Laura Kathleen Fielding, Administrator of the Estate of Charles W. Hodge v. Janniece Tullos ( 2018 )

In The
Court of Appeals
Ninth District of Texas at Beaumont
____________________
NO. 09-17-00203-CV
____________________
LAURA KATHLEEN FIELDING, ADMINISTRATOR
OF THE ESTATE OF CHARLES W. HODGE, Appellant
V.
JANNIECE TULLOS, Appellee
On Appeal from the 260th District Court
Orange County, Texas
Trial Cause No. D160234-C
MEMORANDUM OPINION
Appellant Laura Kathleen Fielding, Independent Administrator of the Estate
of Charles W. Hodge, Deceased, (“the Estate,” “Plaintiff,” or “Appellant”) filed the
underlying suit to set aside certain beneficiary designations made by Charles Hodge
(“Charles”). Before his death, Charles named his caretaker, Appellee Janniece
Tullos (“Tullos,” “Defendant,” or “Appellee”), as the beneficiary of two of his
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accounts located at UBS Financial Services Inc. The trial court granted a summary
judgment in favor of Tullos, from which the Estate appeals. We affirm.
Background
Charles died on December 22, 2014. His wife predeceased him. Charles and
his wife had no children. Charles’s Last Will and Testament executed in November
2004 was filed for probate, and the Judgment Declaring Heirship named six heirs—
all nieces and nephews—each with a one-sixth share in Hodge’s estate: Laura
Kathleen Fielding, Renee Pomonis, Lori Park, Joe David Hodge, Gary Hodge, and
George Bishop. The probate court named Fielding as the administrator of Charles’s
estate.
Tullos worked as a caretaker for Charles and his wife, O.V. Tullos began
working for O.V. in August 1997, and she continued working for Charles after
O.V.’s death in 2004. Charles needed assistance at home because of mobility
limitations and a history of many surgeries. While working for O.V., Tullos was at
the house four days a week, but after O.V. died, Tullos was usually at Charles’s
house seven days a week.
On November 30, 2004, Charles executed an Account Application and
Agreement for Individuals and Custodial Accounts (“Account Application”) for his
Retail Management Account (“the RMA account”) with UBS Financial Services Inc.
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(“UBS”). On that same day, Charles also executed an IRA Beneficiary Designation
Update Form for an IRA account with UBS (“the IRA account”). In the IRA
Beneficiary Designation Update Form, Charles named his sister, Shirley Wood, as
primary beneficiary, and Charles named E.J. Wood, Charles’s brother-in-law, and
Tullos as 50% contingent beneficiaries. On May 18, 2011, Charles executed another
IRA Beneficiary Designation Update Form for the IRA account, in which Charles
named Tullos primary beneficiary and Shirley Wood as contingent beneficiary. Also
on May 18, 2011, Charles executed a Transfer on Death Agreement for the RMA
account in which Charles named Tullos as the sole beneficiary.
Plaintiff’s Original Petition
On August 4, 2016, Fielding, as Independent Administrator of Charles’s
estate, filed a verified Original Petition and Application for Temporary Restraining
Order and Temporary Injunction against Tullos. Plaintiff alleged that at the time of
his death, Charles had about $1,699,000 in his UBS accounts. Plaintiff sought a
judgment declaring that all financial accounts, including the two UBS accounts, are
“properly payable” to Charles’s estate or that all changes to Charles’s financial
accounts, including the UBS accounts, “are void and all such funds and assets are
properly payable” to Charles’s estate. Plaintiff alleged that Charles lacked capacity
to make any transactions, to change beneficiary designations, or to enter into a
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contract. Plaintiff also alleged that any transactions, beneficiary designations, or
changes in beneficiary designations to Charles’s accounts were executed as the result
of undue influence. Plaintiff asserted a claim for tortious interference with
inheritance rights and unjust enrichment. Plaintiff also alleged that there should be
a deferral of the accrual of limitations, and that the suit was filed within four years
of Plaintiff’s knowledge of facts that would lead a reasonably prudent person to
discover Defendant’s wrongful acts.
Plaintiff also requested a temporary restraining order and a temporary
injunction to prevent Tullos from transferring or disposing of funds and assets that
are the subject of the litigation, and from destroying or altering communications.
Defendant’s Objections, Motion to Strike, and Answer
Tullos objected to the application for a TRO and temporary injunction and
filed a motion to strike. Defendant alleged that Plaintiff’s petition did not include
specific facts showing immediate irreparable harm, and that Plaintiff failed to allege
facts supporting the claim that Tullos would deplete the accounts or supporting
Plaintiff’s claims of undue influence, tortious interference with inheritance rights, or
unjust enrichment. Defendant moved to strike Plaintiff’s pleadings seeking a
declaratory judgment, arguing that a declaratory judgment cannot be used to decide
tort liability and that there was no claim or proof that the beneficiary designations
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are unclear, ambiguous, or not what they purport to be. Defendant also alleged that
Plaintiff is not entitled to attorney’s fees.
Defendant filed an Original Answer which included a general denial, an
objection to Plaintiff’s request for a TRO and temporary injunction, and special
exceptions. Defendant also demanded a jury trial.
Plaintiff’s Amended Original Petition
Plaintiff filed a First Amended Original Petition (“Amended Petition”).
Plaintiff alleged that a formal or informal fiduciary relationship existed between
Charles and Tullos and that the fiduciary relationship “gives rise to a presumption
of undue influence that shifts the burden of proof” on undue influence to Tullos.
