Court Opinion

ID: 3127521
Source: CourtListenerOpinion
Date Created: 2015-10-16 15:41:37.351742+00
Date Added: 2024-06-11T10:23:49.567779
License: Public Domain

Opinion issued July 14, 2011.

In The
Court of
Appeals
For The
First District
of Texas
————————————
NO. 01-10-00411-CV
———————————
Jennifer Pine and Robin Pine, Appellants
V.
Catherine
Deblieux, Individually and as Successor Administrator of the Estate of Robert
Edward Pine, deceased, Appellee

 

 
On Appeal from the County Court of Law Number 4
Brazoria County, Texas

Trial Court Case No. PR030352
 

 
O P I N I O N
This case
involves a challenge to appellee Catherine deBlueux’s appointment as the
Successor Independent Administrator of her father’s probate estate.  We reverse the trial court’s judgment and
remand for further proceedings.  
BACKGROUND
Robert Pine died intestate on March
15, 2008.  He had four children: Jennifer
Pine, Robin Pine-Sims, Mark Pine, and deBlieux. 
All three sisters initially agreed to Mark’s appointment as Independent
Administrator, without bond, of the decedent’s estate on February 25,
2009.     
On June 5, 2009, deBlieux filed a
Petition for Declaratory Judgment, claiming, among other things, that certain
assets owned by the decedent are hers individually.  Specifically, she claims contractual
survivorship rights in a Certificate of Deposit and in a Trust created by her
father.  
In Spring 2010, Mark’s three
sisters filed motions alleging Mark breached his fiduciary duties and embezzled
money from the estate.  They all three
requested that Mark be removed as Independent Administrator.  Mark expressed a willingness to voluntarily
resign before the hearing was held on the motions.  
A.   Motions for the Appointment of a
Successor Administrator
In a motion filed March 10, 2010,
deBlieux requested that she be appointed as the Successor Administrator to
replace Mark.  Jennifer and Robin opposed
deBlieux’s application, alleging conflicts of interest:
DeBlieux does not qualify
and should not be appointed Successor Administrator since she has a conflict of
interest; she claims a large portion of the property owned by the Decedent
prior to his death is not the property of the estate but rather her property;
that the Administrator is required to protect the estate from claims against
the assets of the estate. 
 
