WADHWA v. WADHWA (2025)

OPINION

Appellant Natalie Rose Wadhwa (“Natalie”) appeals a final divorce decree terminating her marital union to appellee Ankur Wadhwa (“Ankur”). In six issues we construe as five, Natalie argues that the trial court erred in (1) denying her motion for new trial, (2) awarding Ankur the exclusive authority concerning the joint managing conservatorship of their two children, (3) awarding Ankur child support, (4) finding there was no evidence of constructive fraud, and (5) appointing a receiver to sell the marital residence.

Because we conclude that the trial court erred when it denied Natalie's motion for new trial as to the parties’ conservatorship of their children, we reverse the portions of the final divorce decree concerning the children's conservatorship, including the award of child support to Ankur. Additionally, because we conclude that Natalie raised a presumption that Ankur committed constructive fraud on the community estate, and because we conclude that Ankur failed to offer evidence showing that these transactions were fair to the community estate, we reverse the trial court's division of the marital estate and the appointment of the receiver to sell the marital home. We remand for a new trial on the issue of the parties’ conservatorship of their two children, including the issue of child support, and for the trial court to exercise its discretion to divide the parties’ marital estate in accordance with this opinion. We affirm the remainder of the parties’ divorce decree.

I. Background

Natalie and Ankur married in 2007 and have two children. On October 8, 2021, Natalie filed her original petition for divorce, requesting that she and Ankur be appointed as the children's joint managing conservators and that she be awarded the exclusive right to designate the children's primary residence. On November 1, 2021, Ankur filed a counter petition for divorce, also requesting joint managing conservatorship but asking that he be awarded the exclusive right to designate the children's primary residence instead of Natalie.

Ankur's request for joint managing conservatorship in his live pleading, his first amended counter petition, sought a geographic restriction on his right to designate the children's primary residence to within Harris County, Texas. Natalie's fifth amended petition for divorce requested that (1) she be appointed the children's sole managing conservator with all the exclusive rights and duties of a parent conservator, as well as the exclusive right to designate the children's primary residence “without geographic restrictions”; or (2) in the alternative, that she and Ankur be appointed joint managing conservators with Natalie having the exclusive right to designate the children's primary residence.¹

The trial court preferentially set the parties’ trial to begin on February 13, 2023. On February 13, 2023, Natalie's counsel filed an emergency motion for continuance seeking a reset of trial. At a hearing on the motion for a continuance on the morning of trial, the trial court noted that Natalie's counsel was not present and that the emergency motion was filed by an attorney associated with lead counsel's law firm but did not address the availability of lead counsel herself.

The frustration is that [Natalie's] counsel, the entire law office hasn't comported with Rule 8 of the Texas Rules of Civil Procedure; and there is a designated counsel and if there is a designated counsel, that person should be made available if there's a preferential jury trial. And while I can empathize that that law office has designated a different counsel to take lead, well then the pleadings should reflect that designation; and that's certainly out of your control, but it is the Court's expression of its frustration ․ My frustration is how the pleadings don't reflect accurately what they should ․ I believe Petitioner has left the Court without an option. I have no counsel here present for the Petitioner․ [S]o for that reason I have to grant the continuance reluctantly. And I genuinely believe there has been gamesmanship happening. Petitioner is filing motions and conducting themselves in such a way to cause a delay in this case. That is being stated on the record so that you can relay that to all counsel at that law firm․ I am concerned and upset at [lead counsel's] lack of conduct and I guess failure to make this a precedence and importance. There has been no call from her office or herself, no attempt to obtain a ZOOM meeting ID to make herself present to articulate her inability to be here, even though she has been designated as lead counsel. It's a lack of respect for the judicial process, and, frankly, to her own client that her client has been paying and relying upon. There will be no additional discovery allowed during the pendency of this case. The Court will move earth and water to make this trial a precedence ․

On March 13, 2023, Natalie filed her live pleading—her sixth amended petition for divorce—after retaining new counsel. Natalie's sixth amended petition requested that (1) Natalie be appointed the children's sole managing conservator and Ankur the children's possessory conservator, with Natalie having the right to designate the children's primary residence “without geographic restrictions”; and (2) in the alternative, that she and Ankur be appointed joint managing conservators with Natalie having the right to designate the children's residence within Harris County and its contiguous counties.

Ankur filed a motion to strike Natalie's sixth amended petition, arguing that the trial court prohibited additional discovery on February 13, 2023, and thus “no party should be allowed to supplement or amend any pleadings, which necessitates further discovery.” The trial court struck only the portion of Natalie's live petition that requested joint managing conservatorship of her children, leaving only her request that she be appointed the children's sole managing conservator.

The parties’ competing claims for conservatorship of their two children were tried before a jury beginning on March 27, 2023. See Tex. Fam. Code Ann. § 105.002(a), (c)(1)(D). The trial court submitted a charge to the jury that asked the following two questions: (1) “Should [Natalie] be appointed the sole managing conservator of the children without a geographic restriction?” and the jury answered “No”; and (2) “Should [Natalie] and [Ankur] be appointed joint managing conservators of the children with [Ankur] having the exclusive right to designate the primary residence of the children with a geographic restriction of Harris County, Texas?” and the jury answered “Yes.”

The remaining issues, including the division of the marital estate, the parties’ rights as joint managing conservators, Natalie's claims for fraud on the marital estate, and the issue of child support were subsequently tried to the bench. See id. § 105.002(c)(2). The parties stipulated that the trial court would consider the evidence from the jury trial in reaching its rulings in the bench trial.

After the end of the bench trial, the trial court orally rendered judgment in Ankur's favor. Natalie then filed a motion for new trial, arguing in part that the trial court erred when it struck the portion from her live pleading requesting joint managing conservatorship with Natalie having the right to designate the children's primary residence and subsequently excluded a question on that request from the jury charge.

On July 20, 2023, the trial court entered a final decree of divorce on the basis that the marriage had become insupportable, naming the parties joint managing conservators, granting Ankur the right to designate the children's primary residence, and awarding Ankur the exclusive authority as to all rights concerning the conservatorship of their two children and $541.00 monthly in child support. The trial court also divided the marital estate, awarding Natalie and Ankur each fifty percent of the proceeds from the sale of the marital home and appointing a receiver to sell the home.

The trial court denied Natalie's motion for new trial and subsequently issued findings of fact and conclusions of law, providing in relevant part that it struck Natalie's request for joint managing conservatorship because the inclusion of a geographical restriction constituted a materially different request that surprised Ankur and on which Ankur would not be able to conduct discovery; that Natalie did not present any evidence of actual fraud or constructive fraud by Ankur; and that the parties’ home was not subject to partition in kind. This appeal followed.

II. Motion for New Trial

In her first issue, Natalie argues the trial court abused its discretion in denying her motion for new trial as to the parties’ conservatorship of the children. Specifically, Natalie argues the trial court erroneously struck her request for joint managing conservatorship from her live pleading and submitted a jury charge that prevented the jury from granting Natalie the right to designate the children's primary residence if she and Ankur were appointed as joint managing conservators. Natalie also argues she was entitled to a new trial court based on Ankur's improper jury arguments.

