Maeberry v. Gayle

• Citation: 955 S.W.2d 875
• Decision Date: 11 September 1997
• Docket Number: No. 13-96-052-CV,13-96-052-CV
• Parties: Joe Sidney MAEBERRY, Appellant, v. James Lee GAYLE, Appellee.
• Court: Texas Court of Appeals

Page 875

955 S.W.2d 875

Joe Sidney MAEBERRY, Appellant, v. James Lee GAYLE, Appellee.

No. 13-96-052-CV.

Court of Appeals of Texas,

Corpus Christi.

Sept. 11, 1997.

Gilberto Hinojosa, Magallanes, Sokat & Hinojosa, Brownsville, for Appellant.

Thomas Sullivan, Carinhas, Chosy & Sullivan, L.L.P., Brownsville, for Appellee.

Before the court en banc. ¹

OPINION

CHAVEZ, Justice.

Appellee James Lee Gayle won a judgment in a bench trial against appellant Joe Sidney Maeberry based on fraud and breach of fiduciary duty. Gayle was awarded actual damages of $33,800, exemplary damages of $45,000, and attorneys fees of $10,000, and Maeberry was granted a credit of $26,000 toward the judgment against him. We affirm Gayle's award based on fraud and the award of attorney's fees, reverse and render judgment that Gayle take nothing on his claim for breach of fiduciary duty, and remand to the trial court for further action on the issue of exemplary damages.

James Lee Gayle spent most of his childhood with his grandparents, since he never knew his father and saw his mother only rarely. Gayle's grandmother died when he was twelve or thirteen, and his grandfather, Willie Lee Wilson, died in January of 1980 when Gayle was fifteen years old. Wilson's will left his house and lot, furniture, two cars, and the proceeds of any insurance policies payable to his estate to Joe Sidney Maeberry as trustee, to be held for the benefit of Gayle until Gayle became eighteen years old. Maeberry, Gayle's uncle and closest remaining relative, was also appointed as Gayle's guardian.

Maeberry never transferred ownership of any of Wilson's property to Gayle, but rather assumed ownership himself. On May 18, 1983, approximately six months after Gayle's eighteenth birthday, Maeberry took Gayle to a lawyer's office where Gayle executed a deed transferring ownership of the house to Maeberry for consideration of $10. ² Maeberry testified that Gayle told him that he was glad to transfer the house to Maeberry because he was appreciative of how Maeberry had taken care of him. Gayle testified that Maeberry told him that he was signing legal papers related to the guardianship, not a sale of the house. Gayle testified that Maeberry never told him that he had been the beneficiary of Wilson's will, and that he only discovered that he was the beneficiary when he conducted his own inquiry in 1993.

Maeberry's first point of error in his appeal of the judgment against him alleges legally or factually insufficient evidence to support the court's finding that appellant breached his fiduciary duty "as the guardian of the estate of the appellee." The second point complains of legally or factually insufficient evidence to support the court's finding that the conveyance of the house from Gayle to Maeberry was accomplished by fraud and fraudulent misrepresentations, and the third point alleges legally and factually insufficient evidence to support recission of that conveyance. The fourth and fifth points allege legally and factually insufficient evidence to support the court's finding that the fair market rent of the house was $2400 per year, and legally and factually insufficient evidence for the court's subsequent award of $28,800 for fair rental value. The sixth point alleges legally and factually insufficient evidence to support the court's finding that appellant received and retained life insurance proceeds of $5000, which rightfully belonged to appellee. The seventh and eighth points of error challenge the legal and factual sufficiency of the evidence supporting the court's award of exemplary damages of $45,000 and attorney's fees of $10,000. The ninth point of error argues that the court erred by implicitly finding that appellee's cause of action was not barred by various limitations statutes.

When reviewing challenges to the legal sufficiency of the evidence, we consider only the evidence and inferences from the record that support the fact finder's determinations. Browning-Ferris, Inc. v. Reyna, 865 S.W.2d 925, 928 (Tex.1993); Cantu v. Butron, 921 S.W.2d 344, 348 (Tex.App.--Corpus Christi 1996, writ denied). We overrule such points if the findings are supported by more than a scintilla of evidence. See Browning-Ferris, 865 S.W.2d at 928, Cantu, 921 S.W.2d at 348. In contrast, factual sufficiency challenges require that we consider and balance all the evidence. Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex.1989); Cantu, 921 S.W.2d at 348. We overrule factual insufficiency points of error unless the evidence supporting a finding is so weak that the finding is against the great weight and preponderance of the evidence and clearly wrong and unjust. Ortiz v. Jones, 917 S.W.2d 770, 772 (Tex.1996).

