Irma Lopez v. Arturo Rabago

Affirmed and Memorandum Opinion filed July 16, 2024.

In The

Fourteenth Court of Appeals

NO. 14-23-00151-CV

IRMA LOPEZ, Appellant

V.
ARTURO RABAGO, Appellee

On Appeal from the 306th District Court
Galveston County, Texas
Trial Court Cause No. 20FD0959

MEMORANDUM OPINION

Irma Lopez appeals the final decree of divorce dissolving her marriage to
Arturo Rabago. In four issues, Lopez contends that the trial court abused its
discretion in (1) dividing the community estate equally between the parties, despite
allegations of fraud on the community and the existence of reimbursement claims;
(2) entering orders relating to the terms of sale and interim management of the
community property real estate that unjustly favored Rabago and are
unenforceable; (3) confirming a one-half interest in certain property as Rabago’s
separate property; and (4) ordering Lopez to deliver documents to Rabago that are
reportedly not be in her possession. We affirm.

Background

Lopez and Rabago were married on November 1, 2007. Although no
children were born of this marriage, both parties had children from prior
relationships. Each party owned real property at the time of their wedding, and
they acquired several properties together during the marriage. Rabago granted a
gift deed to a one-half interest in one of his separate properties (“Bayou Shore”) to
Lopez during the marriage. Lopez’s separate property was sold to her brother
during the marriage to retire a community debt. In the petition and counter-petition
for divorce, the parties each raised fraud claims and asserted claims for
reimbursement and waste. These claims will be discussed in more detail below.

In its final decree, the trial court recognized certain property interests as
separate property. Specifically, the court recognized Rabago’s separate property as
including real property on Fannin, Avenue M ½, and Highway 6. The court further
recognized that each party had a one-half separate property interest in the real
property on Bayou Shore. Each party was also recognized as having a separate
property interest in the funds in their own retirement account that accrued prior to
the marriage.

The parties’ community property included real property on Harris Way and
23rd Street, as well as an interest in a Missouri timeshare. The parties also owned
several vehicles. The court ordered the community property real estate sold, with
each party receiving half of the proceeds. The court awarded Lopez three vehicles
and Rabago two vehicles. The court also entered detailed procedures for the sale of
the community property real estate and directed Rabago to manage the properties
in the interim, collect rent, maintain the properties, pay mortgages and taxes, and
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account for all income and expenditures. The court awarded each party the
furniture, personal items, and cash in their possession and all funds held in
accounts in their name.

Lastly, the court ordered Lopez to turn over Rabago’s passport and
naturalization documents as well as the naturalization documents of Rabago’s
father, which Lopez testified she had in her possession. The trial court did not
explicitly mention either party’s fraud, reimbursement, or waste claims in the final
decree. No party requested, and the trial court did not file, findings of fact or
conclusions of law.

I. Fraud, Reimbursement, and Waste

As stated, in her first issue, Lopez contends that the trial court abused its
discretion in dividing the community estate equally between the parties despite
allegations of fraud on the community and the existence of reimbursement claims.
Lopez insists the trial court should have instead awarded her a disproportionate
share of the community estate. We will begin by setting forth the general law
governing our analysis of this issue before turning to the fraud allegations and then
the claims for reimbursement.

A. Governing Law

In a divorce decree, the trial court shall order a division of the parties’
community estate “in a manner 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 § 7.001; Barnett v. Barnett, 67 S.W.3d 107, 111 (Tex. 2001). Trial courts
have wide discretion in determining a just and right division. Schlueter v.
Schlueter, 975 S.W.2d 584, 589 (Tex. 1998). When circumstances justify, this
standard may result in a disproportionate division of assets and liabilities. Id. at

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589–90. Indeed, the property division need not be equal; however, it must be
equitable, and there must be some reasonable basis for an unequal division of the
property. E.g., Murff v. Murff, 615 S.W.2d 696, 698–99 (Tex. 1981); Boothe v.
Boothe, 681 S.W.3d 916, 923 (Tex. App.—Houston [14th Dist.] 2023, no pet.).

