ACCEPTED
01-15-00193-CV
FIRST COURT OF APPEALS
HOUSTON, TEXAS
7/8/2015 3:32:00 PM
CHRISTOPHER PRINE
CLERK
No. 01-15-00193-CV
FILED IN
IN THE COURT OF APPEALS 1st COURT OF APPEALS
FOR THE FIRST DISTRICT OF TEXAS HOUSTON, TEXAS
7/8/2015 3:32:00 PM
AT HOUSTON
CHRISTOPHER A. PRINE
Clerk
JOHN LAWTON,
Appellant,
v.
DAVID W. LAWTON,
Appellee.
On Appeal from the County Court at Law No. 1, Fort Bend County, Texas,
Trial Court Cause No. 14-CCV-053769
BRIEF OF APPELLANT
ANDERSON PFEIFFER, PC BECK REDDEN LLP
Esther Anderson Constance H. Pfeiffer
State Bar No. 00792332 State Bar No. 24046627
esther@probateguardianship.com cpfeiffer@beckredden.com
845 FM 517 West, Suite 200 William Peterson
Dickinson, TX 77539 State Bar No. 24065901
(281) 488-6535 wpeterson@beckredden.com
(281) 614-5205 (Fax) 1221 McKinney, Suite 4500
Houston, TX 77010
(713) 951-3700
(713) 951-3720 (Fax)
COUNSEL FOR APPELLANT JOHN LAWTON
Oral Argument Requested
IDENTITY OF PARTIES AND COUNSEL
Appellant: John Lawton
Appellate Counsel for Appellant: Constance H. Pfeiffer
William R. Peterson
BECK REDDEN LLP
1221 McKinney Street, Suite 4500
Houston, TX 77010
(713) 951-3700
(713) 951-3720 (Fax)
Esther Anderson
ANDERSON PFEIFFER, P.C.
845 FM 517 West, Suite 200
Dickinson, TX 77539
(281) 488-6535
(281) 614-5205 (Fax)
Trial Counsel for Appellant: Esther Anderson
ANDERSON PFEIFFER, P.C.
845 FM 517 West, Suite 200
Dickinson, TX 77539
(281) 488-6535
(281) 614-5205 (Fax)
Appellee: David W. Lawton
Counsel for Appellee: N. Kimberly Hoesl
J. B. (Trey) Henderson III
DOYLE, RESTREPO, HARVIN
& ROBBINS, L.L.P.
440 Louisiana Street, Suite 2300
Houston, TX 77002
(713) 228-5100
(713) 228-6138 (Fax)
Trial Court: County Court at Law No. 1 of Fort Bend
County, Texas
Hon. Ben W. “Bud” Childers, Presiding
TABLE OF CONTENTS
PAGE
Identity of Parties and Counsel ...................................................................................i
Table of Contents ...................................................................................................... ii
Index of Authorities ................................................................................................... v
Statement of the Case................................................................................................. x
Statement Regarding Oral Argument .......................................................................xi
Issues Presented ...................................................................................................... xii
Introduction ................................................................................................................ 1
Statement of Facts ...................................................................................................... 2
Standard of Review .................................................................................................. 12
Summary of the Argument....................................................................................... 13
Argument.................................................................................................................. 15
I. Closing the Estate Administration Did Not Have the Effect
of Claim Preclusion. ............................................................................ 15
A. The trial court’s order overruling John’s objections to
closing the estate does not have the effect of claim
preclusion. ................................................................................. 16
1. Under the plain text of the Estates Code,
closing an independent estate does not relieve
the independent executor from liability. ......................... 17
2. Closing the independent estate administration
was “purely administrative” and not a final
judgment on any merits. ................................................. 19
ii
3. Res judicata cannot apply because no “claims”
were filed in the Estate Administration Cause. .............. 22
4. Because John’s current claims were not
compulsory counterclaims in the Estate
Administration Cause, res judicata does not
preclude them.................................................................. 23
B. Res judicata does not apply because John’s previous
claims were separated from the Estate Administration
Cause. ........................................................................................ 27
C. David’s arguments are unavailing. ........................................... 28
1. David’s res judicata argument rested on the
false premise that John filed claims in the
Estate Administration Cause. ......................................... 28
2. David’s arguments concerning the power of
attorney accounting are unavailing. ................................ 30
II. The Trial Court Erred in Awarding Attorney’s Fees. ......................... 31
A. John’s declaratory judgment was merely incidental to
his other claims and not a legal basis for attorney’s
fees. ........................................................................................... 32
B. The trial court erroneously denied John a jury
determination of whether David’s fees were
“reasonable and necessary.”...................................................... 35
C. David’s Application for Fees never argued—and the
trial court never found—that the award of fees was
“equitable and just.” .................................................................. 37
Conclusion and Prayer ............................................................................................. 39
Certificate of Service ............................................................................................... 41
Certificate of Compliance ........................................................................................ 42
iii
APPENDIX TABS
Final Judgment.........................................................................................Tab A
Order Overruling Objections to Closing Affidavit in
Cause No. 09-CPR-021945 ..................................................................... Tab B
Opinion and Mandate of the First Court of Appeals,
No. 01-12-00932-CV ............................................................................... Tab C
iv
INDEX OF AUTHORITIES
CASE PAGE(S)
Alcorn v. Vaksman,
877 S.W.2d 390 (Tex. App.—Houston
[1st Dist.] 1994, writ denied) .............................................................................. 15
American Tobacco Co. v. Grinnell,
951 S.W.2d 420 (Tex. 1997) .............................................................................. 12
AmeriPath, Inc. v. Hebert,
447 S.W.3d 319 (Tex. App.—Dallas
2014, pet. denied)................................................................................................ 31
Amstadt v. U.S. Brass Corp.,
919 S.W.2d 644 (Tex. 1996) .............................................................................. 15
Barr v. Resolution Trust Corp.,
837 S.W.2d 627 (Tex. 1992) ........................................................................15, 22
Barshop v. Medina County Underground Water Conservation Dist.,
925 S.W.2d 618 (Tex. 1996) .............................................................................. 31
Bocquet v. Herring,
972 S.W.2d 19 (Tex. 1998)...........................................................................36, 37
Bowers v. Taylor,
263 S.W.3d 260 (Tex. App.—Houston
[1st Dist.] 2007, no pet.) ..................................................................................... 31
Burke v. Satterfield,
525 S.W.2d 950 (Tex. 1975) ..................................................................20, 24, 25
C/S Solutions, Inc. v. Energy Maint. Services Group LLC,
274 S.W.3d 299 (Tex. App.—Houston
[1st Dist.] 2008, no pet.) ..................................................................................... 18
Chandler v. Welborn,
294 S.W.2d 801 (Tex. 1956) .......................................................................... 4, 26
v
City of Houston v. Soriano,
No. 14-05-00161-CV, 2006 WL 2506388
(Tex. App.—Houston [14th Dist.]
Aug. 29, 2006, pet. denied)................................................................................. 38
Danciger Oil & Ref. Co. of Texas v. R.R. Comm’n of Texas,
122 Tex. 243 (1933).............................................................................................. 9
De Ayala v. Mackie,
193 S.W.3d 575 (Tex. 2006) ................................................................................ 3
Devon Energy Prod. Co., L.P. v. KCS Res., LLC,
450 S.W.3d 203 (Tex. App.—Houston
[14th Dist.] 2014, pet. denied) ......................................................................34, 35
In re Estate of Canales,
837 S.W.2d 662 (Tex. App.—San Antonio
1992, no writ) ...................................................................................................... 20
Etan Indus., Inc. v. Lehmann,
359 S.W.3d 620 (Tex. 2011) ........................................................................14, 32
Ford Motor Co. v. Chacon,
370 S.W.3d 359 (Tex. 2012) .............................................................................. 38
Garcia v. Shell Oil Co.,
355 S.W.3d 768 (Tex. App.—Houston
[1st Dist.] 2011, no pet.) ..................................................................................... 12
Hageman/Fritz, Byrne, Head & Harrison, L.L.P. v. Luth,
150 S.W.3d 617 (Tex. App.—Austin
2004, no pet.) ...................................................................................................... 32
Hartford Cas. Ins. Co. v. Budget Rent-A-Car Sys., Inc.,
796 S.W.2d 763 (Tex. App.—Dallas
1990, writ denied) ............................................................................................... 33
Heckman v. Williamson County,
369 S.W.3d 137 (Tex. 2012) ................................................................................ 7
vi
Henderson v. Shanks,
449 S.W.3d 834 (Tex. App.—Houston
[14th Dist.] 2014, pet. denied),
petition for cert. filed ............................................................................................ 3
Houtex Ready Mix Concrete & Materials v. Eagle Const. & Envtl.
Services, L.P.,
226 S.W.3d 514 (Tex. App.—Houston
[1st Dist.] 2006, no pet.) ..................................................................................... 15
Ingersoll-Rand Co. v. Valero Energy Corp.,
997 S.W.2d 203 (Tex. 1999) ........................................................................23, 24
Jackson v. State Office of Admin. Hearings,
351 S.W.3d 290 (Tex. 2011) .............................................................................. 32
John G. & Marie Stella Kenedy Mem’l Found. v. Dewhurst,
90 S.W.3d 268 (Tex. 2002)................................................................................. 32
Kenneth Leventhal & Co. v. Reeves,
978 S.W.2d 253 (Tex. App.—Houston
[14th Dist.] 1998, no pet.) .............................................................................34, 35
Knighton v. Int’l Bus. Machines Corp.,
856 S.W.2d 206 (Tex. App.—Houston
[1st Dist.] 1993, writ denied) .............................................................................. 33
Marshall v. Hous. Auth. of City of San Antonio,
198 S.W.3d 782 (Tex. 2006) ................................................................................ 9
Mayhew v. Dealey,
143 S.W.3d 356 (Tex. App.—Dallas
2004, pet. denied)................................................................................................ 26
McConnell v. Southside Indep. Sch. Dist.,
858 S.W.2d 337 (Tex. 1993) ..................................................................12, 23, 37
Mower v. Boyer,
811 S.W.2d 560 (Tex. 1991) .............................................................................. 21
Nall v. Plunkett,
404 S.W.3d 552 (Tex. 2013) .............................................................................. 12
vii
Nixon v. Mr. Property Management Co.,
690 S.W.2d 546 (Tex. 1985) .............................................................................. 12
Petrello v. Prucka,
415 S.W.3d 420 (Tex. App.—Houston
[1st Dist.] 2013, no pet.) ..................................................................................... 36
Rhone Poulenc, Inc. v. Steel,
997 S.W.2d 217 (Tex. 1999) .............................................................................. 12
Scurlock Oil Co. v. Smithwick,
724 S.W.2d 1 (Tex. 1986)................................................................................... 15
In re Serv. Corp. Intern.,
355 S.W.3d 655 (Tex. 2011) .............................................................................. 38
Standlee v. Buechler,
No. 05-92-00466-CV, 1993 WL 155875
(Tex. App.—Dallas May 14, 1993, no writ) ...................................................... 21
Sw. Guar. Trust Co. v. Hardy Rd. 13.4 Joint Venture,
981 S.W.2d 951 (Tex. App.—Houston
[1st Dist.] 1998, pet. denied)............................................................................... 32
Trevino v. American Nat’l Ins. Co.,
168 S.W.2d 656 (Tex. 1943) .............................................................................. 36
Universal Printing Co. v. Premier Victorian Homes, Inc.,
73 S.W.3d 283 (Tex. App.—Houston
[1st Dist.] 2001, pet. denied)............................................................................... 33
Van Dyke v. Boswell, O’Toole, Davis & Pickering,
697 S.W.2d 381 (Tex. 1985) ............................................................13, 16, 27, 28
WaiWai, LLC v. Alvarado,
No. 03-13-00540-CV, 2014 WL 6844934
(Tex. App.—Austin Nov. 26, 2014, no pet.) ...................................................... 31
Whiteside v. Griffis & Griffis, P.C.,
902 S.W.2d 739 (Tex. App.—Austin
1995, writ denied) ............................................................................................... 34
viii
RULES & STATUTES
TEX. CIV. PRAC. & REM. CODE § 37.009 ............................................................14, 37
TEX. ESTATES CODE
§ 256.052............................................................................................................... 2
§ 32.001............................................................................................................... 21
§ 32.001(d) ............................................................................................................ 3
§ 405.003(a) ........................................................................................................ 18
§ 405.005............................................................................................................. 20
§ 405.007(b) .................................................................................................passim
TEX. PROB. CODE
§ 149C(a)(2) .......................................................................................................... 4
§ 149C(a)(3) .......................................................................................................... 4
§ 149E ................................................................................................................. 18
§ 151(a) .....................................................................................................6, 19, 20
§ 151(b) .....................................................................................................6, 17, 20
§ 151(b)(1) ......................................................................................................... xii
§ 489B(i) ............................................................................................................... 4
TEX. R. CIV. P.
