Posts

Want to resolve your Texas family law case outside of court? Remember these rules of engagement

Want to resolve your Texas family law case outside of court? Remember these rules of engagement

Originally published by The Law Office of Bryan Fagan, PLLC Blog.

Going to court to resolve a family law case is not a fun experience for anyone involved. You probably didn’t need me to tell you that, but it is the absolute truth. There is nothing glamorous about it. You will not have the moment in time where you get to call out your ex-spouse for the bad behavior he engaged into the delight of your family watching in the audience and the shock of the judge. If you are after truth, justice, and the American Way, then a family court is not the place to go.

What you are more likely to experience is a judge who is engaged but not sympathetic and an opposing party who is slinging mud at you based on issues that may or may not have ever occurred. Do not expect your ex-spouse to be contrite in response to any of the accusations that you hurl at him. I’ve seen enough men and women who have done bad things go on the offensive against a “victim” ex-spouse enough times to know that family court doesn’t deliver results in the way that you may anticipate.

With all of that said, it would make some sense to attempt to appeal to your spouse’s reasonable side and attempt to settle any family case outside of the courtroom. Mediation is a great resource for parties and attorneys alike when it comes to attempting to reach a middle ground on the important issues of your case. The nice part is that the judge in your case will likely require that you mediate your case at least once before you get anywhere near a courtroom. Odds are good that your case will settle and a potential courtroom drama can be averted.

What happens from the beginning part of your case until you get into mediation can have a lasting impact on the chances of your case settling. When it comes to co-parenting with a person who you may not see eye to eye with, getting along may not be an option. In these high conflict family court cases can you do anything to avoid disagreement and disaster?

Today’s blog post from the Law Office of Bryan Fagan will seek to answer that question. We actually took up the issue at the conclusion of yesterday’s blog post and we will continue to run with it in today’s blog. This is an important subject that you need to know about sooner rather than later. Learn what will work when it comes to co-parenting and avoid problems before they occur.

Be accountable to your co-parent

Whether you were married to your child’s other parent or not, you now have a sizeable amount of history with that person. You should feel some degree of responsibility to be held to your word. Basically, you should do the things that you say that you’re going to do. Just as importantly, you should avoid doing the things that you have said that you will not do. That shows that you take seriously the responsibility you have in raising a child with this person.

Even if you couldn’t care less how your child’s other parent views you, remember that everything you do in this case should be done to benefit the life of your child. Do not put your child in a bad position because you cannot be trusted or because you think it’s unimportant to be held to account for your actions. Taking the easy way out may seem better at the time (especially if doing so could harm your ex-spouse) but remember that in a co-parenting relationship you will often find yourself facing similar circumstances down the road.

Although you cannot control what your child’s other parent will do in response to your actions in the future, you have complete control over how you act at the moment. If you say that you are going to do something- do it. It’s as simple as that. Even if it means going out of your way or doing something that doesn’t seem like much fun if you said something your actions need to back those words up.

Keep a journal of interactions with your ex-spouse

If you are not a big fan of organization you may want to pay particular attention to this section of our blog post. Keeping notes of what you say and what your ex-spouse says in relation to your child is an important trait to pick up. For one, it will help you to remember better what was said so that you do not operate under mistaken assumptions and memories of things that did not occur. We’ve all been there- absolutely sure something happened, but as it turns out nothing close to that having occurred.

Before you consider filing a family lawsuit- whether that is a modification or enforcement lawsuit- I would recommend that you review those notes to determine how your memories line up with the reality of the situation. You may find that your emotions are not justified by past events as they actually occurred. It is a good practice to be able to check yourself by keeping notes of your meetings, interactions, phone calls, etc. Better to know exactly what took place than to run off to an attorney for no good reason.

Mediate, and mediate again (if necessary)

As I noted at the outset of today’s blog post, your case will very likely be decided in mediation rather than in a courtroom. Family court judges in most courts will mandate that you mediate your case at least once before stepping foot into their courtroom. When you and your ex-spouse find yourself facing a situation that is too big for you to resolve on your own, it is a good idea to push your attorneys to schedule a mediation early in your case.

Many times I will encourage clients to mediate their case even if an agreement is in place before the case is filed. Let me explain. Suppose that you and your spouse are getting a divorce. You know that you are getting a divorce- there is no chance to reconcile with your husband and divorce is the only alternative that you can seek at this point. You feel good that you all sat at the kitchen table and hammered out an agreement that will allow you to avoid having to go to court.

The next thing one of you does is walk into our office and tell one of our attorneys that you have an agreement for your divorce. All you are looking to do is have a lawyer draft order based on the agreement and you will be on your way. This sounds reasonable and in many ways is exactly what you should have done before coming to see a lawyer. However, I will add one thing to this discussion that should encourage you to seek advice from an attorney and mediator.

Here is that information- even if you have an agreement with your spouse in place for a divorce settlement, there is nothing guaranteeing that your spouse will stick to their word and honor that agreement. A lot can happen in between the time you all agreed to something at the kitchen table and the time where a judge can sign an order. An order has to be drafted, both sides must review the draft and signatures from you and your spouse must be collected. We’re talking at least a couple of weeks.

In the event that you or your spouse change your mind on the terms of your agreement, there is nothing to protect you. You could come up with an agreement only to see your spouse change their mind at the last minute. As long as he hasn’t signed the divorce decree he can turn his back on the process. This is completely legal and happens all the time. Before you start to worry, here is where mediation can solve this problem.

By going to mediation and resolving your issues there, you assure yourself of two things. For one, any agreements that you reach are going to be memorialized by a Mediated Settlement Agreement (MSA). You, your spouse and your attorneys will sign the MSA along with the mediator. This is significant because once it is signed there is no going back. I will tell clients that you cannot call me the next morning in a panic and tell me that the MSA needs to be tossed out because you realized you made a mistake of some sort. The final decree of divorce will be drafted off of that MSA.

