Schneider v. Schneider

Decision Date18 November 1999
Citation5 S.W.3d 925
Parties(Tex.App.-Austin 1999) Karl Eugene Schneider/Kay Luchie Schneider, Appellants v. Kay Luchie Schneider/Karl Eugene Schneider, Appellees NO. 03-99-00060-CV
CourtTexas Court of Appeals

Before Justices Jones, Kidd and Patterson

Mack Kidd, Justice

This appeal arises out of a family-law dispute following a divorce between appellant Karl Eugene Schneider and appellee Kay Luchie Schneider. After the trial court issued a final divorce decree and a subsequent agreed modification of that decree, Karl filed a motion for clarification and enforcement requesting the court to (1) impose a constructive trust upon certain monies Kay may receive in the future as a beneficiary under his Armed Services Survivor's Benefit Plan and (2) render judgment against Kay for money she purportedly owes him for the Plan's premiums and a wrongfully withheld child-support payment. Kay responded, as cross-plaintiff, with a request for the imposition of sanctions against Karl and an award of attorney's fees. The trial court denied the relief sought by each side. In separate issues, both parties now appeal the court's final order. We will affirm the trial court's judgment.

BACKGROUND

Appellant Karl Eugene Schneider and appellee Kay Luchie Schneider were divorced in 1994. As part of the divorce decree, Karl was ordered to pay monthly child support for their daughter until the latter of either her eighteenth birthday or the month she graduated from high school. In its division of the marital estate, the court awarded Kay an interest in 31.9% of the military retirement payments Karl receives based on his twelve years of service in the United States Air Force. In addition to being awarded an interest in Karl's retirement benefits, Kay was also given an interest in the proceeds of Karl's Armed Services Survivor's Benefit Plan (the Plan). As a practical matter, the Plan takes the place of retirement payments upon a service member's death. It is an annuity payable to a beneficiary selected by the service member.

According to the original decree, Kay's interest in the Plan proceeds was to be limited to an amount equal to 31.9% of Karl's "disposable retired pay."1 The court order prohibited Karl from ever modifying the election to name anyone other than Kay as the beneficiary under the Plan. Commensurate with the survivor benefits she was to receive under the Plan, Kay was ordered to pay 31.9% of the cost of the monthly premiums necessary to maintain the Plan.

In accordance with the terms of the court order, Karl designated Kay as a "former spouse beneficiary" under the Plan and attempted to have Kay's interest limited to an amount equal to 31.9% of his disposable retired pay. Notwithstanding this attempt, the Air Force refused to so limit Kay's interest in the Plan benefits. A year following the divorce, the Air Force continued to recognize Kay as the sole beneficiary of all the Plan's proceeds. In light of this unanticipated difficulty in carrying out the terms of the court's decree, the parties presented the court with a proposed agreed order modifying some of the terms of the original decree. Under the proposed modification, Kay was to pay the entire monthly premium required to maintain the Plan until the Air Force recognized and implemented the court-ordered 31.9% limitation on Kay's interest in the Plan's proceeds. In order to keep Kay apprised of the costs for which she was responsible, Karl was also ordered to provide on a monthly basis copies of his most recent Air Force retirement "pay stub" showing the exact amount of the Plan premium that was deducted each month from his retirement pay. All the terms of the final divorce decree not addressed in the modified order were to remain valid and unmodified. The court agreed to the modification.

Initially, Kay wrote checks to Karl each month for the full amount of the Plan premiums as indicated on the pay stubs. But eventually, Kay reduced the amounts she was paying Karl by 31.9%, reasoning that she was entitled to a credit for the amount of the premium that was being deducted from her portion of Karl's retirement pay each month. Karl felt that by reducing the amount she was paying him directly, Kay was violating the decree by reimbursing him for less than the "full cost" of maintaining the Plan. Karl also claimed Kay owed him for a child-support payment that was wrongfully withheld from his retirement pay a month after his child-support obligation had ended. In addition to his disagreements with Kay, Karl became increasingly frustrated with the Air Force's continued refusal to recognize the limitation on Kay's interest in the Plan.

With these concerns in mind, Karl filed a motion for clarification and enforcement of the agreed order in which he requested the court to (1) issue a declaratory judgment or clarifying order imposing a constructive trust upon all Plan benefits Kay may receive in excess of the 31.9% granted to her in the decree and (2) render judgment against Kay for the amounts she purportedly owes for past premiums and the extra child-support payment. Kay responded with a request for sanctions on grounds that Karl's motion was frivolous, groundless, and brought in bad faith or for the purpose of harassment. Both parties requested an award of reasonable attorneys' fees.

After conducting a hearing, the court denied both parties' motions. Karl and Kay now appeal the court's order denying their requests for relief. In three issues, Karl challenges the court's overruling of his motion for clarification and enforcement. In four issues, Kay appeals the court's denial of her requests for the imposition of sanctions and award of attorneys' fees.

DISCUSSION
Abuse of Discretion

In his first and third issues, Karl complains that the trial court abused its discretion by (1) refusing to issue a declaratory judgment or clarifying order imposing a constructive trust upon any Plan benefits Kay might receive in excess of the 31.9% interest she was awarded in the decree and (2) denying his request for award of attorneys' fees.

