The Fourteenth Court of Appeals released its memorandum opinion in In the Matter of the Marriage of Carolyn Clark Kennedy and Donald Ray Clark Sr. and in the Interest of Donald Ray Clark, Jr. this morning, which illustrates the necessity of getting names right on title documents.
Donald Clark Sr. leased a property in Galena Park, Texas for most of the 90’s where he lived with his four children, including Donald Jr. In 2000, the owner of the property executed a quit claim deed to the property in Donald Jr.’s favor.
Donald Sr. and Carolyn Clark were married in 1996. She and her three children moved into the Galena Park house. A divorce petition was filed in 2012. In the divorce, Carolyn claimed the Galena Park house was community property. Donald Sr. disputed the characterization.
After a bench trial (and some strange procedural twists and turns), the trial court ruled the Galena Park property was community property, ordered the property sold, the proceeds divided as community property, and that Donald Jr. take nothing.
On appeal, Donald Sr. and Jr. argued the trial court erred by mischaracterizing the house as community property because the quit-claim deed vested title in the property to Donald Jr.
The evidence included the original lease dated May 7, 1992. The Lessee was listed as “DONALD RAY CLARK JR.” But it was signed “Donald Ray Clark Sr.” with “JR.” crossed out. The quit-claim deed, on the other hand, executed by the Lessor quit-claims the house “unto the said Donald Ray Clark, Jr., his heirs and assigns…” Donald Sr. testified it was intended for the title to be in Jr.’s name and that Donald Jr. is the owner of the property. Donald Jr. was 16 at the time of the quit-claim deed. Donald Sr. testified he was not asking the court to award him the property. Donald Jr. also testified that he was the owner and that the property should be awarded to him.
However, the evidence also included a General Warranty Deed dated September 29, 2001 in which Donald Sr. claimed to be the executrix of Donald Jr.’s estate. At trial, Donald Sr. denied the purpose of the General Warranty Deed was to correct title from Donald Jr. to Donald Sr. He testified that the purpose of the General Warranty Deed was to obtain a loan and put the Galena Park home up as collateral. Having received the loan proceeds of $39,000, Donald Sr. and Carolyn split the proceeds between them and Donald Sr. did not give any to Donald Jr. The loan was paid off in 2015 before trial.
In 2005, Donald Sr. and Carolyn executed a home equity loan on the house for $37,999.90. Then, on December 16, 2011, Donald Sr., Donald Jr. and Carolyn executed a tax lien deed of trust on the house. Donald Sr. testified the tax lien was taken to pay delinquent taxes on the home and he was paying it back.
Carolyn argued the purpose of the 2001 General Warranty Deed was to “put the public on notice that [the property] was owned by” Donald Sr. and Carolyn. But, the Court of Appeals pointed out, there was no evidence that title transferred from Donald Jr. to either Donald Sr. or Carolyn. Texas law does not restrict the ability of minors under the age of eighteen to own property. The 2001 General Warranty Deed is not signed by Donald Jr. It is signed only by Donald Sr. and Carolyn. In other words, regardless of the parties’ intentions, the quit-claim deed effectively transferred title to the property to Donald Jr.
As such, the Court of Appeals found the trial court erred by finding the house was community property, reversed the judgment of the trial court and the order that the house be sold, and remanded the matter for “consideration of Carolyn’s other grounds for relief and Donald Jr.’s cross-claim.” The remainder of the judgment was affirmed.