George Dale Brown, Jr. v. Teresa Lynn Brown

Opinion issued July 6, 2007

Opinion issued July 6, 2007

In The

Court of Appeals

For The

First District of Texas

NO. 01-05-1063-CV

GEORGE DALE BROWN, JR., Appellant

V.

TERESA LYNN BROWN, Appellee

On Appeal from the 309th District Court

Harris County, Texas

Trial Court Cause No. 2004-35186

O P I N I O N

George Dale Brown appeals the trial

court’s denial of his petition for a post-divorce division of his former wife

Teresa’s 401(k) plan and employment performance bonuses she had accrued but not

received by the date of the divorce, as well as the court’s post-divorce

apportionment of her pension benefits.

As the trial court correctly concluded, res judicata bars George’s claims

against Teresa’s 401(k) plan and bonuses.

The trial court also acted within its discretion in making a just and

right division of the pension benefits earned during the marriage. We therefore affirm.

Background

George Dale Brown and Teresa Lynn

Payne (formerly Brown) divorced in June 2004.

During the marriage, Teresa gained employment with Purdue Pharma, L.P. Her position with the company entitles her to

discretionary performance-related bonuses, which she receives on a quarterly

basis. The retirement benefits provided

to her by Purdue Pharma include both a 401(k) retirement plan and a pension

plan. About a year before the divorce,

Teresa had taken out a loan through her employer against her 401(k) plan. On the date of divorce, the outstanding loan

amounted to approximately $20,000.

As instructed by the trial court,

George and Teresa each submitted an inventory itemizing the community assets

and liabilities and proposing their apportionment. The court also considered additional evidence

of the community estate. With respect to

her bonuses, Teresa testified at the divorce proceeding as follows:

Q: Okay. While we are on the inventory and discussing

money, you are to get a bonus for the fourth quarter of 2003; is that correct?

A: Uh-huh.

Q: Okay. And then you’ve got a bonus that will be

accrued possibly for the first quarter of 2004 and you won’t know about that

until June; is that correct?

A: That’s

correct.

On March 22, 2004, the court ruled on

the division of marital estate. The

associate judge handling the case prepared a report summarizing the terms of the

divorce and containing a chart dividing the property assets and liabilities

between the parties. To construct the

chart, the associate judge began with a copy of George’s inventory and proposed

property division and then interlineated it when his decisions deviated from

George’s proposals. Among the proposals

rejected or altered by the court were:

(1) An item entitled “Unaccounted Deposits from Wife’s

Earnings for 2002 and 2003” in the approximate amount of $10,000, which the

court struck in its entirety;

(2) An item entitled “Wife’s Chase Bank Checking Account”

in the amount of $5,811.00, which the court reduced to $1,000, the amount

reflected on Teresa’s inventory;

(3) An item entitled “Wife’s Fidelity Investments 401(k)

Plan,” in the amount of $160,000, in which George proposed that he and Teresa

be awarded equal shares of $80,000 each.

The trial court struck George’s estimated value, inserted the $136,000

estimated value from Teresa’s inventory sheet, struck the proposed award to

George and wrote the $136,000 in the chart as an award to Teresa.

The associate judge’s notes also

state: “H’s request for language re furnishings,

tax related documents, disposition of bonuses and excess 401(k) is denied.”

The

trial court signed the final divorce decree on June 2, 2004. [1] Neither

party sought any postjudgment relief or noticed an appeal from the divorce

decree. Thirty-four days later, on July

6, 2004, George petitioned the trial court for a post-divorce division of

property, asking that that the court apportion and award him funds from (a)

Teresa’s pension plan which she allegedly failed to disclose; (b) Teresa’s

401(k) Plan, which, he contended, was worth substantially more than she had

represented during the divorce; and (c) bonuses earned by Teresa during the fourth

quarter of 2003, which she also allegedly failed to disclose.

The trial court heard evidence in the

cause on May 26, 2005 and June 9, 2005.

In its July 14, 2005 judgment, the court found that Teresa’s pension

plan was not divided at the time of the parties’ divorce and awarded George 40%

of the benefits accrued in that pension plan during the marriage. In addressing George’s remaining challenges

concerning Teresa’s employment income and benefits, the trial court ordered Teresa

to be “awarded one hundred percent (100%)” and declared that “George Dale Brown

is divested of his interest in all sums contained within Teresa Lynn Brown’s

401(k) Retirement Plan with Purdue Pharma.”

Also, the trial court dismissed with prejudice George’s claim relating

to Teresa’s bonuses.

On September 12, 2005, the trial

court issued findings of fact and conclusions of law in response to George’s

request. Pertinent to this appeal, the

court concluded that “[a]ll of Teresa’s interest in the 401(k) Plan was disposed

of at the time of trial and no post divorce division is appropriate.” The trial court also concluded that George’s

claims against Teresa’s fourth quarter 2003 and first quarter 2004 employee

bonuses were barred by res judicata.

