In re In re Mcnelly
| Decision Date | 15 May 2014 |
| Docket Number | NO. 14-13-00281-CV,14-13-00281-CV |
| Parties | IN THE MATTER OF THE MARRIAGE OF LISA MARIE MCNELLY AND STEPHEN E. MCNELLY AND IN THE INTEREST OF A.M.M, A CHILD |
| Court | Court of Appeals of Texas |
Affirmed in part; Reversed in part; and Memorandum Opinion filed May 15, 2014.
On Appeal from the 18th District Court
Somervell County, Texas
In this divorce suit between Stephen E. McNelly and Lisa Marie McNelly, Mr. McNelly challenges the trial court's divorce decree in five issues. First, Mr. McNelly alleges that the trial court erred when it characterized as community property the proceeds from the sale of his separate-property business that were deposited into joint accounts at brokerage firms. Second, Mr. McNelly alleges that the trial court erred when it characterized certain paintings as community property.Third, Mr. McNelly alleges that the trial court erred when it awarded Mrs. McNelly a $60,000 judgment because the couple's premarital agreement proscribed reimbursement awards. Fourth, Mr. McNelly alleges that the trial court erred when it declined to award him attorney fees. Lastly, Mr. McNelly alleges that the trial court erred when it declined to impose a geographic restriction on Mrs. McNelly, the primary joint managing conservator. We affirm in part and reverse and remand in part.1
We present only the basic facts here, reserving detailed presentation of the facts for our discussion of each issue. Mr. McNelly and Mrs. McNelly executed a premarital agreement on July 17, 2008 and were married on July 22, 2008. Mrs. McNelly had a daughter, A.M.M., from a previous relationship. Mr. McNelly adopted A.M.M. in May 2010. When Mr. McNelly and Mrs. McNelly married, Mr. McNelly owned and operated Rockin R Gasworks. The couple owned real and personal property prior to the marriage, and they accumulated various items of personal property during the marriage.
Mrs. McNelly filed a petition for divorce on November 29, 2010. Mr. McNelly answered on December 7, 2010 and filed a counter-petition for divorce on December 22, 2010. The couple presented their respective cases to the trial court, and the trial court signed a final decree of divorce on November 21, 2012. On December 21, 2012, Mrs. McNelly and Mr. McNelly filed separate motions for new trial, both of which were denied. The trial court signed findings of fact and conclusions of law on January 23, 2013. On February 19, 2013, Mr. McNellytimely filed his notice of appeal.
I. Whether the trial court abused its discretion when, as a result of its interpretation of the couple's premarital agreement, it characterized as community property the proceeds from the sale of Mr. McNelly's business that were deposited into joint brokerage accounts.
The trial court found that Mr. McNelly owned and operated Rockin R Gasworks prior to the marriage, making Mr. McNelly's interest in Rockin R Gasworks separate property. See Tex. Const. art. XVI, § 15; Tex. Fam. Code Ann. § 3.001 (defining separate property), § 3.002 (defining community property) (West 2006). In September 2008, Mr. McNelly sold his interest in Rockin R Gasworks for $1.3 million, and the couple deposited the proceeds into several accounts held at several different financial institutions. Of the $1.3 million, $50,000 was deposited into a Wells Fargo joint savings account. Another $50,000 was deposited into a Wells Fargo joint checking account. The character of the $100,000 deposited into the Wells Fargo accounts is not at issue in this case. Of the remaining $1.2 million, $600,000 was deposited into a brokerage account with Charles Schwab & Co., Inc. ("Schwab"), and $600,000 was deposited into a brokerage account with Fidelity Brokerage Services, LLC ("Fidelity"). Schwab and Fidelity are broker-dealers registered with the Securities Exchange Commission. See Annual Audited Report for Period Beginning 1/1/13 and Ending 12/31/13, Fidelity Brokerage Services, LLC, at 3, http://www.sec.gov/Archives/edgar/vprr/14/9999999997-14-001816; Annual Audited Report for Period Beginning 01/01/12 and Ending 12/31/12, Charles Schwab & Co, Inc., at 3, http://www.sec.gov/Archives/edgar/vprr/13/9999999997-13-002328. The trial court's characterization of the deposits into the Fidelity and Schwab accounts is at issue in this case.
The trial court concluded that "[t]he parties . . . converted separate property funds, i.e., the $1,300,000 received by Stephen E. McNelly from the sale of Rockin R Gasworks, to community property." This conversion "was accomplished by the deposit of funds received by Stephen R. [sic] McNelly from the sale of his separate property business into joint accounts pursuant to the prenuptial agreement executed by Lisa Marie McNelly and Stephen E. McNelly on July 17, 2008, and the comingling of said funds with other community funds." (emphasis added). Mr. McNelly argues that the trial court divested him of his separate property when it characterized the $1.2 million deposited into joint "brokerage" accounts as community property. Mrs. McNelly responds that the court properly characterized the disputed funds as community property because they were deposited into joint "bank" accounts.
