James Chafin v. Richard G. Isbell and Fairway Independent Mortgage Corporation ( 2011 )

COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 02-10-00007-CV
JAMES CHAFIN APPELLANT
V.
RICHARD G. ISBELL AND APPELLEES
FAIRWAY INDEPENDENT
MORTGAGE CORPORATION
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FROM THE 367TH DISTRICT COURT OF DENTON COUNTY
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MEMORANDUM OPINION1
ON REHEARING
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Appellees Richard G. Isbell and Fairway Independent Mortgage
Corporation filed a motion for rehearing of our memorandum opinion issued
December 2, 2010. To the extent Appellees argue that this appeal should be
1
See Tex. R. App. P. 47.4.
remanded, we grant their motion for rehearing. We deny the remainder of the
motion.2
On February 10, 2011, Appellant James Chafin filed a ―Motion to Amend
Judgment,‖ which we construe as a motion for rehearing, and a motion to extend
time to file the motion to amend judgment. We deny James‘s motion to extend
time to file the motion to amend.
We withdraw our opinion and judgment dated December 2, 2010, and
substitute the following.
I. INTRODUCTION
The primary issue we address in this appeal concerns the construction of a
divorce decree and whether, as a matter of law, it did or did not divest James of
his interest in certain real property. In two issues, James argues that the trial
court erred by granting summary judgment for Appellees and by denying his
motion for summary judgment. We will reverse and render in part and remand in
part.
II. FACTUAL AND PROCEDURAL BACKGROUND
The trial court signed an ―Agreed Final Decree of Divorce‖ dissolving the
marriage of James and Kristine Rynetta Chafin on July 20, 2004. In dividing the
marital estate, the decree included a disposition of two residences owned by
2
We grant Appellant James Chafin‘s motion to extend time for filing reply
brief to Appellees‘ motion for rehearing.
2
James and Kristin: the ―Jenkins property‖ and the ―Osprey property.‖ The
decree stated the following in regard to the Jenkins property:
IT IS ORDERED AND DECREED that the husband, [James],
is awarded the following as his sole and separate property, and the
wife is divested of all right, title, interest, and claim in and to that
property:
H-1. The following real property, including but not limited to
any escrow funds, prepaid insurance, utility deposits, keys, house
plans, home security access and code, garage door opener,
warranties and service contracts, and title and closing documents:
BEING LOT 62, IN BLOCK 209 OF THE COLONY NO.
24, AN ADDITION TO THE CITY OF THE COLONY,
DENTON COUNTY, TEXAS ACCORDING TO THE
MAP THEREOF RECORDED IN CABINET C, PAGE
200 OF THE MAP RECORDS OF DENTON COUNTY,
TEXAS.
This award to the husband is subject to payment of the sum of
$10,000.00 to [Kristine] upon the sale of the property located at 5916
Osprey Court, The Colony, Texas 75056 for her portion of equity in
this real property, as set forth hereinbelow. [Emphasis added.]
The decree ordered James to pay ―[t]he balance due . . . on the promissory note
executed by [Kristine] and [James] and secured by Deed of Trust on the real
property awarded in this Decree to [James].‖
Concerning the Osprey property, the decree stated the following:
IT IS ORDERED AND DECREED that the wife, [Kristine], is
awarded the following as her sole and separate property, and the
husband is divested of all right, title, interest, and claim in and to that
property:
W-1. The use and benefit of the following real property, until it
is sold as set forth hereinbelow:
BEING LOT 1, BLOCK B, STEWART PENINSULA
SOUTHSHORE PHASE 1, AN ADDITION TO THE
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CITY OF THE COLONY, DENTON COUNTY, TEXAS
ACCORDING TO THE MAP THEREOF RECORDED IN
THE MAP RECORDS OF DENTON COUNTY, TEXAS
[Emphasis added.]
The decree ordered Kristine to pay ―[t]he monthly payments (until the property is
sold) on the promissory note executed by [Kristine] and [James] payable to
Ameriquest Mortgage and secured by deed of trust on the real property located
at 5916 Osprey Court, The Colony, Texas 75056.‖
In addition to dividing the Jenkins property and Osprey property, the
decree included a section entitled ―Provisions Dealing with Sale of Residence,‖
which ordered the sale of the Osprey property pursuant to the following terms
and conditions:
1. The parties shall list the property with a duly licensed real
estate broker having sales experience in the area where the
property is located . . . .
