In a Texas divorce, there are several issues that are unique to considering a business as an asset in the property division. The normal property division issues of identification, characterization, valuation, and division each have intricacies for businesses that need to be considered.

Addressing the type of entity (corporation, partnership, sole proprietorship) is important because the rules for a Texas divorce differ depending on the type of entity.

Determining the date of formation of the business entity may be crucial to the characterization as either separate property or community property.

Any changes in the formation of the entity during the marriage could change the characterization and are an important factor to note.

And, vital to any business operating during a divorce is the question of how to continue to operate the business without suffering a devaluation of the interest while the divorce proceeds. The day-to-day operation issues and protecting the business’ ability to make profit flow through to the value that the business has to the marital estate and the parties individually.

Lastly, evaluation of where the customers come from, which is an essential component of determining the business’ commercial goodwill as a factor of value of the entity versus the owner’s personal goodwill which is not a marital asset, will be important.

Here is a video of a talk that I gave on The Business Owner’s Divorce — which is approved for 1.0 hours of Texas CLE Credit, Course # 174151052: The Business Owner’s Divorce

Here is the powerpoint paper referenced in my talk:

Small Business Issues in a Texas Divorce

Here are two other white papers that could be useful for representing a spouse in a Texas divorce when a business is at issue:

10 Documents to gather for business in divorce

Top Five Concerns Regarding Small Business Ownership and Divorce in Texas

 

 

 

This post continues the discussion of the unconstitutionality of protective orders under the Texas Family Code and picks up from Part I previously published.

Testimony in a Civil Protective Order Case Violates the Fifth Amendment of the United States

The Fifth Amendment to the United States Constitution holds:

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Put simply, a person cannot be required to confess by law.

Tex. Fam. Code § 85.001(a) requires:

(a)       At the close of a hearing on an application for a protective order, the court shall find whether:

  1. family violence has occurred; and
  2. family violence is likely to occur in the future.

Tex. Fam. Code § 71.004 defines family violence as:

  1. an act by a member of a family or household against another member of the family or household that is intended to result in physical harm, bodily injury, assault, or sexual assault or that is a threat that reasonably places the member in fear of imminent physical harm, bodily injury, assault, or sexual assault, but does not include defensive measures to protect oneself;
  2. abuse, as that term is defined by Sections 261.001(1)(C), (E), (G), (H), (I), (J). (K), and (M), by a member of a family or household toward a child of the family or household; or
  3. dating violence, as that term is defined by Section 71.0021.

Defense of the Application for Protective Order Would Always “Lead To Incriminating Evidence”

The Fifth Amendment protection encompasses compelled statements that lead to discovery of incriminating communications that are testimonial in character. Doe v. U.S. 487 U.S. 201, 208 (1988). The act of exhibiting physical characteristics such as providing a blood sample, a handwriting exemplar, or a recording of a person’s voice is not the same as a sworn communication expressing assertions of fact. U.S. v. Hubbell, 530 U.S. 27 (2000); Pennsylvania v. Muniz, 496 US 582 (1990).

Further, the answers to the questions posed by the statute itself do not have to entirely encompass a criminal offense to be protected by the Fifth Amendment. See Hoffman v. U.S., 341 U.S. 479 (1951). The Fifth Amendment Privilege protects answers which would furnish a link in the chain of evidence needed to prosecute.

Assault is defined in Sec. 22.01 of the Tex. Penal Code.

Sexual assault is defined in Sec. 22.011 of the Tex. Penal Code.

Bodily injury is defined in Sec. 1.07(a)(8) of the Tex. Penal Code, and injury to a child due to bodily injury is defined in Sec. 22.04(a) of the Tex. Penal Code.

Bodily injury, assault, and sexual assault are not defined in the Texas Family Code. It is not possible to defend against the accusations of assault / threat of assault, sexual assault / threat of sexual assault, or bodily injury / threat of bodily injury without creating a chain of evidence needed to prosecute those same crimes under the Texas Penal Code.

