MEMORANDUM OPINION First Tech Federal Credit Union (“First Tech”)[1] appeals from several orders of the probate court, including: the grant of Appellee Patricia Jean Fisher, individually and as independent administrator of the Estate of Shirley Ann Hockenberry’s,[2] summary judgment against First Tech for money had and received based on its acceptance and negotiation of the estate’s insurance check; the denial of First Tech’s cross motion for summary judgment; the grant of the Estate’s Rule 91a motion to dismiss First Tech’s counterclaim; the failure to rule on First Tech’s motion to dismiss Fisher individually; and the grant of summary judgment for Texas Farmer’s Insurance Company (“Farmers”) on First Tech’s cross claim for breach of contract. We reverse in part, affirm in part, and remand. I. Background On January 9, 2011, Shirley Hockenberry {“Shirley”) was shot in her home in Tomball, Texas, by her estranged husband Darren S. Hockenberry. After killing Shirley, Darren spent hours driving to fill ten or more 5-gallon gasoline containers, dropping their dogs in neighbors’ back yards, posting a message on Facebook, disconnecting gas lines, and dousing the entire house and their automobiles with gasoline, before setting the fire to the property and automobiles and committing suicide. The home, its contents, the adjacent buildings, and the automobiles destroyed by the fire were insured by Farmers under a family home policy (“the Policy”). Gretchen Fagan, Shirley’s agent with Farmers, reported the claim to Farmers on January 10, 2011. At the time of Shirley’s death, the Policy did not list First Tech as a lien holder on its declaration page. Farmers obtained the Harris County deed records for the property and confirmed that First Tech was the mortgagee. First Tech’s interest in the property was protected under a loss payable clause in the Policy which states: “[w]e will pay for any covered loss of or damage to buildings or structures to the mortgagee shown on the Declarations or renewal notice as interests appear.” Thereafter, on January 26, 2011, Farmers contacted First Tech and confirmed the mortgage amount. The next day, eighteen days after Shirley’s death, Farmers amended Shirley’s Homeowners Policy and memorialized it in a memorandum: Per our conversation the loss payee info should read: Addison Avenue Federal Credit Union [First Tech] ISAOA P O Box 10302. Palo Alto CA 94303 Loan #: 42665075 Borrower Name: Shirley A Hockenberry Property Address: 29503 Orchard Grove Drive, Tomball TX 77377 The payoff balance through 0212612011 is 303,416.97. I look forward to speaking with you soon. Regards, Gina Souza I Mortgage Servicing Manager On February 22, 2011, forty-four days after the fire, Farmers issued a check co-payable to Addison Avenue Credit Union [First Tech] and Estate of Shirley Hockenberry for $303,416.67 (“Estate Check”). On February 23, 2011, in an initial meeting with Shirley’s sister, Fisher,[3] Farmers hand-delivered the Estate Check to Fisher knowing probate had not been opened and Fisher had not been appointed personal representative of Shirley’s Estate. Unable to act on behalf of her sister or her sister’s estate, and before returning to Alaska, Fisher left the Estate Check in a neighbor’s safe deposit box in Houston. Just prior to the expiration (i.e., six-months after issuance) of the Estate Check, Fisher was instructed to forward the Estate Check to First Tech. In June 2011, following First Tech’s instruction, Fisher asked the Houston neighbor to mail the unsigned Estate Check directly to First Tech. On June 7, 2011, First Tech admitted receiving ” . . a check in the amount of $303,416.97 from Texas Farmers Insurance Company.” Without authority or signature of an estate representative (co-payee), First Tech deposited the Estate Check into a bank account owned by Shirley during her lifetime. First Tech then, outside the probate process, withdrew funds from Shirley’s previously held accounts and made auto and mortgage loan payments to itself. On July 12, 2011, First Tech withdrew over $300,000.00 from Shirley’s bank account (replenished by the Estate Check) and applied the proceeds to the balance due and owing on her mortgage. On October 18, 2011, First Tech filed a “ Release of Lien” in the real property records of Harris County, Texas, which stated that “Holder of Note and Lien acknowledges payment in full of the Note and releases the property from the Lien held by Holder of the Note and Lien, without regard as to how they were created or evidenced.” Shirley died intestate. On January 7, 2013, nearly two years after her murder, and following a complex and protracted heirship determination, Shirley’s Estate was