Property

When Business and Pleasure Become Commingled

Published on: February 6, 2017 | by McClure Law Group

If your business partner is also your life partner, you need to consider a recent Texas high court decision. (read more)

Gonzalez v. Maggio, 500 S.W.3d 656 (Tex. App. – Austin 2016) is a Texas case that illustrates the complexities of ending a business partnership along side of ending a personal partnership. The Texas Court of Appeals reviewed how a husband and wife, who were also law partners, would divide their clients, fees, and remaining clientele.

The case arose out of a divorce in which the husband and wife had also formed a law partnership during their marriage. There was no written partnership agreement but it was undisputed that they shared in the capital, profits and losses 50/50.

Property Division and Adult Disabled Child in Texas Divorce Case

Published on: December 27, 2016 | by Kelly McClure

In the Matter of Luna and Vicente Luna considered an appeal from a final divorce decree in 2015, which was memorialized in a written decree that granted a couple’s divorce, divided their property, and provided for support and conservatorship of their adult disabled child. The couple had married in 1980 and separated in 2014. During their marriage, the father started a construction company.

By the time of the divorce, the couple disagreed about the company’s ownership. The father claimed he’d sold half of the company to his son, but he later testified the son was an employee earning $23/hr. During cross-examination, the son admitted the name certificate did not include his name until 2015, and his father had responsibility for paying payroll taxes and had authority to write checks.

At trial, the father testified the construction company had paid no federal income taxes, nor had it entered profit and loss statements into the record. The total of the evidence came from introducing banking records for the construction company for 2013, 2014, and 2015.

Dividing a Family Business and the Community Estate in Texas

Published on: December 23, 2016 | by Kelly McClure

In the Matter of Marriage of Belcastro and Belcastro considered issues raised by an ex-husband related to the division of the community estate and debt. The case arose from a couple that had married in 2004. The wife was an Army major, assigned to bases in Texas, Iraq, and Germany. She’d been hurt while serving and had a disability rating of 90%. In 2007, she’d set up an LLC that repaired and installed roofs and renovated properties. Her husband had been in construction and roofing for his entire adult life, and he was general manager for the company.

He gave the company tools and equipment he owned before marriage. The company owned real estate and used different names. The wife wanted to increase the odds that the company would qualify for military contracts. She asked her husband to give up his marital rights in the business so that they could claim a disabled female veteran wholly owned the company.

The husband agreed and relinquished his communal marital property rights in connection with the business. The wife retired in 2012, and she moved home with her husband. The next year, she filed for divorce. They tried to reconcile but ultimately separated by the spring of 2014.

Property Distribution Post-Divorce in Texas

Published on: December 20, 2016 | by Kelly McClure

Texas Family Code section 9.007(a) does not permit a trial court to modify property division that is subject to a divorce decree. In the recent Texas appellate case of Perry v. Perry, an ex-husband appealed from a post-divorce order that appointed a receiver to sell a house that was the former community property of the ex-husband and his ex-wife.

The couple had divorced in 2012. The divorce decree awarded the husband possession of the house and each of the spouses half of the sales profits. Part of the divorce decree was on a form, and the other part was added in handwriting by the divorcing couple. Specifically, the form awarded the house to the husband, while divesting the wife of her interest. However, the handwritten part gave the wife half of the profits of the sale.

Years after the couple divorced, the husband sued to enforce the decree and claimed the wife had violated it by refusing to sign a transfer deed. He asked the trial court to order her to transfer her interest to him and claimed her refusal to sign the deed kept him from selling their former home. The wife asked the court to clarify the rights and duties of the parties. She said that her ex-husband had told her he wouldn’t give her half the profits once the house was sold and asked the trial court to appoint a receiver, claiming that since there was a risk of foreclosure, it was necessary for a receiver to protect both her interest and her husband’s.

Interpreting Texas Premarital Agreements

Published on: November 20, 2016 | by Kelly McClure

In re Interest of HDV arose when a husband appealed a final divorce decree, arguing among other things that the trial court had erred in awarding his wife money and property under their premarital agreement. The couple had entered into the agreement, which included a provision that there would be no community property, months before their marriage in 2003. The husband obtained a judgment that it was enforceable. While married, the couple had two kids.

The wife filed for divorce in 2010, and the husband counter-petitioned. The court ordered the husband to pay the wife’s attorneys’ fees on a temporary basis. The couple agreed to a parenting trial just before the court held a bench trial on the financial issues in 2014. The parenting plan was incorporated into the decree, which affirmed that the premarital agreement was valid and that there was no community property. The court awarded the husband and the wife, respectively, all of the property that he or she possessed. It awarded the wife as separate property a 2002 car. It also ordered the husband to pay the wife an allowance of $30,000, plus $3 million.

The husband appealed, arguing that the trial court shouldn’t have awarded the wife money and property based on the premarital agreement. The premarital agreement had stated that upon death or divorce, each party would receive their separate property, and the husband would make a payment to the wife based on how long the marriage lasted. In this case, the provision about a five-year marriage applied. Based on the provision, the court calculated the husband’s net worth from the date of the filing of the divorce petition, and it accordingly found that the husband had to pay the wife $3 million.

