Opinion issued=20
October 5, 2006
In=20
The
Court of =
Appeals
For=20
The
First District of=20
Texas
NO.=20
01-05-00941-CV
REGINALD EDMUND =
McKAMIE SR.,=20
Appellant
V.
GENEVA WINFIELD =
McKAMIE,=20
Appellee
On Appeal from the =
308th=20
District Court
Harris County,=20
Texas
Trial Court Cause =
No.=20
2004-18874
MEMORANDUM=20
OPINION
=
Appellant,=20
Reginald Edmund McKamie Sr., appeals from the trial =
court=E2=80=99s final divorce=20
decree, complaining that the trial court did not make a =
=E2=80=9Cjust and right=E2=80=9D=20
division of the community assets and liabilities. In five issues,=20
appellant challenges the legal and factual sufficiency of the =
evidence=20
supporting the trial court=E2=80=99s findings of fact and =
conclusions of=20
law, ![3DFootnote](3D"")
division of the =
community=20
assets and liabilities, valuation of the marital residence, =
valuation of=20
other assets and liabilities, and exclusion of appellant=E2=80=99s =
expert=20
testimony regarding the fair market value of the marital =
residence. We=20
affirm.
BACKGROUND
<=
/SPAN>Appellant=20
and appellee were married on August 23, 1975. They have two =
children, who=20
were 18 and 25 at the time of the divorce. Appellant is a lawyer =
and=20
maintains a solo plaintiff=E2=80=99s personal injury law practice, =
has a masters=20
degree in business administration, and is a certified public =
accountant.=20
As a trial attorney, his income varies from year to year. =
Appellant=20
testified that, in 1999, he earned a $1.3 million fee from a =
single case,=20
in addition to other fees during that year. He testified that, in =
2000, he=20
made $377,000 from his law practice. Appellant produced income tax =
documents showing that his income was $73,577 in 2002 and $111,546 =
in=20
2003. Appellee is a teacher in the Spring Branch Independent =
School=20
District and holds a master=E2=80=99s degree. She testified that =
her salary is=20
$48,000 per year.
=
In=20
1999 and 2000, the McKamies did extensive remodeling of their =
residence.=20
This remodeling was completed in early 2001. The trial court =
found, in=20
finding of fact C.5, that they spent approximately $335,000 on the =
remodeling. At trial, the testimony of appellant=E2=80=99s expert =
regarding the=20
fair market value of the residence was excluded on the objection =
of=20
appellee that appellant had not produced all the documentation, as =
requested by appellee, that the expert relied on in preparing his=20
appraisal. Appellant testified that, in his opinion, the fair =
market value=20
of the residence was $720,000. Appellee=E2=80=99s trial inventory =
and appraisement=20
was admitted into evidence. This inventory listed the fair market =
value of=20
the residence as $531,451, using the 2005 Harris County appraisal =
District=20
(HCAD) value. Appellee testified that, in her opinion, the fair =
market=20
value of the residence was a little less than the tax-appraised =
value.=20
Also admitted into evidence was an Agreed Final Judgment in the =
McKamies=E2=80=99=20
suit against HCAD. In that judgment, the parties agreed that the =
appraised=20
value and the market value of the residence was $440,000 in 2002 =
and=20
$450,000 in 2003.
=
The=20
parties each testified regarding their expenditures and debts =
incurred=20
during the previous five or six years. Appellant testified that =
appellee=20
was very involved in the financial transactions and that they =
shared=20
responsibility for maintaining the family=E2=80=99s income and =
expenditures.=20
Appellee testified that, while she generally paid the bills and =
balanced=20
the check register, she was not involved in, and often did not =
know about,=20
many of the loans appellant received from financial institutions =
and=20
relatives.
=
The=20
trial court, in conclusion of law number 11 (which is actually a =
finding=20
of fact), found that appellee=E2=80=99s trial inventory reflected =
the value of the=20
parties=E2=80=99 assets. The court rendered a decree that divided =
the marital=20
assets and liabilities as proposed by appellee. Appellee=E2=80=99s =
proposed=20
division shows a net amount of $460,043 awarded to appellee and =
$443,780=20
awarded to appellant. Thus, appellee received 50.9% and appellant =
received=20
49.1% of the community estate.