Claims for waste, fraudulent transfer of community property, or other
damage to community property belong to the community itself and also may be
considered in the trial court’s division. See Chu v. Hong, 249 S.W.3d 441, 444–45
(Tex. 2008); see also Schlueter, 975 S.W.2d at 589; K.T. v. M.T., No. 02-14-
00044-CV, 2015 WL 4910097, at *12 (Tex. App.—Fort Worth Aug. 13, 2015, no
pet.) (mem. op.) (“In addition, a court may consider one spouse’s wrongful
dissipation of community assets.”).

Reimbursement is an equitable right that arises when the funds or assets of
one estate are used to benefit and enhance another estate without the first estate
receiving some benefit. Boothe, 681 S.W.3d at 924. Waste, or constructive fraud, is
one form of fraud on the community that occurs when a spouse wrongfully
depletes the community estate of assets without the other spouse’s knowledge or
consent. See In re Marriage of Walzel, No. 14-16-00637-CV, 2018 WL 614767, at
*3–4 (Tex. App.—Houston [14th Dist.] Jan. 30, 2018, no pet.) (mem. op.) (citing
Schlueter, 975 S.W.2d at 589); see also Cantu v. Cantu, 556 S.W.3d 420, 427
(Tex. App.—Houston [14th Dist.] 2018, no pet.) (“Fraud is presumed whenever
one spouse disposes of the other spouse’s one-half interest in community property
without that other spouse’s knowledge or consent.”). Waste requires disposal of
community assets for non-community purposes. Giesler v. Giesler, No. 03-08-
00734-CV, 2010 WL 2330362, at *4 (Tex. App.—Austin June 10, 2010, no pet.)
(mem. op.). A spouse commits actual fraud against the other spouse’s interest in
the community estate when the spouse transfers community property or expends

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community funds for the primary purpose of depriving the other spouse of the use
and enjoyment of the assets involved in the transaction. Boothe, 681 S.W.3d at
924.

Legal sufficiency is a relevant factor, rather than an independent basis for
reversal, in determining whether the trial court abused its discretion. Nguyen v.
Pham, 640 S.W.3d 266, 274 (Tex. App.—Houston [14th Dist.] 2021, pet. denied).
A trial court does not abuse its discretion if there is some evidence of a substantive
and probative nature to support the decision. Id. When, as here, the trial court does
not file findings of fact or conclusions of law, we imply all facts necessary to
support the trial court's ruling that are supported by the evidence. Moncrief Oil
Int’l Inc. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013). When examining a
legal-sufficiency challenge, we review the evidence in the light most favorable to
the challenged finding and indulge every reasonable inference that would support
it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We credit favorable
evidence if a reasonable factfinder could and disregard contrary evidence unless a
reasonable factfinder could not. Id. at 827. Evidence is legally sufficient if it would
enable reasonable and fair-minded people to reach the conclusion under review. Id.

B. Fraud Allegations

As stated, Lopez first contends that the trial court abused its discretion by
dividing the community estate without taking into account the fraud against the
community committed by Rabago. As also mentioned above, the trial court did not
make any express finding on the fraud claim. We therefore interpret Lopez’s
argument as asserting that she conclusively proved her fraud allegations, and the
trial court therefore abused its discretion in not considering them and not awarding
her a disproportionate share of the community estate.

In her brief, Lopez alleges generally that Rabago “hid community property
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income” from her. More specifically, she asserts that Rabago’s separate property
real estate earned rental income that he did not share with her. See generally
Williams v. Williams, 246 S.W.3d 207, 211 n.2 (Tex. App.—Houston [14th Dist.]
2007, no pet.) (“[W]hen separate property produces income, and that income is
acquired by a spouse during marriage, it is community property.”).

