Winkle v. Winkle

• Decision Date: 12 June 1997
• Docket Number: No. 13-95-089-CV,13-95-089-CV
• Parties: James W. WINKLE, Appellant, v. Frances M. WINKLE, Appellee.
• Court: Texas Court of Appeals

Page 80

951 S.W.2d 80

James W. WINKLE, Appellant, v. Frances M. WINKLE, Appellee.

No. 13-95-089-CV.

Court of Appeals of Texas Corpus Christi.

June 12, 1997.

Rehearing Overruled Aug. 7, 1997.

Richard Orsinger, San Antonio, for Appellant.

Scott T. Cook, William A. Dudley, Cook, Dudley & Associates, Corpus Christi, for Appellee.

Before SEERDEN, C.J., and YANEZ and CHAVEZ, JJ.

OPINION

YANEZ, Justice.

This is an appeal from a reformed final decree of divorce. By seventeen points of error, appellant challenges the sufficiency of the evidence for the finding of fact that he made false and misleading statements to federal investigators regarding the operations of a community corporation, the order to indemnify appellee for any personal liability she may be found to have as a result of a federal investigation into the corporation, the securing of this indemnification through a lien against appellant's separate property, the characterization of a homestead as community property, the securing of reimbursement owed to the community estate through liens against appellant's separate property and against the community property awarded him, the order that he sign a promissory note to secure a money judgment for appellee, the order that he keep appellee on his medical insurance plan temporarily, and the overall property division. Appellant seeks a new division of the marital estate or, in the alternative, a reformed divorce decree. We reverse and remand for a new division of the marital estate and reform the insurance coverage stipulation of the decree.

FACTUAL BACKGROUND

James W. Winkle, appellant, and Frances M. Winkle, appellee, were married on May 10, 1975. Appellant holds a pharmacy degree and has owned his own pharmacy corporation since 1968. Prior to marrying appellee, appellant had been married three times to two different women. Appellee is a high school graduate and a baton twirling instructor. The couple had no children during their marriage. The day before they married, appellant and appellee signed a promissory note to construct an edifice in which to house appellee's baton twirling business on a lot she owned at 328 Saturn in Corpus Christi, Texas. Shortly after the business was established, appellant and appellee established a trophy shop adjacent to it. Once married, appellant and appellee initially resided in a house at 104 Shore Drive in Portland, Texas, which was appellant's separate property. At this time, appellant owned a corporation by the name of Prescription Center, Inc., organized in 1972, which initially ran four pharmacies. Early in the marriage, he reduced the number of pharmacies in the corporation to one. From the early 1980s through the early 1990s, appellant's salary from his pharmacy corporation steadily declined, while revenues to the corporation from rental properties acquired by the corporation steadily increased.

In 1977, the couple moved from 104 Shore Drive into another house, with plans to design and build another home for themselves in the future. The couple eventually contracted for the sale of the home at 104 Shore Drive, contingent on a minimum price and on their ability to purchase a vacant lot at 904 Waterview. The couple expended $1250 in community funds as a down payment on the lot at 904 Waterview. When the sale of the home at 104 Shore closed in late 1977, $23,750 from the sale was applied by the title company directly to the balance due on the lot at 904 Waterview. Appellant then paid for much of the construction of the home on this lot from his separate estate.

