INTERESTING CASES: May 7, 2014
Sallee S. Smyth
1.In the Interest of K.D.H.,2014 Tex. App. LEXIS 3619 (Tex. App. – Houston [14thDist.] April 3, 2014) (Cause No. 14-13-00006-CV)
M tested positive for marijuana during pregnancy and CPS placed the child with PGM shortly after birth. The child remained with PGM from October 2011 to February 2012. On the day the child was returned to M, PGM filed an original SAPCR invoking standing under TFC 102.004(a)(1). PGM attached an affidavit asserting that F was incarcerated and that M had two previous convictions for DUI and one prior for child endangerment. PGM claimed the parents had a history of abuse and neglect toward the child and requested appointment as SMC. PGM requested a jury trial and paid the required jury fee. M filed a plea to the jurisdiction arguing PGM had no standing. PGM filed a response which included all CPS documents and certified copies of M’s various criminal convictions. M provided no evidence or affidavits. PGM appeared for the hearing on the plea and testified. Both parents appeared pro se and presented only arguments. The trial court granted the plea and dismissed PGM’s suit. PGM appealed the dismissal. The COA acknowledged that the issue of standing under TFC 102.004(a)(1) was an issue of first impression for the 14th COA, which necessarily required the COA to first address the proper standard for determining standing under the statute and second determine whether or not the trial court erred in making its decision. The COA notes initially that TFC 102.004(a)(1) authorizes standing when the court is presented with “satisfactory proof” that either (1) the order is necessary because the child’s present circumstances would significantly impair the child’s physical health or emotional development; or (2) both parents, the surviving parent or the managing conservator or custodian either filed the suit or consent to the suit. This the COA points out is different from the a situation where specific facts must be proven in order to establish standing under TFC 102.003, which most often can simply be alleged in the initial pleading and if not challenged, then standing is established. Only if challenged must the petition then offer proof in support of the requisite standing requirements. Noting that TFC 102.004(a) affords standing “in addition” to the standing allowed by TFC 102.003, the COA highlights the difference by noting that TFC 102.004(a) requires the existence of proof while TFC 102.003 requires the existence of facts, delineating the trial court as a gatekeeper in 102.004 situations to assure that satisfactory proof exists to support the proposition upon which the petitioner relies to support standing. The COA then determines the standard under which the trial court should perform its gatekeeper function as well as the standard upon which the COA reviewed the gatekeepers ruling. Analyzing what is meant by “satisfactory proof,” one standard could define it as that level of proof deemed sufficient by a particular judge under whatever standard he or she chose. However, the COA felt that this holding would result in a lack of uniformity by TX trial courts, making a judge’s decision on standing in these cases almost unreviewable. Next the COA considered that “satisfactory proof” might require the petition to prove its claims at an evidentiary hearing at which the trial court acted as fact finder. In this scenario, the COA felt that if standing was denied, the petitioner would then challenge the finding under a sufficiency review, which would require the COA to defer to the trial court’s findings instead of reviewing the jurisdictional challenge de novo as TX legal precedent required. The COA further noted that the proof required for PGM to establish her standing included some of the same proof required for PGM to prevail on her claims for SMC, by overcoming the parental presumption under TFC 153.131. In this situation, the COA finds that the TX Sup. Ct. opinion in Tex. Dept. of Parks & Wildlife v. Miranda, 133 S.W.3d 217, 227-228 (Tex. 2004) designates the trial court’s role as one to determine if the evidence of standing creates a fact issue. If it does, then a plea to the jurisdiction cannot be denied, but instead the disputed jurisdictional facts must be decided by the fact finder, which in this particular case was a jury. If however the evidence to support standing is undisputed, or fails to raise a fact issue, then the trial court would decide the plea to the jurisdiction (whether granting or denying the plea) as a matter of law. The COA determined that interpreting “satisfactory proof to the court” in TFC 102.004(a) to mean that the trial court operates as the “fact finder” (instead of a gatekeeper) on the standing issue contravenes the important principles of law regarding standing and jurisdiction, and in this case particularly by depriving a petitioner of their right to have a jury determine questions of fact. Instead the COA holds that “satisfactory proof to the court” places the trial court in the position of deciding whether there is a genuine fact issue in question, deciding whether the evidence presented to support standing, when viewed in a light most favorable to the petitioner, would enable reasonable and fair-minded people to find (in this case) that the order is necessary because the child’s present circumstances would impair its physical health or emotional development. Using this standard, the COA would then review the determination de novo, as the majority believes jurisdictional issues should be reviewed. Having established this standard, the COA then undertook to determine whether or not the evidence submitted by PGM raised issues of disputed facts. Reviewing the evidence presented in PGM’s affidavit, along with the documents she submitted and her testimony at the hearing (noting that neither parent offered any evidence), the COA determined that this evidence, when considered in a light most favorable to PGM, could leave a reasonable fact finder to determine that an order appointing PGM as SMC was necessary in this case to protect the child. As a result, the COA found that the trial court erred in denying standing and dismissing PGM’s suit. The dismissal order was reversed and the case remanded for further proceedings. DISSENTING OPINION: