X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision Because a spouse has an adequate remedy through disproportionate division of the community estate, fraud on the community is properly considered when dividing a community estate. The breach of fiduciary duty may be considered as a factor in the disproportionate division of the community estate, but Notash cannot pursue separate damages through an independent cause of action. FACTS:Husband and wife were married in 1987 in Iran. They lived in Texas from 1989 until January 1994. They had two children and ran a used car dealership. The wife moved back to Iran in 1994, and the couple was divorced in 1995. The Iranian divorce decree awarded the wife the equivalent of $25, and it did not award child support or divide the property the couple still held in Texas (including the two lots where the car dealership had been). The wife moved back to the United States in 1998 and filed an action to divide the community property in Texas. The wife alleged the husband had breached the fiduciary duty he owed her based on failure to give her any of the profits derived from the property from the time she moved to Iran. A jury agreed with the wife’s allegations. They found the profit from the business was $150,000 and then awarded $100,000 in exemplary damages for the breach. The jury also divided the community property 60 percent in favor of the wife and 40 percent in favor of the husband. The husband appeals these issues. (There were also rulings on child support and visitation that are not being appealed.) HOLDING:Reversed and rendered in part; affirmed in part. The court rules the jury finding on the breach of fiduciary duty was unsupported by the evidence. The court acknowledges that the husband did owe his ex-wife a fiduciary duty from 1989 until their divorce in 1995, but that, quoting Schlueter v. Schlueter, 975 S.W.2d 584 (Tex. 1998), “no independent cause of action exists in Texas to recover separate damages when the wrongful act defrauded the community estate.” Instead, a wronged spouse’s remedy lies in a disproportionate division of community property, not in an independent cause of action. Furthermore, “[t]here is no evidence that [Husband] (1) transferred property to third parties, (2) made excessive gifts to third parties, or (3) used community property to benefit his separate estate during this time period.” Because the court finds no support for the breach of fiduciary duty claim, it also overrules the award of exemplary damages. The court does, however, affirm the disproportionate division of community property. “Evidence was introduced that [Husband] sent [Wife] to Iran knowing she could not leave the country without his permission or return to the United States without a proper visa. Evidence introduced at trial indicates that the small amounts of cash sent by [Husband] represented only a fraction of the amount necessary for [Wife's] support during the time [Wife] was in Iran. Further, [Wife], who has a high school degree, has much less potential earning capacity than [Husband], who has a master’s degree in chemistry. Therefore, [Husband] has not shown the division was so disproportionate as to be unjust or unfair.” OPINION:Carter, J.; Morriss, C.J., Ross and Carter, JJ.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.