James E. Wade v. Johnny Wade, Individually Amanda Wade, Individually, and Amanda Wade, as the Independent of the Estate of Edell Wade ( 2015 )

ACCEPTED
03-15-00100-CV
5331285
THIRD COURT OF APPEALS
AUSTIN, TEXAS
5/18/2015 6:29:24 PM
JEFFREY D. KYLE
CLERK
NO. 03-15-00100-CV
IN THE COURT OF APPEALS FILED IN
3rd COURT OF APPEALS
FOR THE THIRD JUDICIAL DISTRICT OF TEXASAUSTIN, TEXAS
AT AUSTIN 5/18/2015 6:29:24 PM
JEFFREY D. KYLE
Clerk
IN RE THE ESTATE OF EDELL WADE, DECEASED.
JAMES E. WADE,
Appellant,
v.
JOHNNY WADE AND AMANDA WADE, INDIVIDUALLY AND
AMANDA WADE AS THE INDEPENDENT EXECUTOR OF THE
ESTATE OF EDELL WADE,
Appellees.
Appealed from the County Court at Law of Burnet County, Texas
APPELLANT’S BRIEF
RICHIE & GUERINGER, P.C.
SHELDON E. RICHIE
State Bar No. 16877000
EMILY J. SEIKEL
State Bar No. 24072331
100 Congress Avenue, Suite 1750
Austin, Texas 78701
512-236-9220 telephone
512-236-9230 facsimile
srichie@rg-austin.com Email
eseikel@rg-austin.com Email
ATTORNEYS FOR JAMES E. WADE
ORAL ARGUMENT REQUESTED
IDENTITY OF PARTIES AND COUNSEL
Pursuant to Texas Rule of Appellate Procedure 38.1(a), the following is a
complete list of all parties, and the names and addresses of all counsel, involved in
this case:
Appellant:
James E. Wade
Counsel for Appellant:
Sheldon E. Richie
State Bar No. 16877000
Emily J. Seikel
State Bar No. 24072331
Richie & Gueringer, P.C.
100 Congress Avenue, Suite 1750
Austin, Texas 78701
512-236-9220 Telephone
512-236-9230 Facsimile
srichie@rg-austin.com Email
eseikel@rg-austin.com Email
Appellees:
Johnny Wade
Amanda Wade, Individually and as the Independent Executor of the Estate
of Edell Wade
Counsel for Appellees:
For Johnny Wade and Amanda Wade Individually
Kathryn E. Allen
Graves, Dougherty, Hearon & Moody
401 Congress Avenue, Suite 2200
Austin, Texas 78701
512-480-5651 Telephone
512-480-5851 Facsimile
kallen@gdhm.com Email
2
For Amanda Wade as Independent Executor
Claude E. Ducloux
Hill, Ducloux, Carnes & De La Garza
400 West 15th Street, Suite 808
Austin, Texas 78701
512-474-7054 Telephone
512-474-5605 Facsimile
cducloux@hdcdlaw.com Email
3
TABLE OF CONTENTS
IDENTITY OF PARTIES AND COUNSEL .........................................................2
TABLE OF CONTENTS ........................................................................................4
INDEX OF AUTHORITIES ...................................................................................5
STATEMENT OF THE CASE ...............................................................................7
REQUEST FOR ORAL ARGUMENT..................................................................9
ISSUES PRESENTED FOR RELIEF .................................................................10
STATEMENT OF FACTS ....................................................................................11
SUMMARY OF THE ARGUMENT ...................................................................24
ARGUMENT ..........................................................................................................28
Issue 1: The Trial Court erred when it granted Defendants’ Amended
Motion for Partial Summary Judgment Concerning the 2004 Sale
(Pertaining to All Claims), as modified and entered by the Trial
Court on the 11th day of April, 2014. ....................................................28
Issue 2: The Trial Court erred when it approved of the jury’s findings in
response to Jury Question No. 1 and Jury Question No. 2 finding
that Johnny and Amanda Wade complied with their fiduciary
duties to Edell Wade in connection with the Modification
Agreement. .............................................................................................44
PRAYER .................................................................................................................61
CERTIFICATE OF COMPLIANCE ..................................................................62
CERTIFICATE OF SERVICE ............................................................................63
APPENDIX .............................................................................................................64
4
INDEX OF AUTHORITIES
Cases
Boucher v. Wallis, 236 S.W.2d 519 (Tex.Civ.App.—Eastland 1951) ............. 32, 33
Chapal v. Vela, 461 S.W.2d 466 (Tex.Civ.App.—Corpus Christi 1970) .. 36, 39, 41
City of Houston v. Trail Enterprises, Inc., 300 S.W.3d 736 (Tex. 2009)................29
Cobb v. TDCJ, 965 S.W.2d 59 (Tex.App.―Houston 1st Dist.] 1998, no writ) ......29
Collins v. Smith, 53 S.W.3d 832 (Tex.App.—Houston [1st Dist.] 2001, no pet.) ..46
D.T. Carroll Corp. v. Carroll, 256 S.W.2d 429 (Tex.Civ.App.—San Antonio
1953) .....................................................................................................................33
De Toca v. Wise, 748 S.W.2d 449 (Tex. 1998) .......................................................32
ECC Parkway Joint Venture v. Baldwin, 765 S.W.2d 504 (Tex.App.—Dallas
1989) .....................................................................................................................32
Estate of Townes v. Townes, 867 S.W.2d 414 (Tex.App.—Houston [14th Dist.]
1993, writ denied) .................................................................................................59
Great Am. Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41
(Tex. 1965) ...........................................................................................................28
HCBeck, Ltd. v. Rice, 284 S.W.3d 349 (Tex. 2009) ................................................29
HECI Exploration Co. v. Neel, 982 S.W.2d 881 (Tex. 1998) .................................34
In re Estate of Fawcett, 55 S.W.3d 214 (Tex.Civ.App.—Eastland 2001) ....... 42, 43
In re Estate of Herring, 970 S.W.2d 583 (Tex.App.—Corpus Christi 1998, no pet.)
..............................................................................................................................30
In re Estate of Miller, 2014 WL 3970766, 446 S.W.3d 445 (Tex.App.—Tyler,
Aug. 13, 2014) ......................................................................................................47
In re Guardianship Walzel, 2010 WL 335686 (Tex.App.—Corpus Christi-
Edinburg, Jan. 28, 2010).......................................................................................47
Jennings v. Burgess, 917 S.W.2d 790 (Tex. 1996)..................................................29
Joe v. Two Thirty Nine Joint Venture, 145 S.W.3d 150 (Tex. 2004) ......................28
Jordan v. Lyles, 455 S.W.3d 785 (Tex.App.—Tyler 2015) ....................... 48, 49, 59
Kansa Reinsurance Co. v. Congressional Mortgage Corp., 20 F.3d 1362 (5th Cir.
1994) .............................................................................................................. 32, 33
Limestone Prods. Distrib., Inc. v. McNamara, 71 S.W.3d 308 (Tex. 2002) ...........31
Matter of Estate of Matejek, 928 S.W.2d 742 (Tex.App.―Corpus Christi, 1996) ....,
30, 31, 37, 38, 42
Merriman v. XTO Energy, Inc., 407 S.W.3d 244 (Tex. 2013) ................................29
Minn. Mining & Mfg. Co. v. Nishika, Ltd., 953 S.W.2d 733 (Tex. 1997) ...............45
Montgomery v. Kennedy, 669 S.W.2d 309 (Tex. 1984) ..........................................28
Mooney v. Harlin, 622 S.W.2d 83 (Tex. 1981) ................................................ 36, 42
Munawar v. Cadle Co., 2 S.W.3d 12 (Tex.App.—Corpus Christi 1990) ...............34
Plas-Tex, Inc. v .U.S. Steel Corp., 772 S.W.2d 442 (Tex. 1989.) ...........................45
5
Port. v. Denas, 2006 WL 1686515, *4 (Tex.App.―San Antonio, June 21, 2006,
pet. denied) .................................................................................................... 45, 49
Rentfro v. Cavazos IV, 2012 WL 566364 (Tex.App.―San Antonio, September 21,
2012) .....................................................................................................................41
Rhone v. Steel, 997 S.W.2d 217 (Tex. 1999) ...........................................................30
Stephen County Museum, Inc. v. Swenson, 571 S.W.2d 257 (Tex. 1974)...............49
Texas Bank and Trust Co. v. Moore, 595 S.W.2d 502 (Tex. 1980) ................. 46, 50
Thomson Oil Royalty, LLC v. Graham, 351 S.W.3d 162 (Tex.App.—Tyler 2011,
no pet.) ..................................................................................................................28
Veltmann v. Damon, 696 S.W.2d 241 (Tex.App.—San Antonio 1985) .................40
Vogt v. Warnock, 107 S.W.3d 778, 783-784 (Tex.App.—El Paso 2003, pet. denied)
..................................................................................................... 47, 48, 49, 50, 59
Zale Corporation v. Rosenbaum, 520 S.W.2d 889 (Tex. 1975) ..............................29
Statutes
TEX. ESTATES CODE § 752.051 ..........................................................................48
6
STATEMENT OF THE CASE
Nature of the underlying proceeding: On behalf of the Estate of Edell
Wade, Plaintiff brought action for
claims for breach of fiduciary duty,
tortious interference with inheritance
rights, fraud, conspiracy, reformation,
rescission, judicial foreclosure,
constructive trust, defalcation, unjust
enrichment, profit disgorgement and
removal of executor. 1
Course of the Proceedings: Summary Judgment Motion Hearing
held on April 11, 2014. 2
Jury trial from September 29, 2014
until October 6, 2014. 3
Trial Court’s Disposition of Case: Order Granting Defendants’ Amended
Motion for Partial Summary
Judgment Concerning the 2004 Sale
(Pertaining to All Claims), as
modified and entered on April 11,
2014. 4
Order Denying Plaintiff’s Emergency
Motion to Reconsider the Court’s
Order Granting Defendants’ Amended
Motion for Partial Summary
Judgment Concerning the 2004 Sale
or, Alternatively, to Sever Plaintiff’s
Claims Concerning the 2004 Sale or
For Permission to Appeal
Interlocutory Order, entered on April
29, 2014. 5
1
CR: 765-819.
2
RR: Vol. 2 of 4.
3
CR: 1599-1601.
4
CR: 611.
5
CR: 762.
7
Final Judgment in favor of Appellees
based on the Jury Verdict, as modified
and entered on November 17, 2014. 6
Order Denying Plaintiff’s Motion for
Judgment Notwithstanding the
Verdict, as modified and entered on
November 17, 2014.7
Order Denying Plaintiff’s Motion for
New Trial, entered on January 26,
2015. 8
6
CR: 1599-1601.
7
CR: 1602.
8
CR: 1633.
8
REQUEST FOR ORAL ARGUMENT
Appellant James E. Wade requests the opportunity to present oral argument
in this proceeding. Oral argument will assist with clarification of the legal
arguments in this appeal, including the applicability of and distinctions of legal
precedent cited to herein. Oral argument will also be helpful in the decisional
process of the Court to the extent that facts and evidence are unclear to the Court
or are disputed between the parties. This appeal is not frivolous and the Trial
Court misapplied the law when it granted Defendants’ Amended Motion for Partial
Summary Judgment Concerning the 2004 Sale. Plaintiff seeks an opportunity to
more fully clarify, through oral argument, the bases for overturning the summary
judgment, as well as for rebutting anticipated differences between the parties
regarding the appellate record, the evidence presented at trial, and the propriety of
the Trial Court’s affirmation of the jury’s findings in response to Jury Question
No. 1 and Jury Question No. 2.
9
ISSUES PRESENTED FOR RELIEF
Issue One
The Trial Court erred when it granted Defendants’ Amended Motion for
Partial Summary Judgment Concerning the 2004 Sale (Pertaining to All Claims),
as modified and entered by the trial court on the 11th day of April, 2014.
Issue Two
The Trial Court erred when it approved of the jury’s findings in response to
Jury Question No. 1 and Jury Question No. 2 finding that Johnny and Amanda
Wade complied with their fiduciary duties to Edell Wade in connection with the
Modification Agreement.
10
STATEMENT OF FACTS
In August of 2012, James “Bud” Wade brought this suit on behalf of the
Estate of his mother, Edell Wade, against his sibling Johnny Wade as well as
Johnny’s wife Amanda Wade, whom he sued individually as well as in her
capacity as independent executor of the Estate of Edell Wade. Bud seeks to
recover value and property to the Estate that has been lost over the years due to
actions of Johnny and Amanda Wade, beginning in 2004 when Johnny and
Amanda induced Edell Wade to sell her 475-acre Texas ranch to them, and
continuing through the years leading up to and after the death of Edell Wade in
2010.
Bud Wade is the oldest of seven children of Edell Wade and Otto Wade.9
Johnny Wade is the youngest. 10 The Wade family grew up on a 475-acre ranch
located near Lampasas in Burnet County, Texas (the “Ranch”). 11 After growing up
and moving out of the family home, only three of the siblings – Bud, Nancy and
Charlene – chose to live close enough to their parents to visit regularly and to
provide assistance with chores, farm repairs, doctor visits and other
appointments.12 Edell’s husband Otto passed away in 1996 and Edell continued to
9
CR: [James “Bud” Wade Affidavit] at 477 par. 2; 478 par. 7.
10
CR: [James “Bud” Wade Affidavit] at 478 par. 7.
11
CR: [Nancy Burns Affidavit] at 473 par. 2.
12
CR: [Nancy Burns Affidavit] at 473 par. 3; [James “Bud” Wade Affidavit] 477 at par.
4.
11
live on the Ranch alone, with her children Bud and Nancy living only a short drive
away. 13
In 2003, Johnny Wade decided to move back from California to Lampasas
after over fifteen years living away from Lampas. 14 Johnny and his wife Amanda,
who was a California lawyer with experience in estate planning, met with Edell
Wade in December 2003 and introduced their idea to move back to Texas and to
buy the Ranch.15 As testified to by Johnny, Edell initially did not want to sell the
Ranch.16 But, as Amanda testified, Johnny and Amanda told Edell that the only
circumstance under which they would move back to Texas would be if she sold the
Ranch to them. 17
At the time, Edell was an 89-year old woman living on the Ranch, the place
she loved most in the world. 18 She was still very active in her church and the
community. 19 Edell had children living nearby who could and did provide care
and companionship, and who had been living close to her for over 40 years. 20 She
was mentally and physically healthy enough to manage her affairs and did not need
13
CR: [Nancy Burns Affidavit] at 474 par. 4; [James “Bud” Wade Affidavit] 477 at par.
4.
14
CR: [James “Bud” Wade Affidavit] 477 at par. 8.
15
CR: [Amanda Wade Deposition] 401-402, 405, 406, 409,412; [Johnny Wade
Deposition] 430.
16
CR: [Johnny Wade Deposition] 430.
17
CR: [Amanda Wade Deposition] 406,412.
18
CR: [Nancy Burns Affidavit] at 474 par. 7; [James “Bud” Wade Affidavit] at 478 par.
5.
19
Id.
20
Id.
