Opinion
No. 05-07-00027-CV
Opinion Issued August 19, 2008. DO NOT PUBLISH.
On Appeal from the 401st Judicial District Court Collin County, Texas, Trial Court Cause No. 401-51364-00.
Before Justices MORRIS, WHITTINGTON, and O'NEILL.
Opinion By Justice WHITTINGTON.
MEMORANDUM OPINION
Deborah Santopadre appeals the trial court's final divorce decree. In three issues, Wife attacks the property division and distribution of assets and claims the final decree is too vague to be understood or enforceable with respect to the division of property. We affirm the parties' divorce but reverse the trial court's judgment with respect to the division of property and remand this case for further proceedings consistent with our opinion.
Husband and Wife were married in September 1996. At the time of the marriage, Husband worked at Texas Instruments. Two years later, Husband took early retirement from TI. He then took a job with Atmel Corporation in January 1999. In 2000, Wife filed for divorce. Husband filed his answer and a counter-petition for divorce. Following an April 2003 bench trial, the trial judge entered a final divorce decree on May 3, 2004. Thereafter, Wife filed a motion for new trial which was granted in part. In October 2006, the trial judge granted Husband's motion for summary judgment and ordered that the divorce decree signed May 3, 2004 "remains unchanged as the divorce decree of this Court, is now the final judgment of this Court, and is now appealable." After her motion for new trial was overruled, this appeal ensued.
Standard of Review
A trial judge is charged with dividing the community estate in a "just and right" manner, considering the rights of both parties. Tex. Fam. Code Ann. § 7.001 (Vernon 1998); Moroch v. Collins, 174 S.W.3d 849, 855 (Tex.App.-Dallas 2005, pet. denied). Trial judges are afforded wide discretion in dividing marital property upon divorce and, absent an abuse of discretion, we will not disturb the property division. Moroch, 174 S.W.3d at 855 (trial court does not abuse discretion if there is some evidence of substantive and probative character to support decision); Boyd v. Boyd, 131 S.W.3d 605, 610 (Tex. App-Fort Worth 2004, no pet.) (trial court's property division may not be disturbed on appeal unless complaining party demonstrates from evidence in record that division was so unjust and unfair to constitute abuse of discretion). We indulge every reasonable presumption in favor of the trial judge's proper exercise of discretion in dividing the community estate. Vannerson v. Vannerson, 857 S.W.2d 659, 669 (Tex. App-Houston [1st Dist.] 1993, writ denied) (citing Murff v. Murff, 615 S.W.2d 696, 698 (Tex. 1981)). We reverse only if the record demonstrates the trial judge clearly abused his discretion, and the error materially affected the just and right division of the community estate. Jacobs v. Jacobs, 687 S.W.2d 731, 732-33 (Tex. 1985).
In a nonjury trial, we review the trial judge's fact findings under the same standards applied when reviewing the legal and factual sufficiency of the evidence to support a jury's finding. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991); Zagorski v. Zagorski, 116 S.W.3d 309, 314 (Tex.App.-Houston [14th Dist.] 2003, pet. denied) (op. on reh'g) (citing Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996)). In family law cases, however, the traditional sufficiency standard of review overlaps with the abuse of discretion standard of review; therefore, legal and factual insufficiency are not independent grounds of error but are relevant factors in our assessment of whether the trial judge abused his discretion. Moroch, 174 S.W.3d at 857; Boyd, 131 S.W.3d at 611. To determine whether there has been an abuse of discretion because the evidence is legally or factually insufficient to support the trial judge's decision, we use a two-pronged inquiry: (i) did the trial judge have sufficient evidence upon which to exercise his discretion, and (ii) did the trial judge err in his application of that discretion? Moroch, 174 S.W.3d at 857; Boyd, 131 S.W.3d at 611; Evans v. Evans, 14 S.W.3d 343, 346 (Tex.App.-Houston [14th Dist.] 2000, no pet.). The applicable sufficiency review comes into play with regard to the first question. Moroch, 174 S.W.3d at 857; Boyd, 131 S.W.3d at 611. We then determine whether, based on the elicited evidence, the trial judge made a reasonable decision. Moroch, 174 S.W.3d at 857; Boyd, 131 S.W.3d at 611.
