in the Matter of the Estate of Guillermo G. "Willie" Morales ( 2010 )

i i i i i i
MEMORANDUM OPINION
No. 04-08-00599-CV
IN THE MATTER OF THE ESTATE OF Guillermo G. “Willie” MORALES, Deceased
From the Probate Court No. 1, Bexar County, Texas
Trial Court No. 1998-PC-1897
Honorable Polly Jackson Spencer, Judge Presiding
Opinion by: Steven C. Hilbig, Justice
Sitting: Rebecca Simmons, Justice
Steven C. Hilbig, Justice
Marilyn Barnard, Justice
Delivered and Filed: February 10, 2010
AFFIRMED
William F. Morales (“Bill”), the independent executor of the Estate of Guillermo G. “Willie”
Morales, appeals an order denying him full reimbursement of expenses he claims were incurred on
behalf of the estate. We affirm the trial court’s order.
BACKGROUND
Bill Morales was named in his father’s will as the independent executor of the estate. Two
of Bill’s three siblings1 objected to his appointment and litigation ensued over his capacity to serve
as the independent executor. After several months, the siblings agreed to Bill’s appointment subject
1
… The decedent had three other children, Mary Grace, Frank and Helen. Mary Grace and Frank objected to
Bill’s appointment.
04-08-00599-CV
to the restrictions set out in a rule 11 agreement. Bill was given the authority to act as independent
executor of the estate, but was not allowed to take action without the advice of legal counsel. The
agreement provided that any action taken without legal representation “is null and void and of no
effect.”
Over the course of the estate’s administration, many disagreements arose between Bill and
his sister Mary Grace. One major disagreement involved the estate’s primary asset, a 15-acre tract
of land. The property had been used as a salvage yard by a lessee who failed to register the yard with
Texas Commission on Environmental Quality (“T.C.E.Q.”). Because of environmental problems
on the property, the estate was required to clean up the property before it could be sold, and there
was disagreement regarding the proper way to accomplish the clean up. There were also
disagreements over the proposed sale of the property. The rancor between Bill and Mary Grace
resulted in substantial legal work and numerous contested hearings.
In February of 2008, after the property was sold and all the litigation was resolved, Bill
sought reimbursement for expenses and payment of attorney’s fees. The request for reimbursement
included: $62,522.00 in attorney’s fees for William Egger; $2,704.00 in court reporter’s fees;
$1,000.00 in mileage expenses; $10,450.00 in compensation to Bill for time away from work; and
$1,549.00 in miscellaneous costs. Bill also requested approval of payment to Mary Roberts for
$8,621.09 in attorney’s fees. Mary Grace objected to the estate reimbursing Bill for all of these
expenses. At the hearing on the motion for reimbursement, Bill testified briefly and the court took
judicial notice of the hearings and orders in the case. The parties then agreed to have the court
review the documentary evidence submitted by Bill and Mary Grace to determine the reimbursement
-2-
04-08-00599-CV
issue. The evidence included Egger’s and Roberts’s fee statements, cancelled checks, deposit slips,
and estate records.
After reviewing the evidence the court found “approximately 81.1 hours of Attorney Egger’s
time was spent in the review and preparation of documents pertaining to the environmental clean-up
of the [ ] 15 acre tract of land which provided a benefit to the estate” and were recoverable “as an
appropriate estate expense.” As to Egger’s remaining fees, the trial court found “it is not possible
to determine which of Attorney Egger’s billed expenses relate to appropriate estate activities” and
should be denied.2 Additionally, the court found the rule 11 agreement limited the executor’s
attorney’s hourly rate to $100.00; therefore, Egger’s fees would be reimbursed in the amount of
$8,110.00. The trial court denied Bill’s request for reimbursement of $1,400.00 for court reporter
fees, finding the fees were previously paid from estate funds. The remaining $1,304.00 in court
reporter fees were denied because they were not supported by receipts.3 Bill was reimbursed
$1,000.00 for mileage, $1,500.00 for a cash advancement to the estate and $49.00 for miscellaneous
expenses.
Bill filed a motion for partial new trial and rehearing and a request for findings of fact and
conclusions of law. After the trial court denied the motion for new trial and rehearing, Bill filed a
notice of limited appeal, complaining of the trial court’s partial reimbursement of his attorney’s fees
and expenses. After the appeal was filed, the trial court made findings of fact and conclusions of
law.
2
… Payment was allowed for Roberts’s fees. No party sought review of that award.
3
… Bill does not complain about the denial of his claim for these fees.
-3-
04-08-00599-CV
Bill claims the trial court abused its discretion in denying his motion for new trial and
rehearing. Bill raises legal sufficiency challenges, claiming the evidence conclusively establishes
his entitlement to all of his attorney’s fees and court reporter expenses. He also contends the trial
court’s fact findings regarding attorney’s and court reporter’s fees are against the great weight and
preponderance of the evidence — a challenge to the factual sufficiency of the evidence.
Additionally, Bill argues the rule 11 agreement applied only to the attorney’s fees of his former
counsel at Lane, Cannon & Taliaferro, L.L.P.; therefore, the trial court improperly limited his
attorney’s fee recovery to $100.00 an hour.
