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Gallis v. Papadogiannis

Court of Appeals of Texas, First District

February 23, 2017

PENNY GALLIS, Appellant
v.
GEORGE PAPADOGIANNIS, Appellee

         On Appeal from the 245th District Court Harris County, Texas Trial Court Case No. 2011-30520

          Panel consists of Chief Justice Radack and Justices Higley and Huddle.

          MEMORANDUM OPINION

          Sherry Radack Chief Justice

         This is an appeal from a judgment arising from the trial court's interpretation of the parties' 2011 divorce decree. We affirm in part and reverse and render in part.

         PRIOR PROCEEDINGS AND THE 2011 DECREE

         On July 27, 2011, the trial court signed an Agreed Final Decree of Divorce (the 2011 Decree) dissolving the marriage between Penny Gallis (f/k/a Penny Papadogiannis) and George Papadogiannis. It was also signed by Penny, Penny's attorney, and George (who was pro se).

         The 2011 Decree appointed the parties as Joint Managing Conservators of their minor child, N.P., and awarded Penny the exclusive right to designate N.P.'s primary residence with a Standard Possession Order governing visitation. George was ordered to pay $1, 500 per month in child support, monthly spousal maintenance, Penny's health insurance premiums, as well as maintain N.P.'s health insurance policy as additional child support, and obligated him to pay all medical costs for N.P. not covered by insurance and the college expenses of both N.P. and M.P. (the parties' adult child).

         The relevant property division and spousal support obligations from the 2011 Decree are as follows:

