in the Estate of Robert Earl Skinner ( 2013 )

Reversed and Remanded and Opinion filed October 15, 2013.
In The
Fourteenth Court of Appeals
NO. 14-13-00082-CV
IN THE ESTATE OF ROBERT EARL SKINNER
On Appeal from the County Court at Law No. 3 and Probate Court
Brazoria County, Texas
Trial Court Cause No. PR033639
OPINION
Appellant Lillie Doris Skinner appeals from the trial court’s order granting
in part and denying in part an application for injunctive relief and request for a
constructive trust, which ordered Lillie to deposit two checks into the registry of
the court. Lillie contends the trial court erred in granting a temporary injunction.
Because appellee Robin Sidney contends on appeal that the trial court did not issue
a temporary injunction but rather ―enforced a constructive trust,‖ this court asked
the parties to file letter briefs addressing our jurisdiction over this appeal.
We hold that we have jurisdiction over this interlocutory appeal from a
temporary injunction and that the trial court’s order is void. Thus, we reverse the
trial court’s order and remand for further proceedings.
BACKGROUND
Sidney filed an application for administration and heirship, alleging that the
decedent Robert Earl Skinner died intestate. Later, Sidney filed an ―application for
injunctive relief and request for constructive trust,‖ alleging that Lillie was the ex-
wife of Robert and that Lillie had received life insurance proceeds as a beneficiary
in violation of Section 9.301 of the Texas Family Code. See Tex. Fam. Code Ann.
§ 9.301(a) (stating that a provision in a life insurance policy designating a former
spouse as a beneficiary generally is not effective, and listing exceptions). Sidney
attached a decree of divorce indicating that Robert and Lillie had divorced before
Robert’s death. Sidney requested the following relief:
1. A Temporary Restraining Order be issued without notice to
Defendant restraining Defendant, her agents, servants, and
employees from directly or indirectly withdrawing, writing checks
on, debiting, transferring, spending, assigning, loaning, pledging,
hiding, or in any way depriving the Skinner Estate of the accounts
of Robert Earl Skinner at Texas Dow Employees Credit Union,
Dow life benefits or MetLife benefits.
2. LILLIE DORIS SKINNER be ordered to deposit all funds from
any source from the accounts of the decedent ROBERT EARL
SKINNER with JOYCE HUDMAN, payable to the Registry of the
Court.
3. Defendant be cited to appear and that the temporary injunction
hearing be set and after hearing the Application for Temporary
Injunction be issued enjoining Defendant, her agents, servants and
2
employees from directly or indirectly violating the Court’s
injunction.1
The trial court held a hearing on Sidney’s application, noting that it had
previously signed a temporary restraining order in Sidney’s favor.2 Lillie testified
at the hearing that she possessed at her residence in Lake Jackson two checks: one
from MetLife for $422,000 and one from Dow for $16,000. Lillie testified that the
MetLife check was from a life insurance policy.3 Lillie also testified that after
Robert’s death, she withdrew $10,000 from a Dow Employees Credit Union
account that was in Robert’s name, and she was a beneficiary on that account.
At the hearing, counsel for Sidney confirmed, ―[T]his is a temporary
injunction. . . . But I still think, as we are here only on a temporary injunction
hearing, we have to have some sort of final evidentiary hearing.‖ Counsel
confirmed again, ―[T]his is an injunction hearing. . . . Judge, an injunction—if a
party is doing that which they have no legal right to do, that is grounds for an
injunction. . . . [A]n injunction is appropriate to secure this property, under the
injunction or under a constructive trust.‖
The court ruled from the bench that it was granting in part and denying in
part the ―application for injunctive relief and request for constructive trust.‖ The
court ordered Lillie to deposit the two checks into the registry of the court. When
counsel for Sidney asked the court for an injunction prohibiting Lillie from
accessing the Dow Employees Credit Union account, the court explained, ―No, sir,
1
Sidney also requested ―costs of suit‖ and ―such other further relief to which she may
show herself to be justly entitled.‖
2
The temporary restraining order does not appear in the record.
