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Domicile is an important legal concept because it establishes where a person has certain legal rights and obligations.  A Texas divorce suit requires a party to have been domiciled in Texas for the preceding six-month period and a resident of the county where the suit was filed for the preceding 90-day period.  TEX. FAM. CODE ANN. § 6.301.  Domicile is the place a person intends to establish a permanent home. To establish domicile, the person must also act in execution of the intent.  For most people, domicile is fairly easy to identify, but it can be more complicated for members of the military.

The wife of a member of the Air Force recently challenged jurisdiction of a Texas divorce proceeding.  According to the appeals court’s opinion, the couple married in Texas in 2003. The husband identified Kendall County, Texas as his home of record.  Both parties testified that they and the children had lived in North Carolina continuously for the previous six years.  The wife filed for legal separation in North Carolina, and the husband subsequently filed for divorce in Kendall County, Texas.

The wife argued Texas did not have subject-matter jurisdiction.  The trial court dismissed the petition for divorce, finding Texas was not the children’s home state and they did not have significant contacts with Texas.  The trial court also found the father was not a resident of Kendall County, Texas.  The trial court ultimately concluded North Carolina was the more convenient forum and more suitable for hearing both the custody and the divorce.  The husband appealed.  The appeals court identified two separate issues in this case: the divorce and the custody.

Divorce Jurisdiction

Although the parties lived in North Carolina during the relevant period, the husband’s status in the military requires further inquiry.  A member of the military does not change domiciles just because he or she is stationed in a new location.  His or her domicile remains what it was when he or she entered the military, unless he or she clearly intended to change domicile.  The appeals court did not find an “unequivocal intention to change domicile.”  The husband testified he was a resident of Kendall County when he joined the Air Force and he had not established a permanent home elsewhere. He intended to return when he retired.  He maintained Texas voter registration and a Texas driver’s license.  The record supported a finding that the husband was a Texas domiciliary.  Under the Texas Family Code, time a Texas domiciliary spends outside the state or county of residence while serving in the military is considered residence in Texas and the county of residence.  The appeals court therefore found the husband could maintain his divorce proceeding in Kendall County.

Custody Jurisdiction

Texas has adopted the Uniform Child Custody Jurisdiction and Enforcement Act (“UCCJEA”), which governs jurisdiction of child custody cases.  A Texas court only has jurisdiction to make an initial custody determination: 1) if Texas is the child’s home state when the proceeding commenced or was the child’s home state within 6 months before commencement and the child is absent from the state, but a parent or acting parent still lives in Texas;  2) if another state’s court does not have “home state” jurisdiction or the court that does have home state jurisdiction declines to exercise it because Texas is the more appropriate forum; or 3) all courts with jurisdiction have declined it on the ground Texas is the more appropriate forum.  A child’s “home state” is the state where he or she lived with a parent or acting parent for the six months preceding the commencement of the custody proceeding.

The father did not submit the affidavit required by the Family Code, but the mother filed one indicating the children lived in North Carolina since they were born.  Thus, based on the only evidence available, North Carolina was the children’s home state.

There was no indication that a North Carolina court had declined jurisdiction.  The appeals court found the Kendall County court did not have subject matter jurisdiction over the custody case.

The husband argued Kendall County had jurisdiction pursuant the statute which provides that time spent by a Texas domiciliary outside the state while in the service of the armed forces is considered residence in Texas and the county of residence.  The appeals court noted, however, that the UCCJEA provides that it is the “exclusive jurisdictional basis” for custody cases, and that the UCCJEA controls in the event of a conflict with other statutes.

Declining Jurisdiction

The appeals court also found no error in the trial court’s decision to decline jurisdiction over the divorce.  A trial court may retain jurisdiction over a divorce when it does not have jurisdiction for the custody proceeding, but it does not have to do so.  Here, the couple had not lived in Texas for many years.  The husband intends to remain in North Carolina until his retirement in 2019.  Most of the property in dispute is also in North Carolina.  Additionally, the wife had filed separation proceedings in North Carolina before the husband petitioned for divorce in Texas.

The appeals court affirmed the portion of the trial court’s order granting the mother’s plea to the jurisdiction regarding custody and her request that the trial court decline jurisdiction over the divorce.

