Gulliksen v. Gulliksen
| Decision Date | 06 May 2021 |
| Docket Number | No. 02-20-00203-CV,02-20-00203-CV |
| Parties | JOSEPH GULLIKSEN, Appellant v. BEVERLY JO GULLIKSEN A/K/A BEVERLY JO ROSING, Appellee |
| Court | Texas Court of Appeals |
On Appeal from the 367th District Court Denton County, Texas
Before Kerr, Birdwell, and Walker, JJ.
This is an appeal from an order enforcing a provision of a mediated settlement agreement incorporated into a decree of divorce. The trial court ordered Joseph Gulliksen ("Husband") to pay Beverly Jo Rosing ("Wife") $18,069 as reimbursement for 70% of her federal income tax liability incurred as a result of the liquidation of funds in Husband's pension plan. Husband contends that the court erred (1) by enforcing the decree's reimbursement provision when Wife failed to comply with conditions precedent, (2) by materially altering the terms of the divorce decree, and (3) in the alternative, by miscalculating the amount owed to Wife. We reverse and render.
The facts pertinent to this appeal are undisputed. Husband and Wife entered into a mediated settlement agreement which was incorporated into their October 1, 2015 divorce decree. The decree awarded Wife 100% of the total vested balance of Husband's pension plan ("Plan") and required her to withdraw those funds (with a request to the Plan administrator to withhold up to 25% for estimated federal income taxes) and to deliver the amount received into her attorney's trust fund account. Wife's attorney was required to use those funds to pay certain specified debts owed by Husband and Wife, and then to distribute the remainder, 30% to Wife and 70% to Husband. The decree also allocated the federal income tax liability resulting from liquidating the Plan funds:
According to the briefing in this case, the Plan was liquidated in 2016 and so Wife's deadline to provide the two draft tax returns was June 1, 2017.
Wife, who remarried in 2016, engaged H&R Block to prepare the two draft tax returns. The first draft tax return, which Wife filed with the Internal Revenue Service, was a return filed jointly with her new husband, Keven Rosing. That return included Rosing's wage income, Wife's wage income, Wife's social security disability income, and $101,421, which represented the liquidated Plan funds. The second draft tax return also purported to be a joint return but included only Wife's wage income. It therefore differed from the first draft tax return not only by omitting the liquidated Plan funds, but also by omitting Rosing's income and Wife's social security disability income.
Wife sent these two draft tax returns to Husband before the June 1, 2017 deadline. Husband acknowledged their receipt but informed Wife that he needed adraft tax return including only her income (not Rosing's) and the liquidated Plan funds. Husband and Wife exchanged a series of text messages concerning the required draft tax returns, and Wife returned to H&R Block several times to have new draft tax returns prepared, but "each time they got it wrong."
Wife acknowledged at the trial court hearing that she understood, at least by that time, that the two draft tax returns required by the divorce decree were to be exactly the same except that one would include the liquidated Plan funds and one would not. She also acknowledged that she did not send correct versions of the two required draft tax returns on or before June 1, 2017 and, even at the time of the hearing in February 2020, she had not provided two such drafts. Instead, she retained a forensic accountant to determine how much Husband owed her under the reimbursement provision of the divorce decree.
Larry Settles, Wife's accounting expert, testified that the draft tax returns prepared by H&R Block were incorrect. But he was not hired to prepare correct draft returns. Rather, he was asked simply to calculate the difference between Wife's income tax liability including the liquidated Plan funds and her liability excluding those funds. He accomplished that task in September 2019, which he testified was the first time the correct calculations were made. Settles concluded that the difference in Wife's income tax liability was $25,813.85 and that 70% of that sum was $18,069.70.
Husband testified that he received Settles's expert report in September 2019—over two years after the June 1, 2017 deadline—but that he had never received two draft tax returns fulfilling the divorce decree requirement. He acknowledged that he had not reimbursed Wife for any portion of the tax liability resulting from the liquidated Plan funds and testified that he believed she had waived her right to that reimbursement by failing to provide the required draft returns.
