Gregory Allen Burr v. Judy Lynn Johnson Burr--Appeal from 272nd District Court of Brazos County

IN THE

TENTH COURT OF APPEALS

No. 10-94-180-CV

GREGORY ALLEN BURR,

Appellant

v.

JUDY LYNN JOHNSON BURR,

Appellee

From the 272nd District Court

Brazos County, Texas

Trial Court # 32,717A-272

O P I N I O N

Gregory Burr (Greg) appeals from a divorce decree and division of the marital estate in three points of error. He first complains of the court's characterization of certain items of property; his second point is leveled at the admission of certain evidence of cruelty as a ground for awarding a disproportionate share of the community estate to his wife, Judy Burr; and in point three Greg alleges that the court failed to consider his separate estate's right of reimbursement from the community estate.

BACKGROUND

Greg and Judy were married for the first time from November 2, 1985, until they divorced on August 27, 1987. They remarried on January 29, 1991. The second divorce occurred on January 27, 1994, and it is from this divorce that Greg appeals. While the parties have stipulated to the ownership of many items of property and other issues incident to divorce, the ownership of a number of items remains contested.

On December 12, 1987, more than three months following their first divorce, Greg was involved in a work-related explosion. He sued for injuries sustained as a result of the explosion, seeking damages for severe post-traumatic stress and depression disorders, mental anguish, grief, past and future medical expenses, past lost earnings and loss of earning capacity, exemplary damages, and pre- and post-judgment interest. Approximately three days following the accident, Judy moved back in with Greg. She claims that a common-law marriage was established at that time, which existed until their second ceremonial marriage. // Greg disputes this contention.

Judy was never a party to Greg's personal injury suit, but by the time it was settled and monies were paid on February 12, 1992, she and Greg had remarried. The settlement documents identified both Greg and Judy as "CLAIMANT" throughout, and they both executed the documents. Furthermore, one paragraph of the release recited:

As part of the consideration for the payment of the above mentioned sum of money, JUDY BURR hereby expressly states . . . and does here and now agree to indemnify and to hold harmless and to defend each and all of the parties hereby released from any and all claims, demands, actions and causes of action for loss of consortium, affection, solace, comfort, companionship, society, assistance, emotional support, love, felicity, care, guidance, protection, services, wages or other loss or damage in connection with any relationship between GREGORY A. BURR and anyone . . . .

The defendant in the personal injury suit made the settlement check payable to both Greg and Judy, and they both endorsed the check. After paying attorney's fees and expenses, Greg and Judy received $100,000 from the settlement. Greg deposited the settlement check into a savings account that had approximately $21 in it. Two days later he withdrew the money and purchased four certificates of deposit (CDs) with $80,000 of the $100,000. He deposited the remaining $20,000 of the settlement proceeds into their joint checking account.

On June 26, 1992, Greg withdrew the funds in three of the CDs totaling $71,229.03 and deposited them back into the savings account. On June 30, he withdrew money from the savings account and made a $64,000 downpayment on a new home. // The Burrs financed the remaining $15,000 of the home's purchase price by a promissory note signed by Greg and Judy. The deed of trust securing the note identified both of them as "grantors."

Greg and Judy made a number of major purchases following the personal-injury settlement, including a sofa, loveseat, two end tables, a coffee table, two marble lamps, and a 52-inch television set. They paid for these purchases out of their joint checking account.

Greg argues that the settlement proceeds were his separate property. He contends that he successfully traced those proceeds to the purchase of the various home furnishings listed above, to the purchase of the CDs, and to the downpayment of the home.

The court, however, concluded that all the property belonged to the parties' community estate or that, alternatively, all property is community except for the home, which is held as tenants in common between the community estate (1/5), the separate estate of Greg (2/5), and the separate estate of Judy (2/5). We hold that the court correctly characterized all of the property as community property. //

CHARACTERIZATION OF PROPERTY

Property possessed by either spouse during or on dissolution of marriage is presumed to be community property, and a party attempting to rebut the presumption must show by clear and convincing evidence that the property is separate property. Tex. Fam. Code Ann. 5.02 (Vernon 1993). A party may meet this burden by tracing assets on hand at dissolution to property that, because of its time and manner of acquisition, is separate in character. Cockerham v. Cockerham, 527 S.W.2d 162, 167 (Tex. 1975). The Texas Family Code provides that a spouse's separate property consists of the following:

(1) the property owned or claimed by the spouse before marriage;

(2) the property acquired by the spouse during marriage by gift, devise, or descent; and

(3) the recovery for personal injuries sustained by the spouse during marriage, except any recovery for loss of earning capacity during marriage.

