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Click here for the full text of this decision FACTS:This case involves a suit by Patricia Wilz on behalf of her incompetent son, Jon Patrick Flournoy, against Kenneth and June Flournoy. A jury found for Patricia and the trial court imposed a constructive trust on the entirety of the Flournoys’ farm. Kenneth and Patricia divorced in 1973, and Kenneth received custody of their son Jon. Kenneth married June the next year. Several years later, Jon suffered incapacitating brain injuries in an automobile accident. Kenneth, individually and as next friend of Jon, sued Ford Motor Co. in federal court. In 1991, the parties entered a settlement agreement, whereby Kenneth received $379,300 on Jon’s behalf and $95,000 individually. Kenneth was named guardian of Jon’s person and estate. During his term as Jon’s guardian, Kenneth purchased Brookshire Grocery Stock and $330,000 in GNMA bonds for Jon’s benefit. In 1991, the Flournoys purchased a farm for $153,049, paying $49,365.50 from Kenneth’s individual settlement and executing a note for the remaining $103,049. The note required monthly payments of $961. Kenneth later sold 500 Brookshire shares, after which a deposit, labeled “stock,” appeared in the Flournoys’ account. Between 1991 and 1999, the Flournoys withdrew several thousand dollars from Jon’s account. By 2001, Jon’s settlement funds were virtually depleted and he became a ward of the state. Patricia sought and received appointment as Jon’s permanent guardian. She then sued the Flournoys for conversion, breach of fiduciary duty and constructive fraud. Alleging that the Flournoys purchased the farm with Jon’s funds, Patricia also sought the imposition of a constructive trust. At trial, Patricia introduced several checks drawn on Jon’s account in the amount of either $960 or $961, which were either cashed or deposited into the Flournoys’ personal account. Patricia questioned the Flournoys regarding these checks and others, altered checks, missing funds, usage of Jon’s funds, the source of funds for the farm purchase, the stock and the GNMA bonds. In response, the Flournoys repeatedly asserted the Fifth Amendment. At the close of evidence, the Flournoys moved for an instructed verdict, arguing that no evidence supported the imposition of a constructive trust. The trial court denied their motion. Because it did not inquire as to the amount of Jon’s funds used to acquire the farm, the Flournoys also objected to Question 5 of the jury charge. The trial court overruled the objection. The jury found: 1. Kenneth breached his fiduciary duty to Jon and committed constructive fraud; and 2. the Flournoys converted Jon’s property, used Jon’s funds to acquire the farm and acted with malice. The trial court denied the Flournoys’ motion for judgment notwithstanding the verdict and imposed a constructive trust on the entire Flournoy farm. HOLDING:Affirmed in part; reversed and rendered in part. The Flournoys contend that Patricia presented no evidence tracing funds from Jon’s account to the Flournoys’ monthly payments on the farm. They argue instead that Patricia merely showed commingling. Certain deposit slips and checks reflected that the Flournoys either cashed or deposited several checks, drawn on Jon’s account, in the monthly mortgage amount. While none of these documents specifically referenced the lien holders or the mortgage, they constituted circumstantial evidence of the Flournoys’ improper usage of Jon’s funds to pay for the farm. “It is simply not coincidental that the amounts of these checks so closely mirrored the monthly mortgage payments.” Patricia’s documentary evidence performed two functions: 1. It showed a history of misuse; and 2. It created a direct trail of funds taken from Jon’s account for the purpose of paying the farm mortgage. In light of this evidence, the court holds that Patricia presented evidence which “would enable reasonable and fair-minded people” to trace funds from Jon’s account to the mortgage payment. In civil cases, a party’s refusal to testify constitutes relevant evidence from which a jury may draw whatever inference is reasonable under the circumstances. “Like the spoliation presumption, where a party refuses to testify and pleads the Fifth Amendment, it is reasonable to presume that the evidence sought to be shielded would be damaging if revealed.” The court holds that the adverse inferences derived from the Flournoys’ testimony did not serve as the sole basis for the judgment, but when coupled with Patricia’s documentary evidence, “would enable reasonable and fair-minded people” to trace funds from Jon’s account to the mortgage payments. Because the Flournoys proved that at least a portion of the purchase price was paid out of Kenneth’s personal funds, the court abused its discretion by imposing a constructive trust on the entire Flournoy farm. Nevertheless, Patricia is still entitled to a constructive trust on part of the farm. Subtracting the amount owed of $50,000 and the down payment of $49,365.50 from the purchase price of $153,049, the most amount that could have been paid with Jon’s funds totals $53,683.50. The court holds that Patricia is entitled to a constructive trust on an undivided 35 percent interest in the farm. OPINION:Reyna, J.; Gray, C.J., Vance and Reyna, J.J. CONCURRENCE AND DISSENT:Gray, C.J. “I concur in the Court’s conclusion that Patricia Wilz met her burden of proof to establish a constructive trust on behalf of her disabled son against his father and stepmother. I dissent from that portion of the opinion wherein the majority re-determines the extent of the constructive trust imposed upon real property purchased with the proceeds from the ward’s estate.”

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