Court Opinion

ID: 3073571
Source: CourtListenerOpinion
Date Created: 2015-10-16 00:55:50.939204+00
Date Added: 2024-06-11T11:41:51.090500
License: Public Domain

COURT OF APPEALS
                          SECOND DISTRICT OF TEXAS
                               FORT WORTH

                              NO. 02-14-00170-CV

IN THE ESTATE OF MAURICE
BOYLAN, DECEASED

                                      ----------

          FROM COUNTY COURT AT LAW NO. 1 OF WICHITA COUNTY
                      TRIAL COURT NO. 27,159-E

                                      ----------

                         MEMORANDUM OPINION 1

                                      ----------

      Appellant and cross-appellee Lonnie Boylan appeals the trial court’s order

finding appellee and cross-appellant Cooper Boylan liable to Lonnie for Lonnie’s

undelivered inheritance in his capacity as executor of their father’s estate but not

in his individual capacity. We modify the trial court’s judgment and affirm it as

modified.

      1
       See Tex. R. App. P. 47.4.
                               Background Facts

      Maurice Boylan passed away in 2006.          In his will, he named his son

Cooper as executor of his estate. The will bequeathed a bank account to Cooper

and to Maurice’s only other child, Lonnie. Another bank account went to Cooper,

Cooper’s children, Lonnie and Lonnie’s children. Cooper also received a large

remainder of the estate. The will contained an in terrorem clause (also known as

a no-contest clause) that stated:

      If any beneficiary under this Will shall in any manner contest or
      attack this Will or any of its provisions, any share or interest in my
      estate given to such contesting beneficiary under this Will is hereby
      revoked and shall be disposed of as part of the residue of my estate.

      In September 2006, Cooper filed an application to probate the will. In

October 2006, Lonnie filed his opposition to Cooper’s application, claiming that

Maurice lacked the testamentary capacity necessary to effectuate the distribution

of his assets in accordance with his independent wishes and desires.           After

propounding a number of discovery requests, Lonnie’s attorney wrote Lonnie,

saying that based on the discovery responses, “I do not believe it is worthwhile to

pursue further contest of your father’s Will, especially since doing so could result

in forfeiting that portion of his estate left to you.” Lonnie then moved to dismiss

his opposition in January 2008.

      Believing that Lonnie violated the in terrorem clause and therefore forfeited

his inheritance, Cooper distributed the estate with none going to Lonnie. Lonnie

filed suit to compel an accounting, distribution of the assets, and closure of the

                                         2
estate. He sued Cooper for breach of fiduciary duty and sought a declaratory

judgment that he had not forfeited his interest in the estate.

      After a bench trial, the trial court found that Lonnie had not violated the in

terrorem clause. It also found the Cooper had not breached his fiduciary duty as

executor, but it awarded Lonnie the amounts devised to him in the will to be

recovered from Cooper “in his capacity as executor” only.        Lonnie moved to

modify and correct the judgment to include recovery against Cooper individually.

The motion was denied by operation of law, and Lonnie timely filed this appeal.

Cooper then filed his cross-appeal.

                                    Discussion

I. The in terrorem clause

      Because Lonnie’s claims are predicated on whether he violated the in

terrorem clause, we address Cooper’s cross-appeal first. In his first cross-issue,

Cooper argues that the trial court’s finding that Lonnie did not breach the in

terrorem clause was against the great weight and preponderance of the

evidence. In Cooper’s second cross-issue, he attacks the trial court’s findings of

facts and conclusions of law related to whether Lonnie forfeited his inheritance. 2

      2
       The findings and conclusions that Cooper challenges are:

            4. Lonnie filed his Opposition in good faith, and with just
      and/or probable cause.

             ....

                                          3
Specifically, Cooper argues that Lonnie did not file and maintain his action with

just cause and in good faith.

      A. Standard of review

      A trial court’s findings of fact have the same force and dignity as a jury’s

answers to jury questions and are reviewable for legal and factual sufficiency of

the evidence to support them by the same standards. Catalina v. Blasdel, 881

             5. The filing of Lonnie’s Opposition, on October 10, 2006, did
      not violate [the in terrorem clause] of the Last Will and Testament of
      Maurice L. Boylan, and did not result in forfeiture against Lonnie.

            6. Lonnie’s discovery requests served upon Cooper on August
      21, 2007, did not violate [the in terrorem clause] of the Last Will and
      Testament of Maurice L. Boylan, and did not result in forfeiture
      against Lonnie.

            7. Lonnie did not violate the terms of [the in terrorem clause]
      of the Last Will and Testament of Maurice L. Boylan, because any
      contest or attack that he raised prior to January 29, 2008[,] was
      voluntarily withdrawn prior to that date.

