in Re W.L.W. ( 2012 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-12-00138-CV
IN RE W.L.W. RELATOR
----------
ORIGINAL PROCEEDING
----------
OPINION
----------
I. INTRODUCTION
Relator Wade White seeks mandamus relief from the trial court’s
February 7, 2012 order denying his motion to reconsider a prior order denying his
plea to the jurisdiction and permitting Real Party in Interest Deborah White to
conduct discovery in furtherance of her post-judgment action to clarify or enforce
a divorce decree. We will conditionally grant the petition.
II. BACKGROUND
Wade was a greater-than-50% shareholder of Republic Intelligent
Transportation Services, Inc. (Republic ITS) when in December 2007, in his
capacities as president of Republic ITS, a shareholder of Republic ITS, and the
shareholder representative, he executed an “Agreement and Plan of Merger” in
which Republic ITS merged with an affiliate of Alinda Capital Partners. Under the
terms of the merger agreement, Wade’s shares of Republic ITS were “converted
into the right to receive” (1) shares of the post-merger Republic ITS entity (“newly
issued Republic ITS shares”); (2) cash calculated according to the merger
agreement; (3) funds under promissory notes; and (4) earn-in payments.
According to Wade and Deborah’s 2007 income tax return, Wade received over
$13 million in pre-tax cash as a result of the merger.
Wade and Deborah entered into an agreed decree of divorce on May 13,
2008, approximately five months after Wade executed the merger agreement. In
his inventory and appraisement, Wade had listed as an asset “Republic ITS
Stock” valued at $2,000,000. Deborah filed an identical inventory and
appraisement, except that she listed “UNKNOWN” for the value of the “Republic
ITS Stock.” At her 2009 deposition, Deborah acknowledged that she had relied
upon and “accepted” the $2 million valuation that Wade attributed to the
“Republic ITS Stock,” and she agreed that she could have hired an expert to
evaluate the Republic ITS stock but that she never did so. As part of the division
of the marital estate, pursuant to section 18.a of the decree, the trial court
awarded Wade, among other things, (1) the balance of the funds held by the
Bank of the West money market account ending in 6936—$10,104,501—less
$7,500,000 to be paid to Deborah, and (2) “The Republic ITS stock, together with
2
all dividends, splits, and other rights and privileges in connection with it.”
Pursuant to section 18.b of the divorce decree, the trial court awarded Deborah,
among other things, $7,500,000 to be paid by Wade from the Bank of the West
account ending in 6936. The divorce decree contains a provision that the parties
refer to as a “residuary clause”:
IT IS ORDERED AND DECREED that any asset of the parties that
was not disclosed or undervalued in the spreadsheet attached to
each party’s Inventory and Appraisement as Exhibit “A” is awarded
to the party not in possession or control of the asset.
No post-judgment motions were filed, and the trial court’s plenary power expired
on June 12, 2008. See Tex. R. Civ. P. 329b(d).
Approximately six months later, in December 2008, Deborah filed a
“Motion for Clarification Order and to Enforce Property Division.” In her amended
motion, Deborah alleged (1) that Wade had failed to disclose or had undervalued
on his inventory and appraisement cash and contractual rights consisting of
“purchase price consideration” as set forth in the merger agreement; (2) that
Wade had failed to disclose or had undervalued on his inventory and
appraisement approximately $9,500,000 in cash; (3) that Wade had undervalued
on his inventory and appraisement the newly issued Republic ITS shares; and
(4) that Wade had failed to disclose on his inventory and appraisement a 401(k)
plan held by John Hancock Funds. Deborah identified the “residuary clause”
contained in the divorce decree and requested “delivery” of each of the
undisclosed and undervalued assets to her.
3
Wade filed a plea to the jurisdiction, arguing that the trial court lacked
subject-matter jurisdiction to substantively alter the divorce decree’s property
divisions. The trial court denied the plea to the jurisdiction and Wade’s
subsequent motion for reconsideration of the plea to the jurisdiction. The trial
court also denied Wade’s motion to quash numerous subpoenas and notices of
depositions that Deborah filed seeking discovery regarding the alleged
undisclosed and undervalued assets. The trial court stayed all matters related to
the case pending our resolution of this original proceeding.
