“Mom, I want to live with Dad”- A Mother’s Problem

Originally posted on Family Law and Divorce in Texas:

“Does my child get to pick who she wants to live with when she is 12?” I get that a lot. The answer is “yes and no.” I know, I’m a big help.

The Texas Family Code allows a child to be interviewed by the judge in chambers so that he or she can express her wishes, but that does not mean he or she is the decider.

This is a mother’s problem. Fathers don’t worry about this near as much as mothers do. Mothers feel that when their children “live” with dad, that the world must think they are a terrible mother. Think about it. People wonder, “How did she lose her children?” or “what did she do?” If a mother “loses custody,” then she must have been arrested or getting treatment. When a child decides that they would prefer to live primarily with dad, mom does not lose…

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Personal Guaranty or Lawsuit Guaranteed?

By Kyle B. Fonville & Stephen L. Polozola

This Article was originally published by Building Savvy Magazine (2014)

Most builders are all-too-familiar with the phrase, “Of course we will need a personal guarantor on this note.” Builders in Texas are often expected to ensure the debts of their companies, making them “personal guarantors” for those debts. This practice is not only common in the construction industry, it is expected. But, a bank would never pass up the deep pockets of a business to pursue the personal assets of the individual guarantor, right? Wrong. In Texas, when a personal guarantor waives certain rights under a note, without the same being waived by the guarantor’s company, the bank is left with only one option: sue the individual, not the company!

Texas is generous in protecting borrowers from the sometimes-shady acts of creditors. One of these generosities is Texas’s enactment of anti-deficiency laws. These laws, for example, prevent a bank from foreclosing on a $1-million note secured by property with a fair market value of $1 million, purchasing the property at its own foreclosure sale for $400,000, and then suing the borrower for the $600,000 “deficiency.” The rationale is that, through foreclosure, the bank has recaptured the full amount of the debt—$1 million worth of assets—regardless of the amount it received at foreclosure. A bank is therefore prevented from collecting the same debt twice (i.e., obtaining property at a discounted rate plus a deficiency judgment). Unfortunately however, Texas’s strong preference for “freedom of contract” has allowed banks to utilize language to waive this anti-deficiency protection.

This type of waiver is particularly dangerous for personal guarantors. For instance, imagine that in the situation above, the bank had allowed the original borrower to retain its anti-deficiency protection but had required the personal guarantor to waive the same protection. After foreclosure, the borrower would owe nothing due to the anti-deficiency laws because the bank has received $1 million worth of assets. Technically, however, a “deficiency” still exists on the note because the bank received only $400,000 at foreclosure, which is $600,000 less than the original debt. It is important to understand that nothing prevents the bank from collecting the $600,000 deficiency from the personal guarantor if the guarantor has waived his or her anti-deficiency protection.

So although a guarantor is usually liable only for the amount owed by the original borrower, which in this case is $0, without anti-deficiency protection, the guarantor remains on the hook for the full $600,000 deficiency. It is still unclear whether a court would allow the borrower—the guarantor’s company—to intervene in a suit against the guarantor and assert these anti-deficiency laws on the guarantor’s behalf. It is clear, though, that personal guarantors should seek to avoid this situation altogether. If the bank allows a company to retain its anti-deficiency protection, the personal guarantor should insist that he or she be allowed to do so as well.

Kyle B. Fonville is an associate with Decker, Jones, McMackin, McClane, Hall & Bates, P.C. in Fort Worth. His practice focuses primarily on civil and commercial litigation, including construction matters, and appellate law. He can be reached by phone at 817.336.2400 or by email at kfonville@deckerjones.com.

Stephen L. Polozola is a partner with Decker, Jones, McMackin, McClane, Hall & Bates, P.C. in Fort Worth. His practice focuses primarily on construction law matters. He can be reached by phone at 817.336.2400 or by email atspolozola@deckerjones.com.

Anonymous Client Post About Divorce, Attorney’s Fees and Preparedness


Sometimes our clients are the smartest people we know!

Originally posted on Family Law and Divorce in Texas:

Note from Kelly:
A client wrote this blog after her divorce was final, with the benefit of hindsight and (probably) the anxiety of my final bill. This client was one of the most organized clients I have had. She also listened well, especially when I told her things that were difficult to hear. This client is NOT an attorney and the below information is not legal advice.

“Choosing to end a 19 year marriage, or any marriage, is not an easy decision. As Dr. Phil says “you have to earn your way out of the relationship.” Once you have decided that it is the right decision for your life, there are steps you can take to make this excruciating experience a little less painful. First and foremost, make sure you have a good therapist to walk you through the emotional process of divorce. The attorney you decide upon is NOT…

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Two Regrets of a Divorced Woman

Originally posted on Family Law and Divorce in Texas:

This article was originally published by Plaid for Women https://www.plaidforwomen.com/read-post/two-regrets-of-a-divorced-woman/

The Family Courthouse is paved with women who claim the system is against them. Many feel that they waited too long and some wish they had tried harder to reconcile. Beyond the emotional wasteland left by a divorce, a divorced woman has many economical regrets. Here are two I have heard over and over again:

1. That they didn’t stay employed.

Some women report being frustrated that they were not entitled to spousal maintenance or did not get as much as they would have liked. This is especially true for the homemaker, but in our changing society where women are increasingly doing the “bread winning,” it can be true for husbands as well. Texas law allows for monthly spousal maintenance (a/k/a support) up to $5,000 or 20% of an ex-spouse’s gross income, whichever is lower, if a spouse can prove…

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Reasons to Get Along With Ex-Spouse


What a wonderful explanation of some important common sense!

