in the Estate of Prentiss N. Kirkland ( 2013 )

REVERSE and AFFiRM: Opinion issued January 2$, 2013.
In The
Qciurt tif Appii1i
FiftI! Thtrict tif xa at atIa
No. 05-1 1-00712-CV
(;AYLIA E. KIRKLAND, Appellant
V.
jOI)IE RAY SCHAFF. JAY REED KIRKLAND.
AND BILLIE .JEAN (KIRKLAND) VERNIANJ)EL, Appellees
On Appeal from the Probate Court No, 1
Dallas County Texas
Trial Court Cause No. PR-l0-03167-1
OPINION
Before Justices Moseley, Fillmore, and Myers
Opinion By Justice Fillmore
Appellant Gaylia F, Kirkland appeals the probate court’s orders removing her as
administrator of the estate of her husband, Prentiss Kirkland, and awarding appellees Jodie Ray
Schaff, Jay Reed Kirkland. and Billie Jean (Kirkland) Vermandel attorney’s fees. In two issues.
appellant asserts the probate court abused its discretion by (1) granting appellees a trial amendment
and awarding them attorney’s fees, and (2) removing appellant as estate administrator. We reverse
the probate court’s order granting appellees a trial amendment and awarding appellees attorney’s
fees, and we render judgment that appellees take nothing on their claim for attorney’s fees. We
affirm the probate court’s order removing appellant as administrator of the estate of Prentiss
Kirkland.
Background
Prcntiss Kirkland (decedent) died intestate on November I. 2009. He was survived by his
wife (appellant) and three adult children from prior marriages (appellces). On September 21.2010,
appellant filed an application for letters of administration of decedent’s estate in probate court. On
October 3, 2010, appellees sued appellant in district court asserting claims for declaratory relief
based upon appellant’s alleged wrongful denial and deprivation ofappellees’ interests in the real and
personal property in decedent’s estate, including sums of cash, the home in which decedent lived
with appellant before his death and improvements to that home, and the inventory, equipment, and
accounts receivabLe ofdecedent’s barrel cleaning and recycling business (barrel business). As heirs.’
appellees sought to recover their interests in half of the community property and two-thirds of
decedent’s separate property. On October 5, 2010, the probate court appointed appellant as the
administrator of decedent’s estate. Appellant answered the district court lawsuit and moved to
transfer and consolidate that lawsuit with the probate proceeding. That motion to transfer and
consolidate was granted by agreed order signed on November 3. 2010.
Appellants filed a bill of review and motion to remove appellant as administrator of
decedent’s estate. A bench trial was conducted on appellants’ bill of review and motion to remove
appellant as administrator. On April 4. 2011. the probate court judge signed an order removing
appellant as administrator ofdecedent’s estate and appointing a successor administrator ofthe estate.
On May 12, 2011, appellees filed their motion for leave to amend their pleadings to include a
specific request for an award ofattorney’s fees and costs pursuant to section 245 ofthe probate code.
“‘HeIrW denote those pistons. Including the swvlvlng spouse, ‘slio sit entitled wder the statutes ofdescent ad distribution a the estate
of ttie4nd w4jo dies injesa” ¶fl Pa Coce MN. * 3(ofl West 5upp 2012); see also Hubbawl v. Rosenthal, No.
lO-I0-OO267CV, 2012
WL 1992124. a *5 (Ten. Aw—Waco May * 2012. pet denied) (man. op.. not designated for publication).
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()ii J utie 14. () I I the probate court signed in order grant lug appellees’ motion br leave to amend
,
their pleadings and granting appellees’ request for attorney’s fees, awarding appellees attorney’s fees
and costs in the amount ot’ SI 5,000 against appellant. individually.
Appellant filed this appeal. She contests the order ol the probate court granting appellees’
motion for a trial amendment and awarding appellees attorney’s fees and the order of the probate
court removing appellant as the administrator of decedent’s estate.
