Smith v. Smith

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

___________________

No. 96-50494

W. BLAKE SMITH, JR;
PATTI FAIN SMITH,
Plaintiffs-Appellees,

versus

JEAN S. SMITH; ROBERT PAT SMITH;
TRI-COAST LIMITED PARTNERSHIP,
Defendants-Appellants.

________________________________________________

Appeal from the United States District Court for the
Western District of Texas
(W-94-CV-366)
________________________________________________

June 30, 1997
Before GARWOOD, WIENER and DeMOSS, Circuit Judges.*

GARWOOD, Circuit Judge:

Plaintiffs-appellees W. Blake Smith, Jr. (Blake) and Patti

Fain Smith (Patti), husband and wife, brought this lawsuit against

their former daughter-in-law Jean S. Smith (Jean), her son Robert

Pat Smith, Jr. (Robert Jr.), and Tri-Coast Limited Partnership

(Tri-Coast) (collectively defendants), alleging that the defendants

procured a homestead, oil properties, stocks, furniture, cash, and

*
Pursuant to 5TH CIR. R. 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this opinion should not be published and is not precedent except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 5TH CIR. R. 47.5.4.
various other items belonging to the plaintiffs through fraud,

conspiracy, fraudulent misrepresentations, and unconscionable

dealings. The suit was originally filed in Texas state court, and

was removed to the district court below on the basis of diversity.

Thereafter, a jury returned a verdict in favor of the plaintiffs

awarding them compensatory and punitive damages, and the district

court ordered rescission of certain transactions and imposed a

constructive trust on the diverse wrongfully acquired properties to

secure payment of the judgment. Unhappy with the results, the

defendants now appeal. For the reasons that follow, we affirm.

Facts and Proceedings Below

This lawsuit involves a family sadly torn apart. Plaintiffs

Blake and Patti Smith, both of whom are in their eighties, are the

parents of Robert Pat Smith, Sr. (Robert Sr.), the former in-laws

of Robert Sr.’s ex-wife, Jean, and the grandparents of Robert Jr.,

Robert Sr. and Jean’s only child. Plaintiffs had long provided

Jean and Robert Jr. with financial support, giving them gifts and

money to support their somewhat lavish lifestyle. Apparently, Jean

and Robert Jr. were not satisfied with plaintiffs’ generosity, as

they embarked on a scheme to take complete control of plaintiffs’

assets and swindle the plaintiffs out of almost everything they

owned.

In 1987, Jean, citing Robert Jr.’s purported interest in

journalism, convinced Blake and Patti to transfer to Robert Jr.’s

2
name stock that Blake owned in a newspaper in Mexia, Texas.

However, very soon after Blake transferred the newspaper stock to

Robert Jr., Blake discovered that he could sell the newspaper stock

for a substantial sum, which he could then use to pay off some of

his debts, many of which had arisen as a result of past due notes

owed by Robert Sr. that Blake had signed or guaranteed. Much to

their dismay, when the plaintiffs asked that the newspaper stock be

put back in Blake’s name, Jean and Robert Jr. refused. Plaintiffs

then sought the assistance of Fred Davis (Davis), their attorney at

the time. Davis set up a meeting between the plaintiffs and

defendants, at which time Davis threatened to sue the defendants

for the stock. Reluctantly, Robert Jr. transferred the stock back

to Blake. Blake was able to sell the newspaper stock for $800,000

in cash plus a note and used the proceeds to pay off some of his

debts.1

Undeterred by this turn of events, the defendants continued

with their conspiracy to take control of plaintiffs’ wealth.

Sometime after Robert Jr. had reconveyed the newspaper stock to

Blake, Jean persuaded the plaintiffs to enter into a written

agreement whereby the plaintiffs would transfer some of Blake’s oil

and gas royalties, which generated approximately $5,000 per month

in royalty payments, to Robert Jr. to compensate him for the

1
The company that purchased the newspaper stock from the
plaintiffs eventually filed for bankruptcy and was unable to pay
the note.

3
earlier reconveyance of the newspaper stock. Overwhelmed by guilt,

the plaintiffs agreed to give Robert Jr. the oil royalties.

Over the next several years, Jean and Robert Jr. persuaded the

plaintiffs to sign numerous documents without legal representation

and which the defendants knew the plaintiffs did not understand.