This appeal followed.

Discussion

The Family Code authorizes a trial

court to order the post-divorce division of community property which was not divided in a

final divorce decree. See Tex.

Fam. Code Ann . § 9.201 (Vernon 2006). “Either former spouse may file a

suit as provided by this subchapter to divide property not divided or awarded to a spouse in a final decree of

divorce or annulment.” Id.

§ 9.201(a). “If a court of this state failed to dispose of property subject to division in a final decree of divorce

or annulment even though the court had jurisdiction over the spouses or over

the property , the court shall

divide the property in a manner

that the court deems just and right . . . .” Id. § 9.203(a) (Vernon 2006).

The Family Code also allows a court

to enter further orders to enforce the division

of property ; to assist in the

implementation of the order; to clarify the order; and to “specify more

precisely the manner of effecting the property

division previously made,” as

long as the substantive division

of property is not altered or changed.

Tex. Fam. Code Ann . § 9.006(a),

(b) (Vernon 1998); Cox v. Carter , 145 S.W.3d 361, 364 (Tex. App.—Dallas 2004, no pet.). A subsequent order may clarify a decree to

correct an ambiguity so that the parties to that decree may comply with its

terms. See Tex. Fam. Code Ann .

§ 9.008(b) (Vernon

(2006) (court may enter “clarifying order” to enforce compliance with

insufficiently specific decree); Tex.

Fam. Code Ann . § 9.006(a), (b) (Vernon 2006) (court may “render further

orders to enforce the division

of property made in the decree .

. . to assist in the implementation of or to clarify the prior order”; and may “specify

more precisely the manner of effecting the property division

previously made if the substantive division

of property is not altered or

changed”); Shanks v. Treadway , 110

S.W.3d 444, 447 (Tex. 2003).

In neither endeavor, however, may a

trial court “amend, modify, alter, or change the division of property

made or approved in the decree of divorce or annulment.” Tex. Fam. Code Ann . § 9.007(a) (Vernon 2006). Res judicata applies to a final divorce

decree just as it does to any other final judgment, barring subsequent

collateral attack even if the divorce decree improperly divided the property. Baxter

v. Ruddle , 794 S.W.2d 761, 762 (Tex.

1990); Cook v. Cameron , 733

S.W.2d 137 , 140 (Tex.

1987). Clarification orders thus cannot

be used to make a substantive change in a divorce decree after it becomes

final. Shanks , 110 S.W.3d at 449 .

The trial court may not change the decree’s division of property even if

it contains substantive legal error. See

id. (declaring that party’s “remedy for a substantive error of law by the

trial court was by direct appeal, and he cannot now collaterally attack the

judgment”).

Standard of Review

George challenges the legal sufficiency of the facts found by

the court as well as the correctness of its legal conclusions that the 401(k)

assets and unpaid bonuses had already been addressed in the divorce

proceeding. “In an appeal from a bench trial , a trial

court’s findings of fact

have the same weight as a jury’s verdict.”

HTS Servs., Inc. v. Hallwood

Realty Partners, L.P. , 190 S.W.3d 108, 111 (Tex. App.—Houston [1st Dist.] 2005, no pet.); Lee v. Lee , 981 S.W.2d 903, 905 (Tex.

App.—Houston [1st Dist.] 1998, pet. denied).

The trial

court, as fact

finder, is the sole judge of the credibility of the witnesses. HTS

Servs. , 190 S.W.3d at 111 ; see also City

of Keller v. Wilson ,

168 S.W.3d 802, 819 (Tex.

2005). Consequently, we may not replace a

finding simply because we would reach a different answer on the evidence. See Maritime Overseas Corp. v. Ellis ,

971 S.W.2d 401, 407 (Tex.

1998).

The trial court’s findings of fact are subject

to review for legal sufficiency under the same standards applied in reviewing

evidence supporting a jury’s answer. Ortiz

v. Jones , 917 S.W.2d 770,

772 (Tex.

1996); Comm’n of Contracts v. Arriba, Ltd. , 882 S.W.2d 576, 582 (Tex.

App.—Houston [1st Dist.] 1994, no writ). In determining whether

legally sufficient evidence supports the finding under review , we must consider evidence

favorable to the finding

if a reasonable fact

finder could consider it, and disregard evidence contrary to the finding unless a reasonable fact finder could

not disregard it. City of Keller ,

168 S.W.3d at 827 .

We review a trial court’s

conclusions of law

de novo, and will uphold them on appeal if the judgment can be sustained on any

legal theory supported by the evidence. HTS Servs. , 190 S.W.3d at 111 (citing BMC Software Belgium,

N.V. v. Marchand , 83 S.W.3d 789, 794 (Tex. 2002)).

