## In the Court of Appeals Second App ellat e District of Texas at Fort Worth

___________________________ No. 02

- 22

- 00206

- CV

___________________________

On Appeal from County Court at Law No. 2 Wichita County, Texas Trial Court No. CCL

- 691

- 13 -F
Before Sudderth, C.J.; Bassel and Wallach, JJ.

M emo randum Opinion by Just ice Wallach 

### M ICHAEL 

### B ERNHARDT 

### , Appellant

V


### . M ARCIA 

### G AIL 

### B ERNHARDT 

### , Appellee2 MEMOR ANDUM OPINION The trial court signed a post

- divorce enforcement judgment in favor of Appellee Marcia Gail Bernhardt and against Appellant Michael Bernhardt

. In two issues, Mi chael contends that the evidence is leg all y and factually insuff icien t to support the t rial cour t ’ s judgment and that the trial court ’s refus al to provide him
offsets constitutes an imp ermissible modification of the divorce decree. M icha el ’ s argument is based on a provision in the parties ’ ag re eme nt incident to divorce . T hat agreement allowe d Michael an offset on his payment obligations to Marcia if certain

assets were foreclosed upon by the lenders who held liens on those assets , and t hat provision was incorporated by reference into the divorce de cree. Because we hold that
the evidence did n ot establish Michael ’ s entitlement to an offset and that the trial

cour t ’ s enforcement order does not modify the divorce decree, we affirm.
B ackground On September 29, 2016, the trial court signed an agreed fina l dec ree of divorce
disso lving Michael ’ s and Marcia ’ s marriage

. The decree awarded Marcia a judgment of $1,685,294 and required Michael to pay Marcia $5,000 a month to satisfy that judgment. The decree further incorporated by reference the terms of an agre ement incide nt to divorce ( the AID). See Tex. Fam. Code Ann. § 7.006

. In the AID, the parties agreed that Michael would receive the property listed

on an attached exhibit, including certain properties that had been pledg ed as security
fo r n otes relating to Arrow MP, a business he co

- ow ned. The AID further granted3 Michael an offset against what he owed Marcia if the properties that had been pledged as collateral were foreclosed upon: The parties agree that if any o f the following propert ies are f oreclosed upo n by the lien holder , or any succ essor or assign, of any outstanding loan(s) existing as of the date of this Agreement, and the property or proceeds are used towards the satisfaction of the balance of the outs ta n ding loan(s) for which these properties are pledged as security, Mich ael Bernhardt shall be entitled to a corresponding credit towards the outstanding amount due on the $1,685,294.00 judgment as se t forth in the parties ’ Agreed Final Decree of Divorce i n t he amount the balance of any outstanding loa n(s) existing as of the d ate of this Agreement for which these following properties are pledged as security is reduced. [ E mphasis added.] The AID listed those properties that were subject to an offs et upon foreclosure , incl uding Michael ’ s interests in four business entities and multiple veh icles that had been pledged as collateral to secure notes related to ArrowMP

. ArrowMP was sold in 2019. Begin ning in September 2019, Michael stoppe d

m aking the entire month ly payment due to Marcia , and starting in April 2 020, he stopped paying her entirely. Michael ’ s reasoning for not making payments after April
2020 was that he had sold the assets listed in the AID and used the proceeds to pay
down th e debt he owed to the l ienholders

. That is, he decided that be cause he h ad
sold the listed property for purposes of paying the debt secured by the property, he no longer had to pay Marc ia anything under the agreement. In March 2020 , M arcia
had emailed Mich ael to tell him that she would give him credit for the cars that were

“ l isted, sold, and money paid to the bank ” once he gave her notarized documents showing that information, but Mi chael never provided her with any document ation

.4 In 202 1, Marcia filed a “ Motion for Enforcement of Property Division ” asserting that Michael had not made required payments under the AID and dec ree. See
id

. § 9.001 (authorizing proceeding to enforce divorce decree, includin g a ny contractual provisi ons under the terms of an agreement incident to divorce). At the evidentiary hearing, Marcia agreed tha t in executing the AID, her intention was “ to give [Michael] a credit if the worst case happened to [Arrow MP ] or those [listed]

as s ets. ” She di d not deny that Michael no longer had so me of the listed assets, and she stated that when she had previously requ ested documentation from Michael about which properties had been sold, it was because she “ wanted proof to know how mu ch to give him c redit for

