We will refer to the parties by

their first name s to avoid confusion. 1 

### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03-0 9 -00 395 -CV

Jo hn Tho m as Iz z o , A ppe lla nt

v. Sharon Dian e Izz o , Appellee

F ROM THE DISTRICT CO URT OF WI LLIAM SO N COUNTY , 425TH JUDICIAL DISTRICT NO. 07- 2606 -F 425 , HO NORAB LE J. F. CLAWSO N JR., JUDGE P RESIDING

M E M O R

A N D U M O P I N I O N Appellant John Thomas I zz o appea ls from the final decr ee in his divorce proce eding from appellee Sharon Diane I zz o. He a lso appea ls from the trial cour t’s order sustaining Shar on’s 1 challeng e to a post-mar ital propert y agr ee m en t betwee n the par ties. We affirm both the divorc e decr ee a nd the orde r finding the post-marital prope rty ag ree ment unenfor cea

ble.

BACK GR OUND Th e pa rt ie s met in the sp ri ngof

20 02 , a pp ro xima te ly

on e mon th a ft e r Joh n s tart e d h is own law practice . Sharon, who wa s working as a c ounselor at the time, owne d a re sidence on Anac acho Cove in Round Rock (the “Ana cac ho Cove residenc e”) , and had invested an inhe ritance of ar ound $180,000 to $200,000 in mutual funds. At the hearing on her challeng e to the post-mar italA tt h e e n f o r c e a b i l i t y h e ar i n g , J o h ne s t i m a t e d t h e f a i r m ar k e tv a l u e o f

t h e S o u t h M a ys 2 pr op e rt y to b e be tw e e n $ 70 0, 00 0 a nd $9 00 ,0 00 , a

nd F e de ra lis t’ s r e ma ini ngde bt o n th e pr op e rt y to be $500,000. The appra isal district r ecor ds list the va lue of the South May s proper ty as $821,833 in 2006. Ba sed on t his evidenc e, the trial court made a finding that the prope rty ’s value e x cee ded $8 00 ,0 00 a t the tim e the a g re e me nt wa s exec ute d, so that Fe de ra lis t had a pp ro xima te ly

$3 00 ,0 00 in e qu ity a t that tim e . At the he ari ng , John e sti ma te d the g ro ss re nt re c e ive d by F e derali st fro m i ts tenants to be a

pproxi mately

$5,000 per month. John’s law firm did not pa y rent for its offic e spac e i nt h e b u i l d i n g. 2 proper ty ag ree ment (the “ enfor cea bility hear ing” ), Sharon testified that i n t h e fa l l of 2002, John advised he r that “i n v esting in rea l estate or r eal pr operty was much be tter than mutual funds” and that he r m on e y

“ wo uld be be tte r u se d a

nd inv e st[e d] in a pie c e of pr op e rt y wh e re a law f ir m w ou ld be situated .” John t estified that this discussion took place bec ause Shar on was c oncer ned that mutual funds wer e a r isky

investment, leading him to sugg est that sh e i n vest in rea l estate instead. O n Marc h 1 2, 20 03 , Sh aro n a nd Johnfo rm e d a

n e nti ty cal led F e de ra lis t Inv e stm e nts , L .L .C. (“ F e de ra lis t” ) f

or the purp os e of

purc ha sin g land

a nd c on str uc tin g an o ff

ic e bu il di ng tha

t w ou ld house John’s law firm, with the rema ining of fice space being lease d to tenants. Sharon invested $80,000 in exchang e for 80,000 share s in F eder alist, a nd J ohn invested $5,000 in exchang e for 5,000

s h ar e s . F e d e r a l i s tt h e np u r c h a s e d r e a l p r o p e rt y o nS o u t h M ays i nR o u n d R o c k ( t h e “ S o u t h M a ys pr op e rt y ” ) f or a pp ro xima tel y $1 80 ,0 00 , a nd c on str uc te d a n o ff ic e bu ild ingon

the sit e a t a construction cost of a

pproxi mately

$525,000. The pa

rties wer e mar

ried on Apr il 26, 2003. 2 Construction on the South May s proper ty was c ompleted in 2005. I n J anuar y 2004, Sharon dee ded the Ana cac ho Cove reside nce to John. Both parties testified that this was done f or the purpose o f re fi n an ci n g the home. Ac cordingto J ohn, Sharon d e e d e d h i m t h e p r o p e rt y

b e c a u s e h i s c r e d i tr a t i n g w a s n e e d e d t o a c c o mp l i s h t h e r e f i n an c e . InHa d the te rm s of the po st- mari ta l pro pe rt y a g re e me nt be e n en fo rc e d, the inc ome us e d to 3 pa y of f t he lot s a ft e r t

he e ff e c tiv e date of

the a g re e me nt wo uld have be e n co ns ide re d Joh n’ s se pa rate proper ty , while the down pa

y ment and any

pay ments made prior

t o t h e ef

fec tive date of

the ag ree ment would have been community proper ty . Be cause the trial cour

t ruled that the post-mar ital a g re e me nt w a s une nf

or c e a ble , th e law f

ir m in c ome us e d to make the do wn pa y me nt a nd a ll s u b s e qu e n tp aym e n t s o nt h e l o t s w a s c o n s i d e r e d c o m m u n i t y p r o p e rt y. J ohn strong ly disputes the trial court’s f inding that his firm e x cee ded $750,000 in value at 4 the time the ag ree ment was sig ned. This issue is discussed in more de tail below. 3 Se pte mbe r 2 00 4, the pa

rt ie s u se d the An a c a c ho Cov e re sid e nc e a s c oll a te ra l to purc ha se tw o lo ts i n the Ga briels Ov e rl oo k d e ve lop me nt i n G e or g e tow n, Te xas ( the “ Ga br ie ls O ve rl oo k lo ts” ). Th e se lot s we re fu lly pa id of

f at the tim e of the pa

rt ie s’ div or c e de c re e . John te sti fi e d tha t he us e d in c ome fr om h is l aw p ra c tic e to m a ke the do wn pay men ts and

to s ub se qu e ntl y

pa y of f t he Ga br ie ls Ov e rl oo k lo ts. 3 I n the summer of 2006, John directed a n associate at his firm to draf t a post-mar ital proper ty ag ree ment dividing the pr operty owned by

the par ties. The ag ree ment included a sa les provision stating that Sharon w ould transfe r her 80,000 share s in F eder alist to J ohn in exchang e for an $80,000 note, to be pa id over the c ourse of ten y ear s at a rate of 4.2% inter est. As a r esult, J ohn would be the sole ow ner of Fe dera list, which in t u rn o wn ed t he South May s proper ty . The

a g r e e m e n t f

u rt h e r d e s i g n a t e d t h e A n a c a c h o C o v e r e s i d e n c e a s S h ar o n ’ s s e p ar a t e p r o p e rty . Wit h respe ct to the par

ties’ marital e state, the a g ree ment desig nated al l o f t h e communit y proper ty as J ohn’s sepa

rate proper

ty , with the exception of persona l propert y s u b j ect to S haron’ s sole control and her counseling prac tice wor

th approxim ately

$7,500. Jo hn

w o u ld r ece ive his law pra ctice, w hich he va l u e d a ta p p r o xi m a t e l y

$ 7 7 8 , 0 0 0 s h o rt l y

a f t e r t h e a g r e e m e n tw a s e xe c u t e d , p e r s o n a l p r o p e rty

su bje c t to his so le c on tr ol, and bo th of the Ga br ie ls Ov e rl oo k lo ts. At the t ime the ag ree ment was 4I n connec tion with its orde r finding the marital proper ty ag ree ment unenfor cea

ble, the trial 5 court made a f

i n d ing of fac t that the Gabr iels Overlook lots had $100,000 in equity as of Aug ust 2006. I t is unclear how the trial cour

t rea ched this ca lculation. Ba sed on John’s testi mony a t th e e nf or c e a bil ity he ari ng , it

wo uld a pp e ar t hat th e e qu ity in the lot s at th a t ti me wa s c los e r t o $40,000. For purposes of calc ulating the total value of c ommunity proper ty awa rded to John in t he ag ree ment, we will assume a n equity amount of $40,000.

