Introduction

I conducted a mediation recently that was successful, in my estimation, for one reason and one reason only. Preparation!

This case involved various issues, but most prevalent were the issues of:

1. Constructive fraud for money expended on one party's adult children, and
2. Reimbursement of the community estate for expenditures made toward the separate estate of a party.

Constructive Fraud Claim

Regarding the constructive fraud claim, counsel defending the claim had case law at the ready, which laid out the elements necessary for a successful waste claim. Those elements are (1) the size of the gift in relation to the total size of the community estate; (2) the adequacy of the estate remaining to support the other spouse in spite of the gift; and (3) the relationship of the donor to the donee. Marshall v. Marshall, 735 S.W.2d 587, 594 (Tex.App. – Dallas 1987, writ ref'd n.r.e.)

In this case, the constructive fraud claim was based on one party's payment of college expenses for children from a prior marriage. If constructive fraud is adequately pled, the burden falls on the donor of the gift to prove the gift of his or her share of the community was fair. Id.

The lawyer defending the fraud claim came prepared. With the above case law being provided, the lawyer bringing the constructive fraud claim recognized that they had an uphill climb, at best, in being successful with this cause of action and was able to convince their client of the same.

Reimbursement Claim

A common reimbursement claim is for the reduction of the principal amount owed on a mortgage secured by a lien on real property owned by a spouse prior to marriage. However, the reimbursement claim in this case was for something you don't see a lot: the payment of taxes and insurance on the property. In Penick v. Penick, 783 S.W.2d 194, 196-198, the court held that a litigant may seek reimbursement to the community estate for the interest, taxes, and insurance paid on a party's separate property residence, to the extent those expenditures were greater than the benefit received by the contributing estate.

Again, where there was pushback, counsel had at the ready, caselaw under Texas Family Code 3.402(c) that allowed for reimbursement for the payment of the above.

The payment of interest, taxes, and insurance are areas oSen overlooked in pleadings seeking reimbursement. While there is no guarantee that the moving party will be successful in bringing these claims, they certainly will not be successful if they are never pled.

This case was destined for trial. But by virtue of counsel's diligence and foresight in understanding their case, being prepared to present their case at trial, AND being prepared to present their case at mediation, the case seeled, saving the parties scores of thousands of dollars.