Texas Slayers Rule: May A Killer Receive Insurance Benefits? #2 (2003)

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© A. Hawkins 2003

The introduction and information about the process are in the text of Course #1 on this topic. This is Course #2, which continues where Course #1 left off.

Simon v. Dibble 380 S.W.2d 898 (Tex. Civ. App. - San Antonio 1964)

“This suit presents the question of whether or not an insane husband who shoots and kills his wife, may receive the proceeds of insurance policies taken out by her with him as beneficiary, and whether or not he may inherit her share of the community property. On November 12, 1962, Orlando V. Dibble, Jr., while insane, shot and killed his wife, Sabina Julia Dibble. She left two insurance policies in which he was the beneficiary, and the insurance companies have paid into court the proceeds of these policies with the request that the court determine who should receive them. Article 21.23 of the Insurance Code, reads as follows:

‘Art. 21.23. Forfeiture of Beneficiary’s Rights

‘The interest of a beneficiary in a life insurance policy or contract heretofore or hereafter issued shall be forfeited when the beneficiary is the principal or an accomplice in willfully bringing about the death of the insured. When such is the case, the nearest relative of the insured shall receive said insurance.’

“It is quite clear that under the provisions of this Article the husband who has willfully killed his wife cannot receive the proceeds of an insurance policy taken out by her with him as the beneficiary. However, a different situation is presented here. The husband is insane, and therefore not capable of willfully taking the life of his wife. Orlando V. Dibble, Jr., was tried for the murder of his wife, and was acquitted upon the ground that he was insane at the time he did so. Further, the parties here have stipulated that Dibble was insane at the time he killed his wife.

“We find no case in this State passing directly upon the question, but there are authorities from other jurisdictions which we feel should be controlling on this question.[1]

“Appellants cite the case of Roberts v. Hayes,[2] but that case is not in point and is distinguishable from the case at bar because there was a wrongful death, and there was an action for damages in tort. While an insane person may be held responsible in damages for a wrongful tort, this is quite different from denying an insane killer the right to inherit from his wife, whom he has killed while insane.[3]

“The husband was the sole beneficiary under the will of his wife, but had there been no will, he would have been the sole heir of her property, so it makes no difference here whether her estate passes under her will or by the law of descent it goes to her husband.

“The judgment of the trial court is affirmed.

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Hair v. Pennsylvania Life 533 S.W.2d 387 (Tex.Civ.App. - Beaumont 1975)

Insanity caused the ultimate bad hair day. Can an insanity judgment in a criminal case coexist with a violation of the Slayer’s Rule? What about the amnesia defense? Can an insurance company be required to pay the death benefit twice if they pay it to the slayer?

“W. O. Hair sued Pennsylvania Life Insurance Company, The Combined American Insurance Company, J. C. Penney Life Insurance Company, National Life and Accident Insurance Company, and Prudential Insurance Company of America, alleging a cause of action by virtue of Article 21.23 of the Insurance Code, for the death of his son, Rufus Hair, the insured, under the policies issued by the insurance companies above listed. The companies urged a motion for summary judgment, which was granted by the trial court and from which the father seeks this review. . . .

“Rufus Hair, the insured, was shot to death by his wife Jonell, the designated beneficiary under the policies. Tex.Ins.Code art. 21.23 provides:

'The interest of a beneficiary in a life insurance policy or contract heretofore or hereafter issued shall be forfeited when the beneficiary is the principal or an accomplice in willfully bringing about the death of the insured. When such is the case, the nearest relative of the insured shall receive said insurance.'

“In a criminal proceeding the District Court had previously determined that Jonell was insane at the time of the killing. This finding was admitted in the proceeding we review, and appellees argue this prevents Jonell from 'willfully bringing about' the death of her husband.

“The following statement by our Supreme Court clearly makes this prior finding of insanity not dispositive.

‘A prior adjudication of an issue in a criminal matter is not res judicata or estoppel by judgment to a subsequent civil action involving the same fact issue.’[4] [5]

“The finding made by the trial court in the criminal proceedings did not establish as a matter of law in the present case that Jonell Hair was not the principal or an accomplice in willfully bringing about the death of the insured.

