NO. 07- 02- 0509- CV IN THE COURT OF APPE ALS FOR THE SEVENTH DISTRI CT OF TEXAS

AT AMARILLO PANEL C NOVEMBER 17, 20 03

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______ IN THE M ATTEROF TH E MAR RI AGE OF SUSAN EL AINE SMI TH AND M ATTHEW JOSEPH S MITH AND IN THE INTEREST OF LACEY RENEE SM ITH, A CHI LD

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_________ FROM THE 72 ND DISTRICT CO URT O F LUBBO CK CO UNTY; NO. 20 01- 514 ,1 93; HONORA BLE BLAI R CHE RRY, JR. , J UDGE

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_______ Before J OHNSON , C.J. , and QUINN an d REAVIS, JJ.
MEMORA NDUM OPI NI ON
Pre se ntin g seven po ints of er ror , appel lant Susan Ela ine Smit h conten ds the tri al co urt erred in mischaracteri zati on of cer tai n prope rti es and i n making i ts di vis ion of th e property in g rant ing h er di vorce from appel lee Matthew Josep h Smith. By h er poi nts, Susan contends 1) the trial court abused its disc ret ion i n its div isi on of asse ts and li abil it ies o f the marita l estate resul ti ng in a manifest ly unju st and unfai r di vis ion; 2) t he tr ial cou rt erre d in characteri zi ng $15,11 1 of Am erican Fu nds A ccou nt as Ma tthew’s se parate p roperty

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because there is no evi dence to support the award oralte rna tive ly, such award is contrary to the ov erwhel ming weigh t of t he evid en ce ; 3) th e tria l cou rt erre d in characteri zing $26,623 of Ameri can Fu nds Rot h IRAAcco unt as M atthew ’s separa te proper tybecause t here i s no evi dence to s up po rt th e a wa rd o r alt ern ativ ely, suc h aw ard is contrary to t he over

whelming weight of th e evi dence; 4 ) t he tr ial court erred in characteri zing the Morgan Stanl eyDean W itter Account h avi ng a bal ance of $56,04 3 as Matt hew’s se parat e prope rty because such characteri zati on is n ot suppo rte d bylega ll y su ffi cient evi dence or

alternat ive l y, su ch cha ract eri zati on is contrary to the ove rwhelm ing weigh t of the eviden ce; 5) the tri al co ur t erred in f

ail ing to recogn ize a n economic cont ri buti on in terest i n the c om m unity esta te in proceeds from the sale of p rop erty at 280 2 22 nd Stre et w hich con stitu tes Ma tthe w’s se parate property beca use the undispu ted eviden ce or alterna tively, the overw he lm in g weight of th e ev iden ce sup po rts o nly a concl usion thatthe com m unity estate is entitled to an economic cont ri buti on in terest i n such proceeds; 6) the t ri al co urterred in c haract eri zing the Edw ard Jon es Ac coun t having a ba lance of $8,717 .92 as M atthew ’s separa te prope rty b ecause such fi nding is wi thoutsupport in t he evi dence or

alternat ive ly , such find ing a n d conclu sion are cont rary to the o verwhel ming weight of th e evi dence; and 7) the trial court erred in a wardi ng a $10, 000 rei mbursement clai m to Matth ew on comm unity real property located at 100 C edar R oad in R uidoso , New M exico, effe ctively characterizing s uch p roperty as Matthew ’s separa te pro pe rty. Based upon t he rat ional e expressed, we reverse and rem and in pa rt and affirm in part.

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Matth ew and Susan were marri ed on December 27, 1986. Matt hew had one so n by a pri or marri age and one daught er du ring th e marri age to Susan. The marria ge had prob l ems several years pr ior to t he di vorce which prompted Matthew t o move out of the fam ilyhom e in Janu ary2000. Susan fi led a pet ition for d ivorc e in J un e 20 01 . At th e tim e of the m arriage, Ma tthew ha d a sep arate estate con sis ting of, a m on g ot he r thin gs , sto ck in McKee W holes ale, IRA accounts, rental proper ty , and a resi denc e. Following a n on-jury trial, the court m ade find ings of fa ct and c onclus ions of law

