in the Matter of the Marriage of Sara Alyssa Cruey and Joshua Wayne Cruey ( 2022 )

In The
Court of Appeals
Ninth District of Texas at Beaumont
__________________
NO. 09-21-00125-CV
__________________
IN THE MATTER OF THE MARRIAGE OF
SARA ALYSSA CRUEY AND JOSHUA WAYNE CRUEY
__________________________________________________________________
On Appeal from the 247th District Court
Harris County, Texas
Trial Cause No. 2019-53047
__________________________________________________________________
MEMORANDUM OPINION
This is an appeal from a final decree of divorce.1 In four appellate issues,
Joshua Cruey (“Joshua” or “Appellant”) contends the trial court abused its discretion
in granting Sara Cruey (“Sara” or “Appellee”) a late amendment to her pleadings, in
characterizing his entire pension as community property, in making a
disproportionate division and forced sale of the marital residence, and in making its
division of property. We affirm.
1
This case was transferred to our Court from the Fourteenth Court of Appeals
in Houston, Texas under an order issued by the Supreme Court of Texas. See Tex.
Gov’t Code Ann. § 73.001.
1
Background
Sara and Joshua were married in April 2015, and they separated in August
2019. 2 Sara filed an Original Petition for Divorce and she later filed several amended
petitions. In her Third Amended Petition—filed on September 10, 2020—Sara
requested that the marital home at 18210 South Austin Shores Drive (“the Austin
Shores home”) be sold and the proceeds be divided in a just and right manner. She
also asserted a Reimbursement Claim, asking the court to reimburse her “separate
estate for funds paid on behalf of [Joshua’s] separate estate including but not limited
to the payoff of [Joshua’s] vehicle.”
On September 11, 2020, Joshua filed a counterpetition, asserting claims for
reimbursement. Joshua requested the court (1) to reimburse the community estate
for funds or assets it expended for the benefit of Sara’s separate estate, (2) to
reimburse Joshua’s separate estate for funds or assets it expended for the benefit of
Sara’s separate estate, (3) to reimburse the community estate for funds or assets it
expended to make capital improvements on property Sara claimed as her separate
property, (4) to reimburse Joshua’s separate estate for funds or assets it expended to
make capital improvements on property Sara claimed as separate property, (5) to
2
Sara and Joshua had one child together. Issues relating to the child were
resolved at mediation before trial and were merged into the Final Decree of Divorce.
The issues at trial and on appeal do not relate to child custody issues but only to the
division of property, Sara’s amended petitions, and Joshua’s motion for new trial.
2
reimburse the community estate for funds or assets it expended for the payment of a
debt owed by Sara that was secured by property Sara claimed as separate property,
and (6) to reimburse Joshua’s separate estate for funds or assets it expended for the
payment of a debt owed by Sara that was secured by property Sara claimed as
separate property.3
A bench trial on the division of property was held March 18, 2021. After the
trial but before the trial court made its ruling, Sara filed a motion for leave to file her
Fourth Amended Petition, along with her Fourth Amended Petition, in which she
asserted a Reimbursement Claim, alleging that the property located at 18326 Water
Mill Drive (“the Water Mill home”) was her separate property, that the $52,091.43
received from the sale of the Water Mill home was her separate property, and that
$52,091.43 was paid towards the down payment of the Austin Shores marital home.
Sara alleged that the community estate benefited by her separate estate funds and
she should be reimbursed $52,091.43 by the community estate. Sara also asked the
court to grant an equitable lien in the amount of $52,091.43 in her favor and against
the community estate based on her claim for reimbursement.
3
The counterpetition did not identify specific properties, assets, or debts.
3
Evidence at Trial
Sara’s Testimony
Sara testified that she bought her home on Water Mill in 2012, that she lived
at Water Mill before she married Joshua, and that she and Joshua lived at the Water
Mill home for a while after they married until they bought the Austin Shores home
together. She recalled that she sold the Water Mill home on November 9, 2017, the
same day she and Joshua bought the Austin Shores home. According to Sara, all the
proceeds from the sale of the Water Mill home were used as a down payment on the
Austin Shores home. Exhibit 5 was admitted into evidence, which Sara identified as
the closing documents for both homes. Sara testified that $52,091.43 in cash
proceeds from the sale of the Water Mill home were transferred as a credit for the
purchase of the Austin Shores home, and the Austin Shores home cost $353,000.
The closing papers for the sale of the Water Mill home listed the seller as “Sara A.
Cruey f/k/a Sara A. Richardson[.]” Sara agreed that she was asking the court for a
reimbursement for $52,091.43.
Sara understood that the Harris County Appraisal District valued the Austin
Shores home at about $383,899, and she believed the remaining balance on the
mortgage was about $305,000. Sara agreed she was asking for the Austin Shores
home to be sold because “that’s the only way [she] would get [her] separate property
back.”
4
Sara also testified that she was asking for Joshua’s Houston Fire Department
(“HFD”) retirement to be fairly divided. Sara’s Amended Suggested Division of
Property reflected that she believed the HFD retirement was valued at about
$45,201.51 and she suggested she and Joshua each receive $22,600.76. Petitioner’s
Exhibit 19 was admitted into evidence, which was Joshua’s First Supplemental
Answers and Objections to Petitioner’s First Set of Written Interrogatories. The
interrogatory responses reflect that Joshua valued his separate property portion of
his HFD retirement fund at $14,961.00.
