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Gray's Interesting Cases for September, 2008

Updated and presented by Sallee S. Smyth
  1. Hancock v. Hancock, 2008 Tex. App. LEXIS 5737 (Tex. App. – Fort Worth July 31, 2008) (mem. opinion) (Cause No. 02-06-376-CV)

    H and W participated in a protracted divorce. H appealed the property division, complaining about a valuation issue and findings of waste and fraud on his part. The COA confirmed that the requisite burden of proof for claims of waste lies with the party who allegedly wasted and mere allegations of waste or lack of consent regarding expenditures will effectively shift the burden of proof to the other party who must prove the money was expended fairly. The COA further noted that the wasting party is not necessarily entitled to an award of some portion of the wasted funds once they are brought back into the community estate for division. The COA also addressed an interesting evidentiary issue that litigators should be careful about.

    On appeal, H relied primarily on his Exhibit 1 which was known as “[H’s] Submission Notebook” containing a variety of documents and proof. The notebook was offered during the testimony of the couple’s adult son, as a summary of his testimony. H never testified at trial. W argued on appeal that the contents of the notebook should not be considered as admissible evidence in support of H’s issues citing TRE 105(a) which provides that when evidence admissible as to one party or purpose but not admissible as to another party or purpose is admitted, the court upon request shall restrict the evidence to its proper scope. The COA agreed noting that evidence admitted for a limited purpose may be considered for only that purpose. Because H did not testify and the notebook was offered only as a summary of the son’s testimony, to the extent the son did not testify about it’s contents, this evidence was excluded from consideration by the COA as were any of H’s arguments based on the information contained in the notebook. Judgment was affirmed.

  2. In re Bourg, 2008 Tex. App. LEXIS 6147 (Tex. App. – Houston [1st Dist.] August 12, 2008) (orig. proceeding) (mem. opinion) (Cause No. 01-08-618-CV)

    The parties were divorced in 2003. In 2004 the court signed an agreed order holding M in contempt and sentencing her to 180 days for violations of the decree. M served 25 days and the court signed a new order probating the remainder of the sentence under certain conditions. The court also signed a protective order containing a variety of injunctions similar to those in the prior decree. Two years later the court signed another protective order containing similar injunctions to those granted in the past. In 2007 H filed an amended motion for enforcement and sought to revoke W’s probation. The court found additional violations by W and revoked suspension of her commitment and ordered her to serve out the remainder of her original sentence (155 days). The court also sentenced her to an additional 180 days to begin when the prior sentence ended. W filed for HC which was denied. She then petitioned the Tex. SCT who granted her release while the issues were considered. The SCT denied relief and W returned to jail.

    W was erroneously released from jail 16 days later before serving her full sentence. When this was discovered, the trial court issued a capias requiring W to serve another 180 days without good time credit because she had not been fully punished. W filed another HC action. The COA recognized that the trial court may not prohibit good time credit. Further, the COA found that the capias order did not account for any of W’s prior confinement and therefore deprived her of any good time credit already earned. Lastly, case law holds that a person’s sentence continues to run during any period of their erroneous release (117 S.W.3d 866) and in this case the capias order did not give W credit for the days she had been out of jail after her erroneous release. By the time the HC decision was issued, W had been out of jail pursuant to an erroneous release for over 155 days and her original contempt sentence had expired, therefore the court could not order her back to jail.

  3. Rogers v. Rogers, 2008 Tex. App. LEXIS 6084 (Tex. App. – Dallas, August 12, 2008) (Cause No. 05-07-1594-CV)

    W appeals from an order denying her special appearance. The underlying suit was a declaratory judgment action seeking to construe the terms of a limited partnership agreement between H and W. The parties created the LP as part of an agreed judgment dissolving their marriage in California. The LP was to receive the marital assets of the parties and then manage and distribute them according to specified terms. Pursuant to the LP agreement, its principal place of business was Dallas where H moved after the divorce. When a dispute arose about the meaning of the agreement, H filed suit in Texas and W challenged the court’s jurisdiction over her through a special appearance which was denied.

    The COA found that W purposefully submitted herself to jurisdiction in Texas when she agreed that the LP would be managed from Texas and conduct business in Texas. Further, she benefitted financially from the LP’s actions in Texas. Further, even though the LP agreement would have to be interpreted under California law, this was not sufficient to make Texas an inconvenient forum.