3
She did not testify that the Dow check was from a life insurance policy.
3
that was the part denied.‖4
The court signed a written ―order granting in part and denying in part the
application for injunctive relief and request for constructive trust.‖ The court ruled
as follows:
IT IS THEREFORE ORDERED that said Application is
granted in part and denied in part.
IT IS ORDERED that Lillie Doris Skinner shall deposit with
the Court the MetLife check for $420,380.77 and the DOW check for
$16,677.88 into the Registry of the Court to be placed into an interest
bearing account by February 1, 2013, 5:00 pm.
All other relief not expressly granted is DENIED.
Lillie filed a notice of interlocutory appeal. See Tex. Civ. Prac. & Rem. Code Ann.
§ 51.014(a)(4) (allowing for the appeal from an interlocutory order granting or
refusing a temporary injunction).
JURISDICTION
Lillie contends the trial court abused its discretion by granting a temporary
injunction, and Sidney contends the trial court ―did not issue a temporary
injunction‖ but rather ―effectively enforced a constructive trust.‖ We asked the
parties to address the issue of whether this court has jurisdiction. We hold that
under the circumstances of this case, the trial court granted a temporary injunction,
and thus, we have jurisdiction over this appeal.
―[I]t is the character and function of an order that determine its
classification‖ as one granting a temporary injunction. Del Valle Indep. Sch. Dist.
v. Lopez, 845 S.W.2d 808, 809 (Tex. 1992). ―To reject the order’s status as a
4
Section 9.301 of the Family Code addresses only life insurance benefits, not bank or
credit union accounts.
4
temporary injunction based on a deficiency in form is to deny review of any
defects that may render the order void.‖ Id. at 809–10. Thus, although an order
may lack features of a typical temporary injunction, those deficiencies do not
control the classification. Qwest Commc’ns Corp. v. AT & T Corp., 24 S.W.3d
334, 336 (2000) (holding that the trial court’s order granted a temporary injunction
even though it was for a fixed duration of three years; the order did not set a bond
or trial date; and the trial court did not order the issuance of a writ of injunction);
see also Markel v. World Flight, Inc., 938 S.W.2d 74, 78 (Tex. App.—San Antonio
1996, no writ) (appellate jurisdiction is not defeated ―merely by the label [the trial
court] attaches to the interlocutory order‖).
―An injunction is a remedial writ that depends on the issuing court’s equity
jurisdiction.‖ Qwest, 24 S.W.3d at 336. ―The purpose of a temporary injunction is
to preserve the status quo pending a trial on the merits.‖ RP&R, Inc. v. Territo, 32
S.W.3d 396, 400 (Tex. App.—Houston [14th Dist.] 2000, no pet.). ―One function
of injunctive relief is to restrain motion and to enforce inaction.‖ Qwest, 24
S.W.3d at 336. An injunction that fulfills this function is called a prohibitive
injunction. RP&R, 32 S.W.3d at 400. A mandatory injunction, in contrast, orders
a party to engage in particular conduct. See id. at 400–01 (holding that a
temporary injunction was mandatory because it required a party to pay weekly
paychecks to the other party); see also Del Valle, 845 S.W.2d at 809 (holding that
the trial court’s order adopting and implementing an election plan provided
mandatory injunctive relief and was a temporary injunction); cf. Swanson v. Cmty.
State Bank, 12 S.W.3d 163, 165–66 (Tex. App.—Houston [1st Dist.] 2000, no pet.)
(holding that the trial court’s order was not an injunction because although it
ordered one party to liquidate stock, the movant had ―requested the trial court’s
permission to liquidate‖ the stock, and the movant ―did not ask for relief directing
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the defendants to do or refrain from doing anything‖).
