Connie Nipp v. Terry Lee Broumley, Individually and as Independent of the Estate of Walterine Opal Broumley ( 2009 )

IN THE
TENTH COURT OF APPEALS
No. 10-08-00145-CV
CONNIE NIPP,
Appellant
v.
TERRY LEE BROUMLEY, INDIVIDUALLY
AND AS INDEPENDENT EXECUTOR OF THE
ESTATE OF WALTERINE OPAL BROUMLEY,
Appellee
From the County Court at Law No. 2
Johnson County, Texas
Trial Court No. P200418368
OPINION
Connie Nipp and Terry Broumley dispute whether three certificates of deposit
belong to the estate of their deceased mother or were properly cashed by Broumley
about a week before their mother’s death. Following a bench trial, the trial court ruled
in Broumley’s favor but ordered him to pay a small portion of Nipp’s attorney’s fees.
Nipp contends: (1) there is no evidence or factually insufficient evidence to support the
court’s findings of fact with regard to ownership of the funds represented by the CD’s;
(2) the court’s conclusions of law with regard to ownership are erroneous; (3) the
judgment cannot be affirmed on a gift theory because the court made no findings of fact
on even one element of such theory and there is no evidence or factually insufficient
evidence to support recovery under this theory; (4) the judgment cannot be affirmed on
the theory that the CD’s were P.O.D. accounts because the court made no findings of
fact on even one element of such theory and there is no evidence or factually
insufficient evidence to support recovery under this theory; and (5) because the court
erred in its ownership determination, the court erred by failing to award Nipp all of her
attorney’s fees. We will reverse and render in part and reverse and remand in part.
Background
Walterine Opal Broumley initially purchased three CD’s “in the mid to late
[19]80’s.” The CD’s were payable to “Mrs. H. O. Broumley or Terry Broumley.”1 Over
the years, Mrs. Broumley renewed the CD’s when they matured. Terry used them as
collateral on occasions for various loans. Mrs. Broumley was diagnosed with
inoperable cancer in late 2003 and was given about five months to live. Terry cashed
the three CD’s (collectively worth about $76,000) eight days before Mrs. Broumley died.
Nipp had learned about the existence of the CD’s while caring for her mother in
her last months. After Nipp discovered that the CD’s were not included in the
inventory of the assets of her mother’s estate, she filed suit seeking a declaration that
1
Nipp testified that the initials “H. O.” referred to her father Herman Otis Broumley who died in
1978.
Nipp v. Broumley Page 2
the CD’s were property of the estate and an order requiring Terry to reimburse the
estate for their value.
The trial court determined that the funds represented by the CD’s were jointly
owned by Terry and Mrs. Broumley, that Terry had the right to cash the CD’s, and that
the CD’s were not assets of the estate on the date of Mrs. Broumley’s death.
Nevertheless, the court ordered Terry to pay $625 of the $19,063 in attorney’s fees
sought by Nipp.2
Issues Presented
The items listed in the “Issues Presented” section of Nipp’s brief do not precisely
correspond with the issues outlined in her table of contents or in the argument portion
of her brief. Restated, Nipp contends that the court erroneously determined that Terry
owned the CD’s because: (1) there is no evidence and factually insufficient evidence to
support such a finding; (2) the court’s conclusions of law with respect to ownership are
erroneous; (3) the judgment cannot be affirmed on a gift theory because the court made
no findings of fact on even one element of such theory and there is no evidence or
factually insufficient evidence to support recovery under this theory; and (4) the
judgment cannot be affirmed on the theory that the CD’s were P.O.D. accounts because
the court made no findings of fact on even one element of such theory and there is no
evidence or factually insufficient evidence to support recovery under this theory.
2
Terry represented himself at trial. The court calculated this sum by applying the hourly rate
testified to by Nipp’s attorney to a delay in trial of two and one-half hours occasioned by Terry’s inability
to have a witness in court sooner.
Nipp v. Broumley Page 3
On the issue of attorney’s fees, Nipp contends that, because the court erred in its
ownership determination, the court erred by failing to award her all of her attorney’s
fees.