When a person is compelled by its government to defend against a civil statute by admitting information which “would lead to” incriminating evidence under a criminal statute – that civil statute compels testimonial information. Therefore, testimony by the defendant in a Tex. Fam. Code chapter 84 Protective Order trial violates the Fifth Amendment to the U.S. Constitution.

Protective Order Trials Under the Texas Family Code are Quasi-Criminal.

Protective Orders under the Texas Family Code are quasi-criminal. The Corpus Christi Court of Appeals states:

We note that, unlike any other ‘civil’ proceeding in which injunctive relief is sought, a petitioner for a protective order is statutorily guaranteed counsel. See Tex. Fam. Code Ann. § 81.007(a) (Vernon 2000). Moreover, the statute specifically states that ‘The county attorney or the criminal district attorney is the prosecuting attorney responsible for filing applications under this subtitle . . . .’ Id. Examining the nature of a protective order, the method by which it is prosecuted, the sanctioned deprivations of liberty and property which are possible pursuant to such an order, and the possibility of incarceration, we believe the proceeding is quasi-criminal in its nature.”

Striedel v. Striedel, 15 S.W.3d 163, 167 fn. 2 (Tex. App.—Corpus Christi 2000, no pet.).

To enter a final civil protective order, the Court is required to find that the defendant’s actions intended to result in physical harm, bodily injury, assault, or sexual assault or were a threat that reasonably placed the family member in fear of imminent physical harm, bodily injury, assault, or sexual assault. These are criminal actions as defined by the Texas Penal Code and conviction of which requires proof beyond a reasonable doubt. However, in a civil protective order trial, the Court must only find that the defendant has committed family violence and is likely to commit family violence in the future by a preponderance of the evidence. Roper v. Jollife, 493 S.W.3d 624, 638 (Tex. App.—Dallas 2015, pet. denied). This simply does not make sense.

When a litigant is faced with loss of fundamental rights, due process requires that fact findings be made by more than a preponderance of the evidence. Addington v. Texas, 441 U.S. 418, 423 (1978). Given that a defendant in a protective order trial is being accused of criminal actions, the higher burden of proof of beyond a reasonable doubt must be applied to the quasi-criminal protective order case.

Remaining Silent to Protect Against Self-Incrimination is Presumed as a Negative Inference in Civil Protective Order Trials and Violates the Fifth Amendment.

The Fifth Amendment prohibits the prosecution from using a defendant’s silence in the face of pre-arrest, pre-Miranda, questioning against him as part of its case-in-chief at trial. Under Griffin v. California, the prosecution may not use a defendant’s failure to testify against him at trial. 380 U.S. 609, 615 (1965). Using a person’s silence in the face of pre-arrest, pre-Miranda questioning against him would leave the person no way to avoid creating evidence against himself. The Fifth Amendment guarantees that “the State which proposes to convict and punish an individual [must] produce the evidence against him by the independent labor of its officers, not by the simple, cruel expedient of forcing it from his own lips.” Mitchell v. United States, 526 U.S. 314, 326 (1999).

Unfortunately, a party or witness in a civil proceeding may not refuse to be called as a witness. See McInnis v. State, 618 S.W.2d 389, 392 (Tex. Civ. App. Beaumont 1981, writ ref’d n.r.e), cert. denied, 456 U.S. 976 (1982). Once a party or witness invokes the Fifth Amendment privilege, the trier of fact may draw a negative inference. A defendant in a civil protective order trial is therefore faced with an impossible situation: Refuse to testify to protect against criminal self-incrimination as afforded under the Fifth Amendment or testify and invoke the Fifth Amendment against self-incrimination but suffer the negative inference drawn by the trier of fact.

This legal quandary therefore violates the defendant’s protections afforded under the Fifth Amendment to the United States Constitution.

Texas Family Code §§ 84.001, 84.002 and 84.004 are Unconstitutional.

A defendant in a protective order suit, who has everything to lose and nothing to gain, is no exception to our very innate ideals of fairness and justice, and Tex. Fam. Code §§ 84.001, 84.002 and 84.004 are unconstitutional. Texas legislators have crafted an unconstitutional statutory exception to both the United States Constitution and Texas Constitution that completely deprives defendants of the right to a meaningful trial in a protective order suit.