  4. In re Tieri, 2008 Tex. App. LEXIS 6080 (Tex. App. – Tyler August 13, 2008) (orig. proceeding) (Cause No. 12-07-472-CV)

    H and W married in 1992 and had 3 kids. Up until January 2006 the family lived in New Jersey. In January 2006 W and children moved to Texas. In February H filed for divorce in NJ. The NJ court gave H temporary custody and ordered W to return the children to NJ. W returned and after another show cause hearing the court confirmed it prior custody order and gave W visitation. Shortly thereafter the NJ court dismissed the case based on the parties’ agreement. The entire family then moved to Texas. Almost 4 months later, H returned to NJ. W filed for divorce in Texas and H filed a special appearance which was denied. W was given temporary custody. Several months later the NJ court vacated its dismissal order and reinstated the divorce but refused to address the kid issues unless and until the Texas court relinquished jurisdiction to NJ. The NJ court granted a divorce without addressing the kid issues. H then filed a motion in Texas to dismiss the Texas action based on lack of UCCJEA jurisdiction. After communication between the two state courts, the Texas court found that Texas was home state because the children had lived in Texas for 8 months prior to suit (Jan. 06 to August 06) save and except for a temporary absence of 3 weeks when they were in NJ. Further, it found that NJ did not retain jurisdiction because the previous custody order had been extinguished when the NJ suit was voluntarily dismissed, finding further that the NJ court had only reinstated the divorce and had declined to exercise jurisdiction unless Texas deferred. H brought mandamus.

    The COA held that the Texas UCCJEA allows only for the temporary absence of a parent and not the child for purpose of determining jurisdiction. The kids had lived in Texas for only 3 months before returning to NJ for three weeks. When they came back to Texas they only lived there 4 months before divorce was filed. Because physical presence is the determining factor and “Intent” of the children as to where they “resided” could not be considered (165 S.W.3d 322), Texas was not their home state. Further, the COA considered the original NJ temporary custody order as an “initial order” which the Texas court could not modify under the UCCJEA unless NJ relinquished its jurisdiction. The COA held that the prior NJ court dismissal did not affect NJ’s jurisdiction to address custody or defer under the UCCJEA and it was only the NJ court that could make this decision. Mandamus granted.

  5. In re Smith, 2008 Tex. App. LEXIS 6200 (Tex. App. – Beaumont August 14, 2008) (orig. proceeding) (Cause No. 09-08-268-CV)

    Renee, the mother of twins conceived by artificial insemination and her partner, Sheila, jointly petitioned the court to appointment them JMC of the twins in 2002. Suit was filed when the twins were 4 months old and the order was signed when they were five months old. The couple resided together for the next six years, raising the children together along with a third child born to Sheila and conceived by artificial insemination from the same donor used for the twins. The couple separated in early 2008. Renee (the biological parent of the twins) sought to vacate the 2002 order claiming it was void because Sheila lacked standing in the original suit. Sheila filed a motion to modify the order asking for primary custody of the twins. The trial court denied the motion to vacate and entered temporary orders. Renee sought mandamus. Subsequently, Sheila amended her motion asking the court to treat it as an original SAPCR in the event the mandamus was granted. The COA found that the 2002 order was void because Sheila did not have standing under TFC 102.003. As the children were only 5 months old when the order was signed, she could not have had care, custody and control for 6 months prior to the suit. Further, the COA dismissed Sheila’s argument that her standing was not necessary because Renee was also a petitioner with standing as a parent.

    The COA determined that standing for both was required. Further the COA held that standing requires the existence of a “real controversy” between the parties which will be resolved by the dispute. In this case the COA noted that the underlying order expressly provided that no orders for possession were necessary because the parties lived together, equating this to the absence of a controversy between them. Sheila also argued that Renee should be estopped from challenging the validity of the order six years after her agreement to enter it but the COA held that estoppel cannot make a void order valid. The COA noted that Sheila may now possess standing for an original SAPCR but this issue was not before the appellate court. The COA granted mandamus and ordered the trial court to vacate the temporary orders and set aside the 2002 agreed order.

    Comment: Uncontested suits for the appointment of JMC’s are routinely used by same sex couples to protect their rights when children are involved. Even in cases where both parties have the requisite standing under TFC 102.003, this decision would nevertheless make the order void if there was no underlying controversy. It may be necessary to present an “issue” for resolution in the original “agreed case” to lay the groundwork to defend against a future attack on the order as void if the parties’ separate. Mandamus to the Texas Supreme Court is being considered.

