Court Opinion

ID: 4056130
Source: CourtListenerOpinion
Date Created: 2016-09-29 07:40:04.986947+00
Date Added: 2024-06-11T13:50:31.903415
License: Public Domain

Affirmed in Part, Reversed and Remanded in Part, and Opinion filed August
27, 2015.

                                        In The

                     Fourteenth Court of Appeals

                                NO. 14-13-00094-CV

                          JAMES STEARNS, Appellant
                                          V.

   LISA MARTENS AND STEARNS POOLS AND SPAS, INC., Appellees

                    On Appeal from the 268th District Court
                            Fort Bend County, Texas
                     Trial Court Cause No. 09-DCV-169484

                                 OPINION
      This is an appeal from a divorce decree following a jury trial on one issue
and a bench trial on other issues. The issue at the jury trial was whether the stock
of a corporation was community property or the separate property of either spouse.
After the wife rested her case-in-chief and before the husband offered evidence in
his case-in-chief, the trial court granted a directed verdict that forty-nine percent of
the shares were the wife’s separate property. The trial court based its decree on the
jury’s verdict that the remaining shares were community property. The trial court
later conducted a bench trial on various other issues and rendered a final divorce
decree, which incorporated sanctions against the husband based on his failure to
appear personally at a court-ordered mediation.

      On appeal, we conclude the trial court reversibly erred in the following
ways: (1) granting the directed verdict, (2) excluding expert valuation testimony
offered by the husband during the bench trial, and (3) sanctioning the husband for
failing to appear at mediation. Although we affirm the trial court’s grant of
divorce and dissolution of the marriage, we reverse the remainder of the divorce
decree and remand for further proceedings.

                I.    FACTUAL AND PROCEDURAL BACKGROUND

      Appellee/petitioner Lisa Martens filed a divorce petition against
appellant/respondent James Stearns (“Jim”).       Jim asserted a counter-petition
against Lisa, and Lisa made appellee Stearns Pools & Spas, Inc. (“Stearns Pools”)
a party to the suit. Before marriage to Lisa, Jim started a pool business as a
proprietorship. In 1998, approximately seven years after their marriage began, the
pool business was transferred to Stearns Pools. One million shares of Stearns
Pools were issued, 490,000 in Jim’s name and 510,000 in Lisa’s name.

      Jim served in the United States Army Reserve. In 2004, Jim deployed to
Iraq. Four years later, Jim deployed to Afghanistan. Before deploying, Jim and
Lisa executed a Stock Transfer Agreement effective as of January 1, 2008 (the
“Agreement”). The Agreement provides, among other things, that “[Jim] hereby
sells all of [Jim’s] Stock of [Stearns Pools] to [Lisa] and [Lisa] hereby purchases
such Stock from [Jim] in exchange for the payment of Ten and no/100 Dollars and
other good and valuable consideration, the receipt and sufficiency of which is

                                        2
hereby acknowledged.” The Agreement does not contain any statement that any
part of its consideration was Jim’s separate property, nor does the Agreement
contain     the terms “gift,” “partition,” “separate property,” “separate use,” or
“separate estate.” After the transaction, Stearns Pools’s corporate records reflected
that Lisa owned all of the outstanding shares of common stock.1

       In February 2009, Jim returned from deployment in Afghanistan. Shortly
thereafter, Lisa presented Jim with her divorce petition. A major issue in the
divorce proceeding was the marital-property characterization of the Stearns Pools
common stock. Lisa maintained that all of the stock was her separate property.
Jim disputed that characterization and, at times, asserted that all of the stock was
community property. As petitioner, Lisa presented her case to the jury first. After
Lisa rested in her case-in-chief, but before Jim had an opportunity to present
evidence in his case-in-chief, Lisa moved for a directed verdict. Lisa asserted that
she had proved as a matter of law that the 490,000 shares in Stearns Pools were her
separate property under three theories:

       (1) By means of the Agreement, Jim made a gift of these shares to
       Lisa;
       (2) The Agreement is a valid and enforceable partition or exchange
       agreement under Family Code section 4.102; and
       (3) The Agreement is a valid means of making the shares the separate
       property of Lisa by a sale of the shares from Jim to Lisa.
Lisa also argued that under the Agreement all one million shares of Stearns Pools
were made her separate property.

       The trial court granted Lisa’s motion for directed verdict as to the 490,000
shares in Stearns Pools but did not grant the motion as to the remaining shares.
1
  Lisa later transferred thirty percent of the common stock of Stearns Pools to her sister, but Lisa
later revoked this transfer, and we need not address it.

                                                 3
The trial court overruled Jim’s objection to the granting of a directed verdict at the
close of Lisa’s case-in-chief, before Jim’s case-in-chief. In response to the only
issue submitted to it, the jury found that the remaining 510,000 shares of Stearns
Pools were community property. The parties then tried various other issues to the
court, including the value of Stearns Pools.

       The trial court appointed Jay Dale as an appraiser to value Stearns Pools.
Dale valued the company at $544,699. Jim thought that Stearns Pools was worth
significantly more than this appraised value, and he retained George Abraham as
an expert witness. Abraham valued Stearns Pools at approximately $1.6 million in
his expert report. When Jim called Abraham as a witness during the bench trial,
the trial court sustained Lisa’s objection that it would be inappropriate to allow
Abraham to testify because Dale was a “joint expert,” appointed by the court, to
whom Jim and Lisa had agreed. Lisa advocated for Dale’s valuation. In its fact
findings, the trial court valued Stearns Pools at $544,699, the value placed by Dale.
The trial court rendered a final divorce decree that incorporated sanctions the trial
court earlier had assessed against Jim for failing to appear personally at a court-
ordered mediation.