finally established. Fisher was appointed Independent Administrator of Shirley’s Estate. Fisher is one of several heirs at law. On December 6, 2013, the Estate filed this lawsuit against Farmers for the post-death destruction of insured estate assets and the mishandling of post-death claims seeking $796,826.56 in actual damages from Farmers, and alternatively seeking an award of $493,409.89 from Farmers and an award of $303,416.67 from First Tech. The Estate alleged the following claims against Famers and its agents: breach of contract, breach of good faith and fair dealing, violations of the Texas Deceptive Trade Practices Act, violations of the Texas Insurance Code, fraud, and conspiracy. As to First Tech, the Estate alleged claims for conversion and money had and received. All parties filed competing motions for summary judgment. On October 7, 2016, the probate court granted the Estate’s Second Amended Traditional and No Evidence Motion for Summary Judgment against First Tech on the money had and received claim, awarding the Estate $345,022.15 inclusive of past damages and prejudgment interest. The court’s order also denied Farmers and First Tech’s competing summary judgment motions. On March 16, 2017, First Tech filed a cross claim against Farmers asserting its theory that “if Texas Farmers was not authorized to issue the $300,000 Check or if First Tech is required to return the proceeds to Plaintiffs and Loan is not paid or becomes ‘unpaid’ because funds are ‘returned,’ then Farmers failed to fulfill its obligations under the policy and applicable to pay the Loan balance to First Tech, and First Tech is entitled to judgment for all amounts that become ‘unpaid’ under the loan.” On March 20, 2017, First Tech filed a counterclaim against the Estate, substantially similar to its motion for summary judgment, alleging again that it should be allowed to retain estate funds received from Farmers based on its contract and statutory rights against Shirley as they would have existed during her lifetime. Two months later, First Tech filed its amended counterclaim. Farmers filed its motion for summary judgment as to First Tech’s breach of contract cross claim on April 13, 2017. Farmers argued that it had performed its obligations to First Tech under the insurance contract and First Tech had released its lien, terminating any contractual liability between the two parties. In response, First Tech argued that the Estate’s summary judgment “undoes” the application of the insurance proceeds to the outstanding debt. The probate court granted summary judgment in Farmers favor. On May 5, 2017, having settled all remaining claims against Farmers and having no remaining claims against First Tech, the Estate filed a notice of nonsuit with prejudice as to those settled claims. On May 17, 2017, the Estate filed an Amended Rule 91a Motion to Dismiss First Tech’s Counterclaim arguing the counterclaim was precluded by the court’s prior summary judgment order; barred by limitations; barred by the docket control order; and therefore, the Estate was entitled to dismissal. On June 9, 2017, in a collateral attack, First Tech filed its Motion to Dismiss All Claims of Patricia Jean Fisher, Individually for Lack of Standing and Lack of Subject Matter Jurisdiction. Both parties filed replies and responses. The court heard argument at a hearing held on June 19, 2017, and signed an order granting the Estate’s 91a Motion to Dismiss First Tech’s Counterclaim and awarding attorneys’ fees. Although argued at the June 19, 2017 oral hearing, First Tech failed to get a ruling on its motion to dismiss Fisher individually. On September 12, 2017, the probate court entered its Final Judgment, making the prior interlocutory summary judgments in favor of the Estate and Farmers against First Tech appealable. Thereafter, on October 12, 2017, First Tech filed its motion for reconsideration as to the Final Judgment, which was denied by operation of law. This appeal timely followed. II. Analysis A. Summary judgment motions In three of its issues, First Tech challenges the trial court’s order related to summary judgment. Specifically, in its first issue, First Tech argues that the trial court erred in granting summary judgment for the Estate. Next, in its second issue, First Tech maintains the trial court erred in denying First Tech’s motion for summary judgment against the Estate. Further, in its fifth issue, First Tech contends the trial court erred in granting Farmers’ motion for summary judgment against First Tech on its cross claim. 