In re B.R.

IN THE INTEREST OF B.R., A MINOR CHILD

No. 05-20-01087-CV

Court of Appeals of Texas, Fifth District, Dallas

April 11, 2022

On Appeal from the 469th Judicial District Court Collin County Texas Trial Court Cause No. 469-54745-2016

Before Justices Schenck, Molberg, and Pedersen, III

MEMORANDUM OPINION

DAVID J. SCHENCK JUSTICE

A.R ex-husband of O.R. and father of B.R., appeals a final decree of divorce. In four issues, A.R. asserts the trial court erred in admitting the valuation opinions of O.R.'s expert, in its division of the community estate, in ordering his possession of and access to B.R. to be supervised, and in ordering him to pay child support in the amount of $1, 710 per month. We affirm. Because all issues are settled in law we issue this memorandum opinion. Tex.R.App.P. 47.4.

Background

A.R and O.R. were married on December 18, 2004. One child, B.R., was born to the marriage on July 23, 2010. During their marriage, A.R. and O.R. acquired many assets including a primary residence, numerous rental properties, and various businesses.

O.R. initiated this divorce proceeding on August 29, 2016, alleging A.R. committed adultery and seeking sole managing conservatorship over B.R., as well as child support. On December 22, A.R. filed a counter petition for divorce. Both parties sought a disproportionate share of the parties' estate.

On December 19, 2016, the trial court held a hearing on temporary orders. On January 11, 2017, the trial court signed temporary orders which appointed A.R. and O.R. temporary managing conservators and made a preliminary allocation of the parties' estate as follows:

To O.R., the vehicle in her possession and use and possession of real properties including (the marital residence), and three other local residences and various apartment units.

To A.R., the vehicle in his possession and exclusive use and possession of Atica Nails, Inc., Alpha Design, Inc., and two salons in Europe.

In addition, the trial court ordered O.R. to account for the rental income and expenses from the properties, and A.R. to account for the income and expenses of Atica Nails, Alpha Design, and the two salons in Europe and to pay child support and provide medical insurance for B.R.

A.R. failed to comply with his accounting and child-support-payment obligations under the January 11 orders, claiming there was nothing to report as the businesses were inactive and that he earned no income and, thus, could not pay child support. On August 16, 2017, the trial court signed an order holding A.R. in contempt for failing to make child-support payments and for failing to provide the accounting required by the January 11 orders.

Over the course of three days in September 2018, the trial court conducted a trial on the merits. During the trial, the trial court heard testimony concerning A.R.'s ownership of a business known as Atica Nails, Inc. ("Atica Nails"), with operations in the United States and Europe; that he had recently taken several trips in furtherance of that business; and that he routinely shields his income from detection and avoids paying income taxes in the United States. The Certified Public Accountant O.R. engaged to provide valuation opinions, opined, conservatively, that Atica Nails had a value ranging between $1, 200, 000 and $1, 320, 000. A.R. did not offer any controverting expert testimony and instead claimed the business no longer existed and had no value and asserted that his sole income was approximately $1, 000 per month, from the delivery of auto parts to auto repair shops.

On March 3, 2019, the trial court issued a memorandum ruling^[1] and, on June 2, an amended memorandum ruling. On June 3, the trial court held a hearing on a request for a temporary restraining order and issued a memorandum ruling requiring A.R.'s possession of B.R. to be supervised. On December 14, 2020, the trial court signed the amended decree of divorce, which is the subject of this appeal. In that decree, the trial court ordered, in relevant part:

that O.R. and A.R. are divorced and that the marriage between them is dissolved for the reason that A.R. has committed adultery.

that A.R. has the right to supervised possession of B.R. on the first, third and fifth Saturdays of each month beginning a 10 a.m. until 2 p.m. the same day, and on Wednesdays beginning at 6 p.m. until 8 p.m. the same day.

