Susan Jackson Holden and Terry Holden v. Charles Lyle Holden, as the Independent of the Estate of Rosie Eunice Holden , 456 S.W.3d 642 ( 2015 )

NO. 12-13-00165-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
SUSAN JACKSON HOLDEN AND § APPEAL FROM THE 354TH
TERRY HOLDEN,
APPELLANTS
V.
§ JUDICIAL DISTRICT COURT
CHARLES LYLE HOLDEN, AS THE
INDEPENDENT EXECUTOR OF THE
ESTATE OF ROSIE EUNICE
HOLDEN, DECEASED,
APPELLEE § RAINS COUNTY, TEXAS
OPINION
Susan Jackson Holden and Terry Holden appeal the trial court’s judgment in favor of
Charles Lyle Holden, Independent Executor of the Estate of Rosie Eunice Holden, deceased. They
raise seven issues on appeal. We affirm in part, and reverse and render in part.
BACKGROUND
Charles was married to Rosie. Terry is Charles’s son from a previous marriage, and Susan
is Terry’s wife. Charles had a hip replacement in the fall of 2008, and Rosie had a variety of
illnesses. In May 2009, Rosie was diagnosed with amyotrophic lateral sclerosis (ALS, also known
as Lou Gehrig’s Disease). Susan went to Rosie and Charles’s home four to five times a week to
provide care for Rosie. On the days that Susan was unable to take care of Rosie, Charles or a
hospice organization provided care for her. Between May and November of 2009, Susan was
Rosie’s primary caregiver.1
1
Charles claimed that he provided continual care for Rosie throughout this period, and that hospice played a
minimal role in providing services to Rosie.
On July 13, 2009, Rosie executed an assignment of an oil and gas royalty interest to Terry.
Susan obtained an assignment form, completed it, and presented it to Rosie. Susan and Terry paid
nothing for the assignment, and Susan claimed that it was a gift.2 On July 17, 2009, Rosie signed a
medical power of attorney giving Susan the right to make all of Rosie’s healthcare decisions. On
August 5, 2009, Rosie executed a statutory durable power of attorney appointing Susan as her
agent. That same day, Rosie also executed a revocation of all prior powers of attorney. Susan did
not disclose any of these transactions to Charles. She believed that it was not appropriate to
disclose the power of attorney because it would have started a family fight.
On August 10, 2009, Susan and Terry had an altercation with Charles concerning the care
Susan provided Rosie, specifically that Susan had used too many of Rosie’s colostomy bags.
During the argument, Charles punched Terry in the face. On August 11, 2009, Susan and Terry
went to Rosie and Charles’s home to move Rosie to their home.3 Prior to their arrival, Susan and
Terry made an agreement and established a plan to remove Rosie from her home. Terry recorded
the statutory durable power of attorney at the courthouse because he and Susan were concerned
that Charles might not let them in the house. When Susan and Terry arrived, they told Charles for
the first time that they were moving Rosie to their home, and revealed that Susan had obtained the
power of attorney.4 Rosie stated that she did not want to leave her home, but Susan told her she
had to go with them.
On August 13, 2009, Susan opened a joint bank account with Rosie at Bank of America,
using funds from a joint account held by Rosie and Charles. Susan stated that some of the money
in the new account was used to pay Rosie’s expenses for clothing, bedding, food, and related
items. But she also stated that she and Terry used some of the money to pay for ―household
expenses to keep us going while we were taking care of her.‖
While Rosie stayed with Susan and Terry, Charles told Susan that he wanted to take Rosie
home because she wanted to return home with him.5 According to Charles, Susan refused, saying,
―She’s not going anywhere; I’ve got a power of attorney.‖ Susan acknowledged that Rosie also
2
According to Terry, he was unaware of the assignment until later.
3
Charles believed that Susan and Terry moved Rosie to their home in July 2009.
4
Representatives of Adult Protective Services were present during the relocation process, but the precise
purpose of their visit is unclear in the record.
5
Charles frequently visited Rosie while she lived with Susan and Terry.
2
mentioned to her that she wanted to return home. According to Susan, hospice and Adult
Protective Services would not let Rosie return home.
Rosie’s condition deteriorated and she died on November 8, 2009. Charles was appointed
the independent executor of Rosie’s estate. On September 15, 2010, Charles made a demand that
Susan provide an accounting under Texas Estates Code Sections 751.101 through 751.106. 6 Susan
did not respond to the demand, and Charles filed suit as the independent executor of Rosie’s estate.
In his petition, Charles sought to compel the accounting, to require Susan to return the funds that
she obtained from Rosie, to rescind the royalty assignment, and to recover his attorney’s fees.
During the bench trial, Susan admitted that she had not provided Charles with an
accounting. After the parties rested, closed, and made final arguments, the trial court ordered that
Susan provide the accounting within fourteen days.7 The trial court also stated as follows:
What the Court’s going to do -- first of all, the Court wants compliance with 489B [now Texas
Estates Code Sections 171.101-.106] in an account -- sworn accounting form that’s required under
the probate code. The accounts may be the raw data for it, but let’s get it in a proper format that’s
sworn to and everything. And when that’s done, the Court wants to see that; and I’m going to take
the rest of the matter under advisement until I see it.
....
I want an accounting that complies with 489B; and once I see that, I’ll rule on your other issues.
Pursuant to the court’s order, Susan timely provided the accounting after the trial. The
documents included bank account summaries and transaction information. Charles filed a
response and written objections to the accounting. Susan and Terry filed no further response and
did not ask for a hearing on the accounting. Based on the information before it, the trial court
rendered judgment against Susan and Terry awarding $25,587.73 in damages to Charles in his
representative capacity, along with $5,000.00 in attorney’s fees. At Susan and Terry’s request, the
trial court issued findings of fact and conclusions of law. This appeal followed.
6
The demand was actually made under Section 489B of the Texas Probate Code, which has since been
recodified in virtually identical language in the Texas Estates Code. See Act of June 15, 2001, 77th Leg., R.S., ch.
