In February, Senior Shareholder Michelle May O’Neil presented oral argument to the Supreme Court of Texas in Dalton v. Dalton, a case out of the Nacogdoches trial court and the Tyler Court of Appeals. Today we learned that she WON that case — the Texas Supreme Court in a unanimous decision reversed the judgment and rendered judgment in favor of our client. Here’s the synopsis of the Court’s decision today:

In a unanimous decision today, the Supreme Court of Texas reversed the judgment of the Tyler Court of Appeals and the Nacogdoches trial court, holding that an out of state alimony agreement/judgment cannot be enforced as if it is a Texas order for spousal maintenance. First, the Court found that the order for wage withholding to enforce the unpaid out of state alimony agreement/order is not permitted under Texas law. The award did not constitute maintenance under Texas’ maintenance statute and there was no showing in the order that the wife qualified under Texas law for maintenance. “[U]nder Texas law, an order incorporating a voluntary support obligation that does not qualify as spousal maintenance creates a debt that is enforceable as a contract, not a court-ordered obligation that is enforceable as a judgment.” The only way that wage withholding would be a remedy is if the parties agree to it in the order. Further, the Court rejected the notion that such an order could be enforceable by judgment remedies up to the statutory limits of the Texas maintenance statute. It either qualifies as a Texas maintenance order at the time it was originally entered, or not. No partial remedies. (Justice Lehrman contends in her concurring opinion that a party could prove eligibility under Texas’ maintenance statute at the time of the enforcement hearing, but the rest of the justices reject her thought.)

When enforcing an out of state support order, the Texas court must give full faith and credit to the out of state order as a judgment, but Texas law controls the enforcement procedures and remedies. The Court rejects the idea that the full faith and credit clause requires Texas to also use the other state’s enforcement remedies, contrary to Texas law. “So the Texas trial court was required to accept the Oklahoma order as an adjudication of the parties’ respective rights and obligations, but Texas law governs the methods by which the Texas court could enforce those rights and obligations.” Since Texas law didn’t provide for wage withholding in these circumstances, the order was void.

The wife also sought enforcement of the out of state alimony agreement/judgment via garnishment of husband’s retirement benefits (called a QDRO). Wife argued that federal law governing retirement accounts (called ERISA) trumped Texas law allowing such garnishment. The Court disagreed, finding that “ERISA does not strip a state’s power to determine how it will govern divorce and support issues in its borders.” The power to issue a garnishment order must come from Texas law, not federal law. If no state law authorizes the garnishment order, then federal ERISA law doesn’t apply and the order is void. In a very sweeping statement, the Texas Supreme Court held that garnishment of retirement assets via QDRO is not a remedy for enforcement of out of state alimony award not issued under Texas maintenance statute, but then goes further to find that garnishment of retirement assets via QDRO is not a permissible remedy for collection of child support or maintenance arrearages at all. (The concurring opinion agrees with the result in this case, that garnishment of retirement assets is not permitted under these facts, but disagrees as to the broad brush of the opinion as it applies to other enforcement.)

The Supreme Court of Texas reversed and rendered judgment in this case, finding both orders VOID under Texas law.

On a side note that is important to me, and it is my blog, so I can take author-license, the Court cites to the Kee v. Kee court of appeals opinion as support for its ruling here. The Kee case was a case that I won several years ago in the Dallas Court of Appeals, finding that wage garnishment was not permitted for a Texas contractual alimony agreement/decree. By SCOTX citing to Kee in this opinion, it elevates Kee to a SCOTX approved decision even though it is only a court of appeals case. So, now Kee’s holding is the equivalent of a SCOTX decision —  that a Texas judgment for alimony that does not comply with Texas’ maintenance statute cannot be enforced through wage withholding remedies. Two wins in one!

Here’s the link to the Dalton opinion:

Here’s the link to the Dalton concurring opinion:

Here’s the link to the video replay of the Dalton oral arguments from February: