Cantu v. Cantu

556 S.W.3d 420
CourtCourt of Appeals of Texas
DecidedJuly 24, 2018
DocketNO. 14-17-00175-CV
StatusPublished
Cited by20 cases

This text of 556 S.W.3d 420 (Cantu v. Cantu) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cantu v. Cantu, 556 S.W.3d 420 (Tex. Ct. App. 2018).

Opinion

Tracy Christopher, Justice *424In this divorce case, the trial court found that the husband committed a fraud on the community, but instead of awarding the wife a money judgment in damages for the fraud, the trial court gave the wife a disproportionate share of the remaining community assets. The questions that we must consider are (1) whether the trial court abused its discretion by making the disproportionate division, (2) whether the trial court's finding of fraud was supported by reliable expert testimony, and (3) whether the trial court erred by not making additional findings of fact that more particularly described its finding of fraud. For reasons explained more fully below, we conclude that the trial court did not abuse its discretion in its division of the community estate, that the reliability complaint was not preserved for appellate review, and that the trial court was not required to make additional findings of fact. We therefore affirm the trial court's judgment.

BACKGROUND

At the beginning of their marriage in 1979, Rick and Dora were both working as pharmacists, but Rick encouraged Dora to pursue a career in medicine, so she went back to school, became a medical doctor, and eventually acquired her own ophthalmology practice. Rick also acquired his own practice. Over the course of the marriage, he opened five pharmacies and two clinics, all of which he managed himself.

Great wealth came with the couple's professional success, but the marriage still experienced some difficulties. In 1985, six months after the birth of their first child, Dora learned that Rick had been cheating on her. Dora forgave Rick, believing that the affair was an isolated indiscretion.

In 2000, Dora filed for divorce because Rick had become verbally and physically abusive. He berated her for appearing "old" and "wrinkled." He criticized her for never making enough money. He also struck her and choked her and kept her up at night with demands for sex. After a short separation, Dora reconciled with Rick and abandoned her divorce action.

In 2013, Dora suspected that Rick was being unfaithful again, so she hired a private investigator. When the private investigator confirmed her suspicions, Dora filed for divorce for the second time.

Dora soon learned that Rick's infidelity had spanned nearly the entire marriage. During his deposition, Rick confessed to having affairs for the past thirty years. He described his cheating as "normal, in the norm of marriages," and he testified that he had been with so many other women that he could not remember all of their names-not even when he was shown their pictures.

Rick met most of his paramours through dating websites, where he represented himself as a high-worth individual. He took these women on dates and shopping sprees and trips to other cities. He paid their rents and their car notes. He even employed some of them at his pharmacies and gave them seed money for their start-ups.

Rick funded these affairs with his business accounts. He testified that he used company credit cards and petty cash out of the pharmacy till.

Dora sought an accounting of Rick's businesses to understand the full scope of his affairs, so she hired Karon Murff, a *425certified public accountant who specializes in white collar crime. Murff pored through more than 30,000 pages of Rick's books, but despite that volume of data, Murff only received access to a limited portion of Rick's business records because Rick destroyed some of those records in advance of trial.

During the discovery period, a digital forensics analyst went to one of Rick's business locations for the purpose of imaging Rick's computers. The analyst arrived to find Rick running a scrubbing program, which caused the permanent deletion of certain electronic files. The analyst found the same program installed on the main computer at each of Rick's business locations.

Rick claimed that he routinely scrubbed his computers to make them run more efficiently, but he ran this scrubbing program after the trial court had already enjoined him from destroying his records and after Dora had sent a letter specifically warning against the spoliation of evidence.

Based on the partial records that she was able to review, Murff issued a report opining that more than $7 million were either missing from Rick's accounts or were spent in transactions that did not benefit the community estate.

Rick did not dispute that he spent community assets on his affairs, but he never identified the exact amount of his fraud. He also rejected Murff's assertion that his fraud exceeded $7 million. He claimed that a large portion of the funds identified in Murff's report never even existed.

In defense of his claims, Rick produced his own expert witness, William Stewart, who was also an accountant. Stewart did not review any of the underlying records that Murff had reviewed, but he opined that Murff had committed fatal errors by making her conclusions without sufficient data.

Rick also produced one of his employees, Angie Mendez, who testified about the operating practices of Rick's businesses and about various transactions that Murff had flagged as questionable. Mendez claimed that Rick never took petty cash from his businesses (controverting Rick's own testimony). She also traced the money behind some of Murff's flagged transactions, and she explained that those transactions could not have been fraudulent because they benefitted the businesses or the community estate.

After a nonjury trial, the trial court issued findings of fact and conclusions of law. Among the trial court's findings, the court found that Rick was not a credible witness, that he spoliated evidence, and that he committed a fraud on the community in the amount of $3,911,805.

The trial court then divided the community estate, which included all of the parties' community assets except for their respective businesses. The parties privately agreed that Dora would keep her ophthalmology practice and that Rick would keep the pharmacies and clinics. No values were assigned to these businesses on the parties' inventory of assets. As for the remaining community property, the trial court awarded Dora a net estate valued at more than $5.8 million and Rick a net estate valued at more than $4.6 million. This division effected a split of roughly 55% to Dora and 45% to Rick.

Under this same division of property, the full dollar amount of Rick's fraud was allocated to Rick as an asset, rather than a liability, and it composed the bulk of Rick's net estate. Of course, that dollar amount did not represent money that could actually be spent after the divorce. Quite the opposite, it represented the amount of community assets that Rick was found to *426have squandered during the marriage. To use Rick's own words, the fraud amount is a "phantom"-i.e., a fiction, or specter of property once had. If the phantom were removed from the community estate and the division of property were otherwise kept the same, then for purposes of calculation only, the value of Rick's net estate would be reduced to around $770,000, and the split would widen to 88% to Dora and 12% to Rick.

DIVISION OF THE COMMUNITY ESTATE

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Bluebook (online)
556 S.W.3d 420, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cantu-v-cantu-texapp-2018.