Court Opinion

ID: 4075978
Source: CourtListenerOpinion
Date Created: 2016-09-30 06:53:30.068021+00
Date Added: 2024-06-11T07:45:20.555483
License: Public Domain

Opinion issued December 17, 2015

                                     In The

                              Court of Appeals
                                    For The

                          First District of Texas
                            ————————————
                              NO. 01-14-00967-CV
                           ———————————
                   SHAWN LYNN HALLSTED, Appellant
                                       V.
                  KEVIN CHARLES MCGINNIS, Appellee

                   On Appeal from the 311th District Court
                            Harris County, Texas
                      Trial Court Case No. 2010-41950

                                 OPINION

      Shawn Lynn Hallstead sued Kevin McGinnis, her former husband, claiming

that he failed to comply with the provision of their agreement incident to divorce

(AID) requiring him to make periodic alimony payments. As damages for her claim,
Shawn sought compensation calculated pursuant to the AID’s default and

acceleration clause.

      The trial court held a bench trial and entered judgment denying Shawn’s

request for relief, and later, her motion for new trial. On appeal, Shawn contends

that (1) the trial court erred in rendering judgment denying her claim for breach of

the AID and in denying her motion for new trial; and (2) the judge who presided

over the bench trial, who is no longer on the bench, engaged in judicial misconduct

that prejudiced Shawn. We reverse and remand.

                                BACKGROUND

      Shawn and Kevin entered into their AID in March 2001, and the trial court

approved and incorporated it into the parties’ final decree of divorce. Article 3 of

the AID obligated Kevin to pay monthly contractual alimony payments to Shawn.

The parties dispute whether the AID obligated Kevin to make the monthly payments

until January 2014 or whether it obligated him to pay “permanent” alimony, that is,

until either Kevin or Shawn’s death. They do not, however, dispute that Kevin

complied with the contractual alimony payment provision until January 2010, when

he stopped making the monthly payments.

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                                     DISCUSSION

I.    Breach of the Agreement Incident to Divorce

      Shawn first claims that the trial court erred in denying her breach of contract

claim, contending that the evidence is neither legally nor factually sufficient to

support the trial court’s rulings.

      A.     Standards of review

      We review the sufficiency of the evidence supporting a trial court’s

challenged factual findings by applying the same standards that we use in reviewing

the legal or factual sufficiency of the evidence supporting jury findings. Catalina v.

Blasdel, 881 S.W.2d 295, 297 (Tex. 1994); Zenner v. Lone Star Striping & Paving,

L.L.C., 371 S.W.3d 311, 314 (Tex. App.—Houston [1st Dist.] 2012, pet. denied).

When, as here, the appellate record includes the reporter’s record, the trial court’s

factual findings, whether express or implied, are not conclusive and an appellant

may challenge the legal and factual sufficiency of the evidence supporting them.

Zenner, 371 S.W.3d at 314.

      We review any legal conclusions drawn from the facts, whether express or

implied, to determine their correctness. BMC Software Belgium, N.V. v. Marchand,

83 S.W.3d 789, 794 (Tex. 2002). In an appeal from a bench trial, we review a trial

court’s legal conclusions de novo and will uphold them on appeal if the judgment

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can be sustained on any legal theory supported by the evidence. Id.; Zenner, 371
S.W.3d at 314–15.

      Because the parties do not dispute the facts salient to Shawn’s claim for breach

of the AID, we consider whether the trial court erred in impliedly concluding that

the AID’s periodic alimony payment provision was unenforceable as a matter of law.

      B.     Interpretation of agreement incident to divorce

      The Family Code provides that, in a divorce proceeding, the parties may enter

into an agreement incident to divorce concerning “the division of the property and

the liabilities of the spouses and maintenance of either spouse.” TEX. FAM. CODE

ANN. § 7.006(a). If the court approves the parties’ agreement, it may set forth the

agreement in full or incorporate the agreement by reference in the final decree. Id.

§ 7.006(b). Once the trial court has approved the parties’ agreement and made it

part of the judgment, the agreement is no longer merely a contract between private

individuals. Ex parte Gorena, 595 S.W.2d 841, 844 (Tex. 1979) (orig. proceeding).

It becomes part of a valid and binding final judgment and is enforceable as part of

the decree. Id.; see Jenkins v. Jenkins, 991 S.W.2d 440, 445 (Tex. App.—Fort Worth

1999, pet. denied); Shoberg v. Shoberg, 830 S.W.2d 149, 152 (Tex. App.—Houston

[14th Dist. 1992, no writ).

      An agreement incorporated into a divorce decree is a contract subject to the

usual rules of contract interpretation. See Broesche v. Jacobson, 218 S.W.3d 267,

                                          4
271 (Tex. App.—Houston [14th Dist.] 2007, pet. denied).            In construing an

agreement incident to divorce, we look to the parties’ intentions as manifested in the

written agreement. McPherren v. McPherren, 967 S.W.2d 485, 490 (Tex. App.—

El Paso 1998, no pet.), cited in Kelley v. Kelley, No. 14-04-00519-CV, 2015 WL
3799693, at *2 (Tex. App.—Houston [14th Dist.] 2015, no pet.) (mem. op.); see

Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex. 2006).

