Mary Ann Castro v. Manuel Castro
04-14-00785-CV
Tex. App.Jun 17, 2015Background
- Mary Ann Castro appeals a final divorce decree premised on an Agreement for Final Divorce signed Oct 30, 2013, alleging fraud and misrepresentation related to a bankruptcy stay and asset valuation; she claims Manuel Castro concealed an active bankruptcy and unpaid mortgage on the marital home at 1501 Olive St. in order to harm her and improperly inflate community equity.
- Manuel Castro allegedly failed to obtain court approval or a stay lift before signing the Agreement, contrary to bankruptcy requirements, and allegedly provided a falsified CMA valuing the home at a much higher price.
- Counsel Joseph Appelt allegedly knew of the bankruptcy stay issues and engaged in conduct intended to harm Castro, including presenting misleading valuations to the court.
- The trial court denied relief to reopen/void the Agreement, and the bankruptcy proceedings involving the home at 1501 Olive continued, with the mortgage servicers pursuing foreclosure.
- Mary Ann Castro sought to have the divorce agreement reopened, amended, or voided, and to obtain alimony and a fair division of assets, including hidden assets and debts.
- The related bankruptcy cases in the Western District of Texas involve ongoing proceedings and motions to approve, dismiss, or modify the Chapter 13 plan, with assets and liabilities tied to the same property and individuals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Agreement was void for automatic stay violation | Castro contends stay was not lifted and the agreement foreclosed community assets. | Castro argues the stay was properly lifted and agreement valid. | Denied; stay issue resolved against Castro. |
| Whether the Agreement was procured by fraud in valuing the home | Castro asserts misrepresentation by Manuel/Counsel to inflate equity. | Castro contends valuations were properly disclosed. | Denied; fraud claim not sustained for reopening. |
| Whether the court should reopen/modify the final divorce decree | Castro seeks just and right decree after discovering fraud and stay violation. | Manuel asserts final decree should stand. | Denied; motion to reopen/modify denied. |
Key Cases Cited
- In re Gidlund, 244 Ill. App.3d 675 (1993) (reopening judgments when fraud is found; no time limit on relief in genuine fraud cases)
- Sprick v. Sprick, 25 S.W.3d 7 (Tex.App.-El Paso 1999) (constructive fraud and fiduciary duties in community property relations)
- Massey v. Massey, 807 S.W.2d 391 (Tex.App.-Houston [1st Dist.] 1991) (constructive fraud and disposition of community debt)
- Moore v. Moore, 890 S.E.2d 821 (Tex.App.-Amarillo 1994) (constructive fraud and fiduciary duty in community property)
- York v. State, 373 S.W.3d 32 (Tex. 2012) (stay/voidness under bankruptcy context)