At the close of Sara’s case in chief, Joshua requested a directed verdict on
Sara’s claim for reimbursement and request for an equitable lien because there was
no clear and convincing evidence that the Water Mill home was Sara’s separate
property, there was improper tracing of funds, and Sara had not pleaded for an
equitable lien. The court denied the motion.
On cross-examination, Sara testified that Zillow had made an offer to buy the
Austin Shores house in November 2019, and Sara believed that, based on the terms
of that offer, she and Joshua would have taken a loss on the sale of the house. Sara
also agreed that Joshua was working for the HFD when they got married and that
portions of his retirement account were accumulated before the marriage. She also
testified that she would not oppose the court only dividing the portion of the HFD
account accumulated during the marriage. Sara also testified that Joshua started
5
living at the Water Mill home in February 2014, he paid towards the mortgage and
some of the home expenses while he lived there, and the mortgage balance reduced
because they both had been paying on it for years. Sara testified that she had been
unable to obtain a statement of the mortgage balance as of the date of the marriage.
Sara agreed that upon closing on the sale of the Water Mill home, she did not receive
a deposit of about $52,000 into a bank account and the proceeds “went into the
Austin Shores house.” She also testified that they used the proceeds from the sale of
Water Mill as a down payment on Austin Shores, and she agreed that at the same
time they sold the Water Mill home and bought the Austin Shores home, some of
the funds were used to pay off Joshua’s car note. According to Sara, the only
improvements they made to the Water Mill home before selling it was to add some
French doors and replace the carpet. On redirect, Sara agreed that her exhibits
reflected amounts paid towards the mortgage on Water Mill—$3,662.59 in 2013,
$4,060.19 in 2017, and $4,459.84 in 2018.
Joshua’s Testimony
Joshua agreed that he had been living in the Austin Shores marital home since
he and Sara separated in September 2019. He testified that he valued the Austin
Shores home at $294,000 in his inventory based on an offer he and Sara had received
for the home, and they did not take that offer because it would have cost them about
$18,000, which he could not afford to pay. Joshua estimated that he had invested
6
about $15,000-20,000 in repairs and upkeep of the home. As to Sara’s claim for
reimbursement, Joshua agreed that he was asking the court to allow him to pay that
out monthly or refinance the loan instead of selling the home. On cross-examination,
Joshua testified that he and Sara bought the Austin Shores home for $353,000, but
that in his opinion it was no longer worth that amount. Joshua also agreed the 2020
county property appraisal for the home valued it at $383,899.
Joshua agreed that he had worked as a firefighter before he and Sara married,
that his separate portion of his HFD pension account was $14,961, and that the total
value of the HFD account was $45,000. On cross-examination, when asked whether
he had documentation that showed the value of his retirement account before the
date of marriage, Joshua replied that he had provided the “documentation for [his]
retirement statements.” There was no further testimony about the documentation and
no documents were entered into the record on this point at trial.
Joshua testified that he paid about $33,000 towards the mortgage, repairs, and
improvements for the Water Mill home. Joshua agreed that the net proceeds from
the sale of the Water Mill home were used to purchase the Austin Shores home.
Joshua also agreed that his property inventory listed real estate in New Mexico,
which he testified was given to him by his father. He asked the court to confirm the
New Mexico property as his separate property.
7
Post-Trial Proceedings
The court held a hearing on Entry of Judgment on April 23, 2021, the trial
court signed an Order Granting Trial Amendment on April 29, 2021 “to conform the
pleadings to the evidence presented” on Sara’s reimbursement claim and request for
an equitable lien, and the Final Decree of Divorce was signed on April 30, 2021. The
decree awarded each party fifty percent of Joshua’s HFD retirement account. The
decree orders the immediate sale of the Austin Shores marital home; it provides that
Joshua will have exclusive use and possession of the marital home until closing; it
states that Joshua will pay the mortgage and taxes on the marital home until closing;
and further that upon closing the sale of the marital home, the first $29,599.80 of the
proceeds (after payment of costs and debts) be paid to Sara, and any remaining
proceeds be split sixty percent to Sara and forty percent to Joshua. 4
Joshua filed a request for findings of fact and conclusions of law addressing
the “characterization and value of all assets, liabilities, claims, and offsets[,]” but
4
The decree also awards the following to Joshua as his separate property: real
property in New Mexico; a 2014 Polaris RZR 1000; household furniture,
furnishings, and personal effects in his possession; cash and bank accounts in his
possession and under his sole control; and a 2013 Subaru Outback, a 2020 Dodge
Ram, and a 2008 Yamaha WR250x motorcycle. The decree ordered as Sara’s
separate property: household furniture, furnishings, and personal effects in her
possession, cash and bank accounts in her possession and under her sole control; and
a 2012 Audi Q5. The decree orders that Sara pay the debt on two credit cards and
Joshua pay the debt on a loan for the Dodge Ram and another credit card. We do not
address the details of these items in further detail as they do not pertain to the issues
raised on appeal.
8
none were entered, and the record does not include a Rule 297 Notice of Past Due
Findings of Fact and Conclusions of Law.
