Granger v. Granger

• Decision Date: 26 September 2007
• Docket Number: No. 12-06-00147-CV.,12-06-00147-CV.
• Citation: 236 S.W.3d 852
• Parties: Karen GRANGER, Appellant, v. Helen GRANGER, Elijah Granger, Chester Benjamin, Sarah Reed, Joseph Benjamin, Susie Williams and Tony Granger, Appellees.
• Court: Texas Court of Appeals

236 S.W.3d 852

Karen GRANGER, Appellant, v. Helen GRANGER, Elijah Granger, Chester Benjamin, Sarah Reed, Joseph Benjamin, Susie Williams and Tony Granger, Appellees.

No. 12-06-00147-CV.

Court of Appeals of Texas, Tyler.

September 26, 2007.

Rehearing Overruled November 19, 2007.

Michael G. Carroll, Tyler, for appellant.

Joe Lee Register, Lufkin, for appellees.

Panel consisted of WORTHEN, C.J., GRIFFITH, J., and HOYLE, J.

OPINION

SAM GRIFFITH, Justice.

Appellant Karen Granger appeals the trial court's judgment denying her claim to one-half of a life insurance policy purchased by her deceased husband. In three issues, Karen argues that the beneficiaries of her husband's life insurance policy failed to prove by clear and convincing evidence that the policy was his separate property and that, if the policy was community property, the gift of the proceeds was a fraud on the community estate, entitling her to an appropriate remedy.

BACKGROUND

Karen and Danny Granger were married on May 24, 1999 and had two children during the marriage. In 2003, Danny purchased two life insurance policies, one from Monumental Life Insurance Company in the amount of $150,000.00 and the other from Old Line Life Insurance Company of America in the amount of $100,000.00. Danny named his mother, Helen Granger, and his brother, Elijah Granger, as beneficiaries of the Monumental policy. He named his mother, four brothers, and two sisters as beneficiaries of the Old Line policy. Danny paid the premiums for both policies through automatic drafts from his Regions Bank account. The first Monumental policy premium was drafted on March 4, 2003 in the amount of $15.00 and the first Old Line policy premium was drafted in May of 2003. Danny died on October 27, 2003. After his death, Monumental distributed the proceeds of its policy to Helen Granger and Elijah Granger.

On March 22, 2004, Old Line filed suit, seeking to deposit funds in the court's registry to resolve conflicting claims to the proceeds of its insurance policy. Karen, Helen, and Danny's four brothers and two sisters were named defendants. Karen filed a cross action against Danny's mother, four brothers, and two sisters, claiming that Danny's gifts of her one-half community interest in the policies constituted fraud on her and on the community estate. The trial court ordered that Old Line's policy proceeds be deposited into the registry of the court. After a bench trial, the trial court found that Danny had community funds in his possession when he purchased the Old Line policy and that one-half of the policy was Karen's community property. However, the trial court found that Danny used separate property funds to purchase the Monumental policy and, thus, the policy was Danny's separate property. The trial court ordered that Karen recover one-half of the proceeds of the Old Line policy, but that she take nothing on her claims regarding the Monumental policy. The trial court also ordered that Danny's mother, four brothers, and two sisters recover the other one-half of the proceeds of the Old Line policy.

In its findings of fact and conclusions of law, the trial court stated as follows:

1. Danny and Karen were married on May 24, 1999, and ceased to live together as husband and wife approximately one year before his death as a result of an auto accident on or about October 27, 2003, in Lufkin, Angelina County, Texas.

2. Danny was totally disabled as determined by the Social Security Administration as of June 22, 2000, and was awarded Supplemental Security Income ("SSI") which was paid monthly to him with payments being made to Sarah Reed for Danny beginning July 1, 2000.

3. Danny received $457.00 in SSI payments for each month during the year of 2003, through the month of his death in October 2003. The SSI payments paid to Danny because of his total disability was received by his sister, Sarah Reed, and thereafter paid over to Danny in cash payments.

4. Danny purchased a life insurance policy through Regions Bank accidental death insurance plan with an effective date of March 1, 2003, issued by Monumental providing for $150,000.00 for accidental death benefits.

5. Danny paid the monthly premiums to Monumental by a bank draft through Regions Bank in the amount of $15.00 per month with the first premium being paid on March 4, 2003.

6. Danny possessed no monies other than monies received by him through his SSI payments and gifts from family members at the time of the purchase of the life insurance policy on his life through Monumental.

7. Those funds on deposit on March 4, 2003, in Danny's account with Regions Bank was the separate property of Danny.

8. Danny had no community property monies at the time of the purchase of the life insurance policy on his life with Monumental.