1056, § 1, 2001 Tex. Gen. Laws, 2336, 2336-37, repealed by Act of June 17 2011, 82nd Leg., R.S., ch. 823, § 1.01,
2011 Vernon’s Sess. Law Serv. 1901, 1905 (current version at TEX. ESTATES CODE ANN. §§ 751.101-.106 (West
2014).
7
There is no doubt that this was a full trial. At its conclusion, Charles argued for the relief he requested in
the petition on each cause of action alleged, while Susan and Terry argued that the trial court should render a take
nothing judgment against Charles.
3
DOCUMENTS NOT ADMITTED INTO EVIDENCE
In their second issue, Susan and Terry argue that the trial court erroneously considered the
accounting and other financial documents, because they were not formally admitted into evidence.
Standard of Review and Applicable Law
―When it clearly appears to be necessary to the due administration of justice, the court may
permit additional evidence to be offered at any time; provided that in a jury case no evidence on a
controversial matter shall be received after the verdict of the jury.‖ TEX. R. CIV. P. 270. A trial
court’s decision to reopen the evidence will be disturbed on appeal only in those cases where it is
shown that there has been a clear abuse of discretion. Forrest v. Hanson, 424 S.W.2d 899, 907
(Tex. 1968). The trial court’s discretion is to be liberally exercised in the interest of justice so that
all parties can fully develop their case. Lifestyle Mobile Homes v. Ricks, 653 S.W.2d 602, 604
(Tex. App.—Beaumont 1983, writ ref’d n.r.e.). An appellate court reviews the trial court’s
decisions based on the evidence in the record before the trial court at the time it acted. Lifeguard
Benefit Servs., Inc. v. Direct Med. Network Solutions, Inc., 308 S.W.3d 102, 117 (Tex. App.—
Fort Worth 2010, no pet.).
To present a complaint for appellate review, the record must show that (1) the complaint
was presented to the trial court by a timely request, objection, or motion stating the specific
grounds for the desired ruling if the specific grounds are not apparent from the context; and (2) the
trial court ruled on the request. TEX. R. APP. P. 33.1(a). To preserve a complaint of error in a
judgment, a party must inform the trial court of its objection by a motion to amend or correct the
judgment, a motion for new trial, or some other similar method. Dal-Chrome Co. v. Brenntag
Sw., Inc., 183 S.W.3d 133, 144 (Tex. App.—Dallas 2006, no pet.). Moreover, a motion for new
trial is a prerequisite to a complaint on appeal on which evidence must be heard. TEX. R. CIV. P.
324(b)(1).
Discussion
On September 17, 2012, the day of the trial, Susan and Terry provided Charles with
information from one of Susan and Terry’s joint accounts, a Compass Bank account. Two checks
from that account were admitted into evidence, one to reimburse Charles for Rosie’s cremation,
and one to Charles for a royalty check received by Susan and Terry pursuant to the royalty
assignment. Three days after the trial, and in compliance with the court’s order, they provided the
accounting. Susan and Terry contend that the trial court erroneously relied on the accounting and
bank documents because they were received by the court after the close of evidence, are outside
4
the record, and ―no testimony was taken in regards to these documents, how the money was spent,
who spent such money or what was the intent of the parties.‖ Without the evidence, their
argument continues, there is insufficient evidence to support the trial court’s award of $25,587.73.
Charles filed a response to the accounting on September 25, 2012, and a brief in support of
his request for judgment on October 16, 2012. To this response, Charles attached a copy of the
Compass Bank information Susan and Terry produced at trial. The trial court sent a letter
informing the parties of its rulings on January 22, 2013, and signed a formal judgment on
February 22, 2013. Susan and Terry filed a request for findings of fact and conclusions of law on
March 13, 2013. The trial court signed the findings and conclusions eight days later.
At no time during this period did Susan and Terry file a reply to Charles’s response, ask for
a hearing, or otherwise challenge Charles’s response to the accounting, or his inclusion of the
Compass Bank documents. Even after learning of the judgment, Susan and Terry did not file a
motion for new trial or otherwise make the trial court aware of their complaints concerning its
consideration of this evidence. It is clear from the findings of fact and conclusions of law that the
trial court considered the accounting, the supporting documentation, and the Compass Bank
documents. The trial court informed the parties prior to the order for an accounting that it would
rule on all other issues after it received and reviewed the accounting. Therefore, Susan and Terry
were not surprised by the court’s consideration of the evidence.
With regard to Susan and Terry’s contention that the trial court should have allowed them
to submit evidence to further explain the transactions, a motion for new trial is a prerequisite to
appeal for complaints on which evidence must be heard. See TEX. R. CIV. P. 324(b)(1); TEX. R.
APP. P. 33.1(a); Dal-Chrome Co., 183 S.W.3d at 144 (party must inform trial court of complaint of
error in judgment by motion for new trial or similar method). Susan and Terry filed no motion for
new trial or otherwise notified the court of their complaint.8
Finally, although the proceedings transpired in an unusual fashion, the trial court could
have considered the evidence under Texas Rule of Civil Procedure 270. Susan and Terry note that
Charles did not move to reopen the evidence after the hearing. However, Rule 270 states that the
trial court may consider new evidence at any time if necessary in the interest of justice in a bench
8
Because Susan and Terry raise it as part of this issue, we address their contention here that the trial court
should have allowed them to present evidence on the accounting. Later in this opinion, we separately address their
issue concerning the sufficiency of the evidence supporting the trial court’s award of $25,587.73 based on the
evidence before it (i.e. the testimony and other evidence admitted at trial, along with the accounting and supporting
documentation produced after trial).
5
trial. See TEX. R. CIV. P. 270. The language of the rule does not require a motion by a party, nor
have we discovered authority preventing a trial court from reopening the evidence sua sponte.
