Opinion
NO. 14-17-00825-CV
02-13-2018
IN RE MATTHEW CASSAR, INDEPENDENT EXECUTOR OF THE ESTATE OF ALINE V. GAUSEPOHL, Relator
ORIGINAL PROCEEDING WRIT OF MANDAMUS
Probate Court No. 4 Harris County, Texas
Trial Court Cause No. 436512-401
MEMORANDUM OPINION
October 19, 2017, relator Matthew Cassar, Independent Executor of the Estate of Aline V. Gausepohl, filed a petition for writ of mandamus in this court. See Tex. Gov't Code Ann. § 22.221 (West Supp. 2017); see also Tex. R. App. P. 52. In the petition, Matthew asks this court to compel the Honorable Christine Butts, presiding judge of Probate Court No. 4 of Harris County, to vacate her October 10, 2017 order requiring Matthew to post a bond in the administration of an estate. We conditionally grant the petition.
BACKGROUND
Aline Gausepohl executed a last will and testament on December 2, 2014 (the "2014 Will"). The 2014 Will did not include Aline's sister, Florence Anderson, as a beneficiary, although Florence had been named a beneficiary in Aline's 2012 and 2013 wills (the "2012 Will" and the "2013 Will"). The 2014 Will appointed Aline's nephew, Matthew, as independent executor. The trial court, on February 10, 2015, appointed Matthew independent executor, with no bond required. Matthew applied to probate Aline's 2014 Will and the matter was assigned case number 436,512 in Probate Court Number 4 in Harris County.
Florence filed a contest to the 2014 Will, which was assigned case number 436,512-401. Florence asked the court to declare the 2014 Will invalid and offered Aline's 2013 Will, or alternatively Aline's 2012 Will, for probate. Florence also objected to the suitability of Matthew to act as independent executor. Florence further claimed that she had been the designated beneficiary of an annuity belonging to Aline, but the designation was changed as a result of undue influence at a time when Aline lacked contractual capacity. Florence requested that the beneficiary designation for the annuity be set aside.
On February 27, 2017, two years after filing the will contest, Florence filed a motion to require Matthew, as independent executor, to post a bond in case number 436,512-401. Florence contended that Matthew had committed mismanagement of the estate by moving all estate funds formerly located in the trial court's jurisdiction to Canada. Florence maintained that if she were successful in her will contest, she would be unable to collect on her judgment because the estate funds were no longer in the trial court's jurisdiction. According to Florence, having Matthew post a bond was the only way to protect her interests.
The trial court held an evidentiary hearing on May 9 and 11, 2017. Matthew testified that he moved all assets located in the United States to the National Bank of Canada. Matthew and the beneficiaries of the 2014 will are Canadian citizens. The court stated that it did not hear anything that would lead it to believe that Matthew was doing anything that would require a bond, but that a bond was appropriate if Matthew was not willing return the estate assets to the United States. Matthew agreed that $900,000 in U.S. dollars was under his control.
The trial court signed the order directing Matthew, as independent executor, to file a bond in the amount of $900,000. The order was entered in cause number 436,512-401. On May 18, 2017, "Matthew Cassar, Principal, . . . who has been appointed Independent Executor of the Estate of Aline Gausepohl, Deceased" posted the bond in cause number 436,512-401.
Florence's claims were tried to a jury, which, on July 21, 2017, returned a verdict, finding that Aline did not (1) lack the testamentary capacity or intent to sign the 2014 Will; (2) sign the 2014 Will as a result of undue influence; (3) lack the capacity to sign certain beneficiary designation forms; (4) sign the beneficiary designation forms as a result of undue influence; and (5) sign the beneficiary designation forms as a result of fraud. The jury further found that Florence acted in good faith and with just cause in bringing her suit to set aside the 2014 Will and to probate the 2013 Will and, alternatively, the 2012 Will. The jury determined the amount of reasonable attorneys to represent Florence in the trial court was $302,889.03 and the amount of necessary expenses was $63,598.62.