These documents conveyed to the defendants, among other things,

stock in Coca-Cola, AT&T, and Baby Bells owned by the plaintiffs.

Defendants convinced the plaintiffs to enter into consulting

agreements whereby the defendants would provide the plaintiffs with

“consulting services,” and in return the plaintiffs agreed to pay

Jean and Robert Jr. a total of $40,000 a year for ten years. Jean

induced the plaintiffs to set up the 1990 W. Blake Smith, Jr.

Family Trust (1990 Family Trust). Jean, as trustee, had total

control over the Trust and could withdraw money from it without

consulting the plaintiffs. Also, the plaintiffs were persuaded to

transfer furniture they owned to the defendants, which the

defendants falsely claimed they would sell on behalf of the

plaintiffs. During the course of all of these agreements and

transactions, the defendants repeatedly, but falsely, assured the

plaintiffs that they were acting in the plaintiffs’ best interest.

In 1990, Jean convinced the plaintiffs to sell the assets of

the W. Blake Smith Jr. Trust, a trust the plaintiffs had created in

1988 (1988 Trust), in order to pay off a debt on a loan from Texas

American Bank of Forth Worth (Texas Bank) for nearly $1,600,000.

In that Trust, Blake had contributed stock from public utilities

4
and oil royalties he owned in Gregg and Limestone Counties in

Texas. Under the terms of the Trust, Blake was grantor, Tom

Roberts (Roberts) was trustee, Blake and Patti were income

beneficiaries for life, Robert Jr. was remainderman, and Jean was

contingent remainderman. Although the 1988 Trust precluded the

trustee from selling the Trust’s assets and paying all of the

proceeds directly to the plaintiffs as the life income

beneficiaries, the trustee agreed to sell the Trust assets and pay

the proceeds to Texas Bank once Blake, Patti, Jean, and Robert Jr.

all consented and agreed in writing. The buyer of the royalties

and stock was Tri-Coast, a California partnership of which Jean was

the general partner with 2% ownership and Robert Jr. was the

limited partner with 98% ownership. Tri-Coast paid the market

value price for the utilities stock, but purchased the Gregg and

Limestone County oil properties from the Trust for only $264,000,

approximately $111,000 below their market value. As planned, the

proceeds from the sale of the Trust property were applied to the

Texas Bank settlement. In addition to its purchases from the

Trust, Tri-Coast also purchased directly from the plaintiffs their

200 acre rural homestead with a lease back agreement for $200,000,

nearly $204,000 below its market value price.

By the time the plaintiffs had realized what the defendants

had done to them, almost all of their assets were taken out of

their control and put in the hands of the defendants, either

because the plaintiffs had conveyed the assets to the defendants

5
through gifts or sales, or the assets were in trusts that were

controlled exclusively by Jean. In November 1994, the plaintiffs

filed suit against the defendants in the 87th Judicial District

Court, Freestone County, Texas, alleging that the defendants had

engaged in fraud, conspiracy, fraudulent misrepresentations, and

unconscionable transactions in persuading the plaintiffs to enter

into agreements that resulted in conveyance of plaintiffs’

properties and cash to the defendants. Defendants removed the case

to the district court below on the basis of diversity. A jury

returned a verdict in favor of the plaintiffs, finding the

defendants liable to the plaintiffs for compensatory and punitive

damages. Plaintiffs moved for a temporary restraining order and

preliminary injunction, which the court granted. The district

court entered a Judgment Upon Jury Verdict and Judgment of

Severance, awarding damages, ordering rescission of various

transactions, and imposing a constructive trust on the fraudulently

acquired properties to secure payment of the judgment.2 The court

later issued a “final injunction” enjoining the defendants “pending

finality of judgment to be entered in this cause” from “selling,

encumbering, otherwise disposing of or damaging” various properties

and proceeds obtained by the defendants through their fraud.

Defendants timely appealed.

Discussion

2
Jean and Tri-Coast filed for bankruptcy; these filings were
both later dismissed.

6
 On appeal, the defendants raise various arguments. They

contend that the district court erred by imposing a constructive

trust on the unlawfully acquired properties and by ordering

rescission of various transactions in addition to awarding damages

for those same transactions. Defendants also complain that service

of process was improper; the court impermissibly terminated the

irrevocable 1988 Trust; there was insufficient evidence to support

the jury’s finding of fraud vis-à-vis the 1987 oil royalties

agreement and conveyance; the jury instructions on the statute of

limitations issue were erroneous; and the court issued the “final

injunction” without adequate notice to the defendants. We address

each argument in turn below.

