Rule 11 Agreement Explained
A Rule 11 Agreement is a binding, written agreement, signed by the attorneys and the litigants, filed with the appropriate court clerk, and entered as an order, that governs the parties’ conduct in the case. It is most often used in family law to: (1) agree on how issues will be handled during a case; (2) set dates, deadlines, or time limits; (3) extend or shorten time and/or delay deadlines that appear in statutes or Court orders; (4) shift the burden of proof; (5) obligate one party to pay the other party’s attorney’s fees or court costs in the event of a designated contingency. Most importantly, contract law applies to a Rule 11 Agreement. If the parties do not perform as required under the Rule 11 Agreement, then a party who is injured by a breach may recover actual damages, attorney’s fees, or any other relief available in a civil action for breach of a contract. A Rule 11 Agreement is statutorily defined as follows: Unless the agreement has been obtained through fraud , a written agreement between parties to pending suit . . . is enforceable if it is signed by all parties and by the party’s attorney, if any, in the presence of a district or county court clerk, or signed by the court. An agreement made in a pending suit is not enforceable against a party unless the agreement is also signed by the party or the party’s authorized representative, in the presence of the court or of the court’s deputy or clerk, or is entered as an order of the court. A Rule 11 Agreement must be filed with the appropriate clerk of the court in order to be enforceable. However, it need not be present in the file at the time the parties appear before the court. It suffices that the lawyer called attention to the agreement to the court and to opposing counsel as part of the offer of proof. A Rule 11 Agreement does not require consideration. An otherwise enforceable agreement does not lose its enforceability simply because it provides for payment to the attorney’s fees accruing in the future.
Requirements of a Rule 11 Agreement
A Rule 11 Agreement is unenforceable unless it meets the following legal requirements:
1. it must be made in open court, or
2. it is in writing and signed by each side of the case or their attorney.
In re Marriage of O’Connor, 650 S.W.2d 450, 451-52 (Tex. 1983).
The Agreement must meet the two conditions described above in order to be enforceable. In re Marriage of C.A.S., 984 S.W.2d 385, 386 (Tex. App.-Fort Worth 1999, no pet.); Woodland v. Johnson, 164 S.W.3d 631, 638 (Tex. App.-El Paso 2005, no pet.). The Rules of Civil Procedure do not apply to family law actions. Nonetheless, there is a strong public policy in favor of agreement, especially in the settlement of divorce or child custody matters, and very little, if anything, is gained by violation of the technical requirement concerning Rule 11 Agreements.
The parol evidence rule does not preclude extrinsic proof of settlement communications to prove a Rule 11 Agreement. McKhann v. McKhann, 930 S.W.2d 218, 223 (Tex. App.-Houston [1st Dist.] 1996, no pet.). Parol evidence is admissible for the limited purpose of showing that the parties intended an oral agreement to be binding despite the lack of a writing. Id. Parol evidence is also admissible to show that the parties intended their written rule 11 Agreement to be unenforceable until reduced to writing and signed by the parties. Id.; Lane Bank Equipment Co., Inc. v. Smith International, Inc., 885 S.W.2d 603, 615 (Tex. App.-El Paso 1994, writ dism’d w.op.).
An oral agreement which satisfies the two requirements of a Rule 11 Agreement is enforceable even if there is an incomplete reduction to writing. McIlhaney v. Seaquist, 572 S.W.2d 265, 267 (Tex. 1978); Schmidt v. Schmidt, 887 S.W.2d 415, 418 (Tex. App.-Texarkana 1994, writ denied).
It is important to remember that all Rule 11 Agreements are contracts. The Statute of Frauds requires that contracts for the sale of goods for the price of $500 or more, must be in writing. Tex. Bus. & Com. Code Ann. §26.01(a), (b)(3). However, sales of goods under $500 are not covered by the Statute of Frauds. Thus, a Rule 11 Agreement covering the sale of household items with an agreed value of less than $500 would not require a writing.
The Statute of Frauds does not require a signature by the party to be charged. Smith International, Inc. v. Egle, 960 S.W.2d 572, 575-76 (Tex. App.-Waco 1997, no pet.).
Uses of Rule 11 Agreements
Rule 11 Agreements are commonly used in Texas Family Law cases as a means to achieve finality in divorce and child custody matters. They are often employed when a spouse has a significant amount of assets that need to be divided and there is no great deal of disagreement as to their value but the parties are at odds as to the percentage that each party is to receive.