12
live-in help or anyone to make her business and medical decisions for her. 21
Johnny Wade testified that Edell was “capable of being on her own and wanted to
be on her own.”22 In fact, Edell did not need assistance with her affairs until the
last year of her life (i.e., 2009-2010), as testified to by Amanda. 23
Johnny and Amanda convinced Edell to sell the Ranch to them and, on or
about January 6, 2004, Johnny Wade, Amanda Wade, and Edell Wade met with
Pat Cavness, a local attorney who had served as Edell Wade’s attorney over the
years, to discuss the sale of the Ranch.24 Edell and her deceased husband had a
long-standing relationship with Mr. Cavness, who had worked over the years with
the couple to prepare their wills. 25 Mr. Cavness recommended “a regular interest
rate.”26 The prime rate of interest at that time was 4.25%. 27 However, at the
meeting, a 2% interest rate was provided. 28 Mr. Cavness drafted the initial
documents for the sale and on January 16, 2004, he sent drafts of the Warranty
Deed with Vendor’s Lien, Promissory Note, Deed of Trust, Closing Agreement,
and Settlement Statement to Johnny and Amanda for their review; however those
21
Id.
22
CR: [Johnny Wade Deposition] 436.
23
RR: [Amanda Wade Deposition] 409,413.
24
CR: [Pat Cavness File] 347.
25
CR: [Pat Cavness File] 382, 383; [Amanda Wade Deposition] 407-408.
26
CR: [Amanda Wade Deposition] 407.
27
See http://www.fedprimerate.com/wall_street_journal_prime_rate_history.htm.
28
CR: [Pat Cavness File] 347.
13
documents were never signed. 29 Mr. Cavness also drafted a non-representation
letter to advise Johnny and Amanda that he represented Edell’s interests, and not
theirs. 30 On January 23, 2004, Amanda returned the drafts of the documents that
Edell’s attorney had created, with many handwritten changes that were favorable
to Johnny and Amanda (including a reduced default interest rate from 18% to
12%), and directed Mr. Cavness to revise the documents per her instruction. 31 Mr.
Cavness rejected Amanda’s changes on behalf of his client Edell. 32 Amanda
testified “I didn’t want to continue using him” and fired Mr. Cavness.33 No
attorney was again involved to represent Edell’s individual interests in the sale of
the Ranch. The Ranch was the single most significant asset that Edell Wade
possessed. 34
After firing Edell’s longtime attorney, Defendants retained their own legal
counsel selected by Amanda – attorneys with the law firm of Armbrust & Brown
LLP, located miles away in Austin, Texas – to incorporate Amanda’s desired
contract language to the documents.35 Johnny and Amanda paid for those legal
services.36 There is no evidence that the Armbrust & Brown lawyers ever met with
29
CR: [Pat Cavness File] 349- 362;[Amanda Wade Deposition] 407-408.
30
CR: [Pat Cavness File] 363.
31
CR: [Pat Cavness File] 364-380.
32
CR: [Pat Cavness File] 364.
33
CR: [Amanda Wade Deposition] 407.
34
CR: [Inventory and Appraisement] 336-337.
35
CR: [Amanda Wade Deposition] 407-408; [Johnny Wade Deposition] 431.
36
CR: [Amanda Wade Deposition] 408.
14
or spoke to Edell. Edell Wade was not represented by an attorney in the sale of the
Ranch, the most valuable property that she owned. 37
The Armbrust version of the sale documents were drafted at the sole
direction of Amanda and were identical to the version that she (a licensed attorney
at the time) had tried in vain to push through with Edell’s lawyer Mr. Cavness but
were rejected by Mr. Cavness on behalf of Edell before Amanda fired him. 38 On
February 6, 2004, the Deed of Trust, Warranty Deed with Vendor’s Lien
(hereinafter “Warranty Deed”), and Promissory Note (the “Note”) (collectively the
three documents are the “Sale Documents”) prepared by the Armbrust & Brown
attorneys and including the changes proposed by Amanda, were executed. 39 On
March 3, 2004, the Deed of Trust and the Warranty Deed were filed of record in
the Official Public Records of Burnet County, Texas. 40 The purchase price and
other terms of the sale (such as the interest rate) are not discernible from those
documents filed in public records. 41
As evidenced by the Note, the sale was owner-financed by Edell Wade.42
The terms of the Note required Johnny and Amanda to pay Edell $500,000 over a
37
CR: [Inventory and Appraisement] 336-337.
38
CR: [Deed of Trust] 321-335; [Pat Cavness File] 349- 362; [Johnny Wade Deposition]
431.
39
CR: [Deed of Trust] 321-335; [Warranty Deed with Vendor’s Lien] 463-472.
40
CR: [Deed of Trust] 321-335; [Warranty Deed with Vendor’s Lien] 463-472.
41
Id.
42
CR: [Promissory Note] 544-546.
15
period of 32 years at an annual interest rate of two percent (2%). 43 The Note, made
when Edell Wade was 89 years old, was due to mature in 2036, or when and if,
Mrs. Wade lived to be 121 years old. 44 Only the monthly interest payment was
required for the first two years (i.e. approximately $10,000/year or $833/month) (a
provision added by Johnny and Amanda’s attorneys). 45 Then, beginning February
1, 2006, Johnny and Amanda would be required to pay a combined principal and
interest amount of $1,848.10.46
The Closing Agreement, which was signed by Edell, Johnny and Amanda
Wade states that $150,000 of the $500,000 purchase price was paid for “one acre
of land and the small frame house.”47 Pat Cavness’ notes from the initial meeting
about the sale also indicate that $150,000 was for the house, and $350,000 was
allocated to the balance. 48 As such, the remaining 474 acres of the Ranch property
were sold for $350,000, a small fraction of its fair market value. The actual value
of the Ranch in 2004 was more than $350,000 and more than $500,000, and one
appraiser has approximated its 2004 value at $835,000.49 The value at the time of
Edell’s death and the administration of the Estate, and today, would be
significantly higher.
43
Id.
44
Id.
45
Id.
46
Id.
47
CR: [Closing Agreement] 591.
48
CR: [Pat Cavness File] 347.
49
CR: [Summary Appraisal] 481-543.
16
In 2005, after the sale, Johnny and Amanda left California and moved onto
the Ranch with Edell Wade. 50 There was no expectation from the other siblings
that wrongdoing would occur or that Johnny and Amanda would take advantage of
or unduly influence Edell Wade.51 However, over the years, Bud, his wife Gwen
and sister Nancy did begin to feel unwelcome during their visits to Edell on the
Ranch, and no longer could freely access the Ranch after it became Johnny and
Amanda’s property. 52 It also became evident that Johnny and Amanda, over time,
tightened their level of control over Edell Wade’s access to the outside world,
activities, and personal affairs. 53
On or about March 21, 2007, Edell Wade executed a Statutory Durable
Power of Attorney appointing Amanda Wade as her attorney-in-fact with a “broad
and sweeping” general power of attorney, with no exclusions or exemptions.54
Amanda consented to and accepted the Power of Attorney and was aware that she
held the power of attorney. 55 Neither Bud Wade nor his sister Nancy (who had
previously held a power of attorney for her mother since 1993), were advised by
Johnny and Amanda of the change in the power of attorney and the appointment of
50
CR: [James “Bud” Wade Affidavit] 477 par. 3; [Nancy Burns Affidavit] 474 par. 7.
51
CR: [James “Bud” Wade Affidavit] 478 par. 7, par. 8, 479 par. 12; [Nancy Burns
Affidavit] 474 par. 7, 475 par. 11.
52
CR: [James “Bud” Wade Affidavit] 478 par. 9, 479 par. 10, par. 11, par 12; [Nancy
Burns Affidavit] 474 par. 8, 475 par. 9, par. 10.
53
Id.
54
RR: Vol. 3 of 4 at 4-5 [Statutory Durable Power of Attorney].
55
CR: [Amanda Wade Deposition] 410.
17
Edell’s daughter-in-law Amanda Wade as attorney-in-fact instead of her daughter,
Nancy Burns. 56
In 2009, while Amanda Wade still had the power-of-attorney, a
Modification Agreement was executed that modified the terms of the Note.
Johnny and Amanda retained Michael Martin of the law firm of Martin, Millican,
Henderson & Shrum (“Martin & Millican” herein) – a firm they’d already been
using for other legal needs – to prepare the Modification Agreement. 57 The Martin
& Millican file on the Modification Agreement identifies the client in the matter as
“Johnny Wade et ux.” 58 The Martin & Millican file contains a work order that
logged the date and line items of work done on the Modification Agreement. 59 The
name “Edell Wade” does not appear anywhere in the work order, but Johnny and
Amanda’s names do.60 The file also contains a copy of a June 15, 2009, invoice
for balance due of $299.30 to “Mr. & Ms. Johnny Wade” for “modification of
note”; the invoice does not contain the name “Edell Wade” in the description of
services rendered, as a client, nor as a recipient of the bill. 61 The file also contains
a copy of a June 15, 2009, letter to Johnny and Amanda Wade stating “Enclosed
56
CR: [James “Bud” Wade Affidavit] 479 par. 12; [Nancy Burns Affidavit] 474 par. 6,
par. 8, 485 par. 9.
57
CR: [Amanda Wade Deposition] 410; RR Vol. 3 of 4 at 6-13 [Modification
Agreement]; RR Vol. 3 of 4 at 14-85 [Martin & Millican File].
58
RR: Vol. 3 of 4 at 14, 15 [Martin & Millican File].
59
RR: Vol. 3 of 4 at 15 [Martin & Millican File].
60
Id.
61
RR: Vol. 3 of 4 at 19 [Martin & Millican File].
18
are a copy of recorded Modification Agreement, the original of which has been
sent to Edell Wade and your file regarding the matter which you left with us. Also
enclosed is a bill for services.” 62
The only evidence of communication between Michael Martin or anyone at
the firm and Edell Wade regarding the Modification Agreement is dated after the
execution of the Modification Agreement, and is a two-line correspondence to
Edell dated June 15, 2009, that states “Enclosed is original recorded Modification
Agreement for your files. A copy has been sent to Johnny and Amanda Wade.”63
In contrast, the file does contain an account statement to Edell Wade for legal work
on her will in 2007, and which had a different file number. 64
The Martin & Millican file logs that on April 15, 2009, an office conference
with the “client” (i.e., Johnny and Amanda) was held regarding the desire “to drop
note to 0% or take ¼ off principal balance.” 65 Michael Martin did in fact prepare
the Modification Agreement, and, inconsistent with the initial intake notation that
the intent was to either drop the rate to 0% or reduce the principal balance, the
Modification Agreement that was ultimately signed by Edell Wade served to both
62
RR: Vol. 3 of 4 at 21 [Martin & Millican File].
63
RR: Vol. 3 of 4 at 20 [Martin & Millican File].
64
RR: Vol. 3 of 4 at 47 [Martin & Millican File].
65
Id.
19
materially reduce the principal balance and eliminate the interest rate.66 In a letter
to Johnny Wade dated May 26, 2009, Michael Martin wrote:
“Dear Johnny:
Enclosed you will find the Modification Agreement on the note to
your mother in which we have inserted the balance of $227,528.00,
reduced the interest rate to zero, and made the monthly payment
$1,200 per Amanda’s phone call of the 28th. If this is satisfactory,
each of you should sign as your names are typed, have notarized, and
return for recording with the Burnet County Clerk. If you would like
us to notarize, each/all of you can come by with the Modification and
sign here. Also enclosed is an amortization schedule on the modified
note. If you have any additional changes, please let me now.
Thank you.
Sincerely yours,
Michael M. Martin.”67
The Modification Agreement reduced the interest rate from 2% to 0% and,
thus, the monthly payment from $1,849 to $1,200.68 The principal was further
reduced to $227,528, which is a reduction in the amount of at least $40,000 from
the true amount owed on the Note at the time. 69 The Modification Agreement
resulted in lower monthly payments as well as a lower balance due on the
principal.
66
RR: Vol. 3 of 4 at 6-13 [Modification Agreement].
67
RR: Vol. 3 of 4 at 24 [Martin & Millican File].
68
CR: [Amanda Wade Deposition] 414;
69
RR: Vol. 3 of 4 at 6-13 [Modification Agreement]; Vol. 4 of 4 at 3 [Defendants’
payment chart]; Vol. 3 of 4 at 3 [Lori Graham’s amortization schedule].
20
However, the face of the Modification Agreement does not say anything
regarding a reduction in principal, and actually states, in bold-face capital letters
on the first page, that its purpose was exclusively for the elimination of interest:
*THE PARTIES STATE HEREBY THAT THIS
MODIFICATION IS FOR THE SOLE PURPOSE OF
ELIMINATING THE OBLIGATION OF OBLIGOR TO PAY
TO HOLDER INTEREST ON THIS LOAN.* 70
Edell Wade signed the Modification Agreement. 71 On June 9, 2009, the
Modification Agreement was filed in the Official Public Records of Burnet
County, Texas. 72
In 2010, Amanda Wade sent a handwritten note to Lori Graham, Edell
Wade’s accountant, in connection with preparation of Edell Wade’s 2009 tax
return. In that handwritten note, which was stuck to a page of the amortization
schedule on the Note, Amanda Wade stated:
“Lori – We paid Mrs. Wade house payments w/ interest through
May. She then relieved us of our interest and changed our note to
principal only. So she only has interest income from us for 5
months.”73
Also handwritten on the amortization schedule was the notation “principal
only” and an “X” over a portion of the payments for 2009. 74 There was no
notation of a change to the principal balance on the amortization schedule, nor
70
RR: Vol. 3 of 4 at 6-13 [Modification Agreement].
71
RR: Vol. 3 of 4 at 6-13 [Modification Agreement].
72
RR: Vol. 3 of 4 at 6-13 [Modification Agreement].
73
RR: Vol. 3 of 4 at 3 [Amanda Wade Note to Lori Graham].
74
Id.
21
mention by Amanda Wade of the second effect of the Modification Agreement,
which was the principal reduction. 75
During Edell’s lifetime she made clear her intent to treat each of her seven
children equally. She repeatedly named each of her seven children as equal
beneficiaries in a number of certificates of deposit, and did the extra paperwork
required for naming each of the seven beneficiaries upon every renewal. 76 Her
will, executed in 2003, left all of her estate to the seven children to “share and
share alike.”77 Amanda testified that Edell’s wishes “were that all seven children, I
believe, would take equally.” 78
In the years leading up to Edell’s passing after Johnny and Amanda had
moved to the Ranch, Bud and his wife Gwen, as well as his sister Nancy, sensed a
growing air of unwelcome from Johnny and Amanda when visiting Edell at the
Ranch, and it became evident that Johnny and Amanda did not enjoy their visits.79
Upon arrival to visit, Johnny or Amanda would be quick to arrive in the room, but
not to partake in any visiting; rather, they seemed to be monitoring the family
75
Id.
76
CR: [Nancy Burns Affidavit] 474 par. 6.
77
CR: [2003 Will of Edell Wade] at 388-391.
78
CR: [Amanda Wade Deposition] at 411.
79
CR: [James “Bud” Wade Affidavit] 478 par. 9, 479 par. 10, par. 11, par 12; [Nancy
Burns Affidavit] 474 par. 8, 475 par. 9, par. 10.
