INTERESTING CASES:  July 2, 2018

/INTERESTING CASES:  July 2, 2018

INTERESTING CASES:  July 2, 2018

INTERESTING CASES:  July 2, 2018

Sallee S. Smyth

 

  1. Bos v. Smith, 2018 Tex. LEXIS 524 (Tex. Supreme Court – June 8, 2018) (Cause No. 16-0341)

 

M and F divorced in 2007 at a time when their two sons were both under the age of 3.  M was stingy with F’s visitation.  When the oldest child turned 3, F became more insistent regarding his time and asked M’s parents (MGP) to encourage M to cooperate with his possession.  One particular weekend in October 2008, F advised MGM (maternal GM) that he would be picking the child up for visitation at 6.  When F arrived he discovered that MGM had taken the child to birthday party at M’s request.  He did not contact MGM in any way to secure possession of the child.  On Saturday morning, M showed up to F’s residence with the child.  The child was there for only 2 hours and M called the child several times on the phone during the visit.  M called 911 and reported that the child had made an outcry of sexual abuse against F’s legal assistant who had been at F’s home that morning working.  The police and CPS launched an investigation.  MGM took the younger child home with her and the older child was taken to the hospital for examination.  M asked MGP to care for the children for several days as she had been advised to avoid contact pending scheduled interviews.  F soon learned that M changed her story and was now accusing F of the sexual abuse.  M, F and MGP all agreed to a plan with CPS while the investigation was pending which required MGP to stay at M’s house to supervise visitation by F with the children.  F did not visit the children.  MGP became frustrated with the time it was taking and MGF (maternal GF) in frustration reported to CPS that M was perfect, F was a nut job with poor parenting skills and that F had previously his twin daughters from a prior marriage.  (MGF would later recant these statements and opine that F was a stand up guy).  While the investigation was pending M began dating psychologist and CPS consultant.  He became very involved in the children’s lives and the MGP involvement steadily declined.  After the investigation the grand jury refused to indict F and all abuse was completely ruled out.  At a hearing in the divorce the judge found the mother in contempt imposed jail time for her ongoing violations of the F’s rights under the former SPO.  To avoid jail M volunteered to relinquish her parental rights.  The trial court stayed the jail sentence to insure that M carefully considered her decision but ultimately she gave up her parental rights.  Thereafter, F filed suit against MGP (but not M), asserting that (1) they had violated TFC Chapter 42 by assisting in M’s violation of his possessory right; (2) the MGP had breached their fiduciary duties to the boys and (3) defamed F and the twins based on MGF’s statements to CPS.  F also joined the boyfriend and sued for conspiracy and IIED.  MGP designated M as a responsible party.  After a bench trial the court found that M had intentionally coached the 3 year old to make the outcries and that F had never abused any of his children.  The court awarded (1) $3.2M to F on his Chapter 42 claims; (2) $4M to the boys on the breach of fiduciary duty and negligence claim; (3) $1.5M to the twins for defamation and (4) $2M to F for defamation.  MGP appealed but the psychologist did not.  The COA affirmed on the Chapter 42 claim but reversed on the defamation claims and suggested a small remittitur on the Chapter 42 damages which F accepted.  Both MGP and F cross petitioned in the Tex. Supreme Court challenging the COA’s determination regarding legal sufficiency of the evidence on the various claims.  As to the Chapter 42 claim the SCt recognized that a person who assists another in interfering with possession can be held jointly and severally liable for damages.  That person must either (1) have actual notice of the existence and contents of the order giving rights to possession or (2) have reasonable cause to believe that the child was the subject of an order and that a person’s actions were likely in violation of that order.  The SCt holds that liability does not result from a mere scheme to interfere with possession and F’s right to recovery could not rely on M’s 17 month “machinations to deny him possession” but instead must prove that MGP either knew a possession order existed and what it contained or knew the child was the subject of an order and knew that M was violating it.  Here the SCt considered the evidence that F’s claims focused on the initial incident wherein MGM took the child to a birthday party at M’s request and denied F his weekend possession.  The SCt determined that MGP could have believed this was not unreasonable particularly since F did not insist on possession that evening and then all the other events unfolded, and F agreed to a CPS plan.  Because F did not prove MGP knew of the contents of the order and knew M had violated it the SCt found legally insufficient evidence to support F’s Chapter 42 claim.  The SCt found that even if the evidence had been sufficient for the one weekend denial, it could not support liability for perpetual violations by M going forward and each violation of court ordered possession must be proved separately.  The trial court found that while M’s actions were the root of the damages, the MGP owed the boys a duty of ordinary care and fiduciary duties to protect them from their mother.  The evidence established that M was adopted and that MGP could not have forseen the extreme lengths the M went to (coaching the child and having him repeatedly examined) to prevent F’s possession.  The SCt noted that the conduct was so outrageous and unprecedented that MGP could not have anticipated it and thus the breach of fiduciary duty and negligence claims failed as a matter of law.  The SCt noted that while foreseeability does rely on knowledge of past behaviors and some of mother’s history was problematic, her conduct was no sufficiently similar to the actions she took regarding her own child that MGP could anticipate and protect against it.  The SCt reversed the defamation claim as to the twins finding that it was not sufficiently pled.  The Court likewise reversed the defamation claim as to the F finding that the MGF’s statements to CPS were only a small part of the allegations which formed the bulk of the investigations and thus could not support liability for that claim.  Judgment reversed and take nothing judgment rendered.