Rather, the courts addressing this issue have held that the trial court may reopen the evidence on its
own motion. See, e.g., Matter of J.A.W., 976 S.W.2d 260, 263-64 (Tex. App.—San Antonio
1998, no pet.) (holding trial court could reopen evidence sua sponte under Rule 270 to consider
detention report after evidence closed in juvenile justice proceeding). We agree with the reasoning
in those cases. In any event, by failing to make the trial court aware of their complaint, Susan and
Terry have waived their challenge to the trial court’s consideration of the evidence. See In re
K.E., No. 07-13-00082-CV, 2013 WL 4733999, at *2-3 (Tex. App.—Amarillo Aug. 30, 2013, no
pet.) (mem. op.) (holding appellant failed to preserve issue that trial court sua sponte considered
evidence it received posttrial after parties rested and closed evidence when she raised issue for first
time on appeal).
Susan and Terry’s second issue is overruled.
PLEADING ISSUES
In their first issue, Susan and Terry contend that Charles pleaded for an order seeking an
accounting, rescission of the royalty assignment, and attorney’s fees. They argue that he did not
plead for monetary relief, and without a pleading to support the award, the trial court erred when it
awarded $25,587.73 in damages. In their fifth issue, Susan and Terry argue that Charles did not
plead a breach of fiduciary duty claim, and consequently, the trial court erred in concluding that
Susan breached her fiduciary duty. Because these issues concern the adequacy of Charles’s
pleadings, we address them together.
Standard of Review and Applicable Law
A court’s jurisdiction to render judgment is invoked by the pleadings, and a judgment
unsupported by the pleadings is void. In re S.A.A., 279 S.W.3d 853, 856 (Tex. App.—Dallas
2009, no pet.). Therefore, a trial court’s judgment must conform to the pleadings. TEX. R. CIV. P.
301. A plaintiff may not be granted a favorable judgment on an unpleaded cause of action, absent
trial by consent. Marrs & Smith P’ship v. D.K. Boyd Oil & Gas Co., 223 S.W.3d 1, 18 (Tex.
App.—El Paso 2005, pet. denied) (citing Oil Field Haulers Ass’n v. R.R. Comm’n, 381 S.W.2d
183, 191 (Tex. 1964)); see also Hartford Fire Ins. Co. v. C. Springs 300, Ltd., 287 S.W.3d 771,
779 (Tex. App.—Houston [1st Dist.] 2009, pet. denied) (―A trial court cannot enter judgment on a
theory of recovery not sufficiently set forth in the pleadings or otherwise tried by consent.‖);
6
Huddleston v. Pace, 790 S.W.2d 47, 50 (Tex. App.—San Antonio 1990, writ denied) (―A party
must recover on the right in which he sues and upon proof of the facts stated in his pleadings, and
he cannot recover through a right not asserted.‖).
A plaintiff’s petition must give adequate notice of the facts upon which the plaintiff bases
his cause of action. See Horizon/CMS Healthcare Corp. v. Auld, 34 S.W.3d 887, 897 (Tex.
2000). The purpose of this rule is to provide the defendant with sufficient information to prepare a
defense. Id. A reviewing court should liberally construe the plaintiff’s petition to assert any claim
that could reasonably be inferred from the specific language in the petition. Moneyhon v.
Moneyhon, 278 S.W.3d 874, 878 (Tex. App.—Houston [14th Dist.] 2009, no pet.). However, a
reviewing court cannot use a liberal construction of the petition as a license to read into the
petition a claim that it does not contain. Id.; see TEX. R. CIV. P. 47; Krull v. Somoza, 879 S.W.2d
320, 322 (Tex. App.—Houston [14th Dist.] 1994, writ denied).
An issue is tried by consent when both parties present evidence on an issue and the issue is
developed during trial without objection. Ingram v. Deere, 288 S.W.3d 886, 893 (Tex. 2009).
Trial by consent is a doctrine that is intended to cover only the exceptional case in which it clearly
appears from the record as a whole that the parties tried the unpleaded issue; it is not intended to
establish a general rule of practice and should be applied with care. Guillory v. Boykins, 442
S.W.3d 682, 690 (Tex. App.—Houston [1st Dist.] 2014, no pet.).
To determine whether an issue was tried by consent, we must review the record not for
evidence of the issue, but rather for evidence of trial of the issue. Hartford Fire Ins. Co., 287
S.W.3d at 780. A party’s unpleaded issue may be deemed tried by consent when evidence on the
issue is developed under circumstances indicating both parties understood the issue was in the
case, and the other party failed to make an appropriate complaint. Pine Trail Shores Owners’
Ass’n, Inc. v. Aiken, 160 S.W.3d 139, 146 (Tex. App.—Tyler 2005, no pet.); Johnson v.
Structured Asset Servs., LLC, 148 S.W.3d 711, 719 (Tex. App.—Dallas 2004, no pet.). However,
an issue is not tried by consent if the evidence relevant to that issue is also relevant to other issues
raised by the pleadings. See Sage St. Assocs. v. Northdale Constr. Co., 863 S.W.2d 438, 446
(Tex. 1993). A party who allows an issue to be tried by consent and who fails to raise the lack of a
pleading before submission of the case cannot later raise the pleading deficiency for the first time
on appeal. See Hartford Fire Ins. Co., 287 S.W.3d at 780. An issue may be tried by consent in a
bench trial. See Paint Rock Operating, LLC v. Chisholm Exploration, Inc., 339 S.W.3d 771,
774-75 (Tex App.—Eastland 2011, no pet.).
7
Discussion
Charles, in his petition, seeks to compel an accounting, rescind the royalty assignment
because of undue influence or fraud and conspiracy to commit undue influence, and recover
attorney’s fees for the accounting. Charles’s petition contained the following allegations
pertaining to the accounting:
Pursuant to Texas Probate Code § 489B(g) [now TEX. ESTATES CODE ANN. §§ 751.101-.106],
Plaintiff asks this Court to compel Defendant, Susan J. Holden, to promptly and fully answer the
demand for an accounting and to immediately surrender to Plaintiff all funds and other property
belonging to the Estate of Rosie Eunice Holden of which Defendant is aware or of which is in her
control or possession or of which she has previously taken possession or exercised control over.