Maeberry first argues that he could not have breached a fiduciary duty as guardian of Gayle's estate in the transfer of the house. ³ Maeberry argues that there was no longer a guardianship or trust relationship between them at the time of the conveyance because Gayle was over eighteen years old. We agree. Section 745 of the Texas Probate Code plainly states "the estate of the ward is settled and closed when: (1) a minor ward dies or becomes an adult by becoming eighteen years of a age, or by removal of disabilities of minority in accordance with the laws of this state." The dissent notes that this section does not state that the guardianship terminates without further action when the ward attains majority. However, if the effect of a statute is conditioned on some further action, one should expect the statute to indicate the further action necessary. As section 745 does not indicate any further action required for the termination of the guardianship, we hold that the estate of a ward terminates when a minor ward becomes an adult by becoming eighteen years of age.

This holding is consistent with our opinion in Home Indemnity Company v. Mosqueda, 464 S.W.2d 902 (Tex.Civ.App.--Corpus Christi), rev'd on other grounds, 473 S.W.2d 456 (Tex.1971). In that case, a life insurance company argued that it was unable to pay policy proceeds to the beneficiary because it was waiting for a guardian to be appointed for the beneficiary, but no guardian was ever named. We held that regardless of whether a guardian was appointed, payment should have been made directly to the beneficiary when he attained majority status, because "[a] guardianship of a minor terminates when the ward becomes an adult." Id. at 906. This statement was not qualified by any reference to a final account by the appointed guardian. Id.

It is true that the guardian has an ongoing duty to make a final account of the guardianship under section 749 of the Probate Code even after the ward attains majority status. Massie v. De Shields, 62 S.W.2d 322, 324 (Tex.Civ.App.--Dallas 1933, writ ref'd); Pure Oil Co. v. Clark, 37 S.W.2d 1088, 1090 (Tex.Civ.App.--Texarkana 1931, writ ref'd). Obviously the duty to account must continue past the date the ward attains majority status, since, by nature, a "final" account of a guardianship can not be made until after the guardianship ends. The failure of a guardian to make a final account does not mean that the guardian retains a fiduciary duty that continues indefinitely as the former ward progresses through adulthood. No other rights or duties of a guardian continue after the ward attains majority age. ⁴

The Probate Code also provides that "if a guardian charged with the duty of filing a final account or report fails or neglects so to do at the proper time, the court may, ... on the written complaint of the emancipated ward, ... cause the guardian to be cited to appear and present the account." (emphasis added). TEX. PROB.CODE ANN. § 750(a) (Vernon Supp.1997). The use of the phrase "emancipated ward" in the statute indicates that the guardianship relationship terminates at the proper time even without a final account. Only the duty to make an account continues; all other aspects of the guardianship end once the minor attains majority age.

We hold that because Gayle was over eighteen years of age at the time of the conveyance, Maeberry no longer had a fiduciary duty as Gayle's guardian. Similarly, Maeberry was no longer the trustee of Wilson's estate for the benefit of Gayle, since the instrument designing the trust specified that the trust would terminate when Gayle became eighteen. Since neither of these relationships was still in place at the time of the conveyance, no fiduciary duty existed based on Maeberry's status as either a trustee or guardian.

The court's finding of a breach of fiduciary duty was also referable to a finding challenged by appellant's sixth point of error, that "the Defendant, in his capacity as guardian of the estate of the Plaintiff, received life insurance proceeds in the sum of $5000.00 belonging to the Plaintiff and that the Defendant failed and did not account to the Plaintiff or the Probate Court for these life insurance proceeds." Maeberry testified that he never received the life insurance benefits and did not know what became of the money. Gayle countered by submitting into evidence Maeberry's application to serve as Gayle's guardian, wherein Maeberry indicated that $5000 in life insurance benefits were included in Gayle's estate. Gayle also testified that he was "pretty sure" his grandfather had a life insurance policy, because he remembered a man regularly coming to the house to pick up the premiums. However, after some confusion, Gayle acknowledged that he did not know how much money the policy was worth. Although the guardianship application is some evidence that Maeberry believed Gayle was entitled to $5000 in life insurance benefits, it is not evidence that Maeberry ever received any benefits. No copy of the insurance policy or any correspondence from the insurance company was offered into evidence, nor were any other records or other evidence introduced to indicate that Maeberry ever received $5000 on behalf of Gayle.

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