Court Opinion

ID: 2986795
Source: CourtListenerOpinion
Date Created: 2015-09-23 00:39:41.343563+00
Date Added: 2024-06-11T08:52:44.277111
License: Public Domain

Affirmed and Memorandum Opinion filed May 23, 2013.

                                            In The

                        Fourteenth Court of Appeals

                                   NO. 14-12-00060-CV

                            GARY WILLMORE, Appellant
                                              V.
                            KAREN A. QUIGLEY, Appellee

                       On Appeal from the 253rd District Court
                               Liberty County, Texas
                          Trial Court Cause No. CV72197

                    MEMORANDUM                          OPINION

      This appeal involves two parallel divorce proceedings, one in Texas and one
in Canada.1 In two issues, appellant Gary Willmore complains that the Texas trial
court did not order reimbursement to him for the community estate’s economic
contribution to property in Canada that the trial court in the Canadian divorce had
previously awarded to appellee Karen A. Quigley. We affirm.
      1
          The Supreme Court transferred this appeal to us from the Beaumont Court of Appeals.
                                       Background

       The parties were married in 1999. Each initiated separate divorce
proceedings in November 2006. Willmore filed in Texas, and Quigley filed in
Nova Scotia, Canada.2 The trial court in the Texas case signed a final decree of
divorce on September 3, 2008.           The decree granted the divorce, determined
custody, visitation and support issues regarding Willmore and Quigley’s son, and
divided the marital estate. On October 21, 2008, the trial court presiding over the
Canadian divorce proceeding entered an order declaring ―Quigley shall be the sole
owner of all real and personal property in her name and possession in Nova
Scotia,‖ except for a few items of personal property belonging to Willmore. On
November 25, 2009, the Beaumont Court of Appeals affirmed the granting of
divorce in the Texas proceeding, but reversed the remainder of the divorce decree
and remanded the case for proceedings consistent with the opinion. Quigley v.
Willmore, 09-08-00517-CV, 2009 WL 4062180, at *1 (Tex. App.—Beaumont
Nov. 25, 2009, no pet.) (mem. op.).                 On remand, Willmore sought a
disproportionate share of the marital estate in his favor, an award of his separate
property, reimbursement, and attorney’s fees. Quigley sought retroactive child
support, division of the marital estate, an award of her separate property,
reimbursement, and attorney’s fees.         The remanded issues were retried to the
bench.

       2
          Quigley also filed a proposal to resolve debt with her creditors under the Canadian
Bankruptcy and Insolvency Act on April 4, 2007. The proposal was approved by the Canadian
court on June 1, 2007.

                                             2
       The following evidence was adduced at trial, in relevant part. When the
parties were married, Quigley owned real property in Nova Scotia (the Milford
Farm) as her separate property, which included a house, a garage, and two barns on
five acres.3 Quigley testified Milford Farm was worth approximately $200,000
when she married Willmore. During the marriage, significant improvements were
made to Milford Farm. The parties built a lighted horse riding arena, horse stalls,
and a tractor barn and installed a bathtub in the house on the property. Willmore
testified the arena cost $160,000 in Canadian dollars.                   He also testified the
community estate spent approximately $350,000 improving Milford Farm.
Quigley testified the arena cost approximately $120,000, but said it was paid for by
mortgage proceeds. She testified she increased the existing mortgage on the farm
to pay for the arena and was still making mortgage payments at the time of trial.
The arena was rebuilt with insurance proceeds in 2004 after having been destroyed.
Quigley testified it cost approximately $130,000 to rebuild the arena. She also
testified they used insurance proceeds to build the stalls and the tractor barn, which
cost about $30,000. She testified installing the bathtub cost around $4,000.4

       During the marriage, the parties also purchased real property in Cleveland,
Texas (the Cleveland Farm). Quigley testified she received a personal injury
settlement of $57,000 that was used to pay for moving horses and farm equipment
from Milford Farm to Cleveland Farm and to pay for improvements to that
       3
           After the marriage, the parties purchased an additional 20 acres and subsequently sold it
in exchange for money and a five-acre lot attached to the Milford Farm. Another five-acre lot
that was purchased during the marriage was foreclosed on as part of Quigley’s bankruptcy.
Quigley testified that the property survived the foreclosure, but did not clarify that. Apparently,
she still owned that property at the time of trial. Willmore conceded that all the Canadian real
property was Quigley’s separate property at the time of trial and expressly limited his claim at
trial to reimbursement.
       4
         It is unclear whether these amounts were in United States or Canadian dollars, which is
irrelevant for purposes of our analysis. The arena burned down in 2010 after the finalization of
the divorce, and Quigley and her current husband received insurance proceeds for that as well.

