C. S. S. v. A. S.

1

C. S. S. Appellant, A. S., Cross-Appellant, v. A. S., Appellee, C. S. S. Cross-Appellee,

No. 03-23-00523-CV

Court of Appeals of Texas, Third District, Austin

September 12, 2024

FROM THE 419TH DISTRICT COURT OF TRAVIS COUNTY NO D-1-FM-19-004143, THE HONORABLE MARIA CANTÚ HEXSEL JUDGE PRESIDING

Before Byrne Chief Justice, Smith and Theofanis Justices.

MEMORANDUM OPINION

Rosa Lopez Theofanis, Justice.

The parties bring cross-appeals from the trial court's final decree of divorce following a bench trial. In four issues C.S.S. (Husband) challenges the legal and factual sufficiency of the evidence to support the trial court's division of the community estate, particularly the trial court's determinations of real property values and A.S.'s (Wife) separate property interests in two houses, and its failure to award post-judgment interest. In her cross appeal, Wife requests attorney's fees. For the following reasons, we affirm the trial court's final decree of divorce.

BACKGROUND

The parties were informally married in September 2003, they ceased living together in 2017 or 2018, and Husband filed for divorce in June 2019.^[1]

The bench trial occurred in October 2022. The parties' disputes concerned the division of the community estate. During their marriage, the parties generally kept their finances separate, but relevant to this appeal, they formed La Tierra de Simmons Familia, Ltd., and Magic Couple, Inc. the 1% general partner of La Tierra. At the time of the parties' divorce, La Tierra owned commercial properties. In the final decree, the trial court awarded La Tierra and Magic Couple to Wife and, based in part on the trial court's determinations of the values of La Tierra's commercial properties, equalized the division of the community estate by awarding Husband $7,613,744.84. The trial court ordered Wife to pay this amount in three equal lump-sum payments of $2,537,914.95, due 180, 360, and 540 days after the final decree was signed and entered.

Both parties testified and presented expert witness testimony as to real property values in the community estate, including opinions as to the values of La Tierra's commercial properties. Wife's expert prepared reports in April 2021 of his opinions on real property values, which reports were admitted as exhibits, but testified that he would need to do "more due diligence" to provide opinions as to market values at the time of trial. He believed that market conditions had changed and that some of the property values had "[l]ikely" increased but also testified that a few of the properties had not increased in value. Husband's expert provided "back of the napkin" opinions of current market values. In response to a motion for reconsideration and without objection from Husband, Wife also provided the trial court with a spreadsheet that included tax appraisal values of La Tierra's commercial properties, which the trial court admitted as an exhibit in the case. The trial court granted the motion for reconsideration in part and increased its determinations of the values of La Tierra's commercial properties for purposes of its division of the community estate.

The parties' disputes also concerned separate property issues, particularly Wife's separate property interests in two houses, the "Glenview" house and the "Cape Cod" house. The parties purchased the Glenview house in 2014. Wife's separate property during the marriage included another house-the "Rocky River" house-that she was under contract to sell and that was scheduled to close on the same day as the closing to purchase the Glenview house. Wife intended to use $200,000 of the proceeds from the sale of the Rocky River house as a downpayment toward the purchase price of $955,000 on the Glenview house. After the closing on the Rocky River house was delayed, Wife obtained a short-term "bridge" loan of $200,000 against her separate property interest in shares of Amy's Ice Creams and used the borrowed funds at closing as the downpayment on the Glenview house. After the closing on the Rocky River house approximately a month later, Wife paid the $200,000 loan off from the proceeds of that house's sale. The evidence was undisputed that Wife was the majority shareholder of Amy's Ice Creams and that her shares, which she had owned prior to the parties' marriage, were her separate property. In the final decree, the trial court awarded the Glenview house to Wife and, for purposes of its division of the community estate, found that Wife had a 20.94% separate property interest in the house.^[2] As to the Cape Cod house, Wife purchased the house in 2019, paying for the house in part with inherited funds. The Wife presented evidence that she paid $154,700 from funds that she had inherited toward the purchase of the Cape Cod house. The purchase price was $1,325,000. In the final decree, the trial court awarded the Cape Cod house to Wife and, for purposes of its division of the community estate, found that Wife had a 11.68% separate property interest in the house.^[3]

Husband filed a motion for new trial, motion for judgment notwithstanding the verdict, and motion to modify the judgment. Among his complaints, Husband contended that the trial court should have awarded him post-judgment interest on the equalization payments. The motions were overruled by operation of law. This appeal followed.