Joshua filed a Motion for New Trial, challenging the legal and factual
sufficiency to support the court’s judgment about the characterization of property,
the division of the marital estate, the ordered sale of the marital residence, and the
reimbursement claims. The motion also argued that the trial court erred in awarding
Sara a portion of Joshua’s separate property interest in his HFD retirement account.
According to the motion, the trial court should grant a new trial based on newly
discovered evidence, namely a “[l]etter from Houston Fire Department confirming
[Joshua’s] separate property interest in his retirement plan and outstanding
Homeowner’s Association Dues.” The motion also argued that the trial court erred
in awarding Sara a disproportionate division of the marital estate and in ordering the
sale of the marital residence because there was no or insufficient evidence to support
the judgment.
At the hearing on the motion, Joshua’s attorney argued that he had only been
able to get “limited documents” from HFD stating the value of his separate property
interest and the attorney stated that newly discovered evidence—a letter from
HFD—was available to show that the value of the HFD pension at the date of Joshua
and Sara’s marriage was about $14,000. Sara’s counsel objected to the document as
9
hearsay, and the trial court sustained the objection. The trial court denied the motion
for new trial.
Issues
Appellant states four issues on appeal:
1. The trial court abused its discretion when it awarded Appellee half
of Joshua Cruey’s total pension plan as community property
despite sufficient evidence that a significant portion was his
separate property.
2. The trial court abused its discretion in allowing Appellee’s late
amendment to her pleadings because it asserted a new substantive
matter that detrimentally affected Joshua Cruey’s case.
3. The court erred in its distribution of the marital residence because
it fails to properly value the property and ignores Joshua Cruey’s
financial contributions before, during, and after the marriage.
4. The evidence is legally and factually insufficient to support the
court’s entire property division considering its improper
distribution of the marital residence and Joshua Cruey’s pension
plan.
Characterization of Property
Under both the Texas Constitution and the Texas Family Code, a spouse’s
separate property consists of (1) the property the spouse owned or claimed before
marriage, and (2) the property the spouse acquired during marriage by gift, devise,
or descent. Tex. Const. art. XVI, § 15; Tex. Fam. Code Ann. § 3.001; Villalpando v.
Villalpando, 480 S.W.3d 801, 806 (Tex. App.—Houston [14th Dist.] 2015, no pet.).
Community property, by contrast, consists of all property, other than separate
10
property, acquired by either spouse during the marriage. Tex. Fam. Code Ann.
§ 3.002; Villalpando, 480 S.W.3d at 806.
We begin with the presumption that all property possessed by either spouse
during or on dissolution of marriage is community property. Tex. Fam. Code Ann.
§ 3.003; Villalpando, 480 S.W.3d at 806. The burden of overcoming this
presumption rests on the party asserting that the property is his separate property,
and that party must establish the separate character of the property by clear and
convincing evidence. Barras v. Barras, 396 S.W.3d 154, 163 (Tex. App.—Houston
[14th Dist.] 2013, pet. denied). “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. Villalpando,
480 S.W.3d at 806. This evidence generally must trace and clearly identify the
property as separate. Zamarripa v. Zamarripa, No. 14-08-00083-CV, 2009 Tex.
App. LEXIS 5122, at *7 (Tex. App.—Houston [14th Dist.] June 30, 2009, pet.
denied) (mem. op.). “Tracing involves establishing the separate origin of the
property through evidence showing the time and means by which the spouse
originally obtained possession of the property.” Graves v. Tomlinson, 329 S.W.3d
128, 139 (Tex. App.—Houston [14th Dist.] 2010, pet. denied). Generally, the clear
and convincing standard is not satisfied by testimony that property possessed at the
time the marriage is dissolved is separate property when such testimony is either
11
contradicted or unsupported by documentary evidence tracing the asserted separate
nature of the property. Barras, 396 S.W.3d at 164.
We review a trial court’s division of community property for an abuse of
discretion. See Murff v. Murff, 615 S.W.2d 696, 698 (Tex. 1981). The test for abuse
of discretion is whether the trial court acted arbitrarily or unreasonably, or whether
it acted without reference to any guiding rules or principles. See Downer v.
Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). The law requires
an equitable, not an equal, division of the community estate. See Tex. Fam. Code
Ann. § 7.001; Bradshaw v. Bradshaw, 555 S.W.3d 539, 546 (Tex. 2018) (Devine,
J., concurring); In re Marriage of Harrison, 557 S.W.3d 99, 140 (Tex. App.—
Houston [14th Dist.] 2018, pet. denied). A trial court does not abuse its discretion if
there is some evidence of a substantive and probative character to support the
division. See Butnaru v. Ford Motor Co., 84 S.W.3d 198, 211 (Tex. 2002).
We employ a two-part test when reviewing alleged characterization errors.
See Harrison, 557 S.W.3d at 140. Under this test, Joshua must show both a
characterization error and harm—i.e., a division or an order that is manifestly unjust
and unfair. See id. We need not reverse a trial court’s division of property when the
party claiming a mischaracterization fails to show how the erroneous
characterization of community property as separate property caused the trial court to
abuse its discretion in dividing the marital estate. See id. at 140-41; Lynch v. Lynch,
12
540 S.W.3d 107, 133 (Tex. App.—Houston [1st Dist.] 2017, pet. denied); In re
Marriage of McNelly, No. 14-13-00281-CV, 2014 Tex. App. LEXIS 5193, at *20
(Tex. App.—Houston [14th Dist.] May 15, 2014, pet. denied) (mem. op.)
