Barbara Ann Doughty v. Stephen William Doughty ( 2006 )

TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-04-00348-CV
Barbara Ann Doughty, Appellant
v.
Stephen William Doughty, Appellee
FROM THE DISTRICT COURT OF BELL COUNTY, 146TH JUDICIAL DISTRICT
NO. 181,547-B, HONORABLE RICK MORRIS, JUDGE PRESIDING
MEMORANDUM OPINION
Appellant Barbara Ann Doughty, now Barbara Ann Leininger,1 appeals from the trial
court’s final decree of divorce. She complains that the court erred in awarding appellee Stephen
William Doughty a disproportionate share of the community estate and in the standards it used to
value the equity the parties owned in certain property. We affirm the trial court’s decree of divorce.
The parties married in 1984 and had a son, J.J. In 1991, the parties bought and lived
in a house on ten acres under a contract for deed with the Texas Veteran Land Board. In June 2000,
Leininger took J.J., then almost sixteen years old, and moved out of state. After Leininger filed for
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The notice of appeal was filed by appellant as Barbara Ann Doughty, the name under which
she filed suit. In the divorce decree, the trial court ordered appellant’s last name changed to
Leininger. For clarity, we will refer to appellant as Leininger and to appellee as Doughty.
divorce in July 2000, Doughty filed a proposed division of the community estate, in which he stated
that the parties owed about $15,000 on the real property, which he said was worth an estimated
$75,917; he asked to have the real property awarded to him in the divorce. In her proposal,
Leininger valued the real property at $135,000 and asked that it be divided between the parties.
The trial court held a final hearing in March 2003. Leininger did not appear in
person, appearing only through her attorney. Almost a year later, the divorce decree was signed and
filed, awarding the real property to Doughty and giving Leininger a $4,500 equitable lien against the
property. Doughty was ordered to sign a promissory note for $4,500, plus ten-percent annual
interest, and to make monthly payments on the note. The court made Doughty responsible for the
outstanding balance on the real estate loan as well as half of the $22,893.35 owed by the parties on
nine credit cards. Leininger filed a motion for rehearing, complaining that she was not present at the
hearing; her former attorney never arranged to have the property appraised;2 and she was not awarded
a fair and equitable share of the community estate. The trial court overruled her motion.
Leininger complains on appeal that the trial court applied a different, erroneous
valuation method to the real property in question simply because it was bought under a contract for
deed. She argues that the court should have applied the same standard in evaluating the equity she
and Doughty had in the property as if it had been bought through warranty deed. She contends that
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Leininger’s first attorney filed a motion to withdraw about a week before the trial court
signed the decree. Leininger’s second attorney filed a motion to withdraw shortly after the trial court
overruled the motion for new trial, the same day he filed a request for findings of fact and
conclusions of law. The trial court never made findings and conclusions, and Leininger did not file
notice that they were overdue. When a trial court does not make findings of fact and conclusions
of law, we will presume that the court considered the entire circumstances of the parties in making
its division. Kimsey v. Kimsey, 965 S.W.2d 690, 704 (Tex. App.—El Paso 1998, pet. denied).
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by accepting Doughty’s valuation of their equity, rather than her proposal, which valued the house
at $135,000, the trial court “grossly misevaluated” the community’s equitable interest in the property.
In granting a divorce, a trial court must divide the community estate “in a manner that
the court deems just and right.” Tex. Fam. Code Ann. § 7.001 (West 1998); Wilkerson v. Wilkerson,
992 S.W.2d 719, 722 (Tex. App.—Austin 1999, no pet.). We start with a presumption that the trial
court properly exercised the broad discretion it is given to divide the community estate and will
reverse only if we find a clear abuse of discretion. Murff v. Murff, 615 S.W.2d 696, 698-99 (Tex.
1981). A trial court abuses its discretion if the property division is manifestly unjust and unfair,
O’Carolan v. Hopper, 71 S.W.3d 529, 532 (Tex. App.—Austin 2002, no pet.), but the estate need
not be divided equally as long as the division is equitable and justified by the circumstances. Murff,
615 S.W.2d at 698-99; O’Carolan, 71 S.W.3d at 532. The complaining party must show that the
trial court abused its discretion in the overall division of the entire estate. See Murff, 615 S.W.2d
at 699-700. A buyer under a contract for deed risks losing the property and all payments made up
until forfeiture if he fails to make even one contractual payment. Holmans v. International Mobile
Tracking Sys., No. 03-95-00240-CV, 1996 Tex. App. LEXIS 4247, at *3-4 (Tex. App.—Austin Sept.
25, 1996, no writ) (not designated for publication) (citing Sanchez v. Brandt, 567 S.W.2d 254, 259
(Tex. Civ. App.—Corpus Christi 1978, writ ref’d n.r.e.)).
Leininger did not appear at the hearing, and her attorney said, “She was not able to
come this morning from out of state.”3 Leininger presented no evidence other than her proposal for
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Leininger’s attorney stated that Leininger had been informed of the hearing and told that
she should attend. At the hearing on Leininger’s motion for new trial, Doughty’s attorney reminded
the trial court that throughout the case, hearings had been postponed and reset about six times
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the division of property. Doughty appeared at the hearing and testified about the community estate,
saying he had not spoken to Leininger or seen J.J. since the parties separated three years earlier.
