones v. Farrar, 74 S . W.3d 23, 28-29 (Tex. App.—Corpus Christi 2002, no pet.); Phillips v. Beaber, 32 S.W.3d 180, 185 (Tex. App.—Texarkana 2000, no pet.) (holding that Rule 11 Agreement satisfying criteria of Tex. R. Civ. P. 11 is enforceable judge may not set agreement aside due to dissatisfaction with its terms); Tully v. Harbin, 599 S.W.2d 884, 887 (Tex. Civ. App.—El Paso 1980, no writ.) ?>
The Texas Supreme Court has explained a Rule 11 Agreement as follows: (1) There is a complete agreement as to all material parts of the matter; (2) the agreement is not disputable as being in violation of conscious public policy, but exists in reasonable agreement and is neither unconscionable nor unjust; (3) the court approved the agreement and thereby entered an order carrying it into effect. See Bradt v. Garrison Independent School Dist., 934 S.W.2d 731, 734-736 (Tex. 1996)(en banc)(citing Cantu v. Cantu, 764 S.W.2d 782, 783 (Tex. 1989); Ex parte Williams, 659 S.W.2d 205, 206 (Tex. 1983); see also Garcia v. State, 172 S.W.3d 311, 316 (Tex. Crim. App. 2005).
Necessary Legal Components of a Rule 11 Agreement
It is important to understand that, even when all parties to a divorce or custody decision subject to a Rule 11 Agreement have signed the agreement, the agreement is not legally binding until it conforms to formal requirements in these types of legal disputes. The first requirement is that the agreement must be in writing. Verbal agreements have no legal status under Texas law.
Because Texas courts have such an interest in the welfare of children, a Rule 11 Agreement concerning custody must also be presented to the court for approval by filing the signed copy with the court clerk. Typically, the court will review the agreement and cross-sign where necessary. The full record of the court proceeding should then be made available to the appellate court if needed to enforce the agreement in the future.
Typical Applications of a Rule 11 Agreement
One of the most common uses of a Rule 11 Agreement in a Texas divorce case is for an agreed temporary order. With extensions possible for up to 20 days, Mr. Stacey is usually able to reach a resolution with opposing counsel regarding the appointment of a Temporary Sole Managing Conservator while the divorce proceedings are ongoing. Typically, he will agree with opposing counsel to leave possession and access of children with the residential parent for a period of time while the divorce is being completed. The parties are ordered to complete their initial disclosures currently.
After discovery cutoff, there may be instances where agreed temporary orders are used to memorialize a temporary division of assets and liabilities. In such an instance, the parties would agree as to how certain tangible property was to be distributed to each party pending final trial in the divorce proceeding. It is not uncommon for a temporary distribution of community property estate or real estate to be made in a Rule 11 Agreement. In such a situation, the parties would normally agree that the person possessing a particular asset or liability shall continue to possess and own that asset or liability pending further orders of the Court. It should be noted that the parties to a Rule 11 Agreement in a divorce proceeding do not have preclusive effect on the Court to finally divide the assets and liabilities in the divorce.
Parties in a Texas divorce proceeding can outline and incorporate in a Rule 11 Agreement with the other spouse for temporary spousal maintenance. Typically, a Rule 11 Agreement outlines precisely how a certain amount of spousal support (from four months to five years) can be paid on a temporary basis pending final trial in the divorce proceeding. Usually, the attorneys will decide if such amounts of spousal maintenance are reasonable and can be relied on by the spouse receiving the funds until final trial.
Benefits of a Rule 11 Agreement
One of the primary advantages of entering into a Rule 11 Agreement as opposed to a traditional final decree is that it forces you and your spouse to make crucial decisions regarding the divorce early in the legal process. When divorces begin to drag on, spouses often go along with whatever their attorney tells them to do, relying on their trusted counselor to pave the way for them through the legal process. However, as the divorce process continues, parties can start to question the decisions their attorney is telling them to make. This can be the sign of a very costly divorce. Getting parties in a room together early in the process can help get the groundwork in order and prevent underlying tension regarding key issues from reaching a head later on. Also, the sooner you begin the settlement process, the sooner you can begin your emotional healing process, and that can be invaluable to your mental state.