                                                 3
property.5 She said the funds, along with money she borrowed, were used to build
a stable, a riding ring, and two barns and to repair a ranch house on the property.
She testified transporting the horses and equipment cost approximately $17,000,
and the remaining $40,000 of the personal injury settlement was applied to the
improvements. At trial, she sought a reimbursement for economic contribution to
the community estate from her separate property personal injury proceeds.

       The trial court entered a Final Decree on April 27, 2011. Willmore was
awarded personal property, cash and interest subject to his control, 50% of the cash
accounts in his control as of August 6, 2008, all sums in any retirement account in
Willmore’s name, a 2003 Ford F-350, and a mobile home located on the Cleveland
Farm. Quigley was awarded personal property, cash and interest subject to her
control, 50% of cash accounts in her control as of August 6, 2008, all sums in any
retirement account in her name, a 1969 Austin-Healey, her law practice, livestock,
tack, and related equipment in her possession or subject to her control, and the real
property located in Nova Scotia previously awarded to her by the Canadian court.
The trial court also assigned individual debts to Willmore and Quigley. The trial
court ordered the parties to sell the Cleveland Farm and split the net proceeds
equally. The parties were ordered to pay their own attorney’s fees and costs. The
trial court did not award reimbursement to either party.

                                    Discussion
       In two issues, Willmore (1) challenges the legal and factual sufficiency of
the evidence to support the trial court’s decision not to award him reimbursement
for the economic contribution from the community estate to Quigley’s separate
estate in Canada and (2) contends the trial court abused its discretion in ordering a
       5
         Willmore testified that the parties bought ―a lot‖ of horses during their marriage,
including a $40,000 Olympic horse. Several horses were moved from Canada to the Cleveland
Farm and subsequently moved back to Canada where Quigley sold some of them.

                                             4
division of property that is not just and right. We discuss these related issues
together.

      Under section 7.001 of the Texas Family Code, the trial court must divide
community property in a ―just and right‖ manner. Tex. Fam. Code § 7.001; Aduli
v. Aduli, 368 S.W.3d 805, 819 (Tex. App.—Houston [14th Dist.] 2012, no pet.). It
is well established that a trial court may exercise wide discretion in ordering a
property division. Aduli, 368 S.W.3d at 819. The division of property need not be
equal, and it is presumed that the trial court properly exercised its discretion in
determining the value and division of marital property. Id. We review an alleged
error in dividing marital property for an abuse of that discretion by a division or an
order that is manifestly unjust and unfair. Id.; see also Stavinoha v. Stavinoha, 126
S.W.3d 604, 607 (Tex. App.—Houston [14th Dist.] 2004, no pet.) Legal and
factual sufficiency are relevant factors, rather than independent bases for reversal,
in determining whether the trial court abused its discretion. Aduli, 368 S.W.3d at
819; see also London v. London, 94 S.W.3d 139, 143–44 (Tex. App.—Houston
[14th Dist.] 2002, no pet.). A trial court does not abuse its discretion if there is
some evidence of a substantive and probative nature to support the decision.
Barras v. Barras, 14-11-00954-CV, 2013 WL 266250, at *4 (Tex. App.—Houston
[14th Dist.] Jan. 24, 2013, no pet.). A trial court abuses its discretion if it acts
unreasonably or arbitrarily, or without reference to any guiding rules or principles.
Id.

      In a nonjury trial, when no findings of fact or conclusions of law are filed or
requested, as here, we infer that the trial court made all the necessary findings to
support its judgment. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex.
1992). When, as here, a complete record is brought forward on appeal, these
implied findings may be challenged for legal and factual sufficiency. Id. at 84.

                                          5
The same legal-sufficiency standard of review applies to findings by a trial court
and findings by a jury. Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). In
evaluating legal sufficiency, we credit evidence that supports the judgment if
reasonable jurors could and disregard contrary evidence unless reasonable jurors
could not. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). If there is
more than a scintilla of evidence to support the finding, the legal-sufficiency
challenge fails. Aduli, 368 S.W.3d at 814 (citing BMC Software Belgium, N.V. v.
Marchand, 83 S.W.3d 789, 795 (Tex. 2002)). For factual sufficiency, we consider
all of the evidence and set aside the order only if it is so contrary to the
overwhelming weight of the evidence as to be clearly wrong and unjust. Id. (citing
Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986)). If evidence supports the implied
findings of fact, we must uphold the trial court’s judgment on any legal theory
supported by the findings. Id. (citing Worford v. Stamper, 801 S.W.2d 108, 109
(Tex. 1990)).