Standard of Review
Findings of fact in a bench trial have the same force and dignity as
a jury’s verdict upon jury questions. When challenged on appeal, the
findings are not conclusive on the appellate court if there is a complete
reporter’s record, as there is here. Generally, we will not disturb a trial
court’s findings if there is evidence of probative force to support them.
Although we show deference to a trial court’s findings, those
findings are reviewable for legal and factual sufficiency of the evidence by
the same standards that are applied in reviewing evidence supporting a
jury’s answers. We review the trial court’s conclusions of law de novo.
Under de novo review, the reviewing court exercises its own judgment and
redetermines each legal issue.
Wells Fargo Bank, N.A. v. Citizens Bank of Tex., N.A., 181 S.W.3d 790, 796 (Tex. App.—
Waco 2005, pet. denied) (citations omitted).
Ownership
Nipp contends that there is no evidence and factually insufficient evidence to
support the court’s findings of fact with regard to ownership of the funds represented
by the CD’s insofar as ownership of multiple-party accounts is defined by sections 436
through 438 of the Probate Code. She also contends that the court’s conclusions of law
with regard to ownership are erroneous.
Section 436 provides various definitions for Chapter XI of the Probate Code
which are relevant to the parties’ dispute. See TEX. PROB. CODE ANN. § 436 (Vernon
2003). Certificates of deposit are included within the definition of “accounts.” Id. §
Nipp v. Broumley Page 4
436(1); Bandy v. First State Bank, 835 S.W.2d 609, 615 (Tex. 1992). Joint accounts like the
CD’s at issue are considered “multiple-party accounts.” TEX. PROB. CODE ANN. § 436(5).
And a “party” to such accounts is defined as “a person who, by the terms of the
account, has a present right, subject to request, to payment from a multiple-party
account.” Id. § 436(7).
Section 438(a) states, “A joint account belongs, during the lifetime of all parties,
to the parties in proportion to the net contributions by each to the sums on deposit,
unless there is clear and convincing evidence of a different intent.” Id. § 438(a) (Vernon
2003). And section 437 explains that the pertinent statutes concern only the beneficial
ownership of such accounts and have no bearing on the right of withdrawal.
The provisions of Sections 438 through 440 of this code that concern
beneficial ownership as between parties, or as between parties and P.O.D.
payees or beneficiaries of multiple-party accounts, are relevant only to
controversies between these persons and their creditors and other
successors, and have no bearing on the power of withdrawal of these
persons as determined by the terms of account contracts.
Id. § 437 (Vernon 2003).
Chapter XI also contains provisions which address the right of withdrawal and a
bank’s obligations with regard to that right. Section 444 provides:
Financial institutions may enter into multiple-party accounts to the
same extent that they may enter into single-party accounts. A multiple-
party account may be paid, on request, to any one or more of the parties.
A financial institution shall not be required to inquire as to the source of
funds received for deposit to a multiple-party account, or to inquire as to
the proposed application of any sum withdrawn from an account, for
purposes of establishing net contributions.
Id. § 444 (Vernon 2003).
Nipp v. Broumley Page 5
Section 445 provides in pertinent part, “Any sums in a joint account may be paid,
on request, to any party without regard to whether any other party is incapacitated or
deceased at the time the payment is demanded.” Id. § 445 (Vernon 2003). And section
448 provides in pertinent part, “Payment made as provided by Section 444, 445, 446, or
447 of this code discharges the financial institution from all claims for amounts so paid
whether or not the payment is consistent with the beneficial ownership of the account
as between parties, P.O.D. payees, or beneficiaries, or their successors.” Id. § 448
(Vernon 2003).
