Property

Texas Divorce Court Must Compel Arbitration of Dispute Regarding Buyout Provision of Company Agreement

Published on: November 3, 2021 | by Kelly McClure

iStock-1287431987 A family business can complicate the property division in a Texas divorce. A recent case considered whether a husband could compel arbitration to enforce a buyout provision in a company agreement during the divorce proceeding.

The parties formed a limited-liability company together during the marriage, with each owning a 50% membership interest. The husband subsequently petitioned for divorce and the wife filed a counterpetition. Both attached the standing order required by the Travis County District Clerk to protect the parties and preserve their property while the case is pending. The standing order applies to all divorce suits filed in Travis County (and many other counties have similar standing orders, such as Dallas, Collin, Denton, Rockwall, and Tarrant Counties) and prohibits parties from taking certain actions that would harm or reduce the value of the property and from selling or otherwise alienating property belonging to either party.

Wife Seeks to Compel Arbitration on Business Disputes

The husband sought injunctive relief and temporary orders to address disputes relating to operation of the business. The wife asked for those disputes to be resolved according to the company agreement, which required any court proceeding brought by one owner against the other be submitted to mediation first and then to binding arbitration if not resolved. The parties were required to go to mediation and arbitration and the arbitrator entered an award regarding management and control of the business. The wife moved to enforce the arbitration award and the court entered temporary orders in accordance with that award.

Compelling Texas Divorce Court to Specify Property Valuation

Published on: October 19, 2021 | by Francesca Blackard

iStock-483613578 A trial court that has divided property in a Texas divorce must provide written findings of fact and conclusions of law, including how it characterized and valued the assets and liabilities, if a party properly requests them. In a recent case, a husband challenged the court’s refusal to specify the valuation it used for the parties’ assets when there was no request for findings of fact and conclusions of law.

Wife Seeks Fault-Based Divorce

When the wife filed for divorce, she asked for a disproportionate share of the community estate. She claimed the husband was at fault in the break-up of the marriage.

The wife submitted a spreadsheet of the assets she requested showing both her and the husband’s valuation of each. She valued the assets she requested at $2,084,714, and the husband valued them at $2,585,450. She also presented a spreadsheet of the assets she proposed be awarded to the husband, with her valuation totaling $2,662,329 and the husband’s totaling $2,612,102.

Cruelty and Fraud on the Community in a Texas Divorce

Published on: August 4, 2021 | by Francesca Blackard

iStock-848796670 The trial court must divide property in a just and right manner in a Texas divorce. The division must be equitable, and should not be punitive against either spouse. A husband recently challenged a property division, arguing it had been punitive against him.

The wife filed for divorce after the parties had been married for over 30 years. She alleged the husband had engaged in cruel treatment and had committed fraud on the community estate.

Wife’s Trial Testimony Highlighted Abusive Marriage

The wife said the husband often disparaged her appearance, individual worth, and profession in front of others and in private. According to appeals court’s opinion, the husband earned significantly more money than the wife and controlled the couple’s finances. The wife said the husband used his control of the couple’s finances punitively and, for example, would not give her money to go to Poland to visit her family when they were sick and would not pay for a surgery she needed. She also testified that he said her mother had died of a stroke because she was a bad daughter and a bad person. Other witnesses, including the couple’s daughter, corroborated the wife’s allegations of verbal abuse. The husband, however, denied it and claimed they were all liars.

Wife Waived Right to Tax Reimbursement by Failing to Comply with Texas Divorce

Published on: July 25, 2021 | by Kelly McClure

does-adultery-affect-alimony-in-idaho-1080x600-1 When the parties to a Texas divorce agree on a property division, they may agree that certain obligations or conditions must be met. If a party fails to meet their obligations as agreed to and set forth in the divorce decree, they may not be entitled to the property they were expecting. In a recent case, a husband challenged a court order requiring him to reimburse the wife for certain tax liabilities after she failed to provide him the documentation required to calculate the amount he owed in accordance with the decree.

Wife Fails to Comply with Requirements of Divorce Decree

The parties’ mediated settlement agreement was incorporated into their divorce decree. The decree required the wife to withdraw funds from the husband’s pension plan. After paying certain debts, her attorney was to distribute 30% of the remainder to the wife and 70% to the husband. The decree required the husband to reimburse the wife 70% of her income tax liability for those funds. The decree ordered the wife have two draft income tax returns prepared, one showing the pension plan funds as income and the other not including the funds, to allow the husband to calculate that reimbursement. She was to provide the husband with the draft returns by June 1 of the year after the year the funds were liquidated.

The wife hired a tax preparation company. The first draft return was a joint return with her new husband and included his wages, her wages, her social security disability income, and the liquidated pension plan funds. The second draft return indicated it was a joint return, but only included her wages. She sent the drafts to the husband before the deadline. He informed her he needed a draft return that included only her wages and the liquidated pension plan funds. The wife went back to the tax preparer multiple times, but said they kept getting it wrong.

