Reversed and Remanded and Memorandum Opinion filed March 8, 2022.

In The

Fourteenth Court of Appeals

NO. 14-20-00836-CV

IN THE ESTATE OF BENTON SCHULZE, JR.

On Appeal from the County Court at Law

Washington County, Texas

Trial Court Cause No. 91-456

MEMORANDUM OPINION

This appeal arises from a probate dispute. Appellant, Kay Lapaglia Schulze 

Domel, appeals the trial court’s grant of summary judgment in favor of Appellee, 

Evelyn Perry Leiber Schulze, contending the trial court erroneously granted 

summary judgment and dismissed Kay’s claims with prejudice because (1) 

Evelyn’s summary judgment motion failed to address Kay’s fraud claim; and (2) 

the mediated settlement agreement Kay and Evelyn signed is latently ambiguous

regarding what rights, claims, and assets were settled by the parties in this probate 

dispute. We reverse and remand.
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BACKGROUND

Benton Schulze, Jr. died December 7, 1991, leaving his property in a 

handwritten will to his wife, Evelyn Perry Leiber Schulze, and to his son from a

prior marriage, Benton W. Schulze III, “to share and share alike.” Evelyn filed an

Application for Probate of Will and Issuance of Letters of Administration in 

December 1991, and the trial court signed an Order Admitting Will to Probate and 

Authorizing Letters of Administration in January 1992. Evelyn filed an inventory 

in June 1992, which the trial court approved, listing all of Schulze, Jr.’s property 

and corresponding value, except for the value of “oil and gas leases and mineral 

interests” which is listed as “unknown.” 

In September 2001, Evelyn filed an Account for Final Settlement, in which 

she listed (1) income received by Schulze, Jr.’s estate from leases, royalties, and 

interest from 1995 to 2000; (2) debts of Schulze, Jr.’s estate; and (3) real and

personal property. Schulze III filed Objections to Account for Final Settlement 

and Claims against Decedent’s Estate in January 2002, complaining that Evelyn, 

among other things, failed to provide accounting information from 1992 to 1995 as 

well as identify the sources for various cash receipts and royalty income. Evelyn’s 

Account for Final Settlement was never approved by the court.

Schulze III died on December 9, 2006. His wife Kay, as an interested 

person in Schulze, Jr.’s estate as the sole devisee of Schulze III, filed an 

Application to Remove Independent Executrix and to Appoint Successor 

Independent Executrix in February 2007. Kay requested Evelyn’s removal 

because Evelyn (1) failed to file an Inventory, Appraisement, and List of Claims

within 90 days of qualification; (2) failed to “file an accounting as required by law 

because her Account for Final Settlement was filed without the required vouchers

and/or receipts;” and (3) “has not performed her duties and has failed in the
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performance of her duties as Independent Executrix because she has not made

progress in settling or distributing the Estate in over fifteen (15) years.” 

In April 2007, the trial court ordered Evelyn and Kay to mediation. The 

mediation resulted in a Rule 11 Memorandum of Mediated Settlement Agreement

(“the Agreement”), which Kay and Evelyn signed in May 2007. Among other 

things, the Agreement stated that (1) it was signed in settlement of “any and all 

claims belonging to Benton Schulze, III, his heirs, beneficiaries, assigns or anyone 

claiming under him to assets and distributions of the” Schulze, Jr. estate; and (2)

Kay and Evelyn “waive and release any and all claims, judgments, and causes of

actions they have or may have against one another or against any personal 

representative of the other.”

The parties filed a Joint Motion to Approve Settlement Agreement in July

2007, stating they have “entered into an agreement settling all issues between them 

relative to [Schulze, Jr.’s estate] and move the Court to approve the Settlement 

Agreement and authorize [Evelyn] to execute any and all documents necessary to 

carry out the terms of the Settlement Agreement on behalf of the Estate of”

Schulze, Jr. The trial court signed an order in July 2007, approving the Agreement 

and ordering Evelyn to execute all deeds, releases, or other necessary documents to 

carry out the Agreement. In October 2007, Kay filed a Motion to Enforce Rule 11 

Memorandum of Mediated Settlement Agreement requesting the trial court order 

Evelyn to comply with the terms of the Agreement. Kay withdrew her motion in 

May 2008, stating “[t]here is no need to pursue that motion” any longer.

In June 2015, Evelyn filed a Motion to Convert to Independent 

Administration. A few weeks later, Kay filed an objection to the motion, stating

that Evelyn had provided no accounting for numerous mineral interests set forth in 

the 1992 inventory and requesting Evelyn account for all mineral interests. In 
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August 2015, Kay filed a Motion to Demand Accounting, requesting Evelyn file 

all past due annual accountings by September 1, 2015. In August 2015, the trial 

court granted Kay’s motion and ordered Evelyn to file all past due annual 

accountings no later than 60 days from the execution of the order. Evelyn filed an 

Account of Estate in December 2015. The trial court signed an Account of Estate 

Order in January 2016, approving the Account. 