         Division of Marital Estate

The Court finds that the following is a just and right division of the parties' marital estate, having due regard for the rights of each party and the child of the marriage.
Property to Husband
IT IS ORDERED AND DECREED that the husband GEORGE PAPADOGIANNIS, is awarded the following as his sole and separate property, and the wife is divested of all right, title, interest, and claim in and to that property:
H-1. The following real property, including but not limited to any escrow funds, prepaid insurance, utility deposits, keys, house plans, home security access and code, garage door opener, warranties and service contracts, and title and closing documents:
The home located at 31-42 34th' Street, Astoria, New York 11106.
H-2. An undivided Twenty percent (20%) interest of the amount invested by GEORGE PAPADOGIANNIS in a residence to be purchased within eighteen months of entry of this Agreed Final Decree of Divorce. Such residence to be chosen by PENNY PAPADOGIANNIS and paid for with $700, 00 [sic] invested by GEORGE PAPADOGIANNIS, plus any additional funds borrowed by PENNY PAPADOGIANNIS. In the event that PENNY PAPADOGIANNIS chooses a residence that costs less than $700, 000. IT IS ORDERED that GEORGE PAPADOGIANNIS shall pay the full purchase price, plus closing costs and fees up to but not to exceed $700, 000.00.
The parties agree and so IT IS ORDERED that GEORGE PAPADOGIANNIS will pay all costs for water service, property taxes and insurance on the residence until [N.P.] reaches the age of majority or PENNY PAPADOGIANNIS sells the residence, whichever event occurs first. IT IS FURTHER ORDERED that PENNY PAPADOGIANNIS may opt to buy GEORGE PAPADOGIANNIS out of his Twenty (20%) interest at any time within ten years of the initial purchase. In the event of the death of one of the parties, IT IS ORDERED that the deceased party's share shall pass to the children equally.
. . . .
Property to Wife
IT IS ORDERED AND DECREED that the wife, PENNY PAPADOGIANNIS, is awarded the following as her sole and separate property, and the husband is divested of all right, title, interest, and claim in and to that property:
. . . .
W-5. An undivided interest, less 20% of the amount invested by GEORGE PAPADOGIANNIS as described herein above in a residence to be purchased within twenty four (24) months of entry of this Agreed Final Decree of Divorce. Such residence to be chosen by PENNY PAPADOGIANNIS and paid for with $700, 000 invested by GEORGE PAPADOGIANNIS, plus any additional funds borrowed by PENNY PAPADOGIANNIS.
In the event that PENNY PAPADOGIANNIS chooses a residence that costs less than $700, 000, IT IS ORDERED that GEORGE PAPADOGIANNIS shall pay the full purchase price, plus closing costs and fees, but not to exceed $700, 000.00. If the residence costs less than $700, 000.00, IT IS ORDERED that GEORGE PAPADOGIANNIS is to pay the difference between $700, 000.00 and the purchase price directly to PENNY PAPADOGIANNIS no later than the date of closing of the purchase of such residence.
The parties agree and so IT IS ORDERED that GEORGE PAPADOGIANNIS will pay all costs for water service, property taxes and insurance on the residence until [N.P.] reaches the age of majority or PENNY PAPADOGIANNIS sells the residence, whichever event occurs first. IT IS FURTHER ORDERED that PENNY PAPADOGIANNIS may opt to buy GEORGE PAPADOGIANNIS out of his Twenty (20%) interest at any time within ten years of the initial purchase. In the event of the death of one of the parties. IT IS ORDERED that the deceased party's share shall pass to the children equally.
Division of Debt
Debts to Husband
IT IS ORDERED AND DECREED that the husband, GEORGE PAPADOGIANNIS, shall pay, as a part of the division of the estate of the parties, and shall indemnify and hold the wife and her property harmless from any failure to so discharge, these items:
. . . .
H-4. The sum of Seven Hundred Thousand dollars ($700, 000.00) payable to PENNY PAPADOGIANNIS and to be used for the purchase of a residence within twenty four (24) months of entry of this Agreed Final Decree of Divorce. Such residence is to be chosen by PENNY PAPADOGIANNIS and paid for GEORGE PAPADOGIANNIS, plus any additional funds borrowed by PENNY PAPADOGIANNIS. In the event that PENNY PAPADOGIANNIS chooses a residence that costs less than $700, 000, IT IS ORDERED that GEORGE PAPADOGIANNIS shall pay the full purchase price, plus closing costs and fees, but not to exceed $700, 000.00. If the residence costs less than $700, 000.00, IT IS ORDERED that GEORGE PAPADOGIANNIS is to pay the difference between $700, 000.00 and the purchase price directly to PENNY PAPADOGIANNIS no later than the date of closing of the purchase of such residence.
H-5. All costs for water service, property taxes and insurance on the above-mentioned residence to be chosen by PENNY PAPADOGIANNIS, until [N.P.] reaches the age of majority, or PENNY PAPADOGIANNIS sells the residence, whichever event occurs first.
. . . .
Debts to Wife
IT IS ORDERED AND DECREED that the wife, PENNY PAPADOGIANNIS, shall pay, as a part of the division of the estate of the parties, and shall indemnify and hold the husband and his property harmless from any failure to so discharge, these items:
W-1. All encumbrances, ad valorem taxes, liens, assessments, or other charges due or to become due on the real and personal property awarded to the wife in this decree unless express provision is made in this decree to the contrary.
. . . .
Additional Agreements
. . . .
The parties agree further and so IT IS ORDERED that GEORGE PAPADOGIANNIS shall pay for water and major repairs to the house purchased by PENNY PAPADOGIANNIS. Major repairs shall be defined as any repair costing more than $500.00.
Court-Ordered Maintenance
The Court finds that under the circumstances presented in this case, PENNY PAPADOGIANNIS is eligible for maintenance under the provisions of Texas Family Code chapter 8. Accordingly, GEORGE PAPADOGIANNIS is ordered to pay as maintenance the sum of five thousand dollars ($5000.00) per month to PENNY PAPADOGIANNIS, with the first payment being due on August 1, 2011, and a like amount being due on the first day of each consecutive month thereafter until the earliest of one of the following events occurs:
1. PENNY PAPADOGIANNIS purchases a residence - If PENNY PAPADOGIANNIS purchases a residence, IT IS ORDERED that GEORGE PAPADOGIANNIS shall pay as maintenance the sum of Four Thousand Dollars ($4, 000.00) per month to PENNY PAPADOGIANNIS, with the first payment being due on the first day of the month after PENNY PAPADOGIANNIS moves into such purchased residence; and a like amount being due on the first day of each consecutive month thereafter until the earliest of one of the following events occurs:
2. death of either Petitioner or Respondent;
3. remarriage of PENNY PAPADOGIANNIS; or
4. further orders of the Court affecting the spousal maintenance obligation.
Payment shall be made by GEORGE PAPADOGIANNIS directly to PENNY PAPADOGIANNIS by cash, cashier's check, or money order at the last known address provided to GEORGE PAPADOGIANNIS by PENNY PAPADOGIANNIS.

