Property

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[.]”

Fraud on the Community in Texas Divorce

Published on: February 10, 2024 | by Francesca Blackard

Spouses have a fiduciary duty toward each other with regard to the community estate and commit fraud on the community if they breach a legal or equitable duty in violation of the fiduciary relationship. Fraud on the community often occurs when assets are transferred to a third party, but can also occur when it is unaccounted for.

If a court determines a spouse committed fraud, it must determine the amount the community estate was depleted and the total value it would have had absent the fraud. The trial court then divides the reconstituted estate in a just and right manner, which may include awarding the other spouse a disproportionate share of the community estate, a money judgment, or both. Tex. Fam. Code § 7.009. A husband recently appealed the trial court’s finding of fraud, judgments, and property division in his Texas divorce.

The Marriage

According to the appeals court’s opinion, the husband owned a home when the parties married in 2002.

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.

Texas Appeals Court Concludes “Build Provision” in Divorce Decree Not Ambiguous

Published on: January 7, 2024 | by Francesca Blackard

A Texas divorce decree provision that was agreed upon by the parties is construed according to contract principles. In interpreting the contract, the court considers the entire agreement. Words are given their plain meaning unless there is an indication the parties intended something else. A contract is not ambiguous if it can be interpreted with a definite legal meaning. It is ambiguous if it is subject to more than one reasonable interpretation. Generally, a court may only consider outside evidence to interpret an ambiguous contract. A husband recently challenged a trial court’s denial of his petition for enforcement of the property division in his divorce decree.

The parties’ 2017 divorce decree included agreed property-division provisions that awarded the wife a 2.6 acre lot “as her sole and separate property.” The decree divested the husband of all right, title, interest and claim to the lot. It also included a conditional provision that the wife “begin the process of building” a home on the lot, with the property reverting back to the husband if she failed to comply. The decree did not include a time by which the wife had to comply nor did it define what was meant by “begin” or “the process of building.” The wife was prohibited from selling the lot for commercial purposes and was required to give the husband a first right of purchase option.

The wife did not complete building a house on the lot and the husband filed a petition for enforcement. He alleged that the wife had not begun “the process of building a permanent, fixed home structure” on the lot. He asked the court to order her to execute a general warranty deed.

The trial court denied the petition after a hearing and the husband appealed. The husband argued on appeal that the decree was ambiguous and that the trial court erred in not clarifying it and enforcing the clarified decree.

Clarification and Enforcement of Texas Property Division

Published on: December 6, 2023 | by Kelly McClure

A court must order a just and right division of the marital estate in a Texas divorce. Once the divorce is final and the property has been divided, the property division generally may not be re-litigated. The trial court does, however, retain the power to clarify and enforce the division. Tex. Fam. Code § 9.002; Tex. Fam. Code § 9.008. The court may not alter or change the substantive property division, but may render additional orders to enforce, clarify, assist in implementing, or specify the manner of effecting the property division. Tex. Fam. Code § 9.006. A former husband recently challenged a trial court’s partial denial of his request for clarification and enforcement.

According to the opinion of the appeals court, the final divorce decree awarded the husband certain personal property, specifically including the outdoor furniture purchased from a particular person and any property the wife had removed from the homestead, including certain dining room furniture and two bronze statues.

Clarification and Enforcement Hearing

The husband petitioned for clarification and enforcement of the property division, alleging the wife had not turned over certain property awarded to him, including two bronze statues, certain patio furniture he had purchased from a specified individual, and certain dining room furniture. He asked the court to order her to turn them over by a specified date, and to award him their replacement value if she did not.

Texas Appeals Court Affirms Disproportionate Property Division

Published on: November 29, 2023 | by Francesca Blackard

The court in a Texas divorce must make a just and right division of the marital estate. The estate does not have to be equally divided if there is a reasonable basis in the record for an unequal division. A former husband recently challenged, for the second time, the property division in his divorce.

The First Appeal

In his first appeal, the husband argued the trial court erred in its property division by including the value of a condominium that he claimed belonged to his father. The appeals court concluded the condominium belonged to the husband, wife, and the husband’s father and that the trial court had erred in including its total value in the community estate. The appeals court determined including only the two spouses’ interest in the valuation of the community estate would materially affect the property division, it remanded to the trial court for a just and right division.

The trial court signed an order on remand that stated its original community property division was just and right. Furthermore, the trial court awarded the wife appellate attorney’s fees.

