Opinion
NO. 02-17-00031-CV
01-25-2018
JEANETTE URBAN ALLEN APPELLANT v. ROBERT TERRY ALLEN APPELLEE
FROM THE 325TH DISTRICT COURT OF TARRANT COUNTY
TRIAL COURT NO. 325-573790-15 MEMORANDUM OPINION
See Tex. R. App. P. 47.4.
On April 3, 2009, Appellant Jeanette Urban Allen purchased a residence located in Bedford, Texas. Shortly after, on May 16, 2009, she married Appellee Robert Terry Allen. On January 18, 2012, Jeanette executed a general warranty deed in which she conveyed to Robert an undivided one-half interest in the residence. The deed recites that the consideration for that conveyance was "[l]ove of, and affection for, [Robert]." A few years later, Jeanette filed a petition for divorce, which the trial court granted. In its decree, the trial court confirmed that Jeanette and Robert each owned, as their separate property, an undivided one-half interest in the residence, and it appointed a receiver to sell the residence and distribute the net proceeds as provided in the decree.
In three issues, Jeanette challenges the trial court's disposition of the residence and appointment of the receiver. We affirm.
I. THE TRIAL COURT'S CHARACTERIZATION OF ROBERT'S INTEREST
AS HIS SEPARATE PROPERTY
In her first issue, Jeanette contends that the trial court erred by characterizing as Robert's separate property the undivided one-half interest in the residence that she conveyed to him in the January 18, 2012 deed because insufficient evidence supports the trial court's implied finding that the conveyance was a gift. She argues the trial court should have characterized that property interest as community property and divided it accordingly in its divorce decree.
Jeanette points to her own trial testimony, wherein she testified that she had trouble paying the taxes on the house; that at some point, Robert approached her and told her that if she put his name on the house, then the VA would pay the taxes; and that her sole purpose in conveying the one-half interest to Robert in the deed was to obtain the benefit of having the VA pay the taxes. She also points to a portion of Robert's testimony, in which he agreed with Jeanette's testimony that he had "asked her to deed the house to save some taxes." Jeanette argues this evidence shows that she conveyed the interest to Robert solely to secure a financial benefit from him. Therefore, Jeanette contends, the evidence is factually insufficient to support the trial court's implied finding that the conveyance was a gift to Robert. Instead, Jeanette argues that "the deed to [Robert] of a one-half interest in the marital residence [was] a grant of community property conveyed for a promise by [Robert] for value," and she seeks a remand for the trial court to divide that interest accordingly.
A. JEANETTE'S PLEADINGS DO NOT SUPPORT THE RELIEF SHE REQUESTS
We first note that the record shows Jeanette never alleged in the trial court that the undivided one-half interest in the residence that she conveyed to Robert was community property nor requested the trial court to divide that interest as community property. To the contrary, Jeanette pleaded that "a portion of [her] separate real property was fraudulently transferred to [Robert]," and the relief she requested was for the trial court to "set aside the transfer and confirm the real property as [her] separate property and estate." Thus, in the trial court, Jeanette maintained that the conveyance to Robert was ineffective and that the entire residence was her separate property. On appeal, however, she contends for the first time that the conveyance to Robert was effective and that the undivided one-half interest conveyed thereby was community property. That being so, it is apparent that Jeanette asks us to reverse the trial court for failing to grant her relief she never requested (to make a just and right division of the one-half interest she conveyed to Robert) based upon a theory of recovery she never pleaded (that the deed to Robert conveyed an interest that was community property).
Jeanette also filed a proposed property division, in which she alleged that she had purchased the Bedford residence before her marriage to Robert as her separate property; that the transfer of the one-half interest to Robert in the January 18, 2012 deed was fraudulent and "should be undone"; and that if the trial court did not "undo" that transfer, it should award the entire residence to her as her sole and separate property. That document came into evidence during trial.
