Opinion issued March 25, 2010
In The
Court of Appeals
For The
First District of Texas
________________
NO.01-08-1023-CV
________________
JO ANN H. MCGEHEE, Appellant
V.
DOUGLAS B. CAMPBELL, Appellee
On Appeal from the 157th District Court
Harris County, Texas
Trial Court Cause No. 2005-64573
MEMORANDUM OPINION
This appeal arises out of a suit to partition real estate owned by Jo Ann H. McGehee (“McGehee”) and Douglas Campbell (“Campbell”). Both McGehee and Campbell complain that the trial court erred in its judgment when it awarded $83,668.05 to Campbell as his share of the home they owned together. McGehee complains that the trial court erred in its award to Campbell because the award considered evidence that McGehee contends was not properly disclosed in Campbell’s discovery responses. Campbell complains that the trial court erred because it credited McGehee for improvements she made without Campbell’s consent, and because it did not properly credit him with half of the payments made for the taxes, mortgage and insurance on the property from August 2001 through October 2003. We affirm the judgment of the trial court, in part, reform the trial court’s judgment to award Campbell $93,567.05, or 49.76% of the equity in the home, and affirm the judgment as reformed.
BACKGROUND
Campbell and McGehee purchased a home together in March 1995 and lived in it together, along with Campbell’s children, for a period of time. In October 2005, Campbell filed a lawsuit in Harris County, seeking to partition the property and alleging that he and McGehee each had a 50% interest in the property. Campbell also alleged that the property was not subject to partition, so he accordingly sought a sale of the property and a division of the proceeds between himself and McGehee. Campbell alternatively asked that, should the property be awarded to McGehee, that he be awarded a disproportionate share of the value of the home as damages, reflecting his ownership interest in the property, and because he alleged that he had paid the down payment on the home, that he had made a disproportionate share of the mortgage payments, insurance and taxes, and that he paid for a disproportionate share of the repairs to the home. Campbell also alleged that McGehee had received rental payments for the use of the home, and requested that those rental payments be deducted from her share of the home’s equity. Campbell also alleged a cause of action for conversion, alleging that he had been excluded from the property and that, as of September 2006, McGehee retained his personal property and effects in the home without his consent. Campbell sought damages for his loss of use of the home.
McGehee denied the allegations, and raised several affirmative defenses. She responded to Campbell’s petition by alleging that she should receive a disproportionate share of the home’s equity due to her own toil and efforts in maintaining the property and due to her own payments of the mortgage, repair costs, protection, and improvement of the home. Additionally, she alleged that she should be compensated for funds she expended to maintain the household and care for Campbell’s children during the period they lived in the home. Campbell denied McGehee’s allegations.
The case was tried to the bench on March 5, 2008. Both parties presented evidence. Campbell and McGehee testified regarding the payments they had made for the down payment and other expenses associated with the property, and regarding the payments the other had made. Both parties introduced exhibits in the form of cancelled checks, invoices, and summaries to substantiate their testimony. The testimony revealed that, during the period in which they occupied the home together, Campbell and McGehee were generally responsible for certain categories of expenses but that there were often times when each would pay an expense they did not usually pay. After August 2001, both parties testified that McGehee paid the bulk of the expenses associated with the home.
After the conclusion of the trial, the court issued its initial ruling on June 5, 2008 as follows: Campbell was entitled to credit for a down payment of $23,026.29, and not entitled to the additional $4,000 he claimed; neither Campbell nor McGehee was entitled to credit for payments they made during the period when they jointly occupied the home; Campbell was entitled to one half of the rents received by McGehee, less $5,000; Campbell voluntarily left the home in August 2001; Campbell was excluded from the home from October 2003 through trial (54 months), and was entitled to one-half the amount of reasonable monthly rent ($3,000) for that period, or $81,000; McGehee was entitled to credit for taxes, insurance and mortgage paid by her after August 2001; McGehee was not entitled to recover late fees; McGehee was entitled to credit for one half of the improvements made by her after August 2001, or $29,391.62; and that McGehee was entitled to credit for one half of the repairs, maintenance and upkeep made by her after August 2001, or $55,450.19. The trial court also ruled that Campbell was entitled to either $62,096.49 (based upon $188,000 in equity) or 33% of the proceeds from a sale of the home. Attached to the rulings was a spreadsheet that the court indicated were its supporting calculations.