63........................................................................................................................... 5
166a(c) ................................................................................................................ 12
OTHER AUTHORITIES
28 Tex. Jur. 3d Decedents’ Estates § 121 (2015) ...................................................... 3
17 Tex. Prac., Prob. & Decedents’ Estates § 512 (2014) ..................................19, 20
18 Tex. Prac., Prob. & Decedents’ Estates § 621 (2014) .......................................... 3
Restatement (Second) of Judgments
§ 20...................................................................................................................... 18
§ 28, cmt. a ............................................................................................................ 9
§ 30...................................................................................................................... 21
§ 36...................................................................................................................... 26
ix
STATEMENT OF THE CASE
Nature of the Case Plaintiff John Lawton alleges that Defendant David
Lawton breached his fiduciary duties as independent
executor of their father’s estate. Most significantly,
because of a conflict of interest, David failed to pursue
the estate’s principal asset: its claim against David for
breaching his fiduciary duty when exercising a power of
attorney.
John sued David for breach of fiduciary duty and also
sought a declaratory judgment.
Trial Court County Court at Law No. 1 of Fort Bend County, Texas
Hon. Ben W. “Bud” Childers, Presiding
Disposition Below The trial court granted summary judgment for David
based on res judicata. Tab A.
x
STATEMENT REGARDING ORAL ARGUMENT
Appellant requests the opportunity to present oral argument, which will
assist the Court in understanding the complex procedural history.
xi
ISSUES PRESENTED
1. John Lawton sued David Lawton, his brother, for breach of fiduciary
duty based on David’s mismanagement of their father’s estate. Under Texas law,
an independent executor may close an estate by affidavit, but the filing of such an
affidavit does “not relieve the independent executor from liability for any
mismanagement of the estate.” TEX. ESTATES CODE § 405.007(b); TEX. PROB.
CODE § 151(b)(1) (same).
Did closing the estate by affidavit relieve David from liability for
mismanagement of the estate under principles of res judicata?
2. John pleaded a claim for a declaratory judgment that was merely
incidental to his other claims against David. After refusing to grant declaratory
relief for John, the trial court nevertheless awarded attorney’s fees to David.
Can the attorney’s fee award be upheld when:
a. a declaratory judgment claim that is merely incidental to other claims
does not provide a legal basis for a fee award; and
b. the trial court denied John his right to a jury determination of whether
the attorney’s fees were reasonable and necessary (an issue on which
David did not seek summary judgment); and
c. the trial court never found that the fees award were equitable and just?
xii
INTRODUCTION
All the claims in this lawsuit were disposed of by summary judgment based
on res judicata. Thus, the judgment can only be affirmed if the summary judgment
movant (Appellee) conclusively established the elements of res judicata—i.e., that
a prior final judgment on the merits between the same parties disposed of the same
claims brought in this lawsuit, or that the claims in this lawsuit were required to
have been brought in a prior suit that has reached a final judgment on the merits.
The great tragedy of this case is that the plaintiff has never been able to get a
final merits judgment at all. The plaintiff brought a prior similar suit, albeit in a
different capacity, but the judgment in that suit was ultimately vacated.
Instead of relying on the vacated judgment, the defendant claims that an
order closing an independent estate provides the basis for res judicata. But the
Estates Code forecloses this argument: closing an estate will “not relieve the
independent executor from liability for any mismanagement.” TEX. ESTATES CODE
§ 405.007(b). The claims in this case, brought against an independent executor for
mismanagement of the estate, cannot be barred simply because the estate is closed.
Further, closing the estate disposed of no claims, and no claims were required to be
brought in that purely administrative proceeding.
Despite years of litigation, the plaintiff has never even been able to get
discovery, much less a final judgment on the merits. He has been blocked at every
turn by misguided procedural arguments. Res judicata is the most unsound of all.
STATEMENT OF FACTS
John Lawton believes that his older brother, David Lawton, first abused his
power of attorney to squander their father’s assets and then exploited his position
as independent executor to conceal this wrongdoing. CR12-13.
John sued David for breaching his fiduciary duty as independent executor of
their father’s estate. CR13-18.
Because the trial court granted summary judgment in this case based on res
judicata, it is necessary to explain the procedural history of earlier proceedings
between the brothers. The earlier proceedings took place in two separate actions,
under two separate cause numbers:
Cause No. 09-CPR-02145 (“Estate Administration”) involved David’s
independent administration and closure of his father’s estate. No
claims of any sort were filed in this cause.
Cause No. 09-CPR-02145-A (“Estate Claims”) involved claims
asserted by John against David.
The Estate Administration (Cause No. 09-CPR-021945)
David initiated probate of his father’s estate in County Court of Law No. 1
of Fort Bend, County, where the case was docketed as Cause No. 09-CPR-021945.
David filed an application for probate of his father’s will and for appointment as
independent executor of his father’s estate. See TEX. ESTATES CODE § 256.052
(discussing applications for probate of wills).
2
Administration of an estate is not a traditional lawsuit. It is not initiated by a
petition asserting claims, and beneficiaries of the will do not file “answers.”
Rather, administration of an estate is an in rem proceeding. See 28 Tex. Jur. 3d
Decedents’ Estates § 121 (2015) (citing TEX. ESTATES CODE § 32.001(d)). The
purposes of administration “are the collection and preservation of the assets of the
estate, the payment of debts, and the distribution of the residue to the persons
entitled to receive it.” 18 Tex. Prac., Prob. & Decedents’ Estates § 621 (2014).
Neither John nor David ever filed any affirmative claims for relief against
the other in the Estate Administration.
John Sues on Behalf of the Estate in the Estate Claims Cause
When David refused to provide the accounting of the estate that John was
entitled to by statute, John sued David in Cause No. 09-CPR-021945-A.1 See
CR91. John asked for several forms of relief, including:
An accounting of the estate;
Removal of David as independent executor; and
An accounting of David’s power of attorney.
CR92-94.
1
This is not uncommon in probate proceedings. See De Ayala v. Mackie, 193 S.W.3d 575, 578
(Tex. 2006) (suggesting severance to avoid the difficulties of multiple final judgments in probate
proceedings); Henderson v. Shanks, 449 S.W.3d 834, 841 (Tex. App.—Houston [14th Dist.]
2014, pet. denied), petition for cert. filed (No. 14-1321) (explaining that under the Harris County
local rules, “ancillary [probate] matters have a separate file and are given a different cause
number from the core matter to which they relate”). David never objected to (or appealed from)
John’s claims being filed as a separate cause.
3
There were multiple grounds to remove David as independent executor.
CR93. The first was that “sufficient grounds appear to support belief that the
independent executor has misapplied or embezzled, or that the independent
executor is about to misapply or embezzle, all or any part of the property
committed to the independent executor’s care.” TEX. PROB. CODE § 149C(a)(2).
The second was David’s “fail[ure] to make an accounting which [was] required by
law to be made.” TEX. PROB. CODE § 149C(a)(3).
After their father died, the right to request an accounting of the power of
attorney became vested in his estate. TEX. PROB. CODE § 489B(i). Because of
David’s obvious conflict of interest, John (as a beneficiary of the estate) could
assert the estate’s rights to this accounting. E.g., Chandler v. Welborn, 294 S.W.2d
801, 806 (Tex. 1956).
The Estate Claims lawsuit’s caption makes clear that John sued on behalf of
the estate:
CR91.
4
John expected this lawsuit to proceed in the usual fashion: written discovery,
depositions, and eventually trial. He could not have been more mistaken.
David Seeks Summary Judgment in the Estate Claims Cause
David provided an overdue accounting of the estate, then moved for
traditional summary judgment. CR234.
John responded to the motion and also filed an amended petition asserting
additional claims against David. CR97.
The probate court then granted all of David’s requested relief. On David’s
motion, the court dismissed John’s amended petition as untimely. See CR115
(“dismissed for failure to comply with TEX. R. CIV. P. 63”). The probate court then
granted David’s motion for summary judgment and ordered that John’s original
petition be “dismissed with prejudice in its entirely.” CR115.
John filed a motion for a new trial and appealed. CR233.
David Files a Closing Affidavit in the Estate Administration Cause
After the grant of summary judgment in the Estate Claims Cause (No. 09-
CPR-021945-A), David then filed an affidavit to close the independent
administration of the estate in the Estate Administration Cause (No. 09-CPR-
021945). CR116. The effect of this affidavit was to “terminate the independent
administration and the power and authority of the independent executor, but [it]
5
shall not relieve the independent executor from liability for any mismanagement of
the estate.” TEX. PROB. CODE § 151(b).
John objected to the affidavit, noting that such an affidavit could only be
filed “when there is no pending litigation.” TEX. PROB. CODE § 151(a). Despite
the pending litigation (in the Estate Claims Cause), the trial court signed an order
overruling John’s objection to the closing affidavit. Here is the full text:
CR116 (Tab B).
This is the order that David now claims is a final judgment entitled to res
judicata effect.
This Court Vacates the Summary Judgment in the Estate Claims Cause
John’s appeal of the order granting summary judgment was assigned to this
Court.
Unable to defend the merits of the summary judgment, David argued that
closing the estate rendered John’s appeal moot. CR235. John argued to the
6
contrary, but this Court, in an opinion written by Justice Jim Sharp, held that the
appeal was moot. CR243 (Tab C).
The opinion considered each of John’s claims for relief. CR243. Because
the estate was closed, removal of David as independent executor was moot.
CR240. The panel held that “it follows that [John’s] claim for recovery of
attorney’s fees incident to removal [was] likewise moot.” CR241. And because
John sought to assert the estate’s rights to an accounting of David’s power of
attorney, closure of the estate made this request moot. See CR242-43 (“[B]ecause
John seeks a power of attorney accounting through the estate and the estate is
closed, such a request . . . is moot.”).
The panel therefore never considered the merits of the summary judgment.
CR243. Because the appeal was moot, this Court vacated the summary judgment.2
CR243. But the opinion expressly acknowledges that the closing of the estate
“does not foreclose John from potentially pursing a breach of fiduciary duty claim
against David that alleges mismanagement of the estate.” CR242.
John Sues in District Court, Which Dismisses for Lack of Jurisdiction
Consistent with the Probate Code and this Court’s opinion, John sued David
for breach of fiduciary duty alleging mismanagement of the estate. CR117; see
2
“If a case is or becomes moot, the court must vacate any order or judgment previously issued
and dismiss the case for want of jurisdiction.” Heckman v. Williamson County, 369 S.W.3d 137,
162 (Tex. 2012).
7
also CR121-26 (alleging breaches of fiduciary duty based on David’s
mismanagement of the estate).
John filed suit in district court in Fort Bend County. On David’s motion, the
district court dismissed the case for lack of subject matter jurisdiction. CR129.
John Files This Suit in County Court at Law
John was thus forced to return to the same county court at law (and judge)
that granted summary judgment in the Estate Claims Cause. CR8. In the new
lawsuit, John sought a declaratory judgment and asserted several different theories
of breach of fiduciary duty against David:
Refusing to provide an accounting. CR13.
Closing the estate while litigation was pending. CR13.
Failing to disclose all material facts to John. CR14-15.
Failing to timely distribute estate assets. CR13, CR16.
Converting estate assets and misusing them for his personal benefit.
CR13, CR16.
Conflicts of interest with the estate. CR16-17.
John sought damages and disgorgement of money that David improperly received
from the estate. CR17-18.
David Seeks Sanctions and Summary Judgment
Simultaneously with filing his answer, David filed a motion for summary
judgment. CR55. David threatened sanctions against John and his counsel,
8
CR244, and devoted more of his motion for summary judgment to arguing for
sanctions than to explaining the merits. See CR67-77.
David raised two arguments in his motion for summary judgment. First,
David asserted that John’s claims were barred by res judicata. CR59-64. David
contended that “the September 4, 2012 closing of the Estate of Joseph G. Lawton,
Deceased [Cause No. 09-CPR-021945] constituted a final judgment on the merits,
with preclusive effect.” CR60; see also CR116.
To his credit, David did not argue either claim or issue preclusion based on
the judgment in the Estate Claims Cause (No. 09-CPR-021945-A), which this
Court vacated.3 But David did rely on these claims in another way, incorrectly
asserting that John had filed claims in the Estate Administration Cause (No.
09-CPR-021945). See, e.g., CR61.
Second, David argued that John’s request for an accounting of David’s
power of attorney was barred by limitations and moot. CR64-65. David
acknowledged that these arguments would not support a full summary judgment;
3
The purpose of vacating the underlying judgment when an appeal becomes moot is to avoid the
effect of doctrines such as res judicata. See Marshall v. Hous. Auth. of City of San Antonio, 198
S.W.3d 782, 788 (Tex. 2006) (“One purpose of vacating the underlying judgment if a case
becomes moot during appeal is to prevent prejudice to the rights of parties when appellate review
of a judgment on its merits is precluded.”); Danciger Oil & Ref. Co. of Texas v. R.R. Comm’n of
Texas, 122 Tex. 243, 245 (1933) (vacating so that the parties “may not be prejudiced in any
subsequent proceeding by a judgment which this court has refused to consider on its merits”).
The Restatement also acknowledges this practice. See Restatement (Second) of Judgments § 28,
cmt. a (noting that “some jurisdictions, in order to avoid the impact of issue preclusion,” require
“that the appellate court reverse or vacate the judgment below”).
9
he merely requested “judgment as a matter of law on the POA accounting claims.”
CR65; see also CR66 (same).
John Responds to David’s Motion and Files an Amended Petition
In his response, John correctly explained that the closing of the estate “is not
a determination on the merits” of any claims, rights, or interest. CR342. Further,
John’s claims in the Estate Claims Cause could not be a basis for res judicata
because there was no final judgment on the merits with respect to those claims.
CR345-46. Res judicata was therefore not a bar to John’s then current claims.
CR348.
With respect to the power of attorney accounting, John explained that he was
not asserting an independent claim but merely sought discovery in support of his
breach of fiduciary duty claim. CR348-49.
In reply, David repeated his argument that John’s claims about his
mismanagement of the estate were “raised and defeated in the probate proceeding.”
CR410.
The Court Grants Summary Judgment
The trial court granted David’s motion for summary judgment,
simultaneously dismissing John’s claims with prejudice and ordering that John
take nothing on the claims. CR555. The trial court also ordered that David would
recover attorney’s fees and costs but did not determine an amount. CR555.
10
David filed an “Application for Fees and Costs,” requesting attorney’s fees
on the basis that John had sought a declaratory judgment. CR584. In response,
John asserted his right to a jury determination of whether David’s fees were
“reasonable and necessary.” See CR618-19; CR621-22. The trial court, without
explanation, denied John’s request for a jury, 2RR:20-21, and stated that the court
would “do this by submission.” 2RR:16.
The trial court entered a final judgment in favor of David, awarding him all
of the fees requested. CR788.
This appeal followed. CR1161.
11
STANDARD OF REVIEW
A grant of summary judgment is reviewed de novo. Nall v. Plunkett, 404
S.W.3d 552, 555 (Tex. 2013). The court takes as true all evidence favorable to the
non-movant and indulges every reasonable inference in the non-movant’s favor.
Nixon v. Mr. Property Management Co., 690 S.W.2d 546, 549 (Tex. 1985).
Summary judgment must “stand or fall on the grounds expressly presented
in the motion.” McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341
(Tex. 1993). The movant has the burden of showing that there is no genuine issue
of material fact and that he is entitled to judgment as a matter of law. TEX. R. CIV.
P. 166a(c). The burden of proof is on the movant, and all doubts as to the
existence of a genuine issue of fact are resolved against the movant. Nixon, 690
S.W.2d at 548-49.
Res judicata is an affirmative defense, which the proponent has the burden
to plead and prove. Garcia v. Shell Oil Co., 355 S.W.3d 768, 773 (Tex. App.—
Houston [1st Dist.] 2011, no pet.). To be entitled to summary judgment on an
affirmative defense such as res judicata, a defendant must conclusively establish
each element as to each claim. See American Tobacco Co. v. Grinnell, 951 S.W.2d
420, 425 (Tex. 1997); Rhone Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex.
1999).
12
SUMMARY OF THE ARGUMENT
The order overruling John’s objections to the closing of the estate is not a
“final judgment on the merits” that has the effect of claim preclusion. The easiest
way to resolve this case is the plain language of the Estates Code: “The closing of
an independent administration by filing of a closing report or notice of closing
estate . . . does not relieve the independent executor from liability for any
mismanagement of the estate . . . .” TEX. ESTATES CODE § 405.007(b).
The result compelled by the statute is consistent with general principles of
res judicata. Closing an estate is a purely administrative matter, not a final
judgment on the merits. No “claims” are asserted by anyone in such a proceeding.
It is not an adjudication that might have the effect of res judicata.
Independently, res judicata would not apply because John’s prior claims
were proceeding separately from the estate administration. See Van Dyke v.
Boswell, O’Toole, Davis & Pickering, 697 S.W.2d 381, 384 (Tex. 1985). John had
filed (and was pursuing) his claims on behalf of the estate under a different cause
number, the Estate Claims Cause, and the judgment on those claims was vacated.
David’s res judicata argument to the trial court was indisputably incorrect.
It rested on the false premise that John had filed claims in the Estate
Administration Cause. See, e.g., CR61. Without this premise, David’s arguments
fail. The trial court erred in granting summary judgment based on res judicata.
13
The trial court also erred in awarding attorney’s fees to David. If the
summary judgment as a whole is reversed, the fee award should be vacated. But
even if the summary judgment were affirmed, the fee award should still be
reversed.
Because John’s declaratory judgment was merely incidental to his other
claims for relief, it could not serve as a basis for attorney’s fees. See Etan Indus.,
Inc. v. Lehmann, 359 S.W.3d 620, 624 (Tex. 2011). Neither John nor David could
properly recover fees based on an incidental declaratory judgment claim.
Even if fees could have been awarded, the trial court applied the wrong
process and the wrong standard in awarding them. For reasons not apparent from
the record, the trial court denied John his right to a jury determination of whether
David’s fees were “reasonable and necessary.” John properly invoked his right to
a jury determination, and David never sought summary judgment on the amount of
fees. Denying John a jury determination was error.
Moreover, the trial court may award only “equitable and just” attorney’s fees
in a declaratory judgment. TEX. CIV. PRAC. & REM. CODE § 37.009. David’s fee
application did not argue—and the trial court did not find—that the fee award was
“equitable and just.” In the absence a determination that the fees were “equitable
and just,” the attorney’s fee award cannot stand.
14
ARGUMENT
I. Closing the Estate Administration Did Not Have the Effect of Claim
Preclusion.
Res judicata precludes relitigation of claims that have been finally
adjudicated, or that arise out of the same subject matter and that could have been
litigated in the prior action. Barr v. Resolution Trust Corp., 837 S.W.2d 627, 628
(Tex. 1992). “It requires proof of the following elements: (1) a prior final
judgment on the merits by a court of competent jurisdiction; (2) identity of parties
or those in privity with them; and (3) a second action based on the same claims as
were raised or could have been raised in the first action.” Amstadt v. U.S. Brass
Corp., 919 S.W.2d 644, 652 (Tex. 1996); see also Houtex Ready Mix Concrete &
Materials v. Eagle Const. & Envtl. Services, L.P., 226 S.W.3d 514, 519 (Tex.
App.—Houston [1st Dist.] 2006, no pet.). Texas courts have followed the
Restatement (Second) of Judgments. See Barr, 837 S.W.2d at 631; Scurlock Oil
Co. v. Smithwick, 724 S.W.2d 1, 6 (Tex. 1986).
David, the party asserting res judicata, “ha[d] the burden to present evidence
establishing that res judicata should apply.” Alcorn v. Vaksman, 877 S.W.2d 390,
396 n.1 (Tex. App.—Houston [1st Dist.] 1994, writ denied). David failed to carry
this burden.
David’s motion asserted a single theory of res judicata: “[T]he September 4,
2012 closing of the Estate of Joseph G. Lawton, Deceased constituted a final
15
judgment on the merits, with preclusive effect.” CR60; see also CR411 (“[A]ll of
John’s claims are barred because this Court’s ruling in Cause No. 09-CPR-021945
. . . was made a final ruling on the merits by the closing of the Estate.”).
