Opinion
NO. 14-18-00214-CV
03-31-2020
PEGGY A. SKLAR, Appellant v. JOHN H. SKLAR AND PAMELA LYNNE SKLAR-DERBYSHIRE, Appellees
On Appeal from the Probate Court No. 4 Harris County, Texas
Trial Court Cause No. 447279-401
MAJORITY OPINION
This lawsuit concerns the distribution of certain assets from a decedent's estate. The independent co-executors of the estate, appellees John Sklar and Pamela Sklar-Derbyshire, sold two assets (a car and shares in a mutual fund) that were bequeathed to their sister, Peggy Sklar, and offered the proceeds of the sales to Peggy. Peggy then brought this lawsuit against John and Pamela alleging that they breached their fiduciary duties both by selling and in the manner of selling the assets. Peggy also sought the removal of John and Pamela as independent co-executors. After a partial summary judgment regarding the proper interpretation of the will and a bench trial on remaining matters, the trial court entered a take nothing judgment on all of Peggy's claims.
In six issues, Peggy contends that (1) the trial court failed to follow proper courtroom procedures by improperly questioning witnesses, becoming an advocate for appellees, and issuing a ruling before Peggy rested her case; (2) the evidence established that John and Pamela breached their fiduciary duties as a matter of law; (3) the trial court erred in granting a partial summary judgment regarding the proper interpretation of the will; (4) the trial court erred in concluding that the co-executors had no limitation on their authority to sell specifically bequeathed property; (5) Texas public policy prohibits granting independent executors unlimited authority to sell specifically bequeathed property; and (6) a new trial should be ordered due to impropriety, or the appearance of impropriety, in the proceedings below. Concluding that there was no reversible error in the trial court, we affirm.
Background
Barbara Nuremberg Sklar died on February 16, 2016. In her will, she named two of her four children, John and Pamela, as independent co-executors. Among the powers she granted the co-executors in her will were the following from article IV:
I authorize and empower my said Co-Executors to sell, dispose of, deliver and convey any portion of my Estate, real or personal, at public and private sale for any price, on any terms and in any manner that may seem best for them for the purpose of paying any of my debts, partitioning assets or any other purpose, giving due regard for
the bequests that I have made herein.As we discuss in detail below, the proper interpretation of this passage was and is a primary point of contention in this lawsuit.
Among the bequests in her will, Barbara left her 2006 Nissan Murano and her funds in the Vanguard Energy Fund to her daughter Peggy. After John and Pamela were appointed by the probate court as independent co-executors, John sold the Nissan and the Energy Fund shares without consulting or notifying Peggy. He sold the Nissan to CarMax for $7,500 after having twice taken the vehicle there and received an offer for the same amount. He subsequently sent a check to Peggy for that amount, which she cashed only after filing her lawsuit, purportedly to mitigate damages. Peggy asserted that the true value of the car was $16,599 (the price CarMax resold the car for after buying it from John) minus the cost of repairs performed by CarMax.
The bequest of the funds in the Energy Fund was made in the following language: "To my beloved daughter, PEGGY ANN SKLAR, I hereby give devise and bequeath all of the funds generated and on hand at my demise in the following Vanguard Accounts: a. Vanguard Energy . . . Fund . . . ."
John sold the estate's 671.654 shares in the Energy Fund for $32,729.70 on April 29, 2106 and offered the proceeds to Peggy. After Peggy filed suit and complained that she was entitled to the shares themselves and not the proceeds, John bought the shares back with an additional amount added to reflect gains in the value of the Energy Fund as well as dividends that had been paid in the interim. The repurchased shares were then transferred into a Vanguard account that Peggy had created for that purpose. John initially had asked Peggy to sign a receipt and a release of claims before he would send her a check for the Energy Fund proceeds. An attorney representing Peggy around the same time also indicated Peggy would sign a receipt and release if her demands were met. Ultimately, however, after Peggy's lawsuit was filed, John transferred the repurchased shares to Peggy without requiring that she sign a release.
As stated above, in her lawsuit, Peggy alleged that John and Pamela breached their fiduciary duties to her as a beneficiary of the will and she also sought their removal as co-executors along with exemplary damages. Her chief complaints were that the co-executors had sold items specifically bequeathed to her without consulting or notifying her, sold the Nissan for less money than it was worth, and demanded she sign a release before receiving the proceeds from the sale of the Energy Fund shares. Peggy additionally sought a declaratory judgment, asking the trial court "to construe the Will and determine and declare whether . . . the Executors had the authority to sell the Energy Account and the Nissan Car." John and Pamela filed a counterclaim for declaratory judgment, asking the court to declare that they were authorized under the will to sell the items and therefore did not breach any fiduciary duties.
Partial Summary Judgment. Prior to trial, the parties filed competing motions for partial summary judgment, principally debating the proper construction of the language in the will excerpted above regarding the co-executors' authority to sell. John and Pamela argued that the provision gave them broad authority to sell any estate property in any manner that may have seemed best for them for any purpose. They did not ignore the final clause of the provision, i.e., "giving due regard for the bequests that I have made herein," but they asserted it meant "[c]onsideration in a degree appropriate to demands of the particular case," quoting Black's Law Dictionary 501 (6th ed. 1990). They additionally argued that given the broad authority to sell provided in the will, they could not be held to have breached their fiduciary duties by selling or in the manner of selling either the Nissan or the Energy Fund shares. They further asserted that they indeed gave ample consideration to each bequest before selling the items and giving or attempting to give the proceeds to Peggy.