            8. Lonnie prosecuted and maintained his Opposition (prior to
      voluntarily withdrawing it) in good faith, and with just and/or probable
      cause.

            9. Cooper’s failure to deliver any part of the Estate of Maurice
      L. Boylan to Lonnie was not excused by the Last Will and Testament
      of Maurice L. Boylan.

            10. Lonnie did not forfeit his share of the Estate of Maurice L.
      Boylan, and he is entitled to such specific devise as it existed on the
      date of Maurice Boylan’s death.

            11. Cooper has been a fiduciary to Lonnie since his
      appointment as Independent Executor of the Estate of Maurice L.
      Boylan on January 29, 2008.

                                         4
S.W.2d 295, 297 (Tex. 1994); Anderson v. City of Seven Points, 806 S.W.2d
791, 794 (Tex. 1991); see also MBM Fin. Corp. v. Woodlands Operating Co., 292
S.W.3d 660, 663 n.3 (Tex. 2009). We defer to unchallenged findings of fact that

are supported by some evidence.        Tenaska Energy, Inc. v. Ponderosa Pine

Energy, LLC, 437 S.W.3d 518, 523 (Tex. 2014).

      When reviewing an assertion that the evidence is factually insufficient to

support a finding, we set aside the finding only if, after considering and weighing

all of the evidence in the record pertinent to that finding, we determine that the

credible evidence supporting the finding is so weak, or so contrary to the

overwhelming weight of all the evidence, that the finding should be set aside and

a new trial ordered. Pool v. Ford Motor Co., 715 S.W.2d 629, 635 (Tex. 1986)

(op. on reh’g); Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986); Garza v. Alviar,

395 S.W.2d 821, 823 (Tex. 1965).

      Findings of fact are the exclusive province of the factfinder. Bellefonte

Underwriters Ins. Co. v. Brown, 704 S.W.2d 742, 744–45 (Tex. 1986). When

conducting a factual sufficiency review, a court of appeals must not merely

substitute its judgment for that of the trier of fact. Golden Eagle Archery, 116
S.W.3d at 761. The trier of fact is the sole judge of the credibility of witnesses

and the weight to be given to their testimony. Id.

      B. The evidence

      In terrorem clauses are intended to dissuade beneficiaries under a will or

trust “from filing vexatious litigation, particularly as among family members, that

                                         5
might thwart the intent of the grantor” by making the gifts under the instrument

conditional on the beneficiaries not challenging the validity of the instrument. Di

Portanova v. Monroe, 402 S.W.3d 711, 715 (Tex. App.—Houston [1st Dist.]

2012, no pet.). In terrorem clauses are strictly construed to avoid forfeiture when

possible. In re Estate of Hamill, 866 S.W.2d 339, 342–43 (Tex. App.—Amarillo

1993, no writ) (citing Sheffield v. Scott, 662 S.W.2d 674, 676 (Tex. App.—

Houston [14th Dist.] 1983, writ ref’d n.r.e.)).   Thus, courts have enforced in

terrorem clauses only when the intention of a suit is to thwart the grantor’s

intention. See Ferguson v. Ferguson, 111 S.W.3d 589, 599 (Tex. App.—Fort

Worth 2003, pet. denied); see also Di Portanova, 402 S.W.3d at 717 (listing “a

myriad of different types of lawsuits” found not to have been filed with the intent

of thwarting the grantor’s intent). This good faith exception to in terrorem clauses

has been codified in the estates code (and formerly, the probate code), and it

provides:

             A provision in a will that would cause a forfeiture of or void a
      devise or provision in favor of a person for bringing any court action,
      including contesting a will, is enforceable unless in a court action
      determining whether the forfeiture clause should be enforced, the
      person who brought the action contrary to the forfeiture clause
      establishes by a preponderance of the evidence that:

            (1) just cause existed for bringing the action; and

            (2) the action was brought and maintained in good faith.

Tex. Estates Code Ann. § 254.005 (West 2014).

                                         6
      When asked why he filed his opposition, Lonnie testified, “For one reason

and one reason only, [it] was to find out if my brother was lying to me and to find

out exactly what my father intended for me to inherit.” Cooper argues that Lonnie

could not have filed his action in good faith because he had not seen a copy of

the will before filing.   Although there is much undefined regarding what falls

under the good faith exception, it has long been held that filing suit to determine

a testator’s intent or to ascertain a beneficiary’s interest under a will is not a suit

intended to dispute the validity of the will. See Calvery v. Calvery, 55 S.W.2d
527, 530 (Tex. 1932) (“[W]e do not think a suit, brought in good faith and upon

probable cause, to ascertain the real purpose and intention of the testator and to

then enforce such purpose and intention, should be considered as an effort to

vary the purpose and intention of the will.”); Lawrence v. Latch, 424 S.W.2d 260,

263 (Tex. Civ. App.—Fort Worth 1968), rev’d on other grounds, 431 S.W.2d 307

(Tex. 1968).