                              II.    ISSUES AND ANALYSIS

       In appealing the divorce decree, Jim asserts sixteen issues.2 The main trial-
court rulings he challenges on appeal are the granting of a directed verdict at the
close of Lisa’s case-in-chief, the exclusion of Jim’s expert’s testimony, the failure

2
  Lisa moved to dismiss this appeal because, according to Lisa, (1) Jim allegedly voluntarily
accepted the benefits of the divorce decree in various ways and therefore Jim is estopped from
challenging the decree on appeal; and (2) Jim is estopped from appealing the decree because he
has unclean hands based on various alleged acts and omissions. This court denies Lisa’s motion
by an order issued today.

                                              4
to give Jim credit for monies that Lisa allegedly should have paid to him under
temporary orders, the failure to give Jim credit for rents and revenues Lisa received
from community properties, and the imposition of monetary sanctions against Jim
for his failure to attend personally a court-ordered mediation.

      A. Did the trial court reversibly err in granting a directed verdict at the
         close of Lisa’s case-in-chief?
      Under his first seven issues, Jim asserts the trial court reversibly erred in
granting a directed verdict at the close of Lisa’s case-in-chief that 490,000 of the
Stearns Pools shares are Lisa’s separate property. According to basic principles of
trial procedure, a trial court should not render a directed verdict against a party
before that party has had a full opportunity to present the party’s case and has
rested. See Tana Oil & Gas Corp. v. McCall, 104 S.W.3d 80, 82 (Tex. 2003);
Nassar v. Hughes, 882 S.W.2d 36, 38 (Tex. App.—Houston [1st Dist.] 1994, writ
denied); Cecil Pond Constr. Co. v. Ed Bell Investments, Inc., 864 S.W.2d 211, 214
(Tex. App.—Tyler 1993, no writ). If a trial court renders a directed verdict against
a party before that party has rested its case-in-chief, the trial court’s directed
verdict is reversible error absent application of the exception recognized by the
Supreme Court of Texas. See Tana Oil & Gas Corp., 104 S.W.3d at 82; Schade v.
Rhodes, No. 01-03-00302-CV, 2004 WL 1355094, at *3, n.2 (Tex. App.—Houston
[1st Dist.] June 17, 2004, no pet.) (mem. op.); Wedgeworth v. Kirskey, 985 S.W.2d
115, 116 (Tex. App.—San Antonio 1998, pet. denied); Nassar, 882 S.W.2d at 38;
Cecil Pond Constr. Co., 864 S.W.2d at 214. In Tana Oil, the high court concluded
that granting a directed verdict before the plaintiffs rested was harmless error
because, even if the plaintiffs had proved the claims, the plaintiffs would not have
been able to recover since the plaintiffs affirmatively limited the claims to damages
they could not recover as a matter of law. See Tana Oil & Gas Corp., 104 S.W.3d
at 82. The Tana Oil court stressed that the basis for directed verdict had nothing to
                                          5
do with an assessment of the trial evidence. See id.

       In the case under review, the trial court granted a directed verdict in favor of
Lisa after she rested her case-in-chief and before Jim even had a chance to present
his case-in-chief. The trial court overruled Jim’s objection to the court’s grant of a
directed verdict at the close of Lisa’s case-in-chief, before Jim’s case-in-chief.3
Lisa asserted that she was entitled to a directed verdict because she had proved as a
matter of law that the 490,000 shares in Stearns Pools were her separate property.
Notably, all of the potential independent bases for affirming the trial court’s
directed verdict require a review or assessment of the trial evidence, and none of
these bases rely on Jim’s purported affirmative limitation of his claims to damages
he cannot recover as a matter of law. Today’s case does not fall within the Tana
Oil exception. See Tana Oil & Gas Corp., 104 S.W.3d at 82. Instead, it falls
within the general rule. Therefore, the trial court reversibly erred in granting a
directed verdict against Jim before he had an opportunity to present his case-in-
chief. See id.; Schade v. Rhodes, 2004 WL 1355094, at *3, n.2; Wedgeworth, 985
S.W.2d at 116; Nassar, 882 S.W.2d at 38; Cecil Pond Constr. Co., 864 S.W.2d at
214.

       On appeal, Lisa essentially argues that an instrument in which one spouse
transfers property (whether separate or community) to the other spouse creates an

3
   On appeal, Lisa argues that Jim waived any complaint regarding the trial court’s directed
verdict by failing to object to the directed verdict until after it had been granted. Generally, a
party against whom a directed verdict has been granted is not required to preserve error in the
trial court regarding a complaint that the trial court reversibly erred in granting the directed
verdict. See Field v. AIM Management Group, Inc., 845 S.W.2d 469, 473 (Tex. App.—Houston
[14th Dist.] 1993, no writ). But, even presuming for the sake of argument that Jim was required
to object in the trial court to the premature granting of a directed verdict against him, we
conclude that Jim’s objection was timely because Jim made it shortly after the trial court granted
the directed verdict, at a time when the trial court still was in a position to avoid the error by
withdrawing the directed verdict and reconsidering the directed-verdict issue after Jim had rested
his case-in-chief.