Like an injunction, a constructive trust is an equitable remedy; it is used to
prevent unjust enrichment. See, e.g., Swinehart v. Stubbeman, McRae, Sealy,
Laughlin & Browder, Inc., 48 S.W.3d 865, 878 (Tex. App.—Houston [14th Dist.]
2001, pet. denied). A constructive trust is imposed when ―the person holding the
title to property would profit by a wrong or would be unjustly enriched if he were
permitted to keep the property.‖ Newman v. Link, 866 S.W.2d 721, 725 (Tex.
App.—Houston [14th Dist.] 1993) (quotation omitted), writ denied, 889 S.W.2d
288 (Tex. 1994). As such, imposition of a constructive trust ―may be based on a
fiduciary or confidential relationship or when there has been actual fraud.‖
Swinehart, 48 S.W.3d at 878; see also Sherer v. Sherer, 393 S.W.3d 480, 491 (Tex.
App.—Texarkana 2013, pet. denied) (―An underlying cause of action such as a
breach of fiduciary duty, conversion, or unjust enrichment is required. The
constructive trust is merely a remedy used to grant relief on the underlying cause
of action.‖). The American Law Institute notes in the Restatement of Restitution
that a constructive trust has two remedial components: ―The first of these is a
declaration that B’s legal title to X is subject to A’s superior equitable claim. The
second is a mandatory injunction directing B to surrender X to A or to take
equivalent steps.‖ Restatement (Third) of Restitution and Unjust Enrichment § 55
cmt. b (2011).
Sidney cites in her appellate brief four cases that discuss constructive trusts,
but none is instructive for determining whether the trial court’s order in this case
should be considered a temporary injunction; in fact, in all of those cases a
constructive trust was deemed inappropriate.5 Given that a constructive trust is an
5
See Talley v. Howsley, 142 Tex. 81, 176 S.W.2d 158 (1943) (holding that the trial court
correctly rendered a take-nothing judgment and declined to impose a constructive trust because
6
equitable remedy that incorporates a mandatory injunction, classifying the trial
court’s order as one creating a constructive trust would not make the order any less
of an injunction.
Further, Sidney expressly sought an injunction in her application and at the
evidentiary hearing, and the trial court’s order granted in part and denied in part
Sidney’s application for injunctive relief. The trial court ordered Lillie to do
something she contested—give up possession of several negotiable instruments,
which she claims are rightfully hers. Sidney’s counsel confirmed at the hearing
that the ―purpose of an injunction‖ was to ―trap or sequester‖ the property
―pending resolution of these legal arguments‖—to preserve the status quo pending
a trial on the merits. Thus, the character and function of the trial court’s order was
to provide Sidney with temporary, mandatory injunctive relief. See In re Radiant
Darkstar Prods., LLC, No. 05-13-00586-CV, 2013 WL 3718065, at *2 (Tex.
App.—Dallas July 12, 2013, orig. proceeding) (concluding the relator was entitled
to mandamus relief from an order directing funds to be deposited into the court’s
registry; although there was no motion for temporary injunction, ―requiring relator
to deposit money into the court’s registry is a form of mandatory injunction‖);
Pilot Eng’g Co. v. Robinson, 470 S.W.2d 311, 312 (Tex. Civ. App.—Waco 1971,
no writ) (holding that the order directing defendants to deposit cashier’s checks
into the registry of the court was ―a temporary mandatory injunction and
appealable‖).
there was no evidence of fraud by the defendant); Baker Botts, L.L.P. v. Cailloux, 224 S.W.3d
723 (Tex. App.—San Antonio 2007, pet. denied) (holding that the trial court abused its
discretion in imposing a constructive trust after a jury trial and final judgment because none of
the defendants had legal title to any of the property); Troxel v. Bishop, 201 S.W.3d 290 (Tex.
App.—Dallas 2006, no pet.) (holding that the trial court did not err by granting summary
judgment on the plaintiff’s request for a constructive trust); Hubbard v. Shankle, 138 S.W.3d 474
(Tex. App.—Fort Worth 2004, pet. denied) (holding that the trial court correctly granted a no-
evidence summary judgment for the defendant based on the plaintiff’s request for a constructive
trust because there was no breach of fiduciary duty or fraud).