Seek Skilled Legal Representation

Family law issues involving members of the military or multiple jurisdictions can be very complex.  If you are facing such issues, an experienced Texas divorce attorney can assist you through the process.  Call McClure Law Group at 214.692.820 to schedule a consultation.

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Interstate Child Custody Disputes and the Uniform Child Custody Jurisdiction and Enforcement Act

Special Provisions for Active Military Members under the Texas Family Code

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The Fifth Amendment to the U.S. Constitution prevents anyone from being “compelled in any criminal case to be a witness against himself.” A party in a Texas civil case can “plead the Fifth” during discovery to avoid answering questions in a deposition if the party reasonably believes the answer might incriminate him in a criminal case. A plaintiff cannot, however, use the Fifth Amendment to prevent the other party from obtaining information they need to prepare a defense.  A trial court can impose sanctions when a party uses the Fifth Amendment privilege offensively, but the court must consider whether remedial steps could solve the issue.  The court may also impose sanctions when a party wrongfully invokes the Fifth Amendment.

In a recent Texas divorce case, the husband faced serious sanctions after raising the Fifth Amendment during his deposition.  In June 2015, the wife filed for divorce and the husband filed a counterpetition.  The wife alleged the husband had assaulted her and committed adultery.  She also alleged he hid community assets, wrote fraudulent checks to third parties and cashed them himself, and conveyed community property to his sister.  The husband alleged the wife also secreted assets and filed false charges against him for family violence assault.

When the wife’s attorney sent notice of the date of the husband’s deposition, his attorney responded it would be “futile” because the husband’s criminal attorney was likely to advise him to “plead the fifth” due to the pending criminal charges.  During deposition, the husband refused to answer many questions on the grounds his answer might incriminate him in the pending criminal case, including some that would not be covered by the Fifth Amendment privilege.  He repeatedly asserted his Fifth Amendment privilege regarding “anything that has to do with financials…”  He refused to answer questions regarding his income, assets, and a list of property.  He also refused to identify documents.  There was no record of either the wife’s or the husband’s attorney explaining to him why he could not invoke his Fifth Amendment privilege in response to many of the questions asked.

The wife moved for sanctions against the husband for improperly invoking the Fifth Amendment to block discovery.  She asked the court to strike his pleadings, enter default judgment, bar his claims for affirmative relief, and prohibit him from presenting evidence at trial and bar his opposition on the issues where he invoked the Fifth Amendment.

In the hearing, the husband’s attorney presented her letters to the wife’s attorney stating the husband had been advised to plead the Fifth Amendment.  The attorney argued he was not trying to avoid discovery, but was concerned the wife might bring additional criminal charges against him.

The trial court found the husband invoked the privilege to abuse the discovery process.  The trial court prohibited the husband from testifying in the final hearing and from introducing evidence on his affirmative request for relief.

The wife then moved for partial summary judgment.  The husband responded with an affidavit stating he was acquitted of the criminal charges and had not invoked the privilege to thwart discovery.  The court granted the wife’s motions to strike his petition and affidavit and for partial summary judgment.  The husband appealed.

The appeals court found the sanctions issued by the trial court were “death penalty sanctions.” A death penalty sanction is when one adjudicates the claim without allowing presentation of the merits.  Death penalty sanctions are only appropriate in severe cases where the “party’s conduct justifies a presumption that its claims or defenses lack merit.”  Although the trial court has broad discretion in issuing sanctions, sanctions must be just and in accordance with due process.  The Texas Supreme Court is only just when there is a direct relationship between the offensive conduct and the sanction.  Sanctions cannot be excessive.  Furthermore, sanctions should not be imposed on the party if the conduct was attributable solely to counsel.

The husband’s divorce attorney was present at his deposition.  She had warned the wife’s attorney that he had been instructed to invoke the Fifth Amendment privilege.  The husband invoked the privilege during questions that were not subject to the Fifth Amendment, but stated he was doing so on advice of counsel.  The appeals court found the trial court had not inquired into whether the party or his attorney was responsible for his belief he could raise the privilege.  Therefore, there was no evidence that the sanctions were imposed on the offender.

A trial court must consider whether lesser sanctions are appropriate before issuing death penalty sanctions.  In most cases, the trial court should actually try lesser sanctions before going so far as to strike pleadings.  If the court does not first try lesser sanctions, it must at least clearly explain on the record why lesser sanctions could not promote compliance.