4 executed, the down pay

ment and all subsequent pay ments on the Gabr iels Overlook lots had be en

ma de wi th c omm

un ity fu nd s. Th us , th e te rm s o f t he a g re e me nt g a ve Johnov e r $ 80 0, 00 0 in

c o m m u n i t y p r o p e rt y, w h i l e S h ar o nw o u l d r e c e i v e a p p r o x i m a t e l y

$ 7 , 5 0 0 i nc o m m u n i t y p r o p e rt y. 5 At the enf

orce ability

hearing , the trial cour t hear d testimony

reg ardingthe circ umstances surr ounding the parties’ execution of the ag ree ment. Sharon testified that John led he r to be lie ve the marr ia g e c ou ld no t c on tin ue un le ss sh e sig ne d th e a g re e me nt, statin g that sh e on ly did so in order to alleviate the pre ssure fr om J ohn. I n addition, both parties testified to Sharon’s fe ar that she would lose her

$80,000 investment in Fede ralist u n l es s s h e si g ned the a g ree ment. When asked if she executed the ag ree ment of her own fre e will, Sharon answe red, “ Yes, I did, but under g reat duress. I

did not want to sign it.” When aske d whether she di d so voluntarily , she answe red, “No, I did not.” Be cause the a gre em en t require d the sig nature of an attorney on Sharon’s be half, Sharon took the ag ree ment to two differ ent attorne y s befor e sign i n g i t

. T h e first attorney , afte r review i n g t h e ag ree ment, declined to sig n it. Sharon then went to the off ice of Patricia B rown, a friend of both J ohn and Sharon, on Aug ust 16, 200 6. Sharon testified that she did not have an appointment with Brow n, but that she showed up at B rown’s of fice in the middle of the day , upset and cr y ing. B rown provide d the following testimony about her meeting with Sharon:The pa rties ag ree that the value of J ohn’s firm incr ease d signific antly afte r the mar

riag e. 6 J ohn’s i n come tax statement from 2002, the y ear befor e the pa

rties marr ied, indicates that his net e arn ing s f ro m hi s la

w p ra c ti ce th at y e ar w e re $5 1, 68 0. He te sti fi e d th a t in su bs e qu e nt y e ars , h is ea rn i n gs we re i nt h e h u n dre d s o f t h o u s an d s o f d o l l a r s . S h ar o nal s o t es t i fi edt h at J o h n ’s ea rn i n gs from prac ticing law g rew substantially during the marr iag e, stating , “[A]s his law firm g rew , Isent him a lot of clients, some of his big g er c lients.” 5 She appea red to be very upset. She crie d a g ood bit during that appointment and she seeme d to me to be compelled to sig n it no matter what I said about it. I wo u l d n’t have a ny way to rea lly asce rtain whether the document was fair or not without having a whole lot more information about their estate than I had at that time, but from what sh e ind ic a te d to me ab ou t what she ha d bro ug ht int o th e marr ia g e , it wo uld se e m to favor J ohn, and I

asked he r why

she would sig n it, an d s h e s ai d , “You don’ t un de rs tand , I

have to sig n it to ma ke the pr e ssu re sto p at hom e .” An d it

se e me d to me that she was g oing to sig n it pr etty much no matter w hat I said to her. She wa s qu ite up se t.

B ro wn fu rt he r t e sti fi e d th a t sh e wa s not pr ov ide d with any re c or ds or dis c los ur e s r e g ard ingthe I zzos’ financ es. Whil e Brown testified that she advised Sharon not to sign the a g ree ment, both Sharon and Br own sig ned the a g ree ment befor e Sharon le ft the off ice. At the enf orce ability hear ing, the parties a g ree d that the value of Sharon’s c ounseling prac t i ce was a

pproxi mately

$7,500. The va lue of John’s law firm, howeve r, wa s disputed. In 6 Dec ember

2006, four months afte r the post-mar ital proper ty ag ree ment was sig ned, anothe r attorne y at the firm, Scott Hese lmey er, pur chase d a 45% inter est in the firm in exchang e for a $350,000 note, to be paid off o v er a 30-y ear term. Unde r the ter

ms of the ag ree ment, J ohn would reta in a 55% intere st in the firm, repr esenting a value of $428,000. John t estified that these neg otiations do not indicate that the firm had a total va lue of $778,000 in D ece mber 2006, stating, “ Scott has since le ft the law f

ir m ba sic a lly

say ing he mad e a

ba d d e a l and

it w a sn ’t

wo rt h th a t.” On

c ro ss-Whil e the r emainder of the finding s of fac t a

nd conclusions of law r efe r to J ohn as “Mr

. 7 I sso,” and at times r efe r to Shar on as “Mrs. I sso,” we will substitute the cor rec t spelling of “ I zz o.” 6 examin ation, J ohn acknow ledg ed that at the time the ne g otiations were ma de and H eselmey er a g ree d to pay $350,000 for a

45% intere st in the firm, Hese lmey er had acc ess to all of the firm’s f inancial books and re cords. Ac cordingto Heselmey er’ s testimony , he wa s actua lly responsible for the firm’s financ ial acc ountin g from 2003 until the time he left the f irm. I n addition, J ohn testified that Hese lmey er worke d on the firm’s conting ency -fe e ca ses and r ece ived “f airly larg e bonuses” when

cer tain case s were settled, sug g esting that Hese lmey er w as fa m i liar with the potential value of the firm’s pe nding c ases. John further e x plained that He s el m ey er ’s $350,000 note had since be en for g iven.

Johnfi le d f

or div or c e in No ve mbe r 20 07 and so ug ht to e nf or c e the te rm s o f t

he po stmarital prope rty

ag ree ment. Sharon filed a counter -pet ition for divorce , alleg ing, a mong othe r things, involuntariness, unconsciona bility , and brea ch of fiduciar y duty . The trial c ourt conduc ted a bifurc ated tria l on the enfor cea bility of the a g ree ment and ultimately issued an order sustaining Sharon’s c h al leng e to the ag ree ment. I n support of its order, the trial court made the following finding s of fa ct and c onclusions of law:

F I ND I NG S OF F AC T 1

. Pr io r

to their m ar

r ia g e M r . I [zz ]o beca

me Sharon May ’s attorne y , and 7 I nv e stm e nt A dv iso r, and

too k p os se ssi on

of $8 0, 00 0. 00 of

he r a sse ts. 2. I zzo inv e ste d May ’s $8 0, 00 0 in a L L C, and a llo c a te d 80 % of the Eq uit y in the c omp an y

t o h e r an d 2 0 % t o h i m s e l f

, a l t h o u g h h i s i n v e s t m e n tw a s o nly $5,000.00, all befor e they wer e mar ried.7

3. The L L C prospere d under M r. I zz o’s manag ement, and attained a va lue of over $800,000.00 w ith debt of approximately $500,000.00. 4. Mr. I zz o’s law pr actice g rewduring the mar ri age from a star t-up nominal value to a va lue of at least $750,000.00 at the t ime of the e x ecution of the ag ree ment in question. 5. Mr. I zz o invested community funds in 2 residential lots in which the re w as at least a $100,000.00 equity

in Aug ust 2006. 6. Mr. I zz o prese nted Sharon I zz o with a propose d marital ag ree ment which not on ly a wa rd e d h e r o nly

a tok e n s ha

re of the c omm

un ity a sset s, bu t a lso re qu ir e d h e r t o c on ve y

he r s e pa rate pr op e rt

y to h im fo r a g ro ssl y

ina de qu a te consideration. 7. Mr. I zz o subjected Sharon I zz o to e x treme and unrea sonable pressur e a nd dure ss i n o rd e r t o c oe rc e he r i nto sig nin g the a g re e me nt. 8. Mr . I zzo di d n ot a dv ise Mr s. I zzo of the va lue of any

of the c omm

un ity pr op e rt y or of the va lue of

he r s e pa ra te pr op e rt y e qu ity in t he L L C. 9. At some point Mrs. I zz o beca me convinced t hat she would be lucky to ge t her or ig ina l in ve stm e nt b a c k, and a llo we d M r. I zzo to tr e a t he r i nv e stm e nt a s a loan. 10. Sharon I zz o signe d the marital ag ree ment under e x treme dur ess from Mr. I zz o. 11. Even thoug h Mr. I zz o decide d to treat Mrs. I zz o’s in v es t m en t as a loan, he did not offer

any interest for t h e y ea rs her mone y was invested; nor

did he offe r a r easona

ble rate of intere st on the defe rre d repa y ment; nor did he secur e the note w ith a secur ity ag ree ment on the share s repr esenting 80% of the L L C.

CONCL USI ONS OF LAW 1. At the time Mr. I zz o beca me attorne y , investment advisor and c ustodian of Sh ar o nM ay ’ s f

u n d s a f id u c ia r y r e lati o n s h ip ar o s e , in c id e n t t o w h ic h M r . I zzo u n d e rt o o k

t h e d u t i e s t h e l aw i mp o s e s u

p o nt h e f i d u c i ar y. 2. The subseque nt marriag e of the parties did not relieve Mr. I zz o of the duties implicit i n the fiducia

ry relationship.8

3. Mr. I zz o violated his fiduciar y duties to Mrs. I zz o in all the particulars set forth in fa ct finding s No’s. 6, 7, 8, 9, & 11. 4. Section 4.102 of the Texas F amily Code does not pr ovide for divesting a spouse of his or her separ ate proper ty , but c ontemplates being used to conver t c o m m u n i t y p r o p e rt y t o s e p ar a t e p r o p e rt y. 5. Throug h the misu s e o f the for eg oing statute, Mr. I zz o attempted to depr ive Mrs. I zz o of substantial amounts of sepa rate and community

proper ty to the e xten t of se ve ra l hu

nd re ds of tho us and s o f d oll ars . 6. The propose d “mar ital ag ree ment” p repa red by Mr. I zz o and for ced upon Mrs. I zz o was unc onscionable[] when it was signe d. 7. Mr s. I zzo di d not sig n the a g re e me nt v olu nta ri ly , b ut u nd e r e xtre me dure ss, coer cion[,] and out of de speration. 8. Mr s. I zzo wa s not pr ov ide d a fa ir and re a so na ble dis c los ur e of

the pr op e rt

y or financ ial obligations of Mr. I zz o. 9. Mr s. I zzo di d n ot v olu nta ri ly and e xpre ssl y wa ive , in wri tin g [,] any

ri g ht t o disclosure of the proper

ty or financ ial obligations of Mr. I zz o. 10

. Mr s. I zzo did no t have , or re a so na bly c ou ld no t have ha d, adeq uate knowledg e of the proper

ty or financ ial obligations of Mr. I zz o.

