Michele DiBassie v. Damon DiBassie

• Court: Court of Appeals of Texas
• Decided: November 17, 2022
• Docket: 09-20-00287-CV
• Status: Published

Opinion

In The

Court of Appeals

Ninth District of Texas at Beaumont

__________________

NO. 09-20-00287-CV __________________

MICHELE DIBASSIE, Appellant

V.

DAMON DIBASSIE, Appellee

__________________________________________________________________

On Appeal from the 418th District Court Montgomery County, Texas Trial Cause No. 19-01-00879-CV __________________________________________________________________

MEMORANDUM OPINION

This is an appeal from a final decree of divorce. Appellant Michele DiBassie

contends the trial court abused its discretion in making a disproportionate division

of property in favor of appellee Damon DiBassie. Michele argues the trial court erred

by awarding Damon property and assets that belonged to Structural Concrete

Systems, LLC (“SCS”), a separate legal entity; crediting her with the value of real

property that had been gifted to their daughter; and entering a judgment against her.

Michele also argues the trial court erred by relying on findings of fact that are based

1 on insufficient evidence and not supported by the record. We affirm the trial court’s

judgment.

BACKGROUND

Michele and Damon married in 1993 and started SCS in 2001. In 2019,

Damon sued Michele seeking a divorce. In his Petition, Damon claimed the marriage

had become insupportable due to discord or a conflict in personalities that destroyed

the legitimate ends of their marriage. In his Second Amended Petition for Divorce,

Damon added SCS as a Co-Respondent, 1 and he requested that the trial court divide

the marital estate in a just and right manner. Damon also requested that the trial court

award him a disproportionate share of the parties’ estate for the following reasons:

fault in the breakup of the marriage; benefits the innocent spouse may have derived

from the continuation of the marriage; disparity of earning power of the spouses and

their ability to support themselves; community indebtedness and liabilities; tax

consequences of the division of property; business opportunities of the spouses; need

for future support; nature of the property in the division; wasting of community

assets; reimbursement; attorney’s fees to be paid; and actual and constructive fraud

committed by Michele.

Damon further alleged that both he and Michele have separate estates and

requested the trial court to confirm his separate property and reimburse his separate

1Structural Concrete Systems, LLC is not a party to this appeal. 2 estate for funds or assets expended by his separate estate for the benefit of Michele’s

separate estate. Damon requested that the trial court reimburse the community estate

for funds and or assets expended by the community estate for payment of unsecured

liabilities of Michele’s separate estate and for the value of community time, toil,

talent, and effort expended by Michele to benefit or enhance her separate estate.

Damon alleged that SCS was the alter ego of Michele and acted solely as a conduit

for the performance of Michele and her business. Damon explained that he owned

49% of SCS and Michele owned 51%, and SCS holds both his and Michele’s

property either on deposit, in safekeeping, in safe deposit boxes, or in a trust or

fiduciary capacity.

In his Third Amended Petition, Damon alleged Michele was guilty of

committing constructive fraud and breaching the fiduciary duty she owed him during

their marriage. Damon also alleged that Michele wasted, spent, and/or disposed of

his share of the community property without his knowledge or consent, and she

misused and misapplied community property, money, and assets. Damon requested

the trial court to calculate the value by which the community estate was depleted as

a result of Michele’s fraud, calculate and determine the amount of the reconstituted

estate, divide the value of the reconstituted estate between the parties in a manner

the trial court deemed just and right, and grant legal and equitable relief to

accomplish a just and right division, including a money judgment against Michele.

3 Damon also requested relief from Michele as the majority shareholder of SCS

and claimed Michele tortiously interfered with his relations with SCS and

improperly withdrew him as a member of SCS and from SCS’s bank accounts.

Damon explained that Michele’s actions terminated his reasonable expectation to

continue his business relationship with Michele and SCS and caused him damages.

Damon alleged that Michele committed fraud on the community and breached her

fiduciary duty by attempting to withdraw him as a member of SCS, and if the trial

court found his withdrawal was valid, Damon argued that Michele committed breach

of contract by failing to pay him a distribution as required by SCS’s Regulations.

Damon requested attorney’s fees and an accounting and appraisal of SCS’s fair

market value. Damon also alleged a claim for conversion, pled that the restraints in

the alleged Employment Agreement and SCS’s Regulations violated the Texas

Business and Commerce Code and were unenforceable, and sought actual and

exemplary damages.

Damon filed a First Supplemental Petition to Petitioner’s Third Amended

Petition for Divorce alleging that Michele misappropriated funds by purchasing a

home in Galveston (“Galveston Home”) with community funds and putting the title

in their daughter’s name. Damon asked the trial court to impress a constructive trust

on the Galveston Home and award it to him. Damon filed a Fourth Amended Petition

for Divorce, alleging, among other things, that because he never signed or agreed to

4 SCS’s Regulations, the Regulations do not bind him or govern SCS or Michele’s

attempt to withdraw him from SCS. Damon also requested declaratory relief,

including declarations that SCS’s Regulations, the 2018 document withdrawing him

from SCS, and the Employment, Noncompetition, and Confidentiality Agreement

were invalid.

Michele filed a Third Amended Counter-Petition for Divorce and alleged that

Damon committed fraud on the community estate, breached his fiduciary duty, and

wasted community property. Michele asked the trial court to award her a

disproportionate share of the community estate, reconstitute the community estate,

confirm her separate property, award her a money judgment for damages on her

independent tort claims, and award her attorney’s fees, expenses, and costs. In

response, Damon filed a Revised Fourth Amended Petition for Divorce to address

Michele’s new claims.

During the pendency of the divorce, Michele filed for bankruptcy, and the

divorce proceeding was removed to United States Bankruptcy Court for the Southern

District of Texas and then remanded back to the state court for the disposition on its

merits. In its Order Granting Damon’s Motion for Abstention and Remand, the

bankruptcy court found that forum shopping was an issue in Michele’s bankruptcy

case because the removal of a property division incident to a divorce to a Federal

Bankruptcy Court is not a normal or typical occurrence. After the divorce proceeding

5 was remanded back to state court, the trial court conducted a bench trial. The issues

contested in the appeal hinge largely on whether the final judgment represents a fair

division of the parties’ marital estate. We discuss the testimony of the witnesses

relevant to the parties’ arguments raised in their appellate briefs.

Michele testified she and Damon were married in 1993 and have one adult

daughter who resides in Galveston. They ceased to live together in November 2018.

Michele explained that in December 2001, she and Damon started SCS, a

commercial construction company engaged in concrete repair organized as a limited

liability company, with a principal place of business in Houston, Texas, and they

were the only managing members. Prior to working for SCS, Michele worked for

her family business, as a legal secretary in the concrete industry, and as a database

manager. Michele testified that she completed some college but does not have a

degree or any licenses or certificates.

Michele testified that Daniel Hoffman, an accountant and attorney, drafted

SCS’s Regulations in 2002. Michele testified that she had Damon’s consent to cut

and paste a copy of his electronic signature on the Regulations. Michele explained

that the Regulations provided that, unless otherwise agreed by unanimous decision

of all members, a member could be withdrawn from SCS upon filing a voluntary

bankruptcy petition, dying, being adjudicated incompetent, filing a dissolution of a

certificate by a corporation, distributing an estate’s entire interest in the company,

6 or upon the affirmative vote of a majority of the remaining members. Michele agreed

that the Regulations did not provide for the withdrawal of a member based on a

criminal conviction. Michele also explained that upon withdrawal, the member is

entitled to a distribution of the fair market value of the member’s interest to be

determined by an agreement of the members or by an appraiser if the members

cannot agree. Michele testified that the Regulations Hoffman prepared did not

contain any noncompete, non-solicitation, or confidentiality clauses.