Plaintiff alleged that Tullos used her position as caretaker and fiduciary to
manipulate Charles for her own financial gain and that, but for Tullos’s undue
influence, Charles would not have named Tullos as beneficiary of his accounts.
Plaintiff argued that the “Deferral of Accrual of Limitations Doctrine” applied, and
she sought a declaratory judgment, alleged that Tullos had been unjustly enriched,
and sought damages, costs, and attorney’s fees.
Defendant’s Answer to the Amended Petition
The Defendant filed an answer to the amended petition. The Defendant
asserted a general denial, denied that there was any “undue influence,” denied the
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existence of either a formal or informal fiduciary relationship, and asserted several
affirmative defenses. The defendant alleged that Plaintiff’s claims are barred by the
statute of limitations, that Charles intended to transfer the funds on his death to
Tullos as a gift, that Plaintiff has unclean hands, and that Plaintiff’s claims are barred
by ratification. The Defendant also included special exceptions. The Defendant
alleged that Plaintiff failed to state what breach of fiduciary duty by the Defendant
caused injury to the Plaintiff, Plaintiff failed to state facts to support a claim of undue
influence, and Plaintiff is not entitled to a declaratory judgment or attorney’s fees
and costs. And the Defendant asserted a counterclaim for attorney’s fees and costs.
Defendant’s First Motion for Summary Judgment
The Defendant filed her first motion for summary judgment on March 10,
2017. The Defendant argued that Plaintiff’s claims for undue influence and unjust
enrichment are barred by the statute of limitations because Plaintiff’s complaints
pertain to beneficiary designations executed in 2004 and 2011, and the alleged injury
that is the basis of the lawsuit is not inherently undiscoverable. The Defendant
argued that the evidence demonstrates Tullos did not exert undue influence over
Charles. Tullos argued that Charles had made it clear to his financial advisors that
he intended to leave Tullos the funds in his UBS accounts, Tullos cared for Charles
daily for ten years, Charles had “no relationship” with three of his nieces and
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nephews and only a limited relationship with the others, and none of the nieces or
nephews had helped care for Charles. According to Tullos, Fielding admitted in her
deposition that she did not have personal knowledge to support the claim of undue
influence and Fielding could not provide any examples of how Tullos exerted undue
influence over Charles. Citing deposition testimony of Tullos, and also of Gretchen
Hargroder and Richard Ridley, two UBS financial advisors, Tullos argued that she
was not involved in Charles’s finances, she did not review his bank statements and
was unaware of the specifics of the UBS accounts, and she was generally
uninterested in the UBS accounts, although she drove Charles to UBS so that Charles
could transact business.
Defendant’s Motion for Summary Judgment on Fiduciary Relationship
The Defendant filed a second motion for summary judgment on March 14,
2017, in which she argued that Plaintiff cannot establish the existence of a fiduciary
relationship and there is no evidence that Charles relied on Tullos for any judgment
or advice. Defendant argued that there was no transaction between Charles and
Tullos, no undue influence exerted by Tullos over Charles, and any presumption of
unfairness does not apply. Quoting deposition testimony of Gretchen Hargroder,
Tullos argued that Charles was “in charge of his accounts, and he made the decisions
on the accounts. [Tullos] had no -- she had no influence or input on those decisions
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whatsoever.” Defendant also argued that, even if a fiduciary relationship existed
between Charles and Tullos, the beneficiary designations at issue do not arise from
a transaction between Charles and Tullos, and there is no presumption of unfairness
and the burden of proof on undue influence would not shift to the Defendant.
Plaintiff’s Response to the Motions for Summary Judgment
Plaintiff filed a joint response to both motions for summary judgment.
Plaintiff argued that the causes of action for undue influence and unjust enrichment
accrued upon Charles’s death, or in the alternative, that the deferral of the accrual of
limitations doctrine applies, so that Plaintiff’s causes of action accrued when
Plaintiff learned of Defendant’s actions. According to Plaintiff, “[i]t is fundamental
that an undue influence cause of action for a beneficiary designation does not accrue
until the death of the person [] who was unduly influenced.” Plaintiff also argued
that undue influence is a type of fraud and that deferral of accrual of limitations
applies in causes of action for fraud. Plaintiff argued in the alternative that for a
cause of action based on undue influence, the statute of limitations is tolled until the
undue influence ceases to exist at the time of Charles’s death.
Plaintiff also argued that the summary judgment evidence establishes that a
fiduciary relationship existed between Charles and Tullos, which results in a
presumption of undue influence, and that the Defendant has the burden of proof to
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establish that she did not unduly influence Hodge to sign the beneficiary
designations. Plaintiff argued that Defendant cannot meet her burden of proof on
undue influence and that fact issues exist on undue influence and unjust enrichment.
Plaintiff also argued that the evidence establishes that an informal fiduciary
relationship existed between Charles and Tullos because: Tullos was a caretaker for
the Hodges for seventeen years, and she was with Charles daily for ten years until
his death; Charles trusted and had confidence in Tullos; Tullos wrote out Charles’s
checks and made all his bank deposits; Tullos added Charles to her cell phone
account; Tullos was on Charles’s Bank of America, Discover, and Chase Freedom
credit card accounts and used these accounts to buy groceries, gasoline, and sundries;
and, when Charles was hospitalized, he left Tullos with signed blank checks.