I n Marc h 2009, the t rial court conducted a separ ate tria l on the divorce . I n the final divorce decr ee, the trial court divided the community proper ty by awa rding J ohn his law prac tice, a motor vehic le, and pe rsonal prope rty subject to his sole control. Sharon w as aw arded her

c ouns e lin g bu sin e ss, a

mot or ve hic le , pe rs on a l pr op e rt y su bje c t to he r s ole c on tr ol, and the Ga br ie ls Ov e rl oo k lo ts. Th e tr ia l c ourt a lso c on fi rm e d 8 0, 00 0 share s o f F e de ra lis t a s Sh aro n’ s se pa rate proper ty and 5,000 shar es of F eder alist as J ohn’s sepa rate proper

ty . The trial court further

confirme d the Anac acho Cove residenc e as Shar on’s sepa rat e proper

ty and an a dditional motor vehicle as J ohn’s s e p ar a te p r o p e rty

. I n f in d in g s o f f

a c t is s u e d a f

te r th e d iv o r c e d e c r e e , th e tr ia l c ourt9

deter mined that as of the date of the divorce , the value of Sharon’s c ounseling business was $7,500, the va lue of

John ’s law p ra c tic e wa s at le a st $ 50 0, 00 0, and the c omb ine d v a lue of

the Ga br ie ls Over look lots was $106,041.96.

J ohn now appe als from both the orde r sustaining Sharon’s c halleng e to the enfor cea bility of the post-mar ital property ag ree ment and the f

inal decr ee of

divorce

. STA ND AR

D O F RE VI EW The p arty c h a ll e n g in g th e e n f o r c e a b il it y o f a ma r it a l p r o p e rty a g r e e me n t b e a r s the burden of proving the ag ree ment was involuntary or unconsc ionable. See Tex. Fam. Code Ann. § 4 .1 05 (We st 2 00 6) ; Plet cher v. Goe tz , 9 S.W .3d 442, 445 (Tex. App.—For t Worth 1999, pet. denied) (op. on reh’g ). Whether a party executed an a g ree ment voluntarily is a question of fa ct depende nt upon all the circ umstances and the mental ef fec t on the party

claiming involuntary execution. Ma rti n v . M

ar tin , 2 87 S.W. 3d

26 0, 26 3 (Tex

. App. —D a lla s 2 00 9, pe t. d e nie d) . A s a revie wing court, we may

n o t s u b s t itute our judg ment for that of the trial cour

t with respec t to the resolution of fa ctual issues committed to the trial court’s discr etion. W alker v . Pack

er , 827 S.W .2d 83 3, 83 9 (T e x. 19 92 ). I n re so lvi ng fa c tua l is su e s, the tr ia l c ourt is the so le jud g e of

the c re dib ili ty of the witnesses and the we ight to be g iven their testimony

. Raymond v . Rahme , 78 S.W .3d 552, 556 (Tex. App.—Austin 2002, no pet.).

The trial c ourt has broa d discretion in dividing the ma rital estate at divorce. See Murff v . M

ur ff , 6 1 5 S. W. 2 d 6 9 6 , 6 9 8 ( T e x. 1 9 8 1 )

. O n a p p e a l, w e p r e s u me th a t th e tr ia l court exercised this discre tion properly and will reve rse the ca u s e only wher e ther e is a c lear

abuse of discretion. Se e Be ll v . B e ll , 513 S.W .2d 20, 22 (Tex. 1974). A clea r abuse of discre tion is shownI n his init ial brief on a p p ea l , J o h n al s o raised a

point of err or ar g uing that the trial court 8 err ed in failing t o file findings of fact and conclusions of law in support of the divorc e dec ree . Ba sed on the supplemental c lerk’s r ecor d and John’s supplemental brief, it appe ars that f indings of f

act a nd c on c lus ion s o f l aw w e re in f a c t f ile d. Th is p oin t of

e rr or is t he re fo re moo t. Johna lso ra ise s a

po int of e rr or arguin g that Sharo n rat if ied the po st- mari ta l pr op e rt y ag ree ment by

acc epting pay

men t s fr o m J o hn pursuant to the provision g overningthe sale of her interest in Feder alist. Ratification is an aff irmative def

ense a nd must be pleade d to avoid waiver

. Pe tro le um An c ho r E

qu ip. , I nc . v . Ty ra , 419 S.W .2d 829, 834 (Tex. 1967). Be caus e J o h n did not raise the issue of ratification until his m otion for new tria l, this poi nt of err or has be en wa ived. See id. 10 only if the division of the prope rty is manifestly

unjust. See M

ann v. Mann , 607 S.W .2d 243, 245 (Tex. 1980)

. “The party attacking the proper ty division bears the he avy

burden of

showing that the trial court’ s proper

ty division was not just and rig ht.” Pletche r , 9 S.W .3d at 446.

DI SCU SSIO N Whil e Johnra ise s 5 7 p oin ts o f e rr or on a ppeal , th ese poin ts c an b e g e ne ra lly

su mma ri zed a s tw o d ist inc t is su e s. F ir st, he argue s th a t th e tr ial co ur t e rr e d in fi nd ingthe po st- 8 marital prope rty

ag ree ment to be une n fo rc eable , challeng ing e ach of the finding s of fa ct and conclusions of lawissued in support of this determination. Second, he argues that the trial court’ s div isi on of

pr op e rt y in t he fi na l de c re e of

div or c e wa s “ g ro ssl y

dis pr op or

tio nate ” and

a c le ar a bu se of discre tion. I n support of this argument, J ohn challeng es t he trial court’s finding that his l aw f irm had a va lue of at least $500,000 at the time of the divor ce.

I. Post-Marital Property Agree ment

Cha pte r 4 of the Te xas F a mil y Cod e g ov e rn s p re mari ta l and po st- mari ta l pr op e rt

y ag ree ments. See Tex. Fam. Code Ann. §§ 4.001-.206 (West 2006). Section 4.102 allows spouses11

t o e n t e r i n t o a g r e e m e n t s f

o r t h e p art i t i o no r

e x c h an g e o f

c o m m u n i t y p r o p e rt y i n t o s e p ar a t e p r o p e rt y. Id. § 4.102. I n challeng ing the enfor cea bility of the par

ties’ post-marital a g ree ment, Sharon invoked fa mil y c od e se c tio n 4 .1 05 , w hic h s ta te s: (a) A partiti on or ex chang e agr eeme nt is not enforc eable if the par ty ag ainst whom e nf or c e me nt i s r e qu e ste d p ro ve s th a t: (1) the pa

rty did not sign the a g ree ment voluntarily ; or (2) the a g ree ment was unc onscionable w hen it was sig ned and, be fore e x e c u t i o no f

t h e a g r e e m e n t , t h a tp art y: (A ) w a s n ot p ro vid e d a

fa ir and re a so na ble dis c los ur e of the pr op e rt y o r f i n an c i a l o b l i g a t i o n s o f

t h e o t h e r p art y; (B ) d id n ot v olu

nta ri ly and e xpre ssl y wa ive , in w ri tin g , a ny ri g ht t o dis c los ur e of

the pr op e rt

y or fi na nc ial ob lig a tio ns of

the oth e r p art

y bey ond the disclosure pr ovided; and (C ) d id not hav e, o r r e a so na bly c ou ld n ot h a ve ha d, a de qu a te kn o w l e d g e o f

t h e p r o p e rt y o r

f i n an c i a l o b l i g a t i o n s o f

t h e o t h e r p art y. (b) An issue of

unconsciona

bility of a pa rtition or ex ch an ge agr eeme nt shall be decide d by

the cour t as a matter

of law. (c ) T he re me die s a

nd de fe ns e s in

thi s se c tio n are the e xclu siv e re me die s o r d e fe ns e s, inc lud ingc omm on

law r e me die s o r d e fe ns e s.

Id. § 4.105. I n sustaining Shar on’s cha lleng e, the tria l court found that she had satisfied her bur den of pr oof on both of t h e available g rounds for inva lidating a n ag ree ment under section 4.105—involuntariness and unc onscionability

. See id. Be caus e o n ly o n e gr o u n d is nece ssary to satisfy section 4.105, the trial c ourt’s orde r may be af firmed if Sharon has satisfied he r burde n of proof on e i t h e r

i n v o l u n t ar i n e s s o r

u n c o n s c i o n a

b i l i t y.J ohn testified that he g ained no financ ial knowledg e while working at the commer cial re al 9 estate c ompany

beca use he simply “dea lt with personne l a nd things like[] that.” His testimony on cross-e x amination sug g ests that this asser tion conflicts with represe ntations he made on F eder alist’s loan applications to the S mall Business Adminis tration reg ardinghis backg round in the sec urities an d i n v e s t m e n ti n d

u s t r y. 12 Involuntary Ex ecution A p a r tit ion or e xch ang e a g re e me nt u

nd e r f a mil y c od e se c tio n 4 .1 05 is n ot e nf or c e a ble i f t h e p art y c h a l l e n g i n g e n f

o r c e m e n te s t a

b l i s h e s t h a th e o r

s h e d i d n o ts i g nth e a g r e e m e n tv o l u n t a r i l y. Id. Whil e sec tion 4.105 does not define “voluntarily ,” cour ts have “ g ener ally

construed it to mean

an ac tion that is t aken intentionally or by the fre e exerc ise of one’ s will.” Ma rti n , 28 7 S

. W

. 3d at 263. “Ge nera lly , whether a par ty executed an a g ree ment volu n t ar i l y . . . is a question of fa ct depende nt upon all the circ umstances a nd the mental ef

fec t on the party

claiming involuntary execution.” Id.