A. Standard of Review

We review a trial court's rulings on a motion for new trial and to strike a pleading amendment for an abuse of discretion. In re Marriage of Sandoval, 619 S.W.3d 716, 731 (Tex. 2021) (per curiam); State Bar of Tex. v. Kilpatrick, 874 S.W.2d 656, 658 (Tex. 1994) (per curiam); Ginn v. NCI Bldg. Sys., Inc., 472 S.W.3d 802, 837 (Tex. App.—Houston [1st Dist.] 2015, no pet.). A trial court abuses its discretion when its decision is unreasonable or arbitrary or when it rules without reference to guiding rules and principles. See Garcia v. Martinez, 988 S.W.2d 219, 222 (Tex. 1999) (per curiam).

In Texas, litigants enjoy a “liberal right” to modify their averments and pleadings at will and parties generally have a right to amend their pleadings freely. See In re City of Dallas, 445 S.W.3d 456, 462–64 (Tex. App.—Dallas 2014, orig. proceeding); In re Trident Steel Corp., 424 S.W.3d 126, 130 (Tex. App.—Amarillo 2014, orig. proceeding); KSNG Architects, Inc. v. Beasley, 109 S.W.3d 894, 899 (Tex. App.—Dallas 2003, no pet.). However, this liberal right to amend pleadings must be balanced against the right of the trial court to control its docket in a manner that permits the efficient administration of justice. See In re City of Dallas, 445 S.W.3d at 462–64.

Texas Rule of Civil Procedure 63 provides that parties may amend their pleadings “as they may desire ․ at such time as not to operate as a surprise to the opposite party; provided, that ․ within seven days of the date of trial or thereafter” any pleading amendments may be filed only with prior leave of court, “which leave shall be granted” unless the opposing party makes a showing of surprise. Tex. R. Civ. P. 63; see Andrews v. John Crane, Inc., 604 S.W.3d 495, 500 (Tex. App.—Houston [14th Dist.] 2020, pet. denied) (“The amended pleading may not, however, act as a surprise to the other party.”). Rule 63 is to be “liberally construed.” Lee v. Key W. Towers, Inc., 783 S.W.2d 586, 588 (Tex. 1989).

A trial court has no discretion to refuse an amendment unless (1) the opposing party presents evidence of surprise or prejudice; or (2) the amendment asserts a new cause of action or defense, and thus is prejudicial on its face, and the opposing party objects to the amendment. Kilpatrick, 874 S.W.2d at 658; Greenhalgh v. Serv. Lloyds Ins., 787 S.W.2d 938, 939 (Tex. 1990); Tanglewood Homes Ass'n, Inc. v. Feldman, 436 S.W.3d 48, 64 (Tex. App.—Houston [14th Dist.] 2014, pet. denied); see Mosaic Baybrook One, L.P. v. Cessor, 668 S.W.3d 611, 625 (Tex. 2023). The burden of showing prejudice or surprise rests on the party resisting the amendment. Kilpatrick, 874 S.W.2d at 658; Greenhalgh, 787 S.W.2d at 939.

B. Applicable Law

A child's parent has the right to designate the child's residence. Tex. Fam. Code Ann. § 151.001(a)(1). “Joint managing conservatorship” means the sharing of the rights and duties of a parent by two parties, ordinarily the parents, even if the exclusive right to make certain decisions may be awarded to one party. Id. § 101.016; see also Albrecht v. Albrecht, 974 S.W.2d 262, 265 (Tex. App.—San Antonio 1998, no pet.) (“In joint managing conservatorship, one parent is usually given slightly greater powers than the other parent.”). The Family Code provides a rebuttable presumption that it is in the child's best interest that the parents be appointed joint managing conservators. Tex. Fam. Code Ann. § 153.131(a); In re Marriage of Butts, 444 S.W.3d 147, 154 (Tex. App.—Houston [14th Dist.] 2014, no pet.); Swaab v. Swaab, 282 S.W.3d 519, 532 (Tex. App.—Houston [14th Dist.] 2008, pet. dism'd w.o.j.).

If joint managing conservators are appointed, then the trial court's order must designate the conservator who has the exclusive right to determine the child's primary residence and either restrict the location of the child's primary residence or specify that there is no geographic restriction. Tex. Fam. Code Ann. § 153.134(b)(1); In re Marriage of Christensen, 570 S.W.3d 933, 938 (Tex. App.—Texarkana 2019, no pet.). “The best interest of the child shall always be the primary consideration of the court in determining the issues of conservatorship and possession of and access to the child.” Tex. Fam. Code Ann. § 153.002; see also id. § 153.001(a) (providing the public policy of Texas as to conservatorship, possession, and access).

C. Analysis

Natalie argues she was entitled to a new trial because the trial court erred when it struck her request for joint managing conservatorship from her live pleading—her sixth amended petition—and submitted a jury charge that forced the jury to choose between awarding either sole managing conservatorship to Natalie or joint managing conservatorship with Ankur having the right to designate the children's primary residence.

At the trial court, Ankur argued that “[b]ecause no discovery is permitted for the remainder of this case, no party should be allowed to supplement or amend any pleadings, which necessitates further discovery.” At the hearing on his motion, Ankur argued that Natalie's sixth amended pleading should be struck because the court had ordered “that there would be no further pleadings of new claims, no adding new additional information.” According to Ankur, he was surprised and prejudiced because he had already deposed Natalie, he would not be able to seek additional discovery on her request for the geographic restriction, and Natalie had “been adamant up until the time this pleading was filed that she should have all the rights, that she should be the sole managing conservator.” See Greenhalgh, 787 S.W.2d at 939.

At the hearing on Ankur's motion to strike, Natalie's new counsel informed the trial court that Natalie's sixth amended petition was filed to include new counsel's request for attorney's fees. Nevertheless, the trial court stated that Ankur was surprised by the complained-of section of Natalie's sixth amended petition and that Natalie's new counsel had not offered “any specific response to [Ankur's] argument that there would require a different discovery or certainly different questions during a deposition ․” Natalie's new counsel failed to articulate any insight into Natalie's deposition testimony or prior requests in her pleadings. The trial court then granted Ankur's request in part, striking only Natalie's request for joint managing conservatorship with her having the right to designate the children's primary residence. In its findings of fact, the trial court provided that “the alternative request is materially different,” and “therefore a surprise” to Ankur, and that Ankur was prejudiced because it deprived him of his ability to conduct discovery on the requested geographical restriction.

Subsequently, the trial court refused Natalie's request for a jury instruction on whether it was in the children's best interest that she be appointed as the joint managing conservator with the right to designate their primary residence. Instead, the trial court submitted a jury charge that prevented the jury from considering whether Natalie should be the joint managing conservator with the right to designate the children's residence.

Here, the parties’ pleadings filed at the inception of the case included their competing requests concerning the exclusive right to designate the children's primary residence if appointed joint managing conservators, and Natalie's second amended petition requested that she be given the right to designate the children's primary residence “within Harris County, Texas and counties contiguous to Harris County, Texas ․” While Natalie's third and fourth amended petitions did not include a request for joint managing conservatorship, her fifth amended petition did include such a request. Finally, although Natalie's sixth amended petition, her live pleading, requested joint managing conservatorship under a paragraph that began with “May 13, 2023 supplement,” the only change as to this request in comparison with her fifth amended petition was the newly added geographic restriction.