In her motion, Peggy argued that John and Pamela's assertion of broad authority to sell ran contra to the specific bequests made in the will as well as the "due regard" requirement. She insisted that to permit the co-executors to sell any estate property for any reason ignored the testator's clear intent. She additionally argued that even if the co-executors had broad authority to sell estate property, they could still abuse their discretion and breach their fiduciary duties if they acted unreasonably. She asserted that there was no evidence John and Pamela gave due regard to the specific bequests, and she argued that they instead sold the assets out of spite and malice.
The trial court granted John and Pamela's motion in part and denied Peggy's motion. Specifically, the trial court held that pursuant to the will:
Executors are authorized and empowered by the Will to sell, dispose of, deliver and convey any portion of Decedent's Estate, at public and private sale for any price, on any terms and in any manner that may seem best for them for the purpose of paying debts, partitioning assets or any other purpose.In its order, the trial court omitted any reference to the "due regard" clause of the disputed passage, and it did not otherwise expound on whether the co-executors were required to give due regard to bequests. The trial court denied the portion of John and Pamela's motion arguing that they could not be held liable for breaching their fiduciary duties as a matter of law. The remaining issues in the case proceeded to a bench trial.
Bench Trial. Peggy, who lives in Virginia, testified that she would use her mother's Nissan when she came to Texas. She recounted a conversation that occurred in her mother's hospital room about a week before her mother's death. According to Peggy, John told her at that time that it did not matter what the will said, what mattered was what he and Pamela decided. Barbara then said from her bed, "The car is hers." In their testimony, John and Pamela denied that their mother was able to communicate during that period. Peggy further recounted a heated conversation between herself and Pamela in which Pamela threatened Peggy, said "I am going to get you," and told her that she and John could do whatever they wanted with the estate and there would be no money left for Peggy. Pamela, however, denied making these statements in her testimony.
Peggy spoke well of the Nissan's condition and said she wanted the car for practical as well as sentimental reasons, as it had been her mother's car. She recalled telling Pamela that she had had it serviced after Barbara died so that she could drive it back to Virginia. Peggy said, however, that John and Pamela told her that she could not leave Texas with the car until the title had been changed into her name. She further explained that although she planned to store the Nissan at a location where she had other items stored in the Houston area, John offered to store it for her. A February 20, 2016 email exchange was admitted into evidence in which Peggy asked John where she should "leave the car and title," and he responded, "Leave the car at [Barbara's] and put the title in the glove box and I will pick up the car during the week and store it. Once I get a death certificate I will investigate about transferring the title to you." Peggy did as requested, but the next contact she received regarding the car was a letter from John on May 31, 2016 stating that the Nissan had been sold and enclosing a check for $7,500. Peggy said that she was never consulted regarding selling the Nissan and did not consent to the sale.
Peggy then hired a lawyer to make inquiries regarding bequeathed assets, including the Nissan, the Energy Fund shares, and some personal items. There followed the demand letter from Peggy's counsel and John's two letters offering to send her the proceeds from the sale of the Energy Fund shares and the personal items in exchange for her signing a receipt and release of claims. Peggy stated that it would cost her $20,000 to buy a car similar to the Nissan and that she was seeking $10,136.44 in damages, which appeared to be based on the replacement cost minus the $7,500 she had received and the value of repairs made by CarMax. Regarding the Energy Fund shares, Peggy stated that she was not consulted and did not consent to the sale of the shares, but she acknowledged that she ultimately received the full amount of shares to which she was entitled.
John testified that Barbara's estate had limited assets, including the Energy Fund shares and Nissan, as well as a few bank accounts with small balances and personal items. The estate inventory listed assets with a total estimated value of $43,078.45, of which the Nissan and Energy Fund shares comprised the lion's share. John further explained that the estate did not have enough money to pay its debts, including administration expenses. Nevertheless, according to John, every effort was made to ensure Peggy received what she was entitled to under the will; indeed, he stated that she was the only person to have received anything under the will except for personal possessions to the detriment of everyone else. He explained that he and Pamela decided to sell the Energy Fund shares in part because the value of the shares had risen over the 11 months prior to the sale and they thought it was in Peggy's best interest to sell the shares and lock in the gains. He said that it was "common knowledge" at the time that there were problems in the energy market that might affect the value of the shares going forward. He acknowledged not consulting Peggy regarding the sale.
John also acknowledged not consulting Peggy about selling the Nissan. He said that although it was conceivable they might have needed to sell the car to pay funeral expenses or debts of the estate, they did not do so but did everything they could to benefit Peggy, even to the point of not reimbursing themselves for probate expenses. John, a licensed attorney, had acted as the attorney for the estate and was owed around $8,000 at the time of trial, which he said was a reduced rate.
John agreed that he directed Peggy to leave the Nissan at the assisted living facility where Barbara had been living and told her he would store it. He pointed out that at the time, the car was still estate property and he had not yet been appointed as an executor. He further said that Peggy never told him that she wanted to take the Nissan back to Virginia and it was "ridiculous" to suggest that his response to Peggy regarding what she should do with the car was in some way "baiting" her so that he could sell the car.