DISCUSSION
Standard of =
Review
<=
/SPAN>In=20
a decree of divorce, the court shall order a division of the =
community=20
estate in a manner that the court deems just and right, having due =
regard=20
for the rights of each party. Tex.=20
Fam. Code Ann. =C2=A7 7.001 (Vernon 2005); Rafferty v. =
Finstad,=20
903 S.W.2d 374, 376 (Tex. App.=E2=80=94Houston [1st Dist.] 1995, =
writ denied). In=20
effecting a just and right division of the community estate, =
section 7.001=20
of the Family Code vests the trial court with broad discretion =
that will=20
not be reversed on appeal unless the complaining party shows that =
the=20
trial court clearly abused its discretion. Murff v. Murff, =
615=20
S.W.2d 696, 698 (Tex. 1981); Rafferty, 903 S.W.2d at 377. =
The test=20
of whether the trial court abused its discretion is whether the =
court=20
acted arbitrarily or unreasonably, and without reference to any =
guiding=20
principles. Turner v. Turner, 47 S.W.3d 761, 763 (Tex. =
App.=E2=80=94Houston=20
[1st Dist.] 2001, no pet.). Under the abuse-of-discretion =
standard, legal=20
and factual sufficiency of the evidence are not independent =
grounds for=20
asserting error, but are relevant factors in determining whether =
the trial=20
court abused its discretion. Dunn v. Dunn, 177 S.W.3d 393, =
396=20
(Tex. App.=E2=80=94Houston [1st Dist.] 2005, pet. denied) (citing =
Pickens v.=20
Pickens, 62 S.W.3d 212, 214 (Tex. App.=E2=80=94Dallas 2001, =
pet. denied)).=20
=
A=20
trial court may order an unequal division of the community =
property when a=20
reasonable basis exists for granting relief. Robles v. =
Robles, 965=20
S.W.2d 605, 621 (Tex. App.=E2=80=94Houston [1st Dist.] 1998, pet. =
denied). The=20
division of property must not be so disproportionate as to be =
inequitable,=20
and the circumstances must justify awarding more than one-half to =
one=20
party. Patt v. Patt, 689 S.W.2d 505, 507 (Tex. =
App.=E2=80=94Houston [1st=20
Dist.] 1985, no writ).
=
If the appellant =
challenges=20
the trial court=E2=80=99s findings of fact in its issues on =
appeal, the appellate=20
court will review the legal and factual sufficiency of the =
evidence to=20
support the findings in the same manner it reviews a =
jury=E2=80=99s findings in a=20
jury trial. Escobar v. Escobar, 728 S.W.2d 474, 475 (Tex. =
App.=E2=80=94San=20
Antonio 1987, no writ); State Bar of Tex. v. Roberts, 723 =
S.W.2d=20
233, 235 (Tex. App.=E2=80=94Houston [1st Dist.] 1986, no writ).=20
Unchallenged findings of fact are binding on the court of =
appeals=20
=E2=80=9Cunless the contrary is established as a matter of law, or =
if there is no=20
evidence to support a finding.=E2=80=9D McGalliard v. =
Kuhlmann, 722 S.W.2d=20
694, 696 (Tex. 1986). If the appellant challenges the trial =
court=E2=80=99s=20
conclusions of law, we review those conclusions de novo and will =
uphold=20
them on appeal if the decree can be sustained on any legal theory=20
supported by the evidence. BMC Software Belg. v. Marchand, =
83=20
S.W.3d 789, 794 (Tex. 2002); In re Moers, 104 S.W.3d 609, =
611 (Tex.=20
App.=E2=80=94Houston [1st Dist.] 2003, no pet.). An appellant may =
not challenge a=20
trial court=E2=80=99s conclusions of law for factual sufficiency, =
but we may=20
review the legal conclusions drawn from the facts to determine =
their=20
correctness. BMC Software, 83 S.W.3d at 794. If we =
determine that a=20
conclusion of law is erroneous, but that the trial court =
nevertheless=20
rendered the proper decree, the error does not require reversal.=20
Id.
Value of the =
residence
=
In=20
his third issue, appellant contends that the trial court erred in =
using=20
the ad valorem tax value as the fair market value of the =
residence.=20
Appellant argues that his testimony that the fair market value of =
the=20
property was at least $720,000 was the only evidence of the fair =
market=20
value. Appellant challenges finding of fact C.6, that =
=E2=80=9CReginald admitted=20
that the market value of the marital residence on 15 Warrenton was =
$450,000 as of June 30, 2004 as reflected in the Agreed =
Judgment=20
filed in the 151st District Court.
