Stavinoha v. Stavinoha

• Decision Date: 20 January 2004
• Docket Number: No. 14-02-01081-CV.,14-02-01081-CV.
• Parties: Maureen Louise STAVINOHA, Appellant, v. Paul Anthony STAVINOHA, Appellee.
• Court: Texas Court of Appeals

126 S.W.3d 604

Maureen Louise STAVINOHA, Appellant, v. Paul Anthony STAVINOHA, Appellee.

No. 14-02-01081-CV.

Court of Appeals of Texas, Houston (14th Dist.).

January 20, 2004.

Lynn S. Kuriger, Houston, for appellant.

Kent W. Shriver, The Woodlands, Shawn Russel Casey, Houston, for appellee.

Panel consists of Justices FOWLER and EDELMAN. Former Chief Justice SCOTT BRISTER not participating.

OPINION

WANDA McKEE FOWLER, Justice.

In this case we are asked to decide the proper characterization of retirement benefits of a police officer who participated in the Houston Police Officer's Pension System Deferred Retirement Option Plan. Based on the facts of this case, we hold that all of the officer's benefits were fully vested and, to the extent they were earned during marriage, were community property.

I. FACTUAL AND PROCEDURAL BACKGROUND

Appellee Paul Anthony Stavinoha began working for the City of Houston as a police officer on January 20, 1975. He became a member of the Houston Police Officers Pension System ("HPOPS") on May 10, 1975. Four years after this, Paul and appellant, Maureen Louise Stavinoha, were married on June 9, 1979.

Paul became eligible to retire on May 10, 1995, but instead of retiring immediately, in November of 1995 he elected to participate in the HPOPS Deferred Retirement Option Plan ("DROP"). DROP is an optional method to receive benefits available to HPOPS members with 20 or more years of credited pension service with the City of Houston. Under DROP, the member continues working and receiving a salary, and the monthly retirement annuity the member could have received upon retirement is credited to a notional DROP account in the member's name. When the member retires—stops the DROP program—he or she is entitled to receive the amount accumulated in the DROP account in a lump sum, and is also entitled to receive payment of the monthly pension benefit.

In the summer of 2000, approximately four and one-half years after Paul began participating in the DROP, the parties petitioned for divorce. Issues concerning conservatorship, possession and access, and child support for their two minor children were resolved through mediation. Property issues—in large part dominated by whether Paul's retirement benefits paid into the DROP account were community or separate property—were tried in a nine-day bench trial. The final decree of divorce was entered on June 21, 2002.

The decree provided that (1) the monthly benefit credited to the DROP account from 1995 until the date of divorce (June 21, 2002), was apportioned between the community and separate estates; (2) the monthly benefit credited into the DROP account after June 21, 2002, but prior to Paul's actual separation from service, was characterized as 100% Paul's separate property; and (3) the monthly benefit paid after Paul's actual separation from service was apportioned between the community and separate estates. Maureen was awarded 50% of the apportioned retirement benefits. The decree further provided that the community had no interest in annual cost-of-living adjustments (COLAs) and other benefits paid post-divorce.

At Maureen's request—and after Maureen filed a notice of past due findings and conclusions—the trial court issued findings of fact and conclusions of law. This appeal followed.

II. CONTROLLING STATUTORY AND CASE-LAW RULES

On appeal, Maureen raises three issues in which she attacks specific findings of fact and conclusions of law. She complains that the trial court wrongly characterized community property as separate and that this mischaracterization caused a disproportionate division of her marital estate that was manifestly unfair and unjust. This claim requires us to apply a number of rules and some statutes.

A. Definitions and Rules Related to Property

Several special rules and standards govern our review of this judgment. We begin with the definitions and rules related to property. Separate property is defined in the Texas Constitution as "[a]ll property, both real and personal, of a spouse owned or claimed before marriage, and that acquired afterward by gift, devise or descent." Tex. Const. art. XVI, § 15. The Texas Family Code defines separate property as that property owned by a spouse before marriage, acquired during the marriage by gift, devise, or descent, or as a recovery for personal injuries sustained during the marriage. See Tex. Fam.Code § 3.001.

Community property consists of the property, other than separate property, acquired by either spouse during marriage. See Tex. Fam.Code § 3.002; Barnett v. Barnett, 67 S.W.3d 107, 111 (Tex. 2001). All property possessed by either spouse during or on dissolution of marriage is presumed to be community property. Tex. Fam.Code § 3.003(a); Barnett, 67 S.W.3d at 111.

