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In re Marriage of Donathan

Court of Appeals of Texas, Tenth District

August 2, 2017

IN THE MATTER OF THE MARRIAGE OF RANDY GENE DONATHAN AND MARGARET MARY DONATHAN

         From the 378th District Court Ellis County, Texas Trial Court No. 89670D

          Before Chief Justice Gray, Justice Davis, and Justice Scoggins

          MEMORANDUM OPINION

          TOM GRAY Chief Justice.

         This appeal is about one facet of the trial court's division of property upon the dissolution of the marriage of Randy and Margaret. Specifically, the trial court had to determine three potential reimbursement claims regarding real estate which was owned by Randy prior to their marriage. Under the inception of title doctrine it was Randy's separate property. During the marriage both Randy and Margaret had separate property funds that were either brought into the marriage or obtained during the marriage from the estates of deceased parents. Community property funds and some of the separate funds of both Randy and Margaret were spent on the subject property.

         The trial court computed the increase in value of the property based on the improvements which were made to the property, including the construction of a house, several barns, and other improvements. The trial court determined that the value of the enhancement to the property and the community expenditures for the mortgage payments was reimbursable to the community estate from Randy's separate estate and that amount was divided equally between Randy and Margaret. The trial court also awarded Margaret reimbursement for the amount the trial court determined had resulted from the expenditure of separate property monies by Margaret. The trial court determined Randy was not entitled to reimbursement from the community estate for his separate property funds spent on the property in constructing the house.

         Randy does not challenge the trial court's methodology in calculating the amounts awarded. In his first issue, Randy asserts only that the trial court erred in awarding the reimbursement claim to Margaret's separate estate in its entirety. In his second issue, Randy complains that the trial court erred by not awarding his separate property estate any reimbursement from the community estate before the balance of that amount was divided between them. We find that the judgment should be modified regarding the award to Margaret, but should be otherwise affirmed.

         Relevant Facts

         The parties were married in June of 2001. Margaret moved to Texas from California to reside with Randy. It is undisputed that Randy owned 105 acres of land at the time of the marriage, hereinafter referred to as "the property." When Margaret moved to Texas, a dilapidated mobile home was on the property. Margaret cashed in her retirement from her previous employment and received $7, 218 which she gave to Randy to be used for the property. Randy sold her separate property truck shortly thereafter to his father and kept the proceeds, which the trial court found to be $9, 000. Randy testified that the proceeds of the truck were used to pay off his debt on the mobile home. At all times during the marriage, Randy and Margaret each maintained bank accounts to which the other did not have access.

         Over the course of the next few years, the parties spent substantial sums and effort to improve the mobile home, including adding rooms and remodeling the inside and outside extensively. Additionally, the parties built several storage barns, a chicken coop, and an aviary on the property. The parties did a lot of the work themselves but hired contractors for the jobs they were unable to complete themselves. The property was refinanced in 2004 and both parties signed as debtors on the mortgage. The payments on the property were made with community property funds both before and after the refinancing.

         In 2010, Randy's father passed away and Randy received an inheritance from his father's estate. Shortly thereafter, a house was constructed on the property. Randy introduced copies of cancelled checks from his bank account showing that he had paid $52, 482.30 towards the construction of the house. At some point after the completion of the house, the mobile home was demolished entirely and the remains were burned.

         In 2013 and 2014, Margaret received an inheritance from her mother's estate of approximately $52, 000. Margaret testified that she spent all but approximately $4, 000 of the inheritance on improvements to the property, which included planting many trees, the purchase of a rainwater collection system, gutters, a trailer, and vegetable gardens. Margaret also testified that she had also reimbursed Randy for $3, 000 he had given her from his father's estate. Margaret further testified that she had purchased groceries and other things for the house with her inheritance money. Randy agreed that Margaret had spent funds on the trees and gardens but claimed that they were all dead when the property was sold.[1]

         The amount of the trial court's reimbursement award to the community estate was based on the increase in value of the property due to the improvements to the property, closing costs paid by the community for the 2004 mortgage refinance, and payments made on the property from the community estate which totaled the amount of $157, 847.80. This is the amount that was then divided equally between Randy and Margaret. Randy does not dispute the calculation of the total amount of the reimbursement to the community awarded by the trial court or the equal division of the reimbursement award in this appeal. Randy's only complaint regarding the reimbursement claim to the community estate is that his separate property reimbursement claim of $52, 482.30 should have been offset from the total amount awarded to the community prior to the balance being divided equally between them.

         The trial court also awarded reimbursement to Margaret's separate estate for the retirement proceeds, the proceeds from the sale of the truck, and the full $52, 000 Margaret received from her mother's inheritance. The trial court did not specifically reference Randy's reimbursement claim against the community for the $52, 482.30 of his separate property funds he expended for the construction of the house.

         In his first issue, Randy complains that the trial court abused its discretion by awarding Margaret's separate estate reimbursement claim in its entirety. In his second issue, Randy complains that the trial court abused its discretion by denying his offset reimbursement claim against the community ...


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