Court Opinion

ID: 4057676
Source: CourtListenerOpinion
Date Created: 2016-09-29 08:43:13.302461+00
Date Added: 2024-06-11T14:32:13.967617
License: Public Domain

In The
                               Court of Appeals
                      Seventh District of Texas at Amarillo

                                   No. 07-14-00135-CV

                IN THE ESTATE OF JAMES A. LOFTIS, JR., DECEASED

                       On Appeal from the County Court at Law No. 1
                                     Ellis County, Texas
              Trial Court No. 13-E-2041-CV, Honorable Jim Chapman, Presiding

                                   October 23, 2015

                            MEMORANDUM OPINION
                 Before QUINN, C.J., and CAMPBELL and HANCOCK, JJ.

       John Steven Loftis, in his capacity as independent executor of the estate of his

father James A. Loftis, Jr., appeals the trial court’s declaratory judgment in favor of

appellee Rosemary Galloway Loftis. We will reverse the trial court’s judgment in part

and otherwise affirm it.

                                      Background

       Before their marriage in December 2005, James A. Loftis, Jr. and Rosemary

(then Galloway) signed a premarital agreement (PMA).1 After they married, Jim and

       1
        The premarital agreement referred to the couple as “Jim” and “Rosemary.” In
appellant’s brief, he uses the same references for simplicity, and refers to himself as
“John.” Hereafter, we will refer to those individuals by those given names.
Rosemary signed an agreement ratifying the PMA. Pertinent to this appeal, the PMA

included the following provisions:

                                      Stipulations
                                           ****
      2.      The parties are entering into this agreement in accordance with
      article XVI, section 15, of the Texas Constitution, as amended, and
      relevant sections of the Texas Family Code, altering by agreement what
      their marital property rights would be in certain property on and during
      their marriage and determining, in part, the claims each may lawfully
      assert against the other party and his or her estate, if and when the
      marriage is dissolved by judicial act or death.
                                          ****
                                        Article 2
                                 Property of the Parties
      2.2 Separate Property of Jim
             Rosemary expressly disclaims any express or tacit understanding
      or agreement that she has acquired or may in the future acquire any rights
      in Jim’s property or income, including all interest or rights in any
      nonvested property rights. All property listed in Schedule A of this
      agreement is stipulated and agreed to be the sole and separate property
      of Jim and will remain the separate property of Jim. All mutations,
      changes, and increases of the properties owned by Jim at the time of the
      parties’ marriage, including without limitation the properties listed in
      Schedule A, will be and remain the separate property of Jim. All of those
      properties then existing must be set aside to Jim in the event of a court-
      ordered declaration of voidness of marriage, annulment, or divorce, or set
      aside to his estate in the event of his death.
                                          ****
      2.5 No Community Estate Will Arise
             The parties specifically understand and agree that no community
      estate will arise or be created during their marriage. Therefore the parties
      agree that all earnings of each party, together with all income received,
      including but not limited to interest and dividend income, bonuses,
      director’s compensation, commissions, wages or salary received for
      services rendered, profits, distributions, revenues, royalties, stock, stock
      options, warrants, and other compensation and benefits of any type
      earned or received by that party, and any income and property derived
      from the reinvestment of such income, will be the separate property of the
      respective party.
                                           2
                                      ****
2.8 Management of Properties
        Each party will have the full, free, and unrestricted right to manage
the separate property over which he or she has control under section
3.101 of the Texas Family Code or succeeding provisions of similar import
and nature, including without limitation the right to convey or encumber the
property; to dispose of it by sale, gift, or otherwise; and to deal with it
without taking into consideration any rights or interests of the other party.
If the joinder of either party should be required by law in connection with
the execution of any document by the other party with respect to the
separate property of the other party, on request and from time to time, the
joining party must execute all such documents necessary to effect the
desires of the other party, including gift tax returns, but without any
personal liability of the joining party. Neither party will have the authority to
encumber or dispose of the other party's separate property without the
other party’s express written consent.
                                      ****
                                    Article 7
                   Dissolution of Marriage by Court Order
7.1 Separate Property
       If either party-files any proceeding for divorce, annulment, or to
declare their marriage void (a “dissolution proceeding”), each party agrees
that the other party will be awarded all his or her separate property,
including all property described in this agreement as being separate
property. Each party agrees to release all interests or claims he or she
may have in the other party’s separate property, and further agrees to
execute any documents necessary to set aside and confirm to the other
party his or her separate property and to release any and all claims that he
or she might have in and to the other party’s separate property.
7.2 Liabilities
       In the event of a dissolution proceeding between the parties, each
party agrees to be responsible for and pay all liabilities and obligations
associated with his or her separate property, including all property
described in this agreement as being separate property. Each party
further agrees to indemnify and hold the other party and his or her
property harmless from all liabilities associated with such party’s separate
property.

