NUMBER 13-12-00288-CV & NUMBER 13-12-00339-CV

COURT OF APPEALS

THIRTEENTH DISTRICT OF TEXAS

CORPUS CHRISTI - EDINBURG 

 

IN THE ESTATE OF BETTY LOU HUGHES

 

On appeal from the County Court 

of Jefferson County, Texas.

 

MEMORANDUM OPINION

Before Justices Rodriguez, Perkes and Wittig1

Memorandum Opinion by Justice Wittig

In an opinion and judgment issued on October 24, 2013, we affirmed the trial 

court’s judgment removing appellant Michael Alton Hughes as independent executor of 

the Betty Lou Hughes Estate and the order appointing his brother David Lee Hughes in 

his stead. See generally In re Estate of Betty Lou Hughes, No. 13-12-00288-CV, 2013

WL ___ (Tex. App.—Corpus Christi Oct. 24, 2013, no pet. h.). Appellant, Michael Alton 

 

1 Retired Fourteenth Court of Appeals Justice Don Wittig assigned to this Court by the Chief 

Justice of the Supreme Court of Texas pursuant to the government code. See TEX. GOV’T CODE ANN § 

74.003 (West 2005).
2

Hughes thereafter filed a motion for extension of time to file a motion to reconsider and/or 

en banc consideration which we herein grant. On November 18, 2013, appellant filed a 

motion to reconsider or for rehearing. We deny the motion; however, we withdraw our 

previous opinion and judgment, and issue this opinion and judgment in their place.

These appeals

2

are from the trial court judgment removing appellant Michael Alton 

Hughes as independent executor of the Betty Lou Hughes Estate, docketed in our cause 

number 13-12-00288-CV, and the order appointing his brother David Lee Hughes in his 

stead, docketed in our cause number 13-12-00339-CV. These matters were 

consolidated for briefing purposes, and in the interests of efficiency, we issue one opinion 

addressing both causes.

In summary, appellant contends the trial court erred because it failed to comply 

with Probate Code requirements, the evidence was legally and factually insufficient, 

multiple findings of fact were not supported by the evidence, and David Hughes was not 

qualified to be executor because of a conflict of interest. Appellees David Hughes, Mark 

Hughes and Chris Hughes are the other beneficiaries of the estate. We will affirm the 

trial court’s removal judgment and appointment order.

I. BACKGROUND

Betty Lou Hughes died February 7, 2008, leaving a valid will dated February 16, 

1983. Appellant received letters testamentary on March 12, 2008. Appellant and 

appellees are the beneficiaries of the estate and are to share and share alike. An initial 

inventory and list of claims was filed on January 27, 2009 and was amended January 27, 

 

2

 These cases are before the court on transfer from the Ninth Court of Appeals in Beaumont, 

Texas, pursuant to a docket equalization order the Texas Supreme Court issued. See TEX. GOVT. CODE 

ANN. § 73.001 (West 2013).
3

2010. Appellees filed a petition for removal of the executor and appointment of a 

successor on April 13, 2011. Appellees subsequently filed an amended petition for 

removal, a demand for accounting, and in the alternative, a demand for distribution on 

December 14, 2011. On January 25, 2012, the trial court ordered appellant to prepare 

an updated accounting, which was completed on February 15, 2012, and which did not 

indicate a need for the estate to stay open and not be distributed. After a hearing on 

March 7, 2012, the trial court removed appellant as executor and subsequently appointed 

David Hughes as independent executor.

The court made multiple findings regarding the removal of appellant as executor. 

It found that appellant misapplied estate funds of $2,774 to retain an attorney for personal 

business. Appellant as executor also used estate funds of $2,075.95 to buy an airline 

ticket for personal use. He accepted an unreported finder’s fee on the sale of estate 

property on two occasions. Appellant “misapplied [e]state funds” by receiving $4,900

from the IRA account while not disclosing the transaction, not making a similar distribution 

to the other heirs, and not reimbursing the estate for this amount. In July 2011, appellant 

filed estate returns late for 2008 through 2010. 

In its conclusions of law, the trial court found appellant showed neither sufficient 

cause supported by oath why a final settlement of the estate was not made within three 

years as required nor just cause to warrant the estate remaining open more than three 

years as required by section 222 of the Texas Probate Code. See TEX. PROB. CODE ANN. 

§ 222(b)(6) (West Supp. 2011). Also in its conclusions of law, the court found that 

appellant improperly deducted life insurance proceeds payable independently to David 
4

Hughes from an estate distribution to him. The court concluded appellant was guilty of 

mismanagement and misapplication of the estate and should be removed pursuant to 

section 222 of the probate code. The court entered a judgment removing appellant as 

executor and subsequently appointed David Hughes as executor.