On September 29, 2017, the trial court held a hearing on the defendants' motion to disregard certain jury findings and to enter a final take-nothing judgment. At the hearing, Florence orally objected to rescinding the bond. The trial court did not consider Florence to be an interested person in light of the jury's verdict, and stated that the bond needed to be independent of the judgment in the will contest. The trial court stated that, at the time it required the bond in May 2017, it viewed Matthew's having moved the assets to Canada as mismanagement, which continued as long as the assets remained in Canada and Matthew refused to return them to the United States.
On October, 10, 2017, the trial court signed an ordering enforcing the May 11, 2017 order:
On this day, the Court considered the bond of the Executor of the Estate of Aline V. Gausepohl, Deceased and finds that Matthew Cassar, Independent Executor of the Estate of Aline v. Gausepohl, Deceased failed to fully comply with this Court's prior Order Requiring Executor to Post Bond, signed May 11, 2017, in that he executed and presented to this Court a bond in his individual capacity rather than in his capacity as Independent Executor. Therefore,In the second bond order, the trial court (1) stated that Matthew did not file the bond in his capacity as independent executor in cause number 436,512-401; and (2) ordered Matthew to file the bond in his capacity as independent executor in cause number 436,512.
IT IS ORDERED that Matthew Cassar, as Executor of the Estate of Aline V. Gausepohl, Deceased, fully comply with this Court's May 11, 2017 Order within ten (10) days of the date of this Order by executing and filing a new bond in the amount of $900,000.00 in his capacity as Independent Executor of the Estate of Aline V. Gausepohl, Deceased, and that such bond be filed in the base file (Cause No. 436,512).
On November 21, 2017, the trial court signed a take-nothing judgment on Florence's claims, but awarded Florence attorney's fees in the amount of $302,889.03 and expenses in the amount of $63,598.62 from Aline's estate. On December 21, 2017, the defendants filed a motion for new trial with respect to the award of attorney's fees and costs to Florence. On December 29, 2017, the parties filed a notice of settlement advising the trial court that they had reached a final settlement; the motion for new trial was withdrawn as moot.
See Tex. Est. Code Ann. § 352.052(b) (West Supp. 2017) ("A person designated as a devisee in or beneficiary of a will or an alleged will who, for the purpose of having the will or alleged will admitted to probate, defends the will or alleged will or prosecutes any proceeding in good faith and with just cause, whether or not successful, may be allowed out of the estate the person's necessary expenses and disbursements in those proceedings, including reasonable attorney's fees.").
Although the parties settled the will contest in cause number 436,512-401, the October, 10, 2017 order requiring Matthew to post a bond in cause number 436,512 remains in place. Matthew brings this mandamus proceeding seeking to have the trial court set aside that order.
STANDARD OF REVIEW
Generally, to be entitled to mandamus relief, a relator must demonstrate that (1) the trial court clearly abused its discretion; and (2) the relator has no adequate remedy by appeal. In re Nat'l Lloyds Ins. Co., 507 S.W.3d 219, 226 (Tex. 2016) (orig. proceeding) (per curiam). A trial court clearly abuses its discretion if it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law or if it clearly fails to analyze the law correctly or apply the law correctly to the facts. In re H.E.B. Grocery Co., L.P., 492 S.W.3d 300, 302-03 (Tex. 2016) (orig. proceeding) (per curiam); In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005) (orig. proceeding) (per curiam).
Determining whether a relator has an adequate remedy by appeal requires a careful balance of jurisprudential considerations that implicate both public and private interests. In re Ford Motor Co., 165 S.W.3d 315, 317 (Tex. 2005) (orig. proceeding) (per curiam) (quotations and citations omitted). "When the benefits of [mandamus review] outweigh the detriments, appellate courts must consider whether the appellate remedy is adequate." In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 136 (Tex. 2004) (orig. proceeding). A relator does not have an adequate remedy by appeal if he is in danger of losing a substantial right. In re Van Waters & Rogers, Inc., 145 S.W.3d 203, 211 (Tex. 2004) (orig. proceeding) (per curiam). Such a danger arises when the appellate court would not be able to cure the error after judgment has been entered. Id.
