Court Opinion

ID: 4493491
Source: CourtListenerOpinion
Date Created: 2020-01-18 07:09:38.025394+00
Date Added: 2024-06-11T08:48:34.179791
License: Public Domain

In the
        Court of Appeals
Second Appellate District of Texas
         at Fort Worth
      ___________________________
           No. 02-19-00249-CV
      ___________________________

 MATTHEW SHANE WAGNER, Appellant

                     V.

     LORETTA GALE DAVIS, Appellee

   On Appeal from the 367th District Court
           Denton County, Texas
       Trial Court No. 14-03101-367

  Before Sudderth, C.J.; Gabriel and Kerr, JJ.
Memorandum Opinion by Chief Justice Sudderth
                           MEMORANDUM OPINION

                                    I. Introduction

       In a single issue, Appellant Matthew Shane Wagner appeals the trial court’s

order granting the motion to clarify filed by his ex-wife, Appellee Loretta Gale Davis,

regarding the parties’ divorce decree. We reverse.

                      II. Factual and Procedural Background

       The parties married in 2010, bought a home together two years later, and made

upgrades to the home. After they refinanced the home’s mortgage in 2014, which

resulted in an outstanding debt of $232,000, Davis filed for divorce pro se.

       The parties’ July 24, 2015 agreed final decree of divorce awarded to Davis as

her “sole and separate property,” from which Wagner was “divested of all right, title,

interest, and claim in and to,” among other things,

       [a]n undivided interest in the following real property [the parties’ home],
       subject to the owelty lien granted to [Wagner] for fifty percent (50%) of
       the equity in such real property, including but not limited to any escrow
       funds, prepaid insurance, utility deposits, keys, house plans, warranties
       and service contracts, and title and closing documents.

Wagner was awarded as his sole and separate property, from which Davis was

“divested of all right, title, interest, and claim in and to,” among other things, “[f]ifty

percent (50%) the proceeds from selling the residence . . ., for the value of [Wagner’s]

interest in the equity in such residence.”

       In the decree, Davis was ordered to pay, as part of the division of the parties’

marital estate,
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      the following debts and obligations and indemnify and hold [Wagner]
      and his property harmless from any failure to timely pay such
      indebtedness:

      ....

      3. Any and all debts associated with and/or secured by any real . . .
      property awarded to [her] . . . , specifically including the loan associated
      with the house . . . awarded to [her] herein;

      ....

      6. Fifty percent (50%) of the equity in the parties[’] homestead as of the
      date of the sale of the homestead.

      The decree also included a section labeled “Owelty of Partition,” in which the

trial court noted that having awarded the parties’ homestead to Davis, “it is necessary

to impose an encumbrance for owelty of partition against the entirety of the property

to secure the payment of the debt resulting from the award.” The decree required

Davis to sign a deed of trust to secure payment of the debt, stated that the

encumbrance’s purpose was “to secure the payment of the debt of [Davis] in favor of

[Wagner] of fifty percent of the equity in the homestead, resulting from the award of

the homestead in this divorce proceeding,” and stated that the debt was “part of the

division of community property between the parties” and not to be construed as any

form of spousal support, alimony, or child support.

      Three-and-a-half years after the divorce, Davis moved to clarify the divorce

decree, complaining that the decree had “failed to clearly define and dispose of the

parties’ marital interest” in the house. She asked the trial court to clarify the parties’

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obligations regarding the property. Both parties were represented by counsel at the

May 2, 2019 hearing on Davis’s motion.

      At the hearing, Davis’s counsel argued that the trial court had jurisdiction to

clarify the decree, that there was an ambiguity in the decree, that Wagner’s counsel

had drafted decree, and that Wagner’s community share should be valued as of the

date of divorce since all of the home’s mortgage debt thereafter had been paid with

Davis’s separate property funds.

      Wagner’s counsel responded that the trial court lacked jurisdiction to modify

the decree because plenary power had expired and because the property was clearly

addressed and divided in the decree. He argued that because Wagner had been

awarded a right to 50% of the home’s equity, his separate property share post-divorce

had also been growing as the home’s equity grew. And he informed the trial court

that both parties had proceeded pro se in the divorce but that Wagner had come to

his office at the end of the divorce to ask him to draw up the parties’ agreement.

      The trial court heard testimony from the parties about the home’s value at the

time of the divorce and admitted into evidence the decree, the special warranty deed

with an encumbrance for owelty, the deed of trust that secured the owelty, and the

home’s 2015 tax appraisal. At the hearing’s conclusion, the trial court summarized the

parties’ positions as Wagner’s wanting half of the equity as of the date of the sale and

Davis’s wanting half of the equity as of the date of divorce payable at the time of sale.

