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Houston, Dallas, McKinney and Denton, Texas child custody and family law lawyers/attorneys agree that one of the most difficult problems individuals encounter when faced with divorce is the prospect of losing custody of their children. In Texas, when determining who will take custody of the couple’s children, the court will consider the best interest of the child when evaluating several factors which include but are not limited to: the wishes of the parents, the wishes of the child, the child’s adjustment to his / her present home, the mental and physical health of the parties involved, the proximity of the divorced parents; new living arrangements, child abuse, past patterns of paternal commitment, and the child’s relationship to his / her siblings. Our family law and child custody attorneys/lawyers in Dallas, Denton, McKinney and Houston Texas can help you with your case.
The ruling of the Texas Supreme Court in Dawson-Austin v. Austin, 968 S.W.2d 319 (1998), answered an important family law question: In a divorce proceeding, does a Texas court have jurisdiction over and, therefore, the ability to characterize and divide property brought to Texas by the unilateral action of one spouse when the other spouse has had no personal contact with Texas? The answer provided by the court: No. Both parties must have sufficient personal contact with Texas before this state can exert jurisdiction over personal property within the state.
On March 10, 1992 Minnesota hearing aid tycoon William Austin packed the stock certificate evidencing his 100% ownership of Starkey Laboratories, Inc., a Minnesota corporation, and moved to Texas. On September 10, 1992, six months to the day after his arrival, which coincidentally was the day he became a Texas domiciliary for divorce purposes, William filed for divorce from Cynthia Dawson-Austin and promptly served her in California four days later. The two had married in 1980 while in China on a business trip. Two years later they filed a marriage certificate in Minnesota and continued to live together in Minnesota until February 1992. During their marriage, the Austins had acquired real property in a number of different states, including a second home in California where Cynthia was living at the time William moved to Texas. She had filed for divorce there in April 1992, but had not served William. She did not do so until after she was served with citation in the Texas proceeding.
When he moved to Texas, William, brought a significant piece of property over the Texas border: the Starkey stock certificate. Even though Cynthia's only contact with this state had been to attend a business convention nine or ten years earlier, William asked Texas to assert jurisdiction over Cynthia and the property in Texas including the Starkey stock.
Thirty-eight and a half million reasons to become a Texan
William owned the Starkey stock long before he married
Cynthia in 1980. It was worth about $1.5 million then. In 1992
the corporation had a net worth of at least $40 million. In
Minnesota the value of the stock at time of marriage would be
restored to William, but the $38.5 million increase in value was
available for equitable distribution as a marital asset to the
extent it was attributable to the efforts of either spouse. In
Texas the stock would be William's separate property under the
"inception of title" doctrine because it was acquired prior to
marriage. Moreover, since the $38.5 million increase in value
represented enhancement of his separate property, it would be
entirely William's and completely unavailable to Cynthia.
Clearly, much was at stake since the Starkey stock comprised the
vast majority of the Austin marital estate.
In the trial court
The proceeding in the trial court initially centered around
the procedural question of whether Cynthia had waived her special
appearance and submitted to Texas jurisdiction for all purposes.
The trial court determined that she had. Notwithstanding the fact
that the California court had already signed a divorce decree, the
Texas court asserted its jurisdiction over Cynthia and tried the
case. The court restored the Starkey stock to William, including
all of its enhanced value, as his separate property. The property
determined to belong to the parties' community estate was divided
in a manner the court deemed to be just and right, and the parties
were declared to be divorced.
In the court of appeals
Not surprisingly, Cynthia appealed. On January 3, 1995, the
Dallas court of appeals issued its first opinion, reversing the
case and holding that the increase in value of the Starkey stock
should have been characterized as community property via the
application of Minnesota law. As a result, the property division
giving William all of the $38.5 million increase in value was
simply not just and right. The case was ordered remanded for a
new property division. Then, in a somewhat unusual move over a
year later, the Dallas appeals court withdrew that opinion and
issued a new one in February 1996 which was published at 920
S.W.2d 776 (Tex.App.-Dallas 1996). This time the court ruled that
the character of the stock would be determined under Texas law.
The $38.5 million of enhanced value was back in William's pocket.
In the Texas Supreme Court
On the ropes again, Cynthia filed a petition for writ of
error in the Texas Supreme Court. On February 13, 1998, the court
reversed the trial and appellate courts (published at 968 S.W.2d
319). It decided that Texas did not have jurisdiction over
Cynthia or the Starkey stock. The majority ruled that Cynthia had
not waived her special appearance and that Texas did not have
jurisdiction over the stock just because William unilaterally
brought the certificate into the state. Perhaps the transaction
did not pass the "smell test." Or, perhaps the court was
compelled by the fact that neither party had ever lived in Texas
until William and the stock certificate took up residence here.
Whatever its reasoning, the Texas court ruled that Cynthia did not
have the kind of minimum, purposeful contacts with Texas requisite
to avoid offending traditional notions of fair play and
substantial justice:
Now what?
The journey began in 1992. By 1993 the parties had been
divorced by courts in Texas and California. As 1999 looms, the
$38.5 million question lingers. Unquestionably, William was a
Texas domiciliary when he filed for divorce and, as such, was
entitled to ask the Texas court for an adjudication of his marital
status. Although the Texas trial court had the power to give
William a divorce, the Texas Supreme Court says its power stopped
there. The Court rebuked any notion that prospective litigants can
pack up their belongings, come to Texas, and divide property here
without a successful showing that the responding spouse has
meaningful contact with this state.
This brings us full-circle back to the question of what to do about the property. William's petition for writ of certiorari, pending before the United State Supreme Court, points out that there may be no state with jurisdiction to divide these people's property. Cynthia is a California resident, denying any meaningful contacts with Texas. William is a Texas resident (presumably) denying any meaningful contacts with California. Both have meaningful contacts with Minnesota, but neither is a resident.
Do we need "federal" divorce courts? That would eliminate the possibility of forum shopping, but maybe forum shopping is the lesser of those two evils. Besides, a "federal" jurisdiction would still leave the question of choice of law. Perhaps a better solution would be for the competing states to confer and determine which of them could more fairly assert jurisdiction over both parties, much as is done in jurisdictional disputes under the UCCJA. In the meantime, the Austin millions remain in limbo.
Holmes, Diggs, Eames & Puhl
Campbell Centre I
North Tower
8350 N. Central Expressway
Suite 1100
Dallas, Texas 75206
Phone: 214.520.8100
Facsimile: 214.520.6565
Website: www.texasfamilylawyers.com
E-mail: e-mail@texfamlaw.com