Next, not only will you have an agreement in place that is unbreakable, but you also will ensure that you have accounted for all of the areas that are necessary for a divorce. Divorces can be complicated and touch on a range of issues. By coming up with your own settlement you are possibly missing out on a number of subjects that you had failed to account for. By having multiple attorneys and an experienced mediator look at the MSA you are almost guaranteed of having an agreement that takes into account all the areas you needed to account for.

What happens if you cannot agree on compromises after an order is established?

Once all the parties and the judge have signed off on an order it is set in stone. In the future, if there are any disagreements between you and your ex-spouse you can go back and refer to the order to see what your responsibilities are. That is reassuring to have a guidepost like that, but it can also be frustrating due to the fact that your family may “outgrow” the order.

In the future, you and your ex-spouse are free to resolve issues on your own without even filing a lawsuit. This is what judges assume will happen- the two of you will work together and resolve problems on your own without too much difficulty. You will save money and time by not filing a lawsuit and in the end, you will reach conclusions that are better tailored for your family than anything a family court judge could have come up with.

In the event that you have a problem that cannot be solved by negotiation and compromise, remember that the order is what controls the situation. Think of the order as your fall back provisions. Whatever you cannot agree upon means that your order takes center stage. As long as have a mutually agreed upon solution to a problem, you can go off of that solution. However, once one of you no longer agrees to abide by the compromise you must go off of what the order has to say.

This is important for you to know since you cannot be assured that you will always be able to come up with solutions to your problems on the fly. So, what you should take away from this discussion is that your orders had better be workable for your family- both now and in the future.

Questions about visitation problems? Come back to our blog tomorrow to find out more

As children age, and as your own circumstances evolve it may become apparent to you and your child’s other parent that your visitation orders need to be re-worked. What can you do in situations like this? If you find yourself in this sort of position, I would recommend that you return to our blog tomorrow. We will spend some time discussing this subject and how you can work around problems like this.

In the meantime, if you have any questions about today’s blog post or anything another subject in family law please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed family law attorneys can schedule you for a free of charge consultation six days a week. These consultations are a great opportunity to ask questions of our experienced attorneys and to receive direct feedback about your particular circumstances.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



Read More –>

Texas Court May Not Make Substantive Change When Clarifying a Custody Order

Texas Court May Not Make Substantive Change When Clarifying a Custody Order

Originally published by McClure Law Group.

By

Most Texas custody cases are between a child’s parents, but in some cases other family members may be involved.  In a recent case, an uncle challenged a modification of the access and possession terms of a court order related to his brother’s child.  Although the trial court expressed an intention to clarify the original order, the appeals court found it had improperly made a substantive change.

The child’s father is deceased.  In 2016, the father’s brother filed suit to be named as the child’s primary conservator.  The uncle and the mother ultimately reached an agreement, which was incorporated by the court’s order.  The order gave primary possession to the uncle and periodic possession to the mother.  The uncle had the right to request the mother undergo drug testing once a month.  She was required to appear for drug testing at a designated location within 24 hours of the uncle sending notice.  The uncle was prohibited from sending notice Friday through Sunday at 9:00 a.m. If the mother failed to appear within 24 hours, the results would be deemed positive.  If the drug test results were positive or deemed positive, the mother’s periods of possession would be suspended until there was a further court order.

The mother moved to enforce the order a month after it was entered.  She alleged the uncle did not make the child available to her during her time.  She sought criminal and civil contempt, additional periods of possession, and attorney’s fees.  She also asked the court to clarify the original order if it found any part of it was insufficiently specific to be enforced through contempt.

 

The trial court found the terms of the order were not sufficiently specific to be enforced by contempt.  The court added language requiring the uncle provide notice of the drug test “at a reasonable time” and give the mother 24 hours notice to comply. The court found the uncle in violation of the original order by failing to give the child to the mother on two occasions.  It also ordered him to pay $1,500 in attorney’s fees to the mother’s attorney.

The uncle moved for review of the attorney’s fees.  The judge confirmed the award but also specified it would be enforceable as both a debt and as child support.  The uncle appealed, arguing the court had not merely clarified the order but had made substantive changes to the terms.

A court may clarify a previous custody order, but may not generally modify a previous order unless certain conditions are met and the modification is in the child’s best interest.  A clarification cannot make substantive changes to the order.  Although a clarification can correct an error in the original judgment, it can only correct a clerical error, not a judicial error.  The clarification, therefore, cannot correct an error resulting from judicial reasoning.

The appeals court found the original order’s “possession and access terms were specific, non-ambiguous, and could be enforced by contempt.” The order allowed the uncle to request a drug test once a month.  It provided the method of the request and limited the times when he could request it.  The appeals court found the trial court had used judicial reasoning to add the requirement that the uncle send the request within reasonable time that gives the mother 24 hours notice.  The appeals court found the original text was unambiguous so the trial court did not have the authority to clarify.

The original order provided that a level of marijuana higher than 3.66 picograms would be deemed positive, but the modification added language limiting this provision to ingested marijuana. The appeals court found this was a substantive change.  The original order was unambiguous.

The appeals court struck the language purporting to clarify the previous order.

The uncle also argued there was no evidence that the enforcement of the order was necessary for the child’s physical or emotional safety or welfare, which would be required to enforce the attorneys fee award as child support.  The trial court did not find the uncle in contempt or enter a finding that enforcement of the original order was necessary to ensure the child’s health or welfare.  There was no evidence supporting characterizing the fee award as child support so the appeals court struck that portion of the order.