At this point, the trial judge asked counsel if they minded her asking some questions of John, to which Peggy's counsel stated, "go ahead." In response to the judge's questions, John explained that Barbara had a life insurance policy, the proceeds from which were intended to pay for her funeral with the remainder (a little over $4,000) going to John, although John said that he put the remainder in the estate instead of keeping it. Additionally, all four of Barbara's children had contributed $1,000 each to the estate to help with administration expenses. Money for funeral expenses also came from a "nonprobate account," the remaining balance of which was divided between the four children.
Roy T. Bent, a certified car appraiser, testified that the fair market value and the actual cash value of the Nissan at the time it was sold to CarMax was $7,500. He further opined that the $16,599 sales price CarMax received when it resold the Nissan was not fair market value, and he explained that CarMax had to take restorative measures to get the Nissan into marketable condition. He further asserted that CarMax's pricing likely took into account the buyer's credit score and down payment as well as CarMax's "carrying cost," documentation and administrative fees, and other business expenses as well as profit. He also stated that he did not know what warranties or gap insurance might have been involved in the sale. Bent estimated the repairs CarMax made to the Nissan cost $2,608.92, and he noted that the vehicle had been modified for use by a handicapped person, which may have negatively affected its value. Bent rated the Nissan's condition as "below average" and observed that at least part of it had been repainted. He additionally criticized CarMax's appraisal process and suggested that the CarMax appraiser's notation of "good condition" across the board on the appraisal form signified a "hurry up" and not a detailed appraisal. He further stated that the National Automobile Dealers Association "Blue Book" value for a similar car, $8,263, supported his conclusion that this Nissan was worth $7,500 at the time it was sold to CarMax.
Pamela testified that John consulted with her and she agreed with his decisions regarding the estate. She said that she had not been in communication with Peggy during the period of time relevant to the issues in the lawsuit, and she explained that they decided to sell the Nissan because it was in horrible condition, Peggy already had an old car, and Barbara wanted Peggy to have a better vehicle than a ten-year-old car. Similar to John's testimony, Pamela said that Peggy was the only person to receive any money from the estate. Pamela further discussed the strained or nonexistent relationship between Peggy and other members of the family, and she denied threatening Peggy or telling her that she was going to get nothing from the estate.
Once counsel for both sides passed the witness, the trial judge stated that she had a couple of questions and began asking about the estate's balances, i.e., debts and expenses versus assets. The judge directed most of her questions to Pamela, but a discussion ensued that included John (he was one of two attorneys representing himself and Pamela) as well as Peggy's counsel. At one point, the judge said "what I'm doing is not right. I don't want to get testimony at this point from [John]." Peggy's counsel then stated, "Just for the record, I'm just going to object to the questioning by the judge of the witnesses. They've already testified that they sold the car, they sold the Energy Fund, they did not sell either of them to pay administration expenses that's of the estate or funeral expenses." The judge noted the objection and indicated that she just wanted to get a "summary for my own understanding of the case."
As they examined the estate inventory, the judge observed that the life insurance proceeds John contributed to the estate were listed as a loan, and Pamela stated that John had contributed those funds because they were intended to help with funeral expenses. The judge referenced the assets and debts and expenses again and then said, "And so, if the estate is under water to the tune of almost $10,000, I don't see how the sale of the Murano was problematic." After a little more discussion regarding who was owed money from the estate, the judge invited counsel for both sides to ask any additional questions of Pamela that they may have. Instead of asking any questions, however, Peggy's counsel renewed his objection to the judge's questioning the witness and moved for a mistrial based on that questioning. The judge denied the motion and said: "I don't see that the Defendants did anything wrong." Peggy's counsel then asked, "Are we excused?" And John asked, "Your Honor, has the Court made a ruling?" To which, the judge replied, "I believe I have. . . . I can't rule in favor of the Plaintiffs on any count." The trial then concluded.
At a subsequent hearing for entry of judgment, Peggy's counsel stated that he was "reurg[ing] the motion for new trial," by which he apparently meant the motion for mistrial, as he had just referenced that motion and no motion for new trial had been filed at that point. As grounds, counsel alleged that the judge had acted as an advocate in the trial and had pursued unraised, unsupported defenses, namely that the assets at issue had been sold to pay estate expenses. Counsel further complained that he was not given an opportunity to call rebuttal witnesses or make a closing statement at the conclusion of the trial. The judge then offered to let counsel question John right then, but counsel demurred, explaining that his client, Peggy, was not present. The judge then asked counsel if he would like to schedule a time to return with Peggy, but counsel insisted that he wanted a mistrial declared and a new trial ordered. The judge then signed a take nothing judgment disposing of all claims.
Findings of Fact. In the findings of fact, the trial court quoted the entirety of the provision in the will regarding the co-executors' authority to sell estate property, including the "due regard for the bequests" clause. The trial court found that the co-executors sold the Energy Fund shares because they thought it was in the best interests of the estate and Peggy to secure gains and avoid market fluctuations. The court's findings further tracked the evidence regarding the transfer of the shares to an account owned by Peggy, including additional shares reflecting capital gains and dividends.
Regarding the Nissan, the court found that the co-executors believed it was prudent and in the best interests of the estate and Peggy to sell the car "[a]fter ample consideration was given to retaining the vehicle, and weighing factors such as age, condition, repairs, storage, insurance and other costs." The findings of fact also tracked appraiser Bent's testimony regarding the value of the Nissan.
