BILL ANALYSIS

Civil Practices Committee

By: Goodman
04-07-95
May 4, 1995

BACKGROUND

Several conflicting appellate opinions have recently been decided
regarding mediated settlement agreements.  Two court opinions held
that a party who has reached a settlement agreement disposing of a
dispute through alternative dispute resolution procedures (and the
party has signed a written agreement) may not unilaterally
repudiate the agreement.

Another opinion held that a Rule 11 agreement entered into as a
result of court-ordered mediation cannot be the basis of a consent
judgement if one party withdraws consent after the signing of the
agreement, but before the trial court renders judgment. Two
opinions are directly in conflict with the recently decided one
opinion from Houston. 

Mediation is often ordered before parties can proceed with
temporary orders regarding child custody in a number of counties
across the state.  There are other courts in the state that will
not set a case for trial unless mediation has been attempted first. 
A number of cases settle through mediation and other alternative
dispute resolution methods.

The Houston opinion will have a chilling effect on the future of
mediated settlements because there would be no binding effect given
to these settlements between the signing of the agreement and the
rendition of judgment.  If a party believed that he or she could
revoke an agreement at any time prior to judgment, the mediation
process would become just another step in the litigation process
instead of a way to finally resolve conflicts.

PURPOSE

H.B. 2665 would eliminate the conflict in the law that currently
exists regarding the enforceability of mediated settlement
agreements prior to the agreement being approved by the trial
court.  H.B. 2665 would provide that mediated settlements have
binding effect on the parties if the settlement agreement
specifically states that the agreement is not subject to revocation
and is signed by an attorney for the party.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 154.071, Civil Practice and Remedies
Code by adding new Subsections (d) and (e) as follows:

     (d)  Mediated settlement agreements are subject to revocation
     by a party before rendition of judgment or decree, unless:

     (1) the settlement agreement contains a separate paragraph, an
     underlined statement that the settlement agreement is not
     subject to revocation, and
     (2) the settlement agreement is signed by each party to the
     settlement; and
     (3) if the party is represented by an attorney in the mediated
     matter, the attorney shall approve the settlement agreement,
     if the agreement is presented to the attorney when the
     agreement is executed.

     (e)  If a mediated settlement agreement meets the above
     requirements, a party is entitled to judgment on the mediated
     settlement agreement.

SECTION 2.  Emergency clause- effective immediately.


EXPLANATION OF AMENDMENTS

In Sect. 154.071 (d) of SECTION 1, the words "or decree" were
added.
Subsection (1) was amended to clarify that the language in a
settlement agreement stating that the agreement was not subject to
revocation had to be contained in separate paragraph and
underlined.
Subsection (2) was amended to clarify that a settlement agreement
had to be signed by each party to the agreement, not just the
attorney for the party.
Subsection (3) was added to clarify that if the party had a lawyer
representing them in the mediated matter, the attorney had to
approve the settlement agreement if the attorney was present when
the agreement was executed.


SUMMARY OF COMMITTEE ACTION

H.B. 2665 was considered by the Civil Practices Committee in a
public hearing on April 12, 1995. The following people testified in
support of the bill: Alvin Zimmerman, attorney and mediator,
representing himself; and Mike Slack, attorney, representing
himself and the Texas Trial Lawyers Association. The following
people testified in opposition to the bill: Bob Good, representing
himself; and Paula James, attorney and mediator, representing
herself. The committee considered one amendment to the bill, which
was adopted without objection. The bill was referred to a
subcommittee consisting of Representatives: Hunter (chair), Hilbert
and Moffat. After being recalled from subcommittee, the bill was
considered by the committee in a formal meeting on May 1, 1995. The
bill was reported favorable, as amended, with the recommendation
that it do pass and be printed, by a record vote of six ayes, zero
nays, zero pnv and three absent.