Aurora Cervantes v. Santos A. Garcia--Appeal from County Court At Law No 1 of Webb County

MEMORANDUM OPINION
No. 04-05-00717-CV
Maria A. Cervantes GARCIA,
Appellant
v.
Santos A. GARCIA,
Appellee
From the County Court at Law No. 1, Webb County, Texas
Trial Court No. 2003-CVH-284-CI
Honorable Alvino J. Morales, Judge Presiding

Opinion by: Phylis J. Speedlin, Justice

 

Sitting: Sandee Bryan Marion, Justice

Phylis J. Speedlin, Justice

Rebecca Simmons, Justice

 

Delivered and Filed: January 31, 2007

 

AFFIRMED IN PART; REVERSED IN PART

Maria A. Cervantes Garcia appeals a final decree of divorce raising various issues with regard to the division of property and the denial of certain claims. We reverse the portions of the trial court's judgment awarding Santos A. Garcia all funds accrued in his retirement account and rejecting Maria's economic contribution claim. The remainder of the trial court's judgment is affirmed.

1. In her first issue, Maria contends that the trial court erred in awarding Santos a credit for the temporary support payments he made to Maria. In its findings of fact and conclusions of law, the trial court stated:

The court finds that the parties agreed at a temporary orders hearing held on April 7, 2003 that the husband would make advance payments to the wife of her share of the community estate in the amount of $150 per week. The court finds that the wife agreed to this and that she accepted the money as it was paid to her.

The trial court then granted Santos a credit for $9,000.00 against a portion of the community estate awarded to Maria. The reporter's record from the temporary orders hearing reflects that Maria was represented by counsel at the hearing. In response to the trial court's inquiry as to whether counsel wanted to wait for his client, Maria, to appear at the hearing, counsel stated, "I think we'd like to go ahead and go and go through with this only for the fact that I know that this was the agreement that - that they had already made since last week." Based on the agreement, the trial court entered an order directing Santos to pay Maria but stating that any and all payments "shall be deducted from the division of property awarded to Maria A. Garcia."

The trial court has broad discretion in dividing the marital estate, and we presume the trial court exercised its discretion properly. Murff v. Murff, 615 S.W.2d 696, 698 (Tex. 1981); Prague v. Prague, 190 S.W.3d 31, 40 (Tex. App.--Dallas 2005, pet. denied). Maria relies on Herschberg v. Herschberg to assert that a temporary support order should not be used to make an interim division of property. 994 S.W.2d 273, 278 (Tex. App.--Corpus Christi 1999, no pet.). In this case, the trial court did not make an interim division of property, the trial court simply incorporated the parties' agreement into the terms of the temporary order. The case relied upon by Maria states, "[U]pon final division, the equities of the parties and final adjustments for the amount of temporary support may be taken into consideration in making a just and right division of the marital estate." Id. at 278. Accordingly, the trial court properly took the amount of temporary support paid to Maria into consideration upon the final division of the property. Although Maria testified that she did not consent to the credit, the trial court entered its final decree after a trial on the merits. At that point, the trial court had the authority to evaluate the credibility of the witnesses and enter the final decree containing the credit irrespective of whether Maria consented to the credit at the time of the final decree. In re L.A.M., No. 14-05-00166-CV, 2006 WL 162617, at *2 (Tex. App.--Houston [14th Dist.] Jan. 24, 2006, no pet.) (holding trial court has discretion to enter final order without party's consent even if temporary orders are based on the agreement of the parties).

2. In her second issue, Maria raises numerous challenges to the division of the property. The trial court is required to divide the estate of the parties in a manner that is just and right having due regard for the rights of each party. Tex. Fam. Code Ann. 7.001 (Vernon 2006). As previously noted, the trial court has broad discretion in dividing the marital estate, and we presume the trial court exercised its discretion properly. Murff, 615 S.W.2d at 698; Prague, 190 S.W.3d at 40. The party who complains of the trial court's division of property must demonstrate from evidence in the record that the division was so unjust that the trial court abused its discretion. Prague, 190 S.W.3d at 40-41. It is this court's duty to consider every reasonable presumption in favor of the proper exercise of discretion by the trial court in dividing the community estate. Murff, 615 S.W.2d at 699; Prague, 190 S.W.3d at 41.

a. Maluga's/2121 Loop 20

Maria contends that the trial court erred because it failed to consider evidence that Santos should have paid the note used to purchase the real property at 2121 Loop 20 with the rental received from the restaurant located on the property. (1) Santos testified, however, that the property was purchased for $54,000.00, and he thought there were two notes. One note was for $38,000.00, and had a balance remaining of $33.000.00. The second note Santos thought was for $16,000.00. The only note with a balance remaining was the $38,000.00 note. Santos testified that he had been using the rent to pay the note, and was also using income from the Movie Palace Video business to pay the note. Santos also noted that he had been paying interest on the note in addition to the $5,000.00 paid toward the principal over the four years the note had been in existence. Santos further noted that he had to pay taxes on the property.