22
visits. 80 Bud learned that Johnny and Amanda had taken away Edell’s ability to
collect and manage her own mail. 81 He learned that Johnny and Amanda had
intentionally locked the entrance gate to the Ranch to prevent family visits, a fact
admitted to by Amanda. 82 Johnny also admitted that “they only way to take care of
[his] mother’s best interest was to exclude all [his] other siblings.” 83
On August 14, 2010, Edell Wade passed away. On October 4, 2010,
Amanda Wade, as independent executor of the Estate of Edell Wade, filed the
Inventory and Appraisement for the Estate identifying the debt owed by she and
Johnny to the Estate. 84 The Inventory and Appraisement put Bud on notice that
something was amiss with the 2004 sale of the Ranch and with Edell’s finances.85
It was only after his mother’s death that Bud learned from Nancy that Johnny had
stated to Edell that he could only afford to pay $500,000 for the Ranch. 86 He also
learned from Nancy that, at the time of the 2004 sale, Nancy had asked Johnny to
send out a letter to all of the siblings notifying them of the sale, but that Johnny
refused to do it because he knew the sale would not happen if he told his brothers
80
CR: [James “Bud” Wade Affidavit] 478 par. 9, 479 par. 10, par. 11, par 12; [Nancy
Burns Affidavit] 474 par. 8, 475 par. 9, par. 10. [James “Bud” Wade Affidavit] 336-338.
[Nancy Burns Affidavit] 473-476.
81
CR: Id.
82
CR: Id.; [Amanda Wade Deposition] 421.
83
CR: [Johnny Wade Deposition] 438.
84
CR: [Inventory and Appraisement] 336-338.
85
CR: [James “Bud” Wade Affidavit] 479 par. 13.
86
CR: [Nancy Burns Affidavit] 475 par. 11.
23
and sisters of his plans.87 Johnny testified that he did not communicate with his
siblings about the sale at the time it took place or the time leading up to it. 88
In October of 2010, Bud, spurred by receiving a copy of Amanda’s
Inventory and Appraisement, obtained a copy of the Modification Agreement from
the Official Public Records of Burnet County, Texas.89 Bud also became aware of
the contents of Edell Wade’s file as retained by Pat Cavness, which his sister
Nancy had obtained.90 Although Bud had an increasing concern over time that
Johnny and Amanda had been controlling Edell Wade, and even aggressive
towards Johnny’s siblings on occasion, it wasn’t until he was able to review the
Inventory and Appraisement, the Modification Agreement and the contents of Mr.
Cavness’ file that he realized that the extent of their financial control over Edell,
the extent of their self-interested actions, and the benefit that they had received
from their position.91
SUMMARY OF THE ARGUMENT
In 2004, Johnny and Amanda Wade, the son and daughter-in-law of Edell
Wade, induced 89-year-old Edell Wade to sell her Ranch to them at far below fair
market value, with seller-financing and on terms wholly favorable to themselves
and not to Edell. They moved onto the Ranch with Edell and positioned
87
CR: [Nancy Burns Affidavit] 475 par. 11.
88
CR: [Johnny Wade Deposition] 431-432.
89
CR: [James “Bud” Wade Affidavit] 479 par. 13.
90
CR: [James “Bud” Wade Affidavit] 479 par. 13; [Pat Cavness File] 347-387.
91
CR: [James “Bud” Wade Affidavit] 479 par. 13.
24
themselves in a relationship of trust and confidence with Edell, which created a
fiduciary relationship and which the Trial Court instructed the jury was in fact a
fiduciary relationship. Johnny and Amanda proceeded to take control of her
everyday affairs and to limit her access to the outside world and to the rest of her
family. In 2007, Amanda Wade became attorney-in-fact for Edell Wade under a
Power of Attorney. In 2009, Johnny and Amanda instigated a Modification to the
terms of the Note from the sale of the Ranch, and eliminated the interest as well as
reducing the principal in the amount of at least $40,000. By the time of Edell’s
death in 2010, the Estate had been denuded of its greatest asset – the Ranch – in
return for a zero-interest 32-year note that was far less than the value of the Ranch.
Johnny and Amanda were fiduciaries to Edell Wade at the time of the 2004 sale
and at the time of the 2009 Modification, yet in each transaction they benefitted
and she did not.
Edell did not receive any independent advice or have the benefit of full
disclosure or scrupulous honesty, as required by Texas fiduciary law. Johnny and
Amanda Wade’s breaches of fiduciary duty were robust and well-documented.
The Modification Agreement on its face is misleading and deceptive because its
stated purpose is exclusively for the elimination of interest, and it does not
acknowledge any principal reduction. There is no evidence that Edell Wade knew
about the principal reduction; in fact the documentation reveals that neither the
25
lawyer nor Edell’s accountant was made aware of a principal reduction.92 The
lawyer who drafted simply “inserted” an amount dictated by Amanda, and the
accountant was told about the interest elimination only, and in 2010 – well after the
execution of the Modification. The Trial Court erred in affirming the jury’s
findings regarding whether Johnny and Amanda respectively complied with their
fiduciary obligations in relation to the Modification Agreement in 2009.
Bud Wade, who was not a party the sale of the Ranch and who had no duty
in connection therewith, only discovered the unfavorable terms of the Note and
later Modification in connection with the administration of the Estate in 2010, and
he brought suit on behalf of the Estate in an effort to remedy the wrongs done to
Edell and her Estate by Johnny and Amanda. The Trial Court ignored the
discovery rule and the fact that, under the law, Bud had no duty to investigate the
sale and, as such, could not be imputed with constructive notice of public records.
The Trial Court also wrongly imputed notice of financial terms of the 2004
sale and other information that were not within any actual knowledge of Bud, and
that would have been impossible to glean from the content of any public records.
The documents that were filed of public record at the time of the sale of the Ranch
– the Deed of Trust and Warranty Deed – did not reveal the purchase price or the
92
RR: Vol. 3 of 4 at 14-86 [Martin & Millican File]; Vol. 3 of 4 at 3 [Amanda Wade
Note to Lori Graham].
26
terms of the sale, such as the interest rate. 93 The information that was critical to,
and the basis for, Bud’s claims was simply not discoverable from any publicly
filed document pertinent to the 2004 sale of the Ranch. The Trial Court was thus
wrong to grant summary judgment and prevent Bud from bringing his claims
regarding the 2004 sale to be heard in front of a jury.
The transcript of the summary judgment hearing clearly documents that the
Trial Court made improper findings of fact based on the Judge’s personal feelings
on familial relationships. 94 Because of the Trial Court’s mistake, Bud lost
rescission of the sale of the Ranch as a remedy and was barred from telling the
whole story to the jury. He was deprived of an opportunity to demonstrate to the
jury the true magnitude of loss caused by Johnny and Amanda’s manipulation of
the sale of the Ranch for far below market value in 2004. By inducing Edell to
make the sale, and then by methodically asserting increasing levels of control over
Edell’s decision-making and over her contact with her own children, Johnny and
Amanda destroyed Edell’s relationship with her family and successfully altered
Edell’s lifetime plan to have all seven of her children share equally upon her death.
Johnny and Amanda now own the Ranch at a rock-bottom price and the remaining
balance due to the Estate on the Note is far less than the value of the Ranch in
2004, in 2010 upon Edell’s death, and what the Ranch is worth today.
93
CR: [Deed of Trust] 321-335; [Warranty Deed with Vendor’s Lien] 463-472.
94
RR: Vol. 2 of 4 [Summary Judgment Hearing Transcript].
27
Bud seeks to right the wrongs done by Johnny and Amanda to his mother
and his family, to be permitted his day in court where the whole and true story may
be told to a jury. At the instant underlying trial, the Trial Court’s improper
summary judgment ruling stunted the story because the 2004 sale of the Ranch was
off the table. This story is one of magnitude and involves ongoing breaches of
fiduciary duty and manipulation, yet the jury was only given the opportunity to
hear about the 2009 Modification. Plaintiff respectfully asks this Court to right the
errors made by the Trial Court and remand for a new trial.
ARGUMENT
Issue 1: The Trial Court erred when it granted Defendants’ Amended
Motion for Partial Summary Judgment Concerning the 2004 Sale
(Pertaining to All Claims), as modified and entered by the Trial
Court on the 11th day of April, 2014.
The usual presumption that a judgment is correct upon appeal does not apply
in appeals of summary judgments. Montgomery v. Kennedy, 669 S.W.2d 309, 311
(Tex. 1984). Evidence favorable to the non-movant will be taken as true.
Thomson Oil Royalty, LLC v. Graham, 351 S.W.3d 162, 165 (Tex.App.—Tyler
2011, no pet.). Evidence that favors the movant’s position will rarely be
considered unless it is uncontroverted. Great Am. Reserve Ins. Co. v. San Antonio
Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex. 1965). Any conflicts are to be
resolved in the appellant’s favor. Joe v. Two Thirty Nine Joint Venture, 145
S.W.3d 150 (Tex. 2004). An appellate court reviews a trial court’s summary
28
judgment de novo. HCBeck, Ltd. v. Rice, 284 S.W.3d 349 (Tex. 2009). When a
party moves for both no-evidence summary judgment and traditional summary
judgment, the Court of Appeals will first review the trial court’s judgment under
the no-evidence standard. Merriman v. XTO Energy, Inc., 407 S.W.3d 244, 248
(Tex. 2013). If the reviewing court determines that summary judgment was
improperly granted, the reviewing court will reverse the judgment and remand the
cause for a trial on the merits. City of Houston v. Trail Enterprises, Inc., 300
S.W.3d 736, 737 (Tex. 2009).
A summary judgment based on an affirmative defense, as here, presents “a
particularly heavy burden” for a defendant to carry, since that defendant must
also conclusively establish all elements of the affirmative defense. Cobb v. TDCJ,
965 S.W.2d 59, 61 (Tex.App.―Houston 1st Dist.] 1998, no writ) (reversing
summary judgment). In a summary judgment on limitations, when the non-movant
asserts that limitations has been tolled, the summary judgment movant must
conclusively negate the applicability of the tolling and the movant cannot be
entitled to summary judgment on a limitations defense absent a conclusive
establishment of such. Zale Corporation v. Rosenbaum, 520 S.W.2d 889, 890
(Tex. 1975); Jennings v. Burgess, 917 S.W.2d 790, 793 (Tex. 1996). Thus,
because Plaintiff properly pled the discovery rule, it was the Defendants’ burden at
summary judgment to further (1) conclusively establish the discovery rule does not
29
apply and (2) conclusively negate it if does apply. Rhone v. Steel, 997 S.W.2d
217, 223-4 (Tex. 1999); Matter of Estate of Matejek, 928 S.W.2d 742
(Tex.App.―Corpus Christi, 1996) writ denied per curiam.
The Order on the 2004 Sale was improper because genuine issues of
material fact existed to precluded summary judgment, and Defendants failed to
conclusively prove all essential elements of their affirmative defense of statute of
limitations as a matter of law. The Defendants argued against the application of
the discovery rule but failed to prove as a matter of law that there was no genuine
issue of material fact regarding the date when Plaintiff did discover or should have
discovered Defendants’ misconduct and resulting injury. See Matter of Estate of
Matejek, 928 S.W.2d 742 (Tex.App.―Corpus Christi, 1996) writ denied per
curiam (grantee’s estate had burden to conclusively establish when grantor
discovered or should have discovered the fraud, and its summary judgment
evidence did not meet that burden of proof); see also In re Estate of Herring, 970
S.W.2d 583, at 586 (Tex.App.—Corpus Christi 1998, no pet.) (“Specifically, a
defendant seeking summary judgment on the basis of limitations must prove when
the cause of action accrued and, when applicable, must negate the discovery rule
by proving as a matter of law that there no genuine issue of fact about when the
plaintiff discovered or should have discovered the nature of the injury.”).
30
Plaintiff provided summary-judgment evidence that raised many fact issues
on the discovery rule. Plaintiff testified by affidavit that he did not discover, and
could not have discovered, critical facts regarding Defendants’ misconduct until
after the death of his mother, Edell Wade, including but not limited to the price,
terms and forgiveness of indebtedness. 95 The Plaintiff discovered a “sale” but had
no knowledge, no way to discover (the basis for the fraud claims were not
discernible from any publicly filed records), and no duty to discover that the “sale”
was a result of Defendants’ misconduct until much later. Despite such evidence,
the Trial Court failed to meet its requirement to take as true all evidence favorable
to the non-movant Plaintiff and to view the evidence most favorably to the non-
movant Plaintiff and to indulge every reasonable inference and resolve all doubts
in favor of non-movant Plaintiff. Limestone Prods. Distrib., Inc. v. McNamara, 71
S.W.3d 308, 311 (Tex. 2002).
The Trial Court also misunderstood or misapplied the law and seemingly
ignored several exceptions and caveats to the general rule of imputing constructive
notice from public records, such as (1) that “if the claimed fraud occurred in the
inducement, recordation of the document does not, of itself, give notice of the
fraud,” (Matejek, 928 S.W.2d at 744) and (2) a person may not be charged with
constructive notice of information in public records, for purposes of limitations,
95
CR: [James “Bud” Wade Affidavit] 478 par. 7, par. 8, 479 par. 12, par. 13; [Nancy
Burns Affidavit] 474 par. 7, 475 par. 11.
31
unless that person was under an obligation to search the records; and (3) the rule
that constructive notice is limited to the facts reflected on the face of the records,
i.e. what is actually discernible from the public records. Id; Kansa Reinsurance
Co. v. Congressional Mortgage Corp., 20 F.3d 1362, 1370 (5th Cir. 1994). The
Trial Court also improperly made a finding of fact as to Plaintiff’s due diligence
and when he had constructive notice of the basis for his claims seeking rescission
of the 2004 Sale.
Constructive notice is not a bar to actions for fraud or breach of fiduciary
duty
“The purpose of recording laws is to notify subsequent purchasers of the
rights such instruments are intended to convey, and not to give protection to
perpetrators of fraud.” Boucher v. Wallis, 236 S.W.2d 519, 526 (Tex.Civ.App.—
Eastland 1951). The Texas Supreme Court has held that constructive notice of
county records does not operate as a bar to fraud actions, and Texas appellate
courts have extended the same rule to breach of fiduciary duty causes of action.
De Toca v. Wise, 748 S.W.2d 449, 451 (Tex. 1998) (constructive notice under the
real property statutes is not a defense to a buyer’s action asserting DTPA violations
and fraud); ECC Parkway Joint Venture v. Baldwin, 765 S.W.2d 504, 509
(Tex.App.—Dallas 1989) (no entitlement to summary judgment on grounds of
constructive notice of height restriction through deed records, applying De Toca
rule on constructive notice to breach of fiduciary duty and negligent
32
misrepresentation). Defendants’ statute of limitations arguments were required to
fail as a matter of law, to the extent they relied on the constructive notice allegedly
provided to Plaintiff by the 2004 recording to defeat fraud and breach of fiduciary
duty claims.