                                                6
irrebuttable presumption that the property became the transferee’s separate
property, even if the document does not contain any “separate property recitals” or
“significant recitals.”4 Lisa argues that any error by the trial court in granting a
directed verdict before Jim rested his case-in-chief is harmless because: (1) Jim did
not seek to set aside the Agreement based on fraud, accident, mistake, or duress;
and (2) the parol evidence rule precludes consideration of extrinsic evidence that
Lisa and Jim did not intend to change the marital-property characterization of the
transferred shares, even if the Agreement contains no separate-property recitals.
Even if this argument were meritorious, it is not based on Jim’s affirmative
limitation of his claims to damages he cannot recover as a matter of law, and this
argument does involve an assessment of the trial evidence.                         Therefore, this
argument does not show that the case falls within the Tana Oil exception. See
Tana Oil & Gas Corp., 104 S.W.3d at 82.

       In any event, we agree with the body of cases in which courts of appeals
hold that, if the instrument contains no separate-property recitals, then parol
evidence is admissible regarding the marital-property issue. See Reaves v. Reaves,
No. 11-11-00026-CV, 2012 WL 3799668, at *6–7 (Tex. App.—Eastland Aug. 31,
2012, no pet.) (mem. op.); Bahr v. Kohr, 980 S.W.2d 723, 726–27 (Tex. App.—
4
  According to Lisa, the only way that the transferor-spouse in such an instrument can avoid the
property becoming the separate property of the transferee-spouse is by proving that the transfer
was procured by fraud, accident, mistake, or duress. Because fraud, accident, mistake, and
duress are potential bases for setting aside the instrument, Lisa essentially asserts that, unless the
transferor spouse can set aside such an instrument, that document creates an irrebuttable
presumption that the effect of the transfer is to make the property the transferee’s separate
property, even if the document does not contain any “separate property recitals” or “significant
recitals.” A “separate property recital” or “significant recital” is a recital in an instrument that
the consideration comes from the separate property of a spouse or that the property is transferred
to a spouse as the transferee’s separate property or for the transferee’s separate use. See Roberts
v. Roberts, 999 S.W.3d 424, 432 (Tex. App.—El Paso 1999, no pet.).

                                                  7
San Antonio 1998, no pet.). But see Magness v. Magness, 241 S.W.3d 910, 912–13
(Tex. App.—Dallas 2007, pet. denied); Raymond v. Raymond, 190 S.W.3d 77, 80–
81 (Tex. App.—Houston [1st Dist.] 2005, no pet.).5                 Because the Agreement
contains no separate-property recitals, parol evidence is admissible regarding the
marital-property issue, and there is no irrebuttable presumption that the transferred
shares are Lisa’s separate property. See Reaves, 2012 WL 3799668, at *6–7; Bahr,
980 S.W.2d at 726–27. But see Magness, 241 S.W.3d at 912–13; Raymond, 190
S.W.3d at 80–81.

       We conclude that the trial court reversibly erred in granting a directed
verdict at the close of Lisa’s case-in-chief. The proper remedy is to reverse the
decree and remand for a new jury trial. See Thomas v. Olympus/Nelson Prop.
Mgmt., 148 S.W.3d 395, 401 (Tex. App.—Houston [14th Dist.] 2004, no pet.). As
to the scope of that remedy, we note that the marital-property characterization of
the other 510,000 shares of Stearns Pools stock was disputed at trial. Some of the
characterization arguments are the same or similar for all of the Stearns Pools
shares. Lisa argued that, under the Agreement, all one million shares of stock are
her separate property. On this record, we conclude that the trial court’s error
affects all of the matters in controversy at the jury trial and that the characterization
issue regarding the 490,000 shares is not separable from the characterization issue
regarding the 510,000 shares without unfairness to the parties. See Tex. R. App. P.
44.1(b); Downing v. Burns, 348 S.W.3d 415, 427–29 (Tex. App.—Houston [14th
Dist.] 2011, no pet.). Therefore, we sustain Jim’s first through seventh issues to
the extent that Jim argues the trial court reversibly erred in granting a directed

5
  The parties have not cited and research has not revealed any precedent from the Supreme Court
of Texas determining this issue. Lisa has cited a 1997 unpublished case from this court, Brothers
v. Brothers, No. 14-96-00364-CV, 1997 WL 7012 (Tex. App.—Houston [14th Dist.] Jan. 9,
1997, no writ) (not designated for publication). But, that case has no precedential value. See
Tex. App. P. 47.7 & 2008 cmt.

                                               8
verdict at the close of Lisa’s case-in-chief. We reverse the trial court’s decree and
remand for a new jury trial as to the characterization of all one million shares of
Stearns Pools stock.

      B. Did the trial court reversibly err in excluding expert testimony of
         George Abraham regarding the value of Stearns Pools?
      Under his ninth through thirteenth issues, Jim argues that the trial court
reversibly erred in refusing to allow Jim’s expert to testify at the bench trial
regarding his opinion of the value of Stearns Pools. Lisa objected and urged the
trial court not to allow Abraham to testify because Dale was a “joint expert”
appointed by the court. The trial court sustained Lisa’s objection, disallowed
Abraham’s testimony, and valued Stearns Pools at $544,699, in accordance with
Dale’s valuation.