All litigants who are forced to settle disputes through the judicial process have a fundamental right under the federal constitution to be heard at a meaningful time and in a meaningful manner.”

Dodd v. Dodd, 17 S.W.3d 714, 717 (Tex. App.—Houston [1st Dist.] 2000, no pet.). The Constitution is clear that there are no exceptions to the right to be meaningful heard in a meaningful manner. It is imperative that defendants in a protective order suit be afforded the same constitutional rights as defendants in any other lawsuit, including defendants in criminal prosecutions. A defendant in a protective order suit has the right to be made fully aware of the specific allegations lodged against him; be given an adequate time to prepare for trial, including time to conduct discovery and depose witnesses; and have an opportunity to defend himself in a meaningful way in court.

How is it possible that a defendant in a mere contract dispute can be afforded more protection than a defendant in a protective order suit? The answer is that it is not possible. The Texas Constitution forbids it. The United States Constitution forbids it. Justice forbids it.

Protective orders under the Texas Family Code  are intended to protect a person from family violence, but this protection cannot be obtained by violating the constitutions of both the United States and Texas. Texas Family Code chapter 83 addresses temporary ex parte protective orders. Texas Family Code chapter 85 addresses final protective orders. It is Texas Family Code chapter 84 where the unconstitutional statutes lie. Specifically, Tex. Fam. Code §§ 84.001, 84.002 and 84.004.

The Texas Constitution, the United States Constitution and Justice Require a Meaningful Opportunity to be Heard

The United States Constitution, the Texas Constitution, and justice all demand that in every single case, a defendant be afforded notice, an opportunity to be heard, and a meaningful trial. A meaningful trial is not trial by ambush. A meaningful trial is one where a defendant is given notice of the claims asserted against him or her, adequate time to prepare for trial – including conducting discovery and deposing witnesses, and an opportunity to be heard on the matter at a meaningful time and in a meaningful manner. Texas Workers’ Comp. Comm’n v. Patient Advocs. of Texas, 136 S.W.3d 643, 658 (Tex. 2004); Mathews v. Eldridge, 424 U.S. 319, 333 (1976).

The United States Constitution requires that every defendant receive a meaningful trial. The 14th Amendment states that “no state . . . shall deprive any person of life, liberty or property without due process of law.” This ideal is at the very foundation of our nation. The Texas Constitution goes beyond the United States Constitution in its requirements for a meaningful trial:

No citizen of this State shall be deprived of life, liberty, property, privileges or immunities, or in any manner disfranchised, except by the due course of the law of the land.”

Tex. Const. Art. 1, Sec. 19. This ideal is at the very foundation of our state.

Justice itself requires a meaningful trial. Trial by ambush goes against the values and ideals on which our justice system was built. A defendant cannot be hauled into court to defend himself without proper notice and time to prepare a meaningful defense. Both the United States Constitution and Texas Constitution are written such that a defendant is afforded all necessary legal protections to prevent trial by ambush and give the defendant the opportunity to be heard.

All Defendants are Afforded Due Process – Except Defendants in Protective Order Suits.

Our laws are written to afford parties in nearly all cases due process and a meaningful trial. Parties in a breach of contract case are afforded a meaningful trial and we understand why. A party defending a breach of contract case has an interest in protecting their property and an equitable resolution. They are afforded notice of the claims against them; time to conduct discovery; time to interview and depose witnesses; time to strategize and prepare for trial.

Parties in a divorce matter are afforded a meaningful trial and that, too, makes perfect sense. A wife in a divorce, for example, has an interest in protecting her property and her right to raise her children as she sees fit, among numerous other social and political factors. Parties in a divorce case are afforded notice, adequate time to prepare for trial, and an opportunity to be heard.

Parties in a criminal case are afforded the highest level of protections because there are serious implications in depriving an individual of due process. Those implications include losing jobs, losing family, losing reputation, losing freedoms, losing the right to vote, losing the right to bear arms, and even losing life. Because there is so much to lose in a criminal case, our laws provide extra protections to defendants in criminal matters. Criminal defendants are afforded additional notice by being afforded the right to have their charges read to them; they are afforded additional time to meaningfully prepare for trial through the right to counsel and rules requiring district attorneys to turn over all evidence; and they are afforded a meaningful trial through additional protections in their rights to confront witnesses.