As Lopez points out, Rabago acknowledged at trial that he gave the rental
income from one of the properties to his son. Rabago explained that he did so
because his son ran the business at that property, which was a tire shop. Lopez
additionally alleges that Rabago hid other rental income from her and did not
deposit it into a joint bank account. Rabago testified regarding other rental income
from other properties and acknowledged that he did not put the money into any
bank account. He explained, however, that he shared the money with Lopez “many
times,” used it to take the two of them on trips to casinos and to Mexico, bought
trucks for the two of them, and used it to go to many parties. He also noted that he
paid for Lopez’s mother to come live with them and even bought a house for
Lopez’s mother to use. The evidence therefore demonstrates that, at least to an
extent, Rabago shared the rental proceeds from his separate properties with Lopez.

Additionally, despite Lopez’s repeated assertions in her brief that Rabago
hid the income from her, she cites no evidence that he did so. The mere fact that
Rabago did not share proceeds equally with Lopez, as she alleges, does not mean
that he committed fraud on the community absent evidence that he did so without
her knowledge or consent or otherwise failed to account for the funds. See, e.g.,
Boothe, 681 S.W.3d at 924; Miller v. Miller, No. 14-17-00293-CV, 2018 WL
3151241, at *6 (Tex. App.—Houston [14th Dist.] June 28, 2018, no pet.) (mem.
op.); Walzel, 2018 WL 614767, at *3–4; Cantu, 556 S.W.3d at 427. Accordingly,
Lopez has not established that she conclusively proved that Rabago committed

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fraud against the community or that the trial court erred in not awarding her a
disproportionate share of the marital estate based on the fraud allegation.

C. Reimbursement Claims

Lopez mentions two reimbursement claims—one asserting that she used her
separate property to benefit the community estate and one asserting that
community property funds were used to benefit Rabago’s separate estate.
Regarding the former, Lopez contends that after she and Rabago bought a
restaurant property, at least in part with money that they borrowed from her
brother, she gave her brother a piece of her separate property real estate in
exchange for cancelling the remainder of the debt. It is not entirely clear, however,
what amount of community debt Lopez is asserting she eliminated by giving her
brother the separate property. In his testimony, Rabago acknowledged that the
transaction occurred but asserted the value to the community estate was only about
$40,000. Other testimony appears to indicate that a second property owned jointly
by Lopez and Rabago was also given to her brother to retire this debt.

As for the alleged use of community funds to benefit Rabago’s separate
property, Lopez asserts that community funds were used to pay a mortgage and
taxes on Rabago’s separate property and that community property rental income
was used to make repairs on those properties. Lopez asserts in her brief that the
total of the rental income used to make repairs was over $1 million, but the cited
evidence does not support this amount or any particular dollar figure. When Lopez
was asked about the amount of the reimbursement claim, she stated that she did not
“have the amount.” Lopez also repeatedly acknowledged during trial that she did
not have receipts with her to demonstrate what bills were paid with community
funds. One exhibit admitted into evidence does appear to show that Lopez made
two payments for taxes due on one of Rabago’s separate properties, the total

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amount shown as paid being $2311. The source of these funds is not indicated in
the exhibit, just that Lopez was the person who made the payment.

In response to this issue, Rabago points out that he, too, had a
reimbursement or wasting claim against Lopez. Rabago based his claim on
evidence that while Lopez had sole management rights to certain community
property during the pendency of divorce proceedings, she used the rental income
for personal expenses—including taking extended family on a two-week vacation
to Acapulco and paying for her adult daughter’s car, insurance, and college
tuition—rather than paying the taxes and mortgage on the property itself or sharing
the proceeds with Rabago. Although Rabago alleged his wasting claim was worth
$209,000, like Lopez’s reimbursement claim, the amount of Rabago’s claim is not
clearly established by direct evidence. It is worth noting, however, that in the final
decree, the trial court ordered that past due taxes on certain property were to be
paid from Lopez’s share of the sale proceeds for that property.