The purpose of pleadings is to give the parties notice of the claims, defenses, and relief sought. Herrington v. Sandcastle Condo. Ass'n, 222 S.W.3d 99, 102 (Tex. App.—Houston [14th Dist.] 2006, no pet.). A trial court's judgment must conform to the pleadings, and thus a trial court cannot grant relief to a party in the absence of pleadings supporting that relief, unless the issue was tried by consent. Tex. R. Civ. P. 301; In re Park Mem'l Condo. Ass'n, Inc., 322 S.W.3d 447, 450-51 (Tex. App.—Houston [14th Dist.] 2010, orig. proceeding). The record shows that the issue of whether the one-half interest at issue here should be characterized and divided as community property was not tried by consent. And because Jeanette did not plead for that relief, the trial court could not grant her that relief, and we cannot reverse the trial court's judgment based upon this unpleaded theory of recovery. See Tex. R. Civ. P. 301; Tejas Fun, L.P. v. Just For Fun Grapevine, Inc., No. 02-12-00210-CV, 2013 WL 173747, at *4 (Tex. App.—Fort Worth Jan. 17, 2013, no pet.) (mem. op.) (holding trial court abused its discretion by granting relief not requested in pleadings); see also Bhatia v. Woodlands N. Houston Heart Ctr., PLLC, 396 S.W.3d 658, 664 (Tex. App.—Houston [14th Dist.] 2013, pet. denied) ("We cannot reverse the trial court's judgment based on a theory of recovery not pleaded and proven below.").
B. JEANETTE'S REQUESTED RELIEF IS UNAVAILABLE AS A MATTER OF LAW
Additionally, even if Jeanette had pleaded for the trial court to characterize and divide as community property the interest in the residence that she conveyed to Robert, she nevertheless could not obtain that relief because it is unavailable as a matter of law. It is undisputed that Jeanette acquired the residence prior to her marriage to Robert and that the entire residence remained her separate property until she executed the deed conveying an undivided one-half interest in the residence to him. Thus, Jeanette's argument that the interest conveyed to Robert in the deed should be characterized as community property necessarily assumes that the deed converted a portion of her separate property to community property. As a matter of law, this is not so.
Family code section 4.202 provides that "[a]t any time, spouses may agree that all or part of the separate property owned by either or both spouses is converted to community property." Tex. Fam. Code Ann. § 4.202 (West 2006). Such an agreement must (1) be in writing; (2) be signed by the spouses; (3) identify the property being converted; and (4) specify that the property is being converted to the spouses' community property. Id. § 4.203(a) (West 2006); Alonso v. Alvarez, 409 S.W.3d 754, 758 (Tex. App.—San Antonio 2013, pet. denied); In re Estate of Cunningham, 390 S.W.3d 685, 688 (Tex. App.—Dallas 2012, no pet.). But "[t]he mere transfer of a spouse's separate property to the name of the other spouse or to the name of both spouses is not sufficient to convert the property to community property." Tex. Fam. Code Ann. § 4.203(b) (West 2006); Estate of Cunningham, 390 S.W.3d at 688.
The deed at issue here does not satisfy the statutory requirements for an agreement to convert separate property to community property because, at the very least, Robert did not sign it, and it does not state that the undivided one-half interest in the residence was being converted to Jeanette and Robert's community property. See Tex. Fam. Code Ann. § 4.203; Alonso, 409 S.W.3d at 758; Estate of Cunningham, 390 S.W.3d at 688. Therefore, if, as Jeanette argues in her first issue, the deed effectively conveyed an interest in the residence to Robert, then the interest he acquired thereby must necessarily have been his separate property. Thus, even if we sustained Jeanette's factual-sufficiency challenge to the trial court's finding that she deeded the interest in the residence to Robert as a gift, she nevertheless could not obtain the relief she seeks on remand—that the trial court characterize the interest so conveyed as community property and divide it accordingly—because on the record here, that relief is precluded as a matter of law.
We overrule Jeanette's first issue.
II. THE TRIAL COURT'S DECISION NOT TO IMPOSE AN EQUITABLE
TRUST UPON ROBERT'S INTEREST IN THE RESIDENCE
In her second issue, Jeanette argues the trial court erred by failing to impose, with Jeanette as beneficiary, an equitable trust upon Robert's interest in the residence. She contends the trial court's implied finding that Robert did not obtain that interest by fraud was against the great weight and preponderance of the evidence.