“Appellees urge there is yet another ground on which the court's summary judgment may stand. Tex.Ins.Code art. 3.48 provides:

'Whenever any person shall procure the issuance of a policy of insurance on his or her life in any legal reserve life insurance company, and designate in writing filed with the company the beneficiary to receive the proceeds thereof, the company issuing such policy shall, in the absence of the receipt by it of notice of an adverse claim to the proceeds of the policy from one having a bona fide legal claim to such proceeds or a part thereof, pay such proceeds becoming due on the death of the insured to the person so designated as beneficiary, and such payment so made, in the absence of such notice received by the insurance company prior to the date of the payment of the proceeds, shall discharge the company from all liability under the policy.'

“To sustain this summary judgment on this ground it was incumbent on appellees to prove as a matter of law they had no notice of the father’s claim before they paid Jonell’s guardian.[6] This they failed to do.

“In oral argument appellees admitted they had knowledge of the killing and waited a year before paying Jonell's guardian until Judge Cain ruled on Jonell's sanity. Presumably, they knew from this that art. 21.23 of the Code might become a factor in determining who would be entitled to the proceeds of the policies. Unfortunately for them they relied on the criminal case finding of her insanity rather than depositing the money in court by way of interpleader.

“The affidavit of W. O. Hair in opposition to the summary judgment states, ‘Shortly after the death of my son, Rufus Hair, on March 23, 1973, I was interviewed by the representative of three (3) of the insurance companies who have been served in the lawsuit pending under cause No. 26,745. I informed each and every one of the representatives that I intended to contest the matter and that I was the next of kin of the deceased.’

“The trial judge’s dismissal of the criminal action--after motion by the District Attorney--was ‘for the following reason, to-wit: Due to the findings of Dr. J. A. Hunter, M.D., Director M.S.U., Rusk State Hospital, that Jonell Hair was not capable of willfully taking the life of her husband because of the fact that said Jonell Hair was insane at the time the offense with which she is charged was alleged to have been committed,’ etc.

“What Dr. Hunter concluded was ‘(b)ecause of a memory loss for events surrounding the alleged offense, it is my opinion that Mrs. Hair is unable to adequately communicate with her attorney at the present time in the preparation of a rational defense and is therefore incompetent to stand trial. It is my opinion further that Mrs. Hair is in need of continued hospitalization and treatment at the present time.’

“The affidavit of Grace Kuruc, claim approver for Prudential made in Passaic County, New Jersey, that ‘(a)t no time from July, 1973 to June 19, 1974 (when Prudential paid Jonell’s guardian) did Prudential Insurance Company of America receive notice of the possible adverse claim to said proceeds by W. O. Hair.’ It is not sufficient to establish as a matter of law that Prudential’s agents working this claim were all unaware of W. O. Hair’s claim.[7] The same is true of Ruth Citron’s affidavit (claim supervisor of Pennsylvania Life in Los Angeles, California). This is likewise the case in the affidavit of George B. Walker, Jr., J. C. Penney Life’s Manager Benefit Department.

“This summary judgment proof fails to establish as a matter of law that appellee insurance companies had no knowledge of W. O. Hair’s claim prior to paying the proceeds of the policies to Jonell's guardian. The order granting the summary judgment is reversed and the cause remanded for trial.

“Reversed and remanded.

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Slayers Rule attorney’s fees, contingent fees, and guardianship.

What about the children? Slayings don’t just affect the slayer and the slayed. The surviving children, and surviving parents and grandparents have their lives turned upside down. This is a guardianship appointment case that arises from Slayer’s Rules issues. It also explores a contingent fee for a lawyer who represents a minor who seeks to benefit from the disqualification of a slayer. The issues in this case should be considered by any lawyer who considers representing a minor in a Slayer’s Rule case, and by any person who hires a lawyer in a Slayer’s Rule case.

Dopps v. Dopps 636 S.W.2d 723 (Tex.App. - Corpus Christi 1982)

“This is an appeal from the appointment by the County Court of Cameron County of Bruce Dopps as guardian of the estates of his three grandchildren; Richard, Camille and Cari. The appellant is Jeri Collette Dopps, mother of the children. . . . We affirm.

“The tragic events which gave rise to this proceeding are as follows. Until February 27, 1980, Richard and Collette Dopps and their three children resided in the home they owned in Cameron County. That evening, Richard Dopps was killed. He died intestate. Approximately one week later, Collette Dopps was arrested for the murder of her husband. When she was released on bond, she brought the children to Houston to stay with an aunt and then returned to Cameron County to await her trial. By the end of March, Collette decided to send the children to live with her parents in South Dakota. The children have lived in South Dakota with their maternal grandparents, the Duncans (not parties to the instant suit), since that time.