In relevant part, the trial court made the following conclusions of law:
1. Under Texas Prob. Code Ann. § 489B(a), Susan owed Rosie a fiduciary duty as her agent under
the power of attorney.
2. Susan breached this fiduciary duty owed to Rosie because she failed to:
a. Timely inform the principal of all actions taken pursuant to the power of attorney;
b. Maintain records of all transactions on the agent;
c. Account to the principal; and
d. Not engage in self-dealing.
3. Susan & Terry took $25,587.73 from Rosie. This amount includes all monies they received
from Rosie.
4. Susan & Terry should reimburse Rosie’s estate the total amount of $25,587.73.
Charles’s petition contains no allegation that Susan or Terry misappropriated Rosie’s
funds, or otherwise engaged in self-dealing. Rather, in pertinent part, he asks for the accounting,
plus Rosie’s assets that remain in Susan’s possession or control or of which she has previously
taken possession or exercised control. The language of the accounting statute authorizes turnover
of the assets remaining in the control of the agent, but it does not address the return of assets that
have been spent on the agent’s personal expenses as a result of her self-dealing. See TEX. ESTATES
CODE ANN. § 751.105. To recover those funds, it is necessary to plead a claim for breach of
fiduciary duty, fraud, or other similar claim. See Moneyhon, 278 S.W.3d at 879 (breach of
fiduciary duty recoverable if pleaded or tried by consent); In re Estate of Miller, 446 S.W.3d 445,
453-56 (Tex. App.—Tyler 2014, no pet.) (describing legal standards for recovery of breach of
fiduciary duty to refrain from self-dealing in statutory durable power of attorney context).
Although Charles’s petition requests the return of all Rosie’s funds over which Susan has
ever taken possession or exercised control, there are no facts alleged or theories pleaded to support
the claim that Susan breached her fiduciary duty to refrain from self-dealing. In other words, the
pleading notifies Susan and Terry that they seek return of all of Rosie’s funds, but it does not put
8
them on notice of the basis of the claim. The only allegations in the petition related to any tort
claim pertain to the undue influence, fraud, and conspiracy claims seeking rescission of the royalty
assignment. There are no factual allegations in the petition that Susan disposed of Rosie’s funds
for Susan and Terry’s personal expenses.
Charles failed to plead a claim for breach of Susan’s fiduciary duty to refrain from self-
dealing, but the claim is treated as if he pleaded it when there is evidence of trial of the issue by
express or implied consent. See TEX. R. CIV. P. 67; Roark v. Stallworth Oil & Gas, Inc., 813
S.W.2d 492, 495 (Tex. 1991). Susan and Terry provided the accounting as they were ordered to
do, and the information contained in the accounting formed the basis of the breach of the fiduciary
duty claim. The information contained in the accounting was relevant only to that claim, and not
the undue influence claim. This is because the undue influence claim pertains only to the royalty
assignment, which Susan procured prior to executing the statutory durable power of attorney and
obtaining access to Rosie’s funds.
Furthermore, despite the peculiar procedural posture of this case, the circumstances
indicate that the parties were aware that Susan’s breach of fiduciary duty was an issue in the case.
Susan and Terry became aware that Susan’s disposition of Rosie’s funds for their personal
expenses was actually tried, although in an unusual fashion. Charles’s counsel mentioned in his
opening statement that ―a part of our cause of action is a petition to do this accounting so we can
make a determination if the money was used in the correct manner.‖ During the trial, albeit as a
result of the trial court’s questioning, Susan admitted using Rosie’s funds for personal expenses.
Specifically, the trial court and Susan had the following discussion:
THE COURT: All right. And how much money went into that account? Do you recall?
THE WITNESS: Approximately $10,300.
THE COURT: And what was it spent on?
THE WITNESS: It was spent on clothes for her. It was spent on bedding. It was spent on food.
She spent some of it herself. It was spent on household expenses to keep us going while we were
taking care of her.
Once it was admitted in closing argument that Susan failed to provide the accounting, the
trial court indicated that it would ―rule on [their] other issues‖ after the accounting was completed.
Susan and Terry did not object to the trial court’s consideration of the accounting as evidence. At
that point in the proceedings, relevant evidence had been admitted on the claim. Susan and Terry
9
should have known then that the fiduciary duty issue was before the court. Even if they did not,
they became aware of it after completing the accounting and filing it with the court. Charles filed
objections to the accounting and pointed out that a significant portion of Rosie’s funds were used
for Susan and Terry’s personal expenses. Also, Charles filed a motion to enter judgment and a
supporting brief, specifically analyzing the financial documents in the accounting, which showed
that Susan and Terry used the funds improperly.
Moreover, it was clear that the trial court would rely on this documentary evidence in
rendering its judgment when it indicated it would rule on the remaining issues after receiving the
accounting. The trial court also indicated its reliance on this evidence in its judgment and its
findings of fact and conclusions of law, which Susan and Terry requested, when it found that
Susan breached her fiduciary duty to refrain from self-dealing. Yet, Susan and Terry remained
silent, despite Charles’s objections to the accounting, his motion to enter judgment, the trial court’s
judgment, and its findings of fact and conclusions of law. They filed no motion for new trial or
other complaint that Charles failed to plead the claim, although they knew that the trial court relied
on this evidence. Cf. Cont’l Homes of Texas, L.P. v. City of San Antonio, 275 S.W.3d 9, 16-17
(Tex. App.—San Antonio 2008, pet. denied) (holding parties did not try by consent affirmative
defense raised for first time at posttrial hearing on motion to enter judgment, because after court
issued findings of fact and conclusions of law in which it became apparent trial court relied on
unpleaded defense, aggrieved party filed motion for new trial complaining of pleading defect).
