Heggy v. American Trading Emp. Retir. Acct.

• Decision Date: 11 December 2003
• Docket Number: No. 14-02-00768-CV.,14-02-00768-CV.
• Citation: 123 S.W.3d 770
• Parties: Jean HEGGY, Appellant, v. AMERICAN TRADING EMPLOYEE RETIREMENT ACCOUNT PLAN, Appellee.
• Court: Texas Court of Appeals

123 S.W.3d 770

Jean HEGGY, Appellant, v. AMERICAN TRADING EMPLOYEE RETIREMENT ACCOUNT PLAN, Appellee.

No. 14-02-00768-CV.

Court of Appeals of Texas, Houston (14th Dist.).

December 11, 2003.

Rehearing En Banc Overruled December 23, 2003.

Bridget Chapman, John F. Phillips, Houston, for appellant.

C. Henry Kollenberg, Carolyn Ann Russell, Houston, for appellee.

Panel consists of Justices YATES, HUDSON, and FROST.

SUBSTITUTE OPINION ON REHEARING

J. HARVEY HUDSON, Justice.

Jean Heggy appeals the trial court's denial, in part, of her motion for summary judgment and granting, in part, of summary judgment in favor of American Trading Employee Retirement Account Plan ("American"). American appeals the denial, in part, of its motion for summary judgment. Jean's motion for rehearing is overruled. This court's opinion issued on July 10, 2003, is withdrawn, and this opinion is substituted in its place. We affirm, in part, and reverse and remand, in part.

I. Background

This is the second time this case has been before this court. Robert Heggy, who was employed by American, designated his then current wife, Jean, as the beneficiary of his retirement account. On February 14, 1992, Robert retired from American. On July 26, 1994, Robert and Jean were divorced. In 1994, Robert started receiving monthly payments under his retirement plan in the amount of $1,360.86. On May 21, 1995, Robert married Catherine. On October 31, 1995, Robert died after receiving only 14 monthly payments. The total amount remaining in the retirement account at the time of Robert's death was $144,251.61. Although Robert had married Catherine, he never removed Jean as the designated beneficiary under the plan.

Both Jean, as designated beneficiary, and Catherine, as Robert's wife at the time of his death, claimed entitlement to the proceeds of the retirement account. On December 21, 1995, American filed an interpleader. Catherine filed a motion for summary judgment seeking all remaining account benefits. Jean, however, did not move for summary judgment. On July 31, 1997, the trial court granted Catherine's motion for summary judgment. On September 8, 1997, the trial court ordered American to deposit all of Robert's accumulated benefits into the registry of the court, directed the clerk to disburse those funds to Catherine, and ordered American to tender all future payments to Catherine. The trial court further awarded American attorney fees incurred in bringing the interpleader.

In accordance with the trial court's order, American started making monthly payments to Catherine. On June 17, 1999, the trial court dismissed all remaining causes of action, making the September 8, 1997 order a final judgment. Jean appealed the final judgment to this court, asking that the judgment entered in Catherine's favor be reversed. See Heggy v. American Trading Employee Retirement Account Plan, 56 S.W.3d 280 (Tex.App.-Houston [14th Dist.] 2001, no pet.) ("Heggy I"). Jean, however, did not supersede the judgment. Nor did she seek relief against American in her appeal.

While the appeal was pending in this court, Jean's attorney advised American that Jean had obtained an order from the 309th District Court that she is a 50% owner of Robert's American benefits. Jean's attorney further advised that if Jean were successful on appeal, she would look to American to pay the full amount of all the benefits to which she was entitled. American filed a motion for clarification with this court advising us of the 309th court's order and requesting "that if this Court believes [American] should do something other than continue to make payments, that it so clarify the order under appeal and make such orders as necessary to avoid double liability." The motion was carried with the case.

American then requested an order from the trial court directing it to make the remaining payments to the registry of the court pending appeal. On March 6, 2001, the trial court granted American's motion. Catherine received monthly payments in the amount of $1,360.86 from September 1997 through March 2001.

We reversed the summary judgment in favor of Catherine and held that under ERISA (Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 (1999 & Supp.2003)), Jean was entitled to receive all benefits remaining in Robert's account at the time of his death.¹ Heggy I, 56 S.W.3d at 286.² On remand to the trial court, Jean and American each moved for summary judgment. Jean sought from American all the benefits remaining in the retirement account at the time of Robert's death, including amounts already paid to Catherine, attorney fees, and interest. American moved for a summary judgment that it was not liable to Jean for payments it had already made to Catherine and further sought attorney fees for defending its status as an innocent stakeholder. The trial court granted, in part, and denied, in part, Jean's and American's respective motions for summary judgment. The trial court ordered that (1) Jean take nothing on her claim for benefits previously paid or disbursed to Catherine, (2) Jean recover all funds that American had deposited in the registry of the court, including accumulated interest, pursuant to the trial court's March 6, 2001 order, (3) American make all future payments into the registry of the court, and the clerk pay those funds to Jean, (4) Jean take nothing on her claims for attorney fees and interest, and (5) American take nothing on its claim for attorney fees.

