Broesche v. Jacobson, No. 14-04-00548-CV.

• Court: Court of Appeals of Texas
• Writing for the Court: Leslie B. Yates
• Citation: 218 S.W.3d 267
• Parties: Rebecca L. BROESCHE, Appellant v. John Daniel JACOBSON and Texas Independent Exploration, Inc., Appellees.
• Decision Date: 08 March 2007
• Docket Number: No. 14-04-00548-CV.

218 S.W.3d 267 Rebecca L. BROESCHE, Appellant
v.
John Daniel JACOBSON and Texas Independent Exploration, Inc., Appellees. No. 14-04-00548-CV. Court of Appeals of Texas, Houston (14th Dist.). March 8, 2007.

[218 S.W.3d 269]

Shawn Russel Casey, Houston, for appellant.

Mark Trachtenberg, J. Greg McEldowney, Mario de la Garza, Katharine D.

[218 S.W.3d 270]

David, Houston, for appellee Texas Independent Exploration, Inc.

Stewart W. Gagnon, Miryam R. Mitchell, Houston, for appellee John Daniel Jacobson.

Panel consists of Justices YATES, ANDERSON, and HUDSON.

OPINION

LESLIE B. YATES, Justice.

This appeal arises out of a dispute between appellant Rebecca L. Broesche and appellee John Daniel Jacobson over the interpretation of their 1993 divorce decree. In ten issues, Broesche claims the trial court erred in (a) its interpretation of the decree, (b) awarding attorneys' fees and sanctions against her, and (c) entering a turnover judgment awarding funds interpleaded by appellant Texas Independent Exploration, Inc. ("TIE") to Jacobson. We affirm in part and reverse and remand in part.

I. BACKGROUND

Broesche and Jacobson divorced in 1993 with an agreed decree. Post-divorce litigation began in 1996. We discuss only the details of these protracted and complicated legal proceedings as are necessary to the disposition of this appeal.

Jacobson is a geologist employed by TIE, and TIE compensates Jacobson largely by giving him interests in the oil and gas wells he helps develop. When Broesche, who is also a geologist, and Jacobson divorced, the decree provided that Broesche was to receive "[o]ne-half of all oil and gas interests of the parties as described in Exhibit A," which is a list of fifty oil and gas wells. The central issue in this litigation is the parties' differing interpretations of exactly what oil and gas interest Broesche received in the decree. Jacobson contends her interest is only in the specific wells listed whereas Broesche claims she has an interest in the leaseholds associated with each well. The trial court eventually agreed with Jacobson and ruled as a matter of law that the agreed decree unambiguously awarded an interest only in the wells listed in Exhibit A, not in the associated leaseholds or any subsequent wells drilled pursuant to those leaseholds.

The decree also provided that Broesche was responsible for paying one-half of federal income taxes due during certain years of the marriage. When Broesche failed to pay these taxes, Jacobson brought an action in 1996 to enforce the decree. In 1997, the trial court entered judgment for Jacobson in the amount of $24,421 plus interest. Jacobson then filed a writ of garnishment against TIE, who, as operator of the wells, was responsible for paying Broesche revenue for her oil and gas interests under the decree. The trial court eventually dismissed the writ of garnishment and granted a new trial on the tax issue on the condition, to which Broesche agreed, that TIE continue to hold in suspense the money generated from Broesche's oil and gas interests. The trial court later held a new trial on the tax issue and other issues and entered a judgment in June 2000. Thereafter, in September 2000, the trial court granted another motion for new trial on the other issues but not the tax issue, rendering the tax judgment interlocutory.

Meanwhile, TIE became further involved in the litigation in 1998 when Broesche asserted claims against TIE regarding TIE's handling of her oil and gas interests, including breach of contract, fraud, and conversion. TIE moved for summary judgment on all claims. The trial court granted summary judgment for TIE and severed this judgment in 1999, and Broesche did not appeal. TIE continued

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to hold revenues from Broesche's oil and gas interests in suspense because the trial court had not yet held the second trial on the remaining issues. However, both parties began demanding that TIE release the funds to them. Because of these conflicting demands, in 2002, TIE filed an interpleader action and deposited the suspensed funds in the court's registry. After TIE filed its interpleader, Broesche refiled her previously adjudicated claims against TIE as counterclaims to the interpleader. TIE moved for summary judgment on these claims, and Broesche moved for partial summary judgment as to the conversion claim. In 2003, the trial court granted TIE's motion and denied Broesche's motion.

