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in the Interest of K.R.C. and L.R.C.
05-13-01419-CV
| Tex. App. | Dec 1, 2015
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Background

  • 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)
Read the full case

Case Details

Case Name: in the Interest of K.R.C. and L.R.C.
Court Name: Court of Appeals of Texas
Date Published: Dec 1, 2015
Docket Number: 05-13-01419-CV
Court Abbreviation: Tex. App.