=
The=20
trial court=E2=80=99s finding is supported by Petitioner=E2=80=99s =
Exhibit 40, the=20
referenced Agreed Final Judgment, which is signed as =
=E2=80=9Capproved=E2=80=9D by=20
appellant. The trial court did not find that the fair market value =
of the=20
residence in 2005 was $450,000. Presented with the conflicting =
testimony=20
of appellant and appellee, the trial court found that the values =
in=20
appellee=E2=80=99s inventory were correct. For the residence, that =
was $531,451.=20
=
Appellant=20
cites Kuehn v. Kuehn, 594 S.W.2d 158 (Tex. Civ. =
App.=E2=80=94Houston [14th=20
Dist.] 1980, no writ), to support his argument that the ad valorem =
tax=20
value may not be used to determine the fair market value of real =
estate.=20
Kuehn states that the value placed upon real estate for =
purposes of=20
taxation cannot support a fact finding even if there is no =
objection=20
because the evidence is hearsay. Id. at 161. Kuehn =
was=20
issued before the adoption of the Texas Rules of Evidence in 1982, =
to be=20
effective on September 1, 1983. Since that date, the hearsay rule =
has=20
provided, =E2=80=9CInadmissible hearsay admitted without objection =
shall not be=20
denied probative value merely because it is hearsay.=E2=80=9D =
Tex. R. Evid. 802. =
Because=20
appellant did not object to appellee=E2=80=99s trial inventory, =
the court could=20
rely on the values of the property as contained in that inventory. =
In=20
addition, the court could have relied on the testimony of appellee =
that=20
the fair market value of the residence was a little less than the=20
tax-appraised value.
=
Appellant=20
also challenges finding C.5 in which the trial court found that =
the=20
parties spent approximately $335,000 on the house remodeling. =
Appellant=20
testified at trial that they spent $450,000 for the renovation. He =
offered=20
no documentation of the expenditures. Appellee=E2=80=99s spread =
sheet showing all=20
expenditures was admitted into evidence. The total costs, as shown =
on the=20
spread sheet were $337,247. Thus, there was legally and factually=20
sufficient evidence to support the trial court=E2=80=99s finding.=20
=
We=20
overrule appellant=E2=80=99s third issue.
Value of other assets and=20
liabilities
=
In=20
his fourth issue, appellant contends that the trial court erred in =
valuing=20
the other assets and liabilities in dividing the community estate. =
=
Use=20
of the ad valorem tax value for the Kansas property. The trial =
court=20
did not make a specific finding regarding the value of the Kansas=20
property, but appellee=E2=80=99s trial inventory listed it at =
$26,224. The court=20
admitted an exhibit from the Wyandotte County appraiser=E2=80=99s =
office, without=20
objection, showing the 2005 value of the property to be $26,224. =
The trial=20
court could properly rely on that exhibit to determine the value =
of the=20
property. See Tex. =
R.=20
Evid. 802.
=
Treating=20
$248,000 as loans to appellant=E2=80=99s professional =
corporation. Appellee=20
testified that appellant loaned his law practice $248,000 from =
community=20
funds and did not repay the loan. Appellant testified that the =
money was a=20
contribution to the owner=E2=80=99s equity, which was, at the time =
of trial, a=20
negative number.
=
Assigning=20
a $25,000 value to the Morgan Stanley profit sharing account.=20
Appellee=E2=80=99s exhibit 11, a statement of the Morgan =
Stanley account=20
showing a total asset value of $25,085.15 on March 31, 2000, was =
admitted=20
into evidence without objection. Appellant testified that he =
=E2=80=9Cprobably=E2=80=9D=20
withdrew that amount, but produced no documentation of such a =
withdrawal.=20
In the final decree, the trial court awarded that account to =
appellant.=20
=
Valuing=20
the 2005 Honda Civic EX. Appellant argues that the trial court =
assigned a value on $16,160 for the Honda, but that he had an =
outstanding=20
loan of $17,000 on the car. The trial court did not make a =
specific=20
finding regarding the Honda, but relied on appellee=E2=80=99s =
inventory, which=20
gave a fair market value of $16,160, with an =
=E2=80=9Cunknown=E2=80=9D lien. Appellant=E2=80=99s=20
promissory note on the car was admitted into evidence, but there =
was no=20
evidence regarding the current balance on the note. =
=
Sale=20
of the Lexus LS 470 and attorney=E2=80=99s fees. Appellant =
complains that, in=20
spite of a court order restraining the parties from selling or =
encumbering=20
any property, appellee sold her Lexus SUV for $15,000 when its =
Blue Book=20
value was $35,000. He argues that he should have received $17,000 =
credit=20
for what should have been his share of the value of the car. =
However, the=20
trial court apparently made an exception for the Lexus, ordering =
appellee=20
to either pay for the car or get rid of it.