Jeanette isolates two statements from Robert's testimony to argue that she conveyed the interest in the residence to Robert based on a material misrepresentation from him. As noted above, Jeanette testified that when she was struggling to pay the taxes on the residence, Robert approached her and said, "If you put my name on the house, [the] VA will pay your taxes." During his direct examination, Robert testified as follows:
Q. Did -- you heard the testimony of your wife that you asked her to deed the house to save some taxes?Jeanette argues this exchange establishes that Robert fraudulently induced her to convey the interest to him because Robert testified that Jeanette's testimony that he told her that the VA would pay the taxes if she put his name on the house was accurate, but then he testified that he was eligible to receive an exemption from the taxes from Tarrant County, not that the VA would pay the taxes. Thus, Jeanette argues, the trial court should have found that Robert obtained the interest in the residence by fraud and imposed an equitable trust for her benefit on that interest.
A. Yes.
Q. Is that -- was that conversation accurate?
A. Yes. As a disabled vet, I -- I get an allowance from Tarrant County. I can be tax exempt as a disabled vet.
We note that Jeanette testified that she had not paid any taxes on the residence since 2012.
A. JEANETTE'S PLEADINGS DO NOT SUPPORT THE RELIEF SHE REQUESTS
Here, as in our discussion of her first issue, we note that Jeanette's pleadings do not support the relief she requests: she never requested the trial court to impose an equitable trust for her benefit upon Robert's interest in the residence. Indeed, one of the grounds she asserted in her motion for new trial was that "the issue of a resulting trust or constructive trust imposed upon [Robert's] interest in the marital residence was not properly presented to or considered by the Court." She also alleged in her motion that "the divorce hearing was not properly presented, by pleadings or proof, with the issues of a resulting trust or constructive trust as it pertains to the general warranty deed" and that trial counsel "failed to properly plead or present o[r] argue the issues of a resultant or constructive trust to the Court." As we explained in our discussion of her first issue, because Jeanette did not plead for an equitable trust and the issue was not tried by consent, the trial court could not grant her that relief, and we cannot reverse the trial court's judgment based on this unpleaded theory of recovery. See Tex. R. Civ. P. 301; Tejas Fun, L.P., 2013 WL 173747, at *4 (holding trial court abused its discretion by granting relief not requested in pleadings); see also Bhatia, 396 S.W.3d at 664 ("We cannot reverse the trial court's judgment based on a theory of recovery not pleaded and proven below.").
B. SUFFICIENT EVIDENCE SUPPORTS THE TRIAL COURT'S FINDING OF NO FRAUD
Additionally, even if Jeanette had pleaded for the trial court to impose an equitable trust upon Robert's interest, we nevertheless would not sustain her factual-sufficiency challenge to the trial court's implied finding that Robert did not acquire the one-half interest in the residence by fraud. When reviewing an assertion that the evidence is factually insufficient to support a finding, we set aside the finding only if, after considering and weighing all of the evidence in the record pertinent to that finding, we determine that the credible evidence supporting the finding is so weak, or so contrary to the overwhelming weight of all the evidence, that the answer should be set aside and a new trial ordered. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986) (op. on reh'g); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965). When a party attacks the factual sufficiency of an adverse finding on an issue on which she has the burden of proof, she must demonstrate on appeal that the adverse finding is against the great weight and preponderance of the evidence. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001).
To establish fraud, Jeanette had the burden to prove that (1) Robert made a material misrepresentation; (2) Robert knew the representation was false or made the representation recklessly without any knowledge of its truth; (3) Robert made the representation with the intent that Jeanette would act on that representation or intended to induce her reliance on the representation; and (4) she suffered an injury by actively and justifiably relying on that representation. See Exxon Corp. v. Emerald Oil & Gas Co., 348 S.W.3d 194, 217 (Tex. 2011).
In her brief, the only material misrepresentation Jeanette asserts Robert made is telling her that putting his name on the residence would result in the VA paying the taxes, when in reality putting Robert's name on the residence would not result in the VA paying the taxes but rather would make the residence eligible for an exemption due to Robert's status as a disabled veteran. Assuming this constitutes a material misrepresentation, the trial court could nevertheless have rejected Jeanette's fraud claim because the evidence supports an implied finding that she did not suffer an injury, and Jeanette has not demonstrated on appeal that this finding is against the great weight and preponderance of the evidence. See Dow Chem. Co., 46 S.W.3d at 242.