About six months thereafter, Kay filed a Motion to Inspect Supporting 

Documentation of Account of Estate (1) stating she sent a letter to the trial court 

requesting that it reject Evelyn’s Account of Estate but that the court did not see 

the letter before signing its order; and (2) requesting to inspect supporting 

documentation. Three days later, Evelyn filed a response, in which she, among 

other things, claimed that “[e]xtensive discovery was conducted by attorneys 

representing Benton Schulze, III and Kay. Any and all claims by either party were 

settled at the mediation held on May 25, 2007 and the settlement was reduced to a 

Rule 11 Agreement which was approved by the Court. Pursuant to the terms of the 

Rule 11 Agreement, Evelyn has made all distributions required of her to Kay. Kay 

has accepted the benefits of the Rule 11 Agreement and the distributions made to 

her pursuant thereto.”

In July 2016, Kay filed an Amended and/or Supplemental Application to 

Remove Independent Executrix and to Appoint Successor Independent Executrix, 

claiming that “sufficient grounds appear to exist to support a belief” that Evelyn 

has “committed fraud, embezzled or misapplied or is about to commit fraud, 

embezzle or misapply or at a minimum has been negligent and/or breached her

fiduciary duties as Executrix.” Several days later, Kay filed a Petition for 

Declaratory Judgment. In May 2017, Kay filed an amended petition seeking a 

declaratory judgment that (1) she is “an interested person in the Administration of 
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the Estate of Benton Schulze, Jr.”; (2) Evelyn “breached her fiduciary duty as 

Administratrix of the Estate of Benton Schulze, Jr.”; (3) the “Rule 11 Agreement is 

void because Administratrix failed to obtain the Court’s approval prior to 

negotiating and entering into the Settlement Agreement”; (4) the “Agreement is 

void on grounds of extrinsic fraud”; (5) the “Agreement covers only the surface 

property and personal property specifically enumerated therein, and in accordance 

with the principles of contract law, additional subject matter not contained within 

the Rule 11 Agreement is not part of the scope of the settlement”; and (6) the 

Agreement contains a latent ambiguity so parol evidence should be considered to 

show that Evelyn and Kay did not intend for the “Agreement to include the 106 

mineral, oil and gas interests and mineral and/or royalty interests for which a value 

was never ascertained.”

Evelyn filed an answer in May 2017, generally denying Kay’s allegation and 

pleading the affirmative defenses of “accord and satisfaction, estoppel, fraud, 

laches, payment, release, statute of limitations and waiver.” Evelyn also filed a 

Motion to Dismiss for Lack of Jurisdiction, asserting that (1) the “Rule 11 

Agreement was intended to be and on its face was a complete settlement of any 

and all claims any party had against the other”; (2) Evelyn “has made all 

distributions required of her to [Kay] pursuant to the terms of the Rule 11 

Agreement. [Kay] has accepted the benefits of the Rule 11 Agreement and the

distributions made to her pursuant thereto”; and (3) Kay’s “alleged causes of action 

should be dismissed due to lack of jurisdiction because [Kay] has no standing in 

this matter [and] ceased to be an ‘interested person’ when she entered into the 

settlement agreement and accepted the benefits therefrom.”

In December 2018, Evelyn filed a summary judgment motion, arguing (1) 

Kay has “no standing to bring any action in this proceeding because she is no 
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longer an interested party” after she and Evelyn signed the Agreement settling 

“any and all claims belonging to [Kay] or anyone claiming under Benton Schulze, 

III”; and (2) it is “clear that all parties had the same knowledge or means of 

obtaining the same knowledge and there was no fraud, misrepresentation, 

concealment, or conduct otherwise inequitable on the part of [Evelyn] when the 

Rule 11 Agreement was executed or at any other time.” About two months later, 

Kay filed her response and asserted that (1) she is an interested person because the

Agreement “was not intended to settle any oil, gas and mineral leases, or mineral 

and/or royalty interests in the Estate of Benton Schulze, Jr.”; (2) the Agreement is 

clear and unambiguous and “was drafted to settle only the personal property and

surface property which was specifically identified within the four corners of the 

Rule 11 Agreement, and that had been valued in the 1992 Inventory”; and (3) 

alternatively, if there is an ambiguity in the Agreement, “there is a genuine issue of 

material fact wherein the Court and/or a jury will need to consider all parol[]

evidence in a full trial on the merits.”