To discern the parties’ intent, we “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.” Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983)

(emphasis in original). No single provision, viewed in isolation, will be given

controlling effect. Id.

      The construction of an unambiguous contract is a question of law we review

de novo. Kachina Pipeline Co. v. Lillis, 59 Tex. Sup. Ct. J. 23, 2015 WL 5889109,

at *3 (Tex. Oct. 9, 2015) (citing Tawes v. Barnes, 340 S.W.3d 419, 425 (Tex. 2011)).

When the written agreement is ambiguous, however, the parties’ intent becomes a

fact issue. Id. (citing Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am.,

341 S.W.3d 323, 333 (Tex. 2011)). Whether a contract is ambiguous is itself a

question of law for the court. Id. (citing Dynegy Midstream Servs., Ltd. P’ship v.

Apache Corp., 294 S.W.3d 164, 168 (Tex. 2009)); see Milner v. Milner, 361 S.W.3d
615, 619, 622 (Tex. 2012) (determining issue of ambiguity of provision in mediated

                                          5
settlement agreement under Family Code section 6.602(b) where parties offered

conflicting interpretations but did not contend that agreement was ambiguous).

      A contract is not ambiguous if it can be given a definite or certain meaning.

Coker, 650 S.W.2d at 394; Bishop v. Bishop, 74 S.W.3d 877, 880 (Tex. App.—San

Antonio 2002, no pet.). Ambiguity does not exist simply because the parties

disagree over its meaning. Dynegy Midstream Servs., 294 S.W.3d at 168; see Kelley

Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998) (holding

that mere conflicting expectations or disputes are not enough to create ambiguity);

see also Consol. Petroleum Partners I, LLC v. Tindle, 168 S.W.3d 894, 898–99 (Tex.

App.—Tyler 2005, no pet.) (observing that courts cannot change contract simply

because one party comes to dislike provisions or assigns different meaning to them).

“An ambiguity exists only if the contract language is susceptible to two or more

reasonable interpretations.” Am. Mfrs. Mut. Ins. v. Schaefer, 124 S.W.3d 154, 157

(Tex. 2003).

      C.       Analysis

      The parties dispute whether the agreement requires Kevin to make periodic

alimony payments to Shawn until January 1, 2014, or alternatively, until one of their

deaths. Because the interpretation of the agreement is a legal question, we first

consider whether their conflicting interpretations demonstrate that the contract is

ambiguous.

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Article 3 of the AID provides:

                                  Article 3.
                                  Alimony

3.1      Purpose and Intent of Article
It is the mutual desire of the parties to provide a continuing measure of support
for [Shawn], Receiving Party, after divorce. These support payments
undertaken by [Kevin], Paying Party, are intended to qualify as contractual
alimony, as that term is defined in section 71(a) of the Internal Revenue Code
. . . . All provisions of this article will be interpreted in a manner consistent
with that intention.
3.2      Terms, Conditions, and Contingencies
      Amount – [Kevin] will pay to [Shawn] $2,500.00 per month as
      alimony. These payments will be payable on the 1st day [of the]
      month, beginning with the first payment on April 1, 2001.
      In addition, [Kevin] will pay or provide directly to [Shawn] the
      following as additional alimony:
         A. Ten percent (10%) of the gross amount of any bonuses paid
            to [Kevin] from his employment with the automobile
            dealership . . . ., so long as [Shawn] has not remarried or is
            not cohabitating with any adult of the opposite sex as that
            term is commonly determined by Texas law or statute.

         B. During the next fourteen years, every two years, the cost of a
            new Cadillac Escalade from a franchise in which [Kevin] has
            an ownership interest, beginning with the first new vehicle
            provided April 1, 2001. . . .
         The automobile will be in the name of [Shawn].
         Upon [son]’s graduation from high school, [Kevin] shall provide
         a current model Escalade . . . at the time of [son]’s graduation . .
         ..

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             [Shawn] agrees that she will allow Kevin the use of the vehicle
             as a trade-in on subsequent new vehicles. . . .
             Term – Unless stated otherwise herein, the payments and
             obligations will end on January 1, 2014, with the last payment
             being due on January 1, 2014, providing all payments have been
             made.
          Death of Receiving Party – [providing that alimony payment
          obligation terminates upon Shawn’s death]
          Death of Paying Party – [providing that alimony payment obligation
          terminates upon Kevin’s death]
          Insurance – [providing for Shawn to remain a beneficiary on
          Kevin’s life insurance policy]
          Payment Procedures – [detailing procedures for transfer of the
          alimony payments from Kevin to Shawn].
                                          ***
(Emphasis added).

      The remaining provisions of Article 3 address the intended federal tax impact

of “all alimony payments made under this article” (section 3.3); indemnification for

any tax liability on the paying party as a result of the payments (section 3.4);

nontransferability (section 3.5); and acceleration of payments due if the paying party

defaults in making a “periodic alimony payment” for a period of more than 60 days

(section 3.6).

