Ruben Gamez Hernandez v. Claudia C. Hernandez

• Court: Court of Appeals of Texas
• Decided: June 3, 2009
• Docket: 04-08-00709-CV
• Status: Published

Opinion

i i i i i i

MEMORANDUM OPINION

No. 04-08-00709-CV

Ruben Gamez HERNANDEZ, Appellant

v.

Claudia C. HERNANDEZ, Appellee

From the County Court at Law No. 2, Webb County, Texas Trial Court No. 2007-CVH-001769-C3 Honorable Jesus Garza, Judge Presiding

Opinion by: Steven C. Hilbig, Justice

Sitting: Rebecca Simmons, Justice Steven C. Hilbig, Justice Marialyn Barnard, Justice

Delivered and Filed: June 3, 2009

AFFIRMED

This is an appeal from a final decree of divorce. In a single point of error, Ruben Gamez

Hernandez contends the trial court abused its discretion in dividing the marital estate. We affirm the

trial court’s judgment. 04-08-00709-CV

BACKGROUND

After almost twelve years of marriage, Ruben filed for divorce. Claudia answered and filed

a counter-petition for divorce. Ruben subsequently filed a first amended petition for divorce. Each

petition listed insupportability as grounds for divorce. A trial to the court was held on April 22,

2008. The only disputed issue was the division of the marital estate. Ruben and Claudia were the

only witnesses who testified. The trial court rendered a final decree of divorce and signed findings

of fact and conclusions of law at Ruben’s request. Claiming an improper division of the marital

estate, Ruben filed a notice of appeal.

On appeal, Ruben argues the trial court erred in failing to award him fifty percent “of the

equity and/or enhanced value” of a house, which was determined by the trial court to be Claudia’s

separate property.1 He claims the value of the house was enhanced through the use of community

funds. Ruben thus contends he was denied his right of reimbursement. He further argues the trial

court erred in requiring him to assume and pay off a $7,000.00 loan Claudia took out during the

pendency of the divorce. He contends placing this liability on him “is totally without justification.”

ANALYSIS

Standard of Review

A trial court is charged with dividing the martial estate in a “just and right” manner. Gardner

v. Gardner, 229 S.W.3d 747, 756 (Tex. App.–San Antonio 2007, no pet.); see TEX . FAM . CODE ANN .

1 … Ruben has not raised an issue contesting the trial court’s characterization of the house as separate property. In fact, he incorrectly states in his brief that the trial court’s ruling does not “show how the court characterized the house in question.” In its findings of fact and conclusions of law, the trial court concluded the house was Claudia’s separate property. It is undisputed the house belonged to Claudia’s parents, and that after the death of Claudia’s father and during the marriage of Ruben and Claudia, Claudia’s mother transferred the property to Claudia by gift deed. Property acquired during marriage by gift is separate property. Long v. Long, 234 S.W .3d 32, 34, 37 (Tex. App.–El Paso 2007, pet. denied). Therefore, even if Ruben’s brief could be construed as raising an issue contesting the characterization of the house as separate property, the issue would be decided against him.

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§ 7.01 (Vernon 2006). In dividing the marital estate, the trial court is not required to divide it

equally, but may order an unequal division when a reasonable basis exists for doing so. Murff v.

Murff, 615 S.W.2d 696, 698-99 (Tex. 1981); Gardner, 229 S.W.3d at 756; Prague v. Prague, 190

S.W.3d 31, 41 (Tex. App.–Dallas 2005, pet. denied). We will not disturb a trial court’s division

absent a clear abuse of discretion. Tenery v. Tenery, 932 S.W.2d 29, 30 (Tex. 1996); Lifshutz v.

Lifshutz, 199 S.W.3d 9, 18 (Tex. App.–San Antonio 2006, pets. denied). There is no abuse of

discretion if the trial court’s decision is based on conflicting evidence. In re Barber, 982 S.W.2d

364, 366 (Tex. 1998) (orig. proceeding). We will “consider every reasonable presumption in favor

of the proper exercise of discretion by the trial court in dividing the community estate.” McSweeney

v. McSweeney, No. 04-06-00461-CV, 2007 WL 247677, at *2 (Tex. App.–San Antonio Jan. 31,

2007, no pet.) (citing Murff, 615 S.W.2d at 699; Prague, 190 S.W.3d at 41). The trial court’s

discretion in deciding and evaluating a reimbursement claim is just as broad as its discretion in

dividing the marital estate. Penick v. Penick, 783 S.W.2d 194, 198 (Tex. 1988).

Reimbursement

Ruben claims the trial court erred in its property division because he was not awarded fifty

percent of the equity or enhanced value of the house in which the couple resided during marriage.

