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Though she died the day before the divorce was finalized, a Texas appeals court ruled that a mediated settlement agreement was enforceable, and effectively deprived the deceased's would-be ex-husband of assets he would have received as a beneficiary of her will.
The issues raised in Spiegel v. KLRU Endowment Fund, No. 03-06-00593-CV, 2007 WL 1237978 (Tex. App. Apr. 26, 2007) arose from Robert and Martha Spiegel's impending divorce. Through court-ordered mediation, the two agreed to a comprehensive property settlement. However, before it could be incorporated into a final divorce decree, Martha died.
In attempting to execute Martha's will, her brother sought declaratory judgment on several issues, including the validity under the circumstances of the mediation agreement, and the effect of that agreement on Robert's status as beneficiary.
The central issue for the Court was whether the mediation agreement was effective at the time it was executed and signed, or whether it needed to be confirmed in an approved divorce decree. Interpreting Texas law, the Court held that by the statute's plain language, by the clear intentions of the parties, as well as for public policy reasons, the mediated settlement was immediately effective.
More specifically, the agreement itself stated that it was "binding" and "not subject to revocation." It was signed by both parties, and their respective attorneys. Further, a public policy of encouraging mediation is furthered by the finality of the agreements.
Effectively, the Court interpreted the agreement to mean that Robert could not inherit "our homestead," because it no longer existed. In addition, although Texas courts are divided on the language is necessary to revoke beneficiary designation, the Court favored a reading which "incorporates the presumption that people who are divorcing intend to revoke beneficiary designation." Robert's attempts to secure the property he had legally ceded away through the mediated settlement were effectively blocked.
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