Bobby Stoker v. Pauline Stoker

                NO. 12-06-00166-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

BOBBY STOKER,    §          APPEAL FROM THE 307TH

APPELLANT

V.        §          JUDICIAL DISTRICT COURT OF

PAULINE STOKER,

APPELLEE   §          GREGG COUNTY, TEXAS

MEMORANDUM OPINION

            Bobby Stoker appeals the trial court’s final decree of divorce.  Bobby and Pauline Stoker were married on August 28, 1976.  On January 28, 2005, Pauline filed for divorce.  Following a bench trial, the trial court entered a divorce decree dividing their community property.  In two issues, Bobby challenges the trial court’s characterization of the marital residence as community property and its division of the community property.  We affirm.

Characterization of the Marital Residence as Community Property

            In his first issue, Bobby challenges the factual sufficiency of the evidence supporting the trial court’s finding of fact that the marital residence was community property. 

Standard of Review

            Findings of fact by a trial court, such as the characterization of property as community property, have the same force and dignity as a jury’s verdict upon jury questions.  Franco v. Franco, 81 S.W.3d 319, 332 (Tex. App.–El Paso 2002, no pet.); see Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). Findings of fact are not conclusive when a complete reporter’s record is part of the appellate record.  Tucker v. Tucker, 908 S.W.2d 530, 532 (Tex. App.–San Antonio 1995, writ denied); see Middleton v. Kawasaki Steel Corp., 687 S.W.2d 42, 44 (Tex. App.–Houston [14th Dist.] 1985, writ ref’d n.r.e.).  We apply the same standard when reviewing the factual sufficiency of the evidence supporting a trial court’s fact findings as we do when reviewing the evidence supporting a jury’s answer to a special issue.  Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996).

            Property possessed by either spouse on dissolution of marriage is presumed to be community property.  Tex. Fam. Code Ann. § 3.003 (Vernon 2006). A party seeking to have property characterized as separate property carries the burden of proof at trial.  See Cockerham v. Cockerham, 527 S.W.2d 162, 167 (Tex. 1975); Boyd v. Boyd, 131 S.W.3d 605, 612 (Tex. App.–Fort Worth 2004, no pet.).  Clear and convincing evidence is required to establish that property is separate property. Tex. Fam. Code Ann. § 3.003.  Clear and convincing evidence is the degree of evidence necessary to produce in the mind of the trier of fact a firm belief or conviction about the allegations sought to be established.  See In re C.H., 89 S.W.3d 17, 25 (Tex. 2002).

            When we review the factual sufficiency of a failure to characterize property as separate property (a nonfinding), we reverse only when the great weight of the evidence would support, by clear and convincing evidence, an affirmative finding that the property was separate property.  Cf. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001) (citing Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986)).  In our review, we examine both favorable and contradicting evidence as found in the record. See Francis, 46 S.W.3d at 242.  If reasonable minds could differ about the conclusion to be drawn from the evidence, the evidence supporting the nonfinding is not factually insufficient. See Herbert v. Herbert, 754 S.W.2d 141, 144 (Tex. 1988).

Discussion

            The marital residence was presumed to be community property because it was owned by Bobby and Pauline at the time of the divorce.  See Tex. Fam. Code Ann. § 3.003.  Bobby contends that the marital residence was his separate property because it was purchased with funds from a personal injury settlement he received during the marriage.  To establish his claim, Bobby had the burden to show by clear and convincing evidence that the purchase money for the residence was his separate property.  See id.

            A personal injury settlement for injuries sustained during marriage is separate property.  Tex. Fam. Code Ann. § 3.001 (Vernon 2006). However, any recovery for loss of earning capacity during marriage is community property. Id. Bobby admitted that he had no knowledge of whether a portion of his settlement may have been for loss of earning capacity during the marriage.  As such, there was an issue about whether the settlement included both separate and community funds.  When a spouse receives a settlement from a lawsuit during marriage, some of which could be separate property and some of which could be community property, it is that spouse’s burden to demonstrate which portion of the settlement is his separate property.  Cottone v. Cottone, 122 S.W.3d 211, 213 (Tex. App.–Houston [1st Dist.] 2003, no pet.).  Therefore, Bobby was required to trace and clearly identify the portion of the settlement proceeds that was his separate property and then to show that those funds were the source of the purchase money for the residence.  See McElwee v. McElwee, 911 S.W.2d 182, 188 (Tex. App.–Houston [1st Dist.] 1995, writ denied).

            At trial, Bobby testified that he received a personal injury settlement in 1988 and deposited the proceeds in a separate account.  He stated further that he purchased the residence with a portion of the proceeds.  Pauline was asked if the money used to purchase the residence came from Bobby’s settlement, to which she answered “I suppose so.”  This testimony shows that the residence was purchased with a portion of Bobby’s settlement proceeds.  Bobby did not, however, introduce any evidence to show what portion of the settlement was allocated to his loss of earning capacity during the marriage. Therefore, Bobby did not establish what portion of the settlement proceeds was his separate property. 

