Gonzales v. Pounds

CourtCourt of Appeals of Texas
PartiesJOHN T. GONZALES, APPELLANT v. ALICIA POUNDS, APPELLEE
Docket Number07-21-00088-CV
Decision Date04 February 2022

JOHN T. GONZALES, APPELLANT
v.

ALICIA POUNDS, APPELLEE

No. 07-21-00088-CV

Court of Appeals of Texas, Seventh District, Amarillo

February 4, 2022


On Appeal from the 53rd District Court Travis County, Texas Trial Court No. D-1-FM-18-000396; Honorable Jan Soifer, Presiding

Before PIRTLE and PARKER and DOSS, JJ.

MEMORANDUM OPINION

PATRICK A. PIRTLE, JUSTICE

This appeal involves post-divorce enforcement matters surrounding the dissolution of the marriage between Appellant, John T. Gonzales, and Appellee, Alicia Pounds. Gonzales appeals the trial court's Order on Motion for Enforcement entered in the underlying cause following a hearing on competing motions for enforcement of the parties' Agreed Final Decree of Divorce. The trial court's order found that the present unpaid

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balance of an "equalization judgment" owed by Pounds to Gonzales under the terms of the original decree was $200, 285.28; however, the trial court ordered that the unpaid balance be reduced or offset by (1) $86, 237.56 for Gonzales's one-half of the parties' 2017 tax liability, (2) $30, 572.00 for the penalties and interest accrued on the parties' 2017 federal taxes paid, (3) $14, 220.00 for attorney's fees paid by Pounds to Walters Gilbreath, PLLC, (4) $17, 590.00 for attorney's fees paid by Pounds for Five Stone Tax Advisers, and (5) $3, 818.25 for Gonzales's one-half of the fees paid to John Knox for preparation of the parties' 2017 joint federal tax return. Via this appeal, Gonzales challenges the trial court's order through eight issues.[1] We will affirm in part and reverse and remand in part.

Background

Gonzales filed for divorce on January 22, 2018, and an Agreed Final Decree of Divorce was subsequently entered on March 7, 2019. The decree made provisions for the conservatorship and support of three minor children and the division of the community estate of the parties. Pursuant to that decree, Pounds was awarded a business; however, she was required to pay Gonzales for his community interest in that business. To that end, Gonzales was granted an "equalization judgment" in the amount of $770, 000, secured by Pounds's primary residence and certain other rental properties awarded to her by the decree. Pounds was also required to pay the equalization judgment in monthly installments of $23, 333, with a three percent interest rate beginning February 1, 2019.

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Pounds paid those installments to Gonzales until March 2020. Pounds defaulted on the payments and an acceleration clause in the periodic payment agreement contained in the decree was triggered, causing the full amount of the judgment to become immediately due and payable.[2]

Per the parties' agreement, an accountant, John Knox, was to prepare the parties' tax returns. Knox prepared for the parties both their corporate and individual returns. At issue here is the 2017 federal joint tax return, the last joint tax return due for income earned prior to the divorce. The parties incurred a tax liability of approximately $199, 000 for that tax year. The Decree set forth that Pounds was to pay an initial $60, 000, plus penalties and interest "arising solely out of the failure to previously make the $60, 000 payment to the Internal Revenue Service." The parties were then to each pay one-half of the remaining tax liability, plus any penalties and interest. Knox prepared the 2017 tax return on June 10, 2019. Pounds immediately provided her consent to Knox to file the return. However, Gonzales did not. Due to his expertise as a tax consultant, Gonzales requested certain documents to review before consenting to the filing of their return. Evidence presented at trial showed he received those documents in the summer of 2020[3]and within a week, he informed Knox and Pounds that he found additional medical expenses of $6, 000 and $111, 962 in standard deductions, giving the parties a tax credit

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of approximately $58, 250. Gonzales finally provided consent to file the 2017 tax return the day before the hearing in this matter.

Pounds testified that she defaulted on the payments to Gonzales in March 2020 because without the 2017 tax return she could not refinance her properties and thus had to choose whether to meet her payroll obligations for the business or to pay Gonzales. She admitted that at one point, she told Gonzales she was diverting the monthly payments due to him to the IRS but later acknowledged that was untrue.

To secure payment of the $770, 000 equalization judgment, an owelty lien[4] was placed on the real property that was awarded to Pounds in the division of assets. At Pounds's request, the trial court also ordered that any money from the sale of that real property be placed in a trust account. Pounds sold her primary residence in August 2020 and the proceeds from that sale were placed in that trust account. Thereafter, the parties filed competing motions for enforcement of the Agreed Final Decree of Divorce and disposition of the money in that trust was delayed until such time as the trial could determine whether Pounds was entitled to any offsets.

