Court Opinion

ID: 3096802
Source: CourtListenerOpinion
Date Created: 2015-10-16 04:41:04.688664+00
Date Added: 2024-06-11T12:46:54.813965
License: Public Domain

IN THE
                             TENTH COURT OF APPEALS

                                    No. 10-09-00429-CV

                     IN THE MATTER OF THE MARRIAGE OF
                          JANA CATHERINE GRISHAM
                                    AND
                           SIDNEY EUGENE GRISHAM

                             From the County Court at Law
                                Walker County, Texas
                                 Trial Court No. 8,997

                             MEMORANDUM OPINION

          Jana Catherine Grisham appeals the trial court’s division of property. Because

we find that the trial court did not abuse its discretion in making the division, we

affirm.

          In her sole issue on appeal, Jana argues that the trial court abused its discretion

in its division of the marital estate because the court’s division was arbitrary or

unreasonable.

                                    STANDARD OF REVIEW

          We review a trial court's division of property under an abuse of discretion

standard.      Wells v. Wells, 251 S.W.3d 834, 838 (Tex. App.—Eastland 2008, no pet.). A

trial court abuses its discretion when it acts without reference to any guiding rules or
principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). The

mere fact that a trial court may decide a matter within its discretionary authority in a

different manner than an appellate court in a similar circumstance does not

demonstrate that an abuse of discretion has occurred. Wells v. Wells, 251 S.W.3d at 838.

          When an appellant challenges the trial court's order on legal or factual

sufficiency grounds, we do not treat these as independent grounds of reversible error

but, instead, consider them as factors relevant to our assessment of whether the trial

court abused its discretion. Wells v. Wells, 251 S.W.3d at 838; Boyd v. Boyd, 131 S.W.3d
605, 611 (Tex. App.—Fort Worth 2004, no pet.). To determine whether the trial court

abused its discretion because the evidence is legally or factually insufficient, we

consider whether the court (1) had sufficient evidence upon which to exercise its

discretion and (2) erred in the application of that discretion. Wells v. Wells, 251 S.W.3d

at 838.

                             MISCHARACTERIZATION OF PROPERTY

          Jana specifically argues that the trial court’s characterization of Grisham

Petroleum and Grisham Construction as the separate property of Sidney was not

supported by the evidence presented to the trial court.         The trial court made the

following findings of fact relating to the characterization of the two businesses:

                21. Approximately one month after the marriage, Mr. Grisham
          made a business decision to change the form in which his separate
          property was held. This property consisted of property that Mr. Grisham
          earned and acquired over 19 years prior to marriage. Mr. Grisham did not
          change the form of his businesses to prevent Mrs. Grisham from making
          claims against his separate property, but rather for tax and business
          purposes and to provide, in some part, for his three grown children from a
          former marriage and his marriage to Mrs. Jana Grisham.

In the Matter of the Marriage of Grisham                                               Page 2
             22. To this end, in April 1996, Mr. Grisham exchanged his shares in
       Grisham Construction Co. and Grisham Petroleum Co. for 96% of the
       shares in Spring Air Co., Ltd. Each of Mr. Grisham’s three children
       acquired a 1% interest in Spring Air and Country Air acquired 1% interest
       as the managing partner of Spring Air. Mr. Grisham is the only
       shareholder of Country Air.

              23. Mr. Grisham never received any money or property in
       exchange for his interests in the two businesses mentioned above. Spring
       Air was completely funded by Grisham Construction and Grisham
       Petroleum and the court finds that these entities never lost their separate
       property character, but mutated to a different form of conducting the
       same business as prior to marriage and remain his separate property but
       now he only owns 96% of them.

       All property on hand at the dissolution of marriage is presumed to be

community property. TEX. FAM. CODE ANN. § 3.003(a) (Vernon 2006). It is a rebuttable

presumption requiring a spouse claiming assets as separate property to establish its

separate character by clear and convincing evidence. TEX. FAM. CODE ANN. § 3.003(b)

(Vernon 2006).        The characterization of property as community or separate is

determined by the inception of title to the property. In re Marriage of Jordan, 264 S.W.3d
850, 855 (Tex. App.—Waco 2008 no pet.); Wells v. Wells, 251 S.W.3d at 839. Once

determined, the character of the property is not altered by the sale, exchange or

substitution of the property. Harris v. Harris, 765 S.W.2d 798, 802 (Tex. App.—Houston

[14th Dist.] 1989, writ den’d). Property established to be separate remains separate

property regardless of the fact that it may undergo any number of mutations and

changes in form. Id.

       Both parties agree that Grisham Construction and Grisham Petroleum were

owned and operated by Sidney prior to the marriage. Spring Air was formed after the

marriage, and both parties agree that it is community property. Sidney testified that he

In the Matter of the Marriage of Grisham                                             Page 3
transferred the stock and assets of Grisham Construction and Grisham Petroleum to

Spring Air without receiving monetary compensation for the transfer. Sidney was able

to trace the Grisham Petroleum and Grisham Construction assets of Spring Air back to

his separate property. Therefore, the exchange did not alter the character of those

companies as separate property. See Harris v. Harris, 765 S.W.2d at 802. The trial court

did not abuse its discretion in finding that Grisham Construction and Grisham

Petroleum are the separate property of Sidney.