I. Constructive Trust

Defendants’ first argument on appeal is that the district

court erred by imposing a constructive trust on the properties and

proceeds in order to enforce its judgment awarding the plaintiffs

damages. This Court reviews the district court’s decision to

impose a constructive trust for abuse of discretion. United States

v. Durham, 86 F.3d 70, 72 (5th Cir. 1996); Stephens v. Stephens,

877 S.W.2d 801, 805 (Tex.App.——Waco 1994, writ denied).

Generally, a court will impose a constructive trust “where

equity and justice demand.” Durham, 86 F.3d at 73 (citation

omitted). “A constructive trust is an equitable tool in a court’s

power that can infer a fiduciary-like relationship within a

7
transaction for the purpose of promoting justice.” Harris v.

Sentry Title Co., Inc., 715 F.2d 941, 946 (5th Cir. 1983), modified

on other grounds, 727 F.2d 1368 (5th Cir.), cert. denied, 105 S.Ct.

514 (1984). In order for a court to impose a constructive trust,

there must be a breach of an informal relationship of special trust

arising prior to and apart from the transaction made the basis of

the law suit, or actual fraud, unjust enrichment on the part of the

wrongdoer, and tracing to an identifiable res. Matter of Monnig’s

Dept. Stores, Inc., 929 F.2d 197, 201 (5th Cir. 1991); see also

Hamblet v. Coveney, 714 S.W.2d 126, 128 (Tex.App.——Houston [1st

Dist.] 1986, writ ref’d n.r.e.). With respect to the existence of

a prior confidential relationship, the Texas Supreme Court has

explained that

“[w]hile a confidential or fiduciary relationship does
not in itself give rise to a constructive trust, an abuse
of confidence rendering the acquisition or retention of
property by one person unconscionable against another
suffices generally to ground equitable relief in the form
of the declaration and enforcement of a constructive
trust, and the courts are careful not to limit the rule
or the scope of its application by a narrow definition of
fiduciary or confidential relationships protected by it.
An abuse of confidence within the rule may be an abuse of
either a technical fiduciary relationship or of an
informal relationship where one person trusts in and
relies upon another, whether the relation is a moral,
social, domestic, or merely personal one.” Hamblet, 714
S.W.2d at 128 (quoting Fitz-Gerald v. Hull, 237 S.W.2d
256, 261 (Tex. 1951)) (emphasis in original).

In this case, all of the requirements of a constructive trust

are satisfied. Not only did a prior confidential relationship

8
exist between the plaintiffs and individual defendants——plaintiffs’

grandson and former daughter-in-law——but the jury specifically

found that the defendants engaged in actual fraud. Defendants also

were unjustly enriched by their illegal endeavors, acquiring almost

all of plaintiffs’ assets through fraud, conspiracy, fraudulent

misrepresentations, and unconscionable transactions. And, the

plaintiffs were able to trace the properties and proceeds that the

defendants had acquired through their fraud. Furthermore, given

defendants’ past conduct, a constructive trust could properly be

found to be necessary to prevent the defendants from disposing of

the properties in a manner that would be adverse to the interests

of the plaintiffs. On these grounds, we believe the equities

undoubtedly justify the imposition of the constructive trust, and

the district court’s decision to do so was not an abuse of

discretion.

II. Rescission

Next, the defendants argue that the lower court violated the

doctrine of election of remedies by ordering rescission of certain

transactions while also awarding the plaintiffs damages of $725,000

and not requiring the plaintiffs to return the consideration paid

by the defendants.3 Specifically, the defendants claim that the

3
The doctrine of election of remedies——designed to prevent a
plaintiff from receiving double recovery for a single wrong——bars
relief when one has made an informed choice between two or more
remedies, rights, or states of facts which are so inconsistent as
to constitute manifest injustice. See Bocanegra v. Aetna Life Ins.
Co., 605 S.W.2d 848, 851 (Tex. 1980).