Trial Amendment and Attorney’s Fees
In her first issue. appellant contends the probate court abused its discretion by signing an
order granting appellees’ motion for a trial amendment and granting appellees’ request for attorney’s
fees after the probate courts order removing appellant as the estate administrator was signed.
,Sta,ulard of Re i ‘U’W
Generally, we review a trial court’s decision on the award of attorney’s fees for an abuse of
discretion. Shari/I v. Steen Automotire, LLC, 370 S.W.3d 126, 152 (Tex. App.—Dallas 2012, no
pet. ) Paul r. Merrill Lynch Trust Co. of Jex.. 183 S.W.3d 805. 812 (Tex. App.—Waco 2005, no
pet.) (op. on reh’g). Likewise, the standard of review applicable to a trial court’s decision to allow
or deny a trial amendment is whether the court abused its discretion. Miller v. Wal—Mart Stores. Inc.,
918 S.W.2d 658, 666 (Tex.App.—Amarillo 1996, writ denied). The test for abuse of discretion is
whether the court acted without reference to any guiding rules and principles, or. stated another way,
whether its decision was arbitrary or unreasonable. City of San Benito v. Rio Grande Valley Gas
Co.. 109 S .W.3d 750,757 (Tex. 2003) (quoting Downer e. Aquamarine Operators, Inc., 701 S .W.2d
238, 242 (Tex. 1985)).
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Sect ion 245 of the probate code provides for recovery of reasonable attorney s fees incurred
in obtaining compliance regarding any statutory duty that the personal representative has neglected
or ii a personal representative is removed kr cause. See Ti,x. PRohl. (‘ODE ANN. § 145 (West Supp.
20 l2), Under section 245 of the probate code, a court may assess reasonable attorney’s fees against
the personal representative of the estate. See Lawyers Sur. Corp. v. Larson, 869 S.W.2d 649, 652
(Tex. App.—-----Austin -)4, writ denied) (costs and attorney’s lees are assessed against the personal
representative of the estate “because of the inequities inherent in penalizing the estate for the
administrator s negligence”).
The probate court conducted a bench trial of appellees’ First Amended Bill of Review and
Motion to Remove Administrator, in which appellees sought a bill of review under section 31 of the
probate code’ and a motion to remove appellant as the estate administrator tinder section 222 of the
probate code.
4 Neither section 3 1 nor section 222 of the probate code provide for recovery of
Section 245 provides:
When a personal repiesdntatise neglects to perform a required duly or it a personal representativ is remosed
e for cause, the
personal representative and the sureties on the personal representative’s bond are liable for:
costs ot removal and other additional costs incurred that are not authorized expenditures, as defined
by this
code; and
Ot reasonableattomeys lees incurred in removins the personal representatiseorin obtaininecomplianceregard
ing
an’, statutory duty the personal representative has neglected.
Tex. Peort. Cone ANN, § 245.
Section 31 provides:
Any person interested may, by a bill of review filed in the court in sshich the probate proceedings were
had, have any decision.
order, or judgment rendered by the court, or by the judge thereof, revised and corrected on showing en-or
therein: but no
pi’occss or action under such decision. order or judgment shall be stayed except by svrit of injunction,
and no bill of review
shall be filed after two years have elapsed from the date of such decision, order, orjudgment.
Tex. Ptsott. Core-. ANN. § 31 (West 2003).
Section 222 provides in pertinent part:
b> The court may remove a personal representative on its own motion, or Ott the complaint of any interested person,
after the
personal representatixe has been cited by personal service to answer at a time and place fixed in the notice,
when:
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attorney s lees. Appel lees did not request attorney s tees in their live pleading r in the pIeadin s
prayer for relief. During the bench trial, appellecs’ attorney called himself to testify on the issue of
the attorney s fees incurred in pursuing the motion to remove appellant as estate administrator.