“An appellant may not challenge a trial court’s conclusions of law for

lack of factual sufficiency, but we review the legal conclusions drawn from the

facts to determine their correctness.” Id . at 111–12.

George also

complains that the trial court abused its discretion in its post-divorce

division of pension plan assets. “In a post-divorce partition suit, an

unequal division should not be

disturbed absent a showing that the division

was so disproportionate, unjust, and unfair, that it was a clear abuse of

discretion.” Ellis v. Zieben , No. 01-04-00436-CV, 2005 WL 1308706 , at *3 (Tex. App.—Houston

[1st Dist.] Jun. 2, 2005, pet. denied) (mem. op.) (citing In re Marriage of

Notash , 118 S.W.3d 868, 874 (Tex. App.—Texarkana 2003, no pet.)). A court abuses its discretion by acting

arbitrarily or unreasonably, without reference to any guiding rules or

principles. Mai v. Mai , 853 S.W.2d 615, 618 (Tex. App.—Houston [1st

Dist.] 1993, no pet.).

Res judicata

George challenges the trial court’s legal

conclusions that (1) the divorce decree disposed of all of the interest in

Teresa’s 401(k) plan and no post-divorce division was appropriate (in other

words, the issue could not be relitigated), and (2) res judicata barred

George’s petition to divide accrued but unpaid bonuses existing on the date of

divorce. Res judicata bars relitigation

of claims which have been finally adjudicated or arise out of the same subject

matter and could have been litigated in the prior action. See Martin v. Martin, Martin &

Richards, Inc ., 989 S.W.2d 357 ,

358 (Tex. 1998)

(per curiam).

Res judicata bars post-divorce

property division actions, however, only when the divorce decree has disposed

of the asset at issue. Law v. Law , 792 S.W.2d 150, 152 (Tex.

App.—Houston [1st Dist.] 1990, writ denied).

Thus, if George’s suit aims to partition assets overlooked in the

divorce settlement, then it is not barred by res judicata. If, however, George seeks merely to claim a

share of an asset already divided in the

divorce settlement, then it is barred. See

id.

George suggests that Teresa, as

respondent, bore the burden to prove res judicata as an affirmative

defense. We disagree. In contrast to a traditional lawsuit in which

res judicata is an affirmative defense, as the petitioner in this statutory post-divorce

action, George has the burden to prove that the divorce court did not consider or dispose of the

401(k) plan or the accrued bonuses in the final decree. See Tex. Fam. Code Ann. § 9.201 (suit

available only to divide property

not divided or awarded in final divorce decree); see Stephens v. Marlowe , 20 S.W.3d 250, 254 (Tex. App.—Texarkana

2000, no pet.) (“ Marlowe, as the party requesting partition, had the burden to

prove in the partition action that the divorce court did not consider or

dispose of the settlement proceeds.”) .

When a party attacks the legal

sufficiency of an adverse finding on an issue on which he has the burden of

proof, he must demonstrate on appeal that the evidence establishes, as a matter

of law, all vital facts in support of the issue. Sterner v. Marathon Oil Co ., 767 S.W.2d 686, 690 (Tex. 1989). Mindful of this burden, we review the trial

court’s conclusions that the divorce decree precluded relitigation of issues

relating to Teresa’s 401(k) plan and accrued bonuses.

With respect to the 401(k) plan

assets, George contends that evidence during the divorce proceeding showed that

the 401(k) plan contained a maximum of $136,000, but the plan actually had a

balance of at least $177,419.20 two months before the divorce. As a result, he asserts, significant funds in

the plan remained unaddressed by the final decree and were subject to

post-divorce division. George also

complains that the trial court erred in dismissing his claims concerning

Teresa’s unpaid bonuses without taking any evidence on the issue.

A trial court

may sua sponte take judicial notice

of its own records of a former trial in the same case. See

Jones v. Jones , 888 S.W.2d 849 , 852–53 (Tex. App.—Houston [1st Dist.] 1994,

no writ). It appears to have done so

here. We, however, may not take judicial

notice of those records unless they are provided as part of the appellate

record. See Muller v. Leyendecker , 697 S.W.2d 668 , 675–76 (Tex. App.— San

Antonio 1985, writ ref’d n.r.e.). As the

bearer of the burden to prove that the challenged assets had not been addressed

or divided in the divorce proceeding, it was incumbent on George to supply the

evidence which establishes his contentions as a matter of law. See Sterner , 767 S.W.2d at 690 . Absent this showing, no ground exists for

reversing the trial court’s conclusion that George’s claims concerning these

assets are barred by res judicata.