In addition to these statutes, the Uniform Commercial Code contains relevant
provisions. Under the UCC, “’[c]ertificate of deposit’ means an instrument containing
an acknowledgment by a bank that a sum of money has been received by the bank and
a promise by the bank to repay the sum of money. A certificate of deposit is a note of
the bank.” TEX. BUS. & COM. CODE ANN. § 3.104(j) (Vernon Supp. 2008); May v. Walter,
956 S.W.2d 138, 142 (Tex. App.—Amarillo 1997, pet. denied); see Thompson v. Thompson,
149 Tex. 632, 236 S.W.2d 779, 791 (1951) (pre-UCC decision);3 Dallas/Fort Worth Airport
Bank v. Dallas Bank & Trust Co., 667 S.W.2d 572, 575 (Tex. App.—Dallas 1984, no writ)
(citing previous version of UCC).
“If an instrument is payable to two or more persons alternatively, it is payable to
any of them and may be negotiated, discharged, or enforced by any or all of them in
possession of the instrument.” TEX. BUS. & COM. CODE ANN. § 3.110(d) (Vernon 2002).
3
The Uniform Commercial Code was not enacted in Texas until 1965. See Uniform Commercial
Code, 59th Leg., R.S., ch. 721, 1965 Tex. Gen. Laws 1.
Nipp v. Broumley Page 6
As Comment 4 to section 3.110 explains, “If an instrument is payable to X or Y, either is
the payee and if either is in possession that person is the holder and the person entitled
to enforce the instrument.” Id. cmt. 4.
It is important to distinguish between the right of negotiation or enforcement of
the CD’s themselves and beneficial ownership of the funds the CD’s represent. See
Kenneth McLaughlin, Jr., Joint Accounts, Totten Trusts, and the Poor Man’s Will, 44 TEX.
B.J. 871, 875 (1981). A CD constitutes intangible personal property which is a record of
the debt owed by the bank to the holder(s) but does not establish ownership of the
funds evidenced by the CD. See Edwards v. Pena, 38 S.W.3d 191, 197 (Tex. App.—
Corpus Christi 2001, no pet.); May, 956 S.W.2d at 142; see also TEX. TAX CODE ANN. §
1.04(6) (Vernon 2008). Section 438 governs the beneficial ownership of funds evidenced
by a multiple-party CD. See TEX. PROB. CODE ANN. §§ 437, 438; Stegall v. Oadra, 868
S.W.2d 290, 292 (Tex. 1993).
Conversely, sections 444 through 450 are designed primarily for the benefit and
protection of the bank and do not govern ownership of the funds represented by a
multiple-party CD. See Stegall, 868 S.W.2d at 293; Bandy, 835 S.W.2d at 616; see also
Chopin v. Interfirst Bank Dallas, N.A., 694 S.W.2d 79, 83 (Tex. App.—Dallas 1985, writ
ref’d n.r.e.).
Here, the court stated in Finding of Fact No. VI that Terry and Mrs. Broumley
“owned” the three CD’s. In Conclusion of Law No. XII,4 the court found as a matter of
4
We are not bound by the labels the court applied to its findings of fact and conclusions of law.
See Ray v. Farmers State Bank of Hart, 576 S.W.2d 607, 608 n.1 (Tex. 1979); Clay v. Mercado, 224 S.W.3d 277,
283 n.1 (Tex. App.—El Paso 2005, no pet.).
Nipp v. Broumley Page 7
law that they were “joint owners” of the CD’s when Terry cashed them. In Conclusion
of Law No. XIII, the court found as a matter of law that Terry then had “the present
right . . . to request and receive payment of the sums on deposit” evidenced by the
CD’s. And in Conclusion of Law No. XIV, the court found as a matter of law that (1)
these “sums of deposit . . . were multi-party accounts jointly owned by [Mrs.
Broumley and Terry]” when he cashed the CD’s and (2) these sums “were not assets of
the estate” of Mrs. Broumley at her death.
It appears from the court’s findings of fact and conclusions of law that the court
based its ownership determination solely on Terry’s status as a party to the CD’s who
had an undisputed right to withdraw the funds represented by the CD’s. See TEX. PROB.
