Enforcement

Texas Appeals Court Rules on Separate Property Equity in Real Estate

Published on: January 6, 2025 | by Francesca Blackard

The property division in a high net worth Texas divorce may require one party to convey their interest in certain assets to the other spouse. In some cases, the parties may agree to liquidated damages in the event one party fails to cooperate and take the actions necessary to transfer their interests. In a recent case, a former spouse challenged a liquidated damages judgment against him.

The parties, S.K.F. and K.J.W., entered into a mediated settlement agreement, which included an agreement incident to divorce (“AID”). The agreed final divorce decree incorporated the AID and ordered the parties to do the things necessary to effectuate their agreement.

The AID confirmed as K.J.W.’s sole and separate property two condominiums in Puerto Vallarta. It awarded S.K.F. $550,000 for the condominiums, as his sole and separate property. The AID set out the payment schedule of: a check for $150,000 the date the MSA was signed, a check for $275,000 on the date the agreed final divorce decree was signed, and $125,000 paid to a law firm to be held in trust to ensure S.K.F. signed the deeds for the condos. It further provided if K.J.W. did not submit a formal written request to sign the deeds within 12 months after the divorce, he was to instruct the firm to pay S.K.F. half of the funds. If he did not make a formal request between the 12^th and 24^th month after the divorce, K.J.W. was to instruct the firm to pay S.K.F. the other half. If, however, S.K.F. signed the deeds as required to transfer his interest in the condos at any point during the 24 months after the divorce, K.J.W. was to instruct the firm to pay the entire balance of the funds to S.K.F. immediately. S.K.F. agreed that, upon receiving the written notice, he would have 90 days to arrange travel to Puerto Vallarta and sign the deeds on the date specified. K.J.W. agreed to pay for his reasonable travel expenses up to $1,300. S.K.F. further agreed that if he failed to sign the deeds within 24 months, K.J.W. would be awarded $600,000 in liquidated damages. The AID also included a general cooperation provision in which both parties agreed “to sign any and all additional documents necessary to effectuate the transfer of any asset, liability or interest in any entity or stock(s) to the other party.”

Texas Court Denies Petition to Enforce Provisions of 1993 Divorce Decree in High Net Worth Divorce

Published on: January 6, 2025 | by Kelly McClure

The conflict in a Texas divorce does not always end when the divorce is finalized, especially a high net worth divorce or one that involves complex assets. A Texas appeals court recently considered an appeal of a denial of a petition to enforce certain property division provisions from a divorce decree from 1993. The ex-husband was deceased when the petition for enforcement was filed, so his widow, as heir to the property, was the real party in interest in the proceedings.

Divorce Decree

The divorce decree incorporated and adopted a “Property Statement and Settlement,” an agreement between the ex-husband and ex-wife addressing the division of assets and liabilities. The decree awarded the ex-husband a particular property in Williamson Count as his sole and separate property. It provided that the ex-wife was divested of any right and title in the homestead. The ex-husband would be solely responsible for all liabilities and benefits associated with the dwelling. The decree further provided that if the husband failed to make the monthly mortgage payments, the house and/or property would be sold. “In the event of sale of said dwelling and/or acreage,” the wife would be entitled to ½ of the net profit. The ex-wife was not to be held liable for any mortgage payments, taxes, or other expenses related to the property.

The decree awarded the ex-wife 100% of the proceeds from the sale of a different property, as well as all benefits associated with it. The decree also awarded her a vehicle, jewelry, a savings account, and a checking account. All debt was awarded to the ex-husband.

Financial Consequences for Engaging in Prohibited Behaviors

Published on: November 6, 2024 | by Kelly McClure

Parties in a high profile divorce might want to enter an agreement that goes beyond dividing the property. Celebrities, business owners, or CEOs might seek an agreement that prohibits their former spouse from disclosing private information, disparaging them or their business, or engaging in other behaviors that might damage their reputation or their business. The agreement can include liquidated damages for violations. In a recent case, a former wife, her former husband, and his business all appealed a judgment confirming an arbitration award relating to an agreement incident to divorce.

The Agreement

At the time of the divorce, the parties entered into an agreement incident to divorce providing for arbitration if a party engaged in certain conduct prohibited by the agreement. The agreement provided for an award of the greater of $500,000 or actual damages. Additionally, the wife would forfeit interest in a trust as liquidated damages if she engaged in certain behaviors. The parties agreed to arbitrate any issue of whether a party committed a prohibited behavior, whether the wife violated specified provisions in the agreement, and whether the wife’s interest in the trust would be forfeited as a result of violating provisions of the agreement. Binding arbitration was to occur within 90 days of notice of a violation. Pursuant to the Agreement, the losing party would pay the arbitration costs and the other parties’ costs and fees. The husband’s company was a third party to the divorce and to the agreement. The decree incorporated the agreement.

Arbitration Demand

The husband and his company subsequently demanded arbitration, alleging the wife violated the agreement. The wife objected and argued the forfeiture and liquidated provisions were unenforceable and that the arbitration clause was therefore also unenforceable.

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.

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.

Enforcement of Unpaid Obligations in Texas Divorce Decree

Published on: March 27, 2024 | by Kelly McClure

If a parent does not comply with a Texas custody or child support order, the other parent may seek enforcement of the court order and, in some cases, request the parent be held in contempt. A father recently challenged an order granting the mother’s motion to enforce the divorce decree.