Ruben in essence argues he was entitled to a reimbursement for community funds and effort

expended on enhancing the value of Claudia’s separate property.

The testimony established that after their marriage Ruben and Claudia moved into a house

belonging to Claudia’s parents. The couple lived in the house “rent free” during the entirety of the

marriage except for a six-month period at the inception of the marriage. Claudia testified they were

excused from paying rent in exchange for maintaining the house and paying the taxes. Ruben

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disputed the existence of any such agreement, testifying they moved in at Claudia’s insistence so she

could care for her parents.

After Claudia’s father died, the house passed to her mother. At some later point, the mother

transferred the house to Claudia by gift deed, but reserved a life estate in the house. Fee simple title

to the house did not vest in Claudia until her mother’s death. See Enserch Exploration, Inc. v.

Wimmer, 718 S.W.2d 308, 310 (Tex. App.–Amarillo 1986 writ ref’d n.r.e.) (holding life tenant is

entitled to exclusive possession and control of property comprising life estate and remainderman is

not entitled to possession until life estate terminates); Potka v. Potka, 205 S.W.2d 51, (Tex. Civ.

App.–Waco 1947, writ ref’d n.r.e.) (holding that where mother conveyed property to daughters,

reserving in herself a life estate, daughters or their heirs became cotenants in property immediately

upon mother’s death). In 2005, Claudia’s mother took out a $57,000 loan, using the house as

collateral. The parties agree that $18,000 of the loan proceeds was used for improvements to the

house, $4,000-$5,000 to pay taxes on the house, and the remaining money was used by Ruben and

Claudia for items including vehicles, clothes, trips, etc. The parties apparently agreed Ruben and

Claudia would be responsible for the loan because the money was for their benefit. Claudia testified

the $18,000 expended for home improvements was for the couple’s benefit – to enable them to

comply with the agreement to maintain the house and pay the taxes in exchange for not paying rent.

Ruben testified that before the loan was taken out, he had already made improvements to the

house and the grounds. He claimed he paid someone to make repairs on the home, including

replacing windows and doors, decorating with “custom rocks,” and adding a room. Ruben also

testified he made improvements to the floors, the kitchen, the porch, and the garage. Claudia agreed

Ruben paid for “a little bit of repairs” “out of his pocket,” but testified her mother’s money was also

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used for these pre-loan repairs. The only testimony about the value of the property came from

Ruben. He stated that when he and Claudia moved into the house it was worth “about $60,000.”

When asked about the value of the house after the remodeling, but before the loan, Ruben stated the

loan company valued it at $90,000.

Reimbursement claims are equitable claims that arise when the funds or assets of one estate

are used to benefit and enhance another estate without the financing estate receiving some benefit

to itself. Vallone v. Vallone, 644 S.W.2d 455, 458-59 (Tex. 1982); Garza v. Garza, 217 S.W.3d 538,

546 (Tex. App.–San Antonio 2006, no pet.). A right of reimbursement also arises when the

community receives inadequate compensation for the time, talent, and labor it used to benefit or

enhance one spouse’s separate estate beyond whatever care and expenditures were necessary to

maintain and preserve it. Id. A reimbursement claim is measured by the enhancement value to the

benefitted estate. Anderson v. Gilliland, 684 S.W.2d 673, 675 (Tex. 1985). Enhanced value is

determined by “the difference between the fair market value before and after any improvements

made by the community during the marriage.” Vickery v. Vickery, 999 S.W.2d 342, 371 (Tex. 1999);

Garza, 217 S.W.3d at 546. This measurement is applied whether the situation involves the payment

of a purchase money debt or a capital improvement. Penick, 783 S.W.2d 197; Garza, 217 S.W.3d

at 546.

However, in deciding the value of a claim for reimbursement, the benefits to the payor estate

must be offset against the benefits to the payee estate. Id. In other words, the trial court should not

merely return to the spouse seeking reimbursement the actual amount advanced without regard to

the benefits that spouse might have received by virtue of the advancement. Id. The trial court should

also consider “all the facts and circumstances and determine what is fair, just, and equitable.”

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Penick, 783 S.W.2d at 197. And, it is not simply a “balancing of the ledgers between the marital

estates.” Id. at 198.

Ruben, as the party claiming reimbursement, bears the burden of establishing his claim. See

Garza, 217 S.W.3d at 546. This burden includes establishing the net benefit to Claudia’s separate

estate, Vallone, 644 S.W.2d at 459, and the offsetting benefit to the community estate. Gutierrez v.

Gutierrez, 791 S.W.2d 659, 665 (Tex. App.–San Antonio 1990, no writ).