STANDARD OF REVIEW
In an appeal from a bench trial, the trial court’s findings of fact have the same force and
dignity as a jury’s verdict and are reviewable for legal and factual sufficiency under the same
standards as are applied to the review of a jury verdict. Anderson v. City of Seven Points, 806
S.W.2d 791, 794 (Tex. 1991). To determine whether there is legally sufficient evidence to support
a finding, we view the evidence in a light most favorable to the finding and indulge every reasonable
inference to support it. City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005). We credit
favorable evidence if a reasonable fact-finder could, and disregard contrary evidence unless a
reasonable fact-finder could not. Id. at 827. If there is more than a scintilla of evidence to support
the finding, the legal sufficiency challenge fails. Formosa Plastics Corp. USA v. Presidio Eng’rs
& Contractors, Inc., 960 S.W.2d 41, 48 (Tex. 1998). More than a scintilla of evidence exists “if the
evidence ‘rises to a level that would enable reasonable and fair-minded people to differ in their
conclusions.’” Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 601 (Tex. 2004)(quoting Merril Dow
Pharm., Inc. v. Havner, 953 S.W.2d 706 (Tex. 1997)).
-4-
04-08-00599-CV
When a party attacks the factual sufficiency of an adverse finding on an issue on which he
had the burden of proof, he must demonstrate on appeal that the adverse finding is against the great
weight and preponderance of the evidence. Dow Chem. Co. v. Francis, 46 S.W.3d 237, 242 (Tex.
2001). We consider all the evidence and set aside the judgment only if it is so contrary to the
overwhelming weight of the evidence that it is clearly wrong and unjust. Cain v. Bain, 709 S.W.2d
175, 176 (Tex. 1986). Under either standard of review, the trier of fact is the sole judge of the
credibility of the witnesses and the weight to be given their testimony. McGalliard v. Kuhlmann,
722 S.W.2d 694, 696 (Tex. 1986); Raymond v. Rahme, 78 S.W.3d 552, 556 (Tex. App.—Austin
2002, no pet.).
We review the trial court’s conclusions of law de novo. BMC Software Belgium, N.V. v.
Marchand, 83 S.W.3d 789, 794 (Tex. 2002). Although appellants may not challenge a trial court’s
conclusions of law for factual sufficiency, we may review the trial court’s legal conclusions drawn
from the facts to determine whether the conclusions are correct. Id.
DISCUSSION
A personal representative of an estate is entitled to all reasonable expenses upon satisfactory
proof to the court the expenses were necessarily incurred in connection with the proceedings and
management of an estate. TEX . PROB. CODE ANN . § 242 (Vernon 2003). To be reimbursable, the
expenses must be incurred in connection with preserving, safekeeping, managing and distributing
the estate of the decedent. Id.; Park v. Hominick, 522 S.W.2d 533, 537 (Tex. Civ. App.—Corpus
Christi 1974, no writ). Legitimate expenses for the estate’s administration include money paid from
the representative’s own funds, provided the expenses were reasonable and incurred for the benefit
of the estate. Park, 522 S.W.2d at 537.
-5-
04-08-00599-CV
The award of attorney’s fees is grounded in two fact findings and one legal conclusion made
by the trial court. First, the trial court found Egger spent 81.1 hours on matters that benefitted the
estate and were recoverable. Second, the trial court found that it was not possible to determine
which of Egger’s other fees related to services that benefitted the estate. Third, the trial court
interpreted the rule 11 agreement and concluded reimbursable attorney’s fees were limited to
$100.00 an hour.
Bill agreed to have the trial court determine his reimbursement request based on the fee
statements attached to his motion for reimbursement and did not have Egger testify at the hearing
on the motion for reimbursement. Egger’s fee statements contain time entries in excess of 400
hours. The statements include numerous block time billing entries that do not contain sufficient
information to determine the amount of time spent on each activity listed or how the activities
benefitted the estate. The time entries simply do not adequately identify which matters relate to work
performed for the preservation, safekeeping, or management of the estate and what attorney time was
spent representing Bill individually.
The relevant inquiry is whether Bill demonstrated the fees were incurred in the preservation,
safekeeping, and management of the estate. See id. The trial court presided over every hearing in
this case and took judicial notice of the proceedings and orders entered. The trial court is aware of
the issues in the case, the disagreements between Bill and Mary Grace, the subject matter of the
hearings, and the legal work that correlated to legal services for Bill’s individual benefit and that
done for the benefit of the estate. To prevail on his legal sufficiency challenge, Bill must
demonstrate the evidence conclusively established the opposite of the trial court’s finding — all of
Egger’s time was for the benefit of the estate. See Ridgway, 135 S.W.3d at 601. The record does
-6-
04-08-00599-CV
not support such a conclusion. Nor is the court’s fact finding against the overwhelming weight of
the evidence. Bill failed to meet his burden of proof that the fees were incurred in connection with
preserving, safekeeping, managing and distributing his father’s estate.