(“Mischaracterization of community property as separate property is harmful and
requires reversal only if the mischaracterization affects the just and right division of
the community estate.”).
In a bench trial, the judge is the factfinder and the sole judge of the credibility
of the witnesses and weight to be given their testimony. See Murff, 615 S.W.2d at
700; Zagorski v. Zagorski, 116 S.W.3d 309, 318 (Tex. App.—Houston [14th Dist.]
2003, pet. denied). To determine whether the trial court divided the community
estate in a “just and right” manner, we must have the trial court’s findings on the
value of those assets. Harrison, 557 S.W.3d at 141. Without findings of fact, we do
not know the basis for the division, the values assigned to the community assets, or
the percentage of the marital estate that each party received. See id. When no
findings of fact are filed, we imply all findings necessary to support the court’s
judgment. See id. at 131 (citing In re P.A.C., 498 S.W.3d 210, 217 (Tex. App.—
Houston [14th Dist.] 2016, pet. denied)); In re Marriage of McCoy & Els, 488
S.W.3d 430, 433-34 (Tex. App.—Houston [14th Dist.] 2016, no pet.). We review
the record in the light most favorable to the trial court’s judgment to determine
13
whether some evidence supports it, and we will uphold the judgment on any legal
theory that finds support in the evidence. Harrison, 557 S.W.3d at 131.
HFD Pension Benefits
In his first issue, Joshua argues that the trial court abused its discretion in
awarding Sara half of Joshua’s total pension benefits “because both parties agreed
that at least $14,000 of the total amount was Joshua’s separate property.” Joshua also
argued that he proved by clear and convincing evidence that at least $14,000 of his
HFD pension was his separate property because he testified that amount was his
separate property, and his testimony was not contradicted by Sara’s testimony.
In support of his argument that his uncontradicted testimony was clear and
convincing evidence of his separate property portion of the HFD pension, Joshua
cites to Kelly v. Kelly, 634 S.W.3d 355 (Tex. App.—Houston [1st Dist.] 2021, no
pet.). In Kelly, the Houston First Court explained that a witness’s testimony may be
taken as true if it is “‘clear, direct and positive, and free from contradiction,
inaccuracies, and circumstances tending to cast suspicion thereon[.]’” Id. at 351(quoting Monroe v. Monroe, 358 S.W.3d 711, 718 (Tex. App.—San Antonio 2011,
pet. denied). Still, the Court cautioned that a party’s unsupported testimony may not
be sufficient to meet the clear and convincing standard. See id. In Kelly, however,
not only did the husband testify to the value of his retirement account at the time of
marriage, but he also produced an expert witness (a CPA) who traced the values in
14
the retirement account and who had reviewed documents showing the account
balance on the date of marriage, contributions to the account, fund transfers,
dividends, and an ending balance. See id. at 349-51. The Kelly Court determined that
the husband had produced clear and convincing evidence of his separate property
interest in the retirement account, specifically, the value of the account at the time
of marriage. See id. at 352.
Here, unlike Kelly, Joshua did not produce evidence of tracing, account
activity, or an expert witness. At the April 23, 2021 hearing on Entry of Judgment,
the trial court stated:
. . . The reason I didn’t confirm the 14,000, and correct me if I’m wrong
but my memory of it was that the only testimony was that he said that
he had some portion of it before, but there was no tracing. He never
testified that he had never taken any money out of it and so I don’t
think -- I don’t think he gave me enough to rebut the presumption of
community property on that.
So like the only testimony as far as I remember was that there
was money in there before and that there’s money in there now, but
there was no, like -- nothing in between then and now. That was my
concern about that.
So I don’t think he rebutted the presumption about that; and she
did testify like, yeah, he had something before then, but she didn’t know
how much it would be, and I don’t think that the fact that that was the
balance on the date of marriage is enough to establish that that is a
separate property portion.
As we have explained, to overcome the presumption of the property being
community property, tracing is necessary to establish the separate origin of the
property. See Zamarripa, 2009 Tex. App. LEXIS 5122, at *7; Barras, 396 S.W.3d
15at 163-64; Graves, 329 S.W.3d at 139. The trial court as factfinder and sole judge of
the credibility and weight of the evidence could have determined that Joshua failed
to present clear and convincing evidence of his separate property interest due to the
lack of tracing. See Murff, 615 S.W.2d at 700; Barras, 396 S.W.3d at 163-64;
Zagorski, 116 S.W.3d at 318.
Joshua also argues that the trial court erred in denying his motion for new trial
because he raised material new evidence in support of his property claim. “We
review a trial court’s refusal to grant a motion for new trial for abuse of discretion.”
Dolgencorp of Tex., Inc. v. Lerma, 288 S.W.3d 922, 926 (Tex. 2009). To determine
whether the trial court abused its discretion, we must decide ultimately whether the
trial court acted without reference to any guiding rules or principles. See Downer,
701 S.W.2d at 241-42. A party seeking a new trial on grounds of newly discovered
evidence must demonstrate to the trial court that (1) the evidence came to his
knowledge since the trial, (2) his failure to discover the evidence sooner was not due
to lack of diligence, (3) the evidence is not cumulative, and (4) the evidence is so
material it would probably produce a different result if a new trial were granted.
