Inventory and Appraisement
While a suit for dissolution of a marriage is pending and on the motion of a party or on the court’s own motion after notice and hearing, the court may grant temporary orders requiring one or both parties to prepare a sworn inventory and appraisement of the real and personal property owned or claimed by the parties and specifying the form, manner, and substance of the inventory and appraisal and list of debts and liabilities. Tex. Fam. Code § 6.502(a)(1). Failure to comply with temporary orders ordering the preparation and filing of the sworn inventory and appraisement by a certain date is punishable by contempt. See Tex. Fam. Code § 6.506; see also Ismail v. Ismail, 702 S.W.2d 216, 224 (Tex. App.—Houston [1st Dist.] 1985, writ ref’d n.r.e.).
In order for the court to determine, with some degree of accuracy, the true nature and extent of the estates of the parties (whether community or separate), an accurate inventory of all the assets and liabilities of the parties should be required by the court. Requiring an accurate inventory and appraisement will increase the probability of the court’s dividing the property of the parties in a manner the court deems just and right, having due regard for the rights of each party and any children of the marriage, in accordance with section 7.001. See Tex. Fam. Code § 7.001. It is also helpful for each party to attach supporting documents to the party’s inventory and appraisement, including financial account statements and other documents evidencing the character and value of assets and liabilities. See MacLellan v. MacLellan, No. 02-21-00304-CV, 2022 WL 17841862, at *3 (Tex. App.—Fort Worth Dec. 22, 2022, no pet.) (mem. op.) (reversing division of property because wife’s “prove-up” affidavit in support of default judgment contained no evidence identifying or valuing the estates assets and liabilities, making it impossible for trial court to make a just and right division).
Additionally, an inventory and appraisement should be the starting point for the preparation of any requested findings of fact and conclusions of law concerning the characterization and value of all assets, liabilities, claims, and offsets on which disputed evidence has been presented. See Tex. Fam. Code § 6.711.
Local rules of the county in which the case is filed govern the form of the inventory, the degree of particularity required in its preparation, the time within which it must be filed, and the sanctions a court may impose for a party’s failure to comply with those local rules.
Notwithstanding the court’s requirement of the preparation of inventories, counsel must ensure that all property is accounted for and listed in the inventory. If a party asserts the existence of property not listed in an inventory, the burden of proof lies with that party. See Deane v. Deane, 298 S.W.2d 282, 284 (Tex. App.—Eastland l957, no writ). Community property not divided by the decree of divorce, whether listed on an inventory or not, is subject to postdecree division. See Tex. Fam. Code § 9.201 et seq.
Counsel should exercise caution to identify accurately the character and value of property listed in the inventory, including whether any property is of mixed character and the basis for any claim of separate property. A party’s uncontroverted testimony regarding the value of her own property is sufficient to sustain a finding as to value. See Espronceda v. Espronceda, No. 13-15-00081-CV, 2016 WL 3225860 (Tex. App.—Corpus Christi–Edinburg June 9, 2016, no pet.) (mem. op.).
See the practice notes in chapter 3 of this manual for a discussion of the characterization and division of property.
Counsel should use all appropriate and necessary discovery procedures available for preparation of an accurate inventory. The court may require the production of books, papers, documents, and tangible things by a party. Tex. Fam. Code § 6.502(a)(3). Discovery procedures aid counsel in preparing an accurate inventory and ensure that the opposing party has been candid in disclosing all assets and liabilities of the parties. See the practice notes in chapter 5 of this manual and the rules of civil procedure discussed there.
A sworn inventory and appraisement that is filed with the court constitutes a judicial admission about the characterization of the items listed and will be accepted as true and binding on the party. Roosevelt v. Roosevelt, 699 S.W.2d 372, 374 (Tex. App.—El Paso 1985, writ dism’d); see also Dutton v. Dutton, 18 S.W.3d 849, 852–53 (Tex. App.—Eastland 2000, pet. denied). If a party attempts to offer evidence about characterization of an asset contrary to a sworn inventory and appraisement filed with the court by that party, the evidence would not be admissible on proper objection, because the inventory is a judicial admission. Roosevelt, 699 S.W.2d at 374. In Dutton, the husband filed a sworn inventory and appraisement with the trial court and listed certain real estate as community property. The husband did not introduce his inventory and appraisement into evidence. The wife filed a sworn inventory and appraisement with the trial court, listing the same real estate as her separate property. The wife’s inventory and appraisement was introduced into evidence. The trial court found the real estate to be community property and awarded it all to the wife. On appeal, the husband contended that the real estate was one-half his separate property and one-half the wife’s separate property. The appellate court held that the husband’s inventory and appraisement, characterizing the real estate as community property, constitutes a judicial admission that bars him from asserting on appeal that the real estate is other than community property. The appellate court in Dutton further stated:
Judicial admissions estop the party who made them from challenging their truth. Five conditions must occur before a party’s admission is conclusive against him: (1) the declaration relied upon must have been made in the course of a judicial proceeding; (2) the declaration was contrary to an essential fact embraced in the theory of recovery or defense asserted by the party; (3) the statement was deliberate, clear, and unequivocal; (4) giving conclusive effect to the declaration would not run contrary to public policy; and (5) the declaration related to a fact upon which a judgment for the opposing party was based.
