Schlueter v. Schlueter

975 S.W.2d 584 · 1998

Facts

Richard and Karen Schlueter married in 1969. In December 1992, Mr. Schlueter invested community funds in emus, then sold his interest to his father for $1,000, though it was worth at least $10,000, without Mrs. Schlueter's knowledge. Shortly before filing for divorce, Mr. Schlueter received a $30,360.41 early retirement check, which he gave to his father for deposit, and his father then wrote himself a check for $12,565. About a week later, Mr. Schlueter filed for divorce. Mrs. Schlueter counterclaimed for divorce and brought independent tort claims against her husband and father-in-law for fraud, breach of fiduciary duty, and conspiracy, alleging they deprived the community estate of assets.

Issue

Does an independent tort cause of action exist between spouses for damages to the community estate due to fraud on the community? What remedies are available to a spouse alleging fraud on the community committed by the other spouse?

Holding

No, there is no independent tort cause of action between spouses for damages to the community estate for fraud on the community. A wronged spouse has an adequate remedy through the “just and right” property division upon divorce. The judgment against the husband for actual and exemplary damages is reversed, and the case is remanded for a new division of the marital estate.

Rule

The "just and right" standard for property division upon divorce (Tex. Fam.Code Ann. § 7.001) is the sole method to account for and divide community property. This standard allows for a disproportionate division of assets and liabilities, considering factors like fraud on the community, which justifies an unequal division. A money judgment can be awarded to one spouse against the other to achieve an equitable division, recouping the value of lost community property, but it is not "separate damages" for an independent cause of action. While exemplary damages are not recoverable for fraud on the community as an independent tort, the heightened culpability of actual fraud can be considered by the trial court in the property division to effect a "just and right" outcome.

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