Affirmed and Memorandum Opinion filed July 23, 2015.




                                      In The

                     Fourteenth Court of Appeals

                               NO. 14-14-00080-CV

                        WILMA REYNOLDS, Appellant
                                         V.
                         DAVID REYNOLDS, Appellee

                    On Appeal from the 300th District Court
                           Brazoria County, Texas
                        Trial Court Cause No. 48170-K

                 MEMORANDUM                      OPINION


      Appellant Wilma Reynolds appeals from the trial court’s denial of her
petition for a bill of review seeking to set aside and re-litigate the community
property division contained in the decree of divorce ending her marriage to
appellee David Reynolds.      Although Wilma raises two issues, we need only
address her second, in which she contends that the trial court abused its discretion
when it denied her bill of review petition. We overrule this issue because (1) a bill
of review cannot be used as an additional remedy after an unsuccessful appeal; and
(2) the only evidence of fraud offered by Wilma in support of her bill of review
petition, if believed, would establish intrinsic fraud, which cannot support a bill of
review. We therefore affirm the trial court’s order denying Wilma’s bill of review.

                                   BACKGROUND

      David petitioned for divorce from Wilma in 2008. Reynolds v. Reynolds,
No. 14-09-00720-CV, 2010 WL 3418209, at * 1 (Tex. App.—Houston [14th Dist.]
Aug. 31, 2010, pet. denied). David is employed by QuantLab Financial, LLC. Id.
During the 2009 trial on the issue of the division of the community estate, much of
the dispute focused on QuantLab Trading Partners US, LLP (QTP) and QuantLab
Incentive Partners I, LLP (QIP), David’s interest in and income derived from those
entities, and how those items should be divided in the divorce decree.

      David testified that he is a limited partner in QTP and that he receives
monthly income and the majority of his bonuses from QTP based on the profits
earned through investments of the capital contributed by the limited partners. Id.
Tim McInturf, outside counsel for one of the Quantlab entities, testified that
David’s interest in QIP was not vested at the time of trial and would vest in the
future only if a capital event, such as QuantLab being sold, occurred. McInturf
further testified that David’s interest in QTP could be redeemed at any time
because David participated in QTP solely at the discretion of QTP’s general
partner.   McInturf also explained that if David’s employment with QuantLab
ended, his interest in QTP would be redeemed and his capital contribution of
approximately $600,000 would be returned.

      During the trial, David testified that he and Wilma had a Morgan Stanley
investment account worth approximately $5 million. David asked the trial court to
award him the entire interest in both QIP and QTP. To compensate Wilma for
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David receiving the entire interest in QIP and QTP, David asked the trial court to
award Wilma $3,220,874.74 out of the Morgan Stanley account and to award the
remainder, approximately $1.8 million, to him.

       The trial court accepted David’s recommendation and divided the marital
estate accordingly. Id. at *2. Within ten days of the trial court’s signing of the
divorce decree, David had transferred the $3,220,874.74 to Wilma’s account and
she had spent $1.7 million of that amount. Id.

       Wilma appealed the trial court’s division of the marital estate. Id. at *1. In
that appeal, Wilma argued, among other things, that the trial court “failed to
exercise its discretion properly in dividing the marital estate because the court
denied her certain discovery and therefore lacked sufficient information on which
to base its valuation.” Id. This Court affirmed the trial court’s divorce decree and
division of the marital estate because we concluded Wilma was estopped from
challenging the decree on appeal as a result of her acceptance of the benefits of the
property division. Id. at *3.

       Three years later, Wilma filed the bill of review at issue here, seeking to
revisit the divorce decree’s division of the marital estate. Wilma alleged that
David had prevented her “from asserting rights to a greater share of the parties’
marital estate than that awarded to [her] in the decree.” Wilma went on to allege
that “upon information and/or belief, [David] with the willful intent to defraud
[Wilma], introduced false evidence and testimony regarding the value of the
community estate.”1 Finally, Wilma asserted that she was entitled to a greater

       1
          Wilma’s bill-of-review allegations were based, at least in part, on her belief that
documents she had sought in discovery after filing a petition for modification of the parent-child
relationship would reveal that David had concealed documents, given false testimony, and
introduced false evidence in the property division trial. See In re L.R., 416 S.W.3d 675, 676
(Tex. App.—Houston [14th Dist.] 2013, no pet.). The documents were submitted to the trial
court handling the modification proceeding for in camera inspection and after that inspection, the
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share of the value of the parties’ interest in QTP and QIP, a greater share of the
bonuses earned through David’s employment with QuantLab, and also a larger
share of the assets deposited in banks and other financial institutions.

