Eckhardt v. Eckhardt

695 S.W.3d 883

Joshua Neal ECKHARDT, Appellant

v.Angelica Patricia ECKHARDT, Appellee

NO. 01-23-00332-CV

Court of Appeals of Texas, Houston (1st Dist.).

Opinion issued July 2, 2024

On Appeal from the 246th District Court, Harris County, Texas, Trial Court Case No. 2022-11071

Maria Lowry, Houston, Dawn A. Renk- en, for Appellee.

Aaron B. Pickelner, Houston, Susan J. Clouthier, The Woodlands, for Appellant.

Susan J. Clouthier, Clouthier Law, PLLC, The Woodlands, Texas, for Appellant.

Dawn Renken, Renken Law Firm, PLLC, Houston, Texas, for Appellee.

Panel consists of Justices Kelly, Countiss, and Rivas-Molloy.

OPINION

Peter Kelly, Justice

This appeal concerns the division of property between divorcing spouses. Joshua Eckhardt contends that the trial court erred by characterizing a house and an individualized retirement account as community property rather than as his separate property. We affirm.

Background

Angelica Eckhardt filed for divorce from Joshua Eckhardt after approximately 9 years of marriage. Joshua filed a counterpetition for divorce, claiming ownership of certain separate property not part of the community estate and requesting the trial court confirm that property as his separate property.

The case proceeded to trial. The couple had no children; their dispute concerned the division of property only. The focus of the trial was the distribution of marital property, specifically two houses, the "Brisk Spring" house and the "Walnut Glen" house, and an individualized retirement account held at JPMorgan ("IRA" or "JPMorgan IRA"). Both parties testified at trial.

After trial, the trial court determined the just and right property division. From the community estate, the trial court awarded Angelica the Brisk Spring house and ordered that she was responsible for the balance due on its mortgage. The trial court awarded Joshua the Walnut Glen house from the community estate and ordered that he was responsible for the balance of its mortgage. The court ordered that the parties equally split the funds in the JPMorgan IRA. The court allocated other assets and debts of the community estate to each party. These are not in dispute. The court confirmed that several home furnishings were Angelica’s separate property and that an orange sofa and a sword stand were Joshua’s separate property.

Standard of Review

[1, 2] In family law cases in which the appellate standard of review is abuse of discretion, legal and factual sufficiency of the evidence are not independent grounds for asserting error but are instead relevant factors in assessing whether the trial court abused its discretion. Kelly v. Kelly, 634 S.W.3d 335, 346 (Tex. App.—Houston [1st Dist.] 2021, no pet.); Syed v. Masihuddin, 521 S.W.3d 840, 847 (Tex. App.—Houston [1st Dist.] 2017, no pet.). In determining whether an abuse of discretion exists because the trial court’s decision is not supported by legally or factually sufficient evidence, we consider whether the trial court had sufficient information upon which to exercise its discretion and whether it erred in its application of that discretion. Kelly, 634 S.W.3d at 346.

[3, 4] When conducting a legal sufficiency review, we review the evidence in a light favorable to the finding, crediting favorable evidence if a reasonable factfinder could do so and disregarding contrary evidence unless a reasonable factfinder could not. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005); Syed, 521 S.W.3d at 847 n.4. If the evidence would enable reasonable and fair-minded people to differ in their conclusions, then the factfinder must be allowed to decide. Syed, 521 S.W.3d at 847 n.4; see City of Keller, 168 S.W.3d at 827 ("The final test for legal sufficiency must always be whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review."). As long as the evidence falls within the zone of reasonable disagreement, we may not substitute our judgment for that of the factfinder. Syed, 521 S.W.3d at 847 n.4.

[5, 6] The standard of review for evidentiary sufficiency is heightened when the burden of proof at trial is clear and convincing evidence. See In re J.F.C., 96 S.W.3d 256, 266-67 (Tex. 2002); Watson v. Watson, 286 S.W.3d 519, 523 (Tex. App.— Fort Worth 2009, no pet.). "Clear and convincing evidence" is that 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. Watson, 286 S.W.3d at 523; Tex Fam Code § 101.007. A spouse seeking to establish the separate character of property must prove the property’s character by clear and convincing evidence. Tex Fam Code § 3.003(b); Watson, 286 S.W.3d at 523.