. Findi ngs of fact

in a bench t ri al ha ve th e same force as a j ury ’s v erdict upo n jury questi ons. City of Clute v. City of Lake J acks on, 559 S.W .2d 391 , 395 (Te x.C iv. App .-- Houston [14 th D ist.] 1 97 7, w rit ref ’d n.r.e.). However , t he fi nding s are n ot concl usiv e when a complete statement of facts appears i n the record if the contrary is e stabl ished as a matter of l aw or i f there is no evi dence to support the findi ngs. Mi ddleton v. Kawasa ki St eel Corp., 687 S .W .2d 42, 44 (Tex.Ap p.--H ousto n [1 4th Dist.] 198 5), writ ref ’ d n.r .e. , 699 S.W .2d 199 (Tex. 1985) (per curi am). Fi nding s of fact are revi ewable for f

actual and l egal suffi ciency

under the sam e stand ards tha t are appl ied i n rev iewi ng evi dence suppor ti ng a jury’s answer. Zieben v. Platt, 786 S.W .2d 797 , 799 (Tex .App.- -Houst on [14t h Dist .] 1990, no writ); see al

so W . W en de ll Hall, Re vis iting Sta nd ard s of Re view in Civ il App ea ls , 24 S T . M ARY ’ S L.J. 104 5, 1145 (1993). Further, where an appel lant chal lenge s both legal and fact ual s uffi ciency of th e evi dence, the app ellate court shoul d fi rst revi ew the l egal sufficiency challenge. Glover v. Texas Gen. I ndem. Co., 619 S.W .2d 400 , 401 ( Tex. 198 1); Koch Oil Co. v. W il ber, 895

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S.W .2d 854, 8 62 (Tex .App.- -Beaumont 1995, wri t deni ed). If an appel lant is a tta cking the legal suffi ciency

of an adv erse findi ng on whi ch he di d no t hav e t he burd en of proof, h e must show on appea l t hat t here i s no evi denc e to su p portthe ad verse fi nding . Croucher
v. Croucher , 660 S. W .2d 55, 58 (T ex. 1983 ). The review ing court co nsiders the ev idenc e in t he li ghtm ost favo rable to the find ing to deter mine if there is any probat ive evi dence or rea so na ble inferences therefrom which supp orts the finding

. Glover , 619 S. W .2d at

401. The court disregards all evi dence and inferences to the contrary. W eirich v. W eir ich, 833 S.W .2d 942 , 945 (Te x. 1992).
Ourrevi ew of tr ial court concl usion s of l aw is de novo. In re Humphreys, 880 S.W .2d 402, 403 (Te x. 1994), cert. deni ed , 513 U.S. 964, 1 15 S. Ct . 427, 130 L. Ed. 2d 3 40 (1994). How ever, as not ed above, alt hough fi nding s of fact are revi ew able for legal and fact ual su ffi cie nc y, an attack on the suffi ciency of th e evi dence must be di rect ed at s pecific findi ngs of factrat her t han at the judgm ent as a whole. In re M .W ., 959 S.W .2d 661 , 664 (Te x.App.- -Ty ler 1997, w rit denied). Furt her, the r ule h as oft en been ot herwi se stated that if the tr ial co urt’s findi ngs of fact are not chall enged by a poi nt of e rror o n ap pe al, they are bi nding upon the app ellate court. Nort hwest Par k Homeowners Ass’n , I nc. v . Bru ndrett, 970 S.W .2d 700 , 704 (Tex .App.- -Amaril lo 19 98, pet . deni ed); Cart er v. Cart er, 736 S.W .2d 775 , 777 (Tex.A pp.--Hou ston [14 th Dist.] 1987 , no writ).
W e addre ss Susan’ s poi nts i n a l ogica l rather than sequ ential order. By he r second and thi rd poi nts, she cont ends there is no evi dence or alternat ive ly

insu ffi cient

evi dence to support fi nding s of fact

13 and 14 and concl usion s of l aw 5(c)and (d ) t hat $15 ,111 ou t of1 The points were al ter nati vel y de nominated a s contrary to t he over

whelming weight of the eviden ce po ints. However, because Mi chael had th e burden to establish the sepa rate characterof th e fu nd s, th ey will be reviewe d as insu fficient eviden ce po ints. See Raw Hide Oil & Gas v. Max us Expl orat ion Co. , 766 S. W .2d 264, 275 -76 (Te x.A pp .--A m arillo 1 98 8, w rit denied ). 

