Kelli McDonald Sydow v. Michael David Sydow ( 2015 )

Opinion issued April 7, 2015
In The
Court of Appeals
For The
First District of Texas
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NO. 01-13-00511-CV
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KELLI MCDONALD SYDOW, Appellant
V.
MICHAEL DAVID SYDOW, Appellee
On Appeal from the 308th District Court
Harris County, Texas
Trial Court Case No. 2010-02710
MEMORANDUM OPINION
Kelli McDonald Sydow is appealing the trial court’s order granting Michael
David Sydow’s motion to clarify the couple’s final divorce decree. In three issues,
Kelli 1 argues that the trial court abused its discretion and exceeded its authority
1
For the sake of clarity, we will refer to the parties by their given names.
because, instead of clarifying the divorce decree, the trial court impermissibly
changed the substantive division of the parties’ marital estate and reallocated
significant marital property liabilities.
We declare the trial court’s order of clarification void and dismiss the appeal
for want of jurisdiction.
Background
Michael and Kelli owned and resided in Unit 1103 at the Houstonian Estates
during most of their marriage. In 2008, MJOE Lending Investments, Inc.
purchased another condominium unit in the same building—Unit 904. MJOE is a
single investment real estate company organized by Michael’s law firm on behalf
of one of the firm’s clients.
Michael testified that in July or August 2008 he made a verbal agreement
with MJOE to rent the unit to Michael and his family. Under the terms of that
agreement, Michael and his family “could live in Unit 904, so long as, [they] paid
the taxes, insurance, homeowners’ association fees and expenses associated with
Unit 904, and agree[d] to maintain Unit 904 in good repair and condition, and to
vacate Unit 904 upon request.” Kelli was not present during any of the
conversations leading up to this informal agreement and testified that she
mistakenly believed that she and Michael were the owners of Unit 904.
2
Michael, Kelli, and their ten-year-old son moved into Unit 904 in the fall of
2008. Michael and Kelli separated in July 2009, and Michael moved back to the
family’s prior residence, Unit 1103. Kelli remained in Unit 904 and the couple’s
son split his time between both units. Michael filed a petition for divorce in
January 2010.
After a series of hearings in February, March, and April 2010, the trial court
entered temporary orders on April 20, 2010 (the Temporary Orders). The
Temporary Orders named Michael and Kelli as temporary joint managing
conservators, set the Houstonian as their son’s primary residence, and ordered that
neither parent could change the child’s primary residence without further order of
the court or the written agreement of the parties.2 The court also awarded
temporary use and possession of Unit 904 to Kelli, temporary use and possession
of Unit 1103 to Michael, and required Michael to pay certain expenses associated
with both units, including the Unit 904 property taxes, homeowners’ insurance,
utilities, and maintenance fees, which totaled over $4,500 per month (the 904
Expenses).3 At the time the Temporary Orders were entered, Kelli had been a
2
Kelli testified that she had advised the court that she wanted to move out of the
Houstonian in order to be closer to her son’s extracurricular activities in Tomball,
Texas. Michael, however, objected and requested that the trial court set their son’s
residence at the Houstonian.
3
Specifically, the Temporary Orders required Michael to pay the following monthly
expenses for Unit 904: $2,057.00 (property taxes), $2,070.00 (maintenance fees),
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stay-at-home mom for the previous fifteen years and did not have the income to
pay for the 904 Expenses during the pendency of the divorce.
At some point in 2010, Michael stopped paying the 904 Expenses, as the
Temporary Orders required. After being notified that the taxes for Unit 904 had not
been paid, Kelli became concerned about a possible tax foreclosure and filed a
petition for enforcement on September 20, 2010, asking the court to compel
Michael to pay the outstanding property taxes. 4 On September 28, 2010, the
purported owner of Unit 904 notified Kelli that it was planning to sell the unit and
demanded that she vacate the property within thirty days. 5 Kelli, who testified that
she believed that she and Michael owned the property, did not comply, and Kelli
and her son were evicted from Unit 904 on March 4, 2011.6
On April 5, 2011, Kelli and Michael entered into a binding mediated
settlement agreement (the MSA). By its express terms, the MSA provided:
and $131.13 (homeowners’ insurance). Michael was also required to pay up to
$400.00 per month in utilities for the unit.
4
Michael testified that he paid the property taxes for Unit 904 until September
2010.
5
MJOE executed a deed transferring ownership of Unit 904 to Greenwich Real
Estate Corp. (GREC) on September 24, 2010. Both GREC and MJOE are owned
or controlled by Michael’s client, Marcelo Heredia Montalvo.