9
plaintiffs should not be awarded $725,000 in damages while also

recovering through rescission (1) the oil royalties that Blake

conveyed to Robert Jr. in 1987; (2) the oil properties purchased by

Tri-Coast from the 1988 Trust; and (3) the sum of $220,000 and two

platinum bar pins from Jean.

A. Rescission of the 1987 Conveyance of Oil Royalties

Defendants maintain that the court erroneously awarded the

plaintiffs double recovery by ordering rescission of the 1987

conveyance of oil royalties from Blake to Robert Jr.——which the

jury found to be fraudulent——while also awarding the plaintiffs

damages caused by the conveyance and, on top of that, allowing

Blake to keep the “consideration” that Robert Jr. paid in exchange

for the royalties, i.e the Mexia newspaper stock.

In theory, the defendants are correct in that, as a general

rule, the plaintiffs may not have a transaction rescinded while

also recovering damages caused by that same transaction. See

Ehrlich v. United States, 252 F.2d 772, 776 (5th Cir. 1958)

(stating that “[t]he object, of course, of an equitable suit for

rescission is to restore the status quo, not to punish the

transgressor. The harm should be undone but there is no reason to

reward the victim.”); Kargar v. Sorrentino, 788 S.W.2d 189, 191

(Tex.App.——Houston [14th Dist.] 1990, no writ) (explaining that

rescission and damages are, as a general rule, mutually exclusive

remedies). Such is not the case here, however. Indeed, contrary

10
to defendants’ assumption, the $725,000 in damages awarded by the

jury did not include any damages caused by the 1987 oil royalties

conveyance. Plaintiffs never asked for any damages for the 1987

conveyance either in their pleadings or in argument or otherwise at

trial. In their pleadings, the plaintiffs made only general

requests for damages; they did not specifically ask for damages

emanating from the 1987 conveyance. Also, the plaintiffs during

trial did not seek damages with respect to the 1987 conveyance. In

fact, they disclaimed any such recovery. In their closing

arguments, the plaintiffs presented their request for damages to

the jury as follows:

“I want to tell you what we believe our damages are in
this case. . . . They paid $264,000, Tri-Coast did. We
have appraisals from ‘Tom’ Hilton as to fair market
value——and you’ll notice that there——they got no
appraisal, there is no evidence——that’s $111,000.
Homestead——that’s the difference between what they paid
and the fair market value. And the Court charges——tells
you, they have a duty to treat them fairly and make these
determinations. They paid 200,000, appraised at 404,000;
that’s $204,000 difference. The AT&T and Baby Bells,
they didn’t really pay anything, they just got that
transferred. . . . That figure is 76,569 that’s——that’s
the figure from the tax returns, that’s what Jean sold
the——that’s what Jean sold the AT&T and Baby Bells for,
under her tax returns, in January of 1991.

The Coca-Cola stock, she——Jean, according to her tax
returns, she sold 2,000 shares for $116,109. That’s an
average price of $58.04. You multiply that times 5,280
and you get $306,504. So we say 698,073. Those are the
damages we’ve got. We don’t claim damages for anything
else. All of the other things that they’ve done, the
money they have received, we only ask with respect to
these particular items.” (emphasis added).

The jury returned a verdict that included, among other things,

11
an award of damages for $725,000, which is only slightly higher

than the $698,073 requested by the plaintiffs during closing

arguments and which is consistent with evidence presented by the

plaintiffs concerning damages in respect to items as to which

recision was not ordered. We essentially agree with the district

court’s conclusion that the jury could have rationally calculated

the damages award as follows: $204,000 for the homestead loss;

$111,000 for the oil royalties loss; $306,504 for the Coca-Cola

stock loss; $76,659 for the AT&T and Baby Bells stock loss; and

$30,700 for furniture loss. Because our review of the evidence

reveals that the damages award did not include any damages from the

1987 oil royalties conveyance, we affirm the rescission order.

Furthermore, the plaintiffs need not return to the defendants

the proceeds from the sale of the newspaper stock, as we are

satisfied that the jury could have properly concluded that the

newspaper stock did not act as “consideration” for reconveyance of

the oil royalties. The evidence shows that when Blake asked for

return of the stock so that he could pay off his debts, Robert Jr.

and Jean refused. Only after plaintiffs’ attorney threatened to

sue the defendants did they agree to give the stock back to Blake.

