Non-Parent Standing in a Modification, Docket Sheets, & Immigration Status: Opinions, June 1, 2017

The First District Court of Appeals released a memorandum opinion and a published opinion last Thursday. The published opinion runs forty-one pages and concerns non-parent standing in a SAPCR and the proper standards to apply. The memorandum opinion is notable because of appellant’s allegations regarding her immigration status bearing on the custody determination.

In Rolle v. Hardy, No. 01-16-00402-CV, the mother of the two children at issue had died of cancer. Appellant is the maternal uncle of the children; Appellee is their father, who had previously been named a JMC with the mother. The uncle filed a modification which was dismissed by the trial court. The sole issue on appeal is whether the uncle established he had standing under Tex. Fam. Code §102.004(a)(1), Standing for Grandparent or Other Person.

The trial court had held a hearing on standing at which the uncle, the father, and numerous other friends and family members of both the mother and the father testified. The factual recitation runs about ten pages but it can be summarized by stating a number of people testified as to the merits of the uncle in the children’s life and made serious allegations concerning the father’s fitness for parenting. (It must be said there was testimony in the father’s favor as well)

Under §102.004(a)(1), a grandparent, uncle, or aunt can have standing to file suit requesting managing conservatorship “if there is satisfactory proof to the court that… the order requested is necessary because the child’s present circumstances would significantly impair the child’s physical health or emotional development.” The court of appeals noted that this standing provision is unique to family law because it requires proof of specific facts that may be relevant to the underlying case.

The court of appeals looked to the trial court’s docket sheet as evidence of its determination that the uncle did not meet his burden in establishing standing. The COA determined the trial court applied the wrong standard because the docket sheet indicated that the trial court required the uncle to provide “satisfactory proof that an order appointing him as the sole managing conservator of the child[ren] is necessary because the children’s present circumstances in the care of [the father] would significantly impair [their] physical or emotional development.” (emphasis added by COA) This, the COA held, was not accurate because it did not reflect the uncle’s pleadings or the requirements to establish standing under section 102.004(a)(1). The uncle had to establish the father‘s care of the children as SMC would significantly impair their physical health or emotional development, not that he, the uncle, should be appointed SMC instead.

Additionally, the COA found the trial court focused on the present circumstances of the children and improperly de-emphasized the past actions and circumstances of the parties, particularly the father’s extensive criminal history.

The COA sustained the uncle’s complaint on appeal and remanded for further proceedings in light of the opinion.

In Turrubiartes v. Olvera, No. 01-16-00322-CV, the mother appealed the trial court’s decision awarding the father SMC and PC to the mother. The evidence showed that, inter alia, the mother was not a legal citizen of this country, that she had been living here peaceably for six years, that she had secreted the children from their father, refused to tell him where they were living and denied him access to the children, and that the mother’s brother-in-law approached the father and threatened to kill him or have him killed if he attempted to visit the children. On appeal, the mother argued that the trial court improperly based its ruling on her immigration status but the Court of Appeals found that there was sufficient evidence in the record to support the SMC/PC finding.



Record on Appeal, Defamation, & Ancient Cauldrons: Opinions, May 23, 2017

The First District Court of Appeals released one family law opinion this morning and two published opinions that I just found interesting and wanted to share with you, even though they are not related to family law.

Allen v. Porter, No. 01-16-00823-CV, concerns retroactive child support, but is really a reminder to obtain a record when appealing. The mother’s sole issue on appeal was that the trial court erred in not awarding retroactive child support from the date of the child’s birth. But the mother did not produce a record on appeal which, the Court said, “makes it impossible for the appellate court to determine that the trial court abused its discretion in making the ruling.” The Court affirmed the trial court.

In Johnson v. Phillips, No. 01-15-00173-CV, Houston attorney Michael Phillips wrote a book (Monster in River Oaks) about his own client Dinesh Shah’s sordid infiltration and lengthy abuse of the Johnson family. The family sued Phillips (and his law firm and publisher) for defamation, alleging the book libeled them. Phillips’ motion for summary judgment argued the book constituted a fair report of the 2008 trial. The trial court agreed and granted the summary judgment and the Court of Appeals affirmed.

