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Click here for the full text of this decision FACTS:Xavier and Stephanie Garza were married on March 9, 1996. Their first son was born in 1997, and their second son was born in 1999. Both children have various medical conditions requiring special attention. Before the marriage, Stephanie was employed as a teacher but soon after the wedding and the birth of her and Xavier’s first son, she stayed at home to take care of the children. Throughout their marriage, Xavier was the primary financial provider for the family. A year before the wedding, he created a corporation called Hacienda Tile Inc. He created Hacienda Tile Inc., a subcontracting company, for the purpose of installing ceramic and stone tiles. Xavier and his father were the only members of the board of directors, and Xavier was the sole shareholder. In 1998, after the wedding, Xavier expanded his business and began to purchase land and construct custom homes under the name Hacienda Homes. On Jan. 25, 2002, Xavier filed for divorce. On Aug. 20, 2003, Xavier and Stephanie were appointed joint managing conservators in the final divorce decree, but Xavier was awarded the exclusive right to determine the children’s primary residence, the exclusive right to consent to their medical treatment and the exclusive right to make decisions about their education. Xavier was given a superior right to possess the children. Stephanie was awarded possession of the children pursuant to a possession order that deviated from the standard possession order, and she was ordered to provide health insurance for the children and to pay $232 per month in child support. With regard to the division of property, the trial court found that the parties had $147,742 in equity in their community homestead. The trial court awarded the homestead to Xavier and ordered him to pay Stephanie the principle sum of $73,871 plus annual interest of 6 percent in 60 monthly payments of $1,428.13. The court determined that Hacienda Tile Inc. and all assets, property and accounts related to or used in connection with this business were Xavier’s separate property. The court also determined that several shares of stock, jewelry and various household items were Stephanie’s separate property. In 11 points of error, Stephanie appealed the final decree of divorce. HOLDING:Affirmed in part, reversed and remanded in part. Stephanie argued that the trial court abused its discretion in denying her reimbursement claims regarding Xavier’s house in Austin, Xavier’s 1972 Oldsmobile Cutlass and legal fees paid by Xavier relating to his daughter from his previous marriage. But the court held that the trial court was within its discretion to deny the equitable remedy of reimbursement in all three circumstances. Stephanie argued that the trial court improperly characterized three real properties as Xavier’s separate property. During the marriage, Xavier purchased three lots and, after constructing a spec home on each lot, sold them to interested buyers under the name of Hacienda Homes. According to Stephanie, the trial court erred in finding that these three real properties were Xavier’s separate property, because he failed to overcome the community property presumption by clear and convincing evidence. The court agreed, noting that the characterization of property as either community or separate is determined by the inception of title to the property. The court found that the trial court’s finding that the spec homes were Xavier’s separate property was not supported by factually sufficient evidence. Because the spec homes were a substantial portion of the community estate, the court stated that the trial court’s mischaracterization of the spec homes affected the just and right division of the community estate, constituting an abuse of discretion. As such, the court remanded the entire community estate for a just and right division based upon the correct characterization of the property. Because the court remanded the entire community estate to the trial court for a just and right division, it did not reach other issues regarding the property. Regarding the possession order, the court found that the trial court did not abuse its discretion by giving Xavier several exclusive rights regarding the children. The court also held that the trial court was within in discretion in admitting as evidence Stephanie’s medical and mental health records and audiotapes of conversations between the ex-spouses. OPINION:Angelini, J.; Duncan, Angelini and Speedlin, J.J.

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