Divorce

Texas Appeals Court Affirmed Divorce Decree Characterizing Property Purchased with Inheritance as Separate

Published on: August 30, 2024 | by Francesca Blackard

Under Texas family law, community property is the property acquired by either spouse during the marriage that is not separate property. Separate property includes property a spouse owned or claimed before the marriage, property acquired by gift or inheritance during the marriage, and recovery for personal injuries, except recovery for lost earning capacity during the marriage. In a recent case, a former wife challenged a property division characterizing certain property as the husband’s separate property.

According to the appeals court, the parties got married in 2018. The husband inherited about $650,000 from his mother during the marriage. He bought a pickup truck and a home with those funds. The title and the deed each listed both parties as owners.

The husband petitioned for divorce in January 2023, asking the court to confirm his separate property and order reimbursement for the home and the pickup truck. The wife alleged both the truck and property were part of the community estate.

Texas Appeals Court Affirms Equal Property Division Despite Fraud Allegations

Published on: August 20, 2024 | by Francesca Blackard

A trial court in a Texas divorce must divide the community estate in a just and right manner. The court has broad discretion in determining what is just and right, and, when there is a reasonable basis for doing so, the court may order a disproportionate division. The court may consider a party’s claims for waste or fraudulent transfer of community property in its property division. Waste, or constructive fraud, occurs when one spouse wrongfully depletes the community estate without the knowledge or consent of the other spouse. Actual fraud occurs when a spouse transfers community property or uses community funds for the primary purpose of depriving the other spouse of their use and enjoyment. A reimbursement claim arises when the assets of one estate are used for the benefit of another estate without benefit to the first, such as community funds being used to pay for repairs to one spouse’s separate property. A former wife recently appealed the property division in her divorce, arguing the court abused its discretion by not awarding her a disproportionate share due to her fraud and reimbursement claims.

Divorce Proceedings

According to the appeals court, the parties each owned property when they married and acquired property together during the marriage. The husband granted a gift deed to a half interest in his separate property, identified by the court as “Bayou Shore.” The wife’s separate property was sold to her brother to resolve a community debt during the marriage.

Both parties alleged fraud and made claims for reimbursement and waste.

Texas Appeals Court Affirms Order Requiring Ex-Husband to Sign Papers to Transfer Stock to Ex-Wife

Published on: August 14, 2024 | by Kelly McClure

After rendering a Texas divorce decree, the trial court retains continuing subject-matter jurisdiction to enforce its property division. Tex. Fam. Code § 9.002. The court may issue additional orders to enforce the property division. Tex. Fam. Code § 9.006. An order to enforce may help in implementing or clarify the previous order, but it may not make substantive changes to the property division. Tex. Fam. Code § 9.007. The court generally has broad discretion to enforce the property division.

In a recent case, a former husband appealed a court order requiring him to sign documents to effectuate the transfer of stocks that were awarded to the wife in the divorce.

The divorce decree awarded the wife all shares of a particular stock owned by the husband or in his name. It also ordered the husband to appear at a particular law office on or before September 15, 2022 to sign the documents to transfer the shares.

Texas Appeals Court Reverses Spousal Maintenance Order for Lack of Evidence of Diligence

Published on: August 6, 2024 | by Francesca Blackard

A court may order Texas spousal maintenance to a spouse who lacks sufficient property on dissolution and the ability to earn sufficient income to provide for their own minimum reasonable needs if the parties have been married for at least 10 years. Tex. Fam. Code § 8.051. A former husband recently challenged a spousal maintenance award, arguing the wife had not presented any evidence to overcome the presumption that maintenance is not warranted unless the spouse has been diligent in earning sufficient income to meet their minimum reasonable needs or in developing the skills they need to do so during separation and while the divorce proceedings are pending.

Divorce Proceedings

The parties got married in 2010 and had a child in 2016. They separated in November 2021 and the husband petitioned for divorce in early 2022.

By the time the trial occurred, the parties had been married for 13 years. The wife had been a stay-at-home mom since the birth of the child. She started doing marketing for her parents from home shortly before the trial because she said the judge told her she needed to start working.

Texas Court Declines to Recognize Pakistani Divorce Due to Lack of Notice

Published on: July 31, 2024 | by Kelly McClure

Texas divorces can be complicated when other potential jurisdictions are involved. A former husband recently challenged his Texas divorce, arguing the parties had already been divorced in Pakistan.

The parties got married in 2009 in Pakistan and subsequently moved to Texas. The husband petitioned for divorce in Dallas County in May 2021 and the wife filed a counter-petition. They both alleged the had been residents of Dallas County for the preceding 90 days and domiciliaries of Texas for the preceding six months.

In January 2022, the husband filed a “Notice of Filing of Foreign Judgment” and attached a “Divorce Registration Certificate” that had been issued in Pakistan on January 1, 2022. It showed addresses in Lahore, Pakistan for both parties for dates in September 2021, December 2021, and January 2022.

Failure to Pay Debt Ordered in Texas Divorce Is Not Enforceable by Contempt

Published on: July 28, 2024 | by Francesca Blackard

Courts are required to effect a just and right division of the community estate in a Texas divorce. This division is not limited to assets, but in many cases, the court must also apportion the parties’ debts. A former husband recently challenged a provision in his divorce decree making his failure to make loan payments enforceable by contempt.

The husband asked the court to divide the estate in a manner it deemed just and right. The wife indicated she believed they would enter into an agreement for the property division, and, if so, the court to approve the agreement and divide the estate accordingly. Alternatively, she requested a just and right division.

The parties were not able to reach an agreement. They had a trial before the associate court. The husband asked the trial court for a de novo trial. Following the new trial, the trial court notified the parties it agreed with the property division by the associate trial court. The husband objected to a provision making his failure to make required payments on a loan from the wife’s retirement account punishable by contempt. He argued the provision violated article I, section 18 of the Texas Constitution. The trial court ordered the language related to contempt be stricken, but ultimately signed the final divorce decree with that language included.

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. . ..”