Send this document to a colleague

Close
This Window

COURT OF APPEALS

EIGHTH DISTRICT OF TEXAS

EL PASO, TEXAS

CLAIRE STANARD PHILLIPS,

Appellant,

v.

TROY D. PHILLIPS,

Appellee.

§

§

§

§

§

§

No. 08-06-00171-CV

Appeal from

302nd District Court

of Dallas County, Texas

(TC # DF03-22213-U)

O P I N I O
N

Claire Stanard Phillips appeals from a final decree of divorce. While
she brings several issues for review, her primary complaint is the trial
court's decision to offset reimbursement claims against a $404,407
constructive fraud award for economic torts committed against the
community estate.

FACTUAL SUMMARY

Claire and Troy Phillips married on February 1, 2001. Each brought a
significant separate estate into the marriage. The couple separated in
November 2003 and Troy filed for divorce on December 29, 2003. Claire
answered and filed a counter-petition, alleging fault grounds. Her live
pleadings at trial sought a disproportionate division of the community
estate and she asserted claims for (1) constructive fraud, (2)
reimbursement, (3) economic contribution, and (4) attorneys' fees. She
also joined Troy's law firm -- Glast, Phillips & Murray (which we
refer to as GPM) -- and alleged theories of alter ego. Finally, she filed
a personal injury claim against Troy for assault.

Trial of this matter was bifurcated. During a pretrial hearing in
December 2004, the trial judge advised counsel that she intended only to
submit characterization issues to the jury, as all other contested issues
at that point in time were purely advisory. Claire filed amended pleadings
on April 20, 2005, and the jury trial began on May 16.
(1) Following a five day trial, the jury found that Troy had
committed constructive fraud against the community estate and that
Claire's one-half interest in the community had been short-changed in the
amount of $404,407. The jury found against Claire on the assault and
reimbursement claims, characterized two assets as Troy's separate
property, and determined that Claire should pay all of Troy's attorneys'
fees in the total amount of $112,357. Issues related to economic
contribution and alter ego were not submitted.

The trial court then conducted a two-day
bench trial in September 2005. Claire's emergency motion for continuance
was denied, and she absented herself from trial on September 8. She was
present to testify on September 9. The trial judge considered additional
claims for reimbursement which had not been submitted to the jury,
additional characterization issues, offsets and credits, and the ultimate
division of the community estate. Claire's counsel
(2) did not object when Troy introduced evidence pertaining to
his claims for offset and introduced additional evidence pertaining to her
reimbursement claims. The trial court determined that Troy had paid from
his separate estate (1) $38,000 to Claire's separate estate; and (2)
$128,825 to the community estate. The court also found that the community
had expended $35,977 for the benefit of Claire's separate estate.
Additionally, Troy had, since the jury trial, made payments for Claire
from his separate property in the amount of $9,950.34. Claire had also
made unauthorized charges to Troy's credit cards in the amount of
$9,894.80.

In the final decree, the trial court
accepted the jury's findings and rendered judgment that Troy committed
fraud on the community estate and that he owed $404,407 on this claim,
subject to other awards and offsets. The trial court ordered that the
parties' home (the Degas residence) would be sold and that each spouse
would be paid $125,000 representing separate property contributions
utilized to purchase the residence. The monies owed to Claire would be
paid from the sale proceeds. Findings of fact and conclusions of law were
filed. Claire sought additional and amended findings, but the trial court
did not act on her request, and no error has been assigned in that
regard.

Claire brings five issues for review,
each with a multitude of sub-issues. Her statement of facts encompasses
eighteen pages and seventeen alphabetically identified complaints, two of
which are not included within her issues for review, nor are they briefed.
First, the pleadings, the evidence, and all of counsels' arguments
relating to the assault specified that the alleged incident occurred on
August 4, 2004. But the jury question, prepared and tendered by Claire's
counsel, contained a typographical error such that the question inquired
whether an assault occurred on August 4, 2005. The Final Decree of
Divorce, in reciting the jury's findings, used the proper date of August
4, 2004. Claire has not assigned error or briefed the issue, but asks her
in prayer for relief that we correct the decree to reflect that "no
assault occurred on August 4, 2005," which, of course, post-dates the
trial. This issue has not been preserved for our review. Moreover, the
error is her own.

Second, she complains that her emergency
motion for continuance was denied because the trial court believed an
earlier continuance which had delayed the bench trial was a direct result
of Claire leaving town without notice. Claire insists this was inaccurate
information and she filed a motion to correct the error in the record. The
trial court denied this request as well. As she has not assigned error or
briefed the issue, we decline to consider it. We turn now to those issues
which have been briefed.

CREDITS AGAINST THE CONSTRUCTIVE FRAUD
JUDGMENT

In her first issue, Claire contends that
the trial court erred in reducing the constructive fraud judgment by
$141,085, representing Troy's offset and reimbursement claims. She
complains that because Troy failed to submit jury questions, the court
could not make fact findings in his favor on claims urged during the bench
trial, nor could it offset those claims against the constructive fraud
judgment. Alternatively, she argues that the jury found Troy was not
entitled to credit for his reimbursement claims. Claire additionally
argues that Troy is judicially estopped from asserting his reimbursement
claims because he judicially admitted that he was not seeking
reimbursement. Finally, she maintains that Troy was allowed reimbursement
for community living expenses.

The Nature of Reimbursement

The rule of reimbursement is purely an
equitable one. Vallone v. Vallone, 644 S.W.2d 455, 458 (Tex.
1982); Lucy v. Lucy, 162 S.W.3d 770, 776 (Tex.App.--El Paso 2005,
no pet.). It is not an interest in property or an enforceable debt,
per se, but an equitable right which arises upon dissolution of
the marriage through death, divorce, or annulment. Lucy, 162
S.W.3d at 776. An equitable right of reimbursement arises when the funds
or assets of one estate are used to benefit and enhance another estate
without itself receiving some benefit. Id. A claim for
reimbursement includes payment by one marital estate of the unsecured
liabilities of another marital estate. Tex.Fam.Code Ann. §
3.408(b)(1)(Vernon Supp. 2008). The trial court resolves a claim for
reimbursement by using equitable principles, including the principle that
claims for reimbursement may be offset if the court determines it to be
appropriate. Tex.Fam.Code Ann. § 3.408(c). Benefits for the use and
enjoyment of property may be offset against a claim for reimbursement for
expenditures to benefit a marital estate on property that does not involve
a claim for economic contribution to the property. Tex.Fam.Code Ann. §
3.408(d). The party seeking reimbursement has the burden of pleading and
proving that the expenditures and improvements were made and that they are
reimbursable. Vallone, 644 S.W.2d at 459.

Evidence Related to Reimbursement Issues

By their pleadings, both parties sought
reimbursement. While Claire offered evidence in support of her claims for
reimbursement and submitted jury questions relevant to those claims, Troy
took a different approach. He offered evidence in support of his
reimbursement claims, but he informed the jury throughout trial --
beginning in opening statement -- that he did not want Claire to reimburse
him for these expenditures. Instead, he wanted a "credit" against any
reimbursement awarded Claire by the jury. In his opening statement, Troy's
attorney stated:

You're going to see exhibits that this
man had property before he married this lady, and he spent more than
$200,000 of those funds to help her and the community. We're not asking
for any of that back. It's money he spent in his marriage. We're accepting
that fact. It's gone.

* * * * * * * *

[W]e're not trying to get back everything
we put into this marriage.

During Troy's testimony, counsel
introduced Petitioner's Exhibit 44, which sets forth the money expended
from Troy's separate estate to Claire's separate estate ($38,000), money
expended from Troy's separate estate to the community ($128,825), and
money expended from the community to Claire's separate estate
($35,977.01). These expenditures total $202,802.01. When asked whether he
wanted to recoup any of the money his separate estate paid to the
community, he answered, "No." Likewise, counsel questioned him about the
community expenditures for Claire's separate estate:

[Mr. Wilson]: Mr. Phillips, with respect
to this total that you list here as from community to her separate
property, are you asking that Mrs. Phillips be required to repay any of
that?

