Texas Supreme Court grants more extensive constructive trust than Waco Court of Appeals to incapacitated person cheated out of accident settlement funds by prior guardian. Holds that jury was free to draw negative inferences from guardian's invocation of the fifth amendment privilege against self-incrimination.
Wilz vs. Flournoy, No. 06-0913 (Tex. Jun. 29, 2007)(per curiam)(constructive trust, breach of fiduciary duty, conversion, constructive fraud, adverse inference based on invocation of fifth amendment privilege in civil proceeding)
Full case style: Patricia Wilz, Guardian of Jon Patrick Flournoy, an Incapacitated Person v. Kenneth W. and June Flournoy; from Limestone County;
Appellate court below: Tenth Court of Appeals, Waco (10th district) No. 10-05-00089-CV,
Opinion below: Flournoy v. Wilz, 201 S.W.3d 833, Tex.App.- Waco, July 19, 2006)
Dispostion in the Court of Appeals: Because the court abused its discretion by imposing a constructive trust on the entirety of the Flournoys’ farm, the court of appeals reverse that portion the judgment imposing a constructive trust and render judgment imposing a constructive trust on an undivided 35% interest in the farm. The trial court’s judgment is affirmed in all other respects
Disposition by the Supreme Court: Without hearing oral argument, the Court reverses the court of appeals' judgment and renders judgment for the plaintiff.
Also see --> e-Briefs in the Supreme Court in Wilz v. Flourney
PER CURIAM OPINION
On behalf of her son, Jon Flournoy, Patricia Wilz sought to impose a constructive trust on property purchased by her ex-husband and his new wife. The trial court imposed a constructive trust on the entire property, but a divided court of appeals limited the trust to a 35 percent undivided interest. Given the evidence presented at trial and the jury’s findings, the court of appeals erred in limiting the constructive trust, and we reverse.
Patricia Wilz and Kenneth Flournoy divorced in 1973, and Kenneth was awarded custody of their son, Jon. In 1987, Jon suffered incapacitating injuries in an automobile accident. Kenneth, individually and on Jon’s behalf, sued Ford Motor Company. In a 1991 settlement, Kenneth received $379,300 on Jon’s behalf and $95,000 personally. As guardian of Jon’s person and estate, Kenneth purchased stocks and bonds for Jon’s benefit. Subsequently, Kenneth and his new wife, June, purchased a 110-acre farm for $153,049, paying $49,365.50 in cash and executing a note for the balance. The note called for monthly payments of $961. Between 1991 and 1999, the Flournoys withdrew several thousand dollars from Jon’s account, many installments of which were roughly $960. By the end of 2001, the Flournoys had depleted Jon’s account, and they institutionalized him in a state mental health facility.
In 2005, Jon’s biological mother, Patricia Wilz, became his guardian, and she sued the Flournoys on Jon’s behalf for conversion, breach of fiduciary duty, and constructive fraud. Patricia traced several checks drawn on Jon’s account to the Flournoys’ personal account. When questioned about these checks, the handling of Jon’s funds, and the source of the funds used to purchase the farm, the Flournoys each invoked the Fifth Amendment privilege against self-incrimination. The Flournoys’ sole evidence regarding the funds consisted of Kenneth’s pretrial deposition, where he said he used his settlement money for the farm’s down payment and that $50,000 remained outstanding on the note. When questioned about the truth of this testimony, Kenneth again invoked the Fifth Amendment.
The jury found that Kenneth breached his fiduciary duty and committed constructive fraud and that the Flournoys converted Jon’s property with malice. The trial court therefore imposed a constructive trust on the entire farm.
The court of appeals agreed that Wilz had met her burden to impose a constructive trust on the entire farm, and the burden shifted to the Flournoys to show which funds came from their own accounts. 201 S.W.3d 833, 836–37. Nonetheless, it held that the trial court abused its discretion because Kenneth’s deposition testimony proved he paid the down payment from personal settlement funds and that $50,000 was outstanding on the note. The court of appeals estimated Jon’s interest in the farm as the initial purchase price minus the down payment minus the amount outstanding. Thus the court of appeals concluded that Jon was entitled to a constructive trust on an undivided 35 percent of the farm.
A party seeking to impose a constructive trust has the initial burden of tracing funds to the specific property sought to be recovered. Meyers v. Baylor Univ., 6 S.W.2d 393, 394–95 (Tex. Civ. App.—Dallas 1928, writ ref’d); see Eaton v. Husted, 172 S.W.2d 493, 498 (Tex. 1943) (“[T]he beneficiary may follow the trust property, and claim every part of the blended property which the trustee cannot identify as his own.”) (emphasis in original). Once that burden is met, “the entire . . . property will be treated as subject to the trust, except in so far as the trustee may be able to distinguish and separate that which is his own.” Eaton, 172 S.W.2d at 498–99 (emphasis in original). The trial court and court of appeals agreed that Patricia traced Jon’s funds to the farm; thus, the burden shifted to the Flournoys to demonstrate what portion of the farm’s purchase price came from their own funds. See 201 S.W.3d at 839.