         THE UNDERLYING PROCEEDINGS

         A. George's Motion to Modify and Breach of Contract Claim

         On October 22, 2013, George filed an Original Petition to Modify Suit Affecting the Parent-Child Relationship, Damage Suit for Parental Alienation and Interference with Possessory Interest in Child, and Suit for Breach of Contract in the court of continuing jurisdiction. The filing alleged that the "circumstances of the child or a person affected by the Order to be modified have materially and substantially changed since the rendition of the Order."

         Specifically, George alleged that the 2011 Decree obligated Penny to purchase a house within 18 or 24 months (as there are conflicting time limitations in the decree), but that 26 months had passed without Penny doing so, despite George having provided $681, 000.00 to her in cash towards his obligation to pay the purchase price up to $700, 000.00. Moreover, he asserts that Penny moved N.P. to New York with no notice-a place far away from George and with a much higher cost of living. He points out that the rebuttable presumption under the Texas Family Code is that spousal maintenance is not warranted unless the spouse seeking maintenance has exercised diligence in earning sufficient income to provide for the spouse's reasonable needs during a period of separation and during the time the suit for dissolution of the marriage is pending. He contends that she has not done so, and that the move to New York has reduced the likelihood of her being able to support herself, and has degraded N.P.'s living conditions, and has prejudiced his ability to see N.P.:

f. . . . . Respondent, at no time during the pendency of the divorce or during the 26 months post-divorce, has made any effort to provide for her own minimum reasonable needs, and has, post-divorce, moved herself and the child to the State of New York, in which, given Respondent's background and education, the likelihood of obtaining employment adequate to supporting herself, is significantly reduced by a move from the Houston, Texas area and the comparative economic conditions of each location.
g. The move to the State of New York has further degraded the living conditions for the child the subject of this suit, due in part to a dramatic increase in the cost of living in comparison to the Houston, Texas region.
h. In the belief that he was acting in the best interest of all parties, including the child and himself, Petitioner consented to no geographical restriction on the residence of the child, financing the purchase of a $700, 000.00 home presumably in the geographical area of his place of employment, and the payment of generous spousal support for the lifetime of Respondent or himself.
i. Respondent's actions for the 26 months, post-divorce, have exhibited a distinct lack of concern for the living conditions of herself and the child the subject of this suit, behavior that is erratic and devoid of common sense, have alienated the child and Petitioner, and have severely curtailed the times of possession and access of the child by Petitioner, specifically by her erratic communications with Respondent, and her inability to follow through on visitation plans that have been previously agreed to by the parties.

         1. Modifications Sought

         Based on these allegations of changed circumstances, George sought the following modifications to the 2011 Decree.

- Allow Penny to remain joint managing conservator with the exclusive right to designate N.P.'s primary residence, but with a geographical restriction requiring that residence be in Harris County or the counties contiguous to Harris County.
- Vacate George's spousal support obligation or, alternatively, "reduce[] to a sum of $1, 000.00 per month if and only if Respondent and child the subject of this suit, move their permanent residence to Harris County, Texas or counties contiguous thereto, and that such payment of $1, 000.00 per month continue until the earliest occurrence of one of the following events: (1) the expiration of 24 months from the date of entry of the Order of Modification; (2) the total sum of $24, 000.00 is paid in full to Respondent; (3) the death of either Penny Gallis or George Papadogiannis; (4) remarriage of Penny Gallis; or (5) further orders of the Court affecting the spousal maintenance obligation.

