MBNA America Bank, N.A. v. Robert W. Safley

IN THE

TENTH COURT OF APPEALS

No. 10-04-00317-CV

MBNA America Bank, N.A.,

                                                                      Appellant

 v.

Robert W. Safley,

                                                                      Appellee

From the County Court at Law No. 1

McLennan County, Texas

Trial Court # 2004-0421-CV1

MEMORANDUM Opinion

The parties have filed a “Joint Motion to Set Aside Trial Court’s Judgment” under Rule of Appellate Procedure 42.1(a)(2)(B).  See Tex. R. App. P. 42.1(a)(2)(B).  Accordingly, the judgment is set aside without regard to the merits and this case is remanded to the trial court for entry of a judgment in accordance with the parties’ settlement agreement.

PER CURIAM

Before Chief Justice Gray,

Justice Vance, and

Justice Reyna

Judgment set aside and remanded

Opinion delivered and filed March 2, 2005

[CV06]

992 will.

STANDARD OF REVIEW

      Appellate review of a trial court's act in a matter entrusted to its discretion is governed by whether the court abused that discretion. Strackbein v. Prewitt, 671 S.W.2d 37, 38 (Tex. 1984); United Beef Producers, Inc. v. Lookingbill, 532 S.W.2d 958, 959 (Tex. 1976). An appellate judge cannot substitute his discretion for that of the trial judge. Jones v. Strayhorn, 159 Tex. 421, 321 S.W.2d 290, 295 (1959). Stated somewhat differently, a court of appeals may not reverse for abuse of discretion merely because it disagrees with a decision by the trial court, if that decision was within the trial court's discretionary authority. Beaumont Bank, N.A. v. Buller, 806 S.W.2d 223, 226 (Tex. 1991). The determination of whether a court abused its discretion is a question of law. Jackson v. Van Winkle, 660 S.W.2d 807, 810 (Tex. 1983).

      A court abuses its discretion if it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law. Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex. 1992) (orig. proceeding). Thus, with respect to the resolution of factual issues or matters committed to the trial court's discretion, the reviewing court may not substitute its judgment for that of the trial court. Id. The complaining party must establish that the trial court could reasonably have reached only one decision. Id. at 840. Even if the reviewing court would have decided the issue differently, it cannot disturb the trial court's decision unless it is shown to be arbitrary and unreasonable. Id. However, review of a trial court's determination of the legal principles controlling its ruling is much less deferential. Id. A trial court has no "discretion" in determining what the law is or in applying the law to the facts. Id. Thus, a clear failure by the trial court to analyze or apply the law correctly will constitute an abuse of discretion. Id.

LEGAL PRINCIPLES

      The making of contractual wills is governed by section 59A of the Probate Code, which states:

(a) A contract to make a will or devise or not to revoke a will or devise, if executed or entered into on or after September 1, 1979, can be established only by provisions of a will stating that a contract does exist and stating the material provisions of the contract.

(b) The execution of a joint will or reciprocal wills does not by itself suffice as evidence of the existence of a contract.

Tex. Prob. Code Ann. § 59A (Vernon 1980).

      Making a contractual will does not take away the right of either party to revoke it. Magids v. American Title Ins. Co., 473 S.W.2d 460, 464 (Tex. 1971); see also Freeman v. Freeman, 569 S.W.2d 626, 628 (Tex. Civ. App.—Eastland 1978, no writ). Contracts of this nature are reviewed by the courts with caution. Magids, 473 S.W.2d at 464. They can be established only by full and satisfactory proof. Id. No presumptions or inferences will be indulged. Id.

      The imposition of a constructive trust is an equitable remedy. Bocanegra v. Aetna Life Ins. Co., 605 S.W.2d 848, 851 (Tex. 1980); Omohundro v. Matthews, 161 Tex. 367, 341 S.W.2d 401, 408 (1960); Smith v. Bolin, 153 Tex. 486, 271 S.W.2d 93, 97 (1954). Generally, a court has discretion in deciding whether to grant an equitable remedy. Estate of Pollack, 858 S.W.2d 388, 390 (Tex. 1993); Cliff v. Huggins, 724 S.W.2d 778, 779 (Tex. 1987). We recognize that the court's discretion is not unbridled, but should be exercised with reference to guiding rules and principles. Estate of Pollock, 858 S.W.2d at 390.