The published opinion in Hatzenbuehler v. Essig, No. 01-16-00515-CV, has easily the most interesting first paragraph of a special appearance case ever:

This appeal from a special appearance arises out of a dispute between German citizens concerning the provenance of a cauldron discovered in a Bavarian lake. Josef Hatzenbuehler sued Jens Essig, alleging that Essig and others falsely represented the cauldron to be of ancient Celtic origin. With Essig’s assistance, Josef purchased the cauldron at a Swiss bankruptcy sale. Josef alleged that he later discovered that the cauldron was likely created by the Nazis in the 1940’s, making it significantly less valuable.

When Hatzenbuehler sued Essig in Harris County, the trial court granted Essig’s special appearance. And the Court of Appeals affirmed.


Dividing Post-Divorce Bonuses: Loya v. Loya Reverses the 14th Court of Appeals

On Friday, the Supreme Court of Texas issued its opinion in Loya v. Loya, No. 15-0763, which reverses the Fourteenth Court of Appeals’ opinion on dividing post-divorce discretionary bonuses which I blogged about previously.

The case concerned a 2.85m bonus (after taxes and retirement) received by the husband after the divorce. The bonus was received by the husband in 2011, after the divorce was final, for work done in 2010 when, for at least part of the year, he was still married. The dispute turned on whether the MSA partitioned the bonus in its entirety. The trial court (the 257th in Harris County) found the MSA partitioned the bonus completely in favor of the husband and granted summary judgment in his favor. The wife appealed.

The key language from the MSA examined by both the Court of Appeals and the Supreme Court is:

All future income of a party and/or from any property herein awarded to a party is portioned to the person to whom the property is awarded. All future earnings from each party are partitioned to the person providing the services giving rise to the earnings.

The Court of Appeals majority italicized and focused on the second sentence of this language. Specifically, it found an ambiguity between the phrase “future earnings” and the “person providing the services giving rise to the earnings.” The Court of Appeals reasoned that the husband had provided the “services giving rise to the earnings” partially while married and partially after the divorce and thus the bonus should be divided accordingly.

But the Supreme Court agreed with the dissent authored by the Fourteenth’s Chief Justice Kem Frost that the majority was overthinking it. The MSA partitioned “future income and earnings” to the husband. After consulting a couple of dictionaries, the Supreme Court found “the plain meaning of these terms clearly encompasses” the bonus. (Incidentally, Chief Justice Frost’s dissent also relied on several dictionaries, but the Court of Appeals majority relied on none)

When it had decided the MSA did not partition the bonus, the Fourteenth majority engaged in trying to craft a rule for dividing discretionary, post-divorce bonuses. The Supreme Court acknowledged this is an important issue but it need not be reached in this case because the MSA effectively partitioned the bonus. Thus it would appear the question remains unanswered for now.

Default Does Not Mean Devoid of Evidence: Opinions, April 27, 2017

This morning the Fourteenth Court of Appeals released its memorandum opinion in Lucio v. Lucio, No. 14-15-00951-CV which concerns the minimum amount of evidence necessary for a division of the marital estate in a default divorce (and which is a companion to a similar opinion from the First Court of Appeals in Colmenero v. Colmenero that I previously blogged about).

Virginia and Victor were married in 1982 and Virginia filed her original petition for divorce in July, 2015. Victor did not file a timely answer. At the hearing, the following testimony from Virginia constituted the entirety of the evidence regarding the assets and liabilities of the estate:

Q. Okay. You have set forth in the decree a proposed division of your property and debts?
A. Yes.
Q. And you believe that the division is fair and equitable?
A. Fair, yes.
Q. And just and right?
A. Yes.
Q. And you’re asking the Court to approve that division as part of your divorce, correct?
A. Correct

Virginia had filed but not admitted to evidence a proposed decree assigning community property and debts between the parties. But the proposed decree did not include any values for the community property or the community estate in its entirety, nor did it list any amounts for outstanding debts. “In short, the trial court received no evidence regarding the value of the community assets or liabilities.”

The trial court entered a final decree which divided the estate but did not make any findings as to the values of any assets or liabilities. Victor subsequently filed an answer, a motion for new trial, and then a notice of appeal.

On appeal, Victor argued the evidence was legally insufficient to support the division. The Court of Appeals agreed, noting that even in a default, the petitioner must still present evidence to support the material allegations in the petition and that the only evidence in the record in support of the division was Virginia’s testimony that the division proposed was fair, just, and right. The Court of Appeals reversed and remanded for further proceedings.

Opinions, April 25, 2017: Post-Judgment Temporary Orders Pending Appeal

The First District Court of Appeals released its memorandum opinion in In re Christensen, No. 01-16-00893-CV, this morning concerning post-judgment temporary orders pending appeal under TFC 6.709.