      As our sister court explained,

             [A] motion to contest a will is, like any other motion, merely a
      pleading that is the necessary vehicle by which the movant raises
      issues for resolution. A motion is not self-proving. If the mere filing
      of a motion to contest a will is, in and of itself, a contest of the will,
      this would be inconsistent with the legal significance of a motion.
      We believe that until such time as some further action is taken in an
      effort to thwart the intention of the testator, the mere filing of a
      contest motion is insufficient to cause a forfeiture under the in
      terrorem clause.

Sheffield, 662 S.W.2d at 677. Cooper does not dispute Lonnie’s contention that

Lonnie had not been able to see the will prior to filing his will contest. Nor does

                                          7
he dispute Lonnie’s testimony that once he had seen the will and had been

assured by witnesses that Maurice had been mentally competent up until his

death, Lonnie dismissed his opposition. Lonnie raised his issues for resolution

through his opposition, and they were thus resolved. The evidence in this case

does not show that Lonnie’s filing of the will contest or the discovery he

propounded while maintaining the action were actions intended to thwart the

testator’s intent.   We therefore cannot say that the trial court’s findings that

Lonnie did not violate the in terrorem clause or forfeit his inheritance and that

Cooper’s failure to deliver Lonnie’s bequest to him was not excused by the in

terrorem clause are so against the great weight and preponderance of the

evidence that they should be set aside. We overrule Cooper’s two issues.

II. Cooper’s fiduciary duty

      In his first issue, Lonnie argues that Cooper breached his fiduciary duty by

failing to deliver Lonnie’s bequest to him. Lonnie complains that the trial court

concluded that Cooper was Lonnie’s fiduciary as executor of the will, that Cooper

willfully and intentionally failed to deliver Lonnie’s inheritance to him, and that

Cooper’s failure was not excused by the will’s terms, but it failed to conclude that

Cooper breached his fiduciary duty to Lonnie. Instead, the trial court concluded

that Cooper did not breach his fiduciary duty to Lonnie because “he acted in

good faith reliance upon a mistaken belief that the in terrorem clause” had been

triggered.

                                         8
      An executor’s fiduciary duty to the estate’s beneficiaries arises from the

executor’s status as trustee of the property of the estate.      Humane Soc’y v.

Austin Nat’l Bank, 531 S.W.2d 574, 577 (Tex. 1975). A trustee owes to his

beneficiaries an unwavering duty of good faith, fair dealing, loyalty, and fidelity.

Herschbach v. City of Corpus Christi, 883 S.W.2d 720, 735 (Tex. App.—Corpus

Christi 1994, writ denied).     This duty requires that a trustee exercise the

judgment and care that persons of ordinary prudence, discretion, and intelligence

exercise in the management of their own affairs. Interfirst Bank Dallas, N.A. v.

Risser, 739 S.W.2d 882, 888 (Tex. App.—Texarkana 1987, no writ), disapproved

on other grounds by Tex. Commerce Bank, N.A.v. Grizzle, 96 S.W.3d 240 (Tex.

2002). “A trustee commits breach of trust not only where he violates a duty in

bad faith, or intentionally although in good faith, or negligently but also where he

violates a duty because of a mistake.” Ertel v. O’Brien, 852 S.W.2d 17, 21 (Tex.

App.—Waco 1993, writ denied). Further, “good faith is no defense where the

trustee has arbitrarily overstepped the bounds of his authority, or where he has

not exercised diligence or has acted unreasonably, or has been guilty of such

gross neglect as no reasonably intelligent person would consider proper.”

Republic Nat’l Bank & Trust Co. v. Bruce, 105 S.W.2d 882, 885 (Tex. 1937); see

Jewett v. Capital Nat’l Bank of Austin, 618 S.W.2d 109, 112 (Tex. App.—Waco

1981, writ ref’d n.r.e.) (holding that a trustee can so negligently exercise his

fiduciary duty that his lack of diligence results in a breach of that duty). As the

Restatement explains, a breach of trust based on mistake may be found

                                         9
      when a trustee interprets trust provisions as permitting certain action
      or inaction that a court later determines to be improper. A breach of
      trust may be found even though the trustee acted reasonably and in
      good faith, perhaps even in reliance on advice of counsel. Trustees
      can ordinarily be protected from this risk by obtaining instructions
      concerning uncertainties of law or interpretation.

