Nancy Bender Fuhrman v. Douglas John Fuhrman

In The

                                Court of Appeals

                    Ninth District of Texas at Beaumont

                               __________________

                               NO. 09-24-00155-CV
                               __________________

                   NANCY BENDER FUHRMAN, Appellant

                                         V.

                    DOUGLAS JOHN FUHRMAN, Appellee

__________________________________________________________________

             On Appeal from the County Court at Law No. 6
                     Montgomery County, Texas
                   Trial Cause No. 22-05-05987-CV
__________________________________________________________________

                          MEMORANDUM OPINION

      Appellant Nancy Bender Fuhrman, (Appellant or Nancy) appeals a final

judgment from a bench trial in a breach of contract and declaratory judgment action

filed by her ex-husband, Appellee Douglas John Fuhrman (Appellee or Douglas), to

enforce the tax allocation set forth in the parties’ 2020 Agreed Final Decree of

Divorce (the “Divorce Decree”). The parties disagree on the amount of Nancy’s part

of the tax liability for 2020. Nancy argues that the trial court erred in finding that

Douglas performed his contractual duties under the Divorce Decree and that Nancy

                                          1
failed to perform her obligation under the Divorce Decree and erred in finding that

Nancy owed Douglas $187,244 1 for her share of the 2020 income taxes, plus

attorney’s fees. We affirm.

                                 Procedural Posture

      On May 10, 2022, Douglas filed suit against Nancy for a breach of contract,

and seeking a declaratory judgment, and attorney’s fees. Nancy filed an Original

Answer and Counterclaim against Douglas alleging he breached the contract, and

she also sought a declaratory judgment, and requested attorney’s fees. The trial court

held a bench trial and entered a Final Judgment finding that the Divorce Decree was

a valid, enforceable contract; Douglas was the proper party to bring suit for breach

of contract; Douglas performed, tendered performance, or was excused from

performing his contractual obligations; Nancy breached the contract; and Nancy’s

breach caused Douglas injury. Nancy was ordered to pay Douglas $187,244 in actual

damages and $30,782.58 in attorney’s fees, and the court ordered that Nancy take

nothing on her counterclaim. The trial court made Findings of Fact and Conclusions

of Law and Nancy timely appealed.


      1
       Nancy’s brief complains that the trial court “erred” in finding that Nancy
owed “$185,158.50[,]” but the trial court found that Nancy owed Douglas $187,244.
So, we assume Nancy is complaining about the trial court’s finding that she owed
$187,244.



                                          2
                                    Issue on Appeal

      In one appellate issue, Nancy argues that the trial court erred in finding that

Douglas performed his contractual obligations under the Divorce Decree and that

Nancy owed Douglas $187,244 for her share of the income taxes for 2020. She

argues Douglas failed to perform under the Divorce Decree by failing to provide her

with a copy of his K-1, she specifically challenges the legal and factual sufficiency

of the trial court’s Finding of Fact number 16, and she argues the trial court erred as

a matter of law in reaching its Conclusions of Law numbers 2, 5, and 9.

                                    Evidence at Trial

Testimony of Douglas 2

      Douglas testified that he and Nancy were married in June of 1989, and their

Decree of Divorce was entered July 10, 2020. Douglas confirmed that other than the

last two years of marriage, he held a certified public accountant license and was a

partner at Deloitte & Touche (Deloitte). In 2018, he retired from Deloitte where he

was a thirty-year partner. Douglas testified that when he retired from Deloitte, he

worked in the company’s audit division.

      According to Douglas, at the time of the divorce, he was already receiving

retirement income, and he was concerned about a large tax liability for tax year 2020.

Douglas testified that knowing that he and Nancy would owe taxes on the 2020 tax


      2
          Nancy did not testify at trial and the defense offered no other witnesses.
                                             3
return, he wanted reimbursement for the taxes that he would owe on money that had

already been received from Deloitte. Douglas testified that all the cash that was due

for the 2020 earnings from Deloitte had already been paid by the time the divorce

was finalized because Deloitte operates on a fiscal year of June 1st through May

31st. Douglas also testified that he addressed this concern during the parties’ divorce

mediation. According to Douglas, the terms of the mediated settlement agreement

the parties reached for the divorce were incorporated into the Divorce Decree. Under

the Divorce Decree and after the divorce became final, each party would be

separately responsible for taxes on the sale of assets and be separately responsible

for taxes on any employment income, Douglas would be responsible for the first

$270,000 of the federal income tax owed for tax year 2020, and any remaining tax

due after the initial $270,000, would be divided equally between the parties. The

Divorce Decree included the following provisions pertaining to tax year 2020:

          Treatment/Allocation of Community Income for Year of Divorce
          It is agreed and therefore ORDERED that for the purposes of
      determining income tax liability, the parties agree that Deloitte shall
      prepare the calendar year 2020 tax return for both parties, and the
      parties hereby partition pre-divorce income for tax year 2020, as each
      party’s sole and separate property, in a manner determined by Deloitte
      to reduce the total overall federal income taxed owed for tax year 2020
      on the returns of both parties, with the following adjustments:
          1. Taxes on the sale of assets after the date of divorce by either party
              and employment income of each party after the date of divorce
              are the sole responsibility of that party,
          2. Respondent shall be responsible for the first Two Hundred
             Seventy Thousand Dollars ($270,000.00) of federal income tax
             owed for tax year 2020, and
                                           4
   3. Any amount of federal income tax owed by the parties for tax
      year 2020 over and above the first Two Hundred Seventy
      Thousand Dollars ($270,000.00) of federal income tax owed to
      be paid by Respondent, shall be divided equally between the
      parties.
    For the purpose of the income partitioned for 2020 in accordance
with the provisions above, the parties agree that income partitioned to
each party is considered that party’s sole and separate property
beginning January 1 of the calendar year of 2020, with l00 percent of
the income, gains, losses, deductions, and credits attributable to or
derived.
    The parties agree that, for the purposes of determining each party’s
income tax liability, the property partitioned shall be deemed to have
been partitioned to that party and have been that party’s separate
property as of January 1, 2020, or the date of the property’s acquisition,
if later.
    IT IS ORDERED AND DECREED that for the calendar year 2020,
each party shall file a federal income tax return in accordance with the
Internal Revenue Code and this Agreed Final Decree of Divorce.
    IT IS ORDERED AND DECREED that for the calendar year 2020,
each party shall indemnify and hold the other party and the other party’s
property harmless from any tax liability associated with the reporting
party’s individual tax return for that year unless the parties have agreed
to allocate their tax liability in a manner different from that reflected on
their returns.
    IT IS ORDERED AND DECREED that each party shall furnish
such information to the other party as is requested to prepare federal
income tax returns for 2020 within thirty days of receipt of a written
request for the information, and in no event shall the available
information be exchanged later than March 1, 2021. As requested
information becomes available after that date, it shall be provided
within ten days of receipt.
        IT IS ORDERED AND DECREED that both parties shall
cooperate in the preparation of separate income tax returns for 2020 by
supplying to Deloitte all information necessary for the preparation of
each return in accordance with this decree. Both parties are ORDERED
to provide the information to the preparer within ten days of any request
for the information[.]