Tex. Fam. Code Ann. 5.01 (a)(1-3) (Vernon 1993). In addition to the loss of earning capacity exception in section 5.01(a)(3), the Texas Supreme Court has held that recovery for medical and other related expenses, to the extent that the marital partnership has incurred them, is community property. Graham v. Franco, 488 S.W.2d 390, 396 (Tex. 1972).

Greg contends that the settlement check was for personal injuries he sustained prior to marriage and is, therefore, his separate property. However, a cause of action for personal injuries is not "property" that can be "owned or claimed by the spouse before marriage." Id. // At the time of his marriage to Judy, whether informal or ceremonial, Greg did not possess "property" but rather a claim for personal injuries. Therefore, the proceeds of the settlement check, which could have been traceable to Greg's injury, were not traceable to "property owned or claimed by the spouse before marriage." See Tex. Fam. Code Ann. 5.01(1); Graham, 488 S.W.2d at 395.

Greg's claim that the settlement check is his separate property must therefore be based on section 5.01(a)(3), i.e., that recovery for certain elements of a personal injury is the separate property of a spouse. However, allegations in his pleading at the time of the settlement included both separate property damages, such as mental anguish and grief, and community property damages such as loss of earning capacity and medical expenses. See Tex. Fam. Code Ann. 5.01(a)(3); Graham, 488 S.W.2d at 396. Furthermore, although Judy was not a party to the suit, and most likely possessed no viable claim for damages resulting from Greg's injuries, // the defendant in Greg's personal-injury suit paid some consideration for Judy's promise "to indemnify and hold harmless and to defend each and all of the parties hereby released from any and all claims, demands . . . ." Consideration received in exchange for Judy's promise would be community property. See Tex. Fam. Code Ann. 5.01.

The defendant paid the Burrs $100,000 in consideration for a number of things: the release of all of Greg's claims separate property claims and community claims and also Judy's promise to indemnify, hold harmless, and defend. The settlement documents do not distinguish how much was paid in exchange for Judy's promise or for medical expenses and loss of earning capacity, recovery for which would be community property, and how much was paid for Greg's separate-property claims.

Greg had the burden of showing by clear and convincing evidence how much of the settlement was paid in consideration for his separate-property injuries. Without evidence of the settlement breakdown, such a task is impossible. Greg did not successfully trace any portion of the settlement proceeds to monies paid to compensate him for his separate-property damages, and the entire check and all purchases made therefrom are thus properly characterized as community property. See id. 5.02. The trial court properly characterized all of the parties' property as community property, and point one is overruled.

GREG'S CLAIM FOR REIMBURSEMENT

A claim for reimbursement arises when funds or assets from one of the marital estates are used to benefit another marital estate without the contributing estate receiving some benefit. Vallone v. Vallone, 644 S.W.2d 455, 458-59 (Tex. 1982). Greg had the burden to prove that expenditures from his separate estate were made for the benefit of the community estate and that the expenses were reimbursable. See id. Because he failed to establish that the settlement proceeds were, in fact, his separate property, his claim for reimbursement must also fail. See id. We overrule the third point.

ADMISSION OF EVIDENCE OF CRUELTY

Greg and Judy stipulated a number of issues. One stipulation read: "This is not a contest on the issue of divorce. Divorce is granted on insupportability." The court accepted the parties' stipulations, heard no evidence regarding the grounds for divorce, and granted it on the grounds of insupportability.

Greg contends that the court erred in admitting, over his objection, evidence of cruelty in support of Judy's claim for a disproportionate share of the community estate. He claims that, because the parties stipulated that the ground for divorce was insupportability, evidence of cruelty was improperly admitted and could not be considered in the division of the property.