The children's best interest is the fundamental issue in determining which parent should have the right to designate the children's primary residence and whether there should be a geographical restriction on that right. See Tex. Fam. Code Ann. § 153.002; In re Lee, 411 S.W.3d 445, 454 (Tex. 2013) (orig. proceeding). And the Family Code requires that the trial court must designate the conservator who has the exclusive right to determine the child's primary residence when joint managing conservators are appointed and further requires the trial court to either restrict the location of the child's primary residence or specify that there is no geographic restriction. Tex. Fam. Code Ann. § 153.134(b)(1). We cannot conclude that Natalie's narrowing of her request for the right to designate the children's primary residence in her sixth amended petition if joint managing conservators were appointed, as compared to her joint-managing conservatorship request in her firth amended petition, is a new claim or cause of action.² See id.; Montelongo v. Abrea, 622 S.W.3d 290, 300–01 (Tex. 2021) (“[A] ‘cause of action’ ․ is similar to a ‘claim’ in that they both refer to a legal right that a party asserts in the suit that constitutes the action.”); Wilson v. Korthauer, 21 S.W.3d 573, 578 n.2 (Tex. App.—Houston [14th Dist.] 2000, pet. denied) (“We note that based on the nature of the amendment (i.e., a clarification rather than a new claim), [appellee] would not likely have been able to demonstrate surprise or prejudice in any event.”); see also Mancilla v. Taxfree Shopping, Ltd., No. 05-18-00136-CV, 2018 WL 6850951, at *3 (Tex. App.—Dallas Nov. 16, 2018, no pet.) (mem. op.) (concluding that amended factual allegations did “nothing more than provide specificity” of a claim the movant had prior notice of and that did not alter the essential nature of the claim).

Because the change in Natalie's sixth amended pleading was not a new claim or cause of action, Ankur was required to show that he was surprised and prejudiced by the change. See Smith Detective Agency & Nightwatch Serv., Inc. v. Stanley Smith Sec., Inc., 938 S.W.2d 743, 748 (Tex. App.—Dallas 1996, writ denied) (“Although rule 63 requires a showing of surprise, every unexpected amended pleading can be considered a ‘surprise’ to the opposing party. Because of this, merely claiming subjective surprise is not enough to prevent the filing of a trial amendment. The remedy to cure the disadvantage of surprise alone is a continuance, not exclusion of the amendment.”). An amendment is prejudicial if: (1) it asserts a new substantive matter that reshapes the nature of the trial itself; (2) the opposing party could not have anticipated it in light of the development of the case up to the time the amendment was requested; and (3) the opposing party's presentation of its case would be detrimentally affected by the amendment. In re City of Dallas, 445 S.W.3d at 462–64; Tanglewood Homes Ass'n, Inc., 436 S.W.3d at 64–65; see also Lenz v. Lenz, 79 S.W.3d 10, 15–17 (Tex. 2002) (listing factors to consider in determining whether a domicile restriction is in the child's best interest). Even additional, separately stated causes of action may not constitute new subject matter if the added claims have common elements with claims previously asserted and require the same evidentiary proof required to support an already pleaded claim or defense. In re City of Dallas, 445 S.W.3d at 462–64; Rodriguez v. Crowell, 319 S.W.3d 751, 758–59 (Tex. App.—El Paso 2009, pet. denied). The question is not whether the opposing party did in fact anticipate the amended pleading, but rather whether it could have been anticipated. Rodriguez, 319 S.W.3d at 758–59; Allstate Prop. & Cas. Ins. v. Gutierrez, 281 S.W.3d 535, 539 (Tex. App.—El Paso 2008, no pet.); Whole Foods Mkt. Sw., L.P. v. Tijerina, 979 S.W.2d 768, 777 (Tex. App.—Houston [14th Dist.] 1998, pet. denied).

Both Natalie and Ankur's live pleadings before Natalie's sixth amended petition was filed included a request for joint managing conservatorship with each party requesting that they be awarded the exclusive right to designate the children's primary residence. Ankur's request in his live counter petition included a geographic restriction within Harris County. This geographic restriction—which was in large part the same as pleaded and requested by Natalie in her sixth amended petition—is where the parties and the children have lived throughout the marriage, and it is much narrower in scope (and tailored) than Natalie's previous request “without geographic restrictions.”

Based on the foregoing, the Family Code, and the context of the entire litigation, Natalie's request for joint managing conservatorship with a geographic restriction in her sixth amended petition does not assert a new substantive matter that reshaped the nature of the trial itself nor did it constitute a prejudicial surprise to Ankur. See Tex. Fam. Code Ann. § 153.134(b)(1); In re City of Dallas, 445 S.W.3d at 462–64 Tanglewood Homes Ass'n, Inc., 436 S.W.3d at 64–65; Rodriguez, 319 S.W.3d at 758–59. It does not incorporate new subject matter because the change Ankur complains of requires the same proof as Natalie's previous requests that she be given the exclusive right to designate the children's primary residence—that it is in the children's best interest. See Tex. Fam. Code Ann. § 153.002; In re City of Dallas, 445 S.W.3d at 462–64; Rodriguez, 319 S.W.3d at 758–59; see also In re E.W.A., No. 02-07-00135-CV, 2008 WL 1867144, at *7 (Tex. App.—Fort Worth Apr. 24, 2008, no pet.) (mem. op.) (concluding the trial court did not abuse its discretion in allowing amended, additional rationales for the termination of parental rights because the only issue was the child's best interest, which was “an issue for which the parties were presumably prepared”). Finally, Ankur could have anticipated Natalie's amended pleadings in light of the parties’ history, the development of the case, and Ankur's own request that he be given the exclusive right to establish the children's primary residency within Harris County. See Tex. Fam. Code Ann. § 153.134(b)(1); In re S.M.D., 329 S.W.3d 8, 22 (Tex. App.—San Antonio 2010, pet. dism'd) (“[T]he purpose of imposing a geographic residency restriction is to ensure those who have rights to possession of the child are able to effectively exercise such rights.”); see also Tex. Fam. Code Ann. § 153.001(a).

We conclude there is no evidence supporting the trial court's finding that Ankur was surprised and prejudiced by Natalie's narrower request in her sixth amended petition. See Leithold v. Plass, 413 S.W.2d 698, 701 (Tex. 1967) (“[O]nce the child is brought under [the trial court's] jurisdiction by suit and pleading cast in terms of custody and control, it becomes the duty of the court in the exercise of its equitable powers to make proper dispositions of all matters comprehended thereby in a manner supported by the evidence.”); In re Marriage of Christensen, 570 S.W.3d at 939–40 (“In cases affecting the parent-child relationship ․ the pleading requirements are of lesser importance.”); In re Macalik, 13 S.W.3d 43, 45 (Tex. App.—Texarkana 1999, no pet.) (“[I]n cases affecting the parent/child relationship, when the best interest of the child is always the overriding consideration, technical rules of pleading and practice are of little importance, and fair notice is afforded when the pleadings generally invoke the court's jurisdiction over custody and control of the children.”). Thus, we conclude that the trial court abused its discretion when it struck Natalie's request for joint managing conservatorship from her live pleading. See Tex. Fam. Code Ann. § 153.134(b)(1); Kilpatrick, 874 S.W.2d at 658; Garcia, 988 S.W.2d at 222.

“[W]hen a trial court's error causes a party to lose her right to present her case to a jury, that error is harmful if there were material fact issues for a jury to resolve.” In re J.N., 670 S.W.3d 614, 621 (Tex. 2023). “When the wrong decisionmaker makes factual determinations, the resulting judgment is improper.” Id. “Therefore, when a suit involves material disputes of fact that are erroneously resolved by the court rather than a jury, the judgment is improper and reversal appropriate.” Id.

