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Former Spouses Are Generally Not Fiduciaries in Texas

Divorcing parties sometimes agree to hang on to property for some time following the divorce.  Sometimes, they want to allow the children to remain in the home.  Sometimes, they want to make repairs to increase the property’s value.  Texas divorce attorneys know that there can be a lot of conflict prior to the sale of the property.  In a recent case, a Texas appeals court considered whether a former husband had a fiduciary duty to protect his former wife’s interest in the property they owned together.

The divorce decree ordered the parties to list the property for sale and to split the proceeds equally.  The wife moved to enforce the decree nearly 12 years later.  She claimed the husband failed to comply with the decree and failed to cooperate with selling the property.  She asked for clarification of any part of the decree the court found was not specific enough to enforce by contempt.  She also brought a breach-of-fiduciary-duty claim against him.

The wife argued the parties had agreed not to sell the property until the children graduated from high school.  She alleged her husband had willfully withheld the proceeds of an insurance claim for damage to the house.  She also claimed he had forged her name on an insurance check that was made payable to both of them and that she had to sue him to get half of the proceeds.  She claimed she was unable to pay for repairs to the property because the husband had withheld the proceeds.  The wife was ultimately charged for demolition of the house after the city condemned the property.

She asked the court to order the husband to fully cooperate with the sale and sign any necessary documents.  She asked for all of the proceeds from the sale.

The trial court denied the wife’s request to hold the husband in contempt.  It did, however, award her a judgment for the property and attorneys’ fees.  Following the trial, the husband noted he had already signed a warranty deed transferring the property to the wife in 2014.  He gave the deed to the wife’s counsel.  In the written judgment, the court found the husband had a fiduciary duty and breached it.  It ordered that the property be sold and that the husband cooperate in the sale.  It further ordered that the wife receive all of the proceeds.  The court also ordered the husband to pay the wife’s attorneys’ fees.

The husband appealed.  The appeals court noted that spouses owe a fiduciary duty to each other, but that duty generally terminates upon divorce.  It found the husband did not owe his wife a formal fiduciary duty.

The wife argued that a moral and social relationship was created when she and the husband decided not to sell the home until the children finished high school.  She argued each of them had a fiduciary duty not to harm the other’s interest in the property.  The appeals court acknowledged an informal duty can arise from a relationship of trust and confidence, but there was no evidence the parties had the type of relationship that would give rise to a fiduciary duty following the divorce.  The appeals court therefore found the husband did not have an informal fiduciary duty to the wife.

The appeals court reversed the judgment as to the breach of fiduciary duty claim and the attorneys’ fees.

This case illustrates that there is not generally a fiduciary duty between former spouses.  This does not mean that one former spouse can defraud the other or waste community property.  It does mean that a party should not rely on a fiduciary duty of a former spouse to protect his or her interests.

If you are facing a divorce, an experienced Texas divorce attorney can help you protect your share of the assets.  Call McClure Law Group at 214.692.8200.

More Blog Posts:

Wasting of Community Assets in Texas

Duties Owed by Constructive Trustee for Property Awarded to A Spouse in Texas

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