Opinion
No. 14-01-00854-CV.
Affirmed as Modified, in part, Reversed and Remanded, in part, and Opinion filed April 17, 2003.
On Appeal from the 309th District Court, Harris County, Texas, Trial Court Cause No. 93-06003A.
Panel consists of Justices HUDSON, EDELMAN, and SEYMORE.
OPINION
In this case to enforce an agreement incident to divorce, Margaret Dye Sudan, now known as Maggie Mackenzie ("Mackenzie"), appeals a summary judgment granted in favor of Philip P. Sudan, Jr. ("Sudan") and the denial of her own motion for summary judgment. We affirm as modified, in part, and reverse and remand, in part.
Background
In 1993, the parties entered into an agreement incident to their divorce (the "agreement") that was incorporated into their divorce decree (the "decree"). In 1998, the parties entered into an amendment to the agreement (the "amendment"). In 1999, Mackenzie sued Sudan for rescission of the amendment, breach of the agreement, intentional infliction of emotional distress, and tortious interference. After the parties filed cross motions for summary judgment, the trial court granted Sudan a partial summary judgment, denied Mackenzie's motion, and severed the remaining claims.
At the time of the parties' divorce, they had two minor children.
Those remaining claims are for non-payment of child support, life insurance premiums, and attorney's fees.
Standard of Review
A traditional summary judgment may be granted if the motion and summary judgment evidence show that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law on the issues expressly set out in the motion or response. Tex.R.Civ.P. 166a(c). In reviewing a traditional motion for summary judgment, we take all evidence favorable to the nonmovant as true and resolve every doubt, and indulge every reasonable inference, in the nonmovant's favor. D. Houston, Inc. v. Love, 92 S.W.3d 450, 454 (Tex. 2002).
A no-evidence motion for summary judgment must be granted if: (1) the moving party asserts that there is no evidence of one or more specified elements of a claim or defense on which the adverse party would have the burden of proof at trial; and (2) the respondent produces no summary judgment evidence raising a genuine issue of material fact on those elements. See Tex.R.Civ.P. 166a(i). In reviewing a no-evidence summary judgment, we review the record in the light most favorable to the nonmovant to determine whether more than a scintilla of evidence was presented on the challenged elements of the nonmovant's claim. See Wal-Mart Stores, Inc. v. Rodriguez, 92 S.W.3d 502, 506 (Tex. 2002).
Where summary judgment has been requested by both sides, granted to one, and denied to the other, we determine all questions presented and, if the judgment is in error, render that which the trial court should have rendered. Dow Chem. Co. v. Bright, 89 S.W.3d 602, 605 (Tex. 2002).
Lack of Court Approval for Amendment
Mackenzie's first and fourth issues challenge the granting of Sudan's, and denial of her, motion for summary judgment to the extent those decisions were based on the amendment. She contends that the amendment concerned child support and was therefore unenforceable for lack of court approval.
In Texas, the Legislature has expressly required that parental agreements concerning child support be expressly approved by the court based on whether the agreement is in the child's best interest. Accordingly, agreements by parents to reduce or modify court-ordered child support obligations without such approval violate public policy and are unenforceable.
Williams v. Patton , 821 S.W.2d 141, 143-44 (Tex. 1991) (citing former Family Code Section 14.06, currently Tex. Fam. Code Ann. § 154.124 (Vernon 2002) and explaining at length the policy reasons for requiring courts to expressly determine whether agreements regarding child support are in the child's best interest).
State v. Borchers, 805 S.W.2d 880, 882 (Tex.App.-San Antonio 1991, writ denied); Rogers v. Griffin, 774 S.W.2d 706, 707 (Tex.App.-Texarkana 1989, no writ); Shannon v. Fowler, 693 S.W.2d 54, 57 (Tex.App.-Fort Worth 1985, writ dism'd); Ex parte Payne, 598 S.W.2d 312, 317 (Tex.Civ.App.-Texarkana 1980) (orig. proceeding); Houtchens v. Matthews, 557 S.W.2d 581, 587 (Tex.Civ.App.-Fort Worth 1977, writ dism'd); In re McLemore, 515 S.W.2d 356, 357 (Tex.Civ.App.-Dallas 1974, orig. proceeding).
In this case, the decree contains the following provisions:
The Court finds that the parties have entered into an Agreement Incident to Divorce. The Court approves the agreement and makes it part of the Decree as if it were recited verbatim. A copy of the agreement is attached to this Decree as Exhibit 1.