Evelyn filed her reply in July 2020, objecting to Kay’s summary judgment 

evidence and arguing that Kay is no longer an interested party as defined by the 

Texas Estates Code and has no standing to bring any action against Evelyn because 

the Agreement unambiguously “states it is ‘in settlement of any and all claims

belonging to Benton Schulze, III, his heirs, beneficiaries, assigns or anyone 

claiming under him to assets and distributions of the above described estate and the 

parties agree as follows.’” The trial court held a hearing on Evelyn’s motion for 

summary judgment in September 2020, at which Kay and Evelyn presented 

argument.

The trial court signed a Final Summary Judgment on November 17, 2020,

stating that Evelyn’s summary judgment motion should be granted and finding that 
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Kay has “no standing in this matter and her Application to Remove Independent 

Executrix and to Appoint Successor Independent Executrix and Petition for 

Declaratory Judgment are dismissed with prejudice.” Kay filed a timely notice of 

appeal on December 16, 2020.

ISSUES PRESENTED

Kay presents the following two issues on appeal:

(1) Because Evelyn’s motion for summary judgment did not address 

Kay’s fraud claim, and Evelyn’s defense of release cannot defeat the 

fraud claim, the probate court erred in granting summary judgment 

and dismissing all Kay’s claims.

(2) At a minimum, the circumstances leading to the mediated Rule 11 

Agreement reveal a latent ambiguity as to what Kay released, so the 

probate court erred in finding it unambiguously released all her 

previously undisputed half-interest in Benton Jr.’s estate.

ANALYSIS

We begin by addressing Kay’s first issue, in which she asserts that the trial 

court erroneously granted summary judgment in favor of Evelyn, determining Kay

lacked standing and dismissing Kay’s claims when Evelyn’s summary judgment 

motion (1) “only addressed her defense of release” and (2) did not address Kay’s

claim that Evelyn “fraudulently induced the Rule 11 Agreement and release” of 

Kay’s half-interest in Schulze, Jr.’s estate. Kay contends that Evelyn “committed 

fraud by failing to disclose material information about the estate’s assets prior to 

entering the Rule 11 Agreement,” and when an administrator “misrepresents the 

value of an estate to obtain a release from one of the beneficiaries, the beneficiary 

retains standing to seek the administrator’s removal and recover damages for 

fraud.”

Standard of Review
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We review a trial court’s ruling on a motion for summary judgment de novo. 

Tarr v. Timberwood Park Owners Ass’n, Inc., 556 S.W.3d 274, 278 (Tex. 2018); 

Texan Land & Cattle II, Ltd. v. ExxonMobil Pipeline Co., 579 S.W.3d 540, 542 

(Tex. App.—Houston [14th Dist.] 2019, no pet.). To prevail on a traditional 

motion for summary judgment, the movant must show that no genuine issue of 

material fact exists and that it is entitled to judgment as a matter of law. Tex. R. 

Civ. P. 166a(c); Tarr, 556 S.W.3d at 278. Summary judgment for a defendant is 

proper only when the defendant negates at least one element of each of the 

plaintiff’s theories of recovery or pleads and conclusively establishes each element 

of an affirmative defense. Hilburn v. Storage Tr. Props., LP, 586 S.W.3d 501, 506 

(Tex. App.—Houston [14th Dist.] 2019, no pet.); see Tex. R. Civ. P. 166a(c).

“The purpose of a summary judgment is to ‘provide a method of summarily

terminating a case when it clearly appears that only a question of law is involved 

and that there is no genuine issue of fact.’” G & H Towing Co. v. Magee, 347 

S.W.3d 293, 297 (Tex. 2011) (per curiam) (quoting Gaines v. Hamman, 358 

S.W.2d 557, 563 (Tex. 1962)). However, summary judgment may only be granted 

upon grounds expressly asserted in the summary judgment motion. Id. at 297; see 

also McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341 (Tex. 1993).

Granting a summary judgment on a claim not addressed in the summary judgment 

motion therefore generally constitutes reversible error. Magee, 347 S.W.3d at 297; 

Chessher v. Sw. Bell Tel. Co., 658 S.W.2d 563, 564 (Tex. 1983) (per curiam).

Fraud Claim and Standing

We agree with Kay that the trial court erroneously granted summary 

judgment in favor of Evelyn and determined Kay lacked standing when Evelyn’s 

summary judgment motion failed to address Kay’s claim that Evelyn “fraudulently 

induced the Rule 11 Agreement and release” of Kay’s half-interest in Schulze, Jr.’s 
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estate. 

Kay asserted a fraud claim1in her Petition for Declaratory Judgment, stating 

in relevant part:

This action is brought pursuant to 35.005(3) of the Texas Civil 

Practice & Remedies Code, which provides:

“[a] person interested . . . in the administration of . . . the estate 

of a decedent . . . may have a declaration of legal relations in 

respect to the . . . estate: (3) to determine any question arising in 

the administration of the . . . estate[.]”

