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Ugwu v. Ugwu

Court of Appeals of Texas, First District

April 24, 2018


          On Appeal from the 328th District Court Fort Bend County, Texas Trial Court Case Number 08-DCV-162390

          Panel consists of Justices Bland, Lloyd, and Caughey.


          Jane Bland Justice

         This is an appeal from a divorce proceeding in which the married spouses also jointly owned a partnership that operated two assisted-living centers. A jury found that the wife breached their partnership agreement by depleting partnership assets and setting up a competing business. The trial court then heard the divorce claim. Based on the jury's findings, the trial court ruled that the wife had committed fraud on the community estate. It awarded the husband a disproportionate share of the estate based on the amount found by the jury.

         On appeal, the wife contends that the trial court erred in (1) not permitting challenges for cause; (2) improperly charging the jury on the partnership issue; and (3) dividing the community property. We conclude that the wife has not properly presented these challenges for appellate review and therefore affirm.


         Chichi and Edith Ugwu married in 1992. In 2004, they founded a business to operate assisted-living centers for elderly and disabled residents. At trial, Chichi testified that he and Edith orally agreed that the business would be a general partnership: each would own half of the business and share equally in its profits and losses.

         Chichi and Edith purchased two single-family homes in a residential area in southwest Houston. Chichi, who was familiar with the Texas Department of Aging and Disability Services' compliance requirements, served as the facility coordinator and Edith oversaw the day-to-day operations. Chichi prepared the applications required to begin operating the centers, known as Joyful Homes and Joyful Homes II, respectively. The applications filed for the two centers identify the operator to be a general partnership, with Edith and Chichi each owning 50% of the business.

         Sometime later, Edith revised the operating applications. In the altered copies, she identified the operator of the homes to be a "sole proprietor" and named herself as the sole owner. Without telling Chichi, she filed these altered documents with the Department of Aging and Disability Services.

         In 2007, Chichi discovered that Edith had made the alterations. He sued her for breach of their partnership agreement and sought injunctive relief in Harris County State District Court. Chichi obtained a temporary injunction, which limited Edith's control over Joyful Homes' assets. A few days later, Edith petitioned for divorce in Fort Bend County.

         Edith told Chichi that she was winding down the business and planned to discharge the clients and close the two Joyful Homes locations. Instead, Edith violated the injunction by transferring the clients to facilities operated by acquaintances who helped Edith continue working with the transferred clients without Chichi's knowledge. Edith then filed applications to operate the Joyful Homes and II locations under sole proprietorships named Joyful Homes III and IV, so that she could conceal the operations from Chichi. Edith closed the Joyful Homes bank account and moved the funds into another account that Chichi could not access.

         By 2016, the breach of partnership suit had been consolidated with the divorce proceeding, with all of the claims pending in the Fort Bend County State District Court. The parties tried the breach of partnership claim to a jury. Edith claimed that she and Chichi did not have a general partnership and that Chichi's ownership interest existed only through community assets that had been invested in the business. The jury rejected that claim, finding that Edith and Chichi entered into a general partnership "for the assisted living centers called Joyful Homes, " that Edith had failed to comply with the partnership agreement, and that Chichi had sustained net lost profits of $142, 253.

         The trial court signed a final divorce decree in March 2017. Among other things, the trial court found that Edith had committed fraud on the community, which had depleted the marital estate. It further ruled that "to achieve a just and right division of the property" Chichi was ...

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