Kent v. Holmes

• Citation: 139 S.W.3d 120
• Decision Date: 30 June 2004
• Docket Number: No. 06-03-00071-CV.,06-03-00071-CV.
• Parties: Alan Brad KENT, Individually and as Independent Executor of The Estate of Linda Ann McWhorter, Deceased, and Cassie Elizabeth Kent, Appellant v. Tommy Joe HOLMES, Appellee.
• Court: Court of Appeals of Texas

139 S.W.3d 120

Alan Brad KENT, Individually and as Independent Executor of The Estate of Linda Ann McWhorter, Deceased, and Cassie Elizabeth Kent, Appellant v. Tommy Joe HOLMES, Appellee.

No. 06-03-00071-CV.

Court of Appeals of Texas, Texarkana.

Submitted May 12, 2004.

Decided June 30, 2004.

Appeal from the County Court at Law, Panola County, Terry Bailey, J Steven M. Dowd, Law Offices of Steven M. Dowd, Austin, TX, for appellant.

Raymond C. Winter, Assistant Attorney General, Law Enforcement Defense Division, Austin, TX, for Teacher Retirement System of Texas-Amicus Curiae.

Robert Underwood, Carthage, TX, for appellee.

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

OPINION

Opinion by Justice CARTER.

The dispute in this case concerns the distribution of a retirement annuity from the Teacher Retirement System of Texas (TRS) accumulated by Linda Ann Holmes McWhorter. After McWhorter retired from her teaching career, she and her husband, Tommy Joe Holmes, obtained a divorce. The divorce decree granted McWhorter sole right to the retirement benefits and divested Holmes of any right to the benefits. TRS refused to recognize the divorce decree as a court order which changed the beneficiary of the annuity and determined the form on which McWhorter attempted to change beneficiaries did not suffice. McWhorter died before TRS approved a beneficiary change. On McWhorter's death, TRS began making annuity payments to Holmes. Alan Brad Kent, individually and as independent executor of the estate of Linda Ann McWhorter, deceased, and Cassie Elizabeth Kent (collectively "the Kents") appeal from a partial summary judgment in Holmes' favor. The Kents raise nine issues on appeal. We affirm in part, reverse in part, and remand for a trial on the merits consistent with this opinion.

Facts

On May 31, 1997, McWhorter retired after a lifetime of public service of educating the school children of the State of Texas. At the time of her retirement, McWhorter had designated Holmes as beneficiary of her TRS optional annuity benefit.

On June 25, 1998, McWhorter provided TRS with a designation of beneficiary on TRS Form 11 which appointed Alan Brad Kent and Cassie Elizabeth Kent as joint beneficiaries for "any payments which may be due under the Teacher Retirement System... following my death...." On August 3, 1998, TRS sent McWhorter a letter stating that, under Section 824.1012 of the Texas Government Code, her husband could not be removed as beneficiary unless either he consented or a court ordered the change. On May 26, 1999, a hearing was held in the County Court at Law of Panola County, Texas, concerning the divorce of McWhorter and Holmes. On July 12, 1999, the trial court entered a decree of divorce. On September 3, 1999, a nunc pro tunc decree of divorce concerning the marriage was entered. The decree stated in pertinent part as follows:

RESPONDENT, LINDA ANN HOLMES, is awarded the following as her sole and separate property, and Petitioner is hereby divested of all right, title, interest, and claim in and to such property:....

Any and all sums, whether matured or unmatured, accrued or unaccrued, vested or otherwise, together with all increases thereof, the proceeds therefrom, and any other rights related to Respondent's retirement benefits through the Teacher Retirement System, and any other profit-sharing plan, retirement plan, pension plan, employee stock option plan, employee savings plan, accrued unpaid bonuses, or other benefit program existing by reason of Respondent's past or present employment.

Additionally, the decree states in pertinent part as follows:

Execution of Documents. IT IS ORDERED AND DECREED that Petitioner, TOMMY JOE HOLMES, and Respondent, LINDA ANN HOLMES, shall execute all instruments necessary to effect this decree and that Petitioner and Respondent shall have all appropriate and necessary writs, execution and process, as many and as often as is necessary to accomplish the execution and final disposition of this judgment.

On February 24, 2000, McWhorter's attorney provided TRS with a certified copy of the nunc pro tunc divorce decree. On July 24, 2000, TRS responded to McWhorter's attorney and acknowledged receipt of the divorce decree. However, TRS stated that the decree did not order a change in the beneficiary and suggested language to be included in a modification of the decree. The TRS letter stated that a "court order alone does not change the designation of beneficiary" and that McWhorter would also have to submit a designation of beneficiary on Form 30C. On June 22, 2000, McWhorter executed a last will and testament leaving the residue of her estate to her son.