                                       3
7.3 Release and Waiver
      If either party files a dissolution proceeding, neither party may
request the court to divide the property of either or both parties in a
manner contrary to the terms of this agreement.
          Each party relinquishes, disclaims, and waives all rights, title, and
interest that he or she may have to seek a division of property and
liabilities in a dissolution proceeding contrary to what is provided for in this
agreement.

7.4 Division of Community Estate
      If the parties’ marriage is dissolved by court order, all community
property acquired during the marriage, if any, must be equally divided
between the parties.
                                      ****
                                   Article 8
 Transfer of Assets to Rosemary and Provisions Regarding Dissolution of
                           Marriage by Death
Jim’s Transfer of Assets to Rosemary and each party’s acceptance of the
          other party’s Will and Waivers to Be Signed on Death
       In further consideration of the loss by Rosemary, due to her
marriage to Jim, of Postal Annuity and Veteran survivor benefits, Jim
agrees and contracts with Rosemary that, at his death and by his will, he
will provide that Rosemary will receive the home, and contents of the
home, in which they are then living and the automobile that they are then
driving, free of debt.
                                      ****
        Unless designated as a named beneficiary under a written
instrument, each party waives and releases to the other party, and his or
her executors, administrators, or assigns, any and all rights of election
given to him or her as surviving spouse, or through him or her to his or her
heirs, to take against his or her last will and testament under any statutes,
now or hereafter in force, in Texas or any other state or foreign nation in
which the deceased party may have property at the time of his or her
death.
                                      ****

                                       4
      15.13 Titles and Captions
            Article headings, titles, and captions contained in this agreement
      are merely for reference and do not define, limit, extend, or describe the
      scope of this agreement or any provision.

      After their marriage, Jim and Rosemary lived in a residence located at 217

Bluebonnet Lane in Waxahachie, Texas.          It is undisputed the residence was Jim’s

separate property.

      In 2011, Jim executed a will, created a revocable trust, and executed a warranty

deed conveying the residence to the trustee. Rosemary was not a settlor of the trust,

but was its initial trustee. In March 2012, Jim amended his revocable trust, removed

Rosemary as trustee and appointed John trustee. The will devised Jim’s estate, after

payment of debts and expenses, to the trustee of the revocable trust.

      Jim filed for divorce on May 17, 2012. A January 15, 2013, amendment of the

divorce petition states John was Jim’s “court appointed guardian.” On February 1,

2013, Rosemary filed a counterclaim for divorce. Jim died on February 4, 2013, while

the divorce actions remained pending.

      John was appointed independent executor of his father’s estate and in that

capacity sued Rosemary for enforcement of Article 7 and return of the residence and

other assets.   Rosemary counterclaimed seeking to retain the residence and other

assets.

      Rosemary filed a motion for partial summary judgment which, inter alia,

requested a declaration:

      That pursuant to Article 8 of the Pre-Marital Agreement, ROSEMARY is
      entitled to clear title to the home and contents of the home, at 217
                                           5
       Bluebonnet Lane, Waxahachie, Texas, in which she and [Jim] were living
       at the time of his death, and the 2010 Lincoln Town Car automobile . . .,
       that she is driving, free of debt.
       John responded and filed a cross-motion for summary judgment. In it he sought,

inter alia, declarations:

       That Article 7 of the Pre-Marital Agreement governs the rights of the
       parties.
       That the house located at 217 Bluebonnet Lane, Waxahachie, Texas was
       transferred to the Trust on May 6, 2011 and therefore was not property
       owned by Mr. Loftis at the time of his death and is not subject to any of the
       provisions of the Pre-Marital Agreement.

       In the alternative that the Court find that the that the (sic) home located at
       217 Bluebonnet Lane, Waxahachie, Texas was property owned by Mr.
       Loftis at the time of his death, the Court should hold that said home and
       the and the (sic) 2010 Lincoln Town Car automobile constitute the
       separate property of Mr. Loftis and should be placed in the J.A. Loftis, Jr.
       Revocable Trust Account pursuant to Article 7 of the Pre-Marital
       Agreement and the Last Will and Testament of J.A. Loftis, Jr.