Be cause the exist ence of a fiduciar y relationship betwe en the parties is r eleva nt to our analy sis of whether

the prope rty

ag ree ment was e x ecute d involuntarily , particula rly the mental ef

fec t on Sharon as the pa

rty claiming involuntary

execution, we will beg in our analy sis by revie wing the trial court’ s finding that a fiducia ry duty arose betwee n the par t i es wh en J o hn acte d as Sharon’ s attorney , investment advisor, and c ustodian of her funds prior to the mar

riag e. At the time the parties formed Fe dera list for the purpose of developingcommerc ial proper ty , Sharon wa s employ ed as a counselor, and ther e is no indication that she had a ny profe ssional ba ckg round in r eal estate development or financ e. John was a pra cticing attorney and h a d p r e v i o u s l y w o r

k e d f o r t w o o r t h r e e ye ar s a ta

c o m m e r c i a l r e a l e s t a t e c o mp an y. Ac c or din g to 913

Sha ro n, the fo rm a tio n of F e de ra lis t c a me a bo ut wh e n Johnsu g g e ste d th a t sh e mov e he r i nv e stm e nts out of mutual f

unds and into a

commerc ial proper

ty venture with him. S pecif ically , Sharon testified: [H] e said that investing in rea l estate or r eal pr operty was much be tter than mutual funds because y ou never knew what the m arke t was g oing to do a nd rea l estate wa s much more stable and that my money would be better use d and investing in a piece of prope rty

wher e a law firm would be situated would g ive me much be tter re turn for m y m o n e y.

J ohn also testified that he came to Shar on with the idea of investing her inhe ritance in commerc ial proper

ty rathe r than mutual f

unds. He further

testified that his plan was to utiliz e the

commerc ial proper

ty t o h o u s e his law firm a nd lease out the rema inder of the building. John disag ree d, howeve r, with Sharon’s testimony that he tol d her real property would y ield a better return than mutual funds, s tating, “I simply told her that I

thought r eal e state wa s safe r.” A t any rate , based

on J o h n ’ s a d v ic e , Sh ar o ninv e s te d $ 8 0 , 0 0 0 in

F e d e r a li s t i ne xc h an g e f o r an8 0 % in te r e s t. Jo hn

rec eived a

20% intere st, despite having invested only $5,000, or appr ox imately 6% of the or igina l capital. The formation docume nts for F eder alist were draw n up by Hese lmey er, who was the n an associate in

Jo h n ’ s la w f ir m. F e d e r a li s t’ s arti c le s o f o r g an iz a ti o nid e n ti f

y Jo h na s th e o r g a n izer of the e ntity

. An attorne y -client re lationship may be implied from the a ctions of the par ties, see Bright v. Addison , 171 S.W .3d 588, 596 (Tex. App.—Dallas 2005, pe t. denied) , and does not de pend on the pay

ment of a f

ee, see Prigmorev. Hardware Mut. I ns. Co. , 225 S.W .2d 897, 899 (Tex. Civ. App.—Amar illo 1949, no writ). I n org anizing F eder alist and manag ing the draf ting of the formation documents, John provided Sharon with the leg al servic es t y p i cally related to entity

formation.14

Sha ron, by sig nin g the fo rm a tio n d oc ume nts c re a te d at John ’s dir e c tio n, manif e ste d h e r i nte nt t o

rec eive those se rvice s. See M acFarlane v . Nelson , N o . 0 3

- 0 4

- 0 0 4 8 8

- C V , 2 0 0 5 T e x . A p p . LE X IS 76 81 , at *1 3 ( Te x. Ap p. —A us tin Sept. 15, 2005, pet. denied) (mem. op.) (citing Restatement (Thir d) of the L aw G ov e rn ingL awy e rs § 1 4 ( 2000 )) (atto rn e y -c lie nt r e la tio ns hip is i mpl ie d w he n b oth attorney and client manif

est their intent that leg al servic es will be provided)

. Ba sed on this rec ord, t here is sufficie nt evidenc e to support the t rial cour t’s finding of fa c t th a t John

be c a me Sha

ro n’ s att or

ne y , inve stm e nt ad

vis or , an d cu sto dia

n o f h e r a sse ts p ri or

to the par ties’ marr iag e. As a re s ult, we also ag ree with the trial court’ s conclusion that J ohn owed Sharon a fiduc iary

duty that arose prior to the par ties’ marr iag e. See M

eye r v. Cathey , 167 S.W .3d 327, 330 (Tex. 2005) (holding that fiduciar y duties arise a s matter of law in cer tain formal

re la tio ns hip s, inc lud inga tto rn e y -c lie nt a nd tr us te e re la tio ns hip s) ; W

estern Reserv e Life Assurance Co. v. Graben , 233 S.W .3d 360, 373 (Tex. A pp.—For t Worth 2007, no pet.) (upholding finding of exis tenc e o f

f id u c ia r y r e lati o n s h ip b e tw e e nin v e s tm e n t a d v is o r an d c li e n ts in

li g h t o f f o r ma l relationship of principal and a g ent).

Significa ntly , the fi duciar

y duty J ohn owed to Sharon in a cting as her attorney and investment advisor is independe nt from the g en er al fiduciar y duty that he owe d to Sharon as her spouse, a duty which this Court has pr eviously held to be insuffic ient, standing alone, to ra ise a fa ct issue o n involuntary

execution of a mar ital property ag ree ment. Se e Sh esh un off v . S he sh un off , 17 2 S. W.3 d 6 86 , 7 01 (Tex

. App. —A us tin 20 05 , p e t. d e nie d) (s ta tin g tha t de sp ite fi du c iary

du ty betwee n spouses, “the le g islature manife sted the strong policy pref ere nce that voluntarily

made

mari ta l pr op e rt

y a g re e me nts be e nf

or c e d” ). Ne ve rt

he le ss, it i s w or

th n oti ngthat e ve n if t he on ly fi du c iary re sp on sib ili ty in thi s ca se aro se fr om the g e ne ra l duty be tw e e n s po us e s, su c h a du ty wo uldTh e fi du c iary du ty be tw e e n s po us e s te rm inate s d ur ingc on te ste d d ivo rc e pr oc e e din g s in 10 w h ic h b o th p arti e s ar e r e p r e s e n te d b y c ounsel. S ee Solares v. Solares , 232 S.W .3d 873, 881 (T e x. Ap p. —D a lla s 2 00 7, no pe t.)

. Ho we ve r, thi s ru le of a uto ma tic te rm inatio n is ina pp lic a ble to thi s ca se , as it is un dis pu te d tha t the pa rt ie s exec ute d the a g re e me nt p ri or to a ny div or c e pr oc e e din g s. Th is C ourt

ha s d e c lin e d to a do pt “ a c ate gori c a l r

ule that sp ou se s w ho hir e se pa rate c ouns e l to n ego t i ate a proper

ty division can neve r owe fiduciar y duties to one another .” Sh esh un off v . S he sh un off , 1 72 S.W. 3d

68 6, 70 1 n .2 1 ( Te x. Ap p. —A us tin 20 05 , pe t. de nie d)

. Ev e n if su c h a ru le did a p p ly , th e r e c o r d r e f

le c ts th a t B r o w n , th e a tt o r n e y w h o s ig n e d th e p o s t- ma r it a l a g ree ment as Sharon’s co u n s el , did not actually “neg otiate” the pr operty division, but mere ly

revie wed the completed a g ree ment and in fa ct advised Shar on not to sign it. I n any event, a s previously discussed, the fi du c iary

du ty John owe d to Sha

ro n g oe s a

bo ve and be y on d th e g e ne ra l f

idu c iary re la tio ns hip be tw e e n s po us e s b e c a

us e he a c te d as Sha

ro n’ s att or

ne y and inv e stm e nt ad

vis or in c on ne c tio n w ith he r i nv e stm e nt i n F e de ra lis t. 15 rema in releva

nt to our analy sis of t he st atutory aff irmative defenses to enfor ceme nt of a post-mar ital proper ty ag ree ment. S

e e M a r sh v . M ar sh , 949 S.W .2d 734, 740 n.4 (Tex. App.—Houston [14t h Dist.] 1997, n o writ) (noting that statutory defe nses for both pr emar ital and post-marital ag ree ments are ident i ca l , b u t that “in post-marital ag ree ments a fiducia ry duty exis ts that is not pr e se nt i n p re mari ta l ag re e me nts be tw e e n p ro sp e c tiv e sp ou se s” ); see also Thomas M. Fe ather ston, J r. & Amy

E. Douthitt, Ch a n g in g

th e R u le s b yA gr e e m e n t: Th e Ne w E r a in Ch a r a c te r iz a ti on, Ma nage me nt, an d Li ab ili ty of M ar ita l P ro pe rty , 49 Ba

y lor L . Rev. 271, 314 (1997) ( “B oth the formalities re quired a

nd the rules of

enfor ceme nt for mar ital ag ree ments are essentially the same a s fo r p re mari ta l a g re e me nts.