                                     5
       IT IS ORDERED AND DECREED that each party shall pay all
fees and charges for the preparation and filing of that party’s federal
income tax return for 2020.
       IT IS ORDERED AND DECREED that each party shall preserve
for a period of seven years from the date of divorce all presently
existing financial and tax-related documents, information, and records
relating to the community and separate estates of the parties and the
preparation of the party’s federal and, if applicable, state tax returns for
2020. Each party is ORDERED to allow the other party access to these
documents, information, and records as reasonably necessary for the
determination of that party’s tax liability or to respond to an
examination or audit by the Internal Revenue Service or other
governmental agency within a reasonable time after receipt of written
notice from the party requesting access to the documents, information,
and records. Access shall include the right to copy the documents,
information, and records.
       IT IS ORDERED AND DECREED that all payments made to
the other party in accordance with the allocation provisions for payment
of federal income taxes contained in this Agreed Final Decree of
Divorce are not deemed income to the party receiving those payments
but are part of the property division and necessary for a just and right
division of the parties’ estate.
       IT IS ORDERED AND DECREED that the parties shall
cooperate with each other and exchange all relevant information,
notices, and documents in the event of an audit or examination (or
notice thereof) of their income tax returns for any period during their
marriage through the date of divorce by the Internal Revenue Service
or other governmental agency, and each party shall have the right to
participate, at that participant party’s cost and expense, in that audit or
examination individually or by that party’s designated representative.
       IT IS ORDERED AND DECREED that any assets of the parties
not awarded or divided by this Agreed Final Decree of Divorce are
subject to future division as provided in the Texas Family Code.
       IT IS FURTHER ORDERED AND DECREED, as a part of the
division of the estate of the parties, that any liability not expressly
assumed by a party under this decree is to be paid by the party incurring
the liability, and the party incurring the liability shall indemnify and
hold the other party and the other party’s property harmless from any
failure to so discharge the liability.

                                     6
      Pursuant to the Divorce Decree, Deloitte prepared 2020 tax returns for each

party. Douglas’s taxable income for 2020 was reported as $1,846,112 on Form 1040.

The total income paid by Deloitte to Douglas in fiscal year 2020 was $1,798,421.

The total tax liability for Douglas on his individual 2020 tax return was $640,317.

Douglas paid the total taxes of $640,317. The total tax liability on Nancy’s

individual 2020 tax return was $251,770, which included capital gains income from

her sale of assets after the divorce.

      Douglas testified that he notified Nancy of her calculated share of the tax

liability she owed to Douglas as provided for in the Divorce Decree. Douglas sent

Nancy and her attorney a letter explaining what Nancy owed. Douglas also provided

a spreadsheet that detailed

      all the distributions that [had] been received subsequent to the divorce,
      when it was deposited in the bank account, how much was deposited,
      how much was withheld, what [Nancy’s] portion was, what my portion
      was, what the tax on it was, and whether there was any differential from
      the amount originally calculated to the amount that should have been
      paid.

Nancy’s attorney sent Douglas a letter telling him that Nancy did not agree with the

amount Douglas requested.

      Douglas retained an attorney to represent him in collecting Nancy’s share of

the 2020 tax liability. Douglas’s attorney sent demand letters to Nancy addressed to

her attorney; one of which included a copy of the 2020 tax return. Douglas confirmed

that the only issue he had in dispute with Nancy was the 2020 tax liability, and he
                                         7
agreed that the relief he was seeking from the trial court was “for the taxes associated

with the 2020 tax return and the cash that was received by both [Nancy] and myself

… associated with that return.” Douglas testified that he was also seeking the “time

value of [his] money when it was owed to [him] and wasn’t received[]” as well as

attorney’s fees.

      Douglas testified that the income shown on the 2020 K-1 form was the same

income shown on the Schedule E form which was attached to the 2020 Tax Return,

and it was the income that he and Nancy had received prior to their divorce in July

of 2020. 3 Douglas explained that the amount in the bank account had been divided

in the divorce and was the basis for the 2020 tax liability language in the Divorce

Decree. Douglas noted that any payments he had received from Deloitte after the

divorce for the remainder of 2020 were taxable to him in 2021. Douglas testified that

pursuant to Deloitte’s partnership agreement, he was solely responsible for paying

taxes on any retirement payments he received. According to Douglas, throughout

the parties’ thirty-year marriage, income was never reallocated from one year’s K-1

to a prior year for tax purposes.




      3
        During the trial, the judge ordered a recess to allow Douglas to obtain a copy
of his 2020 K-1 from Deloitte and bring it to court the next day and to provide to
Nancy.
                                           8
Testimony of Jennifer Wertz

      Jennifer Wertz (Wertz), a certified public accountant with twenty-eight years’

experience, was deemed an expert by the trial court without objection. Wertz

testified as an expert for Douglas, and she prepared a report stating the tax liability

of each of the parties. Wertz testified that the scope of her report only pertained to

the 2020 tax liability, and she stated that she had reviewed the tax returns prepared

by Deloitte for each party and the Divorce Decree in preparation of the report. Wertz

confirmed that she did not review or analyze the income tax returns for accuracy and

that they were taken at face value from Deloitte. Wertz testified that “[i]ndividuals

have to report what they are given . . . on their W2s, their 1099s and their K-1s.”