      Reimbursement is an equitable right that arises when the funds or assets of
one estate are used to benefit and enhance another estate without itself receiving
some benefit. Barras, 2013 WL 266250, at *13. The parties agreed at trial that, to
the extent Willmore has a claim for reimbursement, the now repealed economic
contribution and reimbursement statutes apply. Under former section 3.403 of the
Family Code, ―A marital estate that makes an economic contribution to property
owned by another marital estate has a claim for economic contribution with respect
to the benefitted estate.‖ Act of May 28, 2003, 78th Leg., R.S., ch. 230, § 1, sec.
3.403(a), 2003 Tex. Gen. Laws 1056, 1056, repealed by Act of May 19, 2009, 81st
Leg., R.S., ch. 768, § 11(3), 2009 Tex. Gen. Laws 1950, 1953. In a claim for
reimbursement, the court shall take into account all the relative circumstances of
the spouses, determine the rights of both spouses, apply equitable principles to

                                        6
determine whether to recognize the claim, and order a division of the claim for
reimbursement, if appropriate, in a manner that the court considers just and right,
having due regard for the rights of each party. Hailey v. Hailey, 176 S.W.3d 374,
384 (Tex. App.—Houston [1st Dist.] 2004, no pet.) (citing Tex. Fam. Code
§ 7.007).

       The trial court’s discretion in evaluating a claim for reimbursement is as
broad as its discretion to effect a just and proper division of the community estate.
Id. (citing Penick v. Penick, 783 S.W.2d 194, 198 (Tex. 1988) (―In the final
analysis, great latitude must be given to the trial court in applying equitable
principles to value a claim for reimbursement.‖)). A party claiming the right of
reimbursement must plead and prove that the expenditures and improvements were
made and that they are reimbursable. Id. (citing Vallone v. Vallone, 644 S.W.2d
455, 458-59 (Tex. 1982)). Claims for reimbursement may be offset against each
other if the court determines that is appropriate. Id. (citing former Tex. Fam. Code
§ 3.408(c)).     The trial court must consider the facts and circumstances, and
determine what is just, fair, and equitable. Id. (citing Penick, 783 S.W.2d at 197).

       Here, the Canadian trial court’s order awarding Quigley all real property in
her name in Nova Scotia was entered before the Texas trial court’s 2011 Final
Decree containing a division of property.6 At trial, Quigley argued Willmore
should have asserted his claim for reimbursement in the Canadian divorce and thus
Willmore was precluded from bringing his reimbursement claim in Texas. See
Gannon v. Payne, 706 S.W.2d 304, 307 (Tex. 1986) (―Once a final judgment is
reached in one of [two parallel] actions[, one foreign and one domestic], the second
       6
         The trial court’s original divorce decree containing a division of property, which was
entered before the Canadian order, was reversed by the Beaumont Court of Appeals, as set forth
above. See Quigley, 2009 WL 4062180, at *1. The trial court noted it did not have jurisdiction
over the Nova Scotia real property and did not award that property to either party in the first
divorce decree. Id. at *2 n.1.

                                              7
forum is usually obliged to respect the prior adjudication under the rules regarding
the enforcement of foreign judgments.‖).                 The trial court likewise expressed
concern that it could not adjudicate any issues with regard to the property in Nova
Scotia.7      Willmore admitted that he had received ―notices‖ of the divorce
proceeding in Canada.8 Moreover, he did not assert that the Canadian court lacked
jurisdiction or present any evidence that he had been precluded from asserting a
reimbursement claim in the Canadian proceeding. During a hearing to enter the
2011 Final Decree, the trial court expressly stated that it had considered the
Canadian order and agreed that Willmore was ―divested of all, right, title[,] interest
and claim to . . . all real property located in Nova Scotia.‖ 9 The trial court
reasonably could have concluded that Willmore did not show he was entitled to

