Court Opinion

ID: 25690
Source: CourtListenerOpinion
Date Created: 2010-04-25 08:42:10+00
Date Added: 2024-06-11T11:49:54.866152
License: Public Domain

UNITED STATES COURT OF APPEALS
                       FOR THE FIFTH CIRCUIT

                           No. 01-10574
                         Summary Calendar

                          JOAN TERRY IMAN

                                               Plaintiff-Appellant,

                              VERSUS

                         CAROLYN FOSTER TERRY,
                  Individually and as Independent
                      Executrix of the Estate of
                    I W Terry Jr Deceased; SUSAN
                     TERRY CONNOLLY; JAMES IRVIN
                      TERRY; MELINDA TERRY HINDS

                                              Defendants-Appellees.

           Appeal from the United States District Court
                for the Northern District of Texas
                         (No. 6:00-CV-9-C)

                         October 26, 2001

Before DeMOSS, PARKER, and DENNIS, Circuit Judges.

PER CURIAM:*

      Plaintiff-Appellant Joan T. Iman appeals the district

court’s grant of summary judgment on her claims for breach of

fiduciary duty and common law fraud.   We affirm.

  *
    Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.
                             BACKGROUND

     The essential facts are not in dispute.    I.W. Terry died

intestate in 1940, leaving a wife and two children, I.W. Jr. and

Joan.   At the time of their father’s death, I.W. Jr. was 14 and

Joan, 6.   Under Texas’s intestacy laws, one-half of Mr. Terry’s

estate passed to Mrs. Terry and I.W. Jr. and Joan each received a

one-fourth share.    Mrs. Terry was appointed administratrix of

the estate and served in that capacity until 1957, when the

estate was closed.    No guardianship proceedings were ever

instituted for the benefit of I.W. Jr. or Joan, and the

administration of their father’s estate was never challenged.

When the estate closed, I.W. Jr. was 31 and Joan, 24.    Mrs. Terry

died intestate in 1978, and no administration of her estate was

conducted.   I.W. Jr. died in 1996, leaving his property to his

wife and three children.

     Joan filed this suit in early 2000 against the beneficiaries

of I.W. Jr.’s estate (hereinafter “Defendants”).    She contends

that during the administration of her father’s estate, I.W. Jr.

“managed, controlled, and directed the disposition of assets of

the Estate, thereby usurping the duties, rights, and

responsibilities” of Mrs. Terry as administratrix.    Joan brought

claims for breach of fiduciary duty and common law fraud and

sought the imposition of a constructive trust against the assets

of I.W. Jr.’s estate.    She does not assert any wrongdoing by

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Defendants themselves.   Joan is now a resident of Oklahoma and

Defendants all reside in Texas.    The district court granted

Defendants’ motion for summary judgment, and Joan made a timely

appeal.

                            DISCUSSION

     Claims disposed of on summary judgment are reviewed de novo.

See Morris v. Covan World Wide Moving, Inc., 144 F.3d 377, 380

(5th Cir. 1998).   “Summary judgment is appropriate, when, viewing

the evidence in the light most favorable to the nonmoving party,

the record reflects that no genuine issue of any material fact

exists, and the moving party is entitled to judgment as a matter

of law.”   Urbano v. Continental Airlines, Inc., 138 F.3d 204, 205

(5th Cir. 1998) (citing Celotex Corp. v. Catrett, 477 U.S. 317,

322-24 (1986))

                                  I.

     As an initial matter, we note that this suit ought to be

time-barred.   Under Texas law, and unless there is some

suggestion that an aggrieved party was prevented from discovering

essential facts, no civil action may be brought later than five

years after the cause accrued.    See In the Matter of the Estate

of Rex. L. McGarr, 10 S.W.3d 373, 376 (Tex. App.--Corpus Christi

2000, pet. denied).   In her complaint, Joan argues that she was

prevented from discovering her brother’s alleged self-dealing

until a “routine investigation of various West Texas real

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property and probate records revealed inconsistences and

questions regarding I.W. Terry, Jr.’s conduct . . . .”   This

argument is likely self-defeating, however, for Texas courts have

held that “one is charged with constructive notice of the actual

knowledge that one could gain by an examination of the public

records.”    Id. (citing Mooney v. Harlin, 622 S.W.2d 83, 85 (Tex.