      In temporary orders, the trial court ordered the parties’ trial counsel to
“select reasonable agreed upon appraisers for performing appraisals for the
business Stearns Pools & Spas, Inc. and the real properties of the parties within
fifteen (15) days.” After more than fifteen days had passed and Jim’s counsel had
not suggested any person to perform the appraisal of Stearns Pools, Lisa and
Stearns Pools moved the trial court for an order appointing Dale to perform the
appraisal. At an oral hearing, Jim’s counsel stated that he did not oppose the
appointment of an appraiser and wanted more time to investigate other individuals
who might be appointed to perform the appraisal. The trial court granted the
motion and gave all parties thirty more days to agree on an appraiser. On the same
day, the trial court signed a docket control order requiring the parties to contract
with an appraiser within thirty days. At no time during this hearing did the trial
court or any party state that this appraiser’s valuation would be final and binding
on all parties or that the parties would be precluded from calling experts other than
the appointed appraiser to offer evidence on the valuation issue. Nor did the
                                          9
parties’ subsequent conduct suggest any such understanding.

       Within the thirty-day period, the parties signed a letter agreement with Dale
for him to prepare an appraisal of the value of Stearns Pools. Though the letter
refers to Dale as a “neutral expert,” it does not state that Dale’s valuation of
Stearns Pools would be binding on all parties or that the parties would be
precluded from calling other experts to testify on the valuation issue. The parties
also signed an agreement under Texas Rule of Civil Procedure 11, in which they
agreed to a deadline for Dale to perform the appraisal. The trial court later signed
a docket control order containing this deadline for the completion of Dale’s
appraisal as well as setting a later deadline for the designation of testifying experts
and the exchange of these experts’ reports. Under this order, Jim timely designated
Abraham as a testifying expert and timely provided an expert report from
Abraham, which described Abraham’s appraisal valuing the company at
approximately $1.6 million.6

       Lisa designated Dale and two other individuals as experts to testify
regarding the appraisal of Stearns Pools.           Lisa asserts that she retained these
experts to support the valuation in Dale’s appraisal rather than to perform another
appraisal as Abraham did. Nonetheless, Lisa still retained and designated experts
other than Dale to testify regarding the company’s value. In a supplemental
designation, Lisa designated one of these other experts to testify regarding his
review of Abraham’s appraisal of the company. Even presuming that Dale was an
agreed expert retained by all parties at the instance of the trial court to perform an
appraisal of Stearns Pools, the parties did not agree and the trial court did not order

6
  Lisa asserts that Abraham’s testimony was improper because Abraham was required to conduct
his appraisal of Stearns Pools by the earlier deadline, but he failed to do so. Under the
unambiguous language of the docket control order and the Rule 11 agreement that gave rise to it,
the earlier deadline applied only to Dale’s appraisal.

                                              10
that Dale’s valuation would be final and binding on all parties or that the parties
would be precluded from calling any expert on the valuation issue other than the
appointed expert.

      Lisa asserts that the trial court did not err in excluding Abraham’s testimony
because Jim judicially admitted that the value of the company was the value to
which Dale testified. Lisa bases this argument on a document entitled “James
Stearns’ Proposed Final Division of Property,” which the trial court admitted into
evidence at the bench trial. This document lists various properties, and one of the
items on the list is “SPS Value (Dale),” for which the value is $544,700, the value
to which Dale testified. This statement was not made in a pleading, and we
conclude that it does not rise to the level of a judicial admission by Jim as to the
company’s value. See Regency Advantage Ltd. P’ship v. Bingo Idea–Watauga,
Inc., 936 S.W.2d 275, 278 (Tex. 1996); In re S.A.M., 321 S.W.3d 785, 790, n. 1
(Tex. App.—Houston [14th Dist.] 2010, no pet.). Jim filed an inventory and
appraisement in which he listed the value of the company as approximately $1.6
million.

      Lisa also points to testimony by Jim during cross-examination regarding
“James Stearns’ Proposed Final Division of Property.” When asked whether Jim
indicated that the value of Stearns Pools was $544,700, Jim said that he had
indicated that this sum was Lisa’s value. Jim likewise stated that the amount was
Lisa’s value. Jim then said “[i]f [Lisa] thinks it’s worth that, it’s worth that . . . . I
have a different opinion.” Jim also said “[i]f [Lisa] thinks that’s what it’s worth,
then that’s what it’s worth.” Shortly thereafter, Jim again stated that “[t]his was
Lisa’s value; it’s not my value.” Given the record, we could hardly conclude that
Jim clearly admitted that Dale’s valuation of the company was correct. Jim did not
testify that he agreed to be bound by Dale’s valuation or that he agreed that he

                                           11
would not call any other expert witness to opine on the company’s value.

      Lisa also argues that Jim failed to preserve error for appellate review
because he never made an offer of proof during trial as to what Abraham’s
testimony would have been. To preserve error on the ground that the trial court
improperly excluded the testimony of a witness, a party must inform the trial court
of the substance of the testimony by an offer of proof, unless the substance was
apparent from the context. See Tex. R. Evid. 103(a)(2); Gipson-Jelks v. Gipson, —
S.W.3d—,—, No. 14-13-00967-CV, 2015 WL 3424714, at *4 (Tex. App.—
Houston [14th Dist.] May 28, 2015, no. pet. h.). The trial court told Jim’s counsel
during trial that the court would not allow Jim to do a question-and-answer offer of
proof in open court, and the court suggested that Jim should submit a written bill of
exception. Jim later filed a written bill of exception. The written bill contained
appraisal reports by Abraham and also an affidavit by Abraham, but Lisa asserts
that this bill of exception did not comply with the requirements for formal bills of
exception. See Tex. R. App. P. 33.2.