[Troy]: I don't want anything
from Claire. I don't want to have to pay her
anything. I don't care. Just -- I want out. Just let me out.
[Emphasis added].

After continuing to review the
expenditures in detail, counsel asked one more question regarding Troy's
desire for reimbursement:

[Mr. Wilson]: Are you asking for any of
this --

[Troy]: No.

[Mr. Wilson]: -- this money from your
separate or community to be paid back to you?

[Troy]: No.

Claire did not dispute that Troy had made
the payments shown in Petitioner's Exhibit 44 except for a $25,000 payment
from Troy's separate estate used to open a joint account, and she did not
know the source of two other payments shown on the exhibit. Significantly,
she admitted that Troy was not seeking reimbursement for these
expenditures, but that he wanted an offset.

The court's charge submitted five jury
questions regarding Claire's reimbursement claims. Questions Four through
Seven asked what amount of money Troy's separate estate owed to the
community estate for:

(Question 4) credit card payments made
for corporate items;

(Question 5) gambling debts;

(Question 6) money expended on Troy's
separate property, the Portsmouth residence; (Question 7) dues and
expenses at Preston Trail Country Club.

Finally, Jury Question Eight asked the
following:

State in Dollars, if any, the amount of
the offset against such reimbursement claims, if any, proved to
benefit-

1. Troy D. Phillips' separate
estate

2. The community estate.

The charge correctly defined offset as
that term applies to a claim for reimbursement for funds expended by an
estate to pay debts, taxes, interest, or insurance for the property of
another estate. Offset is measured by "the value of any related benefit
received by the paying estate, . . . income received by the
paying estate from the property, and any reduction in the amount of any
income tax obligation of the paying estate by virtue of the paying
estate's claiming tax-deductible items relating to the property, such as
depreciation, interest, taxes, maintenance, and other deductible
payments." [Emphasis added]. The charge also defined offset as that term
applies to a claim for reimbursement of funds expended by an estate for
improvements to real property of another estate, i.e., the Portsmouth
residence. In that instance, offset is measured by "the value of any
related benefit received by the paying estate, such as the fair value of
the use of the property by the paying estate, income received by the
paying estate from the property, and any reduction in the amount of any
income tax obligation of the paying estate." See Tex.Fam.Code
Ann. §3.408(d).

During final argument, Troy's attorney
stated:

In the charge you're, in fact, asked
first in Question Number 8, Should there be an offset against any claims
for reimbursement? Remember that Mr. Phillips said, I'm not asking you to
make her pay me back this money. That was my money before marriage. I
spent it on us. And you know what? He's not asking for it
back.

He put money in her IRA. He's not asking
for it back. He put money in the community checking account. He's not
asking for it back.

She took money out of the checking
account, closed it out, in fact, and put it in her special separate
account. We're not asking for it back, but we are saying it's a
credit. If we're going to play this ridiculous game of reimburse me for
things then on Question Number 8 we should get reimbursed -- get credit
for this amount.

We're not asking for this money.
You're not going to give us this money. You're just going to say we get
credit for what we've paid. That's what goes in Number 8. So there will be
two boxes there, one for the community, which is Number 1, and then one
for Mr. Phillips which is the remaining amounts. [Emphasis
added].

Again, we're not asking that Claire
Phillips be required to pay us a dime, but we don't want to be mistreated
going in the other direction.

What Does Question 8 Mean?

Troy argues that Question Eight relates
only to an offset against Claire's reimbursement claims and that we must
presume the jury followed the law as set forth in the charge. As we have
noted, the jury was asked to "[s]tate in Dollars, if any, the amount of
the offset against such reimbursement claims, if any, proved to benefit"
(1) Troy D. Phillips' separate estate and/or (2) the community estate. The
issue is whether the phrase "proved to benefit" modifies "offset" or
"reimbursement claims." If the phrase modifies "reimbursement claims," the
jury was asked to determine the amount of the offset against those
reimbursement claims which benefitted Troy's separate estate. Under this
interpretation, the first part of the question pertained to Claire's
reimbursement claims alleging that an expenditure of community funds
benefitted Troy's separate estate. The jury answered zero. Similarly,
under this interpretation, the jury was asked in the second part of the
question to determine the amount of the offset against those reimbursement
claims which benefitted the community estate. Claire did not have any
reimbursement claims against the community estate. But Troy presented
evidence (Petitioner's Exhibit 44) that his separate estate had expended
$128,825 to benefit the community. By answering this question zero, the
jury found there was no offset against Troy's reimbursement claims at
least with respect to the community estate. Under this interpretation,
Question 8 does not address Troy's reimbursement claims based on an
expenditure by his separate estate for Claire's separate estate in the
amount of $38,000, or his reimbursement claims based on an expenditure by
the community which benefitted Claire's separate estate
($35,977.01).

Question 8 is subject to another
interpretation if the phrase "proved to benefit" modifies "offset." Under
this interpretation, Question 8 focused on the benefit received by the
paying estate which is consistent with the definition of offset provided
in the court's charge. All four of Claire's reimbursement claims pertained
to an expenditure of community funds to benefit Troy's separate estate. In
other words, she sought to have Troy's separate estate reimburse the
community estate. In that instance, Troy would be entitled to offset
against those reimbursement claims the value of any benefit received by
the paying estate, namely, the community estate. Consistent with this
definition of offset, the second part of Question 8 asked the jury to
determine the value of the benefit which the community estate (the paying
estate), received from the expenditures. Under this interpretation,
Question 8 also asked the jury to determine what benefit Troy's separate
estate received from the expenditures. The bulk of Troy's reimbursement
claims related to expenditures by his separate estate to benefit Claire's
separate estate ($38,000) and the community estate ($128,825). Thus,
Claire would be entitled to offset against these reimbursement claims the
value of the benefit received by Troy's separate estate. Consistent with
this definition of offset, Question 8 also asked the jury to determine the
value of the benefit received by Troy's separate estate.

We believe the purpose of Question 8 was
to determine the amount of the offset to be applied against all of
Claire's reimbursement claims and the offset against Troy's separate
estate's reimbursement claims. This interpretation is more consistent with
the trial court's instructions and definitions. Thus, we conclude that the
phrase "proved to benefit" modified "offset." The jury answered zero to
Claire's reimbursement claims in Questions 4 through 7 and, by answering
zero to both parts of Question 8, determined that neither party was
entitled to an offset against reimbursement claims.

During the subsequent bench trial, Troy
sought an offset of $141,086.14 against the $404,407 which the jury
awarded for his constructive fraud:

1. $64,412.50 -- one-half of $128,825
expended from Troy's separate estate to the community;

2. $17,988.50 -- one-half of $35,977.01
expended from the community to Claire's separate estate;

3. $38,000 -- money expended from Troy's
separate estate to Claire's separate estate;

4. $9,950.34 -- post-jury verdict
payments from community estate for community liabilities;

5. $840 -- medical reimbursement check
payable to Troy but endorsed by Claire; and

6. $9,894.80 -- unauthorized charges on
credit cards by Claire.

The trial court granted Troy an offset in
the amount of $141,085.

Necessity of Obtaining Jury Findings

Claire complains that Troy waived his
reimbursement claims because he did not obtain jury findings on them. Rule
278 of the Texas Rules of Civil Procedure requires the trial court to
submit to the jury those instructions and definitions raised by the
written pleadings and the evidence as are necessary to enable the jury to
render a verdict. Tex.R.Civ.P. 278; Elbaor v. Smith, 845 S.W.2d
240, 243 (Tex. 1992). On appeal, all independent grounds of recovery or of
defense not conclusively established under the evidence and no element of
which is submitted or requested are waived. Tex.R.Civ.P. 279; see T.O.
Stanley Boot Co., Inc. v. Bank of El Paso, 847 S.W.2d 218, 222-23
(Tex. 1992).

