In re Penafiel

633 S.W.3d 36

In the MATTER OF the MARRIAGE OF Lisa PENAFIEL and Jose Alejandro Penafiel

NO. 14-19-00240-CV

Court of Appeals of Texas, Houston (14th Dist.).

Opinion filed July 27, 2021

Rehearing Denied September 30, 2021

James J. Hansen, Houston, for Appellant.

Michael Sydow, Sr., Bruce D. Oakley, Houston, for Appellee.

Panel consists of Justices Bourliot, Hassan, and Poissant.

Frances Bourliot, Justice

Jose Alejandro Penafiel appeals from the trial court's divorce decree and final judgment dissolving his marriage to Lisa Penafiel and purporting to enforce the parties’ mediated settlement agreement (MSA). The judgment also held Alejandro fraudulently induced Lisa to sign the MSA and awarded her tort damages. In five issues, Alejandro contends that the trial court erred in (1) incorrectly stating in its final decree and judgment that he approved it as to form and substance, (2) improperly adding to and changing terms from the MSA in the decree, (3) purporting to make a just and right division of the property in the decree that was different than what was agreed to in the MSA, (4) dividing the community estate without evidence of what was in the community estate, and (5) finding Alejandro fraudulently induced Lisa to sign the MSA. We conclude that the evidence supports the trial court's finding that Alejandro fraudulently induced Lisa to sign the MSA and the court's determination of the value of the community estate; however, the trial court improperly attempted to enforce the MSA and award damages in its final decree. Accordingly, we affirm the trial court's judgment in part and reverse and remand in part for entry of a new final decree.

Background

Lisa and Alejandro were married on December 19, 1981. It is undisputed that the parties did not live together for much of the marriage. In January 2003, Lisa filed the present proceedings for divorce.¹ A receiver was appointed concerning the parties’ marital estate, and the receiver in turn employed an appraiser, who valued the community estate at approximately $416,600,000 as of October 2016. On Alejandro's motion, the trial court ordered the parties to mediation. The parties thereafter signed an MSA on August 3, 2017.

Key terms of the MSA include:

• The parties agreed to settle all matters in the then-pending lawsuit and stipulated that the terms of the MSA constituted a fair and just division of their assets and liabilities. The parties also released each other from any claims that either may have held against the other unless expressly reserved in the MSA. Also, all relief requested by either party in the underlying case not addressed in the MSA was to be denied.

• A divorce was to be granted on the ground of insupportability of the marriage. Each party warranted that they had made a full disclosure of all property and obligations of the parties (both community and separate) and that the MSA divided, confirmed, or allocated all such items.

• The parties agreed to submit all drafting disputes and questions concerning interpretation of the MSA and the intent of the parties to the mediator until the divorce became a final judgment.

• The provisions were to be incorporated into an agreement incident to divorce and a final decree of divorce. The MSA was also confirmed as binding pursuant to Texas Family Code section 6.602.

• Each party agreed to pay their own unpaid attorney's fees and litigation expenses; all debts, encumbrances, and taxes due on the property they were awarded; and all debts they had independently incurred.

• Regarding the marital estate, "[e]ach party [was] to keep their own property in their possession or in their name." Alejandro was also to purchase a fully funded and guaranteed annuity that would pay Lisa "no less than $10,000 per month for her lifetime." The terms of the annuity and the issuing financial institution had to be acceptable to both parties, and the final divorce decree was not to be filed until the annuity was agreed upon and fully funded. Alejandro was also required to pay Lisa $150,000 at the time the decree was entered.

• The parties also agreed to pay the receiver out of funds from a lawsuit settlement, and if he was not paid from the settlement funds, each party was to pay him 50 percent of his fees not to exceed $10,000 each.

After both parties and their respective attorneys signed the MSA, communications began about securing and funding the annuity that Alejandro was to obtain for Lisa. Although these communications will be discussed in greater detail later in this opinion, suffice it to say at this point that Lisa describes the communications as a series of excuses and delays by Alejandro and his attorney that led her to conclude that Alejandro had never intended to fulfill his promises, and Alejandro describes the efforts as logical steps toward securing a mutually agreeable annuity. To date, Alejandro has never funded an annuity or paid Lisa the $150,000 as required by the MSA.