Michele testified about a second set of regulations that also contained

electronic signatures and included (1) an additional withdrawal provision, providing

for withdrawal upon the occurrence of being adjudicated guilty of any criminal

offense and (2) a different determination of the fair market value of the member’s

interest being based upon actual assets of the company. Michele did not know why

there were two signed versions of the regulations and claimed that she did not add

the provision or know who had done so. Michele agreed that in 2009, she had

included Hoffman’s original version of SCS’s Regulations with an application for

woman business entity owned status with the city of Austin.

Michele also testified about the Employment Noncompetition and

Confidentiality Agreement, which was dated December 2001. Michele testified the

agreement was created in 2010 and backdated to SCS’s date of inception because of

an appeal with the City of Houston concerning SCS’s entity status. Michele

7 explained that she received the form for the agreement from an unknown attorney,

modified the form to include SCS and Damon, and cut and pasted Damon’s

electronic signature on the agreement with his permission. Michele testified that in

addition to other things, the noncompetition agreement prohibited Damon from

competing with SCS. When asked what consideration Damon received for signing

the agreement, Michele explained that SCS’s certification was granted, but she later

testified that in addition to Damon’s member interest in SCS, he received a $60,000

yearly salary as consideration, which was to be paid at the end of every month that

SCS had a positive cash flow. Michele testified that the agreement also contained a

provision that an employee may be terminated for having a conviction of or entering

a plea of nolo contendere to a charge of a felony or misdemeanor involving moral

turpitude. Michele agreed that prior to 2010, the year Michele testified the agreement

was created, Damon had been convicted of driving while intoxicated.

Michele explained that after Damon was in jail in September and October of

2018, he returned to work in November and left SCS on December 1, 2018. Michele

testified that she withdrew Damon from being a member of SCS in December 2018,

because he tried to withdraw money from SCS’s bank account, shut down SCS’s

online profile, and cancelled her business debit card. Michele explained that the

Withdrawal was signed on January 7, 2019, but she backdated the date on the

Withdrawal to be effective the day he left SCS. Michele testified that between

8 December 1, 2018 and January 7, 2019 she moved money out of SCS’s account so

Damon could not withdraw any money. Michele explained that she used the criminal

provision in the second set of regulations to withdraw Damon as a member. Michele

also explained that between December 1 and January 7, she did not inform Damon

she had withdrawn him as a member of SCS, and she did not pay Damon for the

value of his interest in SCS as specified by the Regulations. Michele testified that

they attended mediation and agreed to have SCS valuated by Jeannie McClure, and

Michele provided the financial statements, tax returns, and general ledger.

Michele testified that on June 19, 2019, her accountant rendered SCS’s

financial statements for the period ending December 31, 2018, and she assumed

McClure had the financial statement to perform her valuation but admitted that

McClure may not have had the document because her original valuation was

performed on June 30, 2019. Michele testified that the 2018 financial statements

show the members’ equity was $2,469,486, and a member’s bonus of $928,866 was

taken to receive a tax reduction. After paying taxes on the bonus, she redeposited the

money into SCS’s account. Michele explained it was “just an accounting action[,]”

and she never discussed it with Damon, and at the end of 2018, it appeared that she

and Damon had taken $1,154,586 in distributions. Michele also explained that SCS’s

statements of cash flow shows SCS had $2,117,505 in investment account

receivables in three Merrill Lynch accounts and that there was a decrease of

9 $1,833,078, but she was not sure where that number came from. Michele testified

that she provided information to the accountant showing that going into 2019, SCS

had a backlog of $1,000,000 and estimated revenues of $2,017,604 from additional

contracts to be performed in January 2019. Michele explained that she never

presented financial statements that were materially misleading. Michele testified that

SCS’s 2018 tax return shows it had $3.2 million in ordinary business income, which

differs from SCS’s 2018 financial statements.

Regarding SCS’s financial statement dated June 30, 2019, Michele agreed that

the accountant included a statement that “‘[m]anagement has elected to omit

substantially all the Disclosures and statements of cash flows required by accounting

principles generally accepted in the United States of America.’” Michele testified

that she did not understand what that statement meant and claims she did not omit

anything. Michele explained that the June 30 balance sheet was based on the period

of December 31, 2018 through June 30, 2019, which was after Damon took a

$1,000,000 distribution from his Merrill Lynch account, and the balance sheet

showed $2,290,565 in member equity and $1,080,372 in the investment accounts.

Michele did not know why the member equity on December 31, 2018, which was

$2,469,000, had only decreased to $2,290,565 as of June 30, 2019, despite Damon

having taken his $1,000,000 distribution. Michele testified she guessed Damon

received the partial distribution of $956,711; however, she did not know who

10 received the $514,686 member distribution without looking at the supporting

documents, but she claimed she took distributions to pay Damon’s bills. Michele

explained that Damon’s $1,000,000 was pledged to SCS, and after he took his

distribution, SCS’s balance sheet showed that amount as a loss, which affected

SCS’s bonding capacity.

Michele also testified about SCS’s financial statement for December 31, 2019,

which had not been finalized as of August 2020, because they were still working on

the numbers concerning the property and equipment on the balance sheet. Michele

explained she had never really worried about the balance sheet’s accuracy, but they

needed to perform inventories to get an accurate number for the bonding company.

Michele testified that she had produced SCS’s general ledger as of December 31,

2019, in a pdf format. Michele explained that the general ledger shows she received

a paycheck on December 28, 2018 for $318,342, but she claimed it went into petty

cash and back into her member’s contribution account to pay wages. Michele did

not know why the ledger showed her member’s capital contribution account received

an uncashed paycheck marked petty cash for $532,789.63 on that same date. Michele

explained that the capital contribution was not split between her and Damon’s capital

accounts because it “wasn’t a real paycheck. It was just in order to get over the

threshold for the tax deduction.” Michele also explained that on December 3, 2018,

she moved $275,700 from SCS to the DiBassie Leasing account so Damon would

11 not deplete the account. Michele testified that she did not know why the funds she

transferred to DiBassie Leasing flowed through Damon’s member capital account,

but she claimed it was perhaps to pay for the Bobcat. Michele testified that Damon’s

Merrill Lynch member account was solely in his name and she had a similar account

in her name that contained $1,056,384.53 as of December 31, 2018, and both

accounts were set up when they started their divorce proceeding. Michele explained

that in 2019, $2,274,452 in total distributions went out, and Damon only received

the $1,000,000 distribution when he left SCS. Michele testified that the other

distributions are not entirely hers, and she takes out $27,000 per month for payroll.

Michele further testified that she filed for bankruptcy in May 2020, and in her

bankruptcy schedule she claimed the Richards property that she and Damon owned

was valued at $800,000, but the land only appraised for $150,000. Michele testified

that she listed herself as the 100% owner of SCS because she believed she had paid

Damon for his 49% interest when he took his $1,000,000 distribution that was listed

as an asset on SCS’s balance sheet. Michele explained that she listed SCS’s value as

$457,000, which was the cash in the company, excluded any accounts receivables,

and added the value of all the equipment and assets that were in their personal names

to their community property. Michele also omitted other assets, including their wine

collection, gun safe, and fifth wheel. Michele further testified that they paid

12 $90,312.50 for their Houston Oaks membership to celebrate Damon’s birthday, and

she used distributions from SCS to pay for bills from Houston Oaks.