         2. Damages Sought

         George further requested a finding that Penny breached her contractual agreement to purchase a home within 24 months by failing to do so "following the good faith delivery of the sum of $681, 000.00 to her by George Papadogiannis within the agreed time frame." He requested that the court award him a judgment against Penny for $681, 000.00. He also requested an award of attorneys' fees.

         3. Penny's Answer

         Penny entered a general denial and sought attorneys' fees, characterizing George's motion as filed frivolously and designed to harass her.

         B. Penny's Counter-Petition to Modify Parent-Child Relationship

         On November 25, 2013, Penny filed a motion also alleging that the "circumstances of the child, a conservator, or other party affected by the order to be modified have materially and substantially changed since the date of rendition of the order to be modified." As a result, she requested a modification to the standard possession order that would require George's visits with N.P. be supervised, and alleged that change was in N.P.'s best interest. She also requested that George's monthly child support obligation be increased because the amount awarded "differs by $100 from the amount that would be awarded in accordance with the guidelines in chapter 154 of the Texas Family Code, " and such an increase would be in N.P.'s best interest.

         Penny additionally requested a temporary injunction prohibiting George from disturbing the peace of N.P. or another party, and prohibiting George from disparaging Penny or Penny's family around N.P. She requested a permanent injunction be entered that would prohibit both George and Penny from disrupting the peace of N.P., and prohibit both from making disparaging remarks about the other party or their family within hearing range of N.P. Finally, she prayed for an award of her attorneys' fees and costs.

         C. George's request for Temporary Orders

         On February 20, 2014, George requested temporary orders for the "safety and welfare of" N.P., including (1) in the alternative, appointing George joint managing conservator with rights and duties provided in section 153.132 of the Texas Family Code, appointing George as joint managing conservator with the exclusive right to determine N.P.'s place of residence, or ordering Penny to return N.P. to Harris County and impose geographical restrictions upon anyone awarded the exclusive right to determine the child's place of residence, (2) ordering the parties to mediate, (3) ordering Penny to produce 2010-2013 tax returns, a financial statement, and current pay stubs, (4) ordering the return of money George gave to Penny to purchase a home, (5) abating George's alimony payment obligations, (6) abating George's child-support payment obligations and ordering Penny to pay child support, (7) appointing a guardian ad litem, an attorney ad litem, and an amicus attorney, and (8) requiring Penny to execute a bond or security deposit to ensure Penny's compliance with the 2011 Decree's visitation provisions. George's motion was supported with an attached affidavit averring that Penny moved N.P. to New York without the notice required by the 2011 Decree, that Penny has engaged in harassing and stalking behavior towards George, and that Penny has denied him access to N.P. on numerous occasions that George was allowed visitation under the 2011 Decree.

         D. Penny's Motion for Enforcement by Contempt of Spousal Maintenance Order

         On March 10, 2014, Penny filed a motion requesting that George be jailed and fined for failing to make spousal support payments in February and March of 2014. She also requested the unpaid $10, 000 be reduced to a money judgment, along with attorneys' fees and costs, and an order of wage withholding.

         E. The Mediated Settlement Agreement

         On April 21, 2014, the parties entered into a Mediated Settlement Agreement for Band-Aid Order. The Order (1) abated George's May 2014 alimony obligation, (2) allowed Penny to use $14, 000.00 of the money George provided her to purchase a home for daily living expenses instead, (3) required Penny to deposit $667, 000 into her attorney's IOLTA account, and (4) required the parties to re-set their motions seeking relief from the trial court to a later date to allow the amicus to conduct further investigation into the parties' allegations.

         F. Penny's Motions for Enforcement

         Throughout the pre-trial period, Penny filed several additional motions for enforcement of the parties' decree and requests for the court to hold George in contempt for the failure to abide by his obligations.

         G. George's Answer

         On May 27, 2014, George filed an Original Answer and Motion to Enter Rule 13 Sanctions. In addition to a General Denial, he asserted that the provisions of the 2011 Decree are too ambiguous to be enforced by contempt, because "it is not clear and specific enough in its terms that Respondent knows what duties or obligations are required."

