Kathyrn Lynn Michael v. Gary Scott Godwin ( 2004 )

Reversed and Remanded and Memorandum Opinion filed December 14, 2004

Reversed and Remanded and Memorandum Opinion filed December 14, 2004.

In The

Fourteenth Court of Appeals

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NO. 14-03-00741-CV

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KATHRYN LYNN MICHAEL, Appellant

V.

GARY SCOTT GODWIN, Appellee

On Appeal from the 308th District Court

Harris County, Texas

Trial Court Cause No. 00-53872

M E M O R A N D U M   O P I N I O N

Appellant Kathryn Lynn Michael brought a declaratory judgment and partition action against her former husband, appellee Gary Scott Godwin, alleging that Godwin possessed community property that was not divided in their divorce.  The trial court instructed a verdict in favor of Godwin. Michael appeals, arguing in two points of error that the trial court erred in (1) instructing a verdict against Michael and (2) striking certain portions of her pleadings.  We reverse and remand for a new trial.

Factual and Procedural Background

Michael and Godwin were divorced on February 7, 1997.  In September 2000, James Godwin (“James”), who is Gary Godwin’s father, informed Michael that Godwin had stored a large amount of cash and gold at James’s house while the couple was separated.  Michael subsequently brought an action against Godwin on October 19, 2000, seeking a declaratory judgment that certain assets in Godwin’s possession were community property not divided on divorce and partition of same.  The assets included in Michael’s third amended petition are the following:  $1 million cash; $160,000 in gold; an $84,898.57 promissory note payable to Godwin; nearly $200,000 of undisclosed accounts receivable that were payable to a company owned by Godwin; and a $40,000 promissory note payable to James.  At a pretrial hearing, the trial court struck Michael’s pleadings as to the undisclosed accounts receivable and the $40,000 promissory note on the grounds that both had been divided in the divorce.  In May 2003, a trial was held as to the other three assets.  After both parties rested, Godwin moved for an instructed verdict, which the trial court granted.

Instructed Verdict

In her first point of error, Michael argues that the trial court erred in instructing a verdict in Godwin’s favor.  A court may direct a verdict for a defendant (1) “when a plaintiff fails to present evidence raising a fact issue essential to the plaintiff’s right of recovery” or (2) “if the plaintiff admits or the evidence conclusively establishes a defense to the plaintiff’s cause of action.”  Prudential Ins. Co. of Am. v. Fin. Review Servs., Inc., 29 S.W.3d 74, 77 (Tex. 2000).  In reviewing a directed verdict, an appellate court “consider[s] all of the evidence in a light most favorable to the party against whom the verdict was instructed and disregard[s] all contrary evidence and inferences.”  Szczepanik v. First S. Trust Co., 883 S.W.2d 648, 649 (Tex. 1994).  “If there is any conflicting evidence of probative value on any theory of recovery,” the directed verdict should be reversed and the case remanded for jury trial. Id.  Because there was evidence of probative value presented at trial tending to establish the existence of the cash, gold, and promissory note, the trial court erred in granting an instructed verdict.

James testified at trial that in January 1995 he walked into Godwin’s office and saw stacked inside Godwin’s safe a plastic bag containing gold and a large amount of cash.  James again saw the cash and gold inside a safe in July 1995 when Godwin came to live with James after Godwin and Michael separated.  James also testified that on at least two occasions Godwin told him that he had about $1 million in cash and $160,000 in gold.  On one of these occasions, Godwin said that he would not have to pay any money to Michael in the divorce because “all of his money was right there” and that it was “free money.”  James was familiar with what gold and $1 million cash looked like because prior to the year 2000 or “Y2K” computer scare, he had stored $1 million in cash and $450,000 in gold in two safety deposit boxes of his own.

James’s wife, Debra, testified at trial that in the fall of 1995, Godwin told her that he was “watering down his assets” and that “he had purchased a substantial amount of gold.”  Debra, who worked as a stockbroker, set up two accounts for Godwin in his daughters’ names; Godwin told Debra that Michael “was not to be aware of these accounts being set up.”  James and Debra both testified that in December 1998—almost two years after Godwin’s and Michael’s divorce—Godwin told them that in a few months the statute of limitations would run and he would be free to spend his money.

Michael also put on evidence showing that Godwin had a potential source for such a large amount of cash.  James owned a successful company called Godwin Machine Works.  After James retired in 1993, Godwin took over as president of the company.  James returned in 1998 after suspecting questionable accounting activity at Godwin Machine Works.  James explained that Godwin Machine Works generated about $5,000 a week of scrap metal that was purchased in cash by another company.  James said that he found no entry for these monies in his investigation of the books of Godwin Machine Works.  During Godwin’s tenure as president, Godwin Machine Works had sold some of its used machines for cash to a company called VN, but according to James, this cash also never made it into the books of Godwin Machine Works. Finally, James testified that Godwin received cash payments from a neighboring machine shop in return for permission to dispose of its waste oil in the Godwin Machine Works waste oil barrels.

As evidence of the existence of the $84,898.57 promissory note that was allegedly community property, Michael offered a letter both addressed from and signed by Godwin that refinanced a promissory note for that amount.

Because Michael presented evidence of probative value as to the existence of the $1 million cash, the $160,000 gold, and the $84,898.57 promissory note, and because we must disregard all contrary evidence and inferences, we hold that the trial court erred in instructing the verdict in Godwin’s favor.  Accordingly, we sustain Michael’s first point of error.

Motion to Strike

In her second point of error, Michael argues that the trial court erred in striking her pleadings as to the undisclosed accounts receivable for Godwin’s company called PLS and the $40,000 promissory note payable to James.  The trial court struck the pleadings at the pretrial conference a week before trial.  The record provided to this court contains Godwin’s April 15, 2002 “Opposed Motion to Strike Pleading.”  This motion addresses Michael’s first amended petition, which only sought partition of the cash and gold.  The motion to strike upon which the pretrial conference was based apparently addresses Michael’s third amended petition, but the later motion to strike is not in the record.  Further, there is no written order granting a motion to strike, and the judge’s ruling at the pretrial hearing is somewhat unclear.^[1]  Because we do not have the motion to strike that was the subject of the pretrial hearing and because there is no written order striking any of the pleadings, we are unable to adequately review Michael’s contention that the trial court erred in granting Godwin’s motion.  See Davis v. Med. Evaluation Specialists, Inc., 31 S.W.3d 788, 795 (Tex. App.—Houston [1st Dist.] 2000, pet. denied) (overruling appellant’s request to reverse summary judgment when summary judgment motion was not included in appellate record).  Accordingly, we overrule Michael’s second point of error.

For the reasons stated above, we reverse the instructed verdict and remand for a new trial.

/s/      Leslie Brock Yates

Justice

Judgment rendered and Memorandum Opinion filed December 14, 2004.

Panel consists of Justices Yates, Fowler, and Guzman.

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^[1]  After both parties made arguments regarding the motion to strike, the trial judge merely stated that PLS, the company to which the undisclosed accounts receivable were payable, was “off the table.”  In response to Godwin’s counsel asking if the ruling also applied to the $40,000 note, the judge said, “The note, yes.”