In re Rushing

644 S.W.3d 383

In the MATTER OF the ESTATE OF Donnie M. RUSHING, Deceased

NO. 12-21-00083-CV

Court of Appeals of Texas, Tyler.

Opinion delivered April 14, 2022

Amy Boudreaux, for Appellant.

Courtney A. Harris, Daingerfield, for Appellee.

Panel consisted of Worthen, C.J., Hoyle, J., and Neeley, J.

OPINION

Brian Hoyle, Justice

Jodie Velin appeals the trial court's order imposing a constructive trust against her for the proceeds of her deceased ex-husband's Veterans’ Group Life Insurance (VGLI) policy naming her as the beneficiary. Velin raises three issues on appeal. We vacate the order for want of jurisdiction, render judgment dismissing in part, and remand in part.

BACKGROUND

Bradley Rushing is the administrator of the estate of Donnie M. Rushing, Velin's deceased ex-husband. After initiating probate proceedings in the Upshur County Court, Rushing learned that Velin was named the beneficiary of the deceased's VGLI policy with $200,000 in benefits payable to her. VGLI policies are governed by federal law, namely the Servicemembers’ Group Life Insurance Act (SGLIA).¹ Rushing also learned that Velin generally disclaimed any interest in decedent's life insurance policies in their May 2002 divorce decree granted by the 76th/276th Judicial District Court in Titus County, Texas.²

Rushing filed a "Motion to Enforce Court Order for Property and Create Constructive Trust" against Velin in the Upshur County Court as part of the probate proceeding. In his motion, Rushing sought to enforce the waiver provision of the divorce decree between Velin and the decedent and impose a constructive trust over the VGLI death benefit. Rushing alleged in the motion that the decedent believed Velin had been removed as the beneficiary of the VGLI policy, but that Prudential Life Insurance paid at least $55,000 under the policy to her. Rushing did not assert a claim against Prudential for wrongful payment, but instead requested a contempt finding and constructive trust against Velin for wrongfully accepting the proceeds of the policy. Velin, who was not a party to the probate proceeding, objected to being directed into court by way of the motion instead of being sued, and she alleged that she was deprived of her right to remove the matter to federal court. Nevertheless, she complied with the show cause order and opposed the motion.

After a hearing, the trial court granted Rushing's motion, found that it had jurisdiction under its pendent and ancillary jurisdiction, and imposed a constructive trust against Velin, requiring that she pay the full $200,000 in proceeds from the VGLI policy into the court's registry.³ Alternatively, the court authorized Velin to execute a release with Prudential designating that all unreceived payments be directly paid by it into the court's registry as a lump sum. This appeal followed.

JURISDICTION

As part of Velin's third issue, she contends that the Upshur County Court lacked subject matter jurisdiction.

Standard of Review

Subject matter jurisdiction is essential to the authority of a court to decide a case. Tex. Ass'n of Bus. v. Tex. Air Control Bd. , 852 S.W.2d 440, 443 (Tex. 1993). Subject matter jurisdiction is never presumed and cannot be waived. Id. at 443–44. Subject matter jurisdiction is an issue that may be raised for the first time on appeal. Id. at 445. Because subject matter jurisdiction is a question of law, we review it de novo. Tex. Dep't of Parks & Wildlife v. Miranda , 133 S.W.3d 217, 226 (Tex. 2004).

We review the plaintiff's pleadings to determine whether he "affirmatively demonstrate[d] the court's jurisdiction to hear the cause." Tex. Ass'n of Bus. , 852 S.W.2d at 446 ; see Ward v. Malone , 115 S.W.3d 267, 269 (Tex. App.—Corpus Christi 2003, pet. denied) ("It is incumbent upon the pleading party to allege sufficient facts to affirmatively show that the trial court has subject matter jurisdiction."). We construe the pleadings in favor of the plaintiff and look to the pleader's intent. Miranda , 133 S.W.3d at 226 ; Tex. Ass'n of Bus. , 852 S.W.2d at 446. Regarding a plaintiff's responsibility to plead an amount-in-controversy that falls within a court's prescribed jurisdictional limits, it is presumed a trial court has jurisdiction "unless lack of jurisdiction affirmatively appears on the face of the petition." Peek v. Equip. Serv. Co. of San Antonio , 779 S.W.2d 802, 804 (Tex. 1989) (citation omitted); see also Dowell v. Quiroz , 462 S.W.3d 578, 582 (Tex. App.—Corpus Christi 2015, no pet.) (describing standard of review in similar case).