* * * *
It is ORDERED AND DECREED that [Sudan] shall pay no direct child support for so long as alimony under paragraphs 3.02(a) or 3.02(b) of the [agreement] is being paid by him. If, for any reason alimony payments under those paragraphs is terminated before all living children of the parties have reached the age of 18 and have graduated from high school, then it is ORDERED and DECREED that [Sudan] is obligated to pay . . . [to Mackenzie], child support of $6000.00 per month . . . [until the second to occur of a child reaching age 18, marrying, dying, or being emancipated or relieved of legal disability; or] [f]urther order modifying this child support.
Similarly, the agreement contains the following provisions:
2.02 The purposes of this Agreement are to:
* * * *
(b) Settle the obligations of each party for the support of . . . the children. . . . Specifically, it is the intent and purpose of this Agreement . . . for [Sudan] to fulfill his continuing duty to provide support for the children. . . .
* * * *
3.02 [Sudan] shall make contractual alimony payments to [Mackenzie] under the following conditions: . . . .
* * * *
(k) If, for any reason, alimony payments under paragraphs 3.02(a) and/or 3.02(b) and/or 3.02(c) terminate prior to June 1, 2000, or terminate before either of the children . . . has graduated from high school, then, in addition to any alimony payable under paragraphs 3.02(d) and/or 3.03, [Sudan] shall pay to [MacKenzie] child support in the amount of $6000.00 per month. . . . until both children have reached the age of 18. . . . [or] the end of the school year in which [a] child [enrolled in high school] graduates.
6.03 It is agreed that child support will be paid by [Sudan] according to the terms of paragraph 3.02(j) [sic] . . . and as specified in the [decree].
This reference appears to be a typographical error in that paragraph 3.02(j) of the agreement pertains only to termination of contractual alimony payments if Mackenzie remarried and does not mention child support; whereas paragraph 3.02(k) provides a child support obligation in the event the specified alimony payments terminate.
11.12 This Agreement may be amended or modified only by a written instrument signed by both parties, except those provisions . . . concerning the . . . support . . . of the children, which may be modified only by order of a Court of appropriate jurisdiction.
The amendment contains the following provisions:
WHEREAS the [agreement] specified contractual alimony and other payments by [Sudan], based upon certain assumptions including that both children . . . would reside with [Mackenzie] subsequent to the divorce until each child had obtained the age of majority; and
WHEREAS as a result of circumstances unforeseen at the time the parties entered the [agreement], the children . . . do not reside with [Mackenzie] and the parties desire to modify and amend the [agreement] to take into account these changed circumstances.
NOW, THEREFORE, [Sudan and Mackenzie] agree as follows:
1. Payment of Lump Sum Amount. [Sudan] agrees to make a final, one-time contractual alimony payment to [Mackenzie] of $30,000 . . . (the "Final Payment"). [Mackenzie] accepts the Final Payment as full and final payment of all amounts payable by [Sudan] under the [agreement] and . . . acknowledges that the Final Payment constitutes full and final satisfaction of all obligations between the parties under the [agreement].
(emphases added). The portions of the amendment italicized above purport to relieve Sudan of not only the contractual alimony obligation, but also the child support obligation that would have otherwise been triggered, under both the decree and the agreement, by termination of the contractual alimony obligation. To that extent, the amendment effected a modification of Sudan's child support obligation and required court approval under both the terms of the decree and agreement and the law of Texas. In that no such court approval was obtained for the amendment, and that, at the time it was entered, none of the specified circumstances had been met that would have concluded the child support obligation, this modification of Sudan's child support obligation was unenforceable.
Sudan contends that Mackenzie is estopped from asserting the lack of court approval by a provision in the amendment whereby the parties agreed to execute and file documents and take other action necessary in furtherance of the purposes underlying the amendment. Because Sudan alleges that Mackenzie failed to obtain court approval in compliance with this provision, he asserts that she should not be able to complain of the lack of court approval to defeat the amendment. We disagree with this contention in two respects. First, to the extent the amendment obligated each party to seek court approval, it placed no greater obligation on Mackenzie to do so than Sudan, and especially in that it is Sudan who now wishes to rely on it. Second, and more importantly, the requirement for court approval is a matter of public policy to assure that the best interest of the child is always considered. See Williams , 821 S.W.2d at 143-44. Because the amendment is invalid as against public policy, it cannot be rendered enforceable by estoppel. See In re Kasschau , 11 S.W.3d 305, 314 (Tex.App.-Houston [14th Dist.] 1999, orig. proceeding).
