Wasting $800,000 of Community Assets: Opinions, Jan. 30, 2018

This morning the Fourteenth Court of Appeals released its memorandum opinion affirming a divorce decree in Walzel v. Walzel, No. 14-16-00637-CV, over the husband’s challenge of the trial court’s finding of wasted community assets in the amount of approximately $800,000.

Husband and wife married in 1968. W filed for divorce in June 2014. The property division was tried to the bench; H was pro se at trial.

At the time the divorce was filed, the parties were retired. H had left the marital home in October 2013. W was disabled and could not leave the home or even take care of herself. After leaving, H lived with a girlfriend at a different residence between October 2014 and August 2015.

At trial, H testified that the parties bought a vacant lot in a planned development in Belize in 2010. He also admitted to withdrawals from his retirement account of approximately $703,000.00. He further admitted to withdrawals from non-retirement financial accounts. When asked where the money went, he testified that the money was “used for our pleasure, bills. Everything we did was for our estate. Everything we ever did was for us to live a better life and that’s where it all went.” W’s expert, a CPA hired to attempt to trace the approximately $800,000 in total withdrawals, testified that H did not provide her with or refused to provide her with sufficient documents. H did not call a financial expert to testify or any witnesses regarding the withdrawals.

After trial, the trial court signed a decree which divided the marital estate (awarding H the Belize property) and found H had wasted community assets in the amount of approximately $800,000 and charged H with the wasted funds “as part of the marital property division as if the estate was reconstituted to include the funds that were wasted.” H appealed.

In his sole issue, H argued the trial court abused its discretion because the evidence was legally insufficient. Specifically, H argued that W’s expert CPA based her analysis on assumptions not supported by evidence. The Court of Appeals found that it did not need to review these assumptions because they had no impact on the CPA’s ultimate opinion that she could not account for the unexplained withdrawals. Further, H himself admitted in his testimony that he withdrew the funds and did not adequately explain what he did with them. The Court of Appeals affirmed the trial court.

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The Spousal Maintenance Presumption: Opinions, Jan. 4, 2018

This morning, the First Court of Appeals released its memorandum opinion in Arellano v. Arellano, No. 01-16-00854-CV, in which the husband appealed the trial court’s spousal maintenance award. The COA affirmed.

Husband and wife were married in 2005. Husband filed for divorce in February 2015. After bench trial, the trial court ordered Husband to pay spousal maintenance in the amount of $1,305.43/mo for five years. Husband appealed, arguing Wife failed to rebut the presumption against spousal maintenance and the trial court erred in awarding spousal maintenance for the maximum duration available under the statute.

Wife testified that when she was 16, in 1999, she moved in with Husband and her step-son. Husband prohibited her from working outside the home and paid for all the bills and food while she handled housecleaning and cooking and attending parent-teacher meetings for her step-son. During the marriage, she finished high school, earned credits at Houston Community College and started classes at the Coleman College for Health Sciences to become a surgical technologist. Wife further testified that she nearly finished the surgical-technology program but Husband prevented her from doing so. After Husband filed for divorce, Wife waited tables at a restaurant, and by the time of trial was working at Babies R Us, earning $1,553.57/mo, and that her monthly expenses were between $3,800 and $3,389 [sic]. She testified that she had researched several programs to find better jobs but because she could not attend them full time, it could take her five years to complete them. Additionally, earlier in the divorce, CPS had required her to have full time employment. On cross examination, she testified that since working at Babies R Us, she had applied for one other job but had not heard back.

Husband testified that he didn’t do anything to stop her from attending or finishing school. He claimed she missed school because she was drunk and that, on one occasion, he stopped her from going to school because she was drunk.

The presumption against spousal maintenance found in TFC section 8.053 provides that spousal maintenance is not warranted unless the spouse seeking maintenance has exercised diligence in 1) earning sufficient income to provide for his/her minimum reasonable needs; or 2) developing the necessary skills to provide for the spouse’s minimum reasonable needs during a period of separation and during the time the divorce is pending.

The COA found that there was evidence in the record that, since the age of 16, Wife had tended to the house, prepared meals, and cared for the step-son and the couple’s children. Also, during the marriage, she attempted to bolster her education but Husband prevented her from doing so. The trial court was free to resolve the conflict in testimony over whether Husband allowed her to work during the marriage in Wife’s favor. The COA found the trial court did not abuse its discretion in finding Wife overcame the presumption in 8.053 because she exercised diligence in earning sufficient income but her efforts were hindered by her lack of education. She was also hindered in developing skills by CPS’s requirement for her to have full-time employment.

Husband also challenged the trial court’s awarding of spousal maintenance for five years, the maximum available under the statute. The COA found that Wife testified that to earn more money and get a better job, she would need to start an educational program that would take five years to complete. As such, there was factual and legally sufficient evidence to support the award.