Court Opinion

ID: 9677924
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:05:42.561669+00
Date Added: 2024-06-11T18:17:00.092038
License: Public Domain

OPINION ON REHEARING
In their motion for rehearing, National Convenience Stores, Inc. (NCS) raises several complaints, including a challenge to our holding that NCS was not entitled to summary judgment on the claim for a constructive trust. Although we find NCS’s complaints meritless, we supplement our original opinion to address NCS’s complaint regarding the constructive trust claim.
NCS argues there is not a sufficient basis for imposing a constructive trust because the property cannot be identified. NCS cites Sheldon Petroleum Co. v. Peirce, 546 S.W.2d 954 (Tex.Civ.App.— Dallas 1977, no writ) for this proposition. As proof that the property cannot be identified, NCS further claims it paid the proceeds, obtained as a result of the death of Ramon Tamez to his, estate. They further claim they are not in possession of the proceeds paid in connection with the death of Cheryl McCarty as these were returned to the insurance company.
NCS misreads our opinion. We did not hold that NCS held the proceeds in constructive trust. We merely held that, because NCS was not a proper beneficiary, NCS was not entitled to summary judgment on the constructive trust claim. Although NCS claims in the motion for rehearing that they paid the proceeds to the Tamez estate, their brief and their summary judgment proof stated that NCS used that $250,000 for both litigation expenses and settlement of certain claims brought by the Tamez estate. Because we found that NCS had no insurable interest and was not a proper beneficiary of the policy, it was improper for NCS to use the policy proceeds to pay their own litigation *23expenses and to settle claims. Therefore, we held that summary judgment in favor of NCS on the constructive trust claim was improper.
In Sheldon, the case cited by NCS, the plaintiff sought a constructive trust placed on certain funds she had given to a petroleum company for the “promotion and financing of Texas ‘oil deals’.” 546 S.W.2d at 958-59. The court first observed that, to impose a constructive trust, a plaintiff must show that retention of specific property by the defendant would constitute unjust enrichment. See id. at 958. The court explained, “[the plaintiff] must be able to show what property he is entitled to have.” See id. The court added that it is “inequitable to place the burden of tracing on the party asserting the trust where the constructive trustee has wrongfully commingled his own funds or property with funds or property against which a trust is asserted, especially where the proof necessary to separate the funds is peculiarly within the knowledge and possession of the trustee.” Id. In such a case, the trustee must establish which property is his or the entire fund is considered to be subject to the trust. See id. In Sheldon, the plaintiff could not show that the funds she sought had been commingled and, therefore, could not establish her cause of action. See id. at 959.
Regarding the Tamez funds, NCS admitted in the trial court that it had used the policy proceeds to pay certain debts, including litigation expenses and settlement with the Tamez family. The placement of the proceeds into an account from which NCS could pay its debts raises a fact issue regarding the constructive trust claim. As the Sheldon court stated, it would be inequitable to place the burden of tracing all of the proceeds on the Tamez family where the proof necessary to separate funds is peculiarly within the knowledge and possession of NCS. 546 S.W.2d at 958. Furthermore, we are not persuaded that a constructive trust is inappropriate as a matter of law based on NCS’ claim it has already spent the proceeds. Given our holding that NCS was not entitled to these proceeds, the proceeds were not NCS’s to spend, regardless of who NCS paid.
NCS also challenges our holding regarding the remedy of constructive trust in connection with the McCarty proceeds. Again, NCS misconstrues our opinion. We held that the trial court erred in granting summary judgment in favor of NCS on the ground of constructive trust. We did not hold that the McCarty estate was entitled to a constructive trust. The Eighth Amended Original Petition pled for constructive trust relief only on behalf of the Tamez estate for the Tamez proceeds. Thus, there was no claim of constructive trust for the McCarty proceeds and our holding on the constructive trust claim should not be construed to apply to the McCarty proceeds.
Accordingly, we overrule NCS’s motion for rehearing.