In the

Court of Appeals

Second Appellate 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.

Memorandum Opinion by Justice Wallach

MICHAEL BERNHARDT, Appellant

V. 

MARCIA GAIL BERNHARDT, Appellee
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MEMORANDUM 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, Michael contends that the evidence is legally and factually insufficient to 

support the trial court’s judgment and that the trial court’s refusal to provide him 

offsets constitutes an impermissible modification of the divorce decree. Michael’s 

argument is based on a provision in the parties’ agreement incident to divorce. That 

agreement allowed 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 that 

provision was incorporated by reference into the divorce decree. Because we hold that 

the evidence did not establish Michael’s entitlement to an offset and that the trial 

court’s enforcement order does not modify the divorce decree, we affirm.

Background

On September 29, 2016, the trial court signed an agreed final decree of divorce

dissolving 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 agreement 

incident 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 pledged as security 

for notes relating to ArrowMP, a business he co-owned. The AID further granted 
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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 of the following properties are foreclosed upon 

by the lien holder, or any successor 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 outstanding 

loan(s) for which these properties are pledged as security, Michael 

Bernhardt shall be entitled to a corresponding credit towards the 

outstanding amount due on the $1,685,294.00 judgment as set forth in 

the parties’ Agreed Final Decree of Divorce in the amount the balance 

of any outstanding loan(s) existing as of the date of this Agreement for 

which these following properties are pledged as security is reduced.

[Emphasis added.]

The AID listed those properties that were subject to an offset upon foreclosure, 

including Michael’s interests in four business entities and multiple vehicles that had 

been pledged as collateral to secure notes related to ArrowMP.

ArrowMP was sold in 2019. Beginning in September 2019, Michael stopped 

making the entire monthly payment due to Marcia, and starting in April 2020, 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 the debt he owed to the lienholders. That is, he decided that because he had 

sold the listed property for purposes of paying the debt secured by the property, he 

no longer had to pay Marcia anything under the agreement. In March 2020, Marcia 

had emailed Michael to tell him that she would give him credit for the cars that were 

“listed, sold, and money paid to the bank” once he gave her notarized documents

showing that information, but Michael never provided her with any documentation.
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In 2021, Marcia filed a “Motion for Enforcement of Property Division”

asserting that Michael had not made required payments under the AID and decree. See

id. § 9.001 (authorizing proceeding to enforce divorce decree, including any

contractual provisions under the terms of an agreement incident to divorce). At the 

evidentiary hearing, Marcia agreed that in executing the AID, her intention was “to 

give [Michael] a credit if the worst case happened to [ArrowMP] or those [listed] 

assets.” She did not deny that Michael no longer had some of the listed assets, and she 

stated that when she had previously requested documentation from Michael about 

which properties had been sold, it was because she “wanted proof to know how much

to give him credit 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 money under the divorce 

decree, that he had never provided Marcia with any documentary evidence that he had 

sold the assets, and that the AID did not require him to provide documentation. He 

described his selling of the assets as an “informal foreclosure” because he understood 

from the bank that he “had to . . . start selling these things and start paying against the 

debt or the bank was going to start taking actions against me with the courts.” He 

stated that if the bank had “forced the sale, then we’d go to auction and get pennies 

on the dollars which would be—would hurt us tremendously, as far as getting these 
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notes paid back.” Michael did not produce any documentation at trial to substantiate 

the amounts for which he claimed to have sold the vehicles.

The trial court signed an enforcement order denying Michael an offset and 

granting Marcia a judgment against Michael for $690,002.83. In the order, the trial 

court found that none of the properties listed in the AID had been foreclosed upon 

by the lienholder of any loan existing at the time of the AID and that Michael had 

never provided Marcia or the court with any documentation reflecting that any 

financial institution had given him credit towards the loans secured by the motor 

vehicles.

Michael filed a request for findings of fact and conclusions of law, but none 

were filed. Michael did not file a notice of past-due findings and conclusions.

