Gray v. Sangrey

• Decision Date: 15 April 2014
• Docket Number: No. 06–13–00043–CV.,06–13–00043–CV.
• Citation: 428 S.W.3d 311
• Parties: Elizabeth Sangrey GRAY and Tommy Dean Gray, Jr., Appellants v. Verna Pauline SANGREY, Appellee.
• Court: Texas Court of Appeals

428 S.W.3d 311

Elizabeth Sangrey GRAY and Tommy Dean Gray, Jr., Appellants

v.Verna Pauline SANGREY, Appellee.

No. 06–13–00043–CV.

Court of Appeals of Texas, Texarkana.

Submitted Jan. 3, 2014.

Decided Feb. 20, 2014.

Rehearing Overruled April 15, 2014.

James Finstrom, Jefferson, for Appellants.

Andrew G. Khoury, Khoury Law Firm, Longview, for Appellee.

Before MORRISS, C.J., CARTER and MOSELEY, JJ.

OPINION

Opinion by Justice MOSELEY.

Verna Pauline Sangrey ¹ brought suit against her daughter, Elizabeth Sangrey Gray, and her son-in law, Tommy Dean Gray, Jr. (collectively referred to as the Grays), seeking to impose a constructive trust against a house and lot that had been deeded to the Grays. Specifically, Sangrey alleged that the parties had a mutual understanding whereby the Grays would take out a loan to purchase the house and lot in Jefferson, Texas, adjacent to their own, and once Sangrey fully satisfied the debt incurred in the purchase and the lien securing it was released, they would transfer title to Sangrey. As Sangrey was unavailable to testify at trial because of the apparent onset of senility, the trial court admitted, over the Grays' hearsay objections, testimony regarding the content of the alleged agreement. It was undisputed and established by competent evidence that Sangrey paid the down payment on the home, moved in, satisfied the note installments until her home elsewhere had been sold, and, upon the sale of Sangrey's former home, fully satisfied the outstanding balance of the lien. The Grays refused to transfer title to Sangrey.

After a bench trial, the trial court found that a confidential relationship existed between Sangrey and Elizabeth, that Elizabeth breached her fiduciary duty to Sangrey, and that the Grays failed to prove the transaction between them and Sangrey was fair. The court imposed a constructive trust on the Jefferson house in Sangrey's favor. After the trial court entered judgment and findings of fact and conclusions of law, the Grays appealed.

On appeal, the Grays contend that the trial court erred (1) by admitting and considering the hearsay testimony of Sangrey to establish the constructive trust, (2) by finding Sangrey had a confidential relationship with Elizabeth; (3) by basing its finding that a confidential relationship existed (alleging that no valid evidence supports that finding), and (4) by imposing a constructive trust against Tommy's separate interest in the Jefferson house.

We affirm the trial court's judgment.

I. Factual Background

In November 2006, Tommy and Elizabeth Sangrey purchased a house and lot in Jefferson, Texas (the property or the Jefferson house) that abutted their own residence. They were not married at the time and purchased the property in their individual names. Tommy and Elizabeth were planning to marry in 2007, and Elizabeth testified that Sangrey made the $15,029.91 down payment on the Jefferson house as a wedding gift to her. Tommy and Elizabeth married in July 2007.

Sangrey made the down payment on the Jefferson house in November, moved into the property in either November or December 2006 (shortly after the closing of the purchase), paid the monthly mortgage installment for December 2006, and possibly paid the installment for January 2007. In late January 2007, Sangrey sold her house in Gladewater, Texas, and applied $76,131.70 of the $85,008.89 net proceeds to pay off the mortgage on the Jefferson house the very next day. Sangrey lived in the Jefferson house for about three years until suffering a stroke in 2009. At that point, her medical condition precipitated a need for her to relocate into a nursing home. It was during the determination of the means by which Sangrey was to pay for her future nursing care that a dispute arose over the status of the title to the Jefferson house.

In her suit against Elizabeth and Tommy, Sangrey sought to impose the title to the Jefferson house and property with a constructive trust in her behalf. In support of that claim, Sangrey alleged that the parties had a mutual understanding whereby Elizabeth and Tommy would purchase the Jefferson house in their names and, upon payment of the purchase price by Sangrey, would transfer title to her. Elizabeth and Tommy answered Sangrey's allegations with a general denial, and raised the defenses of limitations, and laches, and the interposition of the statute of frauds.

