in the Estate of Raymond Edward Falls ( 2005 )

                             NUMBER 13-03-530-CV

                         COURT OF APPEALS

               THIRTEENTH DISTRICT OF TEXAS

                  CORPUS CHRISTI - EDINBURG

___________________________________________________________________

     IN THE ESTATE OF RAYMOND EDWARD FALLS, DECEASED

  

___________________________________________________________________

                 On appeal from the County Court at Law

                        of San Patricio County, Texas.

___________________ _______________________________________________

                     MEMORANDUM OPINION^[1]

       Before Chief Justice Valdez and Justices Hinojosa and Rodriguez

                      Memorandum Opinion by Justice Rodriguez

This is an appeal from a directed verdict granted in favor of appellee, A.G. Edwards & Sons, Inc.  The trial court granted appellee=s motion and rendered a directed verdict that (1) appellant, Peggy Falls, take nothing on her claim for the contested portion of her deceased husband=s IRA proceeds and (2) that the contested portion go to the deceased=s daughter, Edwina Mellon.  By her sole issue, appellant claims that appellee did not conclusively prove that Mellon was entitled to the contested portion of the deceased=s IRA account and that the trial court therefore should not have granted the directed verdict. We affirm the trial court=s ruling.

I.  Background

The deceased, Raymond Falls, opened an IRA account with appellee in 1989.  In 1994, he designated his three daughters as beneficiaries to receive equal thirds of the balance of the account upon his death. In 2000, however, Mr. Falls filled out a new beneficiary designation form.  Appellee asserts that the deceased filled out the new form in order to ensure that his daughters were the beneficiaries of the account.  On the new form, the blanks beside two of the deceased=s daughters= namesBAnita Vanderstucken and Sandra HollingerBdesignated 33 1/3 percent of the IRA account to them, while the blank beside the third daughter=s nameBEdwina MellonBonly designated 3 1/3 percent of the IRA account to her.  Appellee claims that the entry of 3 1/3 percent instead of 33 1/3 percent was a mutual mistake on the part of Mr. Falls and appellee, and that appellee did not know of the mutual mistake until after Mr. Falls=s death.  The beneficiary designation form stated that if the designator does not designate a beneficiary, the article concerning distribution to beneficiaries in the Custodial Account Agreement will govern the distribution and that beneficiaries will receive equal percentages unless otherwise noted.  The Custodial Account Agreement stated, AIf no designated beneficiary survives you, or if no beneficiary designation is in effect at your death, your IRA balance will pass to your surviving spouse, or if you have no surviving spouse, to your estate.@  Appellant argues that this language entitles her to the remaining 30 percent of the IRA.  After Mr. Falls=s death, appellant accordingly asserted a claim to 30 percent of Mr. Falls=s IRA account. The three daughters and appellee contested appellant=s claim.  At the close of appellant=s evidence at the trial, the trial court granted an directed verdict against appellant and in favor of appellee.^[2]  This appeal ensued.

II.  Claim for Contested Portion of Deceased=s IRA Account

By her sole issue, appellant challenges the trial court=s directed verdict precluding her recovery of 30 percent of the deceased=s IRA account. Appellant contends that the trial court erred because there was evidence of facts essential to appellant=s recovery and appellee did not conclusively prove that Mellon was entitled to 30 percent of the IRA claimed by appellant.  We disagree.

A directed verdict is proper when the evidence conclusively proves a fact that establishes a party=s right to judgment as a matter of law.  Koepke v. Martinez, 84 S.W.3d 393, 395 (Tex. App.CCorpus Christi 2002, pet. denied).  The trial court should direct a verdict when reasonable minds can draw only one conclusion from the evidence.  Vance v. My Apt. Steak House, Inc., 677 S.W.2d 480, 483 (Tex. 1984); Collora v. Navarro, 574 S.W.2d 65, 68 (Tex. 1978); Koepke, 84 S.W.3d at 396.

