Opinion
No. 02-17-00469-CV
05-30-2019
BRYAN P. BERNARD, Appellant v. DORIS W. BERNARD, Appellee
On Appeal from the 233rd District Court Tarrant County, Texas
Trial Court No. 233-571359-15 Before Kerr, Pittman, and Birdwell, JJ.
MEMORANDUM OPINION
Appellant Bryan P. Bernard appeals from the trial court's October 4, 2017 judgment awarding his ex-wife Appellee Doris W. Bernard attorney's fees and "the balance of the Lincoln American Legacy II Variable Annuity account" (the Lincoln Annuity), which had not been expressly divided in their January 25, 2001 Agreed Final Decree of Divorce (Divorce Decree). In four issues, Bryan challenges certain of the trial court's findings of fact and conclusions of law as well as the award of attorney's fees. Because we hold that the Lincoln Annuity was community property not divided in the divorce, that Doris filed suit within the applicable two-year limitations period, and that the trial court did not abuse its discretion by awarding her attorneys' fees or the Lincoln Annuity after the post-decree proceeding, we affirm the trial court's judgment.
BACKGROUND FACTS
I. Doris's Former Broker Testified That an Annuity Is a Contract.
Bryan was Doris's Edward Jones broker until shortly after the divorce; her brother Joe replaced him in 2001. Joe's son Doug replaced Joe at his retirement in 2008. At the August 2017 post-decree proceeding, Doug, no longer Doris's Edward Jones broker, defined an annuity:
It is a legal contract between an insurance company and an investor that they enter into together where the investor puts in a certain amount of money and then, depending on the type of annuity, receive[s] some benefits, some of which are guaranteed by the insurance company.
II. Bryan Bought the Lincoln Annuity During the Marriage and Named Doris Its Beneficiary.
In March 1993 while Bryan and Doris were married, Bryan paid Lincoln National Life Insurance Company $19,587.92 to begin the Lincoln Annuity contract; its maturity date is in November 2041. Bryan is the listed owner and annuitant; Doris is the listed beneficiary. Edward Jones is not a party to the contract.
III. The Lincoln Annuity Was Not Held by Edward Jones; It Was Linked to the Couple's Joint Account During the Marriage.
In the months preceding the January 2001 divorce and the month of the divorce, the Lincoln Annuity was listed on the parties' Edward Jones joint-account statement under "Your Assets Held Outside Edward Jones."
IV. Doris Included the Lincoln Annuity in Her Inventory; Bryan Included Its Value in His Inventory.
While the divorce was pending, Doris expressly included the Lincoln Annuity as community property in her September 2000 inventory and appraisement (inventory) in the "Annuities (non IRA's)" subsection of "Insurance and Annuities." She noted in her inventory that Bryan owned the Lincoln Annuity. Bryan did not expressly include the Lincoln Annuity in his inventory but testified at the August 2017 post-decree proceeding that it was fair to assume that he had included the Lincoln Annuity's value in his valuation of the Edward Jones joint account because the Lincoln Annuity was linked to that account. Bryan did not list separate property in his inventory.
V. Neither the Mediated Settlement Agreement (MSA) nor the Divorce Decree Named the Lincoln Annuity.
In the Divorce Decree, Wife was awarded as her sole and separate property:
W-5. All funds on deposit, together with accrued but unpaid interest, in the following banks, savings institutions, or other financial institutions:VI. After the Divorce, the Edward Jones Joint Account Was Closed, and the Lincoln Annuity's Linking Information Began Appearing on Doris's Statements for Her Edward Jones Individual Account.
a. . . . .
b. [The] Edward Jones [Joint]Account . . . , subject to a prohibition by both parties from margining, transferring, selling or withdrawing any funds . . . from December 5, 2000.
The Edward Jones joint-account statement covering the month immediately following the divorce, January 27, 2001 through February 23, 2001, does not mention the Lincoln Annuity.
Doris's Edward Jones individual-account statement does not include the Lincoln Annuity during the month of the divorce, but in her individual-account statement covering January 27, 2001 through February 23, 2001—the month immediately following the divorce—the Lincoln Annuity appears on the list entitled, "Your Assets Held Outside Edward Jones."