The trial court entered the following finding with regard to this property:

The property referred to as "Maluga's" located at 2121 Loop 20 and legally described as Lot 6, Block 1626, Laredo, Webb County, Texas was purchased for $54,000.00, on November 8, 2000 - during the marriage. The current fair market value is $36,930.00, and the balance remaining on the note for said realty is $33,000.00. The husband is awarded the realty and the wife is awarded $10,500.00, to be paid by the husband to the wife for her share of the realty. Said award is calculated by subtracting the debt remaining on the note from the purchase price (rather than the value) and dividing by two. Had the value been used, as a starting point, instead of the purchase price the amount awarded to the wife would have been $1965.00. This would not have been fair and equitable, and just and right, with regard to the wife.

 

Accordingly, the trial court did take into consideration the amount of debt remaining on the property in determining the just and right division by using the purchase price instead of the property's value as a starting point. Moreover, although Maria testified she thought the rent was to be used to pay the note, Maria did not establish that Santos unfairly disposed of the income from the rent. See Connell v. Connell, 889 S.W.2d 534, 541 (Tex. App.--San Antonio 1994, writ denied) (noting unfair disposition of other spouse's community property creates a presumption of fraud on the community). Finally, Santos introduced an appraisal of the property that revealed that although the market value of the property was $36,930.00, the improvement, which was a trailer home located on the property valued at $16,510.00, was Santos's separate property. As a result, the value of the land was only $20,420.00. Under the circumstances, the trial court did not abuse its discretion in the manner in which it divided the value of the property.

b. Retirement Account

Santos concedes that the evidence at trial showed that he agreed to a division of his retirement account and believes the trial court made a clerical error in not including this division in the final decree. Although the trial court's findings state that no request was made by the wife, Maria testified that she was requesting one-half of the retirement, and Santos testified that he did not have any problems with Maria getting retirement. Accordingly, this issue is sustained, and the trial court's judgment is reversed in so far as it fails to order a division of Santos's retirement.

c. Home Furnishings, Vehicles, Bank Accounts, and Credit Accounts

Maria contends that the trial court abused its discretion in awarding the household furnishings, vehicles and accounts to the party in possession of them and ordering the parties to pay the credit cards in their names. With regard to the credit cards, Maria does not provide any record citation in her brief to support her argument, and no evidence was presented in the record to establish that any specific credit card debt was community debt. Maria did, however, testify that she incurred credit card debt to establish a new business after the parties separated. The trial court's findings of fact and conclusions of law state that the division of these items was not contested at trial. Although Maria provides a record citation to Santos's testimony regarding the furnishings that remained in his possession, Maria did not testify that she contested the trial court awarding Santos those furnishings. Each party was awarded the vehicle they were then driving, and Maria was not ordered to reimburse Santos for the payments he made on her vehicle after the separation. The parties had been separated almost fifteen months before trial and almost two and one-half years before the trial court signed the divorce decree. Given the amount of time that had elapsed and the lack of testimony in the record directly challenging the division, the trial court did not abuse its discretion in awarding each party the items in their possession and ordering the parties to pay their own debts.

d. Fault

Maria asserts that the trial court erred in failing to take into consideration that Santos was at fault in the break-up of the marriage. Maria relies on her testimony regarding the couple's lack of intimacy during the marriage and a letter showing that she received professional counseling on January 11, 2002, and November 6, 2002, to address her depression and anxiety due to her marriage problems. However, Maria also testified that the couple decided to separate because she was going back to Eagle Pass. Maria described the couple's relationship toward the end as a "very good relationship," stating that Santos "would give me everything." Santos testified that the decision to divorce was a mutual agreement because "basically we fell out of love." The trial court found that the marriage had "become insupportable because of discord or conflict of personalities that destroys the legitimate ends of the marital relationship and prevents any reasonable expectation of reconciliation." The evidence supports the trial court's finding, and the trial court did not abuse its discretion in refusing to consider "fault" in the property division.