      In any event, at the time the trial court excluded Abraham’s testimony,
Abraham’s expert report had been filed with the trial court.          During Lisa’s
objection to Abraham’s testimony, she stated that Abraham would be testifying as
to what he thinks Stearns Pools is worth. In response to Lisa’s objection, Jim’s
counsel stated that Jim wanted Abraham to be allowed to testify regarding
Abraham’s appraisal of Stearns Pools. Given the context, we conclude that Jim
either sufficiently informed the trial court of the substance of Abraham’s testimony
or the substance of this testimony was apparent from the context. See Tex. R.
Evid. 103(a)(2).

      On this record, we conclude that the trial court abused its discretion by
preventing Abraham from testifying regarding his appraisal of the company’s

                                         12
value. See Reid Road Mun. Util. Dist. No. 2 v. Speedy Stop Food Stores, Ltd., 337
S.W.3d 846, 855–58 (Tex. 2011) (holding trial court erred in excluding an
appraiser’s testimony from the summary-judgment evidence). For the trial court’s
exclusion of Abraham’s testimony to constitute reversible error, Jim must show
that the error probably caused the rendition of an improper judgment. See State v.
Cent. Expressway Sign Assocs., 302 S.W.3d 866, 870 (Tex. 2009). The Supreme
Court of Texas has recognized the impossibility of prescribing a specific test to
determine whether a particular error is harmful. Id. The high court entrusts that
determination to the sound discretion of the reviewing court. Id. In making this
determination, we must review the entire record. Id. Jim need not prove that “but
for” the exclusion of evidence, a different judgment necessarily would have
resulted. See id. Rather, he must show only that excluding the evidence probably
caused the rendition of an improper judgment. See id. The role that the excluded
evidence plays in the context of the trial is also important. Id. Thus, the exclusion
is likely harmless if the evidence was cumulative, or the rest of the evidence was
so one-sided that the error likely made no difference in the judgment. Id. But, if
erroneously excluded evidence was crucial to a key issue, the error is likely
harmful. Id.

      Lisa argues that any error was harmless because the trial court admitted
Jim’s inventory and appraisement into evidence and in that document Jim asserts
that the value of the company is approximately $1.6 million. But, Jim is not an
expert, and this document is merely a statement of Jim’s position on this issue.
Because the trial court disallowed Jim’s expert, there was no expert testimony
regarding any value of the company other than Dale’s testimony regarding his
valuation.

      The value of Stearns Pools was a key issue in the bench trial, and the trial

                                         13
court adopted Dale’s valuation, which was more than a million dollars less than
Abraham’s valuation. Under the applicable standard of review, we conclude that
Jim has shown that the trial court committed error in excluding Abraham’s
testimony and that this error probably caused the rendition of an improper
judgment. See id. at 870–74. We further conclude that this error affects part, but
not all, of the matters in controversy at the bench trial, and that the determination
of the value of Stearns Pools is separable from the other factual issues tried during
the bench trial without unfairness to the parties. See Tex. R. App. P. 44.1(b).
Therefore, we sustain Jim’s ninth through thirteenth issues to the extent that Jim
argues the trial court reversibly erred in excluding Abraham’s testimony. We
reverse the trial court’s decree and remand for a new bench trial as to the value of
Stearns Pools.

      C. Did the trial court reversibly err in failing to render judgment in
         Jim’s favor based on Lisa’s failure to pay amounts ordered under
         temporary orders and share of rents from community properties?
      In his fourteenth issue, Jim asserts that the trial court reversibly erred in
failing to give Jim a money judgment or other credit for monies Lisa should have
paid to him from Stearns Pools based on the trial court’s temporary orders. Under
these orders, the trial court ordered that Lisa, as President of Stearns Pools, was
“specifically authorized to pay” Jim temporary support in the amount of $2,800 per
month until further order of the court. Likewise, the trial court ruled that Lisa, as
President of Stearns Pools, was “specifically authorized to pay” Lisa temporary
support in the amount of $2,800 per month until further order of the court. In part
of her testimony at the bench trial, Lisa stated that the trial court ordered her to pay
Jim $2,800 per month. She testified that she and Jim discussed with counsel
altering the amount of money Stearns Pools was paying to Jim, and that when she
and Jim decided not to “comply with the 700 a week,” they were not ignoring the

                                          14
trial court. Later in her testimony, Lisa read the language of the temporary orders
and stated that she was authorized to pay Jim and that she paid Jim without being
ordered to do so.

      Jim did not assert any claim in his pleadings against either Stearns Pools or
Lisa seeking to recover amounts that allegedly were ordered to be paid to Jim
under the temporary orders but were not paid. Jim has not shown that the trial
court abused its discretion by failing to give Jim a money judgment or other credit
for monies Lisa should have paid to him from Stearns Pools based on the trial
court’s temporary orders or in allegedly not considering the failure to make these
payments in rendering the divorce decree. See Smith v. Grayson, No. 03-10-
00238-CV, 2011 WL 4924073, at *8 (Tex. App.—Austin Oct. 12, 2011, pet.
dism’d) (mem. op.). Accordingly, we overrule Jim’s fourteenth issue.