When the burden of proof at trial is by clear and convincing evidence, we apply a higher standard of legal and factual sufficiency review. Moroch, 174 S.W.3d at 857 (citing In re J.F.C., 96 S.W.3d 256, 265-66 (Tex. 2002) and In re C.H., 89 S.W.3d 17, 26 (Tex. 2002)); Boyd, 131 S.W.3d at 611. Clear and convincing evidence is that "measure or degree of proof which will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established." Tex. Fam. Code Ann. § 101.007 (Vernon 2002); In re J.F.C., 96 S.W.3d at 264; Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 31 (Tex. 1994). This standard falls between the preponderance standard of civil proceedings and the reasonable doubt standard of criminal proceedings. In re G.M., 596 S.W.2d 846, 847 (Tex. 1980); Moroch, 174 S.W.3d at 857; Boyd, 131 S.W.3d at 611. The proof must weigh heavier than merely the greater weight of the credible evidence; however, there is no requirement that the evidence be unequivocal or undisputed. State v. Addington, 588 S.W.2d 569, 570 (Tex. 1979); Moroch, 174 S.W.3d at 857; Boyd, 131 S.W.3d at 611. In reviewing the evidence for legal sufficiency, we look at all the evidence in the light most favorable to the judgment to determine if the trier of fact could reasonably have formed a firm belief or conviction that his finding was true. Moroch, 174 S.W.3d at 857(citing In re J.F.C., 96 S.W.3d at 265-66). We assume the fact finder resolved disputed facts in favor of his finding if a reasonable fact finder could do so. Moroch, 174 S.W.3d at 857 (citing In re J.F.C., 96 S.W.3d at 266). In reviewing the evidence for factual sufficiency, we must give due consideration to evidence that the fact finder could reasonably have found to be clear and convincing and then determine whether, based on the entire record, a fact finder could reasonably form a firm conviction or belief that the allegations in the petition were proven. Moroch, 174 S.W.3d at 857 (citing In re C.H., 89 S.W.3d at 25 and Boyd, 131 S.W.3d at 611).
Characterization of Property
Under Texas law, property possessed by either spouse during or on the dissolution of marriage is presumed to be community property, absent clear and convincing evidence to the contrary. Tex. Fam. Code Ann. § 3.003(a) (Vernon 2006). The characterization of property as either community or separate is determined by the inception of title to the property, i.e., when a party first has a right of claim to the property by virtue of which title is finally vested. Moroch, 174 S.W.3d at 857; Boyd, 131 S.W.3d at 611. To overcome the community presumption, the spouse claiming certain property as separate has the burden to trace and clearly identify the property claimed to be separate. McKinley v. McKinley, 496 S.W.2d 540, 543 (Tex. 1973); see also Estate of Hanau v. Hanau, 730 S.W.2d 663, 667 (Tex. 1987) (citing Tarver v. Tarver, 394 S.W.2d 780, 783 (Tex. 1965)). Tracing involves establishing the separate origin of the property through evidence showing the time and means by which the spouse originally obtained possession of the property. Moroch, 174 S.W.3d at 857; Boyd, 131 S.W.3d at 611; Ganesan v. Vallabhaneni, 96 S.W.3d 345, 354 (Tex.App.-Austin 2002, pet. denied). A party claiming separate property must support the claim with documentary evidence; mere testimony that property is separate is generally insufficient to overcome the community presumption. Boyd, 131 S.W.3d at 612 (citing Zagorski, 116 S.W.3d at 316; Bahr v. Kohr, 980 S.W.2d 723, 728 (Tex.App.-San Antonio 1998, no pet.); McElwee v. McElwee, 911 S.W.2d 182, 188 (Tex.App.-Houston [1st Dist.] 1995, writ denied)). "Any doubt as to the character of property should be resolved in favor of the community estate." Moroch, 174 S.W.3d at 856; see Boyd, 131 S.W.3d at 612; Ellebracht v. Ellebracht, 735 S.W.2d 658, 659 (Tex.App.-Austin 1987, no writ); Contreras v. Contreras, 590 S.W.2d 218, 221 (Tex.Civ.App.-Tyler 1979, no writ).
Retirement or pension plans are apportioned in one of two manners. If a plan is a defined benefit plan (one that promises the employee a monthly benefit beginning at retirement), apportionment is based on a formula developed by the Texas Supreme Court to aid courts in making this calculation. Smith v. Smith, 22 S.W.3d 140, 148 (Tex.App.-Houston [14th Dist.] 2000, no pet.) (citing Berry v. Berry, 647 S.W.2d 945, 947 (Tex. 1983) (approving method of apportionment to determine community interest in retirement benefits applying fraction to retirement-benefit's value as of date of divorce in which numerator represents number of months parties were married while retirement plan was in effect, and denominator represents total number of months employee spouse was employed under plan)); see Tex. Fam. Code Ann. § 3.007 (Vernon 2006). In contrast, the value of a defined contribution plan (one in which the employee has a separate account similar to a savings account into which the employee and employer make contributions) is readily ascertained at any time by simply looking at the account. Thus, in order to determine the community interest in a defined contribution plan, courts subtract the value of the plan at the time of marriage from the value of the plan at the time of divorce. Smith, 22 S.W.3d at 148-49.
