in the Guardianship of Bobby Esther Walzel, an Incapacitated Person

NUMBER 13-08-00509-CV
COURT OF APPEALS
THIRTEENTH DISTRICT OF TEXAS
CORPUS CHRISTI - EDINBURG
IN THE GUARDIANSHIP OF
BOBBY ESTHER WALZEL, AN INCAPACITATED PERSON
On appeal from County Court at Law No. 5
of Nueces County, Texas.
MEMORANDUM OPINION
Before Chief Justice Valdez and Justices Yañez and Benavides
Memorandum Opinion by Justice Benavides
Allen Dean Walzel (“Allen”), appellant, appeals from the trial court’s order appointing
Sherry Ann Morrow (“Sherry”), appellee, as the guardian of the person and estate of Bobby
Esther Walzel (“Bobby”).1 On appeal, Allen asserts that the trial court abused its discretion
by finding that Sherry was eligible to be Bobby’s guardian and appointing her Bobby’s
guardian. We affirm.
1
Specifically, the trial court ordered that Sherry Morrow be appointed guardian of the person of Bobby
W alzel and the guardian of the estate of Bobby W alzel for the “lim ited purpose of receiving and distributing
funds from the [Trust Account] according to the term s of the Trust Account and for the lim ited purpose of
assisting Bobby Ester [sic] W alzel with financial m atters related to the [M ]anagem ent [T]rust including the
signing of tax returns.”
I. BACKGROUND
Bobby Walzel is an elderly woman with two children, Sherry Morrow and Allen
Walzel. Until November 2006, she resided in Alice, Texas. On Thanksgiving Day,
November 23, 2006, Terry Morrow (“Terry”), Sherry’s husband, found Bobby in her house
in Alice, alone, without electricity. Bobby had failed to pay her electricity bill and file her tax
returns for several years. On November 24, 2006, after letting Bobby stay overnight in her
own home in Alice, Sherry and Terry picked Bobby up and moved her into their house in
Corpus Christi, Texas. On December 20, 2006, Bobby signed a statutory durable power
of attorney appointing Sherry as her agent. See TEX . PROBATE CODE ANN . § 482 (Vernon
2003).
A. Procedural History
On January 7, 2008, Allen filed his “Application for the Appointment of Permanent
Guardian of the Person and Estate and Request for Injunctive Relief,” wherein he sought
to be appointed the guardian of Bobby’s person and estate. That same day, the trial court
granted Allen’s requested temporary restraining order which, in part, prohibited Sherry from
making withdrawals from any checking account in which Bobby had an interest and signing
Bobby’s name on any negotiable instrument. The trial court also appointed Mark Stolley
to be Bobby’s attorney ad litem.
On January 15, 2008, Sherry filed her “Original Answer to Request for Injunctive
Relief, Contest to Allen D. Walzel’s Application for Appointment of Permanent Guardian,
and Sherry Ann Morrow’s Application for Appointment of Permanent Guardian.” Sherry
sought to be appointed the guardian of Bobby’s person and estate.
On March 24, 2008, the trial court created a section 867 “Management Trust.” See
id. § 867 (Vernon Supp. 2009). The trial court ordered Bobby’s funds to be placed in the
Management Trust. On April 16, 2008, the trial court appointed Sherry the temporary
guardian of Bobby’s person. See id. § 875(k) (Vernon Supp. 2009).
This matter proceeded to a bench trial on June 11-12, 2008, during which Sherry,
Allen, and Stolley testified. All parties stipulated that the Management Trust should remain
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in effect.
B. Trial Testimony and Evidence
1. Sherry’s Testimony
Allen called Sherry as his first witness in his case-in-chief. Sherry testified that after
Bobby moved into Sherry’s home in late November 2006, Sherry became a signor on
Bobby’s bank account at Texas Champion Bank (“Champion”), which was funded
exclusively with Bobby’s money from Social Security and retirement checks along with
distributions from Bobby’s investment account. Sherry did not contribute any of her own
funds to the Champion account.
On May 8, 2007, the balance of the Champion account was transferred to a new
account opened at Frost Bank (“Frost”). The Frost account was a joint account in Bobby,
Sherry, and Terry’s names. Sherry was a signor on the Frost account, which was also
funded exclusively with Bobby’s money, including money Sherry received from selling
Bobby’s car.
