## Facts

- Before marriage, Robert Lee Jensen formed RLJ Printing Company, Inc. and bought 48,455 shares at $1.56 per share.
- RLJ acquired all stock of Newspaper Enterprises, Inc. shortly before the marriage as a “unique business opportunity,” and RLJ thereafter functioned as a holding company.
- The parties married in 1975, separated in 1979, and divorced in 1980.
- During marriage, Jensen was found to be the “key man” in RLJ’s operations and received compensation from RLJ in salary, bonuses, and dividends, increasing annually from 1976 through 1979.
- No valuation of the RLJ stock was made as of the marriage date; trial experts gave materially different per-share values at trial.
- The trial court found RLJ was created before marriage, was not Jensen’s alter ego, was not created in fraud of the community, and that salary, dividends, and bonuses paid to Jensen were “adequate and reasonable.”
- The divorce decree treated the stock and all increase in its value during marriage as Jensen’s separate property and awarded the wife no interest in the stock or its appreciation.

## Issues

1. Whether appreciation during marriage in a spouse’s separate-property corporate stock, largely attributable to the spouse’s marital “time, toil and effort,” becomes community property or remains separate property subject only to an equitable reimbursement claim.
2. Whether a court may consider and award a community reimbursement claim for undercompensated marital labor even if the pleadings did not expressly label the claim as “reimbursement.”

## Decision

- The Texas Supreme Court held the RLJ shares were Jensen’s separate property and that appreciation in the shares during marriage did not change their separate character.
- The Court rejected treating the appreciation itself as community property, but recognized a potential equitable reimbursement claim by the community estate for the value of undercompensated marital labor that benefited the separate estate.
- The Court remanded to the trial court to determine the amount, if any, of reimbursement owed to the community.
- The Court allowed reimbursement to be considered despite the absence of an expressly labeled reimbursement pleading, given the developed record and equitable considerations.

## Legal Principles

- Separate property owned before marriage, and its increase in value during marriage, generally remains separate property.
- When community “time, toil and talent” are expended to benefit a spouse’s separate estate, the community may have an equitable claim for reimbursement to the extent the community was not adequately compensated.
- Reimbursement is an equitable monetary adjustment between marital estates, not a recharacterization of title to the underlying separate property or its appreciation.
- In assessing reimbursement, courts focus on whether salary, bonuses, dividends, or other payments adequately compensated the community for the spouse’s labor, and may remand for that determination where the trial court applied an incorrect focus.
- A reimbursement award may be considered in the interest of justice even without perfectly framed pleadings when the relevant factual issues were tried and developed.

## Conclusion

The court maintained the separate-property character of premarital corporate stock and its appreciation, but required a remand to determine whether the community estate was equitably entitled to reimbursement for any marital labor that enhanced the separate estate beyond the compensation paid during marriage.


Jensen v. Jensen, 665 S.W.2d 107 (Tex. 1984)