bryan-holmes-as-independent-administrator-of-the-estate-of-frances-k ( 2003 )

NUMBER 13-02-337-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG

BRYAN LEE HOLMES, AS

INDEPENDENT ADMINISTRATOR

OF THE ESTATE OF FRANCES K.

SNYDER, DECEASED, AND AS

TRUSTEE OF THE FRANCES K.

SNYDER TRUST, Appellant,

v.

ROBERT R. FURGASON AND

TEXAS A & M - CORPUS CHRISTI

FOUNDATION, INC., Appellees.

On appeal from the 214th District Court of Nueces County, Texas. O P I N I O N

Before Justices Yañez, Castillo, and Garza Opinion by Justice Yañez

   Bryan Lee Holmes, appellant and independent administrator of the estate of Francis K. Snyder, challenges the trial court's summary judgment in favor of Robert R. Furgason and the Texas A&M-Corpus Christi Foundation (the Foundation), appellees. We reverse.

I. Background

The underlying proceeding is a suit to set aside a two-million-dollar gift from Francis K. Snyder, deceased, to the Foundation. Snyder was 99 years old at the time the gift was made. It was the second largest gift ever given to the Foundation.

Holmes filed suit against Furgason, President of Texas A&M-Corpus Christi, and the Foundation, alleging that Snyder was mentally incompetent at the time she made the gift. The lawsuit alleged causes of action for lack of mental capacity, undue influence, fraud, conversion, breach of fiduciary duty, constructive trust, constructive fraud, conspiracy, and intentional infliction of emotional distress.

Furgason filed a traditional motion for summary judgment as to each cause of action. The trial court granted Furgason's motion on all grounds. The Foundation filed traditional and no-evidence motions for summary judgment as to each cause of action. The trial court granted the Foundation's no-evidence motion on every ground except lack of mental capacity. That remaining cause of action was severed.

In this appeal, Holmes challenges the granting of Furgason and the Foundation's motions for summary judgment only as to the causes of action for undue influence, fraud, and constructive trust.

II. Standard of Review

When reviewing traditional summary judgments, ⁽¹⁾ the standard is whether the successful movant at trial carried the burden of showing that there is no genuine issue of material fact and that judgment should be granted as a matter of law. M.D. Anderson v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000); Am. Tobacco Co., Inc. v. Grinnell, 951 S.W.2d 420, 425 (Tex. 1997). In resolving the issue of whether the movant has carried this burden, all evidence favorable to the non-movant must be taken as true and all reasonable inferences, including any doubts, must be resolved in the non-movant's favor. Willrich, 28 S.W.3d at 23-24.  

When reviewing no-evidence summary judgments, the movant does not bear the burden of establishing each element of its own claim or defense. See Tex. R. Civ. P. 166a(i). Rather, the burden shifts to the non-movant to present evidence raising a genuine issue of material fact in support of the challenged elements. See Michael v. Dyke, 41 S.W.3d 746, 750-51 (Tex. App.-Corpus Christi 2001, no pet.); see also City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 678 (Tex. 1979). We apply the same legal sufficiency standard in reviewing a no-evidence summary judgment as we apply in reviewing a directed verdict. Zapata v. Children's Clinic, 997 S.W.2d 745, 747 (Tex. App.-Corpus Christi 1999, pet. denied). We review the evidence in the light most favorable to the party against whom the summary judgment was rendered, disregarding all contrary evidence and inferences. Merrell Dow Pharm., Inc. v. Havner, 953 S.W.2d 706, 711 (Tex. 1997). A no-evidence summary judgment is improper if the respondent brings forth more than a scintilla of probative evidence to raise a genuine issue of material fact. Havner, 953 S.W.2d at 711. More than a scintilla of evidence exists when the evidence rises to a level that would enable reasonable and fair-minded people to differ in their conclusions. Id.

III. Applicable Law

"The rules guiding determination of the existence of undue influence apply substantially alike to wills, deeds, and other instruments." Bradshaw v. Nauman, 528 S.W.2d 869, 871 (Tex. Civ. App.-Austin 1975, writ dism'd); see DeGrassi v. DeGrassi, 533 S.W.2d 81, 85 (Tex. Civ. App.-Amarillo 1976, writ ref'd n.r.e.); Bounds v. Bounds, 382 S.W.2d 947, 950 (Tex. Civ. App.-Amarillo 1964, writ ref'd n.r.e.); Self v. Thornton, 343 S.W.2d 485, 487 (Tex. Civ. App.-Texarkana 1960, writ ref'd n.r.e.).

