INTERESTING CASES: September 3, 2014
Sallee S. Smyth
1.
In the Interest of S.K.D. and J.E.D., 2014 Tex. App. LEXIS 7328 (Tex. App. – Dallas
July 8, 2014) (mem. opinion) (Cause No. 05-11-0253-CV)
H and W divorced in 2006 and were named JMC with H having the right to designate primary
residence of their two children. W was ordered to pay $100/month in c/s. One month later W
filed a MTM seeking sole managing conservatorship. In 2007 the trial court referred the case to
mediation. The parties signed an MSA in 2008 leaving them as JMC, naming W as primary of
the daughter with H remaining as primary of the son and obligating H to pay W $1,050 in c/s.
Several months later, W filed an emergency MTM seeking to modify the divorce decree and/or
the MSA. That same date the trial court issued a DWOP order. H filed a motion to reinstate but
non-suited and the court dismissed the case without prejudice. A week later H filed an amended
counter MTM seeking SMC status and asking that W’s visits be restricted and that she undergo
psychological evaluation and drug testing. W timely requested a jury and paid the required fee.
The case went to trial before the court in November 2009 and W was pro se. A year later the
trial court entered an order naming the parties JMC, giving H primary rights, ordering supervised
access by W with one of the children and awarding H $50,000 in attorney’s fees. W appealed
claiming that the trial court erred in failing to enter a judgment on the MSA, improperly
calculated c/s, erred in awarding attorney’s fees and erred by denying her a trial by jury. The
Dallas COA issued is original opinion on August 27, 2013. The COA found sufficient evidence
to support c/s and fees and found W waived her right to jury by failing to object when trial began
before the judge and W failed to announce that she stood on her jury demand. These rulings
from the COA were not unexpected. However, as to the MSA, the COA originally found that the
W’s arguments regarding enforcement of the MSA were based on the provisions of TFC
153.0071 which only apply to suits involving an original determination of conservatorship, not
suits under Chapter 156 involving a modification and the COA affirmed the judgment. Shortly
after this Opinion was issued, it was withdrawn on the court’s own motion. (Clearly someone
figured out how erroneous this decision was!) Nevertheless, while the appeal had been pending,
but before the original Opinion issued, W died. H filed a motion asking the COA to either
dismiss the appeal (as W was now deceased) or issue a new opinion with the same result but
based on alternative reasoning, arguing that the basis for the COA’s initial conclusion is clearly
erroneous. W’s counsel asked the COA to issue a decision on the merits and to reverse and
remand for further proceedings. In a new Opinion issued on July 8, 2014, the Dallas COA
recognizes that the 2008 MSA was enforceable as a contract between the parties notwithstanding
the dismissal of those proceedings in which it had been entered and new proceedings initiated for
modification. The COA recognized that the trial court should have enforced the MSA and
entered judgment upon it according to TFC 153.0071 and In re Lee. In effect the trial
proceedings which resulted from the new suit H initiated after dismissal should never have taken
place therefore the judgment resulting from it was reversed and the proceedings were remanded
to the trial court for further proceedings. In light of W’s death, these further proceeding should
simply require some accounting between H and W’s estate for child support or other amounts
which may have been due under the enforceable 2008 MSA.
2.
Hennig v. Didyk, 2014 Tex. App. LEXIS 8142 (Tex. App. – Dallas July 28, 2014)
(Cause No. 05-13-00656-CV)
In 2005 H designated W as beneficiary on a life insurance policy issued by his employer as a
benefit under ERISA. In 2007, H and W divorced pursuant to an agreed decree which awarded
H all benefits of his employment as well as all life insurance policies insuring his life. H dies in
2010 and the beneficiary designation on H’s policy had never been changed. The probate court
appointed H’s father (Didyk) as administrator of H’s estate and declared H’s parents as his heirs.
