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Banker v. Banker

Court of Appeals of Texas, Thirteenth District, Corpus Christi-Edinburg

March 2, 2017

JOHN BANKER, Appellee.

         On appeal from the 130th District Court of Matagorda County, Texas.

          Before Chief Justice Valdez and Justices Rodriguez and Benavides



         This is an appeal from a divorce decree which divided the marital estate of appellant Kay Nordt Banker and appellee John Banker. By four issues, Kay contests several aspects of the trial court's decree. Kay contends that the trial court abused its discretion in dividing certain estate assets and in rendering an untimely judgment. Kay also contends that the trial court erred in failing to award her pre-judgment interest. We reverse and remand in part, and we affirm in part on condition of remittitur.

         I. Background

         Kay and John were married in November 1990. They purchased two businesses during the course of the marriage: Banker Crop Insurance Agency, Inc., a business operated by Kay; and El Campo Livestock, Inc. (ECL), a livestock auction house operated by John. Kay filed for divorce in September 2010.

         A bench trial was held in April 2013. At trial, the court admitted Kay's testimony, her inventory of estate assets, and most of her exhibits concerning the value of the assets. Kay also offered the testimony of two experts: Jessica Putz, a property-valuation expert, and Stephen Gonsoulin, a business-valuation expert, who primarily testified concerning his appraisal of ECL. Kay's experts proposed to testify on the values of estate assets and also in support of Kay's theory that John had committed fraud on the estate; according to Kay, John had arranged for the sale of a large quantity of cattle through ECL and concealed the proceeds from Kay.

         John objected to Gonsoulin and Putz's testimony on various grounds and offered a rebuttal expert. The trial court agreed with John, finding that Kay's experts had relied on several dubious assumptions. The trial court prevented Putz from testifying altogether and later entered findings that Gonsoulin's testimony was neither credible nor valid. Kay does not challenge these rulings on appeal.

         In support of his case, John offered several exhibits and his own testimony on the value of the estate's assets. However, the trial court did not admit the majority of John's exhibits, including John's sworn inventory.

         After the April 2013 trial, the court deferred judgment and ordered John and Kay to attend mediation, which ultimately proved unsuccessful. On April 17, 2014, the trial court circulated a non-final draft of its divorce decree by letter to the parties. On April 28, 2014, Kay filed a motion to reconsider the draft decree and a motion to divide the community estate property.

         On July 13, 2014, the trial court entered a decree of divorce with a division of property. The decree listed the reason for divorce as adultery by John. As relevant to this appeal, the decree awarded John sole ownership of ECL, multiple vehicles and trailers which were titled in John's name, and all "goods . . . in the possession of the husband or subject to his sole control." The decree awarded Kay sole ownership of Banker Crop Insurance and a bank account with First Victoria Bank, among other things. Ultimately, the trial court divided the estate 55% to Kay and 45% to John. To achieve this division, the trial court entered an offsetting judgment and lien of $455, 133 against John, payable to Kay.

         On July 28, 2014, Kay filed a request for findings of fact and conclusions of law. On August 12, Kay filed a motion for new trial and a motion to modify the judgment. On August 26, Kay filed a notice of past-due findings. On September 15, Kay filed her second amended petition for divorce as well as a motion for leave to file the petition. In her second amended petition, Kay pleaded for pre-judgment interest for the first time. On September 25, the trial court entered an order granting Kay's motion to modify and vacating the original decree pending the entry of a modified decree. On October 30, Kay filed an amended motion for leave to file her second amended petition, a motion for judgment, and a notice of appeal. On January 28, 2015, the trial court granted Kay's motion to modify the judgment. Among other things, the trial court indicated that it would increase the offsetting judgment against John from $455, 133 to $676, 733.

         On March 27, John filed a motion to modify, primarily seeking a reduction of the offsetting judgment to $573.643.91. On May 11, the trial court denied John's motion and entered its modified final decree of divorce. The decree included the $676, 733 offsetting judgment lien in favor of Kay, but excluded pre-judgment interest.

         On May 12, Kay again requested findings of fact and conclusions of law, and on June 9, Kay again moved for a new trial. Kay filed this appeal on August 6, 2015.

         On appeal, we remanded the matter to the trial court for the entry of findings of fact and conclusions of law. The trial court entered findings and conclusions on December 10, 2015. Among its findings, the trial court rejected Kay's fraud theory and the evidence which supported it. The trial court also concluded that the judgment should be modified to grant Kay pre-judgment interest on the offsetting judgment. However, the trial court did not modify the judgment to grant Kay pre-judgment interest.

         On appeal, Kay presents four issues. By her first and third issues, Kay argues that the trial court erred in valuing and distributing certain community assets. By her second issue, Kay argues that the trial court erred in delaying the rendition of judgment for two years and rendering judgment based on outdated evidence of property values. Also within her second issue, Kay argues that the trial court erred in failing to grant a new trial to receive updated evidence. By a fourth issue, Kay argues that the trial court erred in failing to grant her pre-judgment interest.