Plaintiff had no duty of reasonable diligence as to the 2004 sale of the Ranch
The trial court improperly imposed a duty of reasonable diligence upon the
Plaintiff regarding the 2004 sale of the Ranch. For purposes of limitations, a
person may not be charged with constructive notice of the actual knowledge
discernible from examination of public records unless that person was “under an
obligation to search the records.” Kansa Reinsurance Co. v. Congressional
Mortgage Corp., 20 F.3d 1362, 1370 (5th Cir. 1994). “The recording of a deed is
only constructive notice of its contents to those whose duty it is to search the
records.” D.T. Carroll Corp. v. Carroll, 256 S.W.2d 429, 434 (Tex.Civ.App.—
San Antonio 1953); Boucher v. Willis, 236 S.W.2d 519 (Tex.Civ.App.—Eastland
1951) (in suit by minor wards seeking to set aside probate court’s order authorizing
the sale of their mineral interest by guardian, wards could not have discovered
fraud by exercise of ordinary due diligence until shortly before the suit; recording
of deed was not constructive notice of fraud because wards were not under any
legal duty to examine deed records and they were not in possession of facts that
would cause them to inspect the records).
33
Defendants failed to prove that Plaintiff had any such duty or obligation of
due diligence or that Plaintiff was in possession of facts that would cause him to
investigate the sale. The evidence was undisputed that Plaintiff was not a party to
the sale, was not a third-party beneficiary to the sale, was not involved in the sale,
and was not even aware of the sale when it occurred in 2004, although he did learn
of it at some point after. 96 In 2004, several years prior to Edell’s death, Bud had no
reason to question the sale because he had no knowledge of the terms of the
transaction, of its fairness or unfairness, and had no duty of reasonable diligence
under the law. Plaintiff did not acquire “constructive notice because there was no
occasion for him to search the records when he had no reason to know or suspect
that” Defendants purchased Edell Wade’s property under egregiously one-sided
terms to her detriment and their gain. See HECI Exploration Co. v. Neel, 982
S.W.2d 881, 888 (Tex. 1998); see also Munawar v. Cadle Co., 2 S.W.3d 12
(Tex.App.—Corpus Christi 1990) (purchaser had no constructive notice of
recorded agreement providing that a third-party owned gasoline pumps because
there was nothing in the chain of title which would have referred him to that
agreement). Thus, he could not be imputed with notice of the contents of the
public records on the transaction.
96
CR: [James “Bud” Wade Affidavit] 478 par. 6, 7.
34
Months after the sale, when Johnny and Amanda moved back to Texas in
2005, Bud still had no reason to suspect his brother and sister-in-law would do
anything to take advantage of their mother. 97 Eventually over the years after they
moved in at the Ranch, Bud, his wife Gwen and his sister Nancy did begin to feel
increasingly unwelcome to visit Edell at the Ranch, and Johnny and Amanda
appeared to want to control and monitor any visits.98 However, Bud’s frustration
with Johnny and Amanda’s demeanor and their seeming desire to control Edell
Wade’s ability to have family visit the property does not alone trigger a duty to
investigate all of his mother’s financial affairs while she was still living, of sound
mind, and capable.
The Plaintiff’s discovery of Defendants’ misconduct truly did not occur until
after the death of his mother when they were wrapping up her affairs.99 During
this time, after reviewing the Inventory of his mother’s estate and the Modification
Agreement, the Plaintiff became concerned that Defendants had taken financial
advantage of his mother Edell.100 At no time was Bud ever informed by Edell or
by Johnny or Amanda of the terms of either the sale of the Ranch or the
Modification Agreement, including the price, the interest rate, the alleged
97
CR: [James “Bud” Wade Affidavit] 478 par. 6, 7, 8.
98
CR: [James “Bud” Wade Affidavit] 478 par. 9, 479 par. 10, par. 11, par 12; [Nancy
Burns Affidavit] 474 par. 8, 475 par. 9, par. 10. Id.; CR: [Nancy Burns Affidavit] 473-
476.
99
CR: [Nancy Burns Affidavit] at 474 par. 7; [James “Bud” Wade Affidavit] at 478 par.
5.
100
CR: [James “Bud” Wade Affidavit] 479 par. 13.
35
forgiveness of principal, the elimination of the interest rate or any other terms. 101
Bud learned the details only after the passing of his mother and in connection with
the administration of her estate.102
Prior to his mother’s death, Bud had no duty to investigate her financial
decisions and transactions. A duty did arise, however, after Edell’s death because
Bud was a beneficiary of her estate and therefore then took on a duty of reasonable
diligence in connection with the estate of Edell Wade. “Texas law charges all
persons interested in an estate with knowledge of the contents of the probate
records.” Mooney v. Harlin, 622 S.W.2d 83, 84 (Tex. 1981); see also Chapal v.
Vela, 461 S.W.2d 466, 470 (Tex.Civ.App.—Corpus Christi 1970) (charging
devisees under a will with constructive notice of all of the ownership of land by the
father’s estate). Prior to August of 2010, Plaintiff had no duty to investigate; as of
August 2010, he did. Indeed, upon Edell’s death, Bud was prompted to inquire
into the property interests and debts owed to her estate.103 He fulfilled his duty of
reasonable investigation and diligence by obtaining all copies of documents that he
could regarding the sale, by examining other pertinent records (e.g., financial
101
CR: [James “Bud” Wade Affidavit] 478 par.6, par. 7, 479 par. 13.
102
CR: Id.
103
CR: [James “Bud” Wade Affidavit] 479 par. 13.
36
statements, bank statements and Pat Cavness’ file), and by bringing suit within the
applicable statute of limitations.104
Defendants’ misconduct was not discoverable from the public records
Even if Bud had reviewed the public records pertinent to the sale of the
Ranch in 2004 – despite the fact that he had no duty to do so and it was not
permissible for him to be imputed with constructive notice of the information
therein – examination of such records would not have given him notice of his
claims. “Constructive notice is limited to facts reflected on the face of the
records.” Matter of Estate of Matejek, 928 S.W.2d 742, 744 (Tex.App.—Corpus
Christi 1996, writ ref’d) (citations omitted). For example, “if the claimed fraud
occurred in the inducement, recordation of the document does not, of itself, give
notice of the fraud.” Id. Defendants failed to offer any evidence of how a title
examination would have placed Bud on constructive notice of the specific terms of
the sale of the Ranch, or of the fraud or breach of fiduciary duties committed by
each Defendant in connection therewith.
The Deed of Trust and Warranty Deed were the only documents filed of
record in the Official Public Records of Burnet County, Texas on March 3,
2004. 105 Defendants attempted to offer the Warranty Deed and the Deed of Trust
as evidence that Plaintiff was on notice of his claims contesting the terms of the
104
Id.
105
CR: [Deed of Trust] 321-335; [Warranty Deed with Vendor’s Lien] 463-472.
37
real estate transaction as of that date, and to argue that the limitations period began
to run at that time. However, these arguments should have failed because nowhere
in those documents was the actual “purchase price” of the property listed, nor
specifics on what was being purchased, nor what the financing terms were. The
financial terms were not disclosed in any documents of public record. In fact, the
only document reflecting the terms of the sale was the Promissory Note, which was
not recorded.
The Trial Court was wrong to impute notice of financial terms that were not
within Bud’s actual knowledge and that also could not have been gleaned from the
content of any public records (which he had no duty to search). No matter how
closely Bud examined the official records he had access to, it would have been
impossible for him to glean the basis for his claims.
Plaintiff Bud Wade did not have notice of his claims until 2010
A cause of action for fraud accrues upon its discovery, or from the time the
fraud might have been discovered through the exercise of reasonable diligence.
See Matter of Estate of Matejek, 928 S.W.2d at 744. Knowledge of facts which
would have excited inquiry in the mind of a reasonably prudent person, which if
pursued by him with reasonable diligence would lead to discovery of fraud, is
equivalent to knowledge of the fraud as a matter of law. Id. The defrauded party
38
must be cognizant or aware of facts which would have caused the ordinarily
intelligent and prudent person to investigate. Id.
It was not until 2010 that Bud was aware of facts that would cause a
reasonably prudent person to discover Defendants’ fraud and misconduct.106 Bud
was not aware of the 2004 sale until after it occurred.107 The Promissory Note was
the only document that states the disparate terms of the sale, and it was not
recorded. When Defendants first moved back to Texas in 2005, Bud had no reason
to think they were taking advantage of his mother. 108
Unlike in Chapal, a case the Defendants relied upon in their summary
judgment briefing,109 Plaintiff was not “cognizant of all of the alleged acts of
undue influence” at the time of the real estate transaction. See Chapal v. Vela, 461
S.W.2d 466, 470 (Tex.Civ.App.—Corpus Christi 1970). There, the appellate court
said that the facts at the time of the transaction were “equally convincing” when
they were first “personally known,” as they were later after limitations had expired.
Id. at 469. In Chapal, a father conveyed land to two sons, and the court charged
constructive notice of the publicly recorded deed to a third brother who was not a
party to the sale, but who had learned of the sale at or near the time it occurred.
However, in Chapal there was a duty that does not exist here: there the brother
106
CR: [James “Bud” Wade Affidavit] 479 par. 13.
107
CR: [James “Bud” Wade Affidavit] 478 par. 6, 7.
108
CR: 5-22 [Defendants Amended Motion for Partial Summary Judgment concerning
the 2004 Sale].
39
had a duty of inquiry because the same year that the deed was recorded, his father
passed away and he became a devisee and thus had an interest in the ownership of
his father’s land. Additionally, the Chapal evidence showed that the brother had
been aware of all of the alleged acts of undue influence around the same time they
occurred. That is not the case here.
Another case relied upon by Defendants, which they introduced at the
summary judgment hearing, Veltmann v. Damon, is distinguishable because it
involves both a duty and an awareness of facts that Bud did not have in 2004.110
Veltmann v. Damon, 696 S.W.2d 241 (Tex.App.—San Antonio 1985) writ granted,
affirmed in part, reversed in part). The Veltmann appellate court upheld the trial
court’s finding that that the plaintiff’s action to set aside the deed was barred by
limitations and held that, “as a matter of law, any cause of action to set aside the
deed accrued on the date of its recording.” Id. at 244. However, again in that case
the plaintiff had a duty that Bud did not have in 2004. The plaintiff in Veltmann
was a son who had a conditional interest in the land subject to the deed, as it had
had been specifically devised to him upon the prior death of his father and he was
aware of that fact, and thus had duty of reasonable diligence. Id. Plaintiff Bud
Wade had no such duty until the death of Edell Wade in 2010 when she devised a
one-seventh interest in her estate to her son Bud Wade.
110
RR: Vol. 2 of 4 at 30 [Summary Judgment Hearing Transcript].
40
Yet another case urged by the Defendants, 111 Rentfro v. Cavazos IV, is
distinguishable because both a duty of diligence based on an interest in the land
existed and also in existence was the awareness of certain facts that were the basis
for setting aside the deed long before the filing of suit. Rentfro v. Cavazos IV,
2012 WL 566364 (Tex.App.―San Antonio, September 21, 2012). The plaintiff’s
affidavits themselves established her awareness of the alleged facts before or soon
after the deeds were signed. Rentfro, 2012 WL 566364 at 9-11.
At the time of the real estate transaction in 2004, Bud did not have access to
information that would have been “equally compelling” at the time as he did at the
time this suit was filed, and he did not have “means . . . at hand to readily
discover” the wrongdoing. Chapal at 470. It was not any of Bud’s business, much
less his duty, to pry into his mother’s real estate transaction in 2004, the purchase
price and terms of which he was not even aware, and which could not have been
discernible from the county records even if he had looked. Moreover, Bud had no
reason to doubt the forthrightness of his brother and sister-in-law’s dealing with his
mother. In this case, the information regarding their misconduct and self-dealing
accumulated over the years and it was not until the news of the Modification
111
CR: 5-22 [Defendants Amended Motion for Partial Summary Judgment concerning
the 2004 Sale].
41
Agreement after Edell Wade’s death that Plaintiff had an inkling of wrongdoing in
the form of fraud or breach of fiduciary duty. 112
Due Diligence is a question of fact for the jury
The test of reasonable due diligence is a question of fact for the jury, not for
the judge. See In re Estate of Fawcett, 55 S.W.3d 214, 221 (Tex.Civ.App.—
Eastland 2001). In an action to set aside a deed based on a claim of fraud, it
accrues upon discovery of the fraud, and the question of when the fraud was
discovered or should have been discovered is a fact question that precludes
summary judgment. Matter of Estate of Matejek, 928 S.W.2d 742
(Tex.App.―Corpus Christi, 1996). Defendants did not “prov[e], as a matter of
law, that there is no fact issue concerning when [Plaintiff] discovered or should
have discovered the harm.” Id. at 745.
Bud never claimed that he should be excused from exercising due diligence,
and asserted that he did in fact exercise due diligence as soon as his duty to do so
was triggered in 2010 in connection with the administration of the estate and its
contents.113 See, e.g., Mooney v. Harlin, 622 S.W.2d 83 (Tex. 1981) (four-year
statute of limitations on a fraud claim began to run when the will was admitted to
probate, whereupon the parties were charged with notice of probate records). Bud
was not aware that Defendants had taken advantage of Edell Wade and benefited
112
CR: [James “Bud” Wade Affidavit] 479 par. 13.
113
CR: [James “Bud” Wade Affidavit] 479 par. 13.
42
so egregiously at her expense until 2010. Appropriately, Bud Wade then timely
filed suit within four years of the administration of the estate and the discovery of
information that put him on notice of Defendants’ fraudulent acts and other
misconduct.
The Trial Court Made Improper Fact-Findings
The transcript of the summary judgment hearing clearly documents that
Judge Savage made fact findings. At the hearing, Judge Savage asked, noting the
period during which Edell Wade was living after the 2004 Sale:
“Why didn’t the son call mom and say, Mom what’s
going on? . . . he was aware of the fact that there was a
sale but didn’t inquire of his mother or anyone else what
the terms of the sale were. If he was so concerned about
all of this, why didn’t he inquire using the - - I’m not
talking about going down and digging through public
records. I’m talking about picking up the phone or
dropping by and saying, what’s going on?” 114
The Court’s query presumes (a) that Bud had a duty to investigate the sale,
(b) that Bud was on notice of wrong-doing by his brother and sister-in-law, and (c)
that he failed live up to an alleged duty prior to his mother’s passing. These are all
fact questions for a jury, as the existence of a duty of reasonable due diligence and
whether that duty was fulfilled is a question of fact for the jury, not for the judge.
See In re Estate of Fawcett, 55 S.W.3d at 221.
At the conclusion of the hearing Judge Savage further stated:
114
RR: Vol. 2 of 4 at 66 [Summary Judgment Hearing Transcript].
43
“All right. After hearing the evidence -- and let me just
say this. I know that families, kids and families, may take
advantage of a parent to the detriment of the other kids. I
also know that sons don't want to rock the boat if mama
is happy and bring her into the picture of a possible
conflict between the kids. They want their mom to have a
happy home, happy life. And I don't think that possibly
mom got the best deal, but at the same time mom got
other benefits as a result of this deal. And that is to have
someone at the ranch caring for her. I can understand
why he insisted upon buying the ranch if he was going to
live there and take care of mom. Then that would be in
effect, in my mind, a part of the consideration of the sale
of the ranch, was that promise from her son.” 115
Again, this statement is replete with language that implicates impression,
inference, and fact-finding that properly should be the provenance of the jury.
The transcript clearly shows that the Court made improper fact assumptions
and failed to indulge every reasonable inference in favor of the Plaintiff, the non-
movant, and, thus, erred in granting the Order at issue.