Waffle House, Inc. v. Williams, 313 S.W.3d 796, 813 (Tex. 2010). Each element
must be established by an affidavit of the party. See In re Thoma, 873 S.W.2d 477,
512 (Tex. Rev. Trib. 1994, no appeal); Rivera v. Countrywide Home Loans, Inc.,
262 S.W.3d 834, 844 (Tex. App.—Dallas 2008, no pet.).
16
At the hearing on the motion for new trial, Joshua’s counsel stated that Joshua
“was unable to get the documents -- He was able to get limited documents from the
fire department, specifically stating the value of his separate property interest from
the community property interest.” Counsel offered two exhibits, including one
exhibit purportedly documenting the value of Joshua’s HFD pension account at the
time of trial of about $31,000 and another showing the value of the account at the
time of the marriage:
. . . Exhibit 1 would have been the letter that he was unable to obtain,
but did eventually obtain that after the trial was completed, showing the
value that had accumulated between his date of hire of November 12th,
2011, to April 4th, 2015, around their date of marriage, in the amount
of about 14,000. And that is the evidence that he was unable to retrieve.
And the letter is dated after our trial date. That’s actually when he did
receive it.
...
If the Court were to consider the new evidence, it would reduce the
community property portion of the retirement almost by half. And so
that would definitely then affect the rest of the division of assets and
debts.
Sara’s counsel objected to the exhibits offered as new evidence based on hearsay,
and the trial court sustained the objection. The exhibits were not made part of the
record for appellate purposes.
A trial court does not abuse its discretion in denying a motion for new trial
based on newly discovered evidence when the evidence is inadmissible. See Lynd v.
Wesley, 705 S.W.2d 759, 762 (Tex. App.—Houston [14th Dist.] 1986, no writ) (no
abuse of discretion to deny motion for new trial where movant failed to introduce
17
admissible competent evidence at the hearing of the existence of any newly
discovered evidence); see also Amigos Meat Distribs., L.P. v. Guzman, 526 S.W.3d
511, 522 n.2 (Tex. App.—Houston [1st Dist.] 2017, pet. denied) (movant must offer
admissible relevant evidence demonstrating the existence of newly discovered
evidence). Nor does a trial court abuse its discretion in denying a motion for new
trial where the movant does not show its due diligence in trying to procure the
evidence prior to trial. See Lynd, 705 S.W.2d at 762. Here, the evidence Joshua
offered at the hearing consisted of a letter he had received, and the trial court ruled
the letter was not admissible. Nothing in the record establishes that Joshua exercised
due diligence in attempting to procure the letter prior to trial and the trial court could
have concluded that Joshua failed to meet his burden to show due diligence. We also
note that Joshua’s motion for new trial and argument at the hearing on the motion
lack any evidence or argument that the letter would have provided any evidence of
tracing to overcome the presumption of community property. So, we conclude that
the trial court did not abuse its discretion in denying Joshua’s motion for new trial.
Finding no abuse of discretion by the trial court and no mischaracterization of the
retirement account, we need not examine whether any harm resulted. See Tex. R.
App. P. 47.1; Harrison, 557 S.W.3d at 140-41; Lynch, 540 S.W.3d at 133. We
overrule Appellant’s first issue.
18
Amended Pleadings
In his second issue, Joshua argues that the trial court abused its discretion in
allowing Sara’s late amendment to her pleadings. He objects to her claim for
reimbursement which she initially made in her Third Amended Petition and also to
her requests for reimbursement and an equitable lien made in her Fourth Amended
Petition. According to Joshua, Sara’s late-filed pleading amendments were facially
prejudicial because they “reshaped the proceedings.”
Rule 63 of the Texas Rules of Civil Procedure provides that amended
pleadings may be filed within seven days before trial only with leave of court. See
Tex. R. Civ. P. 63. Sara’s Third Amended Petition was filed on September 10,
2020—about six months before the March 2021 bench trial—and well before the
seven-day window prescribed by Rule 63. For that reason, we only consider Joshua’s
challenge about Sara’s Fourth Amended Petition that was filed after the bench trial.
Amendments to the pleadings during trial are governed by Rule 66 and Rule
67 of the Texas Rules of Civil Procedure. Rule 66 is entitled “Trial Amendment”
and it provides that the court may allow amendments to a pleading and shall do so
when the amendment would serve the presentation of the merits without prejudicing
the opposing party’s action or defense on the merits. Under Rule 66, a trial court has
no discretion to refuse a trial amendment unless: (1) the opposing party presents
evidence of surprise or prejudice, or (2) the amendment is prejudicial on its face
19
because it asserts a new cause of action or defense, and the opposing party objects
to the amendment. Zarate v. Rodriguez, 542 S.W.3d 26, 37 (Tex. App.—Houston
[14th Dist.] 2017, pet. denied) (citing Tanglewood Homes Ass’n v. Feldman, 436
S.W.3d 48, 64 (Tex. App.—Houston [14th Dist.] 2014, pet. denied)). Trial
amendments that are procedural in nature, such as conforming the pleadings to the
evidence introduced during trial, should be allowed. Id. Substantive amendments or
those that change the nature of the trial are discretionary, and the court’s decision to
allow or deny them may be reversed only if the court clearly abused its discretion.
