Barbara White v. James N. White, Jr. and Audrey R. Gorham ( 2015 )

Affirmed in Part, Reversed and Remanded in Part, and Memorandum
Opinion filed October 8, 2015.
In The
Fourteenth Court of Appeals
NO. 14-14-00593-CV
BARBARA WHITE, Appellant
V.
JAMES N. WHITE, JR. AND AUDREY R. GORHAM, Appellees
On Appeal from the 311th District Court
Harris County, Texas
Trial Court Cause No. 2012-65951
MEMORANDUM OPINION
Barbara White appeals from a final divorce decree and qualified domestic
relations order. In eight issues, Barbara challenges the trial court’s division of
marital property and the trial court’s denial of Barbara’s request to reinstate her
maiden name. We overrule all issues involving the division of the marital estate
due to Barbara’s acceptance of benefits under the divorce decree, and we reverse
and remand to the trial court on the issue of Barbara’s requested name change.
BACKGROUND
Barbara White and James N. White, Jr. were married on January 11, 1995.
Barbara filed for divorce in November 2012. James filed a counter-petition for
divorce. The case was tried to the court in March 2014, and the trial court signed a
Final Decree of Divorce and a Qualified Domestic Relations Order (QDRO) on
April 22, 2014.
Much of the appellate battle centers on the trial court’s marital property
characterization of James’s retirement benefits. James began working for the fire
department in 1967 and began contributing to the Houston Firefighter’s Relief and
Retirement Fund in March 1968. James ceased regular employment in March
1998 — three years into his marriage with Barbara, and after thirty years of
employment — and began participating in the Houston Firefighter’s Relief and
Retirement Fund DROP program.1 James worked for the fire department for ten
more years until he retired in March 2008. James’s DROP account contained
approximately $640,000 when James and Barbara divorced in 2014; the trial court
determined that approximately $590,000 of this amount is James’s separate
property and divided the remaining community property portion equally between
the parties. At the time of the divorce, James also was receiving a monthly
retirement payment of approximately $8,700; the trial court ordered that Barbara
receive $962.99 per month as her one-half community property share.
In eight issues, Barbara contends that the trial court abused its discretion by:
(1) failing to apportion James’s retirement benefits properly; (2) failing to divide
1
The DROP program is an optional method to receive benefits available to firefighters
with 20 or more years of credited pension service. This program allows an individual to
continue working and receiving a salary for up to ten years; the monthly retirement annuity the
individual could have received during that period is credited to an account in the individual’s
name where it earns interest at a guaranteed annual rate.
2
the community property interest in the cost-of-living adjustment to James’s
retirement benefits in the final decree; (3) failing to modify the final decree or
grant a new trial to correct the trial court’s failure to divide the cost-of-living
adjustment; (4) entering a post-trial QDRO implicitly granting to James the
entirety of the post-divorce cost-of-living adjustments despite the absence of an
award to that effect; (5) failing to restore Barbara’s maiden name or state the
reason for denying the request in the final decree; (6) failing to modify the final
decree to restore Barbara’s maiden name; (7) failing to divide a material asset of
the parties in the final decree, specifically, a house in Sargent, Texas; and (8)
awarding the marital property in a manner that was manifestly unjust and unfair to
Barbara.
James filed a motion to dismiss this appeal contending that Barbara
voluntarily accepted benefits under the judgment of divorce and therefore is
estopped to challenge the judgment on appeal. We carried the motion with the
appeal and now address all of the matters presented. We initially discuss the
motion to dismiss because it is dispositive on a majority of Barbara’s issues.
ANALYSIS
I. Motion to Dismiss
Generally, a party who accepts benefits under a judgment is estopped to
challenge the judgment on appeal. See Tex. State Bank v. Amaro, 87 S.W.3d 538,
544 (Tex. 2002); Waite v. Waite, 150 S.W.3d 797, 803 (Tex. App.—Houston [14th
Dist.] 2004, pet. denied). This acceptance of benefits doctrine arises often in
divorce cases when one spouse accepts certain benefits of the judgment and then
tries to appeal the remainder of the judgment. Waite, 150 S.W.3d at 803.