In July 2019, Michele used proceeds from her individual Merrill Lynch

account to purchase their daughter a home for $279,361, and she testified that she

did not discuss the purchase with Damon when she made it. Michele explained that

she also transferred money from her individual Merrill Lynch account to SCS’s

checking account to pay business expenses, and she transferred money out of SCS’s

checking account into her personal account to pay her personal expenses. Michele

testified that in 2019, she spent approximately $60,000 traveling to France, Spain,

and Africa, and she gave money to a relative. Michele also testified that between

January 2019 and June 2020 she “possibly” spent $137,319.19 on travel expenses.

In 2020, Michele paid $60,000 cash for her daughter’s car using money from SCS,

and Damon agreed to the purchase. In her bankruptcy filings, Michele disclosed that

in 2019, she received $415,129 in distribution from SCS, which included the money

to purchase her daughter’s home. Michele’s inventory included her valuations for

their community property, and she valued SCS at $1.39 million, which included the

prefab building valued at $130,238.

Michele explained that she sought to remove the divorce proceeding and

protective orders to bankruptcy court, but the bankruptcy court granted Damon’s

motions to dismiss her bankruptcy and remanded the cases back to state court.

13 Michele agreed that the bankruptcy court found that forum shopping was an issue in

her case, but she claimed she filed bankruptcy because of attorney’s fees. Michele

testified that she was still in bankruptcy because the court vacated its dismissal order,

but Damon had filed another motion to dismiss. Michele explained that she paid her

divorce attorney with her salary from SCS and member distributions.

Michele testified that their home on Imperial Oak (“the Imperial Oak

property”) sits on two lots totaling four acres, and SCS is located in a trailer or prefab

office on their property behind the home. Michele explained they owned a total of

ten acres, which included adjacent land known as the Country Pines property.

Michele testified that the Imperial Oaks property appraised for $555,000, and the

Country Pines property appraised for $158,000. Michele testified that on December

1, Damon came to the Imperial Oak property and removed property from SCS.

Michele explained that Damon took, among other things, the Kubota UTV, lawn

mower, Kubota lawn tractor, his truck, and tools. Michele explained that the Kubota

tractor was in Damon’s name as well as all the vehicles SCS uses, and she did not

know if the Kubota UTV was in Damon’s name. Michele also testified that she

purchased the Cashel Glen property two years prior to marrying Damon, and during

the marriage, she made approximately $70,000 in payments on the property, which

was paid off two years prior to trial.

14 Michele explained that she had pled cruelty in the divorce due to suffering

physical, mental, and sexual abuse by Damon. Michele further explained that

Damon’s alcohol and drug problems created a volatile marriage and affected SCS’s

business. Michele also testified that Damon cheated on her in 2017 and 2018.

Damon testified that he did not approve or consent to Michele’s spending,

including her buying their daughter a new car. Damon testified that his inventory

shows the value of his estate. Damon further testified that his proposed division of

property valued the Richards property at $190,000, which included the $75,000 steel

structure that had been erected since he had valued the property at the appraised

value of $130,000 on his inventory. Damon explained that he paid $52,000 for his

fifth wheel trailer that is three years old. Damon requested that the trial court award

him the Imperial Oaks property, the Richards property, and the Country Pines

property. Damon also testified he did not approve the purchase of the Galveston

home, and he asked the court to either impose a constructive trust on the home or

consider it as part of his waste claim. Damon explained that he was concerned about

the trial court awarding him a personal judgment against Michele because she could

discharge it in her bankruptcy, and he requested that any judgment be against SCS.

Damon testified he noticed several issues when he reviewed SCS’s 2019

general ledger that Michele provided. Damon explained that fraudulent costs had

been added to at least seven jobs to make it appear that the profits were lower and to

15 devalue the company. Damon had requested the native form of SCS’s Quickbooks

to reconcile the jobs, but Michele filed bankruptcy and the trial court halted its

proceeding. Damon testified that he was also unable to depose Chris Reeves, one of

SCS’s managers, about excessive bonuses and cash Michele gave him in 2019.

Damon testified that he believed Michele fraudulently filed bankruptcy after

spending excessively and that he had to pay approximately $75,000 in attorney’s

fees to have his divorce case remanded back to state court.

Damon explained that he alleged a breach of contract claim against Michele

for using false documents to withdraw him from SCS and for failing to pay him for

his portion of SCS. Damon testified that he did not receive any money from SCS in

2019 or 2020, but he had $968,815.88 in January 2019, $560,000 in January 2020,

and had spent nearly $1,000,000 in twenty months. Damon explained that since he

filed for divorce, he had spent, among other amounts, over $33,000 in travel, $8,000

in liquor stores, $20,000 on his girlfriend’s eye surgery, $45,000 on a tractor, several

hundred thousand dollars on improvements to the Richards property, accounting

expenses on his new business, and he bought a Harley Davidson. Damon testified

that he also sold an airplane.

Damon testified that in 2019, Michele took $1,600,000 in distributions from

SCS plus her salary and cash she wasted, and in 2020, she spent more than $500,000.

Damon explained that Michele spent approximately $315,000 on the Galveston

16 home and over $130,000 in travel expenses from January 2019 to June 2020 for her

and their daughter. Damon also explained that Michele failed to cooperate with the

litigation and discovery requests and filed bankruptcy, and her behavior hindered the

process, caused him to incur excess attorney’s fees, and resulted in Michele

wastefully spending money on attorney’s fees. Damon testified that SCS’s June 2020

financials show approximately $2,900,000 of backlogs of contracts, but Michele

failed to provide documentation of that amount.

Damon explained that he has a Bachelor of Science in psychology with a

minor in history, and he went to school to be a general contractor. Damon also

explained that his work history includes forensic investigations and knowledge of

structural repair for concrete structures. Damon testified that he provided the

industry knowledge to perform SCS’s work and shared his knowledge with SCS’s

employees. Damon further testified that when he filed for divorce he alleged cruel

treatment because Michele told him she had all the books and records, she would

ruin him, and make sure he never worked again.

Damon explained that in 2017, he got his third DWI, pled guilty in August

2018, and served sixty days in county jail. Damon testified that he was working for

SCS in 2018, and he did not receive actual notice about his removal until he went to

Chase bank to get statements for the divorce. Damon further testified that he never

transferred money out of the Chase account. Damon explained that he never signed

17 SCS’s Regulations or gave Michele approval to use his signature on the Regulations

that would allow his removal for a criminal charge or conviction. Damon testified

that he found two sets of regulations on his computer’s hard drive, and the 2018

version contained the criminal kick-out language, but the 2001 or 2002 version did

not. Damon also explained that he never saw, signed, or authorized Michele to sign

a document that would prevent him from competing or soliciting business or clients,

and he never received a $60,000 salary from SCS as compensation for signing the

alleged noncompete agreement. Damon testified that the noncompete employment

agreement indicates it was created in 2001, but it contains the Imperial Oaks

property’s address, which they acquired in 2008. Damon further testified that he

gave the computer hard drive to Aaron Hughes, a forensic computer specialist.

Damon requested a disproportionate share of the community estate because

Michele caused him to incur increased attorney’s fees and she committed fraud by

alleging that he signed “some document, kicking me out [sic] my own company and

taking over the bank accounts and spending money the way she has.” Damon

explained the whole process has been hindered and his attorney never got SCS’s true

Quickbook records. Damon testified that there has been a disparity in earning power

because in 2019 and 2020 he had no income. Damon explained that he created

Technical Structural Repair Group, LLC (“TSR”) and is waiting until the divorce is

finalized to start conducting business, but he needs money to reestablish himself.

