Licata v Licata

• Decision Date: 07 October 1999
• Parties: <!--11 S.W.3d 269 (Tex.App.-Houston 1999) JOSEPH LICATA, III, Appellant v. LINDA VERGARA LICATA, Appellee NO. 14-96-01046-CV In The Fourteenth Court of Appeals
• Court: Texas Court of Appeals

Page 269

11 S.W.3d 269 (Tex.App.-Houston[14th Dist.] 1999)

JOSEPH LICATA, III, Appellant v LINDA VERGARA LICATA, Appellee

NO. 14-96-01046-CV

In The Fourteenth Court of Appeals

October 7, 1999.

Rehearing Overruled Feb. 17, 2000.

On Appeal from the 247th District Court Harris County, Texas Trial Court Cause No. 93-33048

[Copyrighted Material Omitted] Panel consists of Justices Anderson, Edelman, and O'Neill.

O P I N I O N

JOHN S. ANDERSON, Justice.

This is an appeal from a divorce proceeding. Joseph Licata, III (Joseph) appeals from the final decree of divorce. The sole issue on appeal concerns the disposition of property between the parties. Joseph brings two points of error. First, he argues the evidence is insufficient to support the trial court's implied findings that proceeds from a personal injury settlement were the separate property of Linda Licata (Linda). Second, Joseph asserts the trial court abused its discretion in awarding Linda a percentage of his future income. We affirm the judgment of the trial court.

Background

The most valuable contested asset in the divorce proceedings below was the proceeds from a personal injury suit settled during the marriage. After a bench trial, the trial court awarded Linda $389,222¹ in settlement proceeds as her separate property. During the trial the court admitted into evidence two agreements resolving her personal injury suit. One document, signed by Linda alone, contains the following statement: "It is further understood that the nature of the injuries in this case are not easily ascertained, and that payment herein is made for physical pain and mental anguish and physical disfigurement alone." That agreement gave Linda $237,500 in exchange for the release of all claims against the settling parties. The second agreement is signed by both Linda and Joseph, and sets out a settlement amount of $425,000 to be paid by another defendant. This second agreement provides, "[t]he sum announced herein is being paid exclusively on the basis of pain, suffering, mental anguish and other in tangible damages." This document does not specify whether the settlement is based on Linda's, Joseph's, or both parties' injuries, and contains an indemnity provision holding the defendant harmless from any claims "for medical expenses incurred which may hereafter be asserted against [the settling defendant] by any person or entity as a result of the above-described occurrence or injuries of LINDA LICATA and/or JOE LICATA." The appellate recordalso contains an unsigned document indicating Linda's receipt of the net settlement proceeds.²

The trial court signed the Final Decree of divorce on April 30, 1996. That judgment awarded Linda as her separate property the sum in a Merrill Lynch account which represented the then remaining settlement funds. The judgment also awarded Linda 50% of any referral fee received by Joseph on any pending case he had referred to another attorney prior to December 5, 1995, and 30% of any fees he recovered on any of his own cases that were pending prior to December 5, 1995.

I. Factual Sufficiency of the Evidence

In point of error one, Joseph contends the evidence is insufficient to support the trial court's implied finding that the proceeds from the personal injury settlements were the separate property of Linda. At the conclusion of his argument under this point of error, Joseph requests that the judgment be reversed and remanded for a new trial. Accordingly, we review his sufficiency challenge under the factual sufficiency standard of review.

A. Standard of Review

This was a nonjury trial. Joseph requested findings of fact and conclusions of law pursuant to Civil Procedure Rule 296, but failed to file a notice of past due findings of fact pursuant to Civil Procedure Rule 297 when the trial court did not make the requested findings. Where a party fails to file the notice pursuant to Rule 297, the findings and conclusions are not properly requested. See Smith v. Harrison County, 824 S.W.2d 788, 792 (Tex. App.-Texarkana 1992, no pet.). In a nonjury trial where no findings of fact or conclusions of law are filed or properly requested, it is implied that the trial court made all the necessary findings to support its judgment. See Roberson v. Robinson, 768 S.W.2d 280, 281, (Tex. 1989). Where, as here, a reporter's record is brought forward on appeal, these implied findings may be challenged by factual sufficiency and legal sufficiency points the same as jury findings or a trial court's findings of fact. See id.