1. Standard of review In a traditional motion for summary judgment, if the movant’s motion and summary-judgment evidence facially establish its right to judgment as a matter of law, the burden shifts to the nonmovant to raise a genuine, material fact issue sufficient to defeat summary judgment. M.D. Anderson Hosp. & Tumor Inst. v. Willrich, 28 S.W.3d 22, 23 (Tex. 2000). In our de novo review of a trial court’s summary judgment, we consider all the evidence in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could and disregarding contrary evidence unless reasonable jurors could not. Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 582 (Tex. 2006). The evidence raises a genuine issue of fact if reasonable and fair-minded jurors could differ in their conclusions in light of all of the summary-judgment evidence. Goodyear Tire & Rubber Co. v. Mayes, 236 S.W.3d 754, 755 (Tex. 2007). When, as in this case, the order granting summary judgment does not specify the grounds upon which the trial court relied, we must affirm the summary judgment if any of the independent summary-judgment grounds are meritorious. FM Props. Operating Co. v. City of Austin, 22 S.W.3d 868, 872 (Tex. 2000). 2. Whether the trial court erred in granting summary judgment for the Estate’s money had and received claim? In its first issue, First Tech contends that the trial court erred in granting summary judgment for the Estate because they failed to meet their burden of proof on money had and received claim. The Estate maintains that they conclusively proved that First Tech improperly held Farmers proceeds from the Estate’s first party insurance claim that the Estate had the right and duty to collect. Establishment of claim for money had and received Money had and received is an equitable claim that seeks to prevent unjust enrichment when one person obtains money that in equity and good conscience belongs to another. Staats v. Miller, 150 Tex. 581, 243 S.W.2d 686, 687 (1951). The action does not require a showing of wrongdoing, but rather looks only to the justice of the case and inquires whether the defendant has received money that rightfully belongs to another. H.E.B., L.L.C. v. Ardinger, 369 S.W.3d 496, 507 (Tex. App.—Fort Worth 2012, no pet.). To prove the claim, a plaintiff must show that a defendant holds money which in equity and good conscience belongs to him. See Best Buy Co. v. Barrera, 248 S.W.3d 160, 162-63 (Tex. 2007) (per curiam). A defendant may present any facts or raise any defenses that would deny a claimant’s right to recover under this theory. Id. Insurance policies An insurance policy is a contract that is governed by the same rules of construction that apply to other contracts. RSUIIndem. Co. v. The Lynd Co., 466 S.W.3d 113, 118 (Tex. 2015). The primary concern in interpreting a contract is to determine the true intent of the parties. Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. CBIIndus., Inc., 907 S.W.2d 517, 520 (Tex. 1995). Whether an insurance contract is ambiguous is a question of law. State Farm Lloyds v. Page, 315 S.W.3d 525, 527 (Tex. 2010). If a policy provision has only one reasonable interpretation, it is unambiguous, and we must construe it as matter of law. Fiess v. State Farm Lloyds, 202 S.W.3d 744, 746 (Tex. 2006). If the agreement is susceptible to more than one reasonable interpretation, the agreement is ambiguous. Page, 315 S.W.3d at 527. Parties’ conflicting interpretations alone do not establish ambiguity. Id. c. Post-death insurance claim Under the Texas Estate Code, when an individual passes away an estate is created. The estate is distinct from the individual. Nguyen v. Morales, 962 S.W.2d 93, 95 (Tex. App.—Houston [1st Dist.] 1997, no pet.). Upon a person’s death, title to the decedent’s property vests immediately in the decedent’s heirs or devisees. See Tex. Est. Code § 101.001(a)(1) (formerly codified as Tex. Prob. Code § 37); see also Tex. Est. Code § 101.001(b), § .051(b)(1) (together stating that the estate of a person who dies intestate vests immediately in the person’s heirs subject to payment for the decedent’s debts), § 355.109 (stating that “property not disposed of by will, but passing by intestacy” is liable for debts and expenses of administration); Meekins v. Wisnoski, 404 S.W.3d 690, 698 (Tex. App.