2. The property shall be sold for a price that is mutually
agreeable to [Kristine] and [James]. If [Kristine] and [James] are
unable to agree on a sales price, on the application of either party,
the property shall be sold under terms and conditions determined by
a court-appointed receiver.
3. [Kristine] shall continue to make all payments of principal,
interest, taxes, and insurance on the property during the pendency
of the sale, and [Kristine] shall have the exclusive right to enjoy the
use and possession of the premises until closing. All maintenance
and repairs necessary to keep the property in its present condition
shall be paid one-half by [Kristine] and one-half by [James].
4. The net sales proceeds . . . shall be distributed as follows:
a. [Kristine‘s] one-half shall be distributed outright to
[Kristine].
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b. [James‘s] one-half shall be distributed in the following
order:
i. Payment to [Kristine] in the amount of $10,000.00
for her portion of equity in the [Jenkins property].3
ii. Remaining balance to [James]. [Emphasis
added.]
According to James‘s original petition, William and Ramona Bauerly
purportedly purchased the Osprey property from Kristine in March 2005. James
alleged that ―[a]lthough [he] was an owner of the [Osprey property] at the time of
the sale, he was wrongfully excluded from the closing and his name is not on the
deed to the Bauerlys.‖ Appellees state that ―[i]n connection with the sale of the
Osprey Property to Bauerly, a copy of the agreed divorce decree was recorded in
the Deed Records of Denton County, Texas as evidence that the title to the
Osprey Property was vested in [Kristine].‖ In April 2007, Isbell purchased the
property from the Bauerlys, and Fairway provided the mortgage financing.
In May 2009, James sued Appellees for a declaratory judgment and for a
partition of the Osprey property. He alleged that the divorce decree did not
divest him of his ownership interest and title to the Osprey property but, instead,
merely awarded Kristine the use and benefit of the property until it was sold.
3
The decree erroneously provided that Kristine was entitled to payment of
$10,000 for her equity in the Osprey property instead of the Jenkins property. As
pointed out by James, this was a drafting error because the portion of the decree
awarding James the Jenkins property is expressly conditioned on his payment to
Kristine of $10,000 upon the sale of the Osprey property for her equity in the
Jenkins property and section 4(a) provides that one-half of the net sales
proceeds are to be distributed to Kristine for her half share of the property.
5
James averred that he owned an undivided one-half interest in the Osprey
property; that the Bauerlys could not have acquired a greater interest in the
Osprey property than that owned by Kristine; that the Bauerlys did not acquire his
one-half interest in the Osprey property; that neither Isbell nor Fairway
subsequently acquired interests in the Osprey property as innocent purchasers
without notice; and that Fairway‘s security interest in the Osprey property did not
encumber his undivided one-half interest in the property.4
Appellees filed a motion for summary judgment on James‘s claims for
declaratory relief and for a partition. They argued that there was no genuine fact
issue that James did not have an interest in the Osprey property because the
divorce decree divested him of all right, title, and interest in and to the property.
James responded and filed a counter-motion for summary judgment, arguing that
he was entitled to summary judgment on his declaratory relief and partition
claims because the evidence established as a matter of law that the divorce
decree did not divest him of his interest in the Osprey property and, therefore,
that he remained the owner of an undivided one-half interest in the property. The
trial court granted Appellees‘ motion and denied James‘s motion. This appeal
followed.
III. STANDARD OF REVIEW
In a summary judgment case, the issue on appeal is whether the movant
met the summary judgment burden by establishing that no genuine issue of
4
James alleged in the alternative that the divorce decree was ambiguous.
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material fact exists and that the movant is entitled to judgment as a matter of law.
Tex. R. Civ. P. 166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding,
289 S.W.3d 844, 848 (Tex. 2009). We review a summary judgment de novo,
taking as true all evidence favorable to the nonmovant and indulging every
reasonable inference and resolving any doubts in the nonmovant‘s favor. Mann
Frankfort, 289 S.W.3d at 848; 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex.
2008); Sw. Elec. Power Co. v. Grant, 73 S.W.3d 211, 215 (Tex. 2002). We
consider the evidence presented in the light most favorable to the nonmovant,
crediting evidence favorable to the nonmovant if reasonable jurors could and
disregarding evidence contrary to the nonmovant unless reasonable jurors could
not. Mann Frankfort, 289 S.W.3d at 848. We must consider whether reasonable
and fair-minded jurors could differ in their conclusions in light of all of the
evidence presented. See Wal-Mart Stores, Inc. v. Spates, 186 S.W.3d 566, 568
(Tex. 2006); City of Keller v. Wilson, 168 S.W.3d 802, 822–24 (Tex. 2005).