“When Bruce Dopps heard of Collette’s involvement in his son’s death, he called an attorney to institute guardianship proceedings. On behalf of the children, he filed a wrongful death action against Collette in Cameron County and a petition with the County Court to be appointed temporary guardian of their estates. On April 24, 1980, the court granted his request. Collette Dopps filed a motion opposing the appointment on April 29, 1980. On May 13, 1980, the Duncans filed a motion in the Circuit Court of South Dakota for appointment as the guardians of the persons and estates of their daughter’s children, which that court granted.

“In October of 1980, Collette Dopps was convicted of voluntary manslaughter and sentenced to serve 20 years in prison. On May 5, 1981, the County Court of Cameron County held a hearing on Mr. Dopps’ application for permanent guardianship of the childrens’ estates in Texas and Collette’s motion to remove him as guardian.

“At the hearing, Mr. Dopps testified that he is 68 years-old and lives in Wichita, Kansas. He described his efforts to care for the estate including paying the bills and an attempt to sell assets and preparation of tax returns. Mr. Dopps stated that his purpose in seeking the guardianship was to preserve the property for the children. On cross-examination, Mr. Dopps admitted that he entered into a contingent fee arrangement with his attorney, which authorizes the attorney to retain one-third of any amount collected on behalf of the grandchildren in the wrongful death action and from his son’s life insurance proceeds. The policies name Collette as primary beneficiary and the children as contingent beneficiaries. Bruce Dopps explained that he anticipated difficulty in collecting the life insurance proceeds for the children because of the possibility of litigation. Mr. Dopps also testified that besides the half interest in the house in Cameron County, which the children will inherit from their father’s estate and the life insurance proceeds, the remaining assets in the childrens' estates are some stocks and social security benefits, which are now being paid to the Duncans for the support of the children. The record contains no evidence of any part of the children’s estates in a county in Texas other than Cameron County.

“Also testifying at the Probate Court hearing was Edwin Fleuriet, Mrs. Dopps’ attorney in this matter. He suggested the appointment of Bob Jordan, a friend of Collette’s as guardian, but the County Court entered an order appointing Mr. Dopps permanent guardian of the children’s estates.

“In her brief, in ‘no evidence’ and ‘insufficient evidence’ points of error, appellant first attacks the trial court’s finding that it had jurisdiction of the case. . . .

“Subject matter jurisdiction over probate matters including the appointment of guardians is vested in the County Court by Tex.Const.Art. V, § 16. Appellant does not dispute subject matter jurisdiction but apparently argues that the County Court of Cameron county lacks jurisdiction over the property involved here.

“In that regard, the appellant urges in her brief that this suit properly belongs in the South Dakota courts. We note, however, that jurisdiction attaches upon the filing of suit.[8] Once jurisdiction is lawfully and properly acquired, no subsequent fact or event may defeat it.[9] When through an exercise of discretion they deem it proper, Texas courts may recognize prior proceedings in other states as a matter of comity.[10] In this case the prior proceeding occurred in Texas, therefore, there was no need to consider deferring to the South Dakota court as a matter of comity.

“The appellant admits in her brief that the children have an interest in the house in Cameron County, because Tex.Prob.Code § 45 provides that children are entitled to half of the community property upon the death of one spouse. That interest vested in the children as the heirs at law of Richard Dopps by the law of descent and distribution.[11]

“If we were to accept appellant’s argument that the County Court of Cameron County lacked jurisdiction to appoint a guardian, there would be no court in Texas which could appoint a guardian to care for the childrens’ property within this state. This position is contrary to authority which holds that the state of Texas has the power to control the property of non-resident minors situated within its borders through guardians appointed for their estates.[12] Thus, the trial court had jurisdiction.

“The second and third points of error challenge the finding by the trial court that the appointment of the appellee as guardian was in the best interest of the children. Appellant points to Mr. Dopps’ execution of a contingent fee agreement authorizing his attorney to retain one-third of the life insurance proceeds collected as evidence that Mr. Dopps’ appointment was not in the best interests of the children. She brings to this court’s attention the filing of an interpleader by Prudential in Federal District Court in South Dakota admitting responsibility to pay the children and argues that there was no need to enter an agreement for recovery of this fund. Since the insurance company did not admit this liability until after the hearing on Mr. Dopps’ appointment as guardian, we do not consider it. We may only look at those facts presented to the County Court to determine whether that court erred.