Dutton, 18 S.W.3d at 853. But see Battle v. Battle, 642 S.W.3d 140 (Tex. App.—El Paso 2021, no pet.), in which the husband’s inventory and appraisement, which was admitted into evidence, stated in the separate property section that there were “no separate assets or liabilities,” but also stated in the community property section that certain separate property items were in the wife’s possession. On appeal, the court held that husband’s inventory was only a quasi admission, if anything, and not a judicial admission; therefore, it was proper for the trial court to permit the husband to testify as to his separate property claims and for the court to consider both the husband’s inventory and his testimony. In explaining the distinction, the court stated, “A judicial admission is a formal waiver of proof when assertions of fact are made in live pleadings or when clear, deliberate, and unequivocal formal declarations are made in open court by a party’s attorney.” Battle, 642 S.W.3d at 148 (citing Texas Tax Solutions, LLC v. City of El Paso, 593 S.W.3d 903, 910 (Tex. App.—El Paso 2019, no pet.)). Quasi admissions, on the other hand, “occur when a party’s testimonial declarations are contrary to the party’s stated position.” Battle, 642 S.W.3d at 148 (citing Mendoza v. Fidelity & Guaranty Insurance Underwriters, Inc., 606 S.W.2d 692, 694 (Tex. 1980)). Quasi admissions “will be taken as some evidence, will not be conclusive upon the admitter, and the weight to be given to such admissions is decided by the trier of fact.” Battle, 642 S.W.3d at 148.
The effect of a judicial admission in an inventory and appraisement can be muted when (1) a litigant pleads separate property, (2) a litigant tenders requests for admission related to a claim for separate property, (3) a litigant discloses during discovery the documentary evidence to support the claim of separate property, (4) the party opposite files responsive pleadings concerning equitable reimbursement demonstrating a recognition of a separate-property claim, (5) the litigant seeks leave of court to amend an inventory to correct an error, (6) the trial court grants leave to amend an inventory, and (7) there is no objection to the admission of contradictory evidence. Rivera v. Hernandez, 441 S.W.3d 413, 424 (Tex. App.—El Paso 2014, pet. denied). However, when a party admits that an asset is community property and requests the court to award it to them as part of the property division, the issue is conclusively proven and the party will be estopped from denying its characterization as community property. Sakyi v. Sakyi, No. 05-21-00960-CV, 2022 WL 154861, at *4 (Tex. App.—Dallas Jan. 11, 2023, pet. denied) (mem. op.).
On the other hand, merely asserting in a sworn inventory and appraisement that certain property is the separate property of a party is not sufficient to establish that fact. A sworn inventory is simply another form of testimony. Additional evidence is required to rebut the presumption that all property possessed by either party is community property. Warriner v. Warriner, 394 S.W.3d 240, 248–49 (Tex. App.—El Paso 2012, no pet.). See Roberson v. Roberson, No. 14-22-00171-CV, 2023 WL 5286968, at *4 (Tex. App.—Houston [14th Dist.] Aug. 17, 2023, pet. denied) (mem. op.) (husband introduced inventory but provided no evidence as to what portion of his personal injury settlement was separate property as distinguished from loss of earning capacity and medical expenses, and therefore failed to overcome the community property presumption).
COMMENT: Because a sworn inventory and appraisement constitute a form of testimony, and a judicial admission if filed with the court, one should exercise caution in preparing such an inventory and appraisement. Unless otherwise required by court order or the local rules of the court, it may be prudent to submit to opposing counsel a preliminary, unsworn inventory and appraisement in the early stages of a divorce case, so that the party’s inventory and appraisement may be amended, if necessary, after further information is obtained but before the party has sworn to the contents of the inventory and appraisement.
It is very helpful for settlement preparation and trial presentation to convert the inventory and appraisement of both parties into either separate spreadsheets or a combined spreadsheet, showing husband’s values, wife’s values, and a blank column for the court to insert its values. The value assigned by the court for a particular asset or liability, to which husband and wife have assigned different values, can aid in the preparation of findings of fact and conclusions of law under Texas Family Code section 6.711.
An appellate court may not consider an inventory and appraisement on appeal if it is not formally admitted into evidence at trial. Tschirhart v. Tschirhart, 876 S.W.2d 507, 508–09 (Tex. App.—Austin 1994, no writ).
In Gonzalez v. Gonzalez, ___ S.W.3d ___, No. 01-22-00550-CV, 2023 WL 5535669 (Tex. App.—Houston [1st Dist.] Aug. 29, 2023, no pet.), the wife filed her inventory with the court but never admitted it into evidence. Even so, the trial court took judicial notice of the inventory and divided the property in a default proceeding. Deciding the case en banc, the appellate court overruled its 1993 opinion in Vannerson v. Vannerson, 857 S.W.2d 658 (Tex. App.—Houston [1st Dist.] 1993, writ denied), which held that a court can divide property based on facts in an inventory filed with the court but never admitted into evidence. Gonzalez finds that a court can only take judicial notice “of the existence of certain documents in its records” but it “may not take judicial notice of the truth of factual statements and allegations contained in that document.” Gonzalez, 2023 WL 5535669, at *7. The trial court abused its discretion because it had insufficient evidence to support its property division. Gonzalez, 2023 WL 5535669, at *7.
However, even if an inventory and appraisement is admitted into evidence at trial, the appellant should request findings of fact and conclusions of law from the trial court. Without findings of fact and conclusions of law, the appellate court cannot assess whether the property division ordered by the trial court was equal or disproportionate and, if disproportionate, which factors the trial court found to warrant such a division. Moore v. Jordan, No. 01-18-00547-CV, 2019 WL 5381997, at *6 (Tex. App.—Houston [1st Dist.] Oct. 22, 2019, no pet.) (mem. op.).