—Houston [14th Dist.] 2013, no pet.) (“The administrator of the estate holds legal title and a superior right to possess estate property and to dispose of it as necessary to pay the debts of the estate.”). At same time, the decedent’s estate vests subject to the payment of the debts of the decedent, unless those debts are otherwise exempted by law. Id. at § 101.051(a)(1). The Estates Code strikes something of a balance to protect both the beneficiaries under the will and the creditors of the decedent. Upon the issuance of letters testamentary or upon the administration of an estate, “the executor or administrator has the right to possession of the estate” as it existed on the date of the testator’s death. Tex. Est. Code § 101.003. d. Application i. First Tech improperly received Shirley’s estate funds from Farmers The Farmers insurance policy and any resulting claims or proceeds are assets of the Estate. First Tech does not contest that Shirley died hours before the fire that resulted in the total loss of the real and personal property of her estate. At Shirley’s death, title to Shirley’s assets vested in her heirs, as did the Farmers’ policy and any proceeds from the policy. See Tex. Est. Code § 101.001. In addition, under the terms of the Farmers policy, under the clause “assignment and death,” the Estate owns the insurance policy upon the death of the insured. Next, the undisputed summary judgment evidence demonstrates that on February 23, 2011, Farmers hand-delivered to Fisher a check co-payable between Shirley’s Estate and Shirley’s mortgagee, First Tech. As set forth, supra, Fisher, unable to act on behalf of the estate and before returning to her home in Alaska, left the check in a neighbor’s safety deposit box in Houston. Shortly before the six-month expiration of the Estate Check, Fisher was instructed to forward the Estate Check to First Tech. Fisher asked the Houston neighbor to mail the unsigned Estate Check directly to First Tech. First Tech, without authority or signature of an estate representative (copayee), deposited the Estate Check into an account previously owned by Shirley (individually) prior to her death. First Tech then repeatedly withdrew funds from accounts owned by Shirly prior to her death (replenished by Estate funds) to make auto and mortgage payments to themselves. Thereafter, First Tech withdrew more than $300,000.00 from Shirley’s accounts to pay off the First Tech mortgage and auto loan in Shirley’s name only. ii. First Tech improperly negotiated Shirley’s estate insurance funds Shirley’s estate was not established, and a representative was not appointed until January 7, 2013. First Tech was not entitled to enforce or negotiate the Estate Check in 2011 without a signature of the copayee—the Estate of Shirley Hockenberry by its duly appointed personal representative. See McAllen Hosps., L.P. v. State Farm Cty. Mutual Ins. Co., 433 S.W.3d 535, 538-39 (Tex. 2014) (discussing when a draft is issued to nonalternative copayees, the UCC provides that one copayee acting alone is not entitled to enforce, and may not discharge, the instrument); see Tex. Bus. & Com. Code § 3.110(d) & cmt. 4. Likewise, Farmers was not relieved of its obligation to the Estate of Shirley Hockenberry simply by issuing the Estate Check. See McAllen Hosps., L.P., 433 S.W.3d at 540 (” . . . payment to one nonalternative copayee without the endorsement of the other is not payment to a ‘holder,’ [and] it does not discharge the drawer of either his liability on the instrument or his underlying obligation.”). Because the Estate was not opened until January 7, 2013, the probate court correctly found that First Tech improperly negotiated the Estate Check in 2011 as a matter of law. The Estate has failed to show unjust enrichment Despite First Tech improperly engaging in self-help prior to an administrator for the estate being appointed, summary judgment in the Estate’s favor on this cause of action—i.e., money had and received—was not appropriate because the Estate failed to show unjust enrichment. It is undisputed that First Tech provided a benefit to the Estate by releasing the lien on the property. The Estate has never argued that the First Tech lien was invalid or that First Tech is not entitled to be paid out of the insurance proceeds. Moreover, the Estate has not shown that any other secured creditor was entitled to be paid that money, or that any creditors were making claims against the Estate which would subject the proceeds of the Estate to claims. Further, the Estate never proved that the money belonged only to the Estate. Rather, the Estate only proved that the money should have been administered through the probate proceedings. Although it is highly improper for First Tech to have engaged in self-help, the cause of action asserted by the Estate is a cause of action based in equity, the purpose of which is to “to restore money where equity and good conscience require restitution.” See Edwards v. Mid-Continent Office Distributors, L.P., 252 S.W.3d 833, 837 (Tex. App.