Court Opinion

ID: 9953940
Source: CourtListenerOpinion
Date Created: 2024-03-24 15:09:31.337977+00
Date Added: 2024-06-11T08:12:56.944957
License: Public Domain

Supreme Court of Texas
                           ══════════
                            No. 22-0565
                           ══════════

                      Theodore Stanley Landry,
                              Petitioner,

                                   v.

                       Janelle Nicole Landry,
                              Respondent

   ═══════════════════════════════════════
              On Petition for Review from the
       Court of Appeals for the Fifth District of Texas
   ═══════════════════════════════════════

                            PER CURIAM

      This petition concerns the characterization of certain investment
accounts in a divorce proceeding. The trial court determined that the
accounts are Husband’s separate property, but the court of appeals
reversed, holding that Husband presented legally insufficient evidence
of their separate character due to missing account statements that
created gaps in the record. On review, we have determined that the
“missing” account statements are, in fact, in the record. Accordingly, we
reverse the court of appeals’ judgment in part and remand to that court
to perform a new sufficiency analysis.
       Husband and Wife were married in 2003, and Wife filed for
divorce in 2017. As relevant here, Husband presented evidence at trial
that two Charles Schwab investment accounts in his name preexisted
the marriage. Husband’s expert witness testified that he traced the
accounts and that, “except for reinvestments,” the accounts were not
commingled with community assets. 1 The expert also testified that
there was a four-month gap in the statements he reviewed—from July
to October 2018—but that the missing statements did not affect his
analysis in light of an established pattern of activity over the course of
fifteen years. 2 As noted, the trial court ultimately determined that the
accounts were Husband’s separate property; thus, they were not part of
the community estate subject to a just and right division.
       Wife raised several issues on appeal, almost all of which the court
of appeals resolved in Husband’s favor.            ___ S.W.3d ___, 2022 WL
1164658 (Tex. App.—Dallas 2022). 3 However, the court of appeals held

       1 The “reinvestments” alluded to by Husband’s expert were described in

order to distinguish the assets in the accounts that “were mutations of
investments that existed at the date of marriage.” The expert confirmed that
the assets in the account at the time of his analysis were traceable and
predated the marriage, supporting his characterization of them as separate
property.
       2 Wife has asserted at times that the expert missed seventeen months

of statements, but the expert’s report references only the four-month period
from July 2018 to October 2018.
       3 The court of appeals held: (1) the trial court did not abuse its discretion

in excluding the testimony and report of Wife’s expert witness; (2) the evidence
was legally and factually sufficient to support the trial court’s characterization
of gifts of stock from Husband’s father as his separate property; (3) the
evidence was legally and factually sufficient to support the trial court’s
characterization of various loans and tax liens as community debt; and (4) the

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that “Husband failed to adequately trace the separate-property
character of the [Schwab] accounts” because of “missing account
statements” creating “gaps” in the record. Id. at *7. In light of those
“gaps,” the court of appeals held that Husband presented “no evidence
of what happened with the accounts” during the period without
statements. Id. Husband’s expert, the court continued, could not paper
over the gaps merely by showing an “established pattern” of account
activity. Id. For this reason, the court of appeals determined that the
district court’s ultimate community-property division could not have
been just and right because it was predicated on a mischaracterization
of the Schwab accounts as separate property. Id. at *9. It therefore
reversed the portion of the trial court’s judgment that divided the
community estate and remanded the case for a new division, with the
estate now including the accounts. Id. at *10. Husband filed a motion
for rehearing, which the court of appeals denied.
      In this Court, Husband contends that the court of appeals
overlooked evidence in the record, the absence of which was the basis for
the court’s holding that he failed to overcome the community-property
presumption with respect to the two investment accounts. 4 There were
no “gaps” or “missing statements,” Husband insists, because even
though his expert failed to see four months of statements, they were in

trial court did not abuse its discretion in awarding the marital residence to
Husband. 2022 WL 1164658, at *2-9. Wife does not challenge any of those
holdings in this Court.
      4 Husband also argues that Wife waived the missing-statements issue

in the court of appeals by failing to adequately brief it. We assume without
deciding that Wife preserved the issue.

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the record before the trial court and the court of appeals. Our own
independent review of the record confirms that none of the statements
pertaining to either of the two investment accounts at issue are, in fact,
missing; all were submitted into evidence at trial and are part of the
appellate record.
      Notably, Wife does not dispute that all relevant statements are in
the record.   Instead, she argues that the court of appeals’ analysis
turned not on whether the statements were in the record, but whether
they were reviewed by the expert. We disagree. The court of appeals
concluded that the expert’s testimony was insufficient because, without
the missing statements, no evidence supported the expert’s conclusion
that the parties “followed the ‘established pattern’ [during those four
months] of removing income earned by the account without withdrawing
any of the separate property funds.” Id. at *7. The court further noted
that “Husband could have filled in the gaps created by the missing
account statements by testifying about what happened with the
accounts during that period.” Id. The court of appeals clearly took issue
with what it perceived to be the absence of the statements. And, as
discussed, the purportedly missing statements were in the record,
undermining the premise on which the court’s legal sufficiency analysis
was based.
      Under these circumstances, we deem it best to remand the case
to the court of appeals to address any challenge to the characterization
of the two investment accounts with the relevant statements under

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consideration. 5 Without hearing oral argument, we grant Husband’s
petition for review, reverse the court of appeals’ judgment in part, and
remand the case to that court for further proceedings consistent with
this opinion. See TEX. R. APP. P. 59.1.

OPINION DELIVERED: March 22, 2024

       5 Husband alternatively argues that the evidence was sufficient to
support the trial court’s characterization even without the four disputed
statements. We decline to address this alternative argument before the court
of appeals has conducted a legal sufficiency analysis with the record evidence
at hand.

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