Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:Before Paul Max Pace and Linda Ruth Thomas were to wed in March 1997, Thomas had recently inherited approximately $2.7 million from her parents’ estate. She invested the inheritance in an account called the 172 account. Thomas drew up a prenuptial agreement that Pace did not sign before the wedding. He then refused to sign the agreement when asked three weeks after the couple wed. After Pace’s refusal to sign the prenuptial agreement, Thomas directed A.G. Edwards to “sweep” all dividend interest and income from the 172 account and place it into a new account, called the 204 account, so that no community property would accrue in the 172 account. Two months later, Thomas wrote a $1,000 earnest money check to purchase was called the Harvest Hill house for the couple to live in. She also wrote a $200 check for an inspection. Thomas then wired $194,102 from the 172 account to the title company to pay for the house in full. Though Pace did not put any of his own money toward the house’s purchase, he asked that his name be put on the deed, so he wouldn’t feel like a tenant. Thomas agreed, and the couple lived in the Harvest Hill house until they separated. During that time, Thomas paid the ad valorem taxes, the fire and extended coverage insurance and the upkeep of the house from the 204 account. Three years later, Thomas set up the Linda Ruth Thomas Management Trust to segregate all of her separate property. The 172 account was transferred to this trust, and the interest and other income from the 172 account continued to be swept into the 204 account. Thomas also set up a power of attorney and prepared her will. Under the power of attorney, Thomas’ daughter was given the right to make decisions on Thomas’ behalf, including ones involving the Harvest Hill house, which was described as having been acquired jointly with Pace. Pace was also designated as the recipient of the house upon Thomas’ death. Thomas filed for divorce in the latter part of 2001. Thomas filed a motion for partial summary judgment seeking judgment as a matter of law denying Pace’s characterization of Thomas’ assets � the accounts and the trust � as community property, and confirming that all purchases of securities during the marriage were made with her separate property funds. Thomas supported her motion with her own affidavit and that of Shelley Turner, who handled the 172 account. Pace’s response included four monthly statements for 1997 for the 172 account and three monthly statements for 1997 for the 204 account, along with the affidavit of Barbara Dossett, a bookkeeper who had inspected the account statements. The trial court granted Thomas’ partial summary judgment. The trial court tried the remaining issues, and a divorce decree was signed. HOLDING:Affirmed. The court addresses whether the evidence supports the trial court’s findings of fact characterizing the Harvest Hill house and the assets in the management trust, including the 172 account, as Thomas’ separate property. As to the Harvest Hill house, Pace argues that, when Thomas put Pace’s name on the deed, she was making him a gift of one-half of the interest in the house. On the other hand, the earnest money was paid from Thomas’ separate funds, and Pace admits that he did not make any contribution toward purchase of the house. Because the evidence is uncontroverted that the funds used to purchase the house were all traceable to Thomas’ separate account, the trial court was correct in finding that the house was Thomas’ separate property. As to the management trust assets, he claims that three assets within the trust were not Thomas’ separate property, yet he discusses only one asset: the 172 account. The court does not, therefore, review the evidence surrounding the other two assets Pace did not discuss. As part of the discussion of the 172 account, the court addresses Pace’s contention that Thomas failed to rebut the community property presumption, because she did not trace any of the assets. He further contends that the interest income from the 172 account was not swept properly into the 204 account. Consequently, Thomas’ separate property was commingled with the couple’s community property. The court disagrees with Pace’s argument. Thomas’ testimony that she set up the 204 account to prevent commingling of assets, plus Turner’s corroborating testimony, is enough to dispel the community property presumption. Furthermore, Dossett’s affidavit is not enough to raise a fact issue on the trial court’s finding, as it was conclusory and had no factual basis. Finally, the court addresses Pace’s argument that the trial court’s supposed mischaracterization of the Harvest Hill house and the management trust assets prevented a just and right division of property. Even if the court were to assume this contention was correct, a harm analysis is still necessary, which Pace has not done. Pace makes no argument as to why the property division is unfair or unjust apart from the alleged mischaracterization. OPINION:Lang-Miers, J.; FitzGerald, Lang and Lang-Miers, JJ.

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

Benefits of a Digital Membership:

  • Free access to 1 article* 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 © 2021 ALM Media Properties, LLC. All Rights Reserved.