Standard of Review

A. Reviewing Trial Court’s Findings and Conclusions

In a bench trial in which no findings of fact or conclusions of law are filed, the 

trial court’s judgment implies all findings of fact necessary to support it. Shields Ltd. 

P’ship v. Bradberry, 526 S.W.3d 471, 480 (Tex. 2017). When, as here, a reporter’s record 

is filed, these implied findings are not conclusive, and an appellant may contest them 

by challenging the legal and factual sufficiency of the evidence to support the 

judgment. Id. We apply the same standard when reviewing the sufficiency of the 

evidence to support implied findings that we use to review the evidentiary sufficiency 

of jury findings or a trial court’s express findings of fact. Id. We must affirm the 
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judgment if we can uphold it on any legal theory supported by the record. Rosemond v. 

Al-Lahiq, 331 S.W.3d 764, 766–67 (Tex. 2011).

B. Legal and Factual Sufficiency

We may sustain a legal-sufficiency challenge—that is, a no-evidence 

challenge—only when (1) the record bears no evidence of a vital fact, (2) the rules of 

law or of evidence bar the court from giving weight to the only evidence offered to 

prove a vital fact, (3) the evidence offered to prove a vital fact is no more than a mere 

scintilla, or (4) the evidence establishes conclusively the opposite of a vital fact. Gunn 

v. McCoy, 554 S.W.3d 645, 658 (Tex. 2018). In determining whether legally sufficient 

evidence supports the challenged finding, we must consider evidence favorable to the 

finding if a reasonable factfinder could, and we must disregard contrary evidence 

unless a reasonable factfinder could not. Cent. Ready Mix Concrete Co. v. Islas, 

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 deducible from the 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 aside the finding only if, after considering and weighing all 

the pertinent record evidence, we determine that the credible evidence supporting the 

finding is so weak, or so contrary to the overwhelming weight of all the evidence, that 

the finding should be set aside and a new trial ordered. Pool v. Ford Motor Co., 
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715 S.W.2d 629, 635 (Tex. 1986) (op. on reh’g); Cain v. Bain, 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 Contract

The construction of an unambiguous contract is a question of law for the 

court, which we review de novo. Tawes v. Barnes, 340 S.W.3d 419, 425 (Tex. 2011). 

“Our primary concern when we construe a written contract is to ascertain the parties’

true intent as expressed in the contract,” and “[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 interpretations.” Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 

465 (Tex. 1998). “Parties to a contract are masters 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 change the contract simply because we or one of the parties comes 

to dislike its provisions or thinks that something else 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).

Discussion

I. Whether Sufficient Evidence Supports Enforcement Judgment

Michael argues in his first issue that the evidence at trial was legally and 

factually insufficient to support the trial court’s enforcement order because the court 
8

failed to consider the evidence of his offsets under the AID. He contends that the 

parties never intended that a legal foreclosure proceeding was required before he 

would be entitled to an offset and that both parties testified that their intent was to 

give Michael credit if the listed vehicles were returned to the bank or if the proceeds 

of the assets’ sale were used to pay the loans against the property. Marcia responds 

that the evidence shows that Michael failed to make required payments and that he 

failed to produce any documentary evidence showing the sale of the assets or that the 

sale proceeds were applied to the balance of any loan for which the assets were 

pledged as collateral.

As both parties acknowledge, the AID does not spell out a process by which 

Michael’s right to an offset should be determined and does not define the term 

“foreclosed.” We therefore presume that the parties intended the plain, generally 

accepted meaning of the word. Epps, 351 S.W.3d at 865–66. To determine the word’s 

common meaning, “we look to a wide variety of sources, including dictionary 

definitions, treatises and commentaries,” and the word’s prior constructions in other 

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

351 S.W.3d at 865–66 (noting that we often consult dictionaries “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.) (considering both the common usage
9

of the term foreclosure, as found in Webster’s Dictionary, and its legal usage, as 

defined in Black’s Law Dictionary).

