Chapman v. Abbot

• Decision Date: 18 October 2007
• Docket Number: No. 01-06-00940-CV.,01-06-00940-CV.
• Citation: 251 S.W.3d 612
• Parties: Patsy CHAPMAN, Appellant, v. Rachel K. ABBOT, Treva J. Burks, and Rebecca A. Sheehan, Appellees.
• Court: Texas Court of Appeals

251 S.W.3d 612

Patsy CHAPMAN, Appellant, v. Rachel K. ABBOT, Treva J. Burks, and Rebecca A. Sheehan, Appellees.

No. 01-06-00940-CV.

Court of Appeals of Texas, Houston (1st Dist.).

October 18, 2007.

Rehearing Overruled November 15, 2007.

Richard R. Burroughs, Law Office of Richard R. Burroughs, Cleveland, TX, for Appellant.

Kevin P. Riley, Godwin Pappas Langley Ronquillo LLP, Houston, TX, for Appellees.

Panel consists of Chief Justice RADACK and Justices ALCALA and BLAND.

OPINION

JANE BLAND, Justice.

In a dispute over the proper recipient of life insurance proceeds from a policy purchased by her ex-husband, Patsy Chapman appeals a summary judgment in favor of his daughters, Rachel K. Abbot, Treva J. Burks, and Rebecca A. Sheehan. Chapman contends that the trial court erred in granting summary judgment in favor of the daughters because genuine issues of material fact exist as to the terms of a divorce decree and the validity of a power of attorney. We conclude that the trial court properly granted summary judgment and therefore affirm.

Background

On January 16, 2002, Chapman and James Carrell Guyton executed an agreed divorce decree and divorced. The decree contains the following contractual provisions regarding alimony and insurance:

9.3 AMOUNT

[Guyton] will pay to [Chapman] $2,200.00, per month, in two payments of $1,100.00 each, as and for alimony. These payments will be payable monthly, on or before the 1st and 15th day of each month, beginning on February 1, 2002.

9.4 TERM

The payments will be payable until February 1, 2005, or [Chapman] dies, or [Chapman] remarries, whichever occurs first.

....

9.6 INSURANCE

As long as alimony is payable under this article, [Guyton] will keep the life insurance at Oldline Life Insurance, Policy Number 5-2063321L in full force and effect, at [Guyton's] expense, in the face amount of $50,000.00 naming [Chapman] irrevocable beneficiary.

It is the intent of [Guyton] and [Chapman] that in the event of the death of [Guyton] during the term of the alimony contract that the entire sum of the life insurance proceeds of $50,000.00 shall be due and payable to [Chapman] in addition to those sums paid pursuant to the parties['] monthly contractual alimony package.

Throughout 2002, 2003, and 2004, Guyton timely paid alimony and maintained a $50,000 life insurance policy with Chapman named as the beneficiary, in accordance with the divorce decree. On December 13, 2004, Guyton gave Chapman an alimony check for $1,100, and wrote "Final Alimony" at the bottom of the check. The December 13 alimony payment was the seventy-second alimony payment Guyton made under the decree.

On December 30, 2004, Guyton executed a statutory durable power of attorney naming Sheehan as his attorney-in-fact. See TEX. PROB.CODE ANN. § 490 (Vernon 2003). On January 10, 2005, Sheehan used the power of attorney to change the beneficiary designation of the $50,000 life insurance policy. Sheehan named herself, Abbot, and Burks as the new beneficiaries of the policy. Guyton died of pneumonia the following day.

In August 2005, American General Life Insurance Company filed a petition in interpleader against Chapman, Abbot, Burks, and Sheehan, seeking a judicial determination of the proper beneficiary of the life insurance policy. See TEX.R. CIV. P. 43. The daughters moved for summary judgment, asserting that they were entitled to the proceeds of the insurance policy as a matter of law, or alternatively, that Chapman had produced no evidence that Guyton had breached the divorce decree by changing the beneficiary of the life insurance policy. In the motion, the daughters contend that the December 13 payment terminated Guyton's alimony obligation under the agreement incorporated in the divorce decree, as well as his obligation to maintain a life insurance policy in favor of Chapman. The trial court granted the summary judgment without specifying the grounds, ruling that the daughters were entitled to the proceeds of the life insurance policy.

