Summary
appointing receiver in probate matter reviewed for abuse of discretion
Summary of this case from In re Est. of TreviñoOpinion
No. 05-03-00501-CV
Opinion issued December 15, 2003.
On Appeal from the Probate Court No. 2, Dallas County, Texas, Trial Court Cause No. 98-2100-P2(a).
Reversed and Remanded.
Before Justices WHITTINGTON, JAMES, and O'NEILL.
MEMORANDUM OPINION
Virginia Haugen and Naomi Morissette, daughters of Arthur Lennart Olson, testator, appeal the final judgment and the order appointing a receiver in this probate matter. Haugen and Morissette filed an inventory of their father's estate, and that inventory was contested by Blanche B. Olson, represented by her son, John William Booth. Haugen and Morissette bring three issues in their appeal and contend the trial court erred by: (1) improperly excluding evidence; (2) awarding attorneys' fees without sufficient evidence; and (3) appointing a receiver and limiting his powers. The facts are well known to both parties; thus we do not recite them here in detail. We issue this memorandum opinion pursuant to Texas Rule of Appellate Procedure 47.4. We reverse the trial court's judgment and remand for further proceedings.
Blanche B. Olson died in 2000, before this matter went to trial. John William Booth, Blanche's son, served as her attorney and is the Independent Administrator of Blanche's Estate. We refer to appellee as Booth.
Admission of Evidence
In their first issue, Haugen and Morissette contend the court erred by excluding evidence. On the day the trial commenced the court heard and ruled on motions in limine filed by the parties. The court heard Booth's motion in limine regarding Haugen and Morissette's' discussing two documents that Haugen and Morissette sought to introduce in support of their characterization of the separate property of the estate of their father, A. Lennart Olson. The documents were part of Plaintiff's Exhibit 1 and Plaintiff's Exhibit 2. The court granted the motion insomuch as Haugen and Morissette were not to discuss the exhibits while addressing the venire during voir dire. The court deferred ruling on their admissibility until trial.
Although Haugen and Morissette were defendants below, the exhibits were designated plaintiff's exhibits in a pretrial motion to compel. Haugen and Morissette, however, wanted to admit the exhibits for trial purposes, and the admissibility hearing was held to review Haugen and Morissette's offer of proof.
After the jury was empaneled and sworn, the court held a hearing on Haugen and Morissette's' offer of proof outside the presence of the jury. The court held the hearing to determine the admissibility of both exhibits and Haugen and Morissette's right to discuss the property settlement with the jury. The two exhibits each contained a document entitled "Community Property Agreement." Exhibit 1 is the will of Blanche B. Olson, executed March 22, 1990. Attached to the will and bearing the same date is a document entitled Community Property Agreement executed by both A. Lennart Olson and Blanche Dorothy Olson. Exhibit 2 is entitled Community Property Agreement and is identical in date, content and signatures to the document attached to Blanche Olson's will. All three documents, the will and both documents entitled Community Property Agreement, contain a statement that the community property of the parties consists of three named investments totaling $50,290.00.
Booth challenged the admissibility of Exhibit 1 on the ground it was irrelevant because Blanche Olson's will to which the Community Property Agreement is attached had not been probated and was of no legal force or effect. Booth challenged Exhibit 2 on grounds it was not properly authenticated because it had been "altered" by being separated from Len Olson's 1990 will and it had a sticker placed over the original title on its backing. Previously, Exhibit 2 had been stapled with Len Olson's 1990 will in a single backing. Booth argued that by removing the staples and stapling the Community Property Agreement to the backing without the will, Exhibit 2 was an incomplete document. Booth conceded in his suit he was asking the court to construe the Community Property Agreement, but did not agree it was admissible.
The trial court ruled both exhibits inadmissible. Based on that ruling, without either Community Property Agreement in evidence, the parties agreed the legal effect of the evidentiary ruling resulted in a declaratory judgment that the Community Property Agreement was unenforceable. Judgment was entered consistent with the parties' agreement; the court agreed Haugen and Morissette did not waive their objections or right to appeal the ruling. Haugen and Morissette now assert the court erred because both exhibits were admissible.