Jennifer and Robin instead
requested that Robin be appointed Successor Administrator.  They later filed a motion requesting that
both Jennifer and Robin be appointed Joint Successor Administrators. 
B.   The Trial Court’s Orders  
Following an April 30, 2010
hearing, the trial court entered an order on May 3, 2010 accepting Mark’s
resignation and appointing deBlieux as Successor Administrator with a $500,000
bond.  Jennifer and Robin filed a notice
of appeal.[1]  They also filed a Motion to Reconsider
Appointment of Successor Administrator arguing that deBlieux’s conflict of
interest rendered her unsuitable as a matter of law under section 78(e) of the
Texas Probate Code.  The trial court
denied the motion.  
C.   DeBlieux’s Motion for Summary
Judgment
On May 17, 2010, deBlieux filed a
motion for summary judgment on her declaratory judgment action seeking a ruling
as to what property of the testator’s was subject to probate.  In that motion, she argued that Mark (while
acting as administrator) improperly omitted several items from the inventory he
filed with the court.  She also argued
that, as a matter of law, a Certificate of Deposit and certain trust assets
passed to her outside of the probate as a payable-on-death beneficiary.    
No response to this motion was
filed by the estate, as deBlieux was also serving as the estate
administrator.  Jennifer and Robin filed
an opposition to this summary judgment, again asking the court to reconsider
deBlieux’s suitability because, they asserted, deBlieux has abandoned the
estate by claiming 40% of the testator’s assets as her own while refusing to
hire legal counsel to defend the estate against her claims.  They also argued that all four children knew
that their father used numerous trusts and property transfers to his children’s
name to keep assets out of his name with the understanding that he intended to
still own the property.    No order on
deBlieux’s motion is located in the record.
APPLICABLE LAW
The Texas Probate Code provides the
following priority to qualified persons in the appointment of an administrator:
(a)     To the person named as executor in the will of the deceased.
(b)     To the surviving husband or wife.
(c)      To the principal devisee or legatee of the testator.
(d)     To any devisee or legatee of the testator.
(e)      To the next of kin of the deceased, the nearest in order of
descent first, and so on, and next of kin includes a person and his descendants
who legally adopted the deceased or who have been legally adopted by the
deceased.
(f)      To a creditor of the deceased.
(g)     To any person of good character residing in the county who
applies therefor.
(h)     To any other person not disqualified under the following Section.
When applicants are equally entitled, letters shall be granted to the applicant
who, in the judgment of the court, is most likely to administer the estate
advantageously, or they may be granted to any two or more of such applicants.
Tex. Probate Code Ann. § 77 (Vernon 2003).
The probate code also deems certain
persons statutorily disqualified to serve as an executor, including a “person
whom the court finds unsuitable.”  Tex. Probate Code Ann. § 78(e) (Vernon 2003).  This
category, unsuitability, is at issue in this case.  
The trial court is given broad
discretion in determining whether an individual is suitable to serve as an
executor or administrator.  Kay v. Sandler, 704 S.W.2d 430, 433
(Tex. App.—Houston [14th Dist.] 1985,
writ ref’d n.r.e.); Dean v. Getz, 970
S.W.2d 629, 633 (Tex. App.—Tyler 1998,
no pet.).  We will not overturn a trial
court’s determination of an administrator’s suitability absent an abuse of that
discretion.  Olguin v. Jungman, 931 S.W.2d 607, 610 (Tex. App.—San Antonio 1996, no writ).
ANALYSIS
In their sole point of error,
appellants Jennifer and Robin contend that the trial court abused its
discretion by appointing deBlieux as administrator of Pine’s estate because,
they allege, she has an active conflict of interest that renders her unsuitable
as a matter of law.  In support, they
assert that the “courts have consistently held that an applicant for
Administrator who claims ownership of assets of the estate, to the exclusion of
the estate, is ‘unsuitable,’ pursuant to section 78(e), because of a conflict
of interest between the interest of the applicant and the interest of the
estate.”  
In response, deBlieux concedes that
“recent court of appeals cases have . . . held a conflict of interest [constitutes]
automatic grounds for disqualification.” 
Nonetheless, she argues that the “authority of these cases has been
undercut, and deservedly so, by the Supreme Court’s decision in Kappus v. Kappus, 284 S.W.3d 831 (Tex.
2009).”  While deBlieux acknowledges that
Kappus involved “the attempted
removal, rather that the initial appointment of an independent executor,” she
asserts that “the court’s reasoning should apply with equal force” to “curtail
a disturbing trend, in recent court of appeals cases” finding a “conflict of
interest as a basis for the denial of appointment or the removal of a personal
representative.” 
We agree with Jennifer and Robin
that the conflict of interest created by  deBlieux’s separate claim to a substantial
portion of her father’s assets rendered her unsuitable as a matter of law.  Accordingly, we reverse the trial court’s
order appointing her as independent administrator.  
A.   Relevant Cases
It is settled that an individual
claiming under the will or asserting a claim in probate against the estate is
not unsuitable merely because of that claim.  Boyles
v. Gresham, 309 S.W.2d 50, 54 (Tex. 1958). 
In Boyles, the supreme court
squarely resolved this issue, concluding that “as a matter of law, an
independent executor named in a will is not unsuitable simply by virtue of his
having a claim against the estate which he asserts in good faith or because, on
advice of counsel, he claims as a beneficiary, or as trustee, under the
will.”  Id.  In holding that a
testator’s chosen executor was not automatically disqualified merely by virtue
of being a potential beneficiary and/or creditor under the will, the court
heeded both the well-fixed “power and right of a testator to select [his or her]
own independent executor,” and the general preference—reflected by the statutory scheme for selecting
administrators in section 77 of the Probate Code—for those with the greatest interest in an estate to enjoy priority in
selection of an administrator.  Id. at 53. 
The Boyles court was, however, careful to limit its holding to cases in
which the independent executor was named by the testator and whose interest
arises only as a beneficiary or creditor, expressly leaving consideration of
the situation presented in this case for another day: 
We
do not have before us a situation in which a named executor claims adversely,
as his own, property which is owned, claimed or should be claimed, by the
estate.  For example, conceivably the
testator may own or claim to own a building, and he may make a certain
disposition of it to a third party.  The
named executor may also claim it as his own, regardless of, or in spite of, the
will and estate of the testator.  These
assumed facts are not before us.
 