This case serves as a reminder that a Texas trial court’s ability to change a custody order is limited.  The court may not clarify an order by making a substantive change to its provisions, even if those provisions seem unfair.  An experienced Texas custody attorney can help you seek or oppose a clarification or modification of a custody order.  Call McClure Law Group at 214-692-8200 to schedule a consultation.

 

 

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



Read More –>

Teddy Bears_770x330

Just in Time For Summer: The Freeze-Out Merger, A Legal Option Available to SOME Majority Owners of Privately-Held Texas Companies

Originally published by Winstead.

By Zack Callarman and Mark Johnson

Our previous posts have stressed the critical importance of buy-sell agreements for both majority owners and minority investors in private companies (Read here). For majority owners, securing a buy-sell agreement avoids the potential of becoming “stuck” in business with a difficult co-owner without the ability to force a buyout of this minority investor’s ownership stake. For at least some majority owners of private Texas companies, however, another option exists. This option is commonly known as a “freeze-out,” “cash out” or “squeeze-out” merger.

What is a Freeze-Out/Squeeze-Out Merger?

A freeze-out/squeeze-out merger is a merger of two or more business entities that results in one or more of the equity holders of one of the pre-merger entities being cashed out as a result of the merger (i.e., not allowed to own equity in the post-merger surviving company).

Mergers are governed by state corporate law, and most states have several similar, but separate, merger statutes for corporations, LLC’s and other forms of business entities recognized under state law that govern mergers of those entities under various different circumstances. In that regard, it is worth noting that a “freeze-out/squeeze-out” merger is not a distinct type of merger governed by its own separate statute, but rather is a “characterization” given to a merger reflective of the purpose behind the merger, irrespective of the specific merger statute under which the merger is effectuated.

The Requisite Authorization and Approval for a Freeze-Out/Squeeze-Out Merger

Under state corporate law, mergers typically must be authorized and approved by both the equity holders and the directors of each of the entities participating in the merger. In the case of corporations, that means that typically both the directors and the shareholders must authorize and approve the merger, whereas in the case of LLC’s that means that typically the members and the managers must authorize and approve the merger. The actual level of that approval (i.e., unanimous consent vs. 2/3rds consent vs. majority consent) is governed by the applicable state merger statute together with the operative provisions of the entity’s organizational documents. By way of example, under Texas law, unless the entity’s governing documents provide otherwise, (i) the affirmative vote of at least two-thirds of the outstanding voting shares is required to authorize and approve a merger of a corporation, and (ii) the affirmative vote of the holders of at least a majority of the outstanding voting membership interests is required to authorize and approve a merger of an LLC.

So, the gating question for any individual or group wanting to possibly effectuate a freeze-out/squeeze-out merger is: Do you have the requisite vote under applicable law and under the entity’s governing documents to authorize and approve the merger?

The Fair Market Value Presumption
It is important to remember that while a freeze-out/squeeze-out merger may well enable the “majority” to force one or more minority holders out of the company, a freeze-out/squeeze-out merger does not entitle the majority to steal, or cheat the minority holders out of, their equity interests. The minority members who are being frozen or squeezed out should receive fair value for their interests. Otherwise, the majority proponents of the freeze-out/squeeze-out merger will likely be vulnerable to claims by the minority interest holders for oppression, breach of fiduciary duties, etc.

In the case of corporations, the “fair market value” presumption is governed by statute. In many (but not all) mergers involving corporations, under state corporate law, the effected shareholders, including any minority shareholders who will be frozen or squeezed out as a result of the merger, have statutory “dissenter’s rights” or “appraisal rights”. In short, a shareholder with “dissenter’s rights” or “appraisal rights” who objects to the amount that he is going to receive in exchange for his equity interests as a result of the merger is entitled to go to court and appeal the valuation. The court then has the power to revise the amount that the shareholder will receive based on its determination of fair market value.

Curiously, LLC statutes do not typically include dissenter’s rights provisions. However, given (i) the well–established fair market value presumption that exists in the context of corporate mergers, together with (ii) the strong “fiduciary duties” overlay that exists under statutory and common law with respect to the duties and obligations of members of LLC’s with respect to their fellow members, prudence dictates that the majority proponents of a freeze-out/squeeze-out merger make every effort to honor the fair market value presumption in any freeze-out/squeeze-out merger they effectuate.

Logistics of a Freeze-Out/Squeeze-Out Merger
So, assuming that the majority proponents of a freeze-out/squeeze-out merger have the requisite vote under applicable law and under the entity’s governing documents to authorize and approve the merger, how do they do it? The answer to that question will again depend in part on the form of the entities involved, the governing corporate statutes, and the organizational documents of the entities involved, but with those qualifications, the answer is pretty simple: The majority proponents form a new entity with whatever ownership and capital structure they desire, and then they merge the existing entity (i.e., the entity in which the soon-to-be frozen or squeezed out equity holders hold an interest) into the new entity. Under the terms of the merger agreement, among other things, the new entity will be the surviving entity, and the equity interests of the frozen or squeezed out minority interest holders will be redeemed for cash in an amount equal to the fair market value of the redeemed equity interests.

Conclusion

The freeze-out merger is a legal avenue that may not be widely known by majority owners of private companies, but it is used with some regularity in Texas and is rarely disallowed by the governance documents of most companies. There should be a note of caution for majority owners in deploying this technique, however, because if dissenter’s rights apply and are exercised by the minority investors in response, the freeze-out merger may result in a time-consuming and a costly appraisal process.

Zack Callarman (Associate) and Mark Johnson (Shareholder) are members of Winstead’s Corporate, Securities/Mergers & Acquisitions Practice Group.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



Read More –>

Court Must Assign Value to Lease in Texas Divorce

Court Must Assign Value to Lease in Texas Divorce

Originally published by Robert Epstein.