The Flournoys bet the farm (as it were) when they failed to obtain a jury finding on their affirmative claim that part of the purchase money came from personal funds. Therefore, this claim is waived on appeal unless they “conclusively established” it. See T.O. Stanley Boot Co. v. Bank of El Paso, 847 S.W.2d 218, 222–23 (Tex. 1992) (citing Tex. R. Civ. P. 279). The Flournoys’ only evidence on this point was Kenneth’s deposition testimony. Kenneth, however, was an “interested witness,” so his testimony, even if uncontradicted, “presents an issue to be determined by the trier of fact.” Gevinson v. Manhattan Constr. Co., 449 S.W.2d 458, 467 (Tex. 1969).
The factfinder may treat an interested witness’s testimony as conclusive if it is “clear, direct, and positive and there are no circumstances tending to discredit or impeach the same.” Id. But here, Wilz attempted to contradict Kenneth’s testimony, and the jury in this civil case was free to draw negative inferences from the Flournoys’ repeated invocations of the Fifth Amendment. See TEX. R. EVID. 513(c); Tex. Dep’t of Pub. Safety Officers Ass’n v. Denton, 897 S.W.2d 757, 760 (Tex. 1995) (citing Baxter v. Palmigiano, 425 U.S. 308, 318 (1976)). The Flournoys failed to secure a jury finding on their claim, and the jury was free to disregard Kenneth’s deposition testimony as not credible. Therefore, the trial court did not abuse its discretion in imposing a constructive trust on the entire farm.
Accordingly, we grant Patricia Wilz’s petition for review, and without hearing oral argument, Tex. R. App. P. 59.1, reverse the court of appeals’ judgment and render judgment that the entire farm is subject to a constructive trust, see Tex. R. App. P. 60.2(c).
OPINION DELIVERED: June 29, 2007
Saturday, June 30, 2007
Ramos v. Richardson (Tex. Jun. 29, 2007)(per curiam)
Texas Supreme Court Reverses Dismissal of Prisoner's Suit as Untimely
Construes Mailbox Rule In Context Where Appellant Does Not Have Access to U. S. Mailbox
Ramos v. Richardson, No. 06-0336 (Tex. Jun. 29, 2007)(per curiam)(prisoner suit, timeliness of notice of appeal)
Full style: Armando Ramos, Sr., et al. v. Dr. Ian Richardson & Valley Baptist Medical Center, et. al.; from Cameron County;
Appeals Court below: Corpus Christi Court of Appeals (13th appellate district)
No. 13 05 00204 CV-13-05-00205-CV, ___ S.W.3d ___, 02/09/2006)
Disposition: Without hearing oral argument, the Court reverses the court of appeals' judgment and reinstates the appeal.
PER CURIAM OPINION
Petitioners Armando Ramos, an incarcerated pro se litigant, and members of his family originally brought medical malpractice actions against respondents Dr. Ian Richardson and Valley Baptist Medical Center. The trial court dismissed those suits on February 17, 2005, for noncompliance with the expert report requirements of section 74.351 of the Texas Civil Practice and Remedies Code. The petitioners appealed. The Texas Rules of Appellate Procedure required the notices of appeal to be filed by March 21, 2005. See Tex. R. App. P. 26.1, 4.1(a).[1] The petitioners claim Ramos delivered signed notices of appeal to the prison’s outgoing mailbox on March 9, 2005, for prison authorities to place in the United States mail. But the notices of appeal were not stamped “filed” by the clerk’s office of the court of appeals until March 22, 2005. The court of appeals dismissed the appeals, holding it was without jurisdiction because the petitioners’ notices of appeal were not timely filed within the plenary thirty-day period after entering judgment. ___ S.W.3d ___ (Tex. App.—Corpus Christi 2006, pet. filed); see Tex. R. Civ. P. 329b(d); Tex. R. App. P. 26.1. We reverse the court of appeals’ judgment and reinstate the appeals.
On March 4, 2005, the petitioners timely filed exceptions to the trial court’s order of dismissal. The petitioners argue such exceptions extended the timetable for their notices of appeal to ninety days under Rule 26.1(a)(2) of the Texas Rules of Appellate Procedure. We need not address this argument because the petitioners waived it by failing to advance it in their petition for review. See Tex. R. App. P. 55.2 (stating that a petitioner’s brief on the merits must be confined to issues or points stated in the petition for review).