. . . On the oth e r h and , [po st- mari ta l] a g re e me nts may be pa rt ic ula rl y susceptible to cha

rg es of involuntarine ss and unconsc ionability , beca use of the r elative positions of the par ties.”). The fiduc iary

duty betwee n spouses extends t o a d uty to disclose materia l 10 information in bus i n es s t ra n s actions, as one Texas court has he ld that where spouses signe d an

a g re e me nt c ov e ri ngthe dis po sit ion of the ir sto c k in a c omp any fo r wh ic h on e of the sp ou se s w a s a fo un de r, of

fi c e r, and dir e c tor , th e sp ou se wi th “ an in sid e r’ s k no wl e dg e of

the a ff a ir s and pr os pe c ts” of the c ompany

had a f iduciary duty to de al fairly with the other spouse in a cquiring from her any16

rig hts in the stock, including a duty to disclose the true v alue of the company

. Miller v. Miller , 7 0 0 S

. W

. 2 d 9 4 1 , 9 4 5 -4 6 (T ex . Ap p . — Da l l as 1 9 8 5 , wr i tre f’ d n . r. e. ) ( ci t i n g Johnson v. Pe ckham , 120 S.W .2d 786, 7 8 7 -8 8 (Tex. 1938) (holding that partne r has “ absolute dutyto disclose” to copartne r, whose inter est he wa s purcha sing, a ll important infor mation a s to va lue)). The e x istence of a duty to disclose materia l fac ts is even more compe lling in the pre sent ca se, whe re John was ac ting in a fiducia

ry capa city separ ate a

nd apar t from his fiduciar

y obligation as Sharon’s spouse. Havingdeter

mined that J ohn owed Shar on a fiduc iar y d u t y as her attorney and investment advisor in addition to the fiduciar y duty that g ener ally exis ts be tween spouse s, we now

re v i ew t h e ev i dence for support of the trial cour

t’s conclusion that John breache d this duty . The fiduciar y obligation impos es a duty to exercise g ood fa i t h an d candor, to disclose all rele vant inf or ma tio n, and

to r e fr a in f

ro m us ingthe re la tio ns hip to b e ne fi t th e fi du cia ry ’s pe rs on a l in te re st, except with f

ull knowle dg e and consent of the principal. See, e .g. , Kin zb ac h Tool Co. v . Co rb e ttW allace Corp. , 16 0 S.W.2 d 5 09 , 5 12 (T e x. 19 42 ); Chien v. Chen , 759 S.W .2d 484, 495 (T e x. Ap p. —A us tin

19 88 , n o w ri t) ; see also Goffney v. Rabson , 56 S.W .3d 186, 193 (Tex. App.—Housto n [14t h Dist.] 2001, no pet.) (stating that f iduciary relationship between attorney s and clients require s “absolute perf ect candor , openness and honesty , and the a bsence of any

conce alment or dece ption”). I n this case, John advised Sharon to invest $80,000 in Fede ralist, a re al estate de velopment company in wh i ch he would own a minority interest. At a later date, once Fe d er al i s t ’s p ro p er t y

h o l d i n gs h addra m at i ca l l y i n cr ea s edi nv al u e, J o h np er s u ad edS h ar o nt o s i gn

a mar ital property

ag ree ment requiringher to sell her interest in Fe dera list to him for the $80,000 sheA t ra n s ac t ion betwee n a fiduc iary and his principal is consider ed unfa ir if the fiduc iary 11 signific antly

benefi t s from it at the expense of the principal a s viewed in the lig ht of the circ umstances e x isting at t h e t ime of the tra nsaction. See M

iller v. Miller , 700 S.W .2d 941, 947 (T ex . Ap p . — Da l l as 1 9 8 5 , wr i tre f’ d n . r. e. ) ( ci t i n g Ar c he r v . G rif fit h , 390 S.W .2d 735, 740 (Tex. 1964)). F e de ra lis t ha d a

pp ro xima te ly

$3 00 ,0 00 in e qu ity

in t he Sou th M ay s p ro pe rt

y a t th e tim e 12 the ag ree ment was e x ecute d. See supra note 2. 17 had orig inally

invested. As the trial court a ccur ately pointed out, this arrang ement turne d Sharon’s $80,000 investment into an interest-f ree loan that provided g reat financia l benef it to J ohn. 11 The re cord r efle cts that at the time Shar on contributed $80,000 to F eder alist, both she

and Johnvie we d th a t c on tr ibutio n a s a n inve stm e nt. B oth pa

rt ie s te sti fi e d th a t Sh aro n inve ste d in Fe dera list be cause she wa nted to transfe r her

inheritanc e out of mutual funds a nd into real e state. Acc ording to Sharon’s testimony , J ohn persua ded her to invest in Fede ralist by explaining that her

mon e y wo uld be sa fe r the re tha

n in mut ua l f un ds . A ft e r c on vin c ingSha ro n to inv e st h e r f

un ds in this ma n n e r , Jo h n late r p r e s s u r e d h e r to s ig n an a g r e e me n t th a t w o u ld r e tr o a c ti v e ly tr an s form her investment into an interest-f ree loan for th e t i m e period beg inning with the c apitalization of Fe dera list i n ear ly

2002 and endingwith the execution of the ag ree ment i n August 2006. The pr omi sso ry

no te tha t r e su lte d f

ro m th e mari ta l pr op e rt

y a g re eme nt wa s a

te n- y e ar, un se c ur e d n ote with an annua l interest rate of 4.2%, a rate the trial cour

t describe d as “unc onscionably low.” Sharon testified at the enfor cea bility hear ing t h a t w it h r e s p e c t t o her initial investment in F e de ra lis t, i t “ wa s [John ’s ] ide a to t ur n it int o a loa n. ” She fu

rt he r s ta te d th a t sh e sig ne d th e po stmari ta l a g re e me nt, wh ic h pro vid e d for the sa le of he r i nte re st i n F e de ra lis t, b e c a us e sh e wa s a fr a id that if she did not, she would lose the $80,000 that she had initially invested. The pa

rties’ mar ital 12T h e t r i a l c o u rt a l s o n o t e d o n t h e r e c o r d t h a t Jo h n “ i s s o m e w h a t l a c k i n g in c re dib ili ty 13 beca use his memory

seems to be se lective a

nd to be conve niently

self-se rving ” and be cause he is “a n uncomforta

ble witness on the stand.” The trial c ourt furthe r noted that Sharon a ppear ed cr edible, descr ibing he r as a

“for thcoming w itness.” 18 th e r a p is t a ls o te s ti f

ie d to h e r u n d e r s ta

n d in g th a t Sh ar o n th o u g h t s h e w a s in d an g e r o f losing he r $8 0, 00 0 inve stm e nt i n F e de ra lis t.

This evidence supports the trial cour t’s finding of fa ct that “[a]t som e point [S haron] beca me convince d that she would be lucky to ge t her orig inal investment back, a nd allowed [J ohn] to t re a t he r i nv e stm e nt a s a

loa n. ” Th e tr ia l c ourt

e la bo rate d o n th is f

ind inga t th e e nf

or c e a bil ity h ea ri n g, s t at i n g: [T]he c ir c ums tanc e s p re se nte d he re in c ourt ind ic a te a c ours e of a c tio n c a lc ulate d to inv o lv e h e r

f u n d s in M r . I zzo ’ s b u s in e s s [] o r

h is p r o f e s s io n a l p r a c ti c e an d

perha ps then putting it in as an investment and e ncoura g ing he r to reg ard that as an investment and then to somehow c reate a mental state on her part wher e she be g ins to be willing to ac cept . . . a ref und of her

money over a l o n g p er i o d of time at an unconsciona

bly low rate of intere st simply beca use she is concerne d for the sa fety of he r f un ds

. 13

I n inducing Sharon t o believe that she was at risk of losing he r initial $80,000, J ohn failed to disclose the value of Feder alist, which at that time had a pproxi mately

$300,000 worth of equity in the South May s proper

ty . He then pur chase d Sharon’s shares with an $80,000 note at a low

ra te of int e re s tt h a tw a s n o ts e c u r e d b y a s e c u r i t y i n t e r e s ti n

t h e c o mp an y . I ne n t e r i n g i n t o thi s business arr ang ement with J ohn, Sharon relied on him to exercise the g ood faith and c andor r equire d of a f iduciary

. See ge nerally Horton v. Robinson , 776 S.W .2d 260, 265 (Tex. A pp.—El Paso 1989,

no wr it) (a ff

ir min g jur y fi nd ing of br e a c h of fi du c iary du ty in c a se wh e re a pp e lle e we nt i nto bu sin e ss19

with attorney

and fr iend, stating , “A lay man would be e x pecte d to rely upon one who was an attorney

w h e na n e w b u s i n e s s w a s s t art e d , p art i c u l ar l y w h e r e t h e y w e r e l o n g - t i m e f r i e n d s an d

ana t t o r n e yclient re lationship had previously exis ted.”) . Whil e ac ting a s a fiducia ry in connec tion with S haron’ s investment in Fede ralist, J ohn persua ded her to execute an a g ree ment that provided a financ ial wi nd fa ll t o h im at Sh aro n’ s e xpe ns e . A s su c h, we c ann ot c on c lud e that John e xhibi te d the g oo d f a ith and ca ndor re quired of a

fiduciar y in conducting this transaction. Ther efor e, we h old that the evidence is suffic ient to uphold the trial court’s f inding that John breac hed his fiduciar y duty to Sharon.

