Court Opinion

ID: 9758554
Source: CourtListenerOpinion
Date Created: 2023-08-28 23:36:03.893858+00
Date Added: 2024-06-11T07:28:52.885053
License: Public Domain

SARAH B. DUNCAN, Justice,
concurring.
The majority holds that the business reorganization by which Liberty Financial Corporation acquired the Berlee Lumber Company stock resulted in a legally cognizable distribution to James and thus can form the predicate for Kymberly’s reimbursement claim. I disagree. The majority’s holding promotes form over substance. Even if the form of the transfer could be interpreted as a distribution to James, it is only because that form was dictated by tax considerations. In substance, there was no distribution of the stock to James. The majority’s holding thus “tend[s] to engraft upon our community property system the manifest complexities of federal tax law.” Thomas v. Thomas, 738 S.W.2d 342, 345 (Tex.App.-Houston [1st Dist.] 1987, writ denied). And it wrongly injects into the entrepreneur’s choice of a business organization form — usually guided by federal tax consequences and personal liability con*30cerns1 — the irrelevant consideration of property characterization under Texas law. Because I would instruct the trial court that it could not consider the transfer of the Berlee stock as a basis for Kymberly’s reimbursement claim, I concur in the judgment only.

. See generally 19 Robert W. Hamilton, Texas Practice-. Business Organizations §§ 31-38 (1973 & Supp.2002).