Perhaps more importantly for our purposes, Lopez does not offer any
analysis regarding how the competing reimbursement or wasting claims figure into
the overall division of the marital estate. Lopez does not even mention Rabago’s
claim in her briefing, and she does not offer total values for the claims, the marital
estate, or the portions of the marital estate each party received. She likewise does
not offer record citations for these values.

Although the court did not make any explicit findings on the reimbursement
or wasting claims, it may well have considered the claims in making a just and
right division of property. See Chu, 249 S.W.3d at 444–45. Great latitude must be
given to a trial court in applying equitable principles to value such claims. See
Penick v. Penick, 783 S.W.2d 194, 198 (Tex. 1988); Marriage of O’Brien, 436
S.W.3d 78, 82 (Tex. App.—Houston [14th Dist.] 2014, no pet.). Such claims may

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also be offset against each other if the court determines that is appropriate.
O’Brien, 436 S.W.3d at 82–83. In the absence of analysis or values, however, it is
impossible to determine whether the trial court reached an equitable, just, and right
division of the marital estate as a whole. Id. To prevail on a complaint about the
division of property, an appellant has the burden of demonstrating based on
evidence in the record that the division was so unjust and unfair as to constitute an
abuse of discretion. Id. Lopez has not met her burden of demonstrating the trial
court abused its discretion in the division of property in this case. See id.
Accordingly, we overrule her first issue.

II. Real Property Management and Division

In her second issue, Lopez contends that the trial court erred in entering
orders relating to the terms of sale and interim management of the community
property real estate that unjustly favored Rabago and are unenforceable. As will be
discussed below, Lopez’s litany of complaints under this issue are generally not
supported by cogent analysis or legal authority. We decline to make Lopez’s
arguments for her. See Tex. R. App. P. 38.1(i) (“The brief must contain a clear and
concise argument for the contentions made, with appropriate citations to authorities
and to the record.”); see also Sklar v. Sklar, 598 S.W.3d 810, 827 (Tex. App.—
Houston [14th Dist.] 2020, no pet.) (holding argument that did not include
authority in support of assertion or cogent argument was inadequately briefed).

Regarding management of the properties, Lopez complains that the court’s
orders prevent her from having a say in property maintenance and repairs and deny
her the use of income from the properties prior to sale. Instead, the court’s orders
required Rabago to hold the rental proceeds from each property in an account that
was to be split evenly between the parties upon sale of the property. Lopez points
out that she previously had management rights to the property and contends that

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the evidence was insufficient to support a management switch. She also asserts, as
above, without citing any evidence, that Rabago had previously hidden rental
income from her, but she ignores the evidence that when she managed the
property, she failed to pay the taxes or mortgage or share the proceeds with
Rabago. The court indeed had a factual basis for switching management of the
companies, and Lopez does not make any other specific argument or cite any
relevant authority suggesting error in the court’s orders regarding management of
the properties. See Tex. R. App. P. 38.1(i); Sklar, 598 S.W.3d at 827.

Regarding the orders pertaining to the sale of the properties, Lopez asserts
that the orders erroneously fail to require the parties to accept an offer to purchase
at a price recommended by a real estate agent, although the orders do require that
the real estate agent set the listing price for the properties. She also asserts that
Rabago demonstrated at trial that he had no interest in coming to an agreement
with her, although it should be noted that the citation she offers is to Rabago’s
testimony that he had no interest in selling his property interests to Lopez but he
definitely wanted the properties sold. Lastly, Lopez contends that the trial court
abused its discretion in denying her a right to first refusal on the properties. Again,
however, Lopez does not offer any cogent legal analysis supporting these
complaints or cite any relevant authority. See Tex. R. App. P. 38.1(i); Sklar, 598
S.W.3d at 827. Finding no merit in any of Lopez’s complaints under her second
issue, we overrule that issue.