A Protective Order and a finding of family violence have serious implications just like a criminal case. The implications range from limiting a defendant’s constitutional rights to detrimental social implications. Defendants may be prevented from:

  • Moving about freely – constitutional liberty interest;
  • Remaining in their homes – constitutional property interest;
  • Using or possessing their property – constitutional property interest;
  • Maintaining custody and control of their children – constitutional liberty interest and right to parent/social implications;
  • Possessing a firearm – constitutional right to bear arms;
  • Communicating freely – constitutional right to free speech;
  • Remaining in the United States – immigration implications;
  • Possessing their pets – constitutional property interest;
  • Working at their jobs – social implications;
  • Maintaining relationships with friends and family – social implications.

But despite the serious implications that come from a family violence finding and a protective order, defendants are given little to no notice of trial. The rules for pleadings in a protective order case are very vague and do not require a petitioner to set forth in specific details the basis for the request.

Defendants are given no meaningful time to prepare for hearing. A meaningful defense against an accusation of family violence requires an opportunity to obtain rebuttal evidence and the application of a standard of proof that accurately reflects the value of the rights that are at stake. Tex. Fam. Code § 84.001 requires a trial be held not later than the 14th day after the application is filed. In limited circumstances, a defendant will be afforded 20 days to prepare after the application is filed. Tex. Fam. Code § 84.002. Shockingly, however, the minimum amount of required notice afforded to a defendant in a protective order suit is only 48 hours’ notice prior to final trial. Tex. Fam. Code § 84.004.

These limitations do not allow for a meaningful trial. It is not enough time to conduct discovery. While the current Texas Rules of Civil Procedure have done away the requirement of initial disclosures in protective order cases, the remaining discovery avenues are not prohibited: depositions; requests for production; requests for interrogatories; and requests for admissions. Under the Texas Rules of Civil Procedure, a party has 30 days to respond to a discovery request. A party seeking discovery by subpoena from a non-party must serve notice at least 10 days prior to serving the subpoena. Forty-eight hours’ notice prior to a protective order trial, as allowed by Tex. Fam. Code § 84.004, is not enough time to meaningfully strategize and prepare for a final trial. This is especially true for a final trial that can result in a final protective order that deprives the defendant of all contact with a child for two years or more.

Finally, defendants in protective order cases are not given a meaningful opportunity to be heard. Without time to adequately prepare for trial, a defendant absolutely cannot put forth a meaningful defense. A defendant is prevented from cross-examining witnesses and putting forth their own evidence as they are completely ambushed by the opposing party, who has complete control over the case. The negative implications from being denied a meaningful opportunity to prepare for trial and be heard are amplified when a protective order is sought in a separate cause number by either local rule or policy, as is required in Collin County, because the protective order is a final order and is subject to appeal. See Tex. Fam. Code §81.009(a). The defendant is not entitled to request a rehearing or ongoing discovery as he would be if the protective order was filed in a divorce cause number where the protective order does not become a final order until the decree of divorce becomes a final order. See Tex. Fam. Code § 81.009(b).

Each of these procedural limitations affects a party’s constitutional rights. Next week I will discuss how testimony in a civil protective order case violates the Fifth Amendment of the United States Constitution.

A common question in a divorce is who gets to keep the pets. Whether it be a dog, cat, parrot, fish, bearded dragon, or snake, most pets are considered members of the family. There is no doubt that many people will advocate for their rights as a pet parent. But is there a required possession schedule so that each person has continued rights to visit the pet? In Texas, the answer is no.

Pets are property in Texas

Texas law treats animals as property. Beginning in 1858 with the Texas Supreme Court case of Howard v. York, Texas established that, not only are animals property, but they are characterized as either separate property or community property. Howard v. York, 20 Tex. 672 (Tex. 1858). Texas case law continued to develop and addressed that when an animal increases in value, the characterization of the value is the same as the animal’s characterization as separate or community property. See Stringfellow v. Sorrells, 18 S.W. 689 (1891) (Tex. Comm’n app. op. adopted). In 2010, the Austin Court of Appeals affirmed that pets purchased with a spouse’s separate property money remain the separate property of the spouse.  For the past 160+ years, Texas has not changed its position that animals are property.