       Before the court signed an order on the motions for partial summary judgment,

the parties each filed additional motions for partial summary judgment. In her second

motion Rosemary, inter alia, requested declarations:

       That Article 8 of the Pre-Marital Agreement governs the rights of the
       parties in the event of the death of MR. LOFTIS or ROSEMARY.
       That the marriage of MR. LOFTIS and ROSEMARY was dissolved by the
       death of MR. LOFTIS.
       That pursuant to Article 8 of the Pre-Marital Agreement, ROSEMARY is
       entitled to clear title to the home and contents of the home, at 217
       Bluebonnet Lane, Waxahachie, Texas, in which she and MR. LOFTIS
       were living at the time of his death, and the 2010 Lincoln Town Car
       automobile . . . that she is driving, free of debt.

       In his second motion John, inter alia, requested declarations:

       That the J.A. Loftis, Jr. Revocable Trust is unambiguous and clearly
       indicates Mr. Loftis’s intention that (sic) home located at 217 Bluebonnet
       Lane, Waxahachie, Texas 75165 should be transferred to his children
                                             6
       because Mr. and Mrs. Loftis were engaged in divorce proceedings at the
       time of his death.
       That the J.A. Loftis, Jr. Revocable Trust is the owner of the home located
       at 217 Bluebonnet Lane, Waxahachie, Texas 75165 and thus neither the
       courts nor the trustee has any power to transfer the property to anyone
       other than Mr. Loftis’s children and thus the Court must vacate its ruling of
       September 20, 2013.
       The trial court found Article 8 controlled and ordered John to convey the

residence and an automobile to Rosemary. It denied John any relief.

                                          Analysis
Issues on Appeal

       John presents three issues on appeal, asserting, (1) the trial court erred in relying

on Article 8 rather than Article 7 for its declarations; (2) the trial court erred in rendering

summary judgment for Rosemary because the PMA allowed the parties to transfer their

separate property without regard for the rights of the other and Jim did so prior to death;

and (3) alternatively, the trial court erred in rendering summary judgment because, as to

the disposition of the residence and the automobile, the PMA is ambiguous.

       An appellate court reviews a trial court’s grant of summary judgment de novo.

Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex. 2005). The movant for

summary judgment has the burden of showing there is no genuine issue of material fact

and it is entitled to summary judgment as a matter of law. TEX. R. CIV. P. 166a(c).

Reviewing a summary judgment, we take evidence favorable to the nonmovant as true,

and indulge every inference and resolve every doubt in the nonmovant’s favor. Nixon v.

Mr. Property Management Co., 690 S.W.2d 546, 548-49 (Tex. 1985).

       When parties file cross motions for summary judgment, and one motion is

granted and the other denied, the appellate court reviews the summary judgment
                                              7
evidence presented by both sides and determines all questions presented. Comm’rs

Court of Titus County v. Agan, 940 S.W.2d 77, 81 (Tex. 1997). If the issue raised is

based on undisputed and unambiguous facts, then the reviewing court may determine

the question presented as a matter of law. Gramercy Ins. Co. v. MRD Invs., Inc., 47
S.W.3d 721, 724 (Tex. App.—Houston [14th Dist.] 2001, pet. denied).

       Courts interpret premarital agreements like other written contracts. Williams v.

Williams, 246 S.W.3d 207, 210 (Tex. App.—Houston [14th Dist.] 2007, no pet.);

McClary v. Thompson, 65 S.W.3d 829, 837 (Tex. App.—Fort Worth 2002, pet. denied).

In construing a contract a court’s primary concern is determining the parties’ true intent.

Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex.

2011). Accordingly the court “‘must examine and consider the entire writing in an effort

to harmonize and give effect to all the provisions of the contract so that none will be

rendered meaningless.’” Id. (quoting J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223,

229 (Tex. 2003)). Contract terms are given their plain and ordinary meaning unless the

instrument indicates the parties intended a different meaning. Reeder v. Wood Cnty.

Energy, LLC, 395 S.W.3d 789, 794-95 (Tex. 2012). Understanding the parties’ intent

requires a court examine the entire agreement in light of the circumstances present at

the time when the parties entered into the agreement. Anglo-Dutch Petrol. Int’l, Inc. v.

Greenberg Peden, P.C., 352 S.W.3d 445, 450-51 (Tex. 2011). No single provision

taken alone should control—instead, we must consider all provisions with reference to

the entire agreement. J.M. Davidson, 128 S.W.3d at 229.