On June 13, 2008, Campbell filed a motion to clarify the ruling, arguing that the court’s ruling was inconsistent because it conflicted with points in the spreadsheet. Campbell argued that, because the court ruled that he was entitled to half of the rents received by McGehee ($36,000), less $5,000, he should have been awarded $13,000 rather than the $6,500 in the ruling. Further, Campbell argued that the trial court ruled that he was entitled to receive half of the reasonable rent of the home for the period during which he was excluded from the home and that this amount was $81,000, not the $40,500 the trial court actually awarded him. Accordingly, Campbell asked that the trial court adjust the total amount of damages he was awarded and the corresponding percentage of equity stated in the judgment.
The trial court later entered its judgment, which included its earlier rulings as well as a finding that McGehee and Campbell were each 50% owners of the property and that the real property was not subject to partition. In addition, the judgment included the following table awarding Campbell more than it had previously indicated:
|
Stipulated Appraised Value: Outstanding Mortgage: Equity to be Divided: |
225,000.00 -37,000.00 188,000.00 |
|
|
|
Campbell |
McGehee |
|
50% of Equity |
94,000.00 |
94,000.00 |
|
Downpayment credit |
23,026.23 |
-23,026.23 |
|
Credit for rents received, less 5,000 |
13,000.00 |
-13,000.00 |
|
Credit for loss of use for 54 months |
81,000.00 |
-81,000.00 |
|
Tax credit after 2001 |
-9,030.40 |
9,030.40 |
|
Insurance credit post 2001 |
-6,790.42 |
6,790.42 |
|
Mortgage post 2001 |
-31,817.46 |
31,817.46 |
|
Imp./Repairs/Maint. Post 2001 |
-79,719.96 |
79,719.96 |
|
|
|
|
|
Totals: |
83,668.05 |
104,331.95 |
The judgment awarded Campbell $83,668.05, or approximately 44.5% of the equity in the home, and ordered McGehee to refinance the property in her own name. Both parties appealed from the trial court’s judgment.
ANALYSIS
A. Suits for Partition
A joint owner or claimant of real property or an interest in real property “may compel a partition of the interest or the property among the joint owners or claimants.” Tex. Prop. Code. Ann. § 23.001 (Vernon 2000). When a party seeks partition, the trial court “shall determine the share or interest of each of the joint owners or claimants in the real estate sought to be divided, and all questions of law or equity affecting the title to such land which may arise.” Tex. R. Civ. P. 760. The trial court shall order partition if it “determines that the whole, or any part of such property is susceptible of partition.” Tex. R. Civ. P. 761. “Should the court be of the opinion that a fair and equitable division of the real estate, or any part thereof, cannot be made, it shall order a sale of so much as is incapable of partition.” Tex. R. Civ. P. 770. Neither McGehee nor Campbell complains of the trial court’s finding that the real property was not subject to partition. Instead, they complain of the trial court’s determination of their respective shares of ownership of the property.
The trial court applies the rules of equity in determining the broad question of how property is to be partitioned. See Thomas v. Sw. Settlement & Dev. Co., 123 S.W.2d 290, 296 (Tex. 1939) (“In this state partition by suit, whether brought under the statute or without the aid of the statute, does not proceed independently of the rules of equity.”); Yturria v. Kimbro, 921 S.W.2d 338, 342 (Tex. App.—Corpus Christi 1996, no writ). On partition, a cotenant who expends funds necessary to protect or preserve the common property is entitled to have those expenditures charged to the tenants in common according to their pro rata ownership. Gonzalez v. Gonzalez, 552 S.W.2d 175, 181 (Tex. Civ. App.—Corpus Christi 1977, writ ref’d n.r.e.); Wooley v. West, 391 S.W.2d 157, 160 (Tex. Civ. App.—Tyler 1965, writ ref’d n.r.e.). Expenditures necessary to preserve the common property include those for taxes, insurance, and repairs. See Duke v. Squibb, 392 S.W.2d 885, 888 (Tex. Civ. App.—Texarkana 1965, no writ). Based on these principles, the trial court debited or credited Campbell and McGehee and determined their respective shares of ownership of the home.
B. Did the trial court err by crediting Campbell with $81,000 for his loss of use of the property?
On appeal, McGehee contends that the trial court’s judgment improperly includes a credit of $ 81,000 to Campbell for the 54-month period in which he lost use of the home. According to McGehee, Campbell’s discovery responses neither identified this loss as an element of his damages, nor provided a calculation for any damages for loss of use. McGehee contends that she properly objected to evidence regarding these damages at trial, Campbell did not show a lack of unfair surprise or prejudice justifying the admission of such evidence, and that the trial court should have excluded any evidence regarding Campbell’s claimed damages for loss of use of the home. The trial court credited Campbell for lost use based upon its findings that $3,000 was a reasonable monthly rent for the home and that Campbell was excluded from using the home for 54 months. McGehee does not challenge the sufficiency of the evidence supporting these findings, contending instead that Campbell is not entitled to recover for loss of use because he did not include loss of use as a category of damages sought in his discovery responses, nor did he indicate that he believed he was entitled to $81,000 for that loss of use, and the trial court should therefore have excluded his testimony supporting those claims.
