In The
Court of Appeals
Ninth District of Texas at Beaumont
NO. 09-24-00364-CV
SCOTT JARVIS, Appellant
V.
GRACIELA JARVIS, Appellee
On Appeal from the 410th District Court
Montgomery County, Texas
Trial Cause No. 23-07-10408-CV
MEMORANDUM OPINION
Scott Jarvis (“Scott”) appeals from a divorce decree that divided the marital
estate between him and Graciela Jarvis (“Grace”). In three issues, Scott contends
that the trial court erred by characterizing his separate property as community
property and awarding it to Grace. For the reasons set forth below, we affirm the
trial court’s divorce decree and property division.
1
BACKGROUND
Scott and Grace married in May 2009, separated in February 2023, and
divorced in July 2024. Although both Scott and Grace had children from prior
relationships, they had no children together.
Following a bench trial, the trial court divided the parties’ property, and it is
this property division that is the subject of the appeal. Scott specifically challenges
the trial court’s characterization of the following property as community: a 401k
account; proceeds of a property sale; and a parcel of real property. We summarize
the trial evidence below.
Richard Johnston’s Testimony
Richard Johnston (“Johnston”) testified that he was an owner and principal of
QDRO Services, a company that “deals with the interface between employee
benefits and marital dissolution[.]” Johnston estimated that he had helped clients
divide between 250 and 500 military pensions since he started QDRO Services in
1996, and as a military retiree, himself, Johnston was familiar with military
retirement benefits.
According to Johnston, he became involved with the instant case when
Grace’s attorney retained him to value Scott’s pension and determine “the separate
and community property components of that pension.” Based on Johnston’s
calculations, the present value of Scott’s military pension was worth $516,936 as of
2
October 2023 and would pay Scott approximately $3,043 per month in retirement.
Although Johnston determined that $363,716 of the value of Scott’s retirement
account was community property, he cautioned that Scott could take legal steps to
prevent Grace from receiving any amount of his retirement pay that the court might
award to her.
Grace’s Testimony
Grace testified that she worked as a senior closer with Mission Mortgage, a
position she had held for about ten years. Although Grace noted that her annual
income varied with the housing market, she indicated that she made about $67,000
per year as of the time of trial, in May 2024. According to Grace, Scott did not share
expenses with Grace “if he didn’t agree with” them. Instead, Scott denied Grace
access to his earnings, telling her it was none of her business, and he made Grace
send him spreadsheets showing their household expenses before he would reimburse
her for his share. Grace characterized Scott as manipulative, intimidating, and
aggressive. In one example of Scott’s behavior, Grace testified that while her
daughter, Samantha, was growing up, they did not tell Samantha that Scott was not
her biological father. When Samantha became a teen, Grace and Scott discussed
telling her about her biological father, yet Scott took it upon himself to tell Samantha
that he was not her biological father, thus upsetting Samantha. Grace decided to
divorce Scott after a different incident involving Samantha: Scott was teaching
3
Samantha to drive. When she violated one of Scott’s driving rules, Scott “got very
upset and pulled over the car, hitting it, charging her. And what he told [Grace]
happened was [Samantha] was so hysterical, [Scott] had to hit her.” Grace filed for
divorce on July 20, 2023.
As to specific items of property, Grace testified that buying the timeshare was
a mutual decision, although she had used it “two more occasions than [Scott] has.”
Grace agreed that Scott would receive this property and assume the concomitant debt
of about $12,000. Grace and Scott also bought property in Grapeland where,
according to Grace, she and Scott planned to build a house and retire. Grace asked
the trial court to award her that land, which they bought about four years before trial,
while holding Scott responsible for the debt remaining on the property. Grace further
sought two accounts worth about $10,000 at First Community Credit Union and
requested that the remaining accounts be awarded to the party whose name was on
the account, according to the parties’ agreement. 1 As to her 401k account, Grace
testified that she borrowed about $20,000 against that account to cover the costs of
repairing their former home to get it in marketable condition. When the house was
sold, in about February 2023, Grace and Scott shared the proceeds equally and Grace
used some of her share to pay some credit card debt. For the reasons Johnston
1
Reference to Plaintiff’s Exhibit 2 indicates that these accounts end with 0380-1 and 0380-2 and that the combined amount in these accounts was $10,062.33 as of March 31, 2024.
4
explained, Grace asked the trial court to award Scott’s military pension entirely to
Scott.
Grace testified that she and Scott had vehicles, clothing, and other personal
property, and she estimated that her possessions were worth approximately the same
as Scott’s possessions. Grace acknowledged having a lot of credit card debt but
stated that she used credit to benefit herself and Samantha and therefore did not
consider her credit card use to be wasteful.
