in the Estate of William Thomas Bell

In The
Court of Appeals
Seventh District of Texas at Amarillo
________________________
No. 07-20-00220-CV
________________________
IN THE ESTATE OF WILLIAM THOMPSON BELL, DECEASED
On Appeal from the County Court at Law
Walker County, Texas
Trial Court No. 9271PR; Honorable Tracy Sorensen, Presiding
September 15, 2021
MEMORANDUM OPINION
Before QUINN, C.J., and PIRTLE and DOSS, JJ.
Appellants, Sharon Hammond and Thomas Vincent Bell, appeal from the trial
court’s order removing them as co-executors of their father’s estate and appointing a
dependent administrator. 1 They challenge the order through two points, both alleging the
trial court abused its discretion in removing them as co-executors without making
1 Originally appealed to the Tenth Court of Appeals, sitting in Waco, this appeal was transferred to
this court by the Texas Supreme Court pursuant to its docket equalization efforts. TEX. GOV’T CODE ANN. §
73.001. Should a conflict exist between precedent of the Tenth Court of Appeals and this court on any
relevant issue, this appeal will be decided in accordance with the precedent of the transferor court. TEX. R.
APP. P. 41.3.
necessary findings and in removing them based on a motion to show cause that did not
seek their removal as the co-executors. We will reverse the trial court’s order and remand
for further proceedings consistent with the opinion herein.
BACKGROUND
Decedent, William Thompson Bell, died on July 28, 2017. Bell was the founder
and majority shareholder of WTBI, a Texas corporation. During his professional life, Bell
accumulated a significant estate valued in excess of $12.5 million. He also secured over
fifty patents, many held in his own name. At the time of his death, interests in those
patents constituted a significant but unvalued asset that belonged to his estate.
Bell was survived by three of his five children, Sharon Hammond, Thomas Vincent
Bell, and Elaine Bell. Bell’s will and codicil provided extensive guidance for the
administration of his estate. Bell’s estate plan generally provided that his property,
including his shares in WTBI, should be distributed in equal shares amongst his children.
Bell’s codicil divides his WTBI stock shares amongst his children and his ex-wife, and
also gives sixty shares of stock to a longtime friend and business partner.
Elaine initiated the probate proceeding on October 17, 2017, when she filed her
application to admit Bell’s will and first codicil into probate. She requested that the trial
court appoint Sharon and Vincent to serve as co-executors as set forth in the will. The
trial court admitted the will and codicil into probate and appointed Sharon and Vincent as
co-executors on November 20, 2017. They qualified as co-executors that day.
Sharon and Vincent began administering the estate but quickly encountered
difficulties collecting information regarding Bell’s WTBI stock and patents. They filed
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several motions requesting more time to complete the inventory of Bell’s estate, partly
due to pending litigation between WTBI and Hunting Titan Ltd./Hunting Titan, Inc.
regarding patent rights that was hindering their ability to secure information required to
value the patent assets. 2 The trial court extended the deadline to file the inventory to July
15, 2020.
On January 23, 2020, Elaine, Bonnie Bell, Scott Berter, and Joseph Brasic
(beneficiaries)3 filed a petition requesting the removal of Sharon and Vincent as co-
executors of Bell’s estate. The beneficiaries objected to Sharon and Vincent’s attempts
to recover Bell’s interests in the patents and in securing a proper valuation of Bell’s
interests in WTBI stock. They expressed a desire to quickly sell their shares of stock
under the terms of the shareholder agreement and they objected to Sharon and Vincent’s
efforts to obtain WTBI’s financial information to determine a fair purchase price for WTBI’s
stock. The beneficiaries complained that the estate had been pending for more than two
years and that the estate’s shares of WTBI stock were not sold to James Rairigh, the self-
appointed president of WTBI.
Sharon and Vincent filed their original answer and asserted specific denials,
affirmative defenses, and special exceptions to the petition. They also contested the
sufficiency of the grounds and the legal standards supporting removal and defended the
fees incurred in collection WTBI’s financial records, arguing for the necessity of collecting
that information to obtain a proper valuation of the estate’s interests in WTBI.