As both sides concede, in the event Kay survives Karl under the present circumstances, she will receive 100% of the proceeds of the Plan, as opposed to a lesser amount tied to her 31.9% share of Karl's disposable retirement pay that the court awarded her in the final divorce decree. Karl argues that, in order to carry out the terms as the court intended, a constructive trust should be imposed on the remainder of the Plan benefits that were not awarded to Kay, which Karl wishes to leave to his current spouse. He maintains that the court's refusal to impose a constructive trust in this situation was an abuse of discretion.

While we agree with appellant that a constructive trust might have been an appropriate remedy in this situation, we cannot conclude that the trial court's decision not to impose one was an abuse of discretion. The decision whether to impose a constructive trust is an equitable matter within the discretion of the trial court. See Carr v. Weiss, 984 S.W.2d 753, 767 (Tex. App.-Amarillo 1999, no pet. h.); Tripp Village Joint Venture v. MBank Lincoln Centre, N.A., 774 S.W.2d 746, 750 (Tex. App.-Dallas 1989, writ denied). A trial court abuses its discretion only when it acts in an unreasonable and arbitrary manner or when it acts without reference to any guiding principles. See Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991); Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). This Court may not reverse for abuse of discretion merely because we disagree with a decision of the trial court. See Buller, 806 S.W.2d at 226; Downer, 701 S.W.2d at 242.

We first note that all the cases appellant cites in support of his argument are distinguishable from the circumstances presented here. See, e.g., Hudspeth v. Stoker, 644 S.W.2d 92 (Tex. App.-San Antonio 1982, writ ref'd); Towne v. Towne, 707 S.W.2d 745 (Tex. App.-Fort Worth 1986, no writ); Jeffcoat v. Jeffcoat, 886 S.W.2d 567 (Tex. App.-Beaumont 1994, no writ); Sever v. Massachusetts Mut. Life Ins. Co., 944 S.W.2d 486 (Tex. App.-Amarillo 1997, writ denied). Each of these cases involved an appellate court's affirmance of a trial court's decision to impose a constructive trust. None involved a challenge to a trial court's decision not to impose a constructive trust at the request of a litigant. Cases discussing circumstances under which imposing a constructive trust was not an abuse of discretion offer little, if any, guidance on the circumstances under which not imposing such a trust would be an abuse of discretion necessitating a reversal by this Court.

Here, we cannot say that the trial court acted in an unreasonable and arbitrary manner or without reference to any guiding principles when it refused to impose a constructive trust. The trial court indicated in its conclusions of law that its decision was based, at least in part, on its belief that the relief Karl requested was preempted by federal law. The record indicates that the trial court was relying on section 1448(b)(2)(B) of Title 10 of the United States Code (1998). That section, entitled "Effect of former spouse election on spouse or dependent child," provides that, ". . . [i]n the case of a person with a [current] spouse or a dependent child, such an election [of a former spouse] prevents payment of an annuity to that [current] spouse or child . . . ." 10 U.S.C.A. 1448(b)(2)(B) (1989). Kay argues that this statute precludes the trial court from designating more than one beneficiary of the Plan; and she claims that in its practical effect, creating a constructive trust to preserve the amounts Kay receives in excess of her 31.9% share in the Plan for the benefit...

To continue reading

Request your trial
24 cases
  • Cage v. Davis (In re Giant Gray, Inc.)
    • United States
    • U.S. Bankruptcy Court — Southern District of Texas
    • October 22, 2020
    ...Wright & Wright, Inc. , 2009 WL 5173954, at *9–10, 2009 U.S. Dist. LEXIS 121472, at *32 (N.D. Tex. Dec. 31, 2009) (citing Schneider v. Schneider , 5 S.W.3d 925, 929 (Tex. App.—Austin 1999, no pet.) ).272 20-3127, ECF No. 1 at 12.273 Id.274 20-3127, ECF No. 5 at 7.275 20-3127, ECF No. 1 at 6......
  • Continental Cas. Ins. v. Functn'l Restor. Assoc.
    • United States
    • Texas Supreme Court
    • July 6, 2000
  • Limbaugh v. Limbaugh
    • United States
    • Texas Court of Appeals
    • February 6, 2002
    ...that Leland designate Maria as his former spouse beneficiary to accomplish this objective. Id. § 1450(f)(4) (West 1998); Schneider v. Schneider, 5 S.W.3d 925, 927-28 (Tex.App.-Austin 1999, no pet.); Morris v. Morris, 894 S.W.2d 859, 864-65 (Tex.App.-Fort Worth 1995, no writ). Title 10, sect......
  • Brauer v. Brauer
    • United States
    • Texas Court of Appeals
    • September 20, 2012
    ...internal quotations omitted). 34. Heldenfels Bros., Inc. v. City of Corpus Christi, 832 S.W.2d 39, 41 (Tex. 1992). 35. Cf. Schneider v. Schneider, 5 S.W.3d 925, 929 (Tex. App.—Austin 1999, no pet.) (recognizing that declaratory judgment imposing constructive trust could be appropriate remed......
  • Request a trial to view additional results
1 books & journal articles
  • § 12.03 Military Longevity and Disability Retirement
    • United States
    • Full Court Press Divorce, Separation and the Distribution of Property Title CHAPTER 12 Division of Federal Benefits
    • Invalid date
    ...See 28 Fam. Advocate 20-21, 34-35 (Fall 2005). For an example of some problems that can be encountered, see Schneider v. Schneider, 5 S.W.3d 925 (Tex. App. 1999). [308] Carr v. Carr, 42 Fam. L. Rep. (BNA) 1155 (Ind. App. 2016).[309] In re Marriage of Coviello, 408 Ill. Dec. 343, 65 N.E.3d 5......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT