Frances Camacho, Richard J. Camacho, Vivian C. Trevino and Deborah Ann Camacho v. Veterans Life Insurance, Carlos R. Montes and Stephen R. Garcia

NO. 07-05-0003-CV

IN THE COURT OF APPEALS

FOR THE SEVENTH DISTRICT OF TEXAS

AT AMARILLO

PANEL D

SEPTEMBER 15, 2006
______________________________

FRANCES CAMACHO, RICHARD J. CAMACHO,
VIVIAN C. TREVINO AND DEBORAH ANN CAMACHO, APPELLANTS

V.

CARLOS R. MONTES AND STEPHEN R. GARCIA, APPELLEES
_________________________________

FROM THE 99TH DISTRICT COURT OF LUBBOCK COUNTY;

NO. 2002-519,041; HONORABLE MACKEY K. HANCOCK, JUDGE
_______________________________

Before QUINN, C.J., and REAVIS and CAMPBELL, JJ.

MEMORANDUM OPINION

Appellants Frances Camacho, Richard Camacho, Vivian C. Trevino, and Deborah

Ann Camacho appeal the judgment entered in favor of appellees Carlos R. Montes and

Stephen R. Garcia. We will affirm.

This is a suit to determine the ownership of the proceeds of a life insurance policy.

Appellant Frances Camacho (“Frances”) and others brought suit against Veterans Life
Insurance Company and Gloria Garcia Camacho (“Gloria”), claiming the proceeds of a

Veterans policy that insured the life of Delfino Camacho (“Delfino”).1

Frances purchased the $100,000 term policy on Delfino’s life from Veterans in May

of 1986, while Frances and Delfino were married.2 She was named the beneficiary.

Delfino and Frances divorced on January 3, 1994. The divorce decree awarded the

ownership of all insurance on the life of Delfino to him. Nevertheless, Frances continued

to pay the monthly premiums on the policy after the divorce, and she kept the policy in her

possession. Premium notices came addressed to Delfino, in care of Frances, at her

address. Delfino gave no written instructions to Veterans re-designating Frances as the

beneficiary after their divorce.

After Delfino and Frances separated before their divorce, Delfino began living with

Gloria. Delfino and Gloria were married on April 12, 2002, and Delfino died three days

later after a long illness.3

Veterans tendered the proceeds of the policy into the trial court’s registry and was

dismissed from the case. Gloria moved for summary judgment which, after hearing, the

1
Appellants Richard Camacho, Vivian C. Trevino, and Deborah Ann Camacho,
children of Frances and Delfino, were also plaintiffs in the trial court. Alternative to
Frances’s claim to the proceeds, they asserted claims for the policy proceeds as Delfino’s
heirs at law.
2
The record reflects Frances and Delfino were married for 27 years prior to their
divorce.
3
Gloria also died after this lawsuit was filed and her heirs-at-law were substituted
in her place. Her heirs-at-law are appellees Carlos R. Montes and Stephen R. Garcia.

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trial court granted in part. The trial court held as a matter of law the following: (1) Delfino

was the owner of the policy; (2) the divorce divested Frances of any right and title to the

policy; (3) there was no action to re-designate her as the beneficiary of the policy; and (4)

under the Family Code4 and the policy,5 Gloria was the designated beneficiary.

The trial court then conducted a bench trial on the issue of constructive or resulting

trust. Frances testified that Delfino told her after their divorce that the policy was hers

because she had been paying the premiums. She testified that she continued to make the

payments in reliance on his statement. Delfino’s son and sister testified that it was only

about a year before his death that Delfino found out that Frances had maintained the

insurance policy. Gloria testified, through her deposition, that Delfino was “very upset” when

he learned of the existence of the policy.

At first, the trial court found that Gloria would be unjustly enriched by payment of the

policy proceeds to her, and rendered judgment imposing a constructive trust on the policy

proceeds in favor of Frances. On Gloria’s motion to modify, correct, or reform the

judgment, the trial court withdrew its previous judgment and rendered judgment awarding

the policy proceeds to Gloria’s heirs-at-law. At the request of Frances, the trial court made

4
Under the Family Code, designation of the insured’s former spouse as beneficiary
under a life insurance policy in force at the time of divorce is not effective unless (1) the
divorce decree designates the former spouse as beneficiary; (2) the insured re-designates
the former spouse as beneficiary after divorce; or (3) the former spouse is designated to
receive the policy proceeds as trustee for a child or dependent of either of the former
spouses. Tex. Fam. Code Ann. § 9.301 (Vernon 2006).
5
The policy provided for payment of its proceeds to the insured’s “widow or
widower” if no designated beneficiary survived him.

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findings of fact and conclusions of law and then additional findings of fact and conclusions

of law.