III. STANDARD OF REVIEW
Mandamus relief is proper only to correct a clear abuse of discretion when
there is no adequate remedy by appeal. In re Columbia Med. Ctr. of Las Colinas,
290 S.W.3d 204, 207 (Tex. 2009) (orig. proceeding). A trial court clearly abuses
its discretion when it reaches a decision so arbitrary and unreasonable as to
amount to a clear and prejudicial error of law or if it clearly fails to correctly
analyze or apply the law. In re Olshan Found. Repair Co., 328 S.W.3d 883, 888
(Tex. 2010) (orig. proceeding); Walker v. Packer, 827 S.W.2d 833, 839 (Tex.
1992) (orig. proceeding).
IV. SECTION 18.a V. THE “RESIDUARY CLAUSE”
In his only issue, Wade argues that the divorce decree unambiguously
awarded to him all of the alleged undisclosed or undervalued assets of which
Deborah complains and, therefore, that Deborah is seeking a post-divorce
redivision of previously divided community property, not a clarification and
4
enforcement of the divorce decree. Because the trial court has no subject-matter
jurisdiction to alter or redivide the previously divided community property, Wade
contends that the trial court clearly abused its discretion by denying his plea to
the jurisdiction.
Deborah contends that Wade (1) failed to disclose a promissory note in the
amount of approximately $4.3 million and contractual rights to cash payments
(one of the payments being approximately $1.1 million) and (2) undervalued the
newly issued Republic ITS shares by at least $2,490,000. In response to Wade’s
argument that she seeks a redivision of previously divided property, Deborah
argues that the undisclosed and undervalued assets were never awarded to
Wade under section 18.a of the divorce decree but, instead, were awarded to her
at the time of the divorce pursuant to the “residuary clause.” She advocates the
following construction of the divorce decree and “residuary clause”:
•All of the property awards expressly made pursuant to the divorce decree
are contingent upon a proper valuation of each asset.
•If a party failed to disclose or undervalued an asset in his or her inventory
and appraisement, then that asset was “concurrently” awarded to the other party
pursuant to the “residuary clause” when the divorce decree was executed.
•But if an asset was both disclosed and properly valued in the party’s
inventory and appraisement, then the “conditions precedent” contained in the
“residuary clause”—undervaluation and nondisclosure—were not triggered, and
the asset was not awarded pursuant to the “residuary clause” but pursuant to
section 18 of the divorce decree.
Deborah therefore contends that by filing her “Amended Motion for Clarification
Order and to Enforce Property Division,” she merely seeks (1) to determine
whether assets were undisclosed or undervalued and, if so, (2) to enforce the
5
division of undisclosed and undervalued assets that already occurred via the
“residuary clause.”
It is well settled that a judgment finalizing a divorce and dividing marital
property bars relitigation of the property division. Pearson v. Fillingim, 332
S.W.3d 361, 363 (Tex. 2011). Attempting to obtain an order that alters or
modifies a divorce decree’s property division is an impermissible collateral attack.
Hagen v. Hagen, 282 S.W.3d 899, 902 (Tex. 2009). The legislature even says
so in family code section 9.007:
(a) A court may not amend, modify, alter, or change the division of
property made or approved in the decree of divorce or annulment.
An order to enforce the division is limited to an order to assist in the
implementation of or to clarify the prior order and may not alter or
change the substantive division of property.
(b) An order under this section that amends, modifies, alters, or
changes the actual, substantive division of property made or
approved in a final decree of divorce or annulment is beyond the
power of the divorce court and is unenforceable.
Tex. Fam. Code Ann. § 9.007(a), (b) (West 2006).
A trial court does, however, retain continuing subject-matter jurisdiction to
clarify and to enforce the decree’s property division. Id. §§ 9.002, 9.008(a) (West
2006); see also id. § 9.006(a) (West 2006) (providing that trial court has
continuing jurisdiction to “render further orders to enforce the division of property
made in the decree of divorce . . . to assist in the implementation of or to clarify
the prior order”). But a clarification order cannot be used to make a substantive
change in a divorce decree after it becomes final, even if it contains substantive
legal error. See Shanks v. Treadway, 110 S.W.3d 444, 449 (Tex. 2003).