Sherry wrote myriad checks to “cash” out of both accounts. Allen argues that Sherry
“tendered no receipts for any expense paid with cash,” but our review of the record
revealed multiple receipts for cash transactions. However, Sherry admitted that she could
only provide receipts for approximately half of the transactions paid for with cash generated
from these checks. Sherry summarized that the cash was for Bobby’s “spending money,
beauty shop, pedicure, groceries, gasoline, utilities, cable, phone, eating out” and “taking
care of Mom, and also our taking care of Mom’s house.”
Sherry said that $200 or $300 from each check written to cash out of the Champion
account was for spending money, which she gave to Bobby to “carry around.” Once the
funds in the Champion account were transferred to the Frost account, Sherry held on to
the spending money, and “[w]hen [Bobby] wanted things, [Sherry] said, Mom, I have the
money.” She would then buy Bobby whatever it was Bobby wanted. The rest of the
money Sherry received from checks she wrote to cash out of the Frost account went to
expenses, including all of Sherry’s household expenses during the time Bobby had been
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living with her prior to the establishment of the Management Trust. She did not allocate
these expenses between Bobby and herself.
Sherry used money from the Frost account to cover repairs to her and Terry’s
vehicles, for her own dental services, and for her own cell phone bills. Sherry used a debit
card from the Frost account to pay for household supplies at Wal-Mart on several
occasions, and she did not have receipts for any of the Wal-Mart expenses. The
statements from the Frost account also indicated several deposits less cash of various
amounts. Sherry testified that the cash was used for expenses, and she only had receipts
for about half of those expenditures.
Sherry stated that in late 2006 or in January 2007, Bobby agreed to pay for Sherry’s
labor costs and to pay Sherry rent while Bobby was living in Sherry’s home. Sherry also
asserted that Bobby agreed to pay for all of the utilities, groceries, phone, and cable.
Sherry testified that the agreement was oral and that she had not reduced the agreement
to writing. Allen’s counsel asked Sherry, “[Bobby] made this decision with you to pay
whatever you wanted for whatever you wanted to pay it for? Is that basically what you are
telling us?” Sherry replied, “Whatever I needed. [Bobby] said whatever I needed, just use
her money.”
2. Capacity Evidence
Allen and Sherry both tendered physician’s reports for the trial court’s review.
Sherry presented the report of Ernesto Guido, MD, a neurologist, who examined Bobby on
four different occasions: January 18, 2007; March 19, 2007; July 17, 2007; and February
6, 2008. Following each visit, Dr. Guido noted that Bobby has dementia of the Alzheimer’s
type. During the January 18, 2007 visit, Dr. Guido determined that Bobby “has a history
of progressive dementia for the last several years.” Dr. Guido ordered Bobby to continue
taking one medication previously prescribed by a different doctor and added an additional
medication to her regimen.
Allen provided the report of Joel Kutnick, MD, a psychiatrist, who evaluated Bobby
on February 12, 2008. Dr. Kutnick concurred with Dr. Guido’s diagnosis that Bobby has
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“Dementia of the Alzheimer’s Type.” Dr. Kutnick also noted that, as of February 12, 2008,
he did not have enough information to determine when Bobby “became incompetent for
legal affairs” but that there is “a possibility that [Bobby] did not fully understand” what she
was doing when she signed the power of attorney in December 2006 and that there was
“marked confusion around Thanksgiving 2006.” On March 25, 2008, Dr. Kutnick filed an
addendum to his evaluation. In the addendum, Dr. Kutnick noted that one of Allen’s
attorneys wanted to know whether Bobby was competent during November and December
2006. He “was supplied a number of names who are friends” of Bobby, and, after
speaking with these individuals, Dr. Kutnick concluded that “it does appear around two or
three years ago, Bobby Walzel became so confused that [he] doubt[s] she could really
comprehend the meaning of a Power of Attorney,” and that he did “not think she was
competent to sign any legal document.”
Sherry also offered the deposition of Gary Waldrop, the attorney who prepared the
power of attorney on December 20, 2006. Waldrop said that he spent about an hour
visiting with Bobby, Sherry, and Terry. He did not notice anything regarding Bobby’s
demeanor that caused him to believe Bobby was under duress or did not understand what
she was doing when she signed the power of attorney. He discussed the various
provisions in the power of attorney document and the powers it vested in Sherry. Bobby
appeared to understand these provisions. Waldrop did not know that Bobby may have
been suffering from Alzheimer’s at that time, and “[i]t would have been important if [he] had
known she was an Alzheimer’s patient.” Waldrop asserted, “[I]n my opinion, [Bobby] knew
exactly what she was signing. She knew exactly what she was doing.”
