Texas Divorce Attorney Blog

Texas Appeals Court Concludes Stock Issued by Husband’s Employer Was Community Property

Published on: September 19, 2023 | by Kelly McClure

There is a presumption that property possessed by a spouse during or on Texas marital dissolution is community property. A party claiming separate property must prove its separate character by clear and convincing evidence. Tex. Fam. Code § 3.003. In a recent case a wife appealed the trial court’s characterization of stock shares granted to the husband by his employer.

Stock Shares

According to the appeals court’s opinion, the parties got married in December 2006. The husband started a new job in February 2015 and the next year received a million shares of the company’s stock. The husband stated he had entered into an agreement with the company when he received the stock, but could not find it and could not get a copy from the company. The stock certificates did not indicate why they were issued.

The husband’s employment contract provided that he would receive an annual salary of $100,000. Additionally, he would receive a signing fee, an additional payment upon the next fundraising event, and an annual payment for four years, as compensation for “assets, access to ‘[husband’s] IP,’ and inventory” the husband provided pursuant to the employment agreement. The company also agreed to take on certain debts and liabilities the husband owed. The contract indicated the husband would receive “a total compensation of over $750,000” for the use of the husband’s assets and intellectual property, without referencing the stock shares.

Texas Court Denies Child Support Modification Based on Father’s Alleged Change in Income

Published on: September 10, 2023 | by Kate Mataya

A trial court may modify a Texas child support order if there has been a material and substantial change in circumstances since the rendition of the prior order. The party seeking the modification has the burden of establishing the change in circumstances. The court may also modify an order if it has been at least three years since the prior order was rendered or modified and the order varies by 20% or $100 from the guidelines. Tex. Fam. Code § 156.401(a). As with many issues involving child custody or support, the court’s primary consideration should be the child’s best interest. A father recently appealed a court’s denial of his request to modify his child support obligation due to a change in income.

Petition for Modification

According to the appeals court, the father’s monthly child support obligation under a 2015 agreed order in a modification suit was $1,231.78 and his monthly medical support obligation was $105. There were no findings as to the father’s net resources or any indication in the order that the child support was based on the guidelines.

The father petitioned for modification in October 2021, alleging a material and substantial change in his circumstances based on his income. He requested a decrease in his child support obligation. The mother argued that the previous modification agreement had not been based on the child support guidelines. She further argued that a change in the father’s income did not constitute a material and substantial change in circumstances because there was no indication the parties had relied on the father’s income in setting the child support obligation in the agreed order.

Characterization of Personal Injury Recovery in Texas Divorce

Published on: September 4, 2023 | by Francesca Blackard

The characterization of funds received for personal injuries can be a complex issue in a Texas divorce. Texas family law presumes that property possessed by a spouse during or on dissolution of the marriage is community property. When a spouse claims certain property is separate, that spouse must prove by clear and convincing evidence that the property is separate. Tex. Fam. Code § 3.003. Pursuant to Tex. Fam. Code 3.001, recovery for personal injuries sustained during the marriage is separate property. There is an exception, however, for recovery for lost earning capacity during the marriage. Because a spouse claiming separate property has the burden of proof, that spouse must show by clear and convincing evidence what part of a personal injury settlement is separate property. Recently, a husband appealed the trial court’s ruling which characterized his personal injury recovery as community property.

Personal Injury Settlement

According to the appeals court, the husband and wife married in 1994 and lived separately at various times during the marriage. In December 2014, husband was injured as the result of an automobile accident in the scope of his employment. The parties were separated when the accident occurred, but subsequently reconciled.

The husband settled for the other driver’s policy limits of $30,000. He also received net proceeds of $710,724.25 from a settlement with his employer’s under-insured motorist coverage. Thereafter, his attorneys transferred those funds into the parties’ joint checking account on October 8, 2019. The parties then separated that month and the wife filed a divorce petition on November 1.

Texas Court Allows Mother to Relocate with Children to Maine

Published on: September 1, 2023 | by Kelly McClure

Generally, a parent seeking modification of a Texas custody order must show that there has been a material and substantial change in circumstances and that the modification is in the child’s best interest. The determination of whether there has been a material and substantial change of circumstances is fact specific. By way of example, a material and substantial change in circumstances may include a parent’s remarriage or, when there is a request for a change in child support, a change in income. A father recently appealed a modification order that permitted the mother to relocate with the children.

The parties’ agreed divorce decree named the parties joint managing conservators and granted the mother the right to designate the children’s primary residence. Subsequently, the mother petitioned for modification in 2022 because she wanted to move to Maine with the children. Following trial, the trial court granted the modification. Specifically the trial court ordered modified the children’s geographic restriction to include Maine, modified the father’s possession and access, and awarded the mother child support.

The father appealed, arguing that the trial court abused its discretion because there had been no substantial or material change in the parties’ or children’s circumstances, and that the move was not in the best interest of the children.

Texas Appeals Court Upholds Business Property Valuation in Divorce Case

Published on: August 28, 2023 | by Francesca Blackard

Businesses can be difficult to accurately value in a Texas divorce. A wife recently challenged a property division involving two businesses, arguing the court had insufficient evidence to make the just and right division.

When the husband filed for divorce, each party pleaded the marriage was insupportable. The wife also pleaded the husband had committed adultery.

According to the appeals court’s opinion, the significant assets were a business operated by the wife, an interest in a pool-installation business operated by the husband, the houses each party lived in, two rental properties, a house in Mexico, an interest in two lots where the pool installation business was located, several vehicles, and several bank accounts and a CD.