6
Further, parties cannot confer or waive jurisdiction by consent or agreement.
Claxton v. (Upper) Lake Fork Water Control, 220 S.W.3d 537, 541 (Tex. App.—
Texarkana 2006, no pet.).
We agree with Wade that section 18.a of the divorce decree expressly and
unambiguously awarded all of the alleged undisclosed or undervalued assets to
him. The divorce decree awarded Wade the “Republic ITS stock,” which
included the newly issued Republic ITS shares, and all other “rights and
privileges in connection with it.” The “rights and privileges in connection” with the
“Republic ITS Stock” included the matters set out in section 2.3 of the merger
agreement that Wade had the “right to receive,” which included the alleged
undisclosed or undervalued assets—the promissory note, cash, and newly
issued Republic ITS shares. As for the $9,500,000 that Deborah initially
complained about in her amended motion, to the extent that she has not
abandoned this argument, she agreed in her deposition that the $10 million
divided approximately 70/30 in her favor by the divorce decree accounted for
those funds. Similarly, regarding the John Hancock 401(k) account, Deborah’s
attorney conceded at the hearing on the plea to the jurisdiction that it was a non-
issue if she was mistaken that an Ameritrade account identified on the inventory
and appraisement was the same account as the John Hancock account, which is
consistent with Wade’s explanation of the Ameritrade account.
But our conclusion that section 18.a awarded all of the alleged undisclosed
or undervalued assets to Wade does not resolve the issue here because
7
Deborah contends that the disputed section 18.a asset awards were merely
contingently awarded to Wade and “concurrently” awarded to her under the
“residuary clause” when Wade failed to disclose or undervalued certain assets.
However, under Deborah’s construction of the divorce decree, if it is determined
that Wade failed to disclose or undervalued a section 18.a asset in his inventory
and appraisement and that the asset was “concurrently” awarded to Deborah
under the “residuary clause,” then the unambiguous section 18.a asset award
would be rendered completely meaningless. Thus, a conflict exists between
section 18.a and the “residuary clause” when an asset awarded under section
18.a is instead alleged to have been awarded under the “residuary clause.”
An agreed divorce decree, such as the one in this case, is a contract
subject to the usual rules of contract construction. See McGoodwin v.
McGoodwin, 671 S.W.2d 880, 882 (Tex. 1984) (op. on reh’g). When interpreting
a contract, courts examine the entire agreement in an effort to harmonize and
give effect to all provisions of the contract so that none will be rendered
meaningless. Coker v. Coker, 650 S.W.2d 391, 393–94 (Tex. 1983). If
provisions in the contract appear to conflict, they should be harmonized, if
possible, to reflect the intentions of the parties. Id.
We disagree with Deborah that the unambiguous section 18.a asset
awards are contingent upon the “conditions precedent”—nondisclosure and
undervaluation—contained in the “residuary clause.” Deborah says that “the
parties elected to include the Residuary Clause in the Decree in order to provide
8
a ‘safety net’ in the event either party was less than forthcoming,” but examining
the entire decree as written, there is no indication that Wade and Deborah
intended for the section 18.a asset awards to be contingent upon anything,
including the “conditions precedent” of the “residuary clause.” As written, the
section 18.a asset awards are final. We cannot harmonize section 18.a with the
“residuary clause” by construing the asset awards under section 18.a as
contingently awarded upon a proper disclosure and valuation of property in the
inventory and appraisement.
As far as we can tell, the only other way to possibly harmonize the
“residuary clause” with section 18.a is to construe the “residuary clause” as
applying to residual assets that were not awarded by section 18.a of the divorce
decree. But as with Deborah’s “contingency” argument, this contention leads to
a dead end.
The word “residuary” is derived from the word “residue,” which means
“something that remains after a part is taken, separated, removed, or
designated.” See Webster’s Third New International Dictionary 1932 (3d ed.
2002). Consistent with this meaning, a standard residuary clause contained in a
divorce decree provides a remedy for property that was not otherwise divided
and awarded by the divorce decree. See, e.g., Buys v. Buys, 924 S.W.2d 369,
370 (Tex. 1996); Tharp v. Tharp, 772 S.W.2d 467, 468–69 (Tex. App.—Dallas
1989, no writ) (discussing residuary clauses examined in other cases). “By its
very nature, a residuary clause encompasses those things not specified in the
9
decree but included in the community property under the jurisdiction of the court.”