Here, material fact issues and subsidiary fact issues exist. A primary issue in this case—the determination of which joint managing conservator should have the exclusive right to designate the children's primary residence if joint managing conservators are appointed—is a matter appropriate for resolution by a jury. See Tex. Fam. Code Ann. §§ 105.002(a), (c)(1), 153.134(b)(1); In re J.N., 670 S.W.3d at 621. As noted, the trial court's jury charge prevented the jury from considering whether Natalie should be the joint managing conservator with the right to designate the children's residence. Because selecting which parent will designate the children's primary residence involves factual disputes that Natalie would have been entitled to have a jury resolve, Natalie's loss of that opportunity was harmful.³ See, e.g., In re J.N., 670 S.W.3d at 621.

We conclude that the trial court abused its discretion in denying Natalie's motion for new trial and sustain Natalie's first issue.⁴ As further discussed below, we reverse the portion of the trial court's judgment concerning the parties’ conservatorship of their children.

III. Exclusive Rights & Child Support

“In rendering an order appointing joint managing conservators, the court shall ․ allocate between the parents, independently, jointly, or exclusively, all of the remaining rights and duties of a parent as provided by Chapter 151 ․” Tex. Fam. Code Ann. § 153.134(b)(4). The trial court also has the authority to require one joint managing conservator to pay child support to another joint managing conservator. See id. § 153.138; Lowe v. Roberts, No. 14-10-01191-CV, 2012 WL 50617, at *2 (Tex. App.—Houston [14th Dist.] Jan. 10, 2012, no pet.) (mem. op.); see also Tex. Fam. Code Ann. § 153.134(b)(2). The determinations concerning these conservatorship issues are intensely fact driven. In re J.J.R.S., 627 S.W.3d 211, 218 (Tex. 2021).

As noted, a child's best interest is always the primary consideration when determining issues of conservatorship, including the issues of parental rights, possession, and access. See Tex. Fam. Code Ann. § 153.002; In re J.J.R.S., 627 S.W.3d 211, 218 (Tex. 2021); Rodriguez v. Rodriguez, 860 S.W.2d 414, 417 n.3 (Tex. 1993). Because the issues of conservatorship, child support, the allocation of parental rights, and the possession and access to the children are interrelated, we cannot be reasonably certain that the trial court's determinations concerning child support, possession, access, and parental rights provided for in Chapter 151 were not significantly affected by its error. See Tex. Fam. Code Ann. § 153.134(b)(4); see, e.g., Ramirez v. Sanchez, No. 01-21-00417-CV, 2023 WL 2919545, at *10 (Tex. App.—Houston [1st Dist.] Apr. 13, 2023, no pet.) (mem. op.) (“A change in conservatorship or the right to designate the child's primary residence constitutes a material and substantial change that a trial court can consider in modifying child-support provisions.”); see also, e.g., Kom v. Kom, No. 08-24-00022-CV, 2025 WL 1057731, at *7 (Tex. App.—El Paso Apr. 8, 2025, no pet. h.) (mem. op.) (“Because the issues of conservatorship and child support are interrelated, we cannot be reasonably certain that the trial court's child-support determinations, and other ancillary orders, were not significantly affected by its error regarding conservatorship.”); In re A.T., No. 02-22-00407-CV, 2023 WL 4007364, at *7 (Tex. App.—Fort Worth June 15, 2023, no pet.) (mem. op.) (“[H]aving reversed the trial court's conservatorship determinations, we reverse its determinations of past and ongoing child support for reconsideration as well.”).

Because Natalie is entitled to a new trial on the issue of the parties’ conservatorship of their children, we reverse the portions of the trial court's final divorce decree concerning child support, the allocation of parental rights, and the parties’ access and possession of the children. See Tex. Fam. Code Ann. §§ 153.134(b)(4), 156.101(a)(1); Tex. R. App. P. 43.3(b); In re J.N., 670 S.W.3d at 621 (“[C]ircumstances may have materially and substantially changed during the pendency of the appeal, requiring a new trial.”); Shook v. Gray, 381 S.W.3d 540, 542 (Tex. 2012) (per curiam) (“Even assuming Shook previously failed to present evidence capable of overcoming the parental presumption, it does not follow that she will necessarily be unable to overcome the parental presumption under the present circumstances.”); Van Heerden v. Van Heerden, 321 S.W.3d 869, 874–75 (Tex. App.—Houston [14th Dist.] 2010, no pet.) (noting that “circumstances surrounding the parent-child relationship may have changed since the trial court's original judgment, which would require a fact-finder to assess the new situation”); see also, e.g., In re J.M., No. 02-16-00428-CV, 2017 WL 3821863, at *5 (Tex. App.—Fort Worth Aug. 31, 2017, no pet.) (mem. op.) (concluding that the trial court erred by appointing parents as joint managing conservators and reversing “for a new trial on conservatorship, access and possession, and child support”). Accordingly, we will not address Natalie's second and third issues.⁵ See Tex. R. App. P. 47.1.

IV. Fraud Claims & Division of Marital Estate

In her fourth issue, Natalie argues that the overwhelming weight of the evidence showed Ankur committed fraud against the community estate by secreting hundreds of thousands of dollars. In her motion for new trial, Natalie argued the trial court made no ruling on her fraud claims and that “the evidence shows that [Ankur] has committed fraud on the community estate.”

A. Applicable Law

The community estate consists of any property, other than separate property, acquired by either spouse during marriage. Nguyen v. Pham, 640 S.W.3d 266, 271 (Tex. App.—Houston [14th Dist.] 2021, pet. denied); see Tex. Fam. Code Ann. § 3.002; Barnett v. Barnett, 67 S.W.3d 107, 111 (Tex. 2001); Stavinoha v. Stavinoha, 126 S.W.3d 604, 607 (Tex. App.—Houston [14th Dist.] 2004, no pet.). And property possessed by either spouse during or on dissolution of marriage is presumed to be community property. Tex. Fam. Code Ann. § 3.003(a).

The trial court's division of the community estate must be just and right, having due regard for the rights of each spouse. See Tex. Fam. Code Ann. § 7.001. However, a just and right division need not be equal; it must be equitable. See Marin v. Marin, No. 14-13-00749-CV, 2016 WL 1237847, at *2 (Tex. App.—Houston [14th Dist.] Mar. 29, 2016, no pet.) (mem. op.).

Certain community property, referred to as “special community property,” is treated similarly to separate property. Yamin v. Carroll Wayne Conn, L.P., 574 S.W.3d 50, 58 (Tex. App.—Houston [14th Dist.] 2018, pet. denied); see, e.g., Montemayor v. Ortiz, 208 S.W.3d 627, 644 (Tex. App.—Corpus Christi–Edinburg 2006, pets. denied). Special community property is the community property that is subject to one spouse's sole management, control, and disposition. Tex. Fam. Code Ann. § 3.102(a); Montemayor, 208 S.W.3d at 643–44. Such special community property includes, among other things, a spouse's personal earnings, revenue from a spouse's separate property, and “the increase and mutations of, and the revenue from, all property subject to the spouse's sole management, control, and disposition.” Tex. Fam. Code Ann. § 3.102(a). Property held in the name of one spouse is presumed to be under that spouse's sole management, control, and disposition. Id. § 3.104(a). Nevertheless, that spouse's disposition of his special community property must still be fair to the other spouse, and the managing spouse has the burden to show that the disposition of the property was fair. Massey v. Massey, 807 S.W.2d 391, 402 (Tex. App.—Houston [1st Dist.] 1991, writ denied); see also Mazique v. Mazique, 742 S.W.2d 805, 807–08 (Tex. App.—Houston [1st Dist.] 1987, no writ) (“In the absence of fraud on the other spouse, the managing spouse has the sole right of control and disposition of the community property as he or she sees fit.”).