Before a gift instrument can be set aside because of undue influence, the contestant must prove: (1) the existence and exertion of an influence; (2) the effective operation of that influence so as to subvert or overpower the donor's mind at the time of the execution of the instrument; and (3) the execution of an instrument that the maker would not have executed but for such influence. See Estate of Graham, 69 S.W.3d 598, 609 (Tex. App.-Corpus Christi 2001, no pet.) (citing Rothermel v. Duncan, 369 S.W.2d 917, 922 (Tex. 1963)).

"Courts have long recognized that the exertion of influence that was or became undue is usually a subtle thing and by its very nature usually involves an extended course of dealings and circumstances." Id. (citing Rothermel, 369 S.W.2d at 922). "Thus, it may be proved by circumstantial evidence." Id. (citing Rothermel, 369 S.W.2d at 922). The evidence of undue influence is sufficient, even if none of the circumstances standing alone would be sufficient to show the elements of undue influence, when the circumstances, considered together, produce a reasonable belief that an influence was exerted that subverted or overpowered the mind of the donor and resulted in the execution of the instrument in controversy. See id. (citing Rothermel, 369 S.W.2d at 922-23).

When determining whether undue influence exists in a particular case, the following factors are considered: (1) the nature and type of relationship existing between the donor, the contestants, and the party accused of exerting such influence; (2) the opportunities existing for the exertion of the type of influence or deception possessed or employed; (3) the circumstances surrounding the drafting and execution of the instrument; (4) the existence of a fraudulent motive; (5) whether there has been a habitual subjection of the donor to the control of another; (6) the state of the donor's mind at the time of the execution of the instrument; (7) the donor's mental or physical incapacity to resist or the susceptibility of the donor's mind to the type and extent of the influence exerted; (8) words and acts of the donor; (9) weakness of the mind and body of the donor, whether produced by infirmities of age or by disease or otherwise; and (10) whether the instrument executed is unnatural in its terms of disposition of property. See id. at 610 (citing Rothermel, 369 S.W.2d at 923).

"Although a contestant may prove undue influence by circumstantial evidence, the evidence must be probative of the issue and not merely create a surmise or suspicion that such influence existed at the time the will was executed." Id. (citing Rothermel, 369 S.W.2d at 922). "[T]he circumstances relied on as establishing the elements of undue influence must be of a reasonably satisfactory and convincing character, and they must not be equally consistent with the absence of the exercise of such influence." Id. at 609 (citing Rothermel, 369 S.W.2d at 922-23).

"A fact issue is raised by circumstantial evidence if, from the evidence, a reasonable person would conclude that the existence of the facts is more reasonable than its nonexistence." Estate of Murphy, 694 S.W.2d 10, 12 (Tex. App.-Corpus Christi 1984, writ ref'd n.r.e.). "All that is required is that the circumstances point to ultimate facts sought to be established with such a degree of certainty as to make the conclusion reasonably probable." Id. (citing Smith v. Tenn. Life Ins. Co., 618 S.W.2d 829, 834 (Tex. Civ. App.-Houston [1st Dist.] 1981, no writ).

IV. Analysis

A. Undue Influence

Holmes first contends the trial court erred in granting appellees' motions for summary judgment on undue influence. We agree. When the circumstances of this case are considered together, they produce a reasonable belief of undue influence, even though none of the circumstances of this case standing alone would be sufficient to show its elements. See Estate of Graham, 69 S.W.3d at 609 (citing Rothermel, 369 S.W.2d at 922).

Furgason had the opportunity to exert undue influence, as he has admitted to private meetings with Snyder prior to the gift instrument's execution. Snyder's friend, accountant, attorney, nurse, and four doctors all state she was mentally incapacitated during the time period in which the instrument was signed. The two-million-dollar gift was originally drafted by Snyder's attorney to be for one million dollars. The final version of the instrument was prepared by Furgason. Furgason presented the instrument to Snyder to sign without any of her familial, legal, or financial representatives present. Contrary to her usual practice when transferring trust funds, Snyder did not sign the instrument as a trustee. The size of the gift left Snyder with little funds in comparison. After the instrument's execution, another attorney for Snyder wrote to the Foundation to question the gift, its improvidence, and the financial situation in which it left her.