TRIAL COURT'S ABUSE OF DISCRETION
The Texas Estates Code Requires that a Sworn Complaint be Filed
Matthew contends that the trial court abused its discretion by requiring him to post a bond in cause number 436,512 because no sworn, written complaint alleging mismanagement by Matthew was filed by a person with a claim against Aline's estate. Instead, the trial court's order was issued sua sponte and Matthew, therefore, claims that the order is fatally defective.
Generally, in an independent administration of an estate, the independent executor may proceed without involvement by the probate court "except where this title specifically and explicitly provides for some action in the court." Tex. Estates Code Ann. § 402.001 (West 2014). However, the probate court may require the independent executor to post a bond "on proper proceedings had for that purpose as in the case of personal representatives in a supervised administration, if it be made to appear at any time that the independent executor is mismanaging the property, or has betrayed or is about to betray the independent executor's trust, or has in some other way become disqualified." Tex. Estates Code Ann. § 404.002 (West 2014).
Section 305.102 sets forth the procedures required for the trial court to order an independent executor to post a bond. Tex. Estates Code Ann. § 305.102 (West 2014). "A person who has a debt, claim, or demand against the estate . . . may file a written complaint in the court where the will is probated." Id. § 305.102(b). "On the filing of the complaint, the court shall cite the executor to appear and show cause why the executor should not be required to give bond." Id. § 305.102(c). After a hearing, the court must enter an order requiring the executor to give a bond not later than the 10th day after the date of the order if it appears to the court that the executor is wasting, mismanaging, or misapplying the estate and a person's interest in the estate may be diminished or lost. Id. § 305.102(d).
Florence filed an unsworn motion in cause number 436,512-401 to require Matthew to post a bond to protect her interest in the estate. The trial court, after a hearing, stated that it found no mismanagement by Matthew but required him to post a bond because he had moved the assets to Canada and would not return them to the United States. The trial court signed the May 11, 2017 order in cause number 436,512-401, requiring Matthew, as independent executor, to file a bond in the amount of $900,000. Matthew filed the bond as independent executor in cause number 436,512-401.
Matthew contends that neither the first nor the second bond order would exist but for Florence's unsworn application to impose a bond on the executor. Any complaints about the first order to post a bond are moot because Matthew posted the bond.
After the jury trial in cause number 436,512-401, Florence opposed rescinding the bond to protect her interest in any attorney's fees the trial court awarded her. The trial, however, court rejected Florence's argument that she had an interest in the estate. Instead, the trial court decided that Matthew's actions in moving the funds to Canada and refusing to return them was mismanagement of the estate.
In the October 10, 2017 order, the trial court stated that Matthew had failed to fully comply with the May 11, 2017 order because he executed a bond in this individual capacity rather than in his capacity as independent executor. The trial court ordered Matthew to fully comply with the May 11, 2017 order by executing and filing a new bond in the amount of $900,000 in his capacity as independent executor and that he file the bond in cause number 436,512.
A review of the bond, however, reflects that Matthew executed and filed the bond in his capacity as independent executor, thereby complying with the May 11, 2017 order. Therefore, the trial court was ordering Matthew to comply with an order with which he had already complied. The trial court added a new requirement: that Matthew file a new bond in cause number 436,512. No sworn motion asking for the new bond was filed. The plain language of section 305.102 requires that a complaint be filed and does not provide for the trial court to sua sponte require the executor to post a bond. In the absence of a sworn motion requesting the trial court require Matthew, as independent executor, file a bond in cause number 436,512, the trial court abused its discretion by ordering that Matthew file such bond.
Matthew further contends that the $900,000 bond is excessive and the bond is essentially a supersedeas bond for Florence's attorney's fees. Given our holding that a sworn complaint is required for a trial court to order an independent executor to post a bond, we need not address these arguments.