With regard to calculating the tax due, Wertz explained:

      I’m talking about total tax. I’m not talking about payments. Everything
      that is listed here is tax due and is not tax remitted like the balance due,
      meaning, it doesn’t account for prior payments, it doesn’t account for
      estimated tax payments. It’s just tax due.

During cross-examination, Wertz did not agree with Nancy’s attorney’s proposed

calculation or the method Nancy’s attorney used for determining the parties’ tax

liabilities for 2020. Nancy’s calculations were erroneous according to Wertz in part

because Nancy had included retirement payments received by Douglas in 2020 after

the divorce was finalized. In support of her opinion, Wertz explained:

      A. I wouldn’t do any of that because, again, it’s an inconsistent
      treatment of income. You treated income a certain way for 30 years.
      There is a term in accounting -- which I know you’ve heard of -- which
                                           9
      is once could be an error, twice maybe an error, three times it’s
      definitely a counting method. And at year 30 they have an accounting
      method to where they pick up that revenue recognition in the fiscal year,
      the year after it’s reported.
      Q. They had an accounting method filing joint tax returns for 29 years,
      right?
      A. Correct, and that’s why --
      Q. And year 30 they file separate returns, correct?
      A. So --
      Q. So now we have a new --
      A. You will have a new -- but it is not addressed in the decree to where
      everything should be addressed. And it’s very specific. If you want to
      do it that way, it should be on page 12.
      Q. When a taxpayer files for the first time an individual tax return, are
      you telling me they cannot change any accounting method when the
      law is changed?
      A. . . . [T]he law didn’t change. The amount they are going to pick up
      may change, but the law has never changed in this situation.
      Q. Okay.
      A. So to my understanding, Nancy is not picking up any Deloitte
      income because Doug[las] is paying 100 percent of the tax.
      Q. Okay.
      A. So in this situation she is receiving payments net of tax. So there is
      not actually a tax return to tie that out to see if the income is properly
      reported on both sides.

Wertz further supported her opinion that the tax year liability for 2020 did not

include any retirement payments received by Douglas after the divorce was granted

because:

      The K-1 represents the activity that the entity is reporting to the
      individual. Individuals will report that income at the next tax year for
      them, mainly because the entity has to close their year; prepare the
      statements; and by the time they issue them, it’s the next filing season
      for individuals. Therefore the marital state is always one year behind
      on that K-1 recognition.



                                         10
                                   Final Judgment

      Following the bench trial, the trial court made its ruling on December 26,

2023, and set Final Judgment for entry on the court’s January 26, 2024 submission

docket. Nancy filed a request for findings of fact and conclusions of law on January

10, 2024. The Final Judgment awarded Douglas $187,244 with pre-judgment

interest and reasonable and necessary attorney fees of $30,782.58, with costs of court

and post-judgment interest, and it ordered that Nancy take nothing on her

counterclaims. Nancy filed a second request for findings of fact and conclusions of

law. The trial court entered the following Findings of Fact and Conclusions of Law:

      FINDINGS OF FACT
             1. Plaintiff/Counter-Defendant Douglas John Fuhrman
      (hereinafter “Plaintiff”) and Defendant/Counter-Plaintiff Nancy
      Bender Fuhrman (hereinafter “Defendant”) were married on June 16,
      1989.
             2. In January of 2020, divorce proceedings commenced between
      Plaintiff and Defendant in Cause No. 20-01-00129; In the Matter of the
      Marriage of Nancy Bender Fuhrman and Douglas John Fuhrman in
      the 418th Judicial District Court of Montgomery County, Texas.
             3. On June 26, 2020, Plaintiff and Defendant attended mediation
      with Allan J. Reitzer and reached an agreement, memorialized in a
      binding mediated settlement agreement.
             4. On July 10, 2020, the Honorable Judge Tracy Gilbert granted
      the divorce and signed the Agreed Final Decree of Divorce along with
      several ancillary orders as provided to the Court by the parties. Both
      Plaintiff and Defendant along with their respective counsel signed the
      Agreed Final Decree of Divorce. (Pl. Ex. 1).
             5. The Agreed Final Decree of Divorce contained a provision
      therein which stipulated that the Agreed Final Decree of Divorce
      represented a merger of the Parties’ Mediated Settlement Agreement
      and that if any differences existed between the two documents, the

                                         11
Agreed Final Decree of Divorce shall control in all instances. (Pl. Ex.
1).
     6. The Agreed Final Decree of Divorce states in relevant part:

      Treatment/Allocation of Community Income for Year of
      Divorce
      It is agreed and therefore ORDERED that for the purposes of
      determining income tax liability, the parties agree that
      Deloitte shall prepare the calendar year 2020 tax return for
      both parties, and the parties hereby partition pre-divorce
      income for tax year 2020, as each party’s sole and separate
      property, in a manner determined by Deloitte to reduce the
      total overall federal income taxed owed for tax year 2020 on
      the returns of both parties, with the following adjustments:
     1. Taxes on the sale of assets after the date of divorce by
          either party and employment income of each party after
          the date of divorce are the sole responsibility of that party,
     2. Respondent shall be responsible for the first Two Hundred
          Seventy Thousand Dollars ($270,000.00) of federal
          income tax owed for tax year 2020, and
     3. Any amount of federal income tax owed by the parties for
          tax year 2020 over and above the first Two Hundred
          Seventy Thousand Dollars ($270,000.00) of federal
          income tax owed to be paid by Respondent, shall be
          divided equally between the parties.

      For the purpose of the income partitioned for 2020 in
      accordance with the provisions above, the parties agree that
      income partitioned to each party is considered that party’s
      sole and separate property beginning January 1 of the
      calendar year of 2020, with 100 percent of the income, gains,
      losses, deductions, and credits attributable to or derived.

      The parties agree that, for the purposes of determining each
      party’s income tax liability, the property partitioned shall be
      deemed to have been partitioned to that party and have been
      that party’s separate property as of January 1, 2020, or the
      date of the property’s acquisition, if later.