Bill also contends the trial court erred in concluding the rule 11 agreement limited his
reimbursement for Egger’s attorney’s fees to $100.00 an hour. Bill does not argue the contract is
ambiguous; rather, he argues the only reasonable interpretation of the agreement is the $100.00
limitation applies only to the law firm of Lane, Gannon, and Taliaferro L.L.P. In a dispute over the
meaning of a contract, our primary concern is the true intent of the parties to the contract. See Perry
Homes v. Cull, 258 S.W.3d 580, 606 (Tex. 2008). To ascertain intent, we look first to the language
used in the instrument. Id. Contract language that can be given a definite or certain meaning is
considered unambiguous and should be construed by the court as a matter of law. Universal Health
Servs., Inc. v. Renaissance Women’s Group, P.A., 121 S.W.3d 742, 746 (Tex. 2003). However, if
the language used in the contract is capable of more than one reasonable interpretation, an ambiguity
exists and a fact issue is raised as to the parties’ intent. Columbia Gas Transmission Corp. v. New
Ulm Gas, Ltd., 940 S.W.2d 587, 589 (Tex. 1996). An ambiguity does not exist simply because the
parties differ in their interpretations of the contract language. In re D. Wilson Constr. Co., 196
S.W.3d 774, 781 (Tex. 2006).
Bill relies on two paragraphs in the rule 11 agreement to support his argument that the
$100.00 fee limitation applies only to Lane, Gannon & Taliaferro, L.L.P. The first paragraph
provides:
All attorney’s fees incurred up to and including the date that Applicant is appointed
as Independent Executor will be paid to Lane, Gannon & Taliaferro, L.L.P. within
thirty (30) days of Applicant’s appointment as Independent Executor. Those
attorney’s fees throughout the remainder of the administration of the Estate will be
-7-
04-08-00599-CV
billed at an hourly rate of One Hundred Dollars ($100.00) per hour and will be paid
from Estate funds . . . . Lane, Gannon & Taliaferro, L.L.P. will provide time sheets
for all attorney fees relating to the probating of the Estate incurred from the date of
Applicant’s appointment as Independent Executor until the Estate is closed.
The second paragraph at issue provides that Bill “agrees to continue retaining the Lane, Gannon
& Taliaferro”, but “if for any reason this Law firm is to cease representing” Bill, then any actions
taken without advice of counsel will be null and void. While this provision clearly demonstrates the
parties contemplated the possibility of representation by a different firm, it does not alter the
agreement’s limit of $100.00 per hour for the executor’s attorney’s fees. Bill agreed to this
stipulation in order to be appointed as independent executor. The trial court’s interpretation is
reasonable and the reimbursement for attorney’s fees is limited to $100.00 an hour.4
Finally, Bill complains the trial court erred in finding “$1,400.00 of the requested Court
Reporter’s fees had been paid from estate funds previously and therefore, the request for
reimbursement should be denied.” The question is whether there is legally and factually sufficient
evidence to support the court’s finding of fact.
An entry on an accounting sheet submitted as evidence notes a payment to the court reporter,
Cheryl Hester, from the estate’s account in the amount of $1,400.00. However, Bill testified he paid
Hester a total of $2,704.00, which included the $1,400.00 for a transcript, from his personal funds.
Bill produced a receipt for the $1,400.00 payment, but the receipt does not identify the source of the
payment. Bill relies on the following notation in Egger’s billing statement to support his
reimbursement claim: “telephone conference with Mr. Morales, advising him of the cost for the
4
… Bill contends the trial court’s award of fees to Mary Roberts, Bill’s counsel at the last hearing, was not
limited to $100.00 an hour; therefore, the contract did not limit attorney’s fees to $100.00 an hour for subsequent
attorneys. No findings of fact or conclusions of law were requested or made as to Robert’s award and no one complains
on appeal of the award.
-8-
04-08-00599-CV
transcripts of the six (6) hearings, which he will personally go and pay Ms. Hester at the court
house.” Bill also relies on a letter from Hester thanking him for payment and referring to “your
check number 0162.” These documents do not indicate the bank account from which Hester was
paid. The accounting sheet reflects the $1,400.00 payment to Hester was paid from the estate’s
account. This is legally sufficient evidence to support the trial court’s finding.
In evaluating the factual sufficiency of the evidence, we should not intrude upon the fact
finder’s role as the sole judge of the weight and credibility given to any witness’s testimony. See
Transmission Exch. v. Long, 821 S.W.2d 265, 271 (Tex. App.—Houston [1st Dist.] 1991, writ
denied). It is within the province of the fact finder to determine what weight to give contradictory
evidence. Id. The fact finder is entitled to judge the credibility of the witnesses and may choose to
believe all, some, or none of the testimony presented. Miller v. Kendall, 804 S.W.2d 933, 939 (Tex.
App.—Houston [1st Dist.] 1990, no writ). Giving deference to the trial court as the fact finder, we
hold that the finding made by the trial court was not so contrary to the overwhelming weight of the
evidence as to be clearly wrong and manifestly unjust. There is legally and factually sufficient
evidence to support the trial court’s finding that Hester’s fees were previously paid with estate funds.
The order for reimbursement of expenses and payment of attorney’s fees is affirmed.
Steven C. Hilbig, Justice
-9-