In legal usage, “foreclosure” refers to “a proceeding in court, or out of court, 

when provided for by a valid contract, to subject the property (or part thereof) 

covered by a lien to the payment 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. Peanut Growers Ass’n v. Womack, 179 S.W.2d 371, 373 (Tex. App.—Eastland 1944, 

no writ); see also Stewart 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 redemption,” and “as applied to liens, it relates to the sale and not to the 

judgment decreeing foreclosure”), aff’d, 79 S.W.2d 116 (1935). In accordance with this 

usage, Black’s Law Dictionary defines foreclosure as “[a] legal proceeding to terminate 

a mortgagor’s interest in property, instituted by the lender (the mortgagee) either to 

gain title or to force a sale in order to satisfy the unpaid debt secured by the 

property.” Foreclosure, Black’s Law Dictionary (11th ed. 2019). “Power-of-sale

foreclosure” or “nonjudicial foreclosure” is similarly defined as “[a] foreclosure 

process by which[ ] . . . the mortgaged property is sold at a nonjudicial public sale by a 

public official, the mortgagee, or a trustee, without the stringent notice requirements, 

procedural burdens, or delays of a judicial foreclosure.” Power-of-Sale Foreclosure, 

Black’s Law Dictionary (11th ed. 2019).
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Merriam-Webster defines foreclosure as “a legal proceeding that bars or 

extinguishes a mortgagor’s right of redeeming a mortgaged estate” and “the 

extinguishment (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-Webster 

Online Dictionary, https://www.merriam-webster.com/dictionary/foreclosure (last 

visited Mar. 20, 2023). The Cambridge Dictionary defines “foreclose” as “the action 

of taking back property that was bought with borrowed money because the money 

was not being paid back as formally agreed.” Foreclose, Cambridge Dictionary 

Online, https://dictionary.cambridge.org/dictionary/english/foreclosure (last visited

Mar. 20, 2023).

Under none of these definitions would Michael’s selling his encumbered 

property himself and using the proceeds to pay down his debt qualify as a foreclosure

by the lien holder. Under legal and common usage, foreclosure relates to a process 

taken by the lienholder to recover the property securing the lien. The AID’s wording 

reflects that meaning by its use of the phrase “foreclosed by the lienholder,” and Michael 

offers no argument that persuades us to ignore the commonly understood meaning of 

foreclosure or the AID’s “by the lienholder” language. Michael may have felt pressure 

from the bank to sell the vehicles to obtain funds to pay his debt, and he preferred to 

sell the vehicles himself to maximize the sales price, but none of the sales were a 
11

foreclosure by the lienholder. Accordingly, under the AID’s plain terms, his selling the 

property did not qualify him for an offset.

Michael argues that the context of the AID reflects that a legal proceeding by a 

lienholder was never the parties’ intention because “[t]here was no real property 

involved,” only personal property, “so a legal foreclosure process was never an

available option.” However, 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. Bus. & Com. 

Code Ann. § 9.601 (discussing secured party’s remedies under Uniform Commercial 

Code article governing security interests in personal property and fixtures, and listing 

foreclosure among the remedies); Excela Energy, LLC v. Exalt Real Est. Grp., LLC, No.

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 2381556, at *1 (Tex. App.—Houston [14th Dist.] Oct. 26, 2004, no pet.) 

(mem. op.) (discussing proceeding by school district to foreclose tax liens on business 

personal property); Smith v. Maximum Racing, Inc., 136 S.W.3d 337, 339 (Tex. App.—

Austin 2004, no pet.) (discussing proceeding to foreclose mechanic’s lien on vehicles).