Id.A proposed trial amendment asserting a new cause of action may be
prejudicial on its face, but it is not prejudicial as a matter of law. Id.; Stephenson v.
LeBoeuf, 16 S.W.3d 829, 839 (Tex. App.—Houston [14th Dist.] 2000, pet. denied).
We evaluate the amendment in the context of the entire case to determine prejudice.
Zarate, 542 S.W.3d at 37. A trial amendment is prejudicial on its face if (1) the
amendment asserts a new substantive matter that reshapes the nature of the trial
itself; (2) the new matter is of such a nature that the opposing party could not have
anticipated it in light of the development of the case up to the time the amendment
was requested; and (3) the opposing party’s presentation of its case would be
detrimentally affected by the amendment. Id.
20
A claim for reimbursement may exist when funds or assets of one marital
estate are expended to enhance or benefit another marital estate without receiving an
offsetting benefit in return. Vallone v. Vallone, 644 S.W.2d 455, 459 (Tex. 1982).
Reimbursement is an equitable tool within the court’s discretion, but it must be
specifically pleaded. See id. at 458-59; Harris v. Harris, 765 S.W.2d 798, 805 (Tex.
App.—Houston [14th Dist.] 1989, writ denied).
Sara first asserted a claim for reimbursement in her Third Amended Petition,
filed on September 10, 2020. A day later, Joshua filed an Original Counterpetition
for Divorce, also asserting claims for reimbursement. At trial, Joshua’s counsel told
the court that “[t]he main issue is competing reimbursement claims[.]” Also at trial,
Sara’s counsel requested a trial amendment if necessary to correct any defect in the
pleadings on the reimbursement claim and request for an equitable lien.
The trial court granted Sara a trial amendment, finding it “necessary to
conform [] the pleadings to the evidence presented regarding [Sara’s] reimbursement
claim/request for equitable lien.” The trial court also found that there was “no cause
to believe that this trial amendment would cause surprise or prejudice to [Joshua].”
Before Sara filed her Fourth Amended Petition, her Third Amended Petition raised
a claim for reimbursement and Joshua’s Counterpetition for Divorce raised claims
for reimbursement. Sara’s Third Amended Petition and Joshua’s Counterpetition
were filed in September 2020, about six months before trial and before Sara’s Fourth
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Amended Petition was filed. In the context of the entire case, we cannot say that the
trial court abused its discretion in allowing Sara’s trial amendment because both
parties had raised claims for reimbursement six months before trial. See Zarate, 542
S.W.3d at 37. Joshua’s counsel told the trial court at trial that “[t]he main issue is
competing reimbursement claims[,]” from which the trial court could have
concluded there was no surprise or prejudice in granting the trial amendment. See
id. Similarly, the trial court could have concluded that the amendment as outlined in
the Fourth Amended Petition was necessary to conform to issues about
reimbursement that were tried by consent. See Tex. R. Civ. P. 67. Although Sara’s
Fourth Amended Petition asserted a claim for an equitable lien, the final divorce
decree did not establish an equitable lien, and the trial court stated at the hearing on
Entry of Judgment that “it wasn’t really my intent that [there] be a lien; it was just
sort of my intent that [Sara’s reimbursement] come out of the proceeds of the sale[]”
of the marital home. So, we find no abuse of discretion by the trial court in granting
the amendment, and we overrule Appellant’s second issue. See id.; Zarate, 542
S.W.3d at 37-39.
Sale of the Marital Home
In his third issue, Joshua argues that the trial court abused its discretion in
ordering a forced sale of the marital home because there was no proper valuation of
the property and because the sale and distribution was arbitrary and unreasonable.
22
According to Joshua, “‘a trial court abuses its discretion in dividing the community
estate without knowledge of its extent and proof of its value[,]’” quoting Bradshaw,
555 S.W.3d at 549 (Devine, J., concurring), and Finn v. Finn, 658 S.W.2d 735, 746
(Tex. App.—Dallas 1983, writ ref’d n.r.e.). Joshua argues that Sara based her
valuation of the Austin Shores home “solely on the Harris County Appraisal
District’s appraised value[,]” and he contends Sara’s uncontested evidence, standing
alone, is insufficient to prove the value of the Austin Shores home. Joshua also
argues that at the hearing on Entry of Judgment, the court “assume[d] the house
would sell for a profit based on its personal views of the housing market.” Joshua
argues in the alternative that, even if the trial court properly assigned a value to the
Austin Shores marital home, the distribution the court made was erroneous because
it failed to consider Joshua and the community’s economic contributions and the
financial effect of the sale. According to Joshua, the trial court assigned all the
proceeds from the sale of the Water Mill home to Sara, despite Joshua having
testified that he paid towards mortgage and other expenses on that home. Joshua
argues that the trial court “ignore[d]” the community improvements and Joshua’s
mortgage payments since the date of separation and that he would suffer a major
financial loss from the sale of the Austin Shores home. Finally, Joshua argues that
the trial court’s distribution was arbitrary because there was no reasonable basis for
the division under the facts and circumstances of the case.
23
In a division of property upon a divorce, the trial court has broad power to
order a just and right division of a divorcing couple’s estate, including the power to
order the sale of the couple’s home and to partition the proceeds. See Grant v.
Clouser, 287 S.W.3d 914, 919 (Tex. App.—Houston [14th Dist.] 2009, no pet.)