      A decision based on equitable principles involves asking, "Which decision is more equitable?" English v. Jones, 154 Tex. 132, 274 S.W.2d 666, 669 (1955). The party seeking equitable relief must bring the case within the rule that the relief sought will not operate inequitably to the opposing party. Kress v. Soules, 152 Tex. 595, 261 S.W.2d 703, 704 (1953).

APPLICATION OF STANDARD OF REVIEW

      This is not a case in which one of the parties to a contractual will has died and the other party, having received benefits under the contractual will, sought to change it. See, e.g., Kirk v. Beard, 162 Tex. 144, 345 S.W.2d 267 (1961). Here, Cyril changed his will in anticipation of divorce. The question is whether the property passing under the 1992 will must be subjected to a constructive trust to carry out the contract established in the 1986 will.

      We turn to the method of appellate review of abuse-of-discretion claims set forth by Justice Powers in Landon v. Jean-Paul Budinger, Inc., 724 S.W.2d 931, 934-41 (Tex. App.—Austin 1987, no writ). First we ask, was the determination complained of on appeal a matter committed by law to the trial court's discretion? See id. at 937-38. As we have seen, the imposition of a constructive trust to enforce a contractual will is an equitable remedy, and the question of whether to grant an equitable remedy lies within the discretion of the trial judge. See Estate of Pollack, 858 S.W.2d at 390; Bocanegra, 605 S.W.2d at 851.

      Second, did the trial court, in making the determination complained of on appeal, recognize and purport to act in an exercise of the discretion committed to it by law? See Landon, 724 S.W.2d at 938. The record shows that the court considered arguments from the parties about whether a constructive trust—an equitable remedy lying within the court's discretion—should be imposed on the property passing under the 1992 will.

      Third, does the appellate record reveal sufficient facts upon which the trial court could act rationally in an exercise of its discretion. See id. Yes, the record is fully developed with the wills, the divorce pleadings, the stipulations of the parties, the findings of fact and conclusions of law, and the trial briefs and arguments. We find that the court had a sufficient factual basis upon which to balance the equities between the parties in making a rational decision concerning the imposition of a constructive trust.

      Fourth, did the court erroneously exercise the discretion committed to it by law? See id. at 939. The range of choices permitted by law was to impose a constructive trust or not to impose a constructive trust. As we have shown, authority exists to support the proposition that a party seeking equitable relief must show that the relief sought will not operate inequitably to the opposing party. See Kress, 261 S.W.2d at 704. We believe that the court could have determined that placing Cyril's estate in Dorothy's hands at this time—given the fact that the contractual will treated all property as community property whereas both Cyril and Dorothy were alleging ownership of separate property in their divorce pleadings—would result in an inequity to Cyril's children. Thus, the court's decision was not unreasonable in the factual-legal context in which it was made. See Landon, 724 S.W.2d at 939.

      Because we do not find that the trial court committed legal error in reaching its decision, we do not reach the final inquiry, i.e., whether the error is of such a magnitude as to require reversal. See id. at 941.

      The facts of this case are unique, and our holding is limited to them. Weighing heavily in our decision is the stipulation of the parties and the court's finding that, but for Cyril's untimely death, he and Dorothy would have pursued the divorce action to its logical conclusion—a dissolution of their marriage. In such event, the Probate Code would have voided all bequests made by Cyril to Dorothy. See Tex. Prob. Code Ann. § 69. It is thus undisputed that the legitimate ends of the marriage relationship had, as of the time of Cyril's death, been destroyed. The court's consideration of the divorce as an accomplished fact follows the equitable maxim "equity will treat as done that which by agreement is to be done." See Hicks v. Morris, 57 Tex. 658, 662 (1882); see also Heritage Housing Corp. v. Ferguson, 674 S.W.2d 363, 365-66 (Tex. App.—Dallas 1984, writ ref'd n.r.e.) (citing Johnson v. Downing and Wooten Const. Co., 480 S.W.2d 254, 258 (Tex. Civ. App.—Houston [14th Dist.] 1972, no writ) for the maxim "equity looks upon things agreed to be done as actually performed").

CONCLUSION

      Having determined that the trial judge did not abuse his discretion in refusing to impose a constructive trust, we overrule point one. We do not reach point two because our analysis does not depend upon whether Dorothy knew that Cyril had made the 1992 will. We affirm the judgment.

                                                                                 BILL VANCE

                                                                                 Justice

Before Chief Justice Thomas,

          Justice Cummings, and

          Justice Vance

Affirmed

Opinion delivered and filed April 20, 1994

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