It was not until after Robert Jr. gave the newspaper stock back to

Blake that the defendants, taking advantage of plaintiffs’ trust

and generosity, fraudulently convinced the plaintiffs to give

Robert Jr. the oil royalties. Thus, the jury could have found,

based on the evidence, that the defendants transferred the

12
newspaper stock to the plaintiffs, not as consideration in exchange

for the newspaper stock, but because the defendants knew that

failure to reconvey the stock to Blake would likely result in a

lawsuit. Additionally, the jury could have concluded that the

motive behind transferring the newspaper stock to Robert Jr. was

merely to get title in Robert Jr.’s name to avoid Blake’s

creditors, and that there was never anything more than a nominal

transfer of the stock into Robert Jr.’s name. Accordingly, the

defendants are not entitled to the proceeds from the sale of the

newspaper stock.

Under all the particular circumstances here, the recision

order has not been shown to constitute an abuse of discretion. See

Durham, 86 F.3d at 72.

B. 1988 W. Blake Smith, Jr. Trust

Defendants next contend that to award the plaintiffs actual

and exemplary damages, order the defendants to turn over to the

plaintiffs the oil properties purchased by Tri-Coast from the 1988

Trust, and at the same time allow the plaintiffs to avoid returning

to the defendants the $264,000 they paid for the oil properties,

amounts to double recovery and, therefore, violates the doctrine of

election of remedies.

Defendants apparently misinterpret the district court’s

judgment, as the judgment does not order rescission of the sale of

the oil properties purchased by Tri-Coast from the 1988 Trust. The

13
court’s Judgment Upon Jury Verdict and Judgment of Severance,

signed and entered nunc pro tunc on April 5, 1996, orders

rescission of only a handful of transactions: (1) the 1987

agreement to transfer oil royalties to Robert Jr. for reconveyance

of the newspaper stock and the actual conveyance of those oil

royalties; (2) a handwritten agreement dated February 8, 1988; (3)

various releases entered into in 1989; (4) the 1990 and 1992

Consulting Agreements; (5) the 1990 Family Trust; and (6) various

powers of attorney.4 The judgment also specifically orders the

defendants to reconvey to the plaintiffs title and ownership in the

oil royalties transferred to Robert Jr. in 1987 as well as all

properties held in the 1990 Family Trust. Nowhere in the judgment

does the court require the defendants to return to the plaintiffs

the oil properties purchased by Tri-Coast from the 1988 Trust.

Because the latter oil properties are not subject to the rescission

order, the plaintiffs’ damages in respect thereto do not amount to

double recovery.5

C. $120,000 and Platinum Bar Pins

4
Although the judgment originally called for rescission of the
“1980" Family Trust, this typographical error was later changed by
the court to read “1990" Family Trust.
5
Our conclusion that the judgment does not order the defendants
to return to the plaintiffs the oil properties purchased by Tri-
Coast necessarily renders moot defendants’ contention that they
should get back the $264,000 Tri-Coast paid for the oil properties.
The judgment allows the defendants to keep the oil properties, and
simply orders them to pay the plaintiffs the difference between the
price the oil properties should have been sold for and the reduced
price actually paid by Tri-Coast: $111,000.

14
 Defendants’ complaint that the plaintiffs are not entitled to

the award of $220,000 and return of the two platinum bar pins, in

addition to the $725,000 in damages, is without merit. As an

initial matter, we note that the defendants did not raise this

argument in their opening brief; therefore, we consider the

argument waived. See Graef v. Chemical Leaman Corp., 106 F.3d 112,

115 n.2 (5th Cir. 1997).

However, even if we were to reach the merits of defendants’

argument, we would nevertheless affirm the rescission order. The

jury found that Patti gave to Jean $120,000 in cash and two

platinum bar pins to hold for her (Patti). The jury also awarded

the plaintiffs $100,000 in punitive damages as against Jean. In

its final judgment, the court simply orders Jean to pay the

punitive damages ($100,000) and give the $120,000 and bar pins back

to Patti. As discussed earlier, the $725,000 was awarded for

damages relating solely to the transfer of stocks and furniture to

the defendants and the sale of the oil properties to Tri-

Coast——damages stemming from causes of action that were completely

unrelated to the additional allegation that Patti gave to Jean

$120,000 in cash and two platinum bar pins to hold for her. The

court’s award of $220,000 and order that Jean return the platinum

bar pins do not overlap with the $725,000 in damages; hence, there

is no multiple recovery.