 

  1. Scott v. Scott, 2018 Tex. App. LEXIS 4027 (Tex. App. – San Antonio June 6, 2018) (mem. opinion) (Cause No. 04-17-00155-CV)

 

H and W married in 1992 and had no children.  W filed for divorce in 2013 and H was ordered to pay $6K to W for temporary spousal support.  W filed a motion for partial summary judgment regarding the character of two tracts of land acquired during marriage.  The first was a 8.64 acre tract which W claimed was community property despite a gift deed conveying the property to both H and W from W’s mother.  The second was a 16.8 acre tract that W claimed was her separate property despite a general warranty deed from her mother which stated that it was being conveyed for $10 and other good and valuable consideration.  The trial court denied the MSJ regarding the 8.64 acre tract but eventually awarded that to W as part of the division of the community estate.  The trial court granted the MSJ as to the 16.8 acre tract.  The trial court also ordered H to pay W spousal maintenance of $3K per month for 3 years.  H appealed.  The COA considered that both deeds (which were provided as SJ evidence) were to be construed based on the language of the deeds themselves if intent could be determined from those recitals.  In these circumstances, parole evidence should not be admitted or considered.  Here, W had attached her own affidavit which stated that as to the 16.8 acre tract, she had paid no consideration in spite of the deed recitals and her mother’s estate planning lawyer also testified to that in his affidavit.  As to the 8.64 acre tract, W testified at trial that she and H had paid her mother $1500 per acre for that land and that that her mother conveyed it by gift deed so they would not have any tax consequences.  The COA found that none of this evidence was appropriate under the circumstances.  As to the 8.64 acre tract, the COA found that this was ½ separate property of both H and W and not community property.  The division which awarded all of the tract to W was error because it divested H of his s/p.  Based on these determinations the property division was reversed and remanded with instructions to re-divide the estate in light of the correct character of the two tracts.  The COA affirmed the award of spousal maintenance in light of sufficient evidence establishing that W met the requisites for support and H had sufficient resources to pay it. 

 

  1. In re Marriage of Harrison, 2018 Tex. App. LEXIS 4201 (Tex. App. – Houston [14th Dist.] June 12, 2018) (Cause No. 14-15-00430-CV)

 

On motion for rehearing (ultimately denied), the COA withdraws its original Opinion issued on February 15, 2018 (as found at 2018 Tex. App. LEXIS 1249) and issues a new Opinion.  The outcome is exactly the same addressing issues regarding withdrawal of counsel shortly before trial (no abuse of discretion), exclusion of evidence (no abuse of discretion), removal of the case from jury (no abuse of discretion), and refusal to enter judgment on MSA which had previously been incorporated into a temporary order later modified by the trial court when evidence established that circumstances of the parties and the children had materially changed (no abuse of discretion).