Didyk as administrator and ex-W as named beneficiary both made a claim to the life insurance
proceeds. Didyk filed suit under Chapter 9 against ex-W for the proceeds. The insurance
company interpled the proceeds ($377K) into the registry of a federal court under ERISA and
was dismissed from the suit. W moved for SJ in federal court and claimed her right to the
proceeds under ERISA. The federal court agreed and issued an opinion ordering the life
insurance proceeds paid to the W however the opinion noted that claims by Didyk, estate
administrator, against W for enforcement and breach of the agreed decree were solely within the
jurisdiction of the state court issuing the decree under TFC Chapter 9 and expressed no opinion
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as to whether ex-W was ultimately entitled to retain the insurance benefit proceeds, stating that
this was a matter for the state court to determine. After the federal court opinion, Didyk
amended his claims to argue that TFC 9.301 made the designation of W as beneficiary
ineffective as a matter of law. Ex-W amended her answer to include the affirmative defense of
ERISA preemption and res judicata based on the federal court decision. A trial was held. At
trial a fellow employee of the deceased H testified about assisting H in changing the beneficiary
designation via the computer but she also testified that she later learned that a form was also
required to be signed and sent to the insurance company which was not done, making the
beneficiary change ineffective. The trial court concluded that the benefits (which were then held
in the state court registry) should be awarded to Didyk, as administrator of H’s estate and signed
a judgment to that effect. Ex-W appealed. In her first issue, ex W claimed that the trial court
erred in finding that TFC 9.301 applied because it was preempted by ERISA. The COA
determined that there was no need to decide ex W’s preemption argument in the application of
TFC 9.301 because under the agreed final decree, ex W waived all of her rights to the insurance
policy benefits and thus the case should be decided as a matter of contract law under the
administrator’s breach of contract claim. However, the COA did consider whether ERISA
preempted a post-distribution action against ex-W since the insurance provider had already
distributed the proceeds to ex W as ERISA required. Citing to the U.S. Supreme Court decision
Kennedy v. Plan Administrator for Dupont Savings & Investment Plan, 555 U.S. 285 (2009), the
COA noted that plan administrators must distribute proceeds to named beneficiaries under
ERISA to promote its objectives for simple administration, avoiding double liability and
ensuring beneficiaries get the benefits quickly. But the Kennedy decision explicitly left open the
question of whether or not an ERISA beneficiary could be sued by a decedent’s estate to recover
the funds after they had been distributed. The COA found that allowing an estate to sue an
ERISA beneficiary after distribution did not interfere with any of the ERISA objectives and that
federal preemption did not apply, noting that the dispute was now simply a contract dispute
based on ex W’s waiver of the insurance proceeds at the time of the divorce. Ex wife further
argued that she only waived her rights to the policy and not the proceeds in the decree. The
COA found that the terms of the decree which awarded H all of his employment benefits (which
included the life insurance policy) made it clear that the decree intended to divest ex-W of any
and all interest in the policy, including a claim to future the proceeds. Judgment affirmed.
3.
Curley v. Curley, 2014 Tex. App. LEXIS 8603 (Tex. App. – El Paso August 6, 2014)
(Cause No. 08-12-00257-CV)
H and W married in 2002 and had one child. In 2011 H was arrested for domestic violence and
W and the child moved to Wisconsin in October of that year. H filed a suit for divorce and
SAPCR. H unsuccessfully attempted to serve W at a residence in Kenosha, Wisconsin.