Doughty was still living in the house he and Leininger bought in 1991. He testified that the total
purchase price for the property was $23,500, paid by $4,500 in cash and a $19,000 contract for deed
to be paid over thirty years at about $140 a month; the parties had made about $5,000 in payments,
plus the $4,500 down-payment, and still owed almost $16,000 on the loan. Doughty had been
making the house and tax payments himself since Leininger left in June 2000. He also said that the
property might be condemned due to possible airport expansion in the future. Doughty testified that
when Leininger left, she “took everything that had a plug. She took every picture in the house. She
took stuff that I took with me when I left home when I was a teenager. She took—she took
everything out of that house.” Doughty denied that the credit card debts should be considered
community debt, although he agreed that they were incurred during the marriage. He testified that
Leininger had denied having the credit cards and had hidden them from him during the marriage.
He said “[a]nything that she purchased on those credit cards other than food never came in to the
house,” but acknowledged that the cards were used to buy items for Leininger and J.J.
After Doughty’s testimony concluded and Leininger tendered her proposed property
division, Doughty’s attorney noted that the parties disagreed on the value of the real property. He
said that Doughty used the tax appraised value in his proposed property division, but that it was filed
before the attorneys learned that the real estate was under a contract for deed. Doughty’s attorney
because Leininger could not attend or had not appeared. Leininger’s new attorney responded that
Leininger claimed “that she never received notice of those hearings.”
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said that after researching the issue, the value as set by the Board “is nominal until you get at least
halfway through the note” and that “there’s another four or five years before there would even be any
market value to place on a Contract for Deed interest.” Both attorneys seemed to agree that because
the house was under a contract for deed, the parties had only an equitable interest in the property and
that appraisers “can’t tell us exactly what it’s worth.” Doughty’s attorney explained that appraisers
could not tell whether the house was worth anything above the tax appraisal or whether that appraisal
was too high due to the “condemnations and restrictions placed” on the property, which he said could
not be sold without the City of Killeen’s approval. Leininger’s attorney agreed that the house was
under threat of condemnation under Killeen’s ten-year expansion plan, saying, “[T]here’s not any
formal letters on it, but it’s been mentioned in City Council meetings.” Doughty’s attorney said,
“[T]he only thing I can think to do is to value the total community investment in the property now
without a value on the property which would be around between eight and nine thousand dollars if
you take purchase price plus current balance on the property and then divide that up.”
During his closing, Doughty’s attorney asked the trial court to award each party the
personal property in their possession, to award the house to Doughty, and to award Leininger
reimbursement for “whatever equitable interest [she] may be entitled to” through “some type of
judgment against the house if, as, and when title is received and when it’s sold so that it can’t be
cleared until her judgment is exercised.” The trial court said, “You’ve got potentially a huge equity
in this house,” and Doughty’s counsel replied, “But the equity would only result from 19 more years
of purchase unless he went out and paid it off early.” Leininger’s attorney said Leininger wanted
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“some sort of cash reimbursement for the interest that she has in all of these payments that have been
made over the years that they were married.”
We hold that Leininger has not shown that the trial court abused its discretion in
making its property division. Although Leininger’s attorney stated that Leininger had been informed
of the hearing and told she should appear, she did not attend the hearing and presented no evidence
except for her proposed property division. The only evidence on the value of the real estate was
from the parties’ proposals for property division. Doughty’s proposal valued the real property at
almost $76,000, based on a tax appraisal, and Leininger’s proposal valued the property at $135,000;
Leininger presented no evidence to support her estimated value. Although Doughty’s attorney
admitted that tax appraisals tend to be lower than true market value, he also stated that the parties
had been unable to get an accurate appraisal due to contract-for-deed complications and the possible
condemnation issues. Indeed, both parties seemed to be uncertain how to value the property due to
the contract for deed, under which the parties’ had only an equitable interest that was somewhat
uncertain, requiring an assumption that all payments would be made for the remaining seventeen
years of the contract. See Holmans, 1996 Tex. App. LEXIS 4247, at *3-4 (if parties default on
contract for deed, seller may take back property and retain payments made under contract). The
parties had paid between $8,000 and $9,000 against the loan on the property, which was threatened
with condemnation and under certain restrictions by the City of Killeen.
Doughty testified that Leininger took all of the valuable items from the house when
she moved out. He was ordered to pay about $11,500 in credit card debt that he testified he knew
nothing about, although he admitted that the cards had been used to buy items for Leininger and J.J.
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Leininger did not present evidence about how she arrived at her valuation of the real property, the
value of the items she took from the house or that Doughty retained, or the credit card debt. Under
the circumstances of this case, we hold that Leininger has not shown that the trial court abused its
discretion in making its property award. See Murff, 615 S.W.2d at 699-700. We affirm the trial
court’s decree of divorce.
__________________________________________
David Puryear, Justice
Before Chief Justice Law, Justices Patterson and Puryear
Affirmed
Filed: April 21, 2006
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