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Garcia v. Ruiz

Court of Appeals of Texas, First District

June 11, 2019


          On Appeal from the 312th District Court Harris County, Texas Trial Court Case No. 2015-23612

          Panel consists of Justices Lloyd, Landau, and Countiss.



         This is an appeal of the trial court's division of Cynthia Ann Garcia and Vicente Ruiz, Jr.'s marital estate. In two issues, Garcia contends the trial court erred because it failed to divide one community asset (a lease of recreational property) and unfairly allocated community debt (federal income tax liability). Agreeing with Garcia that the trial court's property division was erroneous, we reverse and remand.


         Cynthia Ann Garcia and Vicente Ruiz, Jr. were married in 2000. Fifteen years later, Garcia filed for divorce on the ground that the marriage had become insupportable. See Tex. Fam. Code § 6.001 (authorizing divorce "without regard to fault if the marriage has become insupportable because of discord or conflict of personalities that destroys the legitimate ends of the marital relationship and prevents any reasonable expectation of reconciliation"). After a bench trial, the trial court granted the divorce, named Garcia and Ruiz as joint managing conservators of their children, and divided the marital estate.

         Garcia appealed, contending that the trial court made two errors in its property division. Specifically, she asserts the trial court erred by (1) failing to include the lease of a ranch Ruiz uses recreationally as part of the community estate and (2) unfairly allocating more than $430, 000 Ruiz owed to the Internal Revenue Service (IRS) for unpaid taxes on income from his roofing business.[1]

          Regarding the ranch lease, the evidence at trial was that, in June 2011, Ruiz executed a written agreement to lease recreational property in Pattison, Texas from Mateo Campa, a friend who had owned the property for about five years. The ranch is 32 acres of land with improvements, including a house, a gazebo, a barn, and a large, stocked pond. According to Campa, Ruiz helped Campa build or enhance some of the improvements. When asked how Ruiz used the ranch, Campa indicated that Ruiz overnighted in the house, kept horses on site, and enjoyed four-wheeling and jet skiing on the property. Though the ranch lease was for a 10-year period, Campa suggested in his testimony that Ruiz could extend the lease indefinitely for so long as he continued to pay $1, 600 monthly in rent. Campa was willing to sell the ranch to Ruiz for $100, 000 less than he would sell to a third party if Ruiz wanted to buy the ranch.

         Garcia contended at trial that this evidence showed Ruiz was more than a lessee and was actually owner of the ranch, whose ownership interest was being hidden from the IRS by Ruiz and Campa's lease scheme. The evidence was undisputed that, during the marriage, Ruiz incurred more than $430, 000 in tax liability. The debt arose largely from the operation of a roofing business Ruiz founded several years before he married Garcia. Once he and Garcia married, Ruiz added Garcia's name to the business. That arrangement did not last long though. In Ruiz's own words, Garcia wanted out of the business after three years because she "didn't like the way the business was run." Garcia filed a document with the county clerk abandoning any record ownership interest in the roofing company and thereafter filed her individual income tax returns using the "married filing separately" designation.

         The record suggests that, about a month after the bench trial concluded, the trial court announced its property-division decision to the parties; however, the trial court's initial rendition of judgment is not included in the appellate record. Instead, the only suggestion of rendition memorialized in the record is in Garcia's motion for reconsideration, which challenged a finding that, contrary to Garcia's theory at trial, Ruiz does not own the ranch and, with reference to that finding, urged the trial court to assign Ruiz at least $100, 000 in its property division for his "perpetual lease" of and "option to buy" the ranch.[2]

         The trial court rejected Garcia's suggestion regarding the ranch lease, writing in the final divorce decree now on appeal:

[T]here is no evidence to confirm that the [ranch] is part of the marital estate of the parties and the Court makes no findings or awards as to that property and hereby denies in whole . . . Garcia's request for division of that property as part of the marital estate.

         The divorce decree includes a division of the property determined to be within the marital estate, including an assignment of the tax liability to Ruiz.

         Ranch ...

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