See Jacobs v. Cude, 641 S.W.2d 258, 260 (Tex. App.—Houston [14th Dist.]
1982, writ ref’d n.r.e.) (emphasis added).
Here, the divorce decree’s “residuary clause” purports to devise a remedy
for property “that was not disclosed or undervalued in the spreadsheet attached
to each party’s Inventory and Appraisement.” [Emphasis added.] This is not a
residuary clause as that term is commonly used because in no way does it
contemplate a division of property that was not otherwise divided by the divorce
decree. Instead, according to Deborah’s construction, the “residuary clause”
operates on an unwritten contingency—idling along and irrelevant when a section
18.a asset was disclosed and properly valued in Wade’s inventory and
appraisement, but springing into action and “concurrently” awarding that same
asset to Deborah if she proves in a post-judgment action that Wade failed to
disclose the asset or undervalued it in his inventory and appraisement. There is
nothing residual about the “residuary clause.”
Deborah directs us to Noyes v. Noyes and argues that the decision
involves “similarly situated facts [and] provides firm grounds for determining
whether a petitioner is seeking ‘enforcement’ or ‘modification’ of a previously
entered decree.” No. 04-08-00627-CV, 2009 WL 2520972, at *3–4 (Tex. App.—
San Antonio Aug. 12, 2009, no pet.) (mem. op.). In Noyes, the divorce decree
awarded Monica $125,000 “due by [George] on the day he closes on the house
located at: Lot 265, Unit IV.” Id. at *2. Monica filed a petition to enforce or clarify
10
the divorce decree, alleging that George had failed to comply with the decree by
not selling the house and paying her $125,000. Id. at *2. The trial court granted
George’s plea to the jurisdiction on the ground that the trial court had no
jurisdiction to modify the decree. Id. at *2–3. On appeal, Monica argued that the
divorce decree required George to sell the house even though the decree did not
identify when George was required to sell the house. Id. at *4. George argued
that the decree did not require him to sell the house and that he had to pay
Monica $125,000 only “in the event” that he sold the house. Id. The court of
appeals concluded that the language of the divorce decree as a whole
contemplated that George was required to sell the house, that he had to sell the
house within a reasonable time, and that the trial court had jurisdiction over
Monica’s action to enforce the portion of the decree requiring George to sell the
house within a reasonable time and pay Monica $125,000. Id.
The court of appeals in Noyes thus resolved a dispute over the
construction of a single provision contained in the divorce decree. Unlike in this
case, the court of appeals did not have to resolve a conflict between two
provisions of a divorce decree that arguably awarded the same assets to two
different people, nor did the court of appeals address a provision worded
anything remotely similar to the “residuary clause” at issue in this case. Noyes is
therefore inapposite.
We are unable to harmonize the “residuary clause” with section 18.a’s final
asset awards. Consequently, the “residuary clause” irreconcilably conflicts with
11
section 18.a—the alleged undisclosed or undervalued assets could not have
been unambiguously awarded to Wade under section 18.a but simultaneously
“concurrently” awarded to Deborah by the “residuary clause” if she demonstrates
in a post-judgment action that Wade failed to disclose or undervalued those
assets in his inventory and appraisement.
When portions of a contract cannot be reconciled, a court may resolve the
conflict by striking one of the provisions. See Ogden v. Dickenson State Bank,
662 S.W.2d 330, 332 (Tex. 1983); see also Overton v. Bengel, 139 S.W.3d 754,
758 (Tex. App.—Texarkana 2004, no pet.); Lavaca Bay Autoworld, L.L.C. v.
Marshall Pontiac Buick Oldsmobile, 103 S.W.3d 650, 659 (Tex. App.—Corpus
Christi 2003, no pet.); Henry v. Gonzalez, 18 S.W.3d 684, 688 (Tex. App.—San
Antonio 2000, pet. dism’d).
Section 18.a specifically awarded the disputed assets to Wade, and Wade
and Deborah positioned section 18.a in the divorce decree ahead of the
generally worded “residuary clause.” See Wells Fargo Bank, Minn., N.A. v. N.