      The trial court granted Davis’s motion, stating in its June 5, 2019 order,
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       The Court finds that certain terms of the prior order are not specific
       enough and should be clarified. The Court further finds that the Court
       has jurisdiction to make such clarification.

             IT IS ORDERED that the Agreed Final Decree of Divorce
       entered by this Court on July 24, 2015, is clarified as follows:

              The division of property set forth in that decree divided the
       parties’ marital estate as of the date of that order, July 24, 2015, and as a
       result [of] the fifty percent (50%) of the equity in the real property . . .
       awarded to [Wagner] in that decree was and is fifty percent (50%) of the
       community value of the Property on the date of the prior order, July 24,
       2015.

              The Court further finds that the community value of the Property
       on July 24, 2015, was $22,579.00, making [Wagner’s] fifty percent equity
       interest in that property on July 24, 2015, the amount of $11,298.50,
       which amount is due and payable by [Davis] to [Wagner] as of the date
       of the sale of the homestead.

                                    III. Discussion

       In his single issue, Wagner argues that the decree’s plain language “clearly

awarded [him] fifty percent of the equity in the parties’ Property as of the date of its

sale,” and that the trial court accordingly abused its discretion in its clarification order

because the order substantively altered the decree’s distribution. We agree.

       We review a trial court’s order on a motion for clarification of a divorce decree

for an abuse of discretion,1 but whether a divorce decree is ambiguous is a question of

       1
        Generally, a trial court abuses its discretion if it acts without reference to any
guiding rules or principles. Low v. Henry, 221 S.W.3d 609, 614 (Tex. 2007); Cire v.
Cummings, 134 S.W.3d 835, 838–39 (Tex. 2004). That is, it abuses its discretion if it
fails to analyze the law correctly or misapplies the law to established facts, In re
Dawson, 550 S.W.3d 625, 628 (Tex. 2018) (orig. proceeding) (per curiam); Iliff v. Iliff,
339 S.W.3d 74, 78 (Tex. 2011), or if its decision is so arbitrary and unreasonable that it
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law that we review de novo. Murray v. Murray, 276 S.W.3d 138, 143–45 (Tex. App.—

Fort Worth 2008, pet. dism’d). Under the Family Code, a court that renders a divorce

decree retains continuing subject matter jurisdiction to clarify and enforce the decree’s

property division, including clarification to correct an ambiguity so that the parties to

the decree are able to comply with its terms. Id. at 144 (citing Tex. Fam. Code Ann.

§§ 9.002, .006, .008; Shanks v. Treadway, 110 S.W.3d 444, 447 (Tex. 2003)). The trial

court may also render further orders to assist in the implementation of its prior order.

See Tex. Fam. Code Ann. § 9.006(a) (stating that, subject to exceptions, the trial court

may render further orders to enforce the decree’s property division “to assist in the

implementation of or to clarify the prior order”), § 9.008(b) (“On a finding by the

court that the original form of the division of property is not specific enough to be

enforceable by contempt, the court may render a clarifying order setting forth specific

terms to enforce compliance with the original division of property.”).

      However, the trial court may not “amend, modify, alter, or change the division

of property made or approved in the decree,” and any order that does so, changing

the actual, substantive division of property, “is beyond the power of the divorce court

and is unenforceable.” Id. § 9.007(a)–(b); Murray, 276 S.W.3d at 144 (citing Shanks,
110 S.W.3d at 449, for the proposition that a clarification order cannot be used to

amounts to a clear and prejudicial error of law. In re Olshan Found. Repair Co., 328
S.W.3d 883, 888 (Tex. 2010) (orig. proceeding).

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make a substantive change in the divorce decree after it becomes final even if the

decree contains a substantive legal error).

       Agreed judgments like the one before us are interpreted in accordance with

contract law; we construe divorce decrees as a whole to harmonize and give effect to

the entire decree. See Murray, 276 S.W.3d at 144 (referencing Shanks, 110 S.W.3d at

447); see also Hagen v. Hagen, 282 S.W.3d 899, 901 (Tex. 2009).2 If, after reading the

decree as a whole, the terms are unambiguous, we must effectuate the order in light of

the actual language used. Murray, 276 S.W.3d at 144; see Reiss v. Reiss, 118 S.W.3d 439,

441–42 (Tex. 2003) (“[W]hen the language of the decree is unambiguous, as it is here,

we interpret the judgment literally.”);3 Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983)

