Osuna v. Quintana

993 S.W.2d 201 (Tex. App. 1999)

 

RULE:

A third person who knowingly participates in the breach of a fiduciary duty may also be liable for that fraud.

FACTS:

Appellant mistress sought review of joint and several judgment, in appellee former wife's favor, in an action for constructive fraud on the community. Appellee sought recovery of community monies spent by her former husband during his 23 year relationship with appellant. The court first rejected the argument that there was no evidence that any money was taken from the community estate. The court explained any income earned during the marriage was presumed community property. The court found appellant failed to rebut this presumption. The court further rejected the contention that there was no evidence of her commission of fraud on the community.On appeal, the court reversed and remanded for reformation of portion of judgment based on bank account funds not shown to be attributable to appellee's former husband. The court otherwise affirmed judgment of appellant's constructive fraud on the community, in appellee's favor, because sufficient evidence of appellant's commission of the fraud by acceptance of community funds with knowledge of donor's marriage was presented.

ISSUE:

Can a third person who knowingly participates in the breach of a fiduciary duty be also liable for fraud?

ANSWER:

Yes.

CONCLUSION:

The court first rejected the argument that there was no evidence that any money was taken from the community estate. The court explained any income earned during the marriage was presumed community property. The court found appellant failed to rebut this presumption. The court further rejected the contention that there was no evidence of her commission of fraud on the community. The court explained appellee's action for fraud on the community was based on the fiduciary relationship between husband and wife. The court noted appellant's knowing participation in the breach of this duty rendered her liable for fraud. The court explained appellant continued to accept money and gifts after knowledge of the former husband's married status. The court sustained appellant's contention that no evidence was presented to show certain bank account funds came from the ex-husband and reversed for reformation to reflect that.

Click here to view the full text case and earn your Daily Research Points.