Phillip Gary Farmer v. The State of Texas--Appeal from 43rd District Court of Parker County

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State: Texas

Court: Texas Northern District Court

Docket No: 03-01-00568-CR

Case Date: 11/21/2002

Plaintiff: Taft, Randy

Defendant: The State of Texas--Appeal from 148th District Court of Nueces County

Preview:NO. 07-04-0515-CV IN THE COURT OF APPEALS FOR THE SEVENTH DISTRICT OF TEXAS AT AMARILLO PANEL E JUNE 19, 2006 ______________________________ IN THE MATTER OF THE MARRIAGE OF TAMELA JO FRANKLIN AND ROBERT EARL FRANKLIN AND IN THE INTEREST OF M.C.F., A CHILD _________________________________ FROM THE 286TH DISTRICT COURT OF HOCKLEY COUNTY; NO. 03-12-19404; HONORABLE HOWARD PHELAN, JUDGE _______________________________ Before REAVIS and CAMPBELL, JJ., and BOYD, S.J.1

MEMORANDUM OPINION

This appeal concerns the characterization of an annuity issued as part of a settlement of a spouse's personal injury suit during marriage. The trial court determined the annuity was community property subject to division at divorce. We affirm.

Most of the relevant facts in this case are undisputed. Tamela Jo and Robert Earl Franklin were married in 1979. They had two children, one of whom had turned 18 before the divorce. Robert had a stable job as a welder making $26,250 a year. Tamela was John T. Boyd, Chief Justice (Ret.), Seventh Court of Appeals, sitting by assignment.
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employed as a nurse earning a similar amount. In 1997 Robert suffered a serious heart condition necessitating valve replacement surgery and ongoing care. Robert's heart problems were attributed to his use of the drug combination fen/phen, and as one of twenty-nine plaintiffs he brought a personal injury suit in 1999. Tamela was not a party to the suit. A petition in the personal injury suit was introduced in the divorce proceeding. It sought recovery for past and future physical pain and mental anguish, disfigurement and medical expenses.

Robert's suit was terminated by a settlement agreement about August 2000. Parts of the settlement agreement also appear in the record. In exchange for his release of all his current and future claims Robert received an initial payment of $523,203.43 and periodic payments through an annuity issued by American General Assignment Corporation. The annuity provided for guaranteed monthly payments of $5000 for five years, increasing to $7838 for Robert's lifetime but for twenty-five years certain, six additional payments ranging between $20,000 and $250,000, and semiannual payments of $10,000 and $12,500 for the benefit of the parties' children through their college-age years.2

The couple separated in November 2003 and Tamela filed a petition for divorce the following month. The case was tried without a jury in June 2004 where Tamela and Robert

The trial court's findings of fact state that the annuity carried minimum guaranteed payments of $3,141,400. The settlement agreement and annuity provided for Robert's designation of a beneficiary for the guaranteed payments in the event of his death before their completion. 2

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were the only witnesses. Their testimony focused on three main areas: the grounds for divorce,3 the personal injury suit, and disposition of the settlement proceeds.

The evidence of Robert's income, injuries and total disability recited above was undisputed. Tamela testified she had taken a job with lower pay because it would provide health insurance for Robert and allow her to spend more time caring for him and the children. She also testified to her participation in the settlement discussions in the personal injury case and her belief that the recovery was to compensate them jointly. Robert testified to his belief the settlement was for his claims only.

The evidence concerning disposition of the settlement funds showed the couple had no significant assets before the settlement. They had little or no equity in their house and insubstantial personal property. The initial payment was placed in a joint money market account at a bank. Monthly annuity payments were placed in another joint account in the same bank. Funds from both accounts were used to purchase, remodel and furnish a home, pay off debts, and purchase vehicles for members of the family. They were also used to pay living and medical expenses. Tamela testified that she believed all of Robert's medical bills from his heart condition through the time of trial had been paid. Robert testified all but "about $2,000" of his medical expenses had been paid out of the settlement proceeds.

The divorce decree dissolved the marriage on the ground of adultery. Robert acknowledged he had fathered two children by another woman during the marriage. 3

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The trial court rendered judgment terminating the marriage and naming Tamela managing conservator of the minor child. The trial court found the annuity was community property because it consisted of commingled funds and Robert failed to identify it as his separate property by clear and convincing evidence. The decree awarded to Tamela the home, personal property in her possession, and forty percent of the annuity. It awarded Robert vehicles and personal property in his possession and sixty percent of the annuity.4 The trial court rendered findings of fact and conclusions of law supporting its decree.

Robert's two issues on appeal challenge the trial court's characterization of the annuity as community property and its imposition on him of the burden to establish the annuity as his separate property. We initially address the second issue.

Robert agrees we must begin with the presumption that property possessed by either spouse on dissolution of marriage is community property. Tex. Fam. Code Ann.

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