III. Service of Process

15
 Defendants maintain that Jean, although properly served with

the original complaint in her individual capacity, was never

properly served in her capacity as trustee of the 1990 Family Trust

with plaintiffs’ first amended complaint, which added her as a

party in her trustee capacity. Because of this defect in service

of process, defendants contend, the district court did not have

jurisdiction over Jean as trustee or the 1990 Family Trust and,

thus, the judgment as it relates to Jean as trustee and the 1990

Family Trust must be vacated.

In Plaintiffs’ Motion For Leave to File First Amended

Complaint, the plaintiffs requested leave to amend their complaint

to add Jean as trustee of the 1990 Family Trust, which the court

subsequently granted. Instead of serving Jean with the amended

complaint, however, the plaintiffs mailed a copy of the amended

complaint to Stephen Fontaine, Jean’s attorney in the litigation.

Despite having the opportunity to do so, the defendants did

not raise any objections to improper service of process on Jean as

trustee prior to trial. Instead, they waited until they filed

their Response to Plaintiffs’ Motion for Judgment to raise their

objection. Indeed, at trial, Jean testified extensively about the

1990 Family Trust and her role as trustee of the Trust without

raising any objections to service of process or the court’s

jurisdiction over her as trustee. Because Jean never objected to

improper service of process below, she may not now complain of

16
improper service to this Court. See Trust Co. of Louisiana v.

N.N.P. Inc., 104 F.3d 1478, 1487 (5th Cir. 1997) (stating that

“[t]he Federal Rules do not in any way suggest that a defendant may

halfway appear in a case, giving plaintiff and the court the

impression that he has been served, and, at the appropriate time,

pull failure of service out of the hat like a rabbit in order to

escape default judgment”) (quoting Broadcast Music, Inc. v. M.T.S.

Enterprises, Inc., 811 F.2d 278, 281 (5th Cir. 1987)); Kersh v.

Derozier, 851 F.2d 1509, 1511 (5th Cir. 1988) (stating that

“[u]nder Rule 12(h)(1)(B), the defense of insufficient service of

process is waived unless made in a party’s first responsive

pleading or an amendment to a first responsive pleading allowed as

a matter of course.”); see also 5A C. Wright & A. Miller, Federal

Practice and Procedure § 1391 p. 752 (1990) (explaining that

12(h)(1) of the Federal Rules of Civil Procedure “advises a

litigant to exercise great diligence in challenging . . . service

of process. If he wishes to raise any of these defenses he must do

so at the time he makes his first significant defensive

move——whether it be by way of a Rule 12 motion or a responsive

pleading.”).6

6
Defendants also contend that the trustee of the 1988 Trust,
Tom Roberts, and the 1991 and 1994 Robert Pat Smith, Jr. Trusts
should have been joined as defendants in this suit, as the judgment
directly affects the properties once held by these trusts. We deem
these eleventh hour arguments waived, however, as the defendants
did not raise these joinder challenges until after the case was
submitted to the jury. See Judwin Properties, Inc. v. United

17
IV. De Facto Termination of the 1988 Trust

Next, the defendants argue that the court erred by ordering

them to pay the plaintiffs damages arising from the sale of the oil

properties in the 1988 Trust to Tri-Coast when, instead, the court

should have ordered that the damages be paid to the Trust. This,

according to the defendants, along with the court’s mandate that

the defendants reconvey the oil properties purchased by Tri-Coast

back to the plaintiffs while allowing the plaintiffs to retain the

consideration that Tri-Coast paid for the properties, constitutes

a de facto termination of the otherwise irrevocable 1988 Trust.

As stated earlier, the judgment does not require the

defendants to reconvey any of the oil properties purchased from the

1988 Trust back to the plaintiffs. Because the defendants are

allowed to keep the properties, the district court correctly

allowed the plaintiffs to retain the $264,000 acquired from the

sale of the properties.