. ”
Michael testified that he no longer had any property that would be sufficient to pay what he owed Marcia, that he had sold most of the assets on the list, that he had consequently determined that he no longer owed any mo ne y under the div orce dec r ee, that he had never provided Marcia wi th any documentary evidence that he had sold the assets, and that the AID did no t require him to provide documentation. He described his selling of the assets as an “ inf orm al f oreclosure ” b e cause he understood
from the bank t hat he “ had to . . . start selling these things and start paying against the debt or the bank was going to star t taking actions against me with the courts. ” H e stated that if the bank ha d “ for ced the sale, the n we’d go to auction and get pennies
on the dollars which would be

— would hurt us tremendously, as far as getting these5 notes paid back. ” Michael did not produ ce any documentation at trial to substantiate
th e amounts for w hi ch he claimed to have sold the vehicles. The trial court signed an enforcement order denying Michael an offset and granting Marc ia a judgment against Michael for $690,002.83. In the order, th e trial
court found that non e of the properties lis ted in the AID had been foreclosed upon by the lien holder of any loan ex isting at the time of the AID and that Michael had

ne ver provided Marcia or the court with any documentation reflecting that any
fina ncial institution had give n hi m c redit towards th e loans secured by the motor
vehicles. Michael filed a request for fi ndings of fact and conclusions of law, but none

w ere filed. Michael did not file a notice of past

- due findings and conclusions.
Standard o f Revie w A. Re viewing Trial Co urt ’ s Findings and Conclusions
In a bench trial in which no findings of fact or conclusi ons of law are filed, the trial court’s judgment implies all findings of fact necessary to support it. Shields Ltd. P’ship v. Bradberry , 5 26 S.W. 3d 4 71, 480 (Tex. 2017)

. When , as here, a reporter’s re cord is filed, these implied findings are not c onclusive , and an appellant may contest them by challenging the legal and factual sufficiency of the evidence to support the judgment

. Id. We apply the sa me s tan dard when review ing the sufficiency of the evidence to support implied findings that we use to review th e evidentiary sufficiency
of jury findings or a trial court’s express findings of fact. Id. We must affirm the6 judgment if we can uphold i t on an y le gal theory support e d by the record. Rosemond v.
Al

- Lahiq , 331 S.W.3d 764, 766

– 67 (Tex. 2011)

. B. L egal and Factua l Sufficiency We may sustain a legal

- suf ficiency challenge

— that is, a no

- evidence challenge

— only when (1) the record bears no eviden ce of a vit al fact, (2) the ru les of law or of evidence bar the court from giving weight to the only evidence offered to prove a vital fact, (3) the evidence offere d to prove a vital fact is no more than a mere scintilla, or (4) the evidence establishes co nclusiv ely the opposite of a v ital fact. Gunn v. McCoy , 554 S.W.3d 645, 658 (Tex. 2018). In determining wheth er legall y sufficient evidence supports the challenge d finding, we must consider evidence favorable to the finding if a reasonable factfinder could , and w e mu st disregard contra ry evidence
unless a reasonable factfinder could not. Cent. Ready Mix Concrete Co. v. Is las , 228 S.W.3d 649, 651 (Tex. 2007); City of Keller v. Wilson , 168 S.W.3d 802, 827 (Tex. 2005). We indulge “every reasonable inference de ducible fro m t he evidence” in support of the challenged finding. Gunn , 554 S.W.3d at 658 (quoting Bustamante v. Ponte , 529 S.W.3d 447, 456 (Tex. 2017)). When reviewing an assertion that the evidence is factually insufficient to support a finding, we set as ide the fin din g only if, after considering and weighing all the pertinent record evidence, we determine tha t the credi ble evidence supporting the finding is so weak, or so contrary to the overwhelming weight of all the evidence, that
the finding should be set asi de a nd a new trial orde red. Pool v. Ford Motor Co. ,7 715 S.W.2d 629, 635 (Tex. 1986) (o p. on reh’g); Ca in v. Bai n , 709 S.W.2d 175,
176 (Tex. 1986); Garza v. Alviar , 395 S.W.2d 821, 823 (Tex. 1965). C. Reviewing Trial Court ’ s Construction of Contr act The con stru cti on of an unambig uous contract is a question of law for the court, which we review de novo

. Tawe s v. Barn es , 340 S.W.3d 419, 425 (Tex. 2011)

.

