Court Opinion

ID: 4191340
Source: CourtListenerOpinion
Date Created: 2017-08-01 09:20:48.525729+00
Date Added: 2024-06-11T14:56:18.416951
License: Public Domain

NO. 12-15-00300-CV

                         IN THE COURT OF APPEALS

              TWELFTH COURT OF APPEALS DISTRICT

                                    TYLER, TEXAS

IN THE MATTER OF THE                            §      APPEAL FROM THE 87TH
MARRIAGE OF STEPHANIE GWINN
ARMSTRONG AND RONALD DEAN                       §      DISTRICT COURT
ARMSTRONG
                                                §      ANDERSON COUNTY, TEXAS

                             MEMORANDUM OPINION
       Ronald Dean Armstrong appeals the trial court’s final decree of divorce. On appeal, he
presents one issue. We modify the final decree of divorce and, as modified, affirm.

                                         BACKGROUND
       Ronald Dean Armstrong and Stephanie Gwinn Armstrong were married on August 21,
1993. On March 26, 2015, Stephanie filed a first amended petition for divorce, and Ronald filed
a counterpetition for divorce. Both parties alleged that the other spouse was guilty of cruel
treatment and committed adultery, and both parties requested that they be awarded a
disproportionate share of the parties’ community estate.
       Following a bench trial, the trial court granted the divorce. The trial court awarded
Ronald, as his sole and separate property, the business known as Warehouse Hardware
Enterprises, LLC, including but not limited to all inventory, cash, receivables, accounts, goods,
and supplies. Further, the trial court awarded to Stephanie, as her sole and separate property,
“[t]he Warehouse real estate and the Watkins interest contiguous thereto,” which properties were
described in an exhibit to the divorce decree. This appeal followed.
                                    STANDARD OF REVIEW
       In a decree of divorce, a court shall order a division of the estate of the parties in a
manner that the court deems just and right, having due regard for the rights of each party. TEX.
FAM. CODE ANN. § 7.001 (West 2006). We review a trial court’s division of property under an
abuse of discretion standard. Moroch v. Collins, 174 S.W.3d 849, 857 (Tex. App.—Dallas
2005, pet. denied); see also Garza v. Garza, 217 S.W.3d 538, 548 (Tex. App.—San Antonio
2006, no pet.). A trial court does not abuse its discretion if there is some evidence of a
substantive and probative character to support the decision. Garza, 217 S.W.3d at 549; Moroch,
174 S.W.3d at 857. Moreover, we should reverse a court’s division of property only if the error
materially affects the court’s just and right division of the property. Henry v. Henry, 48 S.W.3d
468, 475 (Tex. App.—Houston [14th Dist.] 2001, no pet.). However, once reversible error
affecting the “just and right” division of the community estate is found, an appellate court must
remand the entire community estate for a new division. Sheshtawy v. Sheshtawy, 150 S.W.3d
772, 780 (Tex. App.—San Antonio 2004, pet. denied) (quoting Jacobs v. Jacobs, 687 S.W.2d
731, 733 (Tex. 1985)).

                                     PROPERTY DIVISION
       In his sole issue, Ronald argues that the trial court abused its discretion by awarding the
Warehouse real estate (“Warehouse Property”) to Stephanie because it was not within the trial
court’s authority. More specifically, he contends that the “Warehouse Property” was deeded to
the limited liability company that was awarded to him in the divorce decree. In the alternative,
Ronald argues that the “Warehouse Property” was held in a partnership between him and his
mother-in-law, Dotie Adams, and was not part of the marital estate.
Applicable Law
       Property possessed by either spouse during or on dissolution of marriage is presumed to
be community property. TEX. FAM. CODE ANN. § 3.003(a) (West 2006). Any doubt as to the
character of property should be resolved in favor of the community estate. Sink v. Sink, 364
S.W.3d 340, 345 (Tex. App.—Dallas 2012, no pet.). The burden of proof necessary to establish
that property is separate property is clear and convincing evidence. Id. § 3.003(b). Clear and
convincing evidence means “the measure or degree of proof that will produce in the mind of the