  6. Chek Investments, LLC, KEH Properties, LTD and Red Hot Plantation, LLC v. L.R., 2008 Tex. App. LEXIS 6185 (Tex. App. – Dallas August 15, 2008) (Cause No. 05-08-1043-CV)

    W sued H for divorced. In her pleadings, W joined 3 separate business entities operated by H, alleging that he was fraudulently funneling community monies to the entities in breach of his fiduciary duties. All three entities were created and are based in Louisiana. In response, the entities collectively brought a special appearance challenging personal jurisdiction over them. The special appearance was denied and the entities brought an appeal pursuant to TCPRC §51.014(a)(7) which permits interlocutory appeal of orders denying special appearance. W filed a motion to dismiss the appeal based on the exception to §51.014(a)(7) which precludes interlocutory appeal “in suits brought under the Family Code.”

    The COA held that because the claims against the entities related specifically to the W’s request for a division of property, her claims against the entities were brought under the Family Code and interlocutory appeal was not available. Appeal was dismissed.

  7. In the Marriage of Santopadre, 2008 Tex. App. LEXIS 6279 (Tex. App. – Dallas August 19, 2008) (mem. opinion) (Cause No. 05-07-27-CV)

    H and W married in 1996. At the time of marriage H worked for TI. Two years after marriage, H took early retirement. After a bench trial, the court confirmed the H’s retirement as his separate property. W appealed the division and challenged the separate property finding of the retirement and several other assets based on legal and factual insufficiency of the evidence. At trial, H offered no documentary evidence to support his separate property claims. Instead H relied solely on his testimony that the assets in question had been owned prior to marriage.

    The COA held that this was insufficient to constitute clear and convincing evidence to rebut the CP presumption (citing Boyd, 131 S.W.3d 605). Further the COA determined that because the value of the property was over $1 million, the improper characterization resulted in more than a de minimis effect on the property division. The divorce was affirmed but the division was reversed and remanded.

  8. In re Kenefick. 2008 Tex. App. LEXIS 6302 (Tex. App. – Houston August 19, 2008) (mem. opinion) (Cause No. 14-08-203-CV)

    H and W divorced in 2000. The decree provided that H and W were each awarded 50% of the stock in a check cashing company and each was to receive a monthly dividend equal to 50% of the net cash income, not to exceed $3,000 per month. W gave up her voting rights to a voting trust agreement. H remained the president and CEO of the corporation. From 2000 to November 2006 H paid the monthly dividends. When he stopped, W filed a motion to modify and enforce the decree. H sought a declaratory judgment that the dividend provisions were void because the corporation was never joined as a party in the divorce and he acted only in his individual capacity and not as a corporate officer when making the agreements. Judge Wettman denied the enforcement based on a finding of ambiguity. In late 2007 W filed a counter petition to the declaratory judgment and asserted claims of breach of fiduciary duty and breach of contract. In early 2008 W also filed a motion to clarify asking for specific orders requiring H to direct the corporation to pay her the dividends. In February 2008 the trial court granted clarification and ordered H to cause the corporation to pay a $3,000 monthly dividend to the parties and further ordered that dividends be paid retroactive to November 2006. H sought mandamus relief.

    The COA found that H and W participated in the divorce in their individual capacities and the corporation was never a party and did not make an appearance. W failed to plead alter ego and therefore waived this issue. Although estoppel may have been a viable defense (because H had paid the amount for almost 6 years), W also failed to plead this at the trial court level. The COA found that the court had no authority to direct any action by the corporation and further that the clarification order amounted to a substantive change to the decree which was not permitted. The COA found the decree unambiguous concerning division of the corporate dividend and granted mandamus to vacate the clarification order.

  9. In the Interest of C.G., J.R.G. and J.G., 2008 Tex. App. LEXIS 6280 (Tex. App. – Dallas August 19, 2008) (Cause No. 05-06-1086-CV)

    M sought to suspend F’s licenses in connection with a proceeding for enforcement of child support pursuant to TFC chapter 232. M alleged that F was in arrears for about $70K. Ultimately the court suspended F’s hunting/fishing license, his driver’s license and his concealed handgun license in a hearing which was attended by F’s attorney, but not F. F argued that the conditions of TFC§232.003 (owes more than 3 months support, has been provided an opportunity to repay the arrears under a court-ordered or agreed repayment schedule and has failed to comply with such schedule) had not been fully met and therefore the order was invalid. The COA construed Chapter 232 and determined that the conditions of §232.003 must be met before a license can be suspended and that other statutory authority to suspend as contained within Chapter 232 remains dependent upon the findings in §232.003. W argued that suspension under §232.009 was permitted because F failed to attend the hearing.

    The COA disagreed because F’s attorney was present and this precluded default. The order of license suspension was reversed.