Throughout the course of a case, and at various times before the trial of a case, parties and attorneys reach verbal agreements on important issues which become binding when the agreement is placed into writing and signed, as required by Rule 11. It is not uncommon to reach these types of agreements during conferences or mediation when they are then reduced to writing at the time and under the conditions agreed. They may later be accepted and incorporated into an Order of the Court.
Also, where one party is unwilling to give up a particular right, or provide for a benefit to the other party, it may be that the only way it can be agreed to, or enforced, is as a Rule 11 Agreement to be incorporated into a Court Order. These are those "grey areas" where a party is really only willing to transfer or give up a particular right if it is memorialized under Rule 11 in the Event the Court exercises its discretion and does not provide for same.
Regarding Child Custody (Conservatorship and Possession), this type of agreement may be reached throughout the course of the case and will be modified in writing as the parties may agree from time to time. But these Agreements must be very specific as to the terms and days to be exercised so as to not be invalidated. This is of particular importance where minor children are involved.
Advantages of Rule 11 Agreements
The benefits of using a Rule 11 Agreement are numerous from the perspectives of time, cost, and flexibility. Rule 11 Agreements in Texas Family Court cases can allow a couple to accomplish a settlement in a much more expedient way than if the matter proceeded through formal Court process. Rule 11 Agreements can allow the spouses involved to have a fair amount of control over each aspect of a divorce or family case. The alternative, a situation where every little issue is fought over and each is subjected to a high probability of error from the trial judge, can cause heartache and delay in a case. The less conflict that exists during a divorce or other Family Case, the faster the family can put the matter behind them.
Enforcement of a Rule 11 Agreement
If there is a violation of a Rule 11 agreement Texas Family Law provides a procedure for enforcing these agreements. A litigant can file a motion to enforce the Rule 11 agreement in the trial court that entered the original order. The Texas Rules of Civil Procedure also require a copy of the motion be served on all parties and the attorney for each party.
Appeal is not a right to litigate the merits of enforcement but only that enforcement may have been filed unnecessarily.
A trial court can only enforce a Rule 11 agreement regarding a matter in its own jurisdiction. A court that did not have jurisdiction of the matter contained in the Rule 11 can not enforce it. A trial court can not enforce a Rule 11 agreement that resolves a prior claim in the same court even if the issue in the prior suit was still pending. The reason why a Rule 11 agreement cannot be enforced is because Texas Family Law attorneys can not dismiss issues that are still being litigated. By entering a Rule 11 agreement a party could attempt to resolve an issue that was currently before the court. That party could then attempt to appeal the earlier order obtaining a better result before a different judge. That is not permitted under Texas Family Law as it would create potential forum shopping. As a result a Rule 11 agreement that violates this provision may not be enforced.
Limitations and Disadvantages
Provisions of the Rule 11 agreement may become the basis for a full-fledged legal dispute. In order to avoid such disputes, it is entirely possible for parties to forego the disputed provisions from the final decree and litigate them separately. The basis for the dispute may be how the agreement will be interpreted or incorporated in the final decree. For example, courts have held that when an agreement is not incorporated in the final decree, it is presumptively enforceable as a separate contract. However, when an agreement is incorporated in a divorce decree and signed by both parties, it is proper for the courts to presume that the provisions are merged into the decree, and the decree must be enforced according to its terms. As a result, some courts have held that agreements not expressly incorporated in the final decree may be enforced as binding contracts.
In the event the parties have a dispute over the meaning of the provisions in the Rule 11 agreement, they will need to be interpreted in accordance with the rules of contract interpretation. Contract disputes may prove extremely difficult for the parties to resolve on their own due to the high costs of litigation. Additionally, even if parties are successful in convincing the trial court to enforce the disputed terms, they still may not be able to reverse the damage done by the disagreement.
Just as with a typical contract, when parties sign a Rule 11 agreement, they are bound by the terms of the contract. If one party believes he was duped into entering an agreement he did not want, he may seek to have the contract declared void. While parties have the option to rescind an agreement, it is typically no longer available once a party has partially or fully performed his side of the bargain. When a party obeys the terms of the agreement, even temporarily, it may not be an adequate remedy. While parties may litigate over the scope and meaning of an agreement, they have lost their right to rescission.