“Tex.Prob.Code § 233, authorizes representatives of estates to enter contingent fee contracts to recover claims that they in good faith believe exist.[13] Tex.Ins.Code .Art. 21.23 provides that the interest of a beneficiary be forfeited when the beneficiary willfully brings about the death of the insured. The statute further provides that, in such cases, the nearest relative shall receive the insurance proceeds.[14] provides that beneficiaries of life insurance policies, who are convicted and sentenced in willfully bringing about the death of insureds, forfeit their interests in the insurance proceeds. In Bounds v. Caudle,[15] the Supreme Court considered the effect of a conviction of negligent homicide upon a beneficiary’s attempt to collect insurance. The surviving spouse argued that a conviction for negligent homicide implied that the killing was committed without intent and that the forfeiture statutes should not have applied. The Supreme Court held that the judgment in the criminal case was not binding upon the court in the civil proceeding.[16]

“In the case before us, there was no conviction of willful killing at the time Mr. Dopps entered the agreement with his attorney. At the time it would have been reasonable to anticipate a contest for the proceeds between Mrs. Dopps as primary beneficiary and the children as contingent beneficiaries and nearest relatives. As Bounds makes clear, the forfeiture rules are not automatic. The representative of the children’s estate may have found it necessary to bring a civil action to collect the insurance proceeds and in so doing would have been permitted to make a reasonable arrangement for the payment of attorney’s fees. Of course, by the date of the hearing on the guardianship appointment, Mrs. Dopps had been convicted of voluntary manslaughter and it was rather clear that the forfeiture provision would operate. Notwithstanding the reasonableness and good faith of the agreement when Mr. Dopps entered into it, if as an automatic result of making the appointment, the County Court had caused the childrens' estates to lose one-third of the insurance proceeds needlessly, its finding that the appointment is in the best interest of the children would be unsupported. But, before any attorney’s fees are actually paid, the guardian must obtain the approval of the court after producing proof that the fees were reasonable and were necessarily incurred.[17] Thus, the appointment of Mr. Dopps did not automatically cause the loss of one-third of the life insurance proceeds to the childrens’ estates. The trial court’s finding that the appointment of Mr. Dopps as guardian is in the best interest of the children is supported by some evidence and by sufficient evidence.

“The judgment of the trial court is affirmed.

The Conviction is Vacated. The Accused Slayer Is Innocent. So What?

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Mowbray v. Avery April 11, 2002 (Tex.App. - Corpus Christi 2002)

This is a tough case. Did the wife slay her husband? She was convicted, and acquitted. The prosecutor hid exculpatory evidence, resulting in the conviction. Many years later the conviction was thrown our and she was retried and acquitted.

Think about the human tradgedy. Think about being a widow who is falsely accused and convicted of murdering your husband. . . for the money. Think about the prosecutor hiding the evidence of your innocence while prosecuting you. Think about being a convict for a decade. Think about being retried by the prosecutor’s office. Think about how the widow feels about “criminal justice.”

That is just the criminal justice story.

What about the civil justice result? It couldn’t be worse, could it? Maybe.

What could be worse than a decade of being a convict? Perhaps a million dollar insurance policy payable to the widow, but kept from her by the slayer’s rule solely because of the criminal conviction. Did that happen? Yes. Since it was only based on the criminal conviction, when the conviction was set aside, you might think justice requires that the slayer’s rule prohibition on benefiting from the insurance would

The Texas slayer’s rule history is largely based on equitable concepts of doing the right thing, despite the Texas Constitution or law. If an accused slayer is innocent, what is the result? In a civil slayer’s rule case, a civil judgment of slaying may result even if the criminal court acquits. Of course, that requires evidence. In the Mowbray case, the slayer’s rule claim was based exclusively on the criminal conviction which was ultimately thrown out. There was no other evidence that the widow slayed her husband. What is equitable? Certainly the intended beneficiary should receive the insurance proceeds unless she is proven, in a civil slayer’s rule case, to have slayed in a manor that triggers the rule. Certainly the alternative beneficiary who gains a windfall if the slayer’s rule is applied would not be able to keep the money! Or, is it certain?

The Mowbray court does not focus on the equitable concepts. It looks at technical issues.

Perhaps the court suspects that the widow killed, but got off. Perhaps it thinks that the daughter is innocent, but the widow might be an evildoer. . Perhaps it is lost in the technicalities. Perhaps it reached the only lawful answer.

This court gives the money to the alternate beneficiary, not to the innocent widow.