We also reject defendants’ argument that the court’s decision

to award damages to the plaintiffs effectively terminated the 1988

Trust. We understand the court’s judgment to be simply a

recognition by the court that the 1988 Trust had already been

States Fire Ins. Co., 973 F.2d 432, 434 (5th Cir. 1992); see also
Gil Enterprises, Inc. v. Delvy, 79 F.3d 241, 247-48 (2d Cir. 1996).
Furthermore, as to the 1991 and 1994 Robert Pat Smith, Jr. Trusts,
the defendants fail to explain intelligibly how these trusts are
relevant to the jury’s verdict, the court’s judgment, or this
appeal.

18
terminated by all the parties concerned in it long before the suit

was even filed. Upon agreement by all of the parties necessary to

effectuate a termination of the Trust——that is, Blake, Patti, Jean,

Robert Jr., and the trustee of the 1988 Trust——Tri-Coast purchased

all of the Trust’s property, the proceeds of which were applied to

the Texas Bank settlement. By agreeing to sell all of the Trust

property, and thereby depleting the Trust of all its assets, the

parties in essence agreed to terminate the Trust. See Musick v.

Reynolds, 798 S.W.2d 626, 629 (Tex.App.——Eastland 1990, writ

denied). Because it was the parties, and not the court, who

terminated the Trust, the court did not, either expressly or de

facto, revoke the Trust by ordering the defendants to pay the

damages from the sale of the oil properties to the plaintiffs.

V. Sufficiency of the Evidence

Defendants contend that there was insufficient evidence to

support the jury’s finding of fraud with respect to the 1987

agreement to transfer the oil royalties in exchange for the

newspaper stock and the actual conveyance of the oil royalties to

Robert Jr. The defendants, however, failed to make a motion for

judgment as a matter of law on their insufficiency of the evidence

claims; therefore, these claims are not properly preserved for

review. “The sufficiency of the evidence supporting jury

submission of a case or the jury’s findings is not reviewable on

appeal unless the party seeking review has made a motion for a

19
directed verdict in the trial court.” Little v. Bankers Life &

Cas. Co., 426 F.2d 509, 510 (5th Cir. 1970); see also Quinn v.

Southwest Wood Products, Inc., 597 F.2d 1018, 1024-25 (5th Cir.

1979); House of Koscot Development Corp. v. American Line

Cosmetics, Inc., 468 F.2d 64, 67 (5th Cir. 1972); 9A C. Wright & A.

Miller, Federal Practice and Procedure §§ 2536 pp. 329-34 (1995).

If a party fails to make a timely motion to the trial court, this

Court’s “consideration is limited to whether plain error [was]

committed which, if not noticed, would result in a manifest

miscarriage of justice.” Little, 426 F.2d at 511; see also Daigle

v. Liberty Life Ins. Co., 70 F.3d 394, 397 n.2 (5th Cir. 1995);

House of Koscot Development. Corp., 468 F.2d at 67. In other

words, although we may not question the sufficiency of the

evidence, we may inquire whether there was any evidence supporting

the submission of the issue to the jury. House of Koscot

Development. Corp., 468 F.2d at 68 n.5.

Applying this standard of review, we cannot say that the

plaintiffs failed to present at trial at least some evidence of

fraud with respect to the 1987 agreement and conveyance of oil

royalties to Robert Jr. Plaintiffs presented evidence that at the

meeting where Robert Jr. reconveyed to Blake the newspaper stock,

neither Jean nor Robert Jr. mentioned anything about an agreement

to transfer oil royalties to Robert Jr. in exchange for

reconveyance of the newspaper stock. There was evidence that the

20
written agreement to transfer the oil royalties to Robert Jr. was

entered into after Robert Jr. had already reconveyed the newspaper

stock to Blake. Moreover, the plaintiffs demonstrated that both

Jean and Robert Jr. viewed the oil royalties as a gift and treated

the royalties as such on their tax returns. The plaintiffs

presented some evidence of fraud as to these transactions, and

because no miscarriage of justice would result from upholding the

jury’s findings, we reject defendants’ sufficiency of the evidence

claim.

VI. Statute of Limitations Jury Instructions

Defendants complain that the district court, over defendants’

objections, erroneously submitted only a single jury interrogatory

on the statute of limitations issue. Defendants assert that

because the jury was specifically asked about twenty-six fraudulent

transactions, a separate statute of limitations interrogatory

should have accompanied each of those fraud interrogatories.