### 5 the American Fun ds Account and $26, 623 outof th e American Fu nds IRA Acc oun t co ns titu ted Mic ha el’s se pa rat e p rop ert y. 1 W e agree in part.
Ac cordi ng to sect ion 3.003(a ) of the Te xas Fa m ily Code , property possessed by eit hersp ou se du ring or o n d iss olu tion ofm arr iag e is pre su m ed to b e c om m un ity pr op ert y. Also, under subsecti on (b)the de gree of proof requi red to establish tha t property is sepa rate property is c lear

and conv inci ng. As ap pli cable here, clea rand conv inci ng is the de gree of evi dence necessary to “produce i n the mind of the t rier of fa ct a fir m belief

or con victi on aboutthe al legat ions sought to be establishe d.” See Tarver v. T arver, 394 S.W .2d 780 , 783 (Tex. 196 5) . T o overcome the stat utory presumption, Matt hew had t he burd en to t race and clea rlyiden ti fythe property cl aimed to b e separa te. Traci ng in vol ves est abli shing the sepa rate ori gin o f the proper tythrough evi dence showi ng the ti me and means by whi ch the spouse or i gi nal l yob ta i ned po sse ssi on of th e p ro per

ty

. Ga nesan v. V all abhaneni , 96 S. W .3d 345, 354 (Tex .App.- -Austi n 2002, pet. deni ed). In Tarver , 394 S. W .2d at

78 3 , the Cou rt held:
and that whe n the evide nce s how s that sep arate an d com m unity property have been com mingled as to d efyresegregati on and i denti fica ti on, t he burd en is not di scharged and th e stat utory presumption t hatthe en tire m as s is comm unity co ntrols i ts di sposit ion.

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Further, testim ony of the sp ouse claiming th at t he property was acqu ired with sep arate property funds, wit hout an y t raci ng of t he funds, is g ener all y i nsuffi cient to rebut t he presumpti on. McElwee v . McEl wee, 911 S.W .2d 182 ,188 (Te x.App.--H ousto n [1st Dist.] 1995, wri t de ni ed) . Mo reo ver , i n In Matter o f Mar ri age of Mo ore, 890 S.W

. 2d 821, 827 (Te x.A pp .--A m arillo 199 4, n o w rit), w e he ld tha t a fid uc iary rela tio nship ex ists between a husb and an d a wife a s to the co m m unity property controlled by eac h spo use. An alysis
Because th e evi dence concer ning the Ameri can Funds Accou nt and the Ameri can Funds Roth I RA Accountis somewhatsi mila r, we wil l con sider Susan’s two “ no evi dence” chall enges to gether . The doc umentati on and t esti mony of Matthew demonstrated t hat at the ti me of the marri age, he brou ght sep arate prop erty into the marr iage, incl uding real and p ersonal proper

ty . Al so, hi s test imony s hows that duri ng the marria ge, he r eceive d numerous gif

ts from his parents. Becaus e the clea r an d co nvin cing tes t of th e ev iden ce is not ap plica ble to a “no evid en ce cha lleng e,” w e co nc lude the re is m ore tha n a s cin ti ll a o f ev ide nc e th at $ 15 ,11 1 a nd $2 6,6 23 we re M att he w’s se pa rat e p rop ert y. In consi deri ng the factua l suf fici encychal lenge s, appl yi ng the clear and conv inci ng degree of proof re quirement, we revi ew all the ev idenc e and revers e only if the ch all enged find ings are so agai nst t he grea t wei ght and prepon der ance of th e evi dence as to be
m an ifes tlyunju st. Pool v . Ford Motor Co., 715 S.W .2d 629, 63 5 (Tex. 19 86). Doc um entary evi dence pro vide d by M icha el to s upport his separate prope rty clai m of $15,111 of

the

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American Funds Account and $26, 623 of t he American Funds Roth I RA Account cons ist ed of (a)an account

stat ement dated Dec ember 18, 199 2, ( b) accou nt appl icat ion d ated 5/27/ 92, (c) request

for t ransfe rof assets dated 5/27/ 92, and (d)ret irement stat ements from Van Eck Funds marked “ closed o ut 6/ 11 /92. " Howeve r, all of th e documents are dated almostsixyea rs after t he marri age and do notprov ide a ny i nformati on iden tifying the origin orsource of the proper tyor when itwas ori ginal ly ob tai ned, as req uire d b y Ganesan . 96 S.W .3d at 354 . I ndeed, Matth ew now candi dly acknowl edges th at t he find ing a nd conclu sion thatthe en ti re $15, 111 of t he American Funds accou ntis his sepa rate prope rty is inco rrec t; ho we ver, he d oe s no t pro po se a rem ittitur o f the am ou nt a cc ord ing to his calcul ati ons. Cons idering that Ma tthew m aintained c om plete con tr ol of the sepa rat e and com m unityproper

tyof th e part ies, thathe had dut ies a s a fi ducia ry , t hat sepa rat e character cannotbe est abli shed by his test imonywit hout t raci ng and documentar y su pport , and t he absence or i nadequacy of th e documents t o demonstrate the d ate and source of the acqui sit ion of t he fu nds whi ch we re com mingled into the t wo account s, we conc lude the evi dence was fact uall y i nsuffi cient to establi sh that