That B.R. shall continue to attend therapy.

that A.R. pay to O.R. child support of $1, 710 per month.

that A.R. is awarded: all household furniture, furnishings, fixtures, goods, art objects, collectibles, appliances, equipment, clothing, jewelry and other personal effects in his possession or subject to his sole control; all sums of cash in his possession or subject to his sole control; a 1998 Mitsubishi; a 2009 Range Rover; a 2008 Mazda; 100% ownership interest in Alpha Design, Inc., and Atica Nails, Inc.; and real property located within Denton County.

that O.R. is awarded: all household furniture, furnishings, fixtures, goods, art objects, collectibles, appliances, equipment, clothing, jewelry and other personal effects in her possession or subject to her sole control; all sums of cash in her possession or subject to her sole control; a 2008 Lincoln MKX motor vehicle; 100% ownership interest in Crystal Investment Property, LLC; real properties located in Dallas County; proceeds recovered from the foreclosure on one of the properties; and the remaining proceeds from the sale of two properties.

that A.R. is to pay: any and all debts, charges, liabilities, and other obligations incurred solely by A.R.; the balance due on the promissory note for the vehicle awarded to A.R.; all encumbrances, ad valorem taxes, liens, assessments, or other charges due or to become due on the real and personal property awarded to A.R.; balance due on and equity loan; $10, 000 to O.R. for expert fees; and $25, 314 to O.R. for rents ordered to be paid in the further temporary orders dated May 24, 2017. that O.R. is to pay: any and all debts, charges, liabilities, and other obligations incurred solely by O.R.; the balance due on the promissory note for the vehicle awarded to O.R.; and all encumbrances, ad valorem taxes, liens, assessments, or other charges due or to become due on the real and personal property awarded to O.R.

That various real properties are A.R. sole and separate property. The court entered findings of fact and conclusions of law that are consistent with the final decree. This appeal followed.

Discussion

I. Expert Testimony

In his first issue, A.R. urges O.R.'s expert, Larry Settles, a Certified Public Accountant specializing in forensic investigative accounting and business valuation, was not qualified to opine as to the value of real estate and his testimony concerning the value of Atica Nails was not based on a reliable foundation. Thus, concludes A.R., the trial court erred in admitting Settles' opinions concerning same.

A. Standard of Review

Expert testimony is admissible if (1) the expert is qualified, and (2) the testimony is relevant and based on a reliable foundation. E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549, 556 (Tex. 1995). The trial court's determination that these requirements are met is reviewed for abuse of discretion. Cooper Tire & Rubber Co. v. Mendez, 204 S.W.3d 797, 800 (Tex. 2006). The test for abuse of discretion is whether the trial court acted without reference to any guiding rules or principles. Robinson, 923 S.W.2d at 558.

Texas Rule of Evidence 702 provides:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if the expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue.

There are many factors that a trial court may consider in making the threshold determination of admissibility under Rule 702. The factors a trial court will find helpful in determining whether the underlying theories or techniques of the proffered evidence is reliable will differ in each case. Robinson, 923 S.W.2d at 557. When, as here, the expert relies on experience and training rather than a particular methodology to reach his or her conclusions, reviewing courts determine whether there may be simply too great an analytical gap between the data and the opinion proffered for the opinion to be reliable. Gammill v. Jack Williams Chevrolet, Inc., 972 S.W.2d 713, 726 (Tex. 1998).

B. Value of Real Estate

Settles acknowledged, and the trial court recognized, that he is not an expert in real estate values and that he was not purporting to give expert opinions on the value of any real estate holdings of the parties. When the trial court admitted Settles' written report, the following exchange occurred between A.R.'s counsel and the trial court:

[Counsel]: And, Judge, can we have - - make it clear on the record that even though the exhibit is admitted, it's for the limited purposes of appraising the business, Atica Nails, as opposed to the value of any real estate?

[Trial Court]: I will note for the record that this witness has indicated that he is not an expert in real estate valuation and - - however, I don't know fully what is in Petitioner's Exhibit 1. I will note that for the record that he has indicated and conceded that he is not an expert in real estate values.

[Counsel]: And I think he also said that he's not here to offer an opinion as an expert on the value of real estate in this case.

[Trial Court]: That is my understanding as well.

From this exchange, it is apparent that the trial court did not consider Settles to be an expert on the value of real estate in this case, and that, notwithstanding the...