18 Damon explained that he had lost his earning capacity due to the alleged noncompete

agreement and because Michele had badmouthed him in the industry. Damon

requested that the court impose a judgment against SCS to equalize the division of

the money he is owed for the value of SCS. Damon also testified that he is unable to

pay his attorney’s fees, which exceed $450,000. Damon explained that he made

multiple attempts to mediate and settle the case. Damon testified that Michele

breached her fiduciary duty to him as a member of SCS by copying and pasting his

name on documents, spending excessively, purchasing their daughter a home

without his knowledge, and failing to provide discovery and turn over SCS’s

Quickbooks in native form.

McClure, a CPA who specializes in business valuation and certified forensics,

testified that she was jointly appointed as a business valuation expert to assess the

fair market value of SCS. McClure testified that she prepared her original report on

June 30, 2019 and a supplemental report, which contains her most recent valuation,

on December 31, 2019. McClure concluded that SCS’s fair market equity value was

$1,390,000 as of December 31, 2019. McClure testified that Michele’s commitment

of working capital was approximately $1,080,000 on June 30, 2019, $440,000 on

December 31, 2019, and “just south of $40,000[]” on June 30, 2020. McClure

explained that working capital is an important element of her valuation, and the

reduction was not a withdrawal of funds from SCS but a withdrawal from Michele’s

19 personal brokerage account. McClure also explained that having the December 31,

2019 financials could have made a difference in her report.

Robert Vega, the manager of a computer technology store, testified that his

staff copied the hard drive of the computer Damon took from the marital home.

Aaron Hughes, a forensic analyst of electronic devices, testified that he was provided

sample copies of SCS’s original Regulations, the altered regulations, and an external

hard drive and was asked to identify various versions of the sample documents on

the hard drive. Hughes testified that SCS’s original Regulations were created on

January 4, 2002 and did not contain the criminal kick-out, noncompete, or the non-

solicitation language. Hughes explained that the altered document containing the

criminal kick-out, noncompete, and non-solicitation language was created on August

30, 2018, and stored in a folder titled “divorce[.]”

James Hamon, a certified real estate appraiser, testified that he appraised the

Imperial Oaks property, the Country Pines property, and the Richards property.

Hamon testified that the value of the Country Pines property is $158,000, excluding

the mobile home and storage containers. Hamon testified that the value of the

Imperial Oaks property is $555,000, which included all improvements fixated on the

property. Hamon explained that the workshop on the Imperial Oaks property was

assessed at $20,000.

20 John Baggett testified that he met Damon and Michele at the Houston Oaks

country club, had known them for approximately three years, and traveled with them

to Italy twice. Baggett explained that Damon did not have a reputation of being a

belligerent, abusive drunk, but was a “social drinker, like anybody else.” Baggett

also explained that he never saw Damon get violent or upset or hear about him

having bad behavior at Houston Oaks. Baggett testified that he lives at Houston

Oaks, and he was upset about Damon being removed from the club. Baggett further

testified that on one occasion he witnessed Michele being verbally abusive and

shouting very loudly with expletives at an unknown man. Steve Winter, another

member of Houston Oaks, testified that he knew Michele and Damon from the club

and had traveled with them. Winter explained that he never saw Damon be a

belligerent drunk, act unruly at the club, or be abusive.

The trial court granted the parties a divorce based on the grounds of

insupportability. The trial court awarded Damon the following property: Imperial

Oaks home and property excluding the shop, the Richards property; Country Pines

lot excluding mobile home and containers; Merrill Lynch account ending in 450;

Merrill Lynch account ending in 551; Chase account for TRS ending in 0066; Chase

account for TRS ending in 2903; Merrill Lynch SEP account ending in 284;

ownership of the limited liability company known as TSR and all assets and debts

of TSR; 2018 GMC Denali; 2018 Ram 3500; 2015 Harley Davidson; 2011 Kubota

21 UTV; 2018 fifth wheel; 2018 Kubota lawnmower; 2019 John Deer Tractor; Kubota

M-56 with equipment; prefab office trailer; 2019 Harley Davidson; golf cart at

Richards property; 2011 Club car golf cart; Kubota M1489; proceeds from the

airplane sale; jewelry and personal effects in his possession; gun safe and guns;

personal property in his possession; one half or copies of all pictures; J.J. Watt

helmet; tools; pressure washer; car accessories, motorcycle gear and equipment;

military stuff; nail puller; weighs and weight bench equipment; scuba diving gear;

tanks and helmets; his college books; clothes and suits; and his U of H ring, diamond

ring, and any other jewelry belonging to him in Michele’s possession. The trial court

ordered Damon to pay the debt associated with his awarded property, one-half of the

parties’ 2019 IRS tax liability, and the following debts: American Express account

ending in 3006; American Express account ending in 2004; Capital One account

ending in 2069 or 2096; Chase account ending in 3909; Chase account ending in

4862; American Express account ending in 2005; and American Express account in

the name of TSR ending in 3003.

The trial court awarded Michele the following property: any interest the

community estate may have in the Galveston home; Chase account ending in 0140;

Merrill Lynch account ending in 367; Chase account ending in 8250; the business

known as SCS; all assets and debts of that business; Merrill Lynch SEP account

ending in 283; 2014 Tesla; any interest the community estate has in daughter’s car;

22 golf cart at Galveston home; two Arabian horses; 2017 Toro lawn tractor; 2004

Alumacraft boat, trailer, and motor; 2005 Premier pontoon boat, trailer, and motor;

all wine in her possession that was previously in the cellar of Houston Oaks; her

jewelry and personal effects in her possession; the Houston Oaks membership; and

any personal property in her possession not awarded to Damon. The trial court

ordered Michele to pay the debt on the American Express account ending in 4004

and a $300,000 judgment with interest to Damon to equalize the division of the

marital estate and found the division of the marital estate to be just and fair. The trial

court also confirmed the Cashel Glen property as Michele’s separate property. The

trial court stated, “I’m not awarding the assets and debts of the business. I’m

awarding the ownership of the business to wife.”

Damon filed a Motion for Clarification on the Trial Court’s Ruling, seeking

among other things, whether the prefab office building the trial court awarded to him

was the same mobile home awarded to Michele and whether the trial court awarded

either party to pay their attorney’s fees. Michele filed a response to Damon’s motion,

arguing, among other things, that certain property the trial court awarded Damon

belonged to SCS and should have been awarded to her. The Final Decree of Divorce

incorporated the trial court’s oral pronouncement and ordered Michele to pay one-

half of the parties’ 2019 IRS tax liability and SCS’s attorney’s fees and for each

party to pay their own attorney’s fees.

23 Michele filed a Request for Findings of Fact and Conclusions of law. The trial

court issued Findings of Fact and Conclusions of Law. The trial court found, among

other things, that Michele’s removal of the divorce case and both parties’

Applications for Protective Orders to bankruptcy court was done to avoid the

jurisdiction of the divorce court and forum shop and caused unnecessary expense

and attorney’s fees; Michele used community funds to gift her daughter the

Galveston Home without Damon’s consent or agreement; Michele’s trial testimony

was not credible; Damon did not sign or consent to a noncompete agreement,

nondisclosure agreement, or a non-solicitation agreement; and both parties

committed waste during the pendency of the divorce. The trial court found that it

considered the following factors in making a just and right division: fault in the

breakup; relative education of the spouses; disparity in incomes, earning capacities,

or business skills; relative age and physical condition of the parties; other financial

obligations including attorney’s fees; size of any separate estate; whether any

particular piece of property has a unique benefit to one party; any gifts between the

spouses as well as excessive gifts to children; tax consequences of assets; Michele

having committed fraud on the community during the marriage; each party’s

behavior during the divorce; source of assets used to acquire the community estate;

attorney’s fees Michele spent to remove the divorce and protective order cases to

bankruptcy court and her attempt to prevent those cases from being returned to state

24 court; attorney’s fees Michele spent to prosecute the divorce case and her actions

which resulted in increased fees; Michele’s failure to attend the last day of trial and

submit to further cross-examination; wasting of community assets by both parties;

Michele’s breach of fiduciary duty; the spouse’s earning power and business

opportunities; attorney’s fees paid and to be paid; and Damon’s need for future

support.