Troy doesn't contend that he conclusively
established his reimbursement claims, nor does the record support such a
conclusion. It is undisputed that Troy did not submit jury questions
related to his reimbursement claims. While the trial court submitted the
offset question in Question 8, offset is not an element of a reimbursement
claim. Nevertheless, Claire did not object when Troy presented his
reimbursement evidence at the non-jury portion of the trial.
(3) Because we conclude that the reimbursement claims were tried
by consent, the court did not err by offsetting the constructive fraud
judgment by $141,085.

Judicial Estoppel and Judicial Admission

Alternatively, Claire maintains that the
doctrines of judicial estoppel and judicial admission bar Troy's claims
for offset. The doctrine of judicial estoppel "precludes a party from
adopting a position inconsistent with one that it maintained successfully
in an earlier proceeding." Pleasant Glade Assembly of God v. Schubert,
264 S.W.3d 1, 6 (Tex. 2008), citing 2 Roy W. McDonald &
Elaine G. Carlson, Texas Civil Practice § 9.51 at 576 (2d ed.2003).
Contradictory positions taken in the same proceeding may raise issues of
judicial admission but do not invoke the doctrine of judicial estoppel.
Id., citing Galley v. Apollo Associated Servs., Ltd., 177 S.W.3d
523, 529 (Tex.App.--Houston [1st Dist.] 2005, no pet.)("Judicial estoppel
does not apply to contradictory positions taken in the same proceeding").
While this trial was bifurcated, it was one proceeding.

We also disagree that Troy's testimony
during the jury trial was a judicial admission. A party's testimonial
declarations that are contrary to his position are considered
"quasi-admissions." Duncan v. F-Star Management, L.L.C., ----
S.W.3d ----, 2008 WL 3872869 (Tex.App.--El Paso Aug. 21, 2008) at *6,
citing Mendoza v. Fidelity & Guar. Ins. Underwriters, Inc.,
606 S.W.2d 692, 694 (Tex. 1980). Quasi-admissions are distinct from true
judicial admissions, which are formal waivers of proof usually found in
pleadings or the stipulations of the parties. Id. A
quasi-admission will be treated as a judicial admission only if: (1) the
declaration was made during the course of a judicial proceeding; (2) the
statement is contrary to an essential fact embraced in the declarant's
theory of recovery or defense; (3) the statement is deliberate, clear, and
unequivocal; (4) giving conclusive effect to the declaration will be
consistent with public policy; and (5) the statement is not destructive of
the opposing party's theory of recovery. Mendoza, 606 S.W.2d at
694.

First, Troy's statements during the bench
trial were consistent with the position he took before the jury. He didn't
want Claire to "pay" him, but he certainly wanted an offset against
whatever relief she obtained. In Jury Question 8, he sought an offset
against the reimbursement claims Claire submitted. Because Claire did not
recover on her claims of reimbursement, Troy received no offset to those
claims. Then during the bench trial, Troy sought an offset against the
constructive fraud judgment.

Second, even a judicial admission is
waived when evidence contrary to the purported admission is heard without
objection on that ground. Duncan, 2008 WL 3872869 at *6,
citing Field v. AIM Mgmt. Group, Inc., 845 S.W.2d 469,
473 (Tex.App.--Houston [14th Dist.] 1993, no writ); Indus. Disposal
Supply Co., Inc. v. Perryman Bros. Trash Serv., 664 S.W.2d 756, 764
(Tex.App.--San Antonio 1983, writ ref'd n.r.e.). Claire's counsel lodged
no objection.

Nature of the Offsets

Next, Claire insists that Troy was
compensated for separate monies used to pay community living expenses in
violation of the Texas Family Code and Pelzig v. Berkebile, 931
S.W.2d 398, 400 (Tex.App.--Corpus Christi 1996, no writ). Troy responds
that he established by his testimony and by Petitioner's Exhibit 44 that
the funds for which he sought credits against the constructive fraud
judgment had not been expended for living expenses. He claims that while
Claire testified to her version of the purpose of the payments, the trial
court was free to accept Troy's accounting.

Petitioner's Exhibit 44 contains forty
pages of bank records, cancelled checks, and charts. It is divided into
three categories: contributions from the community estate to Claire's
separate estate ($35,997.01); contributions from Troy's separate estate to
Claire's separate estate ($38,000); and contributions from Troy's separate
estate to the community estate ($128,825). Although Claire challenges the
propriety of the total offsets against the constructive fraud judgment,
she does not contend that the monies in categories one and two were not
paid. Her arguments address category three. Here is Troy's explanation
which was offered during the jury trial:

[Mr. Wilson] Let me hand you what I have
marked as Petitioner's Exhibit 44. . . . Can you tell me what that is,
sir?

[Troy] It is a schedule of -- prepared
with backup of checks and other evidence supporting the transaction of
money that had gone -- it's in three categories. Category 1 is from my
community -- from our community to Claire's separate, from my separate to
Claire's separate and from my separate to the community.

* * * * * * * *

[Exhibit Admitted]

Q: Mr. Phillips, go with me to the third
column, the third grouping, from Troy's straight to the community. Is this
a specific item-by-item listing of the monies that came from your separate
property funds, that $500,000 we talked about, that went into the
community that you gave to your marriage?

A: Yes.

Q: Now, I notice there are -- it says
$100,000 Gateway joint, and then there's parentheses below
that?

A: Yes.

Q: What is that?

A: The $100,000 was my separate property
that went into the joint account. Our tax bill for the preceding year,
$67,000, came out of it. I deducted the amount that went to the IRS, so
that $67,000 is not included in the total.

Q: So the numbers in the parentheses are
not included in the total?

A: They're subtracted from -- yeah,
they're subtracted from.

Q: So the $128,825 is the net that you
were able to trace from your separate estate just as gifts to the
community?
(4)

A: $128,825 went from my separate
property into the community to be used by the community.

Q: Are you asking for any of that money
back?

A: No.

During the bench trial, Petitioner's
Exhibit 44 was revisited. Troy then offered Petitioner's Exhibit 91, which
was a schedule of payments he had made on Claire's behalf following the
conclusion of the jury trial. He testified that the total payment was
$9,950.34 and that the advances were mostly "house" related. Exhibit 92
reflected a check issued by the law firm's insurance carrier payable to
Troy in the amount of $840. The check was mailed to the Degas home,
endorsed by Claire, and deposited into her personal bank account. Exhibit
93 included three credit card statements from MBNA issued to Troy. Troy
testified there were no other signatories to the account and Claire was
not authorized to use the card. Nevertheless, she charged $9,894.80 on the
account. Troy sought offsets based on all of these exhibits in the total
amount of $141,085.64, and the trial court granted relief in the amount of
$141,085. When Claire testified, she professed no knowledge of most of the
transfers. With regard to one of them, she claimed Troy had transferred
$6,000 to pay credit card bills. That was the extent of her testimony. The
trial court could properly exercise her discretion as the fact finder to
believe Troy and disbelieve Claire. For all of these reasons, we overrule
Issue One.

ATTORNEYS' FEES

In Issue Two, Claire challenges the fee
award on six grounds: (1) there are no pleadings supporting a fee award to
Charles Wilson; (2) the questions on attorneys' fees should not have been
submitted and are immaterial because they are purely advisory; (3) the
evidence is legally insufficient to prove that the attorneys' fees of
Thomas Raggio and Charles Wilson were reasonable and necessary; (4) there
was a double-recovery of attorneys' fees because the attorneys had already
been paid from community funds; (5) Troy was not the prevailing party; and
(6) Troy's counsel made an incurable jury argument on the fee
issue.