Christina and Troy divorced. After a two-day bench trial, the trial court signed a final decree which awarded Christina stocks and funds in various accounts and ordered Troy to pay a portion of Christina’s attorney’s fees (in the amount of $20,000).

After Troy timely filed his notice of appeal, Christina moved for post-judgment temporary orders pending appeal under TFC 6.709. She requested the trial court, inter alia:  order Troy to 1) pay reasonable appellate attorney’s fees into the registry of the court to be payable to Christina upon Troy’s pursuit of an unsuccessful appeal or, in the alternative, grant a judgment against Troy for reasonable appellate attorney’s fees conditioned upon his pursuit of an unsuccessful appeal; 2) post a bond to secure his compliance with the terms of the decree; and 3) pay her temporary spousal support pending appeal.

Troy argued the motion was merely an attempt to penalize him for appealing, section 6.709 did not authorize prepayment of appellate attorney’s fees into the registry of the court or posting a bond, and payment of temporary spousal support was not justified.

The trial court granted Christina’s motion, awarding her $50,000 total ($30,000 for the district court of appeals and $20,000 for the Texas Supreme Court) if Troy unsuccessfully appealed and required him to pay these amounts into the court registry. The trial court also ordered Troy to post a bond of $275,000 (or its cash equivalent) to protect Christina against potential loss of property or property rights during the course of the appeal.

Troy filed a petition for writ of mandamus, alleging five issues. which the Court of Appeals addressed out of sequence.

The Court of Appeals sustained Troy’s second and third issue concerning prepayment of appellate fees into the registry of the court. Citing Halleman v. Halleman, No. 02-11-00238-CV, 2011 WL 5247882 (Tex.App.–Fort Worth, Nov. 3, 2011, orig. proceeding), the Court of Appeals found that section 6.709 does not authorize and the trial court abused its discretion in ordering Troy to prepay the attorney’s fees into the registry of the court because the appellate attorney’s fees will not be payable to Christina “if at all” until the appellate proceedings are final.

In his fourth issue, Troy argued the trial court abused its discretion by ordering him to post a bond in the amount of $275,000 (which included the $50,000 of appellate attorney’s fees). Christina had asserted in her motion for temporary orders that the bond should be sufficient to cover the value of the property as determined by the trial court at rendition plus interest. She also asked the trial court to require Troy to provide statements for the accounts and enjoin him from taking certain actions regarding the accounts until the appeal was final.

At the hearing on Christina’s motion, the parties testified regarding the accounts awarded in the divorce. Troy testified he had control over the accounts, Christina did not; Christina testified that Troy had not accounted for over $200,000 of assets awarded to her and that Troy had traded or sold about $300,000 in stocks, half of which were awarded to her. The opinion does not indicate Troy disputed Christina’s testimony on this point, but he did testify that “issues existed regarding the documents needed to transfer these accounts to Christina.” The Court of Appeals found that Troy presented no authority that the trial court lacked authority to order the bond and the trial court did not abuse its discretion in ordering it.

In his fifth issue, Troy contested the temporary monthly spousal support award of $3,500 until the appeal is final because, according to him, he does not have the financial ability to pay it, the calculation of the amount was flawed, and the support obligation “was part of the property division improperly disguised as spousal support.” He testified he had to borrow $25,000 from family to keep afloat, he could not afford either the $20,000 for Christina’s attorney’s fees ordered in the decree, nor the $250,000 bond or monthly spousal support. He also testified that he earned $214,000/year and had received a $24,000 bonus this year. His FIS indicated his net monthly income of $10,630 and monthly expenses of $13,638. Christina also testified that her means were significantly less than Troy’s. The Court of Appeals found no abuse of discretion in the award of temporary monthly support and overruled Troy’s fifth issue.

Finally, taking the first last, the Court of Appeals overruled Troy’s first issue in which he argued the temporary orders were not intended to protect Christina and her property, but to “unjustly penalize [him] for asserting his rights” to appeal. The Court of Appeals found the temporary orders do not prevent him from pursuing his appeal.

Opinions, April 13, 2017: Binding Post-Divorce Arbitration

Last Thursday, the Fourteenth Court of Appeals released two published opinions and the latest installment of the Reynolds Saga.

In re S.M.H. and W.H.H., No. 14-16-00566-CV, concerned the trial court’s vacatur of a binding arbitration award. When the parties divorced, father agreed to pay contractual alimony and the children’s private school tuition and other costs for extracurricular activities. The parties had executed an agreement incident to divorce, which was incorporated into the final decree.

