In re Moncey

404 S.W.3d 701

In the Matter of the MARRIAGE OF John Paul MONCEY and Tammie Jo Moncey.

No. 06–12–00054–CV.

Court of Appeals of Texas, Texarkana.

Submitted: March 27, 2013.

Decided: May 17, 2013.

Rehearing Overruled July 16, 2013.

Before MORRISS, C.J., CARTER and HILL,^* JJ.

Gregory D. Smith, Nolan D. Smith, Ramey & Flock, PC, Tyler, TX, James W. Volberding, Tyler, TX, for Appellant.

Stephen M. Orsinger, McGinnis, Lochridge & Kilgore, LLP, Austin, TX, for Appellee.

OPINION

Opinion by Justice CARTER.

John Paul Moncey challenges the trial court's characterization of certain property during the division of assets in his divorce from Tammie Jo Moncey. John argues that the trial court erroneously labeled a twenty-three-acre piece of property containing the marital home and a Comstock mineral interest as Tammie's separate property. He also complains that a 1967 Chevrolet Corvette, which he claimed as his separate property, was mistakenly listed as an asset of the marital estate. We conclude that (1) the trial court correctly labeled the disputed real property as Tammie's separate property, (2) the Comstock mineral interest was community property, but that the mischaracterization did not warrant reversal of the property division, and (3) the 1967 Corvette was the separate property of John, and reversal is required on this point. Therefore, we affirm in part, reverse the trial court's judgment with respect to the finding that the Corvette was community property, and render judgment that the Corvette is John's separate property.

I. The Twenty–Three Acres Containing the Marital Residence was Tammie's Separate PropertyA. Standard of Review

Property possessed by either spouse during or on dissolution of marriage is presumed to be community property. Tex. Fam.Code Ann. § 3.003(a) (West 2006). To rebut this presumption, the person seeking to prove the separate characterof the property must do so by clear and convincing evidence. Tex. Fam.Code Ann. § 3.003(b) (West 2006). “ ‘Clear and convincing evidence’ means the 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.” Tex. Fam.Code Ann. § 101.007 (West 2008). Any doubt as to the character of property should be resolved in favor of the community estate. Garza v. Garza, 217 S.W.3d 538, 548 (Tex.App.-San Antonio 2006, no pet.).

While the twenty-three-acre tract in dispute is property owned by a spouse on dissolution of the marriage, neither spouse characterizes the property as community; both parties recognize the twenty-three-acre tract is separate property, but John asserts he owns a one-half interest in the tract while Tammie claims she owns the entire interest.

The Texas Family Code requires the trial court to divide a marital estate in a “just and right” manner, considering the rights of the parties. Tex. Fam.Code Ann. § 7.001 (West 2006). “Trial courts can only divide community property, and the phrase ‘estate of the parties' encompasses the community property of a marriage, but does not reach separate property.” Pearson v. Fillingim, 332 S.W.3d 361, 363 (Tex.2011) (per curiam).

There is a presumption on appeal that the trial court properly exercised its discretion in dividing property in a divorce proceeding. In re Marriage of Robbins, No. 06–10–00019–CV, 2010 WL 3168402, at *2 (Tex.App.-Texarkana Aug. 12, 2010, no pet.) (mem. op.). When a trial court awards land to one spouse as their separate property, and the other spouse appeals the characterization, the “appellant must show that the court below” “clearly abused its discretion by a division that is manifestly unjust and unfair” “to convince an appellate court to disturb a trial court's property division.” Id. (quoting Martin v. Martin, 797 S.W.2d 347, 351 (Tex.App.-Texarkana 1990, no writ); Quijano v. Quijano, 347 S.W.3d 345, 349 (Tex.App.-Houston [14th Dist.] 2011, no pet.) (citing Sharma v. Routh, 302 S.W.3d 355, 360 (Tex.App.-Houston [14th Dist.] 2009, no pet.))); see McKnight v. McKnight, 543 S.W.2d 863 (Tex.1976); Long v. Long, 234 S.W.3d 34, 38 (Tex.App.-El Paso 2007, pet. denied).

In addition to challenging the legal and factual sufficiency of the evidence supporting the separate property characterization, reversal requires a harm analysis. Long, 234 S.W.3d at 38. Therefore, even if the trial court mischaracterizes property in its division of the marital estate, the error does not require reversal “unless the mischaracterization would have had more than a de minimis effect on the [ ] court's just and right division of the property.” Vandiver v. Vandiver, 4 S.W.3d 300, 302 (Tex.App.-Corpus Christi 1999, pet. denied); see Long, 234 S.W.3d at 38;Allen v. Allen, 704 S.W.2d 600, 603 (Tex.App.-Fort Worth 1986, no writ); King v. King, 661 S.W.2d 252, 254 (Tex.App.-Houston [1st Dist.] 1983, no writ). Reversible error exists as a matter of law only if the trial court characterizes property as community property and awards it to one spouse when it is established as the separate property of the other spouse. Eggemeyer v. Eggemeyer, 554 S.W.2d 137, 140 (Tex.1977).