         II. Standard of Review and General Applicable Law

         We review the trial court's division of property to determine whether the trial court abused its discretion by making a division that was manifestly unjust and unfair. Vandiver v. Vandiver, 4 S.W.3d 300, 303 (Tex. App.-Corpus Christi 1999, pet. denied). A trial court has wide discretion in making a just and right division. Handley v. Handley, 122 S.W.3d 904, 907 (Tex. App.-Corpus Christi 2003, no pet.). In an abuse of discretion analysis, legal and factual sufficiency are not independent grounds of error, but rather relevant factors in assessing whether the trial court abused its discretion. Id. There is generally no abuse of discretion on grounds of insufficiency if some probative evidence supports the trial court's findings. In re Barber, 982 S.W.2d 364, 366 (Tex. 1998) (orig. proceeding). We presume on appeal that the trial court correctly exercised its discretion when dividing the fruits of a marriage, and the appellant bears the burden to show from the record that the division was so disproportionate, and thus unfair, that it constitutes an abuse of discretion. O'Carolan v. Hopper, 414 S.W.3d 288, 311 (Tex. App.-Austin 2013, no pet.); see Saldana v. Saldana, 791 S.W.2d 316, 319 (Tex. App.- Corpus Christi 1990, no writ). As the finder of fact for the proceeding, the trial court is the exclusive judge of the credibility of the witnesses, the weight to be given their testimony, and the best means to resolve inconsistencies in the evidence. Bos v. Smith, 492 S.W.3d 361, 381 (Tex. App.-Corpus Christi 2016, pet. filed); Handley, 122 S.W.3d at 911.

         We may review a trial court's conclusions of law de novo to determine their correctness. City of Austin v. Whittington, 384 S.W.3d 766, 779 n.10 (Tex. 2012) (citing BMC Software Belg., N.V. v. Marchand, 83 S.W.3d 789, 794 (Tex. 2002)). But we will not reverse an erroneous conclusion if the trial court rendered the proper judgment. Id. Regardless of the label, the trial court's designation of a finding of fact or conclusion of law is not controlling on appeal. Ray v. Farmers' State Bank of Hart, 576 S.W.2d 607, 608 n.1 (Tex. 1979). Conclusions which are actually findings will be treated as findings, and vice versa. See Smith v. Smith, 112 S.W.3d 275, 279 (Tex. App.-Corpus Christi 2003, pet. denied).

         In a decree of divorce or annulment, the court shall order a division of the estate of the parties in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage. Tex. Fam. Code Ann. § 7.001 (West, Westlaw through 2015 R.S.). The value of community assets is generally determined at the date of divorce. Handley, 122 S.W.3d at 908; O'Carolan, 414 S.W.3d at 312. In valuing the assets in the estate, if several values are given, or if a witness testifies that the value may be higher or lower than his estimate, the court's determination of the value should be within the ranges in the evidence. Van Heerden v. Van Heerden, 321 S.W.3d 869, 880 (Tex. App.-Houston [14th Dist.] 2010, no pet.); Mata v. Mata, 710 S.W.2d 756, 758 (Tex. App.-Corpus Christi 1986, no writ). Where the uncontested evidence establishes only one value, the trial court cannot draw a different inference. Mata, 710 S.W.2d at 758; see also Cruz v. Cruz, No. 13-04-00540-CV, 2006 WL 2371342, at *3 (Tex. App.-Corpus Christi Aug. 17, 2006, no pet.) (mem. op.).

         III. Valuation of Specific Assets

         By her first issue, Kay contends that the trial court incorrectly assessed the value of three groups of assets which were awarded to John: ECL itself, ECL's business good will, and multiple vehicles. Kay also urges error in the trial court's appraisal of two bank accounts which were awarded to her. According to Kay, these values were either unsupported by or directly contrary to the available evidence, they rendered the overall division manifestly unjust, and therefore constituted an abuse of discretion.

         A. Valuation of ECL

         The trial court found that ECL had a fair market value of $1, 446, 489.09 under an "asset-based approach" to business valuation. Kay asserts that the trial court did not admit any probative evidence to support this valuation; she claims that this figure was instead derived from John's inventory, which was not admitted into evidence. Kay further contends that the only record evidence of ECL's value is what she describes as her expert's own asset-based valuation of ECL at $1, 680, 000.

         In response, John insists that his own testimony on the value of ECL supports the trial court's finding and judgment. John primarily relies on the "property-owner rule, " arguing that this rule entitled him to testify to the value of the business.

         1. Applicable Law

         An inventory and appraisement that has not been admitted into evidence is more like a party's pleading. Barnard v. Barnard, 133 S.W.3d 782, 789 (Tex. App.-Fort Worth 2004, pet. denied); see Tschirhart v. Tschirhart, 876 S.W.2d 507, 509 (Tex. App.-Austin 1994, no writ). Unless a party's inventory and appraisal has been admitted into evidence, it may not ...

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