3. Attorney Ad Litem’s Testimony
Mark Stolley, Bobby’s attorney ad litem, stated that he believed both parties came
to the court with unclean hands,2 but that he knows Bobby’s money is currently being
2
There was significant testim ony and evidence relating to a $15,000 dollar loan or gift Bobby gave
to Allen and other dealings between Bobby and Allen which Sherry asserted am ounted to a debt Allen owed
Bobby. However, on appeal, Sherry does not challenge the trial court’s finding that Allen is eligible to serve
as Bobby’s guardian; therefore, a review of Allen’s eligibility is not pertinent to the resolution of Allen’s appeal,
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safeguarded by the Management Trust. Stolley noted that Bobby told him she wanted to
continue living with Sherry because Sherry can provide around-the-clock care. He
recommended to the trial court that it would be in Bobby’s best interest to keep the
Management Trust in place, that Bobby continue to live with Sherry, and that Sherry be
appointed guardian of the person of Bobby Walzel.
C. Trial Court’s Order
Having received all of this evidence and having heard the testimony of Allen, Sherry,
and Stolley, the trial court declared Bobby to be totally incapacitated. The trial court also
found that both Allen and Sherry were eligible to be Bobby’s guardian and appointed
Sherry guardian of the person and estate of Bobby Walzel. The trial court determined that
Sherry was indebted to Bobby in the sum of $1,197.81 for Sherry’s personal expenses paid
for with Bobby’s funds. The trial court ordered Sherry to pay $1,197.81 within five days
after the signing of the order and that Letters of Guardianship be issued to Sherry upon the
payment of the debt. Sherry paid the debt. On August 25, 2008, the trial court filed
findings of fact and conclusions of law. See id. § 693 (Vernon Supp. 2009). This appeal
ensued.
II. STANDARD OF REVIEW
We review the appointment of a guardian for abuse of discretion. Saldarriaga v.
Saldarriaga, 121 S.W.3d 493, 497 (Tex. App.–Austin 2003, no pet.) (citing Trimble v. Tex.
Dep’t of Protective & Regulatory Svcs., 981 S.W.2d 211, 214 (Tex. App.–Houston [14th
Dist.] 1998, no pet.)). The trial court abuses its discretion when it fails to follow guiding
rules and principles or acts in an unreasonable or arbitrary manner. Id. “A trial court has
no discretion in determining what the law is or applying the law to the facts.” Landreth v.
Las Brisas Council of Co-Owners, Inc., 285 S.W.3d 492, 496 (Tex. App.–Corpus Christi
2009, no pet.).
A trial court does not abuse its discretion when it bases its decision on conflicting
and we need not address this evidence. T EX . R. A PP . P. 47.1.
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evidence, yet a factual decision is an abuse of discretion when there is no evidence to
support it. In re Barber, 982 S.W.2d 364, 366 (Tex. 1998); see also WCM Group, Inc. v.
Brown, No. 13-08-00305-CV, 2009 WL 3861010, at *6 (Tex. App.–Corpus Christi Nov. 19,
2009, no pet. h.). “A trial court does, however, abuse its discretion when its decision is
contrary to the only permissible view of the evidence.” Barber, 982 S.W.2d at 366 (citing
Walker v. Packer, 827 S.W.2d 833, 840 (Tex.1992)). “The trial court does not abuse its
discretion if some evidence reasonably supports the trial court's decision.” In re
Guardianship of Erickson, 208 S.W.3d 737, 743-44 (Tex. App.–Texarkana 2006, no pet.)
(citing Furr's Supermarkets, Inc. v. Bethune, 53 S.W.3d 375, 379 (Tex. 2001)).
Under the abuse of discretion standard, “[w]e do not conduct an independent review
of findings of fact . . . under traditional legal and factual sufficiency standards.” In re Keller,
233 S.W.3d 454, 459 (Tex. App.–Waco 2007, pet. denied). Instead, the legal and factual
sufficiency of the evidence to support the trial court’s findings of fact are factors to be
considered but not independent grounds for reversal. Trimble, 981 S.W.2d at 215 (citing
IKB Indust. (Nigeria) Ltd. v. Pro-Line Corp., 938 S.W.2d 440, 445 (Tex. 1997)).