By

A trial court in a Texas divorce must divide community property in a just and right manner.  Property can be somewhat broadly defined as it relates to property division in a divorce case.  Many people do not realize that a lease of someone else’s property is subject to division in a divorce, unless the lease is shown to be separate property.

In a recent case, the wife challenged a property division that did not include a recreational lease held by the husband.  The wife appealed the property division, arguing error in the trial court’s division of property.  She argued the court failed to include a recreational lease in the community estate and that the court unfairly allocated the husband’s tax debt.  The court had allocated all of the tax debt to the husband, but the wife argued the court erred in using it to offset the value of the assets awarded to the husband.

At trial, there was evidence the husband signed a written lease for a ranch during the marriage.  The husband’s friend owned the property and testified the husband had helped him build or enhance some of the improvements on the property.  The owner testified he would sell the ranch to the husband for a significant discount and indicated he would extend the lease to the husband indefinitely as long as he paid the rent.

 

The wife argued the husband was an owner of the ranch and was hiding his ownership interest from the IRS.  The trial court found the husband did not own the ranch.  The wife moved for reconsideration, arguing the court should assign value to the lease.  The court rejected her argument.

The wife did not argue the husband had an ownership interest in the ranch on appeal.  She argued that the leasehold interest should have been included in the property division.  A lease of property acquired during marriage is generally subject to division unless it is shown to be separate property by clear and convincing evidence.  The ranch lease was executed during the marriage and extended beyond the divorce; therefore it was presumed to be community property.  No evidence otherwise was presented.  The appeals court found it was not within the trial court’s discretion to find the lease was not community property.  The court, however, should have determined if the lease had enough value to affect the division of the estate.

The trial court did not assign any value to the lease, and there was not sufficient evidence presented for it to do so.  Community property is generally valued at “market value.” That is, the amount a willing buyer who wants to but has no obligation to buy would pay a willing seller who wants to sell but is not obligated to sell.  If there is no market value, the parties may show the property’s actual value to its owner.

There had been evidence at trial of the market value of the ranch itself, but not the value of the lease.  The only related evidence was the amount the husband paid for rent, but there was no evidence regarding whether that amount represented the actual value of the lease, or if the husband had possibly received a good deal due to his relationship with the owner.  The appeals court also noted it was possible the nearly $200,000 the husband would pay in rent over the 10-year lease term could be greater than the value of the lease.  The appeals court found there was insufficient evidence to determine if the lease was a community asset, community debt, or was too inconsequential to have an effect on the property division.

The appeals court noted both parties have a responsibility to provide sufficient evidence regarding the community estate’s value to allow the court to divide the property in a just and right manner.  In some cases, courts have held that a party who fails to provide sufficient evidence of property’s value cannot later challenge the trial court’s division of the property on the grounds it had insufficient evidence.  The appeals court noted this type of waiver may be appropriate where there was some evidence of the property’s value or where the unvalued property would have little effect on the total division.  With no evidence of the lease value and its total omission from the property division, the waiver would not be appropriate here.  Without evidence of the value of the lease, the trial court could not achieve a “just and right” property division.

The appeals court affirmed the divorce, but reversed the property division.  Because the appeals court reversed and remanded for a new property division, it did not address the challenge regarding the tax liability.

If you are facing a complex high-asset divorce, the skilled Texas divorce attorneys at McClure Law Group can help you fight for a fair property division.  Call us at 214.692.8200 to talk about your case.

 

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



Read More –>

Award of Retirement Increases in Texas Divorce

Award of Retirement Increases in Texas Divorce

Originally published by Kelly McClure.

By

Retirement can be a complex issue in Texas divorce cases.  In some cases, retirement accounts may not be fully vested.  In others, retirement income may be subject to periodic increases.  When retirement income is subject to increases, the spouse required to make ongoing payments should be sure he or she understands how to calculate those payments in light of the increases.

A former couple recently ended up back in court more than a decade after their divorce due to a dispute over how to calculate retirement increases.  The couple married in 1976 and divorced in 1998, after the husband’s retirement from the military.  The wife was awarded $754.80 per month of the husband’s retirement, and 60% of all increases “due to cost of living or other reasons…”  The husband was ordered to name the wife beneficiary under the Armed Services Survivor Benefit Plan (SBP).  The wife was ordered to pay 40% of the cost of the SBP, which was to offset the retirement award the wife received.

In 2012, the wife informed the husband he had underpaid her.  His new attorney told him he had been calculating his payments incorrectly. He had been calculating the payment using a method that resulted in payment of 60% of all cost of living increases cumulatively.  After receiving advice from counsel, he began paying his wife 60% of the increases only in the first year they were received.

The wife petitioned to enforce the retirement award, claiming she had been underpaid.  The husband argued he had overpaid her and that she had not paid the SBP premiums.  At trial, the wife testified she was owed more than $7,000 and that she had paid the SBP premiums according to the prior ruling.  The husband did not provide evidence of the overpayment amounts or the SBP premiums he claimed were owed to him.

The court found that the wife was entitled to $754.80 per month as her share of the husband’s retirement, and 60% of any cost of living increase in the year it was first received.  The court awarded the husband $2,617.57, but did not state how it calculated that amount or how it was allocated between the overpayments and SBP premium underpayments.

On appeal, the wife argued the original decree required the husband to pay 60% of any increases cumulatively.  She also argued the evidence was insufficient to support the trial court’s finding she had not paid the SBP premiums as required.  The husband argued the trial court had correctly interpreted the original award.