We hold that the breach of fiduciary duty claim to recover monetary damages for Susan’s
self-dealing was tried by consent and that Susan and Terry’s complaint that the pleading is
defective was waived by failing to object to the trial of that issue until this appeal. See Hartford
Fire Ins. Co., 287 S.W.3d at 780; Johnson, 148 S.W.3d at 719 (holding issue tried by consent that
was addressed in posttrial briefs and ruled on by trial court).
Susan and Terry’s first and fifth issues are overruled.
DUE PROCESS
In their third issue, Susan and Terry contend that the trial court violated their due process
rights when it failed to provide them with the opportunity to provide testimony regarding the
accounting.
It is settled that constitutional issues, such as due process claims, must be properly raised in
the trial court or they are waived on appeal. Dreyer v. Greene, 871 S.W.2d 697, 698 (Tex. 1993).
10
Susan and Terry never raised the due process issue in the trial court and do so for the first time on
appeal. Consequently, they waived this issue.
Susan and Terry’s third issue is overruled.
SUFFICIENCY OF THE EVIDENCE
In their fourth issue, Susan and Terry argue that the evidence is insufficient to support the
trial court’s order that they return $25,587.73 to Charles as executor of Rosie’s estate.9 Also as
part of their fourth issue, Susan and Terry implicitly argue that there is no basis to award joint and
several liability against them. In Susan and Terry’s sixth issue, they argue that the trial court erred
in rescinding the royalty assignment because Charles failed to present sufficient evidence that they
procured the assignment by undue influence. In their seventh issue, Susan and Terry contend that
the trial court erred in rescinding the assignment because Charles failed to present sufficient
evidence that they conspired to force Rosie to execute the assignment.
Standard of Review
When, as in this case, specific findings of fact and conclusions of law are filed and a
reporter’s record is before the appellate court, the findings will be sustained if there is evidence to
support them, and the appellate court will review the legal conclusions drawn from the facts found
to determine their correctness. Rus–Ann Dev., Inc. v. ECGC, Inc., 222 S.W.3d 921, 925 (Tex.
App.—Tyler 2007, no pet.). Findings of fact in a case tried to the court have the same force and
dignity as a jury’s verdict upon questions. Anderson v. City of Seven Points, 806 S.W.2d 791,
794 (Tex. 1991). The trial court’s findings of fact are reviewable for legal and factual sufficiency
of the evidence to support them by the same standards that are applied in reviewing evidence
supporting a jury’s answer. Main Place Custom Homes, Inc. v. Honaker, 192 S.W.3d 604, 614
(Tex. App.—Fort Worth 2006, pet. denied).
We review a trial court’s conclusions of law de novo. State v. Heal, 917 S.W.2d 6, 9 (Tex.
1996); Potcinske v. McDonald Prop. Inv., Ltd., 245 S.W.3d 526, 529 (Tex. App.—Houston [1st
Dist.] 2007, no pet.). When performing a de novo review, we exercise our own judgment and
redetermine each legal issue. Sembera v. Petrofac Tyler, Inc., 253 S.W.3d 815, 822 (Tex. App.—
9
In their brief, Susan and Terry’s fourth issue presumes that the accounting and supporting financial
documents are not proper evidence. Thus, their argument continues, the evidence is insufficient to support the
monetary award of $25,587.73. In their reply brief, they challenge the amounts awarded as a whole, but do not
attempt to argue that individual withdrawals from the accounts were properly spent for Rosie’s benefit.
11
Tyl. 2008, pet. denied). To make this determination, we consider whether the conclusions are
correct based on the facts from which they are drawn. Potcinske, 245 S.W.3d at 529.
A party who challenges the legal sufficiency of the evidence to support an issue upon
which it did not have the burden of proof at trial must demonstrate on appeal that there is no
evidence to support the adverse finding. Bright v. Addison, 171 S.W.3d 588, 595 (Tex. App.—
Dallas 2005, pet. denied). When reviewing a ―no evidence‖ issue, we determine ―whether the
evidence 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). In making this
determination, we must credit favorable evidence if a reasonable finder of fact could, and disregard
contrary evidence unless a reasonable finder of fact could not. Id.
If a party is attacking the factual sufficiency of an adverse finding on an issue on which the
other party had the burden of proof, the attacking party must demonstrate that there is insufficient
evidence to support the adverse finding. Croucher v. Croucher, 660 S.W.2d 55, 58 (Tex. 1983).
In addressing a factual sufficiency of the evidence challenge, we must consider and weigh all of
the evidence and set aside the verdict only if it is so contrary to the overwhelming weight of the
evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176 (Tex. 1986) (per
curiam).
The finder of fact is the sole judge of the credibility of the witnesses and the weight to be
assigned to their testimony. See Canal Ins. Co. v. Hopkins, 238 S.W.3d 549, 557 (Tex. App.—
Tyler 2007, pet. denied) (citing City of Keller, 168 S.W.3d at 819). The finder of fact is free to
believe one witness and disbelieve another, and reviewing courts may not impose their own
opinions to the contrary. Id. Accordingly, we must assume that the finder of fact decided all
credibility questions in favor of the findings if a reasonable person could do so. Id.
Moreover, it is within the finder of fact’s province to resolve conflicts in the evidence.
Canal, 238 S.W.3d at 557 (citing City of Keller, 168 S.W.3d at 820). Consequently, we must
assume that, where reasonable, the finder of fact resolved all conflicts in the evidence in a manner
consistent with the findings. Id. Where a reasonable finder of fact could resolve conflicting
evidence either way, we must presume the finder of fact did so in favor of the findings. Id. Where
conflicting inferences can be drawn from the evidence, it is within the province of the finder of
fact to choose which inference to draw, so long as more than one inference can reasonably be
drawn. Id. Therefore, we must assume the finder of fact made all inferences in favor of the
findings if a reasonable person could do so. Id.