Additionally, Rule 11 Agreements are also useful because they are often more cost effective than lengthy litigation, and they can help preserve more quickly salvaged relationships. If you drauddenly do not want to get divorced anymore or simply cannot afford the cost of proceeding, a Rule 11 Agreement can bring finality to the divorce process. It is worth seeing if you and your spouse can come to an agreement on key issues early on in order to save yourself thousands of dollars in legal fees and preserve the financial assets you have left to divide between you. Such is the great power of a Rule 11 Agreement.
Drawbacks and Concerns with a Rule 11 Agreement
There are several potential risks and limitations to relying on such an Agreement in your divorce, such as the Agreement not being enforceable or requiring an oath before it is enforceable.
Another potential risk you run by relying on a Rule 11 Agreement is that entering into the agreement means that any future disagreements must be resolved through litigation, dispute resolution processes or lawyers. Also be aware that the law may change and invalidate the contents of Rule 11 Agreements, and most Rule 11 Agreements have to be mutually agreed upon. While there are exceptions to this rule in other states, such as Pennsylvania, where a party can obtain a court order based on the written stipulations of the parties, in Texas, courts are unlikely to order anything contained in the Agreement. Another drawback to a Rule 11 Agreement is that they are often revoked in the attorneys’ offices. While this is acceptable, at least in some jurisdictions, it arguably reduces the power of the contract. In concluding the divorce (i.e., signing the final decree), both parties must be agreeable to the contents of the decree. It can’t just be one party’s idea of what the final decree should say, and it is probably a good idea for the other spouse’s attorney is present at the time of signing the final decree as a signal to the non-represented spouse that the other spouse is not acting unilaterally.
How to Create a Rule 11 Agreement
A Rule 11 Agreement must be precise. It is best that a Judge not have to interpret the meaning of the written agreement that has been entered into by the parties.
These are basic steps for entering into and enforcing a Rule 11 Agreement in a Texas divorce case:
- Consider discussing the terms of the agreement with an attorney; however, you can enter into a Rule 11 Agreement without an attorney’s assistance.
- Draft the Rule 11 Agreement. Be as specific as possible and include all details of the agreement.
- Both parties must sign the Rule 11 Agreement before the agreement can be enforced through a motion to enforce.
4 . Once the Rule 11 Agreement is signed, send a copy of the agreement to the Court Reporter. Both parties should obtain a copy of the "Statement of Facts" from the Court Reporter.
- Most Rule 11 Agreements will be on the record in open court. You must make your request for the Judge to enter the terms on the record prior to the conclusion of the Court’s session.
- Draft the enforceable Motion and Order asking the Judge to enforce the Rule 11 Agreement. Be aware of the 30 day limitation of filing a motion to enforce once the final decree is signed by the Judge.
- Present the motion to the Judge requesting enforcement and provide a copy of Rule 11 Agreement to the Judge for review.
Contesting a Rule 11 Agreement
There are few grounds for challenging a Rule 11 Agreement in Texas divorce court or seeking to have it declared void. It is a fact specific inquiry which turns on the situation of the parties and the ruling of the trial court. The challenge must be raised by the party seeking to challenge the agreement and filed with the court in a pleading. In other words, mere recitation, without or in the presence of an attorney, of "I don’t understand what I signed, and I want out," is not enough to convince a judge than a Rule 11 Agreement is invalid.
In Most v. Most, an appellate court in Texas held that recision of a contract is an available remedy when there has been: 1) a mutual mistake of material fact; 2) one party is at fault; and, 3) there was no negligence by the other party.
In the situation where property incorrectly presented and agreed to in the Rule 11 Agreement significantly changes value between the date of the Rule 11 Agreement and the date the divorce is granted, it may be evidence of a mistake. For example, if an automobile had only 10,000 miles on it at the time of the Rule 11 Agreement signing, but a week before the final hearing on the divorce, it is totaled in a wreck, the party who missed the use of the automobile during that time might be entitled to some compensation from the other party to their marriage based on a mistake of that vehicle’s value when it was agreed to be awarded as a part of a Rule 11 Agreement.