ANALYSIS

Standard of Review

Husband's issues primarily challenge the trial court's division of the community estate and the trial court's characterization of property. We review these types of challenges for an abuse of discretion. Eichhorn v Eichhorn, No. 03-20-00382-CV, 2022 Tex.App. LEXIS 3453, at *4 (Tex. App.-Austin May 20, 2022, no pet.) (mem. op.); see Morris v. Veilleux, No. 03-20-00385-CV, 2021 Tex.App. LEXIS 7878, at *17 (Tex. App.-Austin Sept. 24, 2021, no pet.) (mem. op.) ("We review the trial court's property division for abuse of discretion." (citing O'Carolan v. Hopper, 71 S.W.3d 529, 532 (Tex. App.-Austin 2002, no pet.))); see also Murff v. Murff, 615 S.W.2d 696, 699 (Tex. 1981) (stating that trial court has discretion to balance relevant factors and determine proper division). "The test of whether the trial court abused its discretion is whether the court acted arbitrarily or unreasonably, and without reference to any guiding principles." Morris, 2021 Tex.App. LEXIS 7878, at *17-18 (quoting Hailey v. Hailey, 176 S.W.3d 374, 380 (Tex. App.-Houston [1st Dist.] 2004, no pet.)).

"Here, as in other family law cases, the abuse-of-discretion standard and traditional sufficiency standards of review overlap." Goyal v. Hora, No. 03-19-00868-CV, 2021 Tex.App. LEXIS 4205, at *3 (Tex. App.-Austin May 27, 2021, no pet.) (mem. op.) (citing Sink v. Sink, 364 S.W.3d 340, 344 (Tex. App.-Dallas 2012, no pet.)). "In these cases, legal and factual insufficiency are not independent grounds of error but are relevant factors in assessing whether the trial court abused its discretion." Id. (citing Coburn v. Moreland, 433 S.W.3d 809, 823 (Tex. App.-Austin 2014, no pet.); Zeifman v. Michels, 212 S.W.3d 582, 587 (Tex. App.-Austin 2006, pet. denied)). "Thus, in determining whether the trial court abused its discretion, we consider whether the court had sufficient evidence upon which to exercise its discretion, and if so, whether it erred in the application of that discretion." Id. at *3- 4 (citing Coburn, 433 S.W.3d at 823; Zeifman, 212 S.W.3d at 588). "When the record contains some evidence of a substantive and probative character supporting the trial court's decision, there is no abuse of discretion." Id. at *5 (citing Tran v. Nguyen, 480 S.W.3d 119, 128 (Tex. App.-Houston [14th Dist.] 2015, no pet.); Echols v. Olivarez, 85 S.W.3d 475, 477 (Tex. App.-Austin 2002, no pet.)).

Real Property Valuations

In his first issue, Husband argues that the expert testimony presented by Wife on the value of real property in the community estate was legally and factually insufficient to establish the value of the community assets as of the date of divorce and, therefore, that the trial court erred and/or abused its discretion in relying on this testimony to value the real property in the community estate.

"In a decree of divorce or annulment, the 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. "We presume on appeal that the trial court correctly exercised its discretion when dividing property in a divorce proceeding, and the appellant bears the burden to show from the record that the division was so disproportionate, and thus unfair, that it constitutes an abuse of discretion." O'Carolan v. Hopper, 414 S.W.3d 288, 311 (Tex. App.-Austin 2013, no pet.) (citing Grossnickle v. Grossnickle, 935 S.W.2d 830, 836 (Tex. App.-Texarkana 1996, writ denied)).

In general, "market value" is the method to value community property that is to be divided in a divorce proceeding. R.V.K. v. L.L.K., 103 S.W.3d 612, 618 (Tex. App.-San Antonio 2003, no pet.); accord Mandell v. Mandell, 310 S.W.3d 531, 536 (Tex. App.-Fort Worth 2010, pet. denied). "Fair market value has been consistently defined as the amount that a willing buyer, who desires to buy, but is under no obligation to buy would pay to a willing seller, who desires to sell, but is under no obligation to sell." R.V.K., 103 S.W.3d at 618 (quoting Wendlandt v. Wendlandt, 596 S.W.2d 323, 325 (Tex. App.-Houston [1st Dist.] 1980, no writ)).

For purposes of determining the division of the community estate the trial court generally values community assets as of the date of divorce. O'Carolan, 414 S.W.3d at 311. "In valuing the assets in the estate, if several...