As a general rule, where part of the consideration for an agreement is illegal, the entire agreement is void if the contract is entire and indivisible. In re Kasschau, 11 S.W.3d 305, 313 (Tex.App.-Houston [14th Dist.] 1999, orig. proceeding). An exception applies where the original consideration for the contract is legal, but nonessential promises within the contract are found to be illegal. Id. A contract is also divisible where performance by one side consists of multiple distinct items and the consideration provided by the other party is apportioned separately to each. See Johnson v. Walker, 824 S.W.2d 184, 187 (Tex.App.-Fort Worth 1991, writ denied). In such a case, the court may sever the invalid provision and uphold the valid portion. See Kasschau, 11 S.W.3d at 313. Severability is determined by the intent of the parties as evidenced by the language in the contract. Id. The issue is whether the parties would have entered into the agreement absent the illegal parts. Id.
In this case, the agreement includes a severability clause but the amendment does not. However, even a severability clause is ineffective where the invalid provision is integral to the entire contract. See John R. Ray Sons, Inc. v. Stroman , 923 S.W.2d 80, 87 (Tex.App.-Houston [14th Dist.] 1996, writ denied).
In this case, the amendment calls for a single lump sum payment to extinguish all remaining obligations under the agreement. There is no apportionment of consideration among any separate items of performance and nothing in the amendment to reflect that the parties would have entered into it (or for what differing amount of lump sum payment) had extinguishment of the child support obligation either not been included in the agreement or failed to be approved by a court. Nor can we infer that the extinguishment of a child support obligation is a nonessential element of the amendment. Under these circumstances, we conclude that the amendment is not severable or divisible, and, accordingly, that the invalidity of the child support modification invalidates the entire amendment. Therefore, we sustain Mackenzie's fourth issue and the applicable portion of her first issue and need not address her remaining challenges to the amendment or its effect on her claims.
Accordingly, we do not reach: (1) Mackenzie's challenges to the amendment based on rescission, economic duress, or lack or failure of consideration; or (2) Sudan's modification, release, ratification, compromise and settlement, accord and satisfaction, payment, waiver, estoppel and novation defenses to Mackenzie's contract claims, which are based on the amendment.
Breach of Contract
In addition to seeking summary judgment against Mackenzie's contract claim based on the amendment, Sudan's motion for summary judgment also asserted that there was no evidence that he breached a contract or that Mackenzie incurred damages as a result. Mackenzie's first issue challenges the summary judgment on this ground, among other reasons, based on the evidence in her affidavit attached to her summary judgment response. In stating that Sudan made none of the payments required by the agreement after July of 1998, the affidavit is some evidence of a breach by Sudan and damages being suffered by Mackenzie. Accordingly, we sustain Mackenzie's first issue with regard to her breach of contract claim.
Intentional Infliction of Emotional Distress
Mackenzie's first issue also challenges the summary judgment against her claim for intentional infliction of emotional distress ("intentional infliction"). Among other things, Sudan's motion for summary judgment asserted there was no evidence that his conduct was extreme and outrageous. Mackenzie's brief contends that Sudan's conduct was extreme and outrageous in that he emotionally abused her and attempted to establish control over her through the use of money and threats to interfere with her relationship with her children.
To prevail on her claim for intentional infliction, Mackenzie would have to prove that: (1) Sudan acted intentionally or recklessly; (2) his conduct was extreme and outrageous; (3) his actions caused Mackenzie emotional distress; and (4) her emotional distress was severe. See Tex. Farm Bureau Mut. Ins. Co. v. Sears, 84 S.W.3d 604, 610 (Tex. 2002). To be extreme and outrageous, a defendant's conduct must be so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized society. Id. Conduct that is merely insensitive or rude is not extreme and outrageous. Id. Likewise, mere insults, indignities, threats, annoyances, petty oppressions, or other trivialities do not rise to the level of extreme and outrageous conduct. Id.
The court decides whether a defendant's conduct may reasonably be regarded as so extreme and outrageous as to permit recovery. Id. In deciding whether particular conduct rises to this level, courts consider both the conduct's context and the parties' relationship. Id. at 610-11. Although a defendant's motive or intent is relevant to an intentional infliction of emotional distress claim, it is not enough to support liability. Id. at 612. Rather, the conduct itself must be extreme and outrageous. Id.