 

  1. In the Interest of H.S., 2018 Tex. LEXIS 558 (Tex. Supreme Court June 15, 2018) (Cause No. 16-0715)

 

In this case, the Texas Supreme Court resolves those conflicting intermediate appellate decisions which sought to construe what is meant by “actual care and control” requirement of TFC 102.003(a)(9) in order for a person to claim standing to pursue orders regarding conservatorship and/or possession of a child.  In a 5-4 decision, the Texas Supreme Court holds that non-parents who have served in a parent-like role to a child over an extended period of time have standing to preserve their relationship over the parent’s objections.  When the child at issue was born, M and child immediately moved into MGP’s residence.  M and F were not married.  When the child was 8 months old the trial court issued an order in a pending SAPCR designating M and MGP as JMC of the child, giving M the right to designate the child’s residence and afforded F periods of possession.  When the child was 15 months old M, who had alcohol issues, moved to a sober living facility but M, F and MGP agreed that the child would remain in the primary care of MGP at their home.  No one disputed that MGP provided for the child’s primary care however M and F both contended that the plan was only a temporary one.  While living at the sober care facility, M would return periodically to the MGP’s residence to have dinner and spend time with the child.  M provided authorizations for MGP to obtain medical care and M attended some but not all of the child’s appointments.  MGP kept both M and F fully informed regarding the child’s medical care.  In October 2014, MGP filed a suit to modify, seeking designation as the conservators with the right to establish the child’s residence and asserted standing based on TFC 102.003(a)(9) claiming actual possession, care and control for at least 6 months.  F filed a counter-claim seeking to modify his possession order and filed a plea to the jurisdiction challenging MGP’s standing.  The trial court issued a temporary order giving F primary custody and granted his plea to the jurisdiction dismissing MGP from the suit.  Thereafter the trial court entered an agreed final order as between M and F which retained MGP as JMC but designated F as a JMC and gave him the right to establish residence, awarded M possession and ordered M to pay c/s.  MGP appealed and the COA affirmed, finding that a non-parent cannot establish standing under TFC 102.003(9) by exercising care, control and possession over a child absent evidence that the child’s parent is unfit or has abdicated his or her own care, control and possession over the child to the non-parent for the requisite period.  (2016 TAL 8094, FW 2016)  Majority Opinion:  Writing for the majority, Justice Lehrmann initially notes that TFC 109.003(b) mandates that when computing the minimum 6 month time period, the trial court must consider the child’s principal residence during that period, which the SCt interprets as excluding from consideration those non-parents such as babysitters, friends and relatives who do not share a principal residence with the child, regardless of how extensively they may participate in “caring” for the child.  This brief note at the outset of the Opinion clearly narrows standing eligibility under TFC 102.003(a)(9) to only those non-parents who actually share a principal residence with the child.  Recognizing the two distinctly different line of intermediate appellate decisions on this issue, the majority focuses on the legislature’s use of the word “actual” possession, care and control as evidencing the requirement for day to day management of the child’s life, making actual decisions about when the sleep, what they eat, whether they watch TV, etc..  The majority opines that if the legislature had intended that the non-parent have “legal” possession, care and control (as abdicated by a parent) then it certainly could have provided for it.  The majority also notes that nothing in the statute requires that the non-parent’s possession, care and control be “exclusive” and that the trial court and the COA decisions which effectively held that a parent must abdicate their rights to the non-parent before standing can exist erroneously seek to add an “exclusivity” requirement to the statute that is not already there.  The majority declines to hold that a parent must wholly cease exercising his or her own parental rights and responsibilities in order for a non-parent to exercise those same responsibilities and obtain standing under subsection (a)(9).  The majority determines that a non-parent has “actual care, control and possession” of a child under TFC 102.003(a)(9) if, for the required period, they (1) share a principal residence with the child; (2) provide for the child’s daily physical and psychological needs; and (3) exercise guidance, governance, and direction similar to that typically exercised on a day-to-day basis by parents with their children.  The majority recognizes that the Texas statute allowing standing in these circumstances does not run afoul of the US Supreme Court decision in Troxel which addressed a broad statute allowing anyone to seek rights to a child regardless of their involvement and thus does not constitutionally infringe on a parents fundamental right to raise their children.  COA and trial court reversed, case remanded to the trial court for consideration of the MGP’s petition on the merits.  Dissenting Opinion:  Writing for the dissent, Justice Blalock believes that no one can step into the shoes of a parent unless the parent first steps out of them and walks away.  The dissent argues that each of the three words used in the statute, “care, control and possession” require independent meaning and that if “control” means providing daily supervision, clothing, food, transportation and the like as the majority decides, then it means exactly the same thing as “care” and thus makes the statutory language superfluous which is an incorrect construction of the statute.  Instead, the dissent believes that “control” means the power to make significant decisions about the child’s life and that as long as the parents remain actively involved then there is little room for anyone else to be exercising “actual control” because parents uniquely occupy that special role simply by being parents. The dissent suggests that even if there were two plausible interpretations for the concept of “actual control,” the Court should have adopted the one which did not implicate constitutional concerns which have the potential for violating the fundamental rights of parents. 