Issue 2: The Trial Court erred when it approved of the jury’s findings in
response to Jury Question No. 1 and Jury Question No. 2 finding
that Johnny and Amanda Wade complied with their fiduciary
duties to Edell Wade in connection with the Modification
Agreement.
The Trial Court directed the jury that “a relationship of trust and confidence
existed because Edell Wade justifiably placed trust and confidence” in both Johnny
Wade and Amanda Wade. 116 The jury was then instructed that, in order for the
115
RR: Vol. 2 of 4 at 75 [Summary Judgment Hearing Transcript].
116
CR: [Charge to the Court] at 1541, 1543.
44
acceptance of the Modification to be shown to have been in compliance with
fiduciary obligations, the Defendants had to prove each of the following:
(a) The transaction in question was fair and equitable to Edell Wade; and
(b) [Johnny and Amanda] made reasonable use of the confidence that Edell
Wade placed in [them]; and
(c) [Johnny and Amanda] acted in the utmost good faith and exercised the
most scrupulous honesty toward Edell Wade; and
(d) [Johnny and Amanda] placed the interests of Edell Wade before [their]
own, did not use the advantage of [their] position to gain any benefit for
[themselves] at the expense of Edell Wade, and did not place
[themselves] in any position where [their] self-interest might conflict
with [their] obligations as a fiduciary.
117
[emphasis added.]
When an appellant who does not have the burden of proof at trial attacks the
legal sufficiency of an adverse finding, the appellant must demonstrate that there is
no evidence to support such finding. Porter v. Denas¸ 2006 WL 1686515, *4
(Tex.App.—San Antonio, 2006). When reviewing a no evidence claim, the scope
of review for an appellate court is only the evidence and inferences that tend to
support the findings, while disregarding all evidence or inferences to the contrary.
Minn. Mining & Mfg. Co. v. Nishika, Ltd., 953 S.W.2d 733, 738 (Tex. 1997).
When the appellant without the burden of proof at trial attacks the factual
sufficiency of an adverse finding, the appellant must demonstrate that there is
117
CR: [Charge to the Court] at 1541, 1543.
45
insufficient evidence to support the finding. Plas-Tex, Inc. v .U.S. Steel Corp., 772
S.W.2d 442, 445 (Tex. 1989.) In reviewing a factual insufficiency challenge, an
appellate court must examine all evidence in support of and contrary to the court’s
finding. Id.
Texas law applies a presumption of unfairness to transactions between a
fiduciary and a party to whom the fiduciary owes her duties. Texas Bank and Trust
Co. v. Moore, 595 S.W.2d 502 (Tex. 1980). Under Texas fiduciary law, the 2009
Modification was presumptively fraudulent and unfair because Amanda and
Johnny were fiduciaries to Edell (as ruled as a matter of law by the Trial Court and
instructed as such)118 and they benefitted from it, and thus they bore the burden of
demonstrating it to be otherwise. Texas Bank and Trust Co. v. Moore, 595 S.W.2d
502 (Tex. 1980) (the nephew of an elderly woman caused her to transfer certain
property to him before her death; the court concluded the nephew was a fiduciary
and as a result, a presumption arose that any gift from the aunt, the principal, to
him as a fiduciary was unfair and invalid). This shifts the burden to the profiting
fiduciary to demonstrate the fairness of the transaction and “the fiduciary must
show proof of good faith and that the transaction was fair, honest and equitable.”
Collins v. Smith, 53 S.W.3d 832, 840 (Tex.App.—Houston [1st Dist.] 2001, no
pet.).
118
CR: [Charge to the Court] at 1541, 1543.
46
In addition to a fiduciary relationship based on a family relationship of trust
and confidence, Amanda Wade was also a fiduciary to Edell by merit of her
capacity as Edell’s attorney-in-fact under the power of attorney. 119 Texas appellate
courts often review whether attorney-in-fact fiduciaries have met their burden
where they benefit from their principal and have time and again reiterated the high
standards of conduct as a fiduciary and the burden to show fairness to a
“scrupulous” degree. For example, the El Paso Court of Appeals in Vogt v.
Warnock held that where an individual possessing power of attorney receives a gift
or bequest from the principal, the fiduciary relationship “cast[s] upon the profiting
fiduciary the burden of showing the fairness of the transaction,” so that the
fiduciary must “be prepared to prove the transaction was conducted with
scrupulous fairness.” Vogt v. Warnock, 107 S.W.3d 778, 783-784 (Tex.App.—El
Paso 2003, pet. denied); see also In re Guardianship Walzel, 2010 WL 335686
(Tex.App.—Corpus Christi-Edinburg, Jan. 28, 2010) (“Regardless of whether a
fiduciary acts under the power of attorney, the execution of the power of attorney
conclusively establishe[s] the fiduciary relationship,” and gifts from the principal
to the attorney-in-fact, while not prohibited, must be shown by the fiduciary to
have been conducted with “scrupulous fairness”); In re Estate of Miller, 2014 WL
3970766, 446 S.W.3d 445 (Tex.App.—Tyler, Aug. 13, 2014) (son with a power-
119
CR: [Power of Attorney] 397-399.
47
of-attorney could not show that he did not engage in self-dealing by making
interest-free loans to himself). The standard of conduct is a “stringent standard
undiluted by exceptions.” Vogt at 778; Jordan v. Lyles, 455 S.W.3d 785
(Tex.App.—Tyler 2015).
Per Vogt v. Warnock, Jordan v. Lyles, and other Texas precedent, it is clear
that Amanda, as a fiduciary and attorney-in-fact, did not have the luxury of picking
and choosing when and to what degree she would serve to protect Edell Wade’s
best interests. Vogt at 778; Jordan v. Lyles, 455 S.W.3d 785, 794 (Tex.App.—
Tyler 2015). Amanda Wade owed Edell Wade, her principal, “a high duty of good
faith, fair dealing, honest performance, and strict accountability.” Vogt v.
Warnock, 107 S.W.3d at 782. Acceptance of a statutory power of attorney
“imposes on [the attorney-in-fact] legal duties that continue until [the attorney-in-
fact] resign[s] or the power of attorney is terminated or revoked by the principal or
by operation of law.” TEX. ESTATES CODE § 752.051. In Vogt the El Paso
Court of Appeals specifically held that an attorney-in-fact is obligated to uphold
their fiduciary duties from the acceptance of the power of attorney and onward
until its termination, even when they have not yet acted under the auspices of the
power of attorney and the transaction was not in the scope of the power of
attorney. Vogt at 778. The same was recently held, and Vogt reinforced, by the
Tyler Court of Appeals, which held that there was no evidence that the holder of a
48
power of attorney informed the principal of all material facts of the transactions
and a breach of fiduciary duty had been demonstrated. Jordan v. Lyles, 455
S.W.3d 785 (Tex.App.—Tyler 2015).
“Critical” to determining whether there was a breach of fiduciary duty is the
‘determination of whether there was under the circumstances a good faith effort on
the party of [the party claiming validity] to fully inform [Edell] of the nature and
effect of the transactions.” Vogt v. Warnock, 107 S.W.3d at 778. Both Johnny and
Amanda had a duty to ensure that Edell’s decisions in connection with the
Modification were the result of “voluntary and intelligent consideration.” Stephen
County Museum, Inc. v. Swenson, 571 S.W.2d 257, at 261 (Tex. 1974). Also part
of their duty was to ensure that Edell had proper advice as to her financial choices,
as well as to ensure the material facts, such as to value, were clearly provided and
documented. Id.; see also Porter v. Denas, 2006 WL 1686515, *4 (Tex.App.―San
Antonio, June 21, 2006, pet. denied) (fiduciary duties of nephew and grandniece
who provided assistance in financial affairs in a fiduciary capacity, and who
permitted themselves to remain beneficiaries on their elderly aunt’s IRA, had
duties that included advice to her regarding her IRA).
Johnny and Amanda, by respectively accepting both their roles as a fiduciary
and the Modification which benefited them by eliminating interest as well as an
alleged gift of debt forgiveness of around $40,000, from Edell, consented to have
49
their conduct measured by an even higher standard of loyalty. Vogt¸ 107 S.W.3d
at 783, citing Texas Bank and Trust Co. v. Moore, 595 S.W.2d 502, 508 (Tex.
1980).
Defendants bore the burden of proof to show that they each complied with
their fiduciary duties and were required to prove all of the elements set out in Jury
Questions No. 1 and No. 2. However, there is no evidence to support the answers
to Jury Question No. 1, i.e., that when Johnny Wade accepted the Modification
Agreement, he complied with all of his duties to Edell Wade under his fiduciary
relationship of trust and confidence with Edell Wade. Nor is there evidence to
support the answer to Jury Question No. 2, i.e., that when Amanda Wade accepted
the Modification Agreement, she complied with all of her duties to Edell Wade
under her fiduciary relationship of trust and confidence with Edell Wade. The
evidence is insufficient to support the answer “Yes” to Jury Question No. 1 as well
as the “Yes” answer to Jury Question No. 2. In fact, the jury’s answer to these
questions was against the great weight and preponderance of the evidence and is
manifestly unjust.
Defendants Could not Show the Transaction was Fair and Equitable
Element (a) of both Jury Questions No. 1 and No. 2 required Defendants to
prove that the Modification Agreement transaction was a transaction that was fair
and equitable to Edell Wade. However, the Modification Agreement, by its own
50
terms, was not fair and equitable to Edell Wade as the reduction in principal and
elimination of interest were wholly for the benefit of Defendants and to the
detriment of Edell Wade. No evidence was presented at trial that the Modification
Agreement was fair and equitable to Edell Wade; in fact, the only assertions during
trial that the transaction was fair and equitable to Edell Wade were comments
made by Defendants’ counsel regarding the emotional benefit Edell Wade may
have received from making a purported gift to Johnny and Amanda Wade.
Statements made by counsel during trial are not evidence and should not be
considered as such by the jury.
Defendants did not meet their burden to prove that the Modification
Agreement was fair and equitable to Edell Wade, and trial exhibits introduced to
the jury demonstrate otherwise. First, the Modification Agreement, admitted into
evidence as Plaintiff’s Exhibit 11, states on its face, in bold type:
*THE PARTIES STATE HEREBY THAT THIS
MODIFICATION IS FOR THE SOLE PURPOSE OF
ELIMINATING THE OBLIGATION OF OBLIGOR TO PAY
TO HOLDER INTEREST ON THIS LOAN.* 120
Thus the only stated purpose of the Modification Agreement was that it was
to eliminate the obligation to pay interest, and the only benefit of that was to
Johnny and Amanda Wade, not to Edell Wade. It is impossible to tell from the
face of the document, but the Modification Agreement also eliminated around
120
RR: Vol. 3 of 4 at 6-13 [Modification Agreement].
51
$40,000 from the principal balance due (i.e., around 15% of the principal) without
explanation or identification. 121
It is undisputed that the Modification Agreement resulted in lower monthly
payments to Edell Wade and later to her Estate, as well as a balance on the Note
that was reduced to even lower than the already less than fair market value it
initially had, due to principal reduction. Defendants’ own trial exhibit documented
the payments made on the Note before and after the Modification and show that
the payments dropped from $1,849.00 to $1,200.00. 122 There was no benefit to
Edell Wade that resulted from the Modification. The Defendants did not meet
their burden to show that it was fair and equitable for these reasons and more.
Defendants Could Not Show Utmost Good Faith and the Exercise of
Scrupulous Honesty
Element (c) of both Jury Questions No. 1 and No. 2 required Defendants to
prove that Johnny and Amanda Wade each acted in the utmost good faith and
exercised the most scrupulous honesty towards Edell Wade. However, there was
no evidence that Edell Wade had full disclosure of material facts or that she even
knew all of the terms of the Modification Agreement, especially that the principal
had been reduced by about $40,000, and there is no evidence that she had the
121
RR: Vol. 3 of 4 at 6-13 [Modification Agreement].
122
RR: Vol. 4 of 4 at 3 [Defendants’ Payments Exhibit].
52
benefit of independent advice. In fact the opposite can be demonstrated through
clear and undisputed documentation that was presented to the jury.
The evidence in fact clearly demonstrated that Johnny and Amanda Wade
controlled the flow of information with Michael Martin regarding the terms of the
Modification Agreement. This evidence was presented in the Martin & Millican
file and the Work Order admitted into evidence as part of Plaintiff’s Exhibit 38,
showed that Johnny and Amanda Wade were the clients of Michael Martin. The
Martin & Millican file on the Modification Agreement identifies the client in the
matter as “Johnny Wade et ux,” i.e. Johnny and his wife Amanda. 123 The Martin &
Millican file contains a work order that logged the date and line items of work
done on the Modification Agreement. 124 The name “Edell Wade” does not appear
anywhere in the work order, but Johnny and Amanda’s names do.125 The file also
contains a copy of a June 15, 2009, invoice for balance due of $299.30 to “Mr. &
Ms. Johnny Wade” for “modification of note”; the invoice does not contain the
name “Edell Wade” in the description of services rendered, as a client, nor as a
recipient of the bill.126 The file also contains a copy of a June 15 2009, letter to
Johnny and Amanda Wade stating “Enclosed are a copy of recorded Modification
Agreement, the original of which has been sent to Edell Wade and your file
123
RR: Vol. 3 of 4 at 14, 15 [Martin & Millican File].
124
RR: Vol. 3 of 4 at 15 [Martin & Millican File].
125
Id.
126
RR: Vol. 3 of 4 at 19 [Martin & Millican File].
53
regarding the matter which you left with us. Also enclosed is a bill for
services.”127
The only evidence of communication between Michael Martin or anyone at
the firm and Edell Wade regarding the Modification Agreement is dated after the
execution of the Modification Agreement, and is a two-line correspondence to
Edell dated June 15, 2009, that states “Enclosed is original recorded Modification
Agreement for your files. A copy has been sent to Johnny and Amanda Wade.”128
In contrast, the file does contain an account statement to Edell Wade for legal work
on her will in 2007, with a different file number. 129
The Martin & Millican file also showed that, subsequent to a telephone call
with Amanda Wade on May 26, 2009, Mr. Martin sent the Modification
Agreement to Johnny Wade with a cover letter dated May 26, 2009, admitted into
evidence as part of Plaintiff’s Exhibit 38, containing the statement that he had,
“inserted the balance of $227,528.00, reduced the interest rate to zero, and made
the monthly payment $1,200 per Amanda’s phone call of the 26th.”130
The jury was also shown a note sent from Amanda Wade to Edell Wade’s
accountant Lori Graham in 2010, in connection with the preparation of Edell’s
2009 tax return, advising Lori Graham that the interest under the Promissory Note
127
RR: Vol. 3 of 4 at 21 [Martin & Millican File].
128
RR: Vol. 3 of 4 at 20 [Martin & Millican File].
129
RR: Vol. 3 of 4 at 47 [Martin & Millican File].
130
RR: Vol. 3 of 4 at 24 [Martin & Millican File].