                                                2
trier of fact a firm belief or conviction as to the truth of the allegations sought to be established.”
Id. § 101.007 (West 2014).
        A “tenancy in common” is a tenancy by two or more persons, in equal or unequal
undivided shares, each person having an equal right to possess the whole property but no right of
survivorship. See BLACK’S LAW DICTIONARY 1695 (10th ed. 2014). The question of whether a
partnership exists is primarily a question of fact. Ben Fitzgerald Realty Co. v. Muller, 846
S.W.2d 110, 120 (Tex. App.—Tyler 1993, writ denied). A “partnership” is an association of two
or more persons to carry on a business for profit as owners. See TEX. BUS. ORGS. CODE ANN.
§ 152.051 (b) (West 2012). Co-ownership of property, regardless of whether the co-ownership is
a joint tenancy, tenancy in common, tenancy by the entity, joint property, community property,
or part ownership, by itself, does not indicate that a person is a partner in the business. See id.
§ 152.052 (b)(2)(A) (West 2012).           In determining whether a partnership was created, we
consider several factors, including (1) the parties’ receipt or right to receive a share of profits of
the business; (2) any expression of an intent to be partners in the business; (3) participation or
right to participate in control of the business; (4) any agreement to share or sharing losses of the
business or liability for claims by third parties against the business; and (5) any agreement to
contribute or contributing money or property to the business. See id. § 152.052(a). We review
these factors under the totality of the circumstances. See Ingram v. Deere, 288 S.W.3d 886, 898
(Tex. 2009).
Analysis
        Here, the evidence showed that Ronald and Dotie, Stephanie’s mother, bought the real
property known as the “Warehouse Property” on September 27, 2010, and that both of their
names were listed on the general warranty deed. Dotie paid the entire purchase price of $30,000,
as evidenced by a check admitted into evidence.1 Stephanie and Ronald both stated that they
owned a one-half interest in the “Warehouse Property,” according to each of their inventories
and appraisements. From this evidence, the “Warehouse Property” was part of the marital estate,
and each spouse owned a one-half interest in the real property.

        1
          Ronald and Stephanie operated a hardware store on the “Warehouse Property,” along with a lawn mower
repair shop on an adjacent piece of property that they owned.

                                                     3
        However, Ronald argues in his brief that he deeded the “Warehouse Property” to
Warehouse Enterprises.2 At trial, Ronald testified that he formed Warehouse Enterprises about
two years before trial in order to protect his personal belongings. He stated that the lawn mower
repair business, the hardware store, and a lake property were listed as assets of Warehouse
Enterprises. Ronald testified that he deeded the hardware store, not the “Warehouse Property,”
to Warehouse Enterprises. Moreover, there is no trial exhibit or evidence showing the assets of
Warehouse Enterprises or any paperwork showing its formation. Thus, there is no evidence that
Ronald deeded the “Warehouse Property” to Warehouse Enterprises.
        Nonetheless, Ronald argues that it is “undisputed” that the “Warehouse Property” was
held in a partnership between himself and Dotie. Stephanie contends that Ronald and Dotie,
instead, owned the “Warehouse Property” as tenants in common. As noted above, we must
consider several factors to determine if Ronald and Dotie owned the “Warehouse Property” as a
partnership, including (1) the parties’ receipt or right to receive a share of profits of the business;
(2) any expression of an intent to be partners in the business; (3) participation or right to
participate in control of the business; (4) any agreement to share or sharing losses of the business
or liability for claims by third parties against the business; and (5) any agreement to contribute or
contributing money or property to the business. See TEX. BUS. ORGS. CODE ANN. § 152.052(a).
We conclude that Ronald and Dotie met none of these factors to establish a partnership.
        Regarding the parties’ receipt or right to receive a share of the profits of the business,
there was no testimony that Dotie received any profits or a share of the business. Moreover,
neither Ronald nor Dotie expressed an intent to be partners in the business. Ronald characterized
the “Warehouse Property” and the hardware store as his “personal” assets. Dotie stated that she
believed that she was going to help run the hardware store after she retired. She did not know
what “dba The Warehouse” meant when it followed her name and Ronald’s name in the general
warranty deed and on the settlement statement. At trial, Dotie “realized” that she and Ronald
were “partners” according to the general warranty deed. From this evidence, it is clear that
Ronald and Dotie did not intend to form a partnership.
        Regarding participating or a right to participate in control of the business, Dotie stated
that how Ronald spent money on the store was “none of [her] business.” Further, Ronald and