3
James, as the movant and appellee in this case, bears the burden of proof to
establish the applicability of the acceptance of benefits doctrine. See Leedy v.
Leedy, 399 S.W.3d 335, 339 (Tex. App.—Houston [14th Dist.] 2013, no pet.). If
James establishes that Barbara accepted benefits of the judgment, then the burden
shifts to Barbara to demonstrate that an exception to the doctrine applies. See id.
Several exceptions to the acceptance of benefits doctrine have been
identified. First, the doctrine does not apply if the benefits were accepted due to
economic necessity. See Waite, 150 S.W.3d at 803. Second, the doctrine does not
apply if reversal of the judgment could not possibly affect the appellant’s right to
the benefits accepted, or, stated differently, if the appellant accepts only that part of
the judgment that the appellee concedes is due to the appellant. Carle v. Carle,
234 S.W.2d 1002, 1004 (Tex. 1950); see also Waite, 150 S.W.3d at 804. Finally,
the doctrine does not apply if the benefit accepted was cash, the use of which
would not prejudice the appellee. Sprague v. Sprague, 363 S.W.3d 788, 793 (Tex.
App.—Houston [14th Dist.] 2012, pet. denied).
In his motion to dismiss and supporting affidavit, James contends that
Barbara was awarded and has accepted the following benefits under the divorce
decree: (1) $24,914.05 from James’s DROP account, which was one-half of the
portion of the account determined by the trial court to be community property; (2)
$962.99 per month as Barbara’s one-half community property share of James’s
monthly retirement benefit; (3) $14,784.50 from the parties’ mutual fund account
(one-half of the total account value); (4) approximately $300 from various bank
accounts; (5) two moped mini-bikes; (6) a motorcycle; and (7) a 2001 Buick
Century automobile.
4
With several exceptions noted below, Barbara generally admits that she has
accepted benefits under the divorce decree. She contends that all three exceptions
to the doctrine apply to prevent estoppel of her claims on appeal.
A. Economic Necessity
The economic necessity exception applies when the acceptance of benefits
was not voluntary but was necessary because of financial distress or other
circumstances. Argovitz v. Argovitz, No. 14-04-00885-CV, 2005 WL 2739152, at
*4 (Tex. App.—Houston [14th Dist.] Oct. 25, 2005, no pet.) (mem. op.); Waite,
150 S.W.3d at 803. Barbara contends that she accepted benefits under the decree
due to severe economic necessity because her alleged expenses greatly exceed her
disability and retirement income.
While Barbara provides a supporting affidavit with her response to the
motion to dismiss that identifies her monthly expenses, she provides no other
supporting documentation to substantiate those expenses. For example, Barbara
contends in her affidavit that her monthly utility expenses are $748; her affidavit
does not include a reference to any bills or otherwise explain why her monthly
utility expenses have increased from the $330 she initially identified to the trial
court. James contends, and we agree, that Barbara’s affidavit is conclusory and
therefore insufficient to establish economic necessity. See, e.g., Waite, 150 S.W.3d
at 805-06 (affidavit stating generally that benefit recipient had to pay for food,
clothing, rent, insurance, and $144,000 of past-due attorney’s fees was conclusory
and insufficient to establish economic necessity in part because it did not list
specific bills); see also In re Macy’s Tex., Inc., 291 S.W.3d 418, 419 (Tex. 2009)
(conclusory affidavit “fail[ed] to establish any basis for the affiant’s knowledge of
corporate structure or attach any supporting documents whatsoever”).
5
Barbara also contends in her affidavit that she has not accepted the two
moped mini-bikes and the motorcycle. She asserts that James “dumped the mini-
bikes and the motorcycle outside [her] house after the Divorce Decree was signed”
without her consent or request. However, the affidavit does not address the Buick.
