An Ambiguous Agreement is Still an Agreement

Originally published by Carrington Coleman.

In re Lauriette
Dallas Court of Appeals, No. 05-15-00518-CV (August 20, 2015)
Justices Francis, Myers (Opinion), and Schenck

Kelli Hinson

An agreement is enforceable even if the parties can’t agree on what it means. The Dallas Court of Appeals granted mandamus to require the trial court to determine “the parties’ true intentions.”

In this divorce proceeding, Sharon and Samy Lauriette entered into a mediated settlement agreement, which provided in part that Samy would pay Sharon $7,500 per month for 72 months and that the payments would terminate only if, at some point, Samy became the Sole Managing Conservator of their child under the agreement. The agreement also provided the formal divorce decree would be prepared “consistently with the Texas Family Law Practice Manual form.”

During the drafting of the divorce decree, a dispute arose between the parties as to whether the decree should state the monthly payments would terminate upon Sharon’s death—a detail that has substantial tax consequences for both parties. Sharon argued they had agreed the payments would terminate only upon the one identified condition, while Samy argued the Texas Family Law Practice Manual form they had agreed to use dictated the payments should cease upon Sharon’s death. After a hearing, the trial court determined the settlement agreement contained an ambiguity that could not be resolved and vacated the agreement.

The Dallas Court of Appeals conditionally granted Sharon’s petition for mandamus, finding the trial court abused its discretion in vacating the agreement. The Court held an alleged ambiguity is not a valid ground to set aside the agreement. Instead, following the Texas Supreme Court’s guidance in Milner v. Milner, it concluded the trial court had a duty “to resolve ambiguities in the agreement by determining the parties’ true intentions.” The Court also concluded mandamus was appropriate to correct this abuse of discretion because forcing the parties to litigate a dispute that had already been settled would deprive the parties of the benefits of a mediated settlement agreement.

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