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Texas Appeals Court Finds Property Division in Divorce Was Just

Property in a Texas divorce must be divided in a “just and right” manner.  The trial court has broad discretion in dividing the estate.  To successfully challenge a property division, a party must show that it was so unjust as to constitute an abuse of the trial court’s discretion.

A husband recently challenged the property division in his divorce. The husband appealed the trial court’s ruling, arguing it erred in awarding the wife what he claimed was “75% of the Community Estate.” He argued that the court had awarded her 75% of the community estate by awarding her the home the couple had lived in for most of their marriage and the surrounding property.  He also argued the court had improperly characterized real estate owned by his son as community property. Additionally, he argued the court had not considered that community work and assets had been used to enhance the wife’s separate property, that the wife damaged the business awarded to him, that she removed funds from community bank accounts, and committed adultery and domestic violence.

Fault

The appeals court first addressed the issue of fault.  The trial court had granted a no-fault divorce. The appeals court noted that the alleged domestic violence and adultery had happened several years before the separation, and the trial court could have reasonably found they were not relevant to the property division.

The Original Facility

The couple had run three assisted living facilities.  The husband had testified that the original business and the real property had been his separate property.  The wife argued, however, that she had managed that facility and the business was community property.  The trial court found the property where the original facility was located was the husband’s separate property.  The court also awarded him the original business.

The Second Facility

The second facility was operated in a house that was the wife’s separate property.  The husband testified he paid $40,000 from the original business’s account to renovate this house, but did not know how much the house was worth.  The business leased the house from the wife, with the payments paying for the renovations.  Residents were moved from the original facility, but the second facility was ultimately closed after about two years.

The wife claimed the renovations did not enhance the property value because they were done improperly.  She said the additional space was unusable and she had to close it off.

The husband testified that the couple had been in a fight in 2005 that resulted in him being arrested and going to jail.  He testified that the wife and her son moved the residents out of the second facility and left them and their personal property in the yard.  He alleged she did this with the knowledge that moving the residents was a violation of state-requirements.  The wife admitted to moving the residents, but denied leaving them and their things in the yard.  She claimed she moved them out because she needed somewhere to live after the fight.  There was, however, a rental agreement showing that she had leased the property in September 2005.  The husband claimed the wife did not deposit the funds from the lease into family accounts and that the property earned more as an assisted living facility.

The state revoked the second facility’s license due to the unauthorized move of the residents. The state alleged the residents of both the original facility and the second facility were in “imminent threat [and] danger.” The husband requested reimbursement of the nearly $150,000 the original business had spent to keep the licenses.  He was ultimately able to keep both licenses, but the state put a vendor hold on the businesses that resulted in the loss of several resident contracts.

The trial court found the property where the second facility had been located was the wife’s separate property.

The appeals court found the trial court could have reasonably believed the wife’s testimony that the addition and renovations actually decreased the property value.  Furthermore, the trial court could have reasonably believed that any financial damage the wife caused to the business operations in moving the residents was an innocent mistake.

The Third Facility

The third facility was operated in a home allegedly owned by the husband’s son.  The couple were guarantors of the mortgage on the property.  The business leased the property and the husband’s son agreed to pay the mortgage and taxes.  The wife, however, denied the husband’s son owned the home, and the Divorce Inventory Summary Sheet prepared by the husband identified the house as community property.  There was no deed in the record showing ownership of the property.  The trial court awarded this property and the business to the husband.

The appeals court found the trial court reasonably could have believed the property was a community asset and the husband had failed to rebut the presumption that it was community property.

Removal of Community Funds

The appeals court found the trial court could reasonably have believed the $30,000 the wife removed from the community account was offset by the wife having to pay her own attorney fees and costs.  Additionally, the appeals court noted that there was evidence that both parties had placed substantial amounts of community funds in noncommunity accounts throughout the marriage.  The appeals court found that this evidence gave the trial court reasonable grounds to deny reimbursement to either party.

Conclusion

The appeals court found there was a reasonable basis to presume the property division was just and equitable.  The husband failed to demonstrate that the division was so unjust as to be an abuse of the trial court’s discretion.  The appeals court affirmed the decree.

Legal Help

If you are facing divorce, an experienced Texas high-asset divorce attorney can help you protect your rights and assets.  Call McClure Law Group at 214.692.820 to set up a consultation.

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