Texas divorce cases can involve multiple areas of law. Contract law applies to pre-marital and post-marital agreements. Contract law may also apply to agreements the parties enter into as part of a divorce.  In a recent case, a portion of a wife’s claims for contractual alimony was barred by the contract statute of limitations.

When the parties divorced in 2012, they entered into a written agreement.  Their divorce decree included a provision for “Contractual Alimony,” with the parties agreeing that the husband would pay the wife $4,000 per month, payable on the first of the month with a five-day grace period before the payment would be considered late.  The contractual alimony was to be paid from June 2013 to May 2015. The decree further stated that the wife could accelerate the payments if the husband defaulted and failed to cure within 30 days of receiving notice of intent to accelerate.

Wife Moves to Enforce Contractual Alimony

The wife moved to enforce the alimony requirements on March 26, 2019. She alleged the husband had failed to make the payments starting in December 2013.  She asked the court to order him to pay the past due payments, interest, and fees and costs.

The husband argued in part that the motion was barred by the statute of limitations. The wife presented a letter she sent in January 2014 to notify the husband of her intent to accelerate the payments if he did not cure within 30 days.  She testified that she had not taken further steps to accelerate the debt after she sent the notice.

The trial court said it would treat the matter as a breach of contract and apply the statute of limitations for contract actions, which is four years. The trial court found the wife had not accelerated the debt after sending the notice.  It awarded her the alimony payments for March, April, and May 2015, as well as interest, attorney’s fees, and court costs.

Husband Appeals Trial Court’s Ruling

The husband appealed, arguing the trial court erred in not applying the four-year statute of limitations to the full debt because the wife had accelerated it in 2014, or, in the alternative, that the court erred in not excluding the March 2015 payment due to the statute of limitations.

There was no dispute that the four-year statute of limitations applied and that it would apply separately to each missed payment. The husband argued the wife accelerated the debt and the statute of limitations for the entire debt began running in January 2014, which would result in the claims for all of the payments being barred.

The appeals court noted that, under Texas case law, a person must exercise the option to accelerate the debt to trigger the statute of limitations for the full debt.  Accelerating the debt requires both notice of intent to accelerate and notice of acceleration. The trial court found the wife had provided notice of intent to accelerate, but that she had not actually accelerated the debt.

Appeals Court Affirms in Part; Reverses in Part

The appeals court did find for the husband with regard to March 2015 payment, however. The payments were considered timely if they were made by the sixth of each month.  The March 2015 payment was therefore barred by the statute of limitations because the wife filed her motion on March 26, 2019.  The appeals court reduced the wife’s award by the amount of the March payment.  Additionally, the appeals court reversed the award for prejudgment interest and remanded so the trial court could recalculate it based on the reduced damages.

Dealing with Contractual Divorce Agreements? Call McClure Law Group Today

If your former spouse has breached your divorce agreement, you should promptly seek the guidance of an experienced Texas divorce settlement attorney.  The attorneys at McClure Law Group have a thorough understanding of the intersection between contract law and family law.  Schedule a consultation by calling 214.692.8200.