II. STANDARD OF REVIEW

An appellate court reviews a trial court's order removing an independent executor 

for an abuse of discretion. In the Estate of Hoelzer, 310 S.W.3d 899, 905 (Tex. 

App.—Beaumont 2010, pet. denied) (citing Lee v. Lee, 47 S.W.3d 767, 789 (Tex. 

App.—Houston [14th Dist.] 2001, pet. denied); Spies v. Milner, 928 S.W.2d 317, 319 

(Tex. App.—Fort Worth 1996, no writ)). An appellate court will not overturn the trial 

court's decision merely because the appellate court might have reached the opposite 

conclusion, but will do so when the trial court's decision is arbitrary, unreasonable, and 

without reference to any guiding rules and principles. Lee, 47 S.W.3d at 786 (citing 

Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex. 1997)). Under an abuse of discretion 

standard of review, we must make an independent inquiry of the entire record to 

determine if the trial court abused its discretion and we are not limited to reviewing the 

sufficiency of the evidence to support the findings of fact made. See Chrysler Corp. v. 

Blackmon, 841 S.W.2d 844, 853 (Tex. 1992) (orig. proceeding). We will not analyze the 

trial court's fact findings separately from our analysis of whether the trial court abused its 

discretion in removing someone as administrator. In re Estate of Clark, 198 S.W.3d 273, 

275 (Tex. App.—Dallas 2006, writ denied).
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III. ANALYSIS

Appellant argues against the trial court’s findings regarding the misapplication of 

estate funds in the amounts of $2,774 and $4,900 because the funds were in fact 

accounted for as distributions to him. Appellant needed to pay his personal attorney so 

he took the $2,774 from the estate checking account and either paid the money directly to 

his attorney, or paid himself and then the attorney. There is evidence on the November 

2010 disbursement sheet that appellant showed a $2,774 distribution to himself, but both 

the testimony and disbursement sheet showed no contemporaneous or corresponding 

disbursements to the other beneficiaries. There is no entry of the $4,900 also claimed to 

be a disbursement. Rather, the record reflects appellant received a $4,900 check 

payable to him personally from the estate’s IRA account and it was deposited to his 

personal account. Appellant testified he planned on making a distribution to others but 

did not get to it. “I received that $4,900 from UBS right before the first of the year. I just 

held on to it. It was made out to me, so I didn't want to get that confused with trying to 

deposit it into the estate funds.” Appellant also paid personal income tax on the 

distribution. His justification was that he expected a $55,000 rent check right after the 

first of the year when he planned to make more distributions.

The trial court also found a $2,075.95 misapplication of funds. Appellant testified 

he needed to purchase an airline ticket but his personal credit card lacked a sufficient 

available balance so he used the estate’s credit card. He claims to have deposited 

$2,380 into the estate the same day, but the trial court found it could not determine if a 

reimbursement was made because there is no such reference in the accounting filed on 
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February 15, 2012. Appellant admitted he had no documentation of the reimbursement 

and no like distribution was made to the other beneficiaries.

The trial court found that appellant, as independent executor, received a finder’s 

fee or commission for the sale of estate properties in Nederland and Center, Texas. 

Receipt of the fees was not disclosed, and the real estate settlement documents did not 

reflect the payments, which represented a referral fee of twenty-five percent of the selling 

side commission. Appellant admitted receiving the funds but claimed he did not receive 

the fee from the estate although the twenty-five percent fee was based upon a 

percentage of the real estate commissions in the property sales and came from the 

broker. No disclosures were made in the estate filings. We note that appellant is a 

licensed realtor.

Appellees cite In the Interest of Roy for the well established principle that a 

fiduciary relationship creates a duty to disclose. See 249 S.W.3d 592, 597 (Tex. 

App.—Waco 2008, no pet.) (citing Tempo Tamers, Inc. v. Crow-Houston Four, Ltd., 715 

S.W.2d 658, 669 (Tex. App.—Dallas 1986, writ ref'd n.r.e.)). There, the executor took a 

fee for the sale of the residence without disclosing this in the accounting and also reduced 

the rent. Id. The executor argued that the estate had no money to pay his 

administrative fees and that the $5,000 was the only money he had ever received for his 

work for the estate. Id. “These arguments cannot justify Clark's failure to disclose. 

Therefore, the trial court acted within its discretion to remove Clark as independent 

executor.”3 Id.