                                   12
IT IS ORDERED AND DECREED that for the calendar year
2020, each party shall file a federal income tax return in
accordance with the Internal Revenue Code and this Agreed
Final Decree of Divorce.

IT IS ORDERED AND DECREED that for calendar year
2020, each party shall indemnify and hold the other party and
the other party’s property harmless from any tax liability
associated with the reporting party’s individual tax return for
that year unless the parties have agreed to allocate their tax
liability in a manner different from that reflected on their
returns.
IT IS ORDERED AND DECREED that each party shall
furnish such information to the other party as is requested to
prepare federal income tax returns for 2020 within thirty days
of receipt of a written request for the information, and in no
event shall the available information be exchanged later than
March 1, 2021. As requested, [if] information becomes
available after that date, it shall be provided within ten days
of receipt.

IT IS ORDERED AND DECREED that both parties shall
cooperate in the preparation of separate income tax returns
for 2020 by supplying to Deloitte all information necessary
for the preparation of each return in accordance with this
decree. Both parties are ORDERED to provide the
information to the preparer within ten days of any request for
the information.

IT IS ORDERED AND DECREED that each party shall pay
all fees and charges for the preparation and filing of that
party’s federal income tax return for 2020.

IT IS ORDERED AND DECREED that each party shall
preserve for a period of seven years from the date of divorce
all presently existing financial and tax-related documents,
information, and records relating to the community and
separate estates of the parties and the preparation of the
party’s federal and, if applicable, state tax returns for 2020.
Each party is ORDERED to allow the other party access to
                            13
these documents, information, and records as reasonably
necessary for the determination of that party’s tax liability or
to respond to an examination or audit by the Internal Revenue
Service or other governmental agency within a reasonable
time after receipt of written notice from the party requesting
access to the documents, information, and records. Access
shall include the right to copy the documents, information,
and records.

 IT IS ORDERED AND DECREED that all payments made to
the other party in accordance with the allocation provisions
for payment of federal income taxes contained in this Agreed
Final Decree of Divorce are not deemed income to the party
receiving those payments but are part of the property division
and necessary for a just and right division of the parties’
estate.

IT IS ORDERED AND DECREED that the parties shall
cooperate with each other and exchange all relevant
information, notices, and documents in the event of an audit
or examination (or notice thereof) of their income tax returns
for any period during their marriage through the date of
divorce by the Internal Revenue Service or other
governmental agency, and each party shall have the right to
participate, at that participant party’s cost and expense, in
that audit or examination individually or by that party’s
designated representative.

IT IS ORDERED AND DECREED that any assets of the
parties not awarded or divided by this Agreed Final Decree
of Divorce are subject to future division as provided in the
Texas Family Code.

IT IS FURTHER ORDERED AND DECREED, as a part of
the division of the estate of the parties, that any liability not
expressly assumed by a party under this decree is to be paid
by the party incurring the liability, and the party incurring
the liability shall indemnify and hold the other party and the
other party’s property harmless from any failure to so
discharge the liability.
                             14
      (Pl. Ex. 1).

        7. As required by the Agreed Final Decree of Divorce, Plaintiff
had Deloitte prepare the 2020 tax returns for both parties.
        8. By correspondence dated December 29, 2021, and March 13,
2022, Plaintiff requested Defendant’s contribution towards the 2020 tax
liability as required within the Agreed Final Decree of Divorce. (Pl. Ex.
3 & 4).
        9. According to Plaintiff’s 2020 federal income tax returns and
calculations, Defendant’s contribution due was $187,244.00.
        10. Defendant failed to comply with the terms of the Agreed
Final Decree of Divorce as she did not remit payment of her
proportionate amount of the 2020 tax liability to the Plaintiff.
        11. On May 10, 2022, Plaintiff filed suit against Defendant
alleging Breach of Contract, petitioning for a Declaratory Judgment,
and requesting Attorney’s Fees.
        12. On June 9, 2022, Process Server, Jeffrey Wilson, served
Defendant.
        13. On July 1, 2022, Defendant filed an Original Answer and
Counterclaims against Plaintiff alleging Breach of Contract, petitioning
for a Declaratory Judgment, and requesting Attorney’s Fees.
        14. On September 25, 2023, the Court commenced the Bench
Trial in this matter and recessed trial at the end of the day.
        15. On September 26, 2023, the Court concluded the Bench Trial
and took the ruling under advisement.
        16. During the Bench Trial, the Court admitted Plaintiff’s Exhibit
2 without objection from Defendant. Plaintiff’s Witness, Jennifer
Wertz, CPA, testified that, in accordance with the terms of the Agreed
Final Decree of Divorce regarding the 2020 tax liability, she calculated
Defendant’s apportioned contribution to the 2020 tax liability to be
$187,244.00. (Pl. Ex. 2).
        17. On December 26, 2023, the Court forwarded to both counsel
for Plaintiff and Defendant it’s written ruling. Therein, the Court set
entry of the Final Judgment for January 26, 2024, on the Court’s 9:00
a.m. Submission Docket.
        18. On January 10, 2024, Defendant filed her Request for
Findings of Fact and Conclusions of Law.
        19. On January 26, 2024, the Court signed the Final Judgment
which had been “Approved as to Form and Entry Requested” by both
counsel for Plaintiff and Defendant.
                                   15
       20. On March 6, 2024, Defendant filed her Notice of Past Due
Findings of Fact and Conclusions of Law.
       21. Any Finding of Fact that is a Conclusion of Law shall be
deemed a Conclusion of Law.
CONCLUSIONS OF LAW
       1. This Court has jurisdiction of the parties and of the subject
matter of this case.
       2. To recover under a breach of contract claim, a plaintiff must
prove the existence of a valid contract, the plaintiff’s performance or
tendered performance, the defendant’s breach of the contract and
damages the plaintiff sustained as a result of the breach. Valley Reg’l
Med. Ctr. v. Wright, 276 F. Supp. 2d 638, 640 (S.D. Tex. 2001) (citing
Valero Mktg. & Supply Co. v. Kalama Int’l Liab. Co., 51 S.W.3d 345,
351 (Tex. App.—Houston 1st Dist. 2001[, no pet.])).
       3. The Agreed Final Decree of Divorce dated July 10, 2020, is a
valid and enforceable contract.
       4. Plaintiff is the proper party to bring suit for breach of the
contract.
       5. Plaintiff performed, tendered performance, or was excused
from performing his contractual obligations. Plaintiff filed the 2020 tax
return in accordance with the contract.
       6. Defendant breached the contract.
       7. Defendant’s breach caused Plaintiff to suffer injury.
       8. Under Texas law, Defendant is also liable to Plaintiff for its
reasonable and necessary attorney’s fees. State law controls the award
of attorney’s fees “where state law supplies the rule of decision.”
Mathis v. Exxon Corp., 302 F.3d 448, 461 (5th Cir. 2002). A party
[“]may recover reasonable attorney’s fees from an individual or
corporation, in addition to the amount of a valid claim and costs, if the
claim is for: . . . (8) an oral or written contract.” TEX. CIV. PRAC. &
REM. CODE § 38.001; see also Uretek (USA), Inc. v. Ureteknologia
de Mex. S.A. de C.V., 589 Fed. Appx. 710, 715 (5th Cir. Tex. 2014)
(holding “the prevailing party in a breach of contract suit, was entitled
to recover its reasonable attorney’s fees”).
       9. Defendant was required to pay any amount of federal income
tax owed by the parties for tax year 2020 over and above the first Two
Hundred Seventy Thousand Dollars ($270,000.00) of federal income
tax owed. The remaining balance thereafter was to be divided equally
between the parties.