The boilerplate of many of the Edward Jones statements from both the joint account and Doris's individual account that are included in the admitted exhibits from the post-decree proceeding provides:
TERMINOLOGY
. . . .
Your Assets Held Outside Edward Jones
These balances are provided for informational purposes only to give you an overall picture of your investments with Edward Jones. No SIPC [Securities Investor Protection Corporation] coverage is extended to assets held outside the custody of Edward Jones. Please refer to the statement received directly from these companies for details.
VII. Almost Thirteen Years After Their Divorce, Bryan Unlinked the Lincoln Annuity From Doris's Edward Jones Individual Account at Her Broker's Request.
Doug testified that in or around the third fiscal quarter of 2014, he decided the Lincoln Annuity needed to be retitled in order for it to remain linked to Doris's individual account. He was working under the impression that Doris had received the Lincoln Annuity in the divorce based upon what he had previously been told. He called her and explained that the Lincoln Annuity would need to be retitled in her name for it to remain linked to her Edward Jones individual account. Doug asked Doris for a copy of the Divorce Decree. She sent him a copy of the Divorce Decree, and he forwarded the document on to his field supervisor, who sent a copy to Lincoln National. According to Doug, Lincoln National was "responsible for changing the inherent details of the [Lincoln Annuity]." Upon review of the Divorce Decree, Lincoln National "determined that nowhere in there did it say that [the Lincoln Annuity] needed to be retitled, which they could do based on the decree if it would have said that." Doug's field supervisor told him that Lincoln National had determined that Bryan owned the Lincoln Annuity, so Doug concluded it needed to be unlinked from Doris's account. Doug called Bryan and asked him to unlink the Lincoln Annuity from Doris's Edward Jones individual account. Doug also notified Doris of what had transpired. "She was extremely not happy . . . and frustrated that she felt like that was money she thought was hers." Bryan complied with Doug's request, naming himself and his then brokerage-firm employer as the Lincoln Annuity's broker.
VIII. Doris Sued Bryan, and the Trial Court Awarded Her the Balance of the Lincoln Annuity and Attorney's Fees.
Doris's lawyer sent Bryan a demand letter with no results, and in February 2015, Doris sued Bryan by filing a petition to enforce their property division, including claims of breach of contract, conversion, and breach of fiduciary duty. Alternatively, she sought the division of a previously undivided community asset. Bryan filed a general denial and raised affirmative defenses including "the applicable statute of limitations." Both parties requested an award of attorney's fees under Chapter 9 of the Texas Family Code.
The trial court awarded Doris the balance of the Lincoln Annuity and attorney's fees. After the proceeding and at Bryan's request, the trial court issued the following findings of fact and conclusions of law:
Findings of Fact
1. Doris . . . and Bryan . . . were divorced by this Court on January 25, 2001, by Agreed Final Decree of Divorce in Cause # 233-303731-00 . . . .
2. Pursuant to that Agreed Final Decree of Divorce, Doris . . . was awarded the Edward Jones [Joint] Account . . . .
3. The Lincoln . . . Annuity . . . was a part of and included in the Edward Jones [Joint]Account . . . .
4. The fact that the Lincoln . . . Annuity['s] . . . ownership was in question did not occur until the summer of 2014.
5. Doris . . . did not discover until the summer of 2014 that Bryan . . . was claiming he owned the Lincoln . . . Annuity . . . and that it had not been awarded to Doris . . . in the Agreed Final Decree of Divorce as part of the Edward Jones [Joint] account . . . .
6. In the Agreed Final Decree of Divorce, the Lincoln . . . Annuity . . . was not listed under property specifically awarded to Bryan P. Bernard.
7. Doris W. Bernard incurred attorney's fees and costs in the amount of $25,756.00 for representation in this suit.
8. The attorney's fees incurred by [Doris] were reasonable and necessary.
Conclusions of Law
1. The Court has jurisdiction of the parties and of the subject mat[ter] of this case.
2. The Statue of Limitations defense did not apply because of the Discovery Rule.
3. The Lincoln . . . Annuity . . . was a part of and included in [the] Edward Jones [Joint] Account . . . .
4. Even if [the] Lincoln . . . Annuity . . . had not been included in [the] Edward Jones [Joint] Account[,] said annuity was an undivided community asset of the marriage of the parties subject to the Court[']s discretionary power under Texas Family Code Section 9.203.