Cent. Plaza I, L.L.P., 194 S.W.3d 723, 726 (Tex. App.—Dallas 2006, pet. denied)
(stating that to resolve conflicts in contract provisions, courts turn to rules that
specific provisions control over general provisions and provisions stated earlier in
an agreement are favored over subsequent provisions). Moreover, the
“residuary clause” has the effect of destabilizing section 18.a’s as-written final
asset awards, contributing to speculation and uncertainty in the finality of the
property division. Indeed, Deborah agrees that a section 18.a award is valid and
12
final in the absence of nondisclosure or undervaluation; she apparently has no
problem right now with numerous other assets awarded to Wade by section 18.a.
But Deborah also maintains that a section 18.a asset is “concurrently” awarded
to the other party via the “residuary clause” if nondisclosure and undervaluation
are later shown. Her construction of the divorce decree begs the following
question: When is an asset ever finally awarded to a party, considering that the
same asset could have been “concurrently” awarded to the other party based on
an event (a post-judgment action to “enforce” or to “clarify”) that has yet to
happen? As Wade suggests, Deborah’s theory could “potentially result in the re-
division and award of all marital assets to Deborah.”
Further, for Deborah to prevail upon her theory that she was awarded
assets under the “residuary clause,” a hearing and proof of an in-fact
undervaluation would be required in the trial court. Deborah’s contention of
undervaluation certainly could be contested by Wade, even under Deborah’s
interpretation of the “residuary clause.” However, the trial court lacks jurisdiction
to conduct an evidentiary hearing on the issue of a disputed asset’s actual value
because the trial court’s plenary power expired long ago. See Pearson, 332
S.W.3d at 364 (“A final, unambiguous divorce decree that disposes of all marital
property bars relitigation.”). As alluded to, allowing an asset awarded to one
party to be flipped and awarded to the other party in the manner sought by
Deborah would mean that there is never a final property division in the case, to
the detriment of both parties.
13
As written, the divorce decree either finally awarded Wade certain assets
or it did not. The decree could not have “concurrently” awarded Deborah assets
that were expressly, unambiguously, and finally awarded to Wade. For these
reasons, the “residuary clause” is ineffective.
The dissent (a) accuses the majority of “discard[ing]” contract principles
because we are unable to harmonize the “residuary clause” with section 18.a’s
final asset awards and (b) claims that the divorce decree can be construed so
that effect is given to all of its provisions—the decree apparently “awarded the
assets to one person in the event of one circumstance that had occurred before
signing of the decree or another person in the event of the opposite antecedent
circumstance.” Dissent Op. at 3, 5. [Emphasis added.] We disagree with the
dissent’s contentions on both counts. We reach our proper conclusion through a
precise application of relevant contract-construction principles, and as explained,
the divorce decree is not worded in such a way that Wade and Deborah intended
for the unambiguous section 18.a asset awards to be contingent upon
nondisclosure or undervaluation, nor could the decree as written “concurrently”
award Deborah assets that were expressly and unambiguously awarded to
Wade. We hold that in the unavoidable confrontation between the “residuary
clause” and section 18.a, the “residuary clause” must fail.
Examining the entire divorce decree, the only reasonable construction that
can be given to the “residuary clause” as written is that it permits the post-
judgment division of previously decree-divided property based upon the trial
14
court’s findings regarding the thoroughness of one side’s inventory and
appraisement. Unquestionably, this violates the family code’s express prohibition
on amending, modifying, altering, or changing a divorce decree’s division of
property. See Tex. Fam. Code Ann. § 9.007(a), (b). Deborah’s suit is an
impermissible collateral attack on the divorce decree, and the trial court clearly
abused its discretion by denying Wade’s plea to the jurisdiction. See Hagen, 282
S.W.3d at 902.