Pleadings

A judgment must conform to the pleadings
and proof, and a party may not be granted relief in the absence of
pleadings to support it. Stoner v. Thompson, 578 S.W.2d 679, 682,
683-84 (Tex. 1979); Marrs and Smith Partnership v. D.K. Boyd Oil and
Gas Co., Inc., 223 S.W.3d 1, 18 (Tex.App.--El Paso 2005, pet.
denied). When issues not raised by the pleadings are tried by consent,
they must be treated in all respects as if they had been raised in the
pleadings. Tex.R.Civ.P. 67; Gutierrez v. Gutierrez, 86 S.W.3d
721, 729 (Tex.App.--El Paso 2002, no pet.). This rule is limited to those
exceptional cases where it clearly appears from the record as a whole that
the parties tried an unpled issue by consent. Gutierrez, 86
S.W.3d at 729. It is not intended to establish a general rule of practice;
it should be applied with care, and never in a doubtful situation.
Marrs and Smith Partnership, 223 S.W.3d at 18. Trial by consent
"applies only where it appears from the record that the issue was actually
tried, although not pleaded." Id., quoting Johnston v. McKinney
American, Inc., 9 S.W.3d 271, 281 (Tex.App.--Houston [14th Dist.]
1999, pet. denied). To determine whether the issue was tried by consent,
the court must examine the record not for evidence of the issue, but
rather for evidence of trial of the issue. Marrs and Smith
Partnership, 223 S.W.3d at 18.

Claire did not object to Wilson's
testimony about his fees, nor did she object to submission of the jury
issue. Accordingly, the issue was tried by consent. Tex.R.Civ.P.
67.

Charge Error

Claire also maintains that the trial
court should not have submitted Questions 12 and 13 because the jury's
answers were merely advisory, and thus immaterial.
(5) Troy counters that Claire waived her complaint because she
failed to object to their submission. We agree. A party objecting to a
charge must point out distinctly the objectionable matter and the ground
of the objection. Tex.R.Civ.P. 274. See also Tex.R.App.P.
33.1(a). Having failed to object at trial, Claire has waived her complaint
of charge error.

Legal Sufficiency

The jury found that Claire should pay
Troy's reasonable and necessary attorney's fees in the amount of $62,463
for Thomas Raggio and $50,074 for Charles Wilson. A court may apportion
attorney's fees in a divorce action as part of a just and right division
of property. Sandone v. Miller-Sandone, 116 S.W.3d 204, 208
(Tex.App.--El Paso 2003, no pet.). The reasonableness of the fee is a
question of fact and must be supported by the evidence. Id.
Expert testimony as to the reasonableness of the attorneys' fees is
required to support an award of attorney's fees. Cantu v. Moore,
90 S.W.3d 821, 826 (Tex.App.--San Antonio 2002, pet. denied); Lesikar
v. Rappeport, 33 S.W.3d 282, 308 (Tex.App.--Texarkana 2000, pet.
denied).

A "no evidence" or legal insufficiency
point is a question of law which challenges the legal sufficiency of the
evidence to support a particular fact finding. Serrano v. Union
Planters Bank, N.A., 162 S.W.3d 576, 579 (Tex.App.--El Paso 2004,
pet. denied). There are two separate "no evidence" claims. Id.
When the party having the burden of proof suffers an unfavorable finding,
the point of error challenging the legal sufficiency of the evidence
should be that the fact or issue was established as "a matter of law."
Id. When the party without the burden of proof suffers an
unfavorable finding, the challenge on appeal is one of "no evidence to
support the finding." Id.; In re Estate of Livingston,
999 S.W.2d 874, 879 (Tex.App.--El Paso 1999, no pet.). In this case, Troy
had the burden to prove the reasonableness and necessity of his attorney's
fees.

An appellate court will sustain a legal
sufficiency or "no-evidence" challenge if the record shows: (1) the
complete absence of a vital fact, (2) the court is barred by rules of law
or evidence from giving weight to the only evidence offered to prove a
vital fact, (3) the evidence offered to prove a vital fact is no more than
a scintilla, or (4) the evidence establishes conclusively the opposite of
the vital fact. City of Keller v. Wilson, 168 S.W.3d 802, 810
(Tex. 2005); El Paso Independent School District v. Pabon, 214
S.W.3d 37, 41 (Tex.App.--El Paso 2006, no pet.). Claire argues that there
is no evidence of the reasonableness and necessity of the attorney's fees.
This contention falls under the first or third circumstances. In reviewing
Claire's sufficiency challenge falling under the first category, we are
precluded from automatically disregarding contrary evidence. See City
of Keller, 168 S.W.3d at 810-11 (stating that contrary evidence may
not be disregarded in sufficiency reviews under the first, second, and
fourth categories).

In conducting our review, we consider the
evidence in the light most favorable to the verdict and indulge every
reasonable inference that would support it. City of Keller, 168
S.W.3d at 822. Even if evidence is undisputed, it is the province of the
trier of fact to draw from it whatever inferences it wishes so long as
more than one inference is possible. Id. at 821. But if the
evidence allows only one inference, neither the trier of fact nor the
reviewing court may disregard it. Id. We are also mindful that
the trier of fact is the sole judge of the credibility of the witnesses
and the weight to give their testimony. Id. at 819. When there is
conflicting evidence, it is the province of the trier of fact to resolve
such conflicts. Id. at 820. In every circumstance in which a
reasonable trier of fact could resolve conflicting evidence either way,
the reviewing court must presume it did so in favor of the prevailing
party, and disregard the conflicting evidence in its sufficiency review.
Id. at 821. If the evidence at trial would enable reasonable and
fair-minded people to differ in their conclusions, then the trier of fact
must be allowed to do so. Id. at 822. So long as the evidence
falls within this zone of reasonable disagreement, we may not substitute
our judgment for that of the trier-of-fact. Id. The ultimate test
for legal sufficiency is whether the evidence at trial would enable
reasonable and fair-minded people to reach the verdict under review.
Id. at 827.

The trial court admitted Petitioner's
Exhibit 67, which summarizes the legal fees and expenses incurred by Troy
Phillips in connection with the divorce case and a criminal case brought
against him by Claire in connection with her assault accusation. The
exhibit summarized the legal fees and expenses by date and by attorney. It
reflected that the legal fees, excluding expenses, of the Law Offices of
Raggio & Raggio totaled $71,848.75 for the time period between
February 17, 2004 and April 19, 2005; the legal fees of McColl &
McCullough totaled $15,000 for the time period between October 19, 2004
and February 28, 2005; and the legal fees of Charles Wilson between
January 2005 and April 29, 2005 totaled of $25,365.00. No one from Raggio
& Raggio testified. Respondent's Exhibit 108, offered into evidence by
Claire's attorneys, included copies of the billing statements sent by
Raggio & Raggio. This exhibit reflected the date on which legal
services were rendered by Thomas Raggio but the description of the
services rendered, the hourly rate, and the number of hours billed, had
been redacted.
(6) However, these statements do reveal the amount of fees and
costs incurred.

Wilson testified about his experience and
expertise and stated that he charged an hourly rate of $285 which he
believed to be less than what is charged by most board certified
practitioners in Dallas. He opined that "[t]he charges on Exhibit 67are, I
believe, reasonable and necessary charges for representing Mr. Phillips in
this ongoing litigation."
(7) In addition to the fees reflected in Petitioner's Exhibit
67, Wilson had another 125 hours in trial preparation resulting in
additional fees of $35,824,
(8) and Wilson anticipated billing another fifty hours for the
last two days of trial and post-trial matters resulting in additional fees
of $14,250. There is no evidence in the record of the hourly rate charged
by Raggio & Raggio or the number of hours billed by that firm for
representation of Troy in the divorce action. Nevertheless, Wilson
testified that "all of these fees are reasonable and necessary in
representing Mr. Phillips." He added that spending $175,000 in handling
the divorce case was "ridiculous" but necessary under the
circumstances.