 In reviewing a directed verdict, the appellate court must determine whether there is any evidence of probative force to raise a fact issue on the material questions presented.  See Collora, 574 S.W.2d at 68; McDonald v. State, 936 S.W.2d 734, 736 (Tex. App.CWaco 1997, no writ) (citing Szczepanik v. First S. Trust Co., 883 S.W.2d 648, 649 (Tex. 1994)).  The court should consider all evidence in the light most favorable to the party against whom the verdict was instructed, discarding all contrary evidence and inferences.  See Collora, 574 S.W.2d at 68; McDonald, 936 S.W.2d at 737.  The court may, however, consider uncontradicted evidence favorable to the movant.  See Nichols v. Nichols, 727 S.W.2d 303, 306 (Tex. App.CBeaumont 1987, writ ref=d n.r.e.). Furthermore, when no evidence of probative force on an ultimate fact element exists, or when the probative force of testimony is so weak that only a mere surmise or suspicion is raised as to the existence of essential facts, a directed verdict is proper.  Kingston v. Helm, 82 S.W.3d 755, 758 (Tex. App.BCorpus Christi 2002, pet. denied); Villarreal v. Art Inst. of Houston, Inc., 20 S.W.3d 792, 796 (Tex. App.BCorpus Christi 2000, no pet.).

Similar to construing a contract, interpreting a beneficiary designation form requires a determination of the party=s intent.  See Goff v. Southmost Sav. & Loan Ass=n, 758 S.W.2d 822, 825 (Tex. App.CCorpus Christi 1988, writ denied) (providing Athe primary object of contract construction is to arrive at the intentions of the parties@); Oates v. Hodges, 713 S.W.2d 361, 364 (Tex. App.CDallas 1986, no writ) (setting out that intent of parties is controlling factor in interpreting an insurance contract).  In Texas, it is presumed that a testator intended to account for all his assets.  See McGill v. Johnson, 799 S.W.2d 673, 676 (Tex. 1990).  Furthermore, the decedent=s designation of an identifiable person raises the presumption that the named person was intended to receive those assets.  See Oates, 713 S.W.2d at 364.

Appellant contends the fact that no beneficiary designation to a named beneficiary was in effect for the remaining 30 percent of the IRA at the time of Mr. Falls=s death means that the 30 percent should pass to her in accordance with the language in the Custodial Account Agreement.  Appellant additionally argues that Mr. Falls intended her to receive the 30 percent because Mellon had failed to repay a loan to her father.  Appellant thus concludes that Mellon cannot recover more than the 3 1/3 percent designated to her on the beneficiary designation form.

Generally, a party cannot recover more than the terms of the contract allow him to recover. See generally Allen v. Manhattan Fire & Marine Ins. Co., 519 S.W.2d 706, 707 (Tex. App.CEl Paso 1975, no writ).  If a written contract fails to reflect a party=s original agreement due to a mutual mistake, however, the court may reform the contract to properly reflect the party=s true agreement.  See Cherokee Water Co. v. Forderhause, 741 S.W.2d 377, 379 (Tex. 1987); Goff, 758 S.W.2d at 826.  Reformation is available in circumstances in which the minds of the parties have met as to the terms of their agreement but, by mutual mistake, the writing commemorating the parties= agreement does not truly reflect their intentions.  See Henderson v. Henderson, 694 S.W.2d 31, 34 (Tex. App.CCorpus Christi 1985, writ ref=d n.r.e.).  To prove a mutual mistake, the evidence must show that the parties to an agreement (1) were acting under the same misunderstanding of the same material fact, and (2) had a common intention not reflected in the written contract.  See Okon v. Mbank, N.A., 706 S.W.2d 673, 675 (Tex. App.BDallas 1986, writ ref=d n.r.e.).  A mutual mistake is usually established by Aall of the facts and circumstances surrounding the parties and the execution of the instrument.@  See Henderson, 694 S.W.2d at 34.

In this case, the trial court did not err in rendering a directed verdict if the evidence establishes that the beneficiary designation form did not reflect the true agreement between appellee and Mr. Falls due to a mutual mistake.  See Thalman v. Martin, 635 S.W.2d 411, 413 (Tex. 1982).  Uncontradicted extrinsic evidence shows both Mr. Falls=s intent with respect to the disposition of his IRA account and A.G. Edwards= agreement with him in accord with that intent.  See Valero Energy Corp. v. Teco Pipeline Co., 2 S.W.3d 576, 589 (Tex. App.CHouston [14th Dist.] 1999, no pet.) (AParol evidence is admissible to show mutual mistake.@). Specifically, appellee presented the following testimony of John Hepner, Mr. Falls=s registered representative at A.G. Edwards for more than eleven years:

Q:        How emphatic was Mr. Falls about where he wanted his money to go? A little, a medium, or a lot?

