INTERESTING CASES: May 1, 2019
Sallee S. Smyth
- Ethridge v. Opitz, 2019 Tex. App. LEXIS 2529 (Tex. App. – Tyler March 29, 2019) (Cause No. 12-18-00088-CV)
H and W divorced in 2010. The decree awarded H the parties’ residence and all of the community interest in a business known as Summit Dairy, including all assets used in connection with the operation of that business. The decree awarded W $50K for her interest in the residence and the business. In 2014, W filed suit against H and also named his parents. This post divorce suit sought division of 6 tracts of land that W claimed were purchased during marriage but which were not awarded as part of the division in the 2010 final decree. H’s parents were joined because W claimed that she and H had purchased 3 of the tracts with is parents jointly. H and his parents claimed that the 6 tracts of land belonged to a partnership which was in effect the business known as Summit Dairy, awarded to H in the divorce. W testified that she paid for the land out of the Summit Dairy account and that this account made all payments on any debts associated with the land as well as taxes and insurance. H and an account both confirmed this was the case. H testified that partnership funds paid for everything. There was no dispute that all 6 tracts were purchased during the parties’ marriage, however the evidence established that 3 tracts were purchased before the partnership was formed. The case was tried to a jury. The jury was instructed on two statutory presumptions. One, that all property acquired during marriage is community property and two, that property purchased with partnership funds belongs to the partnership. The jury awarded a take nothing judgment against W and she appealed. The COA examined the sufficiency of the evidence. Noting that the evidence established that 3 of the tracts were purchased before the partnership existed, the COA determined that these 3 tracts were not mentioned in the divorce decree, making H and W joint owners. H attempted to show that these 3 properties were transferred to the partnership when it was created, but the COA found that there was no written evidence of such a transfer which was required. As such, W’s request to partition these 3 tracts should have been granted. As to the other 3 tracts, the COA determined that H’s testimony created a presumption that the property was purchased with partnership funds and W carried the burden to rebut that. Because there was no evidence offered to the contrary, the jury was allowed to determine that the parties’ intended these 3 tracts to be partnership property, purchased after the partnership was formed. Take nothing judgment reversed as to the 3 tracts purchased as community property and that matter was remanded to the trial court for a just and right division. Terms in the judgment reflecting a muniment of title awarding the properties to Eric modified as the properties belong to the partnership.
- Ramirez v. Ramirez, 2019 Tex. App. LEXIS 2897 (Tex. App. – Austin April 11, 2019) (mem. op.) (Cause No. 03-18-00200-CV)
Upon divorce, H and W entered into an ISA with terms resolving the division of their property and all issues regarding their children. The ISA provided that W would receive a portion of H’s 401k plan with State Farm, specifically $32,040.50 as of the date of the ISA and that a QDRO would be signed. H was awarded the balance of the plan in the approximate amount of $167,606.50. Upon H’s prove-up the court made a docket entry that the parties had reached an agreement. H’s attorney confirmed that the decree conformed to the ISA and the trial court signed a Decree which both parties signed and approved as to both form and substance. The Decree contained a merger clause. Regarding the 401k, the Decree incorrectly provided that H was awarded a portion of the plan, that being $32,040.50 as of September 2016, together with all interest, dividends, gains or losses on that amount until paid pursuant to a QDRO. The Decree then awarded W 50% of the plan together with interest, dividends, gains and losses. Neither party appealed. After plenary power expired H filed a motion for judgment nunc pro tunc, arguing that there was a drafting error, creating a clerical error in the decree. At the hearing H’s counsel testified that she mistaken drafted the Decree. W claimed no mistakes were made. The trial court found that drafting mistakes had occurred and granted the nunc pro tunc, modifying the Decree to comply with the terms of the ISA which the trial court found was the agreement he had adopted when he rendered judgment. W appealed. The COA found that the court’s docket entry, rendering judgment on the ISA, was sufficient evidence to establish that the resulting mistake in the Decree was a product of drafting (clerical) errors, not judicial determinations and reasoning, and thus they were a clerical error which could be corrected by nunc pro tunc. Judgment affirmed.
