W.J. Billy Devillier and Paula Winzer v. A. P. Leonards and Mildred G. Leonards ( 2020 )

Opinion issued December 31, 2020
In The
Court of Appeals
For The
First District of Texas
————————————
NO. 01-20-00223-CV
NO. 01-20-00224-CV
———————————
W.J. BILLY DEVILLIER AND PAULA WINZER, Appellants
V.
A.P. LEONARDS AND MILDRED G. LEONARDS, Appellees
On Appeal from the County Court
Chambers County, Texas
Trial Court Case Nos. P03986A, P03846A
OPINION DISSENTING FROM DENIAL OF REHEARING
In this case, appellants, W.J. “Billy” Devillier and Paula Winzer, will
executors in these related cases, filed petitions for permission to appeal two virtually
identical interlocutory orders on a will construction issue of first impression—
whether an exculpatory clause in a will may apply not only to a trustee but also to
the executor of a will. The panel denied permission to appeal per curiam. Appellants
filed a motion for rehearing. On reconsideration, I would grant appellants’ motion
for rehearing and would grant permission to appeal to resolve the controlling
question of law presented by the case.
To be entitled to a permissive appeal from an interlocutory order that would
not otherwise be appealable, the requesting party must establish that (1) the order to
be appealed involves a “controlling question of law as to which there is a substantial
ground for difference of opinion,” and (2) an immediate appeal from the order “may
materially advance the ultimate termination of the litigation.” TEX. CIV. PRAC. &
REM. CODE ANN. § 51.014(d); See TEX. R. APP. P. 28.3(e)(4) (providing that petition
for permissive appeal in civil case must “argue clearly and concisely why the order
to be appealed involves a controlling question of law as to which there is a substantial
ground for difference of opinion and how an immediate appeal from the order may
materially advance the ultimate termination of the litigation”); TEX. R. CIV. P. 168
(providing that on party’s motion or on its own initiative, trial court may permit
appeal from interlocutory order not otherwise appealable, “as provided by statute”;
“[p]ermission must be stated in the order to be appealed”; and “permission must
identify the controlling question of law as to which there is a substantial ground for
difference of opinion, and must state why an immediate appeal may materially
2
advance the ultimate termination of the litigation”). I conclude that appellants’
petition clearly satisfies all requirements governing permissive appeals.
Both the trial court’s orders and appellants’ petitions for permissive appeal
identify the enforceability of the exculpatory clauses in the wills as the controlling
issue of law and assert that the issue is one of first impression in Texas. The trial
court’s orders, dated March 12, 2020, state:
The Court’s ruling contained in this Amended Order on Will
Construction Issues pertains to a controlling question of law, which is
undecided in Texas and to which there is a substantial ground for
difference of opinion. The controlling question of law is whether the
exculpatory clause contained [in each of the decedents’ wills] is
enforceable under Texas law.
(Emphasis added.)
The issue, as stated in appellants’ petitions for permission to appeal, is “the
validity and enforceability of an exculpatory clause contained in a will that applied
to an independent executor instead of a trustee.” As the petitions explain, each of the
wills at issue contains an exculpatory clause that excuses both the executor of the
will and the trustees of the testamentary trust “from liability for any action taken or
for the failure to take any action, if done in good faith and without gross negligence.”
Here, the trial court ruled in its March 12, 2020 “Amended Order[s] on Will
Construction Issues” that this exclusionary clause did not apply to the executors of
the wills. Relying on law from both the Texas Supreme Court and this Court holding
3
such exculpatory clauses enforceable as to trustees, appellants argue, as an issue of
first impression, that the same law should apply to executors.
The petitions for permission to appeal also argue that this Court has held a
virtually identical clause enforceable as to both the executor and the trustee. In
Kohlhausen v. Baxendale, the will at issue created a testamentary trust and also
included the following provision:
9.4 . . . Any Executor or Trustee shall be saved harmless from any
liability for any action such Executor or Trustee may take, or for the
failure of such Executor or Trustee to take any action if done in good
faith and without gross negligence.