=
Appellee=20
testified that, although she had paid cash for the Lexus, =
appellant,=20
without appellee=E2=80=99s knowledge, had used the Lexus as =
collateral for a=20
$35,000 loan. Appellant challenges the trial court=E2=80=99s =
finding, in C.9, that=20
he took out the loan without appellee=E2=80=99s knowledge. The =
court could=20
reasonably believe appellee=E2=80=99s testimony otherwise. =
=
Appellant=20
also complains that the trial court=E2=80=99s division does not =
account for his=20
attorney=E2=80=99s fees. However, the decree provides that each =
party will be=20
responsible for his or her attorney=E2=80=99s fees. =
=
Community=20
debt. Appellant complains that the =E2=80=9Coverwhelming =
majority=E2=80=9D of the=20
community debts are assigned to him. These debts include a $10,428 =
loan=20
from the Department of Education for one son=E2=80=99s college =
tuition, the 2003=20
federal income taxes, which are $20,000, and a $20,000 loan from=20
appellant=E2=80=99s father. These debts cannot be considered in =
isolation, but as=20
a part of the division of the community estate.
=
College=20
fund. Appellant challenges the trial court=E2=80=99s finding =
C.12 that=20
appellant used =E2=80=9C$160,000 of the boys=E2=80=99 designated =
college education funds=20
for unknown and unexplained reasons.=E2=80=9D The check register =
that was admitted=20
into evidence showed that two checks had been written for $80,000 =
to be=20
deposited into each boys=E2=80=99 college fund. Appellant =
testified that the=20
checks were not deposited into the funds, but were used on the =
house=20
renovation, and that appellee knew that the checks were not =
deposited.=20
Appellee testified that she thought that the college fund checks =
had been=20
written and learned during the divorce litigation that the checks =
had not=20
been negotiated. Thus, there was conflicting testimony on this =
issue.=20
=
$575,000=20
in loans. Appellant challenges the trial court=E2=80=99s =
finding C.8 that=20
appellant borrowed from relatives and financial institutions. The =
findings=20
of fact include a chart showing nine loans from April 2000 to June =
2003=20
totaling $575,000. Most of these loans are from financial =
institutions,=20
one for $20,000 is from appellant=E2=80=99s father, and one for =
$50,000 is from=20
appellant=E2=80=99s mother. Appellant does not dispute the =
existence of these=20
debts, but argues that the proceeds of the loans were used to fund =
his law=20
practice and to pay for family expenses. He did not specify how =
much of=20
the money was used for law practice and how much for the family.=20
=
Appellee=20
testified that she was not involved in obtaining the loans. She =
testified=20
that she may have signed some of the documents, because appellant =
would=20
put documents in front of her with tabs showing her where to sign. =
When=20
she questioned him about the documents, he would say, =E2=80=9CYou =
don=E2=80=99t know what=20
it takes to run a business and we need money.=E2=80=9D =
=
Checks=20
were also written on the McKamies=E2=80=99 personal account as =
loans to=20
appellant=E2=80=99s law practice. Although the check register =
entries were=20
sometimes in appellee=E2=80=99s handwriting, she testified that =
she did not=20
necessarily write the checks. She stated that appellant would =
sometimes=20
write checks without recording them, he would tell her what the =
checks=20
were for, and she would record the information so that she could =
balance=20
the check register.
=
Appellant=20
challenges the trial court=E2=80=99s finding B.6 that appellant =
handled the vast=20
majority of the financial transactions. In support of this =
challenge, he=20
refers to documents signed by appellee, one investment she =
participated=20
in, her teaching career as a source of financial support, and her=20
activities such as paying bills and transferring funds from one =
account to=20
another to make funds available for bill paying as evidence that =
appellee=20
was a full participant in virtually all of the financial =
transactions.=20
Appellant=E2=80=99s testimony was controverted by =
appellee=E2=80=99s testimony that=20
appellant took out major loans and used their residence and her =
car as=20
collateral for some of those loans without her participation or =
knowledge.=20
=
Additional=20
challenges to findings of fact and conclusions of law. =
Appellant=20
challenges several findings of fact that are not related to the =
value of=20
assets or liabilities. Appellant challenges finding C.2 that in =
1999 he=20
earned substantial fees in addition to the $1.3 million fee. =
Appellant=E2=80=99s=20
own testimony that he had =E2=80=9Cseveral=E2=80=9D settlements =
that were more that=20
$50,000 supports finding C.2.