Absent extraordinary circumstances, mandamus will not issue unless
relator lacks an adequate remedy by appeal. In re Van Waters & Rogers, Inc.,
145 S.W.3d 203, 210–11 (Tex. 2004) (citing Walker, 827 S.W.2d at 839). This
requirement “has no comprehensive definition.” In re Ford Motor Co., 165
S.W.3d 315, 317 (Tex. 2005) (orig. proceeding). Whether a clear abuse of
discretion can be adequately remedied by appeal depends on a careful analysis
of costs and benefits of interlocutory review. In re McAllen Med. Ctr., Inc., 275
S.W.3d 458, 464 (Tex. 2008) (orig. proceeding). As this balance depends
heavily on circumstances, it must be guided by analysis of principles rather than
simple rules that treat cases as categories. Id. An appellate remedy is adequate
when any benefits to mandamus review are outweighed by the detriments. In re
Prudential Ins. Co. of Am., 148 S.W.3d 124, 136 (Tex. 2004) (orig. proceeding).
An appellate court should also consider whether mandamus will allow the court
“to give needed and helpful direction to the law that would otherwise prove
elusive in appeals from final judgments” and “whether mandamus will spare
15
litigants and the public ‘the time and money utterly wasted enduring eventual
reversal of improperly conducted proceedings.’” In re Team Rocket, L.P., 256
S.W.3d 257, 262 (Tex. 2008) (orig. proceeding) (quoting Prudential, 148 S.W.3d
at 136). Additionally, mandamus relief is appropriate when a trial court issues an
order after its plenary power has expired. In re Brookshire Grocery Co., 250
S.W.3d 66, 68 (Tex. 2008) (orig. proceeding); see In re Sw. Bell Tel. Co., 35
S.W.3d 602, 605 (Tex. 2000) (reasoning that mandamus is proper if a trial court
issues an order beyond its jurisdiction).
The trial court lacks subject-matter jurisdiction to redivide community
property that has already been awarded to Wade. See Tex. Fam. Code Ann.
§ 9.007(a), (b). The trial court issued the February 7, 2012 order denying
Wade’s motion to reconsider his plea to the jurisdiction and permitting Deborah
to conduct discovery in furtherance of her post-judgment action seeking to
redivide previously divided property after its plenary power over the divorce
decree had expired. See, e.g., In re Liberty Ins. Corp., 321 S.W.3d 630, 640
(Tex. App.—Houston [14th Dist.] 2010, orig. proceeding) (holding that relator had
no adequate remedy by appeal to challenge trial court’s clear abuse of discretion
in denying relator’s plea to the jurisdiction for failing to exhaust administrative
remedies). Moreover, the benefits to mandamus review are not outweighed by
the detriments, if any—mandamus will spare Wade, Deborah, nonparties, and
the public both time and money wasted litigating Deborah’s post-judgment action
16
seeking relief that the trial court has no subject-matter jurisdiction to award. See
Team Rocket, L.P., 256 S.W.3d at 262. We sustain Wade’s only issue.
V. CONCLUSION
We conditionally grant Wade’s petition for writ of mandamus and direct the
trial court (1) to set aside its February 7, 2012 order denying Wade’s motion to
reconsider his plea to the jurisdiction and permitting Deborah to conduct
discovery in furtherance of her post-judgment action to redivide previously
divided property and (2) to enter an order granting Wade’s plea to the jurisdiction.
A writ will issue only if the trial court fails to do so.
BILL MEIER
JUSTICE
PANEL: LIVINGSTON, C.J.; GARDNER and MEIER, JJ.
LIVINGSTON, C.J., filed a dissenting opinion.
DELIVERED: June 21, 2012
17
COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-12-00138-CV
IN RE W.L.W. RELATOR
----------
ORIGINAL PROCEEDING
----------
DISSENTING OPINION
----------
The majority concludes that the “residuary clause”1 in the parties’ agreed
decree of divorce irreconcilably conflicts with an earlier part of the decree that
allocates property to relator Wade White. The majority holds, therefore, that the
stipulation is ineffective, that implementing it violates section 9.007 of the family
1
The majority correctly explains that section 23 of the parties’ agreed
divorce decree is not a residuary clause as that term is traditionally understood.
See Majority Op. at 10; Pearson v. Fillingim, 332 S.W.3d 361, 363 (Tex. 2011)
(explaining that residuary clauses typically divide property not explicitly
mentioned in the decree). We will refer to section 23 as the parties’ stipulation
for a type of breach of their agreement as described below.
code,2 and that it must be struck. Because the parties’ bargained-for contractual
agreement may be construed in a way that gives effect to all of its provisions,
that fulfills the intent of the parties as expressed in the agreement, and that
complies with the family code, I respectfully dissent.