This theory is meritless. Under both the Estates Code and principles of res
judicata, an order closing an independent estate administration does not preclude
claims against the independent executor for mismanagement of the estate. Closure
of an independent estate is a purely administrative matter, not contested litigation
in which claims are asserted.
Further, John asserted claims on behalf of the estate claims in a separate
cause from the Estate Administration Cause. A judgment in the Estate
Administration Cause could not preclude them. See Van Dyke v. Boswell,
O’Toole, Davis & Pickering, 697 S.W.2d 381, 384 (Tex. 1985).
David’s res judicata argument to the trial court rested on a
mischaracterization of the past proceedings: the incorrect assertion that John had
filed his claims in the Estate Administration Cause. See CR61. With this false
premise exposed, David’s res judicata argument lacks any foundation.
A. The trial court’s order overruling John’s objections to closing the
estate does not have the effect of claim preclusion.
The trial court’s grant of summary judgment on the basis that an order
closing an estate has res judicata effect on claims in a separate lawsuit is erroneous
and unprecedented. Research failed to uncover any Texas case in which an order
16
overruling objections to closure of an independent estate under Section 151 was
given res judicata effect.
There are good reasons no other court has committed this error. Under the
plain language of the Probate Code (now the Estates Code),4 closing the
independent estate did not release David from liability. Moreover, closure of the
independent estate administration by affidavit is a purely administrative matter, not
a final judgment on the merits.
1. Under the plain text of the Estates Code, closing an
independent estate does not relieve the independent
executor from liability.
The easiest way to resolve this appeal is the plain text of the Estates Code,
which provides that closure of an independent estate administration does not
immunize the independent executor from personal liability:
The closing of an independent administration by filing of a closing
report or notice of closing estate terminates the power and authority of
the independent executor, but does not relieve the independent
executor from liability for any mismanagement of the estate . . . .
TEX. ESTATES CODE § 405.007(b); accord TEX. PROB. CODE § 151(b) (“shall not
relieve the independent executor from liability for any mismanagement of the
estate . . . .”). If an independent executor seeks to be discharged from liability, he
4
On January 1, 2014, the Texas Estates Code replaced the Texas Probate Code. There are no
material differences for the purpose of this appeal, but we have generally provided parallel
citations.
17
must follow a different process. See TEX. PROB. CODE § 149E; TEX. ESTATES
CODE § 405.003(a). It is undisputed that David did not follow this process.
David’s only res judicata argument is that “the September 4, 2012 closing of
the Estate of Joseph G. Lawton, Deceased” relieved him from liability for any
mismanagement of the estate through principles of res judicata. CR60.
The statute says exactly the opposite: Closing the estate does not relieve
independent executors from liability. The plain text of the statute is controlling.
In the trial court, without explanation or authority, David argued that
principles of res judicata somehow trump the statute. See CR412 n.5 (arguing that
the statute is “inapplicable” because of res judicata).
This is incorrect: principles of claim preclusion cannot override the
unambiguous text of a statute. See, e.g., C/S Solutions, Inc. v. Energy Maint.
Services Group LLC, 274 S.W.3d 299, 310 (Tex. App.—Houston [1st Dist.] 2008,
no pet.) (“This statute modifies the common law so that res judicata bars only those
claims that were actually litigated in the limited-jurisdiction court.”). The
Restatement also acknowledges that statutes can limit rules of claim preclusion:
“A personal judgment for the defendant, although valid and final, does not bar
another action by the plaintiff on the same claim: . . . [w]hen by statute . . . the
judgment does not operate as a bar to another action on the same claim . . . .”
Restatement (Second) of Judgments § 20 (1982).
18
Indeed, this Court acknowledged the statute in the previous appeal: “We
agree that under section 151(c)(2) the closing of the estate does not foreclose John
from potentially pursuing a breach of fiduciary duty claim against David that
alleges mismanagement of the estate.” CR242.
David offered no valid reason for the trial court to ignore the plain text of the
statute, and there is none. Closing the estate did not relieve David of liability from
John’s claims for David’s mismanagement of the estate.
2. Closing the independent estate administration was “purely
administrative” and not a final judgment on any merits.
There is good reason that closing an estate does not relieve an independent
executor from liability. Closing an estate (technically, closing the independent
administration) by affidavit is merely an administrative matter, not a “final
judgment on the merits” to which res judicata might apply.
The Texas Practice Series treatise explains the history of this procedure:
“Under the old statutes the probate court had no jurisdiction to close an
independent administration. The estate was in fact closed and the authority of the
independent executor was terminated by his distribution, but this could not be
made to appear of record.” 17 Tex. Prac., Prob. & Decedents’ Estates § 512
(2014). To avoid the resulting uncertainty and inconvenience, Section 151(a) of
the Probate Code thus provided “a simple, inexpensive method for closing an
19
independent administration,” which allows an independent executor “to make a
formal closing of the estate appear of record.” Id.
Under Section 151(a), an independent executor could file a closing report
verified by affidavit. TEX. PROB. CODE § 151(a); see also TEX. ESTATES CODE
§ 405.005. The effect was to “terminate the independent administration and the
power and authority of the independent executor.” TEX. PROB. CODE § 151(b);
TEX. ESTATES CODE § 405.007(b).
“Section 151 is purely administrative in nature, providing simply a method
whereby the closing of an independent administration can be made a matter of
record.” Burke v. Satterfield, 525 S.W.2d 950, 953 (Tex. 1975); see also 17 Tex.
Prac., Prob. & Decedents’ Estates § 512 (“[T]he closing of an independent
administration by the filing of an affidavit is a purely administrative procedure.”).
The sole issue that a court can decide regarding closing the estate is whether
“the ‘Affidavit Closing Estate’ on its face met the requirements of § 151.” In re
Estate of Canales, 837 S.W.2d 662, 669 (Tex. App.—San Antonio 1992, no writ)
(emphasis added). A court cannot inquire into “the accuracy of the accounting or
whether the estate has been properly administered.” Id.; see also Burke, 525
S.W.2d at 953 (holding that Section 151 does not provide a probate court with
jurisdiction over “the substance of the accounting in an effort to determine whether
it is accurate or whether the executor has properly administered the estate”).
20
No “merits” were at issue in the “purely administrative proceeding” to close
the independent estate administration. The order overruling John’s objections is
not a “final judgment on the merits” that would preclude John’s claims.
This conclusion is consistent with the treatment of in rem proceedings in the
Restatement (Second) of Judgments:
A valid and final judgment in an action based only on jurisdiction to
determine interests in a thing: . . . (2) Does not bind anyone with
respect to a personal liability . . . .
Restatement (Second) of Judgments § 30; see also TEX. ESTATES CODE § 32.001
(“The entire proceeding is a proceeding in rem.”).
David has never cited any authority suggesting that an order overruling
objections to an estate closure constitutes a “final judgment on the merits.” He
cited two cases to the trial court, CR60, but these cases have nothing to do with
applying principles of claim preclusion to closure of an estate. See Mower v.
Boyer, 811 S.W.2d 560, 563 (Tex. 1991) (preventing collateral attack on a merits
adjudication by a probate court); Standlee v. Buechler, No. 05-92-00466-CV, 1993
WL 155875, at *7 (Tex. App.—Dallas May 14, 1993, no writ) (holding that
“settlement agreements constituted final judgments on the merits” and were
“entitled to preclusive effect”).
21
To be entitled to the affirmative defense of res judicata, David bore the
burden to prove a “final judgment on the merits” exists, and he failed to meet it.
Summary judgment was improper.
3. Res judicata cannot apply because no “claims” were filed in
the Estate Administration Cause.
This conclusion—that principles of claim preclusion do not apply to an order
closing an estate—is further bolstered by noting that res judicata is premised on
“claims” being filed in the earlier proceeding.
The Texas Supreme Court has prescribed how courts must apply the
“transactional approach” for res judicata: “A determination of what constitutes the
subject matter of a suit necessarily requires an examination of the factual basis of
the claim or claims in the prior litigation.” Barr v. Resolution Trust Corp. ex rel.
Sunbelt Fed. Sav., 837 S.W.2d 627, 630 (Tex. 1992). “A subsequent suit will be
barred if it arises out of the same subject matter of a previous suit and which
through the exercise of diligence, could have been litigated in a prior suit.” Id. at
631.
Thus, to determine whether John’s claims were barred by the order
overruling objections to the closing affidavit in the Estate Administration Cause,
the trial court needed to examine “the factual basis of the claim or claims” in that
suit. But there were no “claims” filed by anyone in the Estate Administration
Cause (No. 09-CPR-021945).
22
Trying to apply res judicata to an order closing an estate is like trying to fit a
square peg in a round hole—it simply does not work.
4. Because John’s current claims were not compulsory
counterclaims in the Estate Administration Cause, res
judicata does not preclude them.
Even if closure of the estate were a final judgment on the merits, res judicata
would not bar John’s claims. Because John did not assert an affirmative claim for
relief in the Estate Administration Cause, res judicata could apply only to John’s
“compulsory counterclaims.” See Ingersoll-Rand Co. v. Valero Energy Corp., 997
S.W.2d 203, 207 (Tex. 1999) (“Res judicata, however, does not bar a former
defendant who asserted no affirmative claim for relief in an earlier action from
stating a claim in a later action that could have been filed as a cross-claim or
counterclaim in the earlier action, unless the claim was compulsory in the earlier
action.”).
David failed to prove—or even argue—that John’s current claims were
“compulsory counterclaims” to the estate closure. See CR59-64. David bore the
burden, and his failure to meet it, standing alone, is enough to reverse the summary
judgment. See McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 338
(Tex. 1993) (“[T]he specific grounds for summary judgment must be expressly
presented in the motion for summary judgment itself . . . .”).
23
In any event, John’s claims against David were not compulsory
counterclaims. Holding that mismanagement claims against an independent
executor must be raised in response to closure of independent estate administration
would conflict with the plain text of the Estates Code: “The closing of an
independent administration by filing of a closing report or notice of closing estate
. . . does not relieve the independent executor from liability for any
mismanagement of the estate.” TEX. ESTATES CODE § 405.007(b). Classifying
claims based on mismanagement as compulsory counterclaims would nullify this
text.
In addition, a counterclaim is compulsory only if: “(1) it is within the
jurisdiction of the court; (2) it is not at the time of filing the answer the subject of a
pending action; (3) the claim is mature and owned by the defendant at the time of
filing the answer; (4) it arose out of the same transaction or occurrence that is the
subject matter of the opposing party’s claim; (5) it is against an opposing party in
the same capacity; and (6) it does not require the presence of third parties over
whom the court cannot acquire jurisdiction.” Ingersoll-Rand, 997 S.W.2d at 207.
For several reasons, John’s claims were not compulsory. First, the trial court
lacked jurisdiction over them in response to the closing affidavit. See Burke, 525
S.W.2d at 953 (Section 151 does not provide a probate court with jurisdiction “to
determine whether . . . the executor has properly administered the estate”).