 

  1. In re K.L., 2018 Tex. App. LEXIS 4507 (Tex. App. – Houston [14th Dist.] June 21, 2018) (Cause No. 14-16-01022-CV)

 

MGP initiated a SAPCR seeking primary conservatorship of their grandchildren.  They named the parents as respondent’s although they alleged that the father of one child was unknown and he was served by publication.  The trial court used the procedures under Tex. Government Code Chapter 37 (the wheel) to appoint an attorney ad litem for the unknown father.  These procedures require certain counties to maintain lists of persons eligible for appointment as attorneys and guardians ad litem, mediators and guardians.  The procedures allow court to maintain different lists categories by type of litigation or qualifications and then make appointments on a rotating basis.  The statutes allow the court to appoint outside the list based on the agreement of the parties or the court’s own choosing as long as the court finds good cause to do so and provides and explanation.  After the trial court appointed an attorney ad litem for unknown F from the list the MGP filed a motion for the court to reconsider and argued that the statute was unconstitutional because it infringed upon core judicial powers to appoint someone specifically qualified for a particular case and was vague because it did not define use of the word “qualified” in the statute.  Proper notice of the claim was provided to the TX AG.  After a hearing (which the AG did not attend), the trial court found the statute unconstitutional and appointed another attorney ad litem.  Several months later the AG intervened and asked the trial court to reconsider its decision to declare the statute unconstitutional.  The AG appealed.  Initially the COA addressed the MGP’s claim that the AG had waived its right to challenge because it failed to appear for the hearing and the intervention was not timely.  The COA held that intervention prior to final judgment was generally considered timely and that the MGP had failed to demonstrate any prejudice.  The AG likewise challenged the MGP’s standing to assert a constitutional challenge to the statute.  Standing requires (1) an injury in fact … one that is concrete, actual and imminent and not just hypothetical; (2) the injury must be fairly traceable to the action complained of and (3) the injury must be likely redressed by the requested relief.  In this case the AG argued that there was no injury to the MGP.  MGP claimed that the potential that they could be ordered to pay the costs of the attorney ad litem amounted to an injury and further that because the attorney would be involved in the prosecution of the case which determined the best interest of their grandchild, the attorney could influence the outcome.  The COA noted first that the possible cost assessment was not traceable to the action complained of.  In other words, the fact that the ad litem was appointed under the process of the wheel did not impact the possibility that the MGP’s could be ordered to pay their fee.  Second, as the AG pointed out, the ad litem was not appointed to represent the interest of the child but instead of the opposing party and the COA concluded that the MGP’s did not allege a sufficient interest in representation of the opposing party to establish standing to challenge the manner in which the attorney was appointed.  The COA concluded that because the MGP’s lacked standing, the trial court lacked subject matter jurisdiction to consider the MGP’s constitutional claims.  Final judgment modified to delete the trial court’s finding that TX Govt Code Chapter 37 is unconstitutional.