1981)).

     Whatever the merits of her rationale for bringing this suit

as late as she has, we note that nowhere in Defendants’ summary

judgment papers did they raise the statute of limitations.

Although Defendants did in their answer claim that Joan’s suit

was time-barred, we have not considered whether a defendant’s

having pled the statute of limitations would allow a court to

enter summary judgment on that basis.   At least one of our sister

circuits has considered this question and has determined that a

court does not err in entering judgment under such circumstances.

See Grand Rapids Plastics, Inc. v. Lakian, 188 F.3d 401, 406 (6th

Cir. 1999); cf. Kiser v. Johnson, 163 F.3d 326, 328 (5th Cir.

1999)(noting that a court cannot ordinarily raise an affirmative

defense sua sponte).   We need not resolve this question today,

however, for the case will come out the same no matter which way

we answer.   Accordingly, we express no opinion on the timeliness

of Joan’s lawsuit.

                                II.

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     Joan seeks the imposition of a constructive trust on her

brother’s estate for his alleged misconduct during administration

of their father’s estate.   A constructive trust lies where a

“‘person holding title to property would profit by a wrong or

would be unjustly enriched if he were permitted to keep the

property.’”    See In the Matter of Monnig’s Dept. Stores, Inc.,

929 F.2d 197, 201 (5th Cir. 1991)(quoting Omohundro v. Matthews,

161 Tex. 367, 341 S.W.2d 401, 405 (1960))(emphasis added).      Thus,

property held by one but belonging to another under Texas’s

intestacy provisions is appropriate for a constructive trust.      In

that circumstance, the possessor of the estate would serve as

trustee for the benefit of the decedent’s heirs.   Where the

administrator (or administratrix) of an intestate estate is also

its possessor, the administrator is charged with distributing the

decedent’s property to the heirs in accordance with Texas’s

intestacy provisions.   The administrator is a fiduciary to the

heirs.   As a fiduciary, the administrator must account for all

estate property and must show that it was distributed fairly.

See Texas Bank & Trust Co. v. A.E. Moore, 595 S.W.2d 502, 508-09

(Tex. 1980).   Absent a special legal relationship, like that

between an administrator and a beneficiary, a constructive trust

will not lie unless there is proof of fraud and tracing between

trust assets and the disputed property.    See Monnig’s Dept.

Stores, Inc., 929 F.2d at 201.

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     In this case, a trust effectively arose upon Mrs. Terry’s

being appointed administratrix of her husband’s estate, Mrs.

Terry being the constructive trustee and I.W. Jr. and Joan, the

beneficiaries.    Had there been any suggestion that Mrs. Terry

herself misapportioned the estate between the two children, then

as a fiduciary to Joan she could be called to account for her

actions.    But there is no such accusation.   Instead, Joan

contends that I.W. Jr. interfered with Mrs. Terry’s

responsibilities as administratrix.    Texas law does not provide

that a brother is his sister’s fiduciary under such

circumstances.    Absent a special legal relationship between I.W.

Jr. and Joan with respect to their father’s estate, Joan must

prove fraud and a nexus between trust assets and her brother’s

estate.    This she admittedly has not done, and she does not

suggest that with further discovery she can meet either

requirement.

                             CONCLUSION

     There being no genuine issue of material fact on one or more

elements in each of Joan’s bases for relief, we conclude that

summary judgment for the Defendants was proper.     Having

considered in full her argument for imposing a constructive

trust, we need not reach Joan’s argument that the district court

erred in not considering her response to Defendants’ motion for

summary judgment.

     AFFIRMED.

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