Courts employ a two-part test when reviewing alleged characterization errors. See Jurek v. Couch-Jurek, 296 S.W.3d 864, 873 (Tex. App.—El Paso 2009, no pet.). Application of this test requires both a showing of error and a showing that the error was harmful. Id.; see Boyd v. Boyd, 131 S.W.3d 605, 617-18 (Tex. App.—Fort Worth 2004, no pet.). A characterization error is harmful if it causes the trial court to abuse its discretion in dividing the community estate. Jurek, 296 S.W.3d at 873; Boyd, 131 S.W.3d at 617.
To determine whether the trial court erred in this case, we must ascertain the effect of the premarital agreement on the couple's property interests.2 Courts interpret premarital agreements like other written contracts. Williams v. Williams, 246 S.W.3d 207, 210 (Tex. App.—Houston [14th Dist.] 2007, no pet.); see McClary v. Thompson, 65 S.W.3d 829, 837 (Tex. App.—Fort Worth 2002, pet.denied). The court's primary concern is ascertaining the intent of the parties as expressed in the instrument. Reeder v. Wood Cnty. Energy, LLC, 395 S.W.3d 789, 794 (Tex. 2012). All contractual provisions must be considered with reference to the whole instrument. Williams, 246 S.W.3d at 210. Contract terms are given their plain and ordinary meaning unless the instrument indicates the parties intended a different meaning. Reeder, 395 S.W.3d at 794-95. The parties' intent is governed by what is in the contract, not by what one party contends it intended but failed to say and not by whether the contract was wisely made. U.S. Denro Steels, Inc. v. Lieck, 342 S.W.3d 677, 682 (Tex. App.—Houston [14th Dist.] 2011, pet. denied); Jamestown Partners, L.P. v. City of Fort Worth, 83 S.W.3d 376, 382 (Tex. App.— Fort Worth 2002, pet. denied). The court cannot rewrite or add to the contract's language. Am. Mfrs. Ins. Co. v. Schaefer, 124 S.W.3d 154, 162 (Tex. 2003). Courts construe marital property agreements narrowly in favor of the community estate. Fischer-Stoker v. Stoker, 174 S.W.3d 272, 278-79 (Tex. App.—Houston [1st Dist.] 2005, pet. denied).
Although neither party contends on appeal that the premarital agreement is ambiguous, the question of a contract's ambiguity is one 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 entered. Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex. 1995) (per curiam); May v. Buck, 375 S.W.3d 568, 579 (Tex. App.—Dallas 2012, no pet.) (court can conclude contract is ambiguous even in absence of such a pleading by either party); see also Mescalero Energy, Inc. v. Underwriters Indem. Gen. Agency, Inc., 56 S.W.3d 313, 322-323 (Tex. App.— Houston [1st Dist.] 2001, pet. denied) (). When a potential ambiguity arises, deciding whether the language is ambiguous is an issue ofcontract interpretation. Burlington N. & Santa Fe Ry. Co. v. S. Plains Switching, Ltd., 174 S.W.3d 348, 356 (Tex. App.—Fort Worth 2005, no pet.). Parol evidence is not admissible for the purpose of creating an ambiguity. Id. at 358. A contract is not ambiguous when the language can be given a definite or certain meaning as a matter of law. See Lopez v. Munoz, Hockema & Reed, L.L.P., 22 S.W.3d 857, 861 (Tex. 2000); Nat'l Union Fire Ins. Co., 907 S.W.2d at 520; Burlington, 174 S.W.3d at 356. We will not find an ambiguity simply because the parties disagree about the contract's meaning. FPL Energy, LLC v. TXU Portfolio Mgmt. Co., L.P., — S.W.3d —, No. 11-0050, 2014 WL 1133329, at *3 (Tex. March 21, 2014). If the written instrument permits the court to ascertain a definite interpretation as to which one of two possible meanings is proper, the contract is not ambiguous, and the court will interpret the contract as a matter of law. Williams, 246 S.W.3d at 211; Burlington, 174 S.W.3d at 356 (citing R&P Enters. v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 518-19 (Tex. 1980)). If the meaning of a contract is uncertain and doubtful or reasonably susceptible to more than one meaning, however, the contract is ambiguous and its meaning must be resolved by the factfinder. Williams, 246 S.W.3d at 211; Burlington, 174 S.W.3d at 356. The construction of an unambiguous contract is a question of law for the court and is reviewed de novo. MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 650-51 (Tex. 1999).
The relevant portions of the premarital agreement provide:
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