Scott’s Testimony
Scott testified that he joined the military in 1995. As of the time of trial, he
had no definite plans to retire. When asked about Grace’s testimony, Scott disagreed
with much of it, from Grace’s 401k account and the loan against it, to his financial
arrangement with Grace, to his military retirement benefits. Specifically, Scott
averred that he did not require Grace to send him spreadsheets showing household
expenses, but that the two of them had discussed it and that Grace had been sending
him spreadsheets for years. Scott also testified that he and Grace agreed to maintain
separate bank accounts and finances but had no written agreement to that effect. As
to his military retirement benefit, Scott testified that it was “not a pension. I earned
the right to be able to have the American people pay me $3[,]100 a month for the
rest of my life, however long that would be, for my duty and services to the country
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for 30 years[.]” Scott did not disclose his military retirement benefits in this case
because he did not “think of it as being a piece of property.”
Although Scott denied that he was involved in a physical altercation with
Samantha, he admitted getting into a shouting match with her and hitting her, stating,
“she was crying so I did slap her one time.”
During their marriage, Scott and Grace bought a house in Pflugerville. When
they sold that property, in February 2023, Scott and Grace split the proceeds evenly
and Scott deposited his share into an account ending with the numbers 8910. Scott
later used some of that money to make a payment on the Grapeland property,
property where he and Grace planned to spend their retirement.
As for the property Scott claimed to be separate, Scott testified that he was
awarded the Sandstone property in a previous divorce, and that he lived there with
Grace and Samantha for a while during his marriage to Grace. According to Scott,
this property belonged to his son, even though the property was in Scott’s name,
Scott paid the mortgage, which was paid off during Scott’s marriage to Grace, and
there was no recorded deed reflecting any transfer of ownership from Scott to his
son. When the property was sold, in November 2019, Scott deposited the
approximately $113,000 realized from the sale into his money market fund at First
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Community Credit Union, account number ending 8910.2 According to Scott, the
money in this account came from the sales of the Sandstone and Pflugerville houses,
and the account at First Community Credit Union ending with the number 8910 had
a balance of $151,424.02 on August 1, 2023. Of that amount, Scott gave around
“$45,000[]” to his son, because it was his son’s house, “[a]nd then $50,000 went to
the Grapeland property.”
Scott testified that he opened his FireSafe account in 1998 or 1999 and “left
them in 2008[,]” before he married Grace. According to Scott, there was no money
deposited into that account after 2008, and any increased value of that account
therefore was solely attributable to the account’s increased value.
Scott testified that he was disabled due to PTSD, anxiety, depression, vertigo,
migraines, hearing and vision issues, and spinal problems. Accordingly, Scott stated
that after his eventual retirement from the military, he would be unable to work and
would be surviving on his military retirement benefits of about $3,100 per month.
However, Scott presented no expert medical information to support this contention.
2
Reference to the First Community statements in evidence indicates that 8910 was a member number assigned an account in Scott’s name, only. The account is alternately designated as First Money Market Fund #30. Scott also had First Community accounts in his name with member numbers 0380 and 5800. Member number 1470 was assigned to Scott’s and Grace’s First Community joint account, which later was listed in Grace’s name, only. Grace also had member number xxx4110 assigned to an account in her name.
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Documentary Evidence
The documents in evidence include the parties’ inventories and financial
statements, statements showing purchases and payments, and withdrawals, as well
as money transfers from one account to another. The statements from First
Community Credit Union show that the parties’ accounts earned dividends.
The record also includes some of the parties’ income tax returns, W-2 Forms,
and other payroll records. According to the W-2 Forms, in 2020, Grace earned
$116,886, to Scott’s $62,712. In 2021, Grace earned $101,748, and Scott earned
$66,597. In 2022, Grace earned $86,250 while Scott earned $71,053. In 2023, Scott
earned about $114,096 per year, but by the time of the 2024 trial, Grace’s salary had
fallen to about $64,000 per year. These documents also show deductions from
Scott’s and Grace’s paychecks, such as federal income tax and Social Security.
The Trial Court’s Property Division
In its Final Decree of Divorce, the trial court awarded Grace and Scott the
property in their respective possession in addition to several accounts at the First
Community Credit Union and several debts. The trial court also awarded Grace the
Grapeland property (together with the outstanding debt on the property) and the
FireSafe account. In addition, the trial court ordered Scott to execute a promissory
note to Grace “[f]or the purpose of a just and right division of the marital estate[.]”
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Findings of Fact and Conclusions of Law
Pursuant to Scott’s request, the trial court made Findings of Fact and
Conclusions of Law as follows:
Findings of Fact and Conclusions of Law – Divorce and Division of the Community Estate
1. GRACIELA JARVIS, Petitioner (hereinafter “Petitioner”), and
Respondent were married on May 12, 2009. The date of marriage
was undisputed at trial. The parties ceased to live together as
husband and wife on or about January of 2023.
2. At the time of the filing of this suit, Petitioner and Respondent had
been domiciliaries of Texas for six months, and Petitioner had
been a resident of Montgomery County for ninety days.
3. The marriage has become insupportable.
4. The “Second Amended Petition for Divorce” filed by Petitioner is
in due form and contains all the allegations required by law.
5. This Court has jurisdiction of the parties and of the subject matter
of this case.