We review a trial court’s evidentiary rulings for an abuse of discretion. Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 906 (Tex. 2000). To determine whether a trial court abused its discretion, we must decide whether the trial court acted without reference to any guiding rules or principles; in other words, we must decide whether the act was arbitrary or unreasonable. Cire v. Cummings, 134 S.W.3d 835, 838–39 (Tex. 2004). We must uphold the trial court’s evidentiary ruling if there is any legitimate basis in the record for the ruling. Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998).
Campbell’s petition alleged a cause of action for conversion based upon McGehee’s refusal to allow him access to the home beginning in August 2001, and sought damages for the loss of the use of the home. His First Amended Responses to Requests for Disclosure, dated approximately six weeks before trial, also reflect his intention to seek damages as a result of his exclusion from the home. Specifically, his response stated, “Defendant has unlawfully and without authority assumed dominion and control over Plaintiff’s property, i.e. Campbell’s ownership rights and interest in the Property. Campbell is entitled to an award of damages reflecting this conversion.” The response also informed McGehee of Campbell’s intention to seek “damages associated with Defendant’s use and occupation of the Property” and alleged that the rental value of the property was $3,000 per month. Similarly, the pretrial briefing Campbell filed shortly before trial referred to his right, as a co-tenant, to receive damages in the form of one half of reasonable rent for wrongful exclusion from the property.
A cotenant in possession who excludes another cotenant is liable to the excluded cotenant for the rental value of his or her possession. Burns v. Wood, 427 S.W.2d 353 (Tex. Civ. App.—Tyler 1968, writ ref’d n.r.e.). McGehee does not take issue with this general proposition, but instead complains that Campbell’s discovery responses were not sufficient to give notice of his claimed damages for exclusion from the property and that the trial court erred by awarding Campbell one half of the reasonable monthly rental value of the home for each of the months he was excluded by McGehee. McGehee relies on Texas Rule of Civil Procedure 193.6(a), which excludes evidence that the offering party has failed to provide in response to requested discovery, “unless the court finds that: (1) there was good cause for the failure . . . ; or (2) the failure . . . will not unfairly surprise or unfairly prejudice the other parties.” Tex. R. Civ. P. 193.6(a). The purpose behind this rule is to prevent trial by ambush. Harris County v. Inter Nos, Ltd., 199 S.W.3d 363, 367 (Tex. App.—Houston [1st Dist.] 2006, no pet.) (citing Aetna Cas. & Sur. Co. v. Specia, 849 S.W.2d 805, 807 (Tex. 1993)).
The record on appeal reveals that McGehee sent Campbell a request for disclosures, including a calculation of damages. Campbell appropriately responded to McGehee’s discovery requests regarding his damages, providing notice in his response six weeks before trial that he specifically sought damages for his wrongful exclusion from the property, beginning in August 2001, and that he alleged the reasonable rental value of the property was $3,000.00 per moth. These statements were sufficient to provide notice to McGehee that Campbell would seek $1,500 per month for the period of time during which he alleged that he was wrongfully excluded from the home, beginning in August 2001, and to support the trial court’s admission of the evidence upon which it based its award to Campbell. We overrule McGehee’s sole issue on appeal.
C. Did the trial court err in awarding $83,668.05 to Campbell?
On appeal, Campbell argues the evidence is insufficient to support the trial court’s judgment because the trial court improperly credited McGehee for improvements she made without Campbell’s consent, and because it did not properly credit him with half of the payments he made for the taxes, mortgage and insurance on the property from August 2001 through October 2003.
The test for legal sufficiency is “whether the evidence at trial would enable reasonable and fair-minded people to reach the verdict under review.” City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). In making this determination, we credit favorable evidence if a reasonable fact-finder could, and disregard contrary evidence unless a reasonable fact-finder could not. Id. If the evidence falls within the zone of reasonable disagreement, then we may not substitute our judgment for that of the fact-finder. Id. at 822. The fact-finder is the sole judge of the credibility of the witnesses and the weight to give their testimony. Id. at 819. In reviewing a factual sufficiency challenge, we consider and weigh all of the evidence supporting and contradicting the challenged finding and set aside the finding only if the evidence is so weak as to make the finding clearly wrong and manifestly unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); see Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989).