9. Danny designated his mother, Helen Granger, and his brother, Elijah Granger, as beneficiaries in equal shares of the life insurance proceeds to be paid under the policy issued by Monumental.

10. After Danny had purchased life insurance from Monumental on his life, he received a check from Willie Spikes, Jr., in the amount of $315.00 dated March 12, 2003, which was presumed to be community property of Danny and Karen.

11. Danny purchased a life insurance policy issued on his life by Old Line effective May 3, 2003, after Danny had in his possession those funds paid to him by Willie Spikes, Jr. in the amount of $315.00.

12. The cross-defendants proved that the life insurance policy issued by Monumental on the life of Danny was the separate property of Danny by rebutting the presumption that the same was community property by clear and convincing evidence.

13. At the time of inception of title by Danny of the Monumental policy[,] the policy was characterized as separate property because it was acquired by the use of separate property funds.

14. Cross-defendants failed to rebut the presumption that the life insurance policy purchased by Danny from Old Line during his marriage to Karen was not the community property of Danny and Karen.

This appeal followed.

SEPARATE PROPERTY

In her first issue, Karen argues that the beneficiaries of her husband's Monumental life insurance policy failed to prove by clear and convincing evidence that the policy was his separate property.

Standard of Review

We review a trial court's division of property under an abuse of discretion standard. Moroch v. Collins, 174 S.W.3d 849, 857 (Tex.App.-Dallas 2005, pet. denied); see also Garza v. Garza, 217 S.W.3d 538, 548 (Tex.App.-San Antonio 2006, no pet.). A trial court does not abuse its discretion if there is some evidence of a substantive and probative character to support the decision. Garza, 217 S.W.3d at 549; Moroch, 174 S.W.3d at 857. A trial court's findings of fact are reviewed for legal and factual sufficiency of the evidence under the same legal standards applied to review jury verdicts for legal and factual sufficiency of the evidence. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex.1996); M.D. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex.1991).

However, in family law cases, the abuse of discretion standard of review overlaps with the traditional sufficiency standards of review and, as a result, legal and factual sufficiency are not independent grounds of reversible error. Garza, 217 S.W.3d at 549; Moroch, 174 S.W.3d at 857. Instead, they constitute factors relevant to our assessment of whether the trial court abused its discretion. Garza, 217 S.W.3d at 549; Moroch, 174 S.W.3d at 857. Thus, in considering whether the trial court abused its discretion because the evidence is legally or factually insufficient, we apply a two prong test: (1) did the trial court have sufficient evidence upon which to exercise its discretion, and (2) did the trial court err in its application of that discretion? Garza, 217 S.W.3d at 549; Moroch, 174 S.W.3d at 857. We then consider whether, based on the evidence, the trial court made a reasonable decision. Garza, 217 S.W.3d at 549; Moroch, 174 S.W.3d at 857.

We review the trial court's conclusions of law de novo. Material P'ships, Inc. v. Ventura, 102 S.W.3d 252, 257 (Tex.App.-Houston [14th Dist.] 2003, pet. denied). The standard of review for conclusions of law is whether they are correct. Id. We will uphold conclusions of law on appeal if the judgment can be sustained on any legal theory the evidence supports. Id. Thus, incorrect conclusions of law do not require reversal if the controlling findings of fact support the judgment under a correct legal theory. Id.

Applicable Law

Property possessed by either spouse during or on dissolution of marriage is presumed to be community property. TEX. FAM.CODE ANN. § 3.003(a) (Vernon 2006). To overcome this presumption, a party must present clear and convincing evidence that the property is separate. Id., § 3.003(b); Garza, 217 S.W.3d at 548. "Clear and convincing evidence" means the measure or degree of proof that will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established. TEX. FAM.CODE ANN. § 101.007 (Vernon 2002). In order to overcome the community property presumption, the burden is on the spouse claiming certain property as separate to trace and clearly identify the property claimed to be separate. Boyd v. Boyd, 131 S.W.3d 605, 612 (Tex.App.-Fort Worth 2004, no pet.). A spouse's separate property consists of the property owned or claimed by the spouse before marriage, the property acquired by the spouse during marriage by gift, devise, or descent, and the recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage. TEX. FAM.CODE ANN. § 3.001 (Vernon 2006).

Tracing involves establishing the separate origin of the property through evidence showing the time and means by which the spouse originally obtained possession of the property. Boyd, 131 S.W.3d at 612. As a general rule,...