In her first issue, Wife claims the trial judge abused his discretion in awarding ten assets to Husband as his separate property because the evidence is legally and factually insufficient to support such findings. Specifically, Wife contends there is no evidence or insufficient evidence to prove the following assets are the separate property of Husband:
* Texas Instrument employee pension plan
* Texas Instruments retirement benefits
* Texas Instrument stock
* certain real property in Ruidoso, New Mexico
* certain real property in Nashua, New Hampshire
* Charles Schwab account PJ7785-9979
* USAA IRA# 001277495
* USAA Account # 65118968
* E-Trade Account #4575-0831
* E-Trade Account #4842-3269
After reviewing the record in this case, we agree with Wife's contentions.
Because Husband claimed these assets to be his separate property, he bore the burden at trial of establishing by clear and convincing evidence the separate origin of each asset. To do so, he was required to show the time and means by which he originally obtained possession of each asset. Although Husband testified at trial these assets were his separate property, he presented no documentary evidence to establish that any asset was his separate property. Specifically, he did not produce deeds, closing statements, property tax statements, financial records, or other evidence to establish when any of these assets was acquired or set up on his behalf. Rather, he relied on his testimony at trial that he owned each property or asset before his September 1996 marriage to Wife. This is "insufficient to constitute clear and convincing evidence rebutting the community presumption and establishing characterization of property as separate." Boyd, 131 S.W.3d at 616 (husband failed to present specific tracing testimony or corroborating testimony or evidence of nature of real and personal property); see Ganesan, 96 S.W.3d at 354 (husband's testimony failed to establish certain accounts were separate property because husband's testimony and exhibits offered failed to "provide account numbers, statements of accounts, dates of transfers, amounts transferred in or out, sources of funds or any semblance of asset tracing"); Osorno v. Osorno, 76 S.W.3d 509, 512 (Tex.App.-Houston [14th Dist.] 2002, no pet.) (husband's testimony insufficient to overcome community presumption in absence of deposit slips or bank records tracing source of funds); Bahr, 980 S.W.2d at 728-29 (wife's testimony failed to establish property was her separate property because documentary evidence offered to support claim property was purchased with monies from separate property account did not show date account was opened, running balance of account, or identify party receiving wire transfer for alleged purchase of property at issue); Robles v. Robles, 965 S.W.2d 605, 616 (Tex.App.-Houston [1st Dist.] 1998, pet. denied) (husband's testimony insufficient to overcome community presumption when husband only testified as to separate nature of the property in dispute but provided no supporting documentary evidence to trace funds used to purchase property); In the Matter of the Marriage of Moore, 890 SW. 2d 821, 837 (Tex.App.-Amarillo 1994, no pet.) (although husband testified he had owned certain pieces of farm equipment before marriage, he failed to trace such equipment from that time to time of divorce proceeding). Because our review of the record shows Husband did not discharge his burden to rebut the community presumption by clear and convincing evidence, we conclude the evidence is legally and factually insufficient to support the trial judge's decision. In other words, the trial judge did not have sufficient evidence upon which to exercise his discretion.
Husband introduced three exhibits at trial. The first is a one-page summary regarding the purchase and financing of the property in Ruidoso. There is no documentation or other evidence supporting the one-page summary to establish when the property was purchased or what funds were used to pay the mortgage on the property. The second exhibit is an email between Husband and Wife regarding the sale of stock valued at $5000. The third exhibit is Wife's Inventory and Appraisement.
This alone, however, does not require reversal. See Boyd, 131 S.W.3d at 617 (mere mischaracterization of community property as separate does not require reversal). If the mischaracterization has a de minimus effect on the division of the community estate, then the trial judge did not abuse his discretion. See Boyd, 131 S.W.3d at 617 (citing Robles, 965 S.W.2d at 621). But if property is mischaracterized and the mischaracterization is of such magnitude that it affects the just and right division of the community estate, we must remand the entire case to the trial court for a just and right division based upon the correct characterization of the property. See Boyd, 131 S.W.3d at 617. In this case, we are unable to place an exact total value on the assets challenged by the Wife; nevertheless, the record shows the total value of these assets exceeds $1,200,000. Under these facts and circumstances, we conclude the characterization error caused the trial judge to abuse his discretion. We sustain Wife's first issue. Having sustained Wife's first issue, we need not consider her remaining issues. Tex. R. App. P. 47.1.
We affirm the parties' divorce but reverse the trial court's judgment with respect to the division of property and remand this case for further proceedings consistent with our opinion.