2 This litigation began three years before Bell’s death and concluded two years after his death.
3 These individuals were beneficiaries of Bell’s estate.
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On May 18, 2020, the beneficiaries filed a motion to show cause, asking the trial
court to compel Sharon and Vincent to prepare and file the estate’s inventory. A hearing
on the motion was held on June 12, 2020. On June 16, 2020, the trial court issued the
Order Removing Independent Co-Executors and Appointing Successor Dependent
Administrator. That order reads, in part, as follows:
The Court heard evidence and found that the Respondents were personally
served with citation; that the Movants are persons interested in the Estate;
that Respondents’ grossly excessive spending of estate assets constitutes
gross mismanagement; and that Respondents failed to file an inventory
pursuant to Sections 308.004(b), 309.051 and 361.052(a)(2) of the Texas
Estates Code.
(Cross-outs contained in original).
Thus, the only finding in the court’s order was that Sharon and Vincent’s “excessive
spending of estate assets constitutes mismanagement.” Through this appeal, Sharon
and Vincent seek reinstatement of their positions as co-executors of Bell’s estate.
STANDARD OF REVIEW
We review a trial court’s decision to remove an executor under an abuse of
discretion standard. In re Estate of Clark, 198 S.W.3d 273 275 (Tex. App.—Dallas 2006,
pet. denied); Lee v. Lee, 47 S.W.3d 767, 786 (Tex. App.—Houston [14th Dist.] 2001, pet.
denied). A trial court abuses its discretion if its decision is arbitrary, unreasonable, and
without reference to any guiding rules and principles. Lee, 47 S.W.3d at 786 (citing
Goode v. Shoukfeh, 943 S.W.2d 441, 446 (Tex. 1997)).
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ISSUE ONE—ABUSE OF DISCRETION IN REMOVING CO-EXECUTORS WITHOUT MAKING
NECESSARY FINDINGS
Via their first issue, Sharon and Vincent argue the trial court abused its discretion
when it removed them without making necessary findings that they grossly mismanaged
or grossly misused the estate’s assets.
Sections 404.003 and 404.0035 of the Texas Estates Code set forth the reasons
an independent executor may be removed. Those provisions provide as follows:
The probate court, on the court’s own motion or on the motion of any
interested person, and without notice, may remove an independent
executor appointed under this subtitle when:
(1) the independent executor cannot be served with notice or other
processes because:
(A) the independent executor’s whereabouts are unknown;
(B) the independent executor is eluding service; or
(C) the independent executor is a nonresident of this state
without a designated resident agent; or
(2) sufficient grounds appear to support a belief that the independent
executor has misapplied or embezzled, or is about to misapply or
embezzle, all or part of the property committed to the independent
executor’s care.
TEX. ESTATES CODE ANN. § 404.003.
(b) The probate court, on its own motion or on motion of any interested
person, after the independent executor has been cited by personal
service to answer at a time and place set in the notice, may remove an
independent executor when:
(1) the independent executor fails to make an accounting which
is required by law to be made;
(2) the independent executor is proved to have been guilty of
gross misconduct or gross mismanagement in the
performance of the independent executor’s duties;
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(3) the independent executor becomes an incapacitated person,
or is sentenced to the penitentiary, or from any other cause
becomes legally incapacitated from properly performing the
independent executor’s fiduciary duties; or
(4) the independent executor becomes incapable of properly
performing the independent executor’s fiduciary duties due to
a material conflict of interest.
TEX. ESTATES CODE ANN. § 404.0035.
Courts have previously held that “gross misconduct” and “gross mismanagement”
included, at a minimum: (1) any willful omission to perform a legal duty; (2) any intentional
commission of a wrongful act; and (3) any breach of a fiduciary duty that results in actual
harm to a beneficiary’s interests. In the Estate of Miller, 243 S.W.3d 831, 840-41 (Tex.
App.—Dallas 2008, no pet.) (citing Sammons v. Elder, 940 S.W.2d 276, 283 (Tex. App.—
Waco 1997, writ denied)). However, in Kappus v. Kappus, the Supreme Court set forth
an apparently less strict standard, stating the use of the adjective “gross,” which means
“glaringly obvious” or “flagrant,” indicates that “something beyond ordinary misconduct
and ordinary mismanagement is required to remove an independent executor.” In re
Estate of Jones, Nos. 13-11-00664-CV, 13-11-00692-CV, 2012 Tex. App. LEXIS 7423,
at *12 (Tex. App.—Corpus Christi Aug. 27, 2012, no pet.) (mem. op.) (citing Kappus v.