5. The Court has the authority to award reasonable attorney's fees pursuant to Texas Family Code Section 9.014[.]
6. The Court has the authority to allocate costs pursuant to Texas Family Code Section 9.013.
DISCUSSION
I. We Review the Trial Court's Ruling for an Abuse of Discretion.
In Bryan's first three issues, he challenges the legal sufficiency of the evidence supporting the trial court's fourth and fifth findings of fact, and he also challenges the trial court's second and fourth conclusions of law. But we review a trial court's post-decree division of property for an abuse of discretion. Lajzerowicz v. Lajzerowicz, No. 04-16-00491-CV, 2018 WL 626593, at *4 (Tex. App.—San Antonio Jan. 31, 2018, pet. denied) (mem. op.); see, e.g., Sheldon v. Sheldon, No. 03-11-00803-CV, 2013 WL 6175586, at *3 (Tex. App.—Austin Nov. 22, 2013, no pet.) (mem. op). When we review a trial court's order for an abuse of discretion, the trial court's findings of fact and conclusions of law help us by showing how the trial court reached its decision. Chrysler Corp. v. Blackmon, 841 S.W.2d 844, 852 (Tex. 1992); Samuelson v. United Healthcare of Tex., Inc., 79 S.W.3d 706, 710 (Tex. App.—Fort Worth 2002, no pet.). However, we are not bound by them; rather, we independently review the record to determine whether the trial court abused its discretion. Chrysler Corp., 841 S.W.2d at 852-53; Fernandez v. Manwani, No. 04-16-00562-CV, 2017 WL 4272352, at *2 (Tex. App.—San Antonio Sept. 27, 2017, no pet.) (mem. op.). Because we are not bound by the trial court's findings of fact and conclusions of law, we do not need to resolve any conflicts therein. Cf. Am. Fisheries, Inc. v. Nat'l Honey, Inc., No. 01-17- 00340-CV, 2018 WL 3733254, at *13 (Tex. App.—Houston [1st Dist.] Aug. 7, 2018, pet. denied) (stating in sanctions case, "[W]e have determined that the trial court did not abuse its discretion . . . . Accordingly, we need not address these particular findings or conclusions of the trial court.").
A trial court abuses its discretion if it acts without reference to any guiding rules or principles, that is, if its act is arbitrary or unreasonable. Low v. Henry, 221 S.W.3d 609, 614 (Tex. 2007); Cire v. Cummings, 134 S.W.3d 835, 838-39 (Tex. 2004). When reviewing a trial court's family-law decision for an abuse of discretion, legal and factual insufficiency are not independent reversible grounds of error but are relevant factors. Neyland v. Raymond, 324 S.W.3d 646, 649 (Tex. App.—Fort Worth 2010, no pet.). Accordingly, in determining whether an abuse of discretion has occurred because the evidence is legally or factually insufficient to support the trial court's decision, we engage in a two-pronged inquiry: (1) did the trial court have enough information upon which to exercise its discretion and (2) did the trial court err in applying its discretion. Id. The applicable sufficiency review comes into play in answering the first question. Id. at 649-50. Concerning the second question, we determine, based on the elicited evidence, whether the trial court made a reasonable decision. Id. at 650.
II. The Lincoln Annuity Was Not Divided in the Divorce Decree.
An agreed divorce decree is a contract subject to the usual rules of contract construction. McGoodwin v. McGoodwin, 671 S.W.2d 880, 882 (Tex. 1984) (op. on reh'g); In re W.L.W., 370 S.W.3d 799, 804 (Tex. App.—Fort Worth 2012, orig. proceeding [mand. denied]). As this court explained more than a decade ago,
When an appellate court concludes that contract language can be given a certain or definite meaning, then the language is not ambiguous, and the appellate court is obligated to interpret the contract as a matter of law. A contract is not ambiguous merely because parties to an agreement have different interpretations of a term or phrase.Loaiza v. Loaiza, 130 S.W.3d 894, 905 (Tex. App.—Fort Worth 2004, no pet.) (citations omitted).