In this case, Mackenzie does not cite a case in which the type of conduct she alleges has been found actionable for intentional infliction. Nor does she specify any particular instance in which Sudan's alleged conduct can objectively be characterized as so outrageous in character and extreme in degree as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized society. Under these circumstances, Mackenzie has failed to demonstrate error in granting summary judgment against her intentional infliction claim, and her first issue is overruled with regard to it.
Tortious Interference
Mackenzie's first issue also challenges the summary judgment against her claim for tortious interference with business relations. Among other grounds pertaining to this claim, Sudan's motion for summary judgment asserted that there was no evidence that he directed any conduct to any third party with whom Mackenzie had a business relationship. Neither Mackenzie's summary judgment response nor her appellate brief sought to challenge this contention legally or factually. Where, as here, summary judgment against a claim is sought on multiple alternative grounds, an appellant's failure to challenge each ground asserted allows the summary judgment to be affirmed on the unchallenged ground(s). Because Mackenzie has not challenged Sudan's summary judgment ground asserting no evidence of interference with any party with whom Mackenzie had a business relationship, she has not demonstrated error in granting summary judgment against her tortious interference claim.
Mackenzie claims that, in 1998, Sudan interfered with her business relationships with her bank, mortgage company, insurance company, and employer by: (1) informing her of his intent to stop making payments under the agreement, which were necessary for her to maintain those relationships; (2) verbally abusing her; and (3) thereby coercing her to enter into the amendment. Mackenzie alleges that she acceded to Sudan's demand to enter into the amendment because she was emotionally distraught, believed she could not fight Sudan due to his position and influence, and needed the lump sum payment he offered in order to "buy" time to sell her assets and adjust her lifestyle.
See, e.g., Holloway v. Skinner, 898 S.W.2d 793, 794-95 (Tex. 1995) (recognizing tortious interference as a claim by a party to a contract against a third person for wrongly inducing another contracting party to breach the contract).
See Guzman v. Carnevale, 964 S.W.2d 311, 313 (Tex.App.-Corpus Christi 1998, no pet.); Beavers v. Goose Creek Consol. Indep. Sch. Dist., 884 S.W.2d 932, 934 (Tex.App.-Waco 1994, writ denied); Langston v. Eagle Publ'g Co., 719 S.W.2d 612, 615 (Tex.App.-Waco 1986, writ ref'd n.r.e.).
Fraudulent Inducement
Sudan moved for summary judgment against Mackenzie's claim for fraudulent inducement of the agreement, asserting, among other things, that there was no evidence that Sudan made any actionable misrepresentation. Mackenzie challenges the summary judgment against this claim on the ground that the following are evidence that Sudan entered into the agreement with no intention of performing it: (1) at the time the agreement was negotiated (leading up to the divorce), Sudan refused to disclose, or allow Mackenzie to share in, the value of his law practice or his retirement account; (2) in the divorce, Sudan would not let Mackenzie have her dream house and forced her to find another place for her and their children to live; and (3) a few months after his re-marriage, Sudan decided the agreement was no longer fair and unilaterally breached it.
A promise of future performance constitutes an actionable misrepresentation if, at the time it was made, the promisor had no intention of performing it. See Formosa Plastics Corp. USA v. Presidio Eng'rs and Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998). However, the mere failure to perform a contract is not evidence of fraud. Id. Rather, there must be evidence relevant to the promisor's intent at the time the promise was made. See id.
In this case, of the three items of evidence enumerated above that Mackenzie relies upon to show fraudulent inducement, the first two may arguably support an inference of bitterness or belligerence but are not probative of Sudan's intent with regard to performing the agreement. Similarly, the third item is evidence of only the subsequent breach and not Sudan's intent at the time of entering into the agreement. In that Mackenzie has not cited evidence of Sudan's intent at that time not to perform the agreement, she has not demonstrated that summary judgment was entered against her fraudulent inducement claim in error, and her first issue is overruled.
Accordingly, we: (1) modify the trial court's judgment to provide that the amendment is unenforceable; (2) affirm the judgment as to all claims other than Mackenzie's claim for breach of the agreement; and (3) reverse the summary judgment against that claim and remand the case to the trial court for further proceedings with regard to it.