6
The record reflects that the owner of Unit 904 later sued Kelli for rent and other
expenses under a breach of contract theory in a related case pending before
another trial court. The trial court in that case held that Kelli was not liable for any
past due 904 Expenses based on breach of contract because there was no contract
between Kelli and the owner of 904.
4
The undersigned parties, [Kelli] and [Michael], agree to compromise
the claims and controversies currently at issue in the pending action
. . . . As to the property issues, the parties agree and stipulate that they
have taken into consideration all claims that one could or should have
made, including but not limited to debts of either party,
characterization of marital and separate property, valuation of
property, tax effects of all property division, and all pending claims
and motions which were disputed prior to this settlement. The parties
each acknowledge that to the best of their knowledge both parties
have made to the other a full and fair disclosure of all known debts
and assets and are entering into this agreement freely and voluntarily
. . . . The provisions of this agreement shall be effective immediately
as a contract, shall supersede any temporary orders or other
agreements of the parties with respect to the subject matter hereof.
Schedules attached to the MSA and incorporated by reference identified
specific debts and expressly allocated those between Michael and Kelli as part of
the overall property division. Existing or outstanding obligations regarding Unit
904 were not among those debts expressly identified in the schedules. The MSA
further provided that any and all “undisclosed” and “undivided” community
liabilities would be paid by the party incurring the liability and further provided
that “[a]ll debts and/or liabilities in the name of Michael Sydow or incurred solely
by Michael Sydow not divided herein” would be paid by Michael, and “[a]ll debts
and/or liabilities in the name of Kelli Sydow or incurred solely by Kelli Sydow not
divided herein” would be paid by Kelli.
The trial court rendered judgment on May 10, 2011, and a final divorce
decree was signed on September 9, 2011 (the Final Decree). Paragraph HD-2 of
the Final Decree required Michael to pay “[a]ll debts, charges, liabilities, and other
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obligations incurred by [Michael] during the marriage, unless express provision is
made in this Decree to the contrary.” Similarly, paragraph WD-2 of the Final
Decree required Kelli to pay “[a]ll debts, charges, liabilities, and other obligations
incurred by [Kelli] during the marriage, unless express provision is made in this
Decree to the contrary.” In accordance with the terms of the MSA, the Final
Decree also assigned unexpressed, undivided, and undisclosed community
liabilities to the party incurring them. 7 Like the MSA, the Final Decree did not
expressly refer to the 904 Expenses. The Final Decree also stated that the parties
“are discharged from all further liabilities and obligations imposed by the
temporary orders of this Court.”
On March 1, 2013, Michael filed a Petition for Enforcement, Motion for
Clarification and in the Alternative Post Divorce Division of Debt (the Petition to
Clarify), asking the court to compel Kelli to pay any outstanding 904 Expenses,
pursuant to the Final Decree. 8 After a hearing on the matter, the trial court granted
Michael’s petition and clarified the Final Decree to award “all liability of either
7
“Undivided Assets and Liabilities . . . . IT IS FURTHER ORDERED AND
DECREED, as a part of the division of the estate of the parties, that any
community liability not expressly assumed by a party under this Decree is to be
paid by the party incurring the liability, and the party incurring the liability shall
indemnify and hold the other party and his or her property harmless from any
failure to so discharge the liability.”
8
Michael also asked the court to enter an order clarifying that Kelli was responsible
for these liabilities, in the event the court found that the part of the decree Michael
was asking the court to enforce was not specific enough to be enforced by
contempt.
6
party for taxes, maintenance fees and condominium association dues, and
insurance related to Unit or Apartment 904 at the Houstonian Estates
condominiums which liability accrued, became due, or shall hereafter accrue or
become due for the period from August 1, 2009 to March 4, 2011” to Kelli, based
in part on its finding that Kelli had “exclusive use and possession of Unit 904 from
August 1, 2009 to March 4, 2011,” and the court’s conclusion that “[t]he Final
Decree supersedes all liabilities and obligations imposed upon either party by the
Temporary Orders.” On July 31, 2013, the trial court entered findings of fact and
conclusions of law.
Standard of Review and Applicable Law
The court that rendered the divorce decree retains continuing subject matter
jurisdiction to enforce and to clarify the decree’s property division pursuant to
specific provisions of the Family Code after the court’s plenary power expires. See
Gainous v. Gainous, 219 S.W.3d 97, 106, 108 (Tex. App.—Houston [1st Dist.]