(citing Laster v. First Huntsville Props. Co., 826 S.W.2d 125, 131 (Tex. 1991));
Delaney v. Delaney, 562 S.W.2d 494, 495-96 (Tex. App.—Houston [14th Dist.]
1978, writ dism’d). At trial, Joshua’s counsel acknowledged that the trial court had
the power to order the sale of the marital property “at any point” to make a division
of property.
Generally, under the “property owner rule” a property owner is qualified to
testify to the market value of the real property he owns. See Nat. Gas Pipeline Co.
of Am. v. Justiss, 397 S.W.3d 150, 155-59 (Tex. 2012) (citing Porras v. Craig, 675
S.W.2d 503, 504 (Tex. 1984)). But the property owner’s testimony must still be
based on something more than bare speculation. Id. at 156. For example, the
landowner may rely upon evidence of the price paid, tax or appraised values, online
resources, nearby sales, and “any other relevant factors may be offered to support
the claim.” Id. at 159. Here, Sara testified that in her inventory, she had stated that
the Austin Shores home was valued at $383,000, and her inventory and appraisement
and her suggested division of property reflected a value of $383,899. Sara also
testified that she knew that Harris County had valued the property at $383,899, that
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she believed “from other research” that the home would sell for at least that much,
and that she had obtained an offer from Zillow, although she could not recall what
Zillow offered. Joshua recalled that in response to interrogatories, he stated the value
of the Austin Shores home was $294,000. Joshua’s sworn inventory and his
proposed property division, both admitted into evidence, listed a value for the Austin
Shores home as $294,000. Petitioner’s Exhibit 19—Joshua’s First Supplemental
Answers and Objections to Petitioner’s First Set of Written Interrogatories—shows
that Joshua stated a value of the Austin Shores home as $350,000, and Joshua
testified at trial that he had given it a value of $350,000. Joshua agreed that the Harris
County Appraisal District’s 2020 statement for the Austin Shores home reflected a
market value of the home of $383,899 in 2020 and $354,826 in 2019. Joshua also
testified that he filed nothing with the county to protest the appraised value.
We do not find the quote Joshua relies on from Bradshaw (“‘a trial court
abuses its discretion in dividing the community estate without knowledge of its
extent and proof of its value[,]’”) to require a different result in this case. Bradshaw
addressed whether a husband who had been convicted of continuous sexual abuse of
his stepdaughter for conduct that occurred in the marital home should be awarded a
portion of the marital home. See Bradshaw, 555 S.W.3d at 541-42. The Supreme
Court dealt with unusual circumstances in Bradshaw “where the behavior [at issue]
involves the use of community property, is as egregious as [the husband’s], and
25
results in a criminal conviction.” Id. at 545. So, factually our case is distinguishable
from Bradshaw. As noted in the concurrence in Bradshaw, there the trial court
lacked even a “a sketchy inventory” of assets in the record. See id. at 550. In our
case, however, the parties provided multiple estimates of the value of the Austin
Shores home and there was evidence in the record from the homeowners of a value
that had been assigned to the property between $350,000 and $383,899, and
evidence of the assessed value from the tax assessor.
It was within the trial court’s purview as factfinder to consider the credibility
and weight of the evidence and to resolve any conflicts in the evidence. See Keller
v. Wilson, 168 S.W.3d 802, 819, 821 (Tex. 2005); Murff, 615 S.W.2d at 700. And
when, as here, no findings of fact are filed, we imply all findings necessary to support
the court’s judgment. See Harrison, 557 S.W.3d at 131. So, we cannot say that there
was no valuation of the Austin Shores home before the trial court.
At the hearing on Entry of Judgment, the trial court found that Joshua
benefited from living in the Austin Shores home prior to its sale. The court
acknowledged that Joshua would be responsible for mortgage payments pending sale
of the home. The trial court also addressed the 60/40 split of the Austin Shores home:
What it is is a reason for him not to frustrate the sale of the house
because he really doesn’t want to sell it and he’s the one in control of
it. So if he doesn’t like that she’s benefitting from his payments toward
it, that’s motivation for him to get it sold.
26
Although the court stated “[p]eople are getting 30 and $40,000 over asking right now
on the market[,]” the record does not reflect that any personal assumption by the trial
court judge was relevant in dividing the community property. Without findings of
fact and conclusions of law, implying all findings necessary to support the court’s
judgment, and on this record, we lack a basis for finding that the trial court abused
its discretion in ordering the sale of the marital home and dividing the proceeds from
the sale. See id. at 131, 141.
Joshua argues that the divorce decree is “unclear as to the legal effect of the
$29,000 lien.” Nothing in the language of the Final Decree of Divorce creates a lien.
At the hearing on Entry of Judgment, the trial court stated, “it wasn’t really my intent
that it be a lien; it was just sort of my intent that [$29,000 to Sara] come out of the
proceeds of the sale.” We reject Appellant’s argument.