Thus, assessments of the legal and factual sufficiency of the evidence are not independent grounds for reversal, but they are relevant factors in determining whether the trial court abused its discretion. Quijano, 347 S.W.3d at 349. John argues that the evidence is factually insufficient to establish that the “23 acres was entirely Tammie Jo's separate property.” “An assertion that the evidence is factually insufficient to support a fact finding means that the evidence supporting the finding is so weak or the evidence to the contrary is so overwhelming that the answer should be set aside and a new trial ordered.” In re Marriage of Parker, 997 S.W.2d 833, 836 (Tex.App.-Texarkana 1999, pet. denied) (citing Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965)).

Again, we reverse the trial court's judgment only where it “ ‘clearly abused its discretion and if the error materially affects the court's just and right division of the property.’ ” In re Marriage of Cigainero, 305 S.W.3d 798, 800 (Tex.App.-Texarkana 2010, no pet.) (quoting Bigelow v. Stephens, 286 S.W.3d 619, 620 (Tex.App.-Beaumont 2009, no pet.)).

B. Factual Background

The Monceys were married in 1989. In 1994, Tammie's father, Wesley Doyle Harris (Wesley), formed the W. Doyle Harris Trust, an irrevocable inter vivos trust funded by three tracts of land. The trust was to benefit Tammie and her two sisters, Becky Lynn Hutto and Pamela Harris Parrish. During Wesley's lifetime, the trust income was limited to being used on behalf of the trustor. At his death, the trustee was to distribute specific tracts of real estate to Wesley's three daughters. A limitation on the trustee's power prevented disposal of the property for less than adequate consideration “in money or money's worth....” Wesley appointed Tammie as the trustee and gave her the power to sell, manage, convey, “or otherwise deal with trust property.”

The disputed property, referenced as a “residence and 23 acres of land, Harris Road Marshall, Harrison County, Texas” was later added to the trust corpus. After Wesley's death, Tammie, Hutto, and Parrish executed an “AGREEMENT CONCERNING DISTRIBUTION FROM THE W. DOYLE HARRIS TRUST; TRUSTEE'S DISTRIBUTION DEED; AND STIPULATION OF OWNERSHIP,” otherwise known as the Exchange Deed. ¹

The Exchange Deed was executed “to provide a distribution of the remaining assets of the Trust but in an amount and form different from the method set forth in the Trust and Agreement.” The Exchange Deed stated:

That Pamela Harris Parrish and Becky Lynn Hutto, owning their interest in the property described below as their sole and separate property and owning other property as their homestead, for and in consideration of the exchange of the property as described herein, has granted, transferred and conveyed and by these presents does grant, transfer and convey unto Tammie Harris Moncey and her husband John Moncey,² whose address is 4215 Blocker Road, Marshall, Texas 75672, all of Grantor's interest in the following described real property situated in Harrison County, Texas to wit:

All that certain 23.310 acres and 14.21 acres described on the attached Exhibits “C” and “D” respectively.... ³

Hutto and Parrish bound “themselves, their heirs, legal representatives and assigns to warrant and forever defend, ... the said premises unto the said Tammie Harris Moncey and husband.”

Other parcels of land were deeded in a similar fashion to Hutto, Parrish, and their husbands. After this language, the Exchange Deed read:

For the same consideration, each of the Tammie Harris Moncey, Individually and as Trustee, Becky Lynn Hutto, and Pamela Harris Parrish agree and stipulate that Becky Lynn Hutto will own the property described in the attached Exhibit “A”, that Pamela Harris Parrish will own the property described in the attached Exhibit “B” and Tammie Harris Moncey shall own the property described in the attached Exhibit “C” and “D.” ⁴

Tammie conveyed her interest in the other properties to her sisters and their respective husbands, but did not individually or as trustee convey the property she and her husband received. She also signed the deed as trustee. John argued that the Exchange Deed constituted a gift and that the property is the separate property of both spouses, jointly owned. He also suggests that the Exchange Deed could “be taken as describing the community as the grantee.” ⁵ Tammie argued that the entirety of the property was her separate property.

Tammie testified ⁶ that neither she nor her sisters intended to deed any property to their husbands, and an affidavit signed by Tammie stated:

I realize that my husband's name is in the Agreement Concerning Distribution from the W. Doyle Harris Trust; Trustee's Distribution Deed; and Stipulation of Ownership as grantee or distributee, along with my two Sister...