Appellant’s attorney objected to the testimony because there was no statutory right to attorney’s fees
under section 222, the section of the probate court asserted by appellees for removal ot appellant as
the estate adnunistrator. Appellees’ counsel stated attorney’s lees were recoverable under section
245 of the probate court, but appellant’s counsel ob jected that appellees had not pleaded entitlement
to attorneys fees tinder section 235. Counsel for appellees proposed he would make a record
regarding attorney’s fees at that time and “we can argue about the legality later,” to which appellant’s
counsel and the prohite court agreed. The probate court signed its order removing appellant as
administrator of the estate on April 4. 2011. Appellees made no request for a trial amendment to
plead for attorney’s fees prior to that order being signed.
On May 12, 2011, appellees filed their motion for leave to amend their pleading to include
a specific request for an award of attorney’s fees and costs pursuant to section 245 of the probate
code. Although appellees stated in that motion that their request for attorney’s fees “was implicit
in the pleading,” they requested leave to amend their pleading pursuant to rule of civil procedure 63
to include a specific request for an award of attorney’s fees under section 245 of the probate code.
On May 20.2011. appellees filed a letter brief with the probate court in support of their motion for
leave to amend their pleading, asserting appellant’s removal as estate administrator was for cause
due to her mismanagement of decedent’s estate, her breach of fiduciary duty, and her exposure of
4) The personal representative is prosed to have been guilty ot gross misconduct or mismanagement in the
performance of the personal representative s duties,
TEx. PRolt. C’ooo ANN. t 222 (West Supp. 2012).
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the estate to potential liability to the Internal RevenueS ervice (the IRS). Despite the statement of
appellees’ counsel, in response to appellant’s objection at the bench trial ol appellees bill of review
and motion to remove appellant as administrator, that he would make a record regarding attorney’s
fees and “we can arue about the legality later,” in their letter brief. appellees asserted the issue of
attorneys fees under probate code section 245 was tried by consent.
On May 23, 2011, appellant filed a letter brief responding to appellees’ arguments concerning
recovery of attorney’s lees under probate code section 245 and for a trial amendment under rule of
civil procedure 63. Appellant contested appellees’ entitlement to attorney’s fees because the probate
code sections pleaded by appellees in their First Amended Bill of Review and Motion to Remove
Administrator —sections 31 and 222-—do not provide ft)r award of attorneys fees. Appellant noted
appellees’ pleading contained no prayer for attorney’s fees. See Swate v. Medina Crntv. Hasp., 966
S.W.2d 693. 702 (Tex. App.S an Antonio 1998. pet. denied) (hospital did not specifically request
attorney’s fees in its prayer for relief and prayer ftr general relief will not support such an award).
Appellant disagreed with any assertion she had waived her objection or tried the matter of appellees’
attorney’s fees by consent when appellees’ counsel proposed and obtained agreement from
appellant’s counsel and the probate court to appellees’ making a record regarding attorney’s fees.
with the “legality” of the issue to be determined later. Appellant further argued that appellees had
not moved for a trial amendment before the probate court’s order removing appellant as
administrator was signed, and that a request for a trial amendment after a judgment is untimely.
On June 14, 201 1. the probate court signed an order granting appellees’ motion for leave to
amend their pleading and granting appellees’ request for attorney’s fees.
5 That order provides:
to its order eranting appellees’ motion for trial amendment and granting appellees’ request br attomev S fees,
the probate cotirt stated
appellees sought to amend their First Amended Bill of Review and/or Motion to Remove Administrator. The record contains
no amended pleadings
by appellees io)lowmg the probate court’s order granting leave to amend their pk’ading. See Cliv of Fort Worth t’. Zimlich,
26 S,W.3d 62. 73 (Tex.
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Came on tc be con.i.dered the Mc.it.i..on f& Trial .
the First Amended Bill of Review aitci/or Motion to Remove Administrator filed by
I appellees I Alter consideration of the Motion and alter having found no opposition
.
filed by appellant the Court finds that the Motion is well taken and should he
‘
GRANTED,,
lAppellees j request pursuant to Section 245 oh the Fexas Probate Code br
reasonable attorney’s fees and costs in removing lappeilant j as administrator of the
Estate of Prentiss N. Kirkland (“Decedent”) br cause is hereby granted. The Court
hereby awards reasonable attorney s fees and costs to appellees I in the amount of
15,000.00. The Court assesses these attorney’s fees and costs against lappellanti
individually.