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We recognize that some courts have stated categorically that a trial court’s
order directing a party to deposit funds into the registry of the court is not an
injunction subject to an interlocutory appeal. See Structured Capital Res. Corp. v.
Arctic Cold Storage, LLC, 237 S.W.3d 890, 894 (Tex. App.—Tyler 2007, no pet.)
(in dicta, citing Faddoul, Glasheen & Valles, P.C. v. Oaxaca, 52 S.W.3d 209, 212
(Tex. App.—El Paso 2001, no pet.)). These courts derive their reasoning from
Alpha Petroleum Co. v. Dunn, which explained that the order requiring the deposit
of cash money into the court’s registry was not an injunction primarily because the
order ―in no respect complie[d] with the provisions of the statute in granting and
issuing a temporary injunction.‖ 60 S.W.2d 469, 471 (Tex. Civ. App.—Galveston
1933, writ dism’d). The Texas Supreme Court, however, decried such reasoning in
Del Valle and Qwest, discussed above. Moreover, the Alpha Petroleum reasoning
would result in the denial of review of any defects that may render a temporary
injunction order void. See Qwest, 24 S.W.3d at 336; Del Valle, 845 S.W.2d at
809–10.
We note further that this court has reviewed similar trial court orders by
direct interlocutory appeal and by writ of mandamus. Compare Greathouse Ins.
Agency, Inc. v. Tropical Invs., Inc., 718 S.W.2d 821, 822 (Tex. App.—Houston
[14th Dist.] 1986, no writ) (reversing, on interlocutory appeal, the trial court’s
temporary injunction ordering the defendant to deposit life insurance proceeds into
the court’s registry), with N. Cypress Med. Ctr. Operating Co. v. St. Laurent, 296
S.W.3d 171, 178–79 (Tex. App.—Houston [14th Dist.] 2009, no pet.) (writ of
mandamus would issue to vacate the trial court’s order directing the defendant to
deposit partnership distributions into the court’s registry). In one unpublished
case, this court held that it lacked appellate jurisdiction over an order requiring the
deposit of funds into the court’s registry. See Lovall v. Yen, No. 14-01-01108-CV,
8
2002 WL 58925, at *1 (Tex. App.—Houston [14th Dist.] Jan. 17, 2002, no pet.)
(mem. op., not designated for publication). Lovall is not merely without
precedential value; it is also distinguishable. See Tex. R. App. P. 47.7(b). The
trial court’s order in Lovall granted the defendant’s motion for continuance and
then noted that the defendant ―agreed to pay‖ a sum into the court’s registry.
Lovall, 2002 WL 58925, at *1. Here, however, the trial court entered the order
after an opposing party’s request for an injunction; after a hearing on the request
for an injunction; and stating that the court was granting the injunction in part and
ordering the opposing party to deposit negotiable instruments into the court’s
registry. Cf. Swanson, 12 S.W.3d at 165. These authorities reveal that this court
has not adopted a categorical approach, and we do not do so today.
Under the circumstances of this case, the trial court’s order was an
appealable order granting a temporary injunction.
TEMPORARY INJUNCTION
Among other things, Lillie contends the trial court’s order is void because it
does not set the case for trial on the merits or set a bond. We agree. The
injunction is void and dissolved. See, e.g., Qwest, 24 S.W.3d at 337 (failures to set
the case for trial and fix an amount of security, in violation of Rules 683 and 684
of the Texas Rules of Civil Procedure, could ―render the trial court’s order void but
they do not change the order’s character and function defining its classification‖ as
a temporary injunction).
We reverse the trial court’s order and remand for further proceedings.
/s/ Sharon McCally
Justice
Panel consists of Justices Christopher, McCally, and Busby.
9