Appellants raise the single issue on appeal whether Frances was entitled to the

proceeds of the policy through the imposition of a constructive trust or a resulting trust. The

Fort Worth court of appeals recently noted that “[a]lthough they are often confused,

resulting and constructive trusts are distinguishable.” Hubbard v. Shankle, 138 S.W.3d 474,

485 (Tex.App.–Fort Worth 2004, pet. denied). A constructive trust is an equitable remedy

created by courts to prevent unjust enrichment. Id. To justify imposition of a constructive

trust, the proponent must prove (1) breach of a special trust, or fiduciary relationship, or

actual fraud; (2) unjust enrichment of the wrongdoer; and (3) tracing to an identifiable res.

Id. Strict proof of the elements is required. Id. (citing Mowbray v. Avery, 76 S.W.3d 663,

681 n. 27 (Tex. App.–Corpus Christi 2002, pet. denied)).

A resulting trust is an equitable remedy primarily involving consideration. Id. (citing

In re Marriage of Loftis, 40 S.W.3d 160, 165 (Tex.App.–Texarkana 2001, no pet.)). The

doctrine of a resulting trust looks to valuable consideration, not legal title, as the deciding

factor on equitable title or interest from a transaction. Id. When title to property is taken in

the name of someone other than the person who advances the purchase price, a resulting

trust is created in favor of the payor. Nolana Dev. Ass’n v. Corsi, 682 S.W.2d 246, 250

(Tex. 1984). A resulting trust is an “intent trust” employed when trust property had been

used for a special purpose which has terminated or become frustrated so that the law

implies a trust for the equitable owner of the property. Tricentrol Oil Trading, Inc. v.

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Annesley, 809 S.W.2d 218, 220 (Tex. 1991); see also Harris v. Sentry Title Co., Inc., 715

F.2d 941, 946 (5th Cir. 1983), modified on other grounds, 727 F.2d 1368 (5th Cir. 1984) (“A

resulting trust is an actual, binding trust that can develop where the parties intended a

confidential or fiduciary relationship to develop and acted accordingly, but failed to create

a valid actual trust agreement.”) A heavy burden is placed on the party attempting to

establish the existence of a resulting trust. Equitable Trust Co. v. Roland, 721 S.W.2d 530,

533 (Tex.App.–Corpus Christi 1986, writ ref’d n.r.e.); Ratliff v. Clift, 312 S.W.2d 315, 320

(Tex.Civ.App.–Amarillo 1958, writ ref’d n.r.e.).

Both resulting and constructive trusts are implied by operation of law to prevent

unjust enrichment. Hubbard, 138 S.W.3d at 486. Because imposition of either constitutes

an equitable remedy, we review the trial court’s decision under an abuse of discretion

standard. See Gerdes v. Kennamer, 155 S.W.3d 541, 545 (Tex.App.–Corpus Christi 2004,

no pet.) (trial court’s decisions when sitting as court of equity reviewed under abuse of

discretion standard). A court abuses its discretion if it acts without reference to any guiding

rules or principles. Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241 (Tex.

1985). A trial court’s ruling should be reversed only if it was arbitrary or unreasonable. Id.

at 242. Also, because appellants raise no challenge to the trial court’s findings of fact, the

findings are binding unless the contrary is established as a matter of law or there is no

evidence to support the findings. McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex.

1986).

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 Appellants’ brief summarizes their argument, stating, “The evidence clearly

establishes that Delfino Camacho engaged in conduct constituting a breach of a confidential

relationship between he and Frances Camacho arising out of their long term marriage and

friendly, post divorce relationship, the representations of Mr. Camacho which induced

Frances Camacho to pay all premiums on the term policy in dispute to maintain it in effect,

and the breach of his obligation to take whatever steps were necessary to protect the

ownership of the policy and its proceeds in Frances Camacho.”

Texas law recognizes that a relationship on which a constructive trust can be based

may be a formal fiduciary relationship which arises as a matter of law, such as that between

attorney and client, or may be informal, arising from a moral, social, domestic, or purely

personal relationship of trust and confidence. Thigpen v. Locke, 363 S.W.2d 247, 253 (Tex.

1962); Golden v. McNeal, 78 S.W.3d 488, 493 (Tex.App.–Houston [14th Dist.] 2002, pet.

denied).

The formal fiduciary relationship between Frances and Delfino as husband and wife

terminated on their divorce. In re Marriage of Notash, 118 S.W.3d 868, 872

(Tex.App.–Texarkana 2003, no pet.). Delfino did not owe a fiduciary duty to Frances based

on their marital relationship after 1994. Frances testified that, after their divorce, she and

Delfino were “still friends,” and that he often called her on the telephone. As noted, Frances

also testified that, on several occasions during their telephone conversations, Delfino told

her the life insurance policy belonged to her. The trial court found “Delfino Camacho had

knowledge, actual or constructive, that the Insurance Policy was being maintained in effect

6
after the divorce of Delfino Camacho and Frances Camacho, as a result of the premium

payments being paid by Frances Camacho.”

