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Texas Divorce Court May Award Damages to Wife Where Husband Improperly Withdrew Retirement Funds During Divorce

Under Texas family law, if a party in a divorce case fails to comply with the divorce decree and delivery of the awarded property would no longer be an adequate remedy, the court may render a money judgment for the damages.  Tex. Fam. Code Ann. § 9.010.  A husband recently challenged an enforcement order awarding the wife damages after the husband withdrew and spent all the funds from two retirement accounts while the divorce was pending.

The inventories submitted by the husband in the divorce proceedings included two retirement accounts in his name, but did not specify an amount.  Both parties were ordered to preserve assets until the divorce was concluded, but the husband closed the accounts and transferred the funds to his personal account.   The trial court awarded 50% of each account to the wife in the final divorce decree.

The wife sued to enforce the property division in the divorce decree, also alleging fraud on the community.  The husband testified he had withdrawn about $75,000 from the accounts and admitted he had done so without notifying the wife or the court.  He testified he spent the funds on living expenses because he was unemployed.

A quarterly statement for one of the accounts from the previous year showed a balance of more than $90,000.  In his answers to interrogatories, the husband stated one of the accounts was $65,839.13 and the other was $8,986.97 when he closed them.  The wife testified that she saw documents related to the accounts during the marriage and knew one of the accounts had a balance of $90,000 and the other $60,000.  She testified she had not received any of the funds from the accounts.

The trial court found in favor of the wife on both counts and awarded her $57,063.50, interest, and attorney’s fees.  The husband appealed.

The husband argued the judgment improperly altered the divorce decree’s division of property because there were no funds in the accounts at the time of the decree.  Although a court may clarify or enforce the property division, the trial court may generally not amend, modify, alter or change the property division set forth in the decree.  The husband argued that enforcement order improperly changed the substantive property division because there were no funds in the accounts when the court awarded half of them to the wife.

The appeals court noted it would have been within the trial court’s discretion to find the husband violated its order prohibiting him from depleting community assets during the pendency of the divorce.  The appeals court therefore found that the wife was entitled to seek a judgment as enforcement of the property division. She sought the money judgment because the husband had withdrawn the funds and rendered the award in the decree an inadequate remedy.  The trial court was required to order a property division that was just and right, including determining the parties’ rights to any requirement plans.  The court prohibited the husband from depleting the accounts while the divorce was pending.  The appeals court found the decree and the allocation of the accounts “were not unilaterally transformed into a null award” when the husband violated the court’s order. The enforcement order reducing the wife’s share of the accounts to a money judgment did not constitute an improper amendment of the property division.

The husband also argued the damages awarded were improper because there was not sufficient evidence supporting them.  The appeals court noted the trial court is responsible for evaluating the credibility of the witnesses and assigning weight to their testimony.

There was evidence before the court regarding the value of the accounts other than the husband’s testimony. There was a tax return showing the husband had reported $114,127 of pension income the year he withdrew the funds.

The appeals court found this evidence supported a finding that half of the income from the retirement accounts as reported by the husband in his tax return would have been delivered to the wife if the husband had not wrongfully withdrawn all of the funds.  The appeals court found there was legally sufficient evidence supporting the court’s ruling and it did not abuse its discretion in awarding the damages.

The appeals court affirmed the trial court’s judgment.

If your former spouse has not complied with the property division in your divorce decree, the experienced Texas divorce attorneys at McClure Law Group can help you seek enforcement.  Call us at 214.692.8200 to set up an appointment.

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