Consider the claims of the widow. She asked for the proceeds from the alternate beneficiary. Is that the one and only possibility? Could she sue the insurance company? Might the insurance company be required to pay the widow, and either eat the loss or get their money back from the original payee? Did the first case protect them? Are you sure? Could the prosecutor be sued? Does prosecutorial immunity immunize a prosecutor from the loss of a convict because of the slayer’s rule if the conviction was based on prosecutorial fraud? Is hiding evidence within the prosecutor’s job description? Should the prosecutor be immune from liability in this case?

What do you think the result should be? Is there anything that the the widow could have done? What should the court do? Should the law be changed?

What do you think of the prosecutorial ethics? Do you think there was any consequence for the prosecutor? Should there be a consequence?

How do you feel about the daughter who insists on keeping the money?

Here are the dates:

1974 divorce from wife #1

1982 remarriage

1982 insurance with wife #2 as one beneficiary

1986 attempted change of life insurance beneficiary to wife #2

1987 death

1987 slayer’s rule civil suit filed by ex-wife and child of first marriage

1988 widow convicted of homicide

1990 conviction affirmed

1991 slayer’s rule judgment against widow

1996 habeas corpus granted because hidden evidence would have resulted in widow’s acquittal

1997 widow acquitted in criminal retrial

1999 widow sues to recover the insurance benefits

2000 trial court judgment against widow in slayer’s rule case

2002 court of appeals affirms

Appellant Fredda Sue Mowbray appeals the judgment of the trial court, dismissing her petition for the imposition of a constructive trust and for a bill of review of a summary judgment in a prior suit entered over six years earlier. In the prior proceeding, the trial court had granted a summary judgment finding, after her criminal conviction for killing her husband, William "Bill " Mowbray, that appellant was not entitled to the proceeds insuring Bill Mowbray's life. Appellant filed a petition for a bill of review of that decision after she was acquitted in a subsequent criminal trial after a writ of habeas corpus was granted that reversed her original conviction and ordered a new trial. Appellant asks us to review whether the trial court erred in: (1) sustaining special exceptions to her second amended petition for bill of review; (2) considering appellees' late supplement to the motion for summary judgment; (3) considering appellee's motion for summary judgment which was not supported by conclusive competent summary judgment evidence; (4) granting summary judgment on the ground of limitations; (5) granting summary judgment on the ground that there was no extrinsic fraud that prevented her from presenting a defense; and (6) granting summary judgment on the ground that she failed to exercise due diligence in filing a petition for bill of review. We affirm the judgment of the trial court.

THE PARTIES

Forty-three years old at the time of his death, Jay William Mowbray, Jr. ( "Bill Mowbray ") died of a gunshot wound to the right temple on September 16, 1987. Fredda Sue Mowbray, his second wife, was charged with, convicted of, and, after re-trial, acquitted of murder. Kristin Mowbray Avery ( "Avery ") is the daughter of the deceased. Virginia Hale is the ex-wife of the deceased and mother of Kristin Avery.(FN2)[18] Jeanne N. Mowbray is the mother of the deceased.

PROCEDURAL HISTORY

I. THE CRIMINAL CASE

On June 9, 1988, Fredda Sue Mowbray was convicted by a jury of the murder of Bill Mowbray in cause number 87-CR-1135-A in the 107th District Court of Cameron County, Texas.[19] On December 18, 1996, the court of criminal appeals granted her petition for writ of habeas corpus, finding that the record supported the trial court's findings that the State knew about, but failed to disclose, the blood splatter expert's report which supported the defense's theory and that such favorable evidence would have resulted in an acquittal, vacated the murder conviction, and ordered a new trial.[20] After a new trial in 1997, Mowbray was acquitted of the murder of her husband.

II. THE INSURANCE POLICIES

Central to the underlying dispute between the parties are life insurance proceeds which total $1,755,000 involving the following policies in effect at the time of Bill Mowbray's death.(FN3)[21]

A. The Pilot Life Policy and the Transamerica Life Policy

Pursuant to an agreement incident to the divorce of Bill Mowbray and Hale, proceeds from Pilot Life Insurance Policy number 824540 (or its substitute) in the amount of $130,000.00 were payable to Virginia Hale with Avery as the "third party beneficiary. "(FN4)[22] Before the decree was entered, on November 14, 1974, Bill Mowbray acquired Transamerica Life Insurance Policy number 5381535 in the amount of $130,000.00, which named Virginia Mowbray as the beneficiary of the policy. On or about July 30, 1986, Bill Mowbray attempted to change the beneficiary on the Transamerica Life Insurance Policy to Fredda Sue Mowbray.