6. All legal prerequisites to granting a divorce have been met.
7. The divorce is granted on the ground of insupportability.
8. The court finds that numerous stipulations were made during trial
as to the value of certain assets or liabilities, or as to which party
the asset or liability should be awarded, or as to both the value and
as to the division. A summary of those stipulations are attached to
these findings as Exhibit “B,” which is hereby incorporated by
reference as if restated verbatim. The court finds that the items
highlighted in yellow in Exhibit “B” indicate which items were in
some way agreed to, and the writing next to those items indicate
whether the parties agreed to the value only and not to the division,
9
or whether they were agreed to as both the value and the division,
or whether they were only agreed as to whom the asset or liability
would be awarded, but not as to value. The “÷” symbol is
shorthand for the word “division” in Exhibit “B.” Other shorthand
used in Exhibit “B” include “FMV” for fair market value, “W” for
wife, “H” for husband, and “SP” for separate property. The court
finds that the stipulations of the parties made during trial are
accurately reflected in Exhibit “B,” and that the court is not
required to make findings on issues that the parties agree to at trial,
and is only required to make findings on disputed issues.
9. The court finds that the parties further stipulated and agreed in
Exhibit “B” that certain items are the separate property of
Respondent. Those items are the 2000 BMW K1220LT and the
2001 Kawasaki Vulcan 800. The court confirmed those items as
Respondent’s separate property.
10. The court incorporates by reference Exhibit “1” (and the attached
Exhibit “A” to Exhibit “1”), which is attached hereto and
incorporated by reference as if restated verbatim. Exhibit “1” and
the attached Exhibit “A” to Exhibit “1,” contains the court’s letter
ruling to parties, along with the court’s findings as to
characterization, values, and the division of each asset and liability
in the community estate. The court incorporates those findings into
these findings of fact and conclusions of law.
11. The court finds that Petitioner indicated in her proposed property
division that her child, Samantha, should have the 2013 Toyota
Highlander confirmed as the child’s property. Husband testified at
trial that he wants “Sam” to have that vehicle. The court confirmed
that vehicle as the property of the child, and finds that per the
parties’ testimonies, that issue was undisputed.
12. The court finds that Respondent testified that the FireSafe 401k
account is his separate property because it was acquired prior to
marriage around 1998 or 1999, and that he left employment with
that company in 2008 prior to his marriage and did not contribute
to that account again. The court finds that no exhibits at all were
submitted into evidence as to the FireSafe 401k account to support
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Respondent’s contentions. The court finds that Wife contended at
trial that this account is community property. Respondent failed to
trace the FireSafe 401k account by clear and convincing evidence
as his separate property. However, even if Respondent [] had
traced the Fire[S]afe 401k account as his originating from his
separate property, Respondent commingled community funds in
that account (interest on the account since their marriage in 2009
to the present) and did not trace out his separate property funds
from the commingled funds, and the funds remained commingled
beyond re-segregation at the time of trial. Respondent failed to
even show what the balance was on the date prior to marriage
versus the currant balance as of the time of trial. Respondent’s
testimony that any increases in value are his separate property are
without support in law, as interest generated from separate
property during marriage is considered community property. The
community property presumption as to the FireSafe 401k has not
been rebutted by Respondent. Even if the FireSafe 401k was the
separate property of Respondent, the FireSafe 401k is commingled
beyond re-segregation and is presumed to be community property.
13. The court finds that Petitioner presented expert testimony tracing
out the separate portion of Respondent’s military pension from the
community portion of that pension. It was undisputed that a
portion of that military pension was earned during the marriage,
despite Respondent taking the untenable position that it was 100%
his separate property. The court finds that the expert was credible
and that he properly applied present value calculations to
determine the present value of the military pension, both in total
and with respect to the community estate’s portion. The court
found, based on the expert’s testimony, that the sum of
$363,716.00 is the community portion of the present value
calculation of Respondent’s military retirement. The court
awarded the full sum of $363,716.00 (the community portion of
the present value of the military pension) to Respondent due to
credible testimony that even if the court were to award a portion
of that sum to Petitioner, Respondent would be able to make
elections upon retirement that could potentially preclude Petitioner
from ever receiving any of it.
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14. The parties stipulated that the total balance of Petitioner’s 401k at
Mission Mortgage of Texas, before subtracting out any loans, is
$49,188.80. Petitioner contended that she had taken a loan against
her 401k in the sum of $20,507.00, and provided credible evidence
of same. The court finds that the net balance of Petitioner’s 401k
at Mission Mortgage of Texas is $28,681.80. The court awarded
Petitioner her 401k at the net value of $28,681.80.
15. The court finds that although the parties did not stipulate at trial to
the value of the 2017 Dodge Ram vehicle, they did stipulate to the
debt on the vehicle being the sum of $47,584.44. Further the court
finds that both parties listed the fair market value of that vehicle in
each of their own sworn inventory and appraisements at the sum
of $50,734.00. Therefore, the court found that the net fair market
value of this vehicle is $3,149.56.