These circumstances point to the ultimate facts with a degree of certainty that make the elements of undue influence reasonably probable. See Estate of Murphy, 694 S.W.2d at 12 (citing Smith, 618 S.W.2d at 834). Thus, Holmes raised a fact issue because the existence of undue influence is more reasonable than its nonexistence. See id.

Furgason did not meet his summary judgment burden of showing that there is no genuine issue of material fact regarding undue influence and that judgment should be granted as a matter of law. Thus, the trial court erred by granting summary judgment to Furgason on undue influence. In addition, Holmes met his burden to overcome a no-evidence summary judgment by presenting evidence that raised a genuine issue of material fact in support of the elements of undue influence. Thus, the trial court also erred by granting summary judgment to the Foundation on undue influence. This issue is sustained.

B. Fraud

Holmes next contends the trial court erred in granting appellees' motions for summary judgment as to fraud. "In a suit to invalidate an instrument, fraud in the inducement and undue influence are treated as one in Texas, the rule being that undue influence is merely a species of fraud." Novak v. Schellenberg, 718 S.W.2d 822, 824 (Tex. App.-Corpus Christi 1986, no writ) (citing Curry v. Curry, 153 Tex. 421, 270 S.W.2d 208, 214 (1954)). "Even though undue influence is a species of fraud, evidence will not support a legal conclusion of undue influence . . . unless it will support a legal conclusion of fraud." Finch v. McVea, 543 S.W.2d 449, 452 (Tex. Civ. App.-Corpus Christi 1976, writ ref'd n.r.e.) (citing Curry, 270 S.W.2d at 214). We hold, therefore, that the genuine issues of material fact raised regarding undue influence also support the appellant's cause of action for fraud. The trial also erred by granting summary judgment to Furgason and the Foundation as to fraud. This issue is sustained.C. Constructive Trust

Finally, Holmes contends the trial court erred in granting appellees' motions for summary judgment as to constructive trust. We agree.

"Constructive trusts are remedial in character and have the broad function of redressing wrong or unjust enrichment in keeping with the basic principles of equity and justice." Castano v. Wells Fargo Bank, 82 S.W.3d 40, 43 (Tex. App.-San Antonio 2002, no pet.) (citing Ginther v. Taub, 675 S.W.2d 724, 728 (Tex. 1984)). More specifically, a "[c]onstructive trust is an equitable remedy that is imposed upon property obtained by fraudulent means." Estate of Graham, 69 S.W.3d at 602 n. 1 (citing Thigpen v. Locke, 363 S.W.2d 247, 250 (Tex. 1962)). "In general, whenever legal title to property, real or personal, has been obtained through . . . undue influence . . . , equity impresses a constructive trust on the property thus acquired in favor of the one who is truly and equitably entitled to the same." Fitz-Gerald v. Hull, 150 Tex. 39, 237 S.W.2d 256, 262-63 (1951).

Because we have held already that a fact issue remains regarding undue influence, a constructive trust may be an appropriate remedy. This issue is sustained.

D. Estoppel and/or Ratification

The Foundation contends this Court should address its affirmative defenses of estoppel and ratification if we sustain any of appellant's issues. We disagree.

The Foundation's motion for summary judgment included these affirmative defenses and both were expressly denied. The Foundation subsequently filed a cross-notice of appeal.

"The general rule is that appellate courts do not have jurisdiction to hear denied motions for summary judgment . . . ." Hines v. Comm'n for Lawyer Discipline, 28 S.W.2d 697, 700 (Tex. App.-Corpus Christi 2000, no pet.) (citing Ackermann v. Vordenbaum, 403 S.W.2d 362, 365 (Tex. 1966)); see Highlands Mgmt. Co., Inc. v. First Interstate Bank of Tex., 956 S.W.2d 749, 752 (Tex. App.-Houston [14th Dist.] 1997, pet. denied). The Foundation neither cites authority nor offers any compelling reason why we should deviate from this rule. Accordingly, we dismiss the Foundation's cross-appeal for want of jurisdiction.V. Conclusion

We sustain Holmes' issues regarding undue influence, fraud, and constructive trust. We dismiss the Foundation's cross-appeal. The judgment of the trial court is reversed. The case is remanded to the trial court for further proceedings.  

LINDA REYNA YAÑEZ

Justice

Opinion delivered and filed this the

29th day of August, 2003.  

1. See Tex. R. Civ. P. 166a(c).