INTERESTING CASES: April 1, 2020

Sallee S. Smyth

  1. Davis v. Davis, 2020 Tex. App. LEXIS 1868 (Tex. App. – Dallas March 4, 2020) (mem. op.) (Cause No. 05-19-00179-CV)

H and W divorced in 2005. As part of an Agreement Incident to Divorce, H and W were each awarded a 50% share in Lone Star Self Storage as an IRA investment. In 2009, H emailed W and notified her that there was a contract for sale of the asset and that she would be entitled to ‘A of the proceeds and he would keep her notified. In late 2012, W emailed H advising him that she had heard from an acquaintance that H had received almost $350K in return on the investment and asked H to update her on obtaining her portion. H replied that he would look into it. Over the next several years, H would correspond with W and acknowledge the debt to her and periodically H would send W a check for $5K or $10K and reflect on the check memo that it was being paid in satisfaction of the Lone Star investment. Eventually, in 2016 W filed suit for breach of contract against H as she has only been paid approximately $35K on the total obligation due. H asserted a 2 year SOL defense under TFC Chapter 9 or alternatively, a 4 year SOL on breach of contract. W sought summary judgment which was granted. H appealed claiming he had established his SOL defense. The COA determined that while certain SOL’s did exist, H’s written acknowledgements of the debt every time he emailed or sent a check to W had the effect of renewing his obligation and deferring any existing SOL. Because H had acknowledged the debt within two years of the date W filed suit, her claim was timely. Judgment for amount owing as well as fees affirmed.

  1. Jackson v. Jackson, 2020 Tex. App. LEXIS 1960 (Tex. App. – Austin March 6, 2020) (mem. op.) (Cause No. 03-19-00014-CV)

M relocated from Canada to the US in 2008 to pursue a relationship with F whom she met through work. They married in 2011. In 2015 the couple relocated to Austin and F obtained a job with a concert company. M worked for a travel agency. M became pregnant in 2017. During the pregnancy, F began an affair with a woman at work (GF). GF had a young child of her own. The parties’ child was born premature and had to stay in the hospital for some period. F attended the delivery but was often texting with new GF. When the child was set to be released from the hospital, F stated that he had plans and could not go with M. F eventually showed up at hospital that night after taking GF to dinner. After discovering the affair, M filed for divorce. While the case was pending F spent a lot of time with GF and placed that relationship as a priority over his daughter. Further, communications between F and GF indicated that GF was very possessive of F and was a distraction to F’s ability to focus on caring for his own child. In light of these issues, M requested an injunction which prohibited F from taking the child around GF or her child. The court issued the injunction to remain effective until the child reached 3 years of age. F appealed. F challenged the sufficiency of the evidence to support the injunction. The COA referenced TFC 153.254 as identifying all of the factors to be considered when ordering possession for a child under age 3 and found that GF could be considered as an individual who would impact and influence the possession circumstances. The COA found that the evidence was sufficient to require restricting F’s association with GF while in possession of his child and that the order was in his child’s best interest and affirmed the injunction. However, the COA modified the injunction to delete restrictions relating to GF”s child (who was two years older than the parties’ child) because there was no evidence supporting any injunction relating to the GF”s child.

  1. Michelena v. Michelena, 2020 Tex. App. LEXIS 2276 (Tex. App. – Corpus Christi March 19, 2020) (mem. op.) (Cause No. 13-16-00340-CV)

H and W executed a premarital agreement in August 1994 and married shortly thereafter. W filed for divorce in 2005 and H filed a counter petition. The suit was originally tried to a jury in 2006 regarding custody and property issues. A final decree was eventually signed in 2009. H appealed matters regarding the division of property and the COA reversed and remanded for a partial new trial on limited issues concerning the character of specified property and a redivision of the estate. The COA affirmed the balance of the decree which included language awarding undisclosed assets 100% to the party not in possession. Trial on remand was to the bench. Ultimately the trial court characterized a TSB Account #602 as community property, valued certain assets based on the only evidence provided, awarded several undisclosed assets to W, determined that W was entitled to pre-judgment interest on seven accounts awarded to her and granted W a judgment for her ‘/2 share of the community estate determined in the first trial. H appealed. First H complained about the characterization of TSB account #602. The parties’ premarital agreement provided that any account held in the individual name of a party would be presumed to be their separate property. Because the TSB #602 account was held only in H’s name, he complained that it should have been awarded to him as separate property. However, the COA observed that at trial, W offered substantial evidence showing that community funds had been deposited into the #602 account over the years, including proceeds from a loan during marriage and wages earned by the parties. The COA held that the presumption of s/p in the premarital agreement was rebutted and thus the burden switched to H to establish clear and convincing evidence that the funds in TSB account #602 were his separate property. Because the funds had been commingled and H offered no tracing, the COA affirmed the community property characterization. H also complained about undisclosed assets being awarded to W. The COA pointed out that their prior reversal and remand of the property division was limited and that their prior opinion specifically affirmed all other terms in the final decree, including the term awarding 100% of undisclosed assets to the party not in possession. Several assets were revealed in the second trial which H had previously failed to disclose and the COA found that the award of those assets to W was proper. H also complained about certain property valuations however the COA determined that H offered no evidence of value which differed from that found by the trial court and therefore he was in no position to complain. Finally, H complained about the trial court’s award of “prejudgment interest” to W as applied to seven separate accounts, such interest totaling approximately $292,300. The COA notes that prejudgment interest may only be awarded by statute (in cases involving extensions of credit, wrongful death, personal injury, property damage or condemnation) (Tex. Fin. Code 302.002; 304.101; 304.201)); when provided for by contract or when properly pled for. In this case the COA found that the pre-judgment interest award did not relate to any of the matters authorized by statute and further there was no applicable contract. Further the COA examined W’s pleadings and determined that she specifically pled for “post judgment” interest only. The COA holds that a prayer for general relief does not support an award of pre-judgment interest and that amount as awarded by the trial court was reversed. The COA modified certain aspects of the decree to account for several minor errors but otherwise affirmed the judgment.