CODE ANN. §§ 437, 444, 445; see also TEX. BUS. & COM. CODE ANN. § 3.110(d). However,
beneficial ownership of the funds is determined by application of section 438 and is
distinct from the right of withdrawal. See TEX. PROB. CODE ANN. §§ 437, 438; Stegall, 868
S.W.2d at 293; Bandy, 835 S.W.2d at 616; Chopin, 694 S.W.2d at 83.
It is undisputed that Mrs. Broumley was the sole source of the funds at issue.
Therefore, she retained beneficial ownership of these funds at the time of their
withdrawal absent clear and convincing evidence to the contrary. See TEX. PROB. CODE
ANN. § 438(a).
Gift
At trial, Terry took the position that the funds were a gift to him from his mother.
Much of the parties’ closing argument focused on whether Terry proved the elements of
a gift. Nipp argues that the court’s findings are silent on this theory. She argues in the
Nipp v. Broumley Page 8
alternative that there is no evidence or factually insufficient evidence to support a
finding on this theory.
Nipp’s contention that the court made no findings on any element of the gift
theory is based on Rule of Civil Procedure 299, which provides:
When findings of fact are filed by the trial court they shall form the
basis of the judgment upon all grounds of recovery and of defense
embraced therein. The judgment may not be supported upon appeal by a
presumed finding upon any ground of recovery or defense, no element of
which has been included in the findings of fact; but when one or more
elements thereof have been found by the trial court, omitted unrequested
elements, when supported by evidence, will be supplied by presumption
in support of the judgment. Refusal of the court to make a finding
requested shall be reviewable on appeal.
TEX. R. CIV. P. 299.
We begin by examining the elements necessary to establish the existence of a gift.
A gift is a voluntary transfer of property to another made
gratuitously and without consideration. Three elements are required to
establish the existence of a gift: (1) the donor’s intent to make a gift; (2)
delivery of the property; and (3) acceptance of the property. Donative
intent must exist at the time of the transfer, not at the time of a subsequent
event.
Lopez v. Lopez, 271 S.W.3d 780, 788 (Tex. App.—Waco 2008, no pet.) (citations omitted);
accord Magness v. Magness, 241 S.W.3d 910, 912 (Tex. App.—Dallas 2007, pet. denied).
The court stated in Finding of Fact No. XII that the bank “paid all sums on
deposit” for the CD’s to Terry. We construe this as a finding that the funds were
delivered to Terry, and delivery is one of the elements of a gift. See Bishop v. Bishop, 359
S.W.2d 869, 871 (Tex. 1962) (delivery of gift may be accomplished by actual or
constructive delivery); Smith v. Smith, 607 S.W.2d 617, 620 (Tex. Civ. App.—Waco 1980,
Nipp v. Broumley Page 9
no writ) (same). Therefore, we will examine the record to determine whether there is
evidence to support implied findings on the other two elements. See TEX. R. CIV. P. 299.
Terry bore the burden of proving that a gift was made. Hayes v. Rinehart, 65
S.W.3d 286, 289 (Tex. App.—Eastland 2001, no pet.); Edwards, 38 S.W.3d at 197; Dorman
v. Arnold, 932 S.W.2d 225, 228 (Tex. App.—Texarkana 1996, no writ); cf. Akin v. Akin, 649
S.W.2d 700, 703 (Tex. App.—Fort Worth 1983, writ ref’d n.r.e.) (appellee had burden to
prove gift to overcome community-property presumption). He had to prove the
making of a gift by clear and convincing evidence. See TEX. PROB. CODE ANN. § 438(a);
Hayes, 65 S.W.3d at 289. Because of this elevated burden of proof at trial, an elevated
standard of review also applies on appeal. Sw. Bell Tel. Co. v. Garza, 164 S.W.3d 607, 627
(Tex. 2004).
Under a no-evidence review, we view all the evidence in the light most favorable
to the court’s finding, taking into account contrary undisputed evidence, to determine
whether a reasonable factfinder could have formed a firm belief or conviction regarding
the making of a gift. Id. Under a factual sufficiency review, we ask whether the
“disputed evidence is such that a reasonable factfinder could not have resolved that
disputed evidence in favor of its finding.” In re J.F.C., 96 S.W.3d 256, 266 (Tex. 2002)
(citing In re C.H., 89 S.W.3d 17, 25 (Tex. 2002)).
