Claudia Ivonne Marie v. David R. Velasquez ( 2008 )


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    MEMORANDUM OPINION
    No. 04-08-00271-CV
    Claudia Ivonne MARIE,
    Appellant
    v.
    David R. VELASQUEZ,
    Appellee
    From the 131st Judicial District Court, Bexar County, Texas
    Trial Court No. 2006-CI-08137
    Honorable John D. Gabriel, Jr., Judge Presiding
    Opinion by:       Rebecca Simmons, Justice
    Sitting:          Karen Angelini, Justice
    Sandee Bryan Marion, Justice
    Rebecca Simmons, Justice
    Delivered and Filed: December 3, 2008
    AFFIRMED
    This appeal stems from a divorce action. Claudia Ivonne Marie appeals the trial court’s
    finding of a community debt in favor of Claudia’s in-laws, Jose and Olivia Velasquez. Claudia
    contends the evidence is insufficient to support the trial court’s finding of a valid loan in favor of
    Jose and Olivia; therefore, the trial court abused its discretion in characterizing the loan as
    community debt. Claudia also contends the trial court’s enforcement of an oral agreement to repay
    04-08-00271-CV
    monies for the purchase of real property violates the statute of frauds. We affirm the trial court’s
    judgment.
    BACKGROUND
    In a divorce action filed by David R. Velasquez against Claudia, the trial court found that a
    loan made to the parties by Jose and Olivia was a community debt. At trial, Jose and Olivia testified
    they loaned the couple $107,000 to help construct a home. On direct examination, Olivia produced
    checks totaling $91,160.00 made payable to David. Olivia testified that the repayment arrangements
    were vague and that Claudia was not present when she gave David the checks. Jose testified that he
    could not recall whether Claudia was present. Both Jose and Olivia testified that neither David nor
    Claudia executed any documents to evidence their oral agreement for the financing arrangement.
    David testified the arrangement was a verbal loan agreement between his parents and himself.
    David explained he handled all the financial transactions during the marriage and all the checks were
    written directly to him. David testified that he paid $8,000 back to his parents on the loan and
    produced accompanying checks made payable to his parents.
    The trial court made a finding that the community estate owed a balance of $83,160.00 on
    the loan made by Jose and Olivia despite the lack of a written agreement. The amount was based
    on the checks written by Jose and Olivia, totaling $91,160, minus the $8,000 David testified he
    already paid, which was evidenced by the checks admitted into evidence.
    DIVISION OF PROPERTY
    We review a trial court’s community property division order under an abuse of discretion
    standard. Murff v. Murff, 
    615 S.W.2d 696
    , 699 (Tex. 1981). A trial court has wide discretion when
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    dividing the community property estate in a manner that it deems “just and right,” and we will
    presume the trial court exercised its discretion properly. 
    Id. To determine
    if a trial court abused its
    discretion, we analyze the following two prongs: (1) whether the trial court had sufficient
    information to exercise its discretion, and (2) whether the trial court abused its discretion by making
    a property division that is manifestly unfair and unjust. Chacon v. Chacon, 
    222 S.W.3d 909
    , 915
    (Tex. App.—El Paso 2007). “The trial court does not abuse its discretion if some evidence
    reasonably supports the trial court’s decision.” Butnaru v. Ford Motor Co., 
    84 S.W.3d 198
    , 211
    (Tex. 2002).
    Debts contracted during marriage are presumed to be community debt and therefore become
    community obligations at divorce unless there is evidence that the creditor agreed to look solely to
    a party’s separate estate. Wierzchula v. Wierzchula, 
    623 S.W.2d 730
    , 732 (Tex. App.—Houston [1st
    Dist.] 1981, no writ). To overcome the presumption of community debt, the complaining party must
    rebut the presumption by clear and convincing evidence. TEX . FAM . CODE ANN . § 3.003(b) (Vernon
    2006). “‘Clear and convincing’ evidence means the measure or degree of proof that 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.” Malekzadeh v. Malekzadeh, Nos. 14-05-00113-CV, 14-06-00341-CV, 
    2007 WL 1892233
    , at *5 (Tex. App.—Houston [14th Dist.] July 3, 2007, no pet. ).
    In this case, there is evidence that a loan was made by Jose and Olivia to David and Claudia
    during the existence of their marriage; thus, the loan is presumed to be community debt. Both Jose
    and Olivia testified that checks were made payable to their son to use to build a marital house, and
    David testified that he and Claudia discussed obtaining a loan from his parents frequently.
    Additionally, the record contains evidence of multiple checks made to David from Jose and Olivia
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    for the total amount of $91,160.00, and the record also contains evidence of monthly checks made
    to Jose and Olivia from David in the amount of $8,000, showing evidence of repayment.