In its conclusions of law, the trial court held that Peggy failed to prove her breach of fiduciary duty claim. The court explained that the intent stated in the will granted the co-executors authority to sell any estate property on any terms and in any manner that seemed best for them and that they deemed proper after due consideration to the bequests. The court concluded that the authority to sell was valid against a specific bequest and that the co-executors sold the Energy Fund shares and the Nissan after ample consideration was given to each and after determining that the transactions were fair and reasonable and in the best interests of the estate. The court further determined that the co-executors complied with the terms of the will, were not required to inform Peggy or obtain her consent prior to selling the assets, and did not breach their fiduciary duties by at one point requesting a release before delivering the proceeds from the Energy Fund shares. The trial court also held that there were no grounds supporting the removal of John and Pamela as co-executors and that Peggy was not entitled to an award of attorney's fees or costs. In the final judgment, the trial court ordered that Peggy take nothing on all of her claims and that all costs were to be borne by the party that incurred them.
Discussion
We will begin by addressing Peggy's second issue, in which she contends that she established that John and Pamela breached their fiduciary duties to her as a matter of law. We will then discuss her third, fourth, and fifth issues, which concern the trial court's interpretation of the will and the authority granted to the co-executors. And lastly, we will consider Peggy's first and sixth issues in which she complains regarding the trial court's manner of conducting the trial.
I. Breach of Fiduciary Duty
In her second issue, Peggy contends that she established that John and Pamela breached their fiduciary duties as a matter of law. We review a trial court's findings for legal sufficiency of the evidence using the same standards applied in reviewing evidence supporting a jury's verdict. Aguiar v. Segal, 167 S.W.3d 443, 449 (Tex. App.—Houston [14th Dist.] 2005, pet. denied); see also Davis v. City of Austin, 632 S.W.2d 331, 333 (Tex. 1982). A party who attacks the legal sufficiency of an adverse finding on an issue on which that party had the burden of proof must demonstrate on appeal that the evidence establishes, as a matter of law, all vital facts in support of the issue. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001); Fredieu v. W&T Offshore, Inc., 584 S.W.3d 200, 214 (Tex. App.—Houston [14th Dist.] 2018, pet. filed).
In applying this standard, we consider whether the evidence adduced at trial would enable reasonable and fair-minded people to reach the verdict under review. City of Keller v. Wilson, 168 S.W.3d 802, 827 (Tex. 2005). We look at the evidence in the light most favorable to the verdict and indulge every reasonable inference to support it. Id. at 822. We credit favorable evidence if reasonable jurors could and disregard contrary evidence unless reasonable jurors could not. Id. at 827. If the evidence falls within the zone of reasonable disagreement, we may not substitute our judgment for that of the factfinder, who alone determines the credibility of the witnesses, the weight to be given their testimony, and whether to accept or reject all or any part of that testimony. Id. at 822.
To recover on a breach of fiduciary duty claim, a plaintiff must prove that (1) a fiduciary relationship existed between the plaintiff and the defendant, (2) the defendant breached his or her fiduciary duty to the plaintiff, and (3) the defendant's breach resulted in an injury to the plaintiff or a benefit to the defendant. Yeske v. Piazza Del Arte, Inc., 513 S.W.3d 652, 661 (Tex. App.—Houston [14th Dist.] 2016, no pet.).
Peggy is correct, and John and Pamela do not dispute, that as a matter of law an executor of an estate owes a fiduciary duty to a beneficiary of the estate. See Huie v. DeShazo, 922 S.W.2d 920, 923 (Tex. 1996); FCLT Loans, L.P. v. Estate of Bracher, 93 S.W.3d 469, 480 (Tex. App.—Houston [14th Dist.] 2002, no pet.). As for breach of that duty in this case, Peggy asserts that John and Pamela failed to communicate with her or obtain her consent before selling the Nissan or the Energy Fund shares and John used false pretenses to entice Peggy into leaving the Nissan with him, citing Montgomery v. Kennedy, 669 S.W.2d 309, 313 (Tex. 1984) (explaining that executors of an estate owed beneficiary "a fiduciary duty of full disclosure of all material facts known to them that might affect [the beneficiary's] rights"), and Sassen v. Tanglegrove Townhouse Condo. Ass'n, 877 S.W.2d 489, 492 (Tex. App.—Texarkana 1994, writ denied) ("A fiduciary owes its principal a high duty of good faith, fair dealing, honest performance, and strict accountability."). Regarding the injury element, Peggy asserts only that she is entitled to the difference between the $7,500 she received and the cost of a suitable vehicle to replace the Nissan.
Although not specifically raised under issue two, in other places in her briefing, Peggy argues that selling the Nissan for less than what she believed to be its fair market value and requesting Peggy sign a release before she could receive the proceeds from the sale of the Energy Fund shares were also breaches of John and Pamela's fiduciary duties.
As stated, the elements of a breach of fiduciary duty cause of action require a showing of "injury" to the claimant, not necessarily actual damages. See Yeske, 513 S.W.3d at 661; Bhatia v. Woodlands N. Houston Heart Ctr., PLLC, 396 S.W.3d 658, 671 n.17 (Tex. App.—Houston [14th Dist.] 2013, pet. denied). The only injury Peggy alleges here is monetary damages resulting from the sale of the Nissan at what she considered to be a below market value price. In her trial testimony, Peggy asked the court to award her $10,136.44 in damages.