How are pets handled in a divorce?

At a final trial in Texas, animals are divided between the husband and wife just like all other property. One of the parties is going to be awarded the pet. This isn’t the case in all states though. Other states take a different approach. Alaska became the first state to consider the “well-being of the animal” in 2016. Illinois passed a similar law in 2018 requiring the court to determine sole or joint ownership of the pet. A recent law in New York (signed on October 25, 2021) requires courts to consider the best interest of a pet or companion animal during a divorce. The court is then required to take the best interest of the pet into consideration when awarding possession. It will be interesting to see the case law develop in New York as to the “best interest” factors of the animal and how best interest is determined.

What are the options for pets in a Texas divorce?

Outside the trial court, the parties can be creative with what happens to their pets. A possession schedule can be created very similar to the possession schedule for a child. Terms can be established for vet care and other pet expenses, similar to regular payments of child support. You can have an order for end-of-life care for pets that are older. You can have complex possession schedules including rights of first refusal if a party will be away from the pet overnight, as well as notice provisions when a party will be leaving town without the pet. Without agreements though, the trial court will divide pets as property along with all other property. It is important to understand how the Texas court will view your pet when going through a divorce.

 

Texas starts 2022 with three new district courts.

The 478th Judicial District Court of Bell County will be in session on the first Mondays in January, April, July, and October. This court will have concurrent jurisdiction with the 27th, 146th, 169th, 364th, and 426th Judicial District Courts currently serving Bell County. No judge as been appointed for this court yet.

The 481st Judicial District Court of Denton County is a general jurisdiction court. Judge Crystal Edmonson Levonius was appointed by Governor Greg Abbott to serve as judge of this court. Judge Levonius will be up for election in November 2022.

The 485th Judicial District Court of Tarrant County is a general jurisdiction court with preference for criminal cases. No judge has been appointed for this court yet.

The next wave of new courts will go online in September and October 2022.

The 476th Judicial District Court of Hidalgo County and the 483rd Judicial District Court of Hays County will begin September 1, 2022.

The 474th Judicial District Court of McLennan County and the 480th Judicial District Court of Williamson County will begin October 1, 2022.

The 87th Texas Legislature added more courts for 2023.

The 475th Judicial District Court of Smith County will begin January 1, 2023. Several County Courts at Law will also begin.

As Texas continues to grow, it is expected that the Texas Legislature will take up creation of new courts during its 88th Session beginning January 2023. For now, our judiciary will continue working diligently in 2022 with the help of a few more courts.

Enforcements actions can be a source of confusion for many. While enforcement actions actually allow for many different remedies, many view them in the family law context as being simply synonymous with contempt of court.

Enforcement is the act of compelling observance or compliance with a law, rule or obligation. An enforcement case in family law compels compliance with a court order.

So if enforcement of a judgment is the right – what are the remedies for that right? Remember that at law a right goes with a remedy (or more than one remedy). A legal remedy is the MEANS by which a court of law enforces a right. “For every right there is a remedy. Where there is no remedy, there is no right.” (William Blackstone)

Generally, remedies are in two broad categories – judicial remedies or those that a judge can award — versus extrajudicial remedies or self-help that keeps people out of the court system.

Judicial remedies generally fall in 3 categories – monetary damages, declaratory relief, and equitable remedies like injunctions or specific performance or even contempt of court.

In this continuing legal education presentation, I discuss the different remedies for enforcement beyond contempt. I also deep dive into contempt actions — how to prosecute them, how to defend them and how to appeal them.

This presentation is approved for 1.0 hour of CLE credit by the State Bar of Texas.

Watch here: https://fb.watch/9rW1HFWQLW/

Here’s my written notes from the presentation: Enforcement versus Contempt

When are you entitled to a jury trial in family law cases?