The alleged donor’s intent is the primary issue. Hayes, 65 S.W.3d at 289; Lee v.
Lee, 43 S.W.3d 636, 642 n.4 (Tex. App.—Fort Worth 2001, no pet.); Dorman, 932 S.W.2d at
227; Thompson v. Lawson, 793 S.W.2d 94, 96 (Tex. App.—Eastland 1990, writ denied).
Nipp v. Broumley Page 10
Among the indispensable conditions of a valid gift are the intention of the
donor to absolutely and irrevocably divest himself of the title, dominion,
and control of the subject of the gift in praesenti at the very time he
undertakes to make the gift; . . . the irrevocable transfer of the present
title, dominion, and control of the thing given to the donee, so that the
donor can exercise no further act of dominion or control over it.
Harmon v. Schmitz, 39 S.W.2d 587, 589 (Tex. Comm’n App. 1931, judgm’t adopted)
(quoting Allen-West Comm’n Co. v. Grumbles, 129 F. 287, 290 (8th Cir. 1904)). Thus the
requisite donative intent is established by, among other things, evidence that the donor
intended an immediate and unconditional divestiture of his or her ownership interests and
an immediate and unconditional vesting of such interests in the donee. See Wells v.
Sansing, 151 Tex. 36, 245 S.W.2d 964, 965 (Tex. 1952); Edwards, 38 S.W.3d at 197; Oadra v.
Stegall, 871 S.W.2d 882, 890 (Tex. App.—Houston [14th Dist.] 1994, no writ); Thompson,
793 S.W.2d at 96; Akin, 649 S.W.2d at 703.
Here, Terry testified that Mrs. Broumley first purchased the CD’s about twenty
years ago and renewed them from time to time as they matured. Terry used them as
collateral on occasions for various loans, but there is no evidence that he ever withdrew
any of the funds represented by the CD’s until eight days before Mrs. Broumley’s death.
Terry testified that “[t]here were several instances” over the years when Mrs. Broumley
discussed with him her intent that he have those funds “to use as [he] needed or as [he]
pleased.” The last time they had such a conversation was at some unspecified time
“before the bad days of her illness” when she started receiving hospice care.
Nipp v. Broumley Page 11
During this same period, Terry conceded that Mrs. Broumley retained the
authority to cash the CD’s herself. She kept the CD’s in a lock box in her home where
they remained until Terry retrieved them and cashed them at the bank.
Under similar factual circumstances, Texas courts have consistently concluded
that no gift of funds was made. See Hayes, 65 S.W.3d at 289; McConathy v. McConathy,
No. 05-95-1036-CV, 1997 WL 145172, at *4 (Tex. App.—Dallas Apr. 1, 1997, writ denied)
(not designated for publication); Dorman, 932 S.W.2d at 227-28; Oadra, 871 S.W.2d at 893;
Akin, 649 S.W.2d at 704-05; see also Ayers v. Mitchell, 167 S.W.3d 924, 929-30 (Tex. App.—
Texarkana 2005, no pet.) (applying gift law to alleged transfer of trust property). First,
the evidence establishes that days or weeks passed between the date of Terry’s last
conversation with Mrs. Broumley about the CD’s and the date he cashed them. And
second, Mrs. Broumley retained control over the funds represented by the CD’s until
the date Terry withdrew those funds. Thus, no reasonable factfinder could have
formed a firm belief or conviction that an immediate and unconditional divestiture of
Mrs. Broumley’s ownership occurred on the occasion of their last conversation
regarding her intentions about the CD’s. Id.
Other Theories
Nipp contends that the court did not make a finding on even one element of the
alternative theory that the CD’s were P.O.D. accounts. She argues in the alternative that
there is no evidence or factually insufficient evidence to support a finding on this
theory. However, Terry did not pursue this theory at trial, nor does he on appeal.