In the case before us [the
executor] did not claim any of [the testator’s] property as his own.  His claim, if any, was not adverse to the
estate but was under the will or by virtue of a claim as creditor of the estate.  
Id. at 54. 
Both before and since Boyles was decided, the suitability of
an executor or administrator claiming title to property owned by the testator
at the time of death has been addressed by several courts of appeals, which
have concluded that the conflict of interest inherent in this situation
establishes unsuitability as a matter of law. 
See, e.g., Bays v. Jordan, 622 S.W.2d 148, 149
(Tex. App—Fort Worth 1981, no writ); Haynes v Clanton, 257 S.W.2d 789, 792
(Tex. Civ. App.—El Paso 1953, writ dism’d by agr.).  The distinction between these
cases and Boyles lies in the fact
that that a beneficiary, creditor, or claimant does not dispute the estate’s
title, but rather—through the
probate process—seeks
satisfaction of his or her claim from the estate’s assets.  In contrast, persons claiming disputed assets
as their own to the exclusion of an estate are denying the estate’s title,
arguing instead that the assets are not subject to probate proceedings at all.  See Bays,
622 S.W.2d at 149.  
These courts of appeals’ decisions
are based on the premise that, when an administrator or executor claims title
to property owned by the testator at the time of death, the interest of the
estate and that administrator or executor are too adverse for that one person
to advocate effectively for both sides.  See Ayala v. Martinez, 883 S.W.2d 270,
272 (Tex. App.—Corpus Christi 1994, writ denied) (recognizing that surviving
spouse was unsuitable to administer deceased husband’s estate because she
claimed property from her deceased husband’s separate estate as community
property);  Bays, 622 S.W.2d at 148–49 (holding the trial court abused its discretion by granting letters
testamentary to a joint venturer with the decedent who claimed substantially
all of the estate’s assets by virtue of a written agreement with the testator
creating rights of survivorship in their joint ventures); Hitt v. Dumitrov, 598 S.W.2d 355, 355–56 (Tex. Civ. App.—Houston [14th Dist.] 1980, no writ) (affirming trial
court’s disqualification of person from administrating wife’s estate because
the estates of husband and his wife, who died together in a plane crash, had
adverse claims to the same insurance proceeds such that the administrator could
not advocate for both estates against each other effectively);  Haynes,
257 S.W.2d at 790, 792 (affirming trial court’s determination that
administrator was unsuitable because he owned an interest in a bank that had sued
the estate to recover all of the assets of the estate that the bank alleged
were purchased with money embezzled from the bank).  
DeBlieux acknowledges that this
authority is contrary to her position. 
She asserts, however, that the supreme court’s 2009 decision in Kappus v. Kappus evidenced its disproval of this line of cases.  In Kappus,
the supreme court considered “whether an independent executor’s alleged
conflict of interest— . . . a
good-faith dispute over the executor’s percentage ownership of estate
assets—requires his removal as a
matter of law.”  284 S.W.3d at 833.  At issue was whether the testator’s brother,
who was named as independent executor in the testator’s will and who was
appointed with no objection, must be removed when the testator’s ex-wife
objected to the executor’s proposed division of proceeds from the sale of land
jointly owned by the testator and his brother, the executor.  Id.
at 834.  The testator’s ex-wife
complained on her children’s behalf about a plan to divide the proceeds from
the property sale equally between the estate and executor, because she believed
the estate was due more than 50% to compensate for some improvements the
testator had paid for.  Id. 

