Family Settlement Agreements In Texas Probate

A family settlement agreement can be used to resolve Texas probate disputes, instead of going through protracted litigation.

What Is A Family Settlement Agreement?

“[A] family settlement agreement is an alternative to formal administration of a decedent’s estate and is a favorite of the law.” Estate of Riefler, 540 S.W.3d 626, 634 (Tex. App.—Amarillo 2017, no pet.) (citing Natural Gas Pipeline Co. v. Law, 65 S.W.3d 121, 126 (Tex. App.—Amarillo 2001, pet. denied)).

Rule 11 of the Texas Rules of Civil Procedure provides that “no agreement between attorneys or parties touching any suit pending will be enforced unless it be in writing, signed and filed with the papers as part of the record, or unless it be made in open court and entered of record.” Tex. R. Civ. P. 11.

Therefore, a family settlement agreement must be in writing, signed, and filed with the court.  Texas family settlement agreements are also sometimes called a “Rule 11 agreement.”

Case Study: Locascio v. Mongrain

In Locascio v. Mongrain, a family settlement agreement, instead of resolving a Texas probate dispute, created an even bigger one.  A contested probate matter resulted in a family settlement agreement among four siblings, which then turned into a lawsuit over the family settlement agreement.

Decedent died owning a ranch, and was survived by her four children – Anthony, Nicolas, Nina, and Angela.  Decedent’s son-in-law, Charles, served as Decedent’s ranch manager and grazed his cattle at the ranch at “no expense” pursuant to a written agreement with Decedent during her lifetime.

Decedent devised the ranch to her four children equally in her Last Will & Testament.  For five years after Decedent’s death Charles continued to run his personal cattle operations on the ranch at no expense to himself.  The delay prompted Anthony and Nicolas to sue Nina, Angela, and Charles.  They accused Angela of refusing to close the Texas estate.

In an attempt to resolve the Texas probate dispute the siblings entered into a Rule 11 family settlement agreement.  The family settlement agreement provided for division of the ranch, installation of an access road, and fencing.  The ranch was to be divded into a “south half” for Anthony and Nicolas, and a “north half” for Angela and Nina.

After the family settlement agreement was signed, several disputes arose.  Anthony and Nicolas sued Nina and Angela for breach of the family settlement agreement and sought specific performance to divide the ranch.  Nina and Charles counter-sued for breach.  The property was ultimately partitioned, and a jury found that all parties had breached the family settlement agreement. The trial court entered its final judgment in favor of Nina and Charles for damages and attorney’s fees, and the brothers appealed.

Is A Texas Family Settlement Agreement A Contract?

Yes.  A Texas family settlement agreement is considered contractual in nature.  Family settlement agreements are interpreted in the same manner as contracts in general. Therefore, the courts look to the plain meaning of the words of a Rule 11 family settlement agreement to determine the nature and the extent of the parties’ agreement.

The elements of a breach of contract claim under Texas law are (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach by the defendant; and (4) damages sustained by the plaintiff as a result of that breach.

Here, Nina and Charles argued that Anthony and Nicolas failed to ensure that Nina was conveyed her undivided share of the north tract with the requisite access easement. But Nina and Charles demanded a larger easement than they had agreed to in the Texas family settlement agreement.  The court summarized it as follows:

The proposed Release and Settlement Agreement originally provided by counsel for Nina and Charles, in December 2015, deviated from the terms of the Rule 11 settlement agreement by including a provision for a fifty-foot access and utility easement instead of the agreed-to easement following the “existing all-weather road.” In response, counsel for Anthony and Nicolas emailed Nina and Charles’ attorney writing, “I know my folks will not agree to add a wider utility easement. . . . [S]end me a partition deed and easement consistent with the signed agreement that limits the easement provided as expressed in that agreement—access along the existing all-weather road?”

The Texas Appeals court determined that Anthony and Nicolas did not breach the Rule 11 family settlement agreement by refusing to execute settlement documents that included an easement beyond that originally agreed to by the parties.  Said another way, parties cannot breach a family settlement agreement by refusing to do something they did not agree to do in the first place.

A Texas Rule 11 family settlement agreement can be a wonderful tool to resolve a Texas probate dispute.  If done right, it can save parties to a probate dispute time and money, and avoid the uncertainty of litigation.  However, because family settlement agreements are treated as contracts under Texas law, it is important that all of the parties are very clear about their rights and obligations.  Failure to honor the family settlement agreement will result in the parties ending up right back in court.