Section 5 of the parties’ agreed decree states in part, “The Court finds that
the parties have entered into a written agreement . . . . To the extent permitted
by law, the parties stipulate the agreement is enforceable as a contract.” The
parties’ decree, therefore, is a contract that can be enforced through contractual
remedies. See In re Green, 221 S.W.3d 645, 648–49 (Tex. 2007) (orig.
proceeding); McGoodwin v. McGoodwin, 671 S.W.2d 880, 882 (Tex. 1984) (op.
on reh’g); see also Spradley v. Hutchison, 787 S.W.2d 214, 218 (Tex. App.—Fort
Worth 1990, writ denied) (explaining that a “property settlement agreement
approved by a divorce court and incorporated into a decree of divorce is treated
as a contract, and its legal force and meaning are governed by the law of
contracts”). In fact, the terms of the decree arose from the parties’ mediated
settlement agreement, which the parties executed two months before the trial
court signed the decree. The mediated settlement agreement included the
stipulation and further included a representation that each party had made a “fair
and reasonable disclosure to the other of the property . . . set forth in their
respective” inventories. The decree itself, which each party approved as to both
2
See Tex. Fam. Code Ann. § 9.007 (West 2006).
2
form and substance, expressed that each party had read the decree and had
“fully” understood its contents.
Furthermore, the law of contracts requires us to
ascertain the true intent of the parties as expressed in the
instrument. In doing so, we must examine and consider the entire
contract in an effort to harmonize and give effect to all provisions so
that none are rendered meaningless. Contractual provisions should
be considered with reference to the entire instrument; no single
provision should control. Words in a contract must carry their
ordinary, generally accepted meanings unless the contract itself
shows that the terms have been used in a technical or different
sense. In construing a contract, we may not rewrite it nor add to its
language.
Doe v. Tex. Ass’n of Sch. Bds., Inc., 283 S.W.3d 451, 458 (Tex. App.—Fort
Worth 2009, pet. denied) (emphasis added) (citations omitted). Also, we must
weigh that parties to a contract
are considered masters of their own choices. They are entitled to
select what terms and provisions to include in a contract before
executing it. And, in so choosing, each is entitled to rely upon the
words selected to demarcate their respective obligations and rights.
In short, the parties strike the deal they choose to strike and, thus,
voluntarily bind themselves in the manner they choose. And, that is
why parties are bound by their agreement as written.
Cross Timbers Oil Co. v. Exxon Corp., 22 S.W.3d 24, 26 (Tex. App.—Amarillo
2000, no pet.) (emphasis added).
The majority’s opinion discards these principles. The plain meaning of the
stipulation that the parties chose is that “any asset” of the parties that was “not
disclosed or undervalued” in the parties’ inventories is awarded “to the party not
in possession or control of the asset.” [Emphasis added.] Because the items
described in section 18.a of the agreement, under the heading “Property to
3
WADE LLOYD WHITE,” are unquestionably assets of the parties, they must be
subject to the requirements of the parties’ clear stipulation.
It is true that section 18.a states that the items contained within the section
are awarded to Wade as his “sole and separate property” and that Deborah is
“divested of all right, title, interest, and claim in and to that property.” In a normal
case—one that does not have a clause with the language of the stipulation in this
case—it would be clear that the property in section 18.a would belong to Wade.
But our task requires us to construe and give effect to the whole contract, not just
section 18.a. See Doe, 283 S.W.3d at 458; see also In re Serv. Corp. Int’l, 355
S.W.3d 655, 661 (Tex. 2011) (orig. proceeding) (“No single provision taken alone
will be given controlling effect; rather, all the provisions must be considered with
reference to the whole instrument.”).
We can give effect to the entire contract so that we render no provision
meaningless. Harmonizing section 18.a with the stipulation, the parties’ contract,
as of the date that the contract was signed, made the items in section 18.a
(including the Republic ITS stock)3 Wade’s separate property forever, beyond
being subjected to any claim by Deborah, as long as he had properly disclosed
and had properly valued those items through his inventory that he submitted to
Deborah before signing the contract. But if, before signing the contract, he had
not properly disclosed or had not correctly valued the items listed in section 18.a
that he possessed or controlled, the stipulation, as of the date the contract was
3
Deborah alleges that Wade “grossly undervalued” this stock.