            When an account contains intermingled separate and community funds, it is presumed that the funds first spent are community funds.  See Hill v. Hill, 971 S.W.2d 153, 158 (Tex. App.–Amarillo 1998, no pet.); Welder v. Welder, 794 S.W.2d 420, 433 (Tex. App.–Corpus Christi 1990, no writ).  This presumption exists until all community funds have been exhausted from the account.  See id.  Absent a showing that all community funds had been exhausted before Bobby and Pauline purchased the residence, any funds spent are presumed to be community funds. See id.  Because Bobby did not establish what portion of the settlement was his separate property, he was unable to show that the account contained only his separate property funds at the time the residence was purchased. Consequently, he failed to overcome the community property presumption.  Because the purchase money for the residence was presumed to be community property, the trial court did not err in its finding that the residence was community property.  Bobby’s first issue is overruled.

Division of the Community Property

            In his second issue, Bobby claims that the trial court’s community property division was unreasonable and thus constituted an abuse of discretion.

Standard of Review

            We review a trial judge’s division of community property under an abuse of discretion standard.  Stafford v. Stafford, No. 12-04-00128-CV, 2005 Tex. App. LEXIS 9940, at *4 (Tex. App.–Tyler Nov. 30, 2005, no pet.) (mem. op.) (citing Murff v. Murff, 615 S.W.2d 696, 698-99 (Tex. 1981)).  It is an abuse of discretion for a trial court to rule arbitrarily, unreasonably, without regard to guiding legal principles, or without supporting evidence.  Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998).  A trial judge does not abuse his discretion if there is some evidence of a substantive and probative character to support the decision or if reasonable minds could differ as to the result.  Stafford, 2005 Tex. App. LEXIS 9940, at *4.  Absent a clear abuse of discretion, we do not disturb a trial judge’s division of community property.  Id. at *4-5 (citing Murff, 615 S.W.2d at 698).

Discussion

            In a divorce proceeding, the trial judge “shall order a division of the estate of the parties in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage.”  Tex. Fam. Code Ann. § 7.001 (Vernon 2006).  Thus, trial judges have wide latitude and discretion in dividing community property.  Schlueter v. Schlueter, 975 S.W.2d 584, 589 (Tex. 1998).  When dividing community property, a trial judge may consider a number of factors including each party's (1) earning capacity, (2) age and physical condition, (3) financial condition, (4) future needs for support, and (5) separate estate.  Stafford, 2005 Tex. App. LEXIS, at *5-6 (citing Murff, 615 S.W.2d at 699).¹

            Bobby and Pauline are both unable to work due to health problems.  Bobby currently receives social security disability benefits of $1,389.00 per month.  In addition, the trial judge found that Bobby’s rental home, unimproved real estate, and IRA (which contained at least $20,000.00) were Bobby’s separate property.  Pauline currently receives $1,372.00 per month in retirement income and was awarded a mineral interest, one item of real estate, and one automobile as her separate property.

            Bobby and Pauline were each awarded an undivided one-half interest in the marital residence.  Bobby was ordered to pay $10,000.00 to Pauline as part of the community property division.  Bobby was awarded all other sums of money in his possession, three automobiles, one tractor, two flat-bed trailers, two stock trailers, one fishing boat and trailer, two calves, and almost all household items and personal effects in his possession.  Pauline was awarded her retirement benefits, all sums of money in her possession, some specific household items in Bobby’s possession, all household items in her possession, and all personal effects in her possession.  Taking into account the totality of the evidence, and the applicable Murff factors, this division is not unreasonable.

            Bobby claims that this division was unreasonable because he was not reimbursed for separate and community funds used to improve Pauline’s separate property real estate.  However, at trial, Bobby introduced no evidence, other than his own testimony, to show that separate funds were used.  Bobby’s uncorroborated testimony is insufficient to establish the separate nature of these funds.  See McElwee, 911 S.W.2d at 188.  Likewise, the amount of community funds expended was never fully established. Moreover, Bobby used portions of Pauline’s separate property to graze and maintain cattle for over ten years without payment of rent.  Bobby admitted that these cattle were his separate property.  Further, Bobby also has separate property that has been improved (presumably with community funds) for which no reimbursement was ordered. Therefore, the trial court did not act unreasonably in denying reimbursement.

            We conclude that there was no abuse of discretion by the trial court in its division of the marital estate.  Bobby’s second issue is overruled.

Disposition

            We affirm the trial court’s judgment. 

                                                                                                     JAMES T. WORTHEN   

                                                                                                                 Chief Justice

Opinion delivered January 3, 2007.

Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.

(PUBLISH)

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¹ Both Murff and Stafford provide extensive lists of additional factors that may be considered.  We have listed only the factors relevant to our analysis.