We further note that in her live petition at the time of trial, the only actual damages Peggy sought were (1) "$9,321.82, which equals the difference between the actual value of the Nissan Car, less the purported $7,500 sales proceeds," and (2) "Repurchase of the funds in the Energy Account." As discussed, the Energy Fund shares were repurchased and transferred to Peggy before trial and she does not assert in this appeal any injury relating to the Energy Fund shares.
We conclude that even assuming Peggy established as a matter of law that John and Pamela breached their fiduciary duty to her—a question we need not and do not decide in this appeal—she failed to conclusively demonstrate that she was injured as a result. We begin by noting that Peggy does not cite any authority for her suggestion that replacement value is the proper measure of damages in this case. Generally, fair market value is the proper measure of damages for the loss of personal property. See City of Tyler v. Likes, 962 S.W.2d 489, 496-97 (Tex. 1997); Saulsberry v. Ross, 485 S.W.3d 35, 51 (Tex. App.—Houston [14th Dist.] 2015, pet. denied).
At trial, Peggy acknowledged that she received $7,500 from the sale of the Nissan to CarMax, which is exactly what CarMax paid John for the vehicle. As discussed in detail above, appraiser Bent testified that the fair market value and the actual cash value of the Nissan at the time it was sold to CarMax was $7,500. He supported that conclusion in part by pointing out that the NADA Blue Book value for a similar car was listed as $8,263 and noting that the Nissan was in "below average" condition, required restorative measures to get it into marketable condition, had been modified for use by a handicapped person, and at least part of the vehicle had been repainted.
Peggy testified that she thought the Nissan was in good condition, and she stressed the fact that CarMax had appraised the car as being in "good condition" and resold it for $16,599. In regard to that figure, however, Bent noted the cost of repairs, that CarMax's pricing likely took into account the buyer's credit score and down payment as well as CarMax's own "carrying cost," documentation and administrative fees, and other business expenses as well as profit. He also stated that he did not know what warranties or gap insurance might have been involved in the sale. Bent further criticized the CarMax appraisal process that resulted in the "good condition" designation.
Peggy additionally notes in her briefing that the Nissan had some sentimental value to her because it had belonged to her mother, but she does not appear to claim that the loss of this intangible value constituted a legal injury for which she could recover damages. To the contrary, she states: "The damages caused by Co-Executors' breach of fiduciary duty is the cost of finding a replacement Nissan Car of similar quality and value." She further reconfirms in her reply brief that this is her only claim of injury.
As the trier of fact, the trial judge was permitted to accept Bent's testimony regarding the value of the Nissan and reject or discount Peggy's testimony on this issue. See City of Keller, 168 S.W.3d at 822. In doing so, the trial judge may have reasonably concluded that Peggy did not suffer any injury due to any breach of fiduciary duties by John or Pamela. In other words, Peggy failed to demonstrate that the evidence conclusively established that any breach of their fiduciary duties by John or Pamela resulted in injury to Peggy. See Yeske, 513 S.W.3d at 661; see also Fontenot v. Land Am. Commonwealth Title of Houston, Inc., No. 01-13-00506-CV, 2014 WL 4260114, at *8 (Tex. App.—Houston [1st Dist.] Aug. 28, 2014, no pet.) (mem. op.) (holding evidence did not conclusively establish that breach of fiduciary duty, if any, caused injury).
Because Peggy failed to demonstrate that she was entitled to judgment on her breach of fiduciary duty claim as a matter of law, we overrule her second issue.
II. Authority of the Co-Executors
Peggy's next set of issues challenges the trial court's conclusions regarding the authority of the co-executors. In her third issue, Peggy contends that the trial court erred in granting a partial summary judgment regarding the authority granted the co-executors in the will. In her fourth issue, Peggy contends that the trial court erred in concluding that the co-executors had no limitation on their authority to sell specifically bequeathed property. And in issue five, Peggy asserts that Texas public policy prohibits granting independent co-executors unlimited authority to sell specifically bequeathed property.
Partial Summary Judgment. Peggy's chief complaint under her third issue concerns the language in the summary judgment order that the trial court used to describe the authority granted to the co-executors in the will. Specifically, Peggy notes that the trial court determined the will granted the co-executors broad authority to sell estate property but the court did not mention in its order the language in the will requiring the co-executors "to giv[e] due regard for the bequests" made therein. Peggy asserts that ignoring the "due regard" language improperly modified the will, led to the erroneous conclusion that the authority to sell trumped specific bequests, and probably caused the rendition of an improper judgment.
As set forth above, both sides brought declaratory judgment actions requesting that the trial court construe the will and declare whether the co-executors were authorized to sell the items in question. These claims were the subject of the competing motions for partial summary judgment. The trial court denied Peggy's motion and granted John and Pamela's motion in part.
In construing a will, a court must focus on the testator's intent as it is expressed in the language found within the four corners of the will. ConocoPhillips Co. v. Ramirez, No. 17-0822, 2020 WL 399313, at *3 (Tex. Jan. 24, 2020). Construction of an unambiguous will is a matter of law that we review de novo. Brewer v. Fountain, 583 S.W.3d 871, 876 (Tex. App.—Houston [1st Dist.] 2019, no pet.).