The trial court’s findings of fact include the value of any cash, real property,

financial accounts, business interest, motor vehicles, household effects, clothing, and

judgments the parties were awarded as well as the value of any liabilities or

reimbursement they were ordered to pay. The trial court found the division of

community property and liabilities is a just and right division, resulting in slightly

above 50% of the community estate being awarded to Damon and slightly below

50% being awarded to Michele. The trial court also found that part of the just and

right division of assets and liabilities of the marriage included awarding Damon a

$300,000 judgment with interest against Michele. The trial court further found that

the community estate was entitled to reimbursement of $30,000 from Michele for

funds spent to benefit Michele’s separate estate. The trial court denied Michele’s

Motion for New Trial or Alternatively Motion to Modify, Correct or Reform Final

Decree of Divorce.

25 ANALYSIS

In six issues on appeal, Michele complains that the trial court made an unequal

division of the community estate in Damon’s favor. Michele challenges the trial

court’s findings supporting the division of the community estate, arguing that there

is either no evidence or insufficient evidence to support the trial court’s findings that

she (1) gifted the Galveston home without Damon’s consent; (2) committed fraud

on the community during the marriage; (3) breached her fiduciary duty; (4) removed

the divorce and protective order cases to bankruptcy court and attempted to prevent

the case from being returned to state court to avoid the divorce court’s jurisdiction

and forum shop; (5) caused increased attorney’s fees; and (6) that Damon needed

future support and did not sign or consent to a nondisclosure agreement.

We review a trial court’s division of community property for an abuse of

discretion. See Murff v. Murff, 615 S.W.2d 696, 698 (Tex. 1981). The test for abuse

of discretion is whether the trial court acted arbitrarily or unreasonably, or whether

it acted without reference to any guiding rules or principles. See Downer v.

Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985). The law requires

an equitable, not an equal, division of the community estate. See Tex. Fam. Code

Ann. § 7.001; Bradshaw v. Bradshaw, 555 S.W.3d 539, 546 (Tex. 2018) (Devine,

J., concurring); In re Marriage of Harrison, 557 S.W.3d 99, 140 (Tex. App—

Houston [14th Dist.] 2018, pet. denied). A trial court does not abuse its discretion if

26 there is some evidence of a substantive and probative character to support the

division. See Butnaru v. Ford Motor Co., 84 S.W.3d 198, 211 (Tex. 2002).

In a bench trial, the judge is the factfinder and the sole judge of the credibility

of the witnesses and weight to be given their testimony. See Murff, 615 S.W.2d at

700; Zagorski v. Zagorski, 116 S.W.3d 309, 318 (Tex. App.—Houston [14th Dist.]

2003, pet. denied). To determine whether the trial court divided the community

estate in a “just and right” manner, we must have the trial court’s findings of the

value of those assets. Harrison, 557 S.W.3d at 141. Michele’s complaints concern

whether legally and factually sufficient evidence supports the trial court’s findings.

“When a party attacks the legal sufficiency of an adverse finding on an issue on

which [she] has the burden of proof, [she] must demonstrate on appeal that the

evidence establishes, as a matter of law, all vital facts in support of the issue.” Dow

Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001) (citing Sterner v. Marathon

Oil Co., 767 S.W.2d 686, 690 (Tex. 1989)); see Danner v. Danner, No. 09-18-

00385-CV, 2020 WL 6325725, at *5 (Tex. App. Beaumont Oct. 29, 2020, 2018, pet.

denied) (mem op.). In our review of a finding challenged for legal sufficiency, we

consider the evidence “in the light most favorable to the verdict and indulge every

reasonable inference that would support” the challenged finding. City of Keller v.

Wilson, 168 S.W.3d 802, 822 (Tex. 2005). “But if the evidence allows only one

inference,” we may not disregard the evidence when deciding whether legally

27 sufficient evidence supports the finding the appellant has challenged in her appeal.

Id. As applied to Michele’s appeal, the standard of review requires that we disregard

evidence that contradicts the trial court’s finding that Michele challenges unless the

trial court, based on the evidence, only had one choice–to find in Michele’s favor on

the findings she challenges in her appeal. See Kroger Tex. Ltd. P’ship v. Suberu, 216

S.W.3d 788, 793 (Tex. 2006).

We review the trial court’s findings of fact for factual sufficiency of the

evidence under the same legal standards as applied to review jury verdicts for factual

sufficiency of the evidence. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex. 1996). When

a party attacks the factual sufficiency of the evidence on an issue on which she had

the burden of proof, “she must demonstrate on appeal that the adverse finding is

against the great weight and preponderance of the evidence.” Dow Chem. Co., 46

S.W.3d at 242. In a factual sufficiency review, we examine all the evidence and view

it in a neutral light. See id. But unless the evidence is so weak or the trial court’s

finding is clearly wrong and unjust given the great weight and preponderance of the

evidence, we cannot set the finding the appellant challenges aside when resolving

the appeal. Id. In other words, we cannot substitute our judgment for the factfinder’s

if the evidence supports the challenged finding. See In re H.R.M., 209 S.W.3d 105,

108 (Tex. 2006) (discussing factual sufficiency); see also In re J.L., 163 S.W.3d 79,

86–87 (Tex. 2005) (discussing legal sufficiency).

28 When dividing a couple’s marital estate, trial courts have a statutory duty to

“order a division of the estate of the parties in a matter that the court deems just and

right, having due regard for the rights of each party and any children of the

marriage.” Tex. Fam. Code Ann. § 7.001. Trial courts may consider several factors

in dividing a marital estate, including the disparity of incomes and parties’ earning

capacities, the benefits that a spouse would have derived from the marriage had it

continued, each spouse’s “business opportunities, education, relative physical

conditions, relative financial condition and obligations, disparity of ages, size of

separate estates, and the nature of the property.” Murff, 615 S.W.2d at 699. When

the appellant complains the trial court abused its discretion because it did not fairly

divide the couple’s estate, we will not overturn the trial court’s division of the

property if the record contains some evidence of a substantive and probative

character supporting it. Hinton v. Burns, 433 S.W.3d 189, 193 (Tex. App.—Dallas

2014, no pet.) (citing Moroch v. Collins, 174 S.W.3d 849, 857 (Tex. App.—Dallas

2005, pet. denied)).

In family law cases, the abuse-of-discretion standard overlaps with the

traditional legal and factual sufficiency standards of review, and legal and factual

sufficiency issues are not independent grounds asserting error but are factors

relevant to the appellate court’s evaluation of whether an abuse of discretion

occurred. Hinton, 433 S.W.3d at 193; Moroch, 174 S.W.3d at 857; see also In re

29 A.B.P., 291 S.W.3d 91, 95 (Tex. App.—Dallas 2009, no pet.) (discussing standard).

To decide whether an abuse of discretion occurred, we consider whether the trial

court (1) had sufficient evidence to exercise its discretion and (2) erred in that

discretion. Hinton, 433 S.W.3d at 193–94; In re A.B.P., 291 S.W.3d at 95. The first

prong of this two-part test focuses on whether the ruling the trial court made is

supported by sufficient evidence. Hinton, 433 S.W.3d at 194; Moroch, 174 S.W.3d

at 857. In a case in which some evidence supports the trial court’s ruling, the second

part of the test requires the appellate court to determine whether that evidence, after

considering the elicited evidence, shows the ruling the trial court made is one that is

reasonable. Hinton, 433 S.W.3d at 194; Moroch, 174 S.W.3d at 857. We review the

record in the light most favorable to the trial court’s judgment to determine whether

some evidence supports it, and we will uphold the judgment on any legal theory that

finds support in the evidence. Harrison, 557 S.W.3d at 131.