$15,11 1 and $2 6,6 23 of the two acco unts we re th e se pa rate fun ds of M atth ew by cle ar a nd con vin cing ev idenc e. Ac co rdin gly, we sustai n Susan’ s fact ual i nsuffi ciency chal lenge s p resented in points two and three. Byherfourt h poi nt, Susan cont ends the tr ial court erred in characteri zing the bala nce of $56,04 3 in the Morgan Stanl ey Dea n W itter Account313029197 as Matthew ’s separa te proper ty because there was le gally insufficient eviden ce or the c haracte rization was contrary2 See footn ote 1. 

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to the ov erwhel ming weigh t of t he evi dence. 2 Applying the sta ndard o f rev iew and the author it ies referenced i n the f oregoi ng anal ysi s, and for t he reaso ns expresse d h erei n, alt hough we ag ree th ere wa s mo re than a s cintilla of evidence that the fun ds we re Ma tthe w’s sepa rate prope rty, w e concl ud e the evide nce w as fac tually i nsuff icient to establ ish t hat t he bal ance was hi s separa te property by clea r and c onvi ncing evi dence. Byfi nding of

fact 17, the trial courtfound t hat t he remaini ng bal ance of t he account represented a gif t fro m his mother and the proceeds of insurance cover ing a cabi n in New Mexic o. Th en , by co nc lusio n of law 5(a ), the trial c ourtcon clude d the a ccount was Ma tthe w’s sepa rate proper ty . Counsel for b oth par ti es agree the do cument desi gnated as Ma tthe w’s exhi bit30 pre sents a summ ary of th e account . According to t he documentati on, the accountwas not opened unti l Feb ruar y 19 97 and app ea rs to be s tyled M atth ew ’s “S ole and Se pa rate Pro pe rty.” Ho we ver, bec au se Ma tthe w’s appendi x 3 documentdemonstrat es thatcomm unity funds were indeed funneled into the account, he m aintained exclusive control of th e separate and communityproper tyand th e fidu ciar y relatio ns hip, the style “s ole and separate property” is n ot cont rol li ng for purpose s of our

anal ysi s. Alt hough Matt hew acknowl edged t hat community funds had been deposi ted i nto t he acco unt, in his brief , he bas es his s up po rt of the find ings of th e tria l co urt o n S ible y v. Sib ley, 286 S.W .2d 657 (Tex. Civ. App.- - Dal las 1 955, wri t di sm’d), which h eld t hat where an accountcontai ns comm unity an d separate funds, it is presum ed the c om m unity funds a re

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dra wn fi rst so thatthe b ala nc e in the ac co un t is p res um ed to b e s ep ara te p rop ert y. Alt hough Sibl

ey was a di vorce case, i t i s not co ntroll ing h ere beca use i t i nvol ved a “ joi n t acco unt,” which is not prese nted he re. Accordi ngly , becaus e Matt hew’s testi mony stand ing alone is i nsuffi cient

to t race t he separate nat ure of the fund s, McElwee , 911 S. W .2d at 188, the docu mentati on do es not show the o ri gin o r source of t he funds, the referen ced real estate transac tions we re not indep ende ntly docum ented a nd co m m unity funds w ere ad m itted lydeposi ted i nto t he account , t he evi denc e is insuf fici ent t o overcome the com m unityproperty pre sumption b y cl ear and convi ncing evi dence. See Tarver , 394 S.W .2d at 783. A ccord ingl y, we sustai n Susan’ s conten ti on in her f ourt h poi nt t hat t he evi dence was fact uall y i nsuffi cient to sup porta fi nding by clear and conv inci ng evi dence th at the balance of the Mo rgan S tanley Dean W itter Accou nt was Matthew ’s separa te pro pe rty. Ourdisposition of points of er ror two, three, and four pret ermits ourconsi derat ion o f herremaini ng poi nts. W e rev erse t hat por ti on of t he t rial c ourt ’s j udgment that characteri zes proper

tyas com m unityand separate and div ides the community estat e and remand those iss ues to the t ri al co urtfor furt her proceedi ngs. I n all other aspects , t he judgment of

the t ri al co urtis a ffi rmed.

Do n H . Re avis Just ice