- Jonjak v. Griffith, 2019 Tex. App. LEXIS 2977 (Tex. App. – Austin April 12, 2019) (mem. op.) (Cause No. 03-18-00118-CV)
Upon divorce, H and W enter into an MSA dividing most of their marital estate. The MSA provided that W would receive $962,000 via QDRO from the Bog Farm Profit Sharing 401k which is 53% of the value of the account as represented by H on the date of mediation. The parties proved up their agreement and the Court ordered H to prepare the Decree consistent with the MSA. Six months later, both parties sought entry and both proposed their own decrees. H’s decree provided W would receive $962,000 from his 401k via QDRO. W’s proposed decree awards her 53% of the 401k account as of a specific date together with interest, dividends, gains and losses from that date to be more particular described in a QDRO. The court held a hearing on the competing decrees in an effort to determine whether W was to be awarded her share as of the date of mediation or as of the date of the QDRO. The court ruled that W received her share as of June 1 (the date of the MSA) then signed a Decree providing that W received a portion of H’s 401k benefits as of June 1 which was 53% or $962,000, together with interest, dividends, gains and losses since that date as provided by QDRO. The QDRO was initially rejected but the trail court thereafter signed a modified QDRO consistent with its ruling. H appealed. H challenged the trial court’s decision to award W a share of benefits “as of June 1” and further challenged inclusion of language giving W “interest, dividends, gains and losses” on the award from that date. The COA agreed with H that the MSA and Decree differ because the MSA does not address “gains and losses” on the amount awarded to W. The COA notes that the trial court has no authority to modify the parties’ contract. As a result, the COA did not reach H’s other issue (award as of June 1) because the date of the award became meaningless when it was determined that W was only to receive the flat sum of $962,000. The COA modified the Decree to delete reference to gains and losses and otherwise affirmed.
- Allen v. Allen, 2019 Tex. App. LEXIS 2979 (Tex. App. – Austin April 12, 2019) (mem. op.) (Cause No. 03-18-00287-CV)
H retired from the US Army in 1982 and began receiving military retirement. The parties’ divorced in 1984 in Washington state. The Decree provided that as child support and spousal maintenance, H would pay each month an amount equal to his military retirement pay (currently $1240 per month) subject to cost of living adjustments. The Decree specified that 1/3 of the amount was deemed spousal maintenance which should continue so long as both parties survive and 2/3 was deemed child support. Up to 2013 W received her payments through garnishment of H’s military retirement pay through DFAS. In 2013, H elected to waive his military retirement in favor of special combat pay and disability. Even so, H continued to receive his DFAS statements showing the amount of military retirement pay being waived. W filed a motion to enforce a foreign judgment under CPRC Chapter 35. The trial court ruled on competing summary judgments and an appeal from that ruling resulted in reversal and remand. Trial on remand occurred in 2017 and H and W were the only witnesses. The trial court granted judgment for W, finding that the arrearages were $41K+ and awarded W $11K+ in attorneys fees. H appealed. Initially H argued that no evidence supports the judgment because W was to receive her spousal maintenance based upon the amount of military retirement pay he received and since this had been waived and he was receiving nothing, there could be no arrearages. The COA found that nothing in the Decree requires that H actually “receive” the military retirement pay as a condition for payment to W. Instead, the Decree required H to make the payments to W in an amount which would be equal to his military retirement pay, a number which was clearly know because H continued to receive statements showing that amount, although waived. H further argued that W was not entitled to any amount of his disability pay which was exempted under the Uniform Services Former Spouse’s Protection Act. But he COA found that W had not been awarded any amount of H’s benefits as property. Instead she had been awarded spousal maintenance calculated based on his military retirement pay. The COA notes the distinction is significant because USFSPA limits the community amount available for division but it does not place such limits on alimony. Judgment affirmed.