When both parties move for summary judgment and the trial court grants one
motion and denies the other, the reviewing court should review both parties‘
summary judgment evidence and determine all questions presented. Mann
Frankfort, 289 S.W.3d at 848. The reviewing court should render the judgment
that the trial court should have rendered. Id.
IV. DECLARATORY JUDGMENT
In his first issue, James argues that the trial court erred by granting
Appellees summary judgment and by denying his motion for summary judgment
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on his declaratory judgment claim because the decree did not, as a matter of law,
operate to convey his interest in the Osprey property to Kristine but merely
awarded her the ―use and benefit‖ of the property until it was sold. James
concedes that Kristine would have had the authority to sell the Osprey property
without his participation had the decree divested him of his interest in the
property, but he argues that because the decree, which is unambiguous, did not
divest him of his interest, he remained—and continues to be—a joint owner of
the property. According to James, because he owns an undivided one-half
interest in the Osprey property, Isbell could not have mortgaged more than half of
the property (the half interest that the Bauerlys purchased from Kristine and that
Isbell purchased from the Bauerlys) and the lien asserted by Fairway is
ineffective as to his one-half interest in the property.
Appellees agree that the sole issue on appeal is whether the divorce
decree, which they also agree is unambiguous, divested James of title to the
Osprey property. But unlike James, they argue that ―the divorce decree[,] when
read as a complete document, rather than isolating certain phrases, clearly
divests [James] of any title interest in the Osprey Property.‖ Appellees base this
argument primarily on the provision in the decree that addresses the division of
the Osprey property and provides that James is divested ―of all right, title,
interest, and claim in and to that property.‖ In light of this language, they argue
that ―[t]he decree . . . clearly states that [James] is ‗divested of all right, title,
interest‘ to the property.‖ Appellees also rely on the provisions in the decree
8
making Kristine responsible for the monthly payments and ad valorem taxes on
the Osprey property and ordering James and Kristine to execute and exchange
special warranty deeds.
An agreed divorce decree is interpreted according to the law of contracts.
Allen v. Allen, 717 S.W.2d 311, 313 (Tex. 1986); Chapman v. Abbot, 251 S.W.3d
612, 616 (Tex. App.—Houston [1st Dist.] 2007, no pet.); Soto v. Soto, 936
S.W.2d 338, 341 (Tex. App.—El Paso 1996, no writ). Our primary concern when
interpreting an agreement is to ascertain and give effect to the intent of the
parties as it is expressed in the agreement. Coker v. Coker, 650 S.W.2d 391,
393 (Tex. 1983); Chapman, 251 S.W.3d at 616. We examine the writing as a
whole in an effort to harmonize and give effect to all the provisions so that none
will be rendered meaningless. Coker, 650 S.W.2d at 393. If the agreement can
be given a certain or definite legal meaning or interpretation, then it is not
ambiguous, and the court will construe it as a matter of law. Id.; Broesche v.
Jacobson, 218 S.W.3d 267, 271 (Tex. App.—Houston [14th Dist.] 2007, pet.
denied). If the agreement is capable of more than one reasonable interpretation,
it is ambiguous. Broesche, 218 S.W.3d at 271.
We agree with James and Appellees that the divorce decree is
unambiguous. We therefore construe the decree as a matter of law. See Coker,
650 S.W.2d at 393.
The divorce decree orders and decrees that Kristine ―is awarded the
following as her sole and separate property‖ and that James ―is divested of all
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right, title, interest, and claim in and to that property.‖ [Emphasis added.] The
italicized language, ―the following‖ and ―that property,‖ is intended to refer to the
items of marital property listed immediately thereafter of which Kristine is
awarded as her separate property and James is divested of all right, title,
interest, and claim in and to. In the absence of identifying some property that
Kristine is awarded (and of which James is divested), the provision would have
no meaning or effect whatsoever. See Wilde v. Murchie, 949 S.W.2d 331, 333
(Tex. 1997) (cautioning that courts should not give conclusive effect to a
judgment‘s use or omission of commonly employed decretal words); Tex.
Workers’ Comp. Ins. Fund v. Lopez, 21 S.W.3d 358, 362 (Tex. App.—San
Antonio 2000, pet. denied).