 

3 Clark’s failure to disclose his fee was exacerbated by the fact he lowered the rent to a related 

entity by almost half. In the Interest of Roy, 249 S.W.3d 592, 597 (Tex. App.—Waco 2008, no pet.). 
7

Appellant disputes the court’s finding that he failed to make a final settlement of the 

estate within three years after the grant of letters as required by subsection (6) of section 

222 of the probate code. See TEX. PROB. CODE ANN. § 222. The trial court’s conclusion 

of law stated that appellant as independent executor had not shown sufficient cause,

supported by oath, as to why a final settlement of the estate had not been timely made 

and there was not sufficient cause supported by oath to justify the estate remaining open 

for more than three years after letters testamentary were granted. Appellant argues he 

had sufficient cause for his failure to settle the estate because he was denied information 

from Chris Hughes regarding the valuation of Delta Security, a family owned company. 

The will provided that total distributions were to be of equal value but there was no 

requirement for equal in kind distribution. The executor had discretion to make 

distributions in kind, partly in kind, partly in money, and by undivided interests. The will 

also provided that distributions in kind should be valued at fair market value as of the date 

or dates of distribution.

Appellees counter that the new shares of stock were already issued by Delta 

Security, pursuant to appellant’s request. Each beneficiary received his respective 

shares of 600 each. Furthermore, the value of the stock in the estate was determined by 

an accounting firm hired by the estate to be $250,000 as of the day of Betty Lou Hughes’s

death. In appellant’s sworn inventory filed on January 22, 2009, he stated the company 

stock was worth $250,000. In his answers to interrogatories, appellant stated: “[U]nder 

Texas law ownership of the decedent's stock automatically became vested in the 

 

Here, it was also alleged that appellant significantly lowered the price on the Netherland property from 

$239,000 to $170,000 without consultation or explanation. The trial court, however, made no finding in this 

particular regard.
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beneficiaries once the [w]ill was admitted to probate. A formal assignment of the 

decedent's shares of stock is not required. The corporation's board of directors . . . may 

authorize the issuance of new stock certificates."4

The trial court also found that the accounting filed on February 15, 2012 did not 

indicate a need for the estate to stay open and not be distributed. Further, in its 

conclusions of law the court found appellant’s inquiries concerning Delta Security were 

not relevant to the estate and were not necessary to the administration or distribution of 

the estate.5 In any event, appellant clearly did not make a final settlement within three 

years and the time was not extended by the trial court based upon a showing of sufficient 

cause supported by oath. See id. § 222 (b)(6) (requiring executor as personal 

representative to make a final settlement within three years after the grant of letter unless 

extended by the court upon showing of sufficient cause supported by oath) (emphasis 

added).6 In light of the fact that the new certificates had already been equally issued by 

the corporation, the fact that appellant took the position that the new stock ownership in 

the company vested upon the death of Betty Lou Hughes, and the appellant’s failure to 

obtain an extension, we cannot disagree with the trial court’s findings and conclusions 

based upon the record. 

Appellant disputes the trial court’s finding that he failed to timely pay property taxes 

 

4

 None of the parties briefed this declaration by appellant. See TEX. PROB. CODE ANN. § 37 (West 

Supp. 2011).

5

Appellant does not address this conclusion of law.

6

Section six is the only provision of section 222 applicable here that specifically addresses 

executors. The gravamen of both appellant and appellees’ arguments are directed principally to section 

222 and fail to address section 149c even though this section specifically addresses the removal of an 

independent executor and was pled by appellees. See TEX. PROB. CODE ANN. §§ 222,149c.
9

which resulted in the payment of penalties. To the contrary, appellant’s deposition 

testimony filed with the trial court on January 23, 2012 in response to appellant’s motion 

to abate, indicated at least one occasion when the taxes were not timely paid.7 

A number of other lesser disputes were brought to the trial court’s attention and 

included in its findings and conclusions. These included late filing of the estate tax 

returns, misapplying estate funds to purchase other securities such as Frontera Reserves 

and Canargo Energy, failing to place “For Sale” signs on several estate properties 

purportedly for sale, failing to deal with mineral interests, and failing to provide the 

physical location and status of seventeen firearms. In light of our conclusions below, we 

deem it unnecessary to write on each of these matters. See TEX. R. APP. P. 47.1.

Appellant argues the trial court erred by entering its March 9, 2012 order removing 

him as executor because the court failed to state a reason as required by section 222(b). 