16. The court finds that the parties agreed that each one would be
awarded the personal property and furniture and possessions that
is in his/her own possession. Petitioner did not present any
evidence as to the value of the personal property in each party’s
possession, and Respondent was the only party to include a value
($20,000.00) as to the personal property in his sworn inventory and
appraisement. Respondent also testified that Petitioner was in
possession of $20,000.00 worth of personal property. The court
awarded the personal property in the possession of Petitioner at the
value of $20,000.00 and awarded Respondent the personal
property in his possession at the value of zero.
17. The court finds that there was undisputed testimony that shortly
after Petitioner filed for divorce, one of the joint bank accounts
contained the balance of $151,424.02. The court finds that
Respondent made a withdrawal by check of $51,424.02 on August
3rd, and another cash withdrawal of $50,000.00 on that same day,
and one week later another withdrawal of $50,000.00, leaving that
bank account with a zero balance. Respondent’s sworn inventory
and appraisement showed that Respondent had $100,000.00 of
cash on hand. During trial, Respondent stated that he gave
$45,000.00 of that money to his son, that he spent $45,000.00 of
that money on his attorney[’s] fees, and that he spent
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approximately $10,000.00 of that money on truck repairs[,] etc. He
also admitted that he still had the check withdrawal of $51,424.02
in the form of a check. The court awarded the sum of $45,000.00
to Respondent (the sum he allegedly gave to his son), and awarded
the remaining $51,424.00 that was still accounted for in check
form to Petitioner. The court considered the $45,000.00 that was
spent on attorney[’]s fees when it considered the amount of
attorney[’]s fees wife charged on credit cards during the marriage,
and when it ordered that both parties pay their own attorney[’]s
fees.
18. The court finds that no one presented any evidence on the value of
the Chase Prime Visa Points listed in Petitioner’s inventory. The
court awarded those points to Petitioner as she is the one who
requested that they be awarded to her, and did so at no value as no
value was offered by either party at trial nor on their sworn
inventory and appraisements.
19. The court finds that Petitioner has a long history of frivolous
spending and charging on credit cards, and accruing large balances
on same. The parties stipulated to the unsecured liabilities values
and their division to each party. At the time of the divorce, Wife
had accrued credit card debts in the approximate sum of
$60,000.00, and was awarded that debt by agreement and
stipulation at trial. The court considered that as one of the factors
when it arrived at a 60/40 division of the community estate in favor
of Husband and finds that it is a just and right division of the
community estate, along with other considerations and factors set
forth below.
20. The parties stipulated that the value of the Hilton Grand Vacations
Time Share is -$11,947.21. The parties disagreed as to whether
there were outstanding dues, fees, and taxes of -$1,339.43 owing
on the time share. The court found that this debt existed and
awarded both the time share and the existing debt on it to
Respondent as part of the just and right division of the marital
estate.
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21. The court finds that Petitioner’s reimbursement claim as to the
Sandstone property was not persuasive nor even clear and the court
did not grant reimbursement to the community estate as she
requested.
22. The court finds that Respondent’s reimbursement claims, as set
forth in his sworn inventory and appraisement which was admitted
into evidence, were not credible. The reimbursement claim for the
payment of $10,000.00 of community funds for community debts
Petitioner incurred on credit cards was not a proper claim. The
reimbursement claim for the cost of raising a step child is not
supported in law. And the reimbursement claim that alleges he
used separate property funds to make a down payment on the
Grapeland property was never proven, and certainly not by clear
and convincing evidence. He further failed to fully answer
discovery requests on issues of reimbursement, which limited his
claims at trial.
23. The court finds that Respondent’s testimony was less credible than
Petitioner’s testimony with respect to unsupported legal
contentions and values.
24. In dividing the marital estate, the Court took into consideration the
following factors in making a determination of a just and right
division:
a. fault in the breakup of the marriage;
b. disparity of earning power of the spouses and their ability to
support themselves;
c. health and ages of the spouses;
d. education and future employability of the spouses;
e. community indebtedness and liabilities;
f. tax consequences of the division of property;
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g. earning power, business opportunities, capacities, and abilities
of the spouses;
h. need for future support;
i. nature of the property involved in the division;
j. wasting of community assets by the spouses;
k. the size and nature of the separate assets of the spouses.
25. The court finds that in order to reach a just and right division of
the marital estate, and due to the largest asset in the marital estate
(the community portion of Respondent’s military pension) being
awarded to Respondent for the reasons stated in item #13 above, it
was necessary to award a money judgment against Respondent and
in favor of Petitioner in order to achieve a 60/40 division in
Respondent’s favor. The court finds that the money judgment,
secured by a promissory note, in the sum of $46,030.38 was
necessary in order to effectuate a 40% division to Petitioner and a
60% division to Respondent. The court finds that there was
credible evidence that the division of the military pension was not
a viable option due to the reasons stated in item #13 above.
26. The court considered the factors set forth in Murff v. Murff, 615
S.W.2d 696, 699 (Tex. 1981) in dividing the marital estate, and the
court’s division is a just and right division of the marital estate.
27. The court finds that the disproportionate division of the marital
estate as set forth [i]n the Final Decree of Divorce, is a just and
right division of the marital estate.