The Divorce Decree did not award Bryan the Lincoln Annuity. The Divorce Decree expressly awarded Doris a Hartford Annuity and an AUL Annuity and confirmed as separate property any future interest in a Sun America Annuity. The Divorce Decree also awarded Doris all the funds on deposit in the Edward Jones joint account. As a matter of law, however, the Lincoln Annuity linked to that account was not a fund, and it was not "in" the joint account or any other Edward Jones account. It was a contract held by Lincoln National. See Tex. Ins. Code Ann. § 1108.002; see, e.g., U.S. S.E.C., Annuities, Fast Answers, https://www.sec.gov/fast-answers/answersannuityhtm.html (last visited May 24, 2019). "[W]e may neither rewrite the parties' contract nor add to its language." Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 162 (Tex. 2003); Luna v. Bennett, No. 05-16-00878-CV, 2018 WL 5993902, at *4 (Tex. App.—Dallas Nov. 15, 2018, no pet.) (mem. op.) (citing Schaefer). We therefore hold, as a matter of law, that the Lincoln Annuity was not divided or awarded in the Divorce Decree.
III. The Trial Court Did Not Abuse Its Discretion by Awarding the Lincoln Annuity to Doris.
We further hold that the trial court did not abuse its discretion by characterizing the Lincoln Annuity as a community asset. See Vickery v. Vickery, 999 S.W.2d 342, 370 (Tex. 1999) (stating standard of review); Todd v. Todd, 173 S.W.3d 126, 128 (Tex. App.—Fort Worth 2005, pet. denied). Property possessed by either spouse during or on dissolution of the marriage is presumed to be community property. Tex. Fam. Code Ann. § 3.003(a). That presumption may only be rebutted by clear and convincing evidence. Id. § 3.003(b). Bryan has not done so. First, the Lincoln Annuity was purchased during the marriage. Second, the Lincoln Annuity was linked to the couple's joint account. Third, while Doris listed Bryan as the owner of the Lincoln Annuity in her inventory and appraisement prepared and filed for the divorce, she did so along with providing the Lincoln Annuity's information in the "Community Estate of the Parties" section and stated that Bryan had no separate property. Fourth, the trial court could have properly inferred from Bryan's testimony that in his inventory and appraisement filed for the divorce, he included the Lincoln Annuity's value in the Edward Jones joint account (listed in the "Community Estate of the Parties" section). Fifth, Doris testified that the Lincoln Annuity's value was included in the spreadsheets used in their MSA negotiations.
Bryan does not argue that the trial court's award of the Lincoln Annuity to Doris was not just and right. Even so, in an abundance of caution, we hold that the trial court did not abuse its discretion by awarding the Lincoln Annuity to Doris. See Tex. Fam. Code Ann. § 9.203 (allowing the trial court to divide community property not divided in the divorce "in a manner that the court deems just and right"). In addition to the evidence listed above, Doris testified at the post-decree proceeding:
• The Lincoln Annuity was valued between $50,000 and $60,000 at the time of the divorce;The trial court also had both inventories before it in the post-decree proceeding. Accordingly, the trial court's post-decree award of the Lincoln Annuity to Doris was not an abuse of discretion. See Lajzerowicz, 2018 WL 626593, at *5. We therefore overrule Bryan's third issue challenging the trial court's fourth conclusion of law that "[e]ven if [the] Lincoln . . . Annuity . . . had not been included in [the joint][a]ccount . . . said annuity was an undivided community asset of the marriage of the parties subject to the Court[']s discretionary power under Texas Family Code Section 9.203."
• She believed the settlement and property division had been fair and equitable, but she would not have believed they had been fair and equitable if the Lincoln Annuity had not been in her column;
• She believed that she was getting the Lincoln Annuity as part of the MSA and property division in the divorce; and
• She would not have settled the divorce if she had known that she was not getting the Lincoln Annuity.