The trial court found that Wife "is entitled to reimbursement from [Husband] in the amount of $18,069.00, which represents 70% of the federal income taxes incurred by [Wife] in connection with the liquidation of the funds in the Plan as set forth in the Final Decree of Divorce." It accordingly granted Wife judgment for that amount.
Husband raises three issues on appeal: (1) the trial court erred by enforcing the reimbursement provision when Wife did not comply with conditions precedent necessary to trigger Husband's obligation to pay; (2) the trial court materially altered the terms of the divorce decree by refusing to credit tax withholdings against Husband's tax liability; and (3) in the alternative, the trial court miscalculated the amount owed to Wife by considering income in excess of that authorized by the divorce decree to calculate Husband's tax liability. For the reasons discussed below, we need only address issue one.
We review a trial court's ruling on a motion to enforce a divorce decree for an abuse of discretion. In re C.F., 576 S.W.3d 761, 774 (Tex. App.—Fort Worth 2019, no pet.); Murray v. Murray, 276 S.W.3d 138, 143 (Tex. App.—Fort Worth 2008, pet. dism'd). But we construe an unambiguous divorce decree as a matter of law. Chafin v. Isbell, No. 02-10-00007-CV, 2011 WL 946653, at *4 (Tex. App.—Fort Worth Mar. 17, 2011, no pet.) (mem. op. on reh'g) (citing Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983)).
"An agreed property division incorporated into a final divorce decree is treated as a contract and is controlled by the rules of construction applicable to ordinary contracts." Howard v. Howard, 490 S.W.3d 179, 184 (Tex. App.—Houston [1st Dist.] 2016, pet. denied) (citing Allen v. Allen, 717 S.W.2d 311, 313 (Tex. 1986)). The court's task is to give effect to the parties' intention as expressed in the agreement. Waldrop v. Waldrop, 552 S.W.3d 396, 407 (Tex. App.—Fort Worth 2018, no pet.) (citing El Paso Field Servs., L.P. v. MasTec N. Am., Inc., 389 S.W.3d 802, 805 (Tex. 2012)). To accomplish that task, we give effect to the entire agreement so that none of its provisions are rendered meaningless. Id.; Howard, 490 S.W.3d at 184. In addition, "[w]e will not construe contracts to produce an absurd result when a reasonable alternative construction exists." Markel Ins. Co. v. Muzyka, 293 S.W.3d 380, 387 (Tex.App.—Fort Worth 2009, no pet.); accord S. Cty. Mut. Ins. v. Sur. Bank, N.A., 270 S.W.3d 684, 689 (Tex. App.—Fort Worth 2008, no pet.).
Contract construction begins with the express language of the agreement. See Perry v. Perry, 512 S.W.3d 523, 527-28 (Tex. App.—Houston [1st Dist.] 2016, no pet.) (citing Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011)). "If the written instrument is so worded that it can be given a certain or definite legal meaning or interpretation, then it is not ambiguous and the court will construe the contract as a matter of law." Coker, 650 S.W.2d at 393. An agreement is not ambiguous merely because the parties offer different interpretations of its language. Grain Dealers Mut. Ins. Co. v. McKee, 943 S.W.2d 455, 458 (Tex. 1997); Waldrop, 552 S.W.3d at 408. It is ambiguous only if its language is "susceptible to two or more reasonable interpretations." Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 465 (Tex. 1998) (emphasis added); see Waldrop, 552 S.W.3d at 408.
Husband contends that the reimbursement provision required Wife to use a licensed tax preparer to prepare two draft federal income tax returns that included only her income (not Rosing's) and that differed only in that one would include the taxable amount of the liquidated Plan funds and the other would not. In addition, Wife was required to furnish those draft tax returns to Husband on or before June 1, 2017. He urges that Wife did not comply with any of these requirements.
Wife, on the other hand, contends that she was not required to use a "licensed income tax preparer" because that term was not defined in the decree and has no commonly understood meaning. She also contends that the decree required only that she furnish one draft tax return that...
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