in the Interest of K.R.C. and L.R.C.
05-13-01419-CV
| Tex. App. | Dec 1, 2015Background
- Austin and Casey Croom married in 1999; they jointly owned 98% of Aecium (medical billing partnership) and ACM Management owned the remaining 2%.
- Austin had an extramarital relationship with employee Christina (Christy) Hopper beginning in 2007–2008; Hopper’s compensation rose substantially from 2008–2011.
- Casey sued for divorce in 2010 alleging Austin’s adultery, waste of community assets, and fraud on the community; standing orders limited incurring indebtedness during the case.
- Experts (a business appraiser and two valuation/accounting professionals) testified Hopper was overcompensated ~ $150,000 (about $50,000/year for 2009–2011); additional small sums related to home remodeling and a $3,000 loan were contested.
- Trial court found Austin guilty of adultery, waste, and fraud on the community, ordered reconstitution/equalization and entered a $397,000 money judgment to Casey, and permanently enjoined the children from being in the presence of Hopper or her children.
- Austin appealed, arguing (1) insufficient evidence supported reconstitution/monetary equalization (partnership funds issue, expert testimony insufficiency), and (2) injunction against contact with Hopper/kids was unsupported and overly broad.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court abused discretion by awarding $397,000 equalization/reconstitution | Casey: evidence (experts) showed Hopper was overpaid; adultery and fraud/waste justified disproportionate award and reconstitution | Austin: expert testimony was conclusory; partnership payments are partnership, not community, property; no proof Casey was deprived of specific sums | Affirmed — sufficient evidence supported reconstitution and equalization; adultery alone could support disproportionate division; experts’ testimony uncontradicted; partnership ownership facts distinguish Lifshutz |
| Whether permanent injunction barring children from presence/contact with Hopper and her children was supported | Casey: hearing occurred with counselors in camera; lack of reporter’s record waived; trial court considered children’s best interest | Austin: no record of in-camera hearing violates Fam. Code §105.003 and prevents sufficiency review; injunction not shown to be in best interest and is overbroad | Affirmed — parties and counsel participated in and effectively waived the record; missing record presumed to support the trial court’s factual findings; injunction upheld |
Key Cases Cited
- Moroch v. Collins, 174 S.W.3d 849 (Tex. App.—Dallas 2005) (abuse of discretion standard for property division in divorce)
- Schleuter v. Schleuter, 975 S.W.2d 584 (Tex. 1998) (deference to trial court on property division)
- In re Marriage of C.A.S. and D.P.S., 405 S.W.3d 373 (Tex. App.—Dallas 2013) (division of community estate; overlap of abuse-of-discretion and sufficiency review in family cases)
- Reisler v. Reisler, 439 S.W.3d 615 (Tex. App.—Dallas 2014) (bench-trial review: conclusions of law de novo; factual credibility for trial court)
- Murff v. Murff, 615 S.W.2d 696 (Tex. 1981) (mathematical precision not required in dividing property)
- Lifshutz v. Lifshutz, 61 S.W.3d 511 (Tex. App.—San Antonio 2001) (partner’s spouse has no community right in partnership property; cannot pierce partnership to reach assets)
- Palla v. Bio-One, Inc., 424 S.W.3d 722 (Tex. App.—Dallas 2014) (when record incomplete, presumption that missing portions support factfinder)
- In re D.J.M., 114 S.W.3d 637 (Tex. App.—Fort Worth 2003) (waiver of making a record can be shown by failure to object when parties knowingly proceed without reporter)