Further, both of George’s claims concern

the trial court’s valuation of community assets before the divorce judgment. The scant evidence of the divorce proceeding

in the record shows that the parties contested the value of the 401(k) plan

assets, and the court made its determination after considering the contested

evidence. Likewise, with respect to the

bonuses earned by Teresa, we presume that the trial court’s record of the

divorce proceeding supports a finding that these bonuses were addressed in

divorce proceedings. [2]

Although George complains that he did

not receive sufficient information to arrive at more accurate valuations of

these assets during the divorce proceeding, he could have moved to compel

production of updated information before entry of the final decree or sought

relief through postjudgment proceedings and direct appeal of the judgment. In short, any further challenge to the

valuation and disposition of the assets could have occurred in the underlying

proceeding. We find no error in the trial

court’s dismissal of these claims on the ground of res judicata.

Award of 401(k) Plan to Teresa as a Clarification of

the Decree

George further asserts that the final

decree unambiguously awarded Teresa $136,000, not the entire 401(k) plan, and

that the trial court was required to divide the remaining balance in excess of

that amount. Accordingly, George

contends, the trial court had no authority to modify the original decree by

awarding Teresa the 401(k) assets in excess of $136,000.

Whether a

decree is ambiguous is a question of law.

Shanks , 110 S.W.3d at

447 . To determine whether a subsequent

order clarifies or modifies a decree “we must interpret the decree to determine

not what the trial court should have done but, if possible, what the trial

court actually did.” Id. If the decree read as a whole is unambiguous

as to the property’s disposition, the court has no authority to enter an order

altering or modifying the original distribution of property. Id. at

449 . Rather, it must effectuate the

order in light of the literal language used.

Id. at 447 . If the decree is subject to

more than one reasonable interpretation, however, the court reviews the record

along with the decree to aid in interpreting the judgment in a way that

correctly applies the law. Id.

Contrary to George’s assertion, the

plain language of the final decree, which expressly awards Teresa the “401(k)

plan in the amount of $136,000,” is

subject to more than one reasonable interpretation. The construction urged by George, suggesting

that the final decree awarded Teresa a sum certain from the plan, is but

one. The trial court adopted the other,

concluding that the intent of the decree was to award Teresa the entire 401(k)

plan.

We agree with the construction

adopted by the trial court, which comports with the decree as a whole and the

circumstances surrounding its formation.

First, while the decree contains a section itemizing the community

property awarded to George, neither that section nor any part of the decree has

language awarding any portion of Teresa’s retirement benefits to George. Second, in the court’s property division

notes, which provided the basis for drafting the final decree, the associate

judge crossed out George’s proposal that he receive a portion of the 401(k)

plan assets and wrote the entire estimated value of the plan in Teresa’s

column. These notes reveal an

affirmative intent that George not be awarded anything from the plan and that

Teresa receive all of it. The trial

court correctly exercised its authority to clarify this ambiguous language in

order to give effect to the just and right allocation of the community estate

that it originally intended. [3]

Division of Teresa’s Pension Plan Assets

George

also takes issue with the trial court’s decision to award him only 40% of the

pension plan assets earned by Teresa during the marriage, complaining that the

trial court did not adequately take into consideration Teresa’s failure to

disclose those assets in dividing them.

A single factor, however, does not require the court to allocate a

particular asset in favor of one party or the other. Nothing demonstrates that the trial court, in

considering all of the relevant facts and circumstances, abused its discretion

in dividing the pension plan assets as it did.

Conclusion

We conclude that res judicata bars

any claim against assets that the trial court divided pursuant to the final

decree of divorce. We further conclude

that the trial court acted within its discretion in allocating pension plan

assets that were not a subject of the divorce decree. We therefore affirm the judgment of the trial

court.

Jane Bland

Justice

Panel consists of Justices Nuchia,

Hanks, and Bland.

[1]

George maintains that the divorce decree was not

final because it did not contain a “Mother Hubbard” clause and did not dispose

of all the community assets. The absence

of a Mother Hubbard clause,

however, does not in itself denote any lack of finality. See Lehmann v. Har-Con Corp ., 39 S.W.3d 191 , 204 (Tex. 2001). The Family Code restricts the type of

post-judgment modification urged by George.

A trial court retains continuing jurisdiction to clarify or enforce a

final divorce decree, but lacks the authority to alter the distribution of the

community estate after its plenary power expires, even if the decree does not

dispose of all of the community estate. See

Tex. Fam. Code Ann . §§ 9.002, 9.008 (Vernon 2006); Gainous v. Gainous , 219 S.W.3d

97 , 105–07 (Tex. App.—Houston

[1st Dist.] 2006, pet. filed).

[2] Accrued but not paid bonuses would not fall into the

account until later.

[3] To the extent George challenges the court’s

distribution of the 401(k) assets as an abuse of its discretion to make a just

and right allocation of the community estate, we may not consider it here. While this challenge could have been raised

in a direct appeal of the final divorce decree, it constitutes an impermissible

collateral attack in this proceeding. See Gainous , 219 S.W.3d at 106–07.