Plaintiff also argued that the evidence establishes the existence of a formal
fiduciary relationship between Charles and Tullos. Plaintiff noted that on November
30, 2004, Charles and Tullos signed an “Account Application and Agreement for
Individuals and Custodial Accounts” for Charles’s RMA account, and that under
Tullos’s signature the word “agent[]” appears. Plaintiff also noted that on February
14, 2014, Charles executed a Power of Attorney for his UBS accounts naming Tullos
as his agent. Citing Tullos’s deposition, Plaintiff explained that when Charles signed
the Power of Attorney, Charles was in a nursing home recuperating from an incident
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of cardiac arrest. According to the Plaintiff, the deposition testimony of Hargroder
also showed that Hargroder had explained to Tullos that Tullos would be Charles’s
agent under the Power of Attorney. Citing Johnson v. Brewer & Pritchard, P.C., 73
S.W.3d 193, 200 (Tex. 2002) and Kinzbach Tool Co. v. Corbett-Wallace Corp., 160
S.W.2d 509, 512 (Tex. 1942), Plaintiff argued that “Texas law provides that an agent
is a formal fiduciary to her principle [sic].”
The Plaintiff also argued that “abundant circumstantial evidence” proves
undue influence. Citing Rothermel v. Duncan, 369 S.W.2d 917 (Tex. 1963) and
Mackie v. McKenzie, 900 S.W.2d 445 (Tex. App.—Texarkana 1995, writ denied),
Plaintiff argued that “[t]he summary judgment circumstantial evidence supports all
of the[] Rothermel factors and establishes that Charles W. Hodge was unduly
influenced into executing the May 18, 2011 UBS beneficiary designation.”
According to the Plaintiff, the circumstances surrounding the execution of the
beneficiary designations provides evidence that Charles was unduly influenced by
Tullos. Plaintiff emphasized that in her deposition testimony, Tullos explained that
she drove Charles to UBS on November 30, 2004, when Charles executed the IRA
Beneficiary Designation Update Form that named Tullos as a 50% contingent
beneficiary, and where Charles and Tullos signed the Account Application for the
RMA account. According to the Plaintiff, the execution of the May 18, 2011
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beneficiary designation for the UBS accounts also demonstrated that Charles
executed the change in the car in the UBS parking lot while Tullos was in the car, as
explained in the deposition testimony of Hargroder and Ridley.
Plaintiff argued that Tullos worked for Charles seven days a week after his
wife died, and Charles spent holidays and celebrated birthdays with Tullos and her
family. According to the Plaintiff, the evidence suggested that Tullos “desired the
funds” in Charles’s UBS accounts because on December 17, 2014, Tullos used her
power of attorney to take $20,000 out of Charles’s account and put it into her own
savings account; and, on January 16, 2015, she took out $348,081.91 from the UBS
accounts, she used $30,000 to buy a new car, she gave each of her children $100,000,
she bought new furniture, and she paid her property taxes. According to the Plaintiff,
Tullos had “unlimited opportunities” to influence Charles because: she was at his
home every day of the week, she wrote all of his checks, she made his bank deposits,
Charles left her signed blank checks when he was hospitalized, and he celebrated
holidays and birthdays with Tullos and her family. Plaintiff also argued that Tullos’s
own deposition testimony shows that Charles had multiple medical issues and had
undergone seventeen major surgeries, rendering him unable to drive and “totally
dependent” on Tullos. Finally, Plaintiff argued that Charles’s Will provided that if
his wife did not survive him, his estate should be divided equally between Shirley
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and E.J. Wood or their heirs, but “[a]s a result of Defendant’s actions, the vast
majority of Charles Hodge’s assets were not distributed in accordance with his
testamentary wishes.”
Plaintiff filed an Amended and Supplemental Response to the motions for
summary judgment. In addition to re-urging the arguments in Plaintiff’s first
response, Plaintiff also argued that Charles took numerous medications for many
years, some of which have side effects including memory impairment and confusion,
and the medications “made him more susceptible to undue influence” by Tullos.
Plaintiff argued that Defendant’s reliance on the testimony of Richard Ridley and
Gretchen Hargroder “is misplaced[]” because when Charles executed the May 18,
2011 beneficiary designation, Ridley and Hargroder had only been acquainted with
Charles for a month, and another financial advisor, Sammy Page, had served Charles
before April 20, 2011.1 Plaintiff also alleged that Ridley and Hargroder had only met
with Charles once before May 18, 2011.
Defendant’s Reply
Defendant filed a reply brief. The Defendant argued that the Plaintiff had
“shift[ed] gears” by arguing fraud and fraudulent concealment and that the Plaintiff
1
Plaintiff included no deposition testimony of Sammy Page, and the record
does not suggest Page was deposed.
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had not pleaded such claims. Defendant also argued that Plaintiff had failed to
respond to Defendant’s motion for summary judgment on “fiduciary duty,” and
because there is no evidence that Defendant breached any fiduciary duty, Defendant
is entitled to summary judgment on any claim for fiduciary duty. Defendant alleged
that Plaintiff’s amended petition includes a judicial admission that the complained-
of conduct occurred in 2004 and 2011, and that as a matter of law, the limitations
period begins to run when the wrongful conduct occurs. Defendant also argued that
there is no evidence of any transaction between Charles and Tullos which is
necessary to support a claim of breach of fiduciary duty and a presumption of
unfairness. Defendant argued that the summary judgment evidence of undue
influence is legally insufficient, and that Plaintiff merely presented evidence of the
opportunity for influence.
Hearing and Final Judgment
The court held a hearing on the motions for summary judgment. At the
hearing, Plaintiff’s counsel explained that his client is not asserting a claim for a
breach of fiduciary duty, but his client is alleging that a fiduciary duty existed, which
means there is a presumption of undue influence. Plaintiff argued that the Plaintiff
need only present “some evidence” of a fiduciary relationship and then the burden
of proof shifts to Tullos to disprove undue influence, and according to the Plaintiff,
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the 2004 Account Application document, where Tullos signed as “agent,” is some
evidence of a fiduciary relationship between Tullos and Charles.