The appeals court found that the wife had not sought to compel the answers to questions where the husband improperly raised the Fifth Amendment.  The husband was not told that his pleadings could be stricken and he could be prohibited from presenting evidence in defense of the wife’s petition.  Furthermore, there was no record the trial court had analyzed available sanctions and explained why the sanctions it imposed were appropriate.  The trial court here had not tested lesser sanctions or explained why they would be inappropriate.

The appeals court reversed the trial court’s judgment, deleted all sanctions against the husband, and remanded the case.

As seen in this case, a trial court cannot impose sanctions so severe they prevent a party from presenting a defense without trying lesser sanctions or documenting why lesser sanctions would not work.  Such serious sanctions in a divorce case can have significant consequences, especially as to property distribution.  If you are facing divorce, you need an experienced Texas divorce attorney fighting for you.  Contact McClure Law Group at 214.692.820 to discuss your case.

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Property possessed by either party at the time of a Texas divorce is presumed to be community property.  To show that property was instead separate, the presumption must be rebutted by clear and convincing evidence.  If the assets were not maintained separately from community assets, they must be traced back to separate property by showing the origin of the property.  Income earned during the marriage is also community property.

A wife recently challenged a court’s finding that a down payment made from her savings account was made with community funds.  After six years of marriage, the parties filed for divorce.  In the wife’s counter petition, she sought reimbursement to her separate estate for assets she alleged were spent for the benefit of the community estate.

At the hearing, the husband sought half the equity in the marital home and community funds he alleged the wife had deposited into her checking account and given to her adult child. The parties agreed on the value of the home and the amount of the down payment.  The husband admitted the down payment had come from the wife’s savings account, but argued that it came from community property funds that had been commingled into the wife’s savings account.  He testified that she deposited her paychecks into her checking account and transferred funds to the savings account.   He testified the savings account had $162,168.61 at the time of the marriage.  The bank records showed $282,847.69 was in the account before the withdrawal for the down payment.   The husband also testified he had given his wife cash to pay the utilities and half of the mortgage payment.

The husband also testified the wife had withdrawn nearly $300,000 of community funds from her checking account.  He testified she gave her daughter a $300,000 cashier’s check using those funds.  He testified his wife’s former attorney told him she gave the funds to her daughter when he requested an accounting of those funds.  The wife argued the husband was not entitled to a share of the income she earned during the marriage.

Although the wife was served with a subpoena for bank statements and other documentation related to the $300,000, she did not bring the documentation to the hearing.  She also testified that she answered the door when a process server tried to serve a subpoena on her daughter.  She testified she did not give her daughter the process server’s information and told her not to attend the hearing.  She admitted the funds were community property but stated she gave them to her daughter anyway.

In its final judgment, the trial court awarded the husband $68,752.66, representing his 50% of the community interest in the wife’s savings account that the court found was fraudulently removed.  The trial court also found the marital home was community property and ordered it to be put up for sale with the proceeds to be equally distributed between the parties.  The wife was given 15 days to pay the judgment or give the husband a promissory note and security agreement.

The wife did not comply with the order and the court subsequently entered a turnover order and appointed a receiver to sell her assets.  She was ordered to turn over various financial documents and “all checks, cash, securities” and other items constituting leviable, non-exempt property.  She did not comply with the turnover order either.  The receiver moved for enforcement by contempt.  The court ultimately held the wife in contempt.  The court approved the trial court’s final accounting, and the wife appealed.

The wife argued the court erred in not crediting the down payment to her.  Here, there was evidence the wife had deposited community funds into her savings account. When funds are commingled, there is a presumption the community funds are withdrawn first.  Because of this commingling, she would have to trace the funds back to the date of the marriage.  In this case, there was no evidence in the record that the wife had traced the funds to show their separate character.  The appeals court found she had not defeated the presumption that the down payment was made with community funds and affirmed.

As this case shows, funds are not necessarily separate property just because they are in a separate account. If community funds have been deposited into the account, the party must trace the separate funds to show that they were separate.  If you are facing a divorce, the experienced Texas divorce attorneys at McClure Law Group can assist you in identifying and tracing separate assets.  Call us at 214.692.8200.