                                   16
              10. Despite requests for payment from Plaintiff, Defendant
      failed, refused, or neglected to perform under the Agreed Final Decree
      of Divorce. Defendant did not remit her portion of the 2020 tax liability
      to Plaintiff.
             11. Plaintiff is entitled to recover actual damages from Defendant
      in the amount of $187,244.00 for Defendant’s liability for the 2020
      income tax per the Agreed Final Decree of Divorce.
             12. Plaintiff is entitled to recovery of his reasonable and
      necessary attorney’s fees and costs from Defendant in the amount of
      $30,782.58.
             13. Judicial Notice is taken that post-judgment interest on the
      actual damages awarded shall accrue at the rate of eight and one-half
      (8.5%) compounded annually from the Final Judgment of January 26,
      2024, until all amounts are paid in full.
             14. Any Conclusion of Law that is a Finding of Fact shall be
      deemed a Finding of Fact.

                                 Standard of Review

      In a bench trial, the trial court, as factfinder, is the exclusive judge of the

credibility of witnesses and determines the weight of the testimony and is tasked

with resolving any inconsistencies in the evidence and drawing inferences from

basic facts to ultimate facts. See City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex.

2005); Macpherson v. Aglony, No. 09-21-00004-CV, 2022 Tex. App. LEXIS 7105,

at *35 (Tex. App.—Beaumont Sept. 22, 2022, no pet). (mem. op.). “When a trial

court makes specific findings of fact and conclusions of law following a bench trial

and a reporter’s record is before the appellate court, the findings will be sustained if

there is evidence to support them, and the appellate court will review the legal

conclusions drawn from the facts to determine their correctness.” Macpherson, 2022

Tex. App. LEXIS 7105, at *36 (citing Trelltex, Inc. v. Intecx, L.L.C., 494 S.W.3d
                                          17
781, 789 (Tex. App.—Houston [14th Dist.] 2016, no pet.)). Findings of fact entered

in a bench trial have the same force and dignity as a jury’s answers to jury questions.

See Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991). In an appeal

from a bench trial in which the trial court made findings of fact and conclusions of

law, appellants should challenge the sufficiency of the evidence supporting specific

findings of fact rather than directing such a challenge generally at the judgment as a

whole. See Thompson & Knight LLP v. Patriot Expl., LLC, 444 S.W.3d 157, 162

(Tex. App.—Dallas 2014, no pet.); Carrasco v. Stewart, 224 S.W.3d 363, 367 (Tex.

App.—El Paso 2006, no pet.). “‘If the appellant does not challenge the trial court’s

findings of fact, when filed, these facts are binding upon both the party and the

appellate court.’” Cahill v. Cahill, No. 09-20-00206-CV, 2022 Tex. App. LEXIS

792, at *18 (Tex. App.—Beaumont Feb. 3, 2022, pet. denied) (mem. op.) (quoting

IKB Indus. v. Pro-Line Corp., 938 S.W.2d 440, 445 (Tex. 1997) (citing Wade v.

Anderson, 602 S.W.2d 347, 349 (Tex. App.—Beaumont 1980, writ ref’d n.r.e.)); see

also Ranches at Hamilton Pool Homeowners Ass’n, Inc. v. Red Eagle RH, LP, No.

08-24-00359-CV, 2025 Tex. App. LEXIS 7394, at *6 (Tex. App.—El Paso Sept. 18,

2025, no pet.) (mem. op.) (quoting Carrasco, 224 S.W.3d at 367). In evaluating the

legal sufficiency of the evidence to support a finding, we view the evidence in the

light most favorable to the finding, indulging every reasonable inference supporting

it. See City of Keller, 168 S.W.3d at 822. The ultimate test is whether the evidence

                                          18
allows reasonable and fair-minded people to reach the finding under review. See id.

“A legal sufficiency challenge fails if more than a scintilla of evidence supports the

finding.” Tex. Outfitters, Ltd., LLC v. Nicholson, 572 S.W.3d 647, 653 (Tex. 2019).

In a factual sufficiency review, we view all the evidence in a neutral light and set

aside the finding only if the finding is so contrary to the overwhelming weight of the

evidence such that the finding is clearly wrong and unjust. Betancourt v. Ohmer, No.

09-18-00121-CV, 2019 Tex. App. LEXIS 323, at *9 (Tex. App.—Beaumont Jan.

17, 2019, no pet.) (mem. op.) (citing Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986);

Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986)). We review conclusions

of law de novo. See Macpherson, 2022 Tex. App. LEXIS 7105, at *36.