See TEX. PROB. CODE ANN. § 222. The order states that the executor was removed 

because of noncompliance with the terms of the will. Appellees point out that several of 

the specified reasons for removal under section 222 are found in the trial court’s findings 

of fact and conclusions of law. We agree with appellant that section 222 requires 

denominating the grounds for removal within the order. However, in light of the fact the 

trial court specified a number of violations of sections 222 and 149c in its findings and 

legal conclusions, the error probably did not cause the rendition of an improper judgment 

and did not prevent appellant from properly presenting his case to the appellate court. 

TEX. R. APP. P. 44.1; see Eastland v. Eastland, 273 S.W.3d 815, 827 (Tex. 

 

7

As stated previously, we review the contents of the entire record in determining whether the trial 

court abused its discretion in removing the independent executor. See Chrysler Corp. v. Blackmon, 841 

S.W.2d 844, 853 (Tex. 1992) (orig. proceeding). 
10

App.—Houston [14th Dist.] 2008, no pet.) (discussing harmless error with regard to 

appointment of successor independent executor).

Appellant also argues that the will states he should not be liable for “mistakes or 

errors in judgment” but shall be liable only for “bad faith or dishonesty.” Appellant seems 

to argue that this exculpatory language trumps provisions of the Texas Probate Code. 

He argues there are no allegations or evidence under items (2), (3), (5) or (7) of this

section. See TEX. PROB. CODE ANN. § 222. We agree in part. However, both section 

(6), failure to make a final settlement within three years unless extended by the court, and 

wrongful misapplication of estate property under 149C support the trial court’s actions in 

removing appellant as executor. See id. §§ 222(b)(6), 149c(a)(2). Appellant cites no 

authority that the exculpatory provision of the will abrogates statutory authority or the 

inherent power of the trial court to remove an executor under the particular circumstances 

of this case. We find no such authority and accordingly overrule this issue.

Finally, appellant argues the trial court erred when it determined David Hughes 

was qualified to act as successor independent executor because he had a conflict of 

interest with the estate. The alleged conflict, the argument goes, arises from David 

Hughes’s testimony regarding a letter written by his mother, the testatrix. The letter, 

which is barely decipherable, seems to state she wanted all her assets to be distributed 

equally between her four sons to include insurance policies, IRAs, CDs, etc. David 

testified, “I choose not to give it any meaning.”

Appellees counter that the letter has not been qualified as a will or codicil because 

it has not been admitted to probate by a court of competent jurisdiction, citing Teague v. 
11

Wylie, 110 S.W.2d 941, 944 (Tex. Civ. App.—Fort Worth,1937, no writ). Appellant has 

not shown that the letter has been admitted into probate. We overrule this issue.

IV. CONCLUSION

Section 222(b)(6) of the Probate Code provides for the removal of a executor if he 

fails to make a final settlement within three years, unless the time is extended by the court 

upon showing of sufficient cause supported by oath. There is no extension of time in this 

case. We hold that the trial court's findings and conclusions concerning appellant’s 

alleged violations are supported by ample evidence. See Carmichael v. Carmichael, 

432 S.W.2d 129, 130 (Tex. Civ. App.—Waco 1968, writ ref’d. n.r.e.). Accordingly, the 

trial court did not abuse its discretion in removing appellant as executor. 

We also note that probate code section 149C(a)(2) authorizes removal if sufficient 

grounds appear to support the 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 his care. See Ali Akbar Mohseni v. Hartman, 363 

S.W.3d 652, 659 (Tex. App.—Houston [1st Dist.] 2011, no pet.); In the Estate of Hoelzer, 

310 S.W.3d 899, 907 (Tex. App.—Beaumont 2010, pet. denied) (holding court need not 

decide whether section 149C precludes removal based on an executor's 

"post-appointment" disqualification under section 78, because sufficient grounds support 

removal under the provisions of section 149C); see also Kappus v. Kappus, 284 S.W.3d 

831, 835–36 (Tex. 2009). We hold that the wrongful misapplication of estate funds found 

by the trial court supports the statutory grounds for removal under section 149C(a)(2). 

Stated otherwise, sufficient grounds appear to support the belief that appellant had
12

misapplied or was about to misapply all or any part of the property committed to his care. 

TEX. PROB. CODE ANN. §149C(a)(2). 

Appellant has not shown that David Hughes is disqualified from serving as 

independent executor. Indeed, David Hughes is named as alternate independent 

executor in Betty Lou Hughes’s will. Appellant’s issues are overruled.

The judgment of removal and the appointment order of the trial court are affirmed.

Don Wittig

Justice

Delivered and filed the 

16th day of January, 2014.