    Accordingly, because there is some evidence that supports the trial court’s finding that Jose and
    Olivia made a loan to Claudia and David during their marriage, the trial court did not abuse its
    discretion by presuming the loan to be community debt. See 
    Butnaru, 84 S.W.3d at 211
    .
    To rebut the presumption of community debt, Claudia bears the burden of showing by clear
    and convincing evidence that Jose and Olivia agreed to look solely to David for satisfaction of the
    debt. 
    Wierzchula, 623 S.W.2d at 732
    . Here, there is no documentary evidence that Jose and Olivia
    agreed to look solely to their son for repayment. Nevertheless, Claudia argues she was never
    involved in the loan transaction between David and his parents. To support her position, Claudia
    contends David was in charge of all financial matters. At trial, David testified he handled all the
    transactions involving the loan and all the checks were written directly to him. Claudia further
    alleges any money given by Jose and Olivia was a gift. However, Claudia’s lack of involvement in
    the loan transaction does not rise to the level of clear and convincing evidence to rebut the
    presumption of community debt, particularly when we consider the totality of the circumstances in
    which the debt arose. See Cokerham v. Cockerham, 527, S.W.2d 162, 171 (Tex. 1975).
    Claudia extensively cites Sprick v. Sprick, 
    25 S.W.3d 7
    (Tex. App.—El Paso 1999, pet.
    denied), as authority for her proposition that the trial court relied on insufficient evidence when it
    made a finding of a debt against the community estate. In Sprick, the El Paso court affirmed a trial
    court’s finding of an unsecured loan against the community estate. 
    Id. at 10.
    Claudia distinguishes
    this case from Sprick by explaining that Sprick involved a written promissory note, while this case
    involves a mere verbal agreement; therefore, according to Claudia, there is insufficient evidence for
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    a finding of a valid loan due to the lack of a written agreement. See 
    id. Although the
    testimony in
    this case does establish that the loan was a verbal agreement, some evidence was presented to
    establish that Jose and Olivia loaned money to the couple, and Claudia has failed to overcome the
    clear and convincing evidence standard necessary to rebut the presumption of community debt. See
    
    Butnaru, 84 S.W.3d at 211
    ; 
    Wierzchula, 623 S.W.2d at 732
    .
    STATUTE OF FRAUDS
    Claudia further argues that the loan arrangement was an oral agreement for the purchase of
    real property and is therefore barred by the statute of frauds. Claudia asserts the time frame for
    repayment was ambiguous at best and could not be performed within one year from the date of the
    original agreement. Additionally, Claudia points out that David did not even begin performance on
    the agreement by making payments until four years after the loan was made; therefore, the oral
    agreement is barred by the statute of frauds.
    Whether an oral agreement to repay monies given for the purchase of real property violates
    the statute of frauds is a question of law. Gerstacker v. Blum Consulting Eng’rs., Inc., 
    884 S.W.2d 845
    , 850 (Tex. App.—Dallas 1994, writ denied). The statute of frauds applies to agreements that
    are “not to be performed within one year from the date of the making of the agreement.” TEX . BUS.
    & COM . CODE ANN . § 26.01(a)(6) (Vernon 2002). “Thus, when a promise or agreement, either by
    its terms or by the nature of the required performance, cannot be completed within one year, it falls
    within the Statute and must be in writing to be enforceable.” Case Corp. v. Hi-Class Business
    Systems of America, Inc., 
    184 S.W.3d 760
    , 777 (Tex. App.—Dallas 2005, pet. denied). However,
    the one-year provision does not apply to 1) “a contract which is performed on one side at the time
    it is made, such as a loan of money,” or 2) “any contract which has been fully performed on one side,
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    whether the performance is completed within a year or not.” Estate of Kaiser v. Gifford, 
    692 S.W.2d 525
    , 527 (Tex. App.—Houston [1st Dist.] 1985, writ ref’d n.r.e.). Accordingly, we follow the rule
    that “full performance by one party to an oral contract removes the contract from the prohibitions
    of the Statute regardless of whether performance is completed within a year or not.” 
    Id. In this
    case, the statute of frauds does not bar the oral loan agreement between the community
    estate and Jose and Olivia. While the statute of frauds requires agreements that cannot be performed
    within a year to be in writing, the one-year provision does not apply to an agreement if one side of
    the agreement has been fully performed. Estate of 
    Kaiser, 692 S.W.2d at 525
    . Here, Jose and Olivia
    fully performed their side of the loan agreement as evidenced by the multiple checks made payable
    to David for $91,160.00. Therefore, the enforcement of the oral loan was not barred by the statute
    of frauds.
    CONCLUSION
    Because Claudia failed to rebut the presumption that the loan made by Jose and Olivia was
    community debt and the statute of frauds does not bar its enforcement, we affirm the trial court’s
    judgment.
    Rebecca Simmons, Justice
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