2006, pet. denied). In particular, a court has continuing jurisdiction to render
further orders to enforce the division of the property made in the decree of divorce
to assist in the implementation of or to clarify the prior order. See TEX. FAM. CODE
ANN. § 9.006(a) (West Supp. 2014); Gainous, 219 S.W.3d at 106. Similarly, on
the request of a party or on the court’s own motion, the court may enter a clarifying
order setting forth specific terms to enforce compliance with an original division of
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property on a finding that the original division of property is not specific enough to
be enforceable by contempt. See TEX. FAM. CODE ANN. § 9.008 (West 2006);
Gainous, 219 S.W.3d at 106.
However, there are limitations on the enforcement and clarification powers
of the court that rendered the divorce decree. Gainous, 219 S.W.3d at 106. A court
may not amend, modify, alter, or change the division of property made or approved
in the divorce decree after its plenary power expires. See TEX. FAM. CODE ANN.
§ 9.007(a) (West 2006); Shanks v. Treadway, 110 S.W.3d 444, 449 (Tex. 2003).
An order that amends, modifies, alters, or changes the divorce decree’s property
division is beyond the power of the court. See TEX. FAM. CODE ANN. § 9.007(b)
(West 2006); Gainous, 219 S.W.3d at 106–07. Accordingly, section 9.007 of the
Texas Family Code is jurisdictional and orders violating its restrictions are void.
Gainous, 219 S.W.3d at 108.
We review a trial court’s order on a motion for enforcement or clarification
of a final decree of divorce under an abuse of discretion standard. Id. at 103. A trial
court abuses its discretion when it (1) acts unreasonably, arbitrarily, or without
reference to any guiding rules or principles or (2) erroneously exercises its power
by making a choice outside the range of choices permitted the court by law. See
Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985);
Murray v. Murray, 276 S.W.3d 138, 143 (Tex. App.—Fort Worth 2008, pet.
8
dism’d). “A trial court abuses its discretion as to legal issues when it fails to
analyze or apply the law correctly.” In re D.S., 76 S.W.3d 512, 516 (Tex. App.—
Houston [14th Dist.] 2002, no pet.). The trial court’s conclusions of law are
reviewed de novo. Busch v. Hudson & Keyse, LLC, 312 S.W.3d 294, 299 (Tex.
App.—Houston [14th Dist.] 2010, no pet.).
We interpret the language of a divorce decree as we do other judgments of
courts. Hagen v. Hagen, 282 S.W.3d 899, 901 (Tex. 2009) (citing Shanks, 110
S.W.3d at 447). We construe the decree as a whole to harmonize and give effect to
the entire decree. Id.; see Constance v. Constance, 544 S.W.2d 659, 660 (Tex.
1976). If the decree is unambiguous, the appellate court must adhere to the literal
language used. Hagen, 282 S.W.3d at 901. If the decree is ambiguous, it is
interpreted by reviewing both the decree as a whole and the record. Id. Whether a
divorce decree is ambiguous is a question of law. Id. at 901–02.
Discussion
In three issues, Kelli argues that (1) the trial court abused its discretion and
exceeded its authority when it issued the May 2013 order because, instead of
clarifying the divorce decree, the trial court impermissibly changed the substantive
division of the parties’ marital estate as set forth in the decree and reallocated
significant marital property liabilities in violation of Family Code section 9.007;
(2) the trial court erred in clarifying the Final Decree to provide that the 904
9
Expenses were incurred by Kelli and are her sole obligation; and (3) the trial court
abused its discretion when it reallocated marital property liabilities without
reference to the factors outlined by the Texas Supreme Court in Murff v. Murff,
615 S.W.2d 696, 699 (Tex. 1981).
A. Did the May 2013 order alter the substantive division of the parties’
marital estate as set forth in the Final Decree?
Kelli argues that Michael incurred the 904 Expenses during their marriage
pursuant to the terms of the Temporary Orders and, therefore, the Final Decree
allocated those liabilities to Michael. Kelli further contends that the trial court’s
May 2013 order altered the substantive division of the parties’ marital estate by
reallocating those substantial expenses to her.
1. Impact of the Temporary Orders
It is undisputed that the Temporary Orders required Michael to pay the 904
Expenses. The parties disagree about the relevancy of the Temporary Orders to the
question of which spouse is liable to the other for the 904 Expenses.
Michael argues that the Temporary Orders are irrelevant with respect to
which party incurred the 904 Expenses because the Temporary Orders were
superseded by the MSA in April 2011 and, thus, they were of no force and effect
when the Final Decree was entered in September 2011. Specifically, Michael
argues that the MSA modified and/or released him from any prior obligations
imposed by the Temporary Orders based upon the following language: “The
10
provisions of this [MSA] shall be effective immediately as a contract, shall
supersede any temporary orders or other agreements of the parties with respect to
the subject matter hereof.” Michael argues that the trial court merely construed the
Final Decree and clarified it to reflect that the Temporary Orders had been
superseded by the MSA and, therefore, were longer of any force or effect.
