Divorce

Texas Appeals Court Husband Did Not Overcome Community Presumption in Divorce

Published on: July 14, 2024 | by Kelly McClure

Community property is the property acquired by other spouse during the marriage, except separate property. Tex. Fam. Code § 3.002. Separate property is generally that property the spouse owned or claimed prior to the marriage, property acquired by gift, devise, or descent during the marriage, and personal injury recoveries with the exception of recovery for lost earning capacity during the marriage. There is a presumption that property possessed by either spouse during or on dissolution is community property. This presumption can only be rebutted in a Texas divorce by clear and convincing evidence. Tex. Fam. Code § 3.003. Separate property remains separate as long as the community presumption is overcome by tracing the assets back to separate property. Mischaracterizing property and awarding a spouse’s separate property to the other spouse constitutes an abuse of discretion and reversible error by a trial court in a divorce. A husband recently appealed the property division in his divorce, arguing the trial court had mischaracterized some of his separate property as community property.

Property Division

The parties had been married about nine years when the wife filed for divorce. In his counterpetition, the husband asked the court to confirm certain property was his separate property. The trial was focused on the property division, included two houses and an individualized retirement account (“IRA”). The trial court awarded one house to each party and ordered that the spouse awarded each house was responsible for the balance of that house’s mortgage. The court also ordered the IRA funds be split equally. The trial court confirmed certain home furnishings were the wife’s separate property and a sword stand and orange sofa were the husband’s separate property.

Texas Court Rejects Wife’s Argument Husband Sold Commercial Goodwill

Published on: July 7, 2024 | by Francesca Blackard

The court must divide marital property in a just and right manner in a Texas divorce. In some cases, the parties only have tangible or clearly identifiable assets such as real estate and back accounts. In other cases, however, there may be more abstract assets involved. A former wife recently challenged a property division, arguing the court had not properly divided the assets in light of the husband’s sale of commercial goodwill.

The Husband’s Agreement

The parties got married in 1998. The husband worked as a financial advisor starting in the early 2000s. He entered into a “Non-Compete Representative Agreement” with a financial services company in late 2014. The agreement stated he would solicit security purchases as an independent contractor of the company and be compensated on a commission basis. He earned 35% for business written after June 1, 2014, and 52% for business written before April 1, 2014. He could increase his earning to 64% for business written before April if the “net GDC” was greater than $700,001. The agreement also provided that the husband could only continue business with the clients listed in Exhibit B after the agreement was terminated, but no Exhibit B was generated.

The divorce decree was signed at the end of February 2023. The court found the right to receive a greater commission for business written before April 1, 2014 was not a material asset to be divided but was income earned for services and constituted the husband’s “future separate property.” The court also found no commercial good will was transferred to the company because of the husband’s employment with the company or the agreement.

Meritorious Defense Requirement for Bill of Review for Default Texas Divorce

Published on: May 31, 2024 | by Kelly McClure

When a party does not file an answer or participate in a Texas divorce proceeding, the court may issue a default judgment against them. A mother recently challenged the default divorce decree entered against her through a petition for bill of review.

A bill of review is brought when a party seeks to set aside a judgment that cannot be challenged by appeal or a motion for a new trial. A party seeking a bill of review generally must show that they have meritorious claim or defense they could not make due to an official mistake or the other party’s fraud, accident, or a wrongful act, with no fault or negligence by the petitioner. Unless the petitioner claims they were not served, they must first present prima facie proof of a meritorious defense before trial. If the petitioner meets this burden, the court then conducts a trial on the merits. A petitioner shows they have a meritorious defense if the defense is not barred by law and they would be entitled to judgment if there is not contradictory evidence offered on retrial. Any factual dispute is resolved in favor of the petitioner.

The parties got married in 2012 and had two children together. They separated in 2021. The father petitioned for divorce in February 2022. According to the appeals court’s opinion, the mother was service with process, but did not file an answer or otherwise participate. The mother alleged that they “communicated openly” about child support and possession while the case was pending. The mother contacted the court’s office in March regarding final hearing dates and was told nothing had been set, but a default divorce decree was entered on April 4.