This Court reviews a challenge to jury instructions under a

two-step approach. First, the challenge must demonstrate that the

jury charge, as a whole, creates a substantial and ineradicable

doubt that the jury has been properly guided in its deliberations.

Second, even if the jury instructions were erroneous, we will

nevertheless affirm the verdict if, based upon the entire record,

we conclude that there is no reasonable possibility that the

instructions affected the outcome of the case. Flores v. Cameron

County, Tex., 92 F.3d 258, 262 (5th Cir. 1996); Mooney v. Aramco

Services Co., 54 F.3d 1207, 1216 (5th Cir. 1995).

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 The statute of limitations jury interrogatory asked, “Do you

find that Plaintiffs knew or should have known of Defendants’

alleged fraudulent actions before November 11, 1990?”, to which the

jury answered “No.” The court further instructed the jury that

“In addition to denying liability in the present
case, the Defendants have asserted that the Plaintiffs’
claims against them are barred by the statute of
limitations. You are instructed that the four year
statute of limitations is applicable to Plaintiffs’
claims against the Defendants.

You are further instructed that the Plaintiffs have
alleged that they did not discover the Defendants’
alleged fraudulent activities until the Fall of 1993. If
W. Blake Smith, Jr. and Patti Fain Smith were not aware
of Defendants’ alleged fraudulent activities, or the
Defendants concealed their alleged fraudulent activities,
the statute of limitations does not begin to run until
the time the fraud is discovered or could have been
discovered by W. Blake Smith, Jr. and Patti Fain Smith’s
exercise of reasonable diligence.

If you find from a preponderance of the evidence
that W. Blake Smith, Jr. and Patti Fain Smith did not
discover or should not have discovered the alleged
fraudulent activities of the Defendants prior to November
10, 1990, then as a matter of law you must find that the
Plaintiffs’ claims are not time barred.”

The jury instructions correctly incorporated the residual

four-year statute of limitations applicable in actions for fraud.

See Tex. Civ. Prac. & Rem. Code Ann. § 16.051 (Vernon 1986). The

instructions also accurately and clearly explained that the statute

of limitations does not begin to run until the fraud is discovered

or until it might have been discovered by the exercise of

reasonable diligence. Artymae Little, Estate of Frank J. Little,

M.D. v. Katherine Irene Barber Smith, No. 95-0744, 1997 WL 43243,

*6 (Tex. Jan. 31, 1997). We are not convinced that the

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instructions, as a whole, create a substantial and ineradicable

doubt that the jury was improperly guided, nor do we believe that

the instructions affected the outcome of the case. No reversible

error is shown in this respect.

VII. Final Injunction

Defendants’s final argument on appeal is that the district

court erroneously issued the “final injunction,” as the plaintiffs

in their pleadings asked only for a temporary restraining order and

preliminary injunction, and not for a permanent injunction.

Because the plaintiffs never included in their pleadings a request

for a permanent injunction, the defendants maintain that they were

not put on notice of the injunction and, thus, the court should not

have issued the injunction.

Although the plaintiffs, as the defendants correctly note,

asked only for a temporary restraining order and preliminary

injunction, the record contradicts the defendants’ assertion that

they were never put on notice of the “final injunction.” Indeed,

the record shows that the defendants were informed by plaintiffs’

attorneys and the court in advance of the post-verdict hearing

which led to the “final injunction” that the scheduled hearing was

to be on plaintiffs’ request for “a permanent injunction” and was

“to determine . . . an appropriate injunctive order.” Moreover,

the defendants do not explain how they are harmed by the “final

injunction,” as the injunction merely extends the preliminary

injunction until the judgment becomes final, and also serves a

purpose substantially similar to that of the constructive trust

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imposed by the court (the injunction covers no items not covered by

the constructive trust or the recision judgment).7 Defendants’

confusing contentions respecting the “final injunction” present no

reversible error.

Conclusion

For the foregoing reasons, the judgment below is

AFFIRMED.

7
Defendants claim that the language of the Order of Final
Injunction, which provides that the injunction will be in effect
“pending finality of judgment to be entered in this cause,” is
somewhat confusing, and defendants seem to suggest that somewhere
within that confusion lies an appellate claim. Because we are
unable to discern what relief the defendants are asking for, nor
are we able to perceive of any viable argument the defendants might
have respecting the final injunction, we find defendants’ argument
meritless.

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