Similarly, if an investment property (for example, one which houses a shop or rental property) rapidly increases in value due to the sale or appreciation of the property after the Rule 11 Agreement is signed, it might be evidence of a mistake. For example, might be evidence of a mistake. For example, if a party to the divorce was initially going to receive shares of stock in a closely held corporation, the manager of which sold the business a month later and the stock traded at $8.00 a share when they initially reached the Rule 11 Agreement, but traded at $100 a share when the divorce was granted months later, it might be evidence of a mistake. In this case, the party may be entitled to some compensation from the other party to the divorce.
In discussing the parties to a Rule 11 Agreement, you should consider the converse of these examples, where the mistaken information tips the other way and the party seeking to enforce the Rule 11 Agreement is the one who suffers. For example, if a party to a divorce was originally to receive 30% of the shares of stock in a closely held corporation, the manager of which sold the business a month later and the stock traded at $8.00 a share when they initially reached the Rule 11 Agreement, but traded at $3.00 a share when the divorce was granted months later, it might be evidence that the party should not be allowed to acquire the stock and the Rule 11 Agreement should be set aside.
Another example might be if an investment property (for example, one which houses a shop or rental property) rapidly decreases in value due to the sale or devaluation of the property after the Rule 11 Agreement is signed. For example, if a party to the divorce was initially going to receive the right to buy properties on a graduated schedule, where they could buy land for $100,000, then the next year it would be $110,000, $120,000, etc., with the last year being at $200,000 per property, but the property sold for a large sum before the first graduate increase and it is now worth only $1.00, it might be evidence that the party should not be allowed to acquire the property at the prices contained in the Rule 11 Agreement, and the rule 11 agreement should be set aside.
Real-Life Examples of a Rule 11 Agreement in Action
In our previous discussions of Rule 11 Agreements and how they work in Texas Divorces, we’ve seen that Rule 11 Agreements can be used to "contract around" legal procedures or limit the scope of a divorce appeal. In this section we take a look at two Rule 11 Agreement cases to show you how this important divorce tool is actually used.
Mason v. Mason
As late as 2014 the Texas Second Court of Appeals was faced with a Rule 11 Agreement dilemma – does a Rule 11 Agreement survive the preceding trial or is the appeal moot?
In Mason v. Mason, Dad was unhappy with the judge’s orders and refused to sign said orders without requesting a few changes. The mom complied, and the doc was filed into the court of the case. Her ex signed the Rule 11 Agreement and the judge agreed his terms should be added. Dad appealed.
Mom then made a request for enforcement, which Dad contested. Our maverick dad refused to sign the orders and instead asked for a new trial, saying he was not in fact making a judicial admission. The judge didn’t agree, and ordered the standards of conservatorship be followed. Dad appealed.
The Second Court of Appeals determined Dads motion for new trial was an attempt to have his cake and eat it, too, and since he didn’t request a new trial while present for the judge to rule on the Rule 11 Agreement, and that Judge originally gave him the chance to ensure the orders were correct before attesting to them.
Sargent v. Sargent
Mother was unhappy with the judge’s orders and appealed, she and the ex-husband spent the next few days hammering out the Rule 11 Agreement. The agreement was signed by both counsel and filed, the appeal was dismissed and the lower court’s ruling upheld.
This agreement was essential to both parties’ interests because it allowed for flexibility in the schedule – a long distance visitation schedule would not have helped mother correct the behavior she disagreed with while also allowing for visitation in the best interest of the children.
In the Agreement, which didn’t specifically list the children, both parents agreed to alternate the weekends and visitation times, and Sargent was held in contempt for missing visits. By creating a schedule based on the children’s preferences, the Sargents were able to demonstrate flexibility while adhering to a schedule.
Seeking the Help of Counsel
It is essential to consult with an attorney when drafting or signing a Rule 11 Agreement. It is always a good idea to have an attorney review the terms of a Rule 11 Agreement before you sign it, and to have your attorney draft the agreement if at all possible to help protect your interests. While it is not always necessary to have an attorney present when this type of agreement is made in court , a judge can only do so much to protect your interests or explain the law to you. If you want to know what your rights really are under the law, and how any type of agreement should be drafted from a legal standpoint, it is best to get an attorney to handle the case.