24
Second, some of John’s claims were the subject of a pending action in the Estate
Claims Cause (No. 09-CPR-021945-A).5 Third, to the extent David’s attempt to
close the independent administration constitutes a “claim” (as discussed above, it
does not), the subject matter of David’s “claim” to close the estate was the “purely
administrative” question of the facial validity of his affidavit. Burke, 525 S.W.2d
at 953. It did not involve the propriety of David’s management, which is the
subject of John’s claims in this lawsuit.
Perhaps most significantly, John’s claims are now against David in a
different capacity. In the Estate Administration Cause, David, as independent
executor, sought to close the estate. See CR116 (overruling objections to “Closing
Affidavit of David W. Lawton, Independent Executor of the Estate of Joseph G.
Lawton”). But John has now sued David, individually, for breach of fiduciary
duty. CR8. These claims, which are against David in a different capacity, were
not compulsory counterclaims to David’s closure of the independent estate
administration.
5
The fact that John did not file an “answer” in Cause No. 09-CPR-021945 is only further
confirmation that it is simply not the type of proceeding to which res judicata would apply.
25
John’s change in capacity is also significant. In the earlier proceeding, John
sued David as a beneficiary6 on behalf of the estate. CR91. This Court held that
when David closed the estate, John could no longer act in this capacity and his
claims became moot. See CR242 (“[B]ecause John’s authority to request such an
accounting derives from his relationship to the estate as a beneficiary, once closed,
the estate ceases as an entity, as does any authority John had derivative from or on
behalf of the estate.”).
But now that the estate has closed, John has sued David directly. See CR8.
This difference in capacity is material:
A party appearing in an action in one capacity, individual or
representative, is not thereby bound by or entitled to the benefits of
the rules of res judicata in a subsequent action in which he appears in
another capacity.
Restatement (Second) of Judgments § 36. Any claims raised by John on behalf of
the estate in the Estate Claims Cause would not preclude him from now raising
claims as an individual now that the estate has closed. In this case, David has now
changed from an independent executor to individual and John from beneficiary to
individual.
6
Much like minority shareholders can raise derivative claims on behalf of a corporation,
beneficiaries can raise claims on behalf of an estate when the executor has a conflict of interest.
See, e.g., Chandler v. Welborn, 294 S.W.2d 801, 806 (Tex. 1956); Mayhew v. Dealey, 143
S.W.3d 356, 371 (Tex. App.—Dallas 2004, pet. denied).
26
B. Res judicata does not apply because John’s previous claims were
separated from the Estate Administration Cause.
There is another reason that res judicata does not apply: John’s previous
claims against David were separated from the Estate Administration Cause (No.
09-CPR-021945) and filed in the Estate Claims Cause (No. 09-CPR-021945-A), in
which the final judgment was vacated.
Because John’s claims proceeded separately from the Estate Administration
Cause, a final judgment in that cause cannot preclude them: “[T]he res judicata
effects of an action cannot preclude litigation of claims that a trial court explicitly
separates or severs from that action.” Van Dyke v. Boswell, O’Toole, Davis &
Pickering, 697 S.W.2d 381, 384 (Tex. 1985).
In Van Dyke, following trial in a divorce case, lawyers who formerly
represented one party intervened with a claim for fees. Id. at 382. The party then
asserted malpractice as a counterclaim. Id. The trial court severed these claims
from the divorce, then ordered separate trials on the fees and malpractice claims.
Id. at 384. After holding a trial on the fees claim, however, the trial court then
granted summary judgment on the malpractice counterclaim “based on ‘res
judicata and/or collateral estoppel.’” Id. at 383.
The Texas Supreme Court held that this was error: “[T]he res judicata
effects of an action cannot preclude litigation of claims that a trial court explicitly
separates or severs from that action. Since the trial court granted separate trials for
27
the intervention claim for fees and the malpractice counterclaim, the res judicata
effects of the action on the intervention claim for fees cannot preclude the
malpractice counterclaim.” Id. at 384.
This rule governs this case. John’s claims on behalf of the estate proceeded
separately from the Estate Administration Cause, in which the closure of the
independent estate administration occurred. Because the claims were proceeding
separately in the Estate Claims Cause, a final judgment in the Estate
Administration Cause “cannot preclude litigation” of John’s separate claims. Van
Dyke, 697 S.W.2d at 384.
C. David’s arguments are unavailing.
1. David’s res judicata argument rested on the false premise
that John filed claims in the Estate Administration Cause.
The res judicata argument in David’s motion for summary judgment rested
on an incorrect description of the earlier proceedings. David incorrectly claimed
that John’s claims had been filed in the Estate Administration Cause (No. 09-CPR-
021945). See CR61.
David’s motion defined the term “Probate Case” as “Cause No. 09-CPR-
021945, In the Estate of Joseph G. Lawton, Deceased.” CR56. The motion
repeatedly (and incorrectly) claims that John had filed claims in the “Probate
Case”:
28
“[T]he claims asserted in the Current Petition are the same as asserted
in the Probate Case . . . .” CR61.
“And in that case [the Probate Case], in fact, John actually did assert
all the Current Petition Claims . . . .” CR61.
“John could (and did) assert these claims in the Probate Case . . . .”
CR62.
“[T]he claims in the Current Petition here are barred by res judicata
because they were, or should have been if John acted diligently,
asserted in the Probate Case. . . . .” CR64.
These incorrect statements were the sole basis for David’s arguments that he was
entitled to summary judgment based on res judicata.
John did not file any claims against David in Cause No. 09-CPR-021945,
what David labeled the “Probate Case.” To the contrary, the main probate
proceeding and the proceeding in which John’s claims were filed had two separate
cause numbers and two separate files. John’s claims against David were all filed in
a different cause: 09-CPR-021945-A. See CR91. This is the same cause number
in which summary judgment was granted by the trial court. CR114. And this is
the same cause number in which John appealed:
CR232 (emphasis added).
Indeed, this Court expressly noted the different proceedings: “[T]he
administration of the estate—including the closing affidavit, John’s objection, and
29
the order overruling John’s objections—is Cause No. 09-CPR-021945.” CR239
n.6. This Court vacated the summary judgment in Cause No. 09-CPR-021945-A.
CR243.
David’s res judicata arguments rested on the false premise that John filed
claims in Cause No. 09-CPR-021945. With that false premise exposed, David’s
summary judgment based on res judicata cannot stand.
2. David’s arguments concerning the power of attorney
accounting are unavailing.
In the trial court, David also raised two arguments concerning John’s request
for an accounting of David’s power of attorney, arguing that it was “barred by
limitations” and “moot.” CR64-65.7 At best, these arguments would support a
partial summary judgment. They are not a basis to affirm the full summary
judgment entered by the trial court.
In any event, as John clarified, his request for an accounting of David’s
power of attorney is not a freestanding claim but is a “discovery issue.” CR348.
John’s theory is that David breached his fiduciary duty as independent executor by
failing to pursue the estate’s chief asset: its breach of fiduciary duty claim against
7
David’s “mootness” argument simply misreads this Court’s previous opinion, which held that
John’s assertion of a right to seek an accounting on behalf of the estate became moot once
David closed the estate. Compare CR65 (David’s argument) with CR242 (“[B]ecause John’s
authority to request such an accounting derives from his relationship to the estate as a
beneficiary, once closed, the estate ceases as an entity, as does any authority John had derivative
from or on behalf of the estate.”). In this suit, John is seeking the accounting personally, not “on
behalf of the estate.”
30
David for abusing his power of attorney. CR349. To support this claim, John
sought discovery concerning of the validity of the underlying breach of fiduciary
duty claim.
David’s arguments about the scope of available discovery are not a basis for
affirming the summary judgment entered by the trial court.
II. The Trial Court Erred in Awarding Attorney’s Fees.
The award of attorney’s fees should be reversed with the rest of the
summary judgment. See Barshop v. Medina County Underground Water
Conservation Dist., 925 S.W.2d 618, 637-38 (Tex. 1996) (vacating and remanding
attorney’s fees under the Declaratory Judgment Act after reversing a declaratory
judgment).8 The fee award cannot stand independently, so if the Court reverses the
judgment, it need not address the other deficiencies in the fee award. But even if
the rest of the judgment were affirmed, the award of attorney’s fees should be
reversed.
8
See Bowers v. Taylor, 263 S.W.3d 260, 268-69 (Tex. App.—Houston [1st Dist.] 2007, no pet.)
(“Having determined that the trial court erred by granting summary judgment in favor of Taylor
in the declaratory judgment action, we reverse and remand the trial court’s award of attorney’s
fees to Taylor that were entered in accordance with that declaratory judgment for further
proceedings not inconsistent with this opinion.”); see also WaiWai, LLC v. Alvarado, No. 03-13-
00540-CV, 2014 WL 6844934, at *5 (Tex. App.—Austin Nov. 26, 2014, no pet.) (“When a
declaratory judgment is reversed on appeal, however, the trial court’s original award of
attorney’s fees and costs may no longer be equitable and just.”); AmeriPath, Inc. v. Hebert, 447
S.W.3d 319, 344-45 (Tex. App.—Dallas 2014, pet. denied) (“However, our opinion in this case
significantly changes the trial court’s final judgment, and we cannot discern whether the trial
court would still consider its award of fees to be equitable and just in light of those changes.”).
31
The sole basis for the attorney’s fees awarded was John’s declaratory
judgment. See CR66 (requesting attorney’s fees under the Declaratory Judgment
Act because “John . . . sought a declaratory judgment”).9 The fee award is flawed
in several respects.
A. John’s declaratory judgment was merely incidental to his other
claims and not a legal basis for attorney’s fees.
It is black-letter law that “an award of attorney’s fees under the DJA is
unavailable if the claim for declaratory relief is merely incidental to other claims
for relief.” Jackson v. State Office of Admin. Hearings, 351 S.W.3d 290, 301 (Tex.
2011) (citing John G. & Marie Stella Kenedy Mem’l Found. v. Dewhurst, 90
S.W.3d 268, 289 (Tex. 2002)). In other words, “simply repleading a claim as one
for a declaratory judgment cannot serve as a basis for attorney’s fees.” Etan
Indus., Inc. v. Lehmann, 359 S.W.3d 620, 624 (Tex. 2011).
9
Although David initially sought fees under both the Declaratory Judgment Act and as
sanctions, CR66-78, he later non-suited his request for sanctions. CR756. This left the
Declaratory Judgment Act as the only basis for the fee award. See CR586 (Application for Fees:
“David is entitled to recover his attorneys’ fees and costs of court under . . . the Texas
Declaratory Judgment Act.”). In his answer, David phrased his fee request as a “counterclaim.”
CR44. The trial court’s judgment apparently denies the “counterclaim,” CR789, and such a
counterclaim is not a proper invocation of the Declaratory Judgment Act. See Sw. Guar. Trust
Co. v. Hardy Rd. 13.4 Joint Venture, 981 S.W.2d 951, 956 (Tex. App.—Houston [1st Dist.]
1998, pet. denied) (“A declaratory judgment action may not be used solely to obtain attorney’s
fees that are not otherwise authorized by statute or to settle disputes already pending before a
court.”); see also Hageman/Fritz, Byrne, Head & Harrison, L.L.P. v. Luth, 150 S.W.3d 617, 627
(Tex. App.—Austin 2004, no pet.) (“It is an abuse of discretion, therefore, to award attorney’s
fees under the UDJA when the statute is relied upon solely as a vehicle to recover attorney’s
fees.”).