       David filed an answer and also sought a Baker-Goldsmith hearing.2 The trial
court conducted the hearing, found that Wilma had failed to make a prima facie
case, and signed an order denying the bill of review. Wilma, arguing the trial
court’s order was interlocutory, filed a motion asking the trial court to reconsider.
After the trial judge was recused, a visiting judge conducted a hearing on Wilma’s
motion to reconsider.       The visiting judge signed an order (1) confirming the
original order denying Wilma’s bill of review; and (2) denying all other relief
requested in the case. This appeal followed.

                                         ANALYSIS

       Wilma brings two issues on appeal. We need only address Wilma’s second
issue because it is dispositive of the appeal. Tex. R. App. P. 47.1. In that second
issue, Wilma argues that the trial court abused its discretion when it denied her bill
of review because she presented a prima facie case of a meritorious claim or
defense at the Baker-Goldsmith hearing.              Wilma specifically contends that
extrinsic fraud impacted the trial court’s valuation of the community estate’s
interest in QTP and QIP during the trial on dividing the marital estate. David
argues in response that the trial court did not abuse its discretion because (1)
Wilma previously appealed the divorce decree’s division of the marital estate and

trial court found the documents were not relevant and denied Wilma’s motion to compel seeking
their production. Id. The trial court then granted David’s motion for directed verdict, and
Wilma appealed. Id. Wilma sought discovery of the same documents in the bill-of-review
proceeding at issue here.
       2
          Baker v. Goldsmith, 582 S.W.2d 404 (Tex. 1979) (authorizing a bill-of-review
respondent to request a preliminary hearing to determine whether the bill-of-review petitioner
has presented a prima facie case regarding the bill-of-review claim).

                                              4
lost; and (2) Wilma did not present a prima facie case that extrinsic fraud had
impacted the original divorce decree’s division of the community estate’s property.
We agree with David.

I.    Standard of review and applicable law

      A bill of review is an equitable proceeding brought by a party to a former
action who seeks to set aside a judgment that is no longer appealable or subject to a
motion for new trial. Baker, 582 S.W.2d at 406. A bill of review is proper when a
party has exercised due diligence to prosecute all legal remedies against a former
judgment. King Ranch, Inc. v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003).
Because of the fundamental policy favoring finality of judgments, there are narrow
grounds for granting a bill of review. Id. A bill-of-review complainant must
therefore plead and prove three elements: (1) a meritorious claim or defense; (2)
that she was prevented from asserting by the fraud, accident, or wrongful act of her
opponent or by official mistake; and (3) the absence of fault or negligence of the
complainant. Caldwell v. Barnes, 975 S.W.2d 535, 537 (Tex. 1998). A bill of
review may not be used as an additional remedy after one has made a timely, but
unsuccessful appeal. Rizk v. Mayad, 603 S.W.2d 773, 776 (Tex. 1980).

      When an appellate court is reviewing the grant or denial of a bill of review,
every presumption is indulged in favor of the trial court’s ruling, which will not be
disturbed unless it is affirmatively shown that there was an abuse of judicial
discretion. Nguyen v. Intertex, Inc., 93 S.W.3d 288, 293 (Tex. App.—Houston
[14th Dist.] 2002, no pet.), overruled in part on other grounds by, Glassman v.
Goodfriend, 347 S.W.3d 772, 782 (Tex. App.—Houston [14th Dist.] 2011, pet.
denied) (en banc). The trial court abuses its discretion if it rules in an unreasonable
or arbitrary manner, or without reference to any guiding rules or principles. Id.



                                          5
II.   The trial court did not abuse its discretion in denying Wilma’s bill of
      review because she had unsuccessfully appealed the divorce decree.
      The facts discussed in the background section above show that Wilma was
aware of the community estate’s interests in QTP and QIP at the time of the
property division trial, and the parties litigated the appropriate method to divide
these interests. In his proposed division of the community estate, David asked the
trial court to award him the community’s entire interest in QTP while also
proposing that the trial court award Wilma more than half of the Morgan Stanley
investment account to equalize the division of the community estate. The trial
court accepted David’s proposal and included it in the final divorce decree.

      Wilma then timely appealed the divorce degree to this Court. In that appeal,
Wilma challenged the trial court’s treatment of the community estate’s interest in
both QTP and QIP. See Reynolds, 2010 WL 3418209 at *1–*2. Wilma lost her
appeal when we held that she was estopped from challenging the divorce decree’s
division of the marital estate because, by accepting the payment from David and
promptly spending a significant portion of it, she had accepted the benefits of the
divorce decree. Id. at *4.