The Texas Rules of Civil Procedure recognize the right to file an amended pleading. Under
rule of civil procedure 63, a party may amend its pleadings after the verdict, but before the trial court
has entered judgment. unless the opposing party establishes surprise or the amendment asserts a new
cause of action and thus is prejudicial on its face.
5 See Greenhalgh v. Serv. Lloyds Ins. Co.. 787
S.W.2d 938, 940 (Tex. 1990); Hampden corp. i’. Remark, Inc., 331 S.W.3d 489, 498 (Tex.
App.-.—Dallas 2010, Pet, denied); see also Mavhew v. Deaiev, 143 S.W 3d 356. 371 (‘Fex.
App.—Dallas 2004, pet. denied) (record did not show the trial court granted leave to file the
amended petiticm after rendition of judgment): In re Estate of flu vt’kins. 187 S.W.3d 182. 186 (Tex.
App.—Fort Worth 2006, no pet.) (original and amended petitions “clearly asserted claims against
2000) (trial amendment must he tiled as a written pleading).
6
Although the probate court’s orderstates it found no opposition tiled by appellant to appellees’ motion for leave to amend their pleadings,
appellant’s opposition to appellees’ recovery of attorneys fees under section 235 and to the motion for trial amendment was contained in appellant’s
rvlay 23. 2(111 letter brief.
“The Texas Rules of C’ivil Procedure govern proceedings in probate matters except in those instances in which a specilic provision has
been made to the contrary.” Cunningham 1. I’arkdole Bank, 6605. W.2d 810, 812 (‘fex. 1983)’. see Tex. R. (‘tv. P.2.
8
Rule 63 provides:
Panics mas’ amend their pleadings ...by tiling such pleis with the clerk at such time as not to operate as a surprise to the
epposite party: provided, that any pleadings . offered for tiling within seven days of the date of trial or thereafter, or after
. .
such time as may he ordered by the judge under Rule 166, shall be tiled only after leave of the judge is obtained, which leave
shall be granted by the judge unless there is a showing that such tiling will operate as a surprise to the opposite party.
Tex. R. Ctv. P. 63.
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jestate administratorl ftr partition and distribution ol the estate, damages and interest thereon, a
declaration ol ights to a port ion ol the estate, and attorney s tees incurred in recovering same):
Swate, 966 S.W.2d at 7(32 (motion for attorney’s fees was filed before trial courts entry of final
judgment.
In probate proceedings, “multiple judgments final for purposes of appeal can be rendered on
certain discrete issues.” Lelinanii v. iiurCon Corp.. 39 S.W.3d 191. 192 (Tex. 2001 ). Courts.
including this Court, have allowed appeals from orders removing an executor or estate administrator.
See In re Estute of Miller. 243 S.W .3d 831 (Tex. .‘\pp.-Dal1as 2008. no pet.): In re Ls!atc of
Washinç’ton, 262 S.W.3d 903, 905 (Tex. App.—Texarkana 2008, no pet.): Geeslin v. McEihenney,
788 S.W.2d 683 (Tex. App.—Austin 1990. no writ). Appeal of an order removing an estate
administrator is proper because the order brings to a conclusion a discrete phase of the probate
proceeding. In re Esiate (f Washington, 262 S.W.3d at 905-M6. Here. appellecs sought a trial
amendment to plead for attorney’s fees pursuant to section 245 of the probate code after the probate
court’s final order removing appellant as administrator of the estate. Their request for a trial
amendment after the final order was signed was untimely. We conclude the probate court abused
its discretion by granting the trial amendment and awarding appellees attorney’s fees alter the
probate court’s final order removing appellant as administrator was signed.