28. The division of the property of Petitioner and Respondent effected
by the final judgment is just and right, having due regard for the
rights of each party.
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Findings of Fact and Conclusions of Law – Spousal Maintenance
29. Respondent requested that the court award him spousal
maintenance but the court finds that Respondent did not provide
sufficient evidence that he was entitled to Chapter 8 spousal
maintenance. The court finds that Respondent did not provide
credible nor sufficient evidence that he lacks sufficient property,
including separate property, to provide for his minimum
reasonable needs. The court further finds that Respondent never
provided credible evidence of what his minimum reasonable needs
are. The court finds that the only evidence Respondent provided
was exhibit R-21, which is Respondent’s financial information
statement dated 11/20/23. No testimony was provided to clarify
whether Respondent’s expenses in R-21 included expenses he was
paying for Petitioner (examples: “Clothing for family” and Salon
expenses”) and the expenses do not appear to be reflective of his
minimum reasonable needs (example: gas $1,100.00). Further, the
financial information statement asserts that Respondent pays
$1,775.00 a month in mortgage payments, but the only real
property that Respondent lists as owning in his sworn inventory
and appraisement is the Grapeland property, which was awarded
to Petitioner in the Final Decree of Divorce. Further, Respondent’s
own testimony at trial was that the Grapeland property mortgage
is only $1,000.00 a month. The court finds that there is no credible
evidence to establish Respondent’s actual minimum reasonable
needs.
30. The court finds that Respondent did not assert a statutory ground
in Chapter 8 of the Texas Family Code upon which he was basing
his claim for spousal maintenance. However, even if he had clearly
asserted a statutory basis for his claim, the court finds that
Respondent failed to prove that after the divorce he would lack
sufficient property, including his separate property, to provide for
his minimum reasonable needs.
31. The court finds that Respondent testified that he planned to retire
in the near future. However, he did not state a specific date on
which he was to retire. Petitioner’s expert report indicates that
Respondent’s retirement date is August 5, 2024, should he choose
to actually retire. Further, the report states that Respondent will
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receive $3,043.00 per month in pay from his military pension.
Respondent was awarded 100% of his military pension (a portion
of it being community property and a portion of it being his
separate property). The present value calculation of the entire
military pension (separate and community portions combined) is
$516,936.00, and 100% of that was awarded to Respondent. The
community portion of that asset ($363,716.00) is the largest asset
in the community estate.
32. The court finds that Respondent testified that he gifted his son
$45,000.00 of cash (that he withdrew from a community bank
account) during the pendency of the divorce. The court finds that
Respondent’s testimony as to his need for spousal maintenance is
not credible.
33. The court finds that Respondent testified that in 2019 he gifted his
son the net sales proceeds of the separate property Sandstone
residence (approximately $113,000) that he owned prior to the
marriage and that he sold during the marriage. He testified that he
promised this house to his son. He further tried to claim that the
$50,000.00 down payment on the Grapeland property was separate
property funds from the sale of the Sandstone residence, contrary
to his testimony that he gifted his son the net sales proceeds of the
Sandstone property. The court finds that Respondent’s testimony
as to his need for spousal maintenance is not credible.
34. The court finds that at the time of the trial, Respondent’s net
income per month per his financial information statement is
$8,412.00. Respondent’s testimony seemed to indicate that he is
not required to retire from the military at the retirement age of 60,
on August 5, 2024, but that was his plan to do so.
35. Respondent does not lack the ability to earn sufficient income to
provide for his minimum reasonable needs.
36. After the dissolution of marriage, Respondent will not lack
sufficient property, including separate property, to provide for his
minimum reasonable needs.
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37. To the extent the Respondent made a claim for spousal
maintenance on the basis of disability, Respondent did not prove
that after the dissolution of marriage, Respondent will not lack
sufficient property, including separate property, to provide for his
minimum reasonable needs. Further, he did not prove that he
suffers from an incapacitating physical or mental disability that
causes him to earn insufficient income to meet his minimum
reasonable needs.
38. The court finds that testimonial evidence was presented that
Respondent indicated in his sworn Interrogatory responses that he
was not entitled to spousal maintenance.
39. Respondent is not eligible for spousal maintenance under the
Texas Family Code.
40. Respondent’s request for spousal maintenance should be denied.
ANALYSIS
In his appeal, Scott contends that the trial court erroneously characterized
certain separate property as community property and thus improperly divested him
of his separate property by awarding these items of property to Grace. A common
thread running through each of Scott’s arguments is that since he testified to the
separate nature of the property, and since Grace offered no contradictory testimony
or other evidence, the trial court should have decided that these assets were his
separate property.
The Texas Family Code requires the trial court to divide a marital estate in a
manner the court deems “just and right,” having due regard for the rights of the
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parties and any children of the marriage. Tex. Fam. Code Ann. § 7.001. A divorce
court generally may exercise broad discretion in dividing the estate. Schlueter v.