 

e. Strip Mall

The evidence is undisputed that the property referred to as a strip mall was legally owned by a third party who sold the property before the divorce was finalized. Although the record contains a written agreement between the third party and Santos in which Santos agreed to provide part of the initial financing for the property in return for 50% of any profit from the partnership or from the sale of the property, the sales contract shows that all of the money from the transaction was payable to the third party who held title to the property. Santos's attorney had repeatedly stated that if Maria wanted to pursue Santos's equitable right to the sales proceeds as community property, she would need to join the third party as a third party defendant. Maria chose not to amend her pleadings. Given the tentative nature of the ability to recover the money from the third party, the trial court awarded each party 1/2 of whatever payments the third party made to Santos as a result of the sale.

Maria raises numerous complaints about the trial court allowing an exhibit to be introduced into evidence showing the amount of money Santos expected to receive from the third party. Santos challenges whether Maria preserved error with regard to these complaints. After Maria's attorney had taken Santos on voir dire regarding the exhibit, the following exchange occurred:

MS. MENDEZ: Your honor, I'm not - I'm not going to allow - I'm going to object to Respondent's Exhibit Number 5. Obviously, these are not expenses that are part - that are shown either on the warranty deed, which is a certified copy, or even that - that earnest money contract. I guess if he's saying - it - it's something that between him and Mr. Uresti, but these are expenses that - I mean it's not signed by Mr. Uresti.

 

THE COURT: It's a document -

 

(The parties spoke over one another.)

MS. MENDEZ: I mean he didn't prepare -

 

(The parties spoke over one another.)

 

THE COURT: - not signed by Mr. Uresti and not signed by -

 

MS. MENDEZ: No.

 

THE COURT: - the Respondent, Mr. Pena?

 

MS. MENDEZ: It's not signed -

 

MR. PENA, SR.: Your honor, I'm only offering it for the limited purpose of having the client explain his understanding as to the breakdown -

 

THE COURT: To the expenses of the sale of the property in San Antonio?

 

MR. PENA, SR.: Yes, sir.

 

THE COURT: I'll allow it for - just that - just for the limited -

 

MS. MENDEZ: Well yeah, but the - the problem is - is it - it's - it's not on any of the documents as an expense to the transaction. It's something that - that they're telling me -

 

THE COURT: Well you can ask him on - on - on cross examination how did he get to these - to these figures here. And then -

 

MS. MENDEZ: Well, no , it's not going to help me because what's going to happen is that's - they're going to take it off of his share which comes off of her share. And how do I know that -

 

THE COURT: Well they're not going to do anything. The court is going to - to look into that, Ms. Mendez. I'll allow it for that - for that purpose, if he - if he knows. If he doesn't know, then - then he doesn't know, Mr. Pena.

 

Maria's attorney never lodged a specific hearsay objection. Moreover, Santos testified without objection to the same evidence that was contained in the exhibit. During direct examination by Maria's attorney, Santos stated that he would receive $36,000.00 over the course of fifteen years. Santos explained that numerous expenses had to be paid from the sales proceeds before any money was to be paid to him or the third party. Santos explained that the expenses included federal income tax, a CPA fee, a brokerage fee, and management fees. Accordingly, even if the error had been preserved and the trial court erred in admitting the exhibit, any such error was harmless. See Tex. R. App. P. 44.1(a); Interstate Northborough P'ship v. State, 66 S.W.3d 213, 220 (Tex. 2001).

f. Overall Division

Maria provides a summary of the value of the divided assets and debt and contends that the overall division was not just and right. Maria's summary ignores the debt Santos was ordered to pay with regard to various assets he was awarded. For example, Maria's summary does not include the $33,000.00 debt that remained outstanding on the Maluga's property. Maria also includes the retirement account as being awarded to Santos; however, Santos has conceded that the trial court erred in not dividing the retirement account. Maria's summary also lists the cash award she was given for the Maluga's property as $1,500.00 even though Maria was actually awarded $10,500.00, which was only subsequently reduced by a credit for the temporary support paid to Maria. Finally, Maria includes credit card community debt in her summary; however, no testimony was provided to establish that any specific credit card debt was community debt. Having overruled all but one of Maria's complaints as to the individual assets, we also overrule Maria's challenge to the overall division of the assets and debt.

g. Attorney's Fees

Maria finally contends that the trial court erred in ordering Maria to pay her own attorney's fees. Maria bases her complaint on her contention that the division of property was in Santos's favor and the trial court ignored Santos's fault. We previously rejected each of these contentions based on the evidence presented. Accordingly, the trial court did not abuse its discretion in ordering Maria to pay her own attorney's fees.