54
had been eliminated in 2009. This note was admitted into evidence as Plaintiff’s
Exhibit 7.131 In that handwritten note, which was stuck to a page of the
amortization schedule on the Note, Amanda Wade stated:
“Lori – We paid Mrs. Wade house payments w/ interest through
May. She then relieved us of our interest and changed our note to
principal only. So she only has interest income from us for 5
months.”132
Also written on the amortization schedule was the notation “principal only”
and an “X” over a portion of the payments for 2009. 133 There was no notation of a
change to the principal balance on the amortization schedule, nor mention by
Amanda Wade of the second effect of the Modification Agreement, which was the
principal reduction.134 The note to Lori Graham is interesting, in part, because it
indicates that Edell’s accountant was not informed of the elimination of interest at
the time of the Modification Agreement, but only afterwards for tax preparation;
thus Edell’s accountant was not consulted with regarding any potential benefit or
lack thereof to Edell Wade from the Modification.
There is simply no evidence that Edell Wade wanted to modify the terms of
the Note, much less to reduce the principal or engage in debt forgiveness. In fact,
there is no evidence that Edell Wade was aware that principal reduction was part of
131
RR: Vol. 3 of 4 at 3 [Amanda Wade Note to Lori Graham].
132
RR: Vol. 3 of 4 at 3 [Amanda Wade Note to Lori Graham].
133
Id.
134
Id.
55
the Modification. The Modification Agreement, which she did sign, states that it is
for elimination of interest only.
In fact, the documentation indicates that even the lawyer on the deal, as well
as Edell’s accountant, were aware only of the elimination of interest and not of the
principal reduction. The Martin & Millican file and the Modification Agreement
together indicate that Amanda and Johnny did not even tell the lawyer who
prepared it, Michael Martin, that principal reduction was part of the deal. The
initial intake notes on Martin’s work order log state that the intent was to either
eliminate interest or reduce principal, not both. 135 The Modification states in bold
and all-caps that it is for the elimination of interest only. Mr. Martin also wrote to
his client Johnny Wade that the principal balance had been “inserted” based on
what he was told by Amanda, but nothing in his file indicates that he understood
that to be a reduction.136
The documentation submitted to the jury also demonstrated that Edell
Wade’s accountant, Lori Graham, also was not informed of the principal reduction
component of the Modification Agreement.137 Amanda’s note to Lori Graham
fails to cite to the principal reduction or to direct her to adjust the Note
135
RR: Vol. 3 of 4 at 15 [Martin & Millican File].
136
RR: Vol. 3 of 4 at 24 [Martin & Millican File].
137
RR: Vol. 3 of 4 at 3 [Amanda Wade Note to Lori Graham].
56
amortization schedule to reflect such reduction, and would indicate that Lori
Graham was not told about the principal reduction.138
There is no documentary evidence of any calculation of the reduction in
principal, or how the $227,528.00 principal balance “inserted” into the
Modification Agreement was arrived at. Lori Graham’s amortization indicates the
principal was $40,149.84 higher than that.139 Nor is there is no indication that
Edell Wade wanted to make a gift to Johnny and Amanda in the form of debt
forgiveness, or that she was even aware of the principal reduction.
Defendants could not show that they placed the interest of Edell Wade before
their own; that they did not take advantage of their position to gain benefit; or
that their self-interest did not conflict with their obligations as fiduciaries.
Element (d) of Jury Questions No. 1 and No. 2 required that Defendants
prove that each of Johnny and Amanda Wade placed the interest of Edell Wade
before his or her own, did not use the advantage of their position to gain benefit for
themselves at the expense of Edell Wade, and did not place himself or herself in
any position where their self-interest might conflict with their obligations as a
fiduciary. As set forth above, there was no evidence that Johnny Wade and
Amanda Wade each placed their own interests before those of Edell Wade, did not
use their position to gain benefit for themselves at the expense of Edell Wade, and
acted in the utmost good faith or exercised the most scrupulous honesty toward
138
RR: Vol. 3 of 4 at 3 [Amanda Wade Note to Lori Graham].
139
RR: Vol. 3 of 4 at 3 [Amanda Wade Note to Lori Graham].
57
Edell Wade – in fact, the opposite can be demonstrated through clear and
undisputed documentation that was presented to the jury.
The overwhelming evidence in this case is that Johnny Wade and Amanda
Wade each not only placed themselves in a position where their self-interest might
conflict with their fiduciary obligations, they placed themselves in a position where
their self-interest did conflict with their fiduciary obligations. The only interest
Johnny Wade and Amanda Wade could possibly have served by entering into a
transaction with Edell Wade which was to their benefit (and to Edell Wade’s
detriment) was their own self-interest.
As previously noted, the jury saw a chart of the payments made by
Defendants to Edell Wade, along with copies of checks and bank statements
reflecting those payments, admitted into evidence as Defendants Exhibit 1.140 The
chart created by the Defendants themselves clearly evidenced the reduced
payments made by Defendants beginning on June 1, 2009, which resulted in less
money received by Edell Wade (to her detriment) and more money retained by
Johnny and Amanda Wade (to their benefit). 141
The Tyler Court of Appeals has recently noted, in a very similar case, that
the term “benefit” is defined as “an advantage,” which is itself defined as a
“relatively favorable position.” Jordan v. Lyles, 455 S.W.3d 785 (Tex.App.—
140
RR: Vol. 4 of 4 at 3 [Defendants’ Payments Exhibit].
141
RR: Vol. 4 of 4 at 3 [Defendants’ Payments Exhibit].
58
Tyl. 2015). The court reiterated the requirement that “the burden is on the
fiduciary to show that she acted fairly and informed the principal of all material
facts relating to the alleged transaction.” Id. at 792. “Even in the case of a gift
between parties with a fiduciary relationship, equity indulges the presumption of
unfairness and invalidity, and requires proof at the hand of the party claiming
validity of the transaction that it is fair and reasonable.” Id., citing Estate of
Townes v. Townes, 867 S.W.2d 414, 417 (Tex.App.—Houston [14th Dist.] 1993,
writ denied). The Jordan court found the daughter-in-law who held a power of
attorney had failed to meet her burden to prove “that she or anyone else
specifically discussed the transactions at issue with the older man and informed
him of all material facts relating to them.” Id. at 794. The attorney-in-fact’s
argument that she was not acting under her power of attorney when she executed
the transactions, and thus could not have breached her fiduciary duty also failed.
The Jordan court, invoking the Vogt opinion, held that she could not dilute her
fiduciary duty to the principal with such an exception, and quoted Vogt where the
court of appeals held that a fiduciary’s duty should be viewed by a “stringent
standard undiluted by exceptions.” Jordan v. Lyles, 455 S.W.3d at 794, quoting
Vogt at 778.
The Defendants failed to overcome the presumption of unfairness and undue
influence that attaches to transactions entered into during the existence of a
59
fiduciary relationship. There is no evidence that they met their burden and
complied with their fiduciary obligations, which were even more stringent in light
of the benefits they received under the Modification. There is no evidence that
Edell benefitted. The Modification Agreement, the Martin & Millican file, the
Defendant’s chart of payments, and the Lori Graham amortization and note speak
for themselves on this matter.
New Trial
Plaintiff seeks a new trial in which he can put on the full story of the wrongs
committed by Johnny and Amanda Wade over the years, beginning with the 2004
sale of the Ranch and continuing through Edell’s last years, her death, and the
administration of the Estate (in which Amanda served as independent executor).
The jury was only allowed to hear only a slanted, limited version of events that
began with the Modification. The full story is one of ongoing manipulation and
positioning by Johnny and Amanda in order to leverage power and control over
Edell Wade, take over her decisions for her, deprive her of professional advice or
independent counsel, strictly curtail her access to family visits and company, and
ultimately denude Edell and her Estate of not only the overwhelmingly most
significant asset – the Ranch – at far below market value, but then going on to
further diminish Edell’s assets by eliminating interest as well dropping the
principal on the Note through the Modification. Plaintiff respectfully requests this
60
Court to permit him to put on the trial to a jury and tell the full story, as he would
have had the Trial Court not wrongfully barred him from doing so.
PRAYER
WHEREFORE, PREMISES CONSIDERED, James E. Wade prays that this
Court overturn the Summary Judgment Order and the Final Judgment in this case
and remand the case for a new trial. Appellant further prays for such other relief,
whether at law or in equity to which this Court deems he is justly entitled.
Respectfully submitted,
RICHIE & GUERINGER, P.C.
BY: /s/ Sheldon E. Richie
SHELDON E. RICHIE
State Bar of Texas No. 16877000
Email: srichie@rg-austin.com
EMILY J. SEIKEL
State Bar of Texas No. 24072331
Email: eseikel@rg-austin.com
100 Congress Avenue, Suite 1750
Austin, Texas 78701
512-236-9220 telephone
512-236-9230 facsimile
ATTORNEYS FOR APPELLANT
JAMES E. WADE
61
CERTIFICATE OF COMPLIANCE
Pursuant to Texas Rules of Appellate Procedure 9.4, the undersigned
certifies Appellant’s Brief complies with 9.4.
1. Exclusive of the exempted portions in Texas Rules of Appellate
Procedure 9.4(i)(1), Appellant’s Brief contains 12,801 words.
2. Appellant’s Brief has been prepared in proportionally spaced typeface
using Microsoft Word Version 2007 in Times New Roman 14 point.
3. The undersigned has provided an electronic version of Appellant’s
Brief.
4. The undersigned understands a material misrepresentation in
completing this certificate, or circumvention of Texas Rules of
Appellate Procedure 9.4, may result in the Court’s striking
Appellant’s Brief.
/s/ Emily J. Seikel
Sheldon E. Richie/Emily J. Seikel
62
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on 18th day of May, 2015, a true and correct
copy of the foregoing was served as follows:
Counsel for Appellees
For Johnny Wade and Amanda Wade Individually
Kathryn E. Allen
Graves, Dougherty, Hearon & Moody
401 Congress Avenue, Suite 2200
Austin, Texas 78701
512-480-5651 Telephone
512-480-5851 Facsimile
kallen@gdhm.com Email
For Amanda Wade as Independent Executor
Claude E. Ducloux
Hill, Ducloux, Carnes & De La Garza
400 West 15th Street, Suite 808
Austin, Texas 78701
512-474-7054 Telephone
512-474-5605 Facsimile
cducloux@hdcdlaw.com Email
/s/ Emily J. Seikel
Sheldon E. Richie/Emily J. Seikel
63
APPENDIX
INDEX OF RECORD EXHIBITS ACCOMPANYING
APPELLANT’S BRIEF
69
JAMES E. WADE
Appellant.
TABLE OF CONTENTS
OF RECORD EXHIBITS ACCOMPANYING
APPELLANT’S BRIEF
NO. TITLE OF DOCUMENT
Tab A. Order Granting Defendants’ Amended Motion for Partial Summary
Judgment Concerning the 2004 Sale (Pertaining to All Claims), as
modified and entered on April 11, 2014.142
Tab B. Order Denying Plaintiff’s Emergency Motion to Reconsider the
Court’s Order Granting Defendants’ Amended Motion for Partial
Summary Judgment Concerning the 2004 Sale or, Alternatively, to
Sever Plaintiff’s Claims Concerning the 2004 Sale or For
Permission to Appeal Interlocutory Order, entered on April 29,
2014. 143
Tab C. Final Judgment in favor of Appellees based on the Jury Verdict, as
modified and entered on November 17, 2014. 144
Tab D. Order Denying Plaintiff’s Motion for Judgment Notwithstanding
the Verdict, as modified and entered on November 17, 2014. 145
Tab E. Order Denying Plaintiff’s Motion for New Trial, entered on
January 26, 2015. 146
Tab F. Charge of the Court 147
Tab G. Verdict148
Tab H. Modification Agreement 149
Tab I. TEX. ESTATES CODE § 752.051
142
CR: 611.
143
CR: 762.
144
CR: 1599-1601.
145
CR: 1602.
146
CR: 1633.
147
CR: 1539.
148
CR: 1541
149
RR: Vol. 3 of 4 at 6-13
CASE NO. P9127
I THE ESTATE OF § I THE COU TY COURT
§
EDELL WADE, § AT LAW
§
DECEASED § BUR ET COU TY, TEXAS
ORDER GRA NTING DEFENDANTS' AMEN DED MOTIO N FOR PARTIAL
SUMMARY J U DGMENT CONCERNI NG TH E 2004 SALE (Pertaining to All Claims)
This matter having come before the Court on Defendants· Amended Motion for Partial
C:l'G£~ ~ o?o j~+e. iA/-/e/'t?lf flere~-W 4 5"% ~ ~
It is FURTHER ORDERED, ADJUDGED AND FINALLY DECREED that AMANDA
WADE is hereby conditionally awarded, and shall have and recover from the Estate of Edell
Wade in the event an appeal is taken, further attorneys' fees as follows:
a. $20,000.00 in the event appeal is taken to the Court of Appeals;
b. $7,500.00 in the event a Petition for Review is filed in the Supreme Court of
Texas; and
c. $10,000.00 in the event of any further proceedings in the Supreme Court.
All costs of court herein incurred are charged against the Plaintiffs.
This is a final judgment, disposing of all claims and all parties. The Clerk shall issue
such writs in support of execution as AMANDA WADE may lawfully request.
.tt__
SIGNED THIS _[J_ day of November, 2014.
W.R. SAVAGE, Judge Presiding
APPROVED AS TO FORM: Fi •. CD iHIS \1~AYOF~A.O. 20~
q0w1,1 .
r.o .~
/2M/JJ , JEXAS
``~i;;;``````L-DEPUTY
Final Judgment, Page 2
diJiiflL_'r.c.
-By: Sheldo~n~E~.~R~ic-h-ie_ _ _ _ _ _ __
State Bar No.16877000
100 Congress Avenue, Suite 1750
Austin, Texas 78701
512 236-9220/ 512 236-9230 fax
srichie@rg-austin.com
ATTORNEY FOR JAMES "BUD" WADE
9h~
Don E. Walden
LAW OFFICE OF DON E. WALDEN
83 N. Capital of Texas Hwy, Bldg 1, Suite 305
Austin, Texas 78731
(512) 349-9595
(512)795-8079 Fax
donwalden@peoplepc.com
ATTORNEY FOR NANCY BURNS AND SUE MEUTH
GRAYES DOUGHERTY HEARON & MOODY, P .C.
401 Congress Avenue, Suite 2200
Austin, Texas 78701
(512) 480-5600 Telephone
(512) 480 585 Teleco ier
Kathry
State ar
kallen Clhm.com
ATTORNEY FOR DEFENDANTS
Ja:;~AWADE
CLAUDE E. DUCLOUX
State Bar No. 06157500
400 W. 15th Street, Suite 808
Austin, Texas 78701
Telephone: (512) 474-7054
Telecopier: (512) 474-5605
Email: cducloux@hdcdlaw.com
ATTORNEY FOR AMANDA WADE,
in her capacity as INDEPENDENT EXECUTOR
Final Judgment, Page 3
CASE NO. P9127
IN THE ESTATE OF § IN THE COUNTY COURT
§
EDELL WADE, § AT LAW
§
DECEASED § BURNETCOUNTY,TEXAS
ORDER DENYING PLAINTIFFS' MOTION
FOR JUDGMENT NOTWITHSTANDING THE VERDICT
On this / f !!day of November, 2014, came on to be considered the Plaintiffs Motion
for Judgment Notwithstanding the Verdict in the above-styled and numbered cause. The Court
has considered the Motion and finds it should be denied.