Thus, we do not address whether the CD’s were P.O.D. accounts.
Nipp v. Broumley Page 12
A bank officer testified that the CD’s were joint accounts with rights of
survivorship. However, the record contains no written agreement between Mrs.
Broumley and the bank evidencing that the CD’s were accounts with rights of
survivorhip. A written agreement is required by section 439(a) of the Probate Code,
and parol evidence is not admissible to prove a right of survivorship in an account
governed by this statute. TEX. PROB. CODE ANN. § 439(a) (Vernon 2003); A.G. Edwards &
Sons, Inc. v. Beyer, 235 S.W.3d 704, 708 (Tex. 2007); Stauffer v. Henderson, 801 S.W.2d 858,
865-66 (Tex. 1990).
Accordingly, there is no evidence in the record to support a finding that the CD’s
were joint accounts with rights of survivorship.
Attorney’s Fees
Finally, Nipp argues that, because the court’s findings and conclusions with
regard to ownership of the funds are erroneous, the court likewise erred by failing to
award her all of her attorney’s fees.
Although Nipp’s attorney testified5 concerning reasonable and necessary
attorney’s fees, the court made no findings of fact or conclusions of law on the issues of
whether Nipp was entitled to attorney’s fees or the amount of reasonable and necessary
attorney’s fees incurred. Nipp did not object to the absence of such findings, even
though she filed a request for findings of fact and conclusions of law and later filed a
notice of past due findings of fact and conclusions of law. Because of the absence of any
5
Terry complains that Nipp’s attorney provided no sworn testimony. However, Terry waived the
requirement that the witness be placed under oath by failing to object when the court permitted counsel
to testify without first being placed under oath. See Banda v. Garcia, 955 S.W.2d 270, 272 (Tex. 1997) (per
curiam); Keith v. Keith, 221 S.W.3d 156, 169-70 (Tex. App.—Houston [1st Dist.] 2006, no pet.).
Nipp v. Broumley Page 13
findings on the issue of attorney’s fees, we will not render judgment in Nipp’s favor for
attorney’s fees. See Nelson v. Nelson, 193 S.W.3d 624, 630 (Tex. App.—Eastland 2006, no
pet.); cf. Buckeye Retirement Co., LLC v. Bank of Am., N.A., 239 S.W.3d 394, 405-06 (Tex.
App.—Dallas 2007, no pet.) (affirming denial of attorney’s fees where bank did not
object to lack of findings or request additional findings). Instead, we will remand for
the court to reconsider whether to award attorney’s fees.
Conclusion
Mrs. Broumley retained beneficial ownership of the funds represented by the
CD’s until her death. There is no evidence to support a finding that she made a gift of
these funds to Terry or that he obtained ownership of the funds under some other
theory. Thus, the court erred by concluding that Terry owned these funds at the time of
withdrawal.
Accordingly, we reverse the judgment of the trial court and render judgment in
part declaring that the funds represented by the CD’s were the property of Mrs.
Broumley at the time of her death and are property of the estate. We further remand
this cause to the trial court to reconsider whether to award attorney’s fees to Nipp.
FELIPE REYNA
Justice
Nipp v. Broumley Page 14
Before Chief Justice Gray,
Justice Reyna, and
Justice Davis
(Chief Justice Gray concurring with note)*
Reversed and rendered in part,
Reversed and remanded in part
Opinion delivered and filed April 1, 2009
[CV06]
* (Chief Justice Gray concurs in the judgment to the extent that it determines the
certificates of deposit were owned by Opal Broumley at the time they were cashed out
by Terry Broumley and that as a result thereof the Estate of Opal Broumley has a claim
against Terry Broumley for the amount thereof. Further, Chief Justice Gray concurs in
the remand of this proceeding to the trial court for reconsideration by the trial court of
the issue of attorney’s fees. Other than as expressly stated in this note, Chief Justice
Gray does not join the opinion or judgment. A separate opinion will not follow.)
Nipp v. Broumley Page 15