Texas Court May Clarify Ambiguous Property Division

Once its plenary power has expired, a trial court cannot change the substantive property division stated in a final Texas divorce decree.  It does, however, retain the power to clarify or enforce that property division.  A Qualified Domestic Relations Order (“QDRO”) is a post-divorce enforcement order and therefore cannot change the property division.  A QDRO can, however, specify how the property division can be carried out, without altering the substantive property division. If the QDRO substantively alters the property division, then it is void and may be amended to comport with the division in the decree.  A wife recently challenged a clarification order addressing the division of the husband’s 401(k).

According to the appeals court’s opinion, the parties executed a mediated settlement agreement (“MSA”) that incorporated a spreadsheet dividing the marital estate.  That spreadsheet indicated the parties would each receive half of $92,916.50 from the 401(k).

The final decree incorporated the MSA by reference and ordered the parties “to do all things necessary to effectuate” it.  The decree awarded the husband the entire balance of the 401(k) “as reflected on [the spreadsheet]” except for the part awarded to the wife by the decree.

In a subsequent QDRO, the trial court ordered the division of the 401(k) account.  The decree awarded the wife 50% of the community interest that accrued during the marriage, but the QDRO awarded her 50% of the husband’s “total vested account balance [that] accrued” during the marriage.

The plan administrator transferred half of the total vested account balance accrued during the marriage to the wife.  The husband then challenged the QDRO through a bill of review action.  He also sought enforcement and clarification of the decree, entry of a modified QDRO, and attorney’s fees.

The wife argued the amounts listed in the spreadsheet were just alleged and proposed.  The husband argued they agreed to divide the community portion of the account as calculated by the accountant.  The husband provided an affidavit from the accountant, stating he had reviewed the quarterly statements and tracked the index performance for the investments.  He calculated the community share of the account at $99,426.40.

The trial court clarified the decree to state the accountant’s affidavit set forth the amount to be awarded to the wife, ordered her to refund the funds, stated it would sign an amended QDRO awarding the wife half of the community interest, and awarded the husband $2,500 in attorney’s fees.

The wife appealed, arguing the clarification order substantively altered the property division as stated in the final divorce decree.  The husband argued the decree was ambiguous and required clarification.

Ambiguity in the Decree

The appeals court concluded the decree was ambiguous.  It awarded the wife “one-half of the community interest” that accrued during the marriage and awarded the husband the balance of the account except what was awarded to the wife.  The provision addressing the husband’s share stated it was awarded “as reflected on Exhibit A” and incorporated Exhibit A into the decree.  Exhibit A stated each party would receive $46,458.25.  The appeals court determined it could be interpreted in multiple ways. Because the decree was ambiguous, the trial court had the discretion to clarify the property division.  The appeals court further concluded the court clarified the division without substantively changing the property division.

Evidence Supporting the Clarification

The wife argued the clarification was not supported by sufficient evidence.  The appeals court concluded, however, that there was legally and factually sufficient evidence supporting the finding the parties agreed to use the accountant’s calculation of the community interest share of the 401(k) and the clarification.

The primary evidence supporting the clarification was the accountant’s affidavit, including his calculations.  The wife challenged the admissibility of the affidavit and the accountant’s methodology, but the appeals court concluded she waived those objections.

The wife had objected to the affidavit on the grounds it was hearsay.  The trial court ruled the affidavit was admissible under the Emergency Orders allowing courts to consider sworn out-of-court statements due to the COVID-19 pandemic.  She did not object to the Emergency Orders or argue that her objection was to the spreadsheet.  Although she argued on appeal that the spreadsheet did not fall within a hearsay exception, she failed to make that argument to the trial court and had therefore failed to preserve the objection for appeal.

A court may overrule a general objection if any part of the proposed evidence is admissible.  The appeals court concluded at least part of the affidavit was admissible, so the wife had the burden of identifying any portion that she thought was not.  Because she did not do so, the trial court did not abuse it discretion in overruling her objection.

Accountant’s Valuation

The husband testified it was the parties’ intent to use the accountant’s calculations.

The wife denied agreeing to use the accountant’s calculations.  She claimed she relied on the plan administrator to properly calculate the division.

The appeals court noted the MSA was incorporated into the final decree and was binding on the parties.  The MSA stated the parties agreed to abide by the resolutions stated in Exhibit A, which was the spreadsheet.

The trial court was the factfinder and had the discretion to credit the testimony and evidence and could have concluded the wife agreed to use the accountant’s valuation. The appeals court concluded the trial court’s clarification order was supported by legally and factually sufficient evidence.

The appeals court noted the agreement to use the accountant’s calculations superseded any issue about their accuracy.  The accountant’s affidavit stated he reviewed the account’s quarterly statements and used the index performance for the investments within the plan to determine the account’s value on the date of the divorce.   The trial court awarded the wife half of the amount he concluded was the value of the community interest portion on the date of the divorce.

The wife argued there was no evidence establishing what investments were held in the account.  She also argued the calculations ignored reinvestments.  The husband argued the wife had failed to preserve challenges to the accountant’s methodology.

Under Texas case law, expert testimony may be considered probative evidence if it is admitted without objection, even if it does not have a reliable basis.  A challenge to the reliability of the basis for the opinion must be preserved.  A party may only challenge expert testimony that is facially conclusory or speculative on appeal without an objection to preserve the issue.

The wife had not challenged the reliability and methodology of the expert’s calculations until the appeal.  She did not argue on appeal that his opinions were conclusory or speculative.  Since she had not preserved challenges to his methodology, the accountant’s expert testimony was probative evidence legally sufficient to support the clarification order.

The wife further argued that even if the evidence was sufficient to support the clarification, the trial court had only divided $92,916.50 of the account and the nearly $900,000 balance was left undivided.  The appeals court noted she had not raised this issue at trial and it did not have jurisdiction to consider it.

The appeals court concluded there was legally and factually sufficient evidence in the record to support the clarification and enforcement order.

The appeals court did, however, agree with the wife that there was insufficient evidence supporting the award of attorney’s fees.

The appeals court vacated the attorney’s fee award and remanded to the trial court to further consider or redetermine them.  The court affirmed the rest of the order.

Call a Knowledgeable Dallas Divorce Attorney

Retirement accounts can be significant assets for which a fair division is difficult to calculate.  A skilled Texas divorce lawyer can help you determine your rights and pursue a fair property division.  Schedule a consultation with McClure Law Group at 214.692.8200.


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