The Family Code recognizes both actual fraud and constructive fraud as independent bases for fraud on the community estate. See Tex. Fam. Code Ann. § 7.009(a). Constructive-fraud claims are based on the fiduciary duties that exist between spouses and are sometimes labeled as claims for breach of fiduciary duty or waste. See Puntarelli v. Peterson, 405 S.W.3d 131, 137–38 (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). Unlike actual fraud, constructive fraud does not require the intent to deceive. Puntarelli, 405 S.W.3d at 138; see Akukoro v. Akukoro, No. 01-12-01072-CV, 2013 WL 6729661, at *4 (Tex. App.—Houston [1st Dist.] Dec. 19, 2013, no pet.) (mem. op.). Instead, a presumption of constructive fraud arises when a claimant spouse shows that the other spouse has disposed of community property without the claimant spouse's knowledge or consent. Key v. Key, 712 S.W.3d 697, 705–06 (Tex. App.—Houston [14th Dist.] 2025, no pet.); Boothe v. Boothe, 681 S.W.3d 916, 924 (Tex. App.—Houston [14th Dist.] 2023, no pet.); see Cantu v. Cantu, 556 S.W.3d 420, 427 (Tex. App.—Houston [14th Dist.] 2018, no pet.); Jean v. Tyson-Jean, 118 S.W.3d 1, 9 (Tex. App.—Houston [14th Dist.] 2003, pet. denied). Once the presumption arises, the burden of proof shifts to the disposing spouse to rebut the presumption by showing that the disposal was fair. See Cantu, 556 S.W.3d at 427; Puntarelli, 405 S.W.3d at 138; Zieba, 928 S.W.2d at 789.

B. Standard of Review

The trial court has wide discretion in making a just and right division of the community estate, see Schlueter v. Schlueter, 975 S.W.2d 584, 589 (Tex. 1998), and we will only disturb the trial court's division upon a showing that the trial court clearly abused its discretion. See Murff v. Murff, 615 S.W.2d 696, 699 (Tex. 1981); Willis v. Willis, 533 S.W.3d 547, 551 (Tex. App.—Houston [14th Dist.] 2017, no pet.). We engage in a two-pronged inquiry when deciding whether the trial court abused its discretion: first, we consider whether the trial court had sufficient evidence upon which to exercise its discretion; and second, we consider whether the trial court erred in its application of that discretion. See Cruz v. Cruz, No. 14-19-00016-CV, 2019 WL 2942630, at *3 (Tex. App.—Houston [14th Dist.] July 9, 2019, no pet.) (mem. op.).

The first prong draws on our traditional standards for legal and factual sufficiency review. Under the legal sufficiency standard, we credit all evidence and inferences favorable to the trial court's decision if a reasonable factfinder could, and we disregard all evidence contrary to that decision unless a reasonable factfinder could not. See City of Keller v. Wilson, 168 S.W.3d 802, 828 (Tex. 2005). The evidence is legally insufficient if the evidence at trial would not allow reasonable and fair-minded people to find the fact at issue. Id. at 827. Under the factual sufficiency standard, we examine all of the evidence in a neutral light and consider whether the trial court's decision is so against the great weight and preponderance of the evidence as to be clearly wrong and manifestly unjust. See Dow Chem. v. Francis, 46 S.W.3d 237, 242 (Tex. 2001) (per curiam).

With the second prong, we consider whether the trial court made a reasonable decision based on the admitted evidence. Key, 712 S.W.3d at 702. Stated inversely, we must determine whether there is some basis for concluding that the trial court's decision was neither arbitrary nor unreasonable. Id. If there is no evidence in support of the trial court's division of the community estate, or if the division is manifestly unjust and unfair, then we must conclude that the trial court abused its discretion. Id.

When a party challenges the legal sufficiency of the evidence to support an adverse finding on an issue for which it had the burden of proof, that party 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) (per curiam). In reviewing such a matter-of-law challenge, we employ a two-part test. We first examine the record for evidence that supports the finding, while ignoring all evidence to the contrary. Id. If there is no evidence to support the finding, we then examine the entire record to determine if the contrary proposition is established as a matter of law. Id. The issue should be sustained only if the contrary proposition is conclusively established. Id.

C. Analysis

Here, the trial court's findings of fact included a finding that Natalie presented no evidence of actual fraud or constructive fraud on the community estate by Ankur. Natalie argues on appeal that she raised an inference of constructive fraud concerning Ankur's: transfer of his interest in International Lodging, LLC (“International Lodging”) to his father, Mahesh Wadhwa (“Mahesh”); disposition of capital gains related to Jay Lodging Group, LLC (“Jay Lodging”); use of community funds to go on trips with the children during the underlying divorce proceedings; and execution of a promissory note in favor of Ankur's parents that was secured by the marital home. For the reasons discussed below, we conclude the evidence raised a presumption of constructive fraud as to Ankur's transfer of forty percent of his ownership interest in International Lodging to Mahesh, his signing over of $215,000.00 he received from Jay Lodging, and Ankur's use of community funds for travel trips with the parties’ children during the underlying divorce proceeding and to obtain his pilot's license. See Puntarelli, 405 S.W.3d at 140. Thus, the burden shifted to Ankur to show that these transactions were fair to the marital estate. However, we further conclude that Ankur failed to carry his burden as to these complaints of constructive fraud.

1. International Lodging

The undisputed evidence in the record shows that International Lodging was incorporated on September 18, 2007—prior to the parties’ marriage—with Ankur owning fifty percent, his mother Shashi Wadhwa owning forty percent, and Mahesh owning ten percent. International Lodging owned a La Quinta Inn hotel. During the marriage, Ankur worked as the manager of the La Quinta Inn owned by International Lodging.

By 2015, Ankur's ownership interest had increased to ninety percent. Ankur testified that he received a bigger ownership interest in International Lodging during the marriage because his responsibility at work had increased due to his desire to “try to provide more for my family and have an opportunity to earn more at the end of the year when we profited.” In other words, Ankur testified that he received his ownership interest as compensation for his work during the marriage. Accordingly, we conclude that the forty-percent ownership interest Ankur acquired in International Lodging during the marriage was community property. See Vallone v. Vallone, 644 S.W.2d 455, 458–59 (Tex. 1982) (“It is fundamental that any property or rights acquired by one of the spouses after marriage by toil, talent, industry or other productive faculty belongs to the community estate.”); Marriage of O'Brien, 436 S.W.3d 78, 84 (Tex. App.—Houston [14th Dist.] 2014, no pet.) (“[E]arnings during marriage, even during the pendency of divorce proceedings, are community property.”); Williams v. Williams, 246 S.W.3d 207, 215 (Tex. App.—Houston [14th Dist.] 2007, no pet.) (“[T]he wages and salaries earned by the parties during marriage are community property ․”).