 
Economic Contribution

Maria finally contends that the trial court erred in denying her claim for economic contribution. Economic contribution is the dollar amount of the reduction of the principal amount of a debt secured by a lien on property owned before marriage, to the extent the debt existed at the time of marriage. Tex. Fam. Code Ann. 3.402 (Vernon 2006); see also Sheshtawy v. Sheshtawy,

150 S.W.3d 772, 779 (Tex. App.--San Antonio 2004, pet. denied) (referring to economic contribution as separate theory from reimbursement). The evidence conclusively established that Santos had borrowed funds before the marriage to pay for an improvement on his separate property that was secured by a lien against his separate property. Santos testified that the balance on the note at the time of the marriage was approximately $26,000.00, and Santos admitted that the note was paid during the marriage. (2) The trial court rejected the claim for economic contribution asserting that no claim or request was made for economic contribution at trial. Maria, however, did include a claim for reimbursement of community funds applied toward Santos's separate property. Although the petition uses the term "reimbursement," the evidence that was presented without objection shows that Maria was asserting a claim for economic contribution. During closing argument, Maria's attorney stated that Maria was seeking one-half of the balance paid on the note in question during the marriage. Accordingly, the record establishes that Maria did assert a claim or request for economic contribution, and the trial court erred in rejecting the economic contribution claim based on the absence of a claim or request. In his brief, Santos poses various theories or reasons the trial court could have rejected the economic contribution claim; however, the trial court's findings of fact and conclusions of law establish that the claim was erroneously rejected based on the absence of a claim or request. Whether the evidence would otherwise support such a claim is a factual determination that this court is not permitted to make. See Texas Nat'l Bank v. Karnes, 717 S.W.2d 901, 903 (Tex. 1986) (asserting court of appeals cannot make original findings of fact but can only "unfind" facts). Accordingly, whether Maria has established a claim for economic contribution is a factual determination that the trial court will be required to make on remand.

Reimbursement

A party claiming the right of reimbursement must plead and prove that the expenditures and improvements were made and that they are reimbursable. Garza v. Garza, No. 04-03-00888-CV, 2006 WL 2871256, at * 2 (Tex. App.--San Antonio Oct. 11, 2006, no pet. h.). Whether the situation involves the payment of a purchase money debt or a capital improvement, the enhancement value is the measure of reimbursement. Id. The enhanced value of separate property is the difference between the fair market value before and after any improvements made by the community during the marriage. Id. Reimbursement is not available as a matter of law, but lies within the discretion of the court. Id. The trial court should not simply return to the spouse seeking reimbursement the actual amount advanced to the other spouse's separate estate without regard to the benefits received in turn by the community estate. Id.; see also Nelson v. Nelson, 193 S.W.3d 624, 633 (Tex. App.--Eastland 2006, no pet.).

Maria's contention that she is entitled to a return of the money used to pay the note that had been outstanding on the Movie Palace Video is contrary to the law regarding reimbursement that the trial court should not simply return the amount advanced without regard to the benefits received. Garcia, 2006 WL 2871256, at *2; Nelson, 193 S.W.3d at 633. No testimony was introduced to establish whether there was any enhancement in the fair market value of the Movie Palace Video during the marriage. Accordingly, the trial court did not abuse its discretion in concluding that Maria had failed to sustain her burden of proof as to her reimbursement claim.

Conclusion

The portions of the trial court's judgment awarding Santos all funds accrued in his retirement account and rejecting Maria's economic contribution claim are reversed, and the cause is remanded to the trial court for the entry of a judgment dividing the retirement account and for further consideration of the economic contribution claim. The remainder of the trial court's judgment is affirmed.

Phylis J. Speedlin, Justice

 

1. Although Maria's brief states that the rental during the marriage totaled $32,400.00, in her testimony at trial, she stated that the rental payments would roughly total $29,000.00. In addition, the calculation in Maria's brief fails to take into consideration Santos's testimony that he paid interest on the note and also agreed to credit the renters $100.00 each month for thirty months to cover the expenses for adapting the property to serve the restaurant's purposes including the installation of water and sewer systems.

2. Although Santos relies on his testimony that the loan was paid with "prior money," Santos also testified that the note was paid off during the marriage and that the money came from Movie Palace Video income.