Court of Appeals of Texas, Dallas.

Margaret Jan KNOEPPEL, Appellant,

v.

John C. KNOEPPEL, Appellee.

No. 05-92-00089-CV.

|

April 5, 1993.

Before THOMAS, BURNETT and WIGGINS,¹ JJ.

O P I N I O N

THOMAS, Justice.

*1 This appeal arises out of a divorce action between Margaret Jan Knoeppel (Wife) and John C. Knoeppel (Husband). In nine points of error, Wife complains generally about the property division contained in the decree of divorce. We hold that the trial court abused its discretion in dividing the community estate. Therefore, we sustain the eighth point of error. Accordingly, we reverse the trial court’s judgment insofar as the property division, and remand the cause for further proceedings.

FACTUAL BACKGROUND

The parties were married in 1972. During the marriage, they accumulated various items of property including cars, a house, profit-sharing funds, individual retirement accounts, several insurance policies, and retirement benefits.

Husband was a pilot throughout the marriage until he was “grounded” in 1986 due to mental health problems. Although the record does not disclose the details of Husband’s employment benefits, he received full compensation from American Airlines in the form of sick pay until his flight-disability payments began in March 1988. Wife’s employment was terminated in October 1990 due to a work-related injury.

In late December 1990 or early January 1991, Wife received her retirement benefits. Wife gave Husband $6000 which represented one-third of the sums she received. A few weeks later, Husband announced that he wanted a divorce because he was in love with another woman. Immediately following his announcement, Husband moved out of the home. Within two months, Wife filed for a divorce. Following a bench trial, the court entered a decree of divorce and a subsequent “corrected” decree, which forms the basis of this appeal.

DIVISION OF MARITAL ESTATE

In her eighth point of error, Wife asserts that the trial court abused its discretion in dividing the community estate. We agree.

A. Standard of Review

Section 3.63 of the Texas Family Code requires a trial court to divide the property in a manner that is just and right, having due regard for the rights of each party. TEX. FAM. CODE ANN. § 3.63(a) (Vernon 1993). A trial court has broad discretion in this regard and its division will not be disturbed unless, after reviewing the entire record, a clear abuse of discretion is shown. Vallone v. Vallone, 644 S.W.2d 455, 460 (Tex. 1982).

A trial court’s ultimate division need not be equal as long as it is not so disproportionate as to be inequitable and the circumstances justify an unequal division. Thomas v. Thomas, 525 S.W.2d 200, 202 (Tex. Civ. App.-Houston [1st Dist.] 1975, no writ). On appeal, we must examine each case on its own merits to determine whether an unequal distribution was justified. Oliver v. Oliver, 741 S.W.2d 225, 229 (Tex. App.-Fort Worth 1987, no writ).

A trial court may consider many factors in making its determination of a just and right division. Some of the factors that the trial court may consider include the parties’ relative earning capacities, business experience, education, age, health, and physical condition. See Murff v. Murff, 615 S.W.2d 696, 699 (Tex. 1981); Young v. Young, 609 S.W.2d 759, 761 (Tex. 1980). Additionally, the trial court may consider the fault in ending the marriage and the benefits the innocent party would have derived through a continuation of the relationship. Murff, 615 S.W.2d at 698. The parties’ respective need for support in the future has been defined as one of the most important factors that should be considered. See Goren v. Goren, 531 S.W.2d 897, 900 (Tex. Civ. App.-Houston [1st Dist.] 1975, writ dism’d). The above stated considerations are not exclusive because the trial court has the authority to consider all factors relevant to the particular circumstances. See Jones v. Jones, 699 S.W.2d 583, 585 (Tex. App.-Texarkana 1985, no writ) (unequal division in wife’s favor justified in part by husband’s large separate estate).

B. Trial Court’s Division

*2 In addition to the household furnishings and personal effects in her possession, all bank or credit union accounts in her name or subject to her control, and all life insurance policies on her life, Wife received:

(1) the 1989 Cadillac (the value of which is not reflected in the record, although the testimony established that the car was subject to a debt of approximately $11,000);

(2) an IRA in her name in the approximate amount of $17,000;

(3) one-half of her pension and/or retirement benefits with her former employer (the value of which is not reflected in the record, although testimony revealed that at age 60, she would begin receiving the sum of $162 per year);

(4) one-half of the community interest in Husband’s retirement benefits with American Airlines (the value of which is not reflected in the record);

(5) 252 shares of Sears, Roebuck & Co. stock valued at $10,000 at the time of the trial;

(6) all right, title and interest in her lawsuit arising from the work-related injury; (the value of which was not known, however, the testimony established that the net recovery would be reduced by the workers’ compensation benefits that she had received); and

(7) 60 percent of the proceeds from the sale of the home which represented an award of approximately $16,856.