Disputes arose over the interpretation of the AID. The mother filed a petition with the trial court to clarify the terms of the AID and to enforce obligations the father had allegedly failed to honor. The father filed a counter-petition, seeking a modification of his possession.

The parties attended mediation, which led to a partial settlement. They also signed a Rule 11 agreement to submit to arbitration. Under this Rule 11, the mediator would serve as arbitrator; the parents would both make a proposal and the arbitrator would pick one which would be the award, without changes (i.e. “baseball style”); the issues submitted to the arbitrator would be support and possession; the arbitrator’s ruling on support would be binding, but not her ruling on possession. Specifically, the arbitrator would meet with the children privately and then propose a “mediator’s proposal” on the terms of holiday schedules and long-distance visitation. These Rule 11 terms were incorporated into an Arbitration Agreement signed by the parties.

At the conclusion of arbitration, the arbitrator accepted mother’s proposal and drafted an award. The award contained two paragraphs which addressed the issue of possession in order language, not in the form of a mediator’s proposal. These paragraphs evidently ordered holidays to be split between the parents, that terms should be added to the decree for long distance visitation as father was planning to move to a different city, and father should participate in therapy as a condition of his possession.

The mother moved in the trial court to confirm the award and the father moved to vacate it. The trial court found the arbitrator had exceeded her authority and vacated the award in full. The mother objected to the vacatur, arguing the trial court should at least have confirmed the support provisions and severed the possession portion, but the trial court overruled her.

The case proceeded to trial on the merits, but the only matter heard was the father’s counter-petition to modify the terms of his possession. The parties abandoned all other pending claims. At the close of the evidence, the trial court found there was a change in circumstances and granted the father long-distance visitation. A final judgment modifying the decree was signed.

The mother appealed, asserting two issues: she argued the trial court erred in not confirming the support portion of the arbitration award and erred by proceeding to trial on the father’s counter-petition for modification.

To succeed on her first issue, under CPRC 171.091, the mother had to show that the parties submitted the support issue to arbitration but not the possession issue and that the removal of the possession portion of the award could be accomplished without affecting the support portion. The Court of Appeals found the mother established both.

The father made many arguments on appeal in an apparent effort to throw everything at the wall to see what stuck (e.g., that the arbitration award was excessive; the award was properly vacated because of the arbitrator’s partiality; the award would violate Texas law; and there was no meeting of the minds on the Arbitration Agreement). The Court of Appeals overruled each of these arguments and remanded to the trial court for a hearing on whether confirmation of the modified award is in the best interest of the children.

The mother’s second issue–that the trial court erred by proceeding to trial on the merits on the father’s counter-petition for modification of possession–was overruled by the Court of Appeals as well. First the mother argued that once an arbitration award is vacated, the trial court has no discretion but to order the parties back to arbitration. The COA disagreed, finding the trial court was not precluded from proceeding to trial. Secondly, the mother argued she was never served with citation of the father’s counter-petition for modification, but the COA found she waived the objection by not objecting when she made her appearance. Thirdly, the mother complained the trial court denied an oral motion for continuance made just before trial. As mother’s oral motion for continuance did not comply with Rule 251, the trial court did not abuse its discretion in denying it.

In summary, the COA reversed the portion of the trial court’s judgment which vacated the arbitration award and remanded the case for the trial court to determine whether confirmation of a modified award would be in the best interest of the children.

In In re McPeak, No. 14-17-00104-CV, the Court of Appeals granted a mandamus on two separate grounds. In February 2016, the mother and father separated and the mother moved with the children from the marital home in Brazoria County to Thorndale, Texas, about 40 miles northeast of Austin. Father filed for divorce in Brazoria County in October 2016. The parents signed agreed temporary orders, though mother was not represented by counsel and father was. The trial court approved the agreed temporary orders on November 22, 2016, which required the mother to move the children to Brazoria County or a contiguous county by January 1, 2017. If mother failed to do so, the children would be turned over to the father’s possession.

Mother retained counsel and filed a motion to set aside the temporary orders and, on December 8, a motion to modify the temporary orders, requesting the orders be set aside or at least that the geographic restriction be modified to include the mother’s new county of residence. On December 28 the mother also filed a motion for the court to confer with the oldest child (age 13) pursuant to TFC 153.009.