In January 2004, the remaining issues came to trial again. In a pretrial hearing, the trial court made its ruling regarding the interpretation of the decree, rejecting Broesche's arguments regarding the nature of her oil and gas interests as a matter of law. This ruling effectively resolved all remaining claims except Jacobson's and TIE's claims for attorneys' fees and sanctions against Broesche. The trial court had granted TIE's motion for sanctions on June 17, 2003 and awarded $17,500 to TIE but carried Jacobson's motion for sanctions. On February 24, 2004, the trial court signed an order granting Jacobson's motion for sanctions, awarding $162,000. The same day, the trial court entered a final judgment that, among other things, reconfirmed Jacobson's prior tax judgment and awarded TIE $119,598.74 in attorneys' fees for its interpleader action. Now that the tax judgment was final, Jacobson filed a motion to have the interpleaded funds turned over to him to satisfy the judgment, which the trial court granted on February 27, 2004. Because the amount of tax money owed had more than doubled with interest, Jacobson received most of the $55,925.39 in proceeds in the court's registry.

In ten issues, Broesche appeals the final judgment, the turnover order, and both sanctions orders.

II. ANALYSIS A. Interpretation of the Decree

In her first issue, Broesche claims the trial court erred in its interpretation of the divorce decree. An agreed divorce decree is a contract subject to the usual rules of contract interpretation. See McGoodwin v. McGoodwin, 671 S.W.2d 880, 882 (Tex.1984). Our primary concern in interpreting a contract is ascertaining the true intent of the parties. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex.1996); Zurich Am. Ins. Co. v. Hunt Petroleum (AEC), Inc., 157 S.W.3d 462, 465 (Tex.App.-Houston [14th Dist.] 2004, no pet.). We examine the writing as a whole 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); Zurich, 157 S.W.3d at 465. If the contract 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. Coker, 650 S.W.2d at 393; Cook Composites, Inc. v. Westlake Styrene Corp., 15 S.W.3d 124, 131 (Tex. App.-Houston [14th Dist.] 2000, pet. dism'd). If, however, a contract is capable of more than one reasonable interpretation, it is ambiguous. Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex. 2003); Zurich, 157 S.W.3d at 465. This court may conclude a contract is ambiguous, even though the parties do not so contend. Zurich, 157 S.W.3d at 465. When a contract is ambiguous, construing it as a matter of law is improper because the interpretation of the contract becomes a

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fact issue. See Coker, 650 S.W.2d at 394; Zurich, 157 S.W.3d at 465.

The agreed decree here divides the marital estate, with parallel provisions awarding each party similar assets. Regarding oil and gas interests, the decree awards each party "[o]ne-half of all oil and gas interests of the parties as described in Exhibit A." Exhibit A is a chart with fifty rows and five columns. The five columns are labeled "County," "Well," "WI%," "NRI%," and "Status." "WI%" means working interest percentage, and "NRI%" means net revenue interest percentage. "Status" types are "A" for active, "I" for inactive, and "APO" for after payout.¹

The decree further provides that Broesche's interests "shall be transferred in the form of assignments to be prepared by [TIE] subsequent to the divorce of the parties. It is further ORDERED that [Jacobson] take all actions necessary to insure that one-half of the active interests on Exhibit A are adequately and appropriately transferred to [Broesche]." A separate section of the decree, entitled "Division of Assets and Liabilities Not Provided for in Decree," states in part as follows:

It is further Ordered that all oil and gas interests, or other contractual or business interests which may have accrued during the course of the marriage but which are not specifically listed herein, are awarded to the party whose personal efforts or signature created such interests, if any.

Broesche argues that the decree unambiguously awards her an interest not only in the fifty specific wells listed in Exhibit A but in the leaseholds enabling those wells to be built. She contends that the term "working interest" means leasehold interest. Thus, she reasons, Exhibit A's reference to "WI%" means it is describing a leasehold interest. Broesche further argues that the decree shows an intent to divide the marital estate evenly and that awarding all leasehold interests to Jacobson would be inconsistent with this intent.² Jacobson contends the decree unambiguously awards Broesche an interest only in the specific wells listed in Exhibit A. He disputes that a working interest necessarily means a leasehold interest and points out that neither Exhibit A nor any other decree provision mentions any mineral lease. Jacobson also relies upon the language in the decree stating that any oil and gas interests not specifically listed in the decree are awarded to the person whose efforts created the interests, which in this case would be Jacobson.

Broesche is correct that a working interest is generally understood to mean a mineral interest created by a leasehold.³

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However, as the Oklahoma Supreme Court has...