The first item of marital property that Kristine is awarded as her separate
property and that James is divested of all right, title, interest, and claim in and to
is the ―use and benefit‖ of the Osprey property ―until it is sold.‖ Although the
decree contains a legal description of the Osprey property, it clearly and
unambiguously provides that Kristine is awarded as her separate property only
the ―use and benefit‖ of the property. This particular provision simply does not
award Kristine full title to the property, including James‘s undivided one-half
interest. Appellees‘ interpretation of the decree—that Kristine was awarded title
to the Osprey property—unquestionably renders meaningless the decree‘s ―use
and benefit‖ language.
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A divorce decree awarding a spouse the ―use and benefit‖ of a residence is
not unheard of or uncommon. In 1915, the Austin court of civil appeals
considered whether a judgment awarding the wife the ―use and benefit‖ of the
homestead during her life divested the husband of his interest and title to the
property. Wade v. Wade, 180 S.W. 643, 643 (Tex. Civ. App.—Austin 1915, no
writ). The court concluded that granting the wife ―the use of the homestead
during her natural life is not, we think, equivalent to divesting [the husband] of his
title thereto. It has been expressly held . . . that the court, in divorce cases, has
the right to decree the use and benefit of the homestead to the wife during her
lifetime.‖ Id. at 644 (citations omitted). Other courts have reasoned similarly.
See Laster v. First Huntsville Props. Co., 826 S.W.2d 125, 129 (Tex. 1991)
(reasoning that divorce decree awarding wife the ―use and occupancy of the
residence‖ created in her rights analogous to those of a life tenant and in
husband a future interest similar to that held by a vested remainderman);
Gilleland v. Meadows, 329 S.W.2d 485, 488 (Tex. Civ. App.—Waco 1959, no
writ) (stating that husband had an interest in property that was awarded to wife
for the use and benefit of her minor children); see also Bakken v. Bakken, 503
S.W.2d 315, 317 (Tex. Civ. App.—Dallas 1973, no writ) (reasoning that evidence
supported trial court‘s decree awarding wife residence for the use and benefit of
her and the minor children and the first $7,500 of the net proceeds from the
eventual sale of the residence).
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Our construction is supported when we examine the decree as a whole, as
we must. See Coker, 650 S.W.2d at 393. The portion of the decree awarding
property to James contains the same decretal language preceding the
identification of property as that found in the part of the decree awarding Kristine
property. It states that James ―is awarded the following as his sole and separate
property‖ and that Kristine ―is divested of all right, title, interest, and claim in and
to that property.‖ However, unlike the decree‘s award to Kristine of the ―use and
benefit‖ of the Osprey property ―until it is sold,‖ the decree here provides that
James is awarded ―[t]he following real property,‖ including the title and closing
documents. There is no dispute that this contrasting language awarded James
the Jenkins property.
Further, the portion of the decree setting out the terms and conditions of
the sale of the Osprey property supports our construction. The decree provides
that ―[t]he parties‖ shall list the property, that the property shall be sold for a price
that is ―mutually agreeable‖ to Kristine and James, and that Kristine shall have
the exclusive right to enjoy the ―use and possession‖ of the premises until
closing. The decree essentially reaffirms that Kristine is merely awarded the use
of the Osprey property instead of title, and it makes little sense, if any, to order
Kristine and James to jointly list the property and to mutually agree on a selling
price if the decree awarded Kristine title to the property.
Contrary to Appellees‘ argument, the decree‘s award to Kristine of only the
―use and benefit‖ of the Osprey property does not conflict with its ordering her to
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make payments on the property and to pay the ad valorem taxes until the
property is sold. And we cannot conclude that the portion of the decree ordering
that James and Kristine exchange special warranty deeds in the forms attached
to the decree conflicts with our construction; there are no special warranty deeds
attached to the decree, and thus there are no special warranty deeds that are a
part of the summary judgment record.
A case with strikingly similar facts and issues to this case is Starkey v.