At the end of the hearing, the trial court explained that it was going to grant
the motion for summary judgment and stated:
Well, I have spent a lot of time in reading up on all of your
positions. I can’t say I’ve read all of the depositions or whatever, but
I’ve read what has been attached to the motions. And it seems clear to
me that there was, as you say, every opportunity for Ms. Tullos to have
undue influence on Mr. Hodge. There was every opportunity for that to
happen because she was with him basically all day for a number of
years, but I don’t see any evidence that she did that. Certainly there was
evidence she could have, but I don’t see any evidence that she did. I
don’t think there was a fiduciary relationship there where he had
complete trust in her. And she did sign some checks and she did do
some things for him and he never tried to write a will that named her or
whatever.
So, based upon all I’ve read and the evidence I’ve heard, I don’t
see the fact issue; and I’m going to grant the motion for summary
judgment.
On May 4, 2017, the trial court signed a Final Judgment granting Defendant’s
Motion for Summary Judgment, stating the motion “addressed all of Plaintiff’s
causes of action and claims for relief[.]” The Final Judgment ordered that Plaintiff
take nothing, denied all of Plaintiff’s requested relief, and it “dispose[d] of all claims
and all parties[.]” Plaintiff timely filed a notice of appeal.
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Issues
Appellant raises three issues on appeal. In her first issue, Appellant argues
that the trial court erred in granting Appellee’s motions for summary judgment
because Appellee failed to overcome the presumption of undue influence, failed to
prove as a matter of law that she did not unduly influence Charles to sign the
beneficiary designation, and failed to prove as a matter of law that Appellee did not
have an informal and formal fiduciary relationship with Charles. In her second issue,
Appellant argues that there are genuine issues of material fact about whether
Appellee unduly influenced Charles and the fact issues preclude summary
judgement. Appellant’s third issue argues that Appellee’s limitation defense is
inapplicable as a matter of law.
Standard of Review
When it is not readily apparent that the movant seeks a summary judgment on
no-evidence grounds, “the court should presume that it is filed under the traditional
summary judgment rule and analyze it according to those well-recognized
standards.” Richard v. Reynolds Metal Co., 108 S.W.3d 908, 911 (Tex. App.—
Corpus Christi 2003, no pet.) Accordingly, we construe Defendant’s Motions for
Summary Judgment as asserting traditional grounds for summary judgment. See
Tex. R. Civ. P. 166a.
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We conduct a de novo review of an order granting a traditional motion for
summary judgment. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211,
215 (Tex. 2003). We deem as true all evidence that is favorable to the nonmovant,
indulge every reasonable inference to be drawn from the evidence, and resolve any
doubts in the nonmovant’s favor. Valence Operating Co. v. Dorsett, 164 S.W.3d
656, 661 (Tex. 2005). When a trial court does not specify the grounds on which it
granted the motion for summary judgment, we must affirm if any of the grounds
asserted in the motion are meritorious. Merriman v. XTO Energy, Inc., 407 S.W.3d
244, 248 (Tex. 2013).
To be entitled to a traditional summary judgment, a movant must establish
that there is no genuine issue of material fact and that the movant is entitled to
judgment as a matter of law on the issues set forth in the motion. Tex. R. Civ. P.
166a(c); Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844,
848 (Tex. 2009). Generally, a defendant needs to conclusively negate at least one
essential element of each of the plaintiff’s causes of action or conclusively establish
each element of an affirmative defense to succeed on a traditional motion for
summary judgment. Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex.
1997). “Evidence is conclusive only if reasonable people could not differ in their
conclusions[.]” City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005). Once the
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party moving for summary judgment has established its right to summary judgment
as a matter of law, the nonmovant must present evidence raising a genuine issue of
material fact to avoid the motion being granted. See City of Houston v. Clear Creek
Basin Auth., 589 S.W.2d 671, 678-79 (Tex. 1979).
On a traditional motion for summary judgment, a nonmovant need not file an
answer or response to a motion for summary judgment in order to challenge the
sufficiency of the evidence relied on by the movant. See Fantastic Homes, Inc. v.
Combs, 596 S.W.2d 502, 502 (Tex. 1979) (citing Clear Creek Basin Auth., 589
S.W.2d at 678). We may consider only the grounds expressly set forth in the motion
for summary judgment and the issues of fact expressly set forth in the response.
McConnell v. Southside Indep. Sch. Dist., 858 S.W.2d 337, 341-43 (Tex. 1993).