“ Our primary concern when we construe a written contract is to ascer tain the parties ’
true intent as express ed i n t he contract , ” an d “ [w] e may look to the entire agreement in an effort to give each part meaning

. ” Epps v . Fowler , 351 S.W.3d 862, 865

– 66 (Tex. 2011)

. A contract is not ambiguous “ merely because the parties advance conflicting contract interpr et ations

. ” Kel ley

- Coppedge, Inc . v. Highlands Ins. Co. , 980 S.W.2d 462,
465 (Tex. 19 98)

. “ P arties to a contra ct are mas ters of their own choices and are entitled to select what terms and provisions to include in or omit from a contract , ”
and “ [w] e cannot c hange th e c ont ract simply becau se we or one of the parties comes to dislike its prov isions or thinks that something els e is needed in it. ” Consol. Petroleum, Partners, I, LLC v. Tindle , 168 S.W.3d 894, 899 (Tex. App.

— Tyler 2005, no pet.) (citations omitted ).
Discu ssi on I. Whether Suffic ien t Evidence Supports Enforcement Judgment
Michael a rgues in his first issue that t he e vidence at trial was legally and factually insufficient to support the trial court ’ s enforcement order because th e court8 failed to consid er the e vid enc e of his offsets under the AID. He contends that t he parties never intended that a legal foreclosure proc eeding was required before he would be entitled to an offset and that b oth parties testified that their intent was to give Mi chael credit if the lis ted vehicles were re turned to the bank or if the proceeds
of the assets ’ sale were used to pay the loans aga inst the property. Marcia respon ds
that t he evidence shows that Michael failed to make required payments and that he failed to produce an y docume nta ry evidence showing the sale of the assets or th at the sale proceeds were applied to the balance of any loan for which the as sets were pledged as collateral.
As both parties ac knowledge , the AID d oes not spel l out a process by which
Michael ’ s ri ght to an off set sh ould be det ermined and does not define the term

“ foreclosed

. ” We theref ore presume that the parties intended the plain, generally accepted meaning of the word

. Epps , 35 1 S.W.3d at 865

– 66 . To determine th e wor d ’ s

common meaning , “ we look to a wi de var iety of sources, including dictiona ry definitions, treatises and commentaries, ” and the word ’ s prior cons tructions in other

contexts
. Jaster v. Comet II Const., Inc. , 438 S.W.3d 556, 563 (Tex. 2014) ; see also Epps , 35 1 S.W.3d at 865

– 66 ( noting that w e o fte n consult diction aries “ to discern the natural meaning of a common

- usage term not defined by contract ” ) ; Wells Fargo Fin. Tex., Inc. v. Valero , No. 07

- 12

- 00218

- CV, 2013 WL 4531700, at *2 (Tex. App.

— Amarillo Aug. 21, 2013, pet. denied) (mem. op .) ( con sid eri ng both the commo n usage9 of the term foreclosure , as found in Webster ’ s Dict ionary , and its legal usage , as defin ed in Black ’ s Law Dictionary ). In legal usage, “f oreclosure ” refers to “ a proceeding in court, or out of court, when provided for by a va lid co ntract, to subjec t the property (or part thereof) covered by a lien to the p ayment of the debt secured by the lien ” that “ has the effect of extinguishing all right, title or interest, if any, of the defendants in the property

. ”
Sw. Pean ut Grow ers Ass ’ n v. Wom ack , 179 S.W.2d 371, 373 (Tex. App.

— Eastland 1944,
no writ ) ; see also St ewart v. Rockdale State Bank , 52 S.W.2d 915, 916 (Tex. App.

— Austin 1932) (stating that as to mortgages, the term foreclosure “ implies the cutting off of the right of re d emptio n , ” and “a s a ppli ed to liens, it relates to the sale and not to the judgment decreeing f oreclosure ”) , aff ’ d

, 79 S.W.2d 116 (1935)

. In accordance with this
usage , Black ’s Law Dictionary defin es fore closure as “ [a] legal proceeding to terminate

a mor t gagor ’ s interes t i n pr operty, instituted by the lender (the mortgagee) either to gain title o r to force a sale in order to satisfy the unpaid debt secured by the property
. ” Foreclosure , B lack ’ s Law Dictionary (11th ed. 2019)

. “ Power

- of

- sale
foreclosure ” o r “ nonj udicial fo rec losu re ” is similarly defined as “ [a] foreclosure process by which [ ]

. . . t he mortgaged prop erty is sold at a nonjudicial public sale by a public official, the mortgag ee, or a trustee, without the stringent notice requirements, procedur a l burd ens, or de lay s of a judicial foreclosure. ” Power

- of

- Sale Fore cl osure, Black ’ s Law Dictio nary (11th ed. 20 19)