The appeals court considered whether the trial court had sufficient evidence to exercise its discretion and whether the court erred in application of that discretion. Evidence is insufficient if there is a complete absence of evidence regarding a vital fact, the rules of evidence do not allow the court to give weight to the only evidence supporting a vital fact, there is a “mere scintilla” of evidence supporting a vital fact, or the evidence establishes the opposite of the vital fact conclusively. The court errs in the application of its discretion if it makes an arbitrary or unreasonable decision.

The appeals court had previously decided a case with similar language regarding increases in retirement income.  In that case, the appeals court held the wife was entitled to the fixed amount plus the percentage of the accumulated cost of living increases.  The appeals court referred to the husband’s argument that she only receive the percentage during the first year as “a tortured reading of the divorce decree.”  The appeals court noted that the wife’s share is based on the accumulated increase because the husband receives base retirement pay plus the accumulated adjustments.

The trial court abused its discretion in finding the wife was only entitled to the increases during the first year. The appeals court further found that the order improperly amended, modified, altered, or changed the substantive division of property in the divorce decree.

In its opinion, the appeals court rendered judgment clarifying the divorce decree to provide that the wife is entitled to “60 percent of all accumulated increases…”  The appeals court found the husband was entitled to nothing on his claim for overpayment of the retirement award.  It remanded the wife’s claim to the trial court for proceedings to determine the amount of the underpayments.

The appeals court then considered the SBP premium claim.  To succeed on his claim to enforce the premium obligation, the husband had to prove his wife failed to comply with the obligation and prove the underpayment amount.  The evidence presented on this issue indicated the wife deducted her premium obligation from the amount the husband owed her and paid him $138.43 each month since 2013.  There was no evidence in the record of missing premium payments.

The appeals court found “a complete absence of evidence” supporting the husband’s claim.  The trial court abused its discretion by finding the wife had not met her obligation when the evidence was legally insufficient to support such a finding.  The appeals court reversed the judgment awarding the husband on his claim for premium payments and rendered a judgment that he receive nothing for that claim.

This case clarifies that an award of increases in retirement income will likely be interpreted to require that the increase in payment to the spouse be ongoing and not limited to the first year unless there is language otherwise.  If you have a dispute with your former spouse over property division, an experienced Texas divorce attorney can help you understand your obligations and fight for your rights.  Call McClure Law Group at 214.692.8200 to schedule a consultation.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



Read More –>

Texas Court May Not Ignore Stipulations in Property Division in a Divorce Case

Texas Court May Not Ignore Stipulations in Property Division in a Divorce Case

Originally published by Francesca Blackard.

By

Generally, a trial court in a Texas divorce case has the discretion to divide marital assets.  A trial court can, however, abuse its discretion if it divides property without reference to guiding rules or principles and without evidence to support the ruling.  An appeals court recently found that a trial court abused its discretion by mischaracterizing separate property as community property and improperly divesting the husband of his separate property.

Both parties had been married previously, and both asserted throughout the trial that they had separate property.  They each pled and testified that they had separate property and submitted documentation showing they had separate property.  Additionally, each submitted sworn inventories and filed proposed property divisions admitting the other party had separate property.  Neither party ever disputed or contested the other’s claims. There were only two disputed issues before the court at the time of the trial:  how to divide the wife’s retirement account and whether there were any reimbursement claims against the separate property.

The trial court, however, issued a letter ruling dividing all of the assets as though they were community property, despite the various agreements, stipulations, and uncontested submissions.  The husband moved for reconsideration, and the wife filed a short response in opposition.  The appeals court noted she had received the majority of the husband’s separate property under the letter ruling.

 

Following a hearing, the trial court denied the motion, stating that neither party proved their separate property by clear and convincing evidence.  The court entered its final divorce decree in accordance with the letter ruling.

The husband appealed, citing three issues.  He argued the court erred in failing to confirm separate property to which the parties had stipulated, that the trial court improperly divested him of his own separate property, and  finally, that the court failed to make a just and right property division.

The wife argued the appeals court should uphold the final decree because the parties had not rebutted the presumption of community property by clear and convincing evidence.

There is a rebuttable presumption that property owned at the time of a Texas divorce is community property. If a party claims assets are separate property, he or she has the burden to prove they are separate property by clear and convincing evidence.  The evidence does not have to be undisputed or unequivocal, but it must be sufficient to give the trier of fact a firm belief that the property is separate.

Texas law identifies certain property as separate, including property that was owned prior to the marriage or property that was received by one spouse by gift, devise, or descent.  In Texas, the marital estate only includes the community property, and the trial court does not have the authority to divest a party of his or her separate property in the divorce decree.

Parties may stipulate certain issues.  Stipulations are agreements, concessions, or admissions made by the parties in a court case.  If issues are excluded by stipulation, those issues are excluded from the court’s consideration.  There is no need for proof on an issue that is stipulated.  A stipulation of fact is conclusive as to the issue it addresses and is binding on the court.

Both parties stipulated that they did not dispute the other’s claims for separate property.  They filed sworn inventories.  They each submitted proposed property divisions or final decrees requesting the other’s separate property be confirmed as separate property.  The appeals court found that the trial court did not have the discretion to issue a ruling contrary to the stipulations, admissions, and undisputed evidence.

The appeals court found the trial court had unjustly divided the marital estate.  The trial court had mischaracterized separate property as community property, and then it had awarded the wife a large percentage of that community estate.

The appeals court found the trial court abused its discretion in divesting the husband of his separate property.  The appeals court affirmed the divorce but reversed the rest of the judgment and remanded for the trial court to confirm the separate estates in accordance with the stipulations, admissions, and undisputed evidence and to divide the marital estate in a just and right manner.

This case shows that courts sometimes act beyond the scope of their discretion.  If you are facing a high-asset divorce, a skilled Texas divorce attorney can help protect your rights and your assets.  Call McClure Law Group at 214.692.8200 to schedule a consultation.