Even assuming that Barbara has not accepted the moped mini-bikes or the
motorcycle, and even assuming that Barbara accepted the DROP funds,2 monthly
retirement benefit, and other funds3 due to economic necessity, Barbara makes no
argument of economic necessity regarding the Buick automobile. Barbara has
therefore accepted at least one unexplained non-cash benefit, which prevents
application of the economic necessity exception. See Argovitz, 2005 WL 2739152,
at *4 (economic necessity argument failed in part because no economic necessity
argument was advanced regarding appellant’s acceptance of real property,
corporate stock, frequent flyer miles, or automobile); Waite, 150 S.W.3d at 805-06
(exception did not apply where appellant’s affidavit failed to identify any
economic necessity requiring transfer of real property to appellant).
Barbara does not contend that she lacks ability to borrow money to meet her
expenses or that she could not have obtained money during the pendency of the
appeal by requesting temporary support payments.4 See Argovitz, 2005 WL
2739152, at *4 (“We additionally note that Paddy does not contend that she has no
other sources of income or that she has no ability to borrow money to meet her
expenses; likewise, she fails to explain why she could not have obtained money
2
Barbara admits to accepting her awarded portion of James’s DROP account but
contends that she “rolled over the DROP payment into a retirement account, because [she]
cannot afford to pay taxes on a distribution of the funds.” No argument is made that moving the
DROP funds into a separate retirement account was the result of economic necessity.
3
Barbara contends that she has withdrawn $2,500 of the $14,784.50 awarded to her from
the parties’ mutual fund and has left the remainder undisturbed.
4
While the appellate record contains a motion for temporary orders pending appeal, there
is no indication that the motion was set for a hearing or ruled upon by the trial court.
6
during the pendency of the appeal by requesting temporary support payments.”);
Waite, 150 S.W.3d at 806 (if appellant were suffering financial duress, he would
have sold, refinanced, or taken a loan against his home, or at least considered doing
so).5
Based on the foregoing, we conclude that Barbara has failed to establish that
she accepted benefits of the judgment due to economic necessity.
B. Entitlement
An appellant is not estopped by the acceptance of benefits doctrine when the
reversal of a judgment cannot possibly affect the appellant’s right to the benefit
secured under that judgment. See Carle, 234 S.W.2d at 1004. In other words, an
appellant may accept benefits when the appellee concedes, or is bound to concede,
that they are due to the appellant. See id.; Leedy, 399 S.W.3d at 341. This
exception is narrow, and the appellant’s right to the benefits accepted must be
unquestionable. Carle, 234 S.W.2d at 1004; Leedy, 399 S.W.3d at 341; Waite, 150
S.W.3d at 807 (“the exception does not tolerate chance or uncertainty”).
Barbara contends that she has accepted only benefits to which James, in his
sworn inventory filed with the trial court, has conceded she is entitled. For
example, Barbara asserts that “[t]he retirement account benefits accepted were the
exact amounts [James] and his expert asked the court to award her,” and that the
cash and other assets awarded her represented her share of the community estate,
as acknowledged by James’s sworn inventory. Barbara argues that the “trial court
could re-divide the marital estate to award [her] a fair and equitable share without
divesting [her] of the benefits she has received to date.” This argument misses the
mark and misconstrues the exception.
5
Barbara has a house in Houston which was confirmed in the final decree of divorce to
be her separate property.
7
The exception identified by Carle does not focus on whether the trial court
could award additional assets to the appellant on remand without divesting assets
previously awarded. Rather, the exception applies only if the appellant could not
possibly be divested on remand of those assets already awarded. See Carle, 234
S.W.2d at 1004; Waite, 150 S.W.3d at 807 (“The Texas Supreme Court explained
that a party who accepts benefits that are undeniably his—so much that the
opposing party would concede upon another trial that the benefits are his—does
not waive the right to appeal.”).