12
Order to Return Rosie’s Funds (Fourth Issue)
The trial court concluded Susan owed Rosie a fiduciary duty as her agent under the power
of attorney pursuant to the relevant sections of the Texas Estates Code. The trial court also
concluded that Susan breached this duty because she failed to (1) timely inform Rosie of all
actions taken pursuant to the power of attorney, (2) maintain records of all transactions, (3)
account to the principal, and (4) refrain from self-dealing. The trial court went on to conclude that
Susan and Terry ―took $25,587.73 from Rosie.‖ Further, the court also stated that ―[t]his amount
includes all monies they received from Rosie‖ and the trial court ordered that they reimburse
Rosie’s estate in that amount.10
The basis for the trial court’s decision is the accounting and the Compass Bank account
information. As part of the accounting, Susan produced transaction summaries and bank
statements on two Bank of America (BOA) accounts. The first BOA account was the joint
account held by Susan and Rosie that was opened on August 13, 2009. The deposits into this
account ($9,643.62) were from Rosie’s funds only. At trial, Susan admitted that she used these
funds, at least in part, for her and Terry’s personal expenses. In Susan’s account summary, she
admits that several payments from this account were for their personal expenses. For instance, she
made a ―shop pmt‖ that appears to be for their personal business, as well as a payment for their
personal real estate taxes. There were also cash withdrawals left unexplained by the summaries.
On October 28, 2009, when Rosie was near death, Susan created a second BOA account.
The account appears to be Susan’s account, with Terry designated as the payable on death (POD)
beneficiary. Into this account, Susan deposited a total of $5,457.33, which included the balance of
her joint account with Rosie ($3,719.20), Rosie’s social security check ($714.00), the royalty
check ($918.62) Susan and Terry received after the royalty assignment, and funds from an
unknown source ($105.51). Susan’s summary for this account shows that she paid her and Terry’s
personal mortgage and utility bills from these funds. It also shows that she paid their sales tax for
the ―shop‖ to the comptroller’s office. According to Susan’s summary, she paid Terry’s personal
medical bills, and various other expenses such as their groceries, gas, and restaurant trips, a liquor
store bill, and other miscellaneous personal expenses that they incurred after Rosie’s death.
Furthermore, the summary lists several expenses that are unexplained. For example, Susan
10
Other than relying on the failure to plead the cause of action, Susan and Terry do not challenge the
conclusion that Susan breached her fiduciary duty.
13
withdrew $1,000.00 for ―reimb – misc,‖ but did not explain the basis for the reimbursement. She
also stated in the notes for several expenses that she ―doesn’t recall‖ the nature of the expenses.
Susan transferred the amount of the royalty check from the second BOA account to the
Compass Bank account. It appears from the record that this account was a joint account that Susan
and Terry held prior to, during, and after the events giving rise to this suit. She then wrote a check
to Charles for the royalty. A lis pendens affecting the royalty interest was filed after Charles made
a demand for an accounting. Susan also wrote a check to Charles from this account for Rosie’s
cremation. From the record, it does not appear that Charles cashed either check.
The trial court awarded the total amount deposited into all three accounts during the
relevant period. Specifically, the trial court awarded $9,643.62 for the amounts deposited into
Susan and Rosie’s joint BOA account, $4,433.20 for the amounts deposited into Susan and Terry’s
POD account at BOA prior to Rosie’s death, and $11,510.91 for the amounts deposited into Susan
and Terry’s joint Compass Bank account, for a total of $25,587.73.
The trial court could have reasonably concluded that Susan failed to discharge her duties
under the Texas Estates Code and ordered that the funds be returned to Rosie’s estate.
Additionally, the trial court could have properly ordered that $9,643.62 be returned from Susan
and Rosie’s joint account.
As to the second BOA account, the trial court ordered that $4,433.20 be returned to Rosie’s
estate.11 However, the initial deposit into this account, $3,719.20, came from Susan and Rosie’s
joint BOA account. The trial court could not award that amount for both the first and the second
account, because that would result in a double recovery of those funds. Therefore, the evidence is
insufficient to support the trial court’s award of $4,433.20 for the second BOA account. Rather,
the evidence is sufficient to support only the trial court’s award of the $714.00 deposit of Rosie’s
social security check to that account.12
As to the Compass Bank account, with the exception of the amount of the royalty check,
none of the deposits into that account match the amounts withdrawn from the BOA accounts. As
11
In the second BOA account, the trial court awarded the initial deposit ($3,719.20) and Rosie’s social
security check ($714.00), but did not award the funds from the unknown source ($105.51). The trial court did also did
not award the amount of the royalty check ($918.62) from this account, but separately ordered in its judgment that all
income from the royalty assignment be repaid to Rosie’s estate.
12
The remaining $105.51 deposited in the second BOA account could be recoverable, but the trial court did
not award it, and Charles does not contend that Rosie’s estate is entitled to the amount of that deposit.
14
we have stated, the trial court ordered in its judgment that all amounts received from the royalty
interest be returned to Rosie’s estate. Therefore, the evidence is sufficient to support the order to
return $918.62 from this account to Charles as executor of Rosie’s estate. There is no evidence to
support remaining portion of the award of from this account ($10,592.29).13
In summary, we hold that the trial court could have reasonably determined that Susan
failed to discharge her duties under the Texas Estates Code, and that she breached her fiduciary
duty to refrain from self-dealing. However, there is insufficient evidence to support the full
amount awarded by the trial court. The total amount that must be returned to Rosie’s estate is
$11,276.24, which represents the total amount of deposits from the first BOA joint account
between Rosie and Susan for $9,643.62, plus $714.00 from the second BOA account between
Susan and Terry, along with $918.62, representing the amount for the royalty check deposited into
the Compass Bank account.
We sustain in part and overrule in part the portion of Susan and Terry’s fourth issue
pertaining to the sufficiency of the evidence supporting the damages award.
