X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:In this appeal from a divorce proceeding, appellant D. B. challenges the trial court’s rendition of summary judgment in favor of his ex-wife, appellee K. B., that the potential proceeds from appellant’s qui tam lawsuit are community property. HOLDING:Affirmed. Although appellant objected to appellee’s failure to give him at least 21 days notice of her intention to use deposition transcripts as summary judgment evidence, appellant failed to obtain a written ruling on his objection. The court holds that appellant has waived any error in regard to his argument that appellee failed to notify him of her intention to use deposition transcripts as summary judgment evidence at least 21 days prior to the summary judgment hearing. No Texas case has addressed the issue of whether a potential qui tam fee that has not been received during marriage qualifies as community property. However, in 1976, in another case of first impression, the Texas Supreme Court addressed an analogous issue in Clearly v. Clearly, 544 S.W.2d 661 (Tex. 1976). In Clearly, as part of a property division pursuant to a divorce, a wife was granted a “fractional interest in future military retirement benefits if and when received by [her] husband.” The benefits had not vested and had not been acquired by the husband during the marriage and were subject to forfeiture in the event that the husband died or was dishonorably discharged prior to his retirement date. Nevertheless, the court held that, because the husband had a contingent interest in the benefits at the time of divorce, the benefits were “a community asset subject to consideration along with other property in the division of the estate of the parties.” An intermediate California appellate court addressed the exact issue presented here in Biddle v. Biddle, 52 Cal. App. 4th 396 (Cal. Ct. App. 1997). In Biddle, the court held that, because a husband had discovered a False Claims Act violation and had filed a qui tam lawsuit during marriage, his potential qui tam fee “amount[ed] to a contingent future interest and divisible community property.” Although Biddle is not binding precedent, in reaching its holding, the court relied on Brown v. Brown, 15 Cal. 3d 838, 126 Cal. Rptr. 633, 544 P.2d 561 (1976), a case decided by the California Supreme Court, which the Texas Supreme Court quoted extensively in Clearly. The court finds the reasoning of Biddle to be persuasive, and recognizes that under appropriate circumstances a potential fee from a qui tam lawsuit, although not received during marriage, may qualify as community property. Here, appellee produced summary judgment evidence, consisting of excerpts from appellant’s testimony at the in camera hearing, which established that, during their marriage, appellant learned of the fraud against the federal government, filed the qui tam lawsuit, and provided the U.S. Attorney’s Office with knowledge that would be of interest to them. Once the suit was filed, appellant’s receipt of a qui tam fee became contingent upon the U.S. Attorney’s Office prosecuting his case and securing a monetary settlement or a damage award. However, were appellant to receive a fee in the future, he would not have “earned” that fee on the date on which it was paid. Rather, he would have earned the fee by discovering the fraud, filing the qui tam lawsuit, and providing the U.S. Attorney’s Office with information; all events that occurred during appellant’s marriage to appellee. Accordingly, the court holds that appellant possessed a contingent interest in the qui tam fee during his marriage to appellee. To rebut the community presumption, the appellant was required to produce clear and convincing evidence that he did not earn the potential qui tam fee during the marriage. Texas Family Code 3.003. However, in his no-evidence summary judgment motion, appellant simply argued that the evidence showed that his interest in the qui tam fee, “if any, [was] so remote and so unrelated to the community estate” that the potential fee could not be community property. Because appellant failed to produce any summary judgment evidence establishing that he did not earn the potential qui tam fee during marriage, the court holds that appellant’s interest in the fee was community property and was properly subject to division by the trial court as part of the divorce. OPINION:Jennings, J.; Nuchia, Jennings and Keyes, JJ.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 3 articles* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.