The jury's determination that the
attorneys' fees were reasonable and necessary is supported by legally
sufficient evidence. We are guided in this analysis by decisions from the
Dallas Court of Appeals. The Supreme Court of Texas entered a docket
equalization order transferring this appeal to us from the Fifth Court of
Appeals. See Tex.Gov't Code Ann . §73.001 (Vernon 2005). By
virtue of recent amendments to the Texas Rules of Appellate Procedure, we
are now required to apply the precedent of the transferring court on any
relevant issue. See Tex.R.App.P. 41.3.

In In re M.A.N.M., 231 S.W.3d
562 (Tex.App.--Dallas 2007, no pet.), the appellant complained that the
trial court had erred in finding that the appellee's attorney's fees were
reasonable and necessary, because the "proper legal basis for establishing
such [was] wholly missing from the record." Id. at 567. In
affirming the judgment, the court of appeals emphasized that the trial
court has broad discretion in deciding the award of attorney's fees in
family law cases. Id. While there should be evidence of the time
spent by the attorney on the case, the nature of the preparation, the
complexity of the case, the experience of the attorney, and the prevailing
hourly rates, "evidence on each of these factors is not necessary to
determine the amount of an attorney's fee award." Id., citing Sandles
v. Howerton, 163 S.W.3d 829, 838 (Tex.App.--Dallas 2005, no pet.).
Moreover, the court can consider the entire record and the common
knowledge of the lawyers and judges. In re M.A.N.M., 231 S.W.3d
at 567, citing Keith v. Keith, 221 S.W.3d 156, 169
(Tex.App.--Houston [1st Dist.] 2006, no pet). Analogous to the case before
us, the attorney there testified that the appellee had taken positions
during discovery that had contributed to the amount of time spent on the
case. Id. This passage is directly relevant to the issue we must
address here:

There was no testimony about Niebes's
attorney's hourly rate or the number of hours he spent on the case.
However, there is no rigid requirement that there must be evidence on both
these facts to make a determination of attorney's fees. Sandles,
163 S.W.3d at 839, Keith, 221 S.W.3d at 170 (no requirement
attorney must state exact dollar amount an number of hours necessary to
appeal). Rather Niebes's counsel testified as to the total fees incurred
and that the fees were reasonable and necessary.

In re M.A.N.M., 231 S.W.3d at
567-68. We thus conclude that the evidence is legally sufficient to
support the full fee award. Claire has not raised a factual sufficiency
challenge.

Double Recovery

Claire next argues there is a
double-recovery of attorneys fees because the attorneys fees had already
been paid from community funds. The award of attorney's fees in a divorce
action is treated as part of the fair and just division of the marital
estate. Grossnickle v. Grossnickle, 935 S.W.2d 830, 846-47
(Tex.App.--Texarkana 1996, pet. denied). Prior payments out of the
community estate to attorneys in the divorce action are taken into account
in the division of the marital estate. Id. at 847, citing
Eikenhorst v. Eikenhorst, 746 S.W.2d 882, 890 (Tex.App.--Houston [1st
Dist.] 1988, no writ). The record before us does not reflect that the
trial court either did or did not take into consideration that a large
portion of Troy's attorney's fees had been paid with community funds.
Further, the divorce decree recited that the trial court made a just and
right division of the parties' marital estate, having due regard for the
rights of each party and incorporating the jury verdict. Claire's
assertion that Troy received a double recovery is without merit. See
Eikenhorst, 746 S.W.2d at 890 (where record did not reflect that
trial court failed to take payment of attorney's fees by husband into
account in making a just and right division of the marital estate, the
trial court did not abuse its discretion by making the attorney's fee
award to husband).

Prevailing Party

Claire next maintains that the trial
court erred in awarding attorney's fees to Troy because she was the
prevailing party on her constructive fraud claim. As we have noted, the
award of attorney's fees in a divorce action is part of the fair and just
division of the marital estate. Consequently, the trial court is not
restricted to awarding them to the prevailing party. Grossnickle,
935 S.W.2d at 846. This argument is without merit.

Jury Argument

Finally, Claire argues that Troy's
attorney made an incurable jury argument on the attorney's fees issue by
stating that Troy had incurred a large amount of attorney's fees because
Claire had insisted on her right to a jury trial. She cites to a portion
of the record where Troy testified, without objection, that he did not
want a jury trial and having a jury trial dramatically increased the costs
of litigation. Claire also directs our attention to a portion of the
record where attorney Wilson testified, without objection, that
$175,000 in attorneys' fees was ridiculous but necessary because Claire
had requested a jury trial which took substantially longer than a bench
trial. By failing to object to Troy's and Wilson's testimony, Claire
waived any complaint on appeal. See Tex.R.App.P. 33.1;
Tex.R.Evid. 103(a)(1). Wilson stated in his closing argument that having a
jury trial was a misuse of resources but it was Claire's right to insist
on a jury trial. Claire did not object to this argument. Generally, to
obtain reversal on the basis of improper jury argument, an appellant must
prove (1) an error (2) that was not invited or provoked, (3) that was
preserved by the proper trial predicate, such as an objection, a motion to
instruct, or a motion for mistrial, and (4) was not curable by an
instruction, a prompt withdrawal of the statement, or a reprimand by the
judge. Standard Fire Ins. Co. v. Reese, 584 S.W.2d 835, 839 (Tex.
1979). Having failed to object, Claire failed to preserve error. Issue Two
is overruled in its entirety.

CHARACTERIZATION OF PROPERTY

In Issue Three, Claire contends that Troy
did not prove by clear and convincing evidence that the $100,000 earnest
money check tendered for the purchase of the Sperling
(9) Building, the Dallas City Bank Certificate of Deposit, and
the Old Grove real estate investment were his separate property.

Standard of Review

All property on hand at the dissolution
of marriage is presumed to be community property. Long v. Long,
234 S.W.3d 34, 37 (Tex.App.--El Paso 2007, pet. denied); Tex.Fam.Code Ann.
§ 3.003(a) (Vernon 2006). It is a rebuttable presumption, requiring a
spouse claiming assets as separate property to establish their separate
character by clear and convincing evidence. Long, 234 S.W.3d at
37; Tex.Fam.Code Ann. § 3.003(b). Property owned before marriage, or
acquired during marriage by gift, devise, or descent, is separate
property. Long, 234 S.W.3d at 37; Tex.Fam.Code Ann. § 3.002.
Where an asset is purchased during marriage with monies traceable to a
spouse's separate estate, the asset may appropriately be characterized as
separate property. Long, 234 S.W.3d at 37.

We set forth the standard for traditional
legal sufficiency review in the context of Issue Two. But traditional
sufficiency review is heightened when the burden of proof is by clear and
convincing evidence. In re J.F.C., 96 S.W.3d 256, 266-67 (Tex.
2002); In re C.H., 89 S.W.3d 17, 25 (Tex. 2002). In a legal
sufficiency review, we look at all the evidence in the light most
favorable to the fact finding to determine whether a reasonable trier of
fact could have formed a firm belief or conviction that the finding was
true. In re J.F.C., 96 S.W.3d at 266. In so doing, we must assume
that the fact finder resolved disputed facts in favor of its finding if a
reasonable fact finder could do so. Id. We should disregard all
evidence that a reasonable fact finder could have disbelieved or found to
be incredible, but this does not mean that we must disregard all evidence
that does not support the finding. Id. If we determine that no
reasonable fact finder could form a firm belief or conviction that the
fact is true, then we must conclude that the evidence is legally
insufficient. Id.

The Sperling Building

Claire concedes that the jury was not
asked to determine whether the earnest money for the Sperling Building was
Troy's separate property. Instead, the jury was asked to determine whether
failure to complete the purchase of the Sperling Building resulted in a
fraud on the community. The jury found no fraud had been committed and
Claire has not challenged that finding on appeal. She does contend,
however, that the court erred in failing to characterize the property as
community. But no characterization was submitted to the jury; in fact, the
charge conference includes the following discussion as to how the issue
should be submitted:

[Court] All right. Number 18, Sperling
Properties? Where did that --

[Claire] That was the building that we
invested $100,000 in in our own names to buy Claire and Troy, and it left
GPM into a contract in our names.