Lisa filed a motion to set aside the MSA on the ground that she was fraudulently induced into signing it. At a hearing on the motion, Lisa's counsel urged the court to not rule on the motion at that time but expedite the trial at which they could present evidence on the issue of fraudulent inducement. The trial court did not rule on the motion at that time but subsequently overruled it without stating why. Meanwhile, Lisa also amended her divorce petition to add a tort claim for fraudulent inducement of the MSA. Alejandro's two attorneys withdrew before the trial date—one cited communication issues with Alejandro and one stated Alejandro requested he withdraw. Alejandro failed to appear for trial.

During the bench trial, the trial court admitted into evidence Lisa's summary of the attempts to get Alejandro to fund the annuity, a large number of emails between counsel representing each party on that same topic, and the appraiser's detailed report concluding the community estate was worth approximately $416,600,000 as of October 2016. The trial court also took judicial notice of certain things in the court's files, including the motions to withdraw of Alejandro's trial counsel and Alejandro's pro se motion to enforce the MSA.

Lisa testified at trial regarding the history of the marriage and about the community estate. She said that Alejandro had no property when they got married but acquired a 50 percent interest in a company called Tripetrol during the marriage through his time, toil, and talent. Alejandro acknowledged this ownership in his deposition. Lisa explained that much time and money was spent obtaining information on community property in many different countries, including Ecuador, Spain, Argentina, the United Kingdom, Switzerland, Russia, Canada, and Guatemala. She identified around 13 different companies and properties that Alejandro acquired using community funds and put in the names of corporate fronts, other women that he married during his marriage to Lisa, and mistresses. She also said that he knowingly made false representations concerning community ownership of property, hid assets, and lied about stock transfer records.

Lisa further asserted that Alejandro has not done anything he promised to do in the MSA and indeed never did "a single thing to perform under the [MSA]." She said that she relied on his promises in the MSA in signing the MSA and at the time thought he intended to perform. The MSA was a "great deal for him," she said, and it was reasonable for her to rely on his promises. She explained, however, that she later changed her mind and believes he never intended to perform because he kept delaying his performance, saying "[w]e're getting it done" and "[w]e're about to do it," dragging it out for months while actual performance never occurred. Lisa also insisted that she was damaged by relying on Alejandro's promises because she otherwise could have pursued a share of the $416 million community estate. Lisa requested that the court set aside the MSA and award her 60 percent of the community estate.

Lisa's attorney testified regarding attorney's fees and litigation costs, and the trial court admitted records into evidence in support of his testimony. At the conclusion of the bench trial, the judge announced that she was granting the divorce, ruling in favor of Lisa on the fraudulent inducement claim, awarding her "damages" of $249,600,000 along with attorney's fees and litigation expenses. The trial court did not issue findings of fact or conclusions of law.

Beyond dissolving the parties’ marriage, the trial court's Final Decree of Divorce and Final Judgment includes the following key rulings:

• Regarding the decree itself, the court stated that the parties "entered into a written agreement ... by virtue of having approved [the] Decree as to both form and substance."²

• Regarding the MSA, the court held that "although [Lisa] was fraudulently induced by [Jose] to enter into the [MSA] such agreement cannot be revoked under law and the Court therefore finds it enforceable against both parties and incorporates it by reference as part of this Decree as if it were recited herein verbatim." The court ordered both parties "to do all things necessary to effectuate the agreement" but also pronounced that terms of the final decree were to control over terms of the MSA in the event of any conflict.

• The court also stated that the MSA was enforceable and all property acquired during the marriage was community property and made findings regarding the division of property that it said were "consistent" with the MSA. These rulings included awarding Lisa all personal property in her possession, all real and personal property acquired by either party during the marriage that was not specifically awarded to Alejandro in the decree, all cash in her possession or subject to her sole control, all amounts in various types of accounts related to her employment and retirement, all life insurance policies insuring her life, all amounts in various types of

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