When divorcing couples disagree about income calculations and property values, seemingly straightforward issues can derail an entire case. A recent Texas appellate decision, L. v. N. (Court of Appeals of Texas, Austin, 2025), illustrates how insufficient evidence supporting child support calculations, combined with disputed property valuations and debt allocation can lead to years of additional litigation. For Dallas-area families navigating divorce, this case offers valuable insights into documentation requirements, expert testimony, and the procedural precision Texas courts demand.
Per the published opinion, the appeals court reversed the trial court’s child support award after finding insufficient evidence to support a finding that the paying spouse had the income necessary to justify maximum guideline support. Meanwhile, the court upheld the property division despite significant valuation disputes. These outcomes highlight the different standards courts apply to various divorce issues and underscore why experienced legal representation matters when financial disputes arise.
Case Background: A Divorce Complicated by Business Ownership and Property Disputes
H and W married in 2011 and had one child in 2013. The following year, they purchased a 3.6-acre property with a house for approximately $295,000. The couple fundamentally disagreed about the source of funds for this purchase. Both acknowledged loans from H’s brother ($60,000) and an LLC owned by H’s aunt ($130,000), but H claimed additional loans from friends and family totaling approximately $75,000, while W insisted they paid the balance with their own cash.
In 2016-17, H built a car-repair shop on the property, estimating it cost $200,000 to build with an additional $20,000 in improvements. Here again, the parties disputed the funding source. H testified his sister wired $215,000 in loans, while W claimed her father provided that same amount. Bank statements showed wire transfers totaling approximately $215,000 but didn’t identify the sender.
The property itself presented valuation challenges. Located partially in a 100-year floodplain, it had experienced significant flooding in 2015 that put six feet of water in the basement. The parties’ expert witnesses provided dramatically different valuations: H’s appraiser valued the property at $770,000, while W’s appraiser assessed it at $1,040,000, a difference of $270,000.
For child support purposes, H reported gross business receipts ranging from $150,000 to $241,000 annually from 2018-2021, but after expenses and depreciation, his reported profit ranged from only $13,557 to $21,872 annually. W worked at a chiropractor’s office earning $48,000.
The Trial Court’s Decree and Procedural Missteps
The trial court awarded H the property containing both the house and shop but required him to pay W $498,042.07, representing half the appraised property value minus half the mortgage. The court ordered H to pay all loans owed to family members and imposed monthly child support of $1,840.
This child support figure equals the maximum amount calculable under Texas guidelines, which apply a 20% rate (for one child) to the first $9,200 of monthly net resources. The award therefore implied a finding that H had monthly net resources of at least $9,200, or $110,400 annually, dramatically higher than his tax returns suggested.
H filed a motion for new trial and requested findings of fact and conclusions of law. However, he filed his request for findings four days late—on June 30, 2023, when the judgment was signed June 6 and the deadline was June 26. This seemingly minor procedural misstep had significant consequences for his appeal.
Legal Analysis: Three Critical Issues on Appeal
Issue 1: The Untimely Request for Findings
H argued the trial court erred by failing to issue findings of fact and conclusions of law. The appeals court quickly disposed of this argument by noting that Texas Rule of Civil Procedure 296 requires such requests within twenty days of judgment. Because H’s request came four days late, the trial court had no obligation to prepare findings.
This ruling reinforces a fundamental principle of Texas civil procedure: deadlines matter. When a party misses a procedural deadline, courts generally have no discretion to excuse the failure. For divorcing parties, this means working with a Dallas divorce attorney who maintains meticulous calendaring systems to ensure all post-judgment deadlines are met.
The court also rejected H’s argument that his motion for new trial required a written ruling, noting that Texas Rule of Civil Procedure 329b(c) provides that unruled motions are “overruled by operation of law” 75 days after judgment.
Issue 2: Property Valuation and the Floodplain Factor
H contended the trial court failed to properly consider that approximately 80% of the property sat in a 100-year floodplain, which his appraiser said reduced value by up to 25%. The court of appeals found no abuse of discretion in the property valuation.
Texas law gives trial courts discretion to set property values anywhere within the range established by the evidence. Here, H’s expert valued the property at $770,000 while W’s expert valued it at $1,040,000. The trial court’s implicit valuation of approximately $996,000 (after accounting for the mortgage) fell within this range.
The appeals court noted several factors explaining the valuation difference. H’s appraiser deducted value both for the floodplain location and the basement’s flooding history. W’s appraiser considered this “double-dipping” and argued that removing this duplication would bring H’s valuation to approximately $962,500. Additionally, W’s appraiser counted an enclosed garage as 511 square feet of additional living space worth over $120,000, while H’s appraiser valued the garage enclosure at only $5,000.
W’s appraiser also emphasized the property’s commercial development potential due to its location between an interstate and toll road, while H’s appraiser focused on residential comparables. Both appraisers acknowledged market volatility during the relevant period, with values reportedly increasing 10-25% from mid-2021 to the trial date.
The court concluded that the trial court could reasonably find that W’s appraiser’s valuation better reflected market conditions and the property’s potential uses. This outcome illustrates that when experts provide dramatically different opinions, trial courts have considerable discretion to credit one opinion over another.