In issue one, Michele argues the trial court erred by awarding Damon property

and assets that belonged to SCS because the Texas Business Organizations Act

prohibits the trial court from transferring or interfering with the property rights of a

limited liability company. See Tex. Bus. Orgs. Code Ann. § 101.106(b). In issue

two, Michele complains that the trial court’s erroneous award of SCS’s equipment

to Damon substantially diminished SCS’s value because SCS did not have the

necessary machinery, equipment, and tools to bid or work on any projects. Michele

30 argues the trial court’s finding that these assets did not belong to SCS is contrary to

Damon’s testimony, lacks evidentiary support, and is so against the overwhelming

weight of the evidence as to be manifestly unfair. Michele contends the evidence

shows the assets belong to SCS and should have been included in the trial court’s

award of SCS to her.

When the characterization of property is at issue in a divorce proceeding, the

trial court is required to presume that any property possessed by either spouse during

the marriage is community property. Moroch, 174 S.W.3d at 856; In re Marriage of

Collier, 419 S.W.3d 390, 402–03 (Tex. App.—Amarillo 2011, no pet.). To

overcome the community presumption, a spouse claiming the specific property is

not part of the community must trace the property and establish the time and means

by which the spouse obtained possession of the property. In re Marriage of Collier,

419 S.W.3d at 403.

SCS is a limited liability company, and as such, is a legal entity separate from

its members. See Sherman v. Boston, 486 S.W.3d 88, 94 (Tex. App.—Houston [14th

Dist.] 2016, pet. denied). Damon, as a member of SCS, does not have an interest in

any specific property of the company. See Tex. Bus. Orgs. Code Ann. § 101.106(b).

Property owned by a limited liability company is neither community property nor

the separate property of its members. See id. § 101.106(a)–(a-1); Mandell v.

Mandell, 310 S.W.3d 531, 539 (Tex. App.—Fort Worth 2010, pet. denied). The

31 business property that is subject to division in a divorce is the interest in the limited

liability company and not the company’s specific assets. Tex. Bus. Orgs. Code Ann.

§ 101.106(a-1) (noting membership interest may be community property), (b) (LLC

member does not have interest in any specific company property); In re Marriage of

Collier, 419 S.W.3d at 403. Additionally, property acquired on the credit of the

community is community property. In re Marriage of Collier, 419 S.W.3d at 403

(citation omitted).

Michele contends the trial court erred by including the following SCS

property in the community estate: the Kubota M56 front loader tractor, Kubota

M1489 front loader tractor, all tools, 2018 GMC Denali pickup, 2018 Dodge Ram

3500 pickup, 2011 Kubota UTV, 2018 Kubota lawnmower, 2019 John Deere tractor,

2011 golf cart, scuba diving gear, and proceeds from the sale of the airplane. Michele

argues that SCS’s financial statements and tax return show the machinery and

equipment awarded to Damon were assets of SCS, and McClure’s report shows her

valuation of SCS was based on SCS’s property.

SCS’s financial statements do not specifically identify any machinery or

equipment, and the tax return’s depreciation and amortization report only identifies

a 2018 GMC Sierra as a vehicle used more than 50% in a qualified business use.

Michele’s Inventory and Proposed Division of Property identified the following

property as subject to division: proceeds from the sale of the airplane, 2019 John

32 Deere tractor, 2018 GMC Denali pickup, 2018 Dodge Ram 3500 pickup, Kubota

lawnmower, 2011 Kubota UTV, and golf cart. Damon’s inventory and Amended

Proposed Division lists the Galveston home as community property as well as the

2018 GMC Denali pickup, 2018 Dodge Ram 3500 pickup, 2011 Kubota UTV, 2018

Kubota lawnmower, 2019 John Deere tractor, M56 Kubota, 2011 golf cart, Kubota

1489 front loader tractor, and proceeds from the sale of the airplane. Damon’s

inventory also lists SCS’s business interests, which includes multiple vehicles,

equipment, and tools.

During trial, Michele explained that in her bankruptcy she listed SCS’s value

as $457,000, which was the cash in the company, excluded any accounts receivables,

and added the value of all SCS’s equipment and assets, which were in their personal

names, to their community property. Michele testified Damon took the Kubota UTV,

lawn mower, Kubota lawn tractor, his truck, and tools, and she explained that the

Kubota tractor and all the vehicles SCS uses were in Damon’s name, but she did not

know if the Kubota UTV was in his name. Although Michele argues McClure listed

and valued SCS’s machinery, equipment, furniture, fixtures, vehicles, and leasehold

improvements in determining the fair market value of SCS and noted that valuation

was based on tangible assets, McClure’s report does not list the specific machinery

and equipment she considered in her valuation. Additionally, McClure’s valuation

notes that it is based on tangible assets and assumes that all necessary fixed assets

33 are included in the transaction, but she states she made no attempt to verify title or

status of ownership to the assets.

Damon explained he sold the airplane about a year before the trial because it

required expensive avionic upgrades, and there were costs associated with the sale,

which included hanger fees and maintenance. Damon testified that he would like to

have his personal tools that he left at the Imperial Oaks Property, and he valued the

tools at approximately $1,500. Damon also testified that he had to purchase new

tools and equipment. Damon further testified that he has underwater diving gear and

suits that are his personal items even though he also used the gear for work.

Based on our review of the record, Michele failed to offer evidence regarding

the means by which the parties obtained possession of the airplane, vehicles,

equipment, and tools she complains about. See In re Marriage of Collier, 419

S.W.3d at 404. Consequently, we conclude that Michele failed to meet the burden

of overcoming the statutory presumption that the complained of property possessed

during the marriage was community property. See id.; Moroch, 174 S.W.3d at 855.

Additionally, the parties’ inventories and proposed division of property

characterized the property as community property. Based on the record before us,

we conclude the trial court did not abuse its discretion by awarding the complained

of assets to Damon because there is some evidence of a substantive and probative

character to support the division and based on that evidence, the trial court’s decision

34 was reasonable. See Butnaru, 84 S.W.3d at 211; Murff, 615 S.W.2d at 698; Hinton,

433 S.W.3d at 193. We overrule issues one and two.

In issue three, Michele complains the trial court erred by attributing the value

of the Galveston Home to her because she and Damon gifted that real property to

their daughter. Michele complains the trial court could not award the Galveston

Home to her because it was not her separate property or part of the community estate,

and the trial court erred by including the $280,000 purchase price on her side of the

property division ledger. Michele argues the trial court’s mischaracterization of the

Galveston Home as community property materially affected the just and right

division of the community estate. Michele further argues that Damon offered no

evidence to overcome the presumption of the property being a gift to their daughter.

The record shows that during trial, Michele’s attorney agreed that the

$280,000 for the Galveston Home should be included as one of Michele’s assets in

the property division, and her inventory and proposed division of property includes

the Galveston Home as community property that should be awarded to her. Damon’s

Inventory and Amended Proposed Division also lists the Galveston Home as

community property. The evidence before the trial court also showed that in 2019,

Damon received $968,816 in distributions from SCS and Michele received

$1,587,432 in distributions, which included $279,362 for the purchase of the

Galveston Home. Also, in her bankruptcy filing, Michele disclosed that in 2019, she

35 received $415,129 in distributions from SCS, which included the money to purchase

the Galveston Home.