The heart of Peggy's argument is her assertion that the trial court deleted the "due regard" language from its construction of the will. The record, however, does not support this conclusion. Although the order granting partial summary judgment only referenced the co-executor's authority to sell estate property, it does not state that the co-executors were not required to give due regard for the bequests. In their motion for partial summary judgment, John and Pamela asked for two things: a construction of the will that acknowledged their broad authority to sell estate property and a holding that they did not breach their fiduciary duties by selling or in the manner of selling either the Nissan or the Energy Fund shares. Far from ignoring the "due regard" language in the will, John and Pamela argued that it meant "[c]onsideration in a degree appropriate to demands of the particular case," quoting Black's Law Dictionary 501 (6th ed. 1990). They further asserted that they gave ample consideration to each bequest before selling the items and giving or attempting to give the proceeds to Peggy.
In its partial summary judgment order, the trial court recognized the broad authority the will granted regarding selling estate property but declined to hold that John and Pamela had conclusively proven that they did not breach their fiduciary duties. After the bench trial, in which the question of whether John and Pamela had given "due regard" to the bequests was hotly contested, the trial court stated in its conclusions of law that
the intent of the testator is clear that the Independent Co-Executors, after giving due consideration to the bequests of any kind and nature made in the Will, had the right to sell any property of the Estate on any terms and in any manner that seemed best for them and that they deemed proper.
The trial court also quoted the entire provision regarding the authority to sell in its findings of fact, including the "due regard" clause.
The trial court further found and concluded that John and Pamela had indeed given "due consideration" and "ample consideration" to the bequests. The court further noted the reasons that the two assets at issue had been sold: the Energy Fund shares because John thought it was in the best interest of the estate and Peggy to secure gains and avoid market fluctuations and the Nissan because John and Pamela believed it was prudent and in the best interest of the estate and Peggy to sell the car "[a]fter . . . weighing factors such as age, condition, repairs, storage, insurance and other costs."
Far from modifying the will by ignoring the "due regard" language, the trial court found that John and Pamela gave due regard to the bequests. Accordingly, Peggy's argument to the contrary is without merit, and we overrule her third issue.
Limitation on Authority. In her fourth issue, Peggy again asserts that the trial court erred in concluding that the co-executors had unlimited authority to sell estate property. As discussed above, however, the trial court did not make this holding; the trial court concluded that the co-executors were required under the will to give due consideration to the bequests and in fact did so in regards to the Energy Fund shares and the Nissan before selling them.
Additionally, under her fourth issue, Peggy argues that John and Pamela breached their fiduciary duties by, at one point, requesting Peggy sign a release of claims as a condition for receiving the proceeds from sale of the Energy Fund shares, which she contends violated section 405.002(b) of the Texas Estates Code. Of course, as discussed, Peggy ultimately received repurchased shares and never signed a release. Moreover, as discussed above, Peggy failed to establish that she incurred any injury due to any alleged breaches of fiduciary duty by John or Pamela; thus, even if they did breach their fiduciary duties, she is not entitled to a reversal of the take nothing judgment. See Yeske, 513 S.W.3d at 661; Fontenot, 2014 WL 4260114, at *8. Finding no merit in any of Peggy's arguments under issue four, we overrule that issue.
John and Pamela assert that the release of claims was raised as part of settlement negotiations, and indeed, Peggy's attorney at the time also mentioned her signing a release in exchange for receiving the proceeds from the sale.
Public Policy. In issue five, Peggy insists that as a matter of public policy, independent executors should not be permitted to sell specifically bequeathed property without justification. She argues that holding otherwise would permit "family heirlooms, legacy real property and vehicles [to be] sold at the whim of the executor." This issue fails for two reasons. First, Peggy failed to support her short public policy argument with appropriate citation to legal authority or the record. See Tex. R. App. P. 38.1(i) (requiring that appellate briefs "must contain a clear and concise argument for the contentions made, with appropriate citations to authorities and to the record"); see also Reynoso v. Dibs US, Inc., 541 S.W.3d 331, 344 (Tex. App.—Houston [14th Dist.] 2017, no pet.) (holding public policy argument was waived by failure to make clear and concise argument with appropriate citations to authority and the record); In re R.L., No. 04-13-00226-CV, 2013 WL 5508381, at *4 (Tex. App.—San Antonio Oct. 2, 2013, no pet.) (mem. op.) (overruling issue based on public policy argument because issue lacked "any citation to or discussion of appropriate authorities supporting" the issue); Hobbs v. Van Stavern, 249 S.W.3d 1, 5 (Tex. App.—Houston [1st Dist.] 2006, pet. denied) (overruling issue based on public policy argument where party provided "little substantive argument and no citation to authority in support").
Second, Peggy does not explain how or why the public policy she advocates would apply in this case. The trial court did not hold that the co-executors could sell specifically bequeathed property without justification. Indeed, as discussed above, the trial court's findings of fact and conclusions of law set out the considerations the co-executors gave for selling the assets at issue in this case. For these reasons, we overrule Peggy's fifth issue.
III. Courtroom Procedures
Under her first issue, Peggy raises several distinct complaints regarding how the trial judge conducted the trial, arguing the judge erred by (1) questioning witnesses, (2) becoming an advocate for appellees, and (3) issuing a ruling before Peggy had rested her case. We will address these complaints first before turning to Peggy's sixth issue in which she insists that a new trial should be ordered due to impropriety or the appearance of impropriety in the proceedings below.