Schlueter, 975 S.W.2d 584, 589 (Tex. 1998); Ohendalski v. Ohendalski, 203 S.W.3d
910, 914 (Tex. App.—Beaumont 2006, no pet.). Absent evidence showing an abuse
of discretion, the trial court’s division of a marital estate will not be disturbed on
appeal. See Murff, 615 S.W.2d at 698. A court abuses its discretion when it acts
without reference to any guiding rules or principles, or alternatively, when its acts
are arbitrary or unreasonable. Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990).
A “party attacking the property division bears the heavy burden of showing that the
trial court’s property division was not just and right.” Pletcher v. Goetz, 9 S.W.3d
442, 446 (Tex. App.—Fort Worth 1999, pet. denied) (op. on reh’g).
We apply a two-part test when reviewing alleged characterization errors. See
In re Marriage of Cruey, No. 09-21-00125-CV, 2022 Tex. App. LEXIS 6577, at
**13-14 (Tex. App.—Beaumont Aug. 31, 2022, no pet.) (mem. op.) (citation
omitted). Under this test, Scott must show both a characterization error and harm,
meaning a division or an order that is manifestly unjust and unfair. Id.
In this case, the trial court entered findings of fact and conclusions of law.
Findings of fact entered in a case tried to the court have the same force and dignity
as a jury’s answers to jury questions. See Anderson v. City of Seven Points, 806
S.W.2d 791, 794 (Tex. 1991). We apply the same legal sufficiency standards in
19
reviewing a trial court’s findings of fact as when reviewing evidence supporting a
jury’s answer. See Catalina v. Blasdel, 881 S.W.2d 295, 297 (Tex. 1994). In a bench
trial, the court, as fact finder, is the exclusive judge of the witnesses’ credibility and
the weight given their testimony and is free to resolve any inconsistencies in the
evidence. See Iliff v. Iliff, 339 S.W.3d 74, 83 (Tex. 2011). The trial court is free to
believe some, all, or none of a witness’ testimony. See Rivas v. Rivas, No. 01-10-00585-CV, 2012 Tex. App. LEXIS 412, at *5 (Tex. App.—Houston [1st Dist.] Jan.
19, 2012, no pet.) (mem. op.).
“All property, both real and personal, of a spouse owned or claimed before
marriage, and that acquired afterward by gift, devise or descent, shall be the separate
property of that spouse[.]” Tex. Const. art. XVI, § 15. The Texas Family Code
defines separate property as that property owned or claimed by a spouse before
marriage, acquired during the marriage by gift, devise, or descent, and the recovery
for personal injuries sustained during the marriage except for the loss of earning
capacity. Tex. Fam. Code Ann. § 3.001. Community property consists of the
property, other than separate property, acquired by either spouse during the
marriage. Id. § 3.002. In Texas, property possessed by either spouse during or on
dissolution of the marriage is presumed to be community property, absent clear and
convincing evidence to the contrary. Id. § 3.003. Clear and convincing evidence is
the degree of proof that will produce in the mind of the trier of fact a firm belief or
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conviction about the allegations sought to be established. Id. § 101.007; Transp. Ins.
Co. v. Moriel, 879 S.W.2d 10, 31 (Tex. 1994). To overcome this presumption, the
spouse that claims the property as separate property must trace and clearly identify
the property claimed to be separate, which involves establishing the separate origin
of the property with evidence showing the time and means by which the property
was acquired by the spouse. Smith v. Smith, 22 S.W.3d 140, 144 (Tex. App.—
Houston [14th Dist.] 2000, no pet.) (op. on reh’g). The characterization of property
as either community or separate is determined by the inception of title to the
property. Id. at 145. Inception of title occurs when a party first has a right of claim
to the property by virtue of which title is finally vested. See id. (citing Strong v.
Garrett, 224 S.W.2d 471, 474 (Tex. 1949), and Winkle v. Winkle, 951 S.W.2d 80,
88 (Tex. App.—Corpus Christi 1997, pet. denied)). If the evidence shows separate
and community property has been commingled so as to defy resegregation and
identification, the burden is not discharged and the statutory presumption prevails.
See McKinley v. McKinley, 496 S.W.2d 540, 543 (Tex. 1973). Mere testimony that
property was purchased with separate property funds, without any tracing of the
funds, is generally insufficient to rebut the community presumption. McElwee v.
McElwee, 911 S.W.2d 182, 188 (Tex. App.—Houston [1st Dist.] 1995, writ denied)
(citing Schmeltz v. Garey, 49 Tex. 49, 60-61 (Tex. 1878)). “Any doubt as to the
character of property should be resolved in favor of the community estate.” Boyd v.
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Boyd, 131 S.W.3d 605, 612 (Tex. App.—Fort Worth 2004, no pet.) (citing Akin v.
Akin, 649 S.W.2d 700, 703 (Tex. App.—Fort Worth 1983, writ ref’d n.r.e.)).
The Family Code explains the spouses’ power to manage certain community
property as follows:
(a) During marriage, each spouse has the sole management, control, and
disposition of the community property that the spouse would have
owned if single, including:
(1) personal earnings;
(2) revenue from separate property;
(3) recoveries for personal injuries; and
(4) the increase and mutations of, and the revenue from, all property
subject to the spouse’s sole management, control, and disposition.