Michele testified that when she purchased the Galveston Home in July 2019,

she did not discuss the purchase with Damon. Damon testified that he did not

approve the purchase of the Galveston Home, and he asked the trial court to either

impose a constructive trust on the home or consider it as part of his waste claim.

While Michele testified that she used proceeds from her individual Merrill Lynch

account to purchase the Galveston Home, she also testified that she transferred

money from her individual Merrill Lynch account into SCS’s checking and then into

her personal account to pay her personal expenses.

The trial court found that during the marriage, Michele used community funds

to gift their daughter the Galveston Home without Damon’s consent or agreement

and that the transfer did not benefit the community estate. The trial court also found

Michele’s trial testimony was not credible and considered that Michele committed

fraud on the community during the marriage. As the sole judge of the credibility of

the witnesses and weight to be given their testimony, the trial court was free to

disbelieve Michele’s testimony regarding her purchase of the Galveston Home. See

Murff, 615 S.W.2d at 700. We conclude the trial court did not abuse its discretion by

including the Galveston Home in the division of the community estate and awarding

Michele the Galveston Home because there is some evidence of a substantive and

36 probative character to support the division and based on that evidence, the trial

court’s decision was reasonable. See Butnaru, 84 S.W.3d at 211; Murff, 615 S.W.2d

at 698; Hinton, 433 S.W.3d at 193. We overrule issue three.

In issue four, Michele argues the trial court erred by entering a judgment

against her for $300,000 to equalize the division of community assets because the

trial court had already made an unequal division in Damon’s favor. Michele

contends the $300,000 judgment against her was detrimental and had no

justification. Michele explained that Damon alleged she committed fraud on the

community by purchasing the Galveston Home, but she argues that the evidence

does not support the trial court’s finding that she committed actual fraud on the

community. Michele also argues there is no evidence of fraud by her or that she

breached her fiduciary duty to the community.

“A fiduciary duty exists between a husband and a wife as the community

property controlled by each spouse.” Puntarelli v. Peterson, 405 S.W.3d 131, 137

(Tex. App.—Houston [1st Dist.] 2013, no pet.); Zieba v. Martin, 928 S.W.2d 782,

789 (Tex. App.—Houston [14th Dist.] 1996, no writ) (op. on reh’g). Each spouse

owns an undivided one-half interest in all community assets and funds regardless of

which spouse has control, and a relationship of trust and confidence exists which

requires that a spouse’s disposition of community property be fair to the other

spouse. Massey v. Massey, 807 S.W.2d 391, 401–02 (Tex. App.—Houston [1st

37 Dist.] 1991, writ denied). The managing spouse has the burden to prove that her

disposition of community property was fair, and the trial court may consider a

spouse’s disposition when making a just and right division. Slicker v. Slicker, 464

S.W.3d 850, 861–62 (Tex. App.—Dallas 2015, no pet.); Massey, 807 S.W.2d at 402

(citations omitted).

A claim that a spouse committed fraud on the community must be asserted for

consideration in the trial court’s just and right division of the community estate. Chu

v. Hong, 249 S.W.3d 441, 444–45 (Tex. 2008). The evidence presented regarding

fraud on the community is relevant to the property division, and the trial court may

consider a wrong by one spouse to justify an unequal division of property. See

Schlueter v. Schlueter, 975 S.W.2d 584, 588 (Tex. 1998) (citation omitted);

Markowitz v. Markowitz, 118 S.W.3d 82, 90–91 (Tex. App.—Houston [14th Dist.]

2003, pet. denied) (plurality on reh’g). Fraud is presumed when one spouse disposes

of the other spouse’s interest in community property without the other spouse’s

knowledge or consent. Cantu v. Cantu, 556 S.W.3d 420, 427 (Tex. App.—Houston

[14th Dist.] 2018, no pet.). The presumption can arise by evidence of specific

transfers or gifts of community assets outside of the community and by evidence that

community funds are unaccounted for by the spouse in control of those funds. Id.

Once the presumption arises, the burden of proof shifts to the disposing spouse to

prove the fairness of the disposition of the other spouse’s one-half community

38 ownership. Id.; Puntarelli, 405 S.W.3d at 138. While a spouse may make moderate

gifts for just causes to persons outside the community, an excessive gift may be set

aside as a constructive fraud on the other spouse, and no dishonesty of purpose or

intent to deceive is required to establish constructive fraud. Puntarelli, 405 S.W.3d

at 138–39; Mazique v. Mazique, 742 S.W.2d 805, 808 (Tex. App.—Houston [1st

Dist.] 1987, no writ).

When the trial court makes a finding of fraud, it must determine the value by

which the community estate was depleted as a result of the fraud on the community

and the amount of the reconstituted estate. Tex. Fam. Code Ann. § 7.009(b); Cantu,

556 S.W.3d at 427. The reconstituted estate is the total value of the community estate

that would have existed had the fraud not occurred. Tex. Fam. Code Ann. § 7.009(a).

A trial court can achieve a just and right division of the community estate by

awarding a disproportionate share of the remaining community assets to the wronged

spouse or by awarding a money judgment to the wronged spouse against the spouse

who committed fraud, or a combination of both. Id. § 7.009(c); see Murff, 615

S.W.2d at 699.

In his First Supplemental Petition to Petitioner’s Third Amended Petition for

Divorce, Damon alleged that during the divorce proceeding and in violation of the

Montgomery County’s First Amended Standing Order Regarding Children, Pets,

Property and Conduct of the Parties, Michele breached her fiduciary duty and

39 committed fraud by purchasing the Galveston Home in their daughter’s name with

community property funds. During trial, Michele testified that when she purchased

the Galveston Home for $279,361, she did not discuss the purchase with Damon,

and Damon testified that he did not approve the purchase of the Galveston Home.

Michele testified that she did not know she was under standing orders from

Montgomery County when she made the purchase. Michele also testified that she

paid the expenses on the home, and the property taxes were paid directly by SCS

and written off as a distribution. Damon testified that Michele spent approximately

$315,000 on the Galveston Home’s purchase, improvements, and maintenance.

As the factfinder, the trial court had the exclusive right to exercise its

discretion by believing that Michele did not have Damon’s knowledge or consent to

use community property to purchase the Galveston Home. See Murff, 615 S.W.2d at

700. We conclude the evidence does not conclusively establish that as the managing

spouse, Michele purchased the Galveston home with Damon’s knowledge or consent

or that the evidence the trial court relied on to conclude Michele did not have

Damon’s knowledge or consent is so weak it is outweighed by the greater weight

and preponderance of the evidence admitted at trial. See Dow Chem. Co., 46 S.W.3d

at 242. We further conclude the evidence does not conclusively establish that

Michele disposed of community property in a manner that is fair to Damon or that

the evidence the trial court relied on to conclude Michele did not dispose of

40 community property in a manner that was fair to Damon is so weak it is outweighed

by the greater weight and preponderance of the evidence admitted at trial. See id.;

see also Slicker, 464 S.W.3d at 862; Massey, 807 S.W.2d at 401.

In making a just and right division, the trial court could have considered the

evidence that was presented showing that Michele committed fraud on the

community and breached her fiduciary duty, and after accounting for the $300,000

judgment, the trial court then awarded Damon slightly more than 50% of the

community estate. We conclude the trial court did not abuse its discretion by finding

that part of the just and right division included awarding Damon a $300,000

judgment with interest against Michele because there is some evidence of a

substantive and probative character to support the division and based on that

evidence, the trial court’s decision was reasonable. See Butnaru, 84 S.W.3d at 211;

Murff, 615 S.W.2d at 698; Hinton, 433 S.W.3d at 193. We overrule issue four.