  10. In re Attorney General of Texas, Tex. App. LEXIS 6297 (Tex. App. – Houston [14th Dist.] August 19, 2008) (orig. proceeding) (mem. opinion) (Cause No. 14-08-665-CV)

    The AG obtained a default judgment for current and past due child support against F and placed a lien on his bank account. When F got notice of the lien, he filed a bill of review alleging that he had not been properly served. The trial court ruled in F’s favor and set aside the default order, extinguished the child support lien and ordered the AG to release the lien. The AG filed for mandamus challenging the trial court’s authority to extinguish the lien based on 3 arguments: (1) the trial court gave the F more relief than he asked for; (2) the trial court lacked statutory authority to extinguish the lien and (3) the trial court lacked jurisdiction to order the AG to release the lien.

    The COA found that F’s request to set aside the underlying child support judgment was sufficient to imply that he was also requesting the court to set aside the resulting lien. Further, the COA found that the trial court’s authority to extinguish the lien derives from its authority to set aside the judgment upon bill of review pursuant to TRCP 329b(f) and not from any statute in the TFC. Finally, the AG’s status as an executive officer does not exclude it from complying with a trial court’s order when it is a party to the suit. Mandamus denied.

    Comment: Finally a case where I can reemphasize and agree with David Gray’s longstanding criticism of the AG’s position and tactics taken in certain cases … In light of the AG’s failure to challenge the trial court’s decision to set aside the underlying child support judgment, I’m not sure how the AG made their arguments to maintain the resulting lien with a straight face.

  11. Hildago v. Hildalgo, 2008 Tex. App. LEXIS 6295 (Tex. App. – Dallas August 20, 2008) (Cause No. 05-06-966-CV)

    H and W divorced in California in 2002. The decree incorporated a settlement wherein H would pay W spousal support and premiums on a life insurance policy as security. In 2003 W registered the CA decree in Texas as a foreign judgment pursuant to TCPRC §35.003 and sought to enforce the spousal support payments. The parties agreed to modify the marriage settlement and the court signed an order to that effect in March 2005. Several months later W filed to enforce payment of the life insurance premiums. H claimed he was no longer required to pay because he had retired. On January 3, 2006 the court signed an order denying W’s enforcement finding that H’s obligation to pay the premiums had terminated. W filed a motion for rehearing and asked the court to enter an order that required H to resume payments if he went back to work before turning age 65. On April 4, 2006 (91 days after the prior order) the court issued a “ruling” which vacated its prior order and made new ones, including ordering reimbursement to W of insurance premiums and awarding W attorneys fees. H filed a timely motion for new trial and asked the court to reinstate the original order. The trial court granted H’s motion on July 5, 2006 (Day 185). W filed a notice of appeal and petition for mandamus.

    The COA found the 1/3/06 order to be a final order. W’s motion for rehearing sought a substantive change in the order and was therefore a Rule 329b motion to modify which extended the court’s plenary power. This motion was overruled by operation of law on Day 75 (March 19) however the court has an additional 30 days to act. The COA found the court’s April 2006 “ruling” to be a final written order which expressly vacated the 1/3/06 judgment which in effect granted a new trial within its plenary power. As such, the case was returned to the court’s docket as if no judgment had ever been entered. Under TRCP 329b(e) if the court grants a new trial, it may only change its mind and “ungrant” the motion within the original 75 days after judgment. Because the July 5, 2006 order which sought to “ungrant” the new trial and reinstate the January 2006 order was signed outside this time period, it was void. Mandamus granted.

  12. Longhurst v. Clark, 2008 Tex. App. LEXIS 6402 (Tex. App. – Houston [1st Dist.] August 21, 2008) (mem. opinion) (Cause No. 01-07-226-CV)

    H and W were divorced in Colorado in 1988 and H was ordered to pay child support. W and the children moved to Utah and H moved to Texas. In 1992, the Texas AG brought an action to enforce at the request of the Utah AG under RURESA. In a default proceeding, the Texas court confirmed arrearages in the amount of $121K and modified the underlying c/s obligation going forward. In 2004 W sought to revive and enforce the 1992 judgment and to confirm all unpaid c/s. The Texas AG filed a motion asking to be dismissed from the suit. The court entered another default judgment against H and dismissed all of W’s claims against the State of Texas. H filed a MNT which was granted. In 2006 H filed an answer. W amended her pleadings. H filed a response within 7 days of trial without seeking leave and the response was struck and not considered. At trial, H sought to introduce evidence of payments made under a Utah order but this was excluded because H failed to plead the affirmative defense of payment. The court issued a cumulative judgment for $464,796 and H appealed and asserted a variety of issues. H claimed W had no standing because there had never been a reassignment of benefits from the Texas AG to Linda.