To overcome the community property presumption, a spouse claiming assets as separate property is required to establish their separate character, not merely by a preponderance of the evidence, but by clear and convincing evidence. Tex. Fam. Code § 3.003(b); McElwee v. McElwee, 911 S.W.2d 182, 188 (Tex.App.-Houston [1st Dist.] 1995, writ denied). "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. In re J.F.C., 96 S.W.3d 256, 264 (Tex.2002); Slaton v. Slaton, 987 S.W.2d 180, 182 (Tex.App.-Houston [14th Dist.] 1999, pet. denied); see also Tex. Fam.Code § 101.007.

B. STANDARD OF REVIEW WHEN AN ESTATE HAS BEEN DIVIDED

In a divorce decree, the trial court "shall order a division of the estate of the parties in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage." Tex. Fam.Code § 7.001. To disturb a trial court's division of property, Maureen must show the trial court clearly abused its discretion by a division or an order that is manifestly unjust and unfair. See Evans v. Evans, 14 S.W.3d 343, 345-46 (Tex.App.-Houston [14th Dist.] 2000, no pet.). Under this abuse of discretion standard, the legal and factual sufficiency of the evidence are not independent grounds of error, but are merely relevant factors in assessing whether the trial court abused its discretion. Zieba v. Martin, 928 S.W.2d 782, 790 (Tex.App.-Houston [14th Dist.] 1996, no writ). We must remand the entire community estate for a new division when we find reversible error that materially affects the trial court's "just and right" division of the property. See Jacobs v. Jacobs, 687 S.W.2d 731, 732 (Tex.1985).

We review the trial court's conclusions of law de novo. Smith v. Smith, 22 S.W.3d 140, 143-44 (Tex.App.-Houston [14th Dist.] 2000, no pet.). Conclusions of law may not be challenged for factual insufficiency. Zieba, 928 S.W.2d at 786 n. 3. The standard of review is whether the conclusions of law drawn from the facts are correct. Zieben v. Platt, 786 S.W.2d 797, 802 (Tex.App.-Houston [14th Dist.] 1990, no writ). We will uphold conclusions of law on appeal if the judgment can be sustained on any legal theory the evidence supports. Waggoner v. Morrow, 932 S.W.2d 627, 631 (Tex.App.-Houston [14th Dist.] 1996, no writ). Thus, incorrect conclusions of law do not require reversal if the controlling findings of fact support the judgment under a correct legal theory. Id.

C. HEIGHTENED REVIEW OF SEPARATE PROPERTY CLAIMS

Paul concedes he had the burden of proof to demonstrate by clear and convincing evidence that the disputed benefits are his separate property. Recently, the Texas Supreme Court, in a parental termination case, clarified our standard of review when a party challenges findings that must be supported by clear and convincing evidence. See In re C.H., 89 S.W.3d 17, 25 (Tex.2002) (discussing factual sufficiency review); In re J.F.C., 96 S.W.3d 256, 264-68 (Tex.2002) (discussing legal sufficiency review). In these cases, the Court reasoned that the traditional legal and factual sufficiency reviews were inadequate to accommodate the clear and convincing burden of proof in termination proceedings, concluding that "the burden of proof at trial necessarily affects appellate review of the evidence." J.F.C., 96 S.W.3d at 264 (quoting C.H., 89 S.W.3d at 25). In light of these comments in C.H. and J.F.C., that the burden of proof at trial necessarily affects appellate review of the evidence, we will apply the standard of review the Court articulated in these cases.

1. Legal Sufficiency Review with Heightened Standard

J.F.C. held that when we conduct a legal sufficiency review of a separate property finding, we are instructed to look at all the evidence in the light most favorable to the finding to determine whether a reasonable trier of fact could have formed a firm belief or conviction that its finding was true. See J.F.C., 96 S.W.3d at 266. Looking at the evidence in the light most favorable to the finding means that we must (1) assume that the fact finder resolved disputed facts in favor of its finding if a reasonable fact finder could do so, and (2) disregard all contrary evidence that a reasonable fact finder could have disbelieved or found to have been incredible. See id. However, we are not required to disregard undisputed facts that do not support the finding, because that might skew a clear and convincing analysis. See id. If we determine that no reasonable fact finder could form a firm belief or conviction of the truth of the matter to be proved, we must conclude that the evidence is legally insufficient. See id.

2. Factual Sufficiency Review with Heightened Standard

Likewise, under C.H., a new factual sufficiency review applies. We must consider whether all of the evidence is such that a factfinder could reasonably form a firm belief or conviction about the truth of the allegations sought to be established. See C.H., 89 S.W.3d at 25; J.F.C., 96 S.W.3d at 266. We should consider whether disputed...