         The Answer also states that George lacked, and continues to lack, the ability to pay alimony in the amount ordered and lacks property that can be sold, mortgaged or otherwise pledged. He also claims he unsuccessfully attempted to borrow the funds. Finally, he alleged that contrary to Penny's assertion in her motion for contempt, he has paid certain amounts of maintenance to Penny or on her behalf. He also sought attorneys' fees.

         George sought Rule 13 sanctions based on his disputing the factual basis of Penny's motion for contempt:

1. Movant denies any spousal maintenance arrearage and if any arrearage has occurred, that no such arrearage has existed over 30 days.
2. At no time since the previous order has Movant provided Respondent with a) sufficient notice of her new residential addresses; b) any information concerning the location and/or price of a new residence as outlined by the parties' decree within the time period required, set as a condition precedent for payment by Respondent to Movant; c) at no time was Respondent unreachable or unavailable to Movant for the purposes of communication; and d) the Respondent released funds to the Movant for the purchase of a residence in compliance with the terms of the decree for which the Movant failed to select was not due, nor has the Movant returned said funds to the Respondent in excess of $640, 000.00.
3 Both Movant and her attorney, S. JAN ROSENTHAL COHEN, are well acquainted with the above alleged facts and the Court's file as of the filing of this motion Respondent would show that there is absolutely no factual or legal basis for the filing or alleging that Respondent has not complied with the spousal maintenance order and the previous order to be enforced Respondent would further show that Movant authorized her attorney S. JAN ROSENTHAL COHEN to file and prosecute said allegations and request for damages, including incarceration for failure to abide by the previous order. S. JAN ROSENTHAL COHEN signed such pleading, thus, both the Movant and her attorney certified that they read such pleading and to the best of their knowledge, information and belief formed after reasonable inquiry, such allegation was not: (a) groundless and brought in bad faith or (b) groundless and brought for the purpose of harassment. Respondent would show that such certification by Movant and her attorney. S. JAN ROSENTHAL COHEN, is false and that such allegation is groundless and (a) was brought in bad faith or (b) brought for the purposes of harassment; consequently, pursuant to Rule 13 of the Texas Rules of Civil Procedure, both Movant and her attorney S.JAN ROSENTHAL COHEN, should be sanctioned pursuant to Rule 13 and Rule 215.2(b) of the Texas Rules of Civil Procedure upon S.JAN ROSENTHAL COHEN who signed such pleading and Movant who is the represented party.

         As sanctions, George sought attorneys' fees of at least $5, 000 from Penny, and monetary damages of $5, 000 from Penny's attorney.

         H. Penny's Motion to Release IOLTA Funds

         On September 12, 2014, Penny Filed an Emergency Motion to Release Funds from her attorney's IOLTA Account. She alleged that since April 23, 2014, she had found several suitable houses, but that she lost them due to lacking funds to submit with an earnest money contract. She further alleged that, on August 26, 2014, her attorney wrote a letter to George's attorney that she was submitting an offer on a house, but needed $60, 000 for the earnest money. After not receiving a reply from George's attorney, on September 3, 2014, Penny's attorney withdrew $60, 000 from her IOLTA account and gave it to Penny. Penny requested that the court permit her to withdraw the remaining $590, 000 in the IOLTA account, order George to pay the additional $50, 000 owed with interest, and award her attorneys' fees.

         I. Penny's Motion to Compel and the Trial Court's Ruling

         On September 22, 2014, Penny filed a Motion to Compel Discovery and for Sanctions. She alleged, and quoted specific examples, of requests for financial documents-including tax returns, bank statements, K-1, etc.-that George refused to produce and made allegedly frivolous objections to. Penny requested, as relief, that (1) all of George's objections be overruled, (2) George be ordered to pay Penny's attorney's fees, (3) the court prohibit George from making any objections to future discovery propounded by Penny, (4) George be prohibited from conducting future discovery, and (5) George's pleadings be stricken.

         On November 18, the trial court granted Penny's motion to compel production of various documents. In response to Penny's request for sanctions, the court ordered that the issues of attorneys' fees would be taken up at trial.

         J. George's Motion for ...


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