IT IS THEREFORE ORDERED that the Motion for Judgment Notwithstanding the
Verdict of the Plaintiffs, JAMES E. WADE, !iWtNC!t' BtIJiffiiR;1trul;;~M™I is hereby
Denied.e><'.e_c-lf't ?l ::i. +o A~oVe/'IJ!Jlflt.1
SIGNED THIS ~day ofQotob®F, 2014.
W.R. SAVAGE, Judge Presiding
Order Denying Plaintiffs Motion JNOV, Page 1 EXHIBIT D
CAUSE NO. P9127
ESTATE OF § IN THE COUNTY COURT AT LAW
§
EDELL WADE, § OF
§
DECEASED § BURNET COUNTY, TEXAS
'7:> ~/'/'IL H<::,
OROER~RlloNTIN6 MOTION FOR NEW TRJAL
ON THIS DAY came 10 be considered Plaintiff James Wade's Motion for New Trial (the
"Motion"). Having considered lhe Motion and the argument of counsel the Court fiAAB eeiQ......
~io~mo~
'Df tlZ-C-[J
IT IS THEREFORE ORDERED that the Motion for New Trial is GB' 'M:Flii&.
Flem ~.:;J..o~AY o~\\- 20~ AD.
)~..)`` f~A...,1Jfi_}
XAS
"F!Q)IJ-'Y~o....J=~o.ot!i-1(.-1!---DEPUTY
- I -
EXHIBIT E
CAUSE NO. P9!27
IN THE ESTATE OF § IN THE COUNTY COURT
§
EBEtt WPidence introduced here m1de1 oath
and such exhjhjts, j f any, as ha"e been introduGed for youF eonsicleFa-tion under
the rulings of the Court - that is, what you have seen and heard in this courtroom
together with the law as given you by the Court. In your deliberations, you will
not consider or discuss anything that is not represented by the evidence in this
case.
3. Since eve1y answet that is requtreQ Oy t:lle cnarge rs Important, no Juror siioula:
state or eonsidet that ru:ry tequhcd atJswer is not hnpoitant.
4. You must not decide who you think should win, and then try to answer the
questions accordingly. Simply answer the questions, and do not discuss nor
concem yourselves with the effect of your answers.
5. You wi]] not decide the answer to a question b~l lot Gt: b~l ``~[ing st:Fa¥iS, e:F by
any other method of chance. Do not return a quotient Y:erdict 8 quotient :llerdict
means that the jurors agree to abide by the result to be reached by adding together
each juror~s figures and dividing by the number of jurors to get an average. Do
not do any trading on your answers; that is, one juror should not agree to answer a
certain question one way if others will agree to answer another question another
way.
EXHIBIT F
1539
6. Unless otherwise instructed, you may answer a question upon the vot_;-nf~or
more jurors. If you answer more thJlll one question upon the vote of~or more
jurors, the same group of at least t&iil of you must agree upon the answers to each
of those questions.
These jngtnwtjons are gjven yov because your conduct is subject to r:evieu' the same as
that of the witnesses, parties, attorneys and the judge. If it should be found that you have
disregarded any of these instructions, it will be jury misconduct and it may require another trial
by another jury; then all of our time will have been wasted.
The presiding juror or any other who observes a violation of the Court's instructions shall
innnediately want tire one who is violating the srune and caution die juror not to do so again.
When words are used in this charge in a sense that varies from the meaning commonly
understood, you are given a proper legal definition, which you are bound to accept in place of
any other meaning.
Answer "Yes'' or "No" to all questions unless otherwise instructed. A "Yes" answer
must be based on a preponderance of the evtdence unless you are otherwise instructed. If you do
not hnd that a preponderance of the evtdence supports a • Yes answer, ilien answer ..No.'
The term ''preponderance of the evidence,, means the greater weight of credible evidence
admitted in this case. A preponderance of the evidence is not measured by the number of
witnesses or by the number of documents admitted in evidence. For a fact to be proved by a
preponderance of the evidence~ you must find that the fact is more likely true than not true.
Whenever a question requires an answer other than ``Yes" or "No,'~ your answer must be based
on a preponderance of the evidence unless you are otherwise instructed.t
SIGNED October fn > 2014
PRESIDING JUDGE
~ /)
````/)A JJ /_/I-/
B
{~"-:.~ , R C``TYr]EX";DEPUTY
'See Texas Pattern Jury Charge (Business, Consumer, Insurance, Empllent) ~ 12) ("PJC") I 00.3. \
2
1540
CAUSE NO. P9127
ESTATE OF § COUNTY COURT AT LAW
§
EDELL WADE, § OF
§
DECEASED § BURNET COUNTY, TEXAS
QUESTION NO. 1
A relationship of trust and confidence existed because Edell Wade justifiably placed trust
and confidence in Johnny Wade.
Did Johnny Wade's acceptance of the Modification Agreement comply with his fiduciary duty to
Edell Wade?
Because a relationship of trust and confidence existed between them, Johnny Wade owed Edell
Wade a fiduciary duty. To prove he complied with his duty, Johnny Wade must show---
a. the transaction in question was fair and equitable to Edell Wade; and
b. Johnny Wade made reasonable use of the confidence that Edell Wade placed in him; and
c. Johnny Wade acted in the utmost good faith and exercised the most scrupulous honesty
toward Edell Wade; and
d. Johnny Wade placed the interests of Edell Wade before his own, did not use the
advantage of his position to gain any benefit for himself at the expense of Edell Wade, and did
not place himself in any position where his self-interest might conflict with his obligations as a
fiduciary.
You are further instructed that a fiduciary duty owed by one person to another extends only to
dealings within the scope of the fiduciary relationship between the parties.
Answer "Yes" or "No".
Answer:&
FILEDTHISVJ~ DAYO~l1
EXHIBIT G ``~)lk````"'\:---DEPUTY
TY, TEXAS
CERTIFICATE AS TO JURY QUESTION NO. 1
We, the jury, have answered the above and foregoing question as herein indicated, and
herewith return same into Comi as our verdict.
(To be signed by the presiding juror if unanimous.)
Presiding Juror
(To be signed by those rendering if not unanimous.)
Xlo ~
CAUSE NO. P9127
ESTATE OF § COUNTY COURT AT LAW
§
EDELL WADE, § OF
§
DECEASED § BURNET COUNTY, TEXAS
QUESTION NO. 2
A relationship of trust and confidence existed because Edell Wade justifiably placed trust
and confidence in Amanda Wade.
Did Amanda Wade's acceptance of the Modification Agreement comply with her fiduciary duty
to Edell Wade?
Because a relationship of trust and confidence existed between them, Amanda Wade owed Edell
Wade a fiduciary duty. To prove she complied with her duty, Amanda Wade must show---
a. the transaction in question was fair and equitable to Edell Wade; and
b. Amanda Wade made reasonable use of the confidence that Edell Wade placed in her; and
c. Amanda Wade acted in the utmost good faith and exercised the most scrupulous honesty
toward Edell Wade; and
d. Amanda Wade placed the interests of Edell Wade before her own, did not use the
advantage of her position to gain any benefit for herself at the expense of Edell Wade, and did
not place herself in any position where her self-interest might conflict with her obligations as a
fiduciary.
You are further instructed that a fiduciary duty owed by one person to another extends only to
dealings within the scope of the fiduciary relationship between the paiiies.
Answer "Yes" or "No".
Answerf6-
CERTIFICATE AS TO JURY QUESTION NO. 2
We, the jury, have answered the above and foregoing question as herein indicated, and
herewith return same into Court as our verdict.
(To be signed by the presiding juror if unanimous.)
/
(To be signed by those rendering if not unanimous.)
CASE NO. P9127
IN THE ESTATE OF § IN THE COUNTY COURT
§
EDELL WADE, § AT LAW
§
DECEASED § BURNET COUNTY, TEXAS
If you have answered "no" to Question No. 1 or Question No. 2, then answer the
following Question. Otherwise, do not answer the following Question.
QUESTION NO. 3
What sum of money, if paid now in cash, would fairly and reasonably compensate the
Estate of Edell Wade for its damages, if any, resulting from either Johnny Wade or Amanda
Wade's failure to comply with his/her fiduciary duty to Edell Wade?
The loan modification resulted in a difference, calculated as:
a. the total amount Johnny and Amanda would have paid Mrs. Wade or her estate
under the terms of the February 6, 2004 Promissory Note, had it not been modified, from May 1,
2009throughtoday;and
~a.aa Byl.veat•"I"• Lenora, Sy1")1•Btl'lr ' Bu1:1ar. and• h11ahan~· Auatin M. 1'Ut1er.
· OareS.n S J.veatar Sta•ar.t and lmnbancl· I.:van ·11. ~tew&:l't : o. · Zell Sylve.tar
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I, Janet Parker, county Clark, Burriit'., \-· ~ 0 !. •·· : .:,•;·.
County, Texas do hereby carflty ~tnlsJ" ;\ . . ••• ,,.
I a true and correct copy as ``):if. ··. _ . .\ ::~:
record In my offi~ ~i( :
0 seal of office on ``.~ l, :
e
..
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JANET PARKE:A.P~l::f:.:..: . .. / ·
BURNET COUNT'l':ou;tt~ •·.· .• b...
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Ocoupanta ot'.Pub11o 1anda, approved May 26th, 1673• . Bea1nnins
at'at 11\4S6? ·v:r11o . N19 W.1'~om a,.p.oint;.360 v:ra-N :71B1'rona the··
··; .... w"'w aor. 'o.t,: 1'ha Bugl\ MaC~-Y-.- Blp'J "fih;,N 19. W 9.$0 vra a l!lt md
.•·•r-.. 'l')•benae a:L '9 ~z>a'l!"~ft Tl 250. ~a .a.'Medqu1te .:bra Si lil · l.62 v:r~. ·
1 : -.~'.rhenoe s·71 w·200 v:ra a· branch 9$0 .vra a at.md whence a L. o •
• " bra R 9t'E. :e16i-. 'n'll d.o .bra'N 6-3/4. E 219'1'- vi-a.
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q50 vra to the pl:aoe or b•B1.nn1ng, 'bear1nr;a miu-lted 'It.
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· •' i': ~ 'or:lg:S,Jla1' cornezoa o.t'.. aaid''orig:lnal.,'iaurve7,.t':ro111 .. whioh·~ Live ·Oak
· .,'bra. N SO W '7S . v.ra :· "'ltumoe. S 71· ·V( 9qo ;v:ra ':tio· 'a a1iontt· p1.l.e · 1'rom
• ·· ...;....,,h:lob a .}:.ive· Oall:·bra ' H !SO W. 7S'irra ... 'l'banoe 1f 19 W wi.t~ George·
• · 'Du:rt1el''a' l.:1ne. 600·..v:rs 1fo a rook md on .T. w•. Ha:rt•is South ·11ne ·
. " tr-om Whiah an lil1m bra' S :7 W. '51 'Ti's • . Th N 71 E at .l.00 vra' thtt: "
· ·' · Creek, and atl l.600' vra. • T. vr. Hart• s S. E. cor ... :troni' wh1 ah ·• •
· · , .Meaqui te b:raii N J!j W 20 yrs. apd ElJll bra N 7h E SO vra., Th S
: 19 .l!I to Meaqu:lte Cr'. and '•1.th the meanders oi the Creolt':down to
· · · whe:ra tha Oha:rl.a.a Wilson 'South 11na. araaaB'a· the• c:reek and·
.·~·, thence So.uth· 19'.E,.·With said W:ll.acn l.i:ne. 400 ~·· to the oor or
:-· ·· ". the a aniri · 'l'be. s.•~l.9 ."Jliwi th thit • or:lg:l.nal..- 11ne :~eo. v;ra ! 1io":f:he ·
...~:•. -:·..,.~·s1.nn1ng' oor.i •. oonb'a:l.n1og . ·,.,,o~p~dr'ed" aa:1:ea, 1pore ;or'·l.eaa, , ..• , .
·.' SAVE •/.ND BXOBJ;''l' 40 aal'aa, mo:re or' l.eaa, "out': a.t' th:la"Surve;y, 'the··
. aa1d i.,o acres· bellig aa rol.J.owu ·"·'Beg at' the N W oar. or 'th:la
·Bill". Th a" out 100~ard a to and · -roas Meequ:l ta Q:r. '!l'h al.or>o;
.
. th.a .N l.:lne ~Me.aqu t.--. .cr ..._t,a.. a.JL~ut ``~RO.ll1L~Oc.t'~•• .ll,e``::
~"!·•· ~-a"'ro'ok'~al.l.`` . '"sat: ·14e.q"u.1.1ie-..Ol';'o~enae a t"'oaa.~i?}1d.:te or-and . . ..
F '·" '.f "~/"s .~9.!·Jil;t'li'.bou oo"v:i'• *toJ;-the •or:l'.g:l.nal." s 'bo&Ulda:r7-·11na ·o:t thia ·. ·
·• alll've'7, '!fh:loh l.aatl DBJll&d b.o aoraa mor or l.eaa .is herel?Y reae:rove4
··~ .l : .. :1 .t:rom th11:. prorta:l ona T·or ..this . 4eed. ..,...,..- · • / ···j · / · ,. , ... . ; . • •
'··.:.,1" 'ALSO,':'BAvE 'Al'ID ~CEP'l'.• '"10 acraa • mors b:i:f·:l.a'sd, 011t. ar th• ·
'· above' nBllled 'l'hoa .. DJ.air Su:r as oanvaJ'&d by A1io7' M. Ber:rJ' and
·• ·o. L • .,.O'l'avea and'w1'te, 11. n. O:ravea ·tg' R. :,S •. 'P·. Be:rry, by dead
' >dated ~· 14·; ·:1909,. roco:rded 1n"°Vo1. '46.,'pg. '9.S;:Daed ·fteco!'da
Burnet County, Texaa 1 .daaor1bed 11"8' :f'ol.l.cwa: Al.1 thf\t certain
p:leoe, parce1 or traat ot 1and out ot· the' Thomas B1'.ai.r Sur on
Maaq111to C:r 1n 'u:rnot Count7, Texas, desaribed as :f'ol.l.cnrs:
a pnrt o1' the 1o0 acres, or the aa1'd !l'homaa B1a:l:r Sur ·oonveJ'ed
· to Al.:loe M. BerrJ' 'b7 J; w. DJ.air. and ~:lt'e.b7 the~r dead.dated
Ma,. 29th, 19Q3, :rooo:rded 1.n Vo1. 40_, .pn pii.saa 14&-8, ot: the ....
Deed Records ot Burnet'aountiy, 'T•:it••• to.which reference 1a
hare made and tlhe sai.d ,pa:rt harain conve';red ia al.1 'b1' ' the
aama wh\ah 11as on the Bast . aide o:f' the Lampasas and Austin
111"... • l'oas2,' w11~•1MiUqui4le C:r .aa the H bound1U"7 J:ine., the Chas Wi1aon~•
. ... ~ '&tit " · N~ ".own~ . . 17,y' ' J~et;Al.~x~der :,~a .' th! Eali·t · bo~&:r7 and .~e R. · i:f . ..
