ChiefJustice ^V^7*7^*^ Clerk James T. Worthen ^s^ao*^ c:,vn IY >s jA SK

Twelfth Court of Appeals

Justices q hi:i Staff Att< >rney

Sam Griffith Margaret Hussey

Diane DeVasto

Friday, March 31, 2006

Mr. William R. Pemberton Mr. Timothy D. Salley

P. O. Box 1112 604 East Goliad Avenue

306 N. 7th Street Crockett, TX 75835

Crockett, TX 75835

RE: Case Number: 12-04-00154-CV

Trial Court Case Number: 8444

Style: In the Estate of Eldridge Lee Brimberry, Deceased

Enclosed is a copy of the Memorandum Opinion issued this date in the above styled and

numbered cause. Also enclosed is a copy ofthe court's judgment.

Very truly yours,

CATHY S. LUSK, CLERK

By: KtilUJUL. MA

KatrinaMcClenny, Chief Deputy Clerk

CC: Hon. John Ovard

Judge Sarah Tunnell Clark

Ms. Bridget Lamb

1517 West Front Street • Suite 354 • Tyler, TX 75702 • Tel: 903-593-8471 • Fax. 903-593-2193

Serving Anderson, Angelina, Cherokee, Gregg, Henderson, Houston, Nacogdoches. Rains. Rusk. Sabine. San Augustine. Sketby, Smith. Trinity. I'psbur.

Van Zandt and Wood Counties

www.12thcoa.courts.state.tx.us
NO. 12-04-00154-CV

IN THE COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT

TYLER, TEXAS

IN THE ESTA TE OF § APPEAL FROM THE

ELDRIDGE LEE BRIMBERRY, § COUNTY COURTATLAW

DECEASED § HOUSTON COUNTY, TEXAS

MEMORANDUM OPINION

This is a probate case. Appellants, Jerry Lee Brimberry, Alice Sue Colburn, Norma Kay

Durfee, and Tonya Renee Pelham, applied for probate of the will of Eldridge Lee Brimberry,

deceased. Theyalsosoughtto havetwo ofthe executors namedin thewill appointed asindependent

co-executors and to have Delores McComb McDonald, the third executor named by the testator,

disqualified from serving asindependent co-executor. The trial court admitted the will to probate

and appointed all three executors named in the will as independent co-executors. The trial court

required each independent executor to post a $600,000.00bond although the will provided that no

bond should be required ofthem. Appellants complain in their first issue that the trial court erred

in requiring Jerry Lee Brimberry and Norma Kay Durfee to give bond as a condition to their

qualifyingas independentco-executors. In their secondissue, Appellantscontendthat the trialcourt

abused its discretion in failing to find that DoloresMcComb McDonald was disqualified to act as

independent co-executor. We modify the trial court's order and affirm as modified.

Background

Eldridge Brimberry died on August 21, 2003. His spouse of thirty-six years, Errolene

Brimberry, diedfouranda half years earlier onMarch 25,1999. Herestateconsisted of$10,000.00
in separate property and one-halfofthe community estate, her halfvalued at $383,869.00. Her will

named her husband, Eldridge, as independent executor and trustee ofthe trust created by the will.

The trust directed that the trustee pay to her husband out of the income of the trust estate such

amounts "as are reasonably required, in the trustee's discretion, for his health, maintenance and

support in his accustomed manner ofliving at my death."

Apparently, Eldridge made no effort to segregate the property of the trust from his own

property. On March 6, 2001, some two years after Errolene's death, Eldridge changed the name on

his checking account in the First State Bank in Grapeland to "E. L. Brimberry or Delores McComb."

The account created was a joint account with right ofsurvivorship. The account had been opened

originally on March 18, 1981 as a joint account of "E. L. Brimberry or Errollene Brimberry," joint

tenants with right of survivorship. At Errollene's death, the account balance was $1,244.00. At

Eldridge's death, the account contained $64,292.94. After Eldridge's death, Delores withdrew all

but $1,200.00 from their joint checking account.