Texas Court May Clarify Ambiguous Property Division

Published on: October 6, 2023 | by Kelly McClure

Once its plenary power has expired, a trial court cannot change the substantive property division stated in a final Texas divorce decree. It does, however, retain the power to clarify or enforce that property division. A Qualified Domestic Relations Order (“QDRO”) is a post-divorce enforcement order and therefore cannot change the property division. A QDRO can, however, specify how the property division can be carried out, without altering the substantive property division. If the QDRO substantively alters the property division, then it is void and may be amended to comport with the division in the decree. A wife recently challenged a clarification order addressing the division of the husband’s 401(k).

According to the appeals court’s opinion, the parties executed a mediated settlement agreement (“MSA”) that incorporated a spreadsheet dividing the marital estate. That spreadsheet indicated the parties would each receive half of $92,916.50 from the 401(k).

The final decree incorporated the MSA by reference and ordered the parties “to do all things necessary to effectuate” it. The decree awarded the husband the entire balance of the 401(k) “as reflected on [the spreadsheet]” except for the part awarded to the wife by the decree.

Texas Appeals Court Concludes Stock Issued by Husband’s Employer Was Community Property

Published on: September 19, 2023 | by Kelly McClure

There is a presumption that property possessed by a spouse during or on Texas marital dissolution is community property. A party claiming separate property must prove its separate character by clear and convincing evidence. Tex. Fam. Code § 3.003. In a recent case a wife appealed the trial court’s characterization of stock shares granted to the husband by his employer.

Stock Shares

According to the appeals court’s opinion, the parties got married in December 2006. The husband started a new job in February 2015 and the next year received a million shares of the company’s stock. The husband stated he had entered into an agreement with the company when he received the stock, but could not find it and could not get a copy from the company. The stock certificates did not indicate why they were issued.

The husband’s employment contract provided that he would receive an annual salary of $100,000. Additionally, he would receive a signing fee, an additional payment upon the next fundraising event, and an annual payment for four years, as compensation for “assets, access to ‘[husband’s] IP,’ and inventory” the husband provided pursuant to the employment agreement. The company also agreed to take on certain debts and liabilities the husband owed. The contract indicated the husband would receive “a total compensation of over $750,000” for the use of the husband’s assets and intellectual property, without referencing the stock shares.

Characterization of Personal Injury Recovery in Texas Divorce

Published on: September 4, 2023 | by Francesca Blackard

The characterization of funds received for personal injuries can be a complex issue in a Texas divorce. Texas family law presumes that property possessed by a spouse during or on dissolution of the marriage is community property. When a spouse claims certain property is separate, that spouse must prove by clear and convincing evidence that the property is separate. Tex. Fam. Code § 3.003. Pursuant to Tex. Fam. Code 3.001, recovery for personal injuries sustained during the marriage is separate property. There is an exception, however, for recovery for lost earning capacity during the marriage. Because a spouse claiming separate property has the burden of proof, that spouse must show by clear and convincing evidence what part of a personal injury settlement is separate property. Recently, a husband appealed the trial court’s ruling which characterized his personal injury recovery as community property.

Personal Injury Settlement

According to the appeals court, the husband and wife married in 1994 and lived separately at various times during the marriage. In December 2014, husband was injured as the result of an automobile accident in the scope of his employment. The parties were separated when the accident occurred, but subsequently reconciled.

The husband settled for the other driver’s policy limits of $30,000. He also received net proceeds of $710,724.25 from a settlement with his employer’s under-insured motorist coverage. Thereafter, his attorneys transferred those funds into the parties’ joint checking account on October 8, 2019. The parties then separated that month and the wife filed a divorce petition on November 1.

Texas Appeals Court Upholds Business Property Valuation in Divorce Case

Published on: August 28, 2023 | by Francesca Blackard

Businesses can be difficult to accurately value in a Texas divorce. A wife recently challenged a property division involving two businesses, arguing the court had insufficient evidence to make the just and right division.

When the husband filed for divorce, each party pleaded the marriage was insupportable. The wife also pleaded the husband had committed adultery.

According to the appeals court’s opinion, the significant assets were a business operated by the wife, an interest in a pool-installation business operated by the husband, the houses each party lived in, two rental properties, a house in Mexico, an interest in two lots where the pool installation business was located, several vehicles, and several bank accounts and a CD.