Kent Morrison Adams v. Joanne Catherine Adams--Appeal from 317th District Court of Jefferson County (Majority)

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Laws-info.com » Cases » Texas » 9th District Court of Appeals » 2011 » Kent Morrison Adams v. Joanne Catherine Adams--Appeal from 317th District Court of Jefferson County (Majority)

State: Texas

Court: Texas Northern District Court

Docket No: 09-11-00409-CV

Case Date: 12/22/2011

Plaintiff: Kent Morrison Adams

Defendant: Joanne Catherine Adams--Appeal from 317th District Court of Jefferson County (Majority)

Preview:In The
Court of Appeals
Ninth District of Texas at Beaumont
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NO. 09-11-00409-CV
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KENT MORRISON ADAMS, Appellant

V.

JOANNE CATHERINE ADAMS, Appellee
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On Appeal from the 317th District Court
Jefferson County, Texas
Trial Cause No. C-199,246
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MEMORANDUM OPINION

Joanne Catherine Adams sued Kent Morrison Adams for breach of an alimony contract.  The trial court granted Joanne.s partial motion for summary judgment and later granted her final motion for summary judgment.  On appeal, Adams challenges the trial court.s decision to grant Joanne.s summary judgment motions.  We affirm the trial court.s judgment.
Factual Background
In a final decree of divorce, Kent agreed to pay Joanne contractual alimony.  The decree states that alimony payments are based on the disparity in the parties. earning
power and business opportunities, Joanne.s health problems, Joanne.s probable future need for support, the benefits Joanne would have received if the marriage had continued, and other factors that warrant Joanne.s support by Kent.  Neither party appealed from the decree.  When Kent subsequently stopped paying alimony, Joanne sued Kent for breach of contract.  In his answer to Joanne.s petition, Kent raised a number of affirmative defenses.
In her summary judgment affidavit, Joanne testified that the decree obligated Kent to make monthly alimony payments for 120 months.  She explained that Kent made a number of payments through December 2008.  According to Joanne, Kent now owes several thousand dollars in unpaid alimony.
In his summary judgment affidavit, Kent claimed that the alimony payments were intended to compensate Joanne for her community interest in his law firm. Kent explained that Joanne assigned a $3,090,000 value to the firm, while he maintained that the firm had no net fair market value.  Kent testified that a certified public accountant valued Joanne.s share at $1,545,000, an amount with which Kent disagreed.  Kent stated that he accepted the valuation in good faith, but refused to sign the inventory.  Kent stated that it later became obvious that the valuation was erroneous.  He explained that the firm had no net value because its liabilities exceeded its assets.  Kent testified that the firm.s lender terminated the firm.s line of credit and began collections efforts. Kent
subsequently closed the firm.  Because he believed the valuation of the firm to be erroneous, Kent stopped paying alimony.
In his deposition, a certified public accountant testified that he performed a business valuation of Kent.s law firm for the purpose of determining a division of marital property in the Adamses. divorce.  The accountant determined that Kent.s 100% marital interest in the firm totaled $1,545,000.  The accountant explained that he derived the firm.s fair market value by subtracting its liabilities from its assets.  He assumed that the firm.s accounts receivable and works in progress were 100% collectible, which he testified was not an unreasonable assumption.  He testified that he based his conclusion on documents provided by Joanne.s attorneys.  However, the accountant requested other documents that were never provided.  He testified that the firm.s value would be $0 if its assets equaled its liabilities, but that this was not the case when he prepared his report. The accountant stated that he had received no additional information that would affect his opinion.
According to Kent, the erroneous valuation resulted from fraud and the accountant.s mental and emotional impairment,1 professional negligence, and limited investigation into the firm.s finances.  He stated that the accountant failed to consider numerous factors and improperly assumed that the firm.s accounts receivable were 100% collectible.  Additionally, Kent believed that Joanne.s attorneys failed to furnish the
1 According to the record, the accountant.s production and income decreased after his daughter died in an accident.

accountant with all the firm.s financial records and failed to disclose the accountant.s impairment; thus, Kent believed that the accountant.s valuation was based on a fraudulent scheme.
Kent alleged that the decree contains mutual mistakes regarding the firm.s fair market value.  Kent opined that Joanne has been overpaid and sought to avoid her share of the firm.s liabilities; thus, Kent believed that if Joanne prevailed, she would recover all assets of the community estate and no liabilities. Kent alleged that Joanne refused to develop a plan for repaying community obligations, participated in a fraudulent valuation, made detrimental statements regarding Kent and his new wife, and was trying to unjustly enrich herself.  Kent stated that he would have to use his future earnings to pay any further alimony instead of paying from a community asset that existed at the time of the decree.  He explained that it would be unconscionable to uphold the decree because he would have to file for bankruptcy.  Kent alleged that the parties were mistaken about a material fact, i.e., fair market value, and did not intend for Joanne to receive 100% of the community assets, which made the decree voidable.
In her partial motion for summary judgment, Joanne argued that Kent could not collaterally attack the final divorce decree.  In its order granting Joanne.s motion, the trial court dismissed Kent.s affirmative defenses of mutual mistake, unjust enrichment, impossibility of performance, credit or offset, failure of consideration, fraud, and illegality as impermissible collateral attacks on the divorce decree.
In her motion for final summary judgment, Joanne sought a traditional summary judgment on her breach of contract claim and a no-evidence summary judgment on Kent.s affirmative defenses of accord and satisfaction, equitable estoppel, laches, and payment. The trial court granted the motion, denied Kent.s motion to reconsider the partial summary judgment, and ordered Kent to pay past-due alimony.  The trial court did not specify the grounds for summary judgment.  Additionally, the trial court found that Kent.s counter-claims were based on the same facts as his affirmative defenses of credit or offset, fraud, and mistake, all disposed of by the partial summary judgment; therefore, Kent.s counter-claims were precluded as a matter of law.
Standard of Review
We review a trial court.s ruling on a traditional summary judgment motion de novo.  Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex. 2003).  We

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