                                            8
      Issue One – Article 7 vs. Article 8

      By John’s issue one, he challenges the trial court’s declaration that article 8 of

the PMA, rather than its article 7, governs the rights of the parties under the undisputed

facts presented in the summary judgment record. The facts are that Jim filed a divorce

petition in May 2012, Rosemary filed a counter-petition also seeking divorce in February

2013 and Jim died later that month while the petitions were pending.

      Article 7 of the PMA addresses the consequences of a divorce; article 8, those of

the dissolution of the marriage by death. Because the marriage had not been dissolved

when Jim died, Rosemary asserts article 8 governs. Because the parties had filed

divorce petitions, John contends article 7 governs.

      John’s argument begins by emphasizing the clause appearing in section 7.1, and

again in section 7.3, indicating the stated consequences flow if “either party files” a

proceeding to dissolve the marriage, and language of section 7.2, which begins, “[i]n the

event of a dissolution proceeding . . . .” This wording, John contends, indicates the

event that triggers the obligations the parties undertook in article 7 is the filing of a

divorce petition by either party.   But the focus of John’s argument is the second

sentence of section 7.1, which states “[e]ach party agrees to release all interests or

claims he or she may have in the other party’s separate property,” and states each party

further agrees to execute documents necessary for that purpose. John contends that

each party thereby undertook the obligation to release claims to the separate property

of the other party, and that under the unambiguous language of article 7, the obligation

was triggered when Jim filed his divorce petition. It is, in John’s view, an independent

obligation, binding on Rosemary without regard to any action of the divorce court.
                                            9
Rosemary contends article 7 unambiguously applies only if the marriage is dissolved by

court order.

       John responds that Rosemary’s reading of the second sentence of section 7.1,

which would suggest the agreed-upon release would follow or occur in conjunction with

a divorce decree, renders the sentence redundant and meaningless. He points out the

PMA and its property schedules defined the parties’ separate property and the divorce

court would constitutionally be prohibited from divesting a party of separate property.

       We do not agree that the second sentence of section 7.1 carries the meaning

John attributes to it when article 7 is considered in its entirety. As noted, article 7

contains three references to the filing of a dissolution proceeding. In two of them, the

sentence makes clear it is referring to the action of the divorce court. The first sentence

of section 7.1 states that in such an event, “each party agrees that the other party will

be awarded all his or her separate property . . . .”2 Similarly, the first sentence of

section 7.3 provides that neither party “may request the court to divide the property” in a

manner contrary to the PMA’s terms. Section 7.3 goes on to provide that each party

waives any right “to seek a division of property and liabilities in a dissolution proceeding

contrary” to the agreement.

       And section 7.4, addressing division of any community property, reads, “If the

parties’ marriage is dissolved by court order,” any community property must be divided

equally. John argues this language shows the parties knew how to require action by

court order and the absence of such language in the second sentence of section 7.1

supports his reading it became effective when a divorce petition was filed. We agree

       2
           Italics ours.
                                            10
we must “strive to give effect to every provision” of the PMA, Coker v. Coker, 650
S.W.2d 391, 393 (Tex. 1983), but we do not agree that precept requires us to accept

John’s reading. John argues “Rosemary’s interpretation ignores the plain language

providing for release upon the filing of a divorce proceeding.” But section 7.1 does not,

by its plain language, provide for release upon the filing. As we have noted, the first

sentence refers to the filing of a proceeding, and continues with language making clear

the sentence as a whole deals with the divorce court’s award of property. Harmonizing

the first and second sentences of 7.1, the agreed-upon release of interests in the other’s

separate property may well be seen as accompanying or following a divorce court order.

We do not find persuasive John’s contention the release necessarily would be

redundant of the parties’ constitutional entitlement to retain their separate property on

divorce. The Family Code does not contain a general requirement that a court confirm

separate property in a divorce decree3 and not every decree does so.4 And, in any

event, the repeated references in article 7 to actions of the parties and the court satisfy

us that the parties intended it to govern the consequences of the dissolution of their

marriage by court order.5

       3
        See TEX. FAM. CODE ANN. § 7.002(c) (West 2006) (requiring divorce court to
confirm ownership as separate property of income and earnings subject to partition or
exchange agreement).
       4
        See, e.g., Walton v. Johnson, 879 S.W.2d 942, 944 (Tex.App.—Tyler 1994 writ
denied) (post-divorce litigation over ownership of property); 2.1 TEXAS FAMILY LAW :
PRACTICE AND PROCEDURE F1.18[2] (LexisNexis Matthew Bender 2015) (“It is generally
considered advisable for the decree to confirm as separate property all significant
property that is separately owned by each spouse”).
       5
          Additional support for the trial court’s reading of article 7 can be found in the
PMA’s section 2.2, entitled “Separate Property of Jim,” the last sentence of which reads,
“All of those properties then existing must be set aside to Jim in the event of a court-
                                            11
       It is undisputed the parties’ marriage was dissolved by Jim’s death, not by a

court. The trial court did not err in its conclusion that, under the PMA’s unambiguous

terms, article 8 of the PMA controls, not article 7. We will overrule John’s first issue.