The inventory ofErrollene's estate shows that at her death she also possessed a community

one-halfinterest in two certificates of deposit issued by the Grapeland State Bank worth a total of

approximately $89,000.00, her community one-halfinterest amounting to $44,500.00. One ofthese

certificates of deposit was closed on March 6, 2001, two years after Errollene's death. It was

replaced on that date by a new certificate styled as E. L. Brimberry, payable on death to Delores

McComb McDonald. At Eldridge's death, there was $70,000.00 in the account represented by the

certificate of deposit. Delores claims the entire account as her own by virtue of the "payable on

death" clause to her.

The inventory also shows that Errollene possessed a community one-half interest in an

Edward Jones account having a total value of $76,784.00, her half interest being $38,392.00. A

Paine Weber account included in the inventory contained $199,562.00, Errollene's half interest

amountingto $99,781.00. Accordingto the evidenceadducedat trial, at Eldridge's death fouryears

later, the Edward Jones account had grown to $171,000.00 and the Paine Weber account contained

$191,000.00. The total appreciation in the two accounts between the deaths of Errollene and

Eldridge amounted to $86,654.00.

Shortlybefore Eldridge died, Delores collected a $297.00 payment on a contract for deed due
from Willie Shepherd. Eldridge endorsed the check, and Delores deposited it in the checking

account from which she withdrew all but $1,200.00. The contract for deed had been the community

property ofErrollene and Eldridge, and Errollene's one-halfinterest became part ofthe trust estate

ofthe trust created by her will.

Appellants contend that after Errollene's death, Eldridge failed to segregate his property from

the property ofthe trust created by Errollene's will. Since the trust property remained commingled

with his own property, Appellants argue that the entire commingled fund must be treated as subject

to the trust. While avoiding any accusation that their father breached his fiduciary duty in his

management of the trust estate, they nevertheless maintain that his attempt to convey the bank

accounts was ineffectual to transfer ownership to Delores. Therefore, they contend that Delores's

claim as sole owner of the checking account and the certificate of deposit is a claim adverse to

Eldridge's estate rendering her unsuitable to act as independent co-executor. They further contend

that as one ofthe successor trustees to her father ofErrollene's trust, she breached her fiduciary duty

in withdrawing money from the bank account, at least part ofwhich was property belonging to the

trust estate. Similarly, they regard her claim to the entire certificate of deposit payable to her on

Eldridge's death as a breach of her duty as trust fiduciary.

Delores contends that as trustee ofErrollene's trust, Eldridge had broad powers to do all acts

that an absolute owner of the property could do, subject only to his fiduciary duty. In Delores's

view, Eldridge was free to consider the bank accounts as his own and an offsetting portion ofthe

investment accounts as trust property if he believed that would benefit the trust. The growth in the

brokerage accounts together with his portion ofthe bank accounts exceeded the total amount ofthe

certificate of deposit payable to Delores on his death and the joint checking account that Delores

took as survivor upon his death.

At the conclusion ofthe final hearing, the court determined that Delores was entitled to the

balance of the joint checking account as Eldridge's survivor and that she was entitled to the

certificate ofdeposit which Eldridge had directed the bank to pay to her on his death. Therefore, she

was not making an adverse claim to property ofEldridge's estate. Hence, she was not "unsuitable"

to act asindependent co-executor. The courtappointedas independentco-executorsallthreepersons

named in Eldridge's will to act in that capacity conditioned upon their each giving a $600,000.00
bond. The trial court noted that Eldridge had been married three times and that each of the

independent co-executors named was a child of a different marriage.

Bond Required of Independent Co-Executors

In their first issue, Appellants contend the court erred in requiring Jerry Lee Brimberry and

Norma Kay Durfee to post bond contrary to the will ofthe testator that no bond be required ofthem.

Delores maintains that portion of the trial court's order setting bond is interlocutory and that the

appeal on this ground should be dismissed. As authority, Delores cites Estate of Navar v.