Thereafter H’s attorney filed an affidavit in support of citation by publication and published
citation in a newspaper in Kenosha, Wisconsin where H believed W was residing. The citation
described only the suit for divorce and did not mention the child or W’s relation to the child. A
default divorce was granted in 2012 and H was awarded primary custody of the child and the
court divided marital property. H traveled to Wisconsin with the decree 17 days later and took
possession of the child at an address he located for W on the internet. W filed a motion for new
trial which was denied and W appealed. The COA found that TFC 102.010 provides the
requisites for citation by publication in SAPCR proceedings, holding that failure to substantially
comply with the statute results in a defect in service which requires a default judgment to be set
aside. Here the published citation never mentioned the child or the pending SAPCR. H argued
that because it was a divorce and SAPCR he could rely on the requirements for publication in
divorces under TFC 6.409 as combined with those of TFC 102.010 but the COA found that even
under this argument the citation as published did not even attempt to combine the statutory
requirements because it never mentioned the SAPCR proceeding. The COA further found that
citation by publication in this case was not authorized because H failed to use due diligence to
locate W. The record at trial established that H knew where the child went to school and had
spoken with the child’s teachers, yet H did not use this as a resource to locate W’s residence
before attempting citation by publication. Further H’s ability to easily locate W after the divorce
in order to take possession of the child implied a lack of due diligence. The COA concluded that
citation was improper, reversing and remanding the judgment for a new trial.
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4.
In the Interest of I.O.K., J.C.K. and M.O.K., 2014 Tex. App. LEXIS 8898 (Tex. App. –
Dallas August 13, 2014) (mem. opinion) (Cause No. 05-13-01201-CV)
Terms of a final decree obligated F to reimburse M for uninsured medical expenses of the
children. M was obligated to provide the receipts to F within 30 days triggering his obligation to
reimburse her. M filed a motion for enforcement against F for unreimbursed expenses incurred
with a psychologist treating two of the children. M testified that F was aware the children were
being treated and that F should have received EOB statements because some of the expenses
were covered by insurance. F admitted that he was aware of the treatment but stated that he did
not know he owed money for it until he received a random bill for the psychologist in the amount
of $5,000. F testified that he eventually obtained statements and bill directly from the
psychologist but he did not pay them. M admitted that she did not provide statements to F within
30 days after treatment. The trial court found H guilty of 59 counts of contempt for the
unreimbursed medical claims but suspended jail time to allow for payment. The court awarded a
judgment to M’s attorney for fees. F appealed. F argued on appeal that his duty to reimburse M
was not triggered unless M (1) took the children to a network provider and (2) provided proof of
the expenses to F within 30 days as required by the decree. The COA determined that while the
psychologist was an out-of-network provider, making M responsible for 100% of the charges
under the decree unless the parties agreed in writing, the Agreed Decree provided that the
children were to continue in therapy with their psychologist and thus this equated to an
agreement for an out-of-network provider, resulting in equal financial responsibility for both
parents. However, the COA agreed that M had an obligation to provide the relevant information
to F for the expenses within 30 days of receiving them and M admitted at trial that she had not
done so. M argued that F had received some of the information from the insurer but the COA
noted that nothing in the Decree obligated H to seek out the information and that the Decree was
clear that it must come from her within 30 days of receipt. Because the evidence established M
did not follow the decree, F’s obligations to pay were never triggered. The COA affirmed the
judgment for the attorney fees because it was not challenged, however the COA reversed and
rendered judgment that M take nothing on her enforcement claims for unreimbursed medical.
5.
Tome v. Tome, 2014 Tex. App. LEXIS 9031 (Tex. App. – Fort Worth August 14,
2014) (mem. opinion) (Cause No. 02-14-00037-CV)
H and W signed an agreed final decree of divorce in 2006. The decree contained provisions
obligating H to make two lump sum payments to W, one for $60K and one for $113K, to
extinguish balances on two promissory notes executed by the parties in the purchase of their
marital residence. The decree characterized these payments as “maintenance.” In 2012 W
brought a suit to enforce the provisions for spousal maintenance. At trial of the enforcement
proceeding, H argued that the divorce court lacked jurisdiction to order “maintenance” in the
manner contained in the decree. W eventually conceded this as well. H acknowledged that these
were simple debts for which he could however be held liable. The trial court found that the
divorce court had lacked jurisdiction to award spousal maintenance as set out in the final decree
and that those provisions were void, denying W’s request to hold H in contempt. The trial court
did however award W a judgment for the amounts owed as well as attorney’s fees. W appealed.