Retroactive Child Support in Texas

Published on: November 10, 2016 | by Kelly McClure

In the Texas appellate case of In re Aer, a father appealed a divorce decree in connection with an award of retroactive child support and the distribution of marital property. The mother and father sued for divorce. The court held a bench trial and appointed the couple joint managing conservators of the children. The mother was the parent with the exclusive right to designate the children’s primary address. She was also awarded over $50,000 in retroactive child support, attorneys’ fees, and 80% of the marital estate (according to the father).

The father appealed, claiming that the evidence for the child support award and property distribution was legally and factually insufficient. The appellate court explained that it would consider whether the trial court had enough evidence upon which to use its discretion and whether it had made a mistake in applying its discretion. It further explained that a trial court has broad discretion to award attorneys’ fees under Texas Family Code § 106.002. The mother’s attorney had provided testimony regarding his fees and claimed that the high fees were driven by the father’s conduct in not answering timely discovery and dumping unorganized documents on him. The court found there was no abuse of discretion in awarding $130,000 in fees to the mother.

The father also argued that the mother didn’t have pleadings to support her request for retroactive child support. The mother’s attorney had asked during closing arguments that child support be paid retroactively to June 2012, due to the father’s intentional unemployment or underemployment during that period. However, the father had not objected at trial to either the closing arguments or the mother’s request to include an order to pay retroactive child support, nor did he object at the time the trial court signed the divorce decree, including retroactive child support. The court concluded these complaints weren’t preserved for review.

Who Keeps the Engagement Ring if the Wedding is Called Off?

Published on: November 2, 2016 | by Kaitlin Capetillo

What happens to the engagement ring if someone calls off the wedding?

Unfortunately, before some engaged couples can make it down the aisle to say “I do”, someone says “I don’t”. The issue of who gets to keep the engagement ring often surfaces during this heartbreaking time.

An engagement ring is a gift and the law requires three elements to constitute an irrevocable gift:

Right to Reimbursement in Texas Divorce

Published on: July 15, 2016 | by Kelly McClure

In McCoy v. McCoy, a Texas husband appealed from a divorce decree, arguing that the lower court should not have denied his claim for reimbursement. The couple started dating in 2009. In the following year, they got engaged, and the husband moved to start law school. His fiancée joined him there in a rental house. They married in 2011. The wife worked full time during the husband’s first year in law school but then started going to law school as well. They both relied on student loans to cover their expenses and tuition.

Later, the husband claimed they had an agreement that the wife would pay him $700 every month and also pay for groceries and gas. He argued that she budgeted poorly and only sometimes paid this part of the expenses, and as a result he had to get supplemental student loans to cover her portion. They kept separate checking accounts related to their different law school loans.

In 2013, after the husband graduated, the wife filed for divorce. The husband responded by claiming he was entitled to reimbursement from his wife because he’d had to use his separate property to pay for her necessary living expenses. A bench trial was conducted, and the trial court divided the marital estate by awarding each of them the property they possessed and by ordering each spouse to pay his or her loans and debts solely in his or her name. The trial court also found that the husband’s request for reimbursement wasn’t supported by a preponderance of the evidence.

Enforceability of a Rule 11 Agreement in Texas

Published on: July 15, 2016 | by Kelly McClure

Family law judges encourage those getting a divorce to enter into settlement negotiations rather than proceed to trial. Under rule 11 of the Texas Rules of Civil Procedure, agreements reached during these negotiations are not enforceable unless they are written, signed, and filed with the divorce papers as part of the record, or the agreement is made in open court and entered as part of the record. In order to have the agreement be enforced, all material terms are supposed to be included, and they should be clear and unambiguous.

In Bush v. Bush, a Texas Court of Appeals considered the enforceability of a rule 11 agreement. The case was an appeal from a divorce decree in which the husband challenged the trial court’s award of two parcels of real property to his former wife. The wife sued for divorce in March 2013, and in response the husband filed a counter petition for divorce and moved to enforce a rule 11 agreement regarding the division of property, which his ex-wife and he had filed in a prior divorce case that was dismissed in 2006.

He subsequently moved to transfer and consolidate the current divorce proceeding with the previously dismissed case. The trial court came to the decision that the prior divorce had been dismissed by agreement of the parties and that since the parties agreed to the dismissal and signed the order, everything in the prior proceeding had been dismissed, and the prior case did not need to be reinstated into the current case. It also found that rule 11 agreements may be revoked until they are accepted by the court and incorporated in a final order, and this wasn’t done in the prior proceeding. The court also held that even if the agreement had survived, it didn’t have the specificity necessary to be enforced, although with respect to the sale of a particular piece of real property, the agreement might be enforceable through the application of contract law.

Division of Property in Texas

Published on: April 11, 2016 | by Brandon Joseph

Alex Graves, award-winning director of “The West Wing” recently finalized his divorce from his wife of 19 years. Pursuant to the final order, the spouses’ property was divided evenly. Does the State of Texas mandate a fifty-fifty division of property upon divorce? The short answer is “no.” Continue Reading ›