While at an international twirling event in Japan in 1982, appellee and an associate, Jackie Stewart, were impressed by a Japanese athletic shoe. Appellant, appellee, and associates Mike Stewart and Jackie Stewart, a married couple, then began investigating the possibility of commercially importing this shoe into the United States. A.B.C. Trading Company in Japan was hired to facilitate the exportation of these shoes. On November 3, 1983, they established In-Step International, Inc. (hereinafter "In-Step") for the purpose of importing and selling the shoes. Appellant served as incorporator; appellant, appellee, the Stewarts, and Alan Kramer constituted the corporation's initial board of directors. By agreement, the Stewarts, residents of Indiana, were to run the northern division of the corporation, while appellant and appellee were to run its southern division. Mr. Stewart served as the initial president of the corporation, and his tenure lasted ten years. Appellant served as treasurer of the corporation for ten years. In July of 1992, the Stewarts resigned as officers of the corporation. In Appellant and appellee separated in late October of 1992. On January 11, 1993, a district court issued temporary orders by agreement of the parties. For the pendency of the divorce, the court ordered that appellee would have sole and exclusive authority over the corporate affairs of In-Step International, and enjoined appellant from interfering in any way with appellee's exclusive control over the corporation. Following their separation, appellee learned that appellant had been having an adulterous relationship over the past several years. In August of 1993, appellee began having a sexual relationship with one of the attorneys hired to represent her in the divorce proceedings. In October of 1993, appellant resigned as both the president of and registered agent for In-Step. In April of 1993, in relation to a separate business activity, Mike Stewart, the former shareholder of In-Step International, was charged with mail fraud and was imprisoned for the offense. In late 1993, appellant hired attorney Robert Berg to investigate whether he might face some criminal charges for an alleged double-invoicing scheme used by In-Step to defraud the United States Customs Service.

October of 1992, appellee purchased from the Stewarts 2100 shares of stock in In-Step, using funds from her separate estate. In consideration of this change in ownership, appellant became the corporation's president and appellee became its secretary/treasurer, effective October 13, 1992.

DIVORCE PROCEEDINGS

Among various findings of fact and conclusions of law, the trial court determined that appellant owed reimbursement to the community from his separate estate for having enhanced his separate estate in breach of his fiduciary duty to the community; that the separate estate of appellee was due reimbursement from the community estate for funds she had used to purchase 2100 shares of In-Step International; that the separate estate of appellant was due reimbursement from appellee's community estate for separate funds used by appellant for the contract to purchase the lot at 904 Waterview; that appellant made false and misleading statements to the U.S. Customs Service concerning the business operations of In-Step International, which could result in appellee being found personally liable; and that the community estate was insufficient to secure the reimbursement due appellee in relation to appellant's breach of fiduciary duty to the community.

In the final reformed divorce decree, from among the various provisions, the court awarded the capital stock of In-Step to appellant's separate estate and directed appellee to turn over the assets of the corporation directly to appellant. The court ordered appellant to indemnify appellee for any personal liability she might incur pursuant to the customs investigation of In-Step. It also awarded appellee the property and improvements at 904 Waterview to her separate estate, and ordered appellant to pay a money judgment in the amount of $178,370 to appellee, with security imposed by a vendor's lien on appellant's separate estate. The court ordered appellant to turn over various deeds and certificates of title to appellee within ten days and to keep appellee on his insurance policy until she received notice of independent insurance coverage.

ANALYSIS OF CLAIMS ON APPEAL

Appellant's first four points of error pertain to the trial court's finding that he made false and misleading statements to the U.S. Customs Service, creating a risk that In-Step would be assessed penalties for having violated customs regulations, and for which appellee could be held personally liable. By his first point of error, appellant challenges both the legal and factual sufficiency of the evidence supporting the finding. Appellant argues that appellee informed him of a double-invoicing procedure that she used in the operation of In-Step as a means of paying lower duties on the imported shoes. He claims that he contacted an attorney to look into this matter solely out of concern about his own possible exposure to possible criminal charges for violations of customs laws. Appellant thus argues there is no basis on record for a finding that he made such "false and misleading" statements or that any of his statements to Customs were made to implicate appellee. By his second point of error, appellant claims that the court's order to indemnify appellee for any personal liability she might be assessed was erroneous as a matter of law, because it violates federal law to assign to him the penalties that may be imposed by Customs on appellee for her wrongful actions. Federal customs law, he argues, preempts state-court jurisdiction over the matter of penalties that the U.S. Customs Service may assess against appellee. Appellant claims the order violates State public policy, too, by allowing for a recovery of damages for liability arising from an illegal transaction. Appellant also argues that the order punishes him for carrying out his duty under law to report his knowledge of the apparent violation of federal law by In-Step. By the third point of error, appellant alleges the trial court erred in finding appellant personally liable for the debts of In-Step, where he was not otherwise personally liable. Appellant argues that, in consideration of the...