Ruben has not sustained his burden. He testified that when they moved into the house in

1996 it was valued, in his estimation, at $60,000, and that after he expended funds for improvement

but before Claudia’s mother received the loan in 2005, the loan company valued it at $90,000. He

did not establish the net benefit to Claudia’s separate estate nor the offsetting benefit the

improvements bestowed on the community estate. It is undisputed that Ruben and Claudia lived in

the house without paying rent for almost the entirety of their marriage. This certainly benefitted the

community – it was not required to pay for housing for the duration of the marriage. And, given that

Ruben and Claudia lived in the house after Ruben’s improvements, it was to their benefit to make

it livable and comfortable. Moreover, Claudia testified Ruben expended only “a little bit” money

on the improvements, and her mother’s money was also used to pay for the home improvements.

These were facts and circumstances the trial court was entitled to consider in determining what was

fair and equitable with regard to Ruben’s reimbursement claim. See Penick, 783 S.W.2d at 197;

Garza, 217 S.W.3d at 546. Accordingly, we hold the trial court did not abuse its discretion in failing

to award Ruben reimbursement monies for improvements he allegedly made to the house.

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Unjust Division

Ruben also contends the trial court erred in ordering him to assume the $7,000 loan taken out

by Claudia during their separation. In his brief, Ruben states the ruling was “totally without

justification.” He argues that because the trial court made temporary orders requiring him to pay

Claudia $400 a month for four months as temporary spousal support, and there was no pleading or

evidence he was in contempt of that order or any evidence on the issue of continued spousal support,

there was no basis to support the court’s order that he assume the debt.

We begin by noting there is no indication in the record the trial court ordered Ruben to

assume the debt based on contempt of any temporary order, nor is there anything to support his claim

that the trial court ordered him to assume the debt as spousal support. Rather, the trial court found

the loan was a community debt and, the final decree, which divides the property, simply orders

Ruben to assume the debt as part of the division of the marital estate. We must therefore determine

if the trial court’s division was disproportionate and if so whether it constituted a clear abuse of

discretion according to the “just and right” standard, not whether it erred in ordering Ruben to pay

the debt based on contempt or spousal support.

An evaluation of a trial court’s “just and fair” division typically begins with the values of the

various marital assets. Redeaux v. Redeaux, No. 09-06-084-CV, 2007 WL 274728, at *4 (Tex.

App.–Beaumont Feb. 1, 2007, pet. denied) (mem. op.). Here, however, the record does not include

the value of many of the marital assets such as: an industrial drill, two washer and dryer sets, three

air conditioner units, an aquarium, a desk, items and cash in the parties’ sole control, two computers,

two bedroom sets, a wooden dining room set, a filing cabinet, two flat-bed trailers, the furniture in

Claudia’s house, and a mini bar. Nor is there any evidence in the record about the parties’ credit card

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indebtedness, though the final decree references such debt. Absent these valuations, Ruben cannot

demonstrate from the record that the trial court erred in its division of the marital estate, including

the order that he assume the $7,000 loan. See McSweeney, 2007 WL 247677, at *2 (holding party

who complains of trial court’s division must demonstrate from evidence in record that division was

so unjust as to be abuse of discretion); Prague, 190 S.W.3d 41 (same). Without such evidence we

cannot say the division of the marital estate was disproportionate, much less an abuse of discretion.

See Redeaux, 2007 WL 274728, at *4.

However, assuming the division was disproportionate and favored Claudia, we still cannot

hold the trial court abused its discretion. Only the parties testified at trial. Claudia testified she did

not work until about a month before the final hearing and had to take out the loan for her subsistence

during the pendency of the divorce. According to Claudia, without the loan she would have lost the

house because it was used to collateralize the $57,000 loan taken out by her mother in 2005. It

appears from the record that Ruben supported himself during the separation by working as a school

bus driver and by operating a body shop in which Claudia claimed in interest. Ruben only paid

Claudia two months of the court-ordered temporary spousal support, which amounted to $800,

despite having been ordered to pay her four months of temporary spousal support, which would have

amounted to $1,600.

We hold the trial court, which was the sole judge of the credibility of the witnesses, did not

abuse its discretion in ordering Ruben to assume the $7,000 loan, even if it resulted in an unequal

division of the marital estate. See Murff, 615 S.W.2d at 700 (noting trial court in divorce case has

opportunity to observe parties on stand and determine credibility); see also City of Keller v. Wilson,

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168 S.W.3d 802, 819 (Tex. 2005) (holding reviewing court cannot impose own opinions on

credibility of witnesses and weight to be given their testimony contrary to those of fact finder).

CONCLUSION

We hold Ruben has not established the trial court clearly abused its discretion. Accordingly,

we overrule his issue and affirm the trial court’s judgment.

Steven C. Hilbig, Justice

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