[Ms. McKnight] But it doesn't exist
now.

[Mr. Wilson ] If it doesn't exist, Judge,
there's no submission. Again, if they want to argue it on some fraud
theory about money that we should have received, it's one thing. It's a
claim. It's not an asset.

[Ms. McKnight] The Sperlock Building
didn't close.

[Wilson] Yes. So it didn't
happen.

[The Court] Okay. Then you'll need to
give me a fraud issue on the investment if you want to submit that, but
not on a nonexistent asset.

[Ms. McKnight] That would be part of our
fraud claim.

[The Court] Well, that may be, but I
haven't gotten to those yet.

* * * * * * * *

[The Court] Let's move to what will be
Question 11 which is the old Question 8 that we're going to reform in the
nature of a gift question for the -- what is it -- Sperlock Investment or
Sperling?

[Mr. Wilson] Sperling.

[Ms. McKnight] Sperling
Building.

[The Court] Anybody got a suggestion? Do
you find from a preponderance of the evidence --

[Mr. Wilson] Do you find from a
preponderance of the evidence that there was a gift from GPM of $100,000
to the community related to, I guess, the Sperling transaction, and was it
-- and it needs to be -- I think the proper format in the PJC is it has to
be a completed gift transaction.

[The Court] Just a minute.

[Mr. Wilson] I think it has to have the
word 'completed' in there, and I don't know how to gerrymander that in
there. But I think that's part of the correct definition.

[Ms. McKnight] I have a real problem with
the word 'gift' became any earnings that he takes out of GPM becomes
community immediately, and those were obviously monies that he had earned
that were available for spending. He chose to invest it in the Sperling
Building.

So a 'gift'? I don't think so.

How would it be a gift? If it's money
he's earned in the corporation he's going to take it out to make an
investment, and both their names were on that contract.

[The Court] Well, then do you want to
submit it as a fraud issue? Do you find that the community was defrauded
--

[Ms. McKnight] Yes. Yes.

[The Court] -- by the failed
investment?

[Ms. McKnight] -- by the return of the
investment money into --

[The Court] -- That's not
right.

[Mr. Wilson] You see -- boy, that --
because then you get into a problem with the general fraud thing that Neal
has created because there's a huge overlap.

[Mr. Young] I have not created
it.

[Mr. Wilson] No. But, I mean, you -- he
worded it --

[Ms. McKnight] He exposed
it.

[Mr. Young] I think we should leave it as
he stated. I'm more comfortable with that than I am trying to put it in
another section.

[The Court] So what do you want to
do?

[Mr. Young] What he stated.

[The Court] Okay.

[Mr. Young] I think it would be less
confusing that way.

[Mr. Wilson] And I don't know how to -- I
don't know -- I don't know how to put the completion part in there because
it needs to be a completed transaction.

[Mr. Young] Put the word 'completed' in
the --

[Mr. Wilson] Yeah, was it a completed
gift or something like that.

[Ms. McKnight] But why would it be a
gift?

[Ms. Jordaan] Came out of GPM and -- in
the name of Claire -- they were trying to buy the building in the name of
Mr. and Mrs. Phillips for which [Troy] testified that GPM would then
lease. Then when the transaction fell through Troy testified he put the
money back into GPM.

[The Court] I know. How about we say, Do
you understand from a preponderance of the evidence that the community was
damaged as a result of the incomplete purchase of the Sperling
Building.

[Ms. McKnight] That would be
fine.

[Mr. Wilson] No.

[Ms. Jordaan] I'll take that. That's
great.

[The Court] Okay. Give me another
one.

* * * * * * * *

[Mr. Wilson] The problem is there's no
pleading of any damage allegation, Judge. It has to fall under, really
--

[The Court] -- fraud or
reimbursement.

[Mr. Wilson] Yeah, fraud or
reimbursement. And this is not a proper damage allegation. Asking was the
community damaged violates the pleadings that have been set forth and the
causes of action that have been presented. So it has to be under one of
the other two categories.

If she wants to say it's a gift, which I
think is the most logical way to say it, then do that. If they don't want
to do that, then we can go back to putting it as a fraud or a
reimbursement.

It's not a reimbursement so it will have
to be a fraud. But they don't have any pleadings of any
damage.

* * * * * * **

[The Court] How about we say, Do you find
from a preponderance of the evidence that there was a -- that the failure
to complete the purchase of the Sperling Building resulted in a fraud on
the community.

[Mr. Wilson] Yes. That's a -- yeah. That
would be supported by the pleadings and what they've
contended.

* * * * * * * *

[The Court] Let me read this for the
reported [sic].

This is New Question Number 11. Do you
find from a preponderance of the evidence that the failure to complete the
purchase of the Sperling Building resulted in fraud on the community?
Answer yes or no. If your answer is yes, answer in dollars and cents, if
any. And I don't think it's a comment on the weight of the evidence
because everyone agrees that they didn't complete the
purchase.

Do you have any objection to that issue,
Ms. McKnight?

[Ms. McKnight] No, I don't.

[The Court] Mr. Young?

[Mr. Young] I do not.

Claire elected the method by which to
present her issue, and she opted to charge the jury on fraud. She was
unsuccessful. Because there was no asset to be characterized, this portion
of Claire's complaint is overruled.

The Certificate of Deposit

The record reflects that Troy maintained
a bank account prior to marriage at Gateway National Bank which he
referred to as his "special account." All of the funds in the Gateway
National Bank "special account" were Troy's separate property. On August
28, 2003, Troy wrote check number 1415 on the account in the amount of
$50,000 and deposited it into his Ameritrade account. The funds in the
Ameritrade account were also his separate property. Approximately one year
later, on August 5, 2004, Troy withdrew $99,000 from the Ameritrade
account and opened an account at Dallas City Bank. On August 25, 2004, he
withdrew $50,000 from the Dallas City Bank account and bought a
certificate of deposit at Dallas City Bank. Troy introduced the banking
documents into evidence and testified concerning the nature of the
transactions. This evidence is legally sufficient to permit a fact finder
to form a firm belief or conviction that the $50,000 Dallas City Bank CD
is Troy's separate property.

Oak Grove, L.P.

During the marriage, Troy approached
Claire about making a community investment in Oak Grove, L.P., a
residential real estate venture. When Claire voiced her objection, Troy
told her that he would invest his separate property. Because the documents
for the investment had already been drafted with Claire's name included on
them, Troy crossed out her name and executed the limited partnership
agreement with the notation "as his sole and separate property." He made
the $50,000 investment with a check drawn on his firm's operating account
because he had originally thought it would be a community investment, but
he repaid it a little over a month later with cash withdrawn from his
Gateway National Bank "special account." This evidence is legally
sufficient to permit a fact finder to form a firm belief or conviction
that the Oak Grove L.P. real estate venture was Troy's separate property.
Claire has not challenged the factual sufficiency of the jury's findings.
We overrule Issue Three.

PRE-JUDGMENT INTEREST

In Issue Four, Claire argues that the
trial court erred by failing to award pre-judgment interest on the
constructive fraud judgment. Prejudgment interest is "compensation allowed
by law as additional damages for lost use of the money due as damages
during the lapse of time between the accrual of the claim and the date of
judgment." Johnson & Higgins of Texas, Inc. v. Kenneco Energy,
Inc., 962 S.W.2d 507, 528 (Tex. 1998), quoting Cavnar v. Quality
Control Parking, Inc., 696 S.W.2d 549, 552 (Tex. 1985). While one
spouse's fraud on the community estate could justify an unequal division
of the estate, "there is no independent tort cause of action for wrongful
disposition by a spouse of community assets." Schlueter v.
Schlueter, 975 S.W.2d 584, 589 (Tex. 1998). A money judgment to one
spouse based on constructive fraud is a means of effecting an equitable
division of the community estate; it is not an award of separate damages
for an independent tort cause of action. Schlueter, 975 S.W.2d at
589.

