If you and your spouse are a Texas couple seeking a divorce, you may not know about the acceptance of benefits doctrine. It could, however, become an important aspect of your divorce and its aftermath.
As pointed out by the Texas Supreme Court in the 2017 case of Kramer v. Kastleman, the acceptance of benefits doctrine says that no litigant can treat a court judgment as both right and wrong. Consequently, if you accept the benefits of your property settlement agreement, you cannot later challenge it unless you can show special circumstances.
During the nine-year marriage of Lisa Kramer and Bryan Kastleman, the couple’s marital estate ballooned to over $30 million. Prior to their divorce, they signed a property settlement agreement. The judge orally approved their settlement agreement and granted their divorce, but did not issue a written divorce decree until about a year later.
Prior to the issuance of the written decree, Ms. Kramer rescinded her agreement to the property settlement, claiming that Mr. Kastleman coerced her signature and committed fraud. She asked the judge to set the agreement aside. Mr. Kastleman countered that the agreement should remain as approved since Ms. Kramer had already received benefit from it, including $20,000 monthly rental from a piece of property that the agreement awarded to her.
The judge denied Ms. Kramer’s motion, awarded Mr. Kastleman approximately $32,000 in attorney’s fees, and issued its final divorce decree. Ms. Kramer appealed, but the appellate court dismissed her case, ruling that the acceptance of benefits doctrine prevented her from challenging the property settlement agreement. Again she appealed.
Supreme Court decision
The Texas Supreme Court reversed the appellate court and remanded the case to the original trial court judge. It reasoned that acceptance of benefits doctrine cases are fact-specific, in this particular case the judge approved the property settlement agreement long before issuing the final divorce decree, and Ms. Kramer did not have a clear intent to benefit from the agreement in the interim.
Based on this latest Texas case law addition, you would do well to make sure you really do agree to any property settlement you sign. Getting the agreement and your divorce decree that incorporates it set aside later can be quite challenging and there is no guarantee that you will prevail.
This is general information only and not intended to provide legal advice.