 

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



Read More –>

What does being a joint managing conservator mean in a Texas family law case?

What does being a joint managing conservator mean in a Texas family law case?

Originally published by The Law Office of Bryan Fagan, PLLC Blog.

If you are involved in a
family law case in Texas then you are likely interested in knowing what you need
to do in order to best position yourself within the case. Certainly your
concerns lie mainly in being able to spend as much of your time with your
child as possible and to have a hand in making important decisions in
your child’s life. The rest, as they say, is just details.

The reality is that you need to know how to prepare yourself within your
case in order to be able to make credible arguments regarding your future
role in your child’s life. Although there is a presumption in place
under Texas law that both parents of a child should be named as joint
managing conservators of that child you will still want to have the evidence
available in your case point towards you becoming the primary managing
conservator if your case were to go to a trial.

Let’s take that assumption one step further: assuming that you and
your child’s other parent are going to be named as
joint managing conservators of your child, what are the biggest areas of disagreement that you can
expect to encounter in a negotiation or trial? In today’s blog post
from the Law Office of Bryan Fagan, PLLC we will discuss the subject of what
questions really matter in a Texas child custody case.

Designating the primary residence of your child

This is the big one that parents in child custody and divorce cases alike
get up in arms about- with good reason. Being able to designate the primary
residence of your child means three things. The first is that you are
able to live with your child during the week when school is in session
and for most of the summer. As a result you are awarded more time with
your child. Under a Standard Possession Order (SPO) this means that you
will likely be able to spend 55% of the year with your child, if not more.

Next, you have the right receive
child support from your child’s other parent. If you have one child at issue in
the custody/divorce case this means that 20% of your child’s other
parent’s income is on the hook for child support. Child support
is intended to even the scales a bit since the other parent does not see
your child as often and will not be responsible for much of the day to
day costs associated with raising the child. Keep in mind that child support
is not intended to allow your child to live the lifestyle that he has
become accustomed to or anything like this. It is meant to care for the
base essentials of daily life.

Third, being named as conservator with the right to designate the primary
residence of your child means that you are able to also be awarded superior
rights as to your child as well. It is typical that the parent with the
right to designate the primary residence of the child also is able to
have superior rights to being able to make educational and health care
related decisions as well. This is not always the case but it is often
times the case.

What about a geographic restriction on where your child can reside?

Even after the conclusion of your child custody case the court will retain
jurisdiction over the case so that a judge will be able to issue additional
orders in the future if the need arises. A typical restriction that is
put on families after a child custody case is that of a geographic restriction
on where a child can reside. While you are no longer subject to the jurisdiction
of a court, your child will be until he or she turns 18 or graduates from
high school. As such a court can regulate where your child lives until them.

The purpose of a
geographic restriction is to allow both parents of a child to develop and maintain a relationship
with their child after a child custody case. The thought is that if there
would be no geographic restriction that is put into place a mother or
father who is the primary conservator of a child could move away from
Texas after a case ends causing the other parent to need to move as well
in order to keep up. A geographic restriction states that you as the primary
conservator of the child must live within a certain geographic area. It
could be Harris County and any county that borders Harris. It could be
within a certain zip code. Or it could be within the boundaries of a certain
school district.

A geographic restriction is usually lifted in the event that the non-primary
parent moves out of the geographic area where the parties are restricted
to living. For example if your child is restricted to living in either
Harris or Montgomery County and after two years you decide to move to
Waller County then the geographic restricted is automatically lifted.
Your ex-spouse can move with your child wherever he or she wants. The
reasoning behind this is that the geographic restriction is intended to
benefit you, and if you decide to make a decision that does not coincide
with the order then you should not expect your ex-spouse to have to live
by the order either.

How is time with your child going to be divided up when your case concludes?

A Standard Possession Order (SPO), as its name implies, is the most typical possession schedule that is
handed out in a family law case in Texas. Its details can be found in
the Texas Family Code, but it basically involves the non primary parent
being awarded possession on the first, third and fifth weekends of each
month as well as a Thursday night during the school week. Holidays are
alternated on a yearly basis with the other parent. Summer vacation means
extended time to spend with the non primary parent as well.

If your case makes it all the way to a trial then a judge would likely
award the non primary parent a SPO barring evidence showing that it would
not be appropriate. Things like family violence, drug or alcohol abuse
are examples of situations that could lead to a SPO award not being made
by a judge.

If you are a parent to a young child under the age of three then you should
be aware that a SPO does not apply to you or your child. A judge would
need to take your specific situation into consideration when handing out
an order for possession. Obviously the needs of a child under the age
of three are considerably different from older children. What typically
happens is that a “stair step” order goes into place which
allows the non primary parent to be awarded more time with your child
the older the child gets.

If your family has a unique circumstance involving a child with a disability
or a factor that we have not covered today the best advice that I can
provide you with is to contact an experienced family law attorney in order
to discuss your circumstances in greater detail. There is no substitute
for being able to get practical advice from someone who has dealt with
cases like yours before. While you can receive advice from anyone, the
advice isn’t worth much until the advice giver has seen and experienced
what you are going through in particular.

Questions about family law matters in Texas? Contact the Law Office of
Bryan Fagan

The attorneys with the
Law Office of Bryan Fagan, PLLC appreciate your time and interest in today’s blog topic. If you
have any questions or seek clarification on anything that you’ve
read today please do not hesitate to
contact our office. We offer free of charge consultations six days a week in our office.
A licensed family law attorney would be honored to meet with you and answer
your questions and concerns in a pressure free environment.