Jeanette testified that she deeded the undivided one-half interest in the residence to Robert because she was struggling to pay the taxes on the residence and that she believed, based upon Robert's representations, that if she conveyed the property to him, the VA would pay the taxes. According to Jeanette, the sole reason why she conveyed that interest to Robert was "[s]o [the] VA would pay taxes on my house. It was really hard for me to pay them." She also testified that she had not paid any taxes on the residence since 2012 and that she received the benefit of not having to pay the taxes on the residence by transferring the one-half interest in the residence to Robert. And Robert testified that they saved over $4,000 per year as a result of putting his name on the house. Thus, even assuming that Robert told Jeanette that if she put his name on the house the VA would pay the taxes when in fact the reason why she would not have to pay taxes on the residence was because Robert was eligible for an exemption as a disabled veteran, and assuming that was a material misrepresentation, the trial court nevertheless could have found that Jeanette did not prove her fraud claim because the record supports a finding that Jeanette suffered no injury by relying on that representation since the evidence shows that she received the benefit of not having to pay taxes on the residence after she conveyed the interest to Robert. Jeanette has not demonstrated that such a finding is against the great weight and preponderance of the evidence. See id.
We overrule Jeanette's second issue.
III. THE TRIAL COURT'S APPOINTMENT OF A RECEIVER TO PARTITION
THE RESIDENCE BY SALE
In her third issue, Jeanette argues that the trial court erred by appointing a receiver to sell the residence. She first contends that the trial court's authority to appoint a receiver in a case like this one is governed by civil practice and remedies code section 64.001(a)(3), which provides that a court of competent jurisdiction may appoint a receiver "in an action between partners or others jointly owning or interested in any property or fund." See Tex. Civ. Prac. & Rem. Code Ann. § 64.001(a)(3) (West 2008). She further points to civil practice and remedies code section 64.001(b), which provides that a receiver may be appointed under subsection (a)(3) on the application of a party if the party has a probable interest in or right to the property and the property is in danger of being lost, removed, or materially injured. See id. § 64.001(b). Jeanette argues the trial court had no authority to appoint a receiver because "[t]here is absolutely no evidence in the record that the marital residence is in danger of being lost, removed, or materially injured." However, Jeanette did not raise this argument in the trial court, and thus she failed to preserve it for our review. See Tex. R. App. P. 33.1(a).
Additionally, citing to the Fourteenth Court of Appeals' decision in Rusk v. Rusk, 5 S.W.3d 299, 307 (Tex. App.—Houston [14th Dist.] 1999, pet. denied), Jeanette argues the trial court had no power to appoint a receiver to sell her separate-property interest in the residence. Her argument is cursory and difficult to discern. First, she simply quotes the following excerpt from Rusk:
The Texas Family Code's broad grant of discretion, concerning a final property division, relates to marital property held or claimed by the spouses and does not extend to the constitutionally-protected class of separate property, nor to the appointment of receivers over such property. The trial court has no inherent or other authority to divide separate property, only non-separate or marital property. We must also cautiously view the case law development, indicating a legislative grant of discretion in division of property vis a vis the more specific legislative mandates for receiverships.5 S.W.3d at 307 (citations omitted). After quoting this excerpt, Jeanette makes the conclusory assertion "that her separate property interest in the marital residence is not subject to sale by a receiver as a result of a decree of divorce." Jeanette makes no attempt to explain how Rusk is applicable to this case. We conclude Rusk is distinguishable.
In Rusk, the trial court had appointed in its divorce decree a receiver over certain separate and community assets of the husband, and as relevant here, the court of appeals concluded the trial court had no authority to appoint a receiver over the husband's separate property. Id. at 305-08. But unlike here, there is no indication in Rusk that any of the separate property over which the trial court had appointed a receiver was jointly owned by the parties. See id. at 302, 308 ("The trial court appointed a receiver to take charge of certain real and personal, separate and community property awarded to" husband and the "property placed in receivership . . . includes all of [husband's] separate and community property").
The Rusk court also concluded that the trial court abused its discretion by appointing a receiver over the community assets. 5 S.W.3d at 307. Because the trial court here did not appoint a receiver over any community assets, the Rusk court's reasoning and holding on the issue of the trial court's appointment of a receiver over the parties' community assets is inapplicable.
