Coterill-Jenkins v. Texas Medical Ass’n, 383 S.W.3d 581 (Tex. App.—Houston [14th Dist.] 2012, pet. denied).

 

Trusts

Creation

A medical group purchased a professional liability policy from an insurer on behalf of a physician.  Shortly thereafter, the physician died and the insurer returned the premiums to the medical group.  The executor contended that the premiums should have been returned to the physician’s estate.  Both the trial and appellate court rejected the claim, especially the assertion that the medical group was the trustee of a trust for the physician’s benefit.  The appellate court explained that merely because the word “trust” is contained in the medical group’s name does not create a trust.  Instead the word was merely descriptive.  In addition, the insurance policy had no language showing that the parties intended to create a trust.

 

Moral:  The court will not turn a contract relationship into a trust relationship merely because the word “trust” is used without evidence that the alleged settlor had trust intent.

 



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