      In his fifteenth issue, Jim asserts that the trial court reversibly erred in failing
to give Jim a money judgment or other credit for rents and revenues Lisa received
from community rental properties. Jim argues that the trial court erred in denying
his reimbursement claim based on these rents and revenues and in failing to
consider these rents and revenues in the just and right division of the community
property. Jim did not assert any claim in his pleadings against Lisa seeking a
judgment or a credit for rents and revenues Lisa received from community rental
properties. Nor does Jim cite any evidence from trial showing what happened to
these rents and revenues after they were received. In the division of community
property, Jim received some accounts and Lisa received other accounts. Jim points
to no testimony showing whether these rents or proceeds were in any accounts Jim
received or in any accounts Lisa received. Jim has not shown that the trial court
abused its discretion by failing to give Jim a money judgment or other credit for
rents and revenues Lisa received for community rental properties or in allegedly

                                           15
failing to consider these rents and revenues in the just and right division of the
community property. See Grayson, 2011 WL 4924073, at *8. Therefore, we
overrule Jim’s fifteenth issue.

         D. Did the trial court abuse its discretion in sanctioning Jim for failing
            to appear personally at a mediation?
         In Jim’s sixteenth issue he asserts that the trial court abused its discretion by
sanctioning him $4,800 based on his failure to appear personally at a court-ordered
mediation. Jim argues that the trial court abused its discretion in assessing these
sanctions because (1) Jim moved for a stay of the proceedings under the
Servicemembers Civil Relief Act7; (2) when the mediation occurred Jim was on
active duty in the United States Army, and Jim’s military service precluded him
from attending the mediation; and (3) the evidence is legally and factually
insufficient to support a sanction amount greater than $2,400.8 We note that in an
agreement filed with the trial court under Texas Rule of Civil Procedure 11, Jim
agreed that he would not seek a stay of this case under the Servicemembers Civil
Relief Act. Though Jim does not expressly assert that the trial court erred in
denying his motion for a stay of the proceedings under the Act, we presume, for
the sake of argument, that Jim has assigned error on this point and has presented
sufficient argument in support of the proposition that the trial court erred in
granting Jim’s motion for a stay.

         After the trial court ordered the parties to mediation, but before a date was
set, Lisa filed a motion seeking a court order that Jim appear personally at the
mediation.        In that motion, Lisa asserted that Jim wanted to participate by

7
    See 50 App. U.S.C. § 501, et seq.
8
 Jim has not asserted that the evidence is legally or factually insufficient to support a sanctions
amount of $2,400 or less, nor has Jim presented any argument in support of such an assertion.

                                                16
telephone in the mediation and in his deposition, rather than appearing personally.
Lisa stated that every time an event in the case requires Jim’s direct participation,
Jim claims he cannot participate because he is serving in the military and that Jim
does so to avoid his responsibilities as a litigant in the case. The trial court granted
Lisa’s motion and ordered Jim to appear personally at a mediation in Richmond,
Texas, on November 21, 2011 (the “First Mediation”). Jim’s deposition was set
for the day after this mediation.

      A week before the date for the First Mediation, Jim filed a motion for
continuance or motion to stay proceedings. Jim asserted that he was on active duty
in the United States Army in Hawaii and that he was not allowed to leave his post
without at least thirty days’ notice. Jim stated that he would not be able to attend
the mediation or deposition the following week. Jim requested that the mediation
and deposition be reset so that he could give the necessary notice to his superiors
and obtain leave to travel to Texas for the mediation and deposition. Jim also
asked for a stay of the proceedings under the Servicemembers Civil Relief Act
“until either the period between the Thanksgiving and Christmas holidays or
anytime following the New Year’s Day holiday.” According to Jim, his
commanding officer would allow him to return to Texas during this time period if
Jim gave thirty days’ prior notice. See 50 App. U.S.C. §§ 521, 522. In the
alternative, Jim stated that he was “more than willing” to participate in the
mediation and deposition by telephone.         The only evidence Jim submitted in
support of this motion was an unsworn letter from him. Jim did not offer affidavits
or other statements from his commanding officer or other military supervisor.

      At a hearing four days later, no evidence was presented, and the trial court
again ordered that Jim personally attend the mediation, implicitly denying Jim’s
motion for continuance and motion to stay the proceedings. Later that day, Jim

                                          17
filed a second motion to stay the proceedings. In this motion for stay, Jim made
arguments similar to those he made in his first motion for stay, except that instead
of attaching his own unsworn letter, Jim attached a letter written on his behalf by a
“military legal assistance attorney.” The author of this letter stated that Jim had
informed him that Jim would not be able to attend the mediation or appear
personally at the deposition. The author stated that Jim was “more than willing” to
participate in a mediation and deposition by telephone or “some other remote
means.” Though the author of the letter stated that Jim’s inability to attend could
be supported by a copy of his orders, Jim did not submit a copy of his orders. 9 Jim
never submitted any sworn evidence in support of his assertions that he was unable
to personally attend the mediation and deposition, nor did he submit any document
from any other person with personal knowledge of the situation.

       Jim did not appear personally at the mediation on November 21 or the
deposition on November 22.           But, Jim did appear two weeks later, and he
personally participated in the mediation (the “Second Mediation”) and deposition
at that time. Lisa sought sanctions against Jim for failing to appear personally at
the First Mediation. Counsel for Lisa and Stearns Pools represented to the trial
court at the hearing that each party had to pay a $1,200 mediation fee for the First
Mediation, which did not take place due to Jim’s unexcused absence. The trial
court announced in open court that it was granting sanctions against Jim in the
amount of $1,200. The trial court later signed a sanctions order in which the
amount of the sanctions was $2,400.

       At the bench trial, Jim initially testified on direct examination that it was
impossible for him to have personally attended the First Mediation and deposition.