- In re Marriage of Douthit, 2019 Tex. App. LEXIS 3046 (Tex. App. – Amarillo April 15, 2019) (Cause No. 07-18-00050-CV)
After a bench trial in a divorce, the trial court confirmed the Hamilton Street residence to H as his separate property and denied W’s reimbursement claim relating to the property. W appealed. The evidence established that in October 2014, H’s son and daughter-in-law deeded the Hamilton Street residence to H and W by warranty deed. Both H and W testified that the deed was acquired in a trade with H’s son and no other compensation was paid. H testified that he traded his son a 10 acre tract of land he owned prior to marriage in exchange for the Hamilton Street property. W argued that H could not trace his separate property ownership of the 10 acre tract and thus he failed to establish that the Hamilton property was acquired with separate property. The COA notes that TFC 3.001 defines separate property as that which is “owned or claimed” prior to marriage. The COA agrees that although H did not produce any document or deed evidencing his ownership of the 10 acre tract before marriage, W’s argument ignores the complete definition of separate property as including property “claimed” before marriage. The COA holds that through testimony, H claimed ownership of the tract before marriage even though he had not yet acquired legal title to it. H had testified that he bought the tract from his brother years before and paid taxes on the property for years but his brother never transferred the deed before he died, however his brother’s widow and he always agreed that the property was his. H stated that when he decided to trade the tract with his son, his brother’s widow simply deeded the property directly to his son. Because the evidence was uncontroverted, the COA found clear and convincing evidence to support the separate property finding. As to W’s reimbursement claim, she testified that the community spent about $20K improving the 10 acre tract and that it was now worth more. However, W failed to put on any evidence as to the value at the time of the improvements or the value now in support of her claim, resulting in no abuse of discretion by the trial court’s decision to deny it. Judgment affirmed.
- Mustafa v. Pennington, 2019 Tex. App. LEXIS 3253 (Tex. App. – Austin April 24, 2019) (mem. op.) (Cause No. 03-18-00081-CV)
P was appointed as an amicus attorney in a custody modification suit between M and F. Pursuant to his investigations and recommendations by a therapist, P secured temporary orders limiting F access until the case could be finalized. The case went to a jury who named M as SMC. While this matter was on appeal, F sued P alleging that he egregiously breached his duties under the Family Code. He also pled for breach of implied contracts in fact and in law, breach of express contract, defamation and negligence. F attached to his suit various pleadings filed by P in the custody case. P filed a motion to dismiss under CPRC 27.002 (an anti-SLAPP motion). F nonsuited the defamation claim. CPRC Chapter 27 is known as the Citizens Participation Act, designed to protect citizens’ communication when exercising their right of free speech, freedom of association and freedom to petition and escape liability from frivolous claims which are based on or related to their communications in the exercise of those rights. SLAPP is an acronym for Strategic Lawsuits Against Public Participation and CPRC 27.002 allows a defendant who has been sued to file an anti-SLAPP motion seeking dismissal of the claims if they are related to communications in the protected areas unless the plaintiff can make a prima facie case. P asserted that F’s claims against him were based upon or related to P’s communications within the custody litigation wherein P was exercising his right to petition by participating in pre-trial, trial and post-trial judicial proceedings. F argued that P’s actions were not protected by the statute. The trial court agreed with P and dismissed the suit and awarded P attorney fees. F appealed. The COA examined the allegations and determined that P’s participation in the custody suit did in fact qualify as communications in a judicial proceeding for which Chapter 27 applied and that once he established that F’s claims against him were based on or related to those communications, the burden then shifted to F to make a prima facie case. The COA noted that there was no contract, express or implied, because the order appointing P as the amicus was not a contract and further because the amicus owed a duty to the court, he did not violate any statutory duty to the children. The COA determined that as such, F could not establish even the first element of his claim for breach of contract and thus dismissal was justified. Dismissal affirmed. COMMENT: As you are likely aware, TRCP 91a governs early motions to dismiss claims which are alleged to have no basis in law or in fact. However, the benefits the rule affords as a quick method of disposal cannot be used in cases brought under the Family Code as expressly provided by the Rule. CPRC Chapter 27 does not currently exclude cases brought under the Family Code, however lobbying efforts supported by the State Bar Family Law Section are currently underway to secure such an exemption. This case demonstrates a possible reason to pause those efforts. Here, the amicus attorney effectively used Chapter 27 against baseless claims. Could the statute be used against baseless “conspiracy” claims brought amidst a divorce or baseless claims regarding a spouse’s activities in association with business entities or partnerships (both involving communications while exercising the right of association)? If you have thoughts or concerns regarding the possible exemption, consider reaching out to the Foundation. Their website is www.texasfamilylawfoundation.com.