32
Here, John’s request for a declaratory judgment did not provide a legal basis
for an award of fees because it restated John’s other claims. In his answer, David
conceded this point. See CR44 (claiming that John “reclassifie[d] some of his
claims in the guise of a declaratory judgment”).
David is correct that John repleaded his claims as claims for declaratory
judgment. The only declarations requested by John were incidental to his other
causes of action. See CR12. They “would add nothing to what would be implicit
or express in a final judgment for the enforceable remedy.” Universal Printing Co.
v. Premier Victorian Homes, Inc., 73 S.W.3d 283, 296 (Tex. App.—Houston [1st
Dist.] 2001, pet. denied). Accordingly, John’s request for a declaratory judgment
could not serve as a basis for attorney’s fees for either party.
A declaratory judgment will provide a basis for fees only when the statute
has been “properly invoked.” See Knighton v. Int’l Bus. Machines Corp., 856
S.W.2d 206, 210 (Tex. App.—Houston [1st Dist.] 1993, writ denied) (“When a
claimant . . . has properly invoked the declaratory judgment statute, either party
may plead for and obtain attorney’s fees.”); Hartford Cas. Ins. Co. v. Budget Rent-
A-Car Sys., Inc., 796 S.W.2d 763, 771 (Tex. App.—Dallas 1990, writ denied)
(“[W]here a claimant or a counter-claimant has properly invoked the declaratory
judgment statute, either party may plead for and obtain attorney’s fees.”).
33
The Austin Court of Appeals explained, “Although attorney’s fees are
permissible when a party defends against a claim under the Declaratory Judgments
Act, one of the parties must properly invoke the statute.” Whiteside v. Griffis &
Griffis, P.C., 902 S.W.2d 739, 747 (Tex. App.—Austin 1995, writ denied).
In Kenneth Leventhal & Co. v. Reeves, 978 S.W.2d 253 (Tex. App.—
Houston [14th Dist.] 1998, no pet.), a plaintiff attempted to “use declaratory relief,
identical to his breach of contract claim, simply to pave the way to recover
attorney’s fees not otherwise available.” Id. at 259. Thus, Reeves, the plaintiff,
was not entitled to attorney’s fees based on his claim for declaratory relief. Id. at
260.
The defendant (like David) argued that he should have been awarded
attorney’s fees. The Fourteenth Court of Appeals squarely rejected the argument:
“Having found no legal basis for awarding attorney’s fees to Reeves we likewise
find no legal basis for awarding such fees to Leventhal.” Id. at 260.
Here is how the Fourteenth Court of Appeals later described this holding:
“In other words, having concluded that the plaintiff improperly invoked the UDJA
to request the same relief already sought under his breach of contract claim, the
court held that the UDJA was not a proper procedural vehicle to award either party
attorney’s fees.” Devon Energy Prod. Co., L.P. v. KCS Res., LLC, 450 S.W.3d
203, 220 (Tex. App.—Houston [14th Dist.] 2014, pet. denied).
34
This rule controls the award of fees. Because John invoked the Declaratory
Judgment Act to request relief already sought in or incidental to his other claims, it
was “not a proper procedural vehicle” to award David fees, Devon Energy, 450
S.W.3d at 220, and there was “no legal basis” for the fee award. Kenneth
Leventhal & Co., 978 S.W.2d at 260.
To receive attorney’s fees, David needed to establish that John properly
invoked the Declaratory Judgment Act. Because David failed to do so, even if this
Court were to affirm the summary judgment, it should render judgment that David
recover no attorney’s fees from John.
Alternatively, there are two additional errors in the award of fees, both of
which lead to a remand.
B. The trial court erroneously denied John a jury determination of
whether David’s fees were “reasonable and necessary.”
For reasons not apparent from the record, the trial court denied John his right
to have a jury determine whether David’s fees were “reasonable and necessary.”
This was error.
David’s motion for summary judgment did not include any evidence
regarding the amount of fees. See CR66 n.13 (David’s motion for summary
judgment proposing that “David will submit evidence establishing his costs and
reasonable attorney’s fees for this case.”).
35
Instead, after summary judgment was granted, David filed an “Application
for Attorneys’ Fees and Costs.” CR584. John responded, asserting his right to a
jury trial and tendering the jury fee. See CR618-19; CR621-22.
At a hearing, the trial court denied John’s demand for a jury trial, 2RR:20-
21, and stated that it would “do this by submission.” 2RR:16. The trial court later
entered a final judgment awarding David all of the attorney’s fees he requested.
Compare CR786 (final judgment) with CR584 (application for attorney’s fees).
Denying John his right to a jury determination of this issue was error. It is
black-letter law that that the reasonableness and necessity of attorney’s fees
awarded under the Declaratory Judgment Act “is a question of fact for the jury’s
determination.” Bocquet v. Herring, 972 S.W.2d 19, 21 (Tex. 1998) (quoting
Trevino v. American Nat’l Ins. Co., 168 S.W.2d 656, 660 (Tex. 1943)). John had a
right to a jury determination, and the trial court erred by denying John that right.
Admittedly, like other fact issues, the reasonableness and necessity of
attorney’s fees can be resolved on summary judgment. E.g., Petrello v. Prucka,
415 S.W.3d 420, 431 (Tex. App.—Houston [1st Dist.] 2013, no pet.). But David
never sought summary judgment regarding the amount of fees. Neither his
“Application for Fees and Costs,” CR561, nor his “Motion for Entry of Final
Judgment,” CR741, argue that “there is no genuine issue of material fact” or cite to
Rule 166a. They cannot be construed as requesting summary judgment. See
36
McConnell, 858 S.W.2d at 341 (Tex. 1993) (“A [summary judgment] motion must
stand or fall on the grounds expressly presented in the motion.”).
C. David’s Application for Fees never argued—and the trial court
never found—that the award of fees was “equitable and just.”
The award of attorney’s fees is deficient for another reason: only “equitable
and just” attorney’s fees may be awarded under the Declaratory Judgment Act, and
the trial court did not find that these fees were equitable and just:
[T]he Declaratory Judgments Act entrusts attorney fee awards to the
trial court’s sound discretion, subject to the requirements that any fees
awarded be reasonable and necessary, which are matters of fact, and
to the additional requirements that fees be equitable and just, which
are matters of law.
Bocquet, 972 S.W.2d at 21; see also TEX. CIV. PRAC. & REM. CODE § 37.009 (a
court may award “reasonable and necessary attorney’s fees as are equitable and
just”).
David’s Application for Fees never argued that an award of fees under the
Declaratory Judgment Act was “equitable and just.” Instead, David erroneously
asserted that as a prevailing party, he was entitled to receive attorneys’ fees. See
CR588 (“David prevailed against John’s declaratory judgment action.
37
Accordingly, David is entitled to recover his reasonable attorneys’ fees and
costs.”).10
Consistent with David’s fee application, the trial court did not find that the
award of attorney’s fees was “equitable and just.” Instead, the judgment merely
finds that the fees were “reasonable”:
CR788 (emphasis added). Without concluding that the fees were “equitable and
just,” the trial court could not award them. And without any argument about this
standard in David’s fee application or mention of it in the award, there is no basis
to assume the trial court applied the correct “equitable and just” standard.
By granting attorney’s fees to David without considering whether the fees
were “equitable and just,” the trial court acted “without regard to guiding legal
principles.” Ford Motor Co. v. Chacon, 370 S.W.3d 359, 362 (Tex. 2012). This
was an abuse of discretion. See id.; In re Serv. Corp. Intern., 355 S.W.3d 655, 658
10
David is also incorrect that a “prevailing party” is “entitled to” attorney’s fees. See, e.g., City
of Houston v. Soriano, No. 14-05-00161-CV, 2006 WL 2506388, at *6 (Tex. App.—Houston
[14th Dist.] Aug. 29, 2006, pet. denied) (“The Declaratory Judgment Act does not require an
award of attorney’s fees to the prevailing party, but merely provides that a court may award
them.”).
38
(Tex. 2011) (“When a trial court errs in determining the law or in applying the law
to the facts, it has abused its discretion.”).
CONCLUSION AND PRAYER
This is a straightforward appeal, answered by the plain text of the statute:
closing an estate by affidavit does not relieve the independent executor from
liability for mismanagement. Appellant respectfully requests that this Court
reverse the judgment in its entirety.
39
Respectfully submitted,
BECK REDDEN LLP
By: /s/ William R. Peterson
Constance H. Pfeiffer
State Bar No. 24046627
cpfeiffer@beckredden.com
William R. Peterson
State Bar No. 24065901
wpeterson@beckredden.com
1221 McKinney, Suite 4500
Houston, TX 77010-2010
(713) 951-3700
(713) 951-3720 (Fax)
Esther Anderson
State Bar No. 00792332
esther@probateguardianship.com
ANDERSON PFEIFFER, PC
845 FM 517 West, Suite 200
Dickinson, TX 77539
(281) 488-6535
(281) 614-5205 (Fax)
COUNSEL FOR APPELLANT
JOHN LAWTON
40
CERTIFICATE OF SERVICE
I hereby certify that on July 8, 2015, a true and correct copy of the above
and foregoing Brief of Appellant was forwarded to all counsel of record by the
Electronic Filing Service Provider, if registered, otherwise by email, as follows:
N. Kimberly Hoesl
J. B. (Trey) Henderson III
DOYLE, RESTREPO, HARVIN & ROBBINS, L.L.P.
440 Louisiana St #2300
Houston, TX 77002
khoesl@drhrlaw.com
thenderson@drhrlaw.com
Counsel for David W. Lawton
/s/ William R. Peterson
William R. Peterson
41
CERTIFICATE OF COMPLIANCE
1. This brief complies with the type-volume limitation of
Tex. R. App. P. 9.4 because it contains 8,789 words, excluding the parts of the
brief exempted by Tex. R. App. P. 9.4(i)(2).
2. This brief complies with the typeface requirements of Tex. R. App. P.
9.4(e) because it has been prepared in a proportionally spaced typeface using
Microsoft Word 2007 in 14 point Times New Roman font.
Dated: July 8, 2015.
/s/ William R. Peterson
William R. Peterson
Counsel for Appellant,
John Lawton
42
No. 01-15-00193-CV
IN THE COURT OF APPEALS
FOR THE FIRST DISTRICT OF TEXAS
AT HOUSTON
JOHN LAWTON,
Appellant,
v.
DAVID W. LAWTON,
Appellee.
