Phillips v. Phillips

296 S.W.3d 656, 2009 WL 792756
CourtCourt of Appeals of Texas
DecidedMay 28, 2009
Docket08-06-00171-CV
StatusPublished
Cited by65 cases

This text of 296 S.W.3d 656 (Phillips v. Phillips) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Phillips v. Phillips, 296 S.W.3d 656, 2009 WL 792756 (Tex. Ct. App. 2009).

Opinion

OPINION

ANN CRAWFORD McCLURE, Justice.

Claire Stanard Phillips appeals from a final decree of divorce. While she brings several issues for review, her primary complaint is the trial court’s decision to offset reimbursement claims against a $404,407 constructive fraud award for economic torts committed against the community estate.

FACTUAL SUMMARY

Claire and Troy Phillips married on February 1, 2001. Each brought a significant separate estate into the marriage. The couple separated in November 2003 and Troy filed for divorce on December 29, 2003. Clame answered and filed a counter-petition, alleging fault grounds. Her live pleadings at trial sought a disproportionate division of the community estate and she asserted claims for (1) constructive fraud, (2) reimbursement, (3) economic contribution, and (4) attorneys’ fees. She also joined Troy’s law firm — Glast, Phillips & Murray (which we refer to as GPM)— and alleged theories of alter ego. Finally, she filed a personal injury claim against Troy for assault.

Trial of this matter was bifurcated. During a pretrial hearing in December 2004, the trial judge advised counsel that she intended only to submit characterization issues to the jury, as all other contested issues at that point in time were purely advisory. Claire filed amended pleadings on April 20, 2005, and the jury trial began on May 16. 1 Following a five day trial, the jury found that Troy had committed constructive fraud against the community estate and that Claire’s one-half interest in the community had been short-changed in the amount of $404,407. The jury found against Claire on the assault and reimbursement claims, characterized two assets as Troy’s separate property, and determined that Claire should pay all of Troy’s attorneys’ fees in the total amount of $112,357. Issues related to economic contribution and alter ego were not submitted.

The trial court then conducted a two-day bench trial in September 2005. Claire’s emergency motion for continuance was denied, and she absented herself from trial on September 8. She was present to testify on September 9. The trial judge considered additional claims for reimbursement which had not been submitted to the jury, additional characterization issues, offsets and credits, and the ultimate division of the community estate. Claire’s counsel 2 did not object when Troy introduced *663 evidence pertaining to his claims for offset and introduced additional evidence pertaining to her reimbursement claims. The trial court determined that Troy had paid from his separate estate (1) $38,000 to Claire’s separate estate; and (2) $128,825 to the community estate. The court also found that the community had expended $35,977 for the benefit of Claire’s separate estate. Additionally, Troy had, since the jury trial, made payments for Claire from his separate property in the amount of $9,950.34. Claire had also made unauthorized charges to Troy’s credit cards in the amount of $9,894.80.

In the final decree, the trial court accepted the jury’s findings and rendered judgment that Troy committed fraud on the community estate and that he owed $404,407 on this claim, subject to other awards and offsets. The trial court ordered that the parties’ home (the Degas residence) would be sold and that each spouse would be paid $125,000 representing separate property contributions utilized to purchase the residence. The monies owed to Claire would be paid from the sale proceeds. Findings of fact and conclusions of law were filed. Claire sought additional and amended findings, but the trial court did not act on her request, and no error has been assigned in that regard.

Claire brings five issues for review, each with a multitude of sub-issues. Her statement of facts encompasses eighteen pages and seventeen alphabetically identified complaints, two of which are not included within her issues for review, nor are they briefed. First, the pleadings, the evidence, and all of counsels’ arguments relating to the assault specified that the alleged incident occurred on August 4, 2004. But the jury question, prepared and tendered by Claire’s counsel, contained a typographical error such that the question inquired whether an assault occurred on August 4, 2005. The Final Decree of Divorce, in reciting the jury’s findings, used the proper date of August 4, 2004. Claire has not assigned error or briefed the issue, but asks her in prayer for relief that we correct the decree to reflect that “no assault occurred on August 4, 2005,” which, of course, post-dates the trial. This issue has not been preserved for our review. Moreover, the error is her own.

Second, she complains that her emergency motion for continuance was denied because the trial court believed an earlier continuance which had delayed the bench trial was a direct result of Claire leaving town without notice. Claire insists this was inaccurate information and she filed a motion to correct the error in the record. The trial court denied this request as well. As she has not assigned error or briefed the issue, we decline to consider it. We turn now to those issues which have been briefed.

CREDITS AGAINST THE CONSTRUCTIVE FRAUD JUDGMENT

In her first issue, Claire contends that the trial court erred in reducing the constructive fraud judgment by $141,085, representing Troy’s offset and reimbursement claims. She complains that because Troy failed to submit jury questions, the court could not make fact findings in his favor on claims urged during the bench trial, nor could it offset those claims against the constructive fraud judgment. Alternatively, she argues that the jury found Troy was not entitled to credit for his reimbursement claims. Claire additionally argues that Troy is judicially estopped from asserting his reimbursement claims because he judicially admitted that he was not seeking reimbursement. Finally, she maintains that Troy was allowed reimbursement for community living expenses.

*664 The Nature of Reimbursement

The rule of reimbursement is purely an equitable one. Vallone v. Val-lone, 644 S.W.2d 455, 458 (Tex.1982); Lucy v. Lucy, 162 S.W.3d 770, 776 (Tex. App.-El Paso 2005, no pet.). It is not an interest in property or an enforceable debt, per se, but an equitable right which arises upon dissolution of the marriage through death, divorce, or annulment. Lucy, 162 S.W.3d at 776. An equitable right of reimbursement arises when the funds or assets of one estate are used to benefit and enhance another estate without itself receiving some benefit. Id. A claim for reimbursement includes payment by one marital estate of the unsecured liabilities of another marital estate. Tex. Fam.Code Ann. § 3.408(b)(l)(Vernon Supp.2008). The trial court resolves a claim for reimbursement by using equitable principles, including the principle that claims for reimbursement may be offset if the court detennines it to be appropriate. Tex.Fam.Code Ann. § 3.408(c).

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Cite This Page — Counsel Stack

Bluebook (online)
296 S.W.3d 656, 2009 WL 792756, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phillips-v-phillips-texapp-2009.