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What is a fiduciary duty and do I owe one to my soon-to-be-ex-spouse?
Generally speaking, a fiduciary is one who owes another a duty of integrity and fidelity, such as a lawyer to her client. See generally Lee v. Hasson, 286 S.W.3d 1 (Tex. App.—Houston [14th Dist.] 2007, pet. denied). Texas courts have found these relationships exist “where one person trusts in and relies upon another, whether the relation is a moral, social, domestic or merely personal one.” Id. A breach of this duty can be its own cause of action.
Husbands and wives owe fiduciary duties to one another concerning their community property. See generally In re Moore, 890 S.W.2d 821 (Tex. App.—Amarillo 1994, no writ). A breach of this duty between spouses—for example, when a husband uses community property to buy lavish gifts for his mistress without his wife’s knowledge—is called fraud on the community and can be part of a suit for divorce. Id. While one spouse’s secretive disposal of community assets might not exactly be considered fraudulent, “such conduct tends to deceive the other spouse or violate confidences that exist as a result of the marriage.” Id. A trial court will consider whether a spouse has committed fraud on the community in ordering a just and right division of a couple’s community property and may award an aggrieved spouse a larger share or the community property. Usually, the fiduciary duty between spouses terminates upon divorce when each side is represented by an attorney—an exception being for property one ex-spouse receives after the divorce that rightfully belongs to the other. See Toles v. Toles, 113 S.W.3d 899 (Tex. App.—Dallas 2003, no pet.) and see Tex. Fam. Code § 9.011(b) (2013).
A particular egregious breach of the fiduciary duties between spouses occurred in Vickery v. Vickery, 999 S.W.2d 342 (Tex. 1999). There, the husband told his wife that they needed to divorce in order to protect their assets because he was being sued. Without his wife’s consent, the husband had an attorney file a petition for divorce on her behalf. Meanwhile, the husband settled his lawsuit but didn’t tell his wife. The husband pressed on with the divorce—all the while telling his wife that this was to protect their assets—and the wife reluctantly agreed to the divorce decree that gave her less than 10% of the couple’s community assets. Unfortunately, the home that the wife and their young daughter were living in was determined to be the husband’s separate property. Shortly after the ink on their divorce decree was dry, the husband married the wife’s best friend and initiated proceedings to have his ex-wife and daughter evicted from their home.
Naturally, the trial court found that the ex-husband had breached his fiduciary duty during the marriage. The jury awarded the ex-wife $9,000,000.