B. The West Coast Life Policy

The next concept is remarkable, so we remark. The daughter claims that the widow did not sign the change that made the widow a beneficiary so the widow should not get the money? The widow is not complaining. Remarkable.

On November 18, 1982, Bill Mowbray purchased West Coast Life Policy number 654276 in the face amount of one million dollars. In the beneficiary provision, he listed the Small Business Administration ( "SBA ") and the Brownsville National Bank of Commerce to the extent of "loan balances. " He added Avery, identifying an amount of "$130,000.00 " and Fredda Sue Mowbray "to receive the remaining balance of the policy proceeds. " Later, Avery was listed as the first and primary beneficiary. Avery's subsequent lawsuit alleged that Bill Mowbray attempted to change the beneficiary of this policy to Fredda Sue Mowbray, subject to the interests of the SBA, a lender. The lawsuit alleged that Fredda Sue "never signed nor authorized her husband to sign her name to the change of beneficiary form; " rather, Bill Mowbray "forged her signature on the said change of beneficiary form, and she was not told of his actions and had no knowledge whatsoever of any such attempt to change the beneficiary. "(FN5)[23] Part of the proceeds of the policy were paid to the SBA and Mbank-Brownsville with the balance of the proceeds unpaid.

C. The Transamerica Policy No. 5878392

Jeanne Mowbray received the $50,000.00 proceeds of this policy.

D. The Gulf Atlantic Policy

The proceeds of policy number 195651 in the amount of $25,000.00 and number 196538 in the amount of $250,000.00 were paid to the SBA or to Mbank-Brownsville.

An aside. Ponder the payment of debts from the insurance proceeds. If the Will said that the estate shall pay the debts, what is the result? If the estate beneficiary differs from the insurance beneficiary, what is the result? Do you consider this when drafting Wills? Could any reasonable claim be made by the widow against the banks? Does the language of the Will or the loan documents have an effect?

III. THE FIRST LAWSUIT: KRISTIN AVERY ET AL V.

FREDDA SUE MOWBRAY ET AL

A. History

In 1987, appellees Kristin Avery and Virginia Hale, individually and as trustee, filed a lawsuit in the 107th District Court of Cameron County against appellant Fredda Sue Mowbray. The other defendants in the lawsuit were Transamerica Occidental Life Insurance Company, Gulf Atlantic Life Insurance Company, West Coast Life Insurance Company, R. Scott Mowbray, administrator with the will annexed under the estate of J. William Mowbray, Jr.,(FN6)[24] and Jeanne E. Mowbray "as an involuntary plaintiff. "(FN7)[25] At the time the lawsuit was filed, Avery was the seventeen-year-old survivor of Bill Mowbray.(FN8)[26]

The lawsuit, filed under cause number 11-97-5123-A, alleged that appellant had fatally shot her husband, Bill Mowbray, and argued that she should not receive the proceeds of his life insurance policies which designated her the beneficiary. The lawsuit was transferred to the 197th District Court in Cameron County, assigned the cause number 91-05-2140-C, and was ordered continued until after the disposition of Fredda Mowbray's criminal case. Appellant was convicted of the murder of Bill Mowbray. On May 7, 1991, the trial court entered a final summary judgment against appellant, ordering that the life insurance proceeds be paid to appellees. Appellee Avery did not receive all the insurance proceeds; rather, the money was put in the registry of the court and at various times amounts have been released by agreement of the parties.

B. Allegations

In the lawsuit, Avery and Hale alleged that the insurance companies were withholding the remaining insurance proceeds because of A controversy concerning the cause of death. " As to the Transamerica policy, Avery and Hale alleged that Avery had a vested equitable interest by virtue of the separation agreement and divorce decree. As to the West Coast policy, they alleged that because Bill Mowbray had forged Fredda Sue Mowbray's signature on the change of beneficiary form Avery remained entitled to $130,000.00 "perforce of the prior (effective) beneficiary designation, regardless of the circumstances under which Bill Mowbray died. " They further alleged that Fredda Sue Mowbray forfeited all interest in the proceeds under all policies by "willfully[27] bringing about the death of the insured. " Because Fredda Sue Mowbray was convicted of murder, Avery and Hale alleged that "this Court should take judicial notice and she is barred and collaterally estopped from claiming that his death was the result of anything other than intentional homicide. "

Avery sought five million dollars in damages from Fredda Sue Mowbray for the wrongful[28] and untimely[29] death of her father and exemplary damages in the same amount. From the administrator, Avery sought a constructive trust to hold all assets of the estate. The lawsuit requested that the trial court "declare the rights, status and legal relationship between the parties with respect to the insurance policies and estate[30] . . . in such a manner as will terminate the controversy. " The lawsuit also sought attorney's fees.