Applicable Law

Life insurance policies that are contractual in nature, become effective at the decedent's death, and control the disposition of the asset by reason of the death, along with the proceeds paid to the named beneficiary therefrom, are nontestamentary transfers and nonprobate assets that pass according to their contractual terms. See TEX. ESTATES CODE ANN. § 111.052(a)(1)(A), (b) (West 2020). Nonprobate assets such as life insurance policies are those that are not subject to disposition by will or the laws of intestate succession. See Valdez v. Ramirez , 574 S.W.2d 748, 750 (Tex. 1978) ; In re Estate of Perez-Muzza , 446 S.W.3d 415, 422 (Tex. App.—San Antonio 2014, pet. denied) (stating that proceeds from nontestamentary transfer pass outside probate proceedings, decedent's personal representative has no authority with respect to them, and no rights to proceeds accrue to those who would take under decedent's will or through the laws of intestacy). However, any person, including a personal representative, asserting an interest in a life insurance policy, shall have access to Texas courts for a judicial determination of (1) whether a nontestamentary transfer of the assets or interests has occurred; or (2) the ownership of the assets or interests following a possible nontestamentary transfer.⁴ See TEX. ESTATES CODE ANN. § 111.054(c) (West 2020). It is axiomatic that the Texas court be a proper court with subject matter jurisdiction.

"Texas probate jurisdiction is, to say the least, somewhat complex." Palmer v. Coble Wall Tr. Co. , 851 S.W.2d 178, 180 n.3 (Tex. 1992). Each county has a constitutional county court, which is the office of the chief administrator of the county. See TEX. CONST. art. V, §§ 15 - 16. A county court has the jurisdiction conferred by the Texas Constitution and statutes. See TEX. GOV'T CODE ANN. § 26.041 (West 2019). The Upshur County Court has the general jurisdiction of a probate court and has concurrent jurisdiction with the district court in all other matters over which county courts are given jurisdiction by the constitution and general laws of this state. See id. § 26.330(a) (West 2019).

Courts such as the Upshur County Court have original probate jurisdiction over "probate proceedings" and "matters related to a probate proceeding." See TEX. EST. CODE ANN. § 32.001(a) (West 2020). The term "probate proceeding" is defined by statute as eight enumerated matters such as the probate of a will, issuance of letters testamentary, an heirship determination, and various other matters, none of which apply here. See id. § 31.001(a) (West 2020). "A matter related to a probate proceeding" is also statutorily defined, and such matters are determined by the type of trial court considering the matter. See generally id. § 31.002 (West 2020). As relevant here, in a county such as Upshur County without a county court at law or statutory probate court, the matters listed in Section 31.002(a) are "matters related to a probate proceeding," which include the following:

(1) an action against a personal representative or former personal representative arising out of the representative's performance of the duties of a personal representative;

(2) an action against a surety of a personal representative or former personal representative;

(3) a claim brought by a personal representative on behalf of an estate;

(4) an action brought against a personal representative in the representative's capacity as personal representative;

(5) an action for trial of title to real property that is estate property, including the enforcement of a lien against the property; and

(6) an action for trial of the right of property that is estate property.

Id. § 31.002(a). The amount-in-controversy limits do not limit the county court's original probate jurisdiction. See Womble v. Atkins , 160 Tex. 363, 331 S.W.2d 294, 299 (1960).

Probate courts also have "pendent and ancillary jurisdiction as necessary to promote judicial efficiency and economy." TEX. EST. CODE ANN. § 32.001(b). "Typically, probate courts exercise ancillary or pendent jurisdiction when a close relationship exists between the nonprobate claims and the claims against the estate." Jurgens v. Martin , 631 S.W.3d 385, 400 (Tex. App.—Eastland 2021, no pet.) (quoting Shell Cortez Pipeline Co. v. Shores , 127 S.W.3d 286, 294 (Tex. App.—Fort Worth 2004, no pet.) ); see also Narvaez v. Powell , 564 S.W.3d 49, 57 (Tex. App.—El Paso 2018, no pet.) ; Sabine Gas Trans. Co. v. Winnie Pipeline Co. , 15 S.W.3d 199, 202 (Tex. App.—Houston [14th Dist.] 2000, no pet.). In reviewing a probate court's exercise of pendent and ancillary jurisdiction, "the fundamental question ... is whether there was a close relationship between [the non-probate claims and the probate proceeding] such that the probate court's exercise of jurisdiction will aid it in the efficient administration of the [estate]." In re Estate of Hallmark , 629 S.W.3d 433, 438 (Tex. App.—Eastland 2020, no pet.) (quoting Schuchmann v. Schuchmann , 193 S.W.3d 598, 603 (Tex. App.—Fort Worth 2006, pet. denied) ). A probate court has jurisdiction to resolve ancillary claims against third parties only to the extent that such claims were necessary to resolve claims within its original jurisdiction. Id. "Pendent and ancillary" claims are nonprobate claims. Jurgens , 631 S.W.3d at 400 (citing Shores , 127 S.W.3d at 294 ).

In contrast to a pure probate proceeding, the...