Mediated Settlement Agreement is a Contract and Should be Interpreted under Contract Law
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In Loya v. Loya, the Texas Supreme Court faced the question of whether a mediated settlement agreement partitioned an employee bonus that was received nine months after the divorce decree was entered.
According to the court’s opinion, the divorce litigation lasted over two years. The trial court ordered mediation, resulting in an MSA signed by the parties and their attorneys.The MSA stated that it served as a partition of all property and any disputes relating to drafting or interpretation would be arbitrated.
The trial court rendered an oral judgment on the MSA the day after it was signed. The parties then drafted a decree and agreement incident to divorce, where disagreements arose. Those disputes were arbitrated, with the arbitrator ruling that the MSA language on “all future income and earnings” of the husband would be placed in the AID. After arbitration, the wife moved to set aside the MSA, arguing that there was no mutual assent because the parties did not reach agreement on the division of the community interest in the husband’s bonus that might be paid later. The trial court denied that motion.
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