C. The Summary Judgment

On March 27, 1991, Avery and Hale filed a document containing four different motions: a motion for partial summary judgment; a motion for reasonable expenses; a motion for costs and attorney's fees; and a motion to sever.(FN9)[31] The motion for partial summary judgment sought judgment as a matter of law upon three grounds. The first ground sought judgment as a matter of law on the first, third and seventh count of the second amended petition(FN10)[32] because appellant had forfeited her rights under insurance code article 21.23.(FN11)[33] The second ground claimed contractual rights of plaintiff, Virginia Hale, to the proceeds of Transamerica policy number 5381525 (the subject of count 1 of the petition) based on the agreement incident to her divorce from Bill Mowbray. The final ground of the summary judgment noted that the $130,000 of the proceeds of the West Coast Life Insurance Company policy number 654276 were already awarded to plaintiffs in the second motion for summary judgment in the same case but asked the court to formally enter judgment of the same as no interlocutory judgment had yet been entered. In the prayer to the summary judgment motion, appellees asked the court to: 1) find that, because Fredda Sue Mowbray had been shown to have murdered her husband, she had forfeited her interests as beneficiary; 2) name Kristen V. Mowbray as the next of kin of the insured; and 3) order that the proceeds be entrusted to Virginia Hale as Trustee. Appellees also requested that the court enter such further declarations as might be just and right, terminating the controversy between the parties as to the life insurance policies in issue.

In her response to the motion, Fredda Sue Mowbray asserted that she was innocent of the murder of Bill Mowbray, that the court was not bound by the conviction in the criminal case, and that a trial should be held to determine to whom the insurance proceeds should be paid. She urged that it would be incongruous for the court to grant summary judgment on the insurance matters and allow the wrongful death cause of action to proceed on "precisely the same issues." She argued that her summary judgment evidence did "state affirmatively that she did not bring about the death of the insured which creates a genuine issue of material fact."

After a hearing on April 17, 1991, the trial court denied the motion for reasonable expenses and the motion for costs and attorney's fees. After a hearing on April 23, 1991, the 197th district court granted summary judgment in favor of Avery and Hale as to the first, second, and third counts of their petition, as amended.(FN12)[34] The trial court also granted the motion severing "these counts respecting insurance proceeds " "from the balance of the case " and ordering that "final judgment with respect to such insurance proceeds should be entered in favor of Avery and Hale. "(FN13)[35]

Dated May 7, 1991, the final summary judgment provided,

IT IS ORDERED, DECREED and DECLARED:

1. That because she is shown to have committed the Felony First Degree Murder of her husband, the insured [Bill Mowbray], by shooting him with a handgun, Fredda Sue Mowbray (also known as Fredda S. Mowbray) forfeited her interests as beneficiary under all life insurance policies or contracts insuring the life of the insured under Tex. Ins. Code Ann. art. 21.23.

2. That Kristin V. Mowbray, the only child of the insured . . . is the next of kin ( "nearest relative ") of the insured and, as such, is entitled to all of the rights, titles, benefits and interests in and to all life insurance policies or contracts, insuring the life of [Bill Mowbray] in which Fredda Sue Mowbray was named beneficiary (and no other person was named as contingent beneficiary) specifically including, without limitation, all proceeds of Transamerica Occidental Life Insurance Company life insurance Policies numbers 5381535, 5381046, 5390108 and 5879790, as well as West Coast Life Insurance Company life insurance Policy number 654276 at issue here.(FN14)[36]

3. That under an agreement of trust dated October 21, 1987, styled "KRISTIN VIRGINIA MOWBRAY FIRST TRUST AGREEMENT, " all of the rights, titles, benefits and interests in and to any and all such policies and contracts, including all proceeds thereof, with interest, presently held in the Registry of the Clerk of the Court are entrusted to Virginia Hale as Trustee for Kristin V. Mowbray, and should be paid over and delivered to her in that capacity in accordance with the terms and provisions of such TRUST AGREEMENT, subject to any fees incurred by the Clerk of Court in handling such deposited funds.