1. Did the evidence support the trial court’s credit to McGehee for improvements she made without Campbell’s consent?
The trial court’s judgment credited McGehee $79,719.96 for improvements, repairs and maintenance she made to the home after 2001, and this amount included credit for $29,391.62 for her share of the improvements she made to the home after August 2001. On appeal, Campbell contends the trial court improperly credited that $29,391.62 for “improvements” because he argues these “improvements” were not shown to increase the home’s value.
In a tenancy in common, the co-owners are required to share the income generated from the property and must share the reasonable and necessary expenditures for preservation of the property. Williams v. Shamburger, 638 S.W.2d 639, 640 (Tex. App.—Waco 1982, writ ref’d n.r.e.). However, “a cotenant who improves property without the consent of his cotenant cannot recover the actual amounts expended.” Id. at 640–41. Instead, “[i]t is well settled that the amount of the recovery for such improvements is limited to the value of the enhancement of the property at the time of the partition.” Id. (citing Burton v. Williams, 195 S.W.2d 245, 247 (Tex. Civ. App.—Waco 1946, writ ref’d n.r.e.)).
There was ample evidence to support the trial court’s credit of $29,391.62 for McGehee’s share of “improvements” after Campbell left the home in August 2001. The parties stipulated that the value of the home was $225,000, based upon an April 2007 appraisal—an increase of $95,000 over the home’s 2003 purchase price of $130,000. At trial, McGehee testified regarding the various improvements she made after Campbell left the home in August 2001, and she admitted numerous exhibits substantiating her testimony. Among the items she described as improvements for which she paid were lighting fixtures installed in the home, upgraded landscaping, remodeling, painting the garage apartment, installing a tile floor in several areas, upgrading the home’s HVAC system, upgrading doors, renovating the kitchen, improvements to the pool, painting the exterior of the house in 2005, upgrading a hot water heater, and resolving drainage problems in the yard. McGehee testified that she believed these items were improvements, rather than maintenance or repairs to the home, because they enhanced or upgraded the home and increased its value. In addition, she testified that Campbell agreed to some of these improvements even though he was not living in the home at the time, and Campbell admitted that he consented to some of the improvements.
Campbell did not object to McGehee’s opinion that these improvements increased the value of the home, nor did he provide rebuttal testimony to refute that these items increased the home’s value. Further, some of these items were listed as “improvements” on the April 2007 appraisal providing the home’s stipulated value of $225,000, and corresponding estimates of their approximate impact upon the value of the home in comparison to others were listed. This appraisal was a document introduced into evidence by Campbell himself. Based upon this evidence, crediting favorable evidence if a reasonable fact-finder could and disregarding contrary evidence unless a reasonable fact-finder could not, we hold a reasonable and fair-minded fact-finder could have found that the improvements McGehee made to the home after August increased the value of the home; thus, the trial court properly credited McGehee $29,391.62 as her equitable share of those improvements. Similarly, considering and weighing all of the evidence supporting and contradicting the challenged finding, we do not find the evidence supporting the trial court’s credit of $29,391.62 to McGehee to be so weak as to make the finding clearly wrong and manifestly unjust. We overrule Campbell’s challenge to the sufficiency of the evidence supporting the trial court’s credit.
2. Did the evidence support the trial court’s failure to credit Campbell with half of the payments made for the taxes, mortgage and insurance on the property from August 2001 through October 2003?
Campbell also contends the trial court improperly failed to credit him for $9,899 in mortgage, tax and insurance payments he made during the period of August 2001 through October 2003—the period in which he was excluded from the home. At trial, Campbell admitted exhibits showing that he had written checks for mortgage payments, insurance and taxes on the home after he left the home in August 2001, totaling $19,801.93. He argues that the trial court’s failure to credit him with his equitable half of these payments was in error. We agree.
At trial, Campbell’s counsel stipulated that McGehee was entitled to “some credit” for the mortgage, taxes and insurance she had paid after August 2001, on the condition that Campbell was similarly credited for amounts he had paid. McGehee did not contest that Campbell had made the payments he claimed after August 2001, nor did she offer any evidence to rebut his claim. Based upon this evidence, crediting favorable evidence if a reasonable fact-finder could and disregarding contrary evidence unless a reasonable fact-finder could not, we hold a reasonable and fair-minded fact-finder could not have found that Campbell was not entitled to a credit for one half of the taxes, mortgage and insurance payments he made on the home after August 2001. We sustain Campbell’s challenge to the sufficiency of the evidence supporting the trial court’s failure to credit him $9,899 for one half of the payments he made for the mortgage, tax and insurance payments on the home after August 2001.
CONCLUSION
We reform the trial court’s judgment to award Campbell $93,567.05, or 49.76% of the equity in the home, and affirm the trial court’s judgment as reformed.
George C. Hanks, Jr.
Justice
Panel consists of Justices Jennings, Hanks, and Bland.