J ohn’s forma l f

i d u ciary relationship wit h Sharon as he r attorne y and investment advisor, his subsequent bre ach of fiduciar y d u t y , and the be nefits he r ece ived as a result of that brea ch, par

ticularly the transf

ormation of Sharon’s investment in the rea l property venture into an interest-f ree loan for his be nefit, trig g er a presumption of undue influe nce in co n n ec t i o n wi th the marital prope rty

ag ree ment. “Wheneve r a f idu ci ar y re ce ives a be nefit or make s a prof it from transac tions with his principal .

. . , a pre sumption of fraud, unf airne ss or undue influenc e ar ises.” Dozier v. Dozie r , N o . A 1 4

- 8 7

- 0 0 1 3 0

- CV , 1988 Tex. App. L EXI S 1163, at *20 (Tex. App.—Houston [14t h Dis t.] May 26 , 198 8, wr it d e nie d) (n ot d e sig nate d f or pu bli c a tio n) ; see also Pace v . McEwe n , 574 S.W .2d 792, 796 (Tex. App.—El Paso 1978, writ ref ’d n.r.e.) (holding that beca use fiducia

ry relationship ex isted betwee n stock broker /investment advisor and c lient, elderly client’s g ift of stock to advisor for no c onsideration re flec ted exercise of undue influenc e). T h i s Court has sug g ested that “ common-law c oncepts including duress, lac k of capa city , fra

ud, and undue inf

luence , along with the parties’ relati v e bar g aining power and kn ow le dg e re g ard ingthe me anin g and e ff e c t of the a g re e me nt, c ou ld b e ar u po n th e ul tim a te20

deter mination of vol untariness.” Sh esh un off , 1 7 2 S

. W

. 3 d

at 6 9 5 -9 6 (c i t i n g In re Marriage of Bonds , 5 P.3d 815, 824 (Cal. 2000) (“[T]he que stion is viewed as one involving such ordinar y co ntrac t de fe ns e s a s f

ra ud , und ue infl ue nc e , o r d

ur e ss, a lon g wi th s ome e xami natio n o f t he pa rt ie s’ kn ow le dg e of

the ri g hts be ingwa ive d, or a t le a st k no wl e dg e of the int e nt of the a g re e me nt. ” )) . T hu s, any e xe r c is e o f u n d

u e in f lu e n c e b y Jo h n in h is c a p a c it y a s a f id u c ia r y b e ar s d ir e c tl y o nour deter mination of whether there is sufficie nt evidenc e to support the trial c ourt’s finding that Sharon did not ex ecute the ag ree ment voluntarily . As a re s u l t , we will first re view the e vidence of any und u e in f lu e n c e e xe r c is e d b y Jo h n b e f o r e a d dr e s s in g th e p arti e s ’ r e lati v e b ar g a in in g p o w er a nd whether Sharon had a dequate knowledg e of the m eaningand ef fec t of the ag ree ment. See id. ; see als o M ar tin , 287 S.W .3d at 263 (obser ving that voluntariness “is a question of fact depe ndent upon all the circ umstances a

nd the mental ef

fec t on the party

claiming involuntary

execution”). “In decidingwhether

there has been undue influence, the court should consider thre e fac tors: (1) the e x istence and exertion of an influence ; ( 2) whe ther the influe nce ope rate d to subvert

or ov e rp ow e r t

he pe rs on ’s min d whe n exec uti ng the do c ume nt; and (3 ) wh e the r the pe rs on wo uld have e x ecute d the document but fo r t h e i n fl uence .” W ils v. Robinson , 934 S.W .2d 774, 780 (Tex. App.—Houston [14t h Dist.] 1996), wr it gr a n te d , ju d g m ’ t v a c a te d

w.r.m. , 9 38 S.W .2d 717 ( T e x. 1 9 9 7 )

. I nt h i s c a s e , S h a r o nt e s t i f i e d t h a ts h e d i d

n o tw an tt o s i g nt h e m ar i t a l p r o pe rt y ag ree ment, ultimately

signing it only in response to John’s insi stence that she had to do so in orde r to save the ma

rriag e and his re prese ntations that it was nece ssary to secur e her investment. During the time J ohn was a cting as a f iduciary i n co n n ec t i o n with the investment of Sharon’s f unds, he t h re at en ed to dissolve the marr iag e unless she sig ned an a g ree ment that divested her of that21

investment in a manner

that provided him with a substantial financ i al bene fit. This ty pe of

arr ang e me nt, in wh ic h the fi du c iary g re a tly be ne fi ts to the de tr ime nt o f t he pr inc ipa l, c le arl y

su g g e sts the exist ence and exertion of an inf luence

. See P ace , 574 S.W .2d at 796. The testimony

of both Sharon and Br own supports the notion that John’s influence operated to overpow er Sharon’s mind when executing the document a nd that she would not have executed it but for the influe nce. Se e W ils , 934 S.W .2d at 780. B rown testified that when Shar on

came to her off

ice, she was in a state of g reat me ntal distress over John’s insist ence that she sig n the ag ree ment, cry

ing a nd repe ating , “You don’ t understand, Ijust have to sign this.” B rown e x plained that she advised Sharon not to sign the ag ree ment and asked her w hy she would sig n an ag ree ment that appea

red to fa vor John, and Sharon responde d, “You don’ t understand, I have to sig n it to make t h e p re s s u re s t o p at h o m e. ” A s p re v i o u s l y n o t ed , S h ar o nal s o t es t i fi edt h at s h e d i d n o twa n tt o s i gn the ag ree ment, and that she only did beca use of John’s pressure and influenc e. Sharon explained in her testimony that s h e fe are d the loss of her e ntire $80,000 inv e stm e nt i n F e de ra lis t, a nd that John a ssu re d h e r that sh e c ou ld g e t th e mon e y ba c k if sh e wo uld just sign the ag ree ment. She further testified that she did not understa nd the sales pr ovision of the ag ree ment, stating, “[W ]hat I didn’t understand w as how F eder alist[ ] I nvestments worke d, about the sh are s and

my ow ne rs hip in t

hat and in e xch a ng e fo r pay in g m e back t he mon e y . I

did n’ t r e a lly understand a ll of that as well as e very thing that wa s his ear

nings and my ear

nings.” This testimony supports the t rial court’s finding that J ohn, while acting as a fiduciary , led S haron to believe that she had to sig n the ag ree ment in order to pr otect her $ 8 0 , 0 0 0 in invested funds, despite the f act that Fe dera list had over $3 00,000 in equity in the South May s proper ty at the time and wa s collecting22

$5,000 in rent fr om t enants each month. I t further sug g ests that in pressuringher to sig n the ag ree ment out o f fe ar o f l osing he r $80,000 investment, J ohn failed to disclose to Sharon that the ag ree ment actua ll y d i v ested he r of the substantial g ain that had a lrea dy materia liz ed fr om that investment. These a ctions surpass mere persua sion or entre aty , rea ching the level of undue influenc e. Se e Ne al v . Te x as De p’t of H um an Se rv

s. , 814 S.W .2d 216, 221-22 (T e x. Ap p. —Sa

n A nto nio 19 91 , w ri t de nie d) (h old ing that wh ile “ the law . . . do e s n ot c on de mn a ll persua sion, entrea

ty , cajol ery , i mp o rt u n i t y , i n t er ce s s i o n , ar gu m en t , an d s o l i ci tation,” undue influe nce

occur red—a nd ag ree ment was sig ned involuntarily —in light of a ctions that “ca nnot rig htful l y

be considere d a ty

pe of pe rsuasion, entre aty , cajoler y , or the like” ). The e vidence also supports a fi n d ing that Sharon lacke d meaning ful barg aining power . The ag ree ment was drafted by an attorney in J ohn’s l aw firm, at J ohn’s direc tion. Sharon,

a ft e r s e e kin g a dv ic e fr om o ne a tto rn e y wh o r e fu se d t o si gn the a g re e me nt, too k th e a g re e me nt t o Br own and e x plained that bec ause of the pre ssure fr om J ohn, she would have to sign the a g ree ment

re g ard le ss of its c on te nts

. B ro wn te sti fi e d that Sha ro n s ho we d u

p at he r o ff

ic e wi th n o a

pp oin tme nt, that B ro wn

wa s una ble to ev a luate the c on sc ion a bil ity of the a g re e me nt b e c a

us e sh e ha d v e ry

lit tle knowledg e of the v al u e o f t h e p roperty at issue, and that she advised Sharon not to sig n the

a g re e me nt. De sp ite he r re se rv a tio ns , B ro wn ult imate ly

sig ne d th e a g re e me nt a s Sh aro n’ s c ouns e l,

no tin g that Sha

ro n wa s e xtre me ly up se t and ins ist e nt t hat sh e ha d to have an atto rn e y ’s sig natur e in order to satisfy J ohn’s demands. Br own di d not attempt to neg otiate any aspec ts of the ag ree mentSha ro n te sti fi e d th a t sh e did

make a re qu e st t hat tw o p ie c e s o f f

ur nit ur e be c la ssi fi e d in 14 the a g re e me nt a s h e r s e pa

rate pr op e rt

y , s ta tin g , “ Idid

n’ t to ta lly un de rs tand the wh ole thi ng , b ut, y e s, Idid make that cha

ng e.” Hese lmey er testified that he did not rec all Sharon ever revie wing the fi rm ’s fi nancia l 15 information af

ter 2003. 23 on Sha ro n’ s b e ha lf

, n or did sh e c harge S haro n f

or he r t ime re vie wi ngthe a g re e me nt. Thus , 14 Sharon did not have the advanta g e of me aning ful repr esentation by counsel at th e t i m e the ag ree ment was sig ned.