We reject his argument that the parties could not have intended to refer to an action 

by the lienholder when they used the word foreclosed and the phrase “by the 

lienholder.”
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The AID is unambiguous, and although we may consider extrinsic evidence

that “illuminates contract language,” we may not consider extrinsic evidence “that 

adds to, alters, or contradicts the contract’s text.” URI, Inc. v. Kleberg Cnty., 543 S.W.3d 

755, 767 (Tex. 2018). “‘[C]ircumstances surrounding the formation of a contract may 

inform the meaning of a contract’s unambiguous language. But courts may not rely on 

evidence of surrounding circumstances to make the language say what it 

unambiguously does not say.’” Id. (quoting First Bank v. Brumitt, 519 S.W.3d 95, 

110 (Tex. 2017)). Accordingly, we do not consider evidence of the parties’ intent to 

construe the AID’s plain language.1 We overrule Michael’s first issue.

II. Whether Refusal to Grant Offsets Was an Impermissible Modification

In his second issue, Michael argues that the trial court’s refusal to provide 

offsets to him under the AID “due to judicial requirements outside the Agreement 

constitutes an impermissible modification of the Final Decree of Divorce in violation 

of the express provision of Texas Family Code § 9.007(a).” More specifically, he 

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’ intent from their testimony rather than 

the AID’s unambiguous language, we disagree with Michael’s assessment of that 

testimony. Although Marcia testified about her willingness to give Michael a credit if 

he had provided her with documentation of the sales, she did not testify that the 

parties’ 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 support that interpretation.
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court’s finding that he was not entitled to an offset because he did not provide 

documentation to Marcia was an impermissible modification of the AID. However, 

the trial court did not modify the AID, and Michael’s argument conflates the 

questions of whether he was entitled to the contractual offset and whether he satisfied

the separate offer from Marcia to give him credit for the sales despite his failure to 

satisfy the AID’s offset requirements.

The findings in the trial court’s order stated the following regarding Michael’s 

right to credit toward what he owed Marcia:

The Court finds that none of the properties listed in article 3 of the AID 

were foreclosed upon by the lien holder, or any successor or assign, of 

any outstanding loan(s) existing as of September 27, 2016, and that in an 

effort 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, sold, 

and money paid to the bank” after she received 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 the loans

secured by those motor vehicles nor did he produce such documentation 

in court.

The Court finds that the parties never entered into an enforceable 

agreement that the proceeds of the sale of the properties listed above 

would entitle MICHAEL BERNHARDT to a credit towards the original 

$1,685,294.00 judgment.

IT IS THEREFORE ORDERED that MICHAEL 

BERNHARDT’s request for a credit towards the outstanding amount 

due on the original $1,685,294.00 judgment is DENIED.
14

The findings that no lienholder had sold the property and that Michael had sold 

the property voluntarily related to Michael’s entitlement to 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 credit for the property that he had sold—an 

offer she made despite Michael’s not qualifying for an offset under the AID’s terms.

The trial evidence supported a finding that Marcia had offered to give him

credit for the sales and that he had failed to satisfy her offer. At trial, Marcia stated

that she had intended “to give [Michael] the opportunity to work through whatever 

financial situation his company” was experiencing. Her March 2020 email to Michael 

stated that she was aware of his situation and was willing to work with him, “but that 

goes both ways.” She told him,

You need to work with 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 proving that. You were

supposed to have done that at the time of each transaction. According to 

the decree, those amounts come off the back end of our agreement.

Please be aware that you have created an equally difficult situation 

for me. . . . You must find a way to meet your obligations. [Emphasis 

added.]

Michael acknowledged that he never provided her with any documents regarding the 

sales.

Accordingly, the trial court had evidence from which it could and did find that 

Marcia offered to give Michael credit for the vehicle sales if he provided her with 
15

documentation and that Michael never provided that documentation. The AID 

required foreclosure by the lienholder, but Marcia’s offer did not. The trial court’s 

finding regarding Michael’s failure to satisfy Marcia’s offer did not modify the AID or 

the divorce decree. We overrule Michael’s second issue.

Conclusion

Having overruled Michael’s two issues, we affirm the trial court’s order.

/s/ Mike Wallach

Mike Wallach

Justice

Delivered: March 23, 2023