Questioning Witnesses and Alleged Advocacy. "'[T]he discretion vested in the trial court over the conduct of a trial is great,' including the broad discretion to 'maintain control and promote expedition.'" Dorsey v. Houston Hous. Auth., No. 14-10-00165-CV, 2011 WL 398022, at *2 (Tex. App.—Houston [14th Dist.] Feb. 8, 2011, no pet.) (mem. op.) (quoting Dow Chem., 46 S.W.3d at 240-41). "Although a trial judge should not act as an advocate, h[er] role is more than that of an umpire. For the purpose of eliciting evidence that has not otherwise been brought out, the judge may put competent and material questions to a witness Born v. Va. City Dance Hall & Saloon, 857 S.W.2d 951, 957 (Tex. App.—Houston [14th Dist.] 1993, writ denied). In a bench trial, the judge may question witnesses to clarify facts on an issue that the judge must decide in fulfilling her role as factfinder. E.g., Bhamani v. Citizens Enters., No. 11-13-00041-CV, 2015 WL 1779055, at *8 (Tex. App.—Eastland Apr. 16, 2015, no pet.) (mem. op.). We review the trial court's questioning of a witness for an abuse of discretion. Id.
We begin our analysis by observing that Peggy's counsel only objected toward the beginning of the judge's questions and after the judge had concluded her questions. In the first instance, counsel stated, "Just for the record, I'm just going to object to the questioning by the judge of the witnesses." The judge responded that the objection was "noted" and did not rule on the objection but instead said, "I do need this summary for my own understanding of the case." To which counsel replied, "Thank you, Judge." Having only objected the one time during the judge's questioning and discussion, not obtained a ruling, and not requested a running objection, counsel failed to preserve the complaint that the judge was improperly questioning witnesses or acting as an advocate. See Tex. R. App. P. 33.1(a); Richard Nugent & CAO, Inc. v. Estate of Ellickson, 543 S.W.3d 243, 265 (Tex. App.—Houston [14th Dist.] 2018, no pet.) (holding party failed to preserve error when it failed to renew objection or obtain a running objection); Bhamani, 2015 WL 1779055, at *8 (holding party failed to preserve any error in trial judge's questioning of witnesses in an allegedly "'frequent, aggressive, and inappropriate' manner"); Estate of Querner, 974 S.W.2d 159, 161 (Tex. App.—San Antonio 1998, pet. denied) (holding party failed to preserve error where judge merely "noted" objection); In re McElheney, 705 S.W.2d 161, 163 (Tex. App.—Texarkana 1985, no writ) (same).
Additionally, even if the judge erred in asking questions, Peggy has failed to demonstrate that she was harmed as a result. See Tex. R. App. P. 44.1(a) (requiring for reversal in a civil case that the error probably caused the rendition of an improper judgment or probably prevented the appellant from properly presenting the case to the court of appeals). Most of the information generated had already been introduced without objection, including information about estate expenses and the legal work John had performed for the estate. Moreover, although as Peggy emphasizes, the judge stated at one point that "if the estate is under water to the tune of almost $10,000, I don't see how the sale of the Murano was problematic," the judge did not state that her ruling was based on the fact that the estate had outstanding expenses and debts. Instead, in the findings of fact and conclusions of law, the trial judge explained that John and Pamela were authorized under the will to sell estate property and sold the Nissan and Energy Fund shares after due consideration of those bequests and Peggy ultimately received the Energy Fund shares and proceeds equating to the fair market value of the Nissan. In short, Peggy has not demonstrated that she was harmed by the trial judge's asking questions during trial. See, e.g., Gill Sav. Ass'n v. Chair King, Inc., 783 S.W.2d 674, 681 (Tex. App.—Houston [14th Dist.] 1989), aff'd in part, modified in part, 797 S.W.2d 31 (Tex. 1990).
In-court Ruling. Regarding Peggy's complaint that the trial judge's in-court ruling denied her the ability to call rebuttal witnesses or make closing argument, John and Pamela assert that this complaint was waived because Peggy's counsel did not make a timely request, objection, or motion on that basis. See Tex. R. App. P. 33.1(a) (requiring a timely and sufficiently specific request, objection, or motion to preserve error). As set forth above, toward the end of the trial, Peggy's counsel objected to the trial judge's questioning of witnesses and moved for a mistrial on that basis. The judge denied the motion and stated, "I don't see that the Defendants did anything wrong." Peggy's counsel then asked, "Are we excused?" And John asked, "Your Honor, has the Court made a ruling?" The judge then replied, "I believe I have. . . . I can't rule in favor of the Plaintiffs on any count." The trial then concluded without Peggy's counsel objecting to or making a motion regarding the trial judge's ruling in the manner she did or requesting an opportunity to present rebuttal witnesses or closing argument.
Additionally, we note that during the hearing for entry of judgment, when Peggy's counsel complained that he had not been able to call rebuttal witnesses or make a closing statement at the conclusion of the trial, the judge offered to let counsel question John right then, but counsel declined the offer. The judge then asked counsel if he would like to schedule a time to return to offer additional evidence, but counsel again declined and stated he wanted a mistrial declared and a new trial ordered.
Moreover, even if counsel had made a timely request, objection, or motion, we note that counsel did not make an offer of proof or formal bill of exception regarding what additional testimony he would have produced given the opportunity. See Matter of Marriage of Rangel & Tovias-Rangel, 580 S.W.3d 675, 680 (Tex. App.—Houston [14th Dist.] June 27, 2019, no pet.) (discussing requirement that excluded evidence must be preserved in the record by an offer of proof or formal bill of exception).