Undue Influence, Burden of Proof, and Fiduciary Relationship
The party contesting a will or payable-on-death provision or beneficiary
designation based on a claim of undue influence bears the burden of proving undue
influence. Rothermel, 369 S.W.2d at 922; Quiroga v. Mannelli, No. 01-09-00315-
CV, 2011 Tex. App. LEXIS 1959, at *12 (Tex. App.—Houston [1st Dist.] Mar. 17,
2011, no pet.) (mem. op.). Undue influence is a form of fraud, and the term describes
the wrongful use of influence, such as through force, intimidation, duress, or
deception, to cause the execution of a will that is contrary to the testator’s desire for
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the distribution of his or her property after death. In re Estate of Butts, 102 S.W.3d
801, 803 (Tex. App.—Beaumont 2003, pet. denied) (majority of the Beaumont Court
concluded the trial court properly granted summary judgment as to contestants’
claims challenging decedent’s will and alleging undue influence). In an undue
influence claim, the evidence must show not only the presence of the opportunity to
influence, but also that improper influence was exerted on the decedent at the time
the beneficiary designation or will was made. Id. Simply because the beneficiary had
a close relationship with the decedent or otherwise was present for the execution of
an instrument, it does not establish proof of undue influence. See Guthrie v. Suiter,
934 S.W.2d 820, 832 (Tex. App.—Houston [1st Dist.] 1999, no writ); Evans v. May,
923 S.W.2d 712, 715 (Tex. App.—Houston [1st Dist.]1996, writ denied). A person
may request or entreat another person to create a favorable dispositive instrument,
but unless the entreaties are shown to be so excessive as to subvert the maker’s will,
they do not constitute undue influence that invalidates the will. See In re Estate of
Kam, 484 S.W.3d 642, 653 (Tex. App.—El Paso 2016, pet. denied); In re Estate of
Sidransky, 420 S.W.3d 90, 95 (Tex. App.—El Paso 2012, pet. denied). The
contestant must prove the existence and exertion of an influence that subverted or
overpowered the testator’s mind when the testator executed the document so that the
testator executed the document in a manner that he otherwise would not have
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executed but for such influence. Rothermel, 369 S.W.2d at 922; Long v. Long, 196
S.W.3d 460, 467 (Tex. App.—Dallas 2006, no pet.).
Plaintiff contends there was either a formal or informal fiduciary relationship
between the testator and the beneficiary. Plaintiff argues that the fiduciary
relationship also carries a presumption of undue influence, which then shifted the
burden of proof onto the Defendant to prove she did not engage in undue influence.
See, e.g., In re Estate of Pilkilton, No. 05-11-00246-CV, 2013 Tex. App. LEXIS
1080, at *3 (Tex. App.—Dallas Feb. 6, 2013, no pet.) (mem. op.) (citing Spillman v.
Spillman’s Estate, 587 S.W.2d 170, 172 (Tex. Civ. App.—Dallas 1979, writ ref’d
n.r.e.); Price v. Taliaferro, 254 S.W.2d 157, 163 (Tex. Civ. App.—Fort Worth 1952,
writ ref’d n.r.e.)); Rounds v. Coleman, 189 S.W. 1086, 1089 (Tex. Civ. App.—
Amarillo 1916, no writ) (“Where an antecedent fiduciary relation exists, a court of
equity will presume confidence placed and influence exerted.”); see also Quiroga,
2011 Tex. App. LEXIS 1959, at **12-13 (explaining that the person challenging the
validity of the instrument generally bears the burden of proving elements of undue
influence, but noting that “[i]n some cases involving confidential or fiduciary
relationships, . . . the burden shifts to the person receiving the benefit to prove the
fairness of the transaction”).
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Fielding had the burden of establishing that a fiduciary relationship existed
between Tullos and Charles. See In re Estate of Coleman, 360 S.W.3d 606, 611 (Tex.
App.—El Paso 2011, no pet.). Once a contestant presents evidence of a fiduciary
relationship, a presumption of undue influence may arise and the other party then
bears the burden to come forward with evidence to rebut the presumption. Estate of
Pilkilton, 2013 Tex. App. LEXIS 1080, at *31 (citing Spillman, 587 S.W.2d at 172;
Price, 254 S.W.2d at 163); see also Quiroga, 2011 Tex. App. LEXIS 1959, at **12-
13.
Such a rebuttable presumption shifts the burden of producing evidence to the
party against which it operates. See Hot-Hed, Inc. v. Safehouse Habitats (Scotland),
Ltd., 333 S.W.3d 719, 730 (Tex. App.—Houston [1st Dist.] 2010, pet. denied); Long
v. Long, 234 S.W.3d 34, 37 (Tex. App.—El Paso 2007, pet denied); All Am. Builders,
Inc. v. All Am. Siding, Inc., 991 S.W.2d 484, 489 (Tex. App.—Fort Worth 1999, no
pet.) (citing Gen. Motors Corp. v. Saenz, 873 S.W.2d 353, 359 (Tex. 1993)). Once
evidence contradicting the presumption has been offered, the presumption is
extinguished. Id. The case then proceeds as if no presumption ever existed. See Tex.
Nat. Res. Conservation Comm’n v. McDill, 914 S.W.2d 718, 724 (Tex. App.—
Austin 1996, no writ). A rebuttable presumption does not shift the ultimate burden
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of proof. See Garza v. Mission, 684 S.W.2d 148, 152 (Tex. App.—Corpus Christi
1984, writ dism’d w.o.j.); see also Saenz, 873 S.W.2d at 359.
The Plaintiff acknowledges the Estate did not state a claim for breach of a
fiduciary duty, however the Plaintiff argues that a fiduciary relationship existed
between Charles and Tullos, the effect of which is to shift the burden of proof onto
Tullos to disprove undue influence. Assuming without deciding that Tullos owed
Charles a fiduciary duty, it would not shift the ultimate burden of proof in the case
to Tullos, but it would invoke the application of a rebuttable presumption. Tullos
could rebut the presumption by coming forward with evidence showing the fairness
of the transaction. See Young v. Fawcett, 376 S.W.3d 209, 216 (Tex. App.—
Beaumont 2012, no pet.); Vogt v. Warnock, 107 S.W.3d 778, 784 (Tex. App.—El
Paso 2003, pet. denied). If Tullos’s summary judgment evidence contradicted the
presumption, the presumption was extinguished. Plaintiff retained the ultimate
burden of proof on her claims. See Saenz, 873 S.W.2d at 359.