We review the trial court's exclusion of evidence under an abuse of discretion standard, reversing if any error probably caused the rendition of an improper judgment. See Tex.R.App.P. 44.1; Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d 35, 43 (Tex. 1998). Booth argued Exhibit 2 was inadmissible because it had not been authenticated. He argued the exhibit had been altered and was not a complete document. He contested the admissibility of Exhibit 1 under grounds of relevance. Under the rules of evidence, the requirement of authentication is met when there is sufficient evidence to show the item in question is what its proponents claim. Tex. R. Evid 901. Evidence is considered relevant if it has "any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Tex. R. Evid. 401. Relevant evidence is generally admissible unless its probative value is substantially outweighed by the danger of unfair prejudice. Tex. R. Evid 402, 403.
Haugen and Morissette asserted each Community Property Agreement was an agreement signed by Blanche and Lennart. Therefore, the admissibility issue regarding authenticity of Exhibit 2 needed to address only whether Exhibit 2 as offered was, in fact, a document signed by both Blanche and Lennart. In the evidentiary hearing, Booth stated there was no dispute as to the signatures, but he disputed the purpose for which the exhibit was being offered. In making his argument against Exhibit 2, however, Booth actually argued the exhibit was not a legally effective document. Booth contended in the evidentiary hearing that the document marked Exhibit 2 could not stand as a free-standing agreement and had been altered because staples had been removed and a different label had been placed on the backing of Exhibit 2. Also, Booth contended because it had been separated from Lennart Olson's will, it was incomplete. In support of admissibility, Haugen and Morissette contended Exhibit 2 had not been "altered" by stapling or separation from the will, and was, on its face, an integrated and complete document. However, these arguments concern the contents and effect of the Community Property Agreement, not whether it was in fact a writing signed by both Blanche and Lennart, an issue uncontested. Therefore, we conclude Exhibit 2 was sufficiently authenticated under the rules of evidence. See Tex. R. Evid. 901.
We also conclude Exhibit 1 was relevant. Before the court was Booth's petition for declaratory judgment in which Booth had requested the court rule, among other things, that the Community Property Agreement was unenforceable. Haugen and Morissette had a counterclaim before the court in which they requested the court to declare the Community Property Agreement valid and enforceable. Without either exhibit in evidence before it, the court could not determine the Agreement's validity and whether the Agreement was enforceable, an issue of consequence to the determination of the declaratory judgment action. See Tex. R. Evid. 401.
In their brief, Haugen and Morissette address the possibility the admissibility ruling concerning Plaintiff's Exhibit 2 could be viewed as a discovery sanction, and Booth contends the exhibit could have been disallowed as a discovery sanction. However, during the hearing on admissibility, Booth neither moved for sanctions nor did the court address discovery sanctions. Two months before trial, Booth moved to compel production of the original Plaintiff's Exhibit 2, and Haugen and Morissette produced the original before the court began the hearing on Booth's motion. The admissibility hearing, the subject of which we are now reviewing, was conducted after the jury was impaneled. We do not consider the issue of possible pretrial discovery sanctions, resolved in a motion to compel with which Haugen and Morissette complied, to be before the Court.
Having determined Exhibit 2 was sufficiently authenticated and Exhibit 1 was relevant to the determination of the declaratory judgment action, we hold the court's ruling the exhibits were inadmissible was error. However, even with identified error, we must still address whether that error was harmful-whether it "probably caused the rendition of an improper judgment." See Tex.R.App.P. 44.1. To determine harm, we make an inquiry as to whether the judgment turned on the piece of evidence improperly excluded. See Tex. Dep't of Transp. v. Able, 35 S.W.3d 608, 617 (Tex. 2000); City of Brownsville v. Alvarado, 897 S.W.2d 750, 752 (Tex. 1995) ("A person seeking to reverse a judgment based on evidentiary error need not prove that but for the error a different judgment would necessarily have been rendered, but only that the error probably resulted in an improper judgment.")