~ ci-1!,C~All ~4l!P.n~e_t.sqµ'\lh."1;is.a1\1``aaa~ .. and·~Au11;11`` ~he
•
· ... Ii'~ • \Ve'.ii11"'1So lli'Y~l"conJ&pin:ing ,10,..aar~_a,:.mop``· -e:t" ••" "'"-
.. being the 1dentioa1 1and oomfeyed by W11l.i.ml E111a Bin'l-7 ~1 to
A. ll. 871.veatar by deed dated . Ravembar 8, 1938 ne'gor~ 'ir1iii~l. B7
..
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~
pogea 37o-81 o:f'. the Deed Records of Burnet C0Unt7,.TlltCIB&,~ ~hich
instruments and the record thereof reference 1.s'here~d~ ~11
purposes. . · · c::: c::
The aranto:rs Manual. D111bart Sy1ve,~ar,.~enora 8y1~a~d&l~lltl.er,
Oore:ln S71veat~r Stewart, Cheater Ho~aoe 871.veate:r, · 'iiiid ``el.1
Syl.voater Ph111:lpa and the grantee Bde11 S7l.ve11tar.Wa"iF'e ~oa~1eo­
,:· tive17, a11 or the oht.adren 01' A. H. S71veate:r and wid:Ja ~
syl.veater, both deoeaaed, ,an~ . •11 are the dev1.11eaa au.a, i u e e a 1.n
the reapeot1ve w:l11s o:f' A. "H •• Sy1veater and Erahla Syl.vaat bath
~eceased, and th:la conveyance 1.a made· l'ar"the.'pu:rpaee· at ect11at1.ng
•" • ft•~ . . 1~1nn and d&v~s:lon a.t' ~3e eatatea or the ~a1d A. H. S71veatar
0
I •;.
- - - - - :··
O·. ..
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. ·' ., • : ••• 1j; •• • ·.: ....
'
.... :
and nmma 87,l.V~ater. deoeaeed, -the under•isnod arantora beraby aanv.07-
1.t\g unto tha BZ"antaea bare1n and undivided 1'1.ve-aixtba (S/f>l intereat
in \the above deao:r:1baJ! l.and., the grantee Edel.l. Sy1veater Wade owning
~ tb~ other undlv~de~ one-aUcth·(l/b) interaat t9•r~1n·aa on.a 01' 1:he
·dev'-'••e• 01' the /\. B. and Bnna 87;1.veate:r, deceased. •
~o R~'VF. "1ID ~a HOLD· the above described ~remiaea, tacetbar with .
· a11 sna. a1~ul.~r. ~lie 'lliB\'J.t• .ana· appurtenano•• thereto ·1 n anywise
•. !. be1~!;! unto the aaid . r l . e a Otta Wada and w1.1'e li:d.el.l. S;yl.veater ,
1•1F.ndW1f'~b'l•·~·iill i1PF6P~.it"~eSW``Q;,A``~.1.ndioJ>u:e.t\.,'!:r.~· ··-· ·•..
. :.t our''li•1ra,'!e;iteou~or· · ~· adlll1n1atratara,· ta-Warrari.1;!1lna"7t1r'ever • .
·• ,;::,.,_· · .De.rand.. al.l aad aingul.azo the .. 'aud prem1aea unto ~the· Sa~d Charles· Otto
r .. Wade and wi1'e Edell. 871.veater'·W•da, their ha:l.ra and aaaigna against
ever7 peraon·whcnnsoever ·1aw1'ul.l7 o~ailllina, ·or to al.aim the aame, or
any part theroo1'. . · .:
But i t i s e~praaaly·~read and atipul.ated that the ·v~ndor•a Lien
anti aupe:r1o:r titl.a are rll!tairuld o.sainat .the above aeao:ribod. property
F - i • a a· and 1.mprav•-nta> bl 1'avor o1' Manual. I>el.bert· B:rl.veater until.·
the above da•o:r1.bed no~· ·and al.1 interest thereon azoe.:tu1l.~ paid .
&.'.loordin8 to 1ta 1'aoa e.nd tenor, erreot and reading, •hen thi.a aaed
ab-11 benome 'baol.ute. · • · ·
Witnoan our hnnda.~t Lampasas, TexAa, this 1st day or a.nailrFt
A. D •.l..9$2. · . . · ..
~rR 1~ ..-i·. Suu,d J
i
~ 0. ~ _,_ . ~
·v ul. .~die. . VI t~tftl\iaiaa'li
. ,. .
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. :tn v ua 7 an aa epen en executor o;
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DA1 or Sylvaata:r, and Uil1ia Sylvester, hi• wi:ta, bat . ojiij.(">
to me to . be the 1'o:ranna "llhoae namaa are a ubaoribed·to t r..se-
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oonaiderntion therin e~praasod, and tbat ahe did not w~ah~to re-
trant i t . ·
Cl!VEJI '"!'!DEil MY J1A11D AND SBAL OF OFFICE, Thia 2btb clay 01' J&Jjlu.U-7~·.
A. D. 1953 •
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· havins·been examined b7 me pr1v1~7 and apart·trom her bu11band 1 and'
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whoae name 1.11 aubso:rlbod to the .t'o::ro5o:lhg 1.n11trument, and aolcnaw1edged
to me that he executed the e11m11 to::r tho purpo11ee . and oonelderation
expreeaod therein, and 1.n the oapaoit7 therein 11tated.
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I, Joinet Parker, County Clerk, Bumet . ~·:;•'::····· ',"···:'!,,'·
County, TeKSS do hereby certify that ,tht'il'la' . · \V
a true end correct copy as same appeill'.s'Qf. . 1.. -'- :~··~ ~ ~
record In my offic~:~ rt ·-:~ ''· ; .
·1 · • I~ _· .·. - .\: : "'.
seal of office on
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JANETPARK£R
. BUANETCOUNTYCLERK ··:; r":\ · '· ·: ...~K
:,... ... . . ·......_ 5......\='AGES
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Deputy: Jenni Ruasell
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FILED AND RECORDED
OFFICIAL. PUBLIC RECORDS
290985193
.r...,,. 88, ZH8 18:81:48 M
FKK: $49.88
~anet Parker, County Clark
Burnet eo..~ty, Texaa
SUBCHAPTER B. FORM OF STATUTORY DURABLE POWER OF
ATTORNEY
Sec. 752.051. FORM. The following form is known
as a "statutory durable power of attorney":
STATUTORY DURABLE POWER OF ATTORNEY
NOTICE: THE POWERS GRANTED BY THIS DOCUMENT ARE BROAD
AND SWEEPING. THEY ARE EXPLAINED IN THE DURABLE POWER
OF ATTORNEY ACT, SUBTITLE P, TITLE 2, ESTATES CODE. IF
YOU HAVE ANY QUESTIONS ABOUT THESE POWERS, OBTAIN
COMPETENT LEGAL ADVICE. THIS DOCUMENT DOES NOT
AUTHORIZE ANYONE TO MAKE MEDICAL AND OTHER HEALTH-CARE
DECISIONS FOR YOU. YOU MAY REVOKE THIS POWER OF
ATTORNEY IF YOU LATER WISH TO DO SO.
You should select someone you trust to serve as
your agent (attorney in fact). Unless you specify
otherwise, generally the agent's (attorney in fact's)
authority will continue until:
(1) you die or revoke the power of attorney;
(2) your agent (attorney in fact) resigns or
is unable to act for you; or
(3) a guardian is appointed for your estate.
I, __________ (insert your name and address),
appoint __________ (insert the name and address of the
person appointed) as my agent (attorney in fact) to act
for me in any lawful way with respect to all of the
following powers that I have initialed below.
TO GRANT ALL OF THE FOLLOWING POWERS, INITIAL THE
LINE IN FRONT OF (N) AND IGNORE THE LINES IN FRONT OF
THE OTHER POWERS LISTED IN (A) THROUGH (M).
TO GRANT A POWER, YOU MUST INITIAL THE LINE IN
FRONT OF THE POWER YOU ARE GRANTING.
TO WITHHOLD A POWER, DO NOT INITIAL THE LINE IN
FRONT OF THE POWER. YOU MAY, BUT DO NOT NEED TO, CROSS
OUT EACH POWER WITHHELD.
EXHIBIT I
____ (A) Real property transactions;
____ (B) Tangible personal property transactions;
____ (C) Stock and bond transactions;
____ (D) Commodity and option transactions;
____ (E) Banking and other financial institution
transactions;
____ (F) Business operating transactions;
____ (G) Insurance and annuity transactions;
____ (H) Estate, trust, and other beneficiary
transactions;
____ (I) Claims and litigation;
____ (J) Personal and family maintenance;
____ (K) Benefits from social security, Medicare,
Medicaid, or other governmental programs or civil or
military service;
____ (L) Retirement plan transactions;
____ (M) Tax matters;
____ (N) ALL OF THE POWERS LISTED IN (A) THROUGH
(M). YOU DO NOT HAVE TO INITIAL THE LINE IN FRONT OF
ANY OTHER POWER IF YOU INITIAL LINE (N).
SPECIAL INSTRUCTIONS:
Special instructions applicable to gifts (initial
in front of the following sentence to have it apply):
____ I grant my agent (attorney in fact) the power to
apply my property to make gifts outright to or for the
benefit of a person, including by the exercise of a
presently exercisable general power of appointment held
by me, except that the amount of a gift to an
individual may not exceed the amount of annual
exclusions allowed from the federal gift tax for the
calendar year of the gift.
ON THE FOLLOWING LINES YOU MAY GIVE SPECIAL
INSTRUCTIONS LIMITING OR EXTENDING THE POWERS GRANTED
TO YOUR AGENT.
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
UNLESS YOU DIRECT OTHERWISE ABOVE, THIS POWER OF
ATTORNEY IS EFFECTIVE IMMEDIATELY AND WILL CONTINUE
UNTIL IT IS REVOKED.
CHOOSE ONE OF THE FOLLOWING ALTERNATIVES BY
CROSSING OUT THE ALTERNATIVE NOT CHOSEN:
(A) This power of attorney is not affected by my
subsequent disability or incapacity.
(B) This power of attorney becomes effective upon
my disability or incapacity.
YOU SHOULD CHOOSE ALTERNATIVE (A) IF THIS POWER OF
ATTORNEY IS TO BECOME EFFECTIVE ON THE DATE IT IS
EXECUTED.
IF NEITHER (A) NOR (B) IS CROSSED OUT, IT WILL BE
ASSUMED THAT YOU CHOSE ALTERNATIVE (A).
If Alternative (B) is chosen and a definition of
my disability or incapacity is not contained in this
power of attorney, I shall be considered disabled or
incapacitated for purposes of this power of attorney if
a physician certifies in writing at a date later than
the date this power of attorney is executed that, based
on the physician's medical examination of me, I am
mentally incapable of managing my financial affairs. I
authorize the physician who examines me for this
purpose to disclose my physical or mental condition to
another person for purposes of this power of attorney.
A third party who accepts this power of attorney is
fully protected from any action taken under this power
of attorney that is based on the determination made by
a physician of my disability or incapacity.
I agree that any third party who receives a copy
of this document may act under it. Revocation of the
durable power of attorney is not effective as to a
third party until the third party receives actual
notice of the revocation. I agree to indemnify the
third party for any claims that arise against the third
party because of reliance on this power of attorney.
If any agent named by me dies, becomes legally
disabled, resigns, or refuses to act, I name the
following (each to act alone and successively, in the
order named) as successor(s) to that agent:
__________.
Signed this ______ day of __________,
_____________
________________________
___
(your signature)
State of _______________________
County of ______________________
This document was acknowledged before me on
____________(date) by ________________________
(name of principal)
___________________________
___
(signature of notarial
officer)
(Seal, if any, of notary)
________________________________________
(printed name)
My commission expires:
______________
IMPORTANT INFORMATION FOR AGENT (ATTORNEY IN FACT)
Agent's Duties
When you accept the authority granted under this
power of attorney, you establish a "fiduciary"
relationship with the principal. This is a special
legal relationship that imposes on you legal duties
that continue until you resign or the power of attorney
is terminated or revoked by the principal or by
operation of law. A fiduciary duty generally includes
the duty to:
(1) act in good faith;
(2) do nothing beyond the authority granted
in this power of attorney;
(3) act loyally for the principal's benefit;
(4) avoid conflicts that would impair your
ability to act in the principal's best interest; and
(5) disclose your identity as an agent or
attorney in fact when you act for the principal by
writing or printing the name of the principal and
signing your own name as "agent" or "attorney in fact"
in the following manner:
(Principal's Name) by (Your Signature) as Agent
(or as Attorney in Fact)
In addition, the Durable Power of Attorney Act
(Subtitle P, Title 2, Estates Code) requires you to:
(1) maintain records of each action taken or
decision made on behalf of the principal;
(2) maintain all records until delivered to
the principal, released by the principal, or discharged
by a court; and
(3) if requested by the principal, provide an
accounting to the principal that, unless otherwise
directed by the principal or otherwise provided in the
Special Instructions, must include:
(A) the property belonging to the
principal that has come to your knowledge or into your
possession;
(B) each action taken or decision made by
you as agent or attorney in fact;
(C) a complete account of receipts,
disbursements, and other actions of you as agent or
attorney in fact that includes the source and nature of
each receipt, disbursement, or action, with receipts of
principal and income shown separately;
(D) a listing of all property over which
you have exercised control that includes an adequate
description of each asset and the asset's current
value, if known to you;
(E) the cash balance on hand and the name
and location of the depository at which the cash
balance is kept;
(F) each known liability;
(G) any other information and facts known
to you as necessary for a full and definite
understanding of the exact condition of the property
belonging to the principal; and
(H) all documentation regarding the
principal's property.
Termination of Agent's Authority
You must stop acting on behalf of the principal if
you learn of any event that terminates this power of
attorney or your authority under this power of
attorney. An event that terminates this power of
attorney or your authority to act under this power of
attorney includes:
(1) the principal's death;
(2) the principal's revocation of this power
of attorney or your authority;
(3) the occurrence of a termination event
stated in this power of attorney;
(4) if you are married to the principal, the
dissolution of your marriage by court decree of divorce
or annulment;
(5) the appointment and qualification of a
permanent guardian of the principal's estate; or
(6) if ordered by a court, the suspension of
this power of attorney on the appointment and
qualification of a temporary guardian until the date
the term of the temporary guardian expires.
Liability of Agent
The authority granted to you under this power of
attorney is specified in the Durable Power of Attorney
Act (Subtitle P, Title 2, Estates Code). If you
violate the Durable Power of Attorney Act or act beyond
the authority granted, you may be liable for any
damages caused by the violation or subject to
prosecution for misapplication of property by a
fiduciary under Chapter 32 of the Texas Penal Code.
THE ATTORNEY IN FACT OR AGENT, BY ACCEPTING OR
ACTING UNDER THE APPOINTMENT, ASSUMES THE FIDUCIARY AND
OTHER LEGAL RESPONSIBILITIES OF AN AGENT.
Added by Acts 2011, 82nd Leg., R.S., Ch. 823 (H.B.
2759), Sec. 1.01, eff. January 1, 2014.
Amended by:
Acts 2013, 83rd Leg., R.S., Ch. 700 (H.B. 2918),
Sec. 1, eff. January 1, 2014.