The agreement in this case included very large alimony payments to the wife and an agreement for the husband to pay the children’s college expenses. The trial court awarded a judgment of $1,128,000 against the ex-husband and awarded $102,475 in attorney’s fees. The few adjustments made to the judgment by the court of appeals did not reduce the ex-husband’s judgment and he almost certainly considers it a total loss. One lesson: an agreement incident to divorce that is incorporated into the divorce decree is enforceable as part of the decree. Castro v. Castro, No. 14-11-01087-CV (Tex. App. - Houston [14th Dist.] 5/9/2013). ... Read More >
Divorce court cannot award reimbursement to a spouse’s separate estate if the spouse did not trace her separate property.
Here, the wife’s separate estate was awarded a $41,000 reimbursement claim against the community estate which the trial court used to reach a 60/40 property split. The court of appeals held that the wife failed to prove $32,000 of that amount was her separate property and this required a reversal of the entire property division since the $32,000 represented about 20% of the entire net community estate. Roberts v. Roberts, No. 04-11-00554-CV (Tex. App. - San Antonio 5/1/2013). ... Read More >
It is error for a court to issue a wage withholding order for contractual alimony unless the parties agreed to wage withholding per Tex. Fam. Code Sec. 8.101(b)(1).
Sec. 8.101(b)(2) that allows wage withholding “if the alimony payments are not timely made under the terms of the contract” does not mean what it seems to clearly say, in part because the Texas Constitution only allows wage withholding for child support and court ordered spousal maintenance, not agreed contractual alimony. Note: Sec. 8.101(a-1) has been added by the last legislature effective 9/1/2013 that specifically allows wage withholding for contractual alimony. This decision might mean that new law is unconstitutional. Pappolla v. Simovich, No. 14-12-00418-CV (Tex. App. - Houston [14th Dist.] 5/21/2013). ... Read More >
Mystery payment to husband from his business can be considered an asset in calculating community property division.
This lengthy case addresses many diverse issues, including divorce jurisdiction over Mexican citizens who own a home in San Antonio and whose son attends school there and includes numerous examples of how not to object or preserve error regarding jury questions or evidence. However, this case also provides another example of a trial court pretending a spouse has a phantom asset when a large cash payment cannot be explained. The husband owned a business along with a friend. The friend invested $195,737.23 and the husband soon thereafter withdrew $195,000 and even the company’s accountant could not explain the transaction. The trial court valued the husband’s interest in the business as if the unexplained withdrawal had not happened and included the $195,000 as a separate asset for the husband. The court of appeals held that the trial court did not abuse its discretion in doing so. Nieto v. Nieto, No. 04-11-00807-Cv (Tex. App. - San Antonio 5/1/2013). ... Read More >
Interesting example of how a court can divide assets that were not awarded in the original divorce.
The parties were divorced in 2002 and the court’s property division then was 63% to the wife. Eight years later, the wife filed a petition seeking post-divorce division of two pieces of land and some mineral rights that had not been awarded in the divorce decree. This time, the trial court made an overall 50-50 division of the property including what was originally awarded and the undivided assets. The wife on appeal complained that she should have been awarded 63% of the newly discovered assets. The court of appeals held that the trial court was not bound by the property division ratio it used in the original divorce and the trial court did not err in using the 2002 values for the land instead of the 2011 values. Harton v. Wade, No. 12-12-00158-CV (Tex. App. - Tyler 5/22/2013). ... Read More >
Important New Case on Waste in Divorce Cases is a Game Changer
A recent decision from the First Court of Appeals out of Judge Hellums' court (won by Michael Childs) provides a new twist to claims of waste or constructive fraud. In Puntarelli v. Peterson, No. 01-11-01120-CV (Tex. App. - Houston [1st Dist.] Feb. 14, 2013), the wife asked the age old question "where did all of the money he earned go?" The wife was awarded a $196,000 judgment for wasting community funds because the husband could not account for how he spent his significant income during the five years this informal marriage/divorce case was pending. The important message from this case that should prompt almost all non-monied spouses to allege constructive fraud is this - the wife did not have to prove any specific improper transfers of community funds. The wife merely had to show that the husband's expenses were much less than his income and then the burden shifted to the husband to show where the money went. Proving how one spent money years ago is often not easy, but failure to ... Read More >
Student Loans Incurred Before Marriage Are Separate Debt
A trial court cannot order one spouse to pay the student loans of the other spouse which were incurred before the marriage. The Houston First Court of Appeals has ruled: The obligation to pay the loans arose before marriage and should be treated as Sophia's separate debt-separate debt that could not be assigned to the non-incurring spouse. Accordingly, we conclude the trial court erred in assigning Sophia's premarital student loan debt to Albert because that student loan debt constituted Sophia's separate debt. Love v. Love, 217 S.W.3d 33, 35 (Tex. App. - Houston [1st Dist.] 2006, no pet.). ... Read More >
Gifts to Family Members Are Not Always Constructive Fraud or Waste
Marshall v. Marshall, 735 S.W.2d 587 (Tex. App. - Dallas 1987, writ ref'd n.r.e.), involved a two and a half year marriage and a husband who, during the marriage, earned $542,315.72 and gave $63,375.58 (11.7%) to his daughter and grandson. The trial court's ruling that these gifts were not constructive fraud and was upheld by the court of appeals, which said: The courts consider three primary factors in determining whether the wife's claim of constructive fraud exists: the size of the gift in relation to the total size of the community estate, the adequacy of the estate remaining to support the wife in spite of the gift, and the relationship of the donor to the donee. We conclude that the evidence supports the trial court's finding of no constructive fraud. The community received $542,315.72 during the marriage as Woody's special community property. The contested gifts of $63,375.58 are only 11.7 percent of this amount. The remaining $478,940.14 in community funds from the ... Read More >
The Ultimate Property Division Spreadsheet
Click here to download my Inventory comparison chart. Two years ago I put on a half day seminar for about 300 lawyers called the "Ultimate Property Division Seminar." I talked to a lot of judges about what they wanted and did not want to hear in a property division trial. Here is the one thing they all wanted -- a unified spreadsheet which shows both parties' values and proposed divisions and which provides space for the judge's ruling. This ideal spreadsheet can only be prepared after you have both spouse's proposed values and divisions. The spreadsheet has to be printed on very wide ledger size paper (or two letter size pages taped together) and has columns for: -- Asset/Debt -- Husband's Proposed Value -- Wife's Proposed Value -- Court's Value (blank - for judge to fill in) -- Husband's Proposed Division -- Wife's Proposed Division -- Court's Division (blank) The spreadsheet also shows the differences between the parties on what is separate property. I color ... Read More >
The trial court did not abuse its discretion by conducting a two day divorce trial in April 2009, then abating the trial while IRS tax issues were resolved and then making a rendition of the divorce in November 2010 based on a cut off date of April 1, 2009 for characterizing and valuing property
The wife who complained about this unusual procedure did not complain to the trial court at the time until she filed a motion for new trial after rendition and judgment. The court of appeals ruled that by participating in this procedure without objection, the wife waived any complaint on appeal. This case reminds us that objecting to a trial court ruling for the first time in a motion for new trial may be too late. TRAP 33.1(a)’s requirement that a complaining party on appeal must show he or she “made proper, timely and sufficiently specific objection or request in the trial court and obtained a ruling” is often not satisfied by waiting until the motion for new trial to object. Richard v. Towery, 1st Court of Appeals, 01-11-00132-CV, April 18, 2013. ... Read More >