=
Appellant=20
challenges finding C.11 that he deposited over $500,000 into his =
business=20
checking account, but did not repay the community. However, the =
final=20
decree does not award the community a reimbursement. Appellant =
also=20
challenges finding C.4 that he refinanced the marital residence a =
mere two=20
years after receiving the large fee. (He had paid the mortgage in =
full the=20
year he received the fee.) Findings C.11 and C.4 are relevant only =
for the=20
purpose of apportioning the community assets.
=
There=20
is both legally and factually sufficient evidence to support each =
of the=20
challenged findings of fact in this issue: finding of fact B.6 and =
C.2, 4,=20
8, 9, 10, 11, and 12. We hold that the trial court did not abuse =
its=20
discretion in valuing the assets and liabilities of the community. =
Accordingly, we overrule appellant=E2=80=99s fourth =
issue.
Just and right division of the =
community=20
assets
=
In=20
his second issue, appellant challenges conclusion of law 7, =
contending=20
that the trial court did not make a just and right division of the =
community property. Appellant also challenges conclusion of law=20
11,
in which the trial =
court=20
found that the value of the assets was reflected in =
appellee=E2=80=99s inventory.=20
Both parties filed an inventory and a proposed division of the =
assets and=20
liabilities, and these documents were admitted into evidence. The =
trial=20
court, as fact finder, was entitled to believe all, some, or none =
of the=20
evidence presented by the parties. See Hill v. Clayton, 827 =
S.W.2d=20
570, 574 (Tex. App.=E2=80=94Corpus Christi 1992, no writ). Thus, =
the trial court=20
did not abuse its discretion in making a division of the community =
property based on appellee=E2=80=99s inventory.
=
The=20
trial court concluded, in conclusion of law 8, that appellee =
should=20
receive a disproportionate division of the property due to =
appellant=E2=80=99s=20
significant earning capacity. Appellant argues that the =
parties=E2=80=99 earnings=20
are not greatly disproportionate. The record, which shows =
appellant=E2=80=99s=20
earnings of 1.3 million in 1999, $377,000 in 2000, $73,000 in =
2002, and=20
$111,000 in 2003, does not support appellant=E2=80=99s argument. =
Even in the year=20
of his lowest earnings, appellant made approximately one and =
one-half=20
times appellee=E2=80=99s salary of $48,000. Nevertheless, the =
trial court=E2=80=99s=20
division of property resulted in an award of 50.9% to appellee and =
49.1%=20
to appellant, as valued by appellee=E2=80=99s =
inventory.
We hold that this =
property=20
division is not so disproportionate as to be inequitable.=20
=
We=20
overrule appellant=E2=80=99s second issue.
Exclusion of expert=20
testimony
=
In=20
his fifth issue, appellant contends that the trial court abused =
its=20
discretion in excluding the testimony of an expert witness =
regarding the=20
market value of the home. The trial court did not admit the =
testimony from=20
appellant=E2=80=99s expert witness because appellant did not =
disclose information=20
regarding all of the properties the expert had considered in =
estimating=20
the market value of the residence. Appellant contends that the =
trial court=20
erred in not admitting the expert testimony because the appellee =
did not=20
claim that she was surprised by the expert=E2=80=99s testimony. =
=
Section=20
193.6 of the Texas Rules of Civil Procedure states that evidence =
may be=20
excluded if the party fails to =E2=80=9Cmake, amend, or supplement =
a discovery=20
response.=E2=80=9D Tex. =
R. Civ. P.=20
193.6(a). There is an exception to this rule if the trial =
court=20
finds that the improper discovery response does =E2=80=9Cnot =
unfairly surprise or=20
unfairly prejudice the other parties.=E2=80=9D Tex. R. Civ. P. =
193.6(a)(2).=20
However, the =E2=80=9Cburden of establishing . . . the =
lack of unfair=20
surprise or unfair prejudice is on the party seeking to introduce =
the=20
evidence or call the witness. A finding of . . . the =
lack of=20
unfair surprise or unfair prejudice must be supported by the =
record.=E2=80=9D=20
Tex. R. Civ. P. =
193.6(b).=20
Here, the trial court did not make a finding that appellee would =
not be=20
unfairly surprised or prejudiced, and appellant offered no =
evidence on the=20
issue. Therefore, appellant did not meet his burden of =
establishing that=20
appellee was not unfairly surprised.
=
We=20
overrule appellant=E2=80=99s fifth issue.
CONCLUSION
=
We=20
affirm the decree.
=
&=
nbsp; &n=
bsp; &nb=
sp; &nbs=
p; =
; Sam=20
Nuchia
=
&=
nbsp; &n=
bsp; &nb=
sp; &nbs=
p; =
; Justice
Panel consists of =
Justices=20
Nuchia, Jennings, and Higley.=20
|