When the parties divorced, one of their two children was still a minor. Pursuant to the divorce decree, the parties were required to equally share health care costs, the cost of a vehicle, and college fund for the minor child. The decree also ordered the father to pay for the minor child’s phone plan until she finished high school, and then that expense would also be split. The decree incorporated an agreement incident to divorce that required the mother and father to share the other child’s healthcare costs.

Both parties moved to enforce the decree in 2019, each seeking contempt, or clarification if the court found the decree was not sufficiently specific. The trial court’s subsequent order required the parties to communicate and exchange expense sharing exclusively through MyFamilyWizard. The court’s order also clarified that the father was required to pay full cost of the minor child’s phone.

Texas Appeals Court Upholds Order Making Ex-Husband Liable for Salary Payments

Published on: March 11, 2024 | by Francesca Blackard

A court may render orders to enforce or clarify the property division in a Texas divorce decree, but generally may not render an order that makes substantive changes to the property division once it is final. A former husband recently challenged a clarification order, arguing it improperly modified the decree.

Divorce Decree

According to the appeals court, the parties were married for more than 15 years when they got divorced in 2018. The agreed divorce decree referenced a “privately held compan[y]” that employed them both. The decree awarded all ownership interest in the company to the husband as separate property. It also awarded him the intellectual property he created used in connection with that ownership and the cash in two bank accounts in the company’s name beginning November 1, 2018.

Those bank accounts had been included in a list in the decree for which the husband would have the “sole right to withdraw funds” or “subject to [his] sole control[.]”

Texas Appeals Court Concluded Father Did Not Have Sufficient Notice for Contempt Order

Published on: February 28, 2024 | by Kelly McClure

Parents sometimes have difficulty getting their child’s other parent to comply with a Texas custody or visitation order. If a parent fails to comply with requirements to exchange the child, the other parent may seek enforcement of the court’s order, sometimes through contempt. In a recent case, a father challenged a court’s contempt order.

According to the appeals court’s opinion, the trial court entered a standard possession order in 2012 that set forth where the exchanges were to occur. When the mother’s possession ended, the exchange occurred at her home. When the father’s possession ended, it occurred at either his home or the mother’s home, depending upon circumstances set forth in the order. The trial court signed a modification order on the mother’s motion in March 2017 that changed the exchange location to the police department parking lot. The modification order also allowed the parties to change the location in writing. In August 2017, the parties entered a Rule 11 agreement moving the exchange location to a different police department parking lot and the court signed and the court signed an order adopting their agreement.

The mother filed a motion for enforcement by contempt in 2023. She relied on the original 2012 order and the 2017 modification order. The father moved for a directed verdict because the mother did not plead “the date, the time, and the place of the alleged violations,” but the motion was denied.

Texas Court Made Improper Substantive Change to Property Division with Order Striking Dollar Amounts

Published on: February 9, 2024 | by Kelly McClure

A trial court in a Texas divorce retains subject matter jurisdiction to enforce a decree or to clarify ambiguity in the decree. Texas strongly favors finality of judgment, so the court may not make substantive changes to the property division in a divorce decree once it has become final. The court does not have the authority to “amend, modify, alter, or change” the final property division despite errors in characterizing the property or applying the law. The court may, however, issue orders to clarify an ambiguous decree or to enforce the decree. A court interprets a Texas divorce decree according to the plain language of the decree. The court must interpret the decree as a whole and give effect to all provisions. A former wife recently challenged a court order purporting to clarify the final divorce decree, arguing it substantively changed the property division.

Divorce Decree and Subsequent Order

The trial court filed with the clerk and sent the parties a letter rendering the property division following the bench trial. The letter awarded to the wife as separate property 50% of three specified accounts and 50% of any stocks, options, or retirement accounts that were not listed in the letter but had vested as of a specified date. The court directed the husband’s counsel to draft a decree comporting with the letter rendition.

The husband’s attorney added details that were not expressly included in the letter. He specified the date when the balances would be calculated for the property division and included a dollar amount for each account. The parties’ attorneys approved the draft divorce decree as to form. The trial court signed the decree as drafted by the husband’s attorney. The decree became final without either party appealing.

Redistribution of Assets Was Modification and Not Enforcement of Texas Divorce Decree

Published on: December 14, 2023 | by Kelly McClure

A trial court may vacate, modify, correct or reform its judgment or grant a new trial within 30 days after the judgment is signed. Tex. R. Civ. P. 329b. Additionally, if a party files a timely motion, the trial court has the power to take those same actions until 30 days after any timely motions are overruled by an order or operation of law. The court’s plenary power generally expires 30 days after the final judgment is filed if there is not a timely post-judgment motion.

Courts generally retain continuing subject-matter jurisdiction to clarify and enforce the property division set forth in a Texas divorce decree. The court has the authority to render additional orders to enforce, assist in the implementation of, or clarify the property division. It may specify the manner of the property division more precisely, but may not change the substantive property division. A court may order delivery of specific property through its enforcement power. If a party has not delivered property awarded pursuant to the divorce decree and delivery is not an adequate remedy, the court may award damages. Additionally, a court may render judgment against a party who fails to make monetary payments as awarded in a decree.

A former husband recently challenged a court order purportedly enforcing the property division in his divorce decree, arguing that it instead improperly modified the division.