Kelli contends that the MSA only relieved the parties of any future
obligations imposed by the Temporary Orders; it did not relieve the parties of their
past obligations that had already accrued. Kelli further argues that because there
was no order relieving Michael of his prior obligations imposed by the Temporary
Orders despite his specific attempts to obtain such relief, 9 the 904 Expenses were
obligations incurred by Michael pursuant to the terms of the Temporary Orders and
the MSA when the Final Decree was entered.
The term “supersede,” which is not defined in the MSA, is commonly
understood to mean “to replace,” “to cause to be set aside,” or “to take the place
of.” See www.merriam-webster.com/dictionary/supersede; see also Milner v.
Milner, 361 S.W.3d 615, 618–19, 627 (Tex. 2012) (holding MSAs are subject to
usual rules of contract interpretation and stating that undefined contract terms are
given their plain, ordinary, and generally accepted meaning). Based on the plain
9
Michael filed three motions to modify the Temporary Orders beginning in
September 2010 in which he asked the court to terminate his obligation to pay 904
Expenses, but none of these motions were ever ruled upon.
11
meaning of the term supersede, it is apparent that the parties agreed that the MSA
replaced or took the place of the Temporary Orders as of the MSA’s effective date,
thereby terminating any future or continuing obligations imposed by the
Temporary Orders. See Milner, 361 S.W.3d at 619 (stating that construction is
matter for court when agreement can be given certain and definite meaning). The
MSA, the terms of which were subsequently incorporated into the Final Decree,
did not explicitly set aside or nullify any prior obligations imposed by the
Temporary Orders that had already accrued. Case law holds that a final divorce
decree “supersedes” temporary orders, but does not extinguish liabilities that have
already accrued thereunder. See Pettus v. Pettus, 237 S.W.3d 405, 416 (Tex.
App.—Fort Worth 2007, pet. denied) (noting that “the rendition of a divorce
decree does not itself nullify any temporary order” and that obligation fixed by
temporary order continues after divorce decree unless specifically modified by
decree); Ex parte Shaver, 597 S.W.2d 498, 500 (Tex. App.—Dallas 1980, no writ)
(holding that final divorce decree did not nullify temporary order with respect to
past due payments; rather, it superseded temporary order with respect to future
support).
More importantly, this interpretation is also consistent with the plain
language of the Final Decree, which the parties agreed would be based on the
terms of the MSA. The Final Decree states that the parties “are discharged from
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all further liabilities and obligations imposed by the temporary orders of this
Court.” Notably, the Final Decree does not discharge the parties from any
previously accrued liabilities and obligations imposed by the Temporary Orders,
only future liabilities and obligations.
Accordingly, we hold that neither the Final Decree nor the MSA altered or
discharged Michael’s obligations to pay the 904 Expenses that had already accrued
pursuant to the Temporary Orders. Based on the plain language of the Final
Decree, we further hold that the trial court erred by concluding that “[t]he Final
Decree supersedes any and all liabilities and obligations imposed upon either party by
the Temporary Orders.” See Busch, 312 S.W.3d at 299 (reviewing conclusions of
law de novo); see also Hagen, 282 S.W.3d at 901 (stating courts must adhere to
literal language used in unambiguous divorce decree).
The Temporary Orders provided that Michael was the spouse legally
obligated to pay for 904 Expenses, as between Michael and Kelli. Having
concluded that the MSA did not relieve Michael of his past obligations under the
Temporary Orders, we hold that at the time the parties entered the MSA and the
court entered the Final Decree, the 904 Expenses were obligations incurred by
Michael pursuant to the terms of the Temporary Orders. By shifting those
liabilities to Kelli, the court erroneously modified the division of property made or
approved in the divorce decree after its plenary power expired in violation of
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Family Code section 9.007. See TEX. FAM. CODE ANN. § 9.007(a); Shanks, 110
S.W.3d at 449. Accordingly, the trial court’s May 2013 order purporting to clarify
the Final Decree is void. Gainous, 219 S.W.3d at 108.
Conclusion
We declare the trial court’s order of clarification void and dismiss the appeal
for want of jurisdiction. See State ex rel. Latty v. Owens, 907 S.W.2d 484, 486
(Tex. 1995); Moore Landry, L.L.P. v. Hirsch & Westheimer, P.C., 126 S.W.3d
536, 543 (Tex. App.—Houston [1st Dist.] 2003, no pet.).
Russell Lloyd
Justice
Panel consists of Chief Justice Radack and Justices Brown and Lloyd.
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