Military Disability Cannot Be Divided by Texas Divorce Court

Published on: May 31, 2021 | by Kelly McClure

iStock-543681178 Under federal law, a court may not treat military disability benefits as community property for purposes of property distribution in a Texas divorce case. A husband recently challenged the property distribution in his divorce decree, arguing the court had improperly divided a portion of his military disability benefits.

Trial Court Divides Husband’s Military Retirement Benefits

The wife petitioned for divorce and sought a majority of the community assets. The court granted the divorce on grounds of insupportability and adultery. The decree gave the wife 55% of the husband’s disposable military retired pay, attorney’s fees, and conditional appellate attorney’s fees. The husband appealed.

The husband contended the 55% of his disposable military retired pay awarded to the wife erroneously included disability payments. The wife, however, argued the award did not include disability benefits and the decree had specifically awarded him his “VA Disability and Social Security Disability benefits” as separate property.

Trial or Contested Hearing Required to Determine Disputed Texas Property Division

Published on: May 24, 2021 | by Francesca Blackard

iStock-483613578 In a Texas divorce, a jury may decide issues regarding the characterization and valuation of property, but the judge is responsible for actually dividing the community property in a just and right manner. The court may consider a number of factors, including fault, education, ages and physical conditions, financial conditions, and the amount of separate property. Generally, the court must hold an evidentiary hearing or trial, unless the parties agree on the property division.

Wife Argues Trial Court Did Not Hear Property Issues

In a recent case, a wife appealed a property division, arguing the court failed to hold a hearing on the property division.

The parties married in 2003 and the husband filed for divorce in 2017. The jury did not hear the property division issues, which were reserved for the trial court. The court stated that it would try those issues during the jury deliberations if there was time or would otherwise schedule a date after the verdict on the issues related to the children.

Texas Appeals Court Finds Property Was Separate Despite Use of Community Funds

Published on: April 25, 2021 | by Kelly McClure

images In a Texas divorce case, property acquired during the marriage is presumed to be community property. A spouse claiming property is their separate property must show that it is separate by clear and convincing evidence. Separate property is generally property that is owned before the marriage, property that the spouse acquired as a gift or inheritance, or property recovered as damages in a personal injury case. Community property is generally property acquired after the marriage that is not characterized as separate property.

In a recent case, a wife challenged the court’s characterization of certain property as the husband’s separate property. The wife filed for divorce. The parties agreed they had married in India in 1976, but disagreed on the date they stopped living together as husband and wife.

Husband and Wife Enter into Settlement – But Leave One Issue for Trial

The case went to trial, but, before trial, the parties entered into a Mediated Settlement Agreement (“MSA”). In the MSA, the parties agreed their community property located in India would be divided by Indian courts. The parties agreed to the characterization and division of everything except two pieces of land in India, referred to as the “Fifteen-Cent” property and the “One-and-a-half-Acres” property. The MSA stated they would “defer to characterization and confirmation of separate property” of those two parcels to the trial court.

Equitable Property Distribution in Texas Divorce

Published on: April 11, 2021 | by McClure Law Group

does-adultery-affect-alimony-in-idaho-1080x600-1 In a Texas divorce, the court must divide the property in a just and right manner. The requirement is that the division be equitable, but not necessarily equal. The Texas Supreme Court identified several factors courts should consider in Murff v. Murff. These factors include the parties’ physical conditions, education, financial condition, abilities, and ages. A husband recently challenged a trial court’s division of the marital property following a mediated settlement agreement between the parties.

The parties married in 1999 and the wife initiated divorce proceedings in 2017. Pursuant to a temporary order, the marital home was sold and about $500,000 in sales proceeds were put into an escrow account. The court signed an agreed order allowing disbursement of an equal portion of the proceeds to pay each party’s divorce attorneys. The rest of the proceeds was left in the escrow account.

Default Judgment in a Texas Divorce Case

Published on: March 22, 2021 | by McClure Law Group

When a spouse petitions for a Texas divorce, the other spouse must file an answer. If the other spouse fails to do so, the court may render a default judgment. Under certain circumstances, however, the other spouse may get the default judgment overturned. In a recent case, a husband sought to overturn a default judgment entered against him.

According to the Texas Supreme Court’s opinion, the wife filed for divorce. The trial court granted her motion for alternative service at the home of her husband’s mother. The trial court ultimately entered a no-answer default judgment the following January.

Property Division in Texas Default Divorce Judgment

Published on: March 7, 2021 | by Francesca Blackard

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In some Texas divorce cases, a party fails to file an answer to the divorce petition or otherwise participate in the divorce proceedings in any way. When a court divides property in a Texas divorce, it must do so in a “just and right” manner. TEX. FAM. CODE ANN. § 7.001. However, to do so, the court must have sufficient evidence of the value of the community estate, even if one of the parties does not participate in the proceedings. Even if their spouse fails to file an answer, the petitioner in a divorce case must present evidence supporting the material allegations in the petition. If a trial court divides the property without sufficient evidence of the value of the assets to make a just and right division, the division may be subject to reversal on appeal, even if the appealing spouse failed to respond and the court issued a default judgment.

In a recent case, a husband challenged a default judgment granting his wife a divorce and dividing their property, arguing there was insufficient evidence to support the property division.