In the Matter of a Mail Dispute ) July 1, 1994 Between: ) ) ROSE MARION DAY ) ) and ) ) BOBBY G. DAY ) P. S. Docket No. MD-223 APPEARANCE FOR MS. DAY: Jack McClendon, Esq. 1306 Broadway Lubbock, TX 79401-3206 APPEARANCE FOR MR. DAY: Dale Jones, Esq. 1801 Avenue Q Lubbock, TX 79401-4826
This mail dispute has been docketed pursuant to Domestic Mail Manual Transition Book §153.72, which requires the chief field counsel to forward certain unresolved mail disputes to the Judicial Officer for resolution. The mail in dispute is that addressed to Day & Company, Inc., P.O. Box 93303, Lubbock, TX 79493-3303. The mail is currently being held by the Lubbock Postmaster. Both parties submitted sworn statements and documents in support of their claims to the mail.
1. Day & Company, Inc., was incorporated in Texas sometime prior to January 30, 1989.
2. In a February 3, 1989 judgment following the divorce of Rose Marion Day and Bobby Glenn Day, the 99th District Court of Lubbock County, Texas, awarded Ms. Day an estate for a term of five years or until she sooner remarried in the use and profits of the assets of Day & Company, Inc., and the stock of the company. At the end of the term, the company was to revert to Mr. Day automatically.
3. The judgment incorporated a January 30, 1989 property settlement agreement between Ms. Day and Mr. Day that provided that Ms. Day would retain Day & Company, Inc., permanently "if during the five years following the final decree in this case, Bobby Glenn Day . . . directly or indirectly brings about any act calculated to harass or embarrass Rose Marion Day . . . ."
4. On February 4, 1994, one day after the expiration of the five-year term of Ms. Day's control of the company, Mr. Day held a shareholders' meeting and a board of directors' meeting of Day & Company, Inc., that resulted in his appointment as the sole director and his election as president of the company. He immediately notified Ms. Day of his action, and shortly thereafter asked the post office to forward the company's mail to him.
5. Also on February 4, 1994, Ms. Day initiated an action in state court contesting the reverter of Day & Company, Inc., to Mr. Day. That suit was dismissed, and Ms. Day's appeal of that dismissal is pending. Ms. Day has filed at least one other lawsuit since February 4 in which she contends that Day & Company, Inc., did not revert to Mr. Day because he harassed her in violation of the terms of the property settlement agreement.
6. Ms. Day contends that Mr. Day took the following actions and that those actions violated the no-harassment provision of the property settlement agreement: (1) failed to execute certain documents necessary to effect property transfers required by the terms of the property settlement agreement, (2) stole the Day & Company, Inc., corporate book in 1989, (3) also in 1989 offered Ms. Day a house in exchange for sex, (4) improperly represented himself as president of Day & Company, Inc., in a lawsuit he filed on behalf of the company opposing foreclosure of certain company property, (5) interfered with Ms. Day's efforts in late 1993 and early 1994 to sell Day & Company, Inc., property by questioning proposed sales and (6) threatened to kill a horse of Ms. Day's if she sold certain Day & Company, Inc., property.
7. Postal regulations provide that if disagreement arises regarding delivery of a corporation's mail, the mail shall be delivered according to the instructions of the president of the corporation. Domestic Mail Manual D042.4.1.
1. In this proceeding and in the court proceedings, Ms. Day has argued that Mr. Day violated the conditions in the property settlement agreement by harassing her in a number of ways during the time she controlled Day & Company, Inc., and that he thereby forfeited his remainder interest in the company.
2. "'Because a forfeiture is a harsh remedy, punitive in its operation, it has become a settled principle that forfeitures are favored neither in law nor in equity.' 25 Tex. Jur.2d, Forfeitures, § 3, p. 502." McCarthy v. City of Houston, 389 S.W.2d 159, 163 (Tex. Ct. App. 1965); accord Humphrey v. C.G. Jung Educational Center, 714 F.2d 477, 480 (5th Cir. 1983). Courts will find a forfeiture only if compelled to do so by contract "language that will admit of but one construction, and that construction is such as compels a forfeiture," Automobile Ins. Co. v. Teague, 37 S.W.2d 151, 153 (Tex. Ct. App. 1931); accord Link v. Texas Pharmacal Co., 276 S.W.2d 903, 906 (Tex. Ct. App. 1955); Humphrey v. C.G. Jung Educational Center, 714 F.2d at 480-81, and only upon facts that show a definite violation or breach of the condition leading to forfeiture, see McCarthy v. City of Houston, 389 S.W.2d at 163.
3. Under the strict standards governing forfeitures, there is some doubt whether the language of the no-harassment term in the property settlement agreement is so clear that it compels forfeiture and whether material violations of the provision can be ascertained with certainty on the record in this dispute. Whether certain conduct would tend to harass or embarrass Ms. Day is highly subjective, but more importantly, before a forfeiture could occur it must be determined that Mr. Day's offending conduct was "calculated" by Mr. Day to harass or embarrass Ms. Day. It is not enough that his conduct might, in fact, harass or embarrass her. Ms. Day has not offered evidence to demonstrate that Mr. Day intended his actions to harass or embarrass her within the meaning of the property settlement agreement forfeiture provision. Additionally, the absence of evidence in the record that Ms. Day took any legal or other action against Mr. Day at the time he allegedly committed the acts complained of casts doubt on her current assertions that that conduct materially violated the terms of the agreement and justifies forfeiture of Mr. Day's interest in the company.
4. However, it is not necessary to determine whether Mr. Day's actions violated the property settlement agreement in order to resolve this mail dispute. Even where it is concluded a forfeiture is intended under a contract or deed, absent compelling language, it will not be found that the forfeiture was intended to be automatic upon occurrence of the condition but rather that some further action, such as a lawsuit or reentry by the beneficiary, is required to bring about the forfeiture. See Field v. Shaw, 535 S.W.2d 3, 5-6 (Tex. Ct. App. 1976). Preceding a condition of forfeiture in a contract with "so long as," "until" and "during" suggests an intent that the forfeiture be automatic upon occurrence of the condition, but using "if" (as was used in the property settlement agreement), "but if" and "on condition that" typically establishes a condition of forfeiture that must be enforced by further action. Id.
5. In this case, the language of the no-harassment provision of the property settlement agreement does not unambiguously make the forfeiture automatic. The agreement states that Ms. Day's "estate for the term of five years" will become a fee interest "if" Mr. Day violates the provisions of the agreement. Ms. Day's actions in initiating lawsuits to enforce her claimed right to ownership of the company are consistent with an understanding on her part that the forfeiture, if it is to occur at all, will occur only when a court declares it so. Therefore, even if the actions of Mr. Day could be found to warrant a forfeiture of his interest in Day & Company, Inc., such forfeiture will not occur until Ms. Day obtains a favorable decision in court or takes other action recognized under Texas law to enforce the forfeiture.
6. Mr. Day, therefore, obtained ownership of Day & Company, Inc., automatically upon expiration of Ms. Day's five-year estate. As of February 4, 1994, Mr. Day became the president of Day & Company, Inc. Therefore, Mr. Day may control delivery of the corporation's mail under postal regulations.
7. Should a court declare the ownership of Day & Company, Inc., to be other than found above or order a different distribution of the mail, the Postal Service will defer to any such court ruling.
8. If Mr. Day receives mail intended for Ms. Day personally, he is to assure that it is promptly delivered to her.
9. The following order should issue.
Norman D. Menegat Administrative Judge