I n addition, as previously

discussed, Sharon testified that she did not understand the

me an in g o r

e f f e c t o f th e a g r e e me n t, s tati n g , “ [W] h a t I d id n ’ t u nderstan d w a s h o w F e d e r a li s t[ ] I nvestments worke d, about the share s and my owner ship in that and in ex chang e for paying me back the mon e y . I

did n’ t r e a lly un de rs tand

a ll o f t hat a s we ll a s e ve ry

thi ng that wa s his e arn ing s and my

ear nings.” Sharon’s testimony that she did not understand the meaningor ef fec t of the ag ree ment is s up po rt e d b y

He se lme y e r’ s te sti mo ny

a t th e e nf

or c e a bil ity he ari ngthat Sh aro n la c ke d th e ba sic finan c ia l k

n o w le d g e n e e d e d

to r u n r u d im e nta r y a c c ounting softwa

re. Spec ifically , Hese lmey er state d that in 2003, Sharon had brie fly attempted to manag e the financial books and re cords f or John’s law firm, but t hat she wa s unable to do so bec ause she did not “have the knowledg e base to do that.” When asked, “ [S ]he didn’t have the c omputer skills or the financ ial skills to g et in there a nd run eve n something a s rudimentary as Quickbooks? ” He selmey er a nswere d, “I

would ag ree with that.” 15 Sharon wa s also unawa

re of th e value of

J ohn’s law pr actice , preve nting he r fr om f u l l y u n d e r s t an d i n g t h e e f

f e c to f t h e a g r e e m e n t ’ s p r o v i s i o n c o n f i r m i n g i t a s J o h n ’ s s e p ar a t e p r o p e rt y. By J ohn’s own testimony

at the enf

orce ability

hear ing, he d i d n o t provide Sharon with any documents re flec ting the va lue of his law pr actice or any of the prope rties at issue in the post-mar italBoth J ohn and He selmey er te stified that Sharon had no que stions about the ag ree ment that 16 went unansw ere d. The trial court, as finder of fac t, w as fre e to r esolve this conflicting te stimony and appea rs to have done so in Sharon’s favor. 24 pr op e rt y a g re e me nt at th e tim e the do c ume nt wa s e xec ute d, no r d id h e pr ov ide a ny su c h d oc ume nts to B rown, the attorney

signingthe ag ree ment on Sharon’s be half. Sharon te stified that she re ceive d

no fi na nc ia l do c ume nts of any kin d in conne c tio n with the a g re e me nt, and that sh e a tte mpt e d to a sk bo th Joh n a

nd He se lme y e r a

bo ut t he su bs tanc e of the a g re e me nt, bu t r e c e ive d n o a ns we rs . When

16 asked a bout th e q u es t i o ns she soug ht to have answ ere d, Sharon stated, “ About the prope rty , what did it entail; when Iwould sign it; just to g o over it with me in detail, and ne ither one of them ever did .” Sha

ro n ac kn ow le dg e d tha t she ha d sig ne d the fa mil y ’s inc ome ta x re tur

ns and ha d a c c e ss t o the ir pe rs on a l ba

nk a c c ounts , b ut m a int a ine d th a t sh e did no t have a c c e ss t o Joh n’ s la w f ir m a c c ounts or financ ial rec ords. J ohn, on t he other hand, asse rted that Sharon ha d online acc ess to the firm’s bank ac counts and c ould have a cce ssed the firm’ s rec ord s at any time throug h his computer. The trial court wa s fre e to di sbelieve J ohn’s t estimony , but even assuming Sharon was a ble to acc ess the fi rm ’s bo ok s and

re c or ds , H e se lme y e r’ s te st im on y su g g e sts tha

t sh e did no t ha ve the re qu isi te financ ial an d co m p uter litera cy to obtain financia l information in this m anner . Fur thermore , any computer a cce ss Shar on might have had would not ha ve yielded information reg ardingthe potential

va lue of any c on tin g e nc y -f

e e c a se s in

the pipeli ne at th e tim e the a g re e me nt w a s e xec ute d. Th is information, while hig hly rele vant to the firm’s va lue, could not be asce rtained f rom a re view of the law firm’ s bank st atements. The value of a law f irm that fre quently

operates on a c ontinge ncy -fe e ba sis is n ot r e a dil y

a pp are nt t o a

lay pe rs on , o ft e n r e qu ir ingthe op ini on s o f a n e xpe rt wi tne ss t o establish. See, e .g. , V

o n Ho h n v. Von Hohn , 260 S.W .3d 631, 637-38 (Te x . App.—Tyler 2008,25

no pet.) (a

pproving expert testimony in divorce c ase r eg ardingvalue of conting ency -fe e pra ctice, inc lud ingva lue of

po te nti a l se ttl e me nts ); Fountain v. Knebel , 45 S.W .3d 736, 740 (Tex. App.—Dallas 2001, no pet.) (determining harmful error occur red w hen wife ’s expert lacke d sufficie nt information to rende r opi nion on value of husband’s law f irm and wife was pre vented f rom

c on du c tin g a dd iti on a l di sc ov e ry ). B a se d o n th e fo re g oin g , w e c on sid e r t he e vid e nc e su ff

ic ie nt t o

su pp or t a fi nd ingthat Sh aro n did not un de rs tand

the me anin g or

e ff e c t of the a g re e me nt at th e tim e it was executed.

Given the e videnc e o f J o h n’s bre ach of a fiduc iary

duty , the exist ence of undue influence , Sharon’s lac k of bar g aining power , and her inadequate understanding of the mea ning a nd eff ect of the ag ree ment, we hold that the totality of the circumstance s provides suff icient evidenc e to uphold the trial court’s f indi ng that Sharon did not sign the a g ree ment voluntarily

. See Sh esh un off

, 172 S.W .3d at 696-97 (obse rving that “undue influence , along with the parties’ relative barg aining power

and knowledg e re g ardingthe m eaning a nd eff ect of the ag ree ment, could bea r up on the ult imate de te rm in ati on of volunta ri ne ss” ); Vela v. M

arywood , 17 S.W .3d 750, 762 (Tex. App.—Austin 2000, pet. denied) ( “Although t h e fa ce of the af fidavit ref lects it was sig ned kn owi ngly

and vo lun tari ly , w e mus t c on sid e r t he surr ound ingc ir c ums tanc e s to de te rm ine if [ap pe lla nt]’ s si g natur e on

the do c ume nt wa s pro c ur e d by mis re pr e se ntatio n, fr a

ud , o r t he lik e .” ); see als o M ar tin , 287 S.W .3d at 264-65 (holdingthat fac t issue exi sted on voluntariness whe re husba nd provided no fina

ncial disclosure s relate d to busine sses subject to pr operty ag ree ment and pre ssured wife to sig n ag ree ment by claiming that “fa

mily would be fina

ncially ruined” without it).26 Be cause the trial cour

t’s order invalidating the mar i t al p roper ty ag ree ment may

be upheld solely

on the basis of involuntariness, we n ee d n o t al s o addre ss the issue of whe ther the ag ree ment was unc onscionable w hen sig ned. See Te x. F a m. C od e Ann. § 4 .1 05 ; see also Te x. R. App. P. 47.1 (courts o f ap p ea l s must hand down opinions that are a s brief a s possible, addressing those issues nece ssary

to final dispositi on on appea l). Applicability of Section 4.105 Sharon take s the position o n ap p ea l that section 4.105 of the f amily code doe s not apply to the portion of the post-mar ital ag ree ment g overningthe sale of Fe dera list because se ction 4. 10 5 g ov e rn s o nly