      The trial court can believe some, all, or none of a witness’s testimony. See

Hometown Motors, LLC v. Jones, No. 09-18-00466-CV, 2020 Tex. App. LEXIS

9235, at **13-14 (Tex. App.—Beaumont Nov. 25, 2020, no pet.) (mem. op.); Rivas

v. Rivas, No. 01-10-00585-CV, 2012 Tex. App. LEXIS 412, at *5 (Tex. App.—

Houston [1st Dist.] Jan. 19, 2012, no pet.) (mem. op.). A party that did not bear the

burden of proof must show that there is no evidence or there is insufficient evidence

to support the court’s findings when challenging the legal sufficiency of an adverse

finding. Broussard v. Vicknair, No. 09-21-00391-CV, 2023 Tex. App. LEXIS 9371,

at *41 (Tex. App.—Beaumont Dec. 14, 2023, no pet.) (mem. op.).




                                         19
        As the appellate court, we are not bound by the trial court’s conclusions of

law. City of Beaumont v. Spivey, 1 S.W.3d 385, 392 (Tex. App.—Beaumont 1999,

pet. denied). We will uphold conclusions of law on appeal if the judgment can be

sustained on any legal theory the evidence supports. Macpherson, 2022 Tex. App.

LEXIS 7105, at *36 (citing BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789,

794 (Tex. 2002); In re Estate of Stafford, 244 S.W.3d 368, 369 (Tex. App.—

Beaumont 2008, no pet.)). Incorrect conclusions of law do not require reversal if the

findings of fact support the judgment under a correct legal theory. See BMC Software

Belg., N.V., 83 S.W.3d at 794; Morrell v. Morrell, No. 09-20-00086-CV, 2022 Tex.

App. LEXIS 2101, at *43 (Tex. App.—Beaumont Mar. 31, 2022, pet. denied) (mem.

op.); In re Estate of Stafford, 244 S.W.3d 368, 369 (Tex. App.—Beaumont 2008, no

pet.)

             The Only Finding of Fact Challenged by Nancy on Appeal

        Nancy challenges Finding of Fact number 16, which provides:

        16. During the Bench Trial, the Court admitted Plaintiff’s Exhibit 2
        without objection from Defendant. Plaintiff’s Witness, Jennifer Wertz,
        CPA, testified that, in accordance with the terms of the Agreed Final
        Decree of Divorce regarding the 2020 tax liability, she calculated
        Defendant’s apportioned contribution to the 2020 tax liability to be
        $187,244.00. (Pl. Ex. 2).




                                         20
               Conclusions of Law Challenged by Nancy on Appeal

      Nancy challenges Conclusions of Law numbers 2, 5, and 9 which provide as

follows:

      2. To recover under a breach of contract claim, a plaintiff must prove
      the existence of a valid contract, the plaintiff’s performance or tendered
      performance, the defendant’s breach of the contract and damages the
      plaintiff sustained as a result of the breach. Valley Reg’l Med. Ctr. v.
      Wright, 276 F.Supp. 2d 638, 640 (S.D. Tex. 2001) (citing Valero Mktg.
      & Supply Co. v. Kalama Int’l Liab. Co., 51 S.W.3d 345, 351 (Tex. App
      —Houston 1st Dist. 2001[, no pet.))

      5. Plaintiff performed, tendered performance, or was excused from
      performing his contractual obligations. Plaintiff filed the 2020 tax
      return in accordance with the contract.

      9. Defendant was required to pay any amount of federal income tax
      owed by the parties for tax year 2020 over and above the first Two
      Hundred Seventy Thousand Dollars ($270,000.00) of federal income
      tax owed. The remaining balance thereafter was to be divided equally
      between the parties.

                                      Analysis

      Both parties agree they are bound by the terms of their Divorce Decree. The

uncontroverted evidence before the trial court showed that Deloitte prepared and

filed 2020 income tax returns for Nancy and Douglas as provided for in the Divorce

Decree. Douglas testified that Nancy had received the required documentation

pertaining to the 2020 taxes because at the time of the divorce, in July 2020, Deloitte

had just ended its fiscal year, and Deloitte sent Nancy and Douglas a copy of their

respective individual 2020 income tax returns. Nancy did not deny that she received

                                          21
Douglas’s letter demanding her payment of the taxes along with a copy of Douglas’s

2020 tax return, and a copy of her own 2020 income tax return.

      The trial court heard testimony from both Douglas and his expert, Wertz,

regarding the significance of Deloitte operating on a June 1st to May 31st fiscal year.

Douglas and Wertz testified how that impacted the way in which the parties had filed

income tax returns historically and notably for tax year 2020. Douglas and Wertz

testified that under the wording of the Divorce Decree, taxes on the sale of assets

after the date of divorce by either party and employment income of each party after

the date of divorce, would be the sole responsibility of that party. Further, Douglas

and Wertz testified that under the Divorce Decree, Douglas was required to pay the

first $270,000 of federal income tax for tax year 2020, and then the remaining

balance thereafter was to be divided equally between the parties. According to Wertz

and Douglas, Nancy’s 2020 tax liability to Douglas was then calculated after

subtracting the first $270,000 of taxes, and then the remainder of taxes for 2020

being divided equally between the parties. Douglas and Wertz testified that as per

the 2020 income tax returns prepared by Deloitte, the total taxes due for that fiscal

year totaled $892,087, of which $640,317 was reflected on Douglas’s tax return and

$251,770 was reflected on Nancy’s tax return, with Nancy being responsible for

$247,599 in capital gains from her sale of stocks (separate property) after the divorce

per the Divorce Decree, and Douglas being responsible under the Divorce Decree

                                          22
for the first $270,000, and that left a remaining tax balance of $374,488. According

to the testimony from the witnesses, fifty percent of that remaining tax balance was

to be allocated to Nancy pursuant to point 3 of paragraph 1 on page 12 of the Divorce

Decree. Douglas testified that he went ahead and paid the full tax amount and then

he sent a letter to Nancy informing her that her share of the 2020 taxes was $187,244.

Nancy’s attorney sent Douglas a letter disputing that amount, and after Douglas’s

attorney sent demand letters, Douglas filed suit alleging a breach of the Divorce

Decree and seeking a reimbursement of the taxes plus attorney’s fees.