Appellant’s Argument
Appellant argues that the trial court erred in granting summary judgment in
favor of the Appellee because “genuine issues of material facts exist that Appellee
unduly influenced Charles Hodge.” According to Appellant, “circumstantial
summary judgment evidence” supports all the factors outlined in Rothermel. See 369
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S.W.2d 917. Appellant argues that considering the evidence in a light most favorable
to Appellant, the non-movant, the summary judgment evidence establishes fact
issues that preclude summary judgment on the undue influence claim.
Undue Influence
In Texas, the rules guiding a determination of the existence of undue influence
apply substantially alike to wills, deeds, and other instruments. Bradshaw v.
Naumann, 528 S.W.2d 869, 871 (Tex. Civ. App.—Austin 1975, writ dism’d). To set
aside an instrument based on undue influence, the party claiming undue influence
must prove (1) the existence and exertion of an influence; (2) the effective operation
of such influence so as to subvert or overpower the mind of the property owner at
the time the instrument was executed; and (3) the execution of an instrument that the
property owner would not have executed but for such influence. See Rothermel, 369
S.W.2d at 922.
To satisfy the first element, the party contesting an instrument must show that
an undue influence existed and was exerted. Id. The contesting party focuses on facts
showing the opportunities for the exertion of the alleged influence, the circumstances
of the drafting and execution of the instrument, the existence of a fraudulent motive,
and whether the person executing the instrument was habitually under the control of
another. Id. at 923. The exertion of influence, however, cannot be inferred from
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opportunity alone, such as might result from taking care of the property owner or
seeing to his needs. Id. There must be proof showing both that the influence existed
and that it was exerted. Id.
To satisfy the second element, the contesting party must show that the exertion
of the influence subverted or overpowered the mind of the property owner at the
time he signed the instrument. Id. at 922. The focus of this element is on the property
owner’s state of mind and evidence relating to his ability to resist or susceptibility
to the influence of another, such as mental or physical infirmity. Id. at 923. But
evidence that a property owner was susceptible to influence or incapable of resisting
it does not prove that his free will was in fact overcome when the instrument or act
of the owner was made. Id.; Guthrie, 934 S.W.2d at 832. Likewise, a close
relationship or the fact the other party was a caretaker would not be sufficient to
show undue influence. See, e.g., Guthrie, 934 S.W.2d at 832; Evans, 923 S.W.2d at
715. Influence is “undue” when the property owner’s volition is destroyed and the
resulting instrument expresses the wishes of the one exerting the influence.
Rothermel, 369 S.W.2d at 922. Undue influence may include force, intimidation,
duress, persistent requests or demands, or deceit. Id.
To meet the third element, the contesting party must show that the property
owner would not have executed the challenged instrument but for the undue
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influence. Id. In general, this element focuses on whether the instrument makes an
unnatural disposition of property. Id. at 923. A disposition may be unnatural, for
example, if it excludes a property owner’s natural heirs or favors one heir at the
expense of others who ordinarily would receive equal treatment. See Long v. Long,
125 S.W.2d 1034, 1036 (Tex. 1939). Even so, the disinheritance of close relatives
or loved ones is not necessarily unnatural. See, e.g., Guthrie, 934 S.W.2d at 832
(exclusion of testator’s only living son from will not unnatural given strained and
distant relationship between him and his mother). A property owner’s preference for
one beneficiary over others may be unnatural if the record does not disclose a
reasonable basis for the preference or contains proof that calls the preference into
question or discredits it. See Rothermel, 369 S.W.2d at 923-24; Curry v. Curry, 270
S.W.2d 208, 213 (Tex. 1954); Craycroft v. Crawford, 285 S.W. 275, 278-79 (Tex.
1926).
The person challenging the validity of an instrument generally bears the
burden of proving the elements of undue influence by a preponderance of the
evidence. Evans, 923 S.W.2d at 715. Undue influence may be established by
circumstantial evidence, but such evidence must be probative of the issue and not
merely create a surmise or suspicion that such influence existed at the time the
document was executed. Id.; Guthrie, 934 S.W.2d at 831 (citing Reynolds v. Park,
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485 S.W.2d 807, 813 (Tex. Civ. App.—Amarillo 1972, writ ref’d n.r.e.)). Undue
influence cannot be inferred by opportunity alone, and there must be some evidence
to show that the influence was not only present, but that it was in fact exerted with
respect to the execution of the challenged instrument itself. See In re Estate of
Sidransky, 420 S.W.3d at 96 (citing Cotten v. Cotten, 169 S.W.3d 824, 827 (Tex.
App.—Dallas 2005, pet. denied)).
Deposition Testimony
In her deposition, Tullos testified that she worked for Charles seven days a
week, her duties included cleaning, cooking, driving for Charles, and accompanying
him on doctors’ appointments, and that Charles had mobility issues that required
him to use a cane or walker. Tullos explained that she would write out checks for
Charles, and he would sign them, but he reviewed his bank statements himself.
Tullos used Charles’s credit cards for groceries, gasoline, and at the drugstore, and
she had a card tied to Charles’s Discover and Chase accounts. Tullos testified that
Charles sometimes paid for her income tax preparation, she put Charles on her cell
phone account, and she and Charles would alternate paying the cell phone bill.
According to Tullos, Charles also spent holidays with her family as well as attended
her grandchildren’s birthdays.
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Tullos agreed that Charles trusted her and had confidence in her. Tullos did
not recall whether she was present when the 2004 beneficiary designation was
executed. According to Tullos, the first time she knew she was the beneficiary on
Charles’s UBS accounts was on December 17, 2014. Tullos acknowledged her
signature was on the 2004 Account Application form, but she did not know who
wrote in “agent” on the form. Tullos agreed that, following Charles Hodge’s death,
she used about $30,000 from the UBS accounts to buy a new car, gave each of her
children $100,000, paid about $4500 for new furniture, and paid her property taxes
with the money.