Kappus, 284 S.W.3d 831, 836 (Tex. 2009)).
Sharon and Vincent argue that the beneficiaries asked the trial court to make
findings that they failed to provide an inventory pursuant to sections 308.004(b), 309.015,
and 361.052(a)(2) of the Texas Estates Code and that they grossly mismanaged the
estate’s property. However, the trial court struck the language in the Order pertaining to
both of those findings. Consequently, the only finding in the court’s order was that Sharon
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and Vincent’s “excessive spending of estate assets constitutes mismanagement.”
Sharon and Vincent contend this shows the trial court made the “opposite findings” and
thus, they should not have been removed as co-executors of Bell’s estate. Moreover,
they assert that even though the trial court found they mismanaged the estate’s assets
through excessive spending, this finding was an impermissible basis on which to remove
them as co-executors.
Sharon and Vincent argue on appeal that the “true reason the Co-Executors were
removed was the trial court’s expressed concern that it could be personally liable for
waste of the Estate’s assets.” They note the trial court “repeatedly expressed this concern
before and after the show cause hearing, and declared its preference to appoint a third
party to administer the Estate.” The trial court stated that it believed it was better to “get
an independent third party to get involved and actually get things done, whether people
want it done or not.” This, Sharon and Vincent argue, is not a legally permissible basis
for their removal under either section 404.003 or 404.0035 of the Texas Estates Code.
The beneficiaries disagree, arguing that the evidence before the trial court included
expenditures by Sharon and Vincent of over $180,000.00 over a span of nine months,
just in attorney’s fees for one attorney. They argue that such expenditures are
unnecessary in most cases, especially one like this which was an uncontested estate
administration. They questioned also Sharon and Vincent’s payment of $375,000.00 in
tax liability after retaining H&R Block instead of a certified public accountant. Further, the
beneficiaries allege that Sharon and Vincent “showed a pattern of a lack of complete
transparency” when they “arbitrarily redacted check images” for the estate’s December
31, 2019 bank account statement while leaving other check images unredacted.
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While Sharon and Vincent argue that the trial court made findings against gross
mismanagement when it struck the language in the Order as set forth above, the
beneficiaries argue that the trial court’s finding that their “excessive spending of estate
assets constitutes mismanagement” clearly indicates a breach of Sharon and Vincent’s
fiduciary duties to the estate that resulted in actual harm to the beneficiaries’ interests.
That finding, they assert, is a finding of gross mismanagement under Texas case and
statutory law even if the word “gross” was not used or included in the written order.
The beneficiaries argue that ample evidence existed to support the trial court’s
removal of Sharon and Vincent as co-executors. They note that nearly three years had
passed since Bell died and two and a half years since Sharon and Vincent were appointed
as co-executors. Further, Sharon and Vincent were granted five extensions to file the
inventory for the estate. Despite these extensions, only an interim inventory had been
filed and that inventory was not approved by the trial court. The beneficiaries also point
out the trial court’s concern over leaving them as co-executors to oversee a sizeable
estate when little had been accomplished in the previous two and a half years. The court
noted Bell would not have executed a nineteen-page will and codicils and “would not have
continued to try to make sure his estate was taken care of if he knew someone was going
to get appointed and then sit on it for three years.” Lastly, the beneficiaries note the
testimony of Sharon and Vincent. Sharon testified she had been signing documents
without reading them and Vincent suffered a brain injury and had some difficulty in
answering certain questions. All of this, the beneficiaries contend, raised red flags for the
trial court and constituted sufficient evidence for removal of Sharon and Vincent as co-
executors of Bell’s estate.
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In their reply brief, Sharon and Vincent argue that the trial court abused its
discretion when it removed them as co-executors of Bell’s estate for alleged “excessive
spending” because that is not a proper ground for removal and that such spending cannot
constitute gross mismanagement per se as asserted by the beneficiaries. They re-urge
their argument that by striking certain language in the Order, the trial court “made findings
that Co-Executors did not grossly mismanage the Estate’s assets.” They contend also
that no such finding can be imputed. Sharon and Vincent argue that the beneficiaries’
reliance on In re Estate of Miller, 243 S.W.3d at 840-41, for that proposition is inapposite
to the facts of this case.
