In a property division of a complex estate in a Texas divorce, one party may be given the option to purchase the other spouse’s interest in real property or a business. The divorce decree may include terms regarding the purchase option, including deadlines, contingencies, and requirements that the other spouse cooperate by signing documents. In a recent case, a former wife sought a bill of review after she did not complete the purchase of the marital residence from the former husband by the deadline stated in the decree.
The trial court signed a Final Decree of Divorce Nunc Pro Tunc in March 2020. Both parties “approved and consented to” the form and substance of the decree. The decree gave the wife the right to purchase the marital residence, which was in the husband’s name. However, if she failed to purchase the property and close by September 1, 2020, she would waive any interest in the property and it would remain the husband’s sole and separate property.
On August 27, 2020, she sent a letter and real estate contract with a September 24 closing date to the husband. He did not respond and the wife failed to buy the property and close by the deadline.
The wife petitioned for enforcement, alleging the husband had failed to cooperate with her as required by the decree. She asked the court to order him to refinance or sell the property within a specified time period.
She testified they had not reached an agreement, but had talked about her assuming the mortgage. She said their discussions on the matter had broken down in April 2020. The husband denied they had discussed the wife assuming the mortgage.
The wife said a credit union told her she could not get a loan to buy the property because she was an owner. She could only refinance and assume the loan, which she said she was ready to do. The husband, however, had to sign off on it.
The husband said, however, they agreed the wife would pay cash, possibly getting money from her family. He said he did not respond to the contract because the closing date was after the deadline. He said if the wife had provided cash or an approved home loan before the closing deadline he would have sold the property to her.
The trial court denied the wife’s petition because she had not met the purchase terms in the decree.
Clarification Order
The wife “approved and consented” as to form and substance a clarification order, but the signed proposed order the husband filed had a title identifying the order as an “Agreed Order.” The addition of “Agreed” was the only difference between the orders.
When the wife learned of the change, she asked the husband’s attorney to notify the court not to sign it, but did not contact the court herself. The judge signed the order on September 21, 2022.
The wife filed objections and withdrawal of consent two days later. The clerk did not know the order had been signed and set a hearing. The parties learned at the hearing that the order had been signed.
Bill of Review
The wife filed a bill of review arguing the trial court improperly changed the decree and that she had a right to withdraw consent to the agreed order. The trial court denied the bill of review, finding the wife had failed to purchase and close on the property by the deadline in the final decree. The court found she did not have a meritorious claim regarding the real property. She appealed.
Wife’s Appeal
To succeed on a petition for bill of review, a party who participated in trial must assert that they failed to timely move for a new trial or appeal the judgment because of an official mistake or fraud, accident, or a wrongful act of the other party. They must also show that their own fault or negligence was not involved in their failure to act. Additionally, they must show they had a meritorious ground of appeal before trial. In this case, however, the trial court did not make a determination regarding a prima facie showing of a meritorious ground of appeal before trial.
The wife argued the agreement did not require a cash purchase and the court had improperly changed the terms of the agreement. She also argued she had the right to withdraw consent to the agreement before the judgment was entered and that she did so.
The order required the wife to purchase the property and close before September 1, 2020, but it did not address her ability to assume the mortgage or require her to buy with cash. The appeals court noted none of the court’s findings required her to pay cash. The requirement was that she purchase the property and close before September 1.
The trial court determined credibility of the witnesses and could have believed the husband’s testimony he had not agreed to an assumption of the mortgage. The wife also presented no evidence the decree required the husband to take any action to assist in her purchasing the resident.
The husband offered evidence the wife was denied a loan based on her credit score on September 10, 2020. He also presented evidence she presented him a sales contract with a closing date after the deadline.
The appeals court concluded the record supported the finding the wife failed to purchase and close on the property before September 1, 2020. The appeals court found no error in the court’s denial of the wife’s bill of review.
Withdrawal of Consent
The husband argued the wife had failed to timely communicate a withdrawal of consent to the clarification order.
She had “approved and consented” to the form and substance of the clarification order and the only change to the filed order was the addition of “Agreed.” The wife’s attorney emailed the husband’s attorney on September 10, 2022, and informed them of the problem and asked them to “cancel” the order, indicating she would file a motion or objection “if necessary.”
On September 12, when the husband’s attorney contacted the clerk, the clerk indicated she could remove the order from the judge’s queue. The husband’s attorney advised the wife’s attorney “to go ahead and file your objections if you feel it is necessary.”
The docket entry dated September 13 stated “Do not sign sending new one. . . “ The judge signed the order on September 21, 2022, however. On September 23, the wife filed objections and withdrawal of consent.
Generally, a party may revoke consent to an agreement before judgment is rendered by effectively communicating the withdrawal to the court.
The wife acknowledged she did not notify the court before the order was signed, but argued the husband’s attorney had done so as her intermediary. The appeals court rejected the wife’s argument that opposing counsel could communicate the wife’s withdrawal of consent. The appeals court also rejected the wife’s reliance on the docket entry, noting that a docket entry generally is not part of the record to be considered on appeal.
Additionally, the docket entry did not indicate withdrawal of consent by either party. Instead, it just informed the court not to sign. The appeals court concluded it was not “clearly sufficient” to put the judge on notice of a withdrawal of consent. The appeals court therefore could not conclude the judge had actual knowledge consent had been withdrawn when the order was signed. The appeals court found no error in the court’s denial of the bill of review.
The appeals court concluded the wife had not met her burden of showing a prima facie case for a meritorious ground of appeal. The appeals court affirmed the judgment.
Call a Knowledgeable Texas Divorce Attorney
This case shows the importance of the terms of an option agreement in a property division. A party agreeing to an option should be sure they can meet the terms to which they are agreeing and consider whether alternatives such as assuming a loan should be included. If you are dealing with a divorce involving a complex estate with separate property or business interests, a skilled Texas divorce lawyer can advise you and help you negotiate a fair agreement. Schedule a consultation with McClure Law Group at 214.692.8200.