      After losing her appeal challenging the divorce decree’s property division,
Wilma filed this bill of review action. In this action, as explained above, Wilma
again challenges the trial court’s division of the marital estate, specifically the
handling of the estate’s interest in QTP and QIP.

      A party cannot use a bill of review as an additional remedy after that party
has made a timely, but unsuccessful, appeal because that party cannot demonstrate
that she has been prevented from making a claim or defense. Hatton v. Grigar,
No. 14-05-01053-CV, 2006 WL 3365494, at *4 (Tex. App.—Houston [14th Dist.]
Nov. 21, 2006, no pet.) (mem. op.). That is exactly the situation we face here. The

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question of how to divide Wilma and David’s marital estate, including the estate’s
interest in QTP, was litigated in the trial court and resolved by the divorce decree.
Wilma then timely appealed that issue to this Court. Wilma ultimately lost that
appeal based on her acceptance of the benefits of the divorce decree. Because
Wilma unsuccessfully appealed the divorce decree’s property division, she cannot
demonstrate that she has been prevented from making a claim or defense, an
essential element of a bill of review. Id.; see Rizk, 603 S.W.2d at 776 (holding a
party cannot use a bill of review as an additional remedy after an unsuccessful
appeal because all of the party’s claims and defenses were or could have been
litigated in the original trial and appeal); Lentino v. Frost Nat’l Bank, No. 14-05-
01179-CV, 2007 WL 2198827, at *2 (Tex. App.—Houston [14th Dist.] Aug. 2,
2007, pet. denied) (mem. op.) (same); Nabelek v. Bradford, No. 14-04-01177-CV,
2006 WL 915824, at *2 (Tex. App.—Houston [14th Dist.] Apr. 6, 2006, pet.
denied) (mem. op.) (affirming denial of bill of review where party had timely but
unsuccessfully appealed issues underlying challenged judgment and therefore had
not been prevented from asserting claims or defenses).

      Wilma attempts to avoid this outcome by arguing that “she did not
unsuccessfully prosecute an appeal of the original divorce decree.” Wilma also
appears to argue that she did not unsuccessfully appeal the divorce decree’s
property division because we affirmed it based on an application of the acceptance-
of-benefits doctrine. The premise for Wilma’s argument appears to be that the
acceptance-of-benefits doctrine is a jurisdictional rule, and a dismissal on
jurisdictional grounds ordinarily is not an adjudication on the merits. See e.g.
F.M.G.W. v. D.S.W., 402 S.W.3d 329, 334 (Tex. App.—El Paso 2013, no pet.)
(“The acceptance-of-the-benefits doctrine is a jurisdictional rule grounded on the
constitutional authority of the courts.”); Ab-Tex Beverage Corp. v. Angelo State


                                         7
University, 96 S.W.3d 683, 686 (Tex. App.—Austin 2003, no pet.) (stating that
plea to jurisdiction is a dilatory plea because it seeks to defeat a cause of action
without regard to its merits).

       We disagree with both of Wilma’s arguments.                    Wilma unsuccessfully
prosecuted an appeal because she filed an appeal with this Court challenging the
property division, which we affirmed. See Reynolds, 2010 WL 3418209 at *1 (“In
this divorce case, Wilma Reynolds challenges the trial court’s division of the
marital estate.”).     We also reject Wilma’s contention that our acceptance-of-
benefits rationale for ruling against her somehow wipes out her unsuccessful
appeal. We previously have held that a divorce judgment may not be set aside by a
bill of review when the complainant voluntarily accepted the benefits of the
divorce judgment.       See Biggs v. Biggs, 553 S.W.2d 207, 210 (Tex. Civ. App.—
Houston [14th Dist.] 1977, no writ) (holding ex-wife’s voluntary acceptance of
benefits barred her bill of review challenging divorce decree’s property division);
see also Chambers v. Texas Dept. of Transp., No. 05-13-01537-CV, 2015 WL
1756087, at *2–*3 (Tex. App.—Dallas Apr. 17, 2015, no pet.) (affirming trial
court’s order denying bill of review because complainant previously had appealed
and lost based on application of sovereign immunity).3                   That rule forecloses
Wilma’s bill of review.