We resolve appellant’s first issue in her favor.
Removal of Administrator
In her second issue, appellant contends the probate court abused its discretion in removing
her as administrator of decedent’s estate, asserting that the evidence is legally and factually
insufficient to support her removal.
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Standard of Reiic’u’
A trial court’s order removing an administrator is reviewed under an abuse of discretion
standard. in rc bc o/ Miller, 213 S.W.3d at 83k), A trial court abuses Its discretion if it acts in
an arbitrary or unreasonable manner without reference to any guiding rules or principles. Downer,
7() I S. W .2(1 at 24 1 —42. “Under an abuse of discretion standard of review, we must make an
independent inquiry of the entire record to determine if the trial court abused its discretion and are
not limited to reviewing the sufficiency of the evidence to support the findings of fact made.” in re
Estate of Clark, 198 S.W.3d 273, 275 (Tex. App.—Dallas 2006, pet. denied) (citing Chrysler (orp.
v. Blackman. 841 S .W.2d 844. 853 (Tex. 1 992) (orig. proceeding)). Therefore, we will not aimlyze
the trial court’s fact findings separately from our analysis of whether the trial court abused its
discretion in removing appellant as estate administrator. See In re Estate of Clark, 198 S.W.3d at
275.
A probate courts findings are reviewahie br legal and factual sufficiency by the same
standards applied in reviewing evidence supporting a jury’s answer. ‘atalina v. Blasdel, 881
S.W.2d 295. 297 (Tex. 1994). When confronted by both a legal and factual sufficiency challenge.
an appellate court must first review the legal sufficiency of the evidence. Glorer v. Tex. Gen. liulem.
Co., 619 S.W.2d 400, 401 (Tex.l981).
An appellant attacking the legal sufficiency of an adverse finding on an issue on which it did
not have the burden of proof must demonstrate there is no evidence to support the trial court’s
adverse finding. Croucherv. Croucher, 660 S.W.2d 55,58 (Tex. 1983); Aftrdahle Power, LP. v.
Buckeye Ventures, Inc., 347 S.W.3d 825, 830 (Tex. App.—Dallas 2011. no pet.). When examining
a legal sufficiency challenge to a finding of fact, we review the evidence in the light most favorable
to the challenged finding and indulge every reasonable inference that would support it. City of Keller
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t. Wilson. I 6$ SW 3d 8(32, 822 ( lex. 200 ). L idence is Ie!al lv suIt icient 11 it rises to a level that
would enable a reasonable and fairminded fact finder to make the finding, hi. at 827 .AIegal
sufTiciencv clialleii e tails ii there is more than a scintilla of evidence to support the hnding. krog’r
iv. Li1. Pvhip L Suberu, 216 S.W.3d 788. 793 (Tex. 2006);AfThrdable Power, LP.. 347 S,W.3d
at 830. “Evidence does not exceed a scintilla if it is ‘so weak as to do no more than create a mere
surmise or suspicion that the tact exists. •SubL’ril, 216 S.W.3d at 7g3 (quoting Ford Motor (a. v.
Ridgwav, 135 S.W.3d 598,601 (Tex. 2004)>; see aLso Serv, Corp. Int7 v. Guerra, 348 S.W.3d 221,
228 (Tex. 2() 11) (ii evidence does no more than give rise to mere surmise or suspicion and is so
slight as to necessarily make any inference a guess, then it is no evidence).
In a lactual sutliciency review of a finding, we consider and weigh all the evidence, both in
support of and contrary to the challenged finding. Orti: v. Jones. 917 S.W.2d 770,772 (Tex. 1996)
(per curiam). When a party challenges the factual sufficiency of the evidence supporting an adverse
finding on which it (lid not have the burden of proof, we set aside the finding only if it is so contrary
to the overwhelming weight of the evidence as to be clearly wrong and unjust, C’ain v. Bain, 709
S.W.2d 175, 176 (Tex. 1986) (per curiam); Figueroa s’. Doris. 318 S.W.3d 53. 59 (Tex.