Neither James’s sworn inventory filed with the trial court nor the testimony
of James’s expert establish that Barbara is entitled to the assets awarded her. At
most, the inventory and testimony might operate as a concession regarding the
community property classification of certain assets.6 However, any such
concession would not prevent James from arguing on remand that Barbara should
receive a smaller share of those community assets than she was awarded
previously. See Leedy, 399 S.W.3d at 341 (when parties to divorce stipulated to
the value of wife’s interest in business, this court noted that, “if there were a
remand in this case, Brad would not be limited to seeking enforcement of the Rule
11 Agreement or required to concede that Kedren was entitled to at least $125,000
for her interest in Texcalibur,” and that, “[i]n a hypothetical remand, she might
recover more; she might recover less”); Argovitz, 2005 WL 2739152, at *3 (“It is
extremely unlikely that Jerry would concede, or would be required to concede,
Paddy’s entitlement to any of the items she has accepted under the original
6
Even this assumption is questionable. See, e.g., Reynolds v. Reynolds, No. 14-09-
00720-CV, 2010 WL 3418209, at *2-3 (Tex. App.—Houston [14th Dist.] Aug. 31, 2010, pet.
denied) (mem. op.) (rejecting wife’s argument that husband conceded her entitlement to certain
funds when he signed divorce decree containing language that “the parties stipulate the [decree]
is enforceable as a contract,” because wife did not sign decree and it was therefore not
enforceable as a marital property agreement signed by both parties).
8
judgment. Indeed, Paddy offers no reason why Jerry could not request, and the
trial court could not award to him, the real property, the stock, the frequent flyer
miles, and the vehicle.”) (citation omitted). Accordingly, Barbara has not
demonstrated that reversal of the judgment could not possibly affect her right to the
benefits accepted.
C. Cash Benefits
An appellant who has accepted a benefit under a judgment is not estopped
from appealing the judgment if the benefit was cash, the use of which would not
prejudice the appellee. Sprague, 363 S.W.3d at 793. This exception is limited to
cases in which the cash benefits accepted were relatively small in comparison with
the total value of the community property because the trial court readily can take
the amounts into account on remand. See Leedy, 399 S.W.3d at 342.
Barbara argues that the only benefits she accepted were cash benefits. As
previously noted, however, Barbara also was awarded other non-cash benefits,
including the Buick. Barbara’s acceptance of these non-cash benefits is not
disputed. See Argovitz, 2005 WL 2739152, at *3 (cash benefit exception did not
apply when non-cash benefits were accepted); see also Kastleman v. Kastleman,
No. 03-13-00133-CV, 2014 WL 3809759, at *3 (Tex. App.—Austin July 30, 2014,
pet. pending) (“Lisa’s argument does not address the fact that she did not accept
only cash benefits but also accepted real property and other unspecified assets as
stated in the court’s unchallenged finding. We therefore conclude that Lisa has not
met her burden of establishing that the cash benefits exception applies.”).
Even disregarding the acceptance of non-cash benefits, Barbara has taken
control of essentially the entire cash amount awarded to her; this constitutes
9
approximately half of the community estate funds.7 Barbara admits that she has
spent some of those funds; there is no documentation in the record to establish that
she has not spent all of them. Accordingly, we cannot say that James would not be
prejudiced on remand if the trial court were to redistribute the marital estate in his
favor. See Waite, 150 S.W.3d at 806-07 (refusing to apply cash benefits exception
where husband “took close to one hundred percent of the total community property
he was awarded and all of the community cash he was awarded”); Warren v.
Warren, No. 2-02-408-CV, 2003 WL 22351806, at *2 (Tex. App.—Fort Worth
Oct. 16, 2003, pet. denied) (mem. op.) (“The record shows that the majority of
Terry’s half of the proceeds has been used to pay credit card debt, and there is no
evidence showing that Terry has the ability to reimburse the community estate in
the event the trial court redistributes the estate on remand in a manner more
favorable to Brenda.”). Therefore, we conclude that the cash benefits exception
does not apply.