We post to our blog every day of the wee and we hope to see you back here
tomorrow as we continue our discussion into relevant and important family
law topics.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



Read More –>

Child custody essentials for Texas families

Child custody essentials for Texas families

Originally published by The Law Office of Bryan Fagan, PLLC Blog.

Whether you are a parent going through a
divorce or a
child custody case in Texas, you need to be familiar with how a court will view your
case if you and your child’s other parent cannot settle in mediation.
The fact is that as long as you are not in a courtroom, what you and your
opposing party can agree to is pretty much how your case will be decided.
Meaning: if you all can settle on an arrangement for child custody a court
is likely to honor it because there is a presumption under the law that
as your child’s parents, you both have his or her best interests in mind.

On the other hand, if you cannot settle your case then it will head to
a courtroom where all of the power as far as decision making is taken
from you and your child’s other parent and placed in the hands of
a family court judge. This judge, while well meaning and bound to make
decisions based on the law in Texas, does not know you, your child or
the opposing party in your case. He or she will have a limited amount
of time to learn the facts and circumstances of your case and then apply
the law in a fair manner.

Best interests of your child

It is presumed that naming you and your child’s other parent as
joint managing conservators is in the best interests of your child. This is the starting point that
your judge will being their analysis from when it comes to awarding a
particular schedule of possession. However, once evidence begins to be
presented in a trial a judge can make different decisions regarding what
is actually in your child’s best interests.

What sort of evaluation does a judge make as to what is (or is not) in
your child’s best interests? First of all, the judge would likely
want to do a review of the home environments of both you and your child’s
other parent. This often times meaning have an amicus attorney or attorney
ad litem conduct a review of the home environments and to compile a report
for the judge so that he or she can make a more informed decision.

Next, what your strong-suits when it comes to parenting and what are your
weaknesses? What are those of your child’s other parent? Do you
and your child’s other parent work well when it comes to co-parenting
or are you unable to stand the sight of the other? Your jobs and your
financial stability are also considered, although to a lesser extent when
yours and that of the other parent are similar.

What a court will look to when making its ultimate determination as to
child custody

Judges in Texas are empowered by the Texas Family Code to use their judgment
to a great extent when making this decision. The law will guide him or
her but in large part your judge’s own notions and opinions on the
subject will be key.

I will note that if your child is over the age of 12 and you file a motion
to have him or her speak to the judge about their own wishes as to where
they want to reside primarily a judge must consider their opinion. How
much the judge considers it is left up to that judge.

The current and future needs of your child (emotional, educational, financial,
etc.) are considered along with your and your opposing party’s abilities
to provide for your child’s needs. How stable is the home that you
are living in and what do your habits and past actions in the realm of
parenting indicate as far as your ability to provide the sort of environment
that is conducive to raising a successful and happy child in today’s world.

There are other factors that will present themselves in your trial, but
since they vary significant on a case to case basis I won’t attempt
to discuss them here. Suffice it to say that a judge will consider a great
number of factors when determining custody and conservatorship issues.

Sole custody of your child

A judge can award you or your child’s other parent a
sole managing conservatorship. This means that your child would live primarily with that parent. This
is how it would work under a joint managing conservatorship as well, but
the major difference is that the sole managing conservator would be in
the driver’s seat as far as making decisions for your child in regard
to important subjects like education and health care matters.

Joint custody of your child

Joint custody is much preferred by judges and, as we just finished discussing,
is the presumptive choice for judges to order in a child custody or divorce
case. Not only does it encourage parents to both have a long lasting and
committed relationship with their child but it also allows parents to
split the responsibility of sharing rights and duties as to that child.
I think in my years of practicing family law that this is most underrated
aspect of parenting. Most parents focus on time and de-emphasize the rights
and duties aspects of parenting. Ask any parent who feels left out of
the conversation when it comes to making important decisions and that
person will tell you how hard it is to be an effective parent without
this right.

Drawing a distinction between rights/duties and time with your child

As a parent there are really two, main aspects to your ability to parent
your child. The first is being able to spend time with your child and
have him or her in your possession. Quality time is what most people like
to call this. Evenings spent watching a movie in the living room, early
morning breakfasts enjoying a sunrise together or playing catch in the
backyard. These are familiar images for a lot of families and are what
I think most clients in a family law case think about when considering
what it means to be a parent and what is being fought for and over in
a family law case.

I will again emphasize, however, just how important it is to have the legal
right to make decisions on behalf of your child. Where your child attends
school, what kind of religion he or she practices, the sort of medical
care he or she receives and many other decisions are just the sort of
life changing issues that I am talking about when I talk about rights
and duties of parenting.

While you or I may commonly refer to this as legal custody of your child
it is actually called conservatorship in the Texas Family Code. Ironically
enough, despite how frequently it is used by the general public and attorneys
alike, the word custody does not actually appear in the Texas Family Code
even one time.

Using the parenting class as an opportunity to learn more about your child
and your family

Most Texas counties will require you to go through a mandatory course on
parenting. It may seem a little demeaning for a court to demand that you
attend a course on parenting after you have been a parent for years. I
understand this may seem like a waste of your time, but I have had more
than a few parents tell me that it really did open their eyes on how to
resolve conflict, work with the other parent after a family law case and
how to maximize the time that you do have with your child.

More on the subject of child custody will be posted in tomorrow’s blog

If you are interested in the information contained in today’s blog
post then you will want to stick around until tomorrow when we conclude
this mini-series of
child custody issues in Texas family law cases. If you have any questions in the meantime
I suggest that you contact the
Law Office of Bryan Fagan, PLLC. One of our licensed family law attorneys can meet with you six days a
week for a free of charge consultation. We can answer your questions and
address your concerns in a comfortable and pressure-free environment.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



Read More –>

Arbitrator’s Evident Partiality in Texas Divorce Case

Arbitrator’s Evident Partiality in Texas Divorce Case

Originally published by Kelly McClure.

