Fullenweider Wilhite partner, Randall Wilhite, represented Miguel Loya in a landmark case decided this past week by the Texas Supreme Court.
On May 12, 2017, the Supreme Court of Texas issued its decision in the case of Loya v. Loya, No, 15-0763 (Tex. 2017).
In this case, Miguel was paid a $4.5 million discretionary bonus nine months after divorce and, because it was not specifically named in the listing of the parties’ property being divided, Leticia Loya sued Miguel after the divorce was over, claiming that, to the extent the bonus was not awarded, and to the extent it was related to services performed during the marriage, it was community property and that she should be awarded a part of it.
The Supreme Court, however, held that partition language in the parties’ Mediated Settlement Agreement (“MSA”) awarded the bonus only to Miguel. The partition language from the MSA partitioned [a]ll future earnings from each party … to the person providing the services giving rise to the earnings.” After the MSA was signed, the parties proceeded to arbitration as to the meaning of this phrase in relation to possible future bonuses. The arbitrator followed the MSA and simply ruled that “[a]ll future income and earnings are partitioned as of … [the date of the MSA].”
Ending nearly 7 years of litigation over this issue, the Supreme Court awarded 100% of the bonus to Miguel and held that the “plain meaning of these terms clearly encompasses the [post-divorce] bonus – an amount of money received by Miguel months into the future, after the divorce was final,” even though the post-divorce bonus included “future payments for work done [during the marriage].”