Gretchen Hargroder testified in her deposition that UBS provides training on
how to identify vulnerable or incapacitated clients. She explained that she had never
seen any indication that Tullos was exerting an improper influence over Charles
regarding his business affairs and she did not see any indication that Charles was a
“vulnerable client[.]” According to Hargroder, she encouraged Charles to name
someone as having his power of attorney when he was in a rehabilitation facility in
2014, and he voluntarily named Tullos in the power of attorney. Hargroder explained
that she and Ridley met with Charles about twice a year and that Tullos “was almost
always there, but [Tullos] would pretty much excuse herself from the conversations
once it turned into a conversation about his accounts.”
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Hargroder regarded Charles as intelligent and informed about investments
generally, and she thought that he seemed to understand the nature of his accounts.
She also did not regard Charles as lacking mental capacity or to be “heavily
medicated” but thought Charles “always appeared . . . to be in charge of his faculties
and he didn’t appear to be functioning with any dementia or influence[.]” Hargroder
explained that, although Charles would sometimes invite Tullos to sit in on meetings,
Charles “was in charge of his accounts, and he made the decisions on the accounts.
[Tullos] had no . . . influence or input on those decisions whatsoever.” Hargroder
never observed Tullos telling Charles what to do about his financial accounts, and
she explained that Tullos was not curious about the accounts and Tullos did not want
to be involved with Charles’s finances. Hargroder testified that she recalled Charles
saying he would like to help his nephew George Bishop, but Charles did not think
giving the nephew money would be helpful because, according to Charles, George
had a drug problem.
Hargroder explained:
Q. Okay. So, when we’re talking about Account No. [] -- that’s the
transfer on death agreement -- Mr. Hodge indicated that he wanted
Janniece Tullos to be his beneficiary; is that correct?
A. He did.
Q. And did he ever tell you that in person?
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A. He did.
Q. Did he tell you why he wanted her to be his beneficiary?
A. Because she took care of him and she was there for him and she took
him to all his appointments and she -- you know, she was the one who
cared for him.
Q. And do you know how long she had cared for him?
A. I know she took care of his late wife, and I think that she took care of
him from the time that his wife died.
Q. It was for a number of years; is that right?
A. Yes. Yes, it would have been a number of years.
Richard Ridley testified that he never saw any indication that Charles lacked
the mental capacity to understand his UBS accounts. Ridley testified that Charles
appeared to have an understanding of investments that was “way above average.”
Ridley also did not recall ever seeing Charles under the influence of medication.
Ridley explained that Charles broached the subject of changing his beneficiary
designations in 2011 because E.J. Wood had died and Charles thought Shirley would
not live long. According to Ridley, Charles told him “‘I do not think my sister is
going to last a long time; and I would like you to make Janniece Tullos the
beneficiary on both of the accounts.’” Ridley explained that when Tullos drove
Charles to the UBS office, Ridley offered to come out to Charles’s car with a notary
because it might be easier for Charles, and Charles agreed and executed the
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documents in the car in front of the notary. Ridley testified that he asked Charles
“You know, Charles, between these two accounts, this is a great deal of money, in
my opinion. Are you -- are you certain this is what you want to do?,” and Charles
replied “Yes, it is.” Ridley explained:
I will repeat that I never felt in my dealings with Charles that he
was out of control in any manner. He was always levelheaded. Charles
was someone who . . . liked to talk about his investments. He enjoyed
talking about them. And he was a pretty sharp fellow. . . . I never saw
any incapacitation whatsoever, in person or on the phone.
Ridley did not believe that Tullos ever tried to interfere in Ridley’s
relationship with Charles. Ridley explained that he reviewed the beneficiary
designations after some time and concluded that designating Tullos as beneficiary
“was perhaps proper because the relationship seemed to be a very fond relationship.”
Laura Fielding testified in her deposition that she lacked personal knowledge
of any undue influence by Tullos:
Q. But, first, I want to know if you know anything, anything that you’ve
observed yourself; and then we’ll go to other people?
A. About undue influence?
Q. Yes.
A. I don’t -- I don’t know how to word this.
Q. Well, do the best you can.
A. (No response)
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Q. Or if you don’t know, you can -- that’s a perfectly good answer.
A. I’m just going to say I don’t know.
Q. All right.
A. At this moment I don’t know.
Fielding and Joe Hodge also testified that they had no personal knowledge that
Charles lacked mental capacity.
Fielding testified that the last time she spent time with Charles was in 2011 at
her aunt’s funeral. Fielding agreed that Charles had not visited her at her current or
previous home. Fielding also testified that she did not know where Charles was
during Hurricanes Rita or Ike, she did not know whether any of her cousins helped
him during the hurricanes, and she had not taken care of Charles or picked up
prescriptions for him.
Another heir, Gwen Renee Pomonis, testified in her deposition as follows:
Q. All right. So, do you have any personal knowledge of any examples
where she exerted undue influence over him?
A. The only thing I can say that I would consider undue influence is
when I would go to visit him she would be there but she would leave
the room and she would be in -- let’s say we were in the living room.
She would be in the kitchen banging dishes around just as hard as she
could, making a lot of noise.
