Lynch v. Lynch

540 S.W.3d 107

Francis Michael LYNCH, Appellant

v.Donna Falcon LYNCH, Appellee

NO. 01-16-00573-CV

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

Opinion issued September 14, 2017

James A. Vaught, for Appellant.

Cheryl Ann Beard Jeter, Pamela E. George, for Appellee.

Panel consists of Justices Jennings, Higley, and Massengale.

Laura Carter Higley, Justice

Michael Lynch¹ appeals from a final default divorce decree, dissolving his marriage to Donna Falcon Lynch. In 16 issues, Michael challenges the provisions in the divorce decree that divide the marital estate, award Donna appellate attorney's fees, require Michael to pay federal income tax liabilities, and order the parties to defend and indemnify each other concerning outstanding liabilities. Michael also contends that the trial court abused its discretion in denying his motion to set aside the default judgment and motion for new trial.

Because Michael has met his burden to show that the trial court abused its discretion in awarding appellate attorney's fees to Donna and to show that the court erred in ordering the parties to indemnify one another, but he has not shown error in the remainder of the judgment, we (1) reverse the portion of the decree awarding appellate attorney's fees to Donna and remand for a new hearing on attorney's fees, (2) delete the portion of the decree ordering defense and indemnification, and (3) affirm the remainder of the judgment as modified.

Background

Michael and Donna were married in 1988. They did not have children during the marriage. Donna already had two children, a son and a daughter, when she married Michael.

After 27 years of marriage, Michael and Donna separated in March 2015. Michael moved out of the couple's house in Houston and into his own apartment.

In February 2016, Donna filed a petition for divorce and a request for temporary restraining orders. Among the grounds for the divorce, Donna claimed that Michael was "guilty of cruel treatment" toward her and that he had committed adultery. Donna asserted that she should be awarded a disproportionate share of the marital estate for a number of reasons, including "fault in the breakup of the marriage," "disparity of earning power of the spouses," "education and future employability of the spouses," "ages of the spouses," and "wasting of community assets." Donna also requested that she be awarded her attorney's fees, including appellate attorney's fees.

On February 18, 2016, a licensed process server served Michael with the divorce petition and the request for temporary orders. A hearing was held on the temporary orders on March 2, 2016. Although he had been served notice of the hearing, Michael did not attend. Donna testified at the hearing and presented documentary evidence. She offered evidence showing that Michael had earned $639,000 in 2014, and she testified that she believed his pay had increased in 2015. Donna stated that Michael had refused to give her any money for the previous six months, and she had been paying her expenses with credit cards.

She also indicated that the couple owned a home in Houston and a home in Pittsburgh. Donna testified that there were outstanding property taxes on the Houston home that Michael had not paid. Donna requested the trial court to order Michael to pay her $25,000 per month in spousal support to cover the expenses for their two homes. She also requested the trial court to order Michael to pay the outstanding property taxes on the Houston home and to pay the credit card debt she had incurred to cover her living expenses for the preceding six months.

On March 15, 2016, the trial court signed temporary orders, requiring Michael to pay Donna $25,000 per month in spousal support and ordering him to pay various debts, including credit card balances and various property taxes owed on the couple's Houston home. The trial court also required Michael's employer to withhold income from Michael's paycheck to satisfy the spousal support.

On March 28, 2016, Donna filed a Petition for Enforcement of Temporary Orders by Contempt. In the enforcement petition, Donna claimed that Michael had violated the temporary orders because he had not paid the various credit card debts and property taxes he had been required to pay in the orders. A hearing was scheduled on the motion for May 2, 2016. A licensed process server served Michael with a copy of the enforcement petition and with notice of the hearing on April 8, 2016.

Michael did not file an answer to the divorce petition or otherwise appear in the suit. On April 22, 2016, the trial court conducted a trial in Michael's absence.

Donna offered into evidence her inventory and appraisement in which she itemized the community estate, providing values for the itemized property and listing the community estate's debts and liabilities. However, the inventory indicated that the values for several financial and retirement accounts identified in the inventory were unknown. The bottom of the inventory stated that the net value of the community estate was $3,367,208.