We note that the property descriptions of two pieces of real property the trial court had placed under receivership stated those parcels were "the pre-marriage separate property of [husband]."
The Rusk court additionally concluded the trial court abused its discretion by appointing the receiver because the party opposing the receivership (the husband) was not sufficiently on notice that a receivership was being requested. See id. at 309 (noting wife failed to plead for a receivership until the final argument of her counsel, who filed a hand-written trial amendment that the court accepted, and holding that the trial court abused its discretion by allowing that trial amendment). Here, by contrast, Robert's pleadings included an allegation that the parties jointly owned undivided, separate-property interests in the residence and a request for the trial court to appoint a receiver to sell that property and divide the proceeds between the parties; Robert filed a proposed division of property, which the trial court admitted into evidence at trial, requesting the residence be sold and one-half of the proceeds awarded to him; and the issue of receivership over the residence was presented at trial. We thus conclude Rusk is inapposite.
We further note that the trial court's divorce decree does not divide Jeanette's separate property—that is, it does not divest Jeanette of her separate-property interest in the residence. See Eggemeyer v. Eggemeyer, 554 S.W.2d 137, 138 (Tex. 1977) (holding that trial court may not in a divorce decree divest one spouse of his separate realty and transfer title to the other spouse); Muller v. Muller, No. 02-02-00349-CV, 2003 WL 22026413, at *2 (Tex. App.—Fort Worth Aug. 28, 2003, no pet.) (mem. op.) ("A trial court cannot divide, divest title, or take from a person his or her separate property, whether the property is personal property or real estate."). Rather, it confirms that interest: the decree confirms that Jeanette and Robert each own an undivided one-half interest in the residence as their separate property. As such, Jeanette and Robert jointly own the residence as tenants in common. See Roberts v. Roberts, 999 S.W.2d 424, 431-32 (Tex. App.—El Paso 1999, no pet.) (noting that where wife gifts husband an interest in residence she owned prior to marriage, the interest husband acquires thereby is his separate property, and husband and wife consequently jointly own the residence as tenants in common). And the trial court had the authority, under the general laws pertaining to partition suits between co-tenants, to order, concurrently with the divorce proceeding, that the residence be partitioned by sale. See Motley v. Motley, 390 S.W.3d 689, 694 (Tex. App.—Dallas 2013, no pet.) ("Although a partitioning of separate property is not part of a divorce proceeding, it can be done concurrently with the divorce proceeding."); Halamka v. Halamka, 799 S.W.2d 351, 354 (Tex. App.—Texarkana 1990, no pet.) (concluding that the trial court had authority to consider, under the general laws pertaining to partition suits between co-tenants and concurrently with divorce proceeding, an action for the partitioning of separate property jointly owned by husband and wife).
The trial court's appointment of a receiver to sell the residence arose from Robert's request to partition the residence by sale. Here, applying the laws of a partition action, the trial court implicitly found that the residence was incapable of partition in kind and that equity required a partition by sale. See Tex. R. Civ. P. 761, 770; Halamka, 799 S.W.2d at 354. And having the authority to order a partition by sale, the trial court was also authorized both by statute and the rules of civil procedure to appoint a receiver to accomplish the sale. See Tex. Civ. Prac. & Rem. Code Ann. § 64.001(a)(6) (authorizing a trial court to appoint a receiver "in any other case in which a receiver may be appointed under the rules of equity"); Tex. R. Civ. P. 770; Halamka, 799 S.W.2d at 354 (citing rules of civil procedure 761 and 770 and noting the trial court found that equity required an immediate partition by sale of the property jointly owned by husband and wife through a court-appointed receiver). Thus, the trial court was authorized to order, concurrently with Jeanette and Robert's divorce proceeding, a partition of the jointly-owned residence by sale through a receiver. Consequently, Jeanette's argument that the trial court lacked authority to appoint a receiver for that purpose is without merit. We overrule Jeanette's third issue.
IV. CONCLUSION
Having overruled all of Jeanette's issues, we affirm the trial court's judgment. Tex. R. App. P. 43.2(a).
/s/ Lee Gabriel
LEE GABRIEL
JUSTICE PANEL: WALKER, MEIER, and GABRIEL, JJ. DELIVERED: January 25, 2018