4
signed, awarded those items to Deborah.4 Thus, contrary to the majority’s
reasoning, section 18.a is not rendered “completely meaningless” through the
implementation of the stipulation because section 18.a granted items to Wade as
his separate property as long as he had correctly valued those items. See
Majority Op. at 8. The decree did not award the “same assets to two different
people,” see Majority Op. at 11, but it instead awarded the assets to one person
in the event of one circumstance that had occurred before signing of the decree
or the other person in the event of the opposite antecedent circumstance. We
agree with Deborah, therefore, that section 18.a and the stipulation complement
each other.
When the trial court’s decree and the parties’ contract are properly
construed this way,5 it is evident that Deborah, through her motion to enforce the
property division, has not asked the trial court to “amend, modify, or alter” the trial
court’s original division of the property in its decree, which would be
4
The stipulation states, “IT IS ORDERED . . . that any asset of the parties
that was not disclosed or undervalued . . . is awarded to the party not in
possession or control of the asset.”
5
I believe that this is the proper construction of how section 18.a can and
should be harmonized with the stipulation. At least, however, reasonable minds
could disagree as to how these provisions affect each other. In that event, the
parties’ contract would be ambiguous, the trial court would have jurisdiction to
clarify it, and the parties could offer parol evidence to support their respective
interpretations of the contract that they made. See Tex. Fam. Code Ann.
§§ 9.002, .006 (West 2006); DaimlerChrysler Motors Co., LLC v. Manuel, 362
S.W.3d 160, 179 (Tex. App.—Fort Worth 2012, no pet.); Murray v. Murray, 276
S.W.3d 138, 144 (Tex. App.—Fort Worth 2008, pet. dism’d) (“[A] court that
renders a divorce decree retains continuing subject-matter jurisdiction to clarify
. . . the decree’s property division.”).
5
impermissible. See Tex. Fam. Code Ann. § 9.007(a); Hagen v. Hagen, 282
S.W.3d 899, 902 (Tex. 2009) (“Attempting to obtain an order that alters or
modifies a divorce decree’s property division is an impermissible collateral
attack.”). Rather, by alleging that Wade undervalued property, Deborah is asking
the trial court to implement the stipulation that resulted from the parties’ bargain
and to enforce her ownership of the property subject to the stipulation as of the
date of the decree. This is permissible.6 See Tex. Fam. Code Ann. §§ 9.002,
.006–.007; see also Spradley, 787 S.W.2d at 218 (stating that a trial court has
inherent power to clarify or enforce its decree).
I believe that the majority’s disposition is based on its conclusion that
Deborah is impermissibly seeking to amend a provision of the divorce decree.
But it is actually the majority’s opinion that makes a “substantive change” to the
decree and that alters the expressed intentions of the parties and of the trial court
concerning the distribution of the parties’ assets. See Majority Op. at 6–7;
Shanks v. Treadway, 110 S.W.3d 444, 449 (Tex. 2003).
6
The majority cites Pearson, 332 S.W.3d at 363, as authority for its
statement that the trial court could not hold an evidentiary hearing on the issue of
an asset’s value in an enforcement proceeding under sections 9.002 and 9.006.
See Majority Op. at 13. The statute concerning enforcement proceedings does
not preclude the presentation of new evidence. See Tex. Fam. Code Ann.
§ 9.001(b)–(c) (West 2006) (explaining that suits to enforce are governed by the
rules of civil procedure and shall proceed as in civil cases generally); In re
Kalathil, No. 14-10-00933-CV, 2010 WL 3872083, at *2 (Tex. App.—Houston
[14th Dist.] Oct. 5, 2010, orig. proceeding) (mem. op.) (stating that a party is
entitled to pursue discovery in a section 9.006 proceeding).
6
For these reasons, I would hold that the trial court did not abuse its
discretion by denying Wade’s plea to the jurisdiction. I respectfully dissent to the
majority’s conditional grant of Wade’s petition for writ of mandamus.
TERRIE LIVINGSTON
CHIEF JUSTICE
DELIVERED: June 21, 2012
7