9
 We presume for the sake of argument that Jim timely obtained an adverse ruling on his second
motion for a stay under the Servicemembers Civil Relief Act.

                                             18
He then stated that, if he “absolutely wanted” to attend, he could have, but that he
did not pursue this course because it would have required other servicemembers
who were vacationing with their families to return to Hawaii. After trial, the trial
court’s sanctions order was superseded by the final divorce decree, in which the
trial court ordered Jim to pay sanctions in the amount of $4,800.

      Though the Servicemembers Civil Relief Act should be liberally construed
and applied to accomplish its purposes, the statute should not be used as a device
to delay the proper and expeditious determination of legal proceedings when the
rights of the party in military service will not be materially affected thereby. See
Womack v. Berry, 291 S.W.2d 677, 681–82 (Tex. 1956); Power v. Power, 720
S.W.2d 683, 684 (Tex. App.—Houston [1st Dist.] 1986, writ dism’d). The trial
court has wide discretion in determining whether to grant a stay under the statute in
light of the circumstances of a particular case; the trial court also has discretion in
deciding which party should carry the burden of proof. See Womack, 291 S.W.2d
at 682; Power, 720 S.W.2d at 684.

      Two different sections of the Servicemembers Civil Relief Act provide for a
stay of proceedings. See 50 App. U.S.C. §§ 521(d), 522(b). The stay procedure in
section 521 of the statute applies to “any civil action or proceeding . . . in which
the defendant does not make an appearance.” Id. § 521(a), (d). Jim filed an
original answer and counterpetition for divorce more than two and a half years
before he first sought a stay under the statute. Jim had ample opportunity to seek a
stay under section 522. Under section 521’s unambiguous language, we conclude
that it does not apply to either of Jim’s motions for a stay. See id. To the extent
Jim based either of his stay motions on section 521 of the Servicemembers Civil
Relief Act, the trial court did not abuse its discretion in denying either of the
motions. See id.; Power, 720 S.W.2d at 684–85.

                                          19
      Section 522 applies to Jim’s motions for a stay. See 50 App. U.S.C. §
522(a). The trial court must grant a motion for a stay under section 522 if the
movant satisfies the following statutory conditions:

      An application for a stay . . . shall include the following:
      (A) A letter or other communication setting forth facts stating the
      manner in which current military duty requirements materially affect
      the servicemember’s ability to appear and stating a date when the
      servicemember will be available to appear.

      (B) A letter or other communication from the servicemember’s
      commanding officer stating that the servicemember’s current military
      duty prevents appearance and that military leave is not authorized for
      the servicemember at the time of the letter.

50 App. U.S.C. § 522(b). Under the plain text of this statute, a trial court has
discretion to deny a stay if the movant fails to include a letter or other
communication from the movant’s commanding officer stating that the movant’s
current military duty prevents appearance and that military leave is not authorized
for the movant at the time of the letter. See id.; In re Walter, 234 S.W.3d 836, 837
(Tex. App.—Houston [14th Dist.] 2007, orig. proceeding).

      Jim did not submit to the trial court anything from his commanding officer
regarding his ability to attend the mediation or deposition. Therefore, to the extent
Jim based either of his stay motions on section 522, the trial court had discretion to
deny the motions.    See 50 App. U.S.C. § 522; In re Walter, 234 S.W.3d at 837.
Though Jim submitted two unsworn letters in support of the proposition that Jim’s
military service precluded him from attending the First Mediation, one letter was
written by Jim and the other was written by a “military legal assistance attorney”
based on Jim’s statements regarding the situation.        The trial court impliedly
determined that Jim had the burden of proof as to whether his military-duty

                                          20
requirements materially affected his ability to appear personally at the mediation.
See Power, 720 S.W.2d at 684–85. The trial court acted within its discretion by
impliedly discrediting the proof that Jim submitted in support of his motions and in
impliedly concluding that Jim failed to satisfy the burden of proof. See In re
Walter, 234 S.W.3d at 837; Power, 720 S.W.2d at 684–85. Therefore, to the
extent Jim based either of his stay motions on section 522 of the Servicemembers
Civil Relief Act, the trial court did not abuse its discretion in denying either of the
motions. See 50 App. U.S.C. § 522(a); In re Walter, 234 S.W.3d at 837; Power,
720 S.W.2d at 684–85.10

       We review for an abuse of discretion the trial court’s decision to sanction
Jim $4,800 for violating the trial court’s order to appear personally at the First
Mediation. See Cire v. Cummings, 134 S.W.3d 835, 838 (Tex. 2004). The test for
an abuse of discretion is not whether, in the opinion of the reviewing court, the
facts present an appropriate case for the trial court’s action, but whether the court
acted without reference to any guiding rules and principles. See id. at 838–39.
The trial court’s ruling should be reversed only if it was arbitrary or unreasonable.
See id. at 839.

       The record reflects that the trial court ordered Jim to appear personally at the
First Mediation and that Jim failed to do so. Though Jim submitted two unsworn
letters in support of his assertion that military service precluded him from
attending the mediation, it was within the trial court’s discretion to discredit these
letters. See id. at 838–39. Jim’s testimony at the bench trial indicated that he
could have obtained permission to personally attend the mediation, though,
10
   In a Rule 11 agreement filed with the trial court more than a year before the mediation, Jim
agreed that he would not seek a stay of this case under the Servicemembers Civil Relief Act. We
need not and do not address whether this agreement precluded Jim from moving for a stay under
the Servicemembers Civil Relief Act or asserting that sanctions should not be assessed against
him because of his military service.