Only 11 states allow jury trials for divorces. Texas is the only state that allows a jury trial for custody matters. The Texas Constitution guarantees your right to jury trial in civil cases.

The right of trial by jury shall remain inviolate. The Legislature shall pass such laws as may be needed to regulate the same, and to maintain its purity and efficiency.”

TEX. CONST. ART 1, § 15.

The Texas Constitution further states:

In the trial of all causes in the District Courts, the plaintiff or defendant shall, upon application made in open court, have the right of trial by jury; but no jury shall be empaneled in any civil case unless demanded by a party to the case, and a jury fee be paid by the party demanding a jury, for such sum, and with such exceptions as may be prescribed by the Legislature.”

TEX. CONST. ART 5, § 10.

What can a jury decide in a divorce?

A jury can give binding verdicts on limited issues a divorce. A jury can determine the grounds for divorce. Texas has seven grounds for divorce which are found in chapter 6 of the Texas Family Code. The grounds are divided between no-fault grounds and fault grounds. The three no-fault grounds are: 1) Insupportability; 2) Living apart for three years or longer; and 3) Confinement to a mental hospital where one spouse has been confined for at least three years and it is unlikely that, if adjustment occurs, a relapse is probable. The four fault grounds are: 1) Cruelty; 2) Adultery; 3) Abandonment; and 4) Conviction of a felony.

A jury can also determine the character of property. Is the property separate property? Is the property community property? Is the property mixed character such that it is part separate property and part community property? The jury can determine the value of the property with the jury question being similar to: “State in dollars the value of Property X.” A reimbursement claim by one marital estate to another marital estate, as well as whether an offset against such reimbursement claim exists are also a jury questions.

A jury is prohibited from giving a binding verdict on the following matters: how the property will be divided between the parties; whether a premarital agreement is unconscionable; attorney’s fees to be awarded; and costs of court to be awarded.

What can a jury decide in a suit affecting the parent-child relationship?

Child issues come before the court when married parents get divorced and the Suit Affecting the Parent-Child Relationship (SAPCR) is combined with the divorce. Child issues also come before the court when unmarried parents file an original SAPCR or when unmarried or formerly married parents file a petition to modify the parent-child relationship.

A jury can decide the following child related issues:

  1. Whether a party will be appointed a sole managing conservator and the identification of which parent will be appointed the sole managing conservator;
  2. Whether the parties will be appointed joint managing conservators;
  3. Whether a possessory conservator will be appointed and the identification of that possessory conservator;
  4. Which joint managing conservator will have the exclusive right to designate the primary residence of the child;
  5. Whether there will be a geographic restriction on the primary residence of the child; and
  6. If there is a geographic restriction, determination of what that geographic restriction will be (i.e., State of Texas; Dallas County; Collin County and counties contiguous to Collin County).

A jury cannot give any opinion on issues regarding parentage, child support, the terms or conditions of possession or access, or what rights and duties the conservators will have (not including who has the exclusive right to determine the child’s primary residence).

Many factors go into deciding whether to ask for a jury trial. While Texas gives litigants the opportunity to have the case decided by a jury, knowing what a jury can actually decide is a helpful starting point when analyzing your case strategy.

 

Our October monthly free lawyer’s continuing education presentation focused on new cases and legislation affecting Texas family law.

Here’s a link to watch the video on Facebook: https://fb.watch/8SJMhZFiJF/

Here’s the presentation with all the details: What’s New in Texas Family Law This Fall?

Here’s a link to Elisa Reiter’s excellent articles about the new legislation (read them together because the second article updates the first one):

TexasLawyerRevisionstotheTexasFamilyCodethatEveryAttorneyShouldKnow

art-texas-lawyer-governor-abbott-vetoes-bill-requiring-standardization-of-protective-order-applications-7-20-21

 

 

What are the top 10 cases involving Texas LGBT rights in family law cases? Let’s discuss the relevant US Supreme Court cases involving LGBT rights and then move to the relevant Texas cases.

Here’s a link to my video: https://fb.watch/7vHXl76g1g/

Here’s a link to my pdf that I used during the presentation: Top 10 LGBT Texas family law cases