Q. Okay. So, how was that undue influence?
A. I just think she wanted her presence to be known.
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Pomonis testified that she was surprised that Tullos was a beneficiary on the
UBS accounts because Charles had “told [her] several times he wanted [Pomonis]
to go down there and sign paperwork with him.” Pomonis also explained that she
was never able to go with Charles to the UBS office. Pomonis said that, when she
called Charles, “Tullos would screen the calls or not let [her] talk to [Charles] or he
would be completely out of it for the day.” According to Pomonis: she did not spend
holidays with Charles after 2011, and she asked him if he wanted to spend holidays
with her family in 2012 and 2013, but he told her he “couldn’t really leave his house
because of home healthcare[.]” Pomonis also testified that she did not take Charles
with her when she evacuated for Hurricane Rita in 2005 and that her parents told her
that Charles went with Tullos. Pomonis testified that she did clean up Charles’s yard
after the hurricanes.
The deposition excerpts from Donald Hodge and Joe Hodge included in the
appellate record include no testimony about any personal knowledge of undue
influence. Donald Hodge testified that he never visited Charles and that Charles
never visited Donald after 2004. Joe Hodge testified that he visited Charles “a couple
of times[]” between 2004 and 2014, but Charles never promised that he was planning
to leave money or property to Joe.
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Analysis
After conducting a de novo review of the record before us, considering the
motions for summary judgment and responses, and after examining the summary
judgment evidence, the relationship between Tullos and Charles, the opportunity for
influence or deception, the circumstances surrounding execution of the challenged
instruments, the existence or nonexistence of a fraudulent motive, and whether there
was evidence of control by Tullos over Charles when he executed the challenged
instruments, the fairness of and overall intention of Charles to designate Tullos as
the beneficiary of the accounts, and whether there was a genuine issue of material
fact regarding the exertion of undue influence, we conclude the trial court did not err
in granting the summary judgment. See Rothermel, 369 S.W.2d at 923.
Both Hargroder and Ridley testified that they observed Charles to be in control
of his finances and accounts. By contrast, the heirs could not provide any personal
knowledge of Tullos’s alleged undue influence over Charles. Although an
opportunity for influence may have existed because of the close relationship between
Tullos and Charles and because of the degree of care provided by Tullos, opportunity
alone is not sufficient to prove undue influence without evidence of exertion of
influence. See In re Estate of Sidransky, 420 S.W.3d at 96. The record gives no
indication of force, intimidation, duress, persistent requests or demands, or deceit by
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Tullos. See Rothermel, 369 S.W.2d at 922. Consequently, the trial court would not
have erred in concluding that summary judgment evidence offered by Tullos
rebutted any presumption of undue influence. See Saenz, 873 S.W.2d at 359.
There also was no evidence that Charles would not have designated Tullos as
his beneficiary but for the alleged undue influence. See Rothermel, 369 S.W.2d at
922. Hargroder testified that Charles wished to designate Tullos as his beneficiary
in recognition of the care she had provided, and Ridley testified that Charles assured
him that he wished to designate Tullos as the beneficiary. The heirs testified that
they had little contact with Charles and provided little care for him, including a lack
of involvement with Charles during Hurricanes Rita and Ike. As a result, we cannot
say that material issues of fact exist on Plaintiff’s claims for undue influence.
Even assuming without deciding that a fiduciary relationship existed between
Charles and Tullos, and after considering the evidence in the light most favorable to
the nonmovant, we conclude that Tullos was entitled to a summary judgment on the
undue influence claim. Tullos established the fairness of the designations and
rebutted any presumption of undue influence. See Young, 376 S.W.3d at 216; Vogt,
107 S.W.3d at 784. We cannot say the trial court erred in concluding there was no
genuine issue of material fact on the undue influence claim because the undisputed
summary judgment evidence creates no fact issue as to the existence and exertion of
33
an influence by Tullos, the operation of which subverted or overpowered Charles at
the time the beneficiary designations were executed, nor is there a genuine issue of
material fact as to whether Charles would have designated Tullos as his beneficiary
but for undue influence. See Rothermel, 369 S.W.2d at 922; see also Evans, 923
S.W.2d at 715 (evidence of undue influence must not merely create surmise or
suspicion).
We need not address Appellant’s third issue about Appellee’s limitations
defense. See Tex. R. App. P. 47.1; Horton v. Walden Marina, No. 09-15-00491-CV,
2017 Tex. App. LEXIS 9124, at *16 (Tex. App.—Beaumont Sept. 28, 2017, no pet.)
(mem. op.).
We also note that Appellant’s opening and reply briefs on appeal do not
address any error on Plaintiff’s claim for unjust enrichment. An appellant’s failure
to brief an issue effects a waiver of that issue on appeal. See Tex. R. App. P. 38.1(h),
(i); Gen. Servs. Comm’n v. Little-Tex Insulation Co., 39 S.W.3d 591, 598 n.1 (Tex.
2001); Fredonia State Bank v. Gen. Am. Life Ins. Co., 881 S.W.2d 279, 284-85 (Tex.
1994). Likewise, Appellee did not cross-appeal on its counterclaim for attorney’s
fees, and we do not address the attorney’s fee counterclaim because of Appellee’s
waiver thereof. See Tex. R. App. P. 38.1(h), (i); Fredonia State Bank, 881 S.W.2d
at 284-85.
34
We find no error in the trial court’s grant of summary judgment in favor of
Tullos, and in denying the Estate’s requested relief. We overrule all the Appellant’s
issues.
We affirm the judgment of the trial court.
AFFIRMED.
_________________________
LEANNE JOHNSON
Justice
Submitted on June 29, 2018
Opinion Delivered August 30, 2018
Before McKeithen, C.J., Kreger and Johnson, JJ.
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