Originally posted on Family Law and Divorce in Texas:

1. MONEY! If you have become intimately familiar with the billable hour and retainers then you know what I am talking about. Reading billing statements showing entries for lawyer time for discussing who gets “this” or “that” is painful. Clients find themselves asking “I have to pay a thousand dollar bill from my attorney because my ex-spouse’s attorney called her five times to negotiate the china cabinet?” How does that make sense? If spouses are able discuss what assets and debts go with whom, then they will save money. It goes without saying that the attorney’s fees factor can grow exponentially when there are parenting issues.

2. It’s better for the kids. I’m just a family law attorney, but how can children learn to resolve conflict if their parents can’t agree on a pick up time or child support? They may learn how to build walls, ahem, I mean boundaries, but they…

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On the death of the husband or wife, leaving a spouse surviving, the homestead shall descend and vest in like manner as other real property of the deceased.” TX PROB CODE § 283. Also, the surviving spouse is entitled to retain a constitutional survivor’s homestead right for life or for so long as the survivor elects to use the homestead. This right is not affected by the deceased spouse conveying the property to a third party through their will.

Here are a few questions which are regularly asked with regards to surviving spouse’s homestead rights:

1. Can the deceased spouse’s administrator force the sale of the house?
This constitutional right protects the homestead against forced sale and partition so long as the surviving spouse chooses to use and occupy the homestead. TX PROB. CODE § 284. The homestead right protects the survivors homestead from forced sale by creditors and from partition among the heirs and beneficiaries of the homestead claimant.

2. Does the surviving spouses rights end when move out of the property? Have they abandoned their homestead rights?

The surviving spouse’s right to occupy or use the homestead for life or for so long as the surviving spouse chooses to do so, but it only lasts as long as the spouse occupies or uses the homestead property. If you can prove the surviving spouse abandoned the house, then the beneficiaries could take possession. It is not required that the surviving spouse continuously reside in the property to be considered as using it. For example, the survivor could rent the land out to satisfy the use requirement.

3. Who is responsible for maintenance on the property?
The surviving spouse will be responsible for making repairs and generally maintaining the property, but the duty to repair does not go so far as to require that the property be maintained in the same condition that existed when the homestead right was originally established.

4. Who is responsible for the mortgage on the property?
A purchase money lien is not subject to the homestead exemption, thus the property could be foreclosed upon default. TX PROP CODE § 41.001(b)(1). If the heirs wish to retain the property, they are responsible for the mortgage.

5. Who is responsible for the insurance premiums on the property?
The surviving spouse is not responsible to insure the property against loss. Even if the surviving spouse did insure the property, the insurance proceeds upon fire or damage would be made to the surviving spouse and not to the heirs/beneficiaries. The heirs/beneficiaries (children) would be responsible to carry insurance on the property to preserve their asset.

6. Who is responsible for paying the taxes on the property? The heirs/beneficiaries are responsible for all tax payments, even if the surviving spouse resides in the house. The homestead is not exempt from forced sale to pay delinquent taxes. TX PROP CODE § 41.001(b)(2).

Disclaimer: The content of this article is provided for informational purposes only and does not constitute legal advice.

Legislature to consider Uniform Trade Secrets Act

Fort Worth Business Press
by David L. Pratt

Texas is one of only four states that have not adopted the Uniform Trade Secrets Act. Indeed, the state of Texas actually has no body of law specifically focused on trade secrets; that leaves considerations and evaluations of proprietary information and its use or misuse to an amalgamation of common law and other related but decentralized statutes, most of which are, according to some commentators, outdated and incapable of adequately addressing the rapid emergence of technology. But that reality could soon change as the Legislature considers a modified version of the Uniform Trade Secrets Act proposed both in the House (HB 1894) and the Senate (SB 953).

The current state of trade secret law in Texas brings to mind a recent article I read regarding the “choice of law” provision in a franchise agreement and its ultimate effect on the franchisor’s ability to obtain remedy for a post-term non-compete agreement. In that case, the franchise agreement was governed by Michigan law, which recognizes payment of money as an available alternative to equitable relief for violation of a non-compete. But when the franchisee subsequently filed for Chapter 13 bankruptcy, the franchisee’s obligation to pay those damages was erased, making the non-compete unenforceable and leaving the franchisor with no remedy against the competing former franchisee. I would like to believe that such an absurd result was not intended by the Michigan law at issue in that case, but it was unfortunately the conclusion that had to be drawn in light of the then-applicable state of non-compete law in Michigan.

Most people understand that different states can have different laws regarding the same subject matter. But every so often situations emerge and draw to light the need for some degree of uniformity – or at least a measure of consideration for setting forth an up-to-date system of analysis. Concepts as familiar and critically important to franchise systems as trade secret protection and non-compete agreements most certainly belong on that list.

For expanding businesses generally, and for franchise systems specifically, the proposed trade secret legislation in Texas would no doubt provide a degree of clarity and set the stage for a more adequate level of risk analysis. Given the radically diverging outcomes of similarly situated trade secret cases I have witnessed in my own practice, I am hopeful that this proposal turns into a reality.

David Pratt II is a senior associate with Decker, Jones, McMackin,
McClane, Hall & Bates PC. His experience includes franchise law, intellectual property, appellate law, and civil and commercial litigation. He writes a franchise blog at http://www.texfranchiselawyer.com and you can follow him on Twitter @dpratt817

Disclaimer: The content of this article is provided for informational purposes only and does not constitute legal advice.