In addition to the personal effects and household furnishings in his possession, and all bank or credit union accounts in his name or subject to his control, Husband was also awarded the following items of property:

(1) a 1987 Mustang which was free of any debt (the value was not established in the record);

(2) all insurance policies on his life, which included two policies with a cash surrender value of at least $5200;

(3) one-half of Wife’s pension or retirement benefits with Sears, Roebuck & Co.;

(4) the IRA in his name in the approximate amount of $17,000;

(5) his retirement benefits with American Airlines, subject to the percentage awarded to Wife;

(6) 40 percent of the proceeds from the sale of the community home, which represented an award of approximately $10,790;

(7) all right, title and interest to his profit sharing with American Airlines in the approximate amount of $35,000; and

(7) all right, title and interest to his disability income and loss-of-license insurance payments, the value of which is not reflected in the record. It is, however, undisputed that Husband received $5200 per month as a result of these payments.

Each party was ordered to pay one-half of the community debts that existed at the time of the separation. Further, they were each ordered to pay any debts that they had incurred after separation including their respective attorneys’ fees. Husband was ordered to hold Wife harmless for any penalties or interest that might be assessed against her for 1990 income taxes.²

C. Application of the Facts to the Law

*3 We note that Husband received the bulk of the community’s most valuable assets in that he received all right, title and interest to the American Airlines profit-sharing account, the disability benefits and the loss-of-license payments. Further, because of his separateproperty interest, Husband also received a greater percentage of the American Airlines retirement benefits. We conclude that the record does not reveal circumstances that would justify this property division.

First, there is a substantial disparity in the parties’ incomes and their earning capacities. Because of the work-related injury, Wife had been unemployed since October 1990. She had not been able to secure employment due to the nature of the injury. Wife’s sole source of income was the workers’ compensation benefits which totalled less than $12,500 per year. Husband, on the other hand, received more than $72,000 per year in the form of disability payments, insurance benefits, and salary from his part-time employment as a flight instructor.

Second, Husband had certain separate property which included life insurance policies and the separate-property interest in his retirement benefits. The only mention of any separate property of Wife was the scant testimony that she received approximately $50,000 from the sale of her separate property home at or about the time that the parties purchased the community home. The testimony indicated that this money was expended in connection with the purchase of the new home. While a trial court does not have authority to divest a party of his or her separate property, it may consider the relative size of the parties’ separate estates in the ultimate property division. See Cameron v. Cameron, 641 S.W.2d 210, 213 (Tex. 1982); Jones, 699 S.W.2d at 585.

Third, Wife was no longer eligible to enjoy the benefits of Husband’s major medical coverage through American Airlines. This loss is particularly significant considering Wife’s medical condition and her inability to secure employment that would provide the opportunity for her to obtain some type of group insurance coverage.

Last, although both parties suffer from poor health, the record clearly shows that Husband’s ability to work and provide for himself far exceeds that of Wife. Despite his mental condition which resulted in the revocation of his pilot’s license, Husband maintained part-time employment as a flight instructor. The testimony revealed that he earned between $875 and $2100 per month in this position. This sum is in addition to the $5200 per month he received in the form of disability payments and insurance benefits. This is to be contrasted with Wife’s situation of being unable to find suitable, permanent employment due to her physical condition. As previously indicated, Wife’s sole income was in the form of workers’ compensation payments. The record further indicated that Wife was enrolled in a junior college program to be trained as a respiratory therapist. Wife’s testimony established that this program would take three years to complete, assuming that she enrolled each and every semester, including the summer sessions.

*4 The record clearly demonstrates that Husband has a notable greater earning capacity than Wife, and he has a significantly larger separate estate. We conclude that under the circumstances of this case, the trial court’s property division is unreasonable, unjust, and clearly inequitable. Thus, we hold that the trial court abused its discretion in dividing the community estate. We sustain Wife’s eighth point of error.

REMAINING POINTS OF ERROR

Wife also contends that the trial court erred by failing to divide certain marital assets. She also argues that the trial court erred by failing to award any reimbursement for her separate funds that were utilized in connection with the purchase of the community home. All of the property issues will be before the trial court on remand. In view of our disposition of this cause, we need not address these contentions.

It is also unnecessary for us to address Wife’s contentions that the trial court erred in its decision that Husband’s disability payments and loss-of-license benefits are separate and distinct from his retirement benefits. We conclude from this painfully vague record that we, as well as the trial court, do not have sufficient evidence to make that determination.

We reverse the trial court’s judgment insofar as the property division. Further, we remand the cause for a just and right division of the community estate.

	Footnotes
1		Justice Kevin B. Wiggins participated in this cause at the time it was submitted for decision. He did not, however, participate in the issuance of this opinion.
2		The testimony established that during the pendency of the divorce action Husband had Wife sign a joint income tax return. At that time, however, Husband had already filed a separate return. As a result, Wife did not file a return and Husband receivedapproximately $5500 as a refund. Given the circumstances surrounding Husband’s actions and the fact that he had sole control over the refund, it is not surprising that he was ordered to hold Wife harmless from any penalties or interest.