On Appeal from the County Court at Law No. 1, Fort Bend County, Texas
Trial Court Cause No. 14-CCV-053769
APPENDIX TO
BRIEF OF APPELLANT
TAB
A Final Judgment
B Order Overruling Objections to Closing Affidavit in Cause No. 09-CPR-
021945
C Opinion and Mandate of the First Court of Appeals, No. 01-12-00932-CV
TAB A
Final Judgment
NO. 14- CCV-053769
JOHN LAWfON, § IN THE COUNTY COURT
Plaintiff, §
§
v. § AT LAW NO. ONE
§
DAVIDW. LAWTON, INDIVIDUALLY, §
AS FORMER INDEPENDENT EXECUTOR §
OF THE ESTATE OF JOSEPH G. §
LAWTON, DECEASED, AND AS FORMER §
AGENT FOR JOSEPH G. LAWfON §
UNDERAPOWEROF ATTORNEY, §
Defendant § FORT BEND COUNTY, TEXAS
FINAL JUDGMENT
On this date came on to be considered the Motion for Entry of Final Judgment
("Motion") of Defendant David W. Lawton. After considering the Motion, any response
thereto, the pleadings, the arguments of counsel, if any, and all other matters properly before
it, and having previously rendered summary judgment on all causes of action asserted by
Plaintiff John Lawton, and having disposed of all other pending claims in this matter, the Court
is of the opinion that the Motion should be GRANTED. It is accordingly
ORDERED, ADJUDGED, AND DECREED that John Lawton talce nothing by any and
all of his claims against David W. Lawton. It is further
ORDERED, ADJUDGED, AND DECREED that all of John Lawton's claims asserted
in this matter are hereby dismissed with prejudice. It is further
ORDERED, ADJUDGED, AND DECREED that David W. Lawton, as prevailing
party, have and recover from John Lawton his reasonable attorneys' fees incurred in defending
this lawsuit in the amount of$ 3t.!:S. cro for services rendered through the trial of
this case. It is further
EXHIBIT B
788
ORDERED, ADnJDGED, AND DECREED that David W. Lawton have and recover
from John Lawton the further sum of $25,000.00 as his reasonable attorneys' fees if appeal is
taken unsuccessfully by John Lawton to the Court of Appeals. It is further
ORDERED, ADnJDGED, AND DECREED that David W. Lawton have and recover
from John Lawton the further sum of $10,000.00 as his reasonable attorneys' fees if either
party petitions the Texas Supreme Court for review, and David W. Lawton prevails. It is
further
ORDERED, ADnJDGED, AND DECREED that David W. Lawton have and recover
from John Lawton the further sum of $25,000.00 as his reasonable attorneys' fees if a petition
for review is granted or briefing on the merits is requested by the Texas Supreme Court and
David W. Lawton prevails. It is further
ORDERED, ADnJDGED, AND DECREED that post-judgment interest on the above
amounts (including attorneys' fees but excluding attorneys' fees on appeal) shall accrue at the
rate of five percent (5%) per annum, compounded annually pursuant to TEx. FJN. CODE
§ 304.006, from the date of this judgment until paid. It is further
ORDERED, ADJUDGED, and DECREED that all costs are taxed against John
Lawton. It is further
ORDERED, ADnJDGED and DECREED that this is a final judgment disposing of all
claims still pending in this matter and all parties in this cause. All relief not expressly granted
herein is denied. It is further
2
789
ORDERED, ADWDGED and DECREED that execution is issued for this Final
Judgment. David W. Lawton is allowed such writs and processes as may be necessary in the
enforcement and collection of this Final Judgment
This Final Judgment is final and appealable.
SIGNED this ~day of
3
790
TAB B
Order Overruling Objections to Closing
Affidavit in Cause No. 09-CPR-021945
N().09-CPR..021945
ESTATE()F §· . IN mE COUNTY COURT
§
J()SEPH G. LAWTON t § AT LAW NUMBER ONE (1) OF
§
DECEASED § FORT BEND COUNTY, TEXAS
ORDER
On this date, the Court considered Plaintiff 1ohn Lawton's "Objection to Closing
Affidavit of David W. Lawton, Independent Executor of the Estate of Joseph G. Lawton"
("Objection"). After considering the Objection, the responses. if any, any further replies or
responsive pleadings, the pleadings and discovery on file, the evidence, and tho argum~nts of
. .
counsel, if any, the Court hereby OVERRULES the Objection. It is hereby
ORDERED that John Lawton's Objection to Closing Affidavit of David W. Lawton,
Independent Executor of tho Estate of Joseph G, Lawton is OVERRULED.
,2~012,;
m-~
-~-----~~~~· ., ' .->
AS PER ORIGINAL
EXHIBIT6
116
TAB C
Opinion and Mandate of the
First Court of Appeals, No. 01-12-00932-CV
Opinion issued July 10, 2014
In The
~ourt of appea1'
For The
jfirst •iBititt of tlttxu
NO. 01-12-00932-CV
JOHN LAWTON, Appellant
v.
DAVID W. LAWTON, INDIVIDUALLY, AS INDEPENDENT EXECUTOR
OF THE ESTATE OF JOSEPH G. LAWTON, DECEASED, AND AS
FORMER AGENT FOR JOSEPH G. LAWTON UNDER A POWER OF
ATTORNEY, Appellee
On Appeal from the County Court at Law No. 1
Fort Bend County, Texas
Trial Court Case No. 09-CPR-02194SA
MEMORANDUM OPINION ON REHEARING 1
We originally issued our opinion in this appeal on March 6, 2014. Appellee,
David W. Lawton, individually, as independent executor of the estate of Joseph G.
EXHIBIT IO
232
John Lawton challenges the portion of the trial court's June 29, 2012 order
granting summary judgment against him on his claims asserted in his original
petition against David W. Lawton, individually, as independent executor of the
estate of Joseph G. Lawton, deceased, and as former agent for Joseph G. Lawton
under a power of attorney. In three issues, John contends that the trial court erred
in granting summary judgment on his ( l) claim for removal of David as executor
of the estate, (2) request for a power of attorney accounting, and (3) an award of
his attorney's fees. Because we conclude that John's claims in his original petition
are moot, we vacate the portion of the trial court's order granting David summary
judgment on John's claims asserted in his original petition and we dismiss his
original petition.
Background
John and David are the only children of Joseph and Joyce Lawton. On
October 15, 2003, Joseph executed his will and a statutory durable power of
attorney authorizing David to act as his agent for, among other things, estate, trust,
and other beneficiary transactions. Joseph died on March 21, 2009.
Lawton, deceased, and as former agent for Joseph G. Lawton under a power of
attorney, filed a motion for rehearing. We deny the motion for rehearing,
withdraw our March 6, 2014 opinion, vacate our judgment, and issue this opinion
and the related judgment in their stead. David also filed a request in the
alternative for reconsideration en bane. In light of the issuance of this opinion, the
request for en bane reconsideration is dismissed as moot. See Brookshire Bros.,
Inc. v. Smith, 176 S.W.3d 30, 40 & n.2 (Tex. App.-Houston [I st Dist.] 2004, pet.
denied).
2
233
On June 8, 2009, Joseph's will was admitted to probate and David was
appointed independent executor of Joseph's estate. On August 5, 2009, the court
signed an order approving the estate inventory, appraisement, and list of claims as
well as David's appointment as independent executor.
On June 6, 2011, John submitted a demand letter for an estate accounting
from David pursuant to Probate Code section 149A and, on November 14, 2011,
filed an original petition in the trial court seeking to (1) compel an estate
accounting and distribution and a power of attorney accounting; (2) remove David
as executor; and (3) recover attorneys' fees. David answered on December 21,
2011 and provided John with a verified estate accounting on December 23, 2011.
On March 2, 2012, David filed a motion for summary judgment and
response to John's petition. The trial court set the motion for hearing on June 28,
2012. 2 On the morning of the summary judgment hearing, John filed his first
amended petition seeking a declaratory judgment and adding a claim for breach of
fiduciary duty premised on numerous grounds. John did not file a motion for leave
to file his amended petition but orally requested leave at the hearing. On June 29,
2012, the trial court signed an order granting David's summary judgment motion,
2
After John filed a motion requesting a status conference on March 5, 2012, the
trial court canceled all motion settings (including the original March 26, 2012
hearing date on David's summary judgment motion) and scheduled a status
conference for March 26, 2012, at which time the trial court re-set the summary
judgment motion for hearing on June 28, 2012.
3
234
denying and dismissing with prejudice John's original petition, and dismissing
John's amended petition for failure to comply with Texas Rule of Civil Procedure
63 .
On July 11, 2012, David filed a closing affidavit to tenninate the
administration of Joseph's estate. On August 10, 2012, John filed an objection to
the closing affidavit and, on July 31, 2012, he filed a motion for new trial. On
September 4, 2012, the trial court signed orders overruling John's objection to the
closing affidavit and denying his motion for new trial. On September, 19, 2012,
John timely filed this appeal.
Discussion
John contests the trial court's order granting summary judgment on (1) his
claim for removal of David as the executor of the estate, (2) the request for a power
of attorney accounting, and (3) an award of his attorneys' fees. David contends
that John's issues are moot because the estate is closed and John did not appeal the
closing of the estate, thus depriving the trial court of jurisdiction. He also asserts
that the trial court properly granted summary judgment on all of John's claims.
Jurisdiction
Whether a trial court has subject matter jurisdiction is a question of law that
we review de novo. See Tex. Natural Res. Conservation Comm 'n v. IT Davy, 74
S.W.3d 849, 855 (Tex. 2002). Although courts generally do not lose subject
4
235
matter jurisdiction once it attaches, a probate court is a specialized court that can
lose jurisdiction over matters incident to an estate if it loses jurisdiction over the
probate matters. See Goodman v. Summit at West Rim, Ltd., 952 S.W.2d 930, 933
(Tex. App.-Austin 1997, no pet.). In other words, once an estate closes, incident
claims are pendent or ancillary to nothing, and the probate court loses jurisdiction.
Id.; see also Schuld v. Dembrinski, 12 S. W.3d 485, 487 (Tex. App.-Dallas 2000,
no pet.) {''the pendency of a probate proceeding is a requisite for a court's exercise
of jurisdiction over matters related to it"); Garza v. Rodriguez, 18 S.W.3d 694, 698
(Tex. App.-San Antonio 2000, no pet.) ("before a matter can be regarded as
incident to an estate ... a probate proceeding must actually be pending").
The record reflects that the trial court granted David's summary judgment
motion on June 29, 2012. On July 11, 2012, David filed a Notice of Filing of
Closing Affidavit and Closing Affidavit pursuant to Probate Code section 151.3
On August 10, 2012, John filed an Objection to Closing Affidavit, which was
overruled by written order on September 4, 2012.
Probate Code section 151 provides, in relevant part, as follows:
§ 151. Closing Independent Administration by Closing Report or Notice of
Closing Report.
3
We note that section 151 of the Probate Code has been repealed and recodified,
effective January I, 2014, as section 405.004 of the Estates Code. See TEX.
ESTATES CODE ANN.§ 405.004 (West 2013).
5
236
(a) Filing of Closing Report or Notice of Closing Estate. When all of
the debts known to exist against the estate have been paid, or when
they have been paid so far as the assets in the hands of the
independent executor permit, when there is no pending litigation,
and when the independent executor has distributed to the persons
entitled thereto all assets of the estate, if any, remaining after
payment of debts, the independent executor may file with the court
a closing report or a notice of closing of the estate.
