Appleton v. Appleton

• Decision Date: 07 March 2002
• Docket Number: No. 14-00-00800-CV.,14-00-00800-CV.
• Citation: Appleton v. Appleton, 76 S.W.3d 78 (Tex. App. 2002)
• Parties: Janet Brakeman APPLETON, Appellant, v. Noah Lynn APPLETON, Appellee.
• Court: Texas Court of Appeals

76 S.W.3d 78

Janet Brakeman APPLETON, Appellant, v. Noah Lynn APPLETON, Appellee.

No. 14-00-00800-CV.

Court of Appeals of Texas, Houston (14th Dist.).

March 7, 2002.

John C. Pavlas, Shawn Russel Casey, Houston, for appellants.

Thomas R. Conner, Timothy F. Lee, Houston, for appellees.

Panel consists of Justices ANDERSON, HUDSON, and FROST.

OPINION

KEM THOMPSON FROST, Justice.

Appellant Janet Brakeman Appleton appeals from a take-nothing summary judgment rendered in favor of her ex-husband appellee Noah Lynn Appleton. In three issues, Janet contends the trial court erred in granting Noah's motion for summary judgment and in awarding attorney's fees against her as sanctions under Texas Rule of Civil Procedure 13. We affirm.

I. Factual And Procedural Background

Janet and Noah were married for thirteen years. They divorced in February 1997. As part of their divorce, they filed an agreed property division.

At all relevant times, Noah was employed as president of Advantage Motors, Inc., a BMW dealership. In June 1993, Noah, with Janet's consent, entered into a Stock Purchase Agreement with BMW of North America, Inc. ("BMW"), for the purpose of acquiring BMW's stock in Advantage Motors, Inc. This agreement governed the rights and obligations between Noah and BMW in connection with Noah's stock ownership in and employment with Advantage Motors. Under the agreement, Noah eventually was to become the sole stockholder and operator of Advantage Motors, and the terms of the agreement required him to buy stock annually from BMW. The stock was valued at a certain percentage of the original stock value of the company. The agreement also provided that Noah, at his option, could buy additional shares of preferred stock from BMW at any time, which were to be over and above his minimum purchase obligation. Additionally, the agreement gave Noah bonus compensation if he should "expend at least fifty percent (50%) of the aggregate amount of all bonuses paid to him in a calendar year to purchase Shares of Preferred Stock from [BMW]."

When they divorced, Noah and Janet entered into an agreed final divorce decree. This agreed decree divided the parties' property and contained specific provisions addressing Noah's Stock Purchase Agreement with BMW. The decree awarded Noah, among other things, the entire 25% of the stock in Advantage Motors that Noah and Janet owned at the time, plus all past, present, and future rights and claims under the Stock Purchase Agreement. In May 1997, three months after the court entered the agreed divorce decree, Noah purchased 3,800 shares of stock in Advantage Motors, Inc., increasing his ownership from the 25% awarded to him in the agreed divorce decree to 44%. Two years later, in January 1999, Janet filed a petition for a partition of property, claiming that, when the court signed the agreed divorce decree, the parties' community interest amounted to more than the 25% Noah revealed during the divorce proceedings, and that she was entitled to a portion of Noah's post-divorce purchase of stock under the Stock Purchase Agreement. In July 1999, Noah filed a motion for summary judgment. Noah also sought sanctions under Texas Rule of Civil Procedure 13, asserting that Janet's pleadings were frivolous. In September 1999, the trial court granted a take-nothing summary judgment in favor of Noah without stating its reasoning. The trial court also awarded attorney's fees as Rule 13 sanctions against Janet. Janet now appeals the trial court's order granting Noah's motion for summary judgment and awarding him attorney's fees as Rule 13 sanctions.¹

II. Issues Presented on Appeal

We must decide whether the additional 19% of stock Noah purchased after the parties' divorce is subject to partition and whether the trial court erred in awarding attorney's fees as Rule 13 sanctions against Janet.

III. Summary Judgment

In her first two issues, Janet contends the trial court erred in granting summary judgment because (1) the final divorce decree failed to partition property rights acquired during marriage pursuant to Noah's Stock Purchase Agreement with BMW and (2) a fact issue exists whether the language in the final divorce decree was ambiguous.

A. Standard of Review

For a defendant, as movant, to prevail on a motion for summary judgment, he must either disprove at least one necessary element of the plaintiff's theory of recovery or plead and conclusively establish each essential element of an affirmative defense. Triton Oil & Gas Corp. v. Marine Contractors & Supply, Inc., 644 S.W.2d 443, 446 (Tex.1982). A matter is conclusively established if reasonable minds cannot differ as to the conclusion to be drawn from the summary judgment proof. Id.

