Long v. Long

• Decision Date: 15 February 2007
• Docket Number: No. 08-05-00250-CV.,08-05-00250-CV.
• Citation: 234 S.W.3d 34
• Parties: Gabriel Juan LONG, Appellant, v. Danalyn Marie LONG, Appellee.
• Court: Texas Court of Appeals

234 S.W.3d 34

Gabriel Juan LONG, Appellant, v. Danalyn Marie LONG, Appellee.

No. 08-05-00250-CV.

Court of Appeals of Texas, El Paso.

February 15, 2007.

Rehearing Overruled April 11, 2007.

Jack Gayle Neal, Roanoke, for Appellant.

Robert J. Collins, Dallas, for Appellee.

Before CHEW, C.J., McCLURE, and BARAJAS, C.J. (Ret.).

OPINION

ANN CRAWFORD McCLURE, Justice.

This is an appeal from a final decree of divorce in which characterization of property is at issue. The dispute centers on lake property purchased during marriage with the husband's separate funds. Finding no error, we affirm.

FACTUAL SUMMARY

Gabriel and Danalyn Long were married on May 26, 1998. At the time of the marriage, Gabe was employed by Perot Systems, Inc. The parties stipulated that Gabe was granted stock options prior to marriage, that the options vested prior to marriage, and that they were exercised after marriage. From a total grant of 600 shares, Gabe sold 400 shares to pay the option price and netted 200 shares of Perot Systems stock. He then traded the Perot stock for Cisco shares which were then sold for $146,500. Counsel for both parties represented to the court that the sales proceeds were Gabe's separate property. Of this sum, $138,000 was used to purchase a lake lot. Gabe claimed the lot in its entirety as separate property. Danalyn claimed an undivided one-half interest in the lot as her separate property, claiming that by using his separate funds and taking title in both parties' names, Gabe had manifested an intent to make a gift. In findings of fact and conclusions of law, the trial judge found that Gabe's separate property was spent to purchase the lot, that Gabe gifted an undivided one-half interest in the lot to Danalyn, and that the value of the lot was $175,000. The court likewise entered conclusions of law that each spouse owned an undivided one-half interest as separate property. When asked whether he preferred to sell the lot and divide the proceeds, Gabe elected to purchase Danalyn's interest for $87,500.

THE PRESUMPTIONS

All property on hand at the dissolution of marriage is presumed to be community property. Tate v. Tate, 55 S.W.3d 1, 4 (Tex.App.-El Paso 2000, no pet.); TEX.FAM.CODE ANN. § 3.003(a) (Vernon 2006). It is a rebuttable presumption, requiring a spouse claiming assets as separate property to establish their separate character by clear and convincing evidence. Id.; TEX.FAM.CODE ANN. § 3.003(b). Property owned before marriage, or acquired during marriage by gift, devise or descent, is separate property. Id.; TEX. FAM.CODE ANN. § 3.002. Where an asset is purchased during marriage with monies traceable to a spouse's separate estate, the asset may appropriately be characterized as separate property. Pace v. Pace, 160 S.W.3d 706, 711 (Tex.App.-Dallas 2005, pet.denied).

A second presumption arises from the facts here. Where one spouse uses separate funds to purchase property during marriage and takes title to the property in joint names, we presume that a gift to the spouse is intended. In re Marriage of Morris, 12 S.W.3d 877, 881 (Tex.App.-Texarkana 2000, no pet.), citing Cockerham v. Cockerham, 527 S.W.2d 162, 168 (Tex.1975). This presumption may be rebutted by parol evidence establishing that no gift was intended. Cockerham, 527 S.W.2d at 168. A rebuttable presumption "shift[s] the burden of producing evidence to the party against whom it operates." Lide v. Lide, 116 S.W.3d 147, 152 (Tex. App.-El Paso 2003, no pet); In the Interest of Rodriguez, 940 S.W.2d 265, 271 (Tex. App.-San Antonio 1997, writ denied), citing General Motors Corp. v. Saenz, 873 S.W.2d 353, 359 (Tex.1993). Once that burden is discharged and evidence contradicting the presumption has been offered, the presumption disappears and is not weighed or treated as evidence. General Motors Corp., 873 S.W.2d at 359. The evidence is then evaluated as it would be in any other case, and the presumption has no effect on the burden of persuasion.

CHARACTERIZATION

In his first issue for review, Gabe complains that the trial court failed to characterize the lake lot as community property. In his second issue, Gabe challenges the court's finding that he gifted a one-half interest to his wife.