App.—1-louston 1 1st Dist.j 2010, no pet.). We may not substitute our judgment for that of the trier
of fact or pass on the credibility of the witnesses. Mar. Oi’erseas Corp. r. Ellis, 97 1 S.W.2d 402,
407 (Tex. 1998).
Analysis
Section 77 of the probate code provides in pertinent part that letters testamentary or of
administration shall be granted to persons who are qualified to act, first to a person named as
executor in the will of the deceased and second to the surviving husband or wife. TEx. PROB. CoDE
ANN. § 77(a). (b) (West 2003). Although appellant has priority of appointment under section 77, she
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niav be removed under section 222 ol the pt’olte code. Section 222 permits the removal ol the
personal representative if “Itihe personal representative is proved to have been guilty of gross
misconduct, or mismanagement in the pertormance ol the personal representative’s duties.” TEN.
PRol. (‘ODE ANN, § 222(b)(4) (West Supp. 2012). Thus, the probate court did not abuse its
discretu )n in this case iii he record, when reviewed in its entirely, supports one or more grounds for
removal of a personal representative specified in section 222.
As grounds for removal ot appellant as administrator, appellees asserted appellant
rnisappropriated community and separate funds of decedent as her separate property and failed to
properly account for the value of decedent s barrel business and the income from that business,
classified and liquidated assets that were community or separate property of decedent without
granting the estate its proper interest in those assets, undervalued decedent s barrel business and
under-reported income from that business to the IRS, failed to properly account for cash and other
assets of decedent s separate properly, and unilaterally closed decedent’s barrel business. At the
conclusion of the bench trial of appellees’ bill of review and motion for removal of appellant as
estate administrator, the probate court denied the bill of review but concluded appellant should be
removed as administrator based on appellant’s mismanagement of decedent’s estate, breach of
fiduciary duty, and exposure of the estate to potential federal tax liability. The probate court stated:
Mrs. Kirkland. I am very concerned with respect to the tax situation of this
estate. I believe that the estate is at risk of substantial liability from the IRS due to
the failure or the willful omission of information from tax returns. You are
represented by counsel and your counsel can share with you with respect to any
potential criminal liability, hut the estate is at risk with respect to the failure to
correctly report on tax returns. No one has mentioned the possibility of the damage
to creditors’ claims.
I am not aware of what the estate liabilities are at this time, but it concerns me
that the financial picture of this estate is very muddled at this point. I understand that
you are in a quasi-fiduciary role in your employment, and it may be problematic that
I am actually entering an order to remove you because of mismanagement, and I
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regret that, But I believe that I have no choice because the perlormance up to date
iS not acceptable.
‘yotir inventory. eveit the most recent inventory, is inadequate in my vtew.
[‘or example. under claims due to the estate. there’s no identification of any possible
reimbursement claims that Mr. Kirkland had against the estate.
And so I find that the inventory and appraisement that you filed is inadequate.
The listing of separate personal property appears to be inadequate, based on the
testimony that I’ve heard. Most of the testimony i’ve heard today has heemi from you.
And I so the court iS removimu! you as the administrator of this estate.
-
I regret that I have to do this, but in the interest of fairness and in the interest
of protecting the assets of the estate, the interest of the beneficiaries, the interests of
the creditors, I have no choice, and so I am granting the motion to remove based on
mismanaeemnent and on basically breach of fiduciary duty.
The probate court thereafter signed its final order removing appellant as administrator of decedent’s
estate and appointing a successor administrator. In that order, the probate court stated it appeared
appellant had “neglected her duties and should he removed” as administrator of decedent s estate.
The probate court signed findings of fact and conclusions of law in support of removal of
appellant as administrator, including findings that: the income tax returns filed with the IRS by
appellant on behalf of decedent indicated income of $2 1,251.00 and $26,336.00 in 2008 and 2009,
respectively, an understatement which fails to account for cheeks received by the barrel business and
cashed by decedent or appellant; appellant has shown a clear disregard for the proper accounting of
the income of the barrel business; and appellant exposed decedent’s estate to potential tax liability
to the IRS due to her actions. On appeal, appellant contends the evidence is legally and factually
insufficient to support the probate court’s findings.