Additionally, it is further undisputed that: Ankur transferred eighty-seven and-one-half ownership interest in International Lodging to Mahesh in 2015, during the marriage, for nothing in return and without Natalie's knowledge and consent; the La Quinta Inn hotel was sold for $3,100,000.00 in 2022; Mahesh received $675,000.00 from the sale of the La Quinta Inn hotel owned by International Lodging; and International Lodging was dissolved after the sale of the hotel. Therefore, we conclude that the evidence raised a presumption of constructive fraud as a matter of law as to Ankur's transfer of the forty percent ownership interest in International Lodging acquired during the marriage, and the burden shifted to Ankur to show how the transaction was fair. See Dow Chem. Co., 46 S.W.3d at 241.

Ankur testified that he transferred his interest in International Lodging to Mahesh because he had been unable to meet the hotel's performance goals and because Mahesh had invested funds into International Lodging to keep the business afloat during “the past six-plus years.” When analyzing whether the disposal of community property is “fair,” the court can consider (1) the size of the property in relation to the total size of the community estate; (2) the adequacy of the remaining estate; and (3) the relationship of the parties involved in the transaction, or in the case of a gift, the relationship of the donor spouse to the donee. Knight v. Knight, 301 S.W.3d 723, 731 (Tex. App.—Houston [14th Dist.] 2009, no pet.).

Here, it is undisputed that Mahesh directly received $675,000.00 from the sale of the hotel owned by International Lodging and that Mahesh owned eighty-seven and one-half percent of International Lodging at the time of the sale. Accordingly, the value of the marital estate's forty-percent interest in International Lodging was at least $308,542.50, of which $154,271.25 would belong to Natalie under the trial court's division of the community estate.⁶ We cannot conclude that Ankur established the transaction was fair because this transaction greatly depleted the marital estate and benefitted Ankur's father.⁷ See Knight, 301 S.W.3d at 731; see, e.g., Wright v. Wright, 280 S.W.3d 901, 912 (Tex. App.—Eastland 2009, no pet.) (“Had there been no transfer of stock, the community would have had another $637,000 to divide. Glenn's transfer of the stock to Gryder for no consideration was unfair to Jodie and the community being divided.”).

Upon determining that a spouse has committed fraud on the community, the court “shall (1) calculate the value by which the community estate was depleted as a result of the fraud on the community and calculate the amount of the reconstituted estate; and (2) divide the value of the reconstituted estate between the parties in a manner the court deems just and right.” Tex. Fam Code Ann. § 7.009(b). Here, Natalie filed a request for findings of fact and conclusions of law, but the trial court did not file any. Natalie then filed a notice of past due findings of fact and conclusions of law, but the trial court still did not issue any. After Natalie appealed, we abated the appeal and ordered the trial court to issue findings of fact and conclusions of law. The trial court issued some findings of fact and conclusions of law, but despite being required to include findings as to the characterization and size of the marital estate, the trial court failed to do so. See id. § 6.711(a) (“In a suit for dissolution of a marriage in which the court has rendered a judgment dividing the estate of the parties, on request by a party, the court shall state in writing its findings of fact and conclusions of law, including the characterization and value of all assets, liabilities, claims, and offsets on which disputed evidence has been presented.”).

Normally, we would abate the appeal for the trial court to make a finding and correct its error. See Tex. R. App. P. 44.4; Zieba, 928 S.W.2d at 786; see also Brown v. Wokocha, 526 S.W.3d 504, 507–08 (Tex. App.—Houston [1st Dist.] 2017, no pet.) (“Without findings of fact, the appellate court does not know the basis for the division, the values assigned to the community assets, or the percentage of the marital estate that each party received.”); Vasudevan v. Vasudevan, No. 14-14-00765-CV, 2015 WL 4774569, at *4 (Tex. App.—Houston [14th Dist.] Aug. 13, 2015, no pet.) (mem. op.) (“The respective inventories filed by Alavoor and Deepa that assign values to the community property assets cannot serve as a substitute for findings of fact by the trial court.”). However, we reverse the trial court's division of the marital estate here because the evidence in the record does not support an implied finding that the marital estate's division was just and right once the $308,542.50 is considered part of the reconstituted marital estate. See Tex. R. Civ. P. 299; Ad Villarai, LLC v. Pak, 519 S.W.3d 132, 135–36 (Tex. 2017) (per curiam); Key, ––– S.W.3d at ––––, 2025 WL 409047, at *1–2; Knight, 301 S.W.3d at 731; Zieba, 928 S.W.2d at 786. This is because the trial court's erroneous decision resulted in Ankur receiving $308,542.50, which is more than the aggregate value of all the assets the trial court considered in its division of the community estate and included Natalie's $154,271.25 portion of the sales proceeds. This erroneous award to Ankur constituted a considerable and significant portion of the marital estate's assets. Therefore, we conclude that the trial court's erroneous rejection of Natalie's constructive fraud claim had more than a de minimis effect on the trial court's just and right division of the marital estate, resulted in a lopsided division in favor of Ankur, and was harmful. See Knight, 301 S.W.3d at 733 (“Given the court's errors on Monica's reimbursement claims and in its valuation of her separate estate, we find that the trial court could not properly exercise its discretion in making a just and right division of the community estate.”); McElwee v. McElwee, 911 S.W.2d 182, 190 (Tex. App.—Houston [1st Dist.] 1995, writ denied) (concluding that a mischaracterization of property valued at $45,000 that resulted in a 64%/36% division of property instead of the 61%/39% division intended by the trial court, had more than a de minimis effect on the trial court's just and right division).

The trial court also failed to issue findings regarding Natalie's claim of constructive fraud and her testimony in support thereof as to: Ankur's disposition of $215,000.00 he received from Jay Lodging; Ankur's expenditures on the parties’ children during the divorce proceedings; Ankur's execution of a promissory note to his parents without Natalie's knowledge and consent and listing the marital home as a security; and Ankur's expenditures during the marriage without Natalie's consent to obtain a pilot's license. See Kelly v. Kelly, 634 S.W.3d at 348–358 (Tex. App.—Houston [1st Dist.] 2021, no pet.). We will address these claims next.

2. Jay Lodging

Ankur testified he owned an interest in Jay Lodging, which owned a Comfort Inn and Suites hotel. Ankur's tax return for 2021 was admitted into evidence, and it shows that Ankur received $225,000.00 in distributions from Jay Lodging that year, of which $196,731.00 were capital gains. The trial court also admitted into evidence a bank statement from an account under Ankur's name only, showing a deposit of $225,000.00 on May 13, 2021, and a debit on August 27, 2021, for a check in the amount of $215,000.00. Natalie testified that Ankur spent $215,000.00 of community property without her knowledge and consent through that check withdrawal. Thus, we conclude that the evidence raised a presumption of constructive fraud as a matter of law as to Ankur's disposition of the $215,000.000, and the burden shifted to Ankur to show how the transaction was fair. See Dow Chem. Co., 46 S.W.3d at 241