(b) If community property subject to the sole management, control, and
disposition of one spouse is mixed or combined with community
property subject to the sole management, control, and disposition of the
other spouse, then the mixed or combined community property is
subject to the joint management, control, and disposition of the spouses,
unless the spouses provide otherwise by power of attorney in writing or
other agreement.
(c) Except as provided by Subsection (a), community property is
subject to the joint management, control, and disposition of the spouses
unless the spouses provide otherwise by power of attorney in writing or
other agreement.
Tex. Fam. Code Ann. § 3.102.
The Family Code further states that
(a) During marriage, property is presumed to be subject to the sole
management, control, and disposition of a spouse if it is held in that
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spouse’s name, as shown by muniment, contract, deposit of funds,
or other evidence of ownership, or if it is in that spouse’s possession
and is not subject to such evidence of ownership.
Id. § 3.104(a).
In other words, property held in the name of one spouse is not necessarily
separate property but may instead be special community property, which is
community property that is subject to one spouse’s sole management, control, and
disposition. Wadhwa v. Wadhwa, 720 S.W.3d 169, 185-86 (Tex. App.—Houston
[14th Dist.] no pet.). Although the spouse in whose name the property is held has the
power to dispose of that property, “that spouse’s disposition of his special
community property must still be fair to the other spouse, and the managing spouse
has the burden to show that the disposition of the property was fair.” Id. (citations
omitted).
Issue One: The FireSafe 401k Account
In his first issue, Scott claims that the trial court erroneously classified this
account as commingled community property. To the contrary, Scott contends that
this account was his separate property because he opened the account before he
married Grace and did not contribute to the account during the marriage. To support
his position, Scott relied on his own testimony and his Exhibit 12, a quarterly
statement showing the value of Scott’s FireSafe account as of December 31, 2022.
Scott contended that, “The statement does not refer or identify any interest that
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would have been earned or paid.” 3 Therefore, according to Scott, his uncontradicted
testimony sufficed to constitute the necessary clear and convincing evidence that the
content of this account was his separate property.
We addressed a similar situation in Daigle v. Daigle, wherein the husband
testified that the retirement account was not opened during the marriage, but was
renamed after a corporate merger, and that “he had not put money into or taken
money out of the account during his marriage . . . .” No. 09-14-00399-CV, 2015 Tex.
App. LEXIS 9029, at **3-4, 7 (Tex. App.—Beaumont Aug. 27, 2015, pet. denied)
(mem. op.). The trial court held that the account was community property, and we
affirmed that decision, noting that despite the husband’s testimony to the contrary,
“[t]here was a lack of documentary evidence to clearly establish that the funds used
to establish account number XXXXX8743 were [his] separate property.” Id. at **7,
14. We determined that the husband had not overcome the presumption of
community property and that the evidence before the trial court was legally and
factually sufficient to support the trial court’s findings. Id. at **14-15. Here, as in
Daigle, we have only Scott’s testimony and his interpretation of a single piece of
3
Although we resolve this issue on the basis of a failure of clear and convincing evidence of the property’s separate status, we observe that this exhibit does refer to an annualized rate of return of 5.21 percent since the account’s inception and further shows that Scott owned 1,338.186622 units on October 1, 2022 and owned 1,338.552752 units on December 31, 3022. This information indicates that Scott’s FireSafe account did pay interest or dividends.
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evidence. Without tracing the funds and accounting for the rate of return shown on
the evidence itself, Scott cannot overcome the presumption that this account was
community property. The trial court consequently did not err by finding that this
account contained commingled community property.
Scott further contended that the trial court misinterpreted evidence, and that
contrary to the trial court’s Findings of Fact, Grace did not contend that this account
was community property. Therefore, Scott argues, “the evidence is factually
insufficient to support the Trial Court’s finding that [Grace] contended at trial that
the Firesafe Retirement Account was community property[,]” and “[w]ithout this
erroneous finding, the uncontroverted evidence presented by [Scott] would have
proven the character of the account to be separate property by clear and convincing
evidence.” We disagree.
Scott bore the burden of proving by clear and convincing evidence that the
property in question was his separate property. See id. at *10. Grace bore no burden
to show otherwise. See id. Absent the required clear and convincing evidence, the
party with the burden of proof, Scott, cannot prevail. See id. Scott’s reliance on case
authority holding that “[t]he burden of clear and convincing evidence can be
uncontroverted evidence[]” is misplaced. Scott relied on Pace v. Pace and Smith to
support this position. See 160 S.W.3d 706, 715 (Tex. App.—Dallas 2005, pet.
denied); 22 S.W.3d at 150. The authority Scott cites is specific to the facts of those
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cases and does not require a court to accept uncontroverted evidence in every case.
In Pace, the husband admitted the “house was purchased completely with [the
wife’s] separate property account[,]” and Smith references evidence that could have
supported a decision in favor of either party. See Pace, 160 S.W.3d at 712; Smith,
22 S.W.3d at 150.
Since the trial court did not abuse its discretion in holding that this account
was community property, we overrule Scott’s initial appellate issue.