                   Legal and Factual Sufficiency of the Evidence
                             As to Finding of Fact 16

      If more than a scintilla of evidence exists to support finding 16, the legal

sufficiency challenge fails. See Formosa Plastics Corp. USA v. Presidio Eng’rs &

Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998); see also King Ranch, Inc. v.

Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (more than a scintilla of evidence exists

when the evidence “rises to a level that would enable reasonable and fair-minded

people to differ in their conclusions[]”). We conclude on the record before us that

there is more than a scintilla of evidence to support the trial court’s Finding of Fact

16.

      We reach this conclusion because, as summarized above, the exhibits

admitted at trial, including without limitation the Divorce Decree and the 2020 tax

return, along with the testimony from Wertz and Douglas, provide some evidence to
                                          23
support the trial court’s Finding of Fact 16, that “[d]uring the Bench Trial, the Court

admitted Plaintiff’s Exhibit 2 without objection from Defendant. Plaintiff’s Witness,

Jennifer Wertz, CPA, testified that, in accordance with the terms of the Agreed Final

Decree of Divorce regarding the 2020 tax liability, she calculated Defendant’s

apportioned contribution to the 2020 tax liability to be $187,244.00. (Pl. Ex. 2).”

Based on the record before us, we find the evidence was legally sufficient and we

overrule the no-evidence challenge made by Nancy to Finding of Fact 16. See BMC

Software Belg., N.V., 83 S.W.3d at 794; see also King Ranch, Inc., 118 S.W.3d at

751 (explaining that more than a scintilla of evidence exists when the evidence “rises

to a level that would enable reasonable and fair-minded people to differ in their

conclusions[]”).

      Next, we examine the challenged finding under a factual sufficiency standard.

When an appellant challenges the factual sufficiency of the evidence on a finding,

we consider all the evidence supporting and contradicting the finding. Plas-Tex, Inc.

v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989). We set aside the finding for

factual insufficiency only if the finding is so contrary to the evidence as to be clearly

wrong and manifestly unjust. See Betancourt, 2019 Tex. App. LEXIS 323, at *9. We

must be mindful that in a bench trial, the trial court, as factfinder, is the sole judge

of the credibility of the witnesses. See Macpherson, 2022 Tex. App. LEXIS 7105,

at *35 (citing City of Keller, 168 S.W.3d at 819-20; Sw. Bell Tel. Co. v. Garza, 164

                                           24
S.W.3d 607, 625 (Tex. 2004)). Accordingly, as long as the evidence falls “within

[the] zone of reasonable disagreement[,]” we will not substitute our judgment for

that of the factfinder. See City of Keller, 168 S.W.3d at 822.

      After reviewing the entire record and considering all the evidence supporting

and contradicting the trial court’s Finding of Fact 16, we conclude the finding is not

so contrary to the overwhelming weight of the evidence as to be clearly wrong and

manifestly unjust. See Betancourt, 2019 Tex. App. LEXIS 323, at *9. Even though

Nancy argues that Douglas failed to provide her with a copy of the K-1 document

for the 2020 tax return, and Nancy argues the expert, Jennifer Wertz, made

calculations which failed to give Nancy credit for previous taxes Douglas had

deducted from Nancy’s share of other funds she received, the trial court had an

unobjected-to copy of the Divorce Decree, and the trial court heard testimony from

Wertz, a CPA, who testified that, in accordance with the terms of the Agreed Final

Decree of Divorce regarding the 2020 tax liability, she calculated Defendant’s

apportioned contribution to the 2020 tax liability to be $187,244. As the finder-of-

fact, the trial court could have chosen to believe some, all, or none of the testimony

Wertz provided. See Hometown Motors, 2020 Tex. App. LEXIS 9235, at **13-14;

Rivas, 2012 Tex. App. LEXIS 412, at *5. We conclude that the trial court had

factually sufficient evidence before it that the amount of Nancy’s apportioned




                                         25
responsibility for the 2020 tax liability is $187,244. We overrule Nancy’s factual

sufficiency challenge to Finding of Fact 16.

                    Challenges to Conclusions of Law 2, 5, & 9

      With respect to Nancy’s challenges to Conclusions of Law 2, 5, & 9, in her

appellate brief she argues that each of these conclusions are erroneous as a matter of

law because Douglas failed to establish the elements necessary to recover on a

breach of contract claim. Nancy contends Douglas failed to give her a copy of his

K-1 until the time of trial, which she says constituted a breach of contract by Douglas

because he had an obligation to give her a copy. She also argues that on cross-

examination, she got Wertz to agree she was supposed to have been given credit for

the taxes she had already paid, and Douglas failed to meet his burden to show she

owed $187,244.

      A party may not challenge conclusions of law on grounds of factual

insufficiency, but the party may challenge a conclusion of law as incorrect. BMC

Software Belg., N.V., 83 S.W.3d at 794. “We review [a] trial court’s conclusions of

law de novo and will affirm if the trial court correctly drew the legal conclusion from

the facts.” Patton v. Echols, No. 09-22-00334-CV, 2024 Tex. App. LEXIS 7751, at

*51 (Tex. App.—Beaumont Oct. 31, 2024, no pet.) (mem. op.) (citing BMC Software

Belg., N.V., 83 S.W.3d at 794; Sheetz v. Slaughter, 503 S.W.3d 495, 502 (Tex.

App.—Dallas 2016, no pet.)). Erroneous conclusions of law do not require reversal

                                          26
if the reviewing court determines the trial court rendered the proper judgment. BMC

Software Belg., N.V., 83 S.W.3d at 794. Conclusions of law must be upheld on

appeal if any legal theory that sustains the judgment is supported by the evidence.

Patton, 2024 Tex. App. LEXIS 7751, at *51.

      Conclusion of Law 24 merely states the necessary elements of a breach of

contract claim. In her appellate brief, Nancy fails to make any argument about why

this conclusion is an erroneous statement of the applicable law. Rule 38.1 of the

Texas Rules of Appellate Procedure mandates that an appellant’s brief must contain

a clear and concise argument for the contentions made, with appropriate citations to

authorities and the record. See Tex. R. App. P. 38.1(h), (i). The failure to brief, or to

adequately brief, an issue by an appellant causes a waiver of that issue on appeal.