The Trial Court Does Not Have Liability in an Independent Administration
Florence asserts that the trial court has potential liability for Matthew's purported mismanagement of the estate, which she claims is an independent reason for the trial court to require Matthew to post a bond. Section 351.354 provides that "[a] judge is liable on the judge's bond to those damaged if damage or loss results to an estate administered under orders of a county or probate court from the gross neglect of the judge to use reasonable diligence in the performance of the judge's duty under this subchapter." Tex. Estates Code Ann. § 351.354 (West 2014) (emphasis added). Therefore, according to Florence, the trial court cannot ignore Matthew's alleged mismanagement in refusing to transfer the assets back to the United States.
Matthew responds that, because section 351.354 involves "estates administered under orders of a county or probate court," it contemplates a dependent administration, not an independent administration under section 401.001(a). See Tex. Estates Code Ann. § 401.001(a) (West 2014) ("Any person capable of making a will may provide in the person's will that no other action shall be had in the probate court in relation to the settlement of the person's estate than the probating and recording of the will and the return of any required inventory, appraisement, and list of claims of the person's estate.").
Matthew further asserts that the interplay between sections 351.354 and 401.007 confirms judicial immunity in the context of an independent administration. Section 401.007 provides that "[a]bsent proof of fraud or collusion on the part of a judge," that judge cannot be held civilly liable for the acts or omissions of the person or entity appointed as an independent executor under sections 401.002 and 401.003. Tex. Estates Code Ann. § 401.007 (West 2014). Section 401.007 expressly states that "[s]ection 351.354 does not apply to the appointment of an independent executor under Section 401.002 or 401.003." Id.
Section 401.002, as referenced in section 401.007, provides that where (1) the will names an executor, but does not provide for independent administration, the distributees may consent to the executor named in the will serving as independent executor; or (2) the will does not name an executor or the named executor is deceased or disqualified, the distributees may consent to a qualified person serving as independent administrator. Texas Estates Code Ann. § 401.002 (West Supp. 2017). Section 401.003, also referenced in section 401.007, provides that the distributees of an intestate decedent may consent to a qualified person serving as independent administrator. Texas Estates Code Ann. § 401.003 (West Supp. 2017). Therefore, according to Matthew, under Florence's position, judges in independent administrations created by a decedent's will would have more exposure for liability than for court-created independent administrations.
Section 351.354 expressly applies to "an estate administered under orders of a county or probate court." Tex. Estates Code Ann. § 351.354. Section 401.001(a) provides for the independent administration of an estate. See Tex. Estates Code Ann. § 401.001(a). Section 401.007 specifically states section 351.354 does not apply to sections 401.002 and 401.003. Tex. Estates Code Ann. § 401.007. Sections 401.002 and 401.003 provide for consent for a qualified person to serve as an independent administrator in an estate when the will does not provide for independent administration or the decedent dies intestate. Tex. Estates Code Ann. §§ 401.002, 401.003. Reading all these sections together, it is clear that section 351.354 does not apply to a section 401.001 independent administration.
Aline provided for an independent administration in her will. See Tex. Estates Code Ann. § 401.001(a). Therefore, section 351.354 does not provide a valid reason for the trial court to impose a bond in this case. To the extent, if any, that the trial court relied on section 351.354 in ordering Matthew to post a bond, the trial court abused its discretion.
NO ADEQUATE REMEDY BY APPEAL
Because we have concluded that the trial court abused its discretion by requiring Matthew to post a bond, we must determine whether Matthew has an adequate remedy by appeal. A relator does not have an adequate remedy by appeal if he is in danger of losing a substantial right. Van Waters & Rogers, Inc., 145 S.W.3d at 211. Matthew stands to lose a substantial right by posting a bond when he is not required to do so. If Matthew were to post the bond, an appellate court would not be able to correct the error after the fact. Therefore, Matthew does not have an adequate remedy by appeal.
CONCLUSION
We conclude that (1) the trial court abused its discretion by ordering Matthew to post a bond in cause number 436,512; and (2) Matthew does not have an adequate remedy by appeal. Therefore, we order the trial court to vacate its October 10, 2017 order, requiring Matthew to post a bond in cause number 436,512. The writ will issue only if the trial court fails to act in accordance with this opinion. We also lift our stay issued on October 20, 2017.
/s/ Marc W. Brown
Justice Panel consists of Justices Boyce, Wise, and Brown.