Issue Two: Account Ending in 8910
Scott’s second issue posits that the trial “court erred by finding that the First
Community Credit Union account ending in *8910 was a joint account.” Scott bases
this argument on the premise that he opened this account with money that came from
the sale of a house that was his separate property.
The records that are in evidence show the following deposits to and
withdrawals from this account:
November 12, 2019 $113,750.28 (opening deposit)
November 30, 2019 47.19 (dividend paid)
January 31, 2020 76.87 (dividend paid)
February 26, 2020 50,140.04 (withdrawal)
February 26, 2020 22.00 (withdrawal)
February 29, 2020 63.35 (dividend paid)
January 31, 2023 81.47 (dividend paid)
February 1, 2023 90,500.00 (deposit)
February 28, 2023 163.72 (dividend paid)
August 3, 2023 51,424.02 (withdrawal)
August 3, 2023 50,000.00 (withdrawal)
August 10, 2023 50,000.00 (withdrawal)
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The account opening, like the other transactions shown, took place during the
marriage. Therefore, the funds in the account were presumed to be community
property. See Smith, 22 S.W.3d at 144-45.
Although Scott testified that he made the opening deposit with his separate
property, since the deposit was derived from the sale of his separate property, Scott
did not support this contention with documentation showing that he was paid
$113,750.28 from the sale of his alleged separate property. Instead, Scott relied on
his testimony that the Sandstone house was his separate property and that he realized
$113,750.28 from the sale of that property. Even assuming without deciding that the
Sandstone house was Scott’s separate property,4 the trial court had only Scott’s
testimony that he realized $113,750.28 from the sale of this house. Since Scott’s
“[m]ere testimony that property was purchased with separate property funds, without
any tracing of the funds, is generally insufficient to rebut the presumption[,]” the
trial court correctly resolved “[a]ny doubt as to the character of” this account “in
favor of the community estate.” McElwee, 911 S.W.2d at 188; Boyd, 131 S.W.3d at
4
Although there is no dispute that Scott owned the Sandstone house before he married Grace in 2009, there is also no dispute that Scott made mortgage payments on this house during his marriage to Grace. Since the record does not show that Scott made these mortgage payments from his separate property, we presume that he used community property to do so. See In re Marriage of Cruey, No. 09-21-00125-CV, 2022 Tex. App. LEXIS 6577, at *11 (Tex. App.—Beaumont Aug 31, 2022, no pet.) (mem. op.) (the presumption that property possessed during the marriage is community property).
27
612. Consequently, Scott did not discharge his burden of showing that the money in
credit union account 8910 was his separate property. See McKinley, 496 S.W.2d at
543.
We overrule Scott’s second issue.
Issue Three: The Grapeland Property
Scott’s final issue contends that Scott paid the down payment on the
Grapeland property with his separate property, referring to the account discussed
above. Therefore, according to Scott, the trial court erred by “not [c]haracterizing
the Grapeland property as [his] [s]eparate [p]roperty.” This argument, however,
presupposes that account 8910 was Scott’s separate property. As we discussed
above, however, Scott’s evidence failed to prove that proposition.
According to Scott’s testimony, he realized slightly over $113,000 from
selling the Sandstone house and of that amount, he transferred “around $45,000[]”
to his son because it was the son’s house “[a]nd then $50,000 went to the Grapeland
property[,]” in February 2020. Scott then argues that the last $50,000 withdrawn
from the 8910 account on August 10, 2023 was his separate property and this
withdrawal proves that he made the down payment on the Grapeland property in
2020 with his separate property funds.5
Although Scott also references a $50,000 withdrawal made on June 10, 2023,
5
the context indicates that this date was a clerical error, since the records of First
28
Scott failed to trace the funds used to make the down payment on the
Grapeland property to a sale of separate property and relied instead on his own
testimony. As we noted in connection with Scott’s prior issues, however, Scott’s
testimony alone, is not enough to overcome the community property presumption.
See McElwee, 911 S.W.2d at 188; Boyd, 131 S.W.3d at 612. Although Scott’s
Exhibit 9, a statement from First Community Credit Union, shows an outgoing wire
transfer in the amount of $50,140.04 on February 26, 2020, the record neither shows
that this money was Scott’s separate property nor that it was used to make a down
payment on the Grapeland property. Scott therefore has failed to trace the origin and
destination of the funds in question and has not overcome the community
presumption by clear and convincing evidence. See McElwee, 911 S.W.2d at 188;
Boyd, 131 S.W.3d at 612.
We overrule Scott’s final issue.
CONCLUSION
Having overruled all three of Scott’s appellate issues, we affirm the trial
court’s Final Decree of Divorce.
Community Credit Union does not show that Scott withdrew $50,000 on June 10, 2023.
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AFFIRMED.
JAY WRIGHT
Justice
Submitted on September 21, 2026
Opinion Delivered October 1, 2026
Before Johnson, Wright and Chambers, JJ.
30