Texas Legislative Update

Published on: August 16, 2023 | by Brandon Joseph

During its most recent session, Texas lawmakers adopted and passed several amendments and updates to the Texas Family Code, which were then formally signed into law by the Governor.

These revisions and additions to the Texas Family Code impact numerous areas of family law, including but not limited to: (1) suits for the dissolution of marriage; (2) suits affecting the parent-child relationship; (3) protective orders; and (4) discovery in cases filed under the Texas Family Code.

Ranging from modifications to elements necessary to prove a claim, clarifications to existing codified law, and the removal of automatically triggered disclosure requirements, family law practitioners throughout the State of Texas should familiarize themselves with these changes and how such changes impact their practice.

Appeals Court Reverses Denial of Motion to Compel Arbitration in Texas Custody Modification Case

Published on: August 16, 2023 | by Kelly McClure

Sometimes after agreeing to mediate or arbitrate future controversies at the time of a Texas divorce, one party may not want to follow through on that agreement when a controversy actually arises. In other cases, the parties may disagree on whether the alternative dispute resolution provision applies to a particular claim or controversy. In such circumstances, the party seeking arbitration may move to compel arbitration. That party must show that there is a valid arbitration agreement and that the dispute is within the scope of the agreement.

Arbitration Provision

In a recent case, a father appealed the trial court’s denial of his motion to compel arbitration. According to the appeals court’s opinion, the final divorce decree included an alternative dispute resolution provision. The provision provided the parties shall mediate the controversy in good faith before setting a hearing or initiating discovery in a suit to modify the terms and conditions of conservatorship, possession, or child support, except in case of an emergency. The provision specified it did not apply to enforcement actions. It required a party seeking modification to give the other party written notice of the desire to mediate. If the parties do not agree on a mediator within 10 days or the other party does not agree to or fails to attend mediation, the party seeking modification is relieved of the obligation to mediate. The provision further provides that if a controversy could not be settled by mediation, the parties agreed to submit it to binding arbitration with a specified arbitrator.

In the fall of 2021, the father started trying to negotiate custody matters. In July 2022, the mother’s attorney sent an email to the father’s attorney stating modifications did not need to be arbitrated. The father’s efforts to negotiate or mediate failed, and he sent an email demanding arbitration at the beginning of August.

Texas Supreme Court Reverses and Remands Custody Case for Child Interview

Published on: August 14, 2023 | by Brandon Joseph

In some Texas custody disputes, a parent may want the court to hear an older child’s preferences regarding conservatorship or possession. Upon application of a party in a suit affecting the parent-child relationship, the court is required to interview a child 12 or older in chambers to determine their wishes regarding conservatorship or the exclusive right to determine their primary residence, in a nonjury trial or hearing. If the child is under 12, the court may interview them, but is not required to do so. Tex. Fam. Code § 153.009(a). A mother recently appealed a judgment awarding the father the exclusive right to designate the children’s primary residence after the court declined her request for an interview.

Trial

According to the opinion of the Supreme Court of Texas, the father petitioned for divorce in 2017. He requested the court interview the children. The mother, however, demanded a jury trial and paid the associated fee. Mother subsequently withdrew the jury demand. Her attorney stated she did so to benefit from the interview provision in Section 153.009(a), and the mother ultimately testified similarly.

The mother’s attorney requested an in-chambers interview with the oldest child pursuant to Section 153.009(a) by letter emailed to the court coordinator. The attorney also repeatedly called the coordinator to try to get the interview scheduled. The attorney also requested the interview again at trial, explaining the mother had withdrawn her demand for a jury trial to allow for the interview. The court, however, denied the request because the mother had not filed a written motion. The oldest child was 13 at the time of the trial.

Texas Appeals Court Reverses Summary Judgment in Custody Modification Case

Published on: August 6, 2023 | by Francesca Blackard

Generally, when a parent seeks modification of a Texas custody or visitation order, they must show that they modification would be in the child’s best interest and that there has been a material and substantial change in circumstances since the earlier of the prior order’s rendition or the date the mediated or collaborative law settlement agreement upon which the prior order was based was signed. Tex. Fam. Code 156.101. Whether there have been material and substantial changes is a significant issue in many modification cases. In a recent case, a father challenged an order granting a no-evidence summary judgment in favor of the mother and disposing of his claims for modification.

Pursuant to the parents’ mediated settlement agreement and agreed order, neither had the exclusive right to designate the primary residence of the child, but instead each parent had the right to establish the primary residence during their possession periods within 15 miles of the child’s school. The mother, however, was permitted to establish the primary residence during her possession at her home until she moved. Possession alternated weekly during the school year and every two weeks during the summer break.

Father Seeks Modification

In January 2021, the father moved to modify the order, alleging material and substantial changes in circumstances. He requested the exclusive right to designate the child’s primary residence and to make a number of decisions, including to enroll the child in team sports. He also asked that the mother be enjoined from enrolling the child in extracurricular activities that would occur during his possession. He also asked for the right of first refusal and an expansion of the geographic restriction to two counties.

Texas Court Awards Husband Frozen Embryos in Divorce

Published on: July 26, 2023 | by Francesca Blackard

Fertility treatments and assisted reproductive techniques can be a miracle for many families. They may also, however, lead to complicated family law issues. A former wife recently appealed a judgment awarding frozen embryos to her former husband in the divorce.

According to the appeals court’s opinion, the parties utilized IVF treatment and still had three embryos in cryogenic storage at the time of the divorce.

The parties signed a “Consent Form Cryopreservation of Embryos” (“Agreement”) that addressed the storage of the embryos and made them subject to the disposition of the husband if the parties divorced.