  1. In the Interest of A.P., 2020 Tex. App. LEXIS 2376 (Tex. App. – Houston [1st] March 24, 2020, orig. proceeding) (mem. op.) (Cause No. 01-18-00935-CV)

Within a 2018 modification order, M and F were required to communicate exclusively through an online co-parenting program regarding their children except in the case of an emergency. Later that year, F filed a motion to enforce the order alleging eight separate violations by M. Trial was held and within opening statements, M’s counsel stated that the primary problem was the parties’ inability to communicate and that although not pled, the court should likely consider appointing a parenting facilitator to improve relations and communications between the parties. Ultimately the court found M guilty of 6 violations and denied 2; fined M $1500 and denied attorneys fees to either party. The trial court also appointed a parenting facilitator (PF). An enforcement order was entered a few weeks later. Thereafter, F filed a timely post judgment motion complaining only of the PF appointment. The court denied F’s motion and F filed an appeal, alternatively a petition for writ of mandamus. The COA initially considered its jurisdiction over the matter brought as an appeal versus an original proceeding. The COA determined that enforcement order are not subject to direct appeal and that the PF appointment was likewise not appealable as it was made in conjunction with facilitating compliance with the trial court’s underlying orders and thus affiliated with the enforcement action. The COA however did consider F’s issues as asserted by F’s alternative request for mandamus. F complained that the trial court had no authority to appoint a PF as part of an enforcement action but only within a SAPCR. He further complained that he was given insufficient notice of the court’s intent to appoint a PF as required by statute. The COA found that F’s enforcement action, brought under TFC Chp. 157, was considered a SAPCR as it was governed under Title 5 and it was brought in the court of continuing jurisdiction over the parties prior SAPCR proceeding and under the same cause number. As such, the COA concluded that a trial court does have the authority to appoint a PF in the midst of an enforcement action when such appointment meets the statutory requirements of TFC 153.6051(b) (high conflict case or other good cause and appointment in child’s best interest and PF appointed meets required qualifications). In this case the COA determined that no one disputed the statutory requirements had been met. As to notice, the COA found that when appointed at rendition, F did not object.

Then when the order was entered two weeks later and included PF terms, F did not object. Then when F filed his post judgment motion, the court held a hearing and F was able to argue his concerns. In all, the COA found that F had sufficient notice. Enforcement order and appointment of PF affirmed.

  1. Mann v. Propst, 2020 Tex. App. LEXIS 2581 (Tex. App. – Dallas March 26, 2020) (mem. op.) (Cause No. 05-19-000422-CV)

H and W divorced in 1995 and W was named SMC of the parties’ only child who was then 4 years old. H was ordered to pay child support. In November 1999, W and her new H entered into a contract with the Texas Tomorrow Fund (TTF) to provide for the child’s college education. The contract required them to pay monthly installments and they were considered a “Purchaser.” The contract could not be assigned but it did include terms which allowed for the addition of another Purchaser. The contract provided for a refund in certain events, including death of the Beneficiary (in this case the child). In 2002, H and W entered into an agreed modification order wherein they were named JMC, H was given primary rights, H’s child support was terminated and W, in lieu of monthly child support, was obligated to continue contributing the monthly payment to TTF. The agreed order also included terms which required W to execute forms adding H as an additional “Purchaser” on the TTF contract. W complied and the form designated H as a “Joint Purchaser.” In 2009 the court signed another agreed modification order which increased W’s overall child support, allocating a portion to the continued TTF contract obligation and the balance as periodic child support payable until the child turned 18, graduated HS, died, etc.. For 10 years, W paid the required funds into TTF and fulfilled the contract in the principal amount of almost $23K. In 2017, a few months after her 18th birthday, the child died before any of the TTF were utilized. TTF was notified and was prepared to issue a refund on the contract in the amount of almost $50K which accounted for earnings over the years. Neither modification order provided for dealing with a TTF refund. In 2018 H brought suit to partition the refund under TRCP, claiming joint ownership. W filed a general denial and counterclaim seeking declaratory judgment that the refund belonged entirely to her. Suit was tried to the court and only H and W testified. The trial court found that H and W were joint owners of the TTF refund, that W had paid in $4,060 prior to the first modification order in which her obligation was then recharacterized as child support. The trial court found that but for the TTF payments, W would have paid periodic child support to F which would have been available for H’s use. The trial court awarded W $4,060 of the refund and the balance to H. W appealed. W argued that she was the sole owner under the TTF contract because it could not be assigned. Further, she argued that the orders effect deprived her of her separate property in a post-divorce action and was not allowed. The COA notes that H brought suit under the TRCP as a partition suit, not under TFC Chp. 9. Further, the COA found that W waived her rights under the anti-assignment clause of the TTF contract by executing the form which named F as a Joint Purchaser. The COA found that all payments by W from 2002 through the child’s 18th birthday were properly characterized as child support but that payments made after that were simply contractual obligations undertaken by W but even those remained fully enforceable. The COA agreed that W was entitled to the principal refund of $4,060 and that H was entitled to the balance of the principal payments on the contract since these were in lieu of child support. However, as to the increase on those principal payments (the extra $27,000), the COA determined that it did not have the information to make the appropriate interest calculations and that W was entitled to the increase on her $4,060 principal payments. The COA affirmed the trial court’s allocation of principal to W but remanded the matter back to the trial court to determine her portion of the refund attributable to interest earnings.