Appellants were required to demonstrate the special relationship of trust and

confidence existed prior to, and apart from, the agreement made the basis of the suit. See

Golden, 78 S.W.3d at 493 (stating the requirements of establishing an informal fiduciary

relationship); see also Thigpen, 363 S.W.2d at 253 (stating the “existence of the fiduciary

relationship is to be determined from the actualities of the relationship between the persons

involved”). After reviewing the entire record, we find that neither Delfino’s knowledge of the

policy nor Frances’s statements demonstrate their relationship following the divorce was

one of trust and confidence. Golden, 78 S.W.3d at 493. The existence of a confidential

relationship is a question of fact. Crim Truck & Tractor Co. v. Navistar Intern. Transp. Corp.,

823 S.W.2d 591, 594 (Tex. 1992). We cannot agree that the evidence established the

existence of a confidential relationship between Frances and Delfino. Tricentrol Oil Trading,

809 S.W.2d at 220; Hubbard, 138 S.W.3d at 485.

Moreover, neither Delfino’s relationship with his former spouse nor his statements

to Frances concerning the policy, assuming they were made, permit the implication that he

had an “obligation” to cause the policy proceeds to be paid to Frances, and the record is

devoid of evidence Delfino expressly undertook such an obligation. The uncertain nature

of Delfino’s alleged obligation distinguishes this case from such cases as Mills v. Gray, 210

S.W.2d 985 (Tex. 1948) and Leigh v. Weiner, 679 S.W.2d 46 (Tex.App.–Houston [14th Dist.]

1984, no pet.). The excluded testimony in Mills concerned an agreement among family

7
members that property conveyed to one of them “would be held by [the grantee] in trust for

the benefit of his mother and the other children, and that after the [anticipated] divorce he

would reconvey it to her, or if sold, he would divide the proceeds among the parties entitled

thereto.” 210 S.W.2d at 986-87. Similarly, in Leigh, the jury found an agreement existed

between the spouses concerning the disposition of certain property on the death of the

survivor of them. 679 S.W.2d at 47. No evidence of such an express agreement appears

here.6

Appellants emphasize the unjust enrichment of Gloria brought about by the trial

court’s ruling. They cite Pope v. Garrett, 211 S.W.2d 559 (Tex. 1948) and Ginther v. Taub,

675 S.W.2d 724 (Tex. 1984) for the proposition that a constructive trust may be imposed

to prevent unjust enrichment of one who would otherwise benefit from the wrongdoing of

another. 7 In Pope, the jury found that when a will the decedent had requested to be

prepared was presented to her, family members physically prevented her from executing

it. 211 S.W.2d at 559-60. Because the will was not executed, the decedent died intestate.

Shares of the estate were thus inherited by family members who took part in the wrongful

conduct and by family members who were not present at the aborted will execution

6
Mills and Leigh are further distinguishable from this case by the family relationships
among the parties to the purported agreement in Mills, 210 S.W.2d at 986, and the
husband-wife relationship in Leigh, 679 S.W.2d at 47.
7
There is no contention that Gloria can be viewed as a wrongdoer. Appellants do
not challenge the trial court’s finding that “Gloria Garcia Camacho committed no fraud,
duress or other wrong doing for the purpose of making her the beneficiary of the policy.”
Gloria testified she did not know that marrying Delfino would bring her any financial
advantage, and there is no evidence to the contrary. The second element required for
imposition of a constructive trust, that of unjust enrichment of the wrongdoer, is not met in
this case. See Hubbard, 138 S.W.3d at 485.

8
ceremony. The supreme court held that imposition of a constructive trust was appropriate

with respect to the shares inherited by the innocent heirs at law, as well as to those

inherited by the wrongdoers. Id. at 562. Here, the trial court did not find that Delfino

breached a duty to Frances or otherwise committed any wrongful act. The absence of

evidence of wrongdoing by Delfino distinguishes the case at bar from Pope. Similarly,

Ginther v. Taub involved fraud committed by a lawyer in breach of his fiduciary duty to his

client. 675 S.W.2d at 727. Neither case provides a basis to establish the trial court abused

its discretion by refusing to impose a constructive trust here.

Finally, and particularly with respect to appellants’ argument for imposition of a

resulting trust, appellants note the case law holding that one of the elements for the

imposition of a resulting trust is payment of the consideration must have occurred at the

time of purchase of the property in question. See Sahagun v. Ibarra, 90 S.W.3d 860, 863-

64 (Tex.App.–San Antonio 2002, no pet.) (stating rule). Appellants argue that because the

policy on Delfino’s life was a term policy maintained in effect only by the timely payment of

monthly premiums, ownership of the policy and its proceeds was purchased each month

as Frances paid the premium. The evidence did not compel the trial court to adopt that

view. Although the policy was a term policy and presumably had no cash value, it was

undisputed the policy was purchased in 1986 and ownership of it was awarded to Delfino

by the 1994 divorce decree. We decline to hold that the trial court abused its discretion by

failing to impose a resulting trust on the policy or its proceeds based on Frances’s later

payment of premiums.

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Accordingly, we overrule appellants’ issue and affirm the judgment of the trial court.

James T. Campbell
Justice

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