In issue five, Michele contends the trial court abused its discretion by entering

an unfair division of property in Damon’s favor. Michele explained that she had less

education, work experience, earning capacity, and business experience than Damon,

and as the innocent spouse, she would have received substantially greater benefits

had the marriage continued. Michele also explained that she suffered Damon’s

emotional and physical abuse, tolerated his alcoholic rages, and was the victim of

41 his adultery and intentional acts to damage SCS. Michele maintains that the trial

court failed to divide the marital estate in a just and right manner.

During the trial, the trial court considered evidence about the non-exclusive

factors that a judge is to consider in determining a just and fair property division,

including fault in the breakup; the spouses’ education and work experience; their

earning capacities, business experience, and business opportunities; their age and

health; the current disparity in their income; the nature of the community property;

the size of the separate estate; and the benefit the spouse not at fault would have

received had the marriage continued. See Murff, 615 S.W.2d at 698; Villalpando v.

Villalpando, 480 S.W.3d 801, 807 (Tex. App.—Houston [14th Dist.] 2015, no pet.)

(citation omitted). The judge had the opportunity to see both parties testify and to

judge their credibility, and the judge found Michele’s testimony was not credible.

Under these circumstances, we conclude the trial court did not abuse its

discretion in awarding Damon a disproportionate share of the community estate

because the trial court had sufficient information to exercise its discretion and did

not divide the community estate in a manner that is manifestly unjust or unfair. See

Murff, 615 S.W.2d at 698–99; Villalpando, 480 S.W.3d at 807. We overrule issue

five.

In issue six, Michele challenges the trial court’s findings concerning the

division of the community estate, alleging there is legally and factually insufficient

42 evidence to support the findings. Michele argues the evidence does not support the

trial court’s finding that Damon needed future support because he left the marriage

with over $1,075,000 from his Merrill Lynch account, set up a competing business,

and had years of experience in the concrete renovation and construction business. In

making its determination of a just and right division, the trial court found that it

considered Damon’s need for future support. We focus on the whether the trial

court’s finding was reasonable based on the evidence admitted at trial. As the party

who complains about the adverse finding, Michele must establish that either the

evidence in the trial court conclusively established Damon did not need future

support, or that the evidence the trial court relied on to conclude Damon needed

future support is so weak it is outweighed by the greater weight and preponderance

of the evidence admitted at trial. See Danner, 2020 WL 6325725, at *5, 7.

The trial court heard evidence that there had been a disparity in earning power,

and that in 2019 and 2020, Damon had no income. The trial court heard Damon

testify that although he created TSR, he had to wait until the divorce was finalized

to conduct business because of the alleged noncompete agreement. The trial court

also considered Damon’s testimony that he needed money to reestablish himself

because he lost his earning capacity due to the alleged noncompete agreement and

because Michele had “badmouthed” him in the industry. We conclude the is legally

and factually sufficient. The evidence does not conclusively establish that Damon

43 did not need future support and the evidence the trial court relied on to conclude that

Damon’s needs for future support was a factor in making a just and right division is

not so weak that it is outweighed by the greater weight and preponderance of the

evidence admitted at trial. See id.

Michele also complains about the trial court’s findings that her removal of the

divorce and protective order cases to bankruptcy court and her attempt to prevent

the cases from being returned to state court was done to avoid the divorce court’s

jurisdiction and forum shop and caused the parties to expend unnecessary expenses

and attorney’s fees. Michele argues she was justified in filing bankruptcy, and

Damon presented no evidence she was forum shopping or attempting to avoid

discovery.

Damon testified that he believed Michele fraudulently filed bankruptcy after

spending excessively and that he had to pay approximately $75,000 in attorney’s

fees to have his divorce case remanded back to state court. He also explained that

Michele failed to cooperate with the litigation and discovery requests before filing

bankruptcy, and her behavior hindered the process and caused him to incur excess

attorney’s fees. The trial court considered evidence that the bankruptcy court found

that forum shopping was an issue in Michele’s bankruptcy case because the removal

of a property division incident to a divorce to a Federal Bankruptcy Court was not a

normal or typical occurrence. Michele agreed that the bankruptcy court found that

44 forum shopping was an issue but claimed she filed bankruptcy because she tried to

stop Damon’s attorney from getting attorney’s fees. Michele testified that she filed

bankruptcy before she had to turn over the native Quickbooks and before two SCS

employees could be deposed. Michele also testified that she filed a motion for

reconsideration of the remand order, which was denied.

We conclude the evidence does not conclusively establish that Michele’s

removal of the divorce and protective order cases to bankruptcy court and her

attempt to prevent the cases from being returned to state court was not done to avoid

the divorce court’s jurisdiction and forum shop and did not result in unnecessary

expenses and attorney’s fees. See id. We further conclude that the evidence the trial

court relied on to conclude that Michele’s removal to bankruptcy court and her

attempt to prevent the cases from being returned were factors in making a just and

right division is not so weak it is outweighed by the greater weight and

preponderance of the evidence admitted at trial. See id.

Michele challenges the trial court’s finding that Damon did not sign or consent

to a nondisclosure of SCS’s confidential information. Michele testified that she had

Damon’s consent to cut and paste a copy of his electronic signature on the

Regulations Hoffman prepared, which did not contain any noncompete, non-

solicitation, or confidentiality clauses.Michele also testified that she created the

Employment Noncompetition and Confidentiality Agreement in 2010 and backdated

45 it to 2001, and she cut and pasted Damon’s electronic signature on the agreement

with his permission. Michele explained that in addition to Damon’s 49%-member

interest in SCS, he received a $60,000 yearly salary as consideration for signing the

agreement.

Damon explained that he never saw, signed, or authorized Michele to sign a

document that would prevent him from competing or soliciting business or clients,

and he never received a $60,000 salary from SCS as compensation for signing the

alleged noncompete agreement. Damon testified that the noncompete agreement

indicates it was created in 2001, but it contains the Imperial Oaks property’s address,

which they acquired in 2008. Damon explained he would never have signed the

agreement because it made no sense when he provided the knowledge and

experience to SCS. Hughes testified that SCS’s original Regulations that were

created in 2002 did not contain noncompete or the non-solicitation language and that

the altered document containing the noncompete and non-solicitation language was

created in 2018 and stored in a folder titled “divorce[.]”

As the factfinder, the trial court had the exclusive right to exercise its

discretion by believing Damon’s testimony that he never signed the agreement. See

Murff, 615 S.W.2d at 700. We conclude the evidence does not conclusively establish

that Damon signed the agreement or that the evidence the trial court relied on to

conclude Damon did not sign or consent to the agreement is so weak it is outweighed

46 by the greater weight and preponderance of the evidence admitted at trial. See Dow

Chem. Co., 46 S.W.3d at 242. On appeal, Michele argues that Damon’s consent is

irrelevant because he has a common law duty of nondisclosure. Based on our review

of the record, this argument is not preserved for our review because Michele did not

make the argument at trial. See Tex. R. App. P. 33.1.

Michele also challenges the trial court’s findings that she committed fraud on

the community during the marriage and breached her fiduciary duty. We have

already explained in issue four that the evidence was sufficient to support the trial

court’s findings that Michele committed fraud on the community and breached her

fiduciary duty by using community funds to purchase the Galveston Home without

Damon’s knowledge or consent and that by doing so, she did not dispose of

community property in a manner that was fair to Damon. We overrule issue six.

Having overruled each of Michele’s issues, we affirm the trial court’s judgment.

AFFIRMED.

_________________________ W. SCOTT GOLEMON Chief Justice Submitted on June 16, 2022 Opinion Delivered November 17, 2022

Before Golemon, C.J., Kreger and Johnson, JJ.