II. Standard of Review

To prevail on a motion for summary judgment, a party must establish that no material fact issue exists and it is entitled to judgment as a matter of law. Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 222 (Tex.1999). In conducting this review, we take as true all evidence favorable to the nonmovant, and we make all reasonable inferences in the nonmovant's favor. KPMG Peat Marwick v. Harrison County Hous. Fin. Corp., 988 S.W.2d 746, 748 (Tex.1999). When both sides move for summary judgment and the trial court grants one motion and denies the other, the reviewing court should review all summary judgment evidence, determine all questions presented, and render the judgment the trial court should have rendered. Bradley v. State ex rel. White, 990 S.W.2d 245, 247 (Tex.1999).³

III. Interpleader

Jean argues American is not entitled to interpleader status because it failed to satisfy all the requirements of Rule 43 of the Texas Rules of Civil Procedure. Under Rule 43, a party who receives multiple claims to funds in its possession may join all claimants in one lawsuit and tender the disputed funds into the registry of the court. Tex.R. Civ. P. 43; Cable Communications Network, Inc. v. Aetna Cas. & Sur. Co., 838 S.W.2d 947, 950 (Tex.App.-Houston [14th Dist.] 1992, no pet.). A party faced with competing claims obtains a discharge of liability to the competing claimants by interpleading the funds. Petro Source Partners, Ltd. v. 3-B Rattlesnake Ref. (1990), Ltd., 905 S.W.2d 371, 375 (Tex. App.-El Paso 1995, writ denied). A party is entitled to interpleader relief if three elements are met: (1) it is either subject to, or has reasonable grounds to anticipate, rival claims to the same funds; (2) it has not unreasonably delayed filing its action for interpleader; and (3) it has unconditionally tendered the fund into the registry of the court. Olmos v. Pecan Grove Mun. Util. Dist., 857 S.W.2d 734, 741 (Tex.App.-Houston [14th Dist.]1993, no writ). Failure to satisfy any of these elements will defeat a petitioner's standing as an innocent stakeholder and preclude interpleader relief. Texas Workforce Comm'n v. Gill, 964 S.W.2d 308, 310 n. 3 (Tex.App.-Corpus Christi 1998, no pet.).

Jean does not challenge the first two elements. In challenging the third element, Jean argues American did not unconditionally tender the fund or property into the registry of the court. Jean complains that although American paid $21,118.81 into the registry of the court, those funds were not deposited until after the interlocutory summary judgment order had been signed—two years after the filing of the petition in interpleader, with American retaining the balance of the funds and controlling its disbursement.⁴

If the disputed funds are not actually paid into the registry of the court, they must be tendered and the tender must be unconditional in order to be valid. Bank One, Tex., N.A. v. Taylor, 970 F.2d 16, 25 (5th Cir.1992); Cockrum v. Cal-Zona Corp., 373 S.W.2d 572, 574 (Tex.Civ. App.-Dallas 1963, no writ). In its petition in interpleader, American stated that it "unconditionally offers and is ready to deposit with the court the remaining benefits of Robert Heggy totaling $144,251.61." Although American did not physically deposit the funds into the registry of the court, it tendered the funds into the court. Contrary to Jean's assertion, only an unconditional tender, not a deposit, is required. Security Nat'l Bank of Lubbock v. Washington Loan & Fin. Corp., 570 S.W.2d 40, 43 n. 4 (Tex.Civ.App.-Dallas 1978, writ dism'd). Therefore, American satisfied the unconditional tender requirement.

Jean argues American is not discharged from liability to her for benefits paid to Catherine. In support of this proposition, Jean relies on Gonzalez v. Texas Employers Ins. Ass'n, 509 S.W.2d 423 (Tex.Civ.App.-Dallas 1974, writ ref'd n.r.e.). In a suit involving claims for death benefits, the court of appeals in Gonzalez considered whether an interpleading stakeholder, who admits liability and offers to pay money into the court, but does not actually do so, is protected against further liability by payment of the money to one of the claimants under a judgment that has been reversed. Id. at 424. In Gonzalez, the insurance company filed an interpleader, asserting that it was willing to pay full death benefits but could not determine which of the conflicting claimants-the mother of the deceased employee or his common-law wife—should be...