The dissent believes that the resulting effect of the majority’s decision misconstrues the phrase “satisfactory proof to the court” within TFC 102.004(a) to mean satisfactory proof to the COA and not the trial court. While the dissent agrees that “satisfactory proof” should mean “adequate,” the dissent does not believe it means creating a genuine fact issue (which is only more than a scintilla). The dissent notes that several sister appellate courts have found “satisfactory proof” to mean a preponderance of the evidence and that the 14thCOA should follow these cases until such time as the Legislature or the TX Supreme Court clarifies whether TFC 102.004(a) was intended to create a new evidentiary standard. The dissent further opines that the COA should imply all findings necessary to support the trial court’s decision (which in this case would require the COA to affirm the trial court’s decision to deny standing) because TFC 102.004(a) says that the proof should be “satisfactory … to the court.” Using this standard the dissenting justice felt that the trial court’s finding that the proof was not satisfactory would then be reviewed under a sufficiency standard as other trial court findings are reviewed, allowing the trial court to be the sole judge on credibility. Reviewing TX policy on grandparent access, the dissent believes that the Legislature’s decision to amend TFC 102.004(a) to mirror the stricter requirements it imposed in TFC 153.432 (GP access statute) after Troxel, requiring “satisfactory proof to the court”reflects the Legislature’s intent to restrict state interference in the private realm of the family to only those situations where the parent is unfit, acting to protect the fundamental constitutional rights of parents. Further the dissent does not agree that the trial court is bound by Miranda, limiting the trial court to a determination of whether a fact issue exists. The dissent believes instead that the trial court should determine whether there is satisfactory proof to support standing under the statutory framework of TFC 102.004(a) and that disputed issues of fact may be decided by the court at the standing hearing, analyzed under Troxel standards.
2.Drake Interiors, LLC v. Thomas, 2014 Tex. App. LEXIS 3601 (Tex. App. – Houston [14th Dist.] April 3, 2014) (Cause No. 14-13-0349-CV)
Drake secured a judgment against H’s company prior to marriage. Drake then filed a second suit, naming H as a defendant, seeking to hold additional parties’ liable for the prior judgment. H married W in 2002 after the second suit had been filed and together, H & W acquired a townhome on Asbury in 2003. Thereafter in 2004 Drake obtained an agreed judgment against H and his companies (but not W). In 2006 W purchases a lot in her own name on Queensbury. In 2008 Drake records an abstract of judgment. In 2008 the parties’ separate and W files for divorce. H moves out of the Asbury residence. Later that same year, W vacates Ashbury and moves into the recently completed residence on Queensbury. Asbury is leased to a third party and W designates Queensbury as her homestead. The parties conclude their divorce at the end of 2008 and W is awarded both the Queensbury and Asbury properties. Drake then files suit in 2009 against both H and W seeking to declare its prior abstract of judgment valid as to the Asbury property. In 2010 W moves back into the Asbury residence and designates it as her homestead. H filed a pro se answer in Drake’s declaratory judgment. W filed an answer, asserted various affirmative defenses and counterclaimed for tortious interference with property. W filed a MSJ as to the abstract of judgment, claiming that the Asbury property was not liable for H’s pre-marital debts, that the debt was not hers and that there was no evidence of a community debt. Drake claimed that the Asbury property was liable for H’s premarital debts and that its abstract attached, at the latest, in August 2008 (prior to divorce) when the parties’ ceased to live there. The trial court granted SJ in favor of W and declared the lien invalid as to the Asbury property and awarded W attorney’s fees. (Originally Drake included the Queensbury property in its suit but dropped this claim). W’s tortious interference claim was tried to a jury who rendered a take nothing judgment. Drake appealed. The COA initially notes several legal principles including (1) a valid lien against non-exempt property is created when an abstract of judgment (AJ) is filed and indexed; (2) if property is exempt because it is a homestead, the AJ attaches only when the property ceases to be a homestead; (3) a homestead can be abandoned when the party claiming the exemption stops using the property and intends not to use it as a homestead; and (4) merely changing residences or temporarily renting homestead property is not abandonment. Applying TFC 3.202(c), the COA first concludes that Drake may reach H’s non-exempt community property to satisfy liabilities incurred by H prior to marriage since sole or joint management c/p is liable for the debts incurred by either H or W prior to or during marriage. This is true whether or not the non-liable spouse is joined in the debt proceeding and a creditor need to sue both spouses in order to reach jointly owned community assets. The Asbury property was purchased during marriage and was joint management c/p. To the extent it was not protected by a homestead exemption, Drake could reach the property. However, the burden to establish “abandonment” rested with Drake. The COA determined that H’s move from Ashbury upon separation and divorce filing did not prove H’s intent not to return. Further, although W also moved out (to Queensbury property) and rented Asbury, this did not conclusively establish her abandonment because she did not designate Queensbury as her new homestead until after the divorce. The COA determined that the evidence was insufficient to declare Drake’s lien void as a matter of law and reversed and remanded for further proceedings wherein the parties’ claims could be further considered on the merits. Attorney’s fee awarded remanded also. COMMENT: The Opinion has some helpful discussion on the construction of the marital property liability statutes, statutes which don’t necessarily draw a great deal of appellate attention.