Nevertheless, Claire directs us to
Perry Roofing Co. v. Olcott, 744 S.W.2d 929 (Tex. 1988), in which
the Texas Supreme Court held that pre-judgment interest is appropriate in
a fraud claim. Of course, Perry pre-dates Schlueter and
the fraud judgment there did not arise as a result of an economic tort
committed against the community estate. She next cites Toles v.
Toles, 45 S.W.3d 252 (Tex.App.--Dallas 2001, pet. denied), wherein
the appellate court reinstated a $325,000 tort award in a divorce case for
calculation and assessment of pre-judgment and post-judgment interest. But
the tort judgment in Toles related to personal injuries sustained
by the wife as a result of the husband's assault. The difference is
significant: damage awards for personal injuries are separate property;
awards for economic torts committed against the community estate belong to
the community. Schlueter, 975 S.W.2d at 587, citing Twyman v.
Twyman, 855 S.W.2d 619, 625 n.20 (Tex. 1993). Had the jury believed
Claire was assaulted and awarded her damages for that assault,
pre-judgment interest could be applied to her damage award. Whether we
agree with it or not, Schlueter sets the parameters of economic
torts committed against the community estate. Consequently, Claire is not
entitled to pre-judgment interest. We overrule Issue Four.

DIVISION OF THE COMMUNITY ESTATE

In her final issue, Claire challenges the
trial court's division of the community estate. Because of the multitude
of sub-issues incorporated in her argument, we will set it out in
full:

The trial court made an inequitable
division of the community estate in the Final Decree of Divorce, not only
by the amount of actual award made to Mr. Phillips but also by the failure
of the court to address the division of a substantial amount of community
property and liabilities in the Final Decree of Divorce. The trial court
erred in awarding stipulated community property to Mr. Phillips as his
separate property. Did the trial court abuse its discretion in dividing
the community estate 95% to Mr. Phillips and 5% to Claire?

Standard of Review

The trial court has wide discretion in
dividing the marital estate of the parties. Tex.Fam.Code Ann. §7.001
(Vernon 2006); Jacobs v. Jacobs, 687 S.W.2d 731, 733 (Tex. 1985);
Kimsey v. Kimsey, 965 S.W.2d 690, 704 (Tex.App.--El Paso 1998,
pet. denied). We presume that the trial court exercised its discretion
properly, and the division will not be corrected on appeal unless a clear
abuse of discretion is shown. Murff v. Murff, 615 S.W.2d 696, 698
(Tex. 1981); Kimsey, 965 S.W.2d at 704. The trial court's
ultimate division need not be equal as long as it is equitable and the
circumstances justify a disproportionate division. Kimsey, 965
S.W.2d at 704. In exercising its discretion, the trial court may consider
many factors, including a disparity of income or earning capacity, the
spouses' capacities and abilities, benefits which the party not at fault
would have derived from continuation of the marriage, business
opportunities, education, relative physical conditions, relative financial
condition and obligations, disparity of ages, size of separate estates,
and the nature of the property. Murff, 615 S.W.2d at 699.

Attack on Findings of Fact

Claire contends that certain findings of
fact are not supported by the evidence:

Finding of Fact 7. That at all
times during the marriage [Claire] chose to remain unemployed, despite
being well educated, extremely intelligent and having a previous work
history.

Claire counters by focusing on her trial
testimony that Troy did not want her to work. She was also unable to work
for a lengthy period of time while she attended to her son's critical
injuries following a tragic car bombing.

Finding of Fact 5. That at all
times during the marriage [Troy] was fully employed and contributed gross
earnings of approximately $300,000 per year to the community.

Claire responds that Troy made at least
$400,000 per year while she grossed $85,000 per year at her peak earning
capacity.

Finding of Fact 10. During the
marriage [Troy] and [Claire] acquired the following community property,
other than by gift or inheritance, which the Court has awarded to [Troy]
as part of the division relating to the jury verdicts and awards of the
Court that offset each other:

The American Ironhorse Convertible Note
in the approximate amount of $15,000, and the payments received thereon,
in the approximate amount of $1,500.

Claire does not challenge the finding;
she merely argues that awarding the note to Troy was clearly
inequitable.

Finding of Fact 11. During the
marriage [Troy] and [Claire] acquired the following community property,
other than by gift or inheritance, which the Court has awarded to [Claire]
as part of the division relating to the jury verdicts and awards of the
Court that offset each other:

The community interest in the Troy
Phillips 401k account at Glast, Phillips & Murray, P.C., in the amount
of $36,867.

Claire argues that this finding is
patently erroneous because Troy and his attorney stipulated the value at
$46,000 during the course of the trial. This is true. But when they
learned the amount was inaccurate, they brought the issue to the trial
court's attention and the trial judge agreed. Claire directs us to no
authority that an error in a bank account discovered during trial cannot
be corrected, and we decline to so hold.

Finding of Fact 19. Concerning
the credit card debts that [Troy] is ordered to pay, the Court finds:

(d) The total amount of these accounts is
$58,931.48. The Court further finds that when reduced by the improper
charges by [Claire] in the sum of $9,894.80, this leaves the amount of
$49,037.

Claire complains that her credit card
debt of approximately $45,000 was not considered by the trial court.
However, the record reference she cites in support of her claim relates to
a bound volume prepared by her attorney in connection with the hearing on
her motion for new trial. This exhibit was never introduced into
evidence.

Finding of Fact 21. That [Troy]
and [Claire] each contributed $125,000 in separate property contributions
to the purchase of 12516 Degas, Dallas, Texas.

Claire argues that Troy contributed only
$92,000. Troy's exhibits and tracings demonstrated that his contribution
totaled $125,000.

Finding of Fact 24. That during
the marriage of the parties, but after their separation and filing of
divorce, [Troy] purchased the residence located at 5108 Westgrove, Dallas,
Texas. This property had a significant negative value at the time of trial
and [Troy] agreed to treat it as his separate property and debt, which was
accepted by the Court and opposing counsel.

Finding of Fact 12. The
undisputed evidence of stipulations of the parties establish: (1) that
[Troy] owned the following separate property items, before marriage or as
a permutation of a previously owned separate item, and (2) each party
waived any community claim to increases, interest or dividends earned by
such accounts or items:

(11) All right, title and interest in the
2000 Mercedes 500S automobile.

Claire contends that these findings and
are totally against the stipulated evidence that both assets were
community property. Certainly they were. But the record clearly indicates
that Troy owed more on the Westgrove home than what it was worth, an
assertion Claire does not dispute.
(10) As for the Mercedes, the evidence indicates that the car
had a value of $45,000 against a lien of $45,000. Regardless of whether
Claire disagrees that everyone stipulated a willingness to treat these
assets as Troy's separate property so as not to reduce the community
estate, she has not established, nor attempted to establish, any harm in
the mischaracterization. Characterizing these assets as community property
will diminish the value of the community estate. See Tate v.
Tate, 55 S.W.3d 1, 7 (Tex.App.--El Paso 2000, no pet.),
citing Vandiver v. Vandiver, 4 S.W.3d 300, 302
(Tex.App.--Corpus Christi 1999, pet. denied)(mischaracterization of
community property as separate property is not reversible unless the
mischaracterization had more than a de minimus effect on the just
and right division)

Finding of Fact 13. During the
trial the Court allowed each party the opportunity to contest the
characterization of any disputed property items. . . .

Claire considers this an erroneous
finding because there were many issues remaining after the jury trial. She
complains that the decree fails to divide $1,000,000 in undivided income
received by Troy during the separation, the Van Meter note receivable of
$142,000,
(11) the $50,000 in purchases for the Westgrove residence and
the $100,000 down payment on the Sperling Building.