Fitzgerald, 14 S.W.3d 378, 380 (Tex. App.-El Paso 2000, no pet.).

Applicable Law

Texas Probate Code section 149 states that ifthe will provides that the independent executor

shall not be required to give bond, the testator's direction shall be observed, and no bond required

unless

it be made to appear at any time that such independentexecutoris mismanaging the property, or has

betrayed or is about to betray his trust, or has in some other way become disqualified, in whichcase,

upon proper proceedings had for that purpose, as in the case of executors or administrators acting

under orders of the court, such executor may be required to give bond. (Emphasisadded).

Tex. Prob. Code Ann. § 149 (Vernon 2003).

A person is disqualified to serve as an executor if he is:

(a) An incapacitated person;

(b) A convicted felon . . . ;

(c) A non-resident . . . who has not appointed a resident agent to accept service of

process. . . ;

(d) A corporation not authorized to act as a fiduciary in this state; or

(e) A person whom the court finds unsuitable.

Id. § 78.
Texas Probate Code section 195 reiterates the mandate ofsection 149 that no bond maybe required

of a qualified and suitable person named as executor by the testator.

A probate order need not fully dispose ofthe entire proceeding in order to be appealable. See

Crowson v. Wakeham, 897 S.W.2d779,781 (Tex. 1995). "However, [theorder] must be one which

finally disposes of and is conclusive ofthe issue or controverted question for which that particular

part ofthe proceeding is brought. . . ." Id.

Analysis

The issues presented to the trial court in this case were the admissibility ofthe will to probate

and the suitability ofone ofthe co-executors named by the testator. The sole controverted question

was the suitability ofco-executor Delores McComb McDonald. Although the trial court's order did

not finally dispose of the entire probate proceeding, it disposed of all questions presented in the

application for probate.

In Navar, the probate court found that the independent executor, Navar, had not obeyed a

court order to appear and show cause why he had failed to pay certain claims ordered paid by the

court. The probate court therefore ordered Navar to post bond or face removal as independent

executor. Navar, 14 S.W.3dat379. The court ofappeals held that the order requiring bond was not

a separable part ofthe proceeding, but only a part ofthat portion ofthe administration dealing with

the satisfaction of creditors. Nothing in the record indicated that all creditor's claims had been

disposed of. Therefore, the order in question was not appealable because it was not conclusive of

the issue or controvertedquestion for which that particularpart ofthe proceedingwas brought. The

order in the case at bar was conclusive ofthe controverted questions before the probate court. We

conclude that under the test announced in Crowson, the order in this case is an appealable order.

The Probate Code vests the testator with the absolute power to select his own representative,

and the probate court must appoint the person nominated in the will as independent executor unless

that person is found to be disqualified or unsuitable. Hunt v. Knolle, 551 S.W.2d 764, 767 (Tex.

Civ. App.-Tyler 1977, no writ). When the testator provides that the independent executor named

in the will shall serve without bond, the testator's direction must be observed, unless it appears at

any time that the independent executor is mismanagingthe property, or has betrayed or is about to

betrayhis trust, or has in someotherwaybecomedisqualified. Tex. Prob. Code Ann. § 149. The
trial court found the named independent co-executors were not disqualified or unsuitable. There is

a complete absence of evidence in the record of acts or circumstances contemplated by the Probate

Code that would authorize the probate court to ignore the testator's direction that no bond be

required ofthe independent co-executors. The trial court erred in requiring bond ofthe independent

co-executors absent any ofthe grounds therefor recognized by the Probate Code. Appellant's first

issued is sustained.

Suitability of Delores McCoivib McDonald

In their second issue, Appellants complain that the trial court abused its discretion in failing

to find that Delores McComb McDonald is a person who is unsuitable to serve as independent coexecutor ofthe estate. Appellants contend that Delores McComb McDonald is unsuitable because

she claims property ofthe estate as her own.

