Stearns v. Martens

476 S.W.3d 541, 2015 Tex. App. LEXIS 9025, 2015 WL 5092497
CourtCourt of Appeals of Texas
DecidedAugust 27, 2015
DocketNO. 14-13-00094-CV
StatusPublished
Cited by19 cases

This text of 476 S.W.3d 541 (Stearns v. Martens) 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
Stearns v. Martens, 476 S.W.3d 541, 2015 Tex. App. LEXIS 9025, 2015 WL 5092497 (Tex. Ct. App. 2015).

Opinion

OPINION

Kem Thompson Frost, Chief Justice

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 re[545]*545mainder 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 Steams (“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 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 Februaiy 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 Stearns1 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 ease 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 Steams 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. 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.

[546]*546The 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 £hat 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 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 casein-chief, the trial court’s directed verdict is reversible error absent application of the exception recognized by the Supreme Court of Texas.

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Cite This Page — Counsel Stack

Bluebook (online)
476 S.W.3d 541, 2015 Tex. App. LEXIS 9025, 2015 WL 5092497, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stearns-v-martens-texapp-2015.