Texas Appeals Court Upholds Divorce Decree with No Payment Mechanism or Schedule for Owelty Lien

BSgavelx1200-768x432-1-300x169In dividing property in a Texas divorce, the court must effect a just and right division.  If the marital residence is part of the community estate and one party will keep it, the court must address the other spouse’s share of the equity.  The court may do this by placing an owelty lien on the property.  An owelty lien creates an encumbrance on the property that follows it upon a sale.  The lien must be paid before the net proceeds of the sale are distributed to the spouse. In a recent case, a mother challenged a divorce decree that did not include a payment mechanism or schedule for her owelty lien, while the father challenged the specifics of the geographic restriction imposed on the primary residence of the child.

The father asked the trial court to appoint both parents joint managing conservators of their child. He asked neither parent be given the exclusive right to determine the child’s primary residence and that the court impose a geographic restriction.  He requested the trial court to divide the estate in a just and right manner. He asked that the mother receive a lien on the marital estate for half of the net equity of the home.

The mother asked for the right to designate the child’s primary residence.  She also asked the trial court to award her half the market value of the home.

The Trial

According to the trial court’s opinion, the father testified that he, his parents, and his brother all lived in Brazos County.  He ultimately asked the court to limit the geographic restriction to Brazos and its contiguous counties, which did not include Liberty County.  He also asked the court to equally divide the property.

The mother testified she inherited property from her brother, including a home and land in Liberty County.  She also testified she and the father informally agreed to share custody, living in Liberty County and in Brazos County respectively and exchanging the child somewhere in between.  She said her home, family, and support were in Liberty County.

The mother asked for the right to establish the primary residence in Liberty County.  She also asked the court to divide the property in a just and right manner.

The trial court emailed a ruling naming both parents joint managing conservators, with the mother having the exclusive right to designate the child’s primary residence in Brazos or Liberty County.  The trial court also awarded the mother a $45,000 lien on the marital home, secured by an owelty lien.

The mother raised concerns at the hearing on the final decree that it did not detail the timing or method of payment of the owelty lien.  She asked the court to modify the decree to add a payment mechanism, but the father argued the decree complied with the email ruling and was not required to further address payment.  The trial court entered the decree without modification.

Both Parties Appeal

Both parents appealed.  The father argued the trial court erred by including Liberty County in the residence restriction. The mother argued the court erred by not modifying or clarifying the decree with a payment mechanism for the owelty lien.

Geographic Restriction

The decree stated the provisions relating to the parties’ rights with relation to the child constituted the agreed parenting plan.  The parents had not, however, agreed upon a parenting plan. Both parties expressed a clear to live with the child in different counties.  The trial court had also mentioned that it saw why the case did not settle.

When there is not an agreement between the parties, the trial court has discretion in determining matters involving conservatorship and possession, including geographic restrictions.  There was evidence the child had support systems in both counties.  There was also evidence regarding the quality of the schools in Liberty County and the mother’s future employment opportunities in that area.

The appeals court concluded the trial court had sufficient evidence to exercise its discretion in setting the geographic restriction.  It included the county where each parent lived, allowing the child to have frequent and continuing contact with her parents and contact with her extended family.  The appeals court found no abuse of discretion in the geographic restriction set by the trial court.

Property Division and Owelty Lien

The mother argued the trial court erred by not clarifying or modifying the decree to include a payment method or a duty on the father that could be enforced through contempt.

Both parties requested equal division of the estate.  The net equity in the residence was shown to be $90,000. The trial court divided it equally, awarding the mother a $45,000 lien on the property, secured by an owelty lien.  The court also ordered the father to receive the marital residence and the debt associated with it.

At the hearing, the mother’s attorney raised concerns that the decree did not describe a rate or schedule of payment or any interest that may accrue. The father’s attorney argued the decree did not need to be clarified because the owelty lien would be paid when the house was sold.

The appeals court noted an owelty lien must be satisfied when the property is sold. The appeals court therefore could not conclude the court’s property division was not specific enough to be enforceable through contempt.  Additionally, it could not conclude the trial court abused its broad discretion in not including a timeframe for selling the house, a payment schedule, or an interest rate.

The appeals court therefore affirmed the trial court’s judgment.

Contact a Skilled Dallas Divorce Attorney

If either you or your spouse intend to keep the marital home or move with the children, an experienced Texas divorce attorney can help you. Set up a consultation with McClure Law Group by calling our offices at 214.692.8200.




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