Because counsel failed to make a timely and specific request, objection, or motion, the complaint regarding rebuttal evidence and closing argument was not preserved. See In re C.C.E., 530 S.W.3d 314, 322 (Tex. App.—Houston [14th Dist.] 2017, no pet.) (holding party failed to preserve error regarding complaint she did not have an opportunity to present evidence where record did not demonstrate that party requested an opportunity, offered evidence that was excluded, or made an offer of proof or bill of exception). Finding no merit in any of her arguments under her first issue, we overrule Peggy's first issue.
In her reply brief, Peggy points to her motion for new trial as preserving her complaints regarding rebuttal testimony and closing argument. This motion, however, filed two months after the bench trial and almost a month after the trial court signed the final judgment, was hardly timely. See Tex. R. App. P. 33.1(a).
Also in her reply brief, Peggy argues for the first time that error in denying an opportunity to present rebuttal witnesses or closing argument is fundamental error that did not need to be preserved. The largely discredited fundamental error doctrine still applies only in very limited circumstances, such as when the record on its face shows that the court lacked jurisdiction or when a public as opposed to a private interest has been directly and adversely affected as that interest has been declared in the statutes or constitution of Texas. See, e.g., Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 577 (Tex. 2006); Pirtle v. Gregory, 629 S.W.2d 919, 920 (Tex. 1982); Mason v. Our Lady Star of Sea Catholic Church, 154 S.W.3d 816, 821 (Tex. App.—Houston [14th Dist.] 2005, no pet.). Peggy's unpreserved complaints regarding rebuttal testimony and closing argument that were never offered do not rise to the level of fundamental error. See Tamez, 206 S.W.3d 577 (declining to classify trial court's refusal to permit party to present additional evidence as fundamental error)
Alleged Impropriety. Lastly, under her sixth issue, requesting a new trial due to alleged impropriety or the appearance of impropriety in the proceedings below, Peggy mostly raises the same arguments that she did under her first issue, i.e., that the judge improperly questioned witnesses, acted as an advocate, and did not allow Peggy to call rebuttal witnesses or close. We have already disposed of these arguments. The only new argument Peggy raises under issue six is to point out that John and Pamela are members of the State Bar of Texas and, at the time of trial, Pamela was a Harris County District Judge. Other than suggesting that these additional facts raise the specter of impropriety, Peggy does not make a cogent argument in support of her position, much less cite any supporting authority. Accordingly, this argument is inadequately briefed. See Tex. R. App. P. 38.1(i); see also Cogsdil v. Jimmy Fincher Body Shop, LLC, No. 07-16-00303-CV, 2017 WL 4944872, at *3 (Tex. App.—Amarillo Oct. 30, 2017, pet. denied) (mem. op.) (holding argument that Texas recusal and disqualification rules did not adequately guard against appearance of impropriety was inadequately briefed). We overrule Peggy's sixth issue.
Conclusion
Finding no merit in any of Peggy's appellant arguments, we affirm the trial court's judgment.
The dissent suggests that we should address the claims Peggy made in the trial court seeking the removal of John and Pamela as co-executors. However, we cannot reverse a case on unassigned error, see Pat Baker Co. v. Wilson, 971 S.W.2d 447, 450 (Tex. 1998), and Abira Medical Laboratories, LLC v. St. Jude Med Medical SC, Inc., No. 14-17-00849-CV, 2018 WL 3911084, at *2 n.2 (Tex. App.—Houston [14th Dist.] Aug. 16, 2018, no pet.), and we generally do not address issues that are not properly briefed, see Texas Ear Nose & Throat Consultants, PLLC v. Jones, 470 S.W.3d 67, 89 (Tex. App.—Houston [14th Dist.] 2015, no pet.) (citing Texas Rule of Appellate Procedure 38.1(i)).
Although in the Statement of the Case and Statement of Facts sections of her brief, Peggy notes that she included a claim for removal in her pleadings, Peggy does not mention this claim in her Issues Presented, her Argument, or her Prayer. She again briefly mentions removal in her Summary of Argument section in regard to her fourth issue, but she does not supply any authority or argument supporting that fleeting mention. In her argument under issue four, Peggy contends that John and Pamela did not possess unqualified authority to sell items, acted in bad faith, and violated the Estates Code by requiring a release, and that the sales were not fair and reasonable and constituted a breach of their fiduciary duties. She suggests that executors can be held liable for these actions, but at no point in the argument does she mention the word or concept of "removal," much less make an argument for removal or cite any law regarding removal. See Pat Baker Co., 971 S.W.2d at 450; Abira Med. Labs., 2018 WL 3911084, at *2 n.2 Tex. Ear Nose & Throat, 470 S.W.3d at 89.
In her reply brief, Peggy briefly asserts that she presented enough evidence to support her claims for breach of fiduciary duty and removal; however, she still fails to cite any authority regarding removal or make legal arguments supporting that claim as opposed to her claim for breach of fiduciary duty. Moreover, we generally do not consider issues raised for the first time in a reply brief and decline to do so here. See, e.g., Collins v. D.R. Horton-Tex. Ltd., 574 S.W.3d 39, 44 (Tex. App.—Houston [14th Dist.] 2018, pet. denied).
/s/ Frances Bourliot
Justice Panel consists of Chief Justice Frost and Justices Jewell and Bourliot (Frost, C.J., dissenting).