Haugen and Morissette contend that many of the issues to be tried involved the interpretation and validity of the Community Property Agreement. Without either exhibit before it, the court could not rule on the validity or enforceability of the Community Property Agreement. Furthermore, without either exhibit in evidence, Haugen and Morissette were not allowed to present evidence on their defensive theories. The judgment thus turned on the excluded exhibits.
The trial court erred in excluding Plaintiff's Exhibits 1 and 2. The excluded evidence was controlling to a material issue in the case. Therefore, the exclusion of the exhibits was harmful. We resolve Haugen and Morissette's first issue in their favor.
Attorneys' Fees
In their second issue, Haugen and Morissette complain there is insufficient evidence to support the award of attorneys' fees. Because of our resolution of the first issue, we need not decide the merits of the second issue. We have resolved Haugen and Morissette's first issue in their favor, and this results in a reversal of the judgment. The court awarded fees to the prevailing party below and the judgment does not reflect the reasons for doing so. We have no evidence to indicate whether the trial court's award of fees would also be equitable and just in light of our opinion in this case. Accordingly, we reverse the portion of the judgment awarding attorneys' fees and remand the issue of attorneys' fees to the trial court for its reconsideration in light of this opinion. See State Farm Lloyds v. Borum, 53 S.W.3d 877, 894 (Tex. App.-Dallas 2001, pet. denied). Appointment of a Receiver In their third issue, Haugen and Morissette contend the court erred in appointing a receiver. After the court entered the final judgment, Booth moved to remove Haugen and Morissette as independent co-executors. The court granted the motion and appointed a temporary administrator, later appointing a receiver. The receiver did not have express power to act on behalf of the estate regarding the appeal from the declaratory judgment.
Haugen and Morissette do not contest their removal as independent co-executors. Instead, they complain the receiver did not, under the terms of his appointment, have the power to pursue an appeal from the final judgment. However, Haugen and Morissette, as beneficiaries of the estate, appealed that judgment. Their complaint, therefore, is moot.
Even if their complaint were not moot, the trial court has broad discretion in the appointment of a receiver. In re Herring, 983 S.W.2d 61, 65 (Tex. App.-Corpus Christi 1998 no pet.) ("The Texas receivership statute provides for the appointment of a receiver in a number of specific instances, but also allows generally for the appointment of a receiver `in any other case in which a receiver may be appointed under the rules of equity.' (quoting Tex. Civ. Prac. Rem. Code Ann. § 64.001(a)(7) (Vernon Supp. 2004)). Absence a showing of abuse of that discretion, we will not disturb the court's appointment.
Haugen and Morissette argue only a secured creditor has standing to apply for a receivership, but the case they cite states that for a creditor to be entitled to a receivership, he must be a secured creditor. The case does not state that all persons who apply for a receivership must be secured creditors. See Parr v. First State Bank, 507 S.W.2d 579, 582 (Tex. Civ. App.-San Antonio 1974, no writ). The civil practices and remedies code lists several actions in which a court may appoint a receiver, and application by a creditor is only one such action. The court may also appoint a receiver "in any other case in which a receiver may be appointed under the rules of equity." Tex. Civ. Prac. Rem. Code Ann. § 64.001(a)(7). Haugen and Morissette have not shown how the appointment of a receiver in this case amounted to an abuse of discretion by the trial court.
Because Haugen and Morissette pursued the declaratory judgment appeal themselves, we conclude the complaint regarding the appointment of a receiver is moot. We resolve Haugen and Morissette's third issue against them. However, we invite the trial court to revisit the issue in light of any action by the trial court on remand
Conclusion
We reverse the judgment of the trial court and remand this case for further proceedings. In doing so, we likewise reverse the award of attorneys' fees and remand for reconsideration in light of this opinion.