4. That such rights, titles, interests and ownerships as are recited in the three preceding declarations apply with equal force to all funds heretofore disbursed and distributed pursuant to earlier agreements or motions of the parties, specifically those ordered disbursed under prior Orders of this Court signed on January 13, 1989, May 22, 1989, May 12, 1989, and August 6, 1990.(FN15)[37]

On June 5, 1991, Fredda Sue Mowbray filed a Motion for New Trial seeking to set aside the final summary judgment, urging that "fact questions remain as to whether [she] brought about the death of Bill Mowbray. "(FN16)[38] No appeal was filed in this action.

THE SECOND LAWSUIT - THE PETITION FOR BILL OF REVIEW: FREDDA SUE MOWBRAY v. KRISTIN (MOWBRAY) AVERY, ET AL.

On June 14, 1999, Mowbray filed her original petition for bill of review in cause number 99-06-2653-C, suing Kristin Avery and Virginia Hale, individually and as trustee for Kristin Mowbray, as plaintiffs in the prior cause number 91-05-2140-C in which the court entered judgment in 1991.

The court of appeals wanders into a lengthy discussion of special exception and summary judgment procedure, which is omitted from this course.

. . .

B. Unjust Enrichment/Constructive Trust

Appellant argues that the trial court improperly sustained special exceptions as to her unjust enrichment and constructive trust claims. She also complains that the trial court should not have dismissed these causes of action without allowing her an opportunity to amend. However, her Second Amended petition does not attempt to raise constructive trust and unjust enrichment as two separate causes of action. Instead it simply asks the trial court to impose a constructive trust and notes that "[a] constructive trust is imposed if a person holding the title to property would be unjustly enriched if he were allowed to retain it. " Aside from the caption of the paragraph, this is the only reference to unjust enrichment. We do not read this as raising a cause of action for unjust enrichment.

Moreover, unjust enrichment is not a distinct independent cause of action but simply a theory of recovery.[39] It can be applied where there is a failure to make restitution of benefits received under circumstances which give rise to an implied or quasi-contractual obligation to repay, that is, where a benefit was wrongfully secured or passively received which would be unconscionable for the receiving party to retain.[40] The unjust enrichment doctrine applies the principles of restitution to disputes where there is no actual contract,[41] and is based on the equitable principle that one who receives benefits which would be unjust for him to retain ought to make restitution.[42]

A party may recover under an unjust enrichment theory where a person has obtained a benefit from another due to fraud, duress or taking of undue advantage,[43] yet recovery under a theory of unjust enrichment is not dependent on wrongdoing by the opposing party.[44] However, to recover under such theory, the profit must be actually unjust under the principles of equity.[45] Unjust enrichment is not a proper remedy "merely because it might appear expedient or generally fair that some recompense be afforded for an unfortunate loss to the claimant, or because the benefits to the person sought to be charged amount to a windfall."[46]

While “unjust enrichment" is not per se a cause of action, an action for restitution, or seeking the imposition of a constructive trust, may lie on the legal theory of unjust enrichment.[47] ;(FN25)[48] [49] Appellant's petition clearly seeks to bring an action for the imposition of a constructive trust based on the legal theory of unjust enrichment.

We consider then that the true question before us is whether the trial court erred in sustaining special exceptions on, and ultimately dismissing, appellant's claim for a constructive trust based on the theory of unjust enrichment, without allowing appellant an opportunity to amend her petition relative to this claim. There is no dispute that appellant was afforded no opportunity to amend as to this particular claim. The grounds that were asserted in the motion for special exceptions as to the constructive trust claim were that under the facts pled, there were no grounds on which to impose a constructive trust because: 1) as a matter of law the plaintiff could not assert unjust enrichment or a constructive trust because the judgment had to be enforced unless valid grounds were alleged for a bill of review; and 2) as a matter of law obtaining property under a judgment is not unjust enrichment and a judicial award is not fraud, duress or undue advantage.(FN26) These are claims which if true, would render such alleged pleading defects not subject to being cured by amendment and hence dismissal would be proper.[50] Thus if the trial court was correct in granting such exceptions, it did not err in dismissing as to that claim without allowing an opportunity to amend.[51] However, if a claim for the imposition of a constructive trust could be recognized by law under the facts and circumstances of this particular case, then there would have been no basis for the granting of special exceptio