 

  1. Miller v. Miller, 2018 Tex. App. LEXIS 4787 (Tex. App. – Houston [14th Dist.]* June 28, 2018) (Cause No. 14017-00293-CV) *as transferred from Austin Court of Appeals

 

H and W married in 1969.  H was a physician who established allergy clinics in several cities.  W worked for one of the clinics briefly but otherwise was not employed during the marriage.  Over the course of the parties marriage the heavily invested in real estate.  Several of the clinics leased their office space from businesses crated and owned by the parties who purchased the real estate.  Some of these real estate developments were owned partially by close friends and neighbors of the couple.  In 2010 H had a stroke and was hospitalized and in rehabilitation for almost a year.  W became his full time caregiver and depended on managers of the clinics and business partners of H to assist with the day to day operations of their investments and business holdings.  One of H’s best friends and business partners was indicted for misappropriating funds from a prior employer but H continued to trust him to manage one of the real estate developments they were partnered in.  W became overwhelmed trying to keep up with H’s care and all of the other matters ongoing with the clinics and business operations and tried to commit suicide but called for help after taking an overdose of pills.  Thereafter, W filed for divorce. During the divorce proceeding, H did not cooperate in completing discovery and failed to disclose all information regarding the parties’ assets and debts.  H did not secure appraisals on all of the parties’ real estate holdings as ordered by the court.  H did not pay all of the temporary spousal maintenance he was ordered to pay.  W asserted claims for fraud against the community, claiming that H had access to substantial cash (some coming in from business interests) during the divorce proceedings which he spent without her consent or could not account for.  The case was tried before the bench over 12 days spanning almost a year.  In 2016 the court signed a final decree finding reconstitution owing to the community estate of $190K.  The trial court valued the community estate at $7.6M and awarded W 49% and H 51%.  The trial court issued findings which provided that H was awarded all clinic assets and the real estate holdings where the clinics were located so that H and W would not have to negotiate leases with one another in the future.  The court likewise awarded H all property with indebtedness.  W was primarily awarded cash and retirement accounts.  The court found that H had future earning potential whereas W did not and that H had business experience to deal with the various real estate and business investments.  The court further granted the divorce on no fault grounds.  H filed a MNT which was denied and thereafter appealed.  H’s primary complaint related to the court’s findings regarding fraud on the community.  In sub issues H challenged the legal and factual sufficiency of the evidence to support the claim, argued that he clearly rebutted any presumption of fraud by showing that disposition of property was fair, claimed that a constructive fraud claim in barred for actions occurring during divorce because the fiduciary relationship has ended, asserted that W’s lack of information regarding his activities was based on her personal choice and thus she could not recover and claimed that reconstitution was error since the community estate was monetarily whole.  The COA found legally and factually sufficient evidence to support a finding of fraud, noting that H was unable to account for and explain some of his disposition of funds within his control, noting that in light of the H’s conduct during the divorce proceedings, much of which caused delays, the trial court was able to judge his credibility and not believe many of his explanations for how funds had been expended.  While H was able to explain where some of the funds had gone, the trial court expressly considered his expenses for medical care and preservation of the community in reducing W’s fraud claim from $435K to $190K and thus H had not overcome everything that was found presumptively fraudulent.  As to H’s claim that fraud on the community alleged to have occurred during the divorce proceedings was barred, the COA found that although a spouse has the right to manage their special community property, they must still do so in a way that is fair to the other spouse.  While the COA recognized that the fiduciary relationship of H and W ends upon divorce filing where both employ counsel, in the midst of the divorce H still have an obligation to provide complete disclosure in discovery which he did not.  The COA noted that if fraud on the community was barred as a matter of law during divorce this would place the community at risk during a period where it was most vulnerable and the COA was unwilling to legitimize H’s arguments.  The COA found that while W was not fully informed as to the ongoing investments and matters relating to the community estate, she had a right to rely on the fiduciary relationship shared with H during marriage and TX law does not require that she demonstrate any diligence to understand the innerworkings of the community estate.  Finally H argued that the community estate was monetarily whole, not having lost any value over the course of the divorce, and thus constructive fraud could not be found because he did not “dispose” of property but may have only made unwise investments.  The COA relied on its earlier determination that the evidence was sufficient to support fraud where H failed to account for all of the funds at his disposal during divorce.  H further argued that the trial court erred in ordering that $100K be paid to W from a clinic account when the clinic was not named as a party in the divorce.  The COA determined that the clinic was not ordered to do anything but instead W was awarded funds held in a clinic account, and that the clinic was community property.  Although H claimed that the record supported his prior complaints about this ruling, the COA could find no such record and determined that H failed to preserve error.  Finally, H argued that although the court found a 51/45 division in his favor, the values actually adopted by the court established a 51/49 division in W’s favor and the findings of fact were inconsistent with the correct valuation.  The COA determined that H failed to adequately brief the issue.  Judgment affirmed.