—Dallas 2008, pet. denied). The claim is not premised on wrongdoing, but seeks to determine to which party, in equity, justice, and law, the money belongs. See id. (citing Staats, 243 S.W.2d at 687). It seeks to prevent unconscionable loss to the payor and unjust enrichment to the payee. Id. (citing Bryan v. Citizens Nat’l Bank in Abilene, 628 S.W.2d 761, 763 (Tex. 1982)). “As these broad and general descriptions demonstrate, a cause of action for money had and received is ‘less restricted and fettered by technical rules and formalities than any other form of action. It aims at the abstract justice of the case, and looks solely to the inquiry, whether the defendant holds money, which . . . belongs to the plaintiff.’” Id. (quoting Staats, 243 S.W.2d at 687-88 (internal quotations and citations omitted)). If the Estate wants the money returned to the estate, then the release of lien must be voided, and the parties put back into the position they were in before the check was deposited. See Pearce v Stokes, 291 S.W. 2d 309, 312 (Tex. 1956) (voiding a sale that took place before an estate was established). By granting summary judgment in favor of the Estate and ordering First Tech to repay the Estate, the trial court did not promote equity, but created a windfall for the Estate. First Tech’s first issue is sustained. Whether the trial court erred in denying First Tech’s Second Amended Traditional and No-Evidence Motion for Summary Judgment on the Estate’s money had and received claim? In its second issue, First Tech maintains the trial court erred in denying its no evidence summary judgment on the Estate’s money had and received claim. First Tech contends that the Estate could not adduce evidence that the money belongs to the Estate in equity and good conscience. As set forth above, we agree. Although the Estate Check was improperly negotiated, First Tech’s no-evidence motion for summary judgment on this claim should have been granted. First Tech also moved for traditional summary judgment that it had the superior right to the insurance proceeds and that it did nothing improper in cashing the insurance check. As set forth above, we disagree. First Tech should not have negotiated the check outside of the Estate. See McAllen Hosps., L.P. v. State Farm Cty. Mutual Ins. Co., 433 S.W.3d 535, 538-39 (Tex. 2014). As such, the trial court correctly denied the Traditional Motion for Summary Judgment. First Tech’s second issue is sustained in part and overruled in part. Whether the trial court erred in granting Farmers motion for summary judgment against First Tech on its cross claim? In its fifth issue, First Tech claims the trial court erred in granting Farmers’ Motion for Summary Judgment against First Tech on its cross claim. First Tech asserts in its cross claim as follows: . . . if Texas Farmers was not authorized to issue the $300,000 Check or if First Tech is required to return the proceeds to Plaintiffs and Loan is not paid or becomes “unpaid” because funds are “returned,” then Farmers failed to fulfill its obligations under the policy and applicable to pay the Loan balance to First Tech, and First Tech is entitled to judgment for all amounts that become “unpaid” under the Loan. In its cross claim, First Tech asserts that Farmers breached its contractual obligations under the insurance policy. First Tech contends that Farmers’ payment should be “unwound” because the effect of the interlocutory summary judgment was that First Tech’s home equity loan was not satisfied nor was Farmers’ legal obligations to pay First Tech’s lien met. Farmers contends that the trial court correctly granted summary judgment because it performed its obligations to First Tech and there was no breach of contract. “The elements of a breach-of-contract action are (1) the existence of a valid contract, (2) performance or tendered performance by the plaintiff, (3) breach of the contract by the defendant, and (4) damages sustained by the plaintiff as a result of the breach.” See Mays v. Pierce, 203 S.W.3d 564, 575 (Tex. App.—Houston [14th Dist.] 2006, pet. denied). “A breach occurs when a party fails or refuses to do something he has promised to do.” See id. The first element of a breach of contract claim is to establish the existence of a valid, enforceable contract between the parties. See Mays, 203 S.W.3d at 575. Here, First Tech’s interest in the property was protected under a loss payable clause in the Policy, which stated: “[w]e will pay for any covered loss of or damage to buildings or structures to the mortgagee shown on the Declarations or renewal notice as interests appear.” The evidence demonstrates that Farmers issued full payment on February 22, 2011, in the amount of $303,416.97 payable to the mortgagee, First Tech, and the Estate of Shirley Hockenberry. On June 7, 2011, First Tech accepted the payment check, and applied the proceeds