Undue Influence (Sixth Issue)
Undue influence requires (1) the existence and exertion of an influence, (2) the effective
operation of such influence so as to subvert or overpower the mind of the maker of the document
at the time of execution of the document, and (3) the execution of the document, which the maker
thereof would not have executed but for such influence. See In re Estate of Woods, 542 S.W.2d
845, 847 (Tex. 1976); Rothermel v. Duncan, 369 S.W.2d 917, 922 (Tex. 1963). Thus, to establish
undue influence in this case, Charles must prove that Susan exercised such dominion and control
over Rosie’s mind, under the facts and circumstances then existing, that Susan overcame Rosie’s
free will and caused her to execute the royalty assignment, which she otherwise would not have
done. See Dubree v. Blackwell, 67 S.W.3d 286, 291 (Tex. App.—Amarillo 2001, no pet.).
The Texas Supreme Court has observed that ―every case of undue influence must be
decided on its own peculiar facts.‖ Pearce v. Cross, 414 S.W.2d 457, 462 (Tex. 1966) (citing
Rothermel, 369 S.W.2d at 922). Among other factors, courts consider the following:
(1) the circumstances surrounding execution of the instrument;
(2) the relationship between the grantor and the grantee;
13
As we have stated, besides the royalty check written to Charles, a check written to Charles for Rosie’s
cremation appears to be the only expense from the Compass account related to this case. But Charles has not cashed
the check, and he is not entitled to that amount because the evidence does not show that any of Rosie’s funds were
deposited into this account.
15
(3) the motive, character, and conduct of the persons benefitted by the instrument;
(4) the participation by the beneficiary in the preparation or execution of the instrument;
(5) the words and acts of the parties;
(6) the interest in and opportunity for the exercise of undue influence;
(7) the physical and mental condition of the grantor at the time of the instrument’s execution,
including the extent to which she was dependent upon and subject to the control of the
grantee; and
(8) the improvidence of the transaction by reason of unjust, unreasonable, or unnatural
disposition of the property.
See Guthrie v. Suiter, 934 S.W.2d 820, 831 (Tex. App.—Houston [1st Dist.] 1996, no writ). Proof
of undue influence may be established by circumstantial evidence, but must be probative of the
issue and not merely create a surmise or suspicion that such influence existed at the time the
document was executed. Rothermel, 369 S.W.2d at 922; Reynolds v. Park, 485 S.W.2d 807, 813
(Tex. Civ. App.—Amarillo 1972, writ ref’d n.r.e.). Undue influence cannot be inferred by
opportunity alone because ―[t]here must be some evidence to show that the influence was not only
present, but [that it was] in fact exerted with respect to the [execution of the document] itself.‖
Cotten v. Cotten, 169 S.W.3d 824, 827 (Tex. App.—Dallas 2005, pet. denied). ―The
circumstances relied on as establishing the elements of undue influence must be of a reasonably
satisfactory and convincing character, and they must not be equally consistent with the absence of
the exercise of such influence.‖ In re Estate of Steed, 152 S.W.3d 797, 810 (Tex. App.—
Texarkana 2004, pet. denied). Inter vivos transactions where one party exerts undue influence to
procure a mineral deed can support an undue influence claim. Rodriguez v. Garcia, 519 S.W.2d
908, 912 (Tex. Civ. App.—Corpus Christi 1975, writ ref’d n.r.e.).
Susan is Rosie’s daughter-in-law. At the time Rosie executed the assignment, Susan was
her primary caregiver. The trial court found that Rosie was in a state of significant physical and
mental distress and was close to death. She had several illnesses, and had been diagnosed with
ALS. The revenue from the royalty interest was significant. Susan located the assignment form,
completed it, and presented it to Rosie for her signature. Susan’s husband, Terry, was the
assignee. The record demonstrates that Susan did not disclose the transaction to anyone, including
Terry, until she attempted to move Rosie from her home. Shortly after engaging in this
transaction, Susan obtained the statutory durable power of attorney and the medical power of
attorney from Rosie. The trial court could have reasonably concluded that Susan systematically
16
gained complete control of Rosie’s assets and well-being, even though Rosie did not want to leave
her home or remain with Susan and Terry. Additionally, the trial court could have reasonably
concluded that, based on these circumstances, Susan effectively exercised such dominion and
control over Rosie so as to overpower Rosie’s free will, causing her to execute the royalty
assignment when she would not have ordinarily done so.
However, the evidence is insufficient to support the finding that Terry exercised undue
influence to obtain the assignment. The record demonstrates that Susan acted on her own in
obtaining the royalty assignment, and that Terry was unaware that the assignment existed until
Susan disclosed it after the altercation with Charles but prior to their removing Rosie from their
home.
Susan and Terry’s sixth issue is sustained as to Terry and overruled as to Susan.
Conspiracy (Seventh Issue)
To establish a civil conspiracy, one must prove the following: (1) a combination of two or
more persons; (2) an object to be accomplished (either an unlawful purpose or a lawful purpose by
unlawful means); (3) a meeting of the minds on the object or course of action; (4) one or more
unlawful, overt acts; and (5) damages as the proximate result. Tri v. J.T.T., 162 S.W.3d 552, 556
(Tex. 2005). Civil conspiracy is considered a derivative tort because a defendant’s liability
depends upon its participation in some underlying tort for which the plaintiff seeks to hold the
defendant liable. Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996); Miller v. Raytheon
Aircraft Co., 229 S.W.3d 358, 381 (Tex. App.—Houston [1st Dist.] 2007, no pet.).
―[P]roof of a conspiracy must usually be made by circumstantial evidence.‖ Paschal v.
Great W. Drilling, Ltd., 215 S.W.3d 437, 453 (Tex. App.—Eastland 2006, pet. denied) (citing
Schlumberger Well Surveying Corp. v. Nortex Oil & Gas Corp., 435 S.W.2d 854, 858 (Tex.
1968)). ―Inferences of concerted action may be drawn from joint participation in the transactions
and from enjoyment of the fruits of the transactions.‖ Id. (citing International Bankers Life Ins.