By

Many couples facing a Texas divorce seek alternative dispute resolutions, such as arbitration or mediation.  Parties to an arbitration are entitled to an impartial arbitrator.  The Texas Arbitration Act requires a court to vacate an arbitration award on the application of a party if that party’s rights were prejudiced by “evident partiality” of an arbitrator.  The award should be vacated if the arbitrator does not disclose information that might give an objective observer a reasonable impression that the arbitrator is partial.  The requirement to disclose applies whether the conflict arises before or during the proceedings.  The nondisclosure itself establishes evident partiality, regardless of whether there is actual partiality or bias.  Texas courts have acknowledged that extensive experience in the area of law related to the dispute will result in a need for the arbitrator to disclose prior dealings with parties or attorneys.  However, the parties should be informed and have the opportunity to evaluate the potential bias ahead of time.

In a recent case, a wife challenged an arbitration award based on the arbitrator’s failure to disclose his connection to the husband’s attorney.  The parties agreed to arbitration pursuant to their pre-marital agreement. In the initial status conference, the arbitrator said he did not have a material relationship with either party or their attorneys beyond normal professional relationships. He did not supplement his disclosures after a new attorney filed a notice of appearance on behalf of the husband as co-counsel.

When the arbitrator failed to issue an award within the time frame set by the court, the husband’s attorney requested a ruling.  In her email, she stated, “You know how much I think of you as a friend and a lawyer . . .”   The arbitrator issued the award several days after the email, ruling in favor of the husband and against most of the wife’s claims.

The wife moved for a continuance, stating she had evidence of an undisclosed social relationship between the arbitrator and the husband’s attorney.  She asked to conduct further discovery and moved to vacate the arbitration award on the grounds she was prejudiced by the arbitrator’s partiality.

The husband filed an affidavit signed by his attorney.  The attorney stated she had known the arbitrator for more than 30 years.  She stated they both practiced in the same area of law and were both active in state bar activities and CLE programs.  She stated she and other family law attorneys had attended three or four cookouts associated with the state bar at the arbitrator’s home.  They had each spent the weekend at a mutual friend’s ranch, along with their respective significant others and other Houston attorneys.

The trial court found the motion for continuance was not filed timely and signed a final decree pursuant to the arbitration award. The wife moved for a new trial, or, in the alternative, to vacate, modify, correct or reform the decree.

The husband’s attorney testified the arbitrator had mediated her cases five or six times and arbitrated an issue in one case several years ago.  She also testified she had arbitrated a case he was involved in but did not remember the details.  She said she had gone to the ranch as the guest of her significant other.

The arbitrator testified he had known the attorney for about 30 years.  He said he had been mediator in her cases “maybe five” times and had been “clean up arbitrator” in a telephone arbitration.  He said he only remembered one cookout.  He also testified there were six to eight couples at the ranch that weekend.

The trial court denied both motions.  The wife appealed, arguing the failure to disclose the personal and professional relationship with the husband’s attorney showed partiality that warranted vacating the award.  She pointed to the attorney’s presence as a guest at cookouts at his home, the weekend both spent at the ranch, and the previous arbitration and mediations.

An arbitrator does not have to disclose trivial relationships.  The appeals court found, however, these were not trivial interactions and the two did in fact have a social relationship.  Furthermore, the arbitrator had previously been mediator and arbitrator for the attorney in multiple cases.  The husband argued the interactions were limited and they had merely a trivial social relationship. The appeals court it must review the facts from the perspective of an objective but found these connections could give an objective observer the reasonable impression that the arbitrator was partial.

The husband argued the trial court had resolved any questions of fact regarding evident partiality in his favor.  The appeals court noted the issue was a matter of law, not fact.  A trial court can resolve conflicts in the evidence, but there were no material conflicts requiring a factual finding.  There were some differences in the recollections of the attorney and arbitrator, but the appeals court ultimately found the differences were not material.

The appeals court also rejected the husband’s argument the wife waived the partiality complaint by not raising it earlier.  The appeals court found the email from the husband’s attorney did not constitute a full disclosure of the relationship.

The appeals court found the arbitrator’s failure to disclose the relationship constituted evident partiality.  The court affirmed the portion of the decree granting the divorce, but reversed the rest of the decree and remanded.

If you are facing a divorce, a skilled Texas divorce attorney can assist you.  The attorneys at McClure Law Group are experienced in both arbitration and litigation.  Call us today at 214.692.8200 to discuss your case.

 

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



Read More –>

Court May Order Battering Intervention and Prevention Program in Texas Custody Case

Court May Order Battering Intervention and Prevention Program in Texas Custody Case

Originally published by Robert Epstein.

By

In Texas custody cases, the best interests of the child are the primary consideration, and the court uses broad discretion in determining them.  If the court finds it is in the child’s best interest to do so, it may limit a parent’s visitation with the child or increase a parent’s time with the child, but only if certain conditions are met.  A father recently challenged a court’s order that he would have to complete a Battering Intervention and Prevention Program before the possession schedule could change.

The parents lived together with the child until the mother moved out of the home.  The father filed suit, asking to be named joint-managing conservator and to have the exclusive right to designate the child’s primary residence.  A jury found the parents should be joint-managing conservators. Although the jury gave the father the exclusive right to designate residence, it placed a geographic restriction on that right.

When the court issued the order, it left the temporary orders for possession in place until the father finished a Battering Intervention and Prevention Program. The mother was granted the exclusive right to consent to invasive medical procedures, make decisions regarding the child’s education, and possess the child’s passport.  The father requested findings of fact and conclusions of law, then appealed.
Continue reading →

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.



Read More –>