Applicable Law

The trial court is given broad discretion in determining whether an individual is suitable to

serve as an executor or administrator. Dean v. Getz, 970 S.W.2d 629, 633 (Tex. App.-Tyler 1998,

no pet.); Kay v. Sandler, 704 S.W.2d 430, 433 (Tex. App.-Houston [14th Dist] 1985, writ refd

n.r.e.). The standard ofreview is abuse of discretion. Olguin v. Jungman, 931 S.W.2d 607, 610

(Tex. App.-San Antonio 1996, no writ).

No person found unsuitable by the probate court is qualified to serve as an executor or

administrator. Tex.Prob.CodeAnn. § 78(e) (Vernon 2003). An individual claiming under the will

or asserting a claim in probate against the estate is not unsuitable merely because of that claim or

assertion. B oyles v. Gresham, 158 Tex. 1 58, 3 09 S.W.2d 5 0, 54 (1958). A different case is

presented, however, when a named executor claims adversely to the estate, as his own, propertywhich

is owned, claimed, or should be claimed by the estate. Bays v. Jordan, 622 S.W.2d 148, 149 (Tex.

App.-Fort Worth 1981, no writ). The reason underlying the distinction is that a beneficiary, creditor,

or claimant does not dispute the estate's title, but seeks satisfaction of his claim from the estate's

assets. But one claiming as his own assets claimed by the estate is denying the estate's title. Hence,

his personal interests are so adverse to those ofthe estate that he is unsuitable to act as the estate's

representative. Id.;seealsoHaynes v. Clanton, 257 S.W.2d789, 792 (Tex. Civ.App.-ElPaso 1953,
writ dism'd by agr.). The administrator in Haynes was found unsuitable ("incapable ofperforming

the duties of his trust") to continue to act as administrator, because he owned an eleven percent

interest in a bank that had brought suit against the administrator to recover all of the assets ofthe

estate contending that all ofthe property had been acquired by the deceased with money embezzled

from the bank. Haynes, 257 S.W.2d at 792. In Bays, the court of appeals decided that the trial court

had abused its discretion in granting letters testamentary to a joint venturer with the decedent who

claimed substantially all ofthe estates assets by virtue ofa written agreement with the testator creating

rights of survivorship in their joint ventures. Bays, 622 S.W.2d at 149. In Hitt v. Dumitrov, 598

S.W.2d 355, 355-56 (Tex. Civ. App.-Houston [14th Dist.] 1980, no writ), an individual was

disqualified from serving as administrator of the estates of both a husband and his wife who died

together in a plane crash, because each estate had adverse claims to the same insurance proceeds. In

a later case, a surviving spouse was found unsuitable, because she claimed property ofher deceased

husband's separate estate as community property. Ayala v. Martinez, 883 S.W.2d 270, 272 (Tex.

App-Corpus Christi 1994, writ denied).

Where a trustee has wrongfully commingled trust funds with his own, the burden is on the

trustee or his successors to distinguish his funds from those ofthe beneficiary; ifthe trustee is unable

to do so, the entire commingled fund or the property purchased therewith becomes subject to the trust.

Eaton v. Husted, 141 Tex. 349,172 S.W.2d 493, 498-99 (1943); Logan v. Logan, 138 Tex. 40,156

S.W.2d 507, 510 (1941). If, however, the commingling is not wrongful, the basis for the general rule

is removed and no presumption is raised that the commingled fund and property purchased with it is

subject to the trust. Logan, 156 S.W.2d at 510; Peirce v. Sheldon Petroleum Co., 589 S.W.2d 849,

853 (Tex. Civ. App.-Amarillo 1979, no writ). The trustee is presumed to have withdrawn his own

money first, if he or she draws on an improperly commingled fund. Batmanis v. Batmanis, 600

S.W.2d 887, 890 (Tex. Civ. App.-Houston [14th Dist.] 1980, writ refd n.r.e.).