Restatement (Third) of Trusts § 93 cmt. c (2012).

      As we stated above, there is a long history of courts enforcing in terrorem

clauses only when the intention of a suit is to thwart the grantor’s intent and not

when suit was filed to ascertain a beneficiary’s interest under a will. See Calvery,
55 S.W.2d at 530; Ferguson, 111 S.W.3d at 599.            Cooper testified that he

“interpreted” Lonnie’s opposition as a violation of the in terrorem clause and that

he never sought judicial instruction or requested that the trial court enforce the in

terrorem clause because he had already decided that Lonnie had breached it.

There is no evidence that Cooper sought any professional or judicial guidance in

interpreting the in terrorem clause. See Restatement (Third) of Trusts § 77 cmt.

b(2), c ( “Taking the advice of legal counsel on such matters evidences prudence

on the part of the trustee. . . . Lack of awareness or understanding of the terms

of the trust normally will not excuse a trustee from liability.”). Cooper’s mistake

was one of law, and the trial court correctly concluded that Cooper’s failure to

give Lonnie his inheritance was not excused by the language of the will. The

defense of good faith was not available to him. See Ertel, 852 S.W.2d at 22

(“[T]he evidence of good faith is not a defense to breach of fiduciary duty.”).

Therefore, as a matter of law, the trial court erred by concluding that Cooper did

                                         10
not breach his fiduciary duty because he acted in good faith.             We sustain

Lonnie’s first issue.

III. Individual liability

       In his second issue, Lonnie argues that the trial court erred by failing to

hold Cooper individually liable for his breach of fiduciary duty. Cooper argues

that because he acted in good faith, “his actions are justified so that he avoids

personal liability.” We have already said that good faith does not insulate an

executor from liability for breach of fiduciary duty. Cooper does not direct us to

any authority explaining how the defense of good faith can sever an executor’s

liability in his capacity as executor from his personal liability.

       “A trustee who commits a breach of trust normally is not allowed to benefit

individually from the breach, and the trustee is subject to liability to eliminate any

such benefit.” Restatement (Third) of Trusts § 100 cmt. c; see Republic Nat’l

Bank & Trust, 105 S.W.2d at 885 (“Every violation by a trustee of a duty which

equity lays on him, whether willful or forgetful, is a breach of trust, for which he is

liable.”). Because Cooper believed that Lonnie forfeited his portion of the estate

(one half of the money in a bank account), that money was disposed as part of

the residue of the estate. Under the terms of the will, the residue of the estate

was distributed to Cooper. Cooper therefore personally benefited from Lonnie’s

alleged forfeiture.

                                           11
      Because Cooper personally benefitted from his breach of his fiduciary duty

to Lonnie, he is personally liable to Lonnie to the extent of that breach. We

therefore sustain Lonnie’s second issue.

IV. Interest

      In his third issue, Lonnie argues that the trial court applied an incorrect

measure of interest to his award. The trial court’s final judgment ordered that

Lonnie recover from Cooper $79,052.64 and interest on that amount of

$3,952.63.

      To preserve a complaint for appellate review, a party must have presented

to the trial court a timely request, objection, or motion that states the specific

grounds for the desired ruling, if they are not apparent from the context of the

request, objection, or motion. Tex. R. App. P. 33.1(a); see also Tex. R. Evid.

103(a)(1). If a party fails to do this, error is not preserved, and the complaint is

waived.   Bushell v. Dean, 803 S.W.2d 711, 712 (Tex. 1991) (op. on reh’g).

Lonnie filed a motion to modify and correct the judgment, but he did not object to

the amount or calculation of the interest. Because Lonnie did not object to the

trial court regarding the prejudgment interest, he has waived this issue on

appeal. See Meek v. Onstad, 430 S.W.3d 601, 611 (Tex. App.—Houston [14th

Dist.] 2014, no pet.) (holding that appellant waived complaint regarding accrual

date of prejudgment interest because he failed to raise it in his motion to modify

judgment). We therefore overrule Lonnie’s third issue.

                                        12
                                  Conclusion

      Having overruled Cooper’s two issues and sustained Lonnie’s first and

second issues, we modify the judgment to include Cooper’s individual liability for

the bequests, pre- and postjudgment interest, and fees and expenses awarded.

Having overruled Lonnie’s third issue, we affirm the judgment as modified.

                                                  /s/ Lee Gabriel

                                                  LEE GABRIEL
                                                  JUSTICE

PANEL: LIVINGSTON, C.J., WALKER and GABRIEL, JJ.

DELIVERED: February 12, 2015

                                       13