In re Marriage of Stroud

376 S.W.3d 346, 2012 Tex. App. LEXIS 6848, 2012 WL 3525558
CourtCourt of Appeals of Texas
DecidedAugust 16, 2012
DocketNo. 05-10-00982-CV
StatusPublished
Cited by3 cases

This text of 376 S.W.3d 346 (In re Marriage of Stroud) 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
In re Marriage of Stroud, 376 S.W.3d 346, 2012 Tex. App. LEXIS 6848, 2012 WL 3525558 (Tex. Ct. App. 2012).

Opinion

OPINION

Opinion By

Justice MURPHY.

Latetia (Tetia) Mae Stroud filed a petition for bill of review to set aside the property settlement reached with her ex-husband, Martin Hugh Stroud, and approved in the parties’ divorce decree. She alleged Martin’s threats of financial ruin and concealment of information prevented her from discovering the value and extent of the parties’ assets, resulting in an unfair property division in favor of Martin. The trial court granted Martin’s summary-judgment motion, and Tetia appealed. In three issues, Tetia contends the trial court erred in granting summary judgment for Martin because fact issues exist regarding the extrinsic fraud element of her bill of review and Martin’s affirmative defenses of estoppel and laches. We reverse and remand.

BACKGROUND

Tetia and Martin were married for twenty-three years before Tetia filed for divorce in 2006. Within a month of the filing, the parties negotiated a settlement agreement, which they signed on June 5, 2006. The settlement was approved by the trial court and incorporated into the final divorce decree dated August 15, 2006. Under the terms of the divorce decree, Tetia, a stay-at-home mother during the marriage, was awarded no spousal maintenance; rather, she received $50,000 in cash and an additional $450,000 to be paid by Martin in five installments from 2007 until 2012. Tetia also received, among other things, the physical assets in her possession or in her name and an employment contract with Chamberlin Roofing and Waterproofing Ltd., the company owned by Martin, providing her with an annual salary of $40,000 plus benefits for a period of three years. Martin was awarded the family home, the assets in his possession [350]*350or in his name, and “[a]ll partnership and business ownership, separate and community in nature,” including “all rights and privileges, past, present, or future, arising out of or in connection with the operation of the businesses.” Martin also received the rest of the community and separate property, “including, but not limited to, money, investments, and business interests not specifically awarded to [Tetia].” Martin was responsible for all expenses associated with their children.

On the same day they signed the settlement agreement, Tetia and Martin signed two documents, which were attached to and memorialized in the divorce decree. The first document was a “Waiver of Disclosure of Financial Information” in which the parties stated they each had been provided a fair and reasonable disclosure of the property and financial obligations of the other and that they expressly waived “any further disclosures of the property, including its value,” as well as the financial obligations of the other beyond the disclosures provided in the settlement agreement. They also acknowledged an opportunity to investigate the property and financial obligations of the other and waived “the opportunity for further investigation.” The second document was an “Instruction Not to Investigate Assets and Liabilities and Waiver of Disclosure of Financial Information” in which the parties instructed their attorneys, against legal advice, “to pursue the finalization of this case without performing formal or informal discovery.” They also gave up their rights to receive “certain information regarding assets and liabilities” from each other and the opportunity to make claims against assets they may have learned about during the discovery process.

Some time after the divorce became final, Tetia learned about the financial success of the business awarded to Martin. She claimed a “light turned on in [her] head,” and she believed Martin had used threats and intimidation to “cheat” her in the divorce. In July 2008, she hired accountant Robert Bailes to review financial information for Chamberlin Roofing and determine the value of Martin’s business interests. She also filed a petition to take the pre-suit deposition of Martin, which was granted by the trial court. Pursuant to a protective order, the trial court limited the scope of the deposition to “issues related to extrinsic fraud.” Martin also was ordered to produce certain documents, such as tax returns and financial statements, related to his business ownership.

Through his review of Chamberlin Roofing’s financial information, Bailes discovered Martin owned a fifty percent share of the company and that the partners made distributions to three affiliated partnerships. Martin testified at his May 2009 deposition that the affiliated entities were separate businesses formed during the marriage. Martin also testified to another company in which he had an ownership interest. Bailes did not see any financial information for the affiliated partnerships because the information was redacted from the documents produced by Martin. Bailes estimated that based on the documents he reviewed, the combined market value of the entities was nearly seven million dollars. This figure did not include other entities Bailes discovered were owned by Martin at the time of the divorce; Bailes stated these entities appeared to have substantial value. None of these entities were specifically identified in the divorce decree, and according to Bailes, the entities were awarded to Martin generally without having their values assessed.

Tetia filed this bill-of-review proceeding in October 2009 seeking to set aside the parties’ property settlement agreement as [351]*351well as. that portion of the divorce decree that incorporates the settlement. Tetia alleged the property division contained in the settlement agreement was so “grossly disproportionate” in Martin’s favor and this “absurdly disproportionate split” was “exactly what [she] was deceived and threatened into accepting.” Tetia alleged and verified by affidavit that Martin exhibited controlling and menacing behavior during their marriage and would intimidate her with the promise of financial ruin. She specifically stated that when they began discussing the possibility of divorce, Martin threatened that if she “attempted to assert a community property claim against the ownership interests in the companies the parties acquired during marriage, he would close down the business and start up a new one.” She also claimed Martin told her that she had signed a document ceding her ownership rights in the companies and that the document provided that if she attempted to assert those rights or discover any documents about the companies, “she would be penalized by receiving only a single dollar in the divorce settlement.” Martin also represented there was no need to conduct extensive discovery or hire financial experts to finalize the settlement. Tetia alleged Martin made these misrepresentations with the intent to force her to acquiesce and because she was worried he would follow through on his threats, she accepted a settlement she would not have otherwise agreed to had she known the truth.

Martin generally denied Tetia’s allegations and moved for sanctions, arguing the petition was frivolous and meant to harass him. He later amended his answer and asserted the affirmative defenses of estoppel and laches. He also moved for summary judgment, asserting that he had disproved any external fraud and had conclusively proved his affirmative defenses of laches and estoppel.

Martin’s summary-judgment evidence included his affidavit, the couple’s tax returns from the prior year that were signed after the divorce, some handwritten notes Tetia made during a meeting with her attorney, the transcript from the prove-up of their divorce settlement, and the divorce papers.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
376 S.W.3d 346, 2012 Tex. App. LEXIS 6848, 2012 WL 3525558, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-marriage-of-stroud-texapp-2012.