III. Bayou Shore Property

In her third issue, Lopez contends that the trial court abused its discretion in
confirming that a one-half interest in the Bayou Shore property was Rabago’s
separate property. It is undisputed that Rabago purchased Bayou Shore before the
marriage and that during the marriage, he gifted a one-half interest in the property

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to Lopez. This indicates that at the time of divorce each party had a separate
property right to a one-half interest in the property, and this is exactly what the trial
court confirmed in the final decree. See generally Tex. Fam. Code § 3.001
(explaining that separate property includes property owned by a spouse before
marriage or acquired during the marriage by gift, devise, descent, or as a recovery
for personal injuries sustained during the marriage); Nguyen, 640 S.W.3d at 271
(same).

Lopez, however, asserts that the trial court erred in recognizing Rabago had
a half-interest in Bayou Shore because during trial, the judge stated at one point
that she intended to award Lopez a three-quarter interest in the property, leaving
Rabago with only a one-quarter interest. Lopez, however, does not offer any
specific basis on which the court could have divested Rabago of one-quarter of his
separate property interest in Bayou Shore. See Pearson v. Fillingim, 332 S.W.3d
361, 364 (Tex. 2011) (“Certainly, a court cannot divest an owner of separate
property.”). Lopez seems to suggest at one point that the fact the parties
subsequently signed a deed of trust, using the property as collateral to secure a
loan, converted Rabago’s separate interest in the property into a community
interest yet did not do the same for Lopez’s separate interest, but she does not offer
any explanation or citation to the record or to authority supporting this contention.
See Tex. R. App. P. 38.1(i).

Lopez also suggests that the trial court improperly and prematurely cut off
the presentation of evidence regarding Bayou Shore, but she again does not offer
any explanation or authority for this point, nor did she make an offer of proof or
formal bill of exception in the trial court of what further testimony or documentary
evidence she would have liked to have presented on the matter. This argument
therefore was neither preserved nor properly briefed. See Tex. R. Civ. P. 33.1(a),

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33.8(i); Sklar, 598 S.W.3d at 826 (citing In re C.C.E., 530 S.W.3d 314, 322 (Tex.
App.—Houston [14th Dist.] 2017, no pet.) (holding party failed to preserve error
regarding complaint she did not have an opportunity to present evidence where
record did not demonstrate that party requested an opportunity, offered evidence
that was excluded, or made an offer of proof or bill of exception)). We overrule the
third issue.

IV. Turnover of Documents

In issue four, Lopez contends that the trial court abused its discretion by
ordering her to turn over certain documents to Rabago. These documents included
Rabago’s passport and naturalization papers and Rabago’s father’s naturalization
papers.

Lopez first argues that the evidence was insufficient to support the trial
court’s determination that she had the documents in her possession. Although
Lopez acknowledges that she testified at trial that she had the documents in her
possession, she points out that her attorney subsequently told the court at the entry
hearing that she was unable to find the documents. Normally, however, an
attorney’s statements must be under oath to be considered evidence, and here,
Lopez’s attorney’s statements were clearly not based on any personal knowledge.
See, e.g., Banda v. Garcia, 955 S.W.2d 270, 272 (Tex. 1997). We cannot agree that
the evidence was insufficient to support the conclusion that Lopez had the
documents in her possession when she expressly testified to that fact at trial and
there is no contradictory evidence in the record. See City of Keller, 168 S.W.3d at
822, 827.

Lopez also notes that the trial court did not include the order to turn over
these documents in a previous letter ruling that predated the final decree, although
the letter did state an intention to award Rabago any documents in his name. Lopez
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seems to be arguing that the trial court could not properly include anything in the
final decree that was not in the court’s short letter ruling, but she does not make
any cogent argument or cite any legal authority supporting this position. See Tex.
R. App. P. 38.1(i); Sklar, 598 S.W.3d at 827. Accordingly, we find no merit in
Lopez’s arguments under her third issue and overrule the issue.

We affirm the trial court’s final decree.

/s/ Frances Bourliot
Justice

Panel consists of Justices Bourliot, Zimmerer, and Spain.

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