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In re Marriage of Armstrong

Court of Appeals of Texas, Twelfth District, Tyler

July 31, 2017



          Worthen, C.J., Hoyle, J., and Neeley, J.


          Greg Neeley Justice

         Ronald Dean Armstrong appeals the trial court's final decree of divorce. On appeal, he presents one issue. We modify the final decree of divorce and, as modified, affirm.


         Ronald Dean Armstrong and Stephanie Gwinn Armstrong were married on August 21, 1993. On March 26, 2015, Stephanie filed a first amended petition for divorce, and Ronald filed a counterpetition for divorce. Both parties alleged that the other spouse was guilty of cruel treatment and committed adultery, and both parties requested that they be awarded a disproportionate share of the parties' community estate.

         Following a bench trial, the trial court granted the divorce. The trial court awarded Ronald, as his sole and separate property, the business known as Warehouse Hardware Enterprises, LLC, including but not limited to all inventory, cash, receivables, accounts, goods, and supplies. Further, the trial court awarded to Stephanie, as her sole and separate property, "[t]he Warehouse real estate and the Watkins interest contiguous thereto, " which properties were described in an exhibit to the divorce decree. This appeal followed.

          Standard of Review

         In a decree of divorce, a 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. Tex. Fam. Code Ann. § 7.001 (West 2006). We review a trial court's division of property under an abuse of discretion standard. Moroch v. Collins, 174 S.W.3d 849, 857 (Tex. App.-Dallas 2005, pet. denied); see also Garza v. Garza, 217 S.W.3d 538, 548 (Tex. App.-San Antonio 2006, no pet.). A trial court does not abuse its discretion if there is some evidence of a substantive and probative character to support the decision. Garza, 217 S.W.3d at 549; Moroch, 174 S.W.3d at 857. Moreover, we should reverse a court's division of property only if the error materially affects the court's just and right division of the property. Henry v. Henry, 48 S.W.3d 468, 475 (Tex. App.-Houston [14th Dist.] 2001, no pet.). However, once reversible error affecting the "just and right" division of the community estate is found, an appellate court must remand the entire community estate for a new division. Sheshtawy v. Sheshtawy, 150 S.W.3d 772, 780 (Tex. App.-San Antonio 2004, pet. denied) (quoting Jacobs v. Jacobs, 687 S.W.2d 731, 733 (Tex. 1985)).

         Property Division

         In his sole issue, Ronald argues that the trial court abused its discretion by awarding the Warehouse real estate ("Warehouse Property") to Stephanie because it was not within the trial court's authority. More specifically, he contends that the "Warehouse Property" was deeded to the limited liability company that was awarded to him in the divorce decree. In the alternative, Ronald argues that the "Warehouse Property" was held in a partnership between him and his mother-in-law, Dotie Adams, and was not part of the marital estate.

         Applicable Law

         Property possessed by either spouse during or on dissolution of marriage is presumed to be community property. Tex. Fam. Code Ann. § 3.003(a) (West 2006). Any doubt as to the character of property should be resolved in favor of the community estate. Sink v. Sink, 364 S.W.3d 340, 345 (Tex. App.-Dallas 2012, no pet.). The burden of proof necessary to establish that property is separate property is clear and convincing evidence. Id. § 3.003(b). Clear and convincing evidence means "the measure or degree of proof that will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established." Id. § 101.007 (West 2014).

         A "tenancy in common" is a tenancy by two or more persons, in equal or unequal undivided shares, each person having an equal right to possess the whole property but no right of survivorship. See Black's Law Dictionary 1695 (10th ed. 2014). The question of whether a partnership exists is primarily a question of fact. Ben Fitzgerald Realty Co. v. Muller, 846 S.W.2d 110, 120 (Tex. App.-Tyler 1993, writ denied). A "partnership" is an association of two or more persons to carry on a business for profit as owners. See Tex. Bus. Orgs. Code Ann. § 152.051 (b) (West 2012). Co-ownership of property, regardless of whether the co-ownership is a joint tenancy, tenancy in common, tenancy by the entity, joint property, community property, or part ownership, by itself, does not indicate that a person is a partner in the business. See id. ยง 152.052 (b)(2)(A) (West 2012). In determining whether a partnership was created, we consider several factors, including (1) the parties' receipt or right to receive a share of profits of the business; (2) any expression of an intent to be partners in the business; (3) participation or right to participate in control of the business; (4) any agreement to share or sharing losses of the ...

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