IV. Doris's Suit Was Not Barred by Limitations.
Section 9.201 of the Texas Family Code allows a former spouse to file a suit to divide property not divided or awarded in the divorce decree. Tex. Fam. Code Ann. § 9.201(a). Such suit "must be filed before the second anniversary of the date a former spouse unequivocally repudiates the existence of the ownership interest of the other former spouse and communicates that repudiation to the other former spouse." Id. § 9.202. Bryan does not argue that he unequivocally repudiated Doris's ownership interest in the Lincoln Annuity and communicated that repudiation to her. Further, the evidence supports the opposite result. Doris testified at the August 2017 post-decree proceeding:
• Bryan signed a letter of authorization on January 18, 2001 directing Edward Jones to transfer the joint account to her;
• "Transfer" and "100 percent of the assets to the account listed below" are checked on the letter;
• Before the divorce, the Lincoln Annuity appeared in a section on the Edward Jones joint-account statement entitled "Your Assets Held Outside Edward Jones";
• After the divorce and after she closed the joint account, she received statements for her individual account from Edward Jones until 2014, and each one mentioned the Lincoln Annuity in the section "Assets Held Outside Edward Jones";
• Doris believed that the Lincoln Annuity had been transferred over to her because it was linked to her Edward Jones individual-account statement;
• Before August 2014, neither Bryan, nor Edward Jones, nor Lincoln National had ever told her verbally or in writing that the Lincoln Annuity did not belong to her;
• Edward Jones had never told her there was a problem with the Lincoln Annuity being linked to her individual account before the summer of 2014;
• Bryan did not say or do anything until the summer of 2014 to remove the link from the Lincoln Annuity to her Edward Jones individual account; and
• Doug told her in the summer of 2014 that the Lincoln Annuity was linked to her Edward Jones individual account but had Bryan's name on it; the name of the Lincoln Annuity's owner had not been changed to hers.
Doug testified that in the summer of 2014, he called Bryan and asked him to unlink the Lincoln Annuity from Doris's Edward Jones individual account. Doug also notified Doris of what had transpired. "She was extremely not happy . . . and frustrated that she felt like that was money she thought was hers." Bryan complied with Doug's request, naming himself and his then brokerage-firm employer as the Lincoln Annuity's broker before the 2014 third-quarter statement was issued. Doris sued in February 2015, less than six months later.
Accordingly, we hold that Doris's suit is not barred by limitations. See Contreras v. Contreras, No. 04-08-00607-CV, 2009 WL 36305, at *1 (Tex. App.—San Antonio Jan. 7, 2009, no pet.) (mem. op.) ("[N]othing in the record shows appellee either unequivocally repudiated the existence of appellant's ownership interest in his retirement benefits or that he communicated such a repudiation to her."); Sagester v. Waltrip, 970 S.W.2d 767, 769 (Tex. App.—Austin 1998, pet. denied) ("Absent unequivocal repudiation, the partition suit can be filed long after the divorce."). We overrule Bryan's first two issues, which challenge the discovery-rule evidence and conclusions of law related to other alleged bases for the trial court's ruling, as moot.
V. The Trial Court Did Not Abuse Its Discretion by Awarding Doris Attorney's Fees.
In his fourth issue, Bryan contends that the award of attorney's fees was incorrect as a matter of law only because Doris's substantive claims were time-barred under an alternate basis for the trial court's ruling. He does not otherwise challenge the attorney's fees. We have already held that Doris's suit was not time-barred under the appropriate statute, section 9.202 of the Texas Family Code. Tex. Fam. Code Ann. § 9.202. Section 9.205 of the Texas Family Code allows the trial court to award "reasonable attorney's fees" in a post-decree division of previously undivided property. Id. § 9.205. We review such an award for an abuse of discretion. See Stirling v. Stirling, No. 02-10-00329-CV, 2011 WL 3211242, at *3 (Tex. App.—Fort Worth July 28, 2011, no pet.) (mem. op.). The attorneys stipulated to the qualifications of the attorneys, the amount of both parties' attorney's fees, and the necessity and reasonableness of both parties' attorney's fees. See Alcedo v. Alcedo, No. 02-17-00451-CV, slip op. at 8 (Tex. App.—Fort Worth May 30, no pet. h.) (mem. op.), available at http://www.search.txcourts.gov/Docket.aspx?coa=coa02&FullDate=05/30/2019. Accordingly, we hold that the trial court did not abuse its discretion by awarding Doris attorney's fees. See Messina v. Messina, No. 01-07-00277-CV, 2008 WL 2854191, at *5 (Tex. App.—Houston [1st Dist.] July 24, 2008, pet. denied) (mem. op.). We overrule Bryan's fourth issue.
CONCLUSION
Having overruled Bryan's four issues, we affirm the trial court's judgment.
/s/ Mark T. Pittman
Mark T. Pittman
Justice Delivered: May 30, 2019