RSL Funding, LLC v. Newsome, 569 S.W.3d 116, 126 (Tex. 2018); Fielding v.

Tullos, No. 09-17-00203-CV, 2018 Tex. App. LEXIS 7136, at *36 (Tex. App.—

Beaumont Aug. 30, 2018, no pet.) (mem. op.) (citing Gen. Servs. Comm’n v. Little-

Tex Insulation Co., 39 S.W.3d 591, 598 n.1 (Tex. 2001)). That said, we conclude


      4
          Conclusion of Law 2 stated as follows:

      To recover under a breach of contract claim, a plaintiff must prove the
      existence of a valid contract, the plaintiff’s performance or tendered
      performance, the defendant’s breach of the contract and damages the
      plaintiff sustained as a result of the breach. Valley Reg’l Med. Ctr. v.
      Wright, 276 F.Supp. 2d 638, 640 (S.D. Tex. 2001) (citing Valero Mktg.
      & Supply Co. v. Kalama Int’l Liab. Co., 51 S.W.3d 345, 351 (Tex.
      App.—Houston 1st Dist. 2001[, no pet.])).
                                          27
Conclusion of Law 2 correctly states the necessary elements of a breach of contract

claim. See Macpherson, 2022 Tex. App. LEXIS 7105, at *43 n.4 (citing Trahan v.

Fire Ins. Exchange, 179 S.W.3d 669, 674 (Tex. App.—Beaumont 2005, no pet.)).

Accordingly, we overrule Nancy’s challenge to Conclusion of Law 2.

      In Conclusion of Law 5, the trial court found “[Douglas] performed, tendered

performance, or was excused from performing his contractual obligations. [Douglas]

filed the 2020 tax return in accordance with the contract.” And, then in Conclusion

of Law 9, the trial court states:

      9. [Nancy] was required to pay any amount of federal income tax owed
      by the parties for tax year 2020 over and above the first Two Hundred
      Seventy Thousand Dollars ($270,000.00) of federal income tax owed.
      The remaining balance thereafter was to be divided equally between the
      parties.

      The trial court made several material factual findings and conclusions Nancy

does not challenge. For example, Nancy has not challenged Findings of Fact 8 or 10

wherein the trial court found: “ . . . [Douglas] requested [Nancy’s] contribution

towards the 2020 tax liability as required within the Agreed Final Decree of

Divorce[]” and “[Nancy] failed to comply with the terms of the Agreed Final Decree

of Divorce [when] she did not remit payment of her proportionate amount of the

2020 tax liability to [Douglas].” Similarly, Nancy has not challenged other

Conclusions of Law, wherein the trial court concluded that “the Divorce Decree was

a valid and enforceable contract; Douglas was the proper party to bring suit for

                                        28
breach of the contract; Douglas performed his requirements; Nancy breached the

contract; and Nancy’s breach caused Douglas injury.”

      As we stated earlier, an appellant is not entitled to challenge a trial

court’s conclusions of law for factual sufficiency, but an appellate court may review

the legal conclusions drawn from the facts to determine their correctness. See BMC

Software Belg., N.V., 83 S.W.3d at 794. In an appeal from a bench trial, we review

the conclusions of law de novo and will uphold them if the judgment can be sustained

on any legal theory supported by the evidence. Id. “If the reviewing court determines

a conclusion of law is erroneous, but the trial court rendered the proper judgment,

the erroneous conclusion of law does not require reversal.” Id. For the reasons

explained below, we conclude that the trial court did not err in reaching Conclusions

of Law 2, 5, and 9, and further that the judgment can be sustained based on Nancy’s

breach of the Divorce Decree.

      Nancy argues that because Douglas did not provide all documentation, he did

not perform all his contractual duties. Nancy specifically notes that Douglas did not

produce the K-1 tax form that was applicable to the 2020 tax return and information

regarding pension payments received by Douglas from Deloitte after the date of the

divorce. Nancy’s argument relies on her interpretation of facts and evidence either

explicitly or implicitly rejected by the trial court. The trial court found that Douglas

had performed under the Divorce Decree, and the trial court expressly rejected

                                          29
Nancy’s arguments that Douglas had failed to perform under the Divorce Decree

and that Douglas had miscalculated her 2020 tax liability. The trial court did not err

in concluding that

      [Nancy] was required to pay any amount of federal income tax owed
      by the parties for tax year 2020 over and above the first Two Hundred
      Seventy Thousand Dollars ($270,000.00) of federal income tax owed.
      The remaining balance thereafter was to be divided equally between the
      parties.

      The appellate court’s task in construing a contract is to ascertain and give

effect to the parties’ intentions as expressed in the contract. Kelley-Coppedge, Inc.

v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998). It is true that a material

breach by one party to a contract may excuse the other party from its obligation to

perform under the agreement. See Mustang Pipeline Co. v. Driver Pipeline Co., 134

S.W.3d 195, 196 (Tex. 2004). That said, the determination of whether a breach is

material will generally be a question of fact for the factfinder. See Henry v. Masson,

333 S.W.3d 825, 835 (Tex. App.—Houston [1st Dist.] 2010, no pet.). Here, the trial

court was the factfinder and it could have resolved any conflicts in the evidence and

could have found that the necessary information that Douglas was required to

provide to Nancy for the 2020 tax return preparation was provided, or it could have

concluded that even if Douglas failed to provide a copy of the K-1, that failure was

not a material breach of Douglas’s obligations under the Divorce Decree, and it




                                         30
could have wholly rejected Nancy’s argument.5 We find that Conclusions of Law 2,

5, and 9 are not erroneous as a matter of law. We overrule Nancy’s challenges to

Conclusions of Law 2, 5, and 9.

      Having overruled Appellant’s issue and challenges on appeal, we affirm the

trial court’s judgment.

      AFFIRMED.


                                                         LEANNE JOHNSON
                                                              Justice

Submitted on May 16, 2025
Opinion Delivered April 16, 2026

Before Golemon, C.J., Johnson and Chambers, JJ.




      5
         Douglas testified that the information reported on Schedule E is the same
information that is included on the K-1.Wertz also testified that the K-1 information
is reflected on the Schedule E to Douglas’s 2020 Tax Return, which was given to
Nancy.

                                         31