.10 Merriam

- Webs ter defines foreclosure as “ a legal proceeding that bars or extinguishes a mortgagor ’ s rig ht of redeeming a mortgaged estate ” a nd “ t he exting uis hmen t (as under the provisions of Article 9 of the Uniform Commercial Code) of the rights of a debtor in personal property subject to a security interest by judicial proceedings and especially by judicial sale

. ” Foreclosure, Merriam

- Webs te r O n l ine Dict i ona r y, https://www.merriam

- webster.com/dictiona ry/foreclosure ( last visited Mar. 20 , 20 2 3 )

. The Cambridge Dictionary defines “ fo reclose ” as “ t he action
of tak ing back property that was bought with borrowed money because the money was not bein g pai d back as formally ag reed

. ” Foreclose, Cambridge Dictionar y Online , https://dictionary.cambridge.org/ dictionary/ e nglish/ foreclosure ( last visited
Mar. 20 , 20 2 3 )

. Under none of these defi nitions would Michael ’ s selling h is encumbered property himself a nd us ing the proceed s to pay down h is deb t qualify as a fo reclosure by the lien holder

. Under legal and common usage, foreclosure relates to a p rocess taken by the lienholder to recover t he property securing the lien

. The AID ’ s wording
reflects that meanin g b y its use of th e phrase “ forec losed by the l ienholder , ” and Michael
offers no argument that persua des us to i gnore the com mon ly understood me aning of
foreclosure o r the AID ’ s “ by the lienholder ” language. Michael may have felt pressure
from the bank to s el l the vehicles to obtain funds to pay his debt, and h e preferred to
sell the vehicles himself to maximi ze the sale s price, but none of the sales were a11 foreclosure by the lienholder

. Accordingly, under the AID ’ s p lain t erms, his selling the property did no t qualify him f or an offset

. M ichael argues that the context of the AID reflects that a legal proceeding by a
lien holde r was never the parties’ intention because “[t]here was no real property involved,” only personal property, “so a legal foreclosure pr oce ss was never an available opti on.” Howev er, Michael cites no authority to support this assertion, see Tex. R. App. P. 38.1 ( i), and the word foreclosure is sometimes used to describe a
lienholder’s remedy with respect to personal property. See, e.g. , Tex . B us. & Com

. Code Ann. § 9.6 01 (discussing secured party’s remedies under Uniform Commercial
Code article govern ing s ecurity interests in personal property and fixtures, and listing foreclosure among the remedies); Excela Energy, LLC v. Exalt Real Est

. Gr p
. , LLC , N o. 14

- 16

- 00388

- CV , 2017 WL 2292586, at * 1 (Tex. App.

— Houston [14th Dist.] May 25, 2017, pet. denied) (mem. op.) (discussing landlord’s foreclosure of landlord’s lien on tenant’s personal property); Walsh v. Alief ISD , No. 14

- 04

- 00076

- CV,
2004 WL 238 1556, a t *1 (Tex. App.

— H ouston [14th Dist.] Oct . 26, 2004, no pet.) (mem. op.) (discussing proceeding by sch ool d istrict to foreclose tax liens on business personal property) ; Smith v. Maximum Racing, Inc. , 136 S.W.3d 337, 339 (Tex. A pp.

— Austin 2004, no pe t.) (di sc ussing proceedi ng to foreclose mechani c’s lien on vehicles). We reject his argument that the partie s cou ld not have intended to refer to an action by the lienholder when they used the word foreclosed and the phrase “ by the
lienholder

. ”12 The AID is unambig uo us , and althoug h we may consider extri nsic evidence
th at “ illuminates contrac t language , ” we may no t consider extrinsic evidence “ that adds to, alters, or contradicts the contract ’ s tex t. ” URI, Inc. v. Kleberg Cnty

. , 543 S.W.3d 755, 767 (Tex. 2 018 )

. “ ‘[C ] i rcumstances sur rounding the formation of a contract may inform the meaning of a contract ’ s unambigu ous l anguage. But courts may not rely on evidence of surrounding circumstances to make the language say what it

una mbiguously does not say. ’ ” Id. ( q uoting Fi rst Bank v. Bru mitt , 519 S.W.3d 95,
11 0 (Tex. 2017) ). Accordingly, we do not consider evidence of t he parties ’ intent to
construe the AID ’ s plain language. 1 We overrule Mic hael ’ s first issue.
I I. Whether Refusal to Grant Offsets Was an Impermis sib le Mo di f i cation
In his second issue, Michael a rgues t hat t he trial court ’ s refusal to provide
offsets to hi m under the AID “ due to judicial requirements outside the Agreement constitutes an impermissible modification of the Final Decree o f Divorce in vi ola tion
of t he express pro vision of Texas Family Code § 9.007(a). ” More specifically, h e asserts that the AID had no requirement for him to provide documentation of the