 

  1. In re I.C. & Q, 2018 Tex. LEXIS 650 (Tex. Supreme Court June 29, 2018) (Case 16-0770)

 

H and W entered into a premarital agreement which provided a $5M payment to W upon divorce.  The agreement further provided that if W sought to invalidate the agreement, whether all or part, or sought to recover property at variance with the terms of the agreement, W forfeited the $5M payment.  H filed for divorce and sought to enforce the premarital agreement.  W filed a counter petition seeking the same relief.  Subsequently, H fell behind in some of his payment obligations and W filed motions in the trial court to compel payment which were granted.  Thereafter W filed an amended counter petition and as alternative relief sought to rescind the premarital agreement and place the parties in the status quo that existed before the agreement based on H’s breach of its terms.  Both parties filed MSJ’s on various issues, and W specifically sought summary judgment on her rescission claims.  H sought declaratory relief that W’s claims triggered her forfeiture of the $5M payment.  This issue went to a jury who decided in H’s favor that W’s actions triggered forfeiture but found that her actions were excused because of H’s breach.  H filed a MNT which was granted.  Thereafter the trial court granted H’s MSJ on the declaratory judgment claim, concluding that W had forfeited her right to the payment by seeking rescission of the agreement.  W appealed and the COA affirmed.  W petitioned for review.  The SCt likewise affirms holding that the premarital agreement was a clear and unambiguous contract.  The SCt notes that W’s efforts to rescind that contract resulted in her efforts to obtain property at variance with the agreement because her efforts to set aside the agreement would have resulted in a community estate which the premarital agreement expressly stated would not exist.  Further, W admitted within her pleadings at the trial court level that her right to a division of the community estate might entitled her to a greater recovery than the terms of the premarital agreement.  W claimed that her pleadings for rescission were only in the alternative, however the SCt stated that if all of W’s actions did not qualify as an attempt to recovery property at variance with the agreement, it would be difficult to imagine what could.  W argued that contracts should be construed so as to avoid “forfeiture” however the SCt noted that forfeiture in this case was expressly agreed to by the parties and although the law does not favor it, nothing prohibits the parties from agreeing to it.  W further claimed that she had no choice but to seek rescission because of H’s breach and therefore she asked the court to make a “just-cause” exception to the forfeiture clause of the premarital agreement.  The SCt noted that W had other options, including claims for breach of contract which sought only the recovery of damages or requests for temporary orders.  In fact the court recognized that W actually obtained an order to compel H’s compliance from the trial court but after that she continued to press forward on her rescission claims.  The SCt found that TRC 4.006 permits a court to set aside a premarital agreement when it is determined to be unconscionable and the court was unwilling to judicially expand the statute to include a “just-cause” exception which allows a party to escape enforcement of their agreement.  The court found that there was no evidence the agreement was unconscionable and thus it should be enforced and the forfeiture clause upheld.  In a concurring opinion, Justice Lehrmann notes that TFC 4.006 expressly provides the exclusive remedies for invalidating a premarital agreement.  Although W argued that she was not claiming the agreement to be invalid, she simply wanted to rescind it, Justice Lehrmann states that there is no meaningful difference between these two positions which both seek to restore the parties’ status before any contract was ever signed.  Justice Lehrmann concludes therefore that “rescission” of a premarital agreement, as a remedy, is foreclosed under TFC 4.006. 