      The “Term” paragraph is indented like the immediately preceding paragraphs

addressing “additional alimony,” but, in contrast to those paragraphs, it has a

                                          8
heading like the immediately subsequent paragraphs addressing termination of the

entire alimony obligation and other matters.

      The question before us is whether—as Kevin contends and the trial court

impliedly concluded—the “Term” paragraph modifies only the “additional alimony”

in Section B of Article 3.2 or both Section A and Section B. Kevin contends that

the “Term” provision does not apply to Section A and that this construction results

in the agreement requiring him to make alimony payments for his lifetime. He

further argues that such a provision is unenforceable under Texas law; thus, he did

not breach the AID when he discontinued making alimony payments in 2010. He

points out that the “Term” provision is indented in the same manner as the provisions

requiring additional alimony in Section B.

      In contrast, Shawn contends that the “Term” paragraph applies to both the

alimony payments and the additional alimony provisions in Sections A and B, which

ended Kevin’s contractual alimony payments on January 1, 2014; thus, the

agreement was enforceable and Kevin breached it when he stopped making the

alimony payments.

      The express language of the contract supports the latter contention: “Term”

applies to both the alimony payments and the additional alimony obligations. First,

the term provision is not limited to additional alimony, nor does it specifically refer

to some, but not all, “payments and obligations.” Second, Article 3 uses the term

                                          9
“payments” consistently in context to mean the periodic contractual alimony

payments. This use of “payments” appears approximately 20 times throughout

Article 3.

      In harmony with this context, the “Term” paragraph refers to both “the

payments and obligations.” The immediately preceding paragraphs in Section B,

which address additional alimony, do not use the term “payments.” Because Section

B lacks any reference to “payments,” “obligations” as used in the “Term” paragraph

reasonably refers to those additional alimony obligations. If we were to construe the

“Term” paragraph as applying only to the additional alimony, “payments” as used

in “payments and obligations” would be rendered meaningless. The document’s

language admits of only one reasonable interpretation, its inconsistency in

indentation notwithstanding.

      The parties’ undisputed evidence, including the AID’s unambiguous “Term”

provision, proves as a matter of law that Shawn was entitled to receive the periodic

contractual alimony payments until January 1, 2014. We therefore hold that the trial

court erred in entering a take-nothing judgment against Shawn’s claim for breach of

the AID.

      Even if Kevin’s construction were the correct one, his further contention that

the provision is unenforceable as a matter of public policy because it requires him to

pay indefinite, “permanent” alimony is without merit. Although public policy limits

                                         10
a court’s authority to award alimony, Texas policies favoring freedom of contract

and promoting the settlement of disputes allow divorcing parties to agree to support

payments to a former spouse for any length of time, whether or not the obligation

terminates on a date certain. Allen v. Allen, 717 S.W.2d 311, 313 (Tex. 1986) (“A

marital property agreement, although incorporated into a final divorce decree, is

treated as a contract and its legal force and meaning are governed by the law of

contracts, not the law of judgments.”); Francis v. Francis, 412 S.W.2d 29, 33 (Tex.

1967) (providing that if parties agree that husband will pay support to wife after

divorce is granted, court’s approval of agreement does not invalidate it as alimony);

see also Gym-NI Playgrounds, Inc. v. Snider, 220 S.W.3d 905, 912 (allowing waiver

of implied warranty of suitability based on public policy requirement that parties

“have the utmost liberty of contracting”) (quoting BMG Direct Mktg., Inc. v. Peake,

178 S.W.3d 763, 767 (Tex. 2005)). “[I]t has long been held that such [contractual]

alimony agreements and other marital property agreements, even when incorporated

into divorce decrees, are enforceable as contracts and governed by contract law.”

McCullough v. McCullough, 212 S.W.3d 638, 642–43 (Tex. App.—Austin 2006, no

pet.); see Key v. Key, 307 S.W.3d 812, 814 (Tex. App.—Dallas 2010, no pet.)

(declaring that “Chapter 8[’s spousal maintenance provisions] do[] not apply to an

alimony provision in a divorce decree that restates a parties’ contractual agreement

for alimony.”); see also Bruni v. Bruni, 924 S.W.2d 366, 368 (Tex. 1996) (holding

                                         11
that parties’ agreement that former husband would provide child support until each

child reached age of 21, which was incorporated into divorce decree, was, as matter

of law, enforceable in contract) Hurley v. Hurley, 960 S.W.3d 287, 288 (Tex. App.—

Houston [1st Dist.] 1997, no pet.) (explaining that parties’ consent to property

settlement made decree enforceable as contract, “even if it divests appellant of his

separate property”).

                                  CONCLUSION

      We reverse the trial court’s judgment and remand the case to the trial court

for further proceedings consistent with this opinion. Given our resolution of the first

issue on appeal, we need not address the second one. We deny all pending motions

as moot.

                                               Jane Bland
                                               Justice

Panel consists of Justices Jennings, Keyes, and Bland.

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