Co. v. Holloway, 368 S.W.2d 567, 582 (Tex. 1963)); see also Lesikar v. Rappeport, 33 S.W.3d
282, 302 (Tex. App.—Texarkana 2000, pet. denied). As to the element of an unlawful, overt act, a
cause of action for conspiracy may be based on a breach of fiduciary duty. See Lesikar, 33
S.W.3d at 302 (―Types of torts or unlawful acts on which a cause of action for conspiracy may be
based include breach of a fiduciary duty.‖). To prevail on a claim for breach of fiduciary duty, a
plaintiff must prove the existence of the fiduciary relationship and a breach of that duty by the
17
defendant that caused damages to the plaintiff. Beck v. Law Offices of Edwin J. Terry, Jr., P.C.,
284 S.W.3d 416, 429 (Tex. App.—Austin 2009, no pet.).
―Once a conspiracy is proven, each conspirator is responsible for all acts done by any of
the conspirators in furtherance of the conspiracy.‖ Paschal, 215 S.W.3d at 451 (citing Carroll v.
Timmers Chevrolet, Inc., 592 S.W.2d 922, 926 (Tex. 1979)). Here, the evidence established that
Susan had a fiduciary duty to Rosie as Rosie’s agent pursuant to the power of attorney. See Tex.
Bank & Trust Co. v. Moore, 595 S.W.2d 502, 507, 510 (Tex. 1980) (person with fiduciary duty
may not use position to self-deal); Plummer v. Estate of Plummer, 51 S.W.3d 840, 842 (Tex.
App.—Texarkana 2001, pet. denied) (―A power of attorney creates an agency relationship, and an
agent owes a fiduciary duty to its principal with respect to matters within the scope of its
agency.‖). The parties do not dispute that Susan breached her duties; they question only whether
the claims were properly pleaded. We have already disposed of that issue.
There is no evidence that Terry and Susan conspired to obtain the royalty assignment. The
record demonstrates that Susan completed the assignment form and presented it to Rosie. The
assignment was made to Terry, but the record shows that Terry first learned about the assignment
after the altercation with Charles. He and Susan discussed whether they would be able to return to
Charles and Rosie’s home after the altercation. Susan then disclosed to Terry that she had the
statutory durable power of attorney, the medical power of attorney, and royalty assignment. There
is no evidence that they had received any royalty payments at that time. Consequently, the trial
court erroneously concluded that Susan and Terry conspired to obtain the assignment.14
Susan and Terry’s seventh issue is sustained.
Joint and Several Liability (Fourth Issue)
The trial court separately concluded that ―Susan and Terry took $25,587.73 from Rosie,‖
and that they are ―jointly and severally liable for all monetary damages in this case.‖ Apart from
the actual amount awarded, the trial court could have reasonably reached this conclusion. When
Susan disclosed to Terry that she had engaged in these transactions, they agreed to use the power
of attorney if necessary to relocate Rosie to their home. They agreed that Terry would record the
documents at the courthouse, an agreement and act in furtherance of the conspiracy. Terry agreed
to take part in removing Rosie from her home. The court could have reasonably concluded, as
factfinder, that once they removed Rosie from her home, Susan and Terry began to obtain her cash
14
Because the trial court could have reasonably concluded Susan exercised undue influence in procuring the
assignment, rescission is still a proper remedy.
18
and use it for their personal benefit. The two BOA accounts were not opened until after they
relocated Rosie to their home. The accounting demonstrates that Susan and Terry personally
benefitted from Susan’s actions. Susan made payments with Rosie’s money for the benefit of their
business, and for their personal mortgage, real estate taxes, and utility bills, as well as Terry’s
personal medical bills. And, based on these circumstances, the trial court could have reasonably
concluded that the other expenses incurred, such as meals and gasoline, directly or indirectly
benefitted Terry.
The remainder of Susan and Terry’s fourth issue is overruled.
DISPOSITION
We have sustained Susan and Terry’s fourth issue in part, their seventh issue, and their
sixth issue with respect to Terry, and overruled their remaining issues. Accordingly, we reverse
the trial court’s judgment and render judgment that Susan and Terry are ordered to return
$11,276.24 instead of $25,587.73 to Charles as independent executor of Rosie’s estate. We affirm
the trial court’s judgment in all other respects.
JAMES T. WORTHEN
Chief Justice
Opinion delivered January 21, 2015.
Panel consisted of Worthen, C.J. and Hoyle, J.
(PUBLISH)
19
COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT OF TEXAS
JUDGMENT
JANUARY 21, 2015
NO. 12-13-00165-CV
SUSAN JACKSON HOLDEN AND TERRY HOLDEN,
Appellants
V.
CHARLES LYLE HOLDEN, AS INDEPENDENT EXECUTOR OF
THE ESTATE OF ROSIE EUNICE HOLDEN, DECEASED,
Appellee
Appeal from the 354th District Court
of Rains County, Texas (Tr.Ct.No. 9,140)
THIS CAUSE came to be heard on the oral arguments, appellate record and the
briefs filed herein, and the same being considered, it is the opinion of this court that there was
error in the judgment as entered by the trial court, and that the same should be affirmed in part
and reversed and rendered in part.
It is ORDERED, ADJUDGED and DECREED by this court that the portion of
the trial court’s judgment awarding $25,587.73 in damages to CHARLES LYLE HOLDEN,
AS INDEPENDENT EXECUTOR OF THE ESTATE OF ROSIE EUNICE HOLDEN,
DECEASED is reversed and judgment rendered instead in the amount of $11,276.24; that in
all other respects, the judgment of the trial court is affirmed in accordance with the opinion of
the court; that all costs of this appeal are hereby assessed equally amongst the parties; and that
this decision be certified to the court below for observance.
James T. Worthen, Chief Justice.
Panel consisted of Worthen, C.J. and Hoyle, J.