It was undisputed that Sangrey paid the down payment on the home, paid the monthly mortgage installments, paid for improvements to the home, moved into the home, and paid off the mortgage, but the Grays refused to transfer title. In addition to Elizabeth's allegation that the down payment was a wedding gift to her and Tommy, she testified that Sangrey's subsequent act of satisfying the Jefferson mortgage was “[Sangrey's] decision.” Prior to the transaction, Elizabeth, a trained nurse, helped Sangrey when her medications were changed. Before the transaction, Elizabeth and Tommy consistently went to Sangrey's Gladewater home once every week or two where they made any needed home repairs, mowed and landscaped the yard, and performed any other home maintenance Sangrey needed. Elizabeth testified that no one in the family spent more time assisting Sangrey than she (Elizabeth) did. She also testified that after the transaction was completed, (1) she paid Sangrey's bills when Sangrey was “hospitalized several times,” (2) she had access to Sangrey's checkbook, (3) she cared for Sangrey at the Jefferson house after her hospitalizations due to a car accident, a knee replacement, a hip replacement and cataract surgery, (4) she spent time trying to obtain Veterans' Affairs benefits for Sangrey, and (5) she moved Sangrey into one nursing home facility. After first entering one nursing home facility, Elizabeth relocated her to another because she believed the second facility would provide better care. None of this background information was contested by Sangrey. Even so, little of this material found its way into the trial court's findings of fact. Fact-findings are not necessary when the matters in question are not disputed. Barker v. Eckman, 213 S.W.3d 306, 310 (Tex.2006). A trial court has no need to make findings concerning facts that are admitted. Villagomez v. Rockwood Specialties, Inc., 210 S.W.3d 720, 728 (Tex.App.-Corpus Christi 2006, pet. denied).

Also during the bench trial, the court admitted, over the Grays' hearsay objections, testimony from Sangrey's son and brother and from an attorney who had visited with Sangrey. These witnesses testified regarding the content of prior statements allegedly made by Sangrey concerning her agreement with Elizabeth and Tommy pertaining to the purchase of the Jefferson house. In the months preceding trial, Sangrey's mental status had deteriorated to the point that she was unavailable to testify at trial.

The trial court found that the down payment for the purchase of the Jefferson house was not a gift, that a confidential relationship existed between Sangrey and Elizabeth, that Elizabeth had breached her fiduciary duty, and that the Grays failed to prove the transaction between them and Sangrey was fair. Based on those fact findings, the trial court held that ownership of the Jefferson house was subject to a constructive trust in favor of Sangrey. After the trial court entered findings of fact and conclusions of law, the Grays appealed.

II. AnalysisA. Constructive Trust

A constructive trust is a legal fiction, a creation of equity to prevent a wrongdoer from profiting from her wrongful acts. Procom Energy, L.L.A. v. Roach, 16 S.W.3d 377, 381 (Tex.App.-Tyler 2000, pet. denied). Such trusts are remedial in character and have the broad function of redressing wrong or unjust enrichment in keeping with basic principles of equity and justice. Id.;see also Hubbard v. Shankle, 138 S.W.3d 474, 485 (Tex.App.-Fort Worth 2004, pet. denied). To obtain a constructive trust, the proponent must prove (1) the breach of a special trust, fiduciary relationship, or actual fraud, (2) unjust enrichment of the wrongdoer, and (3) tracing to an identifiable res. Troxel v. Bishop, 201 S.W.3d 290, 297 (Tex.App.-Dallas 2006, no pet.); Hubbard, 138 S.W.3d at 485. “ ‘A constructive trust is a relationship with respect to property, subjecting the person by whom the title to the property is held to an equitable duty to convey it to another, on the ground that [her] acquisition or retention of the property is wrongful and that [she] would be unjustly enriched if [she] were permitted to retain the property.’ ” Baker Botts, L.L.P. v. Cailloux, 224 S.W.3d 723, 736 (Tex.App.-San Antonio 2007, pet. denied) (quoting Talley v. Howsley, 142 Tex. 81, 176 S.W.2d 158, 160 (1943)). The Grays primarily challenge the trial court's finding of the existence of a confidential relationship, so we address that issue first.

1. Did the trial court err in finding a confidential relationship?

In their second and third points of error, the Grays argue that the trial court erred in finding that a confidential and fiduciary relationship existed between Elizabeth and Sangrey.

In evaluating the decisions made in this case, we are presented with two different considerations that may, at first blush, appear to be somewhat contradictory. On the one hand, the general rule is that the determination of the existence of a confidential fiduciary relationship is normally a question for the trier of fact. Hoggett v. Brown, 971 S.W.2d 472, 488 (Tex.App.-Houston [14th Dist.] 1997, pet. denied). On the other hand, although the confidential relationship issue generally rests on the establishment of certain facts, when the underlying facts are undisputed, “determination of the existence and breach of a fiduciary duty is a question of law that is exclusively within the province of the court.” Rice v. Metro. Life Ins. Co., 324 S.W.3d 660, 678 (Tex.App.-Fort Worth 2010, no pet.).

As our sister court in Amarillo has observed,

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