        2
            Ronald’s company is referred to in the record as “Warehouse Hardware Enterprises, LLC” and
“Warehouse Enterprises, L.L.C.” Ronald provided no documentation regarding the company’s correct name. We
will refer to the company as “Warehouse Enterprises.”

                                                   4
Dotie did not have any agreement to share losses of the business or to contribute money to the
business. Dotie testified that she did not owe half of the judgments against the hardware store.
Even though Dotie loaned the hardware store $15,000 for inventory, Ronald stated that he never
promised to pay Dotie back for the loan because she was an “investor” in the hardware business.
Thus, there is no evidence that Ronald or Dotie were partners in the “Warehouse Property.”
         Accordingly, the evidence supports a finding that the marital estate owns a one-half
interest in the “Warehouse Property.” We overrule Ronald’s sole issue.
         However, the divorce decree awarded Stephanie, as her sole and separate property, “The
Warehouse real estate and the Watkins interest contiguous thereto.” The trial court did not
specify that Stephanie was awarded the marital estate’s one-half interest in the real property. We
reverse a court’s division of property only if the error materially affects the court’s just and right
division of the property. See Henry, 48 S.W.3d at 475. Here, the trial court’s error does not
materially affect a just and right division of the property. Further, we have the authority to
modify incorrect judgments when the necessary information is available for us to do so. See
TEX. R. APP. P. 43.2(b) (authorizing an appellate court to modify a trial court’s judgment and
affirm it as modified); Mullins v. Mullins, 202 S.W.3d 869, 878 (Tex. App.—Dallas 2006, pet.
denied). We therefore modify paragraph W-1 of the divorce decree to delete the language “The
Warehouse real estate” and replace it with “The marital estate’s one-half interest in the
Warehouse real estate.”

                                                   DISPOSITION
         Having overruled Ronald’s sole issue, we modify the final decree of divorce by deleting
the language “The Warehouse real estate” in paragraph W-1 and replacing it with “The marital
estate’s one-half interest in the Warehouse real estate.” As modified, we affirm the trial court’s
judgment.

                                                                  GREG NEELEY
                                                                     Justice

Opinion delivered July 31, 2017.
Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.

                                                   (PUBLISH)

                                                          5
                                  COURT OF APPEALS

     TWELFTH COURT OF APPEALS DISTRICT OF TEXAS

                                          JUDGMENT

                                            JULY 31, 2017

                                        NO. 12-15-00300-CV

                 IN THE MATTER OF THE MARRIAGE OF
      STEPHANIE GWINN ARMSTRONG AND RONALD DEAN ARMSTRONG

                                Appeal from the 87th District Court
                        of Anderson County, Texas (Tr.Ct.No. 87-12218)

                      THIS CAUSE came on to be heard on the appellate record and the briefs
filed herein; and the same being inspected, it is the opinion of the Court that the trial court’s
judgment below should be modified and, as modified, affirmed.
                      It is therefore ORDERED, ADJUDGED and DECREED that the trial
court’s judgment below be modified by deleting the language “The Warehouse real estate” in
paragraph W-1 and replacing it with “The marital estate’s one-half interest in the Warehouse real
estate;” and as modified, the trial court’s judgment is affirmed; appellate costs are assessed
against the party incurring same; and that this decision be certified to the trial court below for
observance.
                   Greg Neeley, Justice.
                   Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.