PROBATE LAW
FALL 2009
Pollard v. Pollard, W.L. 793850;
LEXIS 2112, (Tex. App.Dallas 2009)
Final Appealable Order in Probate
Matter: Rupert filed an ancillary lawsuit in the
probate proceeding after the independent executor rejected his unsecured claims. The Independent Executor filed an answer,
counterclaim for conversion of estate assets, and special exceptions to
Rupert’s petition. The trial court
granted the special exceptions and ordered Rupert to replead but he failed to
amend his pleadings by the deadline so the trial court dismissed his claims
with prejudice. Almost two years later
Rupert filed a motion to vacate the dismissal order, the trial court denied the
motion, and he appealed. The Court
analyzed whether Rupert properly filed his appeal based on a final appealable
order, and the Court concluded that the independent executor’s counterclaim was
also part of the phrase of Rupert’s proceeding involving his dismissed claims
so the dismissal order was not a final appealable order. In addition, Rupert’s motion to vacate the
dismissal order remained interlocutory. Held:
Dismissed for lack of jurisdiction.
Nipp v. Broumley, W.L. 875537;
LEXIS 2352 (Tex. App.Waco 2009)
Multi-Party Accounts: Walterine
purchased three CDs payable to herself or her son Terry. Walterine renewed the CDs each time they
matured, and Terry used them as collateral on occasion. Walterine was diagnosed with inoperable
cancer and Terry cashed in the CDs worth approximately $76,000 eight days
before she died. Walterine’s daughter
Connie learned about the CDs shortly before Walterine died, and Connie filed
suit when the CDs were not listed in the inventory of the estate assets. Connie sought a declaration that the CDs were
estate assets and an order requiring Terry to reimburse the estate for the
value of the CDs. The trial court held
that Terry jointly owned the CDs with Walterine so he had the right to cash the
CDs and the CDs were not estate assets, and ordered Terry to pay a small
portion of Connie’s attorney’s fees. The
Court analyzed the multi-party account rules under Texas Probate Code §§ 436, 437,
438, 444, and 445, and reasoned that beneficial ownership of the funds on deposit
was determined by the application of Texas Probate Code § 438 and this was
different than a right of withdrawal. It
was undisputed that Walterine was the only source of the funds; therefore, the
Court reasoned she retained beneficial ownership of the funds under Texas
Probate Code § 438(a) at the time of Terry’s withdrawal absent clear and
convincing evidence to the contrary.
Terry argued that the CDs were given to him by Walterine, and the Court
analyzed the requirements of a gift and found that based on the facts no gift
was made by Walterine and she retained control over the CDs until Terry
withdrew the funds. The Court noted that
a bank officer testified that the CDs were joint accounts with right of survivorship,
but the record did not include a written agreement between Walterine and the
bank and a written agreement was required by Texas Probate Code § 439(a). Held: Reversed and rendered judgment
that the CDs were Walterine’s property at the time of her death and were estate
assets, and reversed and remanded regarding attorney’s fees.
Kappus v. Kappus, W.L. 1383716;
LEXIS 296 (Tex. 2009)
Independent Executor Conflict of
Interest and Removal: James, John, and their father formed a
partnership in the 1980s which purchased land in Anderson County. In 1991, James married Sandra and they had
two children. Their father died in 2001
which led to the unofficial dissolving of the partnership, and after their
father’s will was probated James and John owned the property in equal shares as
co-tenants. Several improvements were
added to the property while they owned the land, some by James, some by James
and Sandra and some by John. In 2004,
James and Sandra divorced. After the
divorce was final, James executed a new will that named John as independent
executor. James died in 2005 after a
long illness. John initiated probate
proceedings and qualified as independent executor. John listed the property for sale with the
improvements and intended to split the proceeds equally between the estate and himself. Sandra, on
behalf of her children, opposed the proposed distribution from the property
sale and argued that the estate was owed more than 50% of the proceeds due to
several improvements James made to the property. Sandra also sought to remove John as
independent executor and trustee of the testamentary trust and she alleged that
John had a conflict of interest, wasted estate assets, refused to allow the
children access to the property and incurred significant expenses in probating
the will. The trial court refused to
remove John and found that the property should be divided 58.59% for the estate
and 41.41% for John. Held: Affirmed the trial court’s
division of the property but reversed the trial court’s decision on removal
citing Texas Probate Code § 149C(5). The Supreme Court reasoned that a good faith
disagreement over the executor’s ownership share in the estate was not enough
standing alone to require removal under Texas Probate Code § 149C. The Supreme Court reasoned that there may be
scenarios where an executor’s conflict of interest was so absolute as to
constitute what the statute terms “gross misconduct” or “gross mismanagement”
and the trial court should take into consideration several factors, including
the size of the estate, the degree of actual harm to the estate, the executor’s
good faith in asserting a claim for estate property, the testator’s knowledge
of the conflict, and the executor’s disclosure of the conflict. The Supreme Court analyzed the factors and
determined that they fell in John’s favor since the estate was small, there was
no actual harm to the estate since the trial court resolved the percentage of
ownership issue, John asserted his claim in good faith, and James knew his
brother’s co-ownership of the estate property might later cause allocation or
valuation issues when he named John independent executor. As a result, the Court held that the trial
court did not abuse its discretion in failing to remove John as independent
executor.
In re Jones, W.L. 1240106;
LEXIS 3128 (Tex. App.Dallas 2009)
Challenge based on Texas Probate Code
Section 93: Doris executed a will on March 6, 2004 and
she died approximately six months later.
Her husband filed an application to probate her will as a muniment of
title and on December 13, 2004 the trial court entered an order granting her
husband’s application. On November 29,
2006,
In re Lesikar, W.L. 1312099;
LEXIS 3221 (Tex. App.Houston [14th
Dist.] 2009)
Attorneys’ Fees and Right to Jury
Trial: Carolyn and Woody’s father established a family trust,
and this case has been in litigation for a number of years. The issues presented on this appeal are: Woody’s request for mandamus relief requiring
the trial court to place Carolyn’s claim for attorney’s fees on the jury trial
docket and to compel Carolyn to provide additional responses to discovery, and
whether Woody is entitled to a jury trial on the issue of attorneys’ fees. The Court analyzed the fee segregation rule
and reasoned that courts determine as a matter of law whether a party who prevails
on a particular cause of action has the opportunity to recover reasonable
attorney’s fees that were necessary for the litigation of that claim. As to the jury trial issue, the Court
reasoned that it need not decide whether Woody waived his right to a jury in the
first trial because waiver of a jury in one trial did not affect either party’s
right to demand a jury in the second trial after remand where the demanding
party had complied with Rule 216. The
Court conditionally granted Woody’s petition for writ a mandamus as it
pertained to reinstatement of the case on the jury docket, and held that Woody
had not shown his entitlement to mandamus relief directing the trial court to
compel more complete responses to discovery by Carolyn. Held:
Woody’s petition for writ of mandamus was conditionally granted in part and
denied in part.
Ditta v. Conte, W.L. 1566989;
LEXIS 319 (Tex. 2009)
No Statute of Limitations Period
Restricts a Court’s Discretion to Remove a Trustee: Joseph
and Doris created an intervivos trust. Upon Joseph’s death in 1993,