III. APPLICABLE LAW
Prior to appointing a guardian, the trial court must find by clear and convincing
evidence that:
(1) the proposed ward is an incapacitated person;
(2) it is in the best interest of the proposed ward to have the court appoint a
person as guardian of the proposed ward; and
(3) the rights of the proposed ward or the proposed ward's property will be
protected by the appointment of a guardian.
TEX . PROBATE CODE ANN. § 684(a)(1)-(3) (Vernon 2003). Additionally, prior to appointment,
the trial court must also find by a preponderance of the evidence that:
(1) the court has venue of the case;
(2) the person to be appointed guardian is eligible to act as guardian and is
entitled to appointment, or, if no eligible person entitled to appointment
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applies, the person appointed is a proper person to act as guardian; [and]
....
(4) the proposed ward is totally without capacity as provided by this code to
care for himself or herself and to manage the individual's property, or the
proposed ward lacks the capacity to do some, but not all, of the tasks
necessary to care for himself or herself or to manage the individual's
property.
Id. § 684(b)(1), (2), (4). The applicant has the burden to prove each element. Id. § 684(c).
“The court shall appoint a guardian for a person other than a minor according to the
circumstances and considering the best interests of the ward.” Id. § 677(a) (Vernon 2003).
If two or more persons are eligible to be appointed guardian and none of those eligible are
the proposed ward’s spouse, then the court shall appoint the person nearest of kin to the
ward. Id. § 677(a)(2). If there is no eligible spouse and there are two or more eligible
kinsmen who are related to the ward at the same degree of kinship, then the court shall
appoint the kinsman best qualified to serve. Id. § 677(a)(3)(B). A person indebted to the
ward is ineligible to be appointed guardian unless that person pays the debt before
appointment. Id. § 681(5) (Vernon Supp. 2009).
A person appointed attorney in fact or agent under a statutory durable power of
attorney “is a fiduciary and has a duty to inform and to account for actions taken pursuant
to the power of attorney.” Id. § 489B(a) (Vernon 2003). “A fiduciary owes her principal a
high duty of good faith, fair dealing, honest performance, and strict accountability.” Vogt
v. Warnock, 107 S.W.3d 778, 782 (Tex. App.–El Paso 2003, pet. denied) (citing Sassen
v. Tanglegrove Townhouse Condominium Ass'n, 877 S.W.2d 489, 492 (Tex.
App.–Texarkana 1994, writ denied)). “[F]iduciary status does not prohibit the beneficiary
from giving the fiduciary gifts or bequests; instead, it insures that the fiduciary will be
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prepared to prove the transaction was conducted with scrupulous fairness.” Id. at 784.
Regardless of whether a fiduciary acts under the power of attorney, the execution of “the
power of attorney conclusively establishe[s] the fiduciary relationship.” Id. at 782.
IV. ANALYSIS
Allen argues that the evidence supporting the trial court’s decision is legally and
factually insufficient to support the trial court’s decision. Allen contends that the evidence
conclusively established that Sherry owed substantially more than the $1,197.81 found by
the trial court and that Sherry’s inability to produce receipts for all of the cash transactions
was a violation of her fiduciary duty to Bobby. Id. Allen concludes that because Sherry
was indebted to Bobby, she was ineligible to be appointed guardian and that the trial court
abused its discretion in appointing her guardian. See TEX . PROBATE CODE ANN . § 681(5)
(providing that a person indebted to the proposed ward is ineligible to be appointed
guardian unless she pays the debt prior to appointment).
In addition to testifying about the oral agreement between Bobby and herself, Sherry
contends that she did not violate her fiduciary duty to Bobby because she had signing
authority on the Champion and Frost accounts and therefore did not use the power of
attorney to write the checks to cash. While under Vogt, Sherry’s argument is incorrect, we
agree that Sherry satisfied her burden to demonstrate that the transactions were fair to
Bobby and that the trial court did not abuse its discretion in concluding that the evidence
demonstrated Sherry only owed Bobby $1,197.81. See Vogt, 107 S.W.3d at 782, 784.
A. Fiduciary Duty
Contrary to Allen’s implied assertion, Sherry’s fiduciary duty to Bobby did not require
her to present receipts for each expense paid for with cash from the bank accounts.
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Sherry’s fiduciary duty required her to demonstrate that the transactions were “conducted
with scrupulous fairness” to Bobby. Vogt, 703 S.W.3d at 784.