(c)Effect of Filing Closing Report or Notice of Closing Estate. (1)
The independent administration of an estate is considered closed
30 days after the date of the filing of a closing report or notice of
closing estate unless an interested person files an objection with
the court within that time. If an interested person files an
objection within the 30-day period, the independent administration
of the estate is closed when the objection has been disposed of or
the court signs an order closing the estate.
Tux. PROB. CooEANN. § 151(a), (c) (West Supp. 2013) (emphasis added). 4
David argues that the estate is closed and that because John did not appeal
the closing, the trial court lost jurisdiction over the estate and John's appeal is now
moot. John argues that David could not unilaterally close the estate under section
151 because there was pending litigation at the time David filed his closing
affidavit. Specifically, John contends that although the trial court had already
signed a final order granting summary judgment to David, denying his original
4
The amendment in section lSl(c) (fonnerly section 15l(b)) applies to closing
reports or notices of closing estate filed on or after the effective date of the Act
(i.e., September 1, 2011). See Act of September 1, 2011, 82nd Leg., RS., ch.
1338, § 1.26, 2011 Tex. Gen. Laws 3882, 3898. David's closing affidavit was
filed on July 11, 2012.
6
237
petition, and dismissing his amended petition as untimely, the trial court retained
plenary power to change its judgment at the time David filed his closing affidayit.
Further, as John points out, his notice of appeal was timely filed and, therefore, as
litigation was still pending when John filed his closing affidavit, the estate did not
close.
Probate Code section 151 addresses both when an independent executor may
file a closing report with the court to terminate administration of an estate, and the
effect of such a filing. See TEX. PROB. CODE ANN.§ 151. 5 Subsection (a) provides
that an independent executor may file a closing report when the debts of the estate
have been paid (or paid to the extent possible), there is no pending litigation, and
the independent executor has distributed any remaining assets to those entitled to
receive them. See id at § 151(a). Section 151(c) addresses the effect of such a
filing, see id. at § 151 (c), and specifically provides that an estate "is considered
closed 30 days after the date of the filing of a closing report . . . unless an
interested person files an objection with the court within that time." Id If an
objection is filed within the thirty-day period, "the estate is closed when the
objection has been disposed of ...." Id Here, while John filed an objection to the
s We note that section 151(a) is not mandatory (''the independent executor may file
with the court a closing report or a notice of closing of the estate ....") (emphasis
added) and that there are other actions which may effectively close an estate. See
In re Estate of Teinert, 251 S.W.3d 66, 67 (Tex. App.-Waco 2008, pet. denied)
(noting that final distribution of estate's assets after all debts and claims against
estate are paid results in closing of estate). See id. at 67 (citation omitted).
7
238
closing affidavit within the thirty-day period, the trial court overruled his objection
on September 4, 2012. Thus, notwithstanding whether David should have filed a
closing affidavit under subsection (a), the language of subsection (c) makes clear
that doing so closed the estate when the court disposed of John's objection.
Further, we note that John's argument that litigation was pending when the
closing affidavit was filed, thus precluding the closure, was not preserved for our
review. Although his objection to the closing affidavit alleged that litigation was
still pending and the filing of a closing affidavit under section 151 was, therefore,
improper, he never appealed the closing of the estate to this court. John's notice of
appeal states that he is appealing
from the final judgment, and from the overruling of his post-trial
motion, in Cause No. 09-CPR-021945-A, The Estate of Joseph G.
Lawton, Deceased v. David W. Lawton, Individually, and As
Independent Executor of the Estate of Joseph G. Lawton, Deceased
and As Former Agent for Joseph G. Lawton Under A Power of
Attorney, in the County Court at Law No. One (1) of Fort Bend
County, Texas. The trial court signed a Final Judgment on June 29,
2012, (Order Denying John Lawton's Petition and Granting
Executor's Motion for Summary Judgment)."
Neither John's notice nor his appellate brief speak to an appeal of the
estate's closing or the overruling of his objection to the closing affidavit. 6 As such,
the issue of whether the filing of the closing affidavit was proper is not before us.
6
Further, the administration of the estate-including the closing affidavit, John's
objection, and the order overruling John's objection-is Cause No. 09-CPR-
021945.
8
239
Having concluded that the estate is closed, we consider which of John's
claims, if any, survive on appeal. John's first issue concerns the trial court's denial
of his motion to remove David as executor. In In re Estate of Hanau, 806 S.W.2d
900 (Tex. App.-Corpus Christi 1991, writ denied), the court of appeals noted that
the "trial court has power to hear all matters incident to an estate only in those
instances where a probate proceeding, such as the administration of an estate, is
actually pending in the court in which the suit is filed, relating to a matter incident
to that estate." Id at 904. The court concluded that once the estate had closed, the
trial court lost jurisdiction to remove the executrix and appoint a successor
independent executor, and that these issues had become moot. See id. Thus, under
Hanau, John's issue concerning the removal of David as executor of the estate
under Probate Code section 149C(a) is moot. Moreover, John concedes that ifthe
estate is closed, his claim seeking to remove David as executor is moot.
John's second issue challenges the trial court's denial of his claim for
attorney's fees. In his original petition, John sought attorney's fees under Probate
Code section 149C(d), which recites that "[c]osts and expenses incurred by the
party seeking removal incident to removal of an independent executor . . .
including reasonable attorney's fees and expenses, may be paid out of the estate."
Tux. PROB. CODE ANN.§ 149C(d) (West 2013). However, because we concluded
that John's claim for removal of David as executor was rendered moot by the
9
240
closing of the estate, it follows that his claim for recovery of attorney's fees
incident to removal is likewise moot. See id
Further, John's reliance on Allstate Insurance Co. v. Hallman, 159 S.W.3d
640 (Tex. 2005) is misplaced. 7 In addition to the fact that Hallman did not involve
a probate case or a claim for attorney's fees under section 149C, the trial court in
that case retained jurisdiction over the matter giving rise to the attorney's fees
claim. See id. at 642. Here, in contrast, the closure of the estate deprived the trial
court of jurisdiction over the estate. Thus, we conclude that John's claim for
attorney's fees incurred under Probate Code section 149C(d) is moot.
7
In Hallman, neighboring property owners sued Hallman for damages related to
limestone mining on her property. See Allstate Ins. Co. v. Hallman, 159 S.W.3d
640, 641 (Tex. 2005). Hallman sought coverage under her homeowners'
insurance policy with Allstate Insurance Company, requesting that Allstate defend
and indemnify her in the lawsuit. See id. Allstate and Hallman both sought. a
declaratory judgment to detennine whether the policy covered the underlying
litigation. See id. The trial court granted summary judgment in Allstate's favor
but the court of appeals reversed the trial court's judgment and remanded for
further proceedings, holding that Allstate had a duty to defend and indemnify
Hallman in the limestone mining litigation. See Hallman v. Allstate Ins. Co., 114
S.W.3d 656 (Tex. App.-Dallas 2003), rev'd, 159 S.W.3d 640 (Tex. 2005).
While the declaratory judgment action was on appeal to the Texas Supreme Court,
the underlying lawsuit between Hallman and her neighbors concluded with a jury
verdict in Hallman's favor. See Hallman, 159 S.W.3d at 642. In considering
whether resolution of the underlying litigation mooted the case, the Court
concluded that Hallman's remaining interest in obtaining attorney's fees for
expenses incurred in defending against Allstate's declaratory judgment action and
in pursuing her own declaratory relief prevented the case from being moot. See id
at 643. The Court ultimately reversed and rendered judgment for Allstate,
concluding that damages to third parties caused by commercial limestone mining
conducted on an insured's property fell within the policy's business pursuits
exclusion. See id. at 641.
10
241
John's third issue concerns his request for an accounting under Probate Code
section 149B for the time period during which David held power of attorney for
the estate. As a beneficiary, John contends that he could assert this right on behalf
of the- estate because David refused to do so. But because John's authority to
request such an accounting derives from his relationship to the estate as a
beneficiary, once closed, the estate ceases as an entity, as does any authority John
had derivative from or on behalf of the estate.
Nevertheless, John contends that the estate need not be open for him to
pursue his request for a power of attorney accounting because section 151 provides
that David can still be held liable for any wrongdoing revealed by the accounting.
See TEX. PROB. CODE ANN. § 151(c)(2) (stating that closing of estate "shall not
relieve the independent executor from liability for any mismanagement of the
estate or from liability for any false statements contained in the report or notice.").
In his appellate brief, John states that he "seeks an accounting of David's power of
attorney as part of a potential breach of fiduciary duty claim by the estate against
David" (emphasis added). We agree that under section 15l(c)(2) the closing of the
estate does not foreclose John from potentially pursuing a breach of fiduciary duty
claim against David that alleges mismanagement of the estate. However, as
discussed above, because John seeks a power of attorney accounting through the
11
242
estate and the estate is closed, such a request made pursuant to section 1498 is
moot.
Conclusion
Having concluded that John's claims asserted in his original petition are
moot, we vacate the portion of the trial court's order granting David summary
judgment on John's claims asserted in his original petition and we dismiss John's
original petition.
Jim Sharp
Justice
Panel consists of Justices Jennings, Higley, and Sharp.
12
243
QC:ourt of appealS
.:first JBi~tid of ~exu
NO. 01-12-00932-CV
JOHN LAWTON, Appellant
v
DAVID W. LAWTON, INDNIDUALL Y, AS INDEPENDENT EXECUTOR OF THE
ESTATE OF JOSEPH G. LAWTON, DECEASED, AND AS FORMER AGENT FOR
JOSEPH G. LAWTON UNDER A POWER OF AT'JORNEY, Appellee
Appeal fwm the County Court at Law No. l ofFott Bend County. (Tr. Ct. No.
09-CPR-021945A).
TO THE COUNTY COURT AT LAW NO. 1 OF FORT BEND COUNTY,
'INC:S·
Before this Court, on the I Oth day ol"July 2014, the case upon appeal to revise or to
reverse your judgment was determined. This Court made its order in these words:
Tllis Court today considered a motion for rehca:Jillg
illcd by appellee, Davtd w. Lawton, md!v1dually, as
independent executor of the estate of Joseph G. Lawton,
deceased, and as former agent for Joseph G. Lawton under a
power of attorney. The motion for rehearing is denied.
Ne'€ li!IGatGd, ~~t aside, and annulled y,r,.
further order this Court's opinion of March 6, 2014,
withdrawn.
~
I• ....
II 10
397
This case is an appeal from H1e order signed by tlle trial
eourt on June 29, 2012. After submitting the ease en the
appellate record and the arguments properly raised by the
patties, the Court holds that appellant's claims asserted in his
original petition are moot. Accordingly, the Court vacates
the portion of the trial court's order granting summary
judgment to appellee on appellant's claims asserted in his
original petition and dismisses appellant's original petition.
The Court orders that appellant, John Lawton, pay all
a ell ate costs.
The Court orders that this decision be certified below
for observance.
Judgment rendered July 10, 2014.
Panel consists of Justices Jennings, Higley, and Sharp.
Opinion delivered by Justice Sharp.
WHEREFORE, WE COMMAND YOU to observe the order of our said Court in
this behalf and in all things to have it duly recognized, obeyed, and executed.
September 19, 2014
Date CHRISTOPHER A. PRINE
CLERK Of THE COURT
398