Cathie Reisler v. Keith Reisler

Citations: 439 S.W.3d 615; 2014 Tex. App. LEXIS 11634; 2014 WL 3827854Docket: 05-12-01586-CV

Court: Court of Appeals of Texas; August 5, 2014; Texas; State Appellate Court

Original Court Document: View Document

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The Court of Appeals for the Fifth District of Texas reversed and remanded the trial court's division of the community estate in the divorce case of Cathie Reisler and Keith Reisler, while affirming the dissolution of their marriage. Cathie Reisler raised four issues on appeal, contending that the trial court erred by: 1) awarding Keith a disproportionate share of the community estate due to calculation errors; 2) not awarding her a disproportionate share; 3) making her jointly and severally liable for attorney fees related to Paul French’s services, which the parties resolved before oral argument; and 4) incorrectly valuing community interests in medical investment shares based on Keith's income approach. The court determined that the trial court erred in dividing the community estate, and Cathie did not preserve her objection regarding the valuation of medical investments for appellate review. The final decree regarding the marriage dissolution was upheld, but the property division issues were sent back for further proceedings. The case background includes filings from both parties in February 2010, a pre-divorce settlement agreement, and the trial court's subsequent rulings following a bench trial.

Cathie Reisler argues that the trial court's attempt to divide the community estate 50/50 was flawed due to calculation errors, resulting in a disproportionate division of 38.24% to her and 67.76% to Keith Reisler, a division unsupported by evidence. Keith Reisler counters that the trial court did not explicitly state the percentage allocations in its findings or conclusions, asserting that claims regarding incorrect values are speculative and require assumptions by the appellate court.

The standard of review for property division by an appellate court is based on an abuse of discretion, granting trial courts broad discretion, with every reasonable presumption favoring their decisions. An appellate court considers whether sufficient evidence exists to support the trial court's exercise of discretion and whether any errors were made in that exercise. In family law cases, the evaluation of abuse of discretion overlaps with sufficiency standards.

An appellate court reviews conclusions of law de novo, upholding them if the divorce judgment can be sustained on any legal theory supported by evidence. Factual sufficiency cannot be challenged, but legal conclusions can be assessed for correctness. If an appellate court finds a legal conclusion erroneous but the judgment is still valid, reversal is unnecessary. When a complete reporter’s record is present, findings of fact are reviewed under legal and factual sufficiency standards similar to jury findings, with any challenge failing if there is more than a scintilla of evidence supporting the findings.

Appellate courts may overturn a trial court’s findings only if they are deemed clearly wrong or unjust, based on the overwhelming evidence. In reviewing such findings, appellate courts give significant deference to the trial court's credibility assessments and evidentiary weight. In bench trials, the trial court is the sole fact finder. If reversible error affects the equitable division of the community estate, the appellate court must remand for a complete reassessment.

Under Section 6.711(a) of the family code, in divorce proceedings, the trial court is required to provide written findings of fact and conclusions of law regarding disputed assets, liabilities, and their values, but is not obligated to address undisputed matters. The court must focus on controlling issues rather than evidentiary details, and it does not need to elaborate on the reasons for property division related to marital fault.

Divorce decrees mandate a just and right division of the estate, allowing the trial court broad discretion to consider various factors, meaning that equal division is not required. The burden rests on the party contesting the property division to prove that it is so unjust as to show an abuse of discretion.

Cathie Reisler contends that calculation errors led to an inequitable division of the community estate, arguing four specific points: (1) the trial court improperly included both a $1,400,000 pre-divorce settlement and funds from her Merrill Lynch account in the property division; (2) it wrongly assigned the debt from a medical office condominium to Keith Reisler while awarding him the property at zero net equity; (3) it neglected to assign the balance of a shared bank account; and (4) it mistakenly included her separate property bank account in the division. The first argument centers on the trial court's finding regarding the pre-divorce settlement and the allocation of $700,000 to each party's separate estate.