    The COA found that as a beneficiary of the AG’s judgment, Linda had standing to revive it. H claimed that the judgment was not timely revived after being dormant for more than 10 years. The COA held that although c/s is not a debt, an action to enforce it may be considered an action for debt for purposes of reviving a dormant judgment and W brought her action timely. H argued that the 1992 Texas order was void because it was based on a 1988 Colorado order which had never been properly registered as a foreign judgment. The COA held that while registration is a statutory prerequisite to enforcement, any failure to follow the statute would have simply made the order erroneous (subject to a direct attack) and not void (subject to a collateral attack). Because H did not timely appeal from the 1992 order, he could not complain now. H argued that the 1992 order was void because it modified a foreign support order contrary to UIFSA. The COA noted that RURESA was in effect at the time of the 1992 order and it did not preclude modification. H also claimed that the interest calculations were incorrect because the 1992 judgment included amounts for spousal support as well as child support and different interest rates applied but H failed to provide information on these rates. At the end of the day, H failed on all of his arguments, however the COA modified the judgment because of a $1.00 mistake in math.

  13. In the Interest of J.I.M., A Child, 2008 Tex. App. LEXIS 6339 (Tex. App. – El Paso August 21, 2008) (Cause No. 08-05-302-CV)

    M and F were divorced in 1999 and appointed JMC of their only child. F was ordered to pay c/s in the amount of $800 per month. Pursuant to a formula, support would increase when F’s salary increased and F was required to pay M 20% of any net bonuses he received. In the 3 years after divorce, F’s salary changed several times. In 2002 F filed a motion to reduce his child support claiming it did not comply with c/s guidelines. At the time the motion was filed, his support was over $2,000 per month. M was served in October 2002 and filed an answer. In November 2003, M filed a motion to enforce claiming H owed her additional support due to salary increases and bonuses received since the MTM was filed. She asked for confirmation of arrearages and judgment. The case was tried in December 2003. F testified that he was paying $1200/month in c/s because this was the statutory maximum but agreed he was not paying what the decree required. He argued however that his motion to modify sought a retroactive reduction in c/s back to the date of filing. M claimed that this request was not relevant and she was entitled to a judgment for past due support. The court granted F’s motion to modify and denied M’s motion for enforcement. M appealed.

    The COA acknowledged that the trial court was presented with 2 conflicting motions: one to modify and reduce support and one to grant an arrearage judgment for amounts accruing during the modification case. The COA acknowledged that while the court has broad discretion to modify child support it has no discretion to forgive a proven arrearage. Recognizing that an accrued but unpaid child support payment constitutes a final judgment (TFC §157.261] the COA found no exception to the trial court’s duty to enter judgment during a modification proceeding. The COA recognized that in such a situation, the obligor should continue to pay the ordered amount and if the support is later reduced, the court may give the obligor credit towards future payments. The COA also mentions that the TFC provides other tools which were available to F in this case but not used including (1) assertion of “inability to pay” defense to enforcement and (2) motion to temporary orders to modify his support during pendency of modification case. The COA reversed the judgment and remanded the case for further proceedings.

    Comment: As we all know, many trial courts do not entertain motions to modify support on a temporary basis in Chapter 156 modification suits. If you have a client in this circumstance and find yourself in one of these courts, cite the trial court to this case to demonstrate the inequities that can result and see if you can get them to reconsider a temporary hearing.

  14. In re Suarez, 2008 Tex. App. LEXIS 6511 (Tex. App. – Dallas August 26, 2008) (orig. proceeding) (Cause No. 05-08-835-CV)

    In the midst of a habeas corpus proceeding which sought the return of a child, grandmother issued a subpoena to TDFPS and one of it’s employees, Suarez, a case worker, to appear at a hearing. Suarez failed to appear on 3 separate occasions. GM filed suit for sanctions against TDFPS and Suarez and served them with citation. TDFPS and Suarez responded and after a hearing the court awarded sanctions against them in the amount of $3,000 plus costs. TDFPS and Suarez filed mandamus asserting that the sanction order was void because they were non-parties to the underlying proceeding and the subpoena may only be enforced by contempt pursuant to TRCP 176.8.

    The COA agreed. Since GM did not request contempt, but only sanctions, the trial court exceeded its authority. The COA further noted that even if the court obtained personal jurisdiction over TDFPS and Suarez in an independent action for sanctions filed and served upon them, the court did not have personal jurisdiction over them at the time they allegedly failed to comply with the subpoena and therefore, contempt remained the only viable means of enforcement. Mandamus granted.