In the alternative, the petitioners argue their notices of appeal were timely filed under the “mailbox rule,” which states a document is deemed timely filed if it is sent to the proper clerk by first-class mail in a properly addressed, stamped envelope on or before the last day for filing and is received not more than ten days beyond the filing deadline. Tex. R. Civ. P. 5; Tex. R. App. P. 9.2(b)(1). Rule 9.2(b)(2) of the Texas Rules of Appellate Procedure, entitled “Proof of Mailing,” adds the following:
Though it may consider other proof, the appellate court will accept the following as conclusive proof of the date of mailing:
(A) a legible postmark affixed by the United States Postal Service;
(B) a receipt for registered or certified mail if the receipt is endorsed by the United States Postal Service; or
(C) a certificate of mailing by the United States Postal Service.
Tex. R. App. P. 9.2(b)(2). Rule 9.2(b)(2) makes it clear that the petitioners have the burden of providing some measure of proof that their notices of appeal were placed in the United States mail on or before March 21, 2005. Such proof is present in the record in the form of the filing letter accompanying the petitioners’ notices of appeal and the certificate of service, which both state the notices of appeal were placed in the “outgoing prison mailbox” on March 9, 2005.
The respondents argue that, for purposes of the “mailbox rule,” placing the notices of appeal into the outgoing prison mailbox is not the equivalent of placing them into the United States mail. See Wembley Inv. Co. v. Herrera, 11 S.W.3d 924, 928 (Tex. 1999) (“[W]hen the sender of a document relies on office routine or custom to support an inference that the document was mailed, the sender must provide corroborating evidence that the practice was actually carried out.”).
But we have held on more than one occasion that an inmate who does everything necessary to satisfy timeliness requirements must not be penalized if the document is ultimately filed tardily because of an error on the part of officials over whom the inmate has no control. See, e.g., Williams v. T.D.C.J.-I.D., 142 S.W.3d 308, 309-10 (Tex. 2004); Warner v. Glass, 135 S.W.3d 681, 684 (Tex. 2004).
In Williams, for example, an inmate’s docketing statement was not filed by the filing deadline solely because of an error by the clerk’s office of the court of appeals. 142 S.W.3d at 309. Because the inmate “did everything necessary to comply with the rules,” we held he could not be prejudiced. Id. at 310. And in Warner, we similarly declined to penalize an inmate who timely delivered a document to the prison mailbox. 135 S.W.3d at 684.
In this case, the record indicates Ramos did everything necessary to comply with the rules by placing the notices of appeal in the outgoing prison mailbox on March 9, 2005. It is not clear when prison officials placed the notices of appeal in the United States mail, but because they were received by the clerk on March 22, 2005, it is logical to assume they were placed in the mail, as was required under the rules, on or before March 21, 2005. Though the respondents contend Ramos could just as easily have given the notices of appeal to a family member who filed them in person after the March 21, 2005 deadline, there is nothing in the record to suggest that occurred.
Accordingly, we grant the petition for review and, without hearing oral argument, we reverse the court of appeals’ judgment and reinstate the petitioners’ appeals. See Tex. R. App. P. 59.1.
OPINION DELIVERED: June 29, 2007
[1] The court of appeals acted under the impression that the trial court’s order became final on March 19, 2005. This is incorrect because March 19 fell on a Saturday. Rule 4.1(a) states:
The day of an act, event, or default after which a designated period begins to run is not included when computing a period prescribed or allowed by these rules, by court order, or by statute. The last day of the period is included, but if that day is a Saturday, Sunday, or legal holiday, the period extends to the end of the next day that is not a Saturday, Sunday, or legal holiday.
Tex. R. App. P. 4.1(a).
Construes Mailbox Rule In Context Where Appellant Does Not Have Access to U. S. Mailbox
Ramos v. Richardson, No. 06-0336 (Tex. Jun. 29, 2007)(per curiam)(prisoner suit, timeliness of notice of appeal)
Full style: Armando Ramos, Sr., et al. v. Dr. Ian Richardson & Valley Baptist Medical Center, et. al.; from Cameron County;
Appeals Court below: Corpus Christi Court of Appeals (13th appellate district)
No. 13 05 00204 CV-13-05-00205-CV, ___ S.W.3d ___, 02/09/2006)
Disposition: Without hearing oral argument, the Court reverses the court of appeals' judgment and reinstates the appeal.