Ankur testified that Jay Lodging was his separate property, that he had an ownership interest of seven-and-a-half percent in Jay Lodging, that Jay Lodging was sold in the first quarter of 2021, and that he received “roughly” $200,000.00 from its sale. Normally, capital distributions from a spouse's separate property are also that spouse's separate property. See Legrand-Brock v. Brock, 246 S.W.3d 318, 321 (Tex. App.—Beaumont 2008, pet. denied) (“[W]hen a spouse owns separate-property stock in a dissolving corporation and receives distributions of liquidated assets, the distributions remain the stockholder's separate property.”); Harris v. Harris, 765 S.W.2d 798, 802 (Tex. App.—Houston [14th Dist.] 1989, writ denied) (“Property established to be separate remains separate property regardless of the fact that it may undergo any number of mutations and changes in form.”); see, e.g., Bakken v. Bakken, 503 S.W.2d 315, 317–18 (Tex. App.—Dallas 1973, no writ) (concluding that capital gains realized in the sale of spouse's separate-property mutual-fund shares were also that spouse's separate property). However, “[p]roperty possessed by either spouse during or on dissolution of marriage is presumed to be community property.” Tex. Fam. Code Ann. § 3.003(a). To rebut this presumption, the spouse seeking to prove the separate character of the property must do so by clear and convincing evidence. Id. § 3.003(b). “Clear and convincing” evidence means the measure or degree of proof that will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established. In re J.F.C., 96 S.W.3d 256, 264 (Tex. 2002). Generally, to satisfy this burden of proof, the spouse claiming certain property as “separate” must trace and clearly identify the property claimed to be separate. Cockerham v. Cockerham, 527 S.W.2d 162, 167 (Tex. 1975); Zagorski v. Zagorski, 116 S.W.3d 309, 316 (Tex. App.—Houston [14th Dist.] 2003, pet. denied).

Even though Ankur testified his ownership interest in Jay Lodging was his separate property, he produced no documentary evidence supporting this assertion. On the contrary, the only documentation in the record of Ankur's ownership in Jay Lodging is from 2016, during the parties’ marriage, and it confirms that Ankur had an ownership interest in Jay Lodging of seven-and-a-half percent. We cannot conclude that Ankur presented clear and convincing evidence that his interest in Jay Lodging was his separate property, and we must conclude that he failed to rebut the presumption that the $215,000.00 Natalie complains of was community property. See McKinley v. McKinley, 496 S.W.2d 540, 544 (Tex. 1973) (“To come to any conclusion about the property status of the $16,000 certificate would require surmise and speculation.”); see, e.g., In re Marriage of Nash, 644 S.W.3d 683, 699 (Tex. App.—Texarkana 2022, no pet.) (“Michael's testimony that the 127 Account and the 660 Account were separate property constituted insufficient evidence to rebut the community presumption that these accounts, created after marriage, were community property.”); Mock v. Mock, 216 S.W.3d 370, 373 (Tex. App.—Eastland 2006, pet. denied) (“Appellant failed to trace the assets in the account with any documentary evidence. In the absence of such evidence, appellant did not meet her burden of establishing by clear and convincing evidence that the balance in the savings account was her separate property.”); see also Pearson v. Fillingim, 332 S.W.3d 361, 363 (Tex. 2011) (“This is not a divestiture of separate property, but a necessary classification of property as set by the community presumption.”); In re Marriage of Everse, 440 S.W.3d 749, 751 (Tex. App.—Amarillo 2013, no pet.) (“The burden of tracing is a difficult, but not impossible, burden to sustain. As a general rule, mere testimony that funds came from a separate source, without any tracing of the funds, will not constitute the clear and convincing evidence necessary to rebut the community presumption.”).

As to the fairness of the disposition of the $215,000.00, Ankur testified that he believed he had signed the $215,000.00 check over to his mother for International Lodging and that it had been deposited into an account owned by International Lodging. Ankur further testified that $20,000.00 of the $215,000.00 were used to pay for the children's school tuition; $40,000.00 were used to pay his father back for the funds Ankur borrowed to pay for his initial investment in Jay Lodging; and the remaining $160,000.00 went to pay his debt to International Lodging for funds he borrowed during the four previous years to finance the children's school tuition and other household expenses. Ankur, however, failed to present any documentary evidence supporting these assertions.

Because Ankur's broad assertions are unsupported and uncorroborated, because he signed the check over to his mother and testified it largely benefitted his mother and father, and because Ankur's position at trial was that the marital estate had more liabilities than assets, we cannot conclude that Ankur demonstrated that this transaction totaling $215,000.00 was fair to the community estate. See Knight, 301 S.W.3d at 731. We conclude that Ankur failed to rebut the presumption of constructive fraud as to this expenditure of the community estate's funds, and the trial court erred in dividing the marital estate without considering this constructive fraud by Ankur.

3. Expenditures on Trips With The Children & Pilot's License

Natalie also argues Ankur committed constructive fraud by spending community funds to take the parties’ children on trips during the divorce proceedings.

Natalie testified that, during the divorce proceedings, Ankur took their children on a trip to Telluride, Colorado; “a really fancy resort” for skiing in Spring of 2022; numerous flights to Austin; a trip to Universal Studios in Florida; and a trip to New Orleans. Natalie testified she was not part of these trips and did not know where the money for the trips came from. Natalie further testified that, during the marriage, the family “would occasionally go to Destin, Florida, and every three years we may go to a lower-end ski resort, but it was minimal.” Thus, there was no evidence that Natalie consented to these trips, and we conclude that Natalie raised a presumption of constructive fraud that shifted the burden to Ankur to show how these expenditures were fair. See Dow Chem. Co., 46 S.W.3d at 241; Key, 712 S.W.3d at 705–06; Cantu, 556 S.W.3d at 427; Puntarelli, 405 S.W.3d at 139; see also, e.g., Everitt v. Everitt, No. 01-11-00031-CV, 2012 WL 3776343, at *6 (Tex. App.—Houston [1st Dist.] Aug. 31, 2012, no pet.) (mem. op.) (“Since there is no evidence that Jo Ann consented to the establishment of the college savings accounts, Thomas, as the managing spouse of the funds used to set up the accounts, had the burden to prove the fairness of the disposition to Jo Ann.”).

Ankur does not dispute that he and the children took these trips, and he presented no evidence or testimony at trial—nor does he present any argument on appeal—in support of a finding that these expenditures were fair or that they were funded by Ankur's separate property. Additionally, Ankur did not present any evidence concerning the costs of these trips, but his sworn inventory, which was admitted into evidence, provided that the marital estate was in the negative by approximately $50,000.00. Natalie's financial information statement was also admitted into evidence, and it provides that Natalie works as a hairstylist and earns a modest $2,500.00 a month and has considerable debt and expenses. Even though these expenditures were made for trips with the parties’ children, we cannot conclude that Ankur established that they were fair to the marital estate because Natalie was omitted from the trips and the expenditures depleted the marital estate even more when it already was in a significant amount of debt. Cf. Horlock v. Horlock, 533 S.W.2d 52, 55–56 (Tex. App.—Houston [14th Dist.] 1975, writ dism'd w.o.j.) (concluding that Father showed his gifts to his three children from his previous marriage were fair because the gifts “constituted no more than 13.1517% of the total estate” and the remaining “$870,000 in community funds would be sufficient to provide for the needs of the wife”); see Tex. Fam. Code Ann. §§ 3.002, 3.003(a); Knight, 301 S.W.3d at 731; Weltch v. Estate of Weltch, No. 14-20-00113-CV, 2021 WL 6141184, at *7 (Tex. App.—Houston [14th Dist.] Dec. 30, 2021, no pet.) (mem. op.) (“Although a spouse may make gifts of community funds to persons outside the community, a gift that is capricious, excessive, or arbitrary may be set aside as a constructive fraud on the other spouse.”); see also Marshall v. Marshall, 735 S.W.2d 587, 596–97 (Tex. App.—Dallas 1987, writ ref'd n.r.e.) (concluding that gifts to daughter and grandson were fair to the community estate because the remaining community funds were sufficient to support the wife). We conclude that Ankur failed to rebut the presumption of constructive fraud as to his expenditures of the community estate's funds to finance trips with the children during the divorce proceedings, and the trial court erred in dividing the marital estate without considering this constructive fraud by Ankur.