On January 5, 2002, McWhorter died in Tyler, Texas, at the age of fifty-eight. The Kents received a $10,000.00 lump sum payment pursuant to the Form 11 designation. Beginning in February of 2000, Holmes began receiving annuity payments for the option five annuity.

On October 17, 2002, the Kents filed a petition for enforcement of the divorce decree requesting damages, a constructive trust, and an injunction. Holmes filed an answer, a plea to the jurisdiction, and a counterclaim for a declaratory judgment and attorney's fees. On January 8, 2003, Holmes filed a motion for partial summary judgment alleging that there was no breach of the divorce decree, there was no evidence that the beneficiary had been changed, the annuity could not be assigned, the statute of limitations barred the suit, and the suit exceeded Section 9.007 of the Texas Family Code since it went beyond clarifying and enforcing the divorce decree. See TEX. FAM.CODE ANN. § 9.007 (Vernon 1998). On April 29, 2003, the trial court granted Holmes' motion for partial summary judgment, which disposed of all of the Kents' claims. In the order granting the partial summary judgment, the trial court stated that the summary judgment was based on the Kents' failure to present "proof of compliance with applicable statutes governing Teacher Retirement System and Teacher Retirement System's rules and regulation[s]." Holmes' counterclaim was severed, making the judgment final.

Standard of Review

When reviewing a summary judgment, we take as true all evidence favorable to the nonmovant and indulge every reasonable inference and resolve any doubts in the nonmovant's favor. Limestone Prods. Distribution, Inc. v. McNamara, 71 S.W.3d 308, 311 (Tex.2002); Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex.1999).

Summary judgment is proper when the movant establishes that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law. TEX.R. CIV. P. 166a(c); City of Houston v. Clear Creek Basin Auth., 589 S.W.2d 671, 676 (Tex.1979); Baubles & Beads v. Louis Vuitton, S.A., 766 S.W.2d 377, 379 (Tex.App.-Texarkana 1989, no writ). The question on appeal is not whether the summary judgment proof raises a fact issue with reference to the essential elements of the movant's cause of action, but whether the summary judgment proof establishes that the movant is entitled to summary judgment as a matter of law. Gonzalez v. Mission Am. Ins. Co., 795 S.W.2d 734, 736 (Tex.1990). Because the movant bears the burden of proof, all conflicts in the evidence are disregarded, evidence favorable to the nonmovant is taken as true, and all doubts as to the genuine issues of material fact are resolved in favor of the nonmovant. Nixon v. Mr. Prop. Mgmt. Co., 690 S.W.2d 546, 548-49 (Tex.1985).

Summary

The Kents' suit rests on two separate theories: 1) that McWhorter changed the beneficiary of the annuity and 2) that Holmes was divested of McWhorter's retirement in the divorce. We affirm the trial court's summary judgment concerning the holding that McWhorter did not change the beneficiary. However, the failure to change the beneficiary does not alter the fact that Holmes was divested of all right, title, and interest to such property and the proceeds therefrom by the divorce judgment. Since the divorce decree divested Holmes of all rights and interests to McWhorter's retirement, any acceptance of payments violates the divorce decree unless McWhorter's intent after the divorce was for Holmes to be the beneficiary. Although Holmes is the designated beneficiary, the divorce decree granted McWhorter both the ownership and beneficiary interest in the annuity payments. Thus, a constructive trust should attach to funds paid from TRS to Holmes unless it is shown that McWhorter intended, after the divorce, to give the annuity to Holmes. A fact issue exists concerning whether McWhorter intended that Holmes receive the annuity. We also determine that the statute of limitations does not bar suit and that any error concerning the lack of authentication of the exhibits was not preserved for review. Last, we consider the points of error concerning the remedies sought by the Kents. The change of ownership and beneficiary interests in the divorce was not an assignment controlled by the nonassignability clause applicable to the retirement funds. The Kents have asserted that equity demands that the contract with TRS be reformed to reflect that the Kents are now the beneficiaries. However, reformation of contract is not an available remedy in the absence of inequitable conduct on the part of TRS. Because a fact issue exists, we reverse and remand the judgment.

Designation of Beneficiary

In their first, sixth, eighth, and ninth points of error, the Kents allege that TRS's construction of the statute is erroneous. The Kents argue that McWhorter's designation of her son and daughter-in-law as joint beneficiaries on TRS Form 11 is a clear intention of a change in beneficiary sufficient to change the beneficiary under the governing statute. In the alternative, the Kents contend the form indicates a clear intent to remove Holmes as a beneficiary. The Kents argue that the submitted TRS Form 11 at the very least creates a fact issue as to the intention to change the beneficiary.

On June...