       7
         The trial judge stated, ―I’m concerned about the order—the property up in Canada. . . .
And y’all have failed to give me any real substantive information about the nature of some of
these things. I feel comfortable dealing with that which I have grown up with, and that’s
property law in Texas.‖
       8
           [Quigley’s counsel: D]id you get notice of a proceeding, the one in Canada
                               dealing with the separation or division of the property
                               between you and Ms. Quigley?
       [Willmore:]            I guess. I got multiple.
       [Quigley’s counsel:] You got multiple notices?
       [Willmore:]            Multiple court notices for different types.
       [Quigley’s counsel:] As a matter of fact, you have called and written those
                            courts before, haven’t you?
       ....
       [Willmore:]            I’ve written to the court several times.
       [Quigley’s counsel:] So you were aware of proceedings dealing with the division
                            of your property between you and Ms. Quigley going on in
                            Canada?
       [Willmore:]            I’m aware of what the Supreme Court of Canada Appeals
                              Division [sic] awarded. Yes.
       9
         The trial court stated, ―There is a decree from the Court in Nova Scotia that says that it
is [Quigley’s] separate property. And I took that into consideration whenever I was going
through [the division of property].‖

                                                8
reimbursement in the Texas proceeding.

      The trial court heard additional evidence in support of its decision not to
award Willmore a reimbursement:

            Quigley’s testimony that improvements were made to Milford Farm
            with community debt mortgage proceeds for which she personally
            was making payments at the time of trial;

            Quigley’s testimony that other improvements were made to Milford
            Farm with insurance proceeds;

            Quigley’s testimony that she used $40,000 of her separate personal
            injury settlement proceeds toward improvements on the Cleveland
            Farm, see Hailey, 176 S.W.3d at 384 (noting trial court may offset
            claims for reimbursement against each other);

            Quigley’s personal payments of community debts in Canada after the
            divorce proceedings were initiated and her bankruptcy commenced;
            and

            The Canadian bankruptcy court’s approval of Quigley’s proposal in
            bankruptcy, which valued the equity in Milford Farm at $14,500 as of
            April 2007, see former Texas Family Code section 3.403(b) (taking
            into account equity in benefitted property for purposes of determining
            amount of economic contribution claim).

We conclude the record contains evidence of a substantive and probative nature to
support the trial court’s decision that the community estate was not entitled to
reimbursement for economic contribution to Milford Farm. With regard to the
factual-sufficiency challenge, the trial court also heard Willmore’s testimony that
the community estate spent $350,000 improving Milford Farm and that Quigley
took horses owned by the community from Cleveland Farm to Milford Farm and
benefitted from the sale of some of them. We cannot say that the trial court’s
decision not to award a reimbursement for economic contribution to Milford Farm
is so contrary to the overwhelming weight of the evidence to be clearly wrong and

                                         9
unjust. Accordingly, Willmore’s legal and factual sufficiency challenges fail.

      Willmore also argues that the trial court abused its discretion in failing to
evaluate Quigley’s separate estate in Canada in making its property division. First,
Willmore has not shown that the trial court failed to do so. As set forth above, the
trial court heard evidence regarding the valuation of the Canadian real estate, in
addition to evidence of community debts in Canada paid by Quigley. Second, even
if the trial court did not evaluate the property in Canada, the trial court reasonably
could have concluded that these issues should have been raised in the Canadian
divorce proceeding.      See Gannon, 706 S.W.2d 307 (recognizing, in parallel
proceedings, second forum must defer to final judgment entered in first forum).
Willmore also complains that Quigley wasted community assets by receiving rent
on her separate property that was not used to benefit the community, allowing
community property in Nova Scotia to go into foreclosure, and selling horses at no
profit. Willmore does not explain how Quigley’s failing to use rent money from
her separate property to benefit the community could waste community assets.
Likewise, Willmore does not explain how the trial court could address the
disposition of property that the Canadian trial court had previously awarded to
Quigley (both the real property and horses). Taking all the evidence presented at
trial into consideration, we conclude the trial court did not abuse its discretion in its
division of the marital estate.

                                           10
         We overrule Willmore’s two issues.10 We affirm the judgment of the trial
court.

                                      /s/    Martha Hill Jamison
                                             Justice

Panel consists of Justices Frost, Christopher, and Jamison.

         10
          Quigley argues this is a frivolous appeal and urges us to assess sanctions against
Willmore under Texas Rule of Appellate Procedure 45. We decline to do so. See Glassman v.
Goodfriend, 347 S.W.3d 772, 782 (Tex. App.—Houston [14th Dist.] 2011, pet. denied) (en banc)
(―[T]he decision to award [sanctions] is a matter within this court’s discretion, which we exercise
with prudence and caution after careful deliberation.‖).

                                               11