Texas Post-Judgment Qualified Domestic Relations Order

Published on: May 7, 2024 | by Kelly McClure

When retirement accounts are an issue in a Texas divorce, the court will generally issue a Qualified Domestic Relations Order (“QDRO”). A QDRO is an order that creates, recognizes, or assigns rights of an alternate payee to receive benefits from another person’s retirement plan. Although a QDRO is often issued during the divorce, in some cases, a court may enter a post-judgment QDRO. A former wife recently challenged a post-judgment QDRO, arguing it was void.

The parties had been married around nine years when the wife petitioned for divorce. The trial court awarded the wife all sums, increases, proceeds, and other rights related to her employee retirement accounts, except $10,000 from her Teacher Retirement System (“TRS”) account went to the husband. The divorce decree was signed on March 27, 2019 and the divorce was effective October 31, 2018.

Husband Seeks QDRO

The husband filed a proposed order on June 3 in the divorce case seeking a QDRO but did not serve the wife. The court entered an order a few days later designating the husband alternate payee of the wife’s TRS plan and stating he was not to “receive more than a total of $10,000 plus interest. . ..”

Texas Divorce Involving Adultery

Published on: April 19, 2024 | by Francesca Blackard

Although Texas has recognized no-fault divorce since 1970, it also still recognizes fault-based divorce on grounds including adultery, cruelty, and conviction of a felony. Proving an at-fault ground for divorce can affect property division, spousal maintenance, and other matters in a divorce.

A spouse seeking divorce based on adultery must prove by “clear and convincing” evidence, beyond just suggestion and innuendo, that the other spouse had sexual intercourse with someone else during the marriage. Evidence may include text or email messages, phone records, photos, or financial records. Adultery can occur at any point during the marriage, even after the spouses stop living together.

Property Division

The court in a Texas divorce must divide the community estate in a “just and right” manner. A court has broad discretion in formulating a just and right division, and may consider a number of factors in doing so. One of those factors is fault in the breakup of the marriage. A spouse alleging the other committed adultery may therefore seek a disproportionate share of the community property based on the alleged affair.

Texas Appeals Court Reverses Restitution and Reconstitution of Community Estate

Published on: April 7, 2024 | by Francesca Blackard

A party to a Texas divorce is entitled to reimbursement to the marital estate when community time, labor, or skills are used to benefit the other party’s separate estate beyond what is needed for maintenance of the separate property. The trial court has broad discretion to apply equitable principles. A former wife recently challenged a divorce decree that granted her former husband’s requests for reimbursement and reconstitution of the community estate.

According to the appeals court’s opinion, the husband requested a disproportionate share of the community property and reimbursement to both the community estate and his separate estate. He argued the wife’s separate estate had benefited from both the community and his separate estate. He also alleged the wife conspired with her daughter “to accomplish an unlawful purpose and/or to accomplish a lawful purpose by unlawful means” to dispose of the proceeds from the sale of a house. He sought actual and exemplary damages as well as attorney’s fees.

The wife also requested a disproportionate share of the community estate. She argued the civil conspiracy claim was barred by both the statute of limitations and the statute of frauds. She also argued that the parties freely granted their interest in the property to her daughter and that the husband had agreed to and ratified her actions.

Division of Military Retirement in a Texas Divorce

Published on: March 31, 2024 | by Kelly McClure

A Domestic Relations (“DRO”) is often used in divorce to address the rights of the former spouse as an alternate payee to receive some or all of a participant’s benefits under a retirement plan. A trial court generally does not have the authority to render orders after expiration of its plenary power over a final judgment. If a Texas divorce decree becomes final and unappealable without rendering a DRO, then the trial court only has the authority to render a valid DRO upon a petition and service pursuant to the Texas Rules of Civil Procedure. A judgment is rendered when the trial court officially announces its decision orally in open court or in a filed memorandum. An oral rendition must indicate the trail court’s intent to render the full, final, and complete judgment.