The exact standard of review which we must apply to Joseph's point of error one is controlled, in part, by the question of which party had the burden of proof. There is a statutory presumption that all property possessed by Joseph and Linda at the time of the dissolution of their marriage is community property. See TEX. FAM. CODE ANN. 5.02 (Vernon 1993). Clear and convincing evidence is required to overcome that presumption and establish property as separate property. See id. The burden of overcoming the presumption of community property is on the party asserting otherwise by clear and convincing evidence. See Wilson v. Wilson, 201 S.W.2d 226, 227 (Tex. 1947).

Thus, Joseph's point of error attacks the factual sufficiency of an implied adverse finding on an issue upon which Linda had the initial burden of proof. A factual insufficiency point of error is appropriate if the party without the burden of proof challenges a finding of fact. See Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983). A factual insufficiency point of error requires the reviewing court to examine all evidence which supports and contradicts the finding under attack. See Hickey v. Couchman, 797 S.W.2d 103, 109 (Tex. App.-Corpus Christi 1990, pet. denied). The test is whether the evidence supporting the finding is so slight, or the evidence against it so strong, that the finding is manifestly unjust and quite clearly wrong. See id.; see also Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (stating that appellate court, when reviewing factual sufficiency of the evidence, must consider and weigh all the evidence and set aside the verdict only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust).

The trial court's award of all of the settlement proceeds to Linda as her separate property presumptively is based on an implied finding by the court that it was her separate property. The validity of this implied finding is the essence of Joseph's first point of error.

B. Character of the Settlement Funds

Recovery for personal injuries to the body of a spouse is the separate property of that spouse. See TEX. FAM. CODE ANN. 5.01(a)(3) (Vernon 1993); Perez v. Perez, 587 S.W.2d 671, 673 (Tex. 1979); Graham v. Franco, 488 S.W.2d 390, 396 (Tex. 1972). The damages that are the separate property of the injured spouse include those awarded for disfigurement and for physical pain and suffering in the past and in the future. See Graham, 488 S.W.2d at 396; Moreno v. Alejandro, 775 S.W.2d 735, 737 (Tex. App-San Antonio 1989, no pet.). Damages for mental pain and anguish are separate property. See Moreno, 775 S.W.2d at 737. The community estate, however, is entitled to any recovery for loss of earning capacity during marriage, for medical expenses incurred during marriage, and for other expenses associated with injury to the community estate. See TEX. FAM. CODE ANN. 5.01(a)(3); Perez, 587 S.W.2d at 673; Moreno, 775 S.W.2d at 738.

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 her separate property. See Kyles v. Kyles, 832 S.W.2d at 194, 198 (Tex. App.-Beaumont 1992, no pet.). Without clear and convincing evidence showing the recovery is solely for the personal injury of a particular spouse, the spouse does not overcome the presumption that all property received during marriage is community property. See TEX. FAM. CODE ANN. 5.02.

Joseph contends on appeal that the two settlement agreements resolving Linda's personal injury litigation reveal that all of the recovery was community property. At trial, Linda relied upon the settlement and release documents to show the recovery was for her personal injury. Joseph attempted to introduce extrinsic evidence to prove he or the community estate was entitled to a portion of the settlement. Joseph, however, was precluded from entering any extrinsic evidence.³ The only other evidence concerning the settlement agreement is limited to testimony by Linda and the attorney representing her during the personal injury settlement negotiations. Linda testified that the entire recovery was for pain and suffering. A CPA testified that Linda reported the income on her tax return consistent with the notion that the entire amount was her separate property.

The "Release" and the "Compromise Settlement Agreement" both contain language bearing on the question of the separate property nature of the payments provided for in those agreements. The Compromise Settlement Agreement states: "It is further understood that the nature of the injuries in this case are not easily ascertained, and that payment herein is made for physical pain and mental anguish and physical disfigurement alone." (emphasis added). The Release provides: "The sum announced herein is being paid exclusively on the basis of pain, suffering, mental anguish and other intangible damages." (emphasis added). The clear statements in the settlement documents displaced the presumption of community property and created a new presumption that the settlement proceeds are Linda's separate property. See Kyles, 832 S.W.2d at 196 (citing Henry S. Miller Co. v. Evans, 452 S.W.2d 425, 430 (Tex. 1970)). These recitals become prima facie evidence the recovery is separate property. See id. When...