We begin our analysis by considering the legal sufficiency of the evidence supporting the
probate court’s findings regarding the understatement of income of decedents balTel business.
Appellant does not contend that exposure of the estate to federal income tax liability as a result of
an administrator’s acts or omissions is an improper ground for removal. Rather, appellant contends
there is no evidence appellant “did anything wrong in preparing the 2009 tax return.” We disagree.
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[he 2000 federal inc mc tax return ii led by apj chant on hehal f of decedent was wArn itted in
evidence Appellant signed that income tax return in April 2010, afler decedent’s death in
November 2009. The harrel business income listed on that tax retnrn is 520.336. which is the same
amount shown on a single Form 1099 attached to the tax return. The Form 1090 was prepared by
a customer of the barrel business, Royal Custom Products. inc.
Appellant testified she was aware decedent served many customers other than Roal Custom
Products. Appellant sent a letter to customers of the barrel business after her husband’s death in
which she expressed her appreciation for their business “over the past year.” That letter was sent by
appellant not only to Royal Custom Products, bitt also to Auto Wax Company. Complete Supply
Inc.. and others. However, appellant made no attempt to determine the amount of income received
by the barrel business from any customer to which she sent the letter. For example, appellant
testified she was aware that Auto Wax Company was a customer of the barrel business and that she
had prepared invoices sent to Auto Wax Company prior to her husband’s death. However, she (lid
not include any business income from Auto Wax Company on the 2009 income tax return because
Auto Wax Company did not send a Form 1099 to the barrel business. Appellant made no attempt
to determine the gross amount of business income the barrel business received from its customers
in 2009 before she signed the income tax return relating to that year. According to appellant’s
testimony. she telephoned the IRS and spoke to an individual who advised her she only had to
declare business income that had been reported to the IRS on Form 1099.
Appellant’s handwritten notes were admitted as evidence showing that checks from barrel
business customers Martek, Aramsco, Quaddrant Chemical Corporation, and Hawk Solutions were
deposited in a joint checking account in November 2009 before her husband’s death, and checks
from barrel business customers Royal Custom Products and Auto Wax Company were to be
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deposited in No\cnther 2009 atler her I shand’s death. Evidence at the hench trial demonstrated
that appellant made bank deposits in December 2009 for barrel business income from Auto Wax
Company. Royal ( ‘uswm Products, and Complete Supply Appellant testified that, with the
exception ol Royal Custom Products, she did not include that business income on the 2009 federal
income tax return, indeed, appellant testified that the majority of the receipts 1mm barrel business
customers was not included on the 2009 federal meome tax return.
Through depositions upon written questions, appellees obtained copies of checks written by
certain customers to decedent’s barrel business. An attorney representing appellees testified
regarding a spreadsheet showing payments to the barrel business in the years 2008, 2009, and 2010.
That spreadsheet shows that in 2009. the barrel business received 536,991.50 from Auto Wax
Company. $23,581.00 from Royal Custom Products, $2,898.0() from Sovereign Industries, Inc.,
$24,009.00 from Quadrant Chemical Corp.. $2,970.00 from Service Sales Company, $4,536.00 from
Dal-Den Corporation. $2,645.0() from Orison Marketing, LLC, and S 1.429 .50 from Hawk Solutions.
The spreadsheet indicates the barrel business received over $90,000 in income from these customers
in 2009, while 520,336 was declared as business income on the 2009 federal tax return prepared and
signed by appellant.
Evidence at the bench trial supported the probate court’s finding that the 2009 tax return filed
with the IRS on behalf of decedent failed to account for all income received by the barrel business.
Further, the evidence supported the probate court’s finding that appellant disregarded the proper
accounting for the barrel business income and that appellant’s actions exposed decedent’s estate to
potential federal tax liability.