Under the heading "miscellaneous assets," Donna indicated that Michael owed her money because he had failed to comply with the temporary orders, which had required him to pay spousal support and to pay outstanding credit card and tax liabilities. Based on his noncompliance with the temporary orders, Donna indicated in the inventory that Michael owed her $29,728 for spousal support and $82,248 for the credit card and tax liabilities.

In her inventory, Donna also recommended how the community estate should be divided. She proposed that Michael receive two motor vehicles listed in the inventory, worth a combined value of $30,000 and that she receive the remainder of the community estate. Because he owed her money for his noncompliance with the temporary orders, Donna proposed that the value of the community estate received by Michael be–$81,975. This figure represented the $30,000 value of the motor vehicles, minus the amount of money he owed her pursuant to the temporary orders.

Donna testified at trial. She reaffirmed the itemized values for the community assets identified in the inventory. She also confirmed that the total value of the marital assets listed in the inventory was $3.367 million. However, she stated that she did not know the value of several financial accounts held by Michael. And she stated that she believed there were other community assets of which she was not aware, raising the total value of the marital estate to $5 million.

Donna further testified that Michael, who has a college degree in chemical engineering, worked as a manager at an energy company and had earned $700,000 in 2014. Donna testified that she had not been employed during their 28-year marriage. She agreed that Michael, who was 56 years old, had "some years left to work and make a lot more money" and that she was "not going to have the benefit of [Michael's] income" after the divorce. Donna, who was 60 years old and without a college degree, indicated that she had been looking for work but was finding it difficult to enter the workforce at her age and skill level.

Donna further averred that Michael had used the community estate to support other women. Donna testified that, in October 2014, she found a hand-written note on her car at the couple's Houston home. The note, admitted into evidence, was signed by a woman named Lydia. It read as follows:

... Sugar Daddy—

Our arrangement was for $750.00 per week Money Me and my daughter rely on. You have to look At yourself every day and know what you did.

Your [sic] a dishonest man.

With no morals or values.

Donna was able to contact Lydia, and the two began texting one another. The text messages were admitted into evidence.

Through the texts, Donna learned that Lydia had met Michael through a website called "Seeking Arrangement." Lydia described the website as follows: "It is a website where you can find a sugar daddy to help you financially and in return you are his sugar baby. Your his gf [girlfriend] or mistress...." Lydia explained to Donna that she had a sugar baby-sugar daddy arrangement with Michael that had ended. As part of the arrangement, Lydia indicated that Michael had agreed to pay her $3,000 to $5,000 per month and a $750 per week allowance. Lydia told Donna that Michael had taken her to lunch and dinner numerous times and that she and Michael had sex three times: twice in Donna and Michael's home and a third time at a hotel.

Lydia told Donna that her arrangement with Michael had ended, but Michael still owed her $750 pursuant to the arrangement. Lydia explained that is why she went to the couple's home on the day she left the note found by Donna on the car.

Donna told Lydia that, in the past, she had gotten calls from other women who claimed that Michael owed them money. Donna stated that she did not realize until she corresponded with Lydia "what was going on." When she asked him about it, Michael had told Donna that he had no idea who the women were and had suggested that she call the police.

Lydia also forwarded Michael's profile from the Seeking Arrangement website to Donna. The profile indicated that Michael joined the website in August 2014. Michael's profile stated that his net worth was $5 million. The profile described Michael as "a bona fide [sugar daddy]" who was "looking for one sweetheart for rendezvous to fine places, trysts and some travel." The profile, which Lydia forwarded to Donna in March or April 2015, indicated that Michael had been "active" on the website four days earlier. Lydia also told Donna that, when she logged on, she could see that Michael was still active on the website.

Donna also testified at trial that she had had found emails, from 2015, between Michael and another woman, Keira, with whom Michael appeared to be having an affair. The emails were admitted into evidence, and Donna testified about their content. In one email, Keira is seen in a photograph lying nude on a bed on a comforter that Donna...