to the outstanding mortgage balance on July 12, 2011. First Tech acknowledged satisfaction of the mortgagor’s indebtedness by filing on October 18, 2011, a Release of Lien for the property over which it held a security interest. The Release of Lien stated: “Holder of Note and Lien acknowledges payment in full of the Note and releases the property from the Lien held by Holder of the Note and Lien, without regard as to how they were created or evidenced.” This extinguished the only contractual obligation between Farmers and First Tech. Because First Tech failed to show a genuine issue of material fact existed as to whether or not Farmers breached its contractual obligations under the insurance policy, the probate court did not err in granting Farmers summary judgment on First Tech’s cross claim. First Tech’s fifth issue is overruled. Whether First Tech waived its challenge to appeal regarding its motion to dismiss for lack of jurisdiction as to Fisher individually? In its third issue, First Tech contends the probate court erred by not ruling on First Tech’s motion to dismiss Fisher for lack of standing. Because we are remanding this case for additional proceedings, we need not address the merits of this claim as the trial court will be able to resolve whether Fisher, individually, has proper standing and whether the live pleadings sets forth separate claims on behalf of Fisher. First Tech’s third issue is sustained. Rule 91a motion to dismiss In its fourth issue, First Tech asserts the trial court erred in granting the Estate’s Rule 91a motion to dismiss First Tech’s counterclaim. 1. Standard of review Dismissal of a cause of action is appropriate under Rule 91a on the grounds that it has no basis in law or fact. Tex. R. Civ. P. 91a. A cause of action has no basis in law if the allegations taken as true, together with inferences reasonably drawn from them, do not entitle the claimant to the relief sought. Id. A cause of action has no basis in fact if no reasonable person could believe the facts pleaded. Id. We review de novo whether a cause of action has any basis in law or in fact. Wooley v. Schaffer, 447 S.W.3d 71, 75 (Tex. App.—Houston [14th Dist.] 2014, pet. denied). We base our review on the allegations of the live petition and also consider any attachments thereto. Id. In conducting our review, we must construe the pleadings liberally in favor of the plaintiff, look to the pleader’s intent, and accept as true the factual allegations in the pleadings to determine whether the cause of action has a basis in law or fact. Weizhong Zheng v. Vacation Network, Inc., 468 S.W.3d 180, 183-84 (Tex. App.—Houston [14th Dist.] 2015, pet. denied). We apply the fair-notice pleading standard to determine whether the allegations of the petition are sufficient to allege a cause of action. Id. 2. Whether the trial court erred in granting the Estate’s Rule 91a motion to dismiss First Tech’s counterclaim? In its brief, First Tech asserts that in its counterclaim it sued the Estate to enforce its contractual and legal liens against insurance proceeds from a fire which destroyed First Tech’s collateral. As set forth, supra, we conclude summary judgment on the Estate’s money had and received claim was not appropriate because there was no unjust enrichment. To the extent the probate court dismissed First Tech’s counterclaim based on its earlier rulings, which we have concluded were wrong, the probate court also erred in granting the Estate’s 91a motion. If the Estate wants the money returned to the Estate, then the release of lien must be voided, and the parties put back into the position they were in before the Estate Check was deposited. See Pearce, 291 S.W. 2d at 312. Otherwise, the Estate receives a windfall. First Tech’s fourth issue is sustained. III. Conclusion The order granting the Estate’s Motion for Summary Judgment on its money had and received claim is reversed. The order denying First Tech’s No-evidence Motion for Summary Judgment on the Estates’ money had and received claim is reversed. The order denying First Tech’s Traditional Motion for Summary Judgment that it had a superior right to the Estate Check is affirmed. The order granting the Estate’s Rule 91a motion on First Tech’s counterclaim is reversed. The order granting Farmers’ summary judgment against First Tech is affirmed. The failure to rule on First Tech’s Motion to Dismiss Fisher, individually, can be resolved on remand. The final judgment of the trial court is reversed in part, affirmed in part, and remanded to the probate court for proceedings consistent with this opinion. /s/ Margaret “Meg” Poissant Justice Panel consists of Justices Christopher, Hassan, and Poissant.