D. Conclusion
Because Barbara has not shown that her appeal of the trial court’s division of
the marital estate falls within an exception to the acceptance of benefits estoppel
doctrine, we overrule all of Barbara’s challenges involving the division of marital
property.8 However, we reject James’s motion to dismiss the appeal in its entirety
because Barbara’s issues concerning the trial court’s alleged failure to reinstate her
maiden name do not involve the division of property and are therefore severable
7
Barbara refused to cash a check from James in the amount of $2,082.99, which
represented her one-half community property interest in certain bank accounts.
8
Specifically, we dismiss Barbara’s issues 1–4 and 7–8. Regarding Barbara’s seventh
issue in which she contends that the trial court failed to divide a house in Sargent, Texas, the
final decree specifically orders the property sold and any profit split evenly between the parties.
The decree states that, if the home is sold for a loss, the remaining debt shall be paid entirely by
James. Accordingly, the trial court did not fail to divide the house in Sargent, and Barbara’s
seventh issue is essentially a challenge to the trial court’s division of assets.
10
and may be properly considered in this appeal. See Tomsu v. Tomsu, 381 S.W.3d
715, 717 (Tex. App.—Beaumont 2012, no pet.) (spousal maintenance and trial
court’s award of appellate fees were issues not involving the division of the marital
estate and survived motion to dismiss); Reynolds v. Reynolds, No. 14-09-00720-
CV, 2010 WL 3418209, at *3 (Tex. App.—Houston [14th Dist.] Aug. 31, 2010,
pet. denied) (mem. op.) (“We do not grant David’s motion to dismiss Wilma’s
entire appeal, however, because the estoppel arguments apply only to Wilma’s
challenges to the divorce decree, not to her appeal of the trial court’s order
sanctioning her and preventing her from discovering David’s QIP 2008 income.”).
II. Restoration of Maiden Name
In her fifth and sixth issues, Barbara contends that the trial court abused its
discretion by failing to (1) restore Barbara’s maiden name or state the reason for
denying the request in the final decree; and (2) modify the final decree to restore
Barbara’s maiden name after the alleged error was raised in Barbara’s Motion for
New Trial, Motion for Clarification and Motion to Modify Decree of Divorce.
Section 6.706(a) of the Texas Family Code provides that, “[i]n a decree of
divorce or annulment, the court shall change the name of a party specifically
requesting the change to a name previously used by the party unless the court
states in the decree a reason for denying the change of name.” Tex. Fam. Code
Ann. § 6.706(a) (Vernon 2006). Barbara’s original petition for divorce asked the
trial court to restore her maiden name. The final decree of divorce neither restored
Barbara’s maiden name nor stated a reason for denying the requested name change.
Barbara likewise asked the trial court to modify its final decree. The trial court
refused without explanation to do so and stated: “With regards to the request for
your name change, your motion has been denied.”
11
The statute mandates that the court “shall” change the name of the party
unless the court states a reason for denying the requested name change in the
decree. See id. Accordingly, we reverse the portion of the final decree of divorce
that denies Barbara’s request to reinstate her maiden name, and remand to the trial
court to either grant the requested name change or to state a reason in the decree
for not doing so.
CONCLUSION
Because Barbara accepted the benefits of the trial court’s division of the
marital estate, she is estopped from challenging that division on appeal. We
therefore overrule Barbara’s issues challenging the characterization and division of
the marital property. We reverse the portion of the final divorce decree denying
without explanation Barbara’s request for a name change, and remand to the trial
court to either grant the requested name change or state a reason in the decree for
not doing so.9 We affirm the remainder of the trial court’s final divorce decree and
QDRO.
/s/ William J. Boyce
Justice
Panel consists of Chief Justice Frost and Justices Boyce and McCally.
9
In light of the resolution of this case, James’s motion to dismiss the appeal in its entirety
is denied.
12