9 We conclude the evidence before the probate court was legally
The successor administrator appointed by the probate court upon appellant’s removal filed the “Final Account on Behalf
of the Former
Administrator,” in which he advised he seeks:
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“iiI licient to suppoti these tindinrs.
The only evidence appellant raises contrary to the probate court’s findings is appellant’s
testimony that she spoke with an individual at the IRS who told her the only business income the
barrel business had to declare was what was reported to the IRS on 1099 forms After reviewing, the
entire record, we conclude the probate court’s findings that appellant failed to account for checks
received by the barrel business on the 2009 tax return filed with the IRS on behalf ot decedent.
appellant disregarded the proper accounting for the barrel business income, and appellants actions
expose decedent s estate to potential federal tax liability are not so against the great weight and
preponderance of the evidence as to be manifestly unjust. See Cain, 709 S.W.2d at 176. Therefore,
we conclude the evidence was factually sufficient to support these findings by the pi-obate court.
The record contains legally and factually sufficient evidence to support the removal of
appellant as administrator of decedent’s estate.’° Accordingly, we discern no abuse of discretion in
the probate court’s removal of appellant as estate administrator. We resolve appellant’s second issue
against her.
Conclusion
We reverse the probate court’s order granting appellees a trial amendment and awarding
appellees attorney’s fees, and we render judgment that appellees take nothing on their claim for
recovery of all taxes, tax deficiencies. penalties, late charges, and other sums which may be assessed by the
IRS against
Decedent or his estate caused by the failure of Former Administrator to report all Decedent’s income on the 20)9 Tax Return
and on any prior tax retums Former Administrator prepared and tiled for Decedent during the years of their marriage:
(hi
payment for the les incurred to retain a (‘ertified Public Accountant selected by Successor Administrator v. ith Court
authoriiation or the purpose of amending the 2009 Tax Return and any other tax returns for prior years. (c) the complete
cooperation of Former Administrator in working with said Certified Public Accountant to be certain that Decedent
and his
estate are in compliance with all Federal tax laws; and (d) evidence that the 5384.00 in taxes owed was paid.
0
Because we conclude the probate court was within its discretion in rernoxing appellant as estate administrator for underreportin
g barrel
business income on the 2009 federal income tax return appellant prepared and suhnittted to the IRS on behalf of decedent,
disregarding the proper
accounting for the barrel business income, and exposing decedent’s estate to potential federal tax liability, we need not address
appellant’s remaining
uLuments irgatdtnc thc lr,al and factual sulitcisney of thc cxidcncc supportrn thc probate vourt S ofhvr stited frrtdtn,s
rr.ardin tppellant
removal as administrator of the estate.
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attorney’s fees. We affirm the probate court’s order removing appellant as administrator of the
estate of Prentiss Kirkland.
ROBERT M. FILLMORE
JUSTICE
1107 1ZF.PO5
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(uurt 01 A,i,icjt
2FiftI! Oitrirt of cxa at ia11zu
JUDGMENT
GAYLIA E. KIRKLAND, Appellant Appeal from the Probate Court No. I of
Dallas County, Texas, (Tr,CLN0. PR-lU-
No, 05-11-0071 2-CV 03 167-1).
Opinion delivered by Justice Fillmore.
JODIE RAY SCIIAFF, JAY REED Justices Moseley and Myers participating.
KIRKLAND, AND BILLIE JEAN
(KIRKLAND) VERMANDEL, Appellees
In accordance with this Court’s opimon of this date, the order of the probate court granting
appellees a trial amendment and awarding appellees attorney’s fees is REVERSED, and judgment
is RENDERED that appellees take nothing on their claim for attorneys fees. The probate court’s
order removing appellant as administrator of the estate of Prentiss Kirkland is AFFIRMED. It is
OR1)ERED that each party bear its own costs of this appeal.
Judgment entered January 28. 2013.
1
ROBERT M. FILLMORE
JUSTICE