The testator’s ex-wife requested
that the executor be removed under section 149C of the Texas Probate Code,
which mandates removal of an executor “proved to have been guilty of gross
misconduct or gross mismanagement in the performance of [his or her] duties” or
to have “misapplied or embezzled . . . property committed to [his or her]
care.”  Tex.
Prob. Code Ann. 
§ 149C(a)(2)&(5) (Vernon
Supp. 2010).  The trial court refused the
request, but the appellate court reversed, holding that the executor’s shared
interest in property with the estate created an improper conflict of interest.  Kappus,
284 S.W.3d at 834.  The supreme court
reversed that decision, holding instead that the trial court’s refusal to
remove the testator was within its discretion. 
Id. at 836-39.  The court noted that the testator’s ability
to select his own executor is “well fixed in the Texas law,” that there exists
only six grounds for removal under section 149C(a), and that once a ground has
been proven, the “trial court has discretion to decide whether the violation
warrants removal.” Id. at 834-35.  The court further emphasized that “the
grounds to remove an independent
executor post-appointment are different from those to disqualify an executor pre-appointment.”  Id.
at 835 (noting that the more expansive “unsuitable” catch-all standard
governing appointment does not apply to removal, which is limited to the six
enumerated reasons in section 149C).  The
court distinguished its earlier decision in Boyles
on that ground.  Id. at 836-37 (“Boyles
does not control our decision today.”). 
The supreme court noted that not
all conflicts are disqualifying, as demonstrated by the legislature’s providing
that “creditors of the deceased can be granted letters of administration.” Id. at 837.  And the court expressed a reluctance to
judicially amend section 149C in a way that would oust a surviving spouse
specifically chosen as an independent executor in the testator’s will based on
an alleged conflict of interest any time there is a shared interest in
community property: 
[I]t seems under [petitioner’s] theory that
once a beneficiary objects to an executor’s proposed valuation and distribution
of property, the executor’s defense would constitute a conflict of interest
that mandates removal.  Such a rule,
besides having no statutory anchor in the text of section 149C, would undermine
the ability of Texas testators to name their own independent executor and also
weaken the ability of an executor “free of judicial supervision, to effect the
distribution on an estate with a minimum of cost and delay.”  And it would impose this extra-statutory restriction
even if the testator was fully aware of the potential conflict when the
executor was chosen.  
Id. (footnote
omitted).  Thus, the court concluded, a
“good-faith disagreement over the executor’s ownership share in the estate is
not enough, standing alone, to require removal under section 149C,” a statute
that “speaks of affirmative malfeasance.” 
Id. (“A potential conflict
does not equal actual misconduct.”). 
B.   Application
We disagree that Kappas is controlling here.  We are mindful that the Kappas court cautioned against disqualifying the testator’s chosen
executor when a minor potential conflict arises, as that result cannot be
squared with the intent of the legislature when framing the criteria for appointing
an administrator or executor, or with its criteria for removing an existing
one.  That is not, however, the situation
we are faced with today.  DeBlieux was
not selected by Pine, who died intestate. 
The statute governing her appointment as an administrator contains a
more expansive disqualification standard, i.e., unsuitability, than the removal
statute in Kappas that the court
interpreted as requiring malfeasance. 
Given these differences, the policy considerations at work in Kappas are not applicable here.    
In this case, there exists a real
dispute over the validity of deBlieux’s individual claims to ownership of
substantial assets of her father’s such that her “personal interests are so
adverse to those of the estate [and] the beneficiaries . . . that both cannot
be fairly represented by the same person.” 
Bays, 622 S.W.2d at 149
(quoting Haynes, 257 S.W.2d at 792).  Accordingly, we sustain Jennifer’s and
Robin’s point of error and hold that the deBlieux’s nontestamentary claims to
property owned by Pine upon his death render her unsuitable as a matter of law
to serve as administrator.  The trial
court thus abused its discretion in appointing her as such.  In so holding, we express no opinion as to
who should serve as her successor.  
CONCLUSION
We reverse the trial court’s order
appointing deBlieux as independent administrator of Pine’s estate and remand
for further proceedings.  
 
  

                                                                   Sherry
Radack
                                                                   Chief
Justice 
 
Panel
consists of Chief Justice Radack and Justices Sharp and Brown.
 

[1]
          An order settling someone’s rights as an executor is
generally a final, appealable order.  E.g.,
In re Estate v. Vigen, 970 S.W.2d 597, 599 (Tex. App.—Corpus Christi 1998,
no pet.).