Once the movant establishes that he is entitled to summary judgment, the burden shifts to the nonmovant to show why summary judgment should be avoided. Casso v. Brand, 776 S.W.2d 551, 556 (Tex.1989). In conducting our review, we take as true all evidence favorable to the nonmovant, and we make all reasonable inferences in the nonmovant's favor. See Nixon v. Mr. Prop. Mgmt., 690 S.W.2d 546, 548-49 (Tex. 1985). Where, as here, the trial court does not specify the ground on which it relied in granting summary judgment, we may affirm the summary judgment if any of the theories advanced are meritorious. Rogers v. Ricane Enters., Inc., 772 S.W.2d 76, 79 (Tex.1989).

B. Res Judicata

In her first issue, Janet argues the trial court erred in granting Noah's motion for summary judgement because the final agreed divorce decree failed to partition Noah's post-divorce rights to purchase stock under his stock agreement with BMW. In the alternative, in her second issue, Janet contends summary judgment was improper because a fact issue existed whether the language contained in the final divorce decree regarding the Stock Purchase Agreement was ambiguous. Noah counters that the agreed final divorce decree is unambiguous with respect to his rights and obligations under this agreement, and that summary judgment in his favor was proper. In his motion for summary judgment, Noah argued that, because the final divorce decree disposed of the parties' 25% interest and any rights to purchase additional stock in the future as community property, res judicata bars Janet's claim. We agree.

Res judicata precludes relitigation of claims that have been finally adjudicated or that arise out of the same subject matter and could have been raised and litigated in the prior action. Martin v. Martin, Martin & Richards, Inc., 989 S.W.2d 357, 358 (Tex.1998). Res judicata applies to a final divorce decree to the same extent that it applies to any other final judgment. Baxter v. Ruddle, 794 S.W.2d 761, 763 (Tex.1990). If an appeal is not perfected, res judicata bars a subsequent collateral attack. Id. The elements of res judicata are: (1) a prior final judgment on the merits by a court of competent jurisdiction; (2) identity of parties or those in privity with them; and (3) a second action based on the same claims as were raised or could have been raised in the first action. Amstadt v. U.S. Brass Corp., 919 S.W.2d 644, 652 (Tex.1996).

At issue in this case is whether the parties' final divorce decree partitioned their rights and obligations to purchase stock under the Stock Purchase Agreement. The parties' rights under the Stock Purchase Agreement were before the court as community property at the time the court entered the divorce decree, and the court awarded these rights to Noah pursuant to the parties' consent decree.

Texas courts follow an established procedure for interpreting property divisions in divorce decrees. Community property not awarded or partitioned by a divorce decree is subject to later partition between the ex-spouses, who are considered joint tenants or tenants in common. Busby v. Busby, 457 S.W.2d 551, 554 (Tex. 1970); Harrell v. Harrell, 692 S.W.2d 876 (Tex.1985). Res judicata does not apply to post-divorce partitions where the divorce decree has not disposed of an asset. See Busby, 457 S.W.2d at 554. In those situations, partition is an appropriate remedy. Id. However, res judicata does apply, and partition is not appropriate, if the final decree purports to divide the entire community estate and is unambiguous, and neither party files a direct appeal. Acosta v. Acosta, 836 S.W.2d 652, 654 (Tex.App.-El Paso 1992, writ denied). Because the divorce decree at issue is an agreement by the parties, contract principles control. See McGoodwin v. McGoodwin, 671 S.W.2d 880, 882 (Tex.1984) (holding that a martial property settlement agreement incorporated into a final divorce decree is governed by the law of contracts).

When construing a written contract, the court's primary concern is to ascertain and give effect to the intentions of the parties as expressed in the instrument. R & P Enterprises v. LaGuarta, Gavrel & Kirk, 596 S.W.2d 517, 518 (Tex. 1980). To ascertain the true intentions of the parties to the contract, "courts should examine and consider the entire writing in an effort to harmonize and give effect to all of the provisions of the contract so that none will be rendered meaningless." Buys v. Buys, 924 S.W.2d 369, 372 (Tex.1996) (emphasis added); Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983); Biaza v. Simon, 879 S.W.2d 349, 356 (Tex.App.-Houston [14th Dist.] 1994, writ denied). When a written contract is so worded that it can be given a certain or definite legal meaning or interpretation, it is not ambiguous. Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 861 (Tex.2000).

Ambiguity arises only if the application of established rules of construction leaves the agreement susceptible of more than one reasonable meaning. De-Witt County Elec. Co-op. v. Parks, 1 S.W.3d 96, 100 (Tex.1999). "Whether a contract is ambiguous is a question of law for the court to decide by looking at the contract as a whole" in light of the circumstances present when the contract was made. Coker...