“ pa rt iti on and e xch ang e a g re e me nts ” c on ve rt ingc omm un ity pr op e rt y int o

se pa rate pr op e rt

y , a nd do e s n ot a llo w fo r a g re e me nts to c on ve rt on e sp ou se ’s se pa rate pr op e rt

y int o the other spouse ’s sepa

rate proper

ty

. See Tex. Fam. Code Ann. § 4.105 ( g overningenfor ceme nt of

“ pa rt iti on and e xch ang e a g re e me nt” ); see also id. § 4.102 (allowing spouses to “pa rtition and exchang e betwe en themselve s all or par t of their community

proper ty ” so that it become s the

se pa rate pr op e rt

y of the tr ans fe re e ). Sha

ro n a rgue s th a t a ll c omm on

law rem e die s and

de fe ns e s, which ar e not ava ilable to a spouse challeng ing enforc ement of a n ag ree ment under se ction 4.105,

are avai l ab l e t o h er in connec tion with the ag ree ment to sell her intere st in Fede ralist. See id. § 4 .1 05 (c ) ( “ Th e re me die s and de fe ns e s in

thi s se c tio n a

re the e xclu siv e remedi es or de fe ns e s, including c ommon law reme dies or def enses.” ). B ased on our conclusion t h at S haron ha s established the statutory

aff irmative def

ense of involuntariness under se ction 4.105, we n ee d not further addre ss whether

common l aw reme dies or def enses a re a vailable to her . Even if se ction 4. 10 5 d oe s n ot apply

to t he sa le pr ov isi on

of the mari ta l a g re e me nt, the e vid e nc e is s uf fi c ie nt t o27

su pp ort a fi nd in g that Sh aro n d id n ot s ig n th e a g re e me nt v olu nta ri ly , r e nd e ri ngit une nf

or c e a ble under c ommon law. See Southwestern U nderground Supply &Envtl. Servs. v . Ameriv ac, Inc

. , 894 S.W .2d 15, 18 (Tex. App.—Houston [14t h Dist.] 1994, writ denied) (“Since lack of

v o l u n t ar i n e s s w o u l d n e g a t e m u tu a l a s s e n t , a n e c e s s ar y p r e d i c a t e t o t h e f

o r m a t i o n o f a c o n t r a c t , it would also neg ate the unde rly ing c ontrac t.”).

We affir m the trial court’ s order s ustaining Shar on’s cha lleng e to the

e nf or c e a bil ity of the po st- mari ta l pr op e rt y a g re e me nt, and ov e rr ule John ’s iss ue s o n a

pp e a l in

connec tion with thi s order

. II. DivorceDec ree

J ohn arg ues that eve n if we a ffirm t h e t ri al cour t’s order finding the post-marital proper ty ag ree ment unenfor ceab l e, t h e divorc e dec ree should be reve rsed be cause the trial cour t

a b u s e d i t s d i s c r e t i o ni nd i v i d i n g t h e p art i e s ’ c o m m u n i t y p r o p e rt y. I n a dec ree of divorce , the trial court “shall orde r a division of the e state of the pa rties in a manner

that the cour

t deems just and rig ht, having due re g ard f or the rig hts of eac h party .” Te x. F a m. Cod e Ann. § 7 .0 01 (We st 2 00 6) . In ma kin g the “ jus t and ri g ht” div isi on

of c omm un ity proper t y , t h e trial court is vested with broad discr etion. Mu rff , 615 S.W .2d at 698. The ma rital estate ne ed not be e qually divided, and the c ourt may consider f

actor s such as the dispar ity i n the

ear ning c apac ities of the par ties. Id. at 699. Under the final decr ee of divorce , the community proper ty awa rded to John included his law pract ic e w it

h ane s ti mate d

v a lu e o f $ 5 0 0 , 0 0 0 , a

mo to r v e h ic le w it

h ane s ti mate d

v a lu e of $12,785, and the ba

nk acc ounts and persona l proper ty subject t o his sole control, with an e stimated28

value of $10,000. Sharon was awa rded her counseling business with an estimated va lue of $7,500, a motor vehic le with neg ative value , the Gabr iels Overlook lot s wi t h an estimated va lue of $106,041.96, and bank a ccounts a nd persona l prop er t y

subject to her sole control, with an

e sti ma te d v a lue of

$3 ,0 00 . B a se d o n th e se e sti ma te d v a lue s, Johnwa s a wa rd e d c omm

un ity pr op e rt y wo rt h a pp ro xima te ly

$5 22 ,7 85 , a

nd Sha ro n w a s awa

rd e d c omm

un it y prop e rt

y wo rt h approximately

$116,542. Whil e the c omm

un ity pr op e rt y awa rd e d to Johne xce e de d th e va l u e o f t h e c omm un ity proper ty awa rded to Sharon by

over 400% , J ohn contends that the c ommunity proper ty division was inequitable and unjust because the trial court overvalued his law practice

. Acc ording to J ohn, the firm was w orth approximately $6,000 at the time of the divorc e, rather than the $500,000 amount found by the trial cour

t. J ohn does not take issue w ith the estimated values a ssigne d to the rema ining items of community

proper ty , arguing only

that the law f

irm value wa s highly

inflated. Th e tr ia l c ourt

ba se d it s v a luatio n o f t

he fi rm , at le a st i n p art , on th e fa c t th a t in neg otiating with He selmey er f or t he sale of a 45% i ntere st in Dec ember 2006, J ohn estimated that the pra ctice ha d a value of approx imately $778,000. J ohn testified at the divorc e hea ring , howeve r, that he ha d o ve rv a lue d th e fi rm in n e g oti a tin g wi th H e se lme y e r, and that th e fi rm

ha d d ra ma tic a lly decr ease d in va lue since Dec ember 2006 beca use Hese lmey er had left the firm, takinga number of staff me mbers and case s with him. He also testified that he had r ece ntly suffe red f

rom a number

of he a lthpr ob le ms w hic h p re ve nte d h im f ro m w or kin g and fu

rt he r d imi nis he d th e va lue of the fi rm . On c ro ss- e xami natio n, Johnte sti fi e d th a t he pla c e d no va lue wh a tso e ve r o n a ny c a se s c ur re ntl y in prog ress at the firm, so that his acc ounts rece ivable had a curr ent value of $0. He then reve aled thatJohn te sti fi e d tha t the fi rm ’s tr us t ac c ount re fl e c te d amo un ts o n r e ta ine r, statin g , “ Th a t is 17 mon e y sittin g the re fo r w or

k to be do ne .” Whe n a sk e d, “ B y and larg e tha t’ s . . . mon e y

that pe op le have pa id y ou that’s on retainer, like f or a f amily law ca se; is that corre ct? ” John answere d, “That’s what it is, period. Those a re just re tainers t h at ar e i n t h er e for work to be done .” While he later t e s t i f i e d t h a th i s t r u s ta c c o u n ta l s o h e l d f

u n d s f o r c l i e n t s i ns i tu a t i o n s i n v o l v i n g s a l e s o f r e a l p r o p e rt y, he did not know how much of the $149,724 could be attributed t o sales of r eal pr operty beca use he does not “pa

y attention to any

of these numbe rs.”

29 he had rec ently taken on eig ht c ontinge ncy -fe e case s, but took the position that he was t ak i n g on

case s without assessing the ir potential value, so he had “no idea that any thing is g oing to c ome of tho se .” Johnte sti fi e d th a t th e law fir m c he c kin g a c c ount c on ta ine d $ 23 ,8 37 .0 7, and that it s tr us t

acc ount contained $149,724.11. Johna lso e xpla ined tha t th e law f

ir m pa id n o r e nt t o F e de ra lis t 17 for use of its office space , but that the firm “supplement[s] the shortfa ll” betwee n the re nt from other te na nts and the fu ll m or

tg a g e pa y me nt. John ’s te sti mony

su g g e sts that w he n th e bu ild ingis f ull y rente d, the shortfa ll is approx imately $800 a month. B a se d o n th e fo re g oin g , w e c ann ot c on c lud e tha t th e tr ia l c ou

rt c le arl y a bu se d it s d i s cr et i on in dividing the par ties’ community

estate. Se e Be ll , 5 13 S.W. 2d a t 22 (h old ingthat in

re vie wi ngdiv isi on

of c omm un ity pr op e rt y , “ it mus t be pr e su me d th a t th e tr ia l court e xer c ise d it s discretion prope rly ” and “a case should be reverse d only wher e there i s a cle ar a buse of discr etion”). Even if the la

w firm’s true value wa s as l o w as $100,000, fa r less than the $500,000 a mount deter mined by the trial cour

t, John still r ece ived a g reater shar e of the community estate tha n Sharon. The fa ct that the firm’s trust acc ount contained $149,724 a t the time of trial, a substantial portion of which re prese nted re tainers f or ong oing case s, sug g ests that the firm did not have a nominal value of $6,000, as John contends. The trial c ourt , as finder of fac t, was fr ee to disbelieve J ohn’s te sti mony that th e c a se s c ur

re ntl y pe nd inga t th e fi rm

ha d n o v a lue wh a tso e ve r. Fin all y , e ve n if30

Sharon had

rec eived a

g reater share of community proper ty , the division need not be equa l in order to be equitable. See id. I n dividing the mar ital estate, the tria l court has discr etion to consider f actor s such as a disparity in the earning capa cities of t he parties, a factor that in this case would support an

awa rd of a larg er portion of the mar ital estate to Sharon. Se e Mu rff , 615 S.W .2d at 698. Ther efor e, we hold that t h e t ri al court did not clea rly abuse its discre tion in divi ding the community estate. J ohn’s points of err or re lating to the tr ial court’s division of community proper ty are overr uled.

CO NC LU SION We affir m both the trial court’s or der f inding the ma

rital p ro perty

ag ree ment unenfor cea

ble and the f

inal decr ee of

divorce

.

__________________________________________ Diane M. H enson, Jus tice Be fore J ustices Patterson, Pury ear and He nson Affir med Filed: May

14, 2010