       2
         In Hagen, the court construed a decree that awarded to the ex-wife “One-half
of 18/20ths of all Army Retirement Pay or Military Retirement Pay, if, as and when
received” by the ex-husband. 282 S.W.3d at 900–02. After the ex-husband retired, he
opted to be paid VA disability benefit payments in lieu of part of his military
retirement payments, which reduced his amount of military retirement pay. Id. at 900.
The court held that the literal language employed in the decree was unambiguous, did
not specify division of gross military pay, and did not specify a division of VA
disability benefits. Id. at 906. It concluded that the trial court did not err by clarifying
that the unambiguous decree did not divide VA disability pay and affirmed the trial
court’s judgment. Id. at 900, 907.
       3
         In Reiss, the court construed a decree that specifically recited that the ex-wife
would receive “fifty percent (50%) of such retirement or pension benefit to which [ex-
husband] is entitled to receive,” unequivocally awarding to her half of his total
retirement benefits under the retirement plan regardless of whether they accrued
during or after marriage. 118 S.W.3d at 442. While the trial court mistakenly
classified all of the benefits under the plan as community property, and the effect of
the decree was to divest the ex-husband of some of his separate property, because the
decree’s language was not ambiguous and because the ex-husband had not appealed
the decree, the supreme court affirmed the trial court’s judgment. Id. at 441–43; see
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(stating that if a written instrument is so worded that it can be given a certain or

definite legal meaning or interpretation, it is not ambiguous and the court will

construe it as a matter of law). Only when a contract is first determined to be

ambiguous may we consider the parties’ interpretations and admit extraneous

evidence to determine the instrument’s true meaning. Nat’l Union Fire Ins. Co. of

Pittsburgh, PA v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995) (op. on reh’g).

      Wagner argues that the fact that the property’s value may have increased since

the divorce does not affect the decree’s plain language, which, he argues, “specifically

and unambiguously calls for [his] equity in the Property to be valued and paid as of

the date of the sale of the homestead.” He contends that the trial court’s order

impermissibly alters the decree’s property distribution by ordering that his equity in

the property is determined on the date of the decree. He further contends that the

remedy for any perceived substantive error was a direct appeal, which neither party

pursued.

      Both parties refer us to Shanks. In Shanks, the supreme court considered a

divorce decree that neither party had appealed and that awarded to the ex-wife

twenty-five percent of the ex-husband’s retirement benefits and provided that her

interest “shall be payable to [her] if, as and when paid by American Airlines . . . as

pension or retirement employee benefits existing because of [ex-husband’s]

also Pearson v. Fillingim, 332 S.W.3d 361, 364 (Tex. 2011) (“A final, unambiguous
divorce decree that disposes of all marital property bars relitigation.”).

                                            8
employment.” 110 S.W.3d at 444–45. The court held that because the decree was

unambiguous—the trial court had awarded to the ex-wife “an interest of all sums

received under such plan, not an interest of presently accrued benefits under such plan

. . . [t]he fact that the plan’s value may have increased since the divorce does not affect

the decree’s plain language, which simply cannot reasonably be construed to award [to

her] an interest only in the plan benefits that had accrued on the date of divorce.” Id.

at 447–48.

      Here, page 3 of the decree expressly provided for Davis to receive an undivided

interest in the home, subject to a lien for fifty percent of the home’s equity, but the

decree is silent at this point on when and how that equity will be calculated. Page 4 of

the decree expressly provides for Wagner to receive fifty percent of the proceeds from

the home’s sale, representing his equity in the house and further explains when (upon

sale) and how (proceeds) the equity in the home is to be valued. Page 5 of the decree

provides that Davis is indebted to Wagner for fifty percent of the equity in the house

“as of the date of the sale of the homestead.” This provision confirms the when and

how set out above—at the time of sale. Finally, on page 6 of the decree, the owelty-

of-partition provision sets out that the lien’s purpose is to secure Davis’s payment to

Wagner of the debt of the fifty percent equity referenced in the decree.

      Whether good or bad, wise or foolhardy, the parties’ agreement sets out

express terms that reflect that Davis bargained away some of her separate property

interest from appreciation payments post-divorce and that Wagner assumed the risk
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that at the time of the home’s ultimate sale, it could have great value or no value at all.

Because their agreement’s express terms addressed the who, what, when, and how of

the partition, the trial court erred by finding ambiguity and rewriting the contract.

Accordingly, we sustain Wagner’s sole issue.

                                    IV. Conclusion

         Having sustained Wagner’s sole issue, we reverse and vacate the trial court’s

order.

                                                       /s/ Bonnie Sudderth
                                                       Bonnie Sudderth
                                                       Chief Justice

Delivered: January 16, 2020

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