BILL ANALYSIS


Civil Practices Committee
S.B. 1240
By: Brown (Goodman)
05-10-95
Committee Report (Unamended)


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 judgement 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.
     

SUMMARY OF COMMITTEE ACTION

Senate Bill 1240 was considered by the Committee on Civil Practices
in a public hearing on May 10, 1995. The bill was reported
favorably without amendment, with the recommendation that it do
pass and be printed, by a record vote of five ayes, zero nays, zero
pnv and four absent.