In In re Estate of Miller, the court ordered the removal of the independent executor
for gross mismanagement and entered findings of fact noting that the delay in the
administration and closing of the estate constituted gross mismanagement of the affairs
of the estate. In re Estate of Miller, 243 S.W.3d at 841, n.2. Sharon and Vincent argue
that no such findings were made here and further that the trial court struck all language
in the Order pertaining to gross mismanagement. They note also that the beneficiaries
did not allege any breach of fiduciary duty in their Motion to Show Cause or in any other
pleading before the trial court. Consequently, the beneficiaries failed to meet their burden
for removal under sections 404.003 or 404.0035 of the Texas Estates Code and the trial
court erred in entering the Order removing Sharon and Vincent as co-executors.
Based on the language of the trial court’s order, the only finding it made was that
Sharon and Vincent’s “excessive spending of estate assets constitutes mismanagement.”
It clearly did not find their actions to be “gross.” Nor did it make any findings regarding
the adequacy or lack of an inventory. Thus, we are left with determining whether there
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were sufficient grounds to support a belief that Sharon and Vincent misapplied all or part
of the property committed to their care. TEX. ESTATES CODE ANN. § 404.003(2). We agree
with the beneficiaries and with the trial court that Sharon and Vincent spent significant
funds from the estate paying attorneys for investigation that might not be relevant. We
agree also that Sharon and Vincent have done little to administer the estate in the years
in which they have been appointed. However, because under Kappus, any ground
supporting removal must be “glaringly obvious” or “flagrant” and “something beyond
ordinary misconduct and ordinary mismanagement” must be shown to support removal
of an independent co-executor, we cannot find that burden was met here. Kappus, 284
S.W.3d at 836. We sustain Sharon and Vincent’s first issue.
ISSUE TWO—ABUSE OF DISCRETION IN REMOVING CO-EXECUTORS IN RESPONSE TO
MOTION TO SHOW CAUSE
In their second issue, Sharon and Vincent contend the trial court abused its
discretion when it removed them in response to a motion to show cause that did not
request their removal and therefore granted relief in excess of the parties’ pleadings.
They argue that the basis for the show cause hearing was a contention that Sharon and
Vincent had failed to produce an inventory. The motion to show cause did not request
the removal of Sharon and Vincent as co-executors of Bell’s estate and therefore, they
assert, the trial court abused its discretion in removing them. In their reply brief, Sharon
and Vincent distinguish the case relied on by the beneficiaries, In re Estate of Washington,
262 S.W.3d 903, 906-07 (Tex. App.—Texarkana 2008, no pet.), arguing that the case
“merely affirmed that a court can remove an executor for failing to make an accounting
and did not address the removal of an executor for gross mismanagement.” They again
argue that the finding made by the trial court was that “[Co-Executors’] spending of estate
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assets constitutes mismanagement” and that this finding was insufficient for removal
under the applicable statutes, irrespective of whether that removal was on motion of the
beneficiaries or sua sponte by the trial court.
The motion to show cause in the record states as the basis for relief the failure of
Sharon and Vincent to file an inventory. 4 While we agree that the record indicates they
did file an interim inventory in advance of the extended deadline in which to do so, we
find that the trial court was within its power, on its own motion and authority, to remove
them as co-executors if the proper grounds were supported. See TEX. ESTATES CODE
ANN. §§ 404.003; 404.0035; In re Estate of Washington, 262 S.W.3d at 906. As such, we
cannot agree with Sharon and Vincent’s argument that the trial court granted relief in
excess of the beneficiaries’ pleadings. Accordingly, we overrule their second issue.
CONCLUSION
We reverse the trial court’s order removing Sharon and Vincent as co-executors
of Bell’s estate and remand for further proceedings.
Patrick A. Pirtle
Justice
4 We also acknowledge that the motion cited sections 308.004(b), 309.051, and 361.052(a)(2) of
the Texas Estates Code. Those sections apply to dependent administrators rather than independent
executors such as Sharon and Vincent. Nevertheless, we find the record indicates Sharon and Vincent
filed an interim inventory on May 26, 2020, in advance of the extended July 15, 2020 deadline.
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