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458 S.W.3d 155
Tex. App.
2015
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Background

  • Luc and Katy divorced; decree (Feb 11, 2011) allocated certain ConocoPhillips stock options: 60% equitable interest to Katy, 40% to Luc, but the company’s plan prevented transfer of option grants—only Luc could exercise them.
  • Decree created a constructive trust and described Katy as having "equitable ownership" and the right to benefits upon exercise; required Luc to account and transfer net proceeds to Katy.
  • Katy demanded Luc exercise options; Luc refused, asserting he had discretion to time exercises (claiming fiduciary duty to maximize value and other motivations including travel-restriction enforcement).
  • Katy sued (enforcement, declaratory relief, contempt, breach of fiduciary duty, accounting); trial court ordered Luc to exercise options as requested, imposed fines for noncompliance, found Luc breached fiduciary duty, and awarded Katy $59,198.75 in fees/costs plus appellate-fee placeholders.
  • On appeal, parties informed the court Luc had since exercised all options and paid Katy; the court held many relief items enforcing/clarifying the decree and the breach finding were moot, vacated those parts, but resolved two live issues: (1) whether Katy had the right to demand exercise timing, and (2) entitlement/amount of attorney’s fees.

Issues

Issue Plaintiff's Argument (Katy) Defendant's Argument (Luc) Held
Who controls timing of exercising options Decree gave Katy equitable ownership and the right to direct exercise; Luc must exercise on her demand Decree left discretion to Luc as constructive trustee to time exercises to maximize value Court: Decree unambiguous — Katy has the right to determine timing; overrules Luc’s contention
Trial court’s clarifying enforcement orders & contempt remedies Clarifications and enforcement mechanisms were necessary to effectuate decree Luc argued court improperly added detailed performance mandates and penalties Court: Those clarifying/enforcement provisions became moot after Luc exercised options; portions vacated and claims dismissed
Breach of fiduciary duty finding Katy sought damages based on Luc’s refusal to exercise; claimed breach Luc said he acted within trustee discretion; dispute over duties Court: Breach finding rendered moot by subsequent compliance; that portion vacated and claim dismissed
Award of attorney’s fees and costs Fees were reasonable, incurred to enforce decree; requested trial and appellate fees Luc challenged legal basis, sufficiency, expert-fee recovery, segregation, and unconditional appellate-fee award Court: Fees for enforcement action are authorized; trial evidence sufficient; reduced award by disallowing expert fees ($27,090.76); made appellate fees contingent on Katy’s success and delayed accrual of interest until appellate judgment

Key Cases Cited

  • Valley Baptist Med. Ctr. v. Gonzalez, 33 S.W.3d 821 (Tex. 2000) (mootness principles; compliance can render appeal moot)
  • Shanks v. Treadway, 110 S.W.3d 444 (Tex. 2003) (divorce-decree interpretation reviewed de novo)
  • Allstate Ins. Co. v. Hallman, 159 S.W.3d 640 (Tex. 2005) (dispute over attorney’s fees preserves live controversy)
  • Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 812 (Tex. 1997) (factors for reasonableness of attorney’s fees)
  • Tony Gullo Motors I, L.P. v. Chapa, 212 S.W.3d 299 (Tex. 2006) (when segregation of fees is required vs. fees intertwined)
  • In re Kellogg Brown & Root, Inc., 166 S.W.3d 732 (Tex. 2005) (mootness of some issues does not defeat appellate review of remaining live issues)
  • AHF-Arbors at Huntsville I, LLC v. Walker Cnty. Appraisal Dist., 410 S.W.3d 831 (Tex. 2012) (equitable ownership as present right to compel legal title)
  • In re Marriage of Harrison, 310 S.W.3d 209 (Tex. App.—Amarillo 2010) (constructive trust background and purpose)
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Case Details

Case Name: Luc J. Messier v. Katy Shuk Chi Lau Messier
Court Name: Court of Appeals of Texas
Date Published: Jan 27, 2015
Citations: 458 S.W.3d 155; 2015 Tex. App. LEXIS 680; 2015 WL 452171; NO. 14-13-00572-CV
Docket Number: NO. 14-13-00572-CV
Court Abbreviation: Tex. App.
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    Luc J. Messier v. Katy Shuk Chi Lau Messier, 458 S.W.3d 155