3.In the Interest of M.M.M. and S.H.M., 2014 Tex. App. LEXIS 3922 (Tex. App. – Houston [14th Dist.] April 10, 2014) (Cause No. 14-12-01145-CV)
Platonic friends Marvin and Cindy agreed to try and conceive a child through ART using Marvin’s sperm and donor eggs. Because they were not married, there was no gestational or written agreement. Their respective intentions beyond conception are disputed. Cindy claims the parties agreed to co-parent while Marvin asserted that Cindy agreed to be only a surrogate for he and his partner, but she would have no part in raising the child. Cindy became pregnant and gave birth to twins. Marvin filed suit for declaratory judgment seeking a declaration that he was the father and that Cindy had no parental relationship and no standing to pursue right to the children. Cindy filed a SAPCR counter claim and sued Marvin and his partner for damages based on breach of fiduciary duty, fraud, IIED, malicious prosecution, promissory estoppel and conspiracy. The court issued temporary orders with Marvin having conservatorship of the children and bifurcated the proceedings to determine the maternity issue first. Both parties filed MSJ as to their respective positions for declaratory judgment and parentage. The trial court ruled, declaring Marvin the father and denying his request to exclude Cindy as a parent, implicitly finding she was the mother of the twins. This action was severed from the remaining claims, making it final for appeal. On appeal Marvin asserted that issues of disputed maternity and paternity should be determined in the same manner and that TFC 160.201(a)(1), providing that a woman is the mother if she gives birth, should be treated as a rebuttable presumption only, which can be overcome with admissible genetic testing. Marvin further asserted constitutional arguments to those statutes within Chapter 160 which treat men and women differently as far as parentage is concerned, focusing on those circumstances where the parties are not married and ART is involved. The COA examined Marvin’s claim that TFC 160.106 creates a gender neutral mandate by providing that “the provisions of this chapter relating to a determination of paternity apply to a determination of maternity.” The COA initially found that TFC 160.201(a)(1) is not worded in any way to suggest that giving birth to a child creates merely a presumption of maternity. The COA further found that construction of TFC 160.106 as urged by Marvin would create conflict with TFC 160.201(a)(1), distinguishing between use of the word “determination” of parentage in the former and “establishment” of parentage in the latter. The COA felt that “determination” of parentage as used by the Legislature in TFC 160.106 relates to those situations where parentage must be formally adjudicated and that TFC 160.106 is not rendered meaningless by their construction because disputed maternity could arise in Subchapter I proceedings regarding gestational agreements. Of course this was at the crux of Marvin’s constitutional issue because gestational agreements are not available to unmarried persons, meaning a woman can become a sole parent through ART (donor does not become father) but a man cannot because the woman giving birth will always be the mother unless she is willing to terminate. In effect the COA concluded that giving birth establishes maternity and this is not merely a presumption. The COA further found that Marvin’s constitutional challenges had been waived because they were not asserted in either his written MSJ or his written response to Cindy’s MSJ and the court declined to recognize a public policy interest which would allow them to consider the issue as fundamental error. Judgments affirmed. Motion for rehearing has been filed.
4,In re Bancorpsouth Bank, 2014 Tex. App. LEXIS 4052 (Tex. App. – Dallas April 14, 2014) (mem. opinion) (Cause No. 05-14-00294-CV)
Bank is the trustee of a Trust established for the benefit of H by his parents. The trust contains a spendthrift clause which protects trust properties and funds from claims by H’s creditors, including claims for alimony or spousal maintenance. Within the divorce proceedings, to which the Trust and trustee were not named as parties, the trial court ordered the trustee to withhold mandatory and discretionary trust distributions payable to H, to pay-over the mandatory distributions to W as temporary spousal support and to pay the discretionary distributions into the registry of the court. Although not a party to the suit in which the order was issued, Bank sought mandamus relief because it claimed the trial court’s order obligated it to perform contrary to its fiduciary duties under the Trust. The COA agreed, noting that Bank met none of the recognized exceptions which would otherwise allow Bank to pursue a direct appeal as a non-party, finding that Bank had standing to seek mandamus instead. Bank argues that spendthrift trusts are valid in TX and asserts that the trial court’s orders, unlike withholding orders for spousal and child support which may redirect wages, may not redirect H’s trust distributions contrary to a valid spendthrift clause absent statutory authority. Although TFC 154.005 would allow redirection for the payment of child support, there is no equivalent provision for spousal support and thus the trial court’s temporary order directing withholding for only spousal support is an abuse of discretion. The COA agrees, mandamus granted.