There is a real and justiciable controversy between the 

Administrat[r]ix of the Estate of Benton Schulze, Jr. and Applicant.

. . . the actions of Administratrix of the Estate of Benton 

Schulze, Jr. in concealing the oil, gas and mineral leases, and mineral 

and/or royalty interests, constitute extrinsic fraud. Montgomery v. 

Kennedy, 669 S.W.2d 309, 313 (Tex. 1984). Applicant relied upon

the disclosures provided by Administratrix, since the values for the 

oil, gas and mineral leases, and the mineral and/or royalty interests 

had never been valued since they were listed as “Unknown” on the 

1992 Inventory. In discussions to settle the surface and personal 

property contained within the Estate of Benton Schulze, Jr., 

Administratrix stated that the mineral leases and interests would be 

settled at a later date, once their value was known. Applicant relied 

upon this statement and Administratrix’s disclosure that the values of 

the interests and leases were unknown. At the time the Rule 11 

Settlement Agreement was signed, Administratrix breached her 

fiduciary duty because she had knowledge of the values of the 

mineral, oil, and gas leases, and the mineral and/or royalty interests 

and/or when later learned of the same, but she failed to update the 

inventory and disclose the values of the leases and interests to

Applicant.

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“Like a broader common-law fraud claim, a fraudulent-inducement claim requires proof 

that: (1) the defendant made a material misrepresentation; (2) the defendant knew at the time 

that the representation was false or lacked knowledge of its truth; (3) the defendant intended that 

the plaintiff should rely or act on the misrepresentation; (4) the plaintiff relied on the 

misrepresentation; and (5) the plaintiff's reliance on the misrepresentation caused injury.” Int’l 

Bus. Machs. Corp. v. Lufkin Indus., LLC, 573 S.W.3d 224, 228 (Tex. 2019).
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Thus, Applicant seeks an alternative declaratory judgment that 

the Rule 11 Agreement is void on grounds of extrinsic fraud.

Kennedy v. Hyde, 682 S.W.2d 525, 529 (Tex. 1984).

A release is a contract and, like any other contract, it is subject to avoidance on 

grounds of fraudulent inducement. Italian Cowboy Partners, Ltd. v. Prudential 

Ins. Co. of Am., 341 S.W.3d 323, 331 (Tex. 2011); Schlumberger Tech. Corp. v. 

Swanson, 959 S.W.2d 171, 178 (Tex. 1997). “In other words, fraudulent 

inducement is almost always grounds to set aside a contract despite a merger 

clause, but in certain circumstances, it may be possible for a contract’s terms to 

preclude a claim for fraudulent inducement by a clear and specific disclaimer-ofreliance clause.” Italian Cowboy Partners, Ltd., 341 S.W.3d at 331; Schlumberger 

Tech. Corp., 959 S.W.2d at 181. Accordingly, when an estate administrator

misrepresents the value of an estate in order to induce a beneficiary to execute a 

release, the beneficiary has standing to assert a fraud claim as well as seek the 

administrator’s removal. See McAdams v. McAdams, No. 07-01-0343-CV, 2002 

WL 342639, at *6-7 (Tex. App.—Amarillo Mar. 1, 2002, no pet.).

Kay has standing to assert a claim that she was fraudulently induced to sign 

the Agreement. See id. Here, the trial court seemingly presumed that the 

Agreement was valid and there was no fraud. Although Kay pleaded a fraud 

claim, Evelyn never addressed and proved as a matter of law that there was no 

fraudulent inducement in this case. Instead, Evelyn made one conclusory 

statement in her motion for summary judgment: “It is abundantly clear that all 

parties had the same knowledge or means of obtaining the same knowledge and 

there was no fraud, misrepresentation, concealment, or conduct otherwise 

inequitable on the part of Schulze when the Rule 11 Agreement was executed or at

any other time.” Evelyn failed to explain why there was “no fraud, 

misrepresentation, concealment” and did not point to any supporting evidence.
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Because Evelyn’s summary judgment motion did not address Kay’s fraud 

claim, the trial court reversibly erred by dismissing it. See Magee, 347 S.W.3d at 

297-98. The trial court also reversibly erred in finding that Kay lacked standing

when it presumed the underlying Agreement was valid and not fraudulently 

induced, despite Evelyn’s failure to prove as a matter of law there was no fraud. 

See id. Accordingly, we sustain Kay’s first issue; therefore, we need not address 

her second issue.

CONCLUSION

Having sustained Kay’s first issue, we reverse the trial court’s Final 

Summary Judgment and remand this case to the trial court for further proceedings.

/s/ Meagan Hassan

Justice

Panel consists of Justices Jewell, Zimmerer, and Hassan.