The division of property in a divorce action should be in a manner that the
court deems “just and right[.]” See Tex. Fam. Code Ann. § 7.001. But it need not
necessarily be equal to be “just and right.” Bradshaw, 555 S.W.3d at 546 (Devine,
J., concurring); Harrison, 557 S.W.3d at 140. A court may consider various factors
in dividing the parties’ community property, including any disparity of incomes or
earning capacities of the parties. See Murff, 615 S.W.2d at 698-99. Joshua stated in
responses to interrogatories that he earned income about $49,000 a year from the
HFD and about $24,000 a year from working at his father’s business. In his financial
27
statement, he reported monthly income from HFD of $3,605.07 and $3,000 per
month “from other sources”—for a little more than $79,000 annually. By contrast,
Sara reported that her income was limited to $45,000. That disparity in income,
along with the other testimony about the contribution of the sales proceeds from the
Water Mill home, for example, could have contributed to the division made by the
trial court. Thus, we cannot say that the trial court abused its discretion in ordering
the sale of the Austin Shores home and in dividing the sales proceeds. See Murff,
615 S.W.2d at 698-99. We overrule Appellant’s third issue.
Sufficiency of the Evidence
Joshua’s final issue argues that the evidence is legally and factually
insufficient to support the trial court’s “entire property distribution.” Joshua argues
that “the evidence presented at trial fails to provide any justifiable basis for the
court’s disproportionate division of the marital residence.” According to Joshua, the
trial court lacked sufficient information on which to exercise its discretion and
specifically that the trial court lacked a “correct” valuation of the Austin Shores
home. Joshua argues that the trial court ignored his contributions to the Water Mill
home, ignored evidence of Joshua’s separate property interest in his HFD pension,
and ignored the “catastrophic financial loss for Joshua” that would result from the
forced sale of the Austin Shores home. In the alternative, Joshua argues that the trial
28
court abused its discretion in denying his motion for new trial based on the
sufficiency of the evidence.
Because we review a trial court’s division of property under an abuse of
discretion standard, challenges to the legal and factual sufficiency of the evidence
are not independent grounds for reversal, but they are relevant factors in assessing
whether the trial court abused its discretion. See Quijano v. Quijano, 347 S.W.3d
345, 349 (Tex. App.—Houston [14th Dist.] 2011, no pet.). The test for abuse of
discretion is whether the trial court acted arbitrarily or unreasonably, and the burden
of making that showing falls on the party challenging the trial court’s division of
property. See In re Marriage of Penafiel, 633 S.W.3d 36, 44-45 (Tex. App.—
Houston [14th Dist.] 2021, pet. denied); In re Marriage of O’Brien, 436 S.W.3d 78,
82 (Tex. App.—Houston [14th Dist.] 2014, no pet.). When examining a legal
sufficiency challenge, we review the evidence in the light most favorable to the
challenged finding and indulge every reasonable inference that would support it.
Penafiel, 633 S.W.3d at 44-45 (citing Keller v. Wilson, 168 S.W.3d 802, 822 (Tex.
2005)). We credit favorable evidence if a reasonable factfinder could, and we
disregard contrary evidence unless a reasonable factfinder could not. See id. (citing
Keller, at 168 S.W.3d at 827). Evidence is legally sufficient if it would enable
reasonable and fair-minded people to reach the conclusion under review. See id. A
factual sufficiency review requires an appellate court to examine all the evidence in
29
determining whether the finding in question is so against the great weight and
preponderance of the evidence as to be manifestly unjust. See McCoy & Els, 488
S.W.3d at 434; Barras, 396 S.W.3d at 172.
Generally, we need the trial court’s findings on the value of the parties’ assets
to determine whether the trial court divided the community estate in a “just and
right” manner. Harrison, 557 S.W.3d at 141. When, as here, no findings of fact were
entered, we do not know the basis for the division, the values assigned to the
community assets, or the percentage of the marital estate that each party received.
See id. When no findings of fact are filed, we imply all findings necessary to support
the court’s judgment. See id. at 131 (citing In re P.A.C., 498 S.W.3d at 217); McCoy
& Els, 488 S.W.3d at 433-34.
At the hearing on the motion for new trial, Joshua’s counsel told the court that
the “main pieces of property that are at issue” were the marital home, debts related
to the marital home, and the HFD retirement. We have already addressed Joshua’s
issues about the Austin Shores marital home and Joshua’s HFD retirement account
and found no basis for concluding that the trial court abused its discretion in
distributing those assets. Although Joshua filed a Request for Findings of Fact and
Conclusions of Law, none were entered, and the record does not reflect that Joshua
filed a Notice of Past Due Findings under Rule 297. Without findings of fact, we
must imply findings necessary to support the court’s judgment. Id. at 131, 141.
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Along with the parties’ testimony, both parties’ financial information statements and
proposed inventory and appraisements were entered into evidence. Joshua does not
point to any evidence in the record suggesting that the trial court did not consider all
the evidence before it. See Penafiel, 633 S.W.3d at 44-45 (the party challenging the
sufficiency of the evidence has the burden to show abuse of discretion). Viewing the
record evidence in the light most favorable to the challenged finding, we find no
abuse of discretion by the trial court, and we find the court’s division of property is
not so against the great weight and preponderance of the evidence as to be manifestly
unjust. See id.; McCoy & Els, 488 S.W.3d at 434. We overrule Appellant’s fourth
issue.
Having overruled all Appellant’s issues, we affirm the trial court’s Final
Decree of Divorce.
AFFIRMED.
_________________________
LEANNE JOHNSON
Justice
Submitted on July 5, 2022
Opinion Delivered August 31, 2022
Before Kreger, Horton & Johnson, JJ.
31