The COA found that the divorce court had jurisdiction to award spousal maintenance and
jurisdiction over the parties, therefore the decree was not void. The COA agreed that the divorce
court exceeded its authority in ordering the lump sum amounts as spousal maintenance however
this only made the decree “voidable” and this could have been corrected by a direct appeal, but
neither party appealed from the divorce decree. As a result, H’s attack on the divorce decree in
the subsequent enforcement proceeding was an impermissible collateral attack on the decree,
making it error for the trial court to find that the terms of the decree were void. However, W did
not demonstrate how this error caused her any harm because she was granted a judgment against
H for the full amount. On appeal W sought a remand to obtain a contempt finding against H but
the COA held that because the amounts payable by H exceeded the statutes authorizing spousal
maintenance, they were in effect contractual alimony which was a debt which could not be
enforced by contempt. Trial court judgment affirmed.
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6.
Sherwood v. Sherwood, 2014 Tex. App. LEXIS 9224 (Tex. App. – Beaumont August
21, 2014) (mem. opinion) (Cause No. 09-13-0453-CV)
W filed for divorce against H in April 2012. After H answered, W served H with discovery. By
agreement W gave H an extension to answer. After the deadline to answer had passed, W filed a
motion to compel. During the hearing H agreed to respond to discovery but no order was ever
signed. After the agreed date for response passed, H’s attorney filed a motion to withdraw and
the motion conceded that the trial court had ordered compliance with discovery by a date certain.
The attorney was allowed to withdraw and W filed a motion to modify temporary orders which
also sought an order for H to comply with discovery. The motion was set for hearing in
November. H appeared without counsel and the court asked the parties to confer. W’s attorney
later reported to the court that H had left the building. The trial court issued an order obligating
H to comply with discovery as requested by W but the date for compliance included in the order
was a date in October that had already passed. Three weeks later W filed a motion for sanctions
asking the trial court to strike H’s pleading and served the motion on H. H did not appear for the
hearing and a default order was entered striking his pleadings. The record from the hearing did
not indicate that the trial court considered any lesser sanctions. Two weeks later H filed a pro se
motion stating that he had just learned of the sanctions and stating that he could provide facts and
information supporting his separate property claims. Two weeks before trial H filed a counter
claim asserting separate property and ineffective assistance of counsel. Nothing in the record
indicates that the court granted H leave to file this pleading after striking his prior pleadings.
The case went to trial and H appeared pro se and requested a continuance which was denied. W
asked that all property be classified as community property. The court advised H that he could
call witnesses and introduce evidence but he did not do so. A decree was entered and H filed a
MNT which was denied. H appealed. The COA notes that a general denial is sufficient to put
the characterization of property (presumed to be community) at issue. Thus, when the trial court
struck H’s general denial, this precluded H from making his separate property claims and
amounted to a death penalty sanction. The COA found that H had filed various motions seeking
to have the court reverse the sanctions but there was nothing in the record to indicate that the trial
court ever considered or ruled on these requests. Because H sought such relief, the COA found
he had not waived his right to complain about the sanctions on appeal. As to H’s complaint that
lesser sanctions were never considered (which is required under TransAmerican standards before
a death penalty sanction can be imposed) W argued that the evidence was excluded under TRCP
193.6 and thus the sanction was automatic. The COA however noted that H’s pleadings were
struck long before trial and H never even attempted to offer evidence at trial, making TRCP
193.6 inapplicable. The COA concluded that the sanction deprived H of presenting his s/p
claims and that W’s inventory did in fact suggest that some property had been received as an
inheritance. Overall, the trial court’s failure to consider lesser sanctions before striking H’s
pleadings probably caused the rendition of an improper judgment, requiring reversal. Judgment
for divorce affirmed. Judgment for intervening attorney affirmed. Judgment dividing the
property reversed and remanded for a new trial.
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