       3
         Wilma also contends that this court’s prior holding that she accepted the benefits of the
divorce decree’s property division should not bar her bill of review because (1) she accepted
only a cash benefit, which she contends is an exception to the doctrine; and (2) her attack on the
property division involved only a right to further recovery, another exception. We conclude
these arguments challenge this court’s prior determination that she accepted the benefits of the
divorce decree’s property division and should have been raised in the original appellate
proceedings. See Lentino, 2007 WL 2198827, at *2 (rejecting bill of review because the
claimant’s claims and defenses were or could have been litigated in the underlying trial and
appellate proceedings and were barred by res judicata).

                                                8
III.   Wilma did not present prima facie evidence that the divorce decree’s
       property division was impacted by extrinsic fraud.
       Even if Wilma’s bill of review were not barred as a result of her prior
unsuccessful appeal, she did not make a prima facie case of entitlement to relief by
showing that she was prevented from presenting a meritorious claim or defense as
a result of extrinsic fraud. In bill-of-review proceedings, fraud is divided into two
categories: extrinsic and intrinsic. King Ranch, 118 S.W.3d at 752. Only extrinsic
fraud will support a bill of review. Id.

       Extrinsic fraud is fraud that denied a party the opportunity to fully litigate at
trial all of the rights or defenses that could have been asserted. Id. Extrinsic fraud
is wrongful conduct occurring outside of the challenged trial proceeding, which
affects the manner in which the judgment is procured. Montgomery v. Kennedy,
669 S.W.2d 309, 312 (Tex. 1984). Extrinsic fraud prevents a real trial upon the
issues presented, and it includes acts such as keeping a party away from court,
making false promises of compromise, and denying a party knowledge of a
lawsuit. Id.; Boas v. Boas, 221 S.W.3d 126, 131 (Tex. App.—Houston [1st Dist.]
2006, no pet.)     Extrinsic fraud is collateral fraud in the sense that it must be
collateral to the matter actually tried and not something that was actually or
potentially in issue in the challenged trial.     Montgomery, 669 S.W.2d at 312.
Extrinsic fraud requires proof of some deception practiced by the adverse party
that was collateral to the underlying action. McIntyre v. Wilson, 50 S.W.3d 674,
680 (Tex. App.—Dallas 2001, pet. denied).

       Intrinsic fraud, on the other hand, relates to the issues that were presented
and were or should have been settled in the former action. King Ranch, 118
S.W.3d at 752. Intrinsic fraud includes such things as fraudulent instruments,
perjured testimony, or any matter that was presented to and considered by the trial


                                           9
court in rendering the challenged judgment. Id. Intrinsic fraud will not support a
bill of review because each party must guard against adverse findings on issues
directly presented. Id. Issues underlying the challenged judgment are intrinsic and
have no probative value on the fraud necessary to a bill of review. Id. Thus, “[a]s
a matter of law, misrepresentation with respect to the value of known community
assets does not alone constitute extrinsic fraud.”     Rathmell v. Morrison, 732
S.W.2d 6, 13 (Tex. App.—Houston [14th Dist.] 1987, no writ).

      As discussed previously, Wilma was aware of the community estate’s
interests in QTP and QIP at the time of the property division trial, and the parties
litigated the appropriate method to divide these interests. Indeed, Wilma concedes
in her brief that she sought and was denied discovery of certain documents
regarding these interests as part of the divorce proceeding. Wilma now alleges in
her bill-of-review petition that during the divorce proceeding, David concealed
evidence and “introduced false evidence and testimony regarding the value of the
community estate.” These allegations, even if we assume they are true, would
constitute only intrinsic fraud because they concern matters at issue in the divorce
proceeding. See King Ranch, 118 S.W.3d at 752. Because intrinsic fraud cannot
support a bill-of-review proceeding, we conclude Wilma did not establish that she
was prevented from asserting a meritorious claim or defense by the fraud of her
opponent.

      Having determined that Wilma previously appealed the divorce decree
dividing the marital estate unsuccessfully, and that she did not make a prima facie
case that extrinsic fraud impacted the underlying judgment, we hold that the trial
court did not abuse its discretion when it denied Wilma’s bill of review. We




                                        10
overrule Wilma’s second issue on appeal.4

                                        CONCLUSION

       Having determined all issues necessary for the disposition of this appeal, we
affirm the trial court’s order denying Wilma’s bill of review.




                                            /s/     J. Brett Busby
                                                    Justice



Panel consists of Chief Justice Frost and Justices Busby and Brown.




       4
         Because we have decided that the trial court did not abuse its discretion when it denied
Wilma’s bill of review, we need not address Wilma’s first issue on appeal challenging the trial
court’s orders denying Wilma discovery of certain financial information. Tex. R. App. P. 47.1.

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