The Texas Supreme Court has held that in a fault-based divorce, or in a divorce based upon both fault and no-fault, the court may properly consider fault in the breakup of a marriage when dividing the parties' property. Murff v. Murff, 615 S.W.2d 696, 698 (Tex. 1981). That court has declined to express an opinion concerning the same issue in a "no-fault" divorce. Young v. Young, 609 S.W.2d 758, 761 (Tex. 1980). Here, even if the court erred in admitting evidence of cruelty, for two reasons we hold that such error was harmless. See Tex. R. App. P. 81(b)(1).

First, Greg failed to show that the property division was, in fact, disproportionate. He never provided values on many of the items of property to the trial court. Rather, he provided values only of those items he contended were purchased with the settlement proceeds and were therefore his separate property.

It is the responsibility of the parties to the suit to produce evidence of the value of various properties in order to provide the trial judge with a basis on which to make the division. One complaining of the action of the trial court in dividing the property must be able to demonstrate from the evidence in the record that the decision arrived at is so unjust and unfair as to constitute an abuse of discretion.

LeBlanc v. LeBlanc, 761 S.W.2d 450, 453 (Tex. App. Corpus Christi 1988), writ denied per curium, 778 S.W.2d 865 (Tex. 1989); Wallace v. Wallace, 623 S.W.2d 723, 725 (Tex. App. Houston [1st Dist.] 1981, writ dism'd). Because Greg did not provide the court values of the majority of the items, he cannot now complain of the court's lack of information. See id.

Second, even if the division of property were disproportionate, factors other than cruelty support the court's division. Other factors a court may properly consider include the spouses' capacities and abilities, education, business opportunities, relative physical conditions, relative financial condition and obligations, and disparity of earning capacity. Murff, 615 S.W.2d at 696. Furthermore, the Texas Supreme Court has noted that the burden of the care and maintenance of the children is a factor that justifies an unequal division of the property. Young, 609 S.W.2d at 760.

The court divided the following property, which was all of the property not included in the parties' stipulations. // It awarded Greg the following: couch, loveseat, two marble lamps, pots, pans, dishes and glasses, one silverware set, the pool table and pool sticks. The court awarded Judy the 52-inch television, six pictures, the centerpiece on top of the television, black vase with flowers, another television, china and hutch, refrigerator, microwave, dishes, glasses, one silverware set, entertainment center, VCR and children's movies, built-in bookcase, washer, dryer, lawn mower, weed eater, garden tools, lawn furniture, pool supplies and toys, two children's bikes, and the playhouse. Additionally, the court awarded Judy the furnishings in the children's bedrooms and bathroom. Greg testified that he did not contest the award of the children's items to Judy because the parties had stipulated that she would be named sole managing conservator of their minor children. Moreover, the court ordered the home set aside for the use and benefit of Judy and the children.

Many of the items awarded to Judy were likely awarded to her as the children's conservator, and the court was justified in so doing. See id. The rights of the children are properly considered in the court's division of the community estate. See Tex. Fam. Code Ann. 3.63(a). The court's findings of fact and conclusions of law note that it had considered the best interest of the children, and that the property division was just and right, having due regard for their rights and the rights of the parties.

There is also evidence from which the court could have reasonably inferred a disparity of earning power between the parties. Greg testified to making approximately $25,000 per year as a furniture finisher. Other than her experience as a housewife, Judy possessed retail sales and clerical experience. Although the record contains no evidence of her earning power, the court could have reasonably inferred that it would be less than $25,000 per year.

When the court divides the community estate, it may do so in a way it deems just and right, having due regard for the rights of each party and any children of the marriage. Tex. Fam. Code Ann. 3.63 (a) (Vernon 1993). It has broad discretion in dividing the property, and we presume that the trial court exercised its discretion properly. See Murff, 615 S.W.2d at 699. The test for abuse of discretion is not whether, in the opinion of the reviewing court, the facts present an appropriate case for the trial court's action, but whether the court acted arbitrarily or unreasonably. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985), cert. denied, 476 U.S. 1159, 106 S. Ct. 2279, 90 L. Ed. 2d 721 (1986). We cannot say from the record before us that the court acted arbitrarily or unreasonably in its division of the property. See Downer, 701 S.W.2d at 241-42.

The judgment is affirmed.

BOB L. THOMAS

Chief Justice

Before Chief Justice Thomas,

Justice Cummings, and

Justice Vance

Affirmed

Opinion issued and filed June 12, 1995

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