                                 VALUE OF COMMUNITY ESTATE

       Jana argues that the trial court’s valuation of the community estate was not

supported by the evidence. Because we find that the trial court did not mischaracterize

Grisham Petroleum and Grisham Construction, we need not address Jana’s argument

that the mischaracterization undervalued the community estate. Jana contends that

even if the trial court correctly characterized Grisham Petroleum and Grisham

Construction as separate property, the trial court still undervalued the community

estate by establishing values not supported by the evidence.

       Jana states that the trial court did not reference the valuation or division of

Country Air Corporation or Spring Air Realty, LLC in its findings of fact. To be

reversible, any error in determining the value of individual items must be so significant

that it affects the trial court’s just and right division of the property. See Zeptner v.

Zeptner, 111 S.W.3d 727, 740 (Tex. App.—Fort Worth 2003, no pet.).

       Jana states in her brief that the value of Country Air is nominal. The trial court

heard evidence that Country Air has a negative value. The trial court stated in its

In the Matter of the Marriage of Grisham                                           Page 4
findings of fact that it based the values entirely upon exhibits entered into evidence and

testimony at trial. We find no reversible error concerning the value of Country Air.

       The trial court’s findings of fact reflect, and the record supports, that Spring Air

owned both subsidiaries and real property. The trial court’s findings of fact state:

       The court has before it, for division of the community estate, Red Rider
       Rentals, North 40 Ltd., Greenwood Ltd., real property held by Spring Air,
       a cattle business, sums of money held by Mrs. Grisham and her retirement
       funds and possibly an interest in some insurance policies held by Mrs.
       Grisham. In addition, there are certain liabilities to be divided.

The trial court’s findings then detail the value of the community estate. Included in

those findings is the value of the real property owned by Spring Air.

       Property #29369 is a piece of property located at the corner of Hwy. 30 and
       I45. Prior to marriage, Mr. Grisham owned an undivided ½ interest in this
       parcel. In August of 2007, five years after separation, Spring Air Realty
       purchased the other ½ interest and in December of 2008, 6 years and 9
       months, after separation, a construction loan in the amount of $1.1 million
       was secured and renewed for $1.4 million (figures rounded off). The court
       believes this wipes out any possible value for years to come. Should this
       finding be in error, the court further finds that it would be unjust and
       unfair to award Mrs. Grisham any interest in this property because of the
       length of separation versus the length of time the parties were together
       and living as husband and wife. (parties separated 7 ½ years and together
       as husband and wife 6 years) and further her fault in the break up of this
       marriage. (Emphasis in original)

Spring Air Realty is part of Spring Air. Sidney testified that Spring Air Realty was

formed to develop the property on the corner of Highway 30 and Interstate 45. Sidney

formed Spring Air Realty specifically to buy the other half interest in the property.

       The entire property owned by Spring Air Realty was valued by the appraisal

district at $351,090. Sidney testified that the debt against the property is $1.4 million.

The trial court’s findings of fact and judgment referenced the value of Spring Air Realty,

and the trial court did not abuse its discretion in its findings on the value.

In the Matter of the Marriage of Grisham                                                Page 5
       Jana also challenges the trial court’s finding that Red Rider Rentals has no equity.

The trial court found that Red Rider Rentals operated at a loss for four years. Sidney

testified that the “book value” for Red Rider Rentals is negative $687,481. Jana’s expert

testified that the Red Rider Rentals has a value of $600,000. The expert later testified

that using an income approach, it would have a value of $300,000. The trial court

considered all the exhibits and testimony concerning the value of Red Rider Rental.

There is sufficient evidence to support the trial court’s finding that Red Rider Rentals

has no equity.

       The trial court’s findings state that:

       The court has looked to each separate subsidiary to determine its value
       and to each individual parcel of land, with the liabilities thereon, and
       those community accounts as reported by and held by Mrs. Grisham. All
       values are based entirely upon exhibits entered into evidence or from
       testimony heard during the trial of this cause.

The trial court had sufficient evidence upon which to exercise its discretion in

determining the value of the community estate and did not err in the application of its

discretion.

                 DISPROPORTIONATE DIVISION OF THE COMMUNITY ESTATE

       The Family Code requires trial courts to divide the estate of the parties in a

manner that is just and right having due regard for the rights of each party. TEX. FAM.

CODE ANN. § 7.001 (Vernon 2006). The trial court has wide discretion in dividing the

property of spouses upon divorce. Jacobs v. Jacobs, 687 S.W.2d 731, 733 (Tex. 1985). A

disproportionate division must have a reasonable basis. Smith v. Smith, 143 S.W.3d 206,

214 (Tex. App.—Waco 2004, no pet.).

In the Matter of the Marriage of Grisham                                             Page 6
       Jana claims that she was awarded a 4.6% interest in the community estate. Jana

states that this figure is based upon the values as determined by the trial court. The

trial court’s findings state that Jana’s half interest in the community estate is

$300,621.76. The trial court awarded Jana $80,979.71 after deducting Jana’s share of the

community liabilities. Having already determined that the trial court did not abuse its

discretion in determining the value of the individual assets in the community estate, we

do not find that the trial court’s division of the property was not just and right. Because

we do not find that the trial court’s division of property was not just and right, we need

not separately address Jana’s argument that the trial court incorrectly considered fault

in making a disproportionate award. Having considered all of Jana’s arguments, we

overrule her sole issue on appeal.

                                           CONCLUSION

       We affirm the trial court’s judgment.

                                             TOM GRAY
                                             Chief Justice

Before Chief Justice Gray,
       Justice Reyna, and
       Justice Davis
Affirmed
Opinion delivered and filed October 20, 2010
[CV06]

In the Matter of the Marriage of Grisham                                             Page 7