For Dallas families facing property division disputes, this case emphasizes the importance of retaining qualified experts who can explain their methodology and account for all relevant factors. The best expert isn’t necessarily the one who provides the most favorable number, but rather the one whose analysis withstands cross-examination.
Issue 3: Child Support Calculation and Self-Employment Income
The appeals court reversed the child support award, finding insufficient evidence to support an implicit finding that H had monthly net resources of at least $9,200.
Texas Family Code Chapter 154 establishes guidelines for child support calculated as a percentage of the obligor’s net resources. For one child, the percentage is 20%, applied to the first $9,200 of monthly net resources. The $1,840 monthly award here equals 20% of $9,200, meaning the trial court necessarily found H had at least that much in monthly net resources.
However, H’s tax returns showed:
- 2018: $201,279 gross receipts, $21,872 profit
- 2019: $150,916 gross receipts, $13,557 profit
- 2020: $199,297 gross receipts, $17,254 profit
- 2021: $241,470 gross receipts, $19,163 profit
The average annual profit was only $17,961.50, or approximately $1,497 per month. H requested child support based on monthly net resources of $1,833, which would yield a guideline obligation of approximately $367.
W argued support should be based on H’s gross receipts of “over $200,000,” but the appeals court noted this conflated gross receipts with net income. H’s business expenses, including cost of goods sold, contract labor, depreciation, utilities, and insurance, legitimately reduced his gross receipts by over 90%.
Critically, the Family Code expressly recognizes that self-employment income calculations differ from IRS reporting. Section 154.065(b) provides: “In its discretion, the court may exclude from self-employment income amounts allowable under federal income tax law as depreciation, tax credits, or any other business expenses shown by the evidence to be inappropriate in making the determination of income available for the purpose of calculating child support.”
The appeals court held the trial court abused its discretion because finding monthly net resources of $9,200 was “so contrary to the overwhelming weight and preponderance of the evidence as to be clearly wrong and unjust.” No evidence challenged H’s claimed business expenses, and W’s testimony about his previous dealership income was speculative and didn’t account for the expenses of maintaining his current business.
However, the court couldn’t render judgment on the correct child support amount because the record didn’t establish which business expenses might be “inappropriate” under the Family Code standard. The case was remanded for a new trial on child support.
This holding has significant implications for Dallas families where one spouse owns a business. A Dallas child custody lawyer or child support attorney must understand both tax principles and Family Code standards to properly calculate support obligations. Tax returns provide a starting point but aren’t conclusive. Courts may add back certain deductions, particularly depreciation, when calculating available income.
Key Takeaways for Dallas-Area Divorcing Couples
Documentation is Critical: In cases involving self-employment or business ownership, comprehensive financial documentation is essential. Tax returns alone may not tell the complete story, but unexplained income or inadequately documented expenses can undermine your position.
Expert Selection Matters: Property valuation disputes often come down to expert credibility. Choose appraisers who can explain their methodology clearly and account for unique property features like floodplain location or commercial potential.
Procedural Deadlines Are Absolute: Missing a deadline by even a few days can waive important rights. Professional legal representation ensures compliance with all procedural requirements.
Self-Employment Income Requires Special Analysis: Business owners should expect courts to scrutinize whether reported business expenses reflect actual cash flow available for child support. Not all IRS-allowable deductions will be excluded when calculating Family Code net resources.
Strategic Insights: Alternative Approaches to Consider
Alternative strategies in this case might have included filing the request for findings of fact and conclusions of law immediately after judgment to ensure the 20-day deadline was met. Mandatory findings under Family Code Section 154.130 could have provided clearer appellate record regarding the child support calculation.
Regarding property valuation, obtaining a third appraisal or requesting the court appoint a neutral expert might have narrowed the $270,000 gap between competing valuations. When expert opinions diverge dramatically, courts may benefit from additional perspective.
For the child support issue, more detailed evidence about which business expenses represented actual cash outlays versus accounting entries could have helped establish appropriate net resources. Financial experts who can bridge tax reporting and Family Code calculations add value in self-employment cases.
What we’ve learned from this case is that comprehensive preparation, including timely procedural compliance, well-documented financial records, and credible expert testimony, provides the foundation for favorable outcomes in complex Dallas divorce litigation.
Experienced Dallas Divorce Representation Makes the Difference
If you’re facing divorce involving business valuation, self-employment income, or complex property division, the procedural and substantive issues in L. v. N. demonstrate why experienced representation matters. With over 25 years of Dallas family law experience, our firm provides honest assessments of your case strengths and challenges rather than false promises.
We serve families throughout Dallas County, including Irving, Richardson, Garland, Mesquite, DeSoto, Grand Prairie, Lakewood, Highland Park, Cockrell Hill, Lancaster, Seagoville, and Duncanville. Our strategic approach balances aggressive advocacy with compassionate guidance through what we know is one of life’s most difficult transitions.
Whether you’re concerned about property valuation disputes, child support calculations for self-employment income, or ensuring all procedural deadlines are met, we provide transparent communication about realistic outcomes while fighting to protect your interests.
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