Summary Judgment

A. Standard of Review

We review a trial court's summary judgment de novo. Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661 (Tex.2005); Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.2003). Under the traditional standard for summary judgment, the movant has the burden to show that no genuine issue of material fact exists and that the trial court should grant a judgment as a matter of law. TEX.R. CIV. P. 166a(c); KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex.1999). When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant, and indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Dorsett, 164 S.W.3d at 661; Knott, 128 S.W.3d at 215; Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.1997).¹

B. Contract Interpretation

"An agreed divorce decree is a contract subject to the usual rules of contract interpretation." Broesche v. Jacobson, 218 S.W.3d 267, 271 (Tex.App.-Houston [14th Dist.] 2007, pet. denied); McKnight v. Trogdon-McKnight, 132 S.W.3d 126, 131-32 (Tex.App.-Houston [14th Dist.] 2004, no pet.); Harvey v. Harvey, 905 S.W.2d 760, 764 (Tex.App.Austin 1995, no writ). Our primary concern when interpreting a contract is to ascertain and give effect to the intent of the parties as it is expressed in the contract. Seagull Energy E & P, Inc. v. Eland Energy, Inc., 207 S.W.3d 342, 345 (Tex.2006). To achieve this objective, courts should examine the entire writing in an effort to harmonize and give effect to all the provisions of the contract so that none will be rendered meaningless. Dorsett, 164 S.W.3d at 662.

Whether a contract is ambiguous is a question of law for the court. Heritage Res., Inc. v. NationsBank, 939 S.W.2d 118, 121 (Tex.1996). If the contract is so worded that it can be given a certain or definite legal meaning or interpretation, then it is not ambiguous, and a court should construe the contract as a matter of law. SAS Inst., Inc. v. Breitenfeld, 167 S.W.3d 840, 841 (Tex.2005); ACS Investors, Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex.1997). We construe an unambiguous contract according to the plain meaning of its express wording. Lyons v. Montgomery, 701 S.W.2d 641, 643 (Tex. 1985). Unambiguous contracts are enforced as written. Heritage Res., Inc., 939 S.W.2d at 121.

"A contract is ambiguous when its meaning is uncertain and doubtful or is reasonably susceptible to more than one interpretation." Id. We determine whether a contract is ambiguous by looking at the contract as a whole in light of the circumstances present when the parties entered the contract. Universal Health Servs., Inc. v. Renaissance Women's Group, P.A., 121 S.W.3d 742, 746 (Tex. 2003). If a contract is determined to be ambiguous, then a court may consider extraneous evidence to ascertain the true meaning of the instrument. Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex.1995).

An ambiguity in a contract may be either patent or latent. Id. A patent ambiguity is evident on the face of the contract. Id. A latent ambiguity arises when a contract that is unambiguous on its face is applied to the subject matter with which it deals and an ambiguity appears by reason of some collateral matter. Id. When a contract contains an ambiguity, either patent or latent, the interpretation of the instrument becomes a fact issue. Coker v. Coker, 650 S.W.2d 391, 394 (Tex. 1983); Quality Infusion Care, Inc. v. Health Care Serv. Corp., 224 S.W.3d 369, 379 (Tex.App.Houston [1st Dist.] 2006, no pet.). The trier of fact must resolve the ambiguity by determining the true intent of the parties. Coker, 650 S.W.2d at 394-95.

C. Early Payments

Chapman contends that the term of the alimony payments in the divorce decree was from February 1, 2002 until February 1, 2005, and Guyton could not extinguish his obligations under the contract by making an early alimony payment. The contract, however, expressly states that Guyton must make alimony payments "on or before the 1st and 15th day of each month." The plain meaning of the term "before" is "in advance" or "at an earlier time." MERRIAM-WEBSTER'S COLLEGIATE DICTIONARY 110 (11th ed.2003). We therefore conclude that the phrase "on or before" permitted Guyton to satisfy his alimony obligation by making payments before they were due. See, e.g., Kennedy Ship & Repair, L.P. v. Pham, 210 S.W.3d 11, 22 (Tex.App.-Houston [14th Dist.] 2006, no pet.) (holding that term in contract was unambiguous and should be construed as matter of law). Additionally, the parties stated intent regarding the alimony payments is "the mutual desire ... to provide a continuing measure of support for [Chapman], after [the] divorce." Allowing Guyton to make alimony payments early is consistent with this intent, especially in light of the express language in the contract that allows payments to be made "on or before" their due date. See Frost Nat'l Bank v. Matthews, 713 S.W.2d 365, 368 (Tex.App.-Texarkana 1986, writ ref'd n.r.e.) (holding that "on or before" term in oil and gas lease allowed lessee to make shut-in royalty payments early).

Furthermore, the contract states that "[a]s long as alimony is payable under this article, [Guyton] will keep the life insurance at Oldline Life Insurance, Policy Number 5-2063321L in full force and effect, at [Guyton's] expense, in the face amount of $50,000.00 naming [Chapman] irrevocable beneficiary." The contract also states that "[i]t is the intent of [Guyton] and [Chapman] that in the event of the death of [Guyton] during the term of the alimony contract that the entire sum of the life insurance proceeds of $50,000.00 shall be due and payable to [Chapman] in addition to those sums paid pursuant to the parties['] monthly contractual alimony package." (emphasis added). This language plainly allows Guyton to change the beneficiary of the life insurance policy after the...