As with other contracts, courts will not undo bargains simply because one party later comes to believe he made an unwise deal. The parties must demonstrate that the agreement is void because of fraud, duress, unconscionability, or some other legally recognized basis to avoid the contract. Parties seeking to undo a Rule 11 agreement are subject to a high standard of proof.
While Rule 11 agreements have proven time and again to provide a clear path for the enforcement of agreed judgments on the issues that can be agreed to, there are potential pitfalls that should not be overlooked. One of the most common problems that arises from a Rule 11 agreement is that parties may enter an agreement without full understanding of the implications of the contract. Of course, if the parties understand the terms of the agreements they are signing, the danger of later misunderstanding is reduced. However, improper crafting of a Rule 11 agreement can lead to future litigation. If the negotiating parties have differing motives, they may understand the agreement differently. Parties may lead themselves into misunderstanding the effect of the contract by rushing into negotiations and settlement. Once they have signed the order, the likelihood of amendment is low; therefore parties may be stuck with the agreement even if they misunderstood its implications.
Best Practices for Your Rule 11 Agreement
The most important thing about a Rule 11 Agreement is that it accurately reflects the true agreement between the parties. So it is critical that the Rule 11 Agreement list in sufficient specificity the exact terms of the actual agreement between the parties. The Rule 11 Agreement should be just as specific in all respects as if it was incorporated into a detailed and lengthy Court Order.
There are typical pitfalls and mistakes in drafting Rule 11 agreements that are easy to avoid, so long as the drafting attorney knows to look for them. Some of the most common errors include:
- (1) Waiving the right to appeal the Court’s Judgment or a portion of the Judgment without first consulting with the client’s appellate counsel regarding the waiver. It is best to wait until after consulting appellate counsel before waiving the right to appeal.
- (2) Stating that the Agreement is effective until the Judgment becomes final and then killing it on the sixtieth day after trial. It is actually possible that the Judgment could become final before the sixtieth day after trial; therefore, unless you have a reason why you really don’t want the Agreement to expire on the sixtieth day after trial, you should specify the date which you wish the Rule 11 Agreement to expire.
- (3) Not providing a complete script for the Court’s signing the Rule 11 Agreement. Sometimes attorneys include an incomplete script that causes questions for the Court and the client to have to pay additional attorney fees for the attorney to explain to the Court what the client and opposing party intended with the Agreement.
- (4) Not making the terms of the Rule 11 Agreement sufficiently specific. This is less of a problem now that the new style Family Code applies the doctrines of incorporation and expression of all agreements, though this still can be a problem.
- (5) Making the Rule 11 Agreement unnecessarily vague, ambiguous or indefinite. Again, this is less of a problem now under the new style Family Code, though this still can be a problem. What can happen here is if you are making a Rule 11 Agreement that makes the entire Judgment vague, ambiguous or indefinite, then that can be a problem for the client, especially in property divisions.
Consult the Professional
Before entering into any Rule 11 Agreement, it is essential to consult with a legal professional. While some people might consider a legal professional as an expense, if your negotiation skills are not well-honed, a trusted advisor can save you thousands of dollars down the road. Attorneys often become involved with the process at the time the proposed Rule 11 Agreement is drafted. Nevertheless, I think it wise for a party to consult with an attorney prior to drafting the document. An attorney can discuss your options and advise on whether or not a proposed Rule 11 Agreement is appropriate. In my experience, most of the time, people seeking to finalize a divorce are remarkably willing to enter into agreements that favor the other party. Sometimes this comes from an effort to keep things amicable, but not infrequently it results from simple ignorance of what is actually happening to their property rights. When a person receives an offer for a Rule 11 Agreement from the opposing party , he should consult with an attorney about the meaning of the language in the proposed agreement before signing it. Sometimes, the post-marketing influences from a home are jointly agreed to be taken out, or considering the fact that the parties have been separated for two years, that the marital estate is almost certainly at the bottom of the market. A divorce today, might male more sense for both parties. These are issues that a person should discuss with an attorney prior to signing a Rule 11 Agreement. Some attorneys will go as far as to sit down with parties and negotiate something in between what the parties want and what the opposing party has proposed. Even in situations where the parties are able to agree as to the provisions of the agreement, the form in which it is produced for court may need to be revised, to conform to the Texas Family Code and your stated wishes.
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