[7–9] In a legal sufficiency review of a finding concerning the separate character of property, we review 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 the finding was true. Watson, 286 S.W.3d at 523; see Boyd v. Boyd, 131 S.W.3d 605, 611 (Tex. App.—Fort Worth 2004, no pet.) ("While the proof must weigh heavier than merely the greater weight of the credible evidence, there is no requirement that the evidence be unequivocal or undisputed."). In reviewing the evidence for factual sufficiency, we must give due consideration to evidence that the factfinder could reasonably have found to be clear and convincing. Boyd, 131 S.W.3d at 611. We determine whether, based on the entire record, a factfinder could reasonably form a firm belief or conviction that the allegations were proven. Id.

[10, 11] The factfinder is the only judge of testimonial weight. Willis v. Willis, 533 S.W.3d 547, 556 (Tex. App.—Houston [14th Dist.] 2017, no pet.). When the testimony of witnesses is conflicting, we will not disturb the credibility determinations made by the factfinder, and we presume that the factfinder resolved any conflicts in favor of the verdict. Syed, 521 S.W.3d at 848.

Characterization of Property

On appeal, Joshua argues that the trial court erred when it incorrectly categorized the JPMorgan IRA and the Walnut Glen house as community property. We disagree.

A. Governing Law

[12, 13] 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. Each spouse bears the burden to present sufficient evidence of the value of the community estate to enable the trial court to make a just and right division. Fuentes v. Zaragoza, 555 S.W.3d 141, 162 (Tex. App.—Houston [1st Dist.] 2018, no pet.). We review the trial court’s rulings on the property division for an abuse of discretion. Id ; Willis, 533 S.W.3d at 551 ("We will not disturb the property division on appeal unless the appellant demonstrates that the trial court clearly abused its discretion by a division or an order that is manifestly unjust and unfair.").

[14, 15] The trial court has wide latitude in dividing the community estate, and we presume that the court properly exercised its discretion. Fuentes, 555 S.W.3d at 162; Roberts v. Roberts, 531 S.W.3d 224, 232 (Tex. App.—San Antonio 2017, pet. denied). The trial court abuses its discretion in dividing the community estate if insufficient evidence supports the division. Fuentes, 555 S.W.3d at 162.

[16, 17] A spouse’s separate property consists of (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 Const art. 16, § 15; Tex Fam Code § 3.001; Eggemeyer v. Eggemeyer, 554 S.W.2d 137, 140 (Tex. 1977) ("The nature of property is fixed by the Texas Constitution, and not by what is ‘just and right.’ "). The trial court lacks authority to divest a spouse of separate property. Pearson v Fillingim, 332 S.W.3d 361, 364 (Tex. 2011) (per curiam); Viera v. Viera, 331 S.W.3d 195, 204 (Tex. App.—El Paso 2011, no pet.). "If the trial court mischaracterizes a spouse’s separate property as community property and awards some of the property to the other spouse, then the trial court abuses its discretion and reversibly errs." Sharma v. Routh, 302 S.W.3d 355, 360 (Tex. App.— Houston [14th Dist.] 2009, no pet.).

Community property consists of the property, other than separate property, acquired by either spouse during the marriage. Tex Fam Code § 3.002. We presume that property possessed by either spouse during or on dissolution of the marriage is community property. Tex Fam Code § 3.003(a); Villalpando v. Villalpando, 480 S.W.3d 801, 806 (Tex. App.—Houston [14th Dist.] 2015, no pet.). The spouse seeking to establish that property is separate property must establish the separate character of the property by clear and convincing evidence. Tex Fam Code § 3.003(b); Pearson, 332 S.W.3d at 364 ("All property acquired during a marriage is presumed to be community property, and the burden is placed on the party claiming separate property to prove otherwise "); Sink v Sink, 364 S.W.3d 340, 344 (Tex. App.—Dallas 2012, no pet.) ("[A] party who seeks to assert the separate character of property must prove that character by clear and convincing evidence.").

[18, 19] Generally, whether property is separate or community property is determined by its character at inception. Barnett v. Barnett, 67 S.W.3d 107, 111 (Tex. 2001); Leax v. Leax, 305 S.W.3d 22, 33 (Tex. App.—Houston [1st Dist.] 2009, pet. denied); McClary v. Thompson, 65 S.W.3d 829, 834 (Tex. App.—Fort Worth 2002, pet. denied) ("Most forms of property, including real estate, life insurance policies, and stock options, have been characterized as community or separate based upon their character at inception."). "Inception of title...