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A spouse who improperly spends large amounts of community assets without the other spouse’s knowledge or consent may receive a smaller share of the remaining community estate during a Texas divorce.  A Texas appeals court recently considered whether a property division was just and right after the trial court found the husband had committed fraud on the estate by spending money on other women.The wife filed for divorce after learning her husband had been unfaithful.  The husband testified to having affairs for the past 30 years.  He took the other women on trips and shopping sprees, paid their rent and car payments, and hired some of them and gave some of them money for their own start-ups.  He paid for these things through his business accounts, company credit cards, and petty cash from his pharmacy.

The wife hired a CPA to provide an accounting of the husband’s businesses.  The CPA rendered an opinion that more than $7 million was either missing or spent in transactions that did not benefit the community estate.

The husband rejected the amount identified by the wife’s CPA, claiming a large portion of the amount identified did not exist. His expert opined that the wife’s accountant had made conclusions based on insufficient data.  The husband’s employee testified the husband never took petty cash.  She also stated some of the transactions identified by the plaintiff’s accountant were not fraudulent because they benefited either the business or the community estate.  The trial court found the husband was not a credible witness, spoliated evidence, and committed a fraud on the community of nearly $4 million.

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In Texas divorces, it is common for the parties to agree to a property division and ask the court to approve the agreement and include it in the decree.  Once the court does so, it generally may not modify or alter the property division included in the agreement.  It may, however, still divide property that was not divided in the agreement and decree.  It is therefore important for the parties to be sure the agreement to clearly divide everything, or they may have to go back to court to address something that was omitted.  This can be difficult in some cases, however. What happens, for example, when the agreement and decree divide the net amount of a bonus, but do not address pre-tax deductions that go to one of the parties?  A recent case addressed this issue.

The divorce decree incorporated the agreement between the parties, which included a detailed division of the marital estate based on the informal agreement the parties executed at a settlement conference.  The agreement stated the husband would receive 47% of the net amount of his 2013 year-end bonus and wife would get a 53% portion of the “net amount after taxes and deductions.”    The agreement also stated the wedding and engagement ring were the wife’s separate property.

The husband’s pay stub showed he received $460,000 for his 2013 bonus, but reflected two pre-tax deductions totaling $81,000.  The deductions included $75,000 for deferred annual bonus and $6,000 for personal savings account contribution. Taxes totaled $108,711.10 and the pay stub listed $270,228.90 as the “net pay” for the bonus.  The husband paid the wife 53% of the net pay amount.

The wife petitioned for enforcement of the property division.  She sought an order directing the husband to pay her 53% of the $81,000 that was deducted from the bonus.  She argued in the alternative that the court should treat the deductions as undivided assets and award her 53% of each.

The husband moved for partial summary judgment, arguing that the wife could not meet the elements of an enforcement action.  The court granted the motion as to the enforcement action.  The wife filed a second amended petition, seeking enforcement as to the pre-tax deductions, a claim to divide the pre-tax deductions as undivided assets, a breach of contract claim related to the husband’s failure to pay her a share of the pre-tax deductions, and a breach of contract claim regarding the ring.

The court ordered the husband to pay the wife 53% of the bonus after the federal income tax deduction.  It also awarded the wife any insurance funds for claims related to the ring.  The court also awarded the wife attorney fees. The husband appealed after his motion for a new trial was overruled.

The trial court found the pre-tax deductions were undivided assets.  The husband argued the original order for summary judgment barred relitigation of the decree’s terms.  The appeals court found the order did not dispose of the alternative claim that the pre-tax deductions were undivided assets.  The order therefore did not dispose of all of the claims in the case, and was therefore not a final judgment barring further litigation.

The husband also argued the trial court erred in finding the pre-tax deductions were undivided assets.  He argued they were excepted from distribution under the agreement and the decree.  The wife argued the agreement unambiguously did not distribute those funds, so they were undivided assets.

The appeals court found the agreement was not ambiguous.  It divided the “net amount” of the bonus, but did not divide deducted amounts.  Although a court may generally not amend, modify, alter, or change the division of property after it approves an agreement between the parties, it can divide property that was not disposed of in the agreement.

The husband also argued that the wife had not presented evidence supporting her claim of breach of the agreement related to the ring and that the trial court abused its discretion in awarding her any insurance proceeds related to the ring. The appeals  court found there was sufficient evidence to support the breach of contract claim.  The wife had testified she last saw the ring when she left the marital residence and traveled to California, and did not see it when she came back.  The husband was in the home while she was away.  The husband testified he had the ring appraised after the wife left the marital residence and the appraisal was admitted into evidence, including a photo.  The husband testified he had last seen the ring before his wife left and that the photograph included with the appraisal had been “a picture of a picture” that was taken for a previous appraisal.