The trial court heard the motions on January 18, 2017 but stopped the hearing because the mother had not filed an affidavit under TFC 156.102 (Modification of Exclusive Right to Determine Primary Residence of Child Within One Year of Order). On January 19, the trial court signed an order denying the motion to confer and an order declining to consider further evidence and testimony. Mother filed a petition for writ of mandamus.

The Court of Appeals sustained the mother’s challenge on the affidavit issue because 156.102 applies to final orders, not temporary orders under 105.001. This imposed a higher burden of proof on the mother than the law required. The father did not deny the trial court erred in applying 156.102 instead of 105.001, but argued the court didn’t abuse its discretion because it reached the right result, if for the wrong reason. The Court of Appeals did not agree with the father and found the mother was prejudiced by the error for two reasons: the trial court stopped the hearing before she could present all her evidence and second, absent the trial court’s error, the mother might have met her lower burden of proof under 105.001.

The Court of Appeals also found that the trial court improperly denied her request under 153.009 to confer with the child because the statute is mandatory, not permissive.

Long-time readers of this blog should recognize Mr. and Ms. Reynolds from previous posts. The Court of Appeals’ latest memorandum opinion begins, “These former spouses appear regularly on our docket. In this latest chapter of their long-running dispute…” Ms. Reynolds’ issues on appeal this time are: 1) that the trial court erred in not granting a motion to compel Mr. Reynolds to provide financial documents; and 2) the trial court erred in granting Mr. Reynolds’ motion for summary judgment on his affirmative defense of collateral estoppel. On the first issue, the Court of Appeals stated Ms. Reynolds’ “subjective belief” that Mr. Reynolds was essentially hiding assets was not sufficient to demonstrate the trial court abused its discretion in denying the motion to compel. On the second issue, the Court of Appeals found Mr. Reynolds had established his affirmative defense of collateral estoppel because the issue of the division of the community estate’s interest in bonuses and other financial accounts was litigated during the original property division in 2009. Ms. Reynolds’ issues were overruled.


Opinions, April 11, 2017: Always Get Findings of Fact & Conclusions of Law If You’re Going to Appeal.

This morning the First District Court of Appeals released its published opinion in Brown v. Wokocha, No. 01-15-00759-CV, which underscores the necessity of obtaining findings of fact and conclusions of law in trial court if you’re going to appeal.

Brown and Wokocha married in 2004 and separated in 2011. Brown filed for divorce in August 2013. Wokocha countersued, alleging fraudulent transfer, intentional infliction of emotional distress and civil conspiracy, as well as breach of fiduciary duty and fraud claims against Brown and various business entities. Wokocha also added claims against Brown’s three adult daughters, alleging Brown had created business entities in her daughters’ names with community funds in an effort to defraud the community. The daughters’ motion for summary judgment was granted. The parties tried the case to the bench and the trial court entered a decree which Brown alleges on appeal improperly granted Wokocha a disproportionate share of the estate.

The decree does not state it is awarding Wokocha a disproportionate share of the estate; it merely says it is granting a just and right division. The trial court did not make any findings as to the value of any claim or asset and the record (limited per TRAP 34.6) did not include a request from Brown for findings of fact and conclusions of law. As such, the record does not contain findings on the values ascribed by the trial court to any community asset or liability or to Wokocha’s reimbursement claims or the percentage of the estate each party received in the division. Without this information, the Court of Appeals found it could not conclude the trial court abused its discretion.

Brown also challenged the trial court’s characterization of property. Brown alleges the trial court erred by finding three life insurance policies and three business entities were community property instead of separate property. Wokocha argued Brown could not establish the separate character of the life insurance policies because they were opened during the marriage (in her daughters’ names with her as the beneficiary) and maintained with community funds. Similarly, Wokocha argued the business entities were created during the marriage with community funds. The Court of Appeals ruled that even assuming the trial court erred in characterizing the property, Brown had not established the error materially affected the division of the estate because she did not request findings of fact and conclusions of law. Without findings, the COA could not discern the values the trial court gave to the property or what percentage of the estate the assets represented.

In her third issue, Brown argued the trial court erred by failing to award attorney’s fees to the attorney who represented her daughters and the business entities in trial court. Brown argues Wokocha improperly added these parties to the divorce as third-party defendants and thus they were entitled to a fee award. The COA found no support for Brown’s claim that third-party defendants in a divorce are entitled to an attorney’s fee award (Not to mention the fact that I’m not sure how Brown had standing to assert this issue on behalf of the third parties). The issue was overruled.