       Issue Two – Conveyance of Residence to Trustee

       John’s second issue addresses the consequences of Jim’s 2012 deed conveying

the Waxahachie residence to the trustee of his revocable trust.

       The trial court’s summary judgment recites that the PMA is unambiguous, that its

Article 8 governs the rights of the parties in the event of the death of Jim or Rosemary,

finds that their marriage was dissolved by Jim’s death, and finds that, pursuant to Article

8, Rosemary is entitled to “clear title to the home . . . at 217 Bluebonnet Lane,

Waxahachie, Texas, in which [they] were living at the time of his death . . . .” The

summary judgment goes on to find that Rosemary is entitled to judgment against John,

both in his capacity as independent executor and in his capacity as trustee,

“commanding him to deliver clear title[s] to the house . . . .”

       John argues his father’s conveyance of the residence to the trustee was

expressly authorized by section 2.8 of the PMA. That section permitted each of the

parties to manage that party’s separate property, including without limitation, the power

to convey separate property “without taking into consideration any rights or interests of

the other party.” John seems to argue that section 2.8 unambiguously permitted a party

to convey separate property without regard to, or even contrary to, a commitment

contained elsewhere in the PMA.         We cannot agree.          Such a position ignores the

__________________
ordered declaration of voidness of marriage, annulment, or divorce, or set aside to his
estate in the event of his death.”
                                              12
requirement that courts consider the entirety of an agreement, attempting to harmonize

and give effect to all its provisions so none are rendered meaningless. See Italian

Cowboy Partners, 341 S.W.3d at 333.

      That said, we agree in part with another of John’s contentions made in support of

his second issue. As John’s brief points out, Rosemary sought declaratory and other

relief against him in both his fiduciary capacities.6 His brief also argues that Rosemary

contended in the trial court Jim could not avoid the obligation he undertook in the PMA

to leave the residence to her merely by conveying it to a trustee. John goes on to argue

that Rosemary nevertheless did not assert “a legal claim challenging Jim’s transfer to

the trust or seeking to void it.” Rosemary’s pleadings assert a number of causes of

action against John, individually and in both fiduciary capacities, and against John’s

brother James A. Loftis III, individually. For our purpose in this opinion, we need not

address the question whether any of those causes of action could support a remedy

requiring John as trustee to convey the residence to Rosemary. What we do say is that

the summary judgment record does not demonstrate as a matter of law that Rosemary

is entitled to such a remedy. To that degree only, we will sustain John’s issue two.

      Issue Three - Ambiguity

      By his third issue, John presents an alternative argument contending that if

Rosemary’s position on the meaning of article 7 is reasonable, the PMA is ambiguous

because, he argues, his reading of article 7 is unquestionably reasonable. See Italian

Cowboy Partners, 341 S.W.3d at 333 (contract subject to two or more reasonable

      6
        After the trial court granted Rosemary partial summary judgment, “[a]ll claims,
defenses, and issues” regarding the Waxahachie residence were severed from the
remaining issues in the litigation.
                                           13
interpretations after applying pertinent rules of construction is ambiguous).          Our

conclusion, expressed in our discussion of John’s first issue, that the trial court did not

err by granting summary judgment to Rosemary on the application of article 8 over

article 7, requires that we overrule John’s third issue. See Plains Expl. & Prod. Co. v.

Torch Energy Advisors Inc., No. 13-0597, 2015 Tex. LEXIS 558, at *22 (Tex. June 12,

2015) (summary judgment not proper vehicle to resolve disputes about ambiguous

contract).

                                       Conclusion

       We overrule John’s issues one and three. We sustain his issue two in part and

reverse that part of the trial court’s February 5, 2014 “partial summary judgment nunc

pro tunc” that finds Rosemary is entitled to judgment against John, in his capacity as

trustee, “commanding him to deliver clear title[s] to the house,” and that orders John, in

his capacity as trustee, to deliver a deed to the Waxahachie residence to Rosemary. In

all other respects, the February 5, 2014 “partial summary judgment nunc pro tunc” is

affirmed. We remand the case to the trial court for further proceedings.

                                                 James T. Campbell
                                                     Justice

                                            14