Cathie Reisler asserts that her Merrill Lynch account (number XXX15629), valued at $554,408.69 and identified in finding of fact number 18 as community property, actually represents her share of a pre-divorce settlement. She claims the trial court mistakenly counted her portion of the pre-divorce settlement twice—once in the total of $1,400,000 and again as a separate asset in her name. In contrast, finding of fact number 18 only acknowledges Keith Reisler's share of the pre-divorce settlement as part of the $1,400,000. Cathie contends there is no supporting evidence for the erroneous classification of community property, leading to an unequal division favoring Keith. Keith counters that Cathie failed to provide evidence or trace the funds in question. The crux of their dispute centers on whether Cathie’s separate property was incorrectly included in the community estate, resulting in an unjust division. The trial court's finding of fact number 18 details the community property and its values, including various real estate, personal property, and bank accounts, with both parties being awarded $700,000 from their separate estates as part of a pre-suit division. Cathie maintains that her Merrill Lynch account was part of the $700,000 assigned to her in the pre-divorce settlement.

Cathie Reisler presented evidence during the trial regarding funds allocated to her in a pre-divorce settlement, which the court recognized as her separate property. Her Exhibit No. 61, a summary of relief sought, requested confirmation of the Merrill Lynch Account (formerly a Charles Schwab account, number XX15629) as her separate property, consisting of funds partitioned in the pre-divorce settlement agreement dated January 17, 2011. Exhibit No. 85, also admitted into evidence, included an inventory listing the Merrill Lynch account as her separate property, supported by bank statements. These statements showed that in January 2011, Cathie had $708,272.55 in a Charles Schwab account (number XXXX8221), from which she transferred $548,545.01 into the Merrill Lynch account in November 2011. Keith Reisler testified that the $700,000 from the pre-divorce settlement was moved from their joint account to Cathie's separate Charles Schwab account. He confirmed the transfer of funds back to the joint account and acknowledged that Cathie transferred the $708,272.55 into the Charles Schwab account and subsequently $554,408.69 into the Merrill Lynch account. Keith Reisler only contested whether he paid any bills from these funds before Cathie transferred them, not the transfers themselves.

Cathie Reisler has demonstrated that funds designated to her in the pre-divorce settlement were traced into the Merrill Lynch account number XXX15629, which was agreed to be her separate property. However, the trial court incorrectly classified this account as a community asset in finding of fact number 18, unlike Keith Reisler’s separate property in his Charles Schwab account number XXX230, which was not included as a community asset. This misclassification represents an abuse of discretion regarding the distribution of community assets, as the divorce decree lacks specific, identifiable awards for each party. A remand of the community property division is necessary due to the reversible error affecting the just division of the estate.

Additionally, Cathie Reisler challenges the trial court's valuation of community interests in medical investments based on Keith Reisler’s expert's income approach, claiming the valuations are unreliable due to computational errors and improper application of financial metrics. Keith Reisler contends that Cathie Reisler did not preserve her right to appeal on this issue, as the expert’s testimony was admitted without objection.

A party must timely object to an expert's methodology, technique, or foundational data to allow the trial court to analyze the opinion's basis and provide the offering party a chance to rectify any defects. If an expert opinion is admitted without objection, it may still be considered probative, notwithstanding potential unreliability, unless no basis is provided or the basis contradicts the opinion. In this case, Schrupp presented a factual basis for her opinion, relying on various sources despite not obtaining specific financial statements. Cathie Reisler did not challenge the basis of Schrupp's opinion but argued that different data should have been used. However, she failed to make a timely objection to the trial court, leading to the conclusion that her issue was not preserved for appellate review. The court found that while the trial court erred in dividing the community estate, Cathie Reisler's complaint regarding the valuation methods used was not preserved. As a result, the divorce decree was affirmed, the community estate division was reversed, and the case was remanded for further proceedings. Cathie Reisler was awarded her costs of appeal.