A husband recently appealed a DRO. The parties entered into a mediated settlement (“MSA”) that was memorialized in the agreed final divorce decree. The decree included provisions related to the husband’s military retirement and stated they would be more particularly described in a Domestic Relations Order (“DRO”). The husband his attorney signed the decree. The husband moved for the signing of the DRO in June 2022, stating he believed the proposed DRO accurately reflected the parties’ agreements. The court and the parties’ attorneys signed the DRO.

After the husband got a new attorney, he moved to vacate the DRO, arguing the divorce decree was not a rendition of judgment on the DRO and the DRO had been rendered outside the court’s plenary power. He argued, in the alternative, for modification of the DRO because the calculation used to determine the wife’s share was not in compliance with federal law. The trial court denied the motion.

Texas Court Denies Ex-Wife Postjudgment Interest on Accounts Awarded in Divorce

Published on: February 19, 2024 | by Kelly McClure

Appeals of a Texas divorce can be lengthy and may sometimes result in a significant delay in a party receiving the assets they were awarded in the decree. In some cases, courts may award postjudgment interest on a money judgment. In a recent case, a Texas appeals court considered whether an award of a brokerage account in a divorce property division authorized postjudgment interest.

Case History

According to the appeals court’s opinion, the parties got married in the early 1990s and divorced in 2018. The decree awarded the wife two investment accounts, together valued at $548,177.25. The decree also awarded her the equivalent value of $1,062,242.20. The accounts were invested and therefore fluctuated in value. The decree provided that the accounts were to be divided as “more particularly defined in a Qualified Domestic Relations Order signed by the Court.” The decree did not state the amounts of cash or securities held in the accounts, but did include “interest, dividends, gains, or losses” on the awards.

The husband appealed, but the appeals court affirmed the property division and the Texas Supreme Court denied review. The appeal was not resolved until April 19, 2021, and the wife was denied access to the accounts while the appeal was pending. She requested interest on their value, but the trial court concluded the awards were not “money judgments” and denied the request for interest.

Texas Appeals Court Rejects Challenge to Jury Charge in Divorce Case

Published on: February 14, 2024 | by Kelly McClure

In a jury trial, the court must submit to the jury the instructions and definitions needed for it to render a verdict. The court cannot comment directly on the weight of the evidence, but an incidental comment on the weight of the evidence may be acceptable. Tex. R. Civ. P. 277. A husband recently appealed his divorce decree, arguing the trial court erred in failing to give a requested jury instruction and improperly commenting on the weight of the evidence.

The Trial

According to the appeals court, the husband petitioned for divorce in August 2019, seeking a disproportionate share of the marital estate and alleging the wife committed fraud on the marriage. He asked the court to confirm the marital residence was part separate property and set aside a 2019 gift warranty deed conveying it to the wife. He alleged the deed was “done by mistake, undue influence, and under duress.”

The wife disputed the husband’s claims of mistake or fraud. She also sought a disproportionate share of the property and requested exclusive possession and use of the residence.

Fraud on the Community in Texas Divorce

Published on: February 10, 2024 | by Francesca Blackard

Spouses have a fiduciary duty toward each other with regard to the community estate and commit fraud on the community if they breach a legal or equitable duty in violation of the fiduciary relationship. Fraud on the community often occurs when assets are transferred to a third party, but can also occur when it is unaccounted for.

If a court determines a spouse committed fraud, it must determine the amount the community estate was depleted and the total value it would have had absent the fraud. The trial court then divides the reconstituted estate in a just and right manner, which may include awarding the other spouse a disproportionate share of the community estate, a money judgment, or both. Tex. Fam. Code § 7.009. A husband recently appealed the trial court’s finding of fraud, judgments, and property division in his Texas divorce.

The Marriage

According to the appeals court’s opinion, the husband owned a home when the parties married in 2002.