H. Allen Thomason v. Martha Parker--Appeal from 128th District Court of Orange County

MEMORANDUM OPINION
No. 04-02-00296-CV
H. Allen THOMASON,
Appellant
v.
Martha PARKER,
Appellee
From the 128th Judicial District Court, Orange County, Texas
Trial Court No. A-990, 124-C
Honorable Patrick A. Clark, Judge Presiding

Opinion by: Sarah B. Duncan, Justice

Sitting: Sarah B. Duncan, Justice

Karen Angelini, Justice

Sandee Bryan Marion, Justice

Delivered and Filed: June 18, 2003

REVERSED AND RENDERED

H. Allen Thomason appeals the trial court's judgment awarding Martha Parker $90,000 plus interest and attorney's fees in her action against him for a "[p]ost-[d]ivorce [p]artition of [p]roperty." Because there is no evidence that the insurance proceeds Parker seeks to partition were not considered by the court in the underlying divorce action, we reverse the trial court's judgment and render judgment in Thomason's favor.

Factual and Procedural Background

In October 1993 Martha Parker sued her husband Jim Parker for divorce. Martha also sued Jim's long time business associate, H. Allen Thomason. Two weeks after Martha filed for divorce, Jim pledged his business, Lou-Tex Equipment, Inc., as security for a $1.2 million debt he owed Thomason. In September 1994, Thomason declared Jim in default on the debt and took over all of Lou-Tex's assets and property as payment for the debt.

In October 1996 Martha's suit for divorce was granted and the property division portion of the suit was severed. During the property division trial, a fire destroyed Lou-Tex (now owned by Thomason's company, Citadel). Martha sought and was granted a temporary injunction preventing Jim and Thomason from receiving or negotiating any insurance settlement for the assets destroyed in the fire. At the hearing on the temporary injunction, Thomason testified that he was the 100% owner of Citadel and Jim was merely a Citadel employee who was helping him deal with the insurance adjustors; consequently, Jim was not entitled to any of the insurance settlement. Thomason stated he had not yet received any money from the insurance company but estimated that the settlement would be between $500,000 and $1 million. Jim testified that he did not have any ownership in Citadel, he had not received, did not expect to receive, and had no reason to believe he was entitled to any of the insurance proceeds from the fire.

At the close of evidence in the divorce proceeding, Thomason and Martha submitted written summations to the trial court. In his submission Thomason argued:

The evidence was uncontroverted that Citadel Wholesale Machinery, Inc. was the owner of the equipment which was damaged or destroyed during the January 1, 1997 fire. [Martha] presented no evidence of her entitlement to any insurance proceeds which might be paid as a result of this fire. She never purchased the insurance policies and was not a named insured or beneficiary under any of the insurance policies which are implicated as a result of the January 1, 1997 fire.

Martha's brief did not mention the insurance proceeds, but she argued during trial that the insurance proceeds were community property.

On January 20, 1998, the court signed its Order on Final Property Division. Martha and Jim were each awarded a 50% interest in Lou-Tex and a "50% interest in [Jim's] interest, if any, in the business known as Citadel." The judgment further ordered that Martha "take nothing as to Co-Respondent, [Thomason], and that [Thomason] be discharged from any liability herein." Jim appealed and the judgment was affirmed. In re Marriage of Parker, 997 S.W.2d 833 (Tex. App.-Texarkana 1999, pet. denied).

In January 1999, Martha discovered Thomason had in fact received $362,338.00 as an insurance settlement in April or May of 1997 (while the temporary injunction was still in effect). Martha then brought a new suit against Thomason for a "Post-Divorce Partition of Property," in which she sought division of the insurance proceeds. At the hearing on this suit, after taking judicial notice of the testimony and evidence from the divorce trial, the trial court rendered judgment for Martha against Thomason for $50,000 plus interest and attorney's fees. Thomason appealed. The Beaumont Court of Appeals reversed, holding that the trial court could not take judicial notice of the testimony in the divorce proceeding. Thomason v. Parker, No. 09-00-154-CV, 2001 WL 523962 at *3 (Tex. App.-Beaumont May 17, 2001, no pet.)(not designated for publication). The court thus sustained Thomason's no evidence point of error; however, rather than rendering judgment in Thomason's favor, the court remanded for a new trial in the interest of justice. Id.

On retrial, the entire record of the divorce proceedings was offered and admitted into evidence. After finding that the insurance proceeds that were paid to Thomason were unknown to the court and not considered in the original divorce action, the trial court rendered judgment in favor of Martha for $90,000 plus interest and attorney's fees. Thomason has again appealed.

Legal Sufficiency

In his second point of error, Thomason argues the evidence is legally insufficient to support the trial court's finding that "[t]he insurance proceeds were an asset not considered in the underlying divorce action." We agree.

A judgment finalizing a divorce and dividing the community property is res judicata of any attempt to relitigate the division of property in a subsequent partition suit. Moreno v. Alejandro, 775 S.W.2d 735, 738 (Tex. App.-San Antonio 1989, writ denied) (citing Day v. Day, 603 S.W.2d 213, 215 (Tex. 1980). If a judgment fails to dispose of community property, either spouse may file suit to divide the property. See Tex. Fam. Code Ann. 9.201(a) (Vernon 1998). Whether a judgment divides a community property asset is determined by the rules relating to construction of judgments. See Stephens v. Marlowe, 20 S.W.3d 250, 253 (Tex. App.-Texarkana 2000, no pet.). When the judgment, when read as a whole, is unambiguous as to the property's disposition, the court must effectuate the order in light of the literal language used. Wilde v. Murchie, 949 S.W.2d 331, 332 (Tex. 1997). If the decree is ambiguous, the court must interpret the judgment by reviewing both the judgment as a whole and the record to ascertain the property's disposition. Id.

Because the Final Order on Property Division does not expressly dispose of the insurance proceeds, we hold it is ambiguous as a matter of law. Therefore, we must look to the record as a whole to determine whether the proceeds were divided by the trial court. The record plainly reflects that Martha's claim that the insurance proceeds were community property was litigated in the property division proceeding: the trial court issued a temporary restraining order and later a temporary injunction against Jim Parker and Thomason prohibiting them from "negotiating, cashing, disbursing, or in any other way from disposing of any insurance proceeds"; the insurance proceeds were the subject of testimony; Thomason's trial brief argued Citadel owned the right to receive the proceeds; and the trial court's Order on Final Property Division awards Martha one-half of Jim Parker's interest, if any, in Citadel. Indeed, not only is there no evidence to support the trial court's finding that the insurance proceeds were not considered but the record conclusively establishes the contrary. (1) Accordingly, we reverse the trial court's judgment and render a take nothing judgment in Thomason's favor.

Sarah B. Duncan, Justice

1. We are aware that the Beaumont Court of Appeals' opinion in the previous appeal states that the trial court's property division order "did not resolve the issue of Martha's interest in the insurance proceeds." Thomason v. Parker, No. 09-00-154-CV, 2001 WL 523962 at *1 (Tex. App.-Beaumont May 17, 2001, no pet.)(not designated for publication). Our review of the record conclusively establishes this statement is clearly erroneous and therefore not binding on this court in this appeal. See Briscoe v. Goodmark Corp., 102 S.W.3d 714, 717 (Tex. 2003) ("Our duty to administer justice under the law, as we conceive it, outweighs our duty to be consistent.").