 

  1. Dalton v. Dalton, 2018 Tex. LEXIS 655 (Tex. Sup. Ct. June 29, 2018) (Case No. 17-0155)

 

The parties were divorced in 2011.  The final decree gave full faith and credit to an Order of Separate Maintenance (OSM) issued by the state of Oklahoma which resolved issues concerning child custody, child support, property division, debt division, spousal support, attorney’s fees and costs.  Under the OSM , H was to pay W “support alimony” in the amount of roughly $1.3 Million in monthly installments of $6,060 beginning in 2007 until paid in full or until further order.  After the TX divorce wife began pursuing various remedies in TX to enforce the OSM as approved in the TX decree and obtained a WWH order for the OK support payments.  W sought to hold H in contempt and she requested a QDRO which would cover amounts not withheld under other enforceable WWH orders.  The court ultimately held H in contempt and sentenced him to 45 days in jail and issued a QDRO covering alimony arrearages and attorney’s fees to be paid to W from H’s retirement.  H appealed.  The COA affirmed, finding that the QDRO did not impermissibly modify the property division by instead enforced an obligation for support and the assignment of his retirement benefits was not precluded by ERISA because QDRO’s are exempted from such claims.  H petitioned for review to the Supreme Court.  In a unanimous decision, with Justice Lehrmann also concurring, the SCt reverses the COA judgment and renders the TX WWH orders and QDRO void.  First, as to WWH, the Supreme Court determines that the support alimony payments contained in the OSM as incorporated into the TX decree, are not payments for spousal maintenance under Chp. 8.  There was never a claim and never any evidence that W even qualified for spousal maintenance.  W argued that TX was required to give full faith and credit to the OK order as registered in TX.  The SCt notes however that while OK law (as the issuing state) controls the nature, extent, amount and duration of the payment obligation, when the OSM was registered in TX, TCPRC 35.003(c) provides that the judgment is subject to the same defenses and proceedings for enforcing the judgment as “a judgment of the court in which it was filed,” meaning TX law regarding enforcement.  Because the obligations were support alimony, under TX law that was enforceable only as a private contract debt and WWH as authorized by Chp. 8 was not permitted.  As to the QDRO, the SCt agreed that QDRO’s are exempted from ERISA which would otherwise prevent an assignment of H’s retirement benefits to satisfy a debt obligation, however, the SCt holds that ERISA does not authorize a state court to issue an order that state law does not authorize.  The court notes that Chp. 8 allows for enforcement by any means available to enforce a judgment but it was already determined that H’s obligation did not qualify as Chp. 8 maintenance.  The court likewise notes that while QDRO’s have been permitted to set aside property for the enforcement of child support under Chps. 154 and 159, the obligation here was not child support.  This left only Chp. 9 as the potential authority for enforcement and Chp. 9 only permits a QDDRO for the enforcement of a property division.  The support obligation under the OSM was not a property division.  H’s retirement benefits had already been divided under the OSM property division.  The QDRO issued by the TX court to enforce the support obligation awarded W an additional interest in H’s retirement benefits, effectively modifying the original property division which is not permitted under TX law.  A court’s authority under Chp. 9 is limited to enforcing, clarifying and aiding the implementation of a prior division, not issuing a QDRO which effectively orders a new division of property not previously divided, that being the portion of H’s retirement benefits originally set aside to him in the 2011 divorce.  COA decision reversed and WWHO and QDRO issued by the trial court declared void.

 

  1. Bradshaw v. Bradshaw, 2018 Tex. LEXIS 660 (Tex. Supreme Court June 29, 2018) (Case No. 16-0328)

 