                                              21
according to Jim, doing so would have required other servicemembers who were
vacationing with their families to return to Hawaii. Jim asserts that Lisa did not
prove that Jim could have attended the mediation and also fulfilled the duties of his
military service. But, Lisa did not have the burden of disproving Jim’s proffered
reason for violating the trial court’s order.              See Basaldua v. Forest Woods
Subdivision Prop. Owners Ass’n, No. 04-11-00716-CV, 2012 WL 2583911, at *4–
5 (Tex. App.—San Antonio July 5, 2012, pet denied) (mem. op.). The trial court
acted within its discretion by impliedly discrediting Jim’s evidence in support of
the proposition that Jim’s military service precluded him from attending the
mediation. See Cire, 134 S.W.3d at 838–39; Basaldua, 2012 WL 2583911, at *4–
5. Thus, the trial court did not abuse its discretion in sanctioning Jim for violating
the trial court’s order to appear personally at the mediation. See Cire, 134 S.W.3d
at 838–39; Basaldua, 2012 WL 2583911, at *4–5.11

       Jim also challenges the amount of the sanctions, asserting that the evidence
is legally insufficient to support a sanction amount greater than $2,400. In the
divorce decree the trial court ordered Jim to pay $2,400 to Lisa and $2,400 to
Stearns Pools. Each amount appears to be the aggregate of all mediation fees paid
by each of these parties, including the fees for the mediation at which Jim appeared
personally. On appeal, Lisa concedes that the correct amount of the sanctions
should be $2,400: $1,200 to Lisa and $1,200 to Stearns Pools, based upon the
mediation fee each paid at the First Mediation, at which Jim did not appear. We
conclude that the trial court abused its discretion to the extent it sanctioned Jim in

11
  Jim has not presented argument in support of a challenge to the sufficiency of any findings in
the trial court’s sanctions order or to the sufficiency of the evidence supporting the trial court’s
exercise of its inherent power to sanction Jim based on his violation of a court order requiring his
personal attendance at a mediation. See Ezeoke v. Tracy, 349 S.W.3d 679, 686 (Tex. App.—
Houston [14th Dist.] 2011, no pet.). Therefore, we do not address either of these issues on
appeal.

                                                22
an amount greater than $2,400.

       For the foregoing reasons, we sustain Jim’s sixteenth issue to the extent Jim
asserts that the trial court abused its discretion in sanctioning Jim in an amount
greater than $2,400.12 We overrule the remainder of Jim’s sixteenth issue.

                                     III.    CONCLUSION

       The trial court reversibly erred in granting a directed verdict at the close of
Lisa’s case-in-chief. This error affects all of the matters in controversy at the jury
trial, and the characterization issue regarding the 490,000 shares is not separable
from the characterization issue regarding the 510,000 shares without unfairness to
the parties. The trial court also reversibly erred in excluding Abraham’s testimony
during the bench trial.        This error affects part, but not all, of the matters in
controversy at the bench trial, and the determination of the value of Stearns Pools
is separable from the other factual issues tried during the bench trial without
unfairness to the parties. The trial court did not err in denying either of Jim’s
motions for a stay under the Servicemembers Civil Relief Act. Nor did the trial
court abuse its discretion in sanctioning Jim for violating the trial court’s order to
appear personally at the mediation. Even so, the trial court abused its discretion to
the extent it sanctioned Jim in an amount greater than $2,400.

       Based on our disposition of the issues, we render judgment as follows:

       (1) We affirm the trial court’s grant of divorce and dissolution of the
12
   In the final divorce decree, the trial court appears to order Jim to pay the $4,800 in mediation
fees both as sanctions and as part of the trial court’s division of the parties’ community estate.
On appeal, Jim has not presented argument in support of a challenge to the trial court’s order that
Jim pay the $4,800 in mediation fees as part of the trial court’s division of the parties’
community estate, and we do not address this issue. In any event, as a remedy for other error
that we found above, this court is reversing the decree and remanding for further proceedings.
These proceedings on remand are described below and include another just and right division of
the community estate.

                                                23
          marriage;
       (2) We reverse the remainder of the divorce decree and remand for
           further proceedings in accordance with this opinion, including
          (a) a new jury trial as to the characterization of all one million
          shares of Stearns Pools stock,
          (b) a new bench trial as to the value of Stearns Pools,
          (c) a just and right division of the community estate in light of the
          jury findings as to the characterization of all shares of Stearns
          Pools stock, the trial court’s new finding as to the value of Stearns
          Pools, and the trial court’s other findings at the first bench trial on
          issues other than the characterization of the Stearns Pools shares or
          the value of Stearns Pools, and
          (d) rendition of a new divorce decree, which may include a new
           sanctions order in which the trial court sanctions Jim for failing to
           appear personally at the court-ordered mediation in an amount not
           to exceed $1,200 as to Lisa and $1,200 as to Stearns Pools.13

                                           /s/     Kem Thompson Frost
                                                   Chief Justice

Panel consists of Chief Justice Frost and Justices Christopher and Busby.

13
   See Sprague v. Sprague, 363 S.W.3d 788, 805 (Tex. App.—Houston [14th Dist.] 2012, pet.
denied). Based on our disposition, we need not address Jim’s eighth issue or the parts of Jim’s
other issues that we have not overruled or sustained in this opinion.

                                              24