The trial court held a hearing on the parties' motions in October 2020.[5] Through that hearing, Pounds sought to offset the judgment owed to Gonzales by one-half of the

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remaining tax liability owed as well as by other fees, including attorney's fees. By that time, Pounds had filed a separate tax return for 2017 and had entered a payment plan with the IRS by which she paid $1, 000 per month until February 2021, after which she was to pay $23, 000 per month.[6] Pounds asked the trial court to order the filing of the 2017 joint tax return, to deduct $94, 000 (one-half of remaining tax liability) from the equalization judgment, to hold Gonzales responsible for the late penalties and interest, [7]and to require Gonzales to pay one-half of monies she paid to Knox as well as one-half of the attorney's fees she had incurred.

Gonzales asked the trial court to find that Pounds failed to timely pay her installment payments to him and failed to cure the default by paying the full amount once it was accelerated. He also asked the trial court to award to him the full amount held in the trust account from the sale of Pounds's residence as partial payment on the accelerated equalization judgment. Third, he requested that the trial court award him reasonable and necessary attorney's fees as they related to the enforcement motions. Lastly, he asked the trial court to allow him discretion to enter a payment plan with the IRS or to negotiate and pay a lower lump sum to satisfy his tax liability to the IRS.

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At the conclusion of the hearing, the trial court asked each party to submit attorney's fees requests and written closing arguments by the Friday of the following week.

Two months after the hearing, the trial court entered its Order on Motion for Enforcement. In it, it denied the relief Gonzales requested and stated the following:

IT IS ORDERED that the equalization judgment owed from ALICIA POUNDS to JOHN GONZALES under the parties' Agreed Final Decree of Divorce is currently $200, 285.28 (after the payment of $40, 000.00, which JOHN GONZALES has already received).
IT IS ORDERED that the above-mentioned equalization judgment shall be offset by the following judgments against JOHN GONZALES:
a. $86, 237.56 for JOHN GONZALES' one-half of the parties' 2017 tax liability (to be paid directly to the IRS);
b. $30, 572.00 for the penalties and interest accrued on the parties' 2017 taxes since June 15, 2019 (to be paid directly to the IRS);
c. $14, 220.00 for Walters Gilbreath, PLLC's' attorney's fees;
d. $17, 590.00 for Five Stone Tax Advisers' attorney's fees; and
e. $3, 818.25 for JOHN GONZALES' one-half of the fees due to John Knox for preparation of the parties' tax returns.
As a result of the above offset, IT IS THEREFORE ORDERED that the equalization judgment currently due from ALICIA POUNDS to JOHN GONZALES is $47, 847.47. IT IS ORDERED that this amount shall be paid to JOHN GONZALES from the funds currently held in trust with Evans Family Law Group.
IT IS ORDERED that after the payment of $86, 237.56 and $30, 572.00 directly to the IRS from the funds held in trust with Evans Family Law Group, any remaining amount held in Evans Family Law Group trust account shall be paid to ALICIA POUNDS.
ALICIA POUNDS is ORDERED to pay the IRS directly for her one-half of the parties' 2017 tax liability being $86, 237.56, as well as one-half of any
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and all remaining penalties and interest owed on the parties' 2017 taxes after JOHN GONZALES has made his $30, 572.00 payment.

Thereafter, Gonzales filed with the trial court a request for findings of fact and conclusions of law. The court entered its findings and conclusions on January 28, 2021. Gonzales also filed a motion for new trial and a request for a temporary restraining order. Gonzales then appealed the trial court's order, bringing eight issues before this court. Pounds did not favor this court with a brief.

Analysis

Standard of Review

When reviewing a decree of divorce, a trial court's property division is reviewed under an abuse of discretion standard. Swaab v. Swaab, 282 S.W.3d 519, 524 (Tex. App.-Houston [14th Dist.] 2008, pet. dism'd w.o.j.). Likewise, a trial court's ruling on a post-decree motion to enforce or clarify a decree of divorce is reviewed under an abuse of discretion standard. In re Marriage of McDonald, 118 S.W.3d 829, 832 (Tex. App.- Texarkana 2003, pet. denied).

In a family law case, legal and factual sufficiency of the evidence are not independent grounds for reversal, but they are relevant factors in assessing whether the trial court abused its discretion. Moore v. Moore, 383 S.W.3d 190, 198 (Tex. App.- Dallas 2012, pet. ref'd). To determine whether the trial court abused its discretion because the evidence was either...

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