Sherry testified that the agreement between her and Bobby that she could use
Bobby’s funds for “[w]hatever [she] needed” included a commitment to pay Sherry’s labor
costs, utility bills, phone bills, and rent. On December 31, 2007, Sherry provided Bobby
an invoice detailing the amount Sherry spent on each of these expenses. Sherry testified
that she arrived at these amounts by adding up all of the expenses listed in the Champion
and Frost account statements, subtracting those for which she had receipts, those costs
which she could estimate and $300 for rent for thirteen months, and then the remainder
she concluded was her labor cost for taking care of Bobby during 2007.3
Allen argues that the lack of receipts for many of these expenditures indicates that
Sherry must have used these funds for her own personal benefit. Sherry’s burden was to
demonstrate that the transactions were fair to Bobby, see Vogt, 703 S.W.3d at 784, and
Allen did not present any evidence contradicting Sherry’s claim that Bobby agreed to
Sherry’s use of her money. Instead, Allen attacked Bobby’s capacity to make any
agreement regarding her financial affairs.
Allen asserted that Dr. Kutnick’s report, along with Dr. Guido’s reports, questioned
Bobby’s competence to make such an agreement or to understand legal documents during
late 2006 or early 2007. However, neither doctor stated a date certain upon which Bobby
was incapacitated. See Carney v. Aicklen, 587 S.W.2d 507, 509, 510-11 (Tex. Civ.
3
The charges on the invoice were as follows: $26,932.06 for labor; $3,900 for rent; $6,360.06 for
utilities (electricity, water and gas); $1,442.29 for cable; $554.36 for phone; $8,960 for groceries; $1,120 for
beauty shop expenses; $244 for pedicures; $600 for gasoline; and $1,000 for eating out. The invoice stated,
“Total care for m y m other in 2007 [was] $51,567.77.”
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App.–Tyler 1979, writ ref’d n.r.e.) (concluding that ward became incapacitated on date that
treating physician declared her to be incapacitated and was, at that point, incompetent to
agree to her money being distributed to her nieces). Additionally, Waldrop, the attorney
who prepared the power of attorney on December 20, 2006, asserted his opinion that
Bobby knew what she was doing when she signed the power of attorney.
The trial court was the fact-finder, and it was within its province to weigh the
evidence, to assess credibility, and to accept or reject any testimony in whole or in part.
See Welborn Mortg. Corp. v. Knowles, 851 S.W.2d 328, 332 (Tex. App.–Dallas 1993, writ
denied). Sherry demonstrated that the expenditures were for taking care of Bobby and
with Bobby’s agreement. On appeal, we will not second-guess the trial court’s assessment
of the conflicting evidence, and on this record, we conclude that Sherry satisfied her
burden to prove that the transactions were fair to Bobby.
B. Amount of Debt Owed
The trial court determined that Sherry was indebted to Bobby and ordered her to pay
$1,197.81 for the expenditures which were for her personal benefit.
The record contains evidence: (1) that Bobby agreed to allow Sherry to use her
funds for whatever Sherry needed; (2) that Bobby may or may not have been incapacitated
at the time she made such an agreement; (3) that Sherry used cash generated from
checks she wrote to cash from Bobby’s bank accounts to pay for expenses for taking care
of Bobby; (4) that some of this cash was used to pay for Sherry’s personal expenses; and
(5) of the labor costs associated with caring for Bobby. Specifically, the evidence
demonstrated that Sherry used Bobby’s funds for her own benefit in the following
transactions: (1) Sherry’s dental work; (2) Sherry’s cell phone bill; and (3) repairs to Sherry
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and Terry’s vehicles. Except for these transactions, there was no evidence that the
unaccounted-for cash expenditures were used exclusively for Sherry’s benefit.
Reviewing the record as a whole under the abuse of discretion standard, Trimble,
981 S.W.2d at 214, we find that the trial court did not abuse its discretion. Where, as here,
the trial court bases its decision on conflicting evidence, it does not abuse its discretion.
See Barber, 982 S.W.2d at 366. The trial court’s decision is not contrary to the only
permissible view of the evidence. Id. Some evidence reasonably supports the trial court’s
conclusion, and even if we may have decided the issue differently, we will not substitute
our judgment for the trial court’s. Erickson, 208 S.W.3d at 743. We overrule Allen’s
appellate issue.
V. CONCLUSION
Having found that the trial court did not abuse its discretion by finding that Sherry
was indebted to Bobby for $1,197.81, ordering Sherry to repay that amount, and then
appointing Sherry guardian of Bobby, we affirm the trial court’s order.
_______________________________
GINA M. BENAVIDES,
Justice
Delivered and filed the
28th day of January, 2010.
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