law-reimbursement-claim-in-divorce property division


When one marital estate improves another without receiving a benefit, a claim for
reimbursement may arise. See Tex. Fam. Code Ann. § 3.402 (West Supp. 2010); Vallone
v. Vallone, 644 S.W.2d 455, 458-59 (Tex. 1982). A trial court applies equitable principles
in deciding whether to recognize a claim for reimbursement.  See id. at 458; Tex. Fam.
Code Ann. § 3.402(b). A decision to deny a claim for reimbursement is reviewed on
appeal for abuse of discretion. See Garcia v. Garcia, 170 S.W.3d 644, 649 (Tex. App.—
El Paso 2005, no pet.)


8th district (
08‑06‑00171‑CV, ___ SW3d ___, 03‑26‑09, pet. denied Oct 2009)
divorce property division, characterization of property, constructive fraud, offset reimbursement

Reimbursement Claim

ELIZABETH W. BUFKIN v. EDWARD O. BUFKIN, JR.; from Dallas County; 5th district (05-06-01719-
CV, 259 SW3d 343, 07-01-08) 2 petitions, pet. denied Nov. 2008)(prejudgment interest,
admissibility of expert testimony, harm analysis of evidentiary ruling by trial court, divorce fault
grounds, prenup,
stipulation agreement)  The trial judge refused to reimburse “prior sums awarded
as interim attorneys' fees to Elizabeth” because they “effected a just and equitable division of the
community income out of which they were paid.” Although labeled attorneys' fees, the record
reflects that the money Edward wants reimbursed were proceeds from quarterly dividends of
Nordasko stock issued to its shareholders between the Fifth Anniversary and the Divorce Date.
Edward admitted that the $64,000 at issue only reflected two of sixteen quarterly dividends   See
Footnote 6  he received between the Fifth Anniversary and the Divorce Date.
As dividends, these payments constituted income. Fischer-Stoker v. Stoker, 174 S.W.3d 272, 279
(Tex.App.-Houston[1st Dist.] 2005, pet.denied) (“[D]ividends paid on investments, whether the
investments are separate property or not, are income under Texas law and generally community
property”). Under Section XVIII of the Agreement, income “yielded by separate property” paid after
the Fifth Anniversary and before the Divorce Date is community property. As such, the trial court
has broad discretion to determine how to allocate the money. Penick v. Penick, 783 S.W.2d 194,
198 (Tex. 1988); Hailey v. Hailey, 176 S.W.3d 374, 384 (Tex.App.-Houston[1st Dist] 2004, no pet.)
(trial court has broad discretion both in evaluating a claim for reimbursement and making a just and
proper division of the community). Further, as community property, Edward has no right of
reimbursement of funds identified as dividends because they are already part of the community
marital estate defined in Texas Family Code Section 3.401(4)(A). Tex. Fam. Code Ann. § 3.401(4)
(A) (Vernon 2006).
We overrule Edward's fifth issue.