UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 96-40374
Summary Calender
LIFE INSURANCE COMPANY OF NORTH AMERICA,
Plaintiff
VERSUS
DEBRA MAY GIPSON WALDROP, ET AL,
Defendants
DEBRA MAY GIPSON WALDROP,
Defendant-Appellant
VERSUS
WARD H. THOMAS, JR., AS GUARDIAN AD LITEM FOR
JENNIFER HOHLE, A MINOR, AND BRANDON HOHLE, A MINOR,
Appellee
Appeal from the United States District Court
for the Southern District of Texas
(C-94-CV-308)
October 22, 1996
Before SMITH, DUHÉ, and BARKSDALE, Circuit Judges.
PER CURIAM:1
Debra Mae Hoyle, previously known as Debra May Gipson Waldrop,
appeals the district court’s refusal to allow her to take
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Pursuant to Local Rule 47.5, the Court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in Local Rule 47.5.4.
possession of life insurance proceeds as trustee for her children
Jennifer and Brandon Hohle. We affirm.
Pursuant to a divorce decree, Rodney Hohle, the ex-husband of
Debra Mae Hohle, maintained a life insurance policy apparently
meant to provide for their two children. Rodney Hohle died in
1993. The divorce decree named Debra Hohle “beneficiary as
trustee” of the proceeds, while the insurance enrollment card named
Debra as “beneficiary and trustee for benefit of Jennifer and
Brandon Hohle.” Plaintiff Life Insurance Company of North America
(“LINA”) brought this interpleader action because of the
discrepancy in language between the decree and insurance card to
clarify the rights of the potential claimants. The district court
granted the interpleader, and LINA deposited $200,000 in proceeds
with the court.
When LINA brought suit, Debra claimed an interest in the
proceeds in her individual capacity. For that reason, she asked
the court in her counterclaim and cross claim to appoint a Guardian
Ad Litem for her children. Several pleadings reiterate that Debra
sought the proceeds for herself, and that a conflict might exist
between her interests and those of her children.
Debra moved for summary judgment that she take the insurance
proceeds as trustee for her children. When she so moved, Debra
submitted an affidavit stating she no longer sought the proceeds in
her individual capacity, but only as trustee for her children.
The district court denied the motion, stating that since Debra
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had previously asserted an interest in the proceeds in her
individual capacity, she thereby repudiated her trust relation to
the $200,000. We agree. “[A] person who sues to recover property
for his own right repudiates a trust relation to such property.”
Brault v. Bigham, 493 S.W.2d 576, 579 (Tex.Civ.App. 1973). As
Debra had previously demonstrated interests adverse to those of her
children, she could no longer properly act in a fiduciary capacity.
Debra’s second point of error is that the district court erred
in not allocating a portion of the proceeds to Debra’s control as
trustee for her children. We disagree. Since Debra forfeited her
right to act as trustee, she was not entitled to control over any
portion of the $200,000 proceeds.
Debra next argues the form of the trust was improper under §
142.005, Texas Property Code. § 142.005 (b)(2) states the trustee
may in his sole discretion distribute amounts for the necessary
“health, education, support, or maintenance of the beneficiary.”
Article IV, Paragraph 2 of the trust permits discretionary
distributions. That section instructs the trustee on what to
consider if making distributions: the beneficiary’s standard of
living, his known resources, the ability of the person legally
obligated to support the beneficiary, and the ability of the
beneficiary to earn income (except while obtaining education).
Debra claims the language in the trust instructing the trustee
to consider the ability of the person legally obligated to support
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the beneficiary before making distributions could be interpreted to
require her to work. She claims the trustee could reduce
discretionary distributions to force her to work longer hours or
two jobs, and that this paragraph constituted an impermissible
limitation on trust distributions. This argument is without merit.
There is no impermissible limitation on trust distributions because
the trust provides only for discretionary distributions. Debra is
not entitled to any distribution.
Debra then alleges that Code section violates both the U.S.
and Texas Constitutions by denying equal protection and equal
rights to trust recipients. We see no constitutional problems with
the statute.
Debra next contends the guardian ad litem should not have
continued in the case after she disclaimed her interest in the
proceeds by affidavit. Since we find Debra was not entitled to act
as trustee, it was proper for the guardian ad litem to remain in
the case.
Debra’s final contention is that the attorneys’ fees for the
guardian ad litem approved by the district court were unreasonable
and should not have been paid out of the proceeds. We find no
impropriety in the guardian’s fees, and agree with the district
court that the fees were appropriate.
AFFIRMED.
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