As is generally the case in divorce
litigation, the parties here disagreed over characterization, valuation,
economic torts, reimbursement, and equitable division. It is fair to say
that the sixteen volumes of testimony contain a great deal of
finger-pointing, blame-laying, and he-said/she-said exchanges. We
understand that Claire is dissatisfied with the outcome -- the jury did
not believe that she had been assaulted. To add insult to injury, the jury
thought she should pay all of Troy's attorneys' fees. She was at odds with
her attorneys, suing them for malpractice when they intervened to recover
their fees. She has endured the numerous hospitalizations, surgeries, and
rehabilitation of her son. We are also mindful of Troy's frustrations. The
parties were married on February 1, 2001 and separated in November 2003.
He filed for divorce on December 29, 2003, and the final decree was signed
on January 13, 2006. Cohabitation lasted 34 months; the litigation lasted
almost as long. During the jury trial, the credibility of the witnesses
was an issue for the panel to decide; in the bench trial, credibility was
determined by the trial judge. We conclude that the findings of fact are
duly supported by the evidence.

Division of the Community Estate

We come now to the gravamen of Claire's
final issue. She contends that the community estate was divided
disproportionately, with Troy receiving 95% while she received only 5% of
the assets. Again, we must note that her calculations of the division are
based upon exhibits she prepared but never introduced into evidence. The
exhibits characterize and value the assets according to her trial theories
and they are at odds with the trial court's findings. While she sought
additional findings of fact, the trial court apparently did not consider
them, and Claire has not challenged as error the trial court's failure to
make additional findings. Consequently, our review of the division must be
predicated upon the size of the community estate as found by the court.
Rather than the $1.63 million that Claire claims as total community
assets, the court found the gross community estate to be worth roughly
$478,000, excluding furniture, furnishings, and personal possessions of
each spouse, which were not valued by the trial court:

Assets

Economic fraud recovery
$404,407.00

Community interest in Troy's 401k account
$ 36,867.00

American Ironhorse note $
15,000.00

Ironhorse payment $ 1,500.00

Interest owed Claire by Troy's separate
estate $ 6,900.00

Fees due for the value of decorating
services

Claire performed for GPM $ 13,500.00

$478,174.00

Liabilities

Troy's attorney's fees
$112,357.00

Credit card debt $ 49,037.00

Offsets in Troy's favor $141,085.00

$302,479.00

The net community estate is thus $175,695.00. In
dividing the estate, the trial court began with the $404,407 judgment in
Claire's favor and added to it the $6,900 in interest and the $13,500 in
decorating fees. From that, she subtracted Troy's attorney's fees, his
credit card debt, and the offsets in Troy's favor, leaving $122,328.
Claire was awarded the interest in the 401k in the amount of $36,867,
while Troy was awarded the Ironhorse note and payment totaling $16,500.
These three numbers -- $122,328 + $36,867 + 16,500 -- total $175,695. But
we come now to a mathematical error. The trial court took the remainder of
the judgment -- $122,328 -- and subtracted the amount of the 401k
to reach $85,461. She then added the amount of the Ironhorse note
and payment -- $16,500 -- to reach the amount of the judgment awarded to
Claire in the final decree -- $101,961. In fact, the opposite should have
occurred to effect the division she intended. The assets as divided do not
total the net community estate. According to the decree, Claire received a
money judgment of $101,961 and the monies in the 401k of $36,867, for a
total of $138,828. Troy received the Ironhorse interests of $16,500.
Adding these numbers results in a sum of $155,328, which is $20,367 less
than the net community estate. And $20,367 is exactly the difference
between the $122,328 money judgment remainder and the $101,961 judgment
awarded to Claire. It is also the precise difference between the value of
the 401k and the Ironhorse note.

We turn now to the percentage
distribution. Of the $175,695 net community estate, Claire was awarded
$138,828, or 79%. Troy was awarded $16,500, or 10%. The $20,367 error
represents 11%, which was effectively awarded to Troy. If we adjust the
distribution accordingly, Claire has received $138,828, or 79% while Troy
has received $36,867, or 21%. Is a 79%-21% distribution in Claire's favor
unfair or inequitable? Had the issue not been squarely presented to the
trial court for re-consideration, we might be inclined to suggest a
remittitur.
(12)

But the error was clearly spelled out in
Claire's forty-nine page motion for new trial and argued at the hearing
thereon. We therefore presume that the trial court intended the division
manifested in the decree, awarding Claire 79% of the community estate. We
overrule Issue Five and affirm the judgment of the trial court
below.

March 26, 2009

ANN CRAWFORD McCLURE,
Justice

Before Chew, C.J., McClure, and Carr,
JJ.

Carr, J., not participating

1. During the pretrial
phase of this case, Claire was represented first by Amy Ganci and then by
Linda Aland while Troy was represented by Thomas Raggio. During the jury
trial, Claire was represented by Mary McKnight, Neal Young, and Patricia
Jordaan. Troy was represented by Charles Wilson.

2. During the bench trial, Claire was represented by
Stephen Shoultz, who had not participated in the jury trial.

3. Our resolution of this issue should not be
interpreted as condoning the somewhat haphazard method of submitting some
reimbursement issues while not submitting others.

4. Because a gift by definition constitutes separate
property, there can be no gift to the community estate. Tex.Const. art.
16, § 15; Tex.Fam.Code Ann. § 3.001 (Vernon 2006); Long v. Long,
234 S.W.3d 34, 39 (Tex.App.--El Paso 2007, pet. denied), citing
Jones v. Jones, 804 S.W.2d 623, 627 (Tex.App.--Texarkana 1991, no
writ); Higgins v. Higgins, 458 S.W.2d 498 (Tex.Civ.App.--Eastland
1970, no writ). Thus, when a gift is made, each spouse receives an
undivided one-half interest as his or her separate property. The trial
court's offset of $64,412.50, representing one-half of the total $128,825
transfer, reflects this reality.

5. A court may apportion attorney's fees in a divorce
action as part of a just and right division of property. Sandone v.
Miller-Sandone, 116 S.W.3d 204, 208 (Tex.App.--El Paso 2003, no
pet.). Generally speaking, a jury finding as to the amount of
reasonable and necessary fees is binding on the court, but a finding as to
which party should pay those fees is advisory. Thus, while the
trial court was not obligated to adopt the jury's finding, there was no
prohibition against it.

6. Troy testified that when copies of the bills were
provided to Claire's attorneys during discovery, he objected to inclusion
of the description of services provided because the information was
protected by the attorney-client privilege.

7. Exhibit 67 included Thomas Raggio's fees. Mr.
Wilson did not limit his testimony to his own fees, nor was he
cross-examined about Mr. Raggio's fees.

8. 125 hours multiplied by the hourly rate of $285
equals $35,625.

9. At various points throughout the record, this
property is referred to as "Spurling" and "Sperlock."

10. During the bench trial, Mr. Wilson advised the
court : "And, Your Honor, there is Exhibit 41 which we put in evidence at
the previous trial which is a listing of our separate property. We
included that car and its debt, the Westgrove house and its debt on that.
In the previous trial we went through that. Those were really community
items but we were taking them because they were under water, and there was
no dispute. They had been through the documents on that stuff."

11. Ruth Van Meter Wagner was an attorney with whom
Troy practiced law and engaged in an affair before his marriage to Claire.
Claire's financial expert, Dennis Lee Chamberlain, testified that Troy had
loaned the lady $150,000, of which $142,000 was still owed. Troy
specifically denied this, , but he did admit lending her $5,000 in 1999
when she was buying a house. He did not marry Claire until 2001.

12. There is ample support in Texas jurisprudence for
an error in dividing property incident to divorce (which would ordinarily
require an appellate court to reverse and remand for a new property
division) to be cured by remittitur. See Burney v. Burney, 225
S.W.3d 208, 220 n.3 (Tex.App.--El Paso 2006, no
pet.).