Framing the Issues

An appeal directed toward demonstrating an abuse of discretion is one of the tougher appellate propositions. Most of the appealable issues in a family law case are evaluated against an abuse of discretion standard, be it the issue of property division incident to divorce or partition, conservatorship, visitation, or child support. While the appellant may challenge the sufficiency of the evidence to support findings of fact, in most circumstances, that is not enough. If, for example, an appellant is challenging the sufficiency of the evidence to support the court's valuation of a particular asset, he must also contend that the erroneous valuation caused the court to abuse its discretion in the overall division of the community estate. Here, however, we are asked to review an alleged characterization error. We must determine not only whether the trial court's finding of separate property is supported by clear and convincing evidence, we must also determine whether the characterization error, if established, caused the trial court to abuse its discretion. These two prongs require first, a showing of error, and second, a showing that the error was harmful. TEX.R.APP.P. 44.1(a)(1)(no judgment may be reversed on appeal on the ground that the trial court made an error of law unless the court of appeals concludes that the error complained of probably caused the rendition of an improper judgment).

Three fact scenarios establish the appropriate structure of an appellant's characterization contention. First, suppose Wife claims Blackacre is her separate property and Husband claims the asset is community property. Second, suppose the trial court characterizes it as community property and awards it to Wife. On appeal, Wife must establish error; she must challenge that the characterization is against the great weight and preponderance of the evidence [a factual sufficiency complaint] or that separate property status was established as a matter of law [a legal sufficiency complaint]. She must also establish that the characterization error was harmful—because of the mischaracterization, the overall division of property constitutes an abuse of discretion. In re Marriage of Morris, 12 S.W.3d at 884 (mere mischaracterization of separate property as community property does not require reversal; it is appellant's burden to prove that any disparity in the division was caused by the mischaracterization of property and that it was of such substantial proportions that it constituted an abuse of the trial court's discretion); Magill v. Magill, 816 S.W.2d 530, 533 (Tex.App.-Houston [1st Dist.] 1991, writ denied)(accord).

Now suppose that given the same fact pattern, the trial court characterizes Blackacre as Wife's separate property and awards it to her. This time, Husband appeals. He must first establish error by challenging the legal or factual sufficiency of the evidence to support the separate property characterization. He must also conduct a harm analysis-because of the mischaracterization, the overall division of property constitutes an abuse of discretion. Vandiver v. Vandiver, 4 S.W.3d 300, 302 (Tex.App.-Corpus Christi 1999, pet. denied) (mischaracterization of community property as separate property is not reversible unless the mischaracterization had more than a de minimus effect on the just and right division).

It is only in the third scenario that reversible error exists as a matter of law. In this example, Wife claims Blackacre is separate property and Husband claims it is community property. The trial court characterizes it as community property and awards it to Husband. If Wife can establish that Blackacre is her separate property, it is unnecessary to show harm because divestiture of separate property is reversible error. Eggemeyer v. Eggemeyer, 554 S.W.2d 137, 140 (Tex.1977); In re Marriage of Morris, 12 S.W.3d at 881. In this singular instance, there is no need to demonstrate that the overall property division constitutes an abuse of discretion.

Standards of Review

We may review a trial court's findings of fact for both legal and factual sufficiency. BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002); Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex.1994). In a traditional legal sufficiency review, we consider the evidence and inferences that tend to support the findings and disregard all evidence and inferences to the contrary. Bernal v. Chavez, 198 S.W.3d 15, 18 (Tex.App.-El Paso 2006, no pet.); Catalina, 881 S.W.2d at 297. If any probative evidence supports the factual finding, it must be upheld. Bernal, 198 S.W.3d at 18. In conducting a traditional factual sufficiency review, we consider all the evidence, including that which tends to prove the existence of a vital fact in addition to evidence which tends to disprove its existence. Id. The trial court's finding of fact must be so against the great weight and preponderance of the evidence as to be manifestly wrong. Id. The trier of fact determines the weight to be given to the testimony and resolves any conflicts in the evidence. Id. at 19.

But traditional sufficiency review is heightened when the burden of proof is clear and convincing evidence. In re J.F.C., 96 S.W.3d 256, 266-67 (Tex. 2002); In re C.H., 89 S.W.3d 17, 25 (Tex. 2002). In a legal sufficiency review, we look at all the evidence in the light most favorable to the fact finding to determine whether a reasonable trier of fact could have formed a firm belief or conviction that the finding was true. In re J.F.C., 96 S.W.3d at 266. In so doing, we must assume that the fact finder resolved disputed facts in favor of its finding if a reasonable fact finder could do so. Id. We should disregard all evidence that a...