H and W married in 2010 and the parties lived together in a home owned by W along with W’s three daughters.  The house burned in 2012 and W used the proceeds to payoff the mortgage, then sold the house and purchased a new one for the family.  In 2013, while visiting an aunt, all 3 of W’s daughters revealed to the aunt that they were or had been sexually abused by H, their step-father.  The aunt called the police and H was arrested, eventually tried, convicted and sentenced to 60 years in prison without the possibility of parole.  In the midst of the criminal proceedings, W filed for divorce.  H was not permitted to testify at the divorce trial but W and the daughters did.  The trial court awarded W 100% of the community estate and found the residence to be W’s separate property.  H appealed and the COA reversed finding the evidence insufficient to support the trial court’s order.  While on remand, H’s conviction was affirmed.  In the second trial, W offered additional evidence surrounding H’s continuing abuse.  The court found the residence to be community property, awarded W 80% and H 20% and awarded the balance of the community estate to the party in possession.  This time W appealed, arguing that based on H’s behaviors, nothing shy of awarding W 100% of the residence could be considered just and right.  The COA affirmed, finding that while fault in the break-up the marriage could be considered to support a disproportionate division, the court could not use a division to punish a spouse.  The SCt granted review.  In a 5-4 decision, the SCT reverses the division and remands the matter back to the trial court.  3 justices (the plurality) make this determination by holding that an award of 20% of the specific residence to H was not just and right.  2 justices base their vote to reverse and remand upon a finding that the trial court lacked sufficient evidence upon which to base any division.  4 justices dissent.  In the plurality opinion, the court states that the issue being decided in not whether H’s actions contributed to fault in the break-up of the marriage which could be considered in the division as the trial court apparently did.  Further, the issue was not whether awarding 100% of the residence to W would constitute a punishment to H which is not allowed.  Instead the SCt plurality frames the issue as deciding whether the award of any % of the very residence where H abused the children could under any circumstances be considered just and right as a matter of law and holds that it cannot.  The plurality limits its decision to the particular facts involved in this case and states that the occurrence of domestic violence and abuse in general does not deprive a guilty spouse of an interest in all or even a specific part of the community estate.  Instead, the plurality holds that in this case where H repeatedly used the family residence to commit the repeated abuse for which he was convicted and severely punished, an award of any % of that residence was unjust and wrong as a matter of law requiring remand.  Justice Devine, joined by Justice Guzman concurs in the result but finds that remand is required because the underlying trial court record did not include sufficient evidence regarding the value of the community estate which is required before a trail court can determine whether its division is just and right.   Justice Boyd, writing for the dissent, argues that the plurality opinion ignores the broad discretion a trial court retains to divide property upon divorce.  While Justice Boyd clearly and unequivocally denounces the H’s actions in this case but opines that the SCt view of what may be just and right is not relevant to the issue brought forth on appeal, that being whether the trial court abused its discretion in dividing the property.  Justice Boyd states that the court is not being called upon to interpret what is meant by the words “just and right” in the statute and thus the plurality’s conclusion that it interpretation is all that matters is incorrect.  Justice Boyd is concerned that the plurality has created a new law which prevents a spouse who uses a residence to commit abuse from receiving an interest in that residence and wonders how far this “new law” will go.  He questions whether it would apply to other types of property such as a vehicle, whether it would apply to abuse that was something other than sexual abuse or whether it would apply if the victim was someone other than a child or step-child.  He further questions whether it would apply if the criminal case was not yet concluded or any conviction remained on appeal.  In short, Justice Boyd believes that the plurality has not announced a legal principle but instead announced its own application of the equitable just and right principle to the facts of this case.  Taking it one step further Justice Boyd states that the plurality opinion is not the law because 6 justices disagree with it and thus the trial court could not have abused its discretion for failing to apply what was not and still is not the law.  Justice Boyd notes that the law does not require the trial court to award 100% of the residence to the W in this case, even though he states maybe it should, while recognizing that any change in the law would fall to the Legislature.  As to the concurring opinion which reverses based on insufficient evidence grounds, the dissent argues that W failed to properly preserve this issue for  appeal and thus also disagrees with reversal and remand on this basis.  Justice Lehrmann, joins fully in Justice Boyd’s dissent, but writes a separate dissent to reiterate that the Court’s decision as precedent does not impose any specific limits on the size or amount of a community property division.  Justice Lehrmann believes that the trial court’s exercise of discretion in the division was not improper.

 

 

 

2018-07-03T21:33:49+00:00 July 3rd, 2018|SideFeatured-Home|