The appeals court concluded that a reasonable factfinder could have found the husband had the ring at the time of the appraisal and after.  The appeals court also found the husband had failed to preserve his challenge regarding the award of insurance proceeds.

The appeals court did, however, reverse the award of attorney’s fees and remanded to the trial court to determine and delete any amounts based on work performed by non-attorneys.

If pre-tax deductions are not addressed in the property division, it may be possible for the spouse receiving a bonus to change deductions and structure the payment to lower the net payment and avoid giving the other spouse a share.  This case suggests that parties should consider potential deductions any time distribution of a net payment from an employer is considered.  If you are facing divorce, the experienced Texas divorce attorneys at McClure Law Group can help you through the process.  Call us at 214.692.8200 to discuss your case.

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In a Texas divorce, a premarital agreement is generally enforceable.  Although they are presumptively valid, they may not be enforceable if they are unconscionable or were not voluntarily signed.  There is no definition of “voluntary” in the Family Code, so courts have looked to the law governing enforcement of commercial contracts.  In determining if a premarital agreement was voluntarily signed, the court considers whether the party had advice of counsel, misrepresentations made in procuring the agreement, the amount of information provided, and whether any information was withheld.  Additionally, the court may consider evidence of duress or fraud in determining if the agreement was voluntary, but duress and fraud alone are not defenses to a premarital agreement.  A court recently considered whether a Texas premarital agreement was voluntary.

The couple signed a premarital agreement the day before they got married in Las Vegas.  The agreement set out the separate property of each of them and stated community property could not be acquired during the marriage.

The wife filed for divorce after ten years.  The trial court granted a partial summary judgment in favor of the husband on the wife’s claims for a Separate Property Agreement, including reimbursement, maintenance, and her challenge of the premarital agreement.  Following a trial, the court found the only community property accumulated during the marriage was a travel trailer.  It awarded the trailer to the wife.  The wife appealed, arguing the court had erred in granting the partial motion for summary judgment because there was a genuine issue of material fact as to whether she had voluntarily signed the agreement.

The husband argued the divorce was governed by the premarital agreement and that the agreement negated the wife’s claims for reimbursement and maintenance following the divorce.  He argued the wife had failed to provide evidence the agreement was unenforceable and that her testimony had established it was valid.  The wife had provided an affidavit stating she had not signed it voluntarily.

The wife testified that she had not been threatened with violence and was not intoxicated when she signed the agreement.  She stated she was represented by counsel, had made changes to the proposed agreement, and understood what she was signing.  She further stated that the husband had adequately disclosed his assets.

In her affidavit, she stated the couple had lived together prior to marriage.  She stated her husband had provided the majority of the financial support while she was responsible for the care of the home.  She stated she was marginally employed and could not have provided financially for herself and her children at the time she signed the agreement.  At her deposition, she testified her husband paid for her lawyer because she could not afford one.  She stated her husband would not have married her if she had not signed the agreement.

The appeals court found the wife’s affidavit was conclusory and insuffient to defeat traditional summary judgment.  An affidavit that does not provide underlying facts to support its conclusions is insufficient summary judgment evidence.  The appeals court also noted that under Texas law, there cannot be duress unless there is a threat to perform an act the threatening party does not have a legal right to do.

The appeals court noted that the husband did not have a legal duty to marry the wife.  There was no evidence that he had used extortive measures or improper demands.  There was no evidence she was not adequately represented by her attorney.  The appeals court found no error in the trial court granting partial summary judgment and affirmed.

The court here found insufficient evidence to support the wife’s claim that the premarital agreement had been involuntary.  This case shows that threats or fear that the other party will refuse the marriage without the agreement are insufficient to make the agreement involuntary.  The other party must threaten to do something they do not have a legal right to do.

If you are getting married and need a pre-marital agreement, or if you are facing a divorce, a skilled Texas family law attorney can help.  Our team of experienced attorneys can handle any family law matter.  Call McClure Law Group at 214.692.8200.

More Blog Posts:

Texas Court Finds Property Remained Separate Under Premarital Agreement

Interpreting Texas Premarital Agreements

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