A:        A lot.

Q:        Why do you say that?

A:        He called me and said he very, very, very definitelyCalmost with a sense of,Ba sense of urgency of  action of being sure that his daughters were the beneficiaries of this I.R.A.

Q:        In its entirety?

A:        He said nothing to the contrary. Absolutely.

* * * * *

Q:        When he [Mr. Falls] contacted you [Mr. Hepner], what did he want at                      that time?

A:        He wanted to be sure his daughters were the beneficiaries of the IRA.

Q:        Could you tell him the answer to that right then?

A:        No, I could not.

Q:        Then what did you do?

A:        Therefore, what I suggested that Mr. Falls do was come in, pick up a new I.R.A. beneficiary form whereby he could designate his daughters as the beneficiaries of the I.R.A.

Hepner had this conversation with Mr. Falls within approximately two weeks of Mr. Falls completing the form. His testimony negates any inference that Mr. Falls changed the 1994 beneficiary designation form to treat his daughters unequally; instead, the uncontradicted testimony establishes that Mr. Falls filled out a new beneficiary designation form because Hepner could not be sure that Mr. Falls=s daughters were in fact the beneficiaries of the IRA account.^[3]  

Hepner also testified that the new beneficiary designation form erroneously failed to reflect Mr. Falls=s true agreement with A.G. EdwardsCthat A.G. Edwards would distribute one-third of the assets in the account to each of Mr. Falls=s three daughters. The new form gave 3 1/3 percent to Mellon instead of the 33 1/3 percent that the form designated to her sisters. The form did not reflect the true agreement between Mr. Falls and A.G. Edwards, and, therefore, Mr. Falls=s true intent. Hepner did not know that the beneficiary designation form did not reflect Mr. Falls and A.G. Edwards=s intentions until appellant=s counsel informed him of the 3 1/3 percent designation months after Mr. Falls=s death. Moreover, this evidence was uncontradicted as Hepner was the only witness who testified about the mutual mistake. Appellant called no other witnesses and presented no other evidence on this issue.

Thus, in light of all the evidence in favor of appellant and all uncontradicted evidence in favor of appellee, we cannot reasonably infer, as appellant argues, that Mr. Falls intended to leave Mellon only 3 1/3 percent.  That inference is not permissible because direct, uncontradicted evidence shows that Mr. Falls intended for his daughters to receive equal portions of the assets and that he filled out a new form to ensure that they each received equal portions.  Similarly, no one knew about the error until after Mr. Falls=s death; therefore, it is also unreasonable to infer, as appellant argues, that Mr. Falls knew he designated 3 1/3 percent and that he intentionally chose not to correct the difference.  Finally, appellant=s suggested inference that Mr. Falls intentionally chose not to give Mellon an equal share of the IRA account due to her failure to pay back a loan is not supported by any evidence.  Therefore, we conclude that appellee met its burden of proving mutual mistake. Accordingly, appellee has established its right to judgment as a matter of law. 

III. Conclusion

The trial court did not err when it rendered a directed verdict in favor of appellee, precluding appellant=s recovery of 30 percent of the IRA account.  Appellant=s issue is overruled, and the trial court=s judgment is affirmed.

NELDA V. RODRIGUEZ

Justice

Memorandum Opinion delivered and

filed this 4th day of August, 2005.

---

^[1]See Tex. R. App. P. 47.2, 47.4.

^[2] We note that Mr. Falls=s daughters are not parties to this appeal.

^[3] Under Texas Rule of Evidence 701, a lay witness may offer opinion or inference testimony about another person=s state of mind based on the witness=s perception.  See Tex. R. Evid. 701; Ethicon, Inc. v. Martinez, 835 S.W.2d 826, 832 (Tex. App.CAustin 1992, writ denied); see also Tex. R. Evid. 602 (providing that a witness may not testify to matter unless "evidence is introduced sufficient to support a finding that he has personal knowledge of the matter").