PER CURIAM OPINION
Petitioners Armando Ramos, an incarcerated pro se litigant, and members of his family originally brought medical malpractice actions against respondents Dr. Ian Richardson and Valley Baptist Medical Center. The trial court dismissed those suits on February 17, 2005, for noncompliance with the expert report requirements of section 74.351 of the Texas Civil Practice and Remedies Code. The petitioners appealed. The Texas Rules of Appellate Procedure required the notices of appeal to be filed by March 21, 2005. See Tex. R. App. P. 26.1, 4.1(a).[1] The petitioners claim Ramos delivered signed notices of appeal to the prison’s outgoing mailbox on March 9, 2005, for prison authorities to place in the United States mail. But the notices of appeal were not stamped “filed” by the clerk’s office of the court of appeals until March 22, 2005. The court of appeals dismissed the appeals, holding it was without jurisdiction because the petitioners’ notices of appeal were not timely filed within the plenary thirty-day period after entering judgment. ___ S.W.3d ___ (Tex. App.—Corpus Christi 2006, pet. filed); see Tex. R. Civ. P. 329b(d); Tex. R. App. P. 26.1. We reverse the court of appeals’ judgment and reinstate the appeals.
On March 4, 2005, the petitioners timely filed exceptions to the trial court’s order of dismissal. The petitioners argue such exceptions extended the timetable for their notices of appeal to ninety days under Rule 26.1(a)(2) of the Texas Rules of Appellate Procedure. We need not address this argument because the petitioners waived it by failing to advance it in their petition for review. See Tex. R. App. P. 55.2 (stating that a petitioner’s brief on the merits must be confined to issues or points stated in the petition for review).
In the alternative, the petitioners argue their notices of appeal were timely filed under the “mailbox rule,” which states a document is deemed timely filed if it is sent to the proper clerk by first-class mail in a properly addressed, stamped envelope on or before the last day for filing and is received not more than ten days beyond the filing deadline. Tex. R. Civ. P. 5; Tex. R. App. P. 9.2(b)(1). Rule 9.2(b)(2) of the Texas Rules of Appellate Procedure, entitled “Proof of Mailing,” adds the following:
Though it may consider other proof, the appellate court will accept the following as conclusive proof of the date of mailing:
(A) a legible postmark affixed by the United States Postal Service;
(B) a receipt for registered or certified mail if the receipt is endorsed by the United States Postal Service; or
(C) a certificate of mailing by the United States Postal Service.
Tex. R. App. P. 9.2(b)(2). Rule 9.2(b)(2) makes it clear that the petitioners have the burden of providing some measure of proof that their notices of appeal were placed in the United States mail on or before March 21, 2005. Such proof is present in the record in the form of the filing letter accompanying the petitioners’ notices of appeal and the certificate of service, which both state the notices of appeal were placed in the “outgoing prison mailbox” on March 9, 2005.
The respondents argue that, for purposes of the “mailbox rule,” placing the notices of appeal into the outgoing prison mailbox is not the equivalent of placing them into the United States mail. See Wembley Inv. Co. v. Herrera, 11 S.W.3d 924, 928 (Tex. 1999) (“[W]hen the sender of a document relies on office routine or custom to support an inference that the document was mailed, the sender must provide corroborating evidence that the practice was actually carried out.”).
But we have held on more than one occasion that an inmate who does everything necessary to satisfy timeliness requirements must not be penalized if the document is ultimately filed tardily because of an error on the part of officials over whom the inmate has no control. See, e.g., Williams v. T.D.C.J.-I.D., 142 S.W.3d 308, 309-10 (Tex. 2004); Warner v. Glass, 135 S.W.3d 681, 684 (Tex. 2004).
In Williams, for example, an inmate’s docketing statement was not filed by the filing deadline solely because of an error by the clerk’s office of the court of appeals. 142 S.W.3d at 309. Because the inmate “did everything necessary to comply with the rules,” we held he could not be prejudiced. Id. at 310. And in Warner, we similarly declined to penalize an inmate who timely delivered a document to the prison mailbox. 135 S.W.3d at 684.
In this case, the record indicates Ramos did everything necessary to comply with the rules by placing the notices of appeal in the outgoing prison mailbox on March 9, 2005. It is not clear when prison officials placed the notices of appeal in the United States mail, but because they were received by the clerk on March 22, 2005, it is logical to assume they were placed in the mail, as was required under the rules, on or before March 21, 2005. Though the respondents contend Ramos could just as easily have given the notices of appeal to a family member who filed them in person after the March 21, 2005 deadline, there is nothing in the record to suggest that occurred.
Accordingly, we grant the petition for review and, without hearing oral argument, we reverse the court of appeals’ judgment and reinstate the petitioners’ appeals. See Tex. R. App. P. 59.1.
OPINION DELIVERED: June 29, 2007
[1] The court of appeals acted under the impression that the trial court’s order became final on March 19, 2005. This is incorrect because March 19 fell on a Saturday. Rule 4.1(a) states:
The day of an act, event, or default after which a designated period begins to run is not included when computing a period prescribed or allowed by these rules, by court order, or by statute. The last day of the period is included, but if that day is a Saturday, Sunday, or legal holiday, the period extends to the end of the next day that is not a Saturday, Sunday, or legal holiday.
Tex. R. App. P. 4.1(a).
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