Holoye, 536 S.W.2d 438, 439–40 (Tex. Civ. App.—Houston [14th Dist.] 1976,
writ ref‘d n.r.e.). In that case, Starkey and Safford‘s divorce decree awarded
marital property to Safford and the minor children ―for their use and benefit as
their home, until the youngest of said children shall have reached the age of
eighteen (18) years.‖ Id. at 440. After the divorce, Safford remarried, and he and
his wife later purported to convey the entire property to the Holoyes by a general
warranty deed, which was subject to a vendor‘s lien assigned to United Mortgage
Company of Texas. Id. Starkey sued Holoye and United Mortgage Company for
title to an undivided one-half interest in the property, for partition of the property
or the proceeds from the sale thereof, and, among other things, to have liens on
the property declared to be of no force and effect as against her interest in the
property. Id. at 439. The Holoyes filed a cross-action against Safford, and the
trial court ultimately denied Starkey‘s motion for summary judgment. Id. On
appeal, in addition to determining that the divorce decree awarded Safford a right
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to reimbursement for payments he made on the property after the divorce, the
court of civil appeals reasoned as follows:
Since the property was not partitioned at the time of the
divorce, [Safford] and [Starkey] became tenants in common or joint
owners thereof, each owning an undivided one-half interest. With a
deed on record showing the owners of the property to be [Safford
and Starkey], the Holoyes could not have purchased from [Safford
and his wife] any greater interest in the property than was owned by
[Safford]: an undivided one-half interest. Upon their purchase of
[Safford‘s] interest, the Holoyes became tenants in common with
[Starkey]. [Starkey] presently owns an undivided one-half interest,
subject to a claim by [Safford] for reimbursement for any payments
made on the property after [the date of the divorce]. Since she is still
a joint owner of the property, and absent any agreement not to
partition, [Starkey‘s] right to partition is absolute under [the property
code].
Further, the Holoyes could not mortgage more of the property
than they owned. Therefore, they could not mortgage [Starkey‘s]
interest, and the lien asserted by United Mortgage Company is
ineffective as to [Starkey‘s] one-half interest.
Id. at 441 (citations omitted). Starkey is instructive on James‘s claims for
declaratory judgment and for partition.
We have examined the divorce decree as a whole toward the end of
harmonizing and giving effect to all that is written. See Wilde, 949 S.W.2d at
333. We hold that the trial court erred by granting Appellees‘ motion for
summary judgment on James‘s declaratory judgment claims and by denying
James‘s motion for summary judgment on that claim. The divorce decree did
not, as a matter of law, convey James‘s interest in the Osprey property to
Kristine, thus divesting him of title to the property; rather, the decree awarded
Kristine only the ―use and benefit‖ of the Osprey property until it was sold.
14
Because the divorce decree did not convey James‘s interest in the Osprey
property to Kristine, James and Kristine became tenants in common, Kristine
could not have transferred James‘s interest in the Osprey property, Isbell could
not have acquired James‘s interest in the property when he purportedly
purchased the property from the Bauerlys, and Fairway‘s security interest could
not have encumbered James‘s interest. See Starkey, 536 S.W.2d at 441.
Accordingly, we sustain James‘s first issue.
V. PARTITION
In his second issue, James argues that he has an absolute right as a joint
owner to a partition of the property.5 A joint owner or claimant of real property or
an interest in real property may compel a partition of the interest or the property
among the joint owners or claimants. Tex. Prop. Code Ann. § 23.001 (Vernon
2000). The right to partition has been characterized as ―absolute.‖ Grant v.
Clouser, 287 S.W.3d 914, 919 (Tex. App.—Houston [14th Dist.] 2009, no pet.).
The rules of civil procedure set out a multi-step process for partition of real
estate. See Tex. R. Civ. P. 756–71; Long v. Spencer, 137 S.W.3d 923, 925–26
(Tex. App.—Dallas 2004, no pet.); Positive Feed, Inc. v. Wendt, Nos. 01-96-
00614-CV, 01-96-01250-CV, 1998 WL 43321, at *4 (Tex. App.—Houston [1st
Dist.] Feb. 5, 1998, pet. denied) (op. on reh‘g).
5
There is no evidence that James waived his right to partition the property.
15
In light of our holding above and the extent of the record, it appears that
the only part of the partition process that has occurred is the determination of the
parties‘ shares or interest in the Osprey property. The trial court, not this
appellate court, is the appropriate venue to address the remaining, unresolved
aspects of James‘s claim for partition, whatever they may be. See Tex. R. Civ.
P. 760–71.
VI. CONCLUSION
Having sustained James‘s first issue, we reverse the trial court‘s judgment
and render judgment in favor of James on his claims for declaratory relief. We
remand James‘s claim for partition to the trial court for further proceedings
consistent with this memorandum opinion.
BILL MEIER
JUSTICE
PANEL: LIVINGSTON, C.J.; MCCOY and MEIER, JJ.
DELIVERED: March 17, 2011
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