Natalie also testified that Ankur obtained his pilot's license and paid for the costs associated with it without her knowledge and consent. Ankur testified that he obtained his pilot's license in 2020 and that he did not discuss it with Natalie. Ankur testified he spent two hundred and fifty hours of flight time to become a flight instructor and that he spent “[r]oughly $7,500.” We conclude that Ankur failed to rebut the presumption of constructive fraud as to his expenditures on obtaining a pilot's license, and the trial court erred in dividing the marital estate without considering this constructive fraud by Ankur. See Knight, 301 S.W.3d at 731.

4. Promissory Note

Finally, Natalie argues Ankur committed constructive fraud when he executed a promissory note in favor of his parents for $141,825.00 and used the marital home as collateral.

Natalie testified she had no knowledge of this promissory note until she received discovery in the underlying divorce proceedings and that Ankur never discussed with her anything about obtaining this loan. Natalie testified that the mortgage on the home was paid off sometime in 2011 to 2012 and that:

all [of] the sudden we didn't have a mortgage any longer and I wasn't aware of it until about three months later. Three months later I asked, ‘Where is our mortgage payment, Ankur?’ He told me, ‘That his parents had had some money that they needed to reinvest, and that they were going to reinvest it into our home.’ I told him to, ‘Give it back. That I didn't agree to it. I wanted my mortgage and I did not want them to own our home.’

We conclude that Natalie raised a presumption of constructive fraud, and the burden shifted to Ankur to show how this expenditure was fair. See Dow Chem. Co., 46 S.W.3d at 241; Key, 712 S.W.3d at 705–06.

Ankur testified that he disclosed to Natalie his failure to make payments on this promissory note, but he did not testify that he executed the note with Natalie's knowledge or consent. See Zieba, 928 S.W.2d at 790 (concluding that the trial court abused its discretion in refusing to reimburse community for husband's $100,000 cash withdrawal where there was no evidence wife consented to withdrawal even though wife testified she knew about withdrawal and did not question husband about it). There is, however, evidence that: the home was purchased with a mortgage for $152,000.00 in 2007; the balance due to Ankur's parents under the promissory note did not earn interest, unlike the balance owed under the prior mortgage; the balance Ankurs’ parents paid was significant ($141,825.00) in relation to the marital estate; and having Ankur's parents finance the house afforded the couple greater flexibility in managing their expenses and financial obligations. See Knight, 301 S.W.3d at 731. Therefore, we conclude there is sufficient evidence supporting the trial court's implicit finding that Ankur's execution of the promissory note to his parents for the balance owed on the home was fair, and thus, that there was no evidence of constructive fraud regarding this transaction. See id.

5. Summary

We conclude the trial court erred in its division of the marital estate by failing to consider Ankur's constructive fraud when he transferred the community estate's forty-percent ownership interest in International Lodging to his father, disposed of $215,000.00 he received from Jay Lodging, and spent community funds on trips with the children during the pendency of the divorce and to obtain a pilot's license. See Chu v. Hong, 249 S.W.3d 441, 444–45 (Tex. 2008) (“[W]aste, fraudulent transfer, or other damage to community property are claims belonging to the community itself, so they must be included in the trial court's just-and-right division of community property upon divorce.”); Jacobs v. Jacobs, 687 S.W.2d 731, 733 (Tex. 1985) (“[O]nce reversible error affecting the ‘just and right’ division of the community estate is found, the court of appeals must remand the entire community estate for a new division.”). Thus, we sustain Natalie's fourth issue in part and overrule it in part.⁸ We reverse the trial court's division of the marital estate and remand for the trial court to divide the reconstituted marital estate in a just and right manner. See Tex. Fam. Code Ann. § 7.001; Jacobs v. Jacobs, 687 S.W.2d 731, 733 (Tex. 1985) (“[O]nce reversible error affecting the ‘just and right’ division of the community estate is found, the court of appeals must remand the entire community estate for a new division.”). Accordingly, we also reverse the appointment of the receiver to sell the marital home and need not address Natalie's fifth issue. See Tex. R. App. P. 47.1.

V. Conclusion

We reverse the portions of the final divorce decree concerning the children's conservatorship, including child-support, possession and access to the children, and parental rights under Family Code Chapter 151. We also reverse the portions of the divorce decree concerning the division of the marital estate, including the appointment of a receiver to sell the marital home. We affirm the remainder of the trial court's final divorce decree and remand for a new trial on the issue of the parties’ conservatorship of their two children and for the trial court to exercise its discretion to divide the parties’ marital estate in accordance with this opinion.

FOOTNOTES

1.   Unlike Natalie's request for sole managing conservatorship in her fifth amended petition, the request for joint managing conservatorship did not include “without geographic restrictions” or otherwise request a geographic restriction.

2.   Ankur seems to implicitly concede this on appeal by arguing that Natalie's sixth amended petition “added a new request.”

3.   The charge additionally instructed the jury: “You shall appoint both parents joint managing conservators unless you find that such an appointment is not in the best interest of the child.” It further instructed the jury that a sole managing conservator of the child has exclusive rights and a duty to manage the estate of the child.

4.   Because of this conclusion, we need not address Natalie's contention under her first issue concerning improper jury argument. See Tex. R. App. P. 47.1.

5.   Because we are reversing the parts of the final divorce decree addressing the parties’ conservatorship of their children, the trial court's March 14, 2022, temporary order giving Natalie the right to designate the children's primary residence will be in effect until modified by the trial court or superseded by an amended judgment. See In re J.N., 670 S.W.3d 614, 621 n.6 (Tex. 2023).

6.   It is unclear from the record whether an additional $50,000.00 paid to Mahesh's business from the sale of the hotel was related to the community estate's ownership interest that Ankur transferred to his father.

7.   The document assigning Ankur's interest in International Lodging to his father states that Ankur is assigning his interest “for relief and satisfaction of all amounts owed to [Mahesh] pursuant to [Ankur's] $900,000.00 Amended and Restated Promissory Note dated January 1, 2013 ․” But again, there is no evidence indicating how the satisfaction of this mentioned promissory note was in any way fair to the marital estate or the reasons behind the promissory note.

8.   We need not address Natalie's actual-fraud arguments as to Ankur's transfer of the ownership interest in International Lodging, the disposition of $215,000.00 he received from Jay Lodging, and expenditures on trips with the children during the pendency of the divorce and to obtain a pilot's license. See Tex. R. App. P. 47.1. As to Ankur's execution of a promissory note on the marital home in favor of his parents, the evidence does not conclusively establish that Ankur undertook that transaction for the primary purpose of depriving Natalie of the property or any funds. See Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001) (per curiam).

Brad Hart, Justice