Analysis

Appellants do not directly claim that Eldridge Brimberry violated his fiduciary duty as trustee

of the Errollene Brimberry Testamentary Trust. They essentially argue that unless and until he

formally segregated the trust property from his own, all of his property and all of the trust property

was subject to the trust. As a result, they argue, he lacked the power to make a nontestamentary
transfer of the bank accounts to Delores McDonald because an undetermined amount of the bank

deposits were trust funds. Therefore, his creation of a joint checking account with right of

survivorship in Delores as well as the designation of Delores as the payee upon his death of the

certificate of deposit was not effective. Hence, they argue, Delores holds or claims these funds

adversely to Eldridge's estate, which renders her unsuitable.

As trustee of Errollene's trust, Eldridge had broad powers "to do all acts, to take all the

proceedings, and to exercise all the rights, powers, and privileges which an absolute owner would

have," subject always to the discharge of his fiduciary obligations. Errolene's will directed that the

trustee may pay her surviving husband (Eldridge)

[s]uch amounts out of the income of the trust estate as are reasonably required, in the trustees'

discretion, for his health, maintenance and support in his accustomed manner ofliving at the time of

my death.

The evidence at trial showed that Eldridge fully discharged his fiduciary responsibilities. When he

died he had approximately $171,000.00 in the Edward Jones account and $191,000.00 in the Payne

Weber account. The original trust account ofthe Errollene's trust lists a total of $38,392.00 in the

Edward Jones account and $99,781.00 in the Payne Weber account. The appreciation in the

brokerage house accounts far exceeds the $44,500.00 interest ofthe trust in the two certificates of

deposits listed as trust assets. If, as appears to be the case, Eldridge chose to consider the certificates

ofdeposit as his own and an offsetting portion of an investment account as trust property, he did not

wrongfully confuse the accounts requiring that all of his own property be considered subject to the

trust. The substitute trustees/independent co-executors should have no difficulty in adjusting accounts

between the Errollene's trust and Eldridge's estate. T he Eaton commingling rule, invoked by

Appellants, is inapplicable to these facts. Eldridge's duties as trustee did not deprive him ofthe right

to dispose of his own property, to direct that the certificates of deposit be payable on his death to

Delores, and to create a joint checking account with her with right ofsurvivorship.

This record supports the conclusion that the bank accounts passed to Delores outside ofthe

estate and that she therefore does not hold them adversely to the estate. There is no evidence that

Delorespresentlyclaimsthe $297.00 checkfromWillie Shepherdas her own. The trialjudge did not
abuse her discretion in finding Delores suitable to serve as independent co-executor. Appellants'

second issue is overruled.

Disposition

The order ofthe trial court admitting the will to probate is modified to delete the requirement

of bond ofthe co-executors. In all other respects, the judgment ofthe trial court is affirmed.

BILL BASS

Justice

Opinion delivered March 31, 2006.

Panel consisted of Worthen, C.J., Griffith, J., and Bass, RetiredJ., Twelfth CourtofAppeals, Tyler, sitting by assignment.

(PUBLISH)
COURT OF APPEALS

TWELFTH COURT OF APPEALS DISTRICT OF TEXAS

JUDGMENT

MARCH 31, 2006

NO. 12-04-00154-CV

IN THE ESTATE OF ELDRIDGE LEE BRIMBERRY, DECEASED

Appeal from the County Court at Law

ofHouston County, Texas. (Tr.Ct.No. 8444)

THIS CAUSE came to be heard on the appellate record and briefs filed herein,

and the same being inspected, it is the opinion of this court that the order of the trial court below

should be modified and as modified, affirmed.

It is therefore ORDERED, ADJUDGED and DECREED that the order ofthe

court below be modified to delete the requirement ofbond ofthe co-executors, and as modified, the

trial court's order is affirmed.

It is further ORDERED that all costs ofthis appeal are hereby adjudged against

the Appellants, Jerry Lee Brimberry,Alice Sue Colburn,Norma Kay Durfee and Tonya

Renee Pelham, for which execution may issue, and that this decision be certified to the court below

for observance.

Bill Bass, Justice.

Panel consisted of Worthen, C.J., Griffith, J., and Bass, Retired J.,

Twelfth CourtofAppeals, Tyler, sitting by assignment.