“ cars that were listed, sold, and money paid to the bank , ” and therefore the trial

1 Even if we were to derive the parties ’ inten t f rom t he ir testimony rather t han the AID ’ s unambiguous language, we disagree wi th Michael ’ s assessment of that testimony. A lthough Marcia testified about her willingness to give Michael a credit if he had provided her with documentation of the sales, she di d not t es tify that the parti es’ intent was that Michael could sell the property, use the proceeds to pay debt, and then unilaterally declare his right to and the amount of an offset. More importantly, the AID’s language does not suppor t that interpretat ion

.13 cour t ’ s findin g that he was no t entitled to an offset becaus e he did not provide
document ation to Marcia was an im permissible modification of the AID. However,

t he trial court did not modify the AID , and Michael ’ s argument confl ates the questions of whether he wa s entit l e d to the contrac tual offset and whether he sat isfied the separate offer from Marcia to give him cr edit for the sales despite his failure to satisfy the AID ’ s offset requ irements

. The findings in the trial court ’ s order stated the following rega rdi ng Mich ae l ’ s right t o cr edit toward what he owe d Marcia: The Court finds that none of the properties liste d in arti cle 3 of the AID were foreclosed upon by the lien holder, or any successor or assign, of any outstanding l oan(s) existing as of September 27, 2016, an d that in an ef fort to pay loans owed to his creditor(s), MICHAEL BERNHARDT voluntarily sold the following properties: [list omitted] The Court finds that MARCIA BERNHARDT offered to give MICHAEL BERNHARDT credit for the “cars that were listed, so ld, and m oney paid to th e bank” after she recei ved proper documentation proving that had occurred. However , MICHAEL BERNHARDT never provided MARCIA BERNHARDT with documentation reflecting that

. . . any financial institution had given him credit towards th e loans s ecured by those m otor vehicles nor did h e produce such documentation in court. The Court finds th at the part ies never entered into an enforceable agreement that the proceeds of the sale of the properties listed above would entitle MICHAEL BERNH ARD T to a cr edit towards the original $1,685,294.00 judgment. IT IS THEREFORE ORDERED that MICHAEL BERNHARDT’ s request f or a credit towards the outstanding amount due on the original $1,685,294.00 judgment is DENIED

.14 The finding s that no lienholder had sol d t he prop er ty and th at Michael had sold
the pro perty voluntarily related to Michael ’ s entitle ment t o an offset under the AID ’ s

terms. The finding regarding the lack of documentation , on the other hand, related to
Marcia ’ s offer in 2020 to give Michael cre d it for th e p roperty that he had sold

— an off er she made despite Michael ’ s not qualifying for an offs et under the AID ’ s terms. The trial ev idence supported a finding that Marcia had offered to give him
credit for the sales and that he had f ail ed to satisfy her offer

. A t trial, Marcia stat ed
tha t she had intended “ to give [Michael] t he opportunit y to work through whatever
financial situation his company ” was experiencing

. Her March 2020 email to Michael
stated that she was aware of his situ ation and was willi ng to work w ith him, “ but that
go es both ways. ” She told him , You need to work w ith me and find a way to pay something. I will give you credit on cars that were listed, sold, and money paid to the bank once I have notarized documents pro ving that . You were su pposed to have done that at th e time of each transaction. According to the de cree, those amounts come off the back en d of our agreement. Please be aware that you have created an equally difficult situation for me.

. . . You must find a way to meet your obl igation s. [Emphasis added.]
Mi chael acknowledged that he never pro v ided her with any documents rega rding the
sales. Accordingly, the trial court had evidence from which it could and did find that
Marcia offer ed to give Mich ael credit for the ve hicle sa l es if he p ro vided her with15 documentation and that Michael never provi ded that documentation

. The AID required foreclosure by the lienholder, but Marcia ’ s offer did not. The trial court ’ s finding regarding Michael ’ s fail ure to satisfy Marcia ’ s offer did not mo dify th e AID or
the d ivorce decree

. We overrule Michael ’ s second i ssue. Conclusion Having overruled Michael ’ s two issues, we affirm th e trial court ’ s order.

/s/ Mike Wallach Mike Wallach Justice Delivered: March 23, 2023