See No. 01-15-00901-CV, 2018 WL 1278132, at *1 (Tex. App.—Houston [1st Dist.]
Mar. 13, 2018, no pet.) (mem op.). Kohlhausen filed suit against Baxendale, the
independent executor under the will, arguing that a former trustee of the
testamentary trust had breached his fiduciary duty to the other trust beneficiary. Id.Baxendale moved for summary judgment, arguing that the plain language of the
exculpatory clause relieved the trustee from liability for any actions or omissions “if
done in good faith and without gross negligence.” Id. at *2. The trial court granted
summary judgment in favor of Baxendale, and this Court upheld the ruling, noting
that “[t]he Will plainly states that [the trustee] is not liable for any acts or omissions
so long as such conduct was done ‘in good faith and without gross negligence.’” Id.
at *3. This Court held that, to survive summary judgment, Kohlhausen was required
to present more than a scintilla of evidence creating a fact issue that the former
4
trustee’s acts or omissions were done in bad faith or with gross negligence, which
Kohlhausen failed to do. Id. at *3–4.
Each of the wills at issue in this case contains a nearly identical exculpatory
clause applicable to “each Executor or Trustee.” However, the trial court in this case
held contrary to Kohlhausen with respect to the executors in this case, appellants, on
authority presented by appellees. Clearly, these contrary judgments with respect to
trustees and executors on essentially identical exculpatory clauses set forth a
question of law as to which there is substantial ground for difference of opinion.
Moreover, as appellants point out, this ruling of the trial court necessarily
entails that the jury charge will be different as to who may be held liable for breach
of fiduciary duties under the will if we deny this permissive appeal than if we grant
it and write an opinion construing the law, disagreeing with the trial court, and
holding that the exculpatory clause is enforceable as to executors. There are clearly
grounds for disagreeing on this controlling question of law for the case, as shown by
Kohlhausen and by the trial court’s will construction orders in these related cases.
The issue also presents an important question of law for all drafters of wills and
executors in Texas in the future. And all the time and money spent litigating the case
on the wrong charge will be wasted if this court refuses to grant the petition for
permissive appeal, as it has now done, and the case is tried on the wrong theory of
liability and is subsequently reversed on this point of law.
5
In my view, by refusing to accept this permissive appeal the panel makes an
arbitrary and capricious decision that we do not have license to make, that wastes
litigation and judicial resources, and that cannot be reasonably supported when
considering the plain language of the petition, the trial court’s order, prior relevant
case law, and the governing statute and procedural rules, including Civil Practice
and Remedies Code section 51.014(d), Rule of Appellate Procedure 28.3(e)(4), and
Rule of Civil Procedure 168. Moreover, by refusing to entertain and decide this
permissive appeal we also refuse to consider a ruling by the trial court that implicitly
contravenes our own recent Kohlhausen case, inviting a trial on a possibly erroneous
theory of law, exactly as argued by appellants.
Conclusion
I conclude that the petitions for permissive appeal satisfy each requirement of
Civil Practice and Remedies Code section 51.014(d), Rule of Appellate Procedure
28.3(e)(4), and Rule of Civil Procedure 168. The petitions clearly seek a ruling on a
controlling question of law as to which there is substantial ground for difference of
opinion, so granting the petitions would materially advance the ultimate resolution
of the litigation, with substantial savings of litigation and judicial resources.
Accordingly, the panel majority’s decision denying permission for permissive
6
appeal is arbitrary and capricious and is an abuse of this Court’s broad discretion.1
Therefore, I respectfully dissent from denial of rehearing of these petitions for
permission to appeal. I would grant the petitions.
Evelyn V. Keyes
Justice
Panel consists of Justices